At Marriott Consulting, when we help an organization with a strategic plan, one of the things we look at is how the firm's managers manage. It is well documented that decentralizing decision-making often improves productivity and leads to innovative solutions to many problems. But it's difficult for many managers to delegate well. Why?
Are You a Leader or a Coach? What's the Difference?
In an excellent article, columnist John Hunt of the Financial Times in London describes the difference between a leader and a coach. Hunt finds a great example of the difference when business leaders take their families on vacation: the qualities that work brilliantly with subordinates are dismal failures with spouse and children. The difference, Hunt says, is that leaders lead by example, "encourag[ing] people to develop through imitation," with a strong emphasis on correcting what's wrong. Coaches, on the other hand, are "developmental, not remedial," with a goal of neither correction nor perfection, but continuous improvement.
At Marriott Consulting, we have seen the value of strategic partnerships in an organization's success. We think they are so important that an extensive survey of current and potential partnerships is a significant part of our research for clients.
In most cases, organizations use strategic partnerships to obtain product components or corporate services more efficiently than if they provided them in-house. But some companies use strategic partnerships for other reasons: to test new markets before committing to entry, or to obtain critical know-how from companies with whom they may later choose to compete.
So you want to pursue a growth and expansion strategy? How should you divide your efforts and resources between your existing products and services, and the ones you anticipate offering?
At Marriott Consulting, we have found that a good rule of thumb is that your existing core business should carry 60 to 70 percent of the financial load in such a strategy, with new products and services providing the remainder by the end of the plan period. Concentrating too much, too early, on new products may not bring the desired results, while at the same time drawing customer attention away from established, profitable lines.
(An article from "Startup Journal," a publication of the Wall Street Journal)
When you first go into business, you need to devote as much time, money and effort into attracting new customers as possible. After all, since you need every dollar you can get to make your business succeed, you'd be crazy to turn anyone away, right?
Wrong. That philosophy, seasoned business owners say, is a quick way for fledging start-ups to spiral downward.
T.C. Smith, co-owner of a FastSigns franchise in Springfield, Va., learned this lesson early in the life of his four-year-old business. "I still remember thinking that we had to take every customer," he says. He soon realized that some new clients were so time-consuming that they were unprofitable.
Do You Have the Right Stuff to Be an Entrepreneur?
What does it take to be successful starting a business? While there's no such thing as the perfect entrepreneur — even Bill Gates has made mistakes — a number of personal qualities can help you to build a successful business. If you pass muster on most of these traits, you're off and running.
Here's a story about an independent gas station owner who got so fed up with rising gas prices that he finally refused delivery on gasoline until prices come down. In the meantime, he's working 16-hour days to keep up with the increased volume of car repairs and is making more money than ever.
Have Organizations Abandoned Strategy? Part 2
(More from an interview with Harvard Professor, Michael Porter in a Fast Company magazine article, March 2001)
"The ability to change constantly and effectively is made easier by high-level continuity [i.e., strategy]. If you've spent 10 years being the best at something, you're better able to assimilate new technologies. The more explicit you are about setting strategy, about wrestling with trade-offs, the better you can identify new opportunities that support your value proposition. Otherwise, sorting out what's important among a bewildering array of technologies is difficult. Some managers think, 'The world is changing, things are going faster — so I've got to move faster. Having a strategy seems to slow me down.' I argue no, no, no — having a strategy actually speeds you up.
At Marriott Consulting, we often say that a CEO only has three essential duties: to go to meetings, read reports, and make decisions.
That's true. But when we talk about going to meetings, some of the most important ones will be customer meetings.
Think about it. Without customers, you don't have a business. So it makes sense not only to talk to customers, but also to listen to them, so you know first-hand what their needs and desires are. Then you can tailor your company strategy to meet those needs.
Your strategy needs to be focused on customer service throughout your organization as well, for the same reason. Here's part of an editorial from a high-tech magazine, Interactive Week (May 7), by Tom Steinert-Threlkeld, a Vice President of Ziff Davis Media, one of the largest high-tech publishers in the world.
(article from chiefexecutive.net)
Guess Who's the Chief Reputation Officer?
Difficult to earn, but easy to lose, a company's reputation is a fragile thing, and judging from the results of Chief Executive's third annual study of corporate reputation, the burden of caring for it falls squarely on the CEO. By J.P. DONLON
REPUTION WAS ONCE considered an intangible benefit. Not anymore. Increasingly business leaders see it as a bankable asset.
"A good reputation creates demand, and demand can command premium pricing," says Jim Copeland, CEO of Deloitte Touche Tohmatsu. 'It also defines the markets' expectations of everything you offer.'
'The value of a good reputation is never more evident than in times of crisis,' says Ford's Jacques Nasser, who ought to know given the events of last summer. 'A company with a reputation for doing the right thing, for caring for customers, will be given more leeway to fix mistakes than a company with a little known reputation or, worse yet, a negative reputation.'