Tag Archives: peak performance

The Power of Habit – Part 3

Starbucks And The Habit Of Success—When Willpower Becomes Automatic:

Starbucks has succeeded in teaching life skills to its employees,  All new employees spent at least fifty hours in Starbucks classrooms, and dozens more at home with Starbucks’ workbooks and taking to the Starbucks mentors assigned to them.

At the core of that education is an intense focus on an all-important habit:  willpower.  Dozens of studies show that willpower is the single most important Keystone habit for individual success.  Self-discipline has a bigger effect on academic performance than does intellectual talent.  And the best way to strengthen willpower and give students a let up, studies indicate, is to make it into a habit.

Howard Behar, former president of Starbucks told the author, “We’re in the people business serving coffee.  We’re not in the coffee business serving people.  The solution Starbucks discovered, was turning self-discipline into an organization habit.

This enabled Starbucks to effectively successfully achieve its rapid expansion.

Willpower isn’t just a skill.  It’s a muscle, like muscles in your arms or legs, and it gets tired as it works harder, so there’s less power left over for other things.

What employees really needed were clear instructions about how to deal with inflection points.  So the company developed new training materials that spelled out routines for employees to use when they hit rough patches.  The manuals taught workers how to respond to specific cues, such as a screaming customer or a long line at a cash register.  Mangers drilled employees, role playing with them until the responses became automatic.  The company identified specific rewards—grateful customers, praise from a manager—that employees could look to as evidence of a job well done.

Starbucks taught their employees how to handle moments of adversity by giving them willpower habit loops.  This is how willpower becomes a habit: by choosing a certain behavior ahead of time, and then following that routine when an inflection point arrives.  In essence, they decided ahead of time how to react to a cue.  When the cue arrived, the routine occurred.

Studies have shown some people were able to create willpower habits relatively easily.  Others, however, struggled no matter how much training and support they received.  What was causing the difference?

When people are asked to do something that takes self-control, if they think they are doing it for personal reason—if they feel like it’s a choice or something they enjoy because it helps someone else—it’s much less taxing.  If they feel like they have no autonomy, if they are just following order, their willpower muscles get tired much faster.

For companies and organizations, this insight has enormous implication.  Simply giving employees a sense of agency—a feeling that they are in control, that they have genuine decision-making authority—can radically increase how much energy and focus they bring to their jobs.  Giving employees a sense of control improved how much self-discipline they brought to their jobs.  People want to be in control of their lives.

The Power Of A Crisis:

Crises are so valuable, in fact, that sometimes it’s worth stirring up a sense of looming catastrophe rather than letting it die down.  Good leaders seize crises to remake organization habits.  In fact, crisis are such valuable opportunities that a wise leader often prolongs a sense of emergency on purpose.

A company with dysfunctional habits can’t turn around simply because a leader orders it.  Rather, wise executives seek out moments of crisis—or create the perception of crisis—and cultivate the sense that something must change, until everyone is finally ready to overhaul the patterns they live with each day.  Rahm Emanuel stated,” You never want a serious crisis to go to waste.”

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The Power of Habits – Part 2

The Golden Rule of Habit Change:  Use the same cue, and provide the same reward, you can shift the routine and change the habit.  Almost any behavior can be transformed if the cue and the reward stay the same.  But to change an old habit, you must address an old craving.  You have to keep the same cues and rewards as before, and feed the craving by inserting a new routine. It’s in the power of habits.

Asking patients to describe what triggers their habitual behavior is called awareness training and it’s the first step in habit reversal training.  It seems ridiculously simple, but once you’re aware of how your habit works, once you recognize the cues and rewards, you’re halfway to changing it.  The brain can be reprogrammed.  You just have to be deliberate about it.

If you identify the cues and rewards you can change the routine,  at least, most of the time.  For some habits, however, there’s one other ingredient that’s necessary.  Belief.

The precise mechanisms of belief are still little understood.  But we do know that for habits to permanently change, people must believe that change is feasible. This process makes AA so effective.  Belief is also easier when it occurs within a community.  A community can be as few as two people.

The Habits of Successful Organizations—Keystone Habits:

Paul O’Neil—1987 became CEO of Aluminum Company of American, Alcoa. His  opening address to Wall Street, “I want to talk to you about worker safety.”

So how did O’Neill make one of the largest, stodgiest and most potentially dangerous companies into a profit machine and a bastion of safety?  By attacking one habit and then watching the changes ripple through the organization.

O’Neil figured his top priority would have to be something that everybody—unions and executives—could agree was important.  He needed a focus that would bring people together that would give him leverage to change how people worked and communicated.

O’Neil believed that some habits have the power to start a chain reaction, changing other habits as they move through an organization.  Some habits, in other words, matter more than others in remaking businesses and lives.  These are “Keystone Habits,” and they can influence how people work, eat, play. Live, spend, and communicate.  Keystone habits start a process that, over time, transforms everything.  Keystone habits say that success doesn’t depend on getting every single thing right, but instead relies on identifying a few key priorities and fashioning them into powerful levers.  The habits that matter most are the ones that, when they start to shift, dislodge and remake other patterns.

If you focus on changing or cultivating Keystone habits, you can cause widespread shifts.  However, identifying Keystone habits is tricky.  To find the, you have to know where to look.  Detecting Keystone habits means searching out certain characteristics.  Keystone habits offer what is know within academic literature as small wins.  They help other habits to flourish by creating new structures, and they establish cultures where change becomes contagious.  On an individual basis, exercise can be a Keystone habit.

Small Wins are a steady application of a small advantage.  Once a small win has been accomplished, forces are set in motion that favors another small win.  Small wins fuel transformative changes by leveraging advantages into patters that convince people that bigger achievements are within reach.

Small wins do not combine in a neat, linear, serial form, with each step being demonstrable step closer to some predetermined goal.  More common is the circumstance where small wins are scattered.

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The Power of Habits – Part 1

All of life, is but a mass of habits.  Most of the choices we make each day may feel like the products of well-considered decision making, but they’re not.  They’re habits.  And though each habit means relatively little on its own, over time impacts on our health, productivity, financial security, and happiness.  One paper published by a Duke University researcher in 2006 found that more than 40 percent of the action people performed each day weren’t actual decisions, but habits.  Only in the past two decades have scientists and marketers really begun understanding how habits work—more important, how they change.  Habits can be changed, if we understand how they work.

When you woke up this morning, what did you do first?  Which route did you drive to work?  When you got to your desk, did you deal with e-mail, chat with a colleague, or jump into writing a memo?  When you got home what did you do first?  Your actions were habits.

The Habits of Individuals:  The habit Loop—How Habits Work: 

Habits, scientists say, emerge because the brain is constantly looking for ways to save effort.  Left to its own devices, the brain will try to make almost any routine into a habit, because habits allow our minds to ramp down more often.

“An efficient brain also allows us to stop thinking constantly about basic behaviors, such as walking and choosing what to eat, so we can devote mental energy to inventing spears, irrigation systems, and eventually airplanes and video games.

But conserving mental effort is tricky, because if our brains power down at the wrong moment, we might fail to notice something important, such as a predator.  So our basal ganglia have devised a lever system to determine when to let habits take over.  It’s something that happens whenever a chunk of behavior starts or ends.”

The process in which the brain converts a sequence of actions into an automatic routine is known as chunking and it is the root of how habits are formed.  This process within our brains is a three-step loop.  First, there is a cue, a trigger that tells your brain to go into automatic mode and which habit to use.  Then, there is the routine, which can be physical or mental or emotional.  Finally, there is a reward, which helps your brain figure out if this particular loop is worth remembering for the future.

Over time this loop—cue, routine, reward; cue, routine, reward become intertwined until a powerful sense of anticipation and craving emerges.  The discovery of the habit loop is so important is that it reveals a basic truth:  When habit emerges, the brain

stops fully participating in decision making.  It stops working so hard, or diverts focus to other tasks.  So unless you deliberately fight a habit—unless you find new routines—the pattern will unfold automatically.  Habits never really disappear.  They’re encoded into the structures of our brain.  The problem is that your brain can’t tell the difference between bad and good habits, and so if you have a bad one, it’s always lurking there, waiting for the right cues and rewards.

This explains why it’s so hard to create exercise habits, for instance, or change what we eat.  By the same rule, though, if we learn to create new neurological routines that overpower those behaviors—if we take control of the habit loop—we can force those bad tendencies into the background.  And once someone creates a new pattern, studies have demonstrated, going for a jog or ignoring the doughnuts becomes as automatic as any other habit.

Without habit loops, our brains would shut down, overwhelmed by the minutiae of daily life.  People whose basal ganglia are damaged by injury or disease often become mentally paralyzed.  Without our basal ganglia, we lose access to the hundreds of habits we rely on every day.  As long as your basal ganglia is intact and the cues remain constant, the behavior will occur unthinkingly.

Researchers have learned that cues can be almost anything, from a visual trigger such as a candy bar or a television commercial.  Routines can be incredibly complex or fantastically simple.  Rewards can range from food or drugs that cause physical sensations, to emotional payoffs such as the feelings of pride that accompany praise or self-congratulations.

Habits are powerful, but delicate.  They can emerge outside our consciousness, or can be deliberately designed.  They often occur without our permission, but can be reshaped by fiddling with their parts.  They shape our lives far more than we realize—they are so strong, in fact, that they cause our brains to cling to them at the exclusion of all else, including common sense.  By learning to observe the cues and rewards we can change the routines.

The Craving Brain—How To Create New Habits:

Claude Hopkins, a famous marketer in the early 1900’s, was best known for a series of rules he coined explaining how to create new habits among consumers.  These rules would transform industries and eventually became conventional wisdom among marketers.  Throughout his career one of his signature tactics was to find simple triggers to convince consumers to use his products every day.  Craving, it turns out, is what makes cues and rewards work.  That craving is what powers the habit loop.

His most famous product was Pepsodent toothpaste.  This was at a time people did not use toothpaste.  The cue he related to was film on teeth and the reward was a

bright smile and the routine was to use Pepsodent toothpaste everyday.  Hopkins first rule was to find a simple and obvious cue and secondly, clearly define the rewards, and lastly to generate a craving.

Habits are so powerful because they create neurological cravings.   Most of the time, these cravings emerge so gradually that we’re not really aware they exist, so we’re often blind to their influence.  But as we associate cues with certain reward, a subconscious craving emerges in our brain starts the habit loop spinning.

Craving example—email.  When a computer chimes or a smartphone vibrates with a new message, the brain starts anticipating the momentary distraction that opening an email provides.  That expectation, if unsatisfied, can build until a meeting is filled with antsy executives checking their buzzing smartphones under the table, even if they know it’s probably only their latest fantasy football results.  (On the other hand, if someone disables the buzzing—and thus, removes the cue—people can work for hours without thinking to check their in-boxes.)

Countless studies have shown that a cue and a reward, on their own, aren’t enough for a new habit to last.  Only when your brain starts expecting the reward—craving the endorphins or sense of accomplish.  The cue, in addition to triggering a routine, must also trigger a craving for the reward to come.  Craving is an essential part of the formula for creating new habits.  And figuring out how to spark a craving makes creating a new habit easier.

The Golden Rule Of Habit Change:

Tony Dungy’s coaching philosophy and belief “the key to winning was changing players’ habits.  He wanted to get players to stop making so many decision during a game.  He wanted them to react automatically, habitually.  If he could instill the right habits his team would win.  Champions don’t do extraordinary things, they do ordinary things, but they do them without thinking, too fast for the other team to react.  They follow the habits they’ve learned.”

So rather than creating new habits, Dungy was going to change players old ones.  And the secret to changing old habits was using what was already inside players’ heads.  Habits are a three-step loop—the cue, the routine, and the reward—but Dungy wanted to only to attack the middle step, the routine.  He knew from experience that it was easier to convince someone to adopt a new behavior if there was something familiar at the beginning and the end.

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How to Diffuse Workplace Conflict

I recently conducted a workshop on a highly emotional topic: humans in the workplace. After all, every human being—employees and bosses—shows up for work accompanied by their unique drives, triggers, and tendencies. All things considered, it’s a wonder we get any work done at all.

My message to the attendees may be of value to you, too. As your company leader, it’s your job to boost productivity, which means it’s also your job to diffuse workplace conflicts and create consensus, keeping your teamed focused on achieving your goals.

There are many theories on how to accomplish this. Based on what I’ve learned from my small business peer groups and my own experience as a CEO, I’ve identified up four main strategies for dealing with difficult people and creating an emotionally-healthy, productive workplace. I’ve summarized these briefly below, and you can download my complete PowerPoint presentation at http://propres.com/difficult-people-ppt/.

Understand Yourself

Do you know what makes you tick? Do you know what ticks you off? The best managers are those who are aware of their emotions but not enslaved by them.

Good managers typically have a high Emotional Intelligence Quotient (EQ)—that is, a high level of self-awareness regarding their emotional reactions and the emotions of others. Self-awareness is the first step toward self-management, the conscious management of one’s behavior.

To raise your EQ, check out Emotional Intelligence 2.0 by Travis Bradberry and Jean Greaves.

Understand Others

Good managers also have good social awareness. They not only pick up on other people’s emotions but know why they act the way they do. More and more employers are using personality assessment programs to better understand how their employees think.

One program I like is the DiSC® personality assessment system. DiSC is based on a four-part model of human behavior: the Dominant, Influencing, Steady, and Compliant traits. The DiSC test measures patterns of behavior, and then creates a personality profile that reflects an employee’s strengths, weaknesses, and drives.

Use Your Understanding to Manage Behavior

The whole point of understanding your emotions is that it will allow you to manage your behavior consciously and positively, as opposed to reacting emotionally in the moment.

The whole point of understanding the emotions of others is that it will allow you to behave in a manner that will get the desired response from others. In the workplace, this often comes down to diffusing conflict and creating consensus among employees.

Remember the old adage about counting to 10 when you’re angry? Turns out, it’s right on target.

For more about managing behavior, read Dealing with People You Can’t Stand: How to Bring Out the Best in People at their Worst by Dr. Rick Brinkman and Dr. Rick Kirschner.

Use Your Understanding to Hire Wisely  

You can also apply these principals to make more successful hires. Instead of hiring new employees on the basis of a resume, look for people whose values and communication styles are harmonious with your own. Do they hold themselves accountable? Will they “get” your company culture?

If you’re seriously interested in a candidate, you can use a personality assessment to see if they’d make a good match for the position and your company. By choosing the right people, you can proactively diffuse conflict before it happens and create consensus from the get-go. Which means you’ll have to do a little less of the other three strategies further down the road.

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Get More from LinkedIn

How to Get More Sales from LinkedIn

By Ray Silverstein

Everyone who uses LinkedIn suspects that they could get more from it, sales-wise, if they could only knew how.

So, my company recently sponsored a workshop presented by Larry Kaufman, a LinkedIn keynote speaker and one of LinkedIn’s Top 250 most-connected Americans. Larry is Chief Sales Officer and Partner of Sales Empowerment Group. He’s also a long-term member of my PRO peer groups, and in true peer group fashion, is generous sharing his knowledge.

Now, I’m paying it forward by sharing my top takeaways with you.

Polish Your LinkedIn Profile

Before anything else, make sure you’re presenting yourself at your best. This sounds basic, but it’s easy to overlook.

  • Update Your Profile – Chances are, you created your profile years ago and haven’t done much since. Things change; your profile should, too.
  • Take Your Time – A good update takes several sessions, so deactivate your “activity broadcasts” (under Privacy Settings) for now. You don’t want contacts receiving notice of every little change. Wait until you’re done.
  • Capitalize Your Name – It helps you stand out in any list.
  • Expand Your Headline – In addition to your title, add other notable credentials.
  • Use a REALLY Good Photo – First, you must feature a photo…no silhouettes. And if don’t have a great business portrait, get one.
  • Embed Keywords – Approach your profile the way you would a webpage or blog: use keywords.
  • Add Content – Did you know you can upload articles, PDFs, and videos, not to mention website links to get more exposure for your business? (Look for an icon/drop down box throughout your profile page.)

Build Your LinkedIn Presence

  • Create a Corporate Page – If you don’t have a company page, create one…yes, even if you’re a solopreneur. (This is one of LinkedIn’s most underutilized features.)
  • Use LinkedIn’s “Status Update” feature – It’s a quick, easy way to keep your name out there. If you’re excited about a new product or have industry news, share it.
  • Join Relevant Groups –You may learn something, and it’s more exposure. Plus, it puts you in touch with people you may want to know.

Start Connecting

  • Use InMail – InMail is LinkedIn-style email. The top reason to pay for an premium LinkedIn account is InMail access, but even a basic (free) membership lets you use InMail when sending inviting new connections. Instead of using LinkedIn’s default invitation, always craft a personal note.
  • Use “People You May Know” – This feature allows you to expand your network quickly. It draws from the former employers and schools listed in your summary, among other things. When you invite these people to connect, remind them of your shared history.

Leverage Your Connections to Kick-Start Sales

You probably use LinkedIn to mine information about existing prospects, but you can also use it to find—and cozy up to—new ones. Remember ‘six degrees of separation’? Well, two degrees is even better.

The idea: use your first-degree connections’ connections. Are there prospects for you there?

To find out, visit a contact’s profile and view his/her Connections box. If his/her network isn’t hidden, browse it or search it by title.

Make a list of, say, five people you’d like to connect with. Then, send your first degree connection an email, requesting introductions. Include a one-paragraph summary of yourself, and ask your contact to include it in his/her introductory emails. This makes things easy for your contact and lets you control how you’re presented.

Ask that you be cc’d, and as soon as the introduction has been sent, follow up with the prospect. You know how to take it from there. Always thank your contact, and offer to return the favor. Instead of cold calls, you now have warm, personal introductions!

Bottom line: your connections are invaluable to your sales. Tools like LinkedIn let us leverage relationships in fresh, new ways…when we’re willing to take the time to learn how to use them.

If you are interested in a great workbook I’d recommend a great one from another cohort, Zen Benefiel, who compiled it and given several workshops for SCORE in Phoenix. How to Grow Your Business Using LinkedIn.

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Measuring Risk – Don’t Be A Seymour

Growing a business means taking risks and making changes. But that’s not as easy as it sounds. And for most people, the longer you are in business, the harder risk-taking gets.

When you first started your business, you were willing to take some big risks. You had to. But ironically, as you grow more successful, chances are, you’re becoming more risk-adverse.

It’s simple: back then, you had less to lose. Now, you have something worth protecting. Along with success comes a growing sense of caution. Now, you’re invested in the status quo.

But too much caution is deadly for entrepreneurs. That’s best left to the professionals, namely, your attorney and accountant. They’re professionally trained to eliminate risk. Once you start thinking the way they do, your entrepreneurial spirit—the driving force behind your business—starts to dries up.

If you want to stay successful, you need to keep your edge. That means taking risks. Carefully calculated risks. Risks with a high probability of success.

So yes, you need to evaluate prospective risks thoroughly. But sometimes, the evaluation process becomes a reason for stalling. It’s something I see all the time in my small business peer groups.

Realistically, we can’t expect to obtain all the data needed to make a 100% foolproof decision. It’s tempting to delay taking action because we continually want to “see more” facts and information. Don’t be a “Seymour”…when it’s time, take the plunge!

Or, in the words of iconic business expert Tom Peters: “Ready, fire, aim!”

Okay, maybe that’s a slight overstatement. The point is, what you don’t want to do is “get ready…aim…check your sites…check the wind…re-aim…check the elevation…and fire.”

If you do that, by the time you finally get around to squeezing the trigger, your target will have moved out of range. Or someone else will have bagged it first. Opportunities are transient things. You have to seize them when you see them.

If you have goals, you’ll have to take calculated risks to achieve them. So, are you weighing some risks now? What’s keeping you from moving forward? What will it take to move you toward achieving your goal?

If you’ve been stuck in place for a while, request my free Goal-Setting Worksheet, and take a first step toward taking action. Don’t be a Seymour. Email me at Ray@ProPres.com.

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Generations in the Workforce

Generational Workforce

One of the advantages of running a small business is that you can manage your employees on an individualized basis. A savvy boss identifies each worker’s hot buttons and work style, and manages accordingly. And if you’re super-savvy, you’ll factor in the cultural generation your employees belong to as well.

Like it or not, the era we’re raised in shapes our attitudes and behaviors. While stereotyping is not a good thing, several recent workplace studies indicate that employees of the same generation often share common values and traits, which set them apart from other generations.

This is information you can use to keep your employees motivated and challenged. You can also use it to create a more harmonious, collaborative culture. Because when employees clash or fail to communicate, it may be generational differences at work.

We’ve been discussing this topic in my small business peer advisory groups. After measuring some of the research against our own managerial experiences, these are the profiles we agreed on regarding different workforce generations.

Generation Y (aka Millennial) Workers (born 1978-1997) – Chances are, the youngest members of your workforce are adept with technology and most comfortable when multi-tasking. They’re fluent in social media, but may need guidance setting boundaries. Many Gen Y’ers chaff under rigid management, so if you want to keep them happy, offer a flexible work environment. They enjoy working in teams, but prefer communicating via brief emails and voicemails rather than traditional meetings.

Generation X Workers (born 1965-1977) – Many Gen X workers tend to be independent minded. They may question established work processes and challenge the status quo, which can either be a healthy thing or a source of conflict with colleagues. Gen X’s gravitate toward flexibility and informality (they also tend to look at meetings as a waste of time), but do want feedback and recognition for a job well done.

Baby Boomer Workers (born 1946-1964) – Typically, Baby Boomer employees work hard in the conventional sense, and are proud of it. Boomers tend to measure dedication in terms of putting in long hours (after all, they were the inspiration for the term ‘workaholic’). Boomers often prefer communicating face-to-face or via meetings rather than electronically, and would rather be rewarded with a bonus than comp time.

One generational group isn’t better or harder working than the other; it’s more a matter of style. However, by recognizing what makes different generations tick, you can manage and motivate more effectively and get the best from all of your people.

One key thing to remember: you belong to one of these generations, too, and it undoubtedly impacts your managerial mindset to one degree or another. The more open you can be to work styles unlike your own, the more it can benefit your business.

Employee differences enrich your workforce, and generational diversity is a good thing. It’s your job to ensure that everyone is working toward the same goal, even if they’re getting there by different routes. (Speaking of goals: be a savvy boss and request my free Goal-Setting Worksheet! Email me at Ray@ProPres.com.)

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Tracking Critical Numbers

How often do you review your critical numbers, those all-important figures that indicate how your business is doing? Do you wait until the end of the month, quarterly, or year to find out where you’ve been and how you’ve been doing? Or do you keep a constant eye on them?

And what numbers are you measuring and tracking? Because what’s truly ‘critical’ varies for every business, and sometimes it isn’t what you think.

Take profit and loss statements. They’re universally recognized as a key measurement tool, but they’re not without limitations. Because they’re historical snapshots in time, they don’t tell the whole story or reflect the here and now. They don’t tell you where you are going, until sometimes it’s too late.

As you know, I’m all about planning ahead. But you can’t do that effectively without knowing where you are and understanding your day-to-day progress.

So don’t wait for your financial statements to become available to assess the state of your business. Use other numbers closer at hand to keep a pulse on how it’s going. Like…

Cash on Hand – Cash is King. Do you know your cash, the cash you expect to collect in the short term, and the bills that you must pay?

Bookings – The orders you receive, and in some cases, the number of quotes you issue, reflect your success rate. If your bookings, quotes, or proposals are down, you can anticipate that you will have less business coming in and therefore less receivables and cash.

Order Backlog – Do you keep track of what’s in your pipeline?  Is your backlog made up of backorders or late shipments or fulfillment? While backlog becomes cash, remember that this is also a measure of service level. I often tell the story of a busy restaurant that only has four waiters, but really needs five. Pretty soon, they will only need three.

Inventory – If you have stock, how well do you know your actual inventory?  Wrong inventory estimates will throw off your profitability expectations. Inventory lower than your expectation means your cost of goods sold is higher than you expect or your selling prices too low, which results in a reduced gross profit percentage.

Open Purchase Order – Some people call this ‘open to buy.’ Are your open purchase orders in line with the business you are getting or expect to get?

Service Level – How do know or measure you are doing a good job? Keeping tabs on service levels is essential to continued success (see ‘Order Backlog’ above!).

Payroll vs. Revenue – Is your workforce becoming more less productive? Or is your business down? This is a quick and dirty test and that will ultimately show up your cash. Tracking payroll and revenue side by side tells you at a glance which way you’re headed.  If your revenue is up and payroll is down, life is good. If the opposite is true, you must find a way to change that!

In addition, some critical numbers may be meaningful only to you.

For example, one of my peer group members is a builder. He keeps a close eye on, of all things, his site managers’ monthly receipts from Home Depot and Lowe’s.

Why? Because if his crews keep running to local stores for supplies, they’re not properly planning ahead. It reflects their efficiency, which in turn impacts everything from customer satisfaction to profitability.

The same applies to forecasting future market conditions. One RV dealer I know keeps an eye on the fur industry. If fall and winter fur sales are high, he predicts a booming spring RV market. To him, it signals that consumers are confidently buying luxury items.

So ask yourself, what measurements are particularly meaningful to your business, both internally and externally? Make appointments with yourself to check these numbers on a regular basis. Don’t wait for P&L statements. The most critical numbers are right at your fingertips.

When it comes to numbers, are you on your game? Ask for my 10-question Financial Tracking Worksheet. Email Ray@propres.com for a copy.

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Avoiding Growing Pains

How to Avoid Organizational Growing Pains

By Ray Silverstein

When it comes to growing a business, is it possible to experience too much of a good thing? Yes, it is. And while you might think this would be a good problem to have, think again. Many times this can put you out of business.

Too-rapid growth is actually more dangerous to a business than no growth at all. While we tend to envy ‘overnight successes,’ research shows that growth exceeding 25% per year puts a business at risk of failure.

Just consider all the demands that an unexpected growth spurt would place on the various facets of your business:

Financial – Suddenly, you have big orders to fill, but not enough inventory to do so (or people-power if you’re in a service industry). Nor do you have the cash on hand to purchase what you need (or to hire who you need). Plus, getting credit is trickier these days (especially for service businesses that don’t have hard assets to offer as collateral). Purchase order financing is a possibility, but it is almost impossible to obtain and very expensive.

Personnel – Regardless of what you sell, you’ll need more workers to push your products or services out the door. But you don’t yet have the dollars needed to meet a rapidly-expanding payroll, not to mention the acquisition costs of bringing on new employees. Speaking of which, you’ll be so busy, you won’t have the time to make wise hires or train your newbies properly.

Morale – Because you’re short-staffed, your employees are constantly under the gun. Even dedicated workers can only give so much for so long before they start to burn out.

Workflow – If you don’t have adequate technology and processes in place when business explodes, what you do have will short circuit your ability to service or produce. Now you have a new fire to put out, and even less will get done.

The end result is: orders will go unfilled, and service will suffer. Customers will lose patience and walk. And remember, business that’s lost due to service issues is very hard to win back.

Picture a tiny, start-up restaurant that unexpectedly receives a great review from a trendy food critic. Suddenly, it needs five or six servers to wait on the nightly crowds, but it only has four on staff. Service plummets; waiting time skyrockets…and unless management makes some quick fixes, soon it will only need three.

Manage Potential Growing Pains

You may think this will never happen to your business, but it may be sneaking up on you, on a smaller scale. My point: keep a pulse on your activity and plan ahead. Know Thy Business. Build on your strengths, shore up your weaknesses, and attend to these key areas now:

Financial – Lay the groundwork for acquiring credit in advance. Develop a relationship with your banker. Build a good credit history. Study your numbers and get them to a healthy place.

Personnel – Always know who your next hires may be. Think of your workforce as a major/minor league system. If you’re continuously scouting for talent, you’ll be halfway there when it’s time to hire. Your minor league is a list of people you believe have the right attitude and skills to do the necessary work.

Morale – Nurture it always. Build good communication habits with your employees. And remember, a little personal appreciation goes a long way.

Workflow – No one wants to incur the expenses of upgrades until they’re absolutely needed. But every new system has learning curves to master and bugs to work out, so who can afford to wait until crunch time arrives?

Finally, learn to recognize the symptoms of growing pains. An easy way to get started: use my Growing Pains Diagnostic Test to conduct a DIY five-minute checkup. Just email Ray@propres.com and request a copy. Do something easy and healthy for your business today.

 

About the Author: Ray Silverstein is President of PRO, President’s Resource Organization, a network of entrepreneurial peer advisory groups in Phoenix and Chicago.

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President's Resource Organization - Duct Tape Marketing

Duct Tape Marketing

Duct Tape Marketing

      John Jantsch, reviewed by Ray Silverstein

Michael Gerber states, “This book is just like its namesake–Duct Tape–it’s good, incredibly smart, amazingly practical, and immensely sticky stuff.”  I found the book to be a good basic outline of a marketing strategy and it had many useful hints.

Everyone thinks their plight is unique, “Why is it so hard to market my business?”  “But what if I told you, no matter what your business claims to do or provide, you’re actually in the marketing business.  That’s right–every business is actually a marketing business.”  “You simply can’t afford to be no good at marketing if you plan to stick around and grow your business.”

“Marketing is getting people who have a specific need or problem to know, like, and trust you.”

Many small businesses do copycat marketing.  Copycat Marketing is a surefire way to guarantee that your marketing will fail.  Copycat marketing simply reinforces that you are the same as everyone else.

Another practice by small business is Ostrich Marketing.  Ostrich marketing is practiced by owners who simply have no idea what to do with marketing, so they do nothing–they stick their head in the sand and hope.

The primary activity in Duct Tape Marketing is to narrow and focus.  The lead generation is a two step process.  What do you think it would mean to your marketing activity if you had just five hundred highly qualified prospects and your only job was to get them to know, like, trust, and contact you?

The following are the steps for Duct Tape Marketing:

Step #0.  State Your Primary Marketing Goals for the Year.  Until you can get very clear about what needs to happen in order for your marketing system to be successful, you will never get there. One year from today, what will your business look like?  How will it change?  How will it grow?

Step #1.  Describe Your Ideal Client.  Carve out a narrow target market or narrow market segment and find out everything you can about what people in that market segment want to buy and why they want to buy it.  Build a marketing strategy just for this market and make sure that the world hears that you are better at serving that market than any other business.  Describe the ideal client and market as though he or she is sitting across the table from you at this moment.

You can choose to attract clients that value what you offer, view working with you as a partnership, and want you to succeed, but only if you have a picture of what that ideal client looks like.  Identify, describe, and focus on a narrow target of clients or segments that are perfectly suited for your business.

One of the easiest ways to start to get this picture of who or what makes an ideal client is to take a close look at the customers your business has attracted to date.

Physical Characteristics:  Are, Employment Status, Gender, Occupation, Income, Education, Industry, Number of employees, Type of business, Geographic scope of business, Revenue levels.

Emotional Characteristics:  Discovering common emotional characteristics is more of an art than science.  What you are looking for are things like values, fears, desires, and goals.  What do they want out of life?  What are they not getting?  What do they need to know to feel comfortable?  What is holding them back?

One of the best way to accumulate this type of information is to retrace many of your sales calls, including the ones where you did not get the results you had hoped for.  Another clue is to understand lifestyle patterns of your Ideal Prospects.  Find out about their hobbies, interests, books and magazines they read, musical preferences, and travel tastes.  This can provide a deeper glimpse into what your Ideal Prospect really cares about.

Know, Like and Trust–It’s a fact that people often like people who have the same interests.  All things being equal or unequal, a buying decision will tip to the business or salesperson who the buyer likes the most–It’s called human nature.

Without a need or problem, you don’t really have a market.  So, what’s the problem?  What are your customers attempting to solve when they buy your products or retain your services?  You don’t sell goods and services, you sell solutions to problems.  What you really sell is peace of mind, status, pain relief, etc.  State this revelation as bluntly as possible, and your marketing business will benefit immediately.

A guiding principle of marketing is the ability to charge a premium for your products and services within a chosen target market.  You must determine if this market values what you have to offer enough to pay a premium for your expertise and understanding of this given market.

Factors to consider if it is a viable market:

  • Is the market large enough to support your business growth goals?
  • Can you easily promote your business to the decision makers in this market?
  • Does this market value what you do enough to pay a premium?

When you are searching for a target market that is hungry for a solution, there are three questions that must be considered:

  • Do they want what I have?  It does not matter if they desperately need what you have.  If they do not want it for one reason or another, then you are sunk.  People rarely act to their own benefit unless they want to.
  • Do they value what I do?  You must look for people who are already investing in the type, or at least the category of service you have.
  • Are they willing to pay a premium for what I do?

The Ideal Prospect Profile:  Using the information you have gathered about an ideal customer you create an Ideal Prospect Profile.  This is one or two paragraphs you write that describe a picture of your ideal client, almost as though you were describing someone sitting across a table from you.

Try this formula:  Physical description+What they want+Their problem+How they buy+Best way to communicate with them=Ideal Prospect.

Action Steps:

  1. Look for common characteristics such as age and gender among your best clients.
  2. Uncover a common frustration among your target market.
  3. Write a description of your ideal target market in terms that are easy to communicate.
  4. Determine whether your ideal target market is large enough to support your business.

Step#2.  Write Your Core Message Points.  Uncover three or four unique benefits that your business or product can provide to your ideal target market, and then make these points of difference your central marketing themes.  If need be, change your entire business model to take advantage of an opportunity to serve a narrow market.

Get  Out of the Commodity Business.  You’ve got to uncover and communicate a way in which your business is different from every other business that says they do what you  do.  You’ve got to find a way to stand out and stake your claim on a simple idea or position in the mind of your prospective clients.  This claim must be powerful and intentional.

Find something that separates you from your competition become it and speak it to everyone you meet.  Quality isn’t it, good service isn’t it, fair pricing isn’t it.  The difference needs to be in the way you do business, the way you package your product, the way you sell your service, the fact that you send cookies to your clients, the fact that you show people how to transform their lives–It’s in the experience you provide.

The Core Message Process:

  • Discover capture, and commit to a unique position.
  • Create a Marketing Purpose Statement.
  • Turn your purpose statement into a Talking Logo.
  • Craft a simple Core Message to use in all of your marketing.

It’s worth noting that being different for difference’s sake isn’t enough.  An identifiable target market must value the difference!  Example:  Trust With Your House Keys.”

These are some ways to communicate your core message:

Unique habit, Customer service, A way of doing business, A memorable personality.

The best way to get your positioning is to ask your clients.

  • Why did you hire us in the first place?
  • What do we do that others don’t?
  • What’s missing from our industry as a whole?
  • What could we do that would thrill you?
  • What do you find yourself simply putting up with in this industry?
  • What would you do if you owned a business like ours?

What you really sell is what the eventual buyer think they are going to get from your product or service.

Your Marketing Purpose Statement:  This statement is not meant to be communicated to your clients, but rather is meant to be the basis for your marketing and customer service activity.  Your Marketing Purpose Statement should become not just a goal but the overriding purpose for the business.  A powerful Marketing Purpose Statement should give you and your staff a vision for the future of the business.

Create a Talking Logo:  This is a short statement that quickly communicates your firm’s position and forces the listener to want to know more.  The Talking Logo is created in two distinct parts.  Part 1 addresses your target market, and Part 2 zeros in on a problem, frustration, or want that market has.

Example:  I show small service professionals how to triple what they charge.

Step one:  Create a compelling answer to “What do you do for a Living?” one that focuses on a benefit or solution and forces them to want to know more.

Step two:  Prepare a simple supplementary answer that tells them the unique way you get them that benefit or solution.

Your Core Marketing Message:  This is the message all of the activity you have performed to create. Now that you have discovered the marketing purpose for your firm and answered what you do for a living, it is time to fashion the creative marketing messages you will use to communicate your purpose in a way the clearly demonstrates the benefit of doing business with your firm. Example:   Electrical contractor: Marketing Purpose Statement:  We want to be known as the one electrical contractor who will show up when we say we will and do the work right the first time.

Talking Logo:  We help homebuilders eliminate callbacks.

Core Message:  Wired Right on Time.

Step #3.  Develop Educational Marketing Materials:  Create a list of the educational marketing materials your ideal client might find helpful in an attempt to understand the value that your firm has to offer.

Attempt to move your target prospects along a logical path toward a group of offerings geared to addressed the various stages of client development.  This gradual, trust building approach allows businesses to charge much more for their products and services while enjoying a much greater relationship with their clients.

Step #4.  Outline Your Lead Generation Strategy:  Create a list of every conceivable way you can reach your target market.  This is not limited to mail, public relations, referrals, e mail or advertising.

The Client Stages Defined:

  • Suspects–     The list of people who fit your target description.
  • Prospects–     The list of people who have responded to an offer for more information.
  • Clients–     The list of people who have tried your product or service.
  • Repeat Clients–     The list of people who have upgraded or purchased more.
  • Champions–     The list of people who tell others and sell for you.

Marketing Offer for Suspects:  Your suspect database responds to offers of complete information designed to help them solve a problem or answer a question.  These take the form of free reports, tips, white papers, workshops, demonstrations, evaluations, newsletters, books, guides and checklists.

Example:  10 Things You Must Know Before You Hire a Roofing Contractor.

Marketing Offer for Prospects:  Once your suspects raise their hands and request your fee report, they are giving you permission to market to them.  Your prospect list is now ready for an offer to become a client.  In many cases this requires a low cost or trial service offering to gain the ultimate trust needed to become a premium client.  You may need to create an introductory product or version of your service that can be priced low enough to offer a low barrier to becoming a client.

Your Clients Become Premium Clients:  Once your clients move to premium status, the focus is to also find specific ways to turn them into a referral source.

Premium Clients Become Champions:  Some amount of your clients will automatically become champions.  These are repeat clients who voluntarily look for way to promote your business.  In effect, this potent group can become your informal sales force.

ACTION STEPS:

  1. Understand the client stages.
  2. Develop marketing, products, and service offerings that address every aspect of the marketing funnel.
  3. Map every point of customer contact and look for holes in the funnel

Produce Marketing Materials That Educate:  Done well marketing can eliminate the need to sell.

Educate, Don’t Sell.

Create a Marketing Kit.  This should include your case statement, your difference summary, your ideal client/customer description, your marketing story, and your offerings.

Your Case Statement should address the following:

  • A statement of a challenge, frustration, or problem that your target market experiences.
  • An image of what life is like when the problem is solved.
  • How they got here in the first place.
  • A path for them to follow.
  • A directed call to action.

Your Difference Summary:

Don’t tell them what you do; focus on how you do it.  Tell them about your unique approach, your processes, and the little things you do.  If you have studied your competition and you know what your target market craves, make a point to summarize you solution.

Your Marketing Story:

Tell them your story in an open, honest, and entertaining way, and you will win their hearts as well as their heads.  The ability to connect by way of personal stories is one of the greatest advantages that small businesses possess over big businesses.  Most importantly—stories build trust.

Your Product/Service Offerings:

This page should outline the various services, products, and packages that you have available.  Clearly describe and detail the benefits of each.

Your Marketing Kit may also include Case Studies, Client experiences, Testimonials, FAQ, Processes and Checklists, Articles, and anything you believe would be of value to the prospect.

Marketing kits are not intended for mass, direct-mail campaigns.  They are much more effective once you have generated a lead and want to proceed to fully educating the prospects.

MARKETING IS MOSTLY YOUR JOB, BUT GET YOUR ENTIRE COMPANY INVOLVED.  EDUCATE THEM!

LEAD GENERATION PROGRAM:

Use a two step lead generation program whether it be advertising, direct mail public relations, web, etc.  This is simply to set into motion by advertising an offer, such as a free how to report, tip sheet, industry insider scoop, or survey results.  The goal is to have suspects request information and thus giving you permission to market to them.

Step #5.  Describe Your Sales/Education Process:  Write down the steps you will take when a prospect contacts your business by way of one of your lead generation strategies.

Have a process for Discovery, Presentation and Transaction.  Sales should not be off the cuff, but a planned process.  Create several questions you will ask prospects during the discovery phase that will allow you to get a feel for how ready they are to understand the need for your products or services.

The Discovery phase may be done over the phone.  The Presentation or Internal seminar is a planned approach.  When you take control of the meeting and present your points in a structured way, you will either connect or you won’t, but when you do it will be the right connection.

The Presentation consists of weaving the key elements into a concise message that includes:  The Problem, Your Solution, Your Core Difference, Your Story, A Real Client Example, How You Work and The Expected Results.

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