Tuesday, February 20, 2018

He Was Not Afraid of the Dark¹

[Editor's Note: Many of you may be faced or will be facing difficult decisions about how and what information to share with your managers and employees. The following article may seem to some to be an unusual addition to our collection, but it has a poignant message for CEOs and business owners from that renowned management guru, Mr. Rogers.  Simple, direct, honest and open communication is always best.
Even if you can't fix it, explain it. I once asked my then toddler daughter why she liked to watch Mr, Rogers. She replied, "Because he talks to me, Daddy."

This article, when we first shared it in 2003, evoked a visceral response and had the highest reader response rate of any other single Issues for Growth e-letter. February 19th marked the 50th anniversary of the debut of Mr. Roger's Neighborhood. Somehow, in today's world, when we need direct, honest, open communication, it seemed like a great time to republish this.                   -dpm]

He Was Not Afraid of the Dark¹
   
If you remember Mister Rogers as being as warm, fuzzy and innocuous as a cardigan sweater, then you did not really know Mister Rogers. It is true that Mister Rogers' Neighborhood was an island of tranquility in a children's mediasphere of robots and antic sponges. And in real life, Fred Rogers, who died last week of stomach cancer at age 74, was evidently as sweet and mild mannered as the kindly neighbor he played on TV. An ordained Presbyterian minister, he didn't smoke, drink or eat meat, prayed every day and went to bed by 9:30 each night. To cynics and parodists, Mister Rogers' Neighborhood was a namby-pamby zone of pint-size feel-goodism, and Mister Rogers himself a wimpy Stuart Smalley for tots.

But part of what made Mister Rogers' Neighborhood great and unique is that, for all its beautiful days in the neighborhood, it was also the darkest work of popular culture made for preschoolers since perhaps the Brothers Grimm. Mister Rogers was softer than anyone else in children's TV because so many of the messages he had to impart were harder. That your parents might someday decide not to live together anymore. That dogs and guppies and people all someday will die. That sometimes you will feel ashamed and other times you will be so mad you will want to bite someone. He even calmed fears that may seem silly but to a child are real and consuming - like being afraid to take a bath because you might be sucked down the pipes. Mister Rogers gently sang, "You can never go down/Can never go down/Can never go down the drain."
In other words, Fred Rogers knew that childhood, which we mis-remember as carefree and innocent, is a time of roiling passions, anguish and terror.

His show, the first version of which debuted in 1963, was his professional way of doing what he had done as a boy in Latrobe, Pa., when he played with puppets to calm himself after hearing scary news reports. And perhaps one reason his death touched adults so deeply is the feeling that Mister Rogers left us when we could especially use someone to teach us to manage our children's fears, and our own.

The last original episode of Mister Rogers' Neighborhood aired on Aug. 31, 2001 - a scant 11 days before we needed him to explain the biggest Big Inexplicable yet. He returned to tape public-service announcements on how to talk to kids about the Sept. 11 anniversary, but the anxiety has only built since then. War jitters, orange alerts and duct-tape mania have rendered literal our most childlike, monsters-under-the-bed fears: that a tall building can collapse like a house of cards, that something bad can seep in ghostlike through your window and hurt you. ...

... We relied on Mister Rogers to explain death and hurt and sadness, not to eradicate them. CEOs, business owners and senior executives might take a few lessons from Mister Rogers. For instance, that an explanation of a bad thing is only reassuring if it is straightforward and direct. Mister Rogers spoke softly, but he never soft-pedaled. And he knew how to be both compassionate and authoritative. He was "Mister" Rogers, after all, never "Fred." He wore a tie even when he dressed down. He also respected children's intelligence, and while he used the Land of Make-Believe to teach lessons, he never puffed up kids with false promises and fantasy. There is no more un-Disneyfied sentiment in children's pop culture than the title of his song Wishes Don't Make Things Come True.

PBS' website offered tips for helping children cope with Fred Rogers' death. "You may be surprised," it said, "to find that you're more upset than your child." But that should surprise no one. Kids, after all, will have hundreds of Mister Rogers' Neighborhood reruns to help them through their spooky moments. But who is out there today, in any neighborhood, to reassure grownups that we can never go down the drain?
¹ In a nervous age of orange alerts, who will take the place of Mister Rogers?
By James Poniewozik Monday, Mar. 03, 2003 Time Online Edition

What are your thoughts about these key points? Share your reactions

Monday, January 8, 2018

Why every company should be doing scenario planning: How well are you prepared for what you don't think will happen?


[Editor's Note: I recently listened to a positive economic forecast for the first half of 2018 and was struck by an interesting caveat made by Alan Beaulieu - when the economy is continuing to go up month after month, optimism about the momentum and duration of the economic upturn has tended to blur our vision. History tells us that most of us tend to ride on our optimism and miss the turns in the markets (Think the tech bubble of the late 1990's or the big surprise in 2008).
Do we really know how this is going to play out over the next few years? There are a number of different views of where the markets and economy may go. But, we all need to chart a direction for our companies.  With great uncertainty and multiple different views of the future, a company needs to do scenario planning, so that it thinks about the different possible views of the future and how it would move or adapt to best position itself for success.

The Mead Consulting Group utilizes scenario planning to help clients build flexibility into planning and execution and to help leaders think "broader." This last recession was a game-changer. While scenario planning was once conducted primarily with our larger clients, today, over half of our clients (owner-operated, strategic, and private-equity- backed) have discovered the benefits of scenario planning.  - dpm]

    

 Why every company should be doing scenario planning 
If your business or industry is predictable, you need not continue reading. If, however, there is uncertainty about the future of your markets or industry, then your company should examine the way it plans. It isn't just healthcare companies, either. I would submit that there is little real predictability in most industries.
Making assumptions gives us a false sense of security and puts blinders on us.What is the old line about the word "assume" making an "ass out of you and me?" Not to be profane, but traditional strategic planning totally botched the economic downturn/recovery of 2008 - 2017. Traditional strategic planning is based on assumptions. The planning group makes certain assumptions about the future - about variables such as economic, political, social, technological, regulatory, environmental, etc. Making assumptions is just another way of saying we are attempting to predict the future.
Really? I would suggest that there are situations where economic, social, political, technological, regulatory, and environmental factors will drive fundamental change in every business and industry of every person reading this e-Letter. It's really only a question of degree, pace, and timing.
Various organizations/industries (e.g. Blockbuster, Kodak, print media, broadcast media, distribution ...the list goes on...) could have avoided significant market pain by utilizing scenario planning. Without being overly critical, these organizations/industries were complacent - and they made assumptions about the future that proved to be very wrong. Each was overtaken by forces that were not within their traditional industry competitive analysis.
Have the courage to consider the tough questions. How will your business be impacted by the following?    
* Technology - How much will technology change your industry?
     Will your business or industry be affected by any of the following:
  • Mobile ordering; Mobile product/ price comparisons
  • Mobile payments
  • Artificial Intelligence
  • "Showrooming" in brick and mortar stores and buying online (e.g. Best Buy vs. Amazon)
  • Contextual offers/specials, loyalty programs, other specific knowledge about customers
  • Social commerce
  • Apps for everything
  • Efficient visibility and management of supply chains (from end user order entry - directly impacting each step of the supply chain)
  • Amazon ....everywhere
*   Geopolitical 
*   Social/Environmental
  • Power moving to the consumer (away from institutions)
  • Buyers have equal or greater knowledge than sellers
*    Changes in culture, attitudes
  • Will 20-something millennials continue to defer the desire for home ownership?
  • What long-term impact will the "sustainability" movement have on markets, products, and attitudes about companies
*    Demographics - Is your customer base affected by demographics?
  • Aging population in certain markets
  • What does the negative birth-rate and aging population mean for European economies like Greece, Spain, Italy, or Iran and Iraq
  • Baby boomers retiring, selling businesses, eldercare, etc.
*    Economic
  • Is the U.S. facing a period of structural unemployment?
  • Potential future periods of inflation
  • Will increasing labor rates continue to make China less competitive? How will outsourcing look in 5-10 years?
  • What will happen to Europe after Brexit?
  • Impact of Cryptocurrencies
 
 
*    Regulatory - The list is endless...
  • Healthcare / Affordable Care Act
  • FDA
  • EPA
  • Trade
  • Tax reform (Elimination of subsidies, elimination of deductions)
Companies can no longer ignore uncertainty or try to assume it away. Some organizations will say scenario planning is too difficult and elect to take a simpler course.  Most organizations perform traditional strategic planning or business planning/ budgeting because it is comfortable and addresses a short timeframe. However, we now know that the world is uncertain and interconnected. Companies can no longer ignore uncertainty or try to assume it away.  As author H.L. Mencken is quoted, "For every complex problem, there is an answer that is clear, simple, and wrong."

That is your opportunity. Since the 2008 downturn, we've seen the number of our clients that are doing scenario planning has more than tripled.  Companies that are scenario planning are examining different possibilities of the future and determining their competitive response. They are modifying the trends and information that they monitor so that they can develop "early warning" signs. These companies are building flexibility into their planning and adaptability into their leadership and culture.

If you want more information on the Mead Consulting approach to scenario planning, please contact me
   
What are your thoughts about these key points?

Monday, November 27, 2017

If customers are so important, why don't we know more about them?

                                                                                               
[Editor's Note: In an age where there is so much talk about the being close to the customer, why is service so bad, leaving customers feeling more estranged than ever from providers of products and services. CRM, customer-friendly, customer intimate, and customer-centric language abounds. Could it be that company resources are stretched, trying to please too many customers? Perhaps we would have better performance if we focused on our best customers. - dpm]
  •  KNOW WHO YOUR BEST CUSTOMERS ARE. All customers are not created equal. Research indicates that it is not unusual to find that over 50% of a typical company's customers are unprofitable when all cost factors are considered. In some companies, over 85% of the profit may come from as few as 10% of the customers. Start by ranking your customers by net profit generated. Include all costs of doing business - direct product and service cost, handling, order processing, administration, delivery. What are the patterns? Which customers present the greatest opportunity for profitable revenue expansion?
  • DON'T TREAT ALL CUSTOMERS THE SAME. You can't be all things to all people. Once you have determined your best customers, focus on deepening the relationship. Gaining additional share of a customer's business is usually much more profitable than finding a new customer. Offer meaningful services that demonstrate their status. Such services as a priority position in the manufacturing schedule, priority delivery, access to training, etc. need not add much cost to your operation, but can clearly bring your "best" customers closer to you.
  •  CHOOSE YOUR CUSTOMERS. Develop profiles of your best customers. Are there common characteristics?  Once the profiles are developed, go out and find more customers just like your best customers. Use market research and on-line tools to develop targets so that you focus your resources.
  • MAKE YOURSELF INDISPENSABLE TO YOUR CHOICE CUSTOMERS. Make it your business to learn your customer's business. Find the pain in your choice customer's business and look for ways to help him solve it. Do that a few times and you will be perceived as not only valuable, but indispensable.
  • MAKE "KNOWING YOUR CUSTOMER'S BUSINESS" PART OF YOUR CULTURE.Create special programs that identify your best customers to all of your employees. Make it every employee's job to find ways to better serve the choice customer. Make certain that compensation and reward systems recognize the importance of pleasing the key customer. 
  • ALLOW OTHER CUSTOMERS TO "OPT-IN". Companies that have adopted this "choice customer" strategy have been pleasantly surprised to find that many of their other customers select them and opt-in. Although these customers may pay slightly higher prices and have different service levels, they find the customer-centric culture appealing. Many companies have developed different tier priority service designations for these opt-in customers, but find additional ways to demonstrate superior relationships.
We help clients think differently. The Mead Consulting Group helps clients develop a process to identify net profitability by customer and product and then to develop strategies and tactics - and the cultural norms needed - to increase the client's share of the most profitable business. If you would like more information on how this might be applied in your organization and how we might help you and your company accelerate the process of adding value and moving your company to the next level of performance,  please contact me by email or (303) 660 -8135.

Monday, November 6, 2017

Avoid Becoming a Commodity

[Editor's Note:In a recent conversation, the leader of a company explained that his was a commoditized business - just like many others in his industry. I asked him why anyone would choose to buy from him  unless he offered the absolute lowest price. He looked a bit bewildered by my comment and then responded that fighting price competition was his company's biggest issue. It made me think of an article about differentiation. I hope you find it useful.                                    -dpm] 
 
All products become commodities. All industries become mature.
You wake up one morning and realize that your products have become commodities. Your competitors all have basically the same "stuff" to sell and your sales people are constantly pressured to lower prices. Margins are being squeezed. You can't believe the price that a competitor just quoted to lure one of your customers. You know all of the competitors - they are not in any better position than you. This just isn't fun anymore!
 
Welcome to life in a maturing industry where growth is slowing - or may even be declining, all of the competitors and customers are known, and customers change suppliers or products for a lower price. Maturity comes to all industries - materials, products, or services. Whether you provide concrete or steel, or develop and sell software, your industry matures and your product sooner or later becomes a commodity. In today's environment, the path to market maturity is much faster than ever before.
 
Good News. Your customers know the answer.
There is some good news. There is big money to be made in mature markets. Some companies in mature industries command premium prices, have low customer attrition, make excellent margins, and continue to grow. But, it requires some different thinking about your customers, products, and markets.
 
Don't look for the answer inside your company. Creating services and solutions around products is not the answer if you are not pointed in the right direction. Get to know your best customers better (that is, your most profitable customers on a net profit basis). Ask them about their business, their problems, their pain. Survey and interview customers. Go to their facilities. Meet with their top managers. Listen and Observe. What are they really buying? Where do they need help?
 
When is a product more than a product.
Years ago, one of our clients was selling sophisticated diagnostic scopes to physicians, but technological advances slowed and it was difficult to expand the market. Pricing became very competitive. It was difficult to convince physicians to make a big capital purchase. The company interviewed dozens and dozens of physicians and office managers and discovered an interesting issue. Since the scope had to be sterilized between patients and the sterilization procedure for scopes is lengthy, physicians and their staffs continually had a problem having a sterilized scope available. The company decided not to sell scopes to physicians, but to offer a fee-based service - providing clean, sterilized scopes to physicians. They wrapped a product with a service and solved the real problem for physicians. Margins soared. Pricing was no longer an issue...they were selling more than a scope.
 
Do things your customer doesn't do well or want to do.
A client in the industrial distribution business found that some of its customers were having difficulties hiring and retaining qualified welders, and there were safety concerns with their customers' painting and welding production environments. The client offered to begin to deliver "finished" components (cut to size, fabricated, welded, and painted) right to the final assembly line. Revenue and profits increased. What is even more significant is that the customer now has an indispensable relationship with the supplier.
 
Change the way your product is packaged, managed, delivered, or used.
Another manufacturing/distribution client found that their customers were poor planners. Routinely the customer would show up at their warehouse in the morning to pick-up product and materials for the day's job. By the time they arrived at the job site, it was after 10:00 am. The client offered two services to help: An early morning pick-up - any order that arrives by voice mail, fax, or email by 11:00 pm is staged and ready for pick-up by 6:00 am. They also offer a project management service. The distributor manages the delivery of materials according to a job project schedule which the distributor continuously monitors for the construction customer. This ensures that the right materials are delivered to the right site at the right time. The distributor cannot command a significant premium for these services, but doing business in this manner actually saves them money and builds customer loyalty.  
 
Can technology change things up?  
Another company produced capital equipment which provided a static diagnostic testing for their customers in the power industry, The problem - it required that the customer's equipment be turned off during the diagnostic test. The company came up with a means to add sensors to their customer's equipment and to provide a continuous monitoring service for a monthly fee. Margins and market size both increased dramatically. Customers were ecstatic about not losing productive time on their equipment   
 
Your Customers may hold the key to differentiating your commodity product or service
  • Determine what the CUSTOMER is buying? Survey and interview the customers - Listen to their pain and their needs in their business
  • Change the way your product is packaged, managed, delivered, or used
  • See how technology might change the economics or competitive environment
  • Perform some of the processes and/or functions now performed by your customers
  • Make the product more than a product
  
What are your thoughts about these key points? Share your reactions.
  __________________________ 
 
We help clients think differently. If you would like to discuss how we might help you and your company accelerate the process of adding value and moving your company to the next level of performance, please contact us. 

Monday, September 25, 2017

Top Ten Criteria for Hiring a Consulting Firm to Help Your Small or Middle Market Business

[Editor's Note:In today's market, there are folks and firms that purport to have all the answers to issues facing small and mid-size businesses. Firms and individuals pop up with articles in local newspapers, blogs, and business magazines with all the answers. New models with fancy and catchy acronyms like RED and FAST appear on the scene. Sometimes, it is difficult for companies and business owners to determine who can really help them navigate the road ahead.

We offer the following comments about what companies should be looking for in a partner to help them realize their potential. This is a reprise of an article published several times over the years. . 
One of our long-standing clients suggested to me that it might be valuable to update it again.            -dpm] 

 Top Ten Criteria for Hiring a Consulting Firm to Help Your Small or Middle Market Business 

Focus: Beware of "one stop shop" firms that say they do everything. These include accounting firm add-ons, investment banking/M&A firms, or interim CFO firms. Accounting firms provide valuable services - audits, tax assistance, internal controls, and compliance. CFO firms provide accounting, controller, and finance functions. Investment banks/M&A firms provide a great service in the transactional work of selling your company. 
The firm you engage needs to specialize in helping companies in your size range with your range of strategic and value issues ... and have the track record to prove it!  

Execution:
Most consulting firms focus on the front end (their plan and their intellectual input). Make certain you feel comfortable with the execution and their proven ability to assist you in achieving results.  

Overcoming Barriers to Success:  
Most consultants do not actually help organizations understand - and overcome - what is preventing them from being successful at the next level. Those can be tough discussions, but you can't make real progress until these barriers are addressed. 

Value: Many consultants focus on the top line (revenue line) without understanding the key drivers of value.

Flexibility - to YOUR needs:Most firms have a "one size fits all" model and they will squeeze all clients into that same model. 

Tell the Hard Truths: Most firms do not offer truly independent objective advice - they will not tell clients the difficult truths since they want the follow-on business. If it seems too good - or too easy- to be true, it usually is. There are no magic pills or magic bullets. Success in business is generally the product of good direction and hard work.

Been in Your Shoes: Most consulting firms will not have folks that have actually been in your shoes (as owners or CEOs) - and emerged successfully. It's very different when it's not your capital at risk. Ask if they have ever led a company through a period of rapid growth, weathered a downturn, or led a business through a successful sale.

Beware the "Temporary" Consultant: Beware of individuals or firms that sprung up recently. Firms with less than 5 years experience many times exist only as long as it takes for the principals to find their next full-time job, or to have their traditional business volumes return. That could leave your company in the lurch when they lose interest in you.

Talk with Their Clients - Present and Past: Talk with owners of client companies of the consulting firm. Ask them, in the end, what results were achieved. Did the consulting firm exceed expectations? Get specific about the numbers.

Aligning Their Interests with Yours: Will the consulting firm share in the risk /reward proposition with you? Are they willing to risk a portion of their fees based on your company's results?

Small and middle market companies are typically the most significant asset of the owner. They are the product of many years of tireless effort and risk. Selecting a partner who will work alongside you to help your business achieve its potential is an important decision.
 
What are your thoughts about these key points? Share your reactions below.
  __________________________
 If you would like to discuss how we might help your company accelerate the process of adding value and moving your company to the next level of performance, please contact us.

Thursday, September 21, 2017

Who Moves Your Organization Forward? Engaged vs Disengaged Employees



[Editor's Note: In 2016, I saw a startling statistic from Gallup. Of the employees in the largest 30,000 companies in the U.S., over 68% were disengaged - not connected to the objectives and goals of the organization. I was stunned, but over the years, I have come to realize that it is very true.

As companies struggle to attract and retain good employees I thought you might enjoy the following insights from Curt Coffman (author of "First Break All the Rules") about the differences between satisfied employees and engaged employees. Which type of employees do you have in your organization?           -dpm]
  
                                                         Who Moves Your Organization Forward?

Satisfied Employee
Engaged Employee
Lagging indicator as contribution to Shareholder Value
Leading indicator as contribution to Shareholder Value
Reactive -- "I do what I'm asked."
Proactive -- "I do what needs to be done - even if not directed to."
"That's how we do things here!"
"How can we do this better?"
"I work here" 
"I do my job." 
"I am part of the organization's fabric."     "I am not limited by a job description -     I want to make a broader contribution."
Short term focus (steps) "How should I do this?"
Long term focus (outcomes) "What result is required?"
Easy to manage -- "I go along to get along."
More difficult to manage - does more than required - pushes the boundaries
Seeks answers
Seeks results
Points out problems
Solves problems - prevents problems
Applies learning to a current situation
Applies learning to improve future situations
"What do you want me to do?"
"How can I help?" "What else can I do?"
Don't make waves - avoid conflict
Challenge the status quo - constructive conflict
Flies below the manager radar whenever possible
Demands relationship with manager
Powerless -- wait for direction
Powerful - act, then ask for forgiveness
Risk avoidant -- "I follow the rules."
Takes calculated risks -- "I bend rules as needed to achieve the required results."
"I try to do a good job."
"My work energizes me. I give it my best."
© 2006 Curt Coffman Consulting LLC, All rights reserved


"People are normally productive for about 5.7 hours in an eight-hour business day.  

But any time a change of control takes place;  
their productivity falls to less than an hour."

 If you would like to discuss how we might help your company accelerate the process of adding value and moving your company to the next level of performance, please contact us.