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Getting your Company Lean, Mean and Efficient

Are you a hard core strategist, or just playing at strategy?

Bertie du Plessis

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Left, right and centre I hear business owners talk of their “strategies.”  It sounds as if everybody can do it. Yet when last can you remember a strategy break away that actually produced real results?

Yes, it’s easy to set revenue and profit targets, then make plans how to market and sell better so that we can increase revenue.  It’s as easy to increase our margin and therefore our profit by cutting costs.

So, there you have it, what could be clearer than that?  Market better and cut costs – that’s your strategic planning. All that’s needed to complete your strategy weekend is a powerful rah-rah session from you, the CEO.  Usually along the lines of: “If you can dream it, you can do it!”  So, if the strategy fails it’s an issue of everybody not having pulled their weight and the search for culprits begins. What a cheap shot, don’t you think?

Business strategy in a nutshell

Unfortunately what you have been doing is at best an exercise in efficiency and optimisation:  Trying to make your company more profitable by being more efficient. You can call it strategy if you want, but it misses the really difficult nut to crack.

Hard core strategy goes beyond an exercise in efficiency and optimisation because it requires you to take a long, hard, critical look at the stuff that you must do to get you company lean, mean, efficient and functioning at its optimum.

Let me explain.  There are three indispensable features of efficiency and optimisation that you need to execute if you want to remain in business:

  1. You need to deliver quality
  2. You need to remain close to your customers
  3. You need to benchmark to assure that you don’t fall behind your competitors.

These are all good things that you must do and nobody that ignores these will remain in business for any length of time.

From ‘what if’ to success

Hard core strategy takes the opposite tack. Hard core strategy asks “What if?” questions:

  • What if my quality is too good? What if there is a low quality competitor waiting to wipe me out?
  • What if I am too close to my customers so that I have become blind what newcomers to the market want?
  • What if my benchmarking let me improve, but in the process I destroy my differentiation in the industry?

Hard core strategy questions the assumptions of everyday business efficiency. Let me give you some examples.

Can quality ever be a bad thing?  Yes, if the client can make do with less. Sometimes, would you believe it, they just don’t care! A good example is the media industry. Newspapers had well designed, cool websites but then came this crazy individual Craig Newmark with Craigslist and destroyed the most profitable part of newspapers, the listings advertisements.

Craig hat crappy design quality, but he single-handedly destroyed an industry. We all know Gumtree, another good example that you don’t need crisp well-designed typography to take on the big boys! Do yourself a favour and go to www.vg.no ( I don’t expect you t read the Norwegian!) and see how this website looks that is most successful in attracting, readers, keeping them and monetising.

In the high-tech industry I have seen so many companies hell bent on competing on quality and going out of business, instead of saving on the hight costs of quality and competing on a different, less expensive value proposition.

Keeping customers close

This brings me to the second point: How can keeping close to your customers be a bad thing?  Clayton Christensen convincingly demonstrated this in one of the two or three business books that the great entrepreneurs in the world such as Andy Grove and Marc Andreessen recommend: The innovator’s dilemma.”

He treated the hard drive industry and earth excavating equipment. In both cases the powerful incumbents were so close to their customers that they did not recognise a new market opening up. The guys making hard drives for desktops heard their clients telling them, bigger, bigger, more memory, faster, faster.

In the mean time the laptop market was opening up and there bigger was a problem and customers would willingly sacrifice speed for smaller. The big hard disk manufacturers lost control of the industry because they were eaten up by the poorer quality products. In the end they did not even retain their hold in what they were good at! History repeated itself when flash memory developed.

None of the incumbents understood how important super mobility and super small was, even though that was how they conquered the big hard drive manufacturers! Hard core strategy asks: “What if the client does not know best?!”

Finally, what is wrong with benchmarking?  First of all there are some features where you should be worse than your competition! Better “in every aspect” costs money, too much money. It means that you sacrifice margin and therefore profits!

Secondly, if bench marking results in you erasing the differences between yourself and the competition, you destroy your ultimate competitive advantage, the holy grail of strategy: DIFFERENTIATION.  Hard core strategy requires you to say no to each and every improvement and pick those improvements that will enhance your differentiation.

Sometimes you should even intentionally scale down on features where you are too good without them contribution to you differentiation.

Anybody for hard core strategy?

Bertie du Plessis founded his successful consultancy firm, MindPilot, 17 years ago. He names several of South Africa’s blue chip corporations among his client list and has taught as a lecturer and guest lecturer in six different disciplines at tertiary institutions. His fin24.com blog is the most read business blog on the 24.com domain. Visit Bertie Du Plessis's website for more information.

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Strategy

4 Ways To Find Your Own Business Style

The only way to develop a business style is step-by-step over time.

Timothy Sykes

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Finding a style in finance will define how you react to changes and how you approach new situations. It’s as important in business as it is in stock trading. Developing a business style and developing a stock trading system are extremely similar pursuits.

But I’m not going to pretend that it’s easy to do. It will take time and you do have to be willing to work at it.

Here are my four ways of finding your own business style.

1. Get rid of your expectations

You can’t force anything to work. It’s necessary for you to be flexible when it comes to finding a business style. Begin by letting go of any expectations you have before trying a new style.

Prior to attempting a new style, you have to be willing to go into it with no expectations. You never know what you’re going to find.

Related: 8 Steps to Building Your Business According to the Lifestyle You Want

2. Track your movements

Some things are going to work and some things aren’t going to work. I always tell my students in the Tim Sykes Millionaire Challenge that they should keep records of the things they’re doing. Keep these records as detailed as possible because attempting trial and error can quickly lead you in circles.

Don’t fall into the trap (as I did in the beginning) of trying the same thing multiple times because you never tracked the results.

I keep large spreadsheets with notes of the various styles and systems I’ve tried in business. Business mistakes can be costly, so you need to do everything you can to avoid making them.

3. Look at what others are doing

business-options

I refuse to believe that someone is doing something truly unique. The moment someone makes a breakthrough in business there are a hundred people replicating the same things. And that can be a powerful tool. Consider what others are doing and see whether you can learn something.

It’s why I also advocate finding a mentor to help you out. They’ll be able to help you out and you’ll benefit from their enhanced experiences in business.

Again, track what you’re taking from other people so you know whether something is working.

Related: I Started Saying ‘No’ To These 6 Things. My Life And My Business Got A Lot Better

4. Refine what you do

Rarely will anything in business work the first time. However, your first attempts will give you a good benchmark as to what you need to do next.

You should never be satisfied with what you have, even if it’s working. Always work on improving your business style. I believe this is the most important thing because it also teaches you how to adapt to changing conditions over time.

Last Word – Constantly Growing

There’s no step-by-step guide for how to develop a business style. The only way to do it is to obey the fundamentals and then develop everything over time.

Even though the process is long, you’re guaranteed to learn a lot of lessons and gain from a huge number of experiences over time.

This article was originally posted here on Entrepreneur.com.

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Strategy

6 Questions You Should Be Asking When Coaching

Top athletes have coaches because they’re winners. Business leaders should be the same.

Nadine Todd

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Dr Marshall Goldsmith

Whether you’re a CEO looking for a mentor, coaching your management team, or structuring a coaching programme for your managers to implement, there are six questions that can help anyone get better at anything.

The expert

Dr Marshall Goldsmith is a best-selling author and world-renowned business educator and coach. He has coached top CEOs, including Alan Mulally, former President and CEO of Ford Motor Company.

The key to a successful coaching programme is simple dialogue and establishing responsibility. The person being coached must understand and agree that success lies in their hands. They must take responsibility for their actions.

Related: How Business Coaching Can Help You Achieve Your Goals

The method

Once every few months, have a direct coaching session. Ask (or answer for yourself) these six questions:

  1. Where are we going?
  2. Where are you going?
  3. What are you doing well?
  4. Do you have suggestions for my improvement?
  5. How can I help you?
  6. So you have suggestions for me?

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Strategy

4 Ways To Develop The Leaders You’ll Need In The Future

One of the most challenging aspects of leadership development is consistently and effectively identifying the next wave of leaders.

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One of the most challenging aspects of leadership development is consistently and effectively identifying the next wave of leaders.

It can be easy for those at the top to forget that eventually someone will have to take their place at the helm. And ignoring that fact has lead to issues with succession planning, unwanted turnover and other challenges in leadership development in many organisations.

2016 High Impact Leadership research from Bersin by Deloitte asked 2,422 HR and business leaders from around the world how well they believed they could discover new leadership talent. Just 35 percent of respondents said they were above average when it came to successfully identifying and developing leaders.

To understand why this is, consider the typical leadership development paradox. Traditionally, the first step is to choose who has leadership potential, then develop their skillset. Logically, however, this makes little sense.

How is it possible to identify effective leaders if employees have yet to receive any type of leadership development?

Here are four ways to properly identify better qualified candidates for leadership positions:

1Stop choosing potential leaders based on unrelated skills

Gallup’s 2015 State of the American Manager Report, which studied 2.5 million manager-led teams in 195 countries, found that the top two reasons employees are promoted to management positions are because they were successful in a non-managerial role or because of their tenure with the company. Neither of those criteria have any proven correlation with leadership skills or relevant experience.

Create a better means of measuring for true leadership potential. Look at the culture of the organisation and envision what it would look like for someone to lead by those values.

Also consider how successful leaders evolved over time in the organisation. Then use that information to make a list of recognisable traits to look for as signs of leadership potential.

2Broaden leadership development to more employees

People learn and grow at their own unique pace. Requiring that an employee reach a certain position or be with the company for a certain number of years before they’re offered leadership opportunities holds back those who might be ready for more responsibility now. Or even worse, it might push those who aren’t yet ready into leadership roles.

Instead, let leadership development be a company-wide initiative. This gives more people the chance to take the next step in their career. It also creates a larger pool of possible great leaders to draw from across the organisation.

3Track progress and growth

Track progress and growth

There’s no way of knowing who is ready to step up and lead unless development is monitored. Remember that this is a process. Employees need feedback from their mentors and coaches to know for certain what skills they’ve mastered as well as where there can still be improvements made.

Develop a way to assess progress for different leadership positions, and be clear with employees and coaches about what success would look like in different situations. For instance, explain what is expected of a first time project leader.

Get everyone on the same page about the developing leader’s responsibilities and how that should guide their team.

Then collect thorough feedback from all those involved. Ask the leadership candidate what challenges they faced as well as where they think they thrived. Pose the same questions to those they supervised and organisational mentors.

Over time, this will reveal patterns that make it easier to identify who is best suited for leadership in the long-term.

4Focus on continual leadership development

There is no such thing as too much experience. There is always more that can be learned. After leadership candidates have been identified, continue to nurture them. This keeps employees from feeling that they have plateaued, which is unfortunately common.

The 2014 Insigniam Middle Management Survey: Middle Management’s Critical Role In Saving Company Innovation looked at responses from 200 middle managers from around the world. It found that only 15 percent of managers believe they will ever be promoted to the next level of leadership at their company.

Whether intentionally or not, employees who have proven their leadership abilities are being told that their leadership journey is over – and this hurts both them and the organisation. Encourage a steady stream of highly trained and skilled leaders working their way up by demonstrating that there is no end to development.

In order to clearly see who the next wave of leaders is going to be, employees need to be given the chance to hone and exercise their skills.

That means redefining how leadership potential is identified and providing each employee with the chance to develop personally and professionally.

This article was originally posted here on Entrepreneur.com.

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