Tag Archives: tactics

Climbing Your Management Everest

Stretching oneself to the maximum can reveal what we are made of. Whether the subject matter is a test of mental strength or physical, it is exhilarating to overcome a daunting obstacle. Sir Edmund Hillary is celebrated for his perseverance in conquering Mount Everest. One of my LinkedIn contacts and an internationally known innovation resource is Gijs van Wulfen. Van Wulfen states that, in the 1950s, the route to Everest was closed by Chinese-controlled Tibet. Nepal allowed one expedition per year.

Sir Edmund Hillary had been part of a British reconnaissance expedition to the mountain  in 1951. The 1953 Everest expedition for which he is now famous consisted of a huge team of over 400 people. Expedition leader Hunt named two assault teams. Hillary and Norgay were the second assault team. The first team only reached the South Col, about 100 meters below the summit. Then Hillary and Norgay got their chance. They reached the 8,848-meter high summit, the highest point on Earth, at 11:30 a.m. on May 29, 1953.Mt Everest

Gijs says the following 10 management lessons came to mind as he read the Hillary accounts:

1. Passion. As a youngster, Hillary was a great dreamer, read many adventure books and walked many miles with his head in the clouds. He was unaware his passion for adventure would make him, together with Tenzing Norgay, the first man to set foot on the highest point on Earth.

2. Urgency. In 1952 the British heard that in 1954 the French had been given permission to attempt Everest. The British wanted more than anything to be first. The expedition just had to succeed.

3. Teamwork. Getting to the summit of Everest is all about teamwork. As Hillary wrote: “John Hunt and D Namgyal’s lift to the depot on the South-East Ridge; George Low, Alf Gregory and Ang Nyima with their superb support at Camp IX; and the pioneer effort by Charles Evans and Tom Bourdillon to the South Summit. Their contribution had enabled us to make such good progress.”

4. Courage. The higher you get on Everest the more courage you need. At 7,800 meters Hillary wrote in his diary: “Even wearing all my down clothing I found the icy breath from outside penetrating through my bones. A terrible sense of fear and loneliness dominated my thoughts. What is the sense of this all? I asked myself.”

5. Test. On the 1951 reconnaissance expedition, team members tested oxygen equipment and did research on high-altitude physiology. The results of both studies were important in determining the right approach for Everest in 1953.

6. Initiative. While in India, Hillary read in a newspaper that the British were taking an expedition to the south side of Mount Everest in 1951. He contacted expedition leader Eric Shipton and suggested that a couple of New Zealanders could make a substantial contribution to the team. And they were invited!

7. Choices. The British Himalayan Committee replaced the 1951 expedition leader Eric Shipton with Colonel John Hunt, a climber. After eight failed attempts on Everest they needed someone to the top first, before the French would have their chance.

8. Overcome setbacks. Along the way there are always major setbacks. After finding a new route up Everest during the reconnaissance expedition of 1951, the British heard that the Swiss had obtained permission for two attempts on Everest the following year. The only thing the British could do was wait and see if the Swiss would succeed.

9. Competition. Hunt proposed that Evans and Bourdillon should use the closed-circuit oxygen equipment to reach the South Summit and Norgay and Hillary would push to the top with the open-circuit oxygen. The competition fueled the eventual success of Hillary’s team.

10. Luck. Hillary, a New Zealander, was lucky to qualify as a British subject and be invited to join the British team. Secondly, in 1952 the Swiss failed to climb Everest on their two attempts. 

How do you view these management lessons in light of your own organization’s efforts to be innovative and competitive?

 

 

Don’t Let Your Sales Tail Wag My Marketing Dog

The age old battle of chicken and egg takes shape in companies around the world as debates rage on the importance of marketing versus sales. Late 20th century management leaders, including Peter Drucker, felt that selling would become unnecessary in favor of marketing. ideas such as “frictionless markets” advocated for a day wherein buyers would deal directly with vendors via the internet. Now, folks like Geoffrey James, who writes the Sales Source column for Inc. magazine online, question whether there is a future for marketing and feel that sales is king. 

James argues that online definitions of marketing make it sound like a weak link in company management that seems to be high on shifting responsibility to other departments and avoiding accountability. Instead, he posits that 

“Marketing consists of specific activities that make it measurably easier for selling to take place.”

Tail wagging dogThen, because he’s a sales guy and sees marketing as a support function for marketing, James continues–

The advantages of such a no-nonsense definition are that:

  1. It throws the emphasis on what the marketing group actually does (and spends) rather than allowing marketing take credit for tasks actually performed by other groups.
  2. It emphasizes that Marketing activities must lead to a specific financial benefit in order to be consider useful and justifiable expenses.
  3. It turns amorphous activities like “setting strategies” and “providing requirements” into organizational overhead rather than a reason for existence.

Under this definition, the following activities (among others not listed) qualifies as “real” marketing:

  • Generating leads that the current sales group (rather than an ideal sales group as defined by the marketing group) finds it easy to close.

  • Running advertisements that, when shown in geography “A,” increase sales faster than in a similar geography “B” where those advertisements were not shown.

  • Providing sales tools that measurably help a salesperson close more business than a similarly-skilled salesperson who did not use those tools.

  • Building a sales channel that allows a company to sell profitably to a set of customers not currently being reached by existing sales channels.

James goes on to quote studies from research groups like CSO Insights that show that only 23 percent of 600 sales and marketing groups surveyed feel like the marketing team supplies fully qualified leads to the sales team. (As though the highest priority of marketing is to feed sales!) Also dismissed are marketing collateral pieces meant to assist sales efforts. James mentions CMO Council, American Marketing Association and Booz Allen Hamilton research indicates that sales staff are almost as likely to prepare their own collateral as to use what marketing has created. Channel development responsibility on the part of marketing is also questioned, citing an additional study be the CMO Council, claiming that vendor marketing campaigns are generally ineffective. 

(James, cont..):

The problem, according to sales guru and bestselling author Neil Rackham, is that as companies grow, Marketing tends to get disconnected from the selling function. Most companies begin with a sales function but without a marketing function but as they expand, they add marketing as a sales support function. Over time, however, marketing groups lose focus and become “atmospheric” and increasingly irrelevant to actually generating revenue.

 

I like reading columns by James because he is a good sales guy. However, my marketing bias would argue that marketing is the large concentric circle inside of which sales is a smaller circle.  When he quotes Rackham, he does so to prooftext his point rather than question the assumption. I think companies should begin with a marketing function, because marketing is all about setting direction via identification of what markets and buyers to pursue. Furthermore, the marketing function is the one that tests assumptions, makes strategic recommendations, and determines what channels need to be pursued with what messages by the sales team. When Sales drives the bus, it’s like a tail wagging a dog!

Avoid Deskitis

Business owners are a very interesting breed. In the early days, when they are most entrepreneurial, most are willing to do “whatever it takes” in order to get the business off the ground and well established. The average executive at this point in the life cycle of a small business wears every hat and can predictably be found doing dirty jobs because there’s no one else there to do them. As the business experiences a little success, hirings are made and there are others to whom some tasks can be delegated. At this point, the owner may still take on tough assignments like outside sales, negotiating contracts with vendors and customers, and handling sticky customer service situations. If the business grows beyond the first 5-10 employees, some specialization of labor begins to occur and the owner should be smartly stepping away from  business disciplines that don’t match what I’ve heard referred to as “motivated ability.” 

However, it is very common that a business will hit a plateau at some point in it’s first several years. When this occurs–whether due to changes in the competitive environment, or simply apathy on the part of the original 5-10 employees, it is time to do something that hasn’t been done in a while. One must roll up his sleeves and get the job done. What job? Spending time outside the office, talking to customers, suppliers, even competitors in an effort to determine what is working and what is not. Why don’t most executives do this? It can be attributed to an acute case of deskitis.

desk chainIn case you are not familiar with the term, deskitis is an affliction in which the infected feels attached to his desk at work and that prolonged contact with the desk will resolve all problems known to man. You chuckle only because you’ve encountered people who suffer from the malady described and it seems to you to be as trivial as the common cold. Unfortunately, this is a very severe disease and must be treated with the utmost care and concern.

Who are the prime sufferers from this affliction?

  • Billable hour professionals who think that billable work is more important than community involvement, networking, and relationship maintenance.
  • Owners of a trade business (one that relies on a specific skill that is often learned through apprenticeship)
  • Any executive in a small business whose base compensation is over six figures per year

What can be done to counteract onset of the condition known as deskitis?

  1. Leave the office, damn it!
  2. Visit someone who is important to the success of your business–
    • a referral source
    • a client
    • a fellow board member of a non-profit
    • your attorney, CPA, banker (as long as they are not going to charge you for the appointment)
    • your spouse
    • an association executive in your industry
    • someone who is a good networker
    • the local chamber of commerce executive
    • your friendliest competitor
    • a supplier
  3. Ask the other person what they think about the direction of your niche market.
  4. Take notes!
  5. Ask many follow-up questions; you do not know it all!
  6. Buy their lunch, coffee, etc; thank them; ask what you can do for them in return.
  7. Go to your vehicle and review your notes.
  8. Identify what new questions come to mind, what nuggets you’ve found, and actions you think you should take.
  9. Review your lists the very next day with your leadership team.
  10. Reinvent your business continually!

Hope that these suggestions are helpful to you. As a business development mentor, organizational development consultant, and management succession resource, I observe deskitis more often than I should. Don’t become a statistic–become vigilant instead!

 

Succeeding As the Little Fish in the Big Pond

When you set out to start a business, you can’t possible anticipate all of the challenges that will be faced. Many, many days you will find that something totally unexpected can come into your world and dominate your thoughts, perhaps even threatening your livelihood. However, most every entrepreneur knows that they start out the underdog. It is your job number one to figure out how to compete with the market leaders, outfoxing them when you can to carve out enough market share to pay your employees and pursue your dream.

First to market can be a hard advantage to overcome. Note – not impossible – just hard. 

little fish quote The Office imageWriting for Inc.com recently, Mayra Jimenez described how she and her husband found a way to compete with “the big dogs” in their industry. Her designer swimwear business, The Orchid Boutique, has grown nicely into a multimillion-dollar business. Here are some of the insights she shared earlier this week:

Separate “professional” from “robotic”

Larger companies tend to present themselves in a rather corporate manner. Their frosty approach gives you a chance to charm the market with your personalized company story. Clients want to feel they are shopping with a company that cherry-picks their products or personalizes their services in some manner. Casualness and customization are not your enemy! Take advantage of the fact that your ideas don’t have to go through a string of departments to get approved, and make it as personal as you can.

React quickly to industry trends

The most important advantage that you have over your competitor is your ability to react quickly. The bureaucracy of large teams and approval processes are tedious and time-consuming. While your senior competitor moves like an elephant, you’re a vibrant cheetah running rapidly towards your next milestone. Stay abreast of innovative strategies and implement them. This is especially important in ecommerce, as blogging, videos, and social media have changed the rules of converting browsers to customers.

Push the boundaries of your industry playbook

Let yourself think outside the box. Way outside the box. Be bold. As long as the end goal is increasing profit or branding, go for those ideas that sound crazy. Monitor the results closely, and if it’s not working, change it, cheetah.

Consider Mayra’s recommendations in your own business. How can you improve the customer experience to be more friendly, less obtrusive, an easier to navigate? When technology or another factor causes your market segment to shift, how can you respond nimbly and be on the cutting edge of innovation (though not out in front, as that often carries unnecessary risks)? All too often, established companies suffer from the “TTWWADIH” syndrome – that’s the way we’ve always done it here. Since you don’t have as much history, use it to your advantage and brainstorm new approaches that make sense for you, your team, and your target customer- without the constraints of worry about whether it will seem outlandish! 

Long ago, I heard the saying, “when small, act big; when big, act small.” The adage is just as wise today as it was when I first heard it. Think about how you can copy the things you like about your competitor but outmaneuver them in a subtle myriad of ways.

Alternative Lending Helps Small Businesses

Small businesses rely on capital to fuel business growth. Some are able to generate working capital from operations. Others, however, are forced to consider taking on debt or new stockholders because they can’t. Since most entrepreneurs would prefer to avoid giving up voting rights and/or access to profits, debt is the preferred path among those whose businesses don’t self-fund. With the recession of the past few years, however, small business lending became  much harder to secure. Ami Kassar, who founded Multifunding, published a blogpost yesterday in the New York Times, discussing the current status of small business lending in the United States.

small business lendingKassar studied numerous reports from organizations like the Small Business Administration (SBA) and the Federal Deposit Insurance Corporation (FDIC). He noted that SBA loan data, even when combined with bank lending data, fails to tell the whole story since there are so many alternative lenders who don’t aggregate and report their business activities. Kassar related his own experience as a loan broker to fill in some of the knowledge gaps resulting from the (un)reported numbers. Below are excerpts from his comments:

If you’re trying to start a business today, you can almost forget about going to a bank for financing. This situation hasn’t changed much in the past year, and we don’t see it changing any time soon — with a few exceptions. If you are opening a franchise outlet that is on the approved S.B.A. list or if you have solid personal collateral outside of your new business, you’ve got a shot.

In 2012, frustrations about the difficulties involved in financing start-ups resulted in a lot of political capital being focused on one possible solution, crowdfunding. Unfortunately, crowdfunding hasn’t taken off yet, and I don’t think it will in 2013. It will take time to iron out the kinks and figure out how to make it work — how to strike the right balance between helping companies and protecting investors.

On a happier note, things have definitely gotten better for companies that are clearly creditworthy. In 2012, if you owned an existing business and you had collateral, cash flow and good credit scores, it was a good time to borrow money at low rates. And I think that will continue for some time. Banks are now hunting eagerly for these borrowers.

The problem is that there are not nearly enough of them. And that’s why a group of alternative lenders — including factors and merchant-cash advance lenders — are lined up and ready to supply money to most of the rest of us. The challenge is that these borrowers face high rates that make it tough to grow and expand as much as they would like.

The alternative financing industry is growing rapidly and, I believe, will continue to grow in 2013. These lenders are extremely entrepreneurial and are leaving the banks behind with their speed and use of technology. Many are backed by premier investment banks and Silicon Valley venture capital powerhouses — investors who understand that entrepreneurs and small-business owners are throwing up their hands in frustration over how long it can take to get a loan from a bank, especially if the loan is backed by the S.B.A. More and more businesses are willing to pay the price of the alternative lenders just to be able to get their capital and move on.

There are some indications that the price of alternative lending may be coming down a bit as the industry gets more competitive. I expect this to continue in 2013. That said, there is still a wide discrepancy in pricing between bank loans and alternative loans.

Educate yourself on alternative lending in your area. I attend meetings of the local chapter of the Commercial Finance Association and have met some folks who are staunch supporters of small businesses through their practices rather than the mere words that we often hear from politicians or some of the large banks who really have a poor track record with small business. It very well may be that your capital needs could best be served by this emerging category of providers!