Posts Tagged ‘cultures’
Word Of Mouth Marketing-What?
Obtaining and retaining loyal customers is about developing relationships. Companies spend $millions annually on advertising, hoping to influence the buying habits of their prospective customers.
Advertising does not build relationships, it only hopes to influence the moment and convert those few seconds into a buying decision for a product. Word of Mouth (WOM) is the best and most reliable method of promoting a product.
A Testimonial from one person to another brings with it a level of positive bias and a tested experience. These endorsements or referrals are provided from one trusted person or company to another. It is the trusted relationship that makes the recommendation more credible.
Word of Mouth (WOM) relationship building is growing rapidly due to wider use of social media applications (e.g. blogs, facebook, myspace, twitter). How can your company use a WOM approach to expand your loyal customer base? I am working with an organization that has some new and innovative ways to use this technology to help businesses grow – I will be writing more about this approach next month. To provide a little more introduction and background to WOM, I am offering you a FREE look at an e-book that is the first of a series on how to use digital applications to expand your presence in your market.
Click here for your FREE eBook access: http://wom10.com/Pages/business-tools-book
Grow Your Company with PR
In 2005 I consulted for a start-up that was owned by an entrepreneur who had a public relations back ground. I learned the value of good Public Relations (PR) and since then I have always consider it the next best form of advertising. I believe the best form of advertising is word of mouth.
PR if done correctly can be a game changer for an organization. PR can also backfire if not taken seriously and can have a negative impact on your image with prospects, customers and your industry. I recently read a blog post on bNet that outlined the 10 Breakthrough PR Techniques from a Master. The interview with Lou Hoffman, President and CEO of Hoffman Agency, provides an excellent set of techniques and examples of how to use PR to maximize its effectiveness.
Click here for the interview: http://blogs.bnet.com/ceo/?p=3620&tag=content;col2
What are your experiences, positive or negative, with PR?
The 12 Steps of effective businesspeople
- Do your work before you play.
- Always do more than others expect of you.
- Never quit trying to become better at something.
- Be willing to do the things you don’t like to do in order to achieve what you want.
- Be willing to accept failure and disappointment as a part of learning.
- Recognize that there is no easy or quick way to gain experience.
- Take time to appreciate the things you usually take for granted.
- Be honest in everything you do and honor your word when you make a promise to do something, EVEN if it is inconvenient.
- Respect the feelings and property of others.
- Have a desire and take action to help others.
- Never stop learning.
- Recognize that situations in life are never as bad or as good as they may seem and that you are never alone.
Where are the VC’s?
A question I hear often is “how do I find a VC to invest in my company?” First, there are many different institutional equity investors, both private and public. Venture Capital companies are best known by start ups and early stage companies, because VC’s are most likely to be found investing in these riskier ventures. With the dot.com bubble bursting and the current recession, it is much harder to find the VC we remember from the past decade. The reasons they are harder to find is that many of them have subtly lowered their interest in ventures (vC) or have dropped it all together and now look more like a merchant bank. If you approach one of these “new breed” vC’s, you will find them wanting evidence of an existing, sustainable customer base, revenues and patent office action on all intellectual property. For the legacy VC’s who are still willing to take more risk and keep the capitalize “V” in VC, you will probably find them looking for the following key elements before they’ll take a meeting with the entrepreneur; a solid product idea that is scalable, a prototype or working model of product or service, good chemistry with entrepreneur and or management team, and the entrepreneur and/or management teams who are willing to share in the risk (having skin in the game with their own dollars or willing to take less ownership). Most VC investors state that the value they bring to the company is operating/development capital (money), leadership (in the form of a majority of your board of directors) and contacts to help move the business forward more effectively. They are very good at the first two offerings, but don’t expect them to do the third very well (my experience anyway). Remember, bringing an equity investor into your company is the process of selling large portion of your company to someone who is looking to get at least a 10X multiple on their investment with 3-7 years depending on the opportunity.
The “5″ P’s of Marketing
There are many misconceptions as to what is marketing and what it can do for an organization. Marketing is best described as a process intended to increase the perceived value and to stimulate demand for a product. A product, in our case, will mean both a physical product and a service, which is then translated into revenues through the process of sales. For an organization to be as effective as possible, starting as early as the initial product design phase, it is important to consider how it plans to market its product,
Most students learn about marketing through an explanation of the “Four P’s of Marketing”, as first mentioned by E. Jerome McCarthy. However, this article expands the discussion of the marketing viewpoint to include a fifth “P.” These five P’s should be included in any discussion about promoting the organization’s products within a target market. Our “five Ps” of marketing are:
- Product
- Price
- Place
- Promotion
- Profitability
Product- A product comprises a physical item or service which an organization produces for sale to customers within a selected market, whether directly to consumers or through wholesalers/resellers, retailers, original equipment manufacturers (OEMs), value-added resellers (VAR), etc. Factors that should be considered in marketing the “product” are the following:
- Form
- Functionality
- Quality
- Packaging
- Support
- Warranty/maintenance/repairs
- Branding
Form - The look and feel of a physical item or the description of a service. How does the product look to the potential consumer? If the intended consumer cannot visualize how they will benefit from the product at first glance, then the demand for the product must be generated from one of the other attributes of the product.
Functionality- How does the product function? What does it do? How does it do it? How does the product benefit the intended customer? How does the product surpass the functionality of that offered by the competition? Marketing the functionality of the product is a key point in most campaigns. If the form factor is not distinguishable from the competition’s product or service, but there is a difference in functionality, then a neutral form factor may not be a limiting issue.
Quality- How well does the product function or benefit the customer? Is it constructed in a way that the customer believes it is worth purchasing? Does the customer perceive that the service will benefit her? Does the way it is presented give the prospective customer the feeling of a quality program? Will the product hold up over time? Can it be reused repeatedly? Are the benefits of the service sustainable over time in order to make the expense worthwhile?
Packaging- Is the product packaged in a way that it catches the eye of the prospective customer? Does the packaging reflect other attributes of the product (functionality, quality, benefits, price, etc.)? Does the packaging design reflect the mission of the organization as well as the product attributes? Packaging always should be considered as a piece of advertising for both the product and the organization.
Support- Customer support is a significant product attribute for customers. The customer wants to know that he will have support if he should have questions or problems with the product. Is there personal support through a toll free number? Is there email support? How about the availability of a frequently asked questions (FAQ) listing? Is there a physical location where customers can go for assistance? Often, customers will pay a higher price if they know they will have good customer support available.
Warranty/maintenance/repairs- In addition to support, how well does the organization stand behind the quality of its product? How comprehensive is the warranty and what is the warranty coverage period? How easy is it to return the product to have it maintained, or to return for repair or replacement? Not mentioning these benefits may cause a customer to shy away from the product. Assuming all other attributes are comparable, good warranties sell products. Repeat sales come from customers who have been treated well when products have problems. How the customer is treated when a product fails may determine if that customer makes another purchase.
Branding- How recognizable is the name of the organization or product? Is the organization or product logo recognizable to most customers? How powerful is the brand? Can it create a market segment such as Kleenex, Coca-Cola, Google, etc? When you need a tissue, do you ask for a Kleenex or do you ask for a tissue? When you are thirsty, do you ask for a cola or a Coke? If you are searching the Internet, do you say you are searching it or are you “Googling” it? These are all examples of extensive branding efforts that have survived the test of time. In order that customers ask for a product by brand name, the goal is to have a brand that reflects the attributes of the products provided by the organization.
Price- Product pricing should always be developed through the collaboration of many disciplines within an organization. Make sure that the price established will generate adequate profits or returns to the organization after all expenses, including those costs required to produce and sell the product. Pricing strategies are key issues when developing successful marketing programs and often consume much of the marketing attention in many organizations. Pricing schemes should include, at a minimum, the following items:
- Base Price
- Discounting
- Discrimination Pricing
Base Price- The price the organization believes is a reasonable starting point for the market they are approaching. This is often called “suggested retail price” (SRP) or “manufacturer’s suggested retail price (MSRP). The base price is the level on which all further reductions, for whatever reason, are based. The base price should be at a level being anticipated by the market we are attempting to penetrate.
Discounting- Discounts are price reductions that are extended under defined circumstances. The primary reasons for providing discounts are to increase the number of units sold or to stay competitive within a price-sensitive market. A commodity-based market is an example of a price-sensitive market. This is true because in a commodities market there are very little product function or feature differences between sellers, so the price is the primary differentiator.
There are many ways to provide discounts that are tailored for the purpose of stimulating sales:
- Volume discount-Offering a lower price based on the larger number of product units being purchased or the total dollar volume of the order (can be retail or wholesale).
- Seasonal discount-Offering a lower price for products that will not be demanded due to entering a new season, e.g., summer clothing sales in the fall..
- Bundle discount- Offering a lower price when a customer purchases more than one product at the same time.
- Special Pricing- Offering a special price is a form of discounting that is based on a particular circumstance. Special pricing may be offered to an organization that partners with the selling organization to cross-sell each other’s products. Also, special pricing may be offered in a co-branding agreement, which benefits both companies promoting their products or organizations into the future.
Discrimination Pricing- Price discrimination is the process of offering the same product to different customers at different prices. Price discrimination is done every day, and the only time it becomes visible is when someone calls attention to it. If an organization sells its product to one organization under the exact same terms as to another organization – but for a different price – it is practicing price discrimination.
There are dangers to the selling organization for treating the organization’s customers differently. An organization that is exposed for using this practice may lose customers due to their dissatisfaction with this inequality of pricing. There are state and federal laws that protect consumers and organizations from pure discriminating practices, and an organization may be subject to punitive measures if found guilty of willful price discrimination.
Place- “Placing the product” implies focusing on all of the distribution components required to deliver the product to the customer. When it comes to placing the product, there are two primary issues that may impact an organization:
- Product availability
- The cost of moving product to each market
Customers do not want to wait for a product. Instead, they want it is stock when they are ready to purchase it. Furthermore, organizations do not want to pay a high cost to get the product to those customers. To balance these two issues, there are four factors that come into play. These factors include:
- Transportation
- Warehousing
- Distribution
- Order/Inventory Control
Transportation- How are the products getting to the customer, to distribution centers and to warehouses? Which form of transportation highway, rail, air or sea is the most cost effective to satisfy the needs of the market? Shipping by sea can be the least expensive way to move product overseas, but it may take too long to replenish inventories from the customer’s perspective. In many cases, there can be a combination of transportation methods used, such as sending by rail to a distribution point and then trucking to the customer location.
Warehousing- Storing products as close as possible to the greatest number of prospective customers is the overall objective of warehousing.
In order to satisfy customer orders, where is the best place to store product in the most cost effective manner while meeting customer demands?
Different products have varying warehousing requirements, e.g., heavy duty equipment, electronics, perishable goods, etc. Organizations shipping product by rail may find warehousing requirements need to include being next to the rail-line or the availability of a rail spurs to allow for more effective material- handling activities. Long haul trucking methods for moving product cross country may require warehousing near major interstate highways.
Distribution- Developing the best distribution channel for an organization’s product is important to how an organization will market its product and to what degree. There are four primary distribution channels. They are:
- Direct- Selling direct to customers through company stores, catalog, Internet, door-to-door, etc.
- Agents- Independent individuals or groups may sell product on behalf of the organization to customers, distributors or retailers. Agents usually do not purchase product from the selling organization. Generally, they take orders and the selling organization fulfills those orders and pays the agent a commission or other form of compensation.
- Distributors- Independent individuals or groups that purchase the product directly from the selling organization mark up the price for their profit margin and resell to the customer. Distributors are also called wholesalers or resellers.
- Retail- Retailers buy product from the selling organization or agents of the selling organization and sell directly to the customers.
Order/Inventory Control- The order/inventory control process is essential to ensure that product orders are properly handled through delivery to the customer and that adequate quantities of product are available to fulfill orders. Use of real-time computer systems or Internet systems can provide instantaneous communication between customers and suppliers. Orders can easily be tracked and customers can feel more confident that their orders are going to be fulfilled properly. Inventory control systems work through the supply chain to ensure that components and finished product quantities are managed properly so that product is available when the customer places the order.
Promotion- Promotion is the process of communicating information about the organization and its product to target markets with the goal of stimulating demand and, therefore, generating additional sales of product. Promotion represents several different forms of marketing communication. Key factors within the marketing communications tactics are as follows:
- Advertising
- Sales Promotion
- Public Relations
Advertising- Advertising is the method used by an organization to publicize and position products to their target market, including product launches, image and brand building. Organizations control the content, the target audience and timing for their advertising, all with the intention of reaching the greatest number of potential customers. Forms of advertising include media (TV, Radio, Print, etc); direct mail, brochures, car/bus signage, bill- boards, handouts, web site/web networks and a direct sales force.
Sales Promotions- Sales promotions include several communications activities that attempt to provide added value or incentives to consumers, wholesalers, retailers or other organizational customers in order to stimulate immediate sales. These efforts are an attempt to encourage product interest, product trials, and purchases. Examples of techniques used in sales promotion include event sponsorships, coupons, samples, premiums, point-of-purchase displays, contests, rebates, and give-a ways.
Public Relations- Public relations (PR) consist of a variety of activities that are intended to promote a positive relationship or image with customers and prospective customers. Image building and maintenance is the role of public relations. Tools used include press release announcements, trade articles, charity events or contributions, and integration with promotional activities.
Profitability- The fifth “P” of marketing is Profitability, which is calculated as the sales price minus all costs associated with creating and selling the product. What does marketing have to do with profitability? Everything! Marketing people must keep all their activities geared toward the primary goal of creating demand for and the selling of a product at a price that generates the profits planned during the earliest stages of product design. All too often, marketing people are only concerned about sales, market penetrations and customer response. However, if all these numbers are excellent and the product is selling below profit targets, the organization will miss its profitability goals.
How does marketing make such a miscalculation? Occasionally, marketing has full authority for pricing and discounting. If the product base price is not set correctly or if this base price is discounted improperly, then the end results are reduced profits. There needs to be a check and balance with leadership to ensure that pricing contributes the correct and anticipated (budgeted) profit margins.
Often, promotion and advertising activities that were planned to generate sales are deemed inadequate; and, therefore, new programs are put in place and executed at a higher price without making a change in selling price. The effect of this tactic is lower profits.
Whether the organization has a product or a service for sale, in order to be in the most advantageous position to convert prospects into customers, the marketing department must focus its efforts on Product, Price, Place, Promotion and Profitability.
The five Ps are the core disciplines to an effective marketing function within any organization.
“You Get What You Pay For”-Rewarding Incorrectly Will Hurt You!
Most organizations will say they reward “results”, yet that is not necessarily true. Organizations establish a formal or informal process to incentivize their workforce to achieve a desired level of performance. Depending on the size and culture of the enterprise, this compensation plan may include all employees, just management or something in between. All such plans establish some target or metric that the company measures in order to determine if the plan’s thresholds are achieved or not. The establishment of these metrics is where the error usually occurs, which truly hurts the overall performance of the company. The metrics will fall into one of three categories; Intentions, Actions and Results.
Intentions-These are deliverables that are planned to be delivered in the future. This is the weakest of all metrics. It is difficult to see how an organization could build a compensation plan around rewarding for nothing more than “hope”. Yet, many corporations reward senior management for just that, “they had great intentions”. We even re-elect politicians based on their “intentions”, and we seem to accept that metric over and over again. I am not sure why? If you want to grow a culture of discontent within your company, reward your management for intentions.
Actions-These are deliverables that are focused on activity. An associate of mine uses the tag line “doing=1/2 done”. One of my favorite sayings is “don’t confuse efforts with results”. Rewarding actions or effort is a way to move initiatives forward, but not a way to get them done. I can see a compensation program that would breakdown a larger project into steps or stages, and reward based on the number of steps completed, but there are very few other examples to support rewarding actions. Rewarding actions will not hold the workforce accountable for the end result, yet there are a large number of organizations that do just that; reward the starting of something, but not the completion of it. Unfortunately, it appears many governments (local, State and Federal) seem to have adopted this method for rewarding their agency officials.
Results-Results are definite deliverables. These are usually dates, dollars, ratios, numbers or other such “objective” measurements. They are tangible events that can be tracked and measured. Compensating your management and workforce based on results will provide a greater level of accountability to your company. Without accountability, the enterprise will aimlessly move forward in a manner much like a sailing ship without a rudder.
Shifting From Accountability to Entitlement-Whose fault is it?
I recently read an article about the shift within corporate America from a workforce that expects to be held accountable, to a workforce that looks for entitlement. Why should we even be concerned with this shift? We should be concerned since a growing level of entitlement within our population is having an impact on the level of productivity found in the United States workforce. In my opinion, there are several reasons for this shift. A few key reasons for the shift to an entitlement attitude are Diluted Leadership, Unionism, Executive Compensation Levels and Government Growth. Let’s explore how these factors are contributing to this severe problem for the corporate America:
Diluted Leadership-Unfortunately I’ve noticed a decline in the level of “Leadership” in the US over the past few decades. Too often, C-Level executives are more concerned about their own careers and compensation than the overall performance of their corporation. Political Correctness continues to be a filter used before decisions are made and actions taken. These diluted leaders are not leading. You don’t find them rolling up their sleeves and taking a position in front of their company, saying “follow me”. No, they are behind closed doors, sending out others to experiment with their plans, and if successful, then they surface to gather the spotlight. I like to call these diluted leaders “empty suits”, and there are many major fortune 1000 companies that have employed these empty suites. True leaders set attainable deliverables and hold everyone accountable to the process of reaching those deliverables, even themselves. They are not afraid of holding themselves and their executive team to the same levels of accountability as they do the rest of the workforce.
Unionism- Although this may not be popular with unions and some union members, I believe that most unions have outlived their original purpose and are not providing constructive benefits to their members. There are certain skilled trade unions that maintain standards and require continuing education to upgrade the skill level of their members, but a vast majority of unions go far beyond that objective. For example, anytime a union recommends a strike to its membership, and goes as far as to whip them into a lather to carry out a strike, I believe it has gone beyond its usefulness to its members, the companies employing their members and the economy. My experience with unions over the years has convinced me that no one wins when a workforce goes on strike. The enterprise loses momentum and both the company and the union members are often unable to recover from the financial losses they incurred, possibly for several years.
Unions can promote an unhealthy level of entitlement within their membership. Ironically, if there was true corporate leadership (not diluted leadership) within more companies, unions would be less popular.
Executive Compensation- Nothing leads to the heightened level of entitlement thinking in a company more than an unreasonable level of executive compensation. A few research studies that I have read state that over 75% of the fortune 500 executives receive over 400x more than the compensation of the average American worker. European and Japanese executives have been reported to receive approximately 130x and 40x their respective average workforce compensation levels. When a workforce sees under-performing executives receive bonuses or exit packages in the $millions, it is difficult for the non-executive workforce to be understanding when the company then claims that they do not have the finances to compensate the average workforce more fairly. The crux of it is that although the general workforce may actually be compensated fairly, because the executive levels were compensated so unreasonably high, a sense of entitlement and discontent grows within all levels of the company.
Government Growth-Governments at all levels, Municipal, State and Federal are growing. One study recently reported that approximately 25% of the total US workforce is employed by government or governmental support organizations in one way or another. Despite good intentions, governmental organizations have never been shining examples of efficiency and effectiveness. A growing number of workers are searching out government positions because the job security and benefits are generally higher than the private sector, often with fewer required work hours-further fueling the entitlement attitude. Less accountability, union protection, lower levels of accountability, political filters applied to performance and a “don’t make waves and you’re safe” culture is a toxic breeding ground for entitlement attitudes.
Personal comments: My fear is that we are slowly following in the footsteps of the European Union. In the book Mind Set! (John Naisbitt), he states that the European Union leaders commited themselves to creating “the most competitive and dynamic knowledge-based economy in the world by 2010″. What have they accomplished since that commitment; Higher taxes and bigger governments, less innovation, slower productivity growth, restrictive labor laws and declining export market share and rising protectionism. Naisbitt further states “Europe is increasingly losing ground in trying to become the world’s economic driver, because it dearly embraces what one of its famous sons, Sigmund Freud, wrote: “It is easier to suffer than to act.” The EU countries all have a strong culture of entitlement which is part of the reason for their anticipated shortfall for 2010.
Full Service Professional Organization Failures: Why?
Full Service Professional Organization Failures: Why?
Professional organizations spend a great deal of time and financial resources advertising that they are full service; yet, I continue to find customers that are very dissatisfied with the services they receive. Relying on good faith and advertising claims, when selecting a full service Professional Service organization to support your needs, is not always enough to ensure satisfactory results. Here are a few thoughts to keep in mind.
The Deception
The deception, intentional or not, is that professional organizations advertise and represent themselves as being “full service” when they are not; at least not to the degree that the client expects. Examples of professional organizations that represent themselves as being “full service” are those entities that provide legal, accounting, investment, banking, insurance, engineering, and/or a variety of other consulting services. In most cases, these service providers are extremely professional, highly skilled and ethical. The client gets short-changed, however, when the service they need is a subordinate skill within the full service provider. The client receives results, but not to the level they expected based on the description that the “full service” provider promised. Why is this happening?
Hasty Diversification
Service Providers need cash flow to operate like any other business. Diversification is a way, if done correctly, that they can expand their revenue base. Those Service Providers that hold true to their core skill-set usually maintain exceptional customer loyalty. Those who diversify too quickly, into sectors they are not highly experienced in, run the risk of upsetting customers, losing business and ultimately suffering revenue losses.
When a Service Provider decides to diversify, it is important that they seriously consider and evaluate the risks associated with moving away from their core skill-set and operating culture. Often, when a firm diversifies, they choose not to make the financial commitments that are necessary in order to go first class. They instead put their “service toe” in the water to test the “revenue” temperature, before making a true commitment (i.e. allocating finances for research, training of existing employees and/or hiring experts) to the expansion. In the meantime, they advertise and prematurely represent themselves as “full service”.
Unfortunately, this is a common scene for many struggling companies. There are accounting firms that offer bookkeeping, tax, insurance, investment and retirement planning services. There are banks that offer banking, planning, investment, and retirement products. There are legal organizations that offer a wide array of legal services (personal, corporate, wills/trusts, real estate, etc.) and business development services. There are sales/marketing firms that offer marketing, web development, social media advertising, branding, graphics, and customer care support. Each of these companies may spread themselves too thin with hasty diversification. They all have a core skill set and operating culture that made them very proficient in a particular area, but not in all. So what to do?
Know that “Full” Service may not be synonymous with “Fully” Satisfied
As the prospective client, it is your responsibility to select the Service Providers that meet your needs. You may not need the “world class” provider, but you want to make sure you have selected a firm that will leave you fully satisfied with the results you receive. Here are a few steps you can take to improve your chances of receiving the services you need:
- Look to referrals from trusted colleagues that had a similar need and were satisfied with the results.
- Ask your other Service Providers for a referral.
- Regardless if a referral or not, provide the prospective firm with a detailed, written requirement of the services you need and the results you expect to receive.
- Interview the principals whenever possible.
- Ask detail probing questions about “how” and “who” will perform the service you are requesting.
- Ask if they provide frequent progress reports as to the status of your project.
- Have a written contract that clarifies the deliverables in detail.
- Don’t be afraid to question unclear situations or statements—YOU ARE IN CHARGE.
- If along the way, their weaknesses surface, try to get them back on track. If you are unsuccessful, don’t be afraid to terminate the relationship and move on.
Most enterprises gravitate to the “Full Service Provider” out of convenience. They do not want to take on the role of a “general contractor” that works with multiple Providers offering separate skilled services. This approach may initially require more time and energy, but long term it may also save you money (in fees and delayed revenues) and provide more desired results.
Organizations-Playing Offense or Defense
Organizations in today’s economic times are either playing offense or defense, whether they know it or not. What determines which style of play? Cash or operating capital availability. With the credit markets shrinking, cash on hand has become a significant criteria for survival and the opportunity for growth. Those organizations that have lived from month-to-month off their line of credit are now in trouble. Those lines of credit are being reduced or foreclosed on due to a lack of payment. Organizations that have kept their on hand cash balances in proportion to their debt have a chance to survive the current slumping economy. The organization that maintained a healthy cash position now have a chance to take advantage of that strategy and take advantage of great bargains on asset purchases, merger/acquisitions with competitors, product development, etc. Everything is discounted, and if you have the cash you can make short term deals that will multiply in the long run and make your organization more successful.
Don’t Confuse Efforts with Results
Recently I heard a couple of client employees commenting on how hard they are working to be noticed. I could tell by their conversation that they were both trying to position themselves for a favorable performance review and consequently, a raise or promotion. I never once heard them talk about their accomplishments. Effective employees (leadership or workers)work to achieve desired results in the least amount of time. They fight through Murphy’s Law (problems will happen)and they recognize the benefits from knowing how to use Pareto’s Law (80/20 rule)by applying it to their efforts versus the results they achieve. Lets explore this further:
It is important to an individual to be the most effective person they can be, whether in relationships, parenting, associating with friends and co-workers, as a volunteer within a non-profit organization, being an employee, or being an entrepreneur. One very important principle should be kept in mind – “don’t confuse efforts with results”. This may sound like common sense, but it happens to be a situation that is very unfamiliar to many people striving to be more effective. There are many periodicals, articles and books written about time management, which normally comes to mind when a person is asked what they believe “don’t confuse effort with results” really means. Time management can be defined as “a process for making best use of the time available in order to use that time in a desired manner.” Being more effective with the time available often gets lost in the process of daily activities. In the past 50 years, the average work week in the United States has been declining from the previous 50-year period. The cause of this decline is brought about by governmental intervention over the number of hours one can work without receiving overtime, and the advancement of the industrial and technological ages. No longer are a majority of Americans working from dawn to dark to earn a wage. Evidence of this reduction in the work week is the growing industries that now cater to people’s spare time, such as hobbies, recreation, entertainment and hospitality.
Time is precious. What’s new about that and what does that have to do with “don’t confuse efforts with results”? It has little to do with the actual time available and more to do with what is done with the time available. “To be effective with the time available” implies that the time is used in a very productive way. Being more productive can mean there is more time for doing fun things: to finish a home improvement project faster, launching of a new company sooner or getting more done in the workplace.
Focusing on what is being accomplished rather than how much time is being spent is the key issue for being more effective. How can understanding this principle make a person more effective? People improve most when they decide to make a change, focus on what it takes to make that change, provide the discipline to follow the steps set before them and then take the necessary action. This assumes a person wants to be more effective!
The next time you encounter a co-worker complaining or (surprise) bragging about the extra hours they are putting into their job or project without increased measurable results, ask yourself, “why are they saying this?” If they are paid by the hour, that may be part of the answer. Parkinson’s Law seems to have evolved within many workplaces through less than motivated employees with no differentiation as to whether or not it is focused on staff or management. Parkinson’s Law states, “work expands to fill the time available.” An interpretation of this law is that a person will make sure that they fill the time allotted to the task even if they can complete it sooner. The person following Parkinson’s Law is not the person searching to be a more productive individual. There are clear signs of organizations that are infected with this Parkinson’s Law cultural disease and following are some of the disease’s symptoms:
- Projects are always completed on schedule, because schedules are always changed to meet the anticipated completion date.
- People work more than the normal work week to meet deadlines.
- People work more than the normal work week in order to impress their leadership that they are strong performers.
- Those performing tasks have a lack of accountability.
- Leadership that focuses more on how things are being done rather than on what is being done.
- Higher levels of headcount than necessary to perform the organization’s mission.
These symptoms reflect many of the attributes of less than productive people and organizations. Parkinson’s Law is able to infect people and organizations because they both respond to activity and not results. Ah ha! There is the code to unlock the secret to the phrase “don’t confuse efforts with results”. The key here is that “results” should drive the person or the organization and not the activities directed to achieve the results. In many situations, the biggest excuse used is that people or organizations are so busy trying to get things done that they cannot actually get things done.
This sounds a little like what comes first, the chicken or the egg? How do you get results without the activities? The answer is that you don’t. The important fact to understand here is that the results are the most important items here, not how hard or how long people are working to achieve those results. If people or organizations hold themselves accountable for getting results, they become more productive. That means getting the task done the first time and on schedule. No extensions, no excuses, no wasted time and no confusion about priorities.
Results-oriented people understand that they should and will be evaluated based on what they contribute to the project or the mission of the organization. In organizations that are infected with the Parkinson’s Law cultural disease, the leadership may not be astute enough to recognize that these results-oriented people even exist. Results-oriented people may even be challenged by peers to back off and quit making everyone else look bad because they are more productive. In some cases, leadership does recognize the results-oriented person and then wrongfully takes advantage of them by redistributing more work from the “infected” employees to the “immune” employees. As a result, the infected people then coast even more. This is not a healthy situation for either side. In this case, one of two things will happen to the results-oriented people. They will either find a way to extricate themselves from this situation by moving on or they will also become infected as a cultural casualty. That would be a shame.
What does one do to become a results-oriented person?
- Decide to make a change.
- Keep desired results in sight at all times.
- Set priorities for key factors that contribute most to desired result.
- Determine resources needed to support priorities.
- Stay focused on priorities.
- Manage activities required to support priorities.
- Strive to exceed results expectations, such as quality and time duration.
There are two other Laws that have an effect on how to become a results-oriented person. First, Finagle’s Law of Dynamic Negatives is usually recited as, “anything that can go wrong, will—at the worst possible moment” and is a corollary to Murphy’s Law, which states that ““if anything can go wrong, it will.”. This law is used by infected people as an excuse for not getting results.
When things go wrong, infected people often give up and decide they cannot get the results they want in the time frame originally planned. Either they either decide that the result was not important enough to pursue and move to a new project, if they are working for themselves; or, they go to leadership and leave the issue with them to resolve. On the other hand, results-oriented people realize that there are going to be problems and these issues have to be addressed. They know that problems are a part of the process of getting results. They do not become paralyzed by these issues. They work through the issues, because the desired results are more important than the effort it takes to achieve them.
Secondly, Pareto’s Law or Principle, also known as the 80-20 Rule, states “80% of the effects come from 20% of the causes” If applied properly in any given situation, Pareto’s Law may be one of the most effective tools for increasing a person’s productivity level and there are no technical gadgets required. Applying Pareto’s Law to any area of life means that time and resources used to generate results are used in a very productive manner. Always remember that the “results” are the target, not just how well we manage the activities. Let’s explore a few examples of applying Pareto’s Law:
- Meetings- 80% of the needed information comes from 20% of the meeting attendees. Shorten the meeting by inviting only the 20%.
- Sales- 80% of all sales come from 20% of the sales force. Redirect the efforts to higher quality hiring and training of the top 20% of the sales force and reduce headcount and expenses.
- Customer Care- 80% of complaints or calls come from 20% of the customers. Implement techniques to address the 20% with less labor-intensive means - email/voicemail, etc.
- Operations- 80% of the problem symptoms are caused by 20% of the actual problem issues. Search for the 20% causes and achieve a multiplier effect for reducing problem symptoms.
- Results- 80% of the results achieved are generated with 20% of the efforts and resources. Evaluate the remaining 80% of efforts and resources and scale back to reduce costs.
Results-oriented people are the stars of any group or organization. They are the leaders in their area of expertise. They are successful entrepreneurs. They are individuals who don’t confuse efforts with results.