Archive for September, 2014

7 Ways to Hold Consultants Accountable Now

Tuesday, September 23rd, 2014

7 ways to hold consultants accountable nowMy wife will tell you I like giving other people advice.

That’s probably why I’m a management consultant.

But even consultants have to take some of their own advice – and change in order to grow.

For example, we must find a process for linking our compensation to our results in a meaningful way.

There’s no doubt this is hard to do. But that’s no excuse for refusing to try.

However, at the risk of making a huge understatement, it’s going to take time.

So, while we’re waiting, what can a business owner do to make sure the consultants they hire actually deliver results?

1. I talked about our own solution to linking compensation to results last year in a post called “Let’s Hold Consultants Responsible For Results”. It isn’t perfect, but it’s better than the traditional model.

2. Four years ago I suggested how owners can keep control when they work with consultants.

3. Around the same time I highlighted 3 reasons why consulting engagements fail. It’s really not difficult to avoid making them.

4. Look for consultants who have had practical, “hands on” experience operating a company. They have 2 clear advantages over consultants who have spent their entire career in consulting roles, as I pointed out in 2011.

5. There are also clues that you can listen for. Consultants who are effective tend to say certain things.

Here are 2 more things that I thought about this week.

6. Yesterday I was talking to a business owner who had been referred by an existing client. He asked if I would go out and meet him. I agreed immediately because that’s the only way to determine if there’s any chemistry between us.

Some people might consider the idea of “chemistry” to be foolish. But I can tell you from experience, that without it, the risk of a project failing increases dramatically.

7. Ask what success will look like. It’s more than just a description of what the consultant’s going to do and the services they’ll deliver. It’s about knowing how, when and what they will do to help you get the results you want.

Success, they say, comes not from doing one big thing well, but from doing many little things well. Perhaps change is like that too.

We at ProfitPATH, and lots of other consultants, are chipping away, doing the necessary things that will bring change to our business.

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Jim StewartJim 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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One Big Reason Why Strategies Fail

Tuesday, September 9th, 2014

the main reason a strategy fails is based in how it’s executedI often argue that a strategy isn’t important.

It’s the benefits a strategy delivers – more profit, increasing the value of a company – that are important. They put more money in the owner’s pocket.

To reap those benefits the strategy must, of course, be successful.

A strategy can fail for many reasons.

It could just be a lousy strategy. But that happens less often than you might think.

Even a poorly conceived strategy can deliver results – if it’s executed with focus, energy and passion.

I believe the main reason a strategy fails is based in how it’s executed.

For example:

  • There’s no link between the strategy and the actions which have to be completed if it’s to be successful.
  • Most people don’t know what the strategy is – and the part their job has to play in making it successful.
  • People, at all levels, do know what their role is – but there’s no accountability if they miss targets.

Some examples are less evident.

One in particular is quite insidious. It goes like this.

After intense discussion, the owner and management team reach a consensus on the strategy for the next 3 years. Everyone goes off determined to do the right things to execute it successfully.

However, since much of their time is taken up with running the business day-to-day, after a while, that begins to affect their perspective.

And that gradual, subtle change in perspective can have a major impact on the execution of their strategy.

It is possible to detect it and fix it. But that requires the discipline to do 2 things.

First, hold regular strategy review meetings. Second, keep the agenda off day-to-day stuff, and on measuring progress toward the 3-year goal.

Any shift in perspective can be spotted by asking one question. “Are all of the projects being discussed integrated/aligned with the strategy we chose for the next 3 years?”

The odds are there will be some drift.

That’s because the company is made up of people. And people tend to have their own priorities, concerns, agenda, and goals – which may be directly opposed to the next person’s. In the face of day-to-day pressures, people find it hard to keep the whole company perspective in mind.

But it can be restored – and one big reason why execution fails can be easily avoided.

If you enjoyed this post you’ll also enjoy Strategy Execution – How You Do What You Do

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Jim StewartJim 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

3 Growth Strategies That Always Work

Tuesday, September 2nd, 2014

Here are 3 strategies that work for privately owned businesses in any economic conditions.

3 strategies that work for privately-owned businesses in any economic conditions

Guaranteed.

I’m going to be really bold and also say they will work in any industry.

Interested?

1. Keep costs down – but quality up.

Twenty small and medium-sized companies, based in the U.K., managed high growth by keeping their production costs under control and their prices competitive.

Even when the economy slumped, they kept their quality up even though that meant their prices were slightly higher than their competitors.

That way they kept their customers satisfied – and avoided price wars.

2. Differentiate on tangibles – not intangibles.

Thirteen of the companies were consistent innovators, regularly introducing new products, services or processes.

Five of them, all manufacturers, consistently allocated a large percentage of revenues to developing new products.

In contrast, 15 of the 20 spent relatively little on traditional marketing activities, using their sales force and the Internet to keep customers up-to-date on their new products or services.

3. Customization.

Almost half of the companies stayed very closely in touch with their customers, delivering solutions tailored to specific needs and adapting products as needs changed.

Even those who produced standardized products invited small changes or provided complementary services.

Flouting conventional wisdom, 75% of the companies spurned niches for the broader market. They took time to figure out their competitors’ strengths and weaknesses, then exploited their knowledge to increase their market share.

The 20 companies in the study grew at a consistent rate over a 4-year period—outpacing their competitors by more than 50 percent while operating in declining industries – for example, the clothing industry.

Think about it – keep your costs under control; understand what your customers need, and then give it to them; introduce new products and services regularly.

Put that way it almost sounds like common sense.

So, if these approaches work in a tight economy or mature markets, why wouldn’t they work in good times and healthy markets?

The short answer is that they will.

I’ll make 2 more points as a wrap up.

  • These 3 approaches aren’t mutually exclusive. In fact, the British companies used a combination of them – usually the second and third.
  • The authors of the study commented that the owners and managers saw the situation as offering a challenge and lots of opportunities. As they say – attitude is everything.

If you enjoyed this post you’ll also enjoy The Keys to Executing a Strategy and Getting Results.

Click here and automatically receive our latest blog posts.

Jim StewartJim 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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