Archive for June, 2014

Risks 3 and 4 to Growth – And How To Avoid Them

Tuesday, June 24th, 2014

During the last 12 years we’ve worked with well over 100 companies ranging in size from less than $1 million to over $300 million in annual revenues. They were

  • In a variety of industries, from manufacturing to software development.
  • All at different stages in their lives, for example in some, growth had stalled, while others were growing quickly – too quickly.Risks 3 and 4 to business growth and how to avoid them

In a recent post, I talked about the 4 things we’ve done for the ones that we know, with the gift of hindsight, achieved the results they wanted.

Was their success solely attributable to what we did for them?

I can’t prove that. But I can say this, ignore these 4 things and you will not get the results you want and your company will not achieve its potential.

Last week, I talked about 2 of them – having a clear growth path and linking it to action – in some detail. Here are the other two.

3.  Get Buy In

How often have we seen a team of committed people do the apparently impossible?

When people participate in the development of the growth path and understand the role they must play in making it a reality, they become fully engaged in achieving the company’s goals.

Some of the things which make that happen are:

  • The owner and management team get representatives from across the company involved in building a picture of what the company will look like in 3 years time.
  • The picture, and annual goals, is communicated throughout the company – repeatedly.
  • Departmental and individual goals are linked to the company goals.
  • Progress toward goals and targets is communicated and updated continuously.

4.  Accountability For Results

Moving a company or division along a growth path involves identifying and completing a number of initiatives, made up of specific, measurable steps or actions.

The individual who has overall responsibility for each initiative and those involved in completing the steps, must be held accountable for the success or failure of their efforts.

This is achieved by:

  • Using a process – it can be a simple Excel spreadsheet or a sophisticated, cloud-based execution management system – to track the progress of each step.
  • Holding regular, quarterly meetings to review progress and adjust plans and budgets where necessary.
  • Reflecting every individual’s performance in their compensation, promotion – or even their continued employment with the company.

So how can you tell how well your company or division is doing all 4 things? I’ll tell you more about that next time.

 

If you enjoyed this post you’ll also enjoy Sustainable Growth – How To Achieve It

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

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2 Risks To Business Growth – And How To Avoid Them

Tuesday, June 17th, 2014

We’ve worked with well over 100 companies since we started ProfitPATH.2 of the 4 risks that affect business growth and how to avoid them

A couple of posts ago, I commented that we did some, or all, of the same 4 things for the companies that achieved the results they wanted.

Was their success solely attributable to what we did for them? I can’t prove that with certainty.

But I can say this,

  • Ignore these 4 things and you will not get the results you want and your company will not achieve its potential. (That’s why we call them the 4 Risks.)
  • On the other hand, if a company deals with all 4 regularly, it will improve its results.

Here are the first 2 and some tips on how to deal with them.

1.  Have A Clear Growth Path

Having a clear growth path means having a picture of what you want your company to look like in 3 years’ time.

The best pictures are rich in detail and sharp in focus. In this case:

  • Detail comes from the depth of analysis that goes into building the picture.
  • Focus is a result of the choices that are made about the initiatives required to get there.

Using other language, this is your Vision, your Mission and your Strategy.

Bear in mind that we update photos of things we love – children, pets – as they grow and change. The same applies to a company.

2.  Link It To Action

The 3-year picture is what you desire. Turning it into reality takes action which yields results.

The key is to break what has to be achieved in 3 years into 3 sets of annual goals. Figuring out what has to be done in 12-month bites provides the flexibility to adapt as you learn more than you knew when you started out.

However, this requires a process and the discipline to use it every fiscal year.

  • Where must we be in 12 months? Where are we now? What’s the gap? How do we close it?
  • Prioritizing the list of “to do’s”; allocating resources to the high leverage items; and putting action plans in place to complete them.

This process drives the annual financial budgets – not the other way around.

I’ll touch on the other 2 Risks next time. For now, ask yourself this: “Where do you want your business to be in 3 years’ time?”  And, “What do you think you have to do to get there?”

 

If you enjoyed this post you’ll also enjoy A Vision – Is It Worth Investing The Time?

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

Recommended Reading – Summer 2014

Tuesday, June 10th, 2014

After what seemed like a very long winter, it’s finally happened! Temps are rising, days are longer, Nature is dressed in her finest greenery, and we’re all eager to pack up and speed off to our favourite summer retreat. Don’t forget to pack a couple of good books for your reading pleasure! Here are some of the personal favourites we’ve selected from various “best books in 2014” lists published recently on 800ceo read’s blog:

Most businesses of today are more focused on the newest gimmicks and tricks of the trade that they believe can save the day. This book focuses on the view that success is a result of quality, consistency of performance and relentless improvement on those things that matter most and not about the ‘wow’ factor provided by flashy tricks.

High performance has always required shrewd strategy and superb execution. These factors remain critical, especially given today’s unprecedented business climate. But Rich Karlgaard—Forbes publisher, entrepreneur, investor, and board director—takes a surprising turn and argues that there is now a third element that’s required for competitive advantage. It fosters innovation, it accelerates strategy and execution, and it cannot be copied or bought. It is found in a perhaps surprising place—your company’s values. Karlgaard examined a variety of enduring companies and found that they have one thing in common; all have leveraged their deepest values alongside strategy and execution, allowing them to fuel growth as well as weather hard times. Karlgaard shares these stories and identifies the five key variables that make up every organization’s “soft edge”.

Amidst the desolate landscape of fallen great companies, Jim Collins began to wonder: How do the mighty fall? Can decline be detected early and avoided? How far can a company fall before the path toward doom becomes inevitable and unshakable? How can companies reverse course? In How the Mighty Fall, Collins confronts these questions, offering leaders the well-founded hope that they can learn how to stave off decline and, if they find themselves falling, reverse their course. Collins’ research project—more than four years in duration—uncovered five step-wise stages of decline: By understanding these stages of decline, leaders can substantially reduce their chances of falling all the way to the bottom.

We live in a fundamentally changed world. It’s time for your approach to strategy to change, too.

According to Andrew Winston, bestselling author (“Green to Gold”) and globally recognized business strategist, the way companies currently operate will not allow them to keep up with the current–and future–rate of change. They need to make the “Big Pivot.”

In this indispensable new book, Winston provides ten crucial strategies for leaders and companies ready to move boldly forward and win in this new reality. With concrete advice and tactics, and new stories from companies like British Telecom, Diageo, Dow, Ford, Nike, Unilever, Walmart, and many others, “The Big Pivot” will help you, and all of us, create more resilient businesses and a more prosperous world. This book is the blueprint to get you started.

To stay ahead of the pack, you must translate your organization’s competitive strategy into the day-to-day actions carried out in your company. That means channeling resources into the right efforts, achieving the right balance between innovation and control, and getting everyone pulling in the same direction.

Simons presents the seven key questions a manager and his team must continually ask. Drawing on decades of research into performance management systems and organization design, “Seven Strategy Questions” is a no-nonsense, must-read resource for all leaders in any organization.

Why do businesses consistently fail to execute their competitive strategies? Because leaders don’t identify and invest in the full range of projects and programs required to align the organization with its strategy. Moreover, even when strategy makers do break their plans down into doable chunks, they seldom work with project leaders to prioritize strategic investments and assure that needed resources are applied in priority order. And they often neglect to revise the strategic portfolio to fit the demands of a dynamic environment, or to stay connected to strategic projects through completion, as new products, services, skills and capabilities are transferred into operations.

In “Executing Your Strategy,” Mark Morgan, Raymond Levitt, and William Malek present six imperatives that enable you to do the right strategic projects–and do those projects right. And it is no accident that the six imperatives combine to create the acronym INVEST: Ideation: Clarify and communicate purpose, identity and long range intention; Nature: Develop alignment between strategy, structure and culture based on ideation; Vision: Create clear goals and metrics aligned to strategy and guided by ideation; Engagement: Do the right projects based on the strategy through portfolio management; Synthesis: Do projects and programs right, in alignment with portfolio; and Transition: Move the project and program outputs into operations where benefit is realized.

Full of intriguing company examples and practical advice, this crucial resource shows you how to make strategy happen in your organization.

Martin O’Neill presents a road map for leaders of mid-sized companies to: assess their current situation, paint a compelling picture of the future, build alignment among the leadership regarding that future, and develop specific transformational initiatives that will build real value.

Turn Strategy into Performance!

In today’s world of rapid, disruptive change, strategy can’t be separate from execution–it has to emerge from execution. You have to continually adjust your strategy to fit new realities. But if your organization isn’t set up to be fast on its feet, you could easily go the way of Blockbuster or Borders.

Laura Stack shows you how to quickly drive strategic initiatives and get great results from your team. Her LEAD Formula outlines the Four Keys to Successful Execution: the ability to Leverage your talent and resources, design an Environment to support an agile culture, create Alignment between strategic priorities and operational activities, and Drive the organization forward quickly. She includes a leadership team assessment, group reading guides, and bonus self-development resources. Stack will equip you with the knowledge, skills, and inspiration to help you hit the ground running!

For a full listing of best books in 2014, please visit http://blog.800ceoread.com/

 

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

4 Things That (Positively) Affect Growth

Tuesday, June 3rd, 2014

We’ve worked with well over 100 business owners – and their management teams – during the last 12 years. And we talked, often in depth, to hundreds of others.4 things that have a positive affect on growth

Their companies ranged in size from less than $1 million to over $300 million in revenues. They were in a variety of industries, from manufacturing to software development.

They were all at different stages in their lives. For example, in some, growth had stalled; others were growing so quickly that they couldn’t keep up; and some knew that what had got them to where they were, wouldn’t get them to where they wanted to be.

The owners had different reasons for talking to us. Some had tried things that hadn’t worked, for example, new marketing campaigns or hiring new sales people. Others thought our process was more likely to get them results than those of our competitors.

Back in the Fall of last year, for reasons which escape me now, I found myself thinking about the ones we had worked with, picturing each one of them.

I began to sort them into groups. Who did I really enjoy working with? Who – now that we had the gift of hindsight – achieved the results they wanted?

And what was it that we had done for them? In one way or another, we did some, or all, of the same 4 things for those companies. We made sure they:

  1. Knew where they were going.
  2. Identified what they had to do to get there.
  3. Involved people – employees, management – in figuring out the first two.
  4. Held people accountable for completing the first two.

Was their success solely attributable to these 4 things?

My thought process hardly sets the standard for a rigorous piece of quantative analysis. On the other hand, a search of what I consider to be the better theories on execution mentions some, or all, of the 4 things as being contributors to success.

I felt good enough about it to begin building a tool that we could use during our initial meetings with prospects to figure out if we could help them. I’ll tell you more about it next time.

Because then another thought, which I’ll also talk more about next time, struck me…………..

 

If you enjoyed this post you’ll also enjoy 6 Things That Get In The Way Of Results

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

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