Business Challenge of the Week – How well are you and your business protected from risk?

 

How would your business fare if you got sued by an employee or customer?What would happen if a key employee or group of key employees left your organization unexpectedly?  What impact would having all your computer files stolen and destroyed have on your business?

 

These are very serious issues that need to be addressed.  Most companies don’t plan for risks and threats until they happen.  This can ruin a company or at the very least severely disrupt your business and leave you vulnerable to competitors.

 

Your challenge this week is to develop a risk management plan for your company.  It can be a simple and even quick process if done proactively. assure you it WILL NOT be simple if you wait to address until a crisis arrives. This is definitely a case where PROPER PLANNING PAYS!  If necessary, hire an expert to help guide you through the process to ensure it gets completed. Do not go into 2012 without a risk management plan.

 

Here are some tips to help you start the process:

  1. Gather your management team, get a whiteboard and identify all of the potential threats and risks that could impact your buiness.
  2. Prioritize them in order of severity or significance.
  3. Imagine that each has occured.  What would happen?  What would you do?  Write it down and put a process together of every step you would take to handle or avoid all together.
  4. Test a couple scenarios.  Do they work? Can they work? Why or why not? Where are the pitfalls? What steps are missing? Would you benefit from having certain outside experts review your strategies?
  5. Share the plan with your key management team.  Make sure everyone knows how to access.
  6. Review annually.  Modify and add to as needed
  7. Sleep better at night.

Revisions to the plan may occur annually, as situations arise and your organization lives one or two of the strategies firsthand. Hindsight is often wiser. Don’t be afraid to toss some plan content when you know for a fact that this is what you must do. Remember: the plan needs to be current. On a day you least expect it, someone has to grab that document, refer to a particular section in it, and act upon it–fast.

 

If you need any help or would like to discuss this further, please contact me.  It would be my pleasure to help motivate and guide you to develop a plan that protects your company from unforseen risks and threats.

 

Sincerely,

 

Bruce Rector

The Rector Group

Tel: 954-356-0439

brector@therectorgroup.com

 

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Business Challenge of the Week – How to get more from your sales team

If you are like most organizations, one of your goals is most likely to increase sales.  But how do you make that a reality?  

 

Your challenge this week is to establish some specific actions you will take to get more out of your sales team.  Here are some tips to get started:

 

  • Document your current sales process.  Not what you think it is, but what really happens. This is the series of events that must occur to move a prospect from beginning to closure.  While everyone may have slightly different steps, you should be able to identify what works consistently for your organization.
  • Determine key actions that must be taken in order to close business.  These become your measurements that you want to closely track. For a team you might ask: how many prospecting calls per day / week?   How many emails?  How many events did they attend?.  How many meetings with authentic prospects per period?  What gets measured gets done.  It is imperative that these actions become habits for your team.
  • Set goals that challenge the team.  Make sure they are crystal clear.  Huddle every morning – in person or via phone – to review goals, get specific feedback on actions being taken by each team member plus find out if anyone needs any support.  This communication will transform your sales process over time.
  • Focus on your winning sales people.  So many times, organizations spend time with their poor performers and ignore the ones that are succeeding.  Do the opposite.  Focus on your winners.
  • Celebrate victories.  Sales people love to be recognized so spend time each week celebrating your wins.  Even small ones.
  • Have fun!  Create contests or other incentives that motivate the team.  You might be surprised at how motivated people get when there is a trip to Hawaii on the line!

These are a few core things that will help you get more out of your current sales team.  I know if you take this challenge on, you will uncover some dramatic results for your organization.  Good luck!

 

 

Business Challenge of the Week – How strong is your organic growth strategy?

This Business Challenge of the Week is focused on how well you are managing and planning for organic growth. 

Organic Growth can be described as using existing products and processes to drive sales through acquiring new customers and getting current customers to buy more, more often. That’s organic growth as opposed to buying growth through buying a competitor (ex. HP buying Compaq) or buying into a new market (ex.  Coca-Cola buying Odwalla).

Edward Hess, author of “The Road to Organic Growth”, identified 6 key traits that high organic growth companies possessed.

Your challenge is to rate your company from 1 – 5 based on how well your company exemplifies each trait (1 being poor, 3 being average, 5 being exellent).

  1. An Elevator Pitch Model: High growth companies have a simple, understandable business model that their employees can understand and execute—none has a complex or sophisticated strategy
  2. Instill a Small Company Soul into a Big Company Body: High organic growth performers have a small-company soul housed in a big-company body. A small company soul is entrepreneurial, with employees having ownership of the customer, being held accountable for results, and sharing in the rewards of those results.
  3. Measure Everything: One of the six keys to building a consistent high organic growth company is measurement—of everything. The 22 companies on the organic growth index (OGI) list track a variety of metrics—financial, operational, behavioral—to understand which areas of their business are not performing as efficiently as possible, and then they take action to shore up those numbers.
  4. Build a People Pipeline: All the high-growth companies have a high management and employee retention, high employee loyalty, and high employee productivity as compared with their competition. Employees in these companies ‘own’ their results and their careers, and most even own part of the company. These companies’ management teams are frequently home grown, with long company tenures.
  5. Leaders: Humble, Passionate, Focused Operators: Rather than being overly confident about their success, at high organic growth companies, leaders are frequently paranoid about complacency, arrogance, and hubris. Although many leaders are very wealthy, for the most part, you would not know this from their dress, their office, their demeanor, their attitude, or any outward appearance. Few of the leaders, if any, take credit themselves. There is a sincere respect for line workers, where many had begun their careers.
  6. Be an Execution and Technology Champion: The high-organic companies generally do not have unique strategies, products, or services, nor are they market-leading innovators. But they are execution champions—day after day, they have figured out how to get consistent high-quality performance from their people. These companies use technology to drive efficiencies across their value chain. To them, technology is not a service function; it is an operational function.

How did you do?  Did you uncover some things you were doing really well?  Did you identify some areas for improvement?  My request to you is to discuss this in your next management meeting and identify 3 – 5 action steps you can take over the next 90 days that you will track and measure.

 

This week’s challenge: Are you the leader you think you are? Seeing yourself how others see you.

We all like to believe we are amazing leaders that are clearly communicating our vision of where we want to go and empowering our team with the tools they need to make it happen.

 

Most of us operate under the mistaken assumption that other people see things the same way we do.  What if you were wrong?  If you don’t know how your words and actions are perceived and understood, if you don’t know if others trust you (and if they don’t, why not), if you don’t know what others want and expect from you, how can you exert the influence you want?

 

Your challenge for the week is to become more self aware.  Here are some tips by Harvard Business Review that every leader should ask themselves to determine if your perceptions about yourself are in alignment with the world around you:
  1. Is there an easy give-and-take between you and your employees? Are you able to carry on a real conversation about a variety of topics, business and personal? Can you disagree and respectfully discuss your differences? – Without such connections, which require time to establish, little else you do is likely to uncover others’ thoughts and feelings, especially about you as a boss.
  2. When you disagree, do you seek clarification, pose thoughtful questions, and ask for examples? Or do you respond angrily and deny defensively what you’re hearing?  – If you want to know what people think, you cannot deny the reality of their perceptions, even when you disagree. Only as people test your tolerance will you slowly build a reputation for a willingness to hear and accept candid comments.
  3. Do you seek out people’s perceptions and perspectives in the context of a specific task, project, or program? Asking broad, general questions can feel threatening to those you’re asking, particularly if they work for you. Develop a practice of “checking in” with people at the beginning and end of a piece of work (and in the middle if it’s a lengthy project). At the start, ask what people hope and expect to get from you, the boss, through the course of the work. At the end, ask if people got what they needed. Use the specific piece of work as a setting for a candid discussion of what worked and what didn’t, where you might have done less or more, and what you should do differently next time. That discussion can sometimes serve as a springboard to a more general discussion about you as a manager and wh at people need from you.         mmmmmmmm
  4. Do you have a developmental network of people who will give you candid feedback? These should obviously be people you trust and with whom you have strong, ongoing relationships. These people can give you reactions to what they see and hear from you and can communicate to you what they hear about you from others in the organization. They are most likely to be peers and colleagues and may include an older and more senior mentor.
Sometimes as leaders we are so focused on helping our employees become better that it may get lost on us that maybe WE need to become better.  The truth might hurt a bit but, if you are committed to being your best, it’s important to understand how your behaviors are perceived by others, even if you ultimately decide not to change them.  Seeing yourself how others see you is an invaluable tool for increasing self-awareness and stimulating self-growth.

 

 

How to hire “A” Players

This week I wanted to challenge you to make sure you have a hiring process focused on hiring “A” Players. An “A” Player is a candidate who has at least a 90 percent chance of achieving a set of outcomes that only 10 percent of possible candidates could achieve. “A” Players are worth more than a couple “good” employees.

When hiring a new employee, you are looking for a candidate that will do whatever it takes to beat company goals, constantly keep their skills in shape, pay attention to their surroundings, contribute in any way they can to keep the group moving forward making progress.

So how do you implement a hiring process to hire only A Players?

  1. Determine what qualities define an A Player for your organization. – Once you have determined these qualities, develop a job description.
  2. Look for a candidate with the right attitude. – Pay attention to the little details of how they interact with everyone in your company.
  3. Align your interview techniques with the qualities and attitude you are looking for. Consider using testing tools and techniques like Predictive Index, TopGrading, etc. to apply some science to your process.
  4. Check professional and personal references. Not just the ones your candidate gives you either.
  5. Don’t play games. Let the candidate know where you stand and what you are planning to do. Keep them abreast of the timeline and then don’t deviate from that.

Remember, a bad hire costs your business valuable time and money. By choosing the right person the first time, you will help your company grow and succeed. But in order to accomplish this you must have a process that you consistently follow, tweak and refine.

Putting Accountability In Place – Business Challenge for Week of July 11, 2011

It’s not enough to strategize and plan for your company: at the end of the day it’s all about execution. To that end we all need some level of accountability, whether implicit or explicit: CEOs are accountable to shareholders, employees are accountable to their superiors, and so on. This is not a negative thing; think about it as a way for employees to receive positive encouragement that can drive the company to the next level.

Your task this week is put pencil to paper, and identify projects and areas of responsibility for your direct reports. Then write next to each project or area the mechanism in place to hold the responsible person accountable, and when the follow up is scheduled to happen. If you identify areas that have fallen through the cracks and no one is being held accountable, come up with a simple game plan to address that issue.

If you have any questions or feedback, please contact me by email brector@therectorgroup.com or phone: 954.356.0439 OR If you want to add an extra layer of accountability, email me and I’ll follow up with you later this week to see how you did.

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Mid-Year Checkup – Business Challenge for Week of July 5, 2011

Success is not an accident, and hope is not a strategy.

It is officially the second half of 2011. Are you where you want to be? Are you on track to have a successful year? Are you measuring your progress against your plan? Are you achieving impressive results?

If you are not making the progress that you would like to make and are capable of making, it could be because your goals are not clearly defined. This week’s Business Challenge is to perform a Mid-Year Check up. Think how quickly we got to the mid-year point? Well, the second half of the year will go by just as quickly. Don’t miss the opportunity to have a successful year no matter where you are right now.

Read on for some additional insight and tools on how to get on track:

I often hear CEOs wringing their hands, complaining about how tough things are these days. Sales are down, profitability is off, or whatever. It’s certainly true that the economy is struggling, but you can’t control that. However, you CAN control how you respond to your current circumstances. So let’s focus on that: if you want to drive your company to the next level, even in troubled times, you are going to have to make a decision to take charge of your future. Random accidents of nature and hoping for better days will not drive your company to the next level. Achieving that is going to involve setting some goals, and holding people – including yourself – accountable. So, let’s get started taking concrete steps to make som e things happen by laying out a simple strategic planning process.

Let’s look at three simple steps to put a plan in place. This is a simple way to develop an effective strategic plan, and drive it down into effective tactical actions.

What are these three steps? They are:
1.1. Understand where you are.
1.2. Envision your (year) end-game.
1.3. Connect the dots.

Let’s talk about this in more detail:

1) Understand where you are.
To begin, management should ask some basic questions about the business today. Some examples:
What drives your revenue? Is it internet marketing, specific sales channel, particular advertising, or through ongoing business relationships? And which levers in each of those drive revenues?

What’s your average unit price? How sensitive is your market to pricing? Can you position your service or product to more positively reflect the value added? Does your pricing reflect the value offered? Does it contemplate every cost involved – even things like overhead or other sales, or administrative costs. If your average price seems appropriate, how can you drive unit volumes?

Have you defined, and are you monitoring your Key Performance Indicators (KPI’s)?

2) Envision Your (Year) End-Game
Where do you want to be at the end of this year? Set stretch goals for:

1. Revenue
2. Number of Customers (You want more granularity to reduce risk)
3. Cash flow
4. Other relevant metrics or KPI’s

The intent of management to clearly define very specific goals to be achieved within a clearly defined timeframe.

3) Connect the dots to deliver
If you know where you are now, and where you want to be, how do you bridge the gap between the two? The answer is to set intermediate goals with accountabilities. For example, if you’ve identified your revenue drivers, and you have now set a revenue growth goal for the year, you can define the intermediate steps management needs to take to achieve the growth goal. For example, such steps might be:

1) Putting in place a goal of a minimum number of outbound calls per salesperson.
2) Hiring of new sales personnel to support revenue growth, with specific sales goals for these new hires.
3) Developing a specific number new contacts within local business community.

Your intermediate goals will obviously be specific to your situation.

To finish connecting the dots you will need to put together all of the intermediate goals that get the company where it needs to be. I would suggest that you set these goals by quarter. Finally, you will need to put in place accountabilities: which tasks must be completed to achieve these goals, who will do them, and by when. I would suggest at monthly follow-up meetings (or more often, if desired). With this in place management will be well on on its way to achieving the goals of the company.

Remember, accidents and hope will not bring the results that you want to see. You must carefully define where you are, where you want to be, and then take careful, disciplined steps – with accountability – that will get you there. No company has ever succeeded without its leadership initiating a process like this. And, like I said in the first few sentences, it all begins with you making a decision.

If you have any questions or feedback, please contact me by email brector@therectorgroup.com or phone: 954.356.0439

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Understand, and prepare for, your exit strategy – Business Challenge of the Week 6/27/11

Whether the owners of a company ultimately intend to sell to private equity, to a strategic investor, or pass the company to others (often family members) there are critical actions to be taken to prepare your company for that transition. What those actions are will often depend on what your ultimate exit strategy.

Is your strategy:
1. Sale to financial buyer?
2. Sale to a strategic buyer (another company)?
3. Sale to an individual?
4. Passed to a family member?

Each goal can have somewhat different requirements in terms of how you prepare the company – but you must make a decision about your exit strategy before you can proceed.

You can always pursue a different exit strategy when the time actually comes, but it’s much easier to change courses (and attract an exit partner) when you are on a course.

So this week’s challenge: Identify an exit strategy

If you have any questions or feedback, please contact me.

Clean Up Corporate Documents – Business Challenge of the Week for 6/20/11

Few things can damage a company more rapidly than an unforeseen legal controversy (often between owners) which relies upon proper corporate documents for resolution. Things can get particularly difficult if the shareholders have never properly ratified a shareholder agreement (or operating agreement, depending on the form of incorporation). These documents define the relationship between the shareholders, and deal with issues like disposition of shares, recording ownership of the company, etc.

Your challenge this week:
• Review your articles of incorporation, shareholder’s agreement, operating agreement or other corporate documents.
• Ensure that your corporate documents are up-to-date, properly executed, and accurately reflect the understanding between all parties.
• If there are any parts of the document that you do not understand or that you are not comfortable with arrange a meeting with your company’s outside counsel immediately (recognize that YOU are not this person’s client, but rather the company).

This is not the most exciting task that a CEO can undertake, say, compared to putting together a strategic plan with members of senior management; it can often be an uncomfortable undertaking if there are open issues between owners that must be resolved before documents can be signed. It is critical that this be put to bed as soon as possible. An ounce of prevention is worth a pound of cure.

If you have any questions or feedback, please contact me.

Understand and Manage Cash Flow

One of the most important lessons business owners must learn is that cash flow is king. It doesn’t matter how much money is coming in the future if you don’t have enough money to deal with your business TODAY. Employees can’t wait on paychecks until your customers pay. Suppliers may not be willing to extend your credit any further and you may not be able to purchase the goods you need in order to deliver to your customer and receive payment.

More businesses fail for lack of cash flow than for lack of revenue or profit. Why?
1. Business owners overestimate income and underestimate expenses.
2. Business owners fail to anticipate a cash shortage and run out of money, forcing them to suspend or cease operations, even though they have active customers.

Entrepreneurs need to understand what their near and intermediate term cash requirements are – and why. How to do this? First make sure you understand the difference between profit and cash flow.
• Profit is the difference between revenue and expenses. Due to accounting rules, there can be timing issues that effect when you recognize revenue and when you receive the cash associated with that revenue. Likewise, similar timing issues can effect when you recognize expenses, as opposed to when you pay the bill.
• Cash flow is the difference between inflows (actual incoming cash) and outflows (actual outgoing cash). Cash inflow is not counted until payment is received and expenses are not calculated until payment is made. Cash flow also includes infusions of working capital from investors or debt financing.

Your challenge this week is to create a simple cash forecast, by month (or week, if you wish) for the next six months. A template to use as a starting point for your cash forecast is available HERE.
Getting Started:
1. Start with the amount of cash on hand – your current bank account balance(s) plus actual currency and coin.
2. Make a list of anticipated inflows – customer payments, collection on bad debts, interest or investment earnings, etc. List not only the amount, but also when it will be coming in.
3. Make a similar list of anticipated outflows – payroll, monthly overhead, payments on accounts payable or other debt, taxes payable or set aside for future payment, equipment purchases, marketing expenses, etc.

Assemble this into a simple Excel spreadsheet that you review with your management team on a consistent basis. If at any point you see you have a negative cash balance, you have a potential problem that you need to address immediately.

The time periods whereby management measures this can vary – if there are serious liquidity issues it may be necessary to project forward by week, otherwise by month or even by quarter may be sufficient. This should be monitored carefully by all appropriate members of senior management so that if cash issues appear on the horizon concrete steps can be taken to address them.

If you have any questions or feedback, please contact me.

Sincerely,

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

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