Last month, I discussed the importance of making sure that the problem you are trying to solve is the correct problem. As we all painfully know, the media has been filled with stories about whether the government should spend billions of dollars to bail the big three automakers out of their financial problems. The problem for GM, Chrysler, and soon Ford, is that they are running out of money and may be forced into bankruptcy.
The problem for the U.S. economy and our government is that if we don’t spend billions to bailout the automakers, millions of autoworkers, not to mention car dealers and auto parts suppliers, will lose their jobs. That will cause more unemployment, less tax revenue to our troubled states, more foreclosures, and the list goes on and on.
THE REAL PROBLEM
This billion-dollar bailout solution our government has been considering does not solve the real problem! The real problem is that people are not buying cars. If people were buying cars, the automakers would have the money they need to continue to operate. Giving billions of dollars to the automakers will not dramatically increase car sales. They will still have to close plants and layoff millions of workers because their cars are not selling.
Why have car sales for the big three declined so dramatically? After all, other manufacturers (such as Toyota) have not asked for a bailout, they have been hiring and planning to open new plants.
For 2007 and the majority of 2008, the answer to poor sales was high fuel costs and a lack of fuel-efficient vehicles to choose from. As the credit crisis hit and the word recession entered the news, declining fuel costs were not enough to bring buyers back to the big three. And for people wanting a new car, getting a loan has now become a major new barrier for all automakers. Giving the big three money will not solve the credit crisis, it won’t make loans easier to get, it won’t give them economical, fuel-efficient cars to sell for quite some time, and it will not make people feel the economy has improved.
If the government did feel it was important to save the millions of jobs the auto industry represents, we should ask ourselves: What would it take to increase car sales?
One answer would be for the government to provide a $5,000 to $10,000 subsidy, depending on the price of the car, to anyone wanting to buy a new car. This would stimulate car sales, keep autoworkers at their jobs, stop plants from being closed, provide needed revenue to the manufacturers, increase confidence in lending money to the manufacturers, and keep the car dealers and parts suppliers employed. In addition, this would make car loans smaller and easier to obtain.
Another answer would be to require banks that are receiving Federal bail out money to use a portion of that money to make loans for qualified buyers. We have already found out that giving banks billions of dollars with no requirements will not ease the credit crisis.
These are just a few ideas. The key is to make sure we are solving the correct problem.
Wednesday, December 17, 2008
Thursday, December 04, 2008
THINKING BEFORE DOING
A few days ago, I met with the top executives of a Fortune 100 company. (These executives were very busy as you might imagine.) It was not easy for them to devote an entire day to step back and examine what I call “The New Big Picture” and the rapidly emerging risks and opportunities associated with seeing it.
I started out by asking them if they thought the big three auto executives and all of their direct reports had been very busy the past five years. They all laughed as they agreed. Being too busy to think strategically about future risk and opportunity is often at the center of our biggest problems.
NOT THINKING
It seems the big three auto executives weren’t thinking when they all flew separately to Washington in private jets. Driving to Washington in each of their company’s most fuel-efficient car might have sent more of a “we’re working on it” message.
Not having a detailed spending plan for the billions of dollars they were requesting was another example of not thinking. Having a detailed plan as to how they would spend the money would have at the very least provided confidence.
Not connecting the rapid increase in automobile ownership in both China and India to the resulting increase in the demand and price of fuel was another amazing mistake. The irony in this becomes clear when you consider all of them were actually selling cars in those markets and were excited about the unprecedented increase in demand for cars. More cars mean more fuel, who would have thought of that?
The point is that being busy and not thinking can get you into big trouble.
During my meeting, one of the executives posed the following question. “If our government was to give the automakers the money, what do you think they should do with it?”
I suggested that everyone was focused on the wrong problem. The reason for the bailout was to prevent massive layoffs. The reason people aren’t buying the big three’s cars isn’t because the big three is low on cash. It is because the majority of the cars they make are gas hogs and many of the people who want to buy a car can’t get loans because of the financial crisis. Giving the big three money won’t solve the financial crisis and it will take years to redesign and build fuel-efficient cars. In other words, they will still have to lay off masses of people. It would be better for the government to give anyone who wants to buy a car a subsidy reducing the price of the car by up to $10,000, less for lower end cars. This would keep cars selling and workers working.
I know you are all very busy doing a lot of things as we face a growing recession. Let’s make sure we take the time to think about the risks and the opportunities, the present and the future before we do too much.
I started out by asking them if they thought the big three auto executives and all of their direct reports had been very busy the past five years. They all laughed as they agreed. Being too busy to think strategically about future risk and opportunity is often at the center of our biggest problems.
NOT THINKING
It seems the big three auto executives weren’t thinking when they all flew separately to Washington in private jets. Driving to Washington in each of their company’s most fuel-efficient car might have sent more of a “we’re working on it” message.
Not having a detailed spending plan for the billions of dollars they were requesting was another example of not thinking. Having a detailed plan as to how they would spend the money would have at the very least provided confidence.
Not connecting the rapid increase in automobile ownership in both China and India to the resulting increase in the demand and price of fuel was another amazing mistake. The irony in this becomes clear when you consider all of them were actually selling cars in those markets and were excited about the unprecedented increase in demand for cars. More cars mean more fuel, who would have thought of that?
The point is that being busy and not thinking can get you into big trouble.
During my meeting, one of the executives posed the following question. “If our government was to give the automakers the money, what do you think they should do with it?”
I suggested that everyone was focused on the wrong problem. The reason for the bailout was to prevent massive layoffs. The reason people aren’t buying the big three’s cars isn’t because the big three is low on cash. It is because the majority of the cars they make are gas hogs and many of the people who want to buy a car can’t get loans because of the financial crisis. Giving the big three money won’t solve the financial crisis and it will take years to redesign and build fuel-efficient cars. In other words, they will still have to lay off masses of people. It would be better for the government to give anyone who wants to buy a car a subsidy reducing the price of the car by up to $10,000, less for lower end cars. This would keep cars selling and workers working.
I know you are all very busy doing a lot of things as we face a growing recession. Let’s make sure we take the time to think about the risks and the opportunities, the present and the future before we do too much.
Thursday, November 13, 2008
REAL-TIME ORGANIZATION (PART II)
Last month, I touched on how to increase your company’s profits by becoming a Real-Time Organization by being pre-active, having up-to-date information on demand, and conducting event based marketing.
This month, I would like to share the strategies you can use to create a real-time enterprise today.
KNOW YOUR GOALS
The basic concept of real-time is that when something happens, you want to react to it the moment it happens, not an hour, day, week, or month later. As the speed at which a company can intelligently and automatically respond to change increases, the cost of all their business processes decreases. Hearing this, you might think real-time is all about speed, but that’s only part of the equation. If you don’t know where you want to go, then faster won’t help!
In order to gain the largest ROI for real-time initiatives, they need to be tied to your company’s overall goals and objectives. Therefore, what do you hope to achieve? Are you trying to increase sales? Improve customer service? Enhance your brand? Enter new markets? Whatever it is you want for your business, state it clearly so you can make sure your real-time activities support your overall goals.
BE AGILE
Just as there is a difference between strategy and tactics, there is a difference between real-time computing and real-time business. Real-time processing can be seen as event-driven computing. Real-time business, on the other hand, takes business agility—the ability to rapidly respond to changing conditions as they happen—to the next level. Operating in real time puts up-to-the-minute information directly into the hands of all the key participants in the business process who need it. Additionally, pre-programmed scenarios automatically trigger supply chain actions based on events as they happen.
A real-time enterprise is defined by its ability to access information across all boundaries of the organization. By integrating people, strategy, technology, and processes, real-time organizations are able to recognize shifts in customer demand as they happen and respond accordingly with customer-focused solutions. This enables them to use their higher level of business agility as a competitive weapon, grabbing market share from less agile competitors.
START SMALL
Realize that being a real-time organization is an evolutionary process. An ancient Chinese proverb states that a journey of a thousand miles begins with a single step. Therefore, select a place to start and build out from there. For example, Amberwood Homes, a residential homebuilder, has cut three weeks from the five months it takes to build an average 3,000 square foot home by sharing information with plumbers, roofers, masons, and other subcontractors via hand-held devices in real-time. That does not mean that all of Amberwood’s business processes and partners are operating in real time; it means they picked a profitable place to start and will build off that success.
THE REAL-TIME ADVANTAGE
There is a clear competitive advantage to having high value, market-based information available almost instantly to the right people, both inside and outside of your company, and using that information to make quicker, more informed decisions. For example, telecommunication companies are facing increasing customer churn—customers switching from one company to another. A real-time initiative has helped Bell South Corp. reduce churn by 30%. The company accomplished this by delivering real-time recommendations to its call center reps who field calls from their small business customers. Thanks to a database covering 100 data variables on its 1.2 million customers, when a customer calls the reps have instant access to that customer’s data profile, allowing them to offer a service, discount, or incentive based on the customer’s propensity to switch to another phone company.
In short, real-time business is about leveraging all of your relationships through optimized business processes that can take advantage of nearly instantaneous communications across all the components of a true collaborative network. Delivering up-to-the-minute data with proper context makes all the difference between information and actionable knowledge.
This month, I would like to share the strategies you can use to create a real-time enterprise today.
KNOW YOUR GOALS
The basic concept of real-time is that when something happens, you want to react to it the moment it happens, not an hour, day, week, or month later. As the speed at which a company can intelligently and automatically respond to change increases, the cost of all their business processes decreases. Hearing this, you might think real-time is all about speed, but that’s only part of the equation. If you don’t know where you want to go, then faster won’t help!
In order to gain the largest ROI for real-time initiatives, they need to be tied to your company’s overall goals and objectives. Therefore, what do you hope to achieve? Are you trying to increase sales? Improve customer service? Enhance your brand? Enter new markets? Whatever it is you want for your business, state it clearly so you can make sure your real-time activities support your overall goals.
BE AGILE
Just as there is a difference between strategy and tactics, there is a difference between real-time computing and real-time business. Real-time processing can be seen as event-driven computing. Real-time business, on the other hand, takes business agility—the ability to rapidly respond to changing conditions as they happen—to the next level. Operating in real time puts up-to-the-minute information directly into the hands of all the key participants in the business process who need it. Additionally, pre-programmed scenarios automatically trigger supply chain actions based on events as they happen.
A real-time enterprise is defined by its ability to access information across all boundaries of the organization. By integrating people, strategy, technology, and processes, real-time organizations are able to recognize shifts in customer demand as they happen and respond accordingly with customer-focused solutions. This enables them to use their higher level of business agility as a competitive weapon, grabbing market share from less agile competitors.
START SMALL
Realize that being a real-time organization is an evolutionary process. An ancient Chinese proverb states that a journey of a thousand miles begins with a single step. Therefore, select a place to start and build out from there. For example, Amberwood Homes, a residential homebuilder, has cut three weeks from the five months it takes to build an average 3,000 square foot home by sharing information with plumbers, roofers, masons, and other subcontractors via hand-held devices in real-time. That does not mean that all of Amberwood’s business processes and partners are operating in real time; it means they picked a profitable place to start and will build off that success.
THE REAL-TIME ADVANTAGE
There is a clear competitive advantage to having high value, market-based information available almost instantly to the right people, both inside and outside of your company, and using that information to make quicker, more informed decisions. For example, telecommunication companies are facing increasing customer churn—customers switching from one company to another. A real-time initiative has helped Bell South Corp. reduce churn by 30%. The company accomplished this by delivering real-time recommendations to its call center reps who field calls from their small business customers. Thanks to a database covering 100 data variables on its 1.2 million customers, when a customer calls the reps have instant access to that customer’s data profile, allowing them to offer a service, discount, or incentive based on the customer’s propensity to switch to another phone company.
In short, real-time business is about leveraging all of your relationships through optimized business processes that can take advantage of nearly instantaneous communications across all the components of a true collaborative network. Delivering up-to-the-minute data with proper context makes all the difference between information and actionable knowledge.
Tuesday, October 07, 2008
REAL-TIME ORGANIZATION
Thanks to modern technology, today’s computers and networks are ready for real-time data communications, and the advantages are nothing short of revolutionary. Some industries, including telecommunications, finance, and manufacturing, are already using real-time data in parts of their operations.
But having real-time data is not enough. To successfully compete and increase your company’s bottom line, you need to become a real-time organization. In other words, you need to use your real-time data to change how you work, how you manage, and how you sell.
Imagine for a moment how much more productive and profitable your company could be if you could track products from warehouse to store shelves in real-time, provide targeted offers the moment a customer calls, and give executives up-to-the-minute reports on critical operations data? When you integrate existing technologies to become a real-time organization, you can do precisely that and so much more.
The fact is that organizations operating in real-time can deliver better customer service, turn around inventory faster, respond quicker to changes in the marketplace, and better anticipate challenges before they impact the business. Consider the following benefits of becoming a real-time organization.
YOU CAN BE PREACTVE
You’ve likely used the word “proactive,” which means taking positive action now. But how do you know the actions you’re taking will be positive when you have to wait and see? Those aren’t good odds. A better idea is to be pre-active to future known events.
For example, if your real-time data indicates that there was a run on blue jeans, size 32 waist and 34 inseam, in store number 53 and that there is only one pair left, you can safely predict that tomorrow there will be one or more customers who will not find what they want. You can solve this problem before it occurs. When you use your real-time data to be a real-time organization, everyone involved with keeping the shelves stocked will automatically be informed of the stock levels and the supply chain wheels will turn to make sure no customer is unable to find what he or she wants.
YOU CAN HAVE UP-TO-DATE INFORMATION ON DEMAND
While many companies offer information on demand, most of the information is not up-to-the-minute. Becoming a real-time organization changes all that. Here is a simple yet powerful example of how real-time data can change even the most routine of chores.
Remember when you were in college and needed to use the school Laundromat to wash your clothes? All too often, everyone else had the same idea you did and all the washers and dryers were taken. Today, many universities use real-time data to change the Laundromat problem. Now students can use their computers from their dorm rooms to see which washers and dryers are in use and which are out of service. They don’t have to worry about how much exact change they have or if the coin machine is broken because they don’t need coins anymore. They use smart cards that deduct money from their accounts whenever they use the machines. The smart Laundromat system can even e-mail or send a text message to a cell phone to let the users know that the machines are finished. Ask yourself, “Is my business as advanced as a college Laundromat?”
YOU CAN CONDUCT EVENT BASED MARKETING
The best time to market to people is when they demonstrate a need. As such, good salespeople do event-based marketing all the time. If you show an interest in something, they grab the opportunity to show you something else they feel you might also be interested in.
With real-time data you can do event-based marketing without human intervention. For example, consider how Amazon.com makes additional sales. If you click on a book about the Lewis and Clark expedition, you will get a list of other top selling Lewis and Clark books on the same page. Does such an approach work? It’s one of the reasons that Amazon’s stock has been one of best performing Nasdaq stocks for many years.
The real-time trend is very real and its impact will be felt by every industry, whether they choose to buy into the concept or not. In today’s hypercompetitive marketplace, there is a great advantage to extending your business processes via the Internet to your customers, partners, suppliers, and employees in real time. Next month, I will share additional strategies to take advantage of this trend so businesses can emerge as the market leaders and watch their profits and productivity dramatically increase.
But having real-time data is not enough. To successfully compete and increase your company’s bottom line, you need to become a real-time organization. In other words, you need to use your real-time data to change how you work, how you manage, and how you sell.
Imagine for a moment how much more productive and profitable your company could be if you could track products from warehouse to store shelves in real-time, provide targeted offers the moment a customer calls, and give executives up-to-the-minute reports on critical operations data? When you integrate existing technologies to become a real-time organization, you can do precisely that and so much more.
The fact is that organizations operating in real-time can deliver better customer service, turn around inventory faster, respond quicker to changes in the marketplace, and better anticipate challenges before they impact the business. Consider the following benefits of becoming a real-time organization.
YOU CAN BE PREACTVE
You’ve likely used the word “proactive,” which means taking positive action now. But how do you know the actions you’re taking will be positive when you have to wait and see? Those aren’t good odds. A better idea is to be pre-active to future known events.
For example, if your real-time data indicates that there was a run on blue jeans, size 32 waist and 34 inseam, in store number 53 and that there is only one pair left, you can safely predict that tomorrow there will be one or more customers who will not find what they want. You can solve this problem before it occurs. When you use your real-time data to be a real-time organization, everyone involved with keeping the shelves stocked will automatically be informed of the stock levels and the supply chain wheels will turn to make sure no customer is unable to find what he or she wants.
YOU CAN HAVE UP-TO-DATE INFORMATION ON DEMAND
While many companies offer information on demand, most of the information is not up-to-the-minute. Becoming a real-time organization changes all that. Here is a simple yet powerful example of how real-time data can change even the most routine of chores.
Remember when you were in college and needed to use the school Laundromat to wash your clothes? All too often, everyone else had the same idea you did and all the washers and dryers were taken. Today, many universities use real-time data to change the Laundromat problem. Now students can use their computers from their dorm rooms to see which washers and dryers are in use and which are out of service. They don’t have to worry about how much exact change they have or if the coin machine is broken because they don’t need coins anymore. They use smart cards that deduct money from their accounts whenever they use the machines. The smart Laundromat system can even e-mail or send a text message to a cell phone to let the users know that the machines are finished. Ask yourself, “Is my business as advanced as a college Laundromat?”
YOU CAN CONDUCT EVENT BASED MARKETING
The best time to market to people is when they demonstrate a need. As such, good salespeople do event-based marketing all the time. If you show an interest in something, they grab the opportunity to show you something else they feel you might also be interested in.
With real-time data you can do event-based marketing without human intervention. For example, consider how Amazon.com makes additional sales. If you click on a book about the Lewis and Clark expedition, you will get a list of other top selling Lewis and Clark books on the same page. Does such an approach work? It’s one of the reasons that Amazon’s stock has been one of best performing Nasdaq stocks for many years.
The real-time trend is very real and its impact will be felt by every industry, whether they choose to buy into the concept or not. In today’s hypercompetitive marketplace, there is a great advantage to extending your business processes via the Internet to your customers, partners, suppliers, and employees in real time. Next month, I will share additional strategies to take advantage of this trend so businesses can emerge as the market leaders and watch their profits and productivity dramatically increase.
Friday, August 22, 2008
VIDEO CAN STRENGTHEN RELATIONSHIPS
A major challenge today is that many companies are going into crisis mode. Because air travel and gas costs are high, they’re using video and Web conferencing, as well as the new high-end videoconferencing called telepresence offered by Cisco and HP, to save travel money and meeting costs. However, if their only motivation is to save money on travel, rather than the more important goal of enhancing communication and collaboration throughout the enterprise, then they’re simply creating another fad. Video conferencing has evolved tremendously over the past few years, and companies need to use the technology of today to pave the path to future profits, all of which hinge on relationships.
To add fuel to the fire is the fact that rising gas prices and travel costs are not cyclical this time; they’re permanent. Major social changes are taking place worldwide in such places as China and India, and the increased global energy consumption affects everyone. In other words, fuel costs will fluctuate but will not go back to the low levels we once enjoyed.
Therefore, smart companies are changing how they think about meetings and the new video conferencing technology, and they’re realizing that it offers business something more powerful than they’ve had in the past. These companies are thinking in terms of “visual communications” rather than simply video and Web conferencing.
Visual communications heighten the bond you have with someone when you cannot see them face-to-face. It’s about adding dimension to the communication. There’s a reason why you shake someone’s hand when you meet them: The more senses you involve, the higher the connection. Those companies that can enhance their communication, both internally and externally, are the ones who can cause change faster and stay competitive longer.
Despite the current conditions of gas prices, transportation costs, and airline cuts, the need to meet, share knowledge, and develop relationships will not only continue, it will accelerate. Therefore, successful interactions will depend on your ability to master the concept of visual communications and develop guidelines that leverage both old and new tools to build trusting relationships that foster greater communication, collaboration, and community.
To add fuel to the fire is the fact that rising gas prices and travel costs are not cyclical this time; they’re permanent. Major social changes are taking place worldwide in such places as China and India, and the increased global energy consumption affects everyone. In other words, fuel costs will fluctuate but will not go back to the low levels we once enjoyed.
Therefore, smart companies are changing how they think about meetings and the new video conferencing technology, and they’re realizing that it offers business something more powerful than they’ve had in the past. These companies are thinking in terms of “visual communications” rather than simply video and Web conferencing.
Visual communications heighten the bond you have with someone when you cannot see them face-to-face. It’s about adding dimension to the communication. There’s a reason why you shake someone’s hand when you meet them: The more senses you involve, the higher the connection. Those companies that can enhance their communication, both internally and externally, are the ones who can cause change faster and stay competitive longer.
Despite the current conditions of gas prices, transportation costs, and airline cuts, the need to meet, share knowledge, and develop relationships will not only continue, it will accelerate. Therefore, successful interactions will depend on your ability to master the concept of visual communications and develop guidelines that leverage both old and new tools to build trusting relationships that foster greater communication, collaboration, and community.
Monday, May 12, 2008
7 FAILURES OF BUSINESS GROWTH (PART III)
Over the last two months I have covered five of the seven failures of business growth: #1 Failure to anticipate, #2 Failure to communicate, #3 Failure to collaborate, #4 Failure to innovate, and #5 Failure to pre-solve problems.
In this issue, I’ll share the final two failures of business growth and the strategies needed to grow your business for years to come.
#6 FAILURE TO DE-COMMODITIZE
Any product or service can be de-commoditized. Unfortunately, many companies don’t take the initiative to make their product unique. They come up with something new, and make that their main product. But other people copy the product. Margins get thin. Sales slow down. And they end up competing on price. The key is to take your product and put a service wrapper around it. Here’s an example: In the electricity industry, the utility provider cannot increase prices without permission from ratepayers. To de-commoditize themselves, one electric company created what they called “digital electricity.” They told their customers, “If your company runs a lot of expensive computerized equipment and you don’t want the electricity coming into your office to ever turn off or fluctuate in current or voltage, then you need digital electricity, which will cost more.” Many big companies signed up for the more expensive service, and in the near future, homeowners will have a similar interest because they will have multiple computers streaming audio and video in their home. This electric utility took a product and wrapped a service around it so they could charge more. Look at your product or service and think of ways that you can wrap a service around it to add value. But don’t stop there. Keep adding value to it every year so you never become a commodity again.
#7 FAILURE TO DIFFERENTIATE
Over time, too many companies become just like everyone else. They don’t continue to stand out. Even though they do strategic planning, it’s usually just financial planning in disguise. True strategic planning needs to be more than numbers-based; it needs to focus on how you can differentiate your company and products from your competition instead of being and doing more of the same. So how do you differentiate? Simple…you stop doing all the failures of business growth just discussed. You start anticipating, communicating, collaborating, innovating, pre-solving problems, and de-commoditizing. Realize that you can infinitely differentiate your company if you have the courage to do the things your competition isn’t doing.
BUSINSESS SUCCESS IS ON YOUR HORIZON
A weak economy doesn’t have to limit business growth. When you know the failures to avoid and the strategies to combat them, you’ll be well on your way to creating an organization that continues to grow despite outside conditions. So learn from these failures and rethink the way you do business. It’ll pay off for years to come.
In this issue, I’ll share the final two failures of business growth and the strategies needed to grow your business for years to come.
#6 FAILURE TO DE-COMMODITIZE
Any product or service can be de-commoditized. Unfortunately, many companies don’t take the initiative to make their product unique. They come up with something new, and make that their main product. But other people copy the product. Margins get thin. Sales slow down. And they end up competing on price. The key is to take your product and put a service wrapper around it. Here’s an example: In the electricity industry, the utility provider cannot increase prices without permission from ratepayers. To de-commoditize themselves, one electric company created what they called “digital electricity.” They told their customers, “If your company runs a lot of expensive computerized equipment and you don’t want the electricity coming into your office to ever turn off or fluctuate in current or voltage, then you need digital electricity, which will cost more.” Many big companies signed up for the more expensive service, and in the near future, homeowners will have a similar interest because they will have multiple computers streaming audio and video in their home. This electric utility took a product and wrapped a service around it so they could charge more. Look at your product or service and think of ways that you can wrap a service around it to add value. But don’t stop there. Keep adding value to it every year so you never become a commodity again.
#7 FAILURE TO DIFFERENTIATE
Over time, too many companies become just like everyone else. They don’t continue to stand out. Even though they do strategic planning, it’s usually just financial planning in disguise. True strategic planning needs to be more than numbers-based; it needs to focus on how you can differentiate your company and products from your competition instead of being and doing more of the same. So how do you differentiate? Simple…you stop doing all the failures of business growth just discussed. You start anticipating, communicating, collaborating, innovating, pre-solving problems, and de-commoditizing. Realize that you can infinitely differentiate your company if you have the courage to do the things your competition isn’t doing.
BUSINSESS SUCCESS IS ON YOUR HORIZON
A weak economy doesn’t have to limit business growth. When you know the failures to avoid and the strategies to combat them, you’ll be well on your way to creating an organization that continues to grow despite outside conditions. So learn from these failures and rethink the way you do business. It’ll pay off for years to come.
Tuesday, April 15, 2008
7 FAILURES OF BUSINESS GROWTH (PART II)
Last month I covered two of the seven failures of business growth: #1 Failure to anticipate, and #2 Failure to communicate.
This month I would like to share some additional insights on the failures of business growth. When you know the failures to avoid and the strategies to combat them, you’ll be well on your way to creating an organization that continues to grow despite outside conditions.
#3 FAILURE TO COLLABORATE
The majority of people tend to cooperate, which is very different from collaborating. Even though we often use the word “collaborate,” we’re really just cooperating, which is a lower level function. Cooperating means, “The pie is only so big, and to make sure we both get our fair share, I won’t get in your way if you won’t get in mine. Maybe we’ll even work together...if we have to.” Such an approach produces results but certainly not outstanding results, because it’s based on a scarcity mentality. Collaboration, on the other hand, is based on abundance. It occurs when we put our heads together and ask ourselves, “How can we create a bigger pie for everyone?” That’s the secret to getting competitors to work with you and not against you. Remember that today’s technologies allow us to collaborate in new and amazing ways. Make sure you’re using them properly.
#4 FAILURE TO INNOVATE
When asked what their last big innovation was, most companies have to go back five or ten years to cite something meaningful. Why? Because the majority of companies innovate once, come up with a great product or service, form a company around it, and then they let it ride. They don’t continue to innovate and create new products and services. Instead they spend a great deal of effort asking themselves how they can be more efficient…how they can do more with less…how they can reduce staff and overhead…how they can use technology better. Those are all good questions. However, you also want to ask yourself how you can use technology and your people to create new products and services that will increase the sales of your old products and services. The more time you devote to innovation, the more profitable and efficient you’ll ultimately be.
#5 FAILURE TO PRE-SOLVE PROBLEMS
Some people say that a problem is an opportunity in disguise. Nonsense! A problem is a problem. A problem is only an opportunity before you have it. Realize that most of the problems our customers and our company experience are predictable. In today’s world of rapid change, if you ask customers what they want and then give it to them, you’re missing the real opportunity. Why? Because your competitors are asking the same question, getting the same answer, and providing the same solution. Instead, you need to think a level higher and ask yourself and your customers, “What problems are we about to have?” Then you can develop new solutions based on the answers you receive. At that point, you can base your product development on your customer’s future problems and deliver the product or service right when the problem becomes a reality.
A WEAK ECONOMY DOES NOT HAVE TO LIMIT BUSINESS GROWTH
By implementing the strategies needed to overcome these business failures you can grow your business for years to come. Next month I will share the final two failures to avoid and the strategies to combat them.
This month I would like to share some additional insights on the failures of business growth. When you know the failures to avoid and the strategies to combat them, you’ll be well on your way to creating an organization that continues to grow despite outside conditions.
#3 FAILURE TO COLLABORATE
The majority of people tend to cooperate, which is very different from collaborating. Even though we often use the word “collaborate,” we’re really just cooperating, which is a lower level function. Cooperating means, “The pie is only so big, and to make sure we both get our fair share, I won’t get in your way if you won’t get in mine. Maybe we’ll even work together...if we have to.” Such an approach produces results but certainly not outstanding results, because it’s based on a scarcity mentality. Collaboration, on the other hand, is based on abundance. It occurs when we put our heads together and ask ourselves, “How can we create a bigger pie for everyone?” That’s the secret to getting competitors to work with you and not against you. Remember that today’s technologies allow us to collaborate in new and amazing ways. Make sure you’re using them properly.
#4 FAILURE TO INNOVATE
When asked what their last big innovation was, most companies have to go back five or ten years to cite something meaningful. Why? Because the majority of companies innovate once, come up with a great product or service, form a company around it, and then they let it ride. They don’t continue to innovate and create new products and services. Instead they spend a great deal of effort asking themselves how they can be more efficient…how they can do more with less…how they can reduce staff and overhead…how they can use technology better. Those are all good questions. However, you also want to ask yourself how you can use technology and your people to create new products and services that will increase the sales of your old products and services. The more time you devote to innovation, the more profitable and efficient you’ll ultimately be.
#5 FAILURE TO PRE-SOLVE PROBLEMS
Some people say that a problem is an opportunity in disguise. Nonsense! A problem is a problem. A problem is only an opportunity before you have it. Realize that most of the problems our customers and our company experience are predictable. In today’s world of rapid change, if you ask customers what they want and then give it to them, you’re missing the real opportunity. Why? Because your competitors are asking the same question, getting the same answer, and providing the same solution. Instead, you need to think a level higher and ask yourself and your customers, “What problems are we about to have?” Then you can develop new solutions based on the answers you receive. At that point, you can base your product development on your customer’s future problems and deliver the product or service right when the problem becomes a reality.
A WEAK ECONOMY DOES NOT HAVE TO LIMIT BUSINESS GROWTH
By implementing the strategies needed to overcome these business failures you can grow your business for years to come. Next month I will share the final two failures to avoid and the strategies to combat them.
Wednesday, March 26, 2008
7 FAILURES OF BUSINESS GROWTH (PART I)
If you want to truly stand out in today’s marketplace and lead your company to new heights of success, you have to work smarter and not harder. For many leaders and managers, that’s easier said than done. Despite their best intentions, they get snarled in the glaring failures that derail business growth and stagnate profits.
In order for you to avoid the most common traps that stifle business growth, you have to be aware of the top failures and know the strategies to combat them. The following will help you turn failure into success and enable your company to exceed growth projections.
#1 FAILURE TO ANTICIPATE
Most companies react to the changes that are taking place right now. They react to customers, react to the economy, and react to government legislation. Instead of merely reacting, you need to anticipate future changes and plan for them. The fact is that you can anticipate a great deal in your industry. For example, are cell phones of the future going to have a high definition screen with high definition video? Most people think so. In the future, will we have better bandwidth for both wireless and wired Internet connections? You’d be hard-pressed to find someone who says “no.” In the future, will we have more storage in our computers? Of course! Apparently you’re certain about quite a few future events. Therefore, instead of being a crisis manager and reacting to change, anticipate changes so you can drive growth from the inside out. To do that you have to spend one hour a week not thinking about the crisis of the moment, but rather thinking about the predictable opportunities that are waiting for you. Make a list of all the things you’re completely certain about. Then look at your strategies and base them around that list. Only then will you become more of an opportunity management organization.
2. FAILURE TO COMMUNICATE
There is a big difference between informing and communicating. Informing is one-way, static and seldom leads to action. Communicating is two-way, dynamic and usually leads to action. Ironically, we have all these fantastic communication age tools, but we’re using them in an information age way. Realize that the information age is not our friend; it’s our enemy in disguise. Ask yourself, ‘In our organization, are we better at informing than communicating?” For most people, the answer is “yes”. And if you can’t communicate internally with your staff, how can you communicate externally to customers and shareholders? This is not to say that you should stop informing people. However, you do need to tap into the true power of communication. When you focus on maximizing two-way communications, you can create a communication-age organization and accelerate positive change.
JUMP-START YOUR COMPANY’S SUCCESS
As the word “recession” appears more frequently on the news, avoiding costly strategic mistakes is becoming more crucial to long term growth. Next month, I will share additional failures to avoid and the strategies to combat them that will pay off for years to come.
In order for you to avoid the most common traps that stifle business growth, you have to be aware of the top failures and know the strategies to combat them. The following will help you turn failure into success and enable your company to exceed growth projections.
#1 FAILURE TO ANTICIPATE
Most companies react to the changes that are taking place right now. They react to customers, react to the economy, and react to government legislation. Instead of merely reacting, you need to anticipate future changes and plan for them. The fact is that you can anticipate a great deal in your industry. For example, are cell phones of the future going to have a high definition screen with high definition video? Most people think so. In the future, will we have better bandwidth for both wireless and wired Internet connections? You’d be hard-pressed to find someone who says “no.” In the future, will we have more storage in our computers? Of course! Apparently you’re certain about quite a few future events. Therefore, instead of being a crisis manager and reacting to change, anticipate changes so you can drive growth from the inside out. To do that you have to spend one hour a week not thinking about the crisis of the moment, but rather thinking about the predictable opportunities that are waiting for you. Make a list of all the things you’re completely certain about. Then look at your strategies and base them around that list. Only then will you become more of an opportunity management organization.
2. FAILURE TO COMMUNICATE
There is a big difference between informing and communicating. Informing is one-way, static and seldom leads to action. Communicating is two-way, dynamic and usually leads to action. Ironically, we have all these fantastic communication age tools, but we’re using them in an information age way. Realize that the information age is not our friend; it’s our enemy in disguise. Ask yourself, ‘In our organization, are we better at informing than communicating?” For most people, the answer is “yes”. And if you can’t communicate internally with your staff, how can you communicate externally to customers and shareholders? This is not to say that you should stop informing people. However, you do need to tap into the true power of communication. When you focus on maximizing two-way communications, you can create a communication-age organization and accelerate positive change.
JUMP-START YOUR COMPANY’S SUCCESS
As the word “recession” appears more frequently on the news, avoiding costly strategic mistakes is becoming more crucial to long term growth. Next month, I will share additional failures to avoid and the strategies to combat them that will pay off for years to come.
Monday, February 11, 2008
TRENDS FOR EVERY SALESPERSON (PART III)
Over the last two months I have shared several trends for every salesperson to know: #1 Your past success will increasingly hold you back, #2 Technology-driven change will dramatically accelerate (Rapid change is your best friend), #3 Time is increasing in value, and #4 We are shifting from the information age to the communication age.
This month I would like to share the final two trends I have identified for successful salespeople to keep abreast of changes in their industry.
#5 SOLUTIONS TO PRESENT PROBLEMS ARE BECOMING OBSOLETE FASTER
Almost every salesperson has been told to be proactive, which means to be taking positive action. How do you know if a certain action is positive? You wait and see. That sounds like a crapshoot with bad odds. Therefore, you need to be pre-active to future known events. To determine pre-known events, you need to look at your customer segment and identify what types of events you are certain they will be experiencing soon. You then focus your actions on what will be happening rather than on what is happening. Being pre-active also means that you change the way people think. For example, if you put out a new product or service and hope it catches on, you’ll quickly learn that it can take a long time because you’re not actively changing the way people think about how the product can be used or how it might change their lives. Therefore, constantly educate your customers on the value you and your products and/or services offer so they begin to rethink the results they can achieve and the value you provide.
#6 THE VALUE YOU BRING TODAY IS BEING FORGOTTEN FASTER
Sell the future benefit of what you do. Most salespeople sell the current benefits of what they do. But your customers already know the current benefit you offer. One of the reasons customers leave you for a competitor is that you haven’t cemented the future benefit you can bring them. Your goal as a salesperson should be to establish a long-term, problem-solving relationship with customers rather than a short-term transaction. Your most profitable customer is a repeat customer. Therefore, you want customers to see the benefit you can give them over time, not just in the present. You want to show how the products and services you offer are going to be evolving with their needs. In other words, you want to sell the evolution of your products or services. Unfortunately, most salespeople don’t know their future benefit. Therefore, you need to sit down with your fellow salespeople and create a list of future benefits that you have for your customers. Also, talk to the people developing the products and services and get an idea of where they’re taking them. Realize that you’re more likely to deliver future benefits if you think of them ahead of time. As a side benefit, this kind of dialog will also help internal communications within the company.
SALES SUCCESS FOR THE FUTURE
The more you understand and adapt to today’s current business trends, the better your sales will be—today and in the future.
This month I would like to share the final two trends I have identified for successful salespeople to keep abreast of changes in their industry.
#5 SOLUTIONS TO PRESENT PROBLEMS ARE BECOMING OBSOLETE FASTER
Almost every salesperson has been told to be proactive, which means to be taking positive action. How do you know if a certain action is positive? You wait and see. That sounds like a crapshoot with bad odds. Therefore, you need to be pre-active to future known events. To determine pre-known events, you need to look at your customer segment and identify what types of events you are certain they will be experiencing soon. You then focus your actions on what will be happening rather than on what is happening. Being pre-active also means that you change the way people think. For example, if you put out a new product or service and hope it catches on, you’ll quickly learn that it can take a long time because you’re not actively changing the way people think about how the product can be used or how it might change their lives. Therefore, constantly educate your customers on the value you and your products and/or services offer so they begin to rethink the results they can achieve and the value you provide.
#6 THE VALUE YOU BRING TODAY IS BEING FORGOTTEN FASTER
Sell the future benefit of what you do. Most salespeople sell the current benefits of what they do. But your customers already know the current benefit you offer. One of the reasons customers leave you for a competitor is that you haven’t cemented the future benefit you can bring them. Your goal as a salesperson should be to establish a long-term, problem-solving relationship with customers rather than a short-term transaction. Your most profitable customer is a repeat customer. Therefore, you want customers to see the benefit you can give them over time, not just in the present. You want to show how the products and services you offer are going to be evolving with their needs. In other words, you want to sell the evolution of your products or services. Unfortunately, most salespeople don’t know their future benefit. Therefore, you need to sit down with your fellow salespeople and create a list of future benefits that you have for your customers. Also, talk to the people developing the products and services and get an idea of where they’re taking them. Realize that you’re more likely to deliver future benefits if you think of them ahead of time. As a side benefit, this kind of dialog will also help internal communications within the company.
SALES SUCCESS FOR THE FUTURE
The more you understand and adapt to today’s current business trends, the better your sales will be—today and in the future.
Friday, January 18, 2008
TRENDS FOR EVERY SALESPERSON (PART II)
Last month I covered two trends for every sales- person to know: #1 Your past success will increasingly hold you back, and #2 Technology-driven change will dramatically accelerate. (Rapid change is your best friend.)
This month I would like to share some additional trends for successful salespeople to keep them abreast of changes in their industry. The more you understand and adapt, the better your sales will be – today and in the future.
#3 TIME IS INCREASING IN VALUE
Increasingly time is becoming more and more important to people. Why? We have an aging demographic in the United States, with 78 million Baby Boomers. And time gets more valuable as you get older because you have less of it. Additionally, the world has become more complex with much more for people to do with their time. Today we have iPods, cell phones, the Internet and a host of other technologies that didn’t exist when the Baby Boomers were babies. There’s so much more going on and we’re connected in so many more ways that everyone is increasingly strapped for time. With that in mind, the last thing you want to do in sales is seem like you’re taking someone’s time.
Instead, you want to be giving them time. You want your customers to feel that talking to you is actually saving them time. Think about all the time wasters your customers might experience: long wait times for service, long hold times on the phone, long delivery times for products…the list is virtually endless. Such time wasters hurt your sales and profits. Therefore, make sure you have the processes in place that will keep customers from wasting time. When you can prove that you’re a time saver, people will choose you over the competition every time.
#4 WE ARE SHIFTING FROM THE INFORMATION AGE TO THE COMMUNICATION AGE
Many salespeople rely on such marketing tools as a company web site, flyers, and sales letters. But all these things are static, meaning they are merely informing people. You hope your sales messages will entice the prospect to call, but it’s still a one-way interface. A better way is to have your sales messages create action. One way to do that is to engage prospects with your sales and marketing efforts. For example, you could have a contest that encourages people to go to your site and enter. So instead of just saying that you want people to buy your snack product, for instance, you can tell customers that they can go online and create or vote for the next new flavor. Now you get them involved in your product. The key is to generate communication, engagement, and involvement through your sales and marketing efforts. If you call someone and just talk to them and aren’t creating dynamic dialog, then you’re really just giving them information. You want to give people consultative advice. You want to listen and speak and create dialog. Only then do you truly capture your prospects’ interest and convert them into paying clients.
TO BE CONTINUED…MORE SALES IN YOUR FUTURE
Next month I will cover the final two sales trends taking place – all of which affect salespeople in every industry. Understanding all six of these trends and how to maximize them will help you reap the rewards of a successful sales career.
This month I would like to share some additional trends for successful salespeople to keep them abreast of changes in their industry. The more you understand and adapt, the better your sales will be – today and in the future.
#3 TIME IS INCREASING IN VALUE
Increasingly time is becoming more and more important to people. Why? We have an aging demographic in the United States, with 78 million Baby Boomers. And time gets more valuable as you get older because you have less of it. Additionally, the world has become more complex with much more for people to do with their time. Today we have iPods, cell phones, the Internet and a host of other technologies that didn’t exist when the Baby Boomers were babies. There’s so much more going on and we’re connected in so many more ways that everyone is increasingly strapped for time. With that in mind, the last thing you want to do in sales is seem like you’re taking someone’s time.
Instead, you want to be giving them time. You want your customers to feel that talking to you is actually saving them time. Think about all the time wasters your customers might experience: long wait times for service, long hold times on the phone, long delivery times for products…the list is virtually endless. Such time wasters hurt your sales and profits. Therefore, make sure you have the processes in place that will keep customers from wasting time. When you can prove that you’re a time saver, people will choose you over the competition every time.
#4 WE ARE SHIFTING FROM THE INFORMATION AGE TO THE COMMUNICATION AGE
Many salespeople rely on such marketing tools as a company web site, flyers, and sales letters. But all these things are static, meaning they are merely informing people. You hope your sales messages will entice the prospect to call, but it’s still a one-way interface. A better way is to have your sales messages create action. One way to do that is to engage prospects with your sales and marketing efforts. For example, you could have a contest that encourages people to go to your site and enter. So instead of just saying that you want people to buy your snack product, for instance, you can tell customers that they can go online and create or vote for the next new flavor. Now you get them involved in your product. The key is to generate communication, engagement, and involvement through your sales and marketing efforts. If you call someone and just talk to them and aren’t creating dynamic dialog, then you’re really just giving them information. You want to give people consultative advice. You want to listen and speak and create dialog. Only then do you truly capture your prospects’ interest and convert them into paying clients.
TO BE CONTINUED…MORE SALES IN YOUR FUTURE
Next month I will cover the final two sales trends taking place – all of which affect salespeople in every industry. Understanding all six of these trends and how to maximize them will help you reap the rewards of a successful sales career.
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