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Recent evolutions in my life have focused my attention on the people I wish to spend time with.  In the last year I spent in radio a call from a representative of Jacques Werth’s High Probability Selling sparked my attention.  His system promised significant help with making phone contact with prospects, specifically cold calling.  His methods were good; however the greatest value I received from his process occurred in the conversion process.  There were specific prospects he recommended that you wanted to avoid at all costs.  They were the reason for major challenges in customer service.   These are prospects who have unresolved conflict.  His methods may be controversial and difficult to achieve in every business.  Despite this there is still reason today to be able to identify prospects who have unresolved conflicts that can make your customer service department miserable. Here are some insights into High Probability Selling’s methods and why it’s critical to avoid conflicted prospects:

People who have unresolved conflicts are the source of most if not all of your challenges in customer service.  I’m speaking to you about customers who are impossible to resolve issues with, not situations where you’ve made the mistake and need to correct an issue. 

Perhaps you’ve found customers who have issues that no one else has, or simply refuse to resolve things and constantly bring up new issues after previous ones have been resolved.  They are “the customer from Hell!” 

Wouldn’t it be great to give these customers to your competitors so they have to invest all their time resolving ongoing conflicts?  Wouldn’t it be great to avoid them altogether?

Jacques Werth’s (High Probability Selling) principle for a process called Trust and Respect, allow you to identify how these customers are before you start doing business with them.  It protects you from beginning to do business with them simply by recognizing the potential they have for wreaking havoc in your business.

Trust and Respect is a regression questioning process used by psychiatrists with patients to help them identify their issues and then begin to work on them to resolve them. 

Anyone who is good at selling, asking questions can, simply by probing and showing interest in their prospect discover whether or not the person in question has unresolved conflicts. 

Perhaps the biggest obstacle to overcome is knowing where you are going with the questions and the result you wish to achieve without being completely straightforward with your prospect.  As noted in the download: Attempting to conceal your personal agenda. If your personal agenda is anything except determining whether or not you trust and respect the prospect, the process will not work.  On the surface the questions appear to be relationship building, yet deeper and more personal than most salespeople would ask in building rapport with their prospect.

In my experience I’ve rarely found anyone who has had difficulty with the questions.  One reason is that people are so infrequently asked these questions. When asked sincerely and with a deep interest in the person you are speaking to, few object.  Indeed in most cases where someone does object, I’ve had one person ask, “What’s this have to do with the coaching process?” it may be the first sign that they prefer not to answer these questions simply because they have something they wish not to reveal. 

The entire principle is based on looking at the customers you’ve had in the past and realizing that if you ranked your best customers on a scale of 0-10 with 0 being no trust and respect, and 10 being the highest trust and respect imaginable, your best customers are those that you would give a ten and they would probably give you a ten as well.

While the questions dig deep and ask for insight into the prospect’s lives, the bonus is once you’ve completed the questions and discovered whether the person has an unresolved conflict (most don’t), you have gained a deeper sense of rapport and trust in your relationship than anyone who is competing for the business with you could achieve.  

Relationship building is a prime component in getting the sale.  By following this process you’ve immediately built a better relationship than your competition will be able to achieve unless they follow the same process.

Finally if you discover they have an unresolved conflict you can simply bow out of the sales process offering that you don’t feel their business would be a good match for yours.

Some questions in the process might be:  Where did you go to school?  Tell me how you decided to go there?  Who first noticed you were good at that?

Once you begin down the path of regression, getting the prospect to open up about things in their history, you slowly move them back in time until you get to pre adolescence.   At that point you ask questions about their relationships.  What was it like growing up in your family?  How did you get along with your brothers, sisters, your parents?   Give me an example of a conflict you might have had with your brother or sister, your parents.  How did it get resolved?  Who was the disciplinarian in your family?   Give me an example when you were younger what you might have been disciplined for? 

Discovering a conflict and how it worked through you may find that this person is still bitter or holds a grudge against the person they had the conflict with.  That’s your indication that they have an unresolved conflict.

At times you may find that they have unresolved conflicts with a brother, sister or parent, yet they realize it and have done all they can to resolve it and then simply accepted the situation as unresolvable and choose to avoid that person in their lives.  

When Jacques regressed me I recall offering a story of when I was preschool age and it was my turn to do the laundry with my mom.  I’d been able to get out of it being my turn, until my mom remembered my brother had done it last time.  Evidently this upset me very much because at a break in my cleaning my brother and my dirty clothes I went outside, approached my brother and told him mom had given me permission to slap him. When it was discovered what I did I was strapped pretty good. 

The lesson for me was strong never to hit anyone.  My brother and I were close, just a year and nine months apart.  We had many conflicts growing up, however he was particularly forgiving and forgetting.  We might have fights playing basketball or football, and five minutes later it was like nothing had happened.  We were best friends and wanted and needed each other to play with.

Jacques shared his story about an unresolved conflict.  A friend of his asked him to have dinner with a group of brothers who he was considering buying their scrap metal business.  Jacques used his trust and respect questions to ask the brothers about their history.   They revealed they’d worked for their father in his scrap metal business, always being promised that they would receive a share of the business when it achieved a certain level of profit.  Year after year it failed to do so.  They revealed how the scrap metal business was particularly cutthroat and it required doing several things dishonestly, including making the scale lighter when scrap metal came in, and heavier when it went out so that they could increase their prices and make a profit.  After many years working with their father the brothers discovered he’d been cheating them all along and the business had actually achieved profit standards but their father had lied to them about it.  That’s when they decided to start their own business.  Suddenly during the sharing one of the brothers said, “I know why you’re asking all these questions!” 

The meeting quickly ended, and upon escaping out of the restaurant, Jacques friend offered “I’m so glad I brought you with me.  I can’t believe I ever wanted to do business with those people.  I’m happy to have avoided that!”  

People with unresolved conflicts are impossible to please.  They are constantly using you, and anyone else they encounter to attempt to resolve a conflict they had in their childhood that remains unresolved.  They haven’t resolved it with them, and they are attempting to find resolution by being right with you.  

You cannot win that argument, because even if you gain resolution, they’ve not resolved their previous issues and they’ll be back again with a new issue to get you to prove them again right.

We make enough mistakes in our businesses of our own accountability that require us to take steps to justifiably resolve them with customers.   Choose who you wish to work with and you can avoid a lot of conflicts that should never be your battles to begin with.  Accept only those issues you are responsible for and you’ll have a much more peaceful and enjoyable business to run. 

A client of mine has an extraordinary systemized approach to his business.  The owner, through his previous business, adopted the E-Myth systematic approach to documenting his business.  In addition he has a zealous approach to detail at the operating level of his business.  A recent hire, despite the meticulous training provided failed to completely understand the nature of their business, particularly the emotional satisfying elements that they offer customers.  It’s lead them to re-examine their Core Purpose.  Do they have a meaningful Core Purpose? How well is it communicated to staff and in the orientation process? Here’s some of the elements we are reviewing and why you may wish to examine why you need a solid Core Purpose:

If you’re like me you’ve worked for a number of companies in your career.  Looking back at the companies I’ve worked for it’s easy to determine which had a core purpose and which didn’t.  In fact I don’t recall any of the companies I worked for having one. That includes, I’m embarrassed to say, the company I was responsible for starting with 5 other partners twenty years ago.  This despite the vision and intentions I had when we started the radio station, and despite one of my partners suggesting we follow the lead of Jim Collins in Built to Last. 

The best company I worked for had an outstanding employee orientation process.  I spent two weeks in training learning the policies and procedures, the company history, and actually serving in several support roles in the warehouse and administration to help me understand how the company functioned.  Despite this excellent training, I never recall being told why the company existed.  

Recently a good friend and former client of mine sent me a video link to a message by Nick Vujicic http://www.advancedhiring.com/blog/attitude-adjustment/.  If you’ve not seen it I highly recommend it. In the video he quotes William Barclay, “There are two great days in a person's life -- the day we are born and the day we discover why.”

I you believe this is true for each of us as individuals, then why wouldn’t it be true for your business to have a why?

Of course if you’ve read Built to Last, by Jim Collins and Jerry Porras, then you know they’ve already discussed and established the importance of your business having a set of fundamental reasons for a company’s existence beyond just making money.  They noted that a company continually pursues but never fully achieves or completes its purpose.  As Walt Disney noted, “Disneyland will never be completed, as long as there is imagination left in the world.”

In Jim Stengel’s Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies, Stengel not only emphasizes the importance of Core Purpose, or Brand Ideal as he calls it.  He provides proof that “Doing well by doing good” is not only attainable, but the two are actually inseparable. The Stengel 50 (see chart) proves companies with a brand ideal perform nearly 400% better than those that don’t.  

Stengel notes A Brand Ideal should at the fundamental level:

• Elicit joy
• Enable Connection
• Inspire Exploration
• Impact Society
• Evoke Pride

He also asks the following questions:

• Why are you in business?
• Does your company operate around a brand ideal? If not, did it ever? Don’t try to “invent” an ideal - a true brand ideal can’t be developed by a task force. But your company may have been founded on an ideal that will still be relevant once it’s unearthed. 
• Consider your company’s heritage. 
• What did your founders believe in?  Why did they get into business?
• What need did they set out to address? Why do employees believe in what they do?

As noted in my introduction one of my clients recently hired a sales person, who met their diligent and stringent Topgrading standards.  Yet she didn’t reachthe ultimate standards they expected in their 90 day probationary period.  Her performance graded at average to good, yet they felt there was something missing. It was as if she failed to understand the compelling reason customers should choose their business and its proprietary system to solve their problems.

In several of our weekly meetings we discussed their sales process, sales standards, training system and the manager’s performance in holding this person accountable and to properly training them.  We explored the Topgrading interview process and everything else to make sure there wasn’t an issue with the hiring and recruiting process.  What did we miss?

Ultimately it was determined that for some reason this person didn’t have the deep conviction and emotional understanding of what the company delivered as a solution to the prospects problems.  She would work the system effectively.  When it came time to close she couldn’t answer to her prospects nor to the company’s team exactly why they should choose to move forward with them.

The Why is critical.

In my coaching discussions we’d spoke about the company having a mission statement, and each time the president felt secure that they had not only identified it through other strategic decisions (Strategy Statement, Inside Advantage, Brand Promise), but that there was no need to explore or identify this further.

For the first time he realized that perhaps they hadn’t effectively identified this to everyone, and particularly to new employees.

Why does your business exist? 

Herbert Hoover, the 31^st President of the United States recognized this same vital element to business success that Jim Collins and Jerry Porras identified in Built to Last with these words, “..business needs a lifting purpose greater than the struggle for materialism.”

Another of my clients has identified their Core Purpose.  Each leadership meeting they require their leadership team to answer a series of questions on the critical elements of their business including Core Values, Strategy Statement and Purpose.  Their Core Purpose has become a tremendous source of pride and differentiation through their sales and marketing force.  Each day they head out into the market with a significant degree of motivation inspired by their Core Purpose.  It’s helped them to succeed in shaving significant market share from the national leader in their market for three consecutive years.

The subjective elements of the business are frequently overlooked when building your business.  Yet these are often the most vital and compelling pieces to forge your business growth and competitive advantage in the market place.  Don’t overlook them!  

One Thing you’ll learn by attending Mastering the Rockefeller Habits Four Decisions Workshop, November 12^th at the Kirkwood Hotel in Cedar Rapids, IA is the enormous value of focus and concentration. One of my first clients with the Rockefeller Habits achieved remarkable success in their first effort to build a theme for their company’s fourth quarter and establish the One Thing priority.  You should establish your One Thing during your annual strategy and planning meeting each year.  One Thing is a concept of focus.  It should be the One Thing that if you could accomplish nothing else it would impact your business the most.  While these events occurred in 2008 and I’ve experienced the extraordinary value of this discipline many times over during my years of coaching, it’s a valuable story to repeat to help others realize the significant impact that establishing One Thing as your top priority can bring to your organization.  Here is that story again:

In the fall of 2008 Ideal Computer Systems was struggling with their customer support system.  Customer’s called for help with their hardware and software they had purchased from Ideal and often times had to wait to get the answers they were looking for.  They had been working on this area for over a year with almost daily meetings with their executive team to improve the turnaround time their support team was getting back to their customers in.  Throughout 2008 it was approaching 60 minutes and now their support manager had given his resignation, moving to New Orleans to be closer to his girlfriend.

In June of 2008 Dennis Haefner, then president of Ideal Computer Systems, enlisted my coaching services to help them with a solution to overcome this specific challenge.

Feeling at the cross roads, and realizing the importance of this area for building their business they decided to create a One Thing theme whose focus would decrease their ASA [Average Speed of Answer] time down to a more acceptable level.  After a third quarter average of 55 minutes they decided to set a very aggressive goal to drop this to 24 minutes (Green Success Criteria) and a Super Green goal of 16.  In addition, to put more emphasis on this area, they decided to hire two managers to serve support. This doubled the number of managers and attention they had previously dedicated to this vital area of their business. 

It should be noted that dissension and strife were ripe in the support area.  The group as a whole had taken on a victim mentality feeling they were being held up as the reason the business wasn’t succeeding to the extent it should due to the ASA being so high. 

Dennis and his team announced the theme at a companywide meeting.  The meeting was not only to proclaim the new goals for the quarter but also to help the entire organization recognize that lowering ASA was a company priority.  It was something they all shared in and were equally responsible for dropping to an acceptable time frame.  Instead of focusing on support the emphasis was that everyone was responsible for this number and in addition to lowering support they intended to increase their customer loyalty rating as well.  

The results were dramatic!  Instead of feeling like they were the focal point of the company’s focus and being blamed, the support team rallied around the two new managers, the theme’s intention, and felt the encouragement of the rest of the team toward achieving their goal.

ASA time dropped precipitously, below their goals by almost unheard of levels.  Not only did support beat their green goal of 24, they beat the super green goal of 16, with support ending the fourth quarter under 10 minutes at 9.6!  Just as important the customer approval rating soared to an 8.54 rating also beating their super green goal. 

Have you dedicated time to work on your business to determine your 3-5 year plan, annual plan, quarterly plans and One Thing for 2014?  The Four Decisions Workshop is an excellent opportunity to set aside time to commit to with clarity to your One Thing for 2014.  You will be free from distractions and receive an unconditional money back guarantee. 

We’re preparing for Mastering the Rockefeller Habits Four Decisions Workshop, November 12^th at the Kirkwood Hotel in Cedar Rapids, IA. As part of that preparation this month’s newsletter relates a story from one attendee that applied the resources to improve cash flow (Cash Conversion Cycle) and discover his X-Factor.  For those of you unfamiliar with what an X-Factor is, no it’s not a TV Show, rather it’s identifying the chokepoint in your business model and industry that when you gain control of provides solutions that will give you an exponential competitive advantage (7-10x) for your industry. I’ll provide a couple of examples of this, however the point of this newsletter is to offer the value the Four Decisions Workshop provides as well as to remind you of the critical value that investing a day or more to work ON your business offers for the growth of your business.

It’s difficult to convince anyone who’s used to the weather in California to fly to Cedar Rapids, IA especially in March.  Yet that’s exactly what Sat Singh did in March of 2009.  He never let me forget it, nor the -17 degree wind chill he had to endure the next day when he left.  The trip proved to be very rewarding for him none-the-less.

During our first exercise (Cash Conversion Cycle) of the workshop Sat suddenly realized that an aspect of his business which he detested, collecting membership monies from his customers through credit card payments, not only was a cash cow for his business, but that it represented a significant growth opportunity for his business.  The frustration he had with continuous updating of his customers credit cards suddenly seemed worth it.  Getting more of his customers to pay a year or month in advance would significantly increase his cash flow. 

How much significance he would realize occurred later as we moved into the concept of the X-Factor. 

Let’s first look for your X-Factor and give you an example. 

You seek X-Factors by trying to overcome common industry bottlenecks. Look for bottlenecks by asking questions like:

• What is the largest cost component in my industry?
• What is the part of my industry that I hate the most?
• At your industry trade association tradeshows – look at the breakout session agenda/topics over the last several years and look for patterns.

These are “top of mind” problems for your industry, and all of your competitors are faced with the same challenges. Next begin looking for solutions that will give you an exponential competitive advantage (7-10x) for your industry. Once you figure it out, don’t tell anyone. Once you find an X-Factor, other competitors will eventually figure it out (once they know you are doing it, they’ll know it’s possible and they’ll keep working until they find the answer). People work differently when they know something can be done.

Therefore, start working on your next X-Factor as soon as you can after you launch your last X-Factor.  X-Factors take some time to find. Solutions to complex problems that have stumped your industry for years won’t appear with just one brainstorming session.

Wayne Huizenga, owner of Waste Management, Blockbuster, Auto Nation, Miami Dolphins and at one time the Florida Marlins is a master at discovering the X-Factor for the businesses he owns and started.  When I first started with Gazelles we would offer the story of Blockbuster as a leader because they developed a revolutionary approach to distributing video content to consumers by negotiating a new way to license and use studio content in a flat fee plus revenue share (upside) economic structure.  It quickly gave them a 10X advantage over their competition.  Within 12 months Blockbuster’s X Factor had put 2400 large and small video companies out of business.

Less than a decade later, Blockbuster is obsolete and bright, innovative companies like Netflix mastered a better, cheaper, more customer friendly way to distribute video content to consumers…then less than 3 years later, yet another innovative company, Redbox, challenged and expanded the market further by placing Redbox kiosks in high traffic areas (e.g. at McDonalds, Walgreens, Wal-Mart locations, etc.), using self-service $1 USD packaging to rapidly grow market share. Once again, when you find an X-Factor, other competitors will eventually figure it out.  You need to begin to work immediately on your next X-Factor in order to keep your competitive edge.  Companies that choose not to innovate, grow, change and adapt to changing market conditions run the risk of “missing the boat” and becoming weak and irrelevant.

In the subsequent years from Sat’s Cash Conversion Cycle discovery he began to see how this membership aspect of his business actually provided him with a ten times advantage over his competition.  I’ve purposely not given you the type of business he’s in to protect his X-Factor.  As we crunched the numbers to help him determine his profit per X it soon became clear that customers who became members of his annual & monthly subscription plan provided a 10X profit over one time customers.

Holding your X-Factor in secrecy you can maintain an aggressive advantage over your competition for some time.  Once the cats out of the bag however your competitors will quickly copy you and your superiority quickly slips away. 

At the Four Decisions Workshop the X-Factor, Profit per X, Brand Promise, Catalytic Mechanism and many more strategic ideas will be discussed, followed by exercises to apply these to your business to individually identify your advantages.

Have you looked for your company’s X-Factor?  Have you dedicated time to work on your business to determine your 3-5 year plan, annual plan and quarterly plans for 2014?  The Four Decisions Workshop is an excellent opportunity to set aside time to work on this.  You will be free from distractions and receive an unconditional money back guarantee. 

Set aside time now to plan for 2014 and join us by calling Positioning Systems. Plan to attend the Mastering the Rockefeller Habits Four Decision Workshop November 12^th in Cedar Rapids, IA.  

For many businesses a customer who returns and frequents you consistently is the lifeblood of your company. While most of my customers work with me for a year or more, occasionally a customer leaves and returns.  One of those customers I discussed in my last newsletter Success Starts Where You Are.  Recently one of my former clients reconnected and we are just beginning the engagement process again.  What I find remarkable and hope you will too is the progress he made in the intervening period.  Most rewarding to me is discovering just how much of the principles he applied. The growth he achieved – 500% revenue improvement in the almost 5 years we’ve been apart, is remarkable.  Exploring what occurred and how he achieved it is the subject of this newsletter.

The remodeling business is very competitive.  One of the biggest challenges for Mike Jones and his company Harmony Remodeling was acquiring leads.  Mike has built a system to ensure he receives a steady stream of new inquiries for jobs in his area.  It’s a credit to him and to the principle of focus. What you focus on increases.  It’s why the One Thing concept is so powerful.  Mike’s dedication to his lead generation system   has made it one of his most consistent and dependable systems in his business. 

One of his biggest sources of leads is Angie’s List.  It’s extremely powerful for generating leads.   It can be a two edged sword. Customers can express their disappointment in his service on the Internet.  It’s one reason he focuses on customer service so intently.  Even prospects who are not customers can complain, pretending to have been customers.  They can express disappointment with a Harmony Remodeling quote that didn’t come in as low as they’d hoped.  It’s a challenge to balance these new opportunities knowing some customers can never be satisfied. 

We identified in our first meeting having a better disqualification process for Harmony Remodeling will save a great deal of time and allow Mike to focus on his best potential customers.   Another part of this process is clarifying Harmony Remodeling’s strategy. Who are his best customers?  When the phone rings Mike will be ready with the right questions to quickly discover whether the prospect is a good fit for Harmony Remodeling’s niche.

People in any business are an important part of the equation.  A benchmark that has been effective to help Mike select the right team members including subcontractors is his Core Values.  Mike developed these just as we were closing our last engagement.  He’s found that having these set of guidelines helps him to identify whether employees and subcontractors have the same ideals.  If they don’t, the probability of their serving the customer in the same manner Harmony Remodeling would is greatly diminished.  Core Values help him institute standards in the relationships he has with his customers and production staff. 

Hiring a foreman to work in the field has given Mike freedom to spend time in his office to work ON the business.  With his foreman, they've developed an estimating process that keeps them on track.  It still needs some tweaking and adjustments. The company needs to improve profit margins; however they’ve discovered when they follow the system it consistently bring projects in on time with the profit they’d estimated.  It’s another example of the critical impact system development and work process flow charts can have on a business.   Estimating accurately is paramount to achieve bottom line profit and assure customers are satisfied.  Mike and his foreman pride themselves in doing this proficiently making significant strides in improving the system in the six months since Mike hired him. 

One of Gazelles fundamental principles for creating Core Values and Purpose is whether or not you’d be willing to fire someone who broke these ideals. 

Mike shared a letter he’d prepared but never sent to his father-in-law.  His father-in-law had previously been his foreman.  Mike was having issues with how he represented Harmony Remodeling with customers.  Honoring the customer is steeped into Mike’s belief system, and it’s critical to Harmony Remodeling’s reputation.  His father-in-law’s refusal to abide by this resulted in a major conflict.  Mike never sent the email.  His father-in-law resigned before he needed to.  That opened the door for Mike to find and hire his new foreman, Bo, someone who believes and lives the Harmony Remodeling cultural ideals.

When I asked Mike the biggest lesson he learned in between our coaching engagements he asked his wife to respond.  Jennie indicated unconditional respect for customers.  When things don’t go as expected; a customer’s tile, cabinets, or appliance don’t look right for example, instead of getting bent out of shape and playing the blame game (many contractors do), Mike steps back and takes care of the homeowner at all costs.   Mike continues to refine and develop this into his core purpose.  It started as respect for the customer.  He’s expanded it to the idea of unconditional respect.  Getting his team of employees and subcontractors involved in this mentality is an ongoing quest.

Mike feels the coaching process provides a different point of view.  It helps to have someone looking over his shoulder to keep him more objective.  An example of this is the balance between winning a job and growing profit margin.  Is closing 60% at 20% profit better than closing 45% at 35% margin?  We’ll be looking at this as we work together.

From working together previously he finds he looks at challenges now simply as the lack of a system.  This allows him to remain unemotional and unattached to any issue.  He focuses on looking at the system first for a solution.  Frequently an issue can be resolved by creating a system to prevent the problem from recurring.

When Mike first started working with me he’d written a date down: December 2010.  That’s was when he planned to finish the 21 E-Myth Modules the program designated for completing E-Myth Mastery.  He’d always intended to come back he said.  He recognizes there’s a lot more to building his business then when he started.  He’s excited to learn how to grow and improve and reach the ideal brand and reputation for Harmony Remodeling that he’s dreamed of attaining. 

Looking to build your business?  Consider giving Positioning Systems a call or plan on attending the Mastering the Rockefeller Habits Four Decision Workshop November 12^th in Cedar Rapids, IA.  

Prospects frequently ask me how many of my clients become successful.  There’s no simple response to that question because each of my clients hire Positioning Systems for different reasons.  Each measures success differently.  Often times clients I only work with for several months email me years later and thank me for the work I did with them and how influential its’ been in their success.  Where you are when you start a coaching program often determines what needs to be your focus.  On Thursday of last week I had lunch with a former client who I’ve referred to several times in this newsletter and on my website.  He sold his business several years ago and is now living several of his dreams in retirement.  When I first started working with him however he was not even close to achieving this, and indeed was in a precarious position.  This is a brief recount of his adventure with his business and the coaching process.  The intention is to provide you with a measure of faith and confidence in what you can achieve with your business no matter where you are today.

Dennis and I met in January of 2005.  At that point I was an E-Myth coach and we went through the Needs Analysis process to discover where he needed help and he agreed to move forward.  At the time his cash flow was very poor.  He signed the agreement to start, but with a May start date when he felt his cash flow would be improved. 

Dennis’ business is software for the Power Equipment industry with a niche in the lawn and garden area.  The challenge for most business owners with the E-Myth Business Development Process was simply setting aside time to work on the business.  Dennis demonstrated the most critical behavior necessary for growing his business: discipline.  He made it a practice to spend every lunch hour away from the office reading and working on business development.

The financial area of his business was one of his weaknesses.  We worked diligently on improving his knowledge of finances, balance sheets, income statement, breakeven and budgeting.  It’s not that he hadn’t done this before, but with the tools and coaching the E-Myth provided he learned to understand the process much better.  One immediate focus was improving his customer’s payments process.   We discovered his current system encouraged customers to delay payments 30-45 days.  His business simply didn’t enforce their policy for payment.  Consequently customers were often 60-90 days late in payment.   Delegating this task to his bookkeeping person resulted in an immediate improvement in collections; the result eliminated his cash flow problems hence forward. 

We worked on his sales process to speed up the conversion cycle.  Once we had conquered these areas, we moved our attention to his Windows Software model which was still in DOS. He had been considering moving to a Window format for some time.  Due to his financial restraints he felt uncomfortable moving forward.  The restructuring of his financial area eliminated that obstacle.

The focus of his one thing – the Windows Model proved to be the biggest impact he could have on the business.   Once he devoted time to it, he found he had a much improved software program that his competitors had difficulty keeping up with.  The result was an outstanding improvement in revenue.  October sales revenue increased 56%.  Not 56% over the previous month, but 56% over the best month he had ever had in his history.  Not only that but the months sandwiched around it showed similar increases in the 25-45% range. 

The budgeting process was monumental.  It required a significant investment in time, resulting in definitive improvements in control, monitoring and accountability.  After having several consecutive years with no profit, his first year with budgeting resulted in profit with subsequent years improving as sales also began to increase. 

One of the great values of the E-Myth Business Development Process was how to develop systems.  We introduced both a template for documenting system and also began to work on developing the systems for his business including sales, operations and administration and financial processes.  A collection system was developed to further enhance and improve cash flow.   

After working with Dennis for 3-4 years, improving and documenting systems Dennis decided the E-Myth and coaching process had taken him as far as it could and we disengaged. 

We stayed in touch and when I became a Gazelles coach, feeling these new principles could advance his company further I introduced him to Mastering the Rockefeller Habits by Verne Harnish. 

At the time Dennis was having some specific challenges in the customer service area. 

In the fall of 2008 Ideal Computer Systems was struggling with their customer support system.  Customer’s called for help with their hardware and software they had purchased from Ideal and often times had to wait to get the answers they were looking for.  They had been working on this area for over a year with almost daily meetings with their executive team to improve the turnaround time their support team was getting back to their customers in.  Throughout 2008 it was approaching 60 minutes and now their support manager had given his resignation, moving to New Orleans to be closer to his girlfriend.

Feeling at the cross roads, and realizing the importance of this area for building their business they decided to create a theme who’s primary focus was pressing their ASA [Average Speed of Answer] time down to a more acceptable level.  After a third quarter average of 55 minutes they decided to set a very aggressive goal to drop this to 24 minutes and a super green goal of 16.  In addition to put more emphasis on this area they decided to hire two managers to serve support, more than doubling the number of managers and attention they had previously dedicated to this vital area of their business. 

It should be noted that dissension and strife was ripe in the support area.  The group as a whole had taken on a victim mentality feeling that they were being held up as the reason the business wasn’t succeeding to the extent it should because the ASA was so high. 

Dennis and his team announced the theme at a companywide meeting.  The point of the meeting was not only to proclaim the new goals for the quarter but also to help the entire organization that lowering ASA was a company priority and something they all shared in and were equally responsible for dropping to an acceptable time frame.  Instead of focusing on support the emphasis was that everyone was responsible for this number and in addition to lowering support they intended to increase customer loyalty rating as well. 

The result was dramatic!  Instead of feeling like they were the focal point of the company’s focus and being blamed the support team rallied around the two new managers, the theme’s intention and felt the encouragement of the rest of the team toward achieving their goal.

ASA time dropped precipitously  below their goals levels by almost unheard of grades.  Not only did support beat their green goal of 24, they beat the super green goal of 16, with support ending the quarter under 10 minutes at 9.6!  Just as important the customer approval rating soared to an 8.54 rating also beating their super green goal. 

Dennis had several other successes with is business in the time we worked together.  The year following this customer service breakthrough he invested in a sales evaluation and training process through Gazelles partnership with Objective Management Group and new software sales increased 25%.

Dennis had disappointments as well.  Perhaps his greatest was with two sons discovering they had other passions which did not include taking over the business.  This only encouraged him to explore divesting himself of the business and finding a suitable buyer who would preserve the mission and principles he’d worked so hard to create.

From the time Dennis and I started working together the business grew from just over $1.5M to over $3.5M in sales.  Not a tremendous increase, yet in a very mature industry, certainly significant.  More importantly the business improved in profit, providing the eventual opportunity for Dennis to sell his business and retire.

Working with and watching clients grow is the most gratifying part of my work.  Dennis exhibited passion, dedication and commitment for what he did.  Most importantly he provided a disciplined approach to growing his business and achieving his priorities.

Are you equipped with the commitment and dedication for what you do?  Can you harness the discipline required to work toward your goals to achieve success?  Then wherever you are now you can make a decided difference in your future.  As always let us know if you’d like help achieving your goals.  Positioning Systems Strategic Discipline offers you the tools and resources to accelerate your accomplishment.  

Watching my customers achieve a theme, their One Thing for the Quarter or year is an extremely rewarding part of being a Gazelles Coach/Consultant.   The pinnacle of that experience is watching your customer sell his business and be genuinely rewarded in the process for his tireless efforts and energy to do what is right for his employees and staff as well as himself. 

There are a lot of business owners in the baby boomer era reaching retirement age and looking soon to divest of the businesses they’ve created.  A recent article By Verne Harnish, “Growth Guy” (author of Mastering the Rockefeller Habits) in Fortune Magazine offers tips on the tricks buyers can play.  Entrepreneurs work years building up the value in their business only to give a big chunk of it away when it comes time to sell.  Why?  Savvy corporate acquisition teams have a prescribed method for wearing down the most seasoned entrepreneurs, backing them into a corner where they have to sell for a steep discount.

It doesn’t have to be that way.  In reality a sale can go extremely well when you’re prepared and follow the advice of good advisors.  In addition you can prepare your business for a high return by investing in the business now and making it more attractive to a prospective buyer.

In fact recent indicators (Why the value of your business is going up) show that average multiple being offered to business owners is trending upwards. 

The news is better for businesses with at least $3 million in annual revenue whose average multiple is now closing in on five times Earnings Before Interest Taxes, Depreciation and Amortization (EBITDA).

Here’s a real life example of a local business owner who sold his business to offer some insight and perspectives on how things can go well when you get a legitimate inquiry that turns into an opportunity to sell.  The purchaser, their company name and the company they purchased requested we keep their names  confideintial. Please forgive this inability to give you specific names.  It should not diminish the value of this example of following a positive process for selling your business. 

A former client of mine sold his business a few years ago and can give some insight and perspective on how things can go well when you get a legitimate inquiry that turns into an opportunity to sell. 

In order to respect his privacy and the non-disclosure agreement between him and the purchasing company we will keep his name and the purchasing company’s name private.  Let’s just call him Jim and the purchasing company ABC Corp.

Jim initially received an inquiry about two years prior to his business sale closing.  They had specific interest in his company since it was vertically niched to their industry. The persistence in their approach was consistent.  They would contact Jim and then go away for a month or two but would always come back with more questions.

During this time Jim worked with Positioning Systems Business Development and Coaching firm immersing the best practices and top thought leadership from Gazelles Mastering the Rockefeller Habits.  The focus on strategic planning and specifically a process called Strategic Discipline built a routine, structured, systematic pattern that had been lacking in the business.  The result was a cadence of accountability within their leadership team, committed to annual, quarterly, monthly, weekly, and daily huddles focused Priorities, Metrics and Meeting Rhythms. 

GROW YOUR BUSINESSES’ REPUTATION

One of the immediate benefits of the Quarterly Strategic Planning Process was a step up in customer service.  Jim’s company’s customer service rating showed a very significant improvement in the very first quarterly theme.   It was a remarkable effort that indicated how powerful focusing on One Thing can be.  An industry expert noticed the outstanding service which directly led to a prominent trade show display providing the catalyst for a 25% growth rate the subsequent year. This despite being in a mature industry segment.

ABC Corp., as a suitor, could see this reputation Jim’s company was building.  They were focused on how the company would add to their profit if purchased.  The opportunity in customer service excellence offered an area to achieve this significantly.  We’ll see how ABC Corp’s proprietary experience in their market helped them to significantly increase Jim’s company’s profit margin.

Now things began to get interesting.  Before agreeing to accept a letter of intent, Jim wanted to be sure of 2 things.  First, he wanted to understand the tax implications of any offer so he spent considerable time with his accountant to understand the tax liabilities.  This is an important matter to consider as the income tax can make a significant impact on how much money the seller actually receives.  Also, the taxes can vary a lot depending on whether the transaction is an asset purchase or a stock purchase.  So, make sure you understand this very well.

NO SURPRISES

The second thing Jim wanted to be sure of was that there were no surprises when it came time for due diligence.  Due diligence can be very time consuming and can open a can of worms if the purchaser finds something that would be detrimental to purchasing the company.  Keep in mind, that during due diligence you are legally required to divulge anything and everything about your company, even if it is negative.  So, Jim chose to discuss considerable detail with the purchaser about his company, especially those things that he thought might jeopardize the sale.  “Show the purchaser all your pimples.  Don’t hide anything,” says Jim.  In addition, he requested as much detail as possible about the terms of the purchase from ABC’s perspective.  Once these details were out in the open, then Jim felt comfortable that signing a letter of intent would in fact result in the sale being consummated without major problems.  Gathering these details also gave Jim information to discuss with his accountant and attorney.

Jim did not use the services of a broker.  He had been negotiating with two, however when ABC made what was a fair offer he backed out of looking at a broker.  ABC was right in the ballpark of what the brokers were estimating so he didn't feel he needed to work with a broker at that point.

Jim doesn’t recall a specific discussion of EBITDA, but of course they looked at some form of that.  “They always want to look at earnings before interest, taxes and amortization, also, depreciation.  So they definitely were looking at those types of numbers, but not exactly in that form.”

Looking back on the sale Jim still feels very good about it to this day.  The company has remained in the same location, many of the employees remaining and flourishing, although there was some minor attrition due to the changes and some corporate adjustments in functions.   Several of the company’s people have stepped into more responsibilities and the company is enjoying continued growth and success, allowing them to earn more responsibility and earning capacity.  It’s good to feel the employees he hired, nurtured, and trained are doing so well.

HIDDEN OPPORTUNITY

If there was one area Jim had reluctance addressing at times it was the cost to his customers of ongoing customer service.  Early on as a consultant we worked to get his customers to pay on time for support.  We often discussed increasing the fee structure for their monthly support; however Jim felt uncomfortable raising this structure perhaps out of fear of losing customers and revenue.    As it turns out with their growing reputation he could have doubled his support fees and not had much attrition.

In fact ABC did exactly that the following year providing a substantial profit base for the business.  Jim’s company had previously relied on new software sales to generate most of its profit each year. 

That doesn’t diminish at all how Jim feels about his sale.  The comfort of completing it quickly, offering his employees the opportunity to keep their jobs and be providing greater opportunity, only is minimized by the rewarding feeling of having built something that someone else saw as having significant value to others.

Considering selling your business in the near future From Verne Harnish’s Fortune article, here are some of their dirty tricks to watch for from buyers.

PROMISES, PROMISES

The first step is counterintuitive, which is why it’s so effective. The buyer offers the entrepreneur an insanely large price for the business and suggests the deal can close in weeks. 

The offer--always expressed as some multiple of EBITDA, to condition the entrepreneur to become overly sensitive to expenditures--will be a price that is 50% to 200% more than what even the entrepreneur thinks the business is worth.  It looks like the deal of the century.

Why would buyers do this? To get entrepreneurs to drop their guard.  Nothing builds a temporary relationship faster than offering a premium price for the business. I say “temporary,” because entrepreneurs are not likely to stick around after the sale.

It also gets entrepreneurs and their spouses dreaming about the life they’ll lead after the sale – the houses, boats, and vacations – and planning for what they’ll do once they have a boatload of money. 

More importantly, buyers do this to entice sellers to sign an exclusivity agreement that prevents them from talking with other potential buyers for six months during the due diligence period – which they promise will go quickly.  Entrepreneurs will usually sign on the dotted line, relieved that they are going to get a great price—even if it is ultimately half of what’s offered--and not have to deal with other buyers--which is extremely time consuming.  But that’s the beginning of their downfall.

POWER PLAYS

Once the document is signed, buyers will drag out due diligence for months, while promising that everything should be wrapped up shortly.  If I had a nickel for every time an entrepreneur heard “It’s just a couple weeks more” we could all retire.

And as due diligence gets dragged out, because the buyer tied the selling price to some multiple of EBIDTA, the CEO starts putting off key expenditures that she would otherwise make to keep the business humming along – a key hire or media purchase or training session.

PSYCHOLIGICAL WARFARE

To make matters worse, the buyer starts disrupting the entrepreneur’s rhythms and life through the infamous “emergency meeting.” The evening before an entrepreneur departs for a family vacation or major trade show, the M&A team will call to say that there’s been a problem with the deal and demand that he or she show up for a meeting the next day to straighten things out.

Afraid to derail the deal, the frazzled entrepreneur will cancel plans at the last minute. As a result, both the family and business team will start leaning on the owner to get the deal done.  The pressure will continue to mount.

DIMINISHED PERFORMANCE

With the entrepreneur mentally checked out of the business in anticipation of the sale and worn out from missing vacations and the grind of due diligence—and the business suffering from a cutback in critical expenditures to pump up EBITDA—the business unsurprisingly suffers a temporary slump.  It’s all part of the buyer’s game plan.

The corporate buyer wants the company’s performance to suffer a little so it can use it as a giant sledgehammer to drive down the price at the 59th minute of the eleventh hour. 

Beat up by the entire process, the entrepreneur will begrudgingly give in to all kinds of last minute demands and concessions affecting the final price of the business. 

BIDDING WARS

So what do you do to avoid this scenario—and still unload your business? First, enlist a good business broker (This is no time for amateur hour) to set up an auction for you. Don’t let a single potential buyer call the shots.  One friend identified 23 strategic buyers, of which 7 came to the table to bid for the business.

As noted, Jim didn’t have this type of conversation with a broker.  He didn’t understand what the offer would be.  However he did get an evaluation and the broker and ABC, ended up being in the same ballpark.  

If a serious prospect wants an exclusivity agreement, limit it to  30 days and require a big deposit—say $250,000—that will be forfeited if the deal isn’t completed in that window.  And have “the box” of materials prepared in advance so you are bulletproof during due diligence.

Last, as best you can, insulate yourself from the transaction. Have your CFO or another trusted executive work with your broker as a go-between with the buyer, so you don’t get distracted from leading your team. Push back against last-minute demands for meetings. You want to be calm and thinking clearly every time you negotiate—and not fresh out of a fight with your spouse about cancelling the family vacation.

Overall, keep your head in the game and keep running the business as if the deal isn’t going to happen up until the moment you cash the final check!!

FREE DOWNLOAD

Aspiring to sell your business?  Click here to download Gazelles White Paper “Begin with the end in Mind: Sell your Business the Right Way” which includes a list of key players to have on your team and strategies to help you sell.

Quoteworthy

Last newsletter I shared an example of someone who is paralyzed making decisions.  This week an example of a company that isn’t afraid to have conflicts in their leadership meetings and follows rules from Jim Collins Great by Choice when making decisions.  Discover what you can learn from their methods. 

My client is a large distributer approaching $50 M in revenue this year and despite having over 100 employees keeps its leadership team confined to three team members. In the past month discussions in our weekly meetings have surrounded the need to get product to customers more efficiently while ensuring product introductions and POS items arrive on time.  With two locations there’s been an effort to consider reducing distribution at the smaller location and taking on expanded efforts to fulfill distribution at their larger warehouse and home office. 

In one of our meetings the CFO presented a sound case for expanding the major warehouse distribution while cutting back at their other location.  A debate raged about these efforts with the CFO and Sales Manager endorsing this effort while the President urged a more conservative approach taking time spent to analyze the results and forecasts before moving completely in this direction.

The discussion involved a great deal of conflict and no one was afraid to present the brutal facts that supported their position and refuted the opposing views theories.  It’s a perfect example of a leadership team that lives the triangle from Patrick Lencioni’s Five Dysfunctions of a Team.  Each leadership team member is perfectly comfortable with who they are, what their strengths and weakness are, and are uninhibited to present their case despite the strong opposing views and the strength the owner/president possesses because his name is on the company. 

Both the CFO and Sales Manager stuck their chins out to powerfully demonstrate their points of view.  To each persons credit they aren’t afraid to represent their opinions and no one’s attempts to refute their arguments ever became personal despite the emotionally charged point of view sometimes expressed. 

When a clear decision couldn’t be made the group settled for continuing discussions to determine the right outcome for this situation. 

During this discussion, when the President called for an approach that represented talking a half-step and waiting to see how this would affect performance and efficiency, I called to mind a quote from military expert, Karl von Clausewitz who stated, “Many assume that half efforts can be effective.  A small jump is easier than a large one, but no one wishing to cross a wide ditch would cross half of it first.”

Both the CFO and Sales Manager used this to support their data noting that a half step might only achieve enough to prove it didn’t work since only when all measures were established and functioning could a true appreciation of the cost-savings, impact on efficiencies and even morale building elements be truly determined.

We closed that weekly meeting with the plan to revisit it again in our next weekly meeting.  After that meeting I’d been reminded of Jim Collins practice of 10X companies in Great by Choice to “fire bullets, then cannonballs.” 

According to this concept, companies that achieve great success (10X are companies Collins identified as high-performing study cases with the moniker "10X" because they didn't merely get by or just become successful. They truly thrived. Every 10X case beat its industry index by at least 10 times.) are not necessarily more innovative. 

What Great by Choice concluded is that each environment has a level of “threshold innovation” that you need to meet to be a contender in the game; some industries, such as airlines have a low threshold, whereas other industries, such as biotechnology, command a high threshold.  Companies that fail even to meet the innovation threshold cannot win.  But- and this surprised Great by Choice authors- once you’re above the threshold, especially in a highly turbulent environment, being more innovative doesn’t seem to matter much.

The companies in Great by Choice that achieved this “10X” level of performance replaced the mantra of “innovate or die” with the more useful approach of: fire bullets, then fire cannonballs.

The idea of firing bullets before cannonballs is simply this.  First you fire bullets to figure out what’ll work.  Then once you have empirical confidence based on the bullets you concentrate your resources and fire a cannonball.  After the cannonball hits, you keep 20 Mile Marching to make the most of your big success.  (The 20 Mile March is a concept we will explore in a blog this week, watch for it).

What the President of my client company proposed is the present decision is a situation to fire bullets and then once the evidence supporting this decision is accumulated, then the company can fire a cannonball and move in that direction. 

The discussion ensues.  The question perhaps is can bullets be fired that provide enough data to support a decision for moving forward or not?  Or is it required to go all in with the decision to achieve enough data that it is working?  It would seem that the latter would require a full jump over the stream which would not support the bullets then cannonball concept.  The president of the company only had to go back one year to offer a similar decision where moving full ahead with a decision resulted in a poor decision that cost the company considerable money and didn’t lead to the outcome they’d hoped it would produce. 

The two important lessons to consider from my client’s evolving situation:

• In your business is your leadership team able to offer their opinions and feelings about critical decisions without fear that they will be heard and that their input will matter?  This is more a question about whether or not they feel they can offer their opinion as much as having an opinion.  Does your leadership or someone else’s dominance in your leadership team meetings prevent others from contributing?
• Do you understand and follow the concept of “fire bullets, then cannonballs” in your decision making process?

Fire bullets then cannonballs is a critical differentiation from the “10X” companies to the comparison companies in Great by Choice.  Is this a practice you follow, and if not is it something to incorporate into your decision making policy?

If your leadership team is not able to offer their opinions freely in your meetings you need to examine why and make a concentrated effort to prevent this from continuing.  Not getting the opinions, feelings, data and input from leadership team members can not only hold your business back, it can lead to poor decisions made by a lack of critical thinking and sound data that is being suppressed.

This issue can be addressed by doing the fieldwork in Patrick Lencioni’s Five Dysfunctions of a Team.  In this case we’d recommend bringing in an experienced facilitator to ensure the problem isn’t perpetuated by performing this workshop without complete objectivity.

Decision making in business is a critical step.  More businesses fail due to poor decision making than poor execution.  Making decisions requires good information.  Failing to take advantage of the resources and knowledge base of your leadership team simply because they don’t feel they can offer their input is fool hardy.  Adopt the “Fire bullets, then cannonballs” approach and make sure your leadership team is comfortable offering their opinions without fear of reprisal or put downs in order to achieve better decision-making.  

Execution is critical to your business.  Many business experts feel it is the most critical element to business success.  How do you measure what’s most important however? 

While execution is critical, Top Thought Leaders like Peter Drucker believe decision making determines the success or failure of a business.  That means strategy decisions are essential.  Unless you execute properly you will never have time to properly invest enough time in strategic thinking.  That’s why Positioning Systems places emphasis on implementing Strategic Discipline first for most of our customers. 

Leadership that fails to get execution working properly never has time for strategy development.  They ‘re always fighting the “Whirlwind.” 

Your Leadership responsibility is to make sure you are executing properly and making time to strategize your company’s decisions.

A leader who doesn’t have time to make the right decisions is no better than a leader who can’t make decisions.

Let’s explore an example of leadership when it can’t make decisions.

First, a quick reminder of the four factors that make business decisions difficult:

1. Lack of information
2. Timing differences between alternatives
3. Uncertainty about the possible outcomes of the decision
4. A decision maker with an indecisive personality

We may wish to include a decisive and malingering factor every business faces, “The Whirlwind.” 

The real enemy of execution is your day job!   The Four Disciplines of Execution call it the whirlwind. It’s the massive amount of energy that’s necessary just to keep your operation going on a day-to-day basis; and, ironically, it’s also the thing that makes it so hard to execute anything new. The whirlwind robs from you the focus required to move your team forward. Leaders seldom differentiate between the whirlwind and strategic goals because both are necessary to the survival of the organization.

Please read Execute Meeting Rhythms – A Cadence of Accountability to understand the different layers and current employee statistics preventing effective execution. They include:  

• People simply didn’t understand the goal they are supposed to execute.
• Lack of commitment to the goal
• Lack of Accountability

There are two principal things a leader can influence when it comes to producing results: your strategy (or plan) and your ability to execute that strategy.

A past customer of mine is in a prime position to capitalize on opportunity.  The business built a heritage in its industry, growing to just under $10M, the revenue ceiling where competitors begin to notice you.  They are in an exceptional position, owning the building they manufacture from (worth millions), no debt, good cash flow, and capital to invest.  They’ve been willing in the past to seriously pursue mergers and acquisitions to grow their business. 

What they don’t have is a harmonious and decisive leadership team, nor a willingness to strategize and plan for the future.  

The leadership member I worked with manages sales & marketing, administration, purchasing & delivery.  It is a family operation with two brothers managing the manufacturing side. 

For years my client determined he would run his business like McDonalds believing the system is the solution.  Unfortunately his systems do not measure and document to the level McDonald’s achieves.  His managers do not manage the system to any measureable standards.  Metrics for performance are not in place, in part due to my client’s refusal for a long time to hire better managers.  When he paid more (seldom) he simply felt he got the same results.  He’s failed put an effective hiring and recruiting process in place to help him identify and hire “A” players. 

As many times as we set the table to choose a priority, build a dashboard, and monitor (meeting rhythms) progress he always allows the “whirlwind” to overtake him.

He repeatedly asked me what his priority should be.  That’s not the solution.  He needs to take ownership of whatever his priority should be.  He’s indecisive because he feels they are all priorities. As Verne Harnish notes in Mastering the Rockefeller Habits, “A company with too many priorities has no priorities.”

He needs to decide.  When he has made a choice, hiring and recruiting (3x), Marketing (2x) and Meeting Rhythms (1x) he has always had an excuse why he couldn’t maintain the discipline to achieve his desired outcome.

My customer believes he suffers from ADD, which prevents him from concentrating – yet he has demonstrated  discipline to train, compete and finish triathlon events.

What prevents him from choosing and sticking with a priority in his work environment?

It could be the issues discussed in Will Business Coaching Work for you? 

My client asks often for advice and input, he rarely acts upon it.  He tends to vacillate between believing he is exceptional to having no confidence at all.  Believe me from working with him there is no lack of competency.   If he were able to concentrate on One Thing for any length of time I’m confident his results would amaze him, his team, and his partner brothers.

Bottom Line: Despite all these challenge it’s only in the past 6-9 months that the company suffered any downturn in revenue.  However the point of this newsletter is to give your attention to the big picture.

Businesses fail not through poor execution.  Businesses fail due to poor decision making.  In this case a lack of decision making.

A leader who is indecisive fails to choose priorities.  In this case the business risks losing the heritage position the company enjoys.  Worse consequence for not being decisive is how it affects the future.  Strategic Discipline puts you in a position to have time to strategize properly.  To plan for the future.  Choose to execute properly and you will be in a position to make good decisions because you have the time to strategize and view the competitive landscape.

In my client meetings many occasions of perfect synchronicity occur that remind me of the powerfulness of building Strategic Discipline into the fabric of business structure. A recent monthly meeting provided a reminder to the powerful impact that simple recognition offers to feed employees souls. 

I love this quote from Cavett Robert, “"Three billion people on the face of the earth go to bed hungry every night, but four billion people go to bed every night hungry for a simple word of encouragement and recognition."

Don’t forget to recognize your employees and celebrate your victories!

Achieving peak performance in your business requires bringing out the best in your people.  How frequently are you recognizing, rewarding and simply appreciating the contributions your people make to grow your business?

This past month one of my clients met for their 2^nd Quarter Planning.  Each planning meeting we dedicate 15-30 minutes to review the victories that the individual or their department has achieved.  This means including about 3-5 quick stories on success and achievement.  After everyone has bragged about themselves the next exercise asks them to offer success or achievements that they observed others accomplish in the organization.  

Imagine that, you don’t even need to notice how your people are doing; you can enlist the support of your staff to observe and recognize them.  In fact in many cases their scrutiny and detective work is more insightful than yours.   Receiving recognition from your peers can be more uplifting than hearing it from the boss.  Isn’t it your job to give them recognition? A peer observing it means much more.

As we continued through bragging on others it became obvious that everyone was recognizing everyone. In fact one member who identifed just three people as the form suggested, he immediately expanded his, offering he had wanted to include everyone but felt restricted by the form.  (It is limited to two lines to brag on others.)

The stories and tales of achievement included some redundancy, however many offered additional insights and background to the extraordinary efforts everyone made. What do you imagine the meeting room felt like?  Participating purely through video on GoToMeeting I could still feel the change in enthusiasm and upliftment the comments provided.  The meeting was lighter in mood and the openness and vulnerability blossomed as the meeting continued.

The meeting moved on to reviewing last quarter and planning the next quarter, yet the harmony and good will this established flowed through the meeting and made decisions easier.

Every quarterly planning meeting doesn’t go quite as smoothly.  Every team isn’t as cohesive, nor have they built a spirit of harmony, cooperation and trust as this team has.

Aubrey Daniels, (author of Bringing Out the Best in People) offers recognition should be in a four to one ratio. This meeting certainly surpassed that by a multiplier of two or more!

Getting your people to perform at a higher level isn’t always easy.  A good start is to remember this four to one ratio.  If everyone is feeling good about themselves and their contributions, performance improves dramatically.

Another portion of Strategic Disciplines Quarterly Planning Meetings is “What did we learn?”

It’s remarkable what is overlooked each quarter and year as we move forward striving to achieve more.  Your organization will achieve more even if the gains are small.  Success breeds success.  Each gain builds momentum.  Victories recognize the achievement of the individual, department or team, and business!  They elevate good will, and recognition paves the way toward more success.

The “What did we Learn?” exercise often continues the victory parade.  It includes wins and mistakes which when not identified often can be compounded in subsequent quarters ahead.  How often has your organization failed to achieve a desired outcome only to discover the method used had been tested and failed somewhere else or previously in your organization?  This will prevent that from occurring.

Celebrate your victories. You’ll be pleased to see the progress your people are making.  The recognition will please and inspire your team and build steady momentum in your business.

For help building quarterly planning and meeting rhythms that build a cadence of accountability contact Positioning Systems.