Archive for 2015

3 Reasons Why Strategy Isn’t Dead In The Water

Tuesday, February 3rd, 2015

I hate sweeping generalizations.Is strategy dead, or dying?

Strategy is dead is one that I particularly dislike.

To say that, it seems to me, is to say that it’s a complete waste of time for every company, regardless of size or industry, to have a strategy.

An article appeared in the Globe and Mail late last year, headline “Why Strategy is Dead In The Water.” It was based on an earlier article in Forbes magazine, headline “Is Strategy Dead? 7 Reasons The Answer May Be Yes.”

We’d gone from strategy might be dead to signing its death certificate – in the space of two headlines.

Here are 3 of the reasons the Forbes author offers to support his argument.

1.  Incrementalism has been disrupted by disruption. The argument is that managers talk big but really focus on delivering incremental change. Hopeless now when, for example, companies like Uber disrupt an industry. Disruptive change isn’t new – otherwise we’d all still be driving horse drawn buggies – but is it realistic to expect it in every single industry, simultaneously?

2.  Innovation is occurring with high variance outcomes. Contingency plans are used to deal with the most likely market reactions to a strategy. Now, it’s argued, there are too many possible outcomes to anticipate, never mind plan for. Assume that intuition, common sense and gathering information can no longer help us isolate all of the possible outcomes. Does that prevent a business selecting one or two of the most likely ones and running with them in a controlled, limited way i.e. hedging its bets?

3.  The past is no longer a good predictor of the future. Because life expectancy has increased, consumer behavior has changed and we are able to quickly access data, it is argued that the future no longer looks anything like the past.

Could that not have been said about the rise of consumer spending in the 1950’s, the shift to low cost, offshore production, or half a dozen other seismic changes that have taken place?

Has the past ever been a good predictor of the future? The old adage is, if we don’t learn from the past, we are doomed to repeat it. Isn’t adapting a way of learning?

Isn’t the entire argument that strategy is dead, or dying, rather like throwing out the baby with the bathwater?

I’ll comment further next week.

 

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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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3 Lessons About Successful Business Growth

Tuesday, January 27th, 2015

Two books, published 19 years apart, yet saying similar things about a key aspect of successful business growth:Lessons about successful business growth

‘Built To Last’ was published in 1994. In it, Jim Collins analyzed 18 companies that he called visionary because they were the best in their industries – and had been that way for decades.

Collins argued that the core values and enduring purpose of all 18 could be separated from their operating practices and business strategies. And that, while the former never changed, the latter changed constantly in response to a changing world.

In her book ‘The End Of Competitive Advantage’, published in 2013, Rita Gunther McGrath studied the performance of large, publicly-traded companies from 2000-2009.

She found that only 10 of them grew their net income by at least 5% every year. All 10 had found ways to combine tremendous internal stability with tremendous external flexibility.

McGrath argues that to win in volatile and uncertain times, companies must learn to exploit short-lived opportunities quickly and decisively.

If you look at the things that Collins’ companies kept unchanged and those that gave McGrath’s companies their internal stability, you find, in my opinion, a number of similarities:

  • Collins’ companies all had a sense of purpose, a lofty aim. So did McGrath’s – to become world class. Neither talked about making money.
  • McGrath’s companies focus on values, culture and alignment. Collins’ had ‘cult-like’ cultures, only employees who shared their values stayed.
  • Collins’ companies invested in ongoing employee education, some building learning centres. McGrath’s also invest heavily in employee education and ‘upskilling’, increasing peoples’ internal mobility as the strategy changes.
  • The most senior executives in all 10 of McGrath’s companies were promoted from within. Collins’ companies showed amazing consistency promoting ‘home grown’ senior management and CEOs.

I think there are 3 lessons for the owners of smaller, privately-owned companies:

  1. Think about why you started the company. I’ll bet it was not ‘to make money’. Communicate that constantly, use it to shape the company’s values and vision, build your strategy on that foundation.
  2. Be clear about your values. Hire only people who share them and train those people to grow with you.
  3. View the company as something that can contribute to your community, long after you have moved on and develop people who will carry on your vision.

There are other lessons from these books. More on that later……..

 

If you enjoyed this post you’ll also enjoy 4 Things That (Positively) Affect Growth

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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

6 Tips For Growing Your Business in 2015 – How to Use Them

Tuesday, January 20th, 2015

I was asked a good question last week.How to implement 6 tips for growing you business in 2015

“Loved your last blog post, Jim – but how do companies like mine do those things?”

So here are some ways any business owner can implement the 6 tips in his/her company.

1. Able to spot trends earlier than most of their competitors.

  • Stay close to key customers and suppliers – ask what they see in the future, how you can help them. Don’t leave it to sales people, meet with the owner/CEO twice a year. Pay special attention to customers who are ‘early adopters’ of new technologies and processes.
  • Get involved in industry bodies, serve on committees, listen for trends in what suppliers and competitors are saying.
  • Make your own internal data easy to access and analyze.

2. Very willing to try new things (innovate, adapt).

  • Have a pipeline full of growth initiatives at different stages of development.
  • Understand that people who are good at making things efficient aren’t good at innovation. They’re 2 different skill sets, have a mix of both.
  • Do limited tests of new products and systems and quickly roll out the ones that work.

3. Always trying to be better – than themselves.

  • Adapt your culture so that employees are comfortable challenging the status quo. Continuous improvement and innovation become by-products of that.
  • Never sacrifice effectiveness to short-term cost reduction programs.

4. Following a strategy or plan.

  • Have a clear picture of what your Company will look like in 3 years.
  • Set priorities and allocate investment and resources accordingly.
  • Anticipate change. Update your current situation twice a year and adjust where required. (Staying close to the market also allows you to surface risks and respond to them early.)

5. Skilled at turning their plan into results.

  • Link your strategy to your annual planning cycle.
  • Do forecasting and budgeting after your annual plan.
  • Link every individual and department’s goals to the company’s goals.
  • Hold everyone accountable.

6. Working from a solid foundation.

  • Automate everything you can:
    • For example: your CRM system; accounting system; project management system; etc.
    • Use dashboards to monitor key financial and operational metrics e.g. cash flow forecast, number and value of incoming orders; delivery times; IT down time; etc.
  • Implement ISO, Six Sigma or any other standard/process that could apply to you.
  • Ensure all your core business processes – e.g. selling, product development and launch, HR (developing in-house talent, recruiting, onboarding) – are robust and effective and document them.

There now, let me know if that’s better. And if we can help……..

 

If you enjoyed this post you’ll also enjoy Slow and Steady Growth Is The Key To Success

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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

6 Tips For Growing Your Business in 2015

Tuesday, January 13th, 2015

January is the month for New Year’s resolutions, freezing cold and, for many, a new fiscal year.Tips to successfully grow your business in 2015

Everyone wants to ‘do better’ in 2015 than in 2014 and, for business owners, ‘doing better’ is shorthand for growing.

I don’t know how often, in the last couple of weeks, I’ve been asked something like “What are your top 6 tips for growing successfully”.

The answer depends on a number of things.

That said here are some of the things that the companies I’ve seen grow successfully have in common.

Those companies are:

1.  Very willing to try new things (innovate, adapt). However they don’t bet the farm. They do limited scale tests of new products and ways of doing things first. Ones that work are rolled out quickly; ones that don’t are killed – just as quickly.

2.  Always trying to be better – than themselves. They are continually looking for ways to, for example, improve their own quality, do things more quickly and become more efficient. They don’t compare themselves to others, they just want to the best they can be.

3.  Following a strategy or plan. They know where they want to be in 3 – 5 years but don’t expect to get there by following a straight line. They try to keep growing steadily in good times and in bad.

4.  Skilled at turning their plan into results. Knowing what success will look like makes it easier for them to set priorities and allocate the resources and funds to achieve them. They link every individual and every department’s work to the company’s goals and hold themselves accountable.

5.  Able to spot trends earlier than most of their competitors. They stay close to their customers and suppliers, monitor their competitors and watch for developments in technology.

6.  Working from a solid foundation. All of their core business processes – sales, marketing, operations, finance and HR – are tried, tested and automated wherever possible. They find, hire and retain smart people who are a good “fit” with their culture and values. They are fiscally cautious, never over extend themselves and can fund their growth.

Here’s the rub. All 6 are much easier to talk about than do.

But if you start on them now you can make some progress this year. And if you need some help just give us a call…….

 

If you enjoyed this post you’ll also enjoy 3 Leadership Tips From A Great Scotsman

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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

From Strategy to Results – Plus Some Succession Planning

Tuesday, January 6th, 2015

In an ’80s TV series called “The A Team”, one of the main characters used to say “I love it when a plan comes together”.Good strategy executed successfully

Here’s a wonderful example of a real life plan coming together.

In 2009 a recruiting company called LEAPJob hired us to help them with their business strategy.

It was a family business founded by Donna and Marcus Miller. One of their sons, Jeremy, worked in the firm with them. Stephen, their other son, had a very successful career with a large software company.

There were 3 major issues to consider.

First, the Millers believed the recruiting industry was undergoing fundamental change. They were concerned about the future for smaller companies.

Second, LEAPJob had an extremely high level of brand recognition in its target market and a very successful on-line lead generation engine.

Finally, Donna and Marcus were thinking about retiring.

The outcome was a 2-step strategy.

The recruiting business would be sold in approximately 3 years and Donna and Marcus would retire.

While they were positioning LEAPJob for sale, Donna and Marcus would help Jeremy launch a new business. This would leverage his skills in marketing and branding – competencies Jeremy had honed by leading the rebranding effort and building the lead generation engine.

Fast forward to January 2015.

Jeremy’s first book, published by an established Canadian label, is about to be launched. It will be available in stores and on-line via Amazon, Barnes and Noble and iBooks, amongst others, in a few days’ time.

The title of the book “Sticky Branding” is also the name of his company.

Jeremy’s commented a number of times over the years that our process played a significant role in his journey.

But the idea to pinpoint and profile small and mid-sized companies with sticky brands; the analytical skills to see the factors common to them; and the creativity to combine those factors and his own experience were all Jeremy’s.

The result – lessons which can be applied by the owners of small and mid-sized companies who want their companies to “stand out, attract customers & grow an incredible brand”

He’s had to deal with some hard knocks and tough times but now Jeremy is on the brink of success. I admire his focus and willpower.

Donna and Marcus are happily retired.

I love it when a good strategy is executed successfully.

 

If you enjoyed this post you’ll also enjoy Strategies That Get Results Are Developed By Thinkers And Doers

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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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