In working with various growing companies, I've seen one very clear theme. Every organization (both commercial or nonprofit) has great potential, but is looking for better ways to harness it.
There's a Chinese proverb "binding your own feet to prevent your progress". Teams often hold themselves back through some very common wastes of time and energy:
a) "Cross Purposes": Individuals on a team haven't developed a shared vision, or they, or their teams, don't share any common 'good for the company' goals that strategically align effort.
b) "Shoot from the Hip": Decisions based on assumptions, not root causes.
c) "Goal Clutter / Goal Quantity Over Quality": The more goals, tasks and objectives...the harder to focus on the few most important things.
d) "Fire and Forget": Doing a planning exercise once...without establishing a formal drumbeat of revisiting it.
The methodology below is simple and is guaranteed to spark "Aha!" moments the first time a team uses it. It will work at any level of an organization.
End Goal:
Each member of a team should walk away with a clear idea of what is most important to the company (values, outcomes, metrics, projects) in the next year, as well as the 1-2 most important things they personally need to do next to move the ball forward starting right NOW.
STEPS
1) What's Your Common Calling? (Why are we doing this?)
* What is our mission, the core values we aspire to?
* Why is what we're doing important to us and our customers? (Long term vision)
2) Align on Destination (Where are we going next?)
* What is our vision or snapshot for what the organization looks like in the near future? (6-18 months).
- Example attributes: revenues / people and teams / branding or positioning / organizational design / channels / customers / new markets / margins / pricing and products / investors
3) Align on Causes & Effects (What will get us there the fastest?)
* What are the root causes that create the desired effects/results?
- For example, if revenue growth is a desired "effect", what is the "cause" that drives it? (You'd be surprised at how much disagreement there is here)
* What projects or initiatives will make the biggest impact on getting the company there?
- Examples: more business from channels, more salespeople (or more hitting quota), better cash management, raising money from investors, landing a strategic customer, hiring an internal or external recruiter
4) Align on Metrics
* What are the three most important metric the company needs to focus on improving this quarter / year? Which one is #1?
* What are the three most important metrics for each team? Which one is #1?
5) Bottlenecks? (What is holding us back?)
* What obstacles or bottlenecks are in the way of the above priorities?
* What is the root cause of each bottleneck?
* What can be done to tackle each bottleneck? Add these 'bottleneck breakers' to your list of important projects.
Example: Channels aren't growing. Why?
...The right person to grow the channel business doesn't have time today. Why?
...Because they are constantly fighting customer fires. Why?
...Because internal reports are error prone, so customers get inaccurate reports. Why?
...Because there is an issue with the database's configuration. Aha!
Address the root cause: fix the database configuration to create the time to grow channel business.
6) Rank Projects (Who does what next?)
* Take the above 'cause projects' and 'bottleneck issues' and rank them by the order they should be addressed
* You now have a list of prioritized projects to execute on
* Divvy them up to logical owners
* Each owner now has a list of ranked projects. Start with the most important one and focus on it until it's done, then move onto the next.
7) Establish a Drumbeat
* This initial plan is just a starting point. How will the team establish a regular drumbeat (or drumbeats, with daily/weekly/monthly cycles) to check in on progress and make sure everyone stays aligned?
* Depending on how fast the company is changing or growing, this could be every week, two weeks, month or quarter.
* To avoid getting into mental ruts, consider throwing it totally away and redoing it from scratch every 6-18 months.
Wednesday, December 20, 2006
Do You Take Sales Sales Complexity Seriously?
Companies are used to a simple view of the world: sell to small companies or to large ones?
With the growth of on-demand business models, more companies are trying to deliver products and services to both small and large customers (including departments of large customers).
There's a potential complexity trap here. In evaluating your customer segments, consider complexity to sell and deliver the solution in addition to the size of the company or its budget:
Another way to think about the vertical axis might be "Willingness to pay for complexity". In essence, how likely will this kind of company actually commit enough money to fixing the problem? Including money to cover all the hidden costs your own company will incur through support, product development, and other services?
The trap companies fall into, especially younger ones refining their customer and sales models, is trying to deliver a complex solution to businesses or departments who aren't willing to pay for the complexity. That's the worst of both worlds.
If you can charge large premiums for delivering a simple product, does that mean your competitors can easily copy you and undercut your prices? What are your barriers to entry and differentiators that will maintain your pricing premium?
With the growth of on-demand business models, more companies are trying to deliver products and services to both small and large customers (including departments of large customers).
There's a potential complexity trap here. In evaluating your customer segments, consider complexity to sell and deliver the solution in addition to the size of the company or its budget:
Another way to think about the vertical axis might be "Willingness to pay for complexity". In essence, how likely will this kind of company actually commit enough money to fixing the problem? Including money to cover all the hidden costs your own company will incur through support, product development, and other services?
The trap companies fall into, especially younger ones refining their customer and sales models, is trying to deliver a complex solution to businesses or departments who aren't willing to pay for the complexity. That's the worst of both worlds.
If you can charge large premiums for delivering a simple product, does that mean your competitors can easily copy you and undercut your prices? What are your barriers to entry and differentiators that will maintain your pricing premium?
Tuesday, December 12, 2006
Remember "Pass The Phone Message Game"?
Every time information is passed through someone or a level in a company, it's filtered and changes. As a CEO or executive, how often do you talk directly with employees on the front line for unfiltered feedback? What do your salespeople tell you is their #1 bottleneck in growing their numbers? According to the front line customer service employees, what are the top customer complaints? Or from the employees that handle current customers, why do they cancel?
These reasons should all be different than last year's reasons. If they're the same - is your company really working to break the bottlenecks that are slowing your growth?
Even in a company of 20 people, a lack of communication creates unnecessary problems. In fact, it can be more of a problem because the pace of change is faster than in a big company, making regular CEO-to-frontline-employees communication even more important.
Do You Think In Customer-Centric Ways?
People tend to have self-centric worldviews, that is, they view everything in how it matters to themselves. "What do I need to do today? Why should I do this?" Since companies are made of people, companies tend to view the world in ways it matters to the company...not necessarily their customers.
Company-centric questions:
"What kinds of customers do we want? What do we want to build? What do we want to sell? How much money do we want to make?"
Customer-centric questions:
"What kinds of customers need our service? Why do they need it? What will they buy from us? What is the (quantifiable) value to them?
How do you and your company think?
Company-centric questions:
"What kinds of customers do we want? What do we want to build? What do we want to sell? How much money do we want to make?"
Customer-centric questions:
"What kinds of customers need our service? Why do they need it? What will they buy from us? What is the (quantifiable) value to them?
How do you and your company think?
Wednesday, October 11, 2006
Practice Growth Through Self-Awareness
1. What is your main bottleneck to more growth?
Examples:
- Not enough good leads (where do the best ones come from?)
- Converstion rates of leads to customers is low (why do they disappear or go another route?)
- Lack of talented salespeople (is it actually about the people or is it the situation they're in?)
- Attrition of current customers is too high (why?)
- Sales cycle is too long (why?)
Once you identify your main bottleneck and can address it, then move on to your next one.
2. What is your 'ideal customer'? (And which ones should you avoid?)
How large or small? Does geography, industry, business model matter? What customers are the easiest to close and the most profitable?
Flip this question around too: which customers should you avoid in the future?
3. How did your ideal customers find you?
Word of mouth, press, referral partners, etc. How can you apply more energy to the best sources to get more?
4. Why do you get referrals?
Why did customers refer others to you? Why do your customers love you? And if they don't, how can you get them to love and recommend you?
5. What is your unique, differentiated solution?
Customers, just like everyone, are bombarded by information and options. The clarity and simplicity of your solution, including how it solves their problems differently than any other option (including 'doing nothing'), is a critical factor in everything related to customer acquisition. It improves word-of-mouth referrals, speeds sales cycles and increases pricing power.
Your differentiator is something that is positioned to matter to customers and should come from their feedback - not investors' or analyst armchair feedback.
6. How much business at your current customers are we not getting today?
What is the customer spending money on that's relevant to your business...but is going to other companies? Is it simply going after more of the same kinds of teams in other divisions of current customers? Or would you need to expand the product line? Or combine current services and products in new ways to solve more of their problems?
7. Why would they continue to use your company in the future?
Your competitors aren't sitting still - when they become viable alternatives and call on your customers with a cheaper price, why will your customers stay?
Examples:
- Not enough good leads (where do the best ones come from?)
- Converstion rates of leads to customers is low (why do they disappear or go another route?)
- Lack of talented salespeople (is it actually about the people or is it the situation they're in?)
- Attrition of current customers is too high (why?)
- Sales cycle is too long (why?)
Once you identify your main bottleneck and can address it, then move on to your next one.
2. What is your 'ideal customer'? (And which ones should you avoid?)
How large or small? Does geography, industry, business model matter? What customers are the easiest to close and the most profitable?
Flip this question around too: which customers should you avoid in the future?
3. How did your ideal customers find you?
Word of mouth, press, referral partners, etc. How can you apply more energy to the best sources to get more?
4. Why do you get referrals?
Why did customers refer others to you? Why do your customers love you? And if they don't, how can you get them to love and recommend you?
5. What is your unique, differentiated solution?
Customers, just like everyone, are bombarded by information and options. The clarity and simplicity of your solution, including how it solves their problems differently than any other option (including 'doing nothing'), is a critical factor in everything related to customer acquisition. It improves word-of-mouth referrals, speeds sales cycles and increases pricing power.
Your differentiator is something that is positioned to matter to customers and should come from their feedback - not investors' or analyst armchair feedback.
6. How much business at your current customers are we not getting today?
What is the customer spending money on that's relevant to your business...but is going to other companies? Is it simply going after more of the same kinds of teams in other divisions of current customers? Or would you need to expand the product line? Or combine current services and products in new ways to solve more of their problems?
7. Why would they continue to use your company in the future?
Your competitors aren't sitting still - when they become viable alternatives and call on your customers with a cheaper price, why will your customers stay?
For CEOs: Maintain Key Personal Relationships
Personal relationships cut right through information overload, clutter and noise. If you're a CEO, do you spend the time to establish and maintain personal relationships with the champions and decisionmakers at:
* Your top 10 biggest and most strategic customers?
* Your top 5 targeted journalists?
* Your top 5 partners?
* Other critical organizations or people that are important to your business?
* Various line employees and managers? (The ones that actually make the business work)
Part of the responsibility of CEO is staying in direct contact with customers and the business. As busy as you get, don't let yourself take these kinds of relationships for granted, or ever catch yourself consistently saying "It's not my job to maintain customer (employee / PR / partner...) relationships." The buck stops with you!
* Your top 10 biggest and most strategic customers?
* Your top 5 targeted journalists?
* Your top 5 partners?
* Other critical organizations or people that are important to your business?
* Various line employees and managers? (The ones that actually make the business work)
Part of the responsibility of CEO is staying in direct contact with customers and the business. As busy as you get, don't let yourself take these kinds of relationships for granted, or ever catch yourself consistently saying "It's not my job to maintain customer (employee / PR / partner...) relationships." The buck stops with you!
Motivation Through Fear or Aspiration?
Who did you work harder for: managers who motivate through fear and 'lashing the whip', or managers that inspired and encourage you and your team? The most productive, energetic committment comes from having a shared vision + alignment with your team and company.
Driving sustainable committment and energy takes:
1) A shared vision to aspire to,
2) A organization structure and goals that aligns people's energy toward that vision.
Mis-alignment and conflicting goals, including competition gone too far, destroys teamwork and results. You won't get far in a boat if people aren't rowing in the same direction.
There's no limit to what people can do and their energy when they share a vision together! Engage the team in creating a shared vision that people can aspire to. We updated our prospecting team's vision every year, and it was one of the first we introduced to new hires.
For example, in early 2005, we asked the team about what would get them excited and was important, which included: making a difference, being the best, trying new things and learning, and then sharing with others. We, still as a team, came up with a vision of:
"Make a difference in the success of our team & company by being the best in the world at generating new business, through constant innovation and the sharing of our expertise"
Driving sustainable committment and energy takes:
1) A shared vision to aspire to,
2) A organization structure and goals that aligns people's energy toward that vision.
Mis-alignment and conflicting goals, including competition gone too far, destroys teamwork and results. You won't get far in a boat if people aren't rowing in the same direction.
There's no limit to what people can do and their energy when they share a vision together! Engage the team in creating a shared vision that people can aspire to. We updated our prospecting team's vision every year, and it was one of the first we introduced to new hires.
For example, in early 2005, we asked the team about what would get them excited and was important, which included: making a difference, being the best, trying new things and learning, and then sharing with others. We, still as a team, came up with a vision of:
"Make a difference in the success of our team & company by being the best in the world at generating new business, through constant innovation and the sharing of our expertise"
Sunday, September 17, 2006
Dealing With Issues Over Email
I personally find it irritating trying to address important or sensitive issues over email. There's just too much opportunity to misinterpret or miscommunicate, resulting in unnecessary anxiety or drama. What about scheduling an impromptu meeting? Or calling the person? If you can't do either of them, is it something that can wait until the morning?
Email is also asynchronous - it's an erratic back-and-forth, not a realtime conversation, which just makes it that much more frustrating than a phone call to communicate about a complex situation.
Use common sense - if you have feedback for someone, or need to debate an issue - how would you want to receive it?
Email is also asynchronous - it's an erratic back-and-forth, not a realtime conversation, which just makes it that much more frustrating than a phone call to communicate about a complex situation.
Use common sense - if you have feedback for someone, or need to debate an issue - how would you want to receive it?
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