February 27, 2013

Overcoming Mediocrity Consistently

road repairby Jay Perry

I came across a quote from Jim Collins, best known as the author of “Good to Great”.  He states:
“The signature of mediocrity is not an unwillingness to change. The signature of mediocrity is chronic inconsistency.”
In every business I have worked with I find this to be true.  Some things get done well one time and then not as well another time.  A case in point is a client company where we had instituted a scheduling program to better control work flow for their production.  It was off and running well two months prior.  I arrived for a follow-up visit to find that they were using the system only 50% to 60% of the time.  In other words, inconsistently.  What were the results?  Chaos!

Diagnostics

I also see inconsistency and mediocrity in diagnostics.  When done properly, there is a smooth production flow.  Then someone has a “better idea” — usually to go back to what they used to do — and the everything falls off the rails again.

The true enemy of greatness in business is this inconsistency in performance.  What causes that inconsistency?  Myriad reasons but one of the most common is complacency or satisfaction with the status quo.  That is fear.  People are afraid to make a full commitment to a new way of being.  They have reached a certain level of comfort and go into “preserve mode” which means let’s not get too far from the average way of doing things.

Great Leaders

That is where the call for great leaders comes in.  Without a great leader who is willing to look at bold ideas and then present them in a safe way that the followers can support the new initiatives, nothing will get done.

The followers will not do proceed on their own.  Not because they do not want the benefits of a better way but because they cannot connect the dots between their current position and where they potentially could be.
In leadership the job entails more than looking at new ideas.  You must make it OK for people to accept the changes necessary to affect improvement.  Followers are willing to change if shown an acceptable way to do so.

Accountability

What follows next is the need to root out the inconsistency that will creep back into people’s behaviors. Holding people accountable for the promises they make in implementing new ways is one of the most important things a leader has to do.  A leader often figures that everyone else can see the same benefits that they see. To the leader it is a “no-brainer” that we should do this and everyone will support it.  That’s a mistake as others do not see things exactly as we do.  Accept that truth and make your life easier.

Many leaders also do not see themselves as helpers.  They like to think of themselves in a more romantic fashion, riding the great steed, leading the army into victory, always looking forward.  Like the old saying says “Get off your high horse.”  Your job is to constantly help others do their job better today than they did it yesterday.  Once that mindset is firmly entrenched in your being and your behavior shows it.

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Jay Perry
Improve the processes and you change the culture. Ally Business Coaching helps progressive companies manage both aspects of these kinds of transformations. Leadership is developed in people, not trained. With over 20 years of experience in developing leaders through a coaching style, Jay brings quick, effective and permanent improvements to clients all over North America. Here are the complete services. You’ll find more about Jay on the Experion website and LinkedIn.

February 20, 2013

The Dangers Of Advertising Through A Group-Buy Daily Deals Site

saleby Elizabeth Lipsz

If you are considering advertising through group-buy promotions, make sure this strategy works for you. This type of marketing has made a big impact on the service and retail industries in North America. Here is some advice from a retailer who has been there and done that!

Group-buy companies look for deep discounts and will push a retailer to discount more than 50% on their offer. The marketing fees are typically 50% of the revenue earned and their payment terms might be as long as 90 days after the sale date. The marketing company will also sweeten the offer by saying that 20% of the coupon-buyers will never get around to redeeming their coupons. In reality, this can be very unpredictable and in our experience the non-redemptions were closer to 10%.

Assess your cost structure

If you are a service business with high labor or material costs, this type of marketing may not be not for you (e.g., spas, nail-bars, laser hair removal service-providers and even some restaurants). On the other hand, products and services with low unit costs and the potential for upgrades will do much better (e.g., restaurants with a bar will do much better than restaurants without, gyms and yoga studios will do better as well because of the low marginal cost of each additional client who shows up to a class).

Designing the deal

Group-buy companies promise lots of exposure to new clients and the possibility of making money on upgrades. The reality is quite the opposite. The profile of the typical coupon-buyer is that they are cheap and they move from deal-to-deal. Most clients will not upgrade their services nor will they buy products.
When designing your offer, resist the pressure to discount more than 50%. Be sure to negotiate the marketing fee and push to get it down to 35% or 40%. There are other factors to consider:
  • the maximum number of coupons to be sold
  • the number of coupons a single customer can buy
  • the size of groups you are willing to accept at any one time (if applicable)
The more restrictions you put in place, the less successful the sale but you, as the retailer, will be better protected.

The bigger the sale, the more you will inundated with calls and demands for reservations after the promotion. The typical coupon-customer has gained experience with these promotions and is now more critical of retailers if expectations are not met. Remember that the coupon-buyer expects maximum value and superior customer service at the lowest possible price.

After the sale, the retailer will be faced with balancing the needs of regular clients as well as meeting the demands of the coupon-clients. It is a very fine balance. A retailer who accepts too many coupon-clients at any one time risks losing the regulars. If the retailer fails to meet the expectations of the coupon-clients who are social media savvy, then the reputation of the retailer can be put at risk. Keep a close eye on review sites such as TripAdvisor and Yelp.

Final thoughts

Why would a service/retailer do a group-buy promotion? These deals do drive new business to the retailer but they do not bring in new, loyal clients. Is an additional 1-2% of new regular clients worth the cost running the promotion? Instead, it can damage the image or the brand of the retailer.

The principal reason for running a promotion is to use up excess capacity and lower overhead costs. If the bookings and reservations are handled exceptionally well without any customer-complaints then this promotion will provide a short-term boost. But if anything goes wrong — if the design of the promotion is too complex, too expensive and the discount is too deep and sale is too large — things can go wrong very quickly.

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Elizabeth LipszElizabeth Lipsz is a Management Consultant at BluHorizons Inc, which provides general business consulting services for SME. She specializes in manufacturing with regards to business analysis, business planning and assessment of systems of operations and methods of work, particularly in context of ISO 9001, in order to reduce costs and improve efficiencies. You’ll find more on LinkedIn.

February 13, 2013

Identify And Leverage Your Key Performance Indicators

by James Phillipson
dashboard
Key Performance Indicators (KPI) are quantifiable measurements that reflect the critical success factors of an organization. They will differ depending on the nature of the business and its priorities.

Some KPIs should focus on short-term priorities and others on long-term strategic issues. So a typical business would have both sales for the current month and for the year-to-date period in its KPIs.

The Key Performance Indicators selected must
  1. reflect the organization's goals
  2. be key to its success
  3. be measurable
The definitions of what they are and how they are measured do not change often.

Start With Financial Indicators

If a Key Performance Indicator is going to be of any value, there must be a way to accurately define and measure it. As a result, many businesses start with financial indicators that are based on the accounting records. Financial KPIs can include metrics based on both balance sheet accounts and earnings accounts. For example, a bank balance or days sales outstanding are very common indicators based on balance sheet accounts. On the other hand, where statistical data is maintained they are appropriate to be a KPI (e.g. volume of product manufactured, number of orders received, headcount, etc).

Update the KPIs regularly and incorporate them into the ongoing reporting and management of the business. Include them in the budgeting process and report the KPI compared to budget and compared to prior periods.

Ensure that you investigate and take action on any KPI that changes from expectation. Challenge your management to improve on selected KPIs each month. For example, next month challenge them to improve days sales outstanding by 10% (and then illustrate the success by showing the affect on cash flow).

Develop A Dashboard

In addition to monthly tracking, many businesses, develop a “dashboard” or weekly snapshot to monitor the status of the identified KPIs for the business. There are software tools that facilitate this. For most businesses this is a standard way for all those with access to the dashboard to see the status of the KPIs (Confidentiality usually limits the staff with access to some or all the indicators). Where the accounting system is an ERP system that is maintained in “real time”, it may be reasonable to maintain instant measures of the critical metrics that drive your business.

If you do not yet have a defined and agreed set of KPIs in your business, this is an area that your Controller (whatever their title) should be able to develop with input from management. It is not necessary to invest a significant amount in the reporting. If your ERP (Enterprise Resource Planning) system does not have a dashboard module, Excel be used and often is. If you have a weekly snapshot, this is a form of reporting of the critical data for the business and an alternative to the reporting of KPIs.

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James PhillipsonJames Phillipson is a Chartered Accountant and a Principal of Mastermind Solutions Inc. with over twenty years experience in large and small businesses. He has provided financial counseling to his clients since 1996, often in the role of a Controller or Chief Financial Officer, for both public and private corporate clients. James has experience in financial roles in a wide variety of businesses and industries. This includes several large corporations and many medium-sized public and private companies. James can be contacted at james@mastermindsolutions.ca or 905-731-8255. You’ll find more details on the Experion website and LinkedIn.

February 06, 2013

The Value of Pleasing Manners

learning mannersby Shannon Smith
“In the days of old, men made the manners; manners now make the man.”
— Lord Byron (Don Juan, 1824.)
Manners - Definition: deportment; social conduct; the style and custom of social intercourse; civility with polish; etiquette.

An individual’s manners are the index of his tastes, feelings, temper and usually indicate true character.

Haven’t you found that some people assume a kind of unconventional manner, an attitude of “it doesn’t mean squat”; or a superficial veneer, “a society cloak” on special occasions which is of little importance, no practical value, and as transparent as it is worthless? Artificial politeness is an attempt to deceive, an effort to make others believe that we are what we are not.

True politeness is the outward expression of the natural character, the external signs of the internal being. It must be born of sincerity and be the response of the heart for no amount of “surface polish” can be substituted for honesty and truthfulness. A beautiful character is simply a heart filled with honest intentions.

The “genius” of man, may hide many defects for a time, but the real individual is bound to come to the surface sooner or later, revealing his natural tendencies and personal character.

Good manners are developed through a spirit imbued with unselfishness, kindness, justness and generosity. When we realize that they are the outward expression of inward virtues, (like the hands of a watch indicating that the machinery within is perfect and true), we’ll then understand the power of applying the golden rule.

Unfortunately, we are often compelled to do business with individuals whose very presence is repulsive, who are void of noble qualities. On the other hand, we come in contact with those whose personality is like the warm rays of a June sun, warming and gentle.

Today, more than ever, the nobler qualities of mind and heart count. I like the quote by Harv T. Eker:
“How you do anything is how you do everything.”
History is crowned with examples illustrating the power of indefinable charm of style. Among the qualities which contribute to worldly success, true politeness takes first rank. It is the bearing of man towards his fellowman, more than any other circumstance that promotes or obstructs his advancement of success in life. We court and seek the friendship of an individual with genuine character, while shunning the one who is false, gruff or cold.

Pleasing manners constitute one of the golden keys which turn the bolts of the door leading to success and happiness. Good manners are simply the crowning jewel of a noble character. The great motivating power of our conduct is the heart; it is the foundation of all action.

WHEN THE HEART IS RIGHT, LIFE WILL BE RIGHT!

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Shannon SmithShannon Smith is a leading image strategist and founder of Premiere Image International, the foremost provider of personal brand training. Since 1983, Shannon and her team of consultants have taken companies and individuals from unnoticed to unforgettable. You’ll find more details on the Experion website and LinkedIn.