As we approach the new year - there are a number of things on the plate for all of us. We need to close 2010 and finish the current year strong. We need to plan and put on paper our goals for 2011 - to have SMART goals that can be measured and watched over time so we can be accountable to execute them consistently and completely. We need to celebrate our blessings and be grateful for all the good things we have experienced. A new year is a time of new opportunity.
Unfortunately I have been watching with some amazement the reaction, or lack there of, to the new Microsoft MPN partner program. I wrote about this back in August and encouraged partners to begin planning and putting their strategy in place. It seems many have ignored or failed to take any action, and now as we move into the key season of partner renewals, there is panic and frustration that partners are not ready for the transition. This program has definitely raised the bar - but that is not news either. In fact, it has been the plan and came at the request of partners from around the world. This has been in planning stages for some time, and was covered in my blog post back in April as well as dozens of communications from Redmond as well.
The landscape has changed and it is time for true Microsoft partners to jump on board and embrace MPN. Diane Golshan wrote a great blog post last week addressing some of the key misconceptions. Putting things off is not the right answer. Just living under the grandfathering of benefits is not the same thing as embracing the program and putting your strategic plan in place and becoming fully engaged with MPN. Take a read of Diane's post - check out some of Eric Ligman's posts as well. This transition is a change - none of us like change - but it is the future and we need to get on board - embrace it and take advantage of the differentiation that all of us desire. Don't miss the boat on this important opportunity. Spend some time - leverage the resources available - and put your company in a place that will be different than most of your competitors who are just sitting back and waiting. We don't see a lot of chances like this in the channel to really be different. My advice is to get after it and do it quickly.
Thursday, December 30, 2010
Monday, December 27, 2010
Vendors Matter
This is the seventh blog post regarding the 10 Things I Accidentally Learned on the Path to Growth. There is little question that many folks in our industry seem to feel that the vendors are the enemy. Why - I am not exactly sure. But I can tell you without question that an attitude like that is 180 degrees the wrong way. Not only are vendors necessary and important - if you really want to grow - they are one of the most important factors I have seen and experienced.
So before you tune me out - listen a bit. Unless you are some super giant company - you do not have everything you need in order to serve your clients. Even Microsoft and HP use vendors - lots of them - to bring together things needed to serve their end clients. So what makes us as IT owners believe we are self sufficient and can run our business without any vendor relationships? I know the answer and it is in one word - stupidity! I know because I used to think that way a long time ago. I thought my job for the day was to beat vendors and distributors up on pricing and accuse them of trying to take my customers or take advantage of me through one of their programs somehow. Is that how you see your vendor relationships? Wrong approach - way wrong. Here are the facts as I have seen them over the years:
Vendors and Distributors exist to sell stuff
At the core of our attitude toward vendors is the failure to understand what they are in business for. Just like us - they exist to make a profit - and serve their customers. We tend to want to cut that first part out. If you want to succeed in this area - you have to understand that they are in business to sell things. And the way you embrace that is pretty obvious - you buy them. But not based on where you can find the lowest deal of the day or beat down the last penny of profit. You consolidate your purchasing and become a loyal buyer. Nothing says relationship like those two words. Get over finding the cheapest place to source products. Pick a distributor and a few key vendors and buy their products the same way from the same companies every day. I am often amazed at discussions where someone saved $10 a product by shopping. They wasted two hours of valuable time that could be used on productive work - but they got the best deal. Until they look a little more and find out that had they spend the whole day they could have saved $12. How ludicrous. We are in the value business. We sell our solutions and services based on value - not cost. We should buy the same way and quit worrying about getting every last dime out of someone. You will never grow or succeed as long as you are focused on spending your time here rather than building value for the customer.
Learn who your reps are and how they get paid
Relationships happen between two people. Every vendor has people resources that we can leverage to help drive our collective business. Your assignment is to find out who they are and build a relationship with them. It starts by buying as described in the previous paragraph. Most vendor reps are not crazy about working with companies that don't buy anything. But assuming you figure that one out and become a loyal partner - then it is time to begin the treasure hunt to find out where the people resources are. This takes determination and hard work - but is very much worth the effort. Once you build a relationship by consistently executing - you will find that these folks offer to bring resources to the table to help you grow. After all - they are paid on selling stuff. You need to ask that question and understand their compensation model - but inevitably it will have some component of sales in the mix. So find them and help them succeed. No one in their right mind won't partner with you to sell more if you are helping them earn more. This is key - building a win - win relationship. It is so powerful and I have seen significant results from learning to partner closely with vendor reps.
Participate in their programs
Vendors spend millions and millions of dollars on our behalf. The sad reality is that most of us don't take advantage of those investments. We don't like what they are offering for this reason or that - so we just ignore them. Bad decision. We need to not only understand what our key vendors are doing to support the channel - we need to participate in every possible way whether it is exactly how we would like it or not. It is their money after all. They are spending it on our behalf. We don't get to decide how. But they do care about our participation. They very much care about how involved we are in taking advantage of their investments. And they do keep score. Not getting much attention from your vendors? Begin by looking at your support and participation in their programs. More often than not you are getting what you deserve based on your committment.
Provide customer evidence
Vendors really love customer success stories. And in our IT channel two tier distribution model they have a difficult time getting those because we are in the middle. If you want to win some big points with both field reps and folks at corporate offices of your key vendors - capture and write success stories on how their technology delivered by you made a difference. That is like gold to reps and gives them some great evidence to bring back to their company. You can use it with your customers too - so it is something we should all be doing anyway. Just be sure to include your vendor reps and help them look good with their managers.
Get your team trained
It amazes me at how many partners complain about having to invest in training to get attention from vendors. Is it really that difficult to understand. It not only prepares us to actually sell their products as designed, to install them the best possible way, to succeed with their programs and use their references - but it also shows loyalty and our willingness to put skin in the game. Do I ever think some of the training is a little worthless? Yep. Do I think most training could be done better? Yep. Do we participate and get our people trained? Absolutely. Why? Because it shows that we are committed to the technology and company we are representing. It is part of learning how they intend to help us succeed. We need to bite the bullet and get our people trained, and then use what we learned to sell and implement more solutions.
Plan and be accountable to them
One of the most important things you can do to take vendor relationships to a whole different level is to truly plan together. Each year in the last quarter we hold our annual vendor planning session. We invite our top 4 or 5 vendor partners and our disty partner to the table - all at the same time - with our management team to strategize for the coming year. This has turned into one of the most important things we do to drive relationship with our vendors. It is a day and a half to two days focused on how we collectively grow each others business. There are competitors in the room - but we are clear that our approach to the market is solution selling and we sell products from a few vendors to build our solutions so they have to learn to play together in the sandbox. It opened some eyes the first time we did it. Some were pretty quiet and careful - but over the years it has become a true collaborative time and vendors leave knowing our collective approach. We also make committments to them, and they to us, that both sides are accountable for. We do quarterly reviews to make sure we are on track through the year. You have to be transparent and accountable if you truly want to make vendor relationships work.
There are lots of ways to engage vendors. Here are a few ideas we have utilized:
•Marketing Development Funds (MDF) - come in a variety of shapes and sizes
•Technology adoption programs
•Rapid deployment programs
•Beta programs
•Case studies – video and print
•Advisory councils
•Technical and sales training
•On site visits where we have corporate folks in our office to see what really happens
The bottom line
If you want to truly grow your company - you have to get this area right. I have seen NO company of any size do it alone. There always is a very strong and deep strategy to leverage vendors as part of the growth. You just aren't going to get there if you don't embrace them. They truly are a great resource and ally if you build deep relationships. It is work. It takes time. But it is very much worth it. Get after it and don't listen to the majority who will never figure this out. Go deep and find out just how far great vendor relationships can take you on your path of growth!
So before you tune me out - listen a bit. Unless you are some super giant company - you do not have everything you need in order to serve your clients. Even Microsoft and HP use vendors - lots of them - to bring together things needed to serve their end clients. So what makes us as IT owners believe we are self sufficient and can run our business without any vendor relationships? I know the answer and it is in one word - stupidity! I know because I used to think that way a long time ago. I thought my job for the day was to beat vendors and distributors up on pricing and accuse them of trying to take my customers or take advantage of me through one of their programs somehow. Is that how you see your vendor relationships? Wrong approach - way wrong. Here are the facts as I have seen them over the years:
Vendors and Distributors exist to sell stuff
At the core of our attitude toward vendors is the failure to understand what they are in business for. Just like us - they exist to make a profit - and serve their customers. We tend to want to cut that first part out. If you want to succeed in this area - you have to understand that they are in business to sell things. And the way you embrace that is pretty obvious - you buy them. But not based on where you can find the lowest deal of the day or beat down the last penny of profit. You consolidate your purchasing and become a loyal buyer. Nothing says relationship like those two words. Get over finding the cheapest place to source products. Pick a distributor and a few key vendors and buy their products the same way from the same companies every day. I am often amazed at discussions where someone saved $10 a product by shopping. They wasted two hours of valuable time that could be used on productive work - but they got the best deal. Until they look a little more and find out that had they spend the whole day they could have saved $12. How ludicrous. We are in the value business. We sell our solutions and services based on value - not cost. We should buy the same way and quit worrying about getting every last dime out of someone. You will never grow or succeed as long as you are focused on spending your time here rather than building value for the customer.
Learn who your reps are and how they get paid
Relationships happen between two people. Every vendor has people resources that we can leverage to help drive our collective business. Your assignment is to find out who they are and build a relationship with them. It starts by buying as described in the previous paragraph. Most vendor reps are not crazy about working with companies that don't buy anything. But assuming you figure that one out and become a loyal partner - then it is time to begin the treasure hunt to find out where the people resources are. This takes determination and hard work - but is very much worth the effort. Once you build a relationship by consistently executing - you will find that these folks offer to bring resources to the table to help you grow. After all - they are paid on selling stuff. You need to ask that question and understand their compensation model - but inevitably it will have some component of sales in the mix. So find them and help them succeed. No one in their right mind won't partner with you to sell more if you are helping them earn more. This is key - building a win - win relationship. It is so powerful and I have seen significant results from learning to partner closely with vendor reps.
Participate in their programs
Vendors spend millions and millions of dollars on our behalf. The sad reality is that most of us don't take advantage of those investments. We don't like what they are offering for this reason or that - so we just ignore them. Bad decision. We need to not only understand what our key vendors are doing to support the channel - we need to participate in every possible way whether it is exactly how we would like it or not. It is their money after all. They are spending it on our behalf. We don't get to decide how. But they do care about our participation. They very much care about how involved we are in taking advantage of their investments. And they do keep score. Not getting much attention from your vendors? Begin by looking at your support and participation in their programs. More often than not you are getting what you deserve based on your committment.
Provide customer evidence
Vendors really love customer success stories. And in our IT channel two tier distribution model they have a difficult time getting those because we are in the middle. If you want to win some big points with both field reps and folks at corporate offices of your key vendors - capture and write success stories on how their technology delivered by you made a difference. That is like gold to reps and gives them some great evidence to bring back to their company. You can use it with your customers too - so it is something we should all be doing anyway. Just be sure to include your vendor reps and help them look good with their managers.
Get your team trained
It amazes me at how many partners complain about having to invest in training to get attention from vendors. Is it really that difficult to understand. It not only prepares us to actually sell their products as designed, to install them the best possible way, to succeed with their programs and use their references - but it also shows loyalty and our willingness to put skin in the game. Do I ever think some of the training is a little worthless? Yep. Do I think most training could be done better? Yep. Do we participate and get our people trained? Absolutely. Why? Because it shows that we are committed to the technology and company we are representing. It is part of learning how they intend to help us succeed. We need to bite the bullet and get our people trained, and then use what we learned to sell and implement more solutions.
Plan and be accountable to them
One of the most important things you can do to take vendor relationships to a whole different level is to truly plan together. Each year in the last quarter we hold our annual vendor planning session. We invite our top 4 or 5 vendor partners and our disty partner to the table - all at the same time - with our management team to strategize for the coming year. This has turned into one of the most important things we do to drive relationship with our vendors. It is a day and a half to two days focused on how we collectively grow each others business. There are competitors in the room - but we are clear that our approach to the market is solution selling and we sell products from a few vendors to build our solutions so they have to learn to play together in the sandbox. It opened some eyes the first time we did it. Some were pretty quiet and careful - but over the years it has become a true collaborative time and vendors leave knowing our collective approach. We also make committments to them, and they to us, that both sides are accountable for. We do quarterly reviews to make sure we are on track through the year. You have to be transparent and accountable if you truly want to make vendor relationships work.
There are lots of ways to engage vendors. Here are a few ideas we have utilized:
•Marketing Development Funds (MDF) - come in a variety of shapes and sizes
•Technology adoption programs
•Rapid deployment programs
•Beta programs
•Case studies – video and print
•Advisory councils
•Technical and sales training
•On site visits where we have corporate folks in our office to see what really happens
The bottom line
If you want to truly grow your company - you have to get this area right. I have seen NO company of any size do it alone. There always is a very strong and deep strategy to leverage vendors as part of the growth. You just aren't going to get there if you don't embrace them. They truly are a great resource and ally if you build deep relationships. It is work. It takes time. But it is very much worth it. Get after it and don't listen to the majority who will never figure this out. Go deep and find out just how far great vendor relationships can take you on your path of growth!
Saturday, December 25, 2010
Teach The True Meaning of Christmas
Just a week before Christmas I had a visitor. This is how it happened. I just finished the household chores for the night and was preparing to go to bed, when I heard a noise in the front of the house. I opened the door to the front room and to my surprise, Santa himself stepped out next to the fireplace.
"What are you doing?" I started to ask. The words choked up in my throat and I saw he had tears in his eyes. His usual jolly manner was gone. Gone was the eager, boisterous soul we all know. He then answered me with a simple statement . . ."TEACH THE CHILDREN!" I was puzzled. What did he mean?
He anticipated my question and with one quick movement brought forth a miniature toy bag from behind the tree. As I stood bewildered, Santa said, "Teach the children!Teach them the old meaning of Christmas. The meaning that now-a-days Christmas has forgotten. "Santa then reached in his bag and pulled out a FIR TREE and placed it before the mantle. "Teach the children that the pure green color of the stately fir tree remains green all year round, depicting the everlasting hope of mankind, all the needles point heavenward, making it a symbol of man's thoughts turning toward heaven."
He again reached into his bag and pulled out a brilliant STAR. "Teach the children that the star was the heavenly sign of promises long ago. God promised a Savior for the world, and the star was the sign of fulfillment of His promise."
He then reached into his bag and pulled out a CANDLE. "Teach the children that the candle symbolizes that Christ is the light of the world, and when we see this great light we are reminded of He who displaces the darkness."
Once again he reached into his bag and removed a WREATH and placed it on the tree. "Teach the children that the wreath symbolizes the real nature of love. Real love never ceases. Love is one continuous round of affection."
He then pulled from his bag an ORNAMENT of himself. "Teach the children that I, Santa Claus, symbolize the generosity and good will we feel during the month of December."
He then brought out a HOLLY LEAF. "Teach the children that the holly plant represents immortality. It represents the crown of thorns worn by our Savior. The red holly berries represent the blood shed by Him.
Next he pulled from his bag a GIFT and said, "Teach the children that God so loved the world that he gave his begotten son." Thanks be to God for his unspeakable gift.
Santa then reached in his bag and pulled out a CANDY CANE and hung it on the tree. "Teach the children that the candy cane represents the shepherds' crook. The crook on the staff helps to bring back strayed sheep to the flock. The candy cane is the symbol that we are our brother's keeper."
He reached in again and pulled out an ANGEL. "Teach the children that it was the angels that heralded in the glorious news of the Savior's birth. The angels sang Glory to God in the highest, on earth peace and good will toward men."
Suddenly I heard a soft twinkling sound, and from his bag he pulled out a BELL,. "Teach the children that as the lost sheep are found by the sound of the bell, it should ring mankind to the fold. The bell symbolizes guidance and return.
Santa looked back and was pleased. He looked back at me and I saw that the twinkle was back in his eyes. He said, "Remember, teach the children the true meaning of Christmas and do not put me in the center, for I am but a humble servant of the One that is, and I bow down to worship him, our LORD, our GOD."
(reposted from http://llerrah.com/)
I too, hope to be found a humble servant of the One that is, and I bow down to worship him, our LORD, our GOD. - Merry Christmas!
Arlin
"What are you doing?" I started to ask. The words choked up in my throat and I saw he had tears in his eyes. His usual jolly manner was gone. Gone was the eager, boisterous soul we all know. He then answered me with a simple statement . . ."TEACH THE CHILDREN!" I was puzzled. What did he mean?
He anticipated my question and with one quick movement brought forth a miniature toy bag from behind the tree. As I stood bewildered, Santa said, "Teach the children!Teach them the old meaning of Christmas. The meaning that now-a-days Christmas has forgotten. "Santa then reached in his bag and pulled out a FIR TREE and placed it before the mantle. "Teach the children that the pure green color of the stately fir tree remains green all year round, depicting the everlasting hope of mankind, all the needles point heavenward, making it a symbol of man's thoughts turning toward heaven."
He again reached into his bag and pulled out a brilliant STAR. "Teach the children that the star was the heavenly sign of promises long ago. God promised a Savior for the world, and the star was the sign of fulfillment of His promise."
He then reached into his bag and pulled out a CANDLE. "Teach the children that the candle symbolizes that Christ is the light of the world, and when we see this great light we are reminded of He who displaces the darkness."
Once again he reached into his bag and removed a WREATH and placed it on the tree. "Teach the children that the wreath symbolizes the real nature of love. Real love never ceases. Love is one continuous round of affection."
He then pulled from his bag an ORNAMENT of himself. "Teach the children that I, Santa Claus, symbolize the generosity and good will we feel during the month of December."
He then brought out a HOLLY LEAF. "Teach the children that the holly plant represents immortality. It represents the crown of thorns worn by our Savior. The red holly berries represent the blood shed by Him.
Next he pulled from his bag a GIFT and said, "Teach the children that God so loved the world that he gave his begotten son." Thanks be to God for his unspeakable gift.
Santa then reached in his bag and pulled out a CANDY CANE and hung it on the tree. "Teach the children that the candy cane represents the shepherds' crook. The crook on the staff helps to bring back strayed sheep to the flock. The candy cane is the symbol that we are our brother's keeper."
He reached in again and pulled out an ANGEL. "Teach the children that it was the angels that heralded in the glorious news of the Savior's birth. The angels sang Glory to God in the highest, on earth peace and good will toward men."
Suddenly I heard a soft twinkling sound, and from his bag he pulled out a BELL,. "Teach the children that as the lost sheep are found by the sound of the bell, it should ring mankind to the fold. The bell symbolizes guidance and return.
Santa looked back and was pleased. He looked back at me and I saw that the twinkle was back in his eyes. He said, "Remember, teach the children the true meaning of Christmas and do not put me in the center, for I am but a humble servant of the One that is, and I bow down to worship him, our LORD, our GOD."
(reposted from http://llerrah.com/)
I too, hope to be found a humble servant of the One that is, and I bow down to worship him, our LORD, our GOD. - Merry Christmas!
Arlin
Sunday, December 19, 2010
Sales Matter
This is the sixth blog post regarding the 10 Things I Accidentally Learned on the Path to Growth. There is little question that many small business owners really dislike the whole sales process or anything that is related to it - particularly in the IT industry. But sales is not a four letter word - well it is - but it isn't a bad one. And there is little question that sales really do matter. That could be the understatement of the century actually.
Why is there such an aversion to sales by so many IT firms? Well for many of us, we came up to leading our company via the technical side of the business. We were engineers that were good at what we did and then decided to hire a few more like us and form a company. That works for a while but soon we hit the wall because we don't sell - we can fix anything under the sun - but we don't sell. I use don't rather than can't here intentionally. Anyone can sell - maybe not equally well - but it isn't that IT owners can't sell - it is because they almost despise the idea and certainly the notion of what being a salesperson is all about. Time to get over it!
Nothing happens until something gets sold. Let me say it again - nothing happens until something gets sold. OK - I have admitted it in public. We need to sell if we want to have a business. And sales is not a matter of luck. It happens when we build a sales process and system that makes sales happen regularly. We have to make the investment to put the right system and tools in place to make it happen. It can't be a hope and a prayer. That is not a sales strategy. Sales happen when we build the right foundation, hire the right people and execute the plan consistently. It really is not magic - it just takes consistent hard work doing the right things every day.
Most sales people fail because of a lack of support and management. It is common in the IT small business space to have a revolving door of sales people. We hire a person, let them flounder around on their own for 3-4 months and then fire them because they haven't sold much or anything at all. We blame them. Here is a newsflash - they likely are NOT the problem. You are. We set most new sales hires up for failure. We don't give them the right tools. We don't have a system in place. We don't manage or support them. We wish them well and sit back waiting to count the money. It just doesn't work like that. Owner attitude and support will make or break the sales engine in any company. Take a good look in the mirror and you will likely find the problem with your sales people.
When we do find that super human who is able to defy the odds of our lack of support and systems and actually sell something - it only lasts for a while. That is because without marketing support - every sales person will eventually run out of opportunities and people they know to sell to. It is our job to create leads for our sales people to follow up on. That is called marketing. It is hard work. It costs lots of money. It is somewhat luck - often more magic than science from my experience. But without marketing support - without aircover and other supporting tools to help drive leads and open doors - even a veteran sales person with many years of success will stub their toe. It is necessary to spend money on marketing to have consistent sales performance.
The pendulum is rapidly swinging toward sales. I see some major changes that are already in motion and will change the landscape as we know it for IT for many years to come. The cloud will force us to become sales organizations. You can resist, hide you head in the sand, and wake up one day wondering what has happened to your customer base. Or you can accept the fact that change is coming and make some changes. Some of these changes have been in motion for a while. Others are more a result of the current market and the move toward the cloud. But no matter the reason - they are coming. Here are some observations:
•From technical to sales focus
•From answering the phone to creating demand
•From selling products to selling solutions
•From T&E to flat rate services
•From on premise to the cloud
No longer will the company with the most technical genius necessarily win. I predict that those with most mature sales approach will actually come out on top. This new reality is that the IT business is moving toward a transactional relationship and those who can sell will win in that landscape. The reality is that companies must become sales organizations. We have to deal with these realities:
•Sales people are not the enemy
•It requires new thinking and management
•It requires new compensation models
Along with that we must become marketing organizations:
•Referrals are great but go only so far
•Most companies have just continued to sell new solutions to their current base
•We must become lead generators for the sales team
• Lead generation is not the vendors responsibility
Here is the reality as I see it. If you don’t embrace sales, growth will be stagnant and you will be frustrated. That is - if you survive. There will be plenty of companies that fail completely because they refuse to adopt the notion of becoming sales organizations. You don't have to like it - but it does work better if you do. You do have to do it and the time to begin is immediately. You can't afford to wait on this one. Begin now to learn to sell. Put the right systems in place. Hire someone and invest in them. Manage them closely and carefully. And begin to see the results - the sooner you begin - the sooner you will reap some of the goodness that comes with selling something. Remember - nothing happens until you sell something. Get after that today!
Why is there such an aversion to sales by so many IT firms? Well for many of us, we came up to leading our company via the technical side of the business. We were engineers that were good at what we did and then decided to hire a few more like us and form a company. That works for a while but soon we hit the wall because we don't sell - we can fix anything under the sun - but we don't sell. I use don't rather than can't here intentionally. Anyone can sell - maybe not equally well - but it isn't that IT owners can't sell - it is because they almost despise the idea and certainly the notion of what being a salesperson is all about. Time to get over it!
Nothing happens until something gets sold. Let me say it again - nothing happens until something gets sold. OK - I have admitted it in public. We need to sell if we want to have a business. And sales is not a matter of luck. It happens when we build a sales process and system that makes sales happen regularly. We have to make the investment to put the right system and tools in place to make it happen. It can't be a hope and a prayer. That is not a sales strategy. Sales happen when we build the right foundation, hire the right people and execute the plan consistently. It really is not magic - it just takes consistent hard work doing the right things every day.
Most sales people fail because of a lack of support and management. It is common in the IT small business space to have a revolving door of sales people. We hire a person, let them flounder around on their own for 3-4 months and then fire them because they haven't sold much or anything at all. We blame them. Here is a newsflash - they likely are NOT the problem. You are. We set most new sales hires up for failure. We don't give them the right tools. We don't have a system in place. We don't manage or support them. We wish them well and sit back waiting to count the money. It just doesn't work like that. Owner attitude and support will make or break the sales engine in any company. Take a good look in the mirror and you will likely find the problem with your sales people.
When we do find that super human who is able to defy the odds of our lack of support and systems and actually sell something - it only lasts for a while. That is because without marketing support - every sales person will eventually run out of opportunities and people they know to sell to. It is our job to create leads for our sales people to follow up on. That is called marketing. It is hard work. It costs lots of money. It is somewhat luck - often more magic than science from my experience. But without marketing support - without aircover and other supporting tools to help drive leads and open doors - even a veteran sales person with many years of success will stub their toe. It is necessary to spend money on marketing to have consistent sales performance.
The pendulum is rapidly swinging toward sales. I see some major changes that are already in motion and will change the landscape as we know it for IT for many years to come. The cloud will force us to become sales organizations. You can resist, hide you head in the sand, and wake up one day wondering what has happened to your customer base. Or you can accept the fact that change is coming and make some changes. Some of these changes have been in motion for a while. Others are more a result of the current market and the move toward the cloud. But no matter the reason - they are coming. Here are some observations:
•From technical to sales focus
•From answering the phone to creating demand
•From selling products to selling solutions
•From T&E to flat rate services
•From on premise to the cloud
No longer will the company with the most technical genius necessarily win. I predict that those with most mature sales approach will actually come out on top. This new reality is that the IT business is moving toward a transactional relationship and those who can sell will win in that landscape. The reality is that companies must become sales organizations. We have to deal with these realities:
•Sales people are not the enemy
•It requires new thinking and management
•It requires new compensation models
Along with that we must become marketing organizations:
•Referrals are great but go only so far
•Most companies have just continued to sell new solutions to their current base
•We must become lead generators for the sales team
• Lead generation is not the vendors responsibility
Here is the reality as I see it. If you don’t embrace sales, growth will be stagnant and you will be frustrated. That is - if you survive. There will be plenty of companies that fail completely because they refuse to adopt the notion of becoming sales organizations. You don't have to like it - but it does work better if you do. You do have to do it and the time to begin is immediately. You can't afford to wait on this one. Begin now to learn to sell. Put the right systems in place. Hire someone and invest in them. Manage them closely and carefully. And begin to see the results - the sooner you begin - the sooner you will reap some of the goodness that comes with selling something. Remember - nothing happens until you sell something. Get after that today!
Sunday, December 12, 2010
Growth is Hard Work
This is the fifth blog post regarding the 10 Things I Accidentally Learned on the Path to Growth. There is little question that many small business owners really don’t understand just how difficult the growth process really is. The common misconception is that if you show up every day and work hard – it just happens. That has not been my experience. There are many steps along the path to growing a business, and it must be done intentionally and executed continually to keep moving forward.
It all starts with you. You started your business because you wanted to be your own boss. You wanted to call the shots. There is a likelihood that you worked for someone else and decided you could do it better. But when you make the decision to grow – it can’t be about you anymore. Growth means you have to involve others – inside and outside your company. And that is the first step. You have to hire someone.
I remember those days well. It was a scary proposition. All of a sudden I was responsible for payroll which meant we had to be generating revenue. I sort of convinced myself it was ok to work some of the time and not pay myself – after all it was my company. But when you bring on that first employee they typically don’t quite see it that way. They come to work with the expectation they will get a paycheck and they should. So we have to know how we will generate enough revenue and keep them busy so we can pay them.
This is usually when the first lesson of growth occurs. It isn’t a straight line up. We have steps – take a few forward and then one backward. It looks something like this for many:
Seldom do companies grow with the green line – just up and to the right continually with no hiccups. Nor do companies maintain their situation like the red line – stagnant without change. I am a believer that if you are not growing – you are shrinking because I seldom if ever see a company just stay the same. But growth is a series of ups and downs and that is normal. It isn’t a mistake – and there isn’t anything wrong with you when it happens – it is the reality of how growth occurs.
There are a half dozen key stages I see in the growth cycle. The following chart shows some of them and areas where they may show up in your growth pattern.
You won’t necessarily experience all of these in the same order or at the same level as the chart describes, but as you grow your IT firm you are likely to experience all of them along the way.
That takes us to the second step – which is the need to become a sales organization. To be totally honest – this is the one where many companies get hung up. It may happen with 2-3 employees or you may make it to 7-8, but at some point sales will be your blocker to growth. Why? Nothing happens until someone sells something. I will go into much more detail on sales in a future blog post. It is essential, so embrace it and accept the fact it has to happen if you want to grow.
This is the first of what I consider to be the five key areas to growth:
1. Become a sales organization
2. Learn how to market
3. Put in place and execute process
4. Develop leadership
5. Understand the power of strategic relationships
My experience is that if you understand and work through these key blockers – you will grow and grow significantly. But each one can plateau you for years or for life. You can’t skip any step – the order may change – but all are essential to continually growing your company.
Realize that your business should serve you – not the other way around. If the business controls your life – you have a job. You probably left a job to start your business so don’t just trade one for the other. Dreams should be coming true. You should have more freedom – not less. It has to function without your presence – if you are required to make it work – you have a job with a different title on it. It should be predictable in meeting your goals and needs. It should not require you – or the 4 P’s from you:
· Your presence
· Your personality
· Your problem solving
· Your persperation
As you build your sales organization you begin to feel like you are losing control. Not everything goes through you anymore. You have to trust others. It is a huge step. But if everything flows through you – then you are the bottleneck to growth and not only will you restrict that – you restrict profit potential as well. You cannot be the center of your company forever. The only way you escape the problem is to keep growing and putting others in places you once were responsible. That is called delegation – not something many entrepreneurs are comfortable with – because no one does it quite like we do. But we have to get over that and let others do the work.
So you have began to build a sales team and hired a sales person or two. They are selling and then hit the wall. They run out of people they know and places to call on. That is when marketing has to kick in. Marketing is key to keeping a sales team productive. They don’t manufacture sales – they close leads and turn them into sales. Many small business owners make the mistake of thinking that just hiring a sales person fixes all the sales issues. In fact it just creates more needs. They have to be closely managed and there has to be a consistent lead generation system to keep them productive. They can’t just make this stuff up. It has to be fed to them so they can do what they do – go build relationships and close deals. That is what we hire them to do so now we have to equip them with the tools they need for success.
Next comes the need for some sanity in the midst of chaos. Many companies go for years without any process, procedures or policies in place. And then as they have some success and grow – things quickly get out of control because you can’t scale without processes. So in the teens for number of employees you have to get things written down and folks trained to follow them. It is hard work. We never have time for it. And changing behavior to follow is a difficult task because we are upsetting their world. Why do we need this all of a sudden? It is far easier to do this step early with few employees than wait for the chaos to require it. But most of us don’t make the time until it is mission critical. And that is driven as we grow to a certain point. Take it from me – it is far easier to write a process for two than for twelve. Do it early – do it well – and set the example to follow them.
After some more growth and success we begin to run into a leadership void. We typically expect our people to learn by osmosis and just being around us. Unfortunately it doesn’t quite work that way from my experience. So we have to make investments and train folks on leadership. That is essential as we will need to grow practices around key technologies, vertical markets or opportunities. Many companies don’t have nearly the leadership they need to continue growing. It is a sad reality. It happens because we have been too cheap to invest and too busy to notice than no one else is really stepping up to lead. This costs money and takes time – intentional and significant time – which far too many small business owners never take. We seldom invest in our own skill building let alone that of others. But if we want to keep growing we have to build leadership and a team that can help make that happen.
At some point along the curve we grow past our ability to drive continued growth on our own. That is when the value of strategic relationships kicks in gear. I find it happens somewhere past 50 employees and it becomes essential to learn to leverage the investment other partners in the ecosystem are making. We need to use their marketing, lead generations, services and tools to help to continue drive the business. But it is all about building and maintaining strong relationships. It won’t happen accidentally and I find this one area to be a key blocker for many companies that are trying to grow. More on this topic in a future blog post as well.
Growth has many steps. They don’t all move upward and to the right. It is hard work and requires determination, dedication and a very big desire. But you can grow if you truly want to and commit to it. We have experienced it even on the farm in Iowa where our business is operated. It isn’t magic – it is hard work and execution day after day to work toward a strategic objective. Plan for growth and then execute to achieve it. Realize it means change often along the way. But you can achieve it if you want to!
It all starts with you. You started your business because you wanted to be your own boss. You wanted to call the shots. There is a likelihood that you worked for someone else and decided you could do it better. But when you make the decision to grow – it can’t be about you anymore. Growth means you have to involve others – inside and outside your company. And that is the first step. You have to hire someone.
I remember those days well. It was a scary proposition. All of a sudden I was responsible for payroll which meant we had to be generating revenue. I sort of convinced myself it was ok to work some of the time and not pay myself – after all it was my company. But when you bring on that first employee they typically don’t quite see it that way. They come to work with the expectation they will get a paycheck and they should. So we have to know how we will generate enough revenue and keep them busy so we can pay them.
This is usually when the first lesson of growth occurs. It isn’t a straight line up. We have steps – take a few forward and then one backward. It looks something like this for many:
Seldom do companies grow with the green line – just up and to the right continually with no hiccups. Nor do companies maintain their situation like the red line – stagnant without change. I am a believer that if you are not growing – you are shrinking because I seldom if ever see a company just stay the same. But growth is a series of ups and downs and that is normal. It isn’t a mistake – and there isn’t anything wrong with you when it happens – it is the reality of how growth occurs.There are a half dozen key stages I see in the growth cycle. The following chart shows some of them and areas where they may show up in your growth pattern.
You won’t necessarily experience all of these in the same order or at the same level as the chart describes, but as you grow your IT firm you are likely to experience all of them along the way.That takes us to the second step – which is the need to become a sales organization. To be totally honest – this is the one where many companies get hung up. It may happen with 2-3 employees or you may make it to 7-8, but at some point sales will be your blocker to growth. Why? Nothing happens until someone sells something. I will go into much more detail on sales in a future blog post. It is essential, so embrace it and accept the fact it has to happen if you want to grow.
This is the first of what I consider to be the five key areas to growth:
1. Become a sales organization
2. Learn how to market
3. Put in place and execute process
4. Develop leadership
5. Understand the power of strategic relationships
My experience is that if you understand and work through these key blockers – you will grow and grow significantly. But each one can plateau you for years or for life. You can’t skip any step – the order may change – but all are essential to continually growing your company.
Realize that your business should serve you – not the other way around. If the business controls your life – you have a job. You probably left a job to start your business so don’t just trade one for the other. Dreams should be coming true. You should have more freedom – not less. It has to function without your presence – if you are required to make it work – you have a job with a different title on it. It should be predictable in meeting your goals and needs. It should not require you – or the 4 P’s from you:
· Your presence
· Your personality
· Your problem solving
· Your persperation
As you build your sales organization you begin to feel like you are losing control. Not everything goes through you anymore. You have to trust others. It is a huge step. But if everything flows through you – then you are the bottleneck to growth and not only will you restrict that – you restrict profit potential as well. You cannot be the center of your company forever. The only way you escape the problem is to keep growing and putting others in places you once were responsible. That is called delegation – not something many entrepreneurs are comfortable with – because no one does it quite like we do. But we have to get over that and let others do the work.
So you have began to build a sales team and hired a sales person or two. They are selling and then hit the wall. They run out of people they know and places to call on. That is when marketing has to kick in. Marketing is key to keeping a sales team productive. They don’t manufacture sales – they close leads and turn them into sales. Many small business owners make the mistake of thinking that just hiring a sales person fixes all the sales issues. In fact it just creates more needs. They have to be closely managed and there has to be a consistent lead generation system to keep them productive. They can’t just make this stuff up. It has to be fed to them so they can do what they do – go build relationships and close deals. That is what we hire them to do so now we have to equip them with the tools they need for success.
Next comes the need for some sanity in the midst of chaos. Many companies go for years without any process, procedures or policies in place. And then as they have some success and grow – things quickly get out of control because you can’t scale without processes. So in the teens for number of employees you have to get things written down and folks trained to follow them. It is hard work. We never have time for it. And changing behavior to follow is a difficult task because we are upsetting their world. Why do we need this all of a sudden? It is far easier to do this step early with few employees than wait for the chaos to require it. But most of us don’t make the time until it is mission critical. And that is driven as we grow to a certain point. Take it from me – it is far easier to write a process for two than for twelve. Do it early – do it well – and set the example to follow them.
After some more growth and success we begin to run into a leadership void. We typically expect our people to learn by osmosis and just being around us. Unfortunately it doesn’t quite work that way from my experience. So we have to make investments and train folks on leadership. That is essential as we will need to grow practices around key technologies, vertical markets or opportunities. Many companies don’t have nearly the leadership they need to continue growing. It is a sad reality. It happens because we have been too cheap to invest and too busy to notice than no one else is really stepping up to lead. This costs money and takes time – intentional and significant time – which far too many small business owners never take. We seldom invest in our own skill building let alone that of others. But if we want to keep growing we have to build leadership and a team that can help make that happen.
At some point along the curve we grow past our ability to drive continued growth on our own. That is when the value of strategic relationships kicks in gear. I find it happens somewhere past 50 employees and it becomes essential to learn to leverage the investment other partners in the ecosystem are making. We need to use their marketing, lead generations, services and tools to help to continue drive the business. But it is all about building and maintaining strong relationships. It won’t happen accidentally and I find this one area to be a key blocker for many companies that are trying to grow. More on this topic in a future blog post as well.
Growth has many steps. They don’t all move upward and to the right. It is hard work and requires determination, dedication and a very big desire. But you can grow if you truly want to and commit to it. We have experienced it even on the farm in Iowa where our business is operated. It isn’t magic – it is hard work and execution day after day to work toward a strategic objective. Plan for growth and then execute to achieve it. Realize it means change often along the way. But you can achieve it if you want to!
Thursday, December 9, 2010
The Power of Peer Coaching
Peer groups are the rage in the IT industry today. Lots of options exist and many people are spending significant resources of time, money, and brain capital to participate. Is it worthwhile? At HTG we believe it has the potential to be the most impactful thing that people can participate in. But the value is very dependent on folks doing a great job as peer coaches. In fact, if groups fail at that core level, it quickly loses value and causes consideration of whether it is a worthwhile investment or not. Harvard Business review wrote a great article on the topic of peer coaching. It was written by Stewart D. Friedman who is Practice Professor of Management at the Wharton School. Following are his thoughts and I encourage you to read and consider how you can hone your skills as a peer coach.
The Directive Approach — Giving Useful Feedback
The essence of directive coaching is providing feedback. Take this approach when your goal as a coach is to instruct others on what they've done well and what they can do to improve.
As a coach, one of the main gifts you have to offer to anyone who you've seen in action is to express to them your observation of that action and its consequences. It's best to present your impressions straightforwardly and with compassion. The quality and sensitivity of a coach's feedback can make a huge difference in spurring growth.
On the other side, to be an effective peer, the primary challenge you face is to remain open and manage your natural tendency to be defensive in reacting to feedback — information about your actions and their consequences — that is in some way inconsistent with how you currently view yourself. Getting good at both giving and receiving directive coaching requires practice. Very few people are naturally gifted in this essential skill.
In providing directive feedback, your main responsibility is to identify strengths and clarify areas for improvement that address your peer's goals, while at the same time finding ways to reduce defensiveness. You produce value as a peer coach when you give feedback that, first and foremost, addresses goals that are a real priority for them, not for you. It's useful, too, for you to push your peers to stretch and go as far as they can in pursuing the goals that matter to them.
I've found that the best way to offer feedback is to prepare what you're going to say in advance and to make sure it's balanced, not overly positive or negative; a mix of both is best, not least because it enhances your credibility and your peer's trust that you're being candid. Be direct and specific about what you've seen and the consequences of your peer's actions. Of course, if you are being constructively critical — pointing out a peer's mistake or area for improvement — you've also got to offer a constructive suggestion or two.
When you give directive feedback, you want to make sure that what you've said is what has actually been heard and understood by your peer. The easiest way to do this is to simply ask your peer to repeat back to you how she took what you said and what it means to her. Finally, it's almost always a good idea to conclude an offering of directive feedback with an expression of your interest in providing follow-up assistance, leaving the door open for future opportunities for you to help.
The Nondirective Approach — Asking Smart Questions
The essence of nondirective coaching is simply asking useful, probing questions. Many people fear change because it forces them into unknown territory, where things are unpredictable and unfamiliar. And yet there are predictable stages people go through when they undertake intentional change. In taking the non-directive approach, your goal is to help others to see and feel the need to create meaningful, sustainable change. Here are the stages and some of the key questions to ask in helping your peers to face the challenges associated with each:
What's the problem?
The first step is identifying the need for change. This can be difficult, as many of us ignore information that disconfirms our current perceptions or threatens the status quo. Coaches can help identify blind spots — by encouraging self-reflection about things that aren't obvious to their peers. As a coach, basic questions to ask to increase awareness are:
-As you think about your goals, what's not working well in your life?
-What are the consequences of this issue for you and for the important people in your life?
-What is the source of the need to change — is it in you or is it external?
Why bother?
The next stage is about the belief that the need to change is urgent enough to take action. Because we naturally tend towards continuing the status quo, if doing something new doesn't feel urgent, it's not likely to occur. Coaches can help raise urgency by asking questions such as these:
-Looking ahead, what will happen if you don't change?
-What will happen if you do change?
What's your decision?
The decision to change is a crucial moment because it marks the point when your mind shifts and you begin to see a different future. It is also a fragile point in planned change processes, fraught with temptations to revert to the way things have always been and distractions away from the focused effort that's required to do something new and make it stick. However, coaches can help peers reach and move beyond this point by asking:
-What have you decided to do differently and why?
-What is the ideal outcome?
-What are your new goals?
What steps exactly?
What are the possible step-by-step actions the peer can take to make this decision real in his or her work and life? Good coaches ask peers to think aloud about what to do differently, how to overcome obstacles, and what skills or sources of support are needed. You can help your peer discover specific ideas for how to better accomplish goals by asking:
-What exactly will you do, and when will you do it?
-How will you measure progress?
-What stands in the way, and how will you overcome these barriers?
-How will you generate needed support?
Are you really in?
Generating sufficient commitment to follow through is one of the most challenging aspects of any change process. Because commitment wanes without a sense of urgency, coaches should continually test for this. Coaches can ask:
-What if this is harder than you think?
-What are the first steps — and the next steps — you will take?
-How will you maintain your sense of urgency?
How will you sustain it?
Even if a peer has made it through all of the prior stages, it is crucial that he or she receive reinforcement for the positive outcomes gained. Encouragement at every small step builds momentum, and coaches should provide frequent reinforcement and celebrate their peers' successes to bolster confidence and help peers avoid slippage. The key questions here are:
-What impact has your new behavior had on you and others?
-What accomplishments are you proud of achieving?
-Is there a smarter step that might help you build momentum?
-How can I (as your coach) reinforce your commitment to action?
Get in the Game!
Directive and non-directive peer coaching can make a real difference in helping people change. Try both methods and then find out what works and what doesn't by asking your peers to critique your actions. Like any other skill, practice as a peer coach — with follow-up assessment of what works and what doesn't, along with support from people (that is, your peers) who are dedicated to helping you become more adept at helping them — makes perfect. (end of HBR info)
This is some fantastic guidance on how we can most effectively help each other as we gather and work on our task in HTG of helping each other achieve business and personal growth. It is work – it requires thought – it takes a lot of effort – but the rewards are significant. We need to focus on being better peer coaches for each other! Let’s get after it!
The Directive Approach — Giving Useful Feedback
The essence of directive coaching is providing feedback. Take this approach when your goal as a coach is to instruct others on what they've done well and what they can do to improve.
As a coach, one of the main gifts you have to offer to anyone who you've seen in action is to express to them your observation of that action and its consequences. It's best to present your impressions straightforwardly and with compassion. The quality and sensitivity of a coach's feedback can make a huge difference in spurring growth.
On the other side, to be an effective peer, the primary challenge you face is to remain open and manage your natural tendency to be defensive in reacting to feedback — information about your actions and their consequences — that is in some way inconsistent with how you currently view yourself. Getting good at both giving and receiving directive coaching requires practice. Very few people are naturally gifted in this essential skill.
In providing directive feedback, your main responsibility is to identify strengths and clarify areas for improvement that address your peer's goals, while at the same time finding ways to reduce defensiveness. You produce value as a peer coach when you give feedback that, first and foremost, addresses goals that are a real priority for them, not for you. It's useful, too, for you to push your peers to stretch and go as far as they can in pursuing the goals that matter to them.
I've found that the best way to offer feedback is to prepare what you're going to say in advance and to make sure it's balanced, not overly positive or negative; a mix of both is best, not least because it enhances your credibility and your peer's trust that you're being candid. Be direct and specific about what you've seen and the consequences of your peer's actions. Of course, if you are being constructively critical — pointing out a peer's mistake or area for improvement — you've also got to offer a constructive suggestion or two.
When you give directive feedback, you want to make sure that what you've said is what has actually been heard and understood by your peer. The easiest way to do this is to simply ask your peer to repeat back to you how she took what you said and what it means to her. Finally, it's almost always a good idea to conclude an offering of directive feedback with an expression of your interest in providing follow-up assistance, leaving the door open for future opportunities for you to help.
The Nondirective Approach — Asking Smart Questions
The essence of nondirective coaching is simply asking useful, probing questions. Many people fear change because it forces them into unknown territory, where things are unpredictable and unfamiliar. And yet there are predictable stages people go through when they undertake intentional change. In taking the non-directive approach, your goal is to help others to see and feel the need to create meaningful, sustainable change. Here are the stages and some of the key questions to ask in helping your peers to face the challenges associated with each:
What's the problem?
The first step is identifying the need for change. This can be difficult, as many of us ignore information that disconfirms our current perceptions or threatens the status quo. Coaches can help identify blind spots — by encouraging self-reflection about things that aren't obvious to their peers. As a coach, basic questions to ask to increase awareness are:
-As you think about your goals, what's not working well in your life?
-What are the consequences of this issue for you and for the important people in your life?
-What is the source of the need to change — is it in you or is it external?
Why bother?
The next stage is about the belief that the need to change is urgent enough to take action. Because we naturally tend towards continuing the status quo, if doing something new doesn't feel urgent, it's not likely to occur. Coaches can help raise urgency by asking questions such as these:
-Looking ahead, what will happen if you don't change?
-What will happen if you do change?
What's your decision?
The decision to change is a crucial moment because it marks the point when your mind shifts and you begin to see a different future. It is also a fragile point in planned change processes, fraught with temptations to revert to the way things have always been and distractions away from the focused effort that's required to do something new and make it stick. However, coaches can help peers reach and move beyond this point by asking:
-What have you decided to do differently and why?
-What is the ideal outcome?
-What are your new goals?
What steps exactly?
What are the possible step-by-step actions the peer can take to make this decision real in his or her work and life? Good coaches ask peers to think aloud about what to do differently, how to overcome obstacles, and what skills or sources of support are needed. You can help your peer discover specific ideas for how to better accomplish goals by asking:
-What exactly will you do, and when will you do it?
-How will you measure progress?
-What stands in the way, and how will you overcome these barriers?
-How will you generate needed support?
Are you really in?
Generating sufficient commitment to follow through is one of the most challenging aspects of any change process. Because commitment wanes without a sense of urgency, coaches should continually test for this. Coaches can ask:
-What if this is harder than you think?
-What are the first steps — and the next steps — you will take?
-How will you maintain your sense of urgency?
How will you sustain it?
Even if a peer has made it through all of the prior stages, it is crucial that he or she receive reinforcement for the positive outcomes gained. Encouragement at every small step builds momentum, and coaches should provide frequent reinforcement and celebrate their peers' successes to bolster confidence and help peers avoid slippage. The key questions here are:
-What impact has your new behavior had on you and others?
-What accomplishments are you proud of achieving?
-Is there a smarter step that might help you build momentum?
-How can I (as your coach) reinforce your commitment to action?
Get in the Game!
Directive and non-directive peer coaching can make a real difference in helping people change. Try both methods and then find out what works and what doesn't by asking your peers to critique your actions. Like any other skill, practice as a peer coach — with follow-up assessment of what works and what doesn't, along with support from people (that is, your peers) who are dedicated to helping you become more adept at helping them — makes perfect. (end of HBR info)
This is some fantastic guidance on how we can most effectively help each other as we gather and work on our task in HTG of helping each other achieve business and personal growth. It is work – it requires thought – it takes a lot of effort – but the rewards are significant. We need to focus on being better peer coaches for each other! Let’s get after it!
Sunday, December 5, 2010
Cash Matters
This is the fourth blog post regarding the 10 Things I Accidentally Learned on the Path to Growth and is a topic many of us as small business owners don’t deal with well at all. After 25 years in this business, it has become more apparent than ever that access to cash is a key to success. I hear and see so many small businesses strapped by a lack of cash resources. They may even be doing well from a sales perspective, but because of poor cash management they have totally limited their options and ultimately stymied their ability to grow. Cash is king and we must never forget that reality.
A strong balance sheet goes a long way during tough times
One of the common mistakes I see owners make is to rob their companies of all the cash they accumulate as profits during the year. That assumes that they are generating a profit, but for any company to survive that has to be one of the outcomes of doing business. But removing all the cash leaves the company vulnerable in the event of tough economic conditions, or even a temporary downturn. That is particularly true if you don’t have a bank credit line in place. There are varying opinions on how much equity to leave in a business – but my advice is to be conservative and leave as much in as you possibly can. Now if you have to take all you earn just to survive each year – you really don’t have a business – just a job that is meeting your basic needs. A true business will generate cash and I suggest you leave as much as possible inside the company until you need it – for an M&A or tough times.
Risk is part of the equation
Spending cash on growing the business is risky. There are no guarantees from my experience. You can make some bets that are more likely to succeed than others, but there is an element of risk in every growth decision. So if you can’t afford to lose the cash you are spending – don’t do it. I have lost money when I thought it was a sure thing, and had success when I expected less than stellar results. If you can’t stomach the risk – don’t spend the cash. But you won’t grow if you don’t take calculated risk. It is part of the equation. And some people just don’t deal with it well at all. Know your risk tolerance, and that of your spouse, before you go too far.
Profit is not bad – you are not taking advantage of your customer
I struggled with this reality for a very long time. My focus was on providing the maximum value as long as I didn’t lose too much money doing it. Profit was almost a bad word. Could I cut the price another point or two so they get a really good deal. Here is the reality – a failure in your business is not in the best interest of your customer. If you ask them if they prefer to save a few dollars and buy from you driving you out of business, or pay a little more to have a stable business partner, they will take the latter every time. No one wants to have to change IT providers because they saved a few bucks. Profit has to be part of the equation. In fact – you should start there – with the amount of profit dollars you want or need to clear and work backward to determine sales, margin and expense lines on your P&L to make sure you end up making money.
Profit should not be a mistake
Too often we just take the leftovers when it comes to profit. It is more of a hope and prayer than a strategy and planned outcome. That is the wrong way to run your company. You need to plan for it, expect it, and make sure you achieve it. When you do it should be celebrated through rewarding your team with some of the bounty. Profit doesn’t happen by accident. It requires planning and focus to achieve it every year!
Paying tax is a good thing
If you had told me 10 years ago I would write a blog with this sub heading I would have called you crazy. I ran my company for a long time with a goal of zero tax liability. Just break even so I didn’t have to pay the government any taxes. Now don’t get me wrong – I hate paying tax – but I have come to appreciate the fact that only profitable and growing companies are in a position to pay tax. And if you want to grow – continually producing a P&L with no profit is a limiting factor. Bankers are not crazy about lending money to non-profitable companies. There is no leverage to be had with zero as the result of a year’s work. We have to be wise in how we manage our income, but tax is not an evil thing. We need to make money which means we will pay taxes. That is just as reliable as the fact that we will all die someday.
Bankers are your friend
So many partners think of bankers as an adversarial relationship. I often hear the comment that “the bank won’t loan me any money when I need it”. That is exactly true. They are not looking for companies that are barely holding on by a thread and in need of a cash infusion. Banks loan money to companies that have a track record showing they will be able to pay them back. They aren’t looking for long shots or hopeful returns. You have to build a relationship and a track record if you want to borrow money for growth. Invest the time – build the relationship – give them access to your plans and numbers. They are critical for growth.
Here are some other ideas around getting cash in order.
• Conserve cash – don’t spend it all
• Get your bank credit lines expanded
• Update your vendor and distributor credit lines
• Clean up your financial house
• Evaluate your staff and trim unnecessary
• Evaluate all expenses and make cost cuts
• Talk with your team so they understand why taking care of cash and profits matter to them
• Create profit sharing options to drive the team to join the chase to generate cash
Cash does matter greatly if you want to grow. In fact, I will boldly say you won’t grow without it. Some are able to have some short term success without generating regular profits and cash – but it is unsustainable and won’t scale. The more you want to grow – the more cash you will need. And the sad reality is that many don’t learn that lesson until they need it for a deal or some other great opportunity and have to pass because they don’t have any. It isn’t rocket science. Cash matters – and it doesn’t come accidentally. Plan to generate cash and then manage it well. It is a critical growth factor – cash is truly king!
A strong balance sheet goes a long way during tough times
One of the common mistakes I see owners make is to rob their companies of all the cash they accumulate as profits during the year. That assumes that they are generating a profit, but for any company to survive that has to be one of the outcomes of doing business. But removing all the cash leaves the company vulnerable in the event of tough economic conditions, or even a temporary downturn. That is particularly true if you don’t have a bank credit line in place. There are varying opinions on how much equity to leave in a business – but my advice is to be conservative and leave as much in as you possibly can. Now if you have to take all you earn just to survive each year – you really don’t have a business – just a job that is meeting your basic needs. A true business will generate cash and I suggest you leave as much as possible inside the company until you need it – for an M&A or tough times.
Risk is part of the equation
Spending cash on growing the business is risky. There are no guarantees from my experience. You can make some bets that are more likely to succeed than others, but there is an element of risk in every growth decision. So if you can’t afford to lose the cash you are spending – don’t do it. I have lost money when I thought it was a sure thing, and had success when I expected less than stellar results. If you can’t stomach the risk – don’t spend the cash. But you won’t grow if you don’t take calculated risk. It is part of the equation. And some people just don’t deal with it well at all. Know your risk tolerance, and that of your spouse, before you go too far.
Profit is not bad – you are not taking advantage of your customer
I struggled with this reality for a very long time. My focus was on providing the maximum value as long as I didn’t lose too much money doing it. Profit was almost a bad word. Could I cut the price another point or two so they get a really good deal. Here is the reality – a failure in your business is not in the best interest of your customer. If you ask them if they prefer to save a few dollars and buy from you driving you out of business, or pay a little more to have a stable business partner, they will take the latter every time. No one wants to have to change IT providers because they saved a few bucks. Profit has to be part of the equation. In fact – you should start there – with the amount of profit dollars you want or need to clear and work backward to determine sales, margin and expense lines on your P&L to make sure you end up making money.
Profit should not be a mistake
Too often we just take the leftovers when it comes to profit. It is more of a hope and prayer than a strategy and planned outcome. That is the wrong way to run your company. You need to plan for it, expect it, and make sure you achieve it. When you do it should be celebrated through rewarding your team with some of the bounty. Profit doesn’t happen by accident. It requires planning and focus to achieve it every year!
Paying tax is a good thing
If you had told me 10 years ago I would write a blog with this sub heading I would have called you crazy. I ran my company for a long time with a goal of zero tax liability. Just break even so I didn’t have to pay the government any taxes. Now don’t get me wrong – I hate paying tax – but I have come to appreciate the fact that only profitable and growing companies are in a position to pay tax. And if you want to grow – continually producing a P&L with no profit is a limiting factor. Bankers are not crazy about lending money to non-profitable companies. There is no leverage to be had with zero as the result of a year’s work. We have to be wise in how we manage our income, but tax is not an evil thing. We need to make money which means we will pay taxes. That is just as reliable as the fact that we will all die someday.
Bankers are your friend
So many partners think of bankers as an adversarial relationship. I often hear the comment that “the bank won’t loan me any money when I need it”. That is exactly true. They are not looking for companies that are barely holding on by a thread and in need of a cash infusion. Banks loan money to companies that have a track record showing they will be able to pay them back. They aren’t looking for long shots or hopeful returns. You have to build a relationship and a track record if you want to borrow money for growth. Invest the time – build the relationship – give them access to your plans and numbers. They are critical for growth.
Here are some other ideas around getting cash in order.
• Conserve cash – don’t spend it all
• Get your bank credit lines expanded
• Update your vendor and distributor credit lines
• Clean up your financial house
• Evaluate your staff and trim unnecessary
• Evaluate all expenses and make cost cuts
• Talk with your team so they understand why taking care of cash and profits matter to them
• Create profit sharing options to drive the team to join the chase to generate cash
Cash does matter greatly if you want to grow. In fact, I will boldly say you won’t grow without it. Some are able to have some short term success without generating regular profits and cash – but it is unsustainable and won’t scale. The more you want to grow – the more cash you will need. And the sad reality is that many don’t learn that lesson until they need it for a deal or some other great opportunity and have to pass because they don’t have any. It isn’t rocket science. Cash matters – and it doesn’t come accidentally. Plan to generate cash and then manage it well. It is a critical growth factor – cash is truly king!
Thursday, December 2, 2010
The Problem with Best Practices
HTG peer groups have been focused on best practice sharing since the first group was founded back in 2000. Those learning’s have helped numerous companies grow and become more successful in their markets. But over time we noticed that the value of best practice sharing seemed to diminish. Why? Ron Ashkenas wrote a great post on “Why Best Practices Are Hard to Practice” on Harvard Business Review online that explains some of the issues we found. Here are some excerpts from his excellent article:
“It would be easy to say that processes and tools cannot be picked up and moved from one organization to another. After all, each organization is unique — with different markets, commercial forces, structures, histories, leadership, and cultures. But if there weren't any universals, the sharing and transferring of best practices would be a waste of time, and there would be little learning across companies (or even within companies). But in truth some firms are exceptionally good at "stealing shamelessly." (In HTG we call it SWIPE – steal with integrity and pride every day). For example, think of all the companies that have benefited from Toyota's production model.
So why do some organizations succeed at utilizing processes and tools developed elsewhere while others fail? Here are two common pitfalls of applying best practices, and how to avoid them:
Lack of adaptation: The first pitfall is the temptation to take on a process or tool without tailoring it to the new environment. Because companies are so different, it is rare that a practice developed in one place can be applied elsewhere without significant customization. This not only requires learning the tool or process, but truly understanding the principles behind it. Practice comprehension calls for hard work — far beyond making road trips or sending a few people for training.
Lack of adoption: The second pitfall is to utilize a borrowed process or tool without full leadership support and commitment, as though just having the tool itself will generate the desired results. A former client at GE called this "the difference between doing it and really doing it." Often the wrong people are tasked with driving the process.
One of the characteristics of great companies is that they actively learn from others. But to be successful at doing this requires more than just identifying and borrowing best practices; it also requires adaptation to your culture and full adoption by your leadership. Without paying attention to these two steps, it is unlikely that best practices will actually be put into practice.”
To make best practice sharing valuable – HTG members have to learn how to adapt them to their situation. Seldom do you receive a best practice from a company exactly like yours. There are differences in your market, staff, skills, strategy, focus, management and on it goes. You have to take it and make it your own.
You also have to adopt it wholeheartedly. A best practice that is dumped on your staff to execute will become a failed practice. Ownership and executive management must drive best practice adoption by leading that charge. You can’t throw it over the fence and expect the right results. If you want it to work in your company, then you must own it until it does.
There is still much value to the learning’s we can glean from sharing best practices with each other. But the reality is that unless we adapt and adopt – there is no impact at all. And that makes it a matter of hallucination!
“It would be easy to say that processes and tools cannot be picked up and moved from one organization to another. After all, each organization is unique — with different markets, commercial forces, structures, histories, leadership, and cultures. But if there weren't any universals, the sharing and transferring of best practices would be a waste of time, and there would be little learning across companies (or even within companies). But in truth some firms are exceptionally good at "stealing shamelessly." (In HTG we call it SWIPE – steal with integrity and pride every day). For example, think of all the companies that have benefited from Toyota's production model.
So why do some organizations succeed at utilizing processes and tools developed elsewhere while others fail? Here are two common pitfalls of applying best practices, and how to avoid them:
Lack of adaptation: The first pitfall is the temptation to take on a process or tool without tailoring it to the new environment. Because companies are so different, it is rare that a practice developed in one place can be applied elsewhere without significant customization. This not only requires learning the tool or process, but truly understanding the principles behind it. Practice comprehension calls for hard work — far beyond making road trips or sending a few people for training.
Lack of adoption: The second pitfall is to utilize a borrowed process or tool without full leadership support and commitment, as though just having the tool itself will generate the desired results. A former client at GE called this "the difference between doing it and really doing it." Often the wrong people are tasked with driving the process.
One of the characteristics of great companies is that they actively learn from others. But to be successful at doing this requires more than just identifying and borrowing best practices; it also requires adaptation to your culture and full adoption by your leadership. Without paying attention to these two steps, it is unlikely that best practices will actually be put into practice.”
To make best practice sharing valuable – HTG members have to learn how to adapt them to their situation. Seldom do you receive a best practice from a company exactly like yours. There are differences in your market, staff, skills, strategy, focus, management and on it goes. You have to take it and make it your own.
You also have to adopt it wholeheartedly. A best practice that is dumped on your staff to execute will become a failed practice. Ownership and executive management must drive best practice adoption by leading that charge. You can’t throw it over the fence and expect the right results. If you want it to work in your company, then you must own it until it does.
There is still much value to the learning’s we can glean from sharing best practices with each other. But the reality is that unless we adapt and adopt – there is no impact at all. And that makes it a matter of hallucination!
Sunday, November 28, 2010
Leadership Matters
This is the third blog post regarding the 10 Things I Accidentally Learned on the Path to Growth and is a topic many of us as small business owners take for granted. After 25 years in this business, it has become more apparent than ever that leadership is a key to success. As I work with small businesses both inside the IT channel and in the marketplace at large, leadership seems to be a missing link for many organizations today. There seems to be a tendency to believe that investments in tools and processes will make businesses successful. My experience says that just ain’t so.
Leadership is required to have ongoing success. People don’t “just get it” by some sort of osmosis. They need, and quite frankly, want to be led. The problem with leadership is not so much the followers as it is those who are supposed to be the leaders. Owning a business is more than just filing the needed paperwork. It doesn’t make you a leader any more than just giving birth makes a woman a good mother. Leadership requires focus and hard work. It means we have to invest in ourselves – now that is a new concept for many – because we have to be able to grow if we want to lead our company.
The Law of the Lid
John Maxwell talks about the “Law of the Lid” which unfortunately describes the place many small businesses are today. This law says that you can’t lead your company beyond your personal leadership level. The company can’t pass you up. You are the lid – and if you are not continually investing in yourself and growing in your leadership and management skills – your company will get stuck and not be able to continue moving forward. Often owners want to blame their staff for these periods of stagnation when they need to look in the mirror and realize the problem starts with themselves.
Level 5 Leadership
One of the best descriptions of the way leadership growth occurs comes from the 5 levels of leadership. Most of us in IT began our companies as highly competent contributors – we were very good at what we did and decided to start a company. Problem is – that is level one leadership – and it doesn’t take a company very far. If we don’t invest in learning and growing our leadership skills we will remain leading company of ourselves and maybe one or two others. We can’t grow beyond that as we are the limiting factor. We must move up the leadership ladder and work toward becoming a level five leader. At that point we will have opened the doors to leading our company as far as we wish – leadership won’t be the issue – and we can grow and take our team toward that strategy and planning we have put in place.
Discipline
Another aspect of leadership is that it always is focused on people. But beyond people, good-to-great organizations have three forms of discipline:
• Disciplined people – you don’t need hierarchy,
• Disciplined thought – you don’t need bureaucracy
• Disciplined action – you don’t need excessive controls
When you combine a culture of discipline with an ethic of entrepreneurship, it results in great performance. But this culture has to be caught, not just taught, and it requires leadership from the top. The culture of discipline will happen as your team observes what and how you live. As the owner, you set the tone and the culture. It is up to you to create the discipline your company needs to succeed. It comes through leadership.
A hard question
Verne Harnish wrote that A-Player execs read 24 books per year. How do you measure up with those facts which were gathered by Brad Smart, father of the Topgrading concept, who researched 6500 top executives? So what is the difference between the A-players and the C-players? The A-players were continuous learners, reading on average 24 books per year (12 fiction and 12 non-fiction). That is how we become better leaders. We have to be learners. It must be continual, focused and intentional as we build our leadership toolbox and skills. If we don’t, we really have to ask ourselves whether we belong on our own bus or not. As the research showed - those who don't read barely have an advantage over those who can't!! That is a sobering reality. We must dig in and learn.
My story
I led for many years believing I had all the skill I needed to take us forward. I even bragged that I hadn’t read a book since high school – I managed to graduate college without reading any books at all – just love those Cliff notes and study aids. But we stalled and I was frustrated and then one day I looked in the mirror and realized that the problem was me. I had gone about as far as I could take us and realized it was time to wake up and become a leader. So I began reading and getting involved with peers and attending seminars and just learning all I could. I was the cap. Too often that is how small business goes. The owner just doesn’t make the needed investment in self and team to keep growing the business. Don’t make that mistake. You truly can’t lead your company past your own ability. Leadership matters – become a continual learner and take your company to new heights.
Leadership is required to have ongoing success. People don’t “just get it” by some sort of osmosis. They need, and quite frankly, want to be led. The problem with leadership is not so much the followers as it is those who are supposed to be the leaders. Owning a business is more than just filing the needed paperwork. It doesn’t make you a leader any more than just giving birth makes a woman a good mother. Leadership requires focus and hard work. It means we have to invest in ourselves – now that is a new concept for many – because we have to be able to grow if we want to lead our company.
The Law of the Lid
John Maxwell talks about the “Law of the Lid” which unfortunately describes the place many small businesses are today. This law says that you can’t lead your company beyond your personal leadership level. The company can’t pass you up. You are the lid – and if you are not continually investing in yourself and growing in your leadership and management skills – your company will get stuck and not be able to continue moving forward. Often owners want to blame their staff for these periods of stagnation when they need to look in the mirror and realize the problem starts with themselves.
Level 5 Leadership
One of the best descriptions of the way leadership growth occurs comes from the 5 levels of leadership. Most of us in IT began our companies as highly competent contributors – we were very good at what we did and decided to start a company. Problem is – that is level one leadership – and it doesn’t take a company very far. If we don’t invest in learning and growing our leadership skills we will remain leading company of ourselves and maybe one or two others. We can’t grow beyond that as we are the limiting factor. We must move up the leadership ladder and work toward becoming a level five leader. At that point we will have opened the doors to leading our company as far as we wish – leadership won’t be the issue – and we can grow and take our team toward that strategy and planning we have put in place.
Discipline
Another aspect of leadership is that it always is focused on people. But beyond people, good-to-great organizations have three forms of discipline:
• Disciplined people – you don’t need hierarchy,
• Disciplined thought – you don’t need bureaucracy
• Disciplined action – you don’t need excessive controls
When you combine a culture of discipline with an ethic of entrepreneurship, it results in great performance. But this culture has to be caught, not just taught, and it requires leadership from the top. The culture of discipline will happen as your team observes what and how you live. As the owner, you set the tone and the culture. It is up to you to create the discipline your company needs to succeed. It comes through leadership.
A hard question
Verne Harnish wrote that A-Player execs read 24 books per year. How do you measure up with those facts which were gathered by Brad Smart, father of the Topgrading concept, who researched 6500 top executives? So what is the difference between the A-players and the C-players? The A-players were continuous learners, reading on average 24 books per year (12 fiction and 12 non-fiction). That is how we become better leaders. We have to be learners. It must be continual, focused and intentional as we build our leadership toolbox and skills. If we don’t, we really have to ask ourselves whether we belong on our own bus or not. As the research showed - those who don't read barely have an advantage over those who can't!! That is a sobering reality. We must dig in and learn.
My story
I led for many years believing I had all the skill I needed to take us forward. I even bragged that I hadn’t read a book since high school – I managed to graduate college without reading any books at all – just love those Cliff notes and study aids. But we stalled and I was frustrated and then one day I looked in the mirror and realized that the problem was me. I had gone about as far as I could take us and realized it was time to wake up and become a leader. So I began reading and getting involved with peers and attending seminars and just learning all I could. I was the cap. Too often that is how small business goes. The owner just doesn’t make the needed investment in self and team to keep growing the business. Don’t make that mistake. You truly can’t lead your company past your own ability. Leadership matters – become a continual learner and take your company to new heights.
Wednesday, November 24, 2010
Faith in the Workplace - A Guest Post
At Networking Results, faith is as integral a part of the company as IT itself.
By Steve Moreau
If your faith is genuine, and it helps guide your professional and personal decisions, how could you not introduce faith into this thing that consumes so much of our lives? Our entire management team is Christian and we make no apology for it. We believe that we have been entrusted with a company that provides the support for many employee families, customers, partners, and vendors, so it should be run in a way that will maximize success.
Success is more than the bottom line, although that’s how we measure our success. But we also measure success based on the lives of our employees—both personal and professional. On the professional side, we want to provide opportunities for training and the ability to be in a position where they can shine, which manifests itself in job satisfaction. This is how we live out our faith in what we do.
But we realize that there is more to a person than just his or her professional self, and from my experience, most everyone has some sort of spiritual belief, and we are not ashamed to have created an atmosphere in which it is safe to talk about it. When we bring in food, we take time and say a prayer before we eat, for example, and employees feel comfortable asking if we would remember them or someone they know in our prayers. In those instances we don’t then gather everyone and say a prayer, although there have been a few times in management meetings when we get word that someone has been in an accident, and we will immediately take some time and pray for a safe recovery.
To us that’s extending our human compassion. We are working with individuals and in relationships, and in the end, even though we are a technology company, we’re more of a relationship company.
We have no formal process, and we are not in people’s faces about spirituality. Our actions and the way we live our lives scream a whole lot louder than anything we could say. For us, faithfulness comes from living out what we believe and allowing other people to exercise their faith as well, without any pressure to do anything they are not comfortable with.
There has not been a case when we have felt a need to restrain anyone in the company from talking about faith. What I do try to encourage, as I mentioned, is rather than just talking about it, let’s live it. Our actions will show what we believe. But if you are living it, you might as well have the option of talking about it as well, so we certainly don’t want to discourage that.
Still, we are a regular bunch of people who have lots of good times together. But there are guiding principles we follow, and those tend to align with traditional Judeo-Christian precepts of integrity, justice, fairness, and stewardship, by which we mean looking out for what has been entrusted to us.
Even from the owner’s standpoint, is this his business? Well, it is as far as ownership is concerned, but it has also been entrusted to him. There is a purpose in everything, and at this point in time, God has entrusted us with the employees in the company and our customers and partners, and we have to make sure we’re doing the right thing by all of them. We have to be accountable and compassionate. These are all straight out of the Bible.
There is such a big concern with trying to be politically correct in this world that we lose some of the compassion of trying to be a good person. If I really believed what was in the Bible and yet was not able to offer compassion to others, then I would be pretty shallow. This has been a tough economy, with lots of people out of work, and our faith helps us deal with it. Our belief is that God knows much better than any of us and he’s going to see us through it.
People find themselves in some difficult circumstances, with some very difficult challenges. Life is messy, but there is hope out there; there is hope that this isn’t all there is.
Thanks to Steve Moreau for sharing this post. It really defines NetRes and many other companies in the small business field. Problem is, too many don't have the backbone to let their faith show. We hide things and want to "fit in" rather than be the light we are called to be. Kudo's to Jeff, Steve and their team in Texas for all they are doing to be salt and light!
By Steve Moreau
If your faith is genuine, and it helps guide your professional and personal decisions, how could you not introduce faith into this thing that consumes so much of our lives? Our entire management team is Christian and we make no apology for it. We believe that we have been entrusted with a company that provides the support for many employee families, customers, partners, and vendors, so it should be run in a way that will maximize success.
Success is more than the bottom line, although that’s how we measure our success. But we also measure success based on the lives of our employees—both personal and professional. On the professional side, we want to provide opportunities for training and the ability to be in a position where they can shine, which manifests itself in job satisfaction. This is how we live out our faith in what we do.
But we realize that there is more to a person than just his or her professional self, and from my experience, most everyone has some sort of spiritual belief, and we are not ashamed to have created an atmosphere in which it is safe to talk about it. When we bring in food, we take time and say a prayer before we eat, for example, and employees feel comfortable asking if we would remember them or someone they know in our prayers. In those instances we don’t then gather everyone and say a prayer, although there have been a few times in management meetings when we get word that someone has been in an accident, and we will immediately take some time and pray for a safe recovery.
To us that’s extending our human compassion. We are working with individuals and in relationships, and in the end, even though we are a technology company, we’re more of a relationship company.
We have no formal process, and we are not in people’s faces about spirituality. Our actions and the way we live our lives scream a whole lot louder than anything we could say. For us, faithfulness comes from living out what we believe and allowing other people to exercise their faith as well, without any pressure to do anything they are not comfortable with.
There has not been a case when we have felt a need to restrain anyone in the company from talking about faith. What I do try to encourage, as I mentioned, is rather than just talking about it, let’s live it. Our actions will show what we believe. But if you are living it, you might as well have the option of talking about it as well, so we certainly don’t want to discourage that.
Still, we are a regular bunch of people who have lots of good times together. But there are guiding principles we follow, and those tend to align with traditional Judeo-Christian precepts of integrity, justice, fairness, and stewardship, by which we mean looking out for what has been entrusted to us.
Even from the owner’s standpoint, is this his business? Well, it is as far as ownership is concerned, but it has also been entrusted to him. There is a purpose in everything, and at this point in time, God has entrusted us with the employees in the company and our customers and partners, and we have to make sure we’re doing the right thing by all of them. We have to be accountable and compassionate. These are all straight out of the Bible.
There is such a big concern with trying to be politically correct in this world that we lose some of the compassion of trying to be a good person. If I really believed what was in the Bible and yet was not able to offer compassion to others, then I would be pretty shallow. This has been a tough economy, with lots of people out of work, and our faith helps us deal with it. Our belief is that God knows much better than any of us and he’s going to see us through it.
People find themselves in some difficult circumstances, with some very difficult challenges. Life is messy, but there is hope out there; there is hope that this isn’t all there is.
Thanks to Steve Moreau for sharing this post. It really defines NetRes and many other companies in the small business field. Problem is, too many don't have the backbone to let their faith show. We hide things and want to "fit in" rather than be the light we are called to be. Kudo's to Jeff, Steve and their team in Texas for all they are doing to be salt and light!
Friday, November 19, 2010
Planning Matters
This is the second blog post regarding the 10 Things I Accidentally Learned on the Path to Growth and is a topic many of us as small business owners take for granted. After 25 years in this business, it has become more apparent than ever that planning is a key to success. Zig Ziglar says it this way: “Unless you have definite, precise, clearly set goals, you are not going to realize the maximum potential that lies within you”.
No Plan
I didn’t have a plan for many years. So my examples are more what not to do than what to do. I formed SCCI (now HTS) as a hobby back in 1985. It was just going to be a small sideline business to allow me to help a few folks with their computers.
Why don't we do it?
So why is it that most small businesses don’t plan? Here is a list of some of the common excuses I hear from folks. There really are no good reasons, but we convince ourselves these things:
No Plan
I didn’t have a plan for many years. So my examples are more what not to do than what to do. I formed SCCI (now HTS) as a hobby back in 1985. It was just going to be a small sideline business to allow me to help a few folks with their computers.
- Today it is 7 locations across 5 states with 80+ employees that will do over 16M in revenue. It is a hobby that is way out of control.
- Our headquarters office in Harlan has had 5 additions since we began in 1985. So today we have 12,000 square feet attached to the side of our home on the farm in rural Iowa. Not exactly the best plan knowing what I know today.
- HTG was started back in 2000 as a small peer group for four Iowa companies. Today it has become an international group with 240 plus member companies from four countries around the world. Certainly was not what my original expectations were.
Do as I say, not as I did
I could list a few dozen or hundred more examples of how things have happened that were not planned. The ones above are all positive results - maybe not everything they could have been – but not a list of all of my failed planning which doesn't always turn out that way. A failure to plan has cost hundreds of thousands of dollars and caused a lot of pain and chaos. I admit it and can show you the battle scars from eBay sales of obsolete inventory because of no plan in how to control ordering, to business units that were totally unprofitable because they never had a business plan at all, to wasting hours and days of my life because it just happened to me without me taking control of my time with a plan. If you don’t plan, you will struggle to have success. It was back in the late 90’s when things began to unravel for us that I finally figured this out. During the last 10 years or more that planning has been part of our process, our growth and success has been completely different and positive. Planning does matter and it will for you too.
Four Plans
I think there are at least 4 areas you need to plan at a minimum:
- Company business plan – tells you where your company is going
- Leadership plan – tells you how you will lead your company to achieve their plan
- Life plan – tells you how you will balance life and work and achieve the things you say are most important to you
- Legacy plan – tells others what to do in the event your company or you are not able to continue status quo
I have written previously about each of these and you can follow the links to get more details.
Here is the way we see it in HTG - four plans - one we focus on each quarter - which provides a solid way to make sure we are getting things done.
Why don't we do it?
So why is it that most small businesses don’t plan? Here is a list of some of the common excuses I hear from folks. There really are no good reasons, but we convince ourselves these things:
- Planning is hard work and takes time
- Planning never ends
- Planning requires communication
- Planning requires introspection
- Planning requires follow-up and measurement
- Planning requires us to be honest with ourselves
- Planning is bigger than me, myself and I
Hand in hand
Planning goes hand in hand with strategy. You need strategy to give you the “why” to what you are going to work on. But planning takes strategy and tells us the “how, when, what, where, and who” to achieve that strategy. It is important that we take time to plan. It is critical for us to truly grow our company and move toward success. Time to stop making excuses and step up to lead. That means you take time to involve your team, stakeholders and anyone else that should be included – and you just get it done. If you don’t have a plan, you are planning to fail. Don’t let that happen. Get down to business, take the time, invest the energy, and put plans down on paper. It will make a huge difference in your outcome!
Sunday, November 14, 2010
Strategy Matters
This is the first blog post regarding the 10 Things I Accidentally Learned on the Path to Growth and is a topic many of us as small business owners take for granted. After 25 years in this business, it has become more apparent than ever that strategy truly does matter. It isn't how things typically start. Certainly not in my case.
Many of us began our businesses because we were good at what we did and decided we could make a business from it. We are typically good technically or as sales people and begin to hire a person or two to help us serve more folks. In my case, I started the technology business as a hobby because I really enjoyed computers. 1985 was the start and there was not grand plan, no long range strategy, just myself and my bride (who wasn't all that sure of the idea) that started to sell and service Apply computers.
It was just me for the first five years and then I hired my first employee - which changes everything. No longer can I just do whatever whenever and be able to expect others to read my mind. That is how I tended to run things for quite some time. But osmosis doesn't really work, and people can't read my mind, so it was time to begin making some changes.
Over the years I have had to change how I lead. And one of the major adjustments has been to define and let people know about strategy. That requires thinking about things far beyond the normal day to day tactical operations which is where most small business owners are most comfortable. After all, we can fix most anything and sell what we need to without a strategy can't we? That is true for a while, but soon you hit a ceiling and one major reason is that others are not sure what the plan is or how to really help the company grow.
We have to identify that "house on the hill" or "BHAG" as it is oftened called if we want others on our team to be able to help join us in taking the company there. They can't just figure it out as we often think they should. It needs to be defined and written and shared. It must be measured and updated and adjusted. It is hard work but vital to keep the company growing.
What it really means is that we must begin to think like a CEO. There are bad connotations to that role today, but it isn't the role that is an issue, but the people who fill that seat. For many small businesses - no one is sitting in that chair and no strategy happens. CEO thinking is strategic. It is forward looking and future facing. It is very different from how most of us are wired today. But it is critical. Here is a table showing some of the areas I believe we need to consider and the differences in the role of CEO think vs President or GM think.
We don't default to thinking like a CEO as the entrepreneur that founded the company. That is somewhat foreign territory for us. But if we want to take our company to the next level, we have to learn to think differently. We must begin to think strategically. That transformation does not happen overnight. It takes time and effort and a desire to learn. But it can happen, and when it does, your company will be poised to go to the next level.
Many of us lie about whether we truly have a business when the reality is we really just have a job. The way to transistion from a job that makes us......
CEO thinking is not easy - but it is essential. HTG is committed to helping our members get there. We hold our CEO Forum twice a year to help focus owners on transitioning from the day to day to strategy. That is the leap we must make.
Many of us began our businesses because we were good at what we did and decided we could make a business from it. We are typically good technically or as sales people and begin to hire a person or two to help us serve more folks. In my case, I started the technology business as a hobby because I really enjoyed computers. 1985 was the start and there was not grand plan, no long range strategy, just myself and my bride (who wasn't all that sure of the idea) that started to sell and service Apply computers.
It was just me for the first five years and then I hired my first employee - which changes everything. No longer can I just do whatever whenever and be able to expect others to read my mind. That is how I tended to run things for quite some time. But osmosis doesn't really work, and people can't read my mind, so it was time to begin making some changes.
Over the years I have had to change how I lead. And one of the major adjustments has been to define and let people know about strategy. That requires thinking about things far beyond the normal day to day tactical operations which is where most small business owners are most comfortable. After all, we can fix most anything and sell what we need to without a strategy can't we? That is true for a while, but soon you hit a ceiling and one major reason is that others are not sure what the plan is or how to really help the company grow.
We have to identify that "house on the hill" or "BHAG" as it is oftened called if we want others on our team to be able to help join us in taking the company there. They can't just figure it out as we often think they should. It needs to be defined and written and shared. It must be measured and updated and adjusted. It is hard work but vital to keep the company growing.
What it really means is that we must begin to think like a CEO. There are bad connotations to that role today, but it isn't the role that is an issue, but the people who fill that seat. For many small businesses - no one is sitting in that chair and no strategy happens. CEO thinking is strategic. It is forward looking and future facing. It is very different from how most of us are wired today. But it is critical. Here is a table showing some of the areas I believe we need to consider and the differences in the role of CEO think vs President or GM think.
We don't default to thinking like a CEO as the entrepreneur that founded the company. That is somewhat foreign territory for us. But if we want to take our company to the next level, we have to learn to think differently. We must begin to think strategically. That transformation does not happen overnight. It takes time and effort and a desire to learn. But it can happen, and when it does, your company will be poised to go to the next level.
Many of us lie about whether we truly have a business when the reality is we really just have a job. The way to transistion from a job that makes us......
- wear too many hats
- work too many hours
- handle too many things
- makes us a slave
CEO thinking is not easy - but it is essential. HTG is committed to helping our members get there. We hold our CEO Forum twice a year to help focus owners on transitioning from the day to day to strategy. That is the leap we must make.
Thursday, November 11, 2010
10 Things I Accidentally Learned
This past week I was in Orlando and shared at the IT Nation event hosted by ConnectWise. The topic was “10 Things I Accidentally Learned Along the Path to Growth”. Since I am one of the older folks in the industry, experience is on my side, and there have been some fairly painful learning experiences over the past 25 years. Ten of them stood out as significant – so that is what I shared. I will be writing in much more detail about these on this blog over the next few weeks – but here is the list and highlights for now:
1. Strategy Matters – we have to understand the "why" so we can set our sights on where we are going and know the outcome we pursue.
2. Planning is Key – we need to plan in at least 4 key areas – business, leadership, life and legacy – and the more we plan the luckier we get!
3. Leadership is Required – we have to grow as leaders both in our company and for our clients. We can’t lead people where we have never been.
4. Cash is King – our ability to grow and continue to lead in this industry can happen only when we have managed our cash well.
5. Growth is Hard Work – many think growth just happens. It doesn't. It takes a lot of continual effort and always is harder, slower and longer than expected.
6. Sell is Not a Four Letter Word – Ok - actually it is, but for many years I missed the boat on this one. Nothing happens until someone sells something. We have to become a strong sales organization.
7. Vendors Are Not The Enemy – we must learn to leverage their resources to help drive our business.
8. Success Without Balance is Empty – if we lose track of what matters and do not balance work and life – the results really don’t matter. We must manage our time and focus.
9. Keep Your Eye on the Customer – our marching orders come directly from them, not the latest fad or trend, and we must listen closely and respond quickly.
10. It is All About Relationships – we are in the people business actually helping folks with adapting to change. Boil it all down to this – we are in the change management business.
So that is my list – I probably forgot a few important thoughts along the way. The response has been overwhelming from those who heard it. As I sat down to create this presentation, it occurred to me that there are no items on the list that deal with technology itself. In the last 25 years some rather major changes have occurred. There was no Internet when we started. Cell phones were 20 pounds and not reliable. A portable computer was a luggable that weighed 40 pounds and was the size of your entire desk. IP telephony hadn’t even been thought of. Very little of the technology that we deal with today was even a glimmer in someone’s eye back in 1985. But the reality is that technology without a person using it has little value. It is about people and how they apply what we sell. We are in the people business – we must never forget that – and technology is just a tool we have to serve them. Our success will be measured by how well we keep our eye on that ball. Let’s make sure people are in the center of everything we do!
1. Strategy Matters – we have to understand the "why" so we can set our sights on where we are going and know the outcome we pursue.
2. Planning is Key – we need to plan in at least 4 key areas – business, leadership, life and legacy – and the more we plan the luckier we get!
3. Leadership is Required – we have to grow as leaders both in our company and for our clients. We can’t lead people where we have never been.
4. Cash is King – our ability to grow and continue to lead in this industry can happen only when we have managed our cash well.
5. Growth is Hard Work – many think growth just happens. It doesn't. It takes a lot of continual effort and always is harder, slower and longer than expected.
6. Sell is Not a Four Letter Word – Ok - actually it is, but for many years I missed the boat on this one. Nothing happens until someone sells something. We have to become a strong sales organization.
7. Vendors Are Not The Enemy – we must learn to leverage their resources to help drive our business.
8. Success Without Balance is Empty – if we lose track of what matters and do not balance work and life – the results really don’t matter. We must manage our time and focus.
9. Keep Your Eye on the Customer – our marching orders come directly from them, not the latest fad or trend, and we must listen closely and respond quickly.
10. It is All About Relationships – we are in the people business actually helping folks with adapting to change. Boil it all down to this – we are in the change management business.
So that is my list – I probably forgot a few important thoughts along the way. The response has been overwhelming from those who heard it. As I sat down to create this presentation, it occurred to me that there are no items on the list that deal with technology itself. In the last 25 years some rather major changes have occurred. There was no Internet when we started. Cell phones were 20 pounds and not reliable. A portable computer was a luggable that weighed 40 pounds and was the size of your entire desk. IP telephony hadn’t even been thought of. Very little of the technology that we deal with today was even a glimmer in someone’s eye back in 1985. But the reality is that technology without a person using it has little value. It is about people and how they apply what we sell. We are in the people business – we must never forget that – and technology is just a tool we have to serve them. Our success will be measured by how well we keep our eye on that ball. Let’s make sure people are in the center of everything we do!
Saturday, October 23, 2010
Are You Ready For The Big Shows?
This was originally written and published on the ConnectWise IT Nation blog. A special thanks to Christy Sacco for helping pull these tips together.
Here it comes. The biggest week in event action for 2010. The HTG Q4 meetings ahead of the ConnectWise Partner Summit. It doesn’t get any more action packed and important than this week. So the question is – are you ready? Not for some football – but to get the most value out of a very long, tiring, expensive and draining week. We all spend far too much time and money on events not to prepare properly. But more often than not, that is how many folks come to an event – totally unprepared to maximize the value they will receive. Most of the value from industry events comes from the preparation that happens ahead of time. If you just show up (and don’t get me wrong – that is step one), you will miss much of what could be in store for you. You have to be intentional to maximize your time and investment.
So where does one start to prepare? First you take care of the necessary travel, lodging and registration tasks. Plane tickets booked – check. Hotel room reserved – check. Registration site completed – check. You would be amazed at how many forget these core tasks and show up without a place to stay or no registration completed. Seems pretty basic but never hurts to double check the dates and times and verify things one last time.
Once you are set to attend it is time to begin reaching out to see who else will be on hand. Some events have online tools to schedule meetings and such. For HTG – you pretty much know that everyone will be there so this is not as big a requirement. But if there are people you would like to connect with – send an email well before the event and begin to process of finding a time to meet. Schedules become very full at events like this – so the early bird often gets the appointment. I find this kind of one on one face to face meeting as the most valuable part of any event. That is where you get the straight scoop.
Here are some other areas to consider as you prepare to get the most from your time. Don’t wait until the last minute – start today!
• Pack plenty of business cards. Order new ones if yours have an error. (Plenty of places turn them around quickly.)
• Review the agenda prior to arrival and identify the best sessions to attend.
• Review the vendor sponsor list and make plans accordingly (set appointments with your current vendors and seek out new ones).
• Attend the vendor exhibit hall and seek out 3 new vendors to learn about.
• On that same note, be selective in which vendors you engage with socially. If you have no intentions of ever engaging with a vendor, don’t let them buy you drinks all night or take you out to a steak dinner.
• Set goals.
• Attend the social functions.
• Wear your company shirt. This is especially impactful if you have multiple people attending the event. It is important to market your company to vendors, speakers, industry media and others just as you would prospective end users.
• If you are part of a community – be sure to wear your group shirt on the day with other community members. (Friday is Orange Shirt Day for HTG!)
• Introduce yourself at meals.
• Ask questions in sessions.
• Stay for the whole event. Why would you spend money on airfare to cut out before the event is over?
• Let your office know you will be out of the office and mostly not accessible. You can’t do both well.
• Take advantage of opportunities to speak to the media or be on a panel.
• Take an interest in people as people. Ask open ended questions to get people talking about themselves. Think of 3 questions, in advance, that work for you to break the ice in any setting.
• Thank vendors, speakers, and the event hosts for making the event possible.
• Write things down. You won’t remember them if you don’t.
• Complete the post event survey. They really do value your feedback.
Be sure you come to the event with some specific goals in mind. If you can’t define why you are attending, it probably is a poor investment of time and money. Write those goals down, share them with your team at home and the people you will associate with at the event. And then focus and make sure you achieve them. Vision without execution is hallucination. Don’t just think about goals – execute! Examples may include meeting 5 new people, bringing back one new thing to implement or introducing 3 new people to each other.
Finally – the biggest mistake people make when attending an event is to go as a sponge. They soak up all kinds of information and never do anything with it post event. You need to write down things that matter. Preschedule a meeting with your team at home to review what you learned. Write an event attendance report that highlights the people you met, the companies you need to follow up with, the tasks that need to be accomplished and anything else that needs to be done. It has to be done to have any value. So many dollars are spent on events these days with so little impact because attendees never go back home and share or execute one thing. It really begins with one thing – identify the most important and go knock that one down first. Then move to the next one. But do something. Otherwise just stay home!
Here it comes. The biggest week in event action for 2010. The HTG Q4 meetings ahead of the ConnectWise Partner Summit. It doesn’t get any more action packed and important than this week. So the question is – are you ready? Not for some football – but to get the most value out of a very long, tiring, expensive and draining week. We all spend far too much time and money on events not to prepare properly. But more often than not, that is how many folks come to an event – totally unprepared to maximize the value they will receive. Most of the value from industry events comes from the preparation that happens ahead of time. If you just show up (and don’t get me wrong – that is step one), you will miss much of what could be in store for you. You have to be intentional to maximize your time and investment.
So where does one start to prepare? First you take care of the necessary travel, lodging and registration tasks. Plane tickets booked – check. Hotel room reserved – check. Registration site completed – check. You would be amazed at how many forget these core tasks and show up without a place to stay or no registration completed. Seems pretty basic but never hurts to double check the dates and times and verify things one last time.
Once you are set to attend it is time to begin reaching out to see who else will be on hand. Some events have online tools to schedule meetings and such. For HTG – you pretty much know that everyone will be there so this is not as big a requirement. But if there are people you would like to connect with – send an email well before the event and begin to process of finding a time to meet. Schedules become very full at events like this – so the early bird often gets the appointment. I find this kind of one on one face to face meeting as the most valuable part of any event. That is where you get the straight scoop.
Here are some other areas to consider as you prepare to get the most from your time. Don’t wait until the last minute – start today!
• Pack plenty of business cards. Order new ones if yours have an error. (Plenty of places turn them around quickly.)
• Review the agenda prior to arrival and identify the best sessions to attend.
• Review the vendor sponsor list and make plans accordingly (set appointments with your current vendors and seek out new ones).
• Attend the vendor exhibit hall and seek out 3 new vendors to learn about.
• On that same note, be selective in which vendors you engage with socially. If you have no intentions of ever engaging with a vendor, don’t let them buy you drinks all night or take you out to a steak dinner.
• Set goals.
• Attend the social functions.
• Wear your company shirt. This is especially impactful if you have multiple people attending the event. It is important to market your company to vendors, speakers, industry media and others just as you would prospective end users.
• If you are part of a community – be sure to wear your group shirt on the day with other community members. (Friday is Orange Shirt Day for HTG!)
• Introduce yourself at meals.
• Ask questions in sessions.
• Stay for the whole event. Why would you spend money on airfare to cut out before the event is over?
• Let your office know you will be out of the office and mostly not accessible. You can’t do both well.
• Take advantage of opportunities to speak to the media or be on a panel.
• Take an interest in people as people. Ask open ended questions to get people talking about themselves. Think of 3 questions, in advance, that work for you to break the ice in any setting.
• Thank vendors, speakers, and the event hosts for making the event possible.
• Write things down. You won’t remember them if you don’t.
• Complete the post event survey. They really do value your feedback.
Be sure you come to the event with some specific goals in mind. If you can’t define why you are attending, it probably is a poor investment of time and money. Write those goals down, share them with your team at home and the people you will associate with at the event. And then focus and make sure you achieve them. Vision without execution is hallucination. Don’t just think about goals – execute! Examples may include meeting 5 new people, bringing back one new thing to implement or introducing 3 new people to each other.
Finally – the biggest mistake people make when attending an event is to go as a sponge. They soak up all kinds of information and never do anything with it post event. You need to write down things that matter. Preschedule a meeting with your team at home to review what you learned. Write an event attendance report that highlights the people you met, the companies you need to follow up with, the tasks that need to be accomplished and anything else that needs to be done. It has to be done to have any value. So many dollars are spent on events these days with so little impact because attendees never go back home and share or execute one thing. It really begins with one thing – identify the most important and go knock that one down first. Then move to the next one. But do something. Otherwise just stay home!
Sunday, October 3, 2010
6 Myths of Growing a Business
Verne Harnish of Gazelles included this list in his last email newsletter. If you don’t receive it, I highly recommend you get signed up. It is free and full of great content. I want to add my perspective to his observations. This is a great list for all of us to consider and think about. CEO type thinking – not what most of us typically do – but the kind of thinking we all need to do. We need to step back, get out of the day to day, and spend some think time on growth. It doesn’t happen accidentally. It happens when there is a plan, execution and discipline. So the listed items are Verne’s (in orange) – the running commentary is from me.
1. My margins will improve as my company gets bigger (normally the opposite happens).
There is a false perception that success comes with growth. That is not necessarily the case. In almost every merger or acquisition we have done, 1+1 does not equal 2, at least not right away. It takes time for economies of scale to kick in, for reduced overhead to cut costs, for improved efficiencies to drive more for less, and for cross selling new products and services to new clients to drive revenue growth. It is far from automatic. It is a lot of hard work and persistence. In my experience it is a 12-18 month transition if all goes well. That means you are able to overcome the biggest hurdle – culture conflict. Not all the new team will be instantly on board. Some never will be. Growth is good but don’t expect margins to jump just because you grow.
2. The folks running the big companies are smarter than us (truth, they are not -- your firms can easily beat the big guys)
Big companies are not smarter but they usually do have more resources. So the reality is that while they are typically slower and less nimble, they often do have much deeper pockets and more cash available which makes their ability to sustain difficult times or transitions better. We often struggle against big companies because they can outlast us – even doing the wrong things or a poor job – because they have mass. If managed properly they have a war chest of assets and cash that can help them weather storms that sink much smaller ships. So the key for us little guys is to be quick and nimble and beat them to the punch. That means we must be disciplined again to have someone doing CEO think – looking outside the day to day box to find the next opportunity – and then directing the ship to sail there ahead of the big guys. It doesn’t just happen by reading a trade rag or going to a conference. Someone has to think about it.
3. The company founder has got to go sooner or later, because the company is going to outgrow them.
Leaders don’t have to be replaced because a company outgrows them – at least if they are willing to grow at least as fast as the company. The problem many founders have is that they want to do the same things they did when they started. Keep their fingers in all aspects of the business, micro manage their people, make all the decisions, and control all the processes. That does not scale and does mean a collision will occur. But if the founder is willing to grow – to put on a new hat as the CEO and think differently – there is no reason he has to be replaced. That requires getting some training and coaching like he requires of all the rest of the staff. It requires setting goals and being accountable. It means doing things differently, but it can be done. It all comes down to a willingness and determination to continue to lead. A leader that does not learn will not continue to lead.
4. As CEO, you know what's going on in your business better than anyone else (you're really the last to know what's going on).
The CEO should NOT KNOW everything that is going on in the business. That is not his job. The CEO should think of most things happening in the business, provide support for the management team to execute those thoughts, and be the outside influence to keep the company moving forward. But a CEO that knows the business better than his team is not really acting like a CEO at all. This is a difficult transition for most of us to make. We have to move from being the center of the business to the center of the thinking. We have to move to being the center of the connection to the outside where new ideas and opportunities will come from. But we cannot hold on to the internal knowledge – that has to be passed to the management team.
5. Grow or die. (sometimes it's better not to grow -- remaining a "small giant")
This is an area that Verne and I may disagree on – although it is probably more semantics than anything. I find it impossible for a company to sit still. You are either progressing and moving forward or fall back. You can’t stay stagnant for long. I do agree that being a big fish in a small pond is a very viable option. We have tried to follow that strategy at HTS. Rather than grow into large markets, we have chosen to dominate smaller tertiary markets and drive our growth there. So growth can take many forms – you don’t have to add staff or locations or products or services to grow – you can just add more clients or go deeper with existing clients. There are many ways to grow. I do believe you need to be growing in some manner. It isn’t possible to stop time and just sit still.
6. Be a self-help junkie (actually, self-help is an oxymoron -- you can't help yourself -- the best business leaders have lots of advisors, consultants, coaches)
If you want to become a better leader for you company – you need help from others. Books are a great resource to learn new ideas but it is the discussion and sharing with others that brings those to life. There are many ways to do it – I personally believe a peer group like HTG is one of the best ways – but choose your approach and invest in some form of outside input. Actually combining several seems the most valuable to me. I like some group of community involvement like HTG mixed with some one on one consulting or coaching to get down to the real nitty gritty. In every case – the companies that are really knocking it out of the park are not living in a vacuum – they have continual input from others helping them learn to grow and lead.
Are you really growing your company? Or just fooling yourself? How about your life? Many of these same principles apply to life and legacy too. We have to really work at growth if we want to make it happen. The days of growth just happening because we open our doors each day are long gone. It is a very hard task to show continual year over year growth in any area. But bottom line is that it is a decision. You have to work hard to make it happen. You have to plan to be successful. It is a CHOICE plain and simple. It won’t happen accidentally – at least not for very long. I hope you will choose to work hard, plan and make it happen! HTG is there to help make that a reality in your life and company!
1. My margins will improve as my company gets bigger (normally the opposite happens).
There is a false perception that success comes with growth. That is not necessarily the case. In almost every merger or acquisition we have done, 1+1 does not equal 2, at least not right away. It takes time for economies of scale to kick in, for reduced overhead to cut costs, for improved efficiencies to drive more for less, and for cross selling new products and services to new clients to drive revenue growth. It is far from automatic. It is a lot of hard work and persistence. In my experience it is a 12-18 month transition if all goes well. That means you are able to overcome the biggest hurdle – culture conflict. Not all the new team will be instantly on board. Some never will be. Growth is good but don’t expect margins to jump just because you grow.
2. The folks running the big companies are smarter than us (truth, they are not -- your firms can easily beat the big guys)
Big companies are not smarter but they usually do have more resources. So the reality is that while they are typically slower and less nimble, they often do have much deeper pockets and more cash available which makes their ability to sustain difficult times or transitions better. We often struggle against big companies because they can outlast us – even doing the wrong things or a poor job – because they have mass. If managed properly they have a war chest of assets and cash that can help them weather storms that sink much smaller ships. So the key for us little guys is to be quick and nimble and beat them to the punch. That means we must be disciplined again to have someone doing CEO think – looking outside the day to day box to find the next opportunity – and then directing the ship to sail there ahead of the big guys. It doesn’t just happen by reading a trade rag or going to a conference. Someone has to think about it.
3. The company founder has got to go sooner or later, because the company is going to outgrow them.
Leaders don’t have to be replaced because a company outgrows them – at least if they are willing to grow at least as fast as the company. The problem many founders have is that they want to do the same things they did when they started. Keep their fingers in all aspects of the business, micro manage their people, make all the decisions, and control all the processes. That does not scale and does mean a collision will occur. But if the founder is willing to grow – to put on a new hat as the CEO and think differently – there is no reason he has to be replaced. That requires getting some training and coaching like he requires of all the rest of the staff. It requires setting goals and being accountable. It means doing things differently, but it can be done. It all comes down to a willingness and determination to continue to lead. A leader that does not learn will not continue to lead.
4. As CEO, you know what's going on in your business better than anyone else (you're really the last to know what's going on).
The CEO should NOT KNOW everything that is going on in the business. That is not his job. The CEO should think of most things happening in the business, provide support for the management team to execute those thoughts, and be the outside influence to keep the company moving forward. But a CEO that knows the business better than his team is not really acting like a CEO at all. This is a difficult transition for most of us to make. We have to move from being the center of the business to the center of the thinking. We have to move to being the center of the connection to the outside where new ideas and opportunities will come from. But we cannot hold on to the internal knowledge – that has to be passed to the management team.
5. Grow or die. (sometimes it's better not to grow -- remaining a "small giant")
This is an area that Verne and I may disagree on – although it is probably more semantics than anything. I find it impossible for a company to sit still. You are either progressing and moving forward or fall back. You can’t stay stagnant for long. I do agree that being a big fish in a small pond is a very viable option. We have tried to follow that strategy at HTS. Rather than grow into large markets, we have chosen to dominate smaller tertiary markets and drive our growth there. So growth can take many forms – you don’t have to add staff or locations or products or services to grow – you can just add more clients or go deeper with existing clients. There are many ways to grow. I do believe you need to be growing in some manner. It isn’t possible to stop time and just sit still.
6. Be a self-help junkie (actually, self-help is an oxymoron -- you can't help yourself -- the best business leaders have lots of advisors, consultants, coaches)
If you want to become a better leader for you company – you need help from others. Books are a great resource to learn new ideas but it is the discussion and sharing with others that brings those to life. There are many ways to do it – I personally believe a peer group like HTG is one of the best ways – but choose your approach and invest in some form of outside input. Actually combining several seems the most valuable to me. I like some group of community involvement like HTG mixed with some one on one consulting or coaching to get down to the real nitty gritty. In every case – the companies that are really knocking it out of the park are not living in a vacuum – they have continual input from others helping them learn to grow and lead.
Are you really growing your company? Or just fooling yourself? How about your life? Many of these same principles apply to life and legacy too. We have to really work at growth if we want to make it happen. The days of growth just happening because we open our doors each day are long gone. It is a very hard task to show continual year over year growth in any area. But bottom line is that it is a decision. You have to work hard to make it happen. You have to plan to be successful. It is a CHOICE plain and simple. It won’t happen accidentally – at least not for very long. I hope you will choose to work hard, plan and make it happen! HTG is there to help make that a reality in your life and company!
Thursday, September 23, 2010
Who’s on Your Management Team?
Good friend David Russell of ManagetoWin wrote some great content in his weekly newsletter this week. The focus is on the often neglected power of involving your spouse in the decision making process. He calls it “Spouse Advantage”. He gives examples of Jim Collins, Ray Johnston and Jim Burns and how they are connected with their wives when it comes to making decisions. This is a topic that needs some focus for many of us leading companies.
For many years I fell into the trap believing that I was the one who needed to make all the decisions. After all, I was the bread winner, out in the workplace, making things happen day after day. So not only did I fail to involve my bride in the process, I often didn’t even inform her of the things that were on the table under consideration. Bad decision on my part. That line of decision making works if you are a perfect thinker, strategic planner and have all the answers. None of those things describe me.
So I made some big mistakes along the way. More often than not, my bride knew it was bad news well before I did. Like it or not they often see more clearly than we do being in the middle of the forest. We miss the trees that fall on top of us some days until they have knocked us down. Been there?
When I consult with small business owners I often ask what their spouse thinks of the situation being addressed. Almost without fail, the answer is “deer in the headlights” or a quick “they aren’t part of the decision process”. Both are telling answers and likely are indicators of some of the problems being experienced.
Are you fully leveraging the strengths of your spouse? We involve our business partners when we consider decisions, but what about the most important partner in our earthly lives? David asks “ What is the impact of a good marriage on your career”? I’ll take it a bit further and ask more importantly, what is the cost of a failed marriage because you were too proud or stubborn to seek their counsel?
We celebrated our 33 year anniversary this past July just like David and his bride did. There are lots of days and decisions I wish I could do over. It doesn’t work that way unfortunately. Once a day is gone – we can’t go back and try again. We can only learn and move forward. For me, I learn a little slow sometimes. It wasn’t until about 10 years ago that I finally figured out the greatest asset God had blessed me with – in business and in life – my bride.
I always had the opinion that she would not understand and trying to teach her would just slow me down. That is a good thing – both to teach because we can’t do that if we don’t have things thought out and defined – and to slow down because many decisions get made incorrectly because the alternatives are never considered.
And the reality is that most business decisions are a lot more about people than they are business. Hiring, firing, partnerships and companies – all revolve around people. The products and services are seldom the issue – it always boils down to people and my bride can read them pretty well. That’s a God given gift I don’t expect to ever really have.
David nails the problem that most of us have when it comes to involving our spouse in the decision making process: “You have developed bad habits in how and when you communicate with your spouse about your work”. That is the issue many of us face. We have a lot of things that have sort of just happened in our marriage over time and become the status quo. One area that is very true is around the way we communicate and interact with our spouse. Habits are in place – changing them is hard work. But it can be very valuable and worth the effort.
David gives this guidance to help begin a transition to taking advantage of one of the best kept secrets of success – leveraging the wisdom of your spouse to help guide the ship. Here is his guidance: Consider thinking deeply about this subject this week. This is NOT a conversation to have with coworkers, but rather with people who personally mentor you and whom you respect. Here are some questions to consider:
1. Write down the five biggest mistakes you have made professionally during your career while you have been married.
2. How many of those mistakes could have been avoided if you had worked more closely with your spouse to evaluate the situation and your options prior to taking action?
3. What habit could you develop with your spouse to involve them more in your professional decisions? One option: A regular business meeting that covers both family and professional business. Just be realistic - it takes time to build this habit and you may have to be the driver to make certain in a positive, encouraging way that these meetings occur.
4. How are you going to respond the next time it feels like you have to make a quick decision? How can you build this delaying tactic - verbally and postponing action - into a habit?
5. Consider a commitment to demonstrate your love for your spouse by involving them in all of your important decisions. How will you hold yourself accountable? It will take time and be challenging to develop this habit, but can you afford to operate as a lone ranger?
I encourage you to spend some considering how you can improve the decision making and leadership process you currently use by involving your spouse. It has made all the difference for me. My bride travels with me almost all the time – not just to keep me company – but to keep me balanced and focused and to have input into the day to day activities that impact our lives and business. There is some sacrifice involved by both to truly partner together in this way – but my experience says it is one of the best decisions you can make. Don’t just depend on yourself – that is bound to lead you into the weeds if it hasn’t already!
If you aren’t on David’s mailing list – you just might want to get added. He puts out a weekly newsletter that is always full of great information and thought provoking questions to consider. You can reach him at david@managetowin.com.
For many years I fell into the trap believing that I was the one who needed to make all the decisions. After all, I was the bread winner, out in the workplace, making things happen day after day. So not only did I fail to involve my bride in the process, I often didn’t even inform her of the things that were on the table under consideration. Bad decision on my part. That line of decision making works if you are a perfect thinker, strategic planner and have all the answers. None of those things describe me.
So I made some big mistakes along the way. More often than not, my bride knew it was bad news well before I did. Like it or not they often see more clearly than we do being in the middle of the forest. We miss the trees that fall on top of us some days until they have knocked us down. Been there?
When I consult with small business owners I often ask what their spouse thinks of the situation being addressed. Almost without fail, the answer is “deer in the headlights” or a quick “they aren’t part of the decision process”. Both are telling answers and likely are indicators of some of the problems being experienced.
Are you fully leveraging the strengths of your spouse? We involve our business partners when we consider decisions, but what about the most important partner in our earthly lives? David asks “ What is the impact of a good marriage on your career”? I’ll take it a bit further and ask more importantly, what is the cost of a failed marriage because you were too proud or stubborn to seek their counsel?
We celebrated our 33 year anniversary this past July just like David and his bride did. There are lots of days and decisions I wish I could do over. It doesn’t work that way unfortunately. Once a day is gone – we can’t go back and try again. We can only learn and move forward. For me, I learn a little slow sometimes. It wasn’t until about 10 years ago that I finally figured out the greatest asset God had blessed me with – in business and in life – my bride.
I always had the opinion that she would not understand and trying to teach her would just slow me down. That is a good thing – both to teach because we can’t do that if we don’t have things thought out and defined – and to slow down because many decisions get made incorrectly because the alternatives are never considered.
And the reality is that most business decisions are a lot more about people than they are business. Hiring, firing, partnerships and companies – all revolve around people. The products and services are seldom the issue – it always boils down to people and my bride can read them pretty well. That’s a God given gift I don’t expect to ever really have.
David nails the problem that most of us have when it comes to involving our spouse in the decision making process: “You have developed bad habits in how and when you communicate with your spouse about your work”. That is the issue many of us face. We have a lot of things that have sort of just happened in our marriage over time and become the status quo. One area that is very true is around the way we communicate and interact with our spouse. Habits are in place – changing them is hard work. But it can be very valuable and worth the effort.
David gives this guidance to help begin a transition to taking advantage of one of the best kept secrets of success – leveraging the wisdom of your spouse to help guide the ship. Here is his guidance: Consider thinking deeply about this subject this week. This is NOT a conversation to have with coworkers, but rather with people who personally mentor you and whom you respect. Here are some questions to consider:
1. Write down the five biggest mistakes you have made professionally during your career while you have been married.
2. How many of those mistakes could have been avoided if you had worked more closely with your spouse to evaluate the situation and your options prior to taking action?
3. What habit could you develop with your spouse to involve them more in your professional decisions? One option: A regular business meeting that covers both family and professional business. Just be realistic - it takes time to build this habit and you may have to be the driver to make certain in a positive, encouraging way that these meetings occur.
4. How are you going to respond the next time it feels like you have to make a quick decision? How can you build this delaying tactic - verbally and postponing action - into a habit?
5. Consider a commitment to demonstrate your love for your spouse by involving them in all of your important decisions. How will you hold yourself accountable? It will take time and be challenging to develop this habit, but can you afford to operate as a lone ranger?
I encourage you to spend some considering how you can improve the decision making and leadership process you currently use by involving your spouse. It has made all the difference for me. My bride travels with me almost all the time – not just to keep me company – but to keep me balanced and focused and to have input into the day to day activities that impact our lives and business. There is some sacrifice involved by both to truly partner together in this way – but my experience says it is one of the best decisions you can make. Don’t just depend on yourself – that is bound to lead you into the weeds if it hasn’t already!
If you aren’t on David’s mailing list – you just might want to get added. He puts out a weekly newsletter that is always full of great information and thought provoking questions to consider. You can reach him at david@managetowin.com.
Saturday, September 18, 2010
Doing Customer Touch Right
This past week I was blessed with an invite to attend the Compudyne TechFest - a gathering of customers of HTG member Compudyne in Duluth up on the frozen tundra by Lake Superior. My role was to deliever the keynote address about what is coming in the technology arena in the coming years. It was a 9 hour ride north, but a beautiful day and my bride and I thoroughly enjoyed the trip.
We arrived in time for the vendor dinner the evening before the event. There were a half dozen vendors who were sponsors and key providers of technology for the solutions that Compudyne implements to their SMB customers in Minnesota, Wisconsin and Michigan. We gathered for dinner along with a dozen or so of the Compudyne team for a very nice Italian meal and lots of interaction. It set the tone for the following day - which was all about the importance of relationships. First thing done right - practice what you preach. Compudyne not only talks about the importance of vendor relationships - they live it and the event prior to the TechFest was a great way to reinforce that to their team and the vendors on hand to participate.
The event began at 7:45 AM for breakfast. I was a bit skeptical about how many folks would get up on a rather rainy and dreary morning to come to Clyde Iron Works recently restored into a nice event venue. Second thing done right - they worked within the community to help showcase a new business and expose the hundreds of attendees to some of the positive things happening in their community. The venue was really nice - a former Iron Works plant that has been completely remodeled for events and includes a bar, restaurant and other things.
We had arrived before 6:30 and the place was already busy with the entire Compudyne team putting finishing touches on the event. Another thing I wouldn't have believed if I hadn't seen it myself. Third thing done right - involve the team in the production of a customer facing event. From planning to detailed execution - everyone was there pitching in and taking orders from the few making decisions. There was no standing around and saying "this isn't in my job description" - everyone did what was needed to finish getting ready.
By 8 AM the place was buzzing with customers and I could hardly believe my eyes. This is almost an all day event and already folks were in the house ready for the day ahead. The vendor booths were busy and people were eating breakfast and engaging. Fourth thing done right - create an environment where the positive interaction between customers lights a fire in all who attend. It was a very interactive and alive place to be. I have been to plenty of events where people come, eat, take the trinkets and leave. Not at this event. No one left.
The event began at 8:30 and began with a vision casting session by Compudyne president Brad Schow. He talked about the importance of relationships - with customers, vendors, distribution, and staff - and how they go to market to serve the needs of all involved. He opened the komono on how they approach the SMB marketplace, and shared 5 things that they see as "game changers" in the coming years. It was a very engaging presentation and it ended with a live demo by one of the vendor sponsors - Quorum - around business continuity. Fifth thing done right - tell it like it is without all the marketing fluff and let customers see the insides of your company and heart. As the first part of the morning session came to a close - there was clear understanding of the Compudyne vision and mission and how they were engaging customers and vendors alike.
After the break, it was time for a short vendor presentation and then the keynote. My role was to follow up and build on the foundation that Brad had laid. It was pretty easy to do since our philosophy around relationships is identical in most ways. I shared some of my experience of 25 years in the industry, some crystal ball projections around the economy and business in general, and then my list of key industry changes that we will be working through the next few years. Feedback was good on the message I delivered, and no one through anything or walked out, so I believe it went well. Sixth thing done right - have alignment in the messaging and make sure it connects with the audience. One of the attendees is a power blogger from Duluth. You can see what he had to say about the keynote here. But in emails from attendees post event - the main comment I recieved was that it was genuine, simple and easy to understand. My delivery probably wouldn't play as well in Silicon Valley, but the folks here in the Midwest just want the story without all the marketing and that is what I deliver.
By now it was lunch time and no one has left 4 hours into the event. The reason - there was 30K+ of prizes sitting on the main stage behind the presenters to be given away over lunch. Hundreds of prizes from computers to monitors to printers to gift cards. It was a solid half hour of giving things away - one after another - just draw and deliver and move to the next winner. Seventh thing done right - don't cut corners on the drawings. There is no doubt that people were in their seats through lunch because they wanted to win something. But it kept people there and they heard the message that the Compudyne team wanted to deliver - so that is a very good motivation. So many events are filled with a few drawings of rather worthless stuff or one big item. Here the odds of winning were really high - not everyone won - but well over half the audience walked away with a gift that meant something.
I was sure that following lunch people would scatter. Wrong again. There were breakout sessions during the afternoon and people filed up to those areas and it was standing room only. After 5+ hours in the venue and still wanting information. Eighth thing done right - provide quality content around topics that are relevant and interesting to the crowd. The breakouts were not about products but solving pain points of their business customers. People will attend sessions that can help their business. Too often we put a vendor up front to sell some product and miss the opportunity to engage deeply with our customers around things that matter.
The event was finished around 3 PM and a good crowd was still on hand that had been their since before 8 that morning. Why? Because it was well done and targeted. It has a history of seven prior events hitting the mark. But the main reason - the ninth thing that was done right - was that it was all about relationships. People were personally invited. They were greeted and pampered and made to feel welcome. We are in the people business. The more we understand and execute at the relationship level - the better all aspects of our life will be. Are you focused on relationships?
Congrats to the Compudyne team for setting the bar high for the rest of the HTG member companies. We can all learn from this example and go deeper in every relationship we have!
We arrived in time for the vendor dinner the evening before the event. There were a half dozen vendors who were sponsors and key providers of technology for the solutions that Compudyne implements to their SMB customers in Minnesota, Wisconsin and Michigan. We gathered for dinner along with a dozen or so of the Compudyne team for a very nice Italian meal and lots of interaction. It set the tone for the following day - which was all about the importance of relationships. First thing done right - practice what you preach. Compudyne not only talks about the importance of vendor relationships - they live it and the event prior to the TechFest was a great way to reinforce that to their team and the vendors on hand to participate.
The event began at 7:45 AM for breakfast. I was a bit skeptical about how many folks would get up on a rather rainy and dreary morning to come to Clyde Iron Works recently restored into a nice event venue. Second thing done right - they worked within the community to help showcase a new business and expose the hundreds of attendees to some of the positive things happening in their community. The venue was really nice - a former Iron Works plant that has been completely remodeled for events and includes a bar, restaurant and other things.
We had arrived before 6:30 and the place was already busy with the entire Compudyne team putting finishing touches on the event. Another thing I wouldn't have believed if I hadn't seen it myself. Third thing done right - involve the team in the production of a customer facing event. From planning to detailed execution - everyone was there pitching in and taking orders from the few making decisions. There was no standing around and saying "this isn't in my job description" - everyone did what was needed to finish getting ready.
By 8 AM the place was buzzing with customers and I could hardly believe my eyes. This is almost an all day event and already folks were in the house ready for the day ahead. The vendor booths were busy and people were eating breakfast and engaging. Fourth thing done right - create an environment where the positive interaction between customers lights a fire in all who attend. It was a very interactive and alive place to be. I have been to plenty of events where people come, eat, take the trinkets and leave. Not at this event. No one left.
The event began at 8:30 and began with a vision casting session by Compudyne president Brad Schow. He talked about the importance of relationships - with customers, vendors, distribution, and staff - and how they go to market to serve the needs of all involved. He opened the komono on how they approach the SMB marketplace, and shared 5 things that they see as "game changers" in the coming years. It was a very engaging presentation and it ended with a live demo by one of the vendor sponsors - Quorum - around business continuity. Fifth thing done right - tell it like it is without all the marketing fluff and let customers see the insides of your company and heart. As the first part of the morning session came to a close - there was clear understanding of the Compudyne vision and mission and how they were engaging customers and vendors alike.
After the break, it was time for a short vendor presentation and then the keynote. My role was to follow up and build on the foundation that Brad had laid. It was pretty easy to do since our philosophy around relationships is identical in most ways. I shared some of my experience of 25 years in the industry, some crystal ball projections around the economy and business in general, and then my list of key industry changes that we will be working through the next few years. Feedback was good on the message I delivered, and no one through anything or walked out, so I believe it went well. Sixth thing done right - have alignment in the messaging and make sure it connects with the audience. One of the attendees is a power blogger from Duluth. You can see what he had to say about the keynote here. But in emails from attendees post event - the main comment I recieved was that it was genuine, simple and easy to understand. My delivery probably wouldn't play as well in Silicon Valley, but the folks here in the Midwest just want the story without all the marketing and that is what I deliver.
By now it was lunch time and no one has left 4 hours into the event. The reason - there was 30K+ of prizes sitting on the main stage behind the presenters to be given away over lunch. Hundreds of prizes from computers to monitors to printers to gift cards. It was a solid half hour of giving things away - one after another - just draw and deliver and move to the next winner. Seventh thing done right - don't cut corners on the drawings. There is no doubt that people were in their seats through lunch because they wanted to win something. But it kept people there and they heard the message that the Compudyne team wanted to deliver - so that is a very good motivation. So many events are filled with a few drawings of rather worthless stuff or one big item. Here the odds of winning were really high - not everyone won - but well over half the audience walked away with a gift that meant something.
I was sure that following lunch people would scatter. Wrong again. There were breakout sessions during the afternoon and people filed up to those areas and it was standing room only. After 5+ hours in the venue and still wanting information. Eighth thing done right - provide quality content around topics that are relevant and interesting to the crowd. The breakouts were not about products but solving pain points of their business customers. People will attend sessions that can help their business. Too often we put a vendor up front to sell some product and miss the opportunity to engage deeply with our customers around things that matter.
The event was finished around 3 PM and a good crowd was still on hand that had been their since before 8 that morning. Why? Because it was well done and targeted. It has a history of seven prior events hitting the mark. But the main reason - the ninth thing that was done right - was that it was all about relationships. People were personally invited. They were greeted and pampered and made to feel welcome. We are in the people business. The more we understand and execute at the relationship level - the better all aspects of our life will be. Are you focused on relationships?
Congrats to the Compudyne team for setting the bar high for the rest of the HTG member companies. We can all learn from this example and go deeper in every relationship we have!
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