Monthly Archives: August 2016

It can be lonely at the top

The more responsibility you have in whatever field, the fewer people you can share with.

If you are leading a business, the people in that business look to you for advice and guidance. You are supposed to have the answers – because if you haven’t got them, who has?

In the workplace you are bound up with all the emotion that comes with leading a team.

You’ll be feeling responsible for the team, and for the business.

That can make your position a lonely place. You can’t talk about your problems to your colleagues, your customers, your suppliers or your service providers – all the people you come into contact with on a daily basis. Some business leaders are lucky enough to have an understanding partner, who will at least listen!

There are two strategies to deploy to help you avoid the worst effects of this trap.

Firstly, surround yourself with trusted advisors. These are people you must be able to trust and discuss issues with, and who can bring dispassionate objectivity to bear on your problems. They could be independent business advisors (I know one of them!) or perhaps other business leaders who operate in a different sector. There are many peer groups to facilitate such support.

Secondly, be more open with your colleagues at work. There’s nothing wrong with being human, and indeed if you are more open you will build stronger relationships with the people around you. The stronger those relationships, the greater the trust and honesty will be and the easier you will find things.

There will always be those areas where you cannot discuss the issues, but they are probably far fewer than you think they are. Just make sure you are not spreading loads of FUD (Fear, Uncertainty and Doubt)

Business Leaders are people too!

Is there a SPOF in your business?

Is there a single point of failure in your business?

I’ve lost count of the number of businesses I have helped identify and deal with the single point of failure in the business.

Sometimes, this is a computer system. It’s not robust, possibly not backed up properly and if it were to fail the business would grind to a halt.

More often, it is a person. If that person isn’t available, is sick or on holiday, things don’t get done and eventually the business fails. That’s not you, is it? It is often the business owner, with all the levers of control in their own hands.

Perhaps it is a single contract with a customer. That represents such a high proportion of your business that if you lose that contract the business will go under. You don’t have to do anything wrong for the worst to happen – it could be something completely out of your control. Perhaps the customer is taken over, or they lose their customer…but you still lose out.

Sometimes it can be a supplier, or a component from a range of suppliers that is rapidly coming to the end of its life.

Do you know where your points of failure are?

Are you sure that computer backup is actually working ok? When was the last time you tested it? How many people actually know how to restore from a backup?

If it is an individual, training can help. Delegation is often something that doesn’t come easily, but it is a vital skill to avoid becoming a road block. Delegate a responsibility, not a task, and try offering support with the delegation “What do you need to make this happen?”

If it is a customer or a contract, put your efforts into diversifying that business. It it’s a supplier, look for alternatives.

If you do have a single point of failure there is a law that says you will get caught out – eventually!

 

Stick to your kinitting

Stick to your knitting

That’s an old saying that my parents would have used – and perhaps their parents too!

In today’s world the one eyed man is no longer king – to borrow another phrase from the past – the specialist is the king.

My speaker colleagues from the US talk about Niches (rhymes with itches) to Riches.

Successful businesses focus on the one thing that they are really good at. That’s the area where they can compete and outdo everyone else.

Less successful businesses offer a range of services, where some of them are not as good as others.

Sometimes, they would be better off saying “No, we don’t do that but we know someone really good who can help you”

In practice I prefer to say “Yes but” in preference to No. Starting with a yes is much more likely to get a positive response than a no!

This isn’t just about delivery it is also about marketing your goods and / or services. Successful marketing campaigns are laser focused on the customer and the benefit that customer will receive.

In the speaking world great speakers are really clear on who the audience is and the take-away the speaker is going to provide.

What is it that you do? What’s the great benefit you give your customer? Put in into one sentence.

Now test that assertion by substituting your competitor’s name. If the sentence is still true, you haven’t found your unique selling proposition.

If you can’t find it, ask your customers. You might be surprised. When you have your USP put it at the heart of everything you do.

 

What are your business cycles?

A way to understand and benchmark your business is to identify the cycles within the business.

The sales cycle is the period from the initial contact through to the point at which a sale is made.

The delivery cycle is the period from the receipt of the order or the signing of the contract through to the completion of the delivery of the product or service.

The production cycle is a sub-cycle of the delivery cycle and is the period from receipt of the order through to the completion of the product (but not its delivery or installation)

The order to cash cycle is the delivery cycle plus the credit terms taken (not offered) by your customer.

You can extend this thinking to almost any part of the business but the key point to recognise is that the longer the cycle the more resources are required to complete the cycle.

At its very simplest level if the order to cash cycle is (for example) 120 days that means you have to fund the operating costs of the business for 120 days.

Add to that a sales cycle of (say) 90 days and you have to fund the business for 210 days or the best part of a year. Ouch!

In practice, of course, in an established business the cycles overlap so that the cash from last month’s orders is available to fund this month’s overheads, so it doesn’t look anywhere near as bad.

However, if you can shorten the cycles in your business you’ll reduce the amount of cash tied up in the business and take the pressure off working capital.

Check by talking to other businesses in your sector to see if their cycles are similar to yours. You might find their experience is different – so you can implement improvements in your business.

If you really do have an extended production cycle, think about asking for partial payment as the work is being done rather than waiting until everything is complete and delivered.

 

Exceed your customer’s needs

I often find my clients are limiting their business options at the outset by telling themselves and everyone else “we’re only a small company” with the implication “we can’t do that…because we are only a small company.”

Ask the alternative question “what would a world class company do?” followed by “how can we do that?” and you may well be surprised by the results. Size is not everything!

There will be times when you are limited because you don’t have the resources, but more often than not it is a question of mindset, not resourcing.

Every giant corporation and every industry leader was once a small company, but they didn’t let themselves be bound by their size, so why should you?

It is not just about copying from world-class if you really want to stand out. It is about best meeting or exceeding the needs of your customers – and if it is important to your customer, it should be the most important thing to you.

In several sectors a handful of companies have completely disrupted existing markets by applying technology to change the way things have always been done. You could choose Uber for disrupting the travel industry, or AirBnB for the hospitality sector.

Both companies identified a that the incumbent providers (even those that were world class) fell short of customer needs and built businesses around meeting those needs.

They didn’t copy what the existing world-class providers were doing and they didn’t limit themselves by their size.

The fundamental question that you should be always asking is

“What do my customers want, and how can we best meet that need?”

Not every business can be an AirBnB or an Uber, but every business can do a better job meeting its customers’ needs.