Sunday, May 11, 2008

Jumping Out of the Box

You'll notice a new title to this blog. The new dubbing feels to me like the right fit. It will be around for a while. Why did I change the name (yet again)?

Entrepreneurs often feel that just by their nature, they are out of the box thinkers. And they are in the sense that "corporate America" is the big box. However, the vast majority of entrepreneurs, jump out of that vast box, into a much smaller box, with an equal set of beliefs, guidelines, norms, and culture. The intent of this blog is to identify and discuss the nature of this box, and possibly, maybe how to jump out of this box as well. And maybe, just maybe, become an innovative leader with a product that will change the world.

I'll be working on new organization for the site over the next few weeks. To date, its just a bunch of thoughts, but watch out, organization is coming!

Thursday, May 8, 2008

Prioritizing the Implementation Strategy

Too many consultants help businesses develop strategic plans that fail. This is often not the fault of the business or the strategic plan. I don't really fault the consultant except that they did incomplete work. A great BIG picture is draw up, but no blueprints are made. And what we are left with is a pretty picture with no tools to implement it.

There is a way to remarkably simple way to go about prioritizing and implementing your strategic initiatives. Let's walk through it briefly and you tell me if it makes any sense. (For a PDF PowerPoint, go to, click Client Access, then click Client Tools in the middle of the page.)

1. First, if all identified strategic outcomes are tied tied to bottom-line values (this means $$$), then you have to revisit them and do so. Generally all strategic goals can be tied to one or more of these three things: increase revenue, increase margins, reduce expenses. All affect the bottom line.

2. Once you've done this, you should have a list of strategic outcomes and the dollar values they will represent annually once achieved. For example, let's say we have a bakery, and we determine that a 20% increase in our birthday cake sales will reap an additional $12,000 in revenue every year. $12,000 is our Annual $ Value.

3. Next, figure out how long it will take for you to reach that outcome. Completely reach or exceed it. Let's say we know how to sell more cakes, but believe it will take us 9 months to actually achieve a 20% increase in sales. 9 is our Months value.

4. We are almost ready to go, we just have to divide these things into 4 categories.

Category A: Anything with any Annual $ Value that can be achieved in 1-3 months. If you have anything that can impact your bottom line immediately, DO IT.

Category B: Take your biggest Annual $ Value (unless is is disproportionately larger than all others, then take your second). Cut that value in half. For example: $12,000 divided by 1.8 is $6667. Anything that will bring more than $6667 to the bottom line is next. The longer the outcome takes, the higher the value must be.

Category C: Take all initiatives with your mid-Annual $ Value or lower. The longer they take the more likely they are to fall in category D.

Category D: Once you get to these projects, they are all fairly low value, so better get more strategic outcome in place fast!

(Graphic representation below.)

5. Execute the outcomes in the order of A,B,C.

You can argue with this all you like, but then you will just be arguing, not DOING, and that gets you nowhere.

(I should note I took this tool from someone, though I can not remember who. All the credit goes to them. I just use it.)

Performance Management and Culture Change

I recently fielded a question regarding culture change and how to boost productivity and change culture with minimal fuss. "Minimum fuss" however this is not a realistic outcome when changing culture. Performance management will allow you to identify where you are going off course, boost productivity, and enhance competitiveness. And ultimately, the result will be a culture that is more independent, engaged, and innovative.

There are plenty of off-the-shelf solutions out there. Some are really lousy, but others can help you make an impact fast and are easy to implement. I recommend a few below to help you get started in this search. You can also do so in house by identifying desired outcomes, setting milestones (key performance indicators), and tracking progress to those milestones- all in an in-house database, even Excel. The key to this last path is (understanding and) setting aggressive bench marked outcomes with the buy-in of the various teams, then setting up a tracking system that is engaging and adhered to.

Bench marked data is out there. Dig for it in your industry. The managers in various departments should present the chosen data to their teams and get feedback on *how long* it will take to reach the new benchmarks. Don't get into a discussion about whether they can be reached but *when* they will be reached. Open discussions about what type of innovations will be needed to reach these new outcomes. Set your milestones from there. Then track and report progress on a regular basis, preferably weekly. Have discussion in these reporting sessions about what is going well, what resources may be needed, whether the milestones are still "good".

This will require some change on managements' role. What team's often identify as needed resources is more bodies. While this may be true, it is often not feasible. While the team develops innovations, the manager must demonstrate willingness for change by jumping into the mix and working on the "floor". This engages the manager in both relationships and emerging innovations.

Reward will be very important. When milestones are accomplished, rewards must be allocated. They should increase as the desired outcome is approached. In today's economy, cash bonuses will be the most appreciated. If you think your business can not afford to give cash bonuses, you need to go back and look at the identified desired outcomes. Everyone of those outcomes MUST impact the bottom line, hence making money for the company. Share this increased revenue, margin increase, or cost reduction with the employees. Its the BEST way to get your employees engaged with the success of the business. After all, everyone is managing some part of the business. If you don't do it, you'll just be seen as greedy. The effort will fail.

Some areas will be tougher than others but these provide great opportunities for cross-functional teams. Some departments, such as HR, will be tougher to identify with bottom-line outcomes, but I can help with this, if needed. If any department can not be tied to the bottom-line, you have to question why it exists.

I am skimming this topic pretty quickly (and you probably understand it already), but I am trying to hit the important points. The most important aspect of this course is that it encourages ACTION and involves everyone in this accomplishment. Don't get tied up in how people feel about change- do the best thing for the company! And involve everyone in the conversation. After all, if the company doesn't do well, all jobs may be in jeopardy.

Places to start your search for off-the-shelf solutions:

I also suggest these experts on this topic:
Kurt Bilafer
Matt Schubert
Deanna Tsang

Monday, May 5, 2008

Surviving the Restructure

Following is a response I posted to a question on LinkedIn...

The question: Restructuring: How to deal with stressful environment?

Our company recently announced a major restructuring and jobs will be cut. So, now everybody is on edge and people's true colors are coming out. The other day, I was chatting with a coworker (one level above me) and when I mentioned to her that I got a call from an outside recruiter, she said, "I strongly encourage you to find other jobs.". And continued to say that she would even give me a good recommendation.

I was taken aback by her response because it's an open field. Her job is just as vulnerable as mine. In fact, her job and department is rumored to be the most in danger. I tried to stay calm and asked her if she knows anything I don't. She said she was only saying so because we're going through a restructuring. Yes, we sure are, but I don't see her looking for other jobs, is she?

I don't know if I should panic now and start actively looking. Should I talk to my boss and ask him if my job is in jeopardy? Would he know? Who would know about whose jobs will be cut? Obviously in this environment, there's nobody trustworthy enough and it's a dog eat dog world. Any advice will help. Thanks.

My Answer:

Through such a transition, honesty is demanded of everyone. More to the point, you have a right to demand some honesty from your boss and the vertical chain of command. It is important to note that this does not translate to "certainty". Certainty is not often attainable in this situation, but open and honest conversation is.

I will answer this question from the stand-point of someone that has led the execution such transitions, and been seen as the "hatchet man". Thus, my answer may be brutal, but if you can do these things you will very significantly improve your chances of not only retaining your position, but setting yourself up for future promotion.

There are a few things you should do immediately to bolster your contributions to that open and honest conversation. Determine your value. More specifically, determine your future value to the company POST-transition, NOT the value contributed to this point. You can and must identify these things:

  1. How your performance exceeds that of co-workers.
  2. How your performance and that of your department exceeds the capabilities of outsourcing at less cost.
  3. The willingness of yourself and your department to trade a small reduction in pay (fixed costs) for performance-pay (variable cost, sometimes COGS) that ties to the desired outcomes of the restructure. (this can be complicated, but can speak very loudly).
  4. Additional responsibilities that you are capable of taking on TODAY that will:
  • Compensate for a smaller workforce.
  • Allow jobs to be cut (an o-so-sensitive proposition).
  • Boost the bottom line of the company.
  • Demonstrate point 1, 2, and 3.

Your profile indicates that you are an "HR professional". The above points apply to any job. Specific to your role, you may:

  1. Link your role to employee satisfaction post-transition.
  2. Suggest that HR immediately tackles job-retraining, outplacement of severed employees, and begins a morale program to mitigate declining production through focus groups and cross-functional teams.
  3. Start a program to work with any/all employees that want to tackle the first points 1-4 listed above. Suggest that this be tied directly with those managing the transition, hence raising your profile and value through the transition.
  4. Suggest that you take on the role of exploring outsourcing options for your own department. Yes, very controversial, but it puts you firmly in control of your future and alerts you to the risks that your department is exposed to. Those risks are significant. There are very good HR outsourcing firms out there and your department needs to know and respond to these threats. To respond, you must identify points 1-4 above. In the unfortunate event that the company decides to outsource HR, this point puts you in a great position to to be the liaison between your company and the outsource firm, employed by either party.

If you can do all these things, you will be VERY well positioned to survive this transition in a very positive manner. it will require letting go of everything you now know about your job. But it will change YOU into a "business partner" not an "HR professional". That change will lead you to a very different career that will ultimately be more rewarding, more profitable, and more impactful. Many of these points are places that HR completely drops the ball. They will set your apart from the crowd.

One last point: if you feel that some of these things may jeopardize your relationship with your co-workers, you are right, they could. But they are solid business practices that are happening everywhere as we prepare to weather the recession. Those employee best able to contribute to the "business of HR" will be the most capable of surviving. More to the point, at the risk of sounding cynical, your co-workers ARE already throwing you "under the bus". If you leave, they believe they may be more likely to keep their position.

Saturday, April 26, 2008

Recognizing a Rock Star

(Repost from a Selling to Small Business blog to which I contribute.)

In a comment posted to [an earlier] entry, a reader noted that so many "stories are the same". That is so very true, even with rock stars- one more boy from south central LA; one more girl from Topeka, Kansas; one more aged star launching a comeback tour. There isn't story we haven't heard before. I often wonder how many iTunes tracks can actually be sold from singer-songwriters singing soft, halting guitar ballads about love and loneliness. Apparently, the answer is a staggering amount.

There are two very similar reasons. First, people want to hear it. They have an emotional connection to it. They like to hear something that reminds them of their youth, their passion, or their softer side. It reminds them of a part of themselves. Second, there will always be young males and females making the music, because there will always be youth, heartache, and beauty. People will sing about. And because everyone experiences those things, at least some of us will listen to it. See reason number one.

Small business has the same connection with most Americans. It is the American way. Everyone either has done it or would like to do it one day, if only... It is about taking risk, seeking independence, and taking care of your life. When they tell their story to the average American, they get quiet looks of admiration and respect. They are accustomed to this position in life, despite where it has actually gotten them on the totem pole. They have fought the good fight or are still fighting it.

A small business owner may have a similar story to the one you heard yesterday. The fact is that their story has subtle differences from the other. Those differences indicate the most important struggles that the business owner overcame. Despite the similarity of today's story to yesterday's story, that story is very real. It impacted the business owner in dynamic ways and changed who they are. Listen carefully: it IS who they are. A story like that has soul, funk, a bass line and a harmony. It might sound like last year's hit, but it is this year's hit, and more importantly, it is your potential customer's hit. Until you recognize and revere that story, the story of a rock-star, small-business owner, you will never be truly effective at selling to small business. You'll just get lucky sometimes.

If you want to build a relationship with a small business owner, take the time to hear their story. They always love to tell it. If they don't offer it, look around, it is probably on the walls of the small front office. Ask questions about pictures and awards you see. Be impressed. You should be. And then ask the big Hollywood question, "What gave you the idea for this business? How did you get started? Could you tell me how you got this GREAT idea?" Then sit down and let them tell you a story. When they are done, recognize their accomplishments (that they are, indeed, a rock star) and note how impressed you are that they got to this point.

If you have the time in your sales cycle, spend your entire first call listening to the story. Then say "Whoops! Look at the time! I have to go! Mind if I come back next week?" Without even pitching your pitch. I guarantee that when you return next week, they will look at you with more open eyes. They may even ask to hear your story!

Admitting to Economic Crisis

I generally don't like to comment on the current economic situation in our fair country. However, it seems only responsible to point out a couple things to those that reject the idea that we are in a recession or that there is a crisis.

There seems to be some doubt from some people that we (in the USA and every other country) are in a recession and that prices are rising while income is falling. I am really happy for these people, as the current situation has not yet touched them, or they are sufficiently capable of ignoring it. Perhaps they are Senators. The fact of the matter is we are approaching a turning point in the global economy unlike anything in history. Consumers are just beginning to catch wind of this.

A few things that are and will be affecting the all of us:

1. The American dollar has lost 35% of its value since 2002. This means that anything that is imported, now costs 35% more. Look around your house and tell me how many things you see are imported. Now look in your pantry, you'll be surprised how much FOOD is IMPORTED. The upshot is that much of the rest of the world is following us down the tube, keeping the dollar equitable, but portending to bigger problems later.

2. Not only has the price of a barrel of oil (75% of the cost of gasoline) doubled in the last half decade, but the dollar now buys 35% less barrels (see number 1). Compounding that demand for oil in those 5 years has risen 25%. That being the case, it is incredible that we are only paying $3.50 at the pump. I suspect that we are still buying gas that was purchased at cheaper oil prices with more valuable dollars. Once we start buying gas that was created from oil at today's prices with today's dollars, we will rapidly realize gasoline prices 60% more than what they are today. Demand will drop significantly, which could lead to a collapse of the economics of that critical market.

3. How much of our economy rides on the price of oil? How much BIG business? The answer is anything that relies upon cars, trucks, trains, airplanes, and energy for manufacture and distribution. Or anything that relies upon the manufacture of plastics. That encompasses ALL of the Fortune 1000, which directly affects EVERY consumer. That is you.

From these three things, it is evident that much is riding on the price of oil. Unfortunately, no one is willing or capable of taking definitive action on this. Fortunately, this market, like any other, WILL right itself. This does NOT mean that the price of oil will fall. It means that we will simply learn how to do without. This will not be an easy, nor short, transition. It will take decades. But I do think it will happen MUCH faster than most realize. We won't have a choice.

For us in the USA, we have the unfortunate circumstance of a government that is committing TRILLIONS of dollars to propping up the existing oil-based economy, instead of funding the transition of the economy. Hundreds of billions have gone into the war in Iraq, which is now, or has always been, about controlling oil influence in the world's most oil-prolific region. Hundreds of billions have gone into bailing out oil-dependent industries like automobile manufactures and airlines. This last may have been unavoidable to keep jobs in our economy, but it should have come with more oversight over change. The point is, can you imagine where the US economy would have been in 5 years, if those trillions of $$$ would have been invested in cheaper, emerging technologies that will replace global oil dependence over the upcoming years? Talk about a leadership position! We'd be leading the global economy again, instead of dragging it down like an anchor.

Do with this information what you may...

I went to the grocery store last week and bought exactly the same thing on a grocery receipt I had from the same store six months ago. (I found it when cleaning out a drawer.) My bill last week: $93.54. My bill six months ago: $74.93. That is a 24% increase in food prices, that I will not take to the bank.