So you want to be an entrepreneur? You sure? I am just finishing an eBook that will be titled; 50 “UGLY TRUTHS” about owning your own business …and 5 reasons to do it anyway. I have served entrepreneurs in a variety of industries for 25 years. Some of my clients today are people passionately setting out to launch their new service or product. Some have owned their business for years and want to take it to the next level in revenues and profit.
One of the roles I must play to truly serve my clients is that of a “Heretic”. I often listen to business leaders discuss how what distinguishes them, their team, their product or service in their marketplace. They confidently state ; product quality, our service, and my favorite of all…our relationships is our competitive advantage… Bla…Bla…Bla. That is when I need to explain that in today’s competitive global economy, quality, customer service and relationships are not differentiators. Very quickly some leaders become defensive and start discussing how “I don’t understand their industry…” and they often start sharing how “their competitors suck”. Again, you may have weak competitors, but the fact that you may or may not be better than competitors that suck is not a way to differentiate yourself or create a sustainable competitive advantage…(sorry)
The Bible is provides us some very clear advice in this area…” “Why do you look at the speck of sawdust in your brother’s eye and pay no attention to the plank in your own eye? ( Matt. 7:3) and this advice rings true as leaders must look within their own organizations and establish their internal truths.
Having a core competency in; service, quality, or market relationships is not enough anymore.
Your team must have something that differentiates you in your market as Jack Trout explains in his popular book: Differentiate or Die. The authors of the best selling book: Tuned In, refer to this as your “distinctive competence.” The difference between a core competence and a distinctive competence is the latter differentiates you in your market.
You must gain a clear understanding of your distinctive competence in your strategic planning.
Assuming you established Market Truth as I discussed in my previous post, the next truth you must clearly understand is your internal truth(s). To help my clients establish their internal truths I like to ask a number of questions;
- What do your customer’s say your team does better than your competitors?
- What are the strengths and capabilities of your team leaders?
- What is your team’s track record in terms of market growth over the past five years?
- How many new products have you launched in the last three years?
- Did those new products meet or exceed your launch objectives and ROI targets? Why or Why not?
- Has your team introduced existing product(s) into new markets in the past two years? Did you meet or exceed your sales goals?
- What is your current unused capacity that does not require additional investment?
- What is your team’s ability to raise funds to support growth?
- Do you have the access to funds to support your growth?
- When was the last time you or one of your team’s leaders spent time in the market?
For example, I was asking these questions with one of my new clients in the past and their senior team all said the same thing but in different ways; “ we are not good at new…” What was interesting however was that at the recent off site strategic planning meeting it was decided that they would leverage new products to hit next year’s sales objectives. When I interviewed some of their key accounts they too confirmed this teams poor track history in launching new products. One clients said “ they are a great vendor, but they launch new products before they are ready, so we plan to wait six to eight months after their next launch to insure the product has all the bugs worked out before we buy…” Ouch!( their sales plan was not in alignment with clients waiting six months to buy) Again , what was disturbing was the mid level managers and their key accounts all knew a truth that the only people who failed to see were their senior management team. Sometimes senior leaders see issues and put band aides on them hoping they will heal on their own.
As you plan for a profitable future year … Rip Off the Band Aide(s) and Position Your Business For Growth in 2010.
Another new client wanted “more sales” . However, when we reviewed their internal truths the reality was they were currently at 90% of their production capacity and could not service new business. Had we launched a plan to gain new customers we would have frustrated those new clients as well as existing customers ( and their employees) as their service levels would have suffered. As we peeled this onion further we found a large percentage of their current orders were not profitable. So what the owner saw as a need “more sales” was actually a problem with a sales compensation model not in alignment with overall sales profitability.
You must establish internal truths, distinctive competencies, and identify your weaknesses when building your strategic plan. What we are discussing is about
leveraging what you have. I am not saying as leaders you are not to improve weaknesses and bridge gaps . However what I am saying is you must authentically and openly humble yourself and your team to your internal realities.
Understanding your team’s strengths, as well as weaknesses and limitations insures the strategic plan you write for 2010 growth objectives is obtainable.
Market leading organizations clearly understand market and internal truths.
Market losing organizations can be identified by strategic plans not in alignment with their market or internal capabilities.
What kind of organization do you work for?
Does your 2010 strategic plan rely on effectively launching new products? (even though the last launch was supposed to sell 2,000 and only sold 2?)
Does your senior leadership team have the horsepower to take your business into a market leadership position?
Are you relying on those that got you’re here to get you there in the future? How’s that working for you?
Does your 2010 strategic plan count on you leveraging a capability your team does not have?
Have you reviewed the “why’s” your team failed to meet some of their objectives in 2009? Have you corrected what you found?
If you failed to achieve some of your 2009 strategic plan targets was it a “strategy” or “execution” problem? …you sure?
Market leaders understand the importance of identifying internal truths when strategic planning.
Market leaders understand the power of leverage. They leverage their distinctive competencies that solve market problems.