Traction Page 6

  I’m always amused when a client looks at another industry and says, “I wish I were in that business. It’s so much simpler.” I’ll think to myself, “Oh, if he only knew.” In other words, I’ve yet to see a single business that is easy to run. They all take work. Success in one kind of industry doesn’t necessarily dictate success in another. You can only succeed in the kind of business that is right for you and your team. As Jim Collins puts it in his bestseller Good to Great, “You have to figure out what you’re genetically encoded to do.” That’s a vital point. The combination of your talents and passions combined with your leadership creates something unique that no other company has, and that something is your core focus. You must uncover what it is. The following exercise was designed to help you do just that.

  HOW TO DETERMINE YOUR CORE FOCUS

  First, you and your leadership team should define, with absolute clarity, your two truths: your reason for being and your niche.

  Core focus is actually very simple. Don’t overthink it. After reading this section of this book, lock your leadership team in a room for a minimum of two uninterrupted hours. Start by asking them to write the answers to the two questions below. Once everyone has finished, go around the table and have them share what they’ve written. Then, open up the discussion for debate and talk as a group for as long as you need to.

  Do this with both questions, one at a time, until you’re on the same page and have each answer down to just a few words. Be warned: You may need several sessions to complete the task. Be patient and remember not to overthink and overanalyze. Like core values, your core focus already exists; it’s just a matter of chiseling away the non-core items before you can get it. What follows are the two questions with some real-life examples and tools for guidance:

  1. Why does your organization exist?

  What is its purpose, cause, or passion?

  When your purpose, cause, or passion is clear, you won’t be able to tell what business you’re in. You should be able to take it into any industry. This will also keep you from confusing it with your niche.

  * * *

  When entering your core focus into the electronic version of the V/TO, please choose one of the three words “purpose,” “passion,” or “cause”—the one that resonates best with your team—and delete the others from the document. Less is more.

  * * *

  When your purpose, cause, or passion is clear, it should meet all eight points of the following checklist:

  1. It’s stated in three to seven words.

  2. It’s written in simple language.

  3. It’s big and bold.

  4. It has an “aha” effect.

  5. It comes from the heart.

  6. It involves everyone.

  7. It’s not about money.

  8. It’s bigger than a goal.

  Examples of purposes, causes, or passions

  Cunningham/Limp: Customer delight

  McKinley: To enrich the quality of life in our communities

  Image One: To build a great company, with great people & great results

  Schechter Wealth Strategies: To create lifelong relationships and raving fans

  2. What is your organization’s niche?

  Your niche should be simple. It will ultimately become a filtering mechanism for your team to make its decisions as you move forward. Orville Redenbacher’s theory says it all: “Do one thing and do it better than anyone.”

  Examples of niches

  Autumn Associates: Creating the right program with right coverage for the right clients

  Orville Redenbacher: Popcorn

  Atlas Oil Company: Moving gallons

  Image One: Simplifying companies’ printing environments

  McKinley: Solving complex real estate problems

  With your niche and your organization’s reason for being crystal clear, you now have a core focus. Once your core focus is clear, you’ll need to stay true to it. If a new business opportunity doesn’t fit, don’t do it. If someone on the leadership team tries to throw something incongruent over the wall, throw it back. Let it be your filtering mechanism for all future decisions.

  Below are some real-world examples of a company’s core focus:

  Asphalt Specialists, Inc. (ASI)

  Passion: Winning

  Niche: Quality asphalt paving

  ZenaComp

  Passion: Creating efficient solutions

  Niche: Worry-free technology that protects & grows our clients’ business

  Ronnisch Construction Group

  Purpose: Exceeding peoples’ expectations

  Niche: Meeting the schedule in all facets of construction

  Image One

  Passion: Building a great company, with great people and great results

  Niche: Simplifying companies’ printing environments

  Alongside two other partners, brothers Tyler and Jonathan B. Smith founded a small technology business designing high-end websites with back-end web applications. Once they realized their current business no longer fit their personal core focus, they left the business to their partners and each went on to build successful businesses in line with their core focus.

  Jonathan went on to cofound Wave Dispersion Technologies, Inc., a company that provides coastline security for countries all over the world. His company made Inc. magazine’s list of the 500 fastest-growing private companies.

  With his new partner, Brad, Tyler built the web retail company Niche Retail, taking it from start-up to almost $19 million in revenue, in nine years. Tyler and Brad were finalists for the Ernst & Young Entrepreneur of the Year award, and Niche Retail was named #300 on Inc. magazine’s list of the 500 fastest-growing private companies. Illuminate your core focus, and you could generate those kinds of results as well.

  One important point: The task of clarifying your core focus assumes that you already have a financial model that works. If that’s the case, it’s just a matter of focusing on and executing your vision so that the profit will follow.

  If you’re a golfer, you know that the face of a golf club has a sweet spot. While its actual size varies depending on the club, let’s assume it’s about 50 percent of the face. To the degree you hit the ball on the sweet spot, the ball goes farther and straighter, contact feels better, and you’ll score better. The same applies to your business. Just like a golf club, your business has a sweet spot, and now that you have clarified your core focus, you now know what it is. Assuming you stay in your sweet spot, which might be about 50 percent of your market, your business will go further and score better in terms of profitability.

  Once your core focus is clear, your people, processes, and systems can be put in place to drive it with consistency. Until you have exhausted every opportunity in your core focus, don’t allow yourself to get distracted by the shiny stuff.

  Now that the work is done, add your core focus to the V/TO.

  WHAT IS YOUR 10-YEAR TARGET?

  Now that your core values and core focus are clear, the next question is this: What is your 10-year target? Where do you want your organization to be a decade from now?

  One common thread unites successful people and successful companies. All of them have a habit of setting and achieving goals. That’s why I am consistently amazed by the number of entrepreneurs who can’t tell me what their number one goal is. To me, they’re like rudderless ships. How do you know if you’re heading in the right direction if you don’t know which direction you’re meant to be going? As Yogi Berra said, “You’ve got to be careful if you don’t know where you are going, ’cause you might not get there.”

  In their book Built to Last, Jim Collins and Jerry I. Porras found that organizations that have endured for decades share another common practice: They all set massive 10- to 25-year goals. Collins and Porras refer to these as BHAGs—Big, Hairy, Audacious Goals—and define them as having “a long-term vision so daring in its scope as to seem impossible.”

  That’s one of the main differences be
tween a 10-year target and any shorter ones you might set. This is the one larger-than-life goal that everyone is working toward, the thing that gives everyone in the organization a long-range direction. Once your 10-year target is clear, you and your leadership team will start doing things differently in the here and now so as to get you there.

  In You2, Price Pritchett explains how to make such quantum leaps: “You must focus on ends, rather than means.” Your long-term target is that end he is describing. He continues, “It is crucial to have a crystal clear picture of what you want to accomplish … Rivet your attention on that spot where you are to land at the end of your quantum leap … Once you do that, it’s almost as if you magnetize yourself to the ways and means involved in the methodology for getting there. Solutions begin to appear. Answers come to you.”

  The reason this particular target’s time frame is 10 years is that 90 percent of EOS clients have selected it in the past. Some preferred a five-year time frame, while others went as high as 20 years. The length is entirely up to you.

  Examples of 10-year targets

  ZenaComp: $10 million in revenue with 15 percent net income

  Autumn Associates: A referral from every client and every client from a referral

  McKinley: 20,000 multifamily units owned and/or managed

  Atlas Oil Company: 5 billion gallons moved

  Schechter Wealth Strategies: 15 percent of target market

  HOW TO SET A 10-YEAR TARGET

  Meet with your leadership team and discuss where you want to take your organization. A word of caution is in order here: While your core values and core focus are already present within your organization, the 10-year target will be different. I’ve never seen a team land on the same page with a 10-year target on the first go-around. Be patient in your first attempt.

  I recommend starting off by asking everyone how far out they would like to look. I would then ask everyone what they believe the revenue size of the organization could be at that point. This is a particularly fun question, and you’ll probably get a wide range of responses. These different figures should start to get everyone talking and ultimately in sync with each other. Once those two questions have primed the pump, ask everyone what they believe the target is. It may take a few meetings to settle on a final answer. I’ve had to come back to certain EOS clients with the same question every quarter until they nailed it.

  Once that decision is made, confirm that everyone is motivated by it and on the same page. As with all goal-setting activities, your 10-year target must be specific and measurable so that there can’t be any gray areas. You will know the right goal when you have it. It will be the one that creates passion, excitement, and energy for every single person in the organization whenever it’s repeated.

  * * *

  With many clients now closing in on or achieving their 10-year targets, the question regarding what to do when you’re getting close to hitting it comes up often. The answer and rule of thumb is that once you’re three years from achieving your 10-year target, you move it to your three-year picture (which will be covered on page 66) and set a brand-new one.

  * * *

  Add your 10-year target to the third section of the V/TO.

  WHAT IS YOUR MARKETING STRATEGY?

  A mother, her young son, and their donkey are taking a long journey through the countryside. The mother is riding the donkey with the son walking alongside as they enter a village. All of a sudden, the village people gather and start stoning them. The pair run away and manage to escape. The mother is dumbfounded, and as they approach the next village, she thinks, “Maybe they thought it was inappropriate to have the son walk,” so they switch places and prepare to enter. But once again, they’re stoned by the village people. At a total loss, she thinks, “Maybe it’s the donkey. Maybe they worship donkeys in this country.” So before entering the next village, they decide to pick up the donkey and carry it, but it proves so heavy that as they cross a bridge, the donkey falls over the side, lands in the river, and drowns.

  What’s the moral of the story? If you try to please everyone, you’re going to lose your ass.

  I can’t tell you how many of my clients start out trying to be all things to all people. They say, “Oh, you need that? Yes, we do that,” and, “You want those? No problem.” Over time, though, they, their customers, and their employees become frustrated, and the business becomes less profitable. This helter-skelter method may have gotten you to where you are today and helped you survive the early drought, but to break through the ceiling, you have to create some focus.

  The intent of this section is to create a laser-sharp focus for your sales and marketing efforts. Many companies waste thousands of dollars on consultancy fees, inconsistent marketing messages, printing, and time, all because they failed to establish a clear strategy from the outset. A focused effort will enable you to sell and close more of the right business. It will become the foundation upon which you create all future materials, plans, messages, and advertising.

  This enables you to be different and stand out to your ideal customer. All of your people will have clear direction on who your ideal customer is, what you’re supposed to be doing for them, and how you will do it. Ultimately, you will know which customers you should and should not be doing business with. That means you can stop trying to be all things to all people.

  In his book Get Back in the Box: Innovation from the Inside Out, Douglas Rushkoff makes the point that companies have to stop looking everywhere else for the answers. Rather than hiring marketers and consultants, he urges companies to draw on their own experience, core values, and core competencies (core focus). He urges readers to “stop solving your problems from the outside in.” He goes on to say, “Get back in the box and do the thing you actually do best. This disciplined commitment to your own core passion—and not a consultant, ad campaign, or business plan—is the source of true innovation.”

  Marketing strategy is made up of four elements, which are contained in the fourth section of the V/TO:

  1. Your Target Market/“The List”

  2. Your Three Uniques

  3. Your Proven Process

  4. Your Guarantee

  YOUR TARGET MARKET

  The first element of marketing strategy is your target market, or “The List.”

  Identifying your target market involves defining your ideal customers. Who are they? Where are they? What are they? You need to know their demographic, geographic, and psychographic characteristics. By identifying your target market, you create a filter. Out of that comes The List of perfect prospects for your organization and sales team to target.

  If you’re a normal small business, you’ve probably gotten to where you are with a less-than-perfect approach to finding customers. When you were getting the business off the ground, any customer that paid was considered a good one. As a result, you probably have some customers that are not in your target market. Maybe they’re not profitable or they make ridiculous demands. Maybe you don’t even like them.

  A problem for most companies is that they take a buckshot approach to sales and marketing. By defining your target market and creating The List, you’re abandoning the shotgun approach for the rifle approach. As a result, your sales and marketing efforts will be much more efficient.

  A crucial step to getting sales back on track during the turnaround of our real estate sales training company involved determining who our ideal target market was. Eventually, we realized that it was the presidents and CEOs of real estate organizations with 200 or more agents (demographic) in North America (geographic) that saw the value and need for outside sales training (psychographic).

  With this clarity, we ran the filter (which meant that we researched every industry publication, database, and resource) to find out who and how many there were. We came up with a total of 525. At our next quarterly meeting with all of our trainers, we did a skit with a biblical theme that included music and dress. We created a large binder with The List on the c
over. It contained contact information and relevant details on 525 presidents and CEOs.

  We distributed those names to our 30 trainers, who were our sales force, and they went to work. By focusing on The List, we were able to turn sales around. Ultimately, we were able to penetrate and maintain over 50 percent of The List as our clients. This was not an anomaly. Every client that defines its target market creates this laser focus as a result.

  Examples

  Image One: IT directors in companies with 25 or more laser printers in Michigan and Ohio

  McKinley: Opportunistic, value-added, or underperforming apartments, shopping centers, and office buildings in Michigan, Indiana, Ohio, Illinois, Virginia, Georgia, and Florida

  Identity Marketing and Public Relations: Small to mid-sized privately held business-to-business companies in the U.S. that meet our profile

  Defining your target market is rewarding. The difference in my clients’ attitude and awareness after doing so is like night and day. Where they used to try to lasso every customer in sight, they now know in the first 15 minutes of talking to a prospect whether they are right or not. As a result, they are bringing on better clients with less hassles and more profit. They no longer waste valuable time with prospects that are not right for them. In addition, they’ve dropped existing customers that are not in their target market and creating stress via unreasonable demands and low profitability.