A Method for Growth in Times of Uncertainty

Let me share with you a tried and true approach to seizing the day during times of market uncertainty.

OK, now what? You clamped down on all hiring, spending and growth initiatives due to all the pessimistic economic reports, the fiscal cliff, healthcare reform, the Mayan calendar etc. and you have now entered a new period unscathed; what should be your strategy?

  1. Be optimistic – Uncertainty is often the new normal and  markets often continue to gyrate, however, there are often growth opportunities here and in emerging markets; therefore, THERE IS NO BETTER TIME THAN THE PRESENT TO TAKE A CALCULATED RISK.
  2. Revisit your customers – the 80/20 rule is real. Eighty percent of your business is bought by twenty percent of your customers. When was the last time you sat down with each one at their office? How are they managing in the new economy? Do they have any suggestions for product or service improvements?
  3. Complete a new SWOT analysis – The markets invariably change. It is essential to re-calibrate regularly your company’s strengths, weaknesses, opportunities and threats, to gain market insight and improve upon perceptions of your business and product offering.
  4. Get aggressive – Go after top-line growth opportunities. Research new markets, new strategic relationships, new product expansions that can grow your near-term revenues.
  5. Plan your cash-flows – How much working capital do you need to fund your existing business? How much cash-flow do you need to launch? Can you bootstrap with existing free cash-flow? Can you improve AR and inventory turn ratios?
  6. Set your targets higher – It’s time to communicate and challenge your whole organization to new revenue, margin and growth targets managed with a dashboard. Where do you want to be next year? Create stretch goals that are hard but achievable and make the reward worthwhile.
  7. Invest in marketing analytics – Sales has always owned the hard numbers, but with new analytical software offered to small and mid-market, marketing can now be attached to the sales organization by providing measurable qualified leads for sales to close.
  8. Hire or contract creative talent – You need “out of the box” thinkers to shake-up the status quo and infuse new innovation to your product development.
  9. Hire or contract a C-level rainmaker – There is no better person right now who can better help create new opportunities for your company. C-level rainmakers bring a wealth of contacts and strategic relationships to jump start new revenues and customers. And don’t worry. If the right hire, they will always pay for their efforts.
  10. Tap into your customer base – Your customers want you to exceed and will undoubtedly provide invaluable information on current buying trends. Offer to those closest a seat in unclassified product development meetings.

Carpe Diem.

Decide to Grow…A Case for Optimism

Being a native of New England and having spent many summer days on the coast of Maine, I have experienced a phenomenon called by locals as a “Sea Turn.” It’s a back door cold front that comes barreling down the coast, causing the temperature to drop sometimes twenty degrees in five minutes with the winds shifting from the south to north, northeast. It’s obviously most dramatic on a blazing hot summer day, and you can see it coming if you’re on or near the water by the dramatic shift in the ocean swells, chop, hence, a “Sea Turn.” Lots of fun if you also happen to be on a sailboat!

Over the years, I have seen many sea turns come and go in our economy. I have been on different “boats” during those times and weathered those changes and in many cases capitalized on those changes. How? I was navigating with an attitude of optimism and readiness, determined to reach my destination even in unpredicatable conditions.

Cautious optimism is now the new normal but with a slight nuance. It is optimism with an attitude and it’s coming on strong. I see it as a major force of will, determination, to launch new brands, new products, grow, regardless of the conditions. Capitalism.

A New Optimism with an Attitude… Capitalism!

Cautious optimism is now the new normal but with a slight nuance. It is optimism with an attitude and it’s coming on strong. I see it as a major force of will, determination, to launch new brands, new products, grow, regardless of the conditions. Capitalism. A crazy question as you reflect and think ahead: What opportunities are lost by not taking risks? Historically, real asset growth is captured by those who carefully plan and skillfully launch their new ventures in spite of all the naysayers.

“True entrepreneurism is always in vogue”

Entrepreneurism is often a topic of discussion in all sectors of the economy.  One can see that just by the sheer number of new major business launches throughout the economy in any given season.

But how should one launch given the current conditions? Here are some universal principles in any season.

  1. speedGet your first revenues ASAP – Self-funding is no better way to validate your new launch in an existing business or in a new “free standing” new venture. It also proves real value to the current investor market plus giving you immediate feedback on every aspect of your business, targeted customers/buyers, along with new tactics needed to capture greater growth.
  2. know2Know your market – Far too often I am asked to prepare an investor presentation and proforma without an adequate understanding by the client of what the buying trends are in the targeted market. Market and competitive information is everywhere; assume nothing and be objective in your analysis in order to be successful in the execution of the GTM plan.
  3. planDo not disregard planning and testing your business model – I was once in a in a leadership role-playing workshop where the facilitator described an interesting fact about the results. She found that those groups who were exceptional in the exercise were those groups, who, when presented a problem, spent the majority of time analyzing/solving the problem before acting upon the solution. Those groups that tried to solve the problem immediately failed. The takeaway: Planning may be counterintuitive to those who like to work “by the seat of their pants,” but in most cases working before planning results in valuable time wasted.
  4. nimbleBe nimble in your launching strategy – Market changes are like the ocean, constant, with dramatic shifts at any time. Are you prepared for those changes? Have you included all international IP threats? Barriers to entry? Have you included the new norm in marketing & sales, business analytics etc.? Again, far too many times, I have seen great inventors/innovators not realize that they need an experienced manager to guide and scale the business while controlling the burn during this critical time of growth.

Need an Experienced Pilot?

A “Sea  Turn” of opportunity can show up any any time; are you ready? I learned very quickly in my first venture that having an experienced tactician onboard was my best investment. It may be exciting to be on the next wave of change, and for that matter, exciting to be on a sailboat when a sea-turn is heading your way, but eliminating the risk of capsizing or financial collapse is a highly prudent measure. I encourage you to consider engaging our firm or another experienced confidante to advise you in the launch of your new venture.  CARPE DIEM.

To inquire, call or write any time

Rich Hennessey, Managing Partner
T: 772.473.1439
Vero Beach, Florida

Successful Launches Don’t Just Happen

Up until the tragic loss of the Shuttle Challenger January 28, 1986 at 11:38EST, most Americans never would have ever considered a shuttle catastrophe. That day, America lost (7) astronauts, including our favorite school teacher from New Hampshire, Christa McAuliffe. It was also one of those few moments that at, exactly 11:38EST, America stood still in disbelief and completely stopped working. We were all shocked, including President Reagan, who he, and his wife, saw first-hand at the launch site in Florida. How could this happen? Who is responsible?

As a result of this disaster, NASA shutdown all shuttle launches, completing a detailed 33 month analysis of all procedures, processes and parts of the shuttle program to find out what the exact cause was with this horrific accident. It was found that the cause was “O-rings.” O-rings, a gasket used to seal the attachment between the booster rocket and the external fuel tank, failed, allowing high-pressured hot gas to get to the fuel 72 seconds into lift-off. The tanks and the shuttle exploded over the Atlantic Ocean off the east coast of Florida. It was also later found that some NASA engineers had warned of a possible failure with the O-rings because the rings had never been tested below 40 degrees Fahrenheit, much higher than the teens the launch crew was dealing with that unusually cold day in January 1986.

Unfortunately, our country has had a few more of those heart-stopping moments since that sunny, cold morning in Florida, including another shuttle catastrophe called Columbia in February 1, 1993.

What does this very sad example of a launch go so wrong compare with my business or product launch?

Unfortunately, although ours do not produce the tragic loss of life, all too often they produce the same failed results. In fact, I would side with NASA more than the business world, which has had an incredible record of successful rocket launches, much higher than most new ventures launched over the past fifty years.

What can we learn from NASA?

They are experienced at what they do. In fact, having been an approved supplier to the space shuttle program, I have seen first-hand that their engineering and project management ability is second to none, however, what they don’t have they get from the outside the organization. Which brings me to my second point; Egos are left at the door, meaning that their organizational goal is a successful launch not protecting the NASA organization. If they need outside help, they are smart and humble enough, to go out and get the experience where they see a short-fall. They will not fail.

Questions: Do you have the experience and ability in your organization to launch your new product or New Venture? Is failure an option?

Lives depend upon NASA’s preparation and attention to detail. A fault that caused disaster and now corrected by NASA. Now granted; most new launches do not also contain threats to life. But don’t they? What about the auto industry? Medical device industry? Pharma? Food processing? Etc. Every industry contains some exact product regulatory requirements mandated by law.

Questions: Are we ready to commit financial resources to an idea or an idea and a plan? Are we prepared? Have we completed a detailed market analysis? Do we know our competition? Strengths? Weaknesses? Have we correctly branded and positioned this venture correctly? Have we set accountability standards with each detail?

NASA never stops innovating. Every procedure, process and part on the shuttle goes through a complete, objective peer review to improve on the next launch. Nothing is sacred.

Questions: What are the standards for a successful launch? Can we quantify every aspect of the launch? What is success one month, one quarter, one year from now? Are we also innovating are new product?

NASA never quits until the launch is complete. Upon launch, I have never seen or heard of a NASA engineer sleeping on the job or guessing where the shuttle is at any exact moment. They are committed to the mission.

Questions: Are we in it until completion? Are we in it for the long-haul? Have we committed the resources until completion? All new ventures take on many twists and turns requiring complete focus through the “valley of death” but even more importantly; when the venture is in the growth phase. Are we scaling correctly? Remember the business adage “It is easier to choke to death than to starve to death” Therefore, the more we are prepared and experienced in managing growth correctly will determine whether we have the foundations to grow to the next plateau. Again, Successful launches don’t just happen.

The Entrepreneurial Mystique

What is the entrepreneurial mystique? It’s not magic, it’s not mysterious, and it has nothing to do with the genes. It’s a discipline. And, like any discipline, it can be learned.” Peter Drucker, 1985

Recently I attended a Boston College CEO luncheon event which had John Chambers, CEO of Cisco Systems, presenting his vision for the future of Cisco. John did an excellent job and presented several great takeaways from this event.

At the core of the presentation, however, John exemplified the management discipline of an entrepreneur. As a general practice, all large organizations are slow in their speed to adapt to market change. Not Cisco. Cisco has maintained an incredible ability to be in the forefront of product innovation and revenue growth. In my opinion, John has masterfully achieved this growth at Cisco by nurturing the entrepreneurial discipline throughout Cisco’s many thousand employees and business partners.

The Entrepreneurial Discipline

So what is the discipline of an entrepreneur? And how do I deploy it in my organization? At the forefront it is accepting the fact that customer buying habits change constantly and predicting this change will reap great financial rewards. Hence, staying close to your markets is critical to minimizing risk. Blink and you will miss it, capture it and you’re the winner. Second, and just as important, is the process used by an organization to adapt to this change. It has to be simple, measurable, and easily executable throughout the organization.

The key for any organization is to define this discipline into a simple, executable process to maximize immediate success. At Cisco, they’ve adapted every area of their organization to respond to market change. They’ve created a diffused management structure that can focus on multiple segments at once, they’ve adopted a process that allows them to ramp up a new product innovation plan in two weeks with an established track for quick board approval (a process that used to take a year and a half), and they’ve aggressively attacked multiple markets at once, even ones they have historically been weaker in. The result, as John Chambers conveyed, is that last year they innovated in 30 areas and gained market share in all of them. Previously with a more centralized management structure, he himself could only do about two major thrusts per year.

The key to success in today’s economy for any company is establishing a robust entrepreneurial discipline. That makes the difference between maximizing an opportunity and wishful thinking. In our work with clients (many of whom are more at a mid-market level), we separate it into two areas: a front-end discipline and a back-end discipline.

The Front-End Discipline

The “front-end” discipline should typically include:

  • Systems for market perception
  • Disciplined approaches for business opportunity recognition
  • Structures for incentivizing and incubating winning ideas
  • Market assessment and honing of value proposition
  • Competitive analysis
  • Leadership empowerment
  • Speedy and effective decision making

Examples: For example, an early stage South Korean company perceived an opportunity to expand into the United States market but that its leaders had limited experience on how to go to market correctly. OneAccord created a comprehensive “front-end” decision-making process to analyze and then create the optimum Go-To-Market strategy which resulted in a successful launch. In another case, a private equity firm perceived a good potential acquisition of a target company. OneAccord provided a “front-end” sales and operational due diligence approach prior to making the decision to proceed (which turned out successfully). Both examples show how market foresight and discipline to the front-end process paved the way for the correct call in a major decision.

The Back-End Discipline

The “back-end process covers what it takes to then implement the decisions to proceed. This entrepreneurial discipline (which OneAccord calls its Revenue Review™) generally assesses and addresses areas pertaining to the initiative and essential for revenue growth and building value such as:

  • People & culture
  • Customer base
  • Strategy & business model
  • Products
  • Sales and marketing
  • Tools
  • Processes

Examples: The result of such a review should create several executable outcomes producing immediate revenue growth. For example, when OneAccord worked with one Fortune 500 mining company it was determined that a new sales process and training needed to be implemented to their worldwide sales force resulting in multiple gains in revenue. In another case, as a result of a “back-end” revenue review, a private equity firm determined that a new CEO was needed in one of its portfolio companies to lead the organization to new growth. The results in both cases enabled the organizations to produce organic growth at multiple levels.

Conclusion: The Greatest Challenge

Near the end of John Chamber’s presentation, he made a point that struck home with me. To paraphrase, he said that Cisco’s greatest threat to its growth will come by the entrepreneur outside the organization who has the innovation and discipline to beat them to an opportunity. I encourage you not only to embrace a great idea to innovate in your offering, but to embrace the entrepreneurial discipline needed to make your vision and goals reality.

“Carpe Diem” – Seize the moment!

Business Launch – 101

Below is a simple outline for a business launch. It’s the rough structure of a more comprehensive planning process and will give you quick insights into the new venture you may be considering…

What is the opportunity?

– Not a hunch but a clearly analyzed and defined opportunity with hard facts to support why there is a need for your product or service

– How big is it financially?

– What is your value proposition? (Contact me and I can explain) Can you explain it to me in 30 seconds? Why are you unique? Is your solution compelling? Why not another solution?

– Who is your buyer? Consumer of your product? Why? – Where are they? How do they buy now?

– What is your pricing strategy?

– Is this a one product wonder or are there multiple uses/expanding product-line?

How do I capitalize on it?

– How am I going to quickly capture the opportunity?

– What “net” or business model optimizes your profit? Prove it with hard facts?

What resources do I need?

– How can I gain control over them? Assets: technical/managerial expertise, strategic partner, patents, suppliers, inventory

– Capital/Funding – Boot-strap working capital, friends and family, angels, crowd-funding etc.

– What is your exact use of proceeds when you received your funding? How will you payback your investors?

What structure/strategy is best to capture my opportunity?

– What is your Go-To-Market Strategy?

– What is my optimum business model to capture and scale for growth? Why? Website? Direct- sales? Channels? Franchise?