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2011 ---- Ten Success Reminders
| Guest post by: Dr. Rick Johnson |
Article Overview: The market forces have been very tough the past few years. However, 2011 is a brand new year and there are encouraging signs of growth in our economy. Creating acceptable levels of growth and profitability in 2011 is a goal that I am sure is shared by virtually 100 % of the individuals and companies that read this article. So, let's review some principles that can help us maintain our focus and create the kind of success in 2011 that you can be proud of:
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2011 ---- Ten Success Reminders
The market forces have been very tough the past few years. However, 2011 is a brand new year and there are encouraging signs of growth in our economy. Creating acceptable levels of growth and profitability in 2011 is a goal that I am sure is shared by virtually 100 % of the individuals and companies that read this article. So, let's review some principles that can help us maintain our focus and create the kind of success in 2011 that you can be proud of:
1. Go back to basics in managing your business
2. Understand your role in the market place
3. Develop or refine your strategic plans
4. Create branch and operational plans that are alignment with your strategies
5. Continue to develop and train employees (Don't scrimp here)
6. Upgrade your sales force and all support services
7. Manage your inventory
8. Understand and manage your cash to cash cycle
9. Insist upon sales territory plans that target accounts based on potential for growth
10. Create change based on changes in your markets and your industry
Basic Best Practices
Take the time to review best practices as they apply to your business. Look at your processes, your procedures and your policies. Do they reflect good management principles or do they become a little spongy due to past practices?
What is Your Role?
Has your role changed in the market place? Are your business segments still the best match for your core competencies? What has changed and more importantly, what changes do you need to initiate? Do an internal SWOT analysis (Strengths, Weaknesses, Opportunities & Threats) with your management team and initiate a brainstorming or scenario planning session to reflect upon your changing role as a distributor in 2011 and beyond.
Strategic Planning
If you don't have a strategic plan, make it a priority to create one in 2011. It is money well spent. If you do have one, go through an extensive review of all the initiatives. Do they still make sense? Has anything changed that will make a significant difference on your focus. Do you need to change your "End Game' or Vision for the Future?
Demand a Branch Level Discipline
If you have multiple branches insist upon a branch planning process that goes beyond turning in a budget. Make sure the plan is documented with timelines and accountability. Most importantly, make sure it is in alignment with strategic initiatives.
Employees Development is Essential to Profitability
Don't cut training and development dollars. Continue to focus on people development. This will maintain employee respect, trust and will create a culture that will maximize employee efforts and willingness to do whatever it takes to create success.
Upgrade - Upgrade
While employee development is critical to success, so is making sure that you have the right employees performing the right functions. The opposite of the "Easy Profit" market forces that cover-up employee incompetence is the "Tough Profit" market that will highlight employee incompetence. "Tough Profit" market forces eliminate places for under performing employees to hide. Don't let too much compassion for long tenure employees cloud your judgment. Make sure expectations are clear, employees are trained and have the proper resources but if they can not perform you must act swiftly.
Manage Your Inventory
Inventory for the vast majority of distributors is generally the largest asset on the balance sheet and the easiest one to lose control of. Sales people like to say you can't sell from an empty wagon but we all must realize that market forces will dictate what inventory levels are appropriate for individual success. We must have enough inventory to support our growth initiatives but you can not afford to have so much inventory on that wagon that you break the wheels. Focus on aged and dead inventory and individual high volume SKU turnover.
Manage Your Cash to Cash Cycle
Inventory is certainly part of the cash to cash cycle but managing your payables and your receivables is also extremely important to cash flow. Profits are not necessarily cash so paying attention to cash flow is a very basic principle of success.
Sales Effectiveness
It's really fun being a sales person in an "Easy Profit" market. It is not difficult to do well and sometimes we can be lulled into a sense of eternal success that doesn't require a 100% effort. It can lead to a comfort zone that is not healthy for long term success. Make sure your sales force practices a sales effectiveness discipline that requires documented action planning for specific targeted accounts that support individual territory plans. Of course, these plans must be in alignment with strategic initiatives as well.
Create Change
Creating, instigating and managing change takes passion and courage. It's not for the weak of heart. It is not for those who embrace simple traditional expectations. Effective leaders reach beyond these expectations. They become agents of change. Change is imperative in a "Tough Profit" market. Most companies will thrive on the concept of change, achievement, responsibility and accountability. Make it part of your culture in 2011 and you will not only be a survivor but you will perform in the upper quartile of your industry.
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Article Tags: growth and profitability, leadership, management
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About the Author: Dr. Rick Johnson RSS for Dr. Rick's articles - Visit Dr. Rick's website www.ceostrategist.com - Sign up to receive "The Howl" a free monthly newsletter that addresses real world industry issues. - Straight talk about today's issues. Rick Johnson, expert speaker, wholesale distribution's "Leadership Strategist", founder of CEO Strategist, LLC a firm that helps clients create and maintain competitive advantage. Need a speaker for your next event, E-mail rick@ceostrategist.com. Dr. Rick Johnson has over 35 years of experience in distribution sales and operations. Rick�s career can be broken down by decades. The first ten years of his distribution career were spent with the largest steel-processing distributor in the world (Joseph T. Ryerson). The second ten years began with Rick starting his own processing distribution center from scratch. In the first year, sales reached $1 million dollars and had grown to $25 million in its tenth year when Rick sold the business to one of the major national chains. The third ten years of Rick�s career dealing with financially troubled Turn-A-Round companies. After completing ten years of TAR work, Rick decided a decade of acting like Darth Vader was enough and became a consultant to the Wholesale Distribution Industry in 1999. Rick received an MBA from Keller Graduate School in Chicago and a Bachelor's degree from Capital University, Columbus Ohio. He also served six years in the United States Air Force as a survival instructor. Rick completed his dissertation on Strategic Leadership and received his Ph.D. in 2005. Rick is frequently published in numerous magazines including a column in Supply House Times, with over 250 different articles published to date. He�s also a published author with eight books to his credit. Click here to visit Dr. Rick's website   Do You REALLY Value Your Employees Creating Personal Success Maximize Performance through Understanding Gone Are the Days Revitalizing Sales Reps for the New Century The Employment Interview How Hard Can It Be |
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