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The One Year, Thirty Minute Challenge :: Week 21 :: Marketing :: Social Media

Unless your current and potential clients constitute a very obscure part of the business-to-consumer or business-to-business landscape, you need an effective social media presence. Look at these statistics from Hootsuite (a social media management tool vendor) Source: https://blog.hootsuite.com/social-media-statistics-for-social-media-managers/.

  • 50% of the global population (3.8 billion people) uses social media
  • 84% of people with access to the internet use social media
  • In 2019, people spent, on average, 2 hours and 24 minutes on social media every day
  • The average social media user has 8.3 different social accounts
  • 43% of internet users use social media for work purposes
  • 43% of internet users use social media to research potential purchases
  • 90% of internet users say they watch video online at least once a month
  • Social ad spending is forecast to increase 20% to $43 billion USD in 2020
  • Active users by platform
    • Instagram – 1 billion
    • Facebook – 2.5 billion
    • Twitter – 152 million
    • YouTube – 2 billion
    • Pinterest – 335 million
    • LinkedIn – 675 million
    • Snapchat – 218 million
    • TikTok – 800 million

 

This week’s One Year, Thirty Minute Challenge is to reexamine your social media strategy. Some of you might have ignored this marketing, messaging, and customer service channel, but you’re probably ignoring it at your own peril. Your customers, potential customers and competitors are most likely already there. Some of you might be active in social media but are not maximizing the results. Some of you might be knocking it out of the park.

There are two things that are unique and wonderful about social media. The first thing is that the best social media content is “useful”. The plumber is posting a list of the 10 worst foods for clogging garbage disposals. The chiropractor is sharing an infographic on how to lift heavy items without hurting your back. You’ll occasionally see a “hard sell” on social media, but they aren’t prevalent. The second thing is that, unlike almost every other marketing and advertising medium, social media is a conversation – business-to-customer, customer-to-business, and customer-to-customer (in front of the business). And those conversations are enabled and encouraged by the platform provider. Some platforms include tools that help the customer rate, review, and recommend the business.

One more thing before jumping into this week’s exercise. Some business owners and managers live in fear of what might be posted on social media. They dread the one-star review or the lengthy post from the irate customer. That content represents one of the best opportunities on social media. Customers don’t expect companies to be perfect, but they do expect companies to make things right when they make a mistake. When the poor review or the flaming complaint comes, jump right in. Apologize for the missed expectation, commit to making it right and give the complaining customer the first step in repairing the relationship. I recommend something like this, “Jim Smith, I am sorry that was your experience in our office. We want every customer to feel like they were treated well and received incredible value by purchasing our product. I’d like to talk with you about your experience. Would you call me at 888-555-5555 or email me at johnjones@email.com, so we can see what happened.” Again, in front of this complaining customer, all your other customers and any potential customers, you’ve voiced your commitment to making this right. If you’re able to resolve the complaining customer’s problem, invite them back to the post to share the resolution (without all the gory details).

Let’s jump into this week’s exercise –

Create a social media manifesto

  • Describe what you want to accomplish (position my company as an expert in the field, showcase the talented people on my team, generate sales leads, provide industry and company information so people can understand what we do, sell products or services online)
  • Define what winning looks like (reach, number of views, number of followers, number of engagements – clicks, likes, replies, pins, saves, number of leads, number of mentions, number of tags, number of reposts, shares or retweets)
  • Identify 6 – 8 themes that you want to consistently communicate (these might revolve around core values, products, people, community involvement)

 

Stake out your place on social media – I suggest creating accounts on the platforms you think you might want to use, just so you have the account name claimed. You can build them out as it makes sense (you have a plan that fits the platform, the ability to create meaningful content and the bandwidth to interact with customers on the platform).

Identify the best place or places to talk to your customers and potential customers on social media – If you don’t know where they hang out on social media, ask them. Each social media network has detailed demographics of its users. Review those and see if your customers are there.

Create a social media calendar – Using the themes from your manifesto, create a content calendar with dates, platforms, and messages. Content can be original (created by you or your team) or curated (useful to your audience, consistent with the messages of the manifesto but created by someone else). Schedule in “big” content and the run up to it. For example, if you’re going to be at a trade show, announce it in advance, ask followers to meet you there (scheduling appointments would be great), show pictures of preparation and broadcast live from the event when you get there. Track results from the content you share. Check levels of engagement and use it to refine future content. Periodically extend the invitation for more interaction outside of social media (if that makes sense in your business model). Download a sample social media calendar here.

Execute – Social media requires consistent care and feeding. Create good content, consistently share it, track the results, engage with your audience.

This is the most rudimentary of social media information. There’s much more to learn if you want to go deeper. Here are some good resources if you want to take your research further.

https://www.socialmediaexaminer.com/

https://www.socialfresh.com/

https://socialmediaexplorer.com/

https://www.marismith.com/

https://sproutsocial.com/

The One Year, Thirty Minute Challenge :: Week 20 :: Value Creation :: Economic Value Creation

Earlier in the One Year, Thirty Minute Challenge (week 11) we examined Experiential Value Creation – the gap between what the customer pays for our product or service and the worth and enjoyment they experience from the purchase. The goal is to widen that gap as much as possible, so the customer’s enjoyment of their purchase far exceeds the monetary investment. In that exercise, we explained the three ways that customers interact with purchases and how to maximize those interactions to create the greatest experiential value. Experiential value creation involves the sometimes-subjective evaluation of customers.

This week’s One Year, Thirty Minute Challenge is the purely objective exercise of economic value creation. Economic Value Creation is the gap between the sales price of our product or service and the cost to produce that product or service.


In economic value creation, we want to push the Sales Price and the Cost as far apart as possible. This is the money we get to keep. It’s fairly easy to track because we know all of the numbers. Successful Experiential Value Creation allows us to push the sales price up. In this week’s exercise, we want to work on pushing the cost down.

Costs fall into two categories – variable and fixed. Variable costs (expressed as cost of goods sold when broken down by sold unit) are those costs that go up and down based on the number of times the product or service is delivered – every cheeseburger sold has a bun, a piece of cheese, a hamburger patty, a squirt of mustard, three pickle slices, a wax paper wrapper and 4 minutes of employee time devoted to frying, dressing, wrapping and delivering the finished product. Every therapy session has 55 minutes of the counselor’s time. The more times the product or service is delivered, the more costs we incur. Fixed costs are those we incur simply by being open. If we serve 2 or 200 customers, they do not change. Rent, utilities, communications, hardware, software, and insurance typically fall into this bucket.

I want to discuss variable costs in the context of the value creation chain.This week’s exercise is devoted primarily to variable costs, but certainly attention should be devoted to reducing fixed costs. We should be regularly checking price vs. value on our office space, insurance, technology and more.

Inputs > Transformation Activities > Outputs

Here are a couple of samples of value creation chains from very different industries.

Economic value creation improves by moving through the value creation chain better, faster and cheaper.

One manifestation of better can be quality – that could be evidenced by fewer defects – i.e. your quality control people find fewer parts that don’t meet your specifications or that need to be reworked. Better could also mean that the raw materials are free from problems. That opens up the entire vendor or supplier discussion – do all of the vendor’s raw materials for your product perform as expected. Is the quality consistent or do they vary wildly from batch to batch? Do you have tools in place to measure vendor performance so you can identify underperforming vendors and defective batches? Do you have initiatives in place that stop or reduce defects in the process? Initiatives that keep your production people from making mistakes? If you’ve visited someone in the hospital lately and been there when the nurse has administered medication, you’ve seen a procedure that makes patient care “better” – the nurse scanned the wristband on the patient’s arm, then scanned a barcode on the medicine he or she was about to administer. That allows the EMR system to alert them if a wrong medication is about to given to the patient. Better might be more effective use of personnel, materials or machinery. In short, “better” can represent exploiting a host of operational opportunities.

The second improvement you can make in the value creation chain is faster. Faster is desirable for several reasons. First, it hastens the moment you get paid. If you can put a product in a customer’s hand quicker, you can be paid quicker. I realize that collecting money, paying for raw materials on terms and credit card processing times all constitute a bunch of moving parts when it comes to money, but suffice it to say, faster is almost always better. Faster on the shop floor means that the same resource can do more work in the same amount of time. If you can automate or organize so that a worker can make 10 widgets in an hour instead of 8, you can significantly increase profitability. Any time you can create more units of output with the same units of input with no degradation in quality, that’s a good thing. Faster also applies in the delivery of raw materials before transportation and delivery after the product is transformed. I know that most of us automatically switch into manufacturing mode when we’re talking about value creation but let me remind you of the value of faster when it comes to stroke treatment. If you can begin the transformation activities (i.e. treatment) faster, the patient’s prognosis improves dramatically, since during a stroke, 1.9 million neurons die every minute. Speed is almost always a competitive advantage.

The final improvement you want to make in the value creation chain is cheaper. This probably seems like a no-brainer and it is. You certainly want to cut the cost of your processes anytime you can. Cheaper can translate into higher margins or in the ability to reduce prices to consumers making your product or service more competitive and hopefully driving more volume. Certainly, improvements in speed as we discussed earlier can cut costs, but there are other opportunities for cheaper as well – more preferable pricing from vendors, cheaper transportation costs before and after the transformation activities and lowering administrative costs (that are typically spread across all produced units).

For this week’s 30-minute exercise, map your value creation chain.

How can inputs be obtained “faster” or “cheaper”. How can you keep a minimal number of inputs on hand (saving on inventory holding costs) while still making sure you never impact the ability to start the value creation process? If the input is a skilled employee, how can you develop them, so they are “better”? How can transformation activities become more streamlined? Be more accurately measured? Require less rework? Be touched by fewer people? How can outputs be delivered to the final customer quicker or in a more convenient way?

Explain the value creation chain to the people involved in each of these steps. Ask them to critically examine their responsibilities in the light of better, faster, and cheaper. Offer them financial incentives when their recommendations for improvement drive more money to the bottom line.

The One Year, Thirty Minute Challenge :: Week 19 :: Finance :: Financial Literacy

If you want employees to make decisions like you make decisions, they’re going to need access to the same data you have and they’re going to need to know how to make sense of that data. That includes a big dose of financial literacy.

Rudimentary financial literacy doesn’t require that everyone in the organization take an accounting class and it doesn’t mean that everyone knows what everyone else makes. Basic financial literacy rallies everyone in the organization around common goals, gives them a common language and increases their value to the organization.

This week’s One Year, Thirty Minute Challenge lays out the first financial literacy concepts that everyone in your organization should understand and gives some ideas on how to begin financial literacy education in the organization.

Profitability is built on creating an economic value surplus. The formula is

Revenue (units sold * cost per unit)

Cost of Goods Sold (materials + labor)

Fixed Costs

= Profit

It’s important for your team to understand each of these components. Revenue is a combination of two things – volume and price. The price for your good or service must be enough to cover the cost of goods sold (the materials and labor required to make the product). The remaining money, in aggregate, must be enough to cover the fixed costs of the business (rent, utilities, insurance, phones, desks, trucks, office supplies and more). Volume represents the number of people that are interested and willing to pay for your good or service at the price you’ve established. The money left over after paying the cost of goods sold and the overhead expenses is profit. The accumulated profit must be enough to build a surplus so the business can survive temporary downturns in volume or can capitalize on emerging opportunities.

The real magic happens when team members see how their day-to-day responsibilities drive each of these components. Price must be high enough to cover the fixed and variable costs and must also create a favorable value proposition for the customer (the price paid must be equal to the benefit derived by the customer). Pricing plays into decisions on marketing and advertising.

Cost of goods sold represents an incredible opportunity for inviting team members into financial literacy. If they can streamline the creation of the good or service, it drives the labor cost per unit down – allowing the company to make more units in the same amount of time. That increases profitability. If they can negotiate more favorable rates with suppliers, driving the cost of materials down, that increases profitability. If they can obtain higher quality materials for the same price, thus increasing quality and lowering the defect or warranty rate, that increases profitability. Greater profitability enables the company to create a larger surplus and be more prepared to weather economic storms. The COVID-19 crisis has shown us the importance of financial resilience. A report by JP Morgan Chase showed that only half of all small businesses have enough cash on hand to survive for 27 days.

Fixed costs are those incurred by the business just by being open – rent, utilities, insurance and more. When team members understand how co-working or working from home can lessen the need for office space – pushing rents down or how staying healthy can help push down insurance costs, they begin to get an understanding of the financial calculations that you are making every day. That understanding leads to engagement and empathy.

These actions move team members to the same side of the equation as owners. Instead of owners being adversaries – the employee’s loss is the owner’s gain – team members are now rowing in the same direction as the owners because they understand the owner’s endgame – building a viable, sustainable, and stable enterprise – one that can continue to offer employment and opportunity for years to come.

So, where do you start? First, I’d convene a meeting with all employees (if the company size allows it, if not, do several meetings) and explain the economic value surplus equation above. Explain that from this time forward, you’re going to share some of the company’s financial information so they can see how these pieces work. Then ask for their help in increasing revenue and decreasing expense. Finally, explain what’s in it for them. I’d suggest giving them skin in the game. If revenue increases, expense decreases, profitability increases (whatever information you’re willing to share), give them a cut of the savings or increased profits. You’ve now created common goals and explained it with, what is now, common language. You’re on your way.

Reconvene the meeting each month and report results.

Where do you go next? I’d suggest explaining double entry accounting – every financial transaction is recorded in two ways – when you sell a product, cash is debited and revenue is credited, when you buy copy paper, cash is credited and office supplies are debited. This prepares team members for the next, very important step.

Introduce the three primary financial reports – the Profit and Loss Statement, Balance Sheet and Cash Flow Statement.

The Profit and Loss Statement reports income and expenses for the business for a time period.

The Balance Sheet shows the organization’s financial health by tracking what the company owns and owes.

The Cash Flow Statement shows the movement of money in and out of the business. It differs from the income statement because all money coming into a business might not be income. For example, if a company takes out a loan, it receives money but did not generate any income. Conversely, if a company pays back a loan, it spent money but did not incur an expense. Instead it decreased a liability.

In your thirty minute exercise this week, decide how you can best engage your team in financial literacy by inviting them into some of the difficult decisions you make on a daily basis.

 

 

The One Year, Thirty Minute Challenge :: Week 18 :: Governance :: Legal Organization

This week’s One Year, Thirty Minute Challenge isn’t too sexy, but it could –

  • impact your ability to shield yourself, your family and your assets from legal liability
  • impact your ability to raise capital for your business
  • impact your personal tax liability
  • and more

My purpose this week isn’t to offer advice, because the topic is outside my area of expertise. The real answers will have to come from your accountant and/or tax attorney. My purpose this week is to offer education and encourage you to consider your options for the legal organization of your company.

Typically, most small business are legally organized one of these 5 ways –

Sole Proprietorship

Sole proprietorships are the simplest form of business organization. They do not produce a separate business entity but can register a separate trade name (Super Good Plumbing vs. Jim Smith, Plumber). Business assets and liabilities are mingled with personal assets and liabilities. Consequently, sole proprietors can be held financially liable for business debts and can be held personally liable for the actions of the business (which could put personal assets at risk). Sole proprietors can sometimes have greater difficulty in raising money than those who choose other business organizations.

Partnership

This is for a business owned by two or more individuals. In “General partnerships”, partners share profits, losses and liability. In “Limited partnerships”, one partner has control of the operation and bears unlimited liability while the other partner(s) contributes, shares profits and has limited liability. Limited Liability Partnerships (LLP) give limited liability to each partner, protecting them from the actions of other partners. Partnerships can sometimes more effectively raise money versus sole proprietors since lenders can consider the combined creditworthiness of all partners.

Limited Liability Companies

Limited Liability Companies (LLC) are hybrids of partnerships and corporations. They allow owners to protect their personal assets by separating them from the business’ assets. They also protect owner’s assets in the event someone sues the business. Business profits and losses are passed through to the owner’s personal income. Members of an LLC are considered self-employed.

Corporation

A corporation is an entity unto itself, separate from its owners. It can own assets, sell assets, sue, be sued and sell part of itself to other entities (stockholders). The corporation is responsible for its own debts and liabilities. Shareholders are protected from liability, but should the corporation become worthless (loss of all asset value, bankruptcy, a large legal judgement, etc.), the shareholder’s stock could be worth nothing. There are several flavors of corporations, but here are three common ones.

  • C Corp – it is owned by shareholders and is taxed as its own entity. In some cases, the profits are taxed twice – the corporation pays taxes and, when dividends are paid to shareholders, they are taxed again when the shareholder pays personal taxes. C Corps can raise money through the sale of stock.
  • S Corp – it is owned by shareholders, but profits are passed through to shareholders to be taxed at each shareholder’s individual tax rate. There are limits on the number of shareholders in an S Corp.
  • B Corp – these are for profit entities, but shareholders hold the company accountable to make some tangible public benefit besides making a profit. Some states require an annual filing that documents their public benefit.

 

Cooperative

Cooperatives are owned and operated by those who benefit from its services. Profits are disbursed to the members of the cooperative. A frequent use of cooperatives is farmers banding together to market their products as one entity to regular buyers – distributors, grocery store chains, food service suppliers.

If you want more detail, check out the Small Business Administration Page on business structure at https://www.sba.gov/business-guide/launch-your-business/choose-business-structure.

This week’s exercise is to consider what you’ve just read and examine, with your accounting and tax advisors, whether or not you can find more favorable tax treatment, better financial resources, better protection for personal assets, better options for employee compensation or any other additional benefits by changing your legal structure.

The One Year, Thirty Minute Challenge :: Week 17 :: People :: Onboarding

The struggle for talent is real. Hiring managers kiss lots of frogs on their way to finding a well-hidden prince or princess. And when they find a stellar employee, the organization is challenged quickly to find the best way to engage them in meaningful work and give them opportunities to lead and grow. And, maybe more importantly, those employees must work seamlessly with a new team that must quickly produce results where the whole is greater than the sum of the parts.

Onboarding is the key activity to accelerate the integration and productivity of newly hired employees. Successful onboarding starts even before the hire, continues through the offer and acceptance and wraps up a few months into employment.

For purposes of this week’s One Year, Thirty Minute Challenge, we’re going to assume that during the recruiting and hiring process you made sure the new employee is a good fit with the company’s culture and embraces the company’s core values. If that is not the case, the onboarding activities are all paddling upstream and will ultimately end in the employee’s soon departure.

Let’s jump into this week’s exercise. I’m going to list several things newly hired employees need to understand and experience. During the 30 minute exercise, I’m going to ask you to open a Word document or pull out a notepad and, item by item, identify opportunities in your current onboarding process where new hires can get that information and experience. Then I want you to customize those items, so they work for your organization. Finally, I want you to think about who could most effectively deliver the information and experiences – it might be you.

  • Pair the new team member with someone who models the culture fully and can explain it in detail. You already checked for culture fit during the hiring process, but onboarding is the chance to flesh that out. Remember, culture must be caught AND taught. I suggest using an employee commitment document that spells out the employee’s commitment to the organization, team members, customers and personal growth. If you want a sample employee commitment, email me.
  • Explain the company’s value creation activities. How does the company create a product or service that customers are willing to pay for? What are the key components of the process? Where do the key activities take place? What benefits do customers derive from the product or service? What tangible or intangible advantage does the customer receive that makes him/her willing to pay more money than what it costs the company to create the product or service?
  • Explain how the new team member’s job fits in that value creation process. How does their work create a better customer experience, make the product of higher quality or drive costs down? How can they increase economic value creation for the company or experiential value creation for the customer? Implicit in this conversation is an explanation of the team member’s new job responsibilities.
  • Attach purpose to the work. Companies must make money to survive, but they must not exist solely to make money. It’s comparable to saying that humans exist solely to breathe. We must breathe to exist, but we all aspire to more than just breathing. Help the new team member attach greater meaning to the work of the organization. Maybe you give families more leisure time by making everyday responsibilities faster and easier. Maybe you provide a venue where guests can make vacation memories that will last for a lifetime.
  • Understand the new team member’s personal and professional goals. The most effective way to manage employee development is to align the employee’s interests with the interests of the organization. To make that happen, you must understand the employee’s goals and aspirations and craft growth plans where those goals intersect with the organization’s future needs. Every employee wants to be good at their job. Help them get there AND simultaneously realize their own personal growth goals.
  • Help them integrate into the organization. Marcus Buckingham’s important work documented in First Break All the Rules details the importance of relationships in the workplace. Happy employees have a “best friend” at work and have someone speaking into their personal and professional development. The nuances of relationships in the workplace are impossible to address in a short post but let me make a few quick observations –
    • The goal is integration not assimilation. Don’t push team members into molds, instead encourage them to contribute their unique skills and perspectives.
    • Build trust that makes room for frank conversations informed by multiple differing perspectives and opinions.
    • Encourage both autonomous work (flexible schedules, work from home) and collaboration (ad hoc groups and projects).
  • Explain the mechanics of working in the organization. Help them understand the org chart (bosses, peers and subordinates), how to access benefits (insurance, retirement, PTO), how to use the technology (equipment, access to data) and how to navigate the physical facilities.
  • Explain how they can leave their mark on the organization. We all want to impact our corner of the world. Help new team members block out time for deep work. Ask what “flow” typically looks like for them. Explain big problems and big opportunities that exist in your industry and your company and encourage them to engage in the discussion. Ask new team members to be on the lookout for ways to do things better, faster and cheaper. Encourage team members to speak to problems and opportunities that are outside their discipline. Explain how to communicate ideas to pivotal people in the organization.
  • Explain how to “pull the ripcord”. Even with rigorous screening, hiring and onboarding processes, occasionally you’ll make a hire that just doesn’t work. Explain to the team member what to do if they feel like the new job is just not working out.

Check in periodically in the first few weeks to make sure the new team member is productive, connected and well informed.

The One Year, Thirty Minute Challenge :: Week 16 :: Culture :: Lifelong Learning

None of us, no matter how skilled, can afford to stay the way we are. Our industry, employees and customers change and so must we. Even if the founding generation and current generations have done everything right in steering the organization to its current state, their work may not be applicable in the future. We must be lifelong learners.

Lifelong learning embraces the idea that we never will “arrive”. Our business acumen, industry awareness and personal skills can always improve. Gary Keller, in his book The One Thing, reminded us that we must commit to running our organizations “the best it can be done” not “the best we can do it”. The “best we can do it” imposes the limitation of our current capacity and intellect. “The best it can be done” introduces the possibility that we can seek out new information and new skills that will make us better managers and leaders.

Not only must we as leaders be committed to lifelong learning, but we must build lifelong learning into the culture of our organization. Every team member must see personal and professional growth happening in those who lead the organization and must have opportunity, tools and accountability to affect their own personal and professional growth.

Let’s jump in to this week’s One Year, Thirty Minute Challenge. The goal this week is two-fold. Use your 30 minutes to –

  • Think through everyday tasks and recreate them as learning opportunities
  • Create tools and time for team members to deliberately grow personally and professionally

 

Reframe Tasks – Stephen Covey reminded us to “Begin with the end in mind”. When navigating the mundane, fixing the urgent problem or capitalizing on the immediate opportunity, work to identify and verbalize how that task pushes the organization towards overarching initiatives (strategic plan, new sales campaign, etc). To illustrate, let’s say one of our new long-term strategic objectives is to decrease product delivery time from four days to two days for 90% of all orders. Today’s issue has to do with billing for an order from a brand-new customer. The customer wants to set up an account and be billed since they plan on doing more business with us in the future. However, upon submission of their billing information, we find some problems with their credit information and even find some unfavorable credit reporting in an industry reference publication. We could work with the employee who reported the problem to get this new customer set up and billed (and we should), but it would be best to reframe this problem and examine it in the light of our strategic initiative. In order to get this new customer his or her order in two days (in fulfillment of our long-term initiative), do we need to make changes to our order process to identify problems like this earlier? Do we need to look for a way to programmatically check credit reporting when the order is submitted online? Do we need to change the sales process so prospective clients with credit problems are excluded from the sales pipeline? Reframing problems – and slightly expanding their scope if necessary – attaches larger meaning to the problem and makes solving the problem tactical instead of operational, moving the organization closer to reaching its long-term initiatives and making everyone involved in the process better equipped for the future.

Put Employees First – When urgent problems surface, they are, most of the time, screaming to be solved right now. Our natural reaction is to solve them ourselves or get them quickly to the person who can solve them best and fastest. What about using urgent problems as a training opportunity. Take an employee who has the requisite knowledge to solve the problem but has never had the opportunity and walk them through it as you solve it. Or pair them with the staff expert in solving the problem and let them walk through it together. It might take slightly longer, but afterwards you’ll have a deeper bench. If today’s urgent matter is an emerging opportunity, show the employee how you step through an evaluation to make the determination whether to pursue it further. This helps the employee to see how you evaluate opportunities in the light of the organization’s mission, vision, values and current long-term initiatives.

Go from the Outside In – In the press to make to make problems go away or make the internal processes behind our mundane tasks easier for us, we occasionally make decisions that generate unintended consequences. Many times, the recipient of those consequences is not us, but our customers. By making life easier for us, we make it harder for them. Amazon famously sits an empty chair in every meeting. That chair represents the customer. It’s a physical reminder to make decisions that get the customer better products and services, make transactions more frictionless and deliver more value for their money. When problems surface, start with the customer perspective and work inward, navigating through the company’s internal processes. Solve the problem so the customer wins. Team members engaged in this exercise build a stronger customer orientation.

Embrace Cross-Discipline Problem Solving – In his book Range, David Epstein tells the story of two labs working on the same problem at the same time (proteins they wanted to measure would get stuck to a filter, which made them hard to analyze). One lab, staffed by only E. Coli experts, took weeks to solve the problem – experimenting with multiple methodologies. The other lab, staffed by scientists with chemistry, physics, biology, and genetics backgrounds, plus medical students, figured out the problem in their initial meeting. Were the staff members in the latter lab that much smarter than those in the former lab? Unlikely. Those in the latter lab had the advantage of a much broader base of knowledge and a larger pool of diverse experiences. To build lifelong learning in an organization, leverage the knowledge of employees with diverse skills and experiences. Turn the finance people loose on an operational problem. Invite the IT people to weigh in on a sales problem. Create cross-discipline meetings and encourage collaboration to solve problems. Let team members experience the problem-solving methodologies of people from other departments.

Be Deliberate – Finally, provide resources for growth. Start a business book club inside the organization led by the CEO or GM. Meet once a month during lunch to discuss a chapter. Encourage employees to attend classes and webinars. Ask them to report back to the organization on ideas they found especially helpful. Encourage cross-discipline learning. Pay for a salesperson to take a Python or accounting class. Formally recognize those who are learning and growing both personally and professionally.

The goal is to bake the actions that promote lifelong learning into the culture.

The One Year, Thirty Minute Challenge :: Week 15 :: Technology :: Evaluating Productivity

When I was listing the topics I wanted to cover in the One Year, Thirty Minute Challenge, Evaluating Technology Productivity was an early entry. I knew it was important and that it represented a struggle for business owners and managers. But, the fact that it defies succinct diagnosis, lacks easy measurements and has a “more than I’m comfortable with” amount of subjectivity pushed it this far into the schedule.

Certainly, the ROI of some technology is apparent. A customer-facing e-commerce site generates sales numbers that can be compared to the cost of running the site. The return on other tech investments is tougher to quantify. If you invest $20K in security and never have a customer data breach or never have a bout with ransomware, what’s the return? It’s hard to quantify the value of an event that never happens. If you invest $2000/month for a CRM subscription for your entire customer-facing team and the sales funnel is always full and customer problems never fall through the cracks, can you calculate how much of that is directly attributable to the CRM?

That being said, I’m a big believer in tech-enabled enterprises. I like measuring metrics for web, email and social performance. I like tracking every touch with current and potential customers using a CRM. I like ERP systems that integrate supply chain, human resources, transformation activities and finance. I like collaboration tools that supercharge organizational learning. But the question remains – am I getting my money’s worth?

For those pieces of tech where the ROI is a bit squishier, I want to offer some tools for subjectively measuring tech effectiveness. Like many of the One Year, Thirty Minute Challenges, this would be best handled with your leadership team. Get them together and work through these questions, one tech tool or application at a time? It will work for both in-house and hosted applications.

Process Support – Could you do your work without the tech tool or software? Is it integral for scheduling, manufacturing, distribution, communication or personal productivity? Does it make the work easier or faster? Are there shortcomings in the tool that frequently surface that make the work more difficult, make it take longer or stop the work altogether?

Integration – Is the tech tool or software easily integrated with other pieces of software or hardware in the organization? Can you easily pass data back and forth between other tech tools in the organization?

Reliability – Is the tech tool or software always on? Is it frequently down or unavailable because of maintenance?

Ease of Use – Do most employees use the tech tool or software as you intended or do they look for ways to avoid it? Do they opt for a manual workaround or use a personal tech tool instead? Do they complain about functionality (too many screens, too many clicks required to get to the information needed), the user interface or lack of available reporting? Is information readily available when it’s needed to resolve an operational issue or solve a customer problem? Do they complain about lack of vendor support?

Support – When the tech tool or software is experiencing a problem, does the vendor respond and repair the problem in a reasonable amount of time? When the tool is scheduled for an upgrade, do the upgrades work without causing additional problems? Do you have consistent communication with the vendor so that you are aware of new capabilities, new products, subsequent revenue or savings opportunities or improvements to the employee or customer experience?

Ease of Configuration – Does the tech tool or software make it easy to add a new product, change pricing, add a discount, change a process or affect other operational changes? Do you have to call the vendor for changes you feel like you should be able to make yourself?

Security – Is the data stored inside the tech tool or software secure? Is the data and application infrastructure “hardened” against physical attacks, cyber attacks and internal breaches by employees or vendors? Is there sufficient user-level security – only allowing users access to information they need for their work?

Reporting – Does the tech tool or software provide readily-accessible, accurate and actionable information? Is information presented in sufficient granularity so that you can evaluate the performance of individual employees, customers, products and services? Is the information accessible to every person that needs it?

Money – Does the tech tool or software allow you to drive additional revenue? Can customers schedule online, purchase online, add complimentary products, see additional available services or easily pay online? Does the tech tool or software save money for the organization by automating tasks, improving accuracy or reducing defects?

If the tech tools or software in your organization don’t measure up in the light of these criteria, it might be time for a change. Depending on the complexity and the level of integration, it might be as easy as stopping one subscription and starting another or it could be an extremely complicated and long undertaking. Don’t hesitate to get help if it’s needed.

The One Year, Thirty Minute Challenge :: Week 14 :: Strategic Planning :: Agility

I’ve probably used the phrase “survive and pivot” more in the last week than I have in the last 15 years. It’s the order of the day. This week’s One Year, Thirty Minute Challenge is about agility – the skill that allows you to successfully survive and pivot.

Up until now, for most of us, our ability to be agile has been the difference between –

  • capitalizing on an emerging opportunity or missing out
  • quickly fixing an emergency operational problem or allowing it to linger a little too long
  • shifting staffing or methodology to meet a deadline or waiting too long to make a change and missing the target completion date

We might have been disappointed when we missed out on a couple of bucks or took some heat for missing a target, but the stakes are considerably higher now. Our inability to be agile now could jeopardize the future of our organization.

Agility isn’t a 30-minute exercise, it’s an organizational discipline that gets stronger the more it is practiced. So, the goal of this week’s One Year, Thirty Minute Challenge is to lay the groundwork for agility. We want to introduce some attitudes, vocabulary and tools that you can introduce during team meetings (even on Zoom) and begin to utilize as you read and react to a business environment that is changing rapidly every day.

Face Reality – Jack Welch admonished us to, “Face reality as it is, not as it was or as you wish it to be.” Get out the P&L, the list of receivables (by client) and payables (by vendor), and the balance sheet. No rose-colored glasses allowed. Make sure everyone around the table understands what they’re seeing. Call out the things that are good and the things that are troublesome. Talk frankly about people, products, service delivery and the future (as you know it today). Even the most sacred of the sacred cows should be evaluated.

Question Assumptions – All plans are built on assumptions – the number of customers that will walk in the front door, the products they will buy, the amount of money they will spend, that employees will show up for work, that credit will be available. Many of those assumptions are most likely wrong now. Create a new set of assumptions that you’re going to use going forward.

Embrace Ambiguity – Change is the new constant. The world is not picking on you personally nor on your business. Take in new information, test it (to see if it’s true) and then add it to your knowledge base. The best NFL running backs read and react. They see the holes opened by their offensive line (planned) and they see holes opened by defensive missteps (part of the changing environment) and run through them. In times of rapid change in the business environment, chart your course similarly.

Innovate Effectively – Use changing circumstances to supercharge innovation. We mistakenly think that the best innovation comes from freewheeling, wide-open, unlimited-budget brainstorming. Nothing could be further from the truth. The best innovation comes from very narrow constraints – How can we solve this problem with $1000? What changes to the customer onboarding process can we decide on before we leave this room and implement before the end of the week?

Leverage Existing Resources – What products or services could we deconstruct and sell separately? What products or services could we deconstruct and recombine to make new products more suited to the current environment? Who has existing expertise that we are not utilizing now? What underutilized inventory could we liquidate to invest in operations or in new inventory that we could turn easily in our new environment? If we are fiscally solid right now – what loans could we buy out and save money in the long run? what agreements for needed products or services could we strike with vendors now when they desperately need cash flow?

Think Broadly and Deeply – Agility requires the most effective cross-discipline work your organization has ever done. To paraphrase David Epstein in Range, “mental meandering is a competitive advantage.” If you and your team were afloat in a sinking ship, everyone would be encouraged to bail water, not just those with a job description that included “water bailing”. So it should be in an agile organization. Team members should be encouraged to contribute across departmental boundaries. Good solutions are the goal and egoless team collaboration is the methodology.

Make Small Targeted Investments – As new ideas surface, test them as cheaply as possible. Do things by hand at first until you know they merit having a process built around them. Go to market with a “minimum viable product”. Fail fast, iterate and try again. When you’ve finally, by iteration, hammered out a workable new product, service or process, begin to economically build systems around it. As Jim Collins reminded us, “shoot bullets, then cannonballs.”

Remove Cumbersome Bureaucracy – Organizations that are agile embrace entrepreneurial-style decision making – pushing down decision-making to the lowest level possible. When speed is a competitive advantage (and most of the time it is), layers of red tape hinder progress. Leaders should quickly “clear the path” for those creating or recreating a new product, service or process.

This week, deliberately introduce one or more of these agility-enabling tools into interactions with your team and encourage adoption. It can be one-on-one or in a group setting. Over the course of the next few weeks, keep introducing more of these tools.

The One Year, Thirty Minute Challenge :: Week 13 :: Leadership :: Personal Growth

I’ve avoided adjusting the One Year, Thirty Minute Challenge to address the coronavirus outbreak because that’s precisely the point of the exercise. There will always be dozens of things clamoring for our attention – some small and some coronavirus-size. It takes discipline to step away and focus, even for a few minutes each week, on organizational health and future growth.

This week’s topic was on the schedule for later in the year but, given the number of shelter-in-place orders all around the country, it made sense to move it into this week’s slot.

An organization won’t ever be healthier than the leaders in that organization. Consequently, every leader in the organization needs to carve out time for personal growth. This week’s exercise isn’t thirty minutes worth of personal growth, it’s thirty minutes of planning a personal growth strategy that will permeate several areas of your life. I think we mistakenly segregate pieces of our lives – secular and sacred, personal and professional, academic and practical. In the next few paragraphs, I’m going to advocate for a wide range of activities that will build a more unified, holistic life. A life that allows you to be the same person at home, at work, at play and at worship. This approach will make you a more effective leader in your organizations since you will be engaging a “whole person” no matter where you are.

Take thirty minutes and decide which of these activities are most needed, most interesting and most motivating and get them on your schedule. There will be immediate impact on your personal life, your family and your business.

Strengthen your spiritual life

Animals live by instinct. They can’t make moral and ethical choices. That’s the sole territory of us as human beings. The moorings for those moral and ethical choices come from our spiritual life. I find my moorings from my Christian faith. Find yours. Here are some recommended resources –

  • The Old Testament book of Ecclesiastes – the richest and wisest Old Testament King of Israel discusses the meaning of life
  • Searching for God Knows What by Donald Miller
  • The Reason for God by Tim Keller

Get healthier

We’re living in a time where, because of social distancing, gyms are closed. But now, with stress levels high, we desperately need not just the physical benefits of exercise, but the mental and emotional benefits. And with more free time, especially while we’re binge watching, we need to monitor what we’re eating.

  • Your local gym might be offering online versions of their workouts. It’s not only a great way to keep in shape, but also a great way to support a local business.
  • At the local park, take a walk or bike ride with your family.
  • Involve the whole family in healthy meal planning and, since we can’t eat out, cook the meal together.

Stretch your brain

There’s a huge temptation right now to spend a lot of time worrying about things we can’t control. To keep from worrying, we distract ourselves with things like binge watching. Instead, let’s spend some of that time getting smarter. Then, when life returns to normal, we’re ready to jump in – more prepared than ever before.

  • Read a book – I have some specific recommendations depending on where you are in your professional life.
    • Early in your career – So Good They Can’t Ignore You by Cal Newport, Range by David Epstein
    • Later in your career – Late Bloomers by Rich Karlgaard, Range by David Epstein
    • Managing and developing your team – Drive by Dan Pink, First Break All the Rules by Marcus Buckingham
    • Impacting others – Getting Naked by Patrick Lencioni, Trillion Dollar Coach by Eric Schmidt
    • Thinking strategically about your business – Good to Great by Jim Collins, Great by Choice by Jim Collins, How Google Works by Eric Schmidt
    • Value Creation – Think Beyond Value by David Flint, Competing Against Luck by Clayton Christensen
    • Marketing – Building a Story Brand by Donald Miller, This is Marketing by Seth Godin, 113 Million Markets of One by Chris Norton
    • Personal Productivity – Deep Work by Cal Newport, The One Thing by Gary Keller
  • Take an online course – learn how to program from codeacademy.com. Even if you have no interest in computer programming, the discipline of writing code teaches thoroughness and helps you think you through things in order. Or maybe exercising the right brain is in order – take an art class or learn to play an instrument. YouTube is loaded with free resources.

Get a mentor/be a mentor

Every one of us needs someone pouring into us and we need to be pouring into someone else. Look for potential mentors/mentees at work, your place of worship or in a networking group. You can start now with virtual meetings.

  • Clarify personal and professional goals and make a plan to take the next step.
  • Ask for help identifying blind spots.
  • Be humble and share failures and mistakes.

Create margin to do great work

Work might be a bit slower now. Utilize that time to create valuable work products. Hone the messaging on your website. Redesign your employee onboarding material. Redesign your customer onboarding material. Write a new class for employee development. Plan and outline a year’s worth of blog posts.

  • Block out big chunks of time and don’t allow any distractions.
  • Spend time alone to create – There is science behind the great ideas we have when we’re showering or mowing the yard. So, to kick-off some heavy-duty creative time, take a walk (no phone) or do some yard work.
  • Aim for “flow” – work that is interesting, engaging and not-too-hard or not-too-easy.

Don’t set new goals – instead create a personal and professional strategic plan

Goals are great but strategic plans are better because they have baked inside them the steps to get from where you are to where you want to be.

  • Start with your desired exit (which might be a long way away) and work backwards.
  • Set incremental goals and identify the skills and experiences needed to reach them.
  • Plan specific steps to acquire the skills and experiences you need to reach the first incremental goal.

Deepen relationships

All of us need meaningful relationships. Spend time with family and friends.

Your business rises and falls on your leadership. Keep learning and keep growing.

Give me six hours to chop down a tree and I will spend the first four sharpening the ax. – Abraham Lincoln

The One Year, Thirty Minute Challenge :: Week 12 :: Operations :: Genchi Genbutsu

In the last few One Year, Thirty Minute Challenge exercises, I’ve encouraged you to assemble some trusted team members to complete the exercise. This one is a solo effort. In fact, going solo is at the crux of this exercise.

The inspiration for this week’s challenge comes from the Toyota Production System (TPS). TPS is the poster child for operational excellence. One of the tenets of TPS is Genchi Genbutsu. It literally means “real location, real thing”. You might have heard the usual shorthand for this tenet, go and see”.

Why is it mandatory for an owner, manager or supervisor to “go and see”? Because some things can only be understood by being experienced. Many years ago, I managed a call center. There was a central group of 35 phone agents and 5 ancillary groups with more specialized tasks that together also numbered about 35. For the three years I ran the call center, almost every Wednesday morning (our busiest weekday), I took calls with the operators for three or four hours. I sat in the same cubicles, used the same chairs, talked on the same telecom equipment, typed on the same hardware, used the same software and talked to the same customers. It was the mother of all educations. And the benefits were enormous. I got big time “street cred” with the customer service reps. I knew what equipment wasn’t working well. I knew what worked well with the software and what needed to be changed in the next version. I knew what customers were happy about and what they were frustrated about. It became impossible for my staff to buffalo me. I was able to argue persuasively when I talked to my boss about resources. I would have had none of this had I not “gone and seen”.

Over my thirteen years as a consultant, I’ve checked-in resort guests, unloaded trucks, stocked shelves, talked to client customers about software problems, responded to client customers on social media and more. Why? Because I was working with clients to design processes they could roll out to teams and those processes had to be right. They had to work for employees and customers, and they had to be able to scale. After the work, when I was rolling out those processes to additional teams at the client site, they had been battle-tested and I had the scars to prove it. Afterward, when I was back in the boardroom with owners and CEOs, I was able to report on my work with confidence because I knew that what the client teams and I had created together was bulletproof. When I was advising the client to invest additional resources, I had both empirical and anecdotal evidence that the resources were needed.

The exercise for this week is very simple. What is that operational problem that won’t go away or that process that just seems clunky? The best way to solve it is “go and see”. You might be spending time with your sales team calling prospective clients. You might be on the factory floor examining people, production steps or equipment. You might be hanging out in the accounting department looking at the way you process vendor invoices. You might be evaluating vendor performance. Whatever it is, approach it with the least amount of prejudice possible. Ask a lot of questions and listen intently to the answers.

Here are some questions to answer as you flesh out the operational problem and begin to design the solution. As Charles Kettering said, “A problem well stated is a problem half-solved.”

  • How did we first become aware of this problem? From a customer? From an employee?
  • How can I get the “deepest drink” from this on-ground experience?
  • How long will it take to get an accurate picture of the circumstances that surround this problem?
  • How are employees impacted?
  • How are customers impacted?
  • How is revenue impacted?
  • How is expense impacted?
  • Are we more concerned about “fixing the problem” than “fixing the blame” and have we communicated that clearly?
  • How much of the problem is self-inflicted?
  • Is it attributable to poor product quality or poor service delivery upstream?
  • How quickly can we rectify the product or service problem?
  • Can we identify other upstream causes of the problem?
  • Can we identify other downstream consequences of the problem?
  • Is it traceable back to a vendor?
  • If so, do we have an alternate source that will solve the problem?
  • Can this problem be solved with money?
  • Can this problem be solved with a process change?
  • Is the problem caused by a management failure – lack of resources, poor working conditions, failure to deal with a problem employee, unrealistic expectations, lack of training?
  • Is this problem tied to a “sacred cow” that needs to be sacrificed?
  • Are we hesitating to “pull the plug” because of sunk cost?
  • Have I asked the people most intimately involved how to solve the problem?
  • If not, why not?
  • Can we enlist someone from another discipline to look at the problem, leveraging expertise from an “outsider”?
  • Is this a value-creation activity that should remain in-house or is it a candidate for outsourcing, especially if the outsource provider could do it better and eliminate the problem?
  • After we have a rudimentary understanding of the circumstances surrounding this problem and begin to address it, how can we stay connected to it to make sure the corrective actions are working?

Go and see isn’t effective just for solving operational problems, it’s also a reliable way to design processes for new initiatives.