Roy's Blog: January 2010
January 29, 2010
The second step in the BE DiFFERENT strategy creation process is to decide on the customers you intend to serve. Can they generate the growth you are expecting? You may have the competencies they require but if they don’t have the latent potential to meet your HOW BIG objectives, should you be chasing them? You can, and it may feel good, but unfortunately you might fall short of your financial goals..
HOW BIG should determine WHO to SERVE.
There’s no such thing as a bad customer; its just that some are better than others. Examine the customer groups that you currently do business with. Given the current economic realities, can they deliver to your new financial expectations? Are their market characteristics appropriate to give you the growth you want? Apart from demand factors, what about the competitive environment - is it intense or are there opportunities to enhance your market position?
Carefully evaluate your options and choose the customer segments that can deliver you BOTH the growth you need as well as leverage the competencies of your organization.
Here are some factors to consider in evaluating which customers to dedicate your efforts to:
- customer groups in which your customer share position is low. If you currently have a small peercentae of their total business you have a good growt potential.
- look at markets that are currently growing in the double digits and where you have an advantage over others.
- geographicly defined segments which have easy access at relatively low cost
- high lifetime value customer clusters where investments will provide healthy returns over the long term.
What do you do with customer groups you currently serve but can’t serve your growth and financial needs? Be prepared to walk away from them. You have to let them go in favor of focusing on the few choice segments that will provide the return on investment that you need.
HOW BIG do you want to be?
January 27, 2010
This is the first of a four-part series intended to explain how to create a BE DiFFERENT strategy. It is a proven and practical process that incorporates the answers t four critical questions. It begins with the HOW BIG do you want to be question.
Traditional strategy-building methodology typically begins with an analysis of strengths, weaknesses, opportunities and threats. It then moves on to developing an overall strategic direction. Objectives and action plans are struck. Finally the expected financial results are produced. They are the output of the strategy-creation process.
In my experience, the financial results get scrutinized by the top executive and often get modified as the CFO and CEO decide they simply aren’t aggressive enough. Sound familiar? As a result, higher growth and financial numbers are driven out of the tabled strategy rather than adjusting the strategy to deliver more aggressive financial results.
This is a huge mistake. Assuming that the assumptions behind the plan are reasonable and acceptable, forcing more aggressive numbers from a strategy without increasing strategic risk is a fool’s game. The expected higher performance numbers will not happen.
The BE DiFFERENT Practice is to treat growth and financial expectations as inputs to the strategy-building process. Do you want to grow top line revenues 25% over the next 36 months? Or would you be satisfied with growing at 10%? Clearly the former target would require more resources and would entail greater risk than the more modest scenario.
In addition, the character of the strategies would be different. The 25% growth strategy would require a different set of actions than the 10% incremental option. For example bolder growth expectations might require new markets and strategic partnerships that might not be necessary under a modest growth plan. The bolder the plan the more you have to move away from organic growth.
So declare right up front the growth and financials you intend to achieve and THEN develop the strategy to deliver them. And if you have been growing at 10% don’t expect doing more of what you have been doing will be good enough to deliver on a 25% plan. It won’t happen. You will have to be more creative, more aggressive and be more accepting of more risk. If not, suck it up and be prepared to stay with your 10% strategy.
My next blog in the series will deal with choosing the customers you want to devote your efforts to. Join me…
January 25, 2010
I read a blog recently on the Business Insider War Room titled ‘The 5 Things That Startups Can Learn From Lady Gaga’ by Charlie O’Donnell that I found extremely interesting as it resonated with the BE DiFFERENT Principles and Practices that I advocate in my book.
The learning’s from Lady Gaga are definitely worth repeating and I would suggest are not limited to start-ups. Her success factors apply to all organizations looking to be successful in the fast pace and highly changing world we live in.
1. Be Remarkable - Her costumes are “...so outlandish that you can’t help but notice.” Organizations need to learn how to be remarkable in terms of satisfying the needs, wants and desires of their target customers in a way their competitors can’t. Their value proposition needs to be compelling and unique so they will be remembered.
2. Repeat the message as often as possible - “Many of Gaga’s lyrics and sounds are repeated one right after another—simple, but memorable when listened to over and over again.” There is too much message clutter out there. People are often left to their own devices to sort out who can best serve their needs. Make it easy for them. Create your Strategic Game Plan and communicate it far and wide so the market (and your employees) will know what you are all about. Compose your only claim and use it frequently as your elevator speech.
3. Be Relentless - “...just when one Lady Gaga song starts losing steam—BOOM—here comes another tune that you just can’t get out of your head, seemingly once every couple of months.” Continuous renewal in business is critical. If the inside of your organization doesn’t keep pace with the market dynamics impacting it, death is near!. A constant flow of Holistic value-based must be presented to the market to maintain competitive differentiation and customer satisfaction.
4. Create something bigger than the individual - “Lady Gaga did this by creating a persona separate from her real self. ... Gaga has become larger than life.” Are you in the product-flogging business or the Value creation business? A focus on VALUE will lead you to a higher level of customer delight where your organization exists to create experiences that are life-based.
5. Repeat success - “Lady Gaga has clearly been influenced by Madonna, Michael Jackson, David Bowie, and others—and she seamlessly and subtly incorporates little homages to these superstars into her performance.” But the important take-away here is that she did more than merely copy these other performers. She vaulted beyond them to create a BE DiFFERENT persona. The same lesson here for business. It’s ok to be influenced by and emulate other ‘best in class’ organizations, but go beyond them to claim your unique position that will separate you from the pack. Copying is the enemy of BE DiFFERENT.
The only Statement
Think Value Additive
Marketing is in the VALUE CREATION Business
Customerize your Marketing
Create Holistic Value-Based Offers
Beware of Benchmarking
10 Practices to Renew your Business
January 22, 2010
First of all let me be clear: when I speak of Empowerment I am referring to it as it applies to customers, and how to use it to serve a strategic purpose.
Many organizations fear the ‘E’ word.
The common myth is that if you allow people to do what they believe is necessary they will ‘give away the farm’; they will break the rules; they will disrupt the rhythm of the organization and create needless stress and strain.
Nonsense. These beliefs come from a misunderstanding of what empowerment really is. The BE DiFFERENT definition…
Empowerment is the provision of specific degrees of freedom to employees consistent with Strategic Game Plan of the organization.
What it is; what it is not:
- it is bending the rules of the organization in specific circumstances for specific customers; it is not allowing rule bending for all circumstances and for any customer. Rule bending is a critical component of the Service Strategy of an organization and results in dazzled customers with deep loyalty to the firm. It must be allowed but only under controlled circumstances;
- it is a planned course of action with its own set of rules in terms of the process an employee is to follow and the options available to them; it is not doing whatever an employee thinks is right at the time;
- it is being a few things to seleced customers; it is not being anything to all customers;
- the actions allowed are defined directly from the strategy of the organization; they are not invented on the run;
- the effectiveness of empowerment is measured against the desired outcomes; it is not ‘winging it’ and let the chips fall where they may;
- it is a proactive set of activities; it is not an unplanned reactive event;
- empowerment is contained within a ‘box’ with rigidly defined parameters and behaviors expected of an employee; it is not unfettered activity with no boundaries.
Critically examine your Strategic Game Plan and define the critical operations areas where empowering employees would be helpful to achieving the results expected.
Create an Empowerment Plan: which customers are to be included; what operations activities are ‘empowerable’ (like service recovery, service sign-up etc.); what measurable outcomes are expected and what behaviors must an employee exhibit - i.e. what is the empowerment process to be followed.
Honor your Empowerment champions. Tell stories of what they did to pain a picture of what success looks like.