Living on Saipan has been a dream for me and my family. What started out as a possible two-year contract with the college has extended to 14 years. During those years, starting in 1997, we have seen many changes that have taken a toll on the individuals, businesses, and other organizations. We are currently in the midst of a transition that will make or break this place.
This wasn’t unforeseen; in fact, it was predicted by numerous other writers in the paper and individuals who are concerned about the future of the CNMI. One of the difficult things for me to witness is the disregard of undeveloped potential, and how many of our resources are wasted. Tony Pellegrino has written about the “acres of diamonds” that lie under our feet, but people ignore them to search elsewhere for solutions.
A couple of months ago, I promoted a concept called the BizGrowth Challenge that had the goal of gathering the various resources to assist business owners to be as successful as possible. Many agencies and individuals supported me in this effort, but for whatever reason, there was a lack of interest on the part of those we were trying to assist.
Let me step back and share some of my history and why I know there is huge potential, but one must be willing to start digging underneath their feet to discover the diamonds they are standing on. My first business was an advertising agency that I started while I was in graduate school in 1982. One of my clients was a small exercise equipment manufacture called Weslo, and I worked closely with one of the owners, Gary Stevenson, to develop marketing materials to promote their fitness equipment.
I eventually graduated with a master’s degree and joined the Air Force to fly as a navigator on the KC-135 aircraft, and Weslo went on to acquire the rights to name brand companies in the fitness industry such as ProForm, Gold’s Gym, and NordicTrack, and become a billion-dollar corporation under the name ICON Health & Fitness.
In the ensuing years, my experience with Weslo and their ultimate success caused me to pursue the answer to this question: “Why do some businesses experience spectacular success and create an ideal lifestyle for their owners, while the majority of business owners seem to create a “job” for themselves that makes it more difficult to live their ideal lifestyle?”
In pursuit to answer that question, I earned a second master’s degree in management, and spent countless hours and thousands of dollars devoted toward learning the business principles and strategies from the books, tapes and seminars of individuals who are considered the best in their field. I learned and applied effective business marketing and management concepts that could produce dramatic results over time, and free business owners to either pursue more opportunities or create a more balanced lifestyle as their business continued to grow.
In addition, I was told that the Air Force spent over $600,000 training me to create a flight plan and successfully navigate a multi-million dollar aircraft to complete its mission to get from point A to point B. Because of my previous business background and work with clients, I could see a lot of similarities in what I was doing as a navigator and what it takes to develop an effective strategy for a company to take their business as high as they want to go with it.
But here’s the rub, they must be willing to get on the runway and give it a full-throttle effort to take their business off the ground. If they don’t believe they can take off, they won’t even try. My biggest concern is that many business owners have given up and are thinking about their exit strategy (how they can get their business off the runway) instead of their takeoff strategy.
Yes, it has become extremely difficult for some to operate a business and turn a profit, but there are still many opportunities for those who are willing to try. Once an individual gives up, there is a 90 percent chance of failure. However, if a business owner maintains an open mind to examine the possibilities, and then gives it a full-throttle effort to tackle their biggest challenges and opportunities then they have a 90 percent chance of success.
Just like in my old navigation days, it requires you to know your destination, then create a plan, identify the needed resources, and then keep the image of your ultimate outcome constantly before you as you make the effort to accomplish critical goals that will allow you to achieve the vision you have for your business and personal life. Don’t remain stuck on the runway of life, hoping that the weather changes. Become the instrument of change.
Friday, July 29, 2011
Thursday, July 21, 2011
Create a Business that Operates Without You
“You can’t be one person in one area of life and another person in another area of life. Life is one indivisible whole” – Mahatma Ghandi
The ultimate objective of most business owners is to create a consistently profitable business that can operate without you. That “without you” part means that you should be able to achieve success in business, along with a balance lifestyle in the process so your business life is in harmony with your personal life, and both of them give you more life.
By contrast, some business owners are so focused on the success of their business that their personal life suffers. Robert Louis Stevenson said: “Perpetual devotion to what a man calls his business is only to be sustained by perpetual neglect of many other things.” So that you know exactly what I’m talking about, let me give you a quick overview of the six dimensions in both your personal and your business life.
Your capacity to develop and achieve balanced growth in these six individual dimensions will affect the quality of your life. They are your intellectual, professional, physical, relational, and financial capacities.
Harvard psychologist Howard Gardner refers to eight different abilities that he calls our multiple intelligences. Now it may not be possible to develop equally in all six dimensions because we all have strengths and passions that drive us in one or more of the areas. Some may even be limited because they are challenged in an area. However, neglecting any of them over a long period of time can have a detrimental effect on you as a whole person.
Your goal should be to identify, develop, and maximize your unique abilities so that you can bring value to others. Here are the three guidelines to help you in that process:
1. Your Calling – This is the unique ability that motivates you and becomes your driving force. Goeth observed: “The man who is born with a talent which he is meant to use, finds his greatest happiness in using it.”
2. Your Contribution – You should add value to the lives of others through your contributions. In the beginning your contribution may be small, but as you continue to use your talents, your ability increases.
3. Your Capacity –Through continued contributions, you will develop a greater capacity to add value to the lives of others. The reciprocal affect will be that your life will be blessed with greater abundance because of the value that comes back to you.
Now let’s turn the discussion to the importance of understanding and developing the six dimensions of your business. An individual’s six dimensions correlate to an organization’s six dimensions, and there are similar implications if one or more are neglected. The business dimensions are innovation & growth, professional development, operational capability, stakeholder relationships, marketing strength, and financial improvement.
Your business will have strengths and weakness in each of these areas and there may be some that are emphasized more than others. However, none should be neglected as your organization grows. The advantage your organization has over your individual ability to progress in the six dimensions is that you can hire others to focus on the areas in your business you feel are your weaknesses, while you can only focus on those areas that are part of “your calling” or unique ability. As your business grows, you can place capable individuals in all the important roles and responsibilities of your company so that it is balanced in all six dimensions. This will allow you to remain focused on your calling, give a greater contribution, and develop your full capacity – and so will everyone else in your company.
Can you imagine the accelerated growth that you would enjoy if everyone who works within your organization feels like they are fulfilling their calling by making a greater contribution to customers and the community, and increasing their capacity to serve as the organization continues to grow?
Not only would this reflect on the bottom line, it would have a great impact throughout your organization as turnover decreases, more customers become loyal to your business, and the general culture is positive, encouraging, and stimulating.
Once this occurs, work becomes play and your business becomes a finely-tuned vehicle that can take you to wherever you want to go. In the process, it will add more life to you, your staff, and the customers you serve. Ultimately, you will be able to step out of your business and allow it to operate without your presence so you can pursue other passions, or just spend less time in it while you develop yourself in other ways.
The ultimate objective of most business owners is to create a consistently profitable business that can operate without you. That “without you” part means that you should be able to achieve success in business, along with a balance lifestyle in the process so your business life is in harmony with your personal life, and both of them give you more life.
By contrast, some business owners are so focused on the success of their business that their personal life suffers. Robert Louis Stevenson said: “Perpetual devotion to what a man calls his business is only to be sustained by perpetual neglect of many other things.” So that you know exactly what I’m talking about, let me give you a quick overview of the six dimensions in both your personal and your business life.
Your capacity to develop and achieve balanced growth in these six individual dimensions will affect the quality of your life. They are your intellectual, professional, physical, relational, and financial capacities.
Harvard psychologist Howard Gardner refers to eight different abilities that he calls our multiple intelligences. Now it may not be possible to develop equally in all six dimensions because we all have strengths and passions that drive us in one or more of the areas. Some may even be limited because they are challenged in an area. However, neglecting any of them over a long period of time can have a detrimental effect on you as a whole person.
Your goal should be to identify, develop, and maximize your unique abilities so that you can bring value to others. Here are the three guidelines to help you in that process:
1. Your Calling – This is the unique ability that motivates you and becomes your driving force. Goeth observed: “The man who is born with a talent which he is meant to use, finds his greatest happiness in using it.”
2. Your Contribution – You should add value to the lives of others through your contributions. In the beginning your contribution may be small, but as you continue to use your talents, your ability increases.
3. Your Capacity –Through continued contributions, you will develop a greater capacity to add value to the lives of others. The reciprocal affect will be that your life will be blessed with greater abundance because of the value that comes back to you.
Now let’s turn the discussion to the importance of understanding and developing the six dimensions of your business. An individual’s six dimensions correlate to an organization’s six dimensions, and there are similar implications if one or more are neglected. The business dimensions are innovation & growth, professional development, operational capability, stakeholder relationships, marketing strength, and financial improvement.
Your business will have strengths and weakness in each of these areas and there may be some that are emphasized more than others. However, none should be neglected as your organization grows. The advantage your organization has over your individual ability to progress in the six dimensions is that you can hire others to focus on the areas in your business you feel are your weaknesses, while you can only focus on those areas that are part of “your calling” or unique ability. As your business grows, you can place capable individuals in all the important roles and responsibilities of your company so that it is balanced in all six dimensions. This will allow you to remain focused on your calling, give a greater contribution, and develop your full capacity – and so will everyone else in your company.
Can you imagine the accelerated growth that you would enjoy if everyone who works within your organization feels like they are fulfilling their calling by making a greater contribution to customers and the community, and increasing their capacity to serve as the organization continues to grow?
Not only would this reflect on the bottom line, it would have a great impact throughout your organization as turnover decreases, more customers become loyal to your business, and the general culture is positive, encouraging, and stimulating.
Once this occurs, work becomes play and your business becomes a finely-tuned vehicle that can take you to wherever you want to go. In the process, it will add more life to you, your staff, and the customers you serve. Ultimately, you will be able to step out of your business and allow it to operate without your presence so you can pursue other passions, or just spend less time in it while you develop yourself in other ways.
The 3+1 Growth Formula
Every business owner should want to grow their business. Growth doesn’t only refer to getting bigger, but to also getting better. Before I share the 3+1 Formula, let’s look at the core elements of sustained growth. Most growth metrics are measured in dollars that eventually translate into increased profits. If profits are the only focus of a business, it’s easy to get a quick boost in profits by simply eliminating some overhead expenses. This can be accomplished by terminating some of your workforce. It will create a short-term solution, but the consequences of this action usually results in your organization providing less service and lower quality, which will eventually lead to fewer sales.
Let’s look at the four multipliers of your business: 1) Purpose-driven, 2) Productivity, 3) Performance, and 4) Profitability. You can see that profitability is the outcome from doing the other three multipliers well, but it starts with understanding the purpose of your business, and that can be accomplished by examining your business model, which includes these three major components: 1) Who you serve – customers, 3) What you serve customers – products, and 3) How you serve customers – operations.
You’ll notice that all three components focus on service, particularly how you effectively serve your customers better. The central purpose of your business is to create a customer by providing a product that will satisfy a need or want, and then operate in a manner that best serves them.
We can now define business growth as the realization of your mission and making a greater contribution to the community (purpose-driven), finding new and better ways to add value with your limited resources (productivity), becoming consistently strong and more capable in what you do (performance), and increasing the value you offer while keeping costs low (profitability). Each of the four multipliers is centered on a strong customer focused business culture.
So now you can imagine that every aspect of the three-step growth formula involves your customers. Everything you do in your business should lead to enhance one or more of the following three components. The last one only improves your profitability, but it alone cannot create sustained growth. Here, then, is the 3+1 Formula for sustained business growth:
1. Increase your number of new customers. Your focus should not be to just bring anyone through your business doors, but to identify the specific demographic or psychographic profile of those you want to serve. These are your ideal (perfect) customers. You should know where they live, and then devise a strategy to get more of them to visit and make a purchase.
2. Increase the average transaction value. Know how much the average customer spends, and identify the goods and services you can offer that will add more benefits and value to their life. Implement ways to up-sell, or cross-sell other products that would enhance the life of your ideal customers. Have your staff share a short presentation about your company or products to let you customers know why you are different from the competition, and then use a series of questions to ensure that they have everything they need before leaving your business.
3. Increase the number of repeat transactions. Do you know how often your customers return? Do you track the length between purchases, or know when someone has become inactive in their purchases? Sometimes it only takes a letter or phone call to get them to return, or to tell you why they won’t be back. Identify how you can operate your business so that it is more convenient, easy, and fun for your ideal customers and encourages them to return more often and remain loyal to your business.
These are the essential three components for sustainable growth because they determine the value you offer to your customers and how much they are willing to spend with your company. All marketing and growth techniques that increase sales can be categorized under one or more of these components. The +1 part of the formula is often the major element that a business owner focuses on first to increase profits. It is important, but by itself it will not create sustainable growth. Here it is:
+ 1. Decrease the costs to efficiently accomplish the three components above. This requires you to optimize all the costs within your business. Identify how to eliminate or minimize the fixed and variable costs that are essential to achieve the three components, while maximizing the actual and intrinsic value you add to your ideal customers. Step back and examine your business and how you currently use the 3+1 Formula, or brainstorm ways you can enhance any of the components to effectively achieve sustainable growth for your business.
Let’s look at the four multipliers of your business: 1) Purpose-driven, 2) Productivity, 3) Performance, and 4) Profitability. You can see that profitability is the outcome from doing the other three multipliers well, but it starts with understanding the purpose of your business, and that can be accomplished by examining your business model, which includes these three major components: 1) Who you serve – customers, 3) What you serve customers – products, and 3) How you serve customers – operations.
You’ll notice that all three components focus on service, particularly how you effectively serve your customers better. The central purpose of your business is to create a customer by providing a product that will satisfy a need or want, and then operate in a manner that best serves them.
We can now define business growth as the realization of your mission and making a greater contribution to the community (purpose-driven), finding new and better ways to add value with your limited resources (productivity), becoming consistently strong and more capable in what you do (performance), and increasing the value you offer while keeping costs low (profitability). Each of the four multipliers is centered on a strong customer focused business culture.
So now you can imagine that every aspect of the three-step growth formula involves your customers. Everything you do in your business should lead to enhance one or more of the following three components. The last one only improves your profitability, but it alone cannot create sustained growth. Here, then, is the 3+1 Formula for sustained business growth:
1. Increase your number of new customers. Your focus should not be to just bring anyone through your business doors, but to identify the specific demographic or psychographic profile of those you want to serve. These are your ideal (perfect) customers. You should know where they live, and then devise a strategy to get more of them to visit and make a purchase.
2. Increase the average transaction value. Know how much the average customer spends, and identify the goods and services you can offer that will add more benefits and value to their life. Implement ways to up-sell, or cross-sell other products that would enhance the life of your ideal customers. Have your staff share a short presentation about your company or products to let you customers know why you are different from the competition, and then use a series of questions to ensure that they have everything they need before leaving your business.
3. Increase the number of repeat transactions. Do you know how often your customers return? Do you track the length between purchases, or know when someone has become inactive in their purchases? Sometimes it only takes a letter or phone call to get them to return, or to tell you why they won’t be back. Identify how you can operate your business so that it is more convenient, easy, and fun for your ideal customers and encourages them to return more often and remain loyal to your business.
These are the essential three components for sustainable growth because they determine the value you offer to your customers and how much they are willing to spend with your company. All marketing and growth techniques that increase sales can be categorized under one or more of these components. The +1 part of the formula is often the major element that a business owner focuses on first to increase profits. It is important, but by itself it will not create sustainable growth. Here it is:
+ 1. Decrease the costs to efficiently accomplish the three components above. This requires you to optimize all the costs within your business. Identify how to eliminate or minimize the fixed and variable costs that are essential to achieve the three components, while maximizing the actual and intrinsic value you add to your ideal customers. Step back and examine your business and how you currently use the 3+1 Formula, or brainstorm ways you can enhance any of the components to effectively achieve sustainable growth for your business.
Wednesday, July 6, 2011
Business Transition Points
Rik coaches businesses through their most challenging transition points so they can jump to the next growth level and progressively realize the vision they have for their company. He can be contacted at RikVillegas@gmail.com.
Life throws at us a crazy series of challenges that allow us to grow and progress or shrink and regress. These challenges are transition points that occur at various times throughout our life to “test our mettle” and either make us or break us. Examples of these transition points are first, birth into the cold & cruel world, finishing school, starting a new career, finding the love of your life and getting married, having children and raising them, retiring, and then the final exit. Birth and death are given for those who are reading this now, some challenges are common to most people, and a few are unique to your situation.
All of the transition points offer the opportunity for progression – if one takes the challenge and perseveres in the face of obstacles. Most of the greatest books and movies center on the theme of a person or group successfully conquering a challenge. Progression through all transition points requires a new way of thinking, developing new skills, and implementing effective strategies to successfully navigate through them to enjoy a happy, fulfilled, and richer life.
Similarly, a business offers owners, managers and staff specific transition points that provide the opportunity for progression or regression. Those who do not have the skills, training, or strategies to successfully meet the numerous challenges that are thrown at them will feel stuck in a malaise of busyness, where there is too much to do, too little time to do it, and the feeling of just being stuck in a rut.
Your business transition points (BTP) can come from internal or external factors. These factors can include changes made by your competition that impact your business, technological advances, international or global events, legal or political policies, economic changes, environmental factors such as floods, tornadoes, or drought, and socio-cultural changes over time.
The external factors tend to be out of your control, or your influence is minimal. This means that as they occur, all the other businesses in your competitive category will also feel the same impact, so the degree of impact and your ability to adapt to the changes will either help or hinder your business. The slow will go, and the fast will last. Your awareness of these changes and the direct and indirect affect it will have on your business can give you a competitive advantage, while being unaware of these changes creates uncertainty and confusion as your business revenues drop.
Now let’s consider the internal factors that can impact your business and create transition points in your organization. These are typically unique to your business and you have more control over them. The personal growth of you and your staff will directly affect the growth of your business. The personal relationships and habits of you and your staff at home can carry over into the workplace. One factor that business textbooks often leave out as a reason for business failure is the failure of the owner to maintain important personal relationships at home. Many businesses have failed or struggled, not because of the products, market, or external conditions, but because of a lack of personal life balance that deteriorated the important personal relationship in the business owner’s life.
There are numerous BTPs that occur as a business owner grows from a start-up to the point where employees are hired and the business starts to expand. These “growing pains” are opportunities if the owner is able to learn from the experience or get outside help from someone who can help them take a bird’s eye view of their business and identify the correct path to take to master a particular transition point and progress towards the vision they have for their company. Far too often, the owner of the business feels stuck as they approach the numerous transition points that require new ways of thinking, new strategies, and the implementation of effective systems.
There are four key multipliers that you can apply as you move your business to the next level of growth. These all start with “P” and they are: 1) Purpose-Driven, 2) Productivity, 3) Profitability, and 4) Predictability.
Let me briefly discuss the value of each of these multipliers and I’ll elaborate on them in future articles because if you fully utilize them, you will find yourself dealing with each challenge as an opportunity to grow and become better and more viable.
First, you must identify the purpose of your business and then center every decision on achieving that purpose. This allows your company to be extremely effective as it achieves the goals that produce the results, which then achieves the purpose and vision of your company. The purpose of a business is often found in the mission statement and the core set of values it is committed to live. Too often, though, the mission statement was created by a consultant or committee to sound good, but it does not truly reflect the values and vision of the owner or staff. In fact, most mission statements are so generic that if you took the name of the business out of it, it could be a mission statement for practically any business.
Second, you must achieve a level of productivity through the efficient use of resources. This includes learning how to master the use of your time, and knowing how to get things done in the best and fastest way possible with the least use of limited resources.
Third, if you’ve mastered productivity, then it becomes much easier to achieve profitability. Profit can be used to measure the value you offer to your customers. If they find value in what you offer them, they will return that value in the form of monetary transactions, continued loyalty, and joyful interactions.
The last multiplier looks at creating predictability through systems, policies and procedures in the operation of your business. It shouldn’t matter which employee serves a customer, the customer should have a predictable experience each time.
As you apply the four multipliers, it will give you greater clarity, focus, and confidence to conquer each business transition challenge, and to achieve sustainable growth toward your vision.
Life throws at us a crazy series of challenges that allow us to grow and progress or shrink and regress. These challenges are transition points that occur at various times throughout our life to “test our mettle” and either make us or break us. Examples of these transition points are first, birth into the cold & cruel world, finishing school, starting a new career, finding the love of your life and getting married, having children and raising them, retiring, and then the final exit. Birth and death are given for those who are reading this now, some challenges are common to most people, and a few are unique to your situation.
All of the transition points offer the opportunity for progression – if one takes the challenge and perseveres in the face of obstacles. Most of the greatest books and movies center on the theme of a person or group successfully conquering a challenge. Progression through all transition points requires a new way of thinking, developing new skills, and implementing effective strategies to successfully navigate through them to enjoy a happy, fulfilled, and richer life.
Similarly, a business offers owners, managers and staff specific transition points that provide the opportunity for progression or regression. Those who do not have the skills, training, or strategies to successfully meet the numerous challenges that are thrown at them will feel stuck in a malaise of busyness, where there is too much to do, too little time to do it, and the feeling of just being stuck in a rut.
Your business transition points (BTP) can come from internal or external factors. These factors can include changes made by your competition that impact your business, technological advances, international or global events, legal or political policies, economic changes, environmental factors such as floods, tornadoes, or drought, and socio-cultural changes over time.
The external factors tend to be out of your control, or your influence is minimal. This means that as they occur, all the other businesses in your competitive category will also feel the same impact, so the degree of impact and your ability to adapt to the changes will either help or hinder your business. The slow will go, and the fast will last. Your awareness of these changes and the direct and indirect affect it will have on your business can give you a competitive advantage, while being unaware of these changes creates uncertainty and confusion as your business revenues drop.
Now let’s consider the internal factors that can impact your business and create transition points in your organization. These are typically unique to your business and you have more control over them. The personal growth of you and your staff will directly affect the growth of your business. The personal relationships and habits of you and your staff at home can carry over into the workplace. One factor that business textbooks often leave out as a reason for business failure is the failure of the owner to maintain important personal relationships at home. Many businesses have failed or struggled, not because of the products, market, or external conditions, but because of a lack of personal life balance that deteriorated the important personal relationship in the business owner’s life.
There are numerous BTPs that occur as a business owner grows from a start-up to the point where employees are hired and the business starts to expand. These “growing pains” are opportunities if the owner is able to learn from the experience or get outside help from someone who can help them take a bird’s eye view of their business and identify the correct path to take to master a particular transition point and progress towards the vision they have for their company. Far too often, the owner of the business feels stuck as they approach the numerous transition points that require new ways of thinking, new strategies, and the implementation of effective systems.
There are four key multipliers that you can apply as you move your business to the next level of growth. These all start with “P” and they are: 1) Purpose-Driven, 2) Productivity, 3) Profitability, and 4) Predictability.
Let me briefly discuss the value of each of these multipliers and I’ll elaborate on them in future articles because if you fully utilize them, you will find yourself dealing with each challenge as an opportunity to grow and become better and more viable.
First, you must identify the purpose of your business and then center every decision on achieving that purpose. This allows your company to be extremely effective as it achieves the goals that produce the results, which then achieves the purpose and vision of your company. The purpose of a business is often found in the mission statement and the core set of values it is committed to live. Too often, though, the mission statement was created by a consultant or committee to sound good, but it does not truly reflect the values and vision of the owner or staff. In fact, most mission statements are so generic that if you took the name of the business out of it, it could be a mission statement for practically any business.
Second, you must achieve a level of productivity through the efficient use of resources. This includes learning how to master the use of your time, and knowing how to get things done in the best and fastest way possible with the least use of limited resources.
Third, if you’ve mastered productivity, then it becomes much easier to achieve profitability. Profit can be used to measure the value you offer to your customers. If they find value in what you offer them, they will return that value in the form of monetary transactions, continued loyalty, and joyful interactions.
The last multiplier looks at creating predictability through systems, policies and procedures in the operation of your business. It shouldn’t matter which employee serves a customer, the customer should have a predictable experience each time.
As you apply the four multipliers, it will give you greater clarity, focus, and confidence to conquer each business transition challenge, and to achieve sustainable growth toward your vision.
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