Tuesday, July 8, 2008

Capitalism Fosters Happiness

Money by itself cannot generate happiness. A lot of research has been done on this topic, and the results are unwavering - money does not and can not buy happiness. In fact, happiness is not for sale. It must be earned.
According to the article above capitalism can be responsible for fostering happiness. The basic premise - if people are allowed the freedom to succeed on their own merits, then they are in the best potential environment to find, or earn, happiness. Therefore, capitalism is a critical element to the overall happiness of our society.
Please take a look at this article when you get a chance. It provides a fascinating perspective.

Tuesday, July 1, 2008

Make the Promise, Keep the Promise, Track the Promise

As business complexity and economic turmoil increase, we will visit some of the basic principles that drive our ability to build, sustain, and improve our businesses.  We call it: "Make the promise.  Keep the Promise.  Track the Promise."  Each in its role as an integral contributor to the whole, these interdependent elements of the business cycle are equally critical to the performance of your business.

Regardless of the product or service you provide, your customers must decide if you will keep the promise of benefits and value you propose to deliver.  Ultimately, customers buy because they believe they will receive more value from your product or service than they spend to access it.  Value may not always be quantifiable in dollars since value can be achieved, or at least perceived, through time and quality of life.  McDonalds has long since given up selling food - it focuses on the value of improving its customers' quality of life with the slogan: "I'm lovin' it."

MAKE THE PROMISE
First we need to find potential customers to whom we can make our promises.  This is called marketing, which exits for one reason - to generate qualified leads.  The strategies and techniques for accomplishing this differ by industry.  Some companies combine the sales, marketing, and operations into the same department.  An example is professional service firms - they rely on their professionals to market, sell, and serve clients.  This can work so long as each discipline is separately accountable and receives an adequate amount of focus.  Ultimately, every organization needs qualified leads.

Once you have the qualified leads, it's time to make the promises.  We live in an information-rich society where our sales success is dependent on our ability to tailor our promises to the needs of our prospective customers.  If you sell computers, the needs of each of your customers will vary significantly.  Some need a computer to communicate with their tech-savvy grandchildren.  Others have a home-based business to run on the computer.  While others want to play games and watch streaming videos all day.  The point is this - first discover the needs of your customers, then make them promises if you can fill their needs.

KEEP THE PROMISE
The "keep the promise" department is often called operations, client service, or customer service.  They must keep the promises made by the sales team.  Has your operations staff ever complained that sales over-promised on what should be delivered?  If you answered yes, you are not alone.  The silos of sales and operations can often feel worlds apart.  When I was part of a company that grew to over $100 million in sales in just four years, this divide was often overwhelming.  The main issue was that each silo tended to slip back into a mode of self-interest.  We solved the problem each time by rallying the silos around the one thing they had in common - a desire to help our customers enjoy the most value possible from our services.

Bridging the customer from the hope that their needs will be met to the actual fulfillment of their needs is never enough - you want to build highly satisfied customers who become loyal to your brand.  Not only is it cheaper to keep an existing customer than find a new one, but research also says that employee retention and productivity are correlated to a firm's ability to keep its promises (www.babyboomers.com/news/0705c.htm).

TRACK THE PROMISE
The philosophy that measurement improves performance is true.  When we suspected a lack of productivity in a firm which our part-time CFO,/a>'s were hired to help, we began measuring performance.  The department's productivity improved several fold within days!  The disciplines required to track the promise include accounting, finance, IT, HR, and other administrative functions.

How much does your product or service really cost to deliver?  What productivity levels need to exist in operations to be profitable?  How long is your sales cycle?  Does your marketing department produce enough leads?  The better you can answer these and other questions, the better chance you have for business success.  We have helped many businesses track their promises, and, consequently, increase competitiveness, profitability, and, most importantly, cash flow.

CONCLUSION
If you do not make, keep, and track the promise, you will fail.  When you whittle down a successful business to its core, you will find it has a balanced commitment to making, keeping, and tracking its promises.  Successful executive teams have members who represent each discipline to balance the strategic direction of the firm.  Whether you are a company of one or one thousand, focus on improving these three areas and you'll find yourself on the path to success.