The need to know profile January 29, 2008Posted by rickbron in Management Principle, Need to know.
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Getting poor results from employees because you did not tell them what they need to know? The big Dogz know how to overcome this problem by using the “Need to Know” principle of management. Here it is:
For each employee customize your communications based upon their need to know profile.
Just how do you get a need to know profile? The Big Dogz use the following process. Whenever you give someone some information about a task or situation, provide the information you think they need to know. When you are finished providing information and verifying they understood you, ask them one final question.
“Is there anything else you need to know? “
If they respond no, you are finished and have done an excellent job of customizing this communication. You can expect them to absorb the information or to successfully complete the task you have given them.
If they ask you a question, answer it and remember the question. Ask them again if there is anything else they need to know. Repeat this process until they say no.
Go back to your office and take out their file. In this file write the topics they asked questions about. These are the topics that are important to them. In future communications with them make sure you include information related to these topics.
Like the Big Dogz, you will see more motivated employees, more effective communication and most importantly more effective results. Start today and create a need to know profile for each or your employees.
Generate creativity in your employees January 23, 2008Posted by rickbron in Creativity, Management Principle, Uncategorized.
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Deliver problems down, solutions up.
What typically happens is that the leader defines a problem to the employees, and then suggests a solution. It goes like this “Here is a problem we need to solve; here is what I think we should do about it.” Usually this is followed by “What do you think we should do?” Of course the result is that everyone agrees with the solution proposed by the leader. Why not agree?
It is obvious this is the solution preferred by the leader and if we do what the leader says we have no accountability. If this solution fails — well, it was the leader’s idea to begin with; don’t blame us. If this solution works — well, we worked hard to make it happen; give us the credit. This situation is a no risk proposition for your employees. And besides, their enthusiasm for the idea is low because it is not theirs.
What the Big Dogz do is present the problem to the employees without a solution. They ask “How do you think we can solve this problem?” The Big Dogz will do this even when they know the optimum solution. The Big Dogz know that when the employees come up with a solution, they own it!
Their personal commitment will be high and if they have an ineffective solution, they will quickly modify it to be effective. People do this correction because they want to successful. It is no longer your problem, but their problem.
Effective leaders monitor the solutions to problems. They warn employees when they are making dangerous moves. They encourage creativity and risk taking by supporting employee solutions. Sometimes you as the leader do not get a choice of solutions.
You are given a problem and a solution. When this happens, present the problem, and then let your people know you have been given a solution. Then ask “What can we do to make sure this solution will work?”
The Big Dogz know that by always giving their people a voice in the solution, the people will be engaged and committed to the solution. Try applying this principle over the next thirty days to see if you can be one of the Big Dogz.
How to Beat A Recession-1 January 22, 2008Posted by David Dirks in Recession: How to Beat It!, Solving Business Problems.
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The talk of the town is that dreaded ‘R’ word. I’ve been enjoying the economic and finance pundits who have plagued every talk show they can find. One pundit says that we are clearly not headed for recession. The other says we are already in one. Our federal government is poised to give all of us taxpayers about $100 billion dollars of money they don’t have. Just in the nick of time to keep us spending and thereby saving the day before and during the upcoming election.
So, whether we are already in one or headed for one, the question is, what should you do about it? What can you do to deal with it in your business? In order to even begin answering that, let’s start with the typical knee-jerk reactions to the “R” word. I came up with 11 of them but surely there are more out there.
• Knee-Jerk #1: “Cut expenses and fast.” Sure, batten down the hatches. Cut people we don’t really need. Chop advertising or marketing expenses. Cut the employee that makes the most money on the payroll and replace them with someone far less salary or don’t replace them at all. After all, this is war. Cut, Cut, Cut!!
• Knee-Jerk #2: “Cut back on customer services or conveniences.” Why not? They’re just “nice to haves” that are not necessary to insure survival your survival, right?
• Knee-Jerk #3: “We’ve got to raise prices!” Sales might go down so naturally you might consider raising your prices enough to make up the difference during the recession.
• Knee-Jerk #4: “We’ve got to cut prices!” Surely the logic of cutting prices so that you’re customers will keep buying even after they’ve lost their jobs or foreclosed on their home makes sense, right?
• Knee-Jerk #5: “Stretch out the accounts payables!” Not long ago I received a short, impersonal note from one of my customers who informed me that they were now taking the liberty of paying my invoices at 120 days from invoicing or tough nuts to me.
• Knee-Jerk #6: “No more investing in the business for now”. Forget that equipment that will help you improve your efficiency and productivity by a large margin over where you are today. Why take the chance if you don’t have to?
• Knee-Jerk #7: “I’ll just do more work myself”. Goes with #1 before and after the heads start to roll out your door. Sure, you’ll just pick up the slack just like that.
• Knee-Jerk #8: “I see nothing, hear nothing, and will do nothing”. Acting as if nothing is changing or will change is a strategy of sorts. Sometimes the “R” word is sets off such negative feelings that we might be forced to ignore it. Full steam ahead!
• Knee-Jerk #9: “Sell the business and fast!” If you have a marginal business to begin with, you might be thinking that a recession might just be the torpedo that sinks it. Sell it to someone who has “the dream” before you start taking on water.
• Knee-Jerk #10: “Diversify into another business or product line”. Your business is flat but you’ve heard all about this new hot product or service that generates instant cash flow. Not even remotely related to your business? Who cares? It’s related because it’s a ‘business’, right?
• Knee-Jerk #11: “Hold the line on new products or services”. You can’t afford to take the chance that the new products or services that are in your pipeline might flop, right?
It’s nice to have options when the “R” word looms nearby. Which ones have you been thinking about? Did I miss one? Email me at email@example.com and let me know.
Principle of Duality January 14, 2008Posted by rickbron in Management Principle.
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Duality? How can a manager demonstrate duality? The Big Dogz know that in order to get the most from your people, you must demonstrate duality. The Big Dogz are both flexible and fixed at the same time. Here is the Principle of Duality:
Be flexible in process and fixed in end result.
By flexible in process, I mean let them do it their way, on their time and at the place of their choosing. If they feel comfortable doing what you ask at home after dinner, then let them. Be as flexible as you can be within the constraints of your policies or compliance issues. One of the most de-motivating things you can do to an employee is to dictate how, where and when something should be done.
Being fixed in end result means clearly defining the task for the employee. There are two major components of a task that the Big Dogz make a focus. These components are the form and the success factors.
The form tells the employee what it is that you want — it could be a presentation, a list of clients or whatever you are asking. Whatever it is, make sure you specifically call it out.
The success factors relate to the level of “goodness” desired by you. It includes some quality metric as well as a delivery time. By defining the success factors, you are insuring that the employee will deliver exactly what you want. In the absence of success factors, the employee will establish them.
Many times the employee will significantly exceed your expectations and will spend much more time on the task than you really intended. They do this to impress you and they want to make you happy. Think about the many times your people have delivered a book when all you wanted was a chapter; or the times that you wanted a book and they delivered a chapter.
The Big Dogz consistently apply the principle of duality when asking people to do things. It works for them and it can work for you. Here is an example of applying the principle of duality:
Jill, I need you to create a list of all customers who purchased any deluxe widgets from us in the last six months. Please sort the list by number of widgets purchased, high to low, print it and deliver it to me by noon tomorrow.
Over the next week, keep track of how many times you apply the principle of duality and how effective your results are. If you are getting effective results, add this valuable principle to your tool kit.
Sales metrics that Work -3 January 7, 2008Posted by David Dirks in Increasing Your Profitability, Sales Metrics, Solving Business Problems.
Tags: business metrics, customer sales, profitability, Sales Metrics
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Business metrics are designed to do two things: to help you ask questions and then point you in the direction for the answers. By themselves, business metrics do nothing more than monitor your business performance in a specific area of your business. Like the computerized dashboards found in most cars today, your business metrics can help you to identify both strengths and weaknesses in your business. When your oil indicator light comes on, it just points to a potential problem; it doesn’t do anything to fix the problem.
Whether you have a retail, B2B, or service-based business of any size, business metrics are your friend.
In previous blog posts, (see under “Sales Metrics), we discussed sales metrics related to your square-footage and your employees. Now let’s look at your customer.
What is your average sale per customer? This is a basic sales metric that can tell quite a story if you keep track of it over time. Seasonal fluctuations are easy to pick out when you look at this sales metric on a monthly basis. Over time, average sales per customer can help you determine:
-Is my share of their wallet getting larger or smaller? If your average sale per customer year-over-year goes from $550 to $375, you’re already in deep. Why is your average sale per customer on a slide? What can you do to reverse the trend? If your average sale per customer is going up, then you need to understand exactly why it’s going up. Is it because of specific sales or marketing activities you are undertaking?
You’d be surprised at the number of businesses that have a few successful years and then plummet out of business. Chief reason: they were too lazy to really understand the dynamics of their own success. When those dynamics no longer had any positive affect, they had no clue what to do to stem the losses. They were ‘too busy’ to spend time looking at business metrics.
-What can I do to reduce seasonal fluctuations in average sales per customer? Years ago, one local ski shop in the Hudson Valley decided that the seasonal fluctuation in their ski business could be offset by expanding their business to sell patio furniture in the off season. It turned out to be a great counterattack against their traditional business.
What is your net profit per customer? The best way I think you can look at this metric is on a customer-by-customer basis. If you have good financial controls, you should be able to determine how much profit each customer generates (monthly/quarterly/annually) based on the goods or services they have purchased from you. If you can’t, then you’d better find a good accounting firm before even considering this metric.
-Why are some customers more profitable than others? Is it because of the mix of goods or services they buy? Is your pricing varying from customer to customer? Are the repeat business discounts you’re providing too deep? Is your pricing built on solid financials or some educated guesses? What can you do to encourage customers to purchase better-margined goods or services?
Good business metrics can help you drive your business results by identifying areas of strength and weakness. The key is to understand the ‘who, what, when, where, and how’ of each metric so that you can work towards creating better performance in the areas that count, like overall profitability. The worst thing you can do is to ignore them.
Welcome Times Herald-Record Readers! January 4, 2008Posted by David Dirks in Uncategorized.
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Rick and I are very excited about our new weekly column, “The Big Dogz on Business”, which will appear in the Friday edition of the Times Herald-Record. We are very proud and honored with the opportunity to provide Hudson Valley businesses and beyond insights and best practices designed to help you growth your business profitably.
When you see the newly revamped business section, you’ll see that George Spohr and his team have really put some excitement back into business reporting and news!! For one thing, local coverage of business events and news has been expanded greatly. THR readers now have greater insight and information on the business issues of the day within the Hudson Valley, as well as national business/economic issues.
Secondly, they’ve added more business columnists, tapping into the rich intellectual capital that already exists within the Hudson Valley but hadn’t been harvested by any significant media until now.
How our new column will be received only time will tell. Rick and I seek your feedback as to how we can provide the best business insights for you. Contact us at firstname.lastname@example.org or email@example.com
Outside of our new column (don’t hold that against George), you can see for yourself the cutting edge business reporting we’ve been witness to in recent months.
Go George, Go!
Contacting Key Sales Accounts -4 January 1, 2008Posted by David Dirks in Keeping Your Customers, Managing Sales Accounts, Sales Metrics.
Tags: account management, sales contact, Sales Metrics
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“I haven’t seen or heard from my account executive in over a month”
“I’m not sure who handles my account there”
“The other company seems very interested in helping us”
And a few you never want to find yourself saying:
“I haven’t heard from them in a while”
“Oh, that account…it’s dead”
“When I have time, I’ll give them a call”
It never ceases to amaze (and disappoint) me how often businesses fail to maintain even an adequate level of contact with sales accounts vital to their business. Some wait until the phone rings. For others, it might only be an infrequent level of contact. Either way, it’s more hit or miss, than purposeful contact management.
The Big Dogz have made a science out of superior contact management. They don’t leave anything to chance and just wing it. The good news for you is that most businesses fall on their face when it comes to maintaining the right level of contact with a customer.
That should spell o-p-p-o-r-t-u-n-i-t-y to you.
How often should you follow up on any sales account you have? Many books have been written on this subject alone. In my opinion, there are two key considerations:
1. How frequently does the customer want to be contacted? Ask your customer directly. I’ve always made it a habit to ask that question and in almost all instances, the customer is very clear about how often they want me to contact them. If they want you to touch base with them once a month, then you’d better be sure and do it. Don’t ask this question if you don’t plan on following the answer.
2. What is the value of this account and how does it perform? If you’re a small business owner, you can’t be everywhere. You can’t visit all your customers with exactly the same frequency. So, you need to prioritize your customers in a way that allows you to maintain a level of contact that fits those customers needs.
There is no ‘formula’ for evaluating the performance of an account. But there are some things to think about.
First, you need to determine how you are going to measure ‘account performance’ in the first place. Account performance is defined as how a particular sales account provides inputs that meet your set business goals. Inputs are those things that contribute to the measurable success of your business. For example, some common inputs are sales volume, profitability, longevity, frequency of sales, and new business referrals. Let’s break these inputs down a little further.
Every customer that buys your products or services contributes to your sales goals. Some customers contribute more than others. What percentage of your business is from this sales account? How do they stack up against your other customers? However, sales volume alone is not a good way to prioritize customers. Which leads me to the next input.
Everybody loves large accounts. Big accounts naturally seem to demand more of your time. But are those large accounts profitable? It’s entirely possible (and often happens) that a large account provides great sales but contributes poorly to your profitability, or in the worse case, makes you lose money. I do NOT advocate dropping an account just because it’s marginally profitable. The right thing to do would be to figure out why it’s marginally profitable and fix it. I am saying that you need to understand what level of profitability (or loss) that account brings to the table.
Longevity is an interesting input. Are they a long time customer? What value do you place on a customer who stays with you rather than jump to the next competitor who offers to save them 5cents more? Or what about the new account that is buying a lot of product or services? You’re always going to have a range of customers with some new, some old. My point here is that longevity does count for something.
Frequency of sale is a measurement of how often they buy your goods or services. Once per year? Every other month? Every day? When you look at frequency of sale, you have to look at sales volume at the same time. Your customer may order only once per year but it might be the biggest order you get all year long. Keep frequency of sale in perspective with sales volume contribution.
New business referrals are another key metric. How many new customers have been referred directly from this customer? If you don’t expect your customers to refer new customers to you, you’d better think again. If your business is exceeding the expectations of your customers, you have every right to expect that they can and will help you find more customers. So, you might have a customer who doesn’t contribute as much to your sales volume but they refer a lot of business to you. They are worth their weight in gold. Even if they are unprofitable.
How much contact time should you spend on a customer? The answer is not easy as you can see. However, by asking the customer what frequency of contact they want and understanding their performance contribution to your business, you’ll be in a better position to prioritize them.
Increase your Success and Profits in 2008! January 1, 2008Posted by David Dirks in e-Small Business Resources, Solving Business Problems.
Tags: business answers, business challenges, marketing, organizational development, personal development, sales profitability
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As Rick and I wrap up our first year with this business blog, we want to thank all of you who have taken the time to visit our blog during 2007. We’ve had a lot of fun providing you with what we feel are some of the best practices and ideas that are designed to help you continue in your successful business endeavors. If you found the blogs we provided during this past year helpful to you, just wait until 2008!
During 2008, we want to provide even more blog information than we did in 2007. In order to make our blog better, we need your help. One of the intentions of this blog was to create a venue for business owners like yourself to get your organizational and/or marketing & promotional questions answered directly by us.
If you have a question or business challenge and would like for Rick or myself to help you, just email us at firstname.lastname@example.org or email@example.com. By sharing your current challenges with us, you will also help others who are probably facing the same issues.
The Big Dogz are never afraid of asking for outside assistance. When faced with business challenges that are dogging their every move, Big Dogz reach outside of their turf and get expert help to help them successfully overcome.
In 2008, we resolve to provide you with the best insights on business ideas and best practices that can help you move your business forward. Why not resolve for yourself to take advantage of our experience in 2008? What do you have to lose?
Note: If you want to get some feedback on a particular business issue you are facing and want to keep your name/business confidential, we’ll respect that. In that case, we’ll mention the business issue and our response to it in this blog, but will NOT post your name, etc. We can do that…it’s a no-brainer.
We wish you the best for you and your business in 2008!