Category Archives: Strategic Planning

Managing amidst the uncertainty…

What an interesting week! Twitter falling apart, tech companies laying off, inflation stabilizing but high, stock market going up, mid-term elections going calmly – so much happening. Add to that the continuing Russian defeats, meeting of global leaders over climate change and Xi and Biden about to meet in Indonesia, Hard to know the best way of managing amidst the uncertainty. >

Revenue is for vanity, profit is for sanity…..

Vistage Speaker Doug Butdorf from Boost Profits grabbed my groups’ total attention when he said “revenue is for vanity,  profit is for sanity”. Then, he gave us strategy, and execution to be more profitable. Wow! How about this: do you have regularly scheduled meetings to discuss pricing? 2 hands went up. Do you have regular sales meetings? All hands went up. Regular operations meetings? All hands went up.

Let’s get serious here. Sales are starting to slow down for many producers especially for B2C products. (Business to consumer). We aren’t buying to decorate the home we are stuck in – we are going out to dinner or traveling. This may be your last opportunity to raise prices in this business cycle. Should you wait?

As tedious or difficult as it may seem if you have to do this manually, you should segment your customers. First sort could be gross margin versus volume. If you color code by sales person you might find that the low volume, low margin customers might all belong to one sales person.

 

And, what do you do with those low volume low margin customers? RAISE THEIR PRICES. They will either become profitable customers or fire themselves. Either way you win!!!

And, btw, are your sales people rewarded for increasing gross margin or are their commissions tied only to revenue? There is an old saying “you get what you measure.” It is important to align your incentives around your mission, values and goals. You may need to reassess your incentives as part of your quarterly pricing meetings.

When inflation was running along below 2% for more than a decade, many of us got lazy in our thinking about price. None of our competitors were raising theirs. That time is long gone.

This week get going. Review your pricing and make some profit decisions. You’ve got all the tools you need.

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Image courtesy of Doug Butdorf, Boost Profits, Inc.

 

 

The advantage of a vista

Hiking in the Sierra is one of the best places I know to get the advantage of a vista. From Monterey Vista trail you can see all the way up the middle fork of the San Joaquin River to the Pass that goes to Yosemite. >

Most/least likely

Whatever scenario you predicted was most likely or at least probable 6 months ago is probably not worth the paper it was written on. But then again, who uses paper these days?

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Strategy x scheduling

Sunday night you sit down and plan your whole week. You put the big rocks in first – the most important but not urgent long term thinking time. Maybe, you schedule 2  2-hour blocks on Tuesday and Thursday at your best thinking times for that long range project you never seem to get to. Then Monday starts off with client issues and you don’t get one thing done you had scheduled for Monday. >

Lost strategic focus?

I’m hearing from CEO’s and I’m hearing from senior leaders that one minute you are looking at 3 year plans and the next minute you are all hunting for a missing product in the supply chain. Or, you just finally hired an important new team player and a long time team member gives notice. It is like paddling too much on one side of the canoe and then furiously trying to get straight by paddling hard on the other side. It feels like we all have lost strategic focus. Tell me again, where are you trying to go? >

Role changes

Your company grew 30% so far this year. Yahoo! Guess what? This may cause role changes for you. Are you good with that? >

unintended benefits of PPP money

Has anyone studied the actual uses of the Payroll Protection Plan (PPP) loans/forgiveness?

Because the pandemic totally devastated approximately 20% of the economy in sectors like travel, events, hotels and dining, it is hard to imagine how these industries have survived, or how the PPP money could have helped them for long. If they are still surviving, they are maybe 1/3 the size they had been before the pandemic. For them it has been tragic. Hopefully, they will come back as the economy reopens. >

Proceed as if….

This week’s events reinforce the pandemic’s severe impact on our country. If there ever was an illusion that this would go away by itself, or that testing without a distancing protocol and masks would be enough, that has been blown away by the super spreader event in the White House Rose Garden. We must proceed as if…… >

Think Systems

How often do you sigh when you contemplate a “kludgy” system that takes way too long to complete in your organization?

Maybe it is billing a client, or accounting for scrap or completing then documenting a performance review. You don’t even want to start because it takes way too long to complete. Think systems. How can this system be improved or eliminated?

There is no time like the “Pandemic Present” to address those annoying and inefficient processes that you said you would fix one day.

Can’t think of any? Ask your team “What are the top 3 things that if we fixed them, would make your life and the life of the team happier and more efficient?” Pick a super scribe, or start voice recording on your phone cause the suggestions are likely to come in fast and furious.

Put the ideas in 3 columns:

1. easy or cheap to fix,

2 complicated/costly but really beneficial, and

3 everything else.

Put column 3 on the back burner but don’t throw it away.

Assign column 1 out to project champions. Give them a budget and a due date.

Column 2 is where you need to focus. Have your group vote on their top 3 picks. Vistage speaker Bob Roitblat recommends ratings the ideas in 3 areas: strategic value, customer value and business value. Once you add up the scores, you may find that you pick a different project than you would have predicted because it scores in all 3 areas. Be realistic about how many you can do at once, but begin one right away. If it works, the team will get excited about tackling another one.

When we finally come out of this pandemic and its economic fallout, we don’t want to have regrets that we didn’t clear out the kludgy systems, when we had the time to do it. A year from now you will be grateful – if not sooner.

 

Photo of a street in Hanoi, Vietnam, by Paul Dye.