Harnessing the Power of Business Roundtables

January 30, 2008 | Leave a Comment

As a business owner, how often do you have the opportunity to talk one-on-one with other owners or executives about ideas? Many small- and medium-sized company owners and executives frequently feel they are working in a vacuum because they rarely have the opportunity to exchange ideas with peers and other professionals. Business roundtables enable owners to cash in on the roundtable’s pool of experience and the expertise of skilled facilitators.

Roundtables typically are comprised of business owners and CEOs who come together to share ideas, discuss challenges or concerns, and to learn new ways to approach old problems. They are different than advisory boards that bring a group of professionals representing different areas of business together to assist one company in making decisions and to offer advice in steering the business into the future. Executive roundtables are proactive and interactive.

Most business roundtables group similar companies together so business owners interface with others dealing with challenges and issues within their businesses. For example, small and medium companies are grouped together because they share commonality in size, while larger companies meet separately.
Some roundtables even take this process a step further, and group companies by industry — service companies, for example, would be grouped separately from manufacturers or other product-oriented companies. Nevertheless, good facilitators possess the experience to avoid grouping companies competing in the same industries in order to spur discussion on critical business issues.

Concepts and ideas are introduced at monthly meetings where members follow a 12-month curriculum. Homework also is assigned to roundtable participants who are asked to complete it by the next meeting, along with any questions for discussion. Since adult learners must use new information for it to “stick,” homework assignments are critical for the adult mind to retain new concepts.

Nothing about the way a business roundtable is conducted is left to chance. Members attend meetings offsite to hold distractions to a minimum. Each meeting follows an agenda so time is used productively and wisely. Each member is asked to commit to the group and make every attempt to attend each meeting. The presence of all members is key to the synergy that commonly accompanies business roundtables. Many owners even keep in touch long after the roundtable is over – a sign that these relationships offer much more than camaraderie.

Since there are many members to share the fee, the cost to members is a fraction of the cost that a one-on-one business performance consultant would charge. At the suggested $1,000 to $4,000 per advisory board member per meeting fee, business roundtables look like a steal at between $400 and $600 per month.

And that’s only one of the many benefits owners and CEOs find they have a safe haven to discuss issues that weigh heavily on their minds. They soon discover and learn, from others who have experienced similar issues that they are not alone in their quest for top talent, increased productivity and decreased costs. Besides being an objective sounding board for members’ ideas, the group also can be an accountability factor. If an owner says he/she intends to implement systems within his/her sales force, it is almost certain that the rest of the group will ask the next time they meet how his/her systems are coming along.

The results roundtables elicit can be spectacular! Some members have reported double-digit profit increases since implementing ideas that they always intended to put into practice, but had not done so until joining the roundtable. Others note that personal productivity has increased as a result of a more focused approach.

Family businesses have found a unique use for business roundtables. Before handing over the reins to the family business, junior members attend the one-year course to learn how a business operates. This head-start gives these soon-to-be business owners the leg up on other new entrepreneurs. According to one family business owner, “It’s hard to place a value on experience.”

How to Make Performance Measurement FUN!

January 29, 2008 | Leave a Comment

Measuring employee performance can be a tricky business. While there are many schools of thought regarding how to conduct the performance review, most everyone agrees that a review must be conducted regularly, and that some type of measurement must be built into the system. If you don’t have the measurement aspect in place, how do you know what to assess?

Take Jane, for example. She has worked for your company for five years and is considered a loyal, good employee who always gets her work done on time. However, upon closer examination, you see that her performance reviews or employee appraisals are based only on surface details. Although she asks for constant feedback, the only response she gets is, “You’re doing fine,” or “Thanks very much.”

Employees who expect and want to succeed in a crowded business marketplace want much more than simple feedback. Naturally, they want to know how they’re doing in their jobs in a general sense – “qualitative” measurement – but also want to validate how they contribute to the company’s bottom line – “quantitative” measurement.

The qualitative part is easy. Does the employee show up on time? Does he or she do what’s expected of them? Do they have great ideas? Do they go above and beyond the scope of their job?

Quantitative measurement or measurement by numbers is much more difficult, but is most commonly accomplished by measuring performance to the company’s goals or initiatives. For example, in a retail setting, factors like total sales, number of satisfied customers, number of retained customers and other areas are measured. Most often, each industry has certain performance measures, which impact a company’s bottom line. Each offers many opportunities to measure – and increase – performance. Each company has different factors, tasks or activities with regard to what is measured, so there is no book to follow in order to create these measures. Some industries that respond well to performance measures, include health care, auto dealerships, retail and manufacturing, just to name a few.

The greater key to quantitative measurement lies in how you do it. Think about it: can you get excited by being held accountable to find five new prospects in any one month?

Creativity is the answer, and performance measurement should be fun. Here are a few examples in which “numbers” were mixed with “creativity.”

March Madness

Western Michigan University in Kalamazoo, Mich., incorporated a sport’s theme into the way its staff handled new student admissions. March Madness is the familiar term for the NCAA Basketball Tournament in which sets of college teams compete for the national title. The theme not only emphasized the college’s passion for the game; it also described the fervor of activity each spring when prospective students inundate the school with applications for admission – hence the term, “madness.”

Based on the theme, the performance measurement culture incorporated feedback into the office’s daily activities – with huge success. The project began in the office mailroom where weekly performance feedback was having little, if any, impact on performance. To communicate accomplishments, the staff was content with posting a small, black-and-white line graph that detailed the staff’s performance. This provided group feedback and was updated weekly. Employees and supervisors paid no attention to the graph, and performance failed to improve.

Creativity was born! Based on the March Madness theme, the feedback graph was enlarged to a poster-sized, color chart with balls and hoops as symbols in place of bullets and plotlines. Think of USA Today’s graphs and charts as examples. Just this simple, small change resulted in increased interest in feedback and performance, additional ideas for process improvements, added social recognition and reinforcement, and improved performance.

Absenteeism

Although it might be considered a qualitative measurement, absenteeism in business is a very real, valid concern. Not only are employees evaluated by the number of days missed, but absenteeism contributes to loss profits. According to NovantHealth, 15 percent of the work force causes 90 percent of absenteeism. Emotional factors account for 61 percent of time lost, and the typical employee is absent eight days per year. Absenteeism costs employers 1.75 percent of an absent employee’s wages, and companies spend 5.6 percent of their payroll on absenteeism.

With statistics like these, you should be concerned, but what can you do to motivate employees and prevent absenteeism? Be creative!

A large hardware company introduced a lottery to reduce absenteeism. Only employees with no absenteeism for one month could participate. In every department, participants could win prices, such as a television, a bicycle and other gifts. Although some may consider this an isolated example, the results speak for themselves: there was a 75 percent reduction in absenteeism and a 62 percent reduction in costs.

Another company tried to find the answer through a game of non-gambling poker. Every day, employees who were at work drew one card, and those who worked the entire week drew five cards on Friday. The player with the best hand won $20. Due to this game, absenteeism lowered to 18.2 percent, and even when the game was played less frequently, absenteeism remained lower than previous numbers.

Applying These Ideas to Your Company

Industry examples illustrate creativity, but what can you do in your own company to make performance measurement fun?

•Begin by creating an employee committee to brainstorm ideas and submit three to five well-thought-out examples of games, contests or strategies. Just the idea of asking for employee participation is a positive step in itself, and once the ideas start flowing, they never stop. Even if your company is small, you still can ask two employees to form a team and come up with ideas.

Take baby steps. The old adage, “Walk before you run” is valid. Begin these kinds of measurement programs on a small scale without spending too much time in the planning and implementation stages. If something takes up too much time and you’ve lost productivity due to trying to be more creative than you need to be, the effort is a non-issue.

Think Outside the Norm. Just because you have a professional image doesn’t mean you can’t do something out of the ordinary. Again, the object is to be as creative as possible.

•Above all, assess your creativity and performance measurement techniques on a regular basis, or measure the measurement. Without some kind of evaluation built into the activity, you won’t know whether you succeeded and can’t figure out how improve for the future.

10 Things to Ask When Hiring a Consultant

January 28, 2008 | Leave a Comment

It would be cliché to say consultants are a dime a dozen … but in reality, they are! Why? Several reasons, most of which focus on company failures and layoffs. Finding a job is tough in a recession-oriented economy, so rationalizing the idea of going into business by becoming a “consultant” – or a hybrid of a consultant and perhaps another title – is getting easier and easier. People seem to understand the motivation behind working for themselves, admire the entrepreneurial aspects of the consulting lifestyle, and certainly comprehend the cost savings associated with hiring talent when you need it versus always having it around when you possibly can’t use it.

However, while there are many options in the consulting continuum, finding and choosing the one that most matches your needs is another story altogether. These days it seems you almost need a consultant to help you hire one!

What can you do to locate and find the consultant that will do the best job? Consider these 10 questions you should ask when hiring a consultant. Some of these are questions to ask yourself, and your company or organization, while others are intended specifically for the consultant.

Question #1:  Have I done my homework?

First, do your homework by understanding your needs so that you know how to set engagement expectations. Ask questions to assess your situation. What areas are not running as efficiently as possible? Have you carefully written out your business plan for the next three to five years? What is it going to take to realize your goals? Where do you see yourself in the future, and what will you specialize in at that time? This helps focus the discussion with your prospective consulting firm.

Question #2: What kind of consultant do I need?

Once you’ve assessed the situation, you next must ask what kind of help you need. Often a problem is actually a symptom of a larger issue. Make sure you are being honest with yourself. Consulting engagements only work when companies and people are ready to make necessary changes.

Question #3: Can’t I educate someone internally to handle the responsibilities?

Life-long learning is great, but is it really viable to think you can train someone within the organization to handle additional matters that fall outside the realm of his or her current knowledge? Will the resources spent on training be more than it would have been just to hire a consultant?

Question #4: Should I hire a “firm” or “individual?”

Okay, so you’ve made the commitment to hire a consultant, and are faced with two choices – firm or individual. What are the pros and cons of each? A firm brings you several options and schools of thought, while an individual brings learned knowledge from years of experience. Which is better? The answer probably lies in how consistent the consulting firm is in its approach to use the same staff each time you need help. With an individual, you always get the same person, but with a firm, changes in staff may occur. If this is important to you, and you think the consulting engagement will be long-term talk to a prospective firm about their turnover rate.

Question #5: Do I need a specialist?

Working with a consultant that is certified in a particular technology, holds a specialty designation, or is committed to a particular consulting field will reveal many benefits that a general consultant won’t. These professionals commit many hours and several thousand dollars every year to ensure their skills are up to snuff.  If you’re uncertain what a particular specialty is, ask the consultant to explain it and its significance to his or her work.

Question #6: Who will be the liaison to the consultant?

Even the freest spirit enjoys some order, and in the case of working with a consultant, someone within your organization must be appointed as the person responsible for working directly with the consultant or consulting firm. While the reasons may be obvious, consider the chaos that might ensue if several firm personnel were to ask the consultant questions or assign work without anyone prioritizing the list. You’ll end up with confusion and unproductive time.

Question #7: How much should I pay the consultant?

What is your own time worth? Consultants are in the business to make money just as you are with your firm or business, and to a consultant, any moment not spent conducting business is considered a loss. Ask the consultant about his or her rates, and be prepared to pay top dollar for the best talent. Network with peers in similar size companies to find out what they pay their consultants. If a return on investment (ROI) is critical, consider asking the consultant to work out a contingency deal based on results. This is becoming more commonplace in today’s competitive market.

Question #8: Does the consultant have to be local?

Not necessarily. Many companies enjoy a tremendous relationship working with consultants who are located across the country, and much of the business may be handled online or through conference calls with personal visits scheduled sporadically. Just because a consultant may be local doesn’t give he or she an edge, unless you’re looking for consultants who can “drop names” or assert influence in your local community.

Question #9: Should I interview several consultants?

Why not? Unless you are strapped for time, interviewing another firm can do nothing more than let you know you are making the right choice. Of course, if you have an established relationship with a firm that has just begun to offer specialty services, you are probably safe in presuming that their high customer service standards apply to their new consulting.

Question #10: Should I check the consultant’s references before hiring?

Absolutely. The best way to obtain a reference is to ask the consultant for a name of a client with whom the consultant did a similar engagement as the one you’re doing. If you’re hiring a consultant to update your technologies, you wouldn’t ask for a reference in human resource systems to offer an observation.

These are just 10 questions for consideration; the rest is up to you. Be smart and savvy, and understand that even though consultants may indeed be a dime a dozen, their actual net worth is based on how well the consultants helped you make solid, informed decisions and incremental changes that positively impacted your bottom line.

Are You Speaking Your Customers’ Language?

January 25, 2008 | Leave a Comment

No one would argue that competing for time and attention in today’s business marketplace is a difficult proposition. However – as if this alone wasn’t difficult enough – the company that truly understands the buying habits of current and prospective customers is the one that will most likely succeed in the long-term continuum.

Why? Knowing the reasons why customers purchase from your company is important for positioning your product or service for future sales. Moreover, the way in which this purchasing knowledge infiltrates other aspects of your business is key to customer recruitment, retention and business continuity.

Let’s say, for example, that you retained a seemingly satisfied customer who comes to you for advice or perhaps a product, yet you have never bothered to take the time to figure out why s/he comes to you year after year instead of taking his or her business elsewhere. Did you ever think about asking? Perhaps you thought about it, but were afraid to stir calm waters.

This customer is intelligent, and knows he or she could look elsewhere for similar services, but as it turns out, s/he implicitly trusts your judgment and advice, and truly believes you have rendered good service time after time. What the customer may not know is that you also offer other services or products that could benefit him/her. While you think you may have effectively communicated your company’s entire product or service offering to your customer, and these offerings appear all over your collateral materials and Web site, the customer, still, may never have received the message.

If you knew “trust” was the main reason the customer stayed, you could have cross-sold other products or services, and, in the process, tremendously improved your bottom line. Companies that understand the buying habits of customers can naturally – and easily – transition this knowledge into a more compelling selling proposition.

The bottom line is that you when you are speaking your customers’ language, you will be on the same communication wavelength, and will be able to easily hear clues that reveal your customers’ buying postures.

Look at this from another perspective: Why do you prefer to do business with one bank over another? Is it service, lower fees, location or something else? If bank executives knew why you chose their institution, they could provide more services or products that aligned with these reasons. In addition, bank employees who understand these preferences could be more knowledgeable or helpful in ways that are meaningful to their customers.

A good example of a company that is on its customers’ frequency is Amazon.com. If you’ve ever ordered from the retail giant, you would know that each time you log in, the merchant offers you many choices for similar products you’ve bought in the past. If you are into fitness books, the newest fitness book is likely to be offered to you. Statistics show this is an effective way to “sell” or market to customers.

We’ve all heard Customer Relationship Management (CRM) is a way to increase sales and manage customers, but is CRM really an effective tool for speaking the language, or is it just today’s trend of the moment? Dataquest, a unit of market researcher Gartner, reported that CRM services market totaled $22 billion in 2001, and had grown to well over $47 billion by 2007.

All the money spent on CRM doesn’t translate into future sales if your employees don’t understand why a customer makes the decision to buy. How do you effectively accomplish this, and to what lengths do you go to do it?

One Midwest design and research firm used a process called “video ethnography,” in which the firm videotaped customers while they were in the process of buying so they would get a clearer picture – literally – of the process. We certainly can’t shine the spotlight on customers 24/7, but you might try the following techniques:

• Don’t assume that buying is universal and predictable. Try to gather as much information about the buying or purchasing process as you can. Start from the time your customer decides to ask for a service or makes the decision to buy, and follow the sales process through to calling or contacting your company and making the purchase.

• Think beyond what you offer or are currently offering. Even though you might be selling a product, your customer may actually be buying for other reasons that have nothing to do with your product. Perhaps your straightforward business communication tips the scale in your favor. Or, maybe the customer buys from you because your guarantee is the best. If you think in terms of the purchase “decision,” it is easier to translate buying habits into future sales.

• Use multiple methods to gather information about your customers’ buying habits. Ask your employees to stay on the lookout for patterns in buying and record client or customer comments. Combine this information with customer surveys or other response mechanisms. You’re sure to spot trends within this combined feedback. Strategically leverage this knowledge and you are on your way to dramatically impacting your bottom line.

• Try to understand how people are using the product or service you sell. Understanding why customers buy and what the customer’s desired end result is can uncover opportunities or even new product or service markets. If you sell aloe Vera plants as a medicinal product and your sales increase by 10 percent in just one month, you may find that something is behind this activity. On further inspection, you may learn that a popular glamour magazine touted aloe vera as the next wrinkle defense. All of a sudden, you have a new market that wants to buy your plants.

Training an employee’s ear to carefully tune into the buying habits of your customers significantly increases your odds that the language you are speaking is music to your customers’ ears. The bottom line is that customers find and loyally buy from those companies that make customer concerns and desires priority one. Remember, you aren’t alone. Give us a call. We’ll help you develop a plan of action that can increase future sales, customer retention and buyers’ loyalty.

Winning the Cash Flow Battle

January 24, 2008 | Leave a Comment

Think back to the time when you were young. Remember when you saved your allowance, did odd jobs or relied on Grandma to give you the money to buy that really special baseball card or polka-dot hair bow? Your parents probably were supportive, yet benevolently instructive when they stressed, again and again, the benefits of income and savings.

What they may have failed to mention were two words that complement the entire scenario – cash flow. If you had proper cash flow, you would have enough money ready to go and ready to spend, instead of reacting to a potential purchase by trying to come up with the pocket change.
Today, the way we manage our businesses really isn’t any different than this somewhat dated scenario, yet companies sometimes forget about cash flow. The results can often be disastrous.

Think, for example, of the dozens of failed dot.coms in 2001. So many businesses banked on venture capital funds, spent the money on inventory, assets, employee salaries and had nothing left in reserves. It wasn’t uncommon to walk into a hip and happening Internet retailer on the west coast only to find three people doing the job of one.

With so many rainy days dampening the sunny ones, these companies were forced to lay off staff and eventually close their doors, resulting in thousands of unemployed workers.

If these companies had relied, instead, on the cash flow process, they may have been able to survive, albeit without that extra espresso machine or rock climbing wall..

Increase the Speed
Cash flow refers to the movement of cash in and out of your business. Whether you sell widgets or windows – and are General Electric or a small- to medium-sized business – money comes into your business in the form of cash received from customers at the time of the sale. It also includes cash received from accounts receivable and income from other activities, including sales commissions.
If cash flows in, it’s got to flow out. Cash flows out of your business to finance everything you purchase to actually run the company: inventory, raw materials, payroll, expenses, rent, utilities, interest on loans, equipment lease payments and accounts payable on trade credit that other businesses have extended to your company.
The key to improving cash flow is an economic concept we all learned, but perhaps ignore: simply improve the speed of money flowing into your company while decreasing the rate at which money flows out. For the entrepreneur or small business, this may mean pre-billing for any work incurred, or delaying expenses until necessary. Larger businesses with employees may want to undertake similar tasks … only on a larger scale.

Paint by Numbers
The missing link, therefore, is timing. Mark Deion, president of Deion Associates & Strategies, Inc in Warwick, R.I., says you could go out of business waiting to get paid.

“For example, it costs you $100,000 to produce something and a customer is willing to pay you $1 million,” he says. “We would agree that $900,000 is a great profit margin, but what if you have to pay the $100,000 in December and your customer isn’t going to pay you until April?”
While there are many theories on how to achieve cash flow success, most financial advisors agree on a multi-step approach that encompasses a variety of simultaneous techniques. Here are six steps for consideration.

1. Establish a receivable process. You can improve your chances
    of receiving timely payments from your customers by setting up
    an A/R process to record sales, generate invoices and monthly
    statements, and track your customers’ current and past-due
    balances.

2. Forecast cash flow. Study your customers’ paying habits so you
    can begin to predict when and how much they’ll pay. Analysts
    say the amount you forecast should be within five percent of
    your monthly receivables. If your predictions are dramatically off
    schedule, a cash flow problem could be looming.

3. Track expenses. Each month, compare projected expenses to
    actual expenses. This will help you anticipate the need for more
    cash and react immediately. For example, if you unexpectedly
    have to repair broken machinery, you can cut expenses
    elsewhere or take an advance on a credit line.

4. Project sales. It’s easy to assume the demand for your products
    and services will be high, but it’s safer to base your projected
    sales on facts rather than assumption. When you project
    accurate revenues for a specified period, you can spend
    accordingly. It isn’t magic; just common sense. For example, use
    past experience to project future sales, and talk to your
    customers or clients to determine their future needs.

5. Track sales. Even after you’ve projected sales, monitoring
    actual sales ensures you’re on the right track. If sales dip below
    projections, the sooner you make adjustments, the better.
    Adjustments include cutting expenses, extending credit or
    borrowing money.

6. Prepare for cash flow imbalances. Nothing is ever 100 percent
    steady, and for many businesses, it’s more than normal to
    experience cash flow fluctuations throughout the year.
    Anticipate when your sales are likely to drop, then ensure you’ve
    put cash aside to cover your expenses during the lean months.

No matter what your company’s situation may be, the overriding advice from finance professionals is to seek help from those who know. If you don’t think you can manage your company’s cash flow yourself, hire a professional who can handle your cash flow needs. And, remember, cash flow isn’t about crunching numbers, it’s about managing your company so that you won’t find yourself in a cash crunch.

Consolidate Your Blog Reading into Microsoft Outlook 2007

January 22, 2008 | Leave a Comment

Are you a busy professional that is finding it daunting to keep track of all the blogs you read?

Well your savior is here! We will show in a few simple steps and how get the True You Marketing Blog into Microsoft Outlook 2007. Once you master this simple process for our site, you will be able to add as many sites as you want.

The benefit of aggregation of content from multiple Web sources is that you no longer have to visit different Web sites for news, weather, blogs, and other information. You can see if there is anything of interest for Microsoft Outlook which most professionals are in all day, anyway.

To get started with the process you will need to open Outlook 2007 and an Internet Explorer or FireFox Window.

1. Step one is to get the URL for our Blog Feed (http://www.trueyoumarketing.com/feed/rss )

Open Internet explorer and type in our website http://www.trueyoumarketing.com . You will then see a page that looks similar to the one below. Now weed need to discover the RSS or BLOG feed for our site.

You can discover new RSS feeds on Web sites that offer this feature by looking for clip_image001, clip_image002or, clip_image003. In some Web browsers, such as Microsoft Windows Internet Explorer 7, when you click these buttons, you can subscribe to the associated feed and find the link.

clip_image006

Click on the clip_image001[1] link at the top right of our site and you will be taken to a new page that looks like this:

clip_image009

In the address bar of Internet Explorer is the link we want to use with Microsoft Outlook 2007. (http://www.trueyoumarketing.com/feed/rss) Now, right click on the URL in the address bar and select Copy.

We are now ready to add the link to Microsoft Outlook 2007.

2. Go to Microsoft Outlook 2007. You should be in your default mail view. On the left menu under mail you should see RSS Feeds.

clip_image012

Right click on RSS and Select Add a New RSSS Feed

clip_image015

You will then get a prompt for the feed to add. Past in the URL we copied earlier (http://www.trueyoumarketing.com/feed/rss) and hit Add.

clip_image019

You will then get a second prompt warning you to add only BLOGS that you know. Hit Yes to add the BLOG to Microsoft Outlook 2007.

clip_image022

You have now successfully added True You Marketing’s BLOG to Microsoft Outlook 2007!

clip_image026

To read a post, just click on the Headline and click View Article. This process will work for any RSS capable BLOG.

If you have any further questions remember you can always email us using the contact form on our site.

Is Your Business High in Productivity or Simply Buzzing with Activity?

January 21, 2008 | Leave a Comment

Have you ever been sipping coffee in a reception area trying to distance yourself from the buzz of activity all around you?  To the casual observer, this whirlwind of activity may indicate a highly productive business.  Upon further investigation, however, you might be surprised to learn that the owners and management team do not share this sentiment at all.  In fact, many businesses today are concerned about their level of productivity despite the appearance of an active staff.

The first thing to understand is that activity alone does not necessarily equate to productivity.  Often, this activity, which could easily be the result of confusion or busy-work, is misinterpreted.  Productivity, on the other hand, has been defined in many different ways.  By formal definition, it is the measure of a unit of output per unit of input.  The government defines it in terms of revenue per hour worked.  Some businesses define it based on revenues, while others base it on profits.  Almost all non-governmental definitions incorporate the dollars invested in capital assets such as plants and equipment.  This is known in most business circles as total factor productivity (TFP).  By paraphrasing the many definitions, one might conclude that TFP is best defined as the output units of goods and services per input unit of capital and labor.   Remember, no matter how you choose to measure productivity, you must have a consistent definition and process to accurately assess changes from year to year.

So, what factors impact TFP?  Productivity increases or decreases may result from such factors as pricing, volume, quality control, technological advances, time management, employee training, employee moral, etc.  A small improvement in one or more of these factors may result in a substantial gain in the business’s overall profitability.  In much the same manner as borrowed capital may be judiciously used to leverage and improve profitability, increasing TFP will result in similar but more powerful leveraging.  This is because there is no downside from additional debt.  In other words, productivity growth doesn’t cost ” it pays.
What should your business do to improve productivity?  There are two basic courses of action; (1) increase output with no increase in input, or (2) hold output constant while decreasing input.  In either case, people are the key ingredient for success.  Management and employees, working together as a team, must jointly tap into the internal resources of human creativity, passion, and energy to bring about meaningful productivity growth.  Therefore, it is incumbent on management to set goals and to provide an atmosphere whereby each employee feels challenged and motivated to contribute to the team effort, all the while knowing that rewards are within his or her reach.

One technique that has proven to be particularly useful in growing productivity is the old-fashioned “brainstorming session.”  This usually involves a selected group of employees who meet periodically to discuss problems regarding quality, production, and other timely issues.  Many seemingly impossible problems have been resolved when uninhibited minds begin to explore the “what-ifs.”  Following are some specific ideas for improving productivity: 

  1. Identify the organization’s purpose and mission (a business plan);
  2. Communicate business goals to employees;
  3. Integrate business goals with the goals of individual employees;
  4. Plan daily activities with these goals in mind;
  5. Implement new technologies where feasible;
  6. Increase employee participation in decision making and problem solving; and
  7. Provide incentives to recognize individuals for a job well done.

Many larger businesses today employ the Six Sigma technique. This highly-defined process helps you focus on developing and delivering near-perfect products and services.  By studying the defects in your processes, you can systematically figure out how to eliminate them, thereby improving productivity.  General Electric is one business that utilizes the Six Sigma technique.  Jack Welch, the recently retired CEO of GE, may have exposed some of his managerial genius when he said, “growing productivity must be the foundation of everything we do.” 

The productivity growth driven by new technologies over the past 20 years has allowed businesses to greatly increase the production capacities of their capital assets.  However, the benefits provided by this new technology can never match the ongoing reliability and potential of an organization’s motivated human resources.  The bottom line is that without people, there would be no technology, no productivity, and no profits.  Your human resources are your most important asset. So, the next time you walk through the reception area in your own place of business, pay attention.  Are you witnessing productivity or activity?

Strategic Marketing

It All Adds Up

January 21, 2008 | Leave a Comment

I recently visited a restaurant that we love for its consistency and price point for good food. My husband and I have been dining there for more than 10 years. We visit regularly because we are a good fit for them and them for us.

Over the years, one of the only things that bugged us was that they served cold drinks, such as iced tea or water, in small glasses. These 16 ounce tumblers, when filled with ice, hold very little liquid. This caused several things to happen: 1. the wait staff had to make multiple trips to the table to refill our glasses, 2. we would stay longer than intended sometimes due to waiting for our glasses to be filled so we could wet our palette, 3. when we would get our iced tea just where we wanted it (with lemon and sweetener), the wait staff would fill ‘er back up in an attempt to save steps.

It seems like such a simple thing, yet my husband and I, on occasion, would speculate as to how much those glasses were costing the company. It all adds up. The extended stay of guests, the wait staff running back and forth repeatedly – sometimes at the cost of not properly attending to other guests, longer waits for guests waiting on tables, even increased usage of sweeteners (due to the number of refills, we routinely used more than we would have otherwise).

Given all of this, imagine our surprise when we found the restaurant moved to a larger-sized tumbler. This one was great. I think we had one refill each and used only one packet each of sweetener. The service was good, as usual, and we noticed that the wait staff seemed more attentive overall.

It is often the “little things” that add up over time. Here are areas within virtually every business that can hamper productivity, dampen profits and put a lag on morale.

  • Exchanges too many hands. How many people does it really take to place an order? Look at your systems to see if it would be beneficial to reduce the number of people needed to perform a function.
  • Employees don’t have all the information needed. When employees can’t remember the particulars, they often go seeking answers to their questions. This takes the employee’s time, the person’s time for answering the question and, sometimes, the customer’s time. Most businesses can benefit from documenting information in a common place, such as a notebook with guidelines, procedures, etc. This also provides a map for new employees to quickly learn the lay of the land.
  • Chaos rules. Clutter around the office or business is one thing, but another is having a workspace that is unorganized. Supplies that are out of place, forms that are mixed in with other papers – all mean extra steps and more effort to achieve one task. It takes only minutes each day to keep workplaces in tip-top shape for doing business.
  • Stopping and starting woes. It takes more time to perform a job when a person is interrupted and must begin again. While some people welcome interruptions throughout the day, this can wreak havoc on personal productivity. Eliminate unnecessary interruptions by breaking down job functions so time can be maximized, removing interrupters such as a candy bowl at a person’s desk (put the bowl in a common place for all to enjoy, but that doesn’t invite impromptu conversations throughout the day) and save time away from your desk or station by combining trips (restroom break with a trip to the supply cabinet, for example). Don’t forget to set a specific time each day to check e-mail, too!
  • Take a break. Taking a true break from the workplace will deliver you back to the office or company in top mental performance. Working through lunch at your desk, while it may seem productive, actually lessens your productivity throughout the afternoon. Take a break – even if it is only to walk outside for 10 minutes – to improve concentration and achieve peak performance.

Do You Know the Four Main Ways to Grow Your Business?

January 20, 2008 | Leave a Comment

Many people think growing a business is a complex process, but it is simpler than most think.  In fact, if you’re seeking suggestions as to what guidelines to follow here are four that should become your guidepost.

  • Increase the number of customers (of the type you want);
  • Increase the transaction frequency;
  • Increase the transaction or value of “average sale”; and
  • Increase the effectiveness of each process in your business.

Okay, this seems easy enough.  In fact, it may appear to be too easy, but companies really need only to focus and commit to these functions for optimum success in the area of growth.

Increase the Number of Customers (of the type you want)
Getting business through the door often proves to be the most challenging and expensive aspect of growing a company.  It’s tempting to assume that you automatically need to seek new business without making sure you’ve already tapped the business you have.  However, finding a brand new customer can cost significantly more ‘some experts estimate six times as much’ than working with the customers you already have.  What exactly does this mean? You already have a customer base that is sold on the services you provide.  This captured audience is just waiting for you.  Some of the best advertising you could ever have is the kind that a satisfied customer will do for you.  These customers also provide a higher chance of finding you the type of business you want versus whatever simply walks through the door. If your company is business to business, ask customers for referrals to other companies that operate with a similar mindset. If your company is business to consumer, engage activities that draw new customers from your current customer base.

 
Increase the Transaction Frequency

Once you have the right type of clients (that means the kind you enjoy working with and those who pay on time), you want to ensure that they not only stay with you, but increase the amount of business they do with you.  A one-time only customer may not seem like the best one for you.  Yet, if the customer is the perfect fit in the type of business you’re looking for, you need only to foster the relationship.  Customers will come to you for different reasons.  They may have been told about your service from someone else, or found you on their own.  The point is that the customer may initiate the relationship, but it’s up to you to nurture it and make it grow.  When you offer exceptional customer service and let the client know how much they are appreciated, you will create a client that returns again and again.

Increase the Transaction Value, or ‘average sale’
Business owners are often passive about the amount they sell to a customer.  However, if a customer seeks you out, you have to remember they are looking to you for your expertise.  Cross-selling is not only a benefit to you, but to the customer as well.  When you bring more value to the customer through multiple services or products you provide them with more opportunity.  In turn, you have created a more valuable customer relationship, which is easier and more cost-effective than creating a new one. And, as customers come back more frequently, their average sale often increases.
Increasing price should also be considered, but is sometimes difficult since clients become accustomed to a certain cost.  However, when you are able to break down price, volume, fixed costs and variable costs you’ll find that increasing your cost means truly applying the correct price to reflect the value of the service or product you offer. Some companies have taken a lesson from fast food restaurants, and have started offering ‘package’ deals. This pushes the customer to a higher price point with the perception of receiving a ‘discount’ on the overall order. This technique may be used in many industries.
It’s important to keep in mind that companies can lull into a comfy, cozy state of cost coma. One manufacturer, for instance, had not changed prices in 10 years. By increasing the price of just one product, the company increased profits 11 percent. The average sale is a powerful growth mechanism.

Increase the Effectiveness of Each Process in Your Business
How many of us just jump into work and do it? There may not necessarily be a defined process, but who has the time to figure out if there’s a better way of getting things done? The truth is that the time you take to increase your business’s efficiencies will have a direct affect on a project’s outcome and, ultimately, your profitability.

Business is a group of people carrying out a series of processes.  If the processes in place aren’t running as smoothly as possible, you can lose a considerable amount of time ‘and money ‘ on things such as overcompensation for mistakes, inadvertent doubling up of manpower, and troubleshooting problems.
Taking the time to evaluate how business is generated, whether or not the customer service chain is efficient, and where time is lost in the moving of products or delivery of services can provide you with more information for scrapping a system or improving on one that is seeing a significant return on investment.

SourceForge.net’s FreeMind

January 18, 2008 | Leave a Comment

Mindmapping is not a new concept. I believe I first came into contact with it as a freshman in college. It’s a diagram used to represent words, ideas, tasks or other items linked to and arranged radial around a central key word or idea. It is used to generate, visualize, structure and classify ideas, and as an aid in study, organization, problem solving, decision making, and writing.

Mind mapping can really help you dump your mind out on paper and organize it as you go. If you organize it in one way and would like to rework it, no problem, you just move this string and add another one. It’s super easy, takes no instruction, and if you think in a connected or circular way, it will be extremely easy to use.

I have some clients who work best in this way and we pass mind maps back and forth as we brainstorm. I can put my information in it and then they can ask me questions and we can fly back and forth very quickly moving toward our goal.

If you think it might help to get your jumbled thoughts out of your head, your hunch is probably right. Why not download the software I use and take it for a complimentary test spin? Download FreeMind now.

There are other packages out there, too. I have another client that recommended Mind Manager (and this site has a tour you can take), plus there’s a free trial.

I can’t speak for these other packages, though here are some others to choose from – Visual Mind, Open Mind and Nova Mind (definitely the coolest looking package I’ve seen and haven’t sampled).

Next Page »