Roy's Blog: November 2016

November 26, 2016

The only 5 analytics you need to run your business

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.

Perception

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.

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

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  • Posted 11.26.16 at 05:14 am by Roy Osing
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November 21, 2016

33 leadership principles I didn’t learn at school


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.

Math

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.

Zero

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.

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

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  • Posted 11.21.16 at 05:41 am by Roy Osing
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November 14, 2016

Create your personal brand in 10 ways

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.

Unique brand

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.

I know.

They worked for me.

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

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  • Posted 11.14.16 at 05:13 am by Roy Osing
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November 5, 2016

4 tips to avoid dysfunctional teamwork

Unfortunately team dysfunction is a plague that affects many - in fact I would say most - organizations.

And much has been written on how to build effective teams. But it’s much more than simply getting people to work well together.

Dysfunction

After three decades of leadership, here’s my take on how to build remarkably productive teams.

1. Appoint a team leader who is emotionally invested in the challenge the team is addressing. There may be a temptation to assign the role to an individual who is deemed internally (by HR in particular) to possess “expert” leadership skills, but don’t do it!
Results are produced when a crazy amount of emotional energy expended on solving the problem at hand not when sophisticated leadership skills are present.
Find someone to lead the team who is first and foremost THE internal champion of “the cause”, and second, who has demonstrated experience in leading teams successfully in their past.

2. Provide the strategic framework for the team to work within. The team needs to know what is “within limits” and what is not. This is NOT an issue of containing creativity, rather it is a guidance mechanism to point creativity in the strategic direction of the organization. Unclear and vague strategic focus for the team’s work generally results in unusable output; an interesting answer to the wrong problem.
Test the team’s understanding of their terms of reference. Keep the conversation going until they have demonstrated an intimate understanding of what they are being asked to do and how their expected results relate to the strategic game plan of the organization.

3. Have the team present an update on their progress to the team executive sponsor at least monthly. This will ensure the team stays on track and gives an opportunity to recognize team members on the points of their progress.

4. Build the team objectives into performance plan of each team member. Regardless of whether the team is full time or part time, shared accountability for results must be assigned.
If members are not personally liable, the pressure is off and you can expected casual rather than focused attention on the team’s activity and results.

Develop functional teams by concentrating your efforts on making them effective - achieving strategic goals - rather than efficient - achieving internal harmony and busyness.

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

Recent articles you might like
10 ways to make customers feel important and appreciated
5 ways to live with a decision that screws you over
Leadership takeaways from my 3-decade career

  • Posted 11.5.16 at 09:56 am by Roy Osing
  • Permalink