Business best practices March 23, 2010
Posted by petemcd in Business, Goal Setting, Leadership, Marketing, Strategy.add a comment
Hyundai was the cover story highlighted in the Fortune magazine issue of 01/18/2010. This is a company that is starting to move to the forefront of the ever competitive automobile industry. Years ago, and not too many years ago mind you, Hyundai and Kia were not very well thought of. In just ten short years they are now ranking up with the best of the Japanese brands for styling, owner satisfaction and quality, and they are winning awards. Oh yeah, they’re also extremely price competitive and are stealing market share.
Here are a few points from the article where this company is practicing business best practices in a fast moving and ever more competitive world:
- Toyota thrives on consistency, Honda on innovation and Hyundai on aggressiveness and speed. One can argue that all of these are important, but in the game of grabbing market share, aggressiveness and speed win. Especially, when you have now proven yourself to be high in quality and consumer acceptance. Hyundai is bringing out new models faster than the other manufacturers.
- Hyundai’s quality process is a testament to the power of focused management and aggressive goals. “One of the reasons we move fast is fewer people,” says John Krafcik, president and CEO of American headquarters. “Speed doesn’t suffer bureaucrats well.” Organizations that are super focused with aggressive goals cannot get things done with too many people. You need a lean, committed team with all moving in the same direction and with a common set of decision making rules. Clear responsibilities and deliverables, and constant communication are key.
- A willingness to take risks also keeps things moving. “Typically, when we set targets we haven’t yet made a plan for how to get there,” says Krafcik. This provides for a sense of urgency to get things done. Hyundai is focused on big, ambitious goals. They are vision driven for what they want to get accomplished. The strategy and tactics to support this vision will develop and get implemented.
- Hyundai also exhibits an opportunistic culture. One only needs to look to other fast moving, focused and opportunistic companies like Apple and Oracle to see how they have benefited by instilling this in their culture. Winning organizations survey the landscape for new opportunities and competitive weaknesses or holes. Where & when they see an opportunity to leverage their expertise they waste little time jumping in to grab market share.
For you, all of these business best practices are worth considering, no matter how large or small your business is. In local markets there are plenty of reasons to be aggressive, focused, fast and opportunistic.
© 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 pete@performabusdev.com email me to request my e-newsletter! Web @ http://www.performabusdev.com Blog @ http://petemcd.wordpress.com/ Connect with Pete on biznik, Contribution Networking Party, Eastside Entrepreneurs, Facebook, Linked In, Naymz, Plaxo and Twitter.
Look Outside October 28, 2009
Posted by petemcd in Business, Goal Setting, Sales, Strategy.add a comment
Is there anyone standing outside of your door, just dying to do business with you? I doubt it.
When I started in sales long ago I was called me into the company owner’s office on the first day I reported for work. Here’s the brief conversation:
- Owner: “Pete…welcome. We’re glad to have you on board. Do you see anyone standing outside of our door, just dying to come in and do business with us?
- Me, glancing at the front door to the offices: “Ummm, no sir.”
- Owner: You have to go out and bring in the business. Here are your car keys. Have fun.”
It was that quick. I got the message loud and clear. Get out there and make your mark, make it happen. Business is nothing if you’re not bringing in the sales, whether it’s the direct sales force model that so many other businesses use or if you use resellers or independent agents or reps. Sales must be brought in and every owner and sales manager is responsible for making that happen. Companies should be sales focused first and foremost.
A business best practice is to develop business strategic planning which is centered on marketing & sales. It starts with knowing your market and then hiring the best people you can to represent your company. Without a specific market to go after, you are aimlessly wandering in the wilderness. Without the best people hired you will just be an average player, or maybe a non-player.
Herein lies the two problems with many smaller companies: they haven’t defined their market and they do a poor job of hiring people in the sales and customer touch areas. This means they are highly ineffective in customer acquisition and retention (customer retention should mean you have high customer satisfaction ratings). The wrong kind of business or customer is pursued and brought in and the people doing the pursuing are not ideal. There is a revolving door of sales people and customer service people and the company ends up in a low growth or no growth mode.
So, ask yourself if you’ve really defined the exact market you want to play in. Look back over your years in business and ask whether the human being you hired for sales worked out very well for the business. If the answer to either of these isn’t a resounding YES, then you owe it to yourself to develop a well thought out marketing and sales focused strategy and to develop a system or process for hiring and growing a top notch sales team. If you don’t know how to do this then take the initiative to seek out the best advice from experts such as consultants or best-selling authors.
© 2009 Peter E. McDowell PERFORMA Business Development
Different View/ Better Results
pete@performabusdev.com – email me to request getting my e-newsletter!
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Business Best Practice: measure the right things September 21, 2009
Posted by petemcd in Goal Setting, Leadership, Strategy.3 comments
“Perhaps what you measure is what you get. More likely, what you measure is all you’ll get. What you don’t (or can’t) measure is lost.” – H. Thomas Johnson
“If You Can’t Measure It, You Can’t Manage It.” – Tony Robbins
I enjoy working with my clients. One thing that is a result of working with people in a presentation, Q&A, training or coaching environment is that the learning, relearning or awareness goes both ways. I’m competent in what I do. I’m knowledgeable and always act with my audience or client’s best interests at heart. I deliver high value for my clients- they get real world advice and ideas on how to make their business valuable. But, I also enjoy the opportunity to learn or relearn while I’m with clients and I’m aware of this in the moment.
One thing I relearned as I coached a client recently was the importance of measuring the right things. Not just measuring any things, but measuring the right things. Absolutely, a business best practice is to measure the right things. Too often, people and organizations measure the wrong things- they get lost or have little to show except a lot of meaningless charts or data. If you’re honest, you have been a part of these follies. You may have been a part of measuring and then analyzing and then preparing reports for managers or owners or investors that never get read. Geez, why did you get directed to do all the measuring in the first place? What was the point?
What are the right things for you to measure? It all depends on Business Strategic Planning and the Key Initiatives that you and your team develop to get results. There are many goals and objectives in business or in organizations and hopefully they’re all important and not a waste of energy and time.
The most important goals in any business are to drive (1) revenue growth, (2) cash flow, and (3) business value. How you get the best result for each is made up of many things. So, measure activities that affect each of those:
- Think about the activities or behaviors that drive revenue growth. You can probably list 8-10 easily between marketing and sales activities. Sales calls, opportunities and close ratios, sales conversation process, referrals, gross margin trends by sales rep/product/category, marketing campaigns with ROI measurements to indicate customer acquisition, measurements for customer retention, etc.
- Think about the activities that affect cash flow…I won’t get too technical accounting-wise because I’m not an accountant, but think of it in these terms: the net of revenues minus expenses or the net of money/cash coming in versus money/cash going out. P&L’s are great for analysis and review of operations, but real cash produced or thrown off by the business is where the rubber meets the road. Cash flow is affected by many things, including the cost of materials, the cost of financing on the business, the cost of production, the elimination of waste, etc. Again, you can probably list 8-10 activities.
- Think about the things that affect business value. What are these? Well, beside the rate of revenue and cash flow growth, which inherently can affect your business value, there are other areas to measure: human capital (expertise, knowledge and experience), patents, Research & Development initiatives and returns, Intellectual Property, brand reputation, customer growth, customer satisfaction ratings, etc.
Now, the business best practice: along with your team, look at the three areas above and think hard. Think really hard. What are three to five things in each area that will make a real difference in your business? What are the measurements that you know will bring results? These are the measurements that will definitely have an impact and if you ever have to write a report, someone will read it and say, “Wow, this is incredibly important stuff for us to know every day (or week/month).” If your measurements can’t be connected to the big picture and understood as critical to driving revenue, cash flow and value, rethink what you are measuring.
© 2009 Peter E. McDowell
PERFORMA Business Development
Different View/ Better Results
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Bring it on! July 30, 2009
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There’s a scene in the first Matrix movie (which I still enjoy watching), where Keanu Reeves as Neo, finally discovers he has the upper hand against Agent Smith and his team. He assumes his martial arts pose and motions for the agents to bring it on…”I can handle you very easily, with one hand behind my back…” he’s thinking. And he does it.
Can you bring it on? Can you take on the toughest challenges? Can you handle the pressure in your business environment right now? Note to all: business always has pressure on it, in good times and tough times.
How do you handle the pressure?
- Do you panic? “We’re done for, we can’t get over this hurdle!”
- Do you complain about the government? “They are ruining my business with regulation (and taxes or whatever).”
- Do you complain about your market? “Our market has shrunk or gone away. There’s nowhere for us to get any business.”
- Do you complain about your team? “They just never get anything right. I have to baby sit everyone or things get screwed up.”
It’s how you handle the pressure and your environment that is the key to be able to stand up and say, “Bring it on!”
So, what can you do? Here are a few things to think about or do:
- Calm down. You think more clearly when you don’t panic. Gather your team and take the time to explain the situation in factual detail. Don’t over dramatize it and don’t minimize it either. Be clear about where you are right now. In tough times you cannot over communicate. Miscommunicate or mislead (not on purpose) yes, but not overcommunicate.
- Be a realistic visionary. Set everyone’s sights on where you need to get to have a healthy business again. It may be in stages, from failing to surviving to thriving. Get yourself and your team looking toward the future.
- Gather their input on what can be done to improve your business in all areas- marketing, sales, production, product development & innovation, logistics & supply chain, financial management, information technology, operations, etc.
- For each area of your business develop a plan or strategy. Lead your team. Coach them and build consensus about two to three initiatives to work on in each area. These initiatives are not to be in silos. They all need to be connected to your vision and work together.
- Get your team to be responsible for the successful execution of the initiatives and accountable to you and each other.
- Meet regularly, as a team, to review progress, remove roadblocks and foster interdependence. Get everyone on the team to understand what is at stake and that you’re all in this together. Make adjustments to your strategy and tactics if you must, but don’t lose sight of your goal- your realistic vision of where you need to get to.
- Recognize and reward your people. Show them you want their input and acknowledge that.
Those are just a few ideas about how to respond to and handle the pressure of business. Do they work or are they just theories that sound nice? They work. I’ve ‘been there, done that’. You can put some of this into action and along with your team tell the world to “BRING IT ON!”
© 2009 All Rights Reserved Peter E. McDowell
PERFORMA Business Development
Different View/ Better Results
pete@performabusdev.com
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The little things January 27, 2009
Posted by petemcd in Goal Setting.add a comment
Most people have heard that little things make a difference but they never really stop to think about them, as they relate to their business or even their personal life. Do they really make a difference and if so, how?
Using the sport of baseball, here is a simple example. So, do you think that just getting on extra hit every week makes a difference in baseball?
My numbers may be wrong, but here is some information to think about, to make a point. In general an average hitter in baseball will probably make in the range of $1mil to $5mil each year, so let’s settle at $3mil as the number. That’s lot of money, right? A superstar hitter will make between $5mil and $20mil each year, so let’s settle at $12.5mil. That’s 4X what the average hitter gets.
In major league baseball a batter is considered a superstar if he has a batting average of .300 or more every year. An average hitter will be around .250, a difference of .050. There are roughly 500 at bats (AB) for day to day players over 25 weeks in a season. One hit more per week equals 25 more hits.
Let’s do the math:
500 AB with 125 hits = .250 batting average
500 AB with 150 hits = .300 batting average
Let’s stretch it a bit to 1.4 extra hits per week:
500 AB with 160 hits = .320 batting average…wow that’s 70 points above the ‘average Joe’
The slight difference of one extra hit per week or more means a difference in earnings of 4X, or roughly $9.5mil more each year! On a typical four year contract that’s $38mil. The difference between being a superstar and an average player is really not that much when looked at o a weekly basis.
The same is true for you and your business. Now, how can you apply this to your business? Well, in baseball it’s getting the extra hit and for many players that means extra work in the batting cage and willingness to experiment and change technique. It’s also a commitment to better results and it’s a mental focus on getting results.
In your business, examine what the real drivers of revenue and profit are. Sometimes these are obvious, sometimes they are not what you think they are. In sales, it could be the mix of business, the activities and focus of your outside and inside sales team, the contacts made, the number of opportunities for quoting on business, the quality and effectiveness of your sales conversations, the close ratio, etc. In your planning set realistic stretch goals and be super diligent in measuring and monitoring performance. Be all over the activities that lead to results, knowing that incremental and steady growth in performance will lead to much better numbers.
Small things do add up over time. Your job as a salesperson or manager is to figure out just what those little things are and be very intentional on getting better at them to grow revenue and profits. If you’re in production or logistics, it’s not any different. There are numerous small things that you do everyday that can be improved upon and will add up to increased productivity and reduced operational costs.
Sweat the small things, the details, because they really do matter.
© 2009 Peter E. McDowell
PERFORMA Business Development
Different View/ Different Results
pete@performabusdev.com
Web @ http://www.performabusdev.com
Blog @ http://petemcd.wordpress.com/
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