Situation: A company is planning for growth and is considering several business opportunities. None are fully baked, but broadly speaking the CEO is interested in a list of pros and cons that will help her team to evaluate the opportunities before them. What questions should the management team be asking? How do you evaluate business opportunities?
Advice from the CEOs:
Which of the opportunities do you find exciting? Which opportunities ignite your passion? Which opportunities would be exciting to pursue on a daily basis? Use this to create your first cut.
When you meet with your team, prompt discussion by asking: why do you come to work each day? What drives you now?
Now look at each of the opportunities that you are considering. Which opportunities best reflect your answers?
Rank the opportunities in terms of probability of success. For each, do a SWOT analysis – how does each address your current strengths, weaknesses, opportunities and threats? How could each make the company stronger or address potential threats that you foresee?
Which opportunity provides the best segue to your long-term strategic opportunities over the next 2-3 or 3-5 years?
On a personal basis, how important is power and authority to you? What about the personal and work time that is available to you? What is your role, as CEO, in each opportunity? For each opportunity, does this role reflect your personal priorities? Finally, what is your ideal opportunity, in personal terms?
Once you have evaluated all of your opportunities – including your personal ideal opportunity – perform a weighted scoring of the opportunities to test your assumptions. Among the opportunities available, which is closest in score to your ideal opportunity?
Situation: A CEO is building a new company. She has a small, highly qualified team, and much of the work is hands-on. In addition, there is fund raising to support the venture. The CEO also makes time for exercise and keeping in shape. With all of this on her plate she is getting overwhelmed. How do you focus on priorities in an early stage company? How do you make time for priorities?
Advice from the CEOs:
Maintain your exercise and health – this makes everything else easier.
Decide on your strategic platform. This creates a larger conceptual framework and helps to clarify priorities.
Identify the gating items. Focus effort here and spend scarce resources strategically to push your goal.
Within your gating items, identify the factors that make you scalable. Focus most of your effort here.
Create a weekly focus.
Lay out your to-do list in a Covey quadrant – most and least important vs. urgent and not urgent. Review this weekly to eliminate or delegate less important priorities.
Operational issues are usually symptoms – identify the causes and fix them.
Daily, list what you’ve done. Look back every 1-2 weeks and assess how you spent your time. Eliminate time wasters.
Don’t let you passion be undermined by the drudgery.
As an early stage company, you have to react – understand and appreciate that some aspects of early stage company life will not be very strategic.
Fix things rather than adding people and complexity. This compliments Fisher’s Stages of Growth recommendations for a company of under 11 people.
Situation: A company is planning to pitch a Blue Ocean service to a major prospect. The service has a proven track record with industry leaders and is not being offered by other vendors. How do you pitch a Blue Ocean service?
Advice from the CEOs:
Start by listening to the client’s current situation. Here are some opening questions:
How did you get here? Just the 2-3 minute version. As a follow-up question, ask what their past performance has been.
What is your most important competitive strategic advantage? Follow-up: what is your future competitive advantage – the same or different?
If everything goes right, where do you see things in 2-3 years?
What obstacles, roadblocks and constraints will keep you from getting there?
Include graphics in your presentation on both the prospect’s current situation and how your proposal differentially impacts their ability to reach their future objectives.
In your presentation, highlight your ability to offer a very competitive overall cost proposal based on your ability to outsource work to lower cost subsidiaries or partners.
Emphasize your track record providing the proposed service to industry leaders.
Be sure that your overall proposal looks sound and responsive to the prospect’s need as you understand it. It will be important to understand whether the individual with whom you are meeting next has the same perspective. Try to determine this before your next meeting.
Adding an additional vendor within your proposed framework doesn’t upset the apple cart. It probably benefits everyone as long as it benefits the prospect.
Note: The term Blue Ocean Strategy comes from a book published in 2005 and written by W. Chan Kim and Renée Mauborgne, professors at INSEAD and co-directors of the INSEAD Blue Ocean Strategy Institute. The authors argue that companies can succeed not by battling competitors, but rather by creating ″blue oceans″ of uncontested market space through the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand.
Situation: A small company uses a sales plan, but not a marketing plan. The CEO wants to know about marketing plans, and how they are different from sales plans. Most importantly, if a company has both, how do you coordinate sales and marketing plans?
Advice from the CEOs:
Sales and Marketing Plans are two aspects of the annual planning and revenue forecasting process. The difference between the two is focus – strategy versus implementation.
The Marketing Plan is strategic. It defines and quantifies the market that the company addresses, and also what markets the company does not address. It identifies the key attributes of the company’s market and products or services, and sets the broad direction as well as the high level objectives for the planning period – usually one year. It also covers both current products and product additions or extensions. The focus of the Marketing Plan is one-to-many.
In contrast, the Sales Plan is focuses on execution of the Marketing Plan. Ideally, the sales team takes the Marketing Plan and sets individual and team sales objectives that will meet the revenue objectives set in the Marketing Plan. The focus of the Sales Plan one-to-one – what each sales representative, and each division of the sales team (unit, district, region, country, and so forth) commits to sell during the coming year.
To coordinate the Marketing and Sales Plans, it is best to draft the Marketing Plan before asking the sales team to draft their Sales Plan. It helps the two teams to coordinate their projections for the coming year and allows the sales team to project sales based on changes to the product mix included in the Marketing Plan.