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Focus On Your Core
This book review originally appeared in Baltimore and Washington SmartCEO Magazine February issue.
When I was a wealth management advisor at Merrill Lynch, I used to keep a sign in my office that said, “Don’t confuse brains with a bull market.” For the last five years, I’ve been telling senior executives and salespeople at mid-market companies, “just because the fish are jumping in your boat, doesn’t mean you an expert angler.”
As businesses put growth back at the top of their agenda and try to put the issues of the “Great Recession” behind them, they are discovering a fatal flaw:
They’ve lost their core business (or they’ve never had a core business).
For far too long, businesses have been selling to the lowest common denominator, simply because general demand was growing rapidly. For 25 years, from 1982 through 2007, executives could count on the record growth of markets to mask many of the errors that were taking place beneath their businesses.
Now, in response to the economic displacement companies are struggling to find new formulas for growth. If growth is on your agenda this year, there are two things you should understand and focus on.
1. Maybe Your Business Was Never As Big As You Thought It Was
I work with a client who did $38 million of business in 2007, did almost $62 million dollars in 2008, and did $30 million in 2009. Demand in the market dropped by more than 50% as a result of the recession. Now, I don’t care how well you manage your business –that type of loss hurts.
As we worked with them to put together a strategy that would allow them to return to profitability, we discovered something quite interesting: They had lost their core.
So we did a “core business analysis” to deterimine what their core business really was. We found that, at the peak, their core business was about $19 million. In 2009, when the business was down nearly 50%, the core part of their business was only down 20%. Plus, their core business had gross margins that were 25-75% above their other lines of business.
Here’s what I know, and what we told them. If they had viewed their business as a $19 million business (their core) instead of a $62 million business and fully focused on that business there are certainly a couple of things that would have happened:
- The core business would have been larger than $19 million. Now, the company probably wouldn’t have grown to be $62 million; but their core business would have been bigger had they focused on it.
- The business would have been more profitable – in good times and bad.
We recommended they follow the strategy implemented by Steve Jobs when he retook over the reins at Apple and announced, “Apple will get bigger by first getting smaller. We will refocus on our core and we will continue to grow for our core.” No suprise, that Apple is the top performing stock since Jobs came back.
2. Good Is No Longer Good Enough
Famous investor Warren Buffet is fond of saying, “It’s only when the tide goes out that you learn who’s been swimming naked.” In the post-recession, “new normal” good is the equivelent of swimming naked. It works for you if the tide is in your favor, but once the tide turns you’re in toruble.
Simply put, there are only two types of companies in the world. You are either:
- The Best, or
- Me Too
And, no matter how good you think you may be, you cannot be the “best” for everyone. To be the best you must focus on the key activities and the key customers where you can excel. You must disproportionately invest and allocate your resources to those areas. You must take away resources, such as time and attention, from the areas where you have determined you will not be the best.
When you’re the best, you earn margin premiums that allow you to further invest in expanding your competitive advantage. If you’re a “Me Too” company, then you’ll be forced to compete with everybody for the table scraps.
Executives that are intersted in what is involved in both identifying and exploiting their core business would benefit from reading Chris Zook’s Profit From The Core: A Return to Growth In Turbulent Times. Zook, a consultant with the Bain Consultants, shares the research Bain Capital has conducted into what businesses must do to trigger real growth.
According to Zook, even in good times nine out of ten management teams fail to gain real growth profitably. When you factor in natural growth, fewer than one in ten companies deliver growth and return greater than the cost of capital. Not suprisingly, 80% of those companies focus on their core.
Design Thinking In Sales
A few weeks ago, I shared a review for The Design of Business, an excellent perspective on design thinking and strategy. Since reading the book, I’ve been far more aware of how this type of thinking provides a critical advantage in the sales process.
Successful selling today requires that you be able to get your customers to understand the limitations of the status quo and to develop complex solutions that can be easily understood. You must have the ability to understand your customer’s current (perceived) reality and to enable them to see how your solution can effectively change that reality to create a better one.
This requires a dynamic-type of thinking that is missing in many sales organizations. Design Thinking is ideal for this effort. Combining the strengths of deductive reasoning and inductive reasoning, “Designers” can lead frustrated buyers to the future they desire, while driving high-margin sales opportunities.
By no means do I think every salesperson must become a “Designer,” but every sales organization needs to have a least one.
If you’d like to learn more about Design Thinking, you can download this article from Harvard Business Review (subscription required) or get the book The Design of Business (affiliate link).
Creating Equity Value For Your Business
This book review originally appeared in Baltimore and Washington SmartCEO Magazine October 2010 issue.
It’s the dream of every entrepreneur. Start a business, build the business, grow a great team of people, have a lot of fun doing it and then sell it for millions of dollars, creating financial independence on one hand and a great feeling of accomplishment on the other.
The reality for the vast majority of entrepreneurs, however, is quite the opposite. Often saddled by meeting expenses, managing the complexities of growth and people and, today, saddled with a difficult economy most entrepreneurs ended “owning a job,” and if they are even able to sell the business are able to extract the equivalent of an income for a few years; and even that is becoming increasingly difficult.
There comes a point in time when business owner must make the critical and philosophical decision:
Is my goal to build a business that will create equity value (and, hence, can be sold) or is my goal to build a cash flow stream that can support me and my family for the future?
This question has perplexed business owners and entrepreneurs since the beginning of capital markets; and there are few, if any, questions that can get the blood boiling between entrepreneurs than this one.
This is a critical question that every business owner (and I mean every one) needs to answer as early in their business career as possible (that means that if you haven’t answered the question yet – do it now!) The steps you take, and the rules to follow for building a business that is designed to create cash flow are very different from the ones for building a business designed to create equity value.
The unfortunate mistake that most business owners make is that they take the middle ground, focusing on cash flow today, while hoping to create equity value in the future. Please don’t misunderstand, building a business for equity value does not mean that you don’t focus on creating cash flow – the key question is how is that cash flow created and managed.
If you are building a business for maximize cash flow, you should:
Exploit the capabilities of key employees – typically the founder
Focus your hiring strategies on leverage the capabilities of those key employees (this typically results in a few highly capable people and lots of support people)
Broaden your scope of services to take advantage of the unique talents of those people and to gain an advantage in the marketplace
Customize, customize, customize
Looking at this list if services oriented businesses like law firms, consultancies, engineering firms, accounting firms, etc., don’t be surprised. The vast majority of services businesses fall into the category businesses that build cash flow.
If you are building a business to create equity value, you should:
Narrow the scope of your offerings so that they can be sold, delivered and serviced through the development and maintenance of process.
Build a team of people that make any one (or few) employees unnecessary. This results in building a highly capable senior team where the founder is often not even the senior officer.
Rather than customization, focus on replication and consistency.
This list, on it’s surface, is often not considered to be conducive to services firms, and it is, most often, services firms that find their founders stuck in the trap of “owning a job” rather than “owning a business.”
There is good news for those professional services business that desire to create equity value, rather than solely creating cash flow, in John Warrillow’s new book: Built to Sell: Turn Your Business Into One You Can Sell. Built to Sell tells the story of fictional advertising agency owner Alex Stapleton.
Anyone who has ever started a business will be able to identify with Stapleton. Whether it’s dealing with the under-performing employees, good performers who are primma donnas, or dealing with un-appreciative clients who don’t listen to you, but produce so much revenue that you feel like your stuck with the client – Stapleton represents the hopes, dreams, and frustrations of every person who has started a business.
Stapleton’s agency is stuck. Alex had hoped to build a great agency, do great advertising campaigns, and work with a group of highly talented people doing super creative work. Unfortunately, Alex spent more time dealing trying to figure out how he could get his next project to keep the team billable and continue to make ends meet.
He meets up with Ted Goran, an old family friend, who had inspired Alex to become an entrepreneur. Ted is a successful serial entrepreneur who has built and sold several businesses in his career. Through the book , Ted teaches Alex the keys to building a business that create equity value and we get to experience the journey of what it really takes to sell a business.
While the story itself is a bit hackneyed, the lessons taught are excellent – and valuable – to entrepreneurs who want to focus on creating a business that creates income for them or building a business that can be sold.
New Times Call For New Thinking
This book review originally appeared in Baltimore and Washington SmartCEO Magazine August 2010 issue.
Running a business used to be about analyzing options, determining a path, and solving the problems that presented themselves along that path. This approach is no longer enough, as more and more, successfully leading a business means that you must continuously manage what have become known as “wicked problems.”
Wicked problems, as defined by brand strategist Marty Neumeier, are “problems so persistent that they seem insoluble. Unlike the relatively tame problems found in math, chess or cost accounting, wicked problems tend to shift disconcertingly with every attempt to solve them. Moreover, the solutions are never right or wrong, just better or worse.”
You know the list:
- Unemployment
- The gulf coast oil spill
- Managing the client experience
- Determining where to invest your limited resources
- Growing your company
Albert Einstein once said, “Problems cannot be solved at the same level of awareness that created them.” As growth-oriented businesses begin to get back to the focus of growing profits, rather than surviving the recession, they must find new ways to attack markets, they must find new methods of thinking, and most importantly they must find new ways to guide planning and execution.
Traditional strategic planning has run its course, and is no longer enough to guide companies through the wicked problems they are sure to encounter. The fundamental problem with strategic planning as it is most often practiced is that it requires companies, and the people within them, to make a fundamental trade-off decision that kills. Businesses must choose between:
- Exploration – the search for new knowledge, and new opportunities. We typically think of the “great entrepreneurs” as being strong here. Intuitive thinking is the dominant position here, supported by the philosophy that “no great product was ever created by a comprehensive double blind market analysis.”
- Exploitation – the maximization of payoff from existing knowledge. Most large companies focus on exploitation where analytical thinking is the dominant approach.
We tend to view start-up businesses as excelling at exploration, and then we trade exploration for exploitation, in order to scale the business. The problem with this approach is that it forces executives to chose the “right” type of thinking, when the reality is that neither approach is right – or wrong.
The time has come for a new form of thinking. A form of thinking that embraces the fact that neither analysis or intuition is enough – the type of thinking applied by the greatest businesses and organizations in the world today. From Apple and IDEO to Proctor and Gamble and The US Military. This new form of thinking is called Design Thinking.
Roger Martin’s new book The Design of Business: Why Design Thinking Is The Next Competitive Advantage addresses these issues as well as any book I’ve come across. Martin defines design thinking as the space that sits squarely between the past-data driven world of analytical thinking and the knowing-without-reasoning world of intuitive thinking. The dominant approach here is abductive logic.
Martin argues, and I agree, that most businesses choose exploitation over exploration because they favor reliability over validity. I’ve lost count of the number of times businesses continue to do the same thing – again and again – only to expect a different result; which is, of course, Einstein’s definition of insanity. They chose this path, not because they are necessarily insane (though I admit that sometimes I wonder), but because it is “safe” and known.
Businesses must embrace the philosophy of Charles Sanders Pierce, a turn-of-the-twentieth-century philosopher, whose great insight was that it is not possible to prove any new thought, concept or idea in advance. The only way to validate them is by applying them. To succeed we must move away from the standard definitions of proof and the false certainty of the past. We must accept the mysteries and have the courage to ask “what could be?”
Pierce called these decisions “logical leaps of faith.” Martin uses McDonalds as a clear example of a company that, in its heyday, applied design thinking. Ray Kroc, and before him the McDonald brothers, had no “proof” that their ideas would work, but they did not lack logic.
With product life cycles shrinking to unimaginable lengths and customer demands increasing every day, businesses have gotten tougher than ever. When you combine that with unprecedented levels of competition and economic disruption, it should not take an intelligent executive long to realize that there are no past lessons to learn from.
Businesses and their leaders must abandon traditional, linear thinking of yesterday, whether it’s based in analysis or intuition. Instead, they must replace with the evolving approach of design thinking. Continuously explore the mysteries of today, hypothesize, trial, error, refine, and explore yet again. The businesses that do that will have the advantage tomorrow, and Martin’s new book is a great place to start.
If You Want to Own a Job, Listen to Coultier
A friend of mine pointed me to an article in Entreprenuer Magazine by business consultant and self-purported turnaround expert George Cloutier. In it he writes, “I’m a big proponent of the “just view me as God” school of management.”
I first became aware of Cloutier when I was asked by his PR firm to review his book: Profits Aren’t Everything, They’re the Only Thing. Cloutier promises to share the “real truth” with small business owners. I didn’t review the book because I thought his ideas were a bit too over-the-top or caricatured for my tastes.
Over the last few months, I’ve heard his name and/or been pointed to his stuff several times. So I’ve decided to add my thoughts.
Cloutier says that small business owners focus far too much on being liked and don’t provide the necessary leadership. Now, let me be clear – I completely, 100% agree with this. My problem – and it’s a big problem – is with his solution.
His prescription (in both the column and the book) include gems like these:
- Be a dictator.
- Tell your employees: “Don’t think–obey.”
- Forget your likability score.
- Be a feared general.
- Fear is the best motivator.
If Cloutier is giving this advice in a situation where catastrophe and bankruptcy are the next step, I can certainly understand. However, as best I can tell, Coutier is advising small business owners to run their businesses like this all of the time. His advice is like an intense diet – you’ll lose weight (turn things around) fast, but there is simply no way you can sustain the approach.
Business is far too complex, chaotic and fast moving today. Autocratic approaches like these aren’t just unpopular, they’re ineffective. As Cloutier himself writes, “many small-business owners forget one important thing: They have to execute their battle plans with as few flaws as possible.” Today, anyone not thinking kills your ability to execute.
Frankly, his opinion IMHO falls into the category of lazy thinking. Just as it’s easier to go on a strict diet to lose weight than it is to adjust your life to a healthy lifestyle, it’s far easier to be a dictator than it is to create the processes that enable your business to succeed.
Look, I used to oversee the people who worked for me like a dictator. I excused by obnoxious, narcissistic behavior by saying things like, “we all have a job to do,” or “my focus is on the customer and if I have to break a few eggs to make the customer happy, then so be it.” What I learned was that if I didn’t let people own their jobs, and allow them to think, they’d never be able to do the great things I needed them to do. I also learned that once I gave my people the freedom they needed to perform, they became much smarter than me.
If you want to own a job rather than a business, Cloutier’s approach may work. Just remember that if you take his approach, don’t complain that your people don’t show initiative, don’t show empathy to the customer, or simply don’t care.
One of Cloutier’s favorite analogies shows just how flawed his thinking is. He likens his approach to the feared general. Yet, even the U.S. military has learned just how important collaboration is. They’ve learned that in war (as in business), sh*t happens and if the people responsible for executing the tactics aren’t a part of developing the tactics, the approach will blow up.
What’s unfortunate is that I think Cloutier has some good ideas. His hard talk about the need for owners to understand they own the business, and therefore they own the results is often heard, but not adequately understood. His advice that the “nicest” thing you can do for the people who work at the company is to make sure that everyone in their job owns their results and executes maniacally needs to be understood.
I just wish he’d talk about how to do it sustainably. Of course, if he really believes everything he’s writing, we’d all be better off just ignore him.
Dealing With Crazy-Busy Buyers
This book review originally appeared in Baltimore and Washington SmartCEO Magazine July 2010 issue.
One of the major points that I make to CEOs and salespeople whenever I speak with them (and a point you may want to make note of) is: NOBODY WANTS YOUR STUFF!! Nobody wants to buy anything from you. Early in my sales career, I had a coach who told me that everyone woke up in the morning with the same goal in mind. When I asked him what that goal was, he told me: “They don’t want to meet you.”
I’ve spent more than 20 years immersed in the world of selling, sales training, and sales leadership. Over that time, I’ve gotten more and more discouraged with the vast majority of approaches to selling. It’s not that the approaches, per se, are wrong or bad. The issue is much more nuanced than that. The fundamental problem with the vast majority of traditional, solutions-oriented sales approaches is that they all presume the prospect’s interest and/or awareness of their need for the product or service being sold.
This approach is fine for markets that have abundant demand, limited supply, and clear differences between one product/service and another. However, in busy, hectic, and complex markets where sellers are aggressive and everyone claims superiority, this approach leads to an ever-accelerating rate of commoditization.
On my blog, I’ve written a lot about The Drought that virtually every seller is experiencing. Today:
- There are fewer buyers and the buyers that are left have lower budgets.
- Despite the decrease in demand, competition and choice is as plentiful as ever.
- Buyers have less time and that means they have less attention to give to sellers or to understand a seller’s offerings.
The Drought is a double-edged sword for sellers. Fewer buyers and greater competition is a major obstacle in its own right. But, the bigger barrier is that solutions today are more complex than ever (especially if you are providing any type of superior offering), and the differences between your offerings and your competition are more nuanced than ever. Be honest for a moment. While you may provide the best alternative for your prospects (I certainly hope you think you do), they are more than enough adequate alternatives. The fact that prospects and customers have less attention to give you, creates an extreme barrier that enables them to understand the complexity of your offerings.
Selling organizations and salespeople must fundamentally change their approach in order to be successful tomorrow. Merely mastering sales techniques and being persistent are no longer enough to survive in the competitive jungle.
Jill Konrath, author and selling consultant, echoes this in her new book SNAP Selling: Speed Up Sales and Win More Business With Today’s Frazzled Customers. I became aware of Jill’s book and she was kind enough to send me a copy to review. Jill is a superstar saleswoman and has been helping small and mid-market businesses successfully sell to big companies for years.
She shares her story of how these changes virtually killed her business and the adjustments she had to make in order to thrive. Luckily for us, she shares these insights openly. SNAP Selling is one of the few books (or articles) that I’ve come across that accurately reflects just how customers really view salespeople today. The reality check she provides makes it worth the read itself.
While I’m not a fan of manufactured anagrams, SNAP Selling does address four critical success factors in selling today.
- Simple – Sellers today must eliminate complexity from the decision making process. Too often sellers, in the efforts to demonstrate just how great they are, make the process seem even more complicated than it is. This is proved by a recent survey of buyers that revealed that more than 40% of buy processes are ending in a no-decision.
- Invaluable – The only viable success strategy when there are so many adequate alternatives is to become absolutely indispensable to your customers. This is also true for salespeople. To succeed, salespeople need to be critical resources for their customer, not merely peddlers.
- Aligned – You must be customer centric today. The single, most important action a salesperson can take is to view the purchasing process from their buyer’s eyes. This will ensure that you stay relevant through the entire buying process and will speed up the process as well.
- Priority – Here’s the paradox: buyers have always been swayed by the tyranny of the urgent. Sellers, by helping buyers get a picture of the long-term, could overcome by clearly demonstrating importance. Today, your offering must be important and urgent.
Only by understanding the mindset, life, and needs of your buyers will you be able to position your offerings and your sales process to be successful. SNAP Selling provides a great place to start that understanding.
A Letter From Your Customer
Jill Konrath just released her newest book SNAP Selling: Speed Up Sales and Win More Business with Today’s Frazzled Customers. Jill was kind enough to provide me with an advance copy and I’ve just finished reading the book and it is one of the few books that clearly gets and addresses the issues of dealing with buyers in today’s Drought.
I’ll share a fuller review next month when my SmartCEO column comes out. In the mean time, Jill has given me permission to share a portion of the book. She shares a “letter from your customer,” that simply nails the psychology of buyers today.
Read it below – then digest it.
Dear Seller,
I have only a few minutes, but I understand you’re interested in selling me something. As far as I’m concerned, that’s pretty self-serving.
The truth is, you have no idea what my life is like. You may think you do, but you don’t – and you need to if you’re going to get my business.
I got to the office early this morning so I could have some uninterrupted time to work on a project –something I can’t seem to squeeze into the normal business day.
By 9:00 a.m., all my good intentions were dashed when my boss asked me to drop everything in order to put together a head-count reduction plan. Revenue slumped last quarter, and we need to cut costs.
Then Engineering informed me that our new product won’t be available for the upcoming trade show. Sales will go ballistic when they hear this. That’s the last thing I need to have happen.
Get the picture? Welcome to my world of everyday chaos, where as hard as I try to make progress, I keep slipping further behind. Right now I have at least 59 hours of work piled on my desk. I have no idea when I’ll get it all done.
Did I mention email? I get over 150 each day. Then, add to that at least 30 phone calls from sellers just like you who’d “love to meet with me.”
In short, I have way to much to do, ever-increasing expectations, impossible deadlines, and constant interruptions from people wanting my attention.
Time is my most precious commodity, and I protect it at all costs. I live with the status quo as long as I can – even if I’m not happy with it. Why? Because change creates more work and eats up my time.
Which gets us back to you. In your well-intentioned but misguided attempts to turn me into a customer, you fail woefully to capture and keep my attention. Let me be blunt: I don’t care about your product, service or solution.
I quickly scan your e-mails and letters looking for any self-promotional talk that glorifies your offering or your company. The minute it jumps out at me, you’re gone. Zapped from my in-box or tossed into the trashcan. Say it in your voice mail message and I delete you immediately. Delete, delete, delete.
When you spend an entire meeting blathering about your unique methodologies, great technology or extraordinary service, my mind wanders to important tasks that need to get done. Sure, I even occasionally check my Blackberry for messages while you’re speaking. But you would too if you were in my position.
I’m not always like this. Occasionally a savvy seller captures my attention, entices me to meet with them, shows me why I should change, and then makes it easy for me to work with them.
What are they doing? They’re completely focused on my business and the impact they can have on it. That’s what I care about – not their pitch.
If you focus on helping me achieve my objectives, I’ll listen to you all day long. But you can’t rope me in with the good stuff, then slip back into that trash talk. If so, you’re gonzo.
Make sense? I hope so, because I’m late for a meeting, and while I’ve been writing this, the phone’s been ringing off the hook.
Best regards,
Your Customer
Excerpted from SNAP SELLING: SPEED UP SALES AND WIN MORE BUSINESS WITH TODAY”S FRAZZLED CUTOMERS by Jill Konrath by arrangement with Portfolio, a member of Penguin Group (USA), Inc., Copyright (c) Jill Konrath, 2010What implications does this have on your business and sales efforts?
Roadmap to Success
This book review originally appeared in Baltimore and Washington SmartCEO Magazine June 2010 issue.
The toughest lesson I’ve ever learned about business, or any performance-related issue, is that often times a clear sign of progress is encountering new struggles. From my work with hundreds of small and mid-market businesses all around North America, I know I’m not alone here.
Now, thanks to Les McKeown and his new book Predictable Success: Getting Your Organization on the Growth Track – And Keeping It There, I finally understand just why this is true, and, more importantly, what I need to do about it. McKeown is a highly intriguing person to be writing a book such as a Predictable Success. An accountant by training, a bit of a serial entrepreneur by habit, and an advisor to mid-market companies as a profession, McKeown may be one of the few people who have seen as many businesses from the “backstage” as I have.
Predictable Success is best explained by a comment Jeff Immelt, Chairman and CEO of General Electric, made about his company, “When you put your foot on the gas in this company, it goes forward.” Every business owner or senior executive that I’ve ever met understands just how simple this sounds, and just how difficult it is to achieve.
McKeown shares his experience in both running organizations and advising others. McKeown introduces one of the most valuable constructs I’ve seen in business in recent years. He describes the life cycle a business goes through as defined stages:
Early Struggle: Defined as the time where a business struggles to:
- Making sure there is enough cash to keep you going.
- Clearly establishing that there is a sustainable market for your product or service.
The business mortality rate is, obviously, very high.
Fun: You’ve got the cash and the customers to keep you going. Business seems to become effortless. You’re close to your customers, your staff is excited, you’re “kicking butt and taking names.” Life is fast paced and exciting here. As the owner, you finally feel “successful.” The exclusive focus here is sales, because sales is profit.
Whitewater: You hit a wall. The very success that made everything so much fun in the previous stage sets the seeds for “Whitewater.” Suddenly, everything becomes complicated. You often feel like you’ve fallen backward as the focus, once again, goes from sales to profits.
You need to put systems in place here, but getting those systems to work is far more difficult than you could ever have imagined. “The organization seems to be going through an identity crisis, and you may even be doubting your leadership and management skills.”
Predictable Success: Simply put, you set goals and objectives with a predictable degree of success. “You know why you are successful, and you can use that information to sustain growth in the long-term.”
Treadmill: While there is no reason that a business can’t stay at Predictable Success, the reality is that most will decline over time, as their systems and processes become emphasized too much. Creativity and risk-taking wane as “the organization becomes increasingly formulaic and arthritic.”
The Big Rut: If creativity and risk-taking aren’t re-injected in the business the organization enters, well, The Big Rut.
Death Rattle: Bureaucracy takes hold and the business dies.
There are two key rules for how the Predictable Success Model works:
- First, a business must progress through each stage – no stage can be skipped. That doesn’t mean that you have to spend a lot of time at each stage, but you cannot skip any.
- Second, with the exception of “Early Struggle”, a business can advance or regress one stage at a time. At “Early Struggle”, there is no regression.
I have to admit that when I first read that you can’t skip stages, I was quite disappointed. As I read the book I was intent on proving that McKeown was wrong, that if you knew enough going in you could skip the stages you didn’t want to go through. After reading Predictable Success I’ve realized just how important each stage is, and not only can you not skip a stage, the attempt to skip it is potentially fatal.
I’ve spent most of my life working with businesses that find themselves on the left side of McKeown’s Predictable Success Model. I’ve found that most small and mid-market business owners make the deadly mistake of confusing the “Fun” stage with success. Then when they hit “Whitewater” they react as if they were regressing rather than progressing. From there, a series of errors are made and the business finds itself resembling the “Early Struggle” phase and a vicious circle ensues.
Those of you who take this recommendation and get Predictable Success will know what to do about it.
Breaking Through The Noise
Anyone who has worked with me knows that I’m a maniac for messaging. In today’s world, where good is now nowhere near good enough, a solid message is no longer a valuable bonus – it’s an absolute must have to compete. The foundation of a great message is a well articulated value proposition. The challenge here is that creating a value proposition that resonates is extremely hard (it’s one of the reasons that The INTELLIGENT GROWTH Blueprint process is so valuable).
And, even after you’ve created a powerful message you have to translate that through the words and deeds of your salespeople. It’s no wonder businesses overlook these steps – wouldn’t just be easier to get in the market and sell? If you realize this challenge, I’ve got good news for you.
My friend, consultant, advisor, and author, Kevin Daum, is coming out with a new book Roar! Get Heard in the Sales and Marketing Jungle
Kevin is offering a free preview of his book (and he’s giving away his formula for creating a powerful value proposition – and please know this is must-read stuff). I realize that this sounds like hyperbole, but you’ll note I rarely say something is must-read, Kevin’s take on creating value proposition is. After reading this portion of the book, we refined our process as a result. Kevin’s given me permission to share the preview here, so take advantage and download a copy.
Two Great Books on Innovation
Innovation is critical to growth. Here are two books that I’ve just finished reading that will highlight the keys to making innovation successful.
The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation - by P&G CEO AG Lafley, and consultant/author Ram Charan, this book shows you the secret behind P&G’s turnaround and success. It’s a must read.
Inside Steve’s Brain – an interesting view into the success that is Steve Jobs and Apple. While the book is not about innovation per se, the role of innovation at Apple is so integral that you can’t help but learn some valuable secrets.
Both books dispel many of the myths and highlight the importance of knowing (and I mean really knowing) everything about your desired customer.
Outside-In Equals Success
The new book Hidden In Plain Sight: How To Find And Execute Your Company’s Next Big Growth Strategy provides some useful insights. The book take an interesting look at the ways companies successfully innovate as well as the ways they fail. I’ve just started the book, so I can’t speak to it completely – it’s off to a great start. I’d like to share a couple of points that deserve an ‘amen’:
- If a company is to truly hit the spot with innovation time and again with any consistency, it must:
- Understand the people it is trying to serve as the individuals they are – apart from any connection or interaction with the company.
- It must know how to go beyond its own perimeters of products,markets and competencies; let go of and challenge the assumptions, common practices and golden rules of doing business still held today; and go beyond what it has learned from consumers.
- See itself “from the outside in” and formulate strategies around people’s behaviors, not just seek to satisfy consumer needs and wants or customer requirements.
- This is not easy. But it need not be terribly difficult.
- As Henry Ford once acidly noted, “If I had asked customers what they wanted, they would have told me they wanted a faster horse.
While these two points focus on successfully innovating, anyone who doesn’t think they are pertinent to their business needs to understand that the failure to successfully innovate condemns one to commoditization status – and that is not good for profitability or growth.
An Outsider’s Perspective
I write this en route to Seattle for a presentation to a group of CEOs. While flying, I’ve had the chance to read a fascinating book, Success Built to Last, by the co-author of Built to Last, Jerry Porras.
Late in the book (talking about what the authors refer to as ActionStyles), they tell a story about Andy Grove, former CEO of Intel (and an author himself). It was a story I knew already, but it was a great reminder. I’d like to share it with you.
The story takes place when Intel and Grove were struggling over the decision of what to do when Intel’s core business at the time, memory chips, was deteriorating.
“What if things continued to get much worse and the board got rid of him? Grove speculated. [Gordon] Moore [co-founder of Intel] said the board would undoubtedly bring a new person in who would have the courage as an outsider to do what few CEOs who are set in their jobs would be willing to do: Dump the core business.”
If you were brand new to your business (or your job) what would you do differently? What would you stop doing? What would you start doing? Why aren’t you doing it now?
I know I’m going to lose sleep thinking about this tonight.
Whose Problem Are You Solving?
I’m in the midst of reading an excellent book, Made to Stick. The authors, Chip & Dan Heath, make a point that I try to make with my clients. They do it so well, I thought it important to share.
One of their points in making ideas stick, is that they need to be concrete. As people gain expertise they become increasingly abstract in their communication. Without meaning to, a message becomes meaningless. The Heaths point out that one way to avoid becoming abstract is to be very clear about who you are trying to communicate with. They share the example of Rick Warren, pastor of Saddleback Church and the author of such books as The Purpose Driven Life. They site Warren’s, and Saddleback Church’s description of their target ‘customer’ (they call him ‘Saddleback Sam’):
Saddleback Sam is the typical unchurched man who lives in our area. His age is late thirties or early forties. He has a college degree and may have an advanced degree…He is married to Saddleback Samantha, and they have two kids, Steve and Sally.
Surveys show that Sam likes his job, he likes where he lives, and he thinks he’s enjoying life more now than he was five years ago. He’s self-satisfied, even smug, about his station in life. He’s either a professional, a manager, or a successful entrepreneur.
…Another important characteristic of Sam is that he’s skeptical of what he calls “organized” religion. He’s likely to say, “I believe in Jesus. I just don’t like organized religion.”
Saddleback Church has more than 50,000 members and Rick Warren has several best selling books. They got there, in no small part, because of their focus on clearly and concretely communicating with people, instead of demographics. Now look at your target client description. How does it compare? If your description of your target clients does not go into such depth, it is impossible to clearly, quickly and distinctly set yourself apart from all the others seeking your clients’ attention.
What is Possible?
Too often, we are limited by our own limiting beliefs; or by what the rest of the world says is possible (or even factual). It’s a good thing for society that some of us are not.
I’m reading a very interesting book (Get Out of Your Own Way, by Robert K. Cooper, PhD). In it, he made the following observation:
Robert H. Goddard, the driving force behind America’s early space programs is today called “the father of space flight.” But when Goddard first imagined that rocket could be propelled through out space, the New York Times ridiculed his dream, saying he lacked even “the knowledge ladled out in highschools.” With no atmosphere in outer space and therefore nothing for an engine to thrust against, the Times patiently explained, a rocket couldn’t move an inch.
What ‘facts’ are holding you back?
What is a Brand?
I just picked up the book Brand Harmony. I’m only a few pages into it and it’s already given me three points that I want to share. Here they are:
- Your brand is not what you say you are … Your brand is what you customers think you are.
- Great marketing and branding is not about telling a story. It is about having our stories understood.
- Branding isn’t something companies do to their customers. Branding is something customers do to companies and their products.
If you’ve read anything about the history of where the idea of ‘brand’ comes from, you’ve probably seen the stories that it goes back to the cowboy days, when owners of cattle ‘branded’ them with their marks; enabling them to determine who owned which cattle.
The industrial age took that concept and applied it(or, more appropriately, misapplied it) to marketing and customers. All of a sudden, the focus of too many companies became building a great brand instead of delighting customers, or making a compelling promise, or just building a great company. Somehow, people forgot that a great brand is a result of doing the right things.
The great thing about today’s world is that customer’s can take the power back. This is good news for companies (like Starbucks, Apple, Harley, etc.) that focus on doing ‘insanely great things’ then letting the chips fall where they may.
Every fast growth company will do well to remember that, today, customer’s control their destiny – as it should be.
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Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
