Archive for May, 2013

The Elusive ‘Silver Bullet’

Tuesday, May 28th, 2013

Take a good, hard look at the attached picture.'Silver bullet' quick-fixes to complex business problems don't exist.


Because it’s probably the only time in your life you’re actually going to see a silver bullet.

Why should you care, why is it important?

Because a ‘silver bullet’ is a term used to describe a solution to a complex business problem; which can be implemented quickly, with very little cost or effort; and which will deliver the desired results, immediately, at the first attempt.

How often have you seen one of those? Have you ever actually seen one?

I haven’t. In fact I believe silver bullets simply don’t exist.

Yet some of the business owners we meet expect us to be able to produce them. And some consultants are foolish enough to let their clients believe that they can produce them. Needless to say, we’re not amongst them.

The need for a silver bullet often arises when a management team has been unable or unwilling to solve a fundamental problem with the way in which their company has always made money.

The management team hasn’t suddenly become incompetent – but they have become ineffective.

They have actively addressed the situation but have typically only tackled the symptoms. For example:

• Sales drop so they implement sales force improvement and lead generation programs – without understanding that the products or services they’ve been selling successfully for the last 30 years are being replaced by a new technology.
• They acquire a new technology and sell and support it using the same people and processes they used with the old one – because the people have been loyal and the processes have always worked.

As a result, the first ‘solution’ they try doesn’t work so they try another, then another – wasting money and, more importantly, time. Nothing works and the slide continues.

By the time the fundamental problem is recognized, the level of frustration being experienced by the owner and management team may, by itself, be driving the desire for a ‘quick fix’.

Or sales may be down to a point at which layoffs and cutbacks have started because cash is tight.

Either way, the pressure is on.

So, while the owner and management team may understand the far-reaching, intensive changes that are required, they can’t or won’t accept that those types of changes can’t be made quickly or easily. They expect, for example:

• Employees who have been doing the same thing, in the same way for many years to adapt to a completely new process with minimal training.
• To be able to acquire lists of qualified leads or prospects for new products and new markets.

Those are ‘silver bullets’ which go far beyond being elusive because they simply don’t exist.


If you enjoyed this post you’ll also enjoy Adaptive Strategy – A Way To Profits In The New Normal?

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10 Commandments of Business Development

Tuesday, May 21st, 2013

10 Commandments of Business Development

I’m not enjoying the after-effects of the 2007/2008 financial crisis.

And I’m certainly not a fan of the banks, investment and other, which I believe were a significant contributor to the mess.

But, while my wife may disagree, I like to think I keep an open mind.

So when I saw an article talking about how Goldman Sachs grew from mid-tier firm to global player in a few decades I had to peek.

John Whitehead, a co-head of the firm in 1970, wrote the following 10 commandments that guided their business development efforts:

1.   Don’t waste your time going after business you don’t really want.
2.   The boss usually decides — not the assistant treasurer. Do you know the boss?
3.   It is just as easy to get a first-rate piece of business as a second-rate one.
4.   You never learn anything when you’re talking.
5.   The client’s objective is more important than yours.
6.   The respect of one person is worth more than an acquaintance with 100 people.
7.   When there’s business to be found, go out and get it!
8.   Important people like to deal with other important people. Are you one?
9.   There’s nothing worse than an unhappy client.
10.  If you get the business, it’s up to you to see that it’s well-handled.

I love them. They’re full of common sense and they’re very practical. Written in 1970, these 10 commandments add to my belief that the basic, common sense principles of business never change.

Here are 4 things that business owners today can take from them.

First of all, being clear about what business they want and avoiding the temptation to grab every deal that comes along in order to increase revenue. Only take deals that provide good margins, with companies who pay on time.

Hold out for the first-rate piece of business. That’s the one that allows a company to do what it’s good at. Second-rate deals require the company to reinvent its core competency at short notice, for difficult customers who are price shopping and who never buy from the same vendor twice.

Companies, and sales people, that really understand that it’s the client’s objective that’s important, don’t have unhappy clients. Hard driving entrepreneurs sometimes forget that in their rush to achieve their objectives. As a service provider, I try never to take on an assignment unless I understand the deliverable. For example, I’ll say to a client: “Imagine we’ve just finished your offsite and you’re telling me how pleased you are that we achieved your goals. What has happened, what do you have, that’s making you say that?”

Finally, the last of Whitehead’s principles emphasizes the importance of focusing the company culture on customer satisfaction.

Mark Graham, who wrote, the article says that he’s built his business by putting integrity first, even if it seems at times he has to sacrifice short-term profits. He’s right – and that could be the 11th commandment.


If you enjoyed this post you’ll also enjoy 5 Tips for Fast Growth in a Slow Economy

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Development and Execution – The 2 Halves of Strategy

Tuesday, May 14th, 2013

Assumptions are extremely frustrating things.Mistakenly assuming everyone understands the definitions of strategy development and strategy execution results in extreme frustration.

We deal with them on a regular basis. We frequently advise business owners how to avoid the dangers related to making assumptions.

And yet I still fall into the trap of making bad ones myself. Let me give you an example.

Sara and I had a working lunch one day last week. We were discussing an aspect of ProfitPATH’s business plan for our next fiscal year (yes, we do take our own advice) which begins on July 1, 2013.

I was talking about our strategy development and strategy execution workshops when something Sara said stopped me short. I had assumed we had been operating on the same understanding about the workshops but, clearly, we hadn’t.

Why is this important?

Because now I wonder if I’ve been making the similar assumptions with other people.

Strategy development is all about developing an effective way for a business owner to achieve his or her longer-term (let’s say 5 years) goals.

There are a number of well-established ways to develop a strategy. The academics, and large consulting companies like Monitor and McKinsey, call them “models”.

They usually involve things like a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats), identifying strategic alternatives and selecting one. They may include identifying the company’s Values, and they should include developing Vision (a picture of the company in 5 years’ time) and Mission (how to get there) statements.

Strategy development models or workshops should also include what I call a 2-way communication plan. They get input from employees, customers, suppliers and industry associations. The output is rolled out to everyone in the company so that they can understand the part they have to play in it.

Strategy execution is about turning the strategy into results or reality. With the exception of the Balanced Scorecard, which has its merits but which I don’t think is ideal, there are no well-established ways or models for executing strategy.

My view is that the annual planning cycle is at the core of strategy execution. It translates the strategy into a series of prioritized action plans which are specific, measurable and time-related. Each action plan has a Champion who is accountable for its successful completion. These action plans are the output from the annual kick-off meeting and form the agenda for quarterly review meetings.

The action plans underpin, even form the basis for, the annual sales, expense and profit forecasts. They identify manpower requirements, and investments in other resources such as plant and equipment, offices and facilities and IT infrastructure. And they can be linked to bonuses and other rewards.

We’ve built our development and execution workshops around those ‘definitions’. Thought I’d just make sure there were no assumptions out there to the contrary.


If you enjoyed this post you’ll also enjoy I’m Not Alone………

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Fix The Obvious Problem; Avoid The Real One And Prevent Successful Business Growth

Tuesday, May 7th, 2013

A few weeks ago I wrote about the single biggest thing that separates companies which grow successfully from those which don’t.Avoiding the real problem will prevent successful business growth

That has generated a whole bunch of questions. Here are a couple of them.

What’s the definition of “successful” growth?

For the record, my definition of successful growth has changed over the last couple of years.

I used to say that a company had to produce growth rates which were consistently above the industry average, year after year. Now I define successful growth as simply producing a consistent rate of growth year after year.

What are the other things that prevent companies from growing?

I mentioned a few in the blog post. For example, insufficient funding; quality problems; having 70 – 80% of sales come from 1 or 2 customers; a presence in only one market.

I could have added others. For example, not responding to changes in the market or industry; losing sight of long-term goals by relaxing the discipline of planning; thinking that what got the business to where it is, will get it to the next level.

But, as with many problems, there is often more than one reason a company stops growing. So restarting growth requires not only identifying all of them correctly but also figuring out the sequence in which to deal with them.

For example, when sales growth slows, the first place owners tend to look is at their sales team. This happens in companies of all sizes.

The bigger a company becomes, the greater the need for it to keep generating cash. Add the finger pointing that can occur between departments (and their heads) and the more likely they are to reach for the “obvious” solution.

Even apparently sophisticated companies will look for quick solutions, neglecting to get input from their customers, suppliers or industry associations.

The result can be turnover – as experienced but “underperforming” sales reps or managers are replaced – and investments in marketing/promotional “strategies” which don’t address the fundamental problem.

A year later, when results haven’t improved, the prevailing wisdom is often that the recruiters, sales trainers and marketing consultants were all wrong. And another layer of complexity has been added to the problem, because the owner and her/his management team won’t trust any external advisors.

In the meantime, the real problem has got worse.

So, knowing the things that prevent companies from growing is one thing. Applying that knowledge to each unique situation often requires blunt talk and tough love.

And that’s sometimes the only way to get a business owner to:

  • Accept that the “obvious” problem may not be the right one.
  • Find the root cause(s) of the real problem and confront them, accepting that may be uncomfortable and painful in the short term.


If you enjoyed this post you’ll also enjoy 3 Times When You May Need To Change Your Strategy.

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