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Two Reasons For Embracing What’s Difficult

No one goes out looking for difficulty. Why would we? But, at the same time we shouldn’t run away from it either.   In today’s video I talk about two reasons why you and I should embrace what’s difficult.   If you’re willing for this, the payoff is likely much more than what you could ever imagine. Watch it now.   Question: What challenge have you faced and overcome that you are most grateful for? [question]embrace-the-difficult[/question]  
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Two Best Ways to Fail in Building Trust


Why Your Team Doesn’t Measure Up

You cannot manage what you do not measure.  
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  That’s one of my favorite management adages of all time. It captures a timeless truth in a simple sentence that can be grasped by all who are willing to take heed.   Too many managers I’ve come across prefer to use a style of management that I call “hope management.” They hope things work out. They hope things turn out the way they want them to. When they don’t, they’re often not even fully aware of it because when you’re not measuring it’s very difficult to tell, with any degree of certainty, whether things are actually getting better or worse.   Additionally, if things are getting better or worse, do you know by how much? Do you understand why you’re experiencing improvements or degradations? If not, you’re not really managing, you’re hoping.   Measuring gives you an opportunity to affect the outcomes you or your team are generating. Because you know whether you are gaining or losing, you can make adjustments to the “recipe” and then gauge what impact your adjustments have produced, positive or negative.   That’s real management.   Let’s look at four aspects of measurement that are critical to your ongoing, long-term success.

What to Consider When Measuring

1. Use a balanced approach of measurement. One of the biggest mistakes I come across is companies that are relying solely, or much too heavily, on the income statement to assess the health or success of the business. Unfortunately, this leaves you with plenty of blind spots and things can change drastically without anyone seeing it coming.   In the mid-90’s professors from the Harvard Business School came up with the Balanced Scorecard concept. It has taught us the importance of looking at the company from four equally important perspectives:  
  • Financial
  • Customer/Stakeholder relationships
  • Internal business processes (your operations)
  • Learning and Growth (your people)
  What’s critical to understand about this is that the last three categories have a direct impact on the financial results. But, if all you ever look at is the monthly or quarterly financial results, you’re going to miss the train that’s coming down the track.   This balanced approach allows you to see cracks in the armor before they become financially fatal. This puts you in the driver’s seat to manage these critical business aspects so that they produce a positive return on your investment.   2. Measure certain items weekly. If you wait until the end of the month to look at all of your measures, you’re going to find that you’re often “too late to the party.” However, if you’re reviewing the team’s performance on select items on a weekly basis it gives you the ability to make decisions proactively that can change the end outcome for the month.   For example, if you have a monthly revenue goal and review it weekly, and find that after week #2 things are off track, you still have two weeks to work with your sales team to effect a successful outcome.   Another measure that I recommend tracking on a weekly basis is your cash balance/forecast. There is no more important measure for a CEO or small business owner than this.  
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  3. Measure what matters most. It’s important that you understand the key economic levers or drivers within your organization. You can’t measure everything so you need to measure the things that have the biggest impact – on your people, your processes, your customers, and your finances.   For this it is critical that you and others on your team have a thorough understanding of what those key drivers are and how they impact the bottom line. For example, I once knew a Sales Manager who commented that if his team made 100 sales contacts per day, they’d hit their monthly revenue goal almost every time.   As another example, one of my clients knows pretty clearly what labor percentage his crews need to be at (as a percentage of sales) in order for them to hit their desired net profit levels.   What customer, process, or employee-related measures have the most direct, positive impact on your profit, cash flow, and balance sheet?   4. Don’t neglect cash flow and the balance sheet. Cash is king, as they say. But, too many companies are blind to what their cash looks like today, much less have a forecast of what it will look like a week or more from now. That could be a fatal mistake. There have been companies that have gone out of business even though their sales have been at record-breaking levels, because they weren’t watching their cash.   Additionally, many companies completely ignore the balance sheet. While the income statement gives you incredibly important information, the balance sheet gives you insights into critical financial aspects of the company that the income statement cannot, such as liquidity – i.e. a measure of how quickly you would be able to convert your assets to cash.   The balance sheet will tell you whether or not the current assets of the business are sufficient to cover the current liabilities and whether or not you are relying too heavily upon debt to run the organization. It also gives you important information about your cash cycle – i.e. how long it takes, on average, to collect payment on your invoices.  
If you’re not measuring, you’re not managing, you’re hoping.

Joe Denner


Final Thought

One last thought as you think about how to measure your business. Don’t bite off more than you can chew. It’s easy to get overzealous when it comes to measuring, so as you turn your sights to this all-important aspect of your business you need to apply the KISS principle – keep it seriously simple.   Start by asking yourself what three, non-financial measures have the biggest impact on your bottom line. Once you have your arms around that, you can begin expanding to a larger scorecard.   Question: What is the most important non-financial metric for your business? [question]team-measuring-up[/question]  
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What Kind of Customer Experience Are You Creating?

A couple weeks ago my wife, my oldest daughter and I stopped at Chipotle for lunch. We were in no particular hurry.     When we got to the front of the line my wife ordered a chicken burrito bowl. The young lady behind the counter informed us that they were currently out of chicken and that it would be about five minutes before they had any more. We all wanted chicken so we quietly stepped aside to let others behind us order.   It couldn’t have even been five minutes later when the young lady motioned to us that the chicken had been replenished and they were ready for us. We proceeded through the line as usual and came to the register to pay. It was at that point that the manager said, “It’s on me. I’m paying for your lunch since you had to wait.”   I think we may have slightly protested, but he insisted and apologized for the wait. My wife’s response had to be music to his ears. “I already loved Chipotle, now I love it even more,” she said with a big smile.   As I walked away from the counter to find a table I couldn’t help but think about what that young manager had just done. I even talked about it briefly with my wife and daughter as we ate our lunch.   I thought, “That’s a smart business person.” Yeah he just gave away $20, but I assure you that based on our experience, we’ll be back again and again.   My question for you today is, “What kind of customer experience are you creating?” Are you creating ho-hum experiences, or even worse, or are you creating “I love this place” type of experiences. The interesting thing is that it doesn’t have to be expensive to create the latter.   I’d like to share with you two more of the best ways I’ve seen to create positive customer experiences without giving away the farm.

Coming Back for More

1. Consistently deliver on your brand promise. This is pretty basic, but so many don’t do it. Consistency is the key to developing and maintaining a strong brand. When people know what to expect, and it meets a felt need, they’re more likely to come back for more.   Your brand doesn’t even have to be high-end to be effective. Take McDonalds for instance. When I was growing up (it seems so long ago) you always knew you could get a clean bathroom at McDonalds. It’s one of the reasons so many families who were traveling stopped at McDonalds for a meal. It certainly wasn’t for the dining experience. Or was it?   Actually, I’ve come to believe it was not only for the bathrooms but also for the dining experience itself. But not because it was so great. Rather, because it met a basic need, and we knew exactly what kind of experience we were going to get. The burgers and fries tasted the same whether we were in Arizona or Minnesota or Pennsylvania. We were rarely, if ever, disappointed.  
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  2. Be honest with them. I know that can be scary at times, but honesty really is the best policy. I had a customer many years ago, when I was the COO of another company, who told us that one of the main reasons they continued to do business with us was not that we were perfect or flawless, but that we were honest about our mistakes and addressed them swiftly.   This was a very large and profitable customer for us and it would have been very costly to lose them. One production cycle we made a huge error in scheduling. Rather than fabricating something to keep us from looking bad, I was blatantly honest with the V.P. of Operations.   She was one of the toughest customers I’ve ever had. She never minced words. She was very blunt and very demanding. But I always knew where I stood with her and she trusted me implicitly because I’d been honest and quick to act on numerous occasions.   In this instance she drilled me with questions, pressing me for information and firm commitments for where we were headed. Again, I was straightforward, and continued to keep her in the loop as the process unfolded. She remained a faithful customer for many years, even beyond when I left the company.   In Patrick Lencioni’s book, “Getting Naked” he says that the main reason we stray from honesty is fear of losing the business. But, he posits, that naked honesty is actually refreshing to customers and usually builds the relationship rather than hurting it.  
Consistency is the key to developing and maintaining a strong brand.

Joe Denner


Back to Learning for a Moment

A couple weeks ago I told you that I’d be sharing some of my favorite ways to learn. I started with my list of top recommended books to read. Today I’d like to pass on my recommendation for a few podcasts that I listen to on a regular basis that have been especially instructive, challenging and encouraging.   Andy Stanley’s Leadership Podcast is probably my favorite. Andy and his co-host only publish one podcast per month, and it is usually only about 20-25 minutes long, but it is top notch stuff each and every month. He shares from his own experience in building one of the premiere organizations in his industry over the last twenty years. I deeply appreciate his humility and his wisdom as he shares.   This is Your Life with Michael Hyatt is my second favorite. Michael publishes every week and the podcast is usually about 30-40 minutes. He has a delightful co-host, Michele Cushatt, who makes a strong contribution as well. They cover a variety of topics from leadership to productivity to personal development to how to grow your influence. It is always packed with very clear, practical steps to growing in these areas.   Getting Things Done is another of my top recommendations. It publishes every about every two weeks and varies widely in length. This podcast is all about productivity and focuses conversations around the GTD methodology. The thing I really like about it is that they interview a very broad audience of people from very diverse industries so you get a number of angles on how GTD can work for you.   Don’t forget to check out our podcast, “Stronger Leaders…Shaping Tomorrow” which is published the first week of each month.   Question: How have you created great customer experiences? [question]great-customer-experience[/question]  
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One Way to Know When Technology is NOT the Solution

I was recently in a meeting with one of my clients where their team was discussing the possibility of implementing a robust software package to improve their operations.  
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  As I listened to the conversation my discomfort grew. I asked some pointed questions and the answers I received confirmed my suspicions.   I knew that not only were none of the packages they were considering the right one, there wasn’t a package on the market that would solve their problem. So, how was I so sure?   It’s not because I’m a techno-wizard. It’s not because I have a sixth sense. It’s not even because I think I’m a genius when it comes to business.   It’s because there is one way to know for sure that technology is not the solution.

An Important Lesson

I’ve been around a lot of software implementations in my day. It’s really exciting and rewarding when things turn out the way you want them to. Even with all of the hard work and the inevitable hiccups, the payoff can be fantastic. I’ve had that experience.   However, they can be excruciatingly painful, especially when they don’t work. I’ve seen that happen also, way too many times.   Years ago I learned a critically important lesson from my boss who had just completed the Executive MBA program at Kellogg University. He passed on this bit of wisdom to me. Here it is: Technology is an accelerator.   Did you catch that? Technology is an accelerator. In other words, it makes things go faster. So, if you stink at something and decide to throw some technology at it, you’re just going to end up stinking faster. And you’re going to spend a lot of time and money to achieve that negative result.   Here’s a very simple test you can apply to decide whether or not technology is the answer to your problem. If you can’t figure out how to do something the old fashioned way, e.g. manually, don’t implement technology to try to make it work better.  
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Best Examples

Two of the areas where I have seen this most often is with CRM and Inventory packages. In the case of CRM systems, companies sometimes have a hard time accurately tracking the leads and opportunities that come their way. They think implementing a CRM system is the answer.   They dream about how it’s going to give them quick access to great info and pretty reports that will help them drive more sales. So, they go out and spend thousands of dollars and dozens and dozens of hours to get it in place only to find out that they’re still having many of the same problems.   The reason for this is really very simple. GIGO – Garbage in, garbage out. The processes and systems they had in place were insufficient or defective. Putting in a CRM package is not going to fix that. Why not?   A computer can only do what it’s programmed to do. First, if you haven’t figured out how to do it, you can’t tell the computer how to either. And it can’t figure it out on its own, at least not at the time of this writing. Second, if people won’t make the appropriate inputs into the current system, they’re not likely to do it in the new system either.  

The Rest of the Story

So, back to the story with my client. From the answers they gave to my questions it was clear that the problem was due to a lack of discipline. People weren’t doing what they had been instructed to do. That’s one of the most prevalent problems that I find in companies that are struggling with a process.   Giving people software or technological tools isn’t going to change that. Depending on the skill level of your employees, you may even be introducing new levels of complexity that will make things worse.   We give technology too much credit. We think it will solve all our problems for us. But that often isn’t the case. It’s only a tool, an accelerator.  
Technology is not a problem solver. It is an accelerator.

 Joe Denner


Quick Recap

If you are considering implementing technology, ask yourself the following questions:   1. “Are we currently able to accurately execute the process manually (or mechanically)?” 2. “If the process is working well, do we have a thorough understanding of why it works and how it works?”   Unless the answer to both of these questions is “yes,” you need to correct that situation before giving any consideration to technology.   I just saved you a lot of wasted time and money. You’re welcome.   Question: What’s been your biggest technology disappointment? [question]technology-not-solution[/question]  
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