I use to discount that response, “but we are different”, because I knew that they were not different when looking at the “required” activities needed to correct their situation.  However, after many years of working on many different operating and performance challenges for organization, I have come to the conclusion that they probably are different, but how?

Like people, organizations are like “snowflakes”, no two are exactly the same.  Even identical twins are not identical in every way say clinicians.  Why would an organization be treated as if it were the same as another?

Have you ever seen two organizations with the same exact cultures?  Cultures evolve over time based on leadership influences, operating practices, environmental factors, and results (positive or negative).

Have you ever see two organizations with the same exact operating processes?  Operating characteristics are created from external influences and proprietary methods and practices that have proven to generate the results required by the organization.

Have you seen any two organizations treat their customers in exactly the same way?  Customer relationship management is not a computer system, but a reflection of the respect that the organization has for their customers, and the customers respect they have for the organization and its products or services.

So what is the significance of knowing that no two organizations may be the same? It is important NOT to prematurely classify a company or its workforce as having the same issues or initiatives as others that may be in their same market, industry or organization type.   This means internally and externally to the enterprise.

If you’re a CEO, don’t make the mistake of trying to clone your new assignment into an exact copy of your previous assignment, no matter how successful you were.  You have a new environment that may need changing, but your success will depend on how you integrate new activities with the existing operation and culture.  It all takes time and patience.

If you’re a sales person, you better do your homework on the prospect and not assume they are like your last sale, they are not.  Your techniques may be the same, but their need for your product or service will probably be for different reasons than you last client.  Get to know them, understand them and serve them—then you will have a loyal customer.

If you’re a vendor or supplier, don’t assume that your customers require the same type of service.  They may require the same level of service, but delivered in different ways.  Your objective it so know them well enough and to care enough about them to meet their requirements for uniqueness.

No matter what your connection is to an organization, do not overlook the importance of having a trusted relationship with that organization.  It is this trusted relationship that will make that connection between the organization and yourself a more successful one.

I see four areas of failure that have an impact on organization because they are unsure of what the future holds.  Looking out into the future trying to predict what actions to take, without keeping focused on the near term, the organization may encounter four key failures:

• Failure to execute
• Failure in focus
• Failure in confidence
• Failure in trust

Failure to execute is an issue during both certain and uncertain times.  If the organization cannot translate their strategies into tactics and act on those tactics, the organization will continue to operate on daily activities as they occur (Parkinson’s Law), whether or not they are the correct actions.  Execution goes beyond planning and strategizing, it takes a work plan and a willing workforce to implement the plan.

Failure in focus comes from being so concerned with the unknown, that there is a paralysis of the leadership and a shortage of direction.  This inability to chart a course and take action is a symptom of an organization that is unwilling to take risk.  The enterprise will move forward, but the wasted resources from a lack of direction can take a lasting negative financial impact.

Failure in confidence points to the level of uncertainty experience within the organization.  If financial strength is an issue and a lack of focus, then the confidence that the direction will produce the desired results is weak.  Without confidence, risk becomes a major issue that cannot be easily overcome.  If a lack of confidence lingers, it can have a long term impact on the organizations culture.

Failure in trust causes operating activities to slow and the cost related to wasted resources to rise.  Internally this factor shows up on inter-departmental turf wars and office political power plays.  Externally the impact is a lack of cooperation, delayed deliveries, incomplete communication and an increased reliance on contractual measurement of performance.  The end result is a lack of cooperation and performance.

Look at these four failures as the trees and the level of uncertainty as the forest.  Knowing how to see the benefit of focusing on the trees will make the forest of uncertainty much less daunting.

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

Here are five common reasons why new products fail:

1.  Lack of market knowledge- Whether a company is new or established in a market, a common mistake is underestimating the impact of market change.  Markets change for a variety of reasons, and if a company does not stay connected with their market, they may begin operating under obsolete assumptions.  This leads to poor performance and often enterprise failure.  A few examples   of market change are as follows:

• Lower customer demand- Customers are not interested in the product or service.  Three levels of consumer demand are based on the customer’s needs, wants and desires. Depending on how the customer views the importance of the product will determine if they are going to change their buying pattern.    Companies that do not know how their customers view the company’s product will probably not be conscious of the reasons for the customer demand drop-off.Recessionary times tend to impact those products that customers view as wants or desires.  These are usually products that entertain or follow trends, and are purchased with discretionary income (electronics, trend clothing, high-end cars, etc.).  Needs are those products that are more commodity items and are thought to be indispensible (food and personal items, telephone service, public transportation, etc.).
• A change in customer preference- Customers are migrating to other products. Customer buying decisions can change for several reasons.  These reasons can be due to product differences, technology developments, advertising and brand influences, regulatory requirements, and perceived value increases.  Knowledge of current and upcoming market changes is critical to any company’s ability to respond and sustain operations.
• A change in sales and distribution methods-Customers want to purchase their products in a different way. The Internet has changed the buying habits of much of the world’s economy.  How has it impacted your products in your market?  Brick-n-mortar stores are still strong points-of-sale for products if they provide a positive buying experience. Most business-to-business and retail organizations have added Internet stores to sell their products in addition to their brick-n-mortar stores. Wholesalers and distributors are expanding and contracting in many markets, depending on the product type.  If the company’s strategy is not to have a large sales force to distribute your product, then the Internet, wholesalers and distributors may be helpful.  However, the wholesale/distribution route may not be the best approach if your company wants strict control over the sales and service process, and a strong relationship with your end customers.It all comes down to how the customer wants to buy your product.

2.  Lack of product differentiation-The customer cannot see the value of the product being introduced.  This lack of differentiation can be between your competitor’s and/or your own product.   If you’re releasing a new version of an existing product, how are the two products different?  Why would a customer purchase a new version, if the older product still provides value?  How different is your new product when compared to the competitor’s?  Differences that are valued by the customer will influence their buying decision.  Look at your product’s quality and performance from the customer’s perspective.

• Quality-How does the product hold up in comparison to previous products or the competition? Consider how durable, flexible and adaptable the product or service appears to your customer base.
• Performance- How does the product perform?  Take into consideration speed, usability, features, functions and how well it does what it is supposed to do.

3.  Lack of brand recognition-The customer does not identify the new product with your company or prior products. Companies that are not concerned about creating brand awareness are making a critical error.  It is important to balance brand recognition with the cost of creating the brand.  Brands evolve over time as the customer’s perceived value from the purchase of products or company services increases.  The objective is to have customers identify the purchase of your product and/or company with their most positive buying experiences just by seeing the brand (name, logo, motto, song, etc.).

4.  Lack of customer support-The customer cannot get the level of support they want.  A company that is only focused on the sales side of their product or service may fail to build strong customer relationships resulting in a loss of customer loyalty.  Without loyalty, there is nothing to keep the customer from switching to your competition without notice.  A company that is focused on developing a long term sustainable operation knows that it is imperative to develop strong relationships with their customers.  This is accomplished by offering effective sales and customer support.  Except for on-line Internet sales, the front line customer care effort should come from the sales force, even after the sale is closed.  Customer care organizations, departments and services can help satisfy the customers when there are issues that must be resolved, but the sales person who closed the sale should still be involved.  We all know it costs more to get a new customer than it does to save one.  New products that are launched without a customer support effort in place are destined for problems.

5.  Lack of product development process- Many new products never get to market because the company does not have a product development process. Product development should be viewed as a process, and not an ad hoc event.  The process starts with an idea.  The more innovative the organization the more ideas.  The idea gets tested as to viability in the market.  Market viability means that the company knows their customers and their buying habits.  The idea gets a development assessment.  The company must then determine how practical it is to create the product out of the idea.  The idea then gets a value test (i.e. what is the value to the company (revenues/profits, market share, etc.) and to the customer (performance, quality, price, availability, etc.).   If the idea passes all tests and assessments, then a project is chartered, prioritized and funded.  A company without a process for product development is taking a significant risk of having the new product effort terminated before reaching the market.

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.

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.

1. Poor Leadership
   • Lacks the confidence of key personnel
   • Hires/retains weak people in key positions or fails to fill key roles
   • Fails to grow/retain successor(s)
   • Focuses on their personal benefits, not those of the organization
2. Poor Vision
   • Lacks clear understanding of where business is going
   • Lacks focus on organization and priorities
   • Is unable to strike key partnership relationships
3. Poor Results
   • Has major and sustained poor financial performance or missed targets
   • Shows major loss of market share or competitive position
   • Is unable to forecast timing/nature of recovery events
   • Is more concerned with being “politically correct” than attaining measurable results
4. Poor Understanding of Business
   • Misses key industry trends and changes
   • Lacks understanding of fundamental profitability factors
   • Cannot crisply define what it takes to win
5. Poor Work Habits
   • Does not put heart and soul into business
   • Sets bad example/role model for others
   • Is not viewed in industry as a key player
   • Hoards information to increase power base
6. Poor Management Style
   • Uses the “demand and control” management style
   • Allows top management infighting, not working as a team
   • Demonstrates unpredictable decision processes, leaving organization too scared to act
   • Starves key programs but spares sacred cows
7. Poor Board Candor/Communication
   • Controls flow of information/agenda, preventing focus on or sufficient time for critical issues
   • Does not allow ready access to VPs and other key individuals
   • Keeps favorite non-strategic programs or perquisites out of board review and approval process
   • Loads the Board with special interest persons/cronies

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.

The recession is short lived in comparison to the damage that management can do if they do not handle the down turn correctly