Skills Shortage?

2009 has been an interesting year.

One of the issues faced by many businesses, especially medium to large businesses, is a shortage of critical skills. In some cases, key skills have been reduced by cost saving programmes.

Cost saving projects often lead to roles being made redundant. Where this results in head-count reductions in support or overhead areas, the process adopted is usually viewed as the least bad option by a business struggling to shore up weak finances. However, it is possible that the result is a substantial reduction in the expertise of the business in key areas.

If these roles were truly unnecessary, they should not have been filled with people - even in good times. To cap it all, if numbers start to improve, reinstatement of the individual who has left through redundancy is tricky. You may be uncertain of the sustainability of any up-turn. Your business may have evolved to the point where you would prefer to avoid re-employing the person who left (If in doubt, take professional advice on the employment law issues).

One approach worth considering is to hire a part-time functional expert. Someone with the skills you need - but for, say, 2 days per month. Hire the right person and you will:

• Still save money
• Make best use of the unskilled / semi-skilled support people in your team
• Be able to reduce or cut the cost of this resource at short notice without worrying about the costs or complexities of UK employment law.

There are many, highly skilled, people to choose from. Make sure you verify their expertise and that their terms of business give you the control you need.

Cheaper Marketing Costs More

Talking to a marketing agency I know this morning was an education in cost wasting. My contact had just spent a whole lot of client time - much of which he cannot invoice - sorting out a file sent to him by a client. His plea "bring back professional marketers, they save me time and my clients money".
The leaders of many organisations try to save money in their marketing by not employing a marketing professional. They then ask a well meaning, enthusiastic, member of the team - with no marketing experience - to manage external agencies. The result is an unclear brief which constantly changes while the creative agency works hard to try to deliver value. The information is often passed to the agency in a format - in Publisher for example - which is very time consuming for an agency to extract into their professional systems. The final outcome often costs a lot more than was necessary.

The Solution
If you cannot write a clear brief and format information with clarity - so that your agency can deliver effectively for you, then use a part-time professional marketer to manage your marketing. The extra expense will be saved time and time again when your sub-contract providers are able to work to your real requirements and to deliver work that reinforces your brand and meets your objectives. Simples!

Missing the Marketing Opportunity

Looking at the BBC web site business pages today, my attention was drawn to an article on Compass Group and the fact that their annual profits have been boosted by cost cuts. It seemed like an excellent financial performance and I was curious to see if there was a more detailed press release on the Compass Web Site to explain their cost cutting strategy - in particular, I wanted to know how their cost cutting had been managed to ensure longer term profit growth. As we all know, it is very easy to cut costs in the short term to deliver an instant fix in the form of a profit boost. It is much harder to develop and implement a long term cost reduction strategy that is part of a wider plan to grow profitability in future years.

I was disappointed. The most recent press release on that I could find on the Compass Group UK web site was dated 22nd September and was an announcement that from October all their fresh beef will be sourced from Britain (I assume their frozen and processed beef will continue to be sourced from multiple countries - especially as the notes to editors includes a reference to the ration of fresh to frozen beef).

In marketing and brand building terms, and especially in an industry which is targeting strategic outsourcing deals, they have missed a trick. It is imperative that marketing messages are consistent and consistently applied throughout an organisation. And that includes publishing links to important financial announcements on local operating company web-sites. The group web-site has all the financials - but I had to go back to Google to find it.

In your own business, it would pay you to create a simple check list. That way, when you publish something opportunistic, you can double check for consistency across all media forms.
Now, before I hit "Publish", I had better check www.results-zone.com for consistency with this Blog posting!

Customer Delight and Differentiation

We are all constantly looking for new ways to differentiate our offering. Where most of us struggle is in trying to work out where to look for sources of differentiation that matter to our customers. And here's the thing - if your customer does not care about your new three part, chromium plated reverse flange widget and its benefits, you have wasted loads of time, effort and money.

So what now? Try asking some customers about things you care about in your products and services. Ask your customers two simple questions for each of the benefits you are investigating:

1. Rate your satisfaction if the product/ service has this feature to deliver that benefit?; and
2. Rate your satisfaction if the product did not have this feature to deliver that benefit?

Ask them to answer in one of four ways:

A) Happy;
B) Neutral (This is normal);
C) Unhappy;
D) Don’t care.

Answers - my thoughts:

• Neutral to 1 & Unhappy to 2 is a basic, taken for granted feature. Omit this to your cost.
• Don't care to 1 & to 2 - not worth the investment
• Neutral to 2 and Happy to 1 - these have the potential to create differentiation - partly because your customer did not know these were needed until they were seen.
• Happy to 1 and Unhappy to 2 - these are good things to include but are unlikely to be sources of differentiation.

For a lot more cogent information on this topic, try researching the Kano Model - there is a lot on the web and it will help you to make a difference to your offer.

Good luck!

Dig For Detail - Summarise for Action

Smart businesses regularly canvass information from their customers. Some do this as part of the account management process; others conduct a formal customer survey. You need to decide which option, or combination of options, works best for your business.

Going Formal? – Then Construct a Questionnaire

• Keep your questions simple.
• Aim to keep the questions constant – so that you can compare results over time.
• Make sure that you capture numeric information – but keep the scale to an even number so that people have to decide.
• Make sure you allow space for verbatim comments. This gives two benefits:
  - People get a chance to give you the details behind their scoring so that you get a chance to fix problems.
  - When people give you compliments, the testimonial is written already – all you need is permission to publish.
• Select a technology that is appropriate to your customers – paper or email based forms still work well. Online surveys are great for some customer groups.

Conduct the survey

• Give your customers time to respond and, if you are running a semi-annual or annual survey, issue gentle reminders.
• Consider a prize draw as an incentive to respond – you know your customers best.
• Remember, the response rate is in itself a customer comment!

Summarise the Results

• Tabulate the findings. Plot graphs of the numbers.
• Look for similarities and differences between customer types

Dig-For-Detail

• Review the results and try to understand what lies underneath the feedback you are getting.
• A team meeting could make great sense at this point.
• Go back to customers and ask for more details if required:
• If they are unhappy, it shows that you care.
• If they are happy, you can thank them for their feedback and ask permission to use it in a testimonial.

Summarise the Review

• Identify the root causes of any deficiencies.
• Create an action plan to rectify failings.
• If everything is really positive – go for the PR.

Repeat the Survey – when appropriate

• Look for trends.
• Confirm that your actions have been effective.

Plan, Focus, Results

Busy people often struggle to be effective. Their energy and drive works against them because they attempt to solve every issue by working harder. By working longer hours. In the extreme, their energy and drive conspire to make them ineffective.

Plan
Smart people plan their time and mentor their team to plan effectively. By planning effectively, people find it easier to avoid the distraction trap and to focus their time on the tasks and initiatives which are aligned to the business goals. The creation of an effective operating plan, which is derived from a complete and honest strategic plan which, in turn, is aligned to the business vision and goals is a straightforward task that many intelligent senior managers and directors manage to avoid. With an effective plan, it becomes possible to focus limited resources on to the highest priority tasks and to ensure that the scarcest resources are being managed to deliver maximum effect.

Focus
The management art of keeping the team on track. Focus will ensure that people are working on the agreed priorities so that there are no surprises at the review meetings. The objectivity which is required to ensure that the review process works properly can on occasions be elusive. This is especially true if the focus is allowed to shift from facts and data (usually the basis of the plan you spent so much time writing and agreeing) to the emotions and opinions that arise from assumption and a complete lack of detachment.

Results
If you create a realistic and complete plan and then focus your team on working to that plan, the results will follow.

Objective Review
If you struggle to create a review process which includes the objectivity and detachment from the day-to-day struggle, consider hiring an external advisor. It may cost a lot less than you expect to engage a non-executive director (or business manager if you prefer) who is able to help the whole team to focus on the data. Hire the right help, and you will see the improvement in the performance of the management team in a number of areas.

Communication Breakdown

People make assumptions.
We all know we should not do it, but we keep on making them.
Consider the mathematical relationship:
Probability of misunderstanding leading to upset is =f(Number of people involved x history x complexity x change) x assumptions made.

In other words, the more people who are involved in “the issue” or the “event”, the longer it has been established (as a habit, tradition, pattern of events or as an event in itself), and the more complicated it is, the more greater the likelihood that people will make assumptions about some aspect. And the more chance there is of that combination leading to some misunderstanding and upset.

Misunderstandings and upset people always take longer to resolve than the few extra minutes that avoiding the problem in the first place would have taken.

When some change is involved, then there is an even greater chance that somebody will become upset – often because they hear something unfounded or assumed and proceed directly to righteous indignation without pausing at “check for facts”.

Suggestions

• Brief everybody – together
• Ask for questions
• Talk to people one to one – so that they do not have an audience and are more likely to raise concerns
• Check and double check that everybody has the same understanding of the “changes”
• If you are new to the team, ask people about the history – you do not need to know all the gory details, but it might be helpful to ask about who has been involved in your “Event” in the past.

The Right Plan

How do you know if you are working to the right plan? In 1977, when the government of the time recruited Michael Edwardes to run British Leyland, BL was trying to implement the wrong plan. The Ryder report had led them down the path of brand unification and the ultimate abandonment of the traditional BL brands (Rover, Triumph etc). The mistake that had been made was to create a plan based on operational expediency rather than building on the existing strengths of the organisation.

Planning Pitfalls

• Rushed, incomplete or over-optimistic (dishonest?) SWOT analysis
• Unbalanced business goals
• Failing to take a proper account of the past
• Becoming wedded to past glories
• Ignoring the wider business environment (political, economic, social, technological etc)
• Sales targets plucked out of the ether.

Best Practice

• Use a proven process to create your plan
• Test your plan - conduct a sensitivity analysis on the numbers; Talk to your sales channels; Talk to key customers; Talk to other stakeholders
• Reflect on the big changes
• Get objective input - Accountant; Adviser; Analyst

Further reading:

• "Back from the Brink" by Michael Edwardes, published Collins 1983 (ISBN 0002170744)

Have You Allowed Empires to Prosper?

In today's climate, I am sure that the instant answer should be an emphatic "NO". None of us would admit to supporting "Empire Builders". So have you looked around your organisation? Really looked? Are there parts of your organisation where team size is a power metric? You may even be fostering this by the way in which you select members of the management team for new initiatives.

Are there departments with a few too many people? Perhaps in operational areas where costs are scrutinised but as long as margins are in line with the annual operating plan (or budget) nobody looks too closely.

If your annual operating plan is based on past years performance with the simple factor of "10% better than last year" applied, you may well have cost inflation creeping in. It is worth-while checking to make sure.

If head-count reduction is an option and you are targeting areas outside those where traditional methods may lead to dodgy decisions being made, how do you go about making sure that your business is as lean as practicable whilst still being capable of delivering to plan?

There are a number of approaches that have been proven to work. There are also a number of pitfalls.

Crude time and motion studies can be extremely damaging to morale and to productivity. I learnt today of a large global organisation who has employed a renowned consulting firm to help with a cost reduction project. Very bright people are being ticked off with cartoon glum faces if a task takes too long. To make matters worse, the renowned consulting firm has deployed people with a tinge of acne to implement the project. Morale is falling. The only good news is that the one-off costs of the project are being reduced by the deserters who are taking matters into their own hands. These are probably the people who are crucial to the next phase of the plan but being the brightest and best are the most employable by others.

So what can you do?

Option 1: Take two people who know the process concerned and to task them with a series of projects (A detached person may be required to act as a catalyst):

1. Document existing processes
2. Re-engineer the processes to remove duplication and waste
3. Re-design the organisation to match the new processes
4. Roll out the new processes and organisational structure
5. Run the mini-project teams which add the detail to the new processes

Option 2: Go looking for a benchmark organisation and then to take the best ideas for processes and apply them to your own firm. Again, some degree of detachment is helpful to minimise the impact of "Not Invented Here".

Option 3: A combination of 1 and 2 has been known to work well in my own experience.

Conclusion

It always pays to take stock - to ensure that your delegation has not been allowed to become abdication. It also pays to do plenty of research. Networking events and sales meetings can be great sources of anecdotes and information which you can then use to stimulate your theoretical research. You could always engage an interim project manager for your change project - there are many people available today with real experience of successful change programmes.

The Plan

I have recently read "Back from the Brink" by Michael Edwardes. It is a fascinating insight into the problems faced by BL in the late 1970's and the turn-round that was achieved. Hindsight is a wonderful thing and reading this knowing that all that work was to end in failure was rather sobering. However, it remains a classic lesson in:

1. Make sure you have the right plan for the right reasons;
2. Make sure that your plan is complete and fully bought into throughout the organisation. Deal with dissent (the chapter on Derek Robinson - "red robbo" is fascinating!);
3. Implement your plan with passion and efficiency.

PS: When was the last time you saw an Austin Montego on the road?

Stay With It

Many of the initiatives that we use in business take time to become effective. This is most often true in Sales and Marketing. It is imperative that we put measures in place and then keep things running. Nothing is more destructive in business than starting two new initiatives each day and then abandoning them.

Remember the post on consistency? A large part of the consistency in our businesses derives from taking an objective approach to planning and then staying with the new initiatives. That does not mean that we ever ignore failure. It does mean that you must establish appropriate measures of success and then be in a position to refine and tune initiatives.

In other words:

• Plan
• Prepare
• Act
• Measure
• Refine
• Persist
• Have a plan to control cost and time - so that you can cut your losses if you need to.

Health warning: If an initiative is costing a lot of time or money, it is vital that all the risks are identified and controls established to ensure that precious resources are not wasted. It pays to test, refine, test and refine and test again.

Refine

In a recent post, I blogged about consistency. One common misconception is that consistency means staying the same or is an excuse for never changing. On the contrary. Consistency is vital. Consistent refinement of your proposition is also vital. Staying true to the messages you have already communicated to the market whilst refining the message and the offer to take account of the changes in your customers and prospects.

Your offer to your market should be constantly reviewed. You must take soundings from customers and prospects as well as from people who choose not to spend money with you. Use the insight that you gain from this process to refine details of your value proposition and to ensure that you stay ahead.

You already have a process to ensure that you gather insight from customers? Take that insight that you already gather and make it work for your proposition. Check that you have updated your offer to take account of the continuous learning that your customers and prospects will be undertaking - just from working with you already. Make a conscious effort to refine your products and services when the time is right.

If you are channelling your sales efforts in a new direction, are you using standard products or have you customised the offer in some way to better meet the needs of your new target customer?

Consistency is all

In your marketing messages and brand values, are you consistent, or do you keep changing details?

To be recognised and valued by your target audience you have to maintain consistency in your marketing messages. The down-sides of inconsistency are:
People have short memories, so they forget things quickly. But they spot inconsistency and hold it against you.
People have short memories and need to be continually reminded of things. If you are constantly changing elements of your proposition, all that communication turns into a blur.

Look at the brands, products and services that you value in your business and your life. How often do the strong and successful change the headlines of their marketing message?

• BMW
• Nike
• HSBC

Now look at your own marketing messages and build your message foundation on something you can live with for some time.

Structure

How structured are you in your approach to business? Do you routinely work through a list of review points to make sure that the basics are being kept on track? Most of us would answer yes to these questions - because we believe that we are structured and disciplined.

Ask yourself the following questions:

• What is my current cash position?
• What is my cash-flow forecast for the next 3 months?
• What was my sales performance in the past month?
• What is my sales forecast for the next 3 months?
• How well did my business perform in meeting its customer promises last month?

If you can easily answer these (and similar) questions with information you have in your head or have readily to hand, then you may have some justification in claiming to have a structured approach to your business. If you cannot answer at least four from five easily, you may be in danger of losing control of the key metrics in your business.

If all this is just too much to worry about, then engaging a business performance manager for one day per month could be a sound investment.

Who Holds You to Account

One of the most common failings of Owner-Managers is failing to see things through. The problem is that there is nobody to hold them to account. In their past, Corporate, life they may have had a boss who managed their delivery. One of the reasons that they set up in business on their own was to escape from the boss. The problem is that they not only escaped from all the negative things that come with a boss. They also escaped from all the positives too. Now there is nobody (with the possible exception of the bank manager) to make sure that things get finished. Running a business can be lonely and difficult. Are you making sure that you are accountable to somebody? Yourself, your partner or some respected individual who helps you to retain a perspective and keeps on reminding you about the important initiatives that found their way on to pages three and four of the to-do list.

Consider hiring a non-Exec. chairman (or interim business manager if you prefer) who will help you to see things through to completion.

Actions speak louder than words

Have you ever looked at the real differences between successful entrepreneurs and the rest of us?

The answer lies in action. You may have great ideas and wonderful abilities, but if you fail to act on them - you will not prosper.

So what are you going to DO differently this week?

You might start with your three best ideas and start creating the action plans for each. Then plan at least half a day to make a start on each. If you spend this time AND check off some complete actions, you can start to feel that you are making progress.

Plan then act on that plan then review, refine and re-plan. Then take massive action. You may just start to make some progress towards your goals.

Stay Fresh

Does the world seem to be against you? Is your motivation flagging? What are you going to do to get back in the zone and to re-energise yourself?
You could start by going back to your goals.
In one year from now:

Where do you want to be?

• What does your business look like?
• What is your own role in your business?
• What changes made the difference?

What is the step-by-step plan to creating your vision?

So, what are you going to do differently today?

Seems easy? Sorry, it is still hard work, but you need a purpose, a goal and a vision before you can re-motivate yourself.

Take off the blinkers

Spending a day in a school this week - helping Leicester Education Business Company with a Lion's Lair event - was truly enlightening. How often have you (or somebody in your firm) used knowledge and experience to kill a potentially great idea? The mantras of idea killing:

• Yes, but
• That will never work
• We tried that once
• You will never get that past the (board, customer, bank, boss - delete as appropriate)

What would happen if you applied the mind of an enthusiast to that idea and asked instead:

• How do we make it work?
• What do we need to do differently to ensure success?
• Where are the obstacles, and how do we remove them for long enough to allow the idea to flourish?

So, next time a great idea is in danger of being stubbed out on the carpet of experience - NURTURE IT.

Systems and Procedures

Many businesses fall into the trap of failing to deliver effectively because they are inconsistent in some element of their business. When any process involves more than a couple of steps, most people “train” the person to perform the task and then monitor performance (although some do not even monitor performance).

They could improve performance substantially, for a very small change, by documenting the steps in a work instruction or procedure.

• These are not enormous sterile documents created in a language that only the author understands.
• They are simple check lists or step by step instructions that the person performing the task, once trained properly, can use to make sure that nothing gets missed and nothing is inconsistent.

Better still, display them so that everybody can easily refer to them and follow the steps.

Authority

At a local Chamber of Commerce meeting recently, a solicitor was making an excellent point. The thing that really struck me was the measured and carefully paced presentation. He made sure that we all regarded him as The Authority on that topic. It made me think about my own presentation style and the way my confidence and authority affect the people I am dealing with.

Who would you rather deal with if you were choosing an "expert":

• The person who mumbles and fails to make eye-contact whilst they are speaking?
• The confident individual who answers your questions succinctly and without ambiguity?

Do you make sure that your style of speaking to prospects fills them with confidence?

A warning: Do not ever over-sell or misrepresent yourself - that is the path to poor reputation and unhappiness.

Management Discipline

Many business owners have had successful careers in Corporate life. They are attracted to the freedom which comes from being in control of their own destiny. Sadly, too many take this to the extreme of ignoring all the good practice that they learnt in their Corporate past. They start to regard some of these disciplines as "only necessary for the Corporate Slaves".

The bad news:
Most Corporate review processes are part of the sensible disciplines of running a business.

The good news:
It is easy to create your own review process. All you need is a schedule of times when you review (and ACT upon) the information you should be gathering already in your business. The following list will get you started:

• Cash flow: Creditors; Debtors; Forecast;
• Sales: Forecast; Review plans;
• Marketing: Leads; Campaign effectiveness
• Price
• Operations: Delivery quality; On time; Customer feedback

Learn to ignore trivia

It is so easy to get bogged down with trivia - both in life and in business. When you find yourself spending huge amounts of time on topics that make little difference to your business success, you need to evaluate them in accordance with some simple tests:

• Will this matter in 12 months time?
• Will my business suffer if I fail to sort this out now?
• Will my ability to win new customers be damaged if I fail to sort this out in the next week or so?
• Should somebody else fix this - if only I would let them?

If all else fails, try changing your approach to problems - or read a smashing little book:

• Richard Carlson, Don't Sweat the Small Stuff... and it's all small stuff, Hyperion, ISBN 0-7868-8185-2

Seek and You Shall Find

Sat in your office waiting for the telephone to ring?

Or, out and about regularly, meeting people, networking and looking for opportunities?

Guess which option is most likely to lead to growth?

Too many businesses have decided that the economy is against them and that their sales will fall. Those companies have declining sales. Others have re-set their proposition and come out fighting. Some of these more aggressive firms are having a great 2009. Others are standing still. Some might be having a worse year than 2008. But all of them are a lot better off than businesses who have done nothing.

Which are you?

Price is a weapon

I continually listen to business owners telling me that they are being beaten on price. The bad news is that when they lose on price, they may well have lost the sale at the start of the sales cycle - when they failed to sell the problem effectively to their prospect. If that was several months ago, then they and their sales team have just wasted several months.

Are your sales team guilty of filling in the lost business analysis sheets with:
"Lost to Competitor-Y on price" in almost every box?
Have you looked at your sales process and the way your team conduct their discovery meetings?

Remember, when you start reducing prices instead of selling value, you are on a slippery slope. You must understand the value points your customers look for and make sure that your sales process presents your value to your prospects correctly.