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What is Our Business? Enabling to Create the Future

I wrote a prior entry regarding an experience I had with a fully enabled employee. In that interaction, the employee made a quick decision to win my business by gaining my trust and doing something memorable. As a result, I choose to buy from this retailer whenever I have control over buying from their sector.

As I’m reading through Drucker, I’ve realized how important focus and communication is to a business’ existence. Not just the typical HR or “training-esque” messages that have to be conveyed from top to bottom and back, but the real meat and potatoes topics that facilitate innovation, allow enabled employees to exist and define the hedges of all decision making. Heavy Stuff.

A part I had not considered is the ideal of micro-decisions or those decisions throughout a day, made at all levels of the org, that add up to a macro-decision. Each employee acting on behalf of their own goals and what they perceive the company goal’s to be creates the company’s future and direction. Knowing that, how do we as facilitators mold the outcome we wish to see and ensure that it becomes a future reality?

From Drucker’s vantage, the most important question to answer is:

What is our Business? [It] is almost always a difficult question and the right answer is usually anything but obvious.
– Peter Drucker, Management, Tasks, Responsibilities, Practices (1974)

So how do I go about creating that answer? Like most good processes, we start with a list of questions to get all ideas out on the table. Here are the questions that I will start with to determine what business I am in.

Who is the customer?

Drucker theorizes that there is no one customer but rather at least two per business. To dig into this a better way, ask:

  • Who are all the parties needed to close a sale of my good or service?
  • Does my end-customer rely on an interior customer?
  • Are there other stakeholders that create my customer?

Where is the customer?

  • Where do they congregate?
  • Who influences their buying based on location/proximity?
    • Culture
    • History

What does the customer buy?

  • If it’s a good, why buy it? what other categories describe it?
  • If it’s a service, why not do it themselves? what other categories compete with it?
  • Does the customer know what and why they buy it?
  • What does the product say about the customer and his/her world?

Hardest thing you’ll ever do

The biggest point that Drucker seems to make about this exercise, is that the majority of people will zoom by as if the question is rhetorical or worse, redundant. The reason this is so difficult (and thus considered moot) is that the person or team deciding the scope of the business have to consider all outlier points of view and competitors. For example, Cadillac, a now well-known brand once struggled to find foothold as a division of GMC. Until the Marketing team discerned that Cadillac is not just a car but a status symbol, the company couldn’t begin to grow. Until competitors of Cadillac, like mink coats and gold rings, were identified, market segmentation and sales would only continue to slip.

In that same line of thinking, how can I help identify not just the root (and easy) competition, but the areas outside the known locus that are also contributing to the either growth or detriment of my business?

Closing Shop

What questions do you ask as you define your business? How are you logically and emotionally drawing a line in the sand to state definitively, “this is my business and this is who I am.” It’s a large step to take, but obviously an important one, and one that can define my path in this business for many decisions to come.


Image Credit: “Heaven and Hell” – Jim Harmer

 

Farmer and Plow

Purpose and Function of Business

It is the customer who determines what a business is. [He] alone whose willingness to pay for a good or for a service converts economic resources into wealth, things into goods. What the customer buys and considers value is never just a product. It is always a utility, that is, what a product or service does for him. Peter Drucker, Management, Tasks, Responsibilities, Practices (1974)

All the work that I do in my business has no effect if there is no customer willing to ascribe value to it. Without that transfer of “resources into wealth”, a business doesn’t truly exist or have any hope of growth. That latter statement alone definitely puts humility back on the table even if there is phenomenal growth. Said another way, without being psychic with what a customer will need or want, my business could disappear in an instant. So let’s flip Drucker’s assertion on its head. My guess is that he implied this in his statement but for the sake of clarity: businesses exist to create products and services for customers. Customers alone decide this value. Businesses thrive when they can create products and services for customers before customers know they need them. Customers then trust the value. In thinking through the real economic darlings over the past few decades, the availability heuristic points to Apple and Steve Jobs. Enough has been written ad nauseum to cover how his particular brand of business grew so successfully. What I’d prefer to point out are the two functions that Apple undertook (and all other successful businesses) to consistently achieve growth and trust in the mind of the customer. How do I (you) know what a consumer wants before they do? How did Jobs consistently hit the mark for over a decade? Two ways: Marketing and Innovation.

What is Marketing?

From my fledgling perspective, what we currently call Marketing is in fact a form of Selling. That is, positioning of an already existent product and convincing a potential customer on why they should purchase the good or service. Marketing then, is the study of the consumer. Creating a persona and description of a customer that is so real and understood that creating the correct product or service is a natural progression of knowing the man or woman. If we indeed know the customer’s demographics, needs, values and realities, then we can ascribe the particular itch that  a consumer wants to scratch.

What isn’t Marketing

Selling isn’t the antithesis of Marketing, but if I (we) were able to fully understand a customer and provide him with exactly the good or service he needs, then in what way do we need to Sell? In reality, if we have the perfect product, it’s about bring awareness to the consumer that we exist and this product exists. This is called Advertising and, in my simple head, is a sub-category of Selling. Now, I work at a Digital Marketing agency. We call it that because that’s what our customer expects it to be called. But I would prefer to have our service known as Digital Selling and Advertising. We do assist with persona creation and identification of how that particular type of person may shop and search, but it’s not product development. And it’s definitely not helping push products that are so perfect we’re not needed. In fact, the imperfections of business are how my company even exists! Another dose of humility. Back to Apple, it’s obvious the lineage that a designer could see an opportunity in how consumers use Telephones*, Music Players and Computers and make changes that improve upon these. In knowing the customer so well, Apple was able to improve an entire line of technology and bump the entire segment up to the next level. This process is known as Innovation.

What is Innovation?

Innovation (sans leverage) is one of my least favorite words because it is thrown around so often. True innovation is very rare and, though innovation does mean improvement, I think some type of reservation for big steps is deserved, especially since it’s such an important piece to business growth. The generic form of innovation is simply seen in the lowering of price for the same good or service OR the improvement of a good or service for the same price. These micro-innovations are the backbone of our economic model and fairly simple (not easy) to come by. Where deep innovation develops is in the lateral step over, i.e. the creation of an entirely different product or service to help a customer meet a need. For example, math machines slowly developed over 10s of years from the room-sized “computers” in the 50s to the smaller “calculators” in the 70s but even so, these micro innovations produced the exact same output: answers to equations. The machines got smaller and more powerful but they were roughly the same at each generation; from a macro point of view. It wasn’t until IBM and Apple set about in the Personal PC wars, that we saw much larger Innovation, i.e. movement from Universities and Governments into the home. This shift brought about billions of new customers and paved the way for the modern Internet. That’s Innovation of mass scale rather than incremental improvement.

In Summ

For my own exercise, determining the data needed to understand the customer is step one. Learning all existing answers to this customer’s problems is step two. Defining my own business is step three. How are you determining products and services for your customers? What are you currently selling and how can it be ameliorated? Is there always room for innovation?


* Autocorrect wanted this to be Cell Phones. Man, things have changed fast.
Image Credit: STEVE MURPHY of Toledo Blade

What's seen as the opposite of management

Four requirements to be a Great Manager

Despite all the connotations of management being “the man”, it’s served as one of the most powerful tools in the advancements of business and capitalism over the past 150 years. The downfalls of what management has been is (honestly) because managers are sometimes short-sighted, ungrateful or both.

In that vein, improving management is about being a better (and more aware) manager. What are the things that we need to know and be aware of to ensure that we’re creating the best outcomes for our employees and the business.

What is Management

At its core, management is a human science. One that is meant to empower people to become more effective as a group over just an individual. Even more, management is about encouraging the focus of strengths so as to mitigate weaknesses.

A beautiful synopsis of management, per Peter Drucker’s, The New Realities:

To be sure, the fundamental task of management remains the same: to make people capable of joint performance through common goals, common values, the right structure, and the training and the development they need to perform and respond to change.

Clearly, management is supposed to be focused on people and the facilitation to ensure they have what they need to execute.

In viewing Drucker’s summary of management, a few things pop out as “have-to-haves” so that management could be effective.

  1. A company must have clear goals and values
  2. A company must have a decided (and fluctuating) structure
  3. A company must have training and development opportunities
  4. A company must be able to innovate

Goals and Values

If a group of people will work toward a specific destination, it must be abundantely clear on where that destination is and (hopefully) the steps that will be taken to get there. In order to convey this message effectively, the vehicle of company vision, goals and values (VGV) must be clear enough, and big enough, to encompass the entirety of the people within it. Said another way, a common VGV must be clear, public and constantly repeated so that there is no confusion, at any level of the business, what direction people should move toward. Management’s primary objective is to ensure that people have what they need to move toward these VGVs.

Company Structure

Though this changes as the outside culture shifts, general structure has always been necessary to conduct work. Some parts of structure are administrative, others functional and others strategic; all work in tandem to create the right layout of teams, reporting and hierarchy.

Most important, the top-down and bottom-up cultures must be defined, even organically, to promote the best possible communication structure. This has to be in place so that the Vision, Goals and Values make their way to all workers.

Training and Development

So the old joke goes:

A CFO and CEO were discussing the rising costs of training for employees. CFO asks, “Why are we spending so much? What if we train them and they decide to leave?” To which the CEO replies, “What if we don’t train them and they decide to stay?”

Managers or someone should often keep a forward-facing eye toward what attributes and skills are needed to continually execute the VGVs of the company. In my experience, this list of developmental needs is organically created by the people doing the work who intuitively know when they are or aren’t able to complete work because of a dearth in training.

As expensive as it is, most skill-sets require some level of additional development so that the employee can continually become more effective and efficient. Sadly, I often hear of friends or family who pine for additional training but are turned down because it’s not in the budget. If the training fits the VGV, which the employee should understand, then becoming a better version is always in the budget.

Innovation: Management v. Entrepreneurship

One of the more common facets within the world v. “the man” arguments is that management is a stifle to the Entrepreneur. I’m sure that in some cases, especially generations ago, the Entrepreneur could be seen as threatening to a business upholding its VGV.

First, I think it’s important to clarify that Entrepreneur and Management are not mutually exclusive. The tide is changing wherein most understand that they are two sides to the same coin, but for those holdovers, you should know that they each play a unique role in growth of a business. I’m paraphrasing from Drucker here, but a business doesn’t stabilize or become more efficient without good management. At the same time, a stable business doesn’t grow with good Entrepreneurship, commonly called, “Intrepreneurship”, or an employee that innovates and disrupts current protocols.

When these two are combined, the outcome is powerful and creates a culture where best practices and stability are pursued but innovation and asking why are encouraged. Imagine how much can be accomplished when all levels see this as a part of the Vision!

So

A lot of information but nothing novel: management is necessary and when executed well is the lifeblood of stating, supporting and executing upon the VGVs of a company. So, how am I encouraging clear communication of VGVs? How do I create a stable structure but one that is open to innovation? How do I create an environment that is supportive of employees and their training?

What do you do to accomplish those things?

 

Circle in Squares

You are an Idiosyncracy

You are the only person on earth who can use your ability. It’s an awesome responsibility.
– Zig Ziglar

We’re all given strengths. By default we can’t be good at everything, so we also develop a few weaknesses in too. Neither are good or bad, just the reality of the situation. Something I’ve recently begun to understand is how incredibly frustrating and powerful these dichotomies can be intrapersonally, interpersonally and globally.

In managing other people, I quickly learned that the majority of my role is positioning and eliciting an individual’s strengths so that he or she can both become something more personally and professionally and use that strength to help the company grow. That sounds more bad-a than it is, especially when you work with really, really smart people.

One thing that has greatly assisted me in discerning other’s strengths was first understanding what mine were; I’m still doing that (and probably always). A thing not to confuse is “learning” your strengths vs. understand, e.g. StrengthFinders is a great tool to start down the path of listing the type of strengths you might have but is nothing more than an idea.

To really understand the strengths, you’ll need to do two things:

  1. Gather intel on the “flavor” of strength you possess.
  2. Interact often with that specific strength.

With “flavor” I mean that there are specificities to each generic strength. In 100% of cases, I would peg these small discretions as personality-based. For example, some people are excellent speakers but would make terrible stand-up comedians. The basic skills and natural ability to “talk out loud” are there but timing, humor-sense and even brain wiring doesn’t match what’s needed to deliver adequate punchlines. Said another way, these overall “strengths” are pinged with  little nuisances of weakness; ironically, we can use these “weaknesses” to make an even tighter moat around ourselves.

In interacting with our strengths, it’s a practice makes perfect-type of situation. How often do I intentionally interact with people (or myself) to ensure that I’m flexing my strength muscles? One way to do this is the literal statement of intentions to those around you that you trust that you are endeavoring to become better at a certain strength. More often than not, people will want to help you be better.

All said, our responsibility to ourselves, then, is to spend energy becoming the most of what we are built to be: by focusing in our own personal “flavor” of strength, we can create a brand by which others identify us.

How do you expand your strength? How are you creating your own brand?

25% Off

Impulse SprinklerI showed up at my local hardware store, broken sprinkler in hand, expecting the worst. Worst being a full refund of my money but no way to water my grass as I had the last one of the kind I needed. Eric helped me with the return but did something very unexpected: rather than just give me back my cash he made a strong recommendation.

Not once did he leave to talk to a manager, nor did he know how often I shop at this store because no personal information had been shared yet. Interestingly, he made a counter offer: he would give me the next level up of hardware at 25% off. Shed half the profit to make a customer happy? Yes please. That’s not something that I would expect from any place, at least, not any place where employees aren’t fully enabled to act in best interest for the customer.

What struck me was the confidence and deliberateness of the offer. Eric didn’t need to be told it was okay to make me a stronger customer. He wasn’t directed in how to “sweeten” the deal in hopes of securing a sale. He acted on his own regard.

How can we build up our co-workers and employees to feel fully enabled to act in a way they see fit? What are the ways to construct confidence and competence in creating the best results for our customers?

How do you facilitate a fully enabled team?