Interpersonal Business

Vol. LXXI

Dear Manager,

As managers, we have little ability to impact or exercise control over competitors in our product category. We can certainly anticipate, respond to, out-maneuver and stay a step ahead of … but the ability to control their efforts simply doesn’t exist in the free world. We can only impact areas in which we have some degree of control: our staff, our sales partners, our customers, and the actual consumer. These are our true competitors; these are the areas of significant opportunity.

This month I would like to analyze this group by shedding more light on their potential. We must look to them not only as allies, but also as the competition, friendly as they might be. I believe we would all agree that competition is good for us. It is truly what makes the American form of business so engaging. Competition has made us all better professionals; it is the foundation for the entrepreneurial spirit as we know it. If truth be told, we revel in competition on the winning side, as compared to the alternative. Having now established this new breed of competitors, let’s review their agendas and the levels of control we have in this collaborative destiny.

Your Management Staff (greatest control)

Their competitive nature suggests you are competing for their intellectual potential. As managers, it is critical that we surround ourselves with the very best lieutenants available in the marketplace. A strong manager is one who knows his own weaknesses and aligns himself/herself with those who can best shore up shortcomings. A competitive environment must exist to meet our highest collective potential. We want those who will challenge the process, those who will create a competitive environment in determining the supreme conclusion. Anything less and we are surrounded by little competition, limited intellectual potential, and too much of a single voice. Management is a democracy, not a dictatorship.

One of the keys to managing this group is in creating an environment of loose controls, an independent identity, and significant personal responsibility. While this is the group where management may hold the potential for greatest control, this is also the group who essentially should require the least. This group by sheer proximity best assimilates your culture, your objectives, and your single mission. There should be no need to overstate your need for control in this arena. Your staff certainly comprehends where the final decisions are being made.

Your greatest challenge will be in creating an “all hands on deck” approach. There is nothing worse than a key member of management sending mixed signals with regards to product introduction, policies, or their collective agenda. The creative process must be an open forum, one that respects the input and conclusions of all participants, because once the missile has been launched, there can be no turning back. Each player must be in sync for the target, any target, to be reached. Post launch contention is a symptom of dysfunctional management.

Sales Partners (limited control)

Their competitive nature suggests you are competing for their time. Naturally, you are looking for individuals who will position and sell your agenda or products, often with little or no personal input or ownership on their part. These folks are generally an independent lot who have been asked to be your soldiers, to simply buy in and “blindly” promote your objectives. With most professional sales partners, strategic business evaluations are being made every day. They have the ability and street savvy to assess your initiative expeditiously. If you have indeed missed the mark, they are not about to hang around long enough to participate in your failure.

This is the nature and system of sales. Any manager who suggests that they would survive in any other model or sales agenda is not living in the real world. In creating an environment for success, management must provide its soldiers with the tools, and all possible weapons, for success. Poorly conceived introductions, poorly prepared execution, let alone bad timing, will send your soldiers into mutiny. This is why we, as managers, are effectively competing for their time. When that lid to their trunk opens up, a decision is made multiple times each and every day as to where their allegiances, and most lethal ammunition, lies.

Your Retail Customers (much less control)

Their competitive nature suggests you are competing for their space. While loyalties and business relationships continue to exist today, when it comes down to running a business in the black or in the red, our retailers should never be considered colorblind. Those who are will eventually fail, regardless of our efforts or their loyalties. We must continually and consistently sustain performance in order to compete for their attention and space for our products.

If it’s not price, then it’s surely innovation and design that will capture their attention. Our retail customers are purely a “survival of the fittest” kind of crowd. Marketing of consumer products has created a whole new standard in recent years. Between the sale of products at cost clubs, big box retailers in many new categories, and on the Internet, retail is no place for the faint of heart. Our introductions must show empathy for this changing environment, and must be focused and targeted more than at any other time in the past. All too often, products with significant consumer potential never cut the mustard due to poor execution and a lackluster introduction into their established market. Unless shelf space is earned, we will simply never know just how “consumer worthy” our product’s potential truly is.

The Consumer (little or no control)

Their competitive nature suggests you are either competing for their convenience … or their spirit. While consumers are the group over which you hold the least amount of control, you still have more power over them than you do over your category competitors. There is about as much chance in predicting the consumers’ desires as there is in handicapping the ponies on a Saturday afternoon. If the ever-changing wishes and whims of the consumer could be accurately defined, none of us would have a job. Heck, they don’t even know what they want, so how are we supposed to position the target?

This is where it gets very interesting. When you think about it,
management, sales partners, and retailers are all banking on their own abilities to fully understand exactly what the consumer is willing to purchase, en mass. There are certainly indications, and educated guesses a plenty, but no one ever knows for certain. Over the years, focus groups, clinical trials, test marketing, and surveys have reduced the risk in the process. Yet, as often as not, by the time the product has hit the shelf, the fickle nature of consumers’ needs and desires has altered.

If price is not your position of strength in the marketplace, you must capture the interests of your consumer with their hearts. Why else would millions of people pay $7.00 for a piece of paper with a few words scribbled on it, and mail it for Mothers Day? There are certainly very creative and capable individuals who are gifted in this arena. When you find a good one, hold on very tight.

Management Staff, Sales Partners, Retail Customers, the Consumer; these are the competitors that deserve most of management’s attention, for they are the competitors where you may exercise at least some control in your destiny.

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2010. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL/INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM

Vol. LXX

Dear Manager,

I believe we have the tendency to view our competition in very definite terms, predominantly by specific product category. We keep an eye on it; we analyze and try to anticipate it, yet we always come back to the distinct reality that we hold little direct impact over these players’ efforts relating to our success or failure. I would suggest that this type of competitor, while certainly worth our attention, pales in comparison to the balance of the competition we must confront as a manager.

I have seen more companies fail over the past thirty years for lacking the understanding of this single factor than for any other perceptible reason. I would like to review the histories of two companies with whom I enjoyed significant and long-term relationships. Each company was held in very high regard in their industry; each of their annual sales approached thirty to fifty million dollars in their days of glory. For varied reasons, my relationships with these companies were cut short. In hindsight, this may have been good fortune, as each is no longer in business in their original form. Yet, even to this day I feel a sense of disappointment and frustration; a “How could they have messed this up?!” perspective.

Study #1

I began with Company #1 in its infancy. Through innovation, design, and strong sales management, they single handedly drove, expanded, and breathed exciting new life into an established product category. In the early and mid 80’s this company clearly, unequivocally, seemingly insurmountably, owned their strategic product category. This was a company that enjoyed sixty to seventy percent of the market share! Creative business judgments, market timing, and a bit of good fortune, smiled on this company simultaneously. I had never seen anything like it, and I probably never will.

The 90’s brought new and aggressive category competition but, more significantly, it brought a new management team to the company. The historical success of this company was so profound that new management took the potential of risk for granted. As the 90’s passed, the management team continued to rest on the laurels of the glory days of the 80’s. It was honestly heartbreaking to see a company that had formerly been so in tune with their market, show signs of losing its corporate sense of awareness.

When their market share began to slide, initiatives were implemented to revitalize their sagging sales. Unfortunately, these directives compromised the vested relationships with their customers, sales partners, and organizational image: their true “brand” in the marketplace. This company ultimately created an adversarial role with their sales teams that only served to alienate and perpetuate their downward spiral. I can best describe this attitude as one of “cultural arrogance.”

Once reality finally struck, they had lost all position of strength in the marketplace and the support of their valuable sales partnerships. It was simply a matter of time before all of their earlier tangible and intangible assets had been lost. Sadly, this former high flier filed for bankruptcy.

Study # 2

Similar to the first study, Company #2 was enjoying a near thirty-year history of consistent growth. In critical areas, this is a mirror image of our first study. As is most always true, innovation and design also put this company at the forefront of their category. The 90’s rewarded these efforts, establishing this company as one that could clearly execute and sustain a timely theme and trend. It was magic.

A licensing relationship opportunity also began to develop and evolve for this company. Before long, the license drove the category, a classic example of the tail wagging the dog. An explosion of growth followed that I have very rarely seen in this industry. Within two short years, this single theme accounted for over fifty percent of their sales volume. Just as the company saw early indications that the trend was beginning to decline, the company was sold.

New ownership, blinded by the theme’s record-high sales, continued to count on this trend to insure the company’s future value. Their product and marketing departments failed to meet prior standards of marketing genius and, within a year, the trend had passed and sales had fallen significantly.

Management panicked by hiring their own in-house sales force. Certainly greater control over their sales efforts would stem the tide and compensate for poor execution by management. Heavy investment of depleting resources into regional sales management and untested field sales personnel severely escalated training and sales operating costs. Within two years, this company was on the verge of taking its final breath.

What can be learned by the rise and fall of these two companies?

 Never take current levels of success for granted. “One hit wonders” are a dime a dozen in most industries.

 We are only as good as tomorrow’s best selling product and innovation in the marketplace. The only true value in today’s success is in its financial potential to recreate itself, and in the development of its own second generation.

 Establish sustaining and strong levels of communication between your marketing departments, customers, and field sales personnel. While their participation may have been limited at the front end, their guidance will be invaluable at the back end.

 Maintain a balance of control and resources to insure that if the market shifts, your risk is both defined and survivable.

 Accept full accountability that only sustainable product innovation holds the lifeline to future success. Professional sales partners can only enhance the sale of a strong product presentation. They cannot compensate for poor execution.

 In time of crisis, create an agenda that takes full advantage of your current wholesale and retail partnerships. Their clear interests are vested on your behalf, now is the time to call in the IOUs.

 Difficult times are the true test of management. Insure that you have your best “management foot” forward when it’s all on the line. As these studies suggest, ownership’s life and death is truly in their hands.

 If you are confident enough to risk your future on a single trend, then you had better be equally confident in your ability to identify and grab that next tiger by the tail.

We began with the topic of competition. While market conditions and management decisions played a significant role in the outcome of these two companies, neither of them was clearly taken out by significant category competition. They had but one competitor: themselves. Are we as managers so preoccupied with the evil outside competitor that we are ignoring the priorities within our control? In many cases, outside competition is a distraction acting as a placebo. The true poison pill is more often than not sitting right on our desk.

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2010. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL/INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM

Vol. LXVIII

Dear Manager,

Perhaps only a small number don’t fully understand this basic fundamental. Yet the takers of the world, looking for “somethin’ for nothin,’” seem to have affected many of our perspectives. I now find myself reluctant to ever ask for favors for fear that I will be perceived as a mooch. Once again, too bad.

Whenever possible in new relationships, I make the effort to discuss the individual needs of others prior to my own. Sharing an appreciation and sensitivity for another’s time and interests goes along way in establishing a beneficial relationship for all parties. I believe this can’t simply be implied; it must be verbally addressed specifically at this time in American Business.

CAN’T GO IT ALONE!

If we think of ourselves as an island, this is exactly what we will become. While I understand the value of networking in many industries, I wouldn’t say that it’s been one of my priorities in the past. Those who network certainly scratch each other’s backs, but it seems to be a scratch here and scratch there. It would be difficult for me to keep score, much less invest the time to be effective at it. I’m not discouraging this practice, as it has been very effective for many. It’s just not my gig.

I’ve always relied much more on my ability to evaluate and participate with a much smaller group of individuals. This is a group I protect, appreciate, and will not compromise. In this highly professional environment there are no sellers, there are no buyers, and there is no need to keep score. It is simply a relationship whose value is apparent to all parties, and whose members will come to the rescue at a moments notice, and without a second thought.

We all share in these types of personal and professional relationships. As we prepare our organizations for a new world order in business, these types of relationships have heightened in their value. To insure a healthy organization, these relationships will become our cornerstone. Yes, this is the foundation that will sustain us in the years to come.

REINVENTING THE WHEEL

I have a fairly simplistic vision of American Business: steaming locomotives on parallel tracks, all heading in the same direction, each solving their own and often identical issues. Each is paying for identical and redundant services and overhead, each financing the coal to support their ability to be The Engineer.

Certainly there can be value in an independent business structure to innovate and lay a path for others to follow. But how many resources could be conserved if at least a “like coalition” hopped on a single locomotive and created an efficient “Super Train.” I warned you that this was a fairly simplistic analogy!

What would the cost savings be? What could your resources be devoted to if they weren’t redundantly directed at reinventing the wheel? Just how much more powerful and profitable could you be if you began to “train pool?” Be it stubbornness or pure ego, I am convinced there is not near enough collaboration from the very top echelons of business to the very bottom of the food chain. To survive the new economy, much more will be required in this area of collaboration.

CREATING STRATEGIC ALLIANCES

More will be required, because business is changing so rapidly. The sheer costs to modernize, computerize, economize, and mobilize will tap many of our resources. Look at the bath the dot.com industry has endured in the 90’s. Talk about parallel tracks and redundant resource investment. Is that a train whistle I hear, or the sound of a vacuum draining resources and venture capital?

If we are going to survive and retain our leadership, we must do so in the form of strategic alliances. Obviously, these must be acquired with great care, mutual understanding and forethought. We certainly wouldn’t want to endure a head on collision! To proceed, some questions come to mind that must be answered not only with great care, but also with great candor.

 What are your greatest concerns for your company in the near and long term?

 What do you need to accomplish to address these concerns?

 What similarities and redundancies do you share with related companies? Are there needs similar to your own?

 What do you seriously need to accomplish, but are unable to dedicate the resources to?

 What position of strength do you admire in other companies or industries?

 What strengths do you have to offer in a collaborative and strategic alliance?

 What are your weaknesses that could be enhanced through this effort?

The final question is by far the most important. What individuals known or unknown, what companies known or unknown, what industries known or unknown would gain benefit or might need to collaborate in this strategic alliance?

What areas of business might benefit from this collaboration? The list seems endless dependant on the common needs of its participants. Areas that initially come to mind include: web site development, computer hardware and software, data entry, payroll, accounting, group purchasing, shared infrastructure, cloud computing, product design and development, advertising, trade shows and product promotions, to name just a few. As compared to purchasing these services independently, economies of scale impact favorably in each of these areas of investment.

Now that you have your game plan and model, it’s time to set out to find the individuals with shared values to form these alliances. You have a lot to offer, the mutual benefit is established; you are there to assist them in exchange for their assistance. You have the concept, the product and the team to sell from a distinct position of strength!

The leaders of American Business take great pride in their ability to out think, out maneuver, and outperform one another. It is time to put egos aside and use the collective resources that only an alliance and collaborative effort can provide. We all have powerful strengths and weaknesses. The power of acting as one is formidable.

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2010. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL/INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM

Vol. LXVII

Dear Manager,

I continue to see evidence of less than stellar performance. With all of the discussions regarding its importance, and the clear and obvious need, why are we still having this conversation? Could it be a conspiracy? While kidding, there are times when even this doesn’t seem too far-fetched!

In my review of many institutions and corporations, I have come to the conclusion that many are in total darkness with regards to their ultimate customer. While they may indeed “talk the talk” with their management and shareholders, in reality they simply don’t want to allocate the resources to provide effective customer service. In many instances they are not only getting away with it, they are flourishing in this environment.

This is where it begins to get scary. These companies and industries, directly or indirectly, have come to the conclusion by their actions (or lack of actions) that they simply no longer have to care about true customer service! You must understand that I’m becoming a generalist in this view, but it’s too often true. How is this possible? Let’s look at examples where this may be the case, then examine the corresponding impact on our priorities and perspectives on this topic.

I believe it all begins with a mentality established years ago by our utility companies. While their monopoly is now in transition, over a period of years their approach to customers was to provide service “on their terms.” Effectively, they owned us as a customer; the rules of supply and demand provided very few options for the consumer.

Our only position of strength was with the regulatory commissions. And how many of us have contacted this “watch dog” recently, let alone in our lifetime? The only customers that the utilities had to please at a very personal level were these regulators. Have you ever tried to work out what should be a simple problem with a utility company? We have evolved from being a customer to simply being a user.

Users and Simply Being Used

As we look beyond utilities, let’s focus a bit closer to home by looking at companies and institutions that make significant impact in our lives, yet have no monopolistic grip on their users. This type of company, including banks, mortgage companies and insurance companies, relies on the initial contact and sale to develop long-standing and “convenient” relationships.

Certainly there’s very heavy competition in each of these areas. Yet for most of us, it would require one of these institutions to hit us over the head with a ball peen hammer to bother to make a change. We are simply too busy to worry about these seemingly mundane aspects of our daily lives. Sign me up and let me forget about it. This is exactly what these types of companies are banking on … mortgaged against and insured upon!

Once you’ve signed up, have you noticed how difficult it is to get their attention? Their attitude can be one of superiority, with very clear rules, policies and hoops to jump through. Have you noticed how few bankers actually reside in the local branch of the larger banking institutions? Don’t dare ask for service or, God forbid, a personal discussion with the individual approving the loan. We have seen steady increase in the number of independent community banks in our region. Their success and growth in the market place has been significant because they provide service and personal contact.

We have all tried to contact a major bank or our mortgage and insurance companies by phone. With fifty layers of options to choose from, the hope is that you will figure out your own problem long before you have figured out their phone system. It’s very simple: if the process is difficult enough for our customers, they will simply quit calling to pester us.

These industries and others rely heavily on the initial sale, with little or no responsibility after the initial conquest. They rely on actuaries that determine they will lose only a minor percentage of their customers regardless of their customer service efforts. You and I become no more than an annual annuity for these institutions.

The Difference Between “The Need” and “The Nod”

I feel these major institutions have skewed our perceptions on common sense and simple courtesy with regards to ones sense of priority to the customer. Once again, they simply don’t have to in most cases. As long as we get an occasional “nod” we will accept their terms of sale. This personal convenience quotient holds significant power in our behavior.

The problems begin when this mentality and acceptance begins to seep into more conventional business and personal relationships. In a recent conversation with a doctor, he was discussing how wonderful his profession “used to be.” He can no longer look at his patients as clients. His true customers are the insurance companies, HMO’S and Medicare, as they hold the purse strings to 80% of his income. These institutions effectively control his earnings, and the decisions he must make regarding patient time in the hospital, prescriptions, rehabilitation and convalescence. Second generation suggest these controls affect staffing, time with patients, further education, facilities and state of the art equipment.

I recently heard a radio commercial that caught my interest. An auto body shop was extolling its ability to truly meet their customers’ needs. They suggested that studies have shown four out of five consumers do not recognize whether their auto bodywork has been properly executed. Combine this with the fact that once again 80% of the repairs are paid by insurance companies. Who is the customer? Will these repairs return your vehicle to its original condition, or simply repair it to the standards established by the insurance companies? I’m afraid to even touch the analogy regarding auto repair and human “bodywork”…

In the consumer products industry, this customer service mind set simply won’t due. With most of our products, our customers make a conscious decision, whether or not we have cut the mustard. Instead of a placating NOD, we must earn our stripes, because we NEED our customers.

So why do we continue the need for consistent conversations with our staff regarding proactive customer service? Because we are fighting a culture that is confronted daily with something much, much less. I believe this “user mentality” continues to compete and conflict with our own efforts to establish a very high standard of customer service.

There can never be enough discussions within our companies about very personal customer service. While this relationship has become blurred by other industries, it is our paramount job to bring crystal clarity with regards to its priority, daily. Our lifeline is in the hands of our customers.

I recently saw a television ad for Ameritrade with the byline: “Customer service doesn’t begin until someone answers the phone.”

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2010. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL/INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM