I did a post last week about the importance of knowing your customer, your end-user.  Sometimes your end-user and your customer can are one and the same.  But sometimes your customer is the one paying you directly for your product and the end-user, person using your product, is someone else.  Either way it’s important to know everything about both who is paying you directly for your product as well as who is using your product.

Engage & Engage Often

To obtain the necessary intelligence on your customer and user base you need to engage with them.  And you need to engage with a big enough sample that is representative of the markets into which you sell.  It’s not sufficient to read about the markets or just speak to a few customers or end-users. So if you’ve penetrated vertical #1 and are planning to penetrate vertical #2 you’ll need to talk to enough potential customers and end-users in each of the 2 verticals.  By engaging with enough current and potential customers certain data points are repeated and a pattern emerges.  Depending on the type of information you’ve obtained, the pattern can represent data on usage, behavior, a specific feature set, etc. Identifying patterns helps you better leverage similarities between verticals. Pattern identification also enables you to better sell to, market to and develop product(s) for a vertical.

Analyze

Once you obtain a rich base of information about your target market(s) you can analyze the information.  The market intelligence you’ve gathered helps you make more informed decisions on product development, sales, marketing and even corporate strategy.

Grow Your Knowledge Base With Your Customer/End-User’s Life-cycle

It’s important that the engagement you have with your customers and end-users is at scheduled intervals and throughout the life-cycle of each the customer and end-user.  Each contact with a customer and end-user should for a specific objective, e.g. gauging customer satisfaction, gathering feature requests, etc.  Each contact you have with a customer and end-user builds on the information gathered previously.  This helps not only in creating a rich knowledge base but also in fostering a stronger and more loyal relationship with your customer and end-user base.

How is Based on What

How you engage with your customers and end-users is dependent on what is the purpose or goal of the interaction. For example, if the goal is to learn how your sales people are performing then you can have customers rate their buying experience through a survey. Overall there are four big buckets of things you want to understand about the markets you’re selling into:

• how the businesses operate (when selling to consumers you’d need to understand their behavior, life-style and what “a day in their life” looks like);
• how & by whom buying decisions are made (including who has influence over the decision);
• how your product is/could be used & valued;
• how your product compares against competitors.

It’s helpful to first build the type of questions you need answered for each of these 4 buckets. You can then engage with your customers and end-users in multiple ways to obtain an accurate and comprehensive representation of these 4 buckets for each of your customer and end-user profiles.

Processes = Rigor

It’s important to be disciplined in engaging with customers and end-users.  A set of processes with accompanying goals, frequency and schedule help implement rigor.   And it’s also important to be disciplined in communicating the information internally so it’s routed to the correct individual/team/department.  The market intelligence gathered can then be considered in the important business decisions you make every day about your sales approach, customer service, marketing, product development and even corporate strategy.

Over the weekend I watched Jason Calacanis interview Fred Wilson for a segment in “This Week in Startups”. Fred Wilson is a principal at Union Square Ventures based in NYC. Jason Calacanis is an Internet entrepreneur and blogger.

Jason asked Fred what advice he’d give to entrepreneurs looking to garner investment capital from his firm. Fred’s response was for the entrepreneur to build a relationship with him and his partners 6 months ahead of the desired close date and “let us watch you execute”. For example, if the entrepreneur says that they will have an application in the Apple App store in three months the expectation is that the entrepreneur will execute accordingly. In other words, deliver on what you promise.

This comment reminded me so much about what makes a good leader, a good sales person, a good marketer, a good business person, a good team member, etc. It’s doing what you say you’re going to do.

And if you do what you say you’re going to do:

• it attracts employees;
• it attracts customers
• it attracts attention;
• it increases customer satisfaction;
• it builds loyalty;
• and it builds your brand value.

It’s not the big things that make the difference it’s all the little things added up. And it’s the little things that lead to bigger things.

It All Counts, and It Starts with the Little Things

Doing what you say you’re going to do could be related to something as seemingly inconsequential as promising to send through a document. But here’s the thing, every time you make a promise like that of sending a document and you deliver on your promise, it adds up. Whether the promise be to a colleague, a client, a stakeholder or even a third-party it’s important. And each of those times you deliver on your promise you build on the good-will and value from the previous follow-throughs. It’s how a pattern is formed and a good reputation is built.

Don’t Say “The Company” Did It, It’s Everybody

It’s important that any promise made by any individual in a company – regardless of whether it be to the market at large or a single individual internal to the company – is carried through.  Because even though the company is represented by a brand it’s the individual faces associated with the company, in the form of partners, board members and employees, that create the corporate image represented by the brand. So each and every person associated with your company needs to “do what they say they’re going to do”.  This can be broken down into three big buckets:

1. It starts at the top – the CEO should be setting the example for delivering on promises.
2. A “say it & do it” culture – an environment should be fostered where every one in the company understands that saying something is going to be done is understood as a promise. Further, everyone should comprehend that whether or not a promise is fulfilled affects the corporate brand in a positive or negative manner respectively.
3. Accountability – if something promised isn’t done then it needs to be recognized and dealt with in proportion to the severity and frequency of occurrence.

It Gives You a Competitive Advantage

A good business reputation and brand are what attracts people, customers and employees. It’s also what allows businesses to build loyalty, decrease attrition and build business value.

As a business you’re typically faced with competition. And doing what you say you’re going to do helps give you a competitive advantage. And the more you execute as promised, the greater the competitive advantage. Consequently, the more likely you’ll beat out competitors for such things as:

• visibility;
• customers;
• employees;
• capital/dollars;
• air-time;
• media exposure;
• influence;

Own Up to Not Delivering on Your Promise

One last tip, if you can’t do – for whatever reason – what you said you were going to do: own up to it. Don’t pretend it didn’t happen, don’t ignore it, don’t brush it under the carpet. Guess what, people remember when someone promises something and doesn’t do it. They remember how it was handled and if it was ignored.

Everybody has bad days; everybody has days where they just couldn’t get done what was supposed to get done. But this should be the exception. And when exceptions occur they need to be recognized. Otherwise people lose faith in your word. If people lose faith in your word and you are representing a company it translates into a loss of trust in your company and a loss of credibility in the marketplace.

The Entire Interview

You can watch the whole interview here: Jason asks Fred the “What’s your advice to young entrepreneur who wants to get Fred Wilson’s firm to invest…?”question at minute 49 and the specific “let us watch you execute” response is delved into at minute 49:42.

SIDEBAR

As an aside, Fred’s blog is one to which I subscribe and full of insightful content. Although it’s geared for the tech startup world there is relevant information for a broad range of companies on financing and general management. He also runs this great “MBA Mondays” series with information that would be especially of interest to any SMB. You can take a look at recent posts here and subscribe here.

Differentiating between the responsibilities of ownership versus management is not just good business practice, it’s fundamental for any business wanting to grow and planning a future exit.

Clearly separating ownership and management’s responsibilities allows you to not only attract the key expertise necessary to grow the business but also retain the individuals necessary for this growth.  In turn, enabling these individuals to leverage their expertise optimizes execution.  Business opportunities can be maximized and enhanced results make for a more attractive proposition to potential acquirers.  A clearly defined boundary between ownership and management then translates into an increased likelihood of a future exit.

When the lines are blurred between what is an ownership decision and what is a management decision typically personnel defer to the owner instead of their superior or the defined process.  This deference occurs regardless of the scope or type of decision.  Rigor is not implemented in focusing efforts on the overall corporate objectives.  Business and individual performance are not gauged against KPIs.  Instead the default is to follow the owner’s mandate.  Any new hire, including ones within the senior executive team would have difficulty in realizing any changes to improve performance.  Performance, corporate culture and productivity are hindered.  Business opportunities are missed.

Regardless of the importance of defining an owner’s versus a manager’s role, it’s still a fairly daunting task.  As a former owner/founder who has “been there, done that” I recognize all too well how tough it can be.  Here are some steps to facilitate the process.

Step 1: It’s About Maximizing Shareholder Value

The first step is to recognize the importance of having a different set of responsibilities for each the owners and the managers.  Understand that without clearly defined boundaries no one can focus on their job. Individuals are then incapacitated from carrying out their responsibilities and leveraging their strengths.  That means as an owner, as an employer, you’re not benefitting from the totality of the individual’s value.  The company’s value cannot then be maximized, and shareholder value is certainly not maximized.

The goals as an owner should be to maximize shareholder value.  It stands to reason that you can maximize shareholder value with the separation of ownership and management.

Step 2: The Buck Stops at the Board

The next big step is to discuss the big owner type discussions in a structured and disciplined way.  A board is a good option.  As an owner, the buck stops with you.  You’re responsible for the ‘big ticket items’.  Who is running the company becomes the board’s decision.  How the company is performing becomes a board discussion.  And the strategic direction of the company requires board involvement.  So create a board structure.  It doesn’t need to be a complex structure but define the:

• Structure of the board (for a smaller business it would be mostly majority shareholders – normally any significant investor will also stipulate a board seat – )
• Frequency of board meetings
• Yearly board schedule
• Topics for discussion

Step 3: Wear 2 Hats

Sometimes owners are also involved in the day-to-day operations of the company.  Regardless of the title you need to abide by the hierarchy of the organization and confine your decision-making to the parameters of your role.

On Tuesday you might sit at the Board table with your “Director hat” to talk about strategic decisions, evaluate corporate performance or even assess the CEO’s performance.  On Wednesday you need to put on your “Management hat” and focus exclusively on your role without using undue influence because of your ownership in the company.  This is a tricky road to navigate.  But if the importance of not only bringing in “A” players but also allowing them to carry out their roles to maximize shareholder value is repeatedly remembered, the road becomes a little less bumpy.

Step 4: Preach It & Practice It

The toughest hurdle to overcome is recognizing the problem; then it comes about determining the solution, and lastly executing on the defined plan.  So communicate the plan, foster a culture that supports the owner-management boundary and practice what you preach.