Back To Business Reality

I don't think I've ever been as excited for a new year as I am right now. The business surrealism of 1999-2001 is finally behind us. From January 1, 1999 - July 1, 2000, a business could do virtually anything and still make a ton of money. Then from July 1, 2000 to December 31st, 2001, even the good companies couldn't make decent money. It was like running a 100 Meter Dash downhill for 18 months and then uphill for 18 months. I believe we're back to running on a level track.

So it's back to business basics. Here are five fundamental areas to reconsider:

1. Create A Customer

   Ultimately, the purpose of any business is to create a customer. This can only be accomplished by offering value that attracts individuals to want to buy it. When the individual makes the actual purchase, you have created a customer. Remember that value is anything that increases the chances that another person will achieve what they want. You can then keep this customer and generate additional sales by offering this individual more value. Ultimately, all customers want better results. Consequently, we need to first define are customers.

2. Clarify the Market And The Customer Needs

   What market are you trying to serve? Define your ideal customers. Know whom it is that you are trying to attract. Don't start with the products or services you want to sell. Start with the customers you want to serve. Identify these customers. Then determine what is of true value to them. What is it that will increase their chances of achieving what they want? One good way to determine this is to ask them. Another good way is to observe them. See what they could use that would increase their results.

3. Define Your Distribution Channel

   How will you deliver this value to the customer you have created? Will you deliver it directly, or will it be delivered by someone else in your organization? How can you make this distribution of value to your customers more efficient and effective?

4. Market

   Once you know who you want to serve, the value you want to contribute to them and how you will deliver that value, you then need to determine how you will let the potential customer know about the value you could deliver to them. Essentially, you need to market. Effective marketing communicates the value a customer will truly receive. Ineffective marketing either over promises a value that cannot be delivered or does not let the potential customer know all of the true value that they could receive.

5. Innovate

   Innovation is one of the true core competencies that every successful organization has mastered. Innovation is simply the process of identifying, combining, evaluating and implementing ideas that add greater value to customers. Innovation can be applied to product/service development (creating more value), distribution, market identification and marketing.

   As we move into 2002, let's maintain a laser-like focus on these fundamentals:

   1. The purpose of a business is to create a customer.
   2. Identify the desired customers.
   3. Clarify how to distribute value to these customers.
   4. Communicate clearly what value we have to offer to this customer.
   5. Constantly improve the defining of a customer, the product or service we sell, the distribution channel, and the marketing of our value.

   If all of this sounds very familiar, that's because Peter Drucker wrote about these exact concepts for at least the past forty years.

   It's a level playing field again. Focus on the fundamentals to win the race!

QUESTION FOR THE MONTH

Ok, now its your turn to answer these questions:

1. Who is my true cash paying customer?
2. What constitutes real value to them?
3. How can I create that value?
4. How can I distribute that value to them?
5. How can I let them know the value I have to offer them?

Last month I asked readers, "How would you build a great corporation?" Faithful reader, Rick Miller, provided this answer:

"I have never built a corporation but I have been employed by a few. Over the years I have discovered a few concepts that I believe are essential building blocks in the development of a great Corporation, regardless of the size or type of business.

Company Goal - This goes hand in hand with Strategy. But before a Strategy can be implemented the company must come up with a Company Goal that will help its employees to understand the desired outcome of the Company strategy. Perhaps the best stated Goal of any Company I have ever worked for was Cracker Barrel's. There Goal as a company is, "To provide 100% Guest Satisfaction".

Strategy - What is the best path to follow in order to meet the Company Goal? In Cracker Barrel's case that is to provide: a quality product, in a customer friendly atmosphere, at reasonable prices.

Standards - A standard for what is acceptable from employees must be established and adhered to by everyone regardless of their position within the company. Most companies do very well when explaining the procedures an employee must follow. But it is equally important to establish a set of standards by which an employee can measure their personal success within the company. What must they do to keep their job as well as what must they do to gain advancement within the company? And if someone is not meeting these standards then steps should be taken to either move them into a position where they can meet the standards, or to move them out of the company all together.

Communication - A strict schedule of regular communication between levels and departments within a company must be established and adhered to. At times this may seem mundane but it is the meetings that take place while things are going smoothly that will enable a company to smoothly sail its way through when things do become choppy. Opportunities can be identified and solved before they become too large.

Training - Again most companies can do fairly well when training New Hires but there must be an established program for re-training current employees. Products change. New ways of doing things are discovered all the time. People learn, through their personal experiences, easier more efficient ways to perform their duties. This information must be shared. Sometimes people simply begin to short cut procedures, sacrificing quality in the name of time. Periodically refreshing their training can eliminate some of these issues before they become too large.

Before any of the aforementioned steps will be effective one thing is a must. Whoever is steering the ship must believe in them. I can not stress enough how important this is. Passion has a snowball effect. If someone is passionate about something then others around that person will begin to feed off of that, but only to a degree. Your employees may feed off of your passion but it is unlikely that their level of passion will meet yours. After all they only work for you but it is your company. My point is that if you lack passion or belief in whatever system you install to run your company then your employees will feed off of that as well. They will always have less passion or belief in your company than you do so it is vital that you never let that passion die. Give them something positive to feed off of and they will become positive. After all we are what we eat."

If you ever have questions or ideas for readers, please send them to me and I will include them in the next issue of "Enhancing Executive Effectiveness."

Also, I encourage you to encourage your colleagues to sign up for this free monthly electronic series. The more people we get involved, the greater the quality of the collaboration can become. In case you forgot, all they need to do is go to click here to go to the signup form.

We have added another twenty subscribers in December.

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