There’s a lot of talk about core competencies in the business world, but people often don’t understand what the term really means.
Some CEOs think their core competencies are the things that generate revenue, so they set off on a wild goose chase of looking for the next great thing in areas where they have no expertise. A true core competency is typically defined as having three general traits: It’s hard for competitors to imitate, it can be leveraged widely across products and markets, and it provides benefit to the consumer.
For example, at Smart Business Network, our core competency is content. We started off as just magazines, providing content tailored to CEOs and other senior-level decision-makers. But as the market started to evolve from analog to digital, we changed with it. Our core competency of content didn’t change, just the way we presented it. We moved into events (presenting content via live speakers), e-mail newsletters (presenting content on a certain topic to a narrow niche), webinars (presenting content via interaction with an editor and subject-matter experts), custom magazines (presenting content from experts to their constituents) and websites (presenting content in digital form.) The common thread among all of these is content.
Content for us meets the three components of a core competency. It’s hard for competitors to imitate what we do because we have a 20-year track record of working with some of the top CEOs in the country to provide insight, advice and strategy to other leaders. The popularity of our magazines with senior-level executives gives us the access that others cannot duplicate. As illustrated by the number of places where our content is delivered, it’s being applied across several products and markets. And finally, our content provides a benefit to both the buyer and the consumer — the buyer gets a professional message delivered to a specific audience, while consumers get information that helps them run their businesses better.
It’s OK to change your products, just don’t change your core competency. We evolved from a magazine-only approach to deal with changing technology. People were consuming information from areas outside of print, and we had to adapt to survive. But through all the incarnations, we never lost sight that, for us, content is king.
Think of your product the way Coca-Cola looks at its soda. If you want a Coke, you can find a vending machine and get a 16-oz. bottle. You can go to the grocery store and buy a 12 pack of cans. Or if you are at a ball game, you can buy a cup from one of the vendors. It’s the same product delivered in a variety of ways. Wherever the consumer wants a Coke, there’s a way to get it.
This is similar to how we have approached content. If you want it in print, we do that. If you want it digitally through a website, we do that. If you prefer e-mail newsletters or microsites, that’s not a problem either. Custom content? We provide that, too.
Now look at your product or service. Are you making it available in every way possible? Are there avenues where customers are looking for your service that you haven’t taken advantage of? Would Coke be as successful if the only way to buy it was in a can from the local store? No. Are you limiting your own success by limiting the ways your product is distributed?
And in a similar vein, are you going outside of your core competency? Coke is a beverage company. It has its flagship products and has added on flavored waters and sport drinks as consumer tastes have evolved. But those market changes were dealt with by staying with its core competency. When people started becoming more health conscious, the company found a way to provide healthier drinks; it didn’t start a line of health clubs.
There are many other examples of companies that leverage their expertise without deviating from their core competency: UPS applies its logistics expertise through consulting and management services for clients; Dunkin’ Donuts sells its popular coffee in grocery stores.
If you truly understand what you do best and can find ways to apply it across multiple markets, success will naturally follow. Just be true to who you are and stick with your core competencies.
FRED KOURY is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or email@example.com.
In the sports world, there is a clearly defined champion each year. Every team strives to be the one that finishes on top, but most don’t make it. Many teams have good seasons and might be satisfied with that, but only one is the true No. 1.
The question to ask yourself is, what is your goal? Are you trying to be the No. 1 player in your industry? Or are you happy with just having the equivalent of a good season? A lot of you might say you are aiming for No. 1, but are you really putting in the effort to get there? Is everything you do focused on obtaining that goal?
Tiger Woods, Steve Jobs, Jack Welch and Warren Buffett know what it takes to win.
Building a championship team in any industry, whether it’s sports or business, is a full-time effort. Here are four observations on what it takes to get to the top.
Continuous improvement. Tiger Woods has a coach. One of the best golfers in our lifetime has a coach and works with him to get better. The coach challenges his thinking, pushes him to go further and doesn’t let him get complacent. Just because you are good at something doesn’t mean you can’t get better. The road to the top requires long hours of identifying every flaw in your organization and then working tirelessly to eliminate that flaw. Once you are on top, you have to work even harder, because all of your competitors will be using your success as the new benchmark. If you don’t work to improve even more, you’ll drop back to the middle of the pack. The day you think you know everything is the day you start to decline.
Look ahead. Winners identify trends before anyone else and are able to take advantage of that knowledge. If you are working on continuous improvement, you’ll obtain what you need to move quicker than your competitors. Why? Because you will have networked more than the next guy, talked to more of your customers and interacted with your employees on the front lines. You will have spent more time analyzing the data and reading up on the latest trends. When you put all this information together, you’ll start to see patterns that you can take advantage of. Steve Jobs of Apple has been ahead of the competition with almost every product he’s launched. In fact, some of his few failures have been partly because he was too far ahead of everyone and the market wasn’t ready yet. Jobs is able to look at consumer needs and combine that with technology trends to create new best-in-class products.
Desire. This one is simple. If you don’t have the desire to be No. 1, then don’t expect to be No. 1. To be a champion, you have to have the heart of a champion. Maybe this is something you are born with or maybe it is learned. Either way, if you don’t have it, you’ll never be the best. Jack Welch wanted to be at the top of everything he did. If he wasn’t going to win, then he had no problem selling off business segments and using the resources to build a champion in another area. There’s nothing wrong with just being a “good” business, but don’t try to fool yourself by saying you want to be the best when you don’t really have the desire to do what it takes to get there.
Commitment. One clue that you might be lacking the desire to be the best in your industry is a lack of commitment. If you are only working 40 hours a week, you are probably not committed to being No. 1. With the talent level of the CEOs who are out there, it would be almost impossible to work fewer hours than they do and expect to beat them. You have to be willing to outwork the competition and do whatever it takes to win. Warren Buffett would often start his day at 4:30 a.m., and he also saved $1,000 by the time he was 14 — a lot of money back in the 1940s. He was committed at an early age to being a success. Long hours and hard work are mile posts on the road to a championship. Do you have what it takes to win it all?
FRED KOURY is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or firstname.lastname@example.org.
If you had the chance to share with your peers a great way to handle a particular business problem, would you do it? Most of us would say yes, because most people like to help others and share their successes.
For instance, Michael Feuer, the founder of OfficeMax and our longtime columnist, has a book available this month that shares more than 40 business lessons he has learned while taking his company from a startup to more than $5 billion in sales. He covers everything from getting through the startup phase to selling a business. No matter what phase of business you are in, there are best practices that you can learn from someone who has already been there.
I’m proud to say that this book is from our book division, where we help top leaders translate their ideas into print.
These books aren’t about bragging about successes — they are about helping others learn lessons that can be slow and difficult to learn without guidance. Think of them more like business textbooks where you are the professor, helping people eager to learn or grasp complex issues.
Even longtime CEOs of highly successful companies are always on the lookout for new ways to handle old situations. Maybe you could be the one that teaches Jack Welch something new about how to handle employees, but that can only happen if you attempt to share your ideas with others.
Books can also be a great way to share your broader leadership concepts with your employees. When you have hundreds or thousands of employees, getting all of them to understand your strategy can be difficult when it’s in the form of short e-mails, videos or town-hall discussions. A book is a great way to explain the intricacies of your strategies and share lessons learned with your junior executives so they don’t repeat the same mistakes you did when you were coming up through the ranks. You can teach them firsthand how to navigate negotiations, difficult employees or tough customers, all without ever leaving your office. What better way to educate employees about your company than to explain in detail your rationale for how you go about making decisions and how you develop strategy? If getting employee and customer feedback is important to you, you can illustrate the book with examples of how to effectively do it so your managers can carry the message throughout the company.
Employees aren’t the only ones who can benefit. Longtime customers might be interested to know how you think so they can better craft solutions and products that fit your vision. When they better understand where you are going, new partnerships might open up opportunities for both of you.
A lot of CEOs think about writing a book, but few ever get around to it. The No. 1 reason is a lack of time. But when you have someone else helping you shape your general ideas and guiding you through the process, it doesn’t take as much time as you might think. It’s like any other transaction — when you have someone helping you through the process, it moves much faster than trying to figure it all out on your own.
Michael Feuer took the time to pen the secrets to his success, and the result is an outstanding collection of tips that even the most experienced CEO can learn from. It’s not only an entertaining read, but it will also help you run your business better. I highly recommend it.
If you’ve ever dreamed of putting your ideas to paper to help others find the same road to success you’ve found, why not make a commitment to doing it now? We’ve been helping CEOs convey their best ideas to the business world for more than 20 years now in various media. Shouldn’t you be next?
For more information about how the Smart Business Book Division can help you, please call (440) 250-7026.
For more information on Michael Feuer’s book, “The Benevolent Dictator,” go to www.thebenevolentdictator.biz.
FRED KOURY is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or email@example.com.
In this hyper-competitive economy, everything is about speed. How quickly can you get a new product out the door? How fast can you deliver a service to a client? How long until that report is done? No one needs anything now; they needed it 30 minutes ago.
The result is an environment that demands ultra efficiency at every level. Companies of every size have been turned into machines, with senior managers tasked with fine-tuning them to the specifications set by the CEOs. If a particular part of the machine is slowing it down, that part needs to be changed out for a better, more efficient one. The moral dilemma comes when you start looking at the parts — they are people, not pieces of metal. Too many CEOs are looking at people as a means to an end, rather than human beings.
It’s a danger of our capitalist society that some leaders look at just the numbers, forgetting that there are many names and faces behind each line on the budget. You can be torn between building a cash reserve or achieving maximum profitability to please investors and being fair to the people who may not be performing up to the standards you would like to see. The question is, what do you do about it?
The easiest solution is to simply get rid of the people who you think are holding you back. This was Jack Welch’s philosophy — chuck the bottom 10 percent each year and your machine will continue to get better. There’s no room in business for having a soft spot for underachievers and there is no time to bother with them, so out they go.
While this model may be best for the short-term finances, is it really the best way to go? How many of those people had potential, but didn’t understand what they were supposed to be doing? How many of them simply needed clear goals they could strive for? And was productivity hurt as people in the middle continually fretted about where they ranked within the organization? Also, at some point, your organization would be as efficient as it could be, meaning those in the bottom 10 percent might be pretty good employees — and you might be hard-pressed to do better when you go to replace them.
The tougher solution, at least from a straight business perspective because of the cost in time and money, is to invest in the people who aren’t allowing you to reach peak efficiency. This could range from making sure they understand their goals and the company objectives to investing in training and development so they have the right skill set to do their job in the best way.
If given the time and the opportunity to improve, many of the people on the low end of the performance scale will improve, and a select few will even blossom into full-blown superstars.
The new economy isn’t just a rat race; it’s a digital rat race with speeds increasing exponentially each year. You may want to invest in people, but your competitive environment may simply not allow you the time to do so.
Each business is unique, and there are pros and cons to both strategies. But what’s most important is that, regardless of which direction you choose, you never lose sight of the fact that there are people behind the numbers, and people are what matter most.
You may have never heard of Parker Hannifin, but there’s something you can learn from the $10 billion manufacturer of motion and control technologies and systems.
Its broad product line has allowed the Cleveland-based company to deliver results quarter after quarter and year after year, all with little fanfare.
It makes everything from parts that go on aircraft braking systems to nitrogen generators for wineries to hydraulic parts for hybrid refuse and delivery vehicles. If it’s a machine in motion, Parker probably either makes part of the machine or the entire system.
It touches on so many different industries, that a down cycle in any one of them doesn’t destroy the plans or goals of the entire company. With locations in 46 countries, the company has also created some insulation from local economic setbacks. If times are tough domestically, there may be better business to be found in an emerging market somewhere across the globe.
Diversification is one of the reasons the company has been able to pay its shareholders an increased dividend each of the past 54 years. Its overall risk is spread through industries and plants located all over the world.
There’s a lesson to be learned from Parker and other companies like it — you need to diversify your products and services to leverage the maximum potential from your brand’s reputation.
You can create new products in-house, you can form partnerships, you can add innovations to existing products or you can make acquisitions.
How many of these are you doing? Parker Hannifin has a track record of doing all of them. While you may not have the resources of a $10 billion company, the lesson can be applied at any level. Imagine if Parker only made automotive related parts? How would it have survived the challenges of that industry if that’s all it offered?
So where do you start? Focus on what you know best. What are your customers looking for? If you are only providing one piece of the puzzle, is there a way you can provide other pieces, as well?
Being smart about your diversification effort is just as important as the effort itself.
There’s a reason Parker Hannifin doesn’t own wineries. It sells parts and systems related to wine-making because its expertise is in motion control. A Parker-owned winery might be efficient and profitable, but it would take away the company’s focus from its core.
Take a look at what your own core is and figure out a way to make the most of it. If you don’t, you risk being squeezed out of the market by bigger players with better product diversity.
Fred Koury is president and CEO of Smart Business. Contact him at firstname.lastname@example.org.
Jeff Bezos, CEO of Amazon.com, has no problem making a big bet and sticking to it, even when conventional wisdom says otherwise.
He’s disciplined. He stays the course.
He started off in books and music and now sells just about anything, including his own e-reader device that threatens his own book distribution business.
And for 15 years, his discipline has paid off, making Amazon one of the best-run companies in the country with a stock price of well over $150 per share.
If you look at most successful CEOs, I don’t think you’ll be surprised to find that discipline, whether it’s mental or physical, is a key trait. When you are disciplined in something, you tend to be good at it. Discipline is the key root of success, because success is not by chance. It doesn’t matter if you are talking about running a company or staying fit, discipline leads, more times than not, to success.
Physical discipline is important to guarantee your long-term plans. You might be the smartest CEO in the world, but if you’re not eating right and are smoking two packs a day, you probably won’t be around long enough to see your success come to fruition.
Discipline is about getting the job done by whatever means possible. If you are not disciplined enough to stay in shape or stick to a diet, hire a trainer to help you. If you are already in shape, share your success and help others find similar results.
On the mental side, being disciplined means controlling your mind. There are a lot of things in this world that you can’t control, whether it’s the economy or government regulations, so there’s little point in wasting time worrying about them. Focus your energy on the things you can control — or at least make a difference in — and leave the rest alone.
Make sure you are well-rounded. Don’t sacrifice your family in favor of your business. Turn off your cell phone when you are spending time with your spouse and children. There will be time to return the call later.
Having this kind of life balance requires discipline. Don’t be one of the CEOs that sacrifices everything to grow a business only to realize 20 years later that they haven’t invested anything into their personal life — and it’s too late to do anything about it.
When you have the wherewithal to be focused on everything from your business strategy to your family, you’ll find you have time to do the things you want and enjoy your success along the way. You’ll be able to spend time focusing on what really matters, letting the trivial and the things you can’t control fall by the wayside. Being disciplined on the physical side means you’ll have the energy and health to enjoy your rewards.
A successful CEO is a disciplined CEO. And if you need help to find your discipline, Bezos has a number of books for sale that can shed insight into anything from how to manage 32 percent annual growth like Amazon has to books on weight loss.
There’s no time like the present to get started on your journey.
Bill Gates is well known for the Microsoft empire that he created. His software is the dominant operating system for the vast majority of computers worldwide. He took the word “window” from the world of architecture and made it a computer term. The company, where he still serves as chairman, had fiscal 2009 revenue of more than $58 billion.
What’s left for Gates to accomplish? He already has one of the most successful and well-known companies in the world. He dominates his industry and has leading positions in other technology sectors, as well. He’s sought after for his business knowledge and his leadership. But Gates isn’t satisfied with that.
He and his wife, Melinda, have donated more than $28 billion into their foundation to help some of the world’s neediest people. In short, he still has a lot left to accomplish. He has a sense of purpose.
He’s applying the same vigor and business strategies to helping people worldwide that he used to grow his software company. He could have sat back and enjoyed the rewards of a successful career, but his purpose was to make the world a better place, to cure crippling diseases and to give all children access to a solid education so they too could make the world a better place for everyone.
Gates clearly has a purpose in his life. Do you?
There are all kinds of different leaders in this world. Some are leading small companies, and some are running multinational corporations. It’s easy for the small company CEO with limited resources to look at the giant company and wish he or she was there instead. And it’s easy for the CEO of the giant corporation to yearn for the entrepreneurial freedom of a small company.
But what we should be doing is looking at where we are and deciding how we can make a difference right there. Just the fact that we live in the United States automatically means we have it better than more than 90 percent of the people in the world. Regardless of whether your company is struggling or thriving, you at least have the chance at making things better, and that’s something that a lot of people around the world can’t do.
Live your life with a purpose. Start turning negatives into positives and change the way you think. We should have a great attitude and always look at the bright side of things. If you had to take a pay cut because of a lack of business, be thankful you still have your CEO position. Profits may be down, but at least we still have a company.
It’s easy to look at the company across the street or across the country and wish you were them. There is always going to be someone who has it better than you but remember, there are people who have it a lot worse.
Start with the little things. Gratitude doesn’t have to cost any money. Write a thank-you card or personally congratulate someone for a job well done. This little gesture can go a long way toward boosting morale and making someone’s day.
Make your purpose to be the best person you can be and bring out the best in those around you. Maybe your mission isn’t as far reaching as Gates’, but it can have just as much impact to those around you.
If you are having trouble finding a purpose in life, I recommend reading “The Purpose Driven Life” by Rick Warren.
Last month I discussed the importance of having a vision for your organization because there are a lot of companies that don’t have one. The economy has wrecked the old ways that they did business and they are unsure what to do about it, so they keep doing things the way they’ve always done them.
That’s the worst thing you can do.
We are living in a new reality. Technology is taking over and we need to rethink everything that we do. The economy has changed and customers today want instant gratification. If you aren’t working toward solving customer problems in a timely manner and timely is defined in days, not months you will become irrelevant.
The first step to finding a new vision is to study your industry. Find the opportunities and think how your organization is set up to exploit them. If you can’t take advantage of them, then you need to change your organization so it can. Once you make the decision of what opportunities to pursue, you need to get buy-in, make your move and then live with the outcome.
When you are transforming a company, you have to move fast and not worry about making everyone happy.
There are two ways to lead: by consensus or by conviction. If you lead by consensus, you are more worried about poll numbers and if everyone likes what you are doing or not. If you are leading by conviction, you have studied the matter, made your decision and are moving on without looking back to worry about the “what ifs.”
Legend states that when Cortes led an expedition into Mexico, he burned his ships once everything was offloaded. He wanted his men to be focused on succeeding, not on the option of quitting and returning home empty-handed. He had a vision and the conviction to see it through.
You need to do the same thing with your vision. Reorganizing your company to meet new challenges despite the protests is your ship-burning ceremony. There’s no going back to the old ways because the old ways don’t have a future. Sure, there will be those that stubbornly cling to the old methods, but they’ll most likely be out of business sooner rather than later.
The need to change is best illustrated by IBM. The company started in the 1890s producing commercial scales and punch-card tabulators before moving into typewriters and other machines. By the late 1950s and early 1960s, it was already moving into computers. By the 1980s and 1990s, it was dominating the personal computer market. As the growth markets turned from hardware to software, IBM changed again to take advantage of the rapidly growing e-commerce segment. Today, the company is focused on providing all sorts of business consulting services, many of which are outside of traditional IT areas.
IBM burnt its ships many times. When it moved from simple punch-card tabulators to early computers, there were undoubtedly people who didn’t believe in that strategy. But where would the company be if it hadn’t made that move? What happened to all of IBM’s competitors who refused to change? Their only remains are small metal placards on the machines they used to make that now reside in museums. The placards are the tombstones in the cemetery of failed strategies.
If you want to avoid being the last maker of punch-card tabulators, you better study your industry and figure out what direction it’s going and then change your organization to be at the front of the pack. Once you set your vision, make the changes necessary to get you there.
But most importantly, don’t ever look back. Success isn’t in the past; it’s in the future. Burn the ships and move forward, no matter what.
It’s conviction, not consensus, that will get you there.
When the economy turned and things got rough, training was probably one of the first things that got cut out of the budget. While the move may have saved you money, you may have lost productivity or even seen morale go down as employees saw your investment in them dry up.
But as the economy slowly improves, now may be the time to reinstate your training and education programs. People need to have their skills upgraded to compete in today’s economy. The existing work force has a lot of pent-up demand for training.
This demand also cuts across many boundaries. There is a large number of people who are out of work and would like to learn new skills. There is also a large number of entrepreneurs and business executives who would like to learn about how to handle specific challenges.
But one of the ramifications of the tough economy is that the overall expectations of training and development have gotten higher. People want more of a personal return on investment.
One of the demands that people want to see with advanced training is more applicable skills. In the old days, someone would come in and lecture on theory and principle and participants were often left to figure out how these theories applied to them or their company. The training was also done at a location and time that was convenient for the trainer rather than the participants.
That model simply doesn’t work in today’s environment. Training needs to be delivered at a time and place that is convenient for the attendees. The delivery method might be via satellite with a top-flight trainer located in another state or even another country. It might be a set of webinars or other Internet-based methods. In fact, even the overall curriculum of a training track should be customized to maximize its effectiveness for you and your company. The one-size-fits-all, off-the-shelf solution just won’t cut it anymore.
One example of a solution to this problem is Global Corporate College, which focuses on finding the best techniques taught by the best people.
When choosing a training partner, you have to find one that will customize the curriculum to help people learn. The way an entry-level person learns is different than the way your vice president of finance learns, and if someone’s proposal doesn’t differentiate between the two, you should ask why.
For example, Global Corporate College works with each company to deliver custom content in whatever way makes the most sense for the organization. Through its network of 60 colleges and universities, GCC is now delivering training across the United States and in nine countries and has worked with companies like Green Mountain Coffee and Kansas City Southern Railway. Global Corporate College’s network allows it to deliver consistent content to wherever your employees are located.
Training is an important part of any successful organization, and providers like GCC can help you achieve your goals. But no matter what provider or delivery method you go for, make sure you are getting a return on investment in the form of usable skills or techniques. The economy is still rough and every dollar counts. Hold your training to the same high standards that you use throughout your company and you’ll ensure you are in good shape for the future.
Corporate real estate is too often taken for granted.
As the CEO, you are focused on your customers and their needs, and you probably don’t spend a lot of time thinking about real estate until either your lease is up for renewal or the roof starts to leak.
But real estate should be an important part of your business strategy.
There are a lot of factors in real estate that affect your company, both directly and indirectly. The one that is top of mind for most executives is cost.
Some companies opt to fix their costs as much as possible by buying space. For example, Target and Wal-Mart own the vast majority of their stores, and the value of the real estate they own helps the overall valuation of the corporations.
Other companies choose to lease so that their focus remains on their core com-petencies and the real estate management is left to others.
The route you take depends on your business plan. If you have capital, it’s a great time to buy your own space. On the other hand, it’s also a great time to secure a great space at lease prices that haven’t been seen in many years.
When you are analyzing your real estate needs, don’t stop at just costs.
If you are in a poor location, you may have increased costs because of vandalism or theft, and you will also have a harder time attracting top talent. If the location is difficult to get to, a long commute can encourage people to look for jobs that are closer to home.
Also, think about how your space reflects on the image you are trying to portray of your company. If someone claims to be a high-tech leader and you visit their office and find tattered furnishings and an outdated space that looks 20 years old, does that really say “high tech” to you or any other customer?
Consider how other companies use their spaces to reinforce their brand image. Go into the offices of a large law firm and you are likely to find a luxurious look that says, “We are high-class and have been around forever.”
It’s all about using your real estate to maximum effect. Look around your office and ask yourself what message your space sends to your visiting customers.
And it doesn’t stop with just the look of your space. How is the layout configured? Could you have people sharing space so you can reduce the amount of space you need (and the costs that go with it)? Is the space set up to maximize workflow? Or are you encouraging people to cooperate and act in teams in a space that limits personal contact and hinders communication?
Even if you are looking at just the bottom line, how much you pay in rent every month might be reduced if you take the time to have a professional analyze your situation and renegotiate with your landlord. You might have to add a few years to your lease, but in return, you’ll get a reduced rate and thus an improved cash flow.
Always try to get an exit clause in your lease if you can. You never know which way the market will go next and having an out can save you a lot a grief. And while it’s true that the market is battered and it’s a buyer’s market, don’t lose sight of your integrity. Even though you may have the advantage, treat your landlord with respect and negotiate a fair deal, because, as the old saying goes, what comes around goes around.
This buyer’s market won’t last forever, so now is a great time to figure out whether you real estate strategy is still meshing with your overall goals.