This year I was fortunate enough to interview several bright, accomplished executive leaders of midsized companies who were also generous and candid during my weekly radio show, THE GROWTH STRATEGIST™. (Feel free to download your favorite shows from www.GrowthStrategistRadioShow.com.) I recorded a solo year end show and pulled out some of the gems these wonderful guests shared that seemed relevant to dealing with uncertainty. Here’s a few:
Peter Colella is the Managing Partner of M&A specialists, The Colmen Group. They started out in M&A and expanded into operational and turnaround consulting. Their competitors may have been seeing the same underlying problems in the business proposals submitted to them, but it was The Colemen Group that stepped up to improve success rates. Are there problems that seem to be taken for granted in your industry?
Julie Levi, the President of Progressive Promotions, reminds all of us about the importance of going deep into large accounts. They let “one offs” go about 10 years ago. Progressive Promotions is also a good example of a commitment to complete change. They hired. They changed the brand image. They invested in technology. If you are too tired to even imagine dealing with rebranding, remember that a key team member may need the opportunity to lead that process, get it done while taking it off your plate!
Barbara Hemphill is the well known author of THE PAPER TIGER, and the leader of the ALMOST PAPERFREE movement. Her interview reminded all of us that maintaining “a culture of innovation” can dramatically reduce the risks associated with uncertain economies. How much would it really cost you to build in time to turn customer complaints into new product ideas?
I enjoyed interviewing David Friedfeld, the CEO of ClearVision Optical. He reminds all of us that there are good ways to stake a stand. During periods of challenge, it can feel like you are being held hostage by another. Taking a stand requires preparation, but it is important not to ever let a major vendor, customer, your employees, or your family OWN you. Does it feel like anyone OWNS you and never paid to acquire?
Smith Yewell, the CEO of WELOCALIZE, Inc, exudes the commitment to running faster than your customers. Think of what they need to do to provide instant wonderful translation of multiple languages for companies on their client list, like Google. How fast are your customers moving?
The process of projecting revenue (or cost) can absolutely be the best opportunity to generate important questions, surface issues, uncover misunderstandings, and open communication. All of that is helpful, right? So pause for a minute and ask yourself how your company approaches projections.
If your sales executive is sitting by him/herself tapping out figures, see if you can prompt a more participative process…right now.
A great deal can be learned when a group of territory managers have an opportunity to share observations and propose ways they want to change the mix this next year.
Some great problem solving can result when executives ask their business development departments how they could drive aggressive growth (like triple quickly). Capture their comments as their worries are expressed.
Your CFO can become a marvelous resource when/if that office is asked to generate scenarios to facilitate growth, finance change, and reduce worries…rather than just expected to demand across the board budget cuts.
Some of our clients have benefited from starting with the folks in production when projections are made. So often companies repeatedly ask their production/client services to figure out how to cope with everyone else’s projections. Do you really know which customers your production department would LOVE to fire? Which projects do they prefer? Which projects do they know how to do? What generates the most profit?
This year, your projections could include a list of things your company will STOP doing.
I went to an award dinner a few nights ago. The event was well done. There was ample opportunity for attendees to meet and mingle. There were tables reserved for each of the honorees. The program book included display advertising from various companies congratulating award winners with whom they have conducted business. There were clearly written biographical sketches and complimentary photographs for each honoree. A professional photographer made a point of putting small groups of attendees together for promotional purposes (photo opps). The buffet had tasty food that could be easily cut and chewed so people could talk and not work at their dinners. The open bar featured a reasonable variety of white and red wines in addition to the usual assortment of beer, juice, soft drinks, and sparkling water. Each honoree had selected a person to introduce them and each pair had clearly spoken with one another prior to the event. The room was filled with movers and shakers. You can picture the event, right? In some ways, being invited to such an event is a compliment. Knowing some of the honorees is a good sign. Being recognized when you walk around would be great. And you would think that having the opportunity to introduce one of the award winners would be even better.
- One introducer repeatedly claimed that she was “such a close friend” or the honoree. It wasn’t believable after the third time and the introducer lost credibility. Plus, the award was not given because the honoree was “a friend” of the introducer. Who cares?
- Another introducer did so much name dropping that the audience could barely recall who was being honored. That introducer lost credibility. This is the same kind of person who scans the room looking for the highest ranking people and refuses to make eye contact with others on the way to the targets.
- A third introducer was clearly intimidated by the honoree and nervously read a list of accomplishments. Credibility was again lost because the introducer had thrown away the valuable position as a peer.
- A fourth introducer failed to recognize that this was the podium of an award dinner not a televised political convention. Plus she forgot that the honoree should be making a longer speech than the introducer.
- Frankly, it was a relief to hear the fifth and sixth introducers. The fifth introducer acknowledged the honoree’s industry leadership, conveyed genuine joy with the well earned recognition, and made everyone in the audience wish they knew the award winner.
- The sixth introducer conveyed a few stories about how the honoree had helped people (including her) to reveal the deeper positive essence of the honoree. That introducer retained credibility because the goal was to make the award winner look good not just flaunt that she knew the honoree.
Which introducers do you think attracted new business opportunities as a result of the approach to the task?
Reflect for a moment on how you carry yourself as you mingle at this kind of event. Ask yourself if you seem truly interested in what other people are saying. Do you remember that acting like you know people isn’t the same as having real friends and working relationships? When you chat over sips of wine with influential people, are you always asking for favors and focused on yourself or do you emphasize what you might do for them? Do you imply that you think you deserved the award more than the honoree? Do you act like you are above some attendees or intimidated by others thus forfeiting the most influential peer position? When you introduce a winner, can you get your ego out of the way enough to express genuine enthusiasm for someone else’s success?
These days, major corporations are holding onto large cash reserves because executives do not trust the government or the financial industry. The underlying causes of this lingering recession haven’t been resolved, so you really can’t blame them. But corporate sector resistance to buy, launch, and hire is clearly protracting the recession. Midsized companies are directly impacted because they [you] have smaller reserves, often rely on corporate accounts to set the pace of their growth or stagnation, and are dependent on banks.
What will change the pattern and release the strangle hold on the economy?
The traditional answer is that we should look to small businesses. Independent entrepreneurs will have creative ideas. They’ll risk their mortgages and children’s tuitions. Small business is the” economic engine”, right?
My hope is that leaders of midsized companies will make their [your] move, step up, introduce new ideas, and convince corporate strategic partners to work with them. That makes more sense, doesn’t it?
Why should we wait for bright ambitious people to resign from our midsized companies to become solo entrepreneurs and initiate change? Why should we lose their expertise, ideas, energy? Midsized companies have the needed infrastructure, reputation, and systems. There is a base from which to drive change, innovate, and move forward. Why should change always have to start from scratch? It’s so inefficient!
Look at your employees. Who HAD ideas? Who may become impatient waiting for you? Who is probably be contacted by search firms even during this tight economy? Who could become an equity player and help propose big ideas to your corporate accounts? Who would prompt you to kick yourself when you learn that he/she has left your business to become an entrepreneur?
Maybe you and your colleagues in your business are the folks who have higher intelligence, a creative flare, advanced education, certifications, licenses, and experience. Have you noticed … that isn’t enough these days?
Example 1: Customers used to appreciate your expertise gained through education and years of experience. They paid a fee or premium pricing for products for access to your advice. Today those same customers want to make their own decisions and purchases directly on line. And when they don’t know what to do or become flustered with technology, they still expect you to be there to provide advice and expertise. Only today, they don’t want to pay another dime for that assistance. They’ll complain if the assistance isn’t instantaneous, in their language, and very pleasant. Or they want to be able to return customized orders that they chose without your advice and receive a full refund…quickly. I swear, some folks think they should be able to just go on line and order a complex strategic plan uniquely designed only for their company.
Example 2: You are part of a chain of companies that have worked together to make things happen. Maybe you are a distributor of high end lighting fixtures, so you rely on architects and interior designers to involve you in their projects. But today, wealthy people want more control over their purchases and try to do major remodeling projects without architects or interior designers. More and more, they are going directly to builders who then must discretely figure out how to provide architectural and interior designer services without burning all of their past working relationships. How loyal will those same builders be to you as a lighting distributor? You could do a great deal of work finding products, pricing the project, etc. only to have the builder think they can take your spec sheet out and give the project to the lowest bidder. They have got to be kidding!!?
It may be time to stop acting AS IF things will return to the good old days. It may be time to stop complaining. It may be time to really look at what the end user customers want, expect, value, and will pay for. If you feel like your industry is under attack, you are not alone. And it just might be time for a new business model.
Even with all of the information available on line, physical presence and being accessible still matter for most service firms. So you’ve concluded that your service firm should expand and become a regional entity with multiple offices. Should you invest in executive talent for your headquarters and send your sales-oriented employees out into the field to attract new regional accounts? Should you leave your headquarters alone and recruit/hire branch managers who would then hire their own teams? Should you consider equity deals or franchising to attract more entrepreneurial leaders for the new offices? Should you strike a series of strategic alliances deals with complementary companies that already have visibility in your desired expansion area(s)? Or should you acquire competitors?
If you got tired just reading that paragraph, slow down and DO NOT start exploring which types of deals will be involved. There are great resources available to help you with the structure and logistics of various deals, but they only pay off once you are centered.
You probably need a bit more market research about the region. What is the size of that market…REALLY? Who are your best prospects? Where do they live? What do they read, listen to, and join? Whose advice do they take? Which firms are they currently utilizing? What is the difference between the results your firm achieves? Do you know for sure that the region NEEDS what you have to offer? What is your window of opportunity? How quickly should your expansion be accomplished?
You may end up with a combination of organic growth, acquisitions and equity deals. The best part is…you’ll know why.
Make sure you are good at market research and analysis before you lose yourself in deal making. My 30+ years has taught me that the negotiation of deals between people who are not centered leads to indecision so the process drags on and on and on. And those are the most expensive deals.
Think about all of the television and magazine advertisements that tell us to “Ask your doctor if (medication) is right for you.” Not that long ago, appealing to the “end user” was a very innovative idea to get specific drugs in the minds of patients and their doctors.
That approach is old news now because so many pharmaceutical companies now do the same thing. But imagine if your company was the one that did it first. You calculated the potential for new customers compared to the increased cost of the advertisements. You invested in training so your reps knew what to do and say. You figured out how to respond to naysayers. You considered legal and ethical questions. You had a contingency plan in case too many people could not move past being offended by the changed approach. You considered the risks associated with other companies pirating your marketing approach and your product formulations.
Patent and trademark infringement, product pirating, recalls, lawsuits, and negative advertising are all more prevalent these days.
We are all under tremendous pressure to be innovative. And most of us are under even greater pressure to preserve cash. I get it. But I find myself speaking up because I am seeing way too many companies risking insolvency as they launch new products without any allocations for a related contingency plan, training, crisis communication planning, and/or assessment of ethical and legal risks.
If you want to lose a lot of time, miss opportunities, and have money drip through your fingers, declare INNOVATION as THE goal. Demanding INNOVATION from your team can freeze folks in a quest for perfection. Valuable INNOVATION is about preventing and solving customer problems. It is not about proving that you can do something new and different.
INNOVATION is often about putting a few things together that are not normally associated with one another. The world of entertainment provides some clues. For example, many of the most successful singer/song writers have been people who create a unique sound by combining the elements of two distinct styles. Innovation. Ray Charles garnered attention when he combined gospel and blues. And he did it again when he combined blues and country. One of the reasons Carlos Santana has been successful for so very long is his capacity to combine Latin rhythm and sound with other types of music.
INNOVATION can be a matter of perception and a matter of marketing. Engineers in the auto industry come to mind. They can become so focused on the specific details of a model that they have long since lost their objectivity. Aspects of the car that seem obvious and simple to the engineers may be the INNOVATIONS their marketing departments will use to attract customers. And the more technically complex elements of the car may have been interesting to the engineers but not seem INNOVATIVE or IMPORTANT to customers.
Promising that your company is INNOVATIVE brings major responsibilities. The public now expects GE™ to lead the way to improve the environment. 3M ™ has been under intense pressure to create great products ever since Post It™ notes were introduced. And the woes of Johnson and Johnson™ related to recent product recalls are larger than life because their positioning has been about INNOVATION and trust.
Today’s insatiable demand for newer and newer products puts a great deal of pressure on even the most INNOVATIVE companies. No one is immune. Steve Jobs comes to mind. Look at the extraordinary measures he and others at APPLE ™ Corporation had to take to address problems with their “improved” I Phone™. We all need to work hard to raise the bar on our products and services…and be prepared for the fact that not every INNOVATION will be recognized, work, or pay off.
If your business feels like it’s on life support, look at your product development process right now. Working harder, laying people off, cutting expenses, and wishing the banks would loosen up a bit is not going to do it for you these days. Think about your reaction to my few sentences for some hints about whether you are in more trouble than you care to admit. If you shut down or felt like yelling at the page, your product development process probably needs resuscitation. Try not to assume you have to throw lots of money at this either. It’s behavioral, not financial.
One way to get back into product development when you are stretched thin is to convene short debriefing sessions within your company. Frustrated sales people need a safe place to vent anyway. Marketing folks who are running out of ideas need a chance to talk. Production-related employees who feel blamed for everything that goes wrong deserve special time. The accounting department must be getting tired of collection, whining, cash demands, etc. You all need this!
You know, before you even read the rest of this sentence that will be important for everyone to move beyond complaining within a short period of time. But you also know how to make that happen. Set an alarm clock. Assign a time keeper. Use an hour glass. Do whatever seems funny to some people and irritating to others. Capture peoples’ complaints in writing. Be careful not to become defensive or promise radical changes that you can’t deliver. Then shift to capturing the customers’ complaints, worries, excuses, and objections. There will be an overlap, some common ground in the two lists. Those are hints about where you may need to start. Why should we feel like the only strategy available to us these days to simply accept irritability and excuses as “the new normal”?
When petroleum costs were skyrocketing, a client of mine (an electrical wholesaler) used this technique. Their team decided to create a buying collective for their employees and best customers so everyone could afford gasoline for their cars and heating fuel for their homes. Think about that for a minute. A fuel buying group probably would not have been the most obvious new product/service to come out of a traditional strategic planning retreat, but it was a brilliant idea for them. It felt proactive and positive. Both the employees and the customers felt like someone cared about them, heard them, and most importantly, they no longer felt powerless. Today’s complaints and problems are our cues for tomorrow’s BEST products and services…and the process helps us all get unstuck.