Week 1 Strategy Series | Refined Focus for Profit Clarity - Who am I serving today?
FOUR QUADRANTS OF FOCUS REFINES OUR PROFIT CLARITY
Strategy: Fly Forward Faster starts with understanding where your future growth is most likely to be. We undertake research to achieve a sharp and accurate picture of the people you do business with today, and the people you need to do business with in the future.
In the past, many businesses could ‘fly blind’ and still make a decent income. That world has changed. We absolutely need to know who and what keeps us in business, and how the customer landscape may alter so we can adapt.
Four Quadrants of Focus
I group my Foster Future Growth research into four focused quadrants:
People on the inside include customers, members, staff, the hierarchy of the organisation and boards or investors.
People on the outside may be the local population, other businesses, society and the rest of the world.
Activity inside my business is the internal operating environment. This includes your business’ products and services as well as processes and procedures.
Activity outside my business is the local trading environment, industry shifts and megatrends.
You can spend a lot of time analysing your lists and data, and getting familiar with reading the facts. Be patient and try new ways to look at things to alter your perspective. Some ways will be a goldmine while others won’t. Importantly, you will start to know the shape of your list and your market, and its distinct ebbs and flows.
Let’s look at how you could do this.
QUADRANT 1 | PEOPLE ON THE INSIDE
One of the biggest mistakes community and business leaders make is that they don’t know who is on their list.
Knowing how to collect and use customer information is valuable, and can lead the way to greater income. When you conduct business with your customer, this is an opportunity that you can use to learn more about them and their purchasing habits.
Who is on your list today is a compelling place to start working out who is going to be there tomorrow. Analysing your list is an example of what is technically called primary research.
Primary research involves collecting information about YOUR business. It is usually analysed through either quantitative (numerical) analysis, or qualitative (non-numerical) analysis.
Let me tell you that EVERY successful business person knows their list, the ‘shape’ of their list and why they have the people or businesses on that list. When I go into a consulting job, the first thing I ask for is THE LIST. I start by understanding the bedrock of your business and building from there.
Looking at the details of your list a number of different ways allows us to better understand our customers for three simple reasons:
RETENTION – Selling more to existing customers is around 15 times cheaper than marketing for new ones
LIKE ATTRACTS LIKE - You can understand what products and services your customers like and attract more of the same kind of people
GAPS - You can see groups of customers you may be missing.
The only right way to divide up your list is the way that will bring you insight.
Data quality means the consistency and order which details are captured in your list. Many of you will need to spend time ‘cleaning’ your information, especially if there are quite a few people who input information. For example, the (Australian) suburb of Wollongong may be incorrectly spelt as Woolongong, Woollongon or Wollingong. This will affect a sort and count on people who live or work in this area.
You may need to abide by privacy laws of your country. The Australian Privacy Principles (APPs) are contained in the Privacy Act 1988. These principles outline how most Australian businesses must handle, use and manage personal information. Check these out at www.oaic.gov.au or search online.
Quantitative | Numerical
Quantitative information uses mathematical measurements. Using the percentages and graphs with your customer list in the next section is an example of qualitative information.
There are many programs that can present reports on your list. However, all you need to get a start is Excel. Many online programs use Excel-type spreadsheets as their fundamental building blocks. Plus, I’m betting you have Excel or similar right there on your computer today. This means you can get started analysing your list without further expense.
From Excel, make graphs so data can be easily understood in a visual way. For example, chart the gender and age distribution of your customers, and where customers live or work.
Common presentations of data include:
Parameters (e.g. average, central point)
Qualitative | Words
Qualitative research helps us understand the behaviour of customers – the why and how of decision making. It deals with descriptions and observations, and is difficult to measure. There are many ways to collect this information.
Have conversations with customers and write down any interesting ‘pain points’ you hear. These are great ideas for products and services that your market wants.
Professional mystery shoppers have prompt questions that help them look at different aspects of your business without your emotional subjectivity or familiarity-blindness, like customer service, ambience, floor layout, value for money and many more. These can be analysed, themes emerge and action can be taken.
Ask a patron to complete a month long diary of actions and decisions. I was once asked to do this so the researcher could look at my TV watching versus radio listening patterns.
Use mystery shoppers to shadow patrons (without being creepy!). Watch how they make buying decisions. For example, at what stage in the buyer’s journey do they make an impulse buy?
Structured and unstructured interviews
Surveys in person or online are always popular. Focus groups are a little more unstructured and can be filmed for later analysis.
You may have incident reports or other business performance information that you can read.
Insight | The Golden Intersection
When you combine these three elements – your customer list, qualitative information and quantitative information, you create the golden intersection. Here are your secrets to foster future growth, and it will be different for every business. This is where you can understand the people you serve, what product you serve best and which product makes you money.
Other People on the Inside
Other people on the inside include your current staff and board of directors.
The future success of your business is directly proportional to the quality of the people that you can recruit, grow and keep on your team.
However, only a tiny, tiny percentage of CEOs and boards take this idea seriously and look at talent acquisition, talent development and talent retention as a strategic objective for both the board and the CEO. It is essential to have a deep bench of talent in every level of the organisation to run a successful business.
The organisational chart tells us how work is generally divided and who makes decisions in key areas. When reviewing the organisational chart, it is an interesting exercise to capture the way things get done and identify the influencers and politics of decision making.
Key strategies may be dependent on altering the leadership and relationship dynamics of the organisational hierarchy. You may find you need to make decisions to re-align the organisation to allow for the freer-flow of information, accountability and clearly delineate reporting lines. Some positions may be created while others disappear. You’ll be focused on organising a team who can action the plan.
Organisational charts carry emotional weight, because it defines reporting relationships that people might love or hate. If changes need to be made in the organisational chart to fly forward faster, the current situation needs to be understood, otherwise the power dynamic tends to revert to its earlier equilibrium.
Performance and skills
The annual performance review is a good opportunity to collect data on the people who hold key management positions on their growing skills, and career goals and desires.
Employees should be encouraged to continue to learn and grow in their positions to continually add value to your business. The task list given to a new employee on Day-1 should be very different to the task list expectation on Day-1800.
The end result is matching talent, skills and goals with the business’ strategic initiatives, or knowing where you may need to re-orientate and recruit new managers.
"Look around your organisation and find your lowest performing board member, manager or employee. Realise that these are the people who set the standard for acceptable performance for your entire organisation." (John Spence)
Without a talented board who can collaborate well, you won’t keep an amazingly talented CEO. The CEO will advance to a better-led board. Without an amazingly talented CEO, you won’t keep talented management and staff. Without talented management and staff, you won’t have customers who lavish praise (and patronage) on your organisation. Without great customers, your organisation will probably fail.
Your best people are your best asset, and the pay-back on great leadership where the big decisions are made – that’s on the board and management team – is immeasurable.
Understanding the leadership of yourself and management with go a long way in addressing power dynamics and motivations.
I approach leadership using the Everything DiSC method (Keith E. Ayres). It's designed to help you understand behaviour in the workplace, understand the behaviour of others and how to use this knowledge in different work situations.
Board of Directors
I address the Board of Directors in a separate book, Board Succession Planning. Leadership, skills, performance evaluation, and understanding director’s individual networks is critical.
Shayne Leslie | 0412 241 773 | email@example.com