Improving business performance Case: Kymenlaakso Polytechnic and Local SME co-operation

1. Improving business performanceCase: Kymenlaakso Polytechnic and Local SME co-operation

2. Focus Industries Institutional Changes in the Region SME business problems ? Kymenlaakso Polytechnic ‘PRODUCTS’ Project in brief 1 Metal Metso,Sulzer,Andritz <->SME_network Buildpolis housing, wood, stone, constructing I C T Logistics Other Outsourcing Brain drain Inner city population structure change Generation change … Idea-> product >market Product conceptualisation Managerial accounting Independent marketing Business processes ... MATCH Customer satisfaction < -> Quality Logistics Conference Life cycle Analysis Event marketing Budget system development Marketing Audit . . .

3. Project in brief 2 • Players • Students completing their BBA degree, post BBA students • Teachers tutoring thesis and course projects • Business development personnel in South Kymenlaakso SME’s • Bodies responsible for industrial development in the region • Outcomes • Networking; between Polytechnic and SME’s, intraSME networks • SME business improvement • Focus industry development • Educational practicability and updating • Regional effectiveness of the Polytechnic

4. Customer fit Customer fit Profit fit Profit fit Marketing Marketing Accounting Accounting capabilities capabilities capabilities capabilities Business Business Process fit Process fit Logistical Logistical capabilities capabilities Project in brief 3 Project implementation • Create a system and a network for tracking core improvement areas in SME business processes • Pilot project development • Bachelor theses and consulting • Reports, publications, portfolios • Business process development, network models … • Project conceptualisation • Polytechnic R & D activity • Improving teachers’ consulting skills • Connecting business competence with Kymenlaakso Polytechnic’s Innovation and technology Park’s R&D activity

5. TWO APPROACHES Product Who ? • Improving our total offering to match with customer needs? • Defining/Designing our total service package? • How to improve our processes ? • Attracting partners for providing a package? • Needs ? • Who are they ? • Decision making ? • Decision makers ? • Satisfaction? • With us ? • Competitor suppliers ? • ‘TOTAL QUALITY’ + ‘VALUE CHAIN’ • PROVIDE ADDED-VALUE REASONS TO CHOOSE US = BRAND • ATTRACT NEW CUSTOMERS • TAKE COMPETITORS CUSTOMERS

6. Profit  Which Success Factor ? self-assessed capability (mark 1…5) grouped according to the profit (poor…excellent)

7. IMPLEMENTATION PHASE 1 Partner search / Information collection  KK  existing connections / previous theses  market research  marketing projects  Accounting projects  Logistics projects  in web / spring 2003 PHASE 2 Theme interviews  KK  students / Thesis ??  Project supervisor PHASE 3 Problem definition  Thesis supervisor + student + about 3 meetings during thesis process

8. Current situation review (03 05) Thesis for SME’s # 11 in progress # 17 completed Projects for SME’s # 10 completed Thesis for other institutes etc. # 5 in progress # 11 completed Projects/events for other institutes etc. # 1 in progress # 7 completed

9. Results Summary • All together 15 partner companies and 10 other partners. • # 120 students involved • # 40 BBA degrees • Examples from the thesis and the projects • Customer satisfaction studies • New customer hunting projects • CRM plans • Logistical studies • etc.

10. Examples / Projects completed • Theses for SME’s • Customer acquisition • CRM plan • Service concept development • Theses for other institutes (the project as a whole) • IT in Logistics industry (market review) • Brand creation for IT companies • Awareness and image of Kymenlaakso Polytechnics business cooperation • Study projects for SME’s • Customer satisfaction • New customer acquisition (several)) • Feasibility study • Study projects for the projects as a whole • Business training need survey • ICT market review (players; customers) • Environmental Management System in SME’s review • Global SME (Internationalisation review)

11. Example for one SME Customer Value, cus satisfaction - loyalty Kymi Design (brochure, design managemet) Kaihdinlinkki Oy CRM, customer profitability, information management, New customer acquisition; b-tob segmentation+ direct marketing plan Customer profitability application (Manag. Accounting)

12. Higher Degree Continuing studies THESIS Specialisation studies Projects Business Academy Basic Studies ‘well-functioning enterprise’ SME business Success factors and problems

13. Regional Effectiveness LEARNING R & D (& S) Kymenlaakso Polytechnic – SME cooperation

14. CORE IDEAS 1 *) • Polytechnic – Business co-operation works as a part of polytechcnics’ main tasks I.e. TEACHING, R&D (and service activity) AND REGIONAL EFEECTIVENESS • there must be tangible activity, where all these elements are completed at once. LEARNING • the core ’business’ of a polytech is TEACHING or actually, ACTIVITY FOR HELPING TO LEARN • successful business cooperation acts as a powerful tool for better learning • success in projects completed with/for the industry motivates and builds up ’internal entrepreneurship’ (only 5 % actually starts their own business, but demanding study participating projects, taking responsibility bring up better employees, too) • creating a new geration of entrepreneurs needs a feasible, tailored ’entrepreneur-curriculum’ and an incubator network; this network incubator works together with local bodies for business development. *) here ’business co-operation’ is understood in its broad meaning; it includes e.g. study projects for companies, theses, entrepreneurship education (internal entrepreneurship ~bottoms-up intrapreneurship), entrepreneur education (creating new businesses/concepts…(e.g. in incubators)

15. CORE IDEAS 2 REGIONAL EFFECTIVENESS • strategic focus industries chosen consistently with the strategies of local business development authorities • in order to have a substantial impact, large scale activity is needed; hundreds of students and their tutors must be involved • most important tools for co-operation are theses and study projects • teacher training; needs for more ’consultant-like’ approach than traditional academic one. • practices must be co-ordinated; price, quality standards… you shouldn’t give a contradictory image towards your clients • main target group is SME’s (micro or 10-50 employees ??); future employers’ of polytechcs’ graduates. • Better internal co-operation is required for completing ‘total service packages’; faculties must accomplish projects together – business improvement is not a faculty-question

16. CORE IDEAS 3 BOUNDARIES – NEW OPENINGS Generation change of entrepreneurs • E.g., only in Southern Kymenlaakso there are about 4500 companies; more than 1000 of the will face the process of transition in about 5 years. • Polytechnic creates a system where companies likely to develop will get assistance and meanwhile new management will be trained in an incubator. Global SME • Kymenlaakso Polytechnic has about 150 partner universities round the world; they should be explored for finding partners in order to create a network for SME business improvement-internationalisation ( e.g. helping sme’s to take part in exhibititions abroad, accomplish a customer acquisition abroad etc.) • Existing teacher-student exchange is enlarged to contain activities like project cooperation, theses, practical training … • Co-operating in these areas generates options for continuing studies abroad Sustainable development / ecological efficiency • An economically profitable process may (must) be ecologically sustainable as well. Kymenlaakso Polytechnic will generate multi-faculty projects aiming at this.

17. Regional Effectiveness Débarquement in Normandy would never have succeeded by few generals only. What was needed was a huge amount of vessels and frontline combatants. Having few specialised research directors or R&D engineers, a polytechnic cannot provide regional effects. Required is a mass of students (fighters), clearly targeted landing area (focus industries), well done home work and sufficiently logistic support (teachers competent to act as consultants in the projects they coach).

18. Designing and Delivering Superior Customer Value • èCreate customer focus throughout the business. • èListen to the customer. • èDefine and nurture your distinctive competence. • èDefine marketing as marketing intelligence. • èTarget customers precisely. • èManage for profitability - not sales volume. • èMake customer value the guiding star. • èLet the customer define quality. • èMeasure and manage customer expectations. • èBuild customer relationships and loyalty. • èDefine the business as a service business. • èCommit to continuous improvement. • èManage culture along with strategy. • èGrow with partners and alliances. • Destroy marketing bureaucracy. Webster , F.E., Jr. (1994) Executing the new marketing concept, Marketing Management, 3(1 )