What Business Stage Are You In? – Part 2

Here’s the second part of our series on the “7 Stages of Every Growing Business”  that Les McKeown, President and CEO of Predictable Success, described in his Inc. Live presentation last October.  Part 1 summarized the first two stages, Early Struggle and Fun.  In this part, we move on to the next two important stages, White Water and Predictable Success.

As we left the business last week, it was in the latter part of the Fun stage.  It’s grown rapidly, become more and more complex, and the team is having difficulty managing it effectively, and losing control.  At this point, the business now has a critical decision to make about its future.

There are only two real choices;  1) Stay small and continue in the Fun stage for as long as it can survive, or  2) Take the actions necessary to move forward, and grow the business for the future.   The business can’t have it both ways, it must choose one of these directions.
If it decides to grow, it will need to enter, and successfully pass through the next stage, White Water, to scale for future growth.  A businesses cannot scale from Fun to Predictable Success without going through this stage.

Stage 3 – White Water

The decision and commitment have been made to scale up for growth, and the business is now in the water.  However, it is now much more complex, with more products and services, customers, people, and management.

The business activity has outstripped its capacity, capabilities and resources, and it’s out of control, losing focus on its direction, and customer requirements and expectations.  As a result, customer problems and complaints are piling up, in terms of service, quality, and delivery, etc., operational issues are increasing costs, and customers are beginning to defect to competition.

The first tendency is to try to sell more to prop up the business, but this strategy will only make matters worse, as the problems and issues continue to increase with the level of activity.

To survive and make it through this stage, formal Systems, Processes, Structure, must be developed and implemented, the Culture may need to change, and an expanded Management Team put in place to effectively manage, stabilize, and get the business back under control.   In most instances, however, the initial team and programs won’t work out, and the business will remain unstable for a period of time.  In fact, it may take several years and attempts, and different team members, to finally get through this stage.

Also, during this stage, the business may go back and forth between Fun and White Water several times, and it will be a very painful process, fraught with challenges and opportunities.  But, successfully navigating through this stage is absolutely necessary for future scale and growth.

The strategy is to develop and implement formal Processes, Systems, and Structure, Change the Culture (as needed), and to recruit the proper Management Team to effectively manage and control the business to provide long-term growth.

Once the business has successfully passed through this stage, it is now positioned for ….


Stage 4 – Predictable Success

The business has finally made it through the White Water stage, after several attempts.  The Systems, Processes, Structure, Culture, and Team, are all in place and working well, and it is stable, growing, and profitable.  Life is good for now.

Growing and maintaining the business in this stage, will require an ongoing, dynamic process of evolution and adjustment to consistently meet the changing expectations of the market, customers, and other stakeholders over time.  As long as the business continues to do this, and maintain its focus on its vision, strategy, and customer base, it can remain in this stage for a long time.

The strategy is Keep Doing It, Evolve as Needed, and Grow the Business.  

With long-term success, however, there is a danger is that, over time, the business may become too successful and stop evolving, resulting in complacency, a bloated and bureaucratic organization, and a loss of focus on vision, direction, and most importantly, its customers.  Once this happens, the business may eventually fall forward through one, or all, of the last three stages, including Treadmill, Big Rut, and finally, Death Rattle.

What will happen next?  Will the business survive?

We’ll find out in Part 3, next week!

“The great thing in this world is not so much where we are, but in what direction we are moving.” – Oliver Wendell Holmes

 “Making an enduring company was both harder and more important than making a great product.” –  Steve Jobs

What Business Stage Are You In? – Part 1

In an Inc. Live presentation last October, Les McKeown, President and CEO of Predictable Success, described his “7 Stages of Every Growing Business”.  These stages can help to define why some businesses grow and succeed, while others stall and/or fail.

In keeping with our recent posts on Business Growth and Strategy, we thought it would be helpful to provide an overview of each stage, and the related strategy and actions necessary to move a business forward.  Obviously, there are a great many factors, management skills, and organizational requirements that are required at each stage to make it through to the next one.  The complete series is at www.inc.com/les-mckeown/7-growth-stages-of-every-business.

As McKeown noted, all businesses will eventually pass through some, or all of these stages in their lifetime.  Each stage brings with it a different strategy, organizational culture and requirements, and a set of challenges that must be met to grow the business.  It is critical that a business understands these stages, what stage they are in at the moment, and hopefully avoid some of the hard lessons that other businesses have experienced.

The 7 stages include the following, in order:

   1. Early Struggle
   2. Fun
   3. White Water
   4. Predictable Success
   5. Treadmill
   6. Big Rut
   7. Death Rattle

As noted, a particular business may not pass through all of these stages, but as it grows, it will move through the stages in this order.  While there is no set duration for each stage, it is critical that the business make decisions about where it wants to go, to survive, and move on to the next one.

In this post, we’ll discuss the first two stages, and the strategy required to move to the next level.  The balance will be covered in our next posts.

Stage 1 – Early Struggle

This is the beginning stage for every business, the struggle to get, and keep it, going, and finding the Profitable, Sustainable Market (or PSM) for the long-term success.  It’s a race against time, and the most dangerous stage, with 80% of businesses failing in the first 3 – 5 years.

This requires an intense focus on identifying that PSM.  However, keep in mind that one large customer is not the PSM.  While that one customer may be profitable, at least in the short term, the customer base must be diversified, over time, to be truly sustainable.

Finally, this stage is also all about cash flow, and the ability of the business to fund itself, in any way possible, to survive and move to the next stage.

The strategy is to Find the PSM, Stop Being a Start Up, and get out of this stage as soon as possible!

 

Stage 2 – Fun 

The business has managed to survive, found its PSM, and can now mine it for growth, which can be dramatic.  In this stage, it can now have some Fun, grow, and build the myths and legends of the business.  The mantra is “do whatever it takes to grow the business and please customers.”

Sales and Profits are increasing, and there is usually a simple organizational structure, infrastructure, and processes in place to run the business.  The team is pulling together, improvising, and tap dancing every day, to make things happen and take care of their customers.

The strategy is “Sell More, and Grow!”.

As the growth continues over time, the complexity of the business will increase to the point that the management team cannot effectively manage, or control it.  The business is falling forward into Stage 3 – White Water.

It has a decision to make for the future – what will it be?

Stay tuned!

 “Think big, start small, then scale or fail fast.” – Mats Lederhausen

Organizations Need Metrics

Let me ask you a few questions about the performance of your organization so far this year.

  • Is it Performing To Your Expectations?
  • Do You Know Where You Are (after 4 months of the year)?
  • Are You Making Progress Toward Your Objectives? 

If you can’t answer these questions quickly, without having to read a bunch of reports, then I’m willing to bet that you really don’t know how your organization is really performing, and if you’re on course.

As we’ve noted in the past, successful organizations have a formal business plan, and a budget to achieve that plan.  The business plan provides the overall direction and key objectives for the organization, and their budget is the chart to help plot the course, identify the current position, and measure progress toward the objectives.

There is, however, a third component that all organizations should have in place to quickly evaluate their performance – a set of Key Performance Indicators, or KPI’s.  KPI’s are specific, quantifiable targets to measure the critical factors that are essential to the organization reaching its objectives, and can provide information about its performance in those key areas. Every organization will have their own individual set of KPI’s to measure their performance and progress, and identify actions required to improve that performance over time.

In order to set effective KPI’s, an organization must establish its objectives in the business plan and related budget, and then choose those KPIs that best reflect the objectives that are essential to the organization’s success, and can be measured.  Think of them as a dashboard that will tell you the performance in key areas of the organization at a glance.

Generally, most organizations will have up to five primary KPI’s, although each department may have a separate set of KPI’s that support to overall organization objectives.  More than five will dilute the organization’s focus, and be distracting vs. helpful.  In addition, most KPI’s are usually are long-term, so the definition of what they are, and how they are measured, should not change often, unless the organization’s objectives change, or it gets closer to achieving a particular objective.

Effective Key Performance Indicators will:

  • Reflect The Objectives of the Organization
  • Be Specific Factors That Are Critical to the Organization’s Success
  • Be Measurable, and Include Specific Performance Targets

Once you have the set of Key Performance Indicators that define your organization’s goals, and can be measured, use them as a performance management tool.  Effective KPIs will give your entire organization a clear picture of what is important, what actions are required, and insure that all activities are focused on meeting or exceeding them.

While it may be possible to manage without a plan, budget, and KPI’s in the short-term, I can guarantee that your organization will survive, and be much more successful, with all of these elements in place.

If you would like to discuss your organization’s particular issues, please give us a call at (727) 637-4666, or email me directly at Don@HuttlinAssociates.com.

“It is an immutable law in business that words are words, explanations are explanations, promises are promises but only performance is reality.” – Harold S Geneen

“Manage your destiny, or someone else will.” –  Jack Welch

“What’s measured improves.”Peter F. Drucker

“If you don’t drive your business, you will be driven out of business.”B. C. Forbes

 

Are We Having Fun Yet?

Since our last few posts have covered a number of serious and heavy subjects, we thought this one should be a bit lighter, while still providing some useful information.

As the title suggests, let me ask you two questions.

1. Is your organization having fun and enjoying participating as part of the team?
  2. If not, what can you do to make the culture and the environment more enjoyable for everyone?

If you’re not having fun and enjoying what you’re doing, chances are that your organization isn’t either, and will be less effective, productive, and successful over the long run.  Since you and the team spend most of your waking hours at work, you should enjoy the time that you’re there, otherwise, why bother?

Many articles have been written about this subject, and some have a “formula” to follow in order to improve the organizational culture.  But, when you come right down to it, there are a few things that you can do that will make all the difference.  Oh, and by the way, I’ll be the first to admit that it took me a long time to learn them, and learn them I did, mostly the hard way.

  • Loosen Up

Operations are serious, no doubt, especially when things aren’t going particularly well.  However, rarely, if at all, are the issues or decisions that you are facing, life or death (although at times they may feel that way!).  Yes, there are times to be serious, and there are times when you can lighten up and keep your team loose.  In the long run, this will improve decision making, and the organization as a whole.

  • Have Patience

 Stuff happens in every organization, maybe in some, more than others.  The question is how you deal with it. If you approach the issue/mistake calmly, with a  desire to learn for the future, there is a very good chance that it won’t happen again.  However, if you’re yelling, and/or looking for someone to blame, you’ll create an atmosphere of fear, and the organization will run scared, trying anything to avoid making a mistake, and/or being taken to task or blamed for that mistake.  At the same time, two other things will happen: 1) mistakes will increase because everyone is trying too hard not to make a mistake, and 2) the organization will stop taking “prudent” risks to improve the business because it is afraid of being blamed if something goes wrong.

Note that I’m not suggesting that the organization lower its standards.  Quite the contrary, set high standards, be very clear about them, and make sure the organization lives up to them, which leads to my next point.

Talk with your team about the organization, direction, performance standards and improvement, and what is required to succeed in your market.  People want to know where they stand, and why, and you should be communicating that to them, clearly.  At the same time, ask for their help in resolving issues and improving performance.  Nothing works better than an organization that has active participation and engagement, at all levels, and is moving in the same direction.

By communicating both ways, you’ll find out all sorts of interesting things, including ideas to improve the organization from the people who are actually doing the work.  This will make for a much happier and productive organization over time.

  • Have Fun

Have fun while you’re there.  Organize some fun, inexpensive events that get people involved, and lighten things up.  Doing this consistently will improve participation and engagement, and the overall environment of the organization, and becomes infectious over time.

While these things may not seem difficult, they are a challenge to do, and do consistently.  However, by doing these things, you’ll have a much happier, effective, committed, and participative organization ready to take on anything.  And that’s exactly what you want!

“A business has to be involving, it has to be fun, and it has to exercise your creative instincts.” – Richard Branson

“Find a job you like and you add five days to every week.” –  H. Jackson Brown

“If you don’t do it excellently, don’t do it at all. Because if it’s not excellent, it won’t be profitable or fun, and if you’re not in business for fun or profit, what the hell are you doing there?” – Robert Townsend

Leadership Principles – Volume 3

In this, the final post of our Leadership series, we look at the last three of George Marshall‘s Nine Principles, including:

  • Focusing on the Big Picture: The Principle of Vision
  • Laying the Groundwork: The Principle of Preparation
  • Sharing Knowledge:  The Principle of Learning and Teaching

We’ll also distill all of the Principles and postings down to a simple summary of what it all means.

First, let’s review the last three, and how they can apply to your organization.  While these particular principles apply to the leader, they also have a significant impact on the entire organization and how it operates.

Focusing on the Big Picture: the Principle of Vision
Every organization must have a vision that defines its direction and objectives for the future.  Unfortunately, many small and medium size organizations (and some large ones, as well), do not have a vision, or have a vision that has not been shared.  As a result, these organizations tend to swing from one direction to another over time, with no alignment of performance or goals, and their leaders tend to apply the management solution du jour to try to identify where it is ultimately going.

Effective leaders first establish a vision, and communicate it, clearly, to the entire organization.  This allows for  identification of those areas/actions that the organization must focus on, and alignment of the activities and objectives required to achieve that vision.

Leaders must also identify the members of the organization that either choose not to support the vision, or that can’t or won’t see the big picture, and move them out quickly.  In addition, trivial activities, that don’t move the organization in the right direction, should be avoided so as not to get bogged down, or distracted.

Laying the Groundwork: The Principle of Preparation
As organizations begin to make significant progress toward the vision, some leaders may get complacent and put the required activities on auto pilot.  As a result, they are surprised when events or issues occur that take them off course, and/or threaten their future. The key is to prepare for these potential events.

First, there is no such thing as an organization just staying in place.  If it is not moving forward, it is actually moving backward.  The leader and organization must constantly review their operations to identify for new opportunities for growth and improvement, and worst case scenarios.  This ongoing review will allow the organization to prepare and plan for the potential future, and stay on course, regardless of event.

Sharing Knowledge:  the Principle of Learning and Teaching
As noted above, organizations cannot stand still, and must constantly evolve, and move forward through learning and teaching.  This is especially true in today’s environment, where conditions and technology are changing so quickly, that it is critical to understand and stay ahead of those changes.  Without this learning and teaching, organizations continue to repeat the errors of the past.

Effective leaders learn constantly and share their learning, expertise and vision with their organizations on a regular basis.  In fact, Jeffrey Immelt, the Chairman and CEO of General Electric, states that one of a “leaders primary role, is to teach the organization. People have to feel that you are willing to share what you’ve learned, and what the organization is doing, in terms that are understood by all.”

One tool to accomplish this is for the leader to ask their organizations from time to time, “What do you think we should do?” to resolve a particular issue.  This helps the leader connect with, share, and teach their organizations to think constantly about different ways to solve problems and issues, and exploit new opportunities for the future.

What Does This All Mean?
If we summarize the Nine Principles, and related postings over the past few weeks, we can simply say that:

True leaders have the values and courage required to establish, and communicate, the vision and direction of the organization.  They establish open cultures that encourage communication and debate, live the values, focus and align activities around the big picture, avoid trivia, and constantly learn and teach the organization to think, prepare for, and identify opportunities and issues. Their organizations are always moving toward the vision, constantly improving, and achieving long-term success.

“A leader is one who knows the way, goes the way, and shows the way.” – John Maxwell

“The very essence of leadership is that you have to have a vision.  It’s got to be a vision you articulate clearly and forcefully on every occasion.  You can’t blow an uncertain trumpet.” – Reverend Theodore Hesburgh

“A true leader has the confidence to stand alone, the courage to make tough decisions, and the compassion to listen to the needs of others.  He does not set out to be a leader, but becomes one by the equality of his actions and the integrity of his intent.”Douglas MacArthur

“Leadership and learning are indispensable to each other.” John F. Kennedy

Leadership Principles – Volume 2

In this week’s post, we discuss the next three of George Marshall‘s Nine Leadership Principles, including:

  • Speaking Your Mind: The Principle of Candor
  • Choosing and Rewarding the Right People: The Principle of Fairness
  • Supporting the Troops: The Principle of Caring

These three principles relate to how leaders communicate with their organization, establish a culture that rewards straight talk and candor, have the right people in place, and finally, take care of those people.

Let’s look at each of these principles and how they may apply to your organization.

Speaking Your Mind: The Principle of Candor
In many organizations, speaking up, straight talk, and candor are frowned upon, even at the highest levels.  While much lip service may be paid to these attributes, the organizations either penalize those individuals that speak up by labeling them as “troublemakers”, or, in the case of bad news, “shoot the messenger”.  These organizations also tend to obscure the information behind “corporate-speak” to avoid having to deal directly with contentious issues, “breathe their own exhaust”, and make decisions that may not be in the best interests of the organization because the culture does not allow debate or dissent.

Effective leaders that apply straight talk and candor, in all of their communications and relationships, create a culture of trust that promotes open discussion and debate, and in fact, rewards it.  As a result, not only are these leaders trusted and credible, their organizations openly share information, are aligned in the same direction, make good, well thought out, decisions, and execute on those decisions.

Choosing and Rewarding the Right People: The Principle of Fairness
There are actually two parts to this principle, which should be considered one of the primary tasks of a leader.  In his book “Good to Great“, Jim Collins calls this “Getting the Right People on the Bus”.

The first is identifying, and recruiting/promoting, the best person for each position and/or assignment based on the requirements of the organization, cultural fit (as applicable), and individual attributes. The element of fairness comes into play when the person is considered and selected on the basis on proven performance and attributes, and not necessarily because they were the “next in line”.

The second part of this principle is that once the right people are place, the leader and organization must actively support their efforts, and reward them with loyalty.

Effective leaders make these decisions, not on popularity, favoritism, or seniority, but on the basis of integrity, performance, judgement, and the ability to speak their mind for the good of the organization.  Having the right people in place improves delegation, organizational decision-making, information flow, and the overall performance of the organization.

Supporting the Troops: The Principle of Caring
Now that you have established an open culture, and have the right people in place, the final principle is to take care of them.

Morale is another key task of a leader, and one that cannot be delegated.  People want to know that their leader,and organization, has their best interests at heart, respects them as individuals and employees, values their efforts, and actively demonstrates that support and concern.  In many instances, it will be the little things that count, and work to demonstrate that support and value.

Effective leaders demand top performance, get out and talk with their people, tell them the truth, listen to their suggestions and concerns, and take action where possible.  Organizations that have good morale, and show respect for their employees will be more successful.

Utilization of these principles requires leaders that have a strong set of personal values, moral courage, and are secure enough to listen to and accept dissent for the overall good of the organization.  Those leaders can apply these principles to establish a high performance culture that speaks candidly, rewards performance, and values and supports each individual leading to the long-term success of the organization.

“Before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others.” — Jack Welch

“A real leader faces the music, even when he doesn’t like the tune.” – Anonymous

Leaders who make it a practice to draw out the thoughts and ideas of their subordinates, and who are receptive even to bad news, will be properly informed.  Communicate downward to subordinates with at least the same care and attention as you communicate upward to superiors.” — L. B. Belker

Leadership Principles – Volume 1

This is the first installment of our series on the Nine Leadership Principles followed by George Marshall.  In this post, we’ll focus on three of these principles including:

  • Doing the Right Thing: The Principle of Integrity
  • Mastering the Situation: The Principle of Action
  • Serving the Greater Good: The Principle of Selflessness

Leaders that want to use these principles (and the other six) to guide their actions, and those of their organization, must have self confidence, strong core values, moral courage, and backbone.  If any of these attributes are lacking, these principles will not be effective, leading to uncertainty, confusion, and a lack of trust and credibility throughout the organization, and its outside relationships.

Before deciding to use these principles, however, there are several questions that leaders should ask themselves:

  • Do I have the attributes required to effectively use these principles?
  • What is the message that I want to send to my organization?
  • What is the culture that I want my organization to have?

Let’s look at the first three principles:

Doing the Right Thing: The Principle of Integrity
This is, in my opinion, the most important of the nine principles, both for the leader and his organization.  Without integrity, and the ability to define and do the right thing in any situation, a leader cannot build trust and credibility in his leadership.

Using this principle means using the attributes defined earlier, using integrity to identify the right course of action, and taking full responsibility for that action and outcome, regardless of the consequences.  By doing so, the leader holds himself to a high standard, and sets the expectations for his entire organization.

Mastering the Situation: The Principle of Action
Too many times, leaders and their organizations, put off decisions and action, hoping that the situation will get better, or just go away, with time.  They spend more time on planning, discussing, meeting, and gathering information vs. actually making the decision.  In general, most situations, unlike wine, don’t get better with age, and the consequences are usually far worse by waiting.

Effective leaders are willing to step up and take the right action required in a given situation, even if they don’t have all of the information they would like to have.  They take their best shot based on the information available, and act when necessary.  While mistakes can and will be made from time to time, it is far more important to act rather than sit and wait for something to happen. As the Nike commercial says – “Just Do It!”.

Serving the Greater Good: The Principle of Selflessness
In his book, Good to Great, Jim Collins defines a Level 5 leader as “one who channels their ego needs away form themselves and into the larger goal of building a great organization”.  These leaders direct their energy and ambition to the organization vs. promoting their self interest.

Leaders that use this principle base all of their actions and decision on what is right for the organization as a whole, not how it will affect them personally. They let their actions speak for themselves and look beyond the personal benefit to the long-term interest of the organization.

The leaders that utilize these principles consistently do the right thing, and take action for the good of the organization.  By doing so, they establish the standard and build a culture that follows these same principles over time, resulting in a committed and successful organization.

If you have any comments or questions, or would like more information, please call us at (727) 637-4666, or email me directly at Don@HuttlinAssociates.com.

“The supreme quality of leadership is integrity.” – Dwight Eisenhower

People buy into the leader before they buy into the vision.”  —  John Maxwell

“The art of leadership is saying no, not saying yes. It is very easy to say yes.” — Tony Blair

“A good plan violently executed now is better than a perfect plan executed next week.” –  George Patton

Clear Principles Equal Great Results!

Every week, there are a number of articles and posts on the subject of Leadership that provide thought provoking and useful advice that can be utilized in many organizations.  However, with all of this information available, how does one identify the best practices that can be applied to their own organization?

Truly effective leaders have a set of principles that they utilize to guide their actions and decision making in any situation.  As a result, these leaders generally deliver great, sustainable results, and their organizational cultures reflect those same principles.  In the end, Leadership is judged and “defined by results” (Peter Drucker) that are achieved by the organization.

In 1964, Jack Uldrich wrote a book titled George MarshallSoldier, Statesman, Peacemaker; Lessons in Leadership” that described a set of Nine Principles of Leadership that Marshall used to guide him and his organizations throughout his long and varied career.

The Nine Principles are as follows:

  • Doing the Right Thing: The Principle of Integrity
  • Mastering the Situation: The Principle of Action
  • Serving the Greater Good: The Principle of Selflessness
  • Speaking Your Mind: The Principle of Candor
  • Laying the Groundwork: The Principle of Preparation
  • Sharing Know ledge: The Principle of Learning and Teaching
  • Choosing and Rewarding the Right People: The Principle of Fairness
  • Focusing in the Big Picture: The Principle of Vision
  • Supporting the Troops: The Principle of Caring

Even though this book was written almost 50 years ago, these principles have stood the test of time, are just as valid today as when they were first written, and can be utilized by individual leaders to establish the culture of their organizations.  When you really think about it, every member of an organization can be considered a leader at some level, and can utilize these principles in their daily activities, as well

Also, note that many of these principles have appeared in other management and leadership texts.  While the principles may have a different name, or description, the essence of each one is generally consistent including integrity, action, candor, preparation, and having the right team, among others.  For example, in his book,Good to Great, Jim Collins talks about “Level 5 Leaders, Who then What, Confronting the Brutal Facts, and a Culture of Discipline”.  All can be directly related to Marshall’s principles above.

All organizations have leaders.  However, those organizations that produce sustainable results will have a leader that follows these principles personally, and makes them a part of the organizational culture.  The effective leader cannot pick and choose which principles he will use, it is an all or nothing proposition, and all must be present for success.

The leaders and organizations that choose to utilize and apply these principles will ultimately produce great results, and achieve success.

Over the coming weeks, we will be focusing on these principles in greater detail, with practical applications, and how each one can be applied to your organization to improve and drive overall success.

“Effective leadership is not about making speeches or being liked; leadership is defined by results not attributes.”  – Peter Drucker

“Leadership is the art of getting someone else to do something you want done because he wants to do it.” – Dwight D. Eisenhower

 

What Does Your Customer Want?

In last week’s post, we discussed the importance of an effective communications process to your organization’s success.  The next logical question is –  “How effective are your customer communications?”

Good customer communications are the key to building a solid base, retaining customers for the long term, establishing strong relationships, and making their experience the best it can be.  Organizations that communicate well are generally rewarded with loyal customers, and steady and consistent growth over time.

Most successful organizations generally know and understand what their customers want.  However, in his recent article in Inc. magazine, Geoffrey James listed six attributes that every customer wants, regardless of the organization:

 

  • Preparation –  Doing Your Homework
  • Simplicity –  Making it Simple to do business with you
  • Creativity –  Identifying New Solutions
  • Loyalty – To Their Organization and Requirements
  • Accessibility – Making Them Feel Special
  • Accountability –  Not Passing the Buck

I’ll add two more to his list:

As you look at the list, note that many of these issues revolve around communications in one way or another.  Regardless of the form, all customer communications should meet the following criteria:

  • Clear and Simple
  • Build trust and confidence
  • Emphasize their importance to your organization
  • Demonstrate your understanding of their need
  • Timely

To do this well, however, requires discipline, focus and being proactive.  Too many organizations, however, either don’t understand the importance of this communication, or pay lip service to this process, and don’t make it a priority throughout the organization.  As a result, they are surprised when a customer leaves after feeling ignored, or taken for granted.

In my opinion, there is one final part of the process which is to establish and maintain a regular and consistent dialogue with your key customers.  This dialogue will build strong relationships, trust, loyalty, and credibility as a valued supplier, leading to an increased share of their business, where possible.  In addition, you will want to expand your relationship to as many levels of the customer’s organization as possible to reduce the risk of losing business if your key contact leaves.

By having this regular dialogue, you accomplish several objectives:

  • Build strong, long term relationships
  • Demonstrate your understanding of their business and requirements
  • Promote the value that your organization provides
  • Identify areas for improvement in your performance

Customers are the sole reason for the existence of most organizations.  If you communicate clearly, simply, and timely, throughout your customer’s organization, and make their experience that best it can be, you will be well on your way to having both long term customers, and consistent growth.

“Every contact we have with a customer influences whether or not they’ll come back. We have to be great every time or we’ll lose them.”  – Kevin Stirtz

“Spend a lot of time talking to customers face to face. You’d be amazed how many companies don’t listen to their customers.” – Ross Perot

“A customer is the most important visitor on our premises, he is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so.” – Mahatma Gandhi

 

Is Your Organization Communicating Effectively?

Organizations that communicate clearly and effectively, both internally and externally, are much more successful than those that do not.

Let me give you a simple example of a clear communication process.

For those of you that may not be sailors, or have not watched a sailing match, racing a crewed sailboat properly requires great teamwork, and very clear communication so that each crew member can perform their task in a coordinated way to successfully complete the maneuver.  The captain communicates with the entire crew prior to, and during, each step in the maneuver so all of the crew has the same information, and knows what to do and expect as the maneuver proceeds.

The communication process for a simple tacking maneuver may sound something like this:

  • “Tacking in 2 minutes.”
  • “Ready on the sheets.   Trimmers and grinders into position.”
  • “Ready to tack.”  “Tacking.”
  • “Speed is down – trim the sheet in.”
  • “Speed good – watch the trim.”

As you can see, the captain communicated all of the information his crew needed to do their jobs, kept them informed throughout the process about the status and performance of the boat, and identified where additional action was necessary to stay on course and meet the objective.

This same type of clear communication is necessary for any organization to operate effectively and efficiently, and can take many forms, including verbal, written, formal and informal

In any organization, communications play a key role in the following areas:

  • Motivation, including task information and methods, and performance standards and expectations
  • Source of information for decision-making
  • Molding the culture of the organization, and individual attitudes toward the company and customers
  • Managing and controlling the organization
  • Improving teamwork
  • Establishing strong relationships with outside entities

In the absence of such communication, employees are left in the dark about their performance and that of the organization, overall performance is reduced, the culture is poor, mixed messages are sent, rumors abound, and assumptions are made, generally with bad results.  Clear communication eliminates these issues and promotes a consistent flow of information through the organization to keep it moving in the same direction.

By communicating clearly, the entire organization understands the strategy, direction, expectations, performance requirements, culture, and the message that the organization wants to send to outside entities.  There are generally very few surprises.

Organizations with a good communication process exhibit the following attributes:

  • Strong performance at every level of the organization
  • Clear level of performance expectations and standards
  • Cost efficient
  • Good teamwork
  • Great customer service and relationships
  • Good culture and understanding of direction and requirements

A good communication process includes:

  • Consistency
  • Clarity
  • Understanding
  • Sending a clear message about the vision strategy and direction of the organization
  • Facilitating a smooth flow of information between functions to meet customer expectations and performance objectives

The leader of the organization is ultimately responsible for the communication program, and setting the tone for that process throughout the organization.

“Skill in the art of communication is crucial to a leader’s success. He can accomplish nothing unless he can communicate effectively.”  – Unknown