May 15, 2020 - What is Critical to Your Success?

Main Idea:

Has your business changed during the pandemic?  Are you comfortable with where you are and where you are going?  Is the world changing around you too much and you aren’t sure where you fit in?  What is success going to look like in 4 months?

Expansion of the Idea:

It has been interesting listening to various analysts talk about whether Major League Baseball will reopen this year.  There are a lot of moving parts in connection with keeping players safe and at the same time creating the right environment for playing ball.  The owners leaked some information to put the players on the defensive.  The players are digging their heels in and will not renegotiate how much they are paid.  The whole thing comes down to money.  The problem is that no matter what, everyone is going to take a huge financial hit this year.  The one thing that I have not heard much about is whether or not the fans will watch the games online and start to go to the ballpark when it opens up.  The owners and the players seem to be taking it for granted.  And this could create a huge long-term problem for MLB, especially if they don’t agree and baseball is deferred until 2021.

There are a number of critical pieces that each party must get right.  The owners must make sure that they are not committing financial suicide.  The players have to maximize their income since it will be cut by at least half.  The minor leagues will probably be decimated since they won’t have any revenue.  Everyone has to be able to do this safely, which is probably impossible.  And all of this is assuming that there isn’t a huge second wave of infections. 

I don’t know the answers to any of the above.  The point is that it requires a lot of time and discussions to determine what is critical.  All of the stakeholders need to be involved.  The end solution has to work for everyone. 

The same is true for our businesses.  We need to define what is critical for our success.  This could include:

• Sacrificing the present for the future

• Looking into alternative methods of delivery of our product or service

• Changing how we sell

• Changing what we sell

• Changing who we sell to

• Lowering our margins

Each of us has different things that are critical for our success.  My critical success factors have changed dramatically over the last 2 months.  Now one of the most important things is the financial (and mental) health of my business clients.  This is something that I was always focused on but now it is absolutely critical because clients can’t just get out of a hole because the economy is completely different. 

All of us need to spend the time thinking about this and working through our businesses to define this.  By focusing on what is critical, we have improved our odds of getting through this period.

Next Steps

1. Have you identified what is critical to your business?

2. Can you measure it?

3. If not, brainstorm with your team to think through your business.

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”

July 25, 2008 - Do You Understand Your Business Environment?

Main Idea

Does the idea of strategic planning scare you?  Do you have to be able to see into the future?  Is it even necessary?  When was the last time you took some time to adequately plan for the future for your business?  When was the last time you planned for your family?  Do you know your partner’s goals?  What about your spouse or your team member’s goals?    

Expansion of Idea

My son, Mark, was able to go surfing this year and explained to me the whole concept of riptides.  This was not something that I had thought a lot about since they don’t generally occur in Ellisville Missouri.  Basically, they can be very beneficial if you find the riptide and ride the riptide out with your surfboard.  But many people drown in riptides because they try to swim into the face of the riptide instead of swimming parallel and getting out of the flow.  This is just a matter of planning and understanding the environment that you are in. 

The business world is the same.  Strategic planning is often viewed as worrying about the future.  In a few isolated instances with technology, that is correct.  However, for most of us strategic planning is understanding the world as it exists today.  Your business for the next five years is to a large extent already determined by inventions, patterns and world climate as it currently exists.  But most of us do not take the time to adequately assess our businesses, our lives and the world to put a plan in place that will help us not only survive but thrive in the future.  We are just trying to get back to the shoreline and safety. 

Area to Start

1. Talk to the key people in your business and your lives

2. Assess your business and personal goals

3. Ask yourself the key questions, “Do you have a good direction of where you are going and are you on track to get there?”

July 11, 2008 - What is Your Strategy?

Main Idea

Last week we celebrated the Fourth of July, which was the 232nd anniversary of our independence. That holiday is very relevant for most small business owners because they went into business looking for freedom. However, most small business owners aren’t free because they are held captive by their business because of either a lack of strategy, a lack of clarity about their strategy, or a lack of execution.

Expansion of Idea

How do we gain freedom? We need to be crystal clear about what our strategy is. Only then can our team can help us get to our destination. Do you know what your strategy is? If you aren’t clear, then you need to work on your clarity. One simple way is to start defining what you are not and then actually start a “Not To Do” list. After you do this for awhile you will start getting closer to your true strategy.

Several years ago, I eliminated almost all of the personal tax returns for clients who live in other states. Some of which had been with my firm for over 15 years. This was a hard decision, but I didn’t add as much value to those returns. They were unlikely to start businesses that we could work with and used very valuable time during tax season that I could spend more productively with my business clients.

There were some important lessons for my team as a result of this. They realized that we needed to spend more time with these business clients to help them achieve their goals. Taking this step also helped the team see that I was serious about doing more for the small business clients, allowing them to concentrate on a more narrow focus and not have to worry about 25 different states. Deciding what you are not going to do will free up valuable time and resources. 

Areas to Look At

1. Systems

2. Customer Selection

3. How you and your team spend time

4. Customer Profitability

5. Product Profitability

6. Employee Profitability