4 foundation ideas for business improvement.

4 foundation ideas for business improvement.

Mar 3, 2017 | Change, Small business

Having spent many years involved in one way or another in business improvement, as you may expect, I have some thoughts.

Primary amongst them is the dismay I feel when I meet another medium sized business owner  who has had a bunch of expensive Lean or Six Sigma consultants, or now coming to the fore, ‘Agile’ consultants in their business who have achieved little beyond mouthing clichés and scraping the coffers.

All these branded and marketed improvement processes are just toolboxes that contain a set of pretty common ideas that are dressed up to sound like the next coming.

There are no silver bullets, no easy solutions to difficult problems, no template that covers even a significant amount of ground. There are just tools that can work when used in the right context by people who know what they are doing, and/or are prepared to learn as they go.

However, in the fast moving world we live in there are a few foundation disciplines that go beyond the individual tools.

Identify the problem. Improvement comes from  identifying and solving problems. The identification and articulation of the problem to be solved should be the first, and continuing priority. No improvement project I have ever seen solves just one problem, there are always a series of smaller ones when you dig deep enough.

Collaboration.  Collaboration is the core of getting things  done that  ‘stick’. In other words, they change the status quo in some way that sustains itself, becoming the new status quo. Unless change is accepted by those affected, it will simply not last.

In parallel. Sequential change takes too long, and inevitably leads to unintended consequences that do not become evident until the damage has been done. Working in parallel offers the opportunity to improve and problem solve in real time as the project proceeds. The days of sequential improvement programs are gone.

Anticipate risk. Managing risks at the beginning of a project by anticipating, and allowing for them makes way more sense than just barging in. Once you get towards the end of a project, there are sunk costs, and often corporate momentum and egos involved, all of which are very hard, sometimes impossible, to shift.

Almost 20 years ago I worked with a group of fine wool growers frustrated by being price takers. They were on the end of a long sequential supply chain that delivered them no information at all on any topic beyond the price of their greasy wool on auction day. We gathered all the processing steps from sheep to the fancy suit around a table, and turned a 2 year opaque, price driven supply chain into a collaborative demand chain that took 15 weeks from the sheeps back to the suit on the rack, and delivered better margins to all players. That collaboration is still delivering returns to growers, by solving the industry structural problems in a way that remaiins almost unique. The inventory savings made through the chain were just the cream

Cartoon credit: Tom Fishburne

How SME’s can get invaluable feedback, insight and coaching, almost for free.

How SME’s can get invaluable feedback, insight and coaching, almost for free.

Mar 1, 2017 | Collaboration, Small business

As kids, most of us told each other our secrets when we were in a safe place. In the tree-house,  in a tent in the backyard, under the house, wherever it was, we tended to open up with our fears and dreams.

It felt good to confide, to open up and get the responses from those we trusted.

As adults, being able to open up like this seems both confronting and dangerous to self image.

As business owners, it is even harder, we are never sure who will find out about our deepest commercial secrets. We also know and find really hard, is to ‘work on our business not just in it’. The most common reason is used is  ‘where do I get the time? The only answer is to make it somehow, and the rewards will be substantial.

Large enterprises have a number of options to be a part of various round tables that set out to re-create this safety felt in the tree house. Operations like The Executive Connection (TEC) do it well, putting together groups of business leaders from non competitive businesses into a regular moderated forum in which they can be coached, and encouraged by their peers and learn from each other. It requires a commitment of time as well as the finances, to both attend the meetings and to do the ‘homework’ that emerges, but I have seen spectacular results from the commitment.

For the owners of SME’s the financial and time commitment to be a part of these sort of groups is substantial, and most do not take the step. However, increasingly there are options emerging as a part of local networks of like minded and non competitive owners meeting regularly to share experiences. The value that can come from the advice and support of such a group is substantial and should not be missed.

The usual rules for constructive conversation apply. Everyone needs to be given a voice by the moderator, and there needs to be a depth to the conversation that enables both deep analysis by the group, and by its very nature, builds trust. ‘They would not have said that unless they trusted me’ and trust recieved, begets trust given

My thanks to Scott Adams for the Dilbert cartoon.

 

Does ‘Know, Like, & Trust’ still hold?

Does ‘Know, Like, & Trust’ still hold?

Feb 27, 2017 | Leadership, Marketing, Sales

The only way businesses survive is to generate revenue in excess of their costs, consistently.

Common sense.

One of the oldest adages in revenue generation is that people do business with those they know like and trust.

It was correct, and to an extent it still is, but with a huge, game-changing wrinkle.

Most of us by now have done some sort of transaction electronically.

You have most likely moved to that transaction without ever meeting the person on the other side, so you certainly do not know them, and have no idea if you would like them, but you trust them to complete their side of the transaction.

One out of three now seems to be good enough?

Not really when you think about it.

In most cases there has been some interaction that you as the purchaser have undertaken that the seller knows nothing about.

You have looked at their website for technical specifications, prices, service promises, you may have downloaded some of the free stuff from their site, often to a junk email address so you do not get bothered with the following auto-marketing.  Depending on the product you may also have checked out the various product forums, and review sites, and you have compared all this to the competitive offerings.

The summary of all this is that when you get to the point of initiating a transaction, you have come to value and trust those you do not know, sufficiently to decide to do business with them.

Value and trust. Key words.

Trust is mutual and earned by performance over time, value is delivered.

The challenge now in revenue generation is therefore to reach out to those who do not know you, but who may have some problem you can solve, some irritation you can remove, and demonstrate your value to the point where they trust you sufficiently to do business with you.

A complete turnaround from the days where you did business with people you got to know like and trust while walking the golf course.

How to send a great brand down the crapper.

How to send a great brand down the crapper.

Feb 22, 2017 | Branding, Social Media

When you change your business  model, make sure you take your customers with you. Just assuming loyalty and the power of incumbency can be terminal. The evidence to this is long: Kodak, Blockbuster, and more recently, Blackberry, amongst a very long list.

A few customers will hang around, even to the death, but most will walk just as soon as a viable alternative emerges, and in the meantime probably think you have overindulged in happy-juice, and think way less of you for it.

Not many would see this as a good outcome in the challenge to build and leverage a brand.

LinkedIn has been a great success, making its founders billionaires, early investors multi millionaires, and enabling business connection and networking in ways unimaginable just half my working life ago.

The freemium model they used worked well, it gave significant levels of usage for free, which hooked in a huge, professional user base.

You did get a lot for no financial cost, but in exchange, you did give them a lot of information.

Your personal details, work history, interests, location, affiliations and networks, and a lot more, all of which should have been an advertising bonanza, and if I asked for it when interviewing face to face in Australia, I would be breaking the law.

This information is  the quid pro quo for the use of the platform, and unless you are really stupid, you know that it will be used to sell access to that information to anyone with the money, who wants to reach you.

Nobody would seriously argue that this was not the case.

Facebook has made a huge success of advertising to finely defined audiences based on the personal information given in return for access to the platform. That LinkedIn failed to do the same, with the significant added value that could be accessed via the subscription versions, is their marketing failure, not evidence that  there was not an opportunity waiting to be grabbed.

Anyway, at some point, some of the users of the free version needed to go a bit deeper, to be able to search in a more targeted manner, so they happily upgraded to one of the premium packages. While the subscription revenue may have been under what it could have been, LinkedIn seemed never to really set out to market the benefits aggressively to their user base, all they did was offer a months free access to the premium version.

As LinkedIn seeks to generate revenue by annoying its users, Facebook jumps into the markets to date dominated by LinkedIn and offers similar services to its huge user base. Serious competition? Not too the differentiated Linkedin, but perhaps now it is.

I was a constant advocate of LinkedIn, and strongly encouraged and coached all those I worked with started to use it, some migrating to the subscription services. That advocacy is now gone, and I am sure that I am not the only one.

How long before the first cat photo turns up? Perhaps it already has, further blurring the differentiation LinkedIn used to have to Facebook and other social platforms.

I get that Microsoft needed to create a return on their $26 billion investment, but ignoring your market is a pretty stupid way to go about it.

Perhaps the new bloke who has admittedly made some pretty smart moves since he took over from Steve Ballmer, should have rung Jeff Bezos at Amazon who may have reminded him that Amazon keeps an empty chair at every meeting as a constant reminder that they are there to serve customers, not the  other way around. Do that successfully, and you will make money, fail to do it, and the bell will eventually ring.

The upside for the few really effective marketers out there is that a really effective automated toolbox has been removed from the wannebe’s, so creative, differentiated, focused and truly customer-centric  marketers will have more oxygen.

 

What does ‘Priority’ mean to you?

What does ‘Priority’ mean to you?

Feb 20, 2017 | Change, Leadership, Strategy

Most of us would say in answer to that question “the one most important thing”.

The thing that we just have to do first, in preference to all others.

Priority is singular.

However, in most cases I see the word used as a plural, ‘Priorities’. It seems this is a new word, spawned perhaps by our instinct to cover our bets and our management arses.

We all get what ‘Priority’ means, but how do we separate the ‘Priority’ from the ‘Priorities’.

In most management situations, we do not do that separation job adequately. We end up trying to do too much, compromising the outcomes of everything in front of us.

Pick one priority, and when done, move on.

In 1997 when Steve Jobs (don’t you get sick of examples from Apple and Jobs?) returned from involuntary exile back to Apple, the company he started was on the verge of insolvency, having just lost over a billion dollars. A year later, Apple turned a $309 million profit.

How did he do it?

He focused Apple on the priority: selling the core range of two products, the PowerMac 3 and PowerBook 3.

Most of the huge range of products were discontinued, revenue did drop, but overheads dropped even further, so they made money, and were able to reinvest in the follow up innovations that changed the world.

Italian mathematician Vilfredo Pareto coined what has become known as the 80:20 rule by observing a wide range of totally unrelated situations where 80% of something was generated by 20% of the generators. The truth of this principal was observed by pioneer management consultant Joseph Juran who popularised it as the Pareto Principal.

In 22 years of consulting and contracting, mainly to medium sized manufacturing businesses, I have only ever seen evidence that the Pareto principal holds. In some cases, it is more like 90:10, so the challenge is the same one faced by Steve Jobs.

Which 80% of what you are currently doing do you no longer do?

Never an easy question, there are always reasons for everything that is being done, but survival is often about establishing the priority, and doing just that one thing better than anyone else.