The document outlines a 6-stage model for creating and managing advantage over the life cycle of a business: 1) Validate potential advantage, 2) Prove the concept, 3) Confirm initial commercial viability, 4) Secure the business and accelerate growth, 5) Build scale through leveraging advantage, and 6) Continuously innovate through business changes to maximize value. The model is intended to guide entrepreneurs and leaders to minimize risk and maximize returns by focusing on advantage at each stage of a business's evolution.

1. The 6 stages for creating and managing Advantage in the life cycle
“Doing the right things, at the right time, in the right way”
A roadmap for entrepreneurs & business leaders
Why focus on Advantage?
Whether you are starting, scaling or resetting a business your Advantage is what makes you different and
delivers value to your stakeholders (Customers, Employees, Shareholders, Suppliers, and Partners etc.). In my
33 year career in business as a manager, leader, employee and advisor I observed that those that focus on
their advantage and manage it continuously are the most successful performers and those who either do not
focus, or lose sight of advantage perform below average or ultimately fail, because they are not “Doing the
right things, at the right time, in the right way”. This led me to research and develop “The Business
Advantage Model™ (BAM™)” a comprehensive and detailed Framework for entrepreneurs and business
leaders to minimise risk and maximise returns.
What is Advantage?
Advantage is being in a position which is favourable or superior. In business we often discuss “our competitive
advantage” which describes where we have a superior position to the alternative choices (often our
competition). But to consider competitive advantage alone as it is generally understood, is misleading as it
often leads to a myopic focus on one external market advantage , rather than understanding the total
competitive advantage that makes your business the choice, and all the things that enable that deeply
embedded advantage you want to leverage and develop.
The 6 Stages (Phases) of business evolution relating to advantage
We use a simple model basis of “Advantage” in particular competitive advantage but not exclusively, because
if we focus on creating advantage in every part of our business as part of the culture and process, aligned with
the target market advantage then we maximise the value we create within the business and for our
stakeholders. In addition understanding the sources of advantage and managing those sources ensures a
sustainable approach to the delivery of market advantage. There can be many sources of advantage (access to
cheap finance, skills, competencies, location, raw materials, process etc.)
As business leaders we usually have limited resources and constraints, and also our experience cannot prepare
us for every situation and/or role, so it is important we do “the right things, the right way at the right time “.
The 6 stages of advantage are as follows:-
1. The potential Advantage
2. Creating Advantage
3. Proving Advantage
4. Protecting Advantage
5. Leveraging Advantage
6. Changing Advantage
To skip any stage runs the risk of dilution and/or loss of advantage, so whether we are a start-up, scaling or
turnaround entity each stage needs to be considered in sequence, otherwise we may miss something
important and do something that reduces the potential to create value. In each stage there are two central
aspects: 1. The Progress Deliverable & 2. The Planning Deliverable.
Strategic Business and IT Services© Jan 2013

2. Potential Advantage – Business Validation (Stage 1)
Often we are starting with an idea, and an idea is not a business, so we need to validate that idea with
quantitative and qualitative data/facts from the market. First we must establish that real advantage potential
exists in the market, and confirm we have the capability (competence & capacity) to create that advantage. We
confirm markets exist for the solution (product/service), that there is a problem/opportunity the target
customer acknowledges and our solution advantage is attractive. We also confirm that there is a value
proposition which can deliver an ROI that is acceptable to the stakeholders. Some of the things we will do at
this stage include: Defining the problem, customer, market, solution and advantage, understanding the
compelling drivers and sources of advantage and considering all options and alternatives available to us and to
the market. We quantify the value proposition for our customer and for our business, and ensure there is
sufficient scale and opportunity in the future to deliver an attractive ROI. We ensure we have or can acquire the
capability and resources to deliver the ROI. We look at organisation/company formation, funding, governance
and compliance. On completion we will have confirmed that we have a solid business case to move from idea to
solution/concept, and we set a vision and plan that is informed and achievable. Stage 1 is perhaps the most
detailed stage in the model as it is the most important as regards setting the foundations for a business and
avoiding potential wasting of resources on ideas that are never likely to deliver on initial expectations.
Progress Deliverable: - Confirmation we can create advantage and a business case to create value
Planning Deliverable: - Foundations & Plan that enables the creation of advantage and market entry
Creating Advantage – Business Verification (Stage 2)
We now need to prove the concept to ourselves and representatives of the market. We want to ensure we can
create & validate the advantage and that it is visible to stakeholders. This stage is about proving the concept,
not just prototyping the solution, but prototyping and testing the complete business model as we understand it
at this stage. If Stage 1 is research then Stage 2 is development. We emphasis the need for an Agile approach
not just to development but to the business as a whole, central to this is active engagement with Alpha
customers and the market in short sprints. In parallel we start more detailed planning for market entry, this
stage will include understanding our positioning, and who we will target as Beta clients? We develop Alpha and
Beta client programs and contracts. We put in place board & management structures to support market entry
and, contracts to meet good practice and minimum compliance requirements. We also will identify sources of
funding and how to approach initial funding of the business. The final key deliverable of this stage will be the
preparation of a business plan which should be a pragmatic description of how? And when? We will create
advantage and value, and outline the roadmap for stakeholders towards an ROI. We will include some detail on
our Beach-head market entry plan.
Progress Deliverable: - Confirmation we have created advantage for Alpha customers
Planning Deliverable: - Market Entry Plan & Resources (Beach-Head)
Proving Advantage – Confirmation of Business (Stage 3)
In Stage 2 we have confirmed there is advantage, value and a business we can create for stakeholders. We
have engaged with customers, markets and potential customers, and we have a plan that ensures we know
what is required to enter the market. We now enter the market, in a well-defined approach to the beach-head
segment that we have identified. It is during Stage 3 we refine and prove each aspect of our business so we can
scale to long term sustainable advantage and value creation. At this stage we are launching to Beta customers
and looking at the total customer experience not just the experience with the core solution advantage, we also
Strategic Business and IT Services© Jan 2013

3. are getting more direct feedback from the market to understand those variances that exist relating to different
customer groupings and segments. We also concentrate on how we release solutions internally and externally
and, develop all our touch points with customers and the markets to ensure our advantage is visible and
experienced. At Stage 3 not only are we entering the market but we are preparing for future scaling of the
business. We have started to commercialise our advantage but we can be sure that we will learn much through
market engagement, and we will be refining our business model (How we convert advantage to value). We will
review pricing and the total customer experience through a safe relationship with early Beta clients which
enable us to minimise risk when we release to other non-Beta beach-head customers. We also at this stage
define and practice our selling strategy and process, ensuring Marketing can create leads and, sales can
convert these to customer revenues. Our sales strategy becomes very important from qualification, through to
negotiation and contracts. In Stage 3, we begin to focus on the important Key Performance Indicators (KPI’s )
and metrics we have identified as enabling us improve our core advantage and performance, We review KPI’s
on a frequent basis for all key dimensions of the business. Roles, Teams and Structure will need to be more
defined Stage 3, as we are starting to grow the entity and must be ready to scale. In addition getting clarity on
how we lead, manage and govern the business going forward and the relationship between each of these roles
is important. The importance of management information and analysis is increasing so we get more formalised
on budgets, business cases and performance reports.
Progress Deliverable: - Confirmation of initial commercial viability and delivery
Planning Deliverable: - Foundations & Plan that enables the start of the scaling process
Protecting Advantage – Securing the Business (Stage 4)
Protecting Advantage is more about deepening the relationship with customers and markets and accelerating
growth and success rather than, things like patents and copyright, though they have importance real value is
created by growth and performance. In a sense it’s about accelerating growth, market share and Brand
identity. We are now at a stage where the rate of shareholder value creation can be accelerated. To date we
have mitigated both the product/technical risk because we have proved the advantage, we also have started to
significantly mitigate the commercial risk by entering the market, growing the customer base and revenues and
processes. So stage 4 is about acceleration of growth and lock down of all areas of advantage. We start to look
at our solution and geographic market options to enable growth and expansion, we will want to prioritise one
or more areas where our advantage is compelling and access is achievable as we start to scale. We may look at
alternative approaches to markets, organic and in-organic. Timing and solution life cycle management become
more important, knowing when? And how? to enter new markets and/or introduce new solutions or
advantage to current markets. We may want to enhance our focus on competitors and competitive behaviour
because by now we should be making an impact on the market, or entering new markets with new
competition. Legacy competitors may be responding to our advantage or new competitors bringing new
advantage that dilutes our advantage. We will now need to put more formal CRM processes in place to
broaden and deepen our knowledge and relationships with customers and, ensure a consistent total customer
experience. Our capability is growing, and managing it requires more formality to ensure we get the best from
people and teams. This is the stage the board and shareholders should be reviewing progress on value creation
and options for any value realisation event that might occur in the future. We also look in more detail at how to
raise series A finance required to scale the business.
Progress Deliverable: - Commercial success and structure/resources for growth in place
Planning Deliverable: - Solution and market development plans
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4. Leveraging Advantage – Building Scale in the business (Stage 5)
By now the business KPI’s will be demonstrating growth and performance improvement not only top-line but
the underlying drivers and enablers. You will have refined your core advantage and also created visible and
measurable value, we now seek to leverage the achieved advantage with the additional assets created to
create further growth. This is likely to involve entering new markets and adding new solution applications. Our
focus here will be “similar and synergies”. We will be becoming more innovative in seeking new advantage and
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sources of advantage particularly externally where 3 parties can provide complementary assets/resources we
can leverage perhaps in cross selling or, in creating new solution applications leveraging our core advantage,
with other secured new advantage. Our focus on collaboration and collaborative culture will be enhanced to
release talent in the organisation and facilitate all types of innovation (people, process, technology, market).
We look at our business model and structure in the context of leveraging the touch points with customers; we
consider the structural dimensions of products, services and e-business models. Data an analytics become ever
increasing in importance as we should have history and scale and therefore lots of information that help inform
the future. Brand analysis and management is an essential enabler to future growth and scaling, as we have an
established company and solution brand. In-organic growth such as M & A may be the pragmatic reality to
accelerate scaling and we consider what is relevant and how to achieve successful inorganic growth along with
ensuring we have a business case versus organic growth. We may have created financial strength and cash
assets which must be managed to maximise value so we need to consider treasury, Foreign exchange and tax
management.
Progress Deliverable: - Success in new and expanding markets creating assets and value
Planning Deliverable: - Asset leverage plan and environmental analysis and long future projections
Changing Advantage – Continuous business innovation (Stage 6)
We create a proactive culture that can project future changes and opportunities for our organisation. We are
planning and executing to maximise value, advantage and growth while minimising risk. We are identifying
and executing strategies for diversification that are based on new core advantage in existing or new markets.
We may have or be considering IPO to fund significant growth and also convert some value into returns for
shareholders. This stage is all about avoiding complacency, continuously innovating and growing and adapting
our advantage. We may be in reactive mode as a result of a step change (or expected) in our core
business/advantage which signals a plateau or future decline in our advantage and value. We look at change
management in detail as it’s here we need to be proficient in changing the direction of the ship. We may have
to shift our organisation and venture to new advantage, new solutions, new competitors, new markets, new
models and new structures and capabilities, so change management is critical. We will be building our
competence in Organisation design and development, managing human systems and keeping our people
motivated and innovative so they engage in driving change, without losing sight of the day job our current core
business. We also look at company value and valuation in order that stakeholders can make informed decisions
on further scaling, value realisation and value risks.
Progress Deliverable: - Scaled value through business innovation and diversification
Planning Deliverable: - Business case for changes and delivery of related ROI
Summary
The model identifies the 6 distinct phases of a business/organisations development, it provides a road map to
focus on doing the right things, the right way, at the right time to maximise advantage and value creation. The
detail of each stage of the model is extensive so there is a logical roadmap for leaders and teams.
Strategic Business and IT Services© Jan 2013