Are you taking into account predictable changes in your forecast?

expect predictable changesI was getting ready to head north to Seattle. The drive time according to GPS was 2.5 hours. That might have been the case at the moment, but many times the traffic clogs up around mid day. By the time I was nearing Seattle, surely I would hit traffic that GPS wasn’t forecasting. And I did. It added about an extra hour to the drive. Good thing I planned for it, as I would have missed my first appointment had I not.

In business, there are many situations that are known, but don’t always show up in the tools you are using to plan for the future. It could be seasonality or cyclicality in your business. If you take your current month or annual sales and project them forward, you are likely to miss your projections all together. This happens more than you would expect. How are you taking predictable changes into how you run your business?

 

Is it time to step on the gas?

know when it is time to push on the gasHave you ever noticed cars slow down going up hills or to the top of a bridge? Once the peak has been reached, traffic speeds up and gets back to speed limit drives. This happens because the gas is not applied a bit more to maintain speed going uphill.

Headwinds can be experienced in business in the form of choppy market conditions, new competitors, supply chain disruptions, etc. Businesses that excel step on the gas. They figure out how to move faster. By doing so, they are way out ahead of the competition when the market conditions ease. How are you making sure you step on the gas at the right time?

History repeats itself

history repeats itselfHave you ever heard this situation? A company makes changes to its strategy and people development plans to grow, only to find it is stumbling significantly after the changes are made. This exact situation came to light in a conversation recently. A few decades ago, the company underwent an initiative to address cyclicality in its business, leading it to change its strategy and expand its offerings to minimize the impact of the cyclicality. It also undertook a deliberate effort to match the right people to the right position to minimize risk in the business and grow skillsets.

Years later, the company backed out of the newly expanded offerings. The cyclical part of the business was doing extremely well at the time and the newly expanded offerings were not quite as profitable, so resources were reallocated. And to meet the needs of the business, people were promoted more quickly and did not have the full skillsets. As a result, the company found itself in the same spot it was a few decades before. The history lessons had not transferred between generations of leadership. How are you making sure history does not repeat itself in your business?

Making a mistake isn’t the problem

making a mistake isn't the problemMaking a mistake isn’t the problem. People will make mistakes as they grow in the company and their career. The trick is getting them to a place where they can make mistakes without major consequences. And if you are hiring senior people, you need to learn what mistakes they’ve already made and what they learned. Otherwise, you run the risk of them making a needless mistake with you.

I didn’t expect that

I didn't expect thatRecently, the city of Portland installed parking meters on a street where a business I frequent resides. I’ve gone there regularly for the better part of seven years. And the street was always packed, making it difficult to park. That was until last week when the meters went in. I was shocked. No cars were parked on the street. I was told a letter from the city explained this would happen. After all these years, the cars disappeared. I did not expect that result, but then, I’m not an expert on the patterns of behavior after parking meters are installed. The goal was to make more parking available. Goal achieved.

Have you ever found yourself in a situation where you are being advised by an expert to take specific actions to achieve your goals? Sometimes it is worth listening to and acting on the advice when demonstrable results exist. How are you finding different perspectives to get the results you desire?

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?