“What you should do is…”, “What you have to understand is…”, “Yes but….”, “Like I said to you before…” If a person started their sentences like this odds are people wouldn’t feel a sense of camaraderie and warmth. Shockingly though, in many business environments people are saying statements like these left right and centre. How to tackle these behaviours is through learning the art of building rapport. Previously, we discussed creating company culture, but with a lack of rapport within a business the culture will invariably remain as it was. Bringing people along on a journey is critical to a business and other relationships which requires more than one person’s help. It’s also a skill that all levels of business people (and people in general) can learn to create goodwill and galvanise other people to an idea. Once it’s established it can be used to gain trust, find common ground and eliminate differences.
93% of How. 7% of What
Building rapport starts with the words we say and ends up being about what we don’t say. Most of what we really have to communicate is done through our actions. For example, 7% of communication is done through words, 38% through the tone of our voice and 55% by our body language(1). To get a real sense of another individual it is best to have a conversation with them face-to-face, that way we can absorb the remaining 97% of what they are trying to say.
Two Layers in Rapport.
What you see isn’t what you get.
There are two levels of how we experience communicating a message to another person. The conscious level and the unconscious level.
On a Conscious level, rapport can be created by doing a host of actions that are obvious to the other person which whom we are connecting. They include dressing the same same, speaking the common jargon, discussing the same topics, watching the same programs and sharing the same hobbies.
The Unconscious ways to develop rapport is through “matching and mirroring” and paying attention to the tone of your own voice. These are subtle cues which are difficult to read by the other person but conveys more information about your intentions than any spoken word.
Become a reflection
In sales teams, one of the techniques that they train to their staff in is to “match and mirror” the other person or prospect. That is, to become a visual reflection of the person sitting opposite them. In psychology school they are taught the same technique. So why is matching and mirroring so important in human relations?
When you adopt the body posture of the other person, it is showing to the other person that you are not only listening with your ears, you are listening with your entire body (2). In the case when the opposite person’s posture is hostile (e.g. crossed armed, crossed legs, tense face), then you can choose to adopt the most open posture you can (hands on knees, not crossed legs, relaxed face). This relaxed posture shows that you are open and willing to listen their point of view. The other reason why matching and mirroring works on the unconscious level is that it gives the other person permission to be themselves.
Dulcet or Dictatorial?
The tone of voice that a person chooses to use will steer the direction of the conversation, and in some cases its outcome. If the initial tone that is taken is “to tell” the other person something, regardless of the body language, the conversation will soon go south. Tone goes hand-in-hand with building trust when we are developing rapport.
Additionally, paying close attention to our breathing will help control the tone of our voices. How quick or slow are we breathing? Is it through the nose for deep breathing or is it shallower, through the chest? When we listen to our own breathing we can adjust it to match the purpose of the conversation.
Tone of voice can be applied to personality profits. For example we can learn to applying different tones of voices to the 4 DiSC Personality Types to help a group or individual of the same preference feel comfortable. Below are suggestions on how to approach each DiSC Personality type when there is a high level of one of the 4 quadrants present:
Use the Force Luke
Once a Business Leader has mastered the art of building rapport they have the choice to use the positive energy they generate for achieving all sorts of positive goals: business growth, mending relationships, creating societal change, inciting a peace rally, saving the planet, joining the Rebel Alliance. The reason why rapport brings people together is because of what it does. It reduces the number differences between people and increases the number of similarities. With more people like you around, the world would be a much better place to live in.
Saving hard earned income from a business is a practise that in theory we know we should do and we should do it often. Putting away some of the in-goings so that we live to see another day is important. It’s when we see that large number in our account that there is an overwhelming (and completely normal) response which urges us to spend it. The following month or quarter or year the bottom line of that account begins to look a little on the anemic side at best.
Protecting your flanks
At One Week At A Time how to manage income is a topic many Business Leaders raise. A popular way to explain how to manage inflows of cash is through using the old American saying “don’t eat your seed corn”. Sounds like something someone would say in the 1852 story, Uncle Tom’s Cabin (written by Harriet Beecher Stowe), but it’s a powerful saying that - for want of a better expression - yields results.
Don’t eat your seed corn is a farmer’s saying and it means “that every seed that comes through your hands has the potential to either be eaten or planted for next year’s harvest. You need to make sure that your farm always has enough seed corn to replant the fields on your land so you can enjoy another harvest, next year. If you eat [all of] your seed corn, you won’t have anything to put in the ground and you lose the farm”.(1) The concept behind this story is that by storing away some of the cash that is produced from a business, that a future investment can be made from those savings.
Common Sense Set Up
Before we explore a simple set up of funds, it’s important to note that once a Business Leader decides to engage in a financial change, that they seek out expert legal advice. One Week At A Time are not tax accountants, lawyers or wealth managers (and if you do need those people we can certainly point you in the right direction). What we discuss in our series is the principals behind setting up a business and other areas such as common sense account management (rather than the ins and outs of financial advice). For Business Leaders who are looking to divide their funds the common sense way and to follow what we have found work for our clients, here are three accounts to consider setting up (as a bare minimum):
The above would be where a business could start in managing their accounts. Your business may want to set up an additional account for a “rainy day” to hold 3 months worth of monthly overheads, just in case there is a quiet patch that has extended out longer than the business expected.
Tipping in and staying out
The Profit Account is designed to allow the Business Leader a platform to have a future. Perhaps, rewind that thought back for a minute, and think about what a business does for the Business Owner and Business Leader. It’s not often that people share this fact about what businesses actually do:
When a person owns a business, the business itself is not necessarily going to make that person wealthy. If they sell the business for a large amount, then yes, that can be true, however more is the case that wealth comes from the investments made using the cash brought in from the business. How that investment dollar is managed the yields from those investment decisions will determine the level of true wealth.
As amazing as all of this sounds, creating true wealth requires just one very difficult behaviour to remain constant. That is, tipping in regular deposits into the Profit Account, and more critically - staying out of that account (refraining from making any withdrawals for non-wealth building investments).
Glimpse of Greener Pastures
Setting goals to create a long-term personal future is the next step in not eating your seed corn, harvesting for seasons to come and finding areas in which to grow that investment capital. There are many areas a Business Leader can explore to grow their Profit Account including further building the current business, although we don’t recommend that option at One Week At A Time. What out team suggests to Business Leaders is that they take those savings and purchase accumulative assets not related to the core business, such as property, stocks and bonds and even derivatives. We also strongly suggest before making a move in any of those directions, to research thoroughly each area so that it suits the end purpose and goal.
A Profit Account is an active representation of freedom for a business (who knew finance could be exciting!). Business Leaders in possession of a healthy Profit Account may use the funds to buy a run down business that, with some talent and industry know-how, wouldn’t take long to turn around. Whatever the choice winds up being, there is certainly an abundance of opportunities and many pastures to explore without leaving the paddock that you’re currently in. All it takes is a small step and a lot of discipline.
(2) Kiyosaki, R. T. (1997). Rich Dad Poor Dad. TechPress Inc. Arizona. USA.
How do the leading businesses create great company cultures that foster high levels of teamwork and peak performance? And how can we create the same levels within our own environments? When approaching these questions we tend to reflect on our personal business relationships, how we worked those out, where we fit into a team in the past (or didn’t fit in) and we remember the places where we truly did our best. Understandably we feel that our relationships are often developed by creation, moulding, listening, rather than by some form of predetermination.
Culture within a company is more about setting a group of behaviours from the outset, upfront, for the whole business to follow and to use in recruitment. People do have different personalities and as we have seen in previous One Week At A Time videos and discussion papers, people also have the ability to share and display similar traits and behaviours as well.
Set the opening and closing scenes
Company culture can be likened to setting the scene of a play. Ensure that when staff enter your arena, they have a clear set of parameters on how they need to perform their role for the whole production. This is in addition to the technical “to do list” of the job at hand.
In an existing business developing what the culture will look like can be an exciting activity, and is better when it involves everyone across the business. For Business Leaders of all sizes as well as in start-ups, company culture starts with addressing the following:
For example a business may want to display behaviours that are synonymous with being warm, friendly, professional and always willing to step in (even if it’s outside of their core job). The way to achieve that outcome begins with a culture statement consisting of positive behaviours like:
Or alternatively there may be a set of different words which are required to ignite organisational change such as (3):
In culturally successful organisations, these buzzwords are developed and added into a everything that they do. From a Culture Statement provided at every induction, to a plaque displayed in reception and a statement put on the company website. It’s the heart of the organisation.
For Business Leaders who are sceptical of the value of Creating Culture, take a look at the leaders of organisation culture - Virgin Mobile. Their culture statement is:
Heart. Spirit. Collaboration. Imagination.
At the Virgin Australia Group, our people are passionate champions of better. We strive to do better every single day and we do it with heart, spirit, imagination and collaboration.
United by this purpose and these values, we can do things that most people would think impossible.
Our aim is that every person we come into contact with - our guests, our customers, our colleagues and the community - will feel and experience better based on the interactions we have with them.
The experience with Virgin Mobile is very much aligned to this statement. How do they do it? They include it in everything. Customer Service, Technical Support, their On Hold Message Voice, you name it. A critical area that their culture is displayed is in the recruitment of its people. Virgin recruit on the basis that newcomers develop (or already possess) these four key attributes. And that’s what we can do in our businesses. We may not have squillions in our budget like Virgin Mobile, but what we do have is the ability to choose our people wisely, develop those we have, and create a culture that reflects our shared values.
Drive down attrition
Turnover of staff in any business is an issue and in previous discussions we talked about the many reasons why people leave organisations. But let’s talk about what attracted them to the business in the first place. The culture of a business can be seen as a tribe that has been developed and it’s only natural that certain people will want to join that tribe with its many rituals. In the recruitment process, finding that new member in the selection discussion can include a question asking what they are be looking for in their working environment. After all they might be spending 8 hours of their day with you. An organisation which looks after its people through a positive culture has proven to keep staff turnover numbers very low (4). Events such as monthly team get-togethers, weekly sharing sessions, annual events, fun runs, charity events and other activities reflect the company culture gives those within it, many reasons to give back to the organisation.
Prevention rather than cure
Not all roads will be driven on smooth ground and most people will find an adjustment period or an ongoing issue which requires resolution. It may be that the person(s) involved are finding it hard to communicate, work with each other or overcome their differences. When a manager or senior person approaches an issue, there should be no surprises in how that issue will be handled. This is largely due to the additional safeguard where a business has included the expected cultural behaviours into the performance reviews, the conflict resolution process and every position description. Issues are commonplace in all organisations, but how they are managed through is a direct consequence of how the business has developed its culture.
If the expectations are set out in all areas of the business on an individual personal level your team will start to quickly self-manage and self-regulate in even the stickiest of situations.
Living the dream
After we have written down a set of expected behaviours, added them into PD’s, produced the world’s biggest poster for the staff room the true test of culture ultimately comes down to each person in our tribe. Are they living and breathing our words? Put simply, creating company culture means - saying how you’ll do it, and then….doing it.
1 Goldsmith M. (2007) What Got You Here Won’t Get You There. Hyperion. New York, USA. (p 114)
2 Carnegie, D. 1936, How to Win Friends and Influence People. Gallery Books. New York, America. (pp 161-166)
3 Lecioni, P. (2002). The Five Dysfunctions of a Team. Jossey-Bass. A Wiley Imprint. California, USA. (p188)
Wallflowers. Party Animals. Party Organiser. Blenders. You probably know which one of these might be you and we’ve seen many variations of these themes in our lives, but can we really spot similar groupings in other environments? It’s harder to identify homogeneous behaviours in groups of people because people generally behave differently at parties as they would in other situations. Added to that, we have the many filters through which we see the world - work, family, money, spouse, possessions (Covey 1989, pp 119-121). There also are differences in tempo and behavioural norms when we enter businesses and deal with unfamiliar or formalised environments.
The science behind unlocking which party person may be seated at Boardroom Alliance table, interview or work site was introduced in last week’s One Week At A Time. The groups were identified as Conscientious (C), Influencers (I), Dominant (D) and the Steady (S). This week we are able to further explore those profiles and place them in the following quadrants:
From this table we can see that those who have a skew toward “D” or “I” have an outgoing nature, however those with “D” prefer activities with tasks with or without people, and those with “I” prefer activities mainly involving people. If the skew is toward “C” or “S” the person has a more reserved nature, and in the case of a “C”, may be very reserved or introverted. The main idea behind DiSC is that no matter which quadrant a person mainly prefers, knowing the team around them means they can quickly adjust their behaviour with the other types for a desired outcome.
There is Steady and there is S-t-e-a-d-y
Each person who undertakes a DiSC will be asked a series of questions, and as we touched on last week, different scores will be assigned to each of the 4 main quadrants. The score which is the highest is considered the “high” score placing a person into the category of a High D, High C, High I or High S. The number itself can be very high on the scale or mid range but still the highest of the 4. For example, a person with a very high S score (80) may be more pronounced as an “S” type than a person with a lower level of S (53). However as both have a main preference to S, you will still find both of them standing together by the water cooler exchanging stories about their 10 year Cricket Club Anniversary or the annual boating trip they went on with their friends from school.
Trainspotting DiSC Profiles
There are many traits which are associated with the main DiSC profiles. To spot one of the 4 “high” displaying types you’ll find the below traits shine through:
High D’s They are unstoppable! A doer with drive and determination. Fly the flag and see it sail out to sea. On the other hand they can be arrogant but deep down they won’t care much about that, too busy blazing trails (or at least delegating to other people to blaze the trail for them).
High I’s Super fun loving and entertaining. Great to have around because when the party is on, its ON. But they like to take that spotlight and point it over their own heads for a long time. Good news is that they won’t know they are doing it - they’ll be too busy enjoying the attention.
High C’s Detail is the name of the game. Doing it right and to a high degree of accuracy and criticism. However, they prefer to look at the glass half empty, questioning why their glass has 50% less in it and could someone please explain if this an experimental glass, and if so, are they the “control” glass….bla bla bla bla and so it goes on.
High S’s These are the steady people, your “buddy”, and they take it slower than the rest of the pack because they aren’t afraid of letting life do its thing. Around 70% of Australians are S in profile.Their nature can be confronted sometimes by those “bossy” conversations that need to happen.
It’s now easier to see how people can display certain DiSC profiles - we come across varying levels of these kinds of people everyday. Many Business Leaders have used the information from DiSC about their staff and were able to start to devise a plan of how to manage them better, transforming the workplace and producing a well-rounded team.
Chipping away at the iceberg
DiSC also shows us with a fair amount of accuracy, what a person is likely to do or decide when we first meet them. The iceberg (the exposed section of a personality) is the first thing that we see when we first meet people and more often and not, behaviour is all we have to go on to evaluate a person. In business we can use DiSC to find the best people to work in areas such as recruitment, sales, operations, management, marketing, administration...anywhere. When teams become unstuck it is at times when they don’t understand each other’s behaviours and can’t respond effectively to each other in times of stress or when they are in a wave of never-ending orders. As a Business Leader we need to be confident that the people around us are what they say they are, and will do what we hope they will be able to do at the moments of truth. The High D drives us, the High C checks, the High S keeps it all rolling, and the High I breaks up all that seriousness and tells us all to lighten up - you’re not saving lives (unless you are, and in that case, it’s a joke in poor taste).
References Covey S. R. (1989) The 7 Habits of Highly Effective People. The Business Library, Melbourne Australia.
When we have a job to do and we experience people who we perceive are interrupting us, slowing us down, diverting our attention or just plain getting in the way of what we set out to achieve, it can prove to be frustrating and unproductive use of our time. Finding out how to motivate and discipline ourselves so that we don’t get caught up in the cycle of interruptions is a an ongoing process. In our personal journey in business and in life, we find out that we make mistakes, we try and learn from them to resurface into a better, more authentic person. Added to this inner journey Business Owners, Entrepreneurs and Managers are placed in positions of leadership which require a simultaneous understanding of themselves as well as other people’s internal workings. Creating a positive relationship with yourself and your team often is the quality that winds up separating a good leader from a regular “boss”.
Meet and greet
Approaching a new (or entrenched) team can depend on the kind of person that you are under times of stress. We often fall back to automatic, comfort behaviours when we face the unknown or uncomfortable situations. For example you may be a person who likes to be liked, and turns a situation into a series of fun interactions while and at the same time, you can’t find it in your heart to have a conversation which may involve dismissal. On the other hand you may be a person who finds tense conversations roll out more easily however, it turns out that others feel as though they are under constant scrutiny by you. These are two examples of behavioural types which managers and staff experience all the time. Finding out who is likely to behave in a certain way, in advance of a potential conflict, will prepare both people (the giver and receiver) to approach each other differently. The tool that One Week At A Time utilises to find out likely behaviours is called the DiSC Profile(1). It was founded by William Moulton Marston(2), who incidentally invented the blood pressure component of the lie detector test. William Marston’s DiSC profile (extracted from his book The Emotions of Normal People) is now an internationally recognised psychometric assessment that both managers and their teams use to be able to understand each other. Marston’s believed people sat on two axis - passive or active - and he developed a way of approaching people’s behaviour stemming from that basic premise.
DiSC as the pre-season warm up
Before you head out into the field for a game together, DiSC can be used as a form of a team warm up session, to help everyone get used to each other’s style of play. When times are calm it’s much easier to temper our behaviour it’s when times are difficult that DiSC is critical. A recent survey found almost 46% of Australians would rather look for a new job than deal with a workplace issue (or worse still, take a sick day in the hope that the issue will “blow over”)(3). Addressing main preferences in a person and finding where people are the same as us, builds trust and confidence to address issues rather than shy away from them. Using the below 4 basic styles of DiSC profiles(3) will begin a better positioned conversation:
“D” Dominance - (active) direct, self confident
“I” Influence - (active) talkative, enthusiastic
“S” Steady - (passive) cooperative, patient
“C” Conscientiousness - (passive) accurate, structured
Each person has a combination of all 4 with higher or lesser degrees of each of the styles (which we will go into more detail about further into One Week At A Time). The style that a person will most identify with is the one that they are mainly presenting, for example a person with 30 D, 50 I, 10 S, 15 C will most likely say that they are a “High I”.
Tip of the iceberg
DiSC will show whether a team has a skew or a manager has a preference which is complementary or counter to a team. These preferences are pointing to behaviours which influence what kind of actions and decisions that group or person is likely to make (especially under pressure). When we first meet people, knowing this information is important because we won’t really learn about that person on a deeper level until we have spent a great deal of time and many years with them. Below is an example of the human “iceberg”:
The iceberg shows us that the initial information about behaviour, above the water, is crucial in quickly establishing connections. In business, we don’t have the luxury of time to get to know people, which is where DiSC comes into its own. It will reveal the tip of the iceberg of a person, and give us enough information to couple with people’s skills and demeanour so we can make grounded decisions and positive interactions.
Selling has been around since the 8th century BC in Athenian agora and the Italian and Spanish forums. So why are we still trying to work out the best methods? You’d think that, by now, we would know how to close a sale. Sales is still a widely studied subject and hotly discussed topic in all businesses. The simple truth is, not everyone knows how to sell something. A lot of us know how to make it, talk about it, research it or analise it but selling a “thing” is an art form and a practise that takes time and experience to master.
What are we really doing
When try to sell anything what are we actually trying to do? The simplest way to approach this question is to remember that when we are selling anything - from software, mobiles, appliances to insurance, healthcare and electricity - anything at all - what we are doing is connecting with another person. Although beliefs change and the world changes, the principles of selling from one person to another person are surprisingly the same. Why? Because, we are all human, we have the same primal drivers. We all have needs, wants and aspirations. We want to make sense of our world and use objects to reflect out, what we think within ourselves. If our world changes, then the objects change, but not the feelings of needing or of wanting. That’s what’s consistent.
Think about it. Selling, at its basic form is building relationships to uncover other people’s needs and wants. What are we selling to others is the satisfaction (Beckwith 2003, pp201-202) of having those needs and wants met. How we do it comes down to a little bit of flair, lots of imagination and a heavy dose of listening.
A festival of senses
In the story told by Lundin, Paul & Christensen in their book Fish!, MaryJane arrives at an open market, not wanting to buy anything in particular and wanting to get away from her stressful team at work. She’d heard about the open market in the neighbourhood and decided she’d try it out. It was not long before the excitement of the markets came to life for her - fish being thrown about, loud laughter, counter staff smiling, tens of people being served at the one time. It had it all! The anticipation of a bargain, the exchange of views, bustling people, the last minute sales, the variety - everything that a marketplace promises to have - a real sense of atmosphere. It was all about “the noise, the action, the energy” (Lundin, Paul & Christensen 2000 p32). All highly successful business have created for themselves some form of “theatre” similar the open markets.
Taking the time to create a total experience turns people into bees swarming around a hive of honey. When we use our senses we sidestep the rational, intellectual parts of the brain and we behave very differently. A smell, like burnt wood, for example, can recall a very powerful memories and evoke strong feelings(1). Hear the sound, smell the freshly cooked food and see the orders fly out. Restaurants are much like markets, they have the high levels of anticipation, groups of people and food envy all rolled into one….I’ll have what they’re having!
Engaging the senses fuels our imaginations, connects and reminds us of our wants and needs. That’s why the long standing author on selling, Tom Hopkins still rings true when he wrote over 20 years ago that “the more senses you involve, the better your odds of making the sale” (Hopkins 1994, p82-84).
Real estate agents know all too well how to ignite the senses. They couple music, event buzz and even the smell of freshly baked bread (2) in an open house to boost sales numbers. Selling the sizzle, reminding us that although a product or service is available, we need to create how a person will gain a sense of satisfaction when they purchase it. The easiest way to simulate this feeling is to place the customer in the environment - conjure the sights, the smells, the sounds...let them see up close, how it will work out for them.
Serve unto others
Okay, let’s put the shoe on the other foot. You’re at a counter. Ready to buy, with your wallet in your hand. Everyone you know said that you “have to” go there. So you eventually go, you take a look around and there’s no one on the other side of the counter. Fifteen minutes later, someone slowly meanders over. They tell you that they don’t know how to manage your order and you’ll need to wait until ‘so-and-so’ is ready (you’ve stopped listening at this point to remember what so-and-so’s real name is. In your mind you’ve already started calling so-and-so some names of your own). What happens next? Personally, I would have high-tailed it out of there for any low-involvement, low-cost items. When there are hundreds of other people selling it - I’m going to find those other people!
Selling to the senses and making a memorable experience also involves the moment when the customer is ready to buy and wants to connect. This is where a sale is made. Quickly building a relationship is critical to sales - regardless of the product. A customer may be ready to buy one thing and they come back, have another conversation with a well trained salesperson then buy into other areas of the business. “You have to listen to the music as well as the lyrics. Often what people really want doesn’t show up directly…” (Blanchard & Bowles 1998, p55). Having a great customer conversation that builds rapport can mean the difference between hearing the ringing of customers coming through the door or the dull sound of the air-conditioning unit.
A great business is one that’s great at doing business with people. Selling the sizzle is about selling an experience and backing it up by salespeople who will sell “the right way” (Smart & Street 2008, p16) to generate loyal repeat customers and creating powerful memories in the hearts of minds of others. It doesn’t have to involve creating a full scale production, it can start with something small and significant….like having someone at the counter, willing and ready.
Beckwith, H. (2003) What Clients Love: A field guide to growing your business. Warner Books. New York, USA.
Blanchard, K., Bowles S. (1998) A revolutionary approach to customer service: Raving Fans! HarperCollins. London, UK.
Hopkins, T. (1994) How to master the Art of Selling. HarperCollinsBusiness. London, UK
Lundin S. C., Paul H., Christensen J. (2000) Fish! A remarkable way to boost morale and improve results. Hodder and Stoughton. London, UK
Smart G., Street R. (2008) Who Ballantine Books, Random House Publishing. New York, USA.
We all have all developed a very mild level of attention deficit in recent
times. We can hardly help it with all these different ways of connecting
with each other available to us.
Have you heard the latest news? Let me text it to you: -- OTUS AFAICT dog saves fam. troo TIME -- [on a totally unrelated subject as far as I can tell a dog saves a family, I have true tears in my eyes]. If that’s not accurate enough and you need to save time selecting letters why not try using emoji’s? [dog warns its family of a fire in the house and they call the fire brigade to put it out]. What about when you’re feeling bored and want to say hello to your friends but don’t have anything to say? Snapchat will solve that problem. Find a funny photo, snap it, send it, job done.
Email may hit it over the net for you if it’s more involved than a snap, text or you feel (worried) your message isn’t being received the way you’d like for it to be. Nowadays we are asked to do more than one thing at a time, have our attention on multiple sources and we can feel a sense of restless making us we flip from contacting our friends, to watching the weather, watching a documentary or reading a report all at the same time (Lencioni 2003, pp 51-52). How can something so heavily used like communicating be one of the the most common sources of frustration, anxiety and tension when we do it so much, each and every day?
A web of messages
The reality of today’s day and age is that we have so many ways to connect with each other we have confused this with our inability communicate. Many of us still need to develop our communication skills. That is, sending a message that says exactly what you meant, in the way you wanted it to, and it is received that same exact way by the person(s) you’re telling it to. Sounds easy right. It’s one of the most difficult of human skills to attain. How many times after an argument have we told ourselves “why weren’t they listening?”. That’s because communication goes in two directions and we often forget one very important end of that stick - ours.
Major challenges in businesses revolve around this theme of communicating with each other in order to reach goals, grow and get a business going. Having the technical know-how within a business is just one hurdle to overcome, communicating effectively is the next hurdle, one which never fails to cause headaches and sleepless nights. In One Week At Time a quirky and effective sentence is used to illustrate how, as Leaders, we can say the exact same thing with only a slight change of emphasis, only to we wind up changing the entire meaning of the whole sentence altogether.
Coming at you from all corners
When a person has shifted into a position of leadership the levels of communication can fly out at them from all corners of the world and in super fast speed. Some days will feel like we’ve had a series of endless conversations. Learning how to handle those interactions will lessen the load and provide a stronger shield. Some of the regular things that Business Leaders are called on to communicate and participate in are (HBE 2004 p17):
How much or how little a Business Leader contributes to these discussions is highly personalised. Regardless of this, the intention, emphasis and selection of what message they would like to convey in those situations (and others) is critical to the business and has major flow-on effects if received well (or not).
Back to basics
Not everyone is interested in an invitation to an Instagram page, Twitter feed or a blog. And as a Leader you may opt out of one or all of these new found ways of connecting if they aren’t serving your business any purpose. And that’s perfectly okay. Learning how to communicate as a leader means you can choose how you want to gather information as well. Leadership communication is something all Business Leaders can develop (Owen 2011, p148). Some leaders also choose how to understand their teams, some even personally get to know their staff, colleagues and peers one-on-one. Of course, the suggestion here is not spend copious amounts of time talking to each and every member of your staff, as that would be counterproductive, which is why we set up structured meetings, times and places. The suggestion here is find assistance to develop the skills of saying what you need to say, when you need to, and to the right effect.
So let’s get started by getting back to basics. In every business its Leader will need to urgently converse with others about important matters. For those moments, the team at One Week At A Time are very keen on using just one marvellous connecting device for those circumstances. We refer to it as - talking on the telephone!
Owen, J. (2011) Leadership Rules: 50 Timeless Lessons for Leaders. Capstone Publishing. United Kingdom.
Restak., R Dr. (2003) The New Brain: How the Modern Age is rewiring your mind. Rodale Ltd. United Kingdom.
(HBE) Harvard Business Essentials (2004) Managing Projects Large or Small: The fundamental skills for delivering on Budget and on Time. Harvard Business School Press. Boston, Massachusetts USA.
Plan and Achieve - every 90 days
When we hear the saying “never look back unless you’re planning on going there” we agree with it completely. Why visit old ground, over and over again if it’s not getting you anywhere? Although our thoughts agree with the logic, a part of us can’t resist remembering how it used it be - back in the day, and it's true to say that a lot has changed since then - every sector in society has been redeveloped or redefined from education and healthcare to housing and construction. We are now living in a world of constant change. For a business to remain competitive today, decisions need to be made according to what has happened in more recent times like, last year, last month and even last week. The speed of communication is rapid and consumers are used to demanding instant responses due to the spread of social media and technological advances. Building a business into a viable organisation big or small does require a return, but not a return back in time, but a return to learning updated principles of management.
In order to achieve anything of real substance in our personal lives we require to set a goal. In previous papers for One Week At A Time we talked about how writing down goals will ensure that actually have a good chance of working on them. The same applies to business management. Planning ahead using definable goals will shape behaviours, show consequences and influence future decisions (Blanchard & Johnson 2015, pp 83-85).
For the most part, when people are faced with an overwhelmingly large undertaking a common response is to look for the first exit and try and make a run for it. Taking a large vision for a business for example, doubling the profit margin of a business within 6 months, then breaking that down into small activities that will create that change is more palatable and easier for teams to feel they can actually achieve that goal. Success is the sum of small efforts repeated day in and day out and if we make the effort, we will get better (if we don’t, then we won’t) (Goldsmith and Reiter 2015, p139). This thinking comes to the fore when a business develops a 90 Day Plan.
Plan to make small but significant changes
A short term plans help develop commitment within in the business because the goals and activities are relevant, rooted in the ‘now’, and small enough in size that the team can tackle them. Start planning with where the business needs to go in the next 6 months, year and two years, giving a timeframe and deadline to work within. The first actionable plan however is one which focusses on the activities which have a deadline of the preceding 90 days only. This is essentially how 90 day planning works.
Following is a list of what every successful plan includes to ensure a business is on the path to achievement (Tracy 2003, p150):
Develop a clear vision & purpose
Write down your goals, defined into top areas of the business
Prioritise each goal and set a completion date
Identify key obstacles or difficulties for each goal and organise them as well
Identify the skills and knowledge that is required to achieve each goal
Identify which person, group or association will help achieve the goal or goals.
For Business Leaders a personal plan can be incorporated in parallel to include the type of life that that person aims for, including holidays, personal pursuits and other personal goals such as retirement.
Celebrate the battles won
The greatest time to go back in time and reminisce is to celebrate the small battles that your business and team have won in the previous 90 days past. Send the message that the sum of all parts do make the whole and without the people working in a team together those achievements couldn’t have happened. Make the change in the business from could’ve-would’ve-should’ve into…. We-are-doing-it-bigger-and-better. Now. And that’s the true value of 90 Day Planning.
90 Day Planning Template
Please contact Action Victoria BusinessCoach, Brett Burden on telephone 1300 971 763 or email email@example.com to request more information on starting your own 90 Day plan.
Blanchard, K., Johnson S., (2015) The New One Minute Manager Meets the Monkey. HarperCollins USA.
Goldsmith M., Reiter M., (2015) Triggers. Crown Business. New York, USA.
Tracy B.(2003) Goals! Berrett-Kohler Publishers, Inc. San Francisco, USA.
When there is a role vacancy in business we often go on autopilot. We write a short outline of what’s involved and start advertising it across various job seeking outlets, receive resumes (sometimes over a hundred!) and then try and sift through all the paperwork to invite the lucky few for a face-to-face interview. The quality of the applicant depends on how well they have matched their skills to the advertisement through their cover letter and resume. When we follow this path we are on track for a 57% success rate. This can be improved marginally (to an approximate 63% success rate) when we use reference checks. This ultimately leaves over one third of roles advertised to end in an epic fail.
What would happen if the regular recruitment process was turned completely upside down? Could we still find the best candidate to join the team? Of course we can. And we can achieve a higher success rate, faster.
Working back from the middle
Let’s look at the type person who will be interviewed. Often this is the middle of the process, but in this new method it’s the first port of call. The question we want to answer is - what kind of person are they? How we do this, is through the DiSC personality profile tool. In One Week At A Time, the recommendation is to also profile the role before it is advertised to candidates.
The right seats on the bus
Finding the right people to sit in their designated seats within a business is an art form. Each role within a business displays different sets of behaviours and extracting what those are takes some science and investigative work. Following is a small subset of questions to start the search:
Does the job call for….
Analysing data and facts before acting?
Quick and forceful decisions?
Logical thinking before making decisions?
Each of the above questions starts to formulate the picture of the kind of person that would be attracted to the role. Rank the need of each dot point from 1 to 4 (1 being the most important). There are over 10 sets of the above questions that are applied for a role fit. It’s interesting to learn that from just the above set, “quick and forceful decisions” is indicative of a D personality type, whereas “tactfulness” is aligned to an S personality style. If the ranking is given a 1 for “tactfulness” that will mean a social personality type may work in the role.
Each assessment that DiSC applies to, results in varying levels of all of the 4 styles. The four styles are: Dominant, Compliant, Steady and Influencer. The main preference (the style that is the most used) is the one that is most likely to be “leaned on” when the pressure is on.
Glass Slipper that fits
Each of the main preferential DiSC styles - Dominant, Influencing, Social and Conscientious are associated with fitting best with different kinds of roles. Below is a list of roles that may suit each style when there is a clear single style preference:
High D personalities are typically found in roles that are managerial, political, executive, entrepreneurial and they can even be found in the military.
A dominant C personalities suit roles that are highly analytical and critical such as a film critics, engineers, scientists, architects and skilled craftspeople.
A person on the high S scale would excel in roles that involve support and understanding e.g. customer service, medicine, insurance, advisory positions and psychology.
And the party going I is an entertainer, salesperson, coach, and wonderful host/hostess.
Once the role has been DiSC assessed, there are keywords which will invariably strike a chord with qualified candidates who have the same dominant preferences. For example a role may turn out to be a high combination of I and S therefore the advertisement must include trigger words such as ‘positive energy’, ‘cooperation’, ‘warmth’ and ‘team spirit’. Candidates will read the recruitment advertisement and immediately ask themselves “is this me?” and only those who answer “yes this sounds like me” will be contacting the organisation. The quality of resumes will be sent through on the strength of the subtle, but powerful word associations.
Whether a role is a high D or a combination of D and S, DiSC will extract the core preferences required to get the job done well. The highest levels of success has come from this methodology, achieving a staggering 88% success rate. Using DiSC on each role means the right people really will become your greatest asset.
DiSC Assessment Requests
Please contact Action Victoria BusinessCoach, Brett Burden on telephone 1300 971 763 or email firstname.lastname@example.org to start your new wave of recruitment using DiSC.
This is a story about catching one of the cleverest, cunning, and elusive creatures in the jungle. These creatures were the spider monkeys of South America. They lived high up in the trees and were virtually impossible to catch. As the fable goes, the hunters had terrible problems trying to catch them, until one day they came up with a plan. They found several heavy containers, made a hole no bigger than the arm of the monkey into each, and placed them on the jungle floor. Inside, they put a nut. The monkeys then descended from the trees, saw the nuts in the containers. Once they grabbed the nut at the bottom of the container, their fists were too large to come out of the opening. And the container too heavy for them to carry, so instead of letting go of the nut, they just sat there. The hunters would come back the following day and simply pick them up and throw them in the bag1. Freedom was just a matter letting go of the nut.
Our minds are much like spider monkeys. Clever. Decisive. Stubborn at times. Always checking, analysing and questioning. And more often than not, when our minds are made up, we can refuse to let go of a notion (or a nut) causing us to feel trapped, stuck or even disempowered.
Monkeys have choices. And we do too.
It’s pretty easy to say that all the spider monkeys had to do was to let go of the nut and run back up the tree. What if the nut was a new 3 year contract paying seven figures? Would you still hold onto the nut? Maybe. What if that seven figure contract meant your family could upgrade both cars, employ a nanny, send the kids to elite schools and buy several investment properties? It would be difficult to find a person who wouldn’t want this nut. The trap of course, is that this contract takes up 80% of your personal time including weekends. Is the sacrifice worth it?
The mind is an instrument that can justify just about any decision that fits into a world view and supports inner motivations. Motivations are powerful drivers in making up minds. They can support choices that can help us grow as people and they can also support choices that can hold us back. In the story of the spider monkeys, the monkeys were afraid of missing out on eating the nuts. And it wasn’t the nut, but the fear of losing the nut that held the monkeys captive. The mind latches onto many different devices in order to make a decision and fears can often creep in and be the basis of choices. The most common fears found in everyday life are the fears of poverty, criticism, illness, relationships breaking up, ageing, and even dying (Hill 2003, p262). Holding onto something which may or may not eventuate because of fear, can consume the mind and take the focus away from making choices (and finding choices to make). Being stuck or feeling stuck occurs when a person isn’t aware that they can change a situation by making a different choice. And the same can be said when leading a business.
Beliefs shape behaviours and outcomes
When a Business Leader finds problems in their business they often look outward for the reason why something has gone wrong. The business may be undergoing a seasonal quiet period, the staff may all be new and require training (or retraining), the holiday season may not have attracted the high volumes of customers. As the situation worsens the Business Leader tries to make sense it by perhaps asking a spiral of questions. Should I change my products? Should I change my staff? Are my products priced competitively enough? Should I sell my business now or wait? These are valid questions. Decisions and choices are constantly being made throughout each day of running a business.
Turning around a business does require business knowledge and nouse, and it also requires a strong mental position from its leader. This type of leader is one who is aware of their personal constraints, who knows that the business is, in part, a reflection of who they are and what they personally stand for. In small to medium sized businesses the Business Leader is the highest point of major decision making so how that person thinks matters. A lot. Finding which nuts (mental beliefs and styles) we are holding onto is almost as equally as important as finding which parts of the business needs improving.
Shifting mental positions takes courage, and the ability to see that leaders can be a source of constraint is an invaluable step toward driving the business into the future. Thinking differently about a business could mean the difference between a five figure profit margin or six figure profit margin.
In the The Seven Habits of Highly Effective People the author aptly explains that “...all things are created twice. There’s the mental or first creation, and a physical or second creation...” (Covey 1989, p99). When a person mentally visualises an idea, they have already created it...once. All that needs to happen now is to create it a second time, in the physical world. So before a viable idea is conceived, ensure the platform it’s being developed on is a sound one.
Foraging for nuts
There are many techniques to use to find a Leader’s personal “blinkers” or “blind spots” of perception. It may be personal style, understanding a business’ limitations or other factors which stem from a behaviour within the business.
Below is an example of a set of the questions to use for identifying a personal style or behaviour that may be holding a business back (Flippen 2007, pp 48-49):
For every positive behaviour or belief, like a thriving on spontaneity, there is an opposite effect as well. Being spontaneous may work against a business if the Business Leader is constantly changing direction, not completing projects in pursuit of other more interesting projects, and struggling to create a consistent clear position in the market.
Other nuts or beliefs that we hold include looking for ideal behaviours in people. For some leaders it may be hard to realise that there is no ideal behaviour in business, only degrees of behaviour (Goldsmith 2007, p191). People can only ‘better’ themselves, they will never be perfect. And there is always something or someone better out there anyway. It’s the want of improvement that develops people, rather than a long held belief that people must be perfect before they are accepted. Leadership requires letting go of judgements because “if you manage your people the way you’d want to be managed, you’re forgetting one thing: You’re not managing you.” (Goldsmith 2007, pp 205 - 209).
Taking stock of the areas that are holding back a business could also involve accepting the business’ limitations. The business may be booming with orders left, right, and centre. The tipping point however may be that if another, say, 200 orders were received, the staff, back end operations team and suppliers, would all be completely overwhelmed. The nut in this situation is receiving more orders, and when that nut has been released, the additional orders can be placed on back-order leaving the remaining orders to completed. Although big challenges are great they can only be fulfilled when there is a loyal team and a stream of repeat customers to come back to the next day.
The moral of the story
The reason why successful Business Leaders become introspective is because they want to find out how they personally affect the business. Once they understand this, they can seek direction from experts and gain the support they need to achieve their next goal (Blanchard 2005, p 112).
Fables like the spider monkey story illustrates how choices that can free us are right in front of us, but they are hard to comprehend when we are tightly holding onto something that isn’t serving us. Letting go of unproductive beliefs, thoughts, styles, behaviours and circumstances creates a new world of possibilities to bring to our business and to our lives.
Blanchard, K., Fowler S., and Hawkins L. (2005) Self Leadership and The One Minute Manager. Harper Collins. Hammersmith, London. United Kingdom.
Covey S. R. (1989) The 7 Habits of Highly Effective People. The Business Library, Melbourne Australia.
Flippen F. (2007) The Flip Side: Break Free From The Behaviours That Hold You Back Springboard Press. New York, America
Goldsmith M. (2007) What Got You Here Won’t Get You There. Hyperion. New York, America. (p 216)
Hill, N. (2003) Think And Grow Rich. Random House. London. United Kingdom.
In the world of business, many of the successful people are really good at making things happen. They tell others how they “get stuff done”. We read about Sir Richard Branson, Jeff Bezos, Larry Page - mostly handy information to help others in their own businesses. Excellent advice is readily taken when it’s given by some of the best business people of our modern times. Interestingly enough though, our conversations with those top people often steer away from discussing what direct interactions they actually do inside their businesses. In this paper we will discuss how to discover personal strengths, much like these inspirational business people have done, focus on them, then use them to build a business whilst still working with fully functional staff in their own specialist areas.
Where is the best place to work if a person is a Business Leader? That depends. Sir Richard Branson said “I love learning...it starts with inquisitiveness”, he waits until others are in a market, evaluates their current situation and then does it better1 (deploying a team). Jeff Bazos knew he was clever and saw that as a gift, however his real success came from making choices, which was a far harder task (and more rewarding) than riding off his gifts2. What these successful people are referring to when they talk about strengths has nothing to do with their natural talents, skills or knowledge. Strengths are defined by specific activities that go beyond conventional labels of recruitment. Author Marcus Buckingham summed it up best by saying “strengths are those activities that make you feel strong”3. Strong in continually learning. Strong in making good choices.
Don’t be the Sheriff of London.
From Amazon to Apple, the principles of being at the very top remain the same - one person can’t possibly keep their eye on absolutely everything one hundred percent of the time. As a business grows and more people are employed, a common pitfall that leaders find themselves in is trying to keep their eye on every area, each day, creating a life that is simultaneously exhausting and unsustainable.
A business which aims to increase its size, will, more often than not, require the help of other people. It’s a team effort. And here is where specialisation and working to your strengths comes into the picture. To illustrate this, think about the team inside an operating theatre. Being the Head Surgeon doesn’t require the knowledge of how to order operating apparatus, check that the theatre is booked or provide postoperative recovery care. The sole purpose of that Head Surgeon role is to ensure the surgical procedure is performed at the highest standard. The surgeon relies on the team around them to support that process fully and be the best in their area for a successful operation to happen.
Translate the example of the operating theatre into the realms of business and the role definitions of a team are identical. Each person in a business performs a function for the team. And to get the best output, the business seeks to employ the best talent, of the highest skilled people, to perform each functional area. As the head of the business, focus on tasks which feel positive and personally strong to the benefit of the whole business.
A Business Owner or Leader who has a “sales call midas touch” shouldn’t be focussing on back-end inventory or operations. That would be detrimental to the business. Instead, the better choice to make is for that particular Business Leader to focus on building the most profitable salespeople in the market.
Can you always hire someone else?
The short of it is - no, you can’t easily replace quality staff. The long of it is - finding the best people, who are highly knowledgeable and love what they do everyday is difficult. When looking to put together the best team, the Business Leader may like to read the below list and tick which ones currently apply to them5:
If the ticks (or Yes responses) have added up to five or more, that means the Business Leader is more than likely to display those behaviours and may be holding themselves and their business back from growing. However, this checklist is a start point and we all have the ability to evolve, learn and develop. Releasing the notion that one person can always do it better (releasing the “I know how to”) will start the process of creating a great team who can come up with their own ideas, and in return, support a leader who provides a environment for them.
We all know that staff are free agents - they can come and go from businesses. They have the option to leave and find a higher rates of pay or a more challenging role elsewhere. So why stay with a business which pays less? Smart Business Leaders know that staff come with different skill sets and knowledge bases but more importantly, they are well aware that the number one reason why staff leave is not because of the rate of pay, it’s because down to their experience of their work relationships4. Cutting edge leaders see their relationship with their staff as a “strategic alliance rather than a traditional employment contract”6.
Creating an environment of encouragement7, learning how to provide different levels of support, delegation and even coaching at critical times will forge teams together for the long run8.
Shared Knowledge is Power
Henry Ford was a self-educated man and believe it or not was also one of the most highly revered people for his level of education in business, but not in the technical knowledge of manufacturing, but in the ability to bring people to him who can answer any question he may have in the business. His philosophy was not in the learning of specific technical information, but in acquiring other people who knew. He said “tell me why I should clutter up my mind….when I have people around me who can supply any knowledge I require?” - his understanding of how to organise and use knowledge after [he] acquires it was extraordinary9. He didn’t tell the factory line worker how to check or assemble, nor did he show the engineer how to design a chassis. He ensured that he had employed the best people he could to perform in those areas he needed in his business.
General Managers, CEO’s, Board of Directors and Business Owners all have a unique opportunity to surround themselves with the best quality people in business, share each other's expertise and build a tangible future. It’s those leaders who adopt Henry Ford’s thinking that end up making it to the next level.
Find and utilise personal strengths - be the Head Surgeon of your business - and at the same time feel confident that when there is a call for a nurse, anesthetist or surgical technician, as a Leader, you already have the best team who are ready to support you.
3 Buckingham M. (2007) Go Put Your Strengths To Work (6 Powerful Steps To Achieve Outstanding Performance). Free Press. New York, America. (pp 76 - 85)
5 Flippen F. (2007) The Flip Side: Break Free From The Behaviours That Hold You Back Springboard Press. New York, America (pp 56 - 57)
6 Goldsmith M. (2007) What Got You Here Won’t Get You There. Hyperion. New York, America. (p 216)
7 Blanchard, K & Johnson S. (2015) The New One Minute Manager. William Morrow. Broadway, New York. America (p 33)
8 Blanchard, K & Johnson S. (2006) Self Leadership and The One Minute Manager. Harper Collins. New York, America (p 33)
9 Hill, N. (2003) Think And Grow Rich. Random House. London. United Kingdom. (pp 80 - 81)
When it comes to testing and measuring marketing, it isn’t hard to be caught up with the dazzling statistics of how many people responded to a promotional campaign. Information can be found on the number of marketing levels such as comments, eyeballs, visitors in-store, household circulation, usage. That is all very well and good, however Business Leaders, especially those of small to medium size enterprises, will need to know how their carefully allocated marketing dollars are working to grow their business. Marketing can be used for a number of things - build a reputation, reinforce a choice, introduce new concepts - but the main use for marketing activities is to generate leads.
Generating leads can be costly as we heard in the One Week At A Time video where, for one company, the yearly telephone directory advertising cost them approximately $AUD27K annually to maintain. So the real question here is which activity will generate leads where the conversion rate is the highest? In this paper we will explore how measuring incoming leads can relate directly to the number of sales conversions.
When a business chooses a way to promote their product or service, that way, or “channel”, has a unique set of measurements to find out the level of responses it can obtain. For online activities like Google AdWords, Facebook Advertising, Online banner ads, the measurement include click throughs, likes and followers. For Radio they measure that by how many listeners tune in. When it comes to events we talk about measuring the number of visitors or attendees.
After we look at the various terms of measurement the easiest way to approach all the of them is to simply look at the number of sales enquiries the business gained during the period of promotion. Let's call those enquiries "leads". Then ask those leads how they heard about the business, in other words, "qualify the lead". This way we (a) flag them as a lead (b) check they have been in contact with one of the marketing promotions.
There are only a few ways marketing activity can incite action in people to turn them into leads. Marketing directly communications that a person should call (telephone number), visit (come in-store and speak to a sales person face-to-face) or click a button (online purchase). Marketing is used to create those lead opportunities for the sales team to be able to convert them into concrete sales.
To measure leads against conversions, first list out the different ways the business currently promotes its product or service, examples may be:
|Marketing Method||Leads Per Channel||Conversions|
|Referrals from customers/clients||10||8|
|Google Search engine (SEO)||210||36|
|Marketing Method||Leads Per Channel||Conversions|
|Account Manager Meetings||43||5|
Next to the marketing methods, list the total the number of enquiries (leads) each one brought in e.g. 120 enquiries from online, 20 enquiries from newspaper advertising, 50 enquiries from email campaigns. For business-to-business organisations total the number of clients who have demonstrated to ongoing conversations with the organisation (‘hot’, ‘cool’ and ‘cold’ leads).
Now list out the number of actual sales that have come about from each of the individual channels and focus on the channels that had the highest number of sales. This is slightly counter-intuitive as some channels may have a very high number of leads which business leaders automatically want to maintain, but the sales are not high.
For business-to-business organisations, total the number of clients who came on board and the main vehicle that was used. For example, account manager meetings gathered 5 clients, each committing to 2 year contracts, whereas, Tele-sales may have only gathered 1 client and used twice as much time and cost to gain that 1 client.
Once the best channel is found, it’s not that we turn off all others. It is much wiser dial it down the efforts in the other channels (especially if the competition are highly active), and simply boost up the more profitable one.
Business Leaders need to continually test out if those channels with a high number of leads are actually producing a high number of sales conversions. If they aren’t then consider using a different avenue to market.
For small to medium sized businesses who have found a positive combination of marketing activity by measuring in this way will see how quickly this method starts to make sense (and dollars).
The one problem with sending out promotional messages is that we don’t know if the market has cash to spend. When a product or service has a high price point, the competition for a share of that spending cash is fierce. Major credit card companies are known for working their marketing activities hard for a continual piece of weekly household disposable income. Businesses who market directly to the public need to be aware of their target market spending habits. The tighter the economy, the more competitive a business will need to be to gain access to those dollars from the household purse strings.
For business-to-business organisations the best way to analyse if a client or prospect has spare cash for suppliers is by tracking and receiving trend reports on their client’s performance in the market. Industry reports can be bought through reputable companies for each category. For example, car sales figures can be tracked through VFACTS, allowing suppliers to see which manufacturers are doing well and which are taking a downward trajectory.
When a Business Leader is able to generate quality leads and a steady conversion rate the cost of marketing is no longer an expense, it is a valuable long term investment.
Measuring and testing out which combination of activities gets the best quality must be at the forefront of a Business Leader’s mind. Finding the best lead generators that produce the highest number of sales conversions is the fuel that feeds the engine of successful businesses.
What is strategic thinking? It’s an activity that starts well before the first sale and continues well after the first sale. How does that translate into practical terms? There are two stages in strategy making. The first is planning and research, and the second is measuring and testing.
“Establishing favourable arrays and configurations (strategic posture) will provide you with the positional advantage (p21)...Managing a large group is no different from managing a small one if the organisation is sound (p32).”
- The Art of War by Sun Zi (translated by Dr Han Hoing Tan)
There are various aspects associated with Planning and Researching. Most people start with researching the product itself and understanding what they are selling. Earlier in One Week At A Time we talked about the Star Product (refer to Week 9). The Start Product is the one thing that the business loves doing and can sell as a unique product to them, that is profitable. Once this is determined, researching your Target Market (i.e. the best group of consumers that are suited to the Star product) and conducting a S.W.O.T. Analysis usually follows.
To find out who is suited for your Star Product these are some of the best, most practical questions to ask:
Business to Consumer (B2C)
(if the product is directly aimed at a group of people)
Business to Business (B2B)
(If the product is aimed at other businesses who on-sell it to consumers)
Whether a business operates either B2C or B2B both variations need clearly defined products. A Business Leader will be required to clearly define the product they are marketing. Listing out the attributes (features) shows a manufacturing/servicing knowledge, and demonstrating how the features benefits the target market is essential. Ensure that in each marketing activity the business has shown how that Star Product provides a solution to a problem.
Lastly, when researching your Star Product and finding your Target Market, ensure the Start Product is delivered in a way/time/place that suits the target market. Simply adjust the business so it can connect with the Target Market’s habits. Knowing your Target Market and acting on the information about the Target Market’s world and habits will significantly increase the number of opportunities a business gets to sell to its products.
SWOT stands for the Strengths (S), Weaknesses (W), Opportunities (O) and Threats (T) of a business, product or situation. Often call the “Situational Analysis” as it can be used as a ‘snapshot’ of what is happening (the situation) at a given point in time. The SWOT can be expressed as a list under each of the headings or as a table of comparison against another business, product or situation.
A SWOT is zero dollar cost to a business, and only requires allocating time for a team to get together and develop it. Certainly a highly valuable, strategic tool that can be refreshed and applied to businesses. It will return dividends by producing longer lasting profits and sustain a business through each period and cycle. SWOT’s are used by the whole business community from sole traders, start-ups and small businesses, all the way to massive multi-national worldwide organisations.
Measuring/testing different strategies and fine tuning those strategies based on results will help grow a business into the long term. A business is much like a plant, it requires nurturing, checking, adjustment in order to find the optimum positions/best variations of light. Checking progress and being attentive means a business is always ready for the next opportunity to sell and to improve. If a strategy has not worked this time around - it doesn’t mean shelf that idea - it may work again under altered circumstances (e.g. try different timing, different price strategy, updated packaging etc).
Next week, we will discuss the specific measurements/data and what to do with it all. It’s important for a business on a tight budget to ensure that for every 1 dollar spent, 2 dollars comes back into the business (lead generation). The main point here, however, is to keep going.
Try different channels, try different times of the year and invent different events. Find out what really gets the responses of the Target Market for your products or services. Do they respond to your Facebook advertising? Are they calling your business more than emailing? Are they registering or buying via email campaigns? Do they buy your product mainly online? Do they prefer to speak with fuller sales discussions face-to-face? Whatever the preference, it will pay off in the long term when you find out what makes your Target Market tick.
Marketing and advertising allows consumers to know 2 major things: (a) the business exists and (b) the business is ready to service them!
A plan with all the above research information could wind up being 20, 30, 40 pages long and perhaps difficult to communicate back into the business. Placing thoughts in a short format can make it easier for time poor Business Leaders to pick out the main activities, and focus on delivering only the top marketing objectives.
One Week At A Time has devised a One Page Marketing Plan for small to medium sized businesses and their Business Leaders. It’s easy to understand, simple to use, and effective in helping teams get on board with the vision and the marketing strategy.
To find out how to simplify all the information from your marketing research into one document contact Action Victoria via email email@example.com or email Brett Burden directly at firstname.lastname@example.org. Alternatively call 1300 971 763 to request a copy of the One Page Marketing Plan.
Businesses know they have the opportunity to represent many things to a customer. Convenient (7 Eleven). Innovation (Apple). Friendly (Virgin Mobile). As part of the process of buying and selling businesses are constantly educating consumers. Savvy businesses are aware that when a consumer thinks about a business, they engage in a relationship where ask themselves “what can this business do for me?” “how can they solve my problem”. When you’re educating people, you’re helping them understand the benefit of a solution1.
Businesses make the mistake of trying to “tell” masses information about themselves (products, attributes, features, size etc) rather than explaining how they can improve their life as a result of their purchase with them.
Consumers are time poor most of the day. They come into contact with many things in a day - family, friends, colleagues, clients. Then there’s Facebook, Twitter, online or TV news and emails. And that’s all before the 9 o’clock in the morning! Marketing create “brands” to relieve people of the burden of trying to find time. They create mental shortcuts for people to learn very fast what businesses are about. Businesses can use branding to educate consumers on:
Once a business has answered these questions, they have started the journey of educating their customers, that’s just part of the picture sorted.
As we’ve previously mentioned, Marketing is a communication tool that exists across everything a business puts out there to the world. A clearly defined business prepares only the core messages for a society of time poor consumers.
What are the kinds of things businesses need to educate?
In this week’s One Week At A Time, Brett discussed the most important areas that a business uses to teach, they are:
Core messages are translated and repeated across the entire business. They can be instilled in customer service scripts, point of sale flyers, service vehicles, websites.
Depending on the purpose of the material a business may want to emphasise a new product launch, new service delivery method, broader product range, announcing an improvement in the business, updated website, additional payment method....whatever it may be, the core messages will keep revolving in various forms around your customers and prospective customers.
Marketing at it’s simplest is all about spreading the word into the market. Use all the available channels you have budget for - staff, building/office space, cars, online, social media, databases, events, print, radio etc. And remember to say it once, say it twice and say it again!
Richard Branson said “education is the most powerful weapon to change the world”2. He instilled this philosophy through every brand that he created (Virgin Records, Virgin Mobile, Virgin Airlines, Virgin Brides). His businesses educated consumers on their core messages through staff, websites, videos, social media, branding and advertising. But he didn’t start with sending the message OUT first. He started with sending those core messages inside his business first.
Consumers come second in the journey of marketing education. That does sound very counter-intuitive to Business Leaders. Aren’t we taught that we always put the customer first? Isn’t the customer always right? Yes....and no.
For a business to be truly successful everyone in that business needs to learn the core messages to ensure the whole business are “singing from the same hymn sheet”. The same goes for all those on management levels, these messages are not created only for the benefit of customer service and sales staff.
When every person in the business have learned the core messages and have adopted them, then a business be able to naturally (and easily) respond to customers and their enquiries. That is why employees are the first priority in hugely successful businesses like Virgin3.
At times, it may feel as though there is a mountain of information to develop before a business can start the business of selling. That is true - there are a lot of things that need to be said.
The success of marketing comes from focussing on what’s important and deciding when and where are the best times to say it. That’s why we say that marketing educates. A great business takes each customer, individually, on a series of short journeys, explaining the solutions along the way.
Levinson, J. C., 1993. (p26) Guerrilla Marketing Excellence. Houghton Mifflin Company. Boston, New York. USA
Without releasing it, people have a need (in varying degrees) to join, belong, discuss and engage. We are constantly on the lookout for people, places, items, experiences that reflect who we are and how we think we can present to the world. Abraham Maslow best described human needs in his 5 hierarchy of needs1. The first being the basic need for food and shelter, second is the need of security (jobs, health, house) and the third one up the ladder is a need for a sense of belonging. When we have all three then we are secure. Why do we need to know this when we are trying to sell our products and services?
After our basic needs are met we start looking to fulfil our need to fit into the world. Social media has created a completely accessible online community of people who want to start up groups, follow other groups, participate in commentary and generally engage in activities that makes sense of their reality by talking about their everyday lives with other like minded people. This opens the door for communications to reach millions of people in lightening speed. Consequently this new wave of communicating which meets the need to connect with others has permanently changed the face of marketing communications and the way in which businesses interact with the market.
Image this scenario. A customer calls your business or buys a product from you. They already have visited your website, researched online the attributes of your product, learned about the benefits that other people had experienced through product review sites. Your product had mixed reviews but, on the whole, was talked about as a good company with a good product. We all know you can’t please everybody so the negative comments were taken with a grain of salt by this customer. They ordered from you, and unfortunately, they find your product was not what they expected from their findings, so they contact your customer service number for reassurance, reinforcement or a simple explanation. After all, your website did say that you put your customer first, each and every time and that you had superior customer service. This statement made the customer feel comfortable to call your number. Your team on the other hand, aren’t trained to deal with their unusual scenario and couldn’t give any alternative to their dissatisfaction so the customer wasn’t offered anything else and was left with a product that now gave them a feeling of dissatisfaction.
So, was that the end of the interaction? Not in the slightest.
In today’s day and age, this one customer could have sent out viral recording or video of their negative customer service experience to the social media groups they belong to. Their message will now reach thousands of people who will watch your customer service fail. One moment in time where the promises in the marketing doesn’t live up to the reality, can cause reputational damage and potential financial downturn for a business in as short as 24 hours.
When people are searching for security (reinforcement that their purchase choice was a good choice) and a positive service interaction (meeting a sense of group and belonging) we transfer these needs into the products and services we buy, whether we are conscious of it or not. These are the two entry points from Maslow’s Hierarchy of Needs where a majority of marketing communications first reach with us. Businesses try to meet those our needs so we can buy from them. If a business does this well, we often come back to the same products and services because we feel good about ourselves and our choices. We even find ourselves telling our friends and family all about that great brand, great product or amazing experience, and other people in our group feel compelled to try it out for themselves.
Most businesses focus on the Point of Sale (quite rightly), however a business which uses all forms of communication (subtle, indirect and direct) will be ahead of the competition. When all the messages that are being sent to us saying the same thing, it makes us feel like we can trust that particular business.
What elements in a business communicates?
Everything. Yes, that’s right. As people, we are wired to “read” everything in our world in our journey to make sense of our reality. So without thinking we will interpret what is in front of us, from the carpet in a business (is is old, tatty and worn out?) to the amount of time it takes for a staff member to attend to our enquiry (10 minutes? Two minutes? Did they look at us? Do they know we are waiting?).
Subliminal indirect (subtle) messages in business occur everyday (i.e. messages we don’t consciously realise we are absorbing and/or sending), for example:
Then there are the more direct messages that businesses send out to their customers, such as:
When a business writes on their front window signage that they have “superior customer service”, people reading that sign will take that message at face value and when they are ready, will want to experience the excellent service for themselves. When people interact with a business and the staff’s behaviour matches the message on the sign, it provides much needed reinforcement of making the choice to engage, and generates positive feelings of satisfaction. Social media will in turn have a plethora is positive reviews from happy customers and customer driven word of mouth (which is now a growing channel of lead generation) builds a solid reputation for a business. Even with critics (and let’s face it there are critics across every business category), the majority view that is communicated will still bear significant weight.
Leading by delegation
In the earlier example, where the customer was dissatisfied, we assume the business had all the direct and indirect messages expressed about the product range but they fell over in just one place - staff. A business leader in that scenario only needed to continue their consistent messages by simply training their team to manage different and difficult customers situations.
It’s no secret that Business Leaders seek to attract customers to not only come to buy from them once, but make those people to want to come back and buy from them again. Now that the reasons why people are buying are known, and how they are talking about their purchases are known, all that Business Leaders need do is check that their business is saying the same thing across all the areas of their operation and their team are living up to those messages.
Delegating the creation of those messages and materials (through marketing and advertising specialists) and employing an experienced sales team leaders to make sure that what you write, wear and advertise, will perfectly match what your business actually says to customers over the counter, over the telephone and in meetings.
Distraction can be a welcome break in the intensity of the day. It’s okay to take a moment to recap on the weekend sports match or arrange for a meeting about a problem that needs multiple points of view. Distraction can also be viewed as unwelcome and interrupting to the day especially after the main activities wind up being sidelined. When larger chunks of time are taken up by being distracted by one thing or another, that time is no longer available to give to the things that are most important to the business. It’s this type of unwelcome distraction that Businesses Leaders primarily focus on improving and eliminating. When we are distracted, aside from feeling a sense of letting ourselves and others down, the number one consequence of succumbing to a stream of distraction is that the business doesn’t have a chance to grow. There is a certain amount of time needed to spend on developing products, adding value to client or customer experiences, tightening operations, improving profitable financial transactions etc, and distractions or interruptions often stop/start that process.
There will always be situations which require immediate attention and are deemed as emergencies such as the computer servers crashing, eftpos machines no longer working, floods and generally incidents that are unforeseen and out of our control. Then, there are situations which don’t require attention by a Business Leader at that exact point in time. Times when other people call to ask a ‘quick’ question (because it’s easier to ask right?) or those interruptions which start with “can you help me with…?” are what we will examine.
Redirecting the traffic
Human nature is such that when a problem does occur we tend to want to ‘fix it’ straight away and in order to do that we look for the most convenient and fastest road to take first. As a Business Leaders, you’ll need to work in the “zone” time target more and more in order to grow the business.
As soon as you are taken away from that important activity, it could take over 20 minutes to regroup and pick up where you left off1. If there are only 4 people who interrupt a Business Leader during the day, it equates to losing 1 hour and 20 mins of time to regain the original activity, on top of the actual time taken by each person, which could be 15 to 20 minutes per conversation. It’s surprising to most people to learn that 4 people asking you a simple question, could potentially take away over 2 ½ hours of time!
To retain relationships in the business, whether it is on site, in the office or with customers and clients the best approach to clawing back valuable time is not to completely block other people and devices out, but to redirect them.
Simple ways to redirect your stream of distractions with:
Without a shadow of a doubt a Business Leader will get the most results by simply delegating the level of distraction that they experience on a daily basis. Delegating distraction doesn’t require any capital investment, additional resources or high levels of expertise and knowledge. It requires discipline. Once mastered, this skill will be the lowest costing and one of, if not the highest yielding asset that a business can have in the shortest amount of time.
2 Blanchard, K. A, Oncken W., Burrows H., (2004) The One Minute Manager Meets the Monkey. HarperCollins USA.
Core Agreement Information
All staff that are employed in any organisational size are covered by the basic rights set out in the Australian Fair Work Act 20091 in the National Employment Standards (NES). There are a number of entitlements all staff are given by the NES. The casual employees base set of entitlements are: (i) unpaid carer leave, (ii) unpaid compassionate leave, (iii) community service leave, and for casuals over 12 months in a business, the employee has the right to (iv) request flexible arrangements and, (v) has access to parental leave.
For non-casual workers the NES provides: (i) minimum weekly hours, (ii) requests for flexible working arrangements, (iii) parental leave and related requirements, (iv) annual leave, (v) personal carer and compassionate leave, (vi) community service leave, (vii) long service leave, (viii) public holidays, (ix) notice of termination, (x) redundancy pay, and every employer must (xi) provide each employee with a copy of the Fair Work Information Sheet.
The Fair Work Information Sheets provide employees with information about awards, the Fair Work Act, workplace rights, flexible hours, termination, the Fair Work Ombudsman, the Fair Work Commission and other important information on how to find help should there be a situation which requires assistance. The core agreement also typically states how a dispute resolution or unfair dismissal may be handled (e.g. should the employee performs a specified unlawful act then the organisation reserves the right to dismissal).
The entitlements for each employee should be clearly expressed in the core employment contract that is issued when an offer of employment in made. The purpose of having a contract in place is so that the employee is not worse off than the minimum legal entitlement. The contract should be very clear on what the employee is given (including enterprise and other registered agreements), probation, safety, how to resolve disputes3 and dismissal.
Another legal right which is also expressed in an employment contract is the right to work without harassment and bullying behaviour4. This legal right also applies to work experience students, outworkers, volunteers/contractors and volunteers. Often there is a paragraph (otherwise known as a “clause”) in the core contract which talks about this right.
In some form or another, the core contract will talk about reading more detailed information in another section. These sections are called the Appendices which also apply to the contract, but they are flexible and they may change. So what are these additions?
Appendices to the Core Employment Contract
These are the important sheets of information that are “companions” the core contract. There is far too much information to possibly write into a core contract which is why these additions are a good idea. The core contract should focus on the main entitlements and a paragraph is added in that core contract to point to reading about any industry related, company-centric or role specific additional information in another section at the back of the contract. After treating the additions in this way, the core contract is protected, stays in place, is valid. If a change needs to happen to those additions it’s easy to do without it affecting the core agreement.
These additions are often called “Appendices” or “the Appendix” and are usually numbered (e.g. Appendix 1, Appendix 2, Appendix 3, etc). Each organisation can have different information sheets in their Appendices. For example detailed information about the Conditions of Service, Company Culture Statement, Pre-existing Injury Declarations and the all important Position Description.
Position Descriptions (PDs) are handled as a separate item so that they are flexible enough to grow as the organisation grows. PDs allow the employee to perform a variation in their role without having to renegotiate their entire terms of employment. If the role has changed significantly then a whole new contract does need to be provided to capture all the new and relevant information changes (including pay rate scale changes).
The Flip Side: Business Owner Protection
As weighted as it may appear toward the employee, employment contracts are also in place to protect the Business and the Business Owner. It provides clear, written, documentation that covers the business should the employee believe they are entitled to more or were not provided with equal benefit.
Take for example the story of a plumbing organisation in Victoria who allegedly underpaid their 20 year old employee $26,8825. The plumbing business did not specify in writing or in any formal way, that the staff member was an apprentice, they did not sign the employee up to an apprenticeship and incorrectly paid the employee lower apprentice rates (a third of a full rate employee). The business also did not correctly provide leave entitlements, travel allowances, pay slips, overtime hours and a multitude of other basic entitlements during the three months when the employee was working with them.
Not providing an proper and clear employment contract meant the business was left wide open for legal action and, in this case, a hefty bill. An employee contract would have resolved issues of entitlements, rates, hours etc, and provided the employee with the opportunity to either accept or reject the role before they began. Saving the business on time and thousands of dollars in a potential lawsuit.
The additional information (or Appendix) of a position description must accompany contracts and advertisements for available or existing roles. It provides added protection for businesses because it lists out the specific tasks that the role is required to perform (and expected targets). So coupled with the core contract, the position description gives a very fair view of what a role will involve.
Making it clear to prospective recruitment candidates (and existing staff) what you need in your business, what they will receive and how they will be asked to contribute to your business, will not only provide much needed protections, but it makes good leadership sense.
Leadership in a business means actively communicating a message of expectations from the offset. Providing clarity to the business and all its members means everyone knows what they need to do to meet expectations.
Fringe Benefits of Contracts and PDs
On a lighter note, there are many positive benefits of position descriptions and employment contracts that goes far beyond legal requirements and protections. When a business has successfully attracted the mix of staff that they need to grow the business further, these documents act as a guide to greater things.
For example, staff may informally view their position description as a “baseline” for performance, where they will seek out what is required to go above and beyond those expectations. This adds value to an organisation, brings a new dimension to your customer’s experiences, and may even provide repeat or referral customers for a business.
In many businesses position descriptions are used as a form of promotion or goal setting for those staff members who want to move into a more senior role. The staff may request a copy of the senior role and can make personal efforts to go above and beyond their role in order to be taken into consideration for the desired position.
Another use for position descriptions and contracts is to enable a person in a role to expand, learn new skills, provide incentive for greater pay scales, and add more knowledge and expertise to their experience in the business.
Promoting a positive attitude toward position descriptions and contract entitlements can start a new wave of culture in a business. It attracts more motivated staff and creates a unified team that focuses on goals, customers, and all the other areas that makes a business, a great one.
Employment Contract Templates are available from Action Victoria.
Navigating the world of a business' accounts means that Business Leaders will invariably be asked to read through a Profit and Loss Statement (P&L). At this point, it’s worth remembering that amongst the jargon of accounting, there are two central reports in business - the pinnacle of Profit which is the P&L Statement and its companion - the Balance Sheet which reflects the cash position of a business, because we all know that Cash is King.
Therefore the P&L statement is representative of the efforts a business makes in order to reach a profit from the total number of sales transactions it has made over a given period of time. The P&L will show total sales minus expenses i.e. cost of goods and other costs related to the production of the good or service1. This may mean that after those deductions are made, there is a “Profit” appearing on the P&L Statement.
Why isn’t there any cash in the bank?
There are a few reasons why there isn’t any actual cash materialising in the business. The P&L doesn’t reflect all uses of cash2 and therefore it won’t be clear from just that one report why the business doesn’t hold those funds.
A good place to understand the cash position of a business after reading a P&L is on the Balance Sheet. This will provide valuable information on financial position of a business in a given time period.
For example a loan repayment may only appear in part on the P&L and similarly, any fixed assets such as capital equipment, won’t appear on the P&L either. In fact, fixed assets won’t appear on the P&L at all. Those items will be recorded on the Balance Sheet. That’s why the two reports work best together rather than in isolation of each other. When they are used together it may be found that the cost of loans and assets on the Balance Sheet has exceed the profit made on the P&L, which means that, at the end of the day, the business has made a loss and not a gain.
Another good example where there actually is cash in the business but it hasn’t materialised is when the business has sent all invoices to their customers but the customer has not paid them. An accumulation of unpaid customer invoices may represent a figure as high (or higher) than $100,000 in a given period. Unpaid invoices appear as a “debtor” and in some cases these debts can sit in the business ledger for over 120 days uncollected. This is becomes a serious problem in businesses where the terms of payment may be as short as 14 days from the date of issue.
Information on a Balance Sheet
A business’ Balance Sheet will show the financial position of the company from the point of view of its assets and liabilities. Here is where a Business Leader will see actual cash in the bank, debts owed to the business, stocks/shares, capital investments (equipment, buildings, acquisitions) and liabilities which may include creditors, loans and overdrafts. Providing a clear reconciliation of funds works best when the Balance Sheet (financial position) is reviewed alongside the P&L (sales position).
Build an “all-in” list of expenses
In the event that the report that a Business Leader is currently receiving hasn’t captured all expenses, implement a priority project within the business to itemise all the expenses. Once those are understood, the accountant or financial manager can re-run all the business P&L and Balance Sheet numbers. Allocating the expenses to the appropriate report.
Clarity in accounting is paramount to steering any business forward and having a comprehensive P&L and Balance Sheet report will provide solid ground to work on.
The Break Even (BE) number is not just another percentage and doesn’t fall into the category of “88% of statistics are made up on the spot”. It’s an actual calculation that is used in business to understand how it is performing. It allows the Business Leader to adjust their business plan and either keep going in their current direction or maybe try a different tact and explore new avenues.
The Break Even answers the question of how many sales does a business need to sell in order to cover the total number of fixed costs and variable costs over a given period of time.
Fixed costs1 can be anything from insurances, property taxes, rent, salaries, utilities to amortising/depreciating tangible assets such as patents or equipment.
Variable costs2 are those items that can fluctuate in cost such as raw materials, production supplies (e.g. machinery inputs that are consumed based on usage like welding wire or even ink cartridges), billable hours of staff wages, commissions, credit card fees, and freight. As these costs are unknowns until the end of a period of time that has passed we can use the Gross Profit Margin (GPM) instead of guessing the variable cost.
Gross Profit Margin is the proportion of profit made after a product or service has been sold. This takes into account the variable costs for manufacturing the item and it can be averaged out to give a more than fair accurate forecast. The GPM can be been used in lieu of the variable cost when calculating Break Even points.
Why Break Even is important to know
Break Even (BE) can be used in different areas of a business, from financial forecasting, pricing strategy, budgeting and setting targets.
Sales is a great focal area to use BE. For example the sales team may be provided with an incentive or bonus for hitting the BE plus 10% over. This way the team have a realistic target they can achieve.
It is important to use the BE when determining sales targets. It’s used when a business is looking to introduce a new product and it needs to determine at what price and how many units it needs to sell in order to produce a profit. The break even gives a mark in the sand that indicates, from that point onward, the product will become profitable. Finding out how many sales are required before a business starts seeing profit means it can make better business decisions.
Apart from setting sales incentives the BE can also show the period of time that a product needs to be in the market (excluding the elasticity of demand1, timing and other market forces).
Additionally, after the initial investment is paid off for a product (when BE is reached) then the business can turn its the attention on the price point. Is the demand steady enough to sustain the same price point? Can the market bear a price increase? Has demand petered off and is it time to bundle the product with another product?
In the earlier discussions regarding Star Products, it was evident that a business with a Star Product has a natural propensity toward its delivery and the added bonus of a level of demand being present. Therefore determining the BE for a Star Product will allow the business to know when the profits will roll in, and enable it to make a sound business forecast for enjoying an ongoing gross profits off that Star Product.
A cornerstone for planning and forecasting is often found with the determination of the Break Even points in a business.
Calculating Break Even
We can now revisit the following - Break Even (BE) is the number of sales that are needed to cover all fixed costs (C) and variable costs (v) over a given period of time. In this section we will estimate our BE over a 6 month period using the following equation:
BE = Fixed Costs (C)
(Gross Profit Margin % ÷ 100)
As discussed above, the actual variable costs aren’t known until the end of the month, therefore in this version of the equation we will use the Gross Profit Margin (%) in place of the variable costs.
Finding the Fixed Costs and Gross Profit Margins is easily located on a business’ Profit and Loss Statement. Each figure should be represented as both a number and as a percentage (ensure the statement has both representations).
Take the total of the last 6 months from the Profit and Loss Statement for the Fixed Costs (number version) and Gross Profit Margin (percentage version). Divide each figure by 6 to provide an average monthly total.
Working example 1
Let’s find out how many sales need to be made to break even when the business has a GPM of 10% and $100,000 worth of fixed costs.
BE = 100,000
(GPM 10% ÷ 100) 0.1
BE = 1,000,000 (1 million)
To cover the fixed business costs of $100,000 when the price point provides a Gross Profit Margin of 10% per sale, the business will need to sell 1 million units of product. That means that at the million sales mark the profit is ZERO.
Remember that the business still needs to manufacture the product. Therefore, the sales are 1 million dollars, the fixed costs are $100,000 and the remaining $900,000 is what it directly costs to manufacture the product itself. The break even is still zero at this point. The first sale after the millionth sale, will be when the business will start to see profits.
To understand how Gross Profit Margins work let’s explore the following.
If a product is sold at $1,000 per unit with a 10% Gross Profit Margin, how much profit (P) is made on each product?
P = $1,000 price per unit x (GPM 10% ÷ 100) 0.1
P = $100 profit per unit
This shows that for every unit sold $100 is made on each sale on top of the base costs (which can vary) for manufacturing that product.
Using Break Even with GPM
If a product is sold at a price point of $1,000 per unit and has a 10% Gross Profit Margin, how many products need to be sold to break even?
BE = 1,000
(GPM 10% ÷ 100) 0.1
BE = 10,000
As daunting as it may seem to go back to the drawing board and re-visit a break even figure, working it out is actually good business practice. A solid understanding of where a business is heading with accurate assessment of inputs and outputs using Break Even points, will enable the Business Leader to be confident that the business has long term sustainability.
Now we know the 80/20 rule is occurring in many parts of our lives, how can we best use it to our best advantage in business? A prime area of business is customer and client management.
Remember when we said that 80% of sales comes from 20% of customers? We can use this to begin categorising our customers with “top” customers being the top 20% of revenue. What’s left is the rest of our client base where we need to find different levels of customer types to work with and cultivate.
A robust clustering tool is the A-B-C-D Client Model. First look at your business and put together a list of what your ideal client looks like. Once you have that list then you can cross reference it against the clients in your database.
Here’s how to categorise your clients once you have your ideal client list in hand:
A - Amazing Client. These are the people who you love working with and get you up in the morning. They pay well, refer you onto other clients, who bring you more business. These clients really like what you deliver, and they come back to you repeatedly becoming a “raving fan” of your business! Your team provides them with excellent service - that “plus one”1 - giving them extra effort because they are worth it.
B - is for B Grade Client. Not quite a raving fan, but still provides as a significant contribution to your business. Second place, in this case, is a good thing. It means you may be on the verge of making this client into an A-Grade client. Your team gives your B Grade clients a fairly good amount of attention. These clients are happy with your service and they represent a healthy volume of sales.
C - Cut or Cure Client. This client is at a crossroads. You question whether you should I cut them loose or cultivate them over time. A Cut or Cure Client could go either way. They could be a client that you could work on in small doses, over time, and monitor to see if there is any increase in sales. They could move up a level or two which is terrific. Or, on the other hand, you may find yourself in the difficult position of moving them down to cutting them loose, to D Client because they just ain’t making the grade.
D - Delisted Client. Harsh but necessary category. Delisting a client could mean that you have tried to work with them but it’s just not working out. They could come from the “C” group above. D Clients are ones where you part ways. How do you know when to cut the cord with a D Client? Easy. They aren’t paying on time, or in some cases not paying at all. They have many complaints that are often unsubstantiated. They are a vortex of time and are a massive drain on your resources. Better hand them over to your competitors and have them deplete their resources so you can concentrate on your A-B-C clients.
When you examine your client list and the number of A’s B’s C’s and D’s you have, you may find you have a small number of A’s, so look at your business as a whole, and find out why that is happening. The aim is to develop as many A’s as you can. Do you have a small number of A’s because you are servicing D’s or are focussing on keeping your C’s? Have you given your C’s and B’s enough reason to refer you onto others (so they can shift up to A’s)?
With a clear understanding of how much value each client gives your business, your sales team can work with those viable groups to up-sell, cross-sell and diversify products and services across the A’s and the B’s. And on a smaller sales effort can be logically placed on curing or cultivating those C’s who have the potential to develop into a long term partner. Dividing the amount of sales management time spent on the clients makes financial sense. It ensures you are avoiding those clients who aren’t helpful and reinforcing those A-B, and possibly some cured -C, clients who are proven to provide your business with long term stability.
1 Blanchard K. and Bowles S, A revolutionary approach to customer service: raving fans! 1998 Clays Ltd St Ives PLC. Great Britain (pp 101-102)
We’ve heard it many times over. 80 percent of business comes from 20 percent of customers. Where did it come from? The short answer is Italy. It’s not just the land of vespas, pizzerias and jeans (coincidentally these were also invented in Italy). It originated from Vilfredo Pareto back in 1896 when he wrote his paper “Cours d'économie politique” or “Causes behind the Political Economy”. When developing his paper he drew from his observations that 20% of pea pods produced 80% of peas and he noticed this occurring in other areas of life and people. He observed that over 80% of wealth owned in Milan was held by 20% of its citizens1.
This recurring theme of 80/20 then came to the attention of management consultant Joseph M. Juran who, the 1940s, coined the phrase “Pareto Principle” and recognised that, from Vilfredo, there were the “vital few and the trivial many”2. The general rule of thumb of 80/20 was then applied to business, life, and just about everything else in between.
How does the 80/20 rule apply?
The rule occurs when 80% of an entity or happening is governed by 20% of another. That’s pretty much it in a nutshell. To put it into perspective, let’s look at some examples that we know happen our business lives everyday.
Customer complaints. They often originate from a small section of sometimes persistent customers. That means the majority of complaints are likely to come from a minority of our total customer base3. If we tallied up how many complaints versus how many customers we have, it may come to no surprise that the ratio roughly falls inside 80:20.
The same applies to repeat customers. They account for a high level of income to a business. However they don’t make up the majority of customer transactions. It’s therefore highly plausible that about 20% of a customer base will produce 80% of sales4. This rule can be used across many parts of a business, as author Perry Marshall explains in his book 80/20 Sales and Marketing5. He suggests business leaders to concentrate their efforts on those high value 20% repeat customers. Makes sense. And dollars.
Does it apply to sport? Absolutely. With athletes already in the same range of peak physical fitness 80% of the game (vast majority) shifts to being a mental game6. A large amount of time is spent on practising many strategies needed to win a game. Along with a high level of determination, focus and “never quit” attitude it places elite teams at the top of the NBA ladder. The rest of the time, a these teams spend keeping in peak physical condition and capitalising on natural physical ability (20%).
Making the most out Pareto’s Principle
In other applications of business, such as “ABCD Clients”, we will use the knowledge of the 80/20 rule to focus on the areas of business that matter the most. Harnessing Vilfredo Pareto's principle of identifying where energy is spent and applying it a business effectively, paves the way for a bigger and better future.
Imagine having more revenue from high value customers? How about knowing how to handle “problem” staff where they aren’t taking up a huge amount of your time? The 80/20 rule can help you identify the areas of who, what and where the greatest contributions to your business sit.
And that’s what’s really at the heart of the Pareto Principle - identifying value in people, time, money and effort.
Let’s look at two seemingly similar matters - urgent matters and important matters. We may think both come hand in hand but in fact they each serve different purposes. Urgent matters are ones that “press on us; they insist on action. They’re often popular with others...pleasant, fun to do. But so often they are unimportant.” (Covey S. R., p151) Whereas important matters are aligned with results, “...your mission, your values, your high priority goals.” (Covey S. R., p151).
Examples of urgent items can be anything from the printer being broken, the computer system crashing, clients calling to ask for quotes to be re-sent, staff re-rostering and a multitude of other daily tasks that crop up during the day. Although it’s okay to spend some of your time in these activities and delegating where appropriate, but it’s where you spend a majority of your time that counts - and it starts with not being overly involved in “urgent” matters.
When being busy is your default position
Generally speaking, when a typical business owner is asked them how they spent their time and serviced their customers they often explain how busy they were in putting a lot of their efforts into servicing a high demand customer. When finding out more about that customer it turns out that the customer was low on financial return to the business. They used more business resources than other customer’s who provided much higher financial return.
This is a classic example of thinking that being “busy” with a customer means the business is in good shape. Unfortunately this is the zone of ‘delusion’, where “busy” has become the default position in the business without much consideration as to the value of that time to the long term viability of the business. Given the example above, if the business continued to service the high demand low paying customer in the same way and couldn’t find more resources to provide an excellent level of service to the high paying customers, the business would eventually go backward and start to decline. The high paying high value customers would find better service elsewhere and the orders would eventually drop off.
Making busy meaningful
How do we avoid being delusional in our daily business activities? It all comes back to knowing what is “urgent” and what is “important”. We have explored what urgent matters can do to a business when it goes unmonitored, now let’s look at how we allocate a large proportion of our time to what is important.
An example of important matters could be that you have a meeting with the Accountant or Bank Manager and are required to prepare for that meeting. The financial position of the business is highly important. Being prepared with the appropriate paperwork and documents is therefore equally as highly important.
Another important business matter may come from a major economic downturn in consumer spending which affects the foot traffic into your business. Putting together a small team of experts from within your business to gather intelligence will enable you to decide how to reposition and respond to the change. Consumer spending has major long term impacts on business which may result in retraining staff to learn new products or services, refinancing or even downsizing.
A third and less obvious example of important matters may be in setting goals and targets for the business to reach in the next quarter. This may come in the form of implementing a faster quoting and payment system to better retain high value high paying customers and service a higher volume of new customers. Updated systems keeps the business overheads lowered in the long term and requires less staff to be employed and wider profit margins.
Attending to important business matters is knowing how to react to what is important and what is urgent. This understanding is critical to making the best use of your time, putting the emphasis on Zone Activity within the Time Target.
One Percenters in business
To keep on track and work on your Zone Activities as a discipline,try adopting a “1 percenter”1 attitude like they do in sport. As a Business Leader continually improving and applying pressure on your competition is essential. It’s those constant “1 percent” group of activities such as retaining high value customers, improving operations, refining products and services, finding new ways to increase margins - when supported by people in your business who put in a little bit of extra effort in - will sustain and drive a business to its ultimate success.
Covey S. R. The 7 Habits of Highly Effective People 1990. The Business Library. Melbourne Australia.
It’s Monday morning, and for many business owners the first thing that happens is that we check our mobile. We think it’s important to know who has called us and whether we are needed to respond to something urgently. Have we missed an opportunity while I slept? Is there a crisis looming on the horizon? We believe a-hundred-and-one-things may have occurred even before we start our day.
On the other hand, a different group of business owners are strolling into their workplaces often accompanied by a slightly irritating positive attitude. So who are they? And can that even be possible? Well, the short answers are, yes they do exist, and yes, they are often successful business people. They start their Monday by looking forward to all the possibilities the week could bring. This group usually start their day with a morning ritual. Something pre determined and important to them. Like walking the dog, jogging, meditating or perhaps taking the kids to school, and by doing so, they positively prepare themselves for what lies ahead - all with a clear head1.
To be productive in a working day or week, highly successful Business Leaders have learned to identify and divide their time into four areas. These “four types of time” using a Time Target are:
Distraction - not important and not urgent activities e.g. all those interruptions, calls, impromptu meetings with no agenda or action plan.
Delusion - urgent activities with the appearance of importance but are actually not important e.g. These things are normally somebody else's urgent requirement which all of a sudden become your problem.
Demand - urgent and important activities such as certain meetings, system crashes, major customer requests - generally all those pressing matters, a.k.a ‘putting out fires’, that can’t be ignored. This is where a majority of business owners or leaders spend their time.
Zone - The best use of a Business Leader's’ time is in the zone. These activities are urgent but important and certainly of high value to the business. It can involve building high value customer relationships, seeking new opportunities, building robust systems, planning and scheduling teams, and creating time for recreational activities.
It’s astonishing when we think about all the time that is taken up by trivial or inconsequential matters. And on top of that, when we are veered off direction by distractions, it can take us anywhere between 15 seconds all the way to 23 minutes to get back on task2.
Business Leaders all strive to be effective and work at the highest level of productivity because they want their businesses to be successful. However, many fail at managing their time and allocate it out according to the level of immediacy. Overcoming this by managing personal time based on a Time Target can make it easy to appropriately place efforts into what is of high value to the business. In other words “effective management is putting first things first” (Covey S. R. p148)3. Placing a priority on the Zone to be able to work on the business.
Zone activities are for the purpose of building the business, for example, finding new ways to increase profits, managing teams more effectively, implementing new IT systems to service more customers etc. Eventually more time will be spent in the Zone, growing the amount of effort placed in that area, and less effort will be applied to less important, lower value activities (like impromptu meetings or reactive urgent but unimportant tasks). The Zone is about long term thinking and the high value activity needed to create a strong proactive business which secures it into the future.
As elusive as time may seem, it can be retrieved and used to its best advantage in business. There are many techniques that can be applied to enter and stay in the optimum Zone each day. Mark McKeon, an Australian author who has written the popular book, “The Go Zone”, discusses how to prepare for Zone activity4. He believes Business Leaders should think of themselves as elite sports people, who choose a discipline and avoid ending the day in a state of stress. So, let’s get into our zone just like an athlete does, by starting the workday with an early, but very necessary, wake up call.
3 Covey S. R The 7 Habits of Highly Effective People 1990. The Business Library. Melbourne Australia.4 http://www.sixdegreesexecutive.com.au/six-degrees-news/want-to-increase-productivity-efficiency-and-wellbeing-get-in-the-go-zone/
A system is a device we can use to solve a problem. That’s all it is. You have jumped the first hurdle in implementing a system. The hurdle that suggests systems are complex and difficult to understand. There are two more hurdles to address when it comes to systems, that is, that it takes an enormous amount of time to put a system in place and that a system is costly.
In a small to medium sized business there are many of problems to solve but without the safety of an allocated budget to employ a team of people to work on resolving a specific problem in a business. How does the smaller business owner approach problems such as rehiring staff, speeding up invoicing to customers, finding funds for sales offers, building a local presence, and handling debts on loans and credit cards? In many cases the business owner are often personally performing those tasks directly. Attending interviews, working late at night to produce invoices, juggling overdrafts and post messages from their phone on the way to the next meeting. It becomes virtually untenable to continue working as a sole proprietor rather than a leader who oversees the management of a team.
Once it’s identified that there is a major time issue with managing daily tasks there is a cross road or an impasse that is reached. Do I continue doing it all myself or do I hire others and teach them through a central system to do it for me? Let’s challenge the assumption that to be a good business leader you need to know each moving part of a business intimately in order to be able to see the business clearly and manage it as a whole. On the whole most people who are, for example, excellent at sales and people-orientated, may not be as highly skilled and involved in areas such as managing stock levels, scheduling just-in-time customer orders, and quality control of products. Just like we say “there’s an app for that”, there are also systems for that too. Every system must have an objective to reach, a business problem to solve. If the system works then continue with it, if it doesn’t, find a different system. More on different types of systems later.
User friendly systems
When we think of “user friendly” we may break out in a small sweat and worry about how a computer program may or may not work. The main point to remember is that systems are developed by people. If we want them to be friendly we just have to change them to suit us. So, what is a user friendly system?
Systems that suit you
There are systems that you can buy “off the shelf” that are computer based billing systems, payroll managers such as Quickbooks. These can be used straight away in a business with a level of external training.
And there are experts that have already been trained, that you can hire to manage a computer system to control specialist areas such as operations, stock and maintenance. Both of these options are viable to a point, and does require an amount of research and capital expenditure.
An example of simple business systems could be when a business leader taught a staff member how, for example to manage an issue. This could have been invoicing. Once the owner has imparted “their way” the team member writes down notes, take screen shots, list out steps and compile a “how to guide”. The next step is to take a different team member unrelated to the task, and ask them to follow the guide and test out whether they understand the instructions and if the guide is easy to follow.
The above example describes the beginnings of what is the global accreditation system called ISO accreditation, by the International Organisation for Standardization1. The basic premise is that if there is an accessible “how to guide”, mapping out in simple terms, the exact task, and this guide is used by more than two people then it is a “system”. The system then need only be “sense checked” (meaning people questioned it, understood it and it is relevant) and continually improved by the team in the business. This system making tool is low cost, high impact and meets the objective of creating more time to work on the greater issues facing the business. Taking the idea of systems back to the invoicing example the business benefits enormously because after the “tester” understands the guide, they can perform that task well, making two more people fully trained and ready to take on that activity, creating time for the business owner to spend to think of ideas, develop more efficiencies and generally work on their business.
Business Process mapping:
Simple business systems
What does your business look like when it’s done? What does your business want to be? A vision essentially addresses those top line questions. It also give business shape, purpose and direction1. Articulated well, visions let the people within the business know where they stand and where they are going. The whole business can then consolidate their efforts through the unification of thoughts and ideas.
Therefore, writing a vision and making it known is one of the first sets of actions the leader in a business should undertake. And the good news is, there is no right or wrong way of developing a vision. It could be a simple single sentence or it could a series of statements that support the ethos of the business.
Additionally, visions act as an active influencer within a business. It’s a mechanism for leaders to empower their teams to create growth initiatives and activities that support the vision. A vision is shared experience for the whole organisation.
To avoid a statement that is fluffery or rhetoric, the best way to approach a vision is to ensure it has a practical application. It needs to be understood by both the company and the customers it serves, and all activities that the business performs reflects and supports that view.
There is a raft of question that a Business Owner/Leader needs to answer before attempting a vision, these are typically made up of the following:
Once a complete view of the business is in place and all the relevant the questions have been answered, keywords will fall out and start to formulate what the vision of the business actually looks like. It may be that a business’ product or service has very good delivering capabilities, and the business wants to strive toward excellence in that delivery. Therefore the vision may sound like “we deliver the best Australian building supplies”. Examples of how keywords are used can be shown in the below:
The world’s most customer-centric company.
Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork, and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices.
To create a better every day life for many people.
Google's official mission or vision statement is to organize all of the data in the world and make it accessible for everyone in a useful way. Google also has an unofficial motto to avoid being evil.
To provide our customers with the widest range of home improvement products at the lowest prices everyday, backed with the best service.
After a vision has been created, then a cluster of activities can be listed in order to achieve and support the statement. If there are ‘gaps’ in the business, meaning there are activities that are not being performed but are now needed to be put in place, then those can be easily identified and developed. This could be in the form of re-training sales staff to be less transactional and more relationship orientated with sales kits that have a set of behaviours and phrases that the business would like said “on the floor”. Another area may be in a business’ operations, and revisiting all supplier contracts to ensure the cost per unit is competitive and the quality of the product isn’t compromised. And as each area of the business is reviewed and measured, it is evident that the vision is now a living, workable entity in the business.
Firstly, we have a vision. Perfect. The Business Owner/Leader has plans in place and teams are starting to understand what they are doing and where they are going.
Now, the dynamics in the team of the business are a major focus.
Can the team work together to create innovations for the business? Can the team independently and organically develop the business further? If the answer is an unflappable yes to both those questions then you have achieved “synergy”.
The definition of synergy in this case is “the interaction of elements, when combined, create a total effect greater than the individual sum”. The group effort is far greater and powerful when working together than when each member is working on their own. How can we develop synergy in our groups? There are few key ingredients that can be cultivated together to achieve synergy, and they are4:
These three ingredients will bring a team that can share their thoughts, raise problems in the spirit of the group solving them, develop, contribute to, and build on new ideas. And in turn, generate synergetic energy in the team and across the business. So when thinking back to the vision and how teams can use them - visions are the overarching notion that helps teams seamlessly come together with a common goal to very simply get on the same page ….and stay there.
2 Lundin, S. C., Paul, H., Christiensen J. (p90-91) Fish! A Remarkable Way to Boost Morale and Improve Results Hodder & Stoughton. London UK.
Knowing where a business is and where it needs to be, forms only the start understanding this week’s topic. The ideal cycle of business has an owner, that is, a person or persons, who are responsible for the business as an entity and who have taken on the risk for operating that business. The owner then invests time to build a team, who in turn, services the business’ customers, providing revenue for the business and dividends back to the owner. This can be simply depicted in the following diagram:
The cycle of business above can be explained further by Michael E. Gerber in his book the E-Myth Revisited when he stated that he views the business “as a network of seamlessly integrated components, each contributing to some larger pattern that comes together in such a way as to produce a specifically planned result, a systematic way of doing business” (Gerber M. E. p72)1.
Typically businesses, and in particular small businesses, have this cycle in mind when they begin, and have an understanding of how the business is currently operating, employing a team and dreaming of where they would like for the business to go in the future. Unfortunately for many owners, they remain stuck at this juncture. Often this is because the owner or owners are still working as part of the team, for example, servicing the customers, and can therefore only grow to the sum total of their time, which in this case, is predominantly spent with customers.
The cycle of business is where most business owners want to be because it means they can work ON their business, looking at ways to grow it, nurture talent within it, and find additional areas of revenue and profitability. However as is often the case, owners have difficulty reaching this goal because they are still working IN their business by being a “team member”, if not being the best team member, servicing the customers directly (when they have employed a team already to do that job). To transition away from working as a team member, an owner ultimately is required to fire themselves and step away from daily activities.
So, how can an owner successfully build a business they can no longer work directly in? What are the roles and responsibilities that business owners need know so they can still work ON their business?
LeBron James, the three-time NBA Championship winner and Most Valuable Player explained his view on teamwork by saying “I think, Team First. It allows me to succeed, it allows my team to succeed.” This thinking is exactly the same for a business. The team that an owner has employed is the most valuable group that will drive the business forward. They service the customers, they provide ideas on better ways to sell more products to customers, they communicate what the market needs to know about the company and they provide the profits. These are very good reasons why owners should be investing their time into their teams. The role then, of the owner becomes clearer, it becomes that of a Leader.
A newly transitioned Leader takes on different roles and responsibilities including:
If in the above example, the owner had difficulty moving away from being a star sales performer, perhaps it was time to replicate. That is, detail exactly what it is that makes the owner an excellent sales closer - they could be simply selling satisfaction2 - whatever it may be, teach and transfer those skills to the Team. Making not one, but multiple excellent sales closers. The point of the exercise therefore takes us back to the Cycle of Business - where the owner turns their focus to the Team and what they can do to grow and support them.
The second part of the Cycle of Business is in the Planning. A team who is competent, ready, trained and able to handle customers is all well and good, but they will lack the motivation to keep going when they have no idea where the business is heading. That is why its important for to business owners to focus on building a great team and creating a plan of action.
The business owner (who is now a Leader), is required to develop a vision and communicate that to the team. The vision will clearly explain the business’ values (what it stands for) and more importantly, where the business sees itself going (its ultimate destination). The owner can then translate this vision into practical terms through manageable goals and steps showing how the business will achieve those goals.
Initially in the planning process, it can be quite overwhelming to write down a large exhaustive list of every single action that springs to mind, therefore it is recommended to find widely used time management or planning tools3 that focus on short term goals. When plans are used in a shorter time period, such as 90 days, it is much easier to commit to and complete them. Sharing the vision and this shorter term plan with the whole business gives everyone much needed clarity and motivation to know their efforts are contributing to the bigger, more exciting picture.
Understanding where the business sits after a cycle of 90 days becomes an invaluable tool for shaping and developing a business. The business Leader can determine what’s been achieved and why, and re-evaluate personal and professional goals. The planning process may reveal the need for further systems to support the business, such as customer payment gateways or project management systems. Whatever the need the owner now has the ability to keep control of the business through the planning process and use it as a powerful motivating tool. Beginning at the end of each planning cycle creates better, more memorable milestones and allows the owner to celebrate the previous achievements with all the team.
Before we address where a star product is in a business, it’s important to perhaps revisit the business fundamental of knowing the difference between an asset and a liability1. Put simply, a liability is an item we pay for, in order to acquire or maintain it. An asset on the other hand, is an item we also acquire and pay for, but the amount we pay into it, is an invested amount, because the item actually gives back to the business by way of dividends or an income. In this paper we use this style of understanding of this principle to identify and build on our assets.
Star Products. What are they are and how do you know if you have one in your business? A Star Product is the single product &/or service that yields the most profit for the business, the sales team are well versed in delivering it to customers, and the competition/market forces are unlikely to hinder the business in continuing to deliver it. One of the golden rules to marketing in a small business according to author Jay Conrad Levinson in Guerrilla Marketing is to “design your business to operate for the convenience of your customers, and make it very easy [for customers] to do business with you.”2 Star products support this golden rule by being accessible to customers and the business who deliver them, have reconfigured themselves to keep delivering them into the market.
In order to find a Star Product in a business, the first step is to literally list every single product &/or service that a business provides to its customers and sell to its target market. Of that group, place two financial dollar figures next to each of them. The first figure represents the cost of running those products in the last 6-12 months. The next figure is how much revenue it generated in the same period.
It will soon become apparent that there are products in the business suite that act as a “value-add”. That is, those products &/or services that provide little to no revenue. This is a positive marketing strategy that shouldn’t be disregarded because a business delivers value-adds to customers in addition to its core services as a deliberate strategy to secure loyal customers.
However, in this instance, we are only concerned about identifying products that provide the highest amount of profit after costs have been deducted. It’s those products &/or services where the end result is - for every dollar the business spends on delivery/production, two dollars are returned back into the business3 - then, using that return as a basis for long term growth. Listing out the products &/or services can illustrate where (and if) a healthy return is occurring in the business at the present time.
Once a list with all figures have been completed, it will provide the business with perhaps two or three products &/services (or even a singular stand out one already). At this stage, it is best to ascertain how easy it is to compete, win, and continue to provide the two or three products &/or services left on the list. The market may reveal that one of those products &/or services has few competitors and does not need to jockey for position. In which case, you have found your Star Product.
For those businesses where it is more competitive, or businesses who are in intensely saturated markets already, it may be helpful to use a simplified test using Michael Porter’s 5 Forces4. Apply this set of questions to each of the remaining products &/or services from the final items on the Star Product search list:
1. How easy is it for a new competitor to arrive in the market?
2. Does the buyer/customer have major power to bargain?
3. Does the business have major power to influence the cost of materials and supplies?
4. Is the business product &/or service easily replaceable (if so, when)?
5. How much rivalry is there with your competition?
At this stage, it is more than likely that a product &/or service has emerged as victorious. This means that this product &/or service is not very easy for competitors beat; the customer isn’t overwhelmingly powerful in their buying power; the business has the ability to reduce supplier costs to create greater margins; it is unlikely to be superseded by a substitute, and finally and the business has the fewest amount of competitors who could offer something similar to customers. This Star Product is now ready to be treated as a key business asset.
1 Kiyosaki, R. T. 1997. Rich Dad Poor Dad. TechPress Inc. Arizona. USA
2 Levinson, J. C., 1993. (p26) Guerrilla Marketing Excellence. Houghton Mifflin Company. Boston, New York. USA
Small businesses with a solid pricing strategy can still be perplexed with the concept of discounting. The advantages are obvious - the business attracts a high volume of customers in a short period of time and builds a customer base responsive to price1. The disadvantages however, are many, starting with the larger businesses and mass retailers able to sustain their lower prices based on their superior relationships.
A larger retailer has the luxury of economies of scale2 which gives them a lower price per unit with its suppliers and producers based on the large quantities that they can sell. With an inbuilt larger margin, the mass retailer is able to not only gain larger profits for the same item as a smaller business, but it can also discount a product without losing a base-line profit in the existing market. They can also reduce their costs and increase their margins by simply buying and owning the suppliers that produce their items. They then can keep their leading market position based on what is called vertical supplier chain integration3 as well as their ability to use economies of scale.
Small business with little buying power, lower volumes, unable to buy their suppliers and producers businesses and have difficulty in sustaining discounts without losing valuable profit need to be sceptical and cautious about discounting when it appears in their market space. Some small businesses who haven’t given discounting enough time and thought will see the discounts in their category may wonder if they should follow suit. A clear disadvantage of discounting for a smaller business is that consumers will start to associate a lower price with lower quality of product or service. This customer may perceive that the product or service is an end-of-the-line, hard to sell item and that the discount is the business’ an attempt to move that particular stock quickly4.
Being the smaller fish in the sea means a shift in thinking about discounting products. The shift being toward not doing it.
Even with a 10% reduction in a product it will result in a much higher level of effort from the smaller business to claw back the same amount of money as they would receive had they not given the discount in the first place. Discounting devalues a product or service more especially if a price rise wasn’t instigated before the reduction.
A way to combat a competitor in the market who is intent on discounting is to switch tactics, focus on just one or two customer items, provide a clear benefit that is different from rivals and do that one item with super efficiency so the business is able to gain maximum profit5. If a price war between businesses means your business loses customers and probably much more, don’t do it. Discounting is not the way to go.
Big Rocks: The College Professor Story
For those who haven’t heard the entire fable of the College Professor and his jar of Big Rocks here it is again:
A teacher walks into a classroom and sets a glass jar on the table. He silently places 2-inch rocks in the jar until no more can fit. He asks the class if the jar is full and they agree it is. He says, “Really,” and pulls out a pile of small pebbles, adding them to the jar, shaking it slightly until they fill the spaces between the rocks. He asks again, “Is the jar full?” They agree.
So next, he adds a scoop of sand to the jar, filling the space between the pebbles and asks the question again. This time, the class is divided, some feeling that the jar is obviously full, but others are wary of another trick. So he grabs a pitcher of water and fills the jar to the brim, saying, “If this jar is your life, what does this experiment show you?” A bold student replies, “No matter how busy you think you are, you can always take on more.” “That is one view,” he replies.
Then he looks out at the class making eye contact with everyone, “The rocks represent the BIG things in your life – what you will value at the end of your life – your family, your partner, your health, fulfilling your hopes and dreams. The pebbles are the other things in your life that give it meaning, like your job, your house, your hobbies, your friendships. The sand and water represent the ‘small stuff’ that fills our time, like watching TV or running errands.” Looking out at the class again, he asks, “Can you see what would happen if I started with the sand or the pebbles?” 1
If the Professor started with the sand or the pebbles then that would mean his time (jar) would be filled with just the “little things”, leaving no room for the big things.
Being able to work on those areas in your life that are the most valuable and most important to you starts identifying your own set of “big rocks” to focus on. If we only spent time on the smallest or smaller things in life then we miss out on achieving and nurturing our dreams and aspirations. Laying out and setting major priorities leaves a productive division of time. Asking “Is this the most useful use of my time?” to reconnect with those bigger values ensures you are able to work on those areas.
There is something that no one tells you at school - when you write down a goal you are more likely to actually do it. To back this theory up a study conducted by Harvard to find out why 3% of its graduates made ten times more money after they graduated than the other 97%1. One of the primary reasons was that the top 3% took the time to write down and clarify their goals. Why would a small handful of student who managed to write down and clarify their roles wind up making more money? They committed themselves to an outcome, put importance on their plan, carefully stepped out their goals and sent positive messages to their brain so that they could make those goals happen.
On the other hand, if there is no plan, it means the end destination doesn’t matter. Under this method, the path you take will take you to a place, somewhere. It’s when that ‘somewhere’ becomes a destination that you actually want to be in, and it affects your future, that a plan starts to matter. Even the staunchest chaos theorists know that one small internal change will predictably result in changing the course of an entire system2. A plan allows those unpredictable changes to occur, adjusting the system to get back to the ultimate destination. Writing down your goals, making them specific with deadline3 really is a simple way to get the wheels in motion in a business or team.
However, changing the course of a business can be challenging and communicating where you want to be and how you propose to get there can be difficult. Finding out how to write a goal down is an important skill. Being too broad, general and without a timeframe won’t ignite an outcome. For example, a business may want to be “the biggest and the best” in their category. The goals come after that initial vision is set, which may take the form of “retrain sales staff to cross sell”. It is important to draw a distinction between a vision and goal. A vision is that ‘big picture’ ‘blue sky’ statement. A goal is a step, something that is tangible, that follows that vision. A goal isn’t a thought or emotion - it’s an action. A set of goals is a roadmap of actions that make sure that the changes that you are doing inside your business are still predictably able to get your business where you want it to go (vision).
Finally, after setting goals such as SMART goals that have been used in business for decades (Specific, Measurable, Realistic, Timely)4, let’s not forget Feedback. Without feedback we are setting a rigid set actions to perform without knowing if they are actually making a difference5.
Remembering to check, evaluate and collect feedback for each set of goals. Making plans can be quite exciting, especially when the course you have set for yourself and your business truly meaningful.
It’s Monday morning and the boss walks in. Everyone stops talking about their morning mid-sentence, shuffles to their stations and begins tapping on their keyboard, measuring up, drilling, cleaning...anything. The number one reason why staff leave their jobs is that they don’t like their boss1. Effective leadership is one of the most talked about and elusive skills to master because it involves two unknown factors - other people, and other people’s personalities.
Working out your own personality and potential leadership style(s) is a good place to start. There are many different experts who categorise leadership styles. For example, David Coleman has six emotional leadership styles: Visionary, Coaching, Affiliative, Democratic, Pacesetting and Commanding leaders2. Each have their positives and negatives according to the groups and situations they manage. However most widely used group of leadership styles are: Laissez-faire (free reign to staff), Autocratic (single decision maker with little input from others), Participative (democratic decision making), Transactional (use of rewards for meeting performance standards), and Transformational (high communication/visibility in the team, big picture focus, delegate small tasks)3.
Once you have formed a picture of which type of leadership style you may be then the next step is to ask yourself what does that your style say about you? A 360 Degree Review can be drawn up although it not necessarily reliable4 on its own as there are personal relationships and biases at play, never the less it may be useful. Perhaps ask yourself in addition to surveying your staff - how do I feel when you lead? Am I getting the responses that I am looking to achieve? That is the core of leadership - influencing others to willingly do what you would like for them to do without fear or hostility.
Humanising yourself as a boss is important. To be ‘a person’ and not an entity creates a personal connection where sympathy, respect and listening to others invigorates a team, to the point where you can even throw down a challenge and they take it on. Dale Carnegie wrote about this kind of influencing in How to Win Friends and Influence People in 1936 - a book which has since been re-published over 30 million times. Influencing rather than telling people what they should and shouldn’t do is more effective in the long run. People need to feel a sense of being part of something great and that they have made a difference to the world. A great leader understands and activates this innate human need to belong and contribute without arousing resentment. In fact, building rapport with others is central to taking a plan and turning it into a reality.
Influencing others can also operate on a subtler level than knowing styles and techniques. Body language such as ‘matching and mirroring’ another person has been widely recognised as a psychological cue, communicating to the other person that you are on their side. Additionally, and importantly, mirroring and matching actively shows you understand the other person’s feelings and intentions5. Body language is powerful even in situations when perhaps a person is feeling overwhelmed when normally they would curl their shoulders inward and lowering their head, the person instead adopts a “power pose”6 (think Superman and Wonder Woman). This pose automatically increases the levels of cortisol in the body and quickly communicates to the other person high confidence and personal mastery. Even the pace in which we breathe communicates to other people our thoughts, moods and intentions. If we breathe at a fast, short pace it shows impatience, worry and in some cases panic. To monitor your breathing as a leader could mean that you adopt an even pace of breath, slower speed of speaking and subsequently communicate to others a calmer consistent personality.
Pulling together the combination of your style, the ability to influence other people and using body language to communicate that you are the type of person that can work positively with other people will create the foundation of a terrific leader.
Now you can picture a new Monday morning. Two people are chatting about their mornings, they give you smile and a nod to say hello. You smile back, ask about their weekends, listen. They let you know what they have on the go that day while another group say hello and get ready for your ten o’clock catch up meeting. Great leadership is more often the result of what isn’t said but done.
2 Goleman D., Boyatzis R. E. and MacKee A. 2002, The New Leaders: Transforming the Art of Leadership Into the Science of Results. Little, Brown Book Group. London United Kingdom.
Carnegie, D. 1936, How to Win Friends and Influence People. Gallery Books. New York, America.
Building a great business generally entails mastering each of the four major categories - Leadership, Sales and Marketing, Finance and Operations. Understanding each category and balancing out or mitigating the areas which are not as strong, has proven to produce sustainable businesses.
In the event that a business is not producing the outcomes that it first set out to obtain. It may be an idea to determine which area of the business requires the most attention by exploring each of the four categories. Finding out the weakest point in a business using the four spheres is critical because a business cannot grow further than its weakest link. There are weakness tests (Buckingham, 2007. 94) and assessment tools1 available to undertake which may shed light on where to begin. The ultimate aim, however, is to develop a team or a skill set that ‘turns up’ to a business each day, much like “a good team [that] volunteers his/her strengths most of the time.” (Buckingham 2007 p64).
A good place to start is with the first sphere - Leadership. It is often spoken about however it is relatively difficult to quantify. So what really what makes a great leader? There are many qualities to identify in a leader. For example, having the ability to self-analyse, being a good listener, continually learning, being an excellent delegator, having persistence, surrounding oneself with other great leaders, humility... the list is endless. Essentially to be a leader and to lead a business is similar to setting a ship to sail. Firstly, we must know the direction and the purpose of a voyage. We all need to know why we are sailing, what we wish to achieve, and what exciting possibilities the journey may bring. That’s what leadership provides. The vision, direction, aspiration and energy that a crew requires to make any situation a success. Although each leader has different set of traits - it is in the combination of those traits with those of the team that will determine the way in which a business or situation is managed. Capitalising on this knowledge, many great leaders have the ability to adjust with a team to achieve group equilibrium so that they can unite to a common cause.
Sales and Marketing
The second sphere Sales and Marketing is one that rests primarily on emotion. Evoking a sense of urgency, creating trust, curiosity, excitement, persuading others into action and providing security. This sphere is all about the “moment of truth” when a customer reaches a business’ front door. Many questions can be raised such as - is the sales force able to overcome objections? Is the customer service person personable, persuasive and can sell additions or upgrades? Closing a sale is the lifeblood of an organisation and having the ability to convert a conversation into a sale is a fundamental requirement.
Marketing a product or service provides the much needed emotional reinforcement before a sale (to bring a customer to a business) and after a sale (to allow the customer to opportunity to know they have made a great decision in their purchase). Marketing is designed to bring in a defined group of customers to a business through clear communication. Thus increasing the probability of converting sales with increased numbers of customers arriving at the place of business. In order to truly set a business apart in the marketplace and gain the most amount of customers, a business needs a clear point of difference and unique offering to communicate. Once that is devised, there are many different ways to communicate it to attract more customers, whether it be inbound activity (social media, word of mouth) or outbound activity (public relations events, advertising, telemarketing, direct mail).
Organising how to respond to customers brings us to the third phase - Operations. Managing the business on a nuts and bolts level. It is an art form in and of itself, that requires great precision and organisation. It involves the all there is to know about supplier chain logistics, managing the raw materials of production, enforcing quality control, implementing new systems and technology, managing the maintenance on items such as machinery, managing the delivery process of a product or service including just-in-time processes, workforce reporting... basically, trying to keep all the plates spinning in the business at the same time! As operations is viewed as a cost-centre of a business (it doesn’t generate direct sales), to make this area earn its keep, means to create efficiencies in “how things are done”. When this is done well, a business’ operations can be an added source of profit margin.
The final and often least favourite sphere is Finance. It is one that is left to do at the bottom of the in-tray. However, in this paper we place it equal to all the others as it is our barometer of health to a business. Having the best tools in processing a sale, calculating the profit margin, balancing assets and liabilities, managing the salaries and overheads of a business is a set of skills that is either outsourced or managed in-house. Either way, it is absolutely a base requirement for any business - knowing one’s numbers. Understanding the difference between turnover and profit. Reading a Profit and Loss statement, and more importantly having a clear idea of how much cash flow is in a business. Financial statements are a true indicator of the viability and long term stability of business. They provide information on whether to expand a particular area of an organisation (cost of production versus cost per customer transaction), whether to ramp down the business (sales figures are down and head count is too high for that seasonal period), or readjust the entire business model (opening a business unit to accommodate auxiliary business-to-business or back-end transactions).
How to apply the theory
Once the each of the four areas are understood in relation to the business’ current activity, a business may only need one or two areas of focus. For example, a construction business may have excellent Operations, Leadership and Finance but may require assistance in strengthening Sales & Marketing to boost their profile in a highly saturated market. An accountant may be excellent in Finance and Operations but may need to be open to different ideas on leadership and ways to promote their business. For a business to change and grow, no matter which situation it finds itself in, the transition starts by first knowing the four spheres, identifying which ones are currently working well, and what generally is left, is the sphere(s) that a business can now gain expert advice on. If on the other hand, when the 4 spheres converge and work together harmoniously, then the business will experience long term results and amazing growth as a result.
Further online reading:
Buckingham, M. 2007, Go Put Your Strengths to Work, Free Press. New York.
Turnover is Vanity. Profit is Sanity.
Turnover is interesting to know because it is representing gross monies a business generates for a business. It provides information about the total number of transactions that have occurred within a business in a given sales period without taking other business expenses into account. This is the simplest and most widely used form of describing turnover.
In some businesses turnover refers to how well a business is using its assets and liabilities as compared to its sales. If a business has to spend more to move its inventory and parts than what the revenue of sales are, then maintaining those sales orders are no longer viable. Therefore, businesses with efficient back-end operations manage their assets and reduce their liabilities in order to produce a sale at a decent profit margin.
This is why turnover is a relative term. It refers to the effort level a business expels, in order to gain and fulfil its sales, however the business requires sustainability which can only come from a healthy profit margin.
Which brings the discussion neatly over to profit. In this paper we term profit as a net figure - after the initial sale is made, business expenses are deducted, and the product or service has been rendered to the customer/end user.
Profit is the clearest indicator that a business is thriving and operating at its optimum. For example, Cash Flow or Income Statements detail all deductions and expenses against the total sales revenues. Line items deductions include cost of rent, utilities, salaries, equipment/machinery maintenance and depreciation, cost of stock/inventory, administrative costs etc.
The reason why profit referred to as “the bottom line” is in business statements the profit amount is worked out at the very bottom of the sheet. It is the cold hard fact after all business activity has finished for that period.
Profit is the state of play for all businesses. Sometimes it is better to cease some activities, take a step back, and see where the profits are leaving a business with its current sales orders, than to continue to fulfil more orders only to see lower profit margins.
When business owners say they are working harder than ever before and taking every hour that is given to produce their product or service, it often raises the question: is there another way to build a long term business? Do business owners always have to be involved in every part of production? It’s hard to image a day without picking up the tools and “doing something”. And as satisfying as it is to produce something in a day, it’s exhausting and time consuming.
Ultimately, there are really only two ways to approach the role of a business owner - to operate as a highly skilled employee or to operate as the leader. Employees work in a business to do what is required to produce a product or service. Leading on the other hand, takes a step away from all the ‘doing’ and begins from an altogether different standpoint.
How to work On a business
Taking a leap of faith to shift into leading existing staff is the first, and possibly most significant step of working on a business and not in a business. Business owners who have done so find themselves with time to develop and implement growth plans.
The first steps of freedom often involve working on developing personal leadership skills and mitigating those traits that are counterproductive. Educating oneself, taking courses, attending seminars, networking, absorbing the latest thinking and innovations that are in the marketplace. This stage of the process is to build the skills and knowledge that will underpin effective and worthwhile decisions.
Working on obtaining and retaining staff often follows. Being able to delegate successfully and hire the staff that can get the job done, and do it well, is an art form in and of itself. All businesses require a clear set of expectations for their staff. Once this is in place, retaining a great team may be to work on implementing a staff development and engagement program to inspire and further motivate.
Working On a business means being able to take a holistic view of all the different moving parts of a given business. Stepping back from the ‘doing’ in order to synchronise all the parts so that they operate at their optimum capacity.
Time Mastery tools https://www.actionvictoria.com.au/tools/time-mastery-tools
Why is business coaching important?
Managing a business in differing economic times and remaining competitive as well as profitable are key challenges facing Australian businesses. It no longer is a matter of simply demonstrating the ability to sell a product or service in order to be a viable entity. With the proliferation of other business in Australia, businesses are required to develop and maintain their competitive advantage and know how to exercise buying power, respond to threats of substitution, barriers to entry and exit, and others jockeying for position within their own industry1. The business community in Australia has grown at such a staggering rate that in 2013 Australia there were 563,412 small businesses employing approximately 4.5 million people2. Last year, Australian small businesses grew even further to employ over 4.7 million people3.
The extended language of businesses in Australia now includes the ability to deliver on not only operational efficiency but also in areas of sustainability, differentiation, and solid leadership. Coaching has therefore become an integral part of this new wave gaining a steady momentum over the past decade. Business coaching also assists business managers into becoming business leaders. A core area of leadership is the ability to motivate, inspire and produce a higher level of productivity in teams through skills such as modifying behaviours and understanding preferences of behaviour to bring about change4.
Subsequently successful businesses in today’s landscape have increasingly sought relationships with those that can sustain and grow their business in the long term.
What do business coaches do?
Business coaches assist business managers into becoming business leaders. A core area of leadership is the ability to motivate, inspire and produce a higher level of productivity in teams through skills such as modifying behaviours and understanding preferences of behaviour to bring about change4. They take holistic view of a business and also have in depth knowledge and practical experience on how to better market and improve the state of a business on an operational level.
Business coaches such as ActionCoach® create a trusted environment where business owners can analyse, monitor and plan their activities. They can be viewed as pseudo Board of Directors for businesses, and relied upon to give appropriate levels of accountability. A business coach is similar to a sports coach of a major league team, they provide learning opportunities and identify areas to strengthen and maintain. Additionally, a business coach will ask those tough questions which for various reasons have been avoided.
Researching which business coach is suitable to ensure a business owner receives positive results is highly recommended. This can be done by reviewing their online presence and contacting an organisation to discuss their capability. Reputable organisations will offer the ability to reference check their business coaches by way of providing direct access and contact details of their clients.
Are there different styles of business coaching?
Yes. Each business coach has his/her own personal experience and finding the coach that suits an owner is important. The journey that is undertaken is for a year or in many cases, multiple years. Business coaching organisations give owners the opportunity to experience a coach through various events throughout a given year.
The delivery of how coaching is provided also comes in different forms. The most common and effective is one-to-one coaching, where both the business owner and the business coach assess that particular business and arrive at a highly individualised program. Other forms of coaching are delivered through team training, providing interactive experiences for all involved; or a round table boardroom approach where multiple business owners to meet and share their collective views.
5 https://www.actionvictoria.com.au/ is an affliated organisation of ActionCoach®
More and more it appears true that the only way businesses today, whether large or small, are going to survive and thrive is through accelerated innovation. Your business, even if you’re an independent professional or small firm, needs to stay on the leading edge…or die.
Ask yourself if you’ve done any of the following in the past six months…
• improved or refined your marketing messages
• developed one or more competitive, new services
• expanded your outreach to current clients and customers
• discovered new ways to connect with prospective clients
• developed or improved your Internet/web presence
• partnered with other business owners to multiply your reach
There’s an old saying…”if you’re not moving up, you’re moving down, and that there’s no such thing as hovering.” You can’t remain stagnant and hope to compete in today’s economy. And the very worst thing you can do is to hope that the economy will somehow, someday improve.
Here’s a scary thought for you….
What if it doesn’t for a very long time? The current economic downturn has been around for over two years with not a lot of light visible at the end of the tunnel. The war in Iraq isn’t helping much. The stock market is still in the doldrums. Negative news abounds.
But now for the good news…
A lot of businesses are doing just fine, thank you very much. And they’re not doing fine because they are lucky so-and-so’s. They’ve adopted a strategy of Accelerated Innovation. And it isn’t a one-time flash-in-the-pan. It’s simply the only way to do business these days. They’re taking consistent, effective action to get to be known as the leaders in their particular fields.
• continually improve their marketing messages…
They realize that clients are moving targets. What appealed to them today might be different tomorrow. So, they reassess their messages and communicate what’s relevant, right now. They zero in on the issues, challenges, problems and pain that are most prevalent.
• develop competitive new services…
The wonderful advantage professional service businesses have is that they can create new services on a dime. Very little expenditure of time or money is required; it just takes some insight, creativity, and effort to put their ideas into action. They don’t settle for their existing services because they’ve come to know that the most profitable one may be the next one they develop.
• expand their contact with current clients…
It always costs less to sell current clients new services than to find new clients. Successful businesses have established ongoing client contact programs, and continually offer something new. What are you doing to keep your clients happy and loyal?
• find new ways to connect with prospective new clients…
They grow their mailing and e-mailing lists, providing free samples of valuable information and sending content-rich e-zines. They focus on providing value and gaining credibility so when prospects are ready, they’re seen as the vendor of choice.
• develop or improve their Internet/web presence…
They realize that there is no more efficient vehicle than the Internet to get word of their services out. And they’re not complacent…rather, they’re restless…always looking for a better way to present their services. If your site and your message are stale, it’s time for a facelift.
• partner with other business owners…
The concept of joint-venture partnering has never been more relevant than now. Smart business owners are not just selling their own services…they’re selling each other’s services as well…and reaching a much wider audience. Partnering through strategic alliances, host-beneficiary arrangements, co-sponsored workshops, internet-affiliate deals, endorsed letters, etc., are some of the powerful ways to do this.
If you’re waiting around for something to change in this economy, you’re going to be very disappointed with your results in the coming year.
Additional Thoughts on Accelerated Innovation
We’ve discussed some of the innovative marketing strategies smart professionals are using to accelerate results. But how do you get moving on all this stuff without getting overwhelmed? Consider…
• doing one thing at a time…
It’s recommended that you create a big “Master List” of all the things you could do in your business to accelerate your marketing. Any time you read a business book, or hear a new idea, write it down on this list and review the list weekly, at minimum.
• prioritizing and focusing…
You can’t do everything on the list, but just doing one or two a month can yield massive rewards, eventually. Review your list and determine which items will likely have the best return. Also, work at implementing the simple things as quickly as possible.
• creating an action plan…
Complex projects can take time and so, require planning. An action plan is simply a list of things you need to do in some form of chronological order. Keep it to a page or less. Better still, make it part of your agenda process. Refer to it every day and add items to your daily to do-list. Chip away at the most important priority, one step at a time, until it’s complete or resolved. That way you’ll always be working on the most important thing on your list at all times.
• getting/keeping a coach/advisor/mentor…
The coaching/business advisory field is growing by leaps and bounds for a very simple reason – it works! Having someone who is as committed to your goals and success as you are is a very powerful thing. Set very specific goals for accomplishment, and have your coach/advisor help you keep to your action plans, and support you when you get stuck.
• becoming a fanatic…
You’re not going to get far in your business if you just want to lay back and simply daydream about your success. Jump in with both feet, and do ten times more on a project than you normally would. Push your envelope, push your boundaries and you’ll see significant, corresponding results.
And that’s worth thinking about…
A significant decline in economic activity, which usually spreads across all levels of the economy is called a recession, a phenomena that ever so often occurs throughout history, and has currently resurfaced. Indeed, the global economy is facing another downturn, affecting companies of all sorts, including real estate firms, financial institutes, service providers, the retail and entertainment industry as well as manufacturers in general.
Dealing with a worldwide recession is a painful matter. It affects the entire economy and every national and international company is faced with the same decline in business, as well as a lack of funds and resources.
Hanging onto every thread of hope for recovery can be quite frustrating and draining, yet does not need to be. Successful businesses will simply not accept defeat without a fight and instead focus on their problems. They will recognize their challenges and approach them with aggressive actions and measures, all leading up to victorious solutions that will help them get back on their feet and reach their previously established long-term goals.
Every recovery-action a business takes is vital and can make the difference between survival and defeat.
Therefore, a company in trouble should think about reform and not hesitate to seek assistance from professionals to support them in this process.
Professionals, like Business Coaches, are trained generalists who can show you, or your managers, how to focus and set practical goals for their company, and at the same time, help develop effective marketing strategies and solid business plans. They will illustrate how to be more creative in business, and make healthier and more informed decisions. The better you are prepared to deal with all business situations, the more successful your business will become.
It really is important to keep focused on progress, even during an industrial depression. Established business coaching service companies, such as ActionCOACH, offer one-on-one service, as well as group coaching, workshops and seminars. Their team of experts can teach you how to keep a positive attitude, and a professional Business Coach, assigned to you personally, will show you how to properly track your income and spending. The support system goes all the way, including providing tips and tricks that can help you improve all aspects of your venture.
Assisting and guiding frustrated company owners through hard times is what committed Business Coaches do, and do best. They have gathered such an array of experience in the field that hardly any problem a customer may face will remain unapproachable or unsolvable or, even during hard times and recessions.
The decision to invest in business coaching services can be a daunting task, but in the end the investment will pay off. With the help of a Business Coach, you can distinguish yourself from the competition, and standing out may just be what you need to achieve your goals and survive these turbulent economic times.
As a business coach one of the first things I must determine is whether a business owner suffers from the “I Know” disease and whether they can be cured. If I had a dollar for every person who thought “What can you possibly tell me about my business…I’ve been doing this for…years…,” I could wallpaper my house.
Not only could I definitely provide some impactful insights into their business, their customers could probably provide even more if they were asked. Now before you start thinking “Who does this guy think he is…,” let me admit I had the “I Know” disease when I helped grow my company to the top 2% of 20,000 competitors. Looking back I am sure I had lost perspective the last several years and badly needed an objective outsider to give me the hard truth.
If you are wondering if you may be afflicted, here are some warning signs
of things you may think or say:
• “That strategy would never work in my business.”
• “You don’t understand. My industry is different.”
• “We tried that before. That doesn’t work.”
• “I’ve been here for 20 years and know what works best.”
• “This is the way we’ve always done it.”
• “When the economy comes back and things get back to normal, we’ll rebound.”
The reality is that every time we think “I know,” “My business is unique” or “Our industry is different,” we block our minds to any opportunity to learn. If we are able to keep our minds open to the possibility that a differing view or new idea may have value, we are able to absorb and apply the information. Think about how easily you may tune out your spouse when they are telling you something for the 10th time. Or how your teenager ignores your sage advice. This happens in business all the time because we feel we know so much about our business and industry that there is nothing new to learn.
If you’re thinking there are no more big ideas left, ponder this. A flushing toilet was invented in 1596, but Scott Paper did not manufacture toilet paper on a roll until 1890. Took almost 300 years to come up with that brainstorm? I’m guessing we have some upside in our businesses if we open our mind.
What do I suggest? Consistently challenge the status quo because the results will not change until we do. Strive to implement at least one new idea each week to drive huge annual improvement. Ask your customers and team members for feedback and ideas consistently. Then think about ways you CAN apply the ideas rather than reasons they will not work. If you’re really daring, ask an objective outsider for their honest opinion of what they see in your business. You might just be surprised about how much opportunity is in your business even in the current economy.
Is your team not performing up to your expectations? The good news is that you have more control than you think. It could be due to a lack of clear direction and focus.
Leadership begins with painting a current picture of the future in the form of a vision. As the owner and leader of your company, you can determine what your business will look like years down the road. Steven Covey, in his book, “The 7 Habits of Highly Effective People,” says to “Begin with the end in mind.” Think about the impact that your team could have on your company if they have an understanding of your long term vision, are guided by its presence, and are energized by drawing from your passion!
By now you might be asking: how do I communicate my vision so that my
team embraces it, is energized by it, and becomes more effective? Three
• Write a vision statement about that which you are passionate
• Creatively and frequently communicate that vision to your team
• To obtain practical benefit, continuously use that vision statement as a decision making filter and require it of your team.
What is a vision statement?
A vision statement is the longest term goal for your business that you can imagine. However, to be effective you must believe in your vision and be passionately committed to its fulfilment.
Your vision doesn’t necessarily have to be limited to your lifetime. For example, the vision for ActionCOACH is: “World abundance through business re-education.” Your vision is the overall strategic intent for your business, reduced into one or two passion instilling sentences so that it is easily recalled and remains front-of-mind with your team.
How do I communicate my vision to my team?
A vision statement should be living. By living I mean that it should be communicated everywhere, in as many creative formats as possible: audibly and visually. Imagine every member of your team stating your vision accurately and immediately upon being asked!
When hiring, one of the selection criterion should be how willing the candidate is to identify with your vision. As the owner of the vision, be constantly looking for innovative ways and opportunities to communicate it. As you do, your team members will catch the dream and follow suit.
Of what practical benefit is a vision statement?
Crafted and used properly, a vision statement can become the North Star to your overall business strategy and decision making process. Your business plan should spring from your vision. Your yearly plans and your 90 day (quarterly) plans should align with your vision. Every decision that is made in your business should be congruent with your vision. Your team should be in the habit of cross checking their plans and decisions with your vision. Just as the sailors of old aligned their direction with the North Star, so should all of your planning align with your vision.
So many success stories have evolved from one person’s passionate commitment to a vision and enlisting others to carry it out! In the absence of a vision, many businesses are challenged to identify their highest priorities. A lack of vision and focused priorities is one of the reasons why businesses fail. Low team morale, absenteeism and resignations may be signs that the leader must clarify the vision and set priorities aligned with that vision.
I increasingly encounter business owners that are seeking help to refocus and to reignite their vision for success. With the guidance provided by our coaching firm, business owners are able to regain the leadership that is so vital to their business. Tune in to my next article as we discuss the importance of a corporate mission.
In business, as in life, many of us are continually searching for the secret of success. Indeed, we invest heavily in business publications: Books, DVD's, CD's, Newsletters plus attending training sessions, all claiming to improve this or make us better at that: 'How to Win Friends and Influence People'; (D.Carnegie), 'Instant Cashflow' (Brad Sugars), 'Think and Grow Rich'(N.Hill) et al.
With all this promise why do we typically forget what we've learned so soon? Why, within just a few weeks, do we typically stop using 95% of the techniques and tips provided? Are we suddenly not interested in the secret of success?
I would suggest it is an area seldom referred to in those publications, even though it is a very powerful concept and discipline: Accountability.
So how do we remain accountable and hence gain the benefits of those learnings?
A study at Harvard Business School revealed that of 1,000 graduates who became business owners surveyed, 98% of the wealth created resided with just 3% of the businesses. Yes just 30 leaders. Their secret (of success): they all had written goals.
So write key learnings down, where they offer the opportunity for material improvement, set them as goals to introduce into your life and business. Share them, indeed make them public.
Set personal rewards and penalties based on things you achieve or fail to achieve. Test Measure: use KPIs and hold yourself Accountable, even better work with others to hold each other Accountable. Plus make that smart investment …. get an Action Coach!
Have your coach explain the importance of Accountability within Above
Below the Line. Once you get this your coach can help you with self monitoring
tools such as: 5 WAYS, 10×10 Marketing and 13 Steps.
… and if you are struggling with the written word, try: Get off your a.. written by Brad Burton.
Having worked with over 300 businesses in recent times it has become clear that the spectacular results achieved by many clients is mainly due to their sense of Accountability.
Goal setting is as important in personal life as it is in business. The most common denominator in all the self-help literature and books is the importance of goal setting. We’re told to set long-term goals, short-term goals, lifetime goals and personal goals.
The benefits of Specific, Measurable, Achievable, Results orientated,
Time-framed (S.M.A.R.T) goals have been written about in self-help books
for years. So, it follows that goal setting is obviously a powerful process.
It is about ‘eating the elephant, one bite at a time’ and of turning vision into achievable, actionable things. It’s the common denominator of successful individuals and businesses.
Despite their obvious value, our experience with goals have shown that some are good at setting goals and sticking to them, achieving great results and others can’t keep a New Year’s resolution to stop smoking for two days in a row.
Failure to set goals can be seen as a fear of failure. That is, the blow to our integrity when we don’t reach our goals. When we make and keep commitments, such as setting and achieving goals, it reflects the amount of trust we have in ourselves. We increase our confidence in ourselves to make and keep commitments to others and ourselves. However, when we don’t achieve our goals we lose confidence in our ability to make and keep commitments and to trust ourselves.
There are many reasons why we don’t achieve our goals. Sometimes the goals we set are unrealistic. New Year’s resolutions are typical examples. Suddenly, we expect to change the way we eat, or the way we exercise just because the calendar changes. It’s like expecting a child that’s never ridden a bike to suddenly jump on and go, or to run a marathon without months of training. These goals are based on illusion with little regard to natural growth. You must be able to crawl before you walk.
So, how do we set and achieve goals? Stephen R. Covey says it best in his book “7 Habits of Highly Effective People”. “To begin with the end in mind means to start with a clear understanding of your destination. It means to know where you’re going so that you better understand where you are now and so that the steps you take are always in the right direction.”
An example of a S.M.A.R.T. goal might look something like the following:
My goal is to maintain a healthy body.
I can be fit to do the things I enjoy.
I can be an example to my children in health management.
I can build my personal character strength.
Good Nutrition. I will increase my intake of fresh fruits and vegetables and decrease my intake of sugar, fats, salt and red meat.
Physical. I will exercise aerobically 3 times a week for 30-minute periods.
Focus. I will be aware of my body and look out for any health problems.
Focusing on the smaller, short-term goals and achieving success will give you the confidence to set other goals. So, remember, set your goals based on the S.M.A.R.T. principle to have the best chance of achieving your goals.
Book in to one of our 90 Day Planning Sessions to set your goals for the next quarter.
Conference-call complaints are so widespread that a recent comedy video
showing how ridiculous conference-call behaviour such as secretly playing
solitaire would look “in real life” has drawn more than 6 million views.
Here are nine tips to help fix the problems: