Effective Plans in Four Steps

Effective plans for business operation are the foundation of accountable leadership. Management teams often struggle with indecision and disagreement. Loss of focus and individual ego often causes total breakdown of leadership. The root cause of such breakdown is found in the lack of planning, lack of clear mission, and vision. Effective leadership develops effective plans. Mission and vision statements develop effective leaders and vice versa.

Instant Gratification Dangers

These are the days of instant gratification. Short-term focus is replacing the vision of the long-term mission. Managers and business owners live and die by the next earnings report instead of relying on customer loyalty and brand reputation. The myopic, or narrow-minded, obsession with short-term performance reports leads companies down the wrong path and sometimes off of the rails entirely. The value of the long-term plan is to help the management team stay focused on results that matter. Properly developed plans with consistent vision builds meaningful action from good sentiment.

Effective Plans Steps

The objectives within the plan are the rules by which a plan should be executed. Consider these four steps when creating strategically effectively plans:
  1. Creativity
  2. Risk and Reward
  3. Focus
  4. Measurement

Creativity and Risk

Never rest on today’s accomplishment. Conduct SWOT analysis often to understand what opportunities lie ahead. Always focus on the values of the customer for meaningful results. What does your idea mean to your most important customers? What will be required for you to deliver on your commitment to the customer? How far ahead of the tech and marketing curve is your new concept? Look before you leap. Risk is inevitable. No risk, no reward. Risks often come in two types. There are risks you must take because the lost opportunity cost is too great. Other risks you should take because you can easily reverse your course if things go wrong. Measured, educated, informed risk is the life of an entrepreneur. Every entrepreneurial personality profile ever offered includes an analysis of your ability to tolerate risks.

Focus

Many entrepreneurs suffer from sever attention deficit issues. That means we cannot or do not focus on anything through to conclusion. Here is a novel idea! When a business concept works, stick with it. When you experience success, double down on that model instead of going off on new tangents. Your ability to focus and accept success when it comes might help you find sustainable success and separate you from most entrepreneurs who fail. Refer to your original mission, vision, and values often to help stay focused.

Measurement

Success must always be measured. One of the most common mistakes in stock investing is not knowing when to sell a stock. That is because many investors invest with no end goal and no final measure of success. If your goal is to double your money within two years then track your progress. If your money doubles six months into the investment then take your profit and call it a success. If you’ve lost half of your investment after two years in then you should  probably take your losses and accept the reality. When measuring business goals, keep your measurements realistic, timely, and firm.

The Breviary

Effective planning is mandatory for sustainable success as a business leader. Effective plans for strategy always include creation and respecting mission, vision, and value statements. Success requires measurement and accepting the data in a dispassionate way. This effective plans in four steps is an excellent way to start focusing on what matters. For more on creating strategic plans with proper mission statements check out this Smart Strategy blog post.

Smart Methods to Clone Your Best Customers

Best customers, loyal customers, are the foundation of sustainable success. They are not easy to win, keep, or clone. “Nobody can guarantee your job. Only customers can guarantee your job.” – Jack Welch. Interesting concept isn’t it? Wake up call for those who think being your own boss offers more job security. If you quit your day job then you trade one boss in for an endless number of bosses. This is because, as an entrepreneur, every customer is your boss. Customers have access to more information than ever before. “Retail prices are for suckers” is the mantra of the informed shopper. In the age of Amazon.com, Craigslist, and Google, a shopper becomes an informed bargain hunter and buyer within two minutes. Where this process of informed bargain hunting once took days or even months of product research, it now takes only minutes while never leaving your home. That means the advantage is now in the hands of the buyer and no longer the seller. Free, reduced cost, and efficient shipping means the department store and shopping mall is obsolete. There are few things a person cannot buy online, faster, cheaper, smarter, than ever before.

The Informed Customer

As a supplier of goods or services, your only shot at survival in the world of the informed customer is to master the customer focused strategy. Your brand must intimately understand what a customer wants and what will turn a first time customer into a loyal brand advocate. A half century ago, Peter Drucker said: “The purpose of a company is to create a customer…”. That might still be true but creating a customer falls short of the goal. In the Twenty First Century, creating customers is simply inadequate for sustainable, competitive, success. You must do more. Turning a customer into a loyal fan, best customers, or brand advocate is no easy task. The good news is that you have more tools than ever before to successfully complete that task. The digital marketplace provides vendors with countless options to study market intelligence and consumer behavior. Social media, email campaigns, and product user surveys is a short list of highly effective tools for gaining that valuable customer feedback. It is good to understand the motivations behind a buying decision. What, when, where, and how are all good to know. The most important data of all is the WHY. Remember that every buying decision is an emotional one.

Best Customers Niche

It is impossible to be all things to all people. Know who you serve and why you serve them to keep your best customers. Once you identify that ideal customer then focus in on creating the best buying experience possible. Creating a brand advocates means exceeding expectations. It means solving customer problems in new and creative ways. Sometimes it means solving problems that the customer never knew existed. Remember that creating loyal customers and cloning those most valuable customers is never about price. Your best customers are loyal because you offer a service or product which takes the burden off of the customer in some meaningful way. Buyers pay for convenience. They pay a premium for top quality service. Research data says that more customers are pursuing value than ever before. What the data does not tell you is the definition of value. Slick marketing has brainwashed the American consumer to perceive value as low budget or cheap. As in the “Value Mean” or “Value Priced” models. Each is a game played to get you to think you are getting more than you pay for while what you are really buying is often CHEAP JUNK. Value means whatever the consumer wants it to mean. The Billionaire sees value in owning a Leer jet because his time is worth more than the million dollar operation expense. The School Teacher sees value in shopping at CostCo or Sam’s Club because buying household items in bulk saves pennies which add up to dollars over time.

The Breviary

Know “why” your customer buys your products and the rest will fall into place. Give that customer what he or she wants but be sure you know what important to the buyer. Be wary of those who claim that the age of premium pricing for premium products and services is dead. There is simply no truth to that. Great service and products will always command top dollar and create loyal customers. For more on building raving brand fans, an excellent article on The Art of Customer Loyalty can be found at Helpscout.com. Blog image compliments of © Iqoncept | Dreamstime.com – Repeat Customer Loyal Satisfied Faithful Client Return Business .

Smartly Know Your Customer

To know your customer is to know your business. Understanding your business means knowing your commitment to those you serve, those who pay your bills, and those who support your entrepreneurial dreams. Mastering knowledge of your customer means to understand the drivers behind why you do what you do. Identify your customer base correctly will give you a higher chance of sustainable and fulfilling success. Neglecting a deep understanding of your customer base means your business will likely struggle or suffer catastrophic failure.

Know Your Customer

Business experts have multiple terms for identifying the person or object most likely to be your customer. Some call it the ideal customer. Consultants call it your product or brand champion. Others divide your customer base into different segments like primary and secondary customers, creating overly complex definitions and methods for categorization. You are a busy entrepreneur with many more projects to complete than you have hours in a day. Struggling to memorize or organize one more list is not likely helpful to you.
There is great debate among self labeled business guru types and Academics over what and who might be a customer. Some argue that customers might not be only humans but possible animals, organizations, etc. My response to that would be who cares! There are far more simple ways to identify and to deeply understand who or what is consuming your product or service. Business practitioners avoid the academic debates and put these simple methods to work ever day. They often are not deliberately using such classic methods but the result is the same.

An Old Principle

One of the most effective and simple methods to know your customer is to practice the 80/20 rule. This is an old pearl of wisdom which says 80% of your revenue comes from the top 20% of your customer base. That means if you have 100 customers, 20 of those customers are providing 80% of the revenue for your business. Let us call this group of customers your Top 20. This customer list is your most valuable asset for marketing. They typically buy items at full price. They rarely return items or complain. Most importantly, this group is one of your best marketing tools for word of  mouth marketing. Your Top 20 customer base will be your brand advocates, those who scream from the rooftops how great you are and how awesome your products are.

Clone Your Best

If you want to grow your business then clone your Top 20. Your task is to deeply understand the lives of these customers.
  • Know where they live, where they shop, what they like to eat, and what type of car they drive.
  • Know the dates of birthdays, important events of their children,  and when they take vacation.
  • Understand their style, taste, fashion, and music preference.
Create a service or shopping experience build around their favorite things. Do this right and your Top 20 customer list will become your best marketing too. Loyal and happy customers love to brag and share. They run in circles of other customers like them. This means they will go out and bring back their friends who are also highly likely to be the same type of valuable customer you want.

The Breviary

Peter Drucker said it well in this statement: “…customers always change. The organization that is devoted to results…will adapt as they do.”. Build your business around your customers. When you create mission, vision, and value statements consider your ideal customer. Build those statements around the idea of serving that customer. For guidance on creating awesome mission statements with customer focus, add this excellent blog post about business mission statement writing to your knowledge base. Blog image sourced from © Leisuretime70 | Dreamstime.com – Customer satisfaction survey form with the pen and glasses

Smart Business Mission Statement Writing

Your Business Mission Statement is the most important line you ever write. Why did you start a small business? Who do you serve? Why does anyone care? Did you do it for the money or for some larger purpose? You wanted a legacy for your family. You wanted to do things differently. You wanted better. You wanted smarter. You wanted to be in control of your future. You wanted to help others.

Business Mission Statement Motivation

The statement addresses the important driver behind the risk you took. The extra hours you worked, the sacrifice, hope, fear, and triumph you put into hours worked as an entrepreneur. The Business Mission Statement is a deeply personal philosophy of why you do what you do written into one or two lines. It is the embodiment in the values you hold and the process you know is right. As the leader of your small business operation, the burden of creating a mission statement falls to you and to you alone.
In the older day of Business Mission Statement creation, the rule was that a good mission statement would fit on the back of a t-shirt. Today, in the age of social media, a smart measure is for your mission statement to fit into a Twitter message of about 140 characters or less. Every person on your team, from the CEO to the part-time custodial team, must not only know the mission but believe in it. They must share the values within. They must support those values across the range of work obligations. It also helps if each team member shares the shares values of the mission statement outside of the workplace.

It’s Personal

Effective Business Mission Statements are those which embody a combination of the company’s strengths, opportunities, culture, and responsibilities. This “special sauce” of ingredients for success never change because they are driven by your values and not changed by external market forces. Common wisdom of experts says you can change processes but never chance your values. Peter Drucker said it better: “Leadership has no choice but to anticipate the future and attempt to mold it, bearing in mind that whoever is content to rise with the tide will also fall with it.”.

Never Compromise

Never compromise on your mission statement for anything, especially not cash. The final measure of your success will not be the bottom line on an accounting sheet for a given year or even a decade. The final measure of your entrepreneurial endeavor will be decided by you. Whether your measure of success is a gift to society, research, innovation, or service to customers, let your mission statement reflect that goal. Let the goal be consistent with your values. Let your values reflect your moral compass. Let your values reflect your faith. Remember that the final goal is not reached next week. Avoid developing a mission statement on short term objectives. As new entrepreneurs, we face many challenges and temptations. The most dangerous of which is to obsess about tomorrow’s demands like rent and payroll. We get bogged on the daily tactical.  We lose sight of the strategic long term objectives. Leave the daily work to your team. As the leader of your business, you must focus on the long term vision.

The Breviary

Your mission statement is the core of your business. Done correctly, it will help you guide your dream to the proper destination. Take the creation of this document seriously. Ask for help.  Make it your own. More on creating a mission statement and an executive summary can be found on this blog post and this excellent post from Entrepreneur.com.

Developing Winning Realistic Mindset

Maintaining a winning, realistic mindset is an important habit for success. You’ve heard the self labeled gurus tell you to see the cup as half full. Others tell you to see the cup as half empty. Those two groups call each other names like “negative” or “clueless”. Some tell you that there are only two types of people; those who see it half full or half empty. All of the above are wrong. There is a third type of person and that person is someone grounded in reality. In truth, the proverbial cup is both. It is half empty and half full and to see it any differently is denying reality. Scarcity thinking is not a negative attitude, it is a smart and proven way to live. Our ancestors knew a land of plenty but never wasted anything. Even in seasons of abundance, the attitude was to conserve, preserve, store, and share because scarcity was coming whether they ignored it or not. That mindset led to a positive but disciplined, sustainable, and realistic way of life. It is well known that Native Americans used every part of an animal when the animal’s life was taken. Nature on this planet is also an excellent example of how a balanced scarcity attitude is highly efficient. In times of plenty, wild animals grow fat and some store food in preparation for the scarce season of winter. The scarcity season eliminates weakness and disease from the natural population of animals which benefits the entire ecosystem. Scarcity thinking is not only wise but mandatory for sustainable success in the winning, realistic mindset.

The Sales Pitch

The glass half full statement often comes from those who would have you relax your conservative values and spend that hard earned savings. Most likely, that glass half full person would have you give them your savings for some product you do not likely need or want. This type of sales pitch is one of unrealistic future expectations driving you to go against your instincts. Buy a Mercedes when you should buy a Ford or buy twice as much house as you need because the future looks bright! Last time I looked, no person can predict the future. The glass half full attitude is a partial truth, partial lie, meant to drive you to an emotional decision. The half full crowd consistently attack others with hurtful and inaccurate terms like negative, critical, or jealous. The glass half empty attitude drives a decision based on fear. This type of person consistently warns you of what is looming around the corner and it is always likely negative. Again, last time I checked, no one can predict the future. Just like the glass half full crowd, the purpose of the half empty attitude is to separate you from your savings or your better instincts with a sales pitch built on fear. Life insurance sales people are highly trained in this tactic. We do not buy life insurance because we expect to live forever. We buy life insurance because we “fear” the unlikely but possible tragic outcome.
Anything other than a balanced, winning, realistic mindset is unacceptable. Some groups of people use these terms because they know of nothing else. Most shameful are the small groups of highly educated, highly trained, often wealthy, and always influential people who use the glass half full or the glass half empty labels to influence the behavior of others. When someone is behaving in a way that this set of leaders disagrees with, the glass half empty tool is deployed. It is meant to insult and pressure a change in behavior. When this shameful group of self labeled leaders want you to give them your money or convince you to commit to something, likely against your instincts, they use the glass is half full argument. The glass half full argument is often topped with a serving of falsehood telling you that God wills it for you.

A Better, Winning, Realistic Mindset

Words mean things. Responsible and educated adults pick their words carefully. Those who work in intellectual or professional roles pay particular attention to the language they use. We use and demand precision of language to avoid emotionally driven errors and the consequences resulting from such mistakes. I recently heard someone say this: “We can either see the cup half empty or half full. Scarcity of thinking creates limitations.”. Mr. Life Coach is both correct and incorrect and I promise that he knows this truth but perpetuates the manipulation. It is impossible for a glass of water to be anything other than both half empty and half full. Do I need to explain this like a 5th grade science teacher? If one takes a 6oz container of water and puts 3oz of water in it then it will surely also have another 3oz of open space thus half full of water and half empty of water. It could also be said that the cup is half full of air and half full of water. Oh wow, we never thought of it that way did we? Scraping away the canned phrases and the hype of the master marketers is sometimes harsh but always enlightening, like ripping off a bandage. Consider these reasons that business leaders use manipulating phrases:
  • To influence the behavior of noncompliant team members.
  • To sell someone something.
  • To encourage someone to deny their natural instincts.
  • To bully someone.
True business professionals operate on facts. We avoid emotion where possible. For a winning, realistic mindset, we accept the facts as they are without manipulating the data. We demand and expect precision in our own work and that of others. We do not call each other critical names like grade school children on a playground when our outlook is not the same as that of others. We do not use vague terms like “abundance thinking”.  You either have abundance or you do not. Abundance thinking is equal to pretending. Pretending is for children, not business leaders. A better phrase would be realistic analysis or a winning, realistic mindset.

The Breviary

Developing a winning, realistic mindset is critical to the success of your professional career. If you want to be a successful leader then base your success on clarity, precision, logic, and science. Avoid building a successful house of cards built on lies, manipulation, vague terms, and old canned phrased repeated for far too many years. Most importantly, trust your God given instincts. You can read more on how to be positive but realistic in your mindset at this link. Blog image compliments of © Arnel Manalang | Dreamstime.com – Good Vibes
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