Tag Archives: Development

How Do You Optimize Your Pipeline? Six Suggestions

Situation: A company’s goal is to replace an old, established market with new technology and, by owning the technology, to reinvent the industry. Given this aggressive goal, there is a temptation to go into volume production before establishing the cost advantages to make the technology profitable. The challenge is to establish disciplined, stable, qualified, scalable and profitable manufacturing. To accomplish this, the company must decide between alternatives as they cultivate new customers. How do you optimize your pipeline?

Advice from the CEOs:

  • There are two sides of the market:
    • Mega-markets dominated by large corporations which have long lead-times and potentially huge payoffs; however, these markets present long payoff delays for the company.
    • Smaller, quicker markets with limited volume but which will offer rapid PO acquisition and proof of concept.
    • The question is how much effort to devote to which market.
  • Look for early customers who are cast in your own light – disruptors who can help to catapult you into the marketplace
  • The trade-offs are strategic vs. tactical opportunities.
    • The immediate tactical need is to generate cash to show that you can. This is the steak.
    • The strategic need is to seed a foothold in a mega opportunity – to show the potential to revolutionize the market. This is the sizzle.
    • Identify a killer app that will gain tactical advantage and cash and help prompt maturation of a strategic opportunity.
  • Another CEO shared experience landing a large client.
    • They used a short, low cost pilot project to prove the concept to skeptical client staff. The client was surprised and delighted by the success of the pilot project. The pilot project was then articulated into larger projects.
    • Over time the company used incremental steps to gain a broad presence within the large company.
  • Strategy recommendations:
    • Focus business development on selling killer apps.
    • Find low hanging fruit for quick proof of salability and to show a revenue ramp.
    • Small design wins exercise the machine.
  • Is it possible to conserve cash to raise the impact of early wins to the bottom line?
    • Are all current staff during the next 12 months?
    • Early on, the game is business development – gaining key contracts and agreements with lead customers. Sales follows, with focus on the larger market. This may be 6 months to 2 years out. How many people are needed to focus on business development?

How Do You Decide Between Strategic Options? Five Thoughts

Situation: A CEO is faced with three strategic options that the company could pursue. He seeks guidance on how the company should evaluate the three options. What signs should they be watching for in their marketplace? Are there steps that they should take while completing their evaluation? How do you decide between strategic options?

Advice from the CEOs:

  • Go with what sells! Listen to the market, and your key customers. Make sure that you have ears out there that will give you early signals.
  • Until there is a clear indication from the market place as to which is the stronger strategy, keep your options open. A hybrid strategy – maintaining your current strategy while evaluating the strongest strategic option – will allow you to do this and continue to drive revenue from your existing base while the market determines dominance among the new platforms.
  • Look at the cash flow from your current strategy and each of the new options that you are considering.
    • What difference is there in upfront payments versus ongoing residuals?
    • Look closely at your cash flow needs compared to the timing of receipts from each option.
    • Are there ways that you can strengthen your cash flow depending upon which strategy you select? How will you bridge the gap between current and future cash flows from each strategic option?
  • Consider hiring a full-time manager in business development.
    • This will help you to learn more about your customers and what they will buy.
    • Select someone who has relationships with the key people in your target markets, and who knows what the insiders are doing at important existing or target customers.
    • Select someone who can give you access to new opportunities and help steer your strategic development.
  • Consider a long-term strategic partnership with a leader in your market.

How Do You Expand into New Markets? Three Perspectives

Situation: A CEO is evaluating a horizontal market development opportunity to markets related to their current market. There may be branding implications. The new opportunity focused on a different sector and can add business unrelated to current customers. However, the new opportunity will stretch current resources and potentially impact current business and service delivery. How do you expand into new markets?

Advice from the CEOs:

  • Pros:
    • Because the new opportunity utilizes known capabilities the company should be able to segue into the new market relatively easily.
    • Because the company is already familiar with security and other issues relevant to the new market, compliance should present no challenge.
  • Cons:
    • Consider the impact on company time and resources. Building any new business will challenge current priorities and will require a careful balancing of efforts to assure that both current and new customers’ needs are being met.
    • Build workload and service schedules for both existing customers and the effort that it will take to develop the new opportunity including the time needed to create and build new customer relationships. Take your best estimate of resource utilization for the new effort and double it, then ask whether your current staff and capacity can handle both markets. If the answer is positive, then you can be more comfortable with the decision to expand into new markets.
  • As you evaluate the new market opportunity, look at both anticipated and unanticipated but predictable challenges that customers may face over the next five years.
    • For example, is there misalignment between future challenges likely to be faced and the current expertise and skill sets of managers who will be tasked with addressing these challenges? If so, tailor the sales pitch for new capacities to address these challenges.
    • Are there existing mismatches between products and services currently offered in the new markets, and do proposed solutions help to address these mismatches? If so, there may be significant opportunities in addressing these mismatches across multiple customers within the affected markets.

 

How Do You Create a Bias for Action? Five Recommendations

Situation:  Much of a company’s work is non-standard. Each customer’s solution is individualized. Finding the best solution in each case frequently requires a stretch. The CEO’s approach is to simplify the problem to its essential components and from this develop a unique solution. However, several of the staff responsible for developing solutions shy from this approach when confronted with a new challenge. How do you create a bias for action?

Advice from the CEOs:

  • Company culture is defined by the CEO. In this case you wish to establish a culture of innovation. This might be defined by the phrase “we don’t do simple things.” This means that you need innovators or creative people in the problem solving positions.
  • Consider breaking the roles apart. You need experienced and balanced but creative people to develop the unique solutions. People like yourself. On the other hand, you need methodical, reliable people to put the solutions into effect. These two roles usually require teams of different personalities. They don’t conflict, but are different.
  • Look at Landmark Worldwide as a resource for your staff. Landmark specializes in teaching people to expand their horizons. This doesn’t mean changing who they are, but facilitating their ability to team with others with different but complimentary talents to achieve original and effective results.
  • To help the team understand what you want to accomplish, bring in an organizational development consultant to help communicate your vision and assist with culture transformation.
  • It is important to recognize that these individuals are likely as uncomfortable with this situation as you are. This realization helps to craft a win-win solution that will strengthen the company.

How Do You Focus Your Sales and Marketing? Eight Thoughts

Situation: A company has a technology road map and a flexible set of technical capabilities. To date they have elicited broad interest from a variety of different markets. They currently don’t have the resources to pursue a large number of different markets, and will likely need their next round of funding within the next year to year and a half. How do you focus your sales and marketing?

Advice from the CEOs:

  • A race to generate interest from a number of markets is a valid strategy at this stage of your development; provided that you raise or generate the cash to survive. This caveat describes your critical challenge – determining how long you can afford to maintain and fund a broad strategy.
  • Look at your burn rate and timeline. Pursue options that will generate cash before your next round of funding. Your top objective is to validate your ability to generate revenue prior to your next round.
  • You haven’t yet found the fish. You are fishing and have nibbles but no bites. Look at what your people are doing and start to eliminate options that are less likely to pay off both short and long-term.
  • To preserve development cash, create a new rule. Any project that you accept must come with development dollars. This will eliminate some smaller prospects and targets but will help you to focus on others which are more immediately promising.
  • When one company was in this position, their rule was that the first PO gets the engineers. No PO, no commitment of resources.
  • Another’s company’s policy is that they don’t work for free.
    • A softer version is to give the prospective client 30 days to produce an LOI for the proposed project or you will go elsewhere.
    • Even better is an LOI and $50K up front.
  • A third company’s strategy from the beginning was always to hunt for elephants – even when they had no money. This has worked well both short and long-term. It represented the level of faith that they had in their technology and capabilities.
  • The team needs to hear this message from you.

How Do You Fund a Start-Up? Four Suggestions

Situation: Early stage companies often find it difficult to raise funds from traditional sources. An experienced CEO wants to help certain new companies of which she is aware in two ways – assisting them in receiving funding, and then helping to assure that they reach key milestones.  What is the best way to profitably address this ambition? How do you fund a start-up?

Advice from the CEOs:

  • Build relationships with a few select sets of local investors – venture capitalists, angels, and private investors – with whom you have strong credibility. For a retainer or fee, agree to bring them a number of new pre-vetted companies in the next year, and post-finding, help the companies to succeed and hit milestones. From the companies that you bring to funders, ask for equity in return for securing funding and providing guidance.
  • Put yourself in the shoes of the person who will pay you – what do they want and how do you deliver this for them? Develop statistics from your past successes that highlight your capabilities. Don’t be shy about your accomplishments.
  • What are you passionate about? If the answer is development – linking technology entrepreneurs to strategic partners and then being an accountability partner to assure that milestones are met – this will be your focus and your pitch to both funders and tech companies.
  • Your value is linking the entrepreneur to the funding source and being an accountability partner.

How Do You Hold High Performers Accountable? Five Guidelines

Situation: A company has a key employee who is a high performer; however the company has not developed a good accountability structure to direct this person. The CEO wants to add additional accountability to cover everyone, both current employees and new people as they are hired. The system should be fair and apply to all. How do you hold high performers accountable?

Advice from the CEOs:

  • High performing employees are essential assets to a company. They thrive on meeting and exceeding expectations. However they need to recognize and accept accountability for the inevitable mistakes or misjudgments that will occur.
  • Lay out the challenge, and ask your high performing employee, and this individual’s manager, to help design the system for monitoring accountability around results.
  • Within position descriptions, include not only the role and expectations within the description, but also expected progressions for development. These should be objective, measurable and based on specific skills or capabilities within the development progression. Gather input from current employees as you create position descriptions, so that they reflect the experience of employees rather than idealized generalities.
  • Set your expectations for new employees appropriately. Expect perhaps 60% of optimal performance early on. As new employees gain understanding of the company and their roles, coach and expect them to increase their performance over time. Provide training to assist their development.
  • James Fischer, in Navigating the Growth Curve, argues that expectations, for the CEO, management and employees, change as a company grows from start-up to a large firm. If a company is small, it doesn’t want the same structure or processes required to operate a 250 person company. Too much structure stifles creativity and growth if applied to small, nimble companies. Institute a level of structure appropriate to the size and stage of the company.

How Do You Respond to a Competitor’s Sales Tactic? Six Ideas

Situation: A company has learned that a competitor has cloned their client development approach. This approach enabled the company to gain early market share. They have since moved up-market and have enhanced their sales tactics. How should the company respond to the competitor’s tactic?

Advice from the CEOs:

  • Reconnect with the market contacts that got you where you are. Be sure that they are aware of your track record, the value that you provide your clients, and reinforce your current market development focus. Now that you are established, position yourself as the proven producer who consistently produces results.
  • Study what the competitor is doing, who their target customer is, their close rates, and what if anything they are doing to enhance their close rates. Learn from them and copy or improve on their practices where this will yield benefit.
  • If your sales development is based on referrals, enhance the rewards to contacts who bring you new business in your prime target markets.
  • Your principal concern may not be your client base, which is likely unaware of the differences in your versus your competitor’s approaches, but in the referral structure that is your primary source of new business. Focus effort and resources to shore up your relationship with your referral base.
  • Focus on your strengths – performance and excellence in managing client relationships.
  • If the competitor is focusing on down market accounts that you no longer cultivate, then expect them to succeed in this market. Become the provider of choice to up market accounts and the natural referral choice for these accounts. If the competitor stumbles, you may pick up unexpected business.

How Do You Work with an International BD Person? Seven Ideas

Situation: A company has been approached by an international business development specialist who wants to help them expand into Asian markets. The company would need to hire local resources to support business that was generated. Most of this would be cookie cutter as opposed to creative work. How do you work with an international business development person?

Advice from the CEOs:

  • Research the country markets where the specialist can help you and focus on the more developed and promising markets first.
  • If the specialist that has approached you has a local presence in the markets in which you are interested, lean on this person for help getting you started – office space, staff support, and so on.
  • One company started a subsidiary in Canada. The CEO believes that you must have a highly trusted person to own the project. Success is all about the relationship with this individual and their knowledge of both local and American culture.
  • Another company hired very promising business development person for a large Asian market. As the relationship progressed, they found that this individual was double dipping – working for them and their competition at the same time. Apparently this is acceptable in that culture.
  • Many cultures are relationship based. Local contracts are critical. Does your specialist possess these, and are they premier companies or also-rans.
  • Talk to individuals in your industry who have experience in the region.
  • Have your eyes open and recognize that this is will not be a quick process.

How Do You Develop Products with a Foreign Firm? Five Ideas

Situation: A company has been approached by a foreign company that is interested in their expertise. The foreign firm says that they are only interested in their own domestic market, and want the company’s help developing new products for their existing domestic clients. How do you develop products with a foreign firm?

Advice from the CEOs:

  • There is great variability between companies in different locales and on different continents. Before proceeding with negotiations, get references from the company and check them carefully. Research the company and its local market.
  • Relationship will be critical. You want to meet with their CEO. This is an important factor working with any company. Watch the commitment level of the CEO and top staff. Take an expert with you – someone knowledgeable about local mannerisms who can read the body language in meetings. Position this individual as someone who is assisting you in the negotiation.
  • If you proceed with negotiations toward an agreement, make your enforcement jurisdiction either the US or a neutral country with a western judicial system. For example, if the company is Chinese, make the enforcement jurisdiction either Hong Kong or Macao.
  • Will intellectual property be a factor? If so, get an IP attorney knowledgeable about both the market of the other company as well as your preferred enforcement jurisdiction.
  • Could this help you to augment or fund your own development? If so, ask for rights to produce and distribute products developed through the collaboration in the US and other markets outside of partner’s domestic market.