Ten things big businesses envy in smaller businesses

Big businesses often bemoan their own lack of essential vitality and wonder what they could take away from smaller, more entrepreneurial business and incorporate into their own culture.


At first thought, the shopping list is negligible. After all, who would want all the hassle and grief of being an inconsequential price-taker without all the trappings of the corporate world? However, on second thoughts, there are a number of attributes that the bigger business is positively jealous of.

1. Passion and belief in the product.
2. Excitement.
3. Flexibility and ability to change direction, at the drop of a hat!
4. Responsiveness.
5. Speed of decision-making.
6. Communication, no silos; simple lines of accountability and control.
7. Commitment.
8. Closeness to customers and suppliers.
9. A feeling of being able to make a difference; in control of your own destiny.
10. Clear focus.

The reason that small businesses exist is to satisfy a dream or fill a gap or an opportunity that others cannot see.


Most of these attributes should also exist in the larger organisation. They just seem to get beaten out of people as control, stability, safety and security become more important in what can only be described as the corporate mindset.

Ten things big businesses envy in smaller businesses

Bright Marketing Academy - coming soon

LAUNCH DATE: 10TH OCTOBER

This no-nonsense course will help you decide what marketing means in your business..., how you can make your marketing more effective.... and how this will help you make more profit.

Based on the best-selling book and series of workshops reaching over 15,000 business people, Bright Marketing works by helping you to see your business through the eyes of your customers.

The course combines: excerpts from the Bright Marketing book, video lectures, audio interviews, case studies and articles.

Comprising 14 modules, most people complete it in 3-6 weeks (say 10 sessions of two hours each). It all depends on how methodically you wish to complete it.

Take this course if you are serious about growing your business!

Content and Goals

Over 69 lectures and 6 hours of content!

• understand why people should buy from you
• understand what makes you different form the rest
• craft a compelling sales message
• understand how to use which channels to market and sell
• make more sales (and more profitable sales as well!)
• understand how to significantly improve the effectiveness of your sales and marketing activity

Who should attend?

• business owners and directors
• new business owners
• marketing directors of independent businesses
• anyone interested in improving the finding, winning and keeping of clients/customers

LAUNCH DATE 10th October
To find out more contact rc@robert-craven.com 

How To Run A Brilliant Professional Services Firm (PSF)

Tom Peters, at the start of the century, spoke about the PSF (Professional Service Firm). He put forward a model for what these businesses should look like by 2010. Well, we’re past 2010 now and his PSF work continues to be challenging yet inspirational.

When looking at how the PSF might behave in 2010 Peters came up with a series of key ideas that are crucial to the growth of the business and could be encapsulated as follows:

High Value-Added Projects

You should only be doing projects that really do add value to the client, over and above the standard norm. Clients will return if you ‘go the extra mile’; they will not tolerate you doing ‘just enough’. Just enough is never good enough for you or for them!

Pioneer Clients

Don’t just work with the easy clients where you do repeat work that you have done before. It is the clients that really push you and get you to think about the solutions you are offering; this will improve the quality of your work. They may not be so easy to deal with, and you may hate them at times, but pioneer clients will stretch you to come up with unique solutions that other practitioners won’t have considered. And all this can be fed back into your everyday work!

‘Wow’ Work

At its simplest you need to be doing work that blows away your clients – if they don’t think that you are delivering ‘wow’ work, but just ordinary bog-standard run-of-the-mill stuff, then they may well spend their money elsewhere next time!

Hot ‘Talent’

Employ the best if you want the best results. The saying goes, ‘if you pay peanuts then you get monkeys’! 

Recently a (small) client said that they really wanted to grow the business so they literally sought out a ‘world-class’ managing director to take the business to the next level. And it worked!

Adventurous Culture

Culture can be defined as how we do things around here. So how do you do things in your business? Is there a culture of adventure or is it all ‘business as usual’? Just how exciting is it to work in your business or to come into your business as a client?

Proprietary Point Of View (PPOV)

You need an ‘ology’, a way of doing things that belongs to you – you need it so that you have a systematic, measured approach to your work; your clients need it so that they have a sense of what it is that you do, how you do it and a sense of your uniqueness!


Work Worth Paying For

Heaven forbid that you ever do any work that is not worth paying for because that is the time to stop, pack up your bags and go home. We must only ever do work worth paying for!


And when should this happen? 

NOW!...

Score Yourself

Score yourself on a scale of 1 –10 where ‘1’ means ‘never’ and ‘10’ means ‘all the time’.

• We do ‘High Value-Added Projects’
• We have ‘Pioneer Clients’
• We do ‘Wow Work’
• We employ ‘Hot Talent’
• We have an ‘Adventurous Culture’
• We have a ‘Proprietary Point Of View (PPOV)’
• We do work worth paying for

So…

What can you to do create a better PSF? List five things right now.

And in Practice – A Case Study

The board of JWT, an internet marketing agency employing 125 staff, felt that the whole business had become stale and had lost the entrepreneurial sparkle, verve and excitement that it had when it was smaller. Everything had become a grind and, to be honest, they were churning out a lot of mediocre work to some pretty unremarkable and pretty unchallenging clients.

With their hands on their hearts the board could not give themselves a score of more than five out of ten for any of the “Score Yourself” criteria above. This was a sad moment – a time to admit that they had sat back and allowed their need for security exceed their need for excitement.

As the MD euphemistically said, ‘decisions were made to liven things up’. A few staff left but on the whole everyone loved the new adventure to push the scores up as high as possible.

This was not just some silly exercise to make things more fun; in fact, for ‘fun’ read the word ‘risky’. With their new focus, they started to seek more challenging clients and more challenging work which started to separate them out from the competition and it allowed them to do more perilous but more profitable work. Their reputation blossomed and so did their order book (up 35% on the previous year).  

Ryanair, 'worst' brand for customer service sees profits slump - WHY?

Ryanair, the low-cost airline, has the worst customer service out of Britain’s 100 biggest brands, according to the readers of Which? 
http://www.telegraph.co.uk/travel/travelnews/10319838/Ryanair-worst-brand-for-customer-service.html

The magazine asked consumers to rate each company according to its staff’s knowledge, attitude and ability to deal with issues. Ryanair scored two stars (out of a possible five) for each category, producing an overall rating of 54 per cent, comfortably the lowest of all 100 firms – TalkTalk, the mobile phone provider, and NPower, the energy supplier, came joint 98th with 59 per cent.

“Passengers appear to agree with Ryanair CEO Michael O’Leary’s open admission that price is a priority over customer service,” said the Which? report. “One said of his recent travel with Ryanair that he found it: ‘aggressive and hostile towards customers. Staff are rude and unpleasant’. Another flyer related their poor in-flight treatment, lamenting ‘rude air stewards who make you feel like a nuisance rather than a customer’. Others are unwilling to be treated badly, whatever the savings. ‘I now prefer to pay £50 extra for my flights and to be treated like a human being,’ concluded one of their experience.”

A Ryanair spokesman responded in typically dismissive fashion. "We surveyed over three million passengers on the Ryanair website last night," he said. "Only two of them had ever heard of Which? and none of them had ever bought it or read it."

"Ryanair’s survey conclusively proves that Which? magazine hasn’t got a clue about what air travel consumers actually do, because they’re too busy booking Ryanair’s low fare, on-time flights to waste time filling in Which? magazine’s tiny surveys.”

Next...

Ryanair's O'Leary to end 'abrupt culture' says the BBC http://www.bbc.co.uk/news/business-24177834

Ryanair is to reform its "abrupt culture", chief executive Michael O'Leary says.

Speaking to shareholders at its annual general meeting, Mr O'Leary said: "We should try to eliminate things that unnecessarily" annoy customers.

Europe's biggest budget airline warned earlier this month that profits for the year may miss forecasts.

Mr O'Leary was responding to shareholder concerns that customer service issues were hitting sales.

In the long run, “Bad Customer Service = Bad Profits”?

Strategy Games - Why Is Strategy So Difficult?

Robert Craven argues that the failure of many strategies lies in the failure to understand whom the strategy is for.

Strategy is a subject that people like to refer to, but often they don't really know what they mean by the word. We should not be surprised that many people find it difficult to actually think strategically when they are unclear about what strategy is all about.


Commonly asked questions include:

• Does our company have a strategy? Is it the right one?
• What exactly do we mean by a strategy?
• How should we go about designing our strategy?

Before talking about the actual 'doing' of strategy, let's be clear about some of the 'strategy' issues, and why strategy can go wrong. There is a requirement to do things in a different way from the old way. After all, if you keep doing what you have always done, then you will keep getting the same (not better) results; and to expect a different result from doing the same thing is a definition of insanity!


THE PROBLEM

The main complaints about the strategy process are:

• There is little agreement about what strategy actually is and what it does
• It gets lost, uncoordinated, frustrating, messy and unfinished - there is lack of focus and clarity
• Most people involved either question their own ability to contribute, or, arrogantly dominate and suffocate the process
• No SMART goals are achieved (SMART is an acronym that is used to remind us that goals should be specific, measurable, attainable, realistic, time-based)
• Fear of the future, combined with fear of failure, makes the team behave like reindeer freezing on the road when blinded by the headlights of the oncoming lorry
• Management 'speaking in tongues' parading as science - the tools are not helpful - they are superficial, confusing and too theoretical.

In a nutshell there are three reasons why strategy does not work.

WHY STRATEGY DOESN'T WORK #1 TYPES OF STRATEGIC THINKING

Managers often fail to differentiate between business unit strategy and what is referred to as 'corporate centre' strategy. The reason for this is that business schools and consultants normally talk about big business/corporate centre strategy when they are talking about strategy.


Business unit strategy is for single product/market players or 'strategic business units' of conglomerates; corporate centre strategy is for conglomerates that are planning the future and the relationships between the centre and its various subsidiaries. The distinction is crucial; this is where so much of the confusion comes from.


To misquote Orwell, 'business unit strategy, good; corporate centre strategy, bad'.


Business unit strategy, good - it gives you insights into where and how you need to do things differently. It helps you to see the business through the customers' and through the competitors' eyes. Both today and tomorrow. It shows you your strengths and weaknesses and where and how you should be expending your efforts. We will come back to this later.


There are instances where corporate centre strategy is beneficial. Examples include where there are global economies of scale, brand benefits, regional or global economies of scale, overcoming technological barriers and so forth. You only need to think of Apple, Coca-Cola, Microsoft, Sony, and Toshiba. But this type of thinking is pretty irrelevant if you are running your own business, or a business unit employing say 500 people


Moreover, for the multinational or conglomerate, the ability of the centre to generate strategies that have little to do with the needs of specific business units is awesome. Couple this with the centre's (and the board's) lack of contact with the territories and you can see the potential for disastrous decisions. Corporate strategies constantly frustrate and bamboozle the managers of regional business units.

WHY STRATEGY DOESN'T WORK #2 NO CLARITY OF PURPOSE

Put simply, business strategy is planning while being aware of the business environment. So, who should be involved? Consultants? The Senior Team? The Whole Team? Well, this depends on the level (and size) of the organisation that you are talking about.


Strategic thinking is not the same as strategic planning. In fact strategic planning is an oxymoron like 'friendly fire', 'fun run' or 'fighting for peace' - planning and thinking are totally different activities requiring different skills. Strategic thinking is the role of the strategy team - those beneath them should carry out the (strategic) planning.


Strategic thinking must be used to improve understanding of the environment and the options available to the business. Any analysis must help the decision-making process. There is no room for using models that are simply intellectually attractive. The task at hand is to shed light on options and directions and find evidence to support decisions about the future.

WHY STRATEGY DOESN'T WORK #3 THE USE OF TOOLS AND THEORIES

At the business unit level, the tools of analysis are relatively straightforward. The only real barriers to a successful strategy are intimidation by the so-called 'professionals' and their jargon. Rogue management consultants have been known to blind their clients with science; BCG matrices, Value Chain Analyses and differential equations bully the innocent client into agreeing to a strategy that they may not fully understand or appreciate but are too timid to admit their ignorance. Despite this, the manager may well understand their business and industry with a clarity and perspective that the models are unable to detect.


It is most notably at the corporate centre level that the jargon takes over and so often the process turns into Frankenstein's monster - you have a much more sophisticated list of tools (product portfolio analyses, discounted cash-flow, BCG matrices, three-dimensional modelling). A whole industry has grown up around corporate strategy - it is here that the business school hype runs amok - 'Long live the emperor and his new clothes!'


More complex is almost always worse, and yet the corporate centre has a propensity to complicate things!


Most of the models of analysis, some good and some bad, are over thirty years old; few people in business honestly know how to use them effectively and appropriately. For today's entrepreneurial business, the relevance and value of the models must be questioned.

THE SOLUTION

In order to work, the whole strategy process must be effective and practical; highfalutin theory is not the order of the day! Participants need to start the process with no axes to grind.


Strategy can be likened to 'seeing'; that is seeing behind, above, below, beyond, beside ahead and through the future. To be effective, strategic thinking tools must satisfy the following conditions:

1. Reflect the business needs of today and tomorrow
2. Start with the customers - be rooted and immersed in market understanding
3. Be Practical (not theoretical)
4. Be Specific (not superficial)
5. Encourage a longer-term view
6. Be Measurable.

SO… WHO SHOULD BE DEVELOPING YOUR STRATEGY?

The right people rarely work on strategy development.


For business unit strategy, each of the operating managers should be involved; for corporate Centre strategy, the Chairman, CEO and a few close colleagues should be involved. In both instances, a cross-section of operational managers should be involved to influence, double-check and approve the thinking process.


The next-best solution is to involve a firm of management consultants. You must choose carefully otherwise they will bring over-complex tools and theories. You need to be able to stop them from doing that by giving them a clear brief of what you want. A good relationship will pay dividends as they can facilitate the process or give you the right tools to work out the way forward.

WHERE TO START? A PHILOSOPHICAL DEBATE

If strategic thinking is a creative process then the best place to start is with where you would like to be, and work backwards to where you are now. Then you can work out how to get there.


If strategic thinking is a systematic analytical process then start with where you are now and work out where you think you can get to. The snag with this second approach is that constant use of linear thinking stifles your creativity. If you believe that 10% growth in sales is realistic then you will plan away the idea of faster growth and the need for more unusual approaches to achieve a truly stretching goal.


In reality, you need to combine both approaches.

HOW TO DO STRATEGY - AT THE BUSINESS UNIT LEVEL

You need to know what target market groups (segments) you work in and how profitable they really are. Only then can you focus on what you do effectively and cut out the deadwood.


These are the crucial questions that you need to be able to answer:

1. What business are you in?

This question is not as straightforward as it appears - what business do your customers and competitors believe you to be in? And, what do you believe your business to be. Manchester United is no longer just a football team; the merchandise side of the business means that branding is more important than ever. Starbucks is not simply selling coffee; it is selling an attitude to life.


2. Where do you make the money?

What parts of your organisation contribute the most value to the whole? Where is the real value being added? What parts of the industry generate the highest profits? This follows on to a series of external issues:

• How good are your competitive positions?
• Is this a good industry to be in?
• What do your customers think about you, your product and the market?
• What do your competitors think about you, your product and the market?

The external analysis can be followed by internal analysis so that you can establish:

• How do you raise profits quickly?
• How do you build long-term value?

HOW TO DO STRATEGY - AT THE CORPORATE CENTRE LEVEL

While this article is not aimed at the big corporations, it is useful for readers who work in them to be clear that corporate centre strategy is flawed because the centre rarely represents or reflects the needs of the outposts. The centre has a life of its own. Few corporate centres are small. Most do not add enough value to justify their cost. Most destroy more value than they add.


Corporate centre strategy must be approached with a great deal of scepticism and caution.

CHECKLIST - STRATEGIC THINKING

• Be clear about what you want to achieve from the strategy process. Is it business unit or is it corporate centre strategy that you are working on?
• Decide your goals and be prepared to pay the price - after all strategy, by definition, is about trade-offs.
• Do not undertake 'strategisation' unless a system is in place that allows strategy implementation - otherwise the whole process is counter-productive.

It is imperative that the strategy process is not seen in isolation of other processes. Strategy is not a 'black box', a one-off activity, carried out at annual awaydays - to think strategically is an art form.

Robert Craven©2001, Business Executive Magazine.

- See more at: http://www.robert-craven.co.uk/article-why-is-strategy-so-difficult.php

You Think The Recession Is Holding Back Your Growth?

In research, growing businesses say that market conditions would have the greatest impact on inhibiting their growth. It does not surprise me that businesses cite market conditions as the key influencer of growth but this does blur some of the key issues around the subject of growth. Research, as well as an intuitive feel, consistently suggests that there are several key factors that inhibit the growth of a business. No one factor dominates but rather a combination is what the entrepreneur normally cites. The four key issues are: Market conditions Staff/recruitment issues Cashflow, and Competition Put another way; finance, labour and market issues. However, the growth question provokes some other arguments about growth that need to be aired. One. Of course market conditions impact on business growth; in a growing market, your business can grow without gaining market share. Think of the market as a balloon; if your market share is like a circle drawn on its surface then your area (turnover) will grow as long as the market grows - imagine blowing air into the balloon and how the circle will increase with the increase in size of the balloon. Two. If you ask successful people to look at what held them back in the past then you get another answer entirely. After the event, successful people do not dispute the importance of finance, market and labour issues. Interestingly, these are seen as external factors. Research such as the LBS Pulse Report concurs with Tenon that the number one external factor holding back a business is, to be specific, market growth. BUT... the key internal factors cited are lack of innovation and the thorny issue of willingness to accept the price you have to pay for the growth. The plot thickens. Here is the crunch... the core of the debate about growth and what holds it back... the 'winners' claim that the ability to grow is dominated by the internal factors (lack of innovation, fear of diluting ownership, aversion to debt). So, to grow, you must possess conducive internal factors that dominate the hostile external factors. At the heart of this argument is the price of growth... are you prepared to accept the loss of managerial and/or financial control? If you are not, then do not pass 'GO' and do not collect your 200 pounds! Three. Rather than focusing on poor performance let's ask 'What is it that the really successful businesses do?' The successful are obsessed with: Where do we want to be in, say, three years' time? i.e. strategy - planning while being aware of the outside environment What is it that our clients really want, and how can we get people to buy it? i.e. marketing How can we work together? i.e. teams and people. This holy trinity of strategy, marketing and teams (underpinned by financial understanding) is an obsession that I find in all successful fast growth clients.  These clients don't look at market conditions alone, shrug their shoulders and give up trying - they are constantly measuring the outside environment and constantly adjusting their game to suit the conditions. It is probably changes in the outside world that will 'get you' in the end.  Often imperceptible changes in the market place change the landscape that you are working in and you might not even notice the changes. It is the ability to recognise and respond to change that separates the exceptional from the average business. So, when asking the question 'What inhibits growth?', we cannot expect a simple answer. I agree that the number one issue is market conditions (when each participant can only have one choice). However, the reality is more complex.

What David Can Teach Goliath – what ‘small’ can teach the ‘big’ businesses

What David Can Teach Goliath – what ‘small’ can teach the ‘big’ businesses


There is a plethora of articles and blogs about what small businesses can learn from large businesses but very few that turn the phrase on its head. So, what can large businesses learn from small businesses?

As usual our first dilemma is one of definition.

For the purpose of this article we need to recognise that there are small businesses which are essentially lifestyle businesses and there are small businesses which are being grown to be sold or ‘harvested’ (entrepreneurial businesses).

All the ‘motherhood and apple pie’ talk about small businesses revolves around attributes that most large businesses tend to lose with time and size:

• Passion for the product
• Led and run by the founder
• Close to the customer
• Tightly-knit
• Innovative, responsive and flexible
• Close to the marketplace
• No silos
• Able to make and create the rules.

The flipside of this is:

• Too much in love with the product
• Founder has too much control and becomes the bottleneck
• Lack of professional management and reporting systems
• Myopic
• No career ladder
• Doesn’t ‘do the research’ and makes (knee-jerk) decisions without the evidence
• Doesn’t have the basic infrastructure (legal, HR, IT, cash reserves, R and D, resources)
• Doesn’t have the network, scale, contacts.

For many, the reality of running their own business is rather sad. One single ‘entrepreneurial seizure’, those immortal words “I could run this better than they do”, sends the intrepid ‘entrepreneur’ on a desolate journey. In the naive hope that they will become the next Richard Branson, these people have actually started banging the nails into their coffin! In a belief that they now have the joys of wealth and freedom, nothing could be further from the truth.

Armed with puppy dog enthusiasm, blissful ignorance and the messages from one too many get-rich-quick gurus, our hero sets off. The reality is that, armed with no real business experience, our protagonist is now dependent on suppliers, staff, customers, banks and a belief that things will be OK. Often it is not.

There is, however, another version of this story. Our protagonist this time is more of an entrepreneur: they spot opportunities, gather together the resources and make something happen. This is a rather more sophisticated approach to the business of business than that of our, often hapless, lifestyler.


So what can Big Businesses learn?

Big businesses (even with relatively recent beginnings) spend millions on training and consultancy to revive or instil some of the characteristics their nimble but smaller relatives possessed: effective teams, positive morale, keen attitude, flexibility, people focus, listening skills, communication, commitment, engagement... these are the buzz words in each new initiative which will supposedly sort the future. The stereotype smaller business has all this in spades, already!

Smaller businesses, by their nature, by their place in the food chain are more nimble. Jobs do actually depend on success. There are rarely deep pockets or the possibility of being moved sideways if things get tough. When the money runs out, that is it!

While I am speaking in generalisations, there is this sense of nimbleness that the big business doesn’t just yearn for, but knows it needs to find, to compete in this furiously competitive world. What would a car manufacturer or a telecoms company give to have one-tenth of the passion or mojo that a small upstart would have.


Can Goliath work with David?

The old-world view was that the big boys were not even interested in small businesses. With internet explosion came the (naive) idea that the Davids could destroy and replace the cumbersome and slothful Goliaths; meanwhile the Goliaths continued to believe that they could destroy any potentially threatening minnows. Next the big boys tried to buy out the minnows and bring them in-house. That didn’t always work.

So, now we have a world where the big fish and the minnows can, and often should, work together. It is time for David and Goliath to work together. The combination of passion, excitement, innovation, free-thinking of the minnow, combined with the resources, funds, footprint, network, partnerships, access to market of the whale makes a fascinating combination.


Can Goliath learn from David?

Yes.

Despite all the upside of being part of a large multi-national, there are so many things that they just don’t get. They just need to look at sheer numbers that emigrate to work in start-ups (with all the inherent risks) to start to see just the tip of the iceberg of discontent and apathy that their workforce would rarely admit at work.


So, what is to be done?

Both parties (Davids and Goliaths) should engage more because they...

• have a lot to learn from each other (formally or informally)
• can exploit each other’s strengths to their own advantage (a ‘win-win’ situation).

The untapped potential is vast. The missed opportunity is vast. Time to pick up the phone?

Would You Like To Increase Your Sales And Profit?

The dumb question most people say 'yes' to is: "Would you like to increase your sales and profit?";  And, the question most people nod their heads to is: "Are you great at delivering your service but less sure about how to attract more clients?"  If you want your business to succeed, then you need to know why people should buy from you when they can buy from the competition. Answer this question with confidence and you will be able to grow your service firm. It will become almost inevitable. You need to find out the tools and techniques that you need to transform your often flaky, dream-like plans into actions and measurable, tangible results (= profit).  For instance, do you know how to: identify the unique benefits of your service?  discover the most effective sales method?  connect with potential clients?  win new business? get ahead of the competition? Stop working too hard for too little reward. Start making your service business work for you. Can this be done? Yes. Is it just marketing hype? No. Why are you not getting the results that you want? I'll give you a clue.  Take a look in the mirror!