Is Your Structure Evolving with the Growth of Your Company?

Is your structure evolving with the growth of your company? Is your structure properly designed to support both your internal and external strategy? In other words, do you have a structure best designed to serve your ideal prospects’ needs better than any of your competitors? Are you set up to acquire those ideal customers? If your business is like many of the companies I have seen, the answer is probably no to many if not all of these questions.

It Is Common to Underinvest in Administrative Functions

It is probable that you will not hesitate to invest in positions that you believe are critical to creating and selling your products and delivering your services. In fact, you may even overinvest in these functions. However, it is also likely that you underappreciate and underinvest in areas that are truly critical to your success. I often find companies will not have the right level of investment in functions and roles in human resources, finance, and technology. The last case is especially true where your business is not considered primarily technology related. You may justify that you only have a certain amount of resources and therefore have to make tough decisions. However, in many cases you are unable to see what not investing is costing you.

Not Investing in a Position can Cost you 26x the Salary

Too often you are so worried about how much a payroll is going to cost you that you do not realize what it will cost you not to fill a position. I had a client that had been reluctant to add the human resource function to their organizational structure. Their concern was that hiring the type of talent that would do the job well would cost as much as $75,000 in annual salary. Historically the function was absorbed as a secondary activity in everyone else’s job function. There was no one person accountable that could truly say they were one hundred percent focused on human resources. As a result, there was no consistent process for recruiting, the biggest issue for their company. Worse, with no one in the company that you could say was great at recruiting or selecting talent, the function was failing miserably. With everyone responsible and no one accountable, positions were not being filled, subpar talent would go unaddressed because of lack of ability to fill open positions, and a lot of strain was being placed on the management team.
This issue was a topic of discussion at every monthly and quarterly senior management meeting, and at each meeting it was concluded that a human resource person should be hired. However, the Chief Financial Officer carried too much weight in decision-making, was cost-oriented rather than growth-oriented, and the function organizationally reported to him. As a result, over the course of nine months the leadership team continued to allow this void to go unaddressed. Then, the perfect storm hit. Operations could no longer handle the sales volume it currently had, so sales had to start turning away business. The organization was now almost at a standstill because they failed to have the necessary people on the team. All of which could have been prevented had their human resources function been operating properly. The leadership team concluded that not spending the $75,000 cost the company about $2 million in cash flow.

Are You Unconsciously Stunting Your Growth?

It is common for leaders to unconsciously stunt their own growth by not evolving their structure to support that growth. You have to build it before and not after. Sometimes, you have the right structure but are not filling the positions with the right level of person or type of person. Continuing with the human resources role, one crucial mistake is not appreciating the role of Human Resource Manager and the many variations there are for this position. Not having the right person or people could stunt your growth. Many leaders either fail to fill this position with a competent trained professional, thinking of it as an administrative role, or they fill it with someone with the wrong skill sets.
In a firm’s early days, it needs someone that can increase the speed of recruiting, help avoid some critical miss-hires, develop the infrastructure for onboarding and training the new talent that is hired, and help build the systems for accountability. Having the right person in this function can accelerate your ability to grow and scale and takes a tremendous amount of pressure off the other leaders in your organization. Often organizations fail to hire because they do not want to make the investment. What they do not realize is that while there is not a financial statement line for failing to fill positions fast enough, failing to fill positions with the right people, and the cost of all the lost productivity in the organization from failure to fill this role, these are real liabilities with real price tags. Essentially having the right person can pay for itself at a minimum multiplier of 10. You can never recover the lost revenue and profit in the lost time from not adding the human resource person to your infrastructure in the first place.
Visit our business coaching page for more information or call  Howard Shore for a FREE consultation at 305.722.7213 to see how an executive business coach can help you run a more effective business or become a more effective leader.

3 Barriers to Peak Performance

Does your business operate at peak business performance? Have you built a business model that delivers high net profit and is scalable? Are you wondering how you might achieve better success?  After working with more than 100 companies, we are confident that we can improve your business in the following areas.

STRATEGY

If your company has a flawed strategy, you are likely suffering growth and/or cash flow issues. Determine if this barrier to peak business performance is a problem for your organization by answering these questions:

  • Can you easily and accurately predict that you will have faster growth rates than your competition for the next 3 years, and is that growth rate at least 20%?
  • Can you and all your leaders clearly articulate in one sentence your secret to how your business model produces significant cash flow?
  • Is it obvious to your ideal customer why they should choose your products or services over those offered by your competitors?

MISDIAGNOSIS

Are you curing the symptoms or the disease? If you are like most leaders, you may be getting a lot done but misdiagnosing the root of your problems. Determine if this barrier to peak business performance is an issue for your organization by answering these questions:

  • Do you spend too much time revisiting the same people and business issues without actions that cause them to be resolved?
  • Does unpredictable company performance in one or more function, role, or process of your business cause you a lot of stress, and have you failed to stabilize the outcomes for more than 12 months?
  • Do you have key performance indicators in place to know how well each person, role, and process in your company is contributing to your bottom line? Are you measuring this performance?

PRIORITIZATION

Another key to your ability to fully maximize success is creating a shorter list of the right priorities. Determine if this barrier is a problem for your organization by answering these questions:

  • How consistently do you achieve your monthly revenue and profit goals while also achieving the monthly milestones on your long-term initiatives?
  • Is everyone in your organization held accountable to 90-day personal goals and initiatives that are aligned to your company’s 90-day goals and priorities? Are those 90-day priorities tied to your annual initiatives?
  • How many people in your organization have more than three priorities during any given period of time?

CONTACT US

Let us help YOU take your business to the next level. Take the next step and contact us to learn more about your Business Coaching Program and how you might improve your answers to the questions above.

Setting Priorities Starts With A Good Business Plan

The trademarks of a great operation are how well its leader and team use time and set priorities. Too often people confuse activity with productivity. Setting priorities starts with a plan. A good plan creates focus, sets goals, creates alignment throughout an organization, and provides a means for accountability. Have you reduced organizational activity down to the minimum necessary to achieve maximum results? Are anyone’s priorities working at cross purposes to those of the organization? Are the organization’s daily activities properly aligned toward its goals? You are likely emphasizing the wrong set of priorities to your team if you don’t address these issues.

Two Indications That You Have a Problem

As a Business Coach, one of my essential roles is to assist you in determining the key components of your business plan. My experience is that many companies do a poor job of creating their plans, costing them serious growth in revenue and profits. If you are like most leaders I’ve worked with, your annual planning process may need some fine-tuning. Often, I find leaders spend too much time focusing their attention on goals rather than on the components of their plan that will cause them to achieve those goals. Two indications that you have a problem are:

  1. You do not find the need to visit your plan weekly, monthly and quarterly with your executive team to make sure you are following it.
  2. You are not consistently hitting your revenue and profit numbers on a monthly basis. Or, you are hitting those numbers but because of reasons other than your plan. In other words, you are growing by chance rather than by planned actions.

Creating a business plan helps to find the simplest path for your company to follow to produce maximum results. Lack of prioritization is by far the most common issue preventing companies from reaching consistent performance. While most leaders like to blame external conditions, it is usually an internal shortcoming.

What are the 8 Key Components of a Business Plan?

In order to accomplish focus, prioritization, alignment, and accountability, your business plan should clearly answer the following 8 concerns:

  1. Why does your company exist (purpose)?
  2. How are you different (unusual offering)?
  3. Who is the core customer that you will build your business around?
  4. What are your goals?
  5. Which critical number(s) will you elevate this quarter?
  6. What are your 3 to 5 essential annual priorities? Remember, these are the difficult changes that need to be made in terms of products and services, systems and process, and people.
  7. What are the 3 to 5 quarterly company priorities that will drive the annual priorities?
  8. What are the 3 to 5 quarterly personal priorities for every leader that aligns with the company priorities and functional priorities?

Call Howard Shore for a FREE consultation at 305.722.7213 to see how an executive business coach can help you run a more effective business or become a more effective leader.

Planning Your Annual Initiatives

Setting Business Priorities

Setting business priorities starts with a plan. A good plan creates focus, sets goals, creates alignment throughout your organization, and provides a means for accountability. Have you reduced organizational activity down to the minimum to achieve maximum results? Are anyone’s priorities working at cross purposes to the company’s? Are your daily activities properly aligned toward your goals? You are likely emphasizing the wrong set of business priorities to your team if you don’t address these issues.

Planning Equals Prioritization

Planning requires prioritizing business initiatives. This will help you to send the right message to your team, and prevent time and resource loss. As with most business plans, I recommend there be no more than five annual initiatives (less is preferred). Once you have your Critical Numbers, you can determine which business initiatives are most important to undertake, maintaining at least one annual initiative focused on just your critical number(s).

After meeting hundreds of business owners, I find that most fail to create a good business plan. The secret is in the annual initiatives. Many leaders confuse budgeting with business planning. Others confuse action steps with business priorities or initiatives. Others are not thinking big enough when creating their plans. Are you finding it challenging to create a good business plan? How often is there a difference between the plan you create and the actions your team initiates? How big is the gap between expected and actual performance? In my experience, poor business planning may cost you serious growth in revenue and profits.

Strategic Business Initiatives

A good business plan should help you determine your business priorities. These are the 3 to 5 annual initiatives that should move your business forward. Many business leaders ignore their weakness in this area because they fear impacting their financial goals. Business priorities are usually strategic in nature or are items that do not show directly in the P & L, such as strategic initiatives that strengthen customer loyalty. The natural tendency is to worry about today, which is why most strategic business plans are never executed.

5 Pitfalls to Setting Your Annual Priorities

Beware of the following common pitfalls while creating a good business plan and setting your annual priorities:

1. Poor Clarity 

A business initiative should be described with such clarity that a stranger would know what you are trying to accomplish and be able to hold you accountable.

2. Short-Term Focus 

Some business plans focus on initiatives that affect only the most immediate quarterly goals. Every business needs to make money and cover its expenses, but the problem occurs when you are so focused on the short-term that you are not able to spend time making the changes that are necessary for making quantum leaps.

3. Ignore the Trends 

I see companies that continue to ignore the fact that the traditional ways in which their customers purchase their products and services have changed. Blockbuster didn’t recognize these trends and has been replaced with forward-thinking companies like Netflix.

4. Accepting Your Weaknesses 

Knowing that you have weaknesses is not the same as doing something about them. Every company should make it a priority to seriously address, if not eliminate, at least one weakness per year.

5. Over Ambition 

Too often leaders see all the things they are unhappy with and try to turn initiatives into priorities. Generally, it is good practice to have 5 or fewer annual priorities. I prefer 3.

Contact Howard Shore for a FREE consultation at 305.722.7213 to see how an executive business coach can help you run a more effective business or become a more effective leader.

Customer Concentration Risk: One Of The Biggest Risks To Your Business!

You may be focusing on the wrong indicators in your company. Your revenue may be growing, your profit margins good, and your net profit plentiful, yet you may be close to impending problems. Customer concentration risk is one of the biggest risks to your business so you must make it an important part of your key performance indicators. You can measure concentration both in terms of market and customer, and both areas need to be monitored for the reasons in this article.

Why Should You Care About Concentration?

Issues relating to concentration come in many forms. While I want to address both market and customer concentration risks separately, there are some broad implications you need to consider.

  • Market Cycles – Every market has a cycle. If you are overly exposed to a cycle this will cause wild swings in your revenue stream.
  • Pricing – In many industries, the larger the order size the more control the customers have over pricing.
  • Customer Acquisition – The more happy customers you have, the easier it is to acquire new customers.
  • Capital – It is easier to attract and lower your cost of capital when you have less concentration risk.
  • Margins – There is a better chance of earning larger profit margins when you lower your concentration risk.
  • Operations – Predictable revenue allows you to generate cash and makes it easier to plan and invest properly in your support structure. Thus you can serve your customers in the right way.
  • Valuation – Buyers pay more for businesses that have lower concentration risk.

Customer Concentration Risk: A Sign Of Poor Health!

Customer concentration has caused many companies to stall and many to go out of business. In small businesses this can be a challenging issue because first customers make up sizable portions of total revenue, and many times there is no net profit in the business. It is important to work your way out of this situation as quickly as possible. A critical goal for every business is to have no customer make up more than 10% of revenue or profit. Eventually you want that number to drop to 2%. I cannot tell you how many of my clients with total revenue over $10 million violate the 10% rule when we first meet.

Violating the 10% rule is critical for several reasons, but really there is one issue. This one issue becomes fully apparent when a large customer goes away. Your business model becomes meaningless. In many cases, the operating structure you’ve built up can no longer be supported by the current client base. Firing people leaves the business lacking enough structure to support growth. The company struggles to grow, and net profit margin still appears unacceptable. However, what is now obvious is that your business was struggling to grow to begin with, and the business model was flawed.

If your business does not have a regular flow of new customers coming through the front door while it keeps customers from going out the back door, you have a business model problem.

Market Share Concentration Is An Important Leading Indicator!

Securing a threshold market share is important in order for your company to be recognized as a leader or key participant in any given market. However, having excessive market share can create risk to the company in the event that something happens to adversely affect that market. Being diversified and not overly dominant in a single market is important (with a few notable exceptions: e.g. Google dominates in some markets but is focused on being well-diversified).

As management, it is important for you to decide what is a realistic expectation in terms of how much market share you can reasonably garner for your company. Each incremental share can become expensive to acquire. Many times the only way to gain a larger share is acquisition after you have absorbed a certain amount. When that is done, organic growth becomes difficult without new products and services to bring to that market. Once you have fully served that market, it will become important to find new markets, or continued growth will become elusive or too expensive.

Call Howard Shore for a FREE consultation at 305-722-7213 to see how an executive business coach can help you run a more effective business or become a more effective leader.

What is the Purpose of a Business Plan?

Have you ever considered the questions, “What is the purpose of a business plan, and how critical is it to your success?” As a business coach, I have met and worked with hundreds of business owners over the years who insist that having a business plan is critical. I have found, however, that most are missing the whole essence of the business plan purpose.

What is the Purpose of Your Business Plan?

The purpose of a business plan is to successfully and strategically achieve your company’s goals and objectives. A business plan will align the organization by clarifying, prioritizing and improving the commitment to goals. The outcome of a good business plan is better results and an increase in profit.

But here is the real question, “What is more important to you when developing a business plan: the output, the process, or the outcome(s) of your business plan?” If you tell me it is the outcome(s) you are most concerned with, what do you mean by outcome(s)? Outcome is just another word for purpose.

Outcomes of a Business Plan

Here are examples of outcomes that leaders typically want from developing a business plan:

  • Better results (e.g. revenue or profit growth)
  • New ways of approaching the business so it does not stagnate
  • Improved commitment to goals
  • Clarified goals
  • Prioritization of goals and objectives
  • Creation of alignment across the organization
  • Creation of a process for holding people accountable

Why Do Business Plans Fail?

In my experience, if your business plan does not lead to the desired outcome, it is because you and your leaders have not given enough thought or commitment to the following three questions:

  1. What outcomes do you want to cause from your business plan?
  2. Is there a better process for going about your business planning?
  3. What output needs to be produced from your business planning process so that you can drive the outcomes you want?

Use a Proven Business Planning Process!

The One Page Strategic Plan created by Verne Harnish has all the key components of a business plan. With the business coaching services offered at Activate Group, we can maximize your team’s success and simplify the entire business planning process for you. Contact us for a free consultation to learn how we can help your organization, or check out the testimonials page for stories from other leaders we have coached.

Rule Number 1…Never Panic!

A CEO of a $100 Million company recently addressed a group of his peers and suggested that they should follow 2 rules in their businesses. Rule 1: never panic. Rule 2: If you violate Rule 1, don’t let anyone know. This is sage advice that too many leaders fail to follow and has many applications that may have a huge impact on your success as a leader.

Emotional Intelligence in the Workplace

How often have you worked with a leader who could not control their emotions or used fear to try to manipulate a response in others? How would you describe the work environment for those who reported to or worked around that person? Usually you will hear words like hostile and stressful. Never would these situations be described using positive words. Those who act emotionally will always justify themselves and put fault on others. If only some other party had done their job, acted differently, or not provoked them, they would not behave this way.

Those that are poor at controlling emotions are only choosing not to. It starts with your belief systems. A great example is a president I once worked for. He believed that when something went wrong in your area, you had to show emotion. If you did not, it meant you did not care like he did. Emotion meant caring to him. To everyone else, it meant that he was just a scary boss to work for. He was the last guy you wanted to bring bad news to. The messenger always got shot.

BENEFITS OF EMOTIONAL INTELLIGENCE

Having emotional intelligence results in the following benefits:

  • Greater trust.
  • More productive conflict.
  • Greater commitment to goals and objectives.
  • Fewer mistakes.
  • More creative environment.
  • Faster identification and resolution of problems.
  • Lower employee turnover.
  • Fewer safety issues.

EMOTIONAL INTELLIGENCE IS LEARNED

Control over one’s emotions is a choice and can be learned. Most people learned poor emotional intelligence from being around others that modeled poor behavior. It starts through mindfulness and intention. Do you have the intention of establishing and maintaining a positive work environment and relationships with the above benefits or the opposite? You need to be mindful of how you are feeling at any given moment and how your behavior may be interpreted by others. One must choose to control emotions with the intentions of the above benefits. You can get a coach or a mentor to help you through difficult times, and there are many books that can help you on this topic.

One of my favorite books is The Four Agreements, by Don Miguel Ruiz. In this book he identifies the source of self-limiting beliefs that rob people of joy and create the needless stress that I believe causes some of the emotional outbursts we see in the workplace. Based on ancient Toltec wisdom, The Four Agreements offers a code of conduct that can rapidly transform how you view situations and set your emotions free.

Finding Your Critical Numbers

Business Planning Tools

As a Business Coach, I have created and reviewed hundreds of annual business plans. I find many companies do a poor job of creating their business plans, which seriously diminishes their growth in revenue and profits. On the surface, these plans look like they have the right ingredients for success. However, a closer look shows that the leaders inadvertently led themselves astray. They then lose valuable time and energy, creating a profit leak.
As a certified Gazelles Coach, I help clients implement the concepts found in Scaling Up by Verne Harnish. The “One-Page Strategic Plan” is a key tool that everyone looks forward to using in our annual planning process. Whether your company uses this business planning tool or something else, the issues you must consider are the same. Only the presentation of the business plan is different.

Critical Numbers in Business

At the bottom of each of the “priorities” columns of the One-Page Plan is the “Critical Number” section. I have found that selecting the Critical Number may be the single most important decision in the planning process. The Critical Number is a key performance indicator that you have identified as the essential leading indicator for any given planning period.
Whether you are planning the year, the quarter, or your personal priorities, it is essential to pick the one or two Critical Numbers that must be achieved to drive all of the other desired outcomes. If you are not sure which Critical Numbers to select, you’ll find some clues by asking yourself questions like:

  • What is the key weakness in our business model?
  • What is the biggest weakness in our operations?
  • What is causing us not to gain customers?
  • What is causing us to lose customers?
  • What is causing our cost structure to be out of line with that of our competition?

The most common business number clients want to use is revenue. However, this is not a good choice for a “Critical Number.” If growth is an issue, you need to go deeper and find the leading indicator at the root of that problem. For example, are you not able to generate enough leads? Do you generate enough quality leads?

Example of a Critical Number

A great example of failing to identify the correct Critical Number is with a technology company that recently ran into trouble. This company had been mildly successful for years, achieved moderate revenue growth, and had great profit margins. But, this company always experienced inconsistent performance in its sales team. Revenue had always depended on a yearly home-run sale. There was no predictability in the sales performance. However, the company recently found that sales were more challenging and customers now preferred the products of competitors. After deep consideration, the company found it did not meet its number-one brand promise.
I had challenged this client a few years ago to put more specific measures around their brand promises. They had failed to do so, and this was now coming back to haunt them. In this case, believe it or not, their most important promise was that their product could do what it was supposed to do. My client failed to “get it right.” So we developed a way to measure the “% of known issues unsolved” within their technology. That became their Critical Number.

Does Your Business Need a Second Critical Number?

Once you find your Critical Number for your business, ask the question, “If we focus too much on this Critical Number, what could go wrong in the company?” If the answer is nothing, then you only need that one Critical Number. However, if you find focusing on that number hurts other areas of business, you’ll want to balance the first Critical Number with a second one. This will prevent you from unintentionally injuring your progress. In the case above, the company had a cash concern. They responded by focusing the sales team on closing a minimum number of quarterly transactions. They broke that number into 20 qualified leads that were already in the pipeline and needed to be accelerated in the sales cycle.
As with all plans, we recommend that there be no more than five annual initiatives. Once you have your Critical Numbers, you can determine what the most important initiatives are to undertake. A good rule of thumb is for three or four of those five annual initiatives to focus on addressing your critical number(s). If it does not take at least two or three, you have probably not challenged yourself enough in finding the right critical business number or are not focusing on the right annual priorities.

Improve Business Growth

As an executive business coach, I can provide you with practical business solutions to accelerate your business growth. Once you have completed your business plan, ask the following two questions to determine whether or not your job is done:

  1. Have you identified the one or two Critical Numbers that will improve next year’s results, and what is the measure that tells you that you’ve succeeded?
  2. If you complete your annual initiatives, how confident are you that you will have achieved number 1?

To learn how to improve your growth potential, contact Activate Group for a FREE consultation or by giving us a call at 305.722.7213.

How Do You Find Your Purpose?

If yours is like many organizations, you and your competitors are trying to serve a similar purpose to your respective clients. That is true if you look only at the surface. It is how you see the challenge of purpose that counts. Most times I find leaders trapped in a box. That box revolves around existing products and services and does not consider the problems and challenges of people they want to serve.

By finding your organization’s unique purpose, you can move with the changing needs of your customers and evolve your products and services. Too often business leaders are trying to force the external world to buy what they want to sell. What they fail to consider is whether what they want to sell is a real need, and whether there is already too much supply solving that need. If the need is already well served or over served, then pumping more supply into the market without identifying and addressing a new critical need for their buyers will surely result in a painful journey for them and their colleagues.

5 Lenses of Purpose

When working with leaders to assist in their strategic planning session, we work on defining purpose. A common challenge is to help the leadership team find and articulate their purpose. You may wonder how purpose is discovered. I believe you can find your purpose by looking through 5 lenses:

  1. Disrupt an Industry – Airbnb changed the lodging industry forever. They made a very cost-effective and easy way for anyone to list their space and to book unique accommodations anywhere in the world. By doing so they made traveling more affordable and accessible for many people.
  2. Uncommon Service – Provide service at a level that goes beyond your competition in a way that is essential to your target customer. The traditional companies I think of are Ritz-Carlton and Nordstrom. In a less traditional sense, think of Amazon, where you know you can go to their website and find almost anything, 24/7, at the lowest possible prices and have it delivered to your doorstep, in many cases the same day as you ordered it. And all of it done with a few keystrokes. Most vendors on their side will allow you send your purchase back for free if you are not satisfied. The challenge with service is that it is like an escalator that is always going down. Once you have delivered something considered extraordinary the first time, it becomes standard the next time. So you have to keep trying to improve your service levels every year to stay on top.
  3. Change the World – We have so many large societal and natural problems that you can address as a for-profit or not-for-profit. I am proud Board Member and Red Jacket Society Member at City Year, where we believe education has the power to help every child reach his or her potential. We recognize that children in high-poverty communities have external obstacles that can interfere with their ability to both get to school and be ready and able to learn. City Year helps with these challenges. On the for-profit side you have entrepreneurial mavericks like Elon Musk, who is trying to prove through Tesla Motors that electric cars could be better than gasoline-powered cars. The impact of such an innovation will have profound impact on issues like global warming and use of natural resources like fossil fuels.
  4. Excellence – There are always ways to change the features of products — increasing their speed, beauty, functionality, etc. No company is going to get it right with every product, but Apple, Samsung, Ikea, Dyson and 3M are companies that have produced products that have really stood out from their competitors in specific categories.
  5. Information and Communication – Technology has caused this category of purpose to explode over the last 10 years. Dominant in this conversation is Google, but you also have to consider Facebook, WeChat, WhatsApp, and the myriad of others that allow people to share information, find anything or anyone, share knowledge, discover and communicate.

I recommend that you look through these five lenses and determine which of the five you are really passionate about. Then ask “what purpose can we serve within that lens” within an industry or across industries that is not being served to the level that you believe it could or should be served. The key is to think big! Consider your purpose to be a pursuit rather than a destination. It will be a mantra that you and your organization will need to constantly improve and perfect.

Head over to our business coaching page or call Howard Shore for a FREE consultation at 305.722.7213 to see how an executive business coach can help you run a more effective business or become a more effective leader.

Is There a Difference Between Innovation and Disruption?

The Technology Leader Awards Committee of the Greater Miami Chamber, of which I am the recurring chair, met the other night. We were establishing the categories for this year’s awards when a great question arose. Is there a difference between innovation and disruption? It stimulated a spirited discussion among the committee members, and I realized that it’s a very important discussion to have when considering the strategy for your business. While we used the terms disruption and innovation in the context of technology, they can be looked at in broader constructs such as your business model. While one could argue that there is a difference between the two, my position is that disruption is a higher form of innovation. The reason is that all disruptors are innovations, but not all innovations are disruptors. The more disruptive the innovation, the higher the stakes and the value you can create in your business.

What Is Innovation?

In simple terms, innovation is just finding a new way of doing something. If you are running a business, it is developing ways to provide a product or service better, faster or cheaper. It is about improving every process with fewer defects, requiring less labor, increasing throughput, etc. It is about changing the usefulness of a product or service. From an even more important standpoint, it is about creating new demand and fulfilling a need that no one else is currently fulfilling. For example, our phones now go everywhere, serve as computers, calendars, watches, and many other things. It is about changing your online experience so that now you can order many products and get them delivered same day. Innovation is about seeing possibilities that others cannot see and making them happen.

Sustaining Innovation versus Disruptive Innovation

When we were discussing categories in my committee, we should not have been asking if there is a difference between innovation or disruption. The real question is “what is the difference between sustaining technologies and disruptive technologies?” While both are innovative, there is a huge difference and advantage to having both.

Sustaining technology improves a product or service in ways that the market does not expect, typically changing designs to address different consumer sets or by allowing a lowering of prices in more mature markets. A disruptive innovation helps create a new market or value chain and eventually disrupts an existing market. Disruption is much more substantial than sustaining innovation because it changes how we think, behave, do business, learn, and go about our day-to-day. Harvard Business School professor and disruption guru, Clayton Christensen, says that a disruption displaces an existing market, industry, or technology and produces something new and more efficient and worthwhile. It is at once destructive and creative.

Not All Disruption is Created Equal

The innovators’ dilemma is that not all innovation is created equal. There has been much innovation that has turned out to be worthless. In 2010, Time Magazine published a list of The 50 Worst Inventions Of All Time, here are few of my favorites:

  • The Segway – Give inventor Dean Kamen this: he’s a master of buzz. A closely guarded secret that was supposed to change the world upon its release in 2001, the Segway never brought about its promised revolution in transportation. Though the technology is pretty cool — very expensive gyroscopes make the thing nearly impossible to tip over (though George W. Bush found a way) — the Segway’s sales far underperformed vs. Kamen’s predictions. It lives on as the vehicle of choice for mall cops and lazy tourists, but the Segway’s best contribution might be as the vehicle of choice for failed.
  • New Coke – Marketers should have known — don’t mess with consumers’ sentimental attachment to a product. Especially when it’s 99-year-old Coca-Cola. The “newer, sweeter” version, introduced April 23, 1985, succeeded in blind taste tests but flopped in the real world. Phone calls, letters and rants from Coke die-hards flooded in and just three months after its debut, New Coke was removed, and the word Classic was added to all Coke cans and bottles to assure consumers they were getting their first love.
  • Airbnb – When disruption goes your way it can be enormous, such as the Airbnb.com story. Airbnb.com has changed the landscape for people that need a place to stay around the world. Airbnb is a website for people to list, find, and rent lodging. It has over 1,500,000 listings in 34,000 cities and 190 countries. Founded in August 2008 and headquartered in San Francisco, California, the company is privately owned and operated and booked more rooms than Hilton last year.
    Airbnb figured out how to enter the vacation rental marketplace without owning any rooms. Unlike traditional hotels, Airbnb scales up not by scaling inventory but by increasing the hosts and travelers and matching them with each other. It has no need for all of those employees and is not held accountable for the customer service problems you find in hotels, such as waiting in long lines for check-in. Its model runs on a marketplace platform where it enables transactions between hosts and travelers, all online. This is definitely an innovation you can categorize as disruption.

Value of Disruption

In today’s fast-paced world, disruption seems to be short-lived. It is critical that you do not go bankrupt trying to create your innovative idea and that you have plenty of capital behind you to take advantage of your position once you have the opportunity. Speed is also essential. Take the Airbnb example. Given that that the primary key to their success was a website to match hosts and travelers, scaling up quickly to have the largest inventory on a global basis with a lot of traveler traffic to their website was essential. Moving early and fast allowed them to build their brand and presence with no marketing budget. They built their entire empire through social media. The value of their innovation and how they approached is the exception and is what all disruptors should seek to accomplish.

Call Howard Shore for a FREE consultation at 305.722.7213 to see how an executive business coach can help you run a more effective business or become a more effective leader.

Difference Between Strategy and Tactics

Do you know the difference between strategy and tactics? Most leaders who think they are talking about strategy are really stuck in tactics. Many times it is hard to see the difference. A business owner called me today because he read “Mastering the Rockefeller Habits 2.0 Scaling Up” by Verne Harnish and was honest in admitting he was confused. When you think you are developing a strategy for your business, could you be confusing it with tactics?

Two Strategic Questions Every CEO Must Answer

Strategy is the plan of action to achieve a major or overall aim. While strategy can be used in many contexts, I recommend that you and your executive team be able to clarify your strategy from two vantage points.

  1. What is the critical strategy you will use to turn your business in to a cash-producing machine?
  2. What is the unusual strategy that you will use to cause customers to choose you over your competition without violating strategy number 1?

I recommend that each of these questions be distilled down to a one-sentence answer. The simpler you can keep your answer, the more likely it is that everyone in your organization can understand and execute on it. A good strategy clarifies the dos and don’ts. For example, a story Gazelles coaches use to help illustrate this point is IKEA. Their strategy could be described in the phrase “flat pack furniture”. They have chosen to ignore the desires of customers to have multiple, easy-to-access locations at which to shop, and IKEA also does not assemble or install their products unless you purchase those services at an additional cost. It is up to the customer to drive distances to get to their locations, complete the transport of the goods, assemble and install them. In exchange for these trade-offs, they have a significant price advantage over their competitors in the residential and small office furniture industry.

Tactics Are the How of Strategy

Tactics are the steps you take to achieve your strategy. The blessing (or curse) of the entrepreneur is that they are problem solvers. They get things done! However, many times they are not getting the “right” things done. Do you find that when you are having strategic discussions, you and your team very quickly jump to problem-solving? Too often this need for activity causes organizations to have to do 2 and 3 times the work required to achieve the desired outcome. Leaders will be proud of the outcome and not realize they unnecessarily worked everyone to death; including themselves.

So the challenge is to know which tactics matter and to focus them on the right problems, and that is why Strategy is so important. The Pareto principle (also known as the 80–20 rule, states that, for many events, roughly 80% of the effects come from 20% of the causes. Your job as a leader is to determine which 20 percent of the activities (tactics), when given the most attention, will have the 80% impact. This includes identifying those things you must “stop” doing.

Many companies achieve their numbers and not their plans. We can maximize your team’s business strategy. Contact us for a free consultation to learn how Business Coaching can help your organization, or check out the testimonials page for stories from other leaders and organizations we have helped.

Is Your Business Ready for 2015?

As 2014 is coming to a close, it’s time to consider “what’s your next step?” Is your business ready for 2015? This is usually answered by knowing whether you achieved your plans for 2014.

When I say “plans”, I am not referring to the numbers. I am talking about the plans to elevate your business strategically and operationally to new levels. Did you have business plans focused on elevating your business, and did you accomplish those initiatives? If you did, this would mean that you are now positioned to increase market share, expand your profit margins, and/or accelerate growth in 2015. If you didn’t, you have failed to ready your company for 2015, and now it is too late.

Most worthy and meaningful business-plan initiatives have their biggest impact in the following year. It takes time and money to elevate a business. So, if you failed to implement initiatives to fix your business-model problems, develop that new product, address your marketing issues, and so on, then you are now working towards 2016. Very early in 2015, you need to ask yourself, what are your next steps for elevating your company to that next level?

Action Plans Lead to Success

My article “Action Plans Lead to Success” discusses a primary reason why leaders fail to execute on those next steps. Does your team really have the commitment to see your plans through? Will they find a way to get your plans done in spite of their day-to-day challenges? Will you require that they develop action plans that create the road map to success? Will you and the other leaders hold each other accountable? Or will you leave plan achievement to the typical “hope and pray” method? In other words, will you and your leaders talk about what needs to get done and create a process to let you know whether or not the big priorities for elevating your business are getting done?

Aligning Your Organization

Everyone on your team should have the same priorities in mind. Of course people will disagree, but that’s what meetings are for. You need to get together and come up with a solid plan that everyone is comfortable with. In my article “Effective Meetings Have Conflict” I discuss how healthy conflict is good to have in meetings. You all cannot agree all the time, and you have to be able to create an atmosphere where your team is comfortable enough to share new ideas.

Think about your team now. Do you, your leaders, your employees and team members all have the same priorities to elevate your company to a higher level?

Many companies achieve their numbers and not their plans. If you need help elevating your business, please give me a call, Howard Shore 305.722.7213.

Are You Ignoring a Bad Business Strategy?

Are you ignoring a bad business strategy? Your business strategy is a determining factor in whether your sales “will” or “will not” grow faster than your competition’s. Does your business have an “unusual offering” that is critical in the buying decision of your target customer or not? Most businesses either have an “unusual offering” that their prospects don’t know about, or they don’t have one and are not facing it. Key components to a successful business strategy and your ability to grow sales are how well you understand your core customer, that you have an unusual offer for this customer, and that your strategy focuses on being best in the world at delivering that offer.

Great Sales People Cannot Erase a Bad Strategy

Are you evaluating how to grow your sales in the right way? When sales are not growing, it is usually the result of a bad business strategy. Most companies fail to recognize and address inadequate sales growth as a strategy issue. First sales management and the salespeople are blamed. This can go on for years. Salespeople come and go with no change in result! Next someone will decide it is a marketing problem. “We just need to do a better job of getting our name out there, learn to better leverage the internet to get leads, and everything will turn around.” When that fails, the economy becomes the culprit —too much competition, and so on. In most situations, the real dilemma is that leaders continue to ignore the fact that what they are offering the market is inadequate, and the marketplace has spoken.

Is a Bad Strategy Causing High Turnover?

Are you experiencing constant turnover in your sales force, followed by leadership complaining about how the salespeople keep failing? A bad business strategy results in sending good salespeople out to get slaughtered. In my experience, when you have a good strategy, even a bad salesperson can sell your product or service. When you have a good strategy salespeople line up at your door to work for you. Too often leaders are hoping and praying that hiring great salespeople will magically make a bad strategy disappear. So the real question is “what is the ‘unusual offering’ that the sales force can offer that will attract the customer segment you’ve defined as your prime target?” What is that offering that will get prospects to recognize you and say, “It is about time someone understands my needs. What forms of payment do you accept?”

What is an “Unusual Offering”?

“Unusual offering” is most commonly referred to as a “unique value proposition” — how you differentiate your product and services from those offered by your competition. I’ve chosen the word “unusual” instead of “unique” for a reason. While the difference between “unusual” and “unique” is subtle, I find the standard for “unusual” is much more achievable for most businesses. Unique offerings are very difficult to create and almost impossible to sustain for very long. However, the best businesses have mastered consistency in unusual offerings. For example, everyone in the fast food industry knows they are supposed to deliver consistent quality in food, fast, and yet they don’t. McDonald’s has a better track record in terms of moving customers through lines than other fast food restaurants. When it comes to customer service Nordstrom has been able to set themselves apart from competitors who claim high-quality service as their differentiator.

Why Your “Unusual Offering” Needs to Change

It is important to understand that your unusual offering needs to change over time with the market. For example, FedEx used to focus its business differentiator on when you “positively have to have it tomorrow at 10:00.” This is no longer a business differentiator because all of the competition caught up, and now customers expect that level of service. Even the post office can consistently deliver on that promise.

In my next article I will discuss how to develop your unusual offering. If you want help with fixing a bad business, strategy please contact us for a free consultation to learn how Business Coaching can help your organization, or check out the testimonials page for stories from other leaders we have coached.

Business Strategy Based on Knowledge Instead of Belief

Is your business strategy based on knowledge instead of belief? If you are like most entrepreneurs, you are not collecting enough external data when making your business decisions – and it will cost you millions over your lifetime. It may even cost you your business.

“Why?” you might ask. The answer is that too often we make decisions based on “belief” instead of “knowledge.” There is a very important distinction between knowledge vs. belief.

Knowledge vs. Belief

Knowledge is indisputable “fact”. Belief is your opinion about what result any given course of action will produce, and much of what you believe about your business many times is wrong.

Are you acting on facts that are no longer valid, or on beliefs that you have held for a long period of time despite contrary evidence all around? In my experience as a business coach, you probably are. Worse, when people present you with facts, you may be doing everything you can to hold onto your erroneous beliefs by finding any random inconclusive data to support them.

Communicating With External Sources

I spend more than 100 days per year conducting planning sessions. I watch leaders make decisions without collecting data from customers, prospects, or past customers. Even when they have collected data, they are not looking at and analyzing that data. Many times they are looking only for data that supports their existing opinions. Often the data they collect does not help them with their decisions because there isn’t enough, or what they have is anecdotal or too generic.

Are you collecting information on a weekly basis about people that have chosen not to do business with you, people that are customers, and people that you want to have as customers to really analyze why you lost customers? You will notice I chose “people” and not businesses, clients, customers, or any other word. You do business with people. They have needs, wants, problems, concerns, opinions, challenges, biases, etc.

The world is constantly changing, so these factors are always shifting, thus causing the need to continually collect the information to keep your offering competitive and relevant. Failure to do so results in business strategy based on “belief” instead of “knowledge.”

Start Improving Your Business Strategy With Customers

The obvious place to start is with your customers. You are probably thinking, “I know my customers” because you do business with them every day. It is a common mistake to confuse a system for collecting information with daily exchanges. Without a systematic process you will fail!

In your daily exchanges, you are concerned with delivering your product or service, and the customer is focused on receiving it. At best, you get anecdotal information and only focus on problems and challenges. During daily exchanges, your front-line staff is not thinking about the company’s business strategy or worrying about what data you need for making future business decisions. In many cases, a staff member who receives what could be useful information may filter it or not report it at all.

Collecting Unfiltered Information From Your Customers

Collecting unfiltered information from your customers should be a priority for every company. This is usually easier than you think, and the only reason it has not happened is that you have not made it a key priority. Benefits you can expect:

  1. Identify reasons to charge existing customers more for existing products and services.
  2. Identify new products and services to offer.
  3. Increase retention of customers that you did not know were at risk.
  4. Turn existing customers into a referral engine.
  5. Strategize based on knowledge instead of belief.

Customer Feedback

A great historical example of how this can work for you is when IBM had its top 200 managers talk to 5 customers and employees every week and review the information every Friday. This was an incredibly simple way to collect live market data weekly and then share it with key leaders in IBM. It helped increase sales, overcome customer roadblocks, and also added energy to the teams.

Questions to Ask Customers

We recommend you and each leader on the leadership team have at least one conversation each week with a key customer. We have found these four questions will provide you will a wealth of information:

  1. How are you doing?
  2. What’s going on in your industry?
  3. What do you hear about our competition?
  4. How are we doing?
  5. (Bonus Question… when appropriate) Do you know of anyone else that would like to be as happy as you are?

Need help improving your business strategy?

We can maximize your team’s business strategy. Contact us for a FREE consultation to learn how Business Coaching can help your organization.

How to Delegate Work to the Entire Team

Employee Delegation Process

Your team grows and advances based on your leadership skills and direction. Every team has a group of individuals that excel over another. As a leader you need to learn to count on everyone on your team and to elevate everyone from the level they are at. You can start today by delegating new tasks – but before you do, make sure you incorporate these important factors on how to delegate work more effectively to the entire team.

1. Selecting the Individual Employee or Team

Are you going to the same employees over and over again when delegating a task or project? Is it possible you’ve become too comfortable with specific individuals or teams? Doing so may demotivate other team members in the organization and can even compromise the performance of your key players. Your key players usually depend on support from the rest of the organization to get things done. You do not want your team members to turn against one another, a situation that would prevent the entire organization from coming together to achieve its fullest potential. Learning to count on every employee on your team can help!

2. Remember Why You Are Delegating Work

When you need help, who do you approach? Most likely you turn to your best players. While that makes sense, you also need to involve and delegate work to the entire team at some point. With each employee, consider why you are delegating (motivation, growth, or time management) a task, and match the appropriate tasks to that person’s capabilities. Delegating isn’t only about getting the job done. It’s also about the three important reasons that leaders delegate.

3. Assess the Appropriate Level of Delegation

Are you using the same leadership style for every employee on the team? Once you realize that not everyone is the same, your level of delegation should be adjusted based on the intricacy of the task and the person it’s delegated to. Delegation is not about telling people what to do and expecting them to do it. The person who delegates the work must exercise many different degrees of supervision and involvement. The more experienced and reliable the other person is, the more freedom you can give. The more critical the task, the more cautious you need to be about extending a lot of freedom, especially if the company’s financial future or reputation is on the line.

As a business leader, remember that it’s your job to count on everyone in your team. When you do that, your team becomes stronger.

Improving Leadership

Want to learn more? Find out how to improve your ability to influence others and your effectiveness as a leader with the premier executive coaching services at Activate Group Inc.

Contact us today for a FREE consultation at 305.722.7213!

Setting Deadlines for Your Team

Setting deadlines is the most painful and underappreciated part of delegating a task. Too many leaders give employees tasks without setting a deadline or asking what else they have on their “to do” list. This is a motivation killer. You must keep in mind that even though the task you are assigning is of great importance, your employees have their tasks too.

Do You Ever Say No?

Most people are trained to never say “no.” They have been wired to say “yes,” even when they know they already have too much on their plate. Often times, the delegator already knows this, but chooses to take the position of “not my problem.” In the long run, this can destroy trust and respect for the delegator and decrease employee morale, organizational productivity, and profitability.

How to Properly Delegate

When you delegate a task, you must sit with the person you are delegating to and make sure that realistic deadlines are being created. It is your job as the delegator to help your people be successful and not set them up for failure. If you are delegating to someone who has a history of over-committing, it is important to help reconcile commitments to make sure that the most important things get done first. Always make it clear that you are aware they have other tasks so want to make sure they are available to meet your deadline. Also always make sure the deadline is a realistic one. After all, when your employees succeed you succeed!

Call Howard Shore for a FREE consultation at 305.722.7213 to see how an executive business coach can help you run a more effective business or become a more effective leader.

Business Planning and Core Values Must Unite!

As you plan your agenda for your next business planning session, I hope you have carved out some time to discuss core values. If you study any great company, one that produces exceptional performance, you will find culture is a key component to their success. Great culture does not happen by accident, and thus it is imperative that part of your business-planning process addresses how you will build and nourish your firm’s culture.

CULTURE = CORE VALUES

Core values are the rules that when practiced daily by your employees shape and define your culture. Core values help top companies become more successful than their competition. While planning for our next quarterly meeting today, a CEO shared with me that out of all of the things he’d learned from me over the years, the most important lesson was “discovering, reinforcing, and building his team around core values.” It has helped significantly reduce a lot of the leadership team problems he used to have, reduced the amount of time he needs to manage the business, and he directly attributes increased business performance to rejecting people that did not fit his core values.

Core Values On Your Business Plan Agenda

Depending on your current business issues, you will need to tackle core values at your next quarterly or annual business planning meeting differently. Here are a few suggestions:

  • If you do not have clearly defined company core values, you will want to answer the question, “What are my core values?”
  • If it appears that there is inconsistency in the rules that people play by, and you are regularly frustrated by the lack of adherence to the rules you want them to follow, then you will want to answer the question “How do I do a better job of making sure everyone lives my core values?”
  • If you do not have a formal system of measuring performance around core values, you will want to answer the question, “How consistently is everyone living the core values?”
  • If you find there is a core value that is often bypassed, you will want to create a theme to reinforce that core value?

It Takes Discipline To Create A Company Culture

You must instill your core values in everything you do, every day, and in every way. The number one reason core values do not get ingrained in many businesses is that most senior executives do not live them. If the top three executives (e.g. CEO, COO, and CFO) are not role models, you may expect that the rest of their employees will not consistently exhibit the company’s stated core values.

Once you have developed your values, execution through spaced repetition and consistency is imperative. This is the most difficult and important part of forming your culture. Everything we have learned in life we have learned through spaced repetition. Using your business planning meetings as a platform for ideas, an organization must develop a system for all employees to regularly hear, see, and act the core values.

The One Page Strategic Plan created by Verne Harnish includes a section for core values and how to live them each quarter. We can help you design your business-planning processes, and the Four Decisions Process can help.

Improving Your Company Culture

Contact us for a FREE consultation to learn how Business Coaching can help transform your organization. Also feel free to check out the testimonials page for stories from other leaders we have coached.

Action Plans Lead to Success

Business Action Plan

Have you ever wondered why many business plans fail? Do you find that your organizations fail to achieve the key priorities in your business plan?  You are not alone! Most leaders, if they are honest, will admit that their business planning process is failing. Do you create an annual business plan and find that your team fails to follow through? Do you achieve your financial goals, but still fail to achieve the key initiatives? If you do, this is a major issue for your business and a solid action plan is part of the solution.

Failing to Elevate Your Business

As a business coach, I find many business owners and leaders asking me, “What is the harm in failing to achieve your annual initiatives if you achieved your revenue and profit targets?” If you have well-developed key initiatives, they will address the most critical weaknesses, problems and challenges facing your business. By achieving financial targets without addressing these issues, you have essentially failed to elevate your business to a higher level. In other words, you have unintentionally compromised future growth for the present. If you look at your annual initiatives, you often will find that as you address them, they have minimal effect on current year numbers but can have significant impact on future numbers.

Action Plans Will Keep You On Track

After conducting well over a thousand business planning sessions and reviewing results with leadership teams, a common thread between successes and failures revolves around the action plan. I have found there has been a 90% failure rate in achieving a priority for companies without an action plan versus a 75% success rate for companies with one. In the cases where there was an action plan but failure to complete the initiative, businesses made substantial progress on the priority.

Business Action Plans for Success

The following are reasons why business action plans are critical to your success. They:

  • Create a framework for accountability
  • Clarify responsibility
  • Help identify obstacles to success
  • Crystalize and align agreement around the path to getting things done
  • Provide deadlines
  • Foster commitment
  • Develop mechanisms to warn you when you are off course

How Committed Are You to Your Business Plan?

Is your business plan a decision but not a commitment? Most leaders will agree that they always get done what they are committed to. On a daily and weekly basis you deal with pressing issues, and you stay committed to addressing them. In my experience as a business coach, I do not see that same level of commitment to business plans. I believe the main obstacle is immediate versus long-term gratification. We can feel the immediate gratification of solving a pressing issue but can’t with working hard to address a long-term problem. However, by addressing the long-term problem, your benefits become much greater.

Consider a Business Coach

With the business coaching services offered at Activate Group, we can maximize your team’s success. Contact us for a free consultation to learn how Business Coaching can help your organization.

Call Howard Shore for a FREE consultation at 305.722.7213 to see how an executive business coach can help you run a more effective business or become a more effective leader.

Key Components of a Business Plan

As a business coach, one of my essential roles is to assist my clients in determining what the key components of their business plan should be. My experience is that many companies do a poor job of creating their business plans, costing them serious growth in revenue and profits. If you are like most leaders I’ve worked with, your annual business planning process may be broken. Often I find that leaders spend too much time focusing their attention on goals rather than on the components of their plan that will cause them to achieve those goals.

Two indications that you have a problem with your current business plan:

  1. You do not find the need to visit your business plan weekly, monthly and quarterly with your executive team to make sure you are following your plan.
  2. You are not consistently hitting your revenue and profit numbers on a monthly basis.

The Importance of a Business Plan

The main reason to create a business plan is to find the simplest path for your company to produce maximum results. A good plan creates focus, sets priorities, causes alignment throughout your organization, and provides a means for accountability. As a facilitator of hundreds of monthly, quarterly, and annual planning sessions, I have found that most organizations fall well short of achieving these objectives.

Lack of prioritization is, by far, the most common issue I see causing companies not to reach consistent performance. While most leaders like to blame external conditions, it is usually an internal shortcoming. The leadership team fails to say “no” often enough, chooses to chase fires rather than identify and address their real issues, and thus makes their organization work twice as hard to produce less.

The 8 Components of a Business Plan

In order to accomplish focus, prioritization, alignment, and accountability, your business plan must have the following components:

1. Core Values and Purpose

Tell everyone how they must operate (core values) and why you exist (purpose).

2. Sales Strategy

Clarify how you will make money.

3. Competitor Differentiation

Distinguish how you will be different from your competition.

4. Goals and Objectives

Be specific and measurable in terms of goals so everyone knows what success looks like on a monthly basis for the company.

5. Annual Priorites

Identify the 3 to 5 absolutely essential annual priorities – these are the very difficult changes that need to be made in terms of products and services, systems and process, and people so that you can accomplish the above.

6. Company Priorities

Identify the 3 to 5 quarterly company priorities that will drive the annual priorities.

8. Leadership Priorities

Identify the 3 to 5 quarterly personal priorities for every leader that aligns with the company priorities and functional priorities.

7. Action Plan

Create very specific action plans to make the priorities happen.

8. Accountability

Establish a measurement system so that everyone can be held accountable.

Improve Your Business Planning Process

With the business coaching services offered at Activate Group, we can maximize your team’s success and simplify your organizational processes. Contact us for a free consultation to learn how we can help your organization, or check out the testimonials page for stories from other leaders we have coached.

Focusing On The Core

I recently read a white paper entitled “The Focused Company”, produced by Bain and Company. As a business coach, I have found that while most clients understand the importance of prioritization and focusing, they fail to achieve either. Why does this occur?

As an owner of three businesses, I can appreciate the challenge. There are so many things that must be done in order to be successful in business. As a result, it can be hard to see what is crucial. The natural entrepreneur has the “shiny object” syndrome. We are interested in pursuing the “shiny object”, which distracts us from concentrating on the matter at hand.

Why We Fail to Focus

Business executives mainly fail to focus because of the way in which the human mind works. We operate more on a subconscious versus a conscious level. We tend to learn by repeated behaviors and allow those repeated behaviors to take precedence over conscious learning. In other words, our brains have us operating on auto-pilot. We may know consciously that the way we have behaved in the past is not working, but our subconscious knowledge still drives future behavior.

According to the Bain report, “… 80% of CEOs expect high levels of complexity over the next five years. Far fewer feel prepared to cope with it. A truly focused company, one that has cut complexity to the minimum, does not invest to win in every element of its business. It invests primarily in its core, the business in which it can outperform everybody else. A focused company does not try to appeal to every potential customer. It concentrates on the most profitable customers, those who it can serve better than any competitor can.”

Having a Focused Business Strategy

As many of my readers know, I am a certified Gazelles Coach. As such, we take our clients through a process known as the “Four Decisions,” which was derived from a well-read book, “Scaling Up” by Verne Harnish. The power of the “Four Decisions Program™” process is not producing the “one-page business plan.” While that is the output of the process, the true value derives from the discovery that occurs by going through the process.

We recently worked with a multinational public company that operates with several billion in revenue and has little-to-no profit to show for it. By working with their coaches, they found that the secret to achieving greater growth and profitability is predicated upon how well they are able to focus. The leadership team was stunned to realize that they had grown to several billion in revenue, and they were struggling because of their failure to have a focused strategy. Our client discovered that their focus had been on how much supply of product they had versus possible customer requirements. If you wanted to analyze their customer base and go-to-market strategy — there was none. As a result, they had no customer loyalty and were more susceptible to market pricing than if they had focused on a core customer and mastered those variables in their business that were important to the core customer.

Addressing Your Customers Needs

Now that this has been discovered, it will be important that their coach continues to help them focus products and services in a way that best addresses the needs of the customers that they believe have the highest profit potential and will stay loyal as a result of addressing these needs. We concluded that, if they do this well, they will be able to use up 100% of their manufacturing capacity by serving much fewer customers well. Rather than being supply-driven they will become customer-driven. To accomplish this, it will be important to design the organization in a way that supports making critical decisions rather than supporting existing processes. Also, by being customer-driven rather than process-driven will result in integrated process efficiency rather than functional efficiency.

In the end, companies must attack complexity in their business. Focus is a never-ending journey.  Business must focus the majority of organizational emphasis on a very few key areas that are costing too much or causing some type delay in order to best serve core customers. We also recommend that businesses should focus their activity by quarter, treating each quarter as a 13-week race. Race to improve one major area of your business. What you will find is that fixing one area will reveal sizable opportunities for simplification elsewhere for the next quarter.

Improve Your Business Strategy

Howard Shore is an executive leadership coach and founder of Activate Group Inc. based in Miami, Florida. His firm works with companies to deliver transformational management and business coaching to executive leadership. To learn more about executive leadership coaching through Activate Group, please contact us today or give us a call at 305.722.7213.

“The Greatest Business Decisions of All Time”

I am supporter of great books that I recommend to my clients and Verne Harnish’s new book entitled “The Greatest Business Decisions of All Time” is a great book that has influenced decisions that changed not only companies, but industries and even nations. If your venture is looking for some powerful ideas then this book is perfect for you. To read a free chapter please visit: http://bit.ly/RYTHWq

Please contact us if you want to learn about other books we recommend.

6 Essential Business Strategy Tools

Writing a business strategy can be daunting for anyone, even a seasoned business strategy consultant like yours truly. There are so many formats and so much information you could include, and you always end up questioning whether you’ve included too much or not enough. Admittedly, I have used multiple formats and metrics, and my style has evolved over the years, but today I can say there are six strategic planning communication “tools” that must be included in your plan.

1. Business Purpose. State the sole mission, or purpose of the company…in one word. I know, I know. This is a huge challenge, but it is an exercise that forces company leadership to get specific, visionary and inspired. It has amazing effects on the theme of the business strategy and unites the entire team behind one concept or idea. This one-word purpose will not change every year. Like the mission statement, it should only be revisited every 5 to 10 years, if it is written well.

2. One-sentence Strategy. What are you trying to achieve in the business right now, in one sentence? Like the “purpose” exercise, this exercise will help you get to the core of what your business aims to do, and communicate it in a concise and memorable way.

3. Brand Promise. What kind of relationship do you want to have with your customers? What problem do you want to solve for them? How will you make their lives better? This is what you want to describe in your brand promise, which will begin something like this: To be the best____ by _______. Or like this: To enhance our customers’ _______by _________.

4. Main Target Audience. Please don’t tell me “anyone is a customer”. Even if anyone could use your product it doesn’t mean they are the primary decision-makers. You need to identify one main target audience. You must do this in order to strategize which decision-maker pain points you will address, and how you will market and sell to them. In this regard, all audiences are certainly not created equal.

5. “Big Hairy Audacious Goal”. Business leadership is not for the faint of heart. It commands us to be bold and set our sights high for the future. What is the ultimate destination for your company? What does your Mount Everest summit look like? State it in a way that is inspiring—if Denzel Washington were describing it in the climax of a film, what would he say?

6. X Factor. What truly makes your product or service different? Be ruthlessly honest. What is the one thing you do that none of your competitors can claim?

When was the last time you revisited your business strategy? Does it include any of these tools?

Howard Shore is an executive leadership coach who works with companies that need leadership development and business management coaching. Based in Miami, Florida, Howard’s firm, Activate Group, Inc. provides strategic planning tools and management coaching to businesses across the country. To learn more about strategic planning and development through AGI, please visit activategroupinc.com, contact Howard at (305) 722-7216 or email him.

Business Planning Austerity: What’s your bad and your worse?

A quote from Evangelos Venizelos, Greek finance minister regarding the austerity measures they passed to avoid defaulting on their financial obligations:

“When you have to choose between bad and worse, you will pick what is bad to avoid what is worse.”

It made me think about business planning. During the Great Recession, plenty of companies had to slash budgets and overhead to stay afloat. These are uncertain times (just ask the citizens of Greece) and I think part of planning for prosperity is thinking through possible worst-case scenarios.

If you had to institute your own austerity measures to survive, what would you cut first? Have you at least thought about bad-case and worst-case scenarios if we hit another recession?

 

Howard Shore is a business planning expert who provides business strategy and consultation services. To learn more about how an executive coach, management consultant, leadership training, or business coach can help you, please visit his website at activategroupinc.com or contact Howard Shore at (305) 722-7216 or email him.

3 Great Resources for Writing a Business Plan

I get a lot of calls and emails asking about writing a business plan. There are so many books and articles on writing one it can be overwhelming, but there are three resources I like and recommend as good starting points.

1. Entrepreneur Magazine. There are oodles of great articles on their site, but I especially like this one on the Top 10 Business Plan Mistakes.

2. Small Business Association of America has a wonderfully thorough section on writing a good business plan. Plus, tons of other great tips and advice.

3. Activate Group blog. Okay, a little shameless self-promotion. But seriously, I have a great section on my blog with some down-and-dirty articles on business planning.

What other resources do you like for advice on writing a business plan?

Howard Shore is a business growth expert who provides business strategy and consultation services. To learn more about how an executive coach, management consultant, leadership training, or business coach can help you, please visit his website at activategroupinc.com or contact Howard Shore at (305) 722-7216 or email him.