Systems Do NOT Kill Creativity

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In a NY Times interview Tyson Cole, the Japanese restauranteur, shared a keen insight about many restaurant owners who shun thoughts about adopting systems in their businesses.

Many restaurant owners feel that using systems would mark them as corporate ‘sell outs’.

In fact, Cole argues, nothing could be further from the truth.  Actually, there’s great value in adopting systems.

Tyson shared a key to success that should appeal to boutique restaurant owners:  ‘You get to be MORE creative when you use systems”  Imagine that.

Cole makes a good point when he argues that some start-up founders may feel (their) organizational efforts will take away from their creativity when, in reality, such systems actually encourage a business to be even more creative!”

“There’s a reason chain restaurants thrive.  Every one of them started as an individual restaurant with a great chef, a great concept, and a great location.  But they (also) developed systems that enabled them to build guest demand, retain key people and . . . make money!”  Without systems in a restaurant, it would have been impossible to open two locations, much less 200 or 2,000.

KEY POINT:
Systems . . . are a necessary component of a scaleable business.  If you’re not systems-oriented, you’re not growth-oriented, either! 

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“Dealing With Turbulence in 2012”

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I’m compelled to comment on something I’m noticing with an increasing and alarming regularity.

It’s a variation on the biological imperative to choose, when faced with a serious threat to your life, between ‘flight’ or ‘fight’.

As we’re now well into the second half of 2012, I’m observing that a number of smaller business owners are making a decision (intentionally or not) on how they’re responding to the challenge of our rather challenging economy.

Basically, there are two (2) camps of thinking that seem to be emerging:

1.  owners who are ‘doing nothing new’ to build their business, and

2.  owners who are choosing to ‘do something’ to build their business in this economy

If you’re choosing to ‘hunker down’ and ‘stay the course’ in the hope that you’ll ‘survive the storm’ you are making a risky choice between action and in-action. If you have a lot of money in savings, you may be able to afford to exercise that choice.  But not all of us have that option.  Even worse, many owners are exercising the ‘do nothing new’ option — whether they can afford to or not.

Other owners who decide, as Hamlet once said, “To take arms against a sea of troubles and, by opposing, end them . . .” regardless of their resources, are far more likely to not only survive the economic conditions we’re in at the moment but thrive better than most when it ends, as well.

Quick diversion . . . when I was a pilot-in-training

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there were certain times (during instrument flight training) that you learn you must ‘trust the instruments, NOT your body’.  Why?  Absent visual cues (like the horizon) when you’re ‘in the clouds’, your equilibrium becomes unreliable very quickly.

You ‘feel’ like you’re leaning to your right side so you ‘correct’ to the left.  That ‘feels’ correct — to your body. In fact, you ‘feel’ you’re flying ‘straight’.  But you’re not.  You’re actually in a left bank and turning to the left rather than proceeding on a straight course.

Eventually, relying on your ‘feelings’ rather than your instruments, you’ll find yourself in what is known to pilots as the ‘graveyard spiral’.  Your shallow turn to the left actually reduces your aircraft’s lift factor (it’s aerodynamic stuff and I won’t bore you with that!) and, as a result, you begin to lose altitude.

Whether you can read your instruments for instrument flight conditions or not, even beginning pilots learn to watch their altitude / altimeter.

When you notice you’re losing altitude, the ‘obvious’ response is to “pull back’ on the stick or yoke.  When you’re in level flight, that raises your plane’s nose and makes your aircraft climb.  Hence, you gain altitude.

But once you’re in a turn, however slight, pulling back on the stick only tightens your turn. Ironically, that ‘feels’ the same (to your body) as when you’re climbing — you feel yourself being pushed down into your seat.  But it’s not gravity making you ‘feel’ that sensation; it’s centrifugal force (you’re in a turn, remember?).

At this point, non-instrument trained, inexperienced pilots notice that they’re losing altitude more rapidly.  So they ‘pull back’ on the stick (again!) hoping to re-gain valuable altitude.  But it seems to work in exactly the opposite manner.  The more they ‘correct’ for their altitude loss, the more altitude they’re actually losing!

Eventually, this becomes a viscious cycle that makes the aircraft (and, the hapless pilot and any unfortunate passengers) enter such a tight turn that either the aircraft suffers structural damage and is lost or, the plane is flown all the way down into the ground (or, the sea as happened to John F. Kennedy, Jr off Martha’s Vineyard, MA a few years ago).

OK, back to 2012’s ‘interesting’ economy . . .

If you, like most of us in entrepreneur-land, find this economy isn’t the same as it was a few years ago (AKA ‘The Good Old Days’), your response to it may not be all that different than the pilot who doesn’t understand the ‘best’ course of action under deteriorating flight conditions.

Today, while the ‘natural’ inclination of many business owners and solopreneurs is to ‘do nothing’ different than you have done in the past, I submit that may be just as deadly as pilots who do the wrong thing at the wrong time in flight.

What is called for now is action, not IN-action.  But appropriate action.  And that would be . . . to proactively market your business in a manner that reflects:

1. a candid, honest understanding of your business — strengths AND weaknesses,
2. the marketplace you seek to attract and serve, and
3. a proven and systematic plan for taking coordinated actions to build your business or practice services . . . effectively

Doing ‘no thing’ IS a decision.  And, it may be the best decision you can make. At times.  But it’s usually not a deliberate decision as much as it’s a default decision because many of us are simply not being proactive about the ‘sea of troubles’ on the horizon that are waiting for anyone who’s in business in 2012.

My Respectful Recommendation . . . Do Something . . . By Design, Not Accident

As tempting as it is to ‘do nothing’ and ‘hope this economic storm blows over’ that strategy is just as deadly to your business as a ‘graveyard spiral’ is to an inexperienced pilot.

As difficult . . . scary . . . unsettling . . . makes-me-feel-like-throwing-up . . . as it may ‘feel’ to you . . . DO SOMETHING to make your business what you want it to be . . . by design, not accident.

Staying the course, given the current economy, is probably not the best course of action you can take these days.  Remember the old saying, “Doing what you’ve always done isn’t going to get you anything different”.  Today, that can also get you killed.  Times have changed.  We must change, too.  Or, suffer the consequences.

Doing what you did to build your business in the past may need some adjustments to make your business remain successful in these turbulent days.

Yes, you risk making a mistake when you do something new.  And none of us want to make mistakes.  But remember that doing nothing is still a decision to do something — ‘nothing’.  And doing ‘nothing’ has it’s own consequences — positive and negative.  But they’re not consequences you’re creating.  They’re consequences you’re being forced to accept because you’re abdicating your personal responsibility to make decisions and take actions critical to your own success.

No one has ‘all the answers’ to this economy or the best ways to respond to it for your business.  But please . . . don’t do no-thing because you didn’t already consider doing some-thing else.  At least make doing no-thing a deliberate and thoughtfully considered decision.  It might be the correct course of action for you and your business.  But for many, like Hamlet said, “taking arms against a sea of troubles . . .” will be far more likely to end them.

So . . . do your homework . . . seek the counsel of your trusted advisors . . . then do some-thing to market your business or practice.  Yes, even if it is no-thing.  But do it deliberately.  You and your business will come through these challenging times and yes, you WILL be better for it when (not if) the economy eventually improves.

KEY POINT:
Life is what YOU make it.  Choose wisely.  Act decisively.  And, enjoy success . . . because you’re worth it! 

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Moments of Truth in Branding

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Branding Lessons:  Moments of Truth
Last evening I attended a meeting where the topic of discussion was ‘branding’.
While many of us are, in varying degrees, familiar with the topic, the viewpoint of those present focused on: 1) the means of ‘sharing’ the brand or identify of a firm and 2) the basis of its reality.

You Don’t Tell People What Your Brand Is — They Tell You 
One of the points we discussed was that, what with social media being what it is, the power of branding your business is more in the hands of your customers and clients than yourself or your own marketing people.

Of course, we all want to have a ‘brand’ that elicits the feelings and generates the associations we’d like people to have of us. But the reality is that your firm’s brand is what the people who come into contact with your business believe about it.

True, or not.  Desirable, or not.  Perception is reality.  And whatever people believe is true about your business is what is ‘true’ and real about it.  For them. For example, you may believe your _______ don’t stink.  But if your prospects and clients think it stinks, then it does!

If You Can’t Control The Distribution, Control What’s Being Distributed!
OK.  So you know that the word-of-mouth process is not under your control, right?  But, what IS under your control is the kind of experience people have when they come into contact with your company.  This is a far more significant truth to embrace.  After all, if you create a ‘Wow’ Experience for your customers or clients or patients, they will talk about you.  And, what they say will help to establish a positive (and, competitive!) perception about your business.

KEY POINT:
Your brand differentiates your business from others to prospective clients.  While you may have little or no control over how people may share your brand with other people, you have 100% control over how they’ll experience your business / understand your brand.

Therefore, seek to create an experience with your business that makes people say, “Wow!”. 

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Recovery Is Next To Godliness!

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Every contact you make with a client or prospective client is a ‘Moment of Truth’.

You either make or break it . . . depending on how well you respond to the situation.

Much like our friend here on the right . . .

A Tail of Getting It Right
Recently, we had to take one of our cats to the Veterinarian for a dental cleaning.  While we love and trust our Veterinarian, we were a little apprehensive about this procedure because our pet would need to be anesthetized.

As a safety measure, our Vet did need to draw blood to analyze it as a way to make sure our cat could safely undergo the anesthesia and the dental procedure.  We expected that.

Surprise! . . . It  Isn’t Always a Good Thing
When we picked up our beloved Jake at the end of the day we got a surprise.  Actually a couple of them!  The bill for the dental cleaning was significantly higher than we expected.  Only a few months earlier, his sister Jasmine had her teeth cleaned and the bill was about half of what we were being charged for Jake.

The fee, while a surprise, didn’t concern us as much as the basis for the fee.  It seems there was more than one blood test performed.  That made us question if something had been ‘discovered’ from the first blood test that suggested a problem with Jake’s health.  In addition to that, there was a charge for “ICU services” and ‘hydration with lactated Ringers Solution’ that seemed odd and created a lot of consternation in my wife and I.

After sharing our concerns with our Vet and her practice manager, our fears about Jake’s health were allayed and the billing was adjusted.  Why?  Because it was the ‘right thing’ to do.  As a result, we’re even more pleased with our Veterinarian and her practice manager.

Look, things do happen.  That’s life.  But remember — it’s what you do AFTER things occur that is most telling about Y-O-U.

When The Bloom Goes BUST!
Also this week, a new garden shop opened in my town.  

They managed to get a nice piece written up and published in a local paper. The former owner had passed away.  A subsequent buyer tried to rekindle the magic but shut the doors within a year.  So now this newest owner seemed to suggest a ‘turnaround’ was about to happen.

Hello?  Is Anyone There?
The Garden Center’s ‘Grand Opening’ was last Sunday.   On Tuesday, my wife called to find out their operating hours.  No one answered the phone.  No machine.  Nothing.  So she went there to buy some products for the garden. Incredibly, there was no one at this ‘brand new’ Garden Center.  It was locked.  No staff.  Nothing.

Joyce then proceeded to go to a nearby competitor and bought what she needed.  When she told me what happened, she concluded with, “. . . and if they think they’ll ever see my money, they have another thing coming!”.  They lost a customer before they were open a week!

KEY POINT:
Good management is the basis for great marketing.  Promoting a firm that makes a customer or client mad, sad or scared is a guaranteed road to ruin!

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Communication Improves Performance

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If you know me, you know I believe that how you operate your business is as important as how you promote awareness of your business or professional practice.

The Secret of a Great Team?  Communication!
I just read a fascinating article in HBR on The New Science of Building Great Teams.  

In it, Alex Pentland, a professor at MIT and the director of MIT’s Human Dynamics Laboratory and the MIT Media Lab Entrepreneurship Program, and the chairman of Sociometric Solutions, shared a fascinating insight — the more team members interact (i.e. communicate) with one another, the more productive and effective they are.

Professor Pentland created a ‘tech-tool’ that, worn by team members, collected data about:

1.  who people talked with,
2.  how much intensity (energy) they used, and
3.  how often they interacted with other members of their team or work-group

Net result:
The more team members actually communicated, the more effective and productive they were.

The ‘Bee’ Among The Flowers is Not Only Busy but Increases Productivity, As Well
Pentland noted (around 3:30 sec into his 6 min video in the article) that some team members are ‘above-average’ at getting to know and share awareness of special skills and abilities of their team with others on a team.  They’re the people who are always seeking out people to meet, asking them to ‘Tell me more about how you . . .” and then connecting these people into parts of a project on an ‘as needed’ basis.

The more of these ‘bees’ you have in your ‘hive’ . . . the sweeter the honey . . . the greater the success of the team, overall.

KEY POINT:
Productivity is attractive in marketing your business.  Facilitating communication — quality and quantity of it — among your staff or team-members may be one of your best ‘marketing’ secrets. 

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Secret of Growth? Yes, there is!

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If you’re a business owner in 2012, you’re an exceptional individual.  You’ve survived one of the most challenging economic periods in history.  Congratulations.  You’re amazing.

At the same time, I bet that merely ‘surviving’ financially is not why you want to be in business.  Business is (and, I’ll reveal my own bias here) about growth!

There’s a Secret for Growing Revenues?
YES!  Years ago, as a management consultant at a large international trade association, I was mentored by a Gordon A. Kratz, CLU.  Gordon developed a process, delivered by myself and other consultants, that significantly increased the rate of growth for companies who used our process — relative to their peers that did not use our process.  It’s called The Profit Project™.

Release Strengths by Reducing Limitations
No company is perfect.  You have factors going for you (strengths) and factors going against you (limitations).  The secret is to leverage your strengths by reducing your limitations.

For example, if you have a great product but an ineffective distribution system, you want to work on your distribution system.  Improving your product, while easier, will not do as much to help you increase your revenues or growth.

Or, assume you’re generating leads, but your people aren’t servicing your customers.  In this case, training your people to create an ‘exquisite customer experience’ will get customers coming back –– with the higher margins for profit and growth their sales suggest.

Knowing What To Address Is Just The Beginning
Once you’ve isolated the addressable (key word!) ‘limitations’ in your business, you want to set goals to eliminate them. For each goal, you want to build an action plan to make it real. That gives you what every business owner wants — control –– of your future.

KEY POINT:
Growth reflects a process that is best implemented with advice from a consultant outside of the management team that is engaged in the daily operation of your business.

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Is Service Dead?

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Once again, I’ve found the secret of being highly competitive.  SERVICE!

Missed Opportunity #1:  The Bank
My wife recently received a notice from her bank that, because she has had no activity in her account (it’s a CD and we let it roll over), unless she presents herself to the bank, her funds will be turned over to the state of CT as ‘unclaimed funds’.  Joyce wasn’t too happy at the way the bank was handling this.  Evenso, she went to the bank to let them know she was ‘still active’ and to not turn her CD over to the State of CT.

The Bankers from Hell
While my wife is waiting to talk with the branch manager, she’s sitting next to where the teller windows are located.  One customer approached a teller to make a withdrawal.  Another teller — not the one working with him — sees what he’s withdrawing and says (out loud!), “Wow — that’s a lot of money!  Are you going to buy a house or what?  Or maybe you’re going to the casinos?  If so, I’ll go with you with that kind of cash”.

My wife was appalled.  The man was clearly uncomfortable.  And not one staff person said anything to the offensive teller.

It Gets Worse!
When my wife got to speak with a manager about her ‘unclaimed asset’ account, the manager couldn’t get someone from the bank’s home office to take her call to explain how to process the form my wife received — and the manager was not familiar with it (great training!).

The manager apologized to my wife saying, “I don’t know why they’re not picking up”.  (Yeah?  Well, I think I do!)

The Most Egregious Sin of All
What’s so sad about this situation is that this bank is currently running a TV commercial showing how they go to great lengths to ‘service’ their customers.

In one commercial, a branch manager actually opens up her branch early because one of her valued customers forgot her passport in a safe deposit box and needed it to go on a trip.  That’s why ‘marketing’ and ‘operations’ need to align or the customer will suffer and then so will the revenue-stream they generate for this bank!

Long story short, this bank’s inability to know what their staff is doing that creates a negative experience for their customers, or train them to perform in a professional manner and have managers who will not tolerate it when they perform badly . . . has cost it our business.  In America, we ‘vote’ with our pocketbooks and wallets.

With unprofessional / unacceptable behavior tolerated from their staff and the commercials being run on television I think this bank needs to take a long, hard look at their operations rather than which media they can use to push a message that is out-0f-touch with the reality they deliver in-person.

KEY POINT:
What your business DOES speaks so loudly it matters not what you SAY in your marketing materials.  Your behavior communicates more powerfully than anything else to your customers.  Don’t ever forget that!

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The Secret of Business Growth?

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I hope you’d enjoy this brief trip back down ‘Memory Lane’ with me.  I sure did!

The Wizard of Oz contains the secret of business GROWTH.

You need (at least one!) a clear GOAL and a PLAN (of action) designed to help you reach it.

The other thing you need to be successful is . . . ACCOUNTABILITY!

“Follow, Follow, Follow, Follow . . . Follow The Yellow-Brick Road!”
In the Wizard of Oz, Dorothy has a clearly defined GOAL — to go the the Emerald City and find  the ‘great and all-powerful Wizard of Oz’.  After that she had another ‘bigger’ goal — to get back home to Kansas.  And, just like Dorothy, your business has multiple goals that all depend on still other goals to become realities.

Every business has a basic and clearly defined Goal — generate revenues and . . . profit.

Early in the story, Dorothy gets a road-map (literally!) to reach her goal – when the Munchkins tell her to, “Follow the Yellow Brick Road”.  (That was the 1939 equivalent of our modern GPS!)

But what happened to Dorothy?
She manages (catch my humor, there?) to recruit some staff members.  But she soon learns that her staff is far from perfect!  Tin-man has no heart (legal department?).  Scarecrow has no brains (operations?).  And the cowardly Lion has no courage (the sales force?).

Great way to start the process of achieving her goal!  Maybe you can relate?

The Wicked Witch of the West
The wicked witch represents the ‘force’ that makes many things ‘go awry’ during the implementation of any plan.  So it wasn’t surprising that Tin-man was threatened with water so he could rust again, Scarecrow was set on fire and Lion was scared into catatonic paralysis.

Later, Dorothy’s entire staff was easily distracted by being made to fall asleep by the Wicked Witch in the poppy field scene — making her ‘easy picking’ for those winged monkeys!

And THAT is why if you want to be successful . . . you need a Goal, a Plan and you need to be held accountable for doing what you planned to do in the first place.

KEY POINT:
Success reflects a PLAN to reach a GOAL and some way to be ACCOUNTABLE for doing whatever it takes to reach your goal and achieve success. 

 

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Finding Your Most Profitable Clients

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“With one foot in ICE water and one foot in BOILING water . . . on the average . . . you should be pretty comfortable!”

One of the things I remember from my college statistics class was that an ‘average‘ is a theoretical construct abstracted from empirical reality.

Practically speaking, it doesn’t reflect in any accurate way what’s really going on in your world — i.e. ’empirical reality’.

“Statistics Lie”
That’s 100% Incorrect. Statistics don’t lie any more than guns kill people.   But people do use them to present reality in a way that may invite you to either misunderstand or (more likely!) misperceive the ’empirical reality’ that they’re based upon.

The 80 / 20 Rule — AKA “Pareto’s Principle”
Pareto was the Italian economist who first suggested that “80% of any result is generated by about 20% of the effort required to get it”.  This ‘rule’ of input and output has been applied to almost everything.  In business, you often hear, “80% of your profits comes from 20% of your clients”.  That’s accurate — until you dig deeper!

Pareto’s Principle reflects a Statistical AVERAGE Not an Empirical Reality!
In advertising, you hear, “50% of every dollar spent is wasted” followed by the collorary “So I have to spend a buck to see any value”.  That’s consistent with the “80/20 Rule” — only in that case, it’s more like the “50/50 Rule”!

Even if the 80/20 rule is ‘technically correct’, it can be ‘practically in-correct’.  Why?  Because is SIMPLIFIES the situation and that is what causes the 80/20 rule to be dangerous if you take it on face value.

Pareto was a Pessimist!
What I mean is that when you examine which of your clients are contributing to your ‘bottom line’, you may find what MIT lecturer, Jonathan Byrnes points out in his book “Islands of Profit in a Sea of Red Ink“.  Byrnes argues that your practice has a relatively few ‘super profitable clients’ who cover for the ‘grossly un-profitable ones’.  So while the 80/20 Rule may appear to be true, in reality, your profits are more likely to reflect the “99.9 / 0.01 Rule”.

KEY POINT:
Identify your SUPER PROFITABLE clients and cultivate relationships with them! 

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A System for . . . Business GROWTH

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Systems.

That very word sounds so technical, doesn’t it?  It conjures up images of NASA engineers sitting around small screens, white-shirted people in black glasses hunched over drafting tables, in large worksites, in small communities of connected cubicles.

What IS a System?
In the end, a system is just a group of related elements and coordinated actions that are designed to create a specific result.

Business Systems

Business Success Relies on Systems
In business, we have any number of systems.  Generating clients (and, the revenues they bring into your operation) can / should be a system.  Same for selling.  If you need people to run your business or practice, then a system to recruit candidates and another to select the better ones each suggest a ‘system’ as well.

Then you need to develop your new hires to perform effectively, yes?  So a ‘performance development’ system for developing your people — by training, motivating, problem-solving, etc. all suggest yet another kind of business system.  And lest we ignore operations, you probably have a system for how you manage your funds — an accounting system.  In short, whether by design or not, an effective business is one that probably relies on using systems more than one that doesn’t.

GROWTH . . . Yeah, there’s a System For That,  Too
One of the systems I find is most often not present is a system for creating growth in a business.  Yes, there’s a system for that, too.  We call it The Profit Project™
Check out a brief video on this 

KEY POINT:
Business success is no accident.  And a systems approach to achieving it makes it far more likely . . . for you!

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