Tag Archives: planning

Implementing Your Turnaround Plan

A turnaround plan presupposes that someone will be around to implement it. A lack of execution or inappropriate one (timing or lack of adaptation) will quickly undermine all earlier efforts that went into drafting the plan. Control over operations is therefore a must–no single part of the business should monopolize the company’s attention and efforts.

Controlling Operations

Motivation

The motivational skills of a “take charge” leader can enhance job performance in many ways. Many employees complain they are not being used effectively because they don’t have enough to do or their efforts are being applied inappropriately. Management that makes the most of employee work efforts has a knack for spotting actions that, if performed immediately, will have a tremendous, positive impact on company success.

Efficiency

To ensure that operations are monitored and controlled correctly, the individual who reviews system reports must make decisions based on indicators of company efficiency. For example, if variance reports show (project or product) costs exceeding budget, action must be taken immediately to prevent further overruns. Similarly, if non-payment has a vendor worried, the top financial manager must find a way to keep the vendor on board so a return to profitability can occur.

Sound management is exhibited when field operations or internal reports require responses to abnormalities. For example, a business owner in the midst of a turnaround had a new hire (< 2 months) supervisor request on Thursday to take Monday and Tuesday off to pursue some personal matters. The business owner was not in a production crunch and was short on cash, so he approved the time off–particularly since the supervisor was not using vacation (paid) time to take leave. When the supervisor strode onto the job Monday late morning, the owner was surprised. When he requested to work the balance of Monday and all of Tuesday, the owner declined the request, citing that she had to make other arrangements that inconvenienced others and that last-minute notice would not be accommodate in this or future instances.

In this instance, the owner did what was necessary to maintain control over operations. Though it may have ruffled the supervisor’s feathers for a few days, it demonstrated the importance of setting policies and commitments–and living by them. It was also to the owner’s advantage not to have to pay the supervisor for work that had been reassigned to someone else. Proper planning was used to make sure that someone would be able to supervise the work. Additional follow-up was necessary to make sure no problems were slowing down production for those two days. Had the owner failed to exercise sound management, proper planning, or follow-up, she would have lost time, money and credibility with others due to one employee’s circumstances.

Focusing on Common Objectives

Getting employees to focus on common objectives is a difficult task. Executives an managers who are able to motivate their workers to avoid distractions, do their jobs effectively, and remember to follow the turnaround plan do so with tremendous skills/abilities.

Employee Problem Solving

Employees can best avoid distractions and aid in the turnaround process by quickly resolving issues in which they have innate skills and referring all other issues to appropriate personnel. Additionally, employees should report any persisting problems or confrontations to the executive team.

Problem-solving should be a relatively painless process, requiring only that he or she utilize skills learned on the job and “do what seems best” based on prior experience. If an employee has little or no experience in the problem area , she should not hesitate to find someone who is experienced. It is far better to admit a need for help than to take a chance on behalf of the company.

Employees should be reassured that involving others is not “shirking” or “dumping” work into another’s lap. Rather, this process is a way of relieving employees of the likelihood of error in making an uninformed decision. However, employees are not absolved from making sure the problem is resolved. Make it a habit of celebrating when employees help one another out to build camaraderie.

 

Are You as Tuned In as Zipcar?

Recently, I had the opportunity to teach a group of new entrepreneurs (some not yet in business, some with a year under their belts) how to evaluate a business idea. We discussed the fact that, in the ideation process, there must be a filter by which ideas are judged and refined. Just as heating up gold purges the dross, an idea put under scrutiny can be seen for what is truly valuable, versus the parts of it that need to be cast aside to pursue more pure substance. During one of our sessions on idea refinement at the Cary Innovation Center, we spoke about innovators who had gone before them in various fields. One of the intriguing business models we bantered about was the Zipcar.

Zipcar entered my field of vision about three years ago when I went back to school to get my MBA at the #1 part-time program in the United States, Elon University. Situated near the student stores, and within a stone’s throw of the library and dining hall were a row of cars with the Zipcar logo emblazened on the side. There were assigned spaces closest to the buildings and I wondered what this was all about. A couple months later, we studied Zipcar briefly in an innovation elective class I was taking.

Later still, I read Tuned In and the upstart car rental business showed up again. Robin Chase and Antje Danielson recognized the opportunity while vacationing in Berlin and seeing a similar concept. When they returned to the States, they asked around and realized that there was latent demand for a rental car that would fit an urban lifestyle–creating a submarket for those who only wanted a car for a day, a weekend, or a few hours. The identified a target market of people who didn’t want the hassle of owning a car nor the inconvenience of dealing with the traditional rental car companies.

The authors of the book describe a six step process to create an offering that is a “resonator:”

  1. Find unresolved problems.
  2. Understand buyer personas.
  3. Quantify the impact.
  4. Create Breakthrough Experiences.
  5. Articulate Powerful Ideas.
  6. Establish Authentic Connections.

Without going into a ton of deal, suffice it to say that Chase and Danielson did all six with Zipcar. Of the six, the one I spent the most time discussing with my class of entrepreneurs was “Understand Buyer Personas.”  Basically, this is the concept of characterizing a group of people who share one or more challenges. When a company zeroes in on the concept, they use these personas to drive decisions in product design and development, marketing, and communications. Rather than the mass-produced single item method of the industrial revolution, this approach aims for customization to individual target audiences, the sum of which makes for a good business model.

Zipcar, according to the authors of Tuned In, appeals to the following types of buyers–

  • City dwellers who occasionally need to use a car for a few hours,
  • Mayors, city councilors, and police who deal with parking constraints in major cities, 
  • University administrators who wish to set up a car share service for students,
  • University students who occasionally need a car for a few hours, 
  • Landlords who might offer a car share service as a benefit for tenants, and
  • Business managers who might want to set up a car share service as a perk for employees.

As we discussed this profound market segmentation, my pupils (students) were really challenged to think through their own competitive positioning efforts. Even the mentors I had in the room (present company included) had a bit of a gut check as to how well we did this in our own businesses. How about you? Have you taken the time to really think through this in a way that many small business owners never do–at startup or later?

 

Can Generalists Thrive in the Conceptual Age?

One of the questions I get most often is: “what do you do?” The answer to that question is not an easy one, as my work with companies ranges from start-ups to those almost middle market size, and the services I offer from advisory board member to turnaround artist. Yet, when my role is marketing consultant, I advise others to be able to answer the very same question crisply, concisely, and in a compelling way. What is poignant is that, as we gain more skills over the years, it becomes harder and harder to specialize. That is not to say, however, that I have not met people in business who are extremely specialized and who succeed in their field. For the moment, though, I want to write for others who have adapted to competitive market demands to embrace new skill sets, become masterful enough that others hire them to provide those new skills, and now are the proverbial “generalists.”

Don’t confuse “generalist” with “General,” however, as many generalists struggle to stay with one organization long enough to rise to the rank of top officer. Furthermore, a generalist has challenges in the unique realm of trying to keep up with evolution in many more topical areas, all of which are changing at a faster rate than at perhaps any time in history. The good news is that, as Daniel Pink points out in A Whole New Mind, we are now living in the Conceptual Age, having evolved from the Information Age to a day and time when creativity will be valued highly. Maybe that is not such good news for left brain folks who are not able to adapt, but for those (for whom the learning of new information was merely a means to an end, the end being to connect emotionally with others, build relationships, and find success while doing so) who embrace right-brained living, it is a brand new day!

Here are the new skills that are needed in the Conceptual Age:

  1. Design – the ability to create something that has significance as well as usefulness.
  2. Story – the ability to put facts into context and deliver them with emotional impact.
  3. Symphony – the ability to see the big picture, connect the dots, combine disparate things into something new.
  4. Play – sense of humor and laughter plus other components to balance the psyche.
  5. Empathy – standing in someone else’s shoes, feeling with his or her heart, seeing with his or her eyes.
  6. Meaning – working for something in which one believes with others who have similar values.

As you can see from the list, the emphasis and value will be placed on original thought rather than automatable routines. Computer power has now rendered many repeatable acts less valuable (not unnecessary, mind you, just worth less than previously because either low wage earners or machines can perform them admirably). What will come to be increasingly important is the ability to think up a new concept, develop it sufficiently, and share it so that it resonates with the heart of another. 

What’s the role of the generalist in this new economy? That depends–can you adapt, or are you trying to pour new wine into an old wineskin? Those of us who can adapt will be able to answer questions like “what do you do?” with less of an elevator pitch and more of a carefully crafted story that captures the mind, will, and emotions of the intended audience, hopefully in a multi-sensory way!

Cheers to you as you embark on the journey to greater relevance, enhanced value to others, and — I sincerely hope — a much greater sense of doing something truly meaningful (other than just adding to your repository of information.)

 

Risk Assessment for Small Businesses

When someone talks about risk management in a business context, usually the risk is of a financial nature. Yet, other kinds of business risk that cannot be taken care of with an insurance policy or other financial tool  are just as important for you to consider and make plans concerning.

New product roll-outs  mergers and acquisitions, and similar considerations all carry an inherent element of risk. If your company does not have cash reserves or strong current year cash flows, it is very hard to make up for a mistake in terms of something attempted that does not work out. The smaller the organization  the more a setback impacts your ability to recover. If the executive team understands this important principle, then you are well on your way to avoiding unnecessary risks that will kill your long term prospects for success and growth. Three areas of risk are significant:

Location risks:

Location risks include choice of where to offer your products and services, where your staff is located, and where your customers are located. It is extremely unwise to not think through these various parameters and how they impact your strategy and planning. Whether you are thinking of location in terms of geography or online versus in person, you have to wrestle this subject to the ground, develop a keen internal understanding within your team as to how to optimize your choices with regards to locations, and adhere steadfastly to your plan. Any forays into new locations–whether in terms of sales presence, staff, or customer preferences–should be scrutinized with the intent to preserve or improve efficiency in meeting customer needs. In addition to these considerations of location, there is also a need to think about your suppliers, strategic allies, and key advisers. You want to be as close as you can to key stakeholders who can drive your business success.

Locations that you choose should be that delicate balance between affordability and high traffic. being able, for instance, to  get banking and other errands done quickly will make your organization more efficient and, hopefully, reduce costs while improving customer service. Keeping in mind that you can’t spend too much money for a prime location, make sure that you have adequately researched alternatives before settling into a choice.

Design risks:

Market research should support all design decisions. Whether your company makes software, consumer goods, runs a retail store, or delivers a service, the design of your offering to your target market should reflect tat you have done your homework. Your offering should have strong appeal to each target buyer persona, with features and benefits that are tailored to identified preferences. However, designs can become  stale in a short amount of time, so it is advisable to create and revise based on prospect needs as well as initial customers. To only look to keep providing the same thing to an established clientele shuts your organization off from new opportunities and the need to replace customers over time with better ones. Once you have a series of strongly designed offerings, look to promote and sell as much of it as you can as quickly as possible because you will “iron out the wrinkles” and become proficient and prolific in delivery of something in which your fixed cost does not increase and you can exact better margins.

Sales risks:

Sales risks include the reputation of the sales force, distributors, resellers, etc, pricing competitiveness, and product price bracketing. Those who are charged with selling your offering are selected by prior performance in similar situations. Familiarity with your pricing, offerings, and market is a baseline–you want someone who will give you continuous feedback to keep improving what you offer. You need to educate some sales people on both the importance of this feedback  and what you require (and when).

Pricing should be within the boundaries  the market will bear. Not wanting to forego sales for higher prices, or profits for lower prices, it is important to devote a goodly amount of time to setting prices that will attract buyers from each target buyer category at profitable levels.

Being able to address each of these risks is vital if you are going to create and maintain a thriving business. Make sure that you develop plans for risk management in each of these categories, as well as the financial risk that most every business faces.

Small Business Management Information and Organizational Staffing

Different-sized businesses have different needs in terms of internal structure and systems, particularly during times of economic decline. As the entrepreneur adapts to changes in his or her competitive situation, the size of the business may vary enough to put it in competition with either larger or smaller competitors. Implementing systems to match competitive requirements is a necessary first step toward efficient organization and operation.

Management Information Systems

Small businesses usually enjoy the pace a smaller organization and a high level of personal involvement in decision-making. The systems typically in place range from a manual bookkeeping system inadequate in reporting timely developments to overly complex programs that require more attention than the small business leader can give. Therefore, the goal in a small operation should be to minimize company reliance on record-keeping as a chore and focus on the development of meaningful reports. With all systems tied together, the financial systems can work with marketing and operations systems. The reports generated can then be used by each department.

Accounting Information

Accounting information that should exist in at least a semi-automated form includes accounts payable, cash projections, expense estimating, and quotation systems. It is impossible to run an efficient operation with anything less than this skeleton. The payables are easily recordable as invoices are received and paid. Cash projections contain–at a minimum–information about loans, revenues, and disbursements. A basic expense estimating system posts invoice amounts  (direct costs) and allocates indirect  costs as appropriate to to specific projects or clients. Finally, a method of preparing quotes should be implemented to standardize pricing based on cost data.

Marketing Information

Marketing information should include inventory listings, commission agreements, advertising schedules, and research into market demand and competitor product offerings. Inventory listings are a natural by-product of the job costing (expense estimating) system and should include gross profit percentages, inventory age, and a measurement of the relative sales priority of inventory based on carrying costs. Commission agreements highlight the sales force’s expectations for representation of company products. Advertising schedules will help the business leaders plan for regular promotions. Finally, research into market demand and competitor product offerings will require periodic updates.

Operations Information

While accounting information is preferably computerized or otherwise automated, operations information, like marketing, need not be automated as a first priority. Information systems for monitoring operations include purchase orders, scheduling, and either timekeeping or job progress. A purchase order system is essential for cost controls, order documentation, and verification of amounts and qualities delivered. Finally, scheduling systems provide for systematic fulfillment of orders.

Organizational Staffing

Small businesses must determine the organizational development and staffing levels based on their need to delegate tasks and thus free themselves for critical activities. Office management, marketing and operations managers should be hired only after careful screening. These individuals need to possess industry specific experience and a good general feel for how your business works. Sales people and administrative staff are not innately qualified to work for a particular organization. When verifying references and conducting interviews, then, look for a match in values!

Office Management Staff

In the management of the office functions, organization and attention to details are essential. One or two well-trained individuals–preferably capable of performing each other’s jobs–should be enough to keep the internal operations running smoothly and to help with some of the company’s daily busy work when necessary. Ideally, these office employees should be able to handle accounting, calls, filing, and word processing.

Marketing Staff

The marketing staff need not consist of one or two well-trained individuals either. One person must have responsibility for digital marketing–all things web-based including website, social media, and CRM. The other should handle strategy and supporting sales and other executive staff on marketing issues, including advertising, branding, collateral materials, proposals, etc.

Operations Management

A team of one or two should again be sufficient. Depending on the size of the organization, the complexity of its operation, and the rate of growth, a good rule of thumb is that one manager should have responsibility for no more than five to eight direct reports. These managers should be expert in keeping work on time and on budget.