Interview with Eric Bauswell, President, SurfaceInk
Situation: For a domestic engineering solutions company, one of the challenges is engaging potential customers with the idea that a domestic solution can cost-effectively meet their needs. If you can combine a manufacturing solution to the service solution, this helps. What have you done to effectively communicate your solution to potential clients?
Know your clients. Clients have expertise of their own. However, they may lack expertise in all the disciplines necessary to create a full product. How will you fill the gap?
Know your strengths.
Design is an iterative development process. If you increase process efficiency you can complete more process cycles in a given timeframe, advancing to final product more quickly.
Identify your key differentiators. Target clients for whom your differentiator is a critical need. For example, we do not encourage all of our clients to manufacture overseas, but if they insist and lack experience managing overseas vendors, we can handle this for them.
Consistency of personnel across the life of a project is important, particularly the core team.
“Invention & Innovation” require a plan to mitigate the risk they represent. Develop the design along parallel paths, stage higher risk components or pieces of the design that represent critical path inventions such that they are proven prior to moving forward, or even take that feature out of the current design in order to develop it to a production ready solution for the next product on the client roadmap. Sometimes an invention or innovation is THE reason for the new product. In these cases the key is managing the client’s expectations regarding the significantly elevated risks that come with invention and proceeding with the understanding that the phase gates and even the production dates will slide according to the progress against developing that critical path invention or innovation.
Expertise in material selection and understanding what can be done with materials in the manufacturing process is non-trivial, as is vendor qualification, particularly with new materials.
Know your competitors. How do they handle similar challenges to those that you face?
Know your vendors. “Right-sizing” your contract manufacturer to your client’s product is important. Things will go wrong, and you must assure that the contract manufacturer will give you the priority to get things back on track to meet your launch date.
Situation: The CEO wants to build the team, identify leaders within the company, and develop managers. What are best practices to develop your staff?
Advice of the CEOs:
A great resource is “First Break All the Rules” by Marcus Buckingham. Among the key findings:
Great leaders are not the same as great managers. Good leaders are outgoing and goal-oriented whereas good managers are people-oriented.
Expecting good leaders to be good managers and vice versa is not effective. Only the exceptional individual exhibits both sets of talents.
The traditional business structure assumes that talented people will want to “move up” the organizational chart. The reality is that some people are very good at a particular level of responsibility, and are happiest with this responsibility.
How do to enhance your team’s leadership and management capabilities?
Evaluate your team for candidates who possess the qualities of leadership or management. Tailor your training to enhance the natural strengths of your candidates.
Draft agreed upon written responsibilities and performance objectives.
Regularly follow up and provide feedback.
Establish trial projects for new candidates that will allow them experience additional responsibility, and allow you to see how well they perform. Make the steps small at first. If they show talent, make successive steps more challenging.
Look at your organizational chart. Does it provide room for both leaders and managers? Does it provide room for the skilled role player who thrives in a particular role? If not, how will you fix it?
Situation: We have built a good online community. Between our site and newsletter, we are in contact with tens of thousands of executives weekly. We constantly seek new ways to encourage active participation in our discussions. What have you done to effectively build regular participation in meaningful discussions?
Know your audience and focus on topics that engage people. For example, we do a semi-annual compensation survey and get a great response when we publish the results.
We often learn more from mistakes than we do from success. Also, people love to talk about business blunders, particularly if the discussions include some well-intentioned humor.
Reach out to individuals with interesting backgrounds, experience and situations. Encourage them to post, or feature them in a discussion.
We send out weekly emails with titles and synopses of articles posted in the last week. This enables newsletter recipients to quickly scan topics and click on those of interest.
A common challenge is filtering posts which are trivial, self-promoting and lack relevance to the focus of the site.
The bottom line is that there is no magic bullet. Social networking sites are rapidly evolving so you must continually seek creative additions. This takes time, work and investment.
Now it’s your turn. What has drawn you to a social networking site? What have you done to effectively build regular participation in meaningful discussions?
Interview with E.J. Dieterle, President & CEO, YES Partners, Inc.
Situation: As corporate wallets start loosening up, companies are looking at market expansion opportunities. International expansion is one alternative. In the past this was done largely by sending Expats. In more recent years there has been a trend toward hiring locally. How do you find the right talent locally?
Everything starts with the basics – a good job description.
Finding people is easier these days with social networks like MySpace, Facebook, LinkedIn, Xing, hi5, Spoke and Plaxo. However, finding the right people remains a challenge.
Invest time and effort to research your target market.
Which country is a market or has the most likely prospective clients?
What is your competitive advantage there?
For a hiring company without an existing presence in the local market it is also a challenge to convince good local candidates that yours is the right company to join. It is important to understand the local business culture and values, and also to offer career-paths to qualified candidates.
Don’t assume the need for multiple offices as you start. You can start with a highly mobile person working from home who knows the local language(s), customs, and who already has contacts in your target market.
It is often assumed that it takes one year or more for an Expat to be efficient locally, and that hiring locally often accelerates first years’ startup-time. However, the local person has to understand and “fit” into the corporate/head office culture.
Working with an international executive search firm to find qualified local talent with the right fit to your business and needs can greatly improve your odds of success.
Interview with Dirk Boecker, President, Toto Consulting
Situation: Through the technology revolution in medical diagnostics, products in some markets have become commoditized. For example, a proliferation of low cost blood glucose monitoring products has driven down price while increasing incidence and prevalence of diabetes has driven up demand. How do you create new value in a commodity market?
Taking a broader view of the market is key. Analyze the entire customer experience, not just your segment. Assess markets and industries surrounding your primary offering and look for un-served interfaces and gaps.
Where you find opportunity, elevate your offering to the next level by integrating your product as component. Create a compelling advantage but avoid unnecessary adaptation of your existing product or service.
Blood glucose monitoring is used to support insulin and diet adjustment in diabetics, a disease which is accompanied by a number of complications and complex to manage. Can your monitoring technology become part of a broader service offering, or even part of a personalized solution? Can you move higher up in the value chain?
Begin your transformation at the first signs of commoditization. Being first brings a huge advantage.
Once you identify an unmet need, consider working with related industry groups to create new standards addressing these gaps. Implementing the resulting standards will give you a new competitive advantage against your competitors.
Find other applications for your product or service. Consider new applications for the components used in your current offering. Find new customers outside of your historic customer base. Consider alliances with other companies experienced with the new opportunities you find.
Within your own organization begin a process that routinely analyzes the customer experience and general needs beyond your current offering. Working with an outside consultant can help by adding a new perspective.
Situation: The Company downsized during the recession. The CEO and sales staff are overburdened by administrative and business development tasks. What’s the best way to bring to add resources to support sales and infrastructure?
Advice from the CEOs:
Look at what hats you are wearing. Wear the hats that fit best and take off the others.
If an activity is not core to your success, off-load it. For example: bookkeeping, shipping and receiving, records and basic correspondence.
These are necessary, but don’t generate revenue.
If your core businesses are sales and service, is one more profitable than the other? Can you outsource pieces of the less profitable activity short-term?
Where do you want to be personally in the next 2 years? On what roles do you want to focus? Build a plan to transition you into these roles.
The E Myth Revisited by Michael Gerber is a quick read that outlines the process.
You may not need to bring in a high level operations manager. Consider hiring an office manager to help organize you and your business development staff. For a smaller operation this person can take care of phones, bookkeeping, shipping and receiving and routine correspondence. This will allow executive staff and sales to focus on growing and servicing customer demand.
During the summer months hire high school or college summer interns. They provide an inexpensive source of labor, high levels of energy and creativity, and are eager for work experience.
Interview with Scott Dodson, CEO, AirXpanders, Inc.
Situation: Both in the case of a start-up, and when an existing company adds a new business unit, one of the biggest challenges is supporting rapid expansion during market launch. Talent necessary during the product completion phase may not be sufficient to support this growth. What can you do to improve company competency?
Bring in “been there, done that” expertise to support the current team. In particular, you want to add individuals who have experienced both success and failure in similar markets, and in both larger and similar sized companies. You want people who can be transformational to a company and not someone who can simply occupy a box. Give them a chance to do more, add to their toolbox and they will in turn help the company achieve its goals.
A wide range of past experience with multiple employers is now seen as a benefit, whereas in the past it may have been a liability. It brings more knowledge to bear.
Among people with highly diverse resumes, how do you tell performers from non-performers?
Focus on what they did to transform their past company. Did they build alliances, make change happen or improve the organization during their incumbency? Look at ‘how’ they did it. Chances are, this is a very leverageable skill.
Look for doers. People who aren’t afraid to roll up their sleeves will make the biggest impact in the organization.
Look for people who possess “strategic humility.” Don’t be afraid of mistakes and foster an environment where the boundaries are continuously pushed. The enemy of ‘good’ is ‘perfect’, and the best companies consistently make ‘good’ decisions. If you make a mistake, own up to it, learn from it and move on.
Look for the ability to assess, develop, plan and mobilize resources to execute the plan.
Use LinkedIn to identify people with whom an applicant worked in previous jobs to conduct independent reference checks.
You can also use LinkedIn to identify candidates for open positions.
By adding resources with these traits to your team, you markedly improve your likelihood of success.
Situation: A key customer just asked for a price reduction. Our raw materials costs have increased and eroded our margins. What is the best way to respond?
Advice from the CEOs:
Are you selling a commodity or a unique and differentiated product?
Commodities rarely command a premium above market unless you can bundle with differentiated delivery.
Unique or differentiated products justify a premium because the customer has only two choices: purchase at your price or try to develop an alternate source.
The customer may have valid reasons to request a lower price.
Counter with a combination lower price and lower level product to retain your margins.
If the sale involves service, assign less expensive resources in return for a lower price to preserve margins.
Define the trade-off to the customer so that it becomes their decision, not yours.
Adjust your terminology. Use “run rate” vs. “price,” and speak of balancing resources assigned. Avoid cheapening or commoditizing your offering to meet the customer’s price demand.
Don’t assume that there is such a thing as a “fair price” or “fair margin.” The price is whatever the customer is willing to pay for your offering. The price increases the more unique it is, and the more critical to the customer’s needs.
Do NOT share your cost and margin information – as company policy.
Consider combinations of pricing, terms and delivery that keep you whole while offering the customer different price points.