Achieving Business Excellence with John Spence

Let’s Talk About Vision

In 23 years serving as a management advisor to companies of every size, all over the world, I have yet to encounter an organization that does not struggle with some form of “communication” challenges. Although this can impact companies from several different angles, there is one communication breakdown that has the most significant impact on the overall success of the business.

The lack of a sharply focused, easily understood and extremely well-communicated vision and strategy for growth.

In most businesses, the executive team and senior managers are constantly talking about the vision and strategy, it’s part of their meetings, it’s what they lay awake at night thinking about, but typically if you go just one or two layers down in the organization nobody has a clue about the actual meaning of the vision and how they are supposed to implement the strategy. Remember this: without a clearly communicated vision there is no way to achieve alignment across the organization, act strategically, empower fast decision-making or create a high level of accountability.

When people do not know where they’re going, it is impossible for them to get there successfully!

The key point here is, to effectively communicate the organization’s vision and strategy you must talk about them all the time, using multiple communications channels, at all levels of the organization, delivering a consistent and focused message. I once had the CEO of a company ask me, “When do you know that you have communicated the vision enough?” I replied, “When you get to point that if you have to explain it one more time… you’ll vomit… that’s when the lowest person in your organization just heard the vision for the very first time.”

The answer is simple: communicate, communicate, communicate… and then communicate some more.

The Foundation of Business Success

After more than two decades of working with organizations around the world, the single biggest issue I see in company after company is: Lack of Disciplined Execution.

I meet plenty of brilliant people, who have developed amazing products and services and have unique and compelling strategies for how to win in the marketplace. Yet time and again I see those strategies fail because they are not effectively executed. Below is a article that was created by an amazing company out of New Zealand called Advisory Works. They are among the world’s leading experts in helping companies execute their plans, which is why I am extremely proud to announce that we have formed a partnership so that the team at Advisory Works can assist my clients who are struggling to implement the plans that I help them create.

I believe you’ll find some very powerful ideas in this PDF, things that you can apply right away to help you be more successful in taking the exciting ideas in your company and turning them into action in the marketplace.

Please feel free to share this article with anyone you want to and if you think you might need a little bit of help, don’t hesitate to contact the folks at Advisory Works, you will be extremely impressed.

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The Four Cornerstones of Strategic Execution 06

6 Key Business Ideas to Help You Succeed in 2017

Mercedes, John, Sheila, Esther

Mercedes, John, Sheila, Esther

On behalf of myself, my wife and business partner, Sheila Spence, our Operations Manager, Mercedes Petrus and our Financial Manager, Esther Mallard – thank you VERY much to all of our clients from 2016 for trusting us to be involved in your businesses.

 

I hope you will share this video with your network, and if you have not already, please sign up for my blog – I only post good stuff!  blog.johnspence.com

 

Selling Value Where None Exists

John Spence on Selling Value

In my last blog, The Big Trends From 2016, I got lots of great comments and questions. I especially liked this question and wanted to share my answer with all of you.

 

Q: How often do you find executives who expect their salespeople to sell value that does not exist? In my last two sales jobs, the real value of the product or service was not a differentiator in the marketplace. Even for the most incredible sales person, companies are not naive and they can quickly assess whether there is value in an offering or just double talk. What are the executives’ responsibilities in this situation? How often are you seeing this situation at companies?

 

A: Good question, tough answer. You have to find some way to add value above the product or service even if it is truly a commodity. I have worked with a lot of companies that had very little differentiation, and the executives wanted their folks to sell on value, but few people understood how to create real value beyond what they were selling. If you cannot figure this out, then the only thing you have left to sell on is price.

In my strategic thinking workshops, I tell the attendees that all effective strategy boils down to: Valued Differentiation X Disciplined Execution. In other words, you have to bring something to the marketplace that is unique, exciting and compelling – that your customers VERY highly value – that is difficult, if not impossible, for your competition to copy – and that you can deliver on flawlessly. Until you can discover how you, your products and/or services can meet these criteria – the only thing you have to sell is lower price, which is the fast lane to bankruptcy.

You ask above, “What are the executives’ responsibilities in this situation?” It is my feeling that they must understand their product and market well enough to clearly show their salespeople where the real value exists. If they cannot clearly differentiate their own product from the competition’s product, then a salesperson needs to ask how they can sell on value if the executive can’t even describe it. One of the big issues I see are companies that demand that their salespeople sell on value and capture a premium price in a market that truly will not support it. This is a recipe for failure and is exceedingly frustrating to the sales force. As the old saying goes, “You can’t get blood from a stone,” and you can’t sell value where none exists.

However, it has been my experience that where there is little product differentiation the only way to command a premium price is for the salesperson to add massive additional value. What unique expertise can you bring to the situation? How can you give your customer insights and ideas they could not have developed without you? What recommendations can you make to improve the customer’s business? What additional services can your company deliver that significantly increases the value of your total solution?

In other words, if the product is not a differentiator, the salesperson must be. This is easy to say, but extremely hard to do. It takes a lot of work, time, effort and energy to educate yourself at a level where you can be positioned as a trusted advisor – not a salesperson. Luckily, very few salespeople are willing to make the personal investment necessary to become a high level consultative salesperson, so if you can achieve this you will have created a good deal of job security because every company wants a salesperson who can create unique value for the customer that drives high margins.

I hope you found this of value.

6 Keys to Effective Strategic Planning

mini-peepsI am currently preparing to facilitate three strategic planning meetings, for an association, a technology company and a Fortune 100 client. Here are a few things that I see as foundational for creating an effective strategic plan.

  1. The key to a successful strategic plan is: FOCUS. Every company, regardless of size, has limited resources and strategy is all about effectively deploying an organization’s resources where they will have the most positive impact in the marketplace.
  2. To mirror my first point, one of the most important things a great strategic thinker does is figure out what to say “NO” to. What markets will we not compete in? What products or services should we not try to sell? What current projects should we abandon?
  3. If you have 10 strategic objectives, you do not have a strategy. All of the successful companies I’ve worked with were able to focus in on 3 to 5 major strategic initiatives. Anything more than that causes a lack of focus and ultimately a lack of success.
  4. When examining business issues, are you trying to solve a puzzle or a mystery? With enough data and information, you can find the right answer to a puzzle, but no matter how hard you try it is impossible to find the exact right solution for mystery. Because of this, as much as I hate to admit it, a large part of strategy is simply an educated guess about what might happen in the future.
  5. Alignment is critical. If the senior team is not 100% committed to strategic direction of the organization, the plan will fail.
  6. It’s an age-old business cliché, because it is correct: What gets measured gets done. A major reason that many strategies are not effectively executed is because there is no way to determine exactly what the expectations are. Ambiguity Breeds Mediocrity.

Those are just a few of the key ideas I try to help my clients keep in mind as we move through a strategic planning retreat. I will also add one more critical point; to make sure you follow through and implement your plan, you should spend just as much time on strategic execution planning as you do on planning the strategy. This is a very important idea that few companies truly embrace.

What are your thoughts?

The Six Fundamentals of Business Success

blog-money-1This evening I’m giving a speech to 350 CEOs of small to medium-size businesses and I’ve been asked to talk about some of the fundamental elements necessary to build and sustain a highly successful organization. After running several companies and spending the last 22 years of my life helping businesses around the world be more successful, here are a few things I think every business owner needs to focus on:

1. Start with a clear vision and purpose for why you are building the company. By the way, if the only reason you’re starting the company is to make money, there’s a good chance it will fail. Success comes from a genuine passion to help your customers, if you are focused intently on that and charge a price that allows you solid profit margin, everything should work out fine in the end.

2. Solve a real problem. You also have to make sure that your vision and purpose are focused on delivering products and services that the market eagerly wants to buy. It does not matter if you think what you sell is really cool, the only critic whose opinion counts is the customer.

3. Build a world-class team. Competitors can copy your products, beat you on price, outspend you on marketing, but one thing they cannot do easily is beat a company that truly values top talent and gets them engaged and passionate about serving their customers.

4. Extreme Customer Focus. I have said this a million times and I am more than happy to say it a million more: whoever can attract, grow and retain the best talent, and also “owns the voice of the customer,” has a huge market advantage. Fantastic employees who build great customer relationships are a key to success in every business.

5. Quality and control. This one is very fundamental, but without it the other things above can’t work. You have to have very high quality products and services, deliver consistently superior customer service and manage the financials of your business with extreme discipline. There is a reason that one of the most often used clichés in business is: Cash is King.

6. Disciplined Execution. Once you’ve got all of the above factors in place, then you must be incredibly vigilant in always focusing on the most important things in your business and making sure they get done. If you do not take the time to make these things your top priorities, then you will likely have to make time for bankruptcy court.

Leader of the Future = EQ + Technology

How-to-Become-a-Better-Leader-730x493I have just returned from two weeks of working with clients in New Zealand and while I was there I was asked to give lectures at the University of Auckland and the University of Canterbury. The topic they asked me to address was, “Leading in a Time of Disruptive Change.” This is a topic I know pretty well, but I decided it would be nice to get some additional opinions to add more depth and credibility to my comments, so I sent a note asking for input to some of my friends including Marshall Goldsmith, Guy Kawasaki, Seth Godin, Tim Sanders, Jim Kouzes, Tom Morris, Joe Calloway and several other top thought leaders, asking what they would share around this topic.

Everything they offered revolved around two key ideas: EQ + Technology

 

EQ = Emotional Quotient

The next 10 years will mark one of the most explosive eras of technological advances in the history of humankind. It is hard to believe that the smart phone was invented just 10 years ago and in that time span people around the world have downloaded more than 2 billion apps. Connection by computers is increasing at a dizzying rate, whereas connection between people seems to be decreasing at an equally alarming rate. A successful leader of the future must be superb at collaboration, personal connection, empathy and interpersonal communications. They need to be effective at bringing people together, creating high-performance teams, developing deep levels of trust and building real relationships with the people they lead. For some people EQ comes naturally, they are great at working well with other people and showing genuine concern, caring and empathy. For others of us (me included) EQ is just not something we were born with, however, through study and practice I have been able to increase my level of EQ significantly and so can you. Either way, natural or learned, the skills necessary to display EQ are essential for tomorrow’s leaders.

Technology

I mentioned it briefly above, but it bears repeating, in the next 10 years we will go through a truly overwhelming influx of new technologies that will be highly disruptive to every business (and person) in the world. That might sound like hyperbole, but I assure you it is not. Last year I attended the Abundance 360 Conference (an offshoot of Singularity University) where some of the world’s top technology experts outlined the eight major areas of technological change that would have the most impact on the human race in the next decade.

  1. Computer speed / deep learning
  2. Artificial intelligence (AI)
  3. The Internet of Things (IOT)
  4. Advanced robotics
  5. Augmented reality
  6. Virtual reality
  7. Synthetic medicine
  8. Genetic decoding/recovery

As just one example, the director of the business school at the University of Canterbury explained that in 2026 you will be able to buy a laptop for $1,000 that surpasses the brainpower of a single human, and by 2046 you will be able to buy a laptop (if they even exist anymore) that will exceed the brainpower of the entire human race. When you apply this computing power to the areas I have listed above, the impact is literally unfathomable. Therefore, to be effective, future leaders don’t need to embrace change, or even revel in change, they need to DRIVE change. They will need to be visionary in their ability to predict how these seismic technological shifts will impact their industry, their individual businesses and their customers. As another example, a good friend of mine who is the president of a prominent university here in the US lamented to me, “We are training students today for jobs that don’t exist on equipment that has not yet been invented, which means we are going to have to completely change the way we educate our youth.” Now if that isn’t a disruption, I don’t know what is – and the same thing is going to happen to you.

Leader of the Future = EQ + Technology

What do you think?

 

*** Also, I am very pleased to announce that my blog has been named one of the Top Small Business Blogs to Follow in 2016.
To check out the other winners and their superb blogs click HERE

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Loose-Tight Controls for Business Success

37827-watches_teaserI recently presented several workshops for client company with an absolutely brilliant CEO, among the best I’ve ever met. He was a new to the organization and had been brought in to turn around the company, which was facing very severe financial troubles. This was very bureaucratic organization whose main customer was the government. They were slow to make decisions, reluctant to take any risks, complacent in their attempt to grow their business and keep margins strong, which landed them to more than billion dollars in debt. The CEO gave an impassioned speech about the need to be more entrepreneurial, while still having a culture of disciplined execution around the core strategies. He described it, much like Tom Peters did in his wonderful book In Search of Excellence, saying that the company needed to have “loose-tight controls.” They need to have elements of loose  control around entrepreneurship, innovation and prudent risk-taking, while maintaining areas tight of control around their values, strategy, alignment and accountability for positive business results. He told them that in order to be successful they would have to balance a strong entrepreneurial ethic while still embracing a focused culture of discipline – and summarized his idea in the graph below.

So, where does your company sit in this matrix?

Best Managed Companies graphic

Four Things That Kill Companies

business conceptI am doing a strategic planning retreat for a multi-billion dollar company tomorrow and another similar retreat next week. In 2015 I facilitated perhaps a dozen such meetings and here are four key things that I have seen companies struggle with time and time again as they looked at their current performance and began planning for their future success.

Lack of Focus: This has got to be one of the major issues that many businesses have a hard time with, trying to do too many projects, working in too many markets and trying to serve too many different types of customers with too many different types of products. Here is a phrase I just learned that sums up my thinking on this issue, “Simplicity Now – Fancy Later.” Heck, I wrote a book on this topic so it’s pretty clear I believe it is hugely important to keep the focus of your business Awesomely Simple. Another way to put this powerfully is:

Deciding what NOT to do is just as important in a strategy as figuring out what to do.

Lack of Execution: This is a problem I have been tracking for the last 15 years, and in the last five years it has become the leading issue in almost every company I work with. There is no shortage of cool, innovative, bold strategies, but there is a massive shortage of organizations that can take those strategies and execute them with discipline.

Lack of Agility: Let’s face it, the marketplace has never moved faster and it is not going to slow down anytime soon. When I began leading strategic planning retreats more than 20 years ago it was not uncommon for us to work on a 10 year planning horizon, today I rarely work with a business that looks out more than three years. Wildly volatile economics, changing customer expectations, nontraditional competitors, global competition and the incredible velocity of technological change are just a few of the factors that demand companies be agile, nimble and highly innovative – just to stay in business.

Another factor around agility is the failure to make decisions quickly. Too much hierarchy, aversion to risk, resistance to change and the need to get consensus on every major (and sometimes minor) decision is an all too common obstacle for many organizations.

Lack of Talent: It is one of the key themes in all my work, “The future success of your business is directly proportional to the quality of the people that you can get, grow and keep on your team.” However, I run into far too few companies that take this idea seriously and actually look at talent acquisition, talent development and talent retention as a strategic objective. Although it is essential to have a deep bench of talent in order to run a sustainably successful business, I have had too many clients tell me something like, “We are being held hostage by our worst employees, they know that we don’t have anybody to replace them with, so they feel secure that no matter how poor their performances is they won’t get fired.” It almost makes me cry.

So in working with dozens of companies all over the world those are the four major issues I see companies grappling with when attempting to create a thoughtful strategy that has a high potential for success. My advice to you? Make sure that you have a strategic plan that addresses these issues and makes them a strength in your business that creates opportunities not a weakness that exposes you to competitive threats.