The draft April 23, 2010
Posted by petemcd in Business, Culture, Strategy.add a comment
No, I’m not referring to the military. I’m referring to the NFL draft of which I am taking in on ESPN at the moment. I’m a couch potato right now. This annual show is great entertainment for the fans but it is serious business for every NFL team. They will end up investing millions in the first round picks. Prior to the draft I would venture to guess that each team spent at least $100K (most likely, a lot more) in evaluating the available talent. Why? Because, every team in the league is there for one reason- to win and win big.
A business best practice is to assemble the best team you can…that is if you want to win and win big.
A good friend of mine, Ron Kranz, says this: “There are no business problems. There are only people problems with business issues.” I’m a big believer that the old and overused cliché, ‘people are our most important asset’ is actually true. It’s just too bad that so many businesses give this lip service. You cannot solve serious business issues and perform at a high level if you have people problems. You usually have people problems if you haven’t hired the right people and then continually invest in them with training and coaching. That’s what the best NFL teams do.
The hiring of the right people is the key. There is no fool proof way to do this, but a leading company like Amazon, Apple, Microsoft, or General Electric has an intense recruiting, interviewing evaluating and hiring systems to get the best fit for their respective organization. They are disciplined in their processes. They are serious about getting the best players on the field and they are focused on winning- every day.
This approach isn’t just for big Fortune 500 companies. If you have a small business you need a disciplined and formal process to get the best people on board. Again, that’s if you want to win.
BTW, the ESPN crew of Boomer, Tom, Steve, Jon and …Mel are terrific. Well, maybe not Mel.
© 2010 Peter E. McDowell
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Value as a part of your strategy April 9, 2010
Posted by petemcd in Strategy.add a comment
Business strategic planning should always include a focus on value. Value for products and services is defined in the dictionary as ‘an amount, as of goods, services, or money, considered to be a fair and suitable equivalent for something else.’
I got thinking about value yesterday while doing the dishes and cleaning up the kitchen after another great meal that my wife prepared. I’m actually quite good at this cleanup activity (please, no calls to come over to your house!) and I really don’t mind doing it. Call me a neat freak.
Over the years I’ve used a variety of dishwashing detergents and there are definite differences between products. The latest detergent I’m using is the run-of-the-mill Safeway brand product. It’s pretty darn cheap. Prior to that, we were using either Palmolive or Dawn- both more expensive products. I can assure you there is big difference in performance between the less expensive and more expensive brand. The more expensive brands do a much better job and use a lot less liquid detergent. In the end, they are more cost effective and satisfying to use. The value is higher in my mind.
Certainly, business strategic planning should have at its core a long range goal to build the value of the company. When the eventual liquidity event comes (a sale to or a merger with another business, or a transfer of ownership to family or other stakeholders) the goal should be to have the maximum return on the total capital invested. Value delivered to external customers and suppliers and internal employees are all a part of the total value equation. Your brand strength is a part of this also. What’s in a name? Plenty.
You may have your own business or may work for someone else. How do you get your business in a position to been seen as having the most value for your product or service? Here are just a few ideas:
- Develop great customer service and continually improve it (and remember, you are a part of the service). Not good customer service- great customer service. Customer service is exactly what it says- serving the customer, in all that you do. Among other things, it’s returning phone calls promptly, meeting commitments to send information on time, solving problems quickly and with a positive, can-do attitude, checking on order status without being told to do so, and being an advocate for the customer within the business. Great customer service makes the customer feel that you are a part of their team.
- Develop, document and train in standard processes or business practices that make your organization run like a fine tuned Swiss watch. Most people are familiar with the book The E-Myth by Michael Gerber. One of the main points he makes is that your business should have every important process detailed. With these in place, cross train your employees so that just about everyone in a department can step up and handle tasks or challenges without missing a beat. That’s valuable.
- Do all that you can to make certain that your product quality and delivered services are as close to six sigma as possible. When you continually deliver a great product or service to your customers and they know it will conform to or exceed specifications or expectations, you are enhancing your value in their eyes. Why would they turn to someone else? You are a trusted resource. You have value in helping their business to succeed.
These are just three ideas, but I’m sure that you get the picture. Here’s the summary- literally everything you do in your business, be it marketing & sales, manufacturing, logistics, finance…whatever, has an impact on value. Having a strategy that actively looks at increasing your value is critical.
So, does your business strategic planning include building value? Every day on the customer side of things, your business faces the scrutiny of whether your product or service has more value than other available options. Will it deliver the expected performance or result at a price that is acceptable and defensible?
© 2010 Peter E. McDowell
Pete’s View
Interim or Permanent Executive Management Services
Sales Focused Business Strategies – Business Strategic Planning – Business Best Practices – Revenue and Profit Growth
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Regarding Apple April 5, 2010
Posted by petemcd in Culture, Leadership, Marketing, Strategy.add a comment
“It’s the most innovative company in the world. That may sound obvious, but it doesn’t meet demand- it creates a need for products that everyone wants. You never hear anyone say anything bad about Apple products. Their hardware is a must have.” Bob Turner, Chief Investment Officer, Turner Investments Interviewed 03/22/2010 edition Fortune Magazine © 2010
This is a great quote with a real point that anyone in any business must consider. By now, most of you know that successful companies are using pull marketing to acquire customers. Sure, they continue to use a number of push marketing techniques that still can produce significant results, but the focus is on how to pull prospects (eventual customers) into your orbit.
Apple is actually in a position where prospects aren’t just being pulled in; they’re knocking on the door demanding to be in. They are jumping in. What Apple has done is to create the ultimate pull marketing machine. They aren’t just meeting demand- they are creating demand.
Wow, what if you could do that for your business? It’s not so easy to do, especially in traditional commodity based businesses. But it is possible, although to different degrees for every business in a particular industry.
Apple has identified what consumers really want. They have created outstanding products that are reliable (high quality) and functional. They have beautiful industrial design and are priced at premium levels. They have on-demand or scheduled customer interactions through their Genius Bar. They have created an aura of leading edge coolness. People want to be seen with Apple products and they want others to know they have an Apple product. In many respects, and this is right in line with pull marketing, the consumer is their best advocate and promoter.
This is not the MacIntosh or Newton company of years past. That was strictly an integrated proprietary hardware and software business. They are constantly evolving. I think the key to their success is that they know who they are, what they are all about and where they want to go. Thanks to Steve Jobs for that, right? Today, they are so much more broad in their offerings and yet true to their core being.
So, without getting into too deep of a dive here, you can ask yourself a few questions-
- How well does my entire business understand its core? Are all of my people on board and do they share in a common fanaticism about the business? Is that evident to others?
- Is there any kind of aura about my company? If there is…is it positive? Are any of my customers advocates for my business?
- What is the one thing that would flip my business into the category where prospects and customers say, “Man, we must find a way to have them as our supplier (resource, partner, etc.).”
- Do we have outstanding products and/or services, or, are they really pretty much the same as everyone else’s?
- Are we evolving or sticking with the same old thing?
- And finally, what is it, besides “give me your best, lowest price” that my customers really want?
These are the kinds of questions that you must ask. If you have your own business or if you are in a leadership role then you have the opportunity to dive in and make your business a pull business. It’s possible if you believe it is possible, in any industry. But it takes hard work to honestly come up with the answers to those questions and develop a plan to make things happen.
Peter E. McDowell
Pete’s View
Interim or Permanent Executive Management Services
Sales Focused Business Strategies – Business Strategic Planning – Business Best Practices – Revenue and Profit Growth
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Loyalty and results April 2, 2010
Posted by petemcd in Strategy.add a comment
I had breakfast with a friend of mine this morning to get caught up. As usual, once we got past our personal updates we turned to the world of business, which both of actually enjoy talking about. One of the things we’ve both observed is a common mistake on the part of owners and managers that inhibits their ability to either grow the business or lessen their workload, or both.
What is it? It’s the inability to deal with nonperforming or underperforming staff. Usually, these are mid to high level managers, sales people or engineering directors. Too often, in too many businesses, incompetent or weak people remain on the payroll. The owner or manager gets too comfortable with the loyalty and friendship they have with an employee. They don’t have a relationship with the employee that is first and foremost focused on daily performance and long range results. These employees continue to occupy seats and get paid for bringing little to the party.
We’ve all been witness to this, especially in mid-size to large companies. It happens a lot in smaller businesses too. There’s always a reason or justification for why someone is still around or can’t be dealt with in a constructive way to perform at a better level. “I just don’t know what to do about Bill. He’s been here so long and has been loyal. I know he’s not bringing in the sales but he’s a great guy and I just can’t let him go.” Yes, you can and you should, or at least you should give him specific objectives with time frames to maintain his employment.
The costs for the business are high. Businesses lose the ability to bring in revenue faster, to grow the business value, have higher costs and lower morale. I’ve known of companies where the President has no strategy and doesn’t work very hard and hence has not grown the business significantly, or at all, in over ten years. The Board won’t fire him or demote him. Yet, the investors, usually members of the board, have to continually put capital into the business because of underperformance. What a reward: perform at a minimal level and continue to get cash infusions from others so you can keep your job and great paycheck.
Why is this so? I think it comes down to one thing. People, the owners or top managers, are afraid to make the tough decisions and they get too hung up on a perceived domino effect in the business. It sounds like this: “I’m quite concerned about firing Jane. If I do that, then a number of people might leave. I can’t have that happen. It’s better to keep her on board rather than risk that.” I’ve seen that happen exactly once in my career and within months things were back on track. Rarely does getting rid of one person decimate a company. In fact, often the remaining players are overjoyed and asking what took so long to make the decision.
If you’re struggling with a nonperformer do yourself a favor and make the hard decision to either get rid of the person or have a conversation and put strict performance targets in place. Failing to do so will continue to drag your business down.
© 2010 Peter E. McDowell
Pete’s View
Interim or Permanent Executive Management Services
Sales Focused Business Strategies – Business Strategic Planning – Business Best Practices – Revenue and Profit Growth
email me to request my e-newsletter!
Web @ http://www.performabusdev.com
