Specialization

Specialization is being highly skilled in a specific field. In business, it can be a company or an area that focuses on the production of a limited scope of products or services. For an individual, it means one who is most suited (by virtue of their natural aptitude, location, skill, or other qualification) for a specific activity or task; they assume greater responsibility for its execution or performance or share their knowledge with others.

Do You Still Have a “Stay the Course” Board of Directors?

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Visionary LeadershipWe can’t think of an industry that is facing more change… turmoil actually…than healthcare. The Affordable Care Act. A fragile economy. Dramatic advances in research and technology. Heightened patient expectations. The tenuous relationship between healthcare providers and insurance companies. Hospital profit margins have been skinny for a long time. Make one bad decision these days and you’re gone.

In the 1990s, the primary strategy for most hospitals was to “stay the course.” If your hospital had been a general community hospital, you kept your locally focused board of directors, upgraded wings and services based on donor patterns, and struggled with the burden of providing so much charity care. Remember? One of the first generally acknowledged system-wide breakdowns was that hospital emergency rooms were replacing family physicians.

In the 1990s, if your hospital had already declared a specialty, investment and growth was incremental. A few major institutions declared specializations or leadership positioning and invested. Many perceived those bold moves as cocky at the time. But the investments made during strong economies have an impact on what happens to an institution during weak economic times. Think about MAYO, the Cleveland Clinic, Sloan Kettering, Johns Hopkins, and Massachusetts General.

It is very difficult for the leadership of “stay the course” hospitals to now step up, make very difficult decisions, commit to specializations, and compete. And often it is particularly difficult for the leadership of those hospitals to change the composition of their boards of directors and/or their executive teams.

Visionary leadership is needed. What would you do if you were the Chairman of the Board of one of the few hospitals located in the poorest/most dangerous city in the United States? Could you have envisioned, negotiated, funded, built, and promoted the new MD Anderson Cancer Center at Cooper Hospital in Camden, New Jersey?

Is your board composed of visionary leaders with connections, skills, and determination? Or are they “stay the course” incremental fearful followers?

The Least Effective Positioning Strategy During Cynical Times

Building Trust with Millennials

We ALL share this challenge.

Whether your company’s product is an alcoholic beverage, an app for smart phones or an automobile, today’s potential buyers are more sophisticated and skeptical than ever. They know about the logic/psychology/manipulation behind advertising messages. Millennials,in particular KNOW they shouldn’t trust anyone…be it big business, big government or big media.

Recently, Havas Media published findings from their surveys about 700 brands that reached 134,000 consumers in 23 countries. In the majority of the countries, 73% of the respondents would not care if the major brands went away. In the USA and Europe, the detachment from brands was a huge 92%. Consumers in Asia and South America expressed a bit more brand attachment, but other research suggests that it is quickly diminishing on those continents as well.

In response to consumer cynicism, some companies have decided to convey leadership. Experts endorse their products. Research is cited to prove their claims. They choose authoritative titles that include words like FIRST, WORLDWIDE or PREMIERE. Maintaining industry leadership is expensive, and skepticism makes it even more difficult to achieve. The “who cares” factor impacts ROI.

Others have opted to become challengers. Their marketing emphasizes how specific features are superior to a competitor’s. This helps the companies be more nimble in their marketing and potentially seem more current, but the challenger position can dilute the message and can remind consumers of childhood “tattle tales” (snitches or bullies).

Niche positioning has become more popular during these cynical times because getting into the minds of a select group of potential buyers seems more possible than trying to appeal to everyone. Niche positioning often leads to multiple or micro brands, more complex organizations and increased expense.

Maybe the least expensive positioning during skeptical times is follower. After all, skeptical consumers can quickly compare features and prices online. Why not opt for lowest price? This positioning isn’t easy either because millennials are not just your/our potential customers; they are your/our employees. In general, millennials are not seeking careers in companies that don’t honor patents, cut corners, resist innovation and seem boring.

There are risks associated with each positioning. In my opinion, the least effective option is to jump around. Why should millennial employees and consumers trust a company that says it’s a leader one year, acts like a challenger the next and claims to be a focused specialist (niche) the next?

Invest & Fully Commit if You Serve a Niche

Target marketWhen WPP purchased the Ogilvy Group in 1987, Ogilvy employees George Sard and Paul Verbinnen left to create their own PR firm. Today, Sard Verbinnen includes 110 spin masters and is the #1 PR firm in mergers & acquisitions. They have been involved with an astonishing 45 M&A transactions that totaled $71 Bil during the first half of 2013.

An article by Nick Summers in the August 12- 25, 2013 issue of BLOOMBERG BUSINESS WEEK reminded me where I had heard the name “SARD”.

Think about famous court cases involving Wall Street moguls. If you look closely at press photographs, you’ll see George Sard in the background behind Fabrice Tourre of Goldman Sachs, Stephen Cohen of hedge fund, SAC Capital Advisors, people from DELL Computers re. a possible takeover, and folks from AIR Products and Chemicals when they responded to hedge funder, Bill Ackman’s $2.2 Bil investment. That’s just this year!

There was Dick Fuld of Lehman Brothers in 2008, Nelson Peltz from the Heinz proxy battle in 2006, Martha Stewart’s insider trader charges in 2004, and Joseph Jett of Kidder Peabody in 1994. Sard & Verbinnen know enough about the Wall Street M&A community, they became THE experts in M&A crisis and reputation management.

Your company’s favorite target market might not be as contentious or volatile as Sard and Verbinnen’s. The stakes might not be as high in your favorite industry niche, but we can all learn from their journey. What would your company need to do to become THE TOP EXPERTS in your favorite industry niche?  And would you dig, invest, and commit enough to become THE GO TO company for that industry?  PR isn’t the only service niche industries need.  Could your company excel at sourcing or transporting products? Should your company recruit or train hard to find employees?

Founding The Service Industry Fund™ several years ago was one of those experiences for me.  Our idea surfaced from frustrations expressed by the owner/partners of growing service firms. Investment bankers are reluctant to do non asset based lending plus they have difficulty evaluating the scalability of service firms. Think about it, in the 1990s, most bankers would not have recognized Sard Verbinnen’s growth potential.

Are you looking for pain points in your favorite industry and stepping up to be the solution?

Inadvertently Choosing to Stagnate

Jeff and Jim have been running the 12 year old family business since their father (the Founder) suddenly passed away. At first, they had steady growth.  They are in a specialized field, so Jeff and Jim have learned everything they can about product formulation and packaging, customer service and retention, vendor sourcing, quality assurance, and distribution channels. The gross revenue was up around $20 Mil when the financial industry imploded in late 2008. Their revenue dropped to $14 Mil/yr. by early 2009, bottomed out at $10 Mil/yr in early 2010 and has been hovering there ever since.

Jeff and Jim trimmed their top heavy organization and budget.  They upgraded technology and continue to make improvements to operational efficiency.  When they disagree or experience some tension, the topic has usually been about new customer acquisition.  One year they tried throwing money at banner advertising and the website.  Another year, they went back to their roots in direct mail and local radio advertising. Last year, they dabbled in social media, so they now know what is meant by tweeting, liking, blogging, and following. Their customer retention numbers have remained fairly consistent (which is good) but their new account acquisition numbers have remained the same (which isn’t so good).

They don’t really know if the company’s plateau is due to market saturation, inadequate execution of marketing campaigns, shifts in buying patterns or market preferences, or hidden competition.  Jeff and Jim have concluded that they know their product and their customers…so they don’t understand why their business isn’t growing.  Their concern now is that if they bring in a marketing/advertising firm to look at their situation, all that will result from that is an expensive proposal for the services that are provided by that firm. It feels like a bad game of Jeopardy® to them.  “The answer is our services…what was the question again?”  Their reluctance to be sold anything is keeping them from obtaining an objective assessment of their opportunities, resources, needs, strengths, etc.  Where is the risk if the strategic consultant who evaluates their needs doesn’t provide the marketing services that will probably be indicated to get Jeff and Jim’s company growing again? 

Staying at the current size invites Jeff and Jim’s employees to coast, get set in their ways, and resist innovation and change.  They are in growing industry, so Jeff and Jim are getting further behind each year they choose to remain stagnant. My guess: this company needs a real President.         

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST®. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieving accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search.  2013 is Ambler’s 9th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr.) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.            

Marketing: Consistency, Analytics, Archetypes, Reinvention

The speakers at the annual convention of the National Speakers Association (NSA) focus their remarks on the needs of professional speakers, but there are always gems that can be translated for leaders of growth oriented midsized companies.

The “rock star of corporate CMOs,” Jeff Hayzlett, did a mega session on (surprise, surprise) marketing.  He provided ample evidence that a company’s investment in marketing must to be insistent, consistent, and persistent to get traction in today’s message-rich environment.

Steve Spangler, the guy who makes learning science fun, demonstrated the promotional value of YouTube videos.  The way he tweaks and retweaks the opening few seconds of his videos based on the analytics was powerful.  “DONE-NEXT DISEASE” is so prevalent these days. How many marketing departments in midsized companies invest countless hours on social media (including VLOGs) but then abruptly move on to the next project? How many people never dig deep into the analytics or refuse to change videos based on viewer feedback?

Sally Hogshead, the author of FASCINATE, helped each member of the NSA audience dig deeper about what makes him/her fascinating.  The 49 personality archetypes clearly have implications to branding for midsized companies.  Is your corporate culture and brand promise built around Anarchists? Advocates? Perfectionists? Mavericks? Trendsetters?

Jeanne  Robertson, this year’s winner of NSA’s prestigious MASTER OF INFLUENCE award, is a marvelous role model for the importance of constant re-invention.  Now in her 70s, she speaks to sell out crowds in theatres around the country. Leaders of a midsized business that is getting behind because they keep perfecting what has always been done could learn a lot from Jeanne.

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST®. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieving accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search.  2012 is Ambler’s 8th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.    

[video post] AND Instead of OR

AND Instead of OR

Relatives on my father’s side of the family have long been in the shipping business. They not only build huge ships, they also transport people and goods.  Today the RICKMERS family owned business is a major transporter of goods between Europe and CHINA. The RICKMERS Group provides maritime assets, management services and logistics.

As you can undoubtedly imagine, the family stories that have been passed down through the generations are fascinating, including stories about how they made the transition from wind to engine propelled during the industrial revolution. Somehow I can picture the artisans who crafted the wood, created the sails, and carefully placed the three massive masts on the schooners. Think about how different those people would be from engine mechanics, the folks who shoveled coal, and sheet metal workers.

The RICKMERS family had earned a great reputation based on crafting beautiful sturdy wooden ships.  That is what paid the bills, attracted employees, and kept customers coming back. Should they actually turn their backs on the business they loved and understood to take a chance on something so strange? The leaders of the enterprise wondered how quickly metal would replace wood and engines would replace cloth sails, and they cared deeply about their extended family of employees.  Could the artisans who worked in fine wood accept the changes and learn new skills? Would the company need separate workgroups with younger people applying the new technologies and the more experienced employees doing what they knew how to do?  But if they did that, wouldn’t their loyal employees be left behind at some point? Would trying to build both types of ships hedge their bets or be too expensive to sustain?

To this day, my relatives remain convinced that the decision to combine approaches helped the RICKMERS enterprise and the extended family to survive two horrific world wars…despite the fact that they were/are based in northern Germany.  Employees who had been forced to disperse when Hitler took over transportation companies returned to work together after WWII.  They are convinced that the family’s commitment to lifelong learning and mutual respect across generations has made a huge difference in their long term resilience.

So often we think that today’s technology driven changes in businesses are unique to today’s generation(s).  The scenario sounds the same to me.  I can’t help but wonder if more companies could value experience AND new technologies while embracing lifelong learning AND respect across generations? 

Do we really need to treat so many people like they are expendable?

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST®. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieving accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search.  2012 is Ambler’s 8th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.    

Launch a Second Enterprise or Create a New Department

George owns a content management website development company. Their capacity to attract and maintain programmers with sufficient experience in their content management software is simultaneously the optimizing and limiting factor for their growth. So, he is seriously considering opening a training program to build their pipeline of qualified programmers. An attorney quickly told George to start a second business.

The attorney is correct. A training company or school is a very different business from a website development company. This is especially relevant because George wants to open the school on another continent. But I was struck by the casual matter-of-fact tone of the attorney’s advice.

Yes, George can work with the attorney to file official papers to open a school. But before that makes any sense, George will need to have someone in place with experience opening and running a professional school. What credentials will instructors need to have?  How will recruitment and selection of instructors be handled? Who are the prospective students, and how will they be reached?  What would the curriculum be? How will competence be measured, a passing grade be earned, or certification achieved? What competition exists? What tuition is normal? What drop out and no show rates are common? What prevents graduates from deciding not to come to work for George’s company after they have been trained? What percentage of an instructor’s time can realistically be in the classroom? What will the hard costs be for facilities, work stations, telephones, utilities, etc?  How much gross profit and net profit should George expect from the school? Will the key person be a partner and eligible for profit sharing? How long would it take for the school to produce capable employees to achieve ROI on the venture?

His core business is growing. Recruitment is just not going fast enough. Search firms have produced disappointing results. George is VERY busy handling proposals and making sure that major clients are happy. Realistically, he won’t have time to oversee the launch of a second business right now.

It’s funny.  When we suggested that the content management website development company could establish its own recruitment department, George dismissed the idea because he thought that having a recruitment department would be too expensive and distracting.

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, talk show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™.  Ambler is in her 7th year hosting a weekly peer-to-peer-to-peer on line talk show at www.Business.VoiceAmerica com and www.growthstrategistshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

Pause Before Acquiring Smaller Firms

With so many companies owned by baby boomers, it can be tempting to grow through acquisition.  Especially if your company operates in a highly competitive market, why not eliminate your competition by buying them out? Pause first before you do that.

Take the example of internet marketing. Internet marketing companies seem to be on a buying (acquisition) frenzy these days. It’s a busy, busy space with thousands (or is it millions?) of competitors.  In too many cases, the acquirers hadn’t made basic strategic decisions and their companies are really hectic with too little growth in net profits.

Imagine that your internet marketing company has decided to become the one-stop shop for one (or two complementary) industry. Whether it’s hosting services, website design, search engine optimization, social media campaigns, or online audio and video broadcasts, you want to be the “go to” player for that industry.

You have opportunities to acquire a few smaller web hosting companies that happen serve a few up-and-coming clients within your industry space, and you also have a friend who can bring a few video production houses to the acquisition table.  It’s tempting to move ahead with the acquisitions, right?

Remember that your major strategies are vertical integration and industry specialization.  Even if some great talent comes with the acquisitions of the smaller firms, serving a diverse customer base would distract your firm from its focus on the one industry.

Maybe you should consider an asset purchase instead of an acquisition. The owners of the web hosting and video production companies are open to selling their firms for a reason.  They could have IRS leans, tired employees, old technology, or slow response times.

Better yet, consider stepping up your investment in your own sales force.  Which competitors are serving the key industry clients you want? Where do those competitors fall short? Why would your vertical integration (soup-to-nuts/one-stop shop) approach be more effective? Easier? Faster?

Who are the star account executives serving your target industry?  Are they stuck working for Presidents/CEOs who have taken a conservative, lay low, wait and see approach during this economy? What could you do to attract those star performers to help drive profitable growth of your vertically integrated industry specialized firm?

Stewardship of the Greater Community as a Growth Strategy

Will Morey Sr. had a small construction business in the 1950s and took a chance to start building properties for him and not just others.  He was one of the visionaries who could see that the Wildwoods (NJ) had great potential.  Dozens (or is it hundreds?) of L-shaped motels with swimming pools were built back then and Wildwood became a unique destination.  Hawaiian. Circus. Music. Caribbean. You name the theme.  A Wildwood motel had it. The Doo-Wop Era was good to Wildwood.

Will Morey’s sons (Will Jr. and Jack) have also had vision.  Like most resort areas, things changed for the Wildwoods.  At one point, so many young people visited the island that safety became a concern. The casinos of Atlantic City brought increased competition for adult visitors.  The attention spans of younger people shortened.  Family vacations at the Jersey shore now compete against video games, iPhones, and computers. The Morey’s have had to find ways to stay ahead of trends, ensure security, and help the leaders of the 5 towns on the barrier island work together for the greater good.

Early on, the skeptics laughed at the Morey’s when they proposed ideas like huge concert events or intertwined water slides and roller coasters on the beach. Receptivity improved as the Morey’s ideas panned out, and lots of people made money when they worked together. Residents were more trusting by the time a new convention center was proposed for the Wildwoods.  Inevitably, some people resented the Morey family as they became more successful.  But today, when leaders of the 5 towns debate significant decisions (like the pros and cons of height limits for new condo construction), one of the first questions raised is “What do the Morey’s think?”   Will Morey Jr. and his brother Jack would be the first to say that they haven’t always done everything right, but they know that they have consistently tried to keep the best interest of the entire Wildwood Island in mind.

Today, the Morey’s own and operate the 3 state-of-the-art amusement piers along the boardwalk in Wildwood, New Jersey.  They also own and manage four hotels in the Wildwoods, and as developers, they built 500 townhouses to establish beautiful Sea Point Village in the Diamond Beach area of the Wildwoods.

Give it some thought.  Do you have the greater good of an extended community in your mind as you consider ideas that could drive profitable growth for your business?  Do you have the Morey’s patience and perseverance? Are you willing to admit when you are wrong? Are you utilizing skills to make other people look good and not just yourself?

Log on to www.business.voiceamerica.com or www.TheGrowthStrategist.com to listen to my June 29, 2010 interview with Will Morey Jr.

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