Learn How to Make Better Decisions as a Leader

Leadership and Decision Making

How is Decision Making Affecting You as a Leader?

Do you consider yourself an emotional or a rational decision-maker? If you are like many leaders I have met in the entrepreneurial ranks, you’ll think you are both. Some of my clients would just argue that their emotions are rational.

Regardless, what I would like you to consider is that your decisions may not be as good as you think they are. Depending on your circumstances, you may need to use different approaches to your decision-making process.

Leadership Tendencies Affecting Good Decision Making

Do your tendencies get in the way? I find that many leaders are capable of making good decisions, but their leadership tendencies get in the way. This can include:

  • Proclivity towards intuitive decision-making
  • Bias toward action
  • Failure to listen to others
  • Listening to unqualified people
  • Looking for people that share their opinion
  • Failure to use available data
  • Not understanding the complete set of questions that should be answered in order to make the decision

Many outgrow these tendencies after they lose enough money and/or relationships. However, too often they don’t make enough adjustments, and many do not realize they have the above tendencies. The problem is we do not keep score of wrong and right decisions. Many times, it is impossible or too costly to find out whether a decision we made was the right one.

Revenue and Decision Making

Do not confuse your ability to earn wealth with good decision-making. I have encountered many wealthy executives that would be great candidates for reality television shows because of the way they go about decision-making on a day-to-day basis. They would have crowds laughing for days.

Picture an investment broker that advises you to purchase 10 stocks. Nine of those stocks lose money pretty badly, but one makes a lot of money, so the portfolio shows a profit. Would you want to keep that broker? My wealthy reality TV candidates would try to convince you they were great stock pickers because they made money.

Questions to Consider to Avoid a Bad Decision

In any given day, a leader makes many decisions. Here are some questions that I suggest you consider before you possibly make another bad decision:

  • What is the goal of the decision?
  • What are the consequences/costs of making a bad decision?
  • What should my role be in this decision?
  • Do I (we) have the expertise to make a proper decision?
  • What criteria should we use to make a good decision, and how will we rank and weight each item’s importance?
  • Are there proven tools to help us make this decision?
  • Who else should be involved in this decision, and what role should they play?
  • How much information is appropriate for this decision?
  • How much time should I spend on this decision?
  • How long am I willing to wait to make this decision?
  • How many alternatives should be considered?

Contact Howard Shore for a FREE consultation at 305.722.7213 to see how a business coach can help you make better decisions and become a more effective leader.

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.

Building A Winning Team – Making Decisions Stick

Many leaders complain that they hate to go to meetings because they are non-productive. It is common to find that decisions taken at meetings do not stick.
Instead, group decisions at meetings become the subjects of post-meeting lobbying. Some team members call separate meetings to try to filibuster the decision. Others take a passive-aggressive approach, deciding to hope the decision goes away. In most organizations the latter approach works best because accountability is limited – by not doing your part, you might get a slap on the wrist in the worst-case scenario. In the end, the company loses precious time and money.

The above issues are found in varying degrees in every organization. Pat Lencioni has really captured this well in his book, “Five Dysfunctions of A Team”. This leadership fable identifies team behavioral factors that will reduce the results in your company. I think the book is a must-read for any organization that depends on teamwork to make money.
Company teams come in various forms. It starts with an executive team to run the company. Then it takes teamwork to: create loyal customers; deliver your product or service; manufacture your products; ship your products; execute a special project; and so on. The more employees and customers you have, the more complicated this gets because you need more teams, and each employee may have to play on more than one team.

I will give you a snapshot of the key issues I took away from the book, and then I want to encourage you to read the book for yourself. I believe that by addressing the five dysfunctions Pat Lencioni identifies, you will find that the decisions you make in your company will stick. The dysfunctions work in a pyramid, just like Maslow’s hierarchy of needs. If you have not addressed lower level need with an individual, it is futile to address the next level need. Pat’s five dysfunctions are as follows:

  1. Absence of Trust
  2. Fear of Conflict
  3. Lack of Commitment
  4. Avoidance of Accountability
  5. Inattention to Results

Absence of trust, the first dysfunction, is the hardest to overcome. It starts with the premise that one must have confidence among team members, believe that one’s peers’ intentions are good, and that there is no reason to be careful around group members. In most teams, too much time and energy, and too many good ideas are wasted trying to protect one’s reputation by managing behaviors, comments, and interactions because of a lack of trust that was created in previous interactions. People are reluctant to ask for help and to offer assistance to others, causing lower morale and unwanted turnover. To address this dysfunction, a leader must demonstrate vulnerability first, and make sure this is genuine. Leaders must encourage open dialogue in meetings, look for situations where people engage in behavior that demonstrates lack of trust, and bring it out in the open. They need to have everyone openly discuss the strength each team member brings to the team. They also need to describe the behaviors that lead them to be distrustful and get them to address those behaviors. No one, including the CEO, is immune from this exercise. One bad apple will spoil the batch.

Fear of conflict is the second dysfunction. Addressing the first dysfunction makes it much easier to address the second. If the first exercise succeeded, team members are mentally prepared to engage in passionate discussion without the fear of being perceived as vulnerable or the fear of reprisal. It means that one can speak up and not worry that someone is going to judge them, question their worth to the team if a particular comment is not one of their best, or interrupt them until they finish their thought. They know that while their idea may not be accepted, at least it will be heard. What is important here is to focus on discussion and resolving issues more quickly while avoiding personality-focused and mean-spirited attacks.

Many people have been trained to launch personal attacks when they are not getting their way. The leader has to make sure that this behavior is not tolerated, and that topics focus on the issues that need to be resolved. If everyone is not weighing in and openly debating and disagreeing on important ideas at your meetings, look for passive-aggressive behavior behind the scenes or back-channel attacks. What organizations find is that healthy conflict saves them a lot of time and leads to much better decisions. The role of the leader is to practice restraint and to allow for conflict and resolution to occur naturally.

The third dysfunction, commitment, is often missing in many organizations. As you can now see, it likely resulted from a lack of healthy debate in meetings, which led to false consensus and weak buy-in to the decisions. By having productive conflict and tapping into everyone’s perspectives and opinions, everyone can confidently buy in and commit. Even those who voted against the matter at least know their issues have been heard and considered. Now commitment is required.

Great teams know the danger of seeking consensus and certainty and find ways to achieve buy-in from the rest of the team. The leader’s role is to demonstrate decisiveness and to communicate awareness and acceptance of the fact that some decisions may turn out wrong. He or she must push decisions around issues, as well as adherence to schedules that the team has set. The leader must cascade messaging to key people in the organization to support follow-through on decisions so that everyone is clearly aligned.

The fourth dysfunction, accountability is also a team effort. Team members need to hold each other accountable in daily, weekly and monthly meetings when their behaviors and actions do not support the goals set by the team. Peer pressure is the most effective and efficient means of producing performance. A team should create clear standards, using leading indicators to enable each team member to know that they are doing their part. The more detailed the actions plans and the more specific the leading and lagging performance measures are, the easier it will be to hold people accountable. This is where many teams fall down. It is the leader’s role to demand these details and to allow the team to serve as the primary accountability mechanism. However, when the team does not serve this function well, there should be an external measure so that they team cannot run too far off course and eventually fail to achieve its goal(s).

The last dysfunction, inattention to results, seems obvious but is very hard to manage. This is where ego and self-preservation get in the way of company goals. If teammates are not being held accountable for their contributions to the collective results, they will likely look to their own personal or departmental interests and advancement. By having good measures in place to align an individual’s incentives with that of their team goals rather than their personal performance, an organization can produce better results. The role of the leader is to set the tone to focus on results. A problem will arise if team members sense that the leader values anything other than team results or demonstrates anything different in their own behaviors than what is expected of the team. It is important that a leader’s conversations with individuals are consistent with focusing on organizational results and not encouraging selfish behaviors.

Many organizations will find that they can significantly increase their results by improving the performance of their teams. Pat Lencioni has done a wonderful job of identifying these five areas that clearly compromise the efforts of most teams.

Howard Shore is a business growth expert that works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To contact Howard Shore please call 305.722.7213 or visit our business coaching page for more information.
Used the “Synopsis of The Five Dysfunctions of a Team” by Randy Mayeax, of Creative Communication Network for www.15MinuteBusinessBooks.com as additional reference material.

How to Increase the Value of Your Business Before You Sell

How to Increase the Value of Your Business

Is selling your business a future consideration? If you are like many business owners, you know you will one day sell your business. Too often owners take time for granted. They always believe they have more time to consider how best to prepare their businesses for sale. The flaw in their thinking is that they really do not know whether the best time to sell is this year, next year, or 50 years from now. I have heard so many stories from people who were offered a lot of money to sell their businesses and turned down the offer, only to find five years later that they could only attract fractions of that offer. It is important to understand how to increase the value of your business before you sell, and it’s equally as important to determine the right time to sell.

3 Primary Reasons For Buying A Business

The primary reason for buying a business is return on investment. They will pay what they consider is a fair price based on 3 primary factors:

  1. Does the purchase remove a business barrier?
  2. Does the purchase eliminate competition?
  3. Is the purchase a strategic fit in terms of :
  • Geography
  • Customers
  • Employees
  • Tangible and/or intangible assets

7 Ways to Increase Valuation

You should build your business as if it might sell tomorrow. By continuing to improve and monitor the following valuation levers you can increase the value of your business and possibly identify when it is time to sell:

1. Profit Growth Rate

Profit Growth Rate – how predictable and consistent is your profit and revenue growth rate? The higher, more predictable, and consistent the pattern, the better. These are two crucial measurements that determine the health of your business. Great businesses are able to reliably predict their profit growth rate, and are rewarded handsomely when they are ready to sell. Understanding, monitoring, and improving the predictability and consistency in your profit growth rate will help increase business value for the right sale.

2. Industry or Market Segment

Industry or Market Segment Attractiveness – What does the future look like? What do experts say about it? How is your company uniquely positioned to get its fair share? Positioning your business in a growth industry and targeting the right market segment will be an important factor in the continued success of your company. Being in a growth market will improve the valuation for your business as buyers will pay more for companies in growth markets.

3. Low (Relative) Market Share

You want to be seen as a business leader, but you don’t want to be seen as a risk because you have saturated your portion of the market. As a business effectively continues to grow and increase its market share, the more profit potential they have.

4. Customer Concentration

Customer Concentration – a company must not be overly dependent upon a single customer or customer group. Customer (or revenue) concentration can be one of the biggest risks to your company’s profit. No customer should make up 10% or more of your revenue. With the right business strategy and tactics, you’ll be able to bring that number down to 2%. Having a low concentration risk will increase your business valuation, making buyers more likely to pay more.

5. Recurring Revenue

Recurring Revenue – this is one of the most favorable ways to increase business valuation because it supports consistency and predictability. It also allows for focus on decreasing delivery costs to customers over time – thus increasing profitability through time. The higher the level of recurring revenue, the more you will increase the value of your business before you are even ready to sell.

6. Company Size and Location

In terms of revenue, employees and geographic locations play a role in salability. Buyers see smaller companies as more of a risk than larger companies. The same goes for geographic location. If the business is in an area with a dwindling economy or even a lower population than one with a larger / steadily increasing economy, they automatically see this as a risk to potential profit that they more than likely won’t be willing to take.

7. Management and Executive Team

Management – seasoned and experienced managers in the industry with a track record of success are very important. It is hard to find great management talent. Skilled employees and executives often times will know exactly what it takes for the business to see growth in profit, making them key aspects to a new business owner. Buyers want to see a team of employees who are willing to work hard and are dedicated the overall success of the business. Hold on to your top-performing players and offer them incentives to want to be with the company long-term.

Need help with increasing the value of your business before your sell?

An executive business coach can help increase profit margins, improve predictability, and increase valuation to properly prepare your business for sale. Call Howard Shore, one of the top business coaches in the United States, for a FREE consultation at 305.722.7213 to see how an executive business coach can help you run a more effective business and become a more effective leader.

Cost of Hiring New Employees

It is not often that I hear my business coaching clients use “hiring new employees” and “strategy” in the same sentence. In fact, before hiring me and beyond the typical tactical issues with employees, it was rare for human resources issues to be considered during strategic planning meetings. I recently met with one of my clients regarding challenges they encountered in recruiting sales personnel, and it became obvious that their tactical issues were really related to their strategic model for hiring employees. Worse even than their tactical issues was the fact that it was costing them a huge amount of money to hire new staff members.

Commonly Overlooked Costs Associated With Hiring New Employees

Before discussing the strategic issues of my Florida coaching client and how we wrestled them to the table, I want to clarify what I mean by the “cost of hiring new employees”. Here are some costs you probably do not measure, and they are the big ones:

1. Hiring Success Rate

The lower your hiring success, the more people you have to hire to get a full set of performers. For example, if you need to add 10 people, but your hiring success rate is only 25%, you will ultimately have hired 31 people before you have the 10 people that will perform at your required performance levels.

2. Hiring & Performance Standards

Most companies are lowering their performance standards rather than raising their hiring standards. They get frustrated by their inability to recruit the right people and take whatever they find available. The lower performance requirements result in excess employees, lower customer service, more mistakes, lost opportunities, and lost customers.

3. Leadership Time

Leadership has to divert significant time to interview extra people, manage superfluous people, and address the performance-related issues of substandard employees. This brings far less value to the company than the leadership activities they would perform otherwise.
Unfortunately, there is no separate income statement line item for the above. In every company I have visited, the financial statement impact is huge when we start trying to quantify the above numbers. This is what I am referring to when I am concerned about the cost of hiring new employees:

How Business Strategy Impacts the Hiring Process

As I was working with one of my customers in Miami, they were explaining to me that 2,000 candidates had applied for 10 open sales positions over a 6-month period. They ended up being very disappointed with their results. Very few candidates were qualified. They had tried hiring a few new employees, several of whom never showed up for the first day, and, of the ones that did show up, they were not pleased.
They were looking at all the time that was passing and how much money the employee hiring process was costing them. They were losing money on sales that were not generated by having an open position, sales that were not generated by people that could not perform, and the cost of management time applied for recruiting. After reviewing their situation, we realized the situation was a strategy issue.

Considering All Factors in the Employee Recruitment Process

When developing a strategy, you need to consider the people decisions related to that strategy. In every company, there are several key positions that must be filled quickly in order to grow your business. In my client’s case the need was for additional salespeople. If your business model requires a unique individual (in other words, someone with a skill that is very unusual, hard to find, hard to attract, etc.) and you will need a lot of them to grow to the levels you want, you have a bad strategy. The solution to this is to change the model so that you will be able to staff your model.
My coaching client and I looked at the cost of hiring problem and realized that he was not considering all the factors in the recruitment process and addressing them wisely. In their case, they wanted people to work on a commission-only basis, be highly experienced in my client’s industry, and be a seasoned salesperson. It should not have been a big surprise that none of their ideal candidates were biting. The people that were biting required different internal support systems, and the company was not set up to help them be successful.

Understanding the Costs of Hiring the Employees You NEED

So here is how we attacked the problem. We broke down candidates into 3 groups: No Experience, Sales Experience/No Industry Experience, and Sales Experience with Significant Industry Experience. We then discussed the implications of risk, internal system support, ramp-up time required, compensation systems needed, and search strategy. What we learned from the process was that they had 4 different sales positions, two of which could not be successful without significant industry experience. Compensation needed to be very different for these people versus the others. We concluded that the client’s current internal systems and processes to support the strategy they had chosen were severely inadequate.
These revelations were critical. Failure to identify and address them would certainly have resulted in continued frustration. By addressing the disconnect between how they were approaching people decisions, their operations, and their strategy, my client was in a much better position for success. This was a clear case where the cost of hiring new employees was much greater than they realized.

Improve Your Hiring Strategy

Howard Shore is an executive coach and founder of Activate Group Inc. based in Miami, Florida. His firm works with companies to deliver business coaching to improve executive leadership development. To learn more about executive leadership coaching through AGI, please contact Howard at 305.722.7213.

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.

Identifying Time Management Issues and How to Fix Them

Do you Have a Time Management Issue?

You cannot manage time itself, but you can manage yourself and how you choose to use your time. These days we are under more time pressure than ever, and those little gadgets we use to make our lives easier may actually make our lives much harder.

Improving Time Management

Time is the great equalizer. Everyone gets the same amount of time: 24 hours in each day. You cannot buy more time. No matter how many people you know, they cannot give you more time. So the most important question you can ask daily is: “How can my team use time more wisely?”
One of the essential keys to maximizing success as an individual or an organization is to effectively determine where your time should go now and into the future. Where you used time in the past only serves as a guide and learning mechanism for your decisions as to where time should go in the future. One person in your group losing focus on congruent goals can impact everyone’s time, and even create a huge barrier for success.
Too often people search in the wrong places when trying to find out why they are not achieving their goals. They think there is something wrong with their time management program, so they buy a new one. They create long lists, and they eliminate certain things, only to find that they had no realistic effect on the organization. The real problem is not the process they currently use to manage or use time. Rather, it is the habit of thoughts or attitudes they use to decide how they will use their time.

How Belief Systems Influence Behavior

Belief systems lead to actions that cause results, which then impact your time management. If you or your people behave in counterproductive ways, try to identify the belief systems that cause that behavior. For example, let’s say you decide to exercise 3 days a week to improve your health. However, your primary belief system is that exercise is boring and painful. What do you think the chances are that you’ll exercise three days a week?
A common issue I hear from CEOs is that they spend little or no time on their strategic priorities. Instead, they spend their days putting out fires and dealing with their employee issues. They usually insist that this is just part of business as usual. However, a closer examination teaches us that there are people who like to put out fires and enjoy the immediate gratification of handling the daily emergencies, want to be the ones with all the answers, and have trouble telling others “No.” These habits directly impact their ability to effectively manage their time.
We seek immediate gratification in our society. The benefit of better health is a long-term goal. In the short term, a person avoids the pain of sore muscles and the loss of self-esteem that goes along with confirming one’s own bad physical shape by not going to the gym. In other words, they feel better about not going to the gym than they do about going. This is immediate gratification, even though the decision is a bad one for achieving long-term goals.

Identify Gratification Received From Bad Behavior

In order to change behavior, you must identify the immediate gratification you get from your bad behavior and the thought patterns that cause you to continue to practice it. Once identified, it is then necessary to find something more motivating to replace them. For example, many people would start to exercise if their doctor told them, “If you do not start to exercise tomorrow, you’ll have only six months to live, and if you do exercise, you will live another 25 years.” That is quite a carrot to dangle.

Tracking Time Spent

Most people do not have a good sense of where their time goes. At least once every six months, executives should track their time to see where they spend it. Once you have a solid understanding of how you spend your time, you can then try to increase the amount of time you control, or productively use your time by delegating activities to others, eliminating waste, and reallocating time to make it more productive.
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.

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.

How to Find and Fix the Biggest Leaks in Your Business

Even the most successful leaders and entrepreneurs can have holes, or leaks, in their business model or strategies. That means that there are components of their business that are being slowed down, or aren’t running as efficiently as they could be.

Often, these leaks are not obvious just by the debit and credit statements of a business, which can make them potentially dangerous. The biggest challenge for business leaders is to create a system that allows them to properly identify the leaks so that they can discuss and address the best way to fix them. For many businesses, fixing the leak can mean opening the door to a whole new set of opportunities for growth and productivity.

So what are your potential leaks?

The most important step towards maximizing the potential of your business is figuring out in what areas that potential is being wasted. Once you identify the leak, you can take the proper steps to address it and start reaching your full potential as a business. Take a look at some of the most common areas where businesses falter, and ask yourself if your business is leaking potential profit:

1. Are your employees as productive as they could be?

You should always be hiring exclusively “A” players. Hiring “B” and “C” employees may seem like a money-saving opportunity at the time, but they will end up wasting time and resources to produce less effective work. To solve this problem, you should cut the cord and replace your inferior performers with those who can do the job more efficiently, rather than waiting it out to see if your poor performers can improve. “A” players are those employees that achieve reasonably performance standards and live your core values.  There is no reason why all your employees cannot be one.

2. Are you motivating your employees enough?

Sometimes it isn’t a question of mediocre employees, but rather poor leadership. As a leader, it’s your responsibility to keep your employees engaged and motivated in their positions. On their own, only 30% of employees will go above and beyond. The other 70% require the work environment and management systems that will lead them to success. If you know you have employees that could be giving you consistently higher performance focus on the leaders.

3. Are you losing focus on the end goal?

It is very easy to get lost in the weeds of a business when short-term issues and unexpected obstacles start to get in the way of your ultimate priorities. For this reason, it’s important to have a long-term strategy to accomplish your goals and to encourage your employees to set their sights on these goals as well, rather than spending all of their energy on tactics that only solve day-to-day problems. This attitude will help streamline the energy of your workforce, so that people are being productive rather than busy just for the sake of being busy.  When everything is important…nothing is!

4. Are vacancies leading to lost performance?

If you have empty spots on your team, it’s important to devote some resources to finding strong employees to fill them. Vacant positions will cause other employees to have to pick up the slack, which will lead them to be overworked and unmotivated — whereas hiring someone strong and effective will end up saving your company money.

5. Are you having trouble retaining employees?

Retention issues are an obvious problem, because every time you lose an employee you have to waste more resources on finding and training a replacement, instead of retaining a happy employee who could have been helping you profit during that time. Employees leave for a variety of reasons, such as work environment, compensation, poor benefits or poor leadership. One of the best ways to handle this problem is to ask your employees what is important to them, and create an environment where they feel respected and valued.

6. Are you missing out on profitable opportunities?

A good business strategy is the key to maintaining an edge over your competitors. Figure out what difference your products, services or other offerings provide, and find the best way to demonstrate that to your target customers. If you’ve found your hook, new and more loyal customers won’t be far behind.

7. Are you creating a loyal customer base?

Sometimes it isn’t always about finding new customers, but rather keeping the customer base you already have. When you devote some resources into keeping these customers happy and active, they will not only continue to buy from you, but they will be more likely to recommend you and be brand ambassadors as well, which is essentially free marketing for your business.

8. Are you making the same mistakes over and over?

If you take a step back and analyze the processes that drive your business, you will be able to figure out which mistakes, if any, can be avoided. If you’re seeing the same mistake being made over and over again, maybe there is a flaw in the system that can be addressed to prevent the mistake from occurring in the first place.

One thing to remember when coming across leaks in your business. There is nothing wrong with finding them. All businesses have leaks to varying degrees. The important thing is taking action and plugging them up when you do find them. If you need more help, head over to our business coaching page for more information.

Goal Setting Matters

Many organizations set goals and fail to reach them. Others achieve some of their goals by accident. There are some leaders that question whether setting goals is a valuable exercise at all. You can even find much written on why goal-setting is a farce. Adam Galinsky, a professor at Northwestern University’s Kellogg School of Management and one of the authors of a Harvard Business School report called “Goals Gone Wild,” argues that “goal-setting has been treated like an over-the-counter medication when it should really be treated with more care, as a prescription-strength medication.” His position is that goal-setting can focus attention too much on the wrong things and can lead people to participate in extreme behaviors to achieve their goals.

I am of the position that goal-setting serves a critical purpose in helping to provide direction, clarify priorities, cause important discussions, influence positive behavior change, and stimulate focus. Goals are an essential part of the time strategies equation. Like anything else in life, when developed in an unsound way, misdirected, overemphasized, and not used in context they will not serve their purposes and can cause more harm than good.

Often I find people do not put enough thought into their goals and thus have an incomplete set of goals. I have one client that was so focused on achieving a sales goal every year that they neglected every other priority. They never came close to reaching their target. It was not until we had a complete set of goals that they ever achieved real sales progress. When focused correctly, goals take into account customers, employees, shareholders, vendors, operations, sales, profit, and record keeping.

I have seen goals rally an organization to reach extraordinary results. A great example is a company that I have worked with for a number of years. This highly successful organization needed to refocus their organization around their core customer. After growing their business for years they realized that 75% of the accounts they serviced did not represent their core customer. They had built a business model that was better suited for the other 25% of their customer base. The smaller base of customers actually represented 60% of revenue and 80% of their profit. The owner refocused the organization to double the number of core customers. They want to achieve in 5 years what previously required 25 years to accomplish. This focus changed the course of the company. Without divulging their strategy, which is unfolding, this singular focus on core customer changed the leadership structure, sales organization, marketing, product and service focus, and operations of the company. Last year was so successful that the company far exceeded any 2 years combined in terms of adding number of core customers. This year my client is on track to double last year and should meet their five-year goal. If their projections are correct they will more than double company revenue. More importantly, profit and firm value will triple or quadruple.

I have also seen the opposite occur when an organization focused too much on the wrong goal. Usually that wrong goal is sales growth. The thought process behind this choice is that sales solves all problems. The problem with this line of thinking is that not all sales are equal. Goals can lead to extreme behaviors and if misdirected can be destructive. In many cases transactions and customers can be unprofitable. People who try to make it up on volume and do not focus on profit typically lose. One common mistake in staying focused on sales growth and combining that with nearsightedness is discounting products and services to close deals at the end of a quarter to earn bonuses. Putting this into context, you pay someone extra to earn you less money! Ironically, if you are the owner you have cost yourself in four ways:

  1. You made less profit in the long-term. You probably could have closed the same transaction for more by waiting. The time value of money is in your favor, even if you use that money to pay debt. Say you have a 10% loan. You probably save only 1% or 2% on the money by paying earlier. I bet the your discount offer is much greater.
  2. You are teaching your customers that your pricing is not firm. If they wait until quarter-end they can squeeze lower pricing out of your sales people. Worse, they have learned that you are always negotiable.
  3. You are not training your sales people to maximize margin at every turn. So in the end you will sell more but make less.
  4. You paid commission and bonus on a lesser deal.

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.

Team-Building

STOP…wasting money on team-building exercises and retreats that, in the end, fail to bring about the desired results anyway. A significant reason that team-building initiatives fail is that too much emphasis is placed on the misconception that team-building should be fun. The purpose of team-building is to improve the performance of a work group, thereby creating better outcomes. This requires change, and for most people change is not fun … it is hard work. Team-building can be fun… if the members of the work group enjoy the learning process and relish the opportunities that change will bring. This is where a business coach plays a vital part in successful team building that brings results.

Key Elements For Driving Team Performance

If you want to improve teamwork and performance in your organization you have to look at the four core elements to driving team performance: relationships, goals, roles, and rules. All four of these elements must be executed well for the organization to flourish.

Focus on Improving Relationships LAST

Ironically, improving relationships is probably the last area you should focus on. Yes, the area that most leaders spend most of their time addressing is usually the symptom, not the problem. Almost every organization that has team-building issues will find their root of their problems in goals, roles, and rules. In my experience, when we address goals, roles, and/or rules, many of the relationship problems disappear.

State Your Goals

The first step toward achieving success as a team is to state your goals properly. You know your goal is well stated when anyone who reads it knows exactly what you are trying to accomplish and in what time frame. The better a person states the goal, the easier it is to create the action plan. An acronym commonly used for stating a goal properly is SMART (Specific, Measurable, Attainable, Realistically High, and Time-based).

Understanding Your Roles

In order for a team to function properly it is important that every member of the team understands specifically the actions and/or activities assigned to them. This is not as simple as some make it out to be, which is why this is usually an issue for team. There are two different types of roles: task and maintenance. The “task” roles relate to driving the desired outcome of a team. The “maintenance” roles relate to managing team processes and relationships among people on the team.

Rules Must Apply to Everyone

Rules are a very important component of teamwork. This is one of those areas many leaders, particularly in entrepreneurial and family-owned businesses have the biggest concern with. Everyone is fine with rules as long as they apply to others. You cannot have one set of rules for some people and another set for others.

Contact us if you need team-building ideas.

Howard Shore is a business growth expert and business coach who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please contact Howard Shore at 305-722-7213 or shoreh@activategroupinc.com.

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.

The Importance of Defining Employee Roles

The dynamics of your employee teams are defined by many factors, all of which determine their efficiency and effectiveness. One of the most important factors, in my experience, is defining employee roles.

In my system for Human Capital Management (the process of managing employees from recruitment to retention), I place a huge amount of focus on defining the roles of each and every employee. This starts with the job posting and carries through into an individual’s day-to-day responsibilities. As a long-time management coach, I have seen first-hand how mindfully defining each employee’s role, responsibilities and success metrics creates more success on the team and within the overall company.

I read an interesting article in the Harvard Business Review last month that really drove this point home. The article summarized a study completed by the author, Tamara Erikson, on team dynamics at the BBC and Reuters. She found that successful collaboration was better on teams when each employee’s role was clearly defined. She found that defining individual roles impacted collaboration success more than spelling out the group’s approach.

Erikson noted, “Without such clarity, team members are likely to waste energy negotiating roles or protecting turf, rather than focusing on the task.”

Carry this idea over into employees’ everyday tasks. By clearly defining employee roles from the start, not only do we target and hire the best, most qualified candidates, but we also ensure their continued success by informing them exactly how that success will be determined and measured.

What Needs to be in Every Position Description

I have been a management coach for many, many years, and I can tell you that the biggest mistake that I see managers and recruiters make time and time again, is not clearly defining individual position tasks, responsibilities and success metrics. Increase your employee and team success rate by ensuring that for each position in your organization, you have a position description that includes:

  • Job Description: Collection of tasks and responsibilities that an employee is responsible for; includes an official title.
  • Job Tasks:  Unit of work or set of activities needed to produce some result (e.g., answering phones, writing a memo, sorting the mail, etc.).
  • Job Functions: A group of tasks is sometimes referred to as a function.
  • Role(s): The set of responsibilities or expected results associated with a job. A job usually includes several roles.
  • Competencies: Abilities (skills) and capacity required to perform the job successfully.
  • Performance Management: Defines how the position’s performance is measured and its impact from an organization perspective. All the components within the performance management perspective relate and provide context to one another.
  • Critical Success Factors (CSF): Provide focus on the influences that impact the performance of the job.
  • Key Process Ownership (KPO): Identifies the critical processes owned by the position.
  • Key Performance Indicators (KPI): Provide visibility to performance through the use of metrics and established performance targets; thereby giving context to vague concepts.
  • Career History: The background experience typically required in order to have gained the level of knowledge and competency required for the position.

Without defining these extremely important position attributes, you are failing to tell employees what they need to accomplish, and without that direction your employees and your team will not deliver the results that they could be delivering.

Howard Shore is a business 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 management coaching through AGI, please contact Howard at 305-722-7213 or email him.

Is Lack of Financial Discipline Hurting Your Business? Financial Tips For Success in Business

It will blow your mind if you know how your business is being hurt just due to the lack of financial discipline. Do you have someone that helps you stay financially disciplined both in your business and personally? Do you listen?

Financial Questions to Consider

  • Have you used cash flow forecasts to determine how much money is needed to fund your growth?
  • Do you know how much of that you need to fund before banks and other external sources will agree to contribute?
  • Do you take money out of the business before considering how it will affect your growth?
  • Do you know how much cash you must leave in the business to cover taxes?
  • What is your reputation with vendors?

Financial Tips For Success in Business

As you can easily imagine, the client I’ve recently been writing about who lost millions in the sale of his business did not have good financial discipline. Fast facts to consider:

1. Raising Money

Fancy presentations, fast talking and nice smiles will not hide that you have bad personal credit, pay your creditors slowly, leave no money in the business, and overpay yourself. In general, good investors do their homework and recognize poor fiscal management in a business.

2. Leader Resentment

When partners and fellow leaders see you draining money from the business (and they will), they lose momentum because they feel that their hard work is going to waste. This then develops into an entitlement issue: the aggrieved parties demand much higher salaries, which either turns into further dilution of cash or further loss of productivity. Either way you lose.

3. Budgets

If you create budgets and don’t adhere to them, they do not really exist. With rare exceptions for outstanding individual contributions, there should be no raises unless the company is growing. If the company is growing less than forecast, raises should be commensurately lower.

4. Balance Sheet

Pay particular attention to your balance sheet. Cash is king. Cash is where you build your ability to grow and handle unforeseen circumstances.

Maximize Business Growth & Profit

If you are interested in speaking to a business coach and maximizing your growth and profits, let’s schedule a time to further discuss your business. Call Howard Shore for a FREE consultation 305-722-7213 or contact Activate Group, Inc. today.

Meeting Length vs Effectiveness: Effective Meetings Require Time

Meeting Length vs Effectiveness

Meeting length vs Effetivenss has a huge impact on how you should engage within your organization. Do you find that your organization faces the same problems and challenges year after year, with no resolution? Do you discuss the same issues concerns, people, and customers month after month? Do you find that right when you are getting to the heart of the matter in the middle of an important debate or topic, your meeting is over and you have to postpone for a later date? Do you create goals and plans that do not come to fruition?

These are typical results when you do not spend enough time meeting with your leadership team.

Cons of Not Setting Aside Time for Effective Meetings

Have you considered the amount of time, productivity, and growth you have lost by not setting aside enough time to properly make decisions, to debate and resolve issues, to align priorities and to hold leaders accountable? By avoiding meetings, critical decisions do not get made or are made poorly.

Failure to debate priorities and work through issues can bring organizations to a standstill while leaders wait until the next meeting or for a final decision, allowing your competition the opportunity to thrust forward. While it is counterintuitive to most leaders, spending more time in meetings could actually double or triple company productivity.

Optimal Meeting Lengths

The key to an effective meeting is a commitment to setting aside enough time. Assuming you know how to run an effective meeting (and experience says you probably need help), the executive team should be allocating the following time blocks to work on the business, to debate issues focused on strategy, accountability, setting priorities, new opportunities, evaluating your people, challenging the business model, etc.:

Daily Meeting Length:

10-Minutes a Day for a Huddle with Your Direct Team

Weekly Meeting Length 

1 Hour per Week

Monthly Meeting Length 

1 Full Day

Quarterly Meeting Length 

2 Full Days (1 Day is Strategic)

Failure to have these meetings and to focus on the right topics robs you of significant growth and profits. Contact Activate Group Inc. for a FREE consultation or give us a call at 305-722-7213 to see how a business coach can help you run a more effective organization.

Learn more about effective meetings:

  • Effective Meetings Start On-Time
  • Effective Meetings Focus on Decisions
  • Effective Meetings Require a Purpose
  • Effective Meetings Have Conflict

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.

5 Ways a Business Coach Can Help Your Business

1. A Business Coach Helps You Accelerate Your Organization

Have you ever wondered what a business coach does? I get this question all the time. A business coach’s job is to help you accelerate the profitable growth of your organization. What do I mean by this? Having owned several businesses and helped hundreds, I have realized that there is a hard way and easy way to get things done. Most of us are stubborn and do it the hard way!

Whether you are just starting your business, want to improve your business, or are ready to scale up, a business coach can provide you with the processes and tools to help your organization accelerate progress. Having been around a lot of CEOs over the years I have learned that many of you are faking it to make it.

2. A Business Coach Helps Find Your Business Success Formula

Most leaders struggle many years before they find their success formula. They go from one wild guess to another, using trial and error, to find the magic equation to lead to awesome growth and profit. Until then, they have little to no profit, 100-hour weeks, and anemic growth.

Apple Computer is one of those many stories where people seem to forget what actually happened before they become the most valuable and one of the most admired companies in the world. The company averaged 3 percent growth until 2003, had removed their founder, and was a mess for quite some time. After that time, it has averaged 40% growth. The average company takes 10 to 20 years before they find their formula for success. Most never find it.

3. A Business Coach Helps Find the Right People, In the Right Seats, Doing the Right Things

There is a saying: “first who, then what!” If you have the wrong people on your team, then it really does not matter what you want to get done. The CEO is accountable to ensure there is a strong process for hiring the right people, having the right structure, filling positions quickly, growing the right people, rewarding them, and removing the wrong people. Your business coach helps you make sure you know what systems and process to have in place to make and implement these important decisions.

4. A Business Coach Helps Develop Winning Strategies

Your business coach can help you accelerate the learning process. They help you ask the right questions, take you through the right processes, and make sure you do not get complacent with bad strategies. Too many companies are great at executing bad strategies!! The coach’s job is to help you see when you are moving the deck chairs around on a sinking ship. Your business coach will help you ask the following questions:

  • What is it that you will accomplish in your industry that others are missing?
  • What client segments will you conquer?
  • How will you conquer those segments?
  • How will you capture your unfair share of the market?
  • What business model can you use that will allow you have an extraordinary profit?

5. A Business Coach Helps Use Time to Maximize Profit

Once you have the right strategy you want to make sure to optimize your use of time and maximize profits. You do this through prioritization, using metrics your business coach assists you in developing to create effective process and procedures for establishing and communicating your priorities and goals. They also help you identify the right key performance indicators to focus on at any given point in time to have maximum impact on results. These indicators help focus the organization on removing the key weaknesses in your business model.

 

Hiring a Business Coach?

Call Howard Shore, one of the top executive coaches in the United States, for a FREE consultation at (305) 722-7213 or contact Activate Group today to see how an executive business coach can help you run a more effective business and become a more effective leader.

Why Brand Promise Matters?

Brand Promise and Business Growth

Several years ago, the owner of a prominent business services company hired me as their business coach. The owner and the company were well known and well regarded. Yet, the company’s growth had stalled. The business owner was a fixture in the community. The name of the company was noticeably placed everywhere. They were considered a leader in their industry. Client retention was unusually high – but growth was not occurring. This is a story I hear time and again, and its roots lie in a lack of understanding of how to leverage brand promise in their strategy tool kit.

Understanding Your Customers

After careful consideration, it became apparent that my client was well-known for their product and service, but did not know why that mattered to their clients. More intriguing was the fact that while my client was considered by many a strong salesperson and the company prided itself as superior in marketing and sales, its actual sales results proved the opposite! The industry had grown, and while other competitors had grown faster, they had not. They were excellent at serving their existing clients – reflected by high customer retention, but lack of sales growth proved they clearly were not getting the job done in sales and marketing. Further analysis led to our conclusion that my client did not know what was important to potential customers. While they kept customers, they did not know why.

Two Factors Required For Massive Growth

Specific Market Segment

We have found that there are two factors that need to be clarified by any company in order to achieve consistent sales growth, and are always present in those that have massive growth. These two factors were hindering growth for my client. The first factor required for massive growth is to focus on a particular market segment, not aiming to be all things to all segments. Targeting every source of revenue can leave you spread thin, the proverbial jack-of-all-trades and master of none.

When businesses mistakenly chase revenue anywhere it leads them, they wind up with less of it. Great companies quickly learn that by segmenting the marketplace, they can perfect their business model around owning their segment. A common mistake is to view a segment as a demographic, such as company size or industry group. Instead, view segments as a group of people that should be separated based on common needs, behaviors, and other attributes so they can be better served.

Getting the Job Done

Once you have selected your segment, the second critical factor in achieving massive growth is to identify your client’s “job to be done.” This is where brand promise comes in. You need to build company reputation around being excellent on the few critical attributes (I recommend no more than 3) that are most important to the customer. Too often, business leaders fail to spend enough time understanding which attributes of their product or service the market is underserving, and that makes the most difference in the end benefit or results to the target segment.

This is important because each segment has a specific “job” they want done that differs from other segments. If you address anything other than this “job” in your marketing and sales efforts, they will not hire you. Too often companies provide what they believe to be exceptional quality or service only and are surprised when their clients leave for what they believe to be something inferior. What clients are really telling you is that you are getting the wrong “job” done! Often companies believe they have lost customers for other reasons such as a change in relationship, price, or external force they could not control. The reality is that if you are getting the “job” done in an exceptional way, you can withstand most external forces. You are just clinging to excuses.

Brand Confusion

Failing to specifically identify the few attributes of excellence lead to too much complexity and brand confusion. Leaders must make choices and position the company in a way that will maximize growth and profits. It is best to narrow your strategy down further so that you capture a larger share of the market while simultaneously maximizing your profit. More complexity leads to:

  • Higher payroll required from specialized positions and the need for higher caliber people.
  • More processes, handoffs, and interactions that cause more mistakes.
  • Clients and potential clients having more difficulty understanding what makes you special.
  • Everything being treated as important, so therefore nothing is.

Measurable Brand Promises

It is critical for a company to understand the two or three most discerning factors as to why a client in your most desired segment hires or fires your product. You need to distill that down to a narrow set of measurable brand promises that you can build your company around. If you carefully align your sales, marketing, and operations around these brand promises, your customers will have a clear picture of why they should do business with you.

Example of a Strong Brand Promise

Ikea is a clear example of a company that has a strong brand promise. The company was laser-focused on a key underserved segment, and their execution of this strategy has allowed them to become a very large and profitable player in the industry in a relatively short period of time. Without doing a lot of research here, it is easy for an outsider to describe how they are different. Their target segment are “cash constrained and budget conscious people, needing furnishing for their home or apartment, thinking they will probably replace that furniture in a few years and are willing to do what it takes to save money.” Their brand promises “do everything on our side so that you can buy our furniture at the cheapest price, but then you have to do your part, and then together we will change the price point for furnishings forever.” What did this mean?

  • Low Convenience
    • They’re located in the rural areas.
    • You pick it up.
    • You build it.
    • Few people to help you in the showroom.
    • Walk through their maze at the location.
  • Minimum
    • Few Styles
    • Few Colors
    • Minimum Quality
  • Low Price

Contact Activate Group Inc. for a FREE consultation at (305)-722-7216 to see how an executive business coach can help you run a more effective business or become a more effective leader.

Grow With Purpose: A Better Alternative to Grow or Die

When Dr. George Land published his seminal work on transformation theory in 1973, he set in motion a line of thinking that would completely transform American business. In its earliest stages, Land’s “Grow or Die” principles served business well by instilling in executives and company owners the need to continually look forward to encourage growth and expansion. In the years since though, the grow or die concept has taken on a whole new meaning – and it’s not a good one.

Activate Group proposes an alternative to grow or die: grow with purpose. This alternative way of thinking is more in line with Land’s original premise without promoting growth for its own sake. It is a healthier way of doing business in a day and age in which far too many companies are suffering from a destructive tunnel vision that can’t see beyond revenue data.

Grow or Die as Motivation

One of the ways in which the grow or die concept has been misappropriated since the 1970s is its use as a way to motivate workers to do more. Let’s face it, we all know that growth and improvement are important ingredients to business success. But how many companies harp on grow or die in order to scare employees into thinking that the organization will die if it doesn’t grow?

The fact is that long-term company health and growth are not intrinsically tied together. Just look at any multi-generational mom-and-pop store. All that store needs to do to remain viable is maintain enough revenue to pay the bills and generate some profit. It doesn’t need to grow into a big box retailer to survive.

Unfortunately, far too many business leaders incorrectly correlate long-term health with size, scale, and growth. In so doing, they’re also jeopardizing their own organizations. They are focusing so much on growth and development that they are ignoring, and even harming, the most important factor in their success: the employees who make the organization work.

Impetus Behind Grow or Die

It is instructive to step back and try to understand how we got from Land’s 1973 book to the current state of the grow or die philosophy. Observation suggests the impetus behind our modern application of Land’s transformational theory is two-fold. It involves corporate pride and an insatiable desire for the next big thing.

Beginning with the pride factor, companies and their executive management teams measure themselves on the size and scope of their organizations. Executives only look good when their organizations are growing. Therefore, they latch on to the grow or die principal as a means of stroking their own egos. Even SMEs can fall into the same trap.

As for the drive to achieve the next big thing, it is a result of pride in boredom mixed together. Business leaders are too easily bored with the companies they run if those companies are not constantly chasing something new. Many feel they are not doing their jobs if their organizations aren’t innovating; they are not promoting growth and development if they are not promoting something new.

The Grow With Purpose Principle

The Grow With Purpose principle accounts for costs, revenues, and profits. Grow or die looks only at revenues, yet a company that only chases revenue won’t find it. Why? Because growth always requires more financial investment. Chasing purpose is the better way to go. When employees have purpose, especially when they are passionate about that purpose, they give their best. They work hard; they innovate; they become the best they can be. More importantly, employees will follow their employers in the pursuit of purpose, but not in the pursuit of revenue.

In light of that employees need, want, and deserve competitive compensation. They need regular raises to support their aspirations. In order to be motivated to produce their best work, they need to know their employees value their contributions to purpose.

Where grow or die seeks to boost productivity through fear, grow with purpose motivates employees by offering mutually beneficial reasons for growth. The company invests in its employees to support their individual aspirations while the employees invest their best efforts in the company to ensure its long-term success. Both feed off one another; both benefit from one another.

Growing Profits and Revenue

One last thing to consider is the relationship between profits and revenue in the grow with purpose paradigm. Profits are essential for business – they are why one does business to begin with – but profits must be grown in a meaningful way. You do that by growing revenue in a profitable way.

Grow with purpose gives employees an opportunity to pursue something meaningful. In turn, revenue generation becomes profit generation. Profits become meangingful and as such, they provide the fuel that keeps the grow with purpose engine running.

George Land’s grow or die transformational theory was a stroke of genius in its original construct. Unfortunately, modern business has taken the theory in directions it was never intended to go. It’s time for us to replace grow or die with a new way of thinking. It’s time to grow with purpose.

To learn more about growing with purpose, please contact Activate Group today or give us a call at 305.722.7213. We look forward to helping you and your business grow.

Most Important Success Factor for 2018?

2018 Business Success

I recently spoke in front of 300 people, and one of them asked “What do you think is the most important thing the audience should consider in 2018?” Obviously, every business is faced with different challenges, but I think the answer is simple.

Market Segment Plays an Important Role in Success

Positioning your company in a growth industry, market segment, or sector is crucial to the continued success of your company. There must be a target market that your products and services are focused on. It is ideal that this segment be growing.

Once you have figured out your segment, the next question you want to ask yourself is “What is the pain, gain, or problem you are solving that competitors are missing?” and then make sure you address that issue better than anyone else in your industry. When you do, you will assure yourself plenty of success.

Think about Ikea, Southwest Airlines, Apple, and the Container Store. All four companies have healthy growth rates and became the most profitable in their industries by focusing on market segments that are likely less than 10% of the overall marketplace, have become industry leaders, and generate billions in revenue. Apple and Ikea represent the majority of the profit in their industries, and Southwest has the 2nd highest valuation in the world and only flies to 101 airports.

Less is More, and More is Less

You must understand that in most cases – less is more, and more is less. The more market segments you are in, the more complex your business gets and the higher your cost structure. Each segment causes you to have to adjust your sales, marketing, operations, and products and services. Most owners underestimate the impact on their company as they chase additional segments.

Each segment:

  • Has different problems they want to solve
  • Values your products and services differently
  • Prefers different selling channels
  • Causes you to change the relationship equation; and
  • Causes pricing to change

Job to Be Done

A concept popularized by Clayton Christensen at Harvard Business School, and published in a Harvard Business Review September, 2016 article, Know Your Customers’ “Jobs to Be Done”. It is important to understand that someone buys or rejects a product or service because in their mind it has a main “job to be done”. I am sure you have heard the saying, when someone goes to the hardware store to buy a ¼ inch drill bit, what they are really buying is a ¼ inch hole. Your customers do not necessarily want your product or service; they want to get a job done. It is likely you and your competitors are still failing to get that job done today, and someone else is going to figure out how to do it.

The only reason existing customers will keep using your product or service, switch to you, or pay a premium for what you are offering is that you best understand what the job is that they need solved, understand where the competition is falling short, and then solve that need better than everyone one else.

Important Questions for Business Success

Here are some key questions I want to leave you and your leadership team with:

  • Where might you be falling short in meeting your customers’ job to be done?
  • How can you better meet that job?
  • How might the job be changing in the future?
  • What are competitors doing?
  • How might customers use alternative solutions to solve that same job to be done.
  • What is the job that is not getting done in your industry?
  • Where do you see lack of consumption?
  • What work-arounds have people invented?
  • What tasks do people want to avoid?
  • What surprising uses have customers invented for existing products and services?

If like most businesses, you aren’t growing and maintaining at the rate you are truly capable of, spend a day with us and we will make sure it is the best investment you have ever made in your business. To learn more how we can help you achieve your business goals or to schedule a FREE consultation, contact us today!

Join us at the Scaling Up Business Growth Workshop in Fort Lauderdale on Thursday, January 25. Click here to learn more. And to register.

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.

Howard Shore’s Interview with Square Peg Round Hole

In this interview with Square Peg Round Hole, Howard shares an essential framework to ensure your business moves forward in this rapidly changing and competitive economy. He talks about the three guiding elements – strategy, execution and people – to finding success in your business and how if you’re not paying attention to these then you’re probably “leaving significant money on the table.”

Howard tells Matt and Dan the story of a $10 million company with a negative $200,000 in cash flow on the verge of bankruptcy, whose leaders were unaware of how bad the situation really was. He turned into a $12.6 million company with a positive $2 million in cash flow in 6 months using his three guiding elements.

How is a Consultant Different From a Coach?

Difference Between Business Consulting and Coaching

One of the hardest decisions for a CEO, owner, or other senior executive is whether to retain outside assistance with matters that will help strengthen themselves and their business. There are different types of advisors that can assist you. Do not assume they are all pretty much the same thing! There are similarities among the choices, but don’t be fooled. There are big differences between coaching and consulting and between business and executive coaching. It is important that you choose the right type of advisor for your situation.

I created the following table to help you understand the difference between a business coach and business consultant:

Business Consultant vs. Business Coach

 Consultant

Coach

Works with more than one person, often in a department, function, or team. Work on a one-to-one basis or with a team.
Is an “expert” who is hired to solve a specific problem. They fill a void in technical expertise in terms of knowledge, process, and experience your internal team does not possess. The Coach is an “enabler” who provides process that helps empower and hold you accountable to solve problems and cause more ideal outcomes.
Structures projects for specific deliverables or results. They may work directly with your internal team, but it is the consultant who is accountable and responsible for the outcomes. You solve your own problems using a process or framework provided by the Coach. The Coach helps challenge you to think and act in new ways, to find your blind spots. You are accountable and responsible for the outcomes.
Closes the gap for your team’s weaknesses. Builds on and unlocks the team and individual strengths.
If behavior change is needed, consultant generally does not get involved in it. A primary focus on individual and interpersonal dynamics designed to cause behavior change.
Gathers data and reports on what needs to be done. You gather the data and reports, and Coach facilitates the meetings and process.
Time-limited; generally short-term and project-oriented results. Occurs over a period that many times involves renewable contracts; focused on long-term results.
 Transactional Self-discovery leads to behavioral and mind shifts and can be transformational.
Requires limited commitment from you to implement. Maximizes your commitment to implement solutions.

 

Coaching is a personal thing. The fact that you are here and that you’ve read this far tells me that you want and/or need a Coach. However, finding the right Coach isn’t easy. That is why I am offering a FREE, no-obligation consultation to see if we’re a good match. There is no hard sell. This is my gift to you. If you feel we’re a good match, we can discuss working together. If not, I will leave you with enough value that it will be more than worth your time. That is my promise.

What’s the Difference Between a Business Coach and an Executive Coach… and Which Do I Need?

Business Coaching vs. Executive Coaching

When considering Executive or Business Coaching, you may find you need one, the other, or both. There are some similarities and vast differences between a business coach and executive coach. Regardless of type, the coach is not there to provide answers or solutions. With coaching, the premise is that the leadership team or person being coached already possesses enough knowledge, skills and capacity to develop the strategies and lead the organization, but has yet to reach their full-potential. The best outcomes usually occur when the coach does not provide you with any advice and causes transformation in individuals, teams, and organizations.

What is Business Coaching?

A business coach brings processes, tools, and concepts to help facilitate team and organizational growth.

In the case of Business Coaching, the Coach brings processes, tools, and concepts to help facilitate team and organizational growth. The methodology causes a shift in the way that you and your team view the challenges they face. The goal is to create that shift in view to cause the management team to develop different strategies, make better people decisions, be more focused, strengthen the culture, be more accountable, and better align the entire organization. For example, I have a client that, after nine months of taking them through a process and some hard questions, changed a $10 million business that had negative cash flow to one that produced over $1.5 million in cash. More importantly, that shift in strategy, people, and execution caused a sustainable business model designed to produce 20% net cash flows annually. Most importantly, all the ideas came from the organization and their leadership team.

What is Executive Coaching?

An executive coach helps individuals unlock their own leadership potential by increasing self awareness and improving their effectiveness as a leader.

The Executive Coach’s role is to help individuals unlock their own potential, and is not about teaching or showing the way. The Executive Coach helps the person being coached discover areas where their beliefs, motives, values, and/or personality traits are causing them to be less effective as a leader. The biggest part of coaching is helping the person being coached become self-aware. Research has shown that the higher the position, the higher the gap in self-awareness. A good example is a COO that I worked with that the CEO appreciated because “things got done.” However, the problem the CEO was trying to ignore was that no one else on the leadership team wanted to work with the COO, a person who had no empathy, demonstrated passive-aggressive traits, and was steamrolling everyone else in the organization. Eventually no one would cooperate with the COO, and things got really heated. The COO could not see things from anyone else’s perspective.

What Makes an Ideal Coach?

Do you ever wonder what an Executive Coach does? I get this question all the time. An Executive Coach’s job is to help you write your story. What do I mean by this? Whether you want to improve your business, career, or personal circumstances, the Coach’s role is to provide a forum and process to help you maximize your potential. In other words, as your story is unfolding, your Executive Coach’s job is to help you to write your best story, a great story. It is important that you work with someone that will help keep bias out of your story creation. Your story starts today, and you want to have unlimited possibilities. While writing your story, you will gain new wisdom and will need course corrections. Everyone’s story has surprises, and your Coach is there to help you through and to stay accountable as you reach your full potential!

A Good Coach Enters Your Story Without Bias

Your coaching relationship is one where you are given space to create. A good Coach enters your story without bias. Good coaches are not there to judge you, do not have expectations of you, and their only stake in the outcome is helping you achieve the goals of the engagement. While most everyone else in your life has good intentions, they usually also have bias. This bias causes them to consciously or unconsciously steer you in a direction that may not be in your best interests.

Here are some examples:

  • They may try to protect you by guiding you down safer paths because that is where their life choices have taken them.
  • They may suggest a different path because they think you are not capable of traveling the ideal path.
  • They may steer you in a different direction because of selfish motives. You will find even your closest colleagues to be selfish.

A coaching relationship brings you a blank canvas to work with. This does not mean you need or want to start over. It just means you should consider that your business, career, or personal circumstances should be whatever you want it to be. People mistakenly start from where they are rather than where they want to be. This thought process will always limit your possibilities. This is why working with people that know you well can be so limiting.

Coaching Helps Define Business Goals & Objectives

Given that your story start is in process and not certain, think of your possibilities. With the wisdom you have today, what do you want your business to look like? What would you want your career to look like? How would you like your personal story to unfold? As your Coach helps you write your story, they will first help you create a clear picture of what you want that story to be. This is hard work because it is not always easy to articulate and define what you want. This may take some time and need to be refined over time.

Once you have developed a clear picture of your story, you need to create an action plan. The action plan looks at long- and short-term objectives that need to be attained in order for your story to unfold. You do this by identifying the gap between where you are and where you are capable of being. Your Coach will help develop a series of 90-day goals that help lead you to achieving your full potential.

Everyone Needs a Coach

Like any worthy story, you will encounter surprises and obstacles. Your Coach is there to help you work through these challenges. They help you identify the midcourse corrections that are needed and help you stay accountable to your lofty goals.

Business and executive coaching is a personal thing. The fact that you are here and that you’ve read this far tells me that you want and/or need a Coach. However, finding the right Business Coach and Executive Coach isn’t easy. That is why I am offering a FREE, no-obligation consultation to see if we’re a good match. There is no hard sell. This is my gift to you. If you feel we’re a good match, we can discuss working together. If not, I will leave you with enough value that it will be more than worth your time. That is my promise.

To schedule your free consultation or to learn more about our coaching services, please contact us today or give us a call at (305)-722-7216.

Is Your Revenue Habit Hurting the Value of Your Company?

Several years ago, a company in the business services segment hired me because their revenue had stalled. It was a company that prided itself on its ability to market and sell. It was considered an industry leader in its space, yet its revenue was stuck in a range. The customers they had were very happy. The company had natural turnover in clientele, losing some companies that were sold or closed or had leadership turnover, and then they would add some to replace the ones they’d lost. They had been offered a very healthy price to sell, but the owner wasn’t ready and wanted to build a more valuable business.

After reviewing their client portfolio with them, we recognized a few things. First, that they had few (relative to the number of overall number of clients) customer companies that had 300 or more employees, and those few were a lot more profitable and required much less relative labor for the revenue generated. Twenty percent of their client base consisted of micro companies. Not only did they lose money on those companies, but it also required 40% of my client’s resources to service them. From a value standpoint, when the potential buyer had looked at my client they were not interested in retaining those smaller companies, for obvious reasons.

I tell you this story because, prior to this discovery, the organization was focused on getting revenue, and most of its sales activity was directed at the wrong market segments. My client was designed and built to serve larger entities whose needs were very different from smaller firms. They had a unique value proposition to offer those larger customers. Their sales force and marketing team had not isolated this proposition. With this new knowledge my client boldly divested his company of all the smaller clients and refocused his operation on the larger segments. In the four years since making that move, the company has accomplished what they had not in the prior 26. It is on track to double its size in five years, with the double the number of customers greater than 100 and 300 employees. Their customer concentration on the larger clients has led to a leap in their profitability as well as a dramatic increase in their valuation.

Below are some signs that you may be chasing revenue and not building a valuable business:

  1. You cannot stay firm on pricing and charge more than your competition.
  2. Profit margins are not holding steady with volume increase, and your profit is below the top 10% of your industry.
  3. Your marketing and sales force cannot clearly focus on a specific buyer in a narrow set of segments because you are afraid to lose out on opportunities.
  4. “No” is not often heard in the sales department.
  5. Your overall growth rate is moving with the market, and possibly your company is losing market share.
  6. You are not increasing market share in each target segment. In other words, you’re not reaching your ideal clients.
  7. None of your products/services are taking off, but you just keep adding new ones.
  8. You fail to maximize the potential of a product or service because you are distracted into chasing shiny new objects.
  9. You have a few customers that make up most your revenue. Any one customer that makes up more than 10% of your revenue and or profit is extremely dangerous.

There are 15 common issues in the areas of people, strategy, and execution that drain energy, direction and profitability from every business. Chasing revenue is just one of those common issues! In my recently published book: Your Business is a Leaky Bucket,  you will find a practical guide on how to effectively push change and ignite growth in your leadership team in order to achieve your organization’s full potential. Call Howard Shore for a FREE consultation at (877) 692-6211 to see how an executive business coach can help you run a more effective business or become a more effective leader.

3 Common Concerns of Hiring a Business Coach

Hiring a Business Coach and the Common Concerns:

You may be in the process of deciding whether to hire a business coach at this time. After speaking to many leaders over the years, I have found that there are three common reasons given for why a business investigates hiring a business coach and then does not hire one. All of them are really excuses rather than good business decisions.

1. TIME

“I don’t have time!” It is common to believe there is a better time in some distant future — once you change a few key people, complete that big transaction, finish a big project, or arrive at some other natural business crossroad. The reality…when was the last time you thought you had plenty of extra time on your hands? The answer is probably never, and if you did, you were in denial. That better time never occurs.

The right business coach works on getting better results from activities that you are already doing. A business coach helps you reallocate how you go about doing those activities. In the long run we help YOU find more time, by helping YOU figure out how you are wasting time, how to work less, and how to get a lot more results from time worked.

2. COST

You might think cash flow is too tight or that the cost of the program equals that extra headcount you would like to add. The reality is that for every day you do not hire the coach, you lose a lot more money than you realize. The reason is that every business has leaky buckets. “Leaks” are the places where your potential revenue and profits are not fully being captured.

In my blog post, “Are These 8 “Leaks” Undermining your Business Success?”, you can learn about some of the most common leaks that I see in businesses today. These leaks are costing your business far more than a coach will ever charge, so your return on investment can be huge.

In our process, your team’s first retreat is designed to help you identify the “leaks” in your business bucket and determine what those leaks are costing you. Your business coach will help you identify simple ways to practically increase your cash flow so that you can quickly yield an increase in your return on investment. We have many success stories where clients were able to increase cash flow by more than $1 million, and they had not realized the opportunity existed.

3. SELF-CONFIDENCE

You may be thinking “why can’t I do this without you?” This is a fair question. After all, you know your business better than anyone, and the practices we use are commonly known best practices. The fact is, you know you could have gotten better results and did not. You could have implemented those practices and did not. Your situation will not change without a catalyst like a coach. Even if you effected some change, why would you not want to get the best results possible? The right business coach has the 10,000+ hours of practice in helping companies like yours implement programs that work and can accelerate the process. Every week and month is significant in terms of growth, cash, and stress that you can never recover once you have lost it.

Trust the Coaching Process

You may be asking “what if this process does not work?” Business coaching is different from consulting. As long as you hire a business coach that is bringing proven business operating processes, concern about it working is the equivalent of saying “what if I inhale and air does not fill my lungs?” In our experience, the process succeeds to the degree that you commit to it and do the work. Not doing the work means you’re willing to allow the “leaky bucket” to continue leaking every day. Everything we offer as a business coach has already been proven in thousands of companies to close your leaks and help you prosper. They are the business fundamentals that everyone knows, but many don’t do.

Hire a Business Coach

Let’s identify your company goals and begin drawing your roadmap to success. With the executive business coaching services at Activate Group, we’ll help you identify current business leaks, improve your strategy, and increase your effectiveness as a leader.

Maximize your success by contacting us for a FREE consultation to learn the benefits of business coaching and how we can help your organization thrive.

Leadership and the Qualities of Steadfast Flexibility and All-Knowing Ignorance

If you read this headline and feel that the range of qualities covered tend not to meld well together, then please bear with me for a few minutes. The point I’m aiming to make is that an effective leader will not be all things to all people, but might be different things to different people at appropriate moments.

As we work our way through a presidential election campaign – and no, I’m not going to take sides or start arguments – whoever wins will need to behave differently, depending on the audience being spoken to, or with. At moments of trauma, a president will often need to be calm and measured to help assuage the public mood, but might be much more forthright within the walls of the Oval Office about how the nation’s actual response would be undertaken. So, let’s take time to consider the two pairs of qualities suggested in my headline.

First, we’ll look at steadfast flexibility

Many people, when criticizing their boss, will tell you that they feel a real sense of annoyance if they simply don’t know where they stand. Ineffective leaders change their mind with the wind, and are not steadfast. Members of a company, or individual teams within it, should be quite clear about what the leader expects from and of them on a day-by-day basis. The individuals should know exactly how that leader will behave when a set of circumstances occur, based on their ongoing experience of similar situations. In other words, their leader will be steadfast, particularly if the currents are strong and the shoreline rocky.

Equally, frustration grows with a leader who will never change their position, even when circumstances have clearly and substantially altered the situation. Simply doing what has always been done is neither steadfast, or even leadership. It’s stubbornness, and that’s a polite term for such behavior. Flexibility is shown in a willingness to take new ideas and changed situations on board, and then to deliver a new position from which that leader can, once again, be constant and steadfast.

Which brings us to all-knowing ignorance

This is more tongue-in-cheek, yet with a serious point. The ignorance is about those moments when, quite frankly, it’s best for a leader not to want to know. This isn’t about repeated and escalating situations, it’s about simply noting what has happened, not reacting in a way that can make that moment worse, and then keeping it perhaps to be referenced at a more optimal time. Which, of course, covers the all-knowing component! The other way that all-knowing is not to be taken literally is that no-one really expects their leader to know everything about everything within their workplace environment. All-knowing might be termed ‘enough-knowing’ – a position from which the right questions can be asked, an accurate assessment considered, and practical guidance delivered.

About leadership juxtapositions

John C Maxwell, such a prolific writer on the subject of leadership, once said: ‘A leader is one who knows the way, goes the way, and shows the way’. I entirely agree and have merely aimed to point out here that sometimes the way changes, as, when appropriate, will the attitude and actions of an effective leader.

Knowing the Difference Between Leading and Lagging Indicators

Lagging Indicators

If you are like most leaders, the primary metrics that you use to set goals and to manage your business come from your income statement and balance sheet. Examples most often discussed are sales, cost of goods sold, gross margin, overhead, labor costs, profit, receivables, inventory, work in process, payables and cash. While these are measures you need to monitor, they are all lagging indicators. They are results from decisions and actions taken in the past, the scorecard you use to measure the success of those actions and decisions. The problem with trying to use those measurements to manage the business is that they are after the fact. While there is some benefit to using lagging information, it does not tell you why your results are the way they are. It is also too late to change the outcome. It is the equivalent of trying to drive your car forward by watching your rearview mirror.

Leading vs. Lagging Indicators

Your primary focus should be geared to key performance indicators, the leading measures that influence the end results. By choosing the right leading indicators you can help your team improve the lagging indicators. This approach can be problematic for leaders for three reasons. First, while all numbers on your balance sheet and income statement are lagging indicators, other measures can be leading or lagging depending on what you are using them for. For example, percentage of “A Players” can be a lagging indicator when measuring effectiveness of recruiting and onboarding processes, leadership effectiveness, and how well an employee is performing. However, it is a leading indicator in terms of customer loyalty, labor efficiency ratio, and other such measures. So it is important to really isolate what you are trying to improve.

Evaluating the Most Important Leading Indicators

The second issue is how to figure out which measures require the most attention. Every business is a compilation of processes that are composed of various inputs and outputs and various decision points. At each point, when something occurs or does not occur, it influences future outcome, and a potential for measurement occurs. If your company is like many other businesses, your processes may not be well defined, which is a huge leaky bucket. You also may not be clear on how each point in the process affects the overall organization.

I recently met with the CEO of a company that manufactures products for the construction industry. He was very focused on building up his sales and marketing team. Sales in the company had been hovering around $10 million for the last 3 years. When I dug deeper I learned that his company had proposed over $150 million in deals during the previous 12 months. I asked if this was a recurring problem, and the answer was yes. So his close ratio had consistently been less than 7%. My next question to the CEO was why he lost those deals. He was not sure, but it sounded like their products were not meeting the requirements of the marketplace. How was increasing the size of the sales force and improving the marketing department going to address that? He really needed to focus on close ratio and understanding what it was going to take to increase close ratio before doubling the size of his sales force and spending a bunch of money on marketing.

Measuring Leading Indicators

The third issue is the measurement itself. While there are usually systems and processes in place to compile your financial statements, many small and midmarket companies do not have measurements for their processes in place. As a result, there is uncertainty as to how to get the information you need and whether it will be accurate.

The bottom line is that what gets measured gets done. You do not want to measure too many things. If you cannot automate, it is important have the people responsible for the outcome or the step in the process to report on the measure daily. If you do not measure it, it will not improve. Many of my clients collect information in Google Docs. While this is less than ideal, it works.

Business Strategy and Leadership Development Services

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.

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.

Are Your Goals Arbitrary?

Have you developed your goals in a sound way? Often I find that goals are arbitrary. The reason you may be missing your goals every year is because there is little basis for how you developed those goals. Are you capturing random numbers in a spreadsheet or coming up with numbers from thin air? Are your goals really mere dreams or wishes? The only difference between real goals and dreams is an action plan! Have you thought through what it would take to achieve your annual revenue goal? Have you answered questions such as:

  • Will pricing need to stay the same, increase, or decrease?
  • Which customers will grow, and which will be lost?
  • Why will certain customers grow? Will the growth be due to price increases, increased volume, or expanded product lines or services?
  • How many sales will come from new customers? How many new customers would be needed? How much on average will each of these customer spend? What will they buy?
  • Will you need to enter new territories?
  • Do you have enough salespeople?
  • Will you need new sales channels?
  • Will you need new product or service lines to offer?

Goals help direct you and your team toward the right priorities. By identifying gaps between current performance and your goals, you’ll be able to focus attention toward those gaps and increase the likelihood of desired outcomes. Goals allow you to consolidate your efforts away from activities that are not going to produce the results you want.

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 Does It Mean to Act with Purpose?

The word “purpose” gets tossed around often in the executive and organizational development world. In a previous post, “Why Purpose Matters”, I discuss the importance of purpose. However, as I continue to work with clients, I can see that they are failing to grasp the importance of having people that “Act with Purpose” on their teams. If you watch, you can really see the difference.

For some, purpose can be bold and transformative, aiming to solve the world’s biggest problems. If you are one of these leaders, you may launch impactful organizations such as City Year, Tesla, and SKS Microfinance. These purposes are really exciting because they are missions to change the world in some way. Alternatively, your purpose can be to change your industry or to fill an unmet need, like Airbnb.com, Amazon, Google, PayPal, or Facebook. Then again, you may look at these examples and say, “My company can never be that exciting.” My challenge to you is that you can still make your difference, even if it is not earth-shaking. It is important that you find that purpose. It is only with purpose that anything of consequence happens, and that purpose is what compels you and others to excel, gives work more meaning, and brings people together to want to serve others at extraordinary levels.

Have you ever noticed that when you act with purpose you perform with more energy and enthusiasm? You are willing to give more effort to something that really matters to you! Compare that energy and effort to something that may be important but does not pull at your heart. Worse, consider what your commitment is to an endeavor that has not captured either your mind or heart. You just go through the motions. Too often I find that most of the employees in companies are not engaged because they lack this kind of investment. Their leaders have failed to instill purpose.

You know you are acting with purpose when succeeding is not about the revenue or the profit. The sense of achievement is much greater than that. The purpose inspires your actions. It is compelling enough to get people to work around obstacles. They expect to encounter those obstacles and only see them as challenges to be conquered. When the purpose is important to someone they are inspired to volunteer for extra work. They volunteer to take on challenges and to solve problems. You know that purpose is missing when all of the company’s problems and challenges are being pushed up to the leadership team.

Anyone can hire employees and get minimum performance out of them. You do this by hiring them and paying them a fair wage to do something they are good at doing and enjoy doing. While I do not have empirical data, I believe this gets you 25% of what the average employee is willing to the employer. When you have the right culture, that gets you another 25% of their effort. Given the right culture, with the right hire, instilling purpose will enable a company to get 100% commitment and investment from a team member.

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.

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.

Are You a Growth-Oriented or Execution-Oriented CEO?

One question you may want to ask yourself is, “What kind of CEO am I?” My observation over the years is that most CEOs fall into two categories. The first category consists of those that are very growth-oriented, focusing mainly on sales and marketing activities. They find money everywhere. Remember my “Revenue is vanity, profit sanity, and cash is king” motto here. You may be good at growing the top line, but if you are not careful you may find weak net profit margins compared to some of the other top companies in your space. Another potential pitfall is inadequate margin on your revenue, which will cause you to be prone to finding yourself with little cash and to giving up too much equity to others to feed your revenue habit.

The Execution-Oriented CEO

The second type of CEO is very execution-oriented. If this is you, you and your team are masters of your craft. When I go into your businesses I find you are excellent at what you do. You pay close attention to every detail, and can show me tons of metrics as to why you are great. The reason you’ve hired me is that you do not have the revenue to show for it. You spend the majority of your time perfecting processes and creating perfect products and services. It is common for you to get and keep a customer forever. However, your perennial problem is getting more customers. You have little sales and marketing orientation, and if you’re honest you will tell me that you hate selling and think that marketing is a waste of time and money.

Strategy vs. Execution

You can see the real challenge. There is a never-ending conflict between strategy and execution. It is yin versus yang. Strategy is about growth and execution turning revenue into profit efficiently and removing waste. They often bang up against each other, and if you do not hear a lot of conflicting opinions you know you have a problem. Growth without discipline and making choices creates a lot of waste and burns cash. You rarely have one leader that is good at paying attention to both.

I raise the original question, “Are you growth- or execution-oriented?” If you are one or the other, it will be important to go back to your people section and ask this question, “Do I have enough of the right types of the right people on my team to scale the company?” Do you have a tendency to squeeze out the opposite type of person because of your preference?

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.

How Does Impatience Affect Leadership?

Every leader has a behavioral style that defines how they are seen by others. No matter what that behavioral make-up is, you will find that it has positive and negative traits. Some of those negative traits can have a significant impact on one’s ability to lead others. One trait I have found prevalent among people that need to get results quickly is that they also tend to be impatient with others. If you know yourself to be impatient you may want to read further as you may also have some other leadership traits that are holding you back as a leader and having severe consequences to your organization.

You might be thinking that there are positive aspects to being impatient. In December 2014, there was an article to that effect in Forbes: For Entrepreneurs, Impatience Might Just Be A Virtue. Many entrepreneurs believe it is their sense of urgency that causes them to succeed. By instilling this sense of urgency in others, they are able to push others through barriers in ways that otherwise might not have happened. This “just do it” mentality causes people to not overthink decisions and have a penchant toward action rather than inaction. After all, isn’t action better than no action? While there is some truth that we need this sense of urgency to move forward, it is only an ingredient, and when overused (and it often is) it causes far more damage than good.

Many of the CEOs I work with use high urgency as a management tool. They are the organizational “drivers” that push others to get things done. They are also known to get things done themselves, which in many cases has been a key factor in achieving success. There is no challenge they feel they cannot conquer, and they sometimes take things on themselves when they feel like the game is on the line because they relish the challenge. They are highly driven, bottom-line oriented, have high expectation of their people, and have vision that many of their team members lack. They get things done that others believe it is impossible to do. So you might be wondering what’s the problem?

The Impatient Leader Tends to Be Aggressive Instead of Assertive

Often organizational drivers tend to be impatient and have been known to be aggressive instead of assertive when communicating with others, not understanding the critical difference between the two styles. The key difference is that an aggressive communicator is perceived as someone that is more concerned about their own feelings and show no regard for the other people they are communicating with. They will enter a conversation or meeting with a specific agenda and will make that agenda happen regardless of the ideas, opinions or feelings of the others. Ironically, they may realize afterwards they have done this, but the damage is done.

When you communicate aggressively toward colleagues, their reaction (and of others who witness the exchange) is usually negative (resentful, angry, hurt, etc.). You may even go back to them and ask if they were okay with your aggressive style, but do not expect to get an honest response. If they did not address you at the time of the exchange, they are either passive-aggressive or passive communicators and just want to avoid a confrontation with you, particularly if your position of power is superior to theirs!

The aggressive-style leader will almost always get compliance from subordinates, but often at the expense of long-term loyalty, enthusiasm, creativity, extra effort and motivation. In extreme situations, a highly aggressive leadership style can result in other negative outcomes, such as passive-aggressive behaviors, resentment, alienation, dissatisfaction, high turnover rates, sabotage, and in some cases litigation (e.g. hostile work environment).

When you have a direct report that is not performing and you are in aggressive mode, the initial response is to be sarcastic, hurtful and/or use threatening comments. You believe that to motivate people you should show them that you and others are better than they are, tell them that the work they did was inferior, give them crazy goals that no one would be able to accomplish, and tell them they will not make it at the rate they’re going. Nothing you tell them is helping them understand how to perform or indicating that you want them to succeed. In fact, they most likely believe you are going to hurt their career and cannot possibly succeed if they stay on your team.

Coaching Can Help You With Negative Behavioral Tendencies

As you can see, someone with positive behavioral attributes needs to be careful because they also have negative behavioral tendencies. It is important to note that everyone can learn to adapt their behavioral styles to different settings to overcome their natural negative tendencies.

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.

Why Purpose Matters?

The day you start your business, you should place “Purpose” at its forefront. This is a critical issue that fails to get enough attention. Many business owners that are asked, “What is the purpose of your business?” will answer “to make money” (or something similar). You might be thinking, “Isn’t that the purpose of being in a for-profit business?” I can confidently say “no.” By serving a purpose well and doing it in a profitable manner, you will “make money.” The greater, the more needed and more desired the purpose you choose to serve, the more money you can make.

If I met you at a party and asked you to tell me about your business, where would you start? Most people tell me about their role, title, function, or product or service. For example, one person might tell me they are the Managing Partner in an accounting firm, or a tax accountant, or an auditor. A CEO might tell me he owns a company that manufactures retail skincare products. However, if that is what they view as their purpose they are in trouble. If you look at the marketplace, there is an oversupply of just about every product and service you can name. Think about it. When was the last time you thought, “There isn’t a tax accountant or auditor to be found anywhere?” When was the last time you heard someone say “I wish I had more choices of skincare products because there are just not enough of them?” It just isn’t going to happen. Because there is oversupply, services and products are available everywhere you go, as well as online and over the phone, and can be delivered in 24 hours.

Now imagine those same people had a different view of what their purpose is. For example, I have an accounting firm client whose purpose is to increase the wealth of the firm’s clients. They have built a set of practice areas in tax, audit, technology, wealth management, etc. For each client they create a team that uses the strengths of each team member to devise the best strategy each year to help maximize their clients’ wealth. While you might point out that every sizable firm has the same practice areas, this firm’s view of what they are doing and why they exist is the difference-maker. My client’s view causes them forge a nontraditional client relationship structure. They build specialized tool kits, hire specialized resources, and act in a way towards their client that has specific intention. I can assure you that not every accounting firm is creating the kind of relationship with their clients that would allow for such positive outcomes to occur and thus they are failing to help their clients reach their fullest potential as a result.

Only after you have established your purpose are you in the position to answer the following questions:

  1. What problem(s) does our business solve for our client?
  2. What should our business do to achieve that purpose
  3. What types of clients do we want to have, and what will our relationships look like?

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.

Are You Targeting the Right Market Segment?

The predictability and consistency of your revenue growth rate are important measures of the health of your business. A key to driving your growth is targeting the right market segment. Positioning your company in a growth industry, market segment, or sector is crucial to the continued success of your company. In order to have future growth, regardless of how you are doing this quarter or year, there must be a market out in front of you that your products/services are focused on and that is growing.

Why Should You Care Which Market Segment You Choose?

When you are in a growth market running the business is much easier in many ways. Here are a few reasons for you to want to be in a growth market:

  • Employees – It is easier to attract, keep and grow the right employees.
  • Customer Acquisition – It is easier to be a winner in a growing market than in one that is declining or stagnant. All boats rise with the tide.
  • Capital – It is easier to attract and lower your cost of capital.
  • Margins – There is a better chance of earning larger profit margins.
  • Operations – Predictable revenue allows you generate cash and to plan and invest properly in the support structure of your business to properly serve your.
  • Shareholders – Higher returns on investment for shareholders.
  • Valuation – Buyers pay more for businesses that are in growth markets.

How Do You Find Your Market Segment?

By focusing time on a specific customer segment you can become the dominant player in that segment. A segment is a group of customers with common characteristics that influence how they make decisions. In every industry you can group potential customers into many possible segments.

Your leadership team must examine the marketplace and cluster people and organizations into groups, separating them based on common needs, behaviors, or other attributes so that they can be better served. Once you have isolated different groupings, you can look for ways they may be underserved today in terms of products and/or services. You do this by asking questions such as:

  • Do they deserve a distinct offering? How well do the current offerings meet their distinct desires and needs?
  • Are they reached through different channels? How well do the current channels work for this grouping?
  • Does this unique set of people or organizations require different types of relationships?
  • How does profitability differ, and could it differ for each grouping? What would need to change to change the game?
  • How much would each grouping be willing to pay for different aspects of the offer?

How Do You Know You’re In A Growth Market?

Failure to identify segments destroys time allocation in your business. I find that this is more obvious when your company is small and time constraints are more serious. In most cases, we consider whether or not a prospect can afford to do business with us, rather than the likelihood of their doing business with us.

However, you know you are in growth market when the following signals are apparent:

  • You can consistently grow at least 20% per year. More would be preferable.
  • Acquiring new customers seems to be easy, and your current quarter compared to the same quarter in the previous year is either the same or growing. Any quarter that shows a dip is a warning sign that an adjustment may be needed.
  • Profit margins appear to be holding steady with volume increase. There are obvious exceptions to this rule as you hit different steps in expansion.
  • You are finding more and more competition in your space. This is why you have to move swiftly and grow quickly when you find a hot market.
  • You can find news media, analysts, and industry experts talking about the trends you are taking advantage of. Follow them for signs in trend shifts.

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.