Friday, October 28, 2011

Talking trash

I was reading a post on one of my favorite blogs -- The Big Picture -- which included this description of the latest stock market surge:  "An excess of pessimism led to the breakout to a new trading range..."

That's a new take on the old stock market adage about higher prices being driven by "more buyers than sellers."  And both are just a wag's way of saying, "Who knows?"  (And if the pros don't really know, it's time to find a new game.)

So how does this relate to your business?  In two ways:
  1. You cannot afford NOT to know why more customers are not buying -- unless you are on Wall Street and get paid whether your customers buy or sell or by simply fleecing your herd.  If you are guessing, you are losing market share.  And in today's environment, that's a death sentence.
  2. You cannot afford to be pessimistic.  If your head is full of dark thoughts, that storm will consume you and your business.  See item #1, above.
There's a term used in selling and sports (and probably other disciplines) that describes a negative state of mind; the doubts and bad attitude that form a pessimistic view.  It's called "Head Trash."  We all suffer from bad days, but most successful business people have found a way to overcome persistent head trash.
But most small business leaders have a less sadistic approach to accentuating the positive. Some use affirmations, others find comfort in physical endeavors, or family, or simply work itself.

What's your coping mechanism?  How do you stay focused on the positive?

Friday, October 21, 2011

Just a bit outside?

I’ve always been bothered by the concept of the “elevator pitch.”  That’s the up-to-30-second sound bite that you use to encapsulate your entire business value proposition to a prospect whose attention you have for but a moment.  The idea is to get them to ask you for more information; to jump-start a meaningful conversation.

It goes something like this:

Q:  What do you do?

A: “I’m a banker’s best friend.”

Q: Huh?

A: I make businesses perform better and their owners’ richer, and therefore, better customers for banks.

Q:  Huh?

A.  I’m a business coach.

Q. Oh! (Heads for exit…)

As a marketer, I know how difficult it is to capture the attention of a prospect.  It is essential in this era of communications carpet-bombing to stand out, to differentiate yourself and make your organization memorable.  My wife met a real estate salesman who handed out a business card that read “I sell homes, mother-----.”  Memorable indeed and certainly in less than a half-minute.  But effective prospecting message?  Not so sure.

And now there’s a new twist on the elevator pitch: answering the question with a question.  “What do I do?  Before I tell you, can I ask you…” If I wanted to be answered in that way, I would have said, “Hi, can you ask me a question about me?”

Question:  in a face-to-face situation, which is likely to make a better first impression, an artificial device or a genuine human-to-human interaction? 

Answer:  People HATE being sold.  The 30-second commercial, in whatever form it takes, is a selling device and people have figured it out and will tune you out.

If everyone has been trained to respond to the “what do you do?” with a short burst of captivating wit, it negates the uniqueness and effectiveness of the maneuver, unless you are pretty proficient in pithiness.

For the rest of us, being real is the best course.  Respect your audience.  If what you do has value, you don’t need to hide it behind artifice.  When making connections, the truth will out.

Sunday, October 16, 2011

I drank what?

This  post's title is the punchline to one of my favorite bad jokes: "What were Socrates' last words?"  It came to mind when I read this article in Forbes on the state of US manufacturing titled "US manufacturing is not dead."

The story is accompanied by a pretty amazing graphic (I'm into chart porn).  The upshot of the chart and story is that the US is still the leading manufacturing nation in the world, and by a considerable margin, the most productive.

Manufacturing jobs, are another story.  They are in long-term, irreversible decline.

The Forbes story notes:  "Yes, rising productivity kills jobs—certain kinds of jobs.  David Ricardo (and 200 years of evidence) would say those jobs eventually get replaced by other kinds of jobs (in America, namely in the services industries). Said another way, in America in 1900, 50% of Americans worked in agriculture—now about 2% do, but we produce exponentially more food. Same thing."  And as the conclusion at the bottom of the chart notes, there are long-term benefits from producing more with less.

So what does this have to do with long-dead Greek philosophers?  That the benefit often gets lost in the pain of the execution.  Or maybe that suicide isn't painless, and as Socrates actually noted as he neared his death, a debt needed to be repaid after he passed.

Technology and productivity is a dual-edged sword (or cup of hemlock, if you will) for our communities in general and business owners and employees specifically.  The ability to  grow and improve  efficiency has been made possible by the technologies developed over the past decade.  Yet, this progress accelerates the creative destruction of capitalism and the human toll is evident;  we are living through a mass dislocation similar to our evolution from an agrarian to industrial society a century ago.  Our skills have not yet caught up to our capabilities.

As we look to leveraging technology to better measure and manage our enterprises, we need to be mindful that technology's successful implementation and integration requires the managing, motivation and development of flesh and blood and not just investment in silicon and plastic.  A debt remains to be paid and that's no joke.

Thursday, October 13, 2011

Which line is it, anyway?

The top-line is the number one topic of conversation at all levels: at our TAB Board meetings, in discussions I have with business owners and managers, and given the nature of our economy, our national discussion overall.  How do we grow?

For many, growth is synonymous with being more successful.  I once worked for a man who measured the success of his least how he bragged talking about how many employees he had.  That would have been appropriate had his vision been to provide employment opportunities to as many people as possible...but he was more about comparing the size of his staff.

Size is a relative measurement, after all.  Big or small in relation to what?  Will more revenues equal more profits?  The answer is... not necessarily.  Conversely, we've all been feeling the impact of the "cut to grow" mentality in the corporate world (now being emulated by a government near you.)  Short-term profits may improve, but at what long-term cost?

The New York Times recently captured the business owner's dilemma in an excellent "You're the Boss" column.
What's your vision for your company?  What do you you value most?
  • Do you want to be the biggest or the best?  Are they compatible or competitive notions?
  • What kind of business do your customers think you are:  low-cost or value-added, or somewhere in-between?  
  • Should you raise prices or hire new sales staff?  Which will be more profitable?
  • Do you have the staff, processes and infrastructure in place to grow?  
  • What will growth cost you? Will increased revenues drop to the bottom line?  
  • Will growth change the customer experience?
The Clash once asked musically, "Do I Stay or Do I Go?"  So what's the answer?  As always, it depends on you.

Monday, October 10, 2011

Something strange indeed

For business owners who have had the old Buffalo Springfield tune running through their heads, The NY Times reports today on what's been happening here. The Census bureau has found that incomes have fallen more since the official end of the 2007-2009 recession than actually fell during the recession. Peak to trough, median incomes have fallen nearly 10%, one of the largest drops in decades.

So again, data (and legions of economists and statisticians) are confirming what has been evident in many of our communities: the recession is really not over, at least in terms of consumer spending, the critical success factor of our local, regional and national economy.

During the Great Depression, one entrepreneur famously went about his business by focusing on "where the money is." What about you? Do you know where the (legal) money is to sustain your business?

The implications can be profound. In search of sales, many organizations begin to compromise on pricing and thus undermine their value propositions. Often it leads to a fatal spiral, where quality is compromised by the cuts needed to keep margins up in the face of lower prices, which leads to further cuts.

How well do you know your tight is your focus? Are you wasting time (and money) selling to prospects that not just won't, but can't buy? Tough questions, but ones you should be asking yourself every day as we slog through this economic morass.

Wednesday, October 5, 2011

One head, many hats

It's 5:30 am.  You have been up for a while, waking well in advance of the alarm (which these days is more of a mockery than a fail-safe -- who sleeps?)  You face a full schedule of meetings, a lengthening list of to-dos (mostly business development priorities) a deadline and an evening community-service meeting.  The day is packed, and that's just running the business...there are kids to get out the door, spouses to converse with about the contractor not showing up -- again -- (you'll text her because you are leaving early and she's arriving back from work late:  you need that second income), oh and the pets need to be let in/out, and you have to remember to get gas for the lawnmower because the lawn hasn't been mowed in two weeks because of all the rain and the weekend has been completely taken up by baseball practice and the 100-mile bike ride fundraiser and the sleepovers, so you didn't get ahead of all of this last weekend, but tomorrow's another day and I will try harder to get it all under control.

And you love owning your own business, despite the fact that it is 5:30 am again and you've awoken before the alarm...

Sunday, October 2, 2011

Demand, Part 2

Regardless of the endless stream of negative news and commentary on the economy, unemployment,  the 2012 Presidential election, the weather, you should be focused on executing your well thought out and intelligent business plan.

You do have a plan, don't you?

Oh, well don't worry, you are not alone. 

Over the past few months, starting in the early summer, the discussions I have had with many owners and managers of smaller enterprises has centered on increasing sales/revenues.  (A statement that will shock few people.) Most have trimmed all of the fixed costs that they can out of their business and are running lean...nearly to the bone.  And a few are actually hiring, albeit slowly, cautiously.  But many don't have an actual plan that leads their decision-making.  This leads to free-lancing, or worse, inaction.

While it may seem counter-intuitive, planning for smaller enterprises need not be an elaborate fact to be effective (translation: to be actually acted upon) a plan needs to be rather simple.  It cannot mirror the "business plans" that one develops for a funding agency or in entrepreneur "boot camps," documents which are written then put on a shelf by most business owners.

An effective plan acts as your script, or your playbook (actually more like the laminated one-page crib sheet that football coaches carry on the sidelines.) 

A working, workable business plan incorporates the following elements:
  1.  Critical Success Factor (CSF) - The factors that are so critical that your company will not succeed if these factors are not satisfied, e.g., Increase Sales.  CSF's are conceptual; the frame for your goals, which are more specific.  Most have no more than two or three.
  2. Goals - A restatement of the CSF that is specific, measurable and attainable.  Directly relevant to the CSF, above. Increase sales by 10% by year end 2012.
  3. Strategies - Your plan of attack; how you will achieve your goal.  You may have several  strategies:  Increase pricing; expand product/services; hire salesperson.
  4. Action Plan(s) - You must have at least one  action plan for each strategy, but no more than 2 or three -- too overwhelming for most, unless you have managerial staff with time on their hands (a subject for another post.)
Action plans should  follow the SMART planning construct:  Specific, Measurable, Achievable, Relevant (to the goal) and Time-bound.

Planning leads to a better leadership attitude.  It allows you to:

  • Think strategically rather than working on “the idea of the week”
  • Focus on building teams rather than trying to do everything yourself
  • Motivating those responsible to get timely results
  • Creating a results oriented culture that embraces and drives change

Remember:  Proper planning prevents poor performance!