Archive for the ‘Planning’ Category

Is “Crushing The Competition” A Strategy?

Tuesday, July 22nd, 2014

Saying you’re going to crush the competition may provide the emotional fire to drive a sales team to beat its short-term revenue targets.It is possible to win without crushing the competition.

But as a strategy for the whole business, it’s not only ineffective, it’s dangerous.

Here’s why.

1.  It puts the focus in the wrong place.

A successful strategy focuses on customer needs; the value proposition with which the company satisfies those needs; and the resources and capabilities required to deliver it.

Trying to crush the competition puts the focus on doing things “better” than they do.

It puts competitors, not customers, front and centre. It substitutes action based on original thinking, with reaction to someone else’s thinking.

2.  It sacrifices the long term for the short term.

Two common tactics for crushing the competition are providing more features for the same price and cutting prices.

However neither of them creates new value for customers, nor do they help the company’s long-term margins.

Businesses reap the biggest rewards when their strategies provide previously unrealized value for consumers and users by, for example, introducing new, or enhanced, products or services.

That, however, takes time and the willingness to take risk. It may also open up new parts of the market for everyone.

The iPhone, for example, didn’t just help Apple, it broadened the market for mobile devices. Fracking not only breathed new life into the U.S. oil and gas industry, it benefitted suppliers to the industry.

3.  Business isn’t like war.

Originally, strategy had its application in winning battles and wars. And the only way to win is to beat the other side; the more crushing the defeat inflicted on the loser, the better.

But in business, it is possible to win without crushing the competition.

How? By finding an untapped opportunity. For example, Starbucks redefined the coffee drinking experience and Jet Blue redefined discount travel.

In order to do that, both had to understand their competitors’ value propositions – a more productive, more effective, even healthier, way to deal with competitors.

I’m not suggesting that competitors can be ignored – but they have to be kept in context.

4.  Emotion replaces logic.

Finally, when leaders go to war with their competitors, emotion often overwhelms business logic. If it can happen to Steve Jobs – remember the repercussions from iMaps – it can happen to anyone.

In case you’re curious about what set me off on this particular rant, it was a post by Ken Favaro, one of my favourite writers on strategy.

 

If you enjoyed this post you’ll also enjoy Putting The Horse Before The Cart – That’s Strategy!

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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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ProfitPATH’s Top Ten Blogs – First Half 2014

Tuesday, July 15th, 2014

 

1.   6 Challenges Fast Growing Companies Face

I’ve mentioned Inc. magazine www.inc.com several times before. It’s a great resource. There’s a well-researched article in the current issue about 6 challenges fast growing companies face. They’re all about execution – and if the owner doesn’t deal with them well any one of them can be fatal. more

 

 

Strategy is not planning and the importance of knowing the difference2.   The Difference Between A Strategy And A Plan

I want to talk briefly about what I think is one of the worst mistakes – confusing strategy and planning. Roger Martin wrote a post for the HBR last month in which he dealt with this very topic. I frequently hear business owners talk about the need to do “strategic planning” in order to create a “strategic plan”. Some talk – every year – about holding a “strategic planning meeting”. more

 

3time for a change in the direction you are heading, focus on center of compass....   3 Times When You May Need To Change Your Strategy

Changes to a well thought-out, well-crafted strategy shouldn’t be driven simply because it’s been in place 1, 3 or 5 years. A strategy shouldn’t necessarily be changed even if it isn’t producing results. In this situation I always look at how well (or badly) the strategy is being executed before I look at the strategy itself. So when should a company review its strategy? And what makes that review and any subsequent adaptation, revision or recreation necessary? Here are three occasions. more

4.   Adaptive Strategy – A Way To Profits In The New Normal?

Adaptive Strategy is an alternative developed by The Boston Consulting Group (BCG)1. Here’s how I think it applies to owner managed businesses. Adaptive strategy is built on the 3 R’s required in a changing environment2. Can adaptive strategy be applied in owner managed businesses? more

5.   6 Ways A Business Owner Can Influence Culture

I wrote last week about the relationship between Strategy, Culture and Leadership. As a result we’ve had some questions about how a business owner can influence the culture in his/her company. Here, in no particular priority, are 6 ways that it can be done. more

6.   6 Things We Can All Learn From Family-Owned Businesses

The 6 things I’m going to talk about come from a study of 149 large, publicly-traded, family-controlled businesses. However, stay with me because we’ve seen the same characteristics in the successful family-owned businesses we’ve dealt with – and none of them are publicly traded. Another thing – the study looked at 1997 – 2009, covering some good and some very tough times. Guess what? The family-controlled businesses, on average, turned in better long-term financial performance than non-family businesses – in multiple countries. So what are the 6 things we can learn? more

7.   6 Tips For Finding The Right Buyer

Last week I was one of three speakers at the Toronto Star’s Small Business Club event, “Exit and Succession Planning”. My talk included 6 things a business owner can do to ensure she/he finds the right buyer or successor. more

8.   3 Ways Human Nature Sabotages Strategy

Ask 10 people how long it will take them to complete a task and I’d guess 7 or 8 of them will underestimate the time required. That proportion might increase if the 10 are all type A personalities – i.e. business owners or entrepreneurs. We see this when we take teams through our strategy and business planning processes. For example, at a specific point, we prioritize the things they need to do to close the gap between their company’s current state and where they want it in 3 years’ time. Typically the teams want to tackle more items than is humanly possible given their resources. There’s no ideal number of items – the complexity of each item is only 1 of the variables – but we’ve seen time and again that completing a few key tasks produces better results than taking on too many. more

9.   5 Traits Effective Business Owners Share

I believe the single biggest thing that separates companies that grow from those that don’t is the owner’s awareness of the need for change and their willingness to do so. So, I was interested in a recent post about traits that effective entrepreneurs share. Sure enough, it contained a quote saying that if owners commit to learning more about themselves and becoming the best that they can be, they’ll find that challenges are really opportunities. But what other traits, according to the post, do effective entrepreneurs have? more

10.  Strategic Planning – 3 Things That Are Wrong With It

We all know that picking a strategy means making choices. But that means making guesses about that great unknown, the future. What happens then if we make the wrong choice? Could we destroy a company? That’s why, according to Roger Martin¹, we turn choosing a strategy into a problem that can be solved using tools we are comfortable with. And we call that strategic planning. But, Martin says, companies make 3 mistakes when they confuse strategy and strategic planning. more

 

 

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

Strategy Execution – How You Do What You Do

Tuesday, July 8th, 2014

Twice in a week.Business strategists echo what we've been telling our clients about strategy execution

That’s how often I’ve encountered credible, experienced business strategists echoing what we’ve been telling our clients.

First, it was the Wall Street Journal (WSJ), now it’s Roger Martin.

Both of them express their points of view in a way that’s different to the other and to us. In Martin’s case, it’s through the lens of his own approach to strategy execution.

Despite that, we’re all saying the same thing.

In my last post, I explained how the WSJ’s approach dovetailed with ours. Here’s how I think Roger Martin’s does.

Martin says that:

  • “…it is absolutely critical that each person in the organization knows what it means to take actions that are consistent with the intent of the strategy as asserted.”
  • To do that every person has to think about 4 things – the strategic intent of their managers/leaders; the key choices they make in their work; how to align those choices with those above them; and how they communicate the reason for their choices to their reports.

How does that align with our approach, which says that to execute its strategy successfully, a company has to avoid 4 Risks?

•  Since a strategy has been “asserted”, then Risk #1 – No Clear Growth Path – has been removed.

•  The title of Martin’s post is “Strategy Isn’t What You Say, Its What You Do” and he talks specifically about taking “action” in the quote above and on several other occasions. Risk #2 – No Link To Action – is dealt with.

•  Risk #3 – No Buy In – means that employees are not motivated by the strategy or engaged in its execution. To get buy in, we say the strategy, the initiatives required to execute it and the actions and goals which will turn the initiatives into results, must be linked directly to the goals of each department and individual employee in the company. The 4 things that Martin says every person has to think about cover precisely that.

•  Our fourth Risk – No Accountability – isn’t discussed in Martin’s post, but I’ve seen enough of his work to believe that he considers accountability as critical as we do.

Finally, in the interests of full disclosure, I should say that I think:

  • Roger Martin’s book “Playing To Win” is one of the most logical, easy to understand and practical approaches to strategy I’ve read.
  • The WSJ’s statement of the main requirements for successfully executing a strategy is nice, clear and succinct.

 

If you enjoyed this post you’ll also enjoy 5 Reasons Why I Love Execution

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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

The Keys To Executing A Strategy And Getting Results

Tuesday, July 1st, 2014

I really liked a recent post in the Wall Street Journal (WSJ).The keys to executing a strategy and getting results

It said that the main requirements for successfully executing a strategy are:

  1. Clear goals for everyone in the organization, that support the overall strategy
  2. A way to regularly measure progress toward those goals
  3. Clear accountability for that progress.

That’s a very nice, clear, succinct way to put it.

I must admit that I was a little relieved when I saw their next sentence, which said that these 3 “are the basics”.

That clarification allows the discussion to continue, so that additional factors can be included. The authors themselves went on to say that good execution also requires facing reality and a strong culture of execution.

Those are 2 of the points made by Larry Bossidy and Ram Charan in “Execution”, one of the best books ever written on the subject.

On the other hand, I was pleased to see the 3 main requirements.

Why? Well, they correspond nicely with the 4 Risks I’ve talked about in recent posts. Here’s how.

Risk #1 – No Clear Growth Path:  The ‘overall strategy’, mentioned above, incorporates the path a company takes to grow to size in the future.

Risk #2 – No Link To Action:  A key step in linking a strategy to action is to develop clear goals. The best goals are specific, measurable, and attainable and have deadlines. They are also a result of prioritizing everything that has to be done so that limited resources can be allocated to get the best return.

Risk #3 – No Buy In:  Giving every employee clear goals, which support the overall strategy, is an important factor in getting buy in. Involving employees in developing those goals is another. A third is frequent, ongoing communication so that everyone understands how achieving their goals will help the organization achieve its goals.

Risk #4 – No Accountability:  A process for measuring progress toward goals and regular review meetings are the foundations for accountability. They enable the reasons for progress – or lack of it – to be assessed objectively. Those accountable can be recognized, paid bonuses, even promoted – or they may leave the company.

So I’m delighted that the main requirements for successfully executing a strategy, identified by the WSJ, are the same things we have been helping companies with for over 12 years.

 

If you enjoyed this post you’ll also enjoy 5 Traits Effective Business Owners Share

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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

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

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

Targets Are Targets, Results Are Reality

Tuesday, May 27th, 2014

Hubris can be the first of the 5 stages of decline.In the last few days, the weather, in the parts of Canada I’ve been in, has gone from chilly to hot.

About time, too!

It’s almost the end of May. The golf courses are open.

Another month and the schools will break up for summer and vacation time will begin.

And, just in case it’s overlooked in the excitement, companies with a calendar fiscal will reach the mid-point of the year. I know. I’m a dour, Scottish buzz kill.

Some business owners will go off on vacation pleased that results are ahead of expectations. Others will not be so satisfied – and some will be unhappy.

But all 3 types of owner share 1 thing in common. They know more now than they did when they set their expectations for the year.

Why is that worth mentioning?

We live in an achievement-oriented society. So we’re programmed to focus on the latter 2 types of companies – those that haven’t made their targets and those who are barely doing so.

They’re the ones who are underperforming. So they need to figure out why because they need to do better.

And that’s where our thinking often stops.

However, what about the companies that are doing well against their targets?

Is it possible that’s because their targets were low? After all, they were set around 6 or 8 months ago.

And, despite having been in the consulting business for over 12 years, I have yet to meet someone who can consistently predict the future.

Some of the owners, whose companies are doing well, will take the time to review their performance. And, if needed, change their activities to drive for even better results based on what they now know about this year’s performance.

In fact, I notice that the owners who take the time to step back and review their performance regularly, tend to have successful businesses.

The alternative, simply accepting the results as good fortune or, worse, as being their “due”, is a sign of complacency born of hubris.

And, as anyone who has read Jim Collins book “How The Mighty Fall” knows, hubris can be the first of the 5 stages of decline……..

 

If you enjoyed this post you’ll also enjoy Too Early To Tell If It Will Be A Good Year? Think Again!

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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

Strategy Working? Then Don’t Make These 5 Mistakes

Tuesday, April 22nd, 2014

“Why do business owners, who have grown their companies successfully, then go ahead and do silly things?”

Far too often the answer is “Well it seemed like a good idea at the time…….”Don't tinker with a strategy that works

To be fair, we get to look at the outcome with the gift of perfect hindsight. But it happens often.

Why? Let’s take a look at 2 companies.

Company A

In only 5 years, three friends built a retail business to $50 million in annual sales.

Then they hired an experienced executive to be their President. He thought they should start selling a product which complimented their core offering. The founders agreed and the company charged ahead.

They had to change the format of their retail outlets but that was just a tweak to the original strategy, right?

Unfortunately, they underpriced the new product and sold it on credit. Their original business was cash only and many traditional customers turned out to be poor credit risks.

In less than a year the new venture had tanked. Because the founders had been absorbed in saving it, the core business took a massive dive too. And it was expensive to get out of those new leases.

It took several years to recover.

Company B

An established supplier of skin-care products, it sells via independent sales ‘consultants’.

To continue growing, the owners had to make a choice. Use temporary, short-term bonuses to motivate average performers. Or analyze the top performers and train everyone on their techniques.

They tested both alternatives.

Performance dropped immediately the short-term bonuses stopped. But sales, in a tough market, grew when they trained everyone on the top sellers’ techniques.

So they gradually rolled the training out throughout the company.

The mistakes (or lessons)

  1. If you survive the first few years and have strong year over year growth – your strategy is working.
  2. You may still have to adjust it if there’s new competition, changing customer demand, technological innovation or all three.
  3. But you’re no longer a start up, so you can’t bet the farm tinkering with alternatives while neglecting the strategy that works.
  4. However, you’re not a big corporation (yet) with enough resources to experiment with several new strategies at once.
  5. So, continuing to run and build the core business has to be #1 priority. Innovations and changes have to be tested on a small scale to mitigate risk

Company B did it. Can you?

 

If you enjoyed this post you’ll also enjoy 3 Ways To Test Your Strategy

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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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