| (Note, although this article was written in early | | | | (Effectiveness can be stated as the ratio of |
| 2002, it is totally relevant. Right now.) | | | | OUTPUT to INPUT. Efficiency, on the other hand, |
| About three weeks ago I was surprised by this | | | | is how many INPUT actions you take per unit of |
| headline in the morning paper: | | | | time. For instance, you can increase the number |
| "Fed says September 11th hurt economy." | | | | of calls you make per hour -- that is an increased |
| Wow! | | | | efficiency. You can increase the volume of sales |
| "What did I miss here?" Was this news? USA | | | | for the same number of calls -- that is increased |
| Today thought it was. I was shocked the Fed | | | | effectiveness.) |
| saw fit to announce it. | | | | Random examples of things that might be missing |
| And this week, another one: "NBER Confirms | | | | include consistency in marketing, new products or |
| Recession." | | | | services, more sales people, a source of new |
| Hey, Greenspan! Get out and talk to people. All | | | | leads, an employee (or a self-) development plan. |
| over the country people tell me that if they | | | | 2. What are your goals related to this factor? |
| break even this year, they'll consider it a win. If | | | | Setting new goals can, all by itself, transform your |
| that's not a "recession"... | | | | business. Your goals should be bold and dynamic -- |
| But have you ever wondered what it takes to | | | | big enough to inspire you and everyone around |
| end a recession? Not the textbook answer: two | | | | you. Goals work best when they are objective |
| consecutive quarters of growth. Have you ever | | | | and quantifiable. And you must believe they are |
| wondered what causes those consecutive growth | | | | achievable - regardless of how difficult or |
| quarters in the first place? | | | | impossible they might seem. |
| The economy turns up when enough people get | | | | Some examples of bold goals: dominate your |
| tired of the economy being turned down. | | | | market niche; double last year's sales; top of the |
| Companies need things. They need new people or | | | | list in prospect mind- share; 100 percent customer |
| new services like marketing and sales. Some need | | | | repurchases; three new products developed and |
| new premises or new equipment. You might be | | | | shipped by mid-year; customer problems solved in |
| saying something like "We really need this or that | | | | half the current time, a career path for each |
| but we're not spending another dime until the | | | | employee, sufficient cash to cover any business |
| economy gets better." | | | | emergency. |
| So we suffer from a cascade effect where you | | | | 3. How are you going to achieve these goals? |
| are waiting for someone else to make the first | | | | A successful plan to achieve your goals has |
| move -- and the economy spirals downward -- | | | | several components: |
| getting worse and worse -- until... | | | | Who will be accountable for each goal? Not you? |
| Until people begin to say, "I'm tired of this," or "I | | | | then which executive? Which managers? What |
| can't wait anymore," or "Let's get going." And as if | | | | department? |
| by magic people start spending money again, and | | | | Some factors map directly onto a specific |
| poof -- the recession's over. | | | | department, like revenue is owned by sales and |
| I'm a growth strategist -- I help people figure out | | | | marketing. But factors like intellectual capital or |
| the best way to build their businesses and make | | | | customer satisfaction - they don't fall clearly into |
| more money. I'd like to know when this recession | | | | one department. |
| will end, but I'm not an economist and that's to | | | | Even so, someone still has to 'own' the factor. |
| difficult a question. Instead, I ask know how much | | | | Figure out who. If no single person is accountable |
| longer can people sit on their duffs before they | | | | - guess what - it won't happen. |
| finally get so tired they have to act again. | | | | Whoever accepts accountability for a specific goal |
| I expect early next year people are going to | | | | should answer the remaining questions. |
| reach that point. Although The Fed just made it | | | | What strategies and tactics have a good chance |
| official, many businesses turned down in the third | | | | to realize the goal? |
| quarter of 2000, and haven't picked up since. | | | | If you've set bold objectives, you probably don't |
| Aren't you bored with all the do-nothing? Don't | | | | yet know how to reach them. That's what |
| you want to start building your business again? Of | | | | makes them bold in the first place. For now, |
| course you do. What do you think everybody | | | | you're going to have to make up some answers |
| else thinks? | | | | and live with the uncertainty. |
| (Side note: This forecast is right in line with the | | | | And while there are no guarantees of success, |
| "professionals" who say the recession will end mid- | | | | each target should have an identifiable path with a |
| to late 2002. That will only happen if | | | | reasonable probability of getting you there. That |
| entrepreneurs and consumers start spending early | | | | path will define one or more initiatives and |
| in the year.) | | | | milestones you can put on a timeline. |
| So what are you going to do about it? What are | | | | What structural and procedural changes will you |
| you personally going to do to end the recession? | | | | make relative to this factor? |
| What are you going to do to start making money | | | | Some examples are adding two salespeople, or a |
| again? (I agree with President Bush. You don't | | | | new assistant. Perhaps you will establish new |
| have to put that flag away, but the most patriotic | | | | reporting lines, eliminate paper memos, acquire a |
| thing you can do right now is start spending | | | | competitor, or having a monthly new business |
| money. If enough people take that leap of faith, | | | | quota. Each structural and procedural change will |
| the global economy will take off like a rocket.) | | | | spawn its own initiatives, which you will also |
| Are you going to be ready? | | | | time-line. |
| Now is a good time to prepare yourself for the | | | | Does this initiative require new people? Do you |
| next time when people decide to start "doing | | | | need new job descriptions, or add managers? If |
| business" again. | | | | you have to add people feed all the financial |
| Last month I outlined a way to polish and even | | | | considerations back into your budget. |
| rethink your business strategy. Here I will quickly | | | | Taken together, all the factors, goals, accountable |
| review the critical factors which will insure your | | | | parties, initiatives, structural changes, timelines, |
| success. | | | | measures and milestones add up to a strategic |
| A plan designed as a platform for growth and | | | | plan for the year. |
| profits must consider each of the following critical | | | | Can you live without addressing every one of |
| success factors: | | | | these factors? |
| Money factors: positive cash flow, revenue | | | | Of course you can, but can you prosper? |
| growth, and profit margins. | | | | Yes -- you can do that too. But it will be harder. |
| Acquiring new customers and/or distributors -- | | | | Let's face it: some companies sell the same |
| your future. | | | | product year after year without making any |
| Customer satisfaction -- how happy are they? | | | | changes. Look at WD-40. They completely own |
| Quality -- how good is your product and service? | | | | the do-it-yourself lubricant niche --all they have to |
| Product / service development -- what's new that | | | | do is take orders and keep the shelves stocked. |
| will increase business with existing customers and | | | | But their growth rate was negative 4.6% this |
| attract new ones? | | | | past year. Obviously they are neglecting one or |
| Intellectual capital -- increasing what you know | | | | more critical factors. |
| that's profitable. | | | | So yes -- you need to consider every critical |
| Productivity -- how efficient are you? How | | | | success factor -- even if you don't do anything |
| effective? | | | | about it you have to think about it. |
| Strategic relationships -- new sources of business, | | | | Increase sales but neglect service - what will |
| products and outside revenue. | | | | happen to customer satisfaction? It will probably |
| Employee attraction and retention -- your ability | | | | go down, which will affect repeat sales, your |
| to do extend your reach. | | | | reputation in the market place, and ultimately new |
| Sustainability -- your personal ability to keep it all | | | | sales. |
| going. | | | | Improve product quality but neglect employee |
| (To find out more about these critical factors, get | | | | retention? What will happen to quality next year? |
| a copy of my book, Faster Than the Speed of | | | | Likely it will go down. And then what will happen |
| Change - bookblurb.html - it makes a great holiday | | | | to sales? |
| gift for entrepreneurs as well.) | | | | As you can see, each factor's improvement |
| For each factor ask these three broad questions. | | | | synergistically contributes to your company's |
| 1. What can you learn from last year's experience | | | | survivability and prosperity. |
| in this factor? | | | | Can you do everything at once? |
| What did you do right? What worked? Always | | | | Most businesses don't have the resources for |
| start with this question. Why? Because it's | | | | that, so something has to give -- right... |
| positive. That's why! It's shocking how people | | | | Or you can create another breakthrough. |
| naturally drift toward the negative. Even when I | | | | This time, create a breakthrough in planning -- one |
| ask -- verbatim -- what did you do right, more | | | | which commits you to some level of |
| than half the time people respond with something | | | | advancement for every one of the critical factors. |
| they did wrong. | | | | This planning task is not as big as you might think |
| How can you do more of those "right" things? | | | | from reading the above. Regardless, you may still |
| How can you make them even better? How can | | | | think you can't afford the time... |
| you apply what you learned in this area to some | | | | Look - any amateur can grow a business when |
| other? | | | | the economy is going gangbusters, but it takes a |
| Only when you've exhausted this line of | | | | purpose, inspiration, and attention to detail to |
| questioning ask, what did you do wrong? Not to | | | | increase profits while the rest of the world is in a |
| beat yourself -- to make sure you don't repeat it | | | | recession. Having a strategic plan -- one which |
| and discover ways to repair or improve the | | | | considers all the critical success factors - is a sure |
| process. | | | | way to improve the odds in your favor. |
| Next, ask what is missing. What could you add | | | | (c) Copyright Paul Lemberg. |
| which will improve your effectiveness. | | | | |