Tag Archives: Needs

How do you Research the Brutal Facts of a Business? Seven Options

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Situation: A company wants to enter a new market, but does not know much about it. Jim Collins advises understanding the brutal facts of any business as an essential part of strategy. How do you research the brutal facts of a business or market?

Advice from the CEOs:

  • Determine the key players in the market, and closely observe them – their mistakes and successes. Identify and interview clients and look for gaps in products and services offered. Use this research to develop a differential advantage for your product or service.
  • Use allied resources. As an example, for a general contractor this includes real estate professionals and other allied professionals who know the marketplace and the performance and reputations of other contractors.
  • Business consulting firms conduct surveys of markets. Look for and purchase published surveys. If you participate in their surveys you can get the results at a reduced cost.
  • Trade magazines and business journals like the San Jose/Silicon Valley Business Journal publish surveys of the “Top 25” local businesses by industry. These help to assess local competition and gather information about revenues, principals, etc.
  • Leverage industry associations. Attend conventions and learn the lay of the land from the attending sales people.
  • Leverage Internet resources: Hoovers.com, Dunn & Bradstreet, HarrisInfo.com.
  • Have your best sales reps talk to customers in the new market about their needs and desires, and their current suppliers. Ask them to gather information and present to marketing and sales competitive reviews of the market based on what they learn.

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How Do You Differentiate Your Offering? Five Critical Steps

Situation:  A company has had success with a few large clients but wants to expand their customer base for long-term growth. The challenge is that their offering competes in what is commonly regarded as a commodity market. How do they avoid being perceived as a commodity? How do you differentiate your offering?

Advice of the CEOs:

  • One company created differentiation by getting to know everyone in the business. They built long-term relationships, based on reputation and trust. They took the time to understand the needs of customers that they wanted to develop. As opportunities arose, they built relationships and asked questions to clearly define and align with client needs. While this takes time and patience, the objective is to be able to say “We know your business” – with credibility. Here are the steps that they took:
  • Study the businesses, sector, and customers that you wish to serve.
  • Leverage your success with large customers. Talk about how you helped subunits within these large customers. This makes a big customer seem more like a collection of small customers similar to your prospects and makes your experience relevant.
  • Let prospective customers know that you are hungry and will go the extra mile for their business.
  • Learn who currently serves your prospective clientele. Study these competitors, their strengths and weaknesses. Talk to their customers – learn what they love about competitors’ service, and what they would like to see changed. Find the holes in what others provide and fill these holes with a better offer.
  • Look for and encourage repeat business and references to new business.

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How Do You On-board a New CFO – Four Imperatives

Situation: A company is hiring their first CFO. Previously, as a small company the founder and an accountant handled this responsibility. How do they integrate this key person into the company? How do you on-board a new CFO?

Advice from the CEOs:

  • The company and its key players should reflect the values, needs and desires of the CEO. The talents of the CEO and CFO should complement each other. Have a clear discussion and agreement with the CFO candidate on values, role, and organizational structure before hiring or announcing anything to the company.
  • Recommended announcements and timeline: When the new CFO is announced, simultaneously present the new organization chart with broad responsibilities, but not with detailed position descriptions. Set a timeline for realignment of roles. It is not necessary to specify exact roles at the time of the announcement. Let everyone know that this is a work in progress and give a time frame within which all will be resolved.
  • Once the CFO is in place, the CEO and CFO should meet at least weekly to assure that the CFO has the support and resources needed to accomplish his/her responsibilities. All decisions within the CFO’s group, personnel responsibilities and any shifts in roles should come from the CFO, with the support of the CEO. This will help the new CFO to assimilate into the company more rapidly and will give him/her the authority needed to manage his/her organization.
  • The CEO may put the CFO in charge of areas that they want to delegate – accounting, administration, finance and contracts. The CEO should remain involved in banking relationships.

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How Do You Access Key IP? 3 Steps to the Dance

Situation:  A company is moving from a specialty solution to a complete solution. They have identified a partner with intellectual property (IP) that will help them fulfill this vision. How should the CEO approach this company to access their IP? How do you access key IP?

Advice from the CEOs:

  • There are two aspects of any deal: technical feasibility that will produce both value and the emotional needs of the principals of each company. The technical aspects are the most straightforward and easiest to value. Frequently, a favorable deal hinges not on technical feasibility, but on the desires of the principals and their ability to trust one-another.
  • If you are convinced of the value, you must convince the other party that their best option is to work with you. This accomplished, you can negotiate the specifics. Sell your vision: the technologies together are much more valuable than they are alone: 1 + 1 = 5! If control of the technology is an issue, negotiate an arrangement where they are comfortable with your control. Do you and the other party have a trusted advisor in common or is there an individual who is respected by the principals of both companies? A person like this can help communicate your good intentions.
  • If your best efforts do not produce an appealing arrangement, your fallback position may be a partnership. If the partnership is backed by modest investment with options for future purchase, this can be another way for you to eventually gain control of the technology.

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What are Effective Metrics for a Service Company? Seven Suggestions

Situation: The CEO of a service company finds it challenging to measure project profitability and client satisfaction. What measures and metrics have other service companies found to be most useful? What are effective metrics for a service company?
Advice from the CEOs:
• For billable services one CEO measures utilization percent defined as (hours available for service delivery)÷(billable hours). Include in the denominator both billable hours and customer good-will or preventative maintenance hours. The latter, while not producing current income, are an investment in future income. Set up audits for service needs, especially future needs, when working with customers. This will help you to stay abreast of changes in the service environment and to plan accordingly.
• For fixed budget projects – another CEO measures budgeted vs. actual expenditures by project.
• For fixed-fee services a third CEO calculates a fraction expressed as: (income per customer company) ÷ (cost in hours for that customer).
• In a discussion on customer audits and surveys, options offered included: (1) An exit “pizza party” with the client. The challenge is that this may produce tainted results. While this builds customer good-will and may provide qualitative feedback, it should be supplemented by more objective measures. (2) A mailed survey – from a 3rd party with a prize for responding. (3) Email follow-up from a 3rd party that directs the customer to the 3rd party site to complete the survey.
• A final suggestion was ambassadorial CEO visits to the top contact person in key accounts. This provides an opportunity to learn about the customer’s present and future needs, staffing plans, business and strategic direction. Helps to anticipate changes in the competitive landscape. The more a business relies on recurring revenue, the more important these visits are.

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What New Business Options Should You Pursue? Five Guidelines

Situation: The CEO of a company observes that the business climate has been uncertain, but she hopes that it will improve soon. This will open up new options for her company. As these start to develop how do you decide what to do and what not to do? What new business options should you pursue?
Advice from the CEOs:
• Talk to your customers. What do they value about your current product or service and what is less valuable? Build on opportunities that customers value. What options are most consistent with the company’s strength and focus?
• Consider a customer survey – either online like Survey Monkey or by telephone. If there isn’t in-house expertise to design and administer a survey, look for knowledgeable outside resources. Assure that the survey questions will drive understanding of the company’s focus and potential.
• Get an expert to review the survey and administration plan. Before launching the survey to your full customer base, test it with a select group of customers. This will tell you whether it will produce usable information. If it doesn’t, revise the survey.
• Which opportunities will build sustainable recurring revenue vs. opportunistic or one-time revenue? Recurring revenue can be lower margin if the income stream is sustainable. Balance efficiency and utilization. For example, fixed fee service contracts that renew consistently.
• Judge opportunities against your “Hedgehog” as defined by Jim Collins in his book Good to Great: What you are passionate about? What you can be best at in your marketplace? What you can measure by a single economic ratio?

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How Do You Make Sales “Farmers” More like “Hunters”? Three Approaches

Situation: A CEO finds that his sales team are relationship managers who are excellent at growing business in existing customers, but not as skilled at either developing new business opportunities with current customers or bringing in new customers. In sales parlance, they are more like “farmers” than “hunters”. To meet revenue goals, the company needs additional business. How do you make sales “farmers” more like “hunters”?
Advice from the CEOs:
• When working with the team be sure to considering what’s in it for them, not what’s in it for you. Communicate with and coach them so that they are inspired to try and adopt new behavior that will help them in their jobs.
• Create a low pressure script for your relationship managers. Build this around easy questions that they can ask both current and prospective clients:
 How are we doing?
 What are your most pressing needs?
 What more could we do for you?
 Can you see other ways that our services could benefit you?
 We have a new offering. May I tell you about it?
 Do you know other companies that can utilize our product or service?
• For training, pair the relationship managers in teams of their choosing. Have them rehearse and coach each other. As they learn or develop new techniques, have them coach the rest of the team.

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How Do You Improve a Company’s Profile and Diversify the Customer Base? Seven Points

Situation: The CEO of a high tech company wants to improve the profile of his company for prospective clients. He also wants to diversify the company’s customer base. How do you improve a company’s profile and diversify the customer base?

Advice from the CEOs:

  • Develop a good description that easily expresses the company’s value proposition.
    • Test this with potential customers to assure that they easily grasp what the company has to offer – and are interested in paying for!
  • If the company is early-stage, focus on funding and proof of concept as early milestones.
    • If the company has a novel idea or capability, focus on proving the value of this capability to a buying customer base of sufficient value to interest investors.
  • Study and define customers’ needs before trying to communicate what the company can do for them.
    • Similarly, define the channels that will be most effective in reaching these customers.
  • To monetize the business focus on the seekers – those who need and will benefit from the product or services that is being offered.
    • If the company offers a free or low cost service, develop a premium offer for enhanced services.
  • To market a core set of skills to different customer markets, focus on a theme of reliability.
    • Flavor this theme differently through a branding exercise to address the needs and desires of specific customer segments.
    • It is both feasible and desirable to market the same set of skills differently to different customer markets.
  • Follow the money – it leads to the heart of customer purchase decisions.
  • Growth, momentum and the ability to change are essential parts of a successful business model.

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How Do You Boost the Performance of a Life Sciences Company? Six Suggestions

Situation: The CEO wants to improve the performance of her life sciences company. She has questions about the business plan and roles within the company. She is also looking for better ways to connect with current and potential customers. How do you boost the performance of a life sciences company?

Advice from the CEOs:

  • Assess both your own role and the company to ensure that there is good alignment between the business plan and the roles within the company.
  • Be strategic after assessing the company’s needs and situation. Too often companies jump to tactical considerations because they are action oriented. To be effective, tactics must align with the broader company strategy.
  • Build a foundation based on value and compliment this with effective models to communicate and leverage this value base.
  • Think outside the box. Consider options to use or increase the effectiveness of social networking. This has growing dramatically in importance as a way to reach and communicate with key current and potential constituencies.
  • Perception is important. Be aware of what others think of the company and work creatively to present the company in a light that will support objectives.
  • The visual cortex represents 75% of sensory awareness. Leverage this on web sites and in marketing campaigns.

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How Do You Optimize Your Product Offering? Four Points of Focus

Situation: A CEO wants to take better advantage of his company’s product offering. There are many opportunities available, but the company needs more focus on optimizing these opportunities. How do you optimize your product offering?

Advice from the CEOs:

  • Brand – Where has the company been? Where is it going? The world is constantly changing – what’s the company’s new brand? The brand identifies the company and both your customers’ and business partners’ identification of the company and its products and/or services. In a changing world with increased competition and “noise,” having a strong handle on the brand and brand message is critical to remaining at the top of customers’ and partners’ awareness.
  • Education/Customer Advocacy – An underutilized source of marketing strength includes both customer education and customer advocacy. Customer education allows the company to better position its product and/or service to the customer and helps the customer better meet unrecognized needs. Customer advocacy positions the company along with its customers in an area of mutual interest and strengthens both bonds and loyalty.
  • Diversification & Channels – In a changing and rapidly diversifying world, being open to new opportunities and channels through which to reach the company’s stakeholders is a source of sustainable advantage.
  • Partnerships to Take Advantage of Diversification & Channel Opportunities – Partnerships are an underutilized resource to creatively diversify and open new channels to stakeholders. They require less investment than doing everything on your own and can form the basis for key alliances and strengths going forward.

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