TurboStrategy:21PowerfulWaystoTransformYourBusinessandBoostYourProfitsQuicklybyBrianTracy ISBN:0814471935

AMACOM©2003(160pages)

Thistextpresentsa21-pointarrayofstrategiesforturningaroundstrugglingbusinessesandmovingsuccessfulonesintohighgear;italsooffersacombinationofexamples,inspiringstories,time-testedapproachesandmore.

TableofContentsTurboStrategy—21PowerfulWaystoTransformYourBusinessandBoostYourProfitsQuickly

Preface

Introduction

Chapter1 - StartWhereYouAreChapter2 - DrawaLineUnderthePast

Chapter3 - ConductaBasicBusinessAnalysisChapter4 - DecideExactlyWhatYouWant

Chapter5 - DesignYourIdealFutureChapter6 - CreateaMissionStatementChapter7 - ReinventYourOrganizationChapter8 - SelecttheRightPeopleChapter9 -MarketMoreEffectivelyChapter10 - AnalyzeYourCompetitionChapter11 - DoItBetter,Faster,CheaperChapter12 - ChangeYourMarketingMix

Chapter13 - PositionYourCompanyforSuccess

Chapter14 - DevelopStrategicBusinessUnitsChapter15 - SellMoreEffectivelyChapter16 - EliminatetheBottlenecksChapter17 - ReengineerYourCompanyChapter18 - PumpUpYourProfits

Chapter19 - CommittoContinuousImprovementChapter20 - ConcentrateontheCoreChapter21 - FocusonResultsConclusion

Bibliography

TheTurboStrategyProcess

TheTurboCoachingProcess

Index

BackCover

Allthebusinesswisdomintheworldisn’tworthadimeifitdoesn’tproduceresults.BrianTracyhasworkedwithmorethan500companiesthroughouttheUS,Canada,and22othercountries.Hehashelpedhundredsofthousandsofpeopleworldwidetoachievespectacularresults,andnowheishelpingbusinessesreachnewlevelsofsuccesswithTurboStrategy.

"IcallitTurboStrategy,"saysTracy,"becauseitisanintensive,fast,short,sharp,effectivewayofsettingandimplementinganystrategy."Nowcompaniesinallindustriescangetonthefasttracktomorefocusedstrategy,betterplanning,morepowerfulmarketingandsalesapproaches,andhigherprofits.Readerswilldiscoverthepracticaltechniquesthatthemostsuccessfulbusinessesusetothrive,eveninthetoughestmarkets.They’llalsolearnhowto:

Maintainflexibility,thekeytodealingwithanever-changingbusinesslandscape

Articulatetheirbusiness’svision,values,mission,purpose,andgoalsbothshort-andlong-term

"Drawalinethroughthepast"andbecometheirownturnaroundspecialists

Hirethebestpeople—andmotivatethemtoexcellence

Through21strategypointsanddozensofexamples,stories,andquotationsfromworld-classthinkersandcorporateleaders,BrianTracywillshowanycompanyhowtoturbochargeitsstrategyandgetitsbusinessfiringonall

cylinders.

AbouttheAuthor

BrianTracyisoneofAmerica’stopbusinessspeakersandaleadingconsultantonpersonalandprofessionaldevelopment.Abest-sellingauthor,hisbooksincludeVictory!,FocalPointandThe100AbsolutelyUnbreakableLawsofBusinessSuccess.

TurboStrategy—21PowerfulWaystoTransformYourBusinessandBoostYourProfitsQuicklyBrianTracy

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Turbostrategy:21powerfulwaystotransformyourbusinessandboostyourprofitsquickly/BrianTracy.p.cm.Includesbibliographicalreferencesandindex.0-8144-7193-5

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Copyright©2003BrianTracy.

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storedinaretrievalsystem,ortransmittedinwholeorinpart,inanyformorbyanymeans,electronic,mechanical,photocopying,recording,orotherwise,withoutthepriorwrittenpermissionofAMACOM,adivisionofAmericanManagementAssociation,1601Broadway,NewYork,NY10019.

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ToPeterDrucker,thefinestmanagementthinkerandbusinessphilosopherofthisageoranyage.Yourinsights,ideas,andobservationshavebeenacontinuoussourceofknowledgeandinspirationtome,forwhichIamcontinuouslygrateful.

AbouttheAuthor

BrianTracyisoneofAmerica'stopbusinessspeakers,abest-sellingauthor,andoneoftheleadingconsultantsandtrainersonpersonalandprofessionaldevelopmentintheworldtoday.Hehasstarted,built,managed,orturnedaroundtwenty-twodifferentbusinessesindiverseindustries.Brianaddresses250,000peopleeachyearonsubjectsrangingfromPersonalSuccessandLeadershiptoManagerialEffectiveness,Creativity,andSales.Hehaswrittenthirtybooks,includingFocalPoint(AMACOM),MaximumAchievement,andThe100AbsolutelyUnbreakableLawsofBusinessSuccess,andhasproducedmorethan300audioandvideolearningprograms.Muchofhisworkhasbeentranslatedintootherlanguagesandisbeingusedinthirty-fivecountries.

Brianhasconsultedwithmorethan500companies—IBM,McDonnellDouglas,andTheMillionDollarRoundTableamongthem—andhastrainedmorethan2,000,000peoplepersonally.Hisideasareproven,practical,andfast-acting.Hisreadersandseminarparticipantslearnaseriesoftechniquesandstrategiesthattheycanuseimmediatelytogetbetterresultsintheirlivesandcareers.

PrefaceThankyouforreadingthisbook.Inthepagesahead,Iwillshowyouhowtoturbochargeyourbusinessquickly,increasingsalesandrevenues,cuttingcostsandboostingprofitsbyapplyingthebesttechniquesandstrategieseverdiscoveredforoperatingasuccessfulbusiness,inanyeconomyorunderanycompetitiveconditions.

Youwillquicklylearnaseriesofpractical,provenideas,methods,andtechniquesusedbyallsuccessfulcompaniesthatsurviveandthriveintoughmarkets.

Youwilllearnhowtoclarifythevision,values,mission,purpose,andgoalsofyourcompanyandhowtousethisincreasedclaritytoachievegreaterrevenuesandprofitabilityinthemonthsahead.

Tosaveyoutimeandtohelpyougetmoreandbetterresultsasquicklyaspossible,I'llgiveyouideasthathavebeendistilledfromyearsofexperienceandfromhundredsofbooksandarticlesonstrategy,planning,marketing,selling,andbusinesssuccess.

Themostimportantpartofthisbook,however,isnotwhatyoureadorlearn,butwhatyouactuallydowiththesepractical,provenconcepts.Actioniseverything.Asyouread,thinkaboutspecificstepsyoucantakeimmediatelytoapplytheseideasinyourbusiness.

Inbusiness,asinsomanyareasoflife,resultsareeverything.Asyougoalong,thinkabouthowthesestrategiescanhelpyoutogetbetterresultsfaster!

MyReasonsforWritingThisBookMyreasonsforwritingthisbookonTurbostrategyaretwofold.First,Iwanttohelpyoutobemoresuccessfulinyourbusiness,whateveritisorwhereveryoufindyourselfinyourcareertoday.

MysecondreasonforwritingthisbookisthatIwanttointroduceyoutothepracticaltechniquesthatyoumustmastertosurviveandthriveintheincreasinglyturbulentandchallengingbusinessclimateofthetwenty-firstcentury.

IcallthisapproachTurbostrategybecauseitisanintensive,fast,focused,andeffectivewayofsettingandimplementingstrategy.Itisforexecutivesandcompaniesthatwanttomakeimmediatechangesandgetbetterresultsfaster.

ConsidertheConsequencesThereisasimpleruleforsettingprioritiesordeterminingthevalueofanydecisionoraction:Itrevolvesaroundtheideaofconsequences.Anactionordecisionthatisimportantissomethingthathassignificantpotentialconsequences.Thegreaterthepotentialconsequences,themoreimportanttheactionordecisionis.

Bythisyardstick,strategicthinkingandplanningareperhapsthemostimportantactsofthedecision-maker.Theconsequencesofgoodstrategycanbethesuccessoftheorganization.Apoorstrategy,ornostrategyatall,canleadtothefailureoftheenterprise.AsMichaelKamisays,"Thosewhodonotplanforthefuturecannothaveone."PeterDruckersays,"Theverybestwaytopredictthefutureistocreateit."Strategyisthekey.

Ineveryinterviewandstudy,businessexecutivesagreealmostunanimouslythat,ofallthemanagementmethodsandtechniquesthatareavailabletoday,strategicplanningisstillthemostpowerfulandeffectiveingettingbusinessresults.

SimpleToolsandTechniquesOneofthebiggestchallengesforbusyexecutivestodayisfindingthetimetoreadthevastliteratureandmastertheintricaciesofstrategicthinking.Whatyouneedisasetofsimpletoolsthatyoucanuseimmediatelytoincreaseprofitability.Thetwenty-oneprinciplesyouareabouttolearnwillserveasthosetools.

Mostcompaniestodaydonothaveastrategicplan,oriftheydohaveaplan,itisoutdatedandobsoleteinlightofthecurrenteconomicsituation.Thisbookwillenableyoutoconductaquickstrategicanalysisofyourcompanyandmakeimmediatedecisionstoimproveoperations.Youmayevengaintheinsightsyouneedtoturnyourcompanyaroundcompletely,astheseideashavedoneforsomanyotherbusinessesovertheyears.

IntroductionLetmebeginthisbookwithastory.In1951,theNobelprize-winningphysicistAlbertEinsteinwasteachingatPrincetonUniversity.Hehadjustadministeredanexaminationtoanadvancedclassofphysicsstudentsandwasonhiswaybacktohisoffice.Histeachingassistantwaswalkingwithhim,carryingthecompletedexampapers.

Theassistant,alittleshyinthepresenceofthegreatestphysicistofthetwentiethcentury,askedhim,"Dr.Einstein,wasn'tthatexamthatyougavethisclassofphysicsstudentsthesameexamthatyougavetothissameclasslastyear?"

Einsteinthoughtforamomentandthensaid,"Yes,itwasthesameexam."

Theteachingassistantthenaskedhesitantly,"ButDr.Einstein,howcouldyougivethesameexamtothesameclasstwoyearsinarow?"

Einstein'sanswerwasclassic.Hesaid,"Well,theanswershavechanged."

Thepointofthisstoryisthatthequestionsmighthavebeenthesame,butastheresultofrapiddevelopmentsanddiscoveriesinworldofphysicsatthattime,thecorrectanswersweredifferentfromwhattheymighthavebeenayearbefore.

YourAnswersHaveChangedThisstoryappliestoyouandyourbusinessaswell.Youranswershavechangedinthelastyear,andtheycontinuetochange,sometimeseveryday.Overthecourseoftwelve,twenty-four,orthirty-sixmonths,yourproducts,services,prices,processes,marketing,selling,andlevelsofprofitabilitymayallchange.Sometimestheywillallchangetogether.Thisiswhyyouneedtoengageinacontinuous,ongoingprocessofstrategicthinkingandstrategicplanning.

Muchofwhatyouaredoinginyourbusinesstodayissimplyacontinuationofwhatyouhavedoneinthepast,whetherornotitisthemosteffectiveandprofitablewaytorunyourbusiness.Muchofwhatyouaredoingisnolongerrelevanttothecurrentbusinesssituationintoday'smarket.Theanswershavechanged.

Manyexecutivesareoperatingonoldassumptions,attemptingtoselltheirnolongeridealproductsandservicestochangedmarketscontainingcustomerswithdifferentwants,needs,andexpectationswhoareoperatingundernewconditionswithnewpricingdemandsandconstraints.

Manyexecutivesarelikethedriverwhosecompanionlooksatthemapandsays,"We'reonthewrongroad!"

Thedriver,hunchedoverthewheel,replies,"Sowhat.We'remakinggreattime!"

Manyexecutivesare"makinggreattime,"workingharderandhardertogetresults,butthey'reonthewrongroad,goinginthewrongdirectionintermsofthecurrentrealities.Theanswershavechanged.

FlexibilityIsEssentialThemostimportantqualityforsuccessinbusiness,accordingtotheMenningerInstitute,isthequalityofflexibility.Tosurviveandthriveinturbulenttimes,youmustdevelopanattitudeofopen-mindedness.Youmustbewillingtofacethefactsandrealitiesoftodayratherthanthoseofyesterday.Youmustbeopentothepossibilitythatyouareonthewrongroadandbepreparedtochangecourse.

AccordingtotheAmericanManagementAssociation,70percentofyourdecisionsinbusinesswillturnouttobewronginthefullnessoftime.Whenyoumadethosedecisions,theymadesense.Basedontheexistingsituation,theywereprobablygooddecisions.Butnowtheanswershavechanged.Theinformationuponwhichyoubasedyourdecisionsisnolongerthesame.Thebusinesssituationmayhavechangeddramatically.

Likecallinga"time-out"inafootballgame,youneedtostopoccasionallyandreevaluatethesituation.Youneedtopullbackandexamineyourassumptions,todeterminewhetherornottheyarestillvalid.Withnewinformation,youneedtoestablishastrategicplanthatisrelevantandapplicabletoyoursituationtoday.

TheOneTrueMeasureOnceuponatime,amandiedofaheartattackandlefthisconstructioncompanytohiswife.Hehadspenttwenty-fiveyearsbuildingthebusiness,buthehadneglectedhishealth.Heatetoomuch,dranktoomuch,smokedtoomuch,andneverexercised.Finally,itallcaughtupwithhimandhewasgone.

Hiswifehadspentmostofheradultliferaisingthechildrenandrunningthehome,andsheknewverylittleaboutbusiness.Nonetheless,shewasnowtheownerofaten-million-dollarconstructioncompanythatwashersolesourceofsupportandherlargestfamilyasset.

Afterthefuneral,shewentintothecompanyonaMondaymorning,satallthemanagersdownandaskedthemtoexplaintoherhowthecompanyworked.Theyrealizedshewasseriousaboutwantingtounderstandthebusiness,sotheytookheraroundanddescribedtoherthevariousproductsandservicesthattheyoffered.Whentheyexplainedaparticularproductlinethatthecompanywasselling,sheaskedsimply,"Howisitgoing?"

Ifitwassellingwell,sheencouragedthemtodomoreofit.Ifitwasdoingpoorly,sheencouragedthemeithertostopdoingitortochangewhattheyweredoingsoitwasmoreprofitable.

Shehadtwobasicquestions:"What'sworking?"and"What'snotworking?"

Thisbecamehermanagementstyle.Eachtimeshecametotheoffices,shemetwithhermanagersorwalkedaroundandasked,"What'sworking?"and"What'snotworking?"Ifitwasn'tworking,shewouldinstructthemtoimproveitortodiscontinueit.Ifitwasworking,theywereencouragedtodomoreofit.

Shethenbeganasking,"Who'sworking?"and"Who'snotworking?"Inshortorder,shechangedthestaffaroundsothateveryonewasdoingwhattheyhadbeenhiredtodoandmakingavaluablecontribution.Thosewhowouldnotorcouldnotwereencouragedtogoelsewhere.

PracticeThisMethodDailyYoushouldusethesamemethodwithyourbusiness.If,foranyreason,somethingisnolongerworking,ifyouarenotmakingprogress,movingahead,growinginsalesandprofitability,andhittingyournumbersonschedule,youmustask,"Isitworking?"

Ifit'sworking,domoreofit.Ifit'snotworking,bepreparedtostoptheclock,calla"timeout"andreexaminetheproduct,service,process,orareaofactivitywithneweyes.

Bewillingtoputallofyourpastexperiencesandassumptionsasideforthemomentandsimplyask,"What'sworking?and"What'snotworking?"

Thedifferencebetweensuccessandfailureinbusinesslargelydependsuponyourabilitytolookatyourcompanythroughthelensofstrategicplanningandmakesurethateverythingyouaredoingiscontributingtotheachievementofyourmostimportantbusinessgoals.

Let'slooknowattwenty-onegreatideasyoucanusetoholdyourbusinessuptothelight,performastrategicanalysis,andbegintomoveaheadtowardyourbusinessgoalsofsales,growth,andprofitabilityfasterthanyoueverthoughtpossible.

Chapter1:StartWhereYouAre

OverviewDowhatyoucan,withwhatyouhave,rightwhereyouare.--TheodoreRoosevelt

Thestartingpointofstrategicplanningisforyoutodevelopabsoluteclarityaboutyourcurrentsituation.Lookatyouroverallbusinessandask,"What'sworking?"and"What'snotworking?"ineveryarea.

Whatisyourcurrentlevelofsales?Breakthemdownbyproduct,productline,service,market,anddistributionchannel.Whatexactlyareyouselling,towhichcustomers,atwhatprices,andwithwhatlevelofprofitability?

Compareyourcurrentsaleswithyourassumptions,yourexpectations,andyourprojections.Areyouontrack?Compareyourlevelofsaleswithlastyear.Whatarethetrends?Aretheyupordown?Aretheytemporaryorpermanent?Whatdothetrendssuggestforthefutureofyourbusiness?Whatcouldyoudotorespondmoreeffectivelytothem?

CashFlowIsEverythingLookatyourcashflowandlevelsofprofitabilityforeachproduct,service,andareaofactivity.Areyourprofitsgoingupordown?Aretheyonbudgetorgoingsideways?Lookatthepercentages.Analyzeyourreturn-on-equity,return-on-investment,andreturn-on-sales.Aretheyincreasingordecreasing?

JimCollinssaysinGoodtoGreat:WhySomeCompaniesMaketheLeap—AndOthersDon'tthatyoumustbewillingtoaskthe"brutalquestions"aboutyourbusinessifyouaregoingtosolveyourproblemsandachieveyourgoals.Ifyourgoalistobuildagreatcompany,whyisn'tyourcompanyalreadygreat?

Whichofyourproductsorservicesissellingwelltoday?Whichofyourproductsandservicesarethemostprofitable?Whichonesaredoingpoorly?Whichonesdoyoulosemoneyon?

Isyourcurrentbusinesssituation,positiveornegative,inanyarea,temporary,orisitpartofalong-termtrend?Howcanyouknowforsure?Howcanyoufindout?Whatshouldyoudonext?

ClarityIstheKeyPerhapsthemostimportantwordinstrategicplanningis"clarity."Youmustbeabsolutelyclearabouttheanswerstoeachofthesequestions.Vaguenessorfuzzinessinanyareacanleadtoproblems,difficulties,andevendisasters.

Whyhasyourbusinessbeensuccessfulinthepast?Whathaveyoudonewellinthepastthathasbeenresponsibleforyoursuccesstodate?Whatarethemostimportantskillsandcompetenciesthatyourcompanypossessestoday?Whataretheverybestproductsandservicesthatyouofferrightnow?

Lookatthepeoplearoundyou.Whoareyourmostvaluablepeople?Whoisnolongerasvaluableasbefore?Whoevenrepresentsanetlossordetrimenttoyourbusiness?Bepreparedtoaskandanswerthebrutalquestions.

TheCustomerIstheKingWhoareyourbestcustomerstoday?Whatandwhereareyourbestmarkets?Whatdoyourcustomerslikemostaboutwhatyoudoforthem?Whatdotheycomplimentthemostofwhatyouofferordoforthem?Whatisyournumber-oneareaofcustomersatisfaction?

Whatdoyourcustomerslikeleastaboutwhatyoudo?Whatdotheycomplainaboutmost?Whatisitthatyousellthatyourcustomersandpotentialcustomersprefertobuysomewhereelseratherthanfromyou?

IdentifyYourPersonalStrengthsLookatyourselfhonestly.Whatareyourownpersonalbestskills,qualities,andabilities?Whatarethemostimportantthingsyoudoatworkandforyourcompany?Whatarethemostvaluablecontributionsyoumakepersonallytoyourbusiness?

Imagineyourselfasadoctorconductingacompletemedicalexaminationonyourownbody.Treatyourbusinessasthoughitwereabodyaswell.Getaccurateinformationoneverycriticaldetailofyourcompany,andusethisasabaselinetodetermineyourfutureactions.Behonestandobjectiveateverystep.

HaroldGeneen,whobuiltITTintoamajorconglomerate,alwayssaid,"Getthefacts.Gettherealfacts.Nottheapparentfacts,thehoped-forfactsortheobviousfacts.Gettherealfacts,basedonanalysis.Factsdon'tlie."

QuestionYourAssumptionsTimemanagementexpertAlexMcKenzieoncewrote,"Errantassumptionslieattherootofeveryfailure."Everythingyoudoinyourbusinessisbasedoncertainassumptions.Someofthoseassumptionscouldbewrong.Theanswersmayhavechanged,andwhatwascorrectinthepastmaynotbecorrecttoday.Checkeveryassumptionandask,"Whatifthisassumptionwerenottrue?"

Ifyoufoundthatyouwereoperatingonthebasisofafalseassumption,whatchangeswouldyouhavetomake,especiallywithregardtoyourkeypeople,keycustomers,keyproductsandservices,andkeyprojections?

Strategicplanningrequiresthatyoubeginwitharealisticandhonestassessmentofexactlywhereyouareandwhatyouaretoday.Thisbecomesyourstartingpointforstrategicplanningandstrategicthinking.Itbecomesthefoundationuponwhichallfuturedecisionsaremade.

StartWhereYouAre1. Whatisworkingbestinyourbusinesstoday?Whatpartsof

yourbusinessmakeyouhappiest?

2. Whatisnotworkinginyourbusiness?Whatcausesyouthemostaggravationandfrustration?

3. Whatareyourmostimportantproductsandmarkets?Whataccountsforthelargestportionofyourrevenues?

4. Whoareyourmostimportantpeople?Whoarethepeoplewhoaccountformostofyourresults?

5. Whatareyourspecialtalentsandskills?Whatisityoudothataccountsformostofyoursuccess?

6. Whatarethemajorchangestakingplaceinyourmarket?Whatchangesshouldyoumaketocompensateforthem?

7. Whatareyourmosttreasuredassumptionsaboutyourpeople,customers,markets,products,services,andyourself?Whatifoneofthemweren'ttrue?Whatwouldyoudothen?

Chapter2:DrawaLineUnderthePast

OverviewDeepwithinmandwellthoseslumberingpowers;powersthatwouldastonishhim,thatheneverdreamedofpossessing;forcesthatwouldrevolutionizehislifeifarousedandputintoaction.--OrisonSwettMarden

Often,whenacompanygetsintotrouble,theboardorcompanyownersbringinaturnaroundspecialistandputthatpersonincharge.Thereasontheydothisisbecausetheturnaroundspecialisthasnovestedinterestinanythingthathashappeneduptothatmoment.Theturnaroundspecialistsimplydrawsalineunderthepastandfocusestotallyonthefutureandthesurvivalofthebusiness.Youneedtodothesame.Youneedtobeyourownturnaroundspecialist.

Tobuildagreattomorrow,youhavetodiscontinuethethingsthataren'tworking.Inordertodomorethingsright,youhavetostopdoingthingswrong.

PracticeZero-BasedThinkingForyoutomaintainmaximumflexibility,thereisathinkingtoolyoucanusetodayandfortherestofyourcareer.ItisoneofthebestanalytictoolsIhaveeverdiscoveredinalifetimeofreading,research,andpractice.Icallit"zero-basedthinking."

Letmegiveyouaquickillustrationofzero-basedthinking.

IlivenotfarfromaSanDiegocommunitycalledRanchoSantaFe.ThisareahasbeenwrittenupinForbesmagazineasthemostexpensiveneighborhoodintheUnitedStates.Theaveragehomepriceinthisareaismorethanamilliondollars,andthepricesrisequicklyupto$25and$30millioneach.TheneighborhoodwasoriginallyestablishedmorethanfiftyyearsagobytheSantaFeRailwayCompanyandisconsideredtobethemostdeluxeandeliteneighborhoodinthegreaterSanDiegoarea.

WithinthecovenantareaofRanchoSantaFe,thereareverystrictguidelinesconcerninglotsizeandarchitecturaldesign.Eachhomemustconformtospecificrulesofcolorandstructure,andeachhomesitemustbeaminimumoftwoacres.Sincetheareahasbeendeveloped,andsincehomeshavebeenbuiltthereformorethanfiftyyears,therearealotofoldhomes,whichareoftenreferredtobyrealestateagentsas"scrapers."

Ascraperisanolder,smallerhomeonalotinRanchoSantaFethatistwoacresormoreinsize.Peoplewhowanttheprestigeoflivingin"TheRanch"havefoundthatitisusuallycheapertosimplybringinabulldozerandscrapeofftheoldhouseratherthanattemptingtofixituporrenovateit.Itturnsouttobecheapertobuildabrandnewhouseontheprimepropertythanitistotrytomakeanoldhouselivable.

ImagineStartingOverZero-basedthinkingrequiresthatyouapplythis"scraper"mentalitytoeverypartofyourbusiness.Youdothisbyaskingthiskeyquestion:IsthereanythingIamdoinginmybusinessthat,knowingwhatIknownow,Iwouldn'tstartupagaintodayifIhadittodoover?

Insteadofstrugglingtodeterminehowyoumightmodify,change,fix,revise,improve,oraltersomebusinessfunction,youinsteadask,"IfIwerenotdoingthistoday,wouldIstartitupagain,knowingwhatIknownow?"

Tobeginwith,isthereanyproductorservicethatyouwouldnotbringtothemarket,offer,orsellifyouhadittodooveragain,startingtoday?Since80percentofyourproductsandservicesareprobablygoingtobeobsoletewithinthenextfiveyears,theremaybeproductsandservicesyouareofferingtodaythat,becauseofchangedmarketconditions,youwouldnotintroduceifyouhadittodooveragain,knowingwhatyouknownow.Theseproductsorservicesareprimecandidatesfordiscontinuationordivestiture.

Isthereanypersoninyourbusinessthatyouwouldnothire,assign,appoint,gotoworkfor,orbecomeassociatedwithifyouhadittodooveragain?Mostofyourproblemsinbusinesswillcomefromattemptingtoworkwithoraroundadifficultperson,who,knowingwhatyouknownow,youwouldn'tgetinvolvedwithagain.Whodoesthisbringtomind?

Isthereanysupplier,banker,orvendoryouaredealingwithtodaywho,knowingwhatyouknownow,youwouldn'tgetinvolvedwithifyouhadittodoover?Sincemanyofyourbusinessrelationshipswillnotworkoutovertime,youmustbepreparedtoreevaluatethemconstantly,especiallyiftheyarecausingyouanyproblemsorfrustrations.

AnalyzeYourCustomersIsthereanycustomeryouaresellingtoorservicingtodaywho,knowingwhatyouknownow,youwouldn'ttakeonagain?Manycompaniesareaskingthisquestionabouttheirdifficultcustomersanddecidingtoletthemgo.Sometimesoneofthesmartestthingsyoucandoisto"fireyourcustomers."Encouragethemtogoanddealwithsomeoneelsewhowouldbemoreappropriateforthem.

AssessYourBusinessOperationsIsthereanyexpenditureinyourbusinessthatyouwouldnotauthorizeagainifyouhadittodoover?Isthereanyprocess,procedure,oractivitythatyouwouldn'tstartupagain,orgetinto,ifyouweremakingthedecisiontoday,knowingwhatyouknownow?

Isthereanyadvertising,marketingorsellingmethodology,orexpensethat,knowingwhatyouknownow,youwouldn'tstartupagaintoday?Keepasking,"What'sworking?"and"What'snotworking?"

PayAttentiontotheIndicatorsYoucanalwaystellwhenyouareinazero-basedthinkingsituationbecauseitcausesyoucontinuousstress,aggravation,frustration,negativity,andunhappiness.Youthinkaboutitcontinuously.Oftenyoubringithomeatnightanddiscussitatthefamilydinnertable.Sometimesitwillevenkeepyouawakeatnight.

Wheneversomethingisnotworking,ornotworkingoutthewayyouexpected,orcausingyoustress,financiallosses,aggravation,orirritation,ask,"KnowingwhatIknownow,wouldIgetintothisagaintodayifIhadittodoover?"

Iftheansweris"No!"thenyournextquestionis"HowdoIgetoutandhowfast?"

TheDecisionIsInevitableHere'sanimportantpoint.Ifsomethingisnotworking,eventuallyyouwillhavetogetoutofit.Youwillhavetoletthepersongo,discontinuetheproductorservice,eliminatetheactivityorexpense,orchangethemethodofoperation.Itisonlyamatteroftime.Itisnotgoingtogetbetterallbyitself.Andeverysingleexecutivewhofinallydecidestogetoutofanunhappysituationsaysafterwards,"Ishouldhavedonethisalongtimeago!"

ApplyThisApproachContinuouslyPracticezero-basedthinkingasa"goforward"methodfortherestofyourbusinesscareer.Applyittoeverythingyoudo,toeverypartofyourbusiness,everysingleday.Applyittoeveryproduct,service,process,procedure,andperson,andbesurethat,knowingwhatyouknownow,youwouldgetintoitagaintodayifyouhadittodoover.Ifnot,getoutasfastasyoucan.

DrawaLineUnderthePast1. Imaginestartingoveragainineverypartofyourbusiness.Is

thereanythingyouaredoingthat,knowingwhatyouknownow,youwouldn'tstartupagaintoday?

2. Isthereanypersoninyourbusinesslifewho,knowingwhatyouknownow,youwouldn'thire,assign,promote,orotherwisegetinvolvedwithagaintoday?

3. Isthereanyproductorservicethat,knowingwhatyouknownow,youwouldn'tbringtothemarketagaintoday?

4. Isthereanyinvestmentyouhavemadethat,knowingwhatyouknownow,youwouldn'tmakeagaintoday?

5. Isthereanybusinessactivityorprocessyouareusingthat,knowingwhatyouknownow,youwouldn'tstartupagaintoday?

6. Isthereanycustomerormarketthat,knowingwhatyouknownow,youwouldn'ttakeonorgetintoagaintoday,ifyouhadittodoover?

7. Isthereanycareerdecisionyouhavemadethat,knowingwhatyouknownow,youwouldn'tmakethesamewayifyouhadittodoover?

Chapter3:ConductaBasicBusinessAnalysis

OverviewAskingtherightquestionstakesasmuchskillasgivingtherightanswers.--RobertHalf

Wheneveryougoinforacompletemedicalexam,thedoctorsandnursesfollowasetprocedure.Theybeginbycheckingyourvitalfunctionstodetermineyouroveralllevelofhealth.Theycheckyourpulserate,yourtemperature,yourbloodpressure,andyourrespiratoryrate.Theythentakesamplesandtestyourblood,urine,andfeces.Inamoreextensivemedicalexam,theycheckyourheart,yourlungs,yourcolon,andavarietyofotherareastogetaclearpictureofthehealthofyourbody.Bythetimetheyhavecompletedtheirexamination,theyhaveanaccuratepictureofyouroverallhealthandphysicalwell-being.

Inthesameway,therearebasicbusinessexaminationquestionsthatyouneedtoaskandanswercontinuouslythroughoutthelifeofyourorganization.Thegreatertherateofturbulenceintheworldaroundyou,themoreimportantitisthatyouaskandanswerthesequestionsaccurately.

StartwiththeBasicsThestartingpointofbusinessanalysisisforyoutoask:"WhatbusinessamIin?"WhatbusinessamIreallyin?WhatbusinessamIreally,reallyin?"

Manycompaniesbecomesocaughtupintheirday-to-dayoperationsthattheylosesightoftheirrealreasonsforexistence.Theylosesightofthefactthattheyareinbusinesstoperformaparticularservice,ortoachieveaparticulargoal,foraspecifictypeofcustomer.

Forexample,manyyearsagotherailroadsconcludedthattheywereintherailroadbusiness.Inreality,theywereinthetransportationbusiness.Bylosingsightofthebusinesstheywerereallyin,therailroadscompletelymissedtheshippingindustry,thetruckingindustry,andtheairlineindustry.Itwasn'tlongbeforetheirmarketsweretakenawayfromthembytheseindustries,andmanyofthemwentbankrupt.

WhenIfirstbeganspeaking,Idefinedmyselfasbeinginthe"training"business.IsoonrealizedIwasinthe"goalachievementbusiness."Mybusinesswashelpingpeopletoachievetheirpersonalandbusinessgoalsfasterbyprovidingthemwithpracticalideasthattheycoulduseimmediatelytogetbetterresults.

Thisinsightledmefromtalksandseminarsintoaudioandvideorecording,books,trainingprograms,andInternet-basede-learningonavarietyofsubjects,includingthedevelopmentandpresentationoftheTurbostrategyProcess.

TheCustomerasCenterpieceThenextquestionyoumustaskandansweraccuratelyis"Whoismycustomer?"Whoisthepersonwhobuysfromyoutoday?Describeyourcustomerindetail.Whatistheage,income,education,position,attitude,location,andinterestofyouridealcustomer?Manycompaniesarenotexactlysureoftheanswertothisquestion.Theyhaveatbestanunclearpictureofthepsychologicalanddemographiccharacteristicsoftheircustomers.

Whowillyourcustomerbetomorrowifcurrenttrendscontinue?Whoshouldyourcustomerbeifyouwanttobesuccessfulinthemarketsoftomorrow?Whocouldyourcustomerbeifyouweretochange,improve,orupgradeyourproductorserviceofferings?

DetermineWhatYouSellYournextquestionis"Whydoesmycustomerbuy?"Whatvalue,benefit,result,ordifferencedoesyourcustomerseekorexpecttoenjoyasaresultofdoingbusinesswithyou?Ofallthevariousbenefitsthatyourproductsorservicesofferyourcustomers,whatdoyourcustomersconsidertobemoreimportantthananythingelse?Doyouknow?Yourabilitytodefineandpromotethisuniquebenefitistherealkeytocompetitiveadvantageandmarketsuccess.

Younextquestionis"Whatdowedoespeciallywell?"Whatdoyoudobetterthananyofyourcompetitors?Whereareyousuperior?Customersonlybuyfromaparticularcompanybecausetheyfeelthat,insomeway,thatcompanyofferssomethingthatissuperiortoanyotheroffering.Whatisyourareaofexcellence?

JackWelchofGeneralElectricwasfamousforsaying,"Ifyoudon'thavecompetitiveadvantage,don'tcompete."HisphilosophywasthatGeneralElectricwouldbenumberoneornumbertwoineverymarketsegmentinwhichitcompeted,orthecompanywouldgetoutofthatmarket.Areyounumberoneornumbertwoinyourmarket?Canyoube?Whatisyourplantoachievethismarketposition?

DefineYourCompetitorThenextquestion,whichwewilldealwithextensivelyinChapter10,is:"Whoismycompetition?"

Onceyouhaveidentifiedyourcompetition,youmustaskwhyyourpotentialcustomerbuysfromyourcompetitionratherthanfromyou.Whatvalueorbenefitdoesshebelieveshereceivesfromsomeoneelsethatshedoesnotbelieveshereceivesfromyou?Howcouldyouoffsetthisperception?

SetClearGoalsInperforminganexaminationofyourbusiness,youmustask,"Whataremygoals?"Whatareyoutryingtoaccomplish?Ifyouareclearaboutyourgoals,whatisholdingyoubackfromachievingthem?Youneedclear,written,measurable,time-boundedgoalsforeverypartofyourbusinessandpersonallife.Youneedshort-term,medium-term,andlong-termgoals.Eachgoalmustbeinwriting,withplansforitsaccomplishment.Youcan'thitatargetthatyoucan'tsee.

Analyzeeverythingyoudointhecourseofadayoraweek.Whatarethe20percentofyouractivitiesthatcouldaccountfor80percentormoreofyourresults?Sometimes,just10percentofyouractivities—ifyouweretopursuethemaggressively—couldaccountfor90percentofyourresults.Whatmighttheybe?

BecomeAction-OrientedWhatactionsshouldyoutakeimmediatelyinresponsetotheanswerstothesequestions?Whatistheveryfirstthingyoushoulddorightnowtoincreaseyoursalesandimproveyourmarketposition?

Anothergoodquestionyoushouldaskyourselfis"WhyamIinbusinessatall?"Whydoyouexist?Whatsocialpurposedoesyourcompanyserve?Whatlosswouldoccurtosocietyifyouceasedtodobusinessaltogether?

Imaginethatyouhadtogoinfrontofagovernmenttribunaleachyeartojustifyyourcontinuedexistence.Whatwouldyousaytothetribunalintermsofhowyouserve,help,ormakeadifferenceinthelivesorworkofyourcustomerstojustifystayinginbusiness?

Thesearekeyquestionsthatyouneedtoaskandanswerforyourbusinessonaregularbasis.Youshouldaskandanswerthesequestionsforyourself,aswell.Ifyouareunclearorinaccurateinyouranswerstoanyofthem,thehealthofyourenterprisecouldbeinjeopardy.

ConductaBasicBusinessAnalysis1. Whatareyourgoalsforyourbusiness?Whatareyoutryingto

accomplish?

2. Whoisyouridealcustomer?Describehimorheraccurately.

3. Whydoesyourcustomerbuyfromyou?Whatspecialbenefitsoradvantagesdoyouofferthatyourcompetitorsdon'thave?

4. Whatbusinessareyoureallyin?Describeyourbusinessintermsofwhatyoudoforyourcustomerandwhatresultsyouget.

5. Whatarethe20percentofyouractivitiesthatcouldaccountfor80percentofyourresults?

6. Whatisyourcompetitiveadvantage,your"areaofexcellence?"Inwhatwaysareyousuperiorto90percentormoreofyourcompetitors?

7. Whatspecific,measurableactionsshouldyoutakeimmediatelyinanswertotheabovequestions?

Chapter4:DecideExactlyWhatYouWantTheworldhasthehabitofmakingwayforthemanwhosewordsandactionsshowthatheknowswhereheisgoing.--NapoleonHill

Turbostrategybeginswithdecidingexactlywhatyouwanttoaccomplishinthekeyareasofyourbusinesslife.Onceyouknowyourgoalsineacharea,youcandecideonthebeststepstogetthere.

TheGOSPAModelYoucanusetheGOSPAModelasaguideforstrategicplanning.Thesefivekeythinkingtoolsformthebasisforsuccessfulbusinessoperations.

BeginwiththeEndinMind

Thefirstletter,"G,"standsforGoals.Thesearetheultimateresultsthatyouwanttoachieve.Yourgoalsaretheendtargetsthatyouaimatthroughoutyourbusinessyearorplanningperiod.Yourgoalsareyoursales,profits,growthrate,marketshare,orpercentageofreturnonassets,equity,investment,orsales.Goalsarealwaysmeasurable.Whatareyours?

StepsontheStaircase

Thesecondletter,"O,"standsforObjectives.Thesearethesubgoals,orsteps,youwillhavetotaketoachieveyourgoals.Theyareliketherungsontheladdertogettothetop.

Yourbusinessobjectivescanbespecificratesofreturnfromadvertising,levelsofsalesofcertainproductsandservices,numberofitemsshippedandbilled,moniescollected,andcostlevelsforcertainactivities.Alowerdefectrateorahighersaleamountpercustomercanbeobjectivesonthepathtoachievingthemaincorporategoals.Whatareyourinterimobjectives?

HowtoGetThere

Theletter"S"standsforStrategies.Thesearethedifferentapproachesyoucantaketoachieveyourobjectivesandreachyourgoals.Forexample,achievingaspecificlevelofprofitabilitywillrequireproducingandsellingspecificquantitiesofproductsorservicestoaspecificmarketinaspecificway.Therearemanydifferentwaystogoaboutaccomplishingtheseobjectives.Thewayyouchooseisyourstrategyandmaydeterminethesuccessorfailureofyourenterprise.

Doyouproduce,market,sell,anddeliveryourself,ordoyououtsourcesomepartoftheprocess?Doyouselldirect,viaretail,directmail,catalog,ortheInternet?Doyouchargemore,chargeless,up-sell,cross-sell,ordiscount?Doyouentercertainmarketsandabandonothers?Whatisyourstrategy?Isitworking?

PlanningforSuccess

Theletter"P"standsforPlans.Theseareyourblueprintsforachievingyourgoals.Yourplansarecomposedofstep-by-steplistsofexactlywhatyouwilldo,daybyday,togetfromwhereveryouaretowhereveryouwanttogo.Plansarealwaysbrokendownbysequenceandpriority.

Somethingshavetobedonebeforeotherscanbedone.Somethingsaremoreimportantthanothersinachievingthegoalorobjective.Whenyourplanisorganizedbysequenceandpriority,youcanaccomplishmuchmoreinlesstime.

Businesslifeconsistsalmostentirelyofprojects,oneaftertheother.Aprojectcanbedefinedasamultitaskjob,ajobmadeupofmanysmalljobs,eachofwhichhastobedoneproperlytocompletethelargertask.Yourabilitytoplan,organize,andcompleteeverlargerandmorecomplexmultitaskjobsisthesinglemostimportantelementofyoursuccessinanyfield.

DevelopaBiasforAction

ThelastletterintheGOSPAprocess,"A,"standsforActions.Thesearethespecifictasksthatyouaregoingtocompletetocarryouttheplanstoimplementthestrategiestoaccomplishtheobjectivestoachieveyourgoals.

Everyimportanttaskmustbeclear,measurable,andtime-bounded.Itmustbeassignedtoaspecificpersonwhoisqualifiedtoperformthetaskcorrectly,ontime,andonbudget.Whatgetsmeasuredgetsdone.

FocusonProfitabilityThecentralpurposeofTurbostrategyistoboostyourcashflowandprofitsandincreaseyourreturnonthemoneyinvestedinyourbusiness.Theaimofthestrategyistogenerateahigherlevelofcashflowandprofitabilitythanyouwouldrealizewithoutthestrategyorwithyourpreviousstrategy.Inshort,itistomakemoremoneythanyouaremakingrightnowfromthewaythatyouaredoingbusinesstoday.

Theessentialresourcesofpeople,money,andtalentthatyouneedtosucceedinyourbusinessarealwayslimited.Theymustbefocusedandconcentratedformaximumresults.Thisiswhatagoodstrategyenablesyoutodo.

FourWaystoImproveYourBusinessSettingstrategyrequiresmakingharddecisionsinfourareas:First,youmustdecidewhatyouaregoingtodomoreof.What'sworking?Whatissellingwell?Whatproducts,services,andactivitiesarethemostprofitable?

Second,youmustdecidewhatyouaregoingtodolessof.What'snotworking?Whatcontributesverylittletogrowthandprofitability?Whatshouldyoudiscontinueoreliminatebasedontherealitiesoftoday'smarketandtoday'scustomers?Whatcanyoudotoreducecostsinareaswheretheycontributeverylittletoresults?

Third,whatareyougoingtostartdoingthatyou'renotdoingtoday?Whatnewproducts,services,oractivitiesshouldyouintroduceifyouwanttoincreaseyoursalesandprofitabilityorimproveandstreamlineyouractivities?

Finally,whatareyougoingtostopdoingaltogether?Remember,thecriticalresourcesoftimeandmoneyarealwaysscarce.Theonlywayyoucanimproveresultsisbydiscontinuingcertainactivitiesaltogether.Youcanthenchannelthoseresourcesintoareaswheretheyyieldhigherlevelsofbusinessresults.

Clarityisthekeytostrategicsuccess.Themoretimeyoutaketobeabsolutelyclearaboutwhoyouareandwhatyouwanttoaccomplish,themoresuccessfulandprofitableyouwillbe.

DecideExactlyWhatYouWant1. Whatareyourspecific,measurablelong-termgoalsforsales

andprofitabilityinyourbusiness?Writethemdown.

2. Whatarethespecificobjectivesofsales,staffing,production,delivery,andcustomerdevelopmentthatyouwillhavetoachievetoaccomplishyourgoals?

3. Whatarethevariouswaysthatyoucanmeetyourobjectivesandachieveyourgoals?Whatisthebeststrategyforyouintoday'smarket?

4. Whatshouldyoudomoreofandreallyfocusontoincreaseyoursalesandprofitability?

5. Whatshouldyoudolessof,basedonyourcurrentexperience?What'snotworking?

6. Whatshouldyoustartdoingthatyouarenotdoingtoday?Whatopportunitiesareavailabletoyou?

7. Whatshouldyoudiscontinue,andstopdoingaltogether,sothatyoucanfreeupresourcesformoreprofitableactivities?

Chapter5:DesignYourIdealFutureWehavebeenendowedwiththecapacityandthepowertocreatedesirablepictureswithinandtofindthemautomaticallyprintedintheouterworldofourenvironment.--JohnMcDonald

Sometimeago,Iconductedastrategicplanningsessionfortheseniorexecutivesofa$172billioncompany.Theorganizationwasgoingthroughaperiodofconsiderableturbulencecausedbychange,competition,andnewgovernmentregulation.Therehadbeenlayoffs,firings,downsizing,anddivestments.Myclientswerethetopexecutiveswhohadsurvivedtherecentturmoil,andthebloodlettingwasnotyetover.Inthesecircumstances,theywerebothworriedaboutthefutureanddistractedinthepresent.

CreateaFive-YearFantasyTogetthemcenteredandfocused,IbeganthestrategysessionwithaprocessthatIcall"idealization."Inthisprocess,whichyoucanuseyourself,Ihadthemembersofthetopteamcreatea"five-yearfantasy."

"Let'sputasidethecurrentsituationforthemoment,"Isuggested."Instead,tellmewhatthiscompanywouldlooklikefiveyearsfromnowifitwereperfectineveryrespect?"

Thisexerciseforcedthemtotaketheirattentionawayfromtheproblemsofthepresentandfocustheirthinkingonthepossibilitiesofthefuture.

Aswewentaroundtheroom,eachpersoncontributedanideaaboutwhatthecompanywouldlooklikeifitwereperfect.Iwroteeachideaonaflipchartandtapedthepagesontothewallswhereeveryonecouldseethem.Inlessthanhalfanhour,wegeneratedtwenty-sevenidealdescriptions.

Wethenvotedontheseidealizedgoalsandorganizedthembypriority.Weendedupwithaseriesofclearobjectives,includinghighlyprofitable,tremendousmarketreputation,highstockprice,topleadership,fabulouscustomerservice,greatplacetowork,bestmanagement,rapidgrowthrate,andtopreputationintheindustry,amongothers.

ThinkinTermsofPossibilitiesIthenaskedthem,"Arethesegoalspossible?"Onebyone,theyagreedthatallofthesegoalswerepossibleinfiveyears.Theymightnotbeachievableinoneortwoyears,butinfiveyears,everyoneofthemcouldbeaccomplishedwithwillanddetermination.

Wecameoutofthatsessionwitheveryonerevitalizedandcommittedtoworkingonachievingoneormoreofthosefive-yearfantasies.Overthenexttwoyears,thecompanycompletelyreorganized.Theydidmoreofsomethingsandlessofothers.Theystarteddoingthingsthattheyhadnotdoneinthepast,andtheystoppedcertainactivitiesaltogether.Theytookcompletecontroloftheircorporatedestinyandchangedit.

ThinkAbouttheFutureFuture-orientationisakeyelementofstrategicplanningandstrategicthinking.Itisamajorresponsibilityofleadershipandtoppeopleineveryarea.Onlytheleadercanthinkaboutthefuture.Onlytheleadercanplanforthefuture.Thereisnooneelseintheorganizationwhocandoit,andiftheleaderdoesnotthinkaboutandplanforthefutureasanongoingpartofhisjob,itwillnotbedone.AstheysayinAlaska,"Onlytheleadsleddogevergetsadifferentview."

Howoftenandhowwellthetoppeopleinthecompanythinkaboutthefuturearethefactorsthatlargelydeterminethesuccessorfailureofthebusiness.Ifyoudon'tknowwhereyou'regoing,anyroadwilltakeyouthere.

Thedevelopmentofthequalityoffuture-orientationrequiresthatyoucreateanidealimageofyourcompanysometimeinthefuture.Youprojectforwardthreetofiveyearsinyourmindandimaginethatyourcompanyisperfectineveryrespect.Youdecideexactlyhowmuchyouwouldbesellingandearningatthattime.Youimagineyouridealstockprice,youridealreputationinthemarket,youridealworksituation,andyouridealhumanenvironment.

Back-from-the-FutureThinkingOnceyouhaveaclearpictureofyouridealfuture,youreturnmentallytoyourcurrentsituationandthinkaboutwhatyouwouldhavetodo,startingtoday,toturnyourfuturevisionintoacurrentreality.Thisiscalled"back-from-the-futurethinking."

Makealistofallthethingsthatwouldhavetohappenforyoutorealizeyourfantasysometimeinthefuture.Itisamazinghowyourperspectivechangeswhenyoulookbackfromthefuture,exactlyasifyouwerelookingbackfromthetopofthemountainatyourselfdowninthevalleyandseeingtheexactrouteyouwouldhavetofollowtogettothetop.

LeadersHaveVisionIn3,300studiesofleadersreviewedbyJamesMacPherson,searchingforthecommondenominatorsofleadershipthroughouttheages,theonequalitythatalltheleadershadincommonwasvision.Leadershavevision;non-leadersdonot.

Becomingavisionaryrequiresthatyoudeveloptheabilitytoimagine,define,articulate,share,andinspireotherpeoplewithanexcitingpictureofthefuture.Yougeteveryoneinyourbusinesscommittedtofulfillingthisvisionandtoworkingtowarditeveryday.Thisisthekeytoleadershipandtobuildingagreatcompany.

Aristotlewrote,"Webecomewhatwerepeatedlydo."Youbecomealeaderbythinkingthewayleadersthink,bothinyourbusinessandinyourpersonallife.Youbecomealeaderbythinkingaboutthefutureandabouthowyoucanmakeitapresentreality.

CreateanExcitingPictureTheBiblesays,"Wherethereisnovision,thepeopleperish."Thisdoesn'tmeanthattheyliedownanddie.Itjustmeansthattheyloseheart.Theylosetheircommitmentandenthusiasmforgivingoftheirbest.Whentheirmanagersdonotclarifyandarticulateanexcitingvisionforthecompany,peoplejustgothroughthemotionsatwork,doingonlywhattheyneedtodotokeeptheirjobs.

Unfortunately,manycompanieshavenovisionatall.Theymayhavestartedwithanexcitingvisionofaccomplishingsomethingthathadneverbeendonebefore,butovertime,buffetedbythewavesofaturbulentmarket,theyhavelostsightoftheirreasonforexistence,whichistomakeameaningfuldifferenceinthelivesandworkoftheircustomers.

Insteadofcontinuouslydefiningandarticulatingthecompany'svision,thekeydecision-makersbecomefocusedonday-to-dayoperations.Theythinkonlyaboutsurvival.Theyevensaythattheydon'thavetimefor"thevisionthing."Theyaretoobusyfightingfires.

Now,MoreThanEverButitisintimesofrapidchange,andturbulenceinthemarket,thatanexcitingvisionofthefuturebecomesmoreimportantthateverbefore.Avisioncanbecometheforcethatbindspeopletogetherintoasolidteam.Itcangivemeaningandpurposetowork,evenwhentimesaretoughandpayincreasesarenotpossible.

Therearemanywaysyoucanapproachthedevelopmentofavisionforyourorganization.Perhapstheverybestvisionforyourcompanyincludestwokeycomponents.First,itisfocusedonyourcustomersandondoingsomethingforthemthatchangesandimprovestheirlivesorworkinsomeway.Second,itcontainsacommitmenttoexcellence,tobeingtheverybestatdoingwhateveryoudoforyourcustomers.Thesearethekeystovision.

Yourvisionisto"bethebest!"atthemostimportantthingyoudoforyourcustomers.Yourvisionistoserveyourcustomersinsuchawaythatyouareseenassuperiorinaparticularproduct,service,oractivity.Imaginethatyoucouldbeknownasoutstandinginanyonethingthatyoudoforyourcustomers.Whatwoulditbe?Youranswercanbethestartingpointofavisionforyourbusinessthatchangesyourfuturecompletely.

YourPersonalVisionYouneedavisionforyourselfaswell.Projectforwardfiveyearsinyourimagination.Ifyourfuturewereperfectineveryway,whatwoulditlooklike?Ifyourincome,yourpositioninyourcompanyorfield,yourfamilylife,yourhealth,yourjob,andeverypartofyourlifewereidealineveryway,howwoulditbedifferentfromtoday?

Onceyouareclearaboutyourvision,foryourselfandforyourbusiness,theonlyquestionyouaskis,"HowdoImakeitareality?"Toppeoplethinkcontinuouslyintermsofhow?Theythinkintermsoftakingaction,ofwhatcanbedone.

Onceyouhaveclarifiedyourvisionanddeterminedwhatyouwillhavetodotomakeitareality,youthendosomethingeverydaytomoveyoutowardthecreationofyouridealfuture.Youtakecompletecontrolofyourdestiny.AsDruckerwrote,"Theverybestwaytopredictthefutureistocreateit."Andthestartingpointisvision.

DesignYourIdealFuture1. Whatisyourvisionforyourcompany?Projectforwardand

imaginethatyourbusinesswereidealineveryway.Whatwoulditlooklike?

2. Whatisyourvisionforyourself?Ifyourlifeandcareerwereidealineveryway,whatwouldtheylooklike?

3. Idealizeineachareaofyourbusiness.Ifyourproducts,services,sales,andprofitabilitywereperfect,whatwouldtheylooklike?

4. Idealizewithregardtoyourpeople.Ifyourstaffwereidealintermsofskills,abilities,personalities,andresults,howwouldtheybedifferentfromwhattheyaretoday?

5. Imaginethatamajormagazineweregoingtowriteastoryaboutyourcompany.Whatwouldyouwantthemtosay?

6. Projectforwardfiveyearsandthenlookbacktotodayfromthatvantagepoint.Whatwouldyouhavetochangetodaytocreateyouridealfuture?

7. Inwhatoneareawoulditbemosthelpfultosalesandprofitabilityifyourcompanywerewidelyknownas"thebest?"Whatstepscouldyoutakeimmediatelytobeginearningthatreputation?

Chapter6:CreateaMissionStatement

OverviewIfoneadvancesconfidentlyinthedirectionofhisdreams,andendeavorstolivethelifewhichhehasimagined,hewillmeetwithasuccessunexpectedincommonhours."--HenryDavidThoreau

ViktorFrankl,asurvivorofAuschwitzandthefounderofLogotherapy,concludedafteralifetimeofresearchandexperiencethatthedeepestneedofeachpersonisformeaningandpurposeinlife.Thisisequallytrueforanorganizationmadeupofdifferentpeoplewithdifferentbackgrounds.

Amissionstatementisessentialforyourcompanybecauseitgivesthepeopleinthecompanythissenseofmeaningandpurpose.Amissionstatementgivesguidanceanddirection.Itinspiresloyaltyandcommitment.Ittellspeoplewhatyouareandwhatyoustandfor.Itgivesareasonandafocusforcorporateactivitiesanddailywork.

YourDeclarationofPurposeYourmissionstatementisanexpressionofthecompany'saspirationsandthepurposesforwhichthecompanyexists.Itisapresent-tensedeclarationofwhatthecompanywantstobecomeandwhatitwantstoaccomplishsometimeinthefuture.Itisanidealexpressionofyourreasonsforbeinginbusinessinthefirstplace.

Yourmissionstatementemergesfromthevisionandvaluesofyourbusinessandthendescribesthefutureintangibleterms.Agoodmissionstatementcontainsameasureofsomekindsothatyoucantellwhetherornotithasbeenachievedandwhatprogressyouaremaking.

DetermineYourValuesYoubeginthedevelopmentofamissionstatementbydeterminingyourvalues.Avalueisanorganizingprinciplearoundwhichyoubuildyourlifeandmakeyourdecisions.Yourvalueslieattheverycoreofyourbeinganddefineyouasaperson.Overtime,yourouterworldbecomesareflectionofthepersonyoureallyareinside.AstheOldTestamentsays,"Ashethinkethinhisheart,soishe."

Oneofthemajordifferencesbetweenpeoplewhosucceedgreatlyinbusinessandaverage,orbelowaverage,peopleinbusinessisthattoppeopleareveryclearabouttheirvalues.Theyknowwhotheyareandwhattheystandfor.Theyalsoknowwhattheywillnotstandfor.Theyhaveastrongsenseofrightorwrong.Theyareconfidentanduncompromisingwhenitcomestomakingdecisionsbasedontheirvalues.

Whatareyourvalues?Whatarethethreetofivevaluesthatyourcompanybelievesinandstandsfor?Inmystrategicplanningworkwithmanycorporations,thesamevaluesseemtoemergeoverandover.Themostcommonlyheldvaluesinbusinessareintegrity,quality,excellence,customerservice,caringaboutpeople,profitability,innovativeness,andhighself-esteem.

ABusinessandItsBeliefs

InhisbookaboutIBM,ABusinessandItsBeliefs,ThomasJ.Watson,Jr.givesthethreefoundingvaluesofIBMas"Excellence,QualityService,andRespectforPeople."ThesethreevalueshavebeentheguidingprinciplesofIBMsinceitsfirstdayinbusiness.YoucouldmakealmostanymistakeinyourcareeratIBMaslongasyoudidnotviolateoneofthevalues.EveryonewhoworkedatIBMtookprideinlivingandpracticingthesevaluesatworkandwiththeircustomers.TheywereinstrumentalinmakingIBMagreatcompany.

Onceyouareclearaboutyourvalues,youdefinewhateachofthemmeansintermsofactionsandbehaviors.Forexample,ifyourvalueisintegrity,youcoulddefineintegrityasfollows:Wetreateveryoneinside

andoutsidethecompanyinanhonestandstraightforwardway,andwealwaysstrivetodevelopandmaintainareputationforfairdealingwithemployees,customers,suppliers,bankers,andgovernmentagencies.

Thereafter,wheneveryouhavetomakeadecisioninwhichthevalueofintegrityisakeyfactor,yourevisityourvaluestatementandfollowitsguidelines.Aclientofmineoncesaidsomethingquiteprofound,whichIneverforgot,"Integrityisnotreallyavalueinandofitself.Itisratherthevaluethatguaranteesalltheothervalues."

BuildonaSolidFoundationOnceyouareclearaboutyourvalues—andyoudon'treallyneedmorethanthreetofivevaluestostart—youcraftamissionstatementbasedonthem.Thisstatementexpresseswhatyouwanttobecomeandaccomplishandhowyouwillbehaveinthefulfillmentofyourmission.

Hereisanexampleofamissionstatement:Weareahigh-integritycompany,devotedtoourpeopleandourcustomers,andourmissionistobethenationalleaderinsalesandprofitabilityofhigh-qualitysecuritysystemsfortheAmericanhouseholdandfamily.

Everymissionstatementmusthaveameasureofsomekindagainstwhichyoucangaugeyourprogress.Ifyourgoalisto"bethenationalleader,"youmustdeterminehowmuchyouwillhavetoselleachmonthandeachyearinordertobenumberoneinyourindustry.

WhenbothLexusandInfinitienteredtheU.S.carmarket,theirindividualmissionsweretobecomenumberoneintheJDPowerCustomerSatisfactionSurvey.Withinthreeyearsofenteringthemarket,LexusandInfinititiedforthefirstplaceintheJDPowerawards.Theyachievedtheirgoalsandfulfilledtheirmissions.

InvolveOtherPeopleThemorepeopleyoucaninvolveincraftingandeditingthemissionstatement,thegreatercommitmentandloyaltytheywillhavetolivingbyit,daybyday.Holdmeetingswhereemployeescontributetheirideasandopinionsaboutcompanyvalues.Discussandvoteonthesevalues,selectingtheonesmostpopularandimportanttoeveryone.Craftyourcompanymissionstatementtobeconsistentwiththekeyvaluesthatyouremployeesbelievein.

Onceyourmissionstatementisdeveloped,youcanputiteverywhereasastatementtopeople,bothinsideandoutsidethecompany,ofyourvision,values,meaning,andpurpose.YoucanpublishitinyourpromotionalmaterialsandputitonyourWebsite.Youcanholditupasanobjectofpride.

TheFortunate500WhenKenBlanchardandNormanVincentPealegottogethertocreatewhattheycalled"TheFortunate500,"theystudiedcompaniesfrommanydifferentindustries.Theydiscoveredthatthecompaniesineachindustrywhichhadwrittenstatementsoftheirvalues,andmissionstatementsthateveryoneinthecompanyknew,wereconsistentlymoreprofitablethanthosecompaniesthatdidnothavevaluesatall,ordidnothavetheminwriting.

Companieswithclearvaluesandwrittenmissionstatementsseemtooperatemoreefficiently,treateachotherandtheircustomersbetter,achievegreatercustomerloyalty,finditeasiertoborrowmoney,andgenerallydobetteringoodtimesandbad.

CreateYourPersonalMissionStatementAsanindividual,youshouldhaveapersonalandfamilymissionstatementaswell.Youshouldhaveaclearideaofwhatyoubelieveinandstandforandwhatyouarededicatedtoaccomplishingwithyourlifeandforyourfamily.Thisshouldbeinwritingandshouldberegularlyrevisedandupdatedasyourfamilylifeandsituationchange.Itcanmakeawonderfuldifferenceinyourlife.

CreateaMissionStatement1. Determineyourpersonalreasonsfordoingwhatyoudo.What

givesyouasenseofmeaningandpurposeinlife?

2. Decideuponthethreetofivekeyvaluesuponwhichyourcompanyisbased.Involveotherpeopleinthediscussion.

3. Definetheactionsandbehaviorsthatpeoplewillengagein,bothinsideandoutsidethecompany,thatareconsistentwithyourvalues.

4. Designamissionstatement,anidealdescriptionofwhatyourcompanywantstoaccomplishforitscustomerssometimeinthefuture.

5. Writeoutalistofyourvalues,andwhattheymean,plusyourmissionstatement,andsharethemwithyourstaffandcustomers.

6. Createapersonalmissionstatementforyourcareer.Whatdoyouwanttoaccomplish,andhowdoyouwanttobeknown?

7. Createamissionstatementforyourselfandyourfamily.Whatisitthatyouwanttoaccomplishorachievewithyourfamilyintheyearsahead?

Chapter7:ReinventYourOrganization

OverviewEverymanofgeniusseestheworldatadifferentanglethanhisfellows…"--HavelockEllis

JackWelchofGeneralElectriconcesaid,"Iftherateofchangeoutsideyourorganizationisgreaterthantherateofchangeinsideyourorganization,thentheendisinsight."

Intimesofturbulence,youshouldbepreparedtoreinventyourbusinessasoftenasnecessaryasyourexternalworldchanges.Asanexercise,imaginethatyouwerestartingyourbusinessoveragaintoday.Whatwouldyougetinto?Whatwouldyounotgetinto?

BundleofResourcesForgreaterperspective,standbackandviewyourbusinessasabundleofresourcesandcapabilities,likeafirehoseoftalentandabilitythatcanbeaimedinmanydirectionstoachievedifferentresults.Insteadoflimitingyourselftoseeingyourbusinessasanorganizationthatisdesignedtoperformspecificfunctions,producingandsellingcertainproductsandservices,thinkofitasbeingcapableofdoingavarietyofthingsthatarecompletelydifferentfromwhatyouaredoingtoday.

TheGreatFireAsyouthinkaboutreinventingyourbusiness,imaginethatyourcompanyburnedtothegroundwhileyouwereaway.Whenyouarriveatthescene,youfindthatallyourstaffaresafeandstandingintheparkinglot.

Asithappens,thereisunoccupiedofficespaceavailableacrossthestreet.Youcanimmediatelymoveintothenewspaceandstartyourbusinessanew.Hereisthequestion:Whichofyourproductsandserviceswouldyoubeginproducinganddistributingrightaway,andwhichoneswouldyounotstartupagain,knowingwhatyouknownow?

ExamineEveryRelationshipIfyouwerestartingyourbusinessoveragaintoday,completelyfreefromanyencumbrancesofthepast,whichcustomerswouldyoucallfirst,andwhichoneswouldyounotcallatall?Whichvendors,suppliers,bankers,orotherpeoplewouldyouimmediatelygetintouchwith,andwhomwouldyoucalllater,ifatall?Whatwouldyoudofirst?Whatwouldyoudosecond?Whatwouldyounotstartupagain,knowingwhatyouknownow?

ReinventYourStaffRelationshipsNow,let'sgobacktotheparkinglot.Letusassumethatallofyourpeoplearesafeandstandingaroundwaitingforinstructions.Whichofthemwouldyoutakeacrossthestreetwithyoutothenewbusiness,andwhichoneswouldyouleaveintheparkinglot?Whowouldbethefirstandmostimportantpersonwhoseservicesyouwouldwanttosecure?Whowouldbethesecondmostimportant?Whowouldbethird?Andsoon.

ExamineYourOrganizationIfyoucouldreinventyourbusiness,whatwouldyoudomoreof?Whatwouldyoudolessof?Whatwouldyoustartdoingthatyouarenotdoingtoday?Whatwouldyoustopdoingaltogether?

Inreinventingyourorganization,askyourself,"Whataremymostimportanttalents,skills,abilities,andcorecompetencies,andwhatelsecouldIdowiththem?Whoaremybestpeopleandwhatelsecouldtheydo?"

Keepthinkingabouthowyouwouldreinventyourbusinessifyouwerestartingover.Thiswillkeepyouonthecuttingedgeofcreativityandinnovation.

ThinkinTermsofExcellenceThekeyquestionsinreinventionare,Whatcouldyoubeabsolutelyexcellentatdoingintoday'smarket?Wherecouldyoubethebest?Wherecouldyouachieveworld-classquality?Wherecouldyoubebetterthan90percentofyourcompetitors?

Themarketonlypaysextraordinaryrewardsforextraordinaryproductsandservices.Whereandhowcouldyoudowhatyoudoinanextraordinaryfashion?

ReinventYourCareerFinally,thinkaboutreinventingyourselfandyourcareeronaregularbasisaswell.Ifyouwerestartingoveragaintoday,whatwouldyoudomoreoforlessof?Whatwouldyoustartorstop?Whatwouldyougetinto?Whatwouldyougetoutof?

Ifyouwerestartingyourcareeroveragain,whatadditionalknowledgeandskillswouldyouwanttohave?Whatcanyoudo,startingtoday,toacquirethosekeyskills?Imaginethatyoucoulddoavarietyofjobs.Whatwouldyoureallyliketodowithyourlife?

Sinceyouaregoingtohavetoreinventyourselfregularlythroughoutyourcareer,itisveryimportantthatyouthinkabouthowyouwoulddoitwellinadvanceofwhenitbecomesnecessary.

ReinventYourOrganization1. Ifyouwerestartingyourbusinessoveragaintoday,whatwould

youdodifferently?

2. Ifyouwerestartingyourcareeroveragaintoday,whatwouldyougetintooroutof?

3. Ifyourbusinessburnedtothegroundandyoucouldofferonlyoneofyourproductsorservices,whichonewoulditbe?

4. Whoareyourmostimportantcustomers,theonesyouwouldimmediatelymovetotakecareof,ifyouwerestartingover?

5. Whoareyourmostimportantpeople,bothinsideandoutsideofyourbusiness?

6. Whatareyourmostimportantcontactsandbusinessrelationships,theonesyouwouldmostwanttopreserveifyouwerestartingover?

7. Ifmoneywerenoobject,whatstepswouldyoutaketodaytoreinventyourbusiness?

Chapter8:SelecttheRightPeople

OverviewHereliesamanwhoknowshowtoenlistintohisservicepeoplebetterthanhimself.--AndrewCarnegie'sEpitaph

Thepeopleinyourcompanyarethemostimportantpartsofyourbusiness.Allwork,allperformance,allresultscomefromthem,bothasindividualsandwhentheyworktogetherinteamsofsomekind.Themanager'soutputistheoutputofhisorherteamandoftheindividualteammembers.

Inbusiness,peoplecomefirst.Jobs,activities,andresultsareonlyachievedaftertherightpeopleareinplace.JimCollinssaysinGoodtoGreatthatthekeytobuildingagreatbusinessis"first,gettherightpeopleonthebus,andsecond,getthewrongpeopleoffthebus."Anyotherapproachisboundtofail.

TwoKeyQualitiestoLookForThebestpeoplehavetwoqualities.First,theycanbecountedontogetthejobdone,togetitdonewell,andtogetitdoneinatimelyfashion.Second,theygetalongwellwithothers.Theyaregoodteamplayers.

Youshouldapplyzero-basedthinkingtoeachpersonwhoreportstoyouonaregularbasis.Continuallyask,"KnowingwhatInowknow,wouldIhire,assign,orpromotethispersonagain,ifIhadittodoover?"

Iftheansweris"No,"yournextquestionis,HowdoIremoveorreplacethisperson,andhowfastcanIdoit?"

HireSlowlyInpickingtherightpeopletobeapartofyourteam,selectthemcarefully.Takeyourtime.HarveyMcKay,inhisbookSwimWiththeSharksWithoutBeingEatenAlive,tellsaboutinterviewingthirty-fivepeopleforasalespositionandthendecidingtohirenoneofthembecausehehadnotyetfoundtheidealcandidate.Sometimesthebestpeopledecisionsaretheonesyoudon'tmakeinthefirstplace.

Inpolitics,theysay,"Peoplearepolicy."Thisistrueinprivatebusinessaswell.Thepeopleyouselectareanexpressionofyourpersonalvaluesandphilosophy.Yourpeoplechoicestelleveryonearoundyouwhatkindofcompanyyouhaveandwhatkindofmanagementyouarebuildingforthefuture.Takeyourtime.

Thoughtfulnessisakeyqualityofexcellentexecutives.Thisisespeciallytruewhenpickingpeopletofillimportantslots.Youcandramaticallyincreasethequalityofyourhiringdecisionsbytakingampletimeupfronttothinkthroughthejob.

ThinkThroughtheJobBeginbydefiningthejobintermsoftheexactoutputsandresultsrequired.Thinkofthejobasapipeline,withtime,money,andresourcesgoinginoneend,andspecificresultscomingouttheotherend.Whatdoyouwantandneedthoseresultstobe?

Onceyouareclearabouttheresultsyoudesire,setspecificmeasuresofperformanceoneachjobandeachtask.Howwillyouandthecandidateknowwhetherornotthejobhasbeendoneproperly?Remember:Whatgetsmeasured,getsdone.And:Ifyoucan'tmeasureit,youcan'tmanageit.

ExaminePastPerformanceOnceyouareclearabouttheresultsyouexpectandthestandardsofperformanceyouwillusetomeasuresuccessinthefulfillmentofthejob'sresponsibilities,youcandeterminetheexactskillsandabilitiesthecandidatewillhavetohavetogetthoseresults.And,asPeterDruckersays,"Theonlytruepredictoroffutureperformanceispastperformance."

Whenapplyingforajob,mostpeoplejudgethemselvesintermsofwhattheythinktheycandointhefuture.Butthisisnotaluxuryyoucanafford.Youmustbedisciplinedinfocusingonwhatthepersonhasalreadydonesuccessfully.Thisshouldbeyourprimaryconsiderationinmakinganyhiringdecision.

TheLawofThreeThereisapowerfulprincipleyoucanusetoincreaseyourlikelihoodofmakingbetterhiringdecisions.Thismethodslowsdowntheprocessandimprovesthequalityofyourultimatechoices.Itissimple,powerful,andincrediblyeffective.Icallitthe"LawofThree."

First,beforeyoudecidetohireaperson,interviewthecandidateatleastthreetimes.Thefirsttimeyouinterviewaperson,shewilllookandsoundtheverybestshewilleverbe.Sinceweareallprimarilyemotional,weareoftenoverlyinfluencedbyanattractivecandidate,eventothepointofimpulsivelymakingahiringdecision.Keepremindingyourselfthatfasthiringdecisionsareusuallywronghiringdecisions.

Second,andinconjunctionwiththeabove,onceyoudecidethatyoulikeaparticularcandidate,interviewthepersoninthreedifferentplaces.Acandidatewhoshinesinyourofficeduringthefirstinterviewmaybegintofadeduringthesecondinterviewdownthehallinameetingroomoracrossthestreetoveracupofcoffee.

HireinHaste,RepentatLeisureEarlierinmycareer,thepresidentofalargecompanytentativelyofferedmeapositionofconsiderableresponsibility.Butbeforehemetwithmetodiscusssalaryandmyjobdescription,hesuggestedthatItakeadrivewithhimtohisworkingfarmoutsidethecity.Weendedupspendingaboutthreehoursdrivingoutthereandwalkingaroundthefarm,chattingcasuallythewholetime.Attheendofthis"interview,"heofferedmethejob.Thiswashiswayoftakingenoughtimeto"getafeel"forhowheandIwouldgetalonglater.

AStrollintheParkSomeyearslater,Iwasnegotiatingtoconductastrategicplanningsessionwiththepresidentofabillion-dollarcompany.Allthekeyexecutivesofthecompanywouldbebroughttogetherforthreedaysatadistantresort.Thefutureofthecompanywouldbediscussedindepth.

Suddenly,hestoodupandsaid,"Let'sgoforadrive."

Hetoldhissecretarytohavethecarpickusupinfrontofthebuilding.Hetheninstructedthedrivertodropusoutsidethecitypark.Wegotoutandwentforawalklastingalmostanhour,chattingaboutfamilyandphilosophy,lookingattheflowers,juststrollingaround.Attheendofthewalk,hesaid,"Okay.It'sadeal.Let'smakethearrangements."

Wedrovebacktotheoffice,finalizedtheagreement,andeverythingworkedoutwell.Again,thiswashiswayofdoinga"gutcheck"onmeandtheworkIcoulddoforhisorganization.

NeverDecideAloneOnceyouhavemetwiththepreferredcandidatethreetimesandhavemetwithhimorherinthreedifferentplaces,thenextpartoftheLawofThreeisforyoutohavethreeotherpeopleinterviewtheperson.Neverrelysolelyonyourownjudgment.Alwaysinvitetheopinionsofothers,especiallyotherswhowillbeworkingwiththecandidateifyoushouldhirehim.

Sometimes,apersonwholooksgoodtoyouwillrevealaspectsofhispersonalitytopotentialcoworkersthathecoversupwithyou.Inmanycases,IhavehadmystaffrejectapersonwhoIthoughtwasidealforthejob.Ihaveneveroverriddena"thumbsdown"frommystaff,andI'veneverregrettedit.Theyhavesavedmefrommyselfmanytimes.

CheckReferencesCarefullyFinally,afterthreeinterviews,inthreeplaces,andwiththreedifferentpeople,checkatleastthreereferencesbeforeyoumakeafinaldecision.Ifthepreviousemployerwillnotgiveyouanyinformationforfearoflegalproblems,thereisonequestionyoucanalwaysask:"Wouldyouhirethispersonbackagain?"

Iftheanswerisnotanunequivocal"Yes!"proceedwithcaution.Askthecandidatewhythepreviousemployerwouldnothirehimback.Listencarefullytotheanswer.Itmaybedecisive.

GofortheGoldWhenseekingapersonforanimportantposition,lookforan"outperformer."Lookforsomeoneyoulikeandwhoyoufeelcandothejobreallywell.Refusetosettleforanyonelessthanwhatyouconsidertobetheidealperson.Onlyhiresomeonewhofitsin,andsomeonearoundwhomyoucanbuildyourdepartmentoryourbusiness.

Lookforteamplayers,peoplewhoworkwellwithothers.Lookforthedemonstratedabilitytoperformandexecute,togetthejobdonewithoutsupervisionorday-to-dayhands-onmanagement.

ClarityandConsiderationOnceyouhireaperson,startheroffstrong.Tellherexactlywhatyouwantdoneandhowyouwillmeasureit.Workwithherpersonally,orassignsomeoneelsetoworkwithheruntilshegetsherfeetontheground.Thebadolddaysof"sinkorswim"aregoneforever.Humanassetsaretooprecioustosquander.

Theprimaryreasonforlowmotivationandpoorperformance,assumingthattheindividualhastheabilitytodothejob,islackofclarityregardingtheresultsexpected.Theprimaryreasonforhighmotivationandexcellentperformanceisabsoluteclaritywithregardtotheresultsexpected.

Inturbulenttimes,withrapidanddiscontinuouschangeallaroundyou,youshouldcontinuallyrevisitthejobdescriptionandtheresultsexpectedofeachperson.Neverassumethateveryonestillknowsexactlywhatitisthatyouwantorneed.

Thereisadirectrelationshipbetweenmotivationandcommitmentontheonehand,andtheopportunitytodiscussthejobontheother.Themoreyouinvolvepeopleindiscussionsabouttheirwork,themoremotivatedtheywillbe,andthebettertheywilldothejob.

SelecttheRightPeople1. Rankeveryoneinyourcompanyonascalefromonetoten,

withtenbeingthehighest,ontheircompetenceattheirjob.

2. Resolvetobuildateamofhighlymotivated,competent,andpositiveemployeestohelpyougettheresultsyouneed.

3. Thinkthrougheachnewjoborhirecarefullyinadvance.Writeoutthedescriptionclearly.

4. Interviewatleastthreecandidatesforanewposition.Interviewthecandidateyoulikeatleastthreetimes,inthreedifferentplaces,andhavehimorherinterviewedbyatleastthreeotherpeople.

5. Checkreferencescarefully.Seekthefatalflaworweaknessthatcouldmakethecandidateunsuitable.

6. Hireonlypositive,likablepeople;theymakethebestteamplayers.

7. Resultsareeverything.Continuallyemphasizeandexplainexactlywhatresultsareexpectedfromeachperson.

Chapter9:MarketMoreEffectively

OverviewBecauseitspurposeistocreateacustomer,thebusinessenterprisehastwo—andonlythesetwo—basicfunctions:marketingandinnovation.Marketingandinnovationproduceresults;alltherestarecosts.--PeterDrucker

Allbusinessstrategyisultimatelymarketingstrategy.Wheneveryouareworriedaboutthehealthorfutureofyourbusiness,getbacktothinkingaboutmarketingandselling.Focussingle-mindedlyonincreasingsalesandrevenues.Cuttingexpensesandcontrollingcostsisanongoingnecessity,butyoucan'tcost-cutyourwaytobusinesssuccess.Youhavetoincreasecashflow,andthisonlycomesfromsellingmoreofyourproductsorservices.

Nomatterhowchallengingorcompetitivetheeconomyappears,asmuchas80percentofyourmarketisstilluntapped.Therearealmostalwayshiddenopportunitiesaroundyou.Theabilitytouncoverandtakeadvantageofthoseopportunitiesisthetruetestofthecompetenceofanexecutiveorabusiness.

FourKeystoMarketingTherearefouressentialelementsofmarketing.Theseare:specialization,differentiation,segmentation,andconcentration.Youmustimplementandexecuteeffectivelyinallfourareastosurviveandthriveinyourbusiness.Alackorweaknessinanyoneareacanleadtounder-achievementandeventhefailureoftheenterprise.

DecideWhoYouAreandWhatYouDo

Specializationrequiresthatyoufocusonspecificproductsorservices,specificmarkets,orspecificcustomerneeds.Youmustfightthetemptationtotrytooffertoomanyproductsandservicestotoomanycustomersintoomanyareas.Youmustspecialize,bothinyourownmind,andinthemindofyourcustomer.

Whatisitexactlythatyourproductorserviceisdesignedtoachieve,avoid,orpreserveforyourcustomer?Whatarethecorecompetenciesorproprietarymethodsortechnologiesthatenableyoutospecializeinthisarea?Whatspecificproblemorneedcanyousolveorsatisfyforyourcustomer?Andofallthedifferentresultsyoucangetwithyourbusiness,wheredoyou—shouldyou—couldyou—specialize?

Manycompaniesworkveryhardtomasteranareaofspecializationthatishighlyvaluedbyaparticulartypeofcustomer.Itmaytakeseveralyearsofhard,dedicatedcommitmenttobuildasuccessfulbusinessaroundthiscorecompetency.Butthensomecompaniesdevelopthe"walkonwater"mentalityandbeginthinkingthattheycanproduceotherproductsorservicesequallywell.Innotime,acompanycanbegintodiffuseitsenergiesandresources,movingoutoftheareaofspecializationwhereitissuccessfulintoareasitneitherknowsnorunderstands.

DetermineHowYouCanBeSuperior

Youdifferentiateyourproductorservicebydeterminingexactlyhowyouaregoingtobesuperiortoyourcompetitors.I'llexplainthisprocessin

detailinChapter11.Itisthekeytobusinesssuccessandhighprofitability.

ChooseYourBestMarketSegment

Theprocessofsegmentationrequiresthatyouclearlydefinetheexactcustomerswhocanmostbenefitfromwhatitisthatyoudobetterthananyoneelse.Thisrequiresrigorouscustomeranalysistodeterminewhoyourbestpotentialcustomersaretodayandwhotheycanbetomorrow.

FocusYourResources

Concentrationrequiresthatyoufocusyourvitalresourcesoftime,talent,andmoneyonmarketingandsellingmoreandmoretoyourverybestpotentialcustomers.Saleseffortsdirectedtoyourhighestprobabilityprospectsyieldthehighestpossiblereturnonyouractivities.Basedonyourdecisionsonspecialization,differentiation,andsegmentation,whereshouldyouconcentrateyourmarketingandsellingefforts?

ReevaluateConstantlyAllmarketingstrategieseventuallybecomeobsoleteandstopworking.Ifyoursalesaredownforanyreason,itmaybetimeforyoutorevisityouranswersinoneormoreofthesefourareas.Thiscanleadtoyourdevelopingamoreeffectivemarketingandsellingstrategy,onethatworksintoday'smarket.

Remember,todaytheanswershavechangedwithregardtoyourmarket.Changesincustomerdemand,competition,orothermarketforcesmayrequirethatyouchangeyourareaofspecialization,yourareaofdifferentiation,youridealcustomersegments,andyourareasoffocusandconcentration.Youmayhavetochangemorethanoneoftheseatthesametime.

SeeYourselfasaBusinessInyourpersonallife,youshouldaskthesamequestionsofyourselfaswell.Whatisyourpersonalareaofspecialization?Inwhatwayisyourworksuperiortothatofyourcompetitors?Whatistheidealpositionorareaofresponsibilityforyoutoapplyyourtalents?Whereshouldyoubeconcentratingyourenergiestogettheverybestresultsandthegreatestrewardspossible?

Especially,youshouldcontinuallyaskyourself,"WhatisitthatIdovery,verywell?"Whatisyourpersonalareaofexcellence?Whatcoulditbe?Whatshoulditbe?

LookingAheadLookingintothefutureofyourbusinessorindustry,whatnewcompetenciesdoyouneedtodeveloptoleadyourfieldinthemonthsandyearsahead?Whatadditionalknowledgeandskillsdoyouneedtoacquire?Whatarethosefewtaskswhich,ifyoudidtheminanexcellentfashion,wouldhavethegreatestpositiveimpactonyourcareer?Inwhatareascouldyoubepaidthemostfortheapplicationofyourspecialtalentsandabilities?Thisquestionisjustasrelevantforyouasitisforyourcompany.

MarketMoreEffectively1. Decidetodaytodominateyourfield,tobethebestatmarketing

andinnovationinyourproductorservicearea.Whatisthefirststepyoushouldtake?

2. Determineyourareaofspecialization,byproductorservice,market,ortypeofcustomer.Whatshoulditbe?Whatcoulditbe?

3. Howdoyoudifferentiateyourproductorservicefromthoseofyourcompetitors?Inwhatwaysareyousuperiortoanyoneelse?Whatcouldyourareaofsuperioritybe?Whatshoulditbe?

4. Whatareyoubestmarketsegments?Whereareyourhighestprobabilitycustomers?Whocanbenefitthemostfromusingwhatyousell?

5. Howcanyouorganizeyourbusinesssothatyouconcentrateyourmarketingandsellingeffortsonthosecustomerswhocanbuyandpayfasterthananyothers?

6. Whatadditionalproducts,services,knowledge,orcapabilitieswillyouneedtodominateyourmarketsinthemonthsandyearsahead?

7. Whatshouldyouimmediatelystartdoingmoreoforlessof,andwhatshouldyoustartorstopdoingtoadjusttothecurrentmarket?

Chapter10:AnalyzeYourCompetition

OverviewConcentrateyourstrengthsagainstyourcompetitor'srelativeweaknesses.--BruceHenderson

Thereisamilitaryadagethat"Nostrategyeversurvivesfirstcontactwiththeenemy."Nobusinessstrategyeversurvivesfirstcontactwiththemarketplaceeither.Itmustalwaysbeadjustedtodealwiththerealitiesofthemoment.

Youhaveprobablyhearditsaidthat"businessiswar."Whatthismeansisthatthereisvigorousandnever-endingcompetitiontoconquerthemarket,winthecustomer,andachievethesale.Justasyouareeagertosucceedbysellingyourproductorserviceandearningaprofit,soisyourcompetitor.Shewantsyourbusiness—ifpossible,allofit.Toachievethis,yourcompetitorwilldoorofferalmostanythingtotakeyourcustomersawayfromyou.

KnowYourEnemyHerethenisaquestionforyou:Whoisyourcompetition?Exactly?Yourchoiceofcompetitordeterminesalmosteverythingyoudoinyourmarket,justasthechoiceofanadversarydetermineseverythingageneraldoesintheprocessofconductingmilitaryoperations.

Yourcompetitordetermineswhatyouofferandwhereyouofferit.Yourcompetitordeterminesyourpricesandhowyoucharge.Yourcompetitordeterminesyourlevelsofprofitabilityandhowconsistentlyyouearnthem.Yourcompetitordeterminesyourrateofgrowthandyourverysurvival.Everythingyoudomustbedonewithaviewtowardyourexistingorpotentialcompetitorandhisorherlikelyresponsestoyouractions.

DetermineCustomers'BuyingMotivesOnceyouhavedeterminedwhyitisthatpeoplebuyfromyou,youmustthenanswerthequestion"Whydopeoplebuyfrommycompetitors?"Whatvalueorbenefitsareyourpotentialcustomersconvincedtheyreceivewhenbuyingfromyourcompetitorratherthanfromyou?

Whatareyourcompetitor'skeystrengths?Whatarehisareasofspecialization,differentiation,segmentation,andconcentration?Whatdoesyourcompetitorhavethatyoudon'thave?Whatdoesheofferthatyoudon'toffer?Whatishedoingmoreoforbetterthanyou?Whatishisuniquesellingproposition?

MarketingMyopiaManypeopledismissorignoretheirmajorcompetitors.Theycriticizeorbelittlethemwhentheirnamescomeup.Oftentheythinkandsaythatcustomerswhoprefercompetitiveofferingsaresimplyignorantormisled.Asaresultofthisself-inflictedmyopia,theyfailtoobserveandlearnhowtooutdotheircompetitorsintoughmarkets.

Oneofthemosteffectivebusinessstrategiesyoucanimplementistoalwaysadmireyoursuccessfulcompetitors.Neverdismissthemoutofhand.Studythem.Learnfromthem.Respectwhattheyaredoingwell,andlookforwaystoimproveupontheirbestfeatures.

OffsetCompetitors'AdvantagesAsyoustudyyourcompetitors,lookforwaystooffsetorneutralizetheadvantagestheircustomersperceivethemtohave.Whatareyourcompetitors'weaknesses?Howcanyouexploittheseweaknesses?Whatdoyoudobetterthantheydo?Inwhatwaysareyourproductsorservicessuperiortotheirofferings?Inwhatareasdoyouhaveadistinctadvantageoveryourcompetitors?Whatcanyoudotooffsetyourcompetitors'strengthsandmaximizeyourownadvantages?Howcanyoubetterpositionyourselfagainstyourcompetitorsinatoughmarket?

Themoretimeyoutaketostudyandunderstandwhyandhowyourcompetitorsaresuccessfulinsellingtoyourcustomers,themorelikelyitisthatyouwillfindanopportunitytotakeawaytheirmarketshare.AsSunTzusaysinTheArtofWar,"Ifyouknowbothyourselfandyourenemy,youwillprevailinahundredbattles."

YouMustBeClearThegreaterclarityyoudevelopwithregardtoyourcompetitors'strengthsandweaknessesandtothereasonsyourpotentialcustomersbuyfromthem,thebetterableyouwillbetocounterthemandcompeteeffectively.Rigorouscompetitiveanalysiscanbeavitalkeytobusinesssuccess.Initsabsence,youwillalwaysbeatadisadvantage.

AnalyzeYourCompetition1. Whoisyourcompetitionwiththeexactcustomersyouaretrying

toattract?

2. Whatwouldhappenifyouchangedyourofferingsinsuchawaythatyoutargetedadifferentgroupofcustomerswhowouldbeeasiertosellto?

3. Whydoyourpotentialcustomersbuyfromyourcompetitors?Whatadvantagesdotheyperceive?

4. Whatareyourcompetitors'uniquesellingpropositions?Whatspecialfeatureorbenefitdotheirproductsorserviceshavethatyoursdoesnot?

5. Inwhatwaysareyousuperiortoyourcompetitors?Whatcanyouofferthattheycannot?Howcanyouemphasizethisadvantageinyoursalesandmarketingefforts?

6. Whereareyourcompetitorsvulnerable?Howcouldyouexploittheirvulnerabilitytoyouradvantage?

7. Howcouldyoualteryourmarketingstrategyinsuchawaythatyoucouldachievedominancewithaspecificcustomerormarketsegmentinaparticulararea?

Chapter11:DoItBetter,Faster,Cheaper

OverviewThemanwhocomesupwithameansfordoingorproducingalmostanythingbetter,fasterormoreeconomicallyhashisfutureandhisfortuneathisfingertips.--J.PaulGetty

Themostimportantsingledeterminantofsuccessisyourareaofcompetitiveadvantage.Itismoreimportantthanallotherfactors.Itdeterminestheriseorfallofyourbusiness,yourlevelofprofitability,yourpositioninthemarketplace,andeverythingelseyouaccomplish.

Yourcompetitiveadvantagemustbecrystalcleartoyouandtoeveryoneinyourcompany,aswellastoyourprospectivecustomers.Lackofclearcompetitiveadvantageleadsquicklytodiminishedsales,lossofmarketshare,lowerprofitability,price-cutting,and,ultimately,businessfailure.

YourHighConceptYourbusinesswasstartedbecauseyouoryourcompanyhadanideaforaproductorservicethatwasdifferentfromorbetterthanotherproductsandservices.Yourcompanyofferedtosatisfythesameneedortosolvethesameproblembetter,faster,ormorecheaplythananyoneoranythingelsethenavailable.

Yourabilitytodifferentiateyourproductinthemindsandheartsofyourcustomersisthekeytowinningtheminthefirstplaceandkeepingthemaftertheinitialsale.Tobuyfromyou,acustomermustbeconvincedthat,allthingsconsidered,yourofferingisdifferentfromandbetterthananythingelsethatiscurrentlyavailableatthesameprice.JackWelchwasfamousforsaying,"Ifyoudon'thavecompetitiveadvantage,don'tcompete!"

PriceasaDifferentiatorLowpricedoesnotgiveyouacompetitiveadvantageallbyitself.Aproductthatsellssolelyonthebasisofpriceiscalledacommodity.Intheeyesofthecustomer,itisidenticaltoanyotherproductorserviceofferedbyanyothercompany.Theonlywaythatacommoditycanbedifferentiatedisonthebasisofprice.Wheneveraproductbecomescommoditizedinthemarketplace,itbecomesalmostimpossibletochargeenoughforittomakeaworthwhileprofit.

Fortunately,whatyousellisspecial.Itisnotacommodity.Itisdifferentinmanywaysfromanythingelseavailable,ifonlybecausethepeoplewhomakeandsellitaredifferent.

However,wheneverthekeypeopleinacompany,orthesalespeopleforthatcompany,areunclearaboutwhyandhowtheirproductorserviceisdifferentfromandbetterthancompetitiveproducts,theyresorttoprice-cuttingtogetthebusiness.Thereisnofutureinthatdirection.

YourCentralFocusThecriticalroleofmarketingistodifferentiateyourproductorservicefromthoseofyourcompetitors.Anymarketing,advertising,orsellingthatdoesnotemphasizethevaluabledifferencescontainedinyourproductascomparedwiththatofyourcompetitorsisawasteoftimeandmoney.

Alldifferentiationrevolvesaroundthecreationofaclear,competitiveadvantageofsomekind.Thisisthecentralfocusofallstrategicthinkingwithregardtomarketing.

ThreeAreasofDifferentiationTosucceedinatoughmarket,whatyousellmustbesuperiortoyourcompetitors'offeringsinatleastthreeways.Itmustbebetter,faster,cheaper,andeasiertouseinsomewaythatmakesitmoreattractivethanrivalproductsorservices.Itmustbesoldmoreprofessionallyorservicedwithgreatersensitivity,speed,orefficiency.Itmustbebetterinatleastthreeareas.

Oneofyourkeyjobsinstrategicthinkingistoidentifythethreeareasinwhichyouarebetterandthentoemphasizethoseareasofsuperiorityinallofyourmarketingandsaleswork.

ThreePotentialAreasofSuperiorityInTheDisciplineofMarketLeadersMichaelTreacyandFredWiersmaidentifiedthreeareaswheremarketleadersaresuperiortotheircompetitors.Theyconcludedthateachbusiness,toachievemarketdominance,mustbeexcellentinatleastoneoftheseareasandreasonablygoodintheothertwo.

AchieveOperationalExcellence

Thefirstdisciplinetheyidentifiedisoperationalexcellence.Acompanywiththiscompetitiveadvantageisabletorunitsbusinesssoefficientlyandwellthatitcanproduceandsellitsproductsandservicesatlowerpricesthanitscompetitors.Thecompanycanthenpassonthecostsavingstoitscustomersintheformoflowerpricesorkeepthesavingsintheformofhigherprofits—orboth.

CompanieslikeMcDonald'sandWal-Mart,forexample,areoperationallyexcellent.Eachhasbeenabletoachievesucheconomiesofscaleviamassproduction(McDonald's)orsuperiordistributionsystems(Wal-Mart)thattheydominatetheirmarkets.

Howcouldyouachieveoperationalexcellenceinyourbusiness,orsomepartofyourbusiness,insuchawaythatyoucouldbethelow-costproviderinyourmarket?Howcouldyoudramaticallyreduceyourcostsofdoingbusinessandusethislow-costadvantagetoincreaseyoursalesandprofitability?

LeadtheField

Thesecondareawhereyoucouldachievecompetitiveadvantageisintheuseofinnovativetechnologyleadingtotheproductionofhigh-qualityproductsandservices.CompanieslikeMercedesandRolexfallintothiscategory,asdoSonyandLexus.

Customersarewillingtopayapremiumforabrandnamethatrepresentshighqualityandcutting-edgetechnology.Wherearethereopportunitiesforyoutodistinguishyourproductsorservicesbyusingyourimagination

tobecomethequalityleaderinyourfield?

BeClosetotheCustomer

Thethirdareawhereyoucoulddevelopcompetitiveadvantageisinbeing"closetothecustomer."Thisrequiresthatyouinvestthetimetodevelophigh-qualityrelationshipsbasedon"customerintimacy."Customerswillpaymoreandremainloyallongertocompaniesthatseemtoknowandunderstandthembetterthanothers.Providersofspecializedservices,suchasconsultingfirms,lawfirms,andaccountingfirmsfallintothiscategory.

Inwhatwayscouldyoudevelophigherlevelsoftrustandcredibilitywithyourcustomers?Whatcouldyoudotodemonstratetoyourcustomersthatyoureallycareaboutthemandtheirinterests?Thisstrategycanofferabreakthroughopportunity,especiallyinthesaleofexpensiveproductsandserviceswhereresalesandreferralsarepossible.

PickYourTargetsToleadyourfieldandachievehigherlevelsofprofitability,youhavetobeoutstandinginoneofthesethreeareasandverygoodintheothertwo.Oneofthemostimportantdecisionsyoumakeistochooseyourareaofcompetitiveadvantageandthendedicateyourcompanytoachievingit.

Acompetitiveadvantagehastwoqualities.First,itissomethingyouofferthatyourcompetitorsdonotoffertothesamedegree.Itisclearthatyouhaveanadvantageinthatarea.Domino'sPizzadevelopedacompetitiveadvantagebasedonspeedofhomedeliverythatnocompetitorwasabletomatch.Withthatadvantage,Domino'swentontobuild7,000outlets,makingitsfounder,TomMonahan,abillionaireintheprocess.

Second,acompetitiveadvantageissomethingthatcustomersrecognize,appreciate,andarewillingtopayapremiumtoenjoy.Ineverycase,itisthecustomerwhodecidesifyourcompetitiveadvantageisimportanttohimorher.Thecustomerwilltellyouifyourofferingissuperiortothatofyourcompetitorsinsomewaybybuyingyourproductsorservicesinsufficientquantitytoenableyoutoprofitandgrow.

DefineYourTermsAproductorservicethatis"better"isaproductthatdoeswhatthecustomerpurchasesittodoinawaythatissuperiortotheproductofanycompetitor.Applythistoyourcompany.Intheviewofyourcustomers,areyourproductsandservices"better"thananythingelsethatisavailabletothem?

Thequalityofbeing"faster"meansthatyourproductorservicesatisfiesthe"needforspeed."Itachievestheresultorbenefitpromisedbyyourproductfasterthanyourcompetitordoes.Itissold,serviced,ordeliveredfaster.Domino'sPizzabuiltitssuccessarounditsreputationforspeedydelivery.

Ifyourproductis"cheaper,"itmeansthatyouofferthesamevalueatalowercost.Youmayofferbetterterms,orevengreatervalue,atthesamecost.Perhapsyouoffersuperiorserviceincludedinthesamepricethatyourcompetitorscharge.Perhapsyouofferadditionalbenefitsthatmakeyourproductorserviceappearcheaperthanthatofyourcompetitor.Asaresult,yourcustomerfeelsthatheorshewouldbebetteroffbuyingfromyouratherthanfromsomeoneelse.

Ifyourproductis"easier,"thismeansthatyourcustomercanacquireoruseitwithgreaterconvenience.Thecustomergetstheresultsandbenefitsyouofferwithlesseffort.Perhapsthecustomerexperienceissmootherandmoreenjoyableaswell.Inbuyingfromyou,thereare"nohassles."Thecustomerperceivesthisasavaluethatisworthpayingfor.

StriveforSuperiorityYourareaofexcellenceisthekeytoyoursuccessinacompetitivemarketplace.Thisiswhereyourproductorservicestandsoutincomparisontothatofyourcompetitors.Itisavalueorbenefitthatyouofferthatnooneelseoffers.Withregardtoyourproductsorservices,whatisyourareaofexcellence?Whatcoulditbe?Whatshoulditbe?

Yourareaofsuperiorityisdefinedasanareaofperformancewhereyourproductorserviceissuperiortothatofyourcompetitors.Thisperformancedifferenceissignificantenoughthatyourcustomerwillbuyitandevenpayyoumoreforit.Inwhatwaydoesyourproductperformbetter,intermsofgettingresultsthatyourcustomercaresabout,thanthatofyourcompetitors?Howcouldyouimprovetheperformanceofyourproductsorservicesinsomemeaningfulway?

Youcanbeexcellentwithoutbeingsuperior.Youcanbesuperior—asintheareasofspeedorcost—withoutbeingexcellent.

Finally,youruniquesellingpropositionissomethingthatyouandonlyyouoffertoyourcustomers,anditissomethingthattheyreallycareabout.Nooneelsedoesaswellasyoudointhisarea.Nooneelseachievesthesamebenefitorresult.Whatisyouruniquesellingproposition?Whatcoulditbe?

TheKeystoSuccessEveryproductorservice,inordertosurviveinacompetitivemarket,musthaveanareaofexcellence,anareaofsuperiority,andauniquesellingproposition.Thedevelopmentandmaintenanceofthesecompetitiveadvantagesistheprimaryjobofmanagement.

Youshouldalwaysbepreparedtoanswerthecustomer'sprimaryquestion:"GivemeonereasonwhyIshouldbuyfromyouratherthanfromsomeoneelse."

Whateveryouransweristothatquestion,youshouldbuildallyourmarketingandsaleseffortsaroundit.Youransweristhekeytobusinesssuccess.

LookintoYourselfOnapersonallevel,youmustcontinuallyaskthesequestionsofyourself.Whatisyourpersonalareaofexcellence?Whereareyousuperiortoyourcompetitors?Whatisyouruniquesellingproposition?Inwhatwaysdoyoudoyourjobbetterorfasterthanothers?Whatisitthatyouandonlyyoudoinanoutstandingfashionforyourcompany?Whatcoulditbe?Whatshoulditbe?

Perhapsthemostimportantareaofsuperiorityyoucandevelopisyourabilitytodoyourjobquicklyandwell,inanexcellentfashion,consistentlyanddependablyeverytime.Thisisthekeytosuccessasanindividualinacompetitivemarketplace.

DoItBetter,Faster,Cheaper1. Inwhatwaysareyourmostimportantproductsorservices

superiortothoseofyourcompetitors?

2. Whatisyourrecognized"areaofexcellence?"Ifyouweretoconductasurvey,whatwouldpeoplesaythatyourcompanydoesespeciallywell?

3. Inwhatwaysareyourproductsorservicesfastertoacquire,use,andenjoythanyourcompetitors'?

4. Whatisyouruniquesellingproposition?Whatisitthatyourproductsorservicesofferthatnoothercompanycanmatch?

5. Inwhatwaysareyourproductsorservicescheapertobuyanduse?Inwhatwaysdotheyachievesuperiorfinancialresultsforyourcustomersforthesamecost?

6. Ifyouwereknownforbeingoutstandinginanyoneareaofyourproductorserviceofferings,whatonedistinctionwouldhavethegreatestpositiveimpactonyoursalesandprofitability?

7. Listthethreeareaswhereyourproductsare—orcanbe—superiortothoseofanyofyourcompetitors.Whatisyourplantoachievethisareaofmarketsuperiority?Whatshouldyoudofirst?

Chapter12:ChangeYourMarketingMix

OverviewMarketing…isthewholebusinessseenfromthepointofviewofthefinalresult,thatis,fromthecustomer'spointofview.Concernandresponsibilityformarketingmustthereforepermeateallareasoftheenterprise.--PeterDrucker

Therearefourcriticalelementsthatdeterminehowmuchyousell,howmuchyoucharge,howmuchprofityoumake,howfastyougrow,andtheentirefutureofyourbusiness.Eachoftheseelementsmustbeconstantlyrevisitedinresponsetocompetitivepressuresinyourfast-changingmarkets.Theyareinacontinuousstateofflux.Theyseldomremainthesameforanyperiodoftime.Theanswersarealwayschanging.

Theseelementsarecalledthemarketingmix.Theyarethefactorsthatdeterminethesuccessorfailureofyourmarketingefforts.Youmustbeconstantlythinkingaboutchangingoneormoreofthemasmarketsandcompetitorschange.Theyallstartwiththeletter"P."

WhatDoYouSell?Thefirstpartofthemarketingmixisyourproductorservice.Alwaysdefineyourproductorserviceintermsofwhatit"does"foryourcustomers,versuswhatit"is."Here'sthequestion:"Isyourproductorservice,asyouareofferingittoday,ideallysuitedforyourcurrentmarketandcustomers?"

Remember,ifitworks,itisalreadyobsolete.Ifyourproductorserviceispopularandprofitable,itisalreadybeingreplacedbyyourcompetitors.Becauseofthedynamicsofthemarket,theywillbeaggressivelyseekingwaystooffersomethingtoyourcustomersthatisbetter,faster,orcheaperthanyoursuccessfulproducts.Yourcompetitorsarestayingupatnightthinkingabouthowtotakeyourcustomers,grabyourmarkets,andputyououtofbusiness.AsTarzansaidtoJane,"It'sajungleoutthere!"

BeFastonYourFeetBecauseofthiscompetitivepressure,withinfiveyears,approximately80percentofallproductsandserviceswillbenewordifferentfromwhattheyaretoday.Manybusinessesthatarethrivingtodaywillbememoriesfiveortenyearsfromnowbecausetheirproductswillbecomeobsoleteandunwantedinafast-movingmarket.Companieswillfailtoreplacetheirproductsfastenoughandwillbeleftinthedustofthosebusinessesthatmovemorequickly.

Aseriousproblemwithmanycompaniesisthattheyfallinlovewiththeirproductandwiththeirhistory.They"getmarried"totheprocessofproducinganddistributingtheirproductsandservices.Theydismisschallengestotheirproducts,thinkingthatcustomerloyaltyisstrongenoughtowithstandsuperiorcompetitiveofferings.Asaresult,theyfailtorespondfastenoughtotheircompetitorswhentheycomeoutwithsomethingthatcustomersprefer.Don'tletthishappentoyou.

TheMarketTestThereisasimplewayforyoutoknowifyourproductorserviceofferswhatcustomerswantintoday'smarketplace:Itissellingwell!Thereisasteadyandgrowingdemandforwhatyousell.Peoplewantit.Theorderskeeppouringin.Itisrelativelyeasyforyoursalespeopletosell,andyourlevelofcustomersatisfactionishigh.

Iftheseconditionsdonotexist,youhavetoreexamineyourproductandserviceofferings.Alwaysbeopentothepossibilitythatthemarketispassingyoubyandthatyouneedtodevelopnewproductsandservicesquicklyifyouwanttosurviveandthrive.

HowMuchDoYouCharge?Thesecondpartofthemarketingmixisyourprice.Isyourpricetherightpriceforwhatyouareselling?Shouldyouchangeyourpriceinsomeway?Shouldyouincreaseit,decreaseit,combineyourpricewithotheritems,oradditemstoyourprice?Shouldyouchangeyourtermsoroffersomethingdifferentforthesameprice?

Beopentothepossibilitythatthewayyouhavepricedyourproductsorservicesinthepastmaynotworkanymore.Youmayhavetosellyourproductsorserviceswithmoregenerousdownpaymentsandextendedpaymentterms.Youmayneedtoaccepttrade-insonadifferentbasis.Butyoumustdowhateverittakes.

Wheneveryouseeasaleorapricereductionofanykind,itisanadmissionbythecompanythattheyguessedwrongaboutthepricethatcustomerswerewillingtopay.Theyarenowguessingagainbyloweringtheprice,hopingthatthisisthepriceatwhichtheycanselleverythingtheyhaveavailable.Iftheydonotcleartheirinventoryatthenewprice,theywillguessagainbyloweringthepriceoncemore.

DoubleYourPrice?Oneofmyclientswasofferingamagazineforanannualsubscriptionoftwenty-fourdollarsandlosingmoneywitheveryissue,hopingeventuallytomakeaprofitbysellingmoreadvertising.Thebusinessadvisorstudiedthemarketforthistypeofspecialtypublicationandthensuggestedthattheydoubletheprice.Thiswasanavenuetheyhadneverconsidered.

Afteragooddealofsoul-searching,theytookadeepbreathanddoubledthepriceoftheannualsubscription.Becausethemagazinewassowelllikedbyitssubscribers,lessthan10percentofthemcanceled.Overnight,theywentfromlossestoprofitsandchangedtheentirefutureofthecompany.Isthereanyplaceinyourbusinesswhereyoucouldincreaseyourpricesandstillholdontoyourmarket?

HowDoYouSellIt?Thethirdelementofthemarketingmixispromotion.Thiswordembraceseverythingyoudointheprocessofmarketing,advertising,andsellingyourproductorservice.Youmayhaveasuperbproductatagreatprice,butyoucangobrokequicklyifyourmethodofsaleiswrongorinadequate.

Thekeytobusinesssuccessisforyoutohaveagoodproductorserviceandthenvigorously,aggressively,andcontinuouslyofferit,promoteit,andsellitineveryreasonablewaypossible.Thisisusuallythemake-or-breakareaofbusinessactivity.

Howareyoucurrentlypromotingandsellingyourproductorservice?What'sworking?What'snotworking?Shouldyouchangeyourmethodsofadvertising,marketing,selling,oracquiringcustomersinanyway?

SellMoreStuffEspecially,shouldyouupgradeandimproveyourdirect-sellingmethods,people,presentation,andcapabilities?Veryoften,arapidimprovementinyoursellingmethodologyisthekeytoturningyourbusinessaround.

Youhavehearditsaidthat"Nothinghappensuntilasaletakesplace."Strippedofallbusinesstheory,thekeytobusinesssuccessisto"sellmorestuff."OneofthekeystothesuccessoftheTurbostrategyapproachistoorganizeandreorganizeyourbusinessandactivitiessothatthereisatotalfocusonsellingandgeneratingrevenues.Cashflowisthelifebloodofthebusiness,andcashflowcomesfromsales.

TrainYourSalespeopleThesadfactisthatapproximately70percentofsalespeopleinAmericahavehadnosalestrainingatallexceptforproducttraining.About95percentofthemcoulddramaticallyimprovetheirsalesiftheywerebettertrainedincertainelementsofthesalesprocess.Thisexplainswhythemostprofitablecompaniesinvestthemostinsalestraining,andtheleastprofitablecompaniesdon't.Whenyousendapoorlytrainedoruntrainedsalespersonupagainstaprofessional,theuntrainedpersondoesn'thaveachance.

IsYourPhoneRinging?Inadditiontolittleornosalestraining,manycompanieseitherdotoolittleadvertisingortheiradvertisingisnoteffective.Itdoesnotattractqualifiedcustomersinsufficientquantity.Sometimesachangeintheadvertisingmessage,orinthemediumbeingused,canincreaseresponsesbyseveralhundredpercentforthesameamountspent.

Someyearsago,partnersofminewerespendingalotofmoneyonapoorlydesignedradiocampaignthathadbeensoldtothembythestation.Theofferingwasvagueandunclear.Thewordingwaspoor,andthenarrationwasnotconvincing.Onedaytheyreceivedacallfromanadvertisingexpertwhoaskedthemhowthecampaignwasgoing.Withtheusualbravadoofentrepreneurs,theyassuredhimthatitwasagreatsuccess.Hethensaid,"Ihaveonlyonequestionforyou:‘Isyourphoneringing?’"

Asithappened,thephonewassilent.Noonewasrespondingtotheadvertising.Theywerelosingmoneytheycouldnotaffordtolose.

Withinoneweek,followingtheadviceofthisspecialist,theyrewroteandre-recordedtheadvertisingspots.Fromthenon,thephonefelloffthehook.Itsavedtheirbusiness.

Everafter,whenIthinkabouttheeffectivenessofadvertising,Ialwaysask,"Isyourphoneringing?"Nomatterwhatanyonesays,thisisstillthebestmeasureofhoweffectivelyyouradvertisingisworkingforyourcompany.

Youcanhavethefinestproductintheworld,butifyouarenotvigorouslyandaggressivelypromotingandsellingit,itwillsitontheshelfandgatherdust.Ontheotherhand,youcanhaveanaverageproduct,butifyouaresellingitwell,youcanhaveathrivingbusiness.

WhereDoYouSell?Thefourthelementofthemarketingmixistheplace.Thisisthespecificlocationwherethesaleofyourproducttakesplace.Whereexactlydoyousellyourproducttoday?Doyousellinhomes,offices,orinyourownretailestablishment?Doyousellinaparticularcityorstateornationwide?Doyousellinstoresorbydirectsellingorbydirectmail?Mostimportant,shouldyouchangetheplaceatwhichyouofferyourproducts?

IBMandAppleusedtosellexclusivelythroughtheirownsalesforces.Thentheychangedandbeganofferingtheirproductsthroughretailcomputerstores.Meanwhile,theonlywayyoucanbuyaDellcomputerisbyphoningthecompanyorcontactingthemviatheInternet.Theythensendtheequipmenttoyou.Ineachcase,theselectionofthecorrectlocationfromwhichtoselltheproductwasacorepartoftheirmarketingstrategy.

Perhapsyouneedtochangeorimprovetheplaceatwhichyouaresellingyourproductorservice.Sometimesyouneedtosellitsomewherecompletelydifferentfromwhereyouaresellingittoday.Achangeinthelocationatwhichyouofferyourproductorservicecouldchangethedirectionofyourbusiness.Whatcoulditbe?

ExamineYourAssumptionsWheneveryouhavedifficultiessellingasufficientquantityofyourproductorservice,youshouldexamineallofyourassumptionsintheareasofproduct,price,promotion,andplace.Youshouldbewillingtoconsiderthepossibilitythatyourmethodiscompletelywronginoneormoreoftheseareas.

Itoftenhappensthatasinglechangeinoneofthe"P's"inthemarketingmixcanchangetheentirenatureofyourbusiness,boostyourresults,increaseyourprofitability,andmoveyoutowardmarketleadership.Keepanopenmind.

TheAnswersAreChangingWhatisthecorrectmarketingmixthatwillenableyoutoselltheverymostatthehighestcostandearnthegreatestprofit?Theanswersarechangingwithincrediblespeed,everyyear,andeveneverymonth.Eachactionofthecompetitorsinyourmarketchangesthedynamicsofwhatyoumustdonowtosurviveandthrive.

Witheverymajororminorshiftinyourmarket,allbetsareoff.ScottMcNeelyofSunMicrosystemssaidrecently,"Inanentrepreneurialbusiness,everyassumptionhastoberevisedorthrownouteverythreeweeks."Whatassumptionsareyougoingonthatmaynolongerbetrue?

ChangeYourMarketingMix1. Bepreparedtochallengeeveryaspectofyourmarketing,

especiallyifitisnotworkingaswellasbefore.Whatareascauseyouthegreatestfrustrationanddissatisfaction?

2. Whatexactlydoyousell,definedaswhatit"does"foryourcustomers,versuswhatit"is?"

3. Whatpricesdoyoucharge?Howcouldyouchangethewayyouchargetomakebuyingfromyoumoreattractive?

4. Howdoyoupromoteyourproduct?Couldtherebebetterwaysofadvertisingyourproductsorservicesthatwouldgiveyoubetterresults?

5. Howdoyousellyourproductorservice?Iseverypersonwhodealswithyourcustomersfullytrainedineverykeyresultareaofselling?

6. Wheredoyousellyourproductorservice?Shouldyoubeexploringotherlocationsormethodsofsale?

7. Shouldyouchangemorethanoneoftheelementsofthemarketingmixatthesametime?Challengingmarketconditionsoftencallforbolddeparturesfromthemethodsofthepast,especiallyiftheyarenolongerworking.

Chapter13:PositionYourCompanyforSuccess

OverviewManisnotthecreatureofcircumstances.Circumstancesarethecreaturesofmen.--BenjaminDisraeli

IntheirbookPositioning,AlRiesandJackTroutexplainthatthewayyouarepositionedintheheartsandmindsofyourcustomersandpotentialcustomersdeterminesyoursuccessorfailureincompetitivemarketsmorethananyothersinglefactor.

Dr.TheodoreLevitt,deanoftheHarvardBusinessSchool,wroteinTheMarketingImaginationthatyourmostvaluableassetis"howyouareknowntoyourcustomers,yourreputationinthemarket."Yourreputationisavaluethatpeoplewillpayfor.

Wheneveryoureadaboutacompanywith$1millionworthofassetssellingfor$10million,youarewitnessinganexampleofhowvaluableareputationcanbe.Theextra$9millionisofficiallycalled"goodwill."Thatextrapaymentforgoodwillmeansthatthenameofthecompanyissovaluablethatthepurchaseriswillingtopayasignificantpremiumforthecompanybecauseofitsreputationinthemarketplace.

WhatOthersSayItisestimatedthat84percentofpurchasedecisionstodayarebasedonwordofmouth,orhowotherpeopletalkaboutyourproductsandservicesamongthemselves.Thewholepurposeofadvertisingistogetpeopletotryyourproductsorservicesinitiallywiththehopethattheywillbesosatisfiedthattheywillbuyagainandwillalsotellothers.

Dr.RobertCialdini,inhisbookInfluence:HowandWhyPeopleAgreetoThings,explainsthat"socialproof"isamajorinfluencingfactordeterminingwhetherornotpeoplebuyordonotbuyaproductorservice.Themostimportantpartofsocialproofistheperceivedsimilarityofthepersonrecommendingtheproducttothepersonhearingtherecommendation.Forexample,ifyouareanexecutiveandyoulearnthat"otherexecutives"rateaproductorservicehighly,youwillbemoreinfluencedtotryitthanifyouheardthat"doctors"or"lawyers"haduseditandapprovedofit.

Successfulcompaniesgivealotofthoughttothewaytheywantcustomerstothinkandtalkaboutthem.Theyorganizealloftheirmarketingandsellingactivitiesaroundgeneratingandcreatingaperceptioninthemindoftheprospectthatleadstopurchasesandrepurchases.

WhatWordsDoYouOwn?ProfessorLeonFestingerofHarvarddevelopedaconceptthathecalled"attributiontheory"toexplainhowpeoplemakedecisionsandcometoconclusions.Hefoundthatpeopleusuallythinkintermsofaphraseorevenasinglewordwhentheythinkofaparticularproductorservice.Whateverthiswordhappenstobehasaninordinateimpactontheirdecisiontobuyornottobuy.

Forexample,IBMmeans"excellence."McDonald'smeans"convenience."Nordstrom'smeans"service."FederalExpressownstheword"dependability"inovernightdelivery.Deliberatelyoraccidentally,eachproductorservicedevelopsareputationthatpositionsitagainstitscompetitors.Whatisyours?You"own"awordwhencustomersimmediatelythinkofyourcompanyorproductwhentheyhearthatword.

ChooseYourWordsCarefullyReisandTroutsuggestthatyouselectthewordorwordsthatyouwanttoowninthemindofyourmarketandthendoeverythingpossibletoseizeandtakecontrolofthosewords,defendingthemagainstallcomers.

Forexample,myteenagesonshaveasinglecriterionformovies.Itistheword"action."Ifitisanactionpicture,theywillseeit.Ifitisnot,theyarenotinterested.Myolderdaughterprefersmoviesthataredesignatedas"romance"moviesorwhatshesometimescalls"chickflicks."Myyoungestdaughter,whoistenyearsold,onlywantstogoto"children's"movies.Ifyouwanttoattractthem,youhavetopositionyourmoviewiththosewords.

Mercedesownsthewords"qualityengineering."BMWownsthewords"ultimatedrivingmachine."Domino'sPizzaownsthewords"fastdelivery."Ineverycase,thesecompanieshavebuilttheirsuccessoncreatingandmaintainingthisperceptioninthemindsoftheircustomermarkets.

CreateYourOwnCheatSheetHereisthequestion:Whatwordsdoyouown?Whatwordsshouldyouownintheheartsandmindsofyourprospectivecustomers?Whatwordscouldyouownifyouweretoreorganizeandredirectyourmarketingefforts?

Asanexercise,imagineoneofyourprospectsmeetingwithoneofyourcustomers.Imaginethatyourcustomercalledyouandaskedwhatyouwouldlikehertosaytoyourprospecttoconvincehimtobuyfromyou?

Ifyoucouldputtogethera"cheatsheet"withtheexactwordsorphrasesyouwouldlikeyourcustomertoleaveinthemindofyourprospect,whatwordswouldyouchoose?Wouldyouchoosewordslikeexcellentquality,highintegrity,friendlyservice,nicepeople,quickresponsestoproblems,easytoworkwith,greatprices?Howdoyouwanttobedescribedbyyourcustomersandpotentialcustomers?Ofallthewordsandphrasesthatcustomerscouldusetodescribeyourproductsandservicesandyourcompany,whichwouldbethemosthelpfulforyouandyourbusiness?

Onceyouareabsolutelyclearaboutthepositioningthatyouwanttoachieve,youmustorganizeeverycustomerinteraction,everyproductandservice,everyelementofsales,delivery,anddistributionsothatthosewordsarethefinalimpressionleftinyourcustomer'smind.Thisisthekeytopositioningyourselfforgreatsuccessinacompetitivemarketplace.

WhatIsYourBrand?Abrandrepresentsavalueandisbasedontrustbetweenthecompanyandthecustomer.Whenthecustomerbuysa"brandname,"sheisconfidentthatshewillgetexactlywhatthecompanypromises.Yourbrandsummarizeshowacustomerthinksandfeelsaboutyou.Itcannotbebuiltovernight,asthedot-comstriedtodowithSuperBowladvertising.Bythrowinghugesumsofmoneyata50-million-personaudience,thedot-comstriedtobuildquicklythekindoflong-termreputationenjoyedbyestablishedcompanies.Butbuildingabrand(trust)requiresaseriesofpersonalexperienceswithyouandwhatyousell.Abrandtakesyearstodevelopintheheartsandmindsofyourcustomers.

Thisvalueandtrustaretheresultofthecustomer'sexperiencewithyouandyourproductsovertime.Itisverymuchlikeapersonalreputationinthatittakesalongtimetobuild.Itcanbedamagedorevendestroyedbyanegativeexperience.

CreatingYourBrandTherearetwopartstothebrandingexperience.First,therearethepromisesyoumakewhenyouinduceyourcustomertobuyfromyouforthefirsttime.Thesearetheclaimsandvalueofferingscontainedinyouradvertisingandsellingactivities.

Thesecond,andmoreimportant,partofbrandingconsistsofthepromisesyoukeepwhenyoudeliveryourproductorservice.PhilipCrosby,authorofQualityIsFree,saysthatqualitymeansthat"Yourproductdoeswhatyousayitwilldowhenyousellit,anditcontinuestodoit."Thisistheessenceofbranding.

CreaturesofHabitThereisarulethatsaysthatpeopledecideemotionallyandthenjustifylogically.Inthissense,customersarelazy.Oncetheyareperfectlyhappyandsatisfiedwithaproductorserviceoffering,theywillgoonbuyingthatproductorserviceindefinitely.Intheirminds,itistoomucheffortortroubletochange.

Themostsuccessfulcompaniesarethosethathaveestablishedabrandthatpeoplecandependonabsolutely.Whetheritisalocalrestaurantoramultinationalcorporation,customersfeelcomfortablebuyingfromthemastheresultofhappybuyingexperiencesinthepast.

EverythingCountsYourpositioningagainstyourcompetition,yourreputation,andyourbrandingdeterminehowmuchyousellandhoweasyitisforyoutosellthatamount.Theydeterminehowmuchyoucanchargeandhowfastyougrow.Acompanywithasuperbreputationcanchargemorebecausepeopleplaceadollarvalueonagoodbrand.ThinkofFrenchperfume,JapaneseorGermancameras,Swisswatches,orTiffanyjewelry.

Here'stherule:Everythingcounts!Everythingyoudoinyourinteractionswithyourcustomerhelpsorhurts.Everythingaddsuportakesaway.Everythingeitherimprovesyourpositioningandthecustomerperceptionofyourproductsorservicesandofyourcompany,oritdetractsfromthem.Nothingisneutral.Everythingcounts.Youmustthereforeleavenothingtochance.

TheBrandCalled"You"Theseprinciplesareverymuchthesameinyourownlifeandcareer.Yourpersonalpositioninginthemindsofthekeypeopleinyourbusinesslifelargelydeterminesyourlevelofsuccess,yourrateofpay,yourspeedofpromotion,andalmosteverythingthathappenstoyouinyourcareer.

Howareyoudescribedandthoughtaboutbyotherswhenyouarenotthere?Whatisyourpersonalbrand?Whatisyourreputation?Howdootherpeoplethinkandspeakaboutyou,bothasapersonandasacontributortotheorganization?

Inyourwork,thebestbrandingorreputationyoucanhaveisthatpeopleknowthatyoucanbeabsolutelydependedupontodoanexcellentjobeverysingletime.Personalperformanceisthekey.Youdowhatyousayyouwilldo,andyoukeepondoingit,liketheEnergizerBunny.

LarryBossidysaysinExecution:TheDisciplineofGettingThingsDonethatthemostvaluablequalityorcharacteristicofanexecutiveishisorherabilitytotakeactionandgetresults,toexecutetheplanexactlyasexpected.Thisisthekeytoyourpersonalbrandingaswell.

PositionYourCompanyforSuccess1. Whatisyourcompany'sreputationinyourmarket?Howdo

customersandcompetitorsthinkandtalkaboutyou?

2. Whatwordsdopeopleusewhendescribingyourproductsorservicestoothers?

3. Ifyoucould"own"certainwordsthatapplytoyourcompanyandyourproductsorservices,whichwordswouldyouchoose?

4. Whatwords,iftheywereautomaticallyassociatedwithyourcompany,wouldhavethegreatestpositiveeffectonyoursalesandprofitability?

5. Whatchangeswouldyouhavetomaketoensurethateverycustomercontactreinforcedthemessagethatyouwantedtosendtoyourcustomersaboutdoingbusinesswithyou?

6. Whatarethemostimportantpromisesthatyoumaketoyourprospectstogetthemtobuyfromyouforthefirsttime?Doyoukeepthesepromisesafterthesale?

7. Whatarethemostpositivethingsthatyourcustomerssayaboutdealingwithyourcompany?Howcouldyoucreateasystemtoensurethatmorecustomerssaythesethings?

Chapter14:DevelopStrategicBusinessUnits

OverviewThereisnosecurityonthisearth;thereisonlyopportunity.--GeneralDouglasMacArthur

Thestrategicbusinessunit(SBU)concepthasrevolutionizedmanymultiproductormultiservicebusinesses.Itisawayofthinkingthatisabsolutelyvitaltobusinesssuccess.ItwasfirstdevelopedbytheBostonConsultingGroupandthenusedbymanyFortune1000companiestotransformtheirorganizationsintomoreefficientandvastlymoreprofitablecompanies.

WiththeSBUconcept,eachproductorserviceismadeintoaseparatebusinessunitwithinthecompany.Thesebusinessunitsarethengroupedwithsimilarproductsorservicesinoneofthreeways:1)bycommoncharacteristicsorfeatures;2)bycommonmarkets;or3)bycommoncustomerstowhomtheproductsorservicesaresold.

BusinessesWithintheBusinessEachunitisthenmanagedasaseparatebusiness,withitsownmanagementstructure,strategicplan,businessgoals,salesandrevenuetargets,levelsofprofitability,andkeyrolesandresponsibilitiesofthepeoplewithintheunit.

ThestartingpointofimplementingtheSBUmethodistomakesomeonespecificallyresponsiblefortheoperationsandtheresultsoftheunit.Acompetentpersonisputcompletelyinchargeofattainingacertainlevelofprofitability,exactlyasifheorshewerebeingmadepresidentofaseparatebusiness.

BasicBusinessPlanningTomaketheSBUapproachwork,youbeginbydrawingupacompletebusinessplanforeachunit.Eachproductorservicewithintheunitmustalsohaveacompletebusinessplanthatincludesestimatedsalesrevenues,costs,andprofitability.YouthenproceedtodeterminetheexactpeopleandresourcesthatwillbenecessarytoachievethegoalsofthisSBU.

MakeSomeoneResponsibleTheprimaryreasonthataproductorservicesucceedsisthatacompetentpersoniscompletelyresponsibleforitandistotallycommittedtoitssuccess.Amajorreasonforthefailureofanyproductorserviceisthattheresponsibilityforitssuccessorfailureisspreadamongseveralpeople,andnooneisaccountable.Noonepersonhasameaningfulstakeintheoutcome.

Tobeassuredofrealizingthefullpotentialofaproduct,service,businessunit,oranynewventure,youshouldalwaysbeginbyputtingsome-oneinchargewhoserewardsaretiedtothesuccessoftheproject.

ReevaluateYourEntireBusinessWhenyoufirstintroducetheSBUconcept,youhaveanopportunitytostandbackandreevaluateyourentirecompanybyplacingeachofyourproductsandservicesinoneoffourcategories.

Thesecategoriesaredefinedusingtwogrids.First,aproductcanhavehighgrowthpotential—theproductsoftomorrow—orlowgrowthpotential—theproductsofyesterday.

Second,theproductscanbedefinedasbeingusersofcashorsuppliersofcash.Withthisclassificationmethodology,younowhavefourcategoriesofproductsandservices.ThesearedelineatedbytheBostonConsultingGroupascashcows,stars,questionmarks,anddogs.

TheCashCow

Thefirsttype,thecashcow,isdefinedasanestablishedproductorservicethatsellswellandisanetcontributorofcashtothebusiness.Itisnotgrowinginsalesandprofitabilitynorisitdeclining.Itisamainstayofthecompany.Itisakeytothecompany'ssuccess.Atonetimeitmayhavebeenthemainproductorserviceofthecompany,butnowitissimplyadependablesourceofrevenue.

Yourstrategywithyourcashcowsistodevotesufficientresourcesandpeopletothemsothattheirabilitytocontributesalesandcashtoyourbusinessextendsaslongaspossible.Manycompaniesmakethemistakeoftakingtheircashcowsforgrantedandenduplosingsalesandrevenuesthatwouldhavebeeneasytomaintain.

ReachfortheStars

Thesecondtypeofproductorservice,astar,isalsoanetcontributorofcash.Itdiffersfromacashcowinthatithastremendouspotentialforgrowthandprofitability.Itisthekindofproductthat,properlypositionedandpromoted,canbeamajorsourceofrevenueandcashflowintheyearsahead.

Examineyourcompleterangeofproductsandservices,especiallythenewerones,andask,"Whichofthesehasthepotentialtobeabigseller?"Whatwouldyouhavetodoorinvestintohelpmakeitamajorsourceofsalesandrevenues?

NeitherSuccessNorFailure

Thethirdtypeofproductisthequestionmark.Thisisaproductorservicethatisauserofcash.Althoughitisnotyetprofitable,ithasgreatpotentialifitcanbeproperlydeveloped,marketed,andpromoted.

Questionmarksareproductsthathavenotyetbecomesuccessful.Theycanfail,takingalltheinvestmentputintothemforresearch,development,andmarkettestingdownthedrain.OneofthemostimportantgoalsyouachievewiththeSBUconceptistoidentifyyourquestionmarksanddecidewhethertogetindeeperortogetoutaltogether.

Hereisanimportantpoint.Mostnewproducts,services,orbusinessventureseitherfailcompletelyor,atbest,failtorealizetheexpectationscompanieshadforthemwhentheywereconceived.Manynewideasturnouttobesuccessfulinwayscompletelydifferentfromwhatwasinitiallyenvisionedwhenthedecisionwasmadetoinvestinthem.

Infast-growingmarkets,whentherearehighlevelsofbusinessactivityandpositivecashflows,youcanaffordtocarryproductsorservicesthatarequestionmarks.Butwhenthemarkettightensup,youmustbecomebothcautiousandcold-bloodedaboutanybusinessactivitythatisnotcarryingitsweight.Youmustbepreparedto"fishorcutbait."Youmustbewillingtocutyourlossesquicklytoassurethesurvivaloftheenterprise.Thisisnotimeforself-delusion.Hopeisnotastrategyintoughcompetitivemarkets.

DogsDragYouDown

Thefourthcategoryofstrategicbusinessunitisthe"dog."Thisisaproductorservicethatlosesmoneyandhasnofutureinthemarketplaceoftodayortomorrow.Itseemedlikeagoodideaatthetimeitwas

introduced.Sometimesagooddealofemotionalinvestmentandcapitalhasbeenputintothisproductorservice,butitiscleartoalmosteveryonethatithasnofuture.

Thedogsshouldbeeliminatedasquicklyaspossible.Thepeopleandresourcescurrentlybeingspentonthemshouldbefocusedontheproductsandservicesthathaveagreaterprobabilityofgeneratingcashandprofitabilityinthefuture.

Whenaturnaroundspecialisttakesoveratroubledcompany,hegetsridofthedogsimmediately.Thisoftenfreesupenoughcashandpeopletoreturnthecompanytosolvencyinafewweeksormonths.Youshoulddothisasaregularpartofmanagement.

TakeImmediateActionTheSBUconceptissimple.First,takeexcellentcareofthecashcows.Don'ttakethemforgranted.Doeverythingpossibletoassurethattheyremainhealthyforyearstocome.Investinthemifnecessarytoupgradethemandmaintaintheirattractivenesstotheircorecustomers.

Second,doeverythingpossibletopromotethestars.Putyourbesttalentsandenergiesbehindhelpingthestarstorealizetheirfullpotentialinthemarket.Assignoneofyourbestpeopleandmakehimorherresponsibleforeachstar'ssuccess.Besuretoprovidewhateverresourcesarenecessarytosellasmanyofyourstarsaspossiblebeforeyourcompetitorsmoveintothismarket.

Third,resolvethequestionmarksasquicklyaspossible.Itisalwaysnecessarytoinvestinresearchanddevelopmentfortheproductsofthefuture.Buttherecomesatimewhenyouhavetomakeadecisiontoproceedortostoptrying.Establishclearcriteriafordecision-makingaboutnewandexistingproductsandsticktothem.

ThefourthSBUconcepthastodowiththedogs.Onceyouhavedecidedthataproductorservicehasnofuture,youshoulddiscontinueitimmediately.Youcanthenchannelthepeopleandresourcesworkingonitintoareaswheregreatersuccessispossible.Keepaskingyourself,"IfIhadnotalreadycommittedtimeandmoneytothisproduct,knowingwhatIknownow,wouldIstartinvestinginitagaintoday?"

ImplementingtheProcessTheSBUapproachtoyourbusinessrequiresthatyoufirstgroupyourproductsandservicesintoseparatebusinesscategories,basedonsimilaritiestheyhaveincommon.Youthenevaluateeveryproductorserviceonitsownmerits,determiningwhetherornotitisacashcow,astar,aquestionmark,oradog.

Youinsistthateachproduct,andeachgroupingofproducts,standonitsownasaseparate,profitablebusinessunit.ThisSBUapproachenablesyoutoseeeachpartofyourbusinessclearlyandtomakebetterdecisions.Youusetheconceptofprofitabilityasyourprimarymeasure.

Oneofthemajorreasonsthatcompaniesgetintotroubleisthattheybunchtoomanyproductstogetherinasinglebasketwhereitbecomesalmostimpossibletodeterminewheretheprofitsstopandthelossesbegin.TheSBUconceptwillhelpyoutoavoidthisdanger.

SeeYourselfasMultitalentedApplytheSBUconcepttoyourselfandyourcareer.Youhaveseveralareasoftalentandability,corecompetencies,experience,knowledge,andeducation.Whatareyour"cashcows,"theskillsthatarecentraltoyourvaluetotheorganization?

Whatareyour"stars,"theemergingareasofactivityornewskillsandknowledgethatcanmakeyouextremelyvaluableinthefuture?

Whatareyourpotentialareasofgreatsuccess?Whataretheprojects,responsibilities,andareasofopportunitythat,ifyouexploitthemfully,canenableyoutomoveaheadmorerapidlyinyourcareer?

Finally,whatarethe"dog"areasofyourworklife?Thesearethetasksorskillsthatyoumayhavemasteredinthepastbutthatdistractyoufromyourfuture.Thesearethejobsandactivitiesthattakeupalotoftimebutthatarenowherenearasvaluableasotherthingsyoucouldbedoing.Whatarethey?

DevelopStrategicBusinessUnits1. Begintodaytovieweachproductorserviceasaseparate

business,responsibleforgeneratingacertainamountofprofiteverymonth.

2. Groupyourdifferentproductsorservicesbysimilarcharacteristics,similarcustomers,orsimilarmarkets.

3. Whatarethecashcowsofyourbusiness?Whatarethecoreproductsorservicesthatareessentialtoyouroverallprofitability?

4. Whatcanyoudotodaytosafeguardandnurtureyourcashcowstoassurethattheycontinuecontributingsalesandcashflowfarintothefuture?

5. Whatarethestarsofyourbusiness?Whataretheproductsthataresellingwell,increasinginmarketshare,andgeneratinghighprofits?

6. Whatcouldyoudotoincreasethesalesandprofitabilityofyourstars?

7. Whatarethequestionmarksofyourbusiness?Whichofyourcurrentproductsorservicesshouldyoudiscontinue,knowingwhatyouknownow?

8. Whatareyourdogs?Whatproductsorservicesshouldyoudiscontinuealtogether?

Chapter15:SellMoreEffectively

OverviewPresentingaprofessional,upbeatfacetothepublicdoeswondersforthewaypeopleperceiveyourbusiness.--SteveEstridge

SometimesIaskmymanagementaudiences,"Ifyouweresellingtwiceasmuchasyouaretoday,couldyoufillalltheorders?"Inmostcases,thebusinessleaderswillallagreethattheycouldquitecomfortablydelivertwiceasmuchoftheirproductsorserviceswiththeircurrentresourcesthantheyarecurrentlyselling.

Ithenaskthem,"Wellthen,whyaren'tyousellingtwiceasmuch?Whatisholdingyouback?"Theyoftenjustlookatmeblankly,asifthatweresomethingthathadneveroccurredtothem.

YourUntappedMarketPotentialThefactisthatprobably80percentofyourpotentialcustomershavenotyetbeenapproachedbyyoursalesorpromotionalefforts.Mostofthemdon'tknowaboutyouanddon'tknowhowmuchbetterofftheycouldbewithyourproductorservice.Noonehastoldthem.

Youcouldprobablybesellingtwiceasmuchasyouaretodayifyoucouldjustfigureouthowtodoit.Thisisyourmainjob.

TheGreatSalesQuestionWhenIconductmarketingstrategywithmyclients,Igivethemthiskeysalesquestiontoanswer.Ithastakenmetwenty-fiveyearsofstudyandexperiencetodevisethisquestion,anditdealswitheverypartofthesalesandmarketingprocess,likeaformulaorrecipe.Byansweringthisquestion,youcanconductaquickanalysisofyoursalessituation—past,present,andfuture.Hereisthequestion:

"Whatistobesoldtowhomandbywhom,andhow,andatwhatpriceandhowisitgoingtobepaidforanddeliveredsatisfactorily?"

Thefailuretoansweranyonepartofthisquestionaccuratelycanleadtoacompletefailureofthesaleseffort.Unfortunately,mostcompaniescannotanswerthewholequestioncorrectly.

WhatIstoBeSold?

Thefirstpartofthequestionis"Whatistobesold?"Toanswerthiscorrectly,youhavetodefineyourproductorserviceintermsofwhatitdoesandhowitbenefitsyourcustomer.Howdoesitimprovehisorherlifeorwork?Ofallthebenefitsthatacustomerenjoysfrompurchasingyourproductorservice,whatistheprimarybenefit,theonethingthatyouofferthatmakesyousuperiortoanyothercompetitorinthemarketplace?Doyouknowtheanswertothis?

WhoIsGoingtoSellIt?

Thesecondpartofthequestionis"Bywhom?"Whoisactuallygoingtoselltheproductorserviceandgetthecheckfromthecustomer?Howareyougoingtorecruit,train,manage,field,andsupportthesalesperson?Howisthissalespersongoingtouncoverthenecessaryleadsandgetface-to-facewiththeprospectivecustomer?

Thesalespersonislikethefootsoldierinthearmy:Beforeyougotowar,youhavetothinkcarefullyabouthowthissoldierisgoingtoberecruited

andsupported,andexactlywhatthesalespersonisgoingtosayanddowhenshegetsface-to-facewithsomeonewhocanbuywhatyouareselling.

WhoIsYourCustomer?

Thenextpartofthequestionis"Towhom?"Answeringthisrequiresthatyoudefineyouridealcustomerclearlyandfocusyoursaleseffortsonthisspecifictypeofperson.Youshouldhaveaclearpsychographicanddemographicprofileofthepersonwhoisthemostlikelytobuyyourproductorservice,theprospectwhocanbenefitfromitmostreadily.Withoutthisclarity,yoursalespeoplewillbelikemachinegunners,sprayingthemarket,callingonmanypeoplewhoarenotprospectsatall.

HowMuchAreYouGoingtoCharge?

Thenextpartofthequestionis"Atwhatprice?"Sometimestheanswertothisquestionisfixedandcannotbechanged.Inmanycases,however,thewayyoupriceyourproductsandservicesisakeyfactorthatdeterminesyourlevelofsalesandprofitability.

Asthemarketchanges,orinresponsetoeithercustomerreactionorcompetitivepressure,youmustbepreparedtorevisityourpricesasoftenasnecessary.Imaginethatyouwerestartingoveragaintodaytosetyourprices,knowingwhatyounowknowaboutthecurrentmarket.Isthereanypriceyouwouldraise,lower,ormodifyinsomeway?

CollectingPayment

Thenextpartofthequestionis"Howisitgoingtobepaidfor?"Doyourequirepaymentinfullinadvance?Doyourequireadepositwhenthesaleismadewiththebalancetobepaidatalatertimeoncertainterms?Doyouoffercreditorfinancing?Especially,whatdoyourcompetitorsdo?

Oftenachangeinthewayyoucharge,orinyourpricingstructure,candramaticallyincreaseyoursales.Whatcouldyoudodifferentlyintoday'smarketthatwouldmakeiteasierormoreattractivetobuyyourproductor

service?

DeliveringtheGoods

Thefinalpartofthequestionis"Howisgoingtobedeliveredsatisfactorily?"Whatistheexactprocessofgettingtheproductorservicetoyourcustomerinsuchaway,andatsuchalevelofquality,thatthecustomerbothbuysfromyouagainandrecommendsyoutoothers?

Animprovementincustomersatisfactionatthepointofdeliveryandafterwardscangreatlyincreaseyoursalesinthefuture.

Undoubtedly,youthinkconstantlyaboutthesequestionsandhowyoumightanswerthemmoreeffectively.Thehealthofyourbusinessislargelydeterminedbyhowappropriateyouranswersaretodayinthefaceofachangingmarket.

BuildingaWorld-ClassSalesForceThelinchpinofthisentireprocessisthesaleseffort.Unfortunately,manycompaniesarerunbypeoplewhohaveneverbeensalespeoplethemselves.Forthisreason,theyhavenounderstandingofthecentralimportanceofthesaleseffort.Theythinkthatyoujustplaceacoupleofads,hireacoupleofsalespeople,andthebusinessjustrollsinthedoor.Theyareoftenbaffledwhensalesfalloff,noonerespondstotheadvertising,andthesalespeopledon'tsellanything.

Allsuccessful,profitablecompanies,withoutexception,havesuperbsalespeople.Thesepeoplehavebeencarefullyrecruitedbytopprofessionalmanagers.Theyhavebeenthoroughlytrained,sometimesformanymonths.Theyareprofessionallymanaged,day-by-dayandweek-by-week,byexcellentsalesexecutiveswhoknowexactlywhattheyaredoing,basedonmanyyearsofexperience.Sometimes,justbringinginanewsalesexecutiveormanagercanboostsalesdramaticallyandtransformtheresultsofanentirecompany.

Yourabilitytofieldaworld-classsalesteamisthekeytoyoursuccessinanymarket.Thisisanareathatrequiresrealfocusandattention,nevermoresothanwhenthemarketbecomestougherandmorecompetitive.

ThePivotalSkillBuildinganeffectivesalesforce,fromtheinitialrecruitingthroughthetrainingandontotheday-to-daymanagement,isbothanartandascience.Itisthepivotalskillinanycompanythatdependsonsalesforthesuccessofthebusiness.Thesalesforceisliketheengineoftheautomobile.Itshorsepowerandefficiencydeterminethespeedandeffectivenessoftheentirevehicle.

Manycompaniestransformtheirresultsbyfocusingsingle-mindedlyonthesaleseffort.Theysetclearparametersforthekindofsalespeopletheywant,recruitcarefully,trainthemthoroughly,andmanagethemprofessionally.Asaresult,theirsalesandcashflowincreasedramatically,andtheycanweatheranymarket.

SellMoreEffectively1. Whatistheexactprocessnecessarytosellyourproductor

service,fromthefirstcustomercontactthroughtothecloseofthesale?Doyouknow?Howcoulditbeimproved?

2. Whatmustyourprospectivecustomerbeconvincedofbeforehechoosesyourproductoverthatofyourcompetitor?

3. Ifmoneywerenoobject,whatspecialresultsorbenefitscouldyouofferinyoursaleseffortsthatwouldmakeyourproductmoredesirablethananyotheravailable?

4. Whatisyourprocessforrecruitingsalespeople?Whatmediadoyouuse?Whatlevelsofeducationandexperiencedoyourequire?

5. Whatkindofcompensationsystemdoyouhaveforsalespeople?Whatisitbasedon?Howcoulditbeimprovedsothatitmotivatesbettersalesperformance?

6. Howmuchofyourbusinesscomesfromreferralsfromhappycustomers?Howcouldyouincreasethenumberofreferralsyougetasapercentageofyourbusiness?

7. Whyaren'tyoursalestwiceashighalready?Whatsaleseffortscouldyoumaketotapintothat80percentofthemarketthathasneverheardofyou?

Chapter16:EliminatetheBottlenecks

OverviewSuccessinsolvingtheproblemdependsonchoosingtherightaspect,onattackingthefortressfromitsaccessibleside.--GeorgePolya

Inphysicalterms,asingleblockageofakeyarterycanleadtoaheartattackandthedeathofanotherwisehealthyindividual.Someyearsago,JamesFixx,aleadingauthorityonjoggingforphysicalfitness,oneofthetoprunnersinAmerica,inOlympiccondition,droppeddeadofaheartattackwhilerunningattheageoffifty-twobecauseofasinglepieceofplaquethatcamelooseandlodgedinhisheart.

Ineveryrespect,JamesFixxwasoneofthehealthiestandfittesthumanbeingsontheplanet.Butoneblockagewassufficienttoendhislife.Thissameprincipleappliestobusinesses,careers,andone'spersonallifeaswell.Onefatalflawcancostyoualot,ifnoteverything.

IdentifyYourLimitingFactorInyourbusiness,forexample,therearealmostalwayscriticalconstraintsor"limitingfactors"thatdeterminehowfastyouachieveyourgoals.Notonlycanaconstraintslowyoudownandkeepyoufromachievingthesalesandprofitabilitythatyoudesire,butaseriousconstraintcanbringyourbusinesstoitsknees.

Identifyingwhatisholdingyouback,andremovingit,canhelpyoutoachieveyourgoalsfasterthanalmostanythingelseyoucando.Onceyoulearntheartofconstraintanalysis,youcanuseitfortherestofyourcareer.

FollowtheFormulaYouapplytheprocessofconstraintanalysistoyourbusinessbyfollowingcertainsteps.First,youdecideonyourspecificbusinessgoals.Makethemclear,measurable,andtime-bounded.

Second,youaskyourself,"WhyamInotatthatgoalalready?"Whatisholdingyouback?Whatistheconstraint,chokepoint,orbottleneckthatdetermineshowfastyouachievethespecificgoalsofsales,cashflow,orprofitabilityinyourbusiness?

Letusreturntomyearlierquestion:Wouldyouliketodoubleyoursalesanddoubleyourincome?Ifyouransweris"yes,"thenwhyhaven'tyoudoneitalready?Whyaren'tyoursalestwiceashigh?Whyaren'tyourprofitstwiceashigh?Whatisholdingyouback?Whatisconstrainingyou?Whatisthelimitingfactor?

BottlenecksExistEverywhereIneverycomplexactivity,fromtheproductionprocessofahugefactorytothejobofgettingfromhometoworkinthemorning,thereisalimitingfactororconstraintofsomekindthataffectsthespeedatwhichyouachieveyourgoal.Thisbottleneckorchokepointdetermineshowfastyougettheresultyoudesire,anditoftendeterminesthesuccessorfailureoftheentireprocess.

Theeliminationofasingleconstraintcanspeeduptherateatwhichyougettheresultsyoudesiresovastlythatitwillamazebothyouandeveryonearoundyou.Oneofthemostimportantstrategicthinkingexercisesyouengageinisconstraintanalysis,learningtoidentifyandfocusontheoneactivitythatcanhelpyouachievethedesiredresultfasterthaneverbefore.

Internalvs.ExternalConstraintsThe80/20Ruleappliestoconstraints.Approximately80percentoftheconstraintsorlimitingfactorsinyourcompany'sabilitytoachieveitsgoalsareinternal,notexternal.Approximately80percentofthereasonswhyyouarenotdoublingyoursalesanddoublingyourprofitabilityareinsideyourorganization.Onlyabout20percentareoutsideintheexternalmarketplaceorarecausedbyexternalfactors.

Theseinternalconstraintsmaybecontainedintheworkprocessitself.Perhapsitneedstoberevisedpartiallyorcompletelysothatitfunctionsfasterandmoreefficiently.Theconstrainttobusinessgrowthcouldbethelackofaparticularpersonorskill.Sometimestheadditionofonehighlycompetentpersoninaparticularareacantransformtheresultsofthewholebusiness.

IncompetenceasaConstraintThereversemightalsobetrue.Theconstraintmightbethepresenceinakeyjobofanincompetentpersonnoonehasthecouragetoconfrontorremove.Itisamazinghowmanybusinessesgetintoserioustrouble,orevengobroke,becauseoftheunwillingnesstodealeffectivelywithanincompetentperson.

Yourconstraintsmaybealackofsalesormarketingability.Youmayhaveagoodproductorservice,butyoudon'thaveskilledpeopletosellit.Manycompaniesgooutofbusinessforthisreasonalone.

TheWrongProductYourinternalconstraintcouldbeaproductorservicethatisinappropriatefortoday'smarket.Nomatterhowhardyouworkorhowcompetentyourpeopleare,therearesimplynotenoughcustomersforwhatyouaretryingtosell.Theanswertoalleviatingthisconstraintonsalesandcashflowistodeveloporoffersomethingforwhichthereisgreaterdemandamongyourpotentialcustomers.

Yourconstraintcouldbeinefficienciesinproductionanddeliverythatleadtorisingcostsorreducedrevenues.Itcouldbedefectsinyourproductsorservicesthatarecausingcustomerdissatisfaction,productreturnsandrefunds,problemswithpayment,andotherdifficulties.

TakeChargeofYourSituationOnly20percentofyourproblemsandconstraintsareoutsideofyourbusinessandyourdirectcontrol.Only20percentofyourproblemsarecausedbythemarketplace,yourcompetitors,orotherexternalfactors.Thisisnottosaythatimportantexternalfactorsmaybelimitingyourgrowthandprofitability,buttheplacetostartlookingforyourproblemsiswithinyourorganization,beforeyoubeginlookingoutside.

Itisabsolutelyessentialforbusinesssuccessthatyouidentifyandfocusonyourmajorconstraintorchokepoint,whateveritmaybeatthetime.Bringallofyourenergyandattentiontobearonalleviatingtheonefactorthatissettingthespeedatwhichyouachieveyourmostimportantbusinessgoals.Successinthisareacangiveyouagreaterpayoffthananythingelseyoucandowiththesametimeandenergy.

Constraintanalysisandremovalcanmakethedifferencebetweenbusinesssuccessandfailure.ItisakeypartoftheTurbostrategyprocess.Oneoftheworstthingsyoucandoistoidentifyandfocusyourattentiononthewrongconstraint,leavingtherealconstraintinplace.

IdentifyYourPersonalConstraintsThinkaboutyourpersonallifeandgoalsaswell.Askyourself,"Whataremymostimportantgoals?WhyamInottherealready?Whatisitwithinmethatisholdingmeback?"

Isitthelackofaparticularquality,attribute,orskillthatsetsthespeedatwhichyouachieveyourgoals?Isitaparticularattitudeorbeliefthatisholdingyouback?Andmostimportant,whatcouldyoudoimmediatelytoalleviateyourkeyconstraints?

EliminatetheBottlenecks1. Setclear,measurablegoalsforsalesandprofitability.Nowask,

"WhatdeterminesthespeedatwhichIachievethesegoals?"

2. Usesentence-completionexercises.Say,"Wecoulddoubleoursalesifitweren'tfor…"andfillintheblank.

3. Identifythemajorblocktoachievingyourmostimportantgoal?Howcouldyouremoveit?

4. Lookwithinyourcompanyforthelimitingfactorsthatholdyouback.Whatarethechokepointsinyourbusiness?

5. Assesseachpersonineachkeyposition.Aretheycompetentandcapableofdoingwhatneedstobedoneforyoutobesuccessful?

6. Onceyouhaveidentifiedyourkeyconstrainttobusinesssuccess,ask,"Whatelseisholdingusback?"Keepasking,"Whatelse?"untilyougettotherealproblem.

7. Inyourowncareerandpersonallife,whatsetsthespeedatwhichyouachieveyourgoals?Lookwithinyourselffortheanswers.

Chapter17:ReengineerYourCompany

OverviewTheproductivityofaworkgroupseemstodependonhowthegroupmembersseetheirowngoalsinrelationtothegoalsoftheorganization.--PaulHersey

Yourgoalshouldbetobuildasleek,efficient,highlyprofitablebusinessorganizationwithnowasteorfat,streamlinedtooperatesmoothlyineveryrespectandinanymarket.Theonlyquestionyoushouldaskis,"HowamIgoingtoachievethisgoal?"

Thereengineeringprocess,madefamousbyMichaelHammerandJamesChampyintheirbookReengineeringtheCorporation,referstojustonething—simplifyingtheprocessofdoingbusinesssothatitismorestreamlinedandefficient,fasterandmoreeffective,andthereforemoreprofitable.

TheBattleAgainstComplexityIneverypartoflife,andespeciallyinbusinessandbureaucracy,thereisanaturaltendencytowardcomplexity.Stepbystep,eventhesimplestprocessbecomesmoreinvolved,requiringevermoreactivitiestoaccomplishthesameresult.Eachnewstepseemslogicalatthetime,buttheadditionalstepsgraduallyincreasethecostanddecreasetheefficiencyoftheentireprocess.

TheLawofComplexityOvermanyyearsofworkingwithbusinessesandorganizations,IhavedevelopedwhatIcall"TheLawofComplexity."Thislawstatesthat"Thecomplexityofaprocessincreasesbythesquareofthenumberofstepsinthatprocess."

Complexityisdefinedas"thepotentialincreaseincostandtimeandinthenumberofmistakesthatoccurincompletinganytaskorfinishinganyproject."

Animportantpartofthisdefinitionisthewordpotentialwithregardtocosts,time,andmistakes.Itdoesnotmeanthatacomplexprocesswilldefinitelysufferalltheadditionalcostsanddelaysgenerallycreatedbyaddingsteps.Itsimplymeansthattheprobabilitywillincreasedramaticallyasthecomplexityincreases.

Simplevs.ComplexTasksThisishowthelawofcomplexityworks.Ifthereisonlyonestepinaprocess,thesquareofoneisstillone.Thelevelofcomplexityisverylowinasingle-stepactivity.Thepotentialcosts,time,andmistakesarelowaswell.Forexample,ifyoudecidetomakeaphonecall,andyoudoityourself,theactionissimpleanddirect.Thereisvirtuallynocomplexity.Thenumberofmistakesyoucanmakeisonlyone,misdialingthenumber.

Onceyouaddasecondstep,youhaveacomplexityleveloftwo.Thenumbertwosquaredisfour.Thelevelofcomplexityhasnowjumpedfromonetofour,andthelikelihoodofmistakes,increasedcosts,anddelayshasgoneupby400percent.Anexampleofthiswouldbeifyouaskedsomeoneelsetomakeaphonecallforyoutorelayamessageandgetareply.Theroomformiscommunicationandtheprobabilityofmissedmessagesjumpdramatically.

ExponentialIncreasesIfyouaddathirdstep,thenumberthreesquaredequalsnine.Thecomplexitylevelisnownineintermsofpotentialcosts,delays,andmistakes.Forexample,letusimaginethatyouasksomeonetoasksomeoneelsetomakeaphonecallforyou,relayamessage,andgetananswer.Thepotentialformiscommunication,andalltheincreasedcosts,delays,andproblemsthatmaygoalongwiththisconfusionhavejumped900percentfromwhenyouthoughtofmakingthecallyourself.

Asyoukeepaddingmoresteps,thelevelofcomplexitybeginstoincreaseexponentially.Onceyouhaveaprocesswithtenorfifteensteps,thecosts,time,andpossiblemistakesgothroughtheroofandoutofsight.Thisprincipleexplains$3,500toiletseatsinthemilitaryandthehundredsofmillionsofdollarsofwastethathastobewrittenoffingovernmentprojectseachyear.Thecomplexitylevelsaresohighthatittakesyearstogetsomethingdone,thecostsarehorrendous,andthereareusuallynumerousmistakes.

ReducetheStepsThekeytosimplifyingandstreamliningyourworkandyourbusinessliesinyourabilitytoreducethenumberofstepsineachprocess.Whenyoureduceaprocessbyasinglestep,asingoingfromfivesteps(acomplexityleveloftwenty-five)tofoursteps(acomplexitylevelofsixteen),youreducethepossiblecosts,delays,andmistakesbyafactorofnine!Asyoureducesteps,youspeedupyourabilitytogetresults,atlowercost,andwithfewermistakes.

Intheprocessofreengineering,youstoptheclock—likecallinga"timeout!"inafootballgame—onaparticularbusinessactivitythathasbecomecomplexandtime-consuming.Youthenanalyzeeverystepinvolvedintheprocessofdoingthatjob,writingthestepsdowninorder.

SimplifytheProcessOnceyouhavemadealistofeverystep,yougothroughthelist,lookingforwaystoreducestepswhereveryoupossiblycan.Youknowthatevenasinglestepreductioninaprocesswilldramaticallyreducethecomplexityandtherebyincreasethespeedatwhichthejobortaskisaccomplished.

Youactasyourownmanagementconsultantandaskhardquestions,justasyouwouldifyouhadbeenhiredfromtheoutside.Askwhyeverysinglestepisbeingtaken.Whatisitspurpose?Whyisitbeingdoneinthisparticularway?

Thesecondstageofreengineeringisforyoutogothroughthelistwiththegoalofeliminatingatleast30percentofthestepsthefirsttimethrough.Thisisvirtuallyalwaysachievable,sometimestotheamazementofeveryoneinvolved.Itjusttakesalittleimagination.

CollapsetheProcessHereisanexample.NorthwestMutualLifeAssuranceCompany,priortoreengineeringtheprocess,requiredsixweekstoapprovealifeinsurancepolicyapplicationfromthefield.Bythetimetheapprovalgotbacktotheagent,theprospectiveclienthadoftendecidedtogosomewhereelseornottobuythepolicyatall.

Whentheyanalyzedthesix-weekprocess,theyfoundthatthereweretwenty-fourstepsintheapprovalordisapprovalofalifeinsuranceapplication.Twenty-fourdifferentpeoplehadtoexaminesomepartoftheapplication.Butthetotalamountoftimeactuallyspentoneachapplicationturnedouttobeonlyseventeenminutes.

Itturnedoutthatthisprocesshaddevelopedovermanyyearsasawayofavoidingmistakesinpolicyapprovals.Eachtimeamistakehadbeenmadeinthepast,anothercheckorcontrolwascreatedtocatchthemistakeinthefuture.

Theprocesshadobviouslybecometoocumbersomesotheydecidedtoreengineerit.Themethodturnedouttobequitesimple.Theyconsolidatedtwenty-threeofthetwenty-fourstepsintoasinglejobforasingleperson,whocheckedeverydetailofthepolicybeforesendingittoasupervisor.Thesupervisorsimplycheckedthefirstperson'sanalysisandgaveanapprovalordisapproval.Theanswerwentbacktothefieldwithintwenty-fourhours.Asaresultofthisnewspeedofprocessing,NorthwesternMutualwasabletowritemanyhundredsofmillionsofdollarsofadditionalinsuranceeveryyear.

ConsolidateandEliminateStepsInreengineering,youfirsteliminateeveryunnecessarystepthatyoupossiblycan.Next,youlookforwaystoconsolidatestepsintoonejobsothatmoreofthemcanbedonebyasinglepersonoratthesametime,ratherthanbeingstretchedout.

Insomeofthesmall,efficientairlinestoday,youwilloftenfindthatthepersonwhochecksyouinandgivesyouyourticketisthesamepersonwhoclearsyouontotheplaneatboarding.Then,youlookupandfindthatheorsheistheflightattendant.Whenyouarrive,heorsheisbusygatheringnewspapersandcleaningupforthenextflight.Atsomeairlines,eachofthesejobsisdonebyadifferentperson.Whichairlinesdoyouthinkarethemostprofitableandefficient?

OutsourceEverythingPossibleInyourdriveforsimplification,lookforwaystooutsourceeveryjobthatanothercompanycandoinsteadofyou.Anyfunctionthatisnotapartofyourcorebusinessisacandidateforoutsourcing,fromaccountingtocomputer/Internetmaintenancetopayrolltoprinting.Companiesthatspecializeinaparticularbusinessfunctioncanusuallydoitcheaperandbetterthanyoucananyway.

DelegateLower-ValueTasksDelegateanypartsofyourworkthatcanbedonebyotherpeoplesoyoucanfocusontasksofhighervalue.Discontinueanyactivitiesthatdon'tcontributevaluetoyourproducts,yourservices,oryourcustomers.Constantlyseekwaystoreducethenumberofstepsinyourworkprocess.

Habitisaterriblething.Youcanbecomecomfortabledoingthingsinacertainwayandbereluctanttochange.Butifyouaregoingtofreeupyourtimeandresourcestodomoreofthosethingsthatyourcustomersreallyvalue,youmustbeabsolutelyruthlessaboutconsolidating,outsourcing,delegating,andeliminatingasmanypartsoftheworkaspossible.

RootItOutAstepinaworkprocessisverymuchlikecrabgrass.Ifyoudon'trootitoutcompletely,itgrowsagainintoincreasedcomplexity.Sometimesthesmartestthingyoucandoistostopaparticularactivityaltogether.Eliminateitcompletely.Ifitdoesn'tcontributesignificantvalue,orifyouwouldn'tstartitagaintoday,abandonitandinvestyourtimeandenergyinmoreimportanttaskswithahigherpotentialpayoff.

Practicemanagementbyresponsibility.Givethecompleteresponsibilitytoanotherpersontodothejobinitsentiretysothatyoucanbefreeofitcompletely.Lookforwaystosimplifyandreducecomplexity.

FindSomeoneElsetoDoItWhenyoubeginyourcareer,youwillfindyourselfdoingagreatnumberoftasks.Asyourisetopositionsofgreaterresponsibility,itisnaturalthatyoubringtheseoldtasksalong,likeoldfriendswhosecompanyyouhavecometoenjoy.Itisthemostnaturalthinginmanagementtofallbackintodoingthosethingsyouhavealreadymastered,especiallyunderthepressureofdeadlines,orwhenyouarefeelingimpatient.

Youhaveheardtheoldadage:"Ifyouwantsomethingdoneright,youhavetodoityourself."However,thatisold-schoolthinking.Today,thecorrectresponseis"Ifyouwantsomethingdoneright,youhavetofindsomeoneelsewhocandoitalmostaswellas(orbetterthan)you."

ManagebyExceptionAnotherwaytosimplifyyourworkisforyoutomanagebyexception.Onceyouhaveassignedajobtoacompetentperson,requirereportingonlyifthereisadeviationfromwhatyouhaveagreedupon.Avoidthetendencytoovermanageortorequirecontinuousapprovalsastheprocessgoesalong.Simplify,simplify,simplify.

MakeFaster,BetterDecisionsAnotherwaytospeeduptheworkprocessistomakedecisionsquickly.Don'tletthempileup.Don'tkeeppeoplewaiting.Oftenthefailureorreluctancetomakeadecisionactslikeapluginadrain.Itstopsupthewholeprocess.Nooneelsecandotheirworkwhiletheywaitforsomeoneelsetodecide.

Oneofthebestwaystospeeduptheprocessofdecision-makingistodelegateittoothers.Encourageyourstafftomakedecisionsbasedontheirowncommonsense,withoutreferringtoyouorgettingyourpermission.Whenevertheybringyouaproblemoraquestion,alwaysask,"Whatdoyouthinkweshoulddo?"

Whatevertheiranswer,withinreason,letthemdoit.Youwillbeamazedathowquicklypeoplegrowindecision-makingabilityandhowwelltheirdecisionscomeout.Practicetherule:"Ifitisnotnecessaryforyoutodecide,itisnecessaryforyounottodecide."Thisisagreatwaytosimplifyyourlife.

OperateinRealTimeFromnowon,makeitagametoreduceprocessingtimeineveryarea.Thinkintermsofspeedandefficiency.Developandencouragea"senseofurgency"ineveryonearoundyou.Trytooperatein"realtime"bydoingthejobthemomentitcomesup.Workquicklyonceyougetstarted.Getthejobdonefast.

Wheneveranyonesuggestsaddinganadditionalsteptoanyjoborproject,putahalttoitimmediately.Fortherestofyourbusinesscareer,lookforwaystogetthingsdonefasterandeasierbyreducingstepsandtherebyreducingcomplexity.

SimplifyYourPersonalLifeTakeaninventoryofyourpersonallife.Lookespeciallyattheareaswhereyoufeeloverwhelmedwithtoomuchtodoandtoolittletime.Thenmakeadecisiontoreengineeryourlife.

Continuallyseekoutwaystoreducecomplexitybyreducingthenumberofstepsineachprocess.Lookfortasksandactivitiesthatyoucandelegate,downsize,andeliminate.

Meanwhile,resolvetospendmoretimedoingthethingsthatyoumostenjoy,andwhicharemostimportanttoyoursuccessandhappiness.

ReengineerYourCompany1. Practicesimplificationasawayoflife.Inwhatareasofwork

hasyourlifebecometoocomplicated,andwhatcanyoudotogetitbackundercontrol?

2. Practicezero-basedthinkingwitheverystepandeveryactivity.Ifyouwerenotnowdoingitthisway,wouldyoustartdoingitthiswayagaintoday?

3. Takeasinglecomplexprocessorjobandmakealistofeverystepfrombeginningtoend.Howcouldyoureducethenumberofstepsby30percentthefirsttimethrough?

4. Whattasksoractivitiescouldyoudelegatetosomeonewhocandothem70percentaswellasyou?

5. Whatpartsofyourbusinesscouldyououtsourcetocompaniesorindividualswhospecializeinthatarea?

6. Whatpartsofyourworkcouldyoueliminatealtogetherwithlittleornoimpactonyourbottomline?

7. Whatpartsofyourpersonallifedoyouneedtostreamlineandsimplify?Whenareyougoingtodoit?

Chapter18:PumpUpYourProfitsMostsuccessfulmenhavenotachievedtheirdistinctionbyhavingsomenewtalentoropportunitypresentedtothem.Theyhavedevelopedtheopportunitythatwasathand.--BruceBarton

Thereisatruismthat50percentofadvertisingiswasted,butnooneeverknowsforsurewhich50percentitis.Asaresult,advertisingbudgetsalwaysseemhigherthannecessary.Thisproblempersistsinmanyareasofmanybusinessestoday.Moneyisbeingwasted,butnooneisexactlysurewhereandhowitishappening.

LowProfitsorNoProfitsManycompaniestodayareearninglowprofitsornoprofitsbecausetheircostsofdoingbusinessarenotcoordinatedwiththeirsales.Manyproductsandservicesarepricedbypeoplewhoarecompletelyunawareoftherealcostsinvolvedinbringingthoseproductsorservicestothemarket.Thesemistakesinpricingarethenburiedintheoveralloperationsandgeneralrevenuesofthebusiness.

You'veheardthesaying,"Welosemoneyoneverysale,butwemakeituponthevolume."

Inmanycases,thisisnotajoke.Itiscommonforcompaniestohavetoomanyproductsorservicesattoomanypricepoints,aimedattoomanymarketsandsoldintoomanydifferentways.Manyofthesecompaniesarelosingmoneyonthesalesofcertainproducts,ormakingfarlessthantheycouldbeiftheyknewthetruecostsofbringingthoseproductsorservicestomarket.

ConductaProfitAnalysisonEveryProductOneofthemostimportantpartsoftheTurbostrategyprocessisforyoutoconductacompleteprofitanalysisoneachproductorserviceyousell.Veryfewcompanieshaveeverdonethis.Butwhenyoubeginapplyingprofitanalysisinyourcompany,youcanoftenincreaseyourprofitsdramatically.

Youbegintheprocessofprofitanalysisbyapplyingthe80/20Ruletoeverypartofyourbusiness.Youdeterminewhich20percentofyourproductsorservicesaccountfor80percentofyoursales.Thenyoudeterminewhichproductsorservicesaccountfor80percentofyourprofits.Youwillbesurprisedtolearnthattheanswerstothesetwoquestionsarenotnecessarilythesame.

Youthenanalyzeyourcostsanddeterminethe20percentofactivitiesthataccountfor80percentofyourexpensesofdoingbusiness.Youanalyzeyourcustomerstodeterminethe20percentwhorepresent80percentofyoursales.

High-Volumevs.High-ProfitCustomersAsyouexaminethesenumbers,youwillfindthat,inmanycases,yourbiggestcustomersarenotyourmostprofitablecustomers,andyourbiggestsellingproductsorservicesarenotyourmostprofitableoneseither.Youmayfindthatyourcostsofdoingbusinesswithsomecustomersandwithsomeproductsaresohighthatitishardlyworththeinvestmentofpeopleandresources.Thiscanonlybedeterminedbytakingahardlookatthenumbers.

Whenaturnaroundspecialisttakesoveracompanyintrouble,sheimmediatelyconductsaprofitanalysis.Sheanalyzeseveryproductorservicetodeterminequicklywhichonesarethemostprofitable,whicharethesecondmostprofitable,andwhicharetheleastprofitable.

Oncethisanalysisiscomplete,theturnaroundspecialistmovesquicklytodiscontinue,selloff,andclosedownunprofitableelementsofthebusiness.Hersolefocusisoncashflow,whichcomeslargelyfromsellingsomethingandgettingpaidforitquickly.

FocusonCashFlowYouneedtobeyourownturnaroundspecialistallthetime,andmostespeciallywhenbusinessslowsforanyreason.Topumpupyourprofits,youdoacompleteprofitanalysisonyourbusinessandmoveimmediatelytofocustheenergiesofthecompanyonthoseareasthatrepresenttheverybestsourcesofnetcash.Thisprocessrequiresthatyoucontinuouslyanalyzeyourbusinesssothatyouknowexactlytheprofitabilityofeveryproductandserviceyousellincomparisonwitheveryotherproductorserviceyousell,rightdowntothepenny.

Manycompanies,astheygrow,fallintothehabitofincludingmoreandmoreexpensessuchassalaries,rent,telephones,travel,andevenadvertisingunderthecategoryof"GeneralandAdministrative."Onlycoststhatcanbedirectlyattributedtoaspecificproductorserviceareusedforcostingpurposes.Asaresult,manycostsget"buried"inthebookkeeping,andeventhepersoninchargeisnotawareoftheexactsourcesandusesofcash.

FromMosttoLeastProfitableThefactisthat,withalittleeffort,everysingleproductorservicecanbeorganizedonascalefromthemostprofitabletotheleastprofitable,bothonaperitemorperhourbasis,andinnetdollaramounts.Thereisalwaysonethatismoreprofitablethananyother.Thereisasecondthatfollowscloselybehindthefirst.Thereisathirdandafourth,andsoon.Yourjobistodetermineexactlywhattheyareandinwhichorder.

DeterminingProfitabilityYoubeginyourprofitanalysisbydeterminingtheexactgrosssalesrevenuesthatyoureceivefromaproductorserviceafterallsubtractionsfordefects,returns,breakage,loss,wastage,andbaddebts.Takeeverysingledeductionsothatyourgrossdollaramountiscompletelyaccurate,andyouarecrystal-clearabouttheexactamountyouarenettingfromsales.

Onceyouhaveanaccuratetop-linefigure,thenextstepisforyoutodetermine100percentofthecostsofprovidingthatproductorservicetothecustomer.Theseincludethedirectcostsofproducinganddeliveringtheproductorservice,plustheindirect,variable,semi-variable,andfixedcoststhatmustbeallocatedtogetanaccuratenumber.Youmustbeabsolutely,brutallyhonestwithyourselfindeterminingthesecosts.

ApportionCostsAccuratelyYoumustcalculateanddeductapercentageofthelaborcostsofeverypersonintheorganizationwhohasanythingtodowiththeproductorservice.Youshoulddeductaportionoftherent,theelectricity,thetele-phones,theutilities,andallgeneraladministrationcosts.Thesearerealcostsofdoingbusinessthatmustbeincludedforyoutogetanaccurateassessmentofthatproduct'sprofitability.

Now,ifyouhaven'tdoneitalready,youdeductapercentageofallcostsofadvertising,promotion,marketing,labor,commissions,and,especially,yourowntimeinvestment,andthetimeinvestmentofotherexecutives,basedonyourandtheirhourlyratesfromeachunitofproductorservicesold.

CalculatetheHourlyRatesPeopleareoftenconfusedaboutthesubjectofhourlyrate.Thefactisthatitcostsacompanythreetosixtimesaperson'ssalarytokeephimorheremployed.Theadditionalcostsareincludedinbenefitsprovided,thecostsoftheofficesandotherfacilitiesapersonneedstodohisorherjob,vacations,pensionplancontributions,andthecostofothermanagersandstafftosuperviseorsupporthim.

Usingasimplecalculation,youcandivideyourannualincomeby2,000hours,theaverageAmericanworkyear,togetyourhourlyrate.Forexample,ifyouearn$100,000peryear,dividedby2,000,yourhourlyrateisequalto$50perhour.Therefore,everyhouryouspendonaproductorprojectiscostingyourcompanythatamountindirectsalarycost,plusatleasttwicethatamountinassociatedor"indirectcosts."Thisistherealfigurethatmustbeincludedtocalculatethetrueprofitsthatthecompanyearnsfromaproductoracustomer.

IncludetheOpportunityCostsManysmall-businessownersandmanagersforgetthattheirlaborhasareal"opportunity"cost.Ifitwereappliedtoanothertask,itcouldbegenerating$50,$100,andmoreperhour.Ifyouspendonehourworkingonasale,youmustaddonehourofyourtimetothecostofmakingthatsaleordeductthecostofonehourfromtheprofitthecompanymadefromthatsale.

Manycompaniesfindthat,becauseofthedemandsthatsomecustomersplaceontheirexecutivesandstaff,thecompanyisactuallylosingmoneyeverytimeitdoesbusinesswiththatparticularcustomer.Wecallthisa"highmaintenance"customer.Themoretimeyouspendwith"highmaintenance"customers,thelesstimeyouhavetospendwithothercustomerswhomaybemoreprofitableintermsofnetdollarstoyourbusiness.

RankAllYourProductsNowyouarereadyforthenextstep,rankingallyourproductsorservices,fromthemostprofitabletotheleastprofitable,onalist.Whatisyournumber-one,mostprofitableproduct,afteryouhavedeductedallyourpossiblecosts,bothdirectandindirect?

Oftenthereislittleornorelationshipbetweentheamountoftimeandmoneyyouspendcreatingandsellingaproductandtheamountofprofityouearnonthatproductafterallcostsarededucted.Sometimesyourmostprofitableproducts,activities,orcustomersaretakenforgrantedorgounnoticed.

Identifyyourmostprofitableandyourleastprofitablecustomers.Whatarethecommoncharacteristicsofeachtype?Howcouldyoustructureyourbusinesssothatyouattractandkeepmoreofthosecustomersthatrepresentthemostprofitforwhatyousell?

FacetheBitterTruthYouwillprobablyfindthatfullyhalfofyourproductandserviceofferingsaregeneratingverylittleprofitorevencausingyoutolosemoneywitheverysale.Aturnaroundspecialistwouldimmediatelyeitherraisethepricesofthelow-profititemsordiscontinuethemaltogether.Youmustdothesame.

Youcanoftentransformyourresultsandincreaseyourprofitabilityquicklybyapplyingarigidprofitanalysistoeverythingyousell.Youcouldprobablydiscontinue80percentofyourproductorservicelineswithoutanygreatloss.Youcouldthencommit100percentofyourpeopleandresourcestothe20percentofproductsorservicesthataccountfor80percentofyourprofitstoday.Thinkaboutwhatadifferencethatwouldmake!

Takealong-termperspectiveonyourbusiness.Thinkaboutyourbestandmostprofitableproductsoftoday.Thenthinkaboutyourbestandmostprofitableproductsofyesterday.Basedonthetrendsinyourbusiness,whatarelikelytobeyourmostprofitableproductsandservicesoftomorrow?Remember:"Thebestwaytopredictthefutureistocreateit."

LookIntoYourselfFinally,lookatyourselfasabusinessaswell.Identifythefewthingsyoudothatmakethegreatestcontributiontoyourorganization.Whatactivitiespayyouthehighesthourlyrate?Whataretheopportunitiesoftomorrowforyou?Whatadditionalskillsandcompetenciescouldyouacquirethatwouldmakeyouevenmorevaluableinthemonthsandyearsahead?Whatevertheyare,thetimetostartlearningthemisnow.Thereisnotimetowaste.

PumpUpYourProfits1. Doacompleteprofitanalysisoneveryproductandserviceyou

offer.Rankthemfromhighesttolowest.

2. Identifythe20percentofyourproductsthataccountfor80percentofyoursales.Whicharethey?

3. Identifythe20percentofyourproductsandservicesthataccountfor80percentofyourprofits.Aretheythesameasyouranswerto#2?

4. Afterdeductingalldirectandindirectcosts,whichareyourmostprofitableproductsorservicesbasedoncostandreturnoninvestment?

5. Howmuchisyourtimeworthonanhourlybasis?Buildthiscostintoeverythingyoudotogetanaccuratemeasureofcostsandprofitability.

6. Attributeapercentageofallgeneralandadministrativecoststoeachproductorserviceyousell.Thisexerciseoftenturnsprofitsintolosses.

7. Ifyourcompanywerefacingseriousfinancialshortages,whichproductsorserviceswouldyoufocusyourenergieson,andwhichwouldyoudiscontinue?Thinkaboutdoingitnow.

Chapter19:CommittoContinuousImprovement

OverviewThequalityofaperson'slifeisindirectproportiontotheircommitmenttoexcellence,regardlessoftheirchosenfieldofendeavor.--VinceLombardi

ThequalityrevolutioninAmerica,whichstartedinJapan,hassweptacrossthecountryandtransformedthewaywedobusiness.Atonetime,havingaqualityproductwasnecessaryifyouwantedtogrowinmarketshareandprofitability.Today,youmusthaveahigh-qualityproductifyouwanttogetintothemarketinthefirstplace.Qualitytodayisbothexpectedanddemandedbyeverycustomerineverythingyousell.

Thegoodnewsisthattherearenumerouswaysyoucanimproveinalmosteveryareaofyourbusiness.Yourjobistolookforwaystodothingsbetter,cheaper,andfastereveryday.Youmustactasifyouarebeingpursuedbyanaggressivecompetitorwhoisdeterminedtoputyououtofbusinessbysatisfyingyourcustomersbetterthanyoucan.

TheQualityRevolutionAfterWorldWarII,Japanwasdevastatedandtheeconomywasinruins.Thefirstattemptsatrecoveryledtothemanufactureofcheapgoodsforexport,especiallytoAmerica.Theseearlyproducts,whichfloodedintotheU.S.marketinthe1950s,wereofsuchpoorqualitythattheywerenicknamed"Japscrap."

Inthe1950s,anAmericanmanagementconsultantvisitedJapantoadvisethemonquality-controlmethods.TheJapanesewelcomedhisideaswithsuchenthusiasmthathespentthenextfewdecadesthere.HechangedJapanandtheJapaneseeconomyforever.

TheKaizenMethodW.EdwardsDemingintroducedtheconceptofcontinuousimprovement,whatcametobecalledthe"Kaizenmethod"ofqualityimprovement,intoJapanesemanufacturing.ThissinglemethodenabledtheJapanesetoevolveinafewyearsintoanationwithareputationforhigh-qualitymanufacturinginvirtuallyeveryarea.

TheJapanesewordkaizenmeans"continuousbetterment."Thisissometimesreferredtothisastheprocessof"ContinuousAndNever-EndingImprovement"orCANEI.Thisapproachtobusinessisbasedonthebeliefthatitispossibletogetbetterateverythingyoudo,continuously,withoutend.

ANewWayofThinkingWhentheKaizenprocessisintroduced,everyoneateverylevelofthebusinessisencouragedtolookforwaystodotheirjobsandproducetheirproductsorservicesbetter,faster,orcheaper.Managementusessuggestionboxes,brainstormingmeetings,bonussystems,andconstantencouragementtogeteveryonethinking,allthetime,abouthowtoconductthebusinessinabetterway.

Continuousimprovementdoesnotrequiregreatbreakthroughideastorevolutionizethewaybusinessisdone,althoughthesebreakthroughsoccasionallyoccur.Instead,"line-of-sight"improvementsareencouragedineveryjob.Thisline-of-sightapproachisbasedonthebeliefthateveryonecanseelittlethingstheycandotoimprovetheirworkintheirownpersonallineofsight.

ItStartsfromtheTopEncourageeachpersontofindwaystodotheirjobsbetter,faster,andmoreeasily.Allowthemthefreedomtoexperimentwithimprovementswithnofearofcriticismiftheydon'twork.Sometimesthegreatestimprovementsoccurastheresultofaseriesofsmallexperimentsthatwerenotsuccessful.

Youshouldstandbackregularlyandexamineeveryproduct,service,andprocess.Howcouldyouimproveitinsomeway?Howcouldyoumakeitbetter,faster,orcheaper?Howcouldyougetthesameorbetterresultsfasteroratalowercost?Neverbesatisfiedorcontentwithexistingqualitylevels.Alwayslookforwaystoimproveuponthem.

Brainstormwithyourteamregularlytogenerateideastocutcosts,improvequality,increasesales,andboostprofits.Encourageeveryonetothink,alldaylong,abouthowtheycandotheirjobsbetter.Makethiscommitmenttocontinuousimprovementapartofyourcorporateculture.

TotalQualityManagementThetotalqualitymanagement(TQM)movementisbasedoncarefullyanalyzingeverystepofeveryprocessandthenlookingforwaystoimprovecontinuouslyineveryarea.Oneimprovementinakeyareacangiveyouacompetitiveadvantageinatoughmarket.

Inacompetitivebusiness,ifyoudon'tupgradeyourquality,yourcompetitorswillupgradetheirsandtakeyourbusinessaway.Thefactisthatwhatevergotyoutowhereyouaretodayisnotenoughtokeepyouthere.Whateveryouaredoingtoday,youwillhavetobedoingitconsiderablybetterayearfromnowifyoustillwanttobeinbusiness.

Remember,yourcompetitorsarethinkingdayandnightabouttakingyourcustomersawayandputtingyououtofbusiness.Thefastestandbestwaythattheycandothisisbyofferingcompetitiveproductsatthesamepricebutatahigherlevelofquality.Yourgoalistosurpassthemintheareaofqualityimprovementbeforetheysurpassyou.

BenchmarkYourselfAgainstOthersOnewaytokeepontheleadingedgeofcontinuousimprovementistobenchmarkyourselfagainsttheverybestpeopleandcompaniesinyourbusiness.Selectaparticularfunction,suchassales,manufacturing,distribution,orcustomerservice,andthendeterminewhoexcelsinthebusinessinthatarea.Findoutwhattheyaredoingandcopyittheverybestwayyoucan.Onceyouhavecopiedthebest-in-class,lookforwaystoimproveandbecomeevenbetterthantheyare.

BetheBestatWhatYouDoSetexcellenceasyourstandardandstrivetowarditeveryday.Telleveryoneinyourcompanythatyourgoalisto"bethebest"inyourproductorservicecategory.Beextremelydemandingintermsofqualitystandards.Setahighstandardforothers.

Refusetoallowanyproductorservicetogooutthedoorthatisnotexcellentineveryrespect.Ifyouhearofacustomerwhoisdissatisfiedbecauseofaproductdefect,youshouldtakeitasapersonalaffront.Immediatelyapologizetothatcustomerandthendowhateveryoucantocorrecttheerror.Customersatisfactionshouldbethedrivingforcebehindeverythingyoudoinyourbusiness.

CommittoExcellenceOneofthegreatestmotivatorsintheworldofworkistoknowthatyouareworkingforacompanythatiscommittedtoexcellence.Ifyoucouldonlyownonewordinthemindsandheartsofyourprospectsandcustomers,itwouldbetheword"Best!"Ifeveryoneinyourmarketplacereferredtoyouandyourofferingsas"thebestinthebusiness,"whatkindofdifferencewouldthatmakeinyoursalesandprofitability?

Withthatasyourgoal,whatwouldyouhavetodo,startingtoday,toensurethateveryonereferstoyouas"thebest"sometimeinthefuture?Whatcouldyoudo,startingtoday,tobeginthisprocess?Whatisthefirststepyoushouldtake?

QualityandProfitabilityAccordingtotheHarvardProfitImpactonMarketStrategies(PIMS)studies,acompilationofthefinancialresultsofseveralhundredcompaniesoveratwenty-yearperiod,thereisadirectrelationshipbetweenperceivedqualityandprofitability.Thehighertheperceivedqualityofyourproductorserviceincomparisonwiththatofyourcompetitors,themoreprofitableyourbusinesswillbe.

Forexample,ifanindependentresearchcompanyweretoconductapollinyourmarketarea,presentingalistofallthecompaniesinyourbusiness,andask"Whichofthesecompaniesdoyoufeelisthebestinthisparticularindustry?"thecompanythatrankedthehighestinpublicperceptionwouldalsoturnouttobethemostprofitableinthatsector.Thecompanythatwasrankedsecondwouldturnouttobethesecondmostprofitable,andsoon.

Here'sthequestion:Ifsuchasurveyweredoneamongpotentialcustomersforwhatyousell,wheredoyoufeelyourcompanywouldrankinsuchacomparison?Wouldyouberankedas"thebest,"orsomewherelower?Whatcouldyoudotomovehigherintherankings?Whatonestepcouldyoutakeimmediately?

HowDoCustomersDefineQuality?WhenGordonBethunetookovertroubledContinentalAirlines,heorderedastudytodeterminehowflyersdefinedqualityandwhattheywantedmost.Theoverwhelminganswerwas"on-timearrivalsanddepartures."Thisgoalbecamehiscentralfocusforthenextthreeyears.

Anditworked.Continental'spunctualityimproveddramatically.Ason-timearrivalsanddeparturesgotbetterandbetter,sales,profitability,customersatisfaction,employeemorale,andstockpriceallimproveddramatically.Byfocusingon"beingthebest"inaspecificareathatwasofparamountimportancetocustomers,Continentalbecameoneofthemostimpressivebusinessturnaroundsofthe1990s.

WhatDoCustomersWant?Qualityisnotobjective,existingbyitself,norisitdefinedbythecompany.Itisemotionalandsubjective,anditisdefinedbyyourcustomers.Qualityiswhattheysayitis.Toparaphraseafamouslegalopinion,"Ican'tdefineitexactly,butIknowwhatitiswhenIseeit."

Customersdefinequalityintwoparts.Firstistheproductorserviceitself.Aqualityproductorserviceissomethingthatdoeswhatitissupposedtodo.Itdoeswhatthecustomerwaspromisedwhensheboughtit,andcontinuestodoit.

Thesecondpartofquality,fromthecustomer'sviewpoint,isthemannerinwhichtheproductissold,serviced,anddelivered.Thispersonaloremotionalcomponentisoftenmoreimportantthantheproductorserviceitself.Inonestudy,theresearchersfoundthat68percentofcustomerdefectionstothecompetitionwerenotproduct,price,orcapabilitydetermined.Instead,theprimaryreasonforchangingwasaperceivedindifferenceonthepartofsomeoneinthesellingorganization.

RankYourselfAgainstYourCompetitorsGiveyourselfagradeonascaleofoneortenwithregardtothequalityofyourproductorserviceincomparisonwithyourcompetitors.Behonestwithyourself.Askeverybodyintheofficetocontributehisorheropinionsaswell.Askyourbestcustomershowtheywouldrateyouagainsttheothercompaniesinyourbusiness.Whateverscoreyoufinallyagreeon,usethatnumberasyourbaselineforimprovement.

Onceyouhaveanestimateofyourqualityranking,yourgoalshouldbetoimproveitbyonegrade.Forexample,ifonascaleofonetotenyougiveyourselfascoreofseven,youraimwillbetoworkyourselfuptoaneight.Onceyouhaveworkedyourselfuptoaneight,yourgoalwillbetoworkyourselfuptoanine,andsoonuntilyoureachatenranking.Yourlong-termgoalisforcustomerstorefertoyouas"thebestinthebusiness."

YourPersonalQualityRatingThesameprincipleofcontinuousimprovementappliestoyoupersonallyaswell.Identifythemostimportantthingyoudoforyourbusinessandyourcustomers.Giveyourselfagradeinthatareafromonetoten.Askyourcoworkers,yourbossandyourcustomershowtheywouldrateyouinthatarea.Thencommityourselftodoingwhateveryouhavetodotoincreaseyourrankingbyonegradeatatimeuntilyouachieveabsoluteexcellenceinyourkeyskillareas.

PracticetheKaizenmethodofcontinuousbetterment,andtheCANEImethodofcontinuousandnever-endingimprovementineverythingyoudo.Neverbesatisfiedwithyourcurrentlevelofperformance.Everyday,ineveryway,youshouldlookforwaystodoyourjobevenbetterthanthedaybefore.Whatevergotyoutowhereyouaretodayisnotenoughtokeepyouthere.Continuallyraisethebaronyourself.Yourlifeonlygetsbetterwhenyoudo.

CommittoContinuousImprovement1. Howdoyourcustomersdefinequality?Whatismostimportant

totheminchoosingyourproductorservice?

2. Howdoyourankagainstyourcompetitorsonascaleofonetoten?Howcouldyouimproveyourrankingimmediately?

3. Setuparewardsysteminyourcompanyforsuggestionsandideastoimprovequalityandachievegreatercustomersatisfaction.

4. Doyouhavequalityandperformancestandardsforpeople,products,andactivitiesinyourcompany?Doeseveryoneknowwhattheyare?

5. Whatcompanydoyouthinkisthebestinyourbusiness,themostrespectedandprofitable?Howcouldyoubenchmarkyourselfagainstthem?

6. Whatonestepcouldyoutakeimmediatelytoimprovecustomersatisfactionwithyourcompany?

7. Whatcouldyoudopersonallytoupgradeandimprovethequalityofyourperformanceinthemostimportantthingsyoudoinyourjob?

Chapter20:ConcentrateontheCore

OverviewAndhereinliesthesecretoftruepower.Learn,byconstantpractice,howtohusbandyourresources,andconcentratethem,atanygivenmoment,uponagivenpoint.--JamesAllen

Almosteverybusinessbeginswithasingleideaforasingleproductorserviceinthemindsofoneortwopeople.Overtime,withexperience,thiscoreproductchangesandcrystallizes.Iftheproductandthemarketareright,thecompanyturnsthecornerandbeginstogrowinsalesandprofitability.Itdoesmoreandmoreofwhatitdoeswellandeventuallypullsaheadofitscompetition.

Thisisyourcorebusiness.Thisiswhatyoudobest.Thisiswhatyourcustomerslikethemostandwhatismostprofitableforyou.Thisproductorserviceisthefoundationofyourenterprise.Itiswhatyouareknownforandwhatyouaremostcapableofdeliveringinanexcellentfashion.

DefineYourCoreBusinessWhatisyourcorebusiness?Ifeverythingelsewerestrippedaway,whatwouldbeleftatyourcore?Whatisthelastproductorserviceyouwouldstopproducingoroffering?

Whateveritis,thenaturaltendencyofmostpeopleistotaketheircorebusiness,theircriticalproductsorservices,forgranted.Becauseyouaregoodinthatarea,becauseitisacashcowforyou,youbegintoassumeitwillalwaysbethere.Youthenturnyourattentiontootherproductsorserviceswhereyoumayhavelimitedexperience,whereyoumaynotbeverygoodatall.Thishappenstoalmosteverycompany,moreoftenduringperiodsofgrowthandprofitabilityinyourcorebusiness.Itcanbearealdanger.

WatchYourCoreBusinessThemoreyougetawayfromyourcorebusiness,themoretimeandenergyyouwillinvestinthingsthatare"non-core."Youwilluseyourcorebusinesstogeneratethefundsthatyoutheninvestinareasthatturnouttobelessandlessprofitable.Ifyouarenotcareful,someonecancomealongandstealyourcorebusinessawayfromyou.Thenyouwillbeinserioustrouble.

Neverletyourcorebusinessoutofyoursight.InProfitfromtheCore,ChrisZookandJamesAllenexplainthenatureandimportanceofthecorebusinessindetail.Afterworkingwithhundredsofcorporations,ZookandAllenconcludedthatthebestandsmarteststrategyforacompanyinthefaceofcompetitivepressuresorshrinkingmarketsistogetbacktoitscoreandstaythere.

ConcentrateYourAttentionApplythe80/20Rulecontinuouslytoeverypartofyourbusiness.Disciplineyourselftoidentifyandfocusonthe20percentofyourproductsorservicesthataccountfor80percentofyoursalesandprofits.

Determinethe20percentofyourproductsandservicesthataccountfor80percentofyoursalesvolume.Determinethe20percentofyourcustomersthatpurchase80percentofyourproductsandservices.Determinethe20percentofpeopleinyourbusinesswhogenerate80percentofyourresults.

Identifythe20percentofopportunitiesavailabletoyoutodaythatcanberesponsiblefor80percentofyoursalesandrevenuesintheyearsahead.Thesewillalmostalwaysbeextensionsofyourcurrentbusiness,yourcorecompetencies,andyourareasofexcellence.Yourchoiceoftheopportunitiesavailabletoyoulargelydeterminesthefutureofyourbusiness.Whatarethey?

FocusonValueWhatarethe20percentofyourworkactivitiesthataccountfor80percentofyourpersonalvalueandyourcontributiontoyourcompany?Ifyoujustdoubledtheamountoftimeyouspendonthe20percentofyourhigh-valuetasks,anddiscontinuedthe80percentoflow-value/no-valuetasksthatyoudo,youcouldbecomeoneofthemostproductivepeopleinyourcompany.Theseareyourcoretasks.

Whatarethe20percentofproblems,aggravations,andirritationsthataccountfor80percentofyourheadachesinyourwork?Whoarethemostdifficultpeople,customers,orsituationsthatyouhavetodealwitheachday?Whatcanyoudotodaytominimizeoreliminatethem?

Basedonthis80/20analysis,whatstepscanyoutakeimmediatelytoimprove,increase,andstrengthenyourcoreproducts,services,customers,andactivities?Whatshouldyoudofirst?

WhereDoYouExcel?Inwhatareasofyourproductsandservicesareyou,orcouldyoube,betterthan95percentofyourcompetition?Thisiswhereyourgreatestopportunitiesforsales,growth,andprofitabilitywilllie.Thisiswhereyoushoulddedicatemostofyourenergiesandattention.

Thebiggestmistakeyoucanmakeinbusinessistodeviatetoofarfromyourcorebusiness,fromwhatyoudoreallywell.AsmyfriendCharlieJonessays,"Sideroadsareslideroads."

Wheneveryouexperienceproblemswithsalesorprofitability,youshouldgetbacktoyourcorebusiness.Youshoulddomoreofwhatyoudobestanddoitbetter.Keepfocusedonthoseproducts,services,andactivitiesthatgeneratethehighestandmostpredictableprofits.Onlywhenyouhavefullydevelopedandexploitedeverypossibleopportunitytoexpandyourcorebusinessshouldyouexpandordigressintountestedbusinessareas.

YourCitadelStrategyInancienttimes,walledcitieswerebuilttoprotectthecitizensagainstmaraudingtribesandarmies.Asthecitygrew,additionalconcentriccirclesofdefensivewallswerebuilttoencloseandprotectever-greaternumbersofcitizens.Thecitiescametoresembledartboardswithringssurroundingabull's-eye.

Ifthecitywasattackedbyanenemyarmy,thecitizenrywithdrewbehindtheouterringofwallsanddefendedthemselves.Iftheouterwallwasbreached,thedefenderswithdrewtothenextwall.Ifthatwallwasbreached,theywithdrewtothenextwall,andsoon,untiltheywereforcedbackintothemostheavilydefendedpartofthecity,thecitadel.Thecitadelwasthekeytothesurvivalofthekingdom.Aslongasitheld,thecitycouldbesaved.Theenemycouldbebeatenbackandthekingdomrebuilt.

Thecitadelcontainedallthetreasuresofthecityandwasdesignedtoaccommodatetheking,thetoparmyofficers,theleadingcitizens,andsufficientsoldierstosustainaprolongedsiege.Withadequatereserves,thecitycouldsurviveuntilaneighboringkingdomsentanarmytorelievethedefenders.

DefineYourCitadelInyourbusiness,youhaveproducts,services,andactivitiesthatareperipheraltoyourbusiness—theouterwallsofsalesandrevenues—andyouhaveproductsandservicesthatarecentral—yourcitadelbusinessactivitiesthatrepresentthemajorsourcesofyourprofits.

Yourcorebusinesscanbethoughtofasyour"citadel."Itrepresentstheproductorservicelinesthatarevitalforyoursurvival.Theymustbeprotectedatallcosts.Aslongasyouremainstrongintheseareas,youcanwithstandmarketfluctuationsandsalesdeclines.Youmustthereforeguardandprotectthemagainstallcompetitors.

DetermineYourCoreProductsandCustomersAsamatterofbusinesspolicy,youshoulddevelopa"citadelstrategy"foryourbusiness,especiallyintimesofcontractingmarkets,reducedprofitability,anddecliningcashflow.Thisstrategyshouldincludethesettingasideofreservestocarryyouover,basedona"worst-case"scenario.

Youshouldalwayshaveacitadelstrategyonhand.Youshouldanalyzeanddetermineyourmostvaluable,important,andprofitableproductsandguardthemcarefully.Whenyourbusinesstakesadipandyouhavetodefendandprotectyourabilitytosurvive,bepreparedtowithdrawtoyourcitadelofkeyproductsandservices.

AdvancePlanningIntimesofturbulence,rapidchange,slowingsales,ordisruptedmarkets,youmustdevelopsuchastrategyinadvance,toassurethesurvivalandlong-termsuccessofyourbusiness.Thisisafallbackstrategythatyouhavefullypreparedintheeventofunexpectedreversesinthemarketplace.Neverrelyonluckoronanearlyturnaroundtoamarkettrend.Preparefortheworst.

Thiscitadelisyourcorebusiness.Whatisit?Whateveritis,practice"scenarioplanning"onaregularbasis.Askyourself,"Whatistheworstthingthatcouldpossiblyhappeninmymarkettoday?"

Whateveryouransweristothatquestion,beginmakingprovisionstodaytoassurethatyouwillbeabletosurviveshouldtheworstoccur.

PlayDowntheBoardTheverybestleadersthinkseveralmovesaheadonthechessboardofbusinessandattempttoanticipatethevariousmovesthatmightbemadeagainstthem.Theythenmakeprovisionsintermsofcashreserves,alternatestrategies,securedcustomersandmarkets,andnewproductorserviceofferingstomakesurethattheworstneveroccurs.Youshoulddothesame.

Developacitadelstrategyforyourbusinesstoday.BelikeNapoleon,whowasonceaskedifhebelievedinluck.Hesaid,"Yes,Ibelieveinluck.AndIbelievethatitwillalwaysbebadluckandthatIwillbethevictimofit.Ithereforeplanaccordingly."

YourPersonalCitadelStrategyAsanindividual,youmustbeclearaboutyourpersonalcorecompetenciesaswell.Howcouldyouimproveineachoneofthem?Whatcorecompetencieswillyouneedtoleadyourfieldintheyearsahead?Whatisyourplantoacquirethecorecompetenciesoftomorrow?

ConcentrateontheCore1. Whatisyourcorebusiness?Whatproductsandservicesare

mostresponsibleforyoursuccesstoday?

2. Whatareyourcorecompetencies?Whatisitthatyourcompanydoesextremelywell?

3. Whataretheworstpossiblethingsthatcouldhappentoyourbusinessinthenextyear?Whatareyourplanstodealwiththemshouldtheyoccur?

4. Whatareyournon-coreproducts,services,oractivities?Whatwouldhappenifyoudiscontinuedthementirely?

5. Whoareyourcorecustomers,andwhatareyoudoingtoassurethattheyneverleaveyou?

6. Whoareyourcorepeople,theoneswhoaremostimportantforthesurvivalandgrowthofyourbusiness?Whatisyourstrategytokeepthem?

7. Whatareyourcorefunctions?Whatarethethingsyoudothatarecentraltoyourjob?Whatactivitiesareperipheral?

Chapter21:FocusonResults

OverviewHewhoeverymorningplansthetransactionsofthedayandfollowsoutthatplan,carriesathreadthatwillguidehimthroughthelabyrinthofthemostbusylife.--VictorHugo

ThegreatfootballcoachVinceLombardi,oncesaid,"Winningisn'teverything,butwantingtowinis."

Bythesametoken,resultsarenottheonlything,buttheyareeverythinginbusiness.Theyaretheonlytruemeasureofpersonalabilityandcorporateeffectiveness.

Allcustomersreallycareaboutis,"DidIgettheresultsthatyoupromisedwhenIboughtthisproductorservicefromyou?"Theyhavenosympathywhateverforyourproblemswithpeople,products,processes,deliverysystems,oranythingelse.Allyourcustomerscareaboutisresults.

FourKeyQuestionsWhenconsideringbuyingaproductorservice,customershavefourquestionsthatmustbeansweredbeforegoingahead:

1. Whatdoesitcost?

2. WhatdoIgetforthemoney?

3. HowfastdoIgetthebenefitsyoupromise?

4. HowsurecanIbethatIwillgetthosebenefits?

Whichevercompanyorsalespersonanswersthesequestionsmostconvincinglywinsthesale.

DeliveronYourPromisesBusinesssuccessisindirectproportiontohowconsistentlyanddependablyyoudeliveronyourpromises.Salesandgrowtharedeterminedbyhowreliablyyourproductorservicedeliverstheresultsthatcustomerspayfor.Inevaluatingyourproductsandservices,youmustalwaysask,"Whatresultsorbenefitsdomycustomersexpectofmyproductorservice?"and"Howconsistentlydomycustomersgetthoseresultsandbenefitswhentheybuymyproductsorservices?"Thisisthetruedefinitionof"quality."

Qualitycanbedefinedas"thepercentageoftimesthatyourproductorservicedoeswhatyousayitwilldoandcontinuestodoit."

Aqualityratingof100percent,orperfect,meansthatwhatyousellalwaysdeliversonyourpromises.Aqualityratingof90percentmeansthatyourproductgetsthedesiredorpromisedresultsnineoutoftentimes.

LittleThingsMeanaLotFederalExpresshasdeterminedthatifitsqualityratingwere99.90percent,itwouldmakemistakesinthedeliveryof44,000envelopesaday.

At99.90percentquality,FederalExpresswouldcollapseunderitsownweightofconfusion.Thatishowimportantqualityisinabusiness.

Yourpersonalsuccessisalsodeterminedbyhowconsistentlyanddependablyyouperformanddeliveronyourresponsibilitiesandpromises.Youshouldcontinuallyaskyourself,"Whatresultsareexpectedofme?"

Yourlevelofeffectivenessisalwaysdefinedbyothers,bywhattheyneedfromyou.Leadersarealwaysasking,"Whatdoesthissituationneedfromme?"Oncetheyareclear,theyconcentratetheirenergiesinthoseareas.

Askyourself,"OfalltheresultsIcanaccomplish,whatarethemostvaluableandimportantintermsofmyrewardsandmyfuture?"

ImprovingYourAbilitytoGetResultsHerearesevenofthebestquestionsyoucanaskandanswertoimproveyourabilitytogetresults:

"WhyamIonthepayroll?"Whatexactlyhaveyoubeenhiredtoaccomplish?Makesurethatwhatyouaredoingeverydayistheanswertothisquestion.

"Whataremyhighest-valuetasksandactivities?"Ofallthethingsthatyoucouldbedoingduringtheday,whataretheactivitiesyouengageinthatcontributethegreatestvaluetoyourselfandyourcompany?

"Whataremykeyresultareas?"Whatarethecorecompetenciesandkeytasksthatyoumustabsolutely,positivelydoinanexcellentfashiontoproducethemostimportantandvaluedresultsexpectedofyou?Resolvetodaytobecomea"do-it-to-yourself-project,"toseeyourselfasacontinuousimprovementprojectforwhichyouareresponsible.Fortherestofyourcareer,dedicateyourselftocontinuallylearningandimprovinginthoseareaswheretopperformanceismostvitaltoyoursuccess.Gettingbetteratyourkeytasksisoneofthebesttime-savingtechniquesofall.

"WhatcanI,andonlyI,dothat,ifdonewell,willmakearealdifference?"Thereisalwayssomethingthatonlyyoucandothatcanmakeasignificantdifferencetoyourlifeandyourwork.Ifyoudon'tdoit,itwon'tgetdone.Nooneelsewilldoitforyou.Butifyoudoit,andyoudoitwell,itcanmakeasignificantdifference.Whatisit?

"Whatoneskill,ifIdevelopeditanddiditinanexcellentfashion,wouldhavethegreatestpositiveimpactonmycareer?"Thereisalwaysoneskillthat,ifyoudevelopeditanddiditwell,wouldhaveagreaterandmorepositiveimpactonyourcareerthananyothersingleskill.Yourjobistoidentifythatskillandthenputyourwholeheartintobecomingabsolutelyexcellentinthatarea,

whateveritis.

"Whatoneresult,ifIachieveditconsistentlyformycustomers,wouldmostsatisfythosecustomersandbringmethegreatestnumberofadditionalcustomers?"Whatmustyourcustomersbeabsolutelyconvincedtheywillreceivefromyouinordertoencouragethemtobuyyourproductorserviceandtorecommendittotheirfriends?Howcouldyouimproveyourqualityandserviceinthatarea?

Thefinalquestionforpersonalsuccessisthis:"Whatisthemostvaluableuseofmytimerightnow?"Usethisquestionasyourguidingstarthroughouttheday.Keepasking,"Whatisthemostvaluableuseofmytime,rightnow?"Whateveryouransweristothatquestioniswhatyoushouldbedoingatthisparticularmoment.

Focusallyourenergiesondoing,learning,andpracticingthosefewskillsandgettingthosekeyresultsthatarevaluedthemostandthatmakethegreatestdifferenceinyourwork.

AllDayLongIfyoucouldonlyperformonetaskalldaylong,whatonethingcouldyoudothatwouldcontributemorevaluetoyourlifeandworkthananyothersingletaskoractivity?Whateveryouranswer,putmasteryofthattaskatthetopofyourlistofpriorities.Dedicateyourselftogettingbetterandbetterdoingtheonethingthatcanmakemoreofadifferencethananythingelse.Thisisthekeytogettingsuperbresultsateverystageofyourlifeandcareer.

SevenStepstoPersonalPerformanceTherearesevenstepsyoucantakeeverydaytoincreaseyourproductivity,performance,andoutput.Thesesevensteps,practiceduntiltheybecomeingrainedhabitsofthoughtandaction,willenableyoutodoubleyourproductivity,increaseyourincome,andmoveaheadfasterthanalmostanyotherthingsyoucando.

Step1:Setclear,specific,writtengoalsforeachimportantareaofyourlife.Makethemmeasurableandtime-bounded,withdeadlinesandsubdeadlines.Makeplansfortheiraccomplishmentandworkonyourkeygoalseveryday.

Step2:Thinkonpaper.Makealistofactivitiesforeachdaybeforeyoubegin.Thebesttimetomakealististhenightbefore,thelastthingbeforeyouendtheworkday,orbeforeyougotobedatnight.Thisallowsyoursubconsciousmindtoworkonyourlistasyousleep,oftengivingyouideasandinsightsforgreateraccomplishmentwhenyouwakeup.

Step3:Setprioritiesonyourlistbeforeyoubegin.Applythe80/20Ruleandselectthetop20percentofyourtaskstoworkon.

UsetheABCDEMethodaswell.GooveryourlistandwriteanAnexttoyourmostimportanttasks.WriteaBnexttoyoursecondmostimportanttasks.WriteaCnexttoyourunimportanttasks.WriteaDnexttotasksthatyoucandelegate,andanEnexttotasksthatyoucaneliminate.Dothisbeforeyoubeginworking.

IfyouhavemorethanoneAtask,organizethemasA-1,A-2,A-3,andsoon.DothesamewithyourBtasks.TheruleisthatyouneverdoaBorCtaskifthereisanAtaskthathasnotbeencompleted.

Step4:Practicecreativeprocrastinationonyourlistandinyourwork.Sinceyouarenevergoingtobeabletodoeverythingonyourlist,youaregoingtohavetoprocrastinateonsometasks.Decideinadvancetoprocrastinateonthosetasksoflittlevalueorimportance.Otherwise,youwillunconsciouslyfindyourselfprocrastinatingontasksthatcanmakearealdifferenceinyourlife.

Step5:Selectyourmostimportanttask,your"A-1,"anddisciplineyourselftostartonthatjobfirstthingwhenyoubeginwork.Thistaskisoftenworthmorethanmany,ifnotall,oftheotheritemsonyourlist.

Step6:Practicesingle-handlingwithyourmostimportanttask.Onceyouhavestartedworkonit,resolvetoworkatitnon-stopuntilitiscomplete.Concentrate100percentontheonejobthatrepresentsthemostvaluableuseofyourtime.Disciplineyourselftopersistwithoutdiversionordistractionuntilitisdone.

Step7:Developasenseofurgency,abiasforaction.Movequicklyatyourworkandthroughouttheday.Pickupthepace.Developafastertempoineverythingyoudo.Getgoingandkeepgoingquickly.

Thefasteryoumove,themoreworkyougetdone,andthebetteryoufeel.Themoreyoudo,thefasteryoulearn,andthebetteryouget.Thefasteryoumove,thebetteryouget,andthemoreyougetdone,thegreaterthecontributionyoumakewillbe,themoreyouwillgetpaid,andthefasteryouwillbepromoted.Bymovingfaster,youwillputyourwholelifeandcareerontothefasttrack.

ConclusionTherearemanygreatideasforpersonalandbusinessimprovement.Inthisbook,wehavecoveredtwenty-oneconceptsforimprovingperformance,increasingsales,cuttingcosts,andboostingprofits.Thesearekeyconceptsthatyoushouldreviewcontinuouslyifyouwanttobethebestyoucanbepersonally,andifyouwanttorunthemostprofitableandsuccessfulbusinesspossible.

Oncemoreherearethetwenty-onekeyideasintheTurboStrategyprocess:

1. StartWhereYouAre:Doacompleteandhonestanalysisofyourbusinessasitistoday,includingthecurrentstatusofyoursales,revenues,profitability,andthemarketsituationaroundyou.

2. DrawaLineUnderthePast:Applyzero-basedthinkingtoeverypartofyourbusiness.Ifyouwerenotdoingittoday,knowingwhatyounowknow,wouldyougetintoitagaintoday?

3. ConductaBasicBusinessAnalysis:Examineyourproducts,services,processes,andactivitiesasifyouwerelookingatthemforthefirsttime.Bepreparedtoaskyourselfthe"brutalquestions"abouteachoneofthem.

4. DecideExactlyWhatYouWant:Setclear,written,measurablegoalsandobjectivesforyourselfineachpartofyourbusiness.

5. DesignYourIdealFuture:Projectforwardthreetofiveyearsandimaginethatyourbusinesswereidealineveryrespect.Whatwoulditlooklike?Whatcouldyoudo,startingtoday,toturnthatfuturevisionintoacurrentreality?

6. CreateaMissionStatement:Decideexactlywhatitisyouwanttoaccomplishforotherswithyourbusiness.Makeitmeasurable.Makeitexciting.Shareitwitheveryone.

7. ReinventYourOrganization:Imaginestartingyourbusiness

orcareeroveragaintodaywithyourpresentknowledgeandexperience.Whatwouldyoudodifferently?

8. SelecttheRightPeople:Ninety-fivepercentofyoursuccessinbusinesswillbedeterminedbythepeopleyouchoosetoworkwithandfor.Takethetimetomakegoodpersonneldecisions.

9. MarketMoreEffectively:Thinkthrougheverypartofyourmarketingstrategybyapplyingthefourprinciplesofspecialization,differentiation,segmentation,andconcentrationtoeveryproductandservice.

10. AnalyzeYourCompetition:Decideexactlywhoyouarecompetingagainstandwhyitisthatyourprospectivecustomersprefertobuyfromthem.Howcouldyouoffsetthisperceivedadvantage?

11. DoItBetter,Faster,Cheaper:Continuouslyseekwaystoserveandsatisfyyourcustomerinafashionsuperiortothatofanyoneelseinyourmarket.Neverstopraisingthebaronyourself.

12. ChangeYourMarketingMix:Imaginebeingyourownmanagementconsultantandaskingyourselfhardquestionsabouttheappropriatenessofyourproduct,price,place,andpromotionintoday'smarket.

13. PositionYourCompanyforSuccess:Determinehowyouwanttobethoughtaboutandtalkedaboutbyyourcustomersandprospectivecustomers.Whataretheverybestwordstheycouldusetodescribeyou?

14. DevelopStrategicBusinessUnits:Divideyourproductsandservicesintooneoffourcategories:cashcows,stars,questionmarks,anddogs.Makeonepersonresponsibleforsalesandprofitabilityforeachproductorgroupofproducts.

15. SellMoreEffectively:Focussingle-mindedlyonupgradingthequalityofyoursaleseffort.Hiremoreselectively,trainmore

thoroughly,andmanagemoreprofessionally.Salesarethelifebloodofthebusiness.

16. EliminatetheBottlenecks:Identifythefactorsthatdeterminehowfastyouachieveyourgoalsofsalesandprofitability.Concentrateonalleviatingthesebottlenecksineverypartofyourbusiness.

17. ReengineerYourCompany:Constantlyseekwaystostreamlineandsimplifytheprocessofproducingandsellingyourproductsandservices.Learntodelegate,out-source,downsize,andeliminatethecomplexityofeverythingyoudo.

18. PumpupYourProfits:Evaluateeveryproductandservicetodetermineexactlyhowmuchnetprofityouareactuallyearningfromeachitemyousell.Resolvetodiscontinueproductsandservicesthatarenotasprofitableasothers,andchannelmoreresourcesintothoseproductsthatarethemainstaysofyourbusiness.

19. CommittoContinuousImprovement:InstalltheKaizenprocessof"continuousbetterment"intoyourcompany.Findouthowyourcustomerdefines"quality"andthenstrivetoexceedexpectations.

20. ConcentrateontheCore:Identifythemostimportantproductsandservicesyouoffer,andthenfocusongettingbetterandbettersellingmoreandmoreofthem.Probably80percentofthemarketpotentialforyourcoreproductshasnotyetbeentapped.

21. FocusonResults:Concentrateyourbestenergiesandresourcesongettingthemostimportantresultspossibleforyourcompany.Setprioritiesineveryareaandthenworksingle-mindedlytocompletethefewtasksthataremorevaluablethaneverythingelseputtogether.

ThemostimportantpartoftheTurbostrategyisnotwhatyoulearn,buttheactionsyoutakeandhowquicklyyoutakethoseactions.Thereisa

directrelationshipbetweenhowfastyoumoveonanewideaandhowlikelyitisthatyouwillevermoveonanewidea.Resolvetodaytobecomeintenselyaction-orientedfortherestofyourcareer.Justdoit!

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TheTurboStrategyProcessTheideasandconceptsdescribedinthisbookaredrawnfrommytwenty-fiveyearsofstrategicplanningandworkwithmorethan500companiesintheUnitedStates,Canada,andtwenty-threeforeigncountries.

InmyTurboStrategyprocess,Ispendtwoorthreedaysworkingwithmyclientstocrystallizetheseideasintoablueprintandaplanofaction.

Whenyouapplytheseconceptstoyourbusiness,youwilldevelopgreaterclarityandcommitmenttoyourvalues,vision,mission,purpose,andgoals.Youwilllearnhowtoidentifyyourkeyresultareasanddetermineyourcompetitiveadvantages,bothexistingandpotential.

Thesetechniqueswillhelpyoutoanalyzeyourcompany,insideandout,anddecideuponnewgoals,plans,activities,measuresofperformance,andresponsibilities.

AstheresultofthisTurboStrategyprocess,youwillbeabletosimplifyandstreamlineyouroperations,increasesales,revenues,andcashflow,cutcosts,andboostyourprofits—sometimesovernight.

Youwillachievenewbreakthroughsregardingyourproducts,services,customers,markets,andfutureopportunities.

YouwilllearntopracticethethreeR'sofbusinesssuccessineveryareaofyourbusiness.First,youwillcontinuouslyreevaluateeveryproduct,everyserviceandactivity,andeverypersonwhoworksinyourcompany.

Second,youwillrefocusyourtimeandresourcestowarddoingmoreofthosethingsthatcontributethehighestlevelsofsalesandprofitability.

Third,youwillregaincontroloveryourbusinesssoyoucanguideandsteeritmoreeffectivelyinourcurrenteconomy.

TheseTurboStrategyideasaretailoredandcustomizedtoyouruniquesituation.Theyaremodifiedtofityourbusiness,yourproductsandservices,yourcustomersandmarkets,yourpeopleandprocesses.The

applicationoftheseideasisdifferentforeverycompany.

TheThreeStepsTherearebasicallythreestepsinmyTurboStrategyprocess.TheyarePre-work,Coursework,andImplementation.

Inthepre-work,eachparticipantisrequiredtocompleteadetailedanalysisoftheexistingbusinessanditsoperations.Acopyofthispre-workisreturnedtometoenablemetotailorourstrategyworktogethersothatisveryspecifictoyourcurrentbusiness.

Inthetwo-dayintensivestrategicplanningprocess,wethoroughlyevaluateyourbusiness;determineyourguidingvalues,vision,mission,purpose,andgoalsforthenextonetothreeyears;anddevelopablueprintforaction.

Westudyeachproductandserviceareaasitrelatestothecurrentmarket,thecompetition,andthefuture.Wedecideonyourmarketing,sales,andpromotionalstrategytogenerateincreasedsales,income,andcashflow.

Weexaminethecriticalissues,bothinsideandoutsidethecompany,thataffectsuccessandgrowth.Wemakedecisionsaboutwhatneedstochangeandhowthesechangescanbestbemade.

Finally,wereducetheentireplanningprocesstospecificactioncommitmentsandresponsibilities,completewithmeasurementsandtimelines.

EachparticipantemergesfromtheTurboStrategysessionwithgreaterclarityanddirection,readytotakeactionandgetbetterresults.After-wards,Isummarizetheresultsanddecisionsofthesessionforevaluationandreviewandtoserveasaguideforthefuture.

Weprovideallofthewrittenmaterialsnecessarytoassurethemaximumvalueandeffectivenessoftheprocess.Iremainavailabletoyouasanadvisor,consultant,andassistanttoensuretheimplementationofthestrategyofthestrategicplanthroughouttheorganization.

Thisprogramisconductedawayfromtheofficeinaprivatesettingwheretherearenointerruptions.Itisextraordinarilyeffectiveandcanchangethefutureofyourbusiness.

Ifyouareinterestedinhavingmecomeintoyourcompanyandworkwithyouandyourkeyexecutives,pleasecallmeat1-800-542-4252(ext.17)andspeakwithourvicepresident,VictorRisling.Iamlookingforwardtohearingfromyou.

TheTurboCoachingProcessThisintensiveone-yearprogramisidealforambitious,successfulmenandwomenwhowanttoachievebetterresultsandgreaterbalanceintheirlives.

Ifyouarealreadyearningmorethan$100,000peryearandifyouhavealargedegreeofcontroloveryourtime,infourfulldayswithmeinSanDiego—onedayeverythreemonths—youwilllearnhowtodoubleyourproductivityandincomeanddoubleyourtimeoffwithyourfamilyatthesametime.

Everyninetydays,youworkwithmeandanelitegroupofsuccessfulentrepreneurs,self-employedprofessionals,andtopsalespeopleforanentireday.Duringthistimetogether,youforma"mastermindalliance"fromwhichyougainideasandinsightsthatyoucanapplyimmediatelytoyourworkandpersonallife.

TheTurboCoachingprocessisbasedonfourareasofeffectiveness:Clarification,Simplification,Maximization,andMultiplication.Youlearnaseriesofmethodsandstrategiestoincorporatetheseprinciplesintoeverythingyoudo.

Clarification:Youlearnhowtodevelopabsoluteclarityaboutwhoyoureallyareandwhatyoureallywantineachofsevenkeyareasoflife.Youdetermineyourvalues,vision,mission,purpose,andgoalsforyourself,yourfamily,andyourwork.

Simplification:Youlearnhowtodramaticallysimplifyyourlife,gettingridofallthelittletasksandactivitiesthatcontributelittletotheachievementofyourrealgoalsofhighincome,excellentfamilyrelationships,superbhealthandfitness,andfinancialindependence.Youlearnhowtostreamline,delegate,outsource,minimize,andeliminateallthoseactivitiesthatareoflittlevalue.

Maximization:Youlearnhowtogettheverymostoutofyourselfbyimplementingthebesttimeandpersonalmanagementtoolsandtechniques.Youlearnhowtogetmoredoneinlesstime,howtoincreaseyourincomerapidly,andhowtohaveevenmore

timeforyourpersonallife.

Multiplication:Youlearnhowtoleverageyourspecialstrengthstoaccomplishvastlymorethanyoucouldbyrelyingonyourowneffortsandresources.Youlearnhowtouseotherpeople'smoney,otherpeople'sefforts,otherpeople'sideas,andotherpeople'scustomersandcontactstoincreaseyourpersonalproductivityandearnmoremoney.

ThisTurboCoachingprogramiscalledFocalPointAdvancedCoachingandMentoring.BrianTracygivesitpersonallyfourtimeseachyearinSanDiego.Eachsessionincludescompletepre-work,detailedexercisesandinstruction,allmaterials,plusmealsandrefreshmentsduringtheday.Attheendofeachsession,youemergewithacompleteblueprintforthenextninetydays.

Ifyouareinterestedinattendingthisprogram,visitourWebsiteatbriantracy.com,orphoneourvicepresident,VictorRislingat1-800-542-4252(ext.17)torequestanapplicationformormoreinformation.Welookforwardtohearingfromyou.

Index

AABCDEMethod,prioritiesand,145-146actionorientation,20-21,25,114,146activitieslist,141,145advanceplanning,incitadelstrategy,137-138advertisingbrandsand,82effectivenessof,75-76,117

aggravation,14Allen,James,134onsecretofpower,133

AmericanManagementAssociation,3answers,changesin,2,55,77AppleComputer,76Aristotle,32ArtofWar,The(SunTzu),61assumptionsformarketingmix,77questioning,9-10,77

attributiontheory,80-82cheatsheetsfor,81-82choosingwordsfor,81wordsownedin,80-81

Auschwitz,35

Index

Bback-from-the-futurethinking,31Barton,Bruce,ondevelopingopportunities,117benchmarking,128Bethune,Gordon,130Bible,32,36Blanchard,Ken,38-39BMW,81Bossidy,Larry,84BostonConsultingGroup,87bottlenecks,seeconstraintanalysisbottom-upapproach,toreinventingorganization,42brainstorming,127brands,82-83creating,83natureof,82personal,84

brutalquestions,8bundleofresourcesapproach,toreinventingorganization,41-42businessanalysis,17-21actionorientationin,20-21basicsin,18customerascenterpieceof,18-19definingcompetitionin,19-20goal-settingin,20questionsfor,21

BusinessandItsBeliefs,A(Watson),37businesseswithinbusinesses,88

businessoperations,assessing,14businessplans,forstrategicbusinessunits(SBUs),88businesssituation,analyzing,8

Index

CCANEIprocess,126-127,131career,reinventing,43-44Carnegie,Andrew,onstaffselection,45cashcows,89,91,92cashflowofcashcows,89,91,92ofdogs,90-91,92importanceof,8,25-26inprofitanalysis,119promotionand,75ofquestionmarks,90,91,92ofstars,89,91,92

Champy,James,107changeinanswers,2,55,77inassumptions,9-10,77inreengineeringprocess,112instaff,4successand,3-4visionand,33

cheatsheet,81-82Cialdini,Robert,80citadelstrategy,136-138advanceplanningin,137-138definingcitadelin,137described,136determiningcorecustomersin,137determiningcoreproductsin,137personal,138playingdowntheboardin,138

clarityincompetitoranalysis,61ofgoals,20,145importanceof,7,8-9askeytostrategicsuccess,26instaffselectionprocess,50

collectingpayment,ingreatsalesquestion,97-98Collins,Jim,8,45commitmentdeliveringonpromisesin,142toexcellence,33,129involvementindevelopingmissionstatementand,38instaffselectionprocess,50

commodities,specialproductsversus,64competition,defining,19-20competitiveadvantage,63-70areasofdifferentiationfor,65-66centralfocusfor,64-65,67definingtermsfor,67-68highconceptin,63-64importanceof,19keystosuccessin,67,69offsettingcompetitors',61onpersonallevel,69priceasdifferentiatorin,64qualitiesof,67questionsforanalyzing,69-70superiorityand,68,69targetsfor,67

competitoranalysis,59-62clarityin,61determiningcustomerbuyingmotivesin,60importanceof,60marketingmyopiain,60-61

offsettingcompetitor'sadvantagesin,61questionsfor,61-62

complexitybattleagainst,108-109defined,108exponentialincreasesin,109Lawof,108simpleversuscomplextasks,108-109

concentrationinmarketingstrategy,55,56inpersonallife,56

constraintanalysis,101-105applyingprocessof,102-103externalconstraintsin,103,104incompetenceasaconstraint,103internalconstraintsin,103,104limitingfactorsin,102-103,104personalconstraintsand,104-105questionsfor,105wrongproductand,103-104

ContinentalAirlines,130continuousimprovement,125-132benchmarksfor,128CANEIprocessof,126-127,131customerdefinitionsofqualityand,130excellenceasstandardfor,128Kaizenprocessof,126-127,131inpersonallife,131profitabilityin,129qualityrevolutionand,126questionsfor,131-132rankingselfagainstcompetitorsin,130-131totalqualitymanagement(TQM)movementand,127-128zero-basedthinkingand,15

corebusiness,133-139

citadelstrategyand,136-138defining,13480/20Ruleand,134-135importanceofmonitoring,134-135natureof,133questionsfor,138-139

corecompetencies,54,92costs,inprofitanalysis,120-121creativeprocrastination,146creativity,inreinventingoforganization,43Crosby,Philip,83customersanalysisof,13ascenterpieceofbusinessanalysis,18-19customerintimacyand,66definitionofqualityby,130determining,18-19determiningbuyingmotivesof,60determiningcore,137ingreatsalesquestion,97highmaintenance,121high-volumeversushigh-profit,118-119ideal,97asking,9primaryquestionof,69,96-98questionsconcerningproductsandservices,142remainingcloseto,66satisfactionof,128

Index

Ddecision-makinginevitabledecisionsin,14speedingupprocessof,113

delegationofdecision-making,113prioritiesand,145-146inreengineeringprocess,112-113

deliveringthegoods,ingreatsalesquestion,98Dell,76differentiationascentralfocusofmarketing,64-67incompetitiveadvantage,63-66inmarketingstrategy,55potentialareasofsuperiorityand,65-66priceand,64threeareasof,65

difficultpersons,13directcosts,120DisciplineofMarketLeaders,The(TreacyandWiersma),65Disraeli,Benjamin,oncircumstances,79dogs,90-91,92Domino'sPizza,67,81downpayments,73Drucker,Peteronfutureperformance,47onmarketing,71onmarketingandinnovation,53

Index

Eeconomiesofscale,6680/20Rulecorebusinessand,134-135focusonvalueand,135prioritiesand,145profitabilityand,118

Einstein,Albert,1Ellis,Havelock,onperspective,41Estridge,Steve,onprofessionalimage,95examiningorganization,inreinventingoforganization,43excellencecommitmentto,33,129competitiveadvantageand,68,69determiningareaof,19differentiationand,55operational,65-66inpositioning,82-84inreinventingoforganization,43instaffselectionprocess,50asstandard,128

exception,managementby,113Execution(Bossidy),84extendedpaymentplans,73externalconstraints,inconstraintanalysis,103,104

Index

Ffailure,successversus,4FederalExpress,81,142-143Festinger,Leon,80five-yearfantasy,29-30Fixx,James,101flexibilityinstrategicplanning,2-3zero-basedthinkingand,12

focusonresults,141-146deliveringonpromises,142improvingabilitytogetresults,143-144littlethingsin,142-143masteryin,145questionsfor,142,143-144stepstopersonalperformanceand,145-146

Forbesmagazine,12"Fortunate500,"38-39Frankl,Viktor,35frustration,14future-orientation,29-34idealfutureand,29-34marketingstrategyin,56instrategicplanning,31

Index

GGeneen,Harold,9GeneralElectric(GE),19,41Getty,J.Paul,oncompetitiveadvantage,63

goals,23-27constraintanalysisand,102inGOSPAModel,23-24settingclear,20,145

GoodtoGreat(Collins),8,45goodwill,80GOSPAModel,23-25Goalsin,23-24Objectivesin,24Strategiesin,24Plansin,24-25Actionsin,25

Index

Hhabitinpositioning,83inreengineeringprocess,112

Half,Robert,onaskingtherightquestions,17Hammer,Michael,107Henderson,Bruce,onconcentratingstrengths,59Hersey,Paul,onproductivity,107highconcept,incompetitiveadvantage,63-64highmaintenancecustomers,121Hill,Napoleon,onsettinggoals,23hourlycase,inprofitanalysis,121Hugo,Victor,onplanning,141

Index

IIBM,37,76,81idealfuture,29-34back-from-the-future-thinkingand,31five-yearfantasyin,29-30future-orientationand,31visionand,32-34

idealizationprocess,29-30incompetence,inconstraintanalysis,103Infiniti,38Influence(Cialdini),80innovationinmarketingmix,72inreinventingoforganization,43intechnology,66

internalconstraints,inconstraintanalysis,103,104interviews,instaffselectionprocess,48-49ITT,9

Index

JJapan,qualityrevolutionand,125-127JDPowerCustomerSatisfactionSurvey,38jobdescriptions,instaffselectionprocess,46-47,50Jones,Charlie,136

Index

KKaizenprocess,126-127,131

Index

Llaborcosts,120LawofComplexity,108LawofThree,instaffselectionprocess,47-49leadership,visionand,32-33Levitt,Theodore,onpositioning,79Lexus,38,66limitingfactors,seeconstraintanalysisline-of-sightimprovements,127listofactivities,141,145Logotherapy,35Lombardi,Vinceonqualityofperson'slife,125onwinning,141

long-termperspective,122loyalty,involvementindevelopingmissionstatementand,38MacArthur,Douglas,onsecurity,87

Index

MMacPherson,James,32managementbyexception,113managementbyresponsibility,112managementstyle,3-4Marden,OrisonSwett,oninternalpowers,11MarketingImagination,The(Levitt),79marketingmix,71-78assumptionsfor,77placein,76-77pricein,73-74productin,72-73promotionin,74-76questionsforchanging,77-78

marketingstrategy,53-57competitiveadvantageand,63-70competitoranalysisin,59-62concentrationin,55,56differentiationin,55futureand,56keyelementsof,54-55marketingmixin,71-78marketingmyopiaand,60-61forpersonallife,56positioningin,79-85questionsfor,56-57reevaluationof,55segmentationin,55sellingin,95-100specializationin,54,56

marketpotential,95-96

mastery,145McDonald,John,onidealfuture,29McDonald's,66,81McKay,Harvey,46McKenzie,Alex,onassumptions,9McNeely,Scott,onchangingassumptions,77MenningerInstitute,2-3Mercedes,66,81missionstatement,35-43forbusiness,36-38asdeclarationofpurpose,36exampleof,37"Fortunate500"and,38-39importanceof,35involvingothersindevelopmentof,38personal,39questionsfordeveloping,39-40valuesand,36-38

Monahan,Tom,67motivationdeterminingcustomer,60instaffselectionprocess,50

multitaskjobs,25

Index

NNapoleon,onluck,138negativity,14netsales,120Nordstrom,81NorthwestMutualLifeAssuranceCompany,110-111

Index

Oobjectives,inGOSPAModel,24obsolescence,13operationalexcellence,65-66opportunitycosts,inprofitanalysis,121outperformers,instaffselectionprocess,49outsourcing,inreengineeringprocess,111-112

Index

Ppastperformance,instaffselection,47Peale,NormanVincent,38-39performance,instaffselectionsprocess,49,50personallifeapplyingSBUconceptin,92brandingin,84citadelstrategyin,138concentrationin,56constraintanalysisin,104-105deliveringonpromisesin,142focusonresultsin,141-146identifyingstrengthsand,9improvingabilitytogetresultsin,143-144littlethingsin,142-143masteryin,145missionstatementin,39personalperformancestepsin,145-146profitanalysisfor,123qualityratingfor,131simplifying,114specializationin,56visionfor,33-34,43-44

place,inmarketingmix,76-77plansadvance,incitadelstrategy,137-138business,forstrategicbusinessunits,88extendedpayment,73inGOSPAModel,24-25seealsoTurboStrategy

Polya,George,onproblemsolving,101positioning,79-85

attributiontheoryand,80-82brandsin,82-83everythingcountsin,83-84habitand,83personal,84questionsfor,84-85wordofmouthin,80

Positioning(RiesandTrout),79premiumpricing,66,67pricedeterminingcorrect,73differentiationby,64doubling,73-74ingreatsalesquestion,97inmarketingmix,73-74premium,66,67profitanalysisand,122

prioritiesABCDEMethodand,145-14680/20Ruleand,145setting,145

procrastination,146productsandservicesanalyzingprofitabilityof,8inconstraintanalysis,103continuousimprovementand,127customerquestionsconcerning,142determiningcore,137discontinuing,14ingreatsalesquestion,96innovationand,72inmarketingmix,72-73measuringqualityof,130-131measuringsuccessof,3-5,8natureof,72

obsolescenceof,13profitanalysisfor,8,118-123reexamining,73specializationin,54,56unprofitable,117-118wordofmouthand,80seealsomarketingstrategy

profitability,117-123competitorimpacton,60corebusinessand,136focuson,25-26idealfutureand,30inimprovingbusiness,26-27,67increasing,122inpersonallife,123profitanalysisin,8,118-123qualityand,129questionsforanalyzing,123unprofitableproductsandservices,117-118

profitanalysis,8,118-123cashflowin,119costapportionmentin,120-121determiningprofitabilityin,120oneveryproductandservice,118high-volumeversushigh-profitcustomersand,118-119long-termperspectivein,122forpersonallife,123rankingproductsandservicesin,119-120,121-122

ProfitfromtheCore(ZookandAllen),134ProfitImpactonMarketStrategies(PIMS),129progressmeasures,formissionstatements,38promises,deliveringon,142promotionadvertisingin,75-76,82,117inmarketingmix,74-76salestrainingin,75,98-99

salesvolumeand,74-75untappedmarketpotentialand,95-96

purpose,declarationof,36

Index

Qqualitycustomerdefinitionsof,130defined,142personallifeand,131profitabilityand,129qualityrevolutionand,125-127seealsocontinuousimprovement

QualityIsFree(Crosby),83questionmarks,90,91,92questionsforanalyzingcompetitiveadvantage,69-70aboutassumptions,9-10,77brutal,8forbusinessanalysis,21forcompetitoranalysis,61-62forconcentratingoncorebusiness,138-139forconstraintanalysis,105forcontinuousimprovement,131-132forcreatingmissionstatement,39-40indecidingwhatyouwant,26-27fordesigningidealfuture,34fordevelopingstrategicbusinessunits,93foreffectiveselling,99-100forfocusonresults,142,143-144onmarketingmix,77-78formarketingstrategy,56-57newanswersto,2,55,77aboutthepast,15forpositioning,84-85forprofitanalysis,123forreengineeringprocess,114-115forreinventingoforganization,44instaffselectionprocess,50-51

aboutstartingwhereyouare,10

Index

Rrailroads,12,18RanchoSantaFe,12realtime,operatingin,114reengineeringprocess,107-115andbattleagainstcomplexity,108-109collapsingprocessin,110-111consolidatingstepsin,111decision-makingin,113delegationin,112-113described,107eliminatingstepsin,111managementbyexceptionin,113managementbyresponsibilityin,112outsourcingin,111-112inpersonallife,114questionsfor,114-115senseofurgencyand,114simplificationin,109-110

ReengineeringtheCorporation(HammerandChampy),107referencechecking,instaffselectionprocess,49reinventingoforganization,41-44bundleofresourcesapproachto,41-42examiningorganizationin,43excellenceand,43personalcareerand,43-44questionsfor,44relationshipsin,42staffin,42

relationships,inreinventingoforganization,42researchanddevelopment,91

responsibilitymanagementbyresponsibility,112personalsuccessand,143forstrategicbusinessunits(SBUs),88

results,focuson,141-146return-on-equity,8return-on-investment,8return-on-sales,8Ries,Al,79,81Rolex,66Roosevelt,Theodore,onstartingwhereyouare,7

Index

Ssalesanalysis,7salesforcebuildinganeffective,99buildingaworld-class,98-99ingreatsalesquestion,96-97salesexecutivesand,99salestrainingfor,75,98-99

salestraining,75,98-99salesvolume,74-75SantaFeRailwayCompany,12scenarioplanning,incitadelstrategy,137-138"scraper"mentality,12-13segmentation,inmarketingstrategy,55selling,95-100focusoncorebusinessand,136greatsalesquestionin,69,96-98aspivotalskill,99questionsforeffective,99-100salestrainingand,75,98-99uniquesellingpropositionand,68,69untappedmarketpotentialand,95-96world-classsalesforceand,98-99

simplificationcollapsingprocessesin,110-111consolidatingstepsin,111eliminatingstepsin,111ofpersonallife,114ofprocesses,110reducingstepsin,109-110simpleversuscomplextasks,108-109

single-handling,146socialproof,80Sony,66specializationinmarketingstrategy,54,56inpersonallife,56

staffchanging,4inconstraintanalysis,103-104difficult,13eliminating,14evaluating,4,8-9incompetent,103inreinventingoforganization,42seealsostaffselection

staffselection,45-51clarityin,50interviewingprocessin,48-49jobdescriptionsin,46-47,50keyqualitiesin,45-46LawofThreeand,47-49otheropinionsin,49outperformanceand,49pastperformancein,47questionsfor,50-51referencecheckingin,49slowhiringof,46,47teamplayersin,46,49

stars,89,91,92startingover,inzero-basedthinking,12-13strategicbusinessunit(SBU)approach,87-93asbusinesseswithinbusiness,88businessplansfor,88categoriesof,89-91developmentofconcept,87

implementingprocessfor,92natureof,87inpersonallife,92questionsfordeveloping,93inreevaluatingentirebusiness,88-91responsibilityfor,88takingimmediateactionand,91

strategicplanning,seeTurboStrategystrategies,inGOSPAModel,24strengths,identifyingpersonal,9stress,14subconsciousmind,145successchangeand,3-4dailymeasurementof,4-5failureversus,4focusonresultsand,141-146onetruemeasurementof,3-4

SunMicrosystems,77SunTzu,61superiority,incompetitiveadvantage,68,69supplierrelationships,inreinventingoforganization,42SwimWiththeSharksWithoutBeingEatenAlive(McKay),46

Index

Tteamplayers,staffmembersas,46,49technology,innovationin,66Thoreau,HenryDavid,onsettingdirection,35thoughtfulness,instaffselection,46time-outs,importanceofcalling,3,4,109-110totalqualitymanagement(TQM),127-128trade-ins,73Treacy,Michael,65Trout,Jack,79,81TurboStrategybusinessanalysisin,17-21changinganswersin,2,55,77clarityin,7,8-9,20,26,50,61constraintanalysisin,101-105continuousimprovementin,125-132corebusinessin,133-139flexibilityin,2-3,12focusonresultsin,141-146future-orientationin,29-34,56goal-settingin,23-27improvingprofitabilityin,117-123measuringsuccessand,3-5missionstatementin,35-43inpersonallife,9,33-34,39,43-44,56,69,84,92,104-105,114,123,131,138,141-146reengineeringprocessin,107-115reinventingorganizationand,41-44staffselectionin,45-51startingwhereyouarein,7-10strategicbusinessunit(SBU)approachin,87-93

zero-basedthinkingand,12-15seealsomarketingstrategyturnaroundspecialists,11,119,122

Index

Uuniquesellingproposition,68,69urgency,senseof,20-21,25,91,114,146

Index

Vvalue,focuson,135values,36-38defined,36determining,36-37emergenceofmissionstatementfrom,36instaffselection,46

vendorrelationships,inreinventingoforganization,42vision,32-34business,32-33,36emergenceofmissionstatementfrom,36excitingpictureof,32-33importanceof,33personal,33-34,43-44

Index

W-YWal-Mart,66Watson,ThomasJ.,Jr.,37Welch,Jack,19,41Wiersma,Fred,65wordofmouth,80worst-casescenario,planningfor,137-138

Index

Zzero-basedthinking,12-15businessoperationsin,14continuoususeof,15customeranalysisin,13inevitabledecisionsand,14keyindicatorsin,14instaffselection,46startingoverand,12-13

Zook,Chris,134