HAPPY THANKSGIVING

Sam Headshot croppedAt this time of Thanksgiving we pause to count our blessings.

 We give thanks to the freedom of this great country of ours,

And its’ opportunity for achievement.

 We give thanks to the friendship and confidence you have shown in us.

 We especially give thanks for all things.

 Our best wishes for a Happy Thanksgiving.

History of Thanksgiving

There are many myths and misconceptions surrounding the people responsible for the American Thanksgiving tradition. Contrary to popular opinion and the writings in classroom text books, the Pilgrims didn’t wear buckles on their shoes or hats, nor were they teetotalers. In fact, they smoked tobacco and drank at lot of beer- they drank beer due to the quality of the water.

When the Pilgrims landed in the New World, they found a cold, rocky, barren, desolate wilderness. There were no friends to greet them and there were no houses to shelter them. During the first winter, one-half the Pilgrims died of sickness or exposure. Though life did improved for the Pilgrims when spring came, however they did not prosper.

Part of the reason for the lack of prosperity, involved the original contract the Pilgrims had with their merchant-sponsors in London. This contract called for everything they produced to go into a common store. Each member of the community was entitled to one common share under a communal agreement. Furthermore, all of the land they cleared and the houses they built also belonged to the community.

What didn’t’ work was the motivation for people to work without incentive or ownership.  Contrary to the original agreement, the decision was made to assign plots of land to each family to work and manage, thus turning loose the power of free enterprise. What was the result?

It was reported that, “for it made all hands industrious, so as much more corn was planted than otherwise would have been.” As a result, the Pilgrims soon found they had more food than they could eat themselves. They set up trading posts and exchanged goods with the Indians. The profits allowed them to pay off their debts to the merchants in London much faster than expected.  Thus, it was found that the entrepreneurial spirit worked.

Reasons to be Thankful

I’m thankful for the flexibility and freedom of entrepreneurship. Ever since I decided to start a business, I get to work my own hours, chart my own course, and have an awesome career. I’m grateful every day for being able to spend time with my kids and grandchild, and the flexibility that comes from being my own boss makes this even easier.

I’m thankful for the chance to serve and get the opportunity to help business owners. I love helping people develop systems and procedures in their business, recruit and train the best possible team, develop a ‘real’ strategic business plan, and ultimately exit their business. Every day I hear amazing, energizing stories from people who are doing great things in their business and in their life.

If you believe in what you’re doing, and if you find a way to deliver your exceptional products and services and delight your customers, we will help you to become more successful.  That truth is, as entrepreneurs, we have the power to shape our success and create the lives we want, which is the biggest cause for gratitude of all.

This Thanksgiving, I hope we can all take time to reflect on the amazing power, freedom and excitement that comes from being a business owner and entrepreneur.  Keep focused and don’t get distracted by negativity or petty slights; assume the best in people, and forgive everyone everything. Remember that no one is in charge of your happiness but you – and this is especially true when you decide to start a business. When it comes to going after what you love in life, don’t take No for an answer.

Conclusion

Thursday we all will continue that tradition of having a Happy Thanksgiving. So, have a wonderful Thanksgiving.

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RETHINK YOUR KPI’s

Experts tell us that between 60 percent and 90 percent of all strategic initiatives fail to achieve their objectives. So at the end of every month and quarter and year, your company probably generates a balance sheet and a profit and loss statement. However, no matter how these numbers are, they represent a look in the rearview mirror.  So, how can you get your people focused on the numbers that are truly important to move your business forward?

Numerical targets and Milestones

In order to establishing numerical targets, everyone should understand exactly what the number means. Yes, you can track financial results as Numerical Targets, but what most people really understand are visible, concrete things; things they could count if they chose to. You will track these numbers publicly, so select measures that you don’t mind sharing. Remember that you want the people in your company to be aware of these numbers and discuss them.

These numbers will be the basis for your budgets, financial forecasts, human resource planning, and more. Budgets and forecasts should not be done until you have created your company strategy and they must be aligned to the strategic choices you have made.

The Tropical Island Test

The “Key” in Key Performance Indicators means that you concentrate on the most important measures- choose no more than five. Then give your choices the “Tropical Island Test.”  Imagine that you’re vacationing on a distant tropical island. It’s lovely there, but it’s very remote and communications are severely limited. In fact, you can only receive a single five-line text message per week to let you know how things are going at the company. Your challenge right now is to identify the five Key Performance Indicators that will predict and drive the success of your current business model.

Start with the minimum acceptable level.  The minimum acceptable level is the level of performance where you can keep the lights on but not much more. You’re not making any progress at that level. How about good performance? Now set the threshold for good performance.  This is the level of performance you need to see delivered consistently every week if your company is making progress.

Choose your Numerical Targets

Now it’s time to get to work. Get your team together and do the following:

  1. Choose at least one, but no more than three Numerical Targets
  2. Make sure they are numbers that have meaning for all your people
  3. Project them over three time periods: 90 days, one year, and 2 or even 3 years
  4. Identify the person who’s accountable overall for achieving those numbers
  5. Decide how you will make the targets visible.
  6. These targets and your progress should be a regular topic of interest, conversation and accountability
  7. Make these Numerical Targets noticeable and provide frequent progress updates

Now list the outcomes you are looking for- or the end result. Now ask yourself the following two questions:

  1. What is the measurable activity that if you perform enough of them, will drive the desired end result?
  2. How could you measure the quality or effectiveness of that activity?

KPIs do more than simply measure activity or effectiveness levels. They send a message to the people in your company, telling them what’s important. KPIs tell your staff what you will pay attention to and what you pay attention to drives behavior. KPI’s help align individual priorities with company priorities.

Daily and/or Weekly KPIs

Choose KPIs that you can measure every day or every week if possible. If your measurement cycle is longer than a week, you don’t catch problems early enough. You drive better performance with shorter measurement cycles. Shorter cycles let you spot trends earlier and spotting a problem early means you can solve it sooner. Those below-par numbers might be down for another week while we worked together to set things right, but they’d usually be back up in the fourth week.

There’s another advantage to catching problems early: they’re usually easier to solve. The longer a problem lives, the bigger and the nastier it gets. Tracking KPIs on a daily and weekly basis is also more engaging for your people, because it gives them the opportunity to experience the satisfaction of “winning” on a regular basis.

Now Choose Your Company KPIs

Based on what you know to be true right now, what do you expect to achieve by the end of the current year? What about the year after that? The further you project into the future, the less certain you can be, because, as we know, your current reality is always changing. Nothing is more demoralizing than displaying annual targets that bear no resemblance to the current reality.

Now it’s time to get to work. Get your team together and do the following:

  1. Pick KPIs that will drive and predict the financial results of your current business model (or if you are a team manager – the numbers that drive the performance of your team)
  2. Pick KPIs that you can measure every week (or even every day), where possible
  3. Pick only the five (or fewer) KPIs that will make the biggest difference for your company (or team)

You will maximize growth and profits when:

  1. You have clear duties and KPIs for each functional role
  2. You have the right people in each role
  3. Those people concentrate on the right things
  4. They are held accountable for performance every month

Single Point Accountability

Many people can be involved, but ultimately only ONE person can be held accountable. Identify these persons by respective KPI’s and manage these numbers, and accountability to these individuals.

Conclusion:

Accountability is meaningless without consequences.

GOOD STRATEGY vs BAD STRATEGY

A good strategy is not about vision or goals. It is a carefully researched and well-designed action plan designed to meet a challenge. However, leaders often substitute targets, branding and slogans for strategy. Bad strategy, contains fluff, dodges problems, mistakes goals for strategy and sets unrealistic goals. Good strategy focuses on critical issues and decides how to address them. It requires research and analysis, hard choices, decisive planning, and action. Identifying and leveraging your competitive SWOT (strengths, weaknesses, opportunities and threats) are the first steps in strategizing.

Good Strategy

Good strategy is simple and straightforward. It involves “strength applied to the most promising opportunity.” Strategizing means identifying critical issues within your market and industry, making a plan to focus results-oriented action on those crucial points. Strategy has little to do with ambitious goals, vision, leadership, innovation or determination. For many business leaders, strategy is nothing more than an exercise that generates impressive (but generally unrealistic) goals and meaningless slogans.

A good business strategy presents a specific action plan to overcome a defined challenge. Good strategy involves multiple analyses and development of thoughtful, expertly implemented policies, designed to overcome obstacles and move the firm profitably ahead. Good strategy is a highly focused, problem-solving activity that addresses fundamental issues. It uses the intelligent application of advantage to reach achieve higher goals.

Importance of Advantage

In business, advantages separate winners from losers, but no company leads in every area. Your job is to pinpoint your company’s specific advantages so you can leverage them in the most effective way. Never engage in any form of competition in which you hold little or no edge. Much like “wrestling the gorilla” – it’s completely counterproductive and gives someone else the upper hand.

Make change an advantage. The quicker you “grab the high ground” – or get out in front of it and turn it to the benefit of your firm – the more strategic success you can achieve. You must be able to deal with small details of your particular situation to get a jump start on your competitors, particularly those that are stuck in inertia.

Bad Strategy

Bad strategy isn’t just the opposite of good strategy; bad strategy materializes from “specific misconceptions and leadership dysfunctions.” Four characteristics identify bad strategies:

1. Fluff

Empty slogans filled with trendy buzzwords take the place of important insights. Consider this example from a bank’s internal report: “Our fundamental strategy is one of customer-centric intermediation,” or, translated into plain English, “Our bank’s fundamental strategy is being a bank.” Many so-called strategies are equally banal.

Failure to face the challenge, you can’t have a strategy if you don’t isolate and find your firm’s main problem. Heavy-equipment maker International Harvester sought to revamp its organization with charts and analyses but never addressed the main cause of its internal issues: poor employee relations.

2. Mistaking goals for strategy

Objectives are just a wish list if you don’t pair them with concrete action steps.

3. Bad strategic goals

4. Leaders must set overarching, but always realistic, aims.

Executives who develop bad strategies tend to ignore problems or to see them as irritants; some believe that acknowledging difficult issues equates to negative thinking. Bad strategy becomes no more than a rallying cry- it can be motivational, but it is not strategic. Bad strategy is common because it involves fill-in-the-blank, template-style thinking.

Good Strategy

Good strategy always starts with a foundation with three components:

1. Diagnosis

Don’t just ask, “What’s going on here?” Take the next step to find patterns and facts that might direct your thinking into new and different areas. Strategizing is an exercise in thinking and imagination, but it also involves judgment and evaluation. To improve your judgment, list your strategic ideas. Cataloging your ideas gives you a system for turning concepts into actions, and it also helps you overcome your biases and shortcomings. The more knowledge you gain about your company’s challenges and the ramifications of its strategic options, the better positioned you are to tackle a diagnosis.

2. Guiding Policy

Once you’ve diagnosed your firm’s strategic plan, you need a method that will direct your teams’ actions.  Good strategy focuses on the advantages your firm must leverage to overcome its obstacles. This leverage comes from the way you focus your policies and coordinate your actions to meet a desired. A guiding policy provides the reasons for the actions you need to take to meet your goals.

3. Set of Coherent Actions

The “consistent and coordinated” activities your company undertakes to carry out its strategy are critical tests. These steps should create the momentum your firm needs to succeed. A Plan of Action gets you where you need to go and calls for allocation of resources. As you plan, be aware of “chain-link logic.” Any system or organization is only as strong as its weakest link. Reinforcing all your stronger units is fruitless unless you also improve your weakest area. In your analysis, find if your potential bottlenecks – or weak links – can harm your strategic plan.

Design Your Strategy

Master strategists don’t choose or decide on a strategy; they design novel responses to challenges. Strategy always involves three points:

1. Premeditation

Strategy represents planning carried out in advance of action; “winging it is not a strategy.

2. Anticipation

Figuring out how others (for example, your competitors) will act in the future is an important part of the strategic planning process.

3. Coordinated Action

Your strategy is far more than your choice among various options – it’s something you construct. You are customizing a performance race car, not choosing a souped-up vehicle from a car lot.

What About Growth?

Few business people would question the concept that growth always equals value. Unfortunately, many CEOs will do almost anything to make growth, including making acquisitions for which they pay way too much. You create value when you buy good businesses for less than they are worth. If you don’t create value, the true worth of your enterprise remains static. Growth depends on such factors as innovation, increased product demand and upgraded offerings. Strategize about those hands-on factors and the steps you can take to shape them.

Conclusion

The proof of your strategy will be if it actually works. Good strategy represents an educated guess about how to increase your business in the most productive way. You will know if you guessed right whether your strategy has succeeded. If and when you meet your strategic success, only then can you refine your operations and make the Strategic Plan even more successful.