My cup is overflowing. Yesterday and today, in the coaches sessions at the Fortune Growth Conference, I’ve been fire hosed with new information and insights on business growth and all related topic. I’ll be putting my findings down in this blog for the next few days. Follow me.
Probably my biggest insight from today is this: Strategic Planning is a an inaccurate term. Not accurate at all, which is why many people do it so poorly. It’s Strategic Thinking and then Execution Planning. First get your people to together and determine what needs to be done to get you where you want to go and why(Strategy). Then decide how you are going to get there(Execution).
- The Four Questions of the Gazelles Model, if translated into this type of wording goes like this: People Resourcing, Strategic Thinking, Execution Planning, and Cash Modeling.
- And the Model is more Circular than we think. For Example: If you are having difficulty determining your strategy you probably don’t have the right people so you have to work on people. If you have the wrong people it’s probably because you can’t afford them due to cash flow. If you cash flow is poor you probably are not executing well enough to deliver cash. If you are having difficulty executing you probably don’t have your strategy articulated well enough.
- So identify your difficulty and go one step back in the model and start working on that long term while you work on the difficulty short term. For example. Having trouble determining your strategy, your people might not be experienced enough to figure out, so get some outside trained brains to help with this.
- Finally. This really emphasizes pages 114-116 of Good the Great, the most important pages written in the last 20 years. “The Council.” The “Council” should be meeting regularly to discuss this cycle very regularly. Dust of the copy of Good To Great and reread these pages. The “Council” drives everything.
My next big insight is this. 1 + 1 + 1 = 19. We reviewed a real case study of a company that if 1% improvements were made to Revenue, Cost of Goods, and Expenses the corresponding increase in Net Profit would be 19%.
- This was an introduction to Managing Margins. Margins are the most overlooked Metric.
- Margins are the leading indicator of company health and growth
- You can’t manage lots of external factors, but you can manage the internal factors that make up margins.
- Three basic strategies to do this. Transparency–get rid of all blending of margins. Break margins by product line. This turns accounting into a profit center. Pricing sensitivity–price each line of business separately. Get pricing compliance from the sales people. Expense Management–spend $1000 needlessly and carelessly you are throwing the money away and it takes $10,000 of revenue to replace the net margin.
- Attack this with a vengeance.
- I’m going to get a piece of wire from Brubaker to demonstrate this in the next huddle.
Third, to have a healthy community you have to have conflict. If you don’t have conflict you have a “pseudo community” You have to work through a “Chaos Period” to build trust to be able to get to a Real Community where healthy conflict exists.
Learned great stuff from the Objective Management Group (OMG) people about their sales performance assessments and training tools. These have demonstrable ROI. Very sophisticated. Will help maximize performance of your sales team and sales processes.
Tomorrow’s (or today’s lineup depending on when you read this) Lineup:
- David Sokol–CEO of NetJets, He is Warren Buffet’s Mr. Fixit
- Chip Heath–Author of Made to Stick, and Switch
- Verne Harnish–Author of Mastering the Rockefeller Habits speaking on the Seven Strata of Strategy
- Liz Wiseman–Author of Multipliers
- Mo Fathelbab–Author of Forum: the Secret Advantage of Successful Leaders on Enhancing Executive Team Communications
That’s it for now.