Tom is having a very good summer, with the pipeline more full than it has been in many years. Dick’s sales are up 33 percent over last year, and the year-to-year comparisons have revenues to date in 2007 exceeding total revenues for 2006. Harry’s sales are up overall, but his profitability is down.
All three are very pleased with these results. None of them want their success to be short-lived. The group began our conversation by looking at the specifics of the successes. (Here, let me note that I’ve changed their names to protect confidentiality, but have not changed the facts).
Tom has a full pipeline linked predominantly due to work in a new market with a new large client. This new market opportunity is profitable. However, an important part of the deliverable is being outsourced, and profitability could increase if they could predict the market opportunity and stabilize the cost of delivery.
Dick and his team are using information from their Web site to fine tune their marketing. Analytics on the site are able to tell Dick and his team what the clients find interesting and important, thereby increasing their marketing effectiveness and enabling them to exactly target prospects.
Contributing to Harry’s downturn in profitability are increased costs such as an 18 percent increase in insurance premiums, and a shift in the buyer profile with middle market buyers shifting to the lower end of the product line. Buyers are tightening their belts, and buying accordingly. Operationally the business is getting stronger.
Being Ready
In discussing each situation and how to best leverage the success, two themes rose to the surface. The first is the need to fully understand opportunities, and the second is to have the people on board to take advantage of good opportunities.
As leaders, we each day face decisions on how to best proceed for the company’s benefit. On a foundational level, those decisions are investment decisions and the investments usually involve customers and employees. Understanding market opportunities and having good people are exactly the kind of ROI decisions leaders face.
Good research increases ROI and helps leverage success. When market opportunities arise, it is incumbent on leadership to conduct adequate research up front before making any significant investment in the opportunity.
For Tom, evaluate the new market segment that is delivering good early results. Possibly hire an intern to conduct the research. Or, hire an assistant for Tom to offload many day-to-day functions so Tom can focus on this industry segment for a period of time to validate how real it is. Dick is using the research gleaned from the Web site analytics to fine-tune marketing efforts and more effectively match value-based offerings with the most appropriate clients and prospects.
Hire Right
Regarding investments in people, leaders should build an organization where the collective employees create a culture that attracts good people. We too often make “compromise hires” that are bodies to do a job, but not necessarily a good fit for the culture. Ideally, we want an organization where the employees need us more than we need them. It is a work environment that is valued and envied from the outside.
Building this type of organization is an investment, but a necessary one when pursuing good opportunities. When considering a new hire, invest the time up front to interview and profile in depth any candidate. Consider profiling tools. Consider hiring above the skill set level required, even if it costs more.
To leverage success, understand it. Research its potential. Simultaneously build an organization that embraces opportunities and runs with them.
Ken Cook is managing director of Peer to Peer Advisors, an organization that facilitates business leaders helping each other. You can reach him at kcook@peertopeeradvisors.com.
