Replace inertia with momentum

If your business has been essentially the same size for several years, inertia has probably become a much stronger deterrent to the growth of your company than any economic downturn.

Where’s the incentive for bright, ambitious younger people to want to work for your company? 

What’s the impetus for investing in new technology, systems, and approaches?

Why would a prospective customer realistically expect that you would be able to handle a big account/project? (trust you?) (believe you could?)

What will prevent you from becoming bored someday after doing essentially the same job (tasks) year after year after year?

If these questions resonate for you, ask yourself what size your company would need to be to

• be more exciting, less routine?
• require that new skills be acquired and new ideas learned?
• generate markedly increased net profit (income) for you and others?
• attract interesting well paying customers/projects?
• provide career opportunities for hard working dependable employees?
• increase your options for succession when the time comes?
• help momentum replace inertia? 

The transformation from inertia to momentum often involves expansion of the leadership team for an infusion of energy. Start there. Imagine the leadership team that you would need to truly break inertia. Do the math. What would their compensation packages add up to? What percentage of the company’s budget should be invested in executive/management compensation? OK. What size will your company need to be to have replaced inertia with momentum?

I’ll bet it isn’t incremental change like the +2-5% goals in many annual business plans.

 

Is Participative Strategic Planning Like a Rubik’s Cube®?

The President of one of our client companies recently opened a meeting with the observation that strategic planning feels a lot like playing with a Rubik’s Cube®. Remember that toy?  His hands turned in multiple directions as he reassured his team members:

“We’ll all be messing with just about everything in the strategic planning process from product development to marketing to production to accounting. But the good news is that we all know what the Rubik’s Cube® will look like in the end, and it won’t all come apart in the process.”

That was an impressive analogy. This particular team needed the reassurance. The company enjoyed a large market share for some time and hadn’t felt the need for repositioning strategy until now.

In many ways, a well-managed participative strategic planning process is a great deal like a Rubik’s Cube® because things won’t come apart while “everything is being messed with.”

However, the discovery and creative elements of participative strategic planning are NOT like the Rubik’s Cube®. Developing a positioning strategy early in the process can be equivalent to knowing the “secret” to the middle square on each side of the Rubik’s Cube®.  It provides a sense of direction, but you really are not completely certain about how everything will turn out when the plan is completed.

For this client, we know that they will be adding new products to their mix. Do we know exactly which ones before research and decisions are made? No. We know that they will be moving into a new organizational structure. Do we know the exact job description for each new role and the names of the people filling new positions? No. 

If your team members are the type of people who want to be provided detailed maps for their trip to __(place)__ and would preview the video tour of the city before committing to travel anywhere, increase the emphasis on exploration, discovery, and creativity so they can enjoy the journey. 

Why go through a participative process for strategic planning if all you want to do is copy what someone else has already done?  In this day and age, you would just be setting yourselves up to be BEHIND!

 

How Do You React When a New Competitor Comes Into Your Niche?

You just launched a new product aimed at your niche market. You thought you had a great head start, but today you learned about a very similar product being promoted to the same niche by a new competitor.

So what is your reaction?

It’s amazing how many companies overreact and immediately shift their marketing and pricing. If your marketing campaign featured the language of a market leader a few days ago, wouldn’t you look a bit paranoid if you suddenly shifted to “challenger” language?  Why point out the limitations of the competitor’s product? If they are relatively new, they may not recognize their limitations, and you will just be teaching them how to compete against you. Why automatically lower your price?  If you are really tempted to do that, perhaps you need to improve your product instead.

Maybe the “new competitor” could actually become a resource for you.  Having a new competitor in your niche market may be an indication that you should speed up your product development cycle.  If the competitor has demonstrated an interest in your niche and a capacity to produce a high quality product, maybe it’s time to learn about their capabilities.  Who knows? They could become a subcontractor, a joint venture partner, or a candidate for acquisition…with you still in the leader position within your niche.

 

PAUSE before Rolling Out the Results of Your Strategic Planning Effort

Congratulations! Your executive team has invested several weeks (perhaps months?)

analyzing  trends                                              generating scenarios

establishing significant ratios                      clarifying competitive position

adjusting pricing logic                                     selecting products to launch

creating targeted campaigns                       determining the best financing

modifying the organizational structure   updating compensation formulas

identifying new distribution channels     comparing CRM systems

declaring goals                                                  setting budget guidelines

How impressive!  How executive of you!

How boring!

PAUSE before you convey all of this to supervisors and line staff. You don’t have to impress them with your acumen.  You need to convey the direction, the priorities, and the themes in a memorable way.  It’s okay… no, it’s preferable if your strategic plan is conveyed in simple, direct language!

Think about the wording used in television advertising.  Getting your entire team on board quickly is “internal marketing”.  What is the slogan that captures the essence of where you are headed?  For what will your company be known when your strategy works well?

 

Should You Update Your Partnership Agreements Before or After a Strategic Planning Process?

When you ask most business attorneys a question like that, you get a stream of predictable double talk answers. 

“It depends on the relationship between the partners.“
“It depends on whether the business is growing or stagnant.”
“It depends on when the true business leader wants to take it on.”

The status of ownership/partnership agreements comes up fairly early in most significant business processes. It’s in the first wave of questions when we’re doing due diligence related to growth financing.  During strategic assessments, anyone would want to know who has bottom line authority, who has influence but is risk adverse, who is in a position to gain financially, etc.

Thirty-eight years as a growth strategist has taught me that cleaning up any holes in existing partnership agreements is important to do BEFORE opening the Pandora’s Box of real strategic planning. When it is unclear in any way who has the authority over strategic direction, pacing, investment, and risk – infighting can completely stifle the momentum, excitement, and power of real strategic working sessions.  It’s important to go into the strategic planning process with your hands untied.  Imagine if your strategic planning process opened your eyes and you became excited about diversification, global expansion, or online versions of your products/services. Then suddenly your previously silent compliant conservative “partner” threatens to torpedo the entire conversation because he/she doesn’t want to take any risk at all.

Recently, one of our clients needed to ask his sister to sell shares to him. He is the President and wants to grow the business. She doesn’t want to take chances. Her primary interest in the business is to provide an inheritance for her children and grandchildren, so structuring the buy-out based on current valuation provided some security for her. She wouldn’t be instrumental in making the next wave of growth happen, so this would be a good time to achieve her goals while untying her brother’s hands.

Cleaning up loose ends of partnership agreements solidifies relationships based on existing and past relationships.  Expect to revisit your partnership agreements, board composition, and succession plans again once your new/updated strategic direction has been articulated. 

So the answer is…before AND after.

 

Want to Expand Your Business? Expand Participation in Your Market Research

What would happen if you asked the guy who handles inbound phone calls and Internet orders at your company to come up with 20 questions that he would like to ask customers? Could those questions be compared to and combined with questions proposed by an outside research firm? Could his outbound calls to a random sample of customers serve as a control group to compare the similarities and differences in responses?  Would that employee become more interested in the results and recommendations resulting from the market research?  Wouldn’t your business save a little money utilizing an employee for some of the research instead of relying completely on outside assistance?  Would new skills and a sense of upward mobility result from such a process?  You know the answers, so why are so few companies taking this approach…especially during tough economic times when customer input is sorely needed, employees are looking for some positive sign, and cost efficiencies are important?

Could another employee be asked to surf the Internet to look for potential target markets with characteristics that are similar to those you currently serve?  With some parameters and guidelines, fairly junior employees enjoy such a process.  Could the employee who leads upgrading your products be asked to do some research to deepen the bench of qualified vendors so your business can act more quickly when the market research suggests a new direction?  Could one of the mission-critical production employees be asked to find, read and select techniques from books about how to change an interruption-based culture?  Could various employees sit in on a conference call with outside experts when they recommend studies, websites, and other resources?  Who could go on field trips to take a look at how complementary companies are addressing challenges similar to yours?

These things don’t happen when top leaders feel insecure and are more focused on retaining control than finding ways to grow their enterprises.  Ask yourself: has the recession increased your resistance to participative approaches to market research and strategic planning?  The good news is…it’s curable!

 

Shake Up Your Routine to Lift Off of a Stubborn Plateau

These days, flat growth can be explained by the slowed economy, limited access to credit, etc.  If you need an excuse, you have it, but what is your excuse if your business was already flat a few years ago?  Second or third generation leaders of family-owned businesses are particularly susceptible to being in the same job doing basically the same thing the same way year after year. I’ve seen bright, well-educated business owners lost in micromanaging insignificant details while their businesses stagnate.

If you wonder if this is happening to you, consider reducing the number of days you are available to work in the current business. That one change could permit your managers to feel more respected, step up, make decisions, reduce their reliance on you, and prove their worth.  The availability of a few days/week could help you look at other business opportunities, confer with bright colleagues, learn new skills, move beyond “Head Project Manager” to become a real “President”.

A change of scenery could encourage you to break old habits.  Interacting with different people could encourage you to think at a higher level and consider bigger opportunities.  Many times, just working from a home-based office doesn’t provide enough change to break old habits, introduce a new routine, and invite “Presidential” behavior.  If you have been in the same peer-to-peer discussion group for the past five years, consider a change to a more ambitious or direct group.

It is so easy to live “below the radar” where no one questions you, no one expects any improvement, and the situation permits you to coast.  If you have hit a plateau, are already bored, and know deep down inside that you will wonder why you wasted so much time…consider establishing an advisory board composed of people you truly respect.  Is it time for a wake up call?

 

Cast Off Your “Too Scared to Fire ANYONE” Anchor

There’s a moment during strategic planning retreats and/or think tank events when executives get excited about the possibilities, become focused on opportunities, and generate great ideas to really PULL customers toward their companies.

Then there is that glassy eyed look that follows. “Oooh… can WE really do that?” 

These days, you might assume that the PAUSE… the DOUBT… is related to a limited access to credit or concerns about the economy. Right?  Well, I’ve noticed that when executives are completely honest when they rank order the possible barriers to success, #1 is their recognition that their team simply isn’t ready to implement the strategies that would drive profitable growth. 

So then there is the inevitable discussion about training and stepped-up coaching.  But then there’s a second glassy eyed moment as executives realize that their long-term (habitual) reluctance to fire ANYONE is their heaviest anchor.

We all understand the many reasons: the stories about wrongful firing suits, the costs associated with the bad PR from chatty disgruntled former employees, the distraction factor of documenting infractions and putting people on probation. Some of us are suckers for potential. Many of us remain loyal to employees for things they did many, many YEARS ago.

But it is like employers aren’t noticing when they are located in an “Employ at Will” state. Plus an inability to fire ANYONE is a HUGE disincentive to other employees who really want to achieve, learn, and try new things.  Unemployment rates are high. Competitors are laying low and not even trying to grow. Layoffs carry much less negative stigma than ever. Is NOW the time for YOU to cast off your “TOO SCARED TO FIRE ANYONE” anchor?

 

Collect and Address the List of Worries and Concerns

What would you do if you had recently invested time and money on

• obtaining absolutely current market research that revealed exciting opportunities despite and because of the economy
• recruiting, selecting, hiring, orientating and training two new executive positions
• upgrading management positions, including replacement, training, increased compensation and incentives
• participative strategic planning
• upgrading the physical plant for a few key locations
• updating your operating systems
• organization-wide training in marketing, sales, and customer service

Follow through!!! Right???

Yes, but what if you have recently seen doomsday reports in the newspapers and on television? And what if you attend an industry conference and the speakers suggest that this is the time to play everything safe?  And what if one of your long time friends just got audited and the IRS is after him?  And what if your executives and managers are feeling a bit overwhelmed or scared?  And what if you’re in a regulated industry and the government doesn’t feel like your friend at the moment?

YES…still follow through!!!!

AND

Compile a list of everyone’s concerns and worries.

Why not?  If folks are too worried, they might not follow through when you need enthusiastic execution on the plan.  A great strategy weakly implemented is set up to fail!  There may be a legitimate question your strategic plan missed.  Why not address it now?

Include board members, investors, executives, managers, line employees…everyone! Then ask your executive team to make sure that the strategic plan appropriately addresses each concern.  Write up the answers.  Make sure everyone knows you are listening, care, and are being thoughtful.  There may be a few areas where you are taking a calculated risk.

Collect worries. Make sure the strategic plan addresses each one. Convey how the strategic plan answers each concern.  Get back to people in a timely way.  And move on to implementation.  This is not the time for analysis paralysis or timidity.

 

Stop Waiting for Teleseminars – Learn from Your Peers While on the Treadmill

Here’s a suggestion for busy Presidents/CEOs of midsized businesses (especially $20 – $200 Mil/yr) who

• feel that your time is STILL your scarcest resource
• recognize the need to feed your mind, learn, stretch, grow
• find relevant teleseminars but then can’t participate because they run at the same time you are involved in important meetings
• know you need to exercise but are going to the gym less often
• have been tempted to attend an Inc. Conference on Growth… 

Why not download free online radio shows onto your iPod to take to the gym? Take shows featuring interviews with your peers on the Inc. 500 list of the fastest growing privately held companies who are sharing success tips about the growth strategy-of-the-week. 

Most of you, the readers of my blog and Twitter tweets, know that I have been hosting a peer-to-peer-to-peer online radio show The Growth Strategist™ for 5 years now. We rotate through various geographic locations, industries, and growth strategies.  One week, my show might feature an interview with the President of a Singapore-based retail company that has grown through franchising. The next show may be with the CEO of a Kansas City-based manufacturer sharing success tips about how they’ve grown through acquisitions. 

Many of the guests on my show are on the Inc. 500 (or at least the Inc. 5000) list of the fastest growing privately held companies. They are bright, ambitious, somewhat intense, fabulous leaders….just like you. The show is #2 in its category and attracts over 180,000 listeners. 

I have LOVED hosting the show.  How can the discussion of growth strategies between people who actually live the journey EVER be boring?! 

I open each show with some tips on the growth strategy-of-the-week gleaned from my 30+ years of experience as a growth strategist helping midsized companies earn and keep their spot on the Inc. 500 while increasing their profitability. Many of you know that I have also won over two dozen national and statewide “entrepreneur of the year” awards for the resilient growth across 3 recessions of my own midsized businesses. So I share examples from my own journey as well. 

It’s been 5 years so my website, www.TheGrowthStrategist.com, and the station’s website (www.business.voiceamerica.com) now have over 200 downloadable shows (podcasts if you prefer) available for you to download onto your mp3 players and take to the gym.  Our research shows that most listeners do that or they listen to the show between 11:00 pm and 1:00 am as they do their last round of email “after the spouse and the kids have gone to sleep for the night”. The only reason you would break from an important meeting to listen to the live broadcasts each Tuesday at 11:00 am EST would be if you wanted to ask a question.  Most listeners send emails with questions to me and my guests following the shows. It’s NOT like traditional radio broadcasts where listening at the exact time of the live broadcast represents your only opportunity. 

Why wait for teleseminars when you can download 5, 6, …sometimes as many as 10… timely peer level radio shows focused on a growth strategy you are using or have been considering, including

• specialization
• diversification
• acquisitions and mergers
• franchising and licensing
• new products/new markets
• joint ventures and strategic alliances
• equity deals and IPOs
• several others….

I did a series of shows earlier this year about ‘HOW TO CHANGE YOUR BUSINESS MODEL” and another on “THE CHANGING IMPACT OF REAL ESTATE ON STRATEGIC GROWTH DECISIONS”. 

You can suggest topics, offer to be a guest, or recommend someone else you think might be an interesting guest.  The toll free number is 1-888-Aldonna and the email is Aldonna@AMBLER.com.