Posts Tagged ‘accountability’

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

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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

Can Strategic Planning Pay Off?

Tuesday, November 18th, 2014

“The most fundamental weakness of most corporate plans today is that they do not lead to the major decisions that must be made currently to ensure the success of the enterprise in the future.”Key factors to make strategic planning pay off

It sounds like something I might have written in one of my blog posts because the point applies equally to owner-managed businesses.

But, regrettably, it wasn’t.

It’s from an article written by a 31-year-old, who then goes on to say:

“…..Nothing really new happens as a result of the plan, except that everyone gets a warm glow of security and satisfaction now that the uncertainty of the future has been contained……”

Does that sound familiar? The author goes on to say:

“……too many managements fail to…….recognize that the end product of strategic analysis should not be plans but current decisions.”

He then lists the reasons why decisions aren’t made:

• It’s risky – a bad decision could jeopardize the company.

• It’s difficult – “Strategic planning….deals with the most complex questions facing a company……synthesizing critical issues and strategic options to resolve those issues….is fundamentally a creative process. Many…..find it an elusive, uncomfortable task.”

• It requires leadership – making controversial decisions requires a willingness to be tough-minded.

• The value system works against it – owners often emphasize short-term results, which have little to do with long-term strategic success.

Next the author points out that “Many planning systems simply….produce forecasts of financial results, or statements of objectives”.

This is “….momentum” planning as opposed to dynamic planning that is attuned to the realities of external change……..

To deal with this, emphasis must be given to 3 things – evaluating the external environment; thorough evaluation of competitive strategies; and developing contingency plans.

Finally, the author provides 2 recommendations for motivating the people who can make or break a strategy. Involve those who will actually have to execute the strategy and adapt reward systems to recognize longer-term performance and the achievement of strategic goals.

So, which of today’s leading thinkers wrote the article? None of them did.

An up-and-coming member of the McKinsey team called Lou Gerstner (of IBM fame) wrote the article in 1973.

I like the article because it addresses all 4 of the Risks we believe growing companies face – having a Clear Growth Plan; linking it to Action; getting Buy In and holding people Accountable.

You can find the full article here.

 

If you enjoyed this post you’ll also enjoy Strategic Planning – 3 Things That Are Wrong With 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

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

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

3 Leadership Tips From A Great Scotsman

Tuesday, December 3rd, 2013
3 leadership tips from Sir Alex Ferguson, retired manager of Manchester United soccer team

Courtesy of bbc.co.uk

I’ve rekindled my relationship with an old love. I did it mainly because my wife wanted me to.

She thought I was doing the same old things all the time and that some variety would be good for our relationship.

It’s working really well. I’m happier and my wife is taking a more active role in it than I ever imagined she would. That’s providing a whole new level of enjoyment for me………..

Yes, starting to watch the Barclays Premier League soccer matches regularly again was a great idea. And talking to Deborah about the teams and games is really neat.

One of the absorbing aspects of this season is what’s happening at Manchester United.

Sir Alex Ferguson, who was their manager for 26 seasons, retired at the end of last season. David Moyes, an experienced, proven manager, and Ferguson’s chosen successor, joined them soon afterwards.

The club is one of the most successful and valuable franchises in sports – anywhere. During Ferguson’s reign, they won 13 English league titles and 25 other domestic and international trophies, almost double that of the next-most-successful English club.

Since Moyes has taken over, the team has struggled.

It isn’t really a strategy problem.

United’s lack of control in the mid-field and vulnerability to a quick break are more tactical than strategic. They have, more or less, the same players. But they don’t appear to be as creative, sharp or hungry for the win.

It’s more an issue of leadership and/or culture. But strategy, leadership and culture are inextricably connected.

Harvard Business Review recently published an article on “Ferguson’s Formula”, capturing 8 aspects of Sir Alex’s approach to leadership. Here are 3 that I think all business owners can use.

1.  Start With The Foundation That foundation is people development. He built depth by developing young players to replace his current stars. How many owners, executives or managers continuously develop replacements for their key people?

2.  Set High Standards – And Hold Everyone To Them Adversity made Ferguson determined never to give in and so one of his mantras is “If you give in once, you’ll do it twice.” He expected hard work and he led from the front. Yet he had confidence in the people he hired, trusting them to do their jobs and not micro-managing them.

3.  Never Stop Adapting The world of soccer changed dramatically while Ferguson was manager. He believes that you control change by accepting it and he focuses on 2 things. Understanding, even when you’re “at the top” that you can’t afford not to change. And exploring new, unproven ways of improving.

You can see the other 5 here. I’m off; I have a game to watch……

 

If you enjoyed this post you’ll also enjoy 3 Things That Shape A Good Strategy

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Let’s Hold Consultants Accountable For Results

Tuesday, September 24th, 2013

For a Scotsman, true accountability occurs when results are linked to compensation.Let's hold consultants responsible for results

So I’ve tried various ways of linking our payment to our performance for most of the 12 years that I’ve owned ProfitPATH.

Why? In addition to the one above, there are 2 other reasons.

First, the people we work with are all taking risks. If we are to be credible, why should we be risk exempt?

Second, when I worked in corporations I hated paying consultants before I knew if their recommendations would deliver the results I wanted. When I started ProfitPATH I swore we wouldn’t do that.

It’s relatively easy to link our fees to our own performance.

We make sure the deliverables are clear and give the business owner what they want. We also tell our clients that they can stop an assignment at any time without any financial penalty. Just pay us our fees up to that point.

Linking payment to our clients’ results is a little more complicated.

Why?

Because of the number of things we have no direct control over. They include, for example, everything from the economy (be honest, did you guess the last crash would come when it did) to how they arrive at the profit line on their income statement.

But just because it’s complicated, that doesn’t mean we shouldn’t try.

And so we’ve experimented with a number of things. Like deferring a portion of our fees until the outcome of our recommendation becomes clear; or linking part of our payment to the achievement of a result.

There are other ways to hold consultants accountable.

A client can, for example, refuse to act as a reference; or communicate their disappointment as widely as possible; or withhold part, or all, of the fees. But these are all post completion options.

Other alternatives, that we recommend, are frequent, regular progress reviews. When coupled with the “terminate at any time with no penalty” policy I mentioned above, these reviews carry some weight.

Holding us accountable is part of my wider belief that the management consulting industry needs to take some of its own advice. It has to change its business model.

Now Clay Christensen, author of “The Innovators Dilemma” and one of the leading thinkers about innovation, has weighed in. A Harvard academic, and former consultant with the Boston Consulting Group, he believes that the consulting industry is ripe for disruption.

He’s joined by Ron Ashkenas, managing partner of a consulting firm and academic at Berkley, whose article first set me off on this rant.

I’ve been convinced for years that change needs to happen. It’s encouraging to see thinkers of their caliber saying similar things.

 

If you enjoyed this post you’ll also enjoy Why You Need A Consultant With Hands-On Experience

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3 Questions Linking Strategy and Execution

Tuesday, August 6th, 2013

My friends think it’s a little sad, but I get excited when I find a book about business strategy that I haven’t read.The link between strategy and execution

I saw an article about one the other day, and was impressed by the author’s answers to 3 questions about the link between strategy and execution.

Judging by the article, the book focuses on larger corporations. But the lessons apply, I think, equally to owner-managed businesses.

Question 1:  Why do companies spend more energy on strategy development than execution?

Strategic planning off-sites usually take a few weeks to prepare and only last a few days.

But executing a strategy takes months or years during which time things go wrong – e.g. the economy changes, competitors react and the managers who developed the strategy leave the company.

Also there are more people involved in execution than in development. Some have different attitudes and levels of commitment to the strategy than the people who developed it. They may not really understand how what they do fits into the strategy or they become distracted by day-to-day problems.

So it’s easy to give up when things get in the way of execution.

Question 2:  What are the biggest mistakes, or most common pitfalls, when it comes to turning strategy into results?

A big one is failing to realize that there’s no silver bullet. Turning a strategy into results takes time.

Another classic is not putting a detailed implementation plan in place. Without one there can be no focus on key action plans and the responsibility and accountability for completing them. Nor will there be a process to manage the relationships and reactions between the constantly changing variables – e.g. resources, priorities, departmental rivalries – that are in play.

A third is that, in some bigger companies, management think that having created this beautiful strategy, their work is done. “Other people” have to buckle down and turn it into action.

Question 3:  What can you do to improve the odds of executing successfully?

Here’s where the saying “culture eats strategy for breakfast” comes into play.

Because the best way to execute successfully is to have a company that is “results oriented”. In those companies everything – the values, processes, individual rewards and, most of all, the behavior of the owner and management team – supports the achievement of the company’s goals.

Building this kind of culture isn’t easy and it can’t be done quickly.

It takes time build a workforce in which employees’ personal values match those of the company. And it takes time for employees to feel confident that they won’t be ridiculed if they suggest something new, or penalized if they take a risk and it goes wrong.

By the way, the book I found is called “Making Strategy Work: Leading Effective Execution and Change” and the author is Lawrence Hrebiniak. You can read more about it here.

 

If you enjoyed this post you’ll also enjoy So Tell Me, What Is Strategy?

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