With All the Business in Technology, Where’s the Technology in Business?
Filed under: Business Growth, Profitable Growth, Uncategorized
Business people are fascinated by the benefits, profits and potential of technology. Just visit any tech event and witness the financiers, service providers and the media networking with techies to discover “the next business thing.”
But despite all this “technology-transfer”, why isn’t there more technology in business? After 15 years of consulting with more than 430 firms and presenting to or interviewing another 10,000 business leaders, I’m dismayed by how little technology actually makes it into most mainstream, medium and small businesses:
- Most inventories are still managed without RFID or other systems tied into the POS. Despite this decade-old technology being “so easy,” I still see many companies doing it by hand.
- Few companies have good CRM systems. While this software works, few customers integrate their systems with their own sales culture and process or ensure sales force commitment, crippling many users from benefitting from such new technology.
- True cost-accounting information is scarce. Ask business owners what their product or service really costs to make, sell and service and few honestly know. If they had more knowledge, they could more confidently limits test new offers and features.
- Knowledge businesses still communicate with tools from the 1900′s. Despite the many better ways to present and engage their audiences, the gap between what companies say they sell and what customers hear and buy remains enormous. Too few businesses are developing mobile apps or distance learning.
Here’s why there isn’t more technology in business:
- The culture of technology clashes with mainstream business. The technology culture values perfection of their means while mainstream business struggles to convert these means into profitable ends.
- Tech people are schooled to woo investors and grants not to sell to customers. Inventors and startups believe they must write plans to get financing before they approaching and selling customers. Customers need to be understood and served but investors want to be bought out and move on. Who is more important to business longevity?
- Associations and business-plan contests reward planning skills not results. Our schools, associations and governments reward techies more for their thinking than for their sales and profits.
- Social media often encourages engagement without closure. Blogging and tweeting without closing business is like having a fiancé for five years without a marriage.
Why should you in the technology community react or even care? Because mainstream businesses need you, your value and they have money to pay you.
Consider these 3 ways to help you put more of your technology in business:
- Make your “thing” work manually before you try to make it work with technology.
- Understand how your customers use your thing to make money, and whether it’s by selling more, spending less, saving time, reducing risk or improving their lifestyles.
- Sell some version of your product or expertise from the start while you seek investors.
Technology companies have big shoes to fill in sustaining the Western Pennsylvania economy beyond steel. Doing so takes driving their products and services deeply into mainstream business.
Through this column, I will provide you with ways and ideas to do so. Together, we can put more of your technology into business.
Get Your Loving at Home; He’s No Hugger!
Filed under: Business Growth, Pittsburgh, Profitable Growth, Uncategorized
Have you ever wondered what would happen if you cut out all extra service and personal touches from your business? Would customers still come if you were excellent but detached? My recent shoulder surgery was an in-your-face experience of how this works.
After enduring shoulder pain for a year, an MRI confirmed that my rotator cuff was ripped apart. I found Pittsburgh’s best surgeon, and after a 15-minute consult, he booked me. 90 days later, I arrived for the surgery, and was quickly processed, IV’d, gurneyed and staged for the operation. No visit from the surgeon, little small talk from the nurses, and no remorse for their 2-hour delay in pre-op.
When I objected, they sedated me to ensure my compliance and placed me in the queue. The surgeon never visited before or after the procedure, and three hours after the operation, I was sent home to heal. A week later I had my ten-minute follow-up with the surgeon. Running out of time with more questions to ask, I tempted him with the only lure I had. I suggested that he operate on my other shoulder. At this, he gave me another ten minutes, satisfied all my concerns, and recommended scheduling the next one before the summer.
How did this make me feel? Am I a happy customer? What business lessons did I take away from this experience?
I am happy with my surgeon and the results to date. Yes, I felt deprived until I accepted that when it comes to surgery, I’d better get my loving at home. My surgeon and the procedure have my highest recommendation. If anyone needs a shoulder surgeon, call me at 412-973-2080, and I’ll put you in contact with the best one I know.
So what lessons can we learn on running our businesses in a cost-constrained marketplace where raising prices or offering more value is impossible? How do you provide your value when your market won’t pay you for it?
• If you offer a small part of the total package your customer is buying (surgery vs. a fully recovered shoulder), you must be efficient at delivering the only part you can.
• If you have to run a high-volume operation, focus all your resources on maintaining quality and efficiency at the highest volume possible and cut out any and all distractions.
• Spend your non-delivery time on generating more customers.
• Have faith that factors you can’t control — like physical therapy and patient commitment to rehabilitation — will make your work (surgery) speak for itself.
Many years ago, when I was a corporate manager, I sat in on an esprit de corps meeting during which a furious debate ensued over the impact of some corporate policy on how some employees might feel. After listening to this debate, my favorite executive stood up and said with exasperation, “For God’s sake, they can get their loving at home, we run a business here.”
Perhaps there’s a lesson for many of our businesses. Despite every efforts we make to cushion and enhance the experience we offer, sometimes it’s only about focusing on your best and highest use and letting your customers meet their other needs on their own.
Lessons Learned from Marcellus Part 4: Insights After 6 Month’s Focus on Shale
Filed under: Business Growth, Marcellus, Pittsburgh, Profitable Growth, Uncategorized
Not until the summer of 2011, did the Marcellus opportunity begin to make sense to me. Knowing nothing about gas drilling, energy policy or how big energy companies function, I grew increasingly frustrated by all the attention that Marcellus was attracting.
Then I recalled my Economics 101 professor’s simple message; the impact of one dollar spent in the economy is multiplied 3-10 times as it passes from each buyer to another seller. And with a trillion dollars of spending on natural gas in Western PA, the multiplier effect is mind-boggling! Every business that can do business downstream of gas drillers and their suppliers can’t help but grow as Marcellus spending mushrooms. As I conduct more workshops, media interviews and client engagements, I have observed the following progress.
• PriceWaterhouseCoopers is reporting: PWC just released a terrific white paper projecting huge growth for manufacturers serving the gas industry. Its conclusion:
o Chemical, metal and industrial product companies will see orders spike.
o Up to one million workers will be hired.
o Affordable natural gas will cut manufacturers’ production costs as well.
o Natural-gas refueling stations and evolving regulations could inhibit or slow this sector’s growth but cannot prevent it.
o The lower the cost of production of natural gas, the sooner the industry will take off.
o To access the full report, click here.
• My clients are focusing on the low-hanging fruit for their best opportunities or are already overwhelmed with demand for their products. My construction and environmental clients are seeing particularly large opportunities and real sales growth. Contact me with no obligation (412) 973 2080, and let’s chat about how your firm can participate in Marcellus.
• Interest is building: I will present workshops in Pittsburgh, Wayne, Shenango and Washington counties over the next 60 days. Click here to see which one you can attend to start preparing your business soon.
• Associations are responding: The Small and Medium Business Council’s (SMC) Dynamic Business Magazine is launching my new column “Profiting Thru Marcellus” in its January issue available soon through its site, www.smc.org
Five Keys to Sustaining Your Advanced Consulting Business
Filed under: Business Growth, Pittsburgh, Profitable Growth, Uncategorized
After 14 years of consulting and relocating my business to Western Pennsylvania, many of you have asked, “What keeps you going, Andy?” In advance of my introducing an “Advanced Consulting Mastermind Group” with Michael Couch and the Pittsburgh Consulting Community on January 31st, here’s a preview of my keys to keeping your consulting business healthy and wealthy.
1. Sustain and nurture your professional passion. Constantly learn about your clients’ challenges and help them succeed on their terms.
a. Live to learn, but advise with detached passion. Stay devoted to your clients’ success and your market’s evolving needs and challenges. Develop a contagious curiosity for what could be and the unwillingness to accept the status quo. Your clients need this the most from you.
b. Focus one third of your time on each of the following:
i. Selling new clients and projects
ii. Delivering the best work you can
iii. Developing your own business
2. Focus on Your Best and Highest Use
a. Refine what you’re good at, like doing and what the market has paid you most for doing.
b. Repackage, repurpose and reinvent how you provide your Best and Highest Use. Constantly check what’s selling, how content is being is being adapted and what new problems and opportunities are confronting your buyers.
3. Embrace the ups and downs. No client, methodology, problem or market will sustain you forever
a. Change is constant in the consulting business. What was once scarce becomes abundant. Clients change and problems ebb and flow. Recognize the differences between business fads and timeless principles.
b. Accept what you can improve as an outside change agent and what is the client’s responsibility. Your client’s engagement is non-negotiable if you are going to help them.
4. Learn from the best, but do it your way
a. Surround yourself with the best practitioners as teachers and as peers. Consulting is a business where clients repeatedly paying and referring you is your best measure of success. Beware of those who spend more time teaching than consulting. Longevity in this unforgiving business is the best measure of success.
b. Do it your way. A most wonderful aspect of consulting is your ability to customize your practice to best support your gifts and preferences. You choose your clients, the problems, how you best work and what goals you set.
5. Above all, do no harm
a. Your clients are in your hands. Consulting is unregulated, unlicensed and requires no education or certification. You are your only judge of what’s ethical. Always take the high road.
b. Your business is sacred. Your business is as important as your clients’ businesses and needs equal attention. Invest in it and nurture it so it will be stay healthy and remain state-of-the-art.
Consulting through the years makes for a wonderful life and profession helping clients reach their goals and yours along the way. Cherish, protect and nurture your business, and it will reward you in every way. If learning more about consulting and my insight is of interest to you, check out the Pittsburgh Consulting Community at http://www.mcassociatesinc.com/community/index.php after December 21st and join Founder Michael Couch and me on January 31st when we will introduce two exciting consulting roundtable opportunities for you!
Connecting Engagement to Profitable Growth
Filed under: Business Growth, Profitable Growth, Uncategorized
For years, I have wrestled with what role social media role really plays in creating profitable growth and wrote a rowdy piece for AMEX on it here. But building relationships or “engagement marketing” is critical to creating profitable growth. And recently, when Constant Contact asked me to speak at their engagement conference on profitable growth, I presented the following 5 findings:
Five Key Findings
1. Customer Engagement
+ Your Firm’s Value
==============================
Profitable Growth in the New Economy
It is nice to chat online with communities and prospects, but it is crucial to speak in terms of your firm’s value and expertise. Whimsical topics may generate awareness and interest, but they must create live conversations where buyers can build interest and take action that leads to closed business and your profitable growth? Just like in marriage, unless engagement leads to committed customers it’s a waste of time and effort.
2. To ensure your engagement efforts generate profitable growth:
- Do your math. Determine your how many engaged prospects you must generate and how many of these you must convert into buyers to make your money.
- Focus your engaged prospects on your Best and Highest Use (BHUTM.) When you know your firm’s BHU and inject this into your conversations, your best prospects will respond to you in these terms.
- Convert customer engagement into profitable growth. Budget your engagement activities all the way through to your profitability.
3. Confirm that your engaged customers stay profitable.
• Measure exactly how much money your engaged customers are spending.
• Track your cost of engagement and never let it exceed customer profits.
4. Watch and ensure that your profitably engaged customers are paying you:
• Measurably and predictably
• Because of your social media/marketing
• Based on your firm’s value
5. Discover the specific ways how profitably engaged customers are paying you:
• They buy samples, trials, assessments and diagnoses
• Then they buy more
• And they refer your company to their peers who do the above
Customer engagement is a new word for building relationships, which is as critical as it is imperative. But social media and networking, without a connection to profitability, is a new word for monkey business. Make it your business to do it right!
Lessons Learned From Marcellus Part Three: Timing: When’s Your Right Time to Pounce?
Filed under: Business Growth, Marcellus, Pittsburgh, Profitable Growth, Uncategorized
“When will the Marcellus boom impact my firm?” Since timing is everything, you need to know when’s the best time for you to invest and gain a12-month return. If you are hearing all about opportunities but seeing few leads, buyers or orders from shale-related business, you’re not alone. Throughout my recent trips to West Virginia and throughout Pennsylvania, I’ve been watching the boom happen in fits and starts.
Last time, I wrote you about which industry sectors to watch first. Now, here are my thoughts on how to time your Marcellus initiative. When will the “Marcellus money” hit your business? For my insights read on:
When is the right time to invest in your Marcellus-related business? The answer will depend on how your region is advancing regarding the following factors:
1. Water regulations need to be “flushed out”
Right now, testing protocols for determining the impact of Marcellus drilling on ground water are being set and revised. This is for everyone’s benefit. And of course, there is a healthy debate. What is the definition of clean water and within what radius? And if a well, soil or drilled sample isn’t clean, then why and who’s to blame?
Which jurisdictions will prevail in setting the rules? State, local and federal agencies are jockeying for control, but lag behind industry groups like the Marcellus Coalition who are better funded and more sophisticated testers. Once protocols are set, who is liable and who will enforce the rules should follow quickly.
2. Midstream piping capacity is the current bottleneck
The gas wells that are already built are pumping all the gas they can, and that local facilities can store and, existing pipelines can transport. New pipeline capacity to move the gas downstream is in the works. Until new pipelines are approved, the midstream builders are waiting for orders and the fees that will help accelerate the Marcellus boom. These payments will not just be for the construction of the pipelines, but will also trigger the gas royalties that landowners will receive. Now, most landowner spending is based more on their lump sum windfalls from selling gas rights. When drilling starts in full stream, then royalty payments will start. This will clearly accelerate across-the-board spending.
Downstream businesses, namely those who benefit from the gas businesses are lining up behind several large opportunities. For example, a billion-dollar plastics plant producing pellets and film from gas is being contemplated in West Virginia. The business impact is obvious. And the four sectors previously described in my Lesson 2 — business services, transportation, infrastructure and construction are obvious beneficiaries and will be the first to show the boom is accelerating.
3. The price of gas must rise and stay over $4 per billion BTU’s.
As dependent as our nation and this region is on Middle Eastern oil, this oil and other gas alternatives can still be cheaper for producing heat and power for many commercial and residential applications. Although I’m not qualified to explain or refute this, the energy community thinks that the $4 benchmark is the tipping point for gas to become the prime choice. So, it’s a matter of time before higher oil prices will increase demand for natural gas, thereby increasing its price.
4. The Utica Shale opportunity could make Marcellus seem like the tip of the iceberg.
The Utica tract is the next, big opportunity adjacent to and underneath the Marcellus. It is deeper, richer and larger than the Marcellus. Apparently, it contains gas, oil and other minerals. Its simple existence reduces the risk of Marcellus alone to meet business expectations. As there’s more evidence, investors, drillers and their indirect suppliers and beneficiaries will certainly put their money where their confidence is.
5. Consolidation
Every month, other under financed, smaller drillers are being bought out by the major energy companies, as much to eliminate the risk that their corner-cutting practices pose to safe operations as for their value. Larger producers want clear regulations to comply with. In Pennsylvania, their group, the Marcellus Coalition, is also consolidating as the top-tier.
So when is the timing best for your firm to invest in the shale opportunity? My best advice is to watch your region in terms of the five factors I described above. The boom is coming. Stay tuned as I learn and share more.
Making Money on Marcellus Part 2: “Finding Your Target Markets in the Marcellus Shale”
Filed under: Business Growth, Marcellus, Pittsburgh, Profitable Growth, Uncategorized
“Where is my opportunity in the Marcellus Shale?” I’m hearing that question asked more and more but answered less and less. Where and how do you grow your business if you have neither property to lease, nor services or products to sell to gas drillers? How do you shortcut the 5-10 year’s lead-time it’s supposed to take for Marcellus region’s economy to benefit every business? Are you willing to take a methodical approach to growing your business through Marcellus?
For property holders, and the fortunate few who can sell gas drillers, products, services, or transportation, the riches of Marcellus are already flowing. If you can’t figure out where your business fits in, the answer may be right under your nose. Curious? Please read on.
In this earliest of phases, Marcellus is only about building gas wells to extract gas. Fortunately, doing so takes people, infrastructure, services, and transportation. Let’s explore each one:
- People. While residents may resent the big companies importing experienced work crews from Texas and Oklahoma who will work 7 days a week for $40/hour, these workers need services beyond what their employers provide. And thousands of support jobs are going unfilled. Transient workers are experienced at working hard and spoiling themselves. Also, they need support at their worksite, where they bunk and for their families are back home. And local residents will accept training and support jobs and will be joined by immigrants moving in from depressed regions in search of better opportunities. What can your business offer people to improve their lives in Marcellus?
- Infrastructure. From roads to subdivisions to shopping to worship to recreation, Marcellus means opportunity. As roads are improved, businesses are coming in to support the support system. What products and services has your business offered to the construction, architectural, engineering and subcontracting industries that will be in demand in the Marcellus region? As natural resources are consumed, stretched and probably exploited, what products and services can your company offer to leverage, monitor, or protect the infrastructure and the natural resources with which it must coexist?
- Business services. While lawyers, surveyors and realtors are already making it big in Marcellus, what about your business? If you can sell anything to any business serving the gas drillers’ vendors, your business’ doors are opening. Business to business services are particularly lucrative opportunities since there were few such business services in these areas and outsourcing is the rule as businesses are racing to please their customers ASAP.
- Transportation. Shippers, logistics and supply chain industries are first coming to Marcellus to transport water and well supplies, but the drillers’ vendors and their suppliers will need all kinds of transport. With the emphasis on environmental safety and monitoring, combined with the fact that most of the Marcellus tract offers wonderful recreational opportunities, transportation services of all kinds will be needed to move supplies, people and information throughout the region. What can your business transport or provide to transporters?
So how can your business participate in the Marcellus boom? By thinking about what part of the first wave of people, infrastructure, services and transportation you can catch and ride. In the coming months, I will write about the best timing for when your firm should pounce and then, how to understand and predict buyer behavior. Stay tuned!
And if you just can’t wait, join me next Wednesday the 26th when I will present my workshop on Growing Your Marcellus Business at California University for the Marcellus Chamber. Learn more here. (To register online click here.)
5 Steps to Refocus During Tough Times
Filed under: Business Growth, Pittsburgh, Profitable Growth, Uncategorized
Whether it’s the economy, your family, business, community or society, probably some part of your world has suffered over the last five years. Unfortunately, there are enough signs show that the next few years will continue to challenge even the luckiest, blessed and oblivious among us. Even as we strive do “right and good,” what do we do if: demand for what we sell, access to resources we require, or our energy and drive simply dwindles?
If you need a pep talk, read on.
- Recognize bad signs fast. As it’s been said, once is a coincidence, twice a trend, three times, a certainty. If something isn’t working, figure out why ASAP. The world is changing faster yet most people can’t change at all. Every day I speak to people who feel trapped in so many ways. They have become what they tolerate because their pain of changing remains greater than their pain of not changing. In business, however, your marketplace (customers, employees and vendors and investors) will tell you the truth. For the other parts, get the personal, professional or spiritual support you need to accelerate changing your bad to good.
- Take stock in your value; Your Best and Highest Use® Accept quickly that your expertise and your firm’s experience are your greatest treasure. They remain yours forever and always the ingredients and foundation of your renewal.
- Keep your eyes open; seek opportunity. Wherever there is pain, need or hope, you can find and make opportunity. Follow your heart and your head. Your internal voices are ever more righteous as you mature. When most people take a hit, they lose faith in their judgment, impact and options. Stand apart and stay confident.
- Refocus, regroup, repurpose. Take your BHU and the opportunity or pain you uncovered and link these and then find customers who will value your repackaging. Activity matters so keep trying new versions and push forward. Try giving away your reinvention or better yet sell it right away. In facing setbacks such as bad timing, backward thinking and an ADHD society, rely on your passion and conviction to drive you to success. Remember your BHU is portable and deliverable. If you doubt where’s the demand for your value, go where you:
- Are getting human and viral response
- Have raving fans
- Are scarce
- Stay focused/don’t blink. Anything you create takes 3-6 months to generate reaction/awareness in the marketplace and 1-3 years to take root. Create the opportunities for quick wins and the metrics to prove your wins are real. Before you can generate market success and profitable growth, remember to create prospects, and qualify and develop them into buyers.
- Connect online as much as you can
- Get seen, heard and interviewed
- Identify and nurture allies, referral sources and champions
- Make your viral marketing portable; avoid investing in fixed costs, particularly of traditional sales and marketing.
Whether or not this all makes sense to you, think about the parts that do and put them to good use in refocusing your business in tough times. Email me at abirol@andybirol.com.
Companies Either Grow or They Are Sold
Filed under: Business Growth, Profitable Growth, Uncategorized
While financial gamers, schemes and scams have enabled many companies to avoid either profitable growth or a sale for years…
… ultimately one of these options is inevitable.
◦A company that is profitably growing is controlled by passionately committed owners and investors.
Their firm is financially and operationally self-sufficient. There is no need to merge or look for investors. Its leaders can reduce its credit line and pay down outstanding loans. The company has customers who are happy to pay for its valuable products or services. Over time, the company will build up retained earnings and become a creator of wealth. As long as its owners are confident and passionate they should never think of giving up their independence in running it or cashing out. Life is good!
◦A company that is not growing profitably has flat or declining sales.
Its costs and expenses are fixed or rising and it starts to lose money. The company begins to consume more cash than it generates. Owner, banks or investors have to subsidize the company through credit or by tapping any retained earnings. These leaders lose passion for their business as it is no longer self-sufficient. Clearly, its customers cannot or will not pay enough for the firm to delivery its products and services. First, the company runs out of cash, then out of credit and finally must be sold.
There are only two buyers for a company that is not profitably growing:
1.New owners and investors with ideas, cash and passion to return the company to profitable growth.
2.Bankruptcy trustees who sell the company for whatever they can to pay creditors pennies on the dollar.
So companies either profitably grow or they are sold.
What’s it going to be for your company? Do you agree or disagree?
Making Money on Marcellus: First Lessons Learned
Filed under: Business Growth, Marcellus, Pittsburgh, Profitable Growth, Uncategorized
If you own a business in Western PA/Eastern Ohio, the more you learn about the trillion-dollar business opportunity called Marcellus Shale, the more you may wonder how you can best profit from it. But unless you’re selling directly to gas drillers or energy giants, you are probably wondering what to offer, who to approach and how to go to market. As I’m helping my clients and workshop attendees do this, here’s the first in a series of lessons I’ve learned:
First Lessons Learned on Making Money on Marcellus:
- Make Marcellus your rising tide; not your tsunami: Find a portion of the overwhelming demand you can profitably supply and make sure you can deliver on any business you close. As tempting as it is, don’t let any one customer become more than 20% of your business. My friend Shaun Seydor’s seminal report ” The Economic Impact of the Value Chain of a Marcellus Shale Well” *is a must-read and linked here with his permission and my gratitude. Read it and think about where your can catch the wave.
- Follow the money and bring your “A” game: My early advice to clients is to avoid the big players (Range Resources, EQT, Chesapeake, Exxon/Mobil etc.) and sell to the companies who sell to these big boys. Stay one step removed from the “tier one” companies, and you can keep more control over how you do business. But it’s still a fast and furious world and strong contracts are imperative. Put your best foot forward and never forget: with all this opportunity you are competing in the big leagues. Fortunes will be made and lost. This is a great time to Recharge Your Best and Highest Use®
- Stake out your value and place in the food chain. Learning where and to whom you offer the greatest sustainable value is critical. There are many ways to slice the Marcellus marketplace. Identify your ideal target buyer and know their buying process. Build a selling process that matches their buying process. Here’s an article to help you think about this http://profitablegrowth.com/shout-out-or-shout-at-your-sales-force-is-it-generating-sales-growth-in-the-new-economy/ Also, decide where your business fits into these two graphs from the Marcellus report: Figure 1 – Types of Economic Impacts (p 4.) and Figure 2 – Phases and Key Steps in Developing a Marcellus Shale Well Site (p.10).
- Timing is everything. Many business owners I’ve met operating in the Marcellus tract complain that the “out of towners” won’t hire local companies or that “the money is yet to show up.” Make sure what you sell is ready to be purchased. Watching what your customer’s customers are buying is one way not to make your move too soon or too late. Here’s a piece I wrote in a different context but has some good tips on figuring out your best timing http://profitablegrowth.com/is-your-demand-down-or-distribution-dying/
- Chase transactions or relationships Most companies working in the Marcellus space can be split into transactional firms who do business one sale at a time (e.g. gas stations) and those relationship companies growing over the long term (e.g. cleaning companies.) Match how your business profits best to the right kind of kind of customers that you should do business with. To help you decide which you should focus on, here’s an article for you http://www.andybirol.com/DisplayContent.aspx?MenuID=626
Unlike the great Oklahoma Land Rush where everyone got a fair start at the same huge opportunity, Marcellus is much more complicated and tricky despite the trillion-dollar economic windfall it is. Stay tuned. This is the first in a series of pieces I will write as I learn lessons with my clients and workshop attendees on making money on Marcellus.
Do you have questions on how your business or audience can make money on Marcellus? Call or email me and let’s talk about it.
*By Heffley, Seydor, et al & the Katz Graduate School of Business at the University of Pittsburgh.
