The Leader's Passion

Yesterday, I had the good fortune of spending a couple of hours with Dan Hayes, President of HealthCall (http://www.healthcall.com/), a first-stage company that is revolutionizing how information is exchanged between healthcare professionals and the chronically ill. During our time together, Dan spoke very little about the economic benefit of his service to his customers, and he said nothing about the value potential of his company's stock to his next group of investors. All Dan wanted to talk about was how his system helps the chronically ill.

Dan's passion is typical of entrepreneurs. In fact, the Leader's Passion is often a company's major asset. Steve McGue is the President of the Shamrock Companies and a PAC Emeritus member. Steve talks about how he admires FedEx (http://www.fedex.com/). "Absolutely, positively overnight" says it all to Steve about the FedEx culture, and, in fact, the history of FedEx is full of stories about employees who felt empowered to take extraordinary steps to fulfill this simple, three-word Mission.

Too many times, when we hear about Vision Statements, Mission Statements, and Value Statements, our thoughts turn to wood plaques on reception area walls. Too often, these statements reflect superficial platitudes. After all, who can argue with "first class customer service" or "honesty?"

If you are a business leader, you have a passion for what you do, and you owe it to yourself and your stakeholders to articulate it. If you want another perspective on this, pick up a copy of "Lincoln on Leadership," a 15-year-old book that is an easy read, yet it clearly talks about timeless and powerful ideas for the business leader in the context of one of history's great leaders. http://www.navyreading.navy.mil/Covers/Lincoln%20on%20Leadership.htm

Put your passion into words. Call it whatever you want. Since your actions are a result of your passion, everything you do and say will reinforce it. The Leader's Passion will become the touchstone for your company and everyone who comes in contact with it.

Nick

Use Your Value Proposition to Align Your Business

We hear all the time from small business presidents and owners who are frustrated by the inability of their companies to deliver. On a bad day, customers are dissatisfied, prospects balk at committing to business, execution is sloppy, and employees are unhappy.

Sometimes this is because the Cubs blew the playoffs – again.

But most times, the problem is that your business processes are not aligned with your business goals, and neither is aligned with your customers’ wants. In short, instead of a seamless profit machine, you have a dysfunctional business.

How can you figure out if that is the case at your company? And if it is, how can you fix it?

A helpful tool is the Value Proposition, a description of your business in terms of value received by customers:

• Your target customers
• Benefits they receive
• What you charge (the difference = value received)

The challenge is specificity: for example, stating that you deliver “high quality” benefits is insufficient to help all parts of your company, plus your suppliers and partners, pull together. Instead, the Benefits must be understandable and measurable to guide actions and resolve conflicts within your extended organization.

Here are a few familiar examples of Value Propositions:

Perdue (http://www.perdue.com/) sells chicken to quality-conscious consumers who value tenderness and low fat, for a 10% premium compared to competitors.

Volvo (http://www.volvo.com/) builds station wagons for safety-conscious upscale families who seek durability and safety, for a 20% premium.

Weyerhaeuser (http://www.weyerhaeuser.com/) manufactures particle board for furniture makers whose customers want a smooth appearance, which eliminates their need to laminate the material while providing a smoother final surface appearance, for a 35% premium.

You can use your Value Proposition in several ways.

• Measuring stick – are you doing what you say?
• Motivational tool – keep your employees aligned with the customer and focused on his prize.
• Planning and evaluation tool – stop doing things you shouldn’t and do more of what you should. In other words, if a piece of your operation doesn’t help you deliver your Value Proposition, fix it.

In short, your management task is to make sure everyone in your company and their counterparts with your vendors, suppliers, and channel partners know what your Value Proposition is, understand it, and use it to guide their everyday decision making.

-- Craig Elderkin

You talkin' to me?

Over the last 30 days, I've had the pleasure of attending 3 events that highlighted terrific new entrepreneurial companies or technologies that might result in terrific entrepreneurial companies. I was a judge at Northwestern University's Applied Research Day, a poster competition that featured University research with commercial potential. Last week, I attended the University of Chicago's Alternative Energy Forum, where I heard 14 companies seeking capital present themselves to an audience of over 100. Finally, last Wednesday, we had our own PAC Cum Laude Forum, where 3 budding companies presented their exciting business propositions to a group of investors.

The commonality of the presenters at all 3 events struck me and reinforced a common trait I see in most businesses. That is, they, and we, are all fluent in articulating the technical benefits of what we do, but they, and we, do not speak to our audience. In the case of the presenters at these 3 events, they all knew that the audience was a group of people with capital, or access to capital, who could invest in their new ventures. Unfortunately, almost without exception, the presentations were full of technical detail and spoke little to what the audience wanted to hear, which was the economic potential of the technology in the marketplace.

While graduate students and researchers can be excused for not thinking about the customer, we who run businesses cannot. How we communicate with our customers is critical to our topline success. Too often, we talk about the benefits of our product without considering the needs of our customer. At our PAC Cum Laude Forum last week, my colleague, Craig Elderkin, recommended the book "Strategic Selling" by Miller and Heiman (http://www.millerheiman.com/) . This nearly 20-year-old book has become a sales classic, and I highly recommend it. In it, you will learn, or be reminded of, the different types of buyers that influence the sales process, such as the Technical Buyer and the Economic Buyer.

Ron Crabtree (http://www.metaops.com/) is an adjunct professor at Villanova University, and he has developed useful tools to help the small business articulate the Voice of the Customer. Ron has spoken to our groups a number of times, and our members always benefit from hearing Ron speak on the topic.

Time and time again, I see business people design their sales and marketing messages around the question "What do I want?" The successful companies design their messages around "What does the customer want?" If you don't know what your customer wants, it's time you stopped and devoted some time and resources to figuring that out. The effort will yield a great return.

Happy holidays.

Nick