Don’t screw up what you just bought!

Don't screw up what you just boughtIf you know me, you know I like shoes. When the news came out this week that Michael Kors is buying Jimmy Choo for $1.2 billion, it caught my attention. Jimmy Choo is a prestige brand primarily focused on womens shoes. It has a cult following and many top celebrity loyalists. The shoes start at $500 and rapidly increase from there. Jimmy Choo shoes are not just a product, they are an experience.

Michael Kors is down the main with a wide product offering ranging from shoes to clothing. MK shoes start at $50. A much different market than Choo. MK sells through both retailers and company stores. Amidst declining sales, 100-125 stand alone stores are being closed. MK is also looking to sell less through retail channels that heavily discount to move inventory. In other words, revenues and earnings have been declining rapidly. The appeal of Jimmy Choo is the global reach and high end design. MK plans to expand Choo beyond shoes and leverage a higher online presence.

The reality is, most acquisitions fall short of their expectations. The investment thesis does not adequately capture what made the company successful and appealing to its customers. As changes are made with the intention of growing earnings, the point of distinction is lost and customers drift away. And so to does the value of the acquisition. Will Choo maintain its high end design sense? Will the brand get watered down? Time will tell.

In your quest for growth, how do you maintain an eye on the point of distinction of your latest acquisition? Do you really understand what makes the company successful? How are you making sure you don’t screw up what you just bought?

This job wasn’t as advertised

this job wasn't as advertisedIt was getting on in the evening a few nights ago when my phone started chirping. Someone was texting. I picked up the phone to find a text from Jack. He was desperately trying to reach Mike to have a call. I don’t know Jack or Mike. It was a wrong number. The next text came fast. Jack’s new job was not what it was advertised to be and he wanted Mike to bring him back to his former employer.

Unfortunately this situation happens all too often. A person starts a new job, excited for their new opportunity. Many times believing the pasture is greener with the new employer. This type of situation highlights the need to understand how people experience your company. Whether as an employee or a customer, you only get one chance to make a first impression with people. How are making sure people are delighted with their experience with you?

Change only sticks if everyone is better off

change only sticks if everyone is better offChange only works if it leaves everyone better off. Too many times a change initiative makes one area in the business better, but leaves another area worse. When that happens, the organization rejects the change through active and passive means. Change that leaves everyone better off is the only change that sticks.

Are your actions creating a hazard?

are your actions creating a hazardIt is summer in the Portland area. The views are stunning—snow capped volcanoes that sit atop mountain ranges, green rolling hills and winding rivers that surround the city. The many bridges provide for a brief, but spectacular view that is unmatched. And that can be distracting for some drivers new to the area, or just visiting for the summer. Yesterday was a prime example. A driver proceeding well below the speed limit suddenly pulled over to the shoulder and stopped to observe the view. His actions created a hazard, unbeknownst to him, as he was distracted from accomplishing his task of driving safely.

Distractions in the workplace have a variety of impacts on the business. It could be as simple as lower productivity. But it could be a serious as someone getting hurt or killed. Many times, the distracted person is not the one who gets hurt. It is someone else that is nearby. How are you creating a distraction free culture?

Where are you setting the bar?

Set the bar highWhen you think you set the bar too high, you’re actually setting it too low. A high goal may at first seem intimidating, but it will spur thinking about possibility. The trick is having a roadmap to get there, so people don’t think the journey is impossible. Once you gain traction, you won’t hear about the goal being impossible. You’ll hear, “What else can we do?”

Where are you setting the bar?

Its not over till its over

its not over till its overThe long, cold winter led to a late start for the strawberries. It seemed like a short and intense season. After a few weeks, the disappointment set in that there did not seem to be any more strawberries in the patch. But on closer inspection, there were quite a few lurking below the leaves. With a sweep of the hand, the brilliant red berries gleamed in the sun. It took a bit more work to get to them. But, they were the best of the season. Had I given up on the patch, I would have missed the best part.

That is the funny thing about business. Sometimes we give up too soon and miss the fruits of our labor. There is a fine line between reaching peak potential and moving on at the right time. You have to keep a keen eye to understand the business landscape and when the season is shifting, indicating it is time to move on. How are you keeping your eyes open and moving on at the right time?

The Character Actor

the character actorIt was the end of the day. I sat down and turned on Murder She Wrote. Clearly not in first run, the episode was from 22 years ago. As with many episodes, the actors are recognizable today, even if they weren’t that many years ago. But, I couldn’t quite place one of the people. I know I had seen him in something else, but what? Thank goodness for imdb. Very quickly, I was able to locate the actor. He has been in many movies and tv shows over the years that I recognized. With the search results in mind, it was obvious. He had mastered his craft so well that I did not know his name. He was familiar. But only because of his face. His craft let him be who he needed to be at the time. A character actor. A jack of all trades.

The jack of all trades is crucial to many organizations. It is the glue that makes things work. They go from role to role and perform it well. But somehow the people aren’t recognizable. Only that they are a critical player in the show. The thing is, the show doesn’t go on without them. Who are your character actors? How do you celebrate their importance?

20 Tips for Making Your Business Hum

how to make your business hum

 

If you saw City Slickers, you’ll remember Curly holding up his finger and stating there is one thing and you need to stick with it. For a business, that one thing is being clear about your purpose. From there, there are a number of little things that are needed to make your business hum. Here are twenty tips to help you do just that:

 

Your purpose and how it shows up every day

  1. Be clear about who you are and what you do
  2. Make your values known and only hire people who are aligned with your values
  3. Find the balance between having a Taj Mahal and looking like you are going out of business. People need a decent environment to be productive and to be engaged
  4. Get rid of the things that are hard. Doing business for and with you should be easy
  5. Constantly innovate to stay relevant, provide value to customers and outperform the competition

You at your best

  1. Eat well, get enough sleep and exercise regularly. These are necessities for keeping your mind clear and focused, and managing stress
  2. Minimize meetings. There are typically only a few that have any real value
  3. Focus on return on your time. Spend it on things that matter and not just the things that pop up
  4. Surround yourself with people who inspire you, stretch you and bring out your best thinking

Teams that outperform their competition

  1. Hire the best people, align goals and allow them to make decisions. Be clear about responsibilities, accountabilities and decision making
  2. We vs. Them. Them is the competition, not coworkers
  3. Ensure you have all the skills and capabilities at the table so you are making informed decisions
  4. Engage with the best partners, whether investors, suppliers, bankers, etc. They will round out your knowledge and team with you to grow and innovate
  5. Meet with your customers to strengthen relationships, align on how you can best work together
  6. Walk around and talk to the people in your business every day and visit remote locations frequently

Keeping score and outperforming

  1. Set the bar high to cause people to think, stretch and achieve more. At some point, you’ll realize you actually set the bar too low
  2. Know the drivers of your business and how they are performing
  3. Understand your business cycles and how to adjust up and down as the market changes. Companies that outperform act before their competitors
  4. Know when, where and how to invest to grow the business
  5. Act quickly with good, but imperfect information. Speed is more important and course corrections can be made along the way

 

Knowing the levers

knowing the leversDo you know how much money you make on each of your products or services? Almost everyone I have worked with over the years says unequivocally yes! The only thing is, they really don’t. Over the years, a series of allocations and convoluted processes have been developed to try to understand better where money is being made, only to obscure the real profit drivers. Costs get divided into buckets, then divided again, and again so that the true cost is no longer understandable. As times changes, levers get pulled and the results are not as expected.

To regain control of the business, the first thing that needs to be done is peeling numbers apart and making them understandable. Getting away from allocations that distort the numbers is critical. Income statements should reflect the business with key drivers on separate lines. Most importantly though, is getting to profit by product or service. Getting as close to actuals as possible is important because if there are variances developing, that should be a signal to look at price, or that cost controls need to be put into place. The effort in going through this type of approach will highlight key levers in the business and provide information to make better decisions in how the business is run.

Creating a raving fan from a service hiccup

creating a raving fanIf you have a hiccup in service, this is the way to make a raving fan. We all know traveling isn’t what it used to be, breathing a sigh of relief upon arriving at the final destination. This time, the adventures weren’t quite over when I arrived ready to check in at 4:30. The receptionist advised me that my room wasn’t ready yet and would be in about an hour. Without any prompt or comment from me, she offered to buy me a cocktail in the bar for my inconvenience. By 5:00 my salad from lunch had worn off and I decided to have a few oysters to go along with my champagne. Not a bad way to pass the time. 6:00 rolled around and my room was ready. I stood up, asking the bartender for the check, expecting to pay for the oysters, etc. He said it was all taken care of. At the Four Seasons San Francisco, they know how to deliver top end service and turn what could be a frustrating situation into a pleasant one, creating a raving fan.

Service interruptions happen for one reason or another. Many times the response from the person delivering the bad news is “it’s not my fault” that you are not getting the service expected. And it is not. But the person on the receiving end doesn’t care whose fault it is, They just want what they believe they paid for. That is where the company has the ability make either a raving fan or a disgruntled customer. People on the front line have a tough job. Giving them the training, flexibility and authority to create a good experience is what differentiates companies with good customer experiences from those that you see in the news or on social media. How are you empowering your people to create raving fans?