How to grow your business in a recession (2023)

introduction

This article is the result of 20 years of research and collaboration with SMEs at all stages of the business cycle. It examines the essential 10 things you need to grow your business in a recession.

The 10 things you need to do right to grow your business in a recession are:

1. control
2. cultural
3. Strategy
4. Building an “A” team
5. strategy execution
6. Make the company stand out
7. Put your employees first
8. systems and processes
9. productivity
10. performance measurement

We dive deeper into these areas and show you the necessary analysis tools and additional books you can use to better understand how to make the changes in your business so that you come out stronger and stay ahead of the competition are.

General strategy for growing a business in a recession?

So what is the overall game plan?

Read the following story to better understand what your overall business strategy should look like in a recession:

Two men were walking through a forest and saw an aggressive looking bear.
The first man took his running shoes out of his backpack and started putting them on. The other man said, "Do you really think you can outrun that bear?".

The first man replied, "You don't have to... I just have to run from you!"

That's all you have to do. Outperforming the competition is important, and that means running your business better. It also means that you will emerge from the recession stronger than you entered it. The good news is that everyone can improve at what they do. Nobody gets it 100% right, but the point of a recession is that you have to work harder at everything to make the same progress as before.

This article aims to help you better master the 10 core competencies of your company.

foundations

Before we take a closer look at the 10 areas, let's examine some of the fundamental elements of business that impact your ability to achieve growth.

In working with many entrepreneurs I have observed three three keys to business success which, if not in place, will ultimately fail. They are:

• passion/purpose
• Vision– have a clear idea of ​​what you want (maybe you don't know how to get there)!
• propulsion/performance- Reckless execution is usually fueled by stats and a blind belief that you can solve problems along the way

passion/purpose

To me, you shouldn't run a business if you don't have a passion for what you do. The leader must embody the passion and purpose of the organization. Over the years I've met quite a few "burned out" entrepreneurs.

My coaching with these leaders was only to help them reignite that passion by showing them different ways to get out of their current situation that may have grounded them and made it difficult to see the possibilities.

Vision

Once you understand what your passion is, you need a clear idea of ​​what you want to do.

Note: It's okay to have no idea how you're going to achieve that vision. When Richard Branson decided to start an airline, he had never managed an airline before, so his success was based on a strong vision. When he decided to pursue his vision, the plan to achieve the goal would have been at a high level while missing many details about the specific moving parts.

propulsion/performance

It's great to have a clear vision, but it won't stay that way unless you stick to a plan and make it happen. As the famous Brian Tracy quote says:

"A goal without a plan is just a dream."

So what tools do we have to help us?

Simon Sinek, "Start with the Why"

Before anyone actually buys from you, get clear on why people are buying from your business - it's not about your product/service, it's about you and where you should have placed your branding.

What do you believe in? Why should people care about you? What do you wake up from in the morning?

Golden Circle von Sinek, S. (2009) „Start with why“. Pinguin

For me this concept was very powerful because for the first time in my life I really understood what it means to have a vision/purpose with my passion for business. It took me 3 months to really evaluate what I was doing, why I wasn't as successful as I could be and to focus on what is important to me and my clients.

therapy

Read this book or watch the 20 minute video on YouTube and before you do anything else, decide what your WHY is. What really drives and inspires you?

To be the best you can be

In an economic downturn, there's less activity, so you need to differentiate yourself from the competition.

In his book, Jim Collins wrote about the "Hedgehog Principle," which is about building a business around what you're passionate about, what you're good at, and what generates a sustainable income for yourself. This immediately sets you apart from all the burned-out doctors who have long since lost their passion.

If you have never read Jim Collins,Good to great, then you have to. There are some really useful business tools that he's discovered while working with a variety of companies. We will refer to some of them as they apply to companies of all sizes at different stages of growth.

The first, the "Hedgehog Principle", is essential to ensure that you as a company are focused on the end goal.

Egelprincipe van Jim Collins, J. (2001), „Good to Great“, Random House

How do you develop your hedgehog? We've already explored the importance of being passionate about your business. That was the starting point. The next step is to find out what your company does best. Customers are paying for quality (although this is more difficult in a recession when budgets are often tight).

So if you know what you are good at, what customers are willing to pay for, you can develop a financial engine. What is an economic engine you say?

The financial engine is another way of saying how a company makes money. I would suggest it's more than that. The decisive factor is which of your business activities regularly bring you profitable income and regularly generate money for the company. Businesses need a regular cash-generating income to be able to pay their fixed expenses each month without stress.

therapy

So what are you:

• deeply passionate?
• Best or at least very good?
• Product/service that generates regular income

Take some quiet time and think carefully about these questions, and then discuss them with your team. Are you doing what you believe in or just trying to make a quick buck?

Gain momentum (flywheel effect)

Once you have a solid foundation for growing the business, you need to start thinking about how to accelerate growth. What factors do you need to grow? This is where the flywheel effect described by Jim Collins comes into playGood to great.

Svinghjulsprincip van Jim Collins, J. (2001), „Good to Great“, Random House

There are two stages in the flywheel effect.

• build up
• breakthrough

The first is to get the base in place. It means being the best leader you can be. We'll explore how to do this later, including how to build your "A" team and make sure everyone is motivated enough. The next step is a disciplined approach to running the business.

Good to greattalk about facing the brutal facts. This is difficult for most people. But tackling the difficult things first is the key to progress.

In Steven Covey's The 7 Habits of Effective People, he talks about filling an old-fashioned Kilner Jar with rocks, gravel, sand, and water. If you put the big stones in first, everything else around it will fit. If you do it the other way around, you won't get the building blocks in - the same goes for the building blocks of your business.

The second discipline is “sticking with it” – that is, sticking with what you know, doing it really well and innovating, and evolving to become better at what you do , instead of chasing after the latest tempting idea . it will lead you in a completely different direction.

annotationHedgehogis on the verge of a breakthrough. There's a good reason for that. When you have a good team, are disciplined, and have tackled the tough problems, you simply need to do more of what you do best to accelerate growth. You can't do that when you're distracted.

The next level of disciplined trading means consistently implementing your strategy. This is where technology can help. That's because technology is great when you need to do something regularly and consistently by following a process.

therapy

Go through each of the phases of the flywheel. Where are you going? What needs to be worked on? Update your business action plan.

Growing your business is a process

Based on years of hands-on experience and research, I believe there are 10 core skills an entrepreneur must master in order to be successful.

These are:

• 1. control
  2. cultural
  3. Strategy
  4. Building an “A” team
  5. strategy implementation
  6. Make the company stand out
  7. Put your employees first
  8. systems and processes
  9. productivity
  10. performance measurement

Done right, you will quickly be one step ahead of your competitors with a dedicated team, a clear focus and solid business systems and systems and processes to support you in the most difficult times.

The 5 levels of leadership

I sin swamp,good to great,Jim Collins describes 5 levels of leadership.

Level 5 leaders (the most capable leaders) demonstrate a strong blend of personal humility and unyielding will. They are incredibly ambitious, but their ambitions are primarily for the cause, the organization and its purpose, not themselves.

The hierarchy can be seen here:

Level 5 Leadership von Jim Collins, J. (2001), „Good to Great“, Random House

So the question you are asking yourself is what do I need to do to become a Level 5 leader? In her bookThe leadership taskJames Kouzes and Barry Posner break this down into practical steps you can take to develop your leadership style.

They divided the management concept into 5 elements:

• Model the way
• Inspire shared values ​​with your team
• Challenge the process
• let others act
• Encourage the heart

What does that mean?

therapy

Research the term Level 5 Leadership. What does that mean? What can you practically apply and what do you need to work on?

Model the way

Hopefully, the days of managers educating their team based on need-to-know information and acting under the mantra of “do as I say, not as I do” are long gone. What do you do when you move away from this deeply flawed model of "leadership"?ActuallyWhat should you do to demonstrate good leadership to your team?

If you really want to make your business a success, you have to believe in what you do and show it in your actions. Therefore Simon SineksStart with the whyis so important. You need to understand your WHY. What drives you?

Once you're clear about what you're trying to achieve, share what you're saying and what you're doing with your team. That means you need to model the road. You need to be clear about your values ​​and make sure the team you recruit will help you share those values.

You then need to make sure your values ​​are reflected in your actions because people are very good at spotting leaders who are acting (saying they believe what they believe but doing something different).

therapy

In the coming months, take a look at your own behavior and consider whether your behavior is what you want to reflect on your team. What can you change for the better?

Inspire for a shared value

When you are clear about your goal and have a sustainable business model, you need a team that shares the same values ​​as you to achieve superior performance.

This does not mean that they are all clones of you, but that they believe what you believe and show it through values ​​that you all share. Values ​​such as professionalism, doing a good job, etc.

You must convey your values ​​and vision to your team. Draw a picture of what the future might look like. Use broad brush strokes how the future might look like. Stay away from the details when painting a picture of the future, as what you originally envisioned rarely turns out to be what you originally imagined.

Instead, imagine with your team what the future might hold and, in vague terms, how to get there. The values ​​you share will enable you to navigate through the challenges that travel inevitably brings.

therapy

Review your shared values ​​and then communicate them to your team.

Challenge the process

The world in which your business operates is constantly changing, which is compounded in economically turbulent times. This means you need to constantly review and monitor all aspects of your business. When was the last time you did a thorough evaluation of your business? Which aspects are essential for survival and which do not add value?

You and your team have to regularly question your processes. This is not about change for the sake of change. The question is whether a process can be improved - can it become more efficient in other ways or has it become obsolete?

I recently worked at a company whose accounting process was just an electronic copy of how books would have been used for 30 years. The process was time consuming, inefficient and didn't give them the control they really needed despite the amount of paper they printed. With modern technology, it was easy to eliminate many of these unnecessary processes while gaining more control and information. Before, they just never thought about contesting the lawsuit.

In his theory ofaggregation of marginal profits,Dave Brailsford, who enabled him to build a world champion in women's cycling during the Beijing Olympics, advises to look for small wins in all areas. Those small victories eventually lead to big victories.

In practice, this means constantly looking for opportunities for improvement and implementing them if necessary. Engage the team in this process so they are involved in how changes will be implemented once they are on the coal side and have a better idea of ​​what would work.

Build an ethos in the team that change is the new constant. Get in the habit of initiating, designing, and running small experiments or pilot projects, something that comes in handy any time I test an idea before making big changes. Generating small wins on a regular basis provides a sense that change can be positive and rewarding, which in turn encourages new ideas to challenge the process.

therapy

What are you doing to question the process? How does your team challenge the process so they feel comfortable doing it?

let others act

If you try to do everything yourself, you limit your development and growth opportunities enormously. Your entire team should be given the opportunity to work on the company. Your frontline workers are aware of the limitations of your processes and may have ideas to address them. How do you get them to help you grow the business?

Encourage collaboration by building trust and fostering relationships within your team. Empower others by helping them develop their experiences to increase their confidence and skills. This strengthens their self-determination. This means that as they improve their own leadership skills, they can help you work toward that shared vision.

therapy

How do you move others? How do you support them to feel safe when things don't go according to plan? Can they fail so they can learn?

Encourage the heart

Recognition is an important feedback loop to ensure your team is following you and helping you achieve common goals. Find ways in which you feel comfortable acknowledging the contributions of others. Larger organizations will need to install systems that manage this process automatically, but for smaller organizations it's a matter of remembering the little things, like simply saying thank you for a job well done, the occasional free sandwich in an informal setting where people can that employees can network, ice cream on a sunny day, etc.

We'll look at that later, but money isn't a motivator for most people, except for salespeople.

The key is to pause and acknowledge and celebrate small victories so the team sees progress and creates the sense of community that comes with shared success.

therapy

How do you stimulate the heart? What to do to really say thank you?

Teach good habits

Stephen R. Covey's groundbreaking book The 7 Habits of Highly Effective People identifies the key personal habits you need to develop if you want to be a successful leader.

7 van Covey, Stephen R. (2004), "The 7 Habits of Highly Effective People". FranklinCovey

These habits are well documented and if you search you will find many summaries.

In summary, the 7 habits are:

1. Be proactive
2. Start with the end in mind
3. The important things first
4. Think you win
5. First try to understand, then to be understood
6. Synergy
7. Sharpen the saw

What does that mean in practice?

therapy

If you have the opportunity, find a synopsis of the book or read the book if you have the time.

Be proactive

So what does it mean to be proactive? It simply means that you try to imagine what will happen next in a given situation and when you are in control of it, do something about it. Take the lead, don't wait for something to happen to you. make things happen. Take the time to dream about your future state, what can you influence?

The book describes the idea of ​​circles of influence. There is the inner circle of what you can control and the outer circle of what you cannot control. Research shows that when you focus on what you can control, you increase your influence. Trying to control the things you can't control leads to more frustration and a narrowing of your sphere of influence.

therapy

What can you check? What can you focus on? When you encounter a challenging situation, think you can make a difference.

Start with the end in mind

If you're running a business in a recession, you need to have a clear vision of what you want to achieve. Here's what Steven Covey had in mind with his second habit. How something is to be achieved is often not entirely or sometimes not at all clear.

But if you have a clear idea of ​​what you want to achieve, then that's what this habit is all about. Start with what you intend to do with the end goal in mind. This will help you make the right decisions that will lead you to what you want to achieve.

As the famous paraphrase of the conversation between Alice and the Cheshire Cat from Lewis Carroll's Alice in Wonderland says, "If you don't know where you're going, any road will get you there." Knowing where you're going will help you make the right decisions meet to help you get there.

therapy

What is your end goal? What do you want to achieve? Write down your personal and business goals and display them prominently to remind you of your ultimate goal.

The important things first

When deciding what to do, we often tend to do the easy tasks first because we think it will help us get started. However, this is rarely helpful as we spend valuable creative time at our best on trivial tasks.

This habit is about what is important and what is urgent. Priority does not need to be given to urgent but important tasks for each manager, and on these types of projects you work alongside the company. What are you doing right now? Does it move the company forward?

Below is an overview of the matrix:

Eisenhower's Decision Matrix

The order in which you prioritize your time is important. After completing tasks in the urgent and important quadrants, you should spend most of your time on non-urgent but important quadrants, as this is where you will spend time working on the business. The remaining two quadrants are tasks that should be delegated or eliminated because they are not important to you as a leader.

therapy

Make the Eisenhower Decision Matrix an essential tool to help you manage your time so that you spend your time working on what gets you to your end goals.

Think you win

You might think that in the highly competitive world we work in, it's all about winning. When you win a job today without thinking about the consequences (you often hear it on reality shows, the contestants want to win at all costs and don't care what other people think of them). I have no idea where the idea that it's okay to put your goals ahead of others came from, but that's the exact opposite of what you need to do to build a sustainable business. People have long memories, deviate from their ethics to make a quick profit now and lose later. For example, years from now people will be asking what were YOU doing during the COVID19 lockdowns?

So when you negotiate, think about what's in it for both parties. What are the goals of the other party? How can both achieve their respective goals and achieve a win-win situation? This way of thinking means you become a trusted partner and lead to future collaborations that would be impossible if both parties didn't trust each other.

therapy

How can you work with your suppliers and key partners to ensure everyone wins?

First try to understand, then to be understood

You might think that in the highly competitive world we work in, it's all about winning. When you win a job today without thinking about the consequences (you often hear it on reality shows, the contestants want to win at all costs and don't care what other people think of them). I have no idea where the idea that it's okay to put your goals ahead of others came from, but that's the exact opposite of what you need to do to build a sustainable business. People have long memories, deviate from their ethics to make a quick profit now and lose later. For example, years from now people will be asking what were YOU doing during the COVID19 lockdowns?

So when you negotiate, think about what's in it for both parties. What are the goals of the other party? How can both achieve their respective goals and achieve a win-win situation? This way of thinking means you become a trusted partner and lead to future collaborations that would be impossible if both parties didn't trust each other.

therapy

You have two ears and one mouth, and they should be used in conversation in that order. The next time you need to investigate a problem at your company, try to observe yourself and think: Did you really get the other person's point of view? In most cases, the differences between people's opinions are different sides of the same problem, and someone else's perspective is just as valid.

Synergy!

You might think that in the highly competitive world we work in, it's all about winning. When you win a job today without thinking about the consequences (you often hear it on reality shows, the contestants want to win at all costs and don't care what other people think of them). I have no idea where the idea that it's okay to put your goals ahead of others came from, but that's the exact opposite of what you need to do to build a sustainable business. People have long memories, deviate from their ethics to make a quick profit now and lose later. For example, years from now people will be asking what were YOU doing during the COVID19 lockdowns?

So when you negotiate, think about what's in it for both parties. What are the goals of the other party? How can both achieve their respective goals and achieve a win-win situation? This way of thinking means you become a trusted partner and lead to future collaborations that would be impossible if both parties didn't trust each other.

therapy

As the world becomes more complex and integrated, the term strategic partnerships is becoming more common. This is where synergy becomes crucial. If you work with another company or organization, do both parties benefit from the collaboration? If not, it can be resolved or both parties must move on

Sharpen the saw

Stephen Covey's 'Sharpening the Saw' is about continuous improvement for both you as a manager and for the company. Change is the new constant, which means that training, development and innovation should be core processes in your company. What are you doing to improve your skills and those of your team? Can running a business during a recession affect your mental resilience? What are you doing to stay strong?

This is crucial. The business world, especially lately, is full of global companies that are completely missing out on emerging markets that have completely destroyed their companies like Kodak and Blockbusters.

Don't treat your company to a Kodak moment.

Leaders eat last

There are countless books on management. What does a good guide book look like? After doing a lot of research and attending leadership workshops, seminars and webinars, it was a breath of fresh air when I read Simon Sinek's book,Leaders eat last. Sinek wrote an easy to read book that makes sense and has great ideas on how to become a better leader.

Simon Sinek, (2014), "Managers eat last", Penguin

Back to Simon Sinek and this time with his book,Leaders eat last.

To me, this book is a good summary of the skills you need to develop if you want to be a good leader. This is a very readable book and covers the main points:

• The leader drives the culture
• People need to feel safe
• togetherness
• cultural
• courage to do the right thing
• Authority for those with the information

I see that less now, but in my early days as an independent business consultant for the government's Business Link service, I was asked by business owners why employees aren't doing what they're told. Working with my co-advisors I quickly saw that it was actually the business owner who was the problem as they were essentially putting themselves first and frequent yelling and yelling made the employees feel unsafe or together (aside from resisting their common boss enemy).

Sinek documents the modern leadership approach, which is more authentic, and the leader can now do that for his team and not the other way around in more traditional companies.

The leader drives the corporate culture. Ultimately, this is how you get the team you deserve.

In tough times, you need to make your employees feel safe. Here it is important to have a good understanding of numbers, to generate a flood of new questions and to maintain the impression of stability. This is the hardest thing for any entrepreneur or team running a business. Employees have no control over the company's finances, so they have to rely on you to know what you're doing. So think carefully about what information you share with your employees, because it's your job to help them feel safe.

The next element you need to get it right is a sense of belonging and togetherness. Can your team identify with you and the company? If you cut them open metaphorically, would they be like a rock and does your fire go through them?

Sinek echoes a point made by other respected authors that one must have the courage to do the right thing. One of the things I've seen is that when there are two options, the correct one always seems to be the harder of the options. I'm not sure how it works and maybe it's my personal experience. Jim Collins in his bookGood to greatcalled it "Confrontation with the Brutal Facts".

I grew up in a generation that was given facts on a need-to-know basis, which never worked for me. If you're tasked with finding a job, yes, maybe that's fine, but most jobs today involve new situations that have no precedent, and as a result, your team needs to know a lot more than they originally intended. Get used to sharing information with your team, whether they should know it or not, because problems are often multifaceted and you don't know everything. When the team has the information and training to use it, they should also have the authority to move forward without having to constantly rely on you.

For me, Mahatma Gandhi, the great leader of India, summed up leadership for me when he said, "Be the change you want to see..."

therapy

For me, the action is reading the book. It's easy to read and full of examples on how to look good.

what is your culture

"Culture eats strategy for breakfast," Peter Drucker, the legendary management consultant, is quoted as saying. To be clear, he didn't believe that strategy was unimportant, but that a strong and powerful culture was a surefire way to do business. How strong is your culture? What can you do to improve it?

Developing the right culture is a book in itself as it involves building the right sense of community, maintaining and adapting to the company's business environment.

In her bookBasics of strategyGerry Johnson, Richard Whittington, and Kevan Scholes described The Cultural Web as an approach to looking at and changing the culture of your organization. Your approach allows you to discover the assumptions and practices that make up the culture and, if necessary, work to align them with what you want to achieve.

So what are the elements of the cultural web?

Gerry Johnson, Richard Whittington and Kevan Scholes (1992), "Basics of Strategy", Perfect Paperback

The elements of the cultural network are:

stories- What kind of stories are being talked about? Who is in the stories and what values ​​and behaviors do they represent?

Symbol– The visual representations of the company, including logos, the opulence of the offices and the formal or informal dress code.

rituals and routines– Daily behavior and actions of people showing what is acceptable. This determines what is expected in certain situations and what is valued by management.

power structurer- Where is the real power in the company? In any business, power and influence are not always in the hands of those in power. Power and influence do not always depend on the position someone holds in the company. For example, I have seen that financial coordinators who are not part of senior management have significant influence over a company.

organization structure– This includes both the structure defined by the org chart and the unwritten lines of power and influence that indicate whose contribution is most valued.

control systems– The way the organization is managed. This includes financial systems, quality systems and rewards (including their measurement and distribution within the organization).

therapy

What does your cultural network look like? Take your time and document your cultural network. Then share it with your team. You will bring a different perspective and together you will know the strengths and weaknesses and where action is needed to create a strong culture.

Which values ​​are important?

When I work with a company, the tools I use inevitably lead me to wonder what their values ​​are. There are several tools that can be used to determine the values ​​of a company. A Google search reveals countless tools that often come with expensive consultants. My thoughts are that most of this complicates the process of disclosing your company's values. How would you describe the values ​​of your company? What are the top 4-5 values ​​you can articulate?

I ran a peer to peer group of SME CEOs in the North West of England for a number of years. Once I got the group together, I asked them to do a presentation about their company and include their values ​​in that presentation. We didn't use fancy tools or consultants, the entrepreneurs held meetings with their employees and they discussed what they thought their values ​​should be. What was fascinating was that all entrepreneurs had the same values ​​as me.

I've done this exercise with many more entrepreneurs now and the values ​​most people embrace are:

• Professional/Integrity/Honesty/Trust/Good Job
• Customer Service/Carry On/Fall Back
• Initiative/self-starter/innovation/passion
• teamwork/collaboration/
• Respect/Diversity/Environment

Once you've agreed on your core values, you should hire and fire based on those values. All team members must display these values. If you don't live these values, your employees will not feel safe, because it is a basic human instinct to want to be part of a community of values.

I have tried to bring values ​​together that I think encompass essentially the same values. So what are your values, how do they differ from this list?

therapy

Sit down with your team and find out what your values ​​are. Use your values ​​as a guide when making decisions in the coming months. Are the decisions you and your team making in line with your values ​​or just wishful thinking?

Strategy

Define your business model

Alex Osterwalder and Yves Pigneur published the business model canvas in the bookgeneration of business models. For me it was a game changer to quickly grasp the core components of a company, analyze them and test whether the business model really makes sense.

I was never a big fan of the traditional business plan because they took forever to write, they were outdated once they were written, and you never knew if the business model had holes or not. The Business Model Canvas gets around it because it captures the essence of a business on one page. The book explains how the individual elements interact with each other.

Alex Osterwalder, Yves Pigneur (2010), "Business Model Generation", Wiley

When using the Business Model Canvas, I always start with the Customer Segments box. Because at the end of the day, the customer is everything. Your business should be driven by customer demand. Without that you have no business.

A customer segment is a group of customers who have similar characteristics in what and how they buy from you. They must be able to define a customer segment based on geography, industry, job title, demographics, problem/wish they are trying to solve, etc. You can sell to multiple segments, but make sure you identify the segments that contribute significantly to the company's reputation. Sale.

The next step is to look at how you manage the relationships with the customers and document that in the Customer Relationships field. Are you an e-commerce business and is the relationship through technology? Are you a solution-oriented company that sells more expensive machines, technologies or services and therefore needs a personal relationship due to the more demanding sales process?

In the "Channels" field you can note the channels through which you communicate. This can be email, web chat, phone, via systems, personal advisors, etc. The answers in this box should reflect how you manage your customer relationships. Are they consistent?

So now that you understand the different needs of customers, who you communicate with and how you communicate with them, you need to understand how you add value. This is by far the most difficult box to fill. We'll look at the Value Proposition Canvas by the same authors, as that's a topic in itself.

The fields on the top left are easier to fill out. In the Key Activities field, write down your key processes, e.g. B. Finance, Marketing, Operations. HR etc. What are the main things you need to do to add value to the customer? Watch everything you do.

Consider doing it yourself or outsourcing. (The decision to make or to buy.) The corresponding Key Resources field contains important people and assets that you trust. "Key Partners" is the list of Key Partners that you could not easily replace. Typically, these are the main suppliers of your processes, not your bank or phone company, as they are ultimately interchangeable.

The underlying fields are complete now that you have determined how you will deliver to your customers and what structure you need to deliver that value. Start with the revenue streams. What is your revenue on a recurring basis, expected revenue, average value of projects completed each month? They are looking for the economic engine that we looked at in the hedgehog principle. What revenue streams are really driving your business?

Finally, we look at your cost structures. Here you need to break them down into direct costs, i.e. H. Costs attributable to the activity to add value to the customer and overheads, which are generally constant and required only to conduct business, such as B. Office space and administrative support.

With respect to the financial business model, the boxes Income Streams and Cost Structures only contain the outline and general financial strategy. This now needs to be modeled in detail in a spreadsheet to confirm that it is consistent and is generating the required profitability.

For more information about the Strategyzer series of books and methods, visit www.strategyzer.com.

therapy

Download the Business Model Canvas and complete it together with a business coach or with the book for your company. Engage key members of your team and agree on what your business model should look like. Try modeling the revenue streams and costs in a spreadsheet, and then reconciling them with your managerial accounts. Does what you modeled reflect in reality?

strategy documentation

You now have a verbal and financial model of your business. The next step is to document your growth strategy.

The book that successfully created an easy-to-follow process for me to document the strategy and then implement it wastractionby Gino Wickmann. It contains an easy way to follow a process that I have used successfully in many companies as it is part of my process to help a company identify what it should be focusing on.

Gino and his team have developed a process around business growth and made all the tools available for free download at www.eosworldwide.com.

The key document iTraction™is called documentVision/Traction Organizer™ von V/TO™

and can be downloaded fromwww.eosworldwide.com/vto

The first page records:

• Values
• Goal
• niche
• Target market profile
• Differentiation (what makes you different)
• Process that ensures you deliver right the first time, every time
• Reduce Purchase Risk – How do you minimize the risk for the customer
• Your 10 Year Vision or BHAG (Big Hairy Audacious Goal)

I can't reproduce the pageTraction™ is copyrighted and registered as a trademark. However, the document can be downloaded for freewww.eosworldwide.comand so I suggest you download your copy.

None of the 8 questions asked is unique. For many years I have been supporting companies in the development of successful strategies. What Wickman has done is identify the 8 priority questions and create an easy to complete document that managers can understand. Also, the process doesn't take much time, which means it's quick and easy to update. It means that such an important task is actually being accomplished.

core values

We've already talked about discovering your company's core values. These only have to be documented.

Core focus or WHY

The focus is on your WHY, which you have worked with in the past. It is important that you understand exactly why you and your team are running your business as this will help you make difficult decisions when faced with the competition. By following the hedgehog principle, you achieve the best results for the company.

10-Year-Goal von BHAG (Big Hairy Audacious Goal)

As an entrepreneur, you need to be clear about what you want to achieve in the long term. This impacts how you turn your WHY into a business.

Traction™ suggests you set a 10 year goal. In his bookGood to great, Jim Collins speaks about an organization that has a 30-year goal, or Big Hairy Audacious Goal. Personally, I find it difficult to think beyond 5 years with smaller companies, let alone 10 years. The long-term goal for me has something to do with breaking in, which means doing a lot more than just going on.

Regardless of the timescale chosen, this goal should push the boundaries of what you think is possible. Then you start thinking about the choices you have to make to get there, which by definition must be different from the business as it currently exists. More of the same shouldn't be enough if you've set the right goals.

marketing strategy

The first thing in any marketing strategy is to agree on who you are selling to. So many new entrepreneurs trying to sell to everyone. It just doesn't work because everyone has different wants and needs. What is a priority for one may be a distraction for another.

Customer segments are characterized by their problems or desires. You must group your customer list based on these attributes to create customer segments. The profile of these customers then becomes the target market. These should be the customers purchasing the core products or services highlighted in the hedgehog principle you worked on previously.

As you differentiate yourself in the market, you win and retain new customers. We'll get into how you stand out later. So when you first fill out the first page of the V/TO™, document what you think are the 2-4 things that together create a unique offering that meets the customer's wants and needs.

Any marketing strategy will fail if there isn't a documented process the company follows to ensure that what is promised is delivered right the first time. I think it's an interesting question to ask and there's usually a lot of discussion about what processes the company has put in place and documented.

Finally, the last part of the marketing strategy discussion is about a guarantee. If you sell to consumers there are a lot of laws about what you can offer in terms of money back etc.

The warranty question is more about how you take the risk of the purchase away from the customer. Some companies offer a money back guarantee, you can pilot, you can provide samples, etc. All companies are different, so rather than give which guarantee, consider how I can reduce or eliminate the risk of purchasing.

Three year photo

Most clients I work with enjoy this part of the strategy process. Deciding what the company will be like three years from now is far enough away to allow them to achieve their dreams without worrying too much about the details of how they will achieve it, but close enough to to say exactly what they want. to acquire.

There are some specific goals like a future date (usually their end date + 3), revenue and profit that need to be completed to provide the narrative context.

The most helpful part of this question is when they paint a picture of what the company wants to do, how big they want to get, how they can work with their customers, etc. Take your time with this part and really try to imagine how what the company will look and feel like in three years.

therapy

Download the V/TO™ and fill out the first page. If you have access to a business coach or trusted advisor, they will help you question your mindset.

Execute your strategy

Quarterly Goals

You have now documented your strategy. So how do you make sure you reach your goal? American inventor Thomas Edison is quoted as saying, “Genius is one percent inspiration and ninety-nine percent sweat.

Gino Traction records this on the other side of the Vision/Traction Organizer™ and documents the essential elements such as:

• One-year vision or goals and targets
• 90 Day Goals (for the next 90 days) or Rocks (Traction™)
• Future goals or problems (Traction™)

Verne Harnish in his bookMaster Rockefeller habitsdocumented the benefits of setting new goals every 90 days. So, if you set small achievable goals every quarter, you have 4x more chance of hitting your goals than if you set them just once a year.

This is illustrated in the diagram below, which shows that with an increase in frequency you create a faster rhythm in the business, which means you execute your strategy faster and therefore achieve your goals faster.

In Traction™, the terms "Rocks" and "Issues" are used instead of "90 Day Objectives" and "Issues" respectively. The term Rocks comes from Stephen Covey's Kilner Jar story,The 7 Habits of Highly Effective Peopleand thus concentrates on the problems to be solved with the highest priority. I prefer to use the term 90 day goals because it's easier for busy entrepreneurs to understand.

The companies I work with either use the second page of Vision/Traction Organizer™ or they use a spreadsheet or some sort of cloud-based task/project management software like Monday.com. It's entirely up to you what works for you and your team. It's about setting goals and working towards them.

therapy

Now complete the other side of the V/TO™.

Execute your strategy faster

Smaller companies usually have neither the time nor the money for big changes. You have to evolve from one state to the next. They call this a fulcrum. In general, the only time you can look back is when you see a course change has occurred.

I have worked with many companies over the years to help them execute their strategy. One thing I noticed was that it was like traveling a thousand miles, always starting with the first step and then the next. For me it's about overcoming the challenges. It's also about working smarter. You can't grow a business by just working harder. In each situation, consider whether you should be doing it at all, and if so, how it can be done more effectively. Can you do better?

In 2012, Sir Dave Brailsford explained the idea of ​​marginal profits to the BBC. He said: "The whole principle grew out of the idea that if you break down everything you can think of that goes into cycling and then improve it by 1%, when you add it all up you get a significant increase." He leveraged this approach to help Beijing women's cycling win 7 gold medals out of a total of 10. They repeated this at the next Olympics.

When you combine marginal profit aggregation theory with increasing the frequency of target setting, you have a process for increasing the growth rate of the firm.

therapy

Think about what you want to achieve with your business, and then think back from the end goal with all the smaller tasks you need to do to get there. Reduce these tasks until you are clear about what you need to do tomorrow. By tirelessly working through the challenges with the end goal in mind, you will be able to reach your end goal.

Master Rockefeller habits

I sin swamp,Master Rockefeller habits, Verne Harnish outlined how Rockefeller developed his highly successful companies. What does the Rockefeller Accountability Pyramid tell us about how accountability should be structured in a company and how day-to-day activities relate to achieving the overall vision?

In my experience, many companies have many meetings but lack structure and accountability so there are too many which are ineffective.tractionby Gino Wickman also addresses the topic of meetings and once again offers an effective meeting structure with accountability. I think it doesn't matter which system you choose. The session structure iTraction™ is probably easier to implement and more suitable for smaller companies.

I include the Rockefeller pyramid of accountability because it illustrates the importance of core values ​​and the WHY of the organization. The pyramid illustrates that core values ​​and your WHY are the foundation of the business and should be used as a reference point for other short-term strategies and tactics to reference.

The other notable part is the need for daily stand-up meetings in your business. Most businesses need faster and better communication and information needs to flow both up and down the company. When I ran a UK company with 100 employees, it was incredibly difficult to get information from the coal mine. There was an administrative layer that limited this flow.

Because of this, I'm a big fan of short daily stand-up meetings, especially in organizations large enough to have in-house functional specialists like accountants, sales, and operations. Daily stand-up meetings should be just that. Everyone gets up, usually around a measuring board, and hands out logs, and in 10 minutes they review what needs to be done that day and any relevant stats. Management should ensure that they regularly attend these meetings. For a smaller company with fewer than 5 employees, a bi-weekly or weekly meeting seems more effective.

therapy

View your current meeting structure. Does yours work? How do you hold people accountable? Does your team feel and show responsibility for the tasks they are responsible for?

functional goals

Traditionally, I use the company's organizational chart to set out responsibilities. However, this is flawed as it assumes that only one person fills the role and reports to only one person.

The reality is much more complex with accountability gaps where no one owns a specific process or is responsible for more than they should. So I developed this process to determine who is responsible for what in a small to medium-sized business.

The traffic light system is subjective, whether a function works well, needs improvement or adjustment. It is based on how the business owner or senior management feels about a position. When hard goals are set for each function, one can work much more objectively. How is your business? How many positions in your company have someone accountable for the success of that position?

To create the functional org chart, complete the following steps:

• In the first row, list all of your company's functions with an owner column, as shown in the table above. Think of marketing, sales, operations, finance, human resources, technology, etc. as the main categories.
• Then, for each job breakdown, write down the main tasks that each job performs. For the accounting job, you may have bookkeeping, cash flow management, reporting, and financial strategy.
• To make sure you have everything, go through the customer journey step by step and get enough detail into the project as it's generally the forgotten jobs where the ownership gaps are.
• Try to assign an owner to each job/position. Don't be surprised if you find that not all jobs/positions have an accountable holder.
• Finally, check every job in every job. You may not have any stats to begin with, so you should rely on how well you complete each task. If you're happy with it now it's green, if it needs improvement then it's orange, and if more urgent work is needed it's red.

This process highlights areas of the company that need urgent attention, where accountability is lacking and where individuals are overwhelmed. Document these priorities in the strategic plan and make sure you track progress toward improvement.

therapy

Create a timeline of functional goals for your business. What is working and what development should be included in the action plan you started earlier in V/TO?

make it work

For some smaller companies, they justify a simpler system than the one outlined above. I have had several contracts with various government/EU funded business support initiatives.

A few years ago a document was created, the Growth Action Plan. The main problem with this was that it was a Word document and while it was very useful to have an action plan available for the smallest companies as it was time consuming to update, for companies of all sizes it quickly ran out of space. all sizes.

So instead of using a template, you are much better off using one of the cloud-based task/project management systems like Monday.com™, Trello™, Asana™, base camp™enz.

The main items you will need are:

• important little- What important things should you hold in your hands?
• How– What projects are necessary to reach the vital few?
• WER- Who will lead each project?
• If– When will the project be completed?
• Middle– What does success look like?

With any of the systems I've mentioned, you can create a project with the above columns, making it much easier to determine what your rocks/90 day goals/key pairs should be.

The point of it all is that you and your team know what needs to be done and when with someone accountable for each project to get the job done.

therapy

Check out the options available in the market and review them with your team. This only works if your team supports the idea. This cannot be sold to them, it should be used by everyone and only in this way will it remain up-to-date and usable.

Make the company stand out

introduction

This section is all about how to differentiate your business from the competition. We take a look at the tools at your disposal to thoroughly analyze the value you are creating for your customers. In any market where competition is challenging, there is generally oversupply, so you need to understand your market and offer more value than the competition.

Understand your market

There are countless books on the subject of marketing these days. What are the key elements that are helpful in understanding the market and can make a difference?

Take each of the segments in turn:

• customer area- Which customers have the same purchasing characteristics?
• The needs of the customer– What do your customers really need and want?
• what ismain problemsin your market that needs to be solved?
• what isconversion costsfor a customer switching from you to a competitor?
• HowThe market is attractiveare you active? How easy is it to get the right profit?

You can offer products and services to a variety of customers. It's important that you divide your customer base into segments that share the same needs or wants.

We'll explore later how you really understand your customers' needs and key issues. The reason some underperforming companies are still in business is because there may be little competition or higher switching costs. Think about it, when was the last time you changed accountants or banks?

therapy

Document your understanding of the market and share it with your team. Did you capture all aspects in the graph? Which problems in your market are opportunities or challenges? What changes do you need to make in your business to keep growing?

How is your company distinguished?

Do you know why customers buy from you? Most companies operating today face competition in one way or another. None of us work in a vacuum. Think of 3 or 4 things you do that combine to create a uniqueness that sets you apart.

Let's go through that in more detail now. You may need to update your V/TO™ after reading this section.

So on what basis do your customers buy from you?

If you have a lot of clients, you might need to use something like SurveyMonkey™ to find out why people buy from you. Remember, they may buy from you for different reasons than you think.

Here are ways small and medium-sized businesses stand out. I ask this question to attendees of the webinars I have given during lockdown and generally the answers are multiple rather than one.

Differentiation according to:

• excellence
• Quality
• Customer service
• expertise
• Scarcity/uniqueness of the product/service
• Convenience (location/delivery/stock availability)
• out of stock

Your value proposition canvas

Do you really understand why your customers buy from you? How do you systematically evaluate the value you create for your customers? How do you know if the products and services you offer meet the needs of your customers?I refer to a book by the teamwww.strategyzer.com. The book is Value Proposition Design by Alex Osterwalder, Yves Pigneur, Greg Bernarda & Alan Smith. You can download the template belowwww.strategyzer.com/vpd. This book and template have changed the way I help companies identify the value they create because it's a straightforward, objective process that takes a lot of the guesswork out of it. If done honestly, it will uncover important areas for improvement.

The book is inexpensive and walks you through the process in more detail than I can do here. But first I want to summarize what I do when I work with clients.

I always start by figuring out what segment of customers I want to work with. Although there is no place to document this on the map, I usually write the customers' destination list in the top right corner. For larger companies this means that I will work with some of these charts for the company.

Once you know what segment of clients you work with, identify the typical job title they may have. The job title will give you a better idea of ​​what is typically expected of this role. Think about what job description that person would have.

The first task then is to find out which tasks will be assigned to this person. What problems do they regularly face to get their jobs done? In the "Customer Tasks" field, you should list all of the tasks that your customer is authorized to perform in relation to the products and services. For example, if you sell accounting software to a CFO, you only need to list the responsibilities involved in managing a company's financial affairs.

The next field to fill in is the pain quadrant. This quadrant is for the issues that are at the core of the problems a buyer needs to solve. These are the problems that your product or service must solve in order to be considered a solution.

The next field to fill in after that is the “Winning Field”. It's not the opposite of pain, by the way. This field is for issues that want to be resolved but are not required. This is where the customer “wants” to go. Those are the beautiful things to have, their desires if they could have them. This is where you excel. If you can pin items on the wish list without making yourself uncompetitive, then you can differentiate yourself and become more competitive. It pays to spend time in the pain and gain quadrant.

The next quadrant to fill in is for your products and services. Just enter the relevant products and services you want to offer the customer.

For the Pain Relief quadrant, enter the attributes that correspond to the client's needs. Ideally, but not always, you should resolve all customer issues.

The most interesting quadrant in this exercise is what you put in the Gain Creators quadrant. These should be features/benefits of your service that add value/extras that somehow address the benefits the customer is looking for beyond what they would expect to solve their problem.

It's often the accumulation of cheap (for you) extras that make the difference. It could be something as simple as service with a smile or access to an online system that is easy to use and gives you more control.

therapy

Download the Value Proposition Canvas and use the book or a business coach/trusted advisor to create your Value Proposition Canvas. The most important quadrant for me is Gain Creators because this is where you differentiate yourself from the competition and play a key role in growing your business in a recession.

Reduce your wealthcompetitors

Businesses should always look for ways to differentiate themselves from the competition. To figure out how to differentiate your own business, you need to look at your customers' problemsActuallyTry to get to the bottom of the problem and solve it.

But how do you find the way to your customer's problem?

When someone buys a shovel, it may be because they want to dig a hole to plant a tree. But the core of the problem isn't that they didn't have the tools to dig a hole, the real problem might be that they just want something fun to look at.

So instead of being the shovel salesman, you could offer a tree planting service, a solution that gets to the heart of what the customer wants. This downplays an important concept, but in times of radical change we all too easily lose sight of the end goal of the customer.

The next strategy I will refer to is from the bookBlue-Ocean-Strategienby W. Chan Kim and Renee Mauborgne. There are a number of tools and downloads that explain the process without you even having to buy the book. Go to:www.blueoceanstrategy.comget free resources.

To me, this represents how competition can be in some industries. The purpose of this exercise is to understand how to compete in a "blue" ocean instead of competing with the "sharks".

The first step is to list the main characteristics of your product or service in a table in a column of a table. In the next column, rate from 1 to 10 how well each feature meets the needs of your customers.

It's important to be brutally honest with yourself - if you're not, nothing will improve and training will be a waste of time.

Next, identify 3 of your top competitors and objectively assess how well they meet customer needs. There will be some things they are better at than you and some things you are.

Then graph the results. The resulting chart is called your "strategy curve" and you can compare it to the performance of your selected competitors.

If you're honest with yourself, there should be some things you're good at and some things you're weaker at. That is normal. Practice is not about finding areas where you can improve based on what your competitors are doing. It's about identifying areas that you've overlooked that are important to the customer.

Check out each of the features. If you have the resources, you can also conduct a survey using a cloud-based tool like SurveyMonkey™ to find out what's important to your customers.

So if you think of companies like EasyJet, when they first entered the market they used new technology (internet) to get rid of intermediaries like travel agents and people doing the booking. In one fell swoop they gave the customer control and saved a lot of overhead costs. They made boarding so quick and easy and with shorter turnaround times on the planes. They threw away most of the food on board.

Before starting, they must have used a process similar to the Blue Ocean strategy to carve out a highly profitable niche in a market that was considered extremely competitive.

In the next phase, look at what you can do for each:

• Start with?
• More of that?
• DO LESS?
• Stop?

More can sometimes mean less, so can you switch to a no-frills model like airlines and hotels have? The simple answer is yes. EasyJet has created a whole new industry in Europe. Travelodge did the same with the hospitality industry, but unfortunately it went so wrong.

Ask yourself: what can you do more, what can you do less, start or stop doing to better meet the needs of your customers while changing the rules in your industry? What can you do to revolutionize your industry while gaining a competitive edge?

therapy

Blue Ocean Strategy is an important process that will help you grow your business in a recession. Take your time and see how you can really add value to the customer by delivering what they want and need. Document your strategy curve and identify an action plan based on characteristics of your product and service that your customer truly values.

Put your ideas into action

Since change is a constant and every company should have it as a core process, what does the innovation process look like?

The process of identifying new opportunities is part of an entrepreneur's DNA. You have a clear vision and understand the problems in the market that can be solved profitably with the right product or service.

Take each item in turn.

• Think about WHY you do what you do based on when you are most creative. Think about what your customers want to achieve. After completing the previous exercises, you should have a clear idea of ​​what you need to do to develop your products and services. Then you need to prioritize the new feature that will give you the greatest competitive advantage.
• Use this function for the market matching box and study your marketplace closely. What is this function supposed to do? How much does the customer pay for it? What is the benefit for the customer? How important is it to the customer?
• Once a marketing plan has been developed that addresses the concerns, agree on an action plan for implementation.
• If necessary, adjust your marketing dashboard to reflect the changes and monitor performance before and after the changes. Regularly review the effectiveness of your marketing and verify that the changes have had the desired effect.
• Repeat the cycle quarterly so you have time for all changes to have a measurable impact and you don't change the user experience too often.

opportunities to sell more

I've led a number of business growth workshops over the years, and I'm always amazed at how many people say they want to diversify in the face of declining sales. Diversification is about selling new products in new markets, which means you're in a whole new space with new products that you don't know about.

The Ansoff Matrix by Igor Ansoff in Sin,corporate strategy, illustrated the risk factors in different growth strategies.

So what are the options?

From the chart you can see that if you sell more to your existing customer base with your existing products and services, you will have more knowledge and experience. This is therefore the least risky strategy to increase your sales.

When the Ansoff Matrix was developed in 1957, it was easier to grab an audience's attention and increase your brand awareness, even though product information was hard to come by (there was no internet).

Today it is much more difficult to get a customer's attention (market penetration) and the second lowest risk category for me is the product development quadrant. This is because you have already gained access to your customers through your social media, email newsletters, existing sales channels, etc.

Finally, you have market development, where you sell existing products in a new market, but in reality this isn't that different from full diversification, where you sell new products in a new market. This is because your products and services will likely need to be modified for a new market.

It also means you're dealing with very experienced competitors, unless you've found a niche that no one else has seen, which is highly unlikely. In times of recession, when there is less to do, you have to spend a lot more to get the results you want.

So in times of recession you have to work hard to hedge your current income against your existing market and that may mean developing, adapting or supplementing the products or services you offer.

therapy

Draw your products and services on the diagram. Check your chart, what makes sense? Do you need to streamline or evolve your products and services? When growing your business in a recession, what offers the least risk while providing valuable reward?

Cash is King - Which products or services?

So what products or services will help or hinder you in times of recession?

The Boston Consulting Group Matrix, developed by the Boston Consulting Group, is a useful tool. This tool has been around for a long time and was designed for larger companies, but it's a useful tool to remind us that some products and services make money and others take money away from the company.

The Boston Matrix categorizes products and services into four distinct areas based on:

• market share– Does the product sold have a low or high market share?
• market growth– the number of potential customers on the market is growing or not.

The four quadrants can be described as follows:

• Sterneare fast-growing products that compete in markets where they are strong relative to competitors. Stars often need big investments to keep growing. Eventually, growth will slow, and if they hold onto their market share, stars will become cash cows.
• Cash-Cowsare products with low growth and high market share. These are mature, successful products that require relatively little investment. They must be managed in a way that keeps them profitable so they continue to generate the strong cash flows that the company needs for its stars.
• Wild Catsare products with a small market share that are active in growth markets. This suggests they have potential but may need significant investment to increase their market share at the expense of larger competitors. You need to think hard about Wild Cats - which ones should you invest in? Which ones should be increased because they eat up money? Most new products and services start off like wildcats at launch, as by definition they will have a small market share at launch.
• Dogsrefers to products with a small market share in unattractive, low-growth markets. Dogs can make enough money to break even, but they are rarely, if ever, worth investing in. Any product or service like this should be taken off the market.

Ideally, a company should have products in all categories except dogs in order to make money now and in the future and to develop a balanced product portfolio.

therapy

Enter your products and services in the Boston Consulting Matrix. Do you have dogs or wild cats? What to drop What to double?

What can you do?

So what to do in financially challenging times?

• profitability– What products and services do you make money with?
• Occupied– Can you sell more volume/increase average order value to your existing customers?
• products and services– Are you creating new products/services to sell to existing customers?
• excellence– What could you do better that customers value? What could stop them from doing something they don't appreciate?

New Markets- During the COVID19 pandemic, a number of companies have successfully transitioned to selling PPE to the healthcare market. So you need to be aware of the opportunities that may arise as the world adjusts to a new normal.

Building an A-Team

introduction

One often hears from executives that people are their most important asset - or in other words, without employees there would be no company.

So if you want to grow your business, make sure you have the "right people in the right seats on your bus". This sentence is from Jim Collins,Good to great. It's about getting the right people on the team. The aim is to monitor the performance of your employees and to improve/develop or release underperforming team members.

One of the things that has changed during the post-COVID-19 economic downturn and is different from previous recessions is that many free online training courses are available that were previously unavailable.

Where previous recessions have traditionally cut education and marketing budgets, this recession may be different. With a little smart thinking, you can offer more training so you can develop your workforce at little or no cost to the business.

So how do you know if you have the right team?tractionby Gino Wickman addresses this topic and provides free tools. The approach he takes seems to revolve around the ideasGood to great.

Building your ideal team is a complex project that many books have been written about. For me, these are the most important questions to ask yourself:

• Who on your team takes responsibility?
• Who gets things done and keeps the team on the team?
• Who eats, sleeps and breathes your values?
• Who goes the extra mile for colleagues and customers?

people first

I truly believe that helping your team improve their work and proactively contributing ideas to grow the business will keep your team engaged and invested in your company and its values.

You know the traditional hierarchical organizational structure and that it mostly resembles a pyramid.

I want to introduce you to the inverted pyramid where the manager asks what he can doUnpleasantthe team and not what the team can do for them. It changes the whole perspective of the team's focus, and the team can focus on their true employer - the customer (since the customer pays the bill).

Main points:

• Servant leadership -What can you do for your team?
• Inverted Pyramid– What can your team do for your customers?
• Training– How can your team improve?
• Quality– How can you help them get it right the first time?
• Security– How can you protect your people?

therapy

What does your organization look like? Does your team work for your customers or for you? Think every morning, what does my team need from me today?

What really moves people?

I'm often asked if a company's latest bonus plan motivates its team to do more. Luckily, Daniel Pink wrote a groundbreaking book entitledMotivation,about what really moves people. It turns out that apart from salespeople, everyone else is motivated by something other than money.

The book is easy to read and the main learning points are that money is not what motivates people. Instead, it is the basic human need to feel valued and that what they do is valued and that they are given permission and training to do it to the best of their ability.

In Summe:

• independent- Allowed to continue working
• Deal with it– Trained and competent
• Goal- Can see how the work relates to the whole

Hopefully you can see that educating and informing your employees with a clear direction of what the company wants to achieve can go a long way towards improving the company's competitiveness.

Autonomy is more difficult to achieve for some organizations that use presenteeism to manage performance rather than agreeing on goals and letting the team work on them and then review the results. If you have an inverted pyramid where the focus is on customer outcomes, it should be easier to develop individual autonomy as the KPIs revolve around customer satisfaction and not a management created system.

therapy

Daniel Pink has a newsletter worth signing up for. Think about your business. How do you train and develop people to become masters of their craft? Have you told the company what you want to achieve? What autonomy can you give them to continue their work?

systems and processes

This is a big topic and is often ignored in many companies. There are many consultants and companies that specialize in helping companies improve their processes. If you don't know them, just type "lean manufacturing" and "working agile" into Google.

There are reputable textbooks on this, e.gGoalby Eliyahu M Goldratt and Jeff Cox, which is well worth reading. There are alsoThe machine that changed the worldby James Womack, Daniel Jones and Daniel Roos, which I have to admit I struggled with but stands as the definitive book on the history of lean manufacturing. Over the years, these concepts and approaches have expanded greatly.

Rather than going into detail, I've summarized what you as a business owner might want to consider.

Right the first time, every time:This is the goal that when an order is received, the product or service is delivered the first time. No system is perfect, so it's a continuous journey of business improvement. You also need to decide on a metric that will be used to judge whether something completed smoothly.

Customizable/Single View:A common customer frustration is that a company doesn't have a picture of them and when passed between departments, information has to be repeated. This can be solved with a Customer Relationship Management (CRM) system. It's not a quick fix as you have to make sure everyone is using it and entering accurate data, but if done right it can improve customer relationships and ensure the customer gets what they ordered.

self-service:In an always-on world, how do you as a business eliminate the friction when a customer wants to buy from you or use your services? With virtually everything in the cloud in one form or another, it becomes much easier to give customers secure access to parts of your systems. The second option is to offer chatbots so that even at midnight or on weekends, prospects and customers can easily access frequently asked questions and even solve common problems that require a short diagnostic dialogue.

Recognize frictions in your company:Still Another area where you might find some quick wins is tracking the customer journey through your business. where are things stuck How easy is it for a customer to do business with you? You'll be surprised where friction arises and ruins the customer experience.

Minimizing Waste - Timwood -Minimizing waste in a business should be on the agenda for everyone tasked with running a business. In lean manufacturing there is an acronym called TIMWOOD. To me, this points to the waste that needs to be addressed before a company can rate itself as efficient.

Timwoodmeans:

• Transport:Unnecessary movement of products, equipment and people resulting in wasted time.
• Invent:When selling products, excess inventory is often thought of, but it can also include services where you have excess technology and office space (all of which are currently going through).

• movement/movement: If you are constantly traveling between meetings, unnecessary movement in a warehouse etc. can be wasteful and accidents and losses can occur. The recent closures show how much time we waste commuting to work.

• Waiting times and delays: Waiting is often an easily overlooked waste. But if you have to wait for a previous task to be completed, then you have to move on to something else, always checking that what you need has arrived so you can move on. You can then spend another 5-10 minutes remembering where you went. There are a number of office functions that can be significantly affected by interference.

• Overproduction: When production exceeds customer demand, facilities are left with too much inventory to store and manage.
• overtreatment:A product or service with more features or capabilities than required or expected by the company is considered overprocessing. It is important for companies to understand what their customers want from the product and eliminate any task or process that is not useful or necessary in relation to those needs.
• Defects:Many consider want to be the worst of the seven wastes. These are products or services that do not meet a company's minimum standards and require some form of remediation.

So that everything stays straight, tidy and durable –Lean Manufacturing has a 5S concept. It descends from Toyota's Japanese production methods of the 1950s, but is extremely relevant today.

What does 5S stand for? –5S refers to five Japanese terms used to describe the steps of the 5S system of visual management. Each term begins with an S. In Japanese, the five S's are Seiri, Seiton, Seiso, Seiketsu, and Shitsuke. In English, the five "S" mean variety, sequence, shine, standardize and sustain. For me, 5S refers to production and office environments.

There are five key practices involved in 5S. They are as follows:

• Art:Sort materials and keep only the essentials to complete tasks. This applies to both an office and a workplace. A place for everything, everything in its place.
• Soft:Make sure all items are organized and that each item has a designated place.
• Kopf:Proactive effort to keep workspaces clean and tidy to ensure purposeful work. In general, this means that you spend the last 10 minutes of the workday getting work done. For an office worker, this can mean writing a list for the next day.
• Standardize:Establish a set of standards for both organization and processes.
• retained:Nurture new practices and conduct audits to maintain discipline.

Flussdiagramme:I'm a big fan of streamlining your processes. They're a great way to quickly document a process. Within minutes, you can quickly capture a process, document it, and share it with the team for comment. It can be used in a formal quality system and is helpful for auditors (both internal and external) to really understand what needs to be done.

therapy

First, consider giving your team a flowchart of all the important processes in the company. You will be surprised how it is broken or needs improvement. I did this once at a multi-million dollar company and it was amazing how many processes were inefficient or just downright broken.

productivity

There is a very simple and rough productivity number that you can use to compare your company's performance to that of a competitor. Dividing your sales turnover by the number of full-time equivalents gives you a figure of between £25,000 and £100,000 per year. Colleague.

Cleaning companies tend to be on the lower end of the scale, while manufacturing and service companies with high added value such as software can cost upwards of £100,000 per employee. The most important element is not where you are on this scale, but how well you compare to your competitors and what you ultimately need as a return on investment.

Basically, there are only 3 real variables in business:

• sale– Can you sell more?
• selling price- Can you ask more?
• Cost– Can you buy cheaper (direct & overhead)?

So as an exercise:

• What can you do to increase volume (without decreasing price)?
• What can you do to increase prices (that don't significantly reduce quantity)?
• What can you do to reduce costs (without sacrificing the quality of your products/services?)

A useful exercise you can do is to create a table with the 3 variables in it and increase the volume and prices by 1% and decrease the cost by 1%. What happens to your profitability? If you performed the exercise with a gross profit of 25%, you would increase your profit by 11%. It's surprising how subtle changes in variables can affect your bottom line.

Once you have your table of values ​​for all 3, try to predict what might happen to them over the next 3 years. You have to make assumptions about what's going to happen in the broader economy and how it will affect your business. You may need to make some assumptions to start creating the variables. You can then adjust them and see how the change affects the final numbers.

After filling out the table, you can request it. How are they changing over time? Have costs crept in? Has productivity improved? What actions can you take to improve trends?

Your goal should be to improve productivity over time so practice shows how much work you have to do.

therapy

Calculate your company's productivity and then your closest competitor's productivity, as most credit check companies will give you enough information to estimate. What are the productivity numbers?

performance measurement

Balanced Scorecard

As Peter Drucker, an in-house respected management consultant, said, "What gets measured gets done." I've worked with many companies over the years and am always amazed that few people actually measure what they do. The other thing I discovered is that setting up a business dashboard is an uphill battle, even for an avid entrepreneur.

There are a number of frameworks for building a business dashboard and for me the system developed by Kaplan and Norton is the best because it is simple and easy to understand.

I greatly simplified the original work. The original reference isThe strategy-oriented organizationby Robert Kaplan and David Norton. There are also many books that support implementation.

Die Balanced Scorecard, „Die strategieorientierte Organisation“, Robert Kaplan & David Norton

The Balanced Scorecard has four quadrants:

Customers:This is directed outwards. Referred to as the customer perspective in Kaplan and Norton's book, these are performance indicators that record the activities aimed at driving sales into the store. As a rule, these are key figures such as the number of inquiries or the sales value, etc.

Activities:This has been turned inside out. In Kaplan and Norton's book this is called the inner perspective. They are indicators of the operational aspects of the company, such as: B. work in progress, employee productivity, sickness, productivity, etc. These indicators are all about ensuring that the work, whether it is the delivery of products or services, is carried out effectively and efficiently.

Finances:That's backwards. In Kaplan and Norton's book, this is referred to as the shareholder perspective. It is about indicators for the financial success of the company. It's about being accountable for the work you've done.

Innovation:This is prospective. In Kaplan and Norton's book, this is referred to as the Innovation and Learning Perspective. For most companies, this is the most difficult quadrant for which to identify appropriate indicators. In general, this quadrant is ignored in economics as a whole. Typical indicators may relate to training or the development of new products/services.

therapy

Create your own Balanced Scorecard. Do you have a mix of financial and non-financial KPIs? In each of the segments, do you have indicators to measure the performance of the entire organization?

SMART goals

Before you can decide what to measure, you need to identify your goals. These must relate to the goals of the company.

Goals should have a specific purpose and you're probably familiar with the acronym SMART Objectives.

A SMART goal should be:

• Special- What has to happen?
• Measurable- Can it be measured?
• Can be assigned- Who will be responsible?
• Realistic- Is it possible to reach?
• punctual– Is the specific end date?

So when setting KPIs like sales and profit targets, make sure they are SMART. Don't be the naïve CEO who sets unrealistic sales goals that the company can't meet and only demotivates everyone.

therapy

There will be some key indicators in your business that will tell you if you are on the right track. Working capital (bank balances, ongoing projects and receivables) is an important indicator for my company. Or what is known as a sleepless Friday night number. What is your?

Keep Score - Build a business dashboard

To create a business dashboard, you need to agree on your overall goals and how they translate into more sales, more production, better systems, more training, new products, and so on.

Ideally, you identify key performance indicators across all functions of the company. How else are you supposed to hold these functions and their leaders accountable?

So, features to consider are:

Marketing -Find more potential customers

sell -Convert leads into customers

activities(Production or service) – Added value for the customer through products or services

financial accounting– Collection of receivables and receivables, measuring the financial results of the company.

HR– Keep an eye on illness, temporary workers, etc

Innovation– Creation of new products or services

Typically, you might have a spreadsheet that records monthly values ​​and the associated target values ​​for:

• Marketing measures (telephone calls/website visitors/business cards collected/1-2-1 meetings etc.)
• receive requests
• Sales (value and number of orders)
• gross profit
• Overhead (as a percentage of sales)
• net profit
• debtor
• cash in the bank
• Number of customers (regular/recurring - lifeline)

A helpful approach is to highlight key indicators on your profit and loss chart and divide by sales. This is a great way to account for volume changes in sales. So if sales increase, gross profit (gross profit/sales) should remain the same. On the other hand, if sales increase, the money in the bank must increase proportionately to meet the increased working capital needs.

Whatever your business, you need to score with a business dashboard.

therapy

Build your company's dashboard and share it regularly with your team.

Stay fit and healthy

All of this becomes meaningless when you let your health and well-being suffer.

For most entrepreneurs (and even medium-sized companies) yesno businessif you are sick or underperforming because you eat garbage and do not sleep.

There are several things you can consider to take care of your health and well-being:

• Find an exercise you can do regularly - can you develop a new habit?
• Consider getting a FitBit or similar - do you always have your stats handy?
• Check Your Diet - Can It Be Improved?
• Are you getting enough sleep (7-8 hours)?
• How to get a mental break from doing business? - Do you spend time in green spaces?

Business is becoming increasingly complex, so you need to stay focused. Stephen Covey's acknowledgment of this with his 7th birthdayemonkey withSharpen the sawbears witness to this. You always need to be one step ahead and a fundamental part of that is staying fit and healthy.

therapy

What do you do to stay healthy and fit? There are thousands of books on the subject, but find a fitness and nutrition system that you are comfortable with. Set a goal and work towards it. For most people, this is a journey of a thousand miles, and you only have to take one step at a time. If you fall off your program, dust yourself off and start again. Once a diabetic has achieved this remission, it is an ongoing struggle that will last a lifetime. Develop a lifestyle that you can control but that will lead you in the right direction.

What's next?

And then what? I hope this article has inspired you and provided some background on some of the tools and approaches you can use to diagnose and grow your business even during these challenging times.

I offer online coaching sessions at £95 + VAT per hour. The way of online coaching, especially using these tools, is very effective and we can achieve a lot in a short time. There is no contract or schedule. We can create one based on the above or you can do it step by step. They can meet once a week, month, quarter or year. It's entirely up to you and how quickly you complete the tasks.

Send me a message via chat (bottom left of screen on website), email me atgroei@kub-uk.comor call me0333 050 9053to take the time to chat about your business. The first 30 minutes are free and you don't have to continue.

Click here