Having spent some good quality time with some superb SME’s this week, it really highlighted to me how when your business grows, a new set of challenges appear mostly around strategy, culture and organisational development.
Running a large organisation it’s easy to take for granted the things that seem like business as usual for us, but business as ‘unusual’ for a fast growth small or mid enterprise. I’ve previously posted about what small businesses can learn from big businesses here. They are a good starter for ten.
The key things that a business owner needs to think about are: -
- Managing your growth better by not trying to be everything to everybody. Have a clear sales/customer strategy about who is going to deliver your objectives most quickly. I’ve seen so many small businesses dizzy with being so busy on delivering projects which deliver little real margin and distracting them from more profitable opportunities. Be careful about your ABC (Activity Based Cost) before committing your precious resources!
- Prioritising your resources behind those priority areas. In particular a regular review of who is in the right seat on the bus, where you spend your customer acquisition funds, rebate payments, who you extend preferential terms and why. Overhaul everything, recession or no recession with a frequency.
- Understanding the dragging anchors on your performance and taking action against them (low margin, high touch customers, or employee underperformance for example). The longer you leave it, the worse it gets and the the more you dilute your ability to be competitive or achieve your goals.
- Getting clarity on what you are doing it all for. What is the key outcome you need from your business? An exit, organic growth, runaway growth, a lifestyle? This bit seems to be missing a lot of the time and as a result, small businesses can easily drift. It will help massively in establishing what you need to achieve, with who, by when.
- Before appointing a board or non-executive directors think really clearly about what you need them to contribute. What skills are you missing, does it need to be a board position or a senior management position? Do you want someone sales focused or financially focused? Do you need someone to prepare you for sale, merger or investment? NED’s come in all shapes and sizes, so always be clear about what you want?
Over the years I’ve been involved in deals of all shapes and sizes. Big, small, complicated, technical, long, short, you name it – I’ve done it.
Aside from the pure straight bid/reverse auction scenario, where you have been pre-qualified and end up bidding blindly against someone else for little or no ending margin, there is more than often always an opportunity to build your value proposition. It’s not always about price in the Business to Business marketplace.
Where I see lots of salespeople go wrong is that they give away discount far too easily. I’ve blogged previously about the danger trap of falling into multiple of five or ten when discounting, avoid it all costs. As soon as the negotiation starts, they’re off, ten per cent, twenty per cent – any more offers? The trick in negotiation is to understand your value, package it up and if necessary de-package your offer to get the price down if the customer requests it. Alternatively, if you have to discount due to competitive reasons, be prepared to ask for something in return. Things such as a quicker payment, a bulk delivery or a longer commitment period if it is for a professional service.
It’s not easy, you have to have uncovered the need within the customer, be sure of your solution and be prepared to tough it out when needed. It’s always worth remembering that one per cent off the sales price can have an impact on profitability by as much as ten per cent, when taking into account your fixed cost base. So, defend your price, be solid about why you are the best fit and ensure that you are networked well in your target customer to ensure success.
Last week, we took some important customers to Turnberry, one of the worlds most famous golf resorts. Turnberry has hosted the most prestigious championships in World Golf, such as The Open, it’s a notoriously difficult course.
Each playing guest was assigned a caddy for their round. I don’t play golf personally, however I do know that playing with an experienced caddy is something that an amateur golfer will rarely get to do. The caddy pretty much does everything for you apart from swing the club, they’ll carry your bag, advise on your club selection, clean your ball and given their intimate knowledge of specific golf courses, really be able to guide you in to a specific hole in terms of direction.
Talking to customers over dinner, it was fascinating to hear what an un-nerving experience this was for many of them.
The key reason was this. To pass your club selection over to someone else they found really difficult, as they reached for their “old faithful favourite club” the caddy would have already taken out a different club, having assessed how they’d played over the previous couple of holes. The players, after years of playing with their clubs and getting a real feeling for how far they can hit a ball with a specific club, were now in a position where someone was telling them to use something else. The caddy, making this choice based upon”real-time” data (their performance and the weather conditions).
It reminded me of delegation and the uncomfortable feeling that delegation brings to you when you first start to truly practice it. You genuinely put yourselves in the hands of others and have to rely on their expertise to get things done. I often liken it to bungee jumping. You’re stood facing an enormous drop and every part of you is saying “don’t do it”, you jump and are terrified whilst you drop, then you feel the bungee kick in and you come back up again. As you reach the platform having been winched back up, the overwhelming rush of adrenalin makes you want to do it again, realising that it’s not so bad after all.
I meet lots of business owners and entrepreneurs who still struggle with delegation. They are still hanging on to the micro-details of how their business runs, making every small decision and not making the positive choice to trust others in order that they can spend more time on the bigger picture of the business. They are almost addicted to the concept that the business cannot run without their direct input. I made this mistake early on in my executive career and realised that I had to do my own personal delegation bungee jump. It was terrifying at first, but when I realised the power it gave to others, how it re-prioritised my time and outputs and what a bottleneck I had become, there was no looking back. Breathe in, don’t look down and jump!
Today I spoke at an event in Chester and galloped through a metaphorical buffet table of ideas, trends and insights to an audience of business hungry SME’s. Just a small portion of the things I touched on were: -
Liquid Fear. Fear is everywhere right now, at a structural and personal level. Don’t let it trigger fight or flight thinking in you or your innovation may suffer.
Averages. Even though the economy is struggling to grow at a pace, if all you ever do is consider that “flat” is what everyone is doing to judge your performance – you’re wrong. An average is made of superstars and under performers. Be a shining star in the game of average.
CTRL+ALT+DEL – It’s an amazing time for the world and we’re in it, right here, right now as all this structural change takes place in the way we run our lives. Someone set the reset button and it’s important we all update our software to run today’s programmes.
Plural Working. People are much more open to earning income from multiple sources. The concept of being wedded to one company is “so yesterday.” This may have a big impact on staff working practice, location and cost.
Make your competition irrelevant. Do things they can’t do. Understand that if they are big, they make lack agility. Introduce new initiatives to stay one step ahead of them.
Be authentic. As a person, as a business. Stay true to what you’re all about, don’t dilute, be yourself.
Have the courage of a lion. Tough times require tough decisions. Back yourself, call the big shots, be bold.
Counting it all up, I covered about fifty points in rapid succession today, covering everything from innovation, trends, leadership and change. It was enjoyable to cover a lot of different things, a little taster of a lot of things as opposed to a “big meal.”
It seemed to work. What struck me most was how there is so much to talk about, so much change, so many new things, new challenges and we have to constantly stay up to date with all of these things, aswell as do the day job.
It’s all there for the taking. Tough times see some of the business ideas launched, you have to look for the opportunity, put in some hard yards thinking and get implementing!
Everyone loves a gong. It’s the ultimate feelgood factor for recognition of a job well done. A new product, a staff initiative a successful initiative.
Over the years, I’ve been on many a judging panel and been surprised and shocked at the variance in entries from hopeful participants. So, here are ten things you should take care of: -
- Ensure that you have answered all the questions that the judging panel are asking for. I see this so often, entries which do not meet the criteria. Create a checklist and ensure everything is covered.
- Don’t just copy and paste text from your website into your award entry. Each entry, should be crafted for relevance, text that is copy and pasted sends a message that you can’t really be bothered.
- Keep it brief. It’s not a competition as to how long your entry is, it’s about it’s quality. Think like a judge. Judges have to sometimes read hundreds of entries and a really long submission will elicit a heavy sigh, particularly if it begins to ramble.
- Don’t bend the truth. Keep it factual. It’s surprising what judges know about, particularly if it’s for an industry award. They will tend to be experts and can spot a rat a mile off. A whiff of a mistruth and you’ll be discarded.
- Drive out your USP (unique selling point). Ask yourselves what really sets us apart? What one message do we want to leave this judge with that will stick in their head relevant to the category?
- Don’t state the obvious. If you’re entering a green award, resist saying things like “we take our environmental responsibility really seriously (yawn). Doesn’t everybody? Think, what things will everyone be submitting and how do we do it differently?
- Get a fresh set of eyes to read the submission. Quite often the same person(s) is in charge of the end to end process of completing the award entry. When they think it has been done, ensure it gets passed to someone else to do a fresh look/edit of the whole thing, particularly for spelling mistakes.
- Meet the deadline. People still miss deadlines and expect their entry to stand. An awards deadline is there for a reason, work to it. If you miss it, expect not to be judged.
- Don’t add loads of attachments. Tempting as it might be, don’t just upload big powerpoint files. Make your written entry stand out. Only add attachments in support (such as an image/advert example) if you are submitting on-line and you can’t include the information in the entry form.
- Use bullet points. Entries normally go through a pre-judging stage. Use bullet points in your submission as much as possible to allow a judge to scan it and make a mental ticknote in their mind. If they get the headlines, they are more likely to delve into the detail.
I recently wrote a guest blog about networking. It’s a lot longer piece that I normally publish, however if you do have five minutes with a cup of coffee and want to know how to enhance/build/develop your network, I’d recommend you to have a read.
Not Working at Networking
Opportunity is knocking at your door. Can you hear it? The knock is certainly loud enough. If you have the mindset of an opportunity engineer, not only will you hear the knock but you’ll be really pleased to see who’s at the door and how you can collaborate together. Not working at networking is guaranteed to decelerate your business success and opportunity creation.
If you look carefully, nearly all successful entrepreneurs have a great network of people around them. Advisors, mentors, friends, associates. In fact, look beyond entrepreneurs into large businesses and you’ll see the same thing replicated. There’s a reason – having a strong network leads to business, personal growth and enhanced reputation.
The New CEO?
My philosophy is that the CEO no longer exists in its traditional format. They are in the shadow of the COE (Chief Opportunity Engineer), the new breed of front man who exudes the value of the organisation. Steve Jobs of Apple falls to mind or Richard Branson of Virgin – see what I mean?
Business – at all levels – need to be generating opportunities through their network. At a basic level, recommend friends. At a senior level, can your organisation and my organisation work together?
Can peer to peer networking introduce a learning opportunity or new friendship? Time, Attention and Trust are the new scarce commodities in our busy world – breaking into the hearts and minds of senior executives won’t come via an e-shot. You need to be referred, introduced or have a relationship.
Give me Five
If you’ve new to networking, here are five quick facts for you: -
- Networking isn’t about the right here, right now. Most networks take time to develop, like a finely spun spider’s web. Don’t push too hard or expect too much too soon. It’s why more senior execs avoid billed networking events and prefer to
- Quality and quantity. Networking isn’t about having a thousand anonymous contacts. It’s about building a serious group of like minded solid contacts. People that will take your call.
- Give, give, give. Ask what value you are delivering into the network. Give generously.
- Use on-line to keep track of your network. No more million cards in boxes. Use technology to help keep your network organised. Linkedin is a great place to start.
- Be genuine. Authenticity, reliability and transparency matter. Understand why you’re embarking on the journey of building your network. Personal learning, new prospects, new job or new friends. Whatever your reason, be yourself.
Put your head in the Cloud
The modern day Rolodex/card box all exists in the cloud with one major difference – establishing the inter-relationships exist between the people you know.
On-line tools allow you to understand the relationships between people. The six degrees of separation between you and anyone else in the world. Trying to get to a new prospect, then this is the way you may find a route through to them.
The world seems to have gone full circle. Web 2.0 has breathed new life into the idea of networking, without the time investment of turning up at venues and getting home late.
A plethora of transient technologies for developers to create new social media platforms has cropped up, status updates, geo-location and aggregation to name but a few – these new platforms will continue to allow us to evaluate who we want to know and what’s going on with them. Take a look at Gist for example, or Xobni – an application that sits within your Microsoft Outlook client.
However small your business or big your job title, having a strong network around you is a pre-requisite of business success. I didn’t really figure this out properly until social media networks turned up, but in a turbo-charged world, I’ve quickly figured out that staying front of mind is everything. Technology has been one of my key facilitators (aswell as getting out there).
The Age of Distraction
We’re in the age of distraction. The short attention span. We’re now consuming nine hours of content a day, compressed into a five hour window. We’re juggling devices, consuming one thing, fiddling with another it seems. Meeting people is becoming more difficult; they just don’t have the time or have a pre-formed selection criteria, particularly senior executives.
Staying “front of mind” of your network is imperative. I use Twitter and Linkedin status updates to exchange interesting information. Links. Blogposts. Business news. Mixed in with some of my movements. It’s amazing that when I see people, how up to date they are with what’s going on in my world. I enjoy sharing it and it’s led to some great spontaneous meet ups, fantastic content distribution and enjoyment, through meeting new people.
The CIA in Social Media
There’s never been a better time to investigate who and what you know. What I mean is using social media networks to investigate your networks and really get under their skin by knowing more about them – like the CIA would. Most people for example use Linkedin to make a single connection with an individual they may (or may not) know and leave it at that – questionable whether it’s worth doing.
Linkedin is more powerful than that. Tools I use are things like Linkedin company search. This allows you to follow a company and see who’s arriving, who’s leaving, who’s been promoted and the members of the business that are on Linkedin. It’s like a living breathing company CV. Perfect for dropping a personalised note to a network contact if they’ve been promoted or following a key contact if they’re moving on to a new opportunity.
Is Dunbar right?
Ever heard of Dunbars number? Wikipedia it. In short, British anthropologist – Robin Dunbar – established that the number of contacts that you can maintain is finite dependent on brain size. As the average, the number was around 150 people. Now, I guess this was before social media came along and changed the rules. Thousands of Twitter followers, Linkedin contacts and Facebook friends.
However the underlying principle has always been for me about what your network is there for? What role does quantity have over quality? Different people run their networks in different ways. Quality matters.
For example, I rarely connect on Linkedin with someone that I haven’t met in person unless there is a compelling reason for a connection. If you connect with anyone that asks, they are associations, not a network. A network is people you can call on, trusted advisors, people who will take your call. I use layers for my networks, maintaining a large number of loose contacts but focusing my time on energy on the people that matter (top 3%), that way you keep the quality and proximity.
Let’s face it. A contact only starts to become really meaningful when it goes off-line, that is, you end up meeting someone in person. I’m a great believer in this and it is the route to growing the number of people you know. Connect on social media first, take a look and see if there’s a crossover, establish it, start conversing, build credibility then at some point – meet.
I maintain a wide network of contacts at a secondary and tertiary level to increase the number of primary contacts I have. To increase your exposure to opportunity, you need to be visible, connected to a wide range of people and be alert. I use social media networks primarily as follows: -
Twitter – The wide pool of people that I have loose connections with. Consider this the ocean of prosperity through which you might trawl your nets. I promote my blogposts via Twitter to increase readership and ultimately reputation. By virtue of that readership, people become more interested in your wider thoughts and interact with you.
Linkedin – A very powerful tool. Much more than I connect with you, you connect with me. I use it to follow competitors, potential employees, customers; engage with groups and keep front of mind with the people that matter.
Blog – Great for Reputation Management. I write a blog at www.philjones.biz giving commentary on business, leadership, social media and innovation amongst other things. This creates credibility, puts your thoughts out there for people to discuss/debate and gives you an opportunity to put some thought leadership out there. Blogging is hard to start and maintain, but if you keep at it, it will bring you significant rewards by increasing your reputation amongst your network.
Networking is basically about building solid human relationships. Whites of their eyes relationships with people that may assist you with opportunity – whatever that looks like for you. Human to Human (H2H) relationships still sit at the core of our world – so you also need to be out there, not just sat at a screen. Choose your events wisely though. Put as much thought into where you want to go as why.
Maintaining your network is as important as building it. Staying relevant, remembering small details, adding value and devoting time to stay in touch with people will pay dividends in the long term.
Not working at networking just isn’t an option for anyone serious about building their reputation, increasing opportunities for sales or meeting interesting people for learning experiences. If you get a knock at your metaphorical door, open the door and look for the win/win. Knock knock –who’s there?
Chatting with a small business on the phone the other day, a quick conversation on the phone turned into an hours business clinic. The business involved was suffering the after effects of a decision, which seemed good at the time, but is later paying the price for.
I won’t do the detail on the why’s and wherefores of the specifics, but there was some good advice there, which was worthwhile to share. Again, this is linked to things that big businesses do well, that smaller businesses can learn from. In no specific order: -
1) Know what your end game is. Selecting which pieces of business to progress/not progress rely on you having your end game down somewhere in a basic plan. That sets the route for your business, the pace, the tone and utlimately the types of customers you want to attract.
2) Don’t over-commit yourself. If your resources are limited, concentrate on the things that matter. In the early days of a start-up, there’s a tendency to do any piece of business at any cost, just to get money through the door. If it totally overstretches you, it may be taking you away from more important potential higer value business opportunity. Don’t be a busy fool, turnover = vanity, profit = sanity.
3) Opportunity Cost. You have a finite amount of time in working week. Commit your time to achieving your plan. Filling your time with business which you don’t make much money from simply limits the amount of available time you have to do more important things, like looking for more profitable customers or developing your offering.
4) Don’t always offer trade credit if it’s stretching you, particularly if selling to consumers. Ask for cash upfront or if for a trade customer, where you cashflow may be stretched. Ask for part-payment up-front to cover your costs. Be brave! You’re not a bank or a charity. Or give an early payment incentive (if your margin supports it).
5) Gear up to grow. If you know your end game and you know what working capital requirements might be, you will be far more selective about which bits of business you can do. A good question to ask yourself is if a large customer walked through the door tomorrow, have you got the working capital to fulfill their order? They will be expecting credit, probably 30 days net. You’ll need to fund that. Can you do it?
6) ABC. When taking a large order, take into account all the activity based costs (ABC). What I mean is all the hidden costs of fulfilling the order. The stuff that takes loads of time. It’s tantamount to leaking profit.
7) Don’t get excited by the project, get excited by the profit. A common mistake I see is small businesses, particularly creative ones, being excited by a project and committing to it because it appeals to them. Do a clinical assessment of every opportunity, you’re not a charity. What’s in it for me? How much net profit in this piece of business taking into account all the running round, the trade credit and the other costs.
In March, I’ll be attending one of those marketing director forums. Business model goes like this. Lay a load of good speakers on; invite a load of high level marketing Directors who’ll want to hear them speak, get suppliers to pay to attend and cover all the costs of the speakers and the attendees, in order to reach the high level decision makers.
Attendees (marketing directors) have to agree to have some meetings with suppliers to attend for free, in order that there is a win for all. Organiser walks away with lots of happy people – hopefully.
Now, said suppliers then have to lay out their wares to the attendees, pitching for the meeting time that they have available. Said Marketing Directors are hugely busy people, inundated with new business calls and e-mails all day long.
What a golden opportunity to cut through. Yet, many continue to get it so wrong, writing page after page of chest beating copy that means nothing. We’ve won this, we’ve won that. And?
Here’s what would grab my attention.
“If you agree to a meeting with us, we will do a pre-audit or ideas session on any business problem you care to throw our way. A current campaign that’s not working. A new campaign that needs some thought.
We’ll come prepared with our thoughts on how we would do it differently. Just agree to meet and we’ll get our best people on your problem. Our ideas will do our talking, you judge whether we can cut it.”
“Let us know of a forthcoming networking event where you may be present and we’ll arrange for our “enter title of senior agency person” here to be there, just to meet informally”
OK. You have my attention. An opportunity for a quick bit of benchmarking. Said agency can make a real impact, get real with a real problem, guaranteed engagement from the Marketing Director. It’s not that hard, loads of room for follow up or development if they do the business by producing some great answers. B2B is all about grabbing time and attention, plus trust.
Coming up with new ideas normally takes the route of sitting with a stack of post-its and trying to fire out as many thoughts as you possibly can. However, there are a large number of methods/frameworks to assist you and perhaps give you some added stimulation when trying to come up with something new.
Lateral thinking gives you some additional avenues to be creative. We used some of these on an internal workshop yesterday, let me share three of them with you.
1. Random object. Pick a random object and then describe how that object is going to help you solve your problem. The fact that it is a random object gets the creative juices flowing.
2. Breaking the Rules? How would your problem/challenge/opportunity come to life if there were no rules, organisationally or otherwise. It stops people thinking about what is achievable based upon the business/world works today.
3. How would someone else tackle it? I’ve previously written posts about this, relating to Richard Branson and Michael O’ Leary. It always delivers great results.
Many of these techniques can be easily learned. I’ve attended some great workshops with innovation and lateral thinking expert Paul Sloane who has written books on the subject. Great guy to follow on Twitter, always posting interesting and stimulating stuff. Main thing is, sometimes brainstorms aren’t good enough on their own and you need an extra little bit of something to sieve out the gold.
Meetings. They can be the death of you. Further up the ladder you go or bigger your business gets, the more of them you have to attend. Most people sigh and groan at the prospect of some meetings. Why? Because they are a talking shop, regularly political and often poorly managed. So, here’s my top tips for running better meetings.
- Understand why you are meeting. Do you need to meet in the first place or will a phone conversation do? Use Webex or a similar service to cut down travelling.
- Make the outcomes clear. What decisions do you need? From who?
- Do your teas and coffees 5 minutes before, start on time.
- Have an agenda. Time limit things where possible.
- Keep the numbers small. Fewer people means more productivity.
- Have a start and end time. Don’t let it drift.
- Circulate as much stuff in advance as possible, particularly background reading or key powerpoint slides.
- Use Powerpoint as little as you can. Not everything has to always be formally presented.
- Get clear, assignable outcomes and actions.
- Follow up and make them happen.
Many years ago I used to work alongside a Japanese executive that regularly used the word “ketsuron.” This basically means conclusion. He preferred that you showed your conclusion slide in any presentation before anything else. By doing this, if it was a simple decision or recommendation, then he often made the decision on that one slide, without seeing all the detail. However, he often went back to the detail to check whenever he felt the conclusion required further analysis. It always stuck with me, the idea of “ketsuron” and summarising is a great skill. Try it the next time you meet, it feels like a human Twitter conversation at first, however it does save time in the end.