The Salesby5 Blog

Mastering the Rockefeller Habits

Bite size chunk #3
Systems and Structures:

A company or an organization will often become stuck or experience a lot of miscommunication and balls getting dropped when there isn’t clear accountability established.

As an organization grows, complexity increases. Take a simple two-point relationship where the two points represent the number of employees, number of product lines, or number of offices within an organization. Notice what happens when you grow 50%, represented by adding another point. The interrelationships dramatically increase from two to six or by a factor of 300%. The complexity increases even more dramatically as you add another point, representing just an additional 25% growth, jumping from six to 24 calculated by multiplying 4 times 3 times 2 times 1. This 25% growth actually increased complexity by 400%. Therefore, simply doubling from 2 points to 4 points increases complexity by a whopping 1200%.

Increases in complexity lead to stress, miscommunications, increases in costly errors, poor customers service and greater overall costs. There is a need for appropriate systems and structures.

The answer is an accountability chart. If you can conceive a position, put someone’s name in it. Even if his or her only accountability is to make sure the position is filled. To make your accountability chart:

 1. List the Roles or key positions in your company and list who is accountable for each position.

 2. List key measures for each position (how do you measure performance?).

3. Take your profit/Loss and balance/Sheet and assign line items to the person.  

Your goal: Identify more than 1 person per key position or no person per key position.

 If you need help in implementation, being the only certified coach in central/south Texas, I am at your service!

 These are bite size chunks from the book Mastering the Rockefeller Habits, click the link to purchase the book.

For about six years I have been the only Certified coach in South Texas for Mastering the Rockefeller Habits, an incredibly solid and arguably the best platform for new, old, slow growth or fast growth companies and organizations. This post starts some bite sized chunks that helped The Scooter Store grow to become a nationwide company 8 years sooner than their goal. It helped Miner Corporation grow over 560% and Rackspace become a fixture in hosting/technology.

The book is not one that you let others borrow, instead, buy them a copy. The book is not meant to be completely understood at first read.  You’ll not be able to put all the initiatives to work at once.  The reason for the bite size chunks is that these are habits to form for you and your team.

Three barriers to growth common among all growing firms: The need for the executive team to grow as leaders in their abilities to delegate and predict; the need for systems and structures to handle the complexity that comes with growth; and the need to navigate the increasingly tricky market dynamics that mark arrival in a larger marketplace.

Bite Size CHUNK #1:

Delegation: Most entrepreneurs actually don’t like working with anyone, including their own employees! This is the major reason why 97% of all firms have less than 10 employees and a vast majority of those have less than three. Therefore, the decision to grow isn’t an easy one. If you can’t afford the people to run the business for you, then all you have is a job. Understanding that many business owners feel they can do everything is true, but what should they be doing? What focus should they have to be able to grow profits, sales, and innovation?

Understanding what your strengths are, not just the activities you are good at but the activities you are the strongest at AND fulfill you, and using them as much as possible each day. The same goes for any employee. Don’t be afraid to try someone that is great at building relationships to be a sales person or a marketer, but measuring how that delegation worked with a simple test is how you know if it is the right delegation or the wrong.

Bite Size Chunk #2:

If you like what you read, imagine a one page strategic plan, yes, one page that provides crystal clear direction for leaders, managers and employees to follow, be guided by and use.  Not only is this a behavior meter but a road map on where your firm is going. We’ve used one for 7 years. The top growth firms even in tough times use this and we feel it is the kept secret in business. For more info on this visit: http://www.salesby5.com/services/strategic/

To purchase or review the book: Mastering the Rockefeller Habits

rockefeller habits checklist

We have 3 weeks until Q3 kicks off! Fast growing and profitable companies known as Gazelles use a checklist each quarter to make sure they are doing the right things with the right people. Checklists are simple and can make a dramatic impact quickly. In facilitating company off site quarterly meetings for many years, this checklist is not just the beginning to a very productive retreat for your company, but it also lays the groundwork to keep all the boxes checked year round. I have provided a snap shot and a link to a downloadable PDF for your company.

One tip to consider…  If you own or run the company, print this out and see how many you can check off, then see how many some of your employees can check it off. This will test your internal communications in seconds.

Yesterday, I had the pleasure of hearing Malcolm Gladwell speak for the first time. He told the story of a man named Vivek. Vivek was born and raised in Mumbai, but he was living in Silicon Valley with his family. His 12 year old daughter decided that she wanted to join a basketball team. Wanting to spend more time with his daughter, Vivek decided to be the basketball coach for his daughter’s team, though he didn’t know anything about the game. To learn more, he watched basketball on tv. What struck him as unusual was that the teams would score, then run to their side of the court, much unlike soccer, where the team scores then the opposite team has to work their way down the field. Having viewed this, he made two decisions: 1) he would never yell at the girls 2) he would teach the girls to play a full court press style of defense. For those of you (like me!) that don’t know about a full court press, it means that you play defense across the court, versus running back to your own side after scoring. To do so, he had the girls waving their arms frantically when the opposing team was throwing the ball back into play, in hopes of intercepting the ball. If that didn’t work, the girls were to surround the girl who caught the ball and wave their hands wildly to block. Fortunately, the strategy worked. The girls, with no basketball experience in their past and a coach who didn’t know the game, went to nationals the first year. The most interesting part was the reaction from the opposing teams coach. Initially, the coach would yell at his girls. Then, the anger would be directed towards the referee, who was clearly “blind” and “incompetent.” Finally, the aggravation became too much for the opposing team and the wrath was cast on Vivek and his girls. They were called cheats, would sometimes have a chair thrown onto the court and Vivek was even threatened by an opposing team’s coach.

Vivek and his girls basketball team is a brilliant example of focus and of rewriting the rules of the game. Vivek knew that his group of undersized, non-athletic 12 year old girls would not be the super star team of athletes, but likely the kids going to Cal Tech. Knowing this, he stayed away from the popular and glamorous portion of the game – offense – and maintained absolute dedication to the part he knew his girls could dominate – defense – on every play, in every game. Vivek rewrote the rules by not going toe-to-toe with the best and the brightest in the league; he created a separate path that was within the rules, but not necessarily the norm.

Consider this, in battles where underdog armies, those considered to be 1/10th the size of its opposition, go to fight, they typically win about 30% of the time. When those underdog armies create a strategy outside of the normal methods of battle, the winning percentage jumps to 65%! Take a look at your company and your sales process. Are you battling the 800 lb gorilla daily? If so, are you using Vivek’s full court press strategy or are your sales being stifled because you’re playing by the rules that your competitor wrote. And, if you are, how fast can you get your new strategy in place?

In the movie City Slickers, a group of friends take a “vacation” at a dude ranch. Curley, played by Jack Palance, is a rough, wise old cowboy who shares the following with Mitch, played by Billy Crystal:

Curley: Do you know what the secret of life is?
Mitch: No, what?
Curley: This. (Holds up his index finger.)
Mitch: Your finger?
Curley: One thing. Just one thing. You stick to that and everything else don’t mean [anything].
Mitch: That’s great, but what’s the one thing?
Curley: That’s what you’ve got to figure out!

Lee J. Colan gives some insight to this classic scene, “Leaders have to figure out the One Thing that defines a meaningful purpose for their teams. The One Thing should answer the question Why are we here? You may think that finding that focus isn’t critical; but in fact, it’s essential to your success. The most important thing in business (and life) is deciding what is most important.”

Get your team together and figure out what your One Thing is. Then, that should guide all of your decisions and your actions. Focus your energy on your One Thing. It won’t happen overnight, but like using your Strengths, a steady effort towards this will pay off in the end!

Pricing expert Mark Burton tells us that pricing is one of the least utilized but most potent tools we have. There is only one purpose for price – to increase profitability. Go through these 3 questions: What is your purpose for price? How consistent is your leadership team in supporting that purpose? If there are inconsistencies, what are the leading causes? You need to understand the value you offer your customer. Then, identify how to create financial value for customers so we can know when to charge more and what to take away when we charge less. Better prices, less discounting and more effective offering significantly increase both profits and revenue. Replace the discounting habit with a little confidence! In the absence of other indicators of quality, consumers look at price. What does your price say about your product or service?

We’re in Day 2 of Fortune Small Business’ Sales and Marketing Summit in New Orleans. We heard from Victor Cheng this morning, who gave great clarity to recession proof business. Companies like FedEx, UPS, Price Mart and Coors were all founded during a recession. They succeeded (to say the least) because they solved a problem for consumers at that time. The key to building a recession proof business is to find a solution to a problem that gets worse during a recession, and to do it in a unique way. This can work nicely alongside what we learned from David Meerman Scott yesterday about social media and viral marketing. Once you have your unique solution to a problem, you will have a great story to tell, so you won’t have to spend thousands of dollars on advertising campaigns. Take a look at your company; is there a better way for you to solve a problem or a struggle for consumers today? Your most profitable area may have changed. Don’t be afraid to reinvent your business in order to offer something of real value to your customers.

(If you’re on Twitter, check out @salesby5 for conference details and live tweeting from the event!)

Last week, we talked a lot about how we can adjust to our current economic climate. We discussed several ways of doing this, including how to focus on your most profitable product or service by identifying the greatest value you can provide to consumers. Another way to increase your marketability is through adjusting your pricing. People are spending their money more carefully than ever, and many companies will have to alter their pricing in order to remain competitive.  Mark Burton, along with his partner at Holden Advisors, has come up with Value Discipline to help guide companies into value-based pricing so that they can deliver greater profits all around. Value Discipline takes into account the following quantitative and qualitative factors that influence pricing:

• Organizational tension such as miscues between Marketing and Sales about pricing or pressure to make today’s numbers at the expense of tomorrow’s goals.
• Competitive actions such as rolling out flanking products, bundling products, or providing discounts.
• Shifting customer demands for value within markets and segments, right down to the after-effects of a new product entry.
• Pressure to rationalize offerings and match their value to specific market segments.
• Fear that too high a price may lead to lost accounts and declining share.

If you haven’t yet begun to adjust your pricing standards, isn’t it time?  This new normal isn’t going away.  Join us at the Gazelles Sales and Marketing Conference to hear more from Mark Burton on pricing.

If you have been following the SalesBy5 blog, you have heard us talk often about adapting to the “new normal” of our economic environment. A recession has the tendency to paralyze and cause fear in small businesses. Instead, we should seek ways to accept the reality and adapt quickly.  How? Victor Cheng, recession marketing expert, tells us that the key is to look at your business financials and business model in parts, and then shift your emphasis toward the segments of the business faring better. Some parts of your business may no longer be profitable, but other parts probably still are. Consumers will never stop buying products or services that add real value to their lives, so find out where your greatest value lies and grow it!  To hear more of Victor Chang’s recession marketing advice, join us at the Gazelles Sales and Marketing Conference April 21-22.

The rules of marketing and PR have changed, according to David Meerman Scott, who has made it into the Marketing Sherpa Viral Hall of Fame twice, in 2006 and again in 2007. He shows us that the old ways of marketing and PR are outdated; you don’t obsess about being “on message,” break the bank with expensive advertising nor do you beg mainstream media to write about you. Instead, you tell your story directly to an interested market.

With all the tools we have to connect with one another—Facebook, Twitter, LinkedIn and Plaxo, to name a few—it is much easier to reach an interested audience. These money and time saving tips are more relevant than ever. To learn more about David Meerman Scott, join us at the Gazelle’s Sales and Marketing Conference!