The key to successful growth is broken plates. Let me explain.
There are only three resources available to any organization:
It doesn’t matter if you are a home-based business, a large multi-national or fast-growth, medium-sized business, you do not have enough time, money or energy. The key to success is how effectively you apply those resources. Strategy is the process of deciding how to allocate them. Sometimes a critical part of strategy is deciding where you won’t apply your time, money or energy.
Whenever I have strategy discussions, I always think of those variety shows where some performer comes out and spins plates. When the spinner had just a few plates, it was a lot of fun to watch as all the plates spun magnificently. But as more plates were added, they began to wobble and the spinner had to work harder and harder to keep them all going smoothly. None of the plates spun as well as when there were just a few. Soon, despite the spinner’s efforts, plates began to fall and break.
Think of your opportunities or tasks as plates. When you have a few, you do them well. As you add more plates, you (and your organization) have to work harder and harder. Soon, despite your best efforts, results start to fall below expectations.
The key for any great growth company (and great ones are the only ones that last) is to determine which plates it will keep spinning no matter what. In other words, you have to decide which tasks you will focus on and which ones you will abandon. Okay, so that’s not new. Lots of consultants have given this message.
Now, let me give you the rest of the message – the part that no one seems to like to tell. When you choose which plates (opportunities or tasks) you are going to keep spinning, you also determine which ones you are NOT going to keep spinning. The plates you don’t spin will wobble and fall. When they fall, they will break. There will be a loud noise. There will be a mess to clean up. It won’t be pretty. What I want to tell you is that it’s okay. You have to let some plates break if you’re going to do a great job of keeping the plates that matter spinning well. Companies that don’t, spread their resources too thin and get stuck.
Of course, if you don’t want plates to clean up, your only other option is to leave them all wobbling – and what’s the fun in that?
Until next time, Doug
If you have a lot of plates that are starting to wobble and aren’t sure which ones to put your time, money or energy into spinning further, you may want to get your team to work through our Growth Barriers Diagnostic.
Despite all of the talk within business circles about customer-centered initiatives, the reality is that most businesses still take an inside-out approach to sales and marketing. In a study of senior business leaders, 85% agreed that differentiation solely on the traditional elements of price, delivery and lead times was not a sustainable business strategy (Beyond Philosophy. “Customer Experience: The Next Competitive Battleground,” p. 1).
From my experience consulting with thousands of businesses, I have learned this sad truth: even business owners who think they have a customer-centered sales and marketing approach often actually have one that is exactly the opposite. Here’s a simple test to determine whether you are really customer-centered: “What do the people throughout your company spend the most time talking about? The solutions you provide? Or the problems your customers face?” The answer will give you insight into whether the strategy you are using to differentiate your business will work.
Ask yourself this: Does your company sell a solution that’s looking for a problem? Organizations face three major challenges when they try to identify a prospect’s problems and provide solutions for them. One, your prospects might not be aware of nor fully understand the problems they have. Two, they might not share the problems they know they have with you until they trust you and they won’t trust you until they believe you understand their problems better than they do. And three, your prospects might not be aware of the costs associated with the problems they have.
Here is what you absolutely must understand — To overcome these challenges, your primary focus must be on the problems your clients and prospects face, not on your solutions.
You do this with a process that I call Building the Bridge™. The “Bridge” you build in this process is from your solutions to your market’s problems. I will be writing extensively about this over the course of the next few months, so start taking stock of where your go-to-market strategy is actually coming from and stay tuned.
Until next time, Doug
P.S. If you’d like to read more about how you can begin Building The Bridge, e-mail me and I will send you a white paper on the subject.
What if your business could accomplish things you never thought it could accomplish? What if you could create a completely different business model than the one you have right now? What if you could start charging for those services that you are giving away for free? What if…?
Building and sustaining a fast-growth business is difficult and complicated. Our abilities are constantly being challenged, and often, it never appears as if there is time to rest. Unfortunately, this can cause tunnel vision or we can become myopic. When that happens, it becomes more difficult to do what needs to be done.
The best immunization against this myopia is to ask yourself impossible questions frequently. One of the best impossible questions is, what if? Another is, how would we do it? Don’t short-circuit your thinking by considering all of the reasons you wouldn’t be able to accomplish your what-if. Suspend your disbelief. Make your brain stretch far into the future. Pretend that the obstacles don’t exist. How would you do it and what would the impact be.
This does not mean that you should embark on implementing your what if (although it doesn’t mean you shouldn’t either). Just asking yourself the questions from time-to-time is enough. It keeps your brain geared into what’s possible.
I remember when I started Imagine Business Development and I was coaching 10 clients. I asked myself, “what if we could coach 10,000 clients – how would we do that?” For quite awhile, I didn’t think we could (I’m still not sure that we can but we’re getting there). Simply asking the question, however, kept my mind open to what is proving to be an effective growth model.
There’s another advantage to asking these types of questions. It helps protect you from tomorrow’s competition. What if someone, somewhere (maybe in their basement or their garage) is asking themselves these questions? Wouldn’t it behoove you to get the answer first?
Every now and then several people tell me about a book at the same time. When this happens I find that it’s a good thing to read it. This happened recently with The Ice Cream Maker, by Subir Chowdhury.
The book was a simple read and contained many pithy quotes and thoughts – nothing new in a parable (even my own). I don’t disagree with the need to pay attention to quality, empower your workforce, or to listen to our customers (with some exceptions).
The danger of this book is that if you follow its simple advice, you throw yourself smack in the middle of the commoditization trap. The book treats multiple situations with the same medicine. As I’ve mentioned in a previous article there are two value segments that people fall into: fundamental value or total value. Following this book’s recommendation would force you to implement a fundamental value proposition — whether that is right for you or not. Once you find yourself working with that value proposition, commoditization awaits.
The book also goes far a field in stating its argument. One of its main points is that “Quality is not part of [America’s] DNA.” The author claims that America is an innovator, but “As a result [of our lack of quality DNA] we’re constantly creating new products, and new markets, only to lose them to other companies. American companies find themselves on a treadmill, constantly having to come up with new innovations in order to stay ahead of our competition.”
This argument is insane. Certainly the world is stepping up in the competitive landscape. Certainly America cannot rest on its laurels as it has at times (and does today). The treadmill Chowdhury refers to has nothing to do with quality – the treadmill is staying ahead of commoditization. What America has in its DNA is demand creation. America focuses on high-margin activities and out sources low-margin activities to other countries. It’s a natural result of business evolution. Any business that forgets the power of commoditization, and the need to stay ahead of it, has only itself to blame for failing.
That’s my read, feel free to e-mail me your comments.
Until next time, Doug
I’m reading a fabulous book, Presence, by (among others) Peter Senge, famous for The Fifth Discipline.
While it’s not written specifically about growth, there’s an excerpt that explains the challenges that we are all facing these days as we try to grow our businesses. I don’t want you to miss it, so here it is:
In 1999, when Otto [Scharmer, a co-author] and Joseph [Jaworski, another co-author] first interviewed him, [Brian] Arthur talked about the need to “sense an emerging future” in order to meet the challenges of managing in an increasingly technology-based economy. As the pace of technological development quickens, so does the rate of what economist Joseph Schumpeter call “creative destruction” – of products, companies, and even entire industries. This leads, said Arthur, to the continual “forming, configuring, locking in, and decaying of structures.” Little is predictable or repetitive. Problems are not well defined. The rules of the game as well as the other players change rapidly as the stakes get increasingly higher. Overall, business operates less and less like “the halls of production of the old, repetitive manufacturing industry” and more and more like a kind of “casino of technology.” In this kind of business environment, making decisions based on the habits of past experience is no longer optimal and wise.
This excerpt is worth pausing for. The industrial age is over. Its concepts and formulas no longer work. We all need to find new ways to solve new problems. Think about it.
Until next time, Doug
It’s tough being a doctor today. Traditionally, all medical professionals have operated under the assumption (arrogantly, at times) that there is value in the knowledge, training and experience they offer their patients. They know people value good health or at least the absence of constant pain. So they assume their value to their patients is being able to help them when their health, or their life, is in jeopardy. In that sense, every doctor starts out with a pretty good value proposition.
Then the realities of being a doctor in today’s world start getting in the way. Insurance companies pressure them to reduce fees. Bean counters at the HMOs want to dictate the quality of care they provide. Malpractice insurance premiums are out of sight. Government agencies at all levels regulate every move they make. Swarms of personal injury lawyers are waiting to wipe them out if they make a mistake. The financial demands of their practice force them to take on more patients that they can handle comfortably. They put up with all of that and for some reason, their patients seem to hate to see them. That’s the tough part – virtually everybody hates to see the doctor.
Why does everybody hate it? Because for the average patient, “seeing the doctor” is a value-extracting experience. From the patient’s perspective, everyone involved in the process — the practice, the doctors, the drug companies, the insurance companies — is extracting value. The entire process is internally focused; attempting to make everything as efficient as possible; even if it is at the expense of better care. Worst of all, patients feel doctors have no respect for their time or concern for their emotional distress when they make them wait an hour for a ten-minute consultation.
No one in the traditional medical field seems to be asking, “How can we create value with our process?”
Typically, people go to their doctor when they have to. It was assumed that this was just the way people were. “Sure,” ‘they’ said, “preventive medicine is important but people just won’t do it.”
Now, Doctors are scratching their heads at the enormous growth in alternative medicine, holistic medicine and other ‘take care of yourself before there is a problem’ practices. I, myself, now see a nutritionist once a week, a physical trainer three times a week, I’m considering seeing a chiropractor – and I HATE seeing my doctor. Don’t get me wrong I like my doctor, I hate seeing her. Why? Because it is the most dehumanizing experience I’ve ever been exposed to. The experience makes me long for an airport. The whole experience feels internally focused. The doctors and staff seem to care only about what will make things work efficiently for the practice – not for me. The process forces people (the office staff and even the doctors) to treat other people (patients) in a manner that they would not ever want to be treated.
I talked to my doctor about this and she was very empathetic and explained to me the challenges her firm is dealing with (short staff, regulation, too many patients, too many demands, etc.). That’s her problem, it should not be her patients’ problem. In a value creative process, it would not be; in a value extracting one, it is.
What does this have to do with growing a fast-growth business? Two lessons. First, do everything you can do make sure that everything you and your company does creates value. Value is binary, if you are not creating it; you are extracting it. To many extractions and you’re dead.
The second lesson: Value extraction is an easy trap to fall into. Do you think Doctor’s want to make airports look humanizing? There was a time when the doctor-patient relationship was considered the ultimate relationship, but eventually doctors felt as though there was nothing they could do. But, is there?
Here’s the point – there are a group of doctors who have decided they’ve had enough of this situation as well. They are offering patients a nice value proposition. In exchange for an annual fee (typically between $1,500 and $3,000), the doctor will limit the number of patients they take (often to as few as 200) in exchange for the promise of accessibility, short wait times and, most importantly, relationship. These doctors have taken the least value-creating part of the business and turned it into an advantage. Think about the impact limiting a practice to 200 patients would have. More time, fewer insurance issues, lower insurance costs. I could go on and on. Doctors that I am familiar with who have implemented this program are generating fees of as much as $600,000 a year (per Doctor), before they see their first patient or file their first insurance reimbursement. Patients (my parents go to one of these practices) love it. And they’re growing.
What can you do to take the least value creative part of your experience and transform it? If you don’t, someone else will.
Wishing you good health, Doug.
It finally sank in on Madison Avenue in 2005 that the 30-second commercial is fading as a means of hawking products or services. Ad executives will be busy in 2006 trying to figure out what to put in its place.
From – The Wall Street Journal, Tuesday, January 03, 2006; As 30-Second Spot Fades, What Advertisers Will Do Next
Once again Madison Avenue is proving that they don’t get it; that they are incapable (or at least clearly unwilling) to look at themselves when trying to solve their problems. Advertisers are blaming the proliferation of media, and devices like the iPod and Tivo for the ineffectiveness of their methods.
The problem doesn’t lie within the 30-second commercial itself, the reason the 30-second spot is dying (if it isn’t already dead) is because it doesn’t create any value. At best it communicates the value the ‘seller’ claims to create (visit my previous post on value creation vs. value communication. Anything advertisers replace the 30-second spot with will be equally ineffective if it fails to create value.
Any organization looking for growth needs to stop focusing on their methods and start focusing on their message – is it worth hearing! When I started in business I wanted to know how to get coverage from the news media. An early mentor of mine said that the way to do that was simple – be newsworthy.
Consumers, people, are tired of hearing claims, promises and silliness. If Madison Avenue wants to improve its results, it should start by looking within, and begin creating value.
Until next time, Doug
Successful selling requires a number of things happening in concert. You need an excellent offering, strong salespeople, effective training, outstanding customer service, effective advertising, good PR, positive word of mouth, a supportive economy, knowledge of what your competitors are doing, and more. It is no wonder so few companies take a scientific approach to selling – there is just too much to monitor. It is also no wonder that companies are having a tougher time achieving and sustaining the growth rates they desire, let alone achieving margin growth. Selling has become too complicated.
It shouldn’t be that way. Sure, there is a lot that goes into successful selling, but the reality is that there are very few things (in many cases just one thing) that really determine whether or not a profitable sale will take place. These activities are what I refer to as What Causes Sales.
Want to begin to figure out what causes your sales? Then make a list of everything you and your company do that leads to sales. Go ahead, get a piece of paper and start writing down everything that comes to mind. No, don’t read further until you’ve done this. Completing this exercise will save you hundreds of hours of lost time and frustration; failing to complete it will cost you thousands of dollars and many lost hours. The choice is obviously yours.
When you have your list completed, go through it and cross out anything that is not a direct cause of a sale to be completed. This should reduce the list of options you are considering substantially. At my company, target companies answering the question, “What are your biggest barriers to growth,” is what causes sales.
Now go through this list and determine the one item that has the most direct cause-effect relationship with completing a sale.
IMPORTANT NOTE: DO NOT CONFUSE PROXIMITY WITH CAUSALITY
For years, salespeople have made the mistake of over-focusing on “closing skills” as the most important determinant of sales success. Because asking for the sale comes just before getting the sale, proximity in time was confused with cause. This misunderstanding led to many bad ideas and lots of book sales. I know a sales trainer who says that if a salesperson hasn’t asked for the sale at least eight times (I repeat, at least eight times), the salesperson has no right to expect a sale. Don’t make this mistake.
ANOTHER IMPORTANT NOTE: WHAT GETS MEASURED GETS DONE
There is an old business axiom that says, “what’s measured, gets done.” If you choose to measure the number of meetings your salespeople have, they will begin having more meetings. This is good if more meetings are the cause of increased sales, but useless, or worse, if they aren’t. If you measure proposals going out, more proposals will go out. If you measure referrals, your people will get more referrals. If you measure calls coming in, more calls will come in. The key is to make sure that what you are measuring is actually the cause of sales for your company.
Finding the one thing that causes sales is typically very difficult, especially for entrepreneurs and executives who are so used to monitoring a myriad of factors. As a matter of fact, this concept seems so simple to some people that they find it difficult to trust the concept. But as you isolate the causes of your sales (preferably one, but no more than three) and begin tracking and measuring those issues, the activities that provide the most leverage in managing your pipeline will start to emerge and become clear. The key – again – is to make sure that you are measuring what actually causes sales. If you or your team needs help working through this exercise, send me an email with your questions and I’ll get back to you right away.
Until next time, Doug