Does running your business sometimes feel like this?

This will be my last post of 2018.  Happy New Year to everyone!  I thought I would end the year on a humorous note. Enjoy!

Have you ever had one of these days?

The optimal way to avoid this tragic business metaphor is to build your company as if you are going to get, at any moment, an offer to sell that you cannot refuse.  Building for exit value optimization is a great way to build a highly valuable business regardless of your interest in selling it someday.  Here is a pretty comprehensive list of areas to address in priority order (at least the top four in bold) to optimize exit value and, by default, build a healthy and thriving organization.

Increased exit value drivers:

  1. Reduce the risk for the buyer
    • The entrepreneur/CEO/Owner is redundant in the business
    • Powerful, healthy Management Team/Bench for key positions
  2. “Rembrandts in the attic” – Value beyond the financial returns – Value over discounted cash value
  3. Healthy culture/High engagement organization
  4. Revenue predictability and quality over several years, consistent growth in Revenue, Profit and Cash
  5. Show significant growth potential in current, adjacent and/or new markets
  6. Bring multiple buyers to the table
  7. Documented Systems
  8. Customer diversification
    • Have no one customer that is more than 10% of total revenue/profit
  9. Protect IP
  10. Dashboards and KPI visibility
  11. Make books squeaky clean – Taxes, receivables, short and long-term debt, etc.
  12. Clean records/good data
  13. Clean up facilities if applicable
  14. HR compliance
  15. Tighten up ALL Agreements
    • Solid employee agreements,
    • Solid vendor/supplier/technology/customer agreements,
    • Partner legal agreement,
    • Real Estate agreements, etc.
  16. Address any pending/active lawsuits, etc.

If these things (and possibly others based on your industry, etc.) are not in place, a savvy buyer will chip away at the original offer and may cause you to inadvertently sell at a much lower price than you would like.

Please see the two-minute video below for an overview of how to systematically and deliberately address many of these issues.

Set up a 15-minute conversation to talk about how you can optimize your exit value and take the guesswork out of growth (Click here to see a sample one page strategic plan).

Be Exceptional!

Bill  – Certified Premium Scaling Up/Gravitas Impact Coach
(bill@catalystgrowthadvisors.comwww.catalystgrowthadvisors.com)

For MA companies ONLY, as an approved Training and Development provider, Catalyst Growth Advisors can offer you 50% off program fees.  Click here to see if you qualify.

Growth IQ: Get Smarter About the Choices that Will Make or Break Your Business

“In a Bain & Company study, 85 percent of the executives surveyed, and a full 94 percent of those running companies with more than $5 billion in revenue, said that internal, not external, obstacles keep their companies from growing profitably.” – Tiffani Bova, Growth IQ

According to Michael Treacy, business researcher, and author, there are 5 areas of your business to look for growth in his HBR article.  They are:

  1. Retain Your Customer Base – Consistently delight your customers so they do not leave
  2. Gain Market Share – Steal share from competitors
  3. Exploit Market Shifts – As markets change, being the first with a viable solution wins
  4. Penetrate Adjacent Markets – Identify markets where your core competencies and/or solutions can be leveraged
  5. Develop New Lines of Business – Acquire reasonably priced market leaders

I recommend that you ask your Operations team to break down your revenue by these five areas going back 2-3 years.  Then craft a 2019 plan to optimally grow revenue.

According to Tiffany Bova’s book, Growth IQ, there are 10 different ways that companies can grow their business.  Many of the companies in her research employ multiple items from the list below.

THE TEN GROWTH PATHS

  1. CUSTOMER EXPERIENCE: Inspire additional purchases and advocacy
  2. CUSTOMER BASE PENETRATION: Sell more existing products to existing customers
  3. MARKET ACCELERATION: Expand into new markets with existing products
  4. PRODUCT EXPANSION: Sell new products to existing markets
  5. CUSTOMER AND PRODUCT DIVERSIFICATION: Sell new products to new customers
  6. OPTIMIZE SALES: Streamline sales efforts to increase productivity
  7. CHURN (MINIMIZE DEFECTION): Retain more customers
  8. PARTNERSHIPS: Leverage third-party alliances, channels, and ecosystems (Sales, Go-to-Market)
  9. CO-OPETITION: Cooperate with market or industry competitor (Product Development, IP Sharing)
  10. UNCONVENTIONAL STRATEGIES: Disrupt current thinking
Here is an example from the book:
The Honest Company has used a number of growth paths in combination to achieve its $1 billion valuation. With its initial focus on diapers, infant formulas, and household cleaning products, The Honest Company was quick to maximize sales by offering more of its existing products to its existing customers via a subscription service (Customer Base Penetration). The company launched (Product Expansion) the recurring $79.99-per-month subscription model for its diapers and wipes to improve both the customer experience and revenue predictability, based on its keen understanding of its customer base and what would appeal to them—it didn’t want new parents to run out of diapers and need to make a midnight run to the store any longer. The Honest Company also broke with industry tradition by eschewing traditional marketing such as advertising and brick-and-mortar retail. Instead, it focused upon direct-to-consumer (D2C) online sales and an image of purity and goodwill, not least in making major donations to charities right from the start (Unconventional Strategies). Hence why its e-commerce roots continue to run so deep even today.
My key takeaway from Treacy’s and Bova’s research is that you should be clear on where your existing and past growth/decline is coming from (Treacy) and then choose the appropriate combination of growth paths based upon market and customer context to move forward (Bova).  This must be done at least once/year consistently and fit into your overall company strategy. (Flynn).

Which combination of the aforementioned growth strategies will separate you from viable alternatives for your best customers?  To paraphrase Michael Porter, the purported father of modern business strategy, A winning strategy is about choosing a unique and valuable position rooted in systems of activities delivering what your core customer most wants and values.

Please see a previous post with a straightforward exercise to get you started. Please set up a 15-minute conversation with me if you are interested in learning how you can do this for yourself or with a coach.

Be Exceptional!

Bill  – Certified Premium Scaling Up/Gravitas Impact Coach
(bill@catalystgrowthadvisors.comwww.catalystgrowthadvisors.com)

* Ask me how MA (and other states) may help pay for my leadership coaching services.  For MA companies, as an approved Training and Development provider, Catalyst Growth Advisors can offer you 50% off program fees.  Click here to see if you qualify.

The Power of the Brand Promise Guarantee

‘The guarantee is proof that we’re a great company. We’re willing to tell our customers that if they don’t like our service for any reason, it’s our fault, not theirs, and we’ll make it right.’ I realized then that the guarantee is far more than a simple piece of paper that puts customers at ease. It really sets the tone, externally and, perhaps more important, internally, for our commitment to our customers and workers.” – Mitchell Fromstein, president and CEO of Manpower – Excerpt from The Power of Unconditional Guarantees – HBR article

Screen Shot 2018-10-24 at 11.50.34 AM

*BBBK’s Key Customers were Restaurants and Hotels

The HBR article is about 30 years old which shows you that this is not a new idea.  However, it is rarely achieved since it takes hard work, alignment, and time to pull it off.  The benefits are seen on your business top and bottom lines as well as in culture and employee engagement. The Brand Promise and Guarantee mainly result from the following key steps:

  1. Clarity from Core Purpose, Values and BHAG
  2. Truly understanding what your Core Customer wants and values
  3. Nailing your economic engine – a.k.a. Profit/X
  4. Mapping out in detail your Core Competencies and Differentiators
  5. Relentless pursuit on your X-factor – 10-100X growth accelerator

Please note that this is not a generic 100% money back guarantee as that is not a differentiator.  This is a guarantee that reinforces what your most profitable customer uniquely values and you can reliably deliver time and time again that viable alternatives cannot.

According to Shannon Susko, successful entrepreneur and author, you know you when you have created a truly unique Brand Promise and Guarantee when you answer “YES!” to the following questions:

  1. Does the Brand Promise and Guarantee attract the most profitable customers that buy with little to no convincing necessary?
  2. Do your competitors think you are crazy?
  3. Does it instantly differentiate you in the marketplace?
  4. Can you reliably deliver on the Brand Promise and Guarantee operationally?

How did you do?  Please set up a 15-minute conversation with me if you are interested in learning how you can do this for yourself or with a coach.  I have provided a roadmap to give you a visual timeline of how we build your Brand Promise, Guarantee and overall business into a highly-functioning system,

Be Exceptional!

Bill  – Certified Premium Scaling Up/Gravitas Impact Coach
(bill@catalystgrowthadvisors.comwww.catalystgrowthadvisors.com)

* Ask me how MA (and other states) may help pay for my leadership coaching services.  For MA companies, as an approved Training and Development provider, Catalyst Growth Advisors can offer you 50% off program fees.  Click here to see if you qualify.

Start the Annual Strategic Planning Process Now (you need 60+ days to prepare)

Dream Goal Plan ActionIf your team does not leave the 2-3 day planning session energized and aligned for at least the next 12 months, you have wasted a great opportunity and significant money and time.  Finding, in 2019, the one or two key things you can accomplish that will improve the business significantly may be the difference between a decent and a phenomenal year.  Don’t just plan for planning sake – plan for greatness.
“There is nothing quite so useless, as doing with great efficiency, something that should not be done at all.” – Peter Drucker
For MA businesses, as an approved provider in the State of Massachusetts, a certified as a growth coach,  a certified NeuroLeadership and Predictive Index Practitioner, if you choose, I am an option to assist in the planning process. The benefits to you are to have a seasoned coach and facilitator help plan and run these vital sessions while having the state subsidize 50% of the fees for qualified companies.  Here is the foundation you will begin to put in place:
  1. Being a great place to work – The attracting, hiring and training of highly motivated and skilled people. Placing them in the right jobs doing the right things. Creating a culture that gets the best possible results.
  2. Having a predictable path to success – An industry dominating, outcome-based market strategy
  3. Hitting your goals consistently  – An execution model that establishes strong habits throughout the organization
  4. Funding phenomenal growth – Enough cash to support all of the above
We are too busyFor those ready to do it on their own (DIY), please follow this link to my Resources page that contains a 60-day pre-planning process to get ready as well as a sample two-day agenda (under Business Resources, Other, #5).  Please use this link to book a 15-minute consultation (DIY) or pre-qualification meeting with me to discuss having a 3rd party participate in the process.  (If you are not in MA and interested, please feel free contact me to discuss alternatives. Your state may have a similar program.)
Be Exceptional!
Bill  – Certified Premium Scaling Up/Gravitas Impact Coach

Why do some ideas stick?

As a follow up to my last post about how to encourage the generation of helpful and innovative ideas from your organization, this post focuses on how to develop and communicate those ideas so they stick.  For an idea to stick, for it to be useful and lasting, it  makes/allows the audience to:

  1. Pay attention
  2. Understand and remember it
  3. Agree/Believe
  4. Care
  5. Be able to act on it

Chip and Dan Heath, in their latest phenomenal book, Made to Stick: Why Some Ideas Survive and Others Die, go into some detail about how you make ideas stick.  Their research over several years uncovered six common factors of almost every enduring idea – from Kennedy’s moonshot to Aesop’s Fables to Chicken Soup for the Soul books.

Kennedy moonshot

The ideas that endured have these elements in common:

  • Simple
  • Unexpected
  • Concrete
  • Credible
  • Emotional
  • Stories

Those six factors (mentioned above) spell SUCCESs which is, in itself, a memorable way to explain them.  You can use them as guides to help you get people to remember your product, service, story. joke, etc. Here are each in a bit more detail (taken directly from the book):

  • SIMPLICITY – To strip an idea down to its core, we must be masters of exclusion. We must relentlessly prioritize. Saying something short is not the mission—sound bites are not the ideal. Proverbs are the ideal. We must create ideas that are both simple and profound. The Golden Rule is the ultimate model of simplicity: a one-sentence statement so profound that an individual could spend a lifetime learning to follow it.
  • UNEXPECTEDNESS – We need to violate people’s expectations. We need to be counterintuitive. For instance, “A bag of popcorn is as unhealthy as a whole day’s worth of fatty foods!” is an unexpected and memorable way to say that movie popcorn is bad for you. For our idea to endure, we must generate interest and curiosity.  We need to rise above the bombardment of everyday distractions.
  • CONCRETENESS – We must explain our ideas in terms of human actions, in terms of sensory information. This is where so much business communication goes awry. Mission statements, synergies, strategies, visions—they are often ambiguous to the point of being meaningless. Naturally sticky ideas are full of concrete images.  In proverbs, abstract truths are often encoded in concrete language: “A bird in hand is worth two in the bush.” Speaking concretely is the only way to ensure that our idea will mean the same thing to everyone in our audience.
  • CREDIBILITY – When the former surgeon general C. Everett Koop talks about a public-health issue, most people accept his ideas without skepticism. But in most day-to-day situations we don’t enjoy this authority. Sticky ideas have to carry their own credentials. We need ways to help people test our ideas for themselves—a “try before you buy” philosophy for the world of ideas.
  • EMOTIONS – We must make our intended audience feel something. In the case of movie popcorn, we make them feel disgusted by its unhealthiness. Research shows that people are more likely to make a charitable gift to a single needy individual than to an entire impoverished region. We are wired to feel things for people, not for abstractions. Sometimes the hard part is finding the right emotion to harness. For instance, it’s difficult to get teenagers to quit smoking by instilling in them a fear of the consequences, but it’s easier to get them to quit by tapping into their resentment of the duplicity of Big Tobacco or their disdain of authority.
  • STORIES – Research shows that mentally rehearsing a situation helps us perform better when we encounter that situation in the physical environment.  Firefighters naturally swap stories after every fire, and by doing so they multiply their experience; after years of hearing stories, they have a richer, more complete mental catalog of critical situations they might confront during a fire and the appropriate responses to those situations. Similarly, hearing stories acts as a kind of mental flight simulator, preparing us to respond more quickly and effectively.

Try applying some or all of these principles next time you want to communicate an idea.  Use these concepts as a checklist before you hit “Publish”  Even better, pick up the book for lots more detail on how to apply these to your particular needs.  Let me know how it went!

Here’s a great idea for MA companies – Master the 3-5X Rockefeller growth habits for half the price. See below.*

Be Exceptional!

Bill  – Certified Premium Scaling Up/Gravitas Impact Coach

(bill@catalystgrowthadvisors.comwww.catalystgrowthadvisors.com)

* Ask me how MA (and other states) may help pay for my leadership coaching services.  For MA companies, as an approved Training and Development provider, Catalyst Growth Advisors can offer you 50% off program fees.  Click here to see if you qualify.

Ideas, Ideas, and more Ideas

Your team may have some of the best ideas to move the company forward – some big, some not so big – but forward nonetheless.

Have you ever done or said something like the 3 items below to help foster new ideas?

  1. Set up a process to submit ideas that prove an economic advantage to the company
  2. “Come to me with a problem AND a proposed solution
  3. Put up a suggestion box
These are just a few of the ways I have come across in my 30 years of management and coaching.  They all have good intentions but, usually, have unintended consequences.  The process created to submit new ideas can be lengthy and complicated thus discouraging participation.  The Problem/Solution approach can cause problems to fester if the proposer cannot think of a viable alternative and stays silent.  The suggestion box has failed time and again without proper feedback to all submitted suggestions.  Even though you may have moved ahead with some of the suggestions, everyone must be acknowledged to keep the ideas flowing.

Not there yet

Ari Weinzweig and his team at Zingerman’s have crafted a well thought out process over a number of years that has allowed them to grow the company, a team of leaders and idea generators.

In 1982, Zingerman’s started as a tiny bakery in Ann Arbor, MI and is now a ~$60M food conglomerate. A process that helped accelerate growth, generate ideas and grow leaders is called Bottom Line Change (BLC).  There are webinars to attend, classes to take and books you can read to get the full picture (link to the site at the end of article), but here are the highlights of the process:

Bottom Line Change (BLC) -> 5 steps

Premise: Any change relates to fixing a problem or creating an opportunity.  Everyone should be invited to participate in the change process. All change creates resistance. The way to affect change is to overcome resistance. 

Their formula for change is:

Dissatisfaction x Vision x First Steps > Resistance

If any of the factors on the left of the equation are zero, you will not overcome the resistance and change will either not happen or will wither and die soon after implemented.

A way to overcome resistance is the following proven, 5-step process:

1.  Write up a clear and compelling purpose for the change. Share this proposed change DRAFT with a few people (don’t ask the senior team) who will be impacted to ask for feedback.  This helps the change leader get really clear about why he or she believes the change is beneficial and how badly it’s needed. It also gets others clear on why the change is a good idea (or not). If you cannot excite enough impacted people then the change may not yet be compelling enough.

2.  Write up a positive vision for the change and get leadership buy-in.  Share this positive vision DRAFT with a few people who will be impacted to ask for feedback. To be effective, regardless of content, the vision must be:

  1. Inspiring
  2. Strategically sound
  3. Documented
  4. Well communicated.

Present this to the senior team or similar body that would review for the four factors above.

TIP: Line up your ACEs: ACE stands for Advisory Content Experts. These are people who might have valuable insights and contributions and who can help craft the vision early on in the change process. They are people who have some content expertise to contribute.

3.  Engage a microcosm of people to manage the way you share the change.  That is, the microcosm will determine who needs to know and what is the best way to tell them.

This group doesn’t need to have any expertise on the topic at all – it only needs to have some smarts.  You are looking to create communication strategies that build positive energy within each possible subgroup that will be affected by the change.

Over the course of a couple of minutes or a couple of days, the champion will ask the same two questions of the microcosm:

  1. Who needs to know about the impending change?
  2. What’s the best way to get them on board?

4.  Inform everyone impacted by the change and have THEM (or a subset) draw up an action plan to implement it.  I think this is the most powerful step in the process.  There is a saying that “People do not like change”.  I think this is untrue.  Change happens every day in everyone’s lives. What we dislike most about change is having it foisted upon us.  This step helps to increase the likelihood that the change will stick.

5.  Implement the change.  The shorthand for this step is as follows:

  • Plan
  • Do
  • Check
  • Adjust
  • Celebrate success – VERY IMPORTANT!

For more on this, please visit the Zingerman Training website – ZingTrain – for the BLC pamphlet. There are many other resources on the site as well.

Be Exceptional!

Bill  – Certified Premium Scaling Up Coach

(bill@catalystgrowthadvisors.comwww.catalystgrowthadvisors.com)

* Ask me how your state may help pay for my leadership coaching services.  For MA companies, click here to see if you qualify for 50% (or more) off my fees.

How to design a solution that your best customers want and value with one question

While there is one question to ask to ensure that you can get inside the heads of your customers there are a few steps to first take to optimize the process.  They are :

  1. Figure out who your best customers are
  2. Create a list of your best customers and order them appropriately (process to follow below)
  3. Ask the “question”
  4. Collect answers and look for a pattern(s)
  5. Leverage the great information you have gathered (suggestions below)
People icons headI believe that knowing your customer is the single most important external element that drives your strategy.  Strategy is about choice – what you choose to do and more importantly what you choose not to do in order to succeed* in the marketplace.  To figure these choices out, you must understand what your core customer truly wants and values. Another way to say it is, you must understand the Job to be Done.

Personal Example

When I first started as VP of Sales at a data backup company called LiveVault, I asked the existing team why our customers buy from us.  I was told that we are in the business of selling “insurance”.   That is, our customers wanted an “insurance policy” in case they lost their data for some reason.  This sounded like a pretty good answer as it was not about what we did but what the customer valued.  They were willing to pay us a monthly fee to automatically backup their data every few minutes and store it on our servers so it could be easily and quickly retrieved should disaster strike.

However, I did not stop there. I wanted to hear directly from our customers.  During my first few weeks, I interviewed about 20 existing customers to ask them why they bought from us.  What I heard was a completely different story than I heard from the LiveVault team.

I spoke primarily to owners of SMBs, our main customer segment, and most of them told me the same thing in almost exactly the same words when I asked this question. “What is the most valuable thing you derived from using our service?” -The answer – “Set it and forget it.”

Wow!  We were selling insurance but they were buying time.  They were super busy and this was one less thing to worry about.  They valued eliminating a boring and tedious task from their day more than whether or not they might lose data. They wanted to focus on their business. They valued the data and did not want to lose it but this was not the primary reason for the purchase.

Your Homework

The following exercise is a simple and easy way to check back in with your customers. This is a step you can do to more quickly get valuable data. However, it does not replace the need to continue to learn from customers directly in face to face interactions preferably. The steps follow:

  1. Create a list of your current customers and order them by profit (% and/or total profit dollars). (IMPORTANT: Your list should contain the name of the key decision maker (if they are still at the company) and the key person who uses your product/service most often today (if they are different people.). There are variations of this based on the complexity of the buying process so use your best judgment remembering that the fewer people the better and one name is best.
  2. Create two additional columns with the following headings:
    • You REALLY love working with them(i.e., they are easy to work with, do not haggle on price, provide proactive referrals and are happy to provide references when asked.)
    • They REALLY love working with you(i.e., they tell you how much you have helped them in their jobs, lives, businesses and talk about you often with others.  You can hear their smile on the phone.)
  3. Put an X in the column where appropriate for at least the first 20 customers.
  4. Re-order the list by pushing all the customers that meet both criteria above to the top. Maintain the profit order.
  5. Move to the one question process below.

Ask one question

Creating this list of your best customers, in and of itself, may be illuminating.  However, it also is the list to whom you will ask one critical question. Here is what you do next:

Craft an email to the people you listed for each company for at least the top 20 customers on the list and ask the following:

Dear XXXXXX,

Thank you for being a great customer.  We value your business and your input to help us continually improve.  To that end, please reply to this email based on the following request:

If you were to describe to a trusted colleague that you believe would benefit from working with us as to why you do business with us, what would you say? Please write anything you feel would be most helpful for them to get the best sense of what impact working with us might have on them and their team. How working with us might make their lives a little bit better. Please be sure to also include the following information:

  1. The most valuable thing that you (and /or your team) get from doing business with us, (i.e., how we helped you with a current struggle and how they might feel once we helped to make things easier or better for them as well) and,
  2. (Bonus future-proofing question) If you had a magic wand where anything was possible, what else would you want us to provide to you and how that would make things easier or better for you (and your team)? Please be specific.

When the answers start to come back, it is highly likely that you will start to see a pattern and get some new ideas on how you can add even more value to your best customers.

From this information, you can do a number of things. Here are some suggestions:

  1. Modify your offering to get much better at what your best customers value.
  2. Eliminate or minimize some of the things that they do not value and are costly for you to provide.
  3. With permission, use their replies as testimonials in your marketing and sales efforts.
  4. Create a target list of future customers that you think are much like the top names on this list including those already with competitors.
  5. Train your salespeople to start saying the words that you read in these notes when talking to future prospects.
  6. Consider firing the customers at the very bottom of the list as you may be losing money or making little to no profit from them.  They are very likely taking valuable time and resources away from your most profitable customers and affecting employee engagement. (IMPORTANT: You must create this list for ALL current customers for this part.)
  7. If not established already, have the leadership team cultivate a relationship with the key decision makers at your top customers that drive 80% or more of your profit. They are the lifeblood of your business!
  8. Have your product people talk to/observe these users to get ideas on how you can improve the experience.
  9. Contact the names on the list to get further clarification, when necessary, as to what they want and value the most.
  10. Ask for the names and permission to contact the trusted colleagues they were thinking of.
  11. Create your Core Customer sentence that describes the common 3-5 key attributes and what they want and value the most from working with you. For instance, “Our core customer is an extremely busy, small or medium business owner between the ages of 35-50 that greatly values their data and are looking for data-backup solutions where they can “Set it and forget it”.  Communicate this sentence in such a way that if I walked up to any team member at random they could recite it off the top of their head.

If you come up with more ways that this information could be helpful, please share them with me.

Here is a simple template to help you get started.

Good luck and let me know how this goes.

Be Exceptional!

Bill  – Certified Growth Coach

(bill@catalystgrowthadvisors.comwww.catalystgrowthadvisors.com)

MA COMPANIES ONLY – Ask me how your state may help pay for my leadership coaching services.  For MA companies, click here to see if you qualify for 50% (or more) off my fees.

*Adapted from John Wooden’s definition – Peace of mind attained only through self-satisfaction in knowing you made the effort to do the best of which you’re capable to grow your business, yourself and your team.

How to do more that matters by doing less

As a leader, you make dozens, if not hundreds of decisions each week.  If you took the time to write them all down and then identified the ones that made a significant impact on the team and/or the business, I bet you could count those important and significant decisions on one hand.  Imagine if you made one or two more of those each week.  What impact would that have on your business?

This post will provide you with examples of the changes you can make with how you lead your team and manage your time so you can spend more time focusing on the business decisions that truly matter.  As the 80/20 Principle has proven time and time again – “very few things matter at all; but those that do, matter enormously.”

80-20-rule

 

Here are some examples of the Principle at work from The 80/20 Manager by Richard Koch (pronounced Kotch):

  • Just 1.5 percent of the world’s languages are spoken by 90 percent of people.
  • A study of 300 movies released over eighteen months found that four of them—1.3 percent—commanded 80 percent of total box-office receipts.
  • In common speech, less than 1 percent of words are used 80 percent of the time.
  • The delightful Bill Bryson tells us that there are thirty thousand different edible plants on our planet. Yet just eleven of them account for 93 percent of everything we eat—to the nearest whole number, that is a 93/0 relationship (as eleven is 0.04 percent of thirty thousand). Can you name those eleven plants? I came up with potatoes, wheat, corn, rice, beans, and barley.
  • The thriller writer David Baldacci says that 3 percent of Washington DC’s zip codes account for more than 70 percent of the city’s violent crime.

The ten 80/20 manager types as described in Koch’s book are found below (along with details on each):

  1. The Investigating Manager
    • Am I a detective?  Here are some questions you can ask:
      • Which single powerful idea will turbo-charge my business?
      • Who are my most profitable customers and how are they different from the rest?
      • Who is achieving great results and how?
      • What are my most profitable product(s)/product line(s)
  2. Super-Connecting Manager
    • Make a list of weak ties of the people that you believe are connected to or are your target customer
    • Focus on the super-connectors first. Those that have the largest and most active networks.
  3. Mentoring manager
    • How can I find ways to support my team as individuals and as a group
    • Am I creating an environment where people feel safe to leverage strengths and seek help for weaknesses?
  4. Leveraged Manager
    • Have I visualized success?
    • Am I focused on identifying and making the few decisions that matter the most?
    • Am l leveraging what I love to do and am good at delegating, eliminating, automating or procrastinating about the rest?
  5. Liberating Manager
    • What am I doing to bring out the best in each of my team members?
    • Am I putting the success of the team above my own?
  6. Meaning-seeking Manager
    • Am I seeking to live a life of meaning and purpose?
    • Am I encouraging and supporting my team to live a life of meaning and purpose?
  7. Time Rich Manager
    • Am I spending my time on decisions and actions that have outsized output?
    • Am I looking for ways to escape the tyranny of the moment and thinking how to shape the future to be radically better than the present for me, the team, the customer and the organization?
  8. The Simplifying Manager
    • Am I looking for ways to make key business processes as simple as possible and no simpler?
    • Am I starting each day and week with one simplifying objective?
  9. The Lazy Manager
    1. Am I striving to combine being lazy with intelligent thought and high ambition?
  10. The Strategic Manager
    1. Am I constantly looking for dramatically better ways of doing business?
    2. Can I create a simple statement that encompasses our strategy?
    3. How can I help create a strategy that would put my own company out of business?

There is no need to try to be all of these different types of 80/20 managers.  Start with one that best fits your style and personality and then nail it before considering a second type. Please note that it may take months or even years to master the first one.  Be patient.  Be diligent. Be disciplined.

For more depth on this topic, I recommend picking up Koch’s book – The 80/20 Manager.  It is a practical guide to help you use these today in your role whether you are a leader or on the front-line.  Here is a short interview (3 min. video) of Koch at the London Business Forum.

Here is an amusing bonus video (6 mins) showing how doing the most important things first can impact your life and your business.

Bill – Certified Scaling Up Coach

Be Exceptional!

bill@catalystgrowthadvisors.com, www.catalystgrowthadvisors.com

MA companies – Visit my site to see how you can get the state to pay for 50% of my leadership coaching fees.

How Alan Mulally saved Ford Motor Company with four simple decisions

Alan Mulally

How Alan Mulally saved Ford

It was the summer of 2006, Alan Mulally was knee deep in getting the Boeing 787 “Dreamliner” designed and built when Bill Ford asked him to take over his role as President and CEO of his eponymous company.  Ford Motor was slowly going out of business, as were the other major car companies, due to years of hubris and poor management practices.  Bill Ford was over his head and needed help.  Mulally was tasked to come in and save the embattled company.

Ford knew that Mulally was his best and last chance as he had pulled off a similar miracle of sorts years ago at Boeing. In the 90s and early 2000s, Boeing was getting its butt kicked by Airbus and needed to do a better job of designing and building competitive aircraft.  It took several years, under difficult circumstances (9/11 being one of them) for Alan Mulally to lead the process that successfully turned Boeing around.  Ford wanted him to do it again. This time in Dearborn, Michigan.

Mulally did not want to leave Boeing. It was the only place he had ever worked since graduating college.  He loved the company. He loved designing and building airplanes.  He and his family loved the Seattle area where Boeing was based. However, it was too tempting to be asked to run an American institution such as Ford. Moreover, his aerospace engineering background favored solving difficult problems such as the one laid out by Bill Ford.

Once he finally agreed, Mulally spent time learning as much as he could about the business and the industry. He was a quick study and became confident that he could fix the ailing Ford.

Ford had a toxic, macho culture that was ruthless to outsiders, had forgotten its customers, and had an outdated and bloated product lineup of vehicles that fewer and fewer customers wanted. On top of this, they were running out of money. His task would not be an easy one.

Mulally quickly won over the company and its board of directors.  In 8 years, he took a company from the brink of collapse to dominate the industry.

How did he do it?

Mulally focused on the basics. He had a list Core Values of how to run organizations. He honed them over 20+ years.  They were the bases for his success at Boeing. When he came to Ford, these simple rules were the foundation of this unprecedented turnaround.

I was fortunate enough to hear him speak last year at a Vistage event as he described in some detail the incredible story.  Mulally used just ONE slide for the entire hour-plus talk as he walked us through his 10 Core Values and the parts they played. Here they are:

  1. People first
  2. Everyone is included
  3. Compelling vision
  4. Clear performance goals
  5. One plan
  6. Facts and data
  7. Propose a plan, “find-a-way” attitude
  8. Respect, listen, help, and appreciate each other
  9. Emotional resilience … trust the process
  10. Have fun … enjoy the journey and each other

He also came up with four decisions below that he knew Ford had to get right in order to climb out of its tailspin.  Coincidentally, these decisions line up well with the framework of People, Strategy, Execution, and Cash that I use as a foundation for the work I do with my clients.

(American Icon book excerpt) On November 14, (2006) as he was finalizing his presentation for the board, Mulally finally managed to distill everything down to four simple points:

1 Aggressively restructure to operate profitably at the current demand and changing model mix. (EXECUTION)

2 Accelerate development of new products our customers want and value. (STRATEGY)

3 Finance our plan and improve our balance sheet. (CASH)

4 Work together effectively as one team. (PEOPLE)

Not only did Mullaly and the team from Ford execute an improbable turnaround over the next several years by relentlessly executing a strategy focused on the customer by a cohesive team, they did it during the Great Recession.  GM and Chrysler needed taxpayer money to bail them out.  Ford did not take a dime.

Suggestion: Write down your four simple yet impactful decisions to drive your company over the next few years.  Can you distill them down to one sentence each?

I encourage you to read the entire fascinating story as told by Bryce G. Hoffman: American Icon: Alan Mullally and the Fight to Save Ford Motor Company.

Bill

Be Exceptional!

 

* Receive 50% of the fees for this workshop paid for by the state of MA.  Click here to see if you qualify.

“Like many good coaches, Bill knows that buy-in, follow through and confidence are enhanced when ideas and priorities are generated from within the organization. Bill will motivate and guide you to do the work and make progress producing alignment and results” – Global Educators’ Office of the President

If you do these 7 things well, you will almost certainly be successful

success funnyCompiled from different sources* and my own experience, I believe that if you do these seven things well, you will almost certainly be successful:

  1. Create a success vision – How can you recognize that you have arrived if you do not know what the destination looks like beforehand?  Your first step is to create a positive vision of what success looks like. Don’t worry yet if you can achieve it.  Get creative, be optimistic!  Create the best possible outcome you can this of. Describe it in as much detail as you can. Write it down (Tool).
  2. Have clear goals to achieve that vision – Having 5 or fewer goals is key, Ensure that each goal has an owner, a completion date, and metrics to measure progress (leading) and accomplishment (lagging).  Tools – Use Who, What, When (#11) with leading and lagging KPIs (or OKRs/indicators) explained here.
  3. Identify the problems that stand in your way – Be Precise.  Avoid mistaking a symptom for a problem.  (For example – We need to hire better sales people to hit our goals – possible symptom or problem.  We have a poorly thought-out strategy – possible symptom or problem.  We do not have the right leadership team with the right skills to craft a compelling strategy – likely problem)
  4. Accurately diagnose the problems’ root causes – Focus on “what is” before tackling what to do about it. Spend at least fifteen minutes (up to an hour based on complexity) thinking through the issue, pulling in relevant people who can assist when appropriate.  When you feel you have properly diagnosed the problem, move on to Step 5.Tool – Use 5 Whys exercise
  5. Design plans that address or get around the root causes – Reflect first.  Realize that there are many paths to addressing most issues.  Consider as many as feasible.  Write down the optimal plan as a “DRAFT” and share it with all of those who will be impacted to solicit feedback BEFORE making the final decision. One effective approach is to have the same people who will implement the plan write the final approved version as they are the best equipped to know the details and will, likely, handle most of its execution  This promotes buy-in and ensures a more complete and proper execution. (Writing “DRAFT” on the top shows everyone that you are serious about wanting feedback and are open to the fact that you may not know everything.  This also helps change to take place more readily.)  Tool – Use The Map as your guide to understanding the plan’s impact on all relevant external parties in addition to internal parties discussed above.
  6. Execute rigorously – Focus and discipline are key.  Expand the five main goals into sub-goals/tasks for each until you have a complete set of specific and measurable steps for all impacted parties for the next quarter and beyond if appropriate.  Hold regular accountability meetings at all levels to check progress (at least weekly)  Execute the plan for at least one quarter if not two quarters before you step back and re-assess. Tools – Use Who, What, When (#11) with leading and lagging KPIs or OKRs explained here. (aka metrics).
  7. Learn; Return to step 2 – You may want to make sure your vision is still achievable (Step 1) but I recommend going at least one year (assuming it is a big one) before re-examining it.

I highly recommend that you follow each of these steps discretely and boldly.  Focusing on each step separately will free you from figuring out how to accomplish some or all of the steps in the process at the outset which can limit thinking.  Also, be bold. If you limit your vision and goals to what you know, you may be setting the bar too low.

Good luck!

* Sources – Ray Dalio – Principles, Verne Harnish – Scaling Up, Ari Weinzweig – CEO, Zingerman’s Bakery, Author of many business books

Please contact me if you have any questions.  Take a look my Resources page to see my Suggested Reading List, Podcasts, and other Business Tools.

Bill (bill@catalsytgrowthadvisors.comwww.catalystgrowthadvisors.com)

Certified Scaling Up Coach

Be Exceptional!

Scaling Up Workshop II

One Day ScalingUp Workshop – 4/12/17

The world-renowned Scaling Up Business Growth Workshop empowers you to accelerate profitable growth using a time-tested and results-driven methodology. Through this exclusive learning experience, Gazelles Coaches has empowered more than 40,000 executives and their leadership teams with proven tools and strategies to scale up smarter.

Register here.