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I mentioned last time that any effort to craft strategy must be aimed at creating a UNIQUE STRATEGIC POSITION. I also mentioned that current practices are inadequate. What is required is a dynamic approach that replicates the success of strategic innovators.
Such an approach is to be found in this THREE-Fold framework of strategy formulation that concentrates on:
- Customers and value; the issue here is to question how to achieve full value and service for customers – something that strategic innovators understand – the majority give the area lip service ONLY.
- How we respond to customer demands for value with a proposition based on our market mission, distinctive capabilities, strategic assets and our ability to differentiate against the competition instead of unimaginative ‘me-too’ responses to every problem and opportunity.
- Building an organisational environment that supports creativity and inventiveness, excellent relationships with customers, staff, collaborators the development and implementation of our strategy.
More next time
Best wishes
Andrew Pearson
If you’ve been following my earlier posts on business strategy you might be asking how strategic innovators achieve the results they do.
I believe there is only ONE system to formulate a superior strategy and implement it. It’s not “my” system, it is THE system. Many use the same basic system. Some do it better than others. Some understand it better than others. But, at the end of the day, it’s the
same system.
I call the system the “The Complete Purpose Driven Strategy System”, a SEVEN Step Guide to Creating a UNIQUE STRATEGIC POSITION for Your Business.
I’m going to explain this system to you over the next few posts. And along the way, I’ll present each part of the system and share some insights that are exclusively my own.
Each post will show you why creativity and innovation is more important in strategy formulation than analysis and process. And if you’re serious about differentiating your business they will reveal how to invent fresh strategic positions and leverage more success from your current strategies.
A fuller account of the ‘SEVEN Step Guide to Creating a UNIQUE STRATEGIC POSITION for Your Business‘ is being offered as a free e-Book download for a limited period from andrew@real-results.org
Best wishes
Andrew Pearson
What companies like Apple, Starbucks, Dyson, Virgin, Amazon.com and even Skoda - and many businesses like them - have shown us, is that a superior strategy is as much about being simultaneously in tune with customers as it is with being two steps ahead of competition.
Should we question conventional strategizing processes?
Yes we should! For the most part I don’t think it’s too much to say that what really characterises the pursuit of these goals today is, alas, superficial strategy formulation - a judgement based on contemporary observation in the light of what successful businesses have achieved.
Why is this? There are several reasons; a preference for the status quo, inadequate relationships, poor processes and a general lack of creativity are but a few. But one stark fact stands out. It’s this; we are told WHAT to do to strategize but not HOW to strategize in practice!
And why is this, you may ask? Because of the dubious nature of conventional strategic formulation, and its application, I would answer.
The character of conventional strategic planning
The structures and frameworks taught by most business schools, consultancies and training organisations are too rigid. They analyse the past to death and prescribe the future through bifocals based on 4-box matrices. However, the future is not contained in the ‘Boston Box’, Porter’s 5-Force Model or even a S.W.O.T - or anything like these models.
Such processes can not possibly help managers invent new and lead the way in how things are done to create value for customers and stakeholders
Increasingly the really overwhelming competition for a company or a product does not appear from the expected and anticipated sources - the traditional ‘me-too’ competitor - it comes from someone you’ve never even heard of, let alone dreamt that they could take your business away from you.
So where do we go from here…?
I’ll tell you in my next post
Best wishes
Andrew Pearson
What allows strategic innovators to predict the future is their reliance on measures of BOTH ‘strategic’ health AND ‘financial’ health of their businesses.
By adding strategic measures people it’s possible to get a couple of really powerful indicators:
1. An early warning system that allows them to question things before a crisis occurs, AND
2. A means of identifying new unique strategic positions to sustain growth.
The list of strategic health measures is long, they may include; customer satisfaction, market share, changes in the industry and the company’s fit with the changing environment, distributor and supplier feedback, employees morale, strength of company culture, innovation and new products in the pipe line.
Now if we are in agreement that these pretty fundamental measures tell us a lot about business survival and success, a simple question remains to be answered, namely; what tools do we have that can help us do the job of finding superior strategies – and if we want to go further with this – how good are they anyway?
I’ll tell you in my next post
Best wishes
Everybody who is responsible for strategy formulation should be actively considering how to rejuvenate their businesses. In other words to seek out and be ready to allow their businesses to embark on another growth curve – and just when the new growth curve is about to peter out, find ways for their companies to rejuvenate themselves again and prepare to get on a new growth curve and so on.
Clearly, for this to happen, a company is required to adopt a questioning attitude; an approach that continually challenges the status quo – no matter how successful the business is. This would enable the business to fend off trouble before it arrives and would allow it to find address rejuvenation.
But as most managers see and follow only an upward trend line and are successful in achieving growth – and must certainly be doing something right - they are entitled to ask; “Why would we want to change? Surely no one can predict the future?” So justifying calls for action NOW on the basis of what may or may not happen now is a dangerous business?
Therefore, a related issue is for managers and business owners to identify their businesses’ position on the growth curve and hence pinpoint whether or not the moment for rejuvenation.
The difference between most people responsible for strategy formulation and strategic innovators seems to be that the latter have a window on the future, they seem to know a few years before a crisis impacts that they must circumvent it and indeed decide how to do just that!
Best wishes
It is incredible to think of Marks and Spencer, a company that had enjoyed a long history of growth and profitability, until the late 90s, slipping into decline.
Needless to say, the middle of a crisis is the worst time to implement strategies for turnaround – let alone planned growth. For at such periods a business lacks time, but also resources, experience and credibility to develop a new path of long term success.
It’s often said that; ‘an ounce of prevention is worth a pound of cure’. Few managers would disagree with the truth of this principle… but few actually abide by it.
The consequences of maintaining the status quo
Most business owners and managers’ start thinking about change when profits are already in decline – and worse still only start doing anything about it when things get worse!!! This has dire consequences because these companies leave yawning gaps for strategic innovators to fill simply because they fail to actively seek new positions from which to offer their customers more value.
It’s surely much more prudent to introduce new flows of cash and profit with fresh strategic positions and more exciting technologies - when in growth - before maturity hits!
I’ll tell you in my next post
Best wishes
Good morning! Hope your New Year is going well for you.
Last time we looked at the phenomenal success of Apples’ iPhone strategy. If you remember I mentioned that I’d go a little deeper and answer the question: “What does it take to develop a unique strategic position?”
Well, you may be surprised to know, research that we’ve gained from working with hundreds of companies over the past 10 years, shows that all successful superior strategies share the same underlying principles – despite their surface differences.
My argument is that by understanding these basic principles, any director, manager or business owner can use them to design a successful strategy.
And here’s another observation…
If you’ve ever looked closely at strategic innovators, you will have noticed that formulating successful strategies is a never-ending job. Just because companies like Easy Jet or Tescos have superior strategies today it doesn’t mean to say that they will be successful tomorrow!
Far from it! Tomorrow’s success is dependent on a strategy that will be superior in tomorrow’s market; and to continue to achieve that means applying the same fundamental principles yet again to craft another winning strategy once the current strategy has run its course.
Best wishes
May we wish you the best of new years in 2008! And welcome to the first of a series of posts on business strategy - starting with something that may have been a stocking-filler!
Why mention the iPhone?
Apple has said that it’s on the way to selling 1 Billion iPhones in the next few months. Judging by the news and hype (and the ecstasy I saw on a friend’s face who bought one recently) that quest seems to me to be distinctly achievable.
What’s also staggering is that Apple has muscled its way into one of the world’s most brutally competitive markets, rattling the mobile phone industry’s most dominant players by producing the No. 1 ‘must-have mobile phone on the market’.
Ever since Apple unveiled the Macintosh computer in 1984, it has become the standard-bearer of how to market consumer products.
It has transformed into an increasingly commanding force in the new digital universe by combining innovation and design in ‘got-to-have-it’ gadgets. Firstly with the iPod (which changed how we listen to music) and latterly with the iPhone (which has re-invented how use a mobile phone), Apple has achieved technological dominance.
For this reason Apple has shown us what a superior strategy based on a unique strategic position is all about.
The Secret?
What Apple shows us – and other businesses like it – is that strategy is as much about insight and vision as it is about being simultaneously in tune with customers and two steps ahead of competition.
Think about it for a moment. How many businesses do you know who have created and occupied a unique strategic position? And how many of them do you know who have actually gone on to find another one – and another – consistently offering their customers even more value?
A handful probably.
Yet such superior, and successful, strategies share the same underlying principles. Thus the principles behind Apple’s successful iPhone strategy are essentially the same as those that took Marks and Spencer to market leadership 100 years ago!!
What are these principles? Well that’s for next time. See you then.
Best wishes
There are two ways that work should be done inside your business: by SYSTEMS and PROCESSES.
Earlier we said that if your business depends on YOU, you don’t have a business you have a job! Well the solution is to be found in setting up systems and processes.
(1) Systems take the form of manuals, written scripts, standard forms, checklists, and standard letters and so on. For instance do you have systems for such things as identifying prospects, persistently chasing every prospect in a way that they are made to feel welcome, generating a continuous stream of referrals, recording and following up every single sales lead and much, much more?
Systems are so vitally important because…..anyone can …
• Operate them – so you can step away from working IN the business and concentrate more of your time working ON the business, and the other things that are important to you too.
• Run the system so the business is less dependent on any individual or group which means that you’ll never need to fear staff illnesses, retirements, defections and industrial disputes again.
• Replicate past success using the system.
The great thing about systems is that what you do, how you do it and the results you get all become more consistent and predictable – and you can achieve more – in less time!
Let’s move on…
(2) Processes One of the keys to making business more successful is to identify your most important processes, decide how they work and what they deliver and do everything possible to make improvements where necessary.
Processes are so vitally important because…they help to…
• Optimise the way you do things inside your business.
• Pin down the activities and responsibilities of your team, the links between team members and you, as well as the deliverables and timescales involved.
• Appreciate and understand the flow, the interactions, and the sub-processes and sub-activities that are constraining your performance.
It’s impossible to achieve optimum performance in your business with flawed processes. Most problems in business are due to faulty processes, not human problems, nor anything else. That’s why having a tool as powerful as a process is crucial to streamlining your business operation.
Points To Remember Are:
Concentrate on what you do best and outsource the rest so that you can get on and grow your business.
• Consider what your business does best, stick with it and recruit and outsource skills to help you achieve your goals!
• Many businesses deliver mediocre levels of performance because they fail to operate effective systems and processes.
A Valedictory Recommendation
I would like to wind up with a single deep-seated RECOMMENDATION, one that speaks of the character of the business owner. It is to be found in the tale of a great business leader, Andrew Cook, an individual that applied the skills we have covered in this Business Growth Series, but who in addition characterises what is best in human endeavour in the business world.
This factor we would suggest is the Ultimate Recommendation for Real Business Success!
But judge for yourself!
In the 1980s Andrew Cook, on taking over William Cook, a well established family owned engineering company, immediately invested in increased efficiency, quality and capacity in the industry’s least value segment – at a time when capacity was double the amount of industry sales– and industry output had been falling for a number of years.
Cook’s didn’t have the image of a Mercedes or an IBM amongst its customers. Neither was it a technological leader, nor did it possess secret processes to guarantee extra income. Conventional thinking would have suggested that Cook milks the business and leaves the industry, or goes into a higher value and differentiated niche. But no, Cook invested in capacity, capability and quality improvements.
Rivals thought he was mad… All seemed against him.
But his insight and efforts yielded results quickly. Within a few years sales had risen 10% against industry losses. He was the first to invest in BS5750. Within a couple of years he had acquired two of his major competitors and by the ‘90s he had become the market leader.
The recommendation we advocate here is concerned with one of the most admired human attributes of all – that of FORTITUDE.
William Cook’s own summing up of this ideology is to be found on the company’s web site;
“Press on. Nothing in the world can take the place of persistence. Talent will not; nothing is
more common than unsuccessful men with talent. Genius will not; unrewarded genius is
almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.”
A Final Point To Remember Is:
He who is slow to anger is better than the mighty, and he who rules his spirit than he who takes a city. Proverbs 16:32
Let’s say that you have good email marketing skills but few in personal selling. What would be a better use of your time – to get on with product selling and spend less time on email marketing or recruiting selling skills into the business to help you out?
The subjects of recruitment and outsourcing concerns choices between CORE and NON CORE work.
Ultimately CORE work boils down into two principle activities:
1.) Getting more customers with great sales and marketing tactics
2.) Giving customers more value with a pipeline full of products and services
NON CORE work, as we have said in Module 2, is concerned with ‘technical’ work.
What you have to do is decide what type of work you should concentrate on. I think by now you should have begun to think about concentrating on the CORE work of the business.
This means that you should clarify what you - and your business - can really do that’s of real value for your customers and then focus on capabilities to build and sustain this positioning.
Peter Drucker, a favourite business writer of mine, goes one step further. He says;
“Do what you do best and outsource the rest.”
Which question are you asking yourself when you consider outsourcing or recruiting someone?
When you take the outsourcing route your focus is on getting an activity done – one which might be done better by someone else. You are forced to continually go through the selection process each and every time you need the job done but you should never ask the question “where or how can this be done the cheapest?” because you’ll always end up with what you deserve.
Outsourcing and recruitment is about finding and then developing long term relationships with people who have expertise outside your own. The better question to ask is “how can I maintain access to a talented person who can do – or help me do – XXXXXX on a long term basis, so I can get ON with the business, seize on new opportunities as they present themselves and be assured of a quality job?”
Do you measure the results of your business building tactics?
When you tot up your expenses, including sales costs, your marketing probably accounts for around 10% of your operating budget – if not more. But many business owners and managers don’t have much idea as to where all this money is going to, let alone the results that are being achieved. In other words they spend money on brochures, advertisements, web sites and so forth with no real way to link specific results to specific actions.
Knowing which marketing tactics pay dividends will save you time, money and effort by allowing you to focus your marketing budget on activities that work. This means that you should learn how to measure the effect of your marketing efforts to increase revenue and profit.
Create your dashboard
Think of it like this. You are flying your personal Learjet to the Caribbean for a well earned break. You’re flying at night at 30,000 feet and your only help are the instruments on the dashboard. Similarly, can a business guide its flight towards its objectives without a set of dashboard dials? Of course not!
Every business needs a set of dials or controls – or metrics as they are now called. We can have the best of plans but metrics are the things that drive them. The most important of course is profit. But what if I asked you to name a couple metrics that are fundamental to business success? Could you name them?
Two of the most important metrics for growing business are;
1. Cost Per Acquisition
2. Lifetime customer Value
These metrics are so robust that just knowing their values will give you a pretty clear idea of how well your business is doing – and what’s more how to make it even more successful. Just to make sure we are really clear about this let me explain what these metrics will do for you:
Metrics will allow you to measure your marketing and business results, eliminate unproductive marketing tactics and they will help you save money and make more money, by showing you which marketing tactics you should reinvest in.
Points To Remember Are:
• Marketing planning should concentrate on tactics to attract customers and tactics to keep, reward and make the most of your customers’ loyalty.
• Optimise the way you measure your business activities and results in order to grow your business.
If your attempts to grow your business have met with sluggish results even though you have got the other result areas that are presented in this Business Growth Series in place – it’s almost certainly your MARKETING TACTICS that are holding you back and restricting you to lackluster results.
Let’s look at some of these tactics now.
Quite simply we can separate marketing tactics into two camps; “Front-End“ and “Back-End”.
You can think of “Front-End” as the first sale; the pipeline that brings new customers into the business. The “Back-End” is the product (or hopefully the series of products and services) that you sell to your customers after they have purchased your initial offering.
The question to ask now is what tactics you should use in each area? And here they are:
Clearly front-end marketing is vital for your long term business success. This is why it’s so important to inject the power of marketing into your business so that you can increase the number of customers that come to your business as a continuous flow…
I said previously that people buy for emotional needs and those emotional needs are never fulfilled. Your role as a marketer or as the business owner is to continue to exploit those needs because it’s the emotional void that creates the desire to buy that never gets fulfilled by the purchase of the product or service. Therefore, in order to do your job right, you need to have multiple products and premium offers on offer throughout the length of your pipeline – or at the back-end.
You’ll always make more money from back-end offers than from front-end ones. They offer a much higher conversion rate, they usually sell for more money and you can make a bigger percentage on the profits on them too. And it’s always easier to sell to a customer than a prospect.
But remember the long term; you must have customers coming into the business. You can’t just rely on your loyal customers. By the way, if you have competition then you can bet that most are competing at the front-end and trying to attack your front-end offers with their own so as to eventually weaken and erode the strength of your own USPs and offers.
The question I have for you is this; are you doing any type of marketing whatsoever, and if you are where is the focus of your efforts?
So once you have found your HUNGRY CROWD …WHAT next?
The trick is to find a distinguishing benefit that conveys the problem you will solve or the “want” you’re trying to satisfy that sets you apart from your competitors. This benefit – or unique selling point (usp) is the foundation for your business for it defines what you do or say. In short it helps you:
• Attract and keep customers
• Accelerate market diffusion
• Create a point of difference
• Fill a perceived gap in the market place
• Motivate prospects and customers to act
There are many examples of this type of ‘selling point.’ Only the other day I overheard a major financial institution marketing its high interest bearing ISAs with the message; ‘finding ideas for your money!”
How to come up with a winning offer
The challenge is to explain or to present in conversation and in literature, COMPELLINGLY, what you do to provide a major advantage to your customers that your competitors don’t, or can’t offer and turn this into a few words that offer the means to GRAB your prospects’ attention.
Here’s one way - a 5 step USP generator …
1. Find the problem people have most trouble with …
2. Identify the implications of the problem … ’which means …’
3. Define your solution … ’well, what we do is …’
4. Describe the benefit of your solution …
5. Distil the results down and find the few compelling words that make the difference.
So use the USP generator, it will help you find in a WORD; the solution customers want most and it will help you to stand your business head and shoulders above its rivals.
Points To Remember Are:
• Build a business around a HUNGRY CROWD for whom you offer value with a pipeline of products.
• Prospects and customers have got to see and understand why they should buy from you and how you are different from your competitors, so find the COMPELLING WORDS that will do this for you.
Every week new companies emerge selling their products and services, whatever the type of business. And there are also many successful companies out there looking to expand their businesses. Competition, both good and bad is rife!
So how can marketing help? Can you answer that one?
Simply stated the first rule of marketing is causing the market to desire your product. Peter Drucker puts it another way when he said that;
“… the aim of marketing is to make selling superfluous.”
In short both definitions add up to the same thing; marketing that attracts customers may be described as power marketing.
People have got tired of leaflets, flyers and sales letters. The reason why some product launches are successful is that the people managing them actually marketed them. Business owners that know about marketing try to find out the emotion that makes people want to buy – they realise that people just don’t buy products or services they buy solutions or benefits that will help them achieve a gain or reduce a problem.
So an early imperative is to find the market first by finding out what people want, and then…to let them buy what they’ve told you they want!
A ‘HUNGRY CROWD’ is an interesting and relevant concept in the context of finding a niche within a market…
At the end of the day a ‘HUNGRY CROWD’ – is a group of people, increasing in number, that really, really want what you have to offer - badly. It’s this that is going to guarantee the success of your business!
The point of all this is to urge you to start to concentrate on spotting your ‘HUNGRY CROWD’. Listen to what people ask for, dream or complain about. It’s not enough for you to sell to people who CAN benefit from what you sell; you need to market to people who WANT to benefit from the SOLUTION you offer. In fact you’ve got to find people who will CLAMOUR for your product, so that sales and marketing becomes a lot easier…
A related point is this. Once people have tried and accepted the benefit you offer, they will come back to you again and again seeking further products and services from you that meet and satisfy their emotionional needs – the fundamental reason for buying from you in the first place.
We examined the first of two really important tenets of successful strategy - creative insight and competence? Well it’s time to look at the second of these: what is it that you and your business are good at doing?
People tend to think that profit is purely to do with market opportunity. But this is to miss the truth. Great strategies are built on a clear appreciation of “what we’re good at doing” and converting this into competitive advantage. This core strength or competence is the driver for market penetration and development.
The importance of the question: ‘what are we good at doing?’ can not be overestimated. For what you - and your business - can do that’s of real value for your customers will help you differentiate your business. It then follows that if you concentrate on activities that leverage your strengths so that you can get the best output you are capable of, you can continually improve the strength until it becomes a world beater.
Producing ‘hearts and minds’ loyalty
You can also build on your business’ strength by turning it into a compelling vision that can often be more seductive than the product or service you offer. Most people in life haven’t really worked out their real purpose in life. This means that they’ll attach themselves to someone that has if given half the chance.
This is much bigger than finding a niche because if you want to win over the ‘hearts and minds’ of your prospects you’ve got to go beyond the product to a cause – your business strength lends itself to being that cause. And this applies to the people that work for you too. After all they are your ‘internal customers’.
The issue then is to be absolutely clear about the one thing that you are really good at doing or put another way; what distinctive competence makes your business special. It might be something to do with safety, or durability, or size.
Points To Remember
• So remember don’t underestimate the value of having a strategy.
• Creative insight and key strengths should be the true focus of business success and achievement.
• Concentrating on what you’re good at can win the ‘hearts and minds’ of your most important stakeholders.
Let’s start with a question: Do you have a strategy?
Trying to do a little better is not a business strategy. You see, when you think about it almost everybody’s strategy is invariably to do the same as everyone else but just to try to do it a little better.
And if you think about this a little more you’ll realise that this is not a strategy at all. How many business owners have fallen victim to this line of thinking, acting like an opportunist mistakenly believing that they are being strategic? Even though increasing revenue and profit they invariably work harder than ever before - often feeling frustrated, overwhelmed and exhausted in the process.
If this is you, then you have most likely been working harder than you need to for a fraction of the results you deserve.
What is a great strategy?
A great strategy beats the odds; because in the face of uncertainty, obstacles, and risk you decide what course of action leads to success. Indeed a great strategy is about knowing what path to take, what course to follow, what unique position to hold and what means will achieve the end result.
But where is the starting point? It is this; successful strategies are built on ‘creative insight’ and ‘doing what you do best’.
We will examine the subject of ‘doing what you do best’ in Module 4, below, but lets start with ‘creative insight’.
Before we do though, I want to begin with a caveat to emphasise the supremacy of creative insight. The issue concerns business planning. Many public and private institutions advocate business planning as a panacea for successful business; ‘sort the plan out and off you go’ is their cry! But it’s as well to remember that detailed business planning necessarily fails, due to frictions inevitably encountered in the planning process: chance events, imperfections in execution, and the independent will of customers and indeed competitors.
Instead, human elements: ambition, leadership, people, morale, and above all intuition, or ‘coup d’oeil’; (pronounced KOO-DOY) a quick recognition of truth — or opportunity, as the French say, are paramount.
The finest business owners and managers know that their biggest opportunity – and means of success – is rooted in a combination of creative insight and competence - not on today’s ‘rocket science’ or in technical advances that everyone is endorsing! They set only the broadest of objectives and develop profit producing activities to build up revenues based on the life-time value of their customers.
But the overwhelming majority of business owners are opportunity seekers! They have no insight and therefore no goal, no strategy, no business design, no management skills and no plan to carry the business forward to where it is intended.
PRODUCTIVE TIME IS TIME DIRECTLY RELATED TO REVENUE AND PROFIT ACHIEVEMENT
So what percentage of your time are you productive?
Have you ever really thought about how you spend your time? If not why not try the TIMEPIECE TEST? Get your alarm clock and set it for 60 minutes and then just work on building profit during those 60 minutes – nothing else….This will show YOU just what productive time is all about all right!!
Productive time is time spent creating products, marketing products, improving your marketing process, managing money making projects, setting up joint ventures, and creating scale in your business.
But there is something even more profitable and strategic than productive time, we call ‘super-productive’ time, which you create when you build systems around any of your most important business development activities.
In other words super-productive time is characterised by systems that create and market products – nothing else!!
If this sounds simplistic please look out for Module 7; “Powerful Marketing Strategies That No One Talks About.” You will see just how crucial it is to find super-productive time to design and implement great sales and marketing strategies to win customers at the front end and ensure a full pipeline of products and services at the backend to bring in real revenue.
Boosting productivity
If you are serious about boosting your productivity you’ll find there are two ways of doing it:
The first is to build scale into your business. Efforts to increase scale lead to economies in internal factors and synergies between some activities and working practices. This in turn provides you, the business owner or manager, with the ability to achieve MORE with less – or to use the jargon; with the maximum amount of leverage possible – from key business activities.
The second is to concentrate on those activities you should personally be spending your time on and which activities you should be outsourcing. The trick is to consistently focus on those activities that will raise your hourly rate. Then start delegating and outsourcing what needs to be done (that you can’t do very well) and which costs you less than the hourly rate you need to generate.
The importance of your hourly rate
If you don’t know what your time is worth and what it needs to be worth, then you can not make effective decisions on what activities you should be spending your time on and what activities you should have others do for you.
So you need to know your hourly rate. But that’s for another time. And anyway you can find out how you can pin this down in our E-Book “Ultimate Recommendations for Real Business Success”.
The fundamental point here is to consistently focus on those activities that will build your business and raise your hourly rate. The importance of understanding your productivity or knowing your hourly rate is that it exposes you to thinking about - and making - the kind of business you’ve always tried to design and achieve.
But most of us don’t have a grasp of this and delude ourselves into thinking that if we worked a little harder or introduced a new product we’ll achieve our goals – if we have any.
Moreover most people never get close to making their hourly rate because they mistakenly believe that what’s preventing them from achieving higher revenue targets is missing knowledge.
And while there might be an element of truth in this, it’s really only relevant if you have very limited marketing and business development know-how. If you don’t fall into that category then knowledge is not your primary problem.
Points To Remember Are:
• Poor business design results in you doing all of the work within your business.
• Analyse your time and see how much of it is truly productive time.
• Allocate your time to super-productive time and recruit or outsource skills to help.
Introduction
Most people mistakenly believe that all you need to excel in business is common sense and the will to succeed, MOST PEOPLE ARE WRONG.
It takes “Uncommon Sense” to make a business work but most people are never trained to do this.
This programme of 10 low-risk/high-return business building strategies, drawn from our E-Book “Ultimate Recommendations for Real Business Success”, shows business owners and managers that “Uncommon Sense”.
The Facts About Business Design That Most People Miss
Poor business design results in YOU doing all the work!
Most business owners and managers like doing the ‘practical’ work they do. Consequently they seek the latest idea or next opportunity to do what they want to better than they do now. The fact is all that happens is they simply add more and more tasks to their ‘to-do list’ that, at the end of the day, just aren’t going to get done!
Typically most businesses are run by ‘DO-IT-YOURSELFERS.’ This type of business owner doesn’t want to be dependent on other people for revenue and profit; they value their independence. They know things will be OK because ‘they are doing it.’ They take control of a situation because ‘they know it’s going to be OK’ whatever they do. However, they invariably end up doing the wrong work because they’ve just created another job for themselves to do!!
Is this you?
Or are you a business owner that lets the business do the work; in fact the direct opposite of the D-I-YER?
Effective business owners tend to direct the future of their companies and create the right structure and conditions for the technical work of the business to be carried out. The time they spend working out where they want to be, and how to organise and manage the way to this goal, is richly rewarded.
And here’s something else successful and effective business owners do. They surround themselves with bright and enterprising people that they can work with who will help them do the technical work of the business. The credo of this group is; ‘recruit people to do it for you’ – and then they make sure they don’t leave!
The ultimate issue
The final question to ask yourself is: “Do you run a business to create a job for yourself or to create a business?” because if you’re like most – you probably created a job.
If you are growing a business and still doing the work, you are not running a business you are doing the technical work of the business. If your business depends on you and you have no plans of changing that, then you don’t own – or run – a business. So you should be thinking of changing.
So what’s the point of all this? It’s this; don’t underestimate the importance of business design. Poor business design results in you doing all of the work within your business.
Have you ever started your day with this sort of question?
“What do I want to do today?”
If you have, then read on because this sort of question marks the start of an ineffective day.
Effective business owners don’t start out their day asking “what do I want to do?” They ask themselves a completely different set of questions.
They’ll begin with the question” What are the most important, highest leverage activities that need to get done?” and then they’ll produce a list of the most important activities that answer that question.
After that, they estimate the amount of time each activity should take.
Next, they examine the list of important activities that must be done and determine which activities they should do themselves and who they are going to ask to do the remaining activities.
Then when they start work they tackle the most important, highest leverage task or activity first. They do not ask the question of themselves “which one of these tasks do I want to do now?”
Remember no business owner is born effective. You have to cultivate effectiveness and you do that by practicing the habits of effectiveness. After all you wouldn’t want an employee who worked on what they thought they should work on. So you should respect your business at the very least as much as you want your team to.
The important thing here is to be conscious of the choices you make when deciding what to work on. The yardstick is to pick activities based on what your company needs from you.
If you pick the most important task to work on first you’ll be more effective, your company will be more profitable, and you’ll be able to work less so you can actually pick fun things to do outside of work instead of the poor substitutes you’ve been using to fill your work days.
So remember - it’s not what you want to do - it’s what your business needs done.
If you’ve tracked the way you spend your time you should have crystal clarity about how you are currently using it.
Any surprises?
Are you doing things that you shouldn’t be doing? If so, it’s costing you a lot more than you think, here’s why…
Your business is a system. When you study systems you learn that the maximum output of any process is set by its scarcest resource. And what are the key resources needed by your business? They are; Money; People and Time, aren’t they?
Let’s remind ourselves what’s involved, starting with the first of the trio.
Money - If you have the right business model and you are effectively progressing toward your business goals you should either have, or have access to enough money. And the ability to get more isn’t constrained; there are plenty of investors for the right businesses.
People - There is no limit usually to the people you can recruit or outsource to, especially when you have enough money.
Time - Of the 3 major resources time is scarcest. It’s also totally perishable and cannot be stored. Yesterday’s time is gone forever and will never come back.
Everything you do and your business does requires time. All work (whether useful or not) wears away your time. But, most business owners (at least the unsuccessful ones) take for granted this unique, irreplaceable, totally perishable, and necessary resource.
Competent business owners realise that time is the limiting factor. So, ask yourself the question:
1. What are some of the activities that I am currently doing that do not contribute to my effectiveness?
And once you come up with some answers the next question to think about is:
2. How can I eliminate these time thieves, automate them, or pass them off to someone else?
Then once you’ve done that ask yourself;
3. What are the productive activities that I should be working on?
If you are not sure what activities you should be doing, let me explain how you can arrive at the right answer.
Just imagine for a moment you were going to New Zealand for a year or so and you were going to recruit a manager to grow your business while you were away. Before you left, the new manager asked you - what were the activities that he had to concentrate on, on a daily basis if he was really serious about growing your business as quickly as possible?
What do you think your answer would be?
Surely it would be something like: “Where do you think you should be spending your time.” If you are running your business and if you want to be effective you should be able to answer these two questions.
strong>1. What am I getting paid to do?
2. What should I be paid to do if I am being paid for the right things to be done in my position?
Once you are clear about that – you can then begin to chop out activities that don’t make the list. In my upcoming notes to you I’ll show you how to do exactly that – and get rid of the wasteful activities that clog up your cash flow.
As we’ve been talking about learning new habits of effectiveness it’s as well to bear in mind that when establishing a new routine that requires a behaviour change, quite often there are a number of setbacks along the way.
How you react to these setbacks will ultimately determine the degree to which you adopt effective time management habits.
There are three things to consider when dealing with setbacks and they are:
Lapse…….. Relapse …….. Collapse
A lapse is a slight error or slip; it’s the first instance of backsliding into your former habit. It’s a discreet event like not concentrating on the Top 3 or setting aside time to plan. A Relapse occurs when lapses string together for a continued period of time. A Collapse arises when a relapse becomes permanent, and all hope of getting back into the groove is given up altogether.
While some bounce back and use the slip as a signal to increase their commitment. It is all too often the case for a relapse to cause a negative reaction which festers until the desired behaviour is given-up completely.
There are two ways to manage this. The first is to realise the importance of consistency when establishing any habit and commit to avoid and prevent slips all together. The second is to respond to any slip by immediately returning to the desired behaviour.
For some people, a lapse might cause them to feel as if they have no reason to go on with the habit – or they can start again. But the truth is quite different. It’s important to appreciate this point because it will make habituation easier over the long term.
When you lapse, instead of thinking it’s really not worth going on with the habit because there are too many distractions, challenge yourself to try again, and immediately recommit yourself so your lapse doesn’t turn into a relapse or a collapse?
Obviously you should try …and of course you can.
The point is this - even when you’ve slipped, you are still in control. Only you can decide to get back on track, or, postpone your re-commitment and have your entire effort collapse. The choice is yours.
But try and you’ll be that much closer to becoming a competent business owner and entrepreneur.
Profit Note: Install The Habit Of Time Management
The week has begun, there are lots to do today, and this is an important – albeit lengthy message, so lets start.
The heart of this post is the issue of effectiveness – and more to the point the HABIT OF EFFECTIVENESS, and so this being the case I would really like to show how habits are formed as well as a strategy you can use to bed in this – and new habits in general - not only faster but in such a way that they will be more likely to last..
It’s critical to remember that effectiveness is not inborn.
Just like each and every one of us had to learn to ride a bicycle, because no one is born knowing how - every competent business owner or manager had to learn to be effective and practice being effective until it became a habit.
Peter Drucker, a great writer on management competence tells us that:
“Effective managers do not start with their tasks. They start with their time. And they do not start out planning. THEY START BY FINDING OUT WHERE THEIR TIME ACTUALLY GOES. Then they attempt to manage their time and to cut back on unproductive usages of their time”
Now we need a simple way to ensure that what we learn about effective time keeping actually sticks.
Here is a great model on how learning a new skill takes place. Once you understand the model, you can leverage it to install new habits rapidly. Pay careful attention here,
first I’ll explain it, then give you examples to make it easier to understand, then I’ll show you how to use it for your own advantage.
Learning new skills is divided into four different stages of competence. The theory is that as you approach something to be learned you actually pass through four phases on the way to doing something without even thinking about how to do it.
Phase 1 - you don’t know how to do something and you don’t even know that you don’t know.
Phase 2 - you now know all the different things you don’t know and you begin to work on learning them.
Phase 3 - you now know what you need to know, you can do the skills necessary, but it takes all of your concentration.
Phase 4 - you can now carry out the skills necessary without thinking about it, in other words you have developed a habit.
OK, now let me give you two examples of how this work in your life.
How habits are formed in practice
Let’s look at this through a simple example, just to make sure you really get it, let’s take a look at learning to tide a bicycle.
Phase 1 – First there was a time when you knew nothing about riding a bicycle - you didn’t
know there were pedals, breaks, gears were and probably were oblivious of the all important issue of balance.
Phase 2 - Next you started to learn about riding a bike - your parents would have explained how to ride one, showing you how to change the gears, raise and lower the saddle and you would have started trying to ride one - with the help of parents - and you would have realised there was a lot to learn but you were basically still unable to ride.
Phase 3 - After a lot of practice and concentration on how to ride a bike - you were still not ready yet to signal left or right, talk to others and ride all at the same time (never mind cycle in a straight line with your arms folded) – even though you were capable of riding a bicycle you had still to focus and concentrate.
Phase 4 – then at last you rode enough so that riding a bicycle became automatic, you no longer needed to think about what you had to do, you just did it - you were now unconsciously competent at riding a bicycle.
So, to install habits in the quickest manner – its important to know which stage you are in and then concentrate on what you need to do to move to the next stage.
But here’s a question - are you able to ride a bike, arms folded, talk to a friend and go round a bend all at the same time?
In other words can you do several different - yet related things at the same time? Most people would find this difficult – if they hadn’t done them before they would have “to focus and concentrate” on what they were doing until they could do all these things in “tandem” –until then though they would go round the bend with their hands on the handle bars an stop talking!!
The point is significant because until you are able to accommodate all these various related activities any attempt to BE FULLY COMPETENT in time management won’t be accomplished. It means simply being effective from time to time won’t really help you in establishing the habit of effective time management.
Applying the framework to time management
If you are serious about managing time a la Drucker then its as well to realise that
1. there is still parts to being highly effective that you simply don’t know and
2. that your initial goal is to become aware of what really makes up effective behaviour
but even though you have the knowledge you don’t really know yet how to do it yourself
3. that you must consciously choose and then practice the behaviours and work on doing them without even thinking about it so that you achieve consistent time management and often (given the presence of related and unrelated activities).
4. that such practice of relevant activities makes you competent by habit, which should be your goal as a business owner and manager.
Incidentally if you want more on the behaviour and strategies required to achieve high status as an effective time manager – why not e.mail me at andrew@real-results.org and ask for The Vital Habits to Reclaim Time to Achieve More Results. Its yours for the asking.
Being strategic and competent is all about getting the right things done. In order to become a competent strategic business owner and manager you will need to build the habit of effectiveness. No one is born effective so…if you never worked on developing effectiveness skills you are not as competent as you could be, or should be.
Therefore to build the habit of effectiveness you’ll need to practice (consistent practice leads to powerful habits) the 5 skill sets I laid out for you in my last post.
While each skill set is pretty easy to understand, they aren’t so easy to do well. In other words, you will have to build and develop them (they don’t appear like magic), as you’ve had to do with anything else that’s important in your life. You need to practice them over and over again until these 5 skill sets become an integral part of the way you go about doing your work.
Next time I’ll detail how learning and developing habits of effectiveness go hand in hand and the key distinctions you must understand to be successful. If you have applied some of the tasks I have outlined, you should have started to see how much time you’ve been spending on tasks and activities other than on your top priorities.
Just keep up the good work, make sure that you spend as little time (none would be best) multitasking as possible. Stay focused on one task at a time. It’ll be easier to record, and it’s the work process of highly competent business owners and managers.
Keep up the good work, stay focused and notice your patterns, make today a super-productive day.
There are lots of business owners and managers who are quite knowledgeable; however, competent business owners are much, much rarer. Yet it is the competent business owner who succeeds in building successful businesses.
As a business owner – or manager, you and your company make no money for simply knowing. You make money and build your business by getting the right things done.
Just how to decide what are the right things and how to get them done will be the primary focus of the next instalment in this series on the competent business owner and manager Profit Notes.
By highlighting both “WHAT TO DO” and “HOW TO DO IT” you’ll learn (if you follow my lead and spend the few minutes each day these posts require) what you do well, what you need to improve on, what you are currently doing poorly and shouldn’t be doing at all.
You’ll learn where you belong in your business, your niche and your market.
Your first assignment:
1) Take out a sheet of paper or open up a blank mind map.
2) Spend 3 minutes brainstorming what you believe are the skill-sets an entrepreneur must have to be effective.
3) Take 1 minute and rate your current level of performance in these areas.
4) Spend 30 seconds highlighting the areas you believe are your biggest roadblocks to success.
5) Take 2 minutes to answer this questions “What could you do today (realistically) to be more effective?”
(6) Do the one thing you just decided would make you more effective today.
That’s it for now, in the next post I’ll tell you what I believe are the 5 skills every business owner and manager must develop to maximise their competence and truly be a Strategic Owner Manager.
But for today, make sure to do one thing new or different that you believe will make you more effective.
How A Right Hand Can Double Your Profits
As your business begins experiencing growth, it’s vital that you bring on a right-hand man (or woman) to help you in your quest for success. The sooner the better, because when your business is expanding, it’s difficult to take time out to train another person for tasks you need to delegate.
Still, you can’t just bring anyone into the equation. You need to make sure they have the same passion for your business and ideas that you do. How do you achieve that? By compensating them based on their performance or by giving them a percentage of the sales.
Use Performance Incentives
Incentives go a long way in motivating any staff, but with an assistant who works closely with you to realise the ultimate goals of the company, it’s even more valuable as a benefit and reward.
You have to be willing to put all of your trust into this person. You don’t want to worry about what they’ll do or how they’ll go about something. They should always strive to make your company look good in the eyes of your customers and business associates.
The type of person you want to hire on as a right hand man or woman will be highly motivated and able to handle their tasks with minimal input from you once they’ve been instructed on how to do something.
The person should be willing to learn new ideas – and eager to take on more responsibilities in the company. Don’t hire anyone who sits back waiting for an opportunity, or who scoffs at the idea of having to do more work.
Motivate Them With Vision
Your goal is to get them excited about the business – help them recognise the possibilities so that they actively work with you on accomplishing everything the business needs to do to grow and succeed.
Someone once said that recruiting the perfect right hand man is like finding the right suit – they have to fit in just right with the company or else you’ll feel uncomfortable allowing them to handle certain responsibilities.
In a best-case scenario, the right hand man should be able to fill your shoes in any situation – without missing a beat. But this doesn’t mean you have to look for someone exactly like you – in fact, it’s better if his talents and skills complement your own – skills he possesses, you lack, and vice versa.
You have to be careful not to hire someone whose only goal is to replace you within the company – or steal your idea to launch his own business. His loyalty to you should be paramount.
If there are other employees within the company, make sure you hire someone who earns the respect of the others. You can’t have a right hand man who treats your staff with disrespect.
Be Very Selective
You may have to go through several assistants before finding the right fit. You’ll realise that not everyone has what it takes to stand in such an important position. When you do find the right person, you’ll know it – because you’ll instantly feel a sense of relief that your business is on the right track to success.
After finding the right person, the two of you will work in sync to help the business experience growth. Having a right hand man will free up your time so that you can focus on more important tasks.
If he’s good enough at what he does, then you can double up on (or leverage) tactics that show promise in your company’s financial future. If you’re both good copywriters, then you can double the amount of high-converting content you write.
If sales are your strong point, but he’s better at customer service, then divvy up the responsibility for the betterment of the business. You can constantly assess both you and your assistant’s capabilities and leverage each of your skills to their optimum potential.
How To Be More Efficient In The Office
During a typical day in the office, you may waste a few minutes every hour. It may not seem like a lot, until you realise that those minutes can add up to hours. Those are hours you could be spending accomplishing more work or spending at home or in leisure.
Here are ten tips to help you make the most of every moment.
1. Get rid of the muddle in your office. If you’re constantly looking for things amid the junk that’s in your way, you’re wasting time. Get rid of anything that is making your office seem disorderly.
2. Set up an efficient workstation. For example, if you use your filing cabinet often, put it close to the desk so that you don’t have to walk across the room every time you need something. Keep the things you use often near to where you’re seated so that they’re always at your fingertips.
3. Focus on the task at hand. Multi-tasking is sometimes a necessary part of the workday. However, you may find that you’re flitting from one task to the next unnecessarily. Finish your current project before you go on to the next.
4. Keep your email organised. Delete the messages you don’t need and create folders for the ones you do need. That way, when you need to find something, you have a good place to start looking instead of having to filter through hundreds of messages.
5. Keep paper organised. Instead of having to sift through piles of paper on every surface of your office, spend 10 minutes at the end of each day filing away the things you aren’t actively using. If you do need to keep some things out, put them in a vertical file rack that will keep them organised.
6. Delegate tasks. Many business owners and managers have a hard time handing over work. You need to allow your staff to do what they can to free you up for other opportunities. Let your secretary handle phone messages or emails that don’t need your direct attention.
7. Return phone calls right away. Don’t wait for messages to pile up on your desk. Instead of having to spend 10 minutes returning calls, you may spend hours. It’s a lot harder to carve out an hour in your schedule than it is a few minutes each day.
8. Be clear about employee roles. Make sure that everyone understands what his or her tasks really are. Employees should not be duplicating each other’s services. Create standard operating procedures for each position in your company.
9. Create agendas for meetings and use them. Agendas should have time limits and you should assign someone to make sure everyone stays on topic. Keep them as short as possible.
10. Keep one calendar. Either a written or electronic calendar is a must, but you’ll run into problems when you have too many of them. Don’t waste time entering things into multiple planners – just keep one and keep it current.
You’ll find as you get more organised and delegate tasks that it feels like there are suddenly more hours in the day. There’s not – it’s simply the positive result of running your business in the most efficient way possible.
The Ageless Benefits Of Planning
As any successful business person knows, you can kill yourself trying to grow your business. You devote your time and money into your business and throw yourself into it almost without direction until you’ve stretched yourself so thin that you’re no longer productive in any aspect of your work.
“If only I’d planned my time better…!”
By forecasting an orderly work schedule, you’ll preserve both your valuable time and your sanity. Unfortunately, most people start each day off in a fury of tasks and deadlines – without a plan on how to get things done efficiently.
It’s a known fact that you can wear yourself out mentally and physically by tending to the daily tasks your business demands. On the other hand, you can learn how to plan for tomorrow and achieve even greater success – which you can enjoy as it happens.
When people don’t plan, they react to their circumstances – usually in a negative way. How many times have you gone into the office and felt irritated about something someone else has done – or not done and knowing that you’ve got caught up in the here and now – again when you really wanted to work on a fresh initiative?
Do you believe in productivity?
Productivity requires a positive attitude. If you’re always reacting to deadlines, tasks you hadn’t planned on popping up, or other people’s intrusions on your time, then you’ll be too hindered in the hassle of it all to make formidable decisions that will help drive your profits upward.
There has to be a fine balance between planning your day and being flexible enough to handle the unexpected. After all it would terrible to have every minute of your day scheduled and then find that something has thrown it off balance.
Planning shouldn’t paralyse activity but serve as a guide – a path - to help you get from point A to point B.
And planning doesn’t require a lot of time either. You simply have to plan the time to think. This means planning how you spend your time in advance. So planning should take place the day, week, month and quarter before in line with your annual plan. In this way you’ll be better able to schedule your time when you’re more aware of your company’s immediate needs.
Make a comprehensive to-do list. That doesn’t mean every single thing will get done the next day, but you want to have it on paper so that you’ll be able to give it attention at some point.
The vital importance of the “Top Three”
A vital practice is the Top Three. In other words of all the things on your list to do, what are the three you have to do to-day. Twenty priorities mean no priorities. If you want to achieve focus and concentrate your energy and effort then the Top Three is a very, very valuable practice.
Make a quick estimate of how much time each task in a plan of action will take – to give yourself an idea of how long it will take you to complete that single item on your to-do list.
The reason for this is when you fail to meet your self-imposed deadlines; it can create even more stress than if you had simply worked without a plan in place. While you might want to be Superman for a day, it won’t always happen – things are bound to present themselves as obstacles to your success.
If there are more people connected to the company – from employees to contracted labor – define their roles within the company structure so that some of the tasks can be designated for them to handle. This whole subject of delegation is something special – and we’ll look at that another time.
Putting a value on time
But here’s the rub; as you create each task, determine what it would cost for you to complete it. For instance, if your time is worth £100/hour, and you’re wasting an hour filling out forms that someone else could do for £8/hour, then you’re losing £92 an hour in profit.
Your time needs to be planned out so that you are maximizing your talents but also doing tasks that will have the highest return for your investment of each and every hour. Adding to the above example, your hour could have been used to develop an ad campaign that results in a high conversion rate of traffic to your website.
Don’t forget to add personal goals and time to your schedule. You want it to be flexible enough so that if there’s a family emergency, or if you simply need a break from it all, you won’t throw the entire business into a tailspin just because you’re not physically or mentally involved with the business 24-hours a day.
What would you do with £100,000?
Time is an irreplaceable asset. Yet we tend to spend it wildly – and, as I once did, making most of my decisions on the hoof. An advantage of planning is that we do get to choose what we do with our time. Imagine winning £100,000 and thinking about what you would want to do with it. You’d actually spend some time thinking that through, wouldn’t you? It’s the same with planning. It’s important to take some time out to plan where we investment our money, time and effort.
Greetings! As I’m about to launch another coaching programme, I thought I’d let you know, I’m releasing an extensive report that outlines some of the basic principles I teach.
Over the past 18 months or so we have been working with a wide range of business owners with a special business development programme. The results that we have achieved have been outstanding!
Clients are achieving 30% increases in sales and another is on the way to a 50% increase in turnover!
These results combined with the insights that we have drawn from our own research now form the basis of our ‘Ultimate Business Manifesto’ - to be launched in December. This ground breaking document reveals DEEP insights into many business owners’ personal approaches to business, and what they need to CHANGE in order to be (more) successful.
We are also putting together a short workshop programme based on our Manifesto which we call “Discover Profits that Lie Hidden in Your Business” to show business owners the vital skills needed to achieve greater success.
If you’re interested in learning more about what goes on “behind the curtain” in my elite coaching groups, please e-mail me on andrew@uniquebusinesssolutions.co.uk
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