Author: Dana Baldwin

By M. Dana Baldwin

When you meet with your customers and prospects, you want to be perceived as a professional in your field.  What does it take to garner this respect? Broadly speaking, you need to be trusted for your knowledge, ethics and quality performance.

One of the first things you should be sure of is that you actually know as much as possible about whatever it is you are selling or representing.  Know your product or service inside out, upside down and front to back.  Be able to clearly describe not only the product or service itself, but especially what the application of that product or service will do for the customer.  The customer most often is seeking to solve some kind of problem.  If the customer actually believes your product or service will deliver the benefits you say it will, you have a higher likelihood of making the sale.  In order to have the customer believe you, you must earn his/her trust.  Knowledge is one of the keys to earning that trust.

Another key area is truly listening to the customer.  Many sales people believe they have to demonstrate how much they know to the customer, and they attempt to do this by talking entirely too much.  A much better approach is to listen to the customer’s perception of the problem, then responding with a simple explanation — talking in terms that show you know what the needs of the customer are and that you can help solve the problem for the customer. Creative questions are important to not only establish trust, but to gather information about the problem, what may have been tried already, and what the customer thinks might be solutions.

Don’t talk down your competition!  In one instance taken from my personal experience, our company, a relatively small machinery manufacturer, was going head-to-head with one of the best machinery manufacturers in the country for a large machine installation.  Our competitor met the prospect the day before we did, and the vast majority of their presentation was about how bad our design was and how it would not do what the customer wanted.  The next day, we met with the prospect, and we talked only about our own design and its performance, reliability, accuracy and effectiveness.  We got the order.  The other company shot itself in the foot, and within a year was out of that particular segment of the machinery business.

Along with not talking down your competition, drop the hard sell.  Customers don’t want to be sold, they want to make their own decision about whether to buy or not.  The last thing you should want is to make a sale with the wrong product or service, and to then suffer the loss of reputation and integrity fundamental to trust.

Speaking of integrity: you should always strive to live up to your word.  Example: We sold a machine to a customer which performed very well for them.  About five years after they received the machine, the main table cracked, and upon inspection, it was obvious that the casting had been made with an inclusion which led directly to the crack occurring.  Even though the machine was out of warranty by four years, we replaced the table and installed the new one at no charge to the customer, because, in our minds, it was the right thing to do.

Every once in a while you simply can’t make the situation come out as promised.  What should you do?  You need to come clean, and do your best to make the situation as right as possible for your customer.  Good communication and openness will allow you to keep your reputation in nearly all circumstances.  In the end, being honest with your prospects and customers will almost always pay off for both of you.

Following these principles, you should be able to establish good, professional and trusted relationships with most prospects and customers, and, in the end, this should lead to better sales and better associations with those we respect.

If you would be interested in reading more on interacting with customers please click here to read “Why Do Your Customers Buy from Your Company?

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

© Copyright 2013 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

By M. Dana Baldwin, Senior Consultant

Good friends of mine were the fourth and fifth generation of their family in a very successful business.  I interviewed one of the fourth generation some years ago about how they went about doing succession planning for their company.  These are the “rules” that they had literally written out many years ago which governed their approach to the involvement of the next generation in the family business.

1. Any family member who wanted to come into the business had to work for another company for a minimum of five years.
2. If a family member wanted to enter the business, he or she had to make a firm commitment by age 35.  After then, there would be no opening for the individual.
3. Once a family member came into the business, if he or she decided to leave, there would be no return available.  That decision would be final.

One of the most difficult things to do in a closely held family company is to separate the personal lives of the family members from their professional lives.

1. The first principle I strongly recommend is: Keep the two lives separate!
2. Set up objective criteria for any family members who come with the company.
3. Whenever possible, use non-family members to lead, train and criticize the progress of the younger family members.
4. Monitor the progress of younger family members objectively, not being harder nor easier on them than would be appropriate for a non-family member.
5. Pay for the job, not for the family relationship
   1. Establish the career path or paths which are possible for the individual, and set out what is expected for each one.
   2. Knowledge required
   3. Skills required
   4. Experience to be gained
   5. Mentoring – where possible have this done by a non-family member
   6. Performance levels and attitudes expected
   7. Do regular performance reviews
   8. When changes are needed, make them in a professional manner, as would be done for any non-family employee.
   9. Don’t bring them into the “inner circle” until they have earned it.
   10. Don’t include them in any decision making process where the family member’s superior is not involved and responsible.

Effective succession planning is a key part of strategic planning for an organization.  Having a ‘stable’ of qualified, trained, well-educated and experienced people who can step into a higher level job can be a key to long term success as an organization.  It is neither a simple nor quick fix, but one which needs to be well-designed and implemented, with great forethought so that the process accomplishes what its aim: Having the ability to transition from one person to the next in a well-planned, well-executed process which is positive for both the individuals involved as well as for the organization itself.

FINAL THOUGHTS

One of the elements of succession planning is to decide what the key attributes are the successor needs to have for the future.  It is not enough to have the attributes of the current person.  By having a clear strategy you can see what the future leaders of the company will need to be good at and these attributes can be added to the succession plans of various leaders.

The questions to ask yourself are:

Do we have a good strategic plan that we live by?

Is succession planning a part of that plan?

Does succession planning have its own action plans to enable the company to keep the best and brightest and have them ready to step in when needed?

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

© Copyright 2012 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

by M. Dana Baldwin, Senior Consultant

Many companies have a stable, often diversified, list of B2B customers who repeatedly do business with them.  Their strategies are focused on satisfying the needs and preferences of those core companies.  They often take particular care in their strategic planning to be sure they satisfy their repeat customers.  But how deeply do they analyze why their customers actually buy from them.  Is it just the products and services offered?  Is that sufficient to explain why those customers are repeat customers?  Probably not, so let’s analyze the “other” side of the picture.

I would suggest that there is another aspect of the buying decision that some companies don’t directly think about regarding the retention of long-term customers.  That is TRUST. Do these customers trust their supplier enough to want a long-term relationship that benefits both parties?  If so, what are the elements of that trust?

While there can be many sides to this discussion, I would suggest this boils down to three key elements:

3.         Your company is easy to do business with and has a history of offering the products and services that your key customers need on an ongoing basis.  Obvious, of course, but it is a necessary element of the equation.  It is likely that the products and services that you offer today are not exactly the same as those your customer bought in their past.  This implies that you have been ready and willing to change with your customers as they and their markets have changed in the past and must continue to do so in the future.  Sounds simple, but it may not be so easy.

2.         Your company has demonstrated a long-term view of your relationships with core customers.  Winning companies pay attention to these customers whether they are currently buying from them or not.  Ongoing contact and customer service is key to maintaining the relationship your company has established over time.  If you were to neglect constant contact with key people in the customer company, soon your rapport would likely deteriorate and could eventually disappear.  Unless your customer service people are aware of the depth and longevity of the relationship, short-term lack of business could influence them to lower the level of service to that customer.  The result could be a lower level of orders in the future, which could be the beginning of a “death-spiral” of lower service, then lower order levels, lower service levels yet and eventually no orders.  Worst case, yes, but it does highlight the need for proactive interaction with customers to maintain relationships.

l.         As a winning company, make a special effort to engage your customers deeply and personally, whenever possible.  You make a strategic judgment that you not only want to be the supplier of choice but also want to be considered a part of their customers’ resources for the future. Your goal is to be included in the planning of new products or services as the customer plans and develops them.  Your company can be an integral part of your customer’s future, if you have invested in building the rapport, the trust that is a prerequisite for being viewed as a partner.  Why and how does this happen?  It is actually quite simple in concept:

1. You listen much more than you talk.
2. You respond with good ideas, concepts and customer service.
3. You have built trust over the years with your products and services, your customer relationship and your rapport.

With this positive approach, your company can be a valued, trusted supplier with great relationships and a lasting, mutually profitable business.  To read more on customer intimacy click here.

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

© Copyright 2012 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

By M. Dana Baldwin, Senior Consultant

Experts estimate that American industry could improve its bottom line results by about $350 billion per year by getting everyone to truly buy in to the mission and culture of their companies. While the absolute number could be debated, the principle is sound: A great culture leads to increased profitability.

What is the atmosphere in your company?  Is the culture good?  Do your people know what is expected of them and feel that they are supporting and executing the strategies to which your company has committed?

How can you be sure that your people have “bought in” to your vision of the course and direction of your company?  Well, much of that “buy-in” will be a result of the culture within the company and the management style of your executive leadership team.

There are many factors which influence the attitudes of your people.  Leadership style, mentorship, willingness to build the strengths and sense of self-worth of your people are some of the key factors which should be included in your analysis of your situation.

Leadership style: How do you lead your people?  Do you lead by example or directive?  Do you believe in your people or do you not trust them to do their jobs properly?  Do you encourage initiative, or do you prescribe exactly what they must do, without deviation or thought?

What about those managers who insist on a command and control style of management?  Each of them should step back, review their results and the actual atmosphere inside their company to see whether their people are truly “bought-in” to their company, or are simply putting in their time, collecting a paycheck and getting by with the minimum they can in order to be able to keep their heads out of the line of fire?

Mentorship: Do you attempt to help your people develop their talents and knowledge and operate in their “sweet spot”?  Do you try to have a positive influence on your associates?  Do you go the extra step of recognizing the accomplishments of your people, so they will know you see and appreciate their results?

Why is all this important?  With the appropriate leadership style, your company can earn the trust and confidence of your people, which results in higher levels of performance. With an effective mentorship atmosphere, people will likely make a greater effort to contribute to the success of your company.

What kind of atmosphere would you prefer at your company?  One which encourages people to contribute and use their own initiative and ideas, or one in which people are afraid to speak up and unwilling to expend the energy and take the risk to make things happen?

Is this all “fluff”?  Do you really need to concern yourself with making people feel positive about themselves, their bosses, their company and the culture in which they are working?  Will there really be enough positive results to warrant the effort needed to achieve the kind of culture described above?

There are lessons to be learned from the results of those companies which have decided to improve their internal environment and culture.  Look at the many companies in Silicon Valley which have a culture very different than many, more traditional companies.  They have gyms, restaurants, coffee shops, variable hours and a lot of individual autonomy, as well as highly supportive leadership teams.  The resulting atmosphere has led to high profits as well as high morale and “buy-in”.  Is it worth the effort for your company to explore changing if your people are not as involved as you would like?  If you would like help in analyzing and possibly changing your team’s buy-in, please contact me at baldwin@cssp.com.

To learn more about our strategic alignment book please click here.  To learn more about our strategic alignment workshop please click here.

Some additional  articles you may want to consider:

Know Thyself – Culture in Strategic Management

http://www.strategyletter.com/CD1205/featured_article.php

Winning the High Way — Organizational Success by the Golden Rule

http://www.strategyletter.com/CD0304/featured_article.php

A Culture of Discipline — Building Toward Great http://www.cssp.com/CD0207a/SustainingGreatResults/

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

© Copyright 2012 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

by M. Dana Baldwin, Senior Consultant

Are you meeting your customer where your customer is looking?  Customers are changing the way they look for goods and services.  Yes, the traditional way of selling still is important and necessary for most business to business companies, but it is not the only way to interact with your customers in today’s market places.

Think about how you and your family shop today.  People still go to traditional stores to shop and buy.  But many of today’s younger people will go to a store, see something they like, then go on line to see if they can find it at a lower price, either in another store or at an on-line merchant.

Are your customers doing the same thing when they have specific needs for their businesses?  Are they checking your catalogs or talking to your sales people, and then going to the internet to search for lower prices and better features and benefits?

What are you doing to address this problem, assuming, of course that it is a problem for your business?  Maybe the first thing to do is to check to see if this is actually a problem for your business that you don’t know about.  Have your customers started buying less from you recently?  Have you asked them about their sales to see if the difference is in their actual sales volume, or is it because they are buying somewhere else?  If it appears to be that they are buying somewhere else, is it because your product or service features have not kept up with the competition?  Or is it because your prices are too high, or your delivery too long and they have found other sources via the internet or on social media?

What can you do about this?  You need to adapt to today’s realities.  You need to do more research into what is actually happening in your market places.  You need to use social media to determine what your customers are posting, and find out what you can learn from their posts about your products and services, and what others are doing to meet your customers’ needs.

You can’t plan in a vacuum.  Become your own customer to see how you are treated and responded to when you contact your own company.  Call in to see about a part or to get a question asked.  See how you are treated when you become a nuisance.  When you have done this, document what happened and go over it with your key people including all your customer contact people.  Get their input and make whatever changes are necessary to assure a positive experience for your customers.

Have one or two of your (younger) customer contact people start monitoring your customers’ social media posts to see if you can gain insight into what they are doing, and what they are looking for.  Once you have sufficient information on what they are doing, find positive ways to engage them so you can win them back.

Monitor your competitors’ postings as well.  This can be a great source of data on what they are doing, and can give you great insight as to how to compete more effectively with them.  Don’t ignore these problems, or your business could gradually fade away.  Data mining, even in this simple way, is one of the keys to good strategic planning, and it may be the difference between life and death for your company.  In addition to understanding customers’ buying patterns you may want to dig deeper and understand what drives their loyalty – to read more, click on loyalty.

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

© Copyright 2012 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

by M. Dana Baldwin, Senior Consultant

Good strategic planning should lead a company to growth, increasing profitability and growing market share over time.  But what happens when a company refuses or neglects to listen to and understand what is happening in the markets they serve?

There are many instances one may cite about companies that were successful for many years that relatively suddenly ran into serious problems.  IBM was very successful in supplying and maintaining mainframe computers, to the point they ignored for too long the changes in the market place.  Until Lou Gerstner restructured the company, they were declining rapidly in their performance because they didn’t listen to what was really happening in the market place.

Polaroid went through a similar set of problems.  RIM is suffering from not adopting the technologies of Apple. And, most recently, Kodak found itself floundering to the point where it had to file for Chapter 11 Bankruptcy Protection.

Why do great companies like those above fall into such difficult circumstances?  IBM did because it chose to listen primarily to those who had the most to lose if mainframes went away.  Because IBM didn’t look at the big picture, they nearly missed significant trends toward distributed processing.

Kodak is an even more troubling case.  Kodak was a significant leader in the development and implementation of digital cameras, yet they almost blindly hung on to their film manufacturing business to the detriment of the digital camera until the competition outstripped them and they became a lower tier competitor.

When a company, particularly an industry leader like Kodak, weds itself too tightly to its current technology, and ignores industry trends because it has been so successful with its approach for so many years, the rest of the market, which is apparently so open to innovation and developments outside the current technology, can and often will pass the old technology by, leaving constantly diminishing returns and market share for that company.  Unchallenged recipes for success can be the worst enemy of any company’s future.

What should be the lesson learned from the companies’ plights as shown above?

One should analyze how much risk one should take as seen from two different points of view.  First: If the company stays with its current technology, what risks does it run to future sales growth, technological leadership, return on investment, etc.?  Second: If the company invests in new technology, what should it expect in terms of future sales, competitive position, ROI, etc.?  Included in the analysis should be looking at the upside and downside of each alternative and comparing the alternatives to reach the optimal decision.

Will the changes to be made be incremental, or will they become radical in nature and effect?  What amount of risk can the company endure?  What are the risks of staying put versus those of investing in change?  What is the likelihood that the new technology will actually lead to the changes in sales, profitability and return on investment that the company is seeking?  What will be the impact on the market place and how will competitors react?

While the approach above certainly is not complete, using it as a starting point should help your company select an approach which will help maintain your competitive position. Effective strategic planning can help your company select those opportunities which should lead to increased leadership in the market place.  If strategic planning is not helping your company as you want it to, please contact me at: baldwin@cssp.com for planning leadership and guidance. For more information on how to position your company in the face of changing technical trends please read: Xerox Positions Itself to Succeed in the 21st Century: What You Need to Do to Ensure Your Company Does Not Become Obsolete.

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

© Copyright 2012 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

By M. Dana Baldwin,  Senior Consultant

Once you have completed your strategic planning for the upcoming year, how often should you go back and look at it to determine that the plan is still valid; heading you in the right direction and staying on the course you have chosen?

We suggest you revisit your plan and the assumptions you made while developing the strategic plan at least once a quarter, as well as revisiting the entire plan annually.  Why, you ask?  Very simply, your strategic plan is based on your knowledge of your business, your business conditions, or environment, and the assumptions you and your team have made about what will happen in that operating environment.

Look at each of the areas in which you made assumptions.  First, in each of your market segments you made specific assumptions about how attractive each segment would be in the upcoming years.  You made assumptions about any threats, which could make the overall segment shrink. You also made assumptions about the opportunities, which could foster segment growth.  Which of your assumptions is occurring and to what extent?  Is the overall segment growing or shrinking, and is it doing so at about the rate you thought would happen?  While this might be difficult to discern on a quarterly basis, if you are close in your assumptions to the actual rate of growth, then you likely will not need to make any changes to your strategies.  If it varies widely, or the direction of the market is opposite to that which you predicted, then you need to step back and re-analyze the situation and possibly modify your strategies for the planning horizon and/or objectives for this year.

Are there any big impacts which have occurred which could have an impact on your future direction?  For example: an aircraft components manufacturer might have been focusing on the commercial aircraft segments before September 11, 2001 but afterwards they changed their focus to military segments because commercial segments pulled out of their growth cycle.

In addition to changes to market segments quarterly reviews are where you evaluate any new opportunities that have bubbled up since your strategic planning meetings.  For instance, an acquisition has become viable – you evaluate it against the objectives that you have chosen and, if it has higher priority, you add it and take off another, lower priority objective. If it does not have a higher priority, you save it to re-evaluate it in the next strategic planning annual cycle.  During the quarterly reviews, you are reviewing the full strategy plan and this is where the items that were deemed “business as usual” or “normal course of business” are checked to make sure they haven’t fallen off the radar screen and are still progressing.  It is a chance to pull your team together to think strategically and pull back from the day-to-day.

You also made assumptions about what your significant competitors would be doing in each market segment.  How is reality playing out relative to the assumptions you made here?  Again, if your predictions are close, you may not need to change anything, but if they are not, this review is an opportunity to make a mid-course correction.

The team also made an assumption about the future average industry profitability in each market segment.  How is that assumption holding up?  Note that this does not mean your own company’s level of profitability, but the general direction of the industry as a whole in this segment.  Is this segment still an attractive place to be doing business?  Should you emphasize it more, or less, than originally intended in your strategic plan?

Finally, is there something on the horizon which might displace the products or services you are providing in a particular segment?  Are your products like the portable CD players at a time when new products like MP3 players are on the brink of introduction?

One of the outcomes of this monitoring and testing of assumptions could be the realization that you need to develop market information gathering approaches that allow you to better discern what is going on.

Having gone through your assumptions about your market segments, you need to decide what to do and when to do it.  If your assumptions are close to reality, you likely won’t want to change anything significantly.  On the other hand, if your assumptions are at wide variance with reality, you and your team should go back to ground zero and re-analyze every market segment to adjust your predictions to the latest reality.  Where you have made significant changes, you should review your strategic plan for each segment, possibly changing your strategy to reflect the changes that have occurred.  If those changes in strategy will affect your Objectives, and thus your action plans, you should modify each changed Objective and action plan to reflect the latest reality, recasting each to take advantage of your new assumptions.

If you are having difficulty in doing these steps, we can help you.  Please contact me at baldwin@cssp.com for guidance in your quarterly reviews.  For additional information on execution success please read: Everyone Knows Execution is Important – So Why Do We Fail to Execute?

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

© Copyright 2012 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

by M. Dana Baldwin

What does it take to be today’s winning competitor?  The winner must have a competitive advantage—right?  Real winners aren’t satisfied with a competitive advantage that may be just a flash in the pan, they want a sustainable, strategic advantage that will last.  We call a sustainable strategic advantage a strategic competency.  A competency is a combination of skills, processes and knowledge: the skills we possess as a company; the knowledge we possess as a company – the sum of the individual knowledge throughout the company; and the processes we use to take advantage of our skills and knowledge.  It is important to understand that competencies arise from the intellectual attributes of a company, not its physical attributes or locations.

If a competency is to be considered strategic, it must pass three tests.  First test is: Does the competency create significant value for our customers?  Second is: Does the competency truly differentiate us from our competitors?  Third is: Is the competency difficult to copy?  With each of the three tests, we grade the combination of skills, processes and knowledge as meeting a standard which is low, medium or high in its effect.

Does the competency create significant value for our customers?  If the competency does not create value for our customers, why would people or other companies buy what we have to offer?

Does the competency truly differentiate us from our competitors?  If the end result is that we are really differentiated, then customers will buy from us because we bring something very special to the market place, putting us ahead of our competitors because of the perceived value of our strategic competency.

Is the competency easily duplicated?  If it is, then the difficulty to copy will be low, and the test will not be met to the degree needed to define the competency as being strategic.  It is highly likely that, given sufficient time and both human and monetary capital, any strategic competency may be duplicated.

What burden, then, does this impose on the company that has attained a sustainable competitive advantage, a strategic competency?  As compared with physical assets, which over time deteriorate with usage, the more a strategic competency is used, the better it becomes.  It is somewhat like a golf swing.  If an ordinary golfer plays once or twice a week, he or she will likely play to a particular level, plus or minus a few strokes.  That level will depend on the physical attributes of the player, but probably won’t improve or degrade much as long as the player continues to play about the same amount of golf.

PGA players, on the other hand, practice hundreds of shots a day, when not actually playing in a tournament.  They have taken their game to a higher level of competency through practice and repetition, honing their skills to the highest possible level.  It is through the practice, repetition and constant honing of their play, that they have the skills, knowledge and processes to play at levels we ordinary players can only dream about.

Now, because there are a large number of players who, as professionals, have attained the high level of skill necessary to compete, this particular example would fail the third test of being difficult to copy for the most part. The main point here is that one must be objective in analyzing whether a particular combination of skills, processes and knowledge actually meets the extremely high standards of becoming a true sustainable competitive advantage.  If your company has such a strategic competency, you should have a real advantage in the market place, as long as you continually hone the skills, processes and knowledge which make up that competency.

If you are interested in learning more about strategic competencies please contact me at: baldwin@cssp.com

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

© Copyright 2012 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.