So reluctantly I got dressed (even brushed my hair) and drove to the show.  I yawned and grumbled on the way, trying to decide if it was too late to say I was “sick” and couldn’t go.  Then twenty minutes into the show, my husband looks at me and says, “What happened to you?”  The reluctant concert-goer was now standing up, dancing, singing along, and woohoo-ing at max volume.  What happened indeed?  How did that complete transformation occur in a mere twenty minutes?  Then, strangely enough, it occurred to me that leaders could learn a lot about enthusiasm from a good concert.

1. Be positive – When the lead singer, Buckwheat, came to the stage he had no idea what the audience would be like.  It was Sunday night, the room wasn’t completely full and it was pretty quiet.  Would this be a fun night or an hour and a half of slow pain?  Buckwheat opened the show by saying, “I know we’re gonna have some fun tonight!  I can feel it in my bones. Can’t you?”  With an infectious smile and hearty laugh, it was impossible not to smile back.  How different would your weekly staff meeting look if you started with real enthusiasm?
2. Encourage participation – After Buckwheat told the audience that he was ready to have some fun, he asked the audience if we were ready to have some fun.  When the reply wasn’t loud enough he asked again.  Of course it helped that he flashed that enormous smile again.  Not only did he lead by example but he knew that some people need to be asked a second time before they believe that it really is OK to join in.  So next time you sense hesitation from your team, check your tone and try again.
3. Hire talented people with complementary skills – every one of the musicians on stage was talented in their own right, the trumpet player, the bass player, even the guy playing the washboard was amazing (it’s Cajun music, they really do use a washboard for percussion!).  Even more amazing was how they worked together.  The whole performance was definitely greater than the sum of the individual parts.  But I can’t imagine many situations where an exceptional washboard player would fit in with an eighty member orchestra.  Make sure that you hire people who are not only great at what they do but also have the skills that fit within your team.  A new hire with exceptional skills that you don’t need is still a bad hire.
4. Give your employees a chance to shine – while Buckwheat was definitely large and in charge, in every song there were solos from other band members.  Each one was introduced individually and given the time and space to demonstrate their unique talent.  When was the last time you set the stage for your employees to showcase their skills?
5. Celebrate success and give credit where credit is due – when each solo was finished, Buckwheat would reintroduce the player, complement their performance, and ask the audience to applaud and applaud loudly!  The players would smile and take a little bow, obviously enjoying the accolades.  Buckwheat may have written the song and arranged the performance but he knew the power of celebrating the results and sharing the spotlight.  When was the last time you publicly highlighted the performances of individual team members?
6. Say “thank you” to everyone – Throughout the entire show, Buckwheat took the time to thank everyone involved – and I mean everyone.  He thanked the band members for their great solos.  He thanked the venue for bringing them back.  He thanked the audience for showing up.  He thanked people dancing for having fun.  He even thanked the heckler for making him laugh.  At the end of the night, there wasn’t one person who was ignored.  When you experience success, make sure you thank everyone who was involved, no matter how small the part.  And recognize that even those that made life a little difficult may actually have contributed to a more positive outcome.

A Zydeco band may not be your style, but close your eyes and think of the best concert you ever attended.  Think about how it made you felt during the show, in the hours afterward, and even now when you think back on the event.  Now think about what the band did to inspire your enthusiasm for the show.  I’m sure there are many more leadership lessons to be learned from different genres.  So the next time you are trying to think of ways to inspire your team, relive a fun experience and bring on “da funk”!

www.dreamstime.com

You know your industry is broken when 52% of customers would rather go to the dentist than your store. You know you have to make a major change when the end result of your customer experience is when the customer leaves your store in handcuffs.  That was the incident that drove John Coyle, Senior Director of Innovation and Strategy at U.S. Cellular,  to develop a revolutionary strategy.  He “opened the kimono” and took a long-hard look at the status quo in the cellular industry and then asked the question, “What rational strategy can we develop to deal with irrational customers?”  Coyle believed that addressing the issues of the most frustrated and angry customers would improve the experience for all customers.  To develop their new strategy, he went through a six step process, all of which required brutal honesty and a willingness to look at what really happens not what you want to happen.  At the IE Group’s Chief Strategy Officer Summit he explained the six step process.

Step 1: Understand the Competitive Realities of your Industry

Ask what is going on in your industry.  Be honest and look at the good and the bad of the industry as it exists today.  In the cellular industry Coyne looked at a variety of factors including the nature of the competitors in the market (large and getting larger or small and being bought), source of customers (too many from churn), and changes in pricing (plan pricing continues to drop).

Step 2: Understand the Macro-economic Realities of your Operating Environment

Ask what is going on in the larger environment outside of your industry, but in the markets in which you operate.  What realities are your customer’s experiencing?  Today, in the United States, we are experiencing little to no economic growth, unemployment is high, household income is down.

Step 3: Understand the Customer Realities of your Business

More important than what are your customers think about your product and company, is how they truly “feel”.  Marketing focus groups often only get cerebral answers to questions – what customers “say” they will do. You need to figure out how to get at the underlying feelings that drive that behavior.  Observation of actual customer actions is a better indicator of true customer behavior than answers to a customer satisfaction survey.

Step 4: Use Data to Create a Metaphor and a Strategy

Coyne started with a list of the top customer frustrations which had become the status quo in the industry, such as high cost replacements to cell phones and excessive overage costs.  His strategy was to develop innovative solutions to those frustrations.  From there he took the concepts and found a metaphor to describe the approach.  They used the human body as his metaphor – on top of a backdrop of an illustration of a spine, each of the frustrations was a painful, hurting vertebra.  The solutions were grouped and linked to an expanding heart.

Step 5: Create the Irrational Case for Irrational Behavior

Identify all the possible results of NOT changing.  For U.S. Cellular, that meant going out of business, being purchased by one of the big providers, or having more customers throwing cell phones at their employees.  None of these were desired outcomes.

Step 6: Create the Rational Case for Rational Behavior

What are the positive outcomes of making a change?  What are the business benefits?  Make the business case for making the desired changes. The savings from reducing customer churn and reducing the costs of marketing to acquire new customers was enough to convince the C-suite to adopt a new business model based around customer rewards.

U.S. Cellular has just rolled out their new strategy that involves breaking out of the cellular status quo with lower cost replacement phones, more frequent phone upgrades, capped minute overage charges, and no contract renewals.  The rollout is too recent to know if it will be as profitable as they would like.  But developing a process that embraces change and proactively improves the customer experience can only lead to continued success.

What have you done to break through the status quo in your industry and your business?  How can you revolutionize the customer experience?  Share your ideas and let’s see just how happy are customers can be!

According to American Express Open 29% of all US businesses are owned by women and their numbers are growing by 1 and a half times the national average.  “There are over 8.1 million women-owned businesses in the United States, generating nearly $1.3 trillion in revenues and employing nearly 7.7 million people.”    However, while more women are starting new businesses, fewer are getting start-up funding. According to a  study by University of New Hampshire , only 13% of the $20.1 billion invested in 2010 went to women-owned businesses.  Fortunately for women entrepreneurs, the Pipeline Fund Fellowship (PFF) is trying to address the gender gap on two fronts, by increasing the number of women  angel investors, and second, by increasing the funds available for women owned, for-profit, social ventures.

The Pipeline Fellowship Fund is the brainchild of Natalia Oberti Noguera, a young woman with an economics degree from Yale and a passion for social entrepreneurship.  It would appear that her passion is resonating throughout the investment community.  There were fifty applications for the ten slots available in the inaugural six-month program to educate, train, and mentor women to become angel investors.  The ten women selected come from a variety of backgrounds including technology, dentistry, finance, and government relations.  They hold degrees fine arts, political science, philosophy, economics, and law.  While several have an MBA, the common thread that ties them together is the desire to support women entrepreneurs.  According to Ms. Oberti Noguera, the women were particularly drawn to the cohort model, where the fellows learn from and support each other and make decisions as a whole.

The six month program is intensive and involves three main components – education, mentoring, and practice.  The fellows meet monthly for three hours to discuss topics related to investing such as portfolio strategies, due diligence, and term sheets.  The education sessions are presented by a variety of guest speakers including Morgan Simon, co-founder and CEO of Toniic.

In order to provide an opportunity for additional learning and support, each fellow is paired with their own mentor.  The mentors are made up of five men and five women.  While the fellows are all women, the selection of men as mentors was deliberate, according to Ms. Oberti Noguera she wanted “to match fellows to experienced angel investors and integrate women into a male dominated network.”  The mentors are all experienced angel investors, and some bring additional experience and background include serial entrepreneurs, a lawyer, and an investment banker.  In addition to their shared background as angel investors, they all have in common a willingness to “share their stories, lessons learned, and best mistakes.”

Finally, the fellows will practice what they preach.  As part of the acceptance into the program, each of the ten fellows had to commit $5,000 to be invested in a woman-owned, for-profit, social venture.  The practice will come in to play this week when the fellows host the PFF Pitch Summit on Friday, June 17.  The Pitch Summit, being held at the Irvington, New York headquarters of Eileen Fisher, Inc., is an opportunity for eleven groups of women entrepreneurs to present their business plan in hopes of earning a $50,000 investment. The presenters are:

• 6dot – tools designed with the blind in mind for easy distinguish common hosehold items
• The Crazy Kiwi – convenience store and cafe with daycare
• DiaperBuds – individually wrapped, vacuum packed disposable diapers
• Gifts That Give – offering high-end brands across social networks donating 20% of every purchase to the buyer’s cause of choice
• Just Shea – increasing the safety and income of women working in the shea trade in Ghana
• Nomi Network – providing career and employment opportunities for survivors and women-at-risk of sexual trafficking
• Pengo – online lending platform for SME’s in emerging markets
• PhilanTech – online grants management system for funders and non-profits to streamline the grants management process
• PROUDgirls – online community and offline enrichment program to develop girls 13-18 into tomorrow’s leaders
• Skwikee – YouTube fed, Facebook played social gaming site where content and rewards are controlled by contributors
• Solar Light Pillow Project – providing cost-effective solar lighting to people without regular electricity and victims of natural disasters

In preparation for the Pitch Summit, the fellows had to bridge the gap from theory to reality.  They had to design an application form, identify criteria for evaluating submissions, perform initial research, select attendees, and develop a framework for evaluating the presentations.  The fellows will continue their education with workshops on due diligence and valuations.  They will complete the application of their learnings in the fall of this year when they will select the winning venture to receive $50,000 in capital.

While the inaugural group won’t officially graduate this fall, the success of the program is already evident.  The interest in the PFF has been so high there will be a second group starting in New York,  a third in San Francisco, and there is interest in launching the Pipeline Fund Fellowship in Washington DC, Chicago, and Boston.

Of course, it means Strengths-Weaknesses-Opportunities-Threats

When was the last time you did a SWOT analysis for your business?

Uhm, I’m not really sure.

So how did you learn what SWOT analysis is about?

Oh that’s easy, we covered it when I was getting my MBA.

I have conducted this informal survey on a regular basis, the results are always the same and yet it still surprises me.  If SWOT analysis was important enough to teach in b-school, and important enough for you to remember, why isn’t it important enough for you to implement???

What SWOT Analysis really is…

If you think of the business world as a large jigsaw puzzle, do you know what puzzle-piece you are and where you fit in the picture?  SWOT analysis is a way of looking at the larger environment surrounding your business and where you fit within that environment.  The external analysis includes evaluating the opportunities and threats that exist in your industry or the world at large that can impact your business.  It is also a way of identifying what you do well, really well, and what you need to work on.  The internal analysis focuses on the strengths and weaknesses of your particular operation.  Knowing what you are good at and how you fit in the bigger picture is critical to developing a strategy for lasting success.

What SWOT analysis can teach you about your small business…

• Understanding your Strengths serves as the basis for your competitive advantage.  Figure out what you do well and do more of it!  Make sure you communicate your competitive advantage to the world in all of your marketing materials.  Sing your praises to your employees.  If your employees really don’t know what you do well, how can they help your business achieve its goals?
• Identifying your Weaknesses gives you an idea of what you might want to work on.  The old adage is true, you are only as strong as your weakest link.  In some cases, a weakness may be something that you have purposely chosen not to focus on, say bricks and mortar if you are an online operation.  However, if you take an honest look at your operations, from all angles, and within all departments, you may find areas that need to be improved in order for you to be the best business that you can be, for example do you know how long it takes for a customer to get a response to a question via e-mail versus the phone?  How does your response time compare to your industry averages?
• Pinpointing Opportunities identifies areas for growth. Often business owners get so focused on their day-to-day operations (and rightfully so) that they may not see future opportunities.  Being one of the first to take advantage of a new market trend provides you with the greatest chance for success and profits.
• Considering Threats before they happen will allow you to create a good defense.  There is nothing worse for a business than being caught by surprise AND then not knowing what to do.  Chaos is definitely not good for business!

Step 1: Assemble a SWOT Team

Include members of your organization from all departments and all levels of the org chart.  The greater the variety in the perspectives, the more honest and accurate the picture of your business will be.

Step 2:  Pick a Meeting Time and Place

Pick a neutral location where all team members will be comfortable.  And pick a time that is convenient to the majority.  It’s hard to get people to focus on the task at hand if they are continually feeling the pressure of time and looking at their watch!

Step 3:  Set the Ground Rules

Everyone should be empowered to say what they really think without fear of retribution.  There is no “wrong” answer.  You want honesty and realistic comments at all times.  More answers are better.  You may get opposite responses from different departments – talk out the discrepancy.  Find out why there is a difference of opinion or perspective.

Step 4:  Strengths

Set a positive tone by starting with what you do well within your organization.  Cover topics such as your product line, marketing, unique selling proposition, resources, reputation, organizational structure, culture, location, operations, knowledge and experience, qualifications and certifications, financial resources, patents and intellectual property, mission and philosophy.

Step 5:  Weaknesses

Now it’s time to be honest.  Open up the kimono and take a long, hard, honest look at the business and ask yourself, “What can we do better?”  Where are there gaps in what you do?  Or in some cases, a strength may be a weakness.  For example, you may say that being small is a strength because you can respond more quickly to customer demands.  But being small may also be a weakness if you cannot support large customer orders.   Think about the disadvantages of your value proposition, vulnerabilities, issues, and distractions, and anything that could be improved.

Step 6:  Opportunities

Back to the positive side but this time from the perspective of what is going on outside your company in the world at large.  What is happening in your industry that you might be able to take advantage of?  What are the current trends in the world that might benefit your business?  As gas prices continue to climb, how can you capitalize on the market’s desire to drive less?  Consider trends in technology, niche markets, possible partnerships or joint ventures, new product development, lifestyle trends, competitor weaknesses, and global influences.

Step 7:  Threats

Changes outside of your organization can present a clear and present danger for your business.  Identifying a potential problem may give you the time to protect yourself from the impact.  Consider where you may be exposed from the regulatory, political, environmental, resource, and financial perspectives.

Step 8:  Analysis

The last step is the most fun – what does all this information mean?  It’s time to turn the data into workable strategies for your business to pursue!  We’ll mix up the acronym S-W-O-T to identify new strategies for your company.   After having developed the SWOT answers, give your team a week to ponder what the information means to them and how it can be used to improve your operations.  Consider the following 4 approaches to overlap and analyze the data:

S-O Strategies:

Look for opportunities that fit with your organization’s strengths.  Do you have a product that could be marketed to a broader audience?  Could you establish a partnership with a company with a complementary product line?

W-O Strategies:

Take steps to overcome a weaknesses to take advantage of an opportunity.  If you have high turnover, what could you do to increase you employee engagement and loyalty that would in turn provide a more consistent and positive sales team?

S-T Strategies:

Identify ways that your existing strengths could help mitigate external threats.  If there is a new competitor entering your market, how can you capitalize on the fact that you were one of the first companies to provide services in this space?  How will you use your knowledge and experience to position yourself in a more positive light?

W-T Strategies:

Identify the “perfect storm” issues – what are the external threats that could play on your weaknesses and do serious damage to your business?   Develop a prevention and recovery plan so that if the worst happens you have a chance of survival.  If your business is online only, you are highly susceptible to technology failure.  Do you have a disaster recovery plan?  Would you know what to do for you, your employees, and your IT location was destroyed by fire?

So now that you know how easy SWOT analysis is and the benefits to your business, what are you waiting for?  Call your team together and get started!  And remember to mark your calendar to update your SWOT analysis every year.  Think how great your business could be if once a year you and your team focused on developing and implementing strategies to be a better business!

Fortunately, managing your cash flow is not as difficult as you might think.  It does not involve a crystal ball, strong-arming your customers, or pleading with your vendors to extend their terms.  It does involve some discipline, research, and a little bit of time.  If having a cash-flow projection keeps your business afloat in this difficult economy and let’s you get some much needed rest, then I’d say that’s a small price to pay.  You can take the first step to managing your cash flow by understanding it’s composition.

What Affects Cash Flow?

Cash flow is not just about whether you have money in your checkbook.  If only it were that simple!  Your checkbook balance is not a static figure, it changes every day.

The first issue making cash-flow difficult is timing – when is money coming in or when is money going out.  The cash-flow nightmares start when we don’t understand the timing.  Just because a customer is supposed to pay you within 30 days doesn’t mean they will.  If you are counting on their payment to make payroll and it doesn’t happen – Yikes!

The second issue making cash-flow difficult is knowing how your business operations affect cash-flow.  Many businesses experience a major cash-flow crunch when they are growing.  Sales are way up so how can cash be way down?  If your business provides consulting services you have to pay your employees for doing the work.  You pay them as they work for you.  You don’t bill you client for several weeks, when the work is completed.  If you’re lucky, your client pays you within 30 days.  So when they finally pay you it could be 2-3 months after you paid your employees.   Growth is ultimately good for your business, but temporarily it creates a cash-flow nightmare!

Do You Know Your Real Cash Balance?

If your checkbook is not up-to-date, you have no idea where you stand.  Every day you should update your checkbook balance for every single check written and every deposit made.

“That’s too much work.  I’ll just call my bank.” Nice try, calling the bank and asking for your balance doesn’t work.  They’ll tell you what they have in your account.  But that’s not the real balance.  The bank doesn’t know what checks you have written and not mailed, or what checks you have written and your vendor hasn’t cashed.  They don’t know about the deposit that’s been sitting on your desk for the past 3 days!

And when was the last time your checkbook was reconciled?  The minute you get your bank statement you should reconcile your checkbook!  Reconciling is the only way to know if there are errors – yours or the banks!

What Does Your Cash Flow Look Like Next Month?

If you can’t answer that question you may have a problem.  And don’t tell me you need a crystal ball!  Every singly business should be preparing cash-flow projections on a monthly basis.  Cash-flow problems hit every business.  It’s not a matter of if you will have a problem, it is a matter of when!

Having a cash flow projection will give you a warning ahead of time, as to when you won’t be able to pay your bills or your employees.  But with enough advance notice, you will have time to figure out a good solution.

If you are ready to prepare a cash flow projection, download this report, Managing Cash-Flow When Money Is Tight, from The Sustainable CFO. If you’d rather have someone else prepare a cash-flow projection for you, contact us at jelder@sustainablecfo.com or 410.231.1881

Sometimes a business will plateau at a certain level of sales or profitability.  An outside pair of eyes can often see new opportunities for growth.

2.  You haven’t prepared an annual budget

A budget should be your yardstick for measuring your performance.  A budget provides comparative data to help you determine whether your business is on track.

3.  Cash-flow is unpredictable

Cash flow can be an unruly monster.  As a business owner you need to know ahead of time when there might be shortfalls.

4.  It’s time to prepare a strategic plan

You wouldn’t drive across the country without a map, why run your business without a plan?

5.  You need to find financing for your business

If you need a loan, a line of credit, venture capital, or mezzanine financing then you need a CFO to prepare and present the financial reports creditors are looking for.

6.  Financial statements are going to be audited

If you have a CPA audit your financial statements, you can save time, money, and headaches by having your financial information prepared ahead of time.

7.  Business performance is inconsistent

Your sales may be growing but not your bank account.  Your employees are working longer hours but there’s no increase to profits.  A CFO can analyze your financial results and locate the issues.

8.  You don’t know what your financial information is telling you

You started your business because you are good at what you do, not because you’re an accountant.  But you do need to understand what the numbers are telling you so that you can you be proactive about growing your business.

9.  Business is  growing fast

Growth is great!  But it also costs money and cash-flow.  Do you know how much extra cash you need to support your growth?

10.  Need to control costs

Cutting costs should be done strategically, not with a chainsaw.  We can help identify areas for cost-saving that will still allow your business to operate effectively.

Regardless of which of the 10 issue are affecting you and your small business, a CFO can help find the answers and help you sleep better at night.  You can even start with a part-time CFO to get all the expertise you need at a cost you can afford.

With pennies hard to come by these days, every step you take to improve your productivity can add dollars to your bottom line. A simple way to increase your efficiency is to use checklists. Checklists ensure that tasks get done the same way every time, in the shortest amount of time possible, and with a minimum of errors. They can help keep different departments on the same page. Checklists can even be used as a training tool for new employees. The benefits of completeness, consistency, and timeliness can be felt immediately.

When a Task Becomes Second Nature, We Can Get Complacent, Forgetful

It is easy to fall into the trap of saying, “I’m an expert. I don’t need a list to remind me what to do.” Unfortunately, that’s when you need a checklist most. When a task becomes second nature to us, we can get complacent and forgetful. How many times have you gone to the grocery store without a list and forgotten the most important item you needed? Missing one thing won’t kill you but it takes a lot more time when you have to go back to the store a second time. A checklist should not be viewed as a crutch, but as a useful tool to improve efficiency.

Preparing Your First Checklist

To begin using checklists in your business, start with a complex task, or one for which steps are frequently forgotten. Ask those familiar with the task to write down the steps for doing it. Have several people review the list — one familiar with the task and one who is not. The person familiar with the task will help fill in missing steps. The person unfamiliar with the task will help clarify steps. If multiple departments are involved, have each department create their portion of the checklist. Then get everyone in the same room to consolidate into one master list.

One final note,  a checklist should be all-encompassing, whether or not you perform each step every time. It is easier to cross off an unneeded step than to try to remember to add it.