Business Growth News – June 2009
In this edition ...
Editor’s Highlights
The logistics of our office move have delayed this February edition by a week or so; but now it's full steam ahead. Our train is leaving the station, and you are welcome to hook your carriage anytime by calling us on 08 9271 7661. Or maybe join us for breakfast to start with?
So it's 'all aboard' for an exciting journey in 2009.
 8 Great Survival Strategies
Communicate
- Now is not the time to close ranks, keep secrets and act in ways you think will preserve and protect your business.
- It’s more important than ever to clearly and honestly communicate with employees and customers.
Innovate
- The best way to survive a recession – and accelerate out of one – is to create and sustain a culture of innovation and performance.
- The organisations that develop sustainable, engaged and provocative cultures where innovation is the benchmark will be more productive, more profitable and more likely to survive and thrive.
Activate
- Creating a sense of urgency to engage and motivate your people drives performance.
- Be careful not to design that sense of urgency using counterproductive fear-based measures. Create a challenge and work together to overcome it.
Infiltrate
- Look at the competitive landscape.
- Identify opportunities for occupying your competitors’ space.
- Take advantage of a competitor’s reluctance to act.
Eliminate
- Surviving a recession isn’t just about making money, it’s about saving money.
- Now is the time to look at processes, products and partnerships that are outdated, unnecessary, time-consuming or over-priced.
- Replace unhappy, unmotivated or underperforming employees with workers who are motivated and engaged.
Negotiate
- Reach out to your media partners, distributors, vendors and competitors to negotiate better deals, better rates and better strategies.
- Form partnerships that are mutually beneficial.
Regulate
- Consumers will be shopping around for the best deals.
- Don’t devalue your brand – and ultimately your profitability – by introducing price cuts.
- Instead, offer price promotions and package-sell products or services (selling more at slightly less versus selling less at slightly more).
Investigate
- Now more than ever, it’s important to understand consumer behaviour.
- How are your customers redefining value?
- How are they responding to the recession?
Extract from Company Director, May 2009, page 24
Initiating Positive Change
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Focusing on business problems is not always the best way to resolve them. Appreciative Inquiry (AI) offers a more positive approach.
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Following the traditional business approach, it is the manager who is handed the responsibility for achieving success, and their task is often stated to be ‘find the problems and solve them’.
Unfortunately, the number of problems that can be found is endless, while the time available for solving them grows shorter. It is against this background that Appreciative Inquiry (AI) has made its appearance over the past 10 or more years.
AI has demonstrated an ability to take on ‘impossible’ situations and turn them around with impressive results measured by greatly increased profitability to reduced staff turnover. Organisations involved have included Britain’s BBC, the US Navy, McDonald’s, the United Nations and the ANZ Bank.
Read more about the AI method … 
Extract from MT, May 2009, pages 18–19
SMEs Struggle for Funds
The high cost of credit and funding shortages are preventing small and medium enterprises from investing and meeting financial targets.
More than 60 percent of respondents to March’s fifth PwC Private Business Barometer survey are demanding that the federal government reduce borrowing costs. Despite advertised business loan interest rates coming down recently, many SMEs complain the actual rate they pay is rising – a gap the banks say is due to elevated “risk margins” on loans to SMEs in a recession.
Lack of suitably priced credit is forcing SMEs to delay big investments and downgrade their one-year sales and profit forecasts to single digits. “Funding did come out as the number-one issue for private businesses,” PricewaterhouseCoopers partner and private client services advisory Gregory Will says. “The government is trying to encourage businesses to spend, and it has pulled some levers with the fiscal stimulus and investment allowance. Without enough funding to grease the growth wheel, businesses just don’t have the resources on their own.”
Notwithstanding these difficulties, the SMEs surveyed expect sales and profit growth to return to double digits within three years. Will says it is critical for SMEs not to sit back and wait for improvement. “Over the past 10 years, the way most businesses grew was organically; by doing the same thing and growing with the rest of the economy,” he says, “Because the economy is now going backwards, they have to do things differently.”
Extract from BRW, 14-20 May 2009, page 9
The 4Ps are OUT, The 4Es are IN
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If there has ever been a time for change in marketing, this is it.
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MANY OF US GREW UP with the Four Ps of Marketing: Product, Place, Price and Promotion. Do you know when the Four Ps of Marketing were invented? In 1960, by Jerome McCarthy. They were made leading-edge by Philip Kotler in his book Principles of Marketing in 1967.
The Four Ps thrived in a different world. It was a wonderful fantasy world. Marketers were king. Product differences lasted. Big, obedient audiences could be reached with big, efficient media.
What is the world of marketing today? The consumer has seized control. Audiences have shattered into fragments and slices. Product differences can last minutes, not years. The new ecosystem is millions and billions of unstructured one-to-one and peer-to-peer conversations.
Marketing is in the hot seat. So many of the tools and assumptions we grew up with are no longer valid. Many marketing leaders around the world got promoted into their jobs because they did two great product launches and three great TV campaigns, and figured out how to work with a few major retailers.
Quote:
"We must learn to reawaken and keep ourselves awake, not by mechanical aid, but by an infinite expectation of the dawn."
~ Henry David Thoreau
According to a recent study by Spencer Stuart, the average tenure of a CMO is less than 24 months. And only 14 percent of CMOs have been in their positions with the same company for more than three years. A CMO Council 2007 report concludes that only one-third of board members are satisfied that their marketing leaders can explain the ROI of marketing.
We need a new framework. And a new tool kit. For starters, we need to throw away the Four Ps and embrace the Four Es:
- from Product to Experience
- from Place to Everyplace
- from Price to Exchange
- from Promotion to Evangelism
Read about these 4Es ...
Can't recall where we came across this article; but we take our hat off to the author
Is Training a Waste of Time and Money?
It’s the elephant in the room, something many have suspected but did not talk about for fear of being the first person to point out that the emperor is naked.
After more than two decades as a touted solution to better organisational performance it appears that the money and time invested in leadership training have not led to a genuine change in behaviour and performance in our public and private sector organisations. At worst, we have seen leadership programs that resulted in reduced commitment, fatigue and resignation.
However, there are ways to ensure that your leadership program delivers the results you hoped for. But it may require a significant shift in the existing paradigms surrounding leadership development.
Read about the 5 underlying paradigms that need to be shifted …
The Growth Imperative
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The old concepts of brand building, advertising,and how to treat customers are all changing as the pace of technological change accelerates.
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Robert Bloom tours the world advising entrepreneurs, business owners and company executives on how to achieve growth. The former United States chairman and chief executive of global advertising agency Publicis Worldwide has managed brand campaigns for household names such as BMW, L’Oreal and Nestle. He is also the author of The Inside Advantage (McGraw-Hill, 2008), which argues that many business leaders lack the skills to identify opportunities for growth within their own businesses. During a visit to Australia, Bloom spoke about how to “unlock the hidden growth in your business”.
“Look to the future, because that is where you'll spend the rest of your life.”
~ George Burns
You write that a business that is not growing is one that cannot be sustained. What are common barriers to growth? There are three reasons why business leaders are not able to grow their businesses: self-delusion, the view that “I’m doing OK, this is just a temporary problem.”; procrastination; and thirdly, they really don’t know how. Business leaders, particularly in larger companies, don’t want to admit that.
Other questions answered by Robert Bloom include:
Doesn't growth come naturally in business?
Many companies in this downturn are more concerned about surviving than growing. Do they have a point?
Is a successful brand the key to growth?
How do you grow when you can no longer rely on customer loyalty?
What are we going to learn from the GFC?
What is the essential leadership factor to succeeding in such an environment of change?
Read on to see his answers …
Extract from BRW, April 30 – June 3 2009, pages 66–67
Has your Business Coach Got what it Takes?
Sports coaches know that it is the whole team that will deliver success or failure, yet business coaches are often only asked to focus on individual performance.
How can you be sure that your coaching and training spend is geared to maximise the competitive advantage of your business?
There are three factors that are overlooked by many coaching buyers in corporate Australia today:
- Selecting the most powerful combination of executive, team and organisational coaching
- Alignment between individual, team and business goals and objectives
- Establishing return on investment (ROI) metrics to monitor the impact of the coaching on the performance of the organisation as a whole
Read more about these 3 factors and how to achieve them …
Extract from MT, June 2009, pages 18-19
Why is Corporate Leadership Failing?
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Chain of Demand
The global financial crisis is proof that the corporate leadership industry is producing a flawed product.
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Whatever the specific causes of the global financial crisis – and the recession now unfolding – the root cause has been a failure of leadership. Distilling the elements of leadership is something that has long occupied academics, management consultants, authors and others, in the belief that leadership can be taught and replicated.
The idea that leaders can be manufactured has been proven wrong time and time again, and yet the idea persists. This fixation with leadership as a “product” has turned leadership into an industry more interested in making and selling products than dealing with issues of substance.
Treating leadership like instant mashed potato – just add water, and hey presto – is a formula for ensuring that we keep on producing ultimately unsatisfying sludge.
Read more…
Edited transcript of a speech to Monash University marketing alumni breakfast in Melbourne
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Edensilk Pty Ltd assists client organisations to improve their business development knowledge and processes, with the desired outcome of increasing their ability to grow and prosper using the aligned energy and objectives of all employees, customers and partners.
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Published by Edensilk Pty Ltd. Editor: Paul Curtis. © 2001-2008. All material is copyright. Extracts may be used when 'Edensilk's Business Growth News' is acknowledged as the source including reference to www.edensilk.com.au No liability is accepted for the application of ideas expressed within these articles |
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