Business Mastery

Revenue covers up a lot of sins. Even more revenue covers up a lot more sins.

Now, I’m not saying you should put up with a lot of sins, errors and omissions within your business. I’m making the point that increasing revenues certainly helps make them less obvious and hurtful.

The last couple of years has been a very telling time for most businesses in the US. The economic situation has generally affected every business not just isolated ones and selected niches.

So, you’ve got to get more revenue. And, you need to get it as fast as you can.

You really need to get yourself in front of more “hot prospects” under “favorable circumstances”.

Why?

When you have hot prospects under favorable circumstances your probability of converting them to a customer goes up exponentially.

First, let’s examine what a hot prospect really is.

A prospective customer should be considered a prospect when they have three clearly identified attributes.

1. A vital need
2. Authority to buy
3. Enough money

A prospect enters the arena of being “hot” when they have one additional attribute— urgency.

The next critical element is to create circumstances which or the most favorable to you. Let me illustrate.

One of the least favorable circumstances you can have is to make a cold call on a prospect. It really doesn’t matter if they have the attributes we’ve identified above. If you need to get to them via a cold call your probabilities of conversion go way down because the circumstances of your “introduction” are so poor.

At the other end of the spectrum, if a raving fan of you and your company introduces you to her prospect and physically takes you on a face-to-face meeting, you have the most favorable circumstances.

Fundamental lesson to be learned here is that you need to reconstruct your sales process to maximize referrals to highly qualified prospects.

One of the primary responsibilities of any team leader is the establishment of the team’s culture.

Think of culture as being the rules of behavior.

The easiest way to think of this concept is to draw a horizontal line on a piece of paper. Put  “Jail” at one end of the line and “Country Club” at the other end.

If you have a jail kind of rule set, everything is spelled out in advance and everything is “by the book”. On the other hand if you’re running a country club, you have a laissez-faire type of atmosphere where anything goes.

Next, think about the behavior of your team. In this context the team can be the entire company, a department within the company, a separate project or a short-term initiative.

If you’re the leader of any of these teams, then you have the primary responsibility for establishing told “rules of the road”.

So think about the culture that you have established for your team and put a mark or an area somewhere along the line. You may have put it way over next to the word jail or next to the word country club.

Wherever you have placed your mark is the indication of how you would like the entire team to behave. And, wherever it is that’s fine as long as that’s what you want. Point being, you’ll attract employees that like that environment and you will repel those who dislike it.

Neither of these extremes works very well for a high performing and well oiled team atmosphere.

It’s much better to have a situational rules set in place.

With this senario you need to have a clearly defined rulebook that states how various situations will be acted upon.

As an illustration, you may decide to have safety adherence very strict and over near the word jail. On the other hand, when you have a company party going on, that may call for behavior closer to the country club spectrum.

In summary, think about the messaging you’re giving to your team. Your own personal behavior on a situational basis will dictate where the teams behavior will fall.

A major part of the Leriot System of Management is the periodic use of the Analysis phase of the system.

If your goal is to continually maintain a highly effective and well oiled business operation, you’ll need to conduct periodic analyses of your environment.

Generally, the tool we’re going to be discussing can be used for the entire company, a project within the company, a department and or even a team.

The term, SWOT, is an acronym for Strengths, Weaknesses, Opportunities and Threats. The general use of the tool is to conduct “scans” of your operating environment. Most consider the “S” and the “W” components to be used for an internal scan while the “O” and “T” areas are used for external scanning purposes.

At the company level, you would consider internal to be within the company; and, external to be outside the company. If you’re considering a component of a company, like a department, then external could be considered outside the department but still inside the company.

To make the tool highly effective you really don’t need to worry about that level of delineation.

Let’s go through the four components of a SWOT Analysis step-by-step.

Strengths

You should consider Strengths are those aspects of your “entity” which give you an advantage over similar organizations to yours. However, once again, it’s not vital for you to be doing a comparison vis-à-vis others.

Simply determined the resources and capabilities you have which are strengths in your in your team’s minds.

Weaknesses

Weaknesses are the flip side of Strengths. These are components and resources within your organization which need to be improved upon. Or, if they can’t be improved, need to be minimized regarding their impact on your organization’s ability to perform.

Opportunities

In general terms, an Opportunity exists when you can identify something, which if capitalized on, could be converted to revenues, reduced expenses or profits. Some examples would include an unrecognized customer need, new regulations in your favor, the exiting of a competitor from the market, or the availability of a new employee.

Threats

These are areas which could present a “clear and present danger” to your organization. If you read the list of potential Opportunities I gave above and rewrite them slightly they would represent an excellent list of potential Threats.

Be careful when you’re listing Threats. It’s easy to identify remote and obscure areas which could potentially threaten your organization. There’s not much value and listing them. What you want on this list are items which are currently present or are likely to be present in the near future.

Supercharging The Analysis

Doing the analysis itself is important and should be done no less frequently than annually.

Even more important is the following exercise.

• Look at every single item listed anywhere in the SWOT Analysis.
• Identify a specific “potential initiative” for each item on the list.
• Rank each potential initiative based on its ability to impact revenue or profits dramatically.
• Next, select the top-five and re-rank them based on the ease of implementation.
• Finally, select the top three and establish a plan to bring them to fruition.

Make this exercise a regimen that you’ll repeat for your organization no less frequently than once per year.

The last several years have been difficult in many ways. Perhaps your business is not performing at the level you are used to or the level you’ve hoped for.

Frankly, you probably shouldn’t be blaming it totally on the economy. Often, failure to develop every single staff person every year can be a major contributor to the issue.

Creating individual development plans for each of your employees is a critical part of an overall staffing plan.

Looking at staffing from the top level view, the major components of individual development are these:

• Position descriptions
• Annual performance evaluations
• Annual development plans

The first part, position descriptions, simply means that every position in your company now, a year from now and several years from now should have a detailed description of what the position entails.

Second, no less frequently than annually, every employee should receive a high-quality evaluation from their immediate supervisor.

Third, every employee should also have a personal annual development plan.

The implementation cycle would look something like the the following.

The employee would have received a detailed performance evaluation based upon two things. One, how well they are fulfilling their duties as the holder of their current position. Two, their specific performance relative to the goals attached to that position for the prior year.

Assuming you are conducting periodic accountability meetings, you have at a minimum 12 months of goal performance. The performance evaluation would have given the employee a summarization with respect to his or her performance relative to those predetermined goals.

During the performance evaluation session, you and the employee should have agreed upon certain shortcomings.

The annual employee development plan is designed to help the employee with two specific things.

1. Getting better at their current job
2. Getting ready for their next job

Their individually produced annual development plan will therefore contain specific steps for improving their overall performance. Part will be vis-à-vis their performance position description and will have new annual goals delineated.

These new goals will be both for improving their performance and their current job and taking the necessary steps to get to the next level.

Position descriptions and job descriptions are slightly different. Let me explain. A position description reflects the duties, goals, compensation, reporting structure, and other matters relating to a specific position. There is no person connected with a position description.

A job description relates to the duties performed by an individual person. Think about this way. Many of us have small businesses. When you are running a lean and mean organization many people are expected to hold down one, two or even more positions.

So a job description for let’s say Sarah might include the duties as a receptionist and as a file clerk. You are better advised to evaluate service performance as both a receptionist and as a file clerk Van to create a unique position description for her.

Position descriptions and the related organization charts are excellent hiring and development tools. The best advice for every business owner is to develop solid position descriptions for every box on the organization chart. In fact, most companies should have organization charged for now, a year from now and 10 years from now. Provided that the organization is a growing one and the subsequent organization charts will have positions on it which are not yet being filled. That’s because they don’t exist.

However, these future position descriptions have great value. Let’s say for example you currently have only one office. Based on your strategic plan, however, the 10 year organization chart indicates two new branch offices. Your talented and aggressive employees will be asking you about those future branch offices. This gives you an excellent opportunity to coach them on the skills needed to be, a branch manager.

In summary, resists the temptation to create individual job descriptions for every employee you currently have. You’re much better served to create position descriptions and if needed assign various employee is a multiple positions. When you give your employee performance evaluations of course, you will need to evaluating them based on their job description. In other words how well they performed in the positions you’ve assigned them.