Posts Tagged ‘owners’

Strategy, Productive Paranoia and Boiling Frogs

Tuesday, March 27th, 2012

A friend of mine, who is a social media strategist, talked in a recent blog post about what happens when companies hang on to a strategy for too long.

Jeremy Miller believes that they either:

  • Never live up to their potential (even if they make a profit and do good work).
  • Or they stagnate and decline.

The reason they hang on to their strategy, he says, is because it’s hard for owners and their teams to accept that they need to change when things – top and bottom line – are going well.

I know that’s true from my experience over the last 10 years at ProfitPATH – and also from  my corporate days, where I experienced it first-hand.

Jeremy mentions that, in the book The Lean Startup, Eric Ries argues that a business must constantly evaluate whether to persevere with their strategy or “pivot” to a new one.

But how do you know when to pivot or change a strategy?

I think the need to change (and therefore the timing) is driven by events. I gave some examples of them in early February 3 Times You May Need To Change Your Strategy

But, if it’s driven by events, is waiting for them to happen leaving things too late? Yes, possibly – maybe even probably.

So how do you anticipate events before they occur?

Ries’ theme of constant evaluation is echoed by Jim Collins, in his book Great By Choice. Collins’ research shows that one of the things the leaders of successful businesses do is instill a “productive paranoia” in their culture. They and their teams are always thinking about and discussing things that could change in their world – and how those changes would affect them.

This type of paranoia is productive because it gives successful companies the opportunity to consider their response – as opposed to reaction – to the events beyond their direct control.

But to be productively paranoid the owner and her team must refuse to succumb to 2 temptations.

The first is to simply be paranoid – in the conventional sense. Owners who do that are in a constant state of (over) reaction and are likely to change strategies too soon and too often.

Remember, there’s a world of difference between a response and a reaction.

The second is the temptation to become complacent. It is hard enough to accept the need for change when a company is successful. And the longer the success continues the more likely it will produce feelings of security, even invincibility and, that least attractive and most destructive of human characteristics – arrogance.

So what’s an owner to do?

No owner sets out to become complacent – that’s not the issue.

The issue is that it can be hard to recognize a problem when you’re right in the middle of it. In fact they even have a name for that.

It’s called the boiling frog syndrome.

So when someone tries to tell you something about your business which you think is wrong, misinformed, or even ridiculous, take a moment to do the “Man (or Woman)  from Mars” test before you dismiss them out of hand.

Don’t know what the “Man (or Woman) from Mars” test is? Call me and I’ll be happy to tell you for the price of a cup of coffee.

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Social Media Strategies – We Still Have A Long Way To Go

Thursday, May 19th, 2011

Our guest this week is Andrew Jenkins, Principal and Owner of Volterra Consulting, a strategy consulting firm specializing in emerging technology.  Volterra’s work spans e-business, wireless and social media with clients in Canada and Europe.

Where are we now?

Periodically, I am reminded of the fact that the ubiquity of social media is more a perception than a reality. By that I mean, because so many of my network and I are immersed in social media that I often think that everyone else must be too but then a comment or some data analysis will prove the contrary.

As I write this, I am in the process of developing a social media module for an executive education program focused on marketing. I had the opportunity to research the social media profiles of the attendees and the companies that employ them. They run the spectrum from no presence at all to being on most or all of the predominant social media platforms like LinkedIn, Facebook, and Twitter.

I also recently gave a presentation to a room filled with 100+ people from the cardboard manufacturing industry. Before diving into my presentation, I asked the room for a show of hands from those on Twitter, Facebook, and LinkedIn. The results were what I have come to expect. LinkedIn had the most respondents followed by Facebook and Twitter respectively. However, none of them had the majority of those in the room. In fact, they collectively comprised the minority.

Now I could suggest that this was because of the industry I was presenting to but I think that that is unfair. I think it has more to do with the age of social media and the fact that not everyone has the same familiarity with social media and where and how their personal and professional interests and business strategies can be helped.

Why Are We Here?

We must remember that LinkedIn is only eight years old while Facebook and Twitter are seven and five years old respectively. To put that into context, email is over twenty years old. As business owners and companies come to operationalize social media with their organizations and people come to realize the value and power that can be derived from social media then we will begin to see the tide turn more quickly.

Right now, there is a lot of hype coupled with a lot of skepticism. Most of the discussion is around social media in a B2C context but I also believe that growth in social media discussions in the B2B space will shift things from being a “that’s what people do in their spare time” to being part of our everyday work lives.

What Are The Benefits?

Some may be resistant to social media strategies in their everyday work lives but over time they will come to see and benefit from the collaborative nature and resource value provided by social media. Those are just a couple of the aspects that I reference when sharing the power of social media with people.

I have grown revenue, been invited to join boards, expanded my professional and collaborative relationships, and received promotional opportunities because of social media. Those currently make me an exception but I cannot help but think that they will become more commonplace in the future.

3 Surprising Strategies (Or Not)

Thursday, April 14th, 2011

At the end of March we emailed our quarterly survey to over 600 people in our database (see commentary on the November survey here).

We asked them 4 things.

To describe their strategy for this fiscal year; which actions they were taking to execute it; how they had gone about planning for the year; and what they did to evaluate progress at the end of the first quarter.

The first surprise – no one’s planning to retire.

Only about 5% of the respondents described their strategy as “planning for exit”.

There have been stories in the media for some time now about the number of companies which will change hands as baby boomers retire. Many articles talk about how far in advance business owners must begin to prepare, particularly if they intend to sell their company.

As a result we were surprised at the low number of owners planning for exit. (We’re even in the process of launching a new service to help owners get the highest price and the best terms possible when they sell.)

However, this may reflect other surveys, by e.g. the banks and CFIB, which found that only a relatively small percentage of baby boomer owners are actively preparing to bow out.

The second surprise – everyone’s staying home.

Just over 70% of companies said they were pursuing a growth/ expansion strategy. But entering new domestic or overseas markets ranked 8th in a list of 9 actions being taken to increase profits.

Once again we were surprised. This time by the relatively low number of respondents who said they would be entering new markets. The North American economies are not the ones which are expected to show the most growth in the next few years. This is a good time for Canadian companies to be expanding into export markets.

But the answers to this question could be influenced by the (small) size of some of the companies responding to our survey.

By the way most companies are using a combination of increased promotional activities, new strategic alliances and improved internal systems/processes. Many said they intended to increase their prices.

And the third surprise – someone’s not planning to follow through.

As you might expect, most large companies said they held a 1-2 day planning session with their management team/key individuals before the beginning of the financial year.

So did many smaller companies. But they appear not to have used the opportunity to develop action plans/budgets or specific targets for measuring performance.

Then we asked what techniques respondents used to assess their progress at the end of the first quarter. Many of the smaller companies which used planning at the start of the year now said that they used none of the quarterly follow up techniques.

There have been a number of research studies which have tried to determine why planning fails. One of reasons given for failure is the lack of follow through by management. It is easy to assume that the owners of smaller companies are likely to be more involved in day-to-day operations than owners who have management teams in place and so find it easier to overlook quarterly follow ups.

So, to sum up……..

There’s good news and bad news.

The bad news is that some of the companies in our database – even larger ones – appear to be overlooking a number of external and internal factors which are critical to success.

The good news is that it can all be fixed – if the owners are willing to try. We’re certainly willing to help.

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