Oct 30, 2020 | Leadership, Management
Focus across the activities of a business is essential.
It means everyone is on the same page, and there are only the key performance drivers that are there, all else has been, or is being eliminated until the value is greater than the cost. This sense of purpose delivered by consistent and clear focus ensures that everything fits together.
It also means that the leader has as their primary task, communication. That communication is cascaded through the organisation, enabling the focus on what is important, today, tomorrow and into the future, with a singular focus.
Every person running an SME I have ever seen struggles with focus. They are pulled in multiple directions, simply because as an SME, there is no-one else to get stuff done, and in addition, many running SME’s are doing so because the sense of ‘ownership’ is strong, and they do not want to let it go.
To change this instinctive behaviour is not easy, requiring 3 simple to say steps, which are always very hard to implement.
- Precise definition of the goals. The temptation is to be general, make nice sounding goals that generate a nice warm feeling, without being specific. They are comfortable. Goals to be compelling drivers of behaviour and activity must be specific. The original and still the best framework is: ‘SMART’ goals. Specific, Measurable, Accountable, Reasonable, and Time-bound. When you get that right, the rest can follow, as it is clear if an activity is of value by asking the simple question: ‘Does this add to the progress of X?
- Disallow Procrastination. It is easy to put off a decision, allocation of resource, choice between options, by the very reasonable tactic of wanting more precise information with which to make the best possible decision. Given decisions about resource allocations are always made in the absence of complete information, this hesitation often seems reasonable. However, it inhibits the speed with which decisions are made, implemented, and either reversed, when they prove to be sub optimal, or double downed on when they prove to be good. Speed is increasingly the measure by which successful enterprises measure themselves. Elsewhere I have discussed the OODA loop as a tool to encourage speed and the attendant agility that are so essential to success. Do not allow yourself to procrastinate. As George Patton is reported to have said: ‘A good plan, violently executed now, is better than a perfect plan next week’
- Do the hard work. There is always easy work to be done, that takes the place of the hard work necessary to achieve the goals. Leaving the easy work and attacking the hard stuff is like contemplating the choices for a lovely spring afternoon. Going for lunch at the local pub overlooking the harbour or getting down and dirty in the factory to address something that may emerge as a problem next week. Do the hard work first, and then go to lunch if there is time left in the day.
An experienced and neutral party offers significant value as a sounding board, idea bank, and advisor. Find someone who has been there before, learned from the experience, that you trust, and reap the rewards.
Oct 28, 2020 | Governance, Leadership
Over 25 years of consulting, the second most common problem I see being faced by SME’s, after managing their cash, is to attract and retain talented people.
Many managers do not put enough time, thought and energy into their personnel roster, as they do not have the time to do so.
So they think.
The hidden costs of just keeping a seat warm by substandard recruiting outcomes are huge. Not only does recruiting consume time and money, you then have to train and manage a series of new employees as the poor decisions come home to roost. As with a customer, spend the effort to ensure they are the one you want, invest in them to ensure they stay with you, and over time the investment will deliver a great return.
Some of the things I have seen work over my 45 years of commercial life are as follows:
Pay over the odds.
This is not to encourage a culture of greed or entitlement, it is simply to make sure that really good people do not have remuneration as a reason to go elsewhere. You will always lose employees from time to time, but ensuring good pay removes one reason for them to leave. It is also a great way to ensure former employees have nothing bad to say about you, which in turn, makes recruiting easier.
Recognition.
People love to be recognised for doing a good job, for delivering over and above. Recognition of a good employee makes them want to come to work. Some just want the one on one recognition, others need the public affirmation of their good job by the boss. Be sensitive to which an individual might prefer, and deliver as appropriate. I have never yet seen a situation where someone was uncomfortable because they were recognised too much!
Have a clear strategic framework.
Employees like to know why they are there, other than to pay the rent and feed the kids, and what roles they play in achieving an outcome for the enterprise. Having in place a robust and transparent strategic framework not only provides the foundation of decision making at all levels, it enables people to articulate the role they play in success.
Do not micro-manage.
Micro-managing someone implies that you do not have the confidence in them to let them do the job they were hired to do. The usual outcome is that they do not do it, and they go elsewhere, or are at best, are disinterested and therefore sub-optimal employees.
Manage good people by the outcomes they achieve, not by the detail of the means by which they are achieved.
Play to the strengths of good people
Nobody is perfect, and no one person is perfect for any specific job. When you have someone good, rather than try and change them to address the gaps they leave, find ways to fill in around them so that their strengths can be developed and leveraged.
Have a significant ‘onboarding’ process
First impressions count, and you can only make them once. Making a new employee feel welcome, valued, important to the whole group is easy if you think about it. Rather than just having them turn up, almost unannounced, to a desk covered with the detritus of the previous incumbent, make a show of welcoming them, ensure they are introduced to everyone, specifically including the big bosses. A drowning person can often drag others under in their efforts to swim. It is no different with a new employee, far better to spend a bit of time and effort teaching them to swim than to deal with the consequences of discovering they cannot, or that they do breaststroke when freestyle is required.
Role clarity
Every person needs to understand their own role, and that of those around them, particularly those that are impacted by their performance.
Treat people as people, not resources.
Total transparency will go a long way towards this outcome. Good people react very positively to honesty, and non-judgmental feedback on their performance.
As a reminder, the biggest problem most businesses have, and particularly SME’s is cash. Generating, collecting and managing it.
When you need an old experienced hand, give me a call.
Oct 26, 2020 | Management, Marketing, Small business
Cash when it is working for you, is king.
However, cash sitting idle in a bank account fritters itself away, slowly, and over time.
Inflation, small purchases, fees, all eat away at the cash like mice in a wheat silo. A bit at a time.
Cash does not generate cash flow without being put to work. It is like going to the gym, it takes time, effort and commitment, but the result will show. Even when there are short term setbacks, interruptions, and periods of despondency acting as a brake, keeping working works.
We are in a time of unprecedented change.
This is more than just the Covid hangover starting to evolve, all that has done is greatly accelerate the changes that were emerging on the fringes.
The status quo in many areas has been thrown out the window. While that is deeply unsettling, and creates challenges most of us have not seen before, the flip side is that it also throws up opportunities not seen before.
Opportunities to fill the merging market niches, to pivot to different business models, serve new customers in different ways, or just grab assets and market share from less nimble competitors.
All of this consumes resources. The management time and inclination to make the necessary changes, and the cash to make it happen.
Successful businesses understand in detail how, and how much cash their enterprises generate. They keep borrowings to a minimum, giving them the ability to grab opportunities as they emerge, but they also keep their cash working, hard.
Header carton again courtesy of Scott Adams and his alter ego Dilbert.
Oct 22, 2020 | Change, Innovation, Strategy
We are all looking for ways to increase the competitive leverage we can bring to bear. It is tough to find the sources of that leverage, and then apply it effectively in aggressive and often homogenised markets. However, there is a thought process that few have ever heard of that delivers such an outcome.
Observe, Orient, Decision, Action, or ‘OODA Loop’ is a competitive thought process articulated by Col. John Boyd, the maverick American fighter pilot, engineer, and scientist, who revolutionised the practise of aerial warfare’, and indeed warfare full stop. His nickname in the Airforce was ‘40 second Boyd,’ reflecting his bet, that he could beat any other pilot in a simulated dogfight in under 40 seconds. It is said, nobody ever collected from him.
Observe: is more than just seeing what is around, it is a process of absorbing all the information available, and synthesising it with the context from which the information emerged. For example, while the 2008 financial meltdown was a surprise to most, the signs of financial fragility were there, for those who were looking for the right messages, hidden in plain sight amongst the hyperbole and emotion of what appeared to be a never ending bubble.
Orient: is a process of applying domain knowledge and experience with the observations made. Continuing the 2008 meltdown example, those few traders who saw the mismatch between the mortgages being written, and the ability of those who were getting them to repay the loans, oriented themselves to take advantage when the bubble did burst. Such a meltdown seemed obvious to the few who were looking, when they observed the mismatch between the assumption of ever increasing prices, employment uncertainty, and the herd mentality that prevails.
Decide: Based on the observe and orient phases, choices need to be made, risks assessed,
and a decision taken.
Act: This is simply executing on the decision, from which point, the cycle starts again.
Boyd’s OODA loop is a framework for creating tactical advantage. As he put it: ‘To enable you to operate inside the oppositions ability to respond’.
The ability to respond is driven by the speed with which you are able to collect and analyse information, to come up with a tactical response, and implement, absorb feedback, reorient and go again. Given that the decision is almost always based on ambiguous and incomplete information, the tendency is to hesitate, seek other information, look for alternatives, seek reassurances and permission, this all takes time.
Boyd saw the winning process as increasing the tempo of the cycle, thereby getting ‘inside’ the oppositions ability to respond effectively, leaving them vulnerable, and beaten. The example he continuously used was the ‘kill ratio’ of US fighter jets ‘dogfighting’ against the Russian MIGs in Korea, which was 12:1, being whittled down to almost 1:1 by the end of the Vietnam war. Partly this was the result of better training of the MIG pilots, but significantly it was because the quicker, lighter MIGS, although less well armed and protected, could get ‘inside’ the manoeuvrable envelope of the US fighters, and shoot them down.
For an SME competing against larger, better resourced competitors, being able to move quickly and decisively, orienting assets and resources towards that opportunity, actively leveraging it, then ensuring that the lessons that emerge are incorporated into a learning loop, delivers victory.
Case Study.
In 1985 the yoghurt market in Australia was in its infancy. Australians did not consume much yoghurt, it was a fringe product, consumed by a small number, with limited retail distribution, manufactured by local state based dairies, largely as a means to give shelf life to raw milk, that promised better margins than butter, cheese, or dried milk powder.
French brand Yoplait was launched from a modern purpose built plant in Victoria, and changed all that almost overnight. The market boomed, as a result of a good product, and better advertising and marketing by Yoplait, which completely dominated the booming market nationally in a very short time.
Ski yoghurt was produced under licence in several states by local dairies, and prior to Yoplait was a significant brand amongst the group of brands available in the then small market.
After the Yoplait launch, Ski was relegated to relative insignificance nationally.
The licensee in NSW, Dairy Farmers Co-Operative Ltd, took the aggressive step of investing in a new dairy foods plant in western Sydney, closing the 100 year old plant located in the inner Sydney suburb of Ultimo. Part of the investment was to produce yoghurt by a continuous process, packaged into form fill and seal cups to compete with Yoplait.
Over the course of the next 6 years, Ski overtook Yoplait, by firstly taking over the licences in every state, to deliver operational scale to the Sydney plant, then embarking on a series of product and packaging innovations, backed by marketing support, that created a tempo of very successful new product launches that Yoplait, being controlled by a French company working through a licensee, and having an inflexible manufacturing plant could not match.
Ski inserted itself well inside the operational speed of the Yoplait licensee, executing product launch after product launch, some minor, some very major, that altered the dynamics of the industry, and was able to dictate the terms on which the marketing battle for consumers minds was played.
The battle was won on the basis of that agility in product development, and ability to bring products to market quickly, and be on to the next thing before Yoplait had time to respond.
Subsequently, both brands lost focus, ceased to invest in the long term health of their brands and innovation, instead, drinking from the sugar hit of tactical price promotion demands by supermarket chains, they shrivelled in size and no doubt profitability.
Oct 21, 2020 | Branding, Communication
Almost every ‘About us’ dropdown on websites is, as expected, about the owner of the website.
Who started the company, where they went to school, how they came to be in Sydney, Seattle, or Bullamakanka, how great you are, and some soppy stuff about your story. How you pulled yourself out of adversity, and became successful, all meant to build empathy.
Well, mostly it fails badly.
Why?
People are not really interested in your story. They may listen, may even feel for you, but what they are really interested in is what you can do for them, what useful information you can provide, what problem you solve, and the impact of that solution on their lives.
Why else would they be on your website?
When they arrive for a look, you have only a few seconds to engage them, wasting those precious seconds by talking about yourself does not seem to me to be too smart!
So, make your ‘About Us’ page really about them
How you can solve the problem they have, how and why working with you and your product will deliver them success.
Go through the bio’s of employees you may have on the page and do the same thing. What is it that each person brings to the table that solves the problem the potential customer.
Focussing on yourself might create a little empathy, but that is well short of genuine interest and a willingness to give you money to solve a problem they have.
Call me assistance thinking about this stuff.
