Tag: Financial Control

Great problem solvers are made, not born. We have found after decades of problem-solving with leaders across business and non-profit sectors these leaders tend to have a common mindset and set of strategies; they learn to adopt a particularly open and curious mindset and adhere to a systematic process for resolving even the most challenging problems. And when conditions of chaos and uncertainty exist, they are at their best.

Five mutually reinforcing problem-solving strategies seem to underly their success: 

1. Don’t accept the first description of a problem as the actual core issue
2. Be curious about every dynamic of an issue
3. Maintain an empathetic view of the world, to see through multiple lenses
4. Ensure an agreed-upon definition of the issue is reached before any discussions on potential solution strategies
5. Use storytelling to generate a compelling call to action.

In this blog series, we are going to break down each of the five problem-solving disciplines into actionable concepts with the hope that we all become better problem-solving leaders as a result.  This article will focus on the first strategy.

Strategy #1: Don’t Begin Problem Solving Until You have Discovered Actual Problem

This is a practical and effective strategy for nearly all problem-solving discussions.  “Our monthly sales are too low,” is a simple example of this dynamic that plays out in many management meetings. Countless hours and emotion can go into discussing how to improve the sales team’s skills, change pricing, simplify the sales process, hire a new lead generation company, replace the current CRM and the list goes on and on. Great problem solvers look for clues and continue to unpackage the component parts of an issue until they identify what the core issue is on the topic. Continuing this example, the root cause was a change in the Google algorithm initiating a 30-day drop in leads until an updated strategy could be identified and implemented. Understanding this greatly benefited the solutions the company put in place to mitigate the specific issue going forward.

Developing the discipline to use this strategy of peeling back the layers on the perceived issue is something great problem solvers consistently do – but it is not easy. There is a desire to speed up meetings, get to solutions, and be action-oriented. “Ready, Fire, Aim” is a good adage to help one remember to first identify what the real problem is before moving on to discussing it in any great detail – especially potential solutions.

The ‘5 Whys’ is a popular problem-solving strategy that uses this concept effectively. It is an iterative, interrogative technique used to explore perceived problems. The primary goal of the technique is to determine the root cause of an issue by repeating the question “Why?”. Each answer forms the basis of the next question. Five is for the optimal number of iterations needed to resolve the problem. This method provides no hard and fast rules on how long to continue the search for a root cause but we will address this in an upcoming article regarding the strategy of getting to a finalised problem definition. Click here to see an example of the 5 Whys in action.

Whether it is a specific strategy like the ‘5 Whys’ or the discipline of taking the initially stated problem and testing whether it is the actual problem or merely a symptom, the big idea is to put in the work upfront to ensure you and your team are spending time and energy on the actual problem because this will optimise your efforts and find more effective solutions in the long run.  

Be sure to check out next week’s article where we discuss the 2nd of the 5 strategies great problem solvers use.

The Strategy Behind Purpose-Driven Prospecting

Today I want to share with you both a business strategy and discipline that is greatly beneficial when adopted and integrated into your company culture. That strategy is Purpose-Driven Prospecting.  

Firstly, what is Purpose-Driven Prospecting & how is it both a strategy & a discipline?  

We can define it as the skills and disciplines required to achieve and maintain a prospecting culture within your company.

Let’s also be clear on what is meant by the term “Prospecting”.  Prospecting is when you and your team are both comfortable and proficient at proactively engaging with people in order to identify new potential business opportunities for your company.  

A proficiency in prospecting involves investigating and approaching business opportunities to encourage your contacts to be of service willingly, rather than feeling obligated to do you a favour. We will discuss how you prospect proficiently in a moment. 

Let’s begin with why it is so critical to have an effective company strategy for constantly finding new opportunities for the business.

Much of the ‘why’ is about eliminating the ‘scarcity mentality’ from your business. This occurs when we don’t feel we have enough leads or opportunities to meet our needs so we tend to focus on maximising the conversion rates of those leads out of fear of not having enough.  

You can begin to understand this by analysing your existing client base. Why are 20 percent of your clients undesirable? They don’t value your service, they don’t pay on time, they don’t refer other customers, they require more support than others? And you know the worst part about these customers? They sap the enjoyment from your team’s work, eroding motivation, productivity and enthusiasm.  

So, why do you keep these clients at all? Because you are more afraid of replacing the loss in revenue than you are the implications of keeping them! Hopefully, this issue is something you can now directly relate to. 

The Scarcity Dynamic makes us do dumb things that we often justify because of too few opportunities. For example, we end up pricing our services more tightly than is often ideal or necessary. We focus an abundance of energy on sales, trying to convert potential customers before they are really ready to purchase.  This in turn sets up downstream problems with contract terms and levels of customer satisfaction.

Another critical point to understand is that when you are playing in the realm of scarcity, the customer is nearly always right because you are afraid to lose the revenue. When you have a significant workload you will obviously still approach the customer professionally and fulfil your tasks and obligations proficiently. But your employees can become the most important part of the equation, not the revenue the customer represents.  

If you want a strong company you need to be in the HR business of creating great and happy employees. When money is tight and customers have the leverage this is a difficult strategy to accomplish. 

In contrast, when we are playing from a position of strength with more opportunities than we can handle, we focus upon who we hire, how well we train them, how many people we hire, and the list goes on.

At this point, I am hoping you are growing to understand how much good comes from having more leads than you can handle. Just ask yourself how much stress is created in your life due to concerns around whether there will be enough business and revenue to keep your company at a level that makes sense for you and your family. Often, you aren’t hiring sufficient people to help you get out of the daily grind and work more smartly on your business.

Okay, let’s turn this conversation to the ‘how’ of creating this culture within your company:  

The first step is an interesting one and one in which many people fail before they even begin.

You first need to know that your product or service delivers far more value than it costs. Of course, you need to understand this mentally, but you need to more importantly know it in your heart – your service is wildly valuable. If you don’t feel this, stop reading any further.  This ‘value of service’ issue needs to be resolved before further steps can be taken. We will be happy to give you a free 30-minute strategy session on how to work through this challenge.

When you are clear and confident in your service value, you need to ensure all of your team is as well. This will likely require some direct conversations and it is important that you allow your team to express any and all concerns they have about any part of the sales, service, product delivery, and support processes.  

Teasing out these often invisible concerns is gold! By getting these issues into the light they can then be addressed. And they need to be addressed in order to resolve nagging internal concerns and get the foundation set for being a great prospecting company.  

Once you have everyone believing you have a product or service that merits promotion, it is time to ensure you have the right prospecting strategy. As Bob Dylan, the great American songwriter says, “I’ll know my song well before I start singin’.” In our prospecting case, we need to have a strategy for what we are going to say when prospecting and know it well before we set any expectations around prospecting. Equally as important, it must be done in a way we feel good about that doesn’t cause our contacts to feel uncomfortable. 

Getting this process right can take some effort but as you are hopefully realising – it is a nearly priceless exercise so it is well worth the time and effort. This one-way communication format isn’t the best method for developing an effective prospecting strategy but I will try to give you the most important elements of the process. As always, call with any questions and we’ll happily give you a hand.

Regardless of strategy, your initial prospecting statement should begin with the phrase, “who do you know who…” This is the most effective way to get a conversation focused enough to allow a contact to think of an actual person who could benefit from talking with you or your company. This first part is clear and easy, step two is where the work comes in.

The second part of the question requires real thought. You want to find a recurring problem that your product or service helps people with. In my world, I often ask, “Who do you know who may benefit from getting more control over their company?” I may add something like, “we typically help companies with either the predictability of their revenue, their team’s performance, or managing the financial performance of their business.”

It needs to be clear, concise, and come across as a sincere willingness to provide some help in an initial conversation. At Better Execute we actually have six different phrases we use depending on the person we are speaking to.  

So, how ready are you and your people to say, “Hey John, who do you know who may benefit from hearing about how we help resolve long-standing issues around their pain points?” If you can’t roll out of bed and throw these lines down it is unlikely they will be said in a way that makes your contacts feel comfortable in providing you with names and leads.

Embrace the fact that some work is required but the value and the shelf life will be significant and ongoing.

Imagine if everyone in your company did feel comfortable consistently asking these questions and asking for introductions! Could this be a game-changer for your business?

Your team has now practiced the wording enough that it rolls off their tongues with ease. You have put in the effort to identify the issues team members had with your service so everyone fully believes in the massive difference between the cost and value of your offering. And your team feels good about trying to help other customers obtain similar results.

Think of what can be generated from you and your team when everyone is clear on HOW and WHY to prospect for your company. Remember, there are only two reasons why an employee will not feel comfortable prospecting, which are:

1. They feel they are taking more than they are giving, which means we have issues with our product or service that needs addressing.
2. They don’t know how to prospect in a way they feel makes them look caring and professional, rather than seeming pushy and focused on money.

Problem #1 must be resolved to ensure your product and team area performing as required to be competitive in the marketplace.

Problem #2 is a strategic decision to practice getting better at engaging customers, industry contacts and anyone else to give them the chance to introduce somebody they know to have an initial conversation.

By this point, I truly hope you are feeling the ‘why’ and ‘how’ around the potential super-power of prospecting as a strategy for your company.  

Please understand that the pain created by not prospecting effectively is actually far more uncomfortable than the pain required to add the superpower of prospecting to your company. The difference is that you now know the most efficient and productive way of implementing your purpose-driven prospecting strategy.

Good luck and again, let us know if you have any questions along the way!

Strategic Planning For Improved Results

Are you setting low strategic planning expectations for your business as a way of combating the feeling of not having control over profitability?

Said another way, has business driven you into desiring only small goals – or maybe not wanting to set goals at all? There is some simple and practical strategic planning that can help you aspire to more and gain more control over your company’s outcomes. The challenge is often that these strategies aren’t talked about outside of management consultations. 

Many business managers may be under-implementing or unaware of vital processes that support greater fiscal control. This blog focuses upon the four key steps towards greater financial management of your company’s revenue and profitability.

Step 1 – Understand that failing is harder than the strategic planning required to achieve success. 

Most failure in small to midsize business is due to a lack of action from fear of being judged negatively by others. We need to better understand and accept that the pain of failure is far worse and longer-lasting than some grinding strategic planning activities required for success. When we accomplish this, we begin to see that the required strategic planning for achieving success can not only less painful than failure, it can actually become enjoyable, motivating and greatly rewarding.

Step 2 – Get simple, accurate & clear metrics for how you are currently performing vs. what strategic planning is required for success. 

One key issue that faces small to medium business managers is that more money is needed in the sales pipeline. There is a finite balance between a critical focus on conversion rates and the overwhelm of more leads than you can handle.

Of course, it is always smart to work on improving your conversion rates in order to maximise the quality of your customer sales process, but not as a way of combatting a lack of leads. This sense of lack also affects pricing and profitability due to feeling the need to convert as many sales as possible. Quality over quantity is often a more productive mentality to assume.

Establishing clear metrics means knowing how many leads are required for a given period to ensure an adequate sales pipeline. A second number within the sales pipeline is generally also required, such as the number of proposals submitted per the same period. The third important number is often the total sales (revenue) amount for the period. And fourth is the Gross Profit (GP). With these three or four numbers in hand, you can begin to get objective feedback on whether or not you are doing all that is required to achieve your desired numbers.

From these basic metrics, you can expand to begin working toward a balanced scorecard that takes more company activities into consideration. However, if you are currently not diligently reviewing some simple weekly metrics and making tough decisions to correct any underperforming numbers, stay practical. This dynamic of practical versus diligent reminds me of the unfit person wasting time researching the benefits of different exercises. They should simply begin by stepping away from the computer and running around the block! It is easy to make huge improvements early on before you need to start contemplating more sophisticated strategies. In the business world, this can translate to not concerning yourself with the perfect CRM, networking group, or product presentation. Just get going and measure some simple numbers accurately to get some feedback on how you are progressing.

Step 3 – Ensure everyone is accountable to someone or something. 

Accountability gets easier when objective numbers are being measured. To really elevate accountability, find ways to make everyone feel accountable to the point where it is far less painful to do what is required than paying the consequences for not achieving targets. This can be as basic as regularly reporting progress to the rest of the team. 

On the more strategic end, try paying money to undesirable causes or people each time a key performance number is missed.  My favourite is paying an ex-spouse (or even a current spouse) $100 each time the person doesn’t accomplish what they need to.  When the motivation level is right, it is almost comical what people can achieve.

Quota bonuses can create excellent motivation. Even if set small and low, the regular bonus can be factored into your base salary budgets and at a level that is frequently achievable yet not guaranteed. Staff will become accustomed to this little windfall, making them even more motivated to improve should they not attain their monthly quota.

Even a supposed bonus that is simply a portion of their budgeted salary can instill high levels of motivation.

Step 4 – Schedule quarterly reviews to reassess & restructure your strategic planning

There is a reason business breaks a year into 90-day quarters. It will serve you well to align with the dynamics of business and people in general. We need to recalibrate every 90 days to remain clear on where we are going and why. 

The typical strategic planning session requires 4-8 hours every quarter to go through the company processes. When performed correctly, company planning days reaffirm clarity, urgency, and accountability within your team, keeping them on track and motivated for the next quarter. 

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In conclusion, maintaining control of your company’s ability to generate a desired level of revenue and profitability is not for the lucky, it is for those who approach the process correctly, functionally and with the right mindset. 

Give it a try. For the little effort it can take, the gains can be exponential. There is a reason more than 80 percent of businesses fail within the first three years. We hope this article has helped clarify that business and financial success have little to do with luck. Through Better Execute, you now have access to information that can make building your business a practical, predictable success. Please feel free to contact us anytime for many more practical business solutions.