Productivity, efficiency, and effectiveness are different but closely related concepts. However, distinguishing these concepts is not the aim of this article. Apart from a few examples, we will use the word ‘effectiveness’ throughout.
According to reports from the International Labour Organization (ILO) or the Vietnam National Productivity Institute, Vietnamese labor productivity is only 1/15 of Singapore's, 1/11 of Japan's, 1/10 of South Korea's, and 1/5 of Malaysia's. At the recent rate of productivity growth, Vietnam will need… another 50 years to catch up with Thailand.
We are at the “bottom of the depression.”
If this situation does not change with Vietnam’s next startup generation, then when?
So what is the key to the door of Effectiveness?
The world always needs you to focus.
Now, if you still do not remember this, repeat it 3 times.
The world always needs you to focus.
The world always needs you to focus.
The world always needs you to focus.
Focus itself also needs… focus. You need to direct your attention to 3 areas: Strategy – Markets, Investment – Capabilities, and Processes – Operations.
On the Strategy – Market aspect
This means a business needs very clear Market Segmentation, focusing on a highly specific target customer segment. When you are just starting up, saying ‘My business sells to everyone’ means ‘My business cannot sell to anyone’ (unless you are Vingroup). Likewise, doing business with the attitude ‘I sell to whoever needs it’ means either you are keeping your trade secrets and do not want to reveal your target customer segment, or you are acting haphazardly, flailing about in total confusion. Doing business that way will not put you on a path of sustainable development.
When the market and customers are specific, our products or services are specific, and so is our strategy.
Lack of specificity is the… grandfather of impossibility.
One “temptation” startups often face is trying to serve many customer segments with very different needs. As a result, they cannot allocate their limited resources effectively to meet every customer's needs well. That is their Waterloo, when stretching across multiple fronts spelled certain defeat for Napoleon.
The smaller the startup, the more it must focus!
On the Investment – Capability aspect
You have probably heard of a business's “Core Competencies” or “Core Competitive Advantages.”
Resources that do not create your Core Competencies need no investment; instead, the startup should Outsource them rather than build and maintain them itself, wasting money and exhausting its capital.
For example, a technology business that interacts with customers online does not need a 100 m2 office in a Grade A Building in District 1 as soon as it starts. Asked why, the rather ‘naive’ answer is: to look impressive. The ‘office’ function could be outsourced by renting a virtual office, for instance.
A straightforward trading business does not initially need to maintain its own accounting department; it can outsource accounting.
A straightforward service business does not initially need to maintain an entire IT department just to occasionally reinstall Windows for the bosses; it can outsource IT to a reliable partner.
An e-commerce business whose model is selling online, starting with little capital and growing from its own funds, does not need to solve delivery itself. It should select and outsource to several partners (not just 1) to deliver to customers' homes. Mistakes will happen, but understand that an acceptable rate is still OK—better than building it yourself without the expertise, getting nowhere and having no mental energy left to grow customer volume, ultimately losing both money and peace of mind. The business itself should focus on growing customer numbers, sales, customer care, and user experience.
The smaller the startup, the more it must outsource!
On the Process – Operations aspect
In the startup process, activities are divided into 2 types: value-adding activities and non-value-adding activities.
For example, sales and brand promotion create added value, while moving components along a production line and waiting their turn for assembly into finished goods do not themselves add value. Good production management therefore minimizes machine waiting time and excessively long movement between stages. At some point, the whole system is called Optimized (Optimization)
For example: Salespeople create customer value through activities such as building relationships, introducing/presenting products or services, and receiving customer feedback. Activities that do not create customer value, such as internal reporting and preparing quotations, must be simplified.
The smaller a business is, the more it must simplify and streamline its operating processes!
Focus helps you realize your full potential and open wide the door to Effectiveness.
The sun is as hot as 5,700 degrees Celsius, yet because it spreads its “resources,” its sunlight reaching the earth does not immediately harm anyone; it only tans our skin or… causes skin cancer with prolonged exposure in areas where the ozone layer is damaged. A laser beam has a far lower temperature, but it is focused and concentrated into a single point, made into a highly destructive laser gun capable of shooting through a person.
That is the power of focus.
This world needs you to focus.
Your customers need you to focus.
Your employees need you to focus.
And… your wife needs your attention too.
TMT
