October 29, 2009

Applying Einstein's Favorite Growth Formula

Albert Einstein is said to have bestowed greater accolades on compounding interest’s “Rule of 72” than on his theory of relativity, calling the investment doubling time formula "the greatest mathematical discovery of all time."

Over the past 18 months, we have worried about return on investment, but as growth regains a more “front and center” priority, investors and owners should dust off time-honored MBA tools, such as compound interest formulas, in order to jumpstart both thinking and action around return on investment.

As the economy gains momentum, a forward-looking approach to growth using tools such as the “Rule of 72” may even help organizations move beyond it – perhaps to the Rule of 114 or even 144 as they seek to triple or quadruple those returns.

October 22, 2009

What Goes Down Must Come Up

The cynics always say, "what goes up, must come down," but this October, we’re experiencing more promising business development activity in three weeks than in the previous nine months of 2009 -- strong anecdotal evidence that "what goes down, must come up." 

Private equity firms are firing up the M&A machine and as a result, we are seeing increases in diligence and post-transaction service inquiries. Owner operators are making investments in improving the people and processes within their operations in order to re-position -- both for growth and for sale.

Companies best positioned to rise along with the M&A and business process re-engineering rebirth are those who have spent the past six to nine months “laying the nerve endings” for new business -- diligently keeping in touch with prospects, reinforcing awareness and name recognition, and refining the ability to deliver superior products and services.

October 13, 2009

Taking Business Development from “Jungle-Fed” to “Zoo-Fed”

I love it when I find metaphors that effectively distill complexity into a few words, sizing up the situation like a custom-made Italian suit. So when a friend recently referred to her business development activities as primarily “jungle-fed,” and expressed her need to attract more “zoo-fed” business, I paused for a moment, processed the metaphor, and smiled. Perfect!

Her description is particularly apt for today’s competitive environment, which becomes more “jungle-like” every day. Interestingly, as I surveyed the room of CEOs in which this comment was made, I unscientifically observed that those with primarily “zoo-fed” businesses had revenue streams embedded in either a technology solution or software as a service, or in government contracts. 

I also concluded that my friend’s metaphor captures a key question for all business leaders in 2010-2011:  How can we increase the percentage of “zoo-fed” business at our organizations?  

October 1, 2009

Client Service Without Conditions

In this photo of a Philadelphia retail establishment, a business pledges to offer customers “the best service possible” -- but directly above this warm and fuzzy statement is a cold, harsh notice that “NO CASH REFUNDS” will be provided.

Given the current economic landscape, client service with conditions just isn’t a winning formula. Companies are now thinking longer and harder over any potential investment in a product or service, and have no qualms about walking away if the response to their terms and requirements is buried in the fine print. In our now hyper-competitive environment, if you give a potential client a reason to opt out of working with you, they will probably opt out. They know that another comparable business will accommodate the full array of their needs.

But client service without conditions doesn’t mean client service without limits. Knowing what the client’s core need is and what they give you “credit for” will create an environment whereby you can get paid for core competencies backed by expertise, proven processes, and a strong delivery track record.