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Latest "Business Strategy" Posts

4 Most Dangerous Assumptions CEOs Make About Business

 

Here are four common assumptions that CEOs make, and how you can avoid them.

Having been in the CEO role a half-dozen times, I have made a wide variety of foibles, blunders, misguided assumptions, and bonehead choices. Most of the great CEOs I have the privilege to know and work with are self-effacing people who can recognize mistakes along the way.

Employees understand what customers’ value. Often in the transactional activity of day-to-day work, the waters become murky as to why one customer has chosen to work with your company. Ask your employees why your customer’s choose your company over a competitor. This will provide you the data that is at best incomplete and at worst completely wrong. Transaction data is about accuracy, speed and reliability, which are pure service values. The next level up is about quality, product, and availability. The real value for your biggest customers comes from what problem in their business revenue, supply, and cost chains that you solve.

Customers understand what your company does for them. When a customer chooses your company for a service, it is typically to solve a particular problem or supply a service or product. Over time, you become a vendor/supplier who is favored as much out of habit. Time and again, companies tell me that they meet with long-time customers and are asked to refer another company to help their customer with a problem that the company provides now. It drives owners crazy, obviously. Make sure your customer recognizes all the solutions you have to offer.

Posted by Tom Searcy in Business Strategy, Inc.com, Leadership.

How to Take Your Company to the Next Level

 

By strategically sizing up the competition, you can help take your business to the head of the pack.

“I want to take my company to the next level.”

I hear these words from CEOs all the time as they talk about their goals and dreams for their companies. When I push for the details, the conversation tends to get a little murky. It’s usually just a recap of how the company has been performing recently. The conversation always ends with a statement of aspiration, “I just know we are ready to really grow.”

Certainly, set your goals for the stars. Along the way, however, you need to pass the runner in front of you before you overtake the record-setter at the front of the pack. If you have ever raced, you know the importance of focusing on the racer right in front of you as you look for your opportunity to pass.

What to do:

1. Study the pack

Pick out the market leader. Now pick out the one-to-three competitors who are at the next level ahead of you. Take your ego out of the conversation as much as possible and put your analyst hat on. What separates the pack into their current positions? These layers in the market are often set by what the market values. The question should be, what criteria are being valued by the customers you want and the market-share you want to take? If you can determine those elements, you can plan your company’s stepping-stones for growth.

Posted by Tom Searcy in Business Strategy, Inc.com, Leadership.

What Your Business Can Learn from the NCAA Tournament

 

How would your company fare in a March Madness-style competition? Here are a few tips on how underdog companies can compete against even the biggest competitors.

After an exciting game last night, Louisville was crowned national champion of the NCAA men’s college basketball tournament. Kudos to the Louisville players and coaches, it was a great season. Even if you are not a basketball fan, there is still a lot you can learn from the March Madness tournament. This year’s tournament was a perfect example of how an underdog can outperform teams that, on paper at least, are rated better in just about every respect–as demonstrated by the surprising success of Florida Gulf Coast University.

Business owners may also have noticed that just like the NCAA tournament’s bracket-style, single-elimination format, a growing number of large contracts are awarded in a similar fashion. Whether they are known as RFPs, procurement-managed purchases, reverse-auctions, or competitive bids, awarding contracts have increasingly adopted this head-to-head competition format. If you are good at preparing for these one-on-one comparisons, you have a better chance of winning the final contract.

Recently I was working with a construction firm on a multi-million-dollar opportunity. We went through a competitive analysis that bracketed all the competing companies against each other in order to understand who would win each comparative analysis. Like basketball, what creates a winning strategy against one team may not be right against another. I advocate looking at all of the companies you consider to be your competitors in the final round for a large contract.

Posted by Tom Searcy in Business Strategy, Inc.com, Leadership, Sales Strategy.

Why Great CEOs are Unfair

 

Not all employees perform equally and therefore, they should not all be treated equally. As a CEO, there are time when being unfair is justified.

I recently read a study which estimated that 65 percent of employees do just the minimum to keep their job. 17 percent don’t even do that much and don’t really care if they lose their job. That leaves just 18 percent who are working hard. Of that number, only about half of them are good at what they do. That means your company is being carried into its success or failure on the backs of about 10 percent of your people.

I can’t vouch for the accuracy of this information, but what I can say is this:

Your company has pacesetters who are faster, stronger, and more committed than the other employees. They are the ones that are making the biggest difference in the success of your business. I can also tell you that you have the other type of employees who are making little difference to the success of your company.

In the politically-correct, hyper-sensitive HR world of big companies, it often seems that the desire to be fair has created an attitude that opposes the idea of meritocracy. As a small or mid-size business owner, you have the luxury of ignoring this misguided PC-driven perspective. Not all employees perform equally and therefore, they should not all be treated equally. Now, before anyone freaks out, I don’t mean to suggest that you should do anything illegal, immoral, or unethical.

Posted by Tom Searcy in Business Strategy, Inc.com, Leadership.

Does Your Business Need a Sequester?

The end of the first quarter is the perfect time to evaluate where your business stands. Here’s why it might pay to take a page out of the government’s playbook.

It’s the end of the first quarter. How did you do? Are your revenues, profits and cash flow what you predicted? What about your spending? How about the sales pipeline?

The U.S government is on a forced diet of about $85 billion in annual spend as of March 1, 2013. Skip the politics of the issue for the moment and focus on the basics of what the sequester is—a triggering event that created a forced adjustment in spending.

Could your business benefit from a sequester? The end of your first quarter gives you an opportunity to re-calibrate your plan for the year.

Quick check-up:

Let’s see where you stand on your business practices. Answer these few questions, Yes or No.

  • My company has a clear course-correction plan for what we do if we exceed or fall-short of our revenue plans for each quarter.
  • My company has a clear course-correction plan for what we do if we exceed or fall-short of our cost budget for each quarter.
  • My company has a clear course-correction plan for what we do if we exceed or fall-short of our profit plan for each quarter.

If you answered “No” to more than one of the above, it is my recommendation that you establish a plan. Too often I see companies that make decisions based upon the latest set of data without considering a long-term plan.

Posted by Tom Searcy in Business Strategy, Inc.com.

Top 5 Ways to Sell Technology in 2013

With budgets still tight, companies are reluctant to adopt new technology without a compelling reason. Sales guru Tom Searcy shares five approaches that will help you make the sale.

Recently, I had a chance to connect with John Diaz from iQuoteXpress to discuss the changing world of selling technology. It used to be that selling technology was all about software demonstrations and business case presentations. Actually, it still kind of is, but things have gotten a lot more sophisticated and challenging when you consider cloud-computing, SaaS, and the high demand for universal mobility. Here are five approaches to selling technology in this new environment.

1. Focus on the transition

How fast an organization is able to implement a new technology solution is critical to its real value to the buyer. Everyone can demonstrate the functionality of the technology. The real value driver is this: How are you going to get this technology implemented in the smoothest and fastest way possible? Showing your change-management strategy is a compelling way to get people moving forward on a technology buy. End-users drive the real value to a company, not the IT staff. Make certain that you have a clear way to communicate how you will accelerate use by end-users and you will have a better chance of winning.

2. Focus on other metrics besides ROI

The trouble with ROI business cases is found in the assumptions. Most of the time, no one really believes them because the metrics are unrealistic. Instead, provide a business case that demonstrates these metrics:

  • Adoption Rate–How many people convert to the use of the technology
  • Utilization Rate–How often is the solution used compared to prior solution
  • Function Penetration Rate–How many of the functions are used

Buyers are savvy enough to know that these components will drive the real business case.

Posted by Tom Searcy in Business Strategy, Inc.com.

How to Land a Logo Deal Like Buffett and Heinz

Warren Buffett makes no secret of his love for hamburgers, french fries and Cherry Coke. When his doctor told him he needed to eat better or exercise more, he chose exercise: “The lesser of two evils.”

Now Buffett can have his fill of condiments for those burger plates. His Berkshire Hathaway has teamed with Jorge Lemann’s 3G Capital to buy HJ Heinz Co. for $23.3 billion, one of the richest deals ever in the food industry according to the Wall Street Journal. Sold in 200 countries, the wide array of brands include Heinz ketchup and sauces, Ore-Ida french fries, Bagel Bites mini-pizzas and even Weight Watchers SmartOnes meals.

Buffett, 82, was seeking deals after his company amassed a cash pile of $45 billion. Buffett has bet big on food before through equity investments in Coca-Cola and purchases of See’s Candies, Mars and Dairy Queen. Now he can add another Logo Deal: an iconic ketchup maker that traces its roots to the 1860s.

How to Pursue a Logo Deal Strategy

Regardless of your business, there is a Logo Deal Strategy opportunity for you somewhere.  If that’s the end you’re shooting for, pick your ultimate target.  Make it a company that is big in size and big in name. There is nothing wrong with making it the richest family in town or one of the top 100 companies in the world.  That target is yours to envision and name.

Here is a path and a plan to get there, based on our book “How to Close a Deal Like Warren Buffett.”

First, think of those companies with whom you would like to do business.

Posted by admin in Business Strategy, Forbes.com, Prospecting.

In-N-Out Burger Suitors Need to Take Fear Off the Table

America’s youngest female billionaire is a burger heiress and she has plenty of suitors. Lynsi Torres, the 30-year-old president and sole owner of the successful In-N-Out Burger chain, is not looking to get married. But she may be hunting for a deal to sell her company in five years.

Her family expanded In-N-Out from a single drive through hamburger stand in 1948 in Southern California into a fast-food empire worth $1.1 billion, according to a recent Bloomberg News feature on the low-profile Torres.

The restaurant chain has a rabid fan base, which one industry analyst calls a “kind of cu

lt following.” Because In-N-Out is a private company, any financial estimate is based on speculation. That being said, the closely held firm has 280 units in five states and probably has sales around $600 million a year. A Harvard Business Review article in 2005 estimates the company enjoys 20 percent profit margins.

Many companies would love to gobble up In-N-Out. That includes burger aficionado Warren Buffett, who according to the UCLA business school website, told a group of visiting students back in 2005 that he hungered to own the chain.

Torres came to control In-N-Out after a series of family deaths. She controls the firm that a trust gave her half ownership when she turned 30, and will give her full control when she turns 35. Whether Torres, a mother of twins, will want to maintain control in five years is the billion-dollar question.

How to Woo a Prospect

Think about the next deal you want to make.

Posted by admin in Business Strategy, Forbes.com, Sales Strategy.

Suppliers: How to Get a Bigger Piece of the Pie

 

With more companies seeking to diversify their supplier base, the opportunity is there to increase your share of the business. Here’s how.

Like it or not, single-sourcing for large contracts is becoming a thing of the past. Government agencies and big companies alike seek to have multiple providers for their key materials and services as a way to protect themselves. Ask for a specific reason why this is so, you’ll likely get one of the following excuses:

  • “We can’t put all of our eggs in one basket.”
  • “We feel like it keeps all of our suppliers honest.”
  • “It’s just our policy.”

Because the policies are dictated by either the board or the procurement department, it’s not likely that they’ll be going away anytime soon. But for all of the chatter about the benefits of diversity in the supplier base, rarely is the spending split equally between all players. For obvious reasons, I refer to the supplier with the largest share as the “tiger.” The supplier which has the smaller share I call the “stick,” since it will often be used to keep the “tiger” in check. Each has its own risk and opportunity, but the strategy, depending upon your position, may be very different.

The first question to get answered is: Are you the tiger, or are you the stick?

When you are the tiger…The good news is that you have the largest portion. The bad news is that every gain that other suppliers make will probably come from your share.

Posted by Tom Searcy in Business Strategy, Inc.com.

BlackBerry Called. They Want Their Mojo Back.

There was a time we were so addicted we used to call them Crackberrys.

Before the iPhone arrived on the scene in 2007, the first smart phone that hooked many of us was the BlackBerry.  Legions of BlackBerry addicts couldn’t resist the fix of easily checking company email whenever, wherever they went.

A grim joke went like this. How do you know when a corporate executive dies? When the BlackBerry drops from his hand.

Now BlackBerry is on the hunt to recapture its mojo. In fact BlackBerry maker Research in Motion (RIM) is making a bet-the-company move to lure us away from our new obsessions: namely, Apple’s iPhone and Google’s Android phone. This is an “all in” bet symbolized by the decision to even change the company name to BlackBerry.

The new BlackBerry is an all-touch device running on a new operating system. Sorry Crackberry diehards, that physical keyboard you loved so much is gone, replaced by a virtual keyboard.

The old operating system was great for email but a poor platform for app developers. As any iPhone or Android user knows, apps are where it’s at.

How to Win Friends and Influence Partners

So BlackBerry is going to need to make many deals if this bet is to pay off. The new and improved BlackBerry Z10 is launching with a fraction of the apps available from Apple and Google. Look for the phone to go on sale in mid-March. A second phone, with a physical keyboard to placate the truly addicted, is due out in April.

Posted by admin in Business Strategy, Forbes.com.