Roy's Blog: November 2016
November 26, 2016
There are hundreds of possible metics you can use to understand how your business is performing, but these critical five will tell you all you need to know.
1. Customer perception. What percentage of your customers feel you offer “amazing” service? Is the perception on the rise or declining? Many organizations use internal measures of service: statistics generated by systems that manage the service process.
I have seen problems when you rely only on internals. They may suggest you are performing well, but the results are at odds with what the customer says.
Use internal stats as a diagnostic tool to understand customer perception data, but don’t rely on them as an accurate measure of how customers feel about your service.
2. Top line revenue. Gross revenue is the expression of how the market views the value you provide your customers.
It is an excellent bellwether of whether or not your customers love what you do for them, or not.
3. Operating margin. Some refer to it as EBITDA - earnings before interest, taxes, depreciation and amortization - which tells you how much of each dollar of revenue you have left accounting for the costs of producing it.
The higher the operating margin, the more efficient you are in production activities. When margin is low, it means your operating expenses are too high; you are relatively inefficient at revenue generation.
4. Customer share. Often referred to as “share of wallet”, this metric describes the proportion of the customer’s business that you have versus your competitors. A high percentage and you are doing a great job of penetrating the account with your solutions (but you are probably a target for your competition); a low percentage and you have room to sell and a have healthy growth potential.
Most organizations measure market share. The problem I have with the metric is that it is an expression of your piece of the TOTAL market including the customers you are not targeting. It really doesn’t tell you how effectively you are selling to those customers you have chosen to focus on.
5. Customer retention. How many customers leave you every month? Are you losing more than you are acquiring? A loyal customers base is necessary if a business is to constantly grow and have some degree of stability.
Correlating retention data with revenue provides an insight into why, for example, revenue is increasing (or decreasing). Is the driver more customers, or greater share from your targeted customer base that is relatively stable?
Some organizations have a “Performance Results” function which can get infatuated with measuring as many performance variables possible.
Don’t go there.
Keep it simple.
Keep it to the critical few.
Check out my BE DiFFERENT or be dead Book Series
- Posted 11.26.16 at 05:14 am by Roy Osing
November 21, 2016
My math studies taught me the theory of differential equations, linear algebra and micro economics, but for the most part the educational content sat on my cognitive shelf aging as my career progressed.
In retrospect, my years of academic toiling netted out to learning how to solve problems created when intentions and results don’t match.
But I needed more. My education should have prepared me to better provide the value my organization required to succeed in a complicated and intensely competitive environment.
I had to learn many practical things in the heat of the moment.
School is proficient at teaching us to conform to accepted academic dogma.
If you master book wisdom, you are rewarded with a first class mark and the expectation you will land a plum job and a rewarding career.
Well, it doesn’t guarantee anything.
Business success is not about how well you master the content of your chosen degree.
It’s not about how effectively you memorize course material.
It’s not about mastering case studies and learning how organizations were successful in the past.
I was never exposed to these 33 principles in school, yet they have stood the test of time as being critical to organization success and survival.
1. There is no right answer in business, just degrees of wrongness.
2. What works for one organization or person doesn’t necessarily work for another.
3. The perfect business strategy is a myth.
4. Fast imperfection is a competitive advantage.
5. Plan ‘A’ never works; Plan ‘B’ might.
6. Leadership is more about listening than directing.
7. Success = (doing) (lots of) (imperfect) (stuff) (fast).
8. If a person gives you goosebumps when telling a story, hire them.
9. Be good at anticipating but GREAT at responding.
10. Effective selling is the result of serving.
11. Execution, NOT the plan, determines who wins and who looses.
12. The ‘average’ customer doesn’t exist.
13. Corollary: Mass markets don’t either.
14. ‘Let’s head west’ is a valid strategy.
15. Competitive advantage comes from being the ONLY ones that you do.
16. Low price = low value.
17. If you have to talk about price, you have no value to offer.
18. Benchmarking best in class adds ZERO strategic value.
19. Corollary: The fast follower achieves ZERO faster.
20. Growing shareholder value is a meaningless objective.
21. Internal policies belong in the warehouse, NEVER exposed to customers.
22. People can’t be trained to provide caring service. You can train them to smile but that’s all.
23. Corollary: Don’t trust anyone who grins you.
24. Never ask a lawyer’s opinion on how to respond to a customer complaint.
25. Entitlement is a four letter word.
26. ‘All things remaining equal’ is Keynesian crap.
27. Linear regression is a trend line to nowhere.
28. Standout leaders encourage imperfection.
29. Without the HOW, the WHAT is a dream.
30. Great communication has a fog factor of ‘0’; KISS!
31. The more mistakes you make, the more successes you have.
32. People can’t do more than 3 things well at the same time.
33. BE DiFFERENT or be dead
It’s about time our graduates arrived on the steps of business with PRACTICAL skills; treat this as your ‘learn on the run’ list of practices to guide you.
Check out my BE DiFFERENT or be dead Book Series
- Posted 11.21.16 at 05:41 am by Roy Osing
November 14, 2016
People always ask me how they can stand out from the crowd.
Here are the ten critical steps you need to take:
1. Ask yourself the question “How can I do this differently?”. Just having the subject top of mind will lead you in the right direction. Ask yourself this question everyday!
2. Purge every aspect of copying from your being. This is tough because it’s almost second nature to benchmark best in class and apply best practices; we’ve been conditioned to believe that we are better off when we follow the best in the herd. Nonsense. All we have done is temporarily change our position in it.
3. Look at what everyone else is doing then do the opposite. Amazing results are achieved by contrarian acts.
4. Learn to focus on the critical few things you need to be successful. It’s so tempting to chase the possibilities that are out there but the problem is that you are busy but ineffective in delivering quality results. DiFFERENT people are “mindlessly” focused on a few critical things that are not on anyone else’s radar.
5. Shed the “CRAP” that gets in the way of your ability to focus on your key priorities. Holding on to “comfy food” may satisfy your appetite but it won’t enable your quest to stand-out from the herd.
6. Connect with different people. If you’re going to seek stimulation from others, lean in to people who don’t follow the rules and have “off the wall” views.
7. Be the first to take on new projects. Covet opportunities to offer standard solutions to radical problems that have not been addressed before. Your solution to a new problem will carry the DiFFERENT tag.
8. Loosen up on planning; tighten up on execution. Most people think the value is in the plan; don’t go with them. Jump in to the messy inelegant world of implementation where results get delivered. DiFFERENT people get stuff done; they don’t sit around pondering possibilities.
9. Be imperfect (a lot). While others are seeking the impossible dream of perfection DiFFERENT people are achieving results. Get as much stuff as you can “just about right” and hit the ground running.
10. Recover when you make a mistake (and you will, that’s what execution artists do). Fix your mistake (because that’s what people expect) and surprise them with something they DON’T expect. You will be remembered for your risk taking and brilliance of recovery. Your mistake will quickly be forgotten.
There is no scientific formula to get you out of the herd of commonality but these 10 steps will do the job.
They worked for me.
Check out my BE DiFFERENT or be dead Book Series
- Posted 11.14.16 at 05:13 am by Roy Osing
November 9, 2016
The gap between school teachings and what is REALLY needed for organizations to thrive and survive in the new markets that are unfolding is approaching CHASM proportions.
For the most part academics in business are following the same-old, same-old approach and NOT creating “people products” who will lead our organizations to be remarkable, compelling, indispensable and unforgettable.
They don’t teach that:
1. A business plan without flawless execution is worthless. Execution skills outrank planning in the real world.
2. Learning everything you can about someone “on the run”; is more effective than periodic research.
3. It’s critical to understand customer “secrets”; their wants and desires. What they NEED is no longer helpful to standout in the competitive crowd.
4. Value packages that address the holistic requirements of a customer (lifestyle or business) should be the focus of marketing. Individual products and services should play a lesser role as their contribution to competitive advantage is limited.
5. Customers should be served NOT “serviced”. Computers are serviced, not people. Put your organization in their control.
6. Individual customers need to be treated differently. The same treatment for all doesn’t work.
7. The “perfect” solution doesn’t exist - the business world is too complex to be formularized. Flawed solutions that excite people beats the theoretically pristine.
8. Imperfection rules - be imperfect fast. The more failures with a heathy dose of learning from them = more successes. Punish failure ONLY if you want compliance, policy-pushers and order takers.
9. The frontline is the boss - people who control the customer experience are the really important ones, not the executives. Build your hierarchy to serve them.
10. Screw-ups create loyalty - a successful WOW! service recovery from an OOPS! results in a more loyal customer than if the screw-up never happened.
11. The competition should receive less attention. Barriers to customer exit - preventing customers from leaving should be the focus. If you create loyal fans, you won’t have to worry about the hordes entering.
12. THE most strategic phrase ever is “I’m sorry”. The apology is at the heart of any mind-blowing service recovery.
13. Internal service measurement is just as important as measuring customer perception. If you can’t dazzle your colleagues, chances are that you won’t be able to dazzle your customers.
14. Losing the sale is sometimes required to keep the customer relationship. Its not about the transaction, its about the long term relationship. If you can’t deal with a short term need your client has, suck it up. YOU find the solution elsewhere.
15. Storytelling breathes life into a vision or strategy. It fuels execution and should be considered an essential requisite of leadership.
- Posted 11.9.16 at 11:19 am by Roy Osing