Tag Archives: Strategic management

Grinding Your Own

It’s Foodie Friday and the topic is ground beef. I try, whenever possible, to grind my own beef and the thinking behind that is also thinking that can be used in business decision-making.

You can walk into any supermarket and purchase ground beef. In fact, you can be very specific about chuck vs. sirloin, the percentage of fat in the mix and often grass-fed vs. non. That’s great in my mind when you are making chili or meatballs or some other dish requiring that the beef cooks for quite a while. For burgers, however, I’m grinding my own. I’ll generally grind a mix of chuck, brisket, and short rib and I’ll usually grind some parboiled bacon into the meat both for fat and for flavor. The biggest reason I take the time to do this, however, isn’t the flavor. It’s food safety. I like to eat my burgers on the rare side and ground beef from a store is generally not safe to eat unless it’s cooked more than I like it to be. I know what’s in my mix and that it’s safe to eat when cooked to less than 165 degrees.

Is it a pain to clean the grinder? Yes. Does it take more time than just opening a package from the store? Of course. But the results are much better and exactly what I want even if it costs a bit more and take more time. That’s exactly the process any business goes through when making a “build vs. buy” decision. Let me run you through the steps.

First, you need to validate that you actually need the technology you’re considering. In burger terms, I’m hungry so I need food. I have a legitimate need. In considering tech, you need to figure out if you’re finding a solution without a problem existing. Next, you need to pull together core business requirements. My burger must be safe to eat when rare, it must hold together on a grill, etc. You need to involve anyone whose business is affected by the proposed tech to be sure all constituents weigh in on requirements.

The technical architecture requirements come next. If you’re looking outside, can the product fit in with your existing infrastructure? Does it meet whatever standards your business has already? It’s only after the above steps have been taken that you can start to evaluate build vs. buy. In my case, I have a need, my requirements are clear, I’ve asked my dinner guests if they like burgers, how they want them cooked, and what they put on them. I figured out I’m building the beef but buying the rolls, mayo, pickles, onions, and tomatoes even though I could also build them.

The final steps in the evaluation concern costs and support but you get the point. Some managers start evaluation solutions before they pull together requirements and the overview of the environment in which the solution will live. While it was an easy decision for me to grind my own beef, few business decisions are as easy and require planning and forethought. Make sense?

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Filed under Consulting, food

Taking The Beaten Path

One of the questions that has come up often in my newish role as a franchise consultant has been why one should look to invest in a franchise to begin with rather than starting a business from scratch. After all, there are generally fairly substantial franchise fees associated with a franchise along with the other expenses one might expect when starting a business plus you usually have on-going royalties. You’ll still have to pay to incorporate, you still often need insurance, licenses, equipment, space, and people. Why incur the extra fees on top of the ordinary expenses? It’s a good question and I have what I think are some good answers. If you’re thinking of starting a business or maybe changing the nature of the business you’re running, here are my thoughts.

First, the biggest advantage of buying into a franchise is that it’s a business in a box. It’s a proven business model, one that comes with built-in support. Almost every franchise I work with has some form of training and on-going mentoring. I think about that in terms of the businesses that have hired me to consult in the past. Much of what I did would have been covered by that sort of support, negating the need for an outside consultant. The franchise will have research and the business results of all the other franchisees. That’s invaluable and beats the heck out of going it alone.

Another consequence of that is you’ll probably experience much faster growth. You won’t be spending time formulating a business plan. Instead, you’ll be getting trained and executing one that has been time-tested. Something as simple as logo design, which can take time and several iterations, is not really a concern. You’ll generally be presented with operations manuals and marketing materials. Your time to market is greatly decreased.

One thing that is much easier is financing your business. Franchises are less risky in lenders’ minds since they’re known brands and proven businesses. While banks aren’t the best source for franchise ending, there are many lenders who specialize in that (I work with 6 of them) and SBA loans are easier to come by as well. Finally, your potential customers will already know who you are. Most franchises have good brand recognition, and even those that don’t have a current local presence can often benefit from being seen as part of a bigger entity.

The Bureau of Labor Statistics says that roughly 1 in 5 of all businesses in the U.S. close after the first two years of operation and a little over a third shut their doors after four years. You can beat those odds by taking the beaten path and investing the franchise fee to gain the above benefits. In my mind, and why I added this to my consulting portfolio, that investment yields as good or better returns than blazing your own new trail. What do you think?

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The One True Holiday

It’s Foodie Friday and it’s the eve of the annual national holiday called the Super Bowl. It’s America’s only true national holiday in my book. Oh sure – most Americans celebrate Memorial Day, July 4th, Labor Day and Veteran’s Day and even Thanksgiving, but none of those have the vast majority of the country focused on exactly the same thing at the same time. Only the Super Bowl does that.

Along with the game goes the food. Or, rather, THE FOOD, since inevitably there is a lot of it. Even those years in which I’ve watched the game by myself rather than at a party or a bar, I’ve managed to have copious amounts of generally not very healthy food by my side. Try to find a food site without a Super Bowl menu on it. Try to find a bar or a non-fine dining place that isn’t throwing a party.

Here was my take 8 years ago. Nothing has changed off the field (we won’t go into how the on-field experience has changed):

The Super Bowl is unlike any other sporting event from just about any perspective.  It’s watched by more people and is even covered by media people who wouldn’t know an H-back from Preparation H.  Hundreds of marketers, both authorized and unauthorized, try to tie in with “The Big Game” (for you ambushers) whether they’re selling food, TV’s, or anything else along the durable to non-durable scale.

So what do you do as a marketer? Do you try and fight city hall and run your own campaign not related to The Big Game? Do you pay the NFL’s or the broadcaster’s price tag (if your category is available) and use the marks or even just buy TV time in or around the game? Do you just stay quiet and begin your Valentine’s Day promotion after the game?

Tough question. If you’re in the food business, Super Bowl Sunday is one of the most popular takeout days of the year (1 in 7 Americans order takeout food for the game!). A third of Americans consume some sort of dip. Are you staffed properly if you’re a restaurant? Have you ordered extra dip and sour cream if you’re a market? If you’re not a food business, you need to account for this holiday – especially this holiday – in your marketing and content plans. Unlike any other sports championship, people watch The Super Bowl even when they don’t have a favorite team playing. They actually watch the ads. They generally participate in word of mouth and social media conversations. It is America’s holiday and if you market behind the others, maybe you need, as it says on many pizza boxes, to try the best since you’ve tried the rest. Make sense?

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Filed under food, sports business, What's Going On

Fixing The Food

This Foodie Friday, our subject is a bit more somber than usual. It’s a report put out by The Lancet, which is a weekly peer-reviewed general medical journal. It is among the world’s oldest, most prestigious, and best known general medical journals, according to Wikipedia. The subject of the report is what healthy diets from sustainable food systems should look like. Unfortunately, where the world is at the moment is neither healthy nor sustainable.

If you’re so inclined, you can read the entire report here. It’s eye-opening. As the introduction says:

Civilization is in crisis. We can no longer feed our population a healthy diet while balancing planetary resources. For the first time in 200000 years of human history, we are severely out of synchronization with the planet and nature. This crisis is accelerating, stretching Earth to its limits, and threatening human and other species’ sustained existence.

Not good right? We can discuss the causes (are the excess carbon emissions generated from red meat production inherent in the process or just in having to move the meat such great distances?) but we really do need to acknowledge that there is a problem and something needs to change. And that’s really the business point for anyone engaged in business.

Not only do markets change but circumstances do as well. I’m sure that it didn’t start out this way and there is a lot of cultural history behind it, but the report says people in North America eat more than six times the recommended amount of red meat, while people in South Asia eat half of what they should. Of course, shipping red meat to South Asia causes carbon emissions as well as provides a product that might not be affordable. What’s the solution? That’s for people way smarter than me.

Another example of changing circumstances. We’ve all seen businesses fail or have to move because of a huge increase in rent. That’s not a changed market and the business might be selling every bit as much as it was before. But short of raising prices, thereby possibly killing sales and destroying a customer base, what’s the solution? Usually, it’s to move and hope your customers move with you.

We can’t ignore things beyond the market. People are hungry – nearly 1 billion people are going hungry while 2 billion people are eating too much. There is demand for food. It’s a healthy market. But ignoring the circumstances that the business of creating it is destroying humans’ long-term prospects is short-sighted, something none of us in business can afford to be, right?

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Filed under food, Reality checks, What's Going On

How Your Dog Food Tastes

I saw something in an article this morning that had me nodding my head in agreement and I thought it was something that all of us should think about. It was a piece about how the growth of marketing technology companies has stalled and it gave as a reason this:

There is a long list of sales and marketing tech vendors that have had their growth stalled for a number of reasons: failure to find a use case with broad market appeal, product based on a feature, or quite simply couldn’t execute.While these companies might have received more funding two or three years ago, in today’s climate VCs are not replenishing their offers. Today, there are big rounds for those with momentum and a big story, or no funding for those that don’t.

In other words, many of these companies have been able to attract a client base but the results those clients were expecting haven’t been there. That’s a critical thought when you’re making promises, isn’t it? I can’t begin to count the number of tech companies I’ve spoken with over the years that made huge promises but failed to deliver.

I wrote about this several years ago. Way back in 2011, I wrote:

I can’t tell you how many presentations I’ve sat through for companies that were going to grow my revenues 10x but wouldn’t take 90% of the first year’s incremental revenues as a fee.  Big red flag.  Then there were the companies who promised great service but wouldn’t sign service level agreements that legally obligated them to provide that great service.

So at the risk of repeating myself, I’m going to repeat myself (this time from 2016):

Nothing like eating your own dog food, right? But that’s a critical part of serving our customers well and each of us needs to do that on a regular basis. When was the last time you tried to go through checkout on your own online store? How was the experience? How about trying to return what you purchased or put in a call to your customer service department? My guess is that none of your top managers have done any of those things in a while.

You can only grow so big if the results aren’t there. If you haven’t explored those results with your customers along with the time, effort, and expense it took them to achieve those results, you’re not doing your job. More importantly, you’re setting your growth curve on a downward course because nothing in business happens in a vacuum these days. People talk.

One thing I’ve learned in consulting on franchises is the importance of what we call validating the franchise. It’s when a prospective owner speaks with current owners to find out if the representations made by the franchisor are accurate and complete. It’s kind of like checking references when you hire except the FTC requires the franchisors to disclose the names and phone numbers of all their current franchisees so you can’t control with whom a candidate speaks. That means the results have to be there, pretty much across the board.

When was the last time you spoke to your customers about their results from using your product or service? If you have to think about it, it has probably been too long. Food for thought?

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Filed under Consulting, Helpful Hints

The Right Stuff

It’s Foodie Friday and this week it’s tool time. As I mentioned in some previous posts, I’m in the process of moving, which means that a lot of stuff is packed up and not readily available for cooking. You never think that you’ll use some kitchen-related item (I won’t be ricing potatoes any time soon, will I? Pack the ricer!) right up until you need it. Then comes the internal debate assessing whether to unpack it (assuming you can find it), try to make do with some similar tool, or cook something else altogether.

One of my absolute mantras is that one needs to have the right tool for a job. You might think that throwing a smoothie into a food processor will work (because you packed the blender), but you’re wrong. Not only does it not yield a respectable smoothie but it makes a horrible mess. Then there is trying to make a roux with a fork instead of a whisk because, well you know where the whisk is, and it’s not in the kitchen.

Another non-food example. I just spent a day and a half trying to wire cat5 plugs around the new house. A buddy of mine had most of the tools to do this save for a punch tool to seat the wires properly. We tried to punch them down using everything from a tiny screwdriver to a pen. None of the connections were solid. An hour back and forth to buy the right tool and suddenly we were flying through the job. The right tool makes all the difference. Was $50 expensive to get it? Not in light of what it would have cost to hire someone to do the job.

You should remember that when you’re running your business. The right tools – and I include the right people in that category – makes all the difference. Spend the extra buck on software that works for you and don’t try to shoehorn your business into some freeware that really isn’t right. Sure, there are a lot of very good free tools out there but most of them begin to charge you as you reach the enterprise level. Make sure they’re worth paying for before you get too embedded in their platform.

Finally, spend more on good people that are right for your company and right for the job. Having a fantastic free design tool is great but you need someone that knows how to use it or the results will look amateurish.

Having the right tool makes an excellent finished product much easier to obtain. Using a shoe to drive a nail rarely works, don’t you think?

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Filed under Consulting, food, Helpful Hints

TheYear Of You

So here we are again at the start of a new year. If you haven’t already started to implement your resolutions for the year, let me humbly offer a suggestion that should be a part of them. Make this the year of “you.” To be clear, I’m not suggesting that it be a year of self-centered egomania. In fact, I’m suggesting quite the opposite, and I’m doing so because it will improve your business. As a bonus, it may also improve your non-work life.

How does one go about making it the year of “you?” Start by this: quit saying “I.” Stop thinking about your business’ bottom line and focus on solving your customers’ problems. Don’t put out messages about what people can buy from you. That’s selfish. Focus on how what you’re selling helps. Ask “how can I help you” and not “how can you help my bottom line.”

Let me show you how the “you” focus works because it is something I try to practice here in this space. My focus is on what I hope is important to you. I try to have an outward focus. If all I did was blabber on about what’s important to me, we’d be indulging in a discussion of the new rules of golf or my incompetence at beating certain video games. That doesn’t help you at all and I suspect after 10 years of that my readership would be down to just me. By writing this, which takes time and effort, I’m hoping to grow both the audience and my credibility and I don’t ask for anything in return. OK, once in a while I will remind you that I consult and if you want to look at franchise opportunities, I want to help you do that, but that’s about as far as it goes.

It goes beyond a customer focus. Suppose you’re going after a new job or a new client. Your best strategy is to focus on the needs of your potential employer and client instead of plugging your own skills. Nobody cares about your craft if you fail to make it relevant to them.  You have to change your pitch to suit your audience. I can’t tell you how many pitch meetings I’ve sat through that were generic and which failed to address MY problem as a potential customer or partner. Generally, no sale.

Don’t talk about what you do. Ask yourself if you were your potential client or listener how your service is relevant to them. Don’t be the one at the party who talks only about themselves. Don’t ask “how do YOU like MY outfit?” Ask “how can I help YOU?” If we all do that this year, it will be quite a good year indeed don’t you think?

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Filed under Consulting, Helpful Hints