Habits that Kill Growth

Every business leader wants to see their business grow. All too often, the business owner that launched the business relies on their intuition to sustain it. While Operations professionals study process and collect data, rarely does that practice extend to the front office. Growing skills to build relationships, implement measures, and collect relevant data are vital to growth. Here are three growth-inhibiting habits to consider:

prooduct-acceptanceAvoid what you don’t understand – Whether it is business planning, Internet marketing, or appreciating the difference between order taking and sales, it is a good bet that the skill set that helped start the business will not sustain it. Many business owners forego writing a business strategy because they do not appreciate that the underpinning of all marketing activity is built on the business strategy. If one can answer these questions, “Why are we in business?”, “Why will people buy from me rather than my competitors?”, and “How much revenue can I capture from this market over the next three years?” their business plan will be better than most of corporate America. The fundamental skill is engaging customers and prospects so to understand what they want and the trends that are driving their interest. This skill comes naturally to a small group of gifted people. The rest of us need to learn a process and practice, practice, practice.

Avoiding development of high-skill employees – The skills and traits that make managers and sales professionals successful are almost identical. The most important of those skills are leadership and interpersonal skills. When I talk to business owners about how they evaluate sales performance, the most frequent response is, “My folks are very skilll-continuumexperienced.” While this response dodges the question, interpersonal skills are usually developed with maturity and growing self-awareness. In the sales world, experience can be a two-edged sword. On-the-job experience needs to be balanced against how professionals have updated skills to remain relevant with the changing nature of sales. Skill development does follow a logical progression. A sound “on-boarding” process should engage an employee with the position and company. Skill in setting and managing goals will accelerate development of interpersonal skill. Development of interpersonal skills requires modeling of desired behaviors and coaching employees on how to achieve results. While engagement and goal management can be measured with surveys and percentage of goals achieved, evaluation of interpersonal skills and leadership require close observation to verify desired skills.

Misconception that the value is the product– Pride in company and product offerings is almost always a good thing. Customers, however, focus on what value they might gain by consuming the product rather than the product itself. Customers’ perceived value can only be fully understood by objective, yet empathetic inquiry with the customer. Again, interpersonal skills are essential for sales and marketing staff to understand current and future customer wants. Business leaders that shy away from developing interpersonal skills will shy away from gaining adequate customer focus.

Accelerated Achievements is an advocate for Marketing Quality Management (MQM). Lasting improvement is achieved through a comprehensive assessment of process, people, and skills and implementing real-time performance measurements. Please contact us, and we will be happy to share ideas on how you can upgrade your marketing capabilities.

Three Ways Executives Stumble

Intention is everything when creating strategic and business plans. Too many executives use annual plans as a “snapshot” or “State of the Enterprise” presentation rather than a dynamic instrument of changestumble. AH Maslow is credited with developing the Cycle of Change which identifies three transformations to achieving change. They are: awareness that change is necessary, identifying what needs to change, and understanding how the change can be achieved. If managers are not deliberate with each step, much can go awry. These are my top three ways to stumble:

Failure to recognize how fast customers will evolve: Companies are sustained by learning to time product introductions to a market window. A proven process to capture customers’ future preferences and strategies is a given requirement. Even the best market intelligence, however, will only render a hazy outline of how your product offerings need to evolve. Understanding key material, tool, and process trends provides more clarity on product cycles. Intuitive customer understanding and the ability to predict schedules and cost, however, is the “secret sauce” for a winning product program. And while the biggest prizes are awarded to disruptive products that leapfrog the competition, ideas cannot be so innovative that customers fail to understand their value. Apple is recognized for the graphical computer interface and personal audio player; but was not the first to market either of these products.

Reluctance to lead change: I have seen executives who desire organizational change stumble when they did not factor how they need to change. When people are presented with a new idea, over half the population will respond by rejecting the idea until it can be proven to their satisfaction that it’s a good idea. While clear communication regarding what the change is, why change is needed, and how the organization will benefit is vitally important, leading by action is equally as important. Allowing employees to participate in planning change, working to build trust, and involvement in demonstrating the changed behavior will help achieve success.

Inadequate reallocation of resources: Executives worry how change in their business might unsettle customers’ willingness to buy. Businesses will often attempt to maintain both old offerings and services while the replacements are being developed and introduced. The decisions businesses make regarding capabilities, skill development, and capital are impactful. How often have we seen?

  • Acquisition of new systems while skimping on the necessary implementation training
  • Jobs eliminated while neglecting to resolve how responsibilities will be reassigned
  • Incumbent employees assigned to master new technology while restricting ongoing education

The ability to forecast capital requirements and cash flow is an invaluable skill. The discipline to release high-skill employees from marginal product lines without disruption will lower stress on the organization.

I have seen attitudes toward strategic planning jaded by these missteps. The rewards of management team learning to be proficient at planning, however, make learning worthwhile.

 

 

One Strategy that Will Improve Profitability, Quality, Healthcare Costs…

Gallup ImageWhile perusing a digest on LinkedIn, I came across a link to a Gallup report entitled “State of the American Workplace 2013” (http://bit.ly/1RQ5Bpa to register and download.) This is an informative report that establishes a quantitative value for employee engagement. When measuring employee engagement, the companies in the top quartile reported 22% more profit, 41% fewer defects, and significantly lower healthcare costs than the bottom quartile. Of America’s roughly 100 million workers, 30 million are engaged, 50 million are not engaged, and 20 million are actively disengaged. Actively disengaged workers sabotage, obstruct, and steal to act out their unhappiness and cost the US economy $450 to $550 billion annually. Of the industry sectors measured, manufacturing has one of the lowest levels of engagement, customer service is the job function with the lowest engagement, and Connecticut has one of the highest levels of actively disengaged employees. The bottom line is that an unpopular supervisor may be costing you a lot more than you think.

I encourage all my clients to manage engagement. Per Gallup, engaged employees create most all innovations, win most new customers, and provide the most entrepreneurial energy.  So as we prepare to roll into a new year, here are my top suggestions for improving engagement:

Tie Employee Goals to Vision and Strategy: First of all, make sure you have a vision and strategy that employees can read and understand. All employees realize fulfillment by feeling connected to a mission that is valued by their community. Sense of mission is the most fundamental and necessary element of engagement.

Managers that Motivate and Measure:

It used to be common wisdom to treat all employees equally. Today, great managers recognize the diversity of their team and tailor how they approach team members to satisfy individual engagement needs. For some, a sense of belonging may be essential; for others it might be mission. The ability to connect with employees needs to be balanced, however, with an objective accounting of results and helpful feedback.

Flexible Work Rules:  Employers that accommodate employees’ needs outside of work grow employee engagement. The Gallup data shows that remote workers had higher engagement and worked more hours than in-house employees. Of note, employees who were permitted to work less than 20% of their time remotely had significantly higher engagement scores than both the in-house and 100%-remote employees.

Invest in Employee Development: Anyone under the age of 50 gauges their loyalty to an employer by the employer’s willingness to create opportunity and develop careers.  Millennials comprise over 30% of the workforce today and perceived lack of advancement opportunities is the #1 reason for changing jobs.

This is just a sampling of ideas. Please share any tactics that have worked for you or examples of employers who are great to work for.

Wish you every success in the new year!

 

Singular Focus Bests the Competition

DSC04155-BWe are approaching that time of year when we make and forget resolutions. Verne Harnish in “Mastering the Rockefeller Habits” wrote that effective business leaders identify just one high-priority goal to be accomplished over the next 12 to 18 months. The power of one shared goal greatly increases the likelihood that the goal will be achieved.

Goals fall short when the safety of the status quo outlasts the desire to see a change of fortune. The obvious advantage of one goal is focus; not just for you but for the organization as well. There are three areas where focus can provide the leverage to achieve change and results: innovation, priority, and accountability.

Innovation: The most dramatic change comes when organizations take a fresh look at a challenge that replaces a process; rather than doing the same thing faster or cheaper. Having a single goal fosters broader cooperation and collaboration that will break down resistance to change.

Priority: Whether you are a one-man shop or a large corporation, time spent on activity that does not support the goal threatens success. Insufficient resource in a particular skill area is the killer of many initiatives. Departments and individuals are far more likely to schedule activity or volunteer resource if they attach some urgency and importance to a single goal.

Accountability: One advantage of a single goal is that the scorecard is fairly simple. Initiative will flounder if there are no measures in place to measure progress. The common excuse is that it’s difficult to project schedules and cost for something an organization hasn’t done before. The discussion surrounding setbacks and disappointments will often reveal a new approach to the solution. (See Innovation.)

Another key success factor in achieving positive change is picking the right goal. The business leader needs a process for researching markets and technology that guarantees the goal is meaningful and realistic for the business. An experienced strategist can guide and direct a leader through an effective process.

Wishing you every success in 2015!

Five Points for Retaining Young Talent

Many Connecticut businesses, particularly manufacturers, are concerned about how they will replace their aging workforce. These concerns are elevated by graduating students’ perceptions that some industries hold no future for a career where they can find prosperity and fulfillment.  While parents, teachers, government, and industry need to set accurate perceptions, businesses need to honestly assess their readiness to attract younger employees.  A wise mentor once reminded me, “Every time we bring someone new into the organization, the organization changes.” An organization that is slow to adapt to change will struggle with retaining talent.

The following is a list of five issues every company’s leadership team needs to consider:

A Sustainability Vision: Every employee needs to have a sense why the business exists and how its mission will impact the community around them. Clarifying how young people’s talents will support the mission during recruitment will raise favorable attention.

Consideration of New Ideas: Innovative companies take the time to understand suggestions that at first seem a bit strange. Growing up with evolving personal communication services has instilled a new world view with young people.  Companies with a process to hear these ideas and give constructive feedback will nurture employee loyalty.

Flexible Work Rules:  Today’s technology enables professionals to collaborate effectively when not collocated. Work rules that allow some flexibility for employees to address family needs and reducing commute time will be appreciated and valued.

Training and Development: The need for some level of training and development may seem obvious. But I have heard executives express reluctance to develop young employees for fear that they will lose their investment if the employee leaves. I have found, however, that companies that do not develop their star performers are likely to lose them if they don’t develop them. Training decisions are strategic.

Career Planning:  Regular discussions with young employees that identify their valued talents and identify realistic career goals keep them engaged and loyal. To set realistic goals, it is important the management team have clear understanding of strategic investments and succession plans.

At Accelerated Achievements we help companies address these points. I would enjoy hearing any questions and experiences you have had with employee retention.

The Labor Day Milepost

Labor Day stands for so much in the popular culture. To beachcombers it means the end of summer, to parents and it means the return to school, and for executives it means the final stretch of the fiscal year. Skilled managers have a strategic initiative that will change the face of their business.  Labor Day is the milepost when it becomes obvious whether these initiatives will succeed or fall by the wayside.

If you don’t have an initiative; why not? All executives, regardless of how the business is growing, need to assess strategy, structure, and critical resources on a regular basis. Managers who are successful achieving initiatives pay close attention to three elements:

  • Clear communication of what the change will look like, why the change is needed, and what is everybody’s role in the change
  • Frequent reporting of progress and holding people accountable for their role
  • Clarifying what the organization will stop doing to free time and resource to achieve the goal

Many managers stumble when they are unable or unwilling to pull resource from short-term objectives or that they feel that achieving short-terms is sufficient for long-term success. Great leaders focus on what the organization needs to become and have confidence their organizations can adapt to solve short-term problems.  

Labor Day is a time when executives begin planning for the coming year and ask these questions:

  • Are there performance shortfalls in my company I should be concerned about?
  • Have there been recent events or new competitors that have changed customer preferences in your market?
  • Has the willingness of employees to innovate and extend themselves grown or ebbed this year?
  • What’s the greatest obstacle we will face in 2015 and how will we overcome it?

If you struggle with any of these questions, there’s a good chance I will be able to help.

Strategic Planning and the NFL

I recently saw an article in the Wall Street Journal by Kevin Clark titled, “The Philadelphia Eagles’ Personnel Strategy: Targeting College Grads.” As the title suggests, the Philadelphia Eagles have decided that student athletes who graduate from college perform better than those who don’t. The rationale being that those who self-motivate to finish an academic program will generally apply the same motivation to their career. Two of the three teams with the highest number of five-year graduates played in last year’s Super Bowl. The New England Patriots, my favorite perennial powerhouse, has been a league leader in recruiting graduates for years. The New York Giants currently has one of the largest rosters of three-year non-graduates and the team has not shown the greatness of years past.

The Eagles’ decision is clearly strategic. As I’ve written in previous posts, strategies are more focused at what organizations want to become rather than on what they will do. Athletes are traditionally measured by strength, coordination, and agility and the mantra of the football player has always been execution. As a fan, I have watched the football playbook grow in complexity over the years. It’s increasingly important that football players perceive what an opposing team is presenting and adjust their play accordingly. I can easily imagine the Philadelphia coaches sitting around a table discussing how they want their team to be smarter, more perceptive, tactical, and possibly shrewd. Selection and training of players and coaches becomes the critical goal area for this strategy.

Complexity is increasing in most economic sectors; especially manufacturing and healthcare. Business strategies address investments in assets, creation of intellectual property, and human resource requirements. The experience customers receive from a company while buying is most impacted by the employees they encounter directly and indirectly. Strategies that address customer experience always contain adjectives; such as smarter, shrewder, and more perceptive. Yet, because strategic plans are often pursued to support the budgeting and reporting of financials, few plans address these critical adjectives that steer a company from being mediocre to distinctive. What are the adjectives you would use to describe what your company needs to become and how would you go about implementing it?

Strategic Planning – The Essence of Being?

I am in a book group that’s reading Richard Rohr’s “Falling Upward – A Spirituality for the Two Halves of Life.” The premise of Mr. Rohr’s book is that the first part of life is a focus on learning how to do for ourselves through managing a career, picking a partner, etc. The second part of life is deciding who we want to be. The first part yields security while the second part offers fulfillment. I am struck by how well this discussion parallels the life of a business.

Mr. Rohr offers that a hazard in life is fixating on doing and the first part of life and never reaching for the fulfillment of being.  Every business has to start with an idea of what it wants to be. But with just a little bit of success, the entrepreneur must focus on “the doing” of building teams, process, and infrastructure. Management is a discipline focused on how to do things better. Just like people, perfecting how things are done can become a fixation and a source of false security. Managers can see planning as a distraction from “doing the real work.”

Any plateau or stagnation in growth can be traced to the owner and/or the company losing sight of what they want or need to be.  As a company grows, the owner must continually redefine their role away from doing and more toward leadership. A company must evaluate what it wants to be as they outgrow market niches or new competition and technology enter the market. Amazon would be an insignificant company if it remained just an online bookstore. It’s questionable whether Apple would still exist if they remained just a computer company.

Every new phase of growth at a company stems from an adjustment in what the company wants to be. Likewise, companies that resist reinvention usually find themselves on the slippery path of decline and blaming their sales and market staff for revenue shortfalls. Asking two simple questions: “Who am I targeting as customers and why will they buy from me?” can breathe new life and fulfillment into any organization. 

So….let me know what you think!

Boosting Productivity with Strategy

Last month, I discussed how too narrow a focus on metrics and results can have unintended consequences that impact management’s anticipated outcomes. Employee disengagement, customer complaints, and material shortages can impede results if management does not take a broad enough view of the organization.

Enterprise management is a system. Often, managers think they can treat functional areas as independent systems. Organizations that subscribe to LEAN operations can easily fall into this trap if they are not careful. Telltale warning signs are holding department managers accountable to measures that are only influenced by their department or isolating front office operations from the production floor.

Keeping a balance between how employees are directed and developed and process management is a simple model for broadening management perspective. Organizations that place too much focus on their employees can become locked in “fire-fighting mode”, develop reactive management unable to address longer-term goals, and display difficulty in predicting cost and cash flow. Companies that focus too heavily on process can experience variance problems due to lack of inter-department communication, lack focus on strategy and are unresponsive to supporting broader goals, and lose their ability to innovate in the marketplace.

Strategy and leadership are the levers that balance these two domains. Many of companies’ top performers are pragmatists that wince at the mere mention of “strategic plan.”  Strategic planning often draws a negative response because so many companies do it poorly or not at all. A good strategic plan sets investment levels between people, process, and assets. A good plan checks for employee skill deficiencies and assures that incentives and measures are aligned with the strategy. How many times have you seen a company announce a new initiative and not update their management scorecard? The key measurement for the quality of a strategy is how successfully it affects change. 

Is There Really a Choice?

I recently witnessed a discussion panel with two venture capitalists arguing whether identifying an attractive market or assembling a credible executive team was more important in gaining funding for a new venture. Both parties agreed that both elements are mandatory for entrepreneurial success. Yet, both had it in their mind to pick one over the other.  Similarly, I’ve seen managers argue about whether to improve process or personnel. Sadly, many executives fail when they pick one path when there really isn’t a choice being presented.

Having too narrowed a focus is usually the culprit for leaders acting on these faux choices. A business is system that includes people, structure, process, strategies, and incentives. What managers sometimes forget is that acting on any one of these elements will have an impact on all the other elements. In a down economy, managers can obsess on cost and cash flow. Enacting cost reductions without accounting for employees’ reaction will have undesirable consequences. A leader’s insensitivity to employee attitudes or belief that they lack the time and resources to manage all the proper elements can lead an organization down the same rat hole. Studies estimate that only 16% of employees are engaged. This means that in a 20-person company, only three people understand the organizational goal, understand their role, and are enthusiastic about achieving the goal.

Managers can avoid these pitfalls with a complete strategy that addresses not only markets and products, but organizational needs as well. Please share your comments if you’ve witnessed a business strategy that had unintended consequences.