Technological change has prompted the quick erosion of some companies and the overnight success of others. Whether a new technology becomes an asset or a liability is not necessarily embedded within the technology itself, nor what many technology consultants term the implementation process. The difference is more complex, involving the human desire to learn and interact with the new medium.

In any system of human interaction, the “why” question needs to be addressed first—why should we use this, what will it do for us, how can it improve our current processes. Therefore, an effective way to introduce new technology to your company is to begin with the dynamic human systems thinking before advancing to the static computer systems implementation

Unfortunately many technology system consultants implement under the assumption that the receivers of the technology possess the same level of fascination and desire as the creators of the technology. This results in the new technology being transposed upon an old methodology, which produces partial usage at best. At worse the new technology reduces business efficiency and becomes a hindrance. Management can overcome this by including the users of the new technology is the meetings that answer the above questions. And by doing so management can gain valuable insight into how the technology will be embraced and the type of problems that may evolve during the implementation process.

Small companies are often better at implementation, as it is common to have all employees involved in company-wide decisions. Contrarily, in large corporations upper management may decide upon the new technology and then use a top-down strategy for implementation. The worse situations I have experienced have involved large corporations, sales departments and the implementation of a new CRM process. The new technology did not align with the salespersons existing behaviors, such as filling out forms or accessing client information from their desktop when an internet connection was not available.

The opportunities technology brings are evident by the fact that those that embrace its capabilities can quickly gain a competitive advantage. However, if you view the other side of the equation, the threats are significant for those who do not consider the human side and therefore do not  properly leverage its use.

        

This email is in regards to any postings on LW and Associates Blog on August 3, 2010

It appears that last night someone has used my blog for spamming purposes. It is sad that spammers exist, as it robs from those who are trying to do good in the world by sharing information with others. However, I realize it is just part of the world we live in.

I hold the highest regard for my blog participants and do not take their security lightly. For this reason I have responded with an increased security measure that requires typing in characters before a post can be entered. The posting will be closely monitored by the anti-spam authorities. It is in the governments interest to reduce spam as it cost the economy millions of dollars, of which we all have a vested interest in.

If you posted last night, unfortunately for security reasons I had to delete your postings. Please feel free to follow the security steps and continue to post on the site.Your feedback is important and I cherish your comments.

To legitimate business success,

        

Asking business advice—it really matters who we ask what.

When we seek advice from peers or colleagues we are usually cognizant of the person’s expertise and ability to advise on the subject matter. For example, we know not to ask the newly divorced friend about the wonderful aspects of marriage, the financially independent person about the best place to purchase inexpensive items or the childless person about dealing with disciplinary problems. However, when small company owners seek business advice, I often see them forget this fundamental concept. When we search for business advice, we want to make sure the person has the experiences and insight into our particular situation. A “one size fits all” strategy does not apply to business problems.

Given the current economic conditions, there is an increased tendency to frantically search for advice. Frustrated and scared business owners, turn to friends, family and colleagues to whom they feel close and connected with, independent of that person’s business acumen. As a result, they make decisions based upon well-intended but often misdirected advice.
I am not suggesting that we only seek advice from those with direct application to our situation. To the contrary, we should seek the opinion from a variety of sources thereby gaining a well-rounded view. What I am suggesting is that we consider what questions we ask of whom.

As nervous business owners seek more advice during these troubled times, applying the right advice to the right situation can make or break the company. Be sure to consider the source and strive to align the appropriate question with the advisors background, experience and expertise.

        

There appears to be subtle signs of economic recovery. Local conversations with business owners, bankers and business consultants seem to be more upbeat and I have seen new opportunity in select industries begin to emerge. Although the National Bureau of Economic Research NBER has not officially announced the end of the recession, they also have acknowledged positive signs of recovery.

When opportunity finally starts knocking again, companies will need to increase manpower and finance inventory build-ups. With that said, many companies have been depleted by the recession, especially in the areas of human and financial capital. They lack the funding for upfront cost such as additional man hours and vendor deposits.
Historically the solution to this problem was to use trade financing (receive deposits from customers upfront and buy on credit to vendors) thereby having the cash arbitrage to run operations. Today this strategy is not as readily available, as cash strapped customers are not as willing to pay deposits and vendors are asking for partial payments upfront. In response, companies have to become creative.

With unemployment benefits running out many displaced workers are in dire need of extra cash. Companies that take advantage of this vast labor pool can gain access to a flexible and less expense workforce. If companies have remained in good standing with vendors they often can negotiate terms, proposing a delayed payment based on the timing of receipts from project proceeds.

In many ways it is the best time to begin a small company. A new company without debt can be more competitive in price. There is a large labor pool of contract workers available to supplement existing staff. Serious business discussions can be done at Starbucks-so who needs that expensive overhead.The New Economy is going to change the way we work with employers, suppliers and manage new business opportunities.

        

This week I attended the 2010 Mid-Year Economic Forecast presented by the Mihaylo College of Business and Economics in California. The talk outside the conference was restrained optimism; a “maybe not bad as before” attitude. Here are some of the highlights from the presentation.

Unemployment remains uncomfortable high. More concerning, 40% of the people who lost their jobs have been unemployed for 6 months or longer. The economist stated that the recession is over, but growth will be slow and it will take many years before the economy can absorb those lost jobs.

Continuing to weigh down the economy is housing with high mortgage delinquency rates, banking with 40% of the bad debt yet to be realized on the balance sheet, the labor market as mention above and thereby a lack of consumer spending.
On a positive note, supporting the economy is an increase in exports and the fact that inventories are at an all time low, suggesting companies will need to begin producing. Aggressive monetary and fiscal policy continues to support growth but the big question is how long this can continue before inflation worries come into play.

To bring the economy back into balance credit must be allocated more conservatively. Consumption as a percentage of GDP is 70%. As credit continues to tighten, consumers will be forced to change their spending habits. In the New Economy consumers will be more likely to save and purchases will rely more on cash or debit cards.

An interesting trend is the changing structure of the labor force. Currently the average work week approximately 34 hours, therefore companies have room to increase hours rather than hire additional personnel. When in need of additional staff, and fearful of committing to new hiring, companies are moving towards contract labor rather than employment. This trend is expected to increase, whereby workers will be selling their services to several companies rather than becoming an employee at one.

I personally left feeling hopeful. I acknowledge that we are never going back to the good old ways of yesterday but then again, I have long held the question of whether they were really that good anyway.

I am fascinated by the concept of the “New Labor Force” and strongly believe it will bring new opportunities for both employees and companies by providing a labor/job/time flexibility that can benefit both.

        

After two decades of consulting, I can identify common problems found in most companies. As expected, procedural inefficiencies, lack of internal quality or financial control and a host of others that most would suspect. However, one theme in particular I find fascinating. It has a profound negative effect and is rarely discussed—the strong desire to avoid conflict, sometimes at all cost.

The other day I had a discussion with a young business owner who was considering increasing inventory beyond financial wisdom just to avoid a discussion with the workers regarding a lack of quality. Last week I met with a client’s employee to discuss performance issues. It quickly became evident that the lack of honest communication regarding expectations was the crux of the problem. I have seem companies accept inferior efforts by vendors rather than confronting them and salespeople quickly lowering their price before even attempting to explain the value-add gained by the cost.

More often than not, it is within the small companies that these behaviors exist as the large companies are much better at holding their ground. Large companies have learned how to overcome the fear of conflict by passing responsibility onto a third party, “it is our policies” whereas small companies make each discussion and word “personal”.
Conflict can either be beneficial, spurring innovation and creativity or destructive, causing discord and acrimony. When used in its positive form, conflict can provide a catalyst for change. A popular term that illustrates the positive use conflict is “the devil’s advocate”. Such applications suggest a conflicting view is being presented in an attempt to provide a much-desired opposition. This process involves uncovering truths that if left undiscovered may have allowed an unsuccessful idea to be taken to fruition.

When conflict arises in a relationship the process of resolution can lead to an increased understanding and renewed commitment. In fact, it is not unusual to have relationship bonds strengthened by this sometimes-intense interaction. This can be experienced on both the individual and organizational level.

To those who are more open emotionally, conflict provides an opportunity for self-analysis and introspection. The well-known saying, “if you’re not part of the solution you may be part of the problem,” has great application.

        

When we seek advice from peers or colleagues we are usually consider the person’s expertise and ability to advise on the subject matter. For example, we would not ask the newly divorced about the wonderful aspects of marriage, the financially independent about the best place to purchase inexpensive items or the childless person about dealing with disciplinary problems. However, when small company owners seek business advice, I often see them forget this fundamental concept.

When we search for business advice, we want to make sure the person has the experiences and insight into our particular situation. A “one size fits all” strategy does not apply to business problems.

I am not suggesting that we only seek advice from those with direct application to our situation. To the contrary, we should seek the opinion from a variety of sources thereby gaining a well-rounded view. What I am suggesting is that we consider what questions we ask of whom.

If a successful discount retailer was to comment on marketing tactics for a high level Spa, unless this person was educated in marketing principles they are only equipped to prescribe from their own biography. Therefore, the advice may not be applicable. However, the discount retainer can be asked about developing discount programs for the Spa, thereby tapping into the person’s unique experiences.  
With the recession on the minds of most business owners, there is an increased tendency to frantically search for advice. Frustrated and scared by economic conditions, they turn to friends, family and colleagues to whom they feel close and connected with, independent of that person’s business acumen. As a result, they make decisions based upon well-intended but often misdirected advice.

As nervous business owners seek more advice during these troubled times, applying the right advice to the right situation can make or break the company. Be sure to consider the source and strive to align the appropriate question with the advisors background, experience and expertise.

        

Success in prospecting is dependent upon the sales person's ability to (a) get in front of enough qualified prospects and (b) say the right words to develop interest, gain confidence and close the sale. Therefore, if the objective is to increase the number of sales it can be said that one of the following or a combination of may be true.  

The salesperson is either: (1) Not getting in front of the right prospects (2) Not getting in front of enough of the right prospects or (3) Not saying the right thing when in front of the right prospects.
Other considerations can include: (4) the competitive position of the company in the marketplace (5) economic conditions that influence buying power.

If a sales person believes the problem is #2- not getting in front of enough of the right prospects it may be beneficial to review each of the prospecting activities and ask the following:

(1) Is the activity successful but changes could be made to increase productivity?
(2) Is the activity successful; however, a different approach might lead to better success?
(3) Is the activity unsuccessful to the point that it is questionable as to whether the salesperson should engage in this activity?  

For each sales prospecting activity, (as identified above), answer the following question;

(1) Based on a percentage identify the amount of time involved in the activity
(2) Based on the ability to convert the prospect to a qualified lead, rate the “perceived” success ratio of the activity

The next step involves reviewing a list of successful sales closings to determine the origin of the lead. For example, if one of the activities listed is “cold calling”, review the list of closed sales to determine how many of the leads originated from the activity “cold calling”. In doing so you may find that the greatest amount of time is invested in the least profitable activity.

The purpose of the above activity is to identify the amount of time that is invested in relation to the amount of success, the ROI (return on investment) for the prospecting efforts.

Every minute invested in front of unqualified buyers or wasted doing inefficient tasks, is a minute lost towards achieving the next sale.

Moreover, every little improvement in sales skills (sales knowledge, language and closing abilities), marketing skills (research, lead generation and market penetration) and in time management (organization and efficiency) adds another minute towards achieving the next sale.
For information about a purchasing a sales activity evaluation email request to: contactus@BusinessSimplyPut.com

        

It is the start of a New Year and what better time to look for ways to improve upon your current business practices. The economic conditions of 2009 were brutal and most companies experienced a loss to their top line revenue. With this in mind, it may be a good time to review your companies lead and sales generation process.

Often companies do not consciously consider the individual activities that comprise a process. This is especially true in sales organizations, where each person may operate independently.  By performing an audit of the internal sales processes, through a series of questions, sales managers and company owners can determine if each salesperson is investing their time efficiently and where additional training may be beneficial.

The following outlines a series of questions regarding three processes: lead generation, lead management and prospect development. Although each company is unique, many of these questions can apply to most organizations.

Review the questions and customize a list to your organization. Ask each person involved in the selling process to submit their answers and then have a team building meeting where tribal knowledge can be shared, to the benefit of all involved. The more consistent and streamlined the sales process—the greater potential for success.

Lead Generation
(1) How are you generating your leads?
(2) What research do you use in the process?
(3) How do you solicit referrals?

Lead Management
(1) Describe a typical day and how you schedule your activities?
(2) How do you manage/calendar your day?
(3) Describe your process for organizing the leads once obtained.
(4) How do you manage the follow-up process?
(5) What processes do you follow to convert a lead to a prospect? (ex. number of calls/visits or the use of specific literature)
(6) What percentage of leads turn into prospects?

Prospect Development
(1) At what point in the sales cycles (amount of effort invested) do you determine if the prospect is qualified?
(2) What criteria do you use to identify a lead as a “qualified prospect”?
(3) Once identified as a qualified prospect, describe the activities involved to close the sale?
(4) How do you manage any additional information obtained during the interaction?
(5) How do you manage the communication process?
(6) What percentage of qualified prospects turn into clients?

        

In response to the recession many small to mid-sized companies are discounting their prices to attract or maintain customers. Although this may make sense from a sales perspective, financially this could be the decision that destroys the company.

Many business owners follow this thought process: offer lower prices to get the customer in the door and the discount will be “made-up” on the ensuing sales. If you are reducing the profit margin to gain market share this can be an effective short-term strategy. However, if you are discounting below the company’s cost structure the financial loss on each transaction can lead a company to insolvency. Therefore, prior to deploying a discount strategy a true assessment of the cost structure must be considered.

Here is where companies miscalculate:

Large corporations follow similar strategies but they differ in their financial understanding of the cost structure, which considers ALL expenses involved in the production of the product or service. Less financially sophisticated companies, which are indicative of smaller companies, make the mistake of only considering the obvious cost, leaving out overhead items such as rent, marketing efforts, sales commissions, administration and insurance. Whereas the large companies are discounting the amount of profit, the smaller companies are unknowingly losing money on every transaction. Eventually this becomes evident in the cash flow, as the amount of cash slowly diminishes every month in spite of an up-tick in sales.

So what is a small company to do?

In response to the recession most companies have seen a decrease in sales. Many small companies simply do not have the cash reserves to cover the overhead during a prolonged sales decline. Additionally, the profit margins may have been slim prior to the recession and therefore they do not have much “wiggle” room to decrease prices. In the case of decreasing sales a company may be better off reducing the overhead expenses to respond to the new sales numbers thereby protecting the profit margins. A profitable company with revenues of 2 million is much better off than a company discounting prices in an attempt to maintain 5 million in top line revenue, while losing money every month.