Aug 28, 2014 | Customers, Governance, Leadership, Management, Small business
Small businesses make up the vast majority of business numbers, make a huge contribution to economic activity and health, but most do not last 5 years.
Over 20 years of observing small businesses as a contractor and consultant, I have seen a modest number of factors that the successful businesses, those that last the distance and deliver good financial returns over an extended period, set out to manage in a very deliberate way.
- Your time is the most valuable resource you have, and is non renewable, so outsource as much as you can to free up your time. It does not matter if you outsource to an employee, or to someone in the eastern bloc, it gives you back your time. Always ensure you retain control of the things that are at the core of your value proposition to customers, that is where your valuable time should be spent.
- Make yourself redundant. When the business runs without you, it is successful, You can then do what you want, but have the income stream coming in to allow you do what your want. The old cliché of working on your business rather than in your business is a cliché for a reason.
- Deliver value to customers first. Most business owners earn the most from their business the day they sell it, so do not become too emotionally involved with the idea of owning the business, be in love with what it can do for you by delivering value to customers.
- Find a niche and own it.
- Leverage the talents of others, there is always someone who can do something better than you, find them, and leverage those talents. On the flip side, do not allow low performers to persist, as it not only enables under performance in their role, but it sets a low bar for the others who can see that non performance is acceptable.
- Automate the day to day stuff as much as possible, and it is possible to automate almost everything these days. This requires time and effort up front to ensure there are robust and repeatable processes, but pays off in spades in very quick time.
- Always be curious, about what your customers are doing, and why, what your competitors are doing, why and how, and what is happening in domains outside yours that may be applicable to your domain in some way.
- Be generous. It pays off. Generosity engenders a feeling of obligation, and in this day of commodities and transparency, having someone feel they owe you a favour is very valuable.
- Have a plan, so at the very least, you know the point from which you have departed.
- Interrogate your business model routinely, as the pace of change is such that the optimum way of extracting value may not be the way your are doing it currently. The Business Model canvas is a great tool, and it is not so silly to keep drawn up on an A3 pinned to your wall to take post it notes with thought s as they occur to you, and others.
- Measure progress to wards objectives. Too many measures are as bad a too few, the challenge is to get the right measures, measuring the things that really measure progress, not just that something is done.
- Watch and manage the cash.
None of this is easy, or comfortable, but as I look around at successful SME’s, they are all employing at least 5 or 6 of these strategies. I would recommend that you do a relatively simple assessment of each parameter, measure yourself, and use that measure to identify areas to target for improvement. Simple spider graphs are very useful as a visual tool for recording progress.
Happy to have a yarn with you about how an outside resource may be able to assist the process.
Aug 6, 2014 | Governance, Management, Marketing
www.strategyaudit.com.au
Developing metrics to measure the impact and ROI of marketing is becoming a game of choice around competent boardroom tables. Given the level of marketing engagement around many of those tables, it seems sensible for marketers to take the initiative.
Following are seven headline parameters that make some sense and can be further broken up to match the enterprise specific strategies that should be in place. Measure yourself on a five point scale.
- Do you have a clear, 360 degree understanding of the behaviors, mindset, product category usage and limitations of your primary customers?
- Do you create, launch and measure the effectiveness of marketing campaigns with the deep involvement of data intelligence tools
- Do you” listen” for customers behavior and respond in real time?
- Are you engaged in all stages of the customers product usage life-cycle, from first consideration of the potential benefits to the assessment of operational performance?
- Can you optimise marketing investment across all channels and activity types?
- Are all the KPI’s across the business aligned to the desired market outcomes?
- Is the boardroom “on board” with all the above. (bad pun, sorry)
If you score less than 30, you need to do some work. One of the easiest ways to keep track of progress is a simple spider graph. Making the assessments a normal part of your marketing audit processes, recording progress in a simple way, then evaluating the performance and capability gaps that emerge will make you a more competitively effective enterprise.
Jul 30, 2014 | Change, Governance
www.keepcalm-o-matic.co.uk
Last night (July 29) I watched Rod Simms (ACCC chairman) interviewed on the ABC about the price reductions consumers can expect from the removal of the carbon tax. He was assuring us that consumers will receive these benefits because in effect the ACCC had the interview transcripts and documents that confirmed prices went up as a result of the tax, therefore they will go down similarly. If not, he would use the competition powers of the ACCC to ensure businesses, particularly those on whom he “had the goods” complied.
Mr Sims has generally been a pretty good advocate for the ACCC, taking on some challenging projects, but I wonder if he really believes himself when he says this stuff.
The carbon tax has just been a corrosive component of a superficial, emotional and nasty period in our political lives, devoid of facts and intelligent debate almost anywhere. However, to say prices will just drop as a result of the removal is, even by our political masters twisted standards, like asking us to believe in Santa Claus.
Politicians have systematically and capriciously distorted the truth about the state of the economy, over the last 20 years. The source of budget problem we have is on the revenue side, stemming from income tax cuts delivered by the Howard government, rather than being all on the spending side, as eloquently outlined by Dr. John Edwards in his terrific essay published by the Lowy institute, “Beyond the boom” Not addressed by Dr Edwards is the institutional waste I see in Federal expenditures stemming from the cultural imperative never to be wrong, which ensures no risks are taken, and every tiny detail is quadruple checked and backstopped before it is passed up the line, at great cost to us all.
Australian politics is stuffed.
Very low public engagement by any measure, seemingly universal cynicism about the motives and actions of politicians and their cronies, absolute lack of intelligent debate in the House of Representatives, and mayhem in the senate. Little has changed since this December 2009 rant, but I remain an optimist.
Australians have shown a remarkable ability to absorb change, and to enable the evolution of a society unimaginable to those who authored the constitution 114 years ago, so perhaps this is all just a component of the recipe for more change.
I hope so, but it does seem that this lot have polished the political game to within an inch of its life. In a debate, you can usually count on the truth being somewhere between the starting points of the adversaries, but in our current political climate, the truth, and any facts seem to be somewhere else entirely, utterly disassociated from the discourse.
Wouldn’t it be nice to see politicians held to the same standards they impose on the rest of us in relating to misleading statements, fraudulent conduct, false advertising, and the rest?.
Whoops, stop, there is a pink, flying pig going past.
For those few who got this far, thanks, but you must have too much time on your hands if you are to indulge my rant, but thanks anyway.
Back to work, to seeking ways to assist SME’s navigate the shoals of reality, and I will not be advising them to just drop their prices by 10% of the cost of their energy, that would see most of them broke.
Jun 23, 2014 | Governance, Leadership, Management
http://tobytripp.github.io/meeting-ticker/
Meetings are supposed to be a place where work gets done, accountabilities exercised options articulated and examined, decisions made, and outcomes reported. However, often they become just a reason to have another meeting.
Whilst the public sector comes in for some pretty harsh criticism, they are not alone.
Last week I found myself in a meeting called by a prospective client so I felt it sensible to attend and contribute.
No agenda, minutes of the previous meeting were supplied as we walked into the room, no definitive objective, just another bloody meeting.
To amuse myself, I tried to calculate the cost of the thing, thousands, and found myself thinking about the waste, and how to fix it, and only came up with the same stuff I have written about before. Serendipitously, later in the day, my inbox “plinked” with a lovely little cartoon from Hugh MacLeod that does his usual great job of nailing the topic with a few words and lines, and links.
The infographic in one link is terrific, and the meeting clock is wonderful, I will use it regularly from here on in when I see wasted resources being directed towards massaging someone’s ego, or “busywork” being done by having another bloody meeting.
Jun 5, 2014 | Governance, Management
JSF F-35 Lightening
I am not a car nut, but as a young bloke, I used to fix my own cars. There was not much you could not do without a reasonable set of Sidchromes, a block and tackle, mechanical manual, and a jack.
No longer.
My kids would no more set out to fix their own cars as fly, it is simply too complex. On the other hand, they have mastered the art of managing complexity by just knowing how to use stuff, and call for expert help when things go wrong.
Life is becoming incredibly complex, almost everything we do has dimensions that we cannot hope to understand and interact with, so we outsource. We ask the experts, take advice, seek guidance from those with the domain expertise we do not have. This is a healthy process, except when having asked the experts, we disregard their advice because it is inconsistent with some pre determined position, or expressed opinion.
Ego getting in the way.
We see it all the time in politics, expert advice disregarded by those who sought it to inform their decision making.
Last week Liberal backbencher Dennis Jensen, with a Phd in materials science, and a background in applied research, and so with some credibility on matters scientific had the balls to criticise Government. In a very worthwhile speech made to an almost empty Parliament he reflected on the apparent lack of uderstanding of how science works and the management of R&D priorities using the JSF project as a case in point as he had intimate knowledge of the decision making processes applied.
Economies are complex, and the competing demands on a finite pool of funds challenging to manage, but is that not why we employ experts? Why then disregard their advice in such a wholesale fashion as appeared to happen here?
Better stop thinking and get back to where the real action is, whichever crappy reality show is currently topping the ratings.
Jun 3, 2014 | Change, Governance, Innovation
Solar tower. http://en.wikipedia.org/wiki/List_of_solar_thermal_power_stations
It seems to me that the most important emerging driver of success in the economy that must drive innovation and value delivery, is the intersection of technical capability and power generation.
Oil has driven the geo politics of the C 19 & C20. The US became a manufacturing giant by finding oil, and was a net exporter until the 70’s, then became an importer. Now thanks to the technology commonly called “Fracking” enabling (for better or worse) the extraction of gas reserves the US is again an exporter, and cheaper energy is in the early stages of revitalising US manufacturing.
Early C20 imperialism was driven by energy, the French and British in The Middle East, British and Dutch in SE Asia, The Japanese bombed Pearl Harbour because of the oil embargo, Hitler went after the Caucuses for the oil, it is a long story.
Now we have another revolution on our hands.
We are no longer looking to conserve energy, which has been the mantra since the 70’s oil shock, now we are seeking to harness it from other sources.
The tops of our buildings with rooftop PV, which has dropped 80% in cost over a real short time, wind, tide. Solar however is the most obvious, and potentially sensational advances are being made that will transform economies.
In this state (NSW, Australia) we are arguing about the sale of the “poles and wires” of the power distribution companies to fund public works, schools, and so on. Vital projects, but at the same time we are cutting the R&D that will deliver us the world of tomorrow.
Any idiot who has thought about this stuff (even I could figure it out in a number of posts over the years) would come to the conclusion that just like computing, power generation will become distributed, so, rather than argue about the disposition of yesterdays assets, we should be considering how we build a leverage those of today, let alone tomorrow. Moore’s Law in reverse, combined with the explosion of adjacent technologies.
Companies like IBM with their Deep Thunder and Smarter cities initiatives are driving the research agenda, Germany outdoes the US in spreading the impact of innovation from the lab to the manufacturing operations, and in Australia with the abundant easily accessible sunlight in a politically stable country we are ignoring all this in favour of short term political tit-bits, trivia, and populist bullshit, mixed in with the occasional poorly sold but sensible objective.
Will we ever wake up????
