Extraordinary Business

I recently read an article in Inc. magazine called Paradise Lost by Bo Burlingham. What caught my attention was the story was about Reell Precision Manufacturing. This company had been recognized for its culture and now was struggling for its life.

Reell was a successful company with a strong employee focus. In fact, all decisions were made in the best interests of the employees. For more than 30 years, the company had worked through good times and bad. When times got tough, the leaders took pay cuts to avoid reducing staff. The company was ran by three CEO's that made decisions based on consensus. The formula worked. The company experienced unflagging loyalty while having turnover well below the industry average. So what caused the dramatic turnaround in performance?

Reell's industry was changing. Responsible for making laptop hinges, they found their markets moving overseas. While they were able to make changes and compete for a while, they became burdened by keeping up with increasing sales. Those sales forced capital investments that forced the company to focus on generating more sales to pay for the equipment. Reell became forced to compete on price and reduced margins. In the short term, Reell's decision to globalize their laptop hinge product prevented layoffs. In the long term it nearly destroyed the company because of its failure to balance out the needs of the employees and the needs of the business.

The moral of this story is looking at all aspects of your business no matter how well you are doing. Too much emphasis in any one area can be disastrous.

Article:
Paradise Lost
By Bo Burlingham
Photographs by Mike McGregor
Magazine: Inc.
Issue: February 2008

Labels: Business, Business Coaching, Change Management, Coaching, Leadership, Management, Planning, Sales, Strategy

Ever wonder what your business is costing you? Many of you can look to your P & L's to find a number. While that might be accurate to represent the total dollars you are spending, I am more interested in what lies beneath those numbers.

A company with a good strategy, strong leadership, and effective staff can be far more profitable than a business with a good strategy, weak leadership, and a staff unclear of their direction. I have seen companies with comparable sales in similar industries that have differences of hundreds of thousands of dollars (or more) in profitability. That difference could be the measure of what your business is costing you. But how can you be sure?

Here is a little test to start reading between the lines. Please keep in mind that if we are talking about averages it may not mean you do not have room for improvement. Remember, an average is little better than a C grade.

1. Advertising: How are your advertising expenses compared to the averages for your industry? What do the best companies spend? Some companies spend over four times the amount on advertising compared to the leaders in their industry. Unfortunately in most cases more advertising does not lead to greater results.
2. Turnover: How long do you retain people compared to your peers? Higher turnover can increase human resources costs exponentially through training, benefits, wages, unemployment, advertising (want ads), and recruiter bills.
3. Strategy: Great, you have a strategy. So who knows about it? How effectively is it executed? Over 90% of businesses fail to realize their strategy to its fullest potential and over 95% of employees in most organizations do not know what their company's strategy is. This can lead to even the right people doing the wrong things. In addition there can be multiple agendas, wasted time on projects not congruent with strategy, not to mention frustration, anxiety, loss of motivation, and ultimately lost sales.
4. Quality: So your quality is good, but can it be better? Each year, millions of dollars are lost to quality issues. These losses go beyond equipment failure into people related issues. Poor leadership can lead to poor morale and the "I don't care" attitude.
5. Sales: So your sales are down. It's the economy, the political climate, increased competition, the web, we lost our lucky rabbit's foot, etc. Remember, in the face of any bad economy, there are always companies that are growing and profitable. If you are not one of those companies that is growing and profitable, then you could be dying a slow death. Are sales fluctuations a blip on the screen or have steady decreases taken a bite in your profitability? There could be many reasons including the economy, but do you want your business to be influenced by the economy or do you want to be the best in your industry?

So what's your business costing you? What if you could increase your bottom line anywhere from 10-50% just by changing some of the things you already do without adding new technology? Many businesses seem to let these hidden costs go. My guess is because they cannot be seen. They remain hidden in the numbers. I would also guess that even if some companies knew the problems, they might feel powerless because they don't know what to do. What are your thoughts?

Labels: Business, Change Management, Leadership, Management, Planning, Sales, Strategy

I recently heard a radio personality comment on a football game he was watching. The comment was related to how the coach managed the clock and how difficult it must be to keep track of the time outs while managing the plays and accounting for the obvious obstacles created by the opposing team.

What's interesting is as a leader you experience similar change every day. The Leader's team is their people and strategy is their playbook. Instead of one team, leaders are often competing against many teams at the same time. The clock you manage is through your annual goals and your fiscal year. As with any team, you have your standout players, your team players and those who fail to deliver their best.

As you look at 2008, what are some of the biggest challenges you see with meeting your goals?

Labels: Business, Business Coaching, Change Management, Leadership, Management, Personal Development, Professional Development, Sales, Strategy, Wealth

So many people seek wealth without realizing they already possess it. Every one of us is already a millionaire. The only difference between those who have $1 million and those who are working for it is the skills they mastered. So something to ask yourself is if you are already a millionaire, why don't you have $1 million? Those obstacles in the way are what is cleaning out your "bank account." It's the counterproductive habits that have removed the funds to this point. What you really need to do is look at what has made you successful so far, and how can you use it to eliminate the bad habits. Apply more of what you do well and focus yourself on your goal. No matter what it is, you can achieve it if you are committed to taking action.

Labels: Coaching, Leadership, Management, Mentoring, Planning, Sales, Wealth

Do you know people or businesses that seem to operate on the status quo? A vast majority of what we experience is managed through complacency. People do just enough to get through the day. Many businesses do just enough with service to prevent customer complaints. We have been lulled into accepting mediocre performance. I would love to hear from people about when they experience someone going above and beyond. Let's recognize those who step up.

Labels: customer service, Leadership, Sales

I recently read an article by Margarita Bauza from the Detroit Free Press on the benefits of Coaching. In the past, many people thought coaching was only for poor performers. The reality today is most people using coaches are high performers that want to become world-class achievers. As I look at my list of clients, I would agree with her findings. Most if not all of the people I work with are tops in their field. What they look for is how they can work smarter and excel in performance.

Are you seeking a coach? Here are some things to look for:

• Find the right fit. Make sure you are comfortable with the coach you choose.
• If you need help in a specific area, seek someone who specializes.
• Seek a coach who will help you develop your skills. Some coaches are more consultants. They tell you what you should do. Developmental coaching helps you find the right answer for your situation.
• Ask a lot of questions. Understand the coach's process or style and make sure it matches what you wish to accomplish.
• Make sure the coach is focused on you.
• Ask for references.

Coaching can be an excellent way to get you from where you are to where you want to be. The top performers in entertainment and sports have a coach. Why shouldn't you?

Labels: Business, Coaching, Leadership, Mentoring, Sales