Category Archives: Growth Consulting

Business “Bracketology”

With the conference basketball tournaments in full swing, and the NCAA about to begin, hype about what teams will make it and which ones will stay home abounds. Not only do sport networks go into hyper-drive as “March Madness” begins, but the enthusiasm spreads to water cooler conversations, lunchroom TVs, frequent score checking on smart phones and computer screens, and office “pools” where real money can be made with a small entry fee.

The schedule for the 68-team tournament is depicted in the form of a master bracket, with four regional brackets that produce winners through single elimination games who eventually play one another in the Final Four and, ultimately, the two team national championship game. (Sorry for the details, but they are pertinent to the business world as will be discussed below.) The projections as to which teams will make the tournament, and their “seeding” (#1-16 in each region, with a four team play-in “First Four”) has been described as the “bracketology” process. Prognosticators great and small try to anticipate who will be selected for the tournament, who will make the Final Four, etc.

In the business world, companies develop marketing strategies that result in targeted prospects, hopeful “finalists,” and “winners.” It can be argued that the process of identifying prospects, analyzing the likelihood that they will matriculate through a given business development process, and ultimately become customers is strenuous in top sales organizations, yet chaotic in others. What type of approach does your organization take?

Are you a part of a company that waits for the phone to ring from random sources, or do you target those from whom you’d like receive new business? Adding intentionality to the mix can yield championship caliber results. Some things to consider:

  • Prepare a list of your best customers
  • Pull your team together and think about what makes them best
  • Brainstorm about other companies that are similar to your “best” list
  • Use databases to help you flesh the lists out
  • Incorporate the principal of six degrees of separation to determine who knows whom inside the target companies
  • LinkedIn may be helpful in building the relationship bridges
  • Analyze commonalities among subgroups of the list and build marketing plans for each subgroup
  • Assess performance against plan and determine how to increase the number of prospects that become customers

Hopefully, your bracketology will be more accurate than the NCAA prediction process!

 

Cultural Due Diligence Breeds Success(ion)

In a blog post (“The Human Side of Due Diligence”) of October 2011, Michael Bittle talks about the challenge of sizing up a company’s culture in the midst of a private equity transaction. Even if your team is savvy in its financial analysis, interviews customers and executives, and puts together airtight LOIs, he argues, you can miss the important undercurrents that are culture.  Too many companies are dressed up for a suitor, only to prove to look to good to be true.

A recurring drama plays out wherein performance swoons, key managers leave, and morale sinks as well. The investors scratch their heads and wonder what has happened. Enter the concept of the informal culture–what values, unspoken agreements, collaborative tendencies, etc existed prior to the transaction. Bittle argues that, in the heat of getting a deal done, that the quant jockeys often have neither the time nor the training to be extra discerning about these nuances than can be a company’s undoing.

In the Research Triangle Park, we are developing a national reputation for angel or venture-backed technology and life science start-ups that all aspire to make their commercialized product/service a household name. Along the way, they receive outside investment and some matriculate to a successful revenue path that ultimately leads to a liquidity event. Very few take an approach wherein the founders want to stay with the company as it matures. This can be good and bad. In the cases where the founder brought an academic mindset to enterprise, it is often better that professional management run the company longer term.  On the positive side, emotional bonds are built between employees 1, 2, 3 …and #50, #100, etc. These bonds create stability, a sense of community that can be disrupted by the introduction of outside ownership/management.

George Bradt, in an article in Forbes on February 8, “Corporate Culture: The Only Truly Sustainable Competitive Advantage,” takes the position that competitors, given time and money, can duplicate almost anything except culture. “In sustainable, winning cultures, behaviors (the way we do things here) are inextricably linked to relationships, informed by attitudes, built on a rock-solid base of values, and completely appropriate for the environment in which the organization chooses to operate.”

Organizational development principles can be brought to bear in the due diligence process if the consultant focuses on soft issues rather than concrete, easily measured ones. Whether an EQ assessment is administered to managers, or some type of DISC or MBTI with their direct reports, it can be helpful to understand who is the backbone of the company and how they may behave/make decisions. Transparency can drive smooth transitions if the former owners/executive team is willing to give the private equity/acquiring company access to employees earlier in the process. If people are made aware of the potential transaction and given an opportunity to design their own future, they are more likely to be/remain engaged in positive behaviors and outcomes.

Eventually, the first generation leadership will have to give way to new leaders, even if there is no transaction. The succession is more likely to be successful if the culture is aligned with the company direction through thoughtful interaction with employees and casting vision for how their contributions will continue to be needed. Such best practices are more likely to reinforce trust and a desire to build something great together.

Senior Night & Going Away Parties

If you are the type person who enjoys college sports, chances are high that you have witnessed a few senior days/nights during your cheering. Those who are finishing out their intercollegiate athletic careers are celebrated, given a chance to be the star, and walk out of the gym/off the field with their heads held high, regardless the outcome. In like fashion, in the business world, we often have going away parties for those moving on to new opportunities.

WHY do we have parties when someone who has been a part of our organization decides that somewhere else will make him/her happier? Unless, as may be the case, you plan to follow the departing, your reaction ought to be one of introspection. What part of the culture where you work is needing improvement so that employee engagement and retention are raised high enough that people wouldn’t think about going anywhere else?

so happy for YOU!

Recently, I had the opportunity to listen to a conference speaker (Michael Lorsch) speak about the need for organizations to be both smart and healthy. Smart is the category where most managers and employees live: services/products, strategy, marketing, finance/operations, and technology. Healthy, however, is characterized by those “soft & fuzzy” difference makers that constitute an organization’s DNA (culture): minimal politics, high morale, high productivity, minimal confusion, and low turnover. So….an organization wherein people would rather leave than stay in not healthy and, therefore, not likely to be as successful in the long run as one that is emotionally healthy.

In order to build health and overcome dysfunction, Pat Lencioni (Lorsch’s boss) recommends five roles for leaders:

  • go first to build trust
  • mine for conflict
  • force clarity & closure
  • confront difficult issues, and
  • focus on collective outcomes

Why not change your culture and make a HUGE deal about new employees? Become more engaging. Mourn when others leave and figure out why so you can work on the business instead of in it!

Content With No Content

Does your professional services firm have a strategy to produce, distribute and repurpose content for multiple market segments? If it does, you are in the minority. Best practices are to create and disseminate content to enhance search engine rankings. Philosophically, billable professionals have insights to share and there are numerous venues for thought leadership to be established. The fact of the matter is, sadly, that the professionals simply are not easily engaged to sit down and generate the content.

The almighty billable hour, the internal metrics, and the likelihood that most would prefer to do the work than to write about it, are all reasons one may choose not to blog, write articles or white papers, or post updates ad tweets. Simply put, very few firms have much experience creating an environment that acknowledges and rewards contributions to thought leadership that do not produce an immediate return. Performance measurement and incentive compensation practices will need to be revised in order to encourage content production as a preferred behavior within the daily, weekly, etc schedule.

If, like other forms of outsourcing, the firm were to contract with a contractor to produce content on behalf of the billable professionals, it would most likely lack the technical acumen and personal passion necessary to be an intriguing, gripping read. However, contract content editors may be a very good idea. Either a staff person or outsider could help to determine themes, subjects, and nuances that would make the content more readable in layman terminology.

Revise & Refine

 

Become discontent with unsatisfactory content–both in terms of volume and quality. Find ways to change the corporate culture to celebrate the content revolution. Articulate the increased stature and visibility that authors enjoy. Recruit firm leaders to demonstrate their personal commitment to writing–even when it produces no immediate revenues. Finally, make writing an assignment. Section/niche leaders should have a scheduled slot for covering their “beats.” Those aspiring to become partners can demonstrate their drive by taking on writing responsibilities. With content editors, these activities can be managed to successfully produce great content, repurpose it for other social media uses, and promote firm expertise.

Ambiguous Marketing Budgets lead to… ambiguous results

Have you ever heard the rant of a financial executive who is fuming because marketing ROI is so hard to define? The lament is usually that “branding” is not enough–that some quantifiable return is desired, but no one really pins it down. Some argue that revenues are the only true barometer. Others feel that smaller yardsticks are better–number of new clients, number of proposals made, number of inbound calls, etc. But…what about % of proposals won, % change in inbound calls, etc to provide comparative data?

Yet…”return” still has to be measured in comparison to investment. In many cases, the investment amount is, to quote Churchill, “a riddle, wrapped in a mystery, inside an enigma.” Why is this so? In many privately owned businesses, it is because marketing dollars are enshrouded in expense reimbursements, dues and sponsorships. Actual agency costs, advertising spend, etc are sometimes separate line items on the income statement, but are often rolled up into an aggregate. In order to have credibility with the financial (& equity) folks, we as marketers need to ask for more detail. It is in our best interests to know travel & entertainment, training, and similar expenses that are charged by managers/executives and reimbursed but not clearly demarcated as marketing costs. However, because we are not considered part of the brain trust, we can be excluded from such conversations/communications.

What's Your Measurement?

 

Once we are able to acquire access to the true marketing financials, we can perform an ROI analysis more effectively. (I prefer to describe this as an “ROM.”) Then, tradeoffs can be evaluated. There may be some in the organization who are unwise in their expense management to the point that allowing them to ring up reimbursable costs is not an investment at all, but a distraction from effective, accountable marketing.

Having the frank conversation with the top financial executive/business owner(s) can set the stage for your voice to gain credibility. No longer may you be perceived as the “soft and fuzzy” management team member, but rather a strategic contributor to business performance. If you are savvy enough to learn what your industry standards are for marketing as a percentage of costs/revenues, then you can help set the budget requisite to drive growth and carve out better market share.

As the marketing budget becomes a management accountability tool, results are easier to predict. Sensitivity analysis can then yield insights into the levers that drive revenue performance. Congratulations–you are then on your way to concrete rather than ambiguous conversations and may soon find that the frustration of not being heard begins to fade away…!