How to Decide When to Rejuvenate the Business

For further information download FREE “How to Create and Exploit a UNIQUE STRATEGIC POSITION for Your Business”

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

Andrew

Why Questioning Approaches in Business Are So Important

For further information download FREE “How to Create and Exploit a UNIQUE STRATEGIC POSITION for Your Business”

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

Andrew

The imperative for creating a unique strategic position

For further information download FREE “How to Create and Exploit a UNIQUE STRATEGIC POSITION for Your Business”

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

Andrew

What does it take to develop a Unique Strategic Position?

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

Andrew

Creating Superior Strategies

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

Andrew

10. Systemise – And Put the Business On Autopilot

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

9. Assembling Your Loyal Business Building Team

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?”

8. The Secret Language Of Business Control

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:

Cost Per Acquisition This concerns the marketing expense spent to attract customers, the costs of a representative if there is one, direct mail, advertising, networking etc, etc…

Lifetime Customer Value The total value (in terms of money spent) of your average customers spanning the entire period that these customers are likely to do business with 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.

7. Powerful Marketing Strategies That No One Teaches

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:

Front-End -The Marketing and Sales Activities designed to acquire new customers.

Back-End – The Marketing and Sales Activities designed to maximize the profitability of each and every customer relationship

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?

6. Create A Compelling Offer To Meet Your Customer’s Needs

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