February 16, 2009

BE DiFFERENT Businesses Whistler, BC

While I was researching my book, I came across some amazing companies that exhibit BE DiFFERENT practices that separated them from their competitors.

The Spaghetti Factory has a ‘Service Recovery’ culture that seems to come naturally. I provide a personal story in my book that illustrates that this organization clearly understands what has to be done when there is a service breakdown. They didn’t merely fix the problem that they had created for my family they went well beyond to ‘fall over backward’ and dazzled us. I have told this story again and again. Go visit them the next time you are in Whistler. Hats of to Marlys Clemiss and her team!

The Fairmont Chateau is a much larger organization but has an instinct for cultivating and nurturing deep relationships with their customers. This is always difficult for any large service team. I truly believe that the Fairmont does have the ‘Spirit to Serve’ value for its employees, but I also believe that the people in the organization get it instinctively. It is an innate thing they have to care of you. Visit the Mallard Lounge and Terrace some time and enjoy the efficient and caring service provided by Sarah Wark and her team of service professionals. You won’t want to leave!

Stay tuned for more examples of BE DiFFERENT organizations that I feature in my book. Cheers, Roy Osing

Posted 2.16.09 at 01:46 pm by Roy Osing | Permalink | Comments (0)

February 11, 2009

BE DiFFERENT ideas for General Motors - Part 2

Here are more suggestions for GM strategists and planners:

Get off the product flogging kick. Your success will not depend on the products and technologies you push on your customers; rather on the extent to which you are able to address an unmet need or desire better than anyone else. Or at least if you talk about your ‘going green’, hybrid, electric car or fuel efficiency programs be explicit and tell how they will translate into unique customer benefits that only you will provide.

Cut the CRAP. You really need to get serious about dumping the things that do not align with your Survival Plan. This includes product lines and markets. Maybe you can’t be successful in North America! No one will thank you by staying in markets where you can’t make money. Your investors expect you to make tough decisions. Do you really need 15 hybrids by 2012 or is this product mania with no market reality?

Reassign or release employees currently associated with non-strategic activities as dictated by your Survival Plan. Beware of Managers of irrelevance in your organization who will only infect the rest of your workforce with change inertia if you leave them unattended.

If you want to sell anything, sell trusted relationships with your customers rather than flogging your technology aspirations and products on them. You are dying and need to re-establish trust with the market. This will only come if you get customer obsessed and deal more with what you are doing for them to be a healthy vibrant competitor.

Focus on execution. Don’t spend copious time trying to inch perfection out of your Survival Plan. The law of diminishing returns is at play here and it is more important to get on with it and not dwell on a 100% perfect plan (which doesn’t exist anyways). Your struggle back from potential demise rests in how well you execute a ‘good plan’; flawless execution in the trenches will win out in the long run.

Look at costs after you have devised how you intend to address the market not before. Consider the BE DiFFERENT profit equation as a guide. Here it is: Cost = Revenue - Profit. Determine how much revenue your Survival Plan will yield then subtract your profit expectations to get how much you can afford to spend operating the business.

Time to move on from GM. I hope they listen. Cheers, Roy Osing

Posted 2.11.09 at 06:30 am by Roy Osing | Permalink | Comments (0)

February 8, 2009

BE DiFFERENT Cost Cutting

Five Steps to BE DiFFERENT Cost Reduction
1. Renew your business strategy
2. Determine your new cost envelope
3. Modify business processes
4. Simplify your structure
5. Cut the Crap

The Golden Rule: if costs don’t serve customers directly, take them out!

1. Renew your Business Strategy - Cost cutting in any organization should be preceded by a review of your overall strategy. Clearly if you are suffering along with the economic downturn, you need to take a step back and renew the path you are currently on. General cost reduction absent of a strategic review will not enhance your survival potential. Applying less expense to your existing strategy will only reduce service levels to existing customers and will not likely stem the tide of falling sales.

Take the time to do a BE DiFFERENT review of your Strategic Game Plan. The 3 questions to ask yourself are: HOW BIG do you want to be over the next 18-24 months given the realities of the economy? You should not expect to have the same growth prospects. Next question: WHO to SERVE? You need to consider new customer groups to go after that have the chance of returning your sales expectations. AND you need to be prepared to dump customers that are no longer part of your plan. Final Question: HOW will you WIN against more intense competition for the scarce consumer dollar? Build your new plan around these questions and ACT.

2. Determine your new Cost Envelope - To effectively reduce operating expenses, you need an objective; what should your expense base be? To answer this question, consider the BE DiFFERENT profit equation: Cost = Revenue - Profit. Yes, it is the right way around, and NO, it isn’t simply arithmetic manipulation. The strategic implications of looking at your business in trying times are immense. It works like this: First determine your revenue from the answer to the HOW BIG question; second, decide on how much profit you want (come on, you need to reduce your expectations); third, calculate the level of cost that implied by the difference.

3. Modify Business Processes - With your renewed strategy and cost envelope in mind, look for opportunities to simplify your business processes. New strategies imply that you will be doing business differently; typically expenses can be taken out of the organization without negatively impacting the quality of service provided to your customers. Besides creating the right processes to run your business under a renewed vision, this approach exposes opportunity for cost cutting like duplicated functions and non-value added activities.I have always scratched my head when a business cuts operating expenses without changing how they operate. a recipe for disaster. It implies that you can get order-of-magnitude productivity improvements from existing operating procedures - and achieve the new strategy at the same time. The impossible dream. The only thing that you can be guaranteed of with this mistaken approach is that your customers will be collateral damage!

4. Simplify your structure - The flow goes like this (my ex-boss, mentor and friend Brian Canfiled loved this): Strategy - Process - Structure. Create your strategy; deliver it through simple business processes and then look for the appropriate structure to organize and apply scarce human resources. A rich source of expense reduction after process change benefits have been extracted is your structure. Simplify it. Remove levels to get the senior ranks closer to the customer. Remove ‘tion’ positon: co-ordination, liasion and so on; keep the output positions.

5. Cut the Crap - You have a renewed strategy, and now you must shed all the things you are doing that are no longer relevant to your new direction. Consider Crap candidates such as customers, products, mass advertising (go targeted), long terms projects that can be postponed (the long terms won’t happen if you can’t survive the short term). Assign a Cut the CRAP champion to eliminate costs and give them a non-negotiable mandate to take a knife to irrelevant stuff. Create a ‘Cut’ list and a ‘Keep’ list; maximise the size of the former; minimize the size of the latter.

The Golden Rule: if costs don’t serve customers directly, take them out!- Tough economic times require tough decisions and clear, simple rules to govern what people do to reduce cost. This is mine. Oh I know that some people will say this is an over-simplistic way to look at the cost cutting challenge and I agree. But if you want people to get this task done right and fast it has to clear and simple. In addition the Golden Rule clearly puts the customer in the driver’s seat. I would seriously question ANYTHING that can’t be linked to a (renewed strategy) customer deliverable. Why are you doing something that doesn’t directly adds value to a customer? Beats me.

Cheers, Roy Osing

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Related Blogs
HOW BIG do you want to be?
WHO do you want to SERVE
HOW will you compete and WIN?
The Strategic Game Plan
Cut the Crap

Posted 2.8.09 at 02:55 pm by Roy Osing | Permalink | Comments (0)

February 8, 2009

Hyundai - A BE DiFFERENT Approach

I was very interested to read recently about the Hyundai Assurance Program developed to specifically respond to, among other things, these tough recessionary times.

Their plan is quite straightforward. It’s promotion material states ‘Hyundai is the first automaker in the U.S to offer a vehicle return program that allows you to walk away from your loan or lease without having to worry about negative equity. It lets you return your vehicle in case of certain life-altering circumstances. That’s the Hyundai Assurance’.

Brilliant. It recognizes that people run into unforeseen events (losing a job, physical disability, international employment transfer self-employed personal bankruptcy and accidental death) and offers a solution to make it easier to purchase a Hyundai.

No question that this is a BE DiFFERENT move! How long do you think it will take for the others to copy it? First of all they aren’t that quick and second they should try to outdo the Hyundai move rather than duplicate it. In this case a copy strategy will not close the BE DiFFERENT gap between Hyundai and its competition, it would merely bring them up to Hyundai’s level and allow Hyndai to move ahead again.Being good at copying is NOT a winning strategy.

Well done Hyundai and we’ll wait to see what other automakers respond with (don’t hold your breath). Cheers

Posted 2.8.09 at 01:02 pm by Roy Osing | Permalink | Comments (0)