“If the current trend continues …”
How often have you heard someone say that when talking about the future? “If oil reserves continue to be depleted at the current rate …” “If housing prices keep going up …” “If our business keeps growing by double-digits …”
Extrapolation. Extending a past trend into the future. We seem to have a default assumption that things will keep going in the direction they’re going. The problem is in most cases they don’t. New oil reserves get discovered. The housing market gets overheated. Businesses get knocked down.
Assuming the extrapolation of a trend ignores the importance of context. Sure, oil reserves will continue to be depleted … unless new discoveries and better technology help to replenish them. Yes, housing prices will keep going up … unless too many homeowners assume too much risk or new buyers can’t afford to get into the market. And of course your business will keep growing by double-digits … unless competitors take action, technology evolves, markets change and the economy fluctuates.
Trends are not guarantees. They’re often not even the best predictors.
When assessing and forecasting for your business, don’t assume the extrapolation of trends. Ask yourself which contextual factors have supported or inhibited the trends and how could they change.
True entrepreneurs have the gift of seeing opportunities everywhere. True entrepreneurs have the curse of seeing opportunities everywhere. The very trait that allows them to envision the possible, allows them to get distracted from achieving the possible.
I recently had lunch with a client, two co-founders of an up-and-coming consulting firm. Having helped them narrow and redefine their focus, and reformulate their positioning, they’re now excited about the possibility of pursuing multiple new verticals and even international work.
Stop. Take what you’ve proven in one vertical and successfully extend it into a ripe-for-adoption second vertical. And defer the complexities of doing business internationally – cultural differences, staffing, regulations, and so on – until that second vertical is proven. Then you’ll have a vertical-independent platform from which to grow your business and expand in the direction you choose.
Many growing businesses lose focus and spread themselves too thin. As a result, they outstrip their infrastructure and ability to deliver. And they implode.
There will always be more opportunities than you can exploit. Always. Narrow your focus. Intensify your commitment. And rigorously execute.
Business is so complex. If only they could boil it down to a few, simple rules for success.
They can. And they have. The authors of a recent HBR article looked at over 25,000 companies across 44 years and deduced … dadada, daaaaa … the three rules for success! (Caution: You may not want to get too excited yet.)
Rule number one: Better before cheaper. OK, hard to break into or upend a market with a so-so product regardless of the price. Got it.
Rule number two: Revenue before cost. No revelation here. You can’t efficiency your way to success if you don’t have revenue. Get the lifeblood flowing before you obsess over cost.
Rule number three: There are no other rules. Cute. I guess “The Two Rules of Success” seemed a touch light for a title, so they came up with this third rule.
So there you have it. Feel better now? No, me neither.
Think I’ll stick with my three rules for success: Develop and sustain the right focus. Continually create the right environment. And get the right people. Do those three things with ruthless consistency and your people will do what it takes to win.
Last week I provided three benchmarks to test the strength of your brand. This week: what is the value, the equity, in a strong brand? Consider the Brand Pyramid TM shown above.
If the people who you want to know about your brand don’t know about it, even when they see or hear your name, then congratulations, you have zero brand equity. But if they recognize your name or, even better, can recall it, then at least you have some brand equity.
Your brand has more value if people have positive associations with it. Meaning, what they think and feel about your organization and offerings, and more importantly what they think and feel about themselves when they engage you.
Your brand has even greater equity if it creates attraction during the buying process. Do they merely consider you? Or do they prefer you? Will they explicitly request you? Most powerfully, will they insist on using you?
If people are asked, will they recommend you? Even better, will they promote your brand even if they’re not asked? If so, you’ve reached the top of the pyramid.
Today, how much equity is there in your brand? To compete and win, how much equity does there need to be? Build the pyramid.
How strong is your brand? Here are three benchmarks against which to test it:
1) Focused and Memorable
It’s often said that you can’t be all things to all people. You can’t be both Courvoisier and Coca Cola. Every strong brand is known for something. That something has to be memorable. It can’t be convoluted and it can’t be too conceptual. What is BMW known for? Performance. That’s why their tagline is (can you complete it?) “the Ultimate _______ _______.”
2) Desirably Different
Everyone talks about differentiation but there are many ways to differentiate yourself that are irrelevant (or even offensive) to the market. You have to be different in a desirable way. Colgate Kitchen Entrees, BIC disposable underwear, and Harley-Davidson perfume were all different. Quick test: desirable or not?
3) Ruthlessly Consistent
If you crave a burger from time to time and you find yourself traveling, you want to know that the Big Mac in Austin will taste like the Big Mac in Boston. Your desire is based on an expectation and if your experience doesn’t match it then you’re disappointed with the brand. With strong brands, your brand experience consistently matches your expectations.
How does your brand measure up against these three attributes? And which attribute should you strengthen to be more competitive?
It feels like you’ve got a thousand projects on the go and everything is a triple-A-one priority. Sound familiar? So how do you prioritize all those priorities?
Answer: Rate each project against a set of criteria. The few projects that best meet your criteria become the true priorities. Here are examples of criteria:
- Resource requirements
- Availability of resources
- Time to complete
- Probability of success
- Organizational trauma
- Payback timeline
- Strategic Impact
First, decide which criteria are most relevant for your situation. Next, using a 5-point scale for each criterion, rate every project. For example, a project with no real strategic impact would receive a “1” while a project with a very high strategic impact would receive a “5”. If some criteria are more important than others, then you might weight them (e.g., return-on-investment could get twice the points of resource requirements).
Once you’ve completed the set of ratings for each project, see what the numbers tell you. Finally, do they pass the “gut-test?” Do those projects that stand out seem like the top priorities?
Everything can’t be a triple-A-one priority. Prioritize those priorities.
A strategy is simply intention. It doesn’t become real until it’s paired with structure and action.
- Sponsorship. If it’s important enough to be a strategy, then someone on the executive team needs to own it and be accountable.
- A Champion. The strategy needs someone who is responsible for overseeing its management and execution. That’s the champion.
- Milestones & Timelines. You don’t want to find out at the 11th hour that the strategy is off-track. That’s why it’s important to have 5-8 high-level, time-linked milestones that indicate if sufficient progress is being made.
- Resources. Identify the required financial, material and people resources at the front end of the strategy. Don’t be surprised if you discover you need to secure additional resources or stretch timelines with existing resources.
- Progress Tracking. The strategy team should meet no less than monthly to review commitments, track progress and set new commitments. It builds a team culture of expectations, report-out and accountability.
- Recalibration. Reality changes. So the plan may need to change. Set a dedicated semi-annual meeting to review new information, test your original assumptions, and discuss implications for the strategy. Make changes as required.
Many so-called strategies never translate into results. Following these six steps will maximize your chances.
It’s an age-old conundrum: should you focus on process or results? Process is how stuff gets done. Results are what need to get done.
Some leaders are intensively results-focused. Hit the number! Everything comes back to the number. People aren’t allowed to forget about the number. As a result, in many cases, the number gets hit. Yet in other cases, the number doesn’t get hit and it’s not clear how you manage towards the number.
Some leaders are painstakingly process-focused. It doesn’t mean they don’t care about results, it means that to get the results they’re continually trying to determine and control how. That’s process. Leaders who focus on process often hit the number and are in a better position to know why and to replicate it. On the other hand, I’ve seen leaders who are so process-focused that the target is allowed to keep slipping back because the process isn’t quite right.
So what’s the answer? Results-driven and process-focused. In this time of big data and analytics, it’s irresponsible not to try to understand the variables upstream of results and to influence them. Yet process for process sake is simply activity. There needs to be a continual positive pressure to get the results.
Drive for results. And focus on process.
If there’s one activity that sets strategic leaders apart, it’s that they regularly reflect.
Beyond managing the whirlwind of the day-to-day, they reflect on how the world is changing. How the market environment is changing. What it means for their organization. What their long-term goals should be. How their actions today are supporting those goals. What they must change to achieve them.
Strategic leaders realize the limitations of managing exclusively to the day-to-day. They fear becoming effective and efficient at what is increasingly irrelevant.
Take time to think. Look beyond the whirlwind while you’re riding the whirlwind.
Last week I covered why most Mission Statements are meaningless. So while I no longer believe in Mission Statements (or Vision Statements), here’s what I do believe in.
Whether it’s a networking event, a trade show or a social encounter, when you tell someone the name of your organization they always ask the same question: What do you do? And they want you to tell them in one, simple, easy-to-understand statement the essence of what your organization does.
When you want your people focused and motivated, looking beyond their day-to-day jobs, understanding the big picture, you have to continually convey one thing: What winning looks like.
What We Do and Winning are positioning statements. And good positioning statements have these elements:
1) Purposeful. They’re crafted with a particular audience and objective in mind.
2) Memorable. To be effective they have to be memorable and to be memorable they have to be concise. And not just a mash-up of overused words.
3) Conversational. The intent isn’t to end the conversation it’s to engage the conversation. Your statement should naturally lead to follow-up questions: How do you do that? What markets do you serve?
Yes, you should have positioning statements. Just don’t default to meaningless missions and vacuous visions.