7 Keys to Working Smarter and Being Highly Successful

After observing thousands of leaders in companies from startups to over $20B in revenue and helping create over $1 Billion in business value, I noticed one superpower in highly successful people. They worked smarter, not harder, and derive much higher results in less time than almost everyone else. These very successful leaders tended to value highly the Management Strategies and Learnings obtained through Business and Executive coaching channels.

For clarity, I deem someone to be successful if they can accomplish three times more than their peers,  have more joy and happiness, and do all of this in less time.  Now, I have to draw a line as many of us are highly ambitious, driven, and are classic workaholics. Most workaholics do not commit to reducing the hours they work and find work exhilarating. Regardless of your view, it would help if you wanted to achieve three times the results and earnings in less time. What you do with the extra time is your business.  But everyone should want to work smarter and not harder.

I am often exposed to CEOs in the same industry and have always been amazed at how varied leader’s approaches are.  To me, the right approach is the one that produces three times the results with a similar effort.  Let’s take the restoration industry.  I have met many CEOs who started their business 20 years before and are stuck at $5M in revenue or less. Also, I have met others that were in the industry for just a few years and had revenue over $5M.   I do not only find revenue disparity. I also find profit and time gaps.  While the average company earns a net profit of 5% of revenue, we have helped companies generate over 20%.  Would you rather be a $10M company that produces $500K of net profit or a $5 Million company that produces $1M in net profit?  That was a trick because you should want to be the $10 Million company generating $2 Million profit, expecting the growth and the profits.

The most successful CEOs build far larger companies, have higher growth rates, have more free time, and have 3x the net profit margin. And, yes, there are other measures of success. I want you to consider that working more hours than everyone else, regardless of what you earn, is a fool’s choice! All I want to do is challenge us to work smarter continually.

Which leads us to the big question: “How can we make it easier to achieve our success goals faster?”  How can a person make far more, achieve their intended impact, and work a lot less? Not only is this possible, but others are already doing it. After watching these leaders, I noticed they were not necessarily smarter, more creative, lack ethics, or privileged.  I have met many highly successful people, some ultra-wealthy, and found that they were formerly homeless, living in trailer parks, had no college degrees, and so on. I am sure all of us are capable of high levels of success.

Achieving success is simpler than you think but not easy. If it were easy, everyone would do it.  The strange part is that we are familiar with the concepts but not living them. Here are the principles you must follow to work smarter and not harder:

(1) Manage Your Thoughts

(2) Have a  Strategy

(3) Be Strategic

(4) Work a Plan

(5) Be Disciplined

(6) Resilience Rituals

(7) Build Wealth

Manage Your Thoughts

There are three dimensions to managing our thoughts: awareness, intention, and perseverance. Our mind is a potent tool. How you think will change your outcomes for better or worse. Thus you need to be aware of what you are thinking. For example, if you make up your mind that someone cannot do their job, your words and actions will differ from those based on the premise they are capable of. Your thoughts need to be congruent with your intentions. If you intend on accomplishing something and focus your thoughts on contrary purposes, you will fail. Imagine you plan to have a good day but your spend most of your day angry about something. 

Once our thoughts and intentions are in unity, we need to have perseverance. When was the last time you set out for something new and challenging, and it worked out exactly as planned? Most often, we find we run into unforeseen difficulties and roadblocks.  If you allow your mind to waiver from the finish line, you may not get there in a practical manner.

Have a Strategy

Too often, I find driven people are in constant motion. They confuse activity with productivity. When they see a problem to solve, they are off to the races.  Often leaders are solving the wrong problems or not taking the best route to solve their problems.  By doing so, you may feel better in the short term, but it could have long-term negative consequences.

I recently witnessed a senior leader get angry with a subordinate because he felt they were taking advantage of the company.  He immediately launched into attack mode and let the employee know how he felt.  While the concern was merited and the employee course-corrected, there were longer-term consequences.  You see, the leader was so busy being right that he lost one of the highest-performing people in the industry. That employee decided to quit his boss.

In the end, the leader was not strategic.  Had he been, he would have waited until he wasn’t angry and would have developed a strategy to course-correct the employee in a manner that was okay for both parties involved. Instead, he may need two people to do the work the one accomplished, and his reputation may cause other competent people not to want to work for him.

While I used a personal situation, the same goes for taking on projects, lofty goals, and conquering the competition. One thing we have all learned is that there are many ways to accomplish an objective. Being strategic requires you to consider achieving the ideal outcomes, choosing what “not” to do, using the least amount of resources, and within the desired time frame. It is usually best to consider expanding your options before choosing a path.

Work A Plan

We are working on a plan ties to being strategic.  However, the critical difference is that the strategy is the vision of where you want to go, and the action plan charts your course from beginning to end—many of us are big picture people. We can see what is possible and have a “can-do” attitude.  The problem with visionaries is they believe everything is simple and underestimate what it takes to achieve the outcome.  Taking the ball down the field is usually someone else’s problem.  To achieve grand visions, I recommend the following project management techniques:

(1) Be specific – The objective has to be clearly stated so that anyone could step in and know what needs to be done.

(2) Make it Measurable – Identify the measurable milestones and deadlines that indicate you are on track.

(3) Action Steps – Identify the action steps necessary to achieve each milestone.

(4) Monitor Progress – There must be processes and systems in place to monitor progress.

(5) Course Correct – When progress is insufficient, it is essential to revisit your plan to get back on track.

Be Disciplined

Whether you are working on getting healthy, achieving your sales goals, accomplishing a major project, it takes disciplined action.  Too often, we like the idea of the outcome but are not disciplined enough to achieve it. Think about dieting. If I eat healthily and eat the right amount of calories for three days a week but overeat unhealthy foods the other 4, it will take a lot longer (if ever) to lose the weight. Where if you ate properly every day, that takes discipline.

My brother Matt is the President of Steven Douglas, one of the fastest-growing recruiting and staffing agencies in the US.  Matt has been a top producer every year since he entered the industry almost 20 years ago.  Most people in his industry only dream of producing his revenue production.  Matt shared with me that he has hundreds of employees, and none of them produce as much as he does. Given that he is President, he spends far less time than full-time salespeople. This caused me to ask his secret. Matt has a list of 300 key contacts he calls every sixty days.  He does this by setting aside one hour daily for outbound calls.  This single disciplined activity has helped him achieve more in 5 hours a week than others can produce in 60 hours.  Successful people are willing to commit to such discipline. I have shared this technique with at least 100 people over the years, and none has had the discipline to implement it.

Resilience Rituals

The airlines taught us a very important less when they told us that we must put our oxygen masks on first before helping others. I have found that highly successful people have a regimen of activities that they use to recharge themselves.  Here are my resilience rituals:

 – 1/2 hour of daily exercise

 – 15 Minute breaks between meetings

 – 15-30 of Meditation

 – 15 Minutes of Quiet reflection

 – Spending time with friends and family

 – Take 4-6 weeks off on vacation throughout the year.

 – Monitor and control my work hours

 – Weekly Massage

It would be best to have the same level of committed discipline to your resilience rituals as your business routines.  For example, if you work out 4 hours in one day, it will not have the same effect as 1/2 hour per day.

Build Wealth

Too many of us are so busy working that we don’t spend the right amount determining how to build wealth. Every very wealthy person I met has at least three streams of significant income.  It is essential that you identify, develop, and give enough attention to your various income streams.  Most people will tell you that the most significant part of wealth came from income streams outside of their day job.  The day gave them the financial start in investing in other activities. Still, many of those activities require learning about and developing strategies and plans to develop each stream. 

In Conclusion

While you can be highly successful without practicing the above activities, it does not invalidate them.  However, by managing your thoughts, being strategic, working a plan, being disciplined, practicing resilience rituals, and building wealth consistently, you will find your path to success with less friction.  Now I challenge you to determine how to use these principles to work smarter and not harder, so you have more time to do the things that are most important to you.

 


Howard Shore is a business growth expert 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 visit his website at Activate Group Inc or contact Howard Shore at (305) 722-7216.

Trying to Sell an Apple to Someone Looking for Chocolate?

Recently, I facilitated a meeting for one of the most innovative companies I work with. The leadership team is one of the smartest I have ever worked with, and there is a clear vision about solving gaps in their market. Moreover, they arguably have the best SAAS platform to serve their target segment. Yet, they have struggled to grow.

Have you ever wondered why some companies seem to grow with ease while others don’t? I have pondered this question because I have seen far too many organizations struggle to grow. For the SAAS Company, the secret showed up in a strategy session I recently facilitated. The conversation centered around one key question, “Why is this SAAS company finding it so difficult to acquire new customers? The answer was not what you would expect.

Are You Answering the Right Question?

Often, leaders are trying to solve their growth issues by centering on the wrong questions and problems. Typically if you asked the question, “How do we increase sales faster,” you would hear answers like:
• We need more revenue.
• We need more leads.
• We need higher quality leads?
• We need better salespeople.
• Our sales manager is not doing her job.
• We need better marketing.
• We need more marketing.
• We need more salespeople.
• Our customers don’t understand why we are different.
• We have failed to articulate our value proposition well.
• Our salespeople need a better process.
• Our salespeople need better training.

Have You Identified the True Problem?

While the above may be components of solving your growth issues, it is likely not your problem. I often see companies spend significant money and time addressing all the above. After years of frustration, they find themselves right back where they started from. They find other companies in their industry growing far faster, and some started much later and far larger. Your company has likely developed great products and services, cares about your employees and customers, works very hard, and has many loyal customers. In addition, your company might have implemented best-practice execution processes like EOS and Scaling Up, and yet the growth outcomes are not getting much better. What gives?

The right approach is to change your question. In my client example, we changed the question from “how do we increase revenue” to “why is it so difficult to acquire new clients ?” I asked the leadership to answer the question with a question. We brainstormed for 10 minutes until we complied with enough inquiries related to the initial question. Here are some of the questions they came up with?
• How do we remove sales friction?
• What would we need to do to increase market share dramatically?
• Why can’t we sell product “A” to our target market?
• Why is there so much friction in acquiring new customers?
• Would it be easier to sell a product that is on par with our competition?
• What do we need to shift in sales and marketing?
• Who is our real target customer?
• What is the evolutionary path for customers?

After developing 25 questions, I asked the team to narrow down the list to one critical question that would address almost all of the questions. The answer was, “why can’t we sell product “A” to the masses?”

By using the new question as a focal point, we were able to discover their real problem. The market was desiring a product they were not offering. Worse, they had the perfect product, and it was bundled into their more sophisticated product. In the long run, their product was more complete and would better serve their target market. The problem, most companies were not ready to consider their full suite, and they were trying to force it on them.

While there is a lot more to this story, I was hoping you could recognize that these extremely smart leaders were essentially trying to sell an apple to people looking to buy chocolate. When the prospect did not see the chocolate, they moved on to the competitors. We realized that we had to metaphorically get the customer into the supermarket and sell them chocolate before they were willing to consider the apple. Chocolate was their primary need. Once they loved our chocolate, we could take them down more isles and sell them more of what they needed.

Stop Trying to Convert the Heathens?

Are you guilty of ignoring the market? This is a common mistake. My client was a great example. They had the perfect product but were so enamored with their complete solution causing them to ignore the market expectations. While they are correct, their product can and will solve bigger, more complex problems, there were too few leaders that were aware and ready to solve them. They were getting ahead of themselves. And, like a good priest or rabbi, they were delivering sermons to inspire and convert the heathens. The problem was that the disciples were not listening. When this occurs, the sermon is white noise. Their best approach was to get the easy win, earn the customer’s trust, and use that as a platform to cross-sell later.

Conclusion – Ask Yourself… and Take Action!

If you are like many leaders, you know that your company can and should be growing much faster. Have you found the right question to answer? Do you know the primary problem? Are you spending enough time facing the brutal facts?


Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about Howard Shore or the firm, please contact Activate Group or call (305) 722-7216.

Three Keys to Maximum Business Performance

3 Keys to Maximum Business Performance

While people have been impacted by globalization, technology, and other circumstances, achieving business success has not changed. Over time, you will need to discuss changing conditions and have a robust operating system maneuvering these issues. But I have concluded that while most entrepreneurs pride themselves on their speed in getting things done, I see them running in circles. More creative entrepreneurs may make lots of rapid right turns instead of circles. Still, they find themselves in the same place and with the same problems as the people running in circles, never achieving acceleration.

 

The Difference Between Speed, Velocity, and Acceleration!

Acceleration in performance should be the goal of all leaders. Most people use the words speed, velocity, and acceleration interchangeably. However, these are three different outcomes. Speed defines how much distance has been covered in a particular timeframe. Velocity is the rate of change of distance in a particular direction concerning time. And acceleration is the rate of increase in velocity. Great companies achieve far greater velocity than “good” companies.

 

Every Business Has the Same Fifteen Leaks

As I wrote in my first best-selling book, Your Business is A Leaky Bucket, there are fifteen ways every business is leaking growth and profits. The bigger the business, the bigger the leaks. No business is immune. The odd part is that you likely already know you have the leaks. And, all fifteen leaks had a centering cause…leadership. They result from poor leadership. These leaks individually and collectively slow velocity, and large leaks can cause demise in your business. My book helps you identify and quantify the leaks. More importantly, I prescribed how to address each leak. Average companies achieve speed, good companies achieve velocity, and great companies achieve acceleration. The latter spend specific leadership time narrowing the fifteen leaks.

Leaders I work with are stunned when they realize how easily they can improve a business. But are often surprised by the dollar value in the improvements. However, easy does not equal simple. It takes discipline to work on the business rather than in it. It takes perseverance to stick to your plans and focus on a limited number of objectives while saying “no” to others. It takes rigor to drive excellence.

 


The Three Primary Reason Business Leaks Occur

There are three primary reasons why those leaks continue to recur throughout the life of your business:

1. Mediocrity—You know your organization and people are capable of more, but you allow average to become the standard for your business. Sometimes, this happens because you attempted but failed to raise the bar in the past. There is also a tendency to compare your business to industry norms and become comfortable if it’s doing better than the industry average—even if that industry average is a massive bottleneck in your business. Accepting the lower standard may be common in your industry, so you accept it, too. For example, high turnover has become the accepted norm in certain positions in some industries. But excessive turnover is a significant drag on a company’s ability to grow and scale. Ask yourself, how often have you taken too long to replace someone you know is not capable of doing his or her job? These are examples of accepting mediocrity!

2. Mastery—It takes discipline and perseverance to continually improve and address the issues that cause slower growth, lower profitability, and cause leaders to be tied to their work. Let’s be honest; when you started your career, were you thinking, “I am going to be a master craftsman at culture, team cohesiveness, strategy, people, execution, and cash systems?” Each of those areas requires skills and knowledge, continuous learning, and continuously increasing your level of mastery. However, as your business grows, so do the challenges in these areas. The typical leader would prefer to focus on industry knowledge, serving customers, and making better products and services rather than think about, discuss, and address those other, less tangible issues. In reality, culture, team cohesiveness, strategy, people, execution, and cash are the business operating systems that you use to run your business.

3. Invisibility—Financial statements do not capture the substantial costs of the weaknesses in your business operating system. Generally accepted accounting principles are only designed to capture actual transactions, assets, and liabilities. There is not a place in accounting principles to capture the cost of mediocrity and lack of mastery. Like most leaders, you do not go out of your way to quantify these costs. Here are some examples of mediocrity that should be monitored and will not be found in your financial statements:

– The cost of keeping underperformers

– The cost of lost sales because of mistakes in the sales process

– The cost of customers who left because of their disappointment with your quality and bad processes

– The cost of a bad strategy leading to higher customer turnover or slower customer growth

 

There are no financial statement line items for these costs, yet they exist in every business. Such losses are much more significant than you want to face, so you don’t! You are complacent with being good enough, especially if you are growing rapidly and profitably.

To succeed in business, leaders must have a business operating system and toolkit that help them work on the business in a way that allows their team members to make clear decisions and act regardless of the noise. Success is the result of your commitment to that system and how well you use the tools that support it. For the past 100 years and into the next 100, you will find that business challenges are the consequence of how effectively leaders handle these six operating systems:

(1) Culture
(2) Team Cohesiveness
(3) People
(4) Strategy
(5) Execution
(6) Cash

 


Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about Howard Shore or the firm, please contact Activate Group or call (305) 722-7216.

What’s Coming That I Do Not See?

Recently a client sent me an email with a curious question: “What is coming that I do not see?” All leaders have asked this question one time or another. However, most fail to address the real reason they had the concern. Max (not his real name) was concerned because his financial results (while very positive) were a surprise. He was wondering if there was a better way to avoid positive and negative financial shocks. The key to avoidance is a better understanding of your financial results and the metrics that lead up to them.

There are 5 Reasons to Become Better at Understanding Your Key Metrics

 

1- Lack of understanding key metrics leads to poor decisions.

2- Fear causes your organization to slow down.

3- Lack of financial vision causes your organization to squander key financial resources.

4- Forecasting focuses leaders on the core issues and leads to business acceleration.

5- Lack of mastery of metrics leads to poor accountability.

Predictable Cash Flow is Achievable

The challenge Max and many other leaders face is to overcome their lack of expertise, commitment, and discipline when it comes to gaining a complete understanding of their financial statements and the underlying metrics that drive them. Unlike factors such as a COVID-type event, most financial outcomes can be predicted with a reasonable degree of accuracy. In fact, it’s likely that most of you who are reading this are not comfortable with metrics and finance in general. That discomfort should not prevent you from requiring the same high standards and rigor you demand in the other areas of your business. The good news is that every business leader can address this problem. Committing to better forecasting will make your business stronger, and you don’t have to empty your bank account to do so.

Lack of Understanding Key Metrics Leads to Poor Decisions

After working with hundreds of companies, I have noticed one difference between top industry performers and the rest. In top-performing companies, everyone knows their numbers. I recently witnessed this in action with Company X (not their real name). Company X has great products and services yet failed to make a profit. We were working with several companies in the same industry. All those other companies had accurate and timely financial statements and the right metrics to evaluate how to improve their financial results. Company X never had accurate or timely financial statements for their management meetings. Worse, management had lost trust in the numbers they did have.

Because they lacked reliable and timely information, they made decisions based on hunches. They made all the logical moves to improve a business in their industry. Unfortunately, they were not seeing or addressing the right issues and challenges. Convinced their whole problem was selling, general, and administrative expenses (commonly known as fixed overhead), the leadership team focused on cutting these expenses. While minimizing overhead is a good business practice, it did not get to the root of the problem. In some cases, cutting the expenses caused the company to be less profitable. They were cutting through the bone.

Company X’s main problems had nothing to do with fixed overhead. In actuality, their fixed costs were lower than that of competitors of similar size. After pushing for better information and competitive benchmarking, they realized their gross margin (revenue minus direct variable costs) was awful. Their gross margin was operating 50% below the better players in the market. It meant that the leaders running their operating departments were failing to perform, and these leaders were hiding in plain sight. In the end, it was determined that they had a pricing problem and direct labor costs required to deliver their services could and should be much lower. Before having this knowledge, they failed to focus on addressing those two issues.

These challenges are predictable and solvable.

Fear Causes Your Organization to Slow Down.

It seems obvious that fear can cause your organization to slow down, but what are you doing about it? Imagine you are in a long dark cavern with many possible turns, no flashlight, and no directions. How fast will you move through that cavern to get to the other side? Most people would slow down and be more cautious. Those who want to try to move quickly are likely to trip, hit their heads, get lost, and possibly injure themselves in the process. Some people may reverse course because they find it too dangerous to move forward or don’t want to go through the trouble.

Now imagine facing the same cavern, except now you have a high-powered flashlight, night vision goggles, and a map showing you the quickest way to the other side. Most of you run your businesses more like the first scenario than the second. And it costs you significantly.

Using the right metrics allows everyone in the organization to contribute to your success. Learning and using your company’s metrics will enable you to show each employee the way to peak performance. The more people that have this flashlight, the better and more predictable your financial results become.

This challenge is predictable and solvable!

Lack of Financial Vision Causes Your Organization to Squander Key Financial Resources.

Getting ahead of oneself is something I wish I could tell you I have never done. I am guilty of bringing on too many people too quickly. Also, I am guilty of investing too heavily in a new endeavor without testing it. We have all done it. I can tell you in almost every single circumstance I should have known better. I was making decisions that defied reality.

A great example is a business services company. They had national growth aspirations, great products and service, a strong reputation in their local market, and the CEO was highly driven. The company was highly profitable, but its growth had stalled in its local market. Rather than addressing the fact that their existing sales team was failing to perform, they doubled the number of sales team members and tripled the number of markets. The result was predictable. Almost all the new salespeople failed. The company got little traction in the new markets, and the old salespeople continued to perform poorly.

You might be thinking, this is an easy problem to solve: Hire the right sales manager, fire the team, and build a new one. That is what most companies would do. However, this company’s data was telling them a story that they did not want to recognize. They had the highest customer churn in years; the owner, who had been a star salesperson in the industry for over 30 years, was no longer producing; and getting meetings with new prospects seemed to take an act of God. After challenging their performance, we learned that their pricing was no longer competitive for the value delivered. Additionally, the market had shifted, and the leaders failed to recognize and address the current market’s needs. Before adding salespeople and a new sales manager, this company needed to address its strategy issues.

By not addressing the real issue, you may be following the plot of the movie 300. The story revolves around King Leonidas, who leads 300 Spartans into battle against the Persian “God-King” Xerxes and his invading army of more than 300,000 soldiers. Despite having 300 of the most formable soldiers globally, there was no way for them to win the battle. I see this same plot playing out in many companies.

This is another problem that is predictable and solvable!

Forecasting Focuses Leaders on the Core issues and Leads to Business Acceleration

Let’s get back to Max. Max leads a company that has lots of good data. They needed more discipline and focus on understanding their metrics, what issues they should be addressing, and how to recognize the leading indicators causing the surprises in their financial results.

After reviewing actual results and comparing them to the forecast, we learned many things. They had identified and used the right metrics but needed to get better and to set realistically high assumptions. In Max’s case, they beat their sales goal but how they originally derived the sales goal had no bearing on reality:

1- They had 40% fewer leads than expected. This happened because they had not done enough analysis to understand how many leads would come from each marketing channel in each market. Had they looked at the past performance, they would have known there was no basis for their targets. And, they had no new action plans that would drive different results.

2- The company exceeded its sales goal by 25%. There was no correlation between the assumptions used to develop the costs. They got the following wrong:

  1. They forecasted having all positions filled in their sales department despite knowing that they were beginning the month with nine open sales positions.
  2. They had several new salespeople who normally do not derive any sales for at least 45 days (their sales cycle).
  3. Their target appointments, appointment conversion rate, and sales closing ratios did not resemble anything close to reality.

Max can now work with the department leaders to improve future forecasts reflecting what they learned. Based on new assumptions, they are going to destroy their sales goals for the year.

This was predictable.

Lack of Mastery of Metrics Leads to Poor Accountability

To establish a proper accountability system, you need a clear understanding of your metrics, the same metrics required to build your forecast. Invariably, forecasts and budgets are wrong because they are built the wrong way. In most cases, leaders look at last year’s numbers and decide at a high level what they want the new numbers to be. However, the devil is in the details, and not the details most budget creators think about.

Leaders need to spend significant time understanding the leading metrics (e.g., number of units sold, number of people required to sell that number of units, number of new customers, number of returning customers, etc.). It would be best if you looked back to understand the trends and underlying causes of those trends and project forward what will happen to these leading metrics in the future based on your business plans. A good example is Max’s company. The number of performing salespeople is a crucial component to the company’s success. Fewer performers will ensure lower results. Thus, key considerations are what percentage of salespeople meet quotas and whether those quotas are reasonably high enough to justify the employee’s tenure.

You might be wondering how understanding metrics ties to accountability. Max’s sales manager believes she performed well because she beat the budget. However, the budget was a farce in that none of the company’s performance standards were met in her department. Despite exceeding the revenue budget, the number should have been higher. This conclusion arose by looking at a complete set of metrics rather than the final revenue number. A primary driver was the number of open sales positions.  The lack of people caused them to fall well short of potential.

Moreover, once we started evaluating the critical success metrics (e.g., number of meetings, meeting conversions, etc.), it was clear that there was a lack of integrity in how they were derived.  Not even management was confident about what they should expect. You can’t hold a person accountable without valid expectations.

The results could have been predictable, and this problem is solvable.

Now What?

Practice, practice, and more practice. You can only get better at forecasting with commitment, discipline, and continuous improvement. And the Finance department is not solely accountable for forecasting. Instead, it is a process that requires input from everyone. All leaders need to help develop the metric targets related to their departments. It is also helpful to run the standards by the employees that must deliver on them. The feedback is where the gold lies.

With practice, I believe every leadership team can produce highly predictable results. Each time you go through the evolution of a new forecast, you will learn new ways to improve performance and strengthen accountability in your organization.

Howard Shore is a business growth expert 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 visit his website at www.activategroupinc.com/contact or contact Howard Shore at (305) 722-7216.

5 Keys to Business Success

As many of you have learned from my seminar “Turning Strategy into Action,” the difference between business success and failure can be broken down into a few factors. While some owners are lucky to have the right product at the right time, most find that if they do not do these 5 things they will either fail or, worse yet, discover that they would have earned a better living by getting a job.

Only 16% of All Businesses Make Money over Their Lifetime!

While we do not like to discuss negatives, there some realities we need to present. According to the Small Business Association, 1/3 of all businesses will close their doors after 2 years, and 60% will do so after 5 years. If you do not find this concerning because you have passed the 5-year threshold, you might find it interesting to note, according to the National Federation of Independent Business, only 39% of all businesses are profitable, 30% break-even, and the rest lose money over their LIFETIME.

5 Keys to Being in the 16% Pool

The good news is that turning a profit and staying in business is much simpler than these statistics would indicate. In our experience, most of these businesses failed or did not make money because they mistakenly thought that knowledge of their trade or business was the key to success, and hard work was what it took. While these are essential elements without which you will surely fail, they are not the keys to success. Lack of funding would be number 7 or 8 on my list of reasons by businesses fail.

If you want your business to succeed the following are the top 5 keys to success:

  1. Have, Communicate and Drive Your Vision/Purpose
  2. Strategy
  3. Financial Planning and Review at Least Monthly
  4. Establish and Communicate All Company Goals
  5. Commit to Goals

9 Signs that Your Business is Under-performing?

If you answer “no” or do not answer with a strong yes to any of the following questions, your organization is probably under-performing in the areas of sales growth, customer service, employee satisfaction, innovation, and profitability:

  • Does your management team look forward to participating in your annual planning processes?
  • Does your organization regularly achieve all or most of the financial and non-financial goals set forth in your plans?
  • Does everyone in your organization know specifically what the goals are in your plans and how they will contribute to achieving them?
  • Do the actions in your organization regularly resemble the plans?
  • Do you get regular input from all levels of your organization and use that information to develop your plans?
  • Do you know what trends are going on in your industry, who your competitors are, what your competitors are doing, and what your opportunities and threats are?
  • Do you get regularly input from your customers (not just complaints) and use that information to develop your plans?
  • Do you have specific market segments you are focusing on?
  • Do you know what capabilities, management systems, people, and other resources you must have in place now, for the future, and by when?

Proper Planning Is Critical for Companies of All Sizes

Many small organizations mistakenly think that answering the above questions applies only to large companies and that they can wait to become bigger to take this very important step. They are among the 50% that fail in the first 5 years.

On the other hand, many companies go through the annual rituals of strategic planning, business planning, and budgeting, and completely miss the value of these very important business processes. They spend valuable time, money, and resources to develop written plans that bear little or no resemblance to what actually goes on in the business afterwards. Instead, business goes on as usual, and the plan goes in a desk drawer or on a bookshelf. At the end of the year, financial success or failure is met through other means.

Planning is the journey that you take your management team through to balance near-term performance with that of the long term. Your goal is to maximize your long-term returns on investment in your business while meeting short-term financial needs. In our experience, we see many leaders focusing their planning process on creating numbers (budgeting) that will yield the profits they want to see at the end of the year. Amazingly they will go through phenomenal amounts of detail to get precisely to the wrong numbers. They are the wrong numbers because the reality is they have no idea how they will achieve these numbers, which is the point of planning in the first place. In these companies, it is not uncommon to hear one of two things at the end of the year 1) they achieve profits in some unexpected way, such as the pricing was extraordinarily good (not sustainable), or 2) they missed their numbers and offer lots of excuses that have nothing to do with poor leadership.

Let us help YOU take your business to the next level. Take the next step and contact us to learn more about how Business Coaching can help you and check out the testimonials page to see how we have helped other executives like you.

How Do You Build a Valuable Business?

If you would like to learn how do you build a valuable business and get top dollar for your efforts, read further. Many business owners spend years building and working in their business with little or no thought about their value creation. One of my responsibilities at a Fortune 500 company was building one of its divisions through acquisition. While we successfully grew the division from $400 million to $600 million in revenue, I am most proud of the fact that we received almost $1 billion when selling it. This price was 38% higher than anything imagined internally or by investment banks we hired to explore alternatives. This had everything to do with how value was created.

There are a many factors to consider when building value. In this article I want to address the following:

  • What are motivations for selling and buying?
  • What can my business do without me?
  • What should I be doing while I am going through the process?
  • When is it the right time?
  • What do I do when I think it is time to sell?

What are motivations for selling and buying?

To build value it is important to understand why selling and buying occurs. This understanding can be the difference between receiving top dollar for your financial and “sweat” investment, selling in a position of need, or worst of all, getting nothing. For example, by positioning yourself to appeal to more types of buyers you can be more selective in your suitor and auction your company to a higher bidder rather take the only offer that comes to the table.

The top reasons to sell:

  • Lack of operating capital
  • Need for growth capital
  • Elimination of personal guarantees
  • Age
  • Health
  • Boredom/burnout
  • Liquidity/cash out
  • Perceived incongruence between risk and reward
  • Market opportunity

The primary reason people buy a business is for return on investment. The justification for a return will include:

  • Remove a barrier to entry
  • Eliminate competition
  • Strategic fit
  • Geography
  • Customer
  • Employees
  • Tangible and/or intangible assets

What can my business do without me?

Imagine going to buy a used car, and the existing owner wants to sell it to you for top dollar. There is a catch, you can only have it without the engine and the seats. In this scenario, it is likely you are going to look for a different vehicle. It is not that you cannot put a new engine and/or seats in the car, but why buy that car in the first place? If your business success is primarily dependent on 1 or 2 people, and you are one of them, you are going to have a very hard time selling your business, if you can sell it at all. It is common to find a business that has not invested in finding, developing, and nurturing the best talent.  As when buying a used car, you want to know that you are buying a reliable car that will run long after you take over the keys and title.

What should I be doing while I am going through the process?

For those of you who have children, have you had one of those moments where you took your eye off the baby, and he or she disappears? You felt fortunate nothing terrible happened. Well, watch your baby. Whether you have a strong business or one that is on life support, I recommend that you continue to run your business as if your life depends on it. On average, it takes 12 to 18 months to sell a business. Worse, sometimes they do not sell at all. Your competition, customer, and employee needs do not change or go away because you decided that you want to sell. The last thing you want is to lose a major customer or key employee while going through this process. In addition, some of the things you are going to be evaluated on include: how strong your growth potential is, customer and employee retention, strength of employees, and operating effectiveness. While they do look at the past, buyers will give more attention to today and will pay more when the trajectory is upward.

Most of us have gone house hunting and would agree that you are willing to pay more for a house that you think is going to appreciate more in value than others, has all the extras, is on a great lot, nice paint job, no clutter, good lighting, happy atmosphere, and great landscaping. Invest in your business like never before. I would invest in people development, brightening the atmosphere, team building, paint job, and signage. Hopefully you have been doing these things all along. If you haven’t, you are going to be pleasantly surprised by the results you have been missing.

When is the time right?

Sell when the market is ready. Waiting until you are ready can be a big mistake. The idea is to sell high and be careful that you are not overpaying to keep working. I attended a seminar offered by SmithBarney Citigroup, and they presented a very interesting analysis about paying for the privilege of working. The Geneva Capital Strategies group did an analysis of historical transactions and showed where owners were actually losing money by keeping their businesses. They actually would have been better off reinvesting the net after-tax proceeds from their sale into other investments and not working at all.

It is typically not a good idea for you to sell your business when it is down, or if you think that prospects are not good. Buyers see the same things you do and rarely buy what the seller thinks he is selling. Even if they don’t agree, buyers are usually going to try to take advantage in terms of price. It is always best to sell when business is good (e.g. market share and sales are growing, margins are expanding, and business climate is strong).

What do I do when I think it is time?

Do not try to go this alone. I can tell you from first-hand experience that people who hired the wrong type of advisors or none at all cost themselves 20% or more in sale price. There are reasons why people make a living in this arena. For example, structuring your deal incorrectly can cost you 20-50% of the cash in your pocket. In addition, it is very important to get assistance to bring multiple qualified buyers to the table and to have someone very experienced at negotiating the sale of a business. There have been cases where sellers have been able to more than double their price by bringing in competitive parties and having a seasoned negotiator working on their behalf. Just because you have good negotiation skills does not make you qualified to sell your business.

The following are some of the different advisors that can help you to build your valuable business and you should consider contacting when selling:

  • Business Valuation Experts – Independent of any business intermediary, hire a valuation expert to determine what your business is worth. Contrary to common opinion, there are no rules of thumb that can be used to determine worth. Every business is different, and you need to know what you are worth before you get into the emotions of the process.
  • Business Consultant – Before you hire someone to market the business for sale, you should do all you can to increase value. Bringing in a consultant to look objectively at how to increase profits and strengthen your team can yield huge dividends. Depending on how the buyer is valuing your business, every $1 you increase in profit through revenue growth or cost savings may multiply by $10 in sales price.
  • Mergers and Acquisitions Experts/Investment Banks – They will help you at every step of the acquisition process. They will help develop your offering circular, develop a selling strategy, identify potential suitors, provide advice on pricing, packaging and positions, and most important give your business maximum exposure in a confidential way. They typically have ready and qualified buyers, access to the right people, highly qualified staff, and excellent negotiation skills.
  • Business Brokers – In the case of smaller deals, a business broker can help you market the sale of your business. You are not going to get the same quality as Mergers and Acquisitions or Investment Bank experts. You want someone that is going to bring you multiple buyers and negotiate effectively on your behalf. Many in this industry are not working on this full time and act very much like real estate brokers. However, the good ones can bring a lot of value, help you dramatically reduce the time it takes, and increase the value you get for your business.
  • Accountants and Lawyers – Obtaining good legal and accounting advice is a must. However, many people place too much trust in their accountants and lawyers to consult on value creation, finding the deals, and evaluating the deals. These are not their areas of expertise, and they are not best suited to help you in these areas. In some cases your lawyers can be helpful in negotiations, but that depends on their practice specialty.

Review our website at to understand how an executive coach or business coach can help you build a valuable business, or contact Howard Shore at [phone link=”true”].

Consistently Grow Revenue at Record Levels – Article 1 of 2

By Howard Shore, Executive and Business Coach

There are very few CEOs that are not concerned with sales growth. Ninety-five percent of CEOs that I have spoken with this year described their sales growth as follows:

A)     Overall sales are below last year.

B)     Overall sales are about the same as last year.

C)     We are growing, but our growth rate is slower than that of our top competitors.

D)    Our growth rate is slower than last year.

E)     Our growth rate is not where we want it to be.

While this may not be a surprise, you’ll be interested to know that the solutions are easier than you think. Even more fascinating is that many companies are meeting sales targets that have been set extremely below potential. This article and the next will discuss how you can continue to consistently grow revenue at record levels.

One of the hardest and most important skills executives must learn or add to their repertoire is forecasting. It is most common to find two types of companies, those that fall well below sales expectations and those that meet them. Both should be concerns. The former usually miss their numbers because they are pulling numbers out of the air with no real plans. This group is under the common misconception that there is no way they can predict their numbers and believe they must guess. The main issue here is the harm this does to the company when you have no real measurements and standards to which you can hold people accountable. In these companies, hitting goals is no indication of good or bad performance because the numbers have no substance to them.

The typical excuse for failing to properly forecast is that the nature of the industry is too volatile and uncertain for accurate predictions. With the proper tools and talent management can conquer these challenges. The other excuse commonly offered is that the company is too small (or its margins are too thin) to hire adequate talent. The answer to this is simple. It costs far less to hire than not to hire. You must pay what it takes to hire the right person or person(s) or hire a consultant to come in at least quarterly.

Then there are the organizations that meet expectations. While it is possible that some companies set and achieve aggressively ambitious expectations, this is rarely case. In my experience, these companies use poor reference points (e.g. what they have done historically), allowing cultural norms to hold them back, fearing failure, and/or using ineffective incentive programs. A great example is a client that hired me because their historical norm of 8 percent in annual sales and profit growth had slowed to 3 percent. During the strategic planning process it was determined that their annual growth goal would be 10%, as they were concerned about harming their culture.

We developed a good strategy, and in the first year they grew 30% in revenue and 40% in profit, without doing any acquisitions or harming their culture. This sounds like an amazing success, but something stunning happened at about halfway through the year. The company was so far ahead of projections (actually 50%) that the leadership team stopped pushing and complacency kicked in. They lost focus on the business plan and failed to execute most of the business plan goals, even though they were achievable. At the end of the year one of the owners confided in me that it was very hard to get anybody focused when everyone was fat and happy.

I find that, regardless of the industry, if you are under $500 million in revenue and not consistently growing at 20% or more annually, you probably have a strategy issue. If you have a good strategy you should be growing at the top end of your industry’s growth rate, and in many cases your industry’s growth rate becomes irrelevant because you are far outpacing it. Many companies I encounter do not have a strategy. In other words, there is very little difference, if any, between them and their competition. These companies believe they do not have time for strategy and/or do not spend enough time engaging their best people in strategic thinking. If you are not setting at least 1 day aside per quarter for strategy, you are leaving revenue on the table. Most companies have great underdeveloped opportunities right within their organizations. They are too busy focusing on issues that seem important (and are not) and allow themselves to be taken away from truly driving the business to the next level.

Additionally, it is common to find companies with good strategies whose management unwittingly fails to understand what their strategy really is. In other words, they do not really understand the key reason why their customers have chosen them over the competition. Case in point, a company thought their customers chose them because of great quality. The economy turned, and they decided to cut staff to manage profits. Sales dropped almost immediately. As time went by, management noticed that sales were dropping much faster than expected. This was initially misinterpreted as the result of the bad economy rather than the staff cuts they made primarily in the customer interfacing areas of their business.

Eventually management started to realize that the company was losing market share, which meant that their sales were slowing much more than the competition’s. They decided to have a third party conduct a customer survey. From that survey they learned that the real key to winning customers in their business was great service. In the end, they refocused strategy around customer service, and the results were outstanding, with sales growth rates outpacing those prior to the economic downturn.

In the end, if growth rates in sales are not at the top end of your industry, or at least at 20%, look toward strategy first. In article 2 of 2, we will assume you have a good strategy and will address what you can do from an operational perspective to boost sales growth.

Review our website to understand how an executive coach or business coach can help you increase the success of your career and business, or contact Howard Shore at [phone link=”true”] or shoreh@activategroupinc.com. We bring proven tools that lead to new ways of thinking that lead to better results.

Consistently Grow Revenue at Record Levels – Article 2 of 2

The first step in consistently growing revenue is strategy.  You know you have a good strategy when your revenue growth is over 20% and/or at the top of your industry group.  However, growth is not easy to sustain.  There are roughly 23 million firms in the US, of which only 4 percent get above $1 million in revenue. Of those firms, only about 1 out of 10, or 0.4 percent of all companies, ever make it to $10 million in revenue and only 17,000 companies surpass $50 million. Finishing out, the top of the list, the top 2,500 firms in the US are larger than $500 million, and there are 500 firms in the world larger than $11 billion.*

Article 1 focused on the importance of strategy and having the right personnel on your team to help forecast the future.  While this is essential to building a high-growth organization, I have seen many an organization develop great strategy and forecast well and still not get it done.

Last weekend, my client and friend, Raul Segredo, CEO of Avionica, became the star of this article. Raul runs a very successful and fast-growing aviation company. He took me flying in a six-seat airplane. In our mission for the day – going to lunch – he took me through his routine, one that I believe exemplifies the way to consistently grow a business at record levels: having everything you need to see on one page, looking at leading indicators, and great communications systems.

Pilots regularly do exactly what the CEO needs to do. When we got to the plane, Raul had a routine that I will call leading indicators for a safe flight.  He inspected the entire plane to make sure that everything was the way it should be (equipment check, fuel check, etc).  He did not take off until he knew that he was not putting himself, his plane, and his passenger in danger.  He knew where we were going and had the flight charted on how to get there.  He had the proper training and knowledge to adapt to conditions if unexpected events occurred. . While we were in flight, he had everything he needed to see on one panel to stay on course and fly a successful mission. Lastly, had anything gone wrong, there was a communication system in place to address issues.

Goal Alignment

Goal alignment is a key to consistent growth. The best way to do this is to reduce your strategic and business plan goals to a “one-page” format.  Not only is this achievable, it is imperative.  The concern of many leaders is that there are a lot of moving pieces in their business and their tendency is to want to control all of those pieces.  This causes a lack of focus and too many unfinished things.  Rather than trying to feed the entrepreneurs’ desire, the one-page format forces them to focus only on what is most important to them “now.”  Using this methodology, everyone has the same control panel but with differing measurements, depending on their roles and responsibilities.  Some of the columns are the same for all, such as core values, vision, company targets, and brand promise.  However, there are columns on the control panel that are specific to the individual/department such as: accountability, actions, and measurements. On this control panel there should be no more than 3 key priorities and core measurements of focus.  In the end, all align with the CEO’s control panel.  By utilizing this method, you provide for complete alignment throughout the entire organization

Leading Indicators

As an affiliated coach with Gazelles, Inc. we are called upon to help the organization implement the growth tools talked about in “Mastering the Rockefeller Habits” by Verne Harnish.  As part of its strategic planning processes, an organization must identify core stakeholders and processes that drive growth.  Once identified, it is imperative to have the 2 or 3 leading indicators that will let you know in advance (e.g. revenue and profit) that you are well on track to do well.  By focusing on these leading indicators you will better execute on your strategy and thus better sustain your growth.

A great example was a technology development firm that was growing over 100% per year.  After 4 years of consistent growth at incredible levels and being on the top of most highly recognized magazines’ (e.g. Fortune and INC) lists, they were seeing a decline in performance and turnover in employees who were considered stars.  Originally the CEO thought that the company was outgrowing his people. Ultimately, he realized that he was burning everyone out.  As a result, the company developed a new leading indicator of “Employee Hours.”  They looked at all of the projects and made it a company requirement that all projects were staffed and planned to fit within a “60-Hour Work Week.”  This became a critical leading indicator to their success and sustained growth. This goal actually revolutionized the way the company thought, improved quality, reduced cycle time, employee retention, customer satisfaction, and actually increased growth.

Another great leading indicator that is highly recommended for every business is Net Promoter Score (“NPS”).  In “The Ultimate Question,” author Fred Reichheld introduces the NPS as the way in which leading firms transform their customers into promoters.  The survey focused around one simple question, “Would you recommend us to a friend?”  The analysis shows that on average, if a company increases NPS by a dozen points versus competitors, it can expect revenue growth to double.  This is a radical change from the customer satisfaction score, which is totally ineffective in predicting success for a company.  .

Communication

You would think by the title of Patrick Lecioni’s book, “Death by Meeting,” it would be about companies having too many meetings. Actually, the point of the book is that companies have too many bad meetings. Your organization must have a system of daily, weekly, monthly, and quarterly meetings that focus communications around what is critical to driving your businesses, preventing bottlenecks before they happen, and promoting teamwork. Design meeting agendas to discuss those topics that will drive your business, using the information you already prescribed in your “one-page” plans.

Summary

Growing consistently at record levels starts with strategy.  Once you have developed a good strategy, you may not grow as much as you should because of poor execution of strategy.  The key is to learn from my friend Raul to be a good pilot.  Have a good flight plan that you can fit on one page, use leading indicators to identify issues early, and have a great communications system so you are able address problems rapidly and maximize growth and profits.

Review our website to understand how an executive coach or business coach can help you increase the success of your career and business, or contact Howard Shore at [phone link=”true”] or shoreh@activategroupinc.com. We bring proven tools that lead to new ways of thinking that lead to better results.

* Excerpt from Mastering the Rockerfeller Habits by Verne Harnish.

Superior Performance Requires Mastering Core Values: Article 2 of 2

If you study any organization that exemplifies sustained superior performance, you will find a remarkable culture. This culture is defined and constructed around the core values institutionalized by your executive team. In other words, the core values, when practiced on a daily basis, help top companies become more successful than their competition. This article discusses how implement core values into your organization.

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

Once you have developed your values, execution through spaced repetition and consistency is imperative. This is the most difficult and important part of forming your culture. Everything we have learned in life we have learned through spaced repetition. Think about how you learned the multiplication tables. Indeed, this is the method the advertising world uses to imprint the messages they want us to receive. Likewise, an organization must develop a system for all employees to regularly hear, see, and act the company values.

In Mastering the Rockefeller Habits, by Verne Harnish, in the chapter “Mastering the Use of Core Values,” he does an excellent job of identifying how to institutionalize core values into your organization. Mr. Harnish has put together the following checklist to make sure that you do not have a gap in building core values into your business. If you have not read this book and want to accelerate the growth of your business, I highly recommend it!

  • Storytelling – Everybody enjoys a good story, and many great leaders have taught through parable or storytelling. Identify some “legends” and current stories that demonstrate each value. Stories can provide explanations for any core values that might seem unusual or cryptic on their own.
  • Recruitment and Selection – Design your interview questions and assessments to test a candidate’s alignment with your core values. Then, rate the person in terms of their perceived alignment with each core value. Your goal, after all, is to make sure your new hires fit in to your organization’s culture.
  • Orientation – Once hired, your new employee must be brought into the culture. Like many social organization initiations, orientation (you do have one?) is when you can inculcate the company’s core values. Consider organizing your orientation around the teaching of your core values.
  • Performance Appraisal and Handbooks – Core values should provide the framework on which you build your performance appraisal system. With a little creativity, any performance measure can be made to link with a core value. In addition, organize your employee handbook into sections around each core value.
  • Recognition and Reward – Organize your recognition and reward categories around your core values. You also gain a new source of corporate stories and legends each time a reward or recognition is given that highlights a core value.
  • Newsletters – Why struggle to come up with a catchy title for a newsletter when some word or phrase from your core values will do beautifully? Highlight a core value with each issue, incorporating stories – yes, more stories – about people putting these core values to work for the betterment of the company.
  • Themes – Use your core values to bring attention to your corporate improvement efforts. Milliken, the textile manufacturer, takes one of their six core values and makes it the theme for the quarter, asking all employees to focus on ways to improve the company around the theme. The Ritz-Carlton chain goes to the other extreme and highlights worldwide one “rule” everyday. In either case, establish a rhythm that keeps the core values top-of-mind in a repetitive fashion.
  • Everyday Management – I’ve found that managers and CEOs can repeat core values almost endlessly without it seeming ridiculous – so long as the core values they’re using truly are relevant and meaningful to their employees. When you make a decision, relate it to a value. When you reprimand or praise, refer to a value. When customer issues arise, by all means, compare the situation to the ideal represented by the value. Small as these actions may sound, they probably do more than any of the aforementioned strategies for bringing core values alive in your organization.

Conclusion

One of the hidden secrets to maximizing corporate growth and profits is the establishment of core values. If you want to see employee satisfaction, employee retention, customer loyalty, new business growth, vendor loyalty, an improved pool of job candidates, innovation, and brand improvement, focus on core values. The rest will follow.

Review our website to understand how an executive coach or business coach can help you increase the success of your career and business, or contact Howard Shore at [phone link=”true”] or shoreh@activategroupinc.com.

Take Control and Increase Growth: Article 3 of 4

The purpose of this article is to help business owners understand the key daily decisions that influence dependence on external funding and either limit or expand the growth potential of a business. There are essentially 4 decisions: 1. cash; 2. people; 3. strategy; and 4. execution. This article (#3) addresses strategy, which is the primary driver of growth. If you are not growing in the top tier of your industry segment you have a strategy problem.

The first and most common strategic move for most CEOs in a difficult economy or a sales stall is to “do nothing,” the definition of which is “insanity.” The CEOs won’t admit they’re doing nothing. They will make minor tweaks to their existing strategy, if they even have one, and delude themselves into believing they made significant changes. Or, their big changes only affect the internal company. Growth and sales are always about the customer. The root to a growth issue is the customer’s perceived value of your product or service and whether someone is willing to invest/spend their money with you. When customers stop spending money with you, what they are really saying is that they don’t see enough reason (e.g. value) to give their money to you. This is why this intense focus on cost control today is a big problem. While it is important to manage businesses in a prudent manner, we must balance that with addressing customer needs and wants. Many of the changes companies are making today actually exacerbate their growth problem, negatively affecting customers by reducing the quality of the products and services they receive. What their customers need is more value and service, but companies are moving in the other direction. Rather than cut costs, I suggest spending what it takes to address your customer’s changing needs.  Otherwise someone else may get your customers.

In the typical “do-nothing strategy” leaders believe that their growth issues are due to external forces, everyone else is experiencing sales declines, or some other self-limiting belief. So they keep doing the same things, cut costs, and try to wait things out. This strategy has some hidden costs that are never measured such as:

  • Lost customer goodwill;
  • Increased mistakes from exhausted employees;
  • Loss of good people;
  • Sloppy decision-making from a tired management team;
  • Missed business opportunities because the “cost control” mentality prevented an “investment” mentality; and
  • Lost market share because new companies entered your market space, and old competitors took some of your market share.

The second path that many CEOs take is to try to redefine their business model. This strategy rarely works, is highly risky, and almost never necessary. It assumes that what the company currently does and its core competencies have no value in the marketplace. This is highly improbable.

The best strategic course of action for a company to take to reignite growth is to utilize strengths already possessed in ways that are important to a specific target customer base. Many times companies define their target customer too broadly or use the wrong criteria, such as company size, geography or some other inappropriate specification. The secret to dramatic increases in growth typically already lies dormant inside your company. You need to recognize it and match it up properly to customer needs. A book called The Inside Advantage by Robert Bloom has captured the essence of identifying more clearly your desired core customers and aligning their needs with your capabilities in a way that dramatically increases growth. If you have a strategy problem here are some thoughts from Inside Advantage and some additional ideas to consider:

  • Can you describe your strategy in one sentence? If you can’t you do not have one.
  • Can you vividly describe your core customer in one sentence? This may not represent your predominant client mix today.
  • How can you adapt your unique offering to this core customer in a way that you can own and leverage and cause more of them to buy from you?
  • What will your persuasive strategy be to convince your core customer to buy your uncommon offering instead of the competition’s?
  • How does everyone in your organization need to change the way they do things to own this strategy?
  • How are you going to make your strategy well known to your target customer?
  • What are your brand promises, and how will you measure them?
  • What is the X-factor/bottleneck/shortage/chokepoint in your industry, and how are you going to control it to give yourself an exponential advantage?
  • What are your top 5 external opportunities and threats?
  • What are your top 5 internal strengths and weaknesses?
  • What are your core competencies?

Contact me today to learn how Activate Group helps individuals to increase their success and works with organizations to attain consistent revenue and profit growth rates of at least 20% annually. Call [phone link=”true”] or e-mail me at shoreh@activategroupinc.com.