Key Parts to a Great Strategic Plan

strategyAs I head to Buenos Aires for the EO Argentina University, I am excited to see how it all unfolds. Unlike other university events I have been to, I was on the committee that put this University together. So in a sense, like your own business, you get to see a creation come together that you had a hand in making happen. I look forward to seeing all my friends and experiencing a great conference together.

Recently, I wrote a blog on bad strategy, so I wanted to make some points of what goes into good strategy.  If you want to dig into any of these points in more details, there are a lot of good books out there. One that gives a good understanding and overview of each point discussed below is Stephen Lynch’s book Business Execution for Results.

Here are what I feel are the key areas that should be part of an overall strategic plan:

  • What is your vision for the future? (This could be your BHAG or long term direction on where you want to take the company.)
  • What competitive forces will determine how your industry is likely to play-out in the coming years (competitors, new entrants, substitute offerings, suppliers, customers) – and what moves do you need to make to address the trends in these areas?
  • What macro forces will impact your business environment (political, economic, social, technology) – and what moves do you need to make to address the trends in these areas?
  • What geographic areas do you plan to serve, and how will you access those locations?
  • Who is the ideal target market/customer for your brand?
  • What is your target customer trying to achieve, and how will you address this need (now and in the future)?
  • What core activities will you perform (now and in the future)?
  • What non-core activities will you stop doing? How will you strategically position your brand in the marketplace?
  • What benefits will you offer?
  • What blunt, overt promise will compel your customers to take action?
  • What key strategic moves do you need to make within the next 3-5 years to position your firm for future industry success?
  • What goals and milestones will measure your success along the way?
  • What is the current reality that you must deal with?
  • What projects will you implement in the coming quarter to address your current reality and/or move your business in your chosen strategic direction?
  • What Key Performance Indicators will track and drive the success of your current business model?

With answers to these questions, a lot of the guess work will be out of the way. Ultimately this will put you on the path to a successful company. Does your strategic plan answer most of these questions?

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Ask Key Questions for Change

question markLooking at your company from a different perspective is sometimes what is needed to make important changes that lead to moving forward. The problem with this is, it is hard to do. How can you put yourself in a perspective that will make decisions that will change everything? Rasmus Ankerson, who we are bringing to speak at the EO Argentina University in November, has an answer for that.

In a recent blog post, Rasmus discusses how one question can change everything. It is a question that helps to dig out and create some clarity in times of uncertainty and lack of direction. When Intel was evaluating the changes in the sales of memory chips, they were seeing a drop and in 1985 they had a big drop in memory chip sales. Founder Andy Groove was having a discussion with CEO Gordon Moore as they discussed this issue.

As Groove and Moore debated what to do, they discussed that if they messed up, the Board may replace them. So Groove asked Moore what a new CEO would do if they were replaced? Moore, without hesitation, said he would get out of chips and into microprocessors. So Groove said, let’s get up and walk out the door and then come back in and do it ourselves! That is exactly what they did, and we all know the story from there.

So when looking for a way to get real with your situation, ask what your successor might do if he was brought in and didn’t have the baggage of being stuck with all the decisions and dollars spent previously. Getting out of the quicksand of the past is tough, but maybe looking at it this way and asking this question is a way to do it.

As was discussed a few weeks back, the option of asking the question, “what is the job that our customer wants done,” is another way to look at prospects and to open up an untapped white space for opportunities.

What Is Your Job to be Done?

light-bulb-idea-think-brain-stormWhen trying to find opportunities to grow during times you may have hit a lull, or even when you are starting a new company, there is a process that can help get you there. That is what I found when I started to read the book Seizing the White Space: Business Model Innovation for Transformative Growth and Renewal, by Mark Johnson. Mark will be speaking at the next Fortune Growth Summit in Las Vegas. I was intrigued by him since he is partners with Clayton Christensen, who wrote The Investors Dilemma and shared a lot of break-through thinking in this book.

I assume that most think like I do, and we think that the cool idea happens when some light bulb goes off and then somebody is off to the races, trying something and seeing if it works. Mark says that you actually can get this innovation with a process that starts with asking, “What is the job to be done?”  Other times, it may be when you do customer research and the clients tell you what they want from you. Doing it this way, Mark says, has shown that you are being held back from pursuing the game-changing, transformative, new growth opportunities.

To ask the question of what job needs to be done, it takes looking at things differently from the natural way that we see from the inside-thinking of our products and company. When you think of it as unmet jobs, you are looking for the things you are not doing now, but things potential customers want done. When we go about this by asking our clients what they need from our products, they usually put out answers like “less expensive,” “easier to use,” “less invasive,” and “more features.” When you think of it in this perspective and also look at it from a typical segment of target markets, it doesn’t usually align with jobs customers might want us to do. Marks says, to be truly more customer-centric, you must stop asking “what do you need?” and start asking “what are you trying to get done?”

He uses a very cool example of this when a company was trying to improve the sales of its milkshake. They initially tried to define the market in terms of the product and then its demographic segments. When they asked the target person what they wanted, they got more of the inside-out answers by supplying categories like thicker, more chocolaty, cheaper or chunkier. They made changes, and then they didn’t get any increase in sales, so they brought in a researcher who watched to determine what the target person was trying to get done when they “hired” a milkshake.

The researcher noted things like, who was with them when they were buying, what time they were there, did they eat there or when they left, and on and on. From the perspective of looking at the job to be done, they determined that buyers hired a milkshake for two different reasons. The buyer was the same for both, a working father. The difference was that in the morning, dad didn’t have time to eat breakfast so he grabs a shake for the daily commute. In the latter part of the day, the dad brings the kids in for an afternoon treat or after meal milkshake. The job to be done is to fill working dad up in the morning, so the shake needed to be thicker, maybe with chunks of fruit. In the evening, dad with kids wanted them to hurry up, so a not-so-thick, fruit-free shake was better.

This information could not be obtained by asking the customers what they wanted. To do this, the mind-set had to be one of paying close attention to the jobs that customers are having a tough time fulfilling. So when you look around your product or service offering, what are the jobs not being done that your customers need done?

bounceit!™ update: Over the past few weeks, we have been working on some improvements for bounceit!™ that will include a new look and improvements with some of the features. This will be in the Apple store next week. We have also been doing some venture capital presentations and looking to get some money from some angle investors. We have some good press going, as well. Gary Hardin was interviewed on a local TV show in the live segment and an article was out Sunday in the Knoxville News Sentinel. I will have links for you on both of them next week.

Not Scaling – Part 2: Starting Small to Build Big

devicesThe big news to share this week on bounceit!™ is that the app went live in the app store, after a long period of creation, and we are starting the process of scaling by not scaling, as was discussed in last week’s blog. This week will be focused on getting a small group to use and try it out on all devices to make sure everything is flowing well. Then, we will move to our local and social media friends to give it a try and to share with others, if they like it. And finally, on to the rest of the world.

Well, sort of to the rest of the world. Some people think big launches matter and they want to create a big event with a lot of hoopla, excitement and media attention. After this happens, then everyone will know about it and you are set to go viral. We thought about this approach a while back and decided against it.  Interestingly, Paul thinks that this is not the way to go either. He says founders like to think that they have a great building and everyone who hears about it will want it. Even the best of the viral applications don’t start this way. He also says it is part laziness, that with the big launch, the hard work of creation is done and you can sit back and watch your amazing creation take off. This will not happen and will require getting users one at a time.

Another thing that usually doesn’t work on the way to scalability, is partnerships. Paul’s experience is that they don’t work for startups in general, in the form of getting the big break. They usually take lots of work and don’t lead to the scalability that was hoped for in the beginning. That is where you are trying to be scalable. When you get with organizations or other companies to work on building a core group of users in a certain demographic to experience the feedback, then this approach is doing the non-scalable with a few users at a time. We will be doing this with the University of Tennessee and with Regal Cinemas.

We will move in small, non-scalable aspects first, to build a presence with certain groups that we are targeting.

Paul says that what matters is not the big launch or the big partnership, but the ability to delight your customers is the key to getting bigger. Take a handful of people, make them really happy, watch what they do so you can learn, and they will get friends like them taking you further down the road.

So our plan is to go slowly with our initial roll-out to build a core group of users in our local community and test the app with the different ways new people may think about using it, and also to make sure all the software and hardware running the app will handle the pressure of hundreds of pictures and votes, and then thousands.

Bounceit!™ will have announcements locally next week in the press and we will have an article in Nibletz, which has agreed to use bounceit!™  to get feedback on speaker choices for their two big conferences.

This is an exciting time for founders and also a time not to sit back and wait for things to happen.  Entrepreneurism is about getting out and creating the success you want!!

Business Regret: What’s it All About?

regretsIf you listen to any of the successful leaders in business out there, you will hear them say over and over that it is about the people. In other words, to have a successful business, you must have the right people and they must be in the right positions, playing to their strengths. Then everything will be good.

Okay, sounds good, so let’s go get the right people and everything else will be great. Then we will not need to keep the wrong people and instead, we will need to grow those that have potential.  The problem with all this is that we are talking about people and when we do that, we have a lot of other factors that get in the way. Emotions are the big one, but also best intentions. You want to see the best in people, and you want to help others. These all have an influence in working to get the right team in place.

I have experienced this repeatedly, and have felt it in my gut when I knew I had the wrong person in the wrong seat and, given whatever circumstances, don’t make a change right away. I was reminded of this by a recent blog that was written by my friend, Stephen Lynch. Stephen has written a book, Business Execution for Results, that is a great step-by-step for getting the strategic plan, the alignment, the key decisions and the execution all down, so your business is spinning like a top.

The blog he sent me was called “The #1 Regret of Business Owners.” And guess what that one regret is? Hiring mistakes! As we just discussed, it’s all about the people.  Stephen says that sometimes it is good performers who don’t fit into your culture. Other times, it is taking too much time to fix performance issues with someone that fits in, but is not achieving the desired result. Then there are the times we just hire the first person with a pulse to get it out of the way.

There is no perfect way to find people because, as we said, we are dealing with the complexity of humans and boy oh boy, can we be filled with intricacies. At Efficience, we have had success with process called Topgrading.  It has helped us find good people, but sometimes we just have had them in the wrong seats. It may take some learning, as we have experienced, but we finally found two technical project managers that are knocking it out of the park! Thank you Chris and Sarah for great results in getting our projects done and making our clients happy!

Peter Drucker, in his very interesting book, Post-Capitalist Society, tells us why people are so important. The book is all about the societal transformation from capital, land and labor, to a knowledgeable society where individuals are central.

Drucker says, “Knowledge is not impersonal like money. Knowledge does not reside in a book, a database, a software program; they contain only information. Knowledge is always embodied in a person; carried by a person; created, augmented, or improved by a person; applied by a person; taught and passed on by a person; used or misused by a person. The shift to a knowledge society therefore puts the person in the center.”

We can see with this explanation from Drucker how important our people are, and getting the right ones on board and in the right seat is job number one for any leader!  Do you have the right people sitting in the right seats?

Dropping the Fear of Being Naked

Getting-Nake-Book-Cover1Last week, we discussed getting naked with our clients by being humble and real with them as we work together to create value for each other. This usually has roadblocks associated with it, by what Patrick Lencioni calls the three fears. They are the fear of losing the business, the fear of being embarrassed, and the fear of feeling inferior. Let’s discuss each one separately.

The fear of losing the business happens when fear prevents us from doing the difficult things that will actually keep the business – creating greater loyalty and trust with our clients. What people really want to know is that we are putting the highest priority on helping them over trying to make money. We lose their trust and respect when do something, or fail to do something, just to increase or maintain the business. When we get naked with a client, we are open to the possibility of losing the client, not being paid, or the client taking our ideas and not compensating us. This exposure actually builds trust and opens us to goodwill that we will generate if even in the short term it doesn’t look like it.

The fear of being embarrassed happens when we don’t want to look stupid or unknowing in front of others that are paying us to be knowledgeable. This happens even when we are afraid to ask a question because we may look less than if it seems everyone else knows the answer. The truth is, a lot of the time others don’t know and we are respected for asking the question. Lencioni says that this is rooted in pride and is about avoiding the appearance of ignorance. The naked service provider asks questions at the expense of getting laughed at, to make sure he or she is helping the client. They admit and even celebrate their lack of knowledge, because a cover-up is only protecting their intellectual ego and not helping the client.

The fear of being inferior is also about the ego, but is different in that it is about protecting the aspects of feeling important and our social standing relative to a client. Lencioni says, “It is completely natural for a service provider to yearn for respect and admiration, and have a disdain for being overlooked, condescended to, or treated as thought we are inferior.” We try to preserve this stature that is created in society by being the know-it-all and being above others in some ways. The naked service provider works to substitute this need of stature by putting themselves lower and being of service in whatever a client needs. When we put aside our egos and make the needs of others more important, this is the higher conscious approach, and respect and trust will follow.

Getting rid of the three fears boils down to being selfless and serving others at the expense of your own wants. This sounds like the way to not only make business relationships better, but our relationships overall. It sounds like there are more benefits to being naked then I originally thought. So are you going to undress your pride and ego and strip down for your clients?

Do You Get Naked with Your Clients?

1481330-red-mens-neck-tie-draped-over-the-back-of-a-black-office-desk-chair-isoI spent the past week in St. Thomas for my annual timeshare week. It is always a great getaway, and this one came and went with a lot of time at great beaches, meeting new people and doing some reading. I got to spend the night at Jost Van Dyke, which is something that I’ve always wanted to do. The time around Soggy Dollar Bar goes fast and you get dragged away, if you are there on a tour boat or take a ferry, just when things seem to be the most fun. Staying the night was a great way to relax and enjoy the new friends and amazing beach, and contemplate the opportunities the new vertical has for us at Efficience.

The reading I got to do was very insightful and gave me several ideas to help me with my business. It was the book that Jack Daly recommended at the Nerve conference recently as the best sales book ever, which is called Getting Naked, by Patrick Lencioni. It wasn’t what I was expecting, when it came to a book that is supposed to help you with selling. But it all came down to what we admire in people, and that is being real and humble. The book is told in a fable and it is a good read, with the format helping to make the points very clear.

What it comes down to, is that when the business consultant went in to do the sales presentation, it was actually a bunch of questions that dug into the business and the issues they were having. He gave away his advice, and did so without any commitment from the potential client. There was no priced discussed, unless the client asked the question. This was all about adding value and showing the prospect that he was there to help, and if they found his services of value, then they would engage said services. This went down to creating a successful practice without having to actually sell, at least in the traditional sense.

What is revealed from the fable is that people have three fears when selling. They are the fear of losing the business, the fear of being embarrassed, and the fear of feeling inferior. When you are trying to sell and protect yourself from these fears, it works to prevent us from building trust and loyalty with our clients. When you provide your services in more of this naked fashion, you are sharing humility, selflessness and transparency, which when shared does create a bond with others. This bond leads to a level of trust that builds real relationships with clients that last during good and bad times, and even when you charge more than the competition.

In the next blog I will discuss the three fears in more detail. In the meantime, are you being naked when you are working with your clients?