May 20, 2009 - Do You Have a Culture of Trust and Honesty?

Main Idea

Has your trust in institutions been rattled over the last year? Do you still have trust in your bank? Do your employees trust that you are making good decisions? Are you being transparent in order to earn your employees trust?

Expansion of Idea

As humans, we are born as trusting beings. We rely heavily on our parents as small infants to protect us and provide us the necessities to grow. In the same light, your employees rely on you to provide direction, feedback, and security. In the past year, millions of Americans have weathered lay-offs, scandals, and bankruptcy. There’s no question that those people have lost trust.

As business owners, it is your responsibility to strengthen the trust relationship between yourself and your clients, employees, and vendors. Your business cannot survive if your motives and priorities are questioned by those that deal with you regularly. If you develop a reputation for being honest, you will be setting the example for your employees, especially those not holding a management position.

Typically, the people working on the front lines have information about customer or process problems that executives may not see. But if those people do not feel they can be honest and upfront, the problems will continue to go unnoticed-at least to upper management.

To avoid this scenario, executives need to be especially transparent. Admitting your mistakes to your team will encourage them to do so as well. Allow your company to have an open line of communication so that employees do not feel that their job is in jeopardy if they mess up. If you are approached by someone who confesses to making a mistake, show empathy for their courage to speak up and thank them.

Creating a culture of honesty can, at times, prove to be a challenge. Prepare yourself and management for unpleasant conversations that may come up. Being transparent in business can be difficult, but also rewarding, as the people surround you improve their working relationships.

Areas to Start:

1. Tell the truth!

2. Encourage employees to be honest.

3. Read Crucial Conversations to learn how to deal with uncomfortable situations.

May 13, 2009 - Are You Growing or Dying?

Main Idea

What is your business’ most important asset? Where would your company be without the people who run your operations everyday? What have you invested in them? What have they invested in themselves? Beyond that, what is your own personal development plan?

Expansion of Idea

Wikipedia defines personal development as activities that improve self-knowledge and identity, develop talents and potential, build human capital and employability, enhance quality of life and realize dreams and aspirations.

Most small business owners have realized their aspirations of going into business for themselves. But what areas of your life could you use development? Maybe it’s as simple as taking a college course, or attending a seminar on a relevant topic to you. It may be necessary to rearrange your schedule to make time for development activities. Some may get up excruciatingly early to squeeze in a workout session to achieve fitness goals, or make child care arrangements to study a professional development book.

What about the people you employ? When was the last time you met with your employees to see what skills they want to learn or further develop? Maybe there is a work skill that needs fine tuning. Whether you send them to a one or two-day seminar, or a semester class, it is important to help your people grow. Helping them feel confident in their role in your company will provide tremendous results.

Personal development is something everyone should invest in. As the old Chinese proverb goes, “Be not afraid of growing slowly, be afraid only of standing still.” You won’t ever reach perfection, but one should always strive to be the best they can be.  The benefit for the company is very clear.  When the company encourages personal growth, business growth will follow.  Nature tells us that we are growing or dying.  That is a choice only we can make.  

Areas to Start:

1. Ask your employees what areas they need to develop, and help them follow through.

2. Set a good example by developing your own skills and talents.

3. Read a development book in the area of your choice.      

4. Attend a seminar to develop your skills.

May 6, 2009 - Are You Listening to Your Customer's Feedback?

Main Idea

Why do college basketball teams play so much better at home versus on the road?  When you were in school, why did you get a grade on your tests?  Why do we routinely fight employee performance reviews? 

Expansion of Idea

Obtaining and using feedback is critical to growing your business. The only way we can compete is to continually improve our performance.  Asking probing questions to get into the mind of your customer will give you a better idea of the customer’s experience. Satisfied customers may still leave you for a competitor if the price is right. They may not be so quick to leave, however, if they are approached and asked what could be done differently to better serve them.

Feedback should not be viewed to solve one isolated issue. The purpose of valuable feedback is to improve your systems and improve the customer experience. Objectively review a list of some of your lost clients. Why did they leave? What might have been done differently to save the relationship? With every displeased customer, there are probably several more that haven’t spoken up. Perhaps that one unhappy person is a red flag to a faulty process that is creating many unhappy clients. Once you have received feedback, you should follow up and thank the customer. Let them know their issue is being worked on, and when they may expect resolution.

Customers will continue to provide invaluable feedback when they feel that it is going to improve their experience. Don’t wait for your competitor to ask what your client needs are!

Areas to Start:

1. Send F&F a note on the weekly business ideas.

2. Identify your feedback systems

3. Evaluate whether they could be improved.

4. Learn from your lost customers

5. Give employees feedback to keep them on the right track

April 29, 2009 - Do You Pay Attention Like Inspector Clouseau?

Main Idea

Do you ever research a product before you buy it? Or read reviews on a restaurant before you consider eating there? We all use investigation to some degree in our personal lives, probably without even realizing it. How often do you research your prospective customers before you attempt to make the sale?  More importantly, do you know what is important to your customers?

Expansion of Idea

Investigative skills are simply the ability to gather information to solve a problem, conduct a research project, or make a decision. All business owners need to use these skills to succeed in their respective trades. You might ask your customer what they like or dislike about your company, but they may not feel comfortable enough to tell you how they really feel. By asking open-ended questions to learn more about their lives, you will get a new picture of who your client really is.

Sometimes, customers will not answer your questions honestly.  (How many times in a restaurant have you told the manager that everything was fine when in fact the meal was cold or service was slow?)  Instead you need to pay attention to clues.  Those clues may be the tone in a voice, the customer’s buying patterns, the questions that the customer asks or the lack of a response to your service.  That, in turn, can help you provide the best service possible.

Area to Start

1. Keep your Sherlock Holmes hat handy at all times!

2. Play I Spy with your team about your customers.

3. Pick a customer and try to determine why they deal with you.

April 22, 2009 - Do You Need a "Timeout"?

Main Idea

Have you ever seen a two year old child completely out of control?  Have you seen small business owners out of control?  Are decisions being made clearly based on the best information available.

Expansion of Idea

When life is out of control, it is hard to make good decisions.  When a toddler is out of control, the only thing that really works is for them to be by themselves in “timeout”.  They may scream and cry for a while, but they normally get themselves back under control in a fairly short period of time.  Why is that?  I am not going to pretend to be a child psychologist, but I think kids need time by themselves without external influences. 

As adults, we are not much different.  We need to have time to plan and digest information.  Steven Covey calls this time Quadrant II.  This is time spent on important but not urgent matters.  This could be strategic planning, customer analysis, or employee coaching.  The agenda for the first time should be to develop ideas to follow up on in future timeouts. We tend to avoid this type of time because we focus on urgent.  In fact, in the current economic times, the urgent hijacks our time, energy and money.  A lot of small business owners are not much different than a two year-old.  We are trying to run our businesses, but are completely out of control emotionally because we do not have a practice of “TIMEOUT”. 

Area to Start

1. Schedule time for you and yourself to meet. Put it on the calendar.

2. Set follow up meetings to insure that this becomes a habit.

3. Set time to meet with key management members or advisors.

April 15, 2009 - Do You Finish Strong?

Main Idea

What is one of the secrets of top golfers, basketball players, tennis players and also business people? 

Expansion of Idea

A key to a lot of activities is finishing strong.  Golfers have to follow through in their swing.  The same is true for basketball and tennis players.  They have to stay with their shot until it is finished.  It sounds easy until we try to do it.  The same is true in business.  We have to make sure that we stay with the project or customer until it is completely finished.  We just completed a successful tax season that I have to give all the credit to my team.  They stayed focused until the end.  (They are pretty quiet today.) 

But it is critical to stay focused until you finish your work.  This is really critical in customer service issues.  How many times do you know that you should send a thank you to a customer and you fail to follow through?  Or, a customer may have a problem and you sent in the fix to the problem but you did not check and make sure it was fixed.  These little things at the end of a sale or a customer interaction can make the difference between a delighted customer and a marginally satisfied customer.  And that difference separates the surviving companies from the dropouts. 

Suggested Areas to Start

1. Identify one thing that you can add to an internal or external customer interaction.

2. GO DO IT!!!!!

April 8, 2009 - Do You Have Special Growth Systems?

Main Idea

Do you think you can grow your business by focusing on systems?  Are there key points where your systems, or lack thereof, determine what happens next?  Have you thought about the power of questions in your customer service delivery?

Expansion of Idea

Growth systems can take many different forms.  They may be a carefully displayed sign, an unusual question, a prompt follow-up, or a valuable piece of advice.   These systems can be critical in helping potential customers deal with you as opposed to your competition.  There are small windows of opportunity for you to help a potential customer buy from you.  Your job is to figure out how to help these potential customers make the right decision. 

Too often we compete on price because that is the only thing that the customer can evaluate.  Your job is to separate your products and services from the competition in a creative way that is not focused just on price.  You must add value as defined by the customer.  When you can consistently do that, you will create a customer for life.  If you think this is theoretical, I want to leave you with two words, “HAPPY MEAL”.

Suggested Areas to Start

1. Make a list of key contact points with potential customers.

2. Evaluate your processes in handling the interactions.

3. Measure how effective the systems are in converting potential sales into actual sales.

4. Brainstorm ways to improve those processes.

April 2, 2009 - Are Your Systems Breaking Down?

Main Idea

Do you constantly find yourself handling the same problems over and over? Are your mornings spent putting out the same fires you took care of last week? Are you always shuffling through the same stack of papers to find what you need?

Expansion of Idea

Many business owners have a hard time taking the time out to review their systems. What they may not realize is evaluating and improving their current flawed processes will end up saving them many hours. More importantly, it may save a customer.  Personal commitment to improvement is crucial. You must commit to taking the time to brainstorm areas where you may have gaps in your processes. 

This is the area that problems arise. Work on one system at a time. Small improvements over time create better systems, which in turn, will improve productivity. Each week brainstorm a way to make that specific system just a little bit better and implement immediately. If you choose your system for marketing to begin with, involve your marketing team. Ask them where their recurring issues lie. There may be a very simple tweak to your process that will close the gaps.

William Edwards Deming, the late author, statistician, and consultant best known for improving production in the US during WWII, said "97% percent of all business failure is due to the system – not the person."

Suggested Areas to Start

1. Evaluate where you have recurring problems

2. Commit to spending time each week to devote to improvement.

3. Brainstorm and collaborate with employees involved.

4. Document all process changes and update all staff with new systems and policies.

March 25, 2009 - What is a System?

Main Idea

What do you think about the word “Systems”?  Does it put you to sleep immediately or does it take at least 3 minutes?  Is there anything in the world more boring than looking at systems?  (Try reading the tax code.)

Expansion of Idea

Right now, everyone is looking to find new business.  We are trying to replace customers that are not buying or have gone out of business.  We are always looking outside of our business instead of sometimes looking inward.  The answer for a lot of us is to improve our systems.  This is one of the four main ways to grow your business and is actually the key to everything. 

We are going to discuss systems and various examples over the next few weeks.  The starting point is to define what a system is.  A system is how work is performed.  Systems are either soft systems or hard systems.  A hard system may be how the financial statements are generated or how goods are shipped out of your warehouse.  A soft system would be how you answer the phone or how you manage your people.  Systems only work when there is consistency of application.  (There is a place for appropriate use of exceptions also.)  Your team must understand and embrace the systems.  

A great example of using systems to bring a group together is the University of Missouri basketball program.  The new coach, Mike Anderson, put systems and policies in place which insured that the team would play hard and at a high level.  In just three years, he has taken a program that was miserable and will play this weekend in the NCAA Sweet Sixteen.  Frankly this is unbelievable considering the shape that the program was in when he took over.  The key is the relentless focus on systems and the discipline to accomplish them. 

Suggested Areas to Start

1. Define your systems

2. Review your systems with your team and determine if they are being followed.

3. Commit to spending some time every week to work on systems.

March 18, 2009 - Do You Know the Average Value of Your Sales?

Main Idea

Do you know how many customers you have, how often they deal with you and how much they spend?  When was the last time you met with your sales or customer service representatives and focused on increasing how much your customers spend with you?  Do you know what percent of your customer’s wallet you have?

Expansion of Idea

A key part of growing your business is to increase the average value of each sale.  A good starting point is to look at your prices.  Are you charging the right prices?  Everyone looks to cut prices to increase sales but you are just giving away margins.  (Yes, there are times to cut prices.  However, they are not as often as most people think.)  Maybe there are specific items or services that you are selling below your competitors.  Raising prices on those items will fall through to your bottom line.  A good example is a convenience store.  They may have to be competitive with the price of gas and maybe cigarettes.   Everything else is priced significantly above a grocery store. 

The other part of increasing the average value is to make sure that you are capturing more of your customer’s wallet for the items that you sell.  Almost all of us have competitors that deal with our customers.  Rarely does any firm capture 100% of its customers business.  I could argue that, even if I do a client’s tax return but do not do the tax returns for their kids, then I have not captured 100% of the family business.   A car dealer may sell a car to a family, but then it does not do all of the maintenance.  A wholesaler may have a good customer which purchases one product line direct from the manufacturer or from a competitor.  All of us have situations where we can increase the amount of sales by expanding our definition of our customer, by inquiring how we can provide additional services, or by just providing great service.

Suggested Areas to Start

1. Get baseline measurements of the average value of your sales.

2. Pick one customer and brainstorm how to increase the value of the sale.

3. Question your Questions.

March 11, 2009 - How Do You Increase Customer Sales Frequency?

Main Idea

Are your customers loyal? Do they come back to your business time and again? If not, why not? What measures do you have in place to track client retention?

Expansion of Idea

Increasing the number of times a customer chooses to deal with you is an important factor to increase your profitability. Some argue it’s the most important factor. According to Frederick Reichheld (author of The Loyalty Effect), a 5% increase in retention (of the right customers) can produce as much as 125% increase in profit! 

How do you retain customers?  If you can deal with them on a frequent basis, it is significantly easier to retain them as customers.   You have an ongoing connection.  Too often, we ignore our existing customers for the new customer.  When we focus on our key customers and their true needs, we will find additional ways to serve them.  It may not always be a sale, but keeping the constant contact will help sales in the future.  This may require a little creativity.  It also may cost a little.  However, you can compare that cost with the cost of acquiring a new customer.  Which is cheaper?  The hidden costs of customer turn can get fairly big.  Part of your marketing budget should be dedicated to increasing customer transaction frequency.  This is probably the part that will pay off immediately. 

Suggested Areas to Start

1. Get a baseline on how often customers deal with your organization.

2. Compare a loyal customer with one that does not deal with you as often.  Brainstorm with your team on how to improve the connections with the customer that deals with you less frequently.

3. Get feedback from your customers regularly.

4. Pick one customer and try to improve your personal connection.

March 4, 2009 - Are You Focused On Growth?

Main Idea

Are you focused on growth right now?  Or, are you in a sandbag mentality and digging in for the continuing onslaught of negativity and bad news? 

Expansion of Idea

Attitude is a choice.  I choose to believe and fight for growth.  You can lose a lot of sleep worrying about what is going on in the world.  But there are wonderful opportunities also.  We just have to work for them.  Over the next four weeks we are going to address the four ways to grow your business. 

Today’s topic is to pursue new customers of the type you want.  Customers want to deal with businesses that are focused on service and are not depressing to deal with.  That means there are opportunities for growth because too many businesses provide awful service and are just waiting for the end of the world. 

The key for small business owners is to define the characteristics of your best customers and then decide how to get more of them.  This could by marketing, by referral, by phone solicitation.  The how will be determined by the nature of your business.  Unless you are focused this way, you will slowly wither and die.  How did you get your best customers?  Do you have a referral system?  When was the last time you checked in with a customer just to see if you could help? 

Suggested Areas to Start

1. Figure out what kind of customer fits your organization.

2. Brainstorm ways to connect with that specific clientele.

3. Go after those customers.

4. Fire customers that are wasting your time.

5. Meet with other business people and compare notes.

February 25, 2009 - How Much More Negativity Can You Handle?

Main Idea

Did your parents ever tell you that TV would rot your brain? They were probably referring to your morning cartoons or after-school sitcoms, but what about the news? We are surrounded by media everyday with the newspaper, television, and even the internet; all of which filling our heads with negativity. What has this done to your attitude? In turn, what has your attitude done to your life?

Expansion of Idea

Even though there isn’t much we can do about the financial state of the country, simply improving your attitude can have an enormous effect on your business and your personal life as well. After all, do you have a car? Do you pay a mortgage? What about a job? If so, you should have a joyful spirit of thanks, as a growing number in this country are going without. My guess is you have many reasons to be thankful.

The financial experts in the media shower you with reasons to be worried and depressed. Do you have to listen to them? As Thomas Jefferson put it in 1825, “How much pain have cost us the evils which have never happened.” A positive attitude and thankfulness can be contagious, and the same is true with negativity and pessimism. You have a choice in how you react to our world. Improve your mind-set and everyone from your spouse to your best customer will thank you!

Suggested Areas to Start

1. Turn off the news!

2. Read a book that inspires you.

3. Make a list of what you are thankful for.

February 18, 2009 - Do Short Term Decisions Impact Our Long Term Brand?

Main Idea

Have you ever done anything in the heat of the moment and then 10 minutes later or 10 days later you regretted it?  Do you have a process to test your decisions and see if they make sense from everyone’s perspective? 

Expansion of Idea

On the front page of the Wall Street Journal a few weeks ago, there was an article that discussed Saks Fifth Avenue and their actions during the Christmas shopping season.  The gist of the article explained why they slashed their prices to a ridiculously low level.  The main reason was to beat their competition.  The problem with this is that their suppliers were very upset because Saks changed the fashion designers brands.  In addition, they totally changed their business model, probably for a long time. 

Most retailers did something along this line.  I am not going to judge whether or not it was the right business move.  I do not have the facts.  But I do want to talk about the impact that these decisions have on our business model and our branding.  Our branding is something that most of us do not spend enough time on because it is an intangible.  It doesn’t show up as cash in our bank account in the next week.  Our branding is our identity as business people and organizations.  It is what we are selling.  Our decisions and actions during these uncertain economic times can frequently change the brand and ultimately determine our future.  It doesn’t do much good to cut customer service levels so that you can limp through the current situation and at the same time lose customers whose lifetime value could be hundreds of thousands of dollars. 

During times like these, it is critical that decision making go through a process to evaluate the effects and actually be part of your longer-term plans.  We have to get away from strictly reactive decisions and become more proactive in our decision making.

Suggested Areas to Start

1. Define your process for making key decisions. 

2. Add customers and employees, if necessary, to provide filters.

3. Evaluate recent decisions and see if they could be handled better.

4. Communicate with your team.

February 11, 2009 - Who is In Charge of Marketing?

Main Idea

Who in your organization is in charge of marketing?  What is marketing?  Do you outsource this?  Do you do it cheap in house?  Or can it be a philosophy of business and a unifying theme for your employees to follow?

Expansion of Idea

Marketing is defined by the American Marketing Association as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. The term developed from the original meaning which referred literally to going to market, as in shopping, or going to a market to sell goods or services. (from Wikipedia)

Most people view marketing as something that the marketing department or sales department do.  And yes, they may be the point person in the marketing campaign. However, marketing needs to be something that almost every job in an organization does on a daily basis.  How many times have you been cut off by someone in traffic and you can tell by the emblem on their car what church they belong to?  That is marketing.  Or you have a problem with a bill and you call customer service.  That is marketing.  You walk in a restaurant and they have expensive prices on the menu and cheap tables and paper placemats.  That is marketing.  You tell a customer that you will call back and you do, 4 weeks later.  That is marketing.  You answer the phone on the 15th ring.  That is marketing.

Suggested Areas to Start

1. Define marketing in your company.

2. Define how you fit into the marketing plan.

3. Identify one idea to improve your organization’s marketing

4. Lead your team to embrace this idea.

5. Brainstorm how to implement the idea.

6. Put it in practice. 

February 4, 2009 - Can You Afford to Cut Your Prices?

Main Idea

When is the last time you bought something on sale? Do you get jazzed when you get a great deal?  Can home builders generate sales by reducing prices?  Can you predict the next great big sale at Macy’s?  In this economic time, many retailers are offering deals and discounts to draw in customers. This can have a positive effect on the wallets of consumers, but how does it affect the company? How many additional customers will they need to make up the difference?

Expansion of Idea

Pricing is a critical piece of a business.  Most business people do not fully realize full relationship between price cuts and survivability.   For example, if your company has a margin of 30% and you decide to reduce your prices by just 10%, you will have to increase your sales volume by 50%.  Assuming you are able to generate that 50%, you may then need to consider hiring more staff to accommodate the increase in activity. This can be a death spiral. 

What most people do not think about is that sometime it is better to increase prices.  If you are providing superior customer service, some customers will not change.  The key issue is how many you will lose.  If you look at the example of a margin of 30% and you increase prices by 10%, you can afford to lose 25% of the customers before it adversely affects your profitability.  Before jumping the gun on slashing prices, do your research and determine how much business you will have to pick up to make up for the loss of profits.  Then make a wise choice on adjusting your prices.

Suggested Areas to Start

1. Know your gross margin. 

2. Communicate that margin to your team.

3. Evaluate the effects of price cuts or increases.

4. Brainstorm how to avoid price cuts.

January 29, 2009 - Do Your Employees Own Their Jobs?

Main Idea

When was the last time that you dealt with a customer service representative who really took care of you?  What was the difference between that person and someone who failed miserably?  Is there any difference in technical training?

Expansion of Idea

How we service our customers is critical to our survival in this crazy economic environment.  I would contend that there are two types of people in our organizations, owners and employees.  The only difference between the two is an attitude of service.  If you own a business, you are going to make sure that customers are taken care of properly.  Truly great companies hire employees who have this ownership mindset.  They view serving their customers as a privilege that they want to keep.  They make sure that their customers are served properly.  And if there is a problem, they stick with it until it is completely taken care of. 

I just got off the phone with a representative of a major brokerage firm.  I have been trying to get an account transferred for three weeks.  I called last week and I thought it was taken care of.  Instead they did something completely wrong.  They were able to fix it, but the whole problem is a function of follow through by their representatives.  I have made five or six phone calls to take care of something that should have only taken one call.  Everyone makes mistakes.  The difference between great companies and everyone else is how you deal with the mistakes.  Do your employees own their jobs?  Do they take pride in what they do?  Do your customers get a thrill from dealing with your company?  What could a change in attitude mean to your business?

Suggested Areas to Start

1. Define ownership for your job.

2. Define ownership for the people who work for you.

3. Empower the new owners to take care of the customers.

January 21, 2009 - What is Your Vision?

"Alice:. thank you, but- but I just wanted to ask you which way I ought to go.
Cheshire Cat: Well, that depends on where you want to get to.
Alice: Oh, it really doesn't matter,
Cheshire Cat: Then it really doesn't matter which way you go!"

From Alice in Wonderland by Lewis Carroll

Main Idea

Do you need glasses for your business?  Can you see where your business needs to go?  Or are you in the middle of Interstate 55 in central Illinois in the middle of a snowstorm?  Why was Barack Obama elected versus John McCain?

Expansion of Idea

Vision is critical for us to see and explore the world.  When we can’t see properly the world is fuzzy and if not corrected ultimately leads to mistakes and problems because we stumble over an obstacle.  There is more to it than just seeing clearly.  When untreated, we can get headaches and other illnesses because some part of our body isn’t working right. 

The same is true for our businesses.  When we can’t see the future and where we are going, our whole organization can suffer.  Right now, it is incredibly hard to imagine what is going to happen in the business environment.  But that does not mean that we should not have a vision of how we want our businesses to operate.  Too many of us are like Alice.  We have not clearly thought through where we want our businesses to be.  By clearly identifying where we want to go, our path there and how we will operate, we are well on our way.  Too many of us have our heads down with the current economy and are just dodging issues instead of focusing on the bigger picture and determining if there are better opportunities.  Whenever there are major changes in the business environment, there are huge opportunities.  It doesn’t mean that they will pay off immediately, but it does mean that we can run better businesses. 

Suggested Areas to Start

1. Describe how you see your business or your part of the business to a coworker, partner, spouse, customer or anyone off the street.

2. Ask for feedback.  Is it clear? 

3. Keep redoing the above steps until you have a clear vision.  Then communicate it.

January 14, 2009 - Harrison the Hedgehog

Main Idea

Does your company have a mascot? If it did, what would be chosen to symbolize your organization? What are some characteristics of your business that could be represented by an animal? Why do you suppose our firm chose a hedgehog to join our team and be a symbol of our business?

Expansion of Idea

Jim Collins, Author of Good to Great, has popularized a principle called “The Hedgehog Concept”. This concept explains how companies, who were good solid companies, transformed themselves to great companies.  All of the companies that he researched established this strategy which clearly identified three areas.  Those areas are what they can be the best in the world at, what they are passionate about, and what drives their economic engine. Jim Collins based his concept on the ideas of Sir Isaiah Berlin who wrote an essay titled, “The Hedgehog and the Fox”, which tells a story of a cunning fox, who day in and day out stalks the hedgehog just waiting for the right time to pounce. He attempts many different strategies, but no matter what he tries, the simple hedgehog has only one defense to protect himself. He curls up into a ball and points his spikes in all directions, at which time the fox realizes he cannot win. Berlin based his essay on the ancient Greek parable, “The fox knows many things, but the hedgehog knows one big thing.” Princeton professor Marvin Bressler pointed out the power of the hedgehog when he said, “You want to know what separates those who make the biggest impact from all the others who are just as smart? They’re hedgehogs.”

You may have seen changes in FitzGerald & FitzGerald over the past five years.  We are getting closer and closer to our hedgehog concept.  (I hope.) The key point is that as you get closer to that point, you will be providing better and better service and you should be running a significantly improved business.  We are not chasing every piece of business.  We are focused on the customers that we can really help.

Suggested Areas to Start

1. Email Heather to see a picture of Harrison the hedgehog.  Or, stop by to see him in person.

2. Read the book “Good to Great” (I know I have recommended this before.)

3. Schedule a planning retreat to discover your hedgehog concept.

4. Analyze your business with your team to determine what your true strengths are, what you are passionate about and where you are making money.

January 7, 2009 - What is Your Strategy?

Main Idea

What are you good at?  Can your business or organization be the best in the world at something?  What is it?  Or do you just need to survive?  Should you sell anything at any price just to make a couple of dollars?  What do you think about a company like Macy’s?  What is it, a department store or a discounter? 

Expansion of Idea

Over the holidays, I went into Macy’s at West County Mall to return some clothes for my son.  The number of people in the mall and in Macy’s was overwhelming.  I do not normally go through the newspaper ads and I did not realize that they were having sales at such low prices.  It seemed like all of the clothing displays had signs saying 50-70% off.  And I think there were some additional savings if you used the Macy’s card.  The store has gone from a place where you could get nice things at a reasonable price to a pure discounter.  It seems like most stores have not figured out where they add value and, therefore, they can only compete on price.  Unless you are Wal-Mart and are set up to compete on price, this is a doomed strategy. 

Most of us have not done the hard work in evaluating our businesses and determining the key areas to focus on.  Until we get this right, we are going to continually lose market share, profits will evaporate, and we will see problems creep up in unusual places.  We need to ask ourselves what we can be the best at in the world.  What changes need to happen to accomplish that?  (Next week I will introduce a couple of other things to consider as you move down this path.)

Suggested Areas to Start

1. Ask yourself these questions:

   • What is your business?

   • Who are you serving?

   • Are you really good or just average?

   • Can you improve?

2. Read the book “Good to Great”