“Adventure is not always being in control” Paul Johnson
My old friend Paul Johnson arguably works harder in retirement than he did at Duquesne Systems/Legent Corporation. And he worked hard there, believe me. One of his latest missions is to sail all of the Great Lakes. He’s completed Erie, Ontario and Michigan in past years and just now has finished off Huron. Except this year he kept a journal and created a blog www.travelwithalbion.blogspot.com. Having spent a week with Paul canoeing in the wilderness of Canada I have wistfully lived this summer vicariously through his journal.
One of his later entries caught my attention with this thought: “There is a beautiful simplicity to a small sailboat. Big boats, lots of stuff, lots of problems, lots of things to fix and maintain. Big boaters are continually fixing and maintaining their stuff. They look on at Albions simplicity with envy. Frequently they will come up and tell me not about their big boat, but about that little boat they used to have.”
Companies have been compared to boats for a long time and here’s another great analogy. Big companies are like big boats, lots of stuff, lots of problems, lots of things to fix and maintain”. Also, I seldom meet a person who has successfully grown their company from small to big who don’t lament the early days.
So, if you’re one of the many who are beating your brains out trying to build your small “boat” don’t forget to enjoy the journey knowing that somewhere there is a big company CEO pining away for the days when life was smaller.
Tuesday, September 25, 2007
Thursday, September 20, 2007
Love your customer (but lust your prospect)
“If I asked my customers what they wanted they would say ‘faster horses’” Henry Ford.
This just in! Your customers don’t always give you the best product direction.
In Pragmatic Marketing, Inc.’s e-book “The Secrets of Market-Driven Leaders” www.pragmaticmarketing.com they show a classic quadrant with Unit Sales up the Y-axis and Customer Satisfaction along the X-axis. The magic upper-right quadrant is “Market Driven” on the “Path to Profitability”. The point they're making is customer satisfaction is very important to success. There are tons of studies that discuss how much lower the cost of sales are to an existing happy customer as opposed to dynamiting out a brand new one. You want your customers to be happy and satisfied. More, you want them to be repeat buyers who are great references who sign off on their maintenance invoice without hesitation.
But, be careful letting your existing customers drive your product direction and release schedule. Unless they have a clause in their agreement of features you must produce (and shame on you for falling into that trap) you need to make sure you provide great customer support and a willing ear to their ideas – after all, they’ll be using your product more than you do.
Being market-driven means just that. You must talk to, listen to, and understand the whole market. It absolutely includes your customers as well as your prospects and the ones that got away and bought a competitive product (or did nothing).
A good “business barometer” of a healthy growth company that I learned during my formative years at ADP measures both growth in maintenance revenue (happy customers) and growth in new sales (a strong product line). In any established company this should be the goal.
This just in! Your customers don’t always give you the best product direction.
In Pragmatic Marketing, Inc.’s e-book “The Secrets of Market-Driven Leaders” www.pragmaticmarketing.com they show a classic quadrant with Unit Sales up the Y-axis and Customer Satisfaction along the X-axis. The magic upper-right quadrant is “Market Driven” on the “Path to Profitability”. The point they're making is customer satisfaction is very important to success. There are tons of studies that discuss how much lower the cost of sales are to an existing happy customer as opposed to dynamiting out a brand new one. You want your customers to be happy and satisfied. More, you want them to be repeat buyers who are great references who sign off on their maintenance invoice without hesitation.
But, be careful letting your existing customers drive your product direction and release schedule. Unless they have a clause in their agreement of features you must produce (and shame on you for falling into that trap) you need to make sure you provide great customer support and a willing ear to their ideas – after all, they’ll be using your product more than you do.
Being market-driven means just that. You must talk to, listen to, and understand the whole market. It absolutely includes your customers as well as your prospects and the ones that got away and bought a competitive product (or did nothing).
A good “business barometer” of a healthy growth company that I learned during my formative years at ADP measures both growth in maintenance revenue (happy customers) and growth in new sales (a strong product line). In any established company this should be the goal.
Tuesday, September 18, 2007
Invest more, spend less
"Lack of money is the root of all evil” George Bernard Shaw
The difference between spending money and investing money is usually in the eye of the beholder. I once worked with a CFO and the running joke in the office was that the Grand Canyon was formed when he dropped a nickel down a gopher hole and went digging for it. To him any transaction that had the word “payable” attached to it was just wasting money.
I’ve also worked for some very wealthy people. They had to be because they spent real money like it was Monopoly money. Unfortunately I've worked for less than wealthy people who spent other people's money the same way.
The fact is spending money is fun; hiring bright people, having a cool office, state-of-the art equipment, leading edge marketing et al. What fun, just like a grown up company.
Unless, of course, if you're not a grown up company, you’re a start up, or a restart or a company in financial trouble. Somewhere between squeezing nickels and being cool is sanity.
I once played golf with a guy who said his father always told him to "swing easy whenever it's uphill, into the wind....and all other times". Pretty good advice for spending money too.
Ask these questions:
o What is this being used for….really?
o What business impact will spending this money have....really?
o If you spend capital on this what might have to wait....and which is more important?
o If one of your investors or board members is in the office when it/they arrive will you proudly show it/them off?
o Would you spend your own money on it/them?
Don’t get me wrong, every expenditure shouldn’t become the Spanish Inquisition but with anything that requires care and feeding or goes on a Cap Ex table you should swing easy.
The difference between spending money and investing money is usually in the eye of the beholder. I once worked with a CFO and the running joke in the office was that the Grand Canyon was formed when he dropped a nickel down a gopher hole and went digging for it. To him any transaction that had the word “payable” attached to it was just wasting money.
I’ve also worked for some very wealthy people. They had to be because they spent real money like it was Monopoly money. Unfortunately I've worked for less than wealthy people who spent other people's money the same way.
The fact is spending money is fun; hiring bright people, having a cool office, state-of-the art equipment, leading edge marketing et al. What fun, just like a grown up company.
Unless, of course, if you're not a grown up company, you’re a start up, or a restart or a company in financial trouble. Somewhere between squeezing nickels and being cool is sanity.
I once played golf with a guy who said his father always told him to "swing easy whenever it's uphill, into the wind....and all other times". Pretty good advice for spending money too.
Ask these questions:
o What is this being used for….really?
o What business impact will spending this money have....really?
o If you spend capital on this what might have to wait....and which is more important?
o If one of your investors or board members is in the office when it/they arrive will you proudly show it/them off?
o Would you spend your own money on it/them?
Don’t get me wrong, every expenditure shouldn’t become the Spanish Inquisition but with anything that requires care and feeding or goes on a Cap Ex table you should swing easy.
Thursday, September 13, 2007
Preamble
I do the Friday Quote thing I mention in my profile mainly to keep up with people. By virtue of hanging around for quite a while I’ve gotten to know a lot of people and if I can ping them a quick quote that’s either thoughtful, funny (or both) it lets them know I’m still around. A quirky form of networking, but hey, I’m from Indiana.
Since a blog allows me more space, and since you have to come to it rather than me sending it to you, I needed to decide if I could create a topic that would create even mild interest from enough people. My fear is that people won’t read it. My other fear is that people will.
Steve Johnson, from Pragmatic Marketing, (http://pragmaticmarketing.com/blogs/productmarketing) likes to call these subjects "Everything I thought everybody already knew about running a business." And that’s a good point; too many people assume too much. In fact, that’s a good topic for a future blog.
Anyway, my goal is to pass along “pearls of wisdom” as my ol’ Texas buddy Mike May likes to call them. Like real pearls they’ve been formed by a piece of grit that got stuck in a soft cavity. In these cases the grit is that old nemesis experience and the soft cavity is what passes as my psychotic grey matter.
Since a blog allows me more space, and since you have to come to it rather than me sending it to you, I needed to decide if I could create a topic that would create even mild interest from enough people. My fear is that people won’t read it. My other fear is that people will.
Steve Johnson, from Pragmatic Marketing, (http://pragmaticmarketing.com/blogs/productmarketing) likes to call these subjects "Everything I thought everybody already knew about running a business." And that’s a good point; too many people assume too much. In fact, that’s a good topic for a future blog.
Anyway, my goal is to pass along “pearls of wisdom” as my ol’ Texas buddy Mike May likes to call them. Like real pearls they’ve been formed by a piece of grit that got stuck in a soft cavity. In these cases the grit is that old nemesis experience and the soft cavity is what passes as my psychotic grey matter.
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