Posts Tagged ‘ProfitPATH’

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.

 

If you enjoyed this post you’ll also enjoy Strategy Working? Then Don’t Make These 5 Mistakes

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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

Top Ten In 2014……

Monday, December 29th, 2014

The results are in!

Our top 10 blog posts in 2014 were:

1.   Adaptive Strategy – A Way To Profits In The New Normal? looks at an alternative strategy that is built on the 3 R’s (Responsiveness, Resilience, Readiness) required in a changing environment.

2.   6 Ways A Business Owner Can Influence Culture looks at the ways a business owner can develop a culture which will help increase operating profits and build shareholder value.

3.   6 Challenges Fast Growing Companies Face discusses the 6 challenges of execution which, if not dealt with, could prove fatal.

4.   3 Times When You May Need To Change Your Strategy explains when a company should review its strategy and what makes that review and any subsequent actions necessary.

5.   The Difference Between A Strategy And A Plan talks about the difference between strategy and planning and why it’s important to understand what these terms mean.

6.   6 Things We Can All Learn From Family-Owned Business puts forward 6 simple things business owners can implement to achieve better long-term financial performances.

7.  Use These 3 Tips To Make Your Next Critical Decision offers 3 things Ram Charan, co-author of “Execution”, says business leaders do when faced with a critical decision.

8.  5 Traits Effective Business Owners Share outlines some of the traits effective entrepreneurs have in common that contribute to the growth of their businesses.

9.  3 Reasons Why Consulting Assignments Fail and 3 Reasons Why Consulting Assignments Fail – Part 2 addresses the most common reasons why things can go wrong between consultants and their clients.

10. Strategic Planning – 3 Things That Are Wrong With It outlines how business owners make 3 mistakes that could destroy their company when they confuse strategy and strategic planning.

If you missed any of them, here’s another opportunity!

Santa Claus and VUCA

Monday, December 15th, 2014

The Holiday season set me thinking.VUCA and its impact on strategy

One of the traditions in our version of the Holidays is the letter/email from each child to Santa Claus, the determination if the child has been naughty or nice and, assuming the latter, the resulting delivery of gifts on Christmas morning.

To execute successfully, Santa manufactures or purchases the gifts then packages and delivers them.

These operations take place in his workshop and distribution centre, located at the North Pole and staffed by elves.

This much we know for fact.

This year, however, there’s a question around Santa’s strategy which is of fundamental interest to all strategy consultants.

What is the impact, if any, of VUCA (volatility, uncertainty, complexity and ambiguity)?

Academics and key figures in the consulting world appear to agree that VUCA exists. But that’s about it.

Because, while some say it has made strategy and strategic planning redundant, others argue it has no impact whatsoever on the need for an organization to develop and execute a coherent strategy.

It’s important at this point to determine Santa’s KPI’s.

The 2 critical performance factors are accuracy (the right kid gets the right toy) and on time delivery (the toys are delivered during the night on Christmas Eve). Quality is irrelevant because kids spend more time playing with the wrapping than with the presents.

It’s assumed that Santa has availed himself (I’m assigning a male orientation to the incumbent. A discussion of the suitability of other genders for the role is a topic for a future post) of all modern processes and technologies.

Lean manufacturing; warehouse management systems; mobile computing; performance-based compensation for elves; and video monitoring of child behavior, with NSA input on social media patterns; the use of ‘big data’ etc., etc., are all givens.

And Santa’s strategy is tried and tested over many years.

So the only variable is VUCA.

The only way we can be sure of the outcome is to wait until Christmas morning and conduct rapid research by monitoring social media trends and conducting structured telephone interviews with a representative sample of the population.

Now, I am not given to making predictions.

But, given the season, I am going to break this habit. I predict that Santa’s performance this year will be at least on a par with previous years.

Which means that VUCA will have had as little impact on his need for a strategy as it has on the needs of every other organization.

Happy Holidays!

 

If you enjoyed this post you’ll also enjoy 3 Techniques For Removing Bias From The Big Decisions

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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

Be Known For The Things You Do – And For Those You Don’t

Tuesday, December 2nd, 2014

In last week’s post I spoke about one of the reasons I started ProfitPATH 12 years ago.let your business be known for the things you do - and for those you don't

I wanted to create a company that did things differently to the way in which management consultants traditionally behaved.

To act as a guide, I made a list of all the things consultants I’d hired over the years had done that had annoyed me – and said we’ll do the opposite.

While I’ve often spoken about the list, I’ve never actually publicized it.

Now I’ve decided to change that. As a start, I thought we’d replace some of the outdated content on our current web site with the list.

I had to dig through some really old files but I found the original piece of paper on which I’d written the list.

Here it is.

We exist to help business owners achieve the results they want for their companies.  To do that we will:

1.   Tell clients when:

•  We don’t know how to do what they need. We will focus on what we do best.
•  They can do something by themselves. We will not bill clients for unnecessary work.
•  We don’t understand their requirements – even if it makes us look silly. We will not risk missing their expectations.
•  They ask us to provide “silver bullet” solutions. The Lone Ranger may have those – but we don’t.
•  We can’t provide what they need at the price or to meet the schedule they want. We will not “agree now, modify later”.

2.  Adapt and use tools and processes that we know deliver results. We will not use clients as guinea pigs.

3.  Design our services so that we can see the results of our work. We will not write reports and walk away.

4.  Find ways to link our compensation to the results of our work. This will be hard but we will not give up.

5.  Allow clients to terminate a project at any time – without a financial penalty.

6.  Always offer references. Where possible from clients of a similar size, in a similar industry.

7.  Submit proposals which contain absolutely no surprises – because they include only things we’ve already discussed with the client.

After seeing the list again I’m proud of how we’ve run the business.

However, I’m wondering what, if anything I missed.

What do you think?

 

If you enjoyed this post you’ll also enjoy The Elusive ‘Silver Bullet’

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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

Lists That Last

Tuesday, November 25th, 2014

It’s funny how 2 unrelated events often come together to produce a completely unexpected outcome.Stay focused on the list of your company's set principles to maintain consistent success

In this case, the first event is that we recently decided to undertake a long overdue revamp of our web site. As a result, I’ve been thinking about the changes we need to make to our content.

The second is that I’m re-reading Jim Collins’ book “Built To Last” which employs his now familiar technique of contrasting Visionary companies with less successful Comparison companies.

One of the differences between them is that the Visionary companies all had a well-articulated core ideology.

Collins credits that core ideology with keeping the company focused on a set of principles that it practiced consistently through the decades. That focus was a major contributor to the Visionary companies consistent success.

That set me thinking.

When I started ProfitPATH 12 years ago, I had 2 reasons for doing so.

One was to share the tools and techniques I’d learned working for some remarkable companies, on 3 different continents. This didn’t mean I knew more than other people. I just knew different things.

The second was to do things differently to traditional consulting companies.

In fact, I made a list of all the things the consultants I’d hired over the years had done that had annoyed me and said – we’ll do the opposite.

I’ve often spoken about that list to colleagues and clients over the years, and I try very hard to live by it every day.

But, apart from the original scrap of paper I scribbled it on, I’ve never actually written it down or publicized it.

Now I’m going to change that.

That list is going to replace the outdated content that inhabits one of the pages on our current web site.

There are, of course, a couple of challenges.

Those of you who know me will agree that I have really bad handwriting. So, even if I could find the piece of paper on which I wrote the list, I probably wouldn’t be able to read it.

Fortunately, I remember most of the items quite well as I have verbally shared them often. The others will come back to me as I’m writing down the former.

I’ll share the list with you next week. And you can tell me what you think before I put them on the web site.

 

If you enjoyed this post you’ll also enjoy The Elusive ‘Silver Bullet’

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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

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