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Beating the Odds

Beat the Odds by Changing the Game

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by Changing the Game

Introduction

The third of 3 presentations on our core technology – FAST and SUSTAINABLE business growth.

Changing the Game focuses on moving away from working IN the business to working ON it. Each stage of growth requires a different emphasis, role, and investment in the future. Beating the Odds...by Changing the Game is situational – you just need the key

Summary

Management Challenges – challenges by growth stage

Hit the RESET Button – where and how to start

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Management Challenges

• Dream2Plan Stage Key Part of the Company

Top: It's the owner(s) dream that needs conversion to a plan

Management Methods

Direct Supervision: given the task of turning dreams into a plan and building something to sell, only the owner has the intimate knowledge to ensure the company is quick to market

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Management Challenges

• Dream2Plan Stage Core Processes

Financial Accounting: build a scalable accounting system with outside professional support – spend what you must. Ensure it will integrate with the CRM package

Strategy: brand is lasting – what is the image you need to create in the customers mind, where is the sweet spot with unmet needs and high financial returns, and what is your strategy for creating enough sales to prove the business idea

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Management Challenges

• Dream2Plan Failure Points

Flirtation Under capitalized Too slow to market Tasks overwhelm owner/founder Business idea is not workable

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Management Challenges

• GoLive Key Part of the Company

Front: Sales and Cash is King with the owner as the key sales person. Customers must be convinced to trust this new business can deliver on promise – it is about direct relationship with the owner.

Management Methods

Direct Supervision: Sales will determine success or failure of a start-up; the owner must become the first sales person or VERY visible and manage the sales funnel.

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Management Challenges

• GoLive Core Processes

New Client Sales: invest in a scalable CRM (Customer Relationship Management) package, success will come from a detailed and obsessive attention to manage the entire sales process. Ensure it integrates with your Financial Accounting package. CRM's also require the owner to decide on a sales model to determine HOW the company will sell. Place first hires here to support sales and groom your management replacement.

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Management Challenges

• GoLive Failure Points

Cash Starvation – insufficient and unpredictable cash flow:

Owner not engaged in sales No sales processes (model) Wrong sales model Bad offer/wrong customers

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Management Challenges

• NextAct Stage Key Part of the Company

Middle: Upgrade the business by hiring managers/supervisors for day to day operations. The owner needs a layer of management to handle tactical issues.

Management Method

Process: Shift of focus from direct supervision to processes, create best practices for becoming the lowest cost producer – faster with less defects.

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Management Challenges

• NextAct Stage Core Processes

Production and/or Service Execution: apply principles of quality to improve how the offer is produced and/or delivered.

Sales to Existing Customers: organic sales with existing customers – it is more cost effective and the source of improvements.

Activity Based Costing (Managerial Accounting): upgrade accounting system to capture true costs of selling, building, and servicing – this process determines profitability.

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Management Challenges

• NextAct Stage Failure Points

Owner Trap: Owner unable to make the transition from direct

supervision to delegation; bringing in another level of management with role specific expertise to manage day to day.

Unmanaged conflict between “new hires” and “old timers”.

Lack of clarity and strategic focus on endgame.

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Management Challenges

• BigFast Stage Key Part of the Company

Support: administrative support, Human Resources, etc., professionalize support functions and free-up executives, managers, and operators to focus on growth challenges.

Management Methods

Results: since processes (best practices) were built in Stage III, everyone in management can focus on results that allows individuals to use their talent.

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Management Challenges

• BigFast Stage Core Processes

Resource Deployment (Budgeting): it is essential the critical few initiatives driving growth are fully funded and the use of funds is closely managed.

Selection & Development: build/upgrade processes to handle rapid expansion of people to support growth.

Performance Management: shifting management focus from processes to results requires a process for managing talent.

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Management Challenges

• BigFast Stage Failure Points:

Destruction of working capital: unbalanced mix of new sales vs. production and accounts receivable while servicing existing accounts.

Insufficient infrastructure: over promise and under deliver caused by the failure to build capacity in Stage III.

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Management Challenges

• ProfitTaking Key Part of the Company

Middle: Owner/Executives become Venture Capitalists investing in lines of business, convert managers into business owners, supervisors into managers. Managers compete for budget.

Management Methods

Results: based upon experience in Stage IV, refocus on becoming the lowest cost producer to maximize return on investment (budget).

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Management Challenges

• ProfitTaking Core Processes

Resource Deployment (Budgeting): allocation of budget is a venture capital process, abandon historical methods (example - % increase from last year)

Production and/or Service Execution: examine all elements of the production and delivery process, eliminate all non-value added work.

Performance Management: revisit all relationships, top grade the organization – end unproductive relationships – upgrade employees, suppliers, customers, and investors.

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Management Challenges

• ProfitTaking Failure Points:

Indecision on endgame: sell, grow, or decline – there is no standing still or holding on. This stage will not last long – don't let the company lose market value or lose the momentum from Stage IV to push through to the next stage.

Bureaucracy: too much focus on policies and procedures creates an inward orientation and loss of entrepreneurial spirit. It is the beginning of a death spiral that becomes increasing difficult to change.

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Management Challenges

• Reinvention Key part of the Company

Technology: reinvention requires specific expertise to take advantage of past successes and recreate the business; usually a mix of systems and people

Management Methods

Teams: innovation occurs by bringing together internal and external experts and managing the dynamics

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Management Challenges

• Reinvention Core Processes

New Product/Service Development: this is not R&D, but D&R – Development & Research

collaborative development with clients, suppliers, and experts to upgrade or create new offers. Tested with existing accounts before introducing it to new customers

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Management Challenges

• Reinvention Failure Points:

Insufficient Market Research: major changes to products and services, and internal operations based on untested assumptions.

Internally Driven: no stakeholder involvement with major changes to the offer and processes, never build on spec – always test using D&R (Development and then Research).

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RESET

Benchmark the Company: Stage of Growth

Where You Are What You Missed

Core Processes Currently Capacity

Create a Growth2Capacity Plan