Stay in front of your business 'if you don't your competitors will!
Which existing customer is your business about to lose? What potential customers will go to your competitors instead of you? What new threat will assault your business next week, next month or next quarter? When opportunity knocks is your business ready? Is your organization as fast and competitive as it can be?
There is an old joke about a bear that goes something like this... Two guys are out in the woods hiking when all of a sudden a huge, black bear starts chasing them. Both hikers end up in a tree, but the bear begins to climb the tree after them. The first guy gets his sneakers out of his knapsack and starts putting them on. The second guy says, "What are you doing? The first guy says, "I figure when the bear gets too close, we'll have to jump down and make a run for it." The second guy says, "Are you crazy? You can't outrun a bear..." The first guy says, "I don't have to outrun the bear. I only have to outrun you...
Outrunning your competition, while providing unparalleled customer service is getting tougher and tougher. Daily, senior executives face an unrelenting assault on their business strategy driven by globalization, faster absorption of newer technology, shorter product life cycles and the constantly evolving marketing wild card 'the ubiquitous World-Wide-Web!
If quality was the mantra of the 80's and ‘re-engineering' the business term for the 90's, then velocity is key for the 21st century!
Over the years, Global Marketing gained an astute appreciation for the ways and means of developing and running a successful business in the industrial automation industry. After much thought and lots of trial and error, we have learned various ‘truths' and complied them into 10 business axioms.
While there is no magic wand or silver bullet to guarantee success in any business, these 10 axioms will help you traverse the uncertain and ever-changing market. They will help you develop a business strategy and execute tactics that obtains sustainable growth and above average return to your stakeholders.
We begin with Global Marketing business axiom # 1:
Stay in front of your business 'if you don't your competitors will!
This may seem obvious, but all too often Global Marketing is called in to help a client after they are in serious trouble. Many times we find that senior executives wait until growth subsides, profit margins erode and competitive pressures force steep discounting as the de facto business strategy. This condition didn't occur overnight, it happens over time.
How do you tell someone who is complacent, that they are complacent? This is not meant to be double-speak, but to convey a powerful point in a pithy manner. No one plans to be complacent in business, it happens slowly over time and one day the company faces severe cut-backs and the CEO and management team struggle to find a way forward before bankruptcy becomes the only answer.
The sad truth is that this scenario could easily be averted.
Running a business has similar challenges as flying an airplane. Once you define where you wish to go, you fly there. As you fly, adjustments must be made. Changes in the weather and head or tail winds effect your speed and direction. Indicators (or measurements) help guide your progress and inform you if you are on track to make your destination as well as determine if you will meet your budgeted time frame. Therefore, meaningful measurements become a key aspect in achieving your travel goals. This is similar in reaching business objectives.
Most companies measure business operations. From Marketing and Manufacturing to Sales and R&D, each has its own key indicators to report the health of that part of the organization. When combined, these measurements help the CEO decide if the company is moving in line with the stated business strategy. These measurements vary depending on the type of company and whether the business is private or public. However, Global Marketing contends that many of these indicators are outdated and not real-time enough. Today's fiercely competitive and fast-paced market demands that CEO's and senior executive stay in front of their business. Understanding what your business is doing at any point in time is crucial to respond to opportunities as well as deal with deadly threats.
The monthly profit and loss statement is typically the most anticipated and looked after report. The P&L statement is important, but recognize it is a lagging indicator. It is telling you the results of decisions made long ago. As are many of the other measurements senior management receives. If your firm is dealing with lagging indicators as the primary tool for shaping the business strategy, your customers will suffer and your competitors will love you. The 21st century business environment demands that companies forge new measurements, measurements that ‘lead' the business decision making process. These leading indicators, coupled with a support system that makes them visible in a timely (real-time if the firm can afford the computing power) manner is essential.
Meaningful measurements allow a company to stay ahead of their competitors and better serve their customers. Global Marketing believes that "leading indicators" are most important. Depending on the product and service, these leading indicators can track and trend a variety of worthwhile information. A few examples may include:
how many new customers are captured on a daily, weekly or monthly basis 'is your business expanding?
how much new literature is requested 'gauge current level of interest in your product or service
how many new leads are generated 'is your marketing message effective & reaching the right audience?
how many ‘lost-customers' your business incurs over a given period of time 'early signs of business decay
how often do you lose to your competitor 'tracks factual data on how your business strategy is working
quoting activity 'quoting volume and close rates predict future business levels
time-to-market issues 'timely new product introduction is a competitive advantage and re enforces brand image
Each enterprise should have its own set of measurements. Although lagging indicators verify past decisions, leading indicators allow you to stay ahead of your business, benefit your customer and beguile your competitors. Your stakeholders will be pleased too!
About the Author
Frank Williams is a marketer. With many post graduate courses in management, leadership, marketing and technology to his credit, Williams is a widely respected speaker, author and technologist. He has significant knowledge in marketing strategies and is the founder and CEO of Global Marketing, Inc. 'a leader in business, marketing and sales consulting
Other valuable articles can be found at: http://members.cox.net/glmarketing/glmarketing/index.htm