Is your business seaworthy?

The seas on a transformational journey will challenge all aspects of your business. Prior to embarking on a journey of this nature you will want to insure that your business is conditioned, i.e. fit, and prepared for the challenges that lie ahead.

Here are some questions you may want to ask yourself:

1:  Are the people (your passengers) you need on board and if so do they know their roles?
Can they handle a dynamic and evolving business model? If not then this journey may not be for them. It is critical to have people on board who understand their role in navigating an enormous changing sea ahead. They must take the initiative to embrace change and manage through it.

2: Are your passengers ready for the challenges that lie ahead and understand the risks(and rewards)? 
As new routes develop so do new decision makers . Do your passengers  understand the array of new client decision makers? Are they aware of the relationships outside of IT and non-traditional product sales that impact the business? Do they know buyers require us to have more insight into their businesses than ever before to feel comfortable buying?

3: Are your passengers functioning as a team and are they adaptive to change?  
As IT cycles compress and commoditization takes hold fading fast are lone ranger sales. The rise of consensus buying and the increasing complexity of alternatives require a team approach to selling. Do your passengers  understand and embrace balanced compensation plans and mutual accountability?


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All the Best,






Warren R. Turner, Cardinal Points

To the Point... How Do We Best Leverage Our Current Business Model?

This 3rd and final of my big question series shares something important with the other two (question 1, question 2 here): the answers to each question require you to step away from your day to day, hour to hour business issues and contemplate what is critical, but not urgent regarding your business. I encourage you to do this often because it can mean the difference between long term sustainability or incremental obsolescence.

3 great ways to leverage your current business model:

1: Make culture your most valuable asset.
Leaders of businesses I know that have thrived for decades tell me their culture is by far the most valuable asset they own. They see their culture as an “operating system” that makes the right decisions and behaviors obvious. A strong culture also attracts the right people and has high value for clients. Look at businesses that seem to perpetually thrive. What is it that endures beyond the turnover of products, services or even people?

2: Think “scalpel” vs “machete” when evolving your business.
Seeing the necessity to evolve is critical, but do it in a way that won’t kill your existing business. Remember you do not have to chop off a viable piece of your business to grow another. Understand what brought you to the dance (ie your core competencies) and take small steps at the right pace. Quantum leaps have claimed many victims. Make your changes “additive” vs turning away from your legacy business.

3: Have a clear vision then Communicate, Communicate, Communicate!
Communicate in your actions, priorities, and words. A great vision is simple and human. Say something real, as if you are saying something important to a trusted friend. If your vision is simple and real, people will feel something real about your company. They won’t have to memorize what you are about or why they are motivated to be on board.

You can't be looking down all the time and expect to evolve and adapt your business to the changing market. Make a regular date with yourself or your team to look out beyond the urgent day-to-day stuff and really think about what you see. Design these dates to be true disconnects from the daily distractions. This often means getting out of the office, making it fun, and making it a totally different experience than another day at the office. I promise this time will never be wasted.


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All the Best,





Warren R. Turner, Cardinal Points

To the Point...How a Conversation Strategy Prevents Blindness

Nowadays it is difficult to decipher a clear path through the haze of constant market changes and increasing urgencies each day brings. This difficulty comes with many hidden dangers. When your attention is divided then your direction divides with it, resulting in something similar to flying blind. The best insurance plan against flying blind is having the right conversations with the right people as a normal practice of running your business. How do you know you are doing this? If you don't have a specific strategy for this there is a good chance you are not doing it. There is a big difference between our normal day-to-day conversations with clients and the ones that prevent blindness.

Three ingredients to avoid flying blind:

1: The right audience
Elevate your game, go as high in the client organization as possible. Height will bring clarity to the picture; it allows you to see the forest for the trees. Remember, Eagles fly with Eagles.

2: A specific strategy and plan for having these conversations
Discussions must focus on real business issues rather than the nuances of your solution… Do not lose site of your goal, you are there to gather information and gain insight. So take time to understand your client or prospects’ business and ask open ended, meaningful questions. For example I was reading an article “fill in the blank” and it said “whatever”, How does this impact your business? Then shut up and listen. To help you plan here's a Conversation Strategy Cheat Sheet.

3: Time investment on your calendar
Show respect for your prospects willingness to meet with you by thoroughly planning the call, preparing an agenda and allocating sufficient time. By all means be punctual, if you are meeting somewhere other than their office say a restaurant plan ahead by making a reservation, allow time for traffic.

The most important part of this formula is to have a formula and to treat this process no differently than you would any other process vital to your business. Most blindness I see happens incrementally, as a result of repeatedly missing ques about how your clients are changing and where they are going. The good news is a few simple steps like those I have outlined above will assure your vision will remain clear and your decisions well informed by a few well planned conversations.


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All the Best,

Warren

Cheat Sheet “Conversation Strategy”  

Purpose: The Conversation Strategy Cheat Sheet was designed to assist the user in their planning and preparation for a meaningful and useful conversation with a client or prospect. No more winging it, conversations with a purpose.

     1. Did I outline the purpose and goal of the call?

     2. What do I need to find out during the call?

     3. Research the account prior to the call?

     4. Learn something about the person and their business before the meeting?

     5. Send an outline of the agenda to the client before the meeting?

     6. What information of value (to them) am I prepared to share with them?

     7. What's the next step after the call?


 For more information either email me at wturner@cardinalpoints.com  or call me at 770-913-0048

To the Point... One Question Every I.T. Reseller or Service Provider Must Answer Immediately

Market changes are well underway that will dramatically change how your clients think and what they want. Transformation is in the air, cloud computing has created an explosion of new alternatives for virtually every I.T. function and I believe it won't be long (to be measured in months not years) before this explosion will have an equal effect on your client’s expectations and your business. Of the thousands of I.T. Resellers and Service Provider executives and their salespersons I’ve met, 99% of their time seems to be consumed with the crisis de jour while literally less than one percent is invested in seeking real answers to the following question:

How will my business be relevant to my clients in the future?

In order to answer this mission critical question, you must answer these two questions:

First, do I understand how the shifting market effects my client's expectations?

>When is the last time I asked?
>Who am I relying on for these answers?
>Am I meeting with the right people?
>What is my exposure to these changes?

Second, how can I best leverage my current business model to meet the new expectations?

>How honest and realistic am I that my offering today will sustain value tomorrow?
>What new skills and offerings do I need to acquire to capitalize on the changes?
>What do I need to invest to assure I/we will capitalize on the new changes?

Consider these “evergreen” questions you ask yourself every three months. Acting upon this type of self-inquiry as a regular practice can help you steer confidently through market changes and avoid the dangerous myopia that occurs when day-to-day urgencies dominate your focus.

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Putting more than One Lens on your VAR Business Model? Consider a new word for our 2010 vocabulary.

Today most VAR owners are saying with a sigh of relief that they have survived 2009, are glad that it is behind them and are looking forward to brighter days ahead. While our economy is not out of the woods yet, many believe 2010 will be more promising than 2009.

However, we unfortunately all too often examine the impact the economy is having on our businesses through a single lens, that of our customers. Are my customers willing to resume purchasing my goods and services? Do my customers consider me their trusted advisor or am I just a transactional supplier or provider? While it is reasonable to look at our model through a “Customer” lens, it should not be the only lens we use to examine our business model.

The missing lens to which I refer is that of our vendor. It is prudent to ask ourselves what about our Vendor? Where are they headed in their channel strategy? Are we developing net new business? What about providing true value in their supply chain? Or are we simply acting in a fulfillment capacity?

A leading software company announced earlier this year that it was going to establish a direct relationship with its top accounts, thereby sending fear throughout their channel partners. The word for this type of action is Disintermediation. Disintermediation is the removal of intermediaries in a supply chain "cutting out the middleman". Rather than going through traditional distribution channels, which had some type of intermediary (eg: distributor, wholesaler, reseller, broker, agent, etc.), companies may now deal with every customer directly.

Many industries have time and time again failed to heed the warning signs of possible disintermediation (Automobile Dealerships, Travel Agencies etc…). Owners of these businesses did not adapt themselves to changes in their environment. Many have compared this to the aphorism of boiling a frog. The strategy is to start the cooking process by placing the frogs (us) in cold water and slowly turning up the heat up. The complacent frogs enjoy the warmer water at first. By the time the frogs realize what has happened, it is too late.

Only time will tell what the impact from these actions will have in the marketplace, but Business Owners need to exercise a healthy dose of skepticism when drinking the vendor’s kool-aid. Remember “It’s not what people say but what they do when no one is looking that counts”.

About the Author: Warren R. Turner is the Managing Partner of Cardinal Points Group. He coauthored and teaches “ Managing a Profitable Services Practice”. The course has been delivered to over 4,000 VAR and SP business owners in 25 different countries. He may be reached via email at wturner@cardinalpointsgroup.com or by telephone 770-913-0048.

Threat Level RED

Threat Level RED

Risk Advisory

If the economic uncertainty were not enough, VAR business owners should be advised of the competitive threat and disruptive impact on sales caused by new entrants in the marketplace. Your sales force should be your first line of defense in positioning your business against this threat. In order to justify your prices and preserve margin, your sales force must understand their competition and possess the ability to clearly articulate your firm’s value proposition.

Background

The well known phrase “Necessity is the Mother of all invention” partially describes one of the more significant dilemmas which confronts VARs today. While business leaders are focused primarily on reducing their IT costs, many are also investigating the practicality of Business Process Outsourcing (BPO) and Managed Service Providers as means to achieve such reductions.

Our financial management workshop outlines the five distinct stages of growth in a typical IT services business as set forth in the following illustration

The typical entrepreneurial VAR Business Owner has worked for only one or two other employers before establishing their business. In most instances they simply lack a successful services career experience and “Do not know what they do not know”. Most VARs start their services practice as a “Cost Recovery” model and progress through a natural evolutionary period of learning (aka “School of Hard Knocks”) and are just now enlightened enough to “Know what they Do not Know”. See Knowledge Quadrants diagram below. Approximately 75% to 85 % of VARs operate in a Cost Recovery or Emerging stage and have yet to master the sales skills necessary to consistently sell highly profitable IT service engagements.

Knowledge Quadrants

Welcome the New Kid on the Block

Few companies have been immune to the market’s unprecedented volatility, uncertainty and economic fallout. As the credit markets have dried up with little relief in sight, companies have been forced to preserve cash and what’s left in open lines of credit. The resultant effect of this phenomenon has been a significant rise in unemployment over the past twelve months, with more joining the ranks of the unemployed with each passing day. Faced with a soft job market many are choosing to hang up a shingle, calling themselves consultants, rather than seeking new employment. During downturns it is common to hear things such as “Hey, after all, how much could it cost”, and “I’ll be damned if I’ll be in this position again”.

The corollary of the phrase “Necessity is the mother of all invention” is that job security in today’s market resembles a necessity more than a want. In the past four weeks, I have spoken with three individuals who have emphatically echoed a variation of the above comment. The “New Kids” on the block do not know that starting a business is tough and have yet to realize when starting out “All Opportunities appear to be Real Opportunities”. As I counsel with these newly minted consultants it becomes apparent that they simply “do not know what they do not know”, and as a result tend to price their services without a sense of realistic and practical methodology.

Conclusion

As long as the economic cloud of uncertainty prevails there can be no eminent forecast for this risk to subside. Vigilant watch over your marketplace competition coupled with reinforcement of your sales force understanding of your firm’s value is recommended.

About the Author: Warren R. Turner is the Managing Partner of Cardinal Points Group. He coauthored and teaches “Dancing with the Elephant, Managing a Profitable Services Practice”. The course has been delivered to over 4,000 VAR and SP business owners in 25 different countries. He may be reached via email at wturner@cardinalpointsgroup.com or by telephone at 770-913-0048