2019 Business Excellence Forum – Blinding Flashes of the Obvious – Part 1

For the fourth year in a row, the Business Excellence Forum (BEF) grew and exceeded the previous years in attendance, presenters and content.  This year there were more than 700 business owners, executives, team members and business coaches in attendance in Charleston, SC.  With that many attendees, there was an abundance of formal and informal exchanges of ideas, strategies, success stories and best practices. This year’s forum had an extensive list of keynote speakers whose presentations yielded many Blinding Flashes of the Obvious (BFOs) and new ways of looking at things.  The following are some of the BFOs that struck a chord with me, all of which will enhance the value I bring to my clients.  I am sure that some of these will have a similar effect on you. The event began with Dr. Mark Thompson and Dr. Bonita Thompson, authors of “Admired – 21 Ways to Double Your Value”.  Their presentation was about “Being The Most Admired Brand.”   They presented the five factors needed to be an admired brand:
  1. Who do you admire?
    • We admire people with the same values as us
    • We all need “Power Partners” – mentors
  2. Productive PARANOIA
    • Steve Jobs 1.0 – was fired from Apple. At that time, he was ambitious, arrogant, and lacked humility
    • Steve Jobs 2.0 – re-tooled himself and built Apple into one of the most valuable companies in the world
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  1. Value-Creators – If your house burned down, would you:
    • Rebuild the same House?
    • Using the same Process?
    • With the same Team?
    • What about your business? Does your business create Value?
  2. Never-ending Mission – four parts
    • BHAGs – Big Hairy Audacious Goals
    • OKR – Objectives and Key Results
    • Simplicity
    • Urgency – Creates Learning & Growth
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  1. Deliberate Practice – 6 Parts
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  1. Redefine Success – What is your definition of Success?
img_2846-for-blog They concluded with the secret to passionate growth: img_2849-for-blog And Number 7 Gratitude. Our next speaker was ActionCOACH Chairman and Founder, Brad Sugars.  Under the often-repeated mantra of going back to basics, Brad presented some reminders and updates to the Six Steps to Massive Results seminar.  Highlights include:
  • Don’t fall in love with your product or service – break out of your rut and continually improve and innovate
  • It is no use building your marketing if you can’t keep the customers – make sure you can consistently deliver
  • With the internet and social media, marketing has shifted toward labor, away from spend
  • In the ActionCOACH concept of Test & Measure – testing has become extremely easy because of all the statistics that are available
  • Use the ActionCOACH 5 Way Formula backwards, from Profit up – 5 years, 4 years, …
Stay tuned for the next installment of BFOs from the 2019 BEF.

Stress Test Your Business

One of the most important concepts my colleagues and I at ActionCOACH coach our clients on is being proactive.  Everything from our GrowthCLUB (90 Day Planning Workshop), our use of the ActionCOACH Business Chassis (5 Way Formula), to the alignment consultation we use to start each of our client’s coaching programs, is aimed at promoting proactivity.  Unfortunately, too many of the businesses I am introduced to operate on a reactive basis, reacting on a daily, sometimes hourly, rhythm of solving crisis after crisis after crisis.  The consequences of operating in reactive mode are many; lack of growth, low company morale, low or no profit, high levels of stress, and in some cases, bankruptcy! Chief among the steps toward proactivity is to periodically Stress Test your business.  Here are a few of the tests you must perform:
TEST Explanation
What if this works? “What if this works?” is one of my best coaching questions.  You cannot achieve continuing success without preparing for it.  This doesn’t mean starting a second shift before your sales increase, for example.  It does mean having the plans and processes for starting a second shift prepared as part of introducing your new product.
What if a key part of your business goes down? Machinery breakdowns, illness of key team members, storms, key team retirement or resignations, etc. are a fact of business life.  How much cross training and employee development is part of your daily routine?  How many strategic alliances have you developed?  Do you have succession plans?  Being prepared is a major responsibility of business ownership and leadership.
What is my customer retention? Low customer retention, and/or a low customer referral rate are leading KPIs, indicating a need to proactively redesign your operations.  Simply, if you are not at minimum, satisfying your customers, you have a big problem.  Of course, your goal should be to consistently WOW your customers.  Customers who are only satisfied are not loyal, raving fan customers.
  The results of these stress tests and others, whether good or bad, should lead you to proactive activities.  My colleagues and I at ActionCOACH are ready to assist you to stress test your business and to implement proactive processes.  All you need to do to start your proactive journey is contact us.  

Work on your business, not just in your business.

Some Thoughts About Direct to Consumer Startups

I just finished reading a very insightful article entitled The Race To Reinvent Everything by Tom Foster in the May 2018 edition of INC Magazine.  The article is about direct-to-consumer (DTC) startups, companies that are emulating the Warby-Parker model for many other product categories.  Products currently offered by more than 400 DTC startups range from bras to tampons.  While the article made many interesting points about the challenges and opportunities these startups are faced with, two points resonated with me.
  1. Not All Products Offer the Same Opportunities – Warby-Parker has been extremely successful due to two main factors:
    1. They offer superior value to their customers. Warby is selling a formerly $500.00 item for less than $100.00
    2. This value proposition enabled their customers to own many pairs of glasses, converting a category that was a necessity into a fashion category

The article went on to compare several other products where either the value proposition is not strong enough (sofas), the category is flooded with many DTC startups (Razors), or the major players in the marketplace have the technical resources to jump into the category on a DTC basis in addition to their customary channels of distribution (Razors again).  If you are considering starting a DTC company, you must carefully consider your proposed value proposition along with product costs, including sales and marketing.  Further, this article is a strong primer on the DTC landscape.

  1. Key Performance Indicators – DTC vs. Bricks and Mortar – The article mentioned some major differences between DTC and traditional retail’s ability to collect actionable KPI’s, giving the advantage to DTC. Specifically, DTC companies can capture essential KPI’s, such as customer acquisition cost, number of leads by source or campaign, and conversion rate by source or campaign more rapidly and accurately than traditional retailers.  Customer lifetime value is another very important KPI which is just as hard to predict for DTC startups as it is for traditional retailers.  However, DTC companies can have statistically valid lifetime value data sooner than traditional retailers.  The increased accuracy and timeliness of KPI’s allows DTC startups to finetune their model as early as possible.  Traditional brick and mortar retailers are faced with the need to collect these same KPI’s.  However, it can be more difficult, be less accurate and take more time for traditional retailers.  The section of the article where this is presented is a good summary of Buying Customers a book by Brad Sugars, Founder and Chairman of ActionCOACH.
Whether you are starting a direct-to-consumer or traditional retailer, you should read this article to achieve a strategic advantage over other potential startups in your planned market space.  The article contains lots of additional information you will need BEFORE you get too far on your startup journey.  My colleagues and I at ActionCOACH can further assist you in sorting out your options and planning your success.

Highlights from My Vacation Reading

I took the first two weeks of August for a trip to Europe with my wife, Tammy.  Tammy joined one of Berkshire Choral International’s groups which rehearsed and sang in Budapest, Hungary.  While she was in rehearsals I toured Budapest and caught up on my reading, both business and pleasure.  Following are comments about and links to a few of the articles that struck a chord.
  • Jason Fried in the July/August 2017 issue of INC Magazine in an article headlined Starbucks Wasn’t Built in a Day, subtitled “Entrepreneurs are told to go big or go home. Stop obsessing over scale, and perfect the basics.”   In the article Jason talks about John who wishes to open a tea shop, but often drifted to talking about his next shop, and his next shop, etc.  He advises John to slow down and get the basics right before focusing on rapid growth.  I have long agreed with this philosophy.  While there is nothing wrong with having big long range goals, we emphasize long term planning at ActionCOACH, one needs not to get ahead of one’s self.  One of the major points of the ActionCOACH 5-Way Formula is that a business must be built in balance.  Before I joined ActionCOACH, I had several turn-around clients.  One in particular, a consumer goods company, had great marketing and product, but couldn’t reliably deliver their products to their customers, the retail stores.  Ultimately their customers abandoned them in favor of suppliers that had great product, marketed well and consistently delivered.  My client had grown their business out of balance, and could not cover the basics.
  • In the July 2017 issue of Golf Digest an article about confidence by Sam Weinman titled What If Everything You’ve Been Told To Think Is Wrong? caught my eye. Within the article are several concepts that apply equally to business as well as golf.  One very important concept was highlighted by a quote from Dr. Fran Pirozzolo, a sports psychologist and mental-skills coach “Confidence is a garbage term in that it induces illusions of competence.”  If in business, we confuse confidence with competence, our mind will be closed to our limitations and that will limit our ability to construct plans to overcome them.  It is the difference between an “I Know” attitude which cuts off learning and an “Isn’t that interesting” attitude which encourages learning.

Another concept applicable to business revolves around Stanford psychology professor Carol Dweck’s division of our mind-sets into two categories:

– Fixed mind-set – people who seek validation of their abilities – Growth mind-set – people who believe their skills can be cultivated through effort

The final concept that jumped off the page also came from Dr. Pirozzolo – “Don’t believe the hype.”  During my career in the fashion industry, I was aware of countless fashion designers who crashed and burned because they believed the hype and were unable to adjust to changing market and business realities.

  • From the September 2017 issue of Success Magazine John C. Maxwell has an article about time management 4 Tips to Set Yourself Up for a Better Tomorrow Today.” The title of the article says it all.  In our TimeRICH seminar, we encourage the audience to be militant about their time.  Along the militant line, Maxwell’s article contains a great quote I intend to add to the TimeRICH presentation:

“Guard well your spare moments. They are like uncut diamonds. Improve them, and they will become the brightest gems.” Ralph Waldo Emerson

These are just a few of the ideas I gleaned during my vacation reading, I hope you will find them useful.

Net Promoter Score and Your Business

During recent coaching sessions, the subject of Net Promoter Score (NPS) came up.  My clients wanted to learn what NPS is and how it might benefit their businesses.  Thus, I thought this is a good time to share a few ideas about NPS. What Is Net Promoter Score? Simply put, NPS is a very simple, direct, relatively easy, and effective method to measure your customer’s (client’s, patient’s) loyalty to your business and the likelihood they will refer your business to others.  In other words, how healthy is your customer experience and your customer relationships?  It was developed by (and a registered trademark of) Fred ReichheldBain & Company, and Satmetrix Systems. Net Promoter Score was introduced by Reichheld in his 2003 Harvard Business Review article “One Number You Need to Grow”.  NPS can be as low as −100 (everybody is a detractor) or as high as +100 (everybody is a promoter).  An NPS that is positive (i.e., higher than zero) is felt to be good, and an NPS of more than 50 is excellent. Why is NPS Important? Time after time in measuring conversion rate (as per the ActionCOACH 5-Way formula) by lead type, it is obvious that referral leads have the highest conversion rate of all lead sources.  Therefore, it is extremely important for your business to deliver a great customer experience (GCE).  A great customer experience will result in a high NPS.  A high NPS will enable your business to have a robust and consistently effective referral system.  The formula is

GCE -> HNPS -> NewCustomers -> Revenue -> Profit

Many successful ActionCOACH clients have achieved completely referral based businesses, with the ability to add as many new loyal customers as they can serve.  An added bonus to a referral based business is lower customer acquisition cost and higher lifetime customer value. How to Develop Your Net Promoter Score At its core, NPS is derived from a single question customer survey.  The question is

On a scale of 0 to 10, how likely is it that you would recommend our company/product/service to a friend, family member or colleague?”

Those who respond with a score of 9 to 10 are called Promoters, and are considered likely to exhibit value-creating behaviors, such as buying more, remaining customers for longer, and making more positive referrals to other potential customers. Those who respond with a score of 0 to 6 are labeled Detractors, and they are believed to be less likely to exhibit the value-creating behaviors. Responses of 7 and 8 are labeled Passives, and their behavior falls in the middle of Promoters and Detractors.  The Net Promoter Score is calculated by subtracting the percentage of customers who are Detractors from the percentage of customers who are Promoters. For purposes of calculating a Net Promoter Score, Passives count towards the total number of respondents, thus decreasing the percentage of detractors and promoters and pushing the net score towards zero. There are a variety of thoughts within the NPS consulting industry as to:
  • When to survey, and how often?
  • Types of surveys – relationship vs. transactional
  • Additional questions (if any), how many, what should they be?
  • How many people should be surveyed?
  • Format of the survey
There are many resources available to enhance your understanding and implementation of NPS.  This blog was based upon a great web article by Christian Reni ( https://customergauge.com/news/how-to-calculate-the-net-promoter-score/ ). If you wish to build your business on a solid foundation of raving fans who are both very loyal and who consistently refer new customers, NPS is an essential part of your toolkit.  My colleagues and I at ActionCOACH can assist you in building and implementing this important business building strategy.

2016 Business Excellence Forum – Blinding Flashes of the Obvious Part 2

More BFOs from Day 1 of the 2016 BEF, Troy Hazard continued. Troy told a story about car salesman who had sold him a luxury car in Australia where he lived before moving to the USA a few years ago. The salesman asked how often he traded cars in, Troy answered about every 4 years. The salesman began contacting Troy about every 6 to 8 weeks, by mail, email, telephone, you name it – when Troy moved to USA permanently the salesman continued kept in touch.  After about 4 years the salesman called to say it’s time for a new car.  Troy told the salesman that he permanently moved to US and salesman continued to stay in touch.  On a family visit back to AU, Troy dropped into the dealer and asked the salesman why he continued to stay in touch, answer … “I sold more than 100 cars to your friends.”  The business question to ask yourself is; How is my business staying in touch with our customers, members, advocates and raving fans? (See the following section – day one BFOs from Brad Sugars – The Ladder of Customer Loyalty). Next, Troy urged us to always have absolute clarity of where the money/profit comes from.  His example was an electrician who repositioned to being a Total Energy Solution. Troy also told us about one of his companies that had five salesmen.  Following a typical bell curve, at one end of the curve was a salesman who was only doing about $60,000 in commissions and was way below quota.  In the middle were three salesmen at or slightly above quota, earning $100,000 to $125,000 in commission income.  At the other end of the bell curve was a salesman who was pulling in about $275,000 in commissions.  Troy then threw a trick question at us, asking who he fired.  Most guessed the $60K salesman.  In fact he fired the $275K salesman, explaining that he was disruptive, not a team player, stealing leads from the others, didn’t embrace the company culture, etc.  The business question here is who on your team is not fully engaged with the mission/vision/culture of your business?  By the way, he also fired the 60K salesman. The final BFO from Troy Hazard was very simple; Change or Die, one change at a time!   Our next speaker was Brad Sugars, the founder and chairman of ActionCOACH.  Brad opened with the statement that “Profit comes from REPEAT BUSINESS.” Next Brad presented the ActionCOACH Ladder of Customer Loyalty. IMG_7935 small The first rung of the ladder is Suspect – a target or an ideal customer.

Suspects are moved up the ladder to Prospect via marketing.  Prospects have taken some action; responded to an ad, visited your store, called to ask buying questions, etc.  The BFO here relates to the ActionCOACH 5 Way Formula, “if the Conversion Rate is low, the Target is WRONG!”Prospects are moved up the ladder via sales to Shopper. Shoppers have made their first purchase.  The BFO that Brad mentioned here is “the 2nd purchase is 10 times more important than subsequent purchases.”

Shoppers become Customers when they make that all important second purchase.  This is where you begin to build a relationship with your customer.  Have a consistent point of contact and establish genuine know-like-trust in the relationship.

As you develop stronger and stronger relationships with Customers they can become Members.  Members will develop a sense of belonging.  The sense of belonging must be enhanced by superior, personalized customer service and continued relationship building.  The BFO here is Great Customer Service starts with doing business with those you want to do business with (see Target above).

Continued relationship building and consistent superior customer service will result in your Members moving up to Advocates.  A major BFO here is every customer defines customer service differently, that is why building strong relationships is the KEY.  Advocates will refer their friends and network to your business.

If you consistently deliver exceptional customer service and continue to build relationships, your Advocates will become Raving Fans.  Raving fans will refer all of their friends and their networks to your business.

Whew, this wraps up my BFOs from only the first day of the 2016 BEF.  Stay tuned, there is much more to come.

Three Mini Blogs

Effective Delegation – Step 1 I’ve been rereading “The 7 Habits of Highly Effective People” by Stephen R. Covey.  In 7 Habits, an important distinction is made between “Gofer Delegation” and “Stewardship Delegation.”  I realized that in my ongoing series of blogs on the subject of Effective Delegation I failed to make clear that the series is focused solely on Stewardship Delegation. Aside from deciding to actually begin delegating and having a plan as to what items to delegate, the first step in delegating any responsibility under Stephen Covey’s and my definition of stewardship delegation is defining and communicating the Desired Result.  Once the desired result is clear and understood by both you (the delegator) and the person you are delegating to (the “delegatee”), they are enabled to take responsibility to deliver that result.  It is up to the delegatee to determine how the methods that will be implemented to deliver the desired result.  This mutual understanding of the target is the foundation upon which leverage and success is built.   A Strong Reference to an Article (and Book) In the January 2016 edition of “Success” magazine there is a wonderful article by Amy Morin entitled “13 Things Mentally Strong People Don’t Do excerpted from her book of the same title.  Here are the headlines, please read the article or the book for the details:
  1. Waste time feeling sorry for themselves
  2. Give away their power
  3. Shy away from change
  4. Squander energy on things they can’t control
  5. Worry about pleasing everyone
  6. Fear taking risks
  7. Dwell on the past
  8. Repeat their mistakes
  9. Resent other people’s successes
  10. Give up after their first failure
  11. Fear “alone time”
  12. Feel the world owes them something
  13. Expect immediate results
I’m sure you will benefit from learning more about this important subject.   Headline in a Newspaper The other day I read the following headline “Pressure on Apple for Its Next Big Thing.”  This headline reminded me of one of the key things I learned when I was consulting at a company in the midst of a turn-around attempt.  The simple lesson is that there is never a “Silver Bullet.”  The company I was working with got into deep financial trouble because they keep searching to the one product that would save the business.  In fact they already had an excellent product offering that they could not reliably and consistently deliver.  One by one their retail customer base stopped ordering from them. You may be thinking that their silver bullet was fixing their fulfillment process.  Their inability to fulfill orders was a result of several factors including poor inventory control, poor bookkeeping and a lack of sales analysis, to name just a few.  One of the main messages of the ActionCOACH 5 Way Formula – Business Chassis is that your business can achieve massive results if you cover your bases and grow your business in balance. My colleagues and I will be happy to work with you to implement any of the concepts mentioned in the blog.

What Can We Learn About Business from Wimbledon?

It took 200 IBM statisticians to produce the statistics for Wimbledon and the BBC that we all consumed during this couple of weeks of tennis. So why are we consumed by this incredible amount of information that’s available?  What is its purpose and how do we learn from what professional sports have been doing for years and apply it to business? Whether it’s your favorite baseball team winning their division or an individual athlete competing at the highest level, the statistics that follow them around are incredibly detailed.  The statistics tell us fans, the teams, coaches, managers, and the athletes themselves how fast, far, accurate, efficient, successful (or not) they or their strategies are.  We find out their strengths, weaknesses, what to exploit, what to focus on and ultimately how they perform against their competitors.  Statistics influence decisions such:
  • do we bring in a left-handed relief pitcher to face Slugger, the home run machine or stick with the starter with his current pitch count of 84?
  • shall I work with my coach on hitting more fairways or improving my approach shots?
Imagine for a second sport without a winner, no score, no position, no medal, no title.  How many of us would watch or participate?  Yet in business we often have no idea how we or our team is performing, or how we compare in the market or a sector. In business, stats can tell us if we are profitable, if we are converting, what our customer service is like, how our sales team is performing, what products are selling and not, how efficient we are, what makes us profit and looses us profit.  There is so much we can learn from sports fanatical approach to statistics.  The information is available, it’s just hidden away in your business and needs someone to ask the right questions and use the right technology to allow you and your team to perform at your optimum, working smarter, not harder. Now imagine you could sit in your office with all the information available for your business with a dashboard of your Key Performance Indicators (KPI’s) just like IBM did for Wimbledon, knowing what works and what doesn’t, rather than using only gut feel.  Would your odds of success and your speed to success improve?  You bet they would. At ActionCOACH we focus our clients on the KPI’s that drive their businesses.  They use dashboard technology and tracking tools that helps them make much better strategic, structural and operational decisions.  So if you want to feel like the BBC or IBM but only have SME resources, and you want to out race your competitors, get in touch and see what your stats say about your business.

Great Quote From Jack Nicklaus

I was reading GolfWorld magazine the other day and saw the following quote from The Greatest Game of All: My Life In Golf by Jack Nicklaus and Herbert Warren Wind:
“How do slumps begin?  They begin from neglect, and neglect finally leads to a loss of confidence.  You can practice a lot but still be neglectful – neglectful of the fundamentals.  During a long stretch of poor golf I suffered through in the winter and spring of 1967, I tried to rouse my game by attempting to bring off increasingly complicated shots.  What I should have done was to back up, return to the fundamentals, and get one thing at a time under control.”
You might ask what this quote about golf has to do with business, but to me this speaks volumes about business.  When working on turnarounds before I joined ActionCOACH, I saw first-hand how much trouble a business can get into by ignoring the fundamentals and how troubles were magnified when those businesses tried to hit home runs to get out of trouble. Heroic measures rarely work.  Returning to fundamentals, returning to Action’s 5 Ways and 6 Steps will provide a solid foundation for any business to build (or rebuild) upon. If you are facing or are in a slump, return to business fundamentals.  Actually, even if your business is currently booming, never lose sight of the basics if you want to achieve long term success.