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.
You have all seen or know a CEO who has every technological gadget on the market. E-mails are routed to his phone, which are read to him by the computer via his earpiece. Voice mails are logged and sorted by importance based on preset filters. This person is so plugged in, he starts to resemble a robot with all of his buttons and screens attached to him.
You’ve also seen his nemesis: Mr. Old School. This person avoids technology like a disease. Forget about wireless headsets because if he has a cell phone, it’s only so the wife can contact him in an emergency. E-mails? He never bothers to check them even though the company IT guy gave him an address years ago. This guy is so anti-technology he’d power his company on wood-burning stoves if he could figure out a way to do it.
But the interesting thing is, both CEOs are successful. Both get the job done and know how to run an organization that turns a profit.
This brings up the question of how much technology should you personally be using? Some people embrace technology and have proven successful, while others abhor it and are likewise successful. So how much is the right amount?
For me, I know that there’s a lot of technology out there that would probably be beneficial, but I just don’t have the time to devote to it. Much of today’s technology requires an upfront investment in training, whether its reading the manual and trying to figure out how the gadget works on your own or having someone come to your office to show you all the bells and whistles. For me, I use some technology, but I know I could probably be getting more out of what I already have, but I just can’t find the time to get the training.
The other problem is, technology is evolving so rapidly; it’s a full-time job just trying to keep up with everything. Why spend time training on a device that may already be obsolete?
We face some of these same issues when it comes to implementing technology in our company as a whole. You want to make sure everyone has the tools he or she needs to be efficient but not pay for cutting-edge technology that costs more than any return you’ll ever see on that investment. When you are choosing technology for yourself, you can afford to spend more because it’s only for one person, and a small gain in time can pay big dividends for the company. But the problem is, while you may have every intention of getting the most out of the latest gadget, the day-to-day necessities of running a business often get in the way.
So how do you decide what technology is best for you? The key factor is comfort. Get recommendations from your friends who also run businesses and see what works for them and maybe they can give you tips on how to use it as well, eliminating some of the training time.
Maybe the most important thing is to be realistic with both the expectations for the technology and yourself.
Technology can help you find answers, but it isn’t the answer itself. Buying the latest gizmo isn’t going to solve your cash flow problems or necessarily make you more efficient. For example, if you had a hard time communicating your vision to employees before, the device may give you the means to do so, but it’s still going to be up to you to get the job done.
Technology is just a tool to help you build your business, so be realistic about what you will use and try to ignore the “cool” factor. Too often, technology is like that exercise equipment that sits unused in your house an expensive reminder of a good intention that never panned out. The equipment could help you get in shape, but it’s you that has to ultimately get the job done.
So keep that in mind when you are looking at the latest gizmo. Is it a tool that complements your style perfectly, or is it a $200 paperweight with a fancy screen? It’s up to you to decide.
FRED KOURY is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or email@example.com.
If your company invented the credit card, would you be looking to share it with some of your competitors?
Most companies would see it as too good to give up, and the first-to-market advantage would put them in a clear leadership role as the competition played catch-up. But what then? They’d fight to stay in front, margins would shrink as everyone jumped into the business, and then they would have a commodity on their hands. It might take years or even a decade or two, but if it’s a good idea, it’s going to attract imitators.
A branch manager at Bank of America invented the credit card as a way of streamlining bill processing at the bank. The BankAmericard program was an instant hit, and Bank of America began licensing it to other banks.
Dee Hock, one of the leaders of a group of BankAmericard licensee banks, proposed that the banks form an association a joint venture that would allow members to enjoy the benefits of a centralized payments system while competing fairly for their own interests. Hock became the new group’s first president. In 1970, Bank of America transferred control and ownership of BankAmericard to the newly incorporated National BankAmericard Inc., which changed its name to Visa in 1976.
Instead of fighting it out with a bunch of redundant systems, Hock’s organization allowed the banks to keep their own brands within an efficient, centralized system. The end result was that all of them benefited from the credit card revolution.
Hock’s example doesn’t mean you have to run out and share your latest invention with the competition, but it does show that you have to understand your market. You have to find a way to maximize the value of your products and services, and it starts with differentiation. You have to make your product unique from that of your competitors.
When you do that, it gives you a couple of advantages. First, there’s the obvious value-added that everyone always talks about. You can give them something others can’t, making your product more desirable. Second, it gives you a means to be able to avoid the squeeze of customers who are looking for exclusivity.
A company might be very interested in doing business with you because it sees how your product can benefit it, but at the same time, it doesn’t want you doing business with its competitors. It wants exclusivity with you, but it’s going to cost you business with someone else.
That’s where the differentiation comes in. By creating differentiated product lines, services, programs or whatever it takes, you can offer exclusivity in that category to one business and exclusivity in another category to someone else in addition to perhaps a “generic” product to everyone else.
People want products that offer them unique value, so you need to solve their problems by creating a supply for their demand. By differentiating yourself and your products, you will not only create happier customers, you can also command higher margins because you have something unique that the competition doesn’t.
Listen to your customers for clues on what they need. What are they asking for? What are they complaining about? Don’t make the mistake of settling for the status quo because that makes you just like everyone else.
Every business can find a way to differentiate itself. Sometimes, it’s as simple as packaging. For instance, soda companies now offer 6-ounce cans, 12-ounce cans, 16-ounce bottles, 20-ounce bottles and 2-liter bottles. Candy bar companies are doing the same thing. Their sweets now come in bite, miniature, standard and giant sizes.
Some food companies listened to their customers’ needs and are now private-labeling for supermarkets rather than trying to fight their way onto the shelves using their own brand, making them more of a packaging business and a business that can provide products to multiple supermarkets using their brands, creating a different kind of exclusivity.
The point is, you have to find a way to be different, and the best way to do that is to listen to your customers. When you do that, you’ll find ways to make your company better than the competition.
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.
According to the Bible, "People perish for lack of vision." And businesses can, too.
Whenever we are in a position of leadership, we carry the responsibility of having the vision. I once wrote a column on what it takes to be a visionary. There is a big difference between being a visionary and seeing the vision to completion.
Many people have a wonderful vision but lack the patience and perseverance to see it all the way through. We live in a place where so many want instant gratification. Instant has become the word of the decade. It is all around us and we are being brainwashed by it and not even recognizing it.
Instant tea or coffee for anyone to drink? How about some instant oatmeal or rice to eat? Maybe an instant lottery ticket to get rich?
When the going gets tough, everyone wants to bail out. We see it all around us. In the business world, there is little loyalty to the company anymore from the employees. We also see employers looking out for themselves first and others second.
We see it in marriage with increasing divorce rates. Church-hopping is at a record high. People aren't happy at a church, so they attend another. No one wants to stick it out and turn things around. Visions are rarely completed because people do not persevere.
Here are the four steps it will take to see your vision completed.
1. Have commitment. In good times and bad, keep moving forward. If it were easy, everyone would complete his or her vision.
2. Have realistic expectations. Set goals to reach along the way and achieve them. Once you have reached one set of goals, formulate your plan for the next ones. Don't set goals that are impossible to reach.
3. Have accountability. Hold yourself and others accountable for reaching goals along the path to success. Make changes if necessary to keep moving toward your ultimate vision.
4. Have a purpose. Always know what you are working toward in life. What purpose will your vision serve? Understanding how your vision fits into the big picture helps keep you motivated to move toward it.
To see your vision through, you need to know where you are going. Too often, people are going in circles with no clear purpose in mind. Don't be another person with a vision that someone else ends up implementing because you weren't willing to go the extra step.
"Dee who?" you are probably asking. Some 30 years ago, Hock developed a revolutionary global system for the electronic exchange of value. While you may not know Hock, you know his brainchild: Just open your wallet and pull out your Visa card.
I consider Hock one of the great visionaries of our time, his talents made all the more impressive by the fact that he put his ideas into action and created a monumentally successful business -- some would say the biggest enterprise in the world -- while keeping a low profile.
I'm sharing some of the key philosophies I gleaned from that article in the hope that you can benefit from them. I encourage you to read the entire article, available online at www.fastcompany.com.
* Business plans. Are you looking for a ironclad plan for success? Don't take Visa's, it won't work for you, Hock says. Neither will any long-term plan.
"The world is changing too fast, making detailed plans obsolete before you can implement them," he tells the magazine. "What we all need is a clear sense of direction and beliefs in which we operate by, and this lies within each one of us."
Instead, he advises, define a purpose for your organization that everyone can believe in. Then devise principles to help you achieve that purpose. It's hard work -- it took a year at Visa -- but it is essential for everyone to be on the same page.
* Employees. People make up an organization, and Hock's view toward "associates" is unflinching: "Hire and promote first on the basis of integrity; second, motivation; third, capacity; fourth, understanding; fifth, knowledge; and last and least, experience. Without integrity, motivation is dangerous; without motivation, capacity is impotent; without capacity, understanding is limited; without understanding, knowledge is meaningless; without knowledge, experience is blind."
* Compensation. Hock's take on money is enlightening: "Money motivates neither the best people, nor the best in people," he says. "It can move the body and influence the mind, but it cannot touch the heart or move the spirit. That is reserved for belief, principle and morality."
* Leadership. Hock calls this "the very heart and soul of the matter." Leaders must first understand that they "work for" their subordinates, not the other way around. "Lead yourself, lead your superiors, lead your peers and free your people to do the same. All else is trivia."
Each month I try to keep my column focused on broad topics of management and leadership so it can run in all of our publications. However, this month, I want to highlight the staff of one of our markets because of an award they won.
While we have won many awards over the years, this one is very special to me.
The Press Club of Cleveland conducts an annual Excellence in Journalism Awards contest in which publications from across Ohio enter their work. From the biggest dailies to the smallest trade journals, most publications and their staff members strive to take home one of these coveted prizes.
Last month, the winners were recognized at an awards dinner in Cleveland. Among the writers honored were our own Morgan Lewis Jr. (first place - Personality Profile, and honorable mention - Public Service/Investigative Journalism) and Kim Palmer (second place - Trends).
But the highlight of the evening was the Best in Ohio awards, in which Smart Business Cleveland took first place for best business publication in the state.
I would first like to congratulate all of our Cleveland staff for making this award possible and to let you know how much I appreciate all of the hard work and effort you put into making the magazine the best it can be. The hard work you put into each issue clearly was not lost on the judges.
Next, I would like to thank our readers. Without you, we would have no magazine. The publication you hold in your hands today has evolved into what it is because of the feedback you have given us through the years. Every year we take your comments and change our product to better meet your needs.
Third, I would like to thank our advertisers. Without you, there would be no revenue to pay for producing our magazine. In addition, you are the people who hold us to a higher standard.
Because of your demand for quality, we have tried to continually improve our product so that it meets your high standards. I think this award shows we've had some success in that regard.
Lastly, I would like to thank Publisher Michael Marzec, Executive Editor Dustin Klein and the rest of the Smart Business Network team for all of their dedication and hard work. There is no I in team, and it was truly a team effort that won this award.
Congratulations to all of you.
SBN Online has been streamlined to make it as easy as possible to get the information and tools you need every day. We have organized the content into industry-specific pages -- from Accounting to Manufacturing to Technology -- that now serve as a starting point for your business day.
Just go to www.sbnonline.com, choose your city and preferred industry, and here's what you'll get.
- Local breaking industry news prepared by SBN's staff of experienced business writers, complete with links to additional sources of information.
- National breaking industry news provided by an array of leading sources from national news organizations -- such as the Associated Press, New York Times Syndicate and U.S. News & World Report -- and leading trade publications such as American Banker, InfoWorld and IndustryWeek.
- Local promotions in the industry, including detailed information on the person's background and experience.
- A calendar of local events relating to the industry.
- Feature articles involving leading companies and key issues pertinent to the industry.
- A comprehensive list of quick links to the most valuable tools, contacts, research and other information on the Web.
The next time you come back to SBN Online, we'll take you directly to your industry-specific home page.
If you haven't used SBN Online before, please give it a try. I think you will find it the most useful business site on the Web.
If you are a current SBN Online user, I hope you agree we have made it even more valuable and easy to use.
As an extra incentive, all users who visit SBN Online and sign up for our e-mail news alerts will be eligible to win four tickets to the 2003 British Open golf tournament in July. For details, see the SBN Online User's Guide included in this issue, or go to www.sbnonline.com.
Many companies would just as soon forget about the past two years, but we can't. It is crucial in times like these that a company's leadership remains focused and calm. Don't panic.
Last year I shared a friend's story about a pilot flying during a bad storm. He said that no matter how bad the weather, the pilot is trained to remain calm and stay focused on the end result of landing the plane safely.
As CEOs, we are piloting our planes through the business storm. I didn't know then was how long the storm was going to last, but the principles remain the same.
Here are some recommendations to help keep you focused.
1. Make the tough decisions. Leaders should not be afraid. People want to be led and know that the person leading is making decisions for the good of the company. The slow economy means more difficult decisions lie ahead. Be prepared to make them.
2. Manage profit. To exist today, a company must be profitable. Focus on areas that bring in revenue and re-evaluate those that don't. Drop less profitable products and services.
3. Be innovative. Know what separates you from your competitors. In order to serve your customers, it is critical to offer something that differentiates you from the pack.
4. Be patient. Good things come to those who wait. The farmer sows the seeds and has to wait the entire season to see the results of that labor. Remember, slow and steady wins the race.
A new year brings new opportunities, and with new opportunities come new challenges. The economy may improve or it may get worse, but either way, it's up to you to remain calm.
You are the pilot of your business, and people's livelihoods are depending on you. Stay the course, and good things will happen.