Are subtle changes slipping under your radar?

Are you like the frog in boiling water?

It is said that a frog in water, that is slowly heated, will not notice the effect of the warming and will get to a point where the heat makes it impossible for it to escape from the water.  On the other hand if you drop the frog into the already heated water, it will react immediately and do everything it can to climb out.  We quote this idea as it is commonly used by business commentators and observers rather than as an exact reference to actual medical experimentation done in the 1800s.

The point of our little story is to draw a parallel with what can happen in a business where small changes increase the “temperature” progressively making things too hot.

Common things that can happen in any business to “make the water feel hotter” are:

• Costs slowly increasing over time tend not to be noticed
• Revenue growing more slowly than planned
• Margins slipping over time as discounting is used to bolster flagging revenue
• New competitors arrive shrinking the appeal of your established solutions
• Bad publicity damaging public perception of your industry

This slow and insidious process eventually makes the water so hot that it becomes increasingly difficult for the business (the frog in our story) to climb out.  Where ever you look there seems to be a source of heat making it difficult to decide where to start to dampen the fires.

One way to go about tackling this problem is to look back at changes you have made in recent years to see if there may be clues to the cause of current issues.  Many businesses were forced into actions by the economic turmoil that commenced in 2008 so that might be a good place to start looking.

To assist this journey of exploration we have shared a few of the typical heat sources that we see in businesses that we work with:

• If you had cut investment in marketing and selling, but have yet to return to your pre-recession levels, this could contribute to slow revenue growth.  Also the focus of the investment may need to change so explore both the level of spend and where the money is going.
• If, as many businesses did, you cut recruitment budgets you may now be missing some skills that the business needs to address the 2014/15 business environment which is quite different to that which prevailed in 2008.
• A lot of companies have outsourced HR and recruitment and while that might have been the correct decision then, and it may still be correct now, you should investigate how much is now controlled outside the business.  Outsourcing the administrative areas of these functions is probably still a good thing but you should still own your staffing strategy in-house.  The subject of bringing services back on-shore and/or back in-house has received growing media coverage in recent years and just this week the BBC News had an item on “Re-shoring”.
• Training is another area where budget cuts are often used as a survival mechanism but this can evolve into an entrenched habit of spending little or nothing on training and development.  Investing in the continual development of your staff is a sure way to keep the business sharp and strong.
• If you have flattened your hierarchy and cut back on management headcount, if those that remain no longer have time to develop and coach their direct reports it will almost certainly be having a negative impact on the overall performance of the business.

It will not have slipped your notice that some of these steps will involve additional expenditure. Many businesses used cost cutting to survive the early ravages of the recession but cost cutting is just a survival strategy so to thrive, the business will need to return to spending on key areas that can leverage healthy growth.

While we would not recommend chasing the latest business fad or fashion we would also suggest that putting faith in if it ain’t broke don’t fix it is not a great formula for success either; after all, the steam engine ain’t broke, but it ain’t competitive neither.  Consider a mix of; keeping what is working well and is relevant, repair & overhaul where required, and upgrade or add new where there are gaps.

So; how do you decide what to change in your business?

All business functions and practices benefit from a regular review and if required overhaul; not as a reaction to an external force but as a calculated assessment of the return being gained from the activity and how that might be changing over time.

This process of review and assessment should be applied both at project level and at least once per year for the business as a whole.  In a recent article we talked about a zero based approach  where you question everything you are doing and ask; is this still necessary and if it is then can it be done more effectively?  If there are factors in your business “making the water too hot” then by zero basing everything it will help you to identify what needs to be changed and how.

Two areas where there have been significant changes since 2008 are marketing and selling.

• The world of marketing now provides many new options to raise awareness and pique interest in the minds of those who might one day become a customer for you.  While this is of course good, the wealth of marketing choice available today makes careful planning all the more important.
• The world of selling has been impacted by two opposing forces.
  • Firstly, courtesy of the Internet and Social Media, potential customers apparently have access to a plethora of information leading some to believe that they will make much of the journey to a buying decision without directly engaging with potential suppliers.  So, this means sales people need to be savvier about the prospects’ business issues and they need to be more courageous ensuring they proactively engage with prospects early in the buying cycle.  To do this they need to be able to focus on true prospects, understanding why customers really buy from them.
  • The second and opposing force is that the availability of fully qualified professional sales people has been dwindling for many years and this has been compounded by savage cuts in training and development budgets since 2008.  Gone are the days when it was a sellers’ market, the skills of a true sales professional are once more essential if the supplier is to succeed with the discerning buyer.

One of the things you may need to do differently is to put in place the means to grow your own sales and selling talent.

Through the quality manager’s eyes

When I write an article or a blog or make a comment on a LinkedIn discussion I always come at it from my area of expertise which is sales, selling and marketing.  So we thought it might be refreshing to provide a different perspective to the issue.

Identifying Randomness

Di Woodcock, co-founder of Performative, was attending a recent meeting of the Chartered Quality Institute in which the subject of decision making was looked at through the eyes of sales management.  One very important conclusion drawn was that when actions don’t always produce the desired effect, maybe the basis for the decision was flawed, especially if the choice of action misconstrued fluctuations in results and outcomes as something more than a one-off.  Statistical Process Control is not just for manufacturing, it can be valuable for all aspects of business; the use of visual trend analysis based on what actually happens in the business helps you to avoid reacting to randomness by providing statistical evidence of your KPIs to support your decision making.

BTW No frogs were injured in the making of this blog!