Situation: The CEO of a service company needs to expand its market base due to concerns that a significant service and referrals partner may decide to stop working with them. A break-up would have significant impact on salaries, effort and focus. The company’s priority is to expand client growth to minimize the impact of a break-up. How do you expand your market base?
Advice from the CEOs:
To expand or build a market requires a champion. Someone like the company’s founder who has the passion and contacts to build new business.
Second, incentives must be established to reward success bringing in new clients. These incentives must have teeth – no success, no incentive. No safety valves.
Third, create a plan to support the new business development – including marketing, event attendance, etc.
Initially, be selective and target just a few highly desirable new clients to test and refine the client attraction model before expanding to the broader potential client audience.
Build a set of case studies of services and results for new clients.
Track and prove out the profitability and workability of this model.
How should the effort to expand the market base be constructed?
Start with preparation. Research the current prospect list to assure that they are good prospects. Also look at the current company culture – do the company’s strengths align with what is needed to attract and serve new clients?
If the research shows that a significant number of prospects are different from current clients, think of this as a new channel. Create a different business unit to specialize in serving these clients. Hire a team to focus exclusively on the new client group, with proper incentives tied to achievement with these prospects.
Another company had a similar choice. They created a program to increase their market base and went after it with full focus. It took five years to accomplish vs. the two years that they had planned. Nevertheless, the results have been worth the effort and expense. If the company believes in the model, invest in it.
Situation: A growing technology company is faced with several opportunities. The CEO is too busy to devote the time to analyze each of these. In addition, the CEO wants to develop her staff so that they can take on more responsibility and mature into a full organization. How do you choose between opportunities?
Advice from the CEOs:
Everything starts with a strategic plan for the company. Either the CEO or an outside consultant should coordinate a strategic planning session to develop and rank the opportunities facing the company. The ranking exercise is best done as an open departmental or company-wide exercise so that everyone is involved in the process. This helps to build consensus and commitment to the opportunities developed.
Once the opportunities have been identified assign one to each of the employees that you want to develop. Each of the employees will be the champion for that opportunity.
Ask each champion to develop a business case and plan for their opportunity. This will include a development plan and ROI analysis. Allow each champion to access all company resources as they develop their plans. Set a deadline for all champions to complete their plans.
Once the plans have been completed, reconvene the group that participated in the strategic planning session and have the champions pitch their plans to the group. The group will provide feedback and suggestions for each plan. At the end of the session repeat the ranking exercise based on the new information developed and presented.
This will provide a wonderful training opportunity for the champions as well as valuable insight into their talents and potential for future development. In addition. Because the strategic planning sessions will be conducted as a company-wide exercise, they will act as team-building exercises and excite everyone about the potential facing the company.
Situation: A company has built a strong prototype line capable of handling projected volume for the near-term as they scale up production. Their long-term plan is a fabless model through manufacturing partners. They have solid IP counsel and protection. What are the most critical elements of scale-up? How do you generate scalable manufacturing?
Advice from the CEOs:
The answer will depend on the product strategy, if the near-term focus is on quick tactical wins.
The most critical elements of the scale-up will be:
The planned speed of the scale-up. A tactical approach, which will make limited demands on production near-term supports a prudent scale-up plan.
Having the right business development talent to generate quick wins with smaller volume opportunities to feed the scale-up.
When you are ready for larger volume – and your scale-up capacity can support this – hire an experienced sales professional who is known in the industry and who can bring you some relatively quick higher volume contracts.
Que near-term contracts according to the sales cycle.
Design cycle – build awareness of your capacity among significant market players and focus on quick turn-around to respond to their demand.
Qualification cycle will be longer, perhaps 6 months. As your brand awareness builds push for qualification orders which will be larger, but still within near-term capacity.
Focus business development efforts on building strong awareness across your target companies. Some companies tend to limit early knowledge of vendor capabilities between their divisions until they have confidence in the vendor’s ability to deliver. Optimize customer awareness by:
Cultivating business partners who can facilitate a high-level approach within your target customer companies.
Start creating a small forum of industry savvy individuals who can become your champions. Leverage this forum to spread your message and bring you opportunities.
Situation: A CEO knows that his employees have been working hard and have been productive all year. Now that we’re coming to the end of the summer, he’s concerned that in the past he has seen an energy drop every August. What can be done to increase the voltage? How do you counteract the Dog Days of August?
Advice from the CEOs:
Anoint a “Champion of Fun.”
The Champion of Fun should be an employee – not management.
This may be a team of two people who focus on different things – one for small, day to day activities, and one for big events, like a Habitat for Humanity day.
Provide a budget for the Champion. Allow discretion to create excitement around the office or workplace. This includes posters announcing events and other ways to make the most out of each event or activity planned.
If out of office activities are anticipated, encourage employees to involve family members if they wish. Maybe a picnic and softball game at a local park, or an early evening of go-kart racing.
Create a sense that your employees have some control over their environment. This adds energy.
Circulate an Office Depot catalogue and give each employee a budget that they can spend to dress up their space.
It’s amazing how much a small investment like this can rejuvenate people and the overall atmosphere.
Bring in lunch as a surprise a couple of times during the month. Take some extra time and let people enjoy each other’s company. This is for deepening personal connections, not for lunchtime business discussions.
Situation: A company has a long-standing relationship with key partner which has become strained for the last 9 months due to a combination of conditions. The partner’s Board recently terminated their CEO and their management is now in flux. Is there an opportunity to reestablish the old relationship by approaching the partner’s Board and how would you go about reestablishing this key partner relationship?
Advice from the CEOs:
At this point, the Board of the partner is likely focused on selecting a successor to the CEO, and dealing with internal matters in the interim. It may not be timely to approach them now, as they may dismiss your entreaty as a distraction.
If this tactic is to work, you will need a champion within the partner to promote reestablishment of the relationship. Try to identify such a person and approach them individually instead of approaching the full Board. The champion may be a Board member or someone with whom the Board has a strong relationship. This carries less risk than approaching the full Board. If the champion is not receptive, your likelihood of success with the full Board is slim.
Is there a past President or senior executive of the partner company with whom you have very good relations? An individual like this can act as a quasi-third party to help you to reestablish relationships with the Board or key management of the partner company.
Because of the risk involved, it may be best to do this quietly through a party whom the potential champion will respect and listen to, and take the lead from the champion if this individual is supportive of your cause.
Situation: A company has an opportunity to form a marketing partnership with another firm. The primary potential benefit to the company from this partnership is gaining access to new customers. On the other hand, partnerships may bring complications. What is your experience with marketing partnerships, both positive and negative?
Advice from the CEOs:
Marketing partnerships can certainly work, provided that both parties see benefit to the relationship, and both are committed to make it work.
Be sure to clearly define boundaries with the partner.
If either company can perform a particular service, whose customers are who’s?
Is there alignment throughout the partner’s organization regarding the partnership? Or are their conflicting priorities within different branches of that organization? Test the waters ahead of time and assess how these will potentially impact the partnership.
There are potential pitfalls:
What is the in-house/outsource attitude of the partner? If there are strong voices for in-house production or service provision, these will not be supportive of the partnership.
Watch the quality of the partnership over time.
Successful partnerships are based as much on friendly cordial relations as on business priorities. Are your business cultures and ethics compatible?
Who is the champion for the partnership on the other side? What will happen if the champion leaves? Is there a back up champion?
Build an exit strategy into the partnership that will allow you to leave gracefully and mitigate financial or good will consequences if the partnership sours.