If you believe your company can and should grow, what are you doing about it? Should your profits increase too? Where’s the action plan for that? If you do nothing, something will still happen. If you do something, maybe you can better ensure the results you want.
As we enter 2015 the economy in the US is booming. You may disagree and that is fine, but the point of my statement is that I have chosen what I believe. I happen to feel my opinions are based on quantifiable data and qualifiable observation, but then you probably feel that your conclusions are equally vetted. At any rate, I want my share of this growth. No wait, I want more than my share.
I want Intentional Success, not the kind that just happens .
In late 2012 I realized that like many of my clients, I had come to rely on accidental business. The phone rang, I answered. I filled my calendar and took far too many small jobs that involved travel. I had a record year, but I was working harder and harder for less money. I needed to change how I did business. I engaged my marketing company to talk with my clients so I could better understand my value proposition. What I learned was that I was focused on the wrong things. Clients wanted more of a continuous engagement instead of short-term projects. Pay-as-you-go projects built up a great list of past clients, but I needed ongoing business. As a result I became more thoughtful about my growth strategy, retooled my products, increased my marketing spend, and raised my fees.
Then I watched my pipeline shrivel up.
We’ve all retooled at one time or another. Sticking to it is the hard part. I funded marketing from my line of credit, turned down engagements that didn’t fit my new business plan, and kept refining my story till I got it right. It took a few months then things started to click. In 2014 I have grown 34% and I am 13% ahead of that busy 2012 with a lot less pain. In fact, I expect to grow another 35% in 2015. Why? Because I will continue to follow the plan in spite of missteps, in spite of TV news, in spite of what my competition does. My business may be different from yours, but my challenges are pretty much the same: My boss can be an idiot sometimes, but that doesn’t mean I can’t overcome my own shortcomings with insight, analysis, and planning.
Intentional Results aren’t simply borne out of perseverance, though being stubborn does help. Getting what you want comes from planning. For companies this means having a business plan with goals, vision, budgets, and timelines. It means setting aside the sacred cows while you consider new ideas and opportunities. But most of all Intentional Results come from not compromising the goal. Work the plan. Refine. Work it some more.
Growth is always achievable if you are willing to do whatever it takes, but most of us hesitate is when it comes time to spend money. You need to hire a new salesperson, re-do the website, or exhibit at a trade show in order to grow. So you try to justify the expense by connecting it directly to revenue. I call this straight line thinking. “If I spend this, I will achieve this revenue.” Unfortunately, strategic spending rarely has a straight line return. In fact, results are pretty squiggly. The salesperson you hired yesterday connects with a major prospect that buys nothing for three years. The new website impresses everyone, but you cannot point to a single piece of business that you won because of it. You only get three good leads at the trade show, but five hundred people swiped their badge. Things you do today may make a huge impact a few years down the road.
The cumulative effect of ongoing commitment drives long-term results.
Intentional Profit is another common theme in my consulting practice. If we can develop a plan to grow revenue through intentional effort, then why not plan for profit? I work with a lot of companies on their budgets, but one in particular stands out as I think about intentional profit. This owner had recently hired a General Manager to take on the day to day duties of his company. Wisely, we had developed a fiscal budget for the new GM to work towards. Like most budgets, things did not line up well starting the first month. Revenue was below expectations and therefore profit suffered. After two quarters of not meeting expectations, we had a serious problem on our hands. I was called back in to help, and I only had one question, “Did you adjust the budget?”
The GM was happy to quickly reduce the revenue target, cut the strategic growth spending, and reduce profit expectations, but I wasn’t. I looked at the owner and recommended that he not change his profit goals by one penny. Let’s base the budget on the profit you want to make and adjust everything else. Then I looked at the GM, “Given that we have to produce this much profit, how are we going to do that?”
The result was that we made up a lot of lost ground, but it took a lot of commitment to do it. Marketing and news salesperson budget stayed in. Prices were raised and minimum margins were enforced. Some business was lost, but the jobs that they won made up for more than the difference. Important operational changes were made too – because they HAD to be made to reduce costs. The profit target was not going to be compromised. The entire company needed to contribute to the goal. There was money for the things they needed, but not necessarily for all the “wants.”
Looking back at the end of the year, I asked the GM what he had learned from the experience. He said, “A budget without a plan is a wish. We should have planned on being profitable no matter what and then we would have made adjustments the very first month instead of six months into the year.”
You get the results you plan for.
Tom Stimson, MBA, CTS, is president of Stimson Group LLC, a Dallas-based management consulting firm specializing in strategy, process improvement, and market research for the Audiovisual Industry. Tom is a Past-President of InfoComm International and a current member of InfoComm’s Adjunct Faculty.