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TOP
STORY
Crossing No-Man’s
Land
by TEC speaker Tom Searcy
- Introduction
- Small Versus Big
- Living on the Edge
- Thar She Blows!
- Preparing the Hunt
Introduction
Fewer than two
percent of all companies in the United States ever grow to more than $25
million in annual sales. That means that 98 percent never break through
the glass ceiling of being a "small" company.
In the growth and
development of every business, certain critical points demand dramatic,
transformational change in order to break through to a sustainable and
profitable size. Understanding this pattern and being able to identify
the points in time at which radical change is required for the business
to grow are essential leadership skills. Yet the vast majority of
business owners and leaders cannot make the changes, and thus will never
grow beyond $25 million.
This period of time
and revenue growth between $25 million and $100 million-plus is called
"No Man’s Land."
Small Versus Big
Consider these
distinctions between a $25M and a $100M company. For the majority of
small companies ($25M or less in annual revenue):
Ø
Market is "niche market."
You have carved out a limited, specific market by product, geography,
service offering or some other characteristic.
Ø
Sales approach is "avoidance."
You sell below the radar and avoid selling head-to-head against much
larger national firms and industry leaders.
Ø
Value proposition is "better."
In contrast to your competitors, you demonstrate an incrementally better
set of benefits in your offering to customers.
Ø
As
companies close in on $100M in size, these characteristics change
significantly. For larger companies:
Ø
Market is "broad market."
You sell a complete, integrated solution to large clients.
Ø
Sales approach is "confrontation."
You must face other large competitors head-on in price, integrated
solution, technology, service, innovation and other criteria.
Ø
Value proposition is "completeness."
You are expected to provide a complete solution at a very
price-competitive rate.
Industries, markets
and firms can differ, and these breakpoint revenue amounts are only
guidelines. However, if your company continues to grow, you will reach
the edge of No Man’s Land. When you do, you will need to make
transformational changes.
Living on the
Edge
How will you know
when you’ve reached the edge of No Man’s Land? Look for these warning
signs:
Ø
Red flags.
Bigger players are moving into your niche and perhaps claiming your
niche.
Ø
Thunder
without rain.
You are swamped by what seem to be new RFP’s. You’ve made your way onto
the list of qualified companies who bid out large business, but you
remain too small to win.
Ø
New faces.
You are finding new competitors, smaller, lesser-known firms, in the
opportunities that you are pursuing.
Ø
Bobbing in
the ocean.
Annual revenues go up and down like a buoy over several years. You
perceive a ceiling of revenue amount that you cannot break through.
Ø
Trading
places.
Your company is losing large accounts at a rate similar to the rate it
adds new ones.
The edge of No
Man’s Land puts you at significant risk. You’re becoming too big to
hide, yet you still feel too small to fight. To continue to grow, you
must add larger accounts than when you were smaller. Yet, this need for
larger accounts pushes you into the marketplace of the larger
competitors, who can be very aggressive in terms of how they deal with
smaller, up-and-coming firms. In addition to brand, they also command
superior resources and technology, and have a broader service base and,
often, price advantages.
If you aspire to
become much larger, you must cross No Man’s Land as quickly as possible
in order to minimize your vulnerability.
Thar She Blows!
Upon entering No
Man’s Land, there are four options for speedy travel. The first three
include:
1.
Acquisition or merger.
Buy, merge, or be bought in order to achieve size, capital and leverage.
2.
New
products.
Bet the farm on the introduction of a new product/service for rapid
growth.
3.
New
markets.
Rapidly expand into markets in which you have little presence with the
expectation of high sales volume.
These three options
pose several formidable challenges. First, they require a substantial
financial investment. Second, they represent a significant distraction
from your current client base. Third, based upon business statistics
they have a low probability of success.
The fourth option?
Whale hunting.
Whale hunting is
the "organized and process-driven effort to scout, hunt and harvest very
large accounts." This approach provides multiple advantages over the
other three. Specifically, whale hunting:
Ø
Uses your
current resources rather than undertaking an enormous increase in
expense.
Ø
Creates a
process and implementation methodology that will sustain the business
after it has reached its initial growth targets.
Ø
Incorporates predictability and measurement into the achievement of
goals throughout the growth process.
Ø
Ensures
scalability so that as you grow, you do not need to re-invent the
"success magic." Rather, your processes are designed to anticipate and
accommodate growth.
Preparing the
Hunt
Before embarking on
whale hunting, it is critical to:
1.
Fathom your new waters.
You are now in a new world of opportunity. You will be competing against
companies much bigger than you, and yet you will still have your old
competitors as well. To win, you must learn how to beat the big
competitors.
2.
Focus
on understanding.
This is not the time to dramatically shift markets. At the edge of No
Man’s Land you are probably in the right market. However, you have the
wrong message and inferior process to deliver it in order to win.
3.
Fashion formal sales processes and measurement.
Being in new waters requires a much more scientific approach to
determine what the data of the marketplace is telling you. The key is to
develop your process for approaching the new, larger opportunities, and
then make certain that you measure your success in each of the steps of
your new approach.
Whale hunting isn’t
easy, and you can’t build a whale-hunting culture into your business
overnight. Yet, whale hunting is not a parable or a fairy tale. It is
the true story of how people of indomitable spirit set out with
rudimentary tools and technologies to capture the largest mammal on
earth in order to ensure that their village survived and thrived.
Like the Inuit, you
can undertake a systematic, well-managed, yet rapid journey across No
Man’s Land. When this process is clearly understood and embraced
throughout your company, it will yield extraordinary outcomes.
TEC speaker Tom Searcy is founder of Whale Hunters, a sales
process and business development company based in Indianapolis.
Created for MyTEC.
Copyright 2006, TEC Worldwide, Inc. All rights reserved
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EXPERT
INSIGHT
When Colleagues
Become Competitors
By Patrick
Lencioni
- Introduction
- How to combat silos
- Five key elements of a thematic goal
-
Make it real
Introduction
Silos are nothing
more than the barriers that surface between departments, causing people
who are supposed to be on the same team to work against one another.
Whether we call this departmental politics, divisional rivalry or turf
wars doesn’t really matter. What does matter is that we understand the
magnitude of the problem.
Silos, Politics,
and Turf Wars
explores the devastating nature of silos—they waste resources, kill
productivity, and jeopardize the achievement of goals. And beyond all
that, they exact a considerable human toll too. Silos cause frustration,
stress, and disillusionment by forcing employees to fight bloody,
unwinnable battles with people who should be their teammates.
There is perhaps no
greater cause of professional anxiety and exasperation—not to mention
turnover—than employees’ having to fight with people in their own
organization. And the problem doesn’t end when employees—at every
level—leave the office; it bleeds over into their personal lives,
affecting family and friends in profound ways.
Many executives
I’ve worked with who struggle with silos are inclined to look down into
their organizations and wonder, "Why don’t those people just learn to
get along better with employees in other departments? Don’t they know
we’re all on the same team?" All too often this sets off a
well-intentioned but ill-advised series of actions—training programs,
memos, posters—designed to inspire people to work better together.
But these
initiatives only provoke cynicism among employees—who would love nothing
more than to eliminate the turf wars and departmental politics that
often make their work lives miserable. The problem is, they can’t do
anything about it. Not without help from their leaders.
While the first
step those leaders need to take is to address any behavioral problems
that might be preventing executive team members from working well with
one another—that was the thrust of my book The Five Dysfunctions of a
Team—even behaviorally cohesive teams can struggle with silos.
(Which is particularly frustrating and tragic because it leads
well-intentioned and otherwise functional team members to
inappropriately question one another’s trust and commitment to the
team.)
To tear down silos,
leaders must go beyond behaviors and address the contextual issues at
the heart of departmental separation and politics. My book, Silos,
Politics, and Turf Wars, was written to present a simple,
powerful tool for addressing those issues and reducing the pain that
silos cause.
How to combat
silos
To avoid politics
and turf battles, leaders must establish a rallying cry—a single
overriding theme that remains the top priority of the entire leadership
team for a given period of time. In turn, this rallying cry or "thematic
goal" serves to align employees up and down the organization and
provides an objective tool for resetting direction when things get out
of sync.
While it is
certainly a good idea for companies to have both a vision to motivate
people over the long term and a set of tactical objectives to guide
their daily activities—and most do—the thematic goal lies somewhere in
between the two, and I believe it may well be even more important.
That’s because it bridges the two by making the vision more tangible and
by giving the tactical objectives more context.
Five key
elements of a thematic goal
Let’s look at the
key elements of a thematic goal to understand how this happens:
1.
Single.
There can be only one true thematic goal in a given period. There may be
other desires, hopes, and objectives at play, but none of them can be
attempted at the expense of accomplishing the thematic goal.
Every organization needs a top priority. This is best summarized by the
wonderfully simple adage, "If everything is important, then nothing is."
Something has to be most important.
2.
Qualitative.
The thematic goal is
not a number, and it is not even specifically measurable. It is a
general statement of a desired accomplishment. It requires a verb,
because it rallies people to do something. Improve, reduce,
increase, grow, change, establish, eliminate, accelerate.
Eventually, though, the thematic goal will be clarified by metrics,
numbers, and target dates.
3.
Time-Bound.
The thematic goal does
not live beyond a fixed time period, because that would suggest that it
is an ongoing objective. It is a desired result that must occur within a
three to twelve month time frame, depending on the nature of the
business. For instance, a university often has a thematic goal with a
relatively long time horizon, while a start-up company cannot usually
afford to take such a long-term view. Some businesses have fixed costs
and barriers to competitive entry that give their thematic goals a
longer shelf life, while others can lose momentum or market share almost
overnight and are forced to think in shorter increments.
4.
Shared. The
thematic goal applies to everyone on the leadership team, regardless of
their area of expertise or interest. While it is true that some thematic
goals will naturally fit largely within one particular executive’s area
of responsibility, it is critical that all team members take
responsibility for the goal, and for doing anything they can to move the
company—not just their own department—toward the accomplishment of that
goal. Executives must remove their functional hats, the
ones that say finance or marketing or sales, and
replace them with generic ones that say executive. They must dare
to make suggestions and ask questions about areas other than their own,
even when they know relatively little about those areas.
Make it real
A thematic goal, on
its own, will leave an organization confused about what exactly to do.
There are two critical components that help inform the thematic goal:
defining objectives and standard operating objectives.
Once a thematic
goal has been set, the leadership team must then provide actionable
context so that members of the team know what must be done to accomplish
the goal. These are called defining objectives because they are
the building blocks that serve to clarify exactly what is meant by the
thematic goal. These are the actions that a company needs to take in
order to make the thematic goal attainable. Like the thematic goal,
defining objectives are qualitative and shared across the entire team.
The leadership team
must also acknowledge the existence of other key business components
that need to be monitored: standard operating objectives. These
are the ongoing objectives that don’t go away from period to period, and
vary from one company to the next depending on the industry. Standard
operating objectives often include topics like revenue and expenses,
as well as other items like customer satisfaction, productivity, market
share, quality, and the like.
The danger for a
company lies in mistaking one of these critical objectives, like revenue
or expenses, for a rallying cry. Most employees find it difficult to
rally around "making the numbers" or "managing expenses," knowing that
these will continue to be trumpeted as critical over and over again in
future periods.
Once, the thematic
goal, defining objectives, and standard operating objectives have been
established, a leadership team can now start talking about measurement.
But remember, without these other areas, metrics have little no context.
Even the most driven employees—including executives—will not be as
motivated for hitting the numbers if they don’t understand how they fit
into the bigger picture. Keeping the thematic goal alive in the course
of running the organization is essential – the central place to do so is
during regular (usually weekly) staff meetings. There are more
requirements to embedding the thematic goal which are outlined in the
book.
As potentially
dangerous as silos are, the prospect of eliminating them should be
exciting for any leader. That’s because an organization that does so –
aligning its employees so that they are all pulling in the same
direction – can establish for itself a powerful competitive advantage.
Patrick Lencioni
is the author of five leadership fables including the new release,
Silos, Politics, and Turf Wars. Lencioni wrote The New York Times
best-seller, The Five Dysfunctions of an Team and is president of The
Table Group (www.tablegroup.com), a San Francisco Bay Area
management-consulting firm specializing in executive team development
and organizational health.
Created for MyTEC. Copyright 2006, TEC Worldwide, Inc. All
rights reserved.
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BEST PRACTICES
The 10 Commandments
of Giving Criticism
For managers and
supervisors, criticism comes with the territory. Like it or not, your
job involves giving feedback to employees, even when that feedback
carries a critical and unwanted message. Although few enjoy giving or
receiving criticism, TEC speaker Bill Scherer believes that
certain principles can make the process easier and more rewarding for
both the giver and receiver.
Before giving
criticism, suggests Scherer, first ask yourself the million-dollar
question: How can I give the information (criticism) to the other
person in such a way that he or she accepts and acts on it so that it
benefits the other person and my relationship with them?
Asking this
question provides three immediate benefits. It forces you to:
1.
Take a
closer look at your real motives for offering the criticism.
2.
Focus on
the possibilities for change and improved behavior.
3.
Acknowledge a commitment between you and the person you are criticizing
and recognize that you have a shared responsibility for resolving the
behavior issue.
With this
foundation in place, says Scherer, you can faithfully go forth and
practice the 10 commandments of giving criticism:
I.
Praise in public, criticize in private.
Nothing will destroy a
relationship quicker than putting someone down in front of others. Save
all criticism -- even "constructive" criticism -- for the privacy of
your office.
II.
Focus on the behavior, not the person.
When you attack
people, they can't help but defend themselves. When you focus on their
behavior, people become more open and willing to take suggestions.
III.
Clearly describe the behavior you want the employee to change and why
you want them to change.
Be very clear and
specific, giving times, dates and examples whenever possible. Make sure
the employee understands your criticism and the reasons for it.
IV.
Make sure the person is capable of changing the behavior.
If the person can't
change their behavior, don't criticize them for it.
V.
Keep it short and to the point.
Don't belabor the
point. Lengthy and repeated criticism encourages the person to tune out
or become angry and defensive.
VI.
Use a positive tone.
Don't allow negative
feelings to influence your choice of words. Avoid threatening, accusing
words and gestures (clenched fists, pointed fingers, etc.). A positive,
soft tone of voice will always lead to better results.
VII.
Use "I" rather than "you" statements.
"I" statements allow
the person being criticized to explore why you feel the criticism is
important and valid. "You" statements come across as verbal "finger
points" and tend to put the other person on the defensive.
VIII.
Show empathy.
As far as possible,
empathize with the other person. When appropriate, point out how you
have experienced the same or similar situations. This allows the person
to see that you also are human and have been there yourself.
IX.
Avoid spontaneous criticism.
Reserve all criticism
for an appropriate time and place. Because it is usually poorly
thought-out and delivered, spur-of-the-moment criticism often breaks the
rest of these commandments.
X.
Recognize positive changes in behavior.
When the person shows
positive changes in their behavior, offer plenty of praise and
recognition. When the behavior has changed and time has passed, do not
keep going back to the well and dredging up the old criticism. Accept
the new person for who they are, not who they were.
Created for MyTEC. Copyright 2000, TEC Worldwide. All
rights reserved.
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