Tag Archives: competitive advantage

Culture: Key to Performance

Recently, I had the opportunity to address a group of HR leaders on how to improve decision-making within their organizations. (Thank you RWHRMA, Masters Series participants!) The premise of our time together was that better decision-making translates into superior performance and that there are definite ways to improve the quality of decisions. Most of our workshop was used to define the components and use of emotional intelligence (EQ). In order for employees–and managers/executives–to consistently exhibit high EQ, valuing and engaging others is a key.

A focus on others and their needs is a result of purposeful culture development. Paul Spiegelman, founder and CEO of The Beryl Companies, writing for Inc. on June 6, described Beryl’s “10 Cs of Culture:” 

1. Core Values

..when we implemented our values strategy at Beryl about 10 years ago, I began to see how they guided everyday decision-making and how employees referenced them in meetings.  I came to realize they are essential guideposts when developed, communicated, and executed in a consistent manner…We start every big meeting with a conversation about values and tell stories about how our coworkers live by those values on a daily basis.  

2. Camaraderie 

It’s about getting to know colleagues not just as colleagues, but what they’re like outside the office.  To do that, Beryl hosts dress-up days, parties, games, and events all the time..We include not only employees, but also their families.  We publish a bi-monthly full-color magazine called Beryl Life that is sent to the homes of co-workers.  

3. Celebrations 

You can’t underestimate the importance of recognizing your team..we developed a program we call PRIDE (Peers Recognizing Individual Deeds of Excellence).  This allows coworkers to recognize others for living up to Beryl’s core values.  

4. Community

Part of the fabric of a successful company culture is connecting with and giving back to the local community.  

5. Communication

I hold quarterly Town Hall meetings, which includes six meetings over two days..I also have informal “chat and chews” where I bring in lunch for 12 to 15 people and just ask one question–How’s it going?–to get the conversation started.  

6. Caring

Show your employees you genuinely care about them in the totality of their lives..Any manager can explain a situation on an internal website that identifies a coworker, and lists what’s going on (birth, death, injury, wedding, among other things).  That submission generates an email to me that is my trigger to send a personal notecard, make a phone call, or visit someone in a hospital.  

7. Commitment to Learning

Show your employees you’re committed to their professional growth. This can be done in small, incremental steps. 

8. Consistency

Culture is based on traditions..One-time efforts to improve the culture will feel disingenuous.  

9. Connect

Don’t isolate yourself at the top.  Connect with people at all levels of your company.  Get out of your comfort zone.  

10. Chronicles

Does everyone in your organization know how the company started?  Do they know the personal stories of the founders and what led them to build a sustainable business?  People want to know they are part of something special and unique.  

Do you get the feel that, at Beryl, you could fit in and feel engaged in the key conversation(s) that contribute to its success? What about your company? Do you have a culture that is engaging? If not, what can you do about it? What’s holding you back? Talk with your peers and come up with a plan, then implement it!

Only Superheroes Make Tough Sales

Whether you are in the process of launching a business or have been at it a while, one of the things that is an important factor in your success is the ability to covert sales leads. The more prestigious the prospect, the more pressure we feel to say just the right thing and win the other party over. But…sometimes the meeting doesn’t go as planned and you feel the opportunity slipping away. 

Greg Digneo, the author of the blog Sales Leads in Thirty Days, recommends that, in order to become better at converting these opportunities consistently, you become a superhero. Surely you have seen the resurgence in movies about superheros of late. Why is that? Because we all want to believe that things will turn out rosy if we just had some hidden power that gave us an advantage. Just like Batman, or any other, superhero, you want to be able to save the prospect who is in distress from this situation and deliver them to the safety you can uniquely provide. How? Digneo recommends in an article that you find a superpower:

What’s Your Super Power?

I used to run a marketing agency where we helped B2B companies generate online sales leads in thirty days. Promising to get clients sales leads in thirty days is such a bold claim that it subjected me to a large helping of cynicism. That’s when I morphed from a mild-mannered marketing consultant into a superhero.

Here’s how it went down:

The prospect would be disengaged and skeptical. Then I would say: “I know you think what I’m proposing is impossible, but if I can get you sales leads by the end of this week, would you consider hiring us?” The prospect never believed we’d come through, so they usually answered “yes.” At the end of the week, when we had gotten the prospect sales leads, they were so impressed that hiring us became a no-brainer.

And you can do the exact same thing in your business!

The process to becoming a superhero, according to Digneo, requires the following 4 steps:

  1. Find the Ideal Prospect
  2. Identify the Problem
  3. Unleash Your Superpower
  4. Make the Sale

To find your ideal prospect, he recommends that you ask yourself three questions:

  1. Do you know who you want to work with?
  2. Do they need your services?
  3. Can they afford to pay you?

Only if you can answer “yes” to these three questions can you move on to the next step.

In order to identify the problem, one most overcome the objection to spend money with you. However, every prospect has a problem you can help them solve. Using consultative listening skills and asking poignant questions, you can develop a good understanding of the nature of the problem, what has been tried to resolve it, and how much a solution may be worth. 

Your “phone booth” trick is your ability to solve what confounds the prospective customer. Think up several ways you can demonstrate impact/success for your prospect. Digneo offers two examples–If you have a book keeping service, you know your prospect wants help with cash flow management. Or, your heroic deed may be that you show the prospect how they can source parts cheaper, making an immediate impact on their bottom line. Find a way to be wonderful!

Making sales becomes much easier once we have established credibility and respect. Promising, then delivering on what it takes to solve problems sets the table for sales.

Execute The Idea

Many businesses start these days by vetting a good idea in front of an audience. We present at conferences, competitions, and events like the IdeaSlam at Cary Innovation Center. For some, the whole process of deciding what idea to pursue can be daunting. (The director of a small business center at a local community college who has been asked to tell an inquirer what kind of business to start validates this fact.) Those who never start a business, but envy those who do, will say that they could have been rich if only they had thought of a concept first. Whichever category above fits you, know this: the initial idea is not the key to success–execution is!

Herein lies the “rub” — that many entrepreneurs expend enormous amounts of energy, financial capital, and (often) human capital in an effort to make an idea work that needs to be rethought. Frequently, we call in favors and have been know to burn bridges in the headlong pursuit of our personal holy grail. Emotionally, it is easy to become consumed with the idea to the point that we are blinded to any and every other thing around us–even important things! Along with the emotional “sunk cost,” we often lose our objectivity because of the amount of money invested in the initial idea.

Far more important is a rock-solid business model that creates value for a customer, especially relative to existing solutions. When the business model is battle tested through the incubation process, it becomes invincible. Very few businesses end up creating billions of dollars of value based on the initial idea – superstars such as Facebook, Apple, and Microsoft changed their business models many times before settling on a scalable solution.

-Karl Stark & Bill Stewart

Stark & Stewart go on to say that too many folks are afraid to share their idea with others for fear it will be stolen/copied. They are quick to point out that the true value lies “not in the idea, but in the execution.” Their approach is to share the idea broadly enough with others with different points of view, more experience, and who can offer healthy skepticism that will help you to re-work the idea. It is the supreme compliment to have your idea “stolen.” But, fear not–you still win the competition with superior execution. Three tips they offer for improving execution:

1. Stop perfecting the idea, and get out in front of customers.

The business you develop through a test and learn approach will be worth multiple times more than your original idea.

2. Don’t focus on things that don’t exist.

Instead, look at existing solutions and figure out ways to create more customer value than what those solutions offer.

3. Positively differentiate yourself from the competition.

Most products can’t be all things to all people. A differentiated product will attract a segment of customers that value different things. An innovative start-up is almost always advantaged when chipping away at a market leader if they can offer something different that appeals to a small group of customers.

What is needed, in the final analysis, is a process to create value. One process that I’ve observed to work is the Six Steps to Success program being used with mentees of EntreDot:

  • Ideation – Determine if the idea has any commercial merit
  • Conceptualization – Complete the concept development and determine market value
  • Creation – Perform R&D and establish proof of concept
  • Evaluation – Complete the business plan and determine business value
  • Preparation – Prepare the launch plan for the business
  • Commercialization –  Commence business operations

As the business owner goes through the steps, sustainable customer and shareholder value is created. When the process is “complete,” it is, in fact, just beginning as entrepreneurs are encouraged to go back to the drawing board with the next idea. The commitment to executing idea after idea creates a strong market position that is hard to duplicate.

Refuse to Lose (Investors’ Money)

Clarence Wooten, who sold his start-up Image Cafe to Verisign 7 months after founding for $23 million, told an audience at MIT/Sloan recently that there are keys to the entrepreneurial mindset. Barb Darrow with GigaOm summarized his comments into 12 lessons:

  1. Paycheck is an addiction. Not unlike crack cocaine. Entrepreneurs have to break that addiction to build an asset that will pay off long-term, not in a weekly paycheck.
  2. Beware of naysayers. Because 99 percent of this country works for the 1 percent, they  have risk-averse employee mentalities. Don’t listen to them.
  3. Just do it. Be like Nike. There is no roadmap. If you don’t do it, it won’t get done. Work lean. Corporate people are used to resources — HR departments, assistants but entrepreneurs do it on their own.
  4. Fail fast, fail cheap. You will fail a lot because you’ll need to try a lot things. So do that on the cheap. Instagram’s first product  – Brbn — failed but they distilled that app to its bare essence and it caught fire.
  5. Partner pitfalls. It’s scary to be out there alone. You want someone to share the ups and downs. Often one partner will work harder than the other but share the same upside. Share the downside as well and don’t necessarily split equity equally. Set up reverse vesting:  When you issue founder’s stock, make sure it vests in case someone leaves they don’t leave with all equity just with what has vested.
  6. Be naïve. Unlearn what you learned in corporate America about hierarchy. Being naive means being ballsy. Facebook turned down a $1 billion offer from Google and people thought Zuckerberg was crazy. He wasn’t but he may have been naive. That paid off pretty well.
  7. Business is a team sport. Would you rather own 100 percent of a $1 million-a-year business or 20 percent of a $100 million-a-year business? Everyone needs equity. You need as much brainpower as possible.
  8. Challenge your comfort zone. I knew I had to put myself out there speaking in public. I wasn’t comfortable with it but I did it.
  9. Image matters. People judge you when you talk about your company and you have one chance to make a first impression. If you’re not a design person, don’t do your own logo. Crowdsource if you need to.
  10. Shadow of a leader. You determine what your company culture looks like. Build it as a place you want to work every day. People watch you. At Image Cafe, I brought in a CEO who was religious. I wanted to act like a customer to get competitors’ pricing and she said “absolutely not.” She set the ethical tone.
  11. Investors want their money back. This is important. Investors back you. Your integrity is on the line. So know your exit strategy. I’ve never lost an investor’s money and I carry that chip with me every day.
  12. Cash and customers. Lessons 1 through 11 you can learn on your own but for #12 it helps if you have some education and understanding finance and marketing.

Wooten feels that entrepreneurship is a combination of talent, preparation and hard work. Following the 12 guidelines above will give you as an entrepreneur a chance to be more successful.

American Restaurants Struggle to Stay Alive

Back in the late 1980s, the Turnaround Management Association was birthed out of a research project conducted at the Kenan Institute of Private Enterprise at the University of North Carolina at Chapel Hill. As the lead researcher, I had the opportunity to personally pull together a bibliography of articles about businesses whose travails were significant enough to hit the national headlines in various business publications. From the research, we published a monograph and wrote articles about best practices that appeared in 46 national business periodicals in our first 18 months of existence as a trade association. As I and other involved with the Association moved on to other pursuits, TMA moved off campus, starting gaining momentum in chapter development, and now enjoys international members as well as domestic. One of the publications of TMA is the Journal of Corporate Renewal. The Journal‘s lead article for May discusses the struggle of restaurants in the United States to remain profitable.

Some interesting facts from the National Restaurant Association are cited:

  • Restaurants account for 4% of GDP
  • 10% of the U.S. workforce is employed in the restaurant industry
  • 50% of adults have worked in a restaurant
  • one-third of all workers had their first job in a restaurant
  • 48% of the average household’s food budget goes to restaurants (vs. 25% fifty years ago)

The bankruptcy filings of a number of restaurant chains since the recession began in 2008 is but one indicator of a model that is teetering on the brink of survival. The photo above is taken from a Food Network show entitled Restaurant Impossible, wherein Robert Irvine turns a restaurant around in 48 hours. The menu is revised, customer service issues are addressed, $10,000 of strategic remodeling is performed, the revenue and costs are examined for opportunity, and the restaurant owner is challenged to run the business at a profit going forward.

Macro trends in the recent few years towards buying more groceries or becoming value-conscious have definitely affected the top and bottom lines of many restaurant owners. Franchises, which account for about half of the restaurant revenues produced nationwide, have really taken it on the chin. Franchisees who own one or only a few stores have inadequate access to capital these days. Another big factor is the conflict of interest in most franchise agreements that are based on sales volume. The franchisor can implement discounting programs to increase traffic and sales volume, but the franchisee has less and less profit as a result of the agreements.

What can be done? Turnaround experts recommend a process of performing store-level profitability analysis, followed by benchmarking against peer stores. These analyses can highlight purchasing/inventory issues, training issues that are evidenced by waste, and theft/shrinkage that depletes the operator’s assets needed to produce a return.

There are many good consultants who can help a restaurant owner sort through the challenges and create a plan for growth and renewal.