10 Key Area's of Attention For Your Business

This week I was blessed to be in Charlotte on a SWOT team with Jonathan Warrey and Tom Polk. We came to town at the request of The Network Essentials team – led by Kyle Elworthy and Nathan Sanders. We discovered a number of the normal issues – communication, service delivery consistency, sales and sales management, employee benefits and on the list goes. Here are some ideas that have come out of the last few SWOT’s that may fit your situation. Thanks to the SWOT teams for their insight (and particularly Jonathan Warrey for putting some of this on paper). We didn’t see all these this week – but over the past months I certainly have (some by looking at my own company) and these seem to be key areas that need owner attention.

1. Consistent company communication from owners to employees about what the vision of the company is and how it is doing financially. Employees are too often in the dark and wondering about the future. You have to be open book enough to help them be comfortable with your direction and the sustainability of their job.

2. Set and communicate goals—set a realistic goal, make it public, measure results against it, and communicate it consistently. Too often employees are unsure what the targets are and how they are doing at achieving them. People want to know they are doing a good job – that can’t happen if they are unsure of the goal and the status.

3. Explain why growth is important—often employees don’t see the need for it. Growth matters because fixed costs keep rising and growth creates further opportunities for good people in your company. If they don’t have opportunities for growth, many good people leave. Are you creating a culture where people feel like they have a career, or just a job.

4. Define and lead culture. This is definitely more caught than taught. Each company has its own culture – but far too often it isn’t really planned – it is just allowed to happen and then the owners look back and wonder what happened. Accidental culture never turns out the way you desire.

5. Create clear roles and expectations and confirm results—from service performance and efficiency results, to sales performance in various categories, to customer satisfaction metrics—how are you doing. Do each of your people know where to go when they don’t have an answer? Clarity in job definition is critical for satisfied team members.

6. Make sure everyone understands the mission of the company as well as the vision and company values. There should be no question about where you are heading and how people are expected to act along the journey. These things give us the boundaries that we will operate within. Without a clear definition – people will wander aimlessly unsure how to act. Throw in your BHAG (big hairy audacious goal) as well – so they know you have a big picture around the future.

7. Create Raving Clients. Client satisfaction should be at 95% or higher so you can build referrals to grow your business and maintain a strong client set to continue to work with. Referrals are still an important way to grow our companies. Too often we don’t want to go the extra step to make our clients raving fans. We are content to be “good enough”. It is the little things that make the difference – and a sincere thank you goes a long way.

8. Deliver what you promise. If you say you are going to perform something (i.e. periodic business or account reviews, preventative maintenance checks, etc.) you better deliver on it. Too often you commit to monthly reports, quarterly visits, and annual planning meetings and delivered on about 10% of those commitments. You need to make sure that you are delivering on our commitments. You owe clients the value they are paying for. Period.

9. Remember that compensation modifies behavior, but not personalities. People work on things that maximize their compensation, but it won’t drive people to do things that requires a change in their personality. You spend hours working on compensation plans that target higher compensation for important company initiatives. You certainly don’t always get it right. It’s a reason compensation plans change every year with at least some tweaks. It’s because the market keeps shifting and so do costs to deliver your products and services. You need to spend time understanding personalities as well as managing behavior with compensation. It takes work to understand the different personalities and how they interact and are motivated. Getting those two right at the same time really makes things click!

10. Change is a constant. Some companies have cultivated a culture that is open to change – while some certainly have not. This week in Asheville I ran across these words:

• Life is change
• Growth is optional
• Choose wisely

What is your tolerance toward change? Change is led, not taught. It is not preached into existence – it is caught. Are you a change leader in your company?

So there you have it – ten areas that each of us need to take a look at and consider. If you are normal – five of these are direct hits – a couple more are too close for comfort – and the other three are in need of some work. Unless you are a very unusual small business – these are key areas that need your attention. The upcoming HTG Summit will address many of these areas. There also will be other business owners among the attendees who have these things nailed. You don’t have to go it alone. Get with others – listen and learn – and then get after making some changes. Vision without execution is only hallucination!

The Last Mile

There has been much discussion around the concept that as SMB IT consultants and VAR’s – we own the last mile to our customers in terms of the technology landscape. Arnie Bellini from ConnectWise has been championing that concept to the IT Nation for the past year or more. For the most part that is largely true. Today, the customer relationship with most small and medium businesses runs through a local VAR who provides the needed hardware, software and services to bring IT into their environment. But a little history lesson may be worth considering as it regards the last mile and the future. As the Bible teaches, we can learn much by remembering what has happened in the past and we have a very relavant teacher regarding this relationship.

Local telephone companies always felt they had the last mile. That was a literal thing for them – the last mile of copper wire that went from their local connection point to the homes and businesses on the end of their wire. It served them well for many years as there was no real option – if you wanted phone service – you paid the local telco to get it. Then came change – lots of change. There was the advent of cellular which allowed customers to use wireless technology to bypass the last mile. Then along came cable tv companies offering telephone service using their wire – so now there is competition from a second “last mile” cable from a nontraditional telephony source. Then comes the Internet which is able to provide VOIP telephony services. The Internet can be delivered in lots of ways – via cable, copper, wireless, cellular, satellite – there are many ways that the last mile for VOIP can enter a home or business. Today there is no control at all for the local telco. In fact, they are scrambling to try and remain relevant in many situations by trying to add services to compete in delivering Internet, cable TV, and other digital services across their once precious last mile advantage. In many cases, they no longer even have a presence with the customers they once owned. It has vanished right before their eyes.

So how does that apply to us in the IT business. We have the same potential problem coming our way. First we have the transition that is being driven by managed services. Today many of the services that we once delivered by dispatching engineers to a local site has moved to remote support. We no longer need to roll a truck and put a person on premise to service a majority of the problems that occur. That means service delivery can happen from anywhere at any time. Many of us have built that competency ourselves, but margins will continue to be squeezed. It will become a comodity of sorts. And more importantly, if the equipment no longer resides on premise but in the cloud, our services at the least must change, but may in fact be non essential at all.

The sale of hardware and software has been a staple for many of us for years. That will likely diminish in the near future. With the advent of HAAS (hardware as a service) which allows a customer to purchase hardware and software via a monthly subscription beginning to gain steam, we will see purchases from our own offerings slip away unless we find a way to deliver that service. We are already seeing this being delivered by the national wireless companies as you can get a netbook with a wireless subscription on a monthly contract. And new partners like CharTec are springing up to enable traditional VAR's to compete in the HAAS space without having to figure it all out ourselves. And the next step will be no on premise hardware at all in some accounts – where it resides in a data center and is utilized via the wire. We have to prepare to see the margins we have been accustomed to receiving from the sale of hardware and software begin to move away drastically or maybe completely in some cases.

Cloud computing is a major game changer. It has the potential to rob the margin from the sale of hardware, software, projects and break fix sources. It also could cause us to lose the managed service revenue stream that many have come to rely on unless we adapt our services to be cloud friendly. There will still be a need to manage things in the cloud, and to manage some sort of end user devices, but those will likely take a different shape and be a virtual desktop in nature. If we don’t have services that are designed to serve the cloud environment, we will likely become irrelevant to our customers and lose this revenue stream.

So the real question is “what does your P&L look like if you lose the margin you generate from hardware, software, projects, break fix and managed services today. For many partners – that is their revenue and the bottom line is very negative. In fact, the business is insolvent. There are no other relevant income streams that can come close to supporting most businesses today. So what should we do? Certainly sticking our head in the sand and ignoring the potential threat is not the correct response.

This is not a doom and gloom post – but rather one to drive you to consider the opportunities that will be available to the partners who figure this new world out. Cloud computing will not happen overnight. There are many opinions on the speed of adoption. From my perspective, I believe there are a couple drivers. One will be the speed at which the new workforce begins to take leadership of the IT management in the SMB. Younger people have never known anything different than the cloud. They have put their email, data, pictures and social interactions in the cloud their entire lives. So they will have no hesitation to make the transition if the change makes sense from a cost perspective. Secondly there will be significant pressure on the cost of cloud services as everyone races to get to the new frontier from a delivery perspective. There will be many competitors – both large and small – who will make a “land grab” and attempt to draw people to the new source of monthly recurring revenue. Those two factors will be significant drivers to the transition. My personal opinion is it will happen sooner than later and within 3-5 years we will see a very different landscape when we consider IT infrastructure in the SMB.

So what should we do if we currently serve the SMB space? I believe we need to immediately embrace this transition and learn how to deliver products and services through the cloud. It begins by implementing them internally and using them so we have an understanding of how they work. The magic and ongoing opportunity for most of us will be in consulting around how to select and integrate with and within the cloud. I believe many companies will have a hybrid cloud model for the near term meaning they will likely push some things off premise into the cloud and retain others – such as line of business and financial applications – in their offices and under their direct control. I don’t believe that will be the final result as people get comfortable with the technology and reliability, but for now, it will likely be a combination of thing locally and across the wire. Most are already comfortable having financial access across the wire as they access bank, 401K and other financial information that way currently. Security has become acceptable in the cloud as people do it daily already.

We have to learn to sell differently, and provide services differently as the landscape changes. We have to learn new skills in how to connect the dots in the cloud and to our local customer networks. There is a “new normal” coming, and if we don’t begin now to learn how it will work, and more importantly how we can remain relevant in that new world, we will quickly find ourselves not in control any longer. The last mile is moving and we have to get started now to ready ourselves for the change. One day soon we will wake up and wonder how it happened as we didn’t even notice the change. But we definitely will notice the effect of that change because the income we currently depend on to make payroll and pay our bills will have dried up and moved to a different mailbox. That will be a very sad day as it will be far too late to make the changes and catch up then. Now is the time to stop and take a look at what is coming. The train has left the station. The only question is whether you will accept that fact and get ready to board.

HTG Q2 in the Books

HTG Q2 2009 has come to an end. What a week we had in Dallas at the Omni. It was an amazing week in every way. The energy level was unbelievable. People were engaged and focused. It was like no other event I have had the privilege of being part of. And I heard that from dozens of vendors as they gave me feedback on their time with us last week. The group meetings were very strong from all reports. Some of you couldn’t get enough of each other starting early on Sunday or working late into the evenings. That is so good to see. When groups are committed to going above and beyond for one another, we are on a very good path. I know there were a number of company deep dives and mini SWOT interactions that will make a difference in the weeks ahead. Hopefully you remember when you get back into the routine and the chaos of the day that the key to making HTG work is to continually build relationships. This isn’t a week every quarter kind of deal. You need to reach out to your fellow group members weekly or even daily if that is what is needed. You are accountable to each other – not for the 48 hours you are in your peer groups – but 24/7/365. Accountability doesn’t turn off and on. It is always on. We need to stay very focused on that. Without accountability I know how you all are – you are just like me. You do what you want when you get around to it. Don’t try telling me any differently – it is the nature of an entrepreneur. So we need to keep the peer pressure on and continue to drive each other to execution. That is what Peer Power is all about.

Back on the farm we have been working hard to get HTG to the next level on the back end. Sue and Nancy have been entering all the information into Quickbooks Pro 2009 as we move off the HTS accounting platform and out onto our own as HTG. Some big changes as we spread our wings and leave the HTS nest. ConnectWise has given HTG three licenses to use in managing our membership and vendor relationships, so that is beginning to take shape as well. HP, SonicWALL and Microsoft have provided HTG hardware and the needed licensing to allow us to spin up the new SharePoint MOSS portal that we are all enjoying and will be the communication platform for our future. Vlad Mazek of OwnWebNow is hosting for us at his Dallas based data center. There has been a lot of activity as we have spun HTG off as a separate organization and are beginning to build a sustainable program for the future.

The advisory board of Dan Hay (finance), Brad Schow (membership), Stuart Crawford (press and media), Lyf Wildenberg (Communication and platform) and Scott Scrogin (Administration) have been doing a great job helping us through the transition. Ken Shetler (contractor managing vendors) along with myself, Nancy, Mary and Sue have been focused on driving revenue and putting a sustainable program in place so HTG will last into the future. There is much to celebrate and be excited about for the future.

But as with all things, change happens and sometimes people struggle to adapt. There have been some bumps in the road as we have moved toward our HTG 2.0 vision. A bit of execution was lacking on the staff side, and a bit of inflexibility on the part of some members has made the last few months challenging on some days. With over 270 companies involved now in both our programs, and at least that many ideas and personalities, I recognize that we cannot make every person happy all the time. Some are driven by money, some schedule, some personal wishes, some just want it their way. I wish we could meet each and every wish and expectation, but we cannot. So the thing I want to encourage you to remember is this: HTG is not about you. Those are some famous words that come from a bestselling book about a different topic, but they are related to our mission with HTG as well. HTG is about community and not any single member. It is about making an impact in each member’s business, leadership and life. That happens in different ways and at a different speed for each, but make no mistake about it, we are focused on driving change. We will be a disruptive change in your business and life. For some that is uncomfortable. To you I apologize in advance but want you to know the pursuit will continue. HTG will continue to grow and evolve, and our HTG 3.0 strategy will take us to another level once we get it completely defined. Just this week I read a manuscript for a new book coming out in May. It is a business parable and had some very wise ideas to share. Here are a few key nuggets:

1. Pursuing perfection requires that we be willing to be uncomfortable. If you are always striving to get better, then you are always growing. You have to embrace discomfort as part of your growth process.
2. Those who want to be average and good like to be comfortable. But you are either getting better or getting worse – there is no standing still.
3. 5% of our life is made up of performance, but 95% is spent preparing, practicing and waiting to perform. We have to be disciplined in the 95%.
4. To succeed we need to focus on improving each day. We have to take necessary action steps to get better each day, week, month and year.
5. Ask yourself each day – what do I need to do today to create the success and outcomes I desire?

Many people ask why we have to change. The individual peer groups are the core of HTG, and always will be for that matter, but the reality of growth is beginning to hit those which have been together the longest. Call it a plateau, hitting the wall, struggling to continue providing value – the game has to change if we are going to continue to be relevant in the businesses we serve. HTG has to penetrate to a different level with more managers in these organizations. Those at the top can only create so much change before they need to bring up another set of leaders to drive things deeper into the organization. It has to happen or HTG will die. I know those still in the dating and honeymoon periods think it is crazy to change what they feel is working just fine. But things won’t be fine forever without change. That is the crux of the matter. We must continue to increase the value HTG brings, we much continue to drive value to our members, we must continue to grow and become more or what has been will cease to be. It is that simple. All organizations change over time. They either find ways to remain vibrant and relevant, or they are relegated to a corner and become a piece of history. We are not willing to let that happen. Of course that means that there will be some whining and gnashing of teeth. It would be much easier to just let it run it’s course and avoid all the change. Change is always a lot more work than status quo. But I won’t let something which I know can continue to make a significant impact in the businesses and lives of our memberships ride off into the sunset. We will change. Each member will need to determine if the value they receive is worth the cost. Some may choose to opt out and move on. But my challenge is to focus on what we can become and not on what we have been. HTG is not about the past, it is absolutely about the future and that is very bright. I look forward to continuing to drive change into HTG so we can grow together as we take everyone to new heights and a new level of performance and life!

Want to have more - then be willing to change

HTG member Alex Ziogas from the windy city recently shared these thoughts with members of his peer group. I thought they were worth repeating so take a moment and read…..

Jim Rohn originally said this:

“Here's the great challenge of life - You can have more than you've got because you can become more than you are. I have found that income seldom will exceed your own personal development. Once in a while income takes a lucky jump, but unless you grow out to where it is, it will go back to where you are. Somebody once said if you took all the money in the world and divided it among everyone equally; it would soon be back in the same pockets. However, you can have more because you can become more. You see, here is how the other side of the coin reads - unless you change how you are, you will always have what you've got. The marketing plan won't do it. It's a good plan but it won't work without you. You've got to work it. It is the human effort that counts. If you could send a sales manual out to recruit - wouldn't that be lovely? The major thing that makes the difference is what YOU do.

In order to have more, you need to become more. The guy says "If I had a good job I would really pour it on, but I have this lousy job so I just goof off." If that is your philosophy, you are destined to stay there. Some people say if I had a lot of money I would be really generous, but I don't have much so I'm not generous. See, you've got to change that philosophy or you will never have "the lots of money." Unless YOU change, IT won't change. Amazingly, however, when we throw out our blame list and start becoming more ourselves - the difference is everything else will begin to change around us.”

Now for my commentary: I think this captures a lot of what we see in the world around us. People want to sit back and let someone else deal with the tough problems. A few sign up for that task, and most of them end up running a business and becoming the folks who make America work and keep the country growing. It doesn’t get better if we keep doing the same things the same ways. If we do that we get the same results. WE have to CHANGE. None of us like that word, not really. But it is critical if you want to earn more, have a better job, retire happy – get over it and embrace the need to change. You have to develop yourself – your boss can’t do it for you. Bosses can assist by investing in training, encouraging you, allotting time and so forth, but I see far too often that even when those things happen people won’t go to the work of improving themselves. It is work, but that is what we are supposed to be doing isn’t it. That is what we get paid for. I am amazed at some of the comments I hear around training and personal development. “Well I am not going to do that – it just benefits my company. Or maybe this one….why would I spend my own time to get better and learn more”. Hello – here is a news flash – if you don’t want to get what you have always got – you have to CHANGE. YOU have to CHANGE. No one can do that for you. Not even the government. So get over the idea that anyone else is responsible for your situation and get to work becoming more than you are today. Every one of us can learn something that makes a difference. If you can’t, that means you are dead. See you at your funeral!

Leading Change

I finally got time to read one of those great books that sometimes gets bought and sits on the shelf a while. John Kotter's book called "Leading Change" is one I have had a few years but never got it along on the plane to read. I did on my recent trip and managed to finish the entire book over a couple days. It was a read well worth it.

I believe that managing change is the biggest challenge and the biggest opportunity we have ahead of us. Change happens. We can deny it, try to ignore it, run from it - handle it any way you wish - but the train has left the station and change will happen. My opinion is that to really succeed we have to learn how to handle change. It starts in our own minds and our attitude toward it. Are you a change embracer or do you resist at every corner? It flows to our employees and families - they follow based on how we lead. But inevitably the real opportunity is for us to help our customers adapt to change. We are change agents as we serve our clients. We bring change constantly into their lives. We have to help them feel good about that change and adapt to it. That is our job. How well we do it will determine much of our success.

Kotter gives us great examples and methods to help lead change. At the core of the book, is a eight-step process:

Establishing a sense of urgency
Creating the guiding coalition
Developing a vision and strategy
Communicating the change vision
Empowering broad-based action
Generating short-term wins
Consolidating gains and producing more change
Anchoring new approaches in the culture

The opportunity is here today. We need to become leaders of change. We need to start with ourselves and then lead those in our circle to embrace change and make it part of their daily lifestyle. Change happens. What are you doing to help lead people there.