Tag: growth

Learn to Win by Racing

RobertDirtBikeRace1

The Grand Canyon looks very different in person than it does on a map. Like the Grand

Canyon, there are some things that just have to be experienced firsthand vs reading a report or a survey to really accelerate learning. This year I started riding dirt bikes, and with my pro mountain biking background, I got hooked instantly. As soon as I found my ‘flow’ on the trails I wanted to start racing. But unlike mountain bike racing, there are many questions and much more complexity in the type of dirt bike racing that I wanted to do in the GNCC (Grand National Cross Country), Enduro, and Hare Scramble categories. These are 1.5 to 3 hour races in the woods. Not a big deal right? But how do you prepare for a race when you can’t pre-ride the course to really know what to expect in a very dangerous sport? Rather than train for months, I did the unthinkable and entered my first race last week after only having about 15 hours of ride time under my belt. Long story short, it was a great decision and a HUGE confidence booster.

I set some rules for myself before starting:

  1. Don’t get in over my head during the ride and sustain an injury
  2. Have fun
  3. Finish
  4. Get faster each lap (negative splits)
  5. Focus on form, not on speed
  6. It’s okay if the outcome of my first race is deciding that I don’t like dirt bike racing

In your business, what are some of the growth strategies that you are considering?

  • How can you accelerate learning to vet or test ideas?
  • What boundaries or rules can you artificially create for safety?
  • What planning cadence do you have in place for real time feedback?
  • What would a ‘win’ look like?

Back to the racing – I placed 5th, had negative splits, and my last lap time put me in the top three in my category. Nice! But what I learned was that my weak point was descending down steep hills and shifting gears while standing up. There is no way I could have predicted this as my top two things to focus on during my training rides. Looking at the topography map and the race start, I thought hill climbing was the focus. I had to experience the race firsthand in order to improve in the next one. The overall outcome was Read more

Growth-Related Chaos? Take A Step Back

chaos-485493_1280-geralt-960x720Rapid growth is exciting … and chaotic. When your growth strategies start paying off, the processes that worked well when you were smaller can break down as you add clients, revenue and employees to your business. As you get more decision makers, with differing opinions on how to do things, your processes can become so cumbersome that they threaten to slow your business and increase your risk.

This was the situation faced by one of our clients, a global pharmaceutical services company that saw an enviable 880% organic growth rate over the last four years. Its employee headcount and active customer list were growing beyond capacity, and they had a serious case of growing pains. They knew their processes weren’t working anymore, and they asked us to help them retool to both absorb growth and continue doing what produced their steep growth in the first place.

Take a Step Back

Anytime you’re looking for new, better ways of doing things, you must first define how you’re currently operating to figure out what’s really causing your problems. This process of defining your core processes – a group of related activities that transform various inputs into an output that adds value to the customer – is the best way to ensure that the solution you adopt is a Breakaway Move that supports your overall strategy.

To get there, step back and 1) look at processes to see how things are currently done; 2) determine if new systems would improve efficiency; and 3) challenge your processes and see where there might be opportunities to make them leaner.

Here’s what that looked like with the pharmaceutical services company we’re working with.

First, we had to get clear direction on what problems needed to be solved. We had to get the team laser-focused on the outcome and make sure we didn’t try to “boil the ocean”– to try to do more than was realistic or necessary.

Next, we defined the cost of poor quality – the things that could be negatively impacted by not making changes (for example, customer satisfaction, employee effectiveness, compliance).

Then we recorded all of the existing processes. When we began, the team thought they had 10 processes, but once we really dug in and challenged the team and each process, we found there were over 20 different processes in place, with multiple touch points and people involved. We got there by breaking each process down by the following components:

  • Define the process: What 1-2 sentences does the process owner use to describe it?
  • Inputs to the process: What steps, actions, templates or tools are needed for the process to start?
  • Process steps: What is the activity and/or transformation that takes place?
  • Outputs: What is the result of the activity and/or transformation taking place?
  • Controls: What manual or system controls are in place? What’s on your wish list for the future?
  • Risks: What risks are in the existing process?
  • Regulatory requirements: Are there any U.S./international regulatory or compliance requirements that must be considered?

Finally, we took the team through a “wish list” exercise to capture all areas of potential opportunity the client didn’t have capability for, but hoped to see after they made changes.

Potential solutions were weighed against a cost-benefit analysis to ensure that what they chose to adopt (and their priorities for adoption) would provide the biggest payoff in terms of alleviating problems and making processes better, faster and cheaper.

When your processes are causing a lot of business pain, it may seem like a lot of time and trouble to take a step back to define your core processes, but it’s the most effective way to implement processes that are more than a Band-Aid, but fix your problems for the long run.

Image: Geralt / Pixabay

FUEL UP Your Growth Engine

General Electric’s GE90 class jet engine is powerful enough to power a Boeing 777 airplane in flight for over 5 hours … on just ONE engine. GE is relentless in its engineering efforts to continuously create more powerful, safe, fuel efficient and light engines. But as powerful as this engine is, it cannot produce any thrust without fuel. It won’t even start.

Every company has a growth engine. But, in reality, leaders rarely take the time to inspect and tune it up for maximum efficiency. In a business, fuel is CASH. And the number one way to increase cash is to increase PROFIT.

There are 7 Levers that influence your Profit and Cash Flow, the fuel required to rev up your growth engine to maximum thrust.

Lever #1 – PriceGE-90_Engine,_Unknown_JP337557

Lever #2 – Volume

Lever #3 – Cost of goods sold (COGS) and direct costs

Lever #4 – Operating expenses

Lever #5 – Accounts receivable

Lever #6 – Inventory or work in progress

Lever #7 – Accounts payable

It’s easier than you think to take actions on these levers and increase your Profit and Cash Flow. The Power of One is a concept that shows how doing something to move those levers either 1% (on levers 1-4) or 1 day (on levers 5-7) in a few critical areas can lead to a significant increase in Profit.

Move The Levers

The Power of One One-Page Tool allows you to calculate the effect on your profit if you can move those levers either 1% or 1 day.

Lever #1 – Price: What’s the value of increasing prices by just 1%?

Lever #2 – Volume: What’s the value of selling just 1% more units at the same price?

Lever #3 – COGS: What’s the value of decreasing raw material and direct labor costs by just 1%?

Lever #4 – Operations: What’s the value of reducing overhead by just 1%?

Lever #5 – Accounts receivable: What’s the value of collecting from debtors just 1 day sooner?

Lever #6 – Inventory: What’s the value of keeping 1 day’s less stock/inventory on hand?

Lever #7 – Accounts payable: What’s the value of paying creditors 1 day slower?

I know what you are thinking. You already know all of this!

But the reality is, most companies don’t take the time to actually measure the impact these small changes can make. You can easily add 3% to your bottom line just by tuning your engine, making small and painless adjustments.

Put the Power of One into action with a simple spreadsheet that you and your team can use to measure the impact of the changes in each Lever. Assign a person to each lever, and create SMART goals and action plans to generate more profit to FUEL UP Your Growth Engine!

(Image: Dale Coleman / Wikimedia Commons)

Living Legacy

People often joke that the best moments of boat ownership are the day they bought the boat and the day they sold it.finger-567279_1280

There are similar punctuation marks in our lives—the day we’re born and the day we pass away. As busy executives, if we’re not careful, our personal lives can end up as neglected as those vessels, forever docked in the harbor (or parked in storage!).

I’m a big believer in building a living legacy. Your life will be more meaningful if you treat every day as if it was your last and, instead of rushing from one obligation to another, you proactively establish personal priorities and align them with your professional goals.

As readers of this column know, there are four decisions you must make to build a thriving company: People, Strategy, Execution and Cash. In your personal life, there are parallel areas: Relationships, Achievements, Rituals and Wealth. Commit to writing your goals in these four areas, just as you weave the Four Decisions into your business plan. To guide you in creating a personal one-page plan, here’s a link to a “ME: Living Legacy” tool.


Relationships

At the end of the day, what matters most in life are relationships. The first step in using the Living Legacy tool is to list the key people in your life on whom you want to have a lasting impact.

In business, you have a tremendous opportunity to influence your employees or customers. In your personal life, the important people in your life will likely include your family, your friends, and those in the various communities to which you belong. Limit the list to 25 people, so you don’t get overwhelmed.

At the same time, there may be some people in your life who are destructive and/or distract you from your higher goals. There’s a space on the form where you can note relationships you want to end. Doing so is important, so you can free time for the people who matter most to you.


Achievements

Many CEOs find that even when they reach critical milestones for growing their company, they feel they haven’t made a real difference in the world. The achievements section of the Living Legacy tool can pave the way to a more meaningful life. Think about the major ways you’d like to make an impact through your work beyond reaching monetary goals—perhaps by mentoring others or setting up a nonprofit organization or pro bono initiative—and set objectives in these key areas.

In your personal life, you’ll want to think about how you can make a real difference to the key people in your life. For instance, you might aim to have a happy marriage, instead of just staying married, as many people do. Signing on to facilitate the 5-year strategic plan for our children’s school was something I enjoyed prioritizing this past six months.


Rituals

Establishing regular routines in your life will help you achieve your larger goals. Examples of rituals might include a weekly date night with your spouse and booking some “alone” time with each child once a week. For distant family members, you might build a regular routine, like taking a vacation together every two years.

You might also want to establish rituals with people whose presence in your life supports your bigger goals. Meeting regularly with a workout buddy, for instance, can help you maintain good health—something that’s important to achieving any goals you set.

Like destructive relationships, there might be some bad habits or behaviors you wish to stop – list those as well.


Wealth

Rather than financial wealth being an end in itself, see it as a resource for supporting the rest of your personal plan. Set goals for the amount of money you want to donate to causes that matter to you. Decide what you need to set aside to support activities with your family and friends, investing in experiences that create lasting memories. In the cash section of the Living Legacy document, you’ll want to make note of any financial goals you must meet to fuel your living legacy. And when you let money flow through you to help those around you, it seems to appear more effortlessly.

It’s not easy to do this type of planning, but just getting yourself to think about what matters most is 90% of the battle. You want to make sure that what you leave in the wake of your life as you sail along is a legacy worth living.