Be Different or be dead

January 27, 2010

Why a great business plan starts by deciding ‘HOW BIG’ you want to be

Why a great business plan starts by deciding ‘HOW BIG’ you want to be.

Traditional business planning methods have issues; they’re all screwed up.

This is one of three questions that must be answered to create your strategic game plan. It is a proven and practical process that incorporates the answers to three 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 by changing input assumptions to the plan, rather than by adjusting the strategy to deliver more aggressive financial results.

BIG mistake

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 strategic game plan process 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 24 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.

HOW BIG rules

Creating HOW BIG is a challenging task. Here are the guidelines to keep in mind as you do the work:

▪️ A growth goal should be bold enough to drive innovation and creativity. If you don’t have to stretch and create new tactics and programs to achieve your revenues target, it’s not good enough.

▪️ If HOW BIG is “realistic” — which means you already know how to achieve it — its not appropriate. Pick another number.

▪️ Your chosen growth goal should make you perspire; yes, it’s risky but worth it.

▪️ HOW BIG is a declaration of intent without a specific idea on how to get there. It forces you out of your comfort zone.

▪️ A growth goal should disrupt past performance not trend line it. Trend lines imply predictability, and who thinks performance and goal achievement can be predicted in a world of uncertainty and uncertainty?

▪️ HOW BIG detests extrapolation. Another way of saying trend line analytics are dangerous.

▪️ Choose a 24-month plan period. It better aligns with execution and allows for faster response to unforeseen events. The problem with long planning periods is the mistaken assumption that you can put off action to the later planning years and not have to worry about doing something NOW. You need to be forced to ACT, and act in the moment not 4 years from now.

▪️ HOW BIG has no time for 5-year plans. The 5th year never shows up even though people can be sucked in to rationalizing underperforming behaviour today by saying it will be picked up — the hockey stick theory — in the latter years of the plan.

HOW BIG is the lynchpin of a process to replace traditional strategic planning.

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

• Posted 1.27.10 at 01:52 pm by Roy Osing
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January 22, 2010

How to empower employees and serve customers in an amazing way

Source: Pexels

How to empower employees and serve customers in an amazing way.

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 unfortunately fear the notion of empowering people.

A 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.

Empowerment is the provision of specific degrees of freedom to employees consistent with the strategy of the organization.

What it is and what it’s 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 selected 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 business 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.

Honour your empowerment champions.

Tell stories of what they did to paint a picture of what success looks like.

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

• Posted 1.22.10 at 03:48 pm by Roy Osing
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January 16, 2010

8 proven ways to have really good sales listeners

Source: Pexels

8 proven ways to have really good sales listeners.

Some sales people use a potential customer as an audience to try and impress with their product knowledge and what they believe to be their scintillating interpersonal skills.

They talk, and talk, and talk about their product pausing every now and then to appreciate the wisdom of what they have just uttered.

This 1-way deluge of information on an individual is painful reminder that sales people have healthy egos and they love to be in the transmit mode a great deal of time.

The sales process should be a relationship-building event which is impossible to conduct in the face of a sales monologue.

Salespeople need to be terrific listeners; asking the right questions to expose the needs and more importantly the secrets of their prospective buyer.

It really doesn’t matter what the sales agenda is; the objective is to ask questions, listen and learn in order to come up with the best solution possible.

Here’s how to create a sales listening team:

1. Recruit people with a background of listening achievement. You can always train them on product knowledge; look for those who listen innately.

2. Train them with listening skills. You can’t hold them accountable for listening if you don’t teach them how you want it done.

3. Build listening into their performance management plan. If listening is not part of how you want the job done, it won’t happen.

4. Pay for listening in their compensation plan. Make listening a healthy part of their bonus pay. Start at 40% and increase it every year.

5. Measure listening performance and engage the customer in the process.
Create a ’Listening Report Card’ with 6 key behaviors you want sales to consistently demonstrate with customers. Have the customer complete the Report Card to rate their salesperson’s performance.

6. Measure sales listening performance monthly. Review results with each salesperson. Develop an action plan to address shortfalls.

7. Honour the brilliant listeners. Shout out those who do it well and who receive accolades from their customers. This tells the organization that listening matters and gives others a picture of how it is done.

8. Establish an annual sales listening award to honour those who listening consistently.

Sales Listening 101.

Have a go at it and reap the rewards.

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

• Posted 1.16.10 at 12:07 pm by Roy Osing
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January 10, 2010

Why cutting prices should never take priority over adding value

Source: Pexels

Why cutting prices should never take priority over adding value.

So, here’s the situation: your price is $26.25 and our competitor’s price for the same product is $23.00. What options do you have to compete?

1. Reduce your price

Your first choice is to reduce your price; this is the most common reaction.

The problem is that unless you can reduce your costs of supplying the product all you do is reduce your margins. And, you have to prepare for another potential round of price reductions if your competitor decides to further reduce their prices.

I am not a fan of competing on price.

It can be easily copied by your competition and it generally eats into your profits.

2. Add more value to your product

Your second choice is to add more benefits or value to your product or service in order to more than fill the $3.25 price gap.

This is the practice that will not only set you apart from your competitors but will also give you the opportunity to enhance your margins. In addition, it makes it more difficult for your competition to copy your move.

Value differences are tough to copy; price is easy.

Here’s a personal example of how this works. Lets say you are an author and your on-line book price is $3.25 higher than your competition. Matching the competition is really not an option as your cost structure is too high.

You don’t have scale and scope advantages like the big on-line book sellers. To compete, the only choice you have is to add value to your on-line offering that they can’t match.

So you might decide to add two value components to differentiate your offer:
- sign every copy of the book sold;
- offer a 30 minute conversation with anyone who buys your book on any topic that interests the purchaser.

Hard to copy. Adding real value.

Force yourself to look at adding value whenever you are confronted with a price difference. Resist the temptation to take the easy way out and drop your drawers on price. It generally doesn’t work and gives the illusion of an effective response.

Ask “What real value can I add to fill the price gap?”

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

• Posted 1.10.10 at 12:02 pm by Roy Osing
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