Category Archives: Consulting

April 17, 2014 · 10:12 am

In The Zone

We all do complicated things effortlessly.

If you can think back to when you were learning to drive a car, for example, it seemed incredibly difficult.  You thought about how hard to push the pedals.  You had to remember to turn on your blinker and to look in the mirrors.  Coordinating your brain to hold the wheel steady while looking away from the view in front of you was a challenge.   Yep, driving a car is pretty complicated and yet most of us who have been doing so for any period of time do it effortlessly.

Athletes get to a similar place.  You’ve probably read some post-game interview in which an athlete described being “in the zone.”  That’s a state of mind where they feel as if everything has slowed down.  Their focus became incredible and all external noise seemed to vanish.  They feel invincible.  Psychologists call this “flow” and as Wikipedia states:

Flow theory postulates three conditions that have to be met to achieve a flow state:

  1. One must be involved in an activity with a clear set of goals and progress. This adds direction and structure to the task.[11]
  2. The task at hand must have clear and immediate feedback. This helps the person negotiate any changing demands and allows him or her to adjust his or her performance to maintain the flow state.[11]
  3. One must have a good balance between the perceived challenges of the task at hand and his or her own perceived skills. One must have confidence in one’s ability to complete the task at hand.[11]

This, of course, isn’t limited to athletics.  In fact, it’s a pretty good roadmap for business success too.  Clear goals, losing track of time due to your total focus on the moment, intense focus on the task you’re doing, and constant, real-time feedback that allows you to adjust your game plan all are places where good businesspeople live.

I’ll add one caveat.  While getting to, and living in, “the zone” is a wonderful thing, we all need to venture out of that zone every so often.  Maybe it’s more about distinguishing a comfort zone from a flow zone.  I’m way less fond of the former than I am the latter.  Have you ever been in that zone?  Does this make sense?

 

 

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April 15, 2014 · 8:27 am

The Bottom Line

A business thought for Tax Day found in some dance music!  If you were following music as the punk movement hit in the late 1970’s, you were quite aware of The Clash. You might have even shed a tear when Mick Jones, one of the guitar players and a key songwriter, was kicked out of the band. This TunesDay we’ll use a song from his next project – Big Audio Dynamite – as our jumping off point to discuss business. It’s called The Bottom Line and it’s a fun listen if only for the wacky, mid-1980’s video:

This lyric raises our business thought:

A dance to the tune of economic decline
Is when you do the bottom line
Nagging questions always remain
Why did it happen and who was to blame?

It always amazes me how many smart people forget that “margin” is at least as important as “revenue.”  They spend a lot of time generating revenue from unprofitable activities while ignoring a part of the business that might have a high margin although the revenues aren’t much.  I thought we had all learned about that sort of thing in the dot-com bubble long ago (internet years are like dog years – the intervening 15 years are like a century in real-time).

It takes a fair amount of courage to abandon unprofitable customers or segments of your business which are generating decent revenue.  Revenue is always just one aspect of the business story.  Cash flow and profit are two others which are far more important.  Sure, revenue is the fuel that makes the business engine go, but a leaky gas line almost always results in disaster.

There is also the mistake some folks make in thinking about margin.  They forget that in addition to the gross margin (basically the cost to the customer minus the cost to you) there are other things that are “indirect” costs such as advertising and overhead that should be factored in to prevent the business from losing money on many sales.  Of course I see the need to scale – to build a customer base and generate cash flow – but if it’s not done in a sustainable manner, it’s just an exercise in futility.

The “gross revenue” line is where the head of sales lives.  The bottom line is where great business people reside.  Where are you?

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April 3, 2014 · 11:51 am

You’re Already Behind

The IBM folks have been surveying Chief Marketing Officers for quite some time and the latest results of that survey have come out.

Image representing IBM as depicted in CrunchBase

Image via CrunchBase

You can read the study yourself by clicking through but I’d like to point out one data point that really got my attention.  It was this:

It’s questionable whether CMOs are moving fast enough to keep up with the speed at which the commercial landscape is evolving, or whether they need something akin to a turbo boost…The situation is, if anything, worse than it was when we completed our last Global CMO Study.  In 2011, 71 percent of the CMOs we interviewed told us they felt underprepared to deal with the data explosion. Today, a full 82 percent feel that way. Two-thirds of all CMOs also report that they’re not ready to cope with social media, which is only marginally less than was the case three years ago.

This is scary.  It used to be that marketers would pay for tons of research better to understand their customers.  The dream was a 360 degree view of the customer’s purchasing and media habits.  Today, that dream is very viable – it’s within a marketers grasp – but only if the marketers have structured their organizations and daily routines to include analytics.  I’m not just talking about web analytics but also point of sale information, real-time data from social media, and any other font of information which can be integrated to round out that view.  That seems to me to be common sense and yet less than a fifth of CMO’s feel ready to deal with all of this.  Put that in the context of over two-thirds of them acknowledging that digital channels will play a bigger role in their interactions with customers in the next three to five years and one concludes that the vast majority of companies are far behind where they need to be.

I’m not sure why this is.  Maybe it’s an investment issue – it’s hard to find dollars to invest on new things in almost every organization.  It might be a priority issue but the folks in charge seem to acknowledge the need.  Maybe it’s the life-cycle of the CMO, which has always been one of the shortest tenured positions in the “C” suite.  No matter what it is, it’s a tremendous opportunity for anyone who can get their company’s stuff together and leap ahead of their competitors.  Will that be you?

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