Power Of The Group

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I have been a member of a peer group for over seven years and I can say that making the decision to join was one of the best decisions I have ever made. The benefits I have received from the groups I have belonged to have been instrumental in my personal growth and success. I know this sounds like it may be an overly dramatic statement, but I firmly believe that I would not be where I am today without these experiences and my groups pushing me.

Peer groups or mastermind groups, as they are also called, have been around for a long time. I’m going to describe my group, but it is important to understand there are many different variations that are equally successful. I would define our group as being medium in size with eight members. You can go a little smaller, but if you get too small (4-5 members) you may have issues with having enough members show up to have a quality meeting. You can count on having 1-2 people having a conflict and not being able to attend. I believe you need at least 4 members in attendance to have a quality meeting. There are some groups that are much larger (16-18 members), which can work effectively, but you need to weigh size of the group against the amount of time you are meeting and what you are trying to accomplish. If you have too many members, some may not have time to participate and that is one of the critical parts of the group – everyone participates. We meet monthly for three hours, which is just about the perfect frequency and amount of time for our size.

Our monthly meetings are broken up into three sections:

  • Social – we take a little time to have open discussions about current events or other general topics
  • Updates – each member gives a very brief update on how things are going in their business and personal lives
  • Process Issues – members can bring up a pressing issue that they need help with

You may have perked up when you saw that we talk about our personal lives. We absolutely do this. We recognized early that our business and personal lives are intertwined and one affects the other. I should mention that we each signed a non-disclosure agreement and what is said in the group, stays in the group. While there is a great amount of trust built up over time, this agreement helps new members in the group feel comfortable sharing information. My favorite part of our meetings is when we process issues. This is where you see the power of a peer group happening. The member gives you an overview of their situation, what the issue is, and what they are looking for in a solution. The rest of the group gets to ask clarifying questions to make sure they fully understand the situation. Then, each of the members give a possible solution to resolve the issue or at least move it in the right direction. Think about this for a second. If you had the opportunity to present one of your most difficult challenges to a group and get multiple solutions to consider, how would that improve your chances to succeed? When you see it in action it is incredibly powerful.

There are other important aspects of our group that I think are critical to its success. I mentioned earlier that everyone participates. Whether you have an issue to present or you are giving solutions to a member’s issue, each member is expected to be completely engaged.  It is not uncommon to walk out of a 3-hour meeting feeling exhilarated and drained at the same time. We challenge each other. We create an atmosphere of trust, which allows us to confront each other when we think a member may be taking “the easy way out”. We hold each other accountable. If you bring up an issue and you receive multiple solutions or action steps from the other members, we are going to expect that you do something and we are going to ask you about it at the next meeting. If you know you are going to have to report on your progress, the chances of something happening are much higher.

As you can tell, peer groups are something I am very passionate about. I would not trade the bonds and relationships I have created with my group’s members. I firmly believe that by being involved in a well-constructed peer group you will greatly enhance your level of success.  And if you are stuck in your current situation, a peer group is one of the best ways to get movement. If you want to hear more about my experiences with peer groups or would like to create or join an existing group, please contact me. I am here to help you.

“The whole is greater than the sum of its parts.” Aristotle

Contact Mike

Business Mobility – How Do I Start?

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Recently I noticed, while talking strategy with business owners, most are trying to figure out what they need to do to prepare for the future. These conversations can generally be divided into three groups. The first group of owners know they need to do something to make their business better, but don’t know what their first step should be. The second group kind of knows what they need to do, but are so overwhelmed by the amount of change required, they just don’t know how to take that first step. There is one other group, we’ll call them the “lucky” group, that thinks things are fine the way they currently are and don’t need to make any changes. We’ll wish the “lucky” group continued success and focus on the first two groups.

If you know you need to make changes, but are having problems with that first step, what do you do?

The first thing you need to do is be aware that you are not alone.  This is a common problem almost all successful business owners encounter.  It’s part of growing a sustainable, adaptable business in the midst of a quickly evolving market.

There are five steps to achieving what I am going to call Business Mobility. My simple definition of Business Mobility is: moving your business from its current position to another. A simple definition and concept, but sometimes hard to achieve. If you have read any of my previous blogs, you will notice that I tend to repeat these next steps. I believe they are the foundation for positive change in an organization.

Clarify your existing situation

Take time and do a thorough review of all aspects of your business. Understand your company, customers, competition, and the current operating environment. I highly encourage you to do this exercise in a collaborative fashion. Include others in the process so you can incorporate their ideas and opinions. Many times, knowing your current situation better will give you clarity on what your next steps should be. In situations like these, completing a SWOTT analysis is very helpful.

Define where you want to go

Now that you have a better understanding of your current situation, what do you want to achieve? What is your vision for your company? It’s reasonable at this point to be a little fuzzy in your vision. This is another tripping point for some. Many like to have everything well-defined before they proceed. You may find that if you wait to get that much detail before you start, you will have given a head start to your competitors. One thing that may help with this process is a gap analysis to determine how far off you are from where you need to be. This type of analysis could be useful to prioritize what areas should be approached first.

Identify action steps

Now that you fully understand your current situation and have a concept of where you want to go, it is time to create the steps needed to get there. This is a difficult area where some people and, subsequently, companies become paralyzed. In these situations I find the quote “When eating an elephant take one bite at a time.”, by Creighton Abrams enlightening. The best way to handle a large project is to break it up into small, manageable pieces.  Even better, share these pieces with others. Like all other steps, it is important to collaborate during this step.  This keeps your action items realistic and it gets buy-in from your team.  If you are stuck trying to figure out what your next step is, ask your team this question, “What can we do in the next one-two weeks to make progress on this?”

Create a timeline

Once you have identified your first couple of action steps, define when you want these steps completed. These will be important milestones for you to gauge your progress and to understand if you are on the right track. I encourage you to keep the time between milestones pretty short.  Somewhere between one to four weeks is generally reasonable.  If you go out longer than a month before you check your progress, you are entering risky territory.  At the same time, you need to give your team enough time to actually make progress.  There is an art to this because the reality is you will probably have multiple action steps going on at the same time with different due dates. I encourage you to establish scheduled, structured progress meetings.  I would have these at least monthly, and potentially even weekly.  They don’t have to be long and shouldn’t be too long – quality is more important than quantity.

Be Accountable

One of the best ways to ensure your success is to have a partner that will hold you accountable for progress and give you feedback.  Leaders frequently provide guidance to their team and hold them to a set of standards. They do this because it creates a better team, but who is doing this for the leader? Who does the leader go to for feedback, guidance or explore new ideas? How effective is it when the leader is only accountable to themselves? There are multiple options to address this.  As the leader you can:

  •             Work with a peer in your organization, if one is available,
  •             Find a mentor that is able to work with you, or
  •             Engage a qualified business coach

Each person is different and every option might not be the best or even possible for everyone. The goal is to find someone you trust and respect that will provide value to you and your organization. This is someone who will be candid and willing to have difficult conversations with you. Their ultimate goal should be the same as yours – do what is best for you and your organization.  Remember, best does not equal easiest. By adding accountability to the action steps equation, you greatly improve the chances of success.

Unless you are a member of the “lucky” group, preparing for the future and constantly adapting your business will be an ongoing necessity.  Those that accept this and take the necessary steps to become proficient at handling it will have the highest probability of continued success. Your first step is right in front of you – take it!

If you would like to discuss these steps in further detail or would like some assistance taking that first step, please don’t hesitate to contact me.  I am here to help you!

Contact Mike

 

Consumer Lending Revolution

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The more I look at what is happening with consumer lending today, the more I believe we are in the midst of a true revolution. This is not a slow evolution, although some of these changes have been happening over the past few years, this is a substantial change in the lending environment. In my opinion, there are three main areas driving this consumer lending revolution:

Regulatory Changes

  • The CFPB’s proposal for changes in small dollar credit will have a dramatic impact on short and longer term loans. No matter what the final rules say, you can be assured they will dramatically change consumer’s access to credit and lender’s approach to offering credit.  Good or bad, it will be a significant change.
  • The Department of Justice’s “Operation Chokepoint” initiative to pressure financial institutions to cut off access to “risky” businesses illustrates the federal government’s willingness to take an unorthodox approach to affect their change – even as it negatively impacts law-abiding business owners.

Technology & Data

  • There is increasing consumer comfort with initiating financial transactions outside of a branch. While there is still a group of consumers that prefers a face-to-face experience, that group is shrinking. Smartphones are now mainstream and this will continue to drive transactions from the storefront to a mobile device. Not only do you need to be online, your site needs to be responsive and very user-friendly.
  • More companies are implementing data analytics to improve their marketing efforts, risk management, and product offerings. In fact, there will soon be a time when consumers expect an offering that is tailored specifically to them.

Consumer Habits

  • Soon the Millennials will outnumber the Baby Boomers.  According to Nielsen, Millennials and Baby Boomers each number approximately 77 million in population.
  • Also according to Nielsen, over 70% of the U.S. population owns a smartphone with the Millennial segment owning over 85%
  • Barkley reports that Millennials expect to be able to interact with brands on social media and gather product information from their social circles before making a decision

Currently, there is a lot of focus on the impending regulatory changes, but we shouldn’t overlook the impact that technology and consumer habit changes are having on the landscape. By themselves, the Millennials are forcing businesses to rework how they look at customer interaction. Companies that don’t recognize their buying power will have a hard time catching up.

How is your organization handling this revolution? Here are four steps for your organization to complete to effectively prepare for this revolution.

Understand your current situation

  • Do a thorough analysis of how the proposed CFPB rules will financially affect each of your branches.  You may have to look at multiple scenarios, but take the time to fully understand what may happen. Something will happen and it will be dramatic.
  • Review all of your current processes and systems to understand how they could handle the changes in technology and consumer habits.  How adaptable are they?
  • Do you have the best resources available to help you? Whether it is your organization’s team or your vendor relationships, do you have the best team to handle this revolution?  How adaptable and willing to change are they? How up-to-speed are they on these three areas?
  • Grab your smartphone and pull up your customer-facing website.  Is this the experience that will attract consumers in the future? How are you currently interacting with your customers on social media? Are you providing the experience Millennials expect? If not, they will go to someone that does.

Identify all of your options and gaps

  • What changes or additions to your current product mix can you make to improve it? Are there products you can add to attract more customers? How will your existing pool of customers respond to a new product? You should model how this will affect your financial results. Revisit opportunities you may have turned down in the past. They may look more attractive to your customers now.
  • Poll your current customers to learn what they would like to see from you. Poll customers that recently left to find out why.
  • Look at your team and determine who will have the passion and capacity to champion your organization to the next level. Identify any gaps you may have to handle this transformation.
  • Are you using data to make marketing decisions or helping with your risk management?
  • Examine all of your vendor relationships to help position you for the future. Are their positions missing? Do you have a solution for gathering and analyzing data? Sometimes you need to rent expertise.

Understand your timeline

  • This revolution is happening now. If you wait, you should understand that others are not.
  • How long does it take to add functionality to your current systems? If you want to add a new product, how long will it take?
  • If you are not online (desktop or mobile), how long will it take?
  • How long would it take to add a new product and make it work correctly? If you need to get licensed in a state for a new product, that by itself may take multiple months. If you are thinking of adding a longer-term installment loan, it may take 6-18 months to test and make changes to the program to keep losses within your tolerance level.
  • The short answer is you need to start now!

Create your plan and start

  • Don’t wait for absolute clarity on everything to start. Regulations, technology, & customer behaviors are changing – some very quickly. You need to create a plan and begin working towards your strategic solution to handle this revolution.
  • At a minimum, you should do a complete review of your entire organization. You will find opportunities to make improvements and get a better understanding of what you need to do to come out a winner.
  • There are experts that are ready to help you work through this process. You can get a fresh, unbiased perspective on your business and assist you in identifying the resources you need to succeed.

I think it is fitting to wrap this up with two quotes from Sun Tzu that are very appropriate:

“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” 

“In the midst of chaos, there is also opportunity”

I would love the opportunity to discuss this more with you and identify areas that our group can assist you. Please don’t wait to work on these four steps.

Contact Mike

How Are You Responding To THE RULES?

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It’s been almost two weeks since the CFPB released its proposed rules that will cover short-term and longer-term credit products. It’s been hard for me to have a conversation with anyone in the industry without a majority of the conversation being dominated by THE RULES. This makes sense for several reasons:  they have been anticipated for a long time, they are extremely complicated to understand, they may restrict viable financial solutions to consumers in need, and they may radically change the way the industry does business. Granted, when I use the word “may”, it’s only because THE RULES are not final, yet. In my humble opinion, the proposed rules will become effective, and no matter what modifications, if any, are made due to the small business review panel, the final rules will be dramatic and transform the industry.

There is conjecture that the effective date of THE RULES will not be until 2017, which has given some breathing room to some. While that effective date may make sense, postponing action, even if the rules are not final, may be harmful to your operation. There may be some benefits in seeing the finished version of THE RULES to create a plan, but there are definitely benefits in taking some actions now. I’m going to touch on a couple of areas that you should consider as you create your strategy for the future.

Evaluate The Proposed Rules

You should spend some time, as much as necessary, to fully understand the proposed rules. Then, examine how they will affect your existing product mix and profits in the state(s) you operate. I’ve been reviewing and analyzing the rules since they were published and one of best things I have done is to discuss the rules with others to make sure what I am interpreting is similar to what they are interpreting. I suggest having at least one or two additional sets of eyes to review the rules and then get together to discuss what you think. Not only will this lead to clarity, it might also start a productive brainstorming session. Even though THE RULES are not final, it doesn’t hurt to look at several scenarios to determine what your business may look like in 2017.

Evaluate Available Products

Are you currently offering all of the available products in your state? When was the last time you reviewed your competition to see if they have discovered something new? I’m not suggesting that you rush out and add every single product to your mix immediately, but you should have a comprehensive list of available options for you to consider. For each product that you consider, you should model the profit potential, the likelihood of your existing customer base accepting this product, and, importantly, how long it will take to implement this product and work out all of the bugs. If you add a 12-month installment loan as a new product, it is going to take more than a few months to make sure your model works. If you add a product that requires you to change your marketing approach, that may also take some time.  That 2017 time horizon isn’t that far away anymore, is it?

What should you NOT do now?

I’ve given you just a couple of things to do, but there are also some things you should not do. First of all, don’t stop providing excellent customer service. Outstanding customer service is the trademark of the industry. You provide customers a needed service that they truly appreciate. Their demand for your products and services has not diminished because of THE RULES. Next, don’t stop becoming lean and efficient in every aspect of your business. Part of this process should include a review of your systems to see if they can accommodate aspects of the proposed rules. Does your loan management system have a built-in CRM? How well does it handle installment loans? Do you have the ability to collect email addresses from your customers and then schedule email campaigns to them? Finally, don’t wait too long to start understanding and acting on the impact of THE RULES.  Granted, with a long time horizon and potentially grim prospects, it would be easier to wait and see, but as a successful business owner, is that the behavior that got you to where you are today?

The next two years are going to be challenging, there is no doubt.  This is an opportune time to establish strategic partnerships with those that can help you navigate this terrain. Whether it is a consultant with a needed expertise or a business coach to help you gain clarity on your future strategy, we are here to help you succeed.  Don’t wait to take your first step.

Contact Mike

Hey Lenders, Is Winter Coming???

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One of my favorite shows recently has been the HBO series Game of Thrones. One of the sayings from the series is “Winter is coming.” This is a dire warning to all that the current favorable conditions are ending and you need to prepare for the inevitable struggle of a long, harsh winter. During the CFSA conference last week it struck me that this saying could apply to the payday loan industry and its anticipation of new rules coming from the CFPB. While it may be a stretch to say that the landscape after the rules are implemented will be as foreboding as what is portrayed in the Game of Thrones, the sentiment shared by the operators in the industry certainly is not one of excitement and understanding.

One of the questions repeated by operators in the industry is why there are new rules being created when there are already existing laws in each state? Historically there have been comments that the numbers of complaints from consumers about payday lenders to the state agencies are very low. If consumer satisfaction is high, why the need for more rules? Maybe to help clarify this, the CFPB created a mechanism for consumers to make complaints directly to them – not only for payday lenders, but other industries (credit cards, private student loans, mortgages, bank accounts and services, credit reporting, consumer loans, money transfers, & debt collection). Based on a presentation given by the CFPB at the CFSA conference, the bureaus started collecting complaints on 11/6/2013. As of 1/31/2015 they had received 538,300 complaints covering the named industries. The payday loan industry had over 7,100 of these complaints. My rough math says that is about 1.32% of all the complaints. Out of the nine groups they are compiling data on, the payday loan group had 1.32%. One of the attendees stated, “This seems really low”.   Obviously with complaints this low there must be a problem…. just not sure it is with the operators.

As I was walking between workshops I overheard one operator tell another that she was shutting her business down due to her bank kicking her out with no notice and no past issues. Another victim of Operation Chokepoint? Apparently, she could not find a replacement bank. While recent news has been positive that this “initiative” has been halted, are the banks opening their doors back up to those they kicked out unnecessarily? I actually had a bank representative (name withheld to protect the “innocent”) contact me to try and help place their customer with another bank that would accept check cashing and payday lending. I asked the obvious question – “Do you not serve businesses in the industry?” The response was, unfortunately, not surprising, “No.” I sent him an article to enlighten him about the change in Operation Chokepoint. Never got a response. I still go back to the high customer satisfaction in the industry and the high product demand and just don’t understand the disconnect.

There was much discussion during the conference about the CFPB’s timeline for the rules to be effective. It appears that the final rules may not be effective until 2017, but that could change. At this point we still don’t know if the rules will only cover payday loans or if they will reach over into title loans, installment loans and other products. Based on the amount of time this is taking, it may be safe to assume the reach will go beyond payday loans. Not only are there going to be industry-changing rules in the future, data at the conference illustrated that customer demand has been shifting from a single-pay product to a multi-pay product. Customers are also getting more comfortable operating in an online environment for their financial products. Think about these last two items as they relate to your current operations. Do you offer a multi-pay product now? Do you offer your products in an online or mobile environment? If you said no to either of those, winter may be closer than you think!

So what should your strategy be to prepare for the upcoming “winter”? Here are a few things to consider as the landscape continues to evolve:

  • Continue to provide excellent customer service in a compliant, ethical fashion. The best way to maintain and grow your business is to still offer it at a high standard.
  • Explore options to add installment loans to your portfolio. There is a lengthy runway to implementing installment loans successfully – start now!  At the same time, you might want to start looking for extra funding – installment loans tie up cash.
  • Look at your current systems to understand what it would take to offer your products online or in a mobile environment. Will your current system handle installment loans? Do you need to change platforms?
  • Maintain good relationships with your vendors and bankers. At the same time, look for effective replacements. Don’t let yourself get caught without a way to operate.
  • Stay informed. The product and regulatory landscape are changing quickly and dramatically. Monitoring regulations and your competition are critical to gain insights to the future.

While these times are fluid and maybe a little ominous, there is also good news.  If you have the right strategy and the ability to adapt with the times, customer demand is out there.  If you don’t, there are experts out here that are able and willing to help you succeed.  Winter is coming.  Let’s get ready!

Contact Mike

Goal Status Check – How Are We Doing?

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What is SMART?

We’re one month into 2015, which is the perfect time to evaluate the goals you set for 2015.  Earlier we talked about the importance of using SMART to make our goals.  (See Be SMART)  Below is a brief overview of what SMART means in relation to goal setting.

  • Specific – you need to know what you are trying to achieve
  • Measurable – you need to be able to quantify your goal
  • Attainable – you actually need to be able to reach your goal
  • Relevant – it should be important for you and your situation
  • Time-bound – your goal should have a target date

Using this as a guide to create your goals will increase your chances of success.

Goal Review

There are many factors that can affect the success or failure of each of your goals.  I will discuss a few of these and give you suggestions on how to overcome some hurdles.  Right now, let’s take a few minutes and review where you are with each of your goals.  If you wrote your goals out (if you didn’t, do so now), take out the piece of paper or open the document, put today’s date on it and write a few notes detailing where you are with achieving your goal.  Be honest.  Be candid.  Are you where you thought you would be at this point?  If yes, great job and keep up the momentum. If not, consider what happened or didn’t happen and write that down. Next, write down what you are going to do next to continue (or start) the progress on your goal.  Keep in mind that you are going to be reviewing these notes again in March.  Did that make you think differently about what you wrote?  Lastly, go to your calendar and create an appointment (with reminder) for March 3.  This will be the day you go through this entire process again.  The best way to commit to achieving your goals is to commit to reviewing your progress.

Goal Trippers

As I mentioned earlier, there are many factors that can keep you from reaching your goals.  I’m going to cover a few that are within your control and give suggestions on how to overcome them.

Lack of Commitment

When we sit down and start developing our goals, especially around the first of the year, we have the best intentions of achieving success.  We are excited, energized, and probably visualizing how things will look when we have succeeded.  Then, when the goal-setting process is over, do we file them away and get back to our day-to-day routine?  After a period of time we may remember that we have goals and work on them for a while, but then put them aside again.  Eventually, the due date has slipped by and we have completely forgotten about the goals.  While writing goals down greatly helps the chances of success, unless you regularly review your progress, the chances of success drop.  Depending on your goal and it’s timeframe, you should create a structured review of your progress.  It may be once each month or maybe it’s even weekly, but it needs to happen and you need to keep putting it in writing.

Fear of Success

Pick one of your goals and visualize how things look when you have succeeded far beyond your expectations?  How does this make you feel? Are you really excited or do you get a little nervous and feel uncomfortable?  One of the main reasons why goals are not met is because people get uncomfortable with the prospect of change.  Many people will focus on succeeding at their day-to-day tasks instead of working towards accomplishing their goals.  The day-to-day is what they are used to and is well within their comfort zone.  Getting outside of our comfort zone is not always easy, but is what it takes to attain your goals and grow your business.  While it is important for us to understand that things will change whether we want them to or not, understanding that does not always prevent it from blocking goals.  One way to handle this fear is to talk about it with others.  Whether it is in a peer group, business coach, spouse, friend or anyone else that you trust, discussing your fears and concerns is one of the best ways to get a grip on them and overcome them.  You would be surprised how differently you feel once you have this conversation.

Accountability

In my mind, one of the biggest reasons goals do not get accomplished is lack of accountability.  As a business owner, who are you accountable to, besides yourself?  Who can you confide in to help validate your progress or discuss issues?  If there is no one holding you accountable, it is so much easier to focus on the day-to-day issues and let the goals you set slide to the next year.  How often is that happening to you?  One of the best ways successful business owners handle this issue is to engage someone outside their business to help them.  This can be a mentor, peer group, or a business coach.  Someone that will collaborate with you and at the same time give you candid feedback.  If you met with this person on a routine basis, discussed your issues, and created action steps to accomplish your goals, do you think it would have an impact?

Your Next Goal

To increase the likelihood of attaining your goals, I want to give you a new goal.  Find someone that you can review your goals with on a routine business.  Make sure this is someone you can confide in and will give you honest, candid feedback on your progress.  Ideally, this person will be able to give you suggestions on how to overcome obstacles and collaborate with you on action steps for you to complete.  While I may be slightly biased (ok, a lot), a certified professional business coach might be the ideal candidate for this role.  The important thing is for you to accomplish your goals and succeed, so if you do not have access to a business coach or peer group, a mentor or trusted friend is also a good option.  Make sure you write this goal down and review it on March 3!

Management Reports – Drowning In Data?

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One of the recent new buzzwords is “Big Data” and as technology progresses, all forms of data will continue to play a bigger and bigger role in our lives, especially in business. While the ability to access data and use it to make informed decisions is exciting, it is also challenging. It is getting easier to reach data overload and the dreaded “paralysis by analysis” – the state where you have so much data you just don’t know how to make a decision. As business owners, it is our responsibility to sift through all the data and identify the key points that drive our business. This is especially true if you have a management team in place that will also be reviewing the same data. What’s important to you will be important to them.

Financial reporting is critical to every successful business and a frequent, in-depth analysis of your income statement, balance sheet, and statement of cash flows should be happening. I am assuming that this is already happening in your business and we will not cover it. I am focusing on management reporting and how we should be using it to operate our business. I am going to look at three areas from a high level and hopefully create some thought-provoking items for you.

What should be in my reports?

Maybe the better question should be, “What shouldn’t be in my reports?” As we get access to more and more data, there is a tendency to continue to create more and more reports to capture that data. More is better, right? Not always. Like other things, there is a point of diminishing returns. If you have 20 reports available to your team, each with 5-20 different data points, how often do you really think they are using it effectively to evaluate the business? I encourage you to sit down with your team and identify the Key Performance Indicators for your business and design your reports around them. My recommendation is to keep your KPIs around 8 to 10 or fewer. More than that and my concern would be that some of the important data is not being seen. If your business has multiple divisions, you would probably have a unique set of KPIs for each division. Remember, your KPIs are the measurements that illustrate how your business is doing and the direction it is going.

Who Should Look At Reports?

I’m a fan of sharing data, so I would be in favor of everyone in the organization having access to management reports. What a great way to make sure everyone is focused on the same goals. This may not be comfortable for all business owners. I would suggest that, at a minimum, you provide relevant reports all the way up to the team members that are providing the service. It’s important for them to get feedback on their hard work. The other benefit of sharing reports with everyone is that it helps create a team environment. Also, take the extra step and have a training session with your team to make sure everyone understands what the reports say and how you can use reports to help the business. Don’t assume everyone understands the reports the way you do.

We’ve looked at the reports – now what?

Once you have reviewed your management reports, what do you normally do? Do you identify areas to focus on? Do some data points prompt you to look deeper? If you see a negative trend do you create a refresher training session? When you see a positive result, how often do you send out an email high-five to the team? Many times we are looking at data for negatives, when it could be used as a powerful motivator when results are good. It’s important to remember that data is just that – data. It’s your interpretation of the data that prompts action. How many times have you looked at results and come to one conclusion and then, after talking with your team, come to a different conclusion? Before taking any actions based on report data, you should ask yourself and your team if you have all the information needed to make the best possible decision. Only then should you consider making a change.

Next Steps

I encourage you to take a hard look at what reports you are currently using and talk to your team. Do your existing reports cover your KPIs correctly? Do you have reports that no one is looking at? Does your team understand what the reports are saying? This is a great opportunity to take a hard look at how you are measuring your progress and successes. It’s an even better time to align your entire team and make sure you all are focused on the same items. Management reports should encourage analysis, communication, and action. The other step I would encourage you to take is to start learning more about data analytics and how it can help your business. This is an evolving area of business that, if implemented correctly, will give some businesses a competitive advantage. Don’t get left behind.

If you would like a fresh set of eyes and perspective to help you and your team review your management reports or identify your KPIs, don’t hesitate to contact us. We are here to help you.

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“My success, part of it certainly, is that I have focused in on a few things.” — Bill Gates

 

New Year’s Resolutions – Be SMART

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This time of year always makes me reflective on the events and activities that occurred throughout the year.  I will even look back to see how my New Year’s resolutions panned out.  Actually, maybe the better expression is how they flamed out.  Like most people, I pick one or two things to focus on and work hard to make them happen; until I see the shiny light somewhere else and instantly forget about my good intentions.  The year of 2014 was very different for me.  I picked three significant goals and vowed that 2014 would be the year I stuck to my plan.  As I look back on the year, I can honestly say that I accomplished two of my three goals.  The third goal was really unattainable and I now know it won’t happen.  I can also honestly say that out of the two accomplished goals, one was by pure luck.  That left me with one goal that I methodically worked on and accomplished successfully.  While 1 out of 3 is a great batting average, it is nowhere near the level of success I would look for in personal goal setting.  As I think about how my personal life sometimes can be used as a lesson for the business world, I realize that my resolutions did not follow the practice of creating SMART goals. SMART is the acronym for Specific, Measurable, Attainable, Relevant, and Time-bound.  Here is a quick overview of what each means.

Specific:  Your goal needs to be specific enough for you to know what you are trying to achieve.  An example of a non-specific goal is “I want to read more.”  While that is a worthwhile cause, it is hard to pinpoint what you are actually trying to accomplish.  If you read one magazine does that accomplish your goal?  A better way to say that would be “I want to read one book a month.”  That is more specific.

Measurable:  Let’s go back to the prior non-specific example of “I want to read more.”  How do you quantify more?  Like we mentioned before, does one book get you to your goal?  If we defined the goal as “I want to read one book a month”, we would know at the end of each month whether we are on track or not.  Did you read a book or not?  Pretty straightforward.

Attainable: What if your goal was “I want to achieve world peace”?  That is also a very worthwhile goal, but the problem is it is probably not attainable on a personal level.  If you want to make a positive impact that might help encourage world peace, maybe an alternative goal could be “I want to donate one hour each month to feeding the hungry”.  If your goal is not attainable, you will quickly become frustrated and focus your efforts elsewhere.

Relevant:  A goal should be important for you and your situation.  For example, if you are an accountant and your goal is “To learn how to design an eCommerce website” you might say that is not the most relevant goal for their situation.  However, if the accountant’s hobby was website building, this could be a great goal – as long as it meets the other SMART criteria.  A goal that would be easier to quantify as relevant for an accountant is “To learn all new 2015 tax code changes to help my 2016 tax preparation business”.

Time-bound:  Your goal should have a target date to help you stay focused on achieving your results.  The timeframe should be realistic based on the goal you set.  If you take our accountant’s goal of learning the new 2015 tax code changes, a target deadline of 12 months is not realistic.  First, the new tax code will not be published until later in the year – giving the accountant plenty of time to completely forget the goal.  Second, once the accountant starts working on the goal, he realistically only has a couple of months or less to get up-to-speed to help his clients.   Creating a realistic timeframe for your goal is critical to keeping you honest and on track with your objectives.

Not hitting all of my 2014 goals was not overly disappointing to me, I picked three tough goals and did not use any methodology when I set them.  The other important thing that I remind myself is that it is ok to not always hit every goal – I’m human.  However, my chances of achieving future goals will be greatly improved if I follow the simple SMART method and then hold myself accountable.  Here’s a tip that I encourage you to think about using – share your goals with someone else.  Sure, some are personal and you may want to keep them private, but if there are goals you can share with someone else, it will dramatically increase the chances of achieving that goal.  Why?  Accountability.  You will now be holding yourself accountable for your goals to the other person.  Want to improve your chances even more?  Periodically check in with that person and give them an update and discuss how things are going.  One of the best benefits of being a Business Coach is helping people attain their goals.  If you have goals that you’d like to improve their chances of being completed – give me a call.  I’m here to help you.

 

2015 – What’s Your Plan?

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As 2015 draws nearer, many businesses are starting to work on their strategic planning.  I thought it was an opportune time to share the importance of having a strategic plan in your business, no matter what size your organization. Before we start talking about strategic plans, ask yourself a few questions to see if your business would benefit from one.

If you walked up to a handful of your employees and asked them “What is the vision of our company?”, would they all say something different or not know?

Is the business environment you are operating in changing over the next couple of years or sooner?

Do you ever hear “I don’t know why we do this, we have always done it this way”?

Do your customer’s wants and needs change over time?

If you responded yes to even a couple of these questions, your business would benefit from a strategic plan. Before we get into the benefits, let’s define what we are talking about.

What is a strategic plan?

A very straightforward definition of a strategic plan is: a formalized document describing the path of the organization.  It describes where you want the organization to go.  There are many schools of thought on how long and detailed a strategic plan should be. My recommendation is that it should be the length that you need to ensure you use it. If you create a strategic plan that fills a three-ring binder and then you set it on a shelf to collect dust – that is not an effective strategic plan. Some organizations could benefit from a straightforward strategic plan that is one page. The other consideration is what time period a strategic plan should cover. If you are just going to look at a one-year time horizon, you are probably selling the strategic plan short; unless you are in a very tumultuous industry. A solid strategic plan should look out over several years. Remember, this is planning on where your company is going. There are definitely other factors involved in the effectiveness of a strategic plan, which we will cover, but it is important to know the benefits of a strategic plan.

What are the benefits of a strategic plan?

One of the best benefits of a strategic plan is it ensures that everyone in the business is focused and working on the same goal. I’m sure you have had the scenario where you asked a small group of people to problem-solve an issue. By combining the efforts of the individuals in the group, you were able to achieve great things. What if you used that process for the whole organization? What if the entire organization focused on this one vision? Think of the possibilities – it’s staggering!

The other major benefit of a good strategic plan is it will guide your organization to use resources correctly. It will be harder for a group to go off on an unproductive tangent that is not benefiting the long-term success of the business.

The strategic plan is also a great tool for making difficult decisions. You can weigh the outcomes of a decision on how it will affect the strategic plan. This is a very powerful roadmap for everyone in your organization to use.

How do I create a strategic plan?

A great way to start the process of creating a strategic plan is with a SWOTT analysis:  Strengths, Weaknesses, Opportunities, Threats, and Trends. I won’t go into the details of how a SWOTT analysis is completed; that is a great discussion for a later time. However, it is critical that you involve the right group of people to participate. This is a fantastic opportunity to gain insights from your employees, vendors, and especially customers. They all have powerful information for you to use in crafting your strategic plan. If you want buy-in on your completed plan, and you do, the best way to ensure that is to have these groups participate. If this is the first time you have gone through the strategic planning process, I would highly recommend pulling in an outside expert to help facilitate the process. This is a great way to bring in expertise to help your group think outside the box and get out of their comfort zone. We need to remember that the long-term success of our business will require change.

What a strategic plan is not

A strategic plan is not your business plan. Your business plan is a separate document and will have very specific steps on how to accomplish what is in the strategic plan, but it is a separate document. Each department in your organization may have a business plan that helps them achieve their part of the overall strategic plan.

A strategic plan is not static – it is a living document. As I mentioned earlier, if the plan is to create a strategic plan and put it on the shelf, save your time and energy by not doing it. This is a document that needs to be a part of the day-to-day operations in the business. It can change. As our business environment changes, the strategic plan should be reviewed and possibly changed. This is an ongoing exercise and benefit.

A strategic plan is not a top-down initiative, although there must be 100% commitment from the leadership team in the initiative. The best way to get a strategic plan to not work is to not have a diverse group of participants. Beyond making the plan more comprehensive, having a representative group helps with buy-in for the whole organization.

Next steps

Now that you know a little more about the benefits and mechanics of a strategic plan, your next step is to begin the process.  This is a great opportunity to enhance the success of your business, improve employee engagement, and come up with some innovative ideas for the future.  While it may seem like an imposing initiative, the benefits of a solid strategic plan can be game-changing.  If you would like more information on strategic plans or would like help starting the process, contact us today, we are excited to help you grow!

“Leadership is the capacity to translate vision into reality.”  – Warren G. Bennis