If there is one thing I can guarantee any business owner, it is that your business will experience change. Sometimes workplace change can occur very quickly and in today’s marketplace, it can occur quite often. Although change can be difficult and presents new and interesting challenges, it isn’t necessarily negative. Change may take place in order to respond to a new opportunity. As I tell my clients, the key is having the right strategy in place to manage change, which can often be the difference between success and failure. When managing change, there are two main business strategies – reactive and proactive.
Reactive business strategies respond to an unanticipated event after the fact. A reactive approach to business is all too common. Unfortunately, this approach may lead to lost new and emerging opportunities, or losing out to a more aggressive competitor who bursts onto the scene. Being reactive is inefficient and extremely stressful. It doesn’t allow you to plan because you’re too busy reacting. A typical example of a reactive strategy is to wait for business to decline before investing in marketing and promotion. Reactive companies tend to fail in the long run. Look at what happened to companies like Nokia and Blockbuster.
Proactive business strategies anticipate the events, plan for them and take action. They are ready to capitalize on new and emerging opportunities or respond to new competitors. Research is very important to a proactive business strategy. You have to analyze the market thoroughly, pay attention to the trends and adapt to them before your competitors do. The reality is that no business can be proactive all the time, however if you focus on a proactive strategy, you will be more effective at dealing with challenges and as a result, more successful. A typical example of a proactive strategy is to invest in marketing and promotion to gain a greater market share in anticipation of increased competition, instead of waiting for business to decline first as in a reactive business strategy. Apple and Amazon are perfect examples of proactive companies.
Creating a proactive business culture is hard work but it pays off. It starts with a change in mindset. You need to be ahead of the curve. Instead of racing around putting out fires, anticipate and plan for success! Here are some tips to help create a proactive business culture:
- Schedule time to plan
- Clearly define expectations and goals
- Refine and improve business processes
- Research your industry
- Pay attention to trends
- Stay on top of the business climate
- Know your competitors
- Identify risks
- Search for and find problems before they happen
There is no doubt that adopting a proactive business strategy is the ideal approach to help you shape the results of change. However, sometimes changes come so quickly that we do need to react and therefore a reactive strategy needs to be applied. If you’d like more advice on how to create the right proactive or reactive business strategy, or are looking for other business advice, check out how TAB can help!
Although I am not a marketer, as a business advisor I am often asked what are the most effective ways to market a company. Business owners tend to ask me what tactics they should use to gain the ‘best’ and ‘fastest’ results. My advice is the same for business management: before you execute on a business initiative, you need a plan. Before you implement a marketing tactic, make sure you invest the time and resources in having a professional strategic marketing plan.
As a business owner, you know what you know, and what you don’t. Marketing, as an aspect of a business, is no different. Hiring a strategic marketing agency to develop your strategic plan is just good business sense.
A big part of any strategy is understanding how your customers value what you do for them. Depending on what data you may already have, a strategic marketing agency will conduct in-depth research on your customers and competitors to understand what brought them to you, and also why they stay.
As a result of the research analysis and the agency’s experience, they will be able to create an area of difference for you – something unique that differentiates your business from others in your industry. This brand identity is rooted in what your customers value.
This strategic marketing plan will now act as your roadmap and provide direction for all aspects of your marketing efforts and determine what tactics will be most effective in targeting specific customers. This is similar to how the strategy in a game of chess is needed to determine the moves made on the board.
Once your strategy is complete and you know what tactics are required, you can make an informed decision as to who will implement them. You’ll need to look at your internal resources and skill sets and compare them to external ones. If you choose to take them on in-house, think about who will manage them from a marketing perspective. You may choose to outsource only a portion of your tactics while taking on the rest internally. When it comes to implementation, you have a few options. Taking the time to plan can save your business thousands of dollars in needless tactics.
As a business advisor I see the issue of poor performers come up all the time. If you’re a small to medium-sized business owner you want to be out there growing and developing your business, not mired in staffing problems. Without big human resources departments and manuals of policies and procedures to follow, I know you often don’t have a roadmap on how to deal with poor performers. The reality is that regardless of the size of your business or your particular industry, at some point you will have to deal with this issue.
What are the causes of poor performance?
Poor performance can be the result of many things including:
- Not understanding expectations
- Lack of ability
- Lack of motivation
- Not a team player
- Chronically late
- Bad attitude
- Personality issues
- Non-work related problems
- Health issues
Why is employee performance so important to your business?
Employee performance affects organizational performance. A poor performer can create a toxic environment in your workplace, dragging down your entire team.
How can I avoid poor performers in my business?
Here are a few measures that I feel may help you to avoid the problem of poor performers.
- The hiring process: Choosing the right employees is crucial to a successful business but it’s not easy. If upon re-evaluation, you’ve discovered that you’ve hired several poor performers, perhaps you should consider outsourcing the hiring process to an external agency. The money you pay to the agency may actually save you money in the long run.
- Job expectations: Be clear about exactly what the job entails and what your expectations are.
- The onboarding process: Onboarding helps new hires acclimatize and orient to your business so that they can quickly become productive, contributing members of your organization. Have an onboarding plan in place for new hires and make sure that the tools they need to do their jobs are in place on their start date. E.g. workstation, computer, security pass, etc.
- Regularly scheduled one-on-one meetings: One-on-one meetings between employee and manager can potentially head off problems. Speaking about issues as they arise or have the potential to arise is always better than leaving them to fester and grow.
What can I do if I have a poor performer?
In my experience I’ve found it valuable to try and ascertain the root cause of poor performance before any action is taken. If the reasons are personal or health related and have nothing to do with the job, perhaps a leave of absence is in order. If an employee is lacking in ability, perhaps upgrading their skill set or transferring them to a different department is the answer. If the problem is attitude or motivation perhaps setting performance goals will inspire the necessary change. Try instituting quarterly performance reviews to address any performance issues and monitor improvement. If all else fails, you may have no choice but to let the employee go.
As a first step, I suggest that you review poor performance issues you’ve had in the past or are dealing with now. Evaluate what action to take in order to rectify the present situation and what changes you can make going forward in order to avoid the issues of poor performers.
As a business owner, it’s always very difficult to turn away business, especially in challenging economic times. However, the reality is that not every client is a good client. In fact, some clients make unreasonable demands. You know the kind of client I mean; we’ve all had to deal with them.
In my experience providing advice to business owners, I’ve heard hundreds of stories of unreasonable clients, yet many owners are unclear as to how to improve their relationship with these clients.
I’ve outlined below some of the classic unreasonable client requests and some steps you may want to consider trying to better the relationship.
1. They expect you to be available 24/7.
Unless this is the type of service you offer, you should clearly define your boundaries. Let your client know what your working hours and days are.
2. No matter what you charge, it’s always too expensive for them.
An unprofitable client takes time away from your profitable clients. Set your pricing and be prepared to negotiate but only within preset parameters. Be prepared to say no and walk away if necessary.
3. They consistently pay slowly which has a negative impact on your cash flow.
If you’re spending a lot of time and energy chasing a client for money, this may be a client worth letting go – unless you can afford to wait for your money. This type of client will not change their paying habits until you enforce your payment terms. You may have to hold back on your deliverables to make your point.
4. They keep changing their mind about what they want.
If you have a client that keeps changing their mind about what they want after you’ve done the work, start charging them for the changes.
5. They don’t respond to your calls/emails/texts in a timely fashion.
Ask if there is another person who perhaps has more time to be responsive. Let them know that the lack of response may delay timelines and keep a paper trail in case it does.
6. They rarely turn up at meetings or cancel at the last minute.
Your time is valuable. If your client is consistently not turning up at meetings or cancelling at the last minute, start billing them for your time.
I recommend that you try to convert an unreasonable client into a good client, but that’s not always possible. When all of your best efforts fail, it may be time to fire the client.
As a business advisor, when I meet with business owners we discuss a multitude of business-related issues, most of which fall into these four categories all of which have a direct impact on your bottom line: operations, finance, human resources and marketing. In this blog, I’m going to focus on the fourth category: marketing.
Marketing is about communication. Your business could conceive of the most innovative and useful product/service, but what good is all of that effort if nobody knows anything about your product/service or your brand? Having a good product/service is no longer enough to sustain a successful business. You need to communicate that you have a good product/service, what makes it a good product/service, the benefits that your product/service will provide potential customers, and what makes your product/service different from or better than what your competitors are offering.
Simply put, whether B2B or B2C, people are unlikely to just walk into your business and give you their hard-earned money if they don’t know who you are or what you’re selling in a marketplace defined by endless choice. Marketing is an absolute necessity for any business, small or large, because it answers the three most important questions that customers have about an unfamiliar brand: “Who are you? What do you do? How are you different?” When you make an effort to answer these questions effectively, your business will reap the benefits. Effective, value-added marketing heightens brand awareness and trust, allows you to reach your target audience and boost your customer base, and increases your bottom line.
Marketing is necessary, but I assure you that it isn’t easy. Too many inexperienced businesses make the mistake of treating marketing like medicine – only to be used when something goes wrong. Only when a product isn’t selling or revenue is dwindling do these businesses decide to consider marketing as a last-ditch effort.
Successful businesses treat marketing like food – regular, sustained, and practiced consistently. In other words, successful businesses never stop marketing. In doing so, these businesses ensure that they are always in communication with and attuned to the needs of their customers.
We have established that marketing is an essential business function, but what about the cost? Maintaining consistent communication with your audience certainly isn’t free. How much money should you invest in marketing in your business?
To make money, you need to spend money. There are a number of factors that influence how much your business should invest in marketing, such as the age and size of your business, and the level of competition in your market.
The most common strategy that businesses use to determine marketing budgets is by taking gross or projected revenue and allocating a certain percentage towards marketing. Though the exact percentages vary, newer, less established businesses benefit from an increased allocation of gross or projected revenue towards marketing (10%+). New and emerging brands need to invest a greater percentage of revenue in marketing early on in order to increase brand awareness and market share. On the other hand, established brands can generally allocate a lower percentage of revenue towards marketing (5%+).
Make sure you have a strong brand story, one that clearly differentiates your brand from your competition by clearly identifying who you are, and the value and benefit your services or products provide to your customers. Marketing gives your brand a “human touch”. Like a good friend, customers are more likely to connect and do business with a brand they feel they know and can trust. In this way, effective marketing has a direct impact on your bottom line.
Marketing has the potential to take your business to a level of success that cannot be achieved by idling and waiting for your prospective customers to find you.
How much importance is placed on marketing in your business? Are you spending the appropriate amount on your marketing efforts?
Successful businesses have three things in common: effective policies, processes, and procedures. We can refer to these as the three Ps. Each employee in a company has their own set of rules to follow as they complete work tasks, and it is critical for the prolonged success of a business to ensure that each employee understands the company’s three Ps.
The problem is that far too many businesses struggle to both define and differentiate their three Ps, leading to confusion among employees and the muddling together of these three fundamentally different but equally essential elements.
Understanding the three Ps is important for creating and maintaining a complete working system. Too often do we see businesses implementing only one or two of the three Ps, yet all three elements are equally necessary in order to properly delegate job tasks and ensure continued productivity and profitability.
I’ve outlined below the definitions of and key differences between each of our three Ps. It is my belief that understanding these three elements is one of the key determinants of success in any business.
A policy is a guideline used to set direction in an organization. Without such guidelines, there is much more room for error in your business. An example of a policy that is prevalent in today’s business world pertains to email. Common email policy within a business often includes rules regarding imitating others, the use of foul language, and malicious content.
Policies should be seen as courses of action to guide and influence the decision-making process in your business. With clear and effective policies comes increased efficiency and the mitigation of avoidable mistakes that threaten productivity as well as your bottom line.
A process is the high-level overview of a task. In other words, the process is the expanded view, or “map”, that defines exactly how an objective can be reached, from start to finish.
Take a moment to think about any task that may be required to be completed in your business. What steps must be taken in order to complete that task? At any level in your organization, it is critical to have processes with clearly defined objectives as well as steps to take in order to reach these objectives. Whether you are an intern or senior management, you need processes that plainly outline your objectives and how to meet them.
Building on what we now understand about the high-level nature of a process, a procedure refers to the series of steps required in order to complete a task. If the process can be seen as a map, then the procedure covers the directions to reach the destination. If the task is posting a blog, then the procedure would detail the exact steps that must be taken to complete the task from start to finish.
As you can now see, the three P’s are interconnected, yet fundamentally different from each other. Each of these elements must be present in order to encourage maximum productivity in your business.
Creating, maintaining, and continually updating your policies, processes, and procedures mitigates avoidable mistakes and ensures that every employee at every level of your business knows what is expected of him or her, and how to achieve their clearly defined objectives.
How are your three Ps? Do you think you are giving them the attention they deserve?
A great time to think about having a Team Strategic Planning Session is at the end of your fourth quarter. It’s the perfect time to engage in goal setting and strategy development for 2015. In the past, I’ve touched upon Strategic Planning Sessions, but I wanted to dive a little deeper into their value and importance this week.
Very few business owners are willing, particularly at the end of a year, to take the time to stop business for a day or two, gather their key executives together, and discuss their business goals. That said, it has been proven time and time again, that those businesses that actively participate in goal setting are far more likely to meet, if not exceed their business goals.
A main component of a team strategic planning session is goal setting, which is more powerful when done as a team. Having your key employees understand the goals and objectives of the business and how they will contribute to the strategies to achieve these goals is key.
Bringing a third party business advisor into the session is also important to consider, as they are an unbiased expert there solely to help your team, and ultimately your business. Their expertise will provide direction and support in areas you cannot as well as help steer the conversation to constructive takeaways. How can an advisor, and these sessions, help exactly?
- Clarifying the crucial long term objectives
- Identifying pressing business challenges that are hindering growth
- Focusing on building a profitable business one strategic step at a time
- Formulating actionable plans to implement those ideas
With your executive team participating at these sessions, they can take a more active role in ensuring the goals are met through strategic planning and execution. Having them be accountable and have ownership of the direction of the business helps you build a stronger more viable team. As the owner, you are able to follow up with your team on the actionable items and ensure your meetings are effective and efficient.
Have you benefited from team strategic planning sessions? Do you feel your team is need of one? Let me know your experiences in the comments section below!