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The One Year, Thirty Minute Challenge :: Week 31 :: Project Management :: Framework

Every organization, from the solo practitioner to the multi-billion-dollar, publicly traded company has projects. It might be installing new enterprise software, building a branch office, or introducing a new manufacturing process. And, if you have projects, you need a solid project framework.

In this week’s One Year, Thirty Minute Challenge, I’m going to give you factors for successful project management then introduce a simple project management framework. If you don’t have an existing project management tool, I encourage you to use your thirty-minute exercise to customize this framework for your organization, then try it out on your next project.

Successful project management is about the stewardship of four resources – time, materials, money and people. Materials can take the form of a new software package or a pile of lumber, but most always represents an input that must be transformed during the project. People can take the form of employees, contractors or vendors who must be aligned, informed, and coordinated during the project. But only one of the resources is the most important – time – because you can’t make any more of it. There’s always a chance to earn more money, procure more materials and engage more people, but you can’t manufacture any more time. Consequently, time is the primary driver in project management. The crux of good project management is coordinating transformation activities (typically people + materials + time), so they happen on schedule, with sufficient quality, on budget, and in the right order. A critical piece of project management is understanding predecessor and successor activities. Predecessor activities are those that must either be started or, in some cases, completed before the next activity begins. Successor activities are those that are dependent on a predecessor activity. There are a host of software tools that can help you plot all transformation activities related to a project in a visual format and be a repository for all project related materials (documents, drawings, checklists, contacts, communication). The level of complexity and cost varies from tool to tool. No matter which one you choose, it can help you keep all the balls in the air. Here’s a list curated by The Digital Project manager. https://thedigitalprojectmanager.com/best-project-management-software/

Let’s jump in to this week’s exercise.

Here’s a simple project worksheet I’ve developed. Before you begin a project, I recommend you engage in, at least, this level of justification for the project

Project Title ___________________________________________________

Project Sponsor ________________________________________________

Project Team __________________________________________________

Project Cost:   One Time _______________  Ongoing _______________

Reason:

Maintenance of Current Operations _____    Cost Saving _____

Increased Revenue _____                                    Compliance _____

Improved Customer Experience _____            Improved Employee Experience _____

If Increased Revenue or Cost Saving, what is the amount? _______________

How does this project support the mission of the organization?

_____________________________________________________________

Briefly describe the project

_____________________________________________________________

What activities are required before the project begins (research, permits, etc)

_____________________________________________________________

Project Plan

  • Resources
    • People (employees, vendors, contractors) _____________________________________________________
    • Money (costs and payment schedule) _____________________________________________________
    • Materials (materials to be transformed and materials needed for transformation activities) _____________________________________________________
  • Timeline
    • Start date _______________
    • Target completion date _______________
    • Milestone events and dates _____________________________________________________
  • Predecessor Tasks and Successor Tasks (a successor task can also be a predecessor task for another activity) ___________________________________________________
  • Possible impediments __________________________________________
  • Training ___________________________________________________
  • What does successful completion look like? ____________________________
  • How will progress be reported? ____________________________________
  • To whom will progress be reported? _________________________________
  • Attach financial justification (Payback, net present value, internal rate of return)

Project Manager ____________________________________________________

Approved __________________________________________________________

During your exercise, review the available project management tools. Many include free trial periods, so for the first project scheduled after this One Year, Thirty Minute Challenge exercise, chose one or two that seem like a good fit for your organization and set up your project in both of those tools. Review the initial results with your project team and choose one and use it for the project.

Each project should have a project manager. This person’s job is to be cheerleader, communicator, coordinator, butt-kicker and problem solver. They should have a deep interest in the project itself and be able to articulate why it is important to the company. They should have not just the responsibility for the project, but also the authority to run the project team, manage project transformation activities, and spend from the project budget without being second-guessed.

The project manager should have a solid communication plan so that everyone on the team is always in sync and everyone else in the organization is up-to-date on the project’s progress. Project status should be communicated to the team at least weekly and to the rest of the organization at least monthly.

The project manager’s job is to drive the project to completion. When problems come, as they surely will, it is the project manager’s job to make course corrections, marshal the resources of the team to resolve the problems and refocus the team on project completion – all the time, keeping the balls of time, materials, money and people in the air.

After the end of every project, there should be a project post-mortem where the project itself is evaluated, the project methodology is evaluated, and the project leader and team are evaluated. The goal of this post-mortem is not to assign blame for anything that might have gone wrong, but to refine the methodology and improve the team for the next project.

If you begin to build a project management framework using these initial guidelines, you’ll be well on your way to effectively managing projects in your organization.

The One Year, Thirty Minute Challenge :: Week 30 :: Marketing :: Messaging

If there’s one business discipline that gives me indigestion, it’s marketing. When I sit down to write about strategy or operations, the words flow freely, but when I have to write about marketing or, even worse, prepare marketing materials for my own business, I feel like my IQ drops 30 points.

I know the discipline is vital, so I’ve enlisted the help of people I trust. You’ll find my Kindle full of books from Donald Miller, Seth Godin, Bernadette Jiwa, Jay Baer and Jonah Berger. People who can help me decide what to say and how to say it. You’ll find my recommended reading list at the bottom of this post.

This week’s One Year, Thirty Minute Challenge is devoted to the most rudimentary of marketing disciplines – messaging – What do I say when I talk to customers? I’m afraid we devote too much attention to branding (logo design, colors) instead of the real words we say to the people we desperately want to talk to.

So, my goal for you in this week’s thirty-minute exercise is to use the criteria below to evaluate your communication with current and potential customers. Check your website, email campaigns, social media posts and written materials. These are the some of the most crucial truths I’ve gleaned from the smart people listed above.

Be brief – People are busy. They scan instead of reading. You’ve probably got 5-10 seconds on your website, 1-2 seconds for an email subject line and 3-5 seconds on a social media post to convince someone to go deeper. On your website, succinctly state the problem you solve, how you solve it and how the customer’s life will be better after consuming your solution. On email and social media, quickly say what the email or post is about and why they should continue reading.

Be clear – Don’t be cute, be crystal clear. A clever play on words might be tempting, but a solid message is always better. Don’t make the reader work hard to figure out what you’re trying to say.

Be valuable – Give value in every interaction. Let current and potential customers know what kind of information and work they can experience when they interact with you or your organization. Give them a taste of the value that will be returned for their investment of time and money.

Solve a problem – Current and potential customers don’t really care about you; they care about themselves. How will you resolve an existing issue or make their lives easier, better, or happier?

Be Mick, not Rocky – If you’re listing the top feel-good movies of all time and Rocky doesn’t make the list, you’re doing it wrong. The film about a struggling boxer, Rocky Balboa, who finally gets a shot at the title is Hollywood gold. But the pivotal character in the movie isn’t Rocky, it’s Mick, Rocky’s coach, mentor, friend, butt-kicker and confidant. In your marketing, be Mick the trainer, so your clients can be Rocky the hero.

Be empathetic – Let current and potential customers know that you “get it”. You understand their struggles, their frustrations, their obstacles, and their aspirations.

Be trusted – After you’ve shown that you understand their problems, demonstrate that you know how to solve them. Your proof might be in the form of years of experience, testimonials or case studies.

Be patient – Don’t be the weird person who discusses how many children he or she wants on the first date. Take your time, build trust, ask more questions, and learn everything you can about current and potential customers. Earn the right to heard.

Be transactional – In contrast to the previous question, don’t get stuck in the “friend zone”. Let potential customers know that the goal of your interactions is a paid engagement. Give potential customers a chance to begin the engagement with early and frequent calls to action. Be ready when they’re ready.

Be aspirational – Paint a picture of what their life will look like after using your product or service. Will they have more free time, more money, more security, more piece of mind, happier employees, better data enabling them to make better decisions?

If you’ll critique your communication using just the truths above, you’ll remove some clutter and make your message easier to read and easier to act on.

If this whets your appetite to go deeper on your marketing, you’ll benefit from these books.

Donald Miller, Building a StoryBrand

Donald Miller, Marketing Made Simple

Seth Godin, This is Marketing

Bernadette Jiwa, Marketing: A Love Story

Jonah Berger, Contagious

Jay Baer, Youtility

 

The One Year, Thirty Minute Challenge :: Week 29 :: Governance :: Decision Making

Over the course of a day we make hundreds of decisions. Many, in the great scheme of things, are inconsequential – blue shirt or yellow shirt, mustard or mayo, checkout aisle 6 or 11. However, when we’re at work, some of our decisions might have a bit more impact – this new region or that new region or both, this new employee or that new employee, abandon this product or invest a bunch of money into marketing it for another quarter or two. These types of decisions affect the lives of people, the trajectory of our company and the amount of money we make or lose in upcoming quarters.

So what if we could get better at decision making? Let’s agree up front that every decision carries risk. We can’t “good decision” our way out of every fork in the road and remove risk. Most of us fall victim to, what those who study decision-making call, “resulting”. We believe if we get good results, we made a good decision. If we get bad results, we made a bad decision. Let me illustrate. The odds of winning on any given number at the roulette table are 1 in 37. If you walk up to the table, place your chips on 5 and the little ball goes into the 5 on the wheel, you might believe you made a good decision. In reality, you made a bad decision (the math was against you) but got a good result. Conversely, if you hire a salesperson with experience in your industry, stellar credentials, a history of strong sales and equip them with every resource they need to sell your product and they fail miserably, you more than likely made a good decision, but got a bad result. Just one of the foibles that we, as humans, struggle with as we evaluate our decisions.

So how do we up our decision-making game? In this week’s One Year, Thirty Minute Challenge, I encourage you to spend your thirty-minute exercise piecing together a decision-making framework that you’ll use when your organization is faced with a decision. I’ll give you some thought starters and you can grab what works for you and add your own.

  • What empirical data can we bring to bear on the decision? It’s easy to fall in love with people, products, places and processes. Can we put our hands on data that will give us objective information – sales numbers, number of defects, number of returns, sales by location, sales by hour, sales by salesperson, production per assembly line, bounce rate for the landing page.
  • How can I remove my ego from the decision? It’s tough to divorce yourself from a person or project that you’ve poured yourself into. In reality, you are not what you do. You still have worth and you’re still smart, even if the object of your affection is looking questionable. Recognize this for yourself and recognize that others in the organization will have similar feelings towards the people and things they’ve invested in. Step away – and help them step away. Two more things on ego. First, we love our own ideas and struggle to see how they might have a couple of holes. Second, we love information (both empirical and anecdotal) that supports our position and tend to discount information that opposes our position. Be on guard against both of these things.
  • Enlist the collective genius of the people most affected by the decision. If I could list the most frequent management screw-ups, this would be close to the top – people not familiar with the intimate details of the work, trying to improve the work. In reality, the people who do the work are most qualified to improve it. Get input from employees, customers, and vendors – whoever can help you assemble the largest body of knowledge on the subject about which you are making a decision. One important thing – an outside perspective does help because people are occasionally so blinded by the forest, they can’t see the trees. But I’d err on the side of getting lots of input from those in the know.
  • Get help from someone who’s made similar decisions. The Israelite King Solomon said, “There’s nothing new under the sun.” True when he wrote it 3000 years ago. Still true now. Find someone who’s faced a similar situation and pick their brain.
  • Propel your self forward and look back. As much as you can, transport yourself to the end of every fork in the road (all the possible decision options) and look backward. Things might seem much clearer – after all, hindsight is 20/20. What would have to go right to get here? What could go wrong on the way to here? Can I live with the consequences of the things that might go wrong? What are the probabilities for each of these things going right or wrong? Conduct a pre-mortem – in your head, jump to the end of the decision, assume it failed miserably then ask, “What did we screw up that caused this?”
  • Would you put money on this? I wish I could claim credit for this idea, but it comes from Annie Duke’s brilliant book, Thinking in Bets. She encourages her readers to ask themselves, “would I bet on this?” This moves the discussion from theoretical to financial. Before we bet on something, we contemplate the probability (run or pass, cover the spread or not cover the spread). Our emotions (we love our team and hate the other team) are eclipsed by the reality of what could happen to our wallet.
  • Find a contrarian. Seek out someone to poke holes in the decision you’re narrowing in on. They can be inside or outside the organization. Encourage them to pick it apart personnel-wise, strategically, operationally, and financially.
  • Festina lente. Caesar Augustus adopted this motto – Make haste, slowly. Make decisions quickly but deliberately. Don’t fall victim to paralysis by analysis, but don’t fire from the hip. Good decision-making is thoughtful and complete but with a bias for action.

 

Following these steps, or any others for that matter, won’t result in perfect decision-making. There’s no such thing. We’ll still be duped by the poor decisions that have good results (thinking they were good decisions), puzzled by the good decisions that have bad results and feel smug about the good decisions that yield good results. Our best hope is that we optimize our methodology.

The One Year, Thirty Minute Challenge :: Week 28 :: Governance :: Change

The Greek philosopher Heraclitus said, “Change is the only constant in life.” True when he lived 2500 years ago. Still true now. That being the case, we ought to be pretty good at it. But we’re not. Inevitably, when we introduce change into our organization, it’s a struggle.

We like what we know. It’s comfortable and we know what to expect. So when change comes, for a good percentage of us, we dig in our heels. There are a small number of change addicts out there who embrace it, but they are few and far between.

Joseph Schumpeter (1883 – 1950), an Austrian economist who immigrated to the US and eventually became a US citizen, made a compelling case for change in the workplace. In fact, the change he advocated for was so far reaching, it required periodic “destruction”. Schumpeter introduced the idea of creative destruction in 1942. He taught us that if we are making money, competitors will work to find alternative ways to meet those same customer needs so they can make that money instead of us. So, to succeed for the long-term, we must be ever vigilant to look for ways to improve on our work and do a better job of meeting customer needs, sometimes requiring that we blow up what we’ve done and rebuild it. For a business, it’s the ultimate change – shoot the horse you’ve been riding and get a new horse. Think about the evolution of home entertainment over the last 30 years – VCR to DVD to BluRay to streaming services. Each change in technology required companies to abandon formerly revenue generating products and build new, different ones. Before we move on to this week’s One Year, Thirty Minute Challenge, let’s make a quick list of companies who were confronted with a mandate for creative destruction, refused and subsequently died or are dying now – Kodak, Blockbuster, AOL, Blackberry, MySpace, Xerox, Polaroid and almost every newspaper in the US.

The goal of this week’s exercise is to create a plan you can utilize when you’re introducing change into your organization. That change might be as sweeping as replacing a product line that has generated the bulk of your revenue for the past 10 years, as far-reaching as replacing an enterprise-wide software system or as personal as changing the health insurance provider in your benefit package. Use the though-starters below (listed in no particular order) and supplement with your own to create a change management plan that will equip your team for the one constant – change.

  • Start with why – Change in an organization is never random. Explain the rationale for the change – previously unseen market conditions, changing customer tastes, under-performing vendors, software no longer supported, need new functionality, price, etc.
  • Explain that “here” is unacceptable – One of the most difficult things I’ve run across in introducing change into an organization (a regular occurrence in my work) is a longing for the status quo. The status quo sometimes is laden with emotion because it represents the world as designed by a beloved founder (many times a family member). When we introduce change, it seems like we’re dismantling the founder’s legacy. In reality, change often mirrors the work of the founder – who created the original product or service to meet the needs of the market. We are honoring their work by recalibrating for the needs of a new market. “Here” is never an acceptable alternative for a business. We must evolve.
  • Change is consistent with mastery – Everyone wants to be good at their job. As we become better at our craft, we change. We find new ways to do existing work. Introducing change gives us the opportunity to up our game and add new tools to our toolbox.
  • Change is consistent with lifelong learning – We encourage individual and team growth. Some change is evolutionary, some is revolutionary. When we introduce change into the organization, we add to our collective knowledge base which allows us to become more effective, efficient and serve customers more skillfully.
  • Invite people into the process – As much as possible, involve your team in every part of the change. For example, if you’re buying new enterprise software, don’t make it solely an IT decision. Invite users from every involved department into the evaluation, buying, implementation and training process. It will take longer, but employee buy-in will skyrocket.
  • Be vulnerable – The more complex the change, the more unknowns are out there. You, and other leaders in the organization, don’t know everything. It’s OK to say, “I don’t know” or “I need help”.
  • Be transparent – As change unfolds, be upfront about everything. When a vendor drops the ball, say so. If you decide to delay a portion of the project, don’t obfuscate and or make excuses. Trust will grease the wheels of change and trust comes from transparency and vulnerability.
  • Paint the picture of the future state – As a leader in the organization, it’s imperative that, as part of the “why”, you spell out the desired future state that will result from the change. How will the change make the organization healthier, how will the customer experience improve, how will the organization have better data for decision-making, how will employees be better trained or better equipped.
  • Be resolute – As I wrote this, I almost typed, “Be confident”. But in the context of changing the organization, being resolute is better than being confident. The commitment and subsequent actions to see the transformation through to the end is better than rah-rah speeches.
  • Seek and obtain sponsorship – Don’t lead alone during change. Recruit other leaders to join you in bringing change to the organization. Share the vision and project with those who can lead the charge with you. Focus on those who have the biggest stake in the transformation. They will bring along their teams and will influence those on adjacent teams.
  • Make a roadmap – Identify the beginning, milestones along the way and the end. Flesh out this schedule with activities, status meetings, status reports and the people accountable.
  • Communicate – If this list were in order, this would be close to the top. Communicate before, during and after every phase in the change process. Communicate information, progress (included milestones reached and missed) and the transformation already happening during the implementation of the change. I like the idea of appointing a scribe for the change process – separate from the change manager (project manager, CEO, consultant) and the other project sponsors.
  • Celebrate – When you reach the end and begin to experience transformation in the organization, throw a party. Celebrate those who did the work, the work itself and the impact you’ll have on the organization for years to come.

 

If you’ll use this week’s exercise to put together a change management toolbox using these ideas (plus any additional that you come up with), you’ll be ready to lead your organization through the inevitable, necessary changes that will make your organization ready for the future.

 

The One Year, Thirty Minute Challenge :: Week 27 :: Finance :: Lifetime Customer Value

I remember it vividly. I was a freshly minted consultant. It was one of my first engagements. The client’s business was growing quickly, but at the end of every month, he barely had any money left.

So, I did an individual profit and lost statement for every single customer. I did some quick math and calculated the percent of each revenue dollar (at his current volume) that went to cover fixed costs, then applied the remainder of that dollar to the variable costs associated with each individual customer. Not a perfect methodology, but it worked well for quickly flushing out the problem. Eureka – the lightbulb moment. For every revenue dollar from the client’s biggest customer, he was breaking even (the reasons why are interesting, but that’s another story for another day). The more this giant customer spent, the more my client “broke even”. We applied the same methodology to every other customer and even found a couple that he went backward on for every dollar the customer spent.

I’m a strong proponent for a P/L for every customer. I realize it only makes sense in certain industries, but if it works in yours, you should do it.

That’s not the topic for this week’s One Year, Thirty Minute Challenge, but that type of math is at the heart of this week’s exercise.

In many industries, a company is upside down financially when they first begin a relationship with a customer. The costs associated with marketing, advertising, selling, onboarding and servicing the customer the first time exceed the revenue from the customer’s initial purchase. Hopefully, just a few purchases in, the company is right side up and making money. In the course of calculating the acquisition and onboarding costs, the company should be projecting and making customer experience decisions based on the potential lifetime value of the customer. Loyal, happy customers, depending on the industry, could represent a lifetime revenue stream of 1000s, 10000s or even 100000s of dollars. Happy customers tell their friends. That can translate into even more lucrative customers.

This week’s One Year, Thirty Minute Challenge is to identify the factors that constitute the lifetime customer value calculation for your products and services.

Let’s jump into this week’s exercise.

  • What are the costs associated with acquiring a new customer? Depending on your industry, it could include annual marketing and advertising expenses (divided by the number of new customers each year), direct selling costs (lead generation, sales technology, sales salaries, sales commission), onboarding costs (customer training, installations services).
  • What does the customer pay for the product?
  • How many times will the customer buy the product? What is the range from the most sporadic customer to the most loyal customer?
  • What does it cost to produce each copy of the product? Depending on your product or service, it will include cost of goods sold, plus additional costs for packaging and delivery.
  • What does it cost to service already acquired customers? There might be customer service calls, technical support calls or costs for billing and collecting.

 

The math should look something like this –

Number of times purchased * purchase price

– number of times purchased * cost of goods sold (and additional costs)

– initial acquisition costs

– ongoing support costs

= total lifetime value

You’ll probably want to do some math that’s similar to what I did in my initial illustration to reduce the top line purchase price number to reflect the impact of fixed costs.

So, what do you do with this information once you have it? Here are some ideas –

  • What are the primary drivers of purchase frequency? How can we move less frequent purchasers to more frequent purchasers allowing us to spread the acquisition cost over more units and consequently increase lifetime customer value?
  • Can we draw any correlation between purchase frequency and acquisition costs or support costs? Does a more expensive acquisition equal a more frequent purchaser? If so, maybe the extra acquisition cost is desirable? Maybe there’s an inverse relationship between frequency and support cost – the more they use the product or service, the less they need support.
  • If a customer is ready to defect, what can we do to save them? Is there any correlation between defecting customers and their use of support? Based on their potential lifetime customer value, what can we afford to spend to keep them?
  • How can we leverage the personal networks of high total lifetime value customers to find more like them? They should be our best brand ambassadors.
  • Since high total lifetime value customers have demonstrated a willingness to spend money with our company, are there other products or services that might be of interest to them?

 

Once you’ve completed your exercise, begin educating your team on the importance of lifetime customer value. The first time that new customer walks through the door could be the beginning of a long and profitable relationship. Treat the opportunity that way.

The One Year, Thirty Minute Challenge :: Week 26 :: Culture :: Imperatives

“Culture eats strategy for breakfast.” This quote from Peter Drucker has surfaced multiple times over the course of the One Year, Thirty Minute Challenge. The best strategies and tactics are dead on arrival when they’re unleashed into a company with a toxic culture. This week, we’re focusing on culture for the third time in the series. During the course of a consulting engagement, I’m occasionally asked if I have a list of cultural imperatives, that is, attitudes, approaches to work and actions that should absolutely be baked into the DNA of the organization. I do and we’ve already talked about two of them in earlier One Year, Thirty Minute ChallengesMentor Mindset in week 4 and Lifelong Learning in week 16.

Here’s my complete list –

  • Vulnerability – The willingness to be transparent, admit weakness, and ask for help when we need it, is the shortcut to building trust inside the organization. Trust is the currency we spend with one another as we build an effective team.
  • Confront the Brutal Facts – Jim Collins reminds us that accurately assessing ourselves, our team, our products and services, our operations, our financial situation, and our competitive environment is mandatory. No rose-colored glasses allowed.
  • Sacrifice of Sacred Cows – No idea, no product, no service, no “that’s the way we’ve always done it” is out of bounds. Cling tight to core values. Nothing else escapes scrutiny.
  • Team First – When making decisions, the good of the organization comes first. Self-serving, self-promoting and personal advantage have no place in the organization. That must apply from the business owner down to the most recent entry-level hire.
  • Learning Orientation – The minute we think we know it all is the minute the countdown clock to the death of the organization begins. The organization will never grow beyond those who lead it, so we must continue to improve and learn – personally and professionally.
  • Mentor Mindset – Every team member is there for the good of the other team members. Owners and managers are committed to staff development, teaching not just the “what” but also the “why”.
  • Bias for Action – Doing is better than thinking or talking. Dive for the ball when a teammate drops it. If you promise to do something, do it.
  • Over-communication – Information is lubrication for the wheels of the organization. Tell what you know, quickly and completely. If owners want employees to make the same decisions they would make, employees need access to the same information the owners have.

 

Later in the One Year, Thirty Minute Challenge at least one of these will merit their own thirty-minute exercise, but that’s not the goal of this week’s exercise.

Let’s jump in.

This week, I want you create your own list of cultural imperatives – those attitudes, approaches to work, actions, and commitments to one another that must be present in your organization. Every organization is different, so your cultural imperatives will be different – but if they truly are imperative – i.e. you must have them baked into your corporate DNA or the organization will fail in living out its mission, reaching its vision and living up to its core values – you must identify them, live them out, talk about them, train on them and drive them deeper into the fabric of the organization.

One note before you begin – let’s quickly talk about how core values differ from culture. Core values are the shared, intrinsic beliefs of those in the organization. It might be a love for small business owners, a passion for camping, a desire to make learning available to those who previously did not have it or a commitment to treat client resources (money, house, car) as if they were your own. Someone who didn’t share those beliefs would continually find themselves uncomfortable in the organization. Everyone else would be rowing in harmony with the values and the outlier would feel like they were being dragged along.

Culture is how we live inside the organization. After we’ve been admitted by virtue of our shared values, culture is the mashup of our attitudes, approach to work, commitment to one another, commitment to customers and commitment to the ideals and health of the organization.

So, pull out your pen and notepad or open Evernote and begin. I’m giving you five questions as thought starters for identifying your cultural imperatives. Underneath each question, I’ve included some statements. Some are positive, some are negative, and others are neutral. I’m not asking if they apply in your organization. I’m tossing out examples of attitudes and actions that might be indicative of company culture. I’m wanting you to identify the cultural must-haves you want and possibly identify some current attitudes and behaviors you should jettison.

  • What are the non-optional behaviors in your organization?
    • Show up on time
    • Work hours are flexible as long as the work is done
    • Arrive at meetings on time
    • Always use all your vacation days
    • Never use all your vacation days
    • Work through lunch
    • It’s ok to disagree with a superior in a meeting
    • It’s never ok to disagree with a superior in a meeting
    • Answer an email no matter what time it comes
    • Only answer emails Monday through Friday
  • What are the attitudes you display in your interactions with one another?
    • There’s clearly a pecking order – the highest paid person’s opinion matters most
    • We have a true meritocracy when it comes to opinions – the best idea wins the argument
    • It’s ok to ask for help when I’m stuck
    • Departmental in-fighting is the order of the day
    • We work hard to work as a team – there’s no blaming – just solid cross-discipline problem solving
    • We’re good with ambiguity – we know there’s plenty we don’t know and welcome new situations that challenge the status quo
    • We’re committed to one another – my boss and coworkers have my back
  • What is your approach to work?
    • Good enough is good enough – if it’s not broke – don’t fix it
    • We strive for excellence in everything and nothing less is acceptable
    • We dive for the ball when someone drops it
    • If someone screws up – it’s on them – they bear the consequences of their own mistake
    • Good ideas can come from anywhere
    • All the good ideas come from our creative people – that’s their job
    • When we tackle a problem, we do our research – we want to know the truth even if it hurts – that the only way we can create great solutions
  • What is your approach to customers?
    • We take care of each customer like they’re the only one
    • Some customers are unreasonable and if they leave it’s ok
    • We’re always looking for new ways to serve existing customers and gain new customers – making our products and services better
    • We want not only our products and services to be superior, we want the customer to have a great customer experience
  • How do you view the organization?
    • I’m just a small cog in the machinery – doing what I’m told
    • I have a chance to leave my mark in the organization – my work matters
    • There’s more going on here than just making money – we’re making life better for our customers
    • All the company cares about is money
    • The people who lead the organization fairly balance the interests of employees, customers and shareholders
  • How do you communicate in the organization?
    • There are lots of islands of information
    • There are single points of failure in the organization – people, who alone, know specific information or how to do that job
    • Information flows freely from the top of the organization down
    • Information flows freely from the bottom of the organization up
    • Some conversations are off limits

 

After you’ve worked through the questions and have your own personalized list of cultural imperatives, sleep on it for a day or two and review the list. What did you miss?

Then roll out your list to the leaders in your organization. Does it describe the kind of place they’d be proud to work? If so, why? If not, what needs to be tweaked and why?

The implementation merits its own One Year, Thirty Minute Challenge and that will come later, but knowing the kind of workplace you’re after is the right place to start.

Here’s a sneak peek on implementation. Once you have your culture described, how do you codify it? How do you live it out? How can the leaders in the organization model it? How can you recognize and reward it? How can you extinguish attitudes and behaviors that don’t fit? How can you reinforce it in one-on-one and group training? How can you reinforce it in day-to-day work interactions?

The One Year, Thirty Minute Challenge :: Week 25 :: Operations :: Processes

If you want to be tied to your desk, be forced to solve every problem yourself, never enjoy a day off and worry constantly about whether or not work is done the way you want it done, ignore this week’s One Year, Thirty Minute Challenge.

Creating processes is the key to delivering a great customer experience, ensuring quality, scaling your business, decreasing mistakes and defects, empowering employees and increasing velocity.

New business owners struggle with early hires. To the detriment of the organization, they often hire people “just like them” so they can feel confident that the work will be done just like they would do it. The better alternative is to create detailed processes for everything so that every new hire, as they follow the processes, can do the work just as the founder intended. Then, as new talent is added to the organization, those with different skill sets, personalities and gifts can add new strength to the organization and bring increased clarity and refinement to the processes.

Let’s quickly clarify the distinction between processes and policies. Processes are for those tasks where there is no wiggle room – the way we mass-produce widgets, the way we pay a vendor invoice, the way we complete new employee documentation. Policies are for those tasks where there might be some gray areas – when do we give a refund, when do we allow a reservation to be cancelled without a cancellation fee, how many bereavement days do we allow when an employee’s family member dies. Processes are like railroad tracks – you can’t veer at all from the track without negative consequences. Policies are like guardrails – if you drive anywhere between them, you’re safe. With processes, follow the letter of the law. With policies, follow the spirit of the law.

Back to this week’s challenge. In thirty minutes, you won’t be able document all the vital processes in your organization. So, in this week’s challenge, we want to construct the framework that you’re going to use to create your process documentation. For processes to be most effective, they must be complete and have sufficient granularity for those who have to follow them.

Here are some suggestions for putting your process documentation together –

  • Why does this process exist? What is the endgame? Is it part of a larger task (for example, if this is the process for invoicing a customer, how and where does it fit in the larger task of obtaining, processing, and filling a customer order)?
  • Who is responsible for this task? Who is the backup person if the primary person is unavailable?
  • What is the requisite knowledge for this task? What is the requisite experience for this task? Where can that knowledge and experience be obtained.
  • If the person responsible for this task has a problem or question, who do they ask?
  • What resources are required for the task? If software is required for the task, who adds new users or assigns privileges? If there’s a software problem, how do you get technical support? If equipment is required, where is it located? Who provides support if the equipment breaks down? If materials are required, where are those materials stored? What vendors supply those materials? What is the process for reordering those materials?
  • What are the steps in the process itself? Describe the steps in detail, including why that step is done? As you’re documenting the steps, be especially sensitive to the things that are done by instinct or that “everyone knows”. Make sure that even the most intuitive, well-know and obvious things are included in the documentation. For example, if the last step is to drop something in the mail slot, spell out the location of the mail slot.
  • Who is notified when the process is completed? How are they notified (even if they are notified automatically via software)? What do those people do with the notification after they have received it?
  • How is completion of the process measured? Are the number of widgets manufactured counted? Is the insurance claim reviewed for accuracy? If so, who is responsible for the tracking or auditing the process? How do they give feedback or scoring to the person or people who did the work?
  • How is the person executing the process invited into the improvement of the process? How can they question the process or recommend changes?
  • Where is the most updated copy of the process stored (paper, shared drive, collaboration software (Slack, Microsoft Teams, Basecamp, etc)? How are any “remote” copies of the process updated when changes to the process are made? How are changes to the process rolled out? What is the training mechanism? (demonstration, checklist, class, video, podcast, collaboration software)

Use these suggestions, then add and customize to create your own framework for documenting processes. Then, beginning with the most critical value creation activities, work your way through all the processes in your organization.

When you’re finished, the goal is to create a “company in a box”. That is, if someone with the requisite knowledge and experience picked up your process documentation, they should be able to carry out all the core value creation activities in the company. And, perform the work just the way the founder intended (with the modifications and enhancements made by other smart staff members along the way).

The One Year, Thirty Minute Challenge :: Week 24 :: Business Continuity :: Operations

2020 has been the poster child for disruption. From global pandemic to localized rioting, business owners and managers have faced situations they’ve most likely never seen before. These events and the fallout from them have magnified the importance of a solid business continuity plan.

In the second One Year, Thirty Minute Challenge, we discussed business continuity in the context of protecting the data that powers your organization. This week we turn our attention to operations.

Let’s jump into the exercise.

People

Operations pivot on people and on the skills they bring to the workplace. To mitigate people risk in the context of business continuity –

  • Identify any processes that are not thoroughly documented. If a current employee becomes unavailable, it’s imperative that the processes surrounding their job are accurately and thoroughly recorded. Document not just what they do, but why it is done, when it is done (including deadlines) and to whom the finished work product is distributed. During this week’s thirty-minute exercise, you won’t be able to complete the documentation itself, but you want a complete list of all undocumented or under-documented processes in the organization.
  • Identify options for completing critical work if a large percentage of your workforce is unavailable (as we saw with COVID-19).
    • Can work be completed by other personnel?
    • Are those personnel cross-trained and do they have access to the process documentation from the previous step?
    • Can you access contractors, temp workers, or consultants to complete critical work?
    • If so, who are those people and how quickly can you mobilize them?
  • If your workforce if formally organized (unionized), work proactively before a work stoppage to engineer an agreement that allows the company and the unionized workers to benefit from the company’s success.
  • Make training an ongoing part of the company’s employee development process so that all workers are continually honing their skills and building a broader base of expertise.

 

Infrastructure

Clearly, some businesses, like a hotel, are location dependent and remote work is not an option, but for many other businesses, work can be portable. Depending on the nature of the event that triggers use of the business continuity plan, there are multiple options.

  • If onsite work is required and the primary location is destroyed or inaccessible, a “hot site” can be activated. Typically, hot sites are abbreviated replicas of a primary location complete with equipment and tech. In the event of a disaster, the hot site is activated and workers report to the new site and begin work. Cloud-based systems are accessed from the hot site location and business continues as usual. Obviously an expensive solution, but sometimes necessary.
  • If your business is multi-location, consider moving operations to what would normally be a branch office.
  • If the need will be longer-term (maybe due to something like a fire or flood), consider a coworking space for temporarily housing your operations.
  • In a world of ubiquitous broadband internet service, cloud-based systems and video conferencing, working from home is a more-than-viable option. If you don’t have a work from home policy, work from home procedures or tech that supports work from home, add the development of those things to your to-do list during this week’s exercise. Once you have those things in place, schedule some practice work-from-home days to make sure everything functions as it should.

 

Resources

There are multiple critical-path resources in a business. The absence of any of them can diminish or destroy the organization’s value creation activity. Effective business continuity planning puts those resources back in play as soon as possible – ideally without any interruption to value creation activities.

  • If your organization is dependent on specialty vehicles or other large equipment for which rentals are not available (e.g. tow trucks), craft a plan with a competitor for a shared business continuity plan. You’ll be each other’s back up and you’ll do a pre-negotiated revenue share.
  • If your organization uses specialty tools and those tools become damaged or destroyed, identify multiple sources for replacement tools.
  • Identify multiple vendors for raw materials. Craft agreements with primary, secondary, and even, tertiary vendors for essential items. Nurture the relationships so that each one represents a win-win for both parties. If a primary vendor fails, make it easy for the other vendors to respond quickly. Always track vendor performance in pricing, quality, and service.

 

Finance

Even a brief business disruption can have an oversized impact on sales revenue. Unchecked discretionary spending can quickly deplete cash reserves. Activating the business continuity plan might have its own built in costs (rental charges, overtime), so acting quickly is a necessity.

  • Build a cash reserve much like you’d do for your household. Three to six months of fixed costs, plus all “automatic” business continuity expenses is a good start.
  • Quickly assess the severity (and anticipated length) of the disruption. If necessary, quickly stop all discretionary spending.

 

Communication

Create a communication procedure as part of the business continuity plan. Where do team members go to get the most up-to-date and best information. Who do they contact if they have questions?

One Final Tool

For the final part of this week’s exercise, I’d encourage you to conduct a “pre-mortem”. We know all about post-mortems from every episodes of CSI (or one its spinoffs) that we’ve watched. When someone dies, the coroner examines them closely to determine the cause of death. A pre-mortem is similar, except, for purposes of this exercise, we propel ourselves into the future and pretend that our business continuity plan has failed miserably. Then we ask, “What did we miss?”, “What fell through the cracks?”, “What procedure broke down?”, “Who was unprepared and why?”, “How did we fail the customer?” You get the idea. It’s looking backward at the event from an imagined failed future state. Anything that helps us create another perspective of our response to the disruption is beneficial. Take the results of the pre-mortem and work them back into business continuity plan.

After you have the plan in place, review it with your team and put a reminder on your calendar to review it every six month to make sure everything still makes sense.

The One Year, Thirty Minute Challenge :: Week 23 :: People :: Employee Development

Nobody wants to be a screw-up at their job. In fact, Dan Pink explains in his excellent 2009 book Drive, that the social sciences teach us that one of the three things people seek in their work is mastery. Pink briefly describes mastery as, “the urge to get better and better at something that matters.”

There are two things that you, as an employer, can do to tap into an employee’s intrinsic desire for mastery – provide resources, time and support for the employee’s self-initiated efforts for personal and professional growth and build an effective employee development program inside the organization.

Effective employee development programs align the interests of the employee with the interests of the company. With an effective employee development program, you are, concurrently, making a better person and a better employee.

This week’s One Year, Thirty Minute Challenge is to design a framework to start your program. The graphic above will provide direction.

The company’s interest in the employee can be view through four lenses –

  • Employees as assets to be developed. Answer these questions –
    • What resources can we provide to make this employee more valuable to the organization (formal education, additional experiences inside the organization, continuing education units (CEUs), professional certifications, webinars, industry meetings)?
    • How will this employee’s compensation reflect his/her additional value to the organization?
    • What should the accompanying gains in productivity or value creation look like?
    • How can we leverage this employee’s new skills into mentoring for other employees?
    • What soft skills does this employee need to develop in addition to technical or industry-specific skills?
  • Employees as people to be understood. Answer these questions –
    • How does this employee embody the organization’s core values?
    • How does this employee embrace the organization’s culture?
    • What motivates this employee in addition to or instead of monetary compensation? Pink’s book tells us they want autonomy (a measure of control over their work), mastery (the opportunity to improve their work skills), and purpose (a feeling that their work has meaning beyond a paycheck).
  • Employees as team members to be deployed. Answer these questions –
    • How well is this employee suited to their current position?
    • If the employee is not well suited, can they be coached or transferred?
    • If they no longer fit in the organization, should they be terminated?
    • Is the employee trusted by other team members?
    • Does the employ skillfully navigate conflict?
    • Does the employee take responsibility for mistakes without making excuses?
    • Does the employee respect and learn from the diverse viewpoints of other team members?
    • Does the employee display good absorptive capacity for new ideas, procedures, and environments?
    • Does the employee have a mentor mindset?
  • Employees as indispensable. Answer these questions –
    • Are there employees who, if they left, would put the health of the organization in jeopardy?
    • How can you most quickly mitigate this risk with additional hiring, training, or outsourcing?

 

The employee’s interest can be viewed through four lenses –

  • What does my future look like?
    • Is there a career path here for someone with my interests and skills?
    • If so, what does it look like?
    • What happens if my interests change over time (e.g. I want to move from IT to sales)?
    • Is there a path for advancement for a skilled practitioner that doesn’t include management?
    • What is the company’s policy on intellectual property?
  • Can I learn and grow in the organization (skills, aptitudes, experiences)?
    • Will you invest in my growth?
    • If so, how?
    • Will I be mentored?
    • Will you give me opportunities to try my hand at several things?
    • Will I have the opportunity to work in other parts of the country or other countries?
  • Can I keep my priorities intact if I work here?
    • Can I live the way I want to live (core values, hours, time off, great co-workers, benefits that are important to me)?
    • Will the organization morph as my life changes – realizing that my priorities might have to change over the course of my employment – children, illness, aging parents?
  • Will the organization help me navigate roadblocks as they surface?
    • Can I escape a boss that isn’t committed to my development?
    • Can I recover from involvement in a failed project?

 

Use the section above to construct two things – a questionnaire for employees and an initial outline of the growth opportunities you can include in your employee development program. Once your employee questionnaire is done, begin meeting with employees one by one and gather their responses. Take their feedback and revisit your initial employee development plan. Add items that are important to employees, fit in your budget but were absent from your original list. Remove items that, based on your interviews, are not important to employees.

Begin rolling out your plan. The conversations should be something like, “You said you were interested in Balanced Scorecards. If we had a Balance Scorecard in our organization, that would be great. If I sent you to a class for Balance Scorecards, would you come back and work with me personally to make one for the company. When we’re done, I’d like for you to present to all the department heads and explain our work. Would you be up for that?”

Have a conversation like this with everyone on your team. When you knock out one of the things important to the employee and the company, move to the next thing and keep the growth going.

The One Year, Thirty Minute Challenge :: Week 22 :: Strategic Planning :: Mergers and Acquisitions

Mergers and acquisitions are things that multi-billion-dollar companies do, right? Certainly, companies of that size do merge with and acquire other companies, but these strategies can be employed by companies of almost any size.

In this week’s One Year, Thirty Minute Challenge, we want to dig into the mechanics of surveying the competitive landscape, identifying synergies that might exist between us and our competitors and crafting a plan to bring two businesses together.

Let’s do a quick definition of terms. In a merger, two equals come together and craft a new business entity that most likely features leadership from both businesses, products from both businesses and a consolidated customer base. In an acquisition, one business purchases the assets, products, and customer base of another business. It’s possible that the leadership of the acquired business will be no longer be present. Its brand might be swallowed completely by the acquiring business.

Before we jump into this week’s exercise, let’s lay out the case for a merger or acquisition –

  • Consolidated back office functions reduce cost – two HR departments become one, two finance departments become one – you get the idea.
  • Distinctive competencies of each entity are leveraged across the new entity.
  • The new entity has a broader product offering.
  • Market share for the new entity automatically increases.
  • It reduces rivalry in the industry.
  • It increases bargaining power with vendors and customers.

 

Here are a few observations before we start on the exercise –

  • Companies who have grown rapidly through mergers and acquisitions all say the same thing – nothing is more important than culture fit. If the cultures of the merging companies clash, the synergy never happens and value dissipates (sometimes costing companies incredible amounts of money to separate the entities). Occasionally, the companies don’t survive.
  • Merging companies operationally is hard. There are systems and processes that must be combined. Which accounting system will the new entity use? How will we reconfigure the sales pipeline? And much, much more.
  • Most likely, some people will lose their job. That’s part of the improved value proposition. You need to create a separation process that, as much as possible, allows departing people to keep their dignity, positions them for future success, and gives them adequate financial resources for a transition. You also need a plan for the people who are staying – who are grieving the loss of their coworkers.
  • You might be looking at your bank account and thinking, “I can’t acquire a box of pencils, let alone another company.” The current climate has created incredible uncertainty. There might be companies you could acquire for just an assumption of debt or for a stream of future payments instead of a lump sum upfront.
  • Acquire or merge with positive cash flow. A company with negative cash flow might seem like an easy acquisition target, but unless the reason for negative cash flow is readily apparent and easily fixable, you want to acquire or merge with a company that is “paying its own way.”
  • If you’re acquiring a company just for their book of business, be cautious. Unless the company has a locked-in customer base (e.g. the only factory-authorized service center for XYZ brand widgets in six states), customers could defect to competitors and significantly diminish the value of the acquisition.
  • I understand that every bullet point above this seems fraught with peril. These are two hard strategies and they require a lot of soul-searching and empirical analysis before they are utilized. But, when executed correctly, they can create incredible value and opportunity for the owners and companies who utilize them. Companies can quickly experience every one of the benefits spelled out earlier in the post.

 

Here’s this week’s 30-minute exercise –

  • List 3-5 merger or acquisition targets. Remember, you’re looking for culture fit, complimentary product offerings and organizational synergy. When thinking about complimentary products, consider adjacent industries. For example, an HVAC company might find a good merger/acquisition target with a plumber.

_______________________________________________________

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  • Write a few notes after each one regarding why you think they make a good merger or acquisition target. Be specific – cite products, services, people, similar marketing communication.
  • Sleep on it for a night or two. Revisit the list and the notes and see if they still make sense.
  • If it still makes sense in a day or two, introduce the idea to a couple of trusted lieutenants in your organization and get their take on it. Discuss all of the challenges listed above and any additional ones that you identify.

 

If after this internal deliberation, you still think it’s a promising idea –

  • Initiate a conversation with the principal of the target company. Suggest lunch or coffee. This is your first opportunity to gauge the culture of the organization, because culture flows down from the top.
  • If the conversation is positive, introduce the merger/acquisition topic. If there is interest from both sides, sign a mutual non-disclosure agreement. This will ensure that any financials or trade secrets disclosed during the following discussions will remain private.
  • Arrange a meeting with a small group from both entities. Invite operations people, finance people and tech people. In this meeting you’re still checking for culture fit and you’re starting to dig into overarching operational questions. It might be a good idea to engage a third-party to manage this meeting. Their job is to make sure everyone’s concerns are aired and addressed.
  • Each entity needs to have a debrief after this meeting to discuss culture, markets, operations, finance, and tech.
  • If everyone involved is still feeling positive, it’s time to involve legal counsel, accountants and possibly consultants with experience in merging operations (if you haven’t involved them up until now).

 

This One Year, Thirty Minute Challenge was a thought-starter for one of the more ground-shifting topics in the series. If you decide to undertake one of these strategies, think long and hard, and get help.