“10 Powerful Ways to Inject Discipline” Into the “Revenue-Generation Process”| by: Dave Stannard| Chief-Executive

 

Many CEOs of middle market companies view sales and marketing functions as autonomous. When problems or inefficiencies arise in operations, finance, manufacturing or other areas of a company, CEOs zero in on well-established metrics and processes to pinpoint trouble spots and address them. However, that same kind of rigor and discipline is often absent in sales and marketing…!!

As a result, the CEO may be unsure of the underlying causes of disappointing revenue performance and often miss the real source of the problem. Is it the market, pricing, sales team, go-to-market strategy, or something else??

To improve performance, where should CEOs get involved ??… By analyzing multiple clients across several industries, we identified 10 common trouble spots that yield the greatest revenue improvement potential. By beginning with the three or four that resonate most strongly for their company, CEOs will see revenue expansion and establish a systematic approach for driving continued growth..

1. Segment the market and target High-priority customers – All customers are not created equal. Therefore, the time a company spends parsing new customers should not be evenly allocated among its prospects. Nor should it be left to individual reps to determine how to spend their time. They tend to gravitate to accounts that are most comfortable, the loyalists, and not necessarily those that will bring the most growth, such as customers where the company has a lower share of wallet. Nudge them to step out of their comfort zone..

2. Develop meaningful Account plans – Requiring clear action plans for each customer account with tasks, owners, and timing allows for a shared vision of what needs to happen. The account becomes a company asset, not just an individual salesperson’s asset. Many sales reps view account planning as unnecessary additional paperwork—a “homework assignment” more about checking boxes than creating something of value. But a good account plan is indispensable in proactively determining how to grow a customer..

Sales organizations lacking detailed and effective customer account plans will struggle to focus on the right actions to grow their business. They simply wind up reacting to requests. Good account plans allow for tracking of progress and building organizational learning on what works and doesn’t. Plans facilitate coaching conversations, giving sales managers a tool to measure progress and coach strategy. In short, meaningful account plans drive revenue growth..

3. Monitor progress via a simple set of metrics – There are two important elements in monitoring: metrics and simplicity. CEOs aiming to inject discipline into the revenue-generation process must establish and track a defined set of metrics that aligns with their growth initiatives. Metrics provide a fact base about a company’s revenue performance, reveal growth opportunities, help CEOs gauge progress and guide sound decision-making. They are fundamental and must measure activity as well as outcome. Without the right metrics, companies can only base decisions on assumptions, anecdotes and outdated information, perpetuating poor revenue performance..

Good metrics-tracking plans encompass only those data points most relevant to growth. To be effective, track only those metrics that relate directly to your growth aspirations and levers. Don’t track metrics simply because others track them or because it’s the way things have always been done..

4. Provide effective Coaching & Sales supervision – Putting effective sales management at the helm of sales teams has far greater impact on performance than upgrading the talent of individual reps. Great sales managers lift the performance of the entire team while a mediocre manager degrades team performance and often prompts top performers to leave..

“Great sales managers know the importance of good coaching and do it consistently”…In its 2014 Sales Management Optimization Study, CSO Insights found that of companies with a formal coaching process, 62.3% of reps meet or exceed quota and the organization hits 91.2% of revenue plan attainment—sharply higher than companies with informal coaching. Yet only 21% of companies have a formal coaching process identifying appropriate coaching activities (group meetings, individual meetings, ride-alongs, celebrating successes, etc.), appropriate activity cadence, and tracking across managers. About eight in 10 firms are missing out on a potent opportunity to drive revenue growth..

5. Document the “company way” of selling – Over time, every company builds knowledge about the most effective method of selling. A key to revenue growth is spreading this knowledge throughout the company so it becomes truly institutional, not just resident in the heads of a few senior people. The best way to codify and document the company way of selling is to create a manual of best practices that provides step-by-step instructions for accomplishing the key responsibilities of different sales roles..

6. Analyze pipeline data for a better understanding of flow rate and revenue forecasts – Tracking the pipeline of growth opportunities for both new and existing accounts is critical for the CEO and his team. It provides a leading indicator of sales performance, enables resource/ production planning and reveals the drivers of customer win rates. But many organizations lack a real-time window into the sales pipeline and a method of analyzing pipeline data that isn’t cumbersome and time-consuming. As a result, many mid-market companies are overly optimistic in estimating probabilities and forecasts.

7. Maximize selling time – How does a CEO know whether his company’s sales force is spending enough time on customer-facing activities? In almost every organization, sales teams complain of being overburdened with administrative activities, not having enough time to spend with customers. Most companies don’t have a factual basis for addressing this issue. By requiring a short study to identify how much time the sales force spends on different activities, the CEO can help the company better understand how sales people spend their days and discover opportunities to increase selling time..

8. Track sales activity with a Customer Relationship Management (CRM) system – CEOs and sales leaders of companies without CRM systems suffer from a lack of visibility into customers and sales activities needed to systematically drive growth. Many middle-market companies may see these systems as too costly and complex to use and may not understand the value they provide. For instance, CRM systems enables increased sales productivity through contact management, tasks, calendars, etc.; better customer profile information; greater visibility into buying behavior; and, a more complete understanding of market penetration. For marketing, an automated CRM system provides a more complete contact database for marketing activities as well as a source for measuring the relative value of content, channels, cost per lead, etc. And for sales managers, the systems provide visibility into sales time allocation and more accurate measurement of activity and performance in sales and marketing..

9. Optimize pricing effectiveness – Pricing is one of the most effective profit-generating levers available to the CEO. On average, a 1% increase in price yields a double-digit increase in operating profit. However, effective pricing isn’t about simply raising prices—it is a complex area that encompasses many elements including base pricing, discounts, recouping cost-to-serve elements, charging for ancillary services and more. For most middle-market companies, the initial goals for pricing effectiveness should be to reign in unwarranted discounts and to get paid for customer practices that increase the cost-to-serve. Such costs include inventory carrying costs, rush orders, freight costs, customer delivery rules, technical support services and other special efforts..

10. Align incentives with specific growth aspirations – As CEOs evolve their growth and go-to-market strategies, they need to ensure the compensation plans for the sales force remain aligned with those changes. If not reviewed and aligned, companies risk failing to incent new growth behaviors, or worse—incenting the wrong behaviors. This puts their revenue goals at risk…!!

The most effective incentive plans disproportionately reward the top performers; pay explicitly for growth year on year; balance the amount of base pay vs. variable pay based on the control, responsibilities and risk inherent in different roles; are simple enough for employees to directly connect their actions to their pay; and are made up of both financial and non-financial components. Like pricing, compensation is a complex area…However, by ensuring these basic elements are followed, mid-market organizations will drive the sales behaviors necessary for increasing revenues..

The “State of Strategy Today” : Good strategy is worth doing well | A.T. Kearney

In a study performed, we found a strong correlation between a company’s total shareholder returns (TSR) and its planning horizon…Those with longer horizons saw stronger returns than those with shorter…!!

We were not surprised then when our latest strategy study found a similar correlation. Only this time, the comparisons are between successful and unsuccessful strategies. Of companies with longer strategy cycles—five years or more—85 percent see beneficial results. For companies whose strategy cycles are less than five years, 53 percent are successful. Interestingly, there is little difference between companies that take an ad-hoc approach to strategy (46 percent) and those with planned strategy cycles of less than five years (47 percent)…

This last point is reassuring, as it suggests that a properly executed strategy is worth pursuing. Just 6 percent of companies have strategy cycles of more than 5 years. It can be argued that strategy cycles are more important in today’s competitive environment or, as one study participant says, “To succeed today, we need to innovate, and innovation requires strategy and commitment. So it makes sense that committing to a strategy over time results in success over time”…

Strategy is more difficult now..When working on consulting engagements, our clients sometimes complain that it’s much harder now to craft powerful and easy-to-communicate strategies. “Strategy formulation and deployment is a complex, moving target,” explains one CEO. Another blames the difficulties on what she calls “an ever-changing business environment that requires spending more resources on strategy.” Our study findings reflect the same frustrations: 62 percent of business executives say strategy has become more complicated over the past decade, and 74 percent say complexity forces them to spend more time and effort on strategy formulation. Yet, despite these increased efforts, 46 percent of strategies fail to meet expectations..

Interestingly, C-suite executives are much more optimistic about the effectiveness of their companies’ strategies than those in management…Indeed, 81 percent of executives believe their strategies are meeting or exceeding expectations, while 48 percent of those at the management level are less optimistic (see figure 3). Further, this C-Suite misconception is even greater for companies that are lagging their peers as almost 100 percent of executives believe their strategies are working just fine, while management is much more skeptical..

Agility to the rescue – maybe It is commonly accepted that today’s business environments are fast changing and dynamic, and much more so than just a few decades ago. These tumultuous conditions have caused some executives to question whether strategy is even possible anymore. Isn’t a strategy outdated before it can be implemented? Aren’t we better off to focus on agility in order to capitalize on emerging trends faster than peers? These are some of the questions we heard. We put this thinking to the test with surprising results: More than 80 percent of global executives consider agility as important, or more important, than strategy when it comes to securing a company’s future success. And only a slim 19 percent believe a strategy-induced competitive advantage is still possible (see figure 4). In the minds of business leaders, it appears that strategy is failing…

However, a deeper dive into the survey data finds that “agility as a substitute for strategy” notion is flawed. We wonder if it isn’t simply a self-fulfilling prophesy :  Those who believe agility is the foundation for success have failing strategies, while those who believe strategy is a source of competitive advantage, have exceptionally successful strategies. The more interesting question, which begs further investigation, is in which direction the causality flows: Do companies have trouble formulating and deploying strategies and so turn to agility? Or, does a focus on agility as the answer to today’s challenges lead to the demise of strategy? Does a string of successful strategies mean strategy is the answer to all that ails an organization ??

What’s to blame for strategy failure?

Judging by the responses of our study participants, strategy failure is an emotional topic. One participant puts it this way : “In large organizations, strategy formulation is too complex and too top-down, leaving the rest of the organization to play catch up. And before they can do so, the next strategy is being rolled out.” Another says: “Strategic planning often takes place in an ivory tower by individuals who haven’t a clue what happens at the implementation level.” These and other comments suggest that the interface—the handover—between strategy formulation and deployment is to blame for failed strategies. Our findings confirm this. When asked to identify the trigger of a failed strategy, 7 percent of executives point to formulation, 6 percent point to deployment, and 86 percent say it is a mix of the two (see figure 5)..

Strategy formulation: What goes wrong?

If there is ever a need for knowledge, experience, and preparation, it is during strategy formulation. When asked about their strategy formulation failures, most executives complain that it is an insufficiently inspired, unrealistic, impractical, and detached process :

• Lack of understanding of future trends (88%)
• Little understanding of internal capabilities (87%)
• Too much top-down approach (84%)
• Not enough logical thinking (84%)

One interesting finding is the conflicting perspectives about the role data analysis plays in a failed strategy formulation process. Some blame “too much data analyses” while others say there is “not enough data analyses.” The reasons for the different views depends on the participants’ backgrounds. For example, many in the too-much-data group have firsthand experience in data analyses of the “boiling the ocean” type—in which substantial efforts yield few real insights. The other group is accustomed to formulating strategy using strategy statements that are not backed by sound financial justification or based on quantifiable competitive opportunities..

Several study participants consider secrecy an issue…“The C-suite is afraid competitors will learn our strategy and so do not involve middle-level managers as much as they should in developing the strategy,” explains a manager. “Clearly, keeping our organization as much in the dark as our competitors about our strategy is not a fast lane to success”..

Strategy deployment: What goes wrong?

Many of the reasons for failed strategy formulation are also attributed to failed deployments. For example, a strategy might be too ambitious and broad for the organization, too narrow to cope with the full breadth of changing market conditions, or deployed from an impractical top-down perspective. “Strategy deployment is now our greatest challenge,” explains a CEO. “Market conditions require a more aggressive strategy, but execution has not changed.”

Not surprisingly, reasons for failed deployments have more to do with the handover between strategy formulation and deployment:

• Lack of internal understanding of the strategy (90%)
• Lack of internal capabilities to execute the strategy (90%)
• Lack of ownership (86%)

This makes for bewildered, disenfranchised, overwhelmed, and under-supported deployments. As one manager admits, “We underestimate the combined effects of overlapping initiatives on the same group of people”..

Gauging the future –

Study participants largely agree that a better understanding of future trends is a prerequisite for sound strategy formulation: “Our strategies fail at the development stage because we do not accurately determine where the market is heading in the next three to five years.”

Not surprisingly, over the last decade many companies have increased use of future-focused tools such as fore-sighting, trend analyses, and scenario planning (see figure 6)..

Organizational inclusiveness –

Involving the organization in strategy formulation resolves the handover issue between formulation and deployment. “Strategy that doesn’t make it out of the boardroom isn’t really strategy,” admits an executive. “Attempting to make it purely process-driven overlooks the importance of the ‘goodwill’ factor—the people who actually deploy the strategy because they buy into it, and not just because it is their job to deliver it.” Our findings break down this thinking into a number of distinct points. At the base, is the conviction that involving more people with firsthand experience in dealing with markets, customers, competitors, processes, and suppliers makes for better and more practical strategies.

“Bringing in a general workforce opinion helps management make more informed decisions,” says a manager. “All levels of the organization can contribute to strategy formulation and implementation. Middle management and the workforce provide practical input.” Organizational involvement is also essential for making strategies sufficiently ambitious. As one executive says, “The most important area for innovation in achieving goals and targets are the skills and knowledge of staff. Without these, the top-down approach is doomed to mediocrity.”

Our findings back up these observations : Two thirds of companies that pursue meaningful organizational inclusion in strategy formulation have successful strategies. Yet, involving the workforce doesn’t just make strategies better and more practical, it also lays the groundwork for engaging the right people in strategy deployment: “We involve our people at all levels in strategy development and find that innovation and diversity of ideas are pluses, both in adopting change and in people acting as change agents. An engaged individual is more resourceful than one who is simply employed.”

Organizational involvement is not a panacea. It provides innovation and practicality and, while it does not really affect speed, it does make things more complex (see figure 7). As one CEO says: “Consultation can be a bit of a pain and slow down a good planning operation, but the results following the consultation can make the extra time well worth it”..

Strategy needs to be led- 

not just decided on Despite the virtues of organizationally inclusive strategy formulation, the complexity that accompanies it can be an issue. For this reason, inclusive strategy requires top-down leadership, with top management establishing the ideas, ground rules, organizational teams, and direction that are critical for middle and lower management. Strategy, at its best, becomes less of a decision and more of a direction to inspire the organization to follow—not once, but on an ongoing basis.

As one CEO says : “Strategy & Leadership go hand-in-hand, you can’t have one without the other”…!!

Overall “Mall vacancy in India”,maintains status-quo at 14.5% | Realty Plus

According to Cushman & Wakefield’s latest Retail reports, the overall #MallVacancy, levels across the top eight India cities remained stagnant at 14.47% in Q2 2014, which was recorded around 0.4 percentage points lower compared to Q1 2014…Amongst the top eight cities, Pune witnessed sharpest decline of 2.5 percentage points due to healthy leasing activity and no new mall supply. Ahmedabad, Chennai and Bengaluru also recorded drops of 0.4 percentage point each due to moderate demand for quality mall spaces from apparels and food and beverages (#F&B) retailers…Hyderabad witnessed a rise of 1.1%, in mall vacancy in the same period.

Q2 2014 saw the addition of 370,000 sq ft of new mall space, which was similar to that received in the previous quarter. The supply comprised of 250,000 sq ft in one mall in NCR and the residual 120,000 sq ft in an operational mall in Kolkata. As many as six new malls planned for Q2 2014 witnessed the deferment to the second half of the year, which together accounted for 2.33 million square feet (msf)…

While three malls measuring 700,000 sf in total were delayed in Bengaluru due to approval delays, slower construction pace in tandem with low leasing led to deferment of one mall each in NCR, Pune and Hyderabad, measuring 700,000 sf, 430,000 sf and 500,000 sf respectively.

Sanjay Dutt, Executive Managing Director, South Asia Cushman & Wakefield, said, “The retail and retail real estate markets are still going through a period of uncertainty. Currently, we are witnessing stagnation in the demand-supply dynamics as mall supply is being deferred and existing vacancies remain more or less stable. Whilst everyone is aware of the huge potential that exists for organised retail in India and domestic and international retailers are keen to expand their presence in the country, they are awaiting the conducive conditions to do so. The real estate sector has been maturing to provide better quality spaces and adopting best practices to cater to retailers needs. However, macroeconomic conditions and not just the sentiments need to improve further to encourage consumer spending and the government needs to address the uncertainty that exists with respect to its policy stand on FDI in retail. The RIET’s for commercial properties post successful listings, would potentially open up for shopping center portfolio listings, giving much needed exit route to the developers & investors. This would encourage shopping centre developers to create much needed quality organized retail space at locations that matter. The overall infrastructure to support retail trade such as transportation and logistics too need to improve substantially for the sector to kick in to its next phase of growth.”

According to C&W, mall rentals remained stable across most cities except Bengaluru, Chennai, Mumbai and Pune where a few micro markets depicted rental variations. In Bengaluru, the sharpest rental decline of 13% was noticed in Mysore Road where lower trade densities impacted rentals adversely. Similarly, Cunningham Road in Bengaluru also witnessed lower demand leading to a 10% dip in rentals. On the other hand, Goregaon in Mumbai witnessed a 10% increase in mall rentals due to healthy demand from retailers. In Pune, Hadapsar also witnessed a positive trend in leasing leading to a 9% uptick in mall rentals. In Chennai, almost all mall micro markets witnessed a rental decline from the last quarter due to weakening demand. The sharpest rental dip of 9% came in Chennai-Western where lack of new mall supply hampered retailer demand for this location. Mall rentals in Hyderabad, Ahmedabad and Kolkata remained stable.

In Pune, JM Road witnessed the highest rental appreciation of 9% due to high demand from fashion and lifestyle retailers. Vashi in Mumbai also witnessed similar rental appreciation due to high interest from apparels and F&B retailers. In Chennai, lack of optimum sized retail spaces led to a 7% decline in main street rentals. Anna Nagar 2nd Avenue in Chennai also witnessed a 7% dip in rentals from last quarter as ongoing infrastructure projects curtailed footfalls. All main streets in NCR, Ahmedabad, Hyderabad and Kolkata recorded stable rentals during this quarter. Vittal Mallaya Road in Bengaluru witnessed a 4% rental drop in wake of dearth of optimum-sized retail spaces and already high rentals commanded by this established main street.

During H1 2014, Bengaluru witnessed no new mall supply; this was primarily owing to the delay in approvals, which led to the deferment of upcoming supply. Meanwhile, the city mall vacancy level registered a dip of 0.4 percentage point and was noted at 7.1% towards the end of Q2 2014 due to the absence of new mall supply and moderate demand from apparels, F&B, footwear and electronics retailers. Although most locations in main streets and mall micro markets recorded stable rental trend this quarter, select main streets and mall micro-markets registered a drop in rentals. Whilst Cunningham Road and Mysore Road mall micro markets witnessed a decline of 10-13% in rentals in the wake of weak trading activity; Bannerghatta Road mall micro market recorded a drop of 3% in order to keep rentals competitive and attract newer brands. Main streets of Brigade Road and Vittal Mallya Road observed a drop of 3-4% in rentals due to limited availability of options with optimum sized floor plates. Going forward, Cunningham Road and Mysore Road mall micro markets may experience further downward pressure on rentals. On the other hand, established main streets such as Indiranagar 100 Feet Road, New BEL Road, Kamanahalli Road and Koramangala 80 Feet Road may witness an upward rental bias owing to healthy enquiries from apparels, F&B, electronics and jewelry brands.

In H1 2014, Chennai did not witness any new shopping malls becoming operational and this led to a marginal decline of 0.4 percentage points in vacancy, which was recorded at 5.9% at the end of this quarter. Cautious sentiments and limited transactions led to a dip in mall rentals across all micro markets. Chennai-Western saw the sharpest decline with a 9% drop owing to the ongoing infrastructure projects, which curtailed footfalls and demand. Amongst main streets, strong demand from jewelry retailers for Usman Road- North and Usman Road- South led to a 4% rental appreciation for these locations. However, no availability of optimum sized floor plates in Cathedral Road-R.K. Salai led to a 7% rental dip for this micro market. Enquiries from jewelry retailers for select main streets near CBD remain high but Anna Nagar-2nd Avenue may witness a negative rental bias due to lack of demand caused by the ongoing metro work. Paucity of quality mall space and low demand may lead to stagnant vacancy levels and rental decline across most micro markets.

The mall stock in Hyderabad remained stable in Q2 2014, with 500,000 sf mall space deferred to the next quarter. Q2 2014 witnessed a rise in vacancy by 1.1 percentage points and was noted at 8.22%. Established main streets such as Himayathnagar, Banjara Hills, Jubilee Hills and Kukatpally witnessed an increase in demand from retailers, belonging to apparels, footwear and F&B categories. In the interim, enquiry level for electronic and apparels brands increased in peripheral locations such as Attapur and Kothapet. Whilst mall and main street rentals remained stable, next quarter the city is likely to witness infusion of 500,000 sf of mall space in Kukatpally micro market, which will put a downward pressure on the rentals.

Kolkata witnessed 120,000 sf of mall supply during the first half of 2014 and the overall city mall vacancy increased marginally by 0.07 percentage points. Limited transactions and moderate demand for retail space was recorded. Owing to lack of availability of quality retail space on main streets, malls witnessed more demand compared to main streets. Central and East locations continued to see majority of the leasing activity in both malls and main streets owing to churn and ready catchment. The first half of 2014 witnessed leasing activity predominantly from the apparels segment but rentals remained stable in both main streets and malls.

The first half of 2014 did not witness the opening of any new malls in Mumbai. Despite no new supply, churn in malls led to overall mall vacancies increasing marginally by 0.06 percentage points to 15.4%. During Q2, healthy demand led to mall rentals at Goregaon and Vashi appreciating 10% and 5% respectively while high vacancy levels in malls in Bhandup resulted in developers reducing rentals by 5% to attract retailers. Limited churn kept mall rentals stable in all other locations of the city. Main streets in Mumbai witnessed vibrant leasing activity with domestic and foreign retailers in the apparels and F&B segments actively expanding their presence at locations like Vashi, Lower Parel, Andheri and Linking Road. Owing to high footfall and thriving retail demand in Vashi, strong interest of retailers led to rentals appreciating by 9%. Mall rentals at select locations such as Lower Parel and Malad could appreciate due to higher demand for quality space. Main streets are also expected to witness improved leasing activity in the coming months. Increasing demand for space in main street locations such as Linking Road, Borivali and Thane could lead to increase in rental values.

Delhi-NCR witnessed one new shopping mall measuring 250,000 sf become operational with 60% occupancy levels in H1 2014. Amidst moderate interest among retailers to foray into new and emerging locations, developers continued with slow pace of construction deferring completion of malls. During Q2 2014, overall mall vacancy was recorded at 13.5%, which is 0.06 percentage points higher due to the influx of new mall space. With balanced demand supply conditions, rentals remained stable across all mall locations.

 

“Demographics, Reforms, Globalisation” can make “India a $5-trillion Economy” by 2025 |by: Chetan Ahya | The Economic Times

( The writer is chief Asia economist and MD, Morgan Stanley, Hong Kong)…!!

Propelled by the THREE ” Success Factors “ of favourable Demographics, Globalisation and Productivity-Boosting Reforms…India’s Trend #GrowthRates, have been rising since the 1980s…

Over the last decade, India’s GDP growth has averaged 7.6%, compared with 6.1% in ’90s and 4.6% in ’80s…!!

However, this structural uptrend had been Disrupted since the credit crisis in 2008…An adverse #GlobalEnvironment and, more importantly, poor #MacroPolicy-choices of pursuing #HighFiscalDeficit, strong Rural-wage growth and Policy inaction adversely affecting #InvestmentSentiment, have led to slower-growth and #HigherInflation…!!

Over the last 12-18 months, #PolicyMakers have ” recognised the adverse impact of past policies and begun to take corrective actions”..

The effects of adjustments in the real effective exchange rate and real interest rates, and steps to improve the business environment alongside the improvement in the external environment, are beginning to show in improving macro stability indicators..

Indeed, we expect India to transition out of the current stagflation environment over the next eight quarters, with GDP growth accelerating from 4.6% in Q1, 2014, to 6.8% in Q1, 2016, and CPI inflation to head towards RBI’s comfort zone of 6%…!!

#CyclicalChallenges will give way to more structural ones… Over the next decade, the interplay of #Demographics (strong growth in the working-age population), #Reforms (that can help improve productivity) and #Globalisation (accelerating productive job opportunities, income and saving) will support India’s #GrowthTrend…

Improvement in demographics — as measured by the decline in Age-dependency — has been a major source of higher potential growth… #FavourableDemographics, provide a platform of surplus labour that the economy could mobilise…!!

Labour Gains:

Throughout the region, there has been a #VirtuousCycle of falling Age-dependencies, Improving-savings and Investment, and Long phases of Strong #GDPGrowth….Indeed, India will continue to benefit from declining age dependency and increasing labour supply till 2040…

The quality mix of the fresh additions to the workforce is also likely to improve dramatically with rising literacy levels and focus on skill development, providing uplift to potential growth. Globalisation supplies two growth enablers: external demand and financing…

A growing #SkilledLabourPool and steady #LiberalisationPolicy have helped India harness the benefits of globalisation…India’s integration with the global economy started in the early 1990s, but accelerated meaningfully only in the 2000’s…

While the last few years have seen a bit of disruption in the #GlobalisationTrend, the improving global growth environment should support India’s integration. As the government takes more steps to improve the business environment, removes #SupplysideConstraints and maintains external competitiveness by #TacklingInflation, India’s integration with the global economy will deepen. This will be supportive of the medium-term growth trend…

The demographic and globalisation-linked merits are well understood and are, to some extent, a given in the context of today’s India. However, the key driver that will push higher sustainable growth is the implementation of productivity-boosting reforms…#EconomicReforms — when undertaken — incentivise the corporate-sector to invest, in turn utilising the surplus labour and unleashing faster productivity growth…!!

Clear Mandate for Change :

The recent election outcome has given the present government a clear mandate and boosted its ability to implement productivity-boosting reforms at a fast pace. The government would must focus on improving the business environment to kick-start the #InvestmentCycle, contain the less effective re-distributive #FiscalPolicies and improve #Infrastructure…

Moreover, the #RisingMiddleClass and Young, Literate and Well-connected population will demand greater Accountability of policymakers to deliver on reforms that revive the virtuous dynamic of productive jobs income growth-savings-investment..

Hi-Five for India :

We expect a steady  pace of implementation of policy reforms, which will lay the foundations for India’s real GDP growth to move higher to an average of 6.75% over the next 10 years….If our projections were to come to fruition, India’s economy would pass the $5-trillion mark by 2025, a feat that has been achieved by only the US and China thus far, and would lift India to be the fifth-largest economy (from 10th currently)….!!

There are hurdles to achieving the near-7 % growth rate, but the confluence of positive #StructuralFactors should yield strong #EconomicPerformance ,over the next 10 years…

That this structural story is playing out in a region where many other countries are experiencing headwinds to their potential growth imposed by declines in their working-age population and debt-deleveraging dynamics makes the case for India all that more compelling….!!

 

Helping “Customers find you”, Through a “Content-Marketing Plan”: “Inbound Marketing” perspective| by: Martin Harshberger | #BottomLine coach

In today’s “saturated #MarketingEnvironment”, it’s getting more difficult to Gain & Hold your #ProspectiveBuyer’s Attention….!! While the Internet has become the standard for Research and Information on products & services, it doesn’t work very well unless you are in the top 10 of search rankings…!!

The issue becomes how do you get your website to rank-higher with all of the competition ??…Search Engine Optimization (SEO) alone is not enough, Unless you are one a a very few websites in the world trying to sell your product, SEO alone won’t do it..?

Why ?? Because most websites are static…They are designed to look great, have 10 or 12 pages telling the world what you do, and that’s it. Google search rankings love fresh relevant content, that is upgraded on a regular basis. Your static website is lost in the noise….!!

A sound #ContentMarketingPlan, is an ongoing process !!….You put valuable relevant content in the form of articles, blog posts, or comments on social media that your prospective buyer finds interesting or helpful and they find you..!!!

You become the #SubjectMatterExpert, in your field helping them better understand their needs.., what options are available, and why your product or service best meets their needs…!!

But you can’t start building your pitch about why your new “widget” is, the best thing on the market until you understand the reasons why people buy widgets…??

Here are some questions to ponder about your Potential Future-customers :

• What are they trying to achieve by purchasing this item or service ?
• What problem are they trying to solve, or what benefits do they want to gain ?
• How would they prefer this item or service delivered ?
• How will this item or service be utilized to help them achieve their goals ?
• How can your item or service provide better value than the competition ?

The tough-part is convincing your prospects to agree with you that your widgets are the best… Too many websites simply state what the company does or what products they offer…!!

There may be statements about the company, how long it’s been in business, some bio info on the management team. and that’s it. It’s hard for your prospect to decide on that information, you look pretty much like everyone else..

Relevant content is the key…If you convince your prospect that you understand their wants or needs better than your competition, and through this understanding your product has the most benefit to them, you have won the battle..

This is getting more difficult because in the age of the Internet, traditional marketing mediums such as radio, TV, print advertisements and celebrity statements are becoming less effective..

That can, however, be good news for small and mid-size companies as the web has leveled the playing field….Formerly, only big companies could afford to buy influential testimonials and frequent advertising.

Today, however, blogs, online forums and other web-based marketing are the great equalizers…Take any product and search it online….You will find several comments indicating the marketplace perception of that brand…The customer is now the marketer instead of (or in addition to being) the one being marketed to …!!

By Employing #OnlineMarketing techniques strategically, you can make a big-splash on a limited budget….With the rise of #SocialMedia, ingenuity is becoming more important than dollars..

And it’s been proven that consumers respond better to Engaging Dialogue than to expensive broadcasting…This type of marketing has come to be known as “#InboundMarketing”…!!

Effective inbound-marketing provides enough useful information to your prospective customer base that they seek you out…Your company becomes the recognized expert in your field…

Inbound-Marketing is welcome marketing, providing free, useful information about a potential customer’s issue and then offering great solutions…!! Traditional marketing is often viewed as invasive, focused on price or product features, distributed to a mass audience, hoping some of the noise finds its mark…!!

Now with the never-ending array of TV commercials, emails and print ads, you need to find a way of reaching your customer that isn’t “lost in the noise ”..!!

Having them seek you out is by far the best return on your investment….!! You may have less traffic to your website or office, but the traffic you do receive will be much better qualified and knowledgeable about your product or service..

“4 Signs a Sales-Manager ” can Recognize an “A” player in an Interview” | Talent-Management | Sales Benchmark Index

One of the most challenging things to do as a Sales-Manager is to determine if the person sitting across from you in an interview will be an ‘A’ player…Will he or she be the next superstar ?  Can this person ” make it rain ?”, Can I rely on them to “Exceed their quota ??”..

#Sales-Managers consistently ask me what tips or tricks they can use in an interview to ensure hiring an ‘A’ player….Since SBI has started measuring “Ramp to Productivity Failure Rate” (a.k.a : how many of your people hit their quota vs. how many fail and leave the company), it has slowly been increasing…!!

Our median rate 9 years ago was 42 %… It is now 52 %. This means 52 % of all new hires FAIL…!! This means over Half of all New Sales hires don’t make their quota in year one…!! The only “True” way to hire “A” players is to have a robust #TalentManagementProgram…!!

This includes 5 major components : Talent Definition, Acquisition, Evaluation, Selection and Development…A good #TalentManagement (TM) program will Attract, Select, Retain & Develop “A” players…

But what happens when you don’t have a TM (Talent Management program?) What happens when you are actually in the interview asking questions and listening to the candidate’s answers? What do you look for at the ‘moment of truth’ ??

4 Sure Signs that indicate an ‘A’ player :

1 – Sense of Urgency – ‘A’ players have a high sense of urgency. They need to get it done NOW. Whatever it is; the longer it takes to accomplish the more frustrated they become. They are ‘A’ players because they challenge the customer. The build trust with the decision maker, not just a ‘good’ relationship. Challenging customers results in increased sales. The challenge comes from the need to expedite the sale. Thus, urgency is the opposite of compliance. You don’t want your sales people to be compliant.

TIP: Look for answers around impatience and 4^th quarter comebacks..

2 – Enthusiasm – ‘A’ players are passionate about their work. They get up and stay excited all day. They love to sell and go through brick walls to do it. They have a real passion around selling and enjoy the hunt. (We call these wolves)..

TIP: Notice answers around work ethic matched with excitement. Passion is a key differentiator between ‘A’ and ‘C’ players. If they mention how great they form relationships, kick them to the curb.

3 – Keep it Simple – ‘A’ players have mastered the fundamentals. They don’t look for the next big product to help them make their quota…The #Sales-Process is used in every opportunity. Selling is tattooed on their forehead. They actually use call plans on every client meeting… Simply put :  They are professionals…!!

TIP: Ask questions around how they interact with their customers and how they prepare for sales calls. Listen for the use of these fundamentals and how simple they convey it is to sell. (We know it’s not).

4 – Show me the money – Yes Jerry McGuire coined the phrase and almost everyone uses it…It means to be money hungry. ‘A’ players want to make money. And the more money they make the better. Don’t ever think an ‘A’ player wants to ‘please his customers’. He wants to please them because it means more money..

TIP: Ask what his W2 was last year (what he made last year). He will know it to the penny..

Why should you spend the time weeding through average sales-people to get one that’s an “A” player ? They exceed your ” B ” player quotas by over 3x….This difference can set you up to make your Bonus and Get you Promoted…!!

Below is a Quota and Talent Assessment we performed for a large organization whose stock price has risen 35% in the past 6 months :

Notice all the ‘A’ players….The VP of Sales here has a strict Talent Management Process including the 4 steps mentioned above…The results are impressive…!!

Interviewing Sales Candidates is tricky…!! They are Sales-People and their job is to sell you on themselves…If they can’t sell you on themselves, what will they do with your customers ??

Make sure you look for these top tips to uncover ‘A’ players in your interviews. Your success is critical to hiring the top talent. These answers to your questions will tip you off on how successful they could be…

TEN tips for “Leading companies out of Crisis”: a “Turn-around” road-map | McKinsey

” Even good-managers can miss the “early signs of Distress”, says McKinsey’s Doug Yakola. The first step is to acknowledge there’s a problem”…

“ I’ve seen my share of boiled frogs,” says Doug Yakola, comparing companies in crisis with the metaphorical frog that doesn’t notice the water it’s in is warming up until it’s too late. As the chief restructuring officer or CFO of more than a dozen turnaround situations over nearly two decades, Yakolahas witnessed firsthand how managers back right into a crisis without recognizing that their situation is worsening. “ They’re not bad managers, but they’re often working under a set of paradigms that no longer apply and letting the power of inertia carry them along.” And if they don’t realize they’re facing a crisis, they won’t know that they need to undertake a turn-around, either…!! 

He’s also heard the regrets !! sometimes managers underestimated how critical their situation was—or they were looking at the wrong data. Others took advantage of easy access to cheap capital to stay the course in spite of poor performance, believing they could push through it. Still others got so caught up in the pressure for short-term returns that they neglected to ensure their company’s long-term health—or even willfully sacrificed it.

Rare among them is the executive who stepped back to review his or her own plans objectively, asking “Is this what I thought would happen when I first started going down this road?” That’s a problem, because acknowledging that your plan isn’t working is a necessary first step.

1. Throw away your “Perceptions” of a Company in Distress :

It’s next to impossible to come up with one working definition of a company in distress—and dangerous to think that you have one for your own company. Depending on the situation, there are probably 25 different signs of potential distress (exhibit). The problem is seldom made up of just One OR Two of these things, however. Rather, it is the result of a greater number of them interacting together and with other external factors.

2. Force yourself to “criticize your own plan” :

The biggest thing you can do to avoid distress is periodically review your business plans. When you’re creating them, whether at the beginning of the year or the start of a three-year cycle, build in some trigger points. A simple explicit reminder can be enough: “If we don’t have this type of performance by this date or we haven’t gotten the following 12 things done by this date, we’ll step back and decide if we’re going down the right path, given what’s happened since our last review.”

Such trigger points should be oriented both to operational and market performance as well as to basic financial metrics and cash flow…Look at where you are as a company using basic financial and cash milestones, and then look at where you are with respect to your industry and competitors. If you’re not moving with the rest of the industry (or not outpacing it, if the industry is struggling), then your plan may be obsolete. And don’t forget to look back at your performance over past cycles to identify any trends. If you keep missing performance targets, ask why.

3. “Expect more” from your Board :

The beauty of a board is that it has enough distance from the company to see the forest for the trees. Managers often treat their board as a necessary evil to placate so they can get on with their business, but that undermines the board’s role as an early-warning system when a company is heading for distress.

It’s also the board’s responsibility to look the CEO, the CFO, and the chief operating officer (COO) in the eye and say, “OK, we like your plan. Now let’s talk about what it would take to cut costs not just by 3 percent but by 20. Let’s talk about all the things that can go wrong—the risks to the business.” Sometimes significant events happen that no one could have foreseen, of course. But in a typical distress situation, a company has usually just had 18 to 24 months of poor performance, and the board hasn’t been aware or hasn’t asked the right questions. Independent board members—truly independent ones—can have a big impact here.

4. Focus on “Cash” :

A successful turn-around really comes down to one thing, which is a focus on cash and cash returns…That means bringing a business back to its basic element of success. Is it generating cash or burning it? And, even more specifically, which investments in the business are Generating or Burning Cash ?? 

I like to think about this in the same way one would if running a local hardware store. By that, I mean asking fundamental questions, such as whether there is enough cash in the register to pay the utility bill, for example, or to pay for the pallet of house paint that will arrive next week, or how much more cash I can make by investing in a new delivery truck. When you bring a business back to those basic elements, the actions you need to take to get back on track become pretty clear. In many of the cases I have seen, the management team and board are focused on complex metrics related to earnings before interest and taxes (EBIT) and return on investment that exclude major uses of cash. For example, variations on EBIT commonly exclude depreciation and amortization but also exclude things like rents or fuel. These are all fine metrics, but nasty surprises await when no one is focused on cash.

Keeping track of cash isn’t just about watching your bank balance. To avoid surprises, companies also need a good forecast that keeps a midterm and longer view. For example, failing to pay attention to the cash component of capital investments routinely gets companies in trouble. Project net present values can look the same whether the return begins gradually at year two or jumps up dramatically at year five. But if you’re not focusing on the cash that goes out the door while you’re waiting for that year-five infusion, you can suddenly find yourself with very little cash left to run the business, sending you into a spiral you may not recover from.

5. Create a “great Change-Story” :

Companies in distress “don’t” focus enough on creating a change-story that everyone understands—and that creates some sense of urgency…Here’s an example: I recently did a turnaround as chief restructuring officer of a mining company. It was profitable, returned a decent margin, and was cash positive. But the commodity price was dropping, and the board was worried about generating enough free cash flow to drive the capital needs of the business. The change story we created said, “Yes, we are profitable. But the whole point of profitability is to generate enough cash to expand, grow, and maintain operations. If we can’t do that, then we’re headed for a long, slow decline where equipment breaks down and lower production becomes the new reality.”

If you can tell that story in a paragraph or less, in a way that means something to the average guy on the front line, then people will get on board. In this case, employees wanted to have their children and their grandchildren work for this company in the same remote mining location, and the change story spurred them to action. The key was a simple message, NOT fancy metrics.

6. Treat every turnaround like a crisis :

Without a crisis mind-set, you get a stable company’s response to change: risk is to be avoided, and incrementalism takes over. Your workers are asked to do a little more (or the same) with less. More aggressive ideas will be analyzed ad nauseam, and the implementation will be slow and methodical.

In contrast, a crisis demands significant action, now, which is what a distressed company needs. Managers need to use words like crisis and urgency from the first moment they recognize the need for a turnaround. A company that’s in true crisis will be willing to try some things that it normally wouldn’t consider, and it’s those bold actions that change the trajectory of the company. Crisis drives people to action and opens managers up to consider a full range of options.

7. Build traction for “change with quick wins” :

The tendency of most managers is to put all of their focus and resources into Three OR Four big bets to turn a company around. That can be a high-risk approach.. Even if big bets are sometimes necessary, they take a lot of time and effort—and they don’t always pay off. For example, say you decide to change suppliers of raw materials so you can source from a low-cost country, expecting 30 percent lower direct costs. If you realize six months later that the material specifications don’t meet your needs, you’ll have spent time you don’t have, perhaps interrupted your whole production schedule, and probably burned a bunch of cash on something that didn’t pay off.

In addition to going after big bets, managers should focus on getting a series of quick wins to gain traction within the organization. Such quick wins can be cost focused, cutting off demand for some external service they don’t need. Or it could be policy focused, such as introducing a more stringent policy on travel expense.

Not only do “such moves improve the Bottom-Line”, they also “generate support among employees”..In any given company, you’re likely to find that a fifth of employees across the organization are almost always supportive. They work hard. And they will change what they’re doing if you just ask them. These are the people you’ll want to spend most of your time with, and they’re the ones you’ll promote—but you’ll probably spend too much time with the bottom fifth of employees. These are the underachieving ones who actively resist change, look for ways to avoid it, or are simply high maintenance.

What often gets ignored is the remaining 60 percent of the organization. These are the fence-sitters, and they are tuned into action, not just talk. They see the changes going on, and if you proactively work with them, then 80 percent of the organization will be behind you. But if you don’t give them a reason to stand up and be positive about the company, they’ll go negative. That’s the importance of quick wins. When you quickly take real action, and when those actions affect the management team as well, you send a powerful message.

8. “Throw out” your “old incentive plans” :

Management incentives are often the most overlooked tool in a turn-around… In stable companies, short-term incentive plans can be a complex assortment of goals related to safety, financial and operational performance, and personal development. Many are so complex that when you ask managers what they need to do to earn their bonus, many just shrug their shoulders and say, “Someone will tell me at the end of the year.”

In a turn-around, take a lesson from the private-equity industry and throw out your old plans. Instead, offer managers incentives tied specifically to what you want them to do…Do you need $10 million of improvement from pricing ? Then make it a big part of your sales staff’s incentive plan. Need $150 million from procurement? Give your chief purchasing officer a meet-or-beat target. Be willing to forgo bonus payments for those that don’t achieve 100 percent of their target—and to pay out handsomely for those whose results are beyond expectations.

9. “Replace” a Top-team member OR two :

Experience tells me that most successful turnarounds involve changing out one or two top-team members. This isn’t about “bad” managers. In my 20 years of doing this, I’ve only seen a small handful of managers I thought were truly incompetent. But it’s a practical reality that there are managers who must own the decline. And more often than not, they are incapable of the shift in mind-set needed to make fundamental changes to the operating philosophy they’ve believed in for years…Whether they realize it or not, they block that change because they’re bent on defending what they believe to be true. Although it’s difficult, removing those people sends another signal to your stakeholders that there will be changes and you’re not afraid to make tough moves.

10. “Find & Retain” talented-people :

Beyond the leadership team, there are TWO types of people I look for immediately. First are those that have the institutional knowledge. They may not be your top performers, but they know all the ins and outs of the company—and are vital to understanding the impact of potential changes on the business… Many times they are the disgruntled ones, unhappy with the company’s performance. But you need people who are willing to point out the uncomfortable truths.

A turn-around is also a real opportunity to find the next level of talent in an organization…I’ve been through multiple crises where the people who added the most value and impact weren’t the ones sitting around the table at the beginning. I have often found great leaders two and three levels down who are just waiting for an opportunity—and the fact that they can be part of something bigger than themselves, saving a company, is often enough to attract and retain them.

For both groups, it’s important to realize that retention isn’t always about money and bonuses. It’s also about figuring out the individual’s needs.

Good Turn-around managers actively look for those people and find a way to get them involved..!! 

 

“Employee Engagement Facts”: What constitutes a good “Employee Recognition Programme?”| BI WORLDWIDE

” Employee Recognition Programmes” are the key to engagement and motivation…In fact, a well-developed programme, with the correct communications to support it, will help employees feel valued by the business, improving productivity and most importantly reducing attrition. 

How do you engage employees and, more importantly, keep them engaged..? 

The start point for any Reward and Recognition (R&R) Programme is communication. The effectiveness of this communication is paramount to a programme’s success.

The Current Scenario:

In a recent Gallup survey conducted for employees, it was found that about 67% of the 42,000 employees randomly selected, were below the level of disengagement. Employees that are disengaged on an average take about 6.19 sick days per year compared to 2.69 days taken by employees that are engaged in their work, causing a massive hindrance to business growth. It was also revealed that disengaged managers are 3 times more likely to have disengaged subordinates.

Why Employee Engagement :

The simplest reason is because engaged employees are more productive. When employees know that their effort is being rewarded with more than just a salary, their value contribution towards the organisation will directly increase. It is also seen in many cases that along with the passion to work, comes the willingness to recommend their employers to others. An overall sense of satisfaction is achieved that ensures employee fulfilment and retention.

Companies are able to understand that Employee Engagement is a crucial factor in business success.

Yet, over 75% of the Business Leaders ” Do NOT “ have an Action Plan OR Strategy to implement this…!! 

“Scaling-Up” is a “Problem of Both More & Less”:Getting to More without settling for Less | by: Robert I. Sutton | H B R

Huggy Rao and I like to refer to scaling challenges as the “Problem of More” because they always involve getting some existing seed of excellence to take root in more people and more places.

The language of “more” pervades discussions of the topic. Ask any group of executives or nonprofit leaders about scaling, run a web search on “scaling” or “taking to scale,” pore over articles, cases, or research on the topic, you’ll find the dominant words and phrases have to do with addition and multiplication: grow, expand, propagate, replicate, amplify, amass, clone, copy, enlarge, magnify, incubate, accelerate, multiply, roll it out to the masses, and so on.

Venture capitalist Ben Horowitz of Andreessen Horowitz kicks off an inspired post on scaling by quoting the rapper Dorrough, who tells anyone with “a dollar in your pocket, a twenty in your wallet” to focus on one thing: “Get big. Get big. Get big. Get big”…

Yet scaling is also a problem of less. A hallmark of skilled leaders and teams is that, as their organizations grow larger and older, as the footprint of a change program expands, they keep looking for signs of once useful but now unnecessary roles, rules, traditions, processes, products, strategies, and services. To borrow a phrase from author Marshall Goldsmith, they remain vigilant about “what got us here, but won’t get us there.”

A simple example is the all-hands meeting. When an organization is small enough that each member can have a personal relationship with every other, or at least recognize their faces and names, gathering everyone for regular meetings strengthens social bonds and bolsters the feeling that “we are one company.” But an intimate gathering with, say, 500 of your best friends isn’t feasible. My colleague Andy Hargadon noted this when he did an ethnography of the renowned innovation firm IDEO in the 1990s. When the company had 60 or 70 people working at its Palo Alto headquarters, founder and then CEO David Kelley (now Chairman) did a masterful job of orchestrating the “Monday morning,” a weekly 9:00 am gathering. After a brief opening with perhaps some news about the company, a self-deprecating story about himself, or a bit of indiscreet but juicy gossip, Kelley, a skilled facilitator, spent the rest of the meeting calling on people to describe new projects, introducing newcomers, recognizing birthdays, and asking if anyone had seen a good movie or discovered a new technology. Week after week, the field notes revealed that nearly every person in the room contributed at least one comment or joke during these 60-minute gatherings. But once IDEO grew to hundreds of Palo Alto employees, even Kelley couldn’t sustain the intimacy. The Monday all-hands meeting became a vestige of the past and was replaced with smaller gatherings organized around studios and design practices.

As an organization or project grows, and as its challenges change, it not only needs to recognize new priorities, it needs to delete or de-emphasize old ones. Scaling becomes a problem of less because humans and human organizations can only handle so much cognitive load. In other words, successful scaling means finding ways to limit the number of things that people are expected to focus on and execute.

A company that Huggy and I have been studying in recent months called BuildDirect uses an intriguing approach to help its people do this. BuildDirect was founded in 1999 by CEO Jeff Booth with his good friend Rob Banks. Booth and Banks each invested $20,000 to start a company that could ship heavy home-improvement products more efficiently. The company has adopted an Amazon-esque strategy; it now owns and operates twelve large warehouses well located to deliver loads of flooring, roofing, and other heavyweight building materials to do-it-yourself homeowners and contractors. The average order size is 1,500 pounds. Early on, BuildDirect had its setbacks and near-death experiences, but in each of the last four years growth has accelerated. Sales doubled in 2013. And after withering down to 40 employees during the 2008 housing crisis, the company now has 175 employees. Just a couple of weeks ago, BuildDirect received $30 million in additional financing led by Venture Capital firm Mohr Davidow. It intends to open two more warehouses and add 300 more employees in 2014.

My conversation with CEO Jeff Booth, and especially, interviews conducted at company headquarters in Vancouver by Stanford graduate student Rebecca Hinds, revealed that BuildDirect uses a dynamic approach to setting priorities. It was inspired by author Steven Covey’s “five rocks” lesson: If you have a fishbowl, five large rocks, sand, and some pebbles, the only way to fit everything in the bowl is to place the five large rocks in first. If you try to fill the bowl with pebbles first, the larger rocks won’t fit on top.

BuildDirect actually displays its “fishbowl” in a central location, so everyone in the organization can be reminded what its five rocks, or key areas of focus, are. These are revisited every two months, and when a new set of rocks is announced, any employee, regardless of the division they are part of, is able to recite the five priorities that should be guiding their thoughts and actions. As Booth explained to Hinds, “Once we make the decision for the five rocks, right or wrong, we’re going to live them for the next 60 days.” (Until 2013, the rocks were reevaluated every 90 days. But BuildDirect’s rapid growth forced a change to that because “90 days was an eternity for us.”)

Each 60-day stretch is followed by a short period of “white space,” including an offsite meeting where employees think strategically and propose new rocks. BuildDirect encourages its people to propose imaginative, off-the-wall, and even downright weird ideas. After all, the company would never have survived the housing crisis if it had been afraid to change its accustomed ways of doing things. Recently, a “white space” brainstorm yielded a clever new idea for marketing, to cobble together a system that could combine customer-behavior insights gained through email, social media, pay-per-click marketing, and other sources. Implementing the model would cost only $100,000 – so the project was quickly declared one of BuildDirect’s five rocks. Based on better customer retention alone, management estimates this innovation has boosted annual revenues by $10 to $20 million.

But obviously, to create space for any new rock, BuildDirect must remove an old rock. In 2013, after people there identified an inefficiency in the order fulfillment process, a plan to automate part of the process was formulated. But the team later determined that implementing the solution would place such a great burden on the small company that it couldn’t be a top priority at that juncture. Without denying that the inefficiency was a problem, BuildDirect decided to take that rock, at least temporarily, out of the fishbowl.

To help more people go about scaling in the way IDEO and BuildDirect have, Huggy and I have created something we call “the subtraction game.” When we do scaling speeches or workshops, we ask people to think (first individually, then in duos or groups) about a few questions: What was once useful but is now in the way? What is adding needless friction? What is scattering your attention? Then we ask them to pick one or two targets that are ripe for subtraction.

We’ve played the subtraction game with groups as small as 16 and as large as 250. These include “high potentials” from a large retail chain, hospital administrators from Norway, and groups of managers and administrators at Stanford University. And while this is just a quick 10- to 15-minute game, we’ve already heard back from teams that followed through. For example, a Fortune 500 company decided to continue it for a month (with the group of 50 executives we initially worked with sending their ideas to the CEO). As a result, many meetings were eliminated and shortened, payment processes were streamlined, redundant work was driven out. On the chance you might try this yourself, I should probably reveal the added motivation, which might have mattered more in a huge company than it would in an entrepreneurial setting. Right before the brainstorming began, the CEO announced that each executive had $5,000 of bonus money riding on what it produced.

Evidently it was worth it to him to put a lot of twenties in their wallets to get big. Get big! Get big! Get big !!

“Modern Retail Merchandising” : The Art of Mathematical Magic | by: Bhavna Chadha | ET Retail

 

In the broadest sense, “Merchandising” is any practice, which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to the variety of products available for sale and the display of those products in such a way that it stimulates interest and entices customers to make a purchase. How a product stands out on the store shelf often determines its fate in the Buying Decision Process of the customer.

Buying Decision process :

The retail store’s shelf is the final battleground for the consumer’s rupee. If it’s advertising that gets customers into the store, it’s merchandising that gets them to select one product over another , once they’re there. In fact, recent data from the Point-of-Purchase Advertising Institute suggest that 70 % of supermarket shoppers and 74 % of mass-merchant shoppers make their purchase decision inside the store. For many marketers, this strengthens the case that in-store merchandising just might be more important than media advertising. In-store merchandising is also the last chance to present shoppers with information about a product’s features, benefits, price, and positioning. 

The Merchandising Process :

The most important processes in , in-store merchandising are the following – 

Category management – This is becoming increasingly important to retailers. A manufacturer’s merchandising strategy, focused on its specific brands, might be at odds with the retailer’s, which is aimed at increasing sales–and profitability–of the merchandise category as a whole. Manufacturers that show how their merchandising efforts will contribute to the retailer’s objectives are more likely to win the retailer’s in-store support.

Category captains – Many retailers rely on the largest supplier in a particular category to help plan and manage the category as a whole. This tends to squeeze out smaller vendors.

Carrying out the program – Retailers are looking to shift more and more of the burden of putting products on display to manufacturers and their representatives.

Floor-ready merchandise – Larger retailers are trying to eliminate the time and cost involved in ticketing merchandise and otherwise preparing it for display.

Slotting fees are often an issue for new-product merchandising. Since new products are inherently risky, some retailers will demand an extra payment in exchange for making shelf space available.

Merchandisers Role : 

Major packaged-goods companies might have merchandising sales forces large enough to go into stores twice a week to freshen displays, deliver POP materials, and provide product information and training materials for retail personnel, but they are the exception, not the rule. Among the important services that a typical merchandiser can provide are :

• Set up and maintain permanent merchandising displays such as end-caps, and other specialized fixtures for limited-period displays.
• Make product presentations to retail customers and run sampling stations or demo machines for grand openings or other in-store events.
• Monitor inventory and pricing of your products.
• Check on and improve the number of facings and placement of your products.
• Verify store compliance on paid-for merchandising display (such as end- caps) and merchandising materials (such as shelf-talkers or danglers).
• Conduct on-site surveys of store customers.

Merchandising Strategy For Independent Retailers :

The critical strategic advantage of any independent retailer is the ability to focus on, and respond quickly to, customer needs, while providing a superior level of customer service and state-of-the-art product knowledge. In other words, independent retailers should avoid competing on the basis of price, because there will always be a competitor with larger, deeper pockets who will be able to undercut them. And they should look at the traditional model with a different view.