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Sunday, 26 April 2015

Looking at Your Strategy? Keep it Really Simple!

Over the years working with many leaders in a wide range of businesses I have seen many strategic plans started (and in some cases completed) with varying success.

Generally the leaders and their teams struggle with what they see as the complexity of the process and how to bring it all together into a coherent working plan.

Many of these plans are based absolutely on financial information most of which is historical with somewhat hopeful projections to support the plan.

The fact is that the strategy, certainly in its early basic phase can be almost entirely narrative withe minimum of financial information save perhaps the intended objectives.

It starts with vision or the dream and in the case of an SME that is Invariably in the province of the leader.

The question is, what does the leader visualise the business looking like at the end of the planning period, say in five years time?

Will it, for example, still generally be in the area of activity or is it likely to add or be something new?  Will the same functions and people still be there?  Will the business still be in the same premises and if not, what will they look like?

Remember, if you don't know where you are going any road will take you there so define the end point objective, that bright shining light that you intend to achieve.

It is useful at this stage to do a SWOT analysis of the current starting point together with a PESTEL (political, economic, sociological, technological, environmental and legal) all of which will give a good view of the starting point for the business and the likely effect of changes over which we have no control.

We may indeed have no control over the consequences of any changes, but we can still anticipate and change course if necessary.

A small diversion at this stage. Notice the word "intend", because the end point needs to be objectives not goals or, worse, targets.
It is a good idea to determine three or four (no more) major objectives that together will take us to the agreed end point.

At this stage we ask the big question, not how do we achieve the objectives but rather, what will we need to do in order to achieve them?

This is not just semantics; that question will offer routes by which we will achieve the objectives.

Please do NOT confuse the strategic planning process with budgeting. My old friend, the late Brian Warnes used to define budgets as limp projections based on uncertain evidence. What we are doing in strategic planning is setting objectives which we in intended to achieve.

A useful technique here is Ishikawa or the fishbone.   If you envisage the skeleton of a fish then the head is the objective and the ribs are the various contributing business functions.

For example, the objective may be to double the size of the business over the next five years.  Decide on the functions of the business that will affect the change such as marketing, sales, technical, finance and so on, and then decide what changes are likely to achieve this specific objective.

By the way, so that everyone is involved make people accountable to a champion of each objective and ensure that the tactics which will flow from the process are carried out in a timely manner.

To recap, start with the vision, decide on an overarching objective split into no more than three or four contributing factors, determine the tactics for each and then cost them all to check viability.

Aim to describe the strategy on one side of an A4 that can then be communicated to everyone in the business. That should answer the question of “where are we going?”

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Sunday, 19 April 2015

Looking to Change the Business? You Must Decide, Incremental or Dramatic!

Tom Peters said that excellent businesses don't believe in excellence, only in constant improvement and constant change.

In a way that statement is self-evident. The old adage that say "we've always done it this  way" unquestionably is still alive(ish) and if not really kicking, rather twitching, it is a wet blanket on progress.

The question is how to implement change, how quickly, with what outcome in mind and crucially whether it should be incremental or big and immediate.

The Japanese methodology of Kai-zen propounds constant incremental change which perhaps takes a little more time but it can be more easily absorbed by more people.

No doubt it has been a very successful technique and certainly can achieve the desired outcomes with a minimum of upheaval and pain.

The big advantage of Kai-zen is that it can become accepted more easily and becomes almost an expected routine in the business.

It could be called a modern version of the old Suggestion Box but with several differences.

Firstly it involves everyone in the business at all levels and positively encourages the flow of ideas, which will change the business in some way.

For example at Nissan in the UK, shop floor personnel are encouraged to put forward ways in which their jobs can be made more effective.

All ideas are carefully scrutinised and passed to a special unit for implementation or not. There is no reward when a good idea is developed except for posters congratulating the initiator and possibly enhanced earnings as a result of the change.

The consequence is that there is a constant flow of change at all levels and most people accept the value of the scheme.

However by its very regularity and minor effects each time, the results are not always noticeable and don't necessarily achieve an overall desired outcome of culture change.

If we are really trying to achieve major effects on performance of the people and the business which does mean culture change at both personal and corporate levels then the change needs to be dramatic.

The great U.S. Vistage speaker and leadership guru, Lee Thayer, prefers exactly that, a far more dramatic approach to change.

Lee thinks that change needs to be big, dramatic and significant in the lives of the people and the business so that it and its implications cannot be brushed aside

He cites the example of the Johnsonville Sausage Company that decided (after some persuasion) that they should go for a doubling of turnover to $40m in their next financial year.

The leader accepted all the shocked and negative reactions but asked his team if they were to go for it, what would they need to do, what changed would be necessary.

They went for it and failed. They achieved $37m and went on from strength to strength.

It all devolves on knowing why we need the specific change, what outcomes do we want and how it should progress the people and their performance.

Remember that Tom Peters says that excellence is derived from constant change and constant improvement.

This implies a planning process of some sort so that everyone can understand why the change is being implemented and, crucially, what will be the anticipated effect on the business and hence on each individual.

In fact the whole idea of the change process needs to be conducted in a totally transparent and honest environment so that everyone can understand the rationale.

Even under these circumstances some people will find it difficult to accept probably through fear of its impact on them personally.

In the end every business needs to pursue excellence in every facet of the enterprise. This driver must be at the forefront of the thinking and taking action at every level.
Then you can honestly say that you have gone for and have achieved true culture change.

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Sunday, 12 April 2015

Looking For Imaginative Marketing Ideas? Take a Tip From The Gold Rush!

On January 24, 1848, James W Marshall who was building a sawmill on the banks of the America River noticed something glinting in the water.  He fished it out and thus started the great California Gold Rush.

Surprisingly it took a year or so before news of his discovery became widespread but all across the newly born United Stares people started to move to California in search of instant riches.

The population of San Francisco, a small mission station for example, grew from 1,000 in 1848 to more than 20,000 two years later on the back of immigration not only from America but also worldwide.

Some made great fortunes, others searched and searched without success.  The whole mad rush petered out around 1858, a mere 10 years after Marshall's discovery.

California was irrevocably changed and from an unexploited land with a great climate, had grown sufficiently to be admitted in 1850 as the 31st of the United States.

The actual numbers of the "49ers" as the prospectors were known is uncertain but what is certain is that many people spotted the opportunity presented by the gold rush to set up businesses to supply the prospectors.

It was said that the best way to make money in a gold rush was to sell shovels.

What a great metaphor for imaginative marketing today.

We are in a genuine growth phase in the UK after five tough years when only the really dedicated kept their heads down and stayed in business no matter what.

New products and services are hitting the markets at a great rate; some will succeed and some will be less than successful.

The most successful will be the ones who research the markets, see what is growing and seems to have potentially long life and the works out, not how to complete but what possible products and services is the market looking for.

In other words it's not a bad idea to join in it or even build a supply chain for growing markets and that is exactly what the shovel sellers achieved during the California Gold Rush.

The question to ask is: what is likely to be the next "Gold Rush" and how can you ride the wave of prosperity with it?  What is your shovel for the next generation of "49erd"?

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Monday, 6 April 2015

Do You Have The Power? Use It Sparingly and Don’ Ever Abuse It!

It's strange how many entrepreneurs are frustrated by the apparent reluctance of some of their senior people "to be as committed as I am to the business".

They tell me that they (the leader) work really hard, is totally committed to success in the business while some of their people seem to work hard but just don't go the extra mile.

I gently point out that ownership of the business generates a different ethos from those who are employees but they still don't always see it that way.

The fact is that it comes down to two words - Perceptions and Power.

The perceptions of the leader and the team are frequently at opposite ends of the same spectrum.

For example the team sees the car parked in the CEO space, notes when he/she is out for lunch (again), compares holidays and destinations and experience a slight frisson of envy.

They do necessarily see (or want to see) the long hours, the incessant demands on the leader's attention and time, the concerns that are kept from the team for good reason and the constant feeling of responsibility for the business and its employees.

But then again, our perceptions are our reality so that is what counts.

In the other direction, the leader can fall into the trap of expecting everyone to do as he/she does and then feels irritated that the same level of dedication is not forthcoming.

This all seems rather negative but in fact it is a function of the perceived power of the leader to whom the employees normally defer.

Note that it is not necessarily the persona of the leader that occasions these feelings but rather the title and position of a leader.

As an example I had cause to interview the CEO of an enormous paper-making business. He had been in post for only six months or so having been promoted from his previous job of Chief Operations Officer.

He told me that before his promotion the five or six directors worked closely and very effectively as a team, were able to challenge without rancour and met socially outside the business.

When he was appointed CEO, he said, the atmosphere changed immediately. He had told the other directors that "his door was always open" and he expected that the happy relationships would continue.

He was quite wrong, he told me. Not only did they not solicit his thoughts and advice but their very attitude was one of coolness.

It was the power problem raising its ugly head. Irrespective of the individual, the perception is that the leader has power over them and could use it malignly at any time.

Deep seated maybe but there is lille doubt that these sorts of feelings can be there and can affect all round performance.

So what is the solution?

Whatever the leader decides to do it will take time and a lot of patience. The most important parts of the solution are great communication and genuine transparency.

The leaders needs to demonstrate a measure of humility in showing the team that he/she trusts them and their opinions and thoughts are vital to the business.

Whatever the leaders decides to do in order to build relationships, to develop engagement and alignment of purpose, it must be visible to everyone in the business.

A wise sage once said that there is nothing so demeaning as to be expected to achieve other people's objectives.

Trust your people. Build a society of high performers with great attitude and tell them at all times how good they are.

It does take lots of time and lots of patience. Celebrate successes, however small with everyone in the business and demonstrate that you trust them by visible non-interference.

In the end an engaged and openly aligned society is the ultimate objective.  Remember that power is a trait that should be possessed, seldom used and NEVER abused.

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