Posted by jpayne on May 10, 2009 under Business - In The Press, Business Growth | 
Julia Payne In The Press
Ambition Magazine May/June 2009
A recession provides five key growth opportunities that clear-thinking firms should look to exploit. By Julia Payne of Julia Payne Associates
Recessionary times normally ’surprise’ most business people; it’s like the bad times have crept up on them without warning. Very few find themselves financially and strategically set for a recesiion before it arrives. Fear dominates. Everyone hangs onto everything they have for fear of there not being enough to go around. Scarcity kicks in and with no money moving around the system, things start to grind to a halt.
It’s important to remember that these business cycles have been repeated several times in the past decades. If this one follows suit, markets will recover and grow. While it goes without saying that the immediate concern is survival, you also need to ensure that you plan for future recovery and your future growth.
It stands to reason therefore, that these times present huge opportunities for business to fill the gaps that their competitors are not taking advantage of. Perhaps as a business you don’t have much, if any, cash to invest, but thinking strategically costs nothing. It can have both immediate and long-term benefits, allowing you to look at different ways of doing things and placing you ahead of the competition when the upturn arrives.
if you try thinking, ‘what are the opportunities’, rather than ‘how can I survive’, you can engender a new and positive mindset not only for your business, but also for yourself, allowing you to open your eyes to the opportunities available.
So what are the five key growth opportunities in a recession?
1. Product Innovation
Are you still selling the same product in the same way and with the same pricing structure as you were one or two years ago? If so, you could be selling what was a boom product in a recessionary market. It’s just not going to fly.
The key to this strategy is to know how to innovate your product, when to introduce your ‘recessionary products’ and when to ditch them in favour of your innovated growth product.
Are there underperforming products you can drop? Can you add features that will increase the value of your product? Can you repackage your existing technology or product to suit a new business need? Can you make a small incremental change to an existing product to give you a new one? Focus on ‘need’ products, rather than ‘want’ products.
In addition, the downturn could be the best period to reposition your business. It is far harder to do this at the height of the market when your focus is elsewhere. Make sure your marketing matches oth your products and your positioning and look at different media to promote your business. For example, with the rise of social networking, consider how you can build new communities, and with them, relationships.
Research has shown that businesses that innovate their product during a downturn always do well during the next boom.
2. Channels to Market
If a business does not have enough revenue coming through during a recession then it is probable that whatever channels to market the business was using pre-recession, were either not sufficiently established or not the correct ones to see them through all parts of a business cycle.
Now is the time to look at other ways to take your existing or newly innovated products to market. You may be able to increase your sales and market share significantly by using different ot additional routes. Have you considered piggy-backing other businesses’ customer bases, joint ventures, agents or partnerships? To know how best to get to market, it is essential that you know your customer base and their buying methods. If you haven’t invested in this to date, then now is the time. Customers don’t stop buying during a recession - they just buy more cleverly. Not only will developing deeper customer relationships provide you with ideas for new products and how to package them, it will bring you closer to your customer base - essential for both short and long-term growth.
If it takes a business too long to establish new channels to market, then it can miss a large chunk of uplift readily available in the next growth cycle.
3. Functional Structure
Question: What is one of the key things that can stop a business owner or manager from finding the time to develop their product and explore different channels to market? Answer: being dragged into the daliy management of the business.
During a downturn, management tend to get dragged back into the everyday detail of the business. This means that there is a misalignment of the micro strategies needed to run a business and the macro strategies, such as mergers, acquisitions and new markets which will allow you to grow. If you have been drafted back in to run the day to day operations, how are you going to find the time to discover or undertake growth initiatives/ You need to do both. Otherwise you may come out of the recession in one piece but not aligned with your growth strategies. If this is the case, then in reality you may miss the boat, as you struggle to play catch-up and align the business for growth, while the market is already surging ahead - taking your competitors with it.
4. Skills.
During times of economic uncertainty, it is unsurprising that companies focus on the short term, but it also means that it is easy to ignore the development of skills that are critical to the day to day delivery of the business.
Now is the time to be developing the skillset of your employees and to be looking around for new talent. Can you tell who is rising to the challenge and who is burying their head in the sand? Are you employing people who do not really add anything and in truth, haven’t for years? Are you as the leader, having to bear all the responsibility, or is your team playing an active part?
There is widespread consensus that investing in both your skills and those of your team can play a major part in surviving the recession and building a greater skills set post recession. Fully understand the competencies that the business needs to deliver its strategy now and in the future, and then undertake an audit of skills within the business to ensure you have the necessary skill sets.
The same can be said of your infrastructure. Make sure it matches but does not exceed your current needs and ensure it is also the bedrock for future growth. A fast-moving business coming out of a recession builds its capability to match the speed of the market and not trail behind it.
5. Succession Planning
Many businesses forget staffing succession during downturns. They rely on people staying out of fear that they will not get another job. However, post recession, if cultural difficulties have not been addressed, staff will leave. This creates a recruitment problem for businesses at what could be a crucial time. While other businesses are starting to grow during the upturn, many businesses will spend their time re-staffing and outlaying valuable investment monies on recruitment costs.
As well as building skill sets, start to consider who internally could ascend to key positions within your business. Begin the process of gaining senior management support, standardise employee evaluations, target key positions for succession and define attributes and behaviours. Encourage and communicate with your high-potential staff to ensure that they are truly committed to your business. Show them the opportunities available for career advancement. This in turn will breed confidence and encourage them to see their long term future with your company. you don’t have to succumb to the doom and gloom.
Be aware of the opportunities and seize them.
Posted by jpayne on under Business - In The Press, Business Growth |
Julia Payne In The Press
Ambition Magazine March/April 2009
Could your lack of a structured business growth strategy be costing you a fortune? By Julia Payne of Julia Payne Associates
Businesses today operate in very competitive environments and being able to respond to market changes is vital in achieving profitable growth or even survival throughout 2009. However, how often do you find yourself fire-fighting? How often do you find yourself handling day to day tasks that should be handled by someone other than you? If your business’ growth strategy is something that is fitted in on a weekend around family commitments, what chance do you think you are giving you or your business of success and more importantly, what can you do about it?
Take a moment and think how your business has grown. Have you been able to structure it as you wish in a manner that’s best for business growth, or have you simply reacted and hired staff to cope with your expansion? If it’s the latter, you could have a structure that resembles spaghetti , with those departments that shouted the loudest having the most staff, perhaps even being over-resourced, leaving others feeling there’s not enough time in the day . This type of structure normally results in duplication of effort, excessive management time being taken to make decisions, staff frustration about not being able to work efficiently, management selected for tasks which do not match their skills and no clearly defined lines of communication.
Businesses do not grow uniformly, but in chunks and the key to your success is how you manage those chunks. Resourcing a business should be a strategic function, not one that is dictated from the bottom up.
Your starting point is to identify the best functional structure for your business.
A functional structure is a means of strategically managing resources or activities within a business. All activities within an organisation fall into one of three groups, Infrastructure, Revenue (Sales) and Strategy. These can then be colour coded by red, blue or black - extremely simple but highly effective.
Red activities support the infrastructure and are non- revenue generating, for example, HR, IT, Legal, Accounting and Administration
Blue activities include all revenue generating functions and are client related, marketing, advertising, and relationship management are good examples
Black activities are the strategic functions related to business growth such as positioning, new product development strategies, joint ventures, or merger activities
Red and blue activities create growth in revenue, whilst black creates growth in capacity which in turn delivers business growth. When capacity growth comes into play, companies see a longer-term increase in margins which lifts profit and in turn, increases the valuation of the business. All too often though management will say, ‘we’re not getting enough growth’, or ‘our profit isn’t high enough’. The answer translates as too little resources employed in the strategic or black areas of their business. Similarly, an MD who says, ‘there’s not enough time in the day’, is probably doing too many red activities.
Too often companies are busy handling red and blue activities to the detriment of black. Think how many times during the course of the day you have to deal with matters such as sorting out IT, handling a stock problem or a client issue. Are these adding to the growth of the company or are you shouldering the responsibility which should lie elsewhere? If you’re not sure, then try this very simple exercise. Have a look at your diary and highlight each meeting or activity over the course of a week in red, blue or black. Does that tell you what you need to know? Alternatively, keep a kind of ‘diet diary’ and write down everything you do during the course of a week. A picture will very quickly emerge as to where you spend your time. Try the exercise across your entire management team or your sales team. Are they focusing on pure sales related activities or are they spending a high proportion of their time on administrative tasks to support the sales process? Is this the best use of their time?
In determining the functional structure, it is important to consider two further key areas:
1. The percentage split across red, blue and black for the entire business. Theoretically, each hour of each day for every staff member could be colour coded. Whilst initially it will not be necessary to delve into such detail, it is essential to understand the percentage split necessary for the effective and efficient running and growth of the business. Over resourced in red will increase costs which hits both the P & L and profit, whilst under resourcing will not provide a strong enough infrastructure to service the business and its clients. Too much blue will provide much needed work, but does the business have the infrastructure to support it? Too little and cash flow will be poor. Following this to its conclusion, over resourcing in black will mean future growth but no cash flow this year, whilst under resourcing could mean no growth in future years.
It is important for a business to know and discuss the business variables that affect these percentages. These could include: business size, structure and plan, exit strategy, funding, capability and economy etc. However once agreed upon, it is management critical to know these percentages in order to maximise business benefit. A business needs a working system that will provide them with the management information on these percentages every month.
2. The fears of implementing a functional structure. Functionality is a discipline and a structure. It is not ego-based, meaning no roles are more important than others. It is a tool to create clarity. It is therefore important to put aside the fear of having not having got the balance right in the past and the fear of not wanting others to find this out. It really is not important. What is important is to place the business on a sound footing for future growth. Similarly there may be fears around creating additional work in training and education. However, fear encourages prevarication and this will do nothing but stunt what may prove to the key to your future success.
Now picture your future success.
Picture your company having clear priorities, the right people in the right roles, an external focus and your senior management focusing on strategic activity to drive both profit and build equity. Add to this picture another, where your staff are taking personal responsibility for their actions, have improved communication, improved job satisfaction and an increased connection to your company and your clients.
This does not just have to be a picture, it can become a reality. Your reality.
In these straightened times, putting the correct functional structure in place can yield major business benefits, not only in commercial terms with a honed, efficient and effective organisation increasing profits and building equity, but also in developing a culture where employees feel valued and fulfilled.
Remember, it’s your reality, why risk making it your competitors’?
Posted by jpayne on February 3, 2009 under Business Growth |
What Big Businesses Can Do Differently
10 Strategies for Business Growth
Strategy 3:
Short Sightedness
Let’s understand some basics about human nature in corporate culture.
By their very nature, short-sighted people are unable to see into the future and therefore must practice caution. Their lack of long-term thinking means they have more time to focus on immediate profits.
Short-term thinking about immediate profits is dangerous because it causes people to place less emphasis on the importance of customers and ignore the bigger picture of corporate longevity.
We all have ‘negative experience’ stories about wanting to return a product to a store only to get caught up in a battle of principles. Every shop has at one time or another lost future revenue due to their insistence of hanging onto a few present-day pennies.
This lack of long-term, big picture thinking is utter commercial suicide and it frequently spills over into other areas of business. Short-sightedness with regard to forming strategy, developing high performers, listening to differing opinions and opening channels to market are just a selection of what, I am sure, we have all experienced at some point in our career.
It’s important to remember that not everyone is good at seeing the bigger picture. If you can, start to try and encourage others to. It may be with small steps within your own department or function. When people see change occurring at grass roots level, it can quickly have an effect and open new avenues of thinking and ultimately, action.
Action:
Focus on long-term thinking. Eliminate short-sightedness. Remember the importance of the customer. Encourage others to see the bigger picture.
Julia Payne Associates provides consultancy and coaching to SME’s and FTSE 500 companies. Contact us to discuss solutions that make a clear difference.
Posted by jpayne on January 28, 2009 under Business Growth |
What Businesses Can Do Differently
Strategies for Business Growth
Strategy 2:
Build Strong Client Relationships
It has always been essential to develop strong client relationships, but in today’s economic climate it is vital and could prove to be the difference to survival.
What can you do to build relationships?
1. Understand your client’s perspective.
In order to do this successfully, you need to listen to your clients. That means listening and not hearing what you want to hear or even worse, putting spin on their words to fit your own needs. Work to their agenda and ask questions that are going to forward your client’s position and not your own.
2. Speak your client’s language.
It is a myth that clients want to be wowed by your corporate language. To be honest, they’re just not interested. Their bottom line is that they want to understand what’s in it for them and how you are going to help them, in simple plain English. The best sales people will know that instinctively and will present in a language that is familiar and comfortable to their client.
This may be far removed from the way their organisation talks about the same subject, but what is more important - the sale, or corporate-speak? Which one pays the bills?
3. Go that extra mile.
How often have you done something for your client just because? Everyone will bend over backwards to help a client if a sale is imminent, but what about building the relationship? Do you as an organisation know what your standard service is and do you know what your ‘extras’ are or should be? Do you know when you should be employing those extras?
Not knowing may allow your competitors an entry point. It is the responsibility of everyone within your organisation to be providing A1 client service. However, it is the responsibility of the management team to ensure that client service is part of the culture and not something that is wheeled out when a sale is on the horizon.
The words ‘corporate humility’ are becoming more familiar to organisations nowadays, especially larger organisations. We are all reliant on our clients, but it is time to start treating them as one of our most valuable resources.
Action:
Listen. Speak your client’s language. Go that extra mile. Value your clients
Julia Payne Associates provides consultancy and coaching to SME’s and FTSE 500 companies. Contact us to discuss solutions that make a clear difference.
Posted by jpayne on January 26, 2009 under Business Growth |
What Businesses Can Do Differently
Strategies for Business Growth
Strategy 1:
Build a Complimentary Team and Organisation
Look around your organisation. How many people are there from the same university, the same MBA class and at a senior executive level, the same club? Does this approach truly benefit your company or is it limiting the scope of growth and progression?
Adopting this more traditional approach is what I call the ‘chummy mentality’. Recruiting people in your own image, who evidence a similar educational background, hold a similar viewpoint and come from a similar background.
Whilst this approach may provide continuity and a pleasant working environment, is it really benefitting today’s leading companies?
Recent events would seem to suggest that a like-mindedness is not what is required. Consider the integrity of some of our largest corporations. Highly intelligent people at the helm, but also at the centre of every controversy. We must ask ourselves were those voicing a differing opinion listened to? Where was the challenge? Where was the compromise?
Fresh ideas and values, people not afraid to express their views and a new way of doing things are essential and to be encouraged if the creativity and objectivity of an organisation are not to be diluted. Diversity is to be celebrated not sidelined.
The prized ceos will surround themselves with people who compliment their skill set, not those who match it. They will seek to be challenged. There is a line of thinking which says that the ceo should be the stupidest person in the room. Whilst this may sound bizarre, in essence it is sound common sense. No one person can have all the ideas or be abreast of the latest thinking . A smart executive will recognise this and build a team that has an individual yet complimentary skill set.
Action:
Build a complimentary team. Look for different skill sets and fresh ideas. Embrace challenge.
Julia Payne Associates provides consultancy and coaching to SME’s and FTSE 500 companies. Contact us to discuss solutions that make a clear difference.