Business Challenge of the Week – Managing Your Banking Relationships

Maintaining your banking relationships.

This week’s challenge is around your banking relationship – are you managing it or is it managing you? Your banking relationship is critical to your business. Your bank will typically provide services such as:

  1. Operating banking. This is your routine banking business – deposits, check writing etcetera.
  2. Lending. This would be bank debt such as revolving lines of credit, etc (and if your bank is not providing credit then you should seriously assess the relationship).
  3. Other specialized services. This might include currency hedging or trading, letters of credit and other trade services.

Bankers can be a critical factor in your company’s success. By providing cash management, liquidity (via lending) and other services a bank can be an extremely important partner for your company. But remember – all business is relationships, and this is never more true than with your bank. With that in mind, you should have an ongoing plan to keep your banker in the loop with what is going on at your company. Relationship means communication – and keeping your banker apprised about what is transpiring at your company should be part of the CEO’s regular duties (or CFO if the company is a bit larger).

How can you develop and improve the relationship with your banker(s)? Try these steps:

  • Schedule regular meetings with your bankers. This should happen at least on a quarterly basis.
  • Make sure that your banker is included in any emailings or other outbound communications by your company (press releases, etc).
  • If there are any significant events in your company’s life (positive or negative) make sure that you personally convey those events to your banker – don’t let him / her read about it in the paper.
  • Make sure that you are acquainted with the everyone at your bank that can impact the company – your banker’s boss, support staff, credit analysts, etc. Everyone who is part of the relationship should know the great story of your company.
  • Finally, you should periodically assess the relationship. Is your bank supporting the company’s growth efforts in the most effective way? Are there ways that the bank could assist in accelerating the growth of your company?

By asking yourself (and your banker) these questions you can ensure that the resources that they can offer are there to support your company’s growth!

Sincerely,

Bruce Rector

The Rector Group

Tel: 954-356-0439

brector@therectorgroup.com

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Business Challenge of the Week – TRACKING PROGRESS AND KEEPING SCORE

Have you ever sat through a great strategic planning session, developed exciting plans and goals and left feelingpositive and inspired?  Yet once you walk out of the room all the strategy and plans you developed die.  Nothing happens.  Has this ever happened to you?

I’m guessing it has – which is why when you use words like “Strategic Planning”, “Mission”, “Vision”, “Value” and “Goals”, everyone’s eyes roll to the back of their head because they’ve “been there, done that”.  It always sounds good, but when nothing happens it demotivates and demoralizes the team.

So how do you avoid this ever happening again in your organization?  Simple: by tracking progress and keeping score.

Last week our business challenge focused on Capturing Your Key Metrics. This week your challenge is to put a visual tracking and scorekeeping process in place that clearly shows how you are doing achieving those key metrics.

Examples:

  • If one of the key metrics is improve customer service response from 2 days to 3 hours, have a visible area in your company where it shows what the daily response rate is compared with the goal.
  • If one of your key numbers is 100 new orders by St. Patricks Day, create an area where you post a numbered shamrock for every new order is obtained.

Put up big posters and charts in highly visible areas.  If some of the information is confidential,  create a war room for key company executives where you hold your meetings so those KPI’s are right there – nowhere to hide!

As you plan your visible tracking and scorekeeping, keep in mind this is an ideal opportunity to involve and engage people in your organization who don’t normally get involved in weekly, monthly or quarterly goal achievement.

And celebrate big!  Whether it’s a public acknowledgement or a monetary incentive, determine how you are going to publicly reinforce your progress.  Publicly tracking progress and keeping score can positively alter your culture and results!

Sincerely,

Bruce Rector

The Rector Group

Tel: 954-356-0439

brector@therectorgroup.com

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If you find this helpful, I would appreciate it if you would Forward it to a Friend or Colleague or post to one of your social media channels.  Thanks in Advance!

 

Business Challenge of the Week – Capturing Your Metrics

This week’s challenge:  Capturing Key Metrics

Last month we focused each Business Challenge on Strategy to ensure as you embarked on 2012 your company had a clear strategy in place that everyday actions would be aligned around. February is Money Month.  Each week we will provide a challenge aimed at making sure you are capturing and managing your metrics effectively.

Week 1 of Money Month is focused on Capturing Key Metrics

Does your company have daily and weekly measurements for the company AND for every individual or team connected to business performance?  These numbers focus everyone’s attention on driving performance, reinforcing priorities, helping anticipate problems and opportunities – focusing the team.

Your challenge this week is the identify the following:

  1. Critical Metrics – Identify one or two critical metrics around which to align the company over the next quarter or year.  A Critical Metric represents a key short-term focus in the company that will have the most impact on the future of the business.  This might be gross margin on recent projects, or perhaps pricing trends for new projects that the company has won, for example.
  2. Smart Metrics – Next the executive team should identify three Smart Metrics that give insight into how the company is likely to do in the future.  The ability to predict is a key leadership function.  A Smart Metric is often is a useful ratio made up of key indicators.  Some examples: the ratio of sales this week against the same week last year compared to the growth rate of the market.  This would really tell you if you are gaining market share or not.  Others might be revenue per employee, expense growth rate vs revenue growth rate or expenses as a percentage of revenue, this year versus last year.  You get the idea: pick out Smart Metrics that indicate trends and the direction the company is heading in order to anticipate potential problems.

By defining and tracking Critical Metrics and Smart Metrics, and tying those to individual performance of team members, management can create useful tools to help ensure that the management team – and all employees – are focused in common on those critical areas that will drive the company to the next level.

Sincerely,

Bruce Rector

The Rector Group

Tel: 954-356-0439

brector@therectorgroup.com

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Business Challenge of the Week – Creating a Culture of Accountability

Week 5 of our focus on STRATEGY is all about Accountability.  If you have missed any of the previous weeks, I’ve provided the links here:

Week 1 – Reconnect with your business strategy

Week 2 – The Power of the SWOT

Week 3 – Key Elements of a Successful Business Strategy

Week 4 – Can You Execute Your Strategy?

If you don’t hold yourself as well as your team accountable for executing your strategy, you will be no better off a year from now than you are today.  Accountability is comprised of two critical components:  Ownership and Measurement.

Business owners, or the management team hired by the owners (as in the case of publicly traded companies) will ultimately be held responsible for executing the business strategy for the company on a daily, weekly, monthly and yearly basis.  To ensure that the strategy is properly executed management must implement a structure that holds all involved accountable – partners, employees, customers and vendors.  That means everyone needs to know what they are responsible for – by whom, and by when – and there needs to be a way to measure.

Your challenge this week is to go back through your plan and make sure that every piece of your strategy has a specific person assigned to it, with a proper metric attached to that project to allow progress to be measured and tracked.

Here are some simple tools that will help you to do this:  What, How, When and Who.

  1. What – Define the clear results your organization wants to achieve.
  2. How – Define the actions required to achieve each result.
  3. When – Define the milestones and deadlines associated with the results.
  4. Who – Define the person responsible for each result.

The more detailed you get, the easier it will be to measure (be sure the metric you use to measure is simple to gather).  This is where the quality of the management team will make all the difference to a company.  Strategy sessions and goal planning can be fun and exciting; putting detail to your goals and measuring them weekly (or at whatever interval is appropriate) can be extremely tedious.

It is critical that the person that “owns” the project be held accountable; otherwise, you could find that some topics come up week after week with no progress.  It is only when you create a culture that holds people accountable – not in a “you are in trouble” kind of way” but in a way that says “this is super important” – that you will achieve the results set forth in your strategy and plan.

Here is a simple way to create a culture of accountability and keep it top of mind:

S = Set Expectations

I = Invite Commitment

M = Measure Progress

P = Provide Feedback

L = Link to Consequences

E = Evaluate Effectiveness

 

Remember,

OWNERSHIP + MEASUREMENT = ACCOUNTABILITY

“Accountability breeds response-ability.” Stephen R. Covey

Sincerely,

Bruce Rector
The Rector Group
Tel: 954-356-0439
brector@therectorgroup.com

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Business Challenge of the Week – Can You Execute Your Strategy?

Week 4 of our focus on STRATEGY is all about Execution.  If you have missed any of the previous weeks, I’ve provided the links here:

Week 1 – Reconnect with your business strategy

Week 2 – The Power of the SWOT

Week 3 – Key Elements of a Successful Business Strategy

 

In last week’s challenge, we outlined one of the key elements of building a successful business strategy – identify the keys to execution.  I’d like to delve into this further in this week’s challenge.

Ensuring that you and your team are executing your business strategy day in and day out is a leader’s most important job.  This is often the difference between you and your competitors.  If your competitors are getting more done than you in the here and now – they are beating you!  Execution is not just something that gets done.  It is your own specific set of behaviors and techniques that you and your team master.

If you have a strategy that your organization is not capable of executing, you haven’t set yourself up for success very well have you?  It is only when you pair strategy with execution simultaneously that you ensure you have developed the right strategy for your company – not just some pie in the sky wish list that you will never accomplish.

Your challenge this week is to make sure you can execute your strategy. Ask yourself these questions and have a robust dialogue about the answers with your team.  I’ve recommended this several times before, so hopefully it is starting to sound familiar  –  set aside 90 minutes to go through this first thing in the morning completely undistracted – no phones, emails or texts.  This is a discipline that when carried out weekly or better yet daily will set you apart from your competitors.

  1. Is your strategy in sync with the marketplace? Is your team well versed about the competition and what they are doing to serve their customer segments and how they might prevent your company from serving them.  You have to understand the competitive landscape to ensure your strategy is a viable one.
  2. Does your organization have the capability to execute the strategy? Do you have the right sales team in place to win new business?  Do you have the right technology in place?  Do you have a cost structure that will allow you to compete profitably?  Here is where a tight and consistent linkage between strategy and people processes becomes critical.
  3. Is your Strategy Sharply Focused? Have you clearly identified no more than 3 – 5 priorities to avoid fragmentation of effort?  Is your leadership focused on 1 or 2 specific markets and offerings to pursue or are they trying to take on too much simultaneously?  Don’t fall into the trap of thinking your strategy has to be overly complex or challenging.  That will only lead you to having a scattered plan that results in a dilution of efforts.  Keep it simple and focused.
  4. Are You Choosing the Right Opportunities? Are your ideas consistent with the realities of the marketplace?  Does it mesh with your organizations capabilities?  Are you pursuing more ideas than you can handle?  Will you make money with these ideas?  – No matter how well you execute, the risk of failure increases markedly when the ideas you develop don’t fit with your existing capabilities or force your to acquire those capabilities at too high a cost.

Linking people, strategy and operations together is the foundation for business success.   Mastering how each of these processes work together is vital to creating and executing your strategy – AND BEATING THE COMPETITION!

Sincerely,

Bruce Rector
The Rector Group
Tel: 954-356-0439
brector@therectorgroup.com

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Business Challenge of the Week – Key Elements of a Successful Business Strategy

This week’s challenge:  Key Elements of a Successful Business Strategy

January Business Challenge Theme = Strategy
Week 1 – Reconnect with your business strategy
Week 2 – The Power of the SWOT

Having a business strategy in place that is clearly and consistently articulated keeps management and staff motivated to align their daily actions to the direction of the company.  When your team understands where you want to go, they will make sure they get you there.

Business Strategy- What Is It?

A business strategy is a simple definition of where you want the company to go and how you plan to get there.  A good business strategy creates a framework for future decision making and planning so that every action that is taken is in pursuit of the set direction.

The environment today introduces changes quickly and constantly. Access to information via the Internet accelerates these changes.  To be effective, a good business strategy has to be consistently monitored and managed – otherwise you might end up pursuing what seems like great ideas and opportunities only to find that they take your business off course without realizing it.  Retaining your focus on the business strategy is one of the biggest challenges business owners, management and entrepreneurs face.

Your challenge this week is: get your business strategy articulated in writing on 1 page.

Your One Page Strategy should include the following:

  1. The core purpose and the aspirations of the organization
  2. The path chosen for further growth
  3. The basis for choosing the path
  4. The keys for execution
  5. The ways to constantly sense and monitor change, and determine if and when you should adjust

Make sure everyone in your organization has a copy of your One Page Strategy.  Make laminated cards out of it that people can carry around in their wallet.  Start every meeting off reviewing it.

Creating your strategy is only part of the challenge – your real challenge is to make everyone in your company internalize the strategy and own it for themselves.  When that happens, you have just started to make an impact.  Maybe.

Sincerely,

Bruce Rector
The Rector Group
Tel: 954-356-0439
brector@therectorgroup.com

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The Power of the SWOT

SWOT Analysis GraphicThis is Part 2 of our focus on STRATEGY.  (to see part 1, click here)

This week’s challenge is an oldie but a goodie.  When is the last time you did a SWOT analysis for your company?  You may think a SWOT is something that consultants and advisors only use but in reality a SWOT analysis can be a secret weapon for your business that allows you to to evaluate your strengths and weaknesses (internal issues) as well as identify and act on opportunities and potential threats (external issues).

To develop your own SWOT analysis, consider each section with a certain degree of realism and be specific. Avoid the standard line, “we are great at everything & have no competitors”. Your customers will know you in the marketplace for certain attributes or things that make them say, “WOW”. Don’t forget the complaints of late shipments or customer issues. To effectively complete a SWOT for your organization, look at the following examples:

Strengths – Consider your strengths relative to your competitors and from your customers’ perspective.  Anything a customer wants that you provide and your competitor doesn’t, can be a possible strength.

Weaknesses – It is far easier writing down your corporate strengths than weaknesses. Think of objections your customers raise during the sales process. Think of your competitors’ remarks. Is there any truth to what they say?

Opportunities – What can your business learn and take advantage of that enable you to become more profitable?  Opportunities may arise from market, competition, industry/government and technology.

Threats – Your business is influenced by the external environment, such as: legal, political, technological, and cultural factors. Consider what can make your business obsolete, and what will replace it. Threats can become opportunities or vice versa.

The SWOT analysis is a quick and simple tool to understand the overall big picture. It is the starting point of strategic planning.

The most important take-away from this exercise is to apply this knowledge to your business. Take all necessary actions to reduce the threats to your company and position yourself to take advantage of the opportunities.

Get this on your calendar to discuss and complete this week with your team!  Don’t let the issues of today limit the success of your business for tomorrow. Learn how to apply a SWOT analysis to your business and position yourself ahead of competitors.

Sincerely,

 

Bruce Rector

The Rector Group

Tel: 954-356-0439

brector@therectorgroup.com

 

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Business Challenge of the Week – Reconnect with your Business Strategy.

Happy New Year!  Today the business world is back in full force.  Are you ready?

“What the New Year brings to you will depend a great deal on what you bring to the New Year.”  Vern McLellan

What will you bring to 2012?  Not just what you say – but what are you really willing to do to ensure you end up where you desire over the next 12 months?

I started the Business Challenge of the Week last year as a way to help executives and entrepreneurs focus on one important component of their business each week.  I’ve heard from so many of you how helpful it has been and the incremental success you have been able to create as a result.

I wanted to figure out how I could improve the challenge to help you achieve your business goals.  Starting immediately, each challenge will support an overall core theme that will be in place for 4 to 6 weeks.

The theme for January is STRATEGY.  Each challenge this month will help ensure your management team has the right game plan in place to strengthen the performance of your company.

Let’s get to it.  This week’s challenge is to reconnect with your business strategy.

Most companies owe their initial success to a unique strategic position involving clear trade-offs.  Activities were once aligned with that position.  The passage of time and the pressures of growth, however, led to compromises that were, at first, almost imperceptive.  Through a succession of incremental changes that each seemed sensible at the time, many established companies have compromised their way to homogeneity with their rivals.

An approach to help you reconnect with your strategy is to view it as if you were a new entrant to the market but with the added bonus of having a history you can use to look at what your company already does that makes it unique by answering the following questions:

  • Which of your products or services are most distinctive?
  • Which of your products or services are most profitable?
  • Which of your customers are most satisfied?
  • Which customers, channels, or purchase occasions are most profitable?
  • Which of the activities in your value chain are the most different and effective?

Once you answer the questions, you are in a position to refocus on your unique core and realign the company’s activities with it.  But I’m getting ahead of myself.  This week just answer the questions.  Gather your key management team and take 90 minutes first thing one morning before you let all the distractions of the day in and answer the questions.  Kick off 2012 powerfully by reconnecting with your strategy!
Sincerely,

Bruce Rector

The Rector Group

Tel: 954-356-0439

brector@therectorgroup.com

 

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This week’s challenge: Are you leveraging strategic partnerships effectively?

At the end of the year it’s always beneficial to think ahead to the opportunities that next year can bring.  With that in mind, this week’s challenge is on strategic partnerships  and how they can impact your business.

More than likely your company has these relationships in place already, but the question is: Are you using your business relationships effectively and creating partnerships that accelerate the opening of new markets and channels?   Have you considered whether these relationships can provide your company with new products or services that generte new revenue streams?  If not, why not start now?

Your challenge this week is to sit down with your management team and create a strategy around how to use strategic partnerships effectivley in 2012.  Here are some questions to kickstart your conversation:

  1. Identify key relationships and potential partnerships within your universe of contacts
  2. Determine ten contacts that could potentially evolve into a strategic business  partnership.
  3. Put together a simple series of steps for developing the relationship with those contacts.
  4. Assign accountabilities “by whom, by when” for follow up for each contact that you are reaching out to.

 

By focusing on expanding your strategic relationships you can potentially identify a variety of new revenue streams for your company.  It’s an easy exercise that is well worth undertaking.

Sincerely,

 

Bruce Rector

The Rector Group

Tel: 954-356-0439

brector@therectorgroup.com

 

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This week’s challenge: Do you have a plan for 2012?

Today is 12/12 so what better day to check in with you about your plans for 2012.  Do you have your 2012 plan clearly outlined and written down somewhere?  If not, your challenge this week is to create your 2012 plan.

Here are some suggestions on how to make this happen:

Look at your calendar and set an appointment with yourself for 90 minutes preferrably first thing in the morning.  During those 90 minutes you will only do 1 thing – 2012 Planning.  You will focus all your attention on this and only this for exactly 90 minutes.  Set a timer.  No email checking, no taking phone calls, no multi-tasking.  I promise if you do this, you will finish your plan in 90 minutes.

90 Minute Agenda:

Review 2011 – Hopefully you have your 2011 plan handy to make this easier but if not, write down the following:

  • Key goals accomplished
  • Goals you wanted to accomplish but didn’t.  Review these and determine if they are still priorities.  If so, they will carry forward into 2012.  If not, just scratch them off.
  • Obstacles faced.  How you overcame them or if you are still facing them, your plan to overcome them in 2012.

 

Set Goals for 2012 – No more than 4 (this includes any from 2011 that you didn’t accomplish that you want to carry forward.)  In order to get to 4, make a list of everything you want to accomplish next year.  Don’t hold back.  Get it all down.  Then go back and prioritize to pare it back to 4.

 

Create detailed action plans for each goal.  How are you going to attain the goal?  What are all the steps you or others will need to take?  List the who, what, when, where and why for each action item.

 

Share with your team, get their feedback and set up a review schedule.  Monthly, assess your progress on each of the goals. Ask yourself and your team:  How are we doing? Are we still on schedule to complete by the end of the year? Have any of our priorities changed, is this still something we want to accomplish?

“Your life will be no better than the plans you make and the action you take. You are the architect and builder of your own life, fortune, destiny.”  Alfred A. Montepert

 

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