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.
Jul 15, 2014 | Leadership, Small business, Strategy
The complexity of the world these days demands an approach to strategy that is counter intuitive, perhaps even a contrarian approach to the accepted best practice.
For decades managers have sweated and planned, and set out to execute, just to see the planning go to crap at the first hurdle, as things rarely happen as planned.
In the “MBA model”, you push on regardless, because it is planned, the resources gathered, prioritised and allocated, a “push” model of strategy development and deployment.
If the opposite were to happen with strategy, as it does with agile software development, how would it differ?
A continuous process of combining strategic hypothesis generation and A/B testing, going hand in hand with incremental resource allocation from a diverse pool of experts, rather than a from pool of available bodies? Seems to be a sensible alternative, so why don’t we do it?
Generally we people like certainty, clarity, and a minimum of ambiguity, and that comes with a detailed plan. Problem is, plans are only as good as our ability to read the future, which is generally pretty ordinary. The better way is to know the end point, and if we can manage the ambiguity and uncertainty, make our own away there based on the obstacles we encounter.
In this uncertain world, we need a compass, not a roadmap.
Maps tell us to move forward a defined distance, take a left, followed by a right, and so on, whereas a compass tells us the direction, not necessarily the detail of how to navigate the immediate terrain.
This counter intuitive approach to strategy is often what SME’s do, without really recognising it as such. They react to what is in front of them, rather than what they may have planned to do, often the plans do not even exist in a formal sense. Their challenge is to apply some focus on the longer term, not just the burning bridge they are standing on.
Jun 25, 2014 | Customers, Leadership, Strategy
courtesy Tom Fishburne. http://tomfishburne.com/2009/04/the-value-proposition.html
Customer Value has almost become a cliché, often trotted out to cover the lack of real marketing insight.
Effective articulation of customer value, and the business model and processes to deliver it remains at the core of those businesses that find success. It is particularly relevant to SME’s as they must ensure their very limited resources are focussed where they can best deliver outcomes, they do not have the benefit of scale to absorb mistakes.
Following is a list of questions frequently asked in strategy sessions that seek to identify, and give form to this most elusive notion of “Value”.
- Why do customers come to us rather than go to the competition?
- What customer needs are currently unmet or under met?
- How have customer needs changed in the last few years?
- If we project forward two years and look back, how have their needs changed now?
- What could our competitors do for our customers that we would like to be able to do?
- Where are new customers coming from, and why?
- Are there new competitors emerging that offer value different to ours?
- To what degree does our concerns for customers welfare really drive our =decision making
- What else could we do for customers?
- What could we do to attract new customers?
Each of these questions can and should generate a great deal of discussion, the quality of that discussion is a measure in itself of how well you understand “Why” you do what you do, rather than just What and How you do it.
The really successful companies do not wait for strategy session, they ask themselves these question every day, and the answers drive how they behave and interact with customers and prospects.
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 4, 2014 | Branding, Collaboration, Leadership, Marketing
Debate and argument fills a vital role in all parts of our lives, it is what makes us human, this capacity to be able to think and communicate, rather than just react.
For an extended period with two different employers, I reported as marketing manager to a bloke with whom over time I developed a rapport that enabled us to achieve some great things, creative and commercial. We won awards, opened some new markets and redefined others, and importantly, delivered market share, brand credibility and profits to the employers.
Reflecting on the experience, now a long time ago, it seemed to me that there were 7 factors at work:
- Play devils advocate. We seemed to just fall into this habit of taking the opposite view of the one expressed, to debate the point by seeking the holes in the data, logic, and assumptions, irrespective of our own starting point. We usually ended up somewhere other than either of our respective starting points.
- Never allow authority to override or diminish the views of others. At no time during a debate was my view overridden by his organisational authority. From time to time after the debate was over, with some level of disagreement still present, he had to make a decision contrary to my expressed position. However, when those occasions arose, I was happy to go along, and execute he decision, as the process we had gone through was thorough, and my views had been listed to, and taken into account prior to the decision. Some form of “due process” had occurred.
- Recognise when you are wrong, and be very open about it. What more needs to be said? Very few things build respect quicker than someone being able to concede that they were wrong, and respect is vital for an open, non personal debate.
- Encourage absolutely open communication. This requires lots of trust, and goes with the point above, as respect is a vial element in trust. It is behaviour that engenders trust, not words. People watch the behaviour of others, and over time make a judgement about the level of trust they are prepared to offer. Trust is hard won, but easily lost.
- Openly question the foundations and logic of your own position. Being prepared to not just have others question your position, but being prepared to shoot your own scared cows, and we all have them, enables others to do the same thing with confidence that the commentary is never personal, and is welcome.
- Be prepared to enable, more than just allow, projects and ideas you disagree with to proceed. From time to time, when a project is allowed to proceed that may fail, and the “boss” thinks failure is likely, but gets behind it the impact on the creative energy is enormous. I recall one project that would completely disrupt the category the launch was aimed at, was allowed to proceed on the basis of my instinct. We had done lots of research, tested to the wahzoo, but this was a genuine innovation, something consumers had not seen, so asking them what they thought was encouraging but inconclusive, as they had no actual context against which the idea could be judged. There was considerable capital investment involved, and the “boss” went in aggressively to bat for the project, whist quietly being less than convinced. For an organisational subordinate to have that level of support is enormously empowering. Luckily, the launch was an enormous strategic and financial success.
- Be prepared for failure, but be determined to learn from it. We learn more from than we do from or success, so being prepared to experiment, adjust assumptions and try again is fundamental to learning. As part of the preparation for the launch referred to above, I had a range of plans prepared that would ensure that in the event of failure, the financial losses would be outweighed by the organisational learning that occurred. This was just good prudential management practise, and fortunately those plans were not necessary.
An unusually long post this morning, glad you go this far. It was triggered by a post I read earlier in which Ed Catmull, CEO of Pixar reflected on the reasons for his creative success. Many were reminiscent of mine, and his notion of a “brainstrust” is extremely attractive.
Such is the source of blog post ideas, a spark, combined with personal experience. This answers one of the questions I am often asked as I continue to find stuff sufficiently interesting to me, and hopefully to a few others, to post.
May 28, 2014 | Alliance management, Collaboration, Leadership, Small business
Mojowire.net.au
Tonight is the first Origin game of 2014, and so I expect to hear lots of people using sporting analogies over the next few weeks, particularly football.
Sporting analogies abound in business, “A team of champions does not make a champion team”
How many time have you heard that?
As management layers are removed, and the management culture evolves rapidly towards recognising the value of teams in a commercial context, we often use the sporting team as the foundation of the commercial team .
Familiarity, known skills, interpersonal relationships, all that stuff gets considered as a team is put together. Sometimes of course, in the real world teams are put together with whoever is to hand, has some spare time, is at the water cooler too often.
We confuse this simplified sporting stuff, useful in its own context, with the key components of a commercial team faced with commercial challenges.
In that case, you need a range of technical and domain skills, a questioning mentality, and a willingness to try things, and usually some diversity, some new or unusual blood being injected to create a sense of discomfort that always precedes game changing ideas and insights.
Unlike sporting events, which last for a hour, more or less, commercial challenges are way longer term, when the micro interaction is important more as a learning event than a game breaker.
