Achieving Business Excellence with John Spence

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?

Professional Listeners?

shutterstock_254737258During my recent trip to New Zealand I gave a number of talks on how technology is going to dramatically disrupt every type of business. Part of my presentation focused on advanced robotics and how many jobs will be eliminated by robots and algorithms. Here is a question that I just received from one of the folks that attended a session I delivered to a group of New Zealand entrepreneurs.

Hi John,

I didn’t get a chance to talk to you after your presentation, but I was really curious about the balance between EQ and robotics. You mentioned a bar where the bartender was replaced by robots and how many other service jobs will be. How will this feed into our EQ? Many people go to bars etc. to talk to the bartender about how horrible their boss is. Do you think that as technology progresses more humans will turn to the virtual world for emotional conversations rather than the real world?

Take hotels for example, many can differentiate on price because of the quality of service they provide and the personalized touch they give. I think empathy is one of the key qualities needed to provide customer satisfaction. If a lot of these employees are replaced by robots for the sake of efficiency, how will user experience and emotions play into this?

I would really appreciate it if you could expand on this a bit.

My reply:

 

Wow, really great questions, with complex answers.

It is my opinion that many jobs such as bartenders and hotel receptionists will be replaced by robots, it is already happening. However, I completely agree with you that these are positions that traditionally act as service providers that directly connect with customers. I do not believe that computers, even with highly advanced AI, will be able to make a true “human connection.” So perhaps there will be new jobs for people that do nothing but sit and talk with other people about how horrible their boss is, politics, religion and other topics that people like to discuss. They will be trained not to push their own opinion, but to simply be there to listen to the other person, connect with them and show empathy. Actually, I just thought of this idea while I was writing you this note and it is something I’m going to look into with a lot more focus, service jobs being replaced with “professional listener” as a new career. Interesting?

 

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

25 Skills Needed To Be A Consultant Of The Future

business person holding a briefcase

 

A very good friend of mine, Kendall Langston, is teaching an MBA class next week at the University of Canterbury in New Zealand on the topic of, “Consultant of the Future” and asked me what I thought were the necessary elements to be a successful business consultant. Here is the quick list I came up with off the top of my head…

  1. Global mindset
  2. Insanely competent
  3. Absolutely superb communicator
  4. Extremely curious
  5. Understands their customer’s business and their customer’s customers
  6. Strong business acumen
  7. Voracious reader
  8. Understands their customer’s industry
  9. Understands the consulting industry
  10. Has a strategic mindset
  11. Studies the impact of technology
  12. Well-networked with other thought leaders
  13. Has proprietary research/processes
  14. Focused – works in a narrow niche area
  15. Has strong sales skills – to sell their consulting services
  16. Has a broad toolkit of best practices and methodologies
  17. Has superb follow-up and customer service
  18. Very, very strong work ethic
  19. Passionate about being a consultant
  20. Can deliver the required results / ROI
  21. Has long-term relationships with their clients
  22. Is respected and has a strong reputation in the consulting industry
  23. Innovative/creative thinker – critical thinker
  24. Nice person – 100% ethical, enjoyable to be around, humble
  25. Works well with others – good team player

Did I miss anything?

 

 

CULTURE = CASH

7564321-big-pile-of-money-stack-of-american-dollarsFor many, many businesses today the only competitive differentiator they truly have is the quality of the people that they can get, grow and keep on their team… and the relationships they create with their customers.

Competitors can copy your products, beat you on price, match all of your distribution channels, spend more money on marketing and advertising and out manuver you on social media. However, if you can attract, develop and retain top talent and then get them insanely focused on taking great care of your customers… that is not something your competition can easily copy.

So, what attracts top talent to work in a company? I was interested to know this so I did a survey of more than 10,000 high potential employees at top companies around the world and they told me there were six things they look for from an ideal employer.

  1. Fair Pay – which they defined as 10% above or below what they would make to do the same job at a different company.
  1. Challenging Work work that was engaging, meaningful and matched their skill set.
  1. Cool Colleagues – A-players only want to play on a team with other A-players.
  1. Winning Culture – a place where people smile just as much when they come to work as when they leave.
  1. Personal/Professional Growth – the chance to learn and improve every day, as well as seeing a place for themselves in the company 5 to 7 years in the future.
  1. A Boss I Respect And Admire – which was actually one of the most important things they wanted!

If you think about it, all six of these factors are actually elements of a winning culture. If you want to bring top people in your company you’ve got to do these six things exceedingly well. On the flipside, the vast majority of people that leave a company exit because they hate their boss and are disengaged by the culture. I just listened to an interview with David Burkus talk about his new book Under New Management  (which I highly recommend) where he mentioned that only two employees out of 10 are fully engaged in their work. Think of the wasted time, money, resources and opportunity. However, if you could engage another two or three people, you would likely create a company that would dominate the marketplace.

In both a positive and negative sense: CULTURE = CASH

*** If you want more specifics on exactly how to build a great company culture, I have created a very concise and focused ebook that will give you all of my best ideas, tools and advice. It is only $2.99 on Amazon and I promise it will be VERY helpful.  Click HERE to take a look

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20 Questions To Make Better Business Decisions

8D9xPlllM2WzeTfM4McZ-Tl72eJkfbmt4t8yenImKBU8NzMXDbey6A_oozMjJETcYears ago I attended a class on Precision Questioning and Precision Answering, it was a tough class but I learned a lot. One of the most important things I learned, which I had experienced many times in the business world, is that very few people use a process in order to make important decisions, they just go with general ideas and a gut feel. Again, from years of experience, I have watched many senior executives make huge decisions, multi-million-dollar decisions, not using any kind of a formal process for organizing their thinking. Here is a list of 20 questions I use when helping organizations to make important business decisions.

  1. What is the real timeframe for this decision?
  2. Who needs to be involved in making this decision?
  3. Who does not need to be involved in making this decision?
  4. Can this decision be overridden by a person higher in the organization?
  5. If so, why are they not making this decision?
  6. Do we have the data necessary to support making a good decision?
  7. How do we know that the data is reliable and up-to-date?
  8. Do we have the financial numbers necessary to make this decision?
  9. If so, how do we know that they are accurate and up-to-date?
  10. Who else in the organization will be impacted by this decision?
  11. Do they need to be involved in making this decision?
  12. How, specifically, will we implement this decision?
  13. What metrics will we use to track success or failure?
  14. Who, specifically, will be responsible for the implementation of this decision?
  15. What is the real timeline for the overall implementation of this decision?
  16. What do we expect, specifically, as a successful outcome from this decision?
  17. Is there anything we would have to stop doing or change in order to implement this decision?
  18. Will this decision have a major impact on our brand in the marketplace?
  19. Well this decision have a major impact on our customers?
  20. What are the ramifications if this decision is wrong or poorly implemented?

If you have to make a major decision in your organization I strongly encourage you to use this list of questions in order to ensure that you are making a good decision. I can’t guarantee that the decision will work out perfectly, but I can almost surely guarantee that if you don’t go over this list and at least entertain several of the key questions, there will be a good chance that the decision will fail.

Are there any questions that I missed?

My Top 10 Business Success Tips

untitled10In November of this year, I will be the guest of the American Consulate in Poland in order to deliver a number of classes on entrepreneurship and business excellence at several universities in Kraków. Today, I received an email from a contact in Russia that is interested in possibly hosting a few business seminars in Moscow, and in that email, he asked me for a “bullet point” list of business tips to put in their newsletter to promote the events. So I sat down and tried to come up with the ten most important things I could offer, and I thought the list turned out pretty cool, so here it is.

John Spence’s Top 10 Ideas for Business Success

  1. The quality of the people that you can get, grow, and keep on your team will determine the success of your business in the long run. Other companies can copy your products, distribution, and marketing and beat you on price, but if you have top talent that is loyal, engaged, and excited about working for your company, then you have a huge market advantage.
  2. Whoever owns the “Voice Of the Customer” owns the marketplace. The company that listens to the customer the best and understands their needs, wants, fears, desires, and wishes – this company will be able to create a massive competitive advantage for itself.
  3. The formula for business excellence is: (Talent + Culture + Extreme Customer Focus) x Disciplined Execution = Business Excellence
  4. One of the keys to success in any organization is having a clear, compelling, tightly focused and well-communicated vision and strategy for growth.
  5. Culture = Cash. The number one factor for having highly engaged, satisfied, and loyal customers is having highly engaged, satisfied, and loyal employees. Remember this: the customer’s experience will never exceed the employee’s experience.
  6. Ambiguity Breeds Mediocrity. If you want to create a culture with high levels of both personal and mutual accountability, it is essential that you establish clear, specific, measurable, and binary goals.
  7. In every business, there are a handful of Moments Of Truth. These are the three, four, or five MOST important interactions with your customer on which you must deliver flawlessly, every single time for every single customer, if you want to grow a successful business.
  8. To be successful in the future, the rate of internal innovation must exceed the rate of external innovation (II>EI). As a business, you have to innovate, create, strategize, and implement better than anyone you compete against in the marketplace. As an individual, this also means that you have to continuously improve every single day in order to out-innovate the people with whom you directly compete.
  9. Don’t worry about the competition; instead, worry constantly about being better than you were yesterday and about absolutely delighting your customers. This is how you win in business.
  10. You become what you focus on and like the people you spend time with. Whatever you fill your brain with and whomever you choose to spend your time with will determine what your life will look like a decade from now.

I truly welcome your additions to this list. It would be fun to get this list up to fifty or even one hundred business tips.

Fire Your Customers

Screaming into telephone.It can be very challenging for a business owner to finally admit that it’s time to…

“Fire the Customer”

Let me be very clear here, the truth of the matter is that not every customer is a good customer and if you allow a bad client/customer to stick around too long, they may just run you out of business. Of course you want to take absolutely spectacular care of your best customers and turn them into customer evangelists, but when you end up with a customer terrorist the best course of action is to politely send them to your biggest competitor! (I’m only half kidding here)

I cannot tell you how many times I’ve seen businesses almost go bankrupt trying to please difficult customers that drive them crazy, use of tons of resources, always complain, pay late and argue about the price. When I sit down with the business owner and make them take a good hard look at the relationship with a customer like that it usually becomes pretty obvious that they are actually losing money every time they deal with that customer. So how do you avoid getting into that kind of a situation? Here are a few ideas…

Set Clear Expectations

At the beginning of the business relationship take the time to sit down with your new client and be exceedingly clear about how the relationship will work. Explain to them specifically what you promise to deliver, how your pricing is structured, the best ways for you to communicate with each other, what to do if there’s a problem – and exactly what you expect from them as well. Put it all on the table, leave nothing to chance, don’t assume anything. It’s one of my absolute favorite business quotes as it relates to accountability inside of an organization – and creating accountability with your clients:

“Ambiguity Breeds Mediocrity”

If you failed to do this at the beginning of the relationship, try to have this conversation the minute you start to feel uncomfortable and think that the relationship might be headed south. If at all possible you want to have this conversation while there is no emotion or dysfunction in the client relationship. If you try to have this conversation after something big has gone wrong, it will just deteriorate into finger-pointing, excuses and blaming.

Develop Red Flags

Go back and look carefully at every time in the past that a client relationship has imploded, what was the pattern? What were the warning signs that things were getting off track? Did they start to become overly demanding? Did they start paying late? Did they start asking for you to do extra work and not want to pay for it? Did they call up one of your employees and scream at them? Did they make a mistake on their end and then turn around and blame you for it? These are the sort of things I’ve seen in the businesses I’ve owned and when one of these red flags popped up I immediately started examining the client relationship to either improve it or terminate it.

Fire Nice

One of the best pieces of advice I ever got about hiring people was:

Hire Mean and Fire Nice.”

In other words, be really tough in the interviewing process, push hard to make sure the person really is a good fit and truly wants to work in your company, be aggressive in explaining exactly what the job will entail so that the candidate knows precisely what they are getting into, what will be expected of them and what it will be like to work in your company. If they still want to work with you after this sort of an interview, then you likely have a good candidate. However, if things go wrong and they don’t turn out to be a superstar, be very kind, generous and fair when letting them go so that you can help to avoid ill-feelings, nasty rumors or even a lawsuit. To me, it’s exactly the same when accepting a new client. Be tough in the interviewing process (that’s right, you interview new customers just as much as they interview you as someone they want to do business with) to make sure that this potential new customer meets your “Ideal Customer Profile.” Are they the kind of person that you want to do business with? Will they be a good partner? Are they the kind of client who can bring you new customers and more business? Do they have the financial resources to pay on time and in full? Are they nice people that you would enjoy working with? If the answers to a lot of these questions are no – you are better off to recommend that they go to your top competitor and let them deal with a potentially disruptive customer.

Now I understand that sometimes you need every customer because you need cash flow, but when your business is stabilized and you’re not scrambling to bring in every single dollar you can, then I highly recommend you backup and start to pursue and accept only the best customers. I also highly recommend that as soon as a customer starts to trip a few of the red flags, you either fix it right away, or fire that customer!

 

I hope you found this helpful – John