Growing Good: Philanthropy Grows Your Network, Your Skills and Your Business

Are you looking for another option to add to your ongoing marketing and branding campaign, one that is neither content nor traditional marketing and yet has the potential to greatly enhance your professional network, increase your opportunities to acquire new clients and referrals and even allow you to enhance your skill set?  Add philanthropy to your marketing campaign, as expressed by volunteerism, corporate social responsibility, sponsorships and donations and watch your sales grow!

Corporate social responsibility is now considered a best practice and there is a growing expectation that business and civic leaders, in particular, will “give back” and make a contribution to their community.

When Freelance consultants and leaders of for-profit organizations large and small, participate in philanthropy, it is a carefully evaluated business decision that’s part of a long-term personal branding and marketing campaign.  Just because your payroll is small doesn’t mean that philanthropy will not deliver significant ROI to your brand and business.  The selection of an organization to support will be strategic.

The first guideline is that you affiliate with organizations that have a mission you can support.  Second, the organization should operate and be headquartered locally, to support your objective of  having an impact among the movers and shakers in your business community, people who could become your customers or referral sources.

Third, if possible, aim to lend your pro bono support to an organization that somehow is connected to your product or service, or will give you the opportunity to demonstrate your expertise or strengthen skills you’d like to build.  Volunteering can provide avenues for professional development, as you take part in projects and committee work that allow you to stretch and acquire additional competencies.

For example, if your financial management skills are weak, merely listening to finance reports and discussions around them at board meetings can be instructive.  Finance Committees even at small not-for-profits are often headed by very astute professionals.

Getting started

Becoming a sponsor of a local charity event, from the Boy Scouts to an educational or skills development center, is an effective, possibly low-cost and minimal commitment method to get an inside look at an organization that interests you.   A business card size ad in a fundraising event program book is a useful entrée and might cost as little as $200.  Your ad will not hurt your marketing strategy and will be tax-deductible, as well.

Alternatively, you can take the sweat-equity route and volunteer your time and labor as an event day helper at a fundraising program.  This strategy will allow you to attend the event and observe how the leadership interacts with its largest and most devout supporters.  A board or event committee member will be appointed to supervise the volunteers, so  you will be able to meet an insider and ask a few questions, along with getting a sense of the working style of the leaders (a very important consideration, BTW).

Speaking of sweat, you might decide to run, walk, bike, swim, or play golf or tennis in an athletic event sponsored by your chosen not-for-profit and ask friends and colleagues to sponsor you and help you donate to the organization.  All gifts will be tax-deductible. Plus, you’ll have lots of networking opportunities and a good time.

Finally, if you can muster a larger philanthropy budget, you can simply call the organization, express your interest in its mission and ask to visit and take a tour.  The Executive Director or another senior-level staff or board member will be happy to oblige.  You may be recruited on the spot to join a committee, as a pathway to an invitation to join the Board.  Be advised that there may be an expected annual donation of perhaps $500 or more.

Build relationships

Your experiences in charity event participation or sponsorships, or in board or committee service, will over time bring you into contact with many people.  Meeting C-Suite professionals during your volunteer activities breaks down barriers and has the potential to facilitate building relationships with VIPs who will see you in action as you perform board or committee work.

If you need a well-placed reference, it will likely be granted and  you may receive a referral or two as well, which would help your client list.  You might even get so lucky as to find a well-connected sponsor who will champion you and your work and help you to grow your business (or career).

Publicize your philanthropy

Let current and prospective customers know about your philanthropic activities.  In your curriculum vitae, bio, website and LinkedIn page, make note of your philanthropy, especially if you’ve joined a board or become an annual sponsor of, or participant at, a charitable event.  In a 2013 study Cone Communications, a Boston-based PR and marketing firm and Echo Global Logistics, a provider of transportation and supply chain management systems headquartered in Chicago, found that 82% of B2B and B2C purchasers preferred to do business with organizations that practiced corporate social responsibility and 91% of responders said they would switch brands to one that supports a good cause, given similar price and quality.

I leave you with this: Luke Weil, founder of Andina Acquisition, which invests in companies in the Andean region of South America, encourages us to give without expecting anything in return. Your generosity and selflessness generate good Karma and positive energy and the spiritual benefits will do wonders for your psyche.  Pay it forward.

Thanks for reading,

Kim

Image: Woman Giving Alms (date unknown, private collection), by Janos Thorma (Hungary, 1870 – 1937)

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Launch 2017 With Strategic Planning For Your Business

Happy New Year! My wish for all my readers is that 2017 will be filled with good health, good choices and prosperity and a year where you recognize opportunities and successfully move forward to attain what will benefit you.

Part of the process of realizing your goals may involve strategic planning. The process of strategic planning encourages business leadership teams to ask (the right) questions about the value that the business creates and sells at a profit, which is a reflection of its vision and mission.  The goals, objectives, business model and guiding principles (that is, culture and values) are likewise impacted by the organization’s vision and mission. Below are six strategic planning and positioning principles to enhance your planning.

Principle 1:  Sustained profitability

Economic value and the conditions for generating profits are created when clients value your product or service enough to pay more than it costs the business (you) to produce and provide it.  Strategic planning is all about Defining  business goals and objectives and devising strategies and action plans with the thought of ROI, in particular long-term ROI, in mind.  Assuming that profits will be inevitable when sales volume and/or market share are the most accurate measurements of success is not the best way to approach the matter.

Principle 2: Value proposition

First, be certain that what you consider to be the value proposition—that is, the most desirable benefits—matches what clients consider to be the value proposition. Be aware that strategy is not about offering services or products that will be all things to all prospective clients.  Businesses are in need of strategies that allow the venture to compete in a way that allows it to effectively and efficiently deliver what clients consider the value proposition.

Principle 3: Competitive advantage

The unique and desirable benefits that sustain the value proposition must be reflected in and supported by strategy that shapes them into a sustainable competitive advantage.  The successful enterprise will differentiate itself from competitors through the products or services offered, how those are packaged and/or delivered, customer service practices, branding, pricing and so on; those unique features and practices will matter to current and prospective clients.  Still, the company’s business model will likely resemble that of its rivals.

Principle 4: Choices and priorities

Resources are inevitably finite and choices about your products and/or services must be made, in order to define what is necessary and possible and therefore, a priority.  Some  product or service features will not be offered, so that the benefits (priorities) that clients have chosen as highly desirable can be optimized.  These priorities are what sets the business apart from competitors and define the brand.

Principle 5: Flow

Choices and priorities must be baked into the strategies that you and the leadership team devise, to enhance and enable the consistent  delivery of the value proposition. These strategies will be both stand-alone and interdependent, like dominoes.  Choices made to define the target customers that the business will pursue also impact product design and by necessity will impact choices that determine the manufacturing process and its cost.  Choices that determine what will be included in a service will be influenced by the expected target customers and will impact how that service is delivered and priced.  Choices about product positioning and branding will impact where the product is sold and the marketing strategy.

Principle 6: Direction

The late style icon Diana Vreeland, who served as editor-in-chief at both Vogue and Harper’s Bazaar Magazines, once said that “elegance is refusal.” A company must define its unique value proposition and that will eventually cause certain potential choices to be declined, because they are contrary to the brand.  The product or service lines can be altered to satisfy customer demands over time and business models can be adjusted to reflect current or anticipated market conditions.  Nevertheless, the vision and mission must be upheld to maintain brand awareness and trust. Strategic direction will guide that process.

Thanks for reading,

Kim

 

What Do You Know? Knowledge Mapping and Management

Have you taken stock lately of what you know and the potential value that your knowledge can bring to clients? Those of us who work in the Knowledge Economy are advised to periodically examine, catalogue, package and communicate to prospects, clients and referral sources the types of knowledge that we provide and the value of that knowledge, that is, the benefits that would be received by clients who pay to receive the knowledge.

Martin Ihrig, Associate Professor and Director of the Strategic and Entrepreneurial Management of Knowledge Initiative at the University of Pennsylvania’s Wharton School of Business and Ian MacMillan, Professor of Innovation and Entrepreneurship at the Wharton School, encourage Knowledge Workers to take an accounting of the full spectrum of their strategic knowledge assets: core competencies, talents, intellectual property, areas of expertise and deep experience. In order to effectively present ourselves to prospective clients, we must first understand and communicate what we offer to them and why it matters.

Step 1 is to list your strategic knowledge assets and group them according to categories. For example, if selling is the basis of your consulting practice, then your categories of core competencies, expertise and experience would likely include sales skills training, management of sales teams, sales distribution expertise, developing and nurturing client relationships, the success of new product launches, both individually and of sales teams that you’ve led, etc.

Think also in terms of your structured and unstructured knowledge. Structured knowledge that you possess would include your educational degrees and certificates; specific job experience; quantified intellectual property; technical proficiencies (maybe you speak another language, or are fluent in a certain relevant computer software); or specific methodologies used to provide services. Unstructured knowledge usually centers around your experience and expertise. Unstructured knowledge would, for example, include the deep experience you possess that allows you to accurately and relatively quickly grasp the big-picture as well as the nuances of challenges and opportunities that clients typically hire you to address.

Step 2 encompasses the primary goal that Ihrig and MacMillan assign to cataloguing and categorizing your knowledge asset categories, which is to enable you to visualize and consider them fully and position your consultancy for maximum profitability and sustainable growth. How can you advantageously leverage what you know? Are your categories primarily stand-alones, or might you combine them in ways that make you better able to meet the emerging needs of current and prospective clients? In Step 3, examine the business model for each of your high-level categories and the organizational systems and practices that you currently follow to efficiently enable their delivery.

If you love geometry, in Step 4 you can map your structured assets along the x-axis and unstructured along the y-axis (or the reverse, if you like). Simple list-making works, too. As stated above, you may discover ways to combine competencies, structured or unstructured, that will add to the services that you provide, or you may reconsider a seldom used structured or unstructured competency and realize that it may now be marketable.

Once you’ve listed your mission-critical knowledge assets, the challenge is to decide how best to package, message and promote them. If you carefully map and manage your knowledge portfolio, you may discover lucrative competitive advantages that otherwise may not reveal themselves to you.

Thanks for reading,

Kim

Arranged Marriage: Propose A Strategic Partnership

On numerous occasions throughout the life of this blog,  I’ve urged readers to create strategic partnerships as a way to grow and sustain their enterprise.  Strategic partnership can bring great advantages to the entities involved.  But if poorly conceived and executed,  the partnership will be an expensive and frustrating disappointment.  You know which scenario you want,  so let’s talk about how to get there.  Freelance consultants and small business owners will likely have one of the following goals in mind when contemplating a strategic partnership:

  • Expertise that is project specific or ongoing
  • Labor needed for the short-term or intermittently
  • Access to a certain target market
  • Increasing sales in existing markets
  • Sharing resources, e.g. office space or technology

Define goals that you can reasonably expect to achieve via the partnership.  Your need may be as simple and short-term as finding a talented and reliable graphic artist to design a save-the-date card,  invitation and program book for a nonprofit agency fundraiser that you are planning or a photographer to capture special moments at the event.  If you produce many events,  you will want to form ongoing strategic partnerships that will create a team of suppliers on whom you can rely.  If a long-term arrangement is your goal,  consider carefully the expected benefits to your organization in terms of market penetration,  access to bigger projects and clients,  increased revenue,  or other pertinent factors.  Project how long you expect it will take for your organization to realize progress towards the goal.

Well-defined partnership criteria will help you to pre-sort candidates in advance of approaching someone.  You won’t know until you have a meeting,  but learning about the potential candidate’s business model,  client list,  business goals,  business practices and organizational culture are important deal-makers or deal-breakers.  The more alignment between the participating organizations,  the better the chance for success.  Prepare and prioritize your list.

Next,  think about potential partnership candidates and your relationship with those individuals or entities.  Look for a firm where a complementary aspect exists with yours,  as noted above in the example of an event planner in search of a photographer or graphic artist.  Will organizations that offer any competing products or services be disqualified?

If it’s a long-term partnership that you will propose,  prepare a partnership worksheet for each candidate,  to ensure that you approach only those with whom you are likely to partner successfully.  Be specific about what you want the partner to provide and the responsibilities of each entity.

As you consider partnership candidates and develop the worksheet,  confirm and learn to articulate the expected benefits that would accrue to an entity that would partner with your own,  attainable over the short and long-term.  How long do you project it will take for the partner’s organization to realize progress towards the goals? Seeking feedback from a knowledgeable and neutral third-party might be helpful at this stage,  to eliminate excessive optimism on your part.

You are now ready to enter the recruitment phase of your search.  This process can be formal or informal,  depending on your familiarity with the organization leader.  You might run into that person at the grocery store and suggest that the two of you sit down over coffee and talk a little business.  If you’re not so chummy,   send an email and set up a call time or a face-to-face.  If the proposed arrangement will be complex,  provide your prospective partner with a copy of the partnership worksheet.  The worksheet will make you look super-prepared and can only raise your stature in the eyes of the candidate.

Especially if your intended has a bigger and more prestigious organization than your own,  providing the partnership worksheet should be a good tactical move.  The worksheet will also help you to launch discussions of organizational priorities;  clarify the perceived benefits, of the partnership;  anticipate obstacles;  reveal alignments or disconnects in business practices;  and give insight into organizational culture.

If at the meeting the partnership seems like a good fit,  propose or answer any questions that would constitute due diligence as you develop a formal partnership agreement.  The two of you must agree in writing to the specifics of the partnership:  its goals,  expectations,  services provided,  resources shared,  responsibilities,  fee schedules,  deadlines,  effective date and how success will be evaluated and other factors that would impact the relationship.

Thanks for reading,

Kim

Eight Leadership Styles. Which One Is Yours?

When assuming a leadership role,   one does what is required in that position at the time.   There is no road-map because leaders must respond to events as they occur,   as they simultaneously champion projects developed by members of their team,   push through selected personal initiatives and follow through with worthy projects that started before their regime.   Most of all a leader must be versatile,   possessed of good judgment and more than a little lucky.

Nevertheless,  we all have our strengths.   Some of us are super strategists,  or change agents.  Others are great with process and operations,  we intuitively know how to get things done efficiently.  Still others are master communicators: deal-makers,  negotiators or coaches.

How does one rise to leadership,  take the reins and succeed when certain key projects call for talents outside of the natural skill set? Good judgment will encourage the leader to recognize what is beyond his/her expertise and delegate such tasks to better qualified team members.   Further,  the leader is advised to acknowledge team members who step up,  because recognition builds loyalty and the productive can-do spirit of a high-functioning team.

Leadership development specialist Manfred F.R. Kets de Vries,   author of “The Hedgehog Effect: The Secrets of Building High Performance Teams” (2011),   has identified eight leadership competency archetypes for us to ponder.   Do you recognize yourself in one?

The BUILDER approaches leadership as an entrepreneurial activity.  This leader longs to create a tangible legacy.

The CHANGE AGENT loves to ride in on a white horse and clean up a mess.   Re-engineering is the preferred activity.

The COACH derives great personal satisfaction from talent development and knows how to recognize the strengths of team members and get the best out them.

The COMMUNICATOR,  like former presidents Bill Clinton and Ronald Reagan,  loves being on stage and knows how to influence people.

The INNOVATOR is able to sort through difficult problems and devise creative,  yet practical solutions.

The NEGOTIATOR is highly gifted at recognizing,  selling and bringing to the organization lucrative new business opportunities.

The PROCESSOR is an operations expert who will make the organization run like a well-oiled machine.  This leader will institute systems that support the organization’s objectives.

The STRATEGIST has the vision to recognize which goals and strategies the organization would be wise to pursue to ensure its future growth and sustainability.

Merry Christmas and thanks for reading,

Kim

Choose a Strategy to Make Your Strategy

“Become Your Own Boss:  Effective Business Plan Writing”  will be presented by your loyal diarist on Wednesdays October 10, 17 & 24 5:30 PM – 7:30 PM at Boston Center for Adult Education.  Do you have a hobby that you’d like to turn into a profit-making business? Click and register to learn how  http://bit.ly/RnyIBP

 Responses from a recent Boston Consulting Group survey of 120 companies from around the world indicate that executives are well aware of the need to match their strategy making process to the specific demands of their competitive environments,  according to survey authors Claire Love,  Martin Reeves and Philipp Tillmanns of BCG.

But in practice,  many companies relied instead on approaches that are better suited to predictable and stable business conditions,  even when business conditions are known to be highly volatile.  Technological innovation,  social media and global uncertainty have conspired to make the business climate for nearly all industries less stable and predictable than in the past.  Business planning must reflect that reality and build strategies in response.

Love,  Reeves and Tillmanns identified four strategic styles:  Shaping,  Visionary,  Classic and Adaptive.  The first two styles are appropriate for major corporations that have the power to influence buying demands and habits on a massive scale.  Small business owners and Freelance consultants would choose between the latter two,  depending on the local business environment and practices in their industry.

Some industries are based on fast-moving,  changing market dynamics and furthermore,  uncertain economic times demand a more fluid and experimental approach.  In such environments,  long-term plans are essentially useless.  The Adaptive strategic style  is most appropriate under these conditions,  since it gives the business owner a roadmap to follow as goals and tactics are continually refined in response to shifting conditions.

Planning cycles may last only one year.  Initiatives are short-term,  quarter by quarter,  because making money is about what’s hot now.   Trendy hair stylists,  the hottest nightclubs and bars,  fashion forward retailers and entertainers from Lady GaGa to Nicki Minaj base their business planning on the Adaptive style of strategy setting.

Big data will not tell Adaptive style strategic planners what will be hot in six months.  On-the-ground brand representatives,  party promoters,  recognized style leaders and bloggers known to have credibility with the target customers give feedback on trends that might have significance,  that are ripe for a mini-marketing campaign that might bear fruit.  The Adaptive style planners then evaluate the trends and use the feedback to make informed decisions.

The Adaptive style encourages  companies to set up their organizations to test and roll out a variety of products and services as quickly and efficiently as possible,  constantly adapting in the light of sales figures and social media feedback.   Some strategies are bound to fail,  but numerous cost-conscious experiments made in quarterly or twice-yearly campaigns increase the likelihood of success and minimize losses when a trend is over-estimated.   Success is defined by carving out the best position in a volatile marketplace.

Setting strategy begins with an accurate assessment of your industry and local business environment.  Depending on the business conditions,  the Freelance consultant or small business owner would choose either the Classic or Adaptive strategy style when a planning session is in order.  From there,  it will be possible to find a path that will allow you to apply your unique expertise and resources to making the most of available money-making opportunities.

Thanks for reading,

Kim

The Strategy for Your Strategy

“Become Your Own Boss: Effective Business Plan Writing” will be presented at Boston Center for Adult Education on Wednesday evenings October 10, 17 & 24 5:30 PM – 7:30 PM.  Do you wonder what you’ll do after you retire?  Evaluate and prepare to launch the business idea that you’ve been thinking about for the past few years.  Register at  http://bit.ly/RnyIBP

We’re at the threshold of the fourth quarter and it’s time to set yourself up for not only a strong and profitable ending for this year,  but also an auspicious beginning for 2013.  To make that happen,  you may choose to tweak your business strategy or perhaps make more substantive changes to roll out.  Change makes us nervous,  because we  enter uncharted waters.  Business plans look good on paper,  but what will reality bring? The impact can be unpredictable.  Freelance consultants can test a strategy relatively quickly,  but mistakes cost time and time is money.  Yet,  there are ways to improve the odds of achieving success.

Competitive advantage is derived from recognizing and responding to developments in your marketplace faster and more accurately than your competitors.  Strategy experts in Fortune 500 companies know that the strategy setting process must reflect the conditions of the marketplace in which one operates,  as well as your company’s influence within.  In other words,  minnows have different options than sharks or whales and the minnow’s strategies must reflect that reality.

Claire Love,  Martin Reeves and Philipp Tillmanns of Boston Consulting Group say that to effectively plan to succeed,  the business needs a strategy for making a strategy.  The trio have identified four categories of strategy setting:  Classical,  Adaptive,  Shaping and Visionary.  Small businesses and Freelancers would use one of the first two.  Think of Sony and IBM as two companies that had Visionary ideas that Shaped the global marketplace and influenced the habits of a billion consumers.

Classical is the strategy setting style recommended when operating in an industry and business environment that while predictable,  is nevertheless beyond the businesses’ ability to control or significantly influence.  Strategy planners analyze the current business situation and use that information to set reasonable business goals and identify the most favorable competitive market position that can be expected by leveraging available resources and advantages:  client list,  experience,  expertise,  relationships,  reputation,  etc.,  plus identify and assess barriers to entry.

The strategy planners then refine and strengthen competitive positioning through standard strategy planning techniques such as the SWOT  (strengths,  weaknesses,  opportunities and threats)  matrix and project the likely results elicited by the new strategy forward into successive quarters.   Goals and the strategies developed to achieve them might be followed for maximum three years,  or until changes in the business environment or within the business itself encourage the planners to set new goals and strategies.

Next week,  we take a look at the Adaptive strategy setting style.

Thanks for reading,

Kim

Strategic Volunteerism: Doing Well by Doing Good

Within three months of losing my corporate job back in the late 90s,  I got the bright idea to plunge into volunteering. I instinctively knew that keeping my hands busy with good work and meeting new people would help keep my spirits up as I figured out my next move.

Along the way, I also learned that volunteering provides opportunities to develop new competencies or resurrect dormant skills.  Plus,  I enjoyed the camaraderie and feeling of satisfaction that grew from joining with others to advance the mission of an organization we felt provided important benefits to our community.   More than a dozen years later,  I am still in at least occasional contact with several people I met in my first significant volunteer experience.

Volunteerism is de rigueur for Freelancers,  business owners,  corporate professionals and even students seeking acceptance to prestige schools.  Consider it additionally as a pathway to creating more business or entering the C-suite.  Volunteer projects allow important others to witness first hand your talents,  professionalism,  commitment and collaborative spirit.  Volunteering is an excellent way to beef up your CV and bio,  meet prospective clients and expand your referral network.

Strategically and purposefully volunteering one’s time is an essential component of smart networking and PR strategies. Volunteer to participate in  (or sponsor)  a noteworthy community event and create the perfect reason to write a press release and alert the media to your activity.

Carefully select a volunteer opportunity that will achieve specific objectives.  To get started,  ask yourself some questions that will clarify your reasons for volunteering,  help you choose the right organization and assess how much time you can contribute:

  1. Decide what you would like to achieve.  Do you want to showcase certain talents,  develop or strengthen certain skills or boost referrals?
  2. Decide who you’d like to meet and interact with.  Do you want to develop relationships with industry peers,  or promote a cause while you meet prospects?
  3. Decide your preferred time commitment.  Can you appear at monthly meetings over a two or three year period and serve on a board of directors,  or is a short term commitment on a special project committee more suitable?

Next,  identify volunteer opportunities that will produce the desired ROI.  Whether you are most interested in professional associations or not-for-profit organizations,  investigate and ask questions.

If you are not yet a member of the professional group that has captured your interest, visit its website,  learn the purpose of the group and the types of programs it sponsors.  Attend a program,  meet members and officers and ask what they value most about membership.  Make discreet inquiries about committees/subcommittees to figure out which would best showcase or build your skills.

If you are drawn to the NFP sector,  be sure to choose an organization whose mission aligns with your interests and values.  Visit the website to find out who is on the board and check out past and upcoming events.  Attend one and meet the staff and board members you’re thinking of working with.

It’s good to first test the waters by serving on a short term special project committee,  so that you can learn useful information such as upcoming available slots on the board,  the expected financial contributions of board members and if its members are expected to sell tickets to events or recruit financial donors.

Once you’ve started your volunteer journey,  be sure that your level of participation is in line with that of other board or committee members and that the benefits you’re receiving are fulfilling your objectives.  Strategic volunteering means that you recognize volunteering is a two way street and you exchange your time,  talent and money for opportunities to highlight or strengthen your skills and make some useful contacts while you do it.

So are you meeting the right people?  Do you work on projects that interest and showcase you?  Are you having fun,  or feeling frustrated?  If it’s the latter,  do not be ashamed to resign.  There are numerous volunteer opportunities available and one,  or perhaps more,  will be a good fit for you.

Thanks for reading,

Kim

What’s Up With Your Strategy?

“The most serious mistakes are not made as a result of wrong answers.  The truly dangerous thing is asking the wrong questions”.

–Peter Drucker

Freelancer Friend,  if you are not familiar with Peter Drucker (1909-2005),  please allow me to introduce you to but a small serving of his genius.  Peter Drucker was considered the father of modern management.  In 1971,  he launched one of the nation’s first executive MBA programs for working professionals,  located at Claremont Graduate University in Claremont, CA.  From the 1940s until about 2002,  Drucker produced groundbreaking work on business practice and strategy.  He was the Big Kahuna and he wrote several Holy Grails. 

Drucker was also known to be a serious skeptic of macroeconomic theory,  believing that economists of all stripes failed to explain significant aspects of modern economies (housing bubble, anyone?).  In other words,  if the folks at the Federal Reserve had followed Drucker’s wisdom and reined in the Wall Street masters of the universe,  the world’s economy would be in much better shape today.

Recently,  I found the above quotation plus a list of reality-checking questions that every Freelancer and business owner is advised to ponder and answer at least once a year.  The questions are quite simple and would appear to be no-brainers,  yet they are surprisingly effective at revealing the business strategies that your management team would be wise to develop and implement.

The first two questions require your team to set priorities and the last two require that you assess the organization’s ability to focus on those priorities by choosing meaningful performance measurements.

1.   Who is your primary customer?

It always comes around to identifying the customer,  does it not?  Identifying the natural customers for your products and services is the ultimate make-or-break realization for all business entities,  whether one makes a few hundred dollars during winter by shoveling snow from front stairs and driveways,  or a few million dollars from running a multinational corporation.  Only when the ideal customers have been identified is it possible to develop a marketing strategy that is a guide for resource allocation (e.g., equipment or PR campaigns),  sales distribution channels,  product positioning and branding strategies,  pricing,  creation of a sales pitch,  the networking strategy,  and so on.

2.   What business performance variables are you tracking?

Whatever yardsticks you select to measure business performance,  make sure they provide an accurate assessment of what is happening.  A sharp bookkeeper or accountant,  one with a background in financial analysis,  can tell you which numbers on your profit & loss statement and balance sheet make sense for you to watch and why that is so.  Freelancers probably want to pay attention to net revenue generated,  new business,  repeat business and the number of projects contracted.

3.   What strategic boundaries have you set?

Implementing a strategy involves risk.  Any strategy could lead the business to a place where you’d rather not go.  Know your core values,  priorities and preferences.  Think about what your customers expect and will accept from your organization.  It may be that you decide to take a pass on a golden opportunity because you just don’t want to offer that service or work that hard.  As the late,  great fashion arbiter Diana Vreeland said,  elegance is refusal.

4.   What strategic uncertainties are keeping you awake at night?

The game is all about whether your strategies work and for how many quarters will they work.  Unfortunately,  there is no silver bullet that can zero in on the weaknesses of your business strategies.  At some point,  customer needs and preferences change,  technology marches forward,  or some other event compels you and your management team to reboot dearly held business assumptions and approaches.  In order to adapt successfully,  it is necessary to constantly monitor the yardsticks established in Question 2.

Thanks for reading,

Kim

Go to the Front of the Pack

I’m a little bit of an egghead and every once in a while I like to read a good study,  to keep myself current,  or even ahead of the curve,  on matters of health,  business or anything else that catches my eye.  Recently,  I read an interesting study on strategic competitive positioning,  a survey study done this year at Babson College’s Babson Executive Education.

Lead author H. James Wilson competes in triathlons and he used those competitions and their participants as the study framework.  Triathletes assess competitors in a clean and simple fashion:  who is Front of the Pack,  Middle of the Pack or Back of the Pack?  The first two groups are ranked as actual competitors and the latter is seen primarily as new to the triathlon scene and nothing to worry about.  MOPs and BOPs have one goal and that is to improve their time in every event they enter and move up to the FOP.

Wilson applied the FOP,  MOP and BOP classifications to 300+  global companies that had recently reported facing intense competition within their respective industries.  He segmented the companies as follows

  • FOP if they achieved greater than 15%  annual revenue growth in FY09  (5%,  16 companies)
  • MOP if they achieved 1-15%  annual revenue growth in FY09 (48%,  145 companies)
  • BOP if they showed flat or declining revenues in FY09 (47%,  144 companies)

The essential question of strategy is,  are you heading in the right direction?  Wilson knew that the FOPs were doing more than a few things right and to get to the heart of it,  he analyzed the FOPs and identified three ways in which they outpace the also-rans.  He then developed the following survey questions based on those strengths.

Wilson’s data indicate that if you can answer yes to each of the survey questions,  you’re on your way to the FOP.  How do you stack up?  Something to think about.

1.  Are you/is your company becoming more effective at meeting the needs of clients/customers?

Despite the economic downturn that spawned the planet-wide recession (depression?),  FOPs have maintained the trust,  confidence,  loyalty and dollars of their customers.  FOPs understand what customers want and they are better at anticipating future needs and trends.  They put resources into keeping a finger on the pulse of the customer and they know what resonates.  FOPs are proactive in market research and customer outreach.

2.  Have you/has your company recently implemented a significant innovation campaign or launched numerous small-scale innovation pilots?

Brainstorming ideas for new services,  fresh approaches,  an innovative marketing campaign or self-development plans is an important beginning.  It is always necessary to think things through,  examine the big picture and weigh the possible outcomes of your actions.  Just remember that  “implement”  and  “launch”  are the key words.  How many good plans have you left to languish on the drawing board?  FOPs understand that results come from deeds,  not words.

3.  Are you/is your company becoming more collaborative with other Freelancer colleagues/other organizations?

High levels of cross-company interactions distinguish FOPs more than any other factor studied.  FOPs are also more likely to inform those in their network about business opportunities.  As a result,  FOPs receive the benefits of reciprocity more than most,  when referrals come their way.  Think of  how you might include selected non-competing colleagues in business opportunities that would be mutually beneficial.  Perhaps this is the smartest way to scoop bigger contracts for both?  Plus,  you’ll gain exposure to another’s business methods and perspectives and that information will make you even more savvy and competitive.

Thanks for reading and Happy Thanksgiving,

Kim