Understanding your customer’s needs.

Customer-Satisfaction-LoyaltyThere is one key factor between a successful business and a non-successful business within a market place where there are multiple competitors; the successful business understands what their customer wants better than the non-successful one. Understanding your customer’s wants and needs gives a company its competitive edge. Customer satisfaction with a supplier builds continued loyalty and it is this loyalty that creates significant barriers to entry for new market entrants.

How often have you cold called a business or individual only to be told that they are happy with their current supplier and give you the “no thank you”. This loyalty comes about because the company they currently buy from understands what the customer wants and tailors its products and services to directly be aligned to the needs of this customer. In marketing terms this is often called a unique sales proposition.

Successful companies understand that the customer is king, without a customer there is no cash flow. Keeping customers happy can be quite challenging for a business, particularly for large corporates. Kodak is a perfect example, the once Photography Mega Company became complacent and stopped listing to the voices of their customers, instead they created products that nobody wanted while their competitors like Fuji started to dominate the market by understanding that their clients were after quality digital camera products. Kodak hired a top IT CEO, had thousands of internal strategy sessions but the truth of the Kodak demise and bankruptcy came about because they no longer understood what their customers wanted.

Many years ago while working for a large corporate doing business development, a fellow account manager received a mega order from a large customer. I was most surprised around the timing of the order as I understood that the customer did not need to order at this time, they were awash with stock.

“That’s a huge order”, I stated, “Why did they order that now while their warehouse is loaded with stock!”

“Oh”, my colleague replied, “it’s a wedding present!”

I was literally gob smacked, my colleague was getting married the following week and the commission on the order was quite a windfall for him. When I saw my colleague together with the customer it was noticeable that they were very close. They had a strong relationship; my colleague always delivered him good service, responded to all his requests and ensured that all other parts of the organisation delivered the same service that he did. The customer was very satisfied; my colleague understood his customer’s wants and needs and in return was rewarded with a big fat bonus on his wedding day! That’s when I learnt, customer service is about building relationships, communication and delivering quality wanted outcomes for customers.

So how do you understand your customers? Good account managers that market business to business will visit their clients frequently. Catching up on a weekly basis, is everything going ok with our product? Are you happy with the service from us? Are our prices to your liking?’

If you don’t have a team of account managers build your customer or client electronic mailing database, and send them out electronic customer satisfaction surveys. After they buy, before they buy, during the sales process! Gather as much data as you can, understand how your customers feel about your products, your employees, your prices or even you! Data collected through customer satisfaction surveys is intellectual capital to be used within strategy development, proactive customer service retention and employee performance management. Customer is king, their satisfaction is the best method for keeping your business competitive, and for smart customers it is the only score that matters.

Check out www.hrtools.com.au, free customer satisfaction surveys for companies with less than 10 employees. More than 10 employees contact the team and they will put together a subscription for you that will get you taking your business from good to great!

Channel Partners! Create your own sales force without hiring a single employee!

channel-partners1Not to be confused with franchises, Channel Partners can be a useful program for improving sales, expanding market share or launching your new business venture. The key to a successful Channel Partner program resides in your incredible product, a robust Sales Channel Partner Program and systems to support your Channel Partners that work!

A successful channel partner can be any person or firm, they must believe in your product, have the sales skills and desire to market it and sell it. In the software industry, Channel Partners are often firms that support certain industry sectors, and are able to improve sales towards their existing customers by joining a Channel Partner Program and marketing an additional line of value added products to their existing customer base.

Robert Kiyosaki once posed the question, “Could you make a better burger than McDonalds?”

9 times out of ten most people answer yes, they could make a better burger than McDonalds. Then the follow up question is of course, “if you can make a better tasting burger than McDonalds, then why aren’t you doing it and making millions of dollars?”

The secret of course in the success of McDonalds resides in its systems, its systems for creating burgers quickly and inexpensively. The outcome is a tasty, convenient meal delivered in a few minutes to your car or table. Interesting point to note is that McDonalds is actually in the real estate business, people usually believe Fast Food to be at the core of their business model.

To create a successful channel partner program you need to build effective systems to support your channel partners. The Channel Partner program is a system in its own right! Your program needs to be a win-win proposition between you and your future partners. Your program needs to include training, marketing material and support for them when identifying leads, tools and sales collateral to be used during the sales cycle and training and education for their clients if needed. Most importantly the revenue share model between you and your Channel Partners needs to be generous enough to attract the right partners and get the outcomes you are after.

Invest a lot of time getting your Channel Partner program right, build systems around the program to reduce any barriers your partners may experience during the sales cycle. An effective Channel Partner program could eliminate your requirement to hire sales staff, and give you the ability to expand into markets in other regions, states or even countries.

With no requirement to hire and manage a sales workforce, you can potentially use your resources supporting your customers and partners and of course for further improving on your products.

Ever purchased Postage Stamps at a super market and not the post office? That’s a Channel Partner program!

Ever bought a train ticket from a small corner store? That’s a channel partner program!

Ever purchased accounting software from your accountant? That is your accountant participating in a Channel Partner program!

The key to successful businesses is innovation, great products and robust business systems. An effective channel partner program could enable a huge sales workforce simply with just a bit of thought and preparation. I should know I’m building a Channel Partner program for a new software business I am creating now.

As an additional revenue stream, consider a certification program that your partners need to pay for. Certification of course has benefits to your partners so ensure that becoming a certified partner is a value add.

The 51th Percentile – What the flock?

560165_354282014683921_830963497_nAnimal flocks, be it fish, ants or birds, often move in surprising synchronicity and seemingly make unanimous decisions at a moment’s notice. A scientific team recently filmed a flock of birds with multiple high speed cameras and discovered an interesting fact when it came to the decision making of the flock, they determined that the birds were all voting.

The scientific team was able to determine that each bird was voting through minute gestures, gestures that were almost undetectable except when the film had been slowed. What has always been one of the most fascinating unexplained phenomenons in human nature had finally been resolved as nothing more than simple democracy.

In fact, it was determined that through the smallest gestures the flock would remain on the same course and while on this course individual birds within the flock would be gesturing to change direction. The flock however would not change course until the 51st percentile of the entire flock gestured towards the same direction. Then, on the split second that the 51st percentile reached the same decision the flock would simultaneously change course in line with the collective want of the majority.

Now they say that leadership is not the ability to unwillingly bend the majority to your will but to convince the majority to share a common goal. Why charismatic leaders can be so successful is the simple reason of communication. The ability to communicate a goal and demonstrate the benefits of collectively working towards a goal to large groups of people is something that charismatic leaders can often do well. All employee meetings have been formed since the dark ages with this idea in mind.

However, getting a large group to share your common goal can sometimes take more than just one meeting. A good leader will persist with the message and communicate not only to the group but to each individual. Constantly reinforcing the message, constantly articulating the benefits of his or her strategy, continuously demonstrating their passion and commitment to the planned outcome. Then after some time, when the 51st percentile of the group is finally convinced the group will turn, the strategy will take flight and usually the remaining 49% will get on board as well. Just like a flock of birds, people won’t get behind an idea until the majority are convinced that the strategy is sound.

The most interesting notion around Flocking behaviour is the impact that it has on our day to day lives, most of the time without any of us knowing that we are falling victim to flocking.

According to what can be found on Wikipedia regarding Flocking,

“Computer simulations and mathematical models which have been developed to emulate the flocking behaviors of birds can generally be applied also to the “flocking” behavior of other species. As a result, the term “flocking” is sometimes applied, in computer science, to species other than birds.”

The mathematical principle behind flocking believes in the three basic principles;

1. Separation – avoid crowding neighbors (short range repulsion)

2. Alignment – steer towards average heading of neighbors

3. Cohesion – steer towards average position of neighbors (long range attraction)

The most interesting point of notice is that in one way or another humans are a species that flock, in fact our civilisation has developed mechanisms for flocking in both governments and corporations and created rules and laws to ensure our flocking is organised, lawful and most of the time fair to one another.

Let us just take the global financial crisis for example. We all now understand that the crisis was a result of subprime mortgages, falling property prices and the unusual financial instrument in the United States that allows home buyers to walk away from mortgages without being liable for the debt. This of course resulted in a total collapse of the financial system for any global financial body that had an interest in the United States financial industry.

Now we don’t have any more or less of anything we had before the financial crisis. The world hasn’t run out of anything at all, the only thing that is lacking now and that if available could turn the financial disaster of Europe around is confidence.

The challenges of an open and free market are that it is an instrument highly susceptible to flocking. The European financial crisis will not be over until the markets in those economies see confidence being demonstrated through investment. Unfortunately, nothing measures confidence as well as a stock market. Point of note though, when confidence reaches the 51 percentile, the world will witness a rally like no other.

The disastrous causes of the European financial crisis though are going to take some time for everyone to forget. Confidence will only be restored after a great deal of time as so many suffered so much. Still though, Warren Buffet is a man who always benefited through operating on the other side of the cycle, people like Warren are usually the first to start the gestures that lead to a 51st percentile swing, a swing that will one day lead everyone in a very positive direction.

The hobby of collecting money.

560165_354282014683921_830963497_nEver considered collecting money? No, I don’t mean collecting weird and wonderful notes and coins from other countries or periods in history, I mean collecting money.

Today I google’d collecting money, and all I got was a series of results on collecting actual currency, nothing on the subject of collecting money at all. The reason the Google results were all about collecting currency instead of ‘money’ is that within the common vernacular the actual term used is ‘creating or generating wealth’.

The problem with collecting money resides in the fact that money isn’t real and it is always transient. So when deciding that you are going to take up the hobby of collecting money, it is really a matter of keeping score rather than storing your currency in a drawer.

So to collect money successfully, we know that it is not actually about collecting notes and coins; it is all about numbers and scoring.

“Money was never a big motivation for me, except as a way to keep score.” Donald Trump

The challenges most people have with collecting money is ego. This is how the world resolves itself for most people when you look at their earnings over debt ratio. People tend to borrow as much as they can afford to pay back and sometimes they borrow more than they can pay back. There is an old proverb – An empty purse and a new house make a man wise, but too late.

Now I’m not preaching from the soap box, nobody has been a victim of an unbalanced earnings over debt ratio more than me (actually maybe some others have more than me – I’ve never had to declare bankruptcy or anything). When I got my first job the first thing I did was borrow the money for a nice car, then a credit card, then moved into a nice house. Before I knew it my fortnightly pay cycle consisted of me paying off all my debts and leaving me with very little money for entertainment, saving or investing. In fact for most years, after the loans and debt repayments were made there was usually nothing left. But, I enjoyed giving the illusion of success, nice cars, clothes and things that gave the illusion that I was successful. Yet it was all a house of cards, a fragile house of cards that had me entirely enslaved to my creditors.

The first thing you need to do to be a successful money collector is find a way to keep score. So if you are computer literate, start with a spread sheet. Create two columns, one for assets and the other for liabilities. Put everything you own that earns interest, generates cash or increases in value year on year in the assets column and put all your debts into the liabilities column.

So what is an asset? Is it my car, is it my house? No, it is neither of those things.

An asset is an asset only when it generates money or increases in value year on year. So if you are currently living in a house that you have mortgaged with a bank, it’s not actually an asset- it’s a liability! Move the actual borrowed amount into the liabilities column of your spread sheet and if you are paying off financing on your car move that into the liabilities column also!

What about the equity in my house you may ask? Forget about it, an asset is only something that generates money!

There are millions of people living in Europe and the United states who became more than aware that their equity in their home was valued at nothing when the global financial crisis hit. Within the blink of an eye their equity dissolved and all of a sudden they owed more on the family home than what it was actually worth.

I couldn’t help but laugh to myself the other day when I read how Warren Buffet only ever purchased hail damaged cars. Nobody wants a hail damaged car; I wondered to myself whether he seeks out areas of the United States to buy cars that are prone to hail damage, tornado alley perhaps?

Wealth consists not in having great possessions, but in having few wants. – Epictetus

So, have you entered all your assets into one column and all your liabilities into another, how is your financial position looking? Do you have more debt than the total value of your assets? If your asset value exceeds your debt value, then well done. If it doesn’t, then you need to start finding ways to move the numbers from your liabilities column over to your assets column.

Congratulations, you now have a score card.

One of the key techniques in collecting money is to ensure your cash inflows do not exceed your cash outflows. The interesting thing about western society is that a high proportion of the population are in business terms trading insolvent. This is why the rate of bankruptcies increases in perfect parallel to the unemployment rate. If people lose their jobs and don’t find another one almost immediately, the outcome for most individuals is total liquidation.

This doesn’t happen though to people who collect money for a hobby. The secret of the rich is that they are keeping score, their score resides solely in their asset column. Wealthy people understand that a real asset generates wealth regularly and increases in value, it is like a snowball rolling down a mountain.

Do you know the only thing that gives me pleasure? It’s to see my dividends coming in. – John D. Rockefeller

But the rich don’t want the poor people to know that the secret of generating and growing wealth resides in the simple hobby of collecting money. For if everybody was collecting money, who would borrow money from the rich. What is your debt is always another person’s asset.

The way to become rich is to put all your eggs in one basket and then watch that basket. – Andrew Carnegie

So why not start collecting money, it’s the most fun you can have with your clothes on.

Getting down to business – Why getting down actually feels like getting up…

shutterstock_64313536On May the 14th of this month an article in the Age entitled ‘Rate of Bulk Billing hits record high’ caught my immediate attention. The Labour Health minister Tanya Plibersek is on record citing that the spike in bulk billing rates was a result of long term concerted effort on the part of this government to incentivise Doctor’s to offer bulk billing services. I on the other hand viewed this spike very differently.

I viewed the spike in bulk billing as an indicator of consumer spending sentiment, if more people are seeking out bulk-billing doctors, this means that they are willing to move away from their family doctor or convenient medical centre because they are unwilling to spend money. People are concerned, people are uncertain and insecure about the economy, and people are trying to hold on to their money, that’s what a spike in bulk billing rates says to me.

Three days before on Saturday, May the 11th for the first time in nine months the Australian Dollar fell below parity. Some who keep track of global financial news may have been cognisant of the fact that from the 7th of May rumours started circulating that billionaire George Sorros was planning to raid the Aussie Dollar and start short selling it like he had done with the British Pound back in 1992.

For those of you who don’t understand short selling but perhaps heard the term over and over again during the fallout of the global financial crisis, let me explain it for you. The premise is simple; one way to short sell is to have either a lot of stock in a company or a hell of a lot of currency. Enough of it in fact, that when you dump it on the market you more or less create more supply than there is demand. As a result while you are selling it the price drops, as a short seller, you want it to drop as far as it could go, the further the better!

Once you have sold all your security, if you are lucky it will fall even further. Then when the price has completely bottomed out, you swoop on in and buy it all back. There you go, you have the same stock as when you started but now you have a few million or billion dollars in the bank also. Awesome eh! It became an issue during the GFC because traders were short selling securities they didn’t own, betting that they of course would go down, which they did. Like pass the parcel though, someone always ends up with a lame useless toy at the end.

Just to close things off Sorros did short sell the Aussie Dollar at the start of the month, and pocketed $55.95 million for his troubles. No short change when the average Australian worker earns $3 million dollars in their entire lifetime. George knew that the surprise RBA announcement of 25 basis points would cause the dollar to drop, his gamble paid off. $1 billion dollars down and he is now $60 million richer.

What was I doing at this time you may be thinking? I was watching the Voice and browsing for Hi-Fi equipment on E-bay, if only I had been keeping a close eye on foreign currency markets and whether any board members were entering the Reserve Bank Headquarters for a meeting my outlook may look a little different today. As a side note I did pick up an excellent bargain on a 6 Head VHS Player that has a built in DVD burner, I no longer have to sell my Video 8 Camcorder as I can now burn directly to DVD. That’s another 12 years I will get out of that amazing little device!

Anyway, so thanks to the RBA rate cut interest rates are the lowest they have ever been, ever! I mean in history of interest rates they have never been as low as they are now. That is cheap money, any minute now you would expect the citizens of Australia to rise up and start borrowing money in some kind of lending frenzy. Wouldn’t you, surely? It surely is going to be difficult to even get into banks now with all these people lining up to borrow money, as if banks didn’t have enough of a problem with queue’s already. Banks may even have to stay open until 5, just imagine!

However, I have noticed that there are no lines running out of the banks, no bank concierges run off their feet. No rush on the cheap money seems to be happening at all! In fact, property prices really aren’t going anywhere except Darwin and Perth but they have a supply issue as all the people who once worked in manufacturing now have moved interstate to work in the mines, riches awaits! Just ask Lindsey Fox, he pays his drivers over $200,000 per year to work in Western Australia’s Pilbara Region, most of them live in Bali and work six days on and six days off. $200,000 per year and living in a 3rd world country, sure beats clocking on the Ford Assembly line in Broadmeadows, doesn’t it?

Now if you are somebody trying to make a buck, this is a challenging time. Optimistic people will tell you that these are times filled with opportunities. It’s easy to make a buck when people are rolling in the money and the general consensus at the time is that the good times are never going to end! That is why some Doctor’s will rob you blind during boom periods because they know you are willing to pay more for the convenience of not having to travel thirty minutes and wait nearly an hour for a bulk billing doctor! This same doctor is suffering now though.

Simple rule to survival during periods like this, get old school. Remember now that business is about doing, identify problems that your customers are facing and find ways to solve them. If you have solved a customer problem, go and see them and tell them that you have done so, with any luck they will pay you something for it. Do it daily!

It’s going to be a rough ride in Australia for the next few months so make sure to be disciplined, loads of self-discipline. Make sure you keep the commitments you make to yourself, don’t put anything off or it will only make everything more difficult. This is boots and all period, you tell yourself you are going to make ten calls today, make twelve! Think value, value, value, how do I create value! In times like this, only the strong, disciplined and valuable survive. All the others get thrown the way side as a managers start bringing the bottom line into sharper focus!

Most importantly watch out for the devil inside, the little bustard we all have in us that tells us to focus on that thing we need to do, tomorrow. You know, the little devil that tells us that we have loads of time! I have seen procrastination end people in companies not because they weren’t talented people, just that the idiot at the next desk was (at the time) more focussed on getting more things done!

More importantly, get up when you are knocked down. Get straight back on the horse, get back in the ring, pick the toast that fell on the floor with the butter side down straight up and fucking eat it. And eat it every day while you are closing deals, kicking arse and taking fucking names. Oh and one more thing, don’t lose focus on creating value, achieving sales targets or closing deals otherwise the entire house of cards will fall apart. Be mindful of distractions and get ready for a wild ride, I think the next twelve months is going to be very interesting for any individual trying to make a dollar on this planet.

If you’re new to an industry, call your competitors and say Hi.

pic_mergerPeople love talking about themselves, particularly if you’re on a topic they are passionate about. If your new venture is the newest entrant into a particular market, give your competitors a call and introduce yourself.

Be bold too, ask them how they obtained their market position, what they see the industry doing in the future and how will they evolve their business going forward. If you don’t ask, you don’t get.

I once rang the market leader in a segment I was working in and he spent an hour on the telephone talking about how he had achieved their market leading position, the challenges they faced during establishment and later operation and where he saw the business direction in the future. It was an insightful discussion and one that came about through my ability to build instant rapport and present myself as a non-threat.

“Competition has been shown to be useful up to a certain point and no further, but cooperation, which is the thing we must strive for today, begins where competition leaves off.” – Franklin D. Roosevelt

Keep the lines of communication open, if a supplier burns you call your competitors and let them know. Demonstrate that even though you’re in competition, you believe in healthy competition and don’t want to see them getting burned by bad players in the market space. If there isn’t anything available, look at creating industry forum groups where you can share information and overall work together to develop the industry as a whole.

The most important reason though for these relationships are not all the jibber jabber I just mentioned in the previous paragraphs. Your competitors are more than likely going to be your exit strategy if things get tough. If you exist in a current bubble and then things tighten up across your industry, consolidation can be a good way to upsize a business quickly or improve a business that is drowning on its own.

If they trust you, they are going to be a lot more comfortable buying you. If they know you, and they speak to you often and you have demonstrated that you have their back, they are going to be a lot more open to a merger discussion rather than if you just rang them in the heat of desperation.

Mergers are a great way to upsize your business and introduce greater competence and resources into an organisation. When two organisations become one, there is usually the value which results in two operations coming together, sharing what works and what doesn’t work. There is efficiencies gained through the consolidation of resources and there is strength resulting in the consolidated market share.

So call your competitors and say Hi, introduce yourself and keep in touch. You just never know when you will need them.

Marketing in the social world, what is it and why is it different?

Social-Media-Marketing-1024x825Of late I have been working with an extremely talented collection of people on a range of different marketing strategies of course with the singular goal of generating revenue. Marketing isn’t always just about generating revenue, sure revenue may be the end game but more often than not marketing is a journey for an organisation, a journey of introduction, engaging, relationship building and if you’re lucky, selling.

There is no such thing as apples to apples anymore. Even if your competitor sells exactly the same product or service that you do, it’s the people in your business that make the difference.

In the old world, marketing was seen as a one-way exercise. Communication was one-way, with messages about products and services being flashed before customer’s eyes and then products and services uniquely positioned for purchase at the customer’s convenience. How often have you walked into the supermarket and seen a product on display you have seen an advertisement for but forgotten all about, ‘oh yeah, I think I will try that!’

We all know that the internet has changed all that. Customers are now informed, savvy. The modern day consumer can learn all about your company, your product, where you source your materials, where you source your labour and more importantly what your customers are saying about you in the blinking of an eye! In addition, just as much information will be gathered about your competitors and a buying decision will be made before you have even had a chance to say ‘Hello’ to a customer.

In today’s modern economy, customers want to know who you are, what you stand for, they want to hear the people in the business talking about the products and services, talking about the innovation and value they bring. In a world where people are so connected (at least digitally), your customers of today are developing relationships with you long before they have even met you.

The secret to developing meaningful relationships with customers before you have met them lies in inbound marketing.

Communication is now interactive, it’s two-way. Email newsletters and social media have created connections where people can communicate without feeling uncomfortable or awkward. On the internet I can ask you anything, I don’t care if it’s a stupid question. Nobody is listening except you and I’m not going to feel embarrassed about anything I ask.

The internet with all its wonders has certainly had an interesting effect on how people communicate. The internet almost affects people like alcohol, people lose all inhibitions! Talk to a Social Media Manager for a retailer and they will likely tell you that people will say the most horrific things on your Facebook page if they are pissed off with your company, things they would never walk into a store and say to a staff member.

Still in this world of no inhibitions and relationships being developed before people have even met, companies that are doing well in the digital age are companies who understand the importance of creating value in their messages.

As an inbound marketeer, our goal is to educate and entertain. We now develop meaningful relationships with our customers by educating them. Giving them pieces of information relevant to what’s important to them. We give away intellectual capital, meaningful information that they can use in their lives. Information that is valuable.

The digital economy has enabled targeted marketing strategies, where we can tailor messages directly to the appropriate market. The scattergun approach is now ‘so 1980’s’ and nothing reflects this more than current network television advertising revenues!

The opportunities in the internet economy are there for company’s who are willing to reach out with value, to give away value in a way that develops credibility and trust. Communicating who you are, what you stand for, what you believe in and what you are about in a way that is so clear and so concise, your customers feel they know you, your business and the people working in it better than they know your competitors.

The result will be clear, “oh yes, the team from Inbound Consulting know their stuff, I receive their monthly newsletter and I can tell you they know what they are talking about. I really enjoy learning from their articles and I am sure they would be a great firm to work with!”

Where do I start? Try and think like your customer, what is relevant to them right now? To make it in the world where everybody is a publisher, the most popular publisher is the one with the most relevant and valued message. Be transparent, let people into your business and introduce them to the team, it is the people, the personalities and the values they hold in your business which will have your customers thinking they are comparing apples with oranges.

Work to your strengths, create strategies to avoid areas of weakness.

560165_354282014683921_830963497_nEver worked on your own marketing plan? Ever sat down and looked at the distribution of revenue across your business and then broken it down into customer sectors or industry sectors? If you have you will know that after this kind of analysis you often become aware which industry sector your business is most successful in. If you determine that the greatest percentage of your revenue comes from a particular sector don’t think to yourself that you should likely focus on getting the other sectors more profitable.

I like to work to my strengths and I think that companies should too. If you are a professional tennis player, you may determine that you have a killer back hand. A back hand that is so powerful if you ever get onto the ball with it your opponent has no chance of returning it. Some may be of the view that it is then important to focus more on the areas of the game where you are weaker, not me though. I would focus almost entirely on that back hand, further developing it into a lethal explosion of force that would annihilate any opponent facing it. Work to your strengths I say and try and avoid the ball going anywhere near areas where you are weak. Have a strategy and work it.

So if you are finding that most of your revenue comes from a particular customer sector bring it into sharp focus, further develop the capability. Talk to your customers and understand how you could further improve and develop the product or service. Stick to the area where your business is strong and be the best in your industry.

The same rings true for managers also, too often than not we try and put round pegs in square holes. Quite often as Managers we try and force those round pegs through the square holes initially with some encouragement, later we then attempt to get more forceful through warnings and quiet room discussions and then when that doesn’t work we try and smash them through the hole until we finally give up and throw them out of the building.

Sometimes we need to take a break, take a deep breath. Look at situations objectively. Perhaps if we worked people to their strengths and not allowed them to bring us, themselves and the entire company down by forcing them to perform tasks where they have no natural capability – the world would be a better, happier and more productive place.

You wouldn’t expect an accountant to repair a motor car and you wouldn’t expect a mechanic to reconcile your balance sheet, in the same manner you wouldn’t force an engineer to sell the factory. Some times ambitious employees don’t know their limitations (I know I don’t), sometimes being a succesful manager is just a case of understanding your staff’s strengths and weaknesses and placing them within roles where they naturally excel and flourish. Great managers spend their time putting round pegs in round holes and square pegs in square holes.

 

Mind the gap – the prequal to any succesful launch.

Bakerloo_line_-_Waterloo_-_Mind_the_gapWhen to start a business? Around Christmas last I was at a function with my wife’s Mother’s group and as usual found myself seated at the Husbands table talking about work and work related stuff. I had just recently launched a new company and one of the Dad’s started talking to me about business and his desire to start one of his own one day. He discussed the many barriers that were preventing him from starting his own company, the kids, the mortgage; wife isn’t working at the moment, all very valid reasons for not taking a huge risk and starting your own business I thought. I nodded in agreement and sipped at my Coke when suddenly he stopped talking and asked me when I thought it was the best time to start a business?

I quickly responded, “When you see a clear underserviced gap in a particular market and you have a product or service that can fill that gap immediately!”

So true isn’t it, yet a lot of the times people start businesses as a result of other drivers. Recent unemployment, don’t take orders well, think that it will help them to meet girls, always dreamt of owning their own company one day.

I have launched businesses into heavily crowded markets and struggled as a result. Individuals that can identify market gaps and develop a market or service to fill the gap will always get instant success; look at Facebook for example, filled the gap, generated instant success and wealth.

If you are able to enter a market, service the gap and create significant barriers to entry for competitors you are on a winner. it doesn’t matter if your wife isn’t working, you have mortgage payments or your pet chicken has just died, if you can fill a gap quickly and for a period have a monopoly within a market segment, go for it – as fast as you can!

Companies that are able to launch and operate within a market gap will soon have imitators, other companies that will appear trying to replicate their success. Creating barriers for competitors is a strategy that should be developed during the business planning phase. Lock in your customers through contractual agreements, patents or technology.

Personally, if there isn’t a clear gap in the market it is always going to be an uphill battle. Choosing to go into business in an already crowded market will be very challenging, not very enjoyable and more than likely fail. My advice, no gap, no business. Do yourself a favour and keep your day job.

Products and services aren’t the only gaps that should be identified, price gaps, technology gaps, innovation gaps and even geography gaps can all be identified within existing markets. For example, the web design business is suffering from price pressure as a result of off shore developers, Apple became the world’s most wealthiest company due to an innovative mobile phone (how could Nokia and Sony-Ericsson not have seen that) and Ikea has changed the furniture business forever through innovation (thank god we don’t have any more furniture jingles or crazy give away’s).

The gap is fundamental, if there isn’t a gap don’t launch.

One thing I am yet to get my head around, why is Master’s stores opening up right next door to every Bunning’s? Any ideas anyone?

C’est la Vie Holden, it’s not that we are disloyal; your products just aren’t good enough!

I have found the recent news diabolical that General Motors Holden was able to lever a $250 Million commitment out the Federal Government and the State Government of South Australia without a single agreement in place or contractual deliverable. Whoever from Holden was able to lever this much money out of both these government bodies without any type of formal commitment in place must either be the greatest salesman of all time or by simple chance found himself dealing with morons on both sides of these government bodies.

The deal was made on the verbal agreement that Holden would use the funds to maintain the existing workforce and continue production and research and development in its South Australian Elizabeth assembly plant and in Victoria’s Fishermen’s Bends engine plant. Last week Holden announced it would cut 400 jobs from its production plant in Adelaide and 100 vehicle development jobs in Victoria.

Well C’est la Vie Holden I say. Holden’s chief executive has accused the Australian people of being disloyal to its home manufactured vehicles. The truth is that since import tariffs were reduced under the Howard Government the Australian consumer has enjoyed better quality vehicles at much more competitive prices than in the days of the Australian Holden and Ford wars of the seventies and eighties. European cars like BMWs and Audi’s were luxury vehicle prior to 1995 but now almost every second house has a piece of German Luxury in the driveway.

If Holden want to sell more cars, they need to lift their game and increase the value they are bringing to the Australian consumer. The truth is, the cars feel cheaply made and of low quality. They lack wow factor.

The Government shouldn’t invest another cent in Holden. It just isn’t an asset.

As any wealthy person will tell you, an asset is something that generates value, and more importantly generates wealth.

Unless Holden decides they are going to make a high quality low cost competitive product the company’s Australian operations are doomed. The product needs to be of a high quality and be able to compete apples to apples with other brands like BMW, Audi, Mercedes and Volkswagen.