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Tag: Execution

How To Make Better Decisions, More Often

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Make Better Decisions, More Often

In a survey of top executives, the results showed that executives made “sound decisions” only 52% of the time.

That’s only 2% better than flipping a coin. So if you could improve just a few percent, you could be in an elite class of decision-makers.

Why only 2% better than flipping a coin? There are three reasons:

1. Their extensive industry knowledge and expertise.

2. Their reliance on analysis and critical thinking

3. Their limited perspective.

Industry knowledge and expertise

By the time you become the decision-maker, you have accumulated extensive knowledge and experience in your industry, market, products, and services.

You have talked to many customers.

You know how what works and what doesn’t work.

You have established patterns and processes and probably have established a culture of how we do it here.

Don’t limit yourself  to your expertise and your built-in biases

While all of this is necessary, it has also established automatic patterns of thought, which you can refer to quickly.

And at the same time, it limits your ability to think outside of your industry and market to understand how other markets and industries think about the problem or opportunity.

So they decide based on past thinking rather than exploring new ways to think about the problem or opportunity.

Hearing about how different markets do something can often give you additional ideas on how

you might also use this idea or process to solve a problem or improve their strategy, product, or service.  

Overreliance on analysis and critical thinking

Most people were taught that if you gather enough information and analyze the data thoroughly,

you will develop “the way” to solve the problem or create a better way forward.

Ufortuanlly, this does not often work because the data you are analyzing is all about the past, not the future.

So, if you need to move forward into the future, all those old solutions and ideas will not work.   

The Critical Thinking Process

Critical thinking is a good process and should be used, but the object of critical thinking is to judge whether the information you have is correct or not.

It is undoubtedly important to understand the problem or opportunity,

but it will not help you look into the future to solve this new problem or exploit this unique opportunity.

Another view

Here’s an article from Forbes if you want another view.  

Here is the caution when dealing with averages and human behavior data.

As you know, there are many variations in personal values within that average.

So, if you are thinking about behavior, be sure to take into account all the possibilities that data includes.

Market segmentation and psychographies will help get your thinking started.

Here is a traditional view of critical thinking from the Critical Thinking Organization.

Limited perception

The first and maybe most important thing you need is to see the problem or opportunity. In other words, your perception.

It is your perception that will help you design a solution. One of the best ways to explain this is with an example.

Here’s an example from Edward de Bono.

A group of 12-year-old boys was always picking on Bobby, one of the boys. Because that is what they do at that age.

One day, they showed Bobby two coins, a larger one worth one dollar and a smaller one worth two dollars, and they told Bobby he could pick one of the coins and keep it.

Bobby picked the larger coin, and of course, the other boys laughed and talked about how dumb Bobby was.

They made this offer every time they wanted a good laugh at Bobby’s expense. 

One day an older man saw what they were doing and told Bobby that the smaller coin was worth twice as much as, the larger coin.

Bobby said he knew that. But if he took the two-dollar coin, they wouldn’t keep coming back and giving him additional coins.

There is a distinction between a perception and a concept.

Perception is a grouping of things realized when we look out at the world—for example, a mountain.

A concept is a grouping of things discovered when we look inwardly at our experience.

A concept has a purpose or benefit—for example, a takeout restaurant.

Also, a concept always consists of both the concept and its implementation.

Conclusion

I want everyone to make better decisions more often, me included.

Expertise and analysis are essential, but you have to look forward rather than just backward.

You may also have to broaden your perception if you want to move forward.

So, your perception of the situation, which is often not considered, is critical to what kinds of decisions you will make. 

PS.  If this information helped you with your decision-making, let me know how it helped (or did not help) so we can help others.

 

Avoidable Mistakes Made Preparing Business Plans For Investors: Part Three 

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Financial Model Mistakes

Only cash is cash  

Suppose you sell something this month for $100, and it cost you $60 to make it. But you have to pay your suppliers within 30 days. But the buyer probably won’t pay you for at least 60 days.

In this case, your revenue for the month was $100, your profit for the month was $40, and your cash flow for the month is zero. Next month your cash flow will be -$600 when you pay your suppliers.

Although this example may seem trivial, very slight changes in the timing difference between cash receipt and disbursement of just a couple of weeks can bankrupt your business.

When you build your financial model, make sure that your assumptions are realistic.  

Lack of detail

Your finances should be constructed from the bottom up and then validated from the top down. The bottom of the model starts with details such as when you expect to make specific sales or hire more employees.

Top-down validation means that you examine your overall market potential and compare that to the bottom of revenue projections.

Round numbers like 1 million in R&D expenses in your two, and 2 million in your three, are you sure sign that you do not have a bottom-up more. 

Unrealistic financials

Only a small handful of companies achieve 100 million or more in sales only five years after founding. Projecting much more than that will not be credible and will get your business plan canned faster than almost anything else. On the other hand, a business with only 25 million in revenues after five years will be too small to interest serious investors. Financial forecast or a litmus test of your understanding of how venture capitalists think.

If you have a realistic basis for projecting 50 to 100,000,000 in five years, you probably a good candidate for venture financing; otherwise, you should probably look elsewhere.

Insufficient financial projections

Basic financial projections consist of three fundamental elements: income statements, balance sheets, and cash flow statements. All of these must conform to generally excepted accounting principles or GAAP.

Investors generally expect to see five years of projections. Of course, nobody can see five years into the future. Investors primarily want to see the thought process you employ to create long-term projections.

A good financial model will also include sensitivity analysis, showing how your projected results will change if your assumptions turn out to be incorrect. This allows both you and the investor to identify the assumptions that can have a material effect on your future performance to focus your energies and validate those assumptions.

It should also include benchmark comparisons to other companies in your industry, things like revenues per employee, gross margin per employee, gross margin as a percent of revenues, and various expense ratios (general and administrative, sales and marketing, research and development, and operations as a percent of total operating expenses.

Conservative assumptions

Nobody ever believes that assumptions are conservative, even if they truly are. Develop realistic assumptions that you can support, refrain from using words “conservative “or aggressive “in your plan, and leave it at that.

Offering a valuation

Mini business plans here, stating that their company is worth a certain amount. How do you know? The value of a company is determined by the market, by what others are willing to pay. Unless you are in the business of buying, selling, or investing in companies, you probably don’t have an accurate sense of what the market will bear.

If you name a price, one of two things will happen to tell you that your price is too high, and investors will toss your plan, or thar5 your price is too low, and investors will take advantage of you. Both are bad. The purpose of the business plan is to tell your story in the most compelling manner possible so that investors will want to go to the next step. You can always negotiate the price later.

Stylistic mistakes

Poor spelling and grammar

If you make silly mistakes in your business plan, what does that say about how you run your business? Use your spelling and grammar checkers, get other people to edit the plan, do whatever it takes to purge embarrassing errors.

Too repetitive

All too often, a plan covers the same points over and over. A well-written plan should cover key points only twice, once briefly and then the executive summary, and again in greater detail, in the plan’s body.

Appearance matters

At any point in time, an investor has dozens, if not hundreds of plants waiting to be read. Get to the top of the pile and making sure that the cover is attractive, the binding is professional, the pages are well laid out, and the fonts are large enough to be easily read.

Execution mistakes

Waiting until too late. The capital formation process takes a long time. In general, count on six months to a year from when you start writing the plan until the money is in the bank. Don’t put off your management team should be prepared to invest about 500 hours into the plan. If you are too busy building your product, company, or customers (which is probably a better use of your time. Consider outsourcing the development of the business plan.

Failing to seek outside review

Make sure that you have at least a few people review your plan before you send it out. Preferably people who understand your market, sales, and distribution strategies, the DC market, etc.

Your plan may look perfect to you and your team, but that’s because you’ve been staring in for months. Good objective reviews from outsiders with fresh perspectives can save you from myopia.

Over tweaking

You could spend countless hours tweaking your plan in the pursuit of perfection. A lot of this time would be better spent working on your product, company, and customers. At some point, you need to pull the trigger and get the plan out in front of a few investors. If the reaction is positive, and they want to move forward, great.

If the reaction is adverse, assuming that the investor was a good fit to begin with, and you may have been heading down the wrong path. Get feedback from a couple of investors, and if a consensus emerges, go back and refine your plan.

Conclusion

It’s a tough investment climate, but good ideas backed by good teams and good business plans are still getting funded.  Give yourself the best chance by avoiding these simple mistakes.

Avoidable Mistakes Made Preparing Business Plans For Investors (part one)

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 Your business plan is often the first impression you make on investors, and it could also be the last impression the inverter gets if you make the kinds of mistakes illustrated here. If you don’t get a referral, your business plan is how the investor will judge whether or not to invite you to the office for an in-person meeting.

With the hundreds of “opportunities” investors get every month, they are looking for ways to say no. Therefore, you mustn’t make a lot of mistakes. Every mistake will hurt your chances.

 .The following list of examples is from Cayenne Consulting.

 Content mistakes

 

Failing to identify a real pain

Identifying and solving real pain that customers are willing to pay to get solved is not necessarily easy. Check out these posts: https://https://harborcapitalgroupinc.com/wp-content/uploads/2024/07/Braintopview-1.jpg.com/the-critical-first-step-toward-new-product-success/ and https://https://harborcapitalgroupinc.com/wp-content/uploads/2024/07/Braintopview-1.jpg.com/part-two-how-to-get-product-validation-and-commitment/

 On the other hand, pain is synonymous with market opportunity. And the more widespread the problem is, the greater your potential market. Businesses and consumers pay good money to make pains go away. Your business plan is how you tell this opportunity story.

Overstating the impact your company will have  

Phrases like unparalleled in the industry or unique and limited opportunity or superb returns with a limited capital investment are only hype. Investors will determine your company’s impact based on their specific criteria.

You should simply lay out the facts: the problem, your solution, the market size, how you will sell the product, and how you have a competitive advantage and will keep it.  

Stretching the potential uses of your product  

To impress investors, entrepreneurs often try to show that their product can be applied to multiple, very different markets or explain they can have a complex suite of products to bring to the market.

They don’t realize that most investors prefer to see a focused strategy, especially for a very early-stage company. Investors want a single, superior product that solves a big problem in a  large market sold through a proven distribution strategy.

Additional products, applications, markets, and distribution channels don’t have to be left out;  they can be used to enhance and support a highly focused core-strategy. Tell your core-story and let everything else play a minor role.  

No, go to market strategy. 

Business plans that fail to explain the sales, marketing, and distribution strategy are doomed. Be sure to answer these questions: Who will buy it, why, and most importantly, how will you get it to them?

Also,  explain how you have already generated customer interest, obtained pre-orders, or better yet, need actual sales. And describe how you will leverage this experience through a cost-effective go to market strategy.

We have no competition.

No matter what you think, you have competitors. Maybe not a direct competitor who offers an identical solution but at least a substitute. First-class mail is a substitute for email.  

Competitors, simply stated, consist of everybody pursuing the same customer dollars.

To say that you have no competition is one of the fastest ways you can get your plan tossed. Investors will conclude that you do not have a full understanding of your market. The competition section of your business plan is also your opportunity to showcase your relative strength against direct competitors, indirect competitors, and substitutes. Besides, having competitors is a good thing; it shows investors that a real market exists.

Your business plan is too long.

Investors are very busy and did not have the time to read long business plans. They also favor entrepreneurs who demonstrate the ability to convey a complex idea’s critical elements with an economy of words. 

An excellent executive summary is no more than 1 to 3 pages. An ideal business plan is 20 to 30 pages, and most investors prefer the lower end of this range. Remember, the primary purpose of a fundraising business plan is to motivate the investor to pick up the phone and invite you to an in-person meeting. It’s not intended to describe every last detail.

Document the details elsewhere in your operating plan, R&D plan, marketing plan, white papers, etc. 

The end of part one. This information is a lot to contemplate. That’s why we divided this vital block of data into three parts. Be sure to read part two, which covers more things to avoid doing, and part three covering financial information.

 

 How To Break Free From A Competitive Market

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 How To Break Free From A Competitive Market

Many companies today face a very competitive market and are looking for a way to break out.

When every competitor focuses on short-term tactics (i.e., special sales, drawing for a prize, etc.),

the solution only lasts until one of the competitors comes up with a new tactic. Then, you have to dream up another short-term tactic.

This kind of competition is self-destructive. Each competitor is destroying their margins.

This kind of self-destructive competition is one of the problems W. Chen Kim and Ranee Mauborgo take on with their book, “Blue Ocean Strategy.”

Their strategy is to create new demand by eliminating costs for features customers don’t value

and using that money to add features and benefits they do value. This allows you to add value at no additional cost.

Stop Benchmarketing The Competition

Too many companies focus their strategic thinking on the competition, which puts the competition, not the customer, at the core of their strategy.

Stop benchmarking the competition and responding to their strategic moves because it means you look more like the competition.

Instead, put your strategic focus on the buyer and innovate new ways to deliver more value.

Note: just because a  competitor is doing something, doesn’t mean it’s of value to buyers.

For example, if your company is experiencing:

1. Margins shrinking

2. Competition is growing more intense

3. Competition driving commoditization

4. Rising costs

One way to reimagine your market is to take the features each competitor competes on for the X-axis,

and the value the customer puts on that feature on the Y-axis.

Then draw a horizontal line for each competitor, and you will see the differences between competitors.

You should be able to add value at no additional cost.

A quick example would be Cirque du Soleil.

They combined traditional circus acts with modern acrobatics and then put then the performance in a theatre,

which increased value, the price of the tickets, and significantly improved margins.

Focus On The Buyer

Put your strategic focus on the buyer and innovate new ways to deliver more value.

Note: just because a  competitor is doing something, doesn’t mean it is of value to buyers.

In summary, you have to re-think or re-frame how you approach the market.

Then compare and contrast your offering with what competitors are offering (your x- and y-axis analysis).

Then introduce the first product to a market with lots of pain -they will be more eager to buy.

Then, finally, you expand your product offering to the bigger market and build revenues.

Think about these questions:

1. Which features of your product or service could you eliminate because the buyer does not value them?

2. How much would this reduce your costs?

3. What products or services could you add with those savings that would have value to the customer?

4. Which market segment can you enter to establish your base?

Conclusion

If you are looking for ways to break free from competitors, examine what your competitors are doing.

Which elements (features, functions, benefits) of their offer due the customers find of value

and which elements contribute little value. Each of the elements has a cost.

If you eliminate the elements that have little value, you can use those funds to add to or create new benefits that customers want.

Again think of what Cirque du Soleil was able to do.

If you know someone struggling in an overly competitive market, tell them about this post.  Maybe it will help.

You might also be interested in our blog post, How Do You Know When It’s The Right Time To Scale?

You might also be interested in checking our website Harbor Capital Group,  The Proven Secrets Of Successful Startups.

Jim Zitek 

 

 

Do You Know When To Scale?

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The goal of every founder is that moment when you have product-market fit

and you are ready to scale the business, But understanding when that moment has arrived is difficult.

Many startups jump the gun and begin to scale too quickly and end up just burning cash.

Net; getting the timing right is critical. If you have discovered a pathway to repeatable revenues,

you are beginning to get organic revenues (proving product-market fit) and are convinced you are ready to scale.

In general, you are correct about product-market fit,

But these early sales are most likely from early adopters.

You still have one or two obstacles to get over. According to Steve Blank, if you are introducing

a new product in a new market, you don’t have a market. You have to create the market.

So, as you run out of early adopters, about 16 percent of the market, you will have to educate

buyers who are unfamiliar with you, your product, and its benefits. That will take some time and money to accomplish.

Therefore, after that early revenue peak, your new revenues are likely to begin slowing down rather

than speeding up until you have the mainstream market educated.

So timing is critical because marketing costs from scaling up are rising, and revenues are not.

A lot of companies have been caught in this trap.

If you are introducing a new product into an existing market, your goal is

to take sales away from your competitors. The market is there.

Therefore, you should be able to keep revenues growing with your better product.

However, you still have to cross the chasm from early adopters to mainstream customers,

and they are more skeptical than the early adopters, and it takes time to convince them to switch over to your product.

Therefore, your Scaling should be more in sync with your revenue growth.  Unless, of course, money is no object.

For startups, timing is an essential element that you must always be conscious of.

 On the other hand, Scaling isn’t the same as increasing sales.

Scaling also means enhancing and improving your capacity and capability; scaling requires a well-thought-out plan

(written down) that includes all of your sales and marketing, operational systems,

the technology that will help with both revenue generation and operations,

financial requirements necessary to scale, and potential risks.

At the same time, Scaling also requires that you continue to focus on your customers.

It would be best if you thought like Amazon, which puts billions into infrastructure

and operations to take care of its customers. Is your goal to have your startup scale?

If yes, do you have the profit margins and market size to scale?

If not, you can still have a great business, but it will be hard to attract investors.

Prepare To Deal With New Regulations On Privacy Protection

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Starting on January 1, Americans – or at least 40 millions of them living in California – now have a comprehensive online privacy protection law in place called CCPA (California Consumer Privacy Act). Just like it’s European General Data Protection Regulation (GDPR) counterpart, which was passed in 2018. CCPA will eventually extend far beyond the State of California and reach the entire nation. 

Professionals and experts believe the odds are pretty strong that CCPA will be the foundation of privacy regulations in many other states or even U.S. federal online privacy law.

CCPA has established much stronger rights for Californians concerning their online data. For example, California residents now have the power to order any company NOT to SELL their data to any third-party for any purpose without their consent. Californian consumers can also ask just about every company that has collected their data and anybody else with which the company has shared it, to delete the information from the company’s record.

What Can a Business Do?

Under the newly enforced regulation, Californian consumers are entitled to know the categories of information that companies have collected and able to see any specific bits of the data, such as postal address and browsing history. Although CCPA is meant for consumers residing in the state of California, most companies will find it difficult to pinpoint the exact location of every single consumer. It is just the nature of the Internet that no one knows where a user is. Some businesses will have to apply CCPA across the board simply because they cannot effectively distinguish between Californian consumers and those from other states.

Another thing to consider is that Californian consumers have the right to take legal action for unlawful use of their online data in any form, so failure to comply may lead to disastrous consequences on companies’ part. CCPA applies to any for-profit entity which does business in California, collects consumers’ data, and meets any of the following thresholds:

  • Generates an annual gross revenue of more than $25 million
  • Trades (buys or sells) personal information of at least 50,000 consumers or households, or
  • Earns more than 50% of annual revenue from selling consumers’ data

The thresholds may appear to target medium-to-large-sized companies, but many small businesses and even startups can quickly meet one or more of the limits. But then again, this is not the end of the world. Online data privacy regulation has always been a hot topic over the years, and CCPA is the logical first step into the culmination of the discussion. There are several things businesses can do to ensure compliance without sacrificing profitability.

Read the fine print

Unless you have an executive team to do it for you, it is always best to try and understand CCPA yourself. This way, you can make notes of the things you don’t fully comprehend so that you can ask the more experienced legal professional for help later. While you’re at it, pay attention to the following rights granted to Californian consumers:

  •  the rights to know what personal information is collected about them
  •  the rights to know whether the personal information is being sold or disclosed to any third-party and who the party third is
  • the rights to decline the sale of personal information
  • the rights to access the personal information
  • the rights to receive equal price and services, regardless of how they exercise their privacy rights

And in the case of loss of personal information due to theft or other causes, California consumers have the right to seek damages.

Understand what personal information your business collects

As obvious as it may seem, many companies are not fully aware of the kinds of personal data their own businesses collect from consumers. Some probably don’t know that their businesses collect data at all. This is most often seen in startups where the focus is mainly on growing the business. Privacy regulation is likely considered an obstacle in growth, but now they cannot just ignore CCPA for the consequences can be severe.

Have your business partners read the law too

If you run a reasonably sized company, chances are you have multiple employees (or departments) to handle various tasks from bookkeeping to marketing, from networking to customer service. To properly implement CCPA and ensure compliance, make sure everyone in the company also reads the bill. Your officers, executives, and legal teams should understand the law better than anybody. Know the potential risk and craft a plan to avoid penalties.

You can read the full text here.

Privacy policy and regulation have the reputation of being the dark sides of business conduct. The reality is that many companies most likely takes advantage of personal consumer data for marketing or downright additional revenue by selling the information to third-party entities such as advertisers. CCPA is trying to get rid of the murkiness and provide a clear path for both companies and consumers to play it fair and square.

 

 

Recognize And Adapt To Your Stage Of Business

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Recognizing the growth patterns of small businesses and the peculiar set of challenges presented by every stage of development are indispensable for every budding entrepreneur who often seems to get lost in the process of penetrating the market. Businesses, especially small-scale ones, are in constant growth. They start with just a few employees and a very limited range of objectives, but they all have the potential to embark on major expansion with properly crafted and well-executed action plans. While all small businesses are unique in terms of organizational structure, strategy, and managerial style, they have one thing in common: they experience or follow the same set of growth patterns.

A business does not simply come into existence and become profitable overnight. Businesses have to go through a sequence of developmental steps and overcome all the challenges that every step creates. Believe it or not, the same pattern applies to every company including startup with just a handful of employees to the multi-million dollar software developers. 

The similarity of the growth pattern makes it easier for startup founders to understand the opportunity and obstacles ahead of time, and create an effective plan in accordance with market conditions, so they can survive and thrive in the long run. 

Such an understanding is the foundation for business owners to devise a creative plan that ensures the efficient use of available resources.

Growth Pattern

Various studies have attempted to come up with a definitive model to examine the growth of a small business, but the most commonly used pattern is as follows.

 Planning

At this very early stage, the business to be established must answer these questions:

  •  Does the idea (of goods or services) fill a need in the market? 
  • Will the company make a profit?
  • How will people react to the product idea?
  • What is the right business model for this business?

The “initial” plan is just that: initial. You cannot stick to that same plan over the years and expect steady growth. The key to a successful startup is adaptability, meaning the business plan must change in accordance with current market conditions and consumers’ demands. Every single part of the action plan must be under constant review and ready for quick adjustment. Many times the plan also includes a requirement for outside investment.

 Establishment

The next growth stage is Establishment, in which the business is starting to take shape, and therefore a change of plan is most likely necessary. A small business undergoes a massive difference at this stage because the initial plan can no longer sustain growth. Some of the most common challenges include:

  •  Seeking outside investment because the actual budget exceeds the allocated amount
  • Hiring more employees to support day-to-day operation, which also adds more expense
  • Establishing market presence and customer base
  • Ensuring a balance between cash reserves, expenditures, and sales
  • Determining more appropriate management styles due to market demands

In the establishment stage, the most important thing to achieve is sustainable operating procedures with risk management.

Early Growth

A significant milestone in building a business is the ability to gain steady cash flow from the customer base. It is a sign that the production and delivery of goods and services are well-managed. At this point, small businesses have overcome all the difficulties endured during the earlier stages of growth and are in the process of generating revenue. As profit starts to come through the door; however, competition is catching up and bringing some new challenges:

  •  Fulfilling the demands of an increasing number of customers
  • Streamlining company operation to minimize operational cost
  • Keeping up with competitors
  • Increasing the volume of cash reserves

During the Early Growth stage, the deciding factor is whether the company can recognize the key profit driver and optimize its impact on the business itself.

 Profitability

With more reliable distribution channels and effective marketing strategy in place, small business has earned its place in the market despite fierce competition and makes money. Being profitable is a sign that the business is moving toward the expansion process. Naturally, the company is seeking to:

  •  Stay ahead of competitors
  • Acquire competitors whenever possible
  • Expand the business sectors
  • Increase the volume of production

 Many small business owners think that Profitability is the final stage, and they are not entirely wrong. After all, the purpose of building a business is to earn a profit. However,  complacency at this stage often leads to a decline, mostly because the competitors can afford to stay creative. There is always room for improvement, for example, employee engagement, customer satisfaction, brand image, and collaborations with partners.

 Revitalization

 Also often referred to as the maturity stage, Revitalization is the beginning of a process where the business must think about new and improved products or services or an effective exit strategy. As you know, the market is always changing; your goods and services need to stay relevant if you want to stay in business. Go back to the drawing board and craft a new plan to support and encourage innovations. But this time it will be easier because you have reliable financial resources to get the job done.

Get 10x More Done In Less Time

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Most everyone agrees that execution is critical to the development of a company. In fact, many investors in Silicon Valley, believe that execution is the number one risk when it comes to startups and early developing companies. We will have many articles on this topic because it is so important. But, I want to start with how to get more done in less time.

There are so many things that need to be accomplished and often not enough time or people to do all of these jobs. So the question is: If everyone has the same number of hours in a day, how is it that some people get exceptional results and others get very little done?

Here is one way to do it. I am sure you have heard of the Pareto Rule or the 80/20 rule. That rule works for most things and you can use it to become more efficient and more effective and in fact, do bigger things. Gary Keiler, in this book, “The Surprisingly Simple Truth Behind Extraordinary Results” tells how he accomplished more by doing less.

He says things were not working out with his job and his life. Too many demands, too little time and he had to do something. He went to a consultant and was told to do less. He was told to narrow his focus to one thing. In fact, the more narrow your focus the more successful you will be. “To achieve an extraordinary result you must choose what matters most and give it all the time it demands”

He was told to answer this question: “What’s the one thing I can do such that by doing it everything else will be easier or unnecessary?”

It all boils down to this very simple thing but something you have to practice at to become good at. In other words, you need to get out a calendar and make an appointment with yourself, four hours at a time, every day, to focus and work on that one thing that must get done. No distractions such as email, phone, chit chat with other workers or friends. Tell people you are busy. Four (or more) uninterrupted hours to focus on what is important. That is how you master your craft and that is how you get things done.

Here is a couple of examples. Harry Browne, America’s most successful salesman, worked four hours a day selling different things including cars and in the afternoon did other personal things including writing. He says selling is easy and we will be discussing his methods and ideas in
other articles.

Michael Phelps practiced six hours a day, 365 days a year, a 52-day practice advantage over
his competitors, which resulted in 22 gold medals, the most ever by an Olympian.

Focusing a minimum of 4-hours a day on being the best rather than doing your best is the answer.

As you knock down one goal, the next one gets easier. But, you have to protect your time blocks. Don’t let those time blocks get moved or interrupted Until that one thing gets done, everything else is a distraction.

Try it. You will be amazed at what you will accomplish and how good it feels to complete difficult tasks quickly and how many tasks you will get done and the progress you will make because each completed task moves you closer to your goal.

How To Get The Key Metrics You Need To Achieve Desired Results

Posted on by harborcapitalgroupinc

This article will cover an introduction to KPI (Key Performance Indicators) if OKR (Objective Key Results) is all about defining goals and tracking actual progress towards achievement at any given time. Key Performance Indicators (KPI)  measure the contributing factors through which achievements are attained. In other words, KPI includes the key; leading factors deemed necessary to achieve a specific goal. Although the scope of KPI is not as broad as OKR as far as measuring success is concerned, the KPI gives more detailed information about each specific factor measured.

For example, if the objective is to increase product output by 20% and one of the key results is an improvement of resource utilization (efficiency). Then KPI may include labor costs incurred in the manufacturing process, energy usage, production time quality, rejection rate, equipment downtime, maintenance cost, and all variables that relate to achieving the desired objective. KPI creates a rational basis to help the company shift focus strategically while avoiding operational disruption. The results of the analysis will be used in the decision-making process.

There are two types of KPIs:

Lagging Indicators: the inductors that measure results of any particular company activity, such as revenue growth and quarterly profit. They are called “lagging indicators” because they track results that have already occurred.

Leading Indicators: the indicators or variables to predict and influence future results. These are often more difficult to set up due to changes in external factors (that the company cannot control), such as consumer trends, investments, and competitors. However, unexpected changes do not always bring negative impacts; for example, additional investment in manufacturing equipment can increase output.

Although each industry has different KPIs to measure, the indicators or variables have the same purpose of providing practical guides to adapt and change under internal and exter\nal circumstances. Also, in most companies, proper business strategies are often based on creating the right balance between lagging and leading indicators.

Why use KPI?

Once the goals are defined, the company also needs to determine all variables that contribute to achievements. Without key performance indicators, it would be challenging for a company to evaluate performance in a meaningful way and make operational changes to address issues. KPI also helps employees stay focused on the most critical tasks leading to the competition of the objective.  

KPI gives a comprehensive understanding of the company’s performance at any moment and identifies possible changes in operations. Without knowing which parts of a strategy are not working, there is no way to design a good action plan to overcome the problem. By examining the analytical data of the KPI, managers can tell whether company performance is improving or declining. Then determine a practical approach to either to sustain improvements or deal with the decline in performance.

Benefits of using KPI

A company with well-thought-out KPIs has the advantage of performance visibility across business operations. The data-driven information acquired from analysis allows for a practical management approach to keep the company moving forward despite difficult challenges. More benefits of using KPIs are as follows:

Proactive business management: armed with fact-based information with KPIs, a company becomes more active in managing operations and discovering opportunities in the market.

Efficiency: KPI provides a tool for the company to identify any inefficiency within the business operation. Addressing the problem will eliminate the waste of resources.

Accountability: KPIs will show whether specific processes, individuals, or teams in charge of the operations are under or over performing. Allocating more resources or reinforcing the workforce may help improve the indicator and, therefore, overall performance.

Motivational values: even if the company is struggling, one positive metric shown in KPI can be a great motivation for everyone to keep improving and overcome difficulties.

In general, KPIs tell whether your company is moving forward, backward, or not moving toward progress at all. Proper implementation of KPIs is important in every decision-making process because they help identify issues and set the foundations to plan for sustainable growth in a more efficient way.

Do You Know If You Are Ready To Move Forward?

Posted on by harborcapitalgroupinc

 

In nearly all aspects of life, being ready has more or less the same meaning as being well-prepared. When it comes to running a business, however, it refers to several specific points as follows:

  • Having a good understanding of the business’ current position. It allows you to gauge how far or close the company is to achieving all objectives outlined in the strategy.
  • Recognizing all possible restraints and challenges. Armed with the knowledge of potential difficulties, a company can utilize resources more effectively to address issues.
  • Figuring out the company’s elements that are still under-utilized. Performance analysis gathered from such review opens the door to company optimization.
  • You are pinpointing business areas yet-to-be-explored. Sometimes the exploration does not come to fruition, but the knowledge gained from the process is always useful in decision-making.
  • Are you making sure that all factors related to the operational plan have been thoroughly examined and taken into consideration when crafting the strategy?
  • Are you aware of the company’s limitations in terms of resources?

Assuming all those points are covered, a company is “most-likely” deemed ready to execute its business strategy. Those are the bare minimum requirements to devise an effective strategic plan. If there is one thing missing, it is the pressure of external factors, including competitors and market situation – the elements you cannot control. That’s why a contingency plan should also or be prepared.