The Salesby5 Blog

Mastering the Rockefeller Habits

Bite size chunk #3
Systems and Structures:

A company or an organization will often become stuck or experience a lot of miscommunication and balls getting dropped when there isn’t clear accountability established.

As an organization grows, complexity increases. Take a simple two-point relationship where the two points represent the number of employees, number of product lines, or number of offices within an organization. Notice what happens when you grow 50%, represented by adding another point. The interrelationships dramatically increase from two to six or by a factor of 300%. The complexity increases even more dramatically as you add another point, representing just an additional 25% growth, jumping from six to 24 calculated by multiplying 4 times 3 times 2 times 1. This 25% growth actually increased complexity by 400%. Therefore, simply doubling from 2 points to 4 points increases complexity by a whopping 1200%.

Increases in complexity lead to stress, miscommunications, increases in costly errors, poor customers service and greater overall costs. There is a need for appropriate systems and structures.

The answer is an accountability chart. If you can conceive a position, put someone’s name in it. Even if his or her only accountability is to make sure the position is filled. To make your accountability chart:

 1. List the Roles or key positions in your company and list who is accountable for each position.

 2. List key measures for each position (how do you measure performance?).

3. Take your profit/Loss and balance/Sheet and assign line items to the person.  

Your goal: Identify more than 1 person per key position or no person per key position.

 If you need help in implementation, being the only certified coach in central/south Texas, I am at your service!

 These are bite size chunks from the book Mastering the Rockefeller Habits, click the link to purchase the book.

For about six years I have been the only Certified coach in South Texas for Mastering the Rockefeller Habits, an incredibly solid and arguably the best platform for new, old, slow growth or fast growth companies and organizations. This post starts some bite sized chunks that helped The Scooter Store grow to become a nationwide company 8 years sooner than their goal. It helped Rackspace become a fixture in hosting/technology.

The book is not one that you let others borrow, instead, buy them a copy. The book is not meant to be completely understood at first read.  You’ll not be able to put all the initiatives to work at once.  The reason for the bite size chunks is that these are habits to form for you and your team.

Three barriers to growth common among all growing firms: The need for the executive team to grow as leaders in their abilities to delegate and predict; the need for systems and structures to handle the complexity that comes with growth; and the need to navigate the increasingly tricky market dynamics that mark arrival in a larger marketplace.

Bite Size CHUNK #1:

Delegation: Most entrepreneurs actually don’t like working with anyone, including their own employees! This is the major reason why 97% of all firms have less than 10 employees and a vast majority of those have less than three. Therefore, the decision to grow isn’t an easy one. If you can’t afford the people to run the business for you, then all you have is a job. Understanding that many business owners feel they can do everything is true, but what should they be doing? What focus should they have to be able to grow profits, sales, and innovation?

Understanding what your strengths are, not just the activities you are good at but the activities you are the strongest at AND fulfill you, and using them as much as possible each day. The same goes for any employee. Don’t be afraid to try someone that is great at building relationships to be a sales person or a marketer, but measuring how that delegation worked with a simple test is how you know if it is the right delegation or the wrong.

Bite Size Chunk #2:

If you like what you read, imagine a one page strategic plan, yes, one page that provides crystal clear direction for leaders, managers and employees to follow, be guided by and use.  Not only is this a behavior meter but a road map on where your firm is going. We’ve used one for 7 years. The top growth firms even in tough times use this and we feel it is the kept secret in business. For more info on this visit: http://www.salesby5.com/services/strategic/

To purchase or review the book: Mastering the Rockefeller Habits

Business schools teach students to obsess over return on investment and executives want to know exact ROI and precise campaign by campaign spreadsheets. This trend is causing marketers to become too cautious and boring. While the information and tracking is useful it often means that marketers will not GO BIG with innovation, experimenting, being unique. David Meerman Scott says When CEOs and executives push back with an ROI excuse, I ask, “What’s the return on investment on the army of landscapers who are constantly at work on the plantings around your corporate headquarters?”  Consider Dell’s approach that says don’t be afraid to try something, just measure the results.

photo by phoenixdailyphoto

Recently, we met best selling author David Meerman Scott at the Fortune Small Business Sales and Marketing Summit.  We had a interesting discussion on social media and marketing. During most of his speaking to large audiences he asks the following questions. When you read this, please take note of your answers!

In the past 2 months, either privately or professionally, in order to find an answer to a problem or buy a product, have you:

1.  Responded to a direct-mail advertisement?

2.  Used magazines, newspapers, TV, or radio?

3.  Used Google or another search engine?

4.  Emailed a friend, colleague, or family member (or used instant messaging, chat rooms, or equivalent) and received a response of a URL, which you then clicked to visit the website?

Over the course of a year, in front of more than 20,000 people ranging from college students, marketing professionals and Fortune 500 companies, the answers are surprisingly consistent.  Between 5 and 20% of people answer “yes” to the first two questions, which means that direct mail, advertising or mainstream media are effective in reaching a small portion of customers.  However, between 80 and 100% raise their hands for the last two questions.  This means the web is critical for any business.

Today on the way to work, I looked at every billboard on the way and found one that had an ability to track performance, the rest were all clutter and a complete waste of time, effort, and money.  If you’re using traditional forms of advertising, are you comfortable with the response you’re receiving?  Are your tracking efforts working?  Share with us on what has and hasn’t worked for you along the way!

For more details from David’s book, check out World Wide Rave.  We highly recommend it.

In the movie City Slickers, a group of friends take a “vacation” at a dude ranch. Curley, played by Jack Palance, is a rough, wise old cowboy who shares the following with Mitch, played by Billy Crystal:

Curley: Do you know what the secret of life is?
Mitch: No, what?
Curley: This. (Holds up his index finger.)
Mitch: Your finger?
Curley: One thing. Just one thing. You stick to that and everything else don’t mean [anything].
Mitch: That’s great, but what’s the one thing?
Curley: That’s what you’ve got to figure out!

Lee J. Colan gives some insight to this classic scene, “Leaders have to figure out the One Thing that defines a meaningful purpose for their teams. The One Thing should answer the question Why are we here? You may think that finding that focus isn’t critical; but in fact, it’s essential to your success. The most important thing in business (and life) is deciding what is most important.”

Get your team together and figure out what your One Thing is. Then, that should guide all of your decisions and your actions. Focus your energy on your One Thing. It won’t happen overnight, but like using your Strengths, a steady effort towards this will pay off in the end!

Pricing expert Mark Burton tells us that pricing is one of the least utilized but most potent tools we have. There is only one purpose for price – to increase profitability. Go through these 3 questions: What is your purpose for price? How consistent is your leadership team in supporting that purpose? If there are inconsistencies, what are the leading causes? You need to understand the value you offer your customer. Then, identify how to create financial value for customers so we can know when to charge more and what to take away when we charge less. Better prices, less discounting and more effective offering significantly increase both profits and revenue. Replace the discounting habit with a little confidence! In the absence of other indicators of quality, consumers look at price. What does your price say about your product or service?

We’re in Day 2 of Fortune Small Business’ Sales and Marketing Summit in New Orleans. We heard from Victor Cheng this morning, who gave great clarity to recession proof business. Companies like FedEx, UPS, Price Mart and Coors were all founded during a recession. They succeeded (to say the least) because they solved a problem for consumers at that time. The key to building a recession proof business is to find a solution to a problem that gets worse during a recession, and to do it in a unique way. This can work nicely alongside what we learned from David Meerman Scott yesterday about social media and viral marketing. Once you have your unique solution to a problem, you will have a great story to tell, so you won’t have to spend thousands of dollars on advertising campaigns. Take a look at your company; is there a better way for you to solve a problem or a struggle for consumers today? Your most profitable area may have changed. Don’t be afraid to reinvent your business in order to offer something of real value to your customers.

(If you’re on Twitter, check out @salesby5 for conference details and live tweeting from the event!)

Are you ready to see how your company lines up against the competition? A leading strategic advisory firm, Sales Benchmark Index (SBI) is known for its use of empirical data, a repository of over 11,000 companies, 12 years of history, 19 industries and over 250 sales metrics.

In Making the Number, Greg Alexander, CEO of SBI, shows that the result of a benchmarking project is accelerated revenue growth and reduced selling expenses.  They have created a formula based on empirical data that allows companies to see how well they are performing, relative to a peer group and world class standards.  Greg will present SBI’s formula at the Gazelles Sales and Marketing Conference.  Check out SBI’s free Sales Benchmark calculator and see how you measure up!

The rules of marketing and PR have changed, according to David Meerman Scott, who has made it into the Marketing Sherpa Viral Hall of Fame twice, in 2006 and again in 2007. He shows us that the old ways of marketing and PR are outdated; you don’t obsess about being “on message,” break the bank with expensive advertising nor do you beg mainstream media to write about you. Instead, you tell your story directly to an interested market.

With all the tools we have to connect with one another—Facebook, Twitter, LinkedIn and Plaxo, to name a few—it is much easier to reach an interested audience. These money and time saving tips are more relevant than ever. To learn more about David Meerman Scott, join us at the Gazelle’s Sales and Marketing Conference!

Sales, marketing, and running a company today can all be summed up by one statement: This is the new normal.

Everything has changed. How quickly you can adjust will determine your success or failure. We are constantly running into companies that are doing the same things over and over and expecting a different outcome. It’s time to stop hoping that the economy is temporary and realize that we need to make adjustments.

Jim Collins: How great companies turn crisis into opportunity.