The Primacy of Planning

Operations Focus

By Tim Connor, Rodeo! Performance Group, Inc.

“@#$%& it! Will you quit bugging me with your planning meetings – I’ve got work to do!” That was a statement made to me by a manager when I asked him – for the third time – to work with a group of us assigned a critical project. The project, if carried off well, would have profound effects on the long term health of the business. But it ended up fizzling after two months. Why? Because this manager, in a crucial department, didn’t see the need for planning, and wouldn’t ‘play’.

Planning can be looked on as a pain in the neck. Often, at the very best, we do it because we know we ought to. But it’s done grudgingly, and because of that incompletely. Then when the plan doesn’t work we reinforce the thought that planning is a waste of time. But really, is it? What are the pitfalls of not planning?

Pitfalls of Not Planning

First of all there’s the effect on the plan itself. What happens when we don’t plan at all? That’s more easily seen in the example of a good vacation.

Most of us wouldn’t think of going on an extended vacation without doing significant planning. Why? Because it’s precious time to us! We want results from it – results like relaxation, fun with others, rejuvenation. We judge ‘effectiveness’ in a vacation by the lack of hassle, by things coming off right, the absence of nasty surprises, the pleasantness of the surroundings, everything working like it should. And what is the final result? A good vacation brings us back refreshed and re-created (recreation?), and makes us much better able to take up our work again. In fact, a good vacation will change our entire outlook on our work, and make it a pleasure again – especially if it had stopped being a pleasure before. So we plan our vacations. We look at where we will go, what things we will do; we look at the accommodations we’ll book, and the surroundings of those accommodations. We look at resources – the money we’ll need to get there and the money we’ll have on hand for spending. Is such planning worth it? Most of us would answer “Absolutely!”.

So what about NOT planning a vacation? Well, you can look forward to one sure thing – surprises. Now, I like surprises. But I don’t enjoy spending hours in a destination trying to find a room. I don’t like discovering that things in my hotel don’t work, or that the place isn’t clean. One surprise we encountered on a poorly researched vacation landed us in a room where the carpets were all wet. I wondered if this was because they’d just cleaned them, and further exploration yielded the fact that the toilet had a habit of backing up. Now THAT was a nasty surprise. Did we stay in that room? What do YOU think?

Lack of planning can yield similar surprises in business. Let’s look what goes into a business planning process, and how it can be done right.

Perils of the Planning Process

Let’s face it, it’s fun to get right down to the meat of our work, and planning doesn’t let us do that! That is the number one reason leaders don’t like to plan. We are busy, there are pressures to get things done, and planning takes time. It just seems easier and more enjoyable to do the job. But consider the surprises we set ourselves up for when we do it that way. We can find ourselves wasting time looking for data that’s hard to find or even missing completely. We find ourselves doing things over, causing rework for other parts of the business, lowering morale among staff. Ultimately, we don’t get the results we want, and the business itself suffers.

Often, leaders look at planning they HAVE done (poorly!) and then aren’t satisfied with the results they obtained. Such results can be a powerful negative deterrent to doing any planning at all. And while our plan may have given us poor outcomes, it’s not the planning itself that’s the problem, but most often the way it was done. Good planning takes time, and it should be structured – done around certain principle areas. Let’s look at what those principal areas are.

Principles for Planning

Good planning starts with looking at the results or outcomes that are needed. Those results might include increased use of our product or service. They might include increased customer satisfaction with us, or better patient outcomes. They may just be plain, old-fashioned making more money! Whatever they are, good planning begins with a clear understanding of the desired results.

Time also need to be considered, and in two important areas.

First, the actual time to plan must be enough for effectiveness. This can be hard because we aren’t ‘doing’ when we’re planning. But as we saw earlier, not taking the proper amount of time to plan can generate large volumes of wasted time later, and that wasted time affects productivity, staff morale, and ultimately business success. It’s best to take the time for planning well.

Second, planning should include the time needed for doing the right work to get the right outcomes. Leaders need to know how much time will be needed for critical parts of the project or business. We have to consider time needed for marketing, for interacting with the customer, the actual cycle time for producing our services or products. We need to consider the time needed for maintenance – both of equipment and of us and our staff! We need to know how long it will take to get important information, and how long it takes to get it to others who need it. So planning time is a principle leaders must use in planning.

Another principle is planning for resources. This is obvious, but it has to be done systematically. We have to consider the resources necessary to bring us the very best results. Those resources will include money: for marketing, for equipment, for proper staffing, for space to work. Resources include the materials themselves: what materials, what equipment, what kind of space, what information? And they include people: what skills will my people need? How many people? Where will the people be needed? So planning for resources is critical to a successful planning effort.

Finally, really good planning means planning for information. What information will be needed for each part of the project to work well? How quickly can I get it, and do others need it quickly from us? Planning for information means knowing where to get the information, who has it and is it the best? The right information at the right time in the right form is critical to effective businesses, more so now than ever before in history. So the last principle in planning is planning for information.

Primacy of Planning

To sum it up, good planning is always the foundation of good business success. Good planning involves knowing the results you want, taking enough time to plan, planning for the time needed to run the project or process well, planning for the resource needs, and assessing the information needs for the project.

No matter how skilled workers are, or how good leaders are, or how state-of-the-art equipment is, a poor plan – or no plan – will bring it all to nothing. Take the time to plan well!

Marketing Your Organization’s Hidden Treasure

Strategic Planning

By Tim Connor, Rodeo! Performance Group, Inc.

If you could answer a few little questions to significantly increase the number of interested people showing up on your business’s doorstep, clamoring to find out how you can help them, would you make the effort?

Who SHOULD Your Clients Be?

Many business owners and executives don’t take the time to identify just who – specifically – would find the most value in their product or service. Remember the word “treasure” in the title? Let’s qualify that with the understanding that a select group will find the most value in what your organization provides. Those who find the that value, or “treasure” are also those who are willing to pay the most for it. Why? Because it IS valuable to them!

A shotgun approach to marketing – that is, marketing to anybody and everybody – will bring some results, but it’s a very expensive way to do things. It’s imperative, then, to evaluate your buyers to find those who find the highest value in your service or product.

As an example: five years ago a builder client had been told by his parent company to target families with incomes of $75,000, which would provide a profit on each house he built of about $1500. He did that, and his mail campaign to people in this group produced 1/10 of 1% response rate to his letters. He wanted to do better. With research (and some help from a business coach) he found that a small portion of his clients, those with incomes over $100,000, were actually a large portion of respondents to his mailing, AND provide an average profit on the homes he of double what he made on everyone else!

With that in mind, he did another mailing, this time targeting those families with incomes of $100,000 or greater. Immediately – within a week in fact, his response rate jumped to 2% – roughly 20 times what he was getting before, and of course his profit on each house doubled on top of that. Within two weeks he had doubled his income, just by paying better attention to those customers who considered his work the most valuable.

What Are You Really Selling?

Ever had someone ask you “What does your organization do”? How did you answer them? Chances are you told them what services you provided, what products you sold, or what degrees your university awarded you. A business coach friend of mine in Kansas City was attending a business networking group as a new member, and was given, along with five others, 10 seconds to introduce himself and to tell about his business. Imagine his (unpleasant!) surprise when three of the four also proved to be business coaches, and all spoke before he did! He listened quietly: every one of those coaches stood up, gave name and credentials, and said “I’m a business coach”. As each spoke he realized that to connect with the dozens of business owners and executives in the audience, he was going to have to appeal to something very different from that which the crowd were already associating with these three men. His turn came, he stood up, and giving his name and business name he ended with “I help people double or triple their business within six weeks. If you’d like to talk to me about that please meet me by the side door after the meeting”. When the meeting ended ten minutes later he had a line ten people long waiting to speak with him.

What was different about what he said, how did he connect when those other coaches didn’t? He addressed the pain! While the others were giving a list of their “stuff”, he was talking about the results he’d gotten. Those weren’t empty words, by the way. His approach had actually doubled revenues for organizations in as briefly as a week.

So, number one, what do you do that meets the “pain” people are struggling with? What does your organization provide that people are interested – or even anxious – to get hold of? You should know what that is, and you should practice being able to express it clearly in a very short space of time. For example:

“I help people double or triple their business in 4-6 weeks” (a business coach)

“We give students the key to working for the best companies in the land” (a university)

“Our company gives businesses the tools to cut their turnover by 75% while meeting their revenue goals” (a trophy and awards company who added incentive programs to their “mix”)

Show Your Results

You might have noticed that two of the three statements were very specific in the results they presented. One was a little less specific (“…the best companies in the land”) but still caught interest in an area that mattered to their customers .

But even when you’ve managed to put your finger on the pain people are feeling, you have to be able to show that you’ve achieved results. Those should be specific and of course, they’d better be true!

Consider that for a minute. What results can you show those people who are looking for the relief that you can provide? You’re still in business, so you must have successes. Taking the time to gather those together for placing in front of prospects is important. It demonstrates that your service or product is the one they should be thinking about.

To Wrap It All Together

So there are three activities to do if you’d like to supercharge your marketing efforts:

1) find the right prospects,
2) identify and show how your product addresses their pain, and
3) give them real results to bear these things out.

Take an hour, right now, to sit down and do these three activities – you can spare that, can’t you? Change your marketing approach to address your new, clearer ideas, and then see what happens to the number of people “walking in your door”.

NOW you’re really marketing!

Do Small Companies Need Formal Direction?

Strategic Planning

By Tim Connor, Rodeo! Performance Group, Inc.

Many small business owners think that a formal strategy planning process is unnecessary and a waste of time. After all, I’m the owner, and I’m here aren’t I? I talk to the people every day, don’t I? I tell people what needs to be done, don’t I? So what’s the problem – everyone knows where we’re going! But do they?

Let’s crank it a little tighter – do YOU? The human mind is a marvelous thing. You think about your business, you dream about where you’d like to take it. You daily grapple with problems and improvements in your own mind. You’ve taken a lot of time to consider these issues, probably both at work and later at home. But is thinking about it enough? Many business owners are convinced they can achieve “freesults” – good results just by thinking about it. It doesn’t work that way.

Having considered it in your mind doesn’t guarantee:

• That you’ve actually re-aimed the business
• That you’ve implemented the change that addresses a challenge
• That you’ve actually dealt with an employee problem
• That you’ve brought about that change in managing your own life

OR

• That your employees know anything about what you’ve been considering!

There are four ways to tell if this is happening in your business.

1. Have you ever asked an employee why something wasn’t done, and gotten a blank look in return? Have you followed that by pointing out that they should KNOW it needs to be done, only to get another ‘deer in the headlights’ look?

2. Do your employees frequently seem frustrated with their jobs?

3. Have your profits flattened out?

4. Have you noticed competitors picking up opportunities that you’ve somehow missed?

If you’ve answered “Yes” to two or more of these questions, chances are your business is suffering from unclear direction. That can include one or both of the following. First, you may have NO direction, or patchy direction. What does that mean? It means you haven’t systematically thought through the important aspects of the direction your business requires. Deciding on a direction means taking time to consider what is facing your business, and what COULD face it over the next year or two. It means planning for those possibilities. It means understanding your own staffs’ values, capabilities, and motivators. It means putting these together into a plan and writing them down. Why write the plan out? Isn’t it worthwhile, once you’ve taken the time to really wade through these issues, to remember what you came up with? Writing it down guarantees you will do that.

Second, unclear direction can come from not COMMUNICATING your plan to staff. This is where most business owners fail. They may have the plan, they may even have a good plan; but they don’t communicate it to staff, get feedback on it, and then spell out who will do what. Neither do they regularly report progress to the staff on the unfolding of the plan, or of difficulties that are cropping up. So staff don’t know what how its going or what they can specifically do to help.

It’s not so hard to do, and it’s very much worth the time. You’ll feel better about where you’re going. Your employees will understand company direction and their part in it. And your competition will find your company setting the pace and causing headaches for them!

Yes, You CAN Compete With Offshore: Part 2

Strategic Planning

By Tim Connor, Rodeo! Performance Group, Inc.

Concerned, nervous, panicky, discouraged; any of these terms could be used to describe the feelings of American manufacturing companies when considering their offshore competition. But being competitive involves a LOT more than just cutting prices, and there are actually several areas where U.S. companies can look to compete. This is the second and final article to examine these areas.

IN PART 1 of this two part article, we looked at Quality of the Product and Friendliness of the Service. In Part 2 we will consider alignment to particular requirements, responsiveness to needs, ability to deliver to schedule, and cost to the purchaser. Let’s get started.

Alignment to Requirements

Abig part of competitiveness is found in the alignment of the product to the customer’s requirements – if it does what it’s supposed to do, customers will consider buying it. This was discussed back in Quality of the Product, but it also means that you, as the producer, have to consider needs that the customer has in keeping his/her own costs down. You did that, of course, when you set up initial sales with the client, but it should be done on an ongoing basis, too.

Responsiveness to Needs

Do you know what your customer is dealing with, and what new challenges are being faced by that company? Worthington Steel, based out of Columbus, Ohio actually makes it a point to send front line staff out periodically to client facilities to see how the product is being used. What good is that? It allows Worthington to make small changes in either construction or delivery that mean a big difference to the client. And often it’s ONLY the front line staff who can identify these types of requirements – sometimes the client doesn’t even know the opportunity is there. Staff can recognize this, and bring the ideas back to your plant where changes can make your product even more valuable to the client. What’s the outcome? Let’s look: Worthington is a leading diversified metal processing company with $3 billion in sales, and 8,000 employees in 63 facilities. You can review their results at www.worthingtonindustries.com.

Ask yourself: “What can I do to get my staff involved in improving our responsiveness to customer needs?

Ability to Deliver to Schedule

Believe it or not, this is the area where an American company has the best opportunity to compete with offshore. Here’s why. When production is moved to another country, the lead time on getting that product back here to the U.S. moves to an average of 8 to 10 weeks. That’s 2 ½ months, most of which is transportation and loading time. And here’s the kicker – all of that new product has to be inspected. Now that may not sound like a big deal, but if your client is bringing a shipload of new product in (which is often necessary to keep transportation costs manageable), the inspection time alone is a very significant investment in time and manpower. And what happens if something is wrong? THEN there have to be plans and facilities in place for either shipping it back OR for fixing the problem back to spec. Can you honestly say there isn’t opportunity here for you to provide a much more competitive product? American companies should be able to very significantly reduce lead times; and errors in manufacturing can be much more quickly rectified when they do occur.

Cost to the Purchaser

This is the second area of great opportunity for you, the producer, because it has to do with your cost of production – something that is mostly within your control. Now you will holler that you can’t control the cost of supplies and labor. But the fact is that you CAN control the cost of production, and there is very often ample opportunity for improvement here. Have you used the four process mapping approaches? Do you know where in your line the value and non-value steps are? Have you applied the Lean principles relative to the Five Ss, Preventative Maintenance, and Predictive Maintenance. Most business owners have at least put these last three in place, but often a systematic review of processes has not been done – and there is a lot of opportunity in process mapping! Edwards Deming felt that as many as 70% of process steps are waste steps, and identifying and eliminating them can drastically reduce your cost of producing a product. This is a prime area for investment in outside help, because the return on investment potential is so high. Look into it, you will not be sorry.

In Summary…

There are six areas where a domestic company can improve its competitiveness with offshore. They are:

1. Improving the quality of the product
2. Improving the friendliness of the service
3. Securing better alignment to customer requirements
4. Enhancing responsiveness to customer needs
5. Providing better delivery to schedule
6. And reducing cost to the purchaser through six-sigma type applications.

Yes, You CAN Compete With Offshore: Part 1

Strategic Planning

By Tim Connor, Rodeo! Performance Group, Inc.

Concerned, nervous, panicky, discouraged; any of these terms could describe the feelings of American manufacturing companies when considering their offshore competition. But being competitive involves a LOT more than just cutting prices, and there are actually several areas where U.S. companies can look to compete. Let’s see what those are.

American companies historically are driven to look at the bottom line. This is in contrast to German companies, which tend to focus on technology, or Japanese companies, which tend to focus on geography. While the bottom line focus does show a snapshot of company performance, it reveals nothing of what generated that final number OR what can be done to improve it. BUT we use it anyway to make many decisions, and we can be fooled by what it seems to be telling us.

More than the Bottom Line

How’s that…you ask? Well, let’s get really simple. Why do people buy from us in the first place? It can be for a number of reasons, among them quality of the product, friendliness of the service, alignment to particular requirements, responsiveness to needs, ability to deliver to a schedule, and…oh yes! Cost of the product! Now our purpose here is to find ways to be more competitive, so let’s break that list down and look at it systematically.

Quality of the Product

Coming right down to it, what IS quality? It could mean that the product will last a long time. It could be that it is particularly suited to the job it’s supposed to do. It could mean that it really looks good and is pleasing to handle. Putting all of these in a nutshell: quality means the product is well made. The customer buying your product is really the one who makes the final judgment on the quality of your product, even though he may have initially heard about it from someone else. That judgment takes time to develop, but once it’s given, it becomes part of the reputation of the company producing it. So look first at the quality of your product – how does it measure up?

Measure up, there’s a good phrase. If you want to really measure the quality of your product you have to know how the customer defines it. While quality is produced by the manufacturer, it is defined by the customer. So right off, you have to know what they want. How are you going about doing that? The first step in improving your competitiveness involves re-evaluating customer requirements for quality, and then seeing how you’re doing against those.

Friendliness of the Service

One of the really interesting statistics floating around out there is that only 15% of manufacturing is actually related to the manufacturing line – the rest is service. Think about it. Evaluating customer needs, dealing with customers before the sale, making the sale, delivering the product, following up with the customer, answering questions or training, servicing the product…what are all of these? Right! They are services. How competitive are you in each of these areas? Have you ever systematically evaluated how you are doing?

In service, especially immediately before the sale and in customer follow up, American companies have a real opportunity to be much more competitive than those who have outsourced these functions. Why is that? The answer lies with idiomatic English. It is one thing to learn English in a university and speak it well, it is wholly another thing to know the idioms that accompany American speech. Think about it. Have you ever been on the phone with a foreign customer service rep with a question, and gotten the phone equivalent of the “deer in the headlights” look? There is almost nothing in existence that is better guaranteed to raise your blood pressure a couple of dozen points!

Welcome to My Nightmare!

A recent experience by one consumer seeking to buy new cell phones and service for his business comes to mind. The guy had found a great deal, and put the order in for the phones and service online; so far, so good. But then an email came telling him there was a glitch, and he needed to call this 800 number to get it straightened out. The number put him in touch with an American company’s phone center somewhere in India (they were cutting costs by moving it offshore) and the resulting experience finally caused him to cancel two different purchases that involved four cell phones and several long term contracts. Now, what was the actual bottom line savings to that cell phone company? The loss of that sale probably amounted to about $2,000 a year – but how often did this happen in the course of that month – or that year? What was the overall loss? Interesting to consider, huh? And what about the reputation of the company? Do you think that businessman will be likely to purchase from them in the future?

Summary

So there is a very real opportunity to increase both your sales and your competitiveness by having service people who are well trained in customer service, who know your proucts, AND who are able to communicate easily and quickly with your customers. You are saving them time and money, and they are much more likely to continue with you in future business.

Part 2 to follow!

The Business External Assessment: What’s Out There?

Strategic Planning

By Tim Connor, Rodeo! Performance Group, Inc.

When you develop a Business Strategy or Business Plan, one of the first activities you should carry out is an assessment of what’s going on outside your business. If you do it right, it will make the internal planning for your business much easier and immensely more effective.

When my two oldest boys were small, one of their favorite games was What’s Down There? One of them would crawl into my bed first thing in the morning, and ask: “Dad, what’s down there?”. I would look at the floor over the edge of the bed and nonchalantly say something like “Oh nothing, except for the hundreds of black widow spiders (or alligators, or writhing snakes…), then I would slowly push the kid toward the edge of the bed. I could always gauge the enthusiasm of his response by the gruesomeness of the particular horror dwelling on the floor. My younger son (who still has a vivid imagination) would fight with considerable vigor, often producing uproarious laughter from the other family members who happened to be watching. His response was directly related to his knowledge of what was down there.

The same principle holds true for business. If you want your business plans to be effective, you have to start with good knowledge of “what’s out there”. That means taking the time to evaluate important external factors, things like current economic climate, the global competition, other local competitors, and what customers are buying. Doing a good job at this assessment will produce con-side ably more precision in the goals for your own business. Indeed, good investigation will frequently add the quality of speed to your goals – knowing which things should be accomplished now and which can wait until later in the year.

To move into world class using your external analysis, however, you have to communicate the importance of those externally focused goals. When your staff know which goals are really significant, and see regular reports on progress toward those significant goals, a sense of vibrancy will arise in your business, and you will see all sorts of good activity that was never there before. It’s worth the effort – give it a try!