Showing posts with label Introduction. Show all posts
Showing posts with label Introduction. Show all posts

Tuesday

Basic Business Organization

Organizing Around the Customer’s Process

Since the primary purpose of a successful business is to help customers with their problems it stands to reason that a business would be organized around the way customers look at problems.

The Customers Perspective
The typical problem solving cycle of any customer can be broken down into four stages, each with a trigger that starts it off. Identifying a problem triggers the customer to start looking or shopping for solutions. Identifying a viable solution triggers the customer to sort out the details and place an order. Reaching an agreement on options and payment details triggers the customer to let someone start working on delivering the solution. Accepting the final solution triggers the customer to use the solution.


Organizing Around the Customer’s Process
To keep everyone happy, you want the customer to progress through these stages as quickly and smoothly as possible. As a result most businesses are set up with four main teams, each one specializing in helping the customer through one of the primary stages of solving his or her problem.

The sales team is there to help the customer understand the available solutions, the solutions your company offers, and the benefits of each solution.

The orders team is there to help the customer choose the right details and options, and agree on payment and delivery methods. The orders team must be able to answer detailed questions and offer intelligent advice to ensure the customer gets a good solution. The customer should not have to learn any more than they want to about the details of your company and its products and services. The orders teams is there to make sure all the necessary details are covered.

After an agreement is reached with the orders team, the delivery team takes over to build and deliver the solution to the customer. In a products business this would include a factory and commissioning team. In a services business this team would include the people who provide the actual service. The delivery team is often referred to as the fulfillment team since their role is to fill the order.

After the order has been delivered and accepted by the customer, it is important to have a support team there to ensure the customer has as pleasant experience using the solution. This includes addressing any problems that arise after the customer has taken delivery of the solution, and answering general questions to make life as easy for the customer as possible.

All four teams are there to help the customer through the process.

Ensuring the Business Side
Now let’s look at this from the businesses perspective. Remember the solution needs to be advantageous for both the customer and the business. We call this a win-win scenario, and it is crucial to building successful long term relationships.

From this perspective, the sales team’s goal is to get the customer to decide that they want to buy from this business. The goal is not a purchase; the goal is a decision in their minds that they want to make a purchase. It follows that the sales team needs to understand the value of your solutions, and where they fit in the marketplace. It is not critical that they understand every detail, but they had better know where to get the answers.

The orders team’s goal is to get the purchase order. If the sales team has done its job, the customer already wants to buy. The orders team must sit down with the customer and understand the details of the problem they are trying to solve. They must then explain the available options, answer any questions, and work with the customer to find a mutually agreeable solution that helps both the customer and the business. A win-win philosophy is at the heart of all successful orders team.

From a business perspective, the delivery team’s goal is to get the customer to pay for the solution. They do this by providing a quality solution that the customer accepts. Managing delivery can be very complex, but it is critical that this complexity is not transferred onto the customer. The customer wants a quality product or service, delivered on time, and on budget. How the details are handled is not their problem. They are not that interested in how you do it. They are interested in the end result. The delivery team must deliver the end result.

So once a business has been paid for delivering a solution why continue to serve the customer? The support team’s goal is to deliver a happy customer back to the sales team so their job will be easier the next time around. This function is often under-rated by people who do not understand how much easier (and less costly) it is to sell to a customer something a second time, compared to getting a new customer. Post-delivery customer support is crucial to all successful long-term businesses. When a happy customer goes looking to solve his or her next problem, they will come to you first. An unhappy customer will go to everyone else first. The support team is there to ensure the next sale.

Summary
Healthy businesses are organized around the way customers pursue solutions to their problems.

The sales team helps the customer understand the available solutions and their benefits. The sales team helps the business get the customer to decide they want to buy.

The orders team helps the customer understand the details and place an order. The orders team helps the business understand the customer’s details and get the contract signed.

The delivery, or fulfillment team helps the customer by providing the agreed upon solution. The delivery team helps the business get the customer to pay for the solution.

The support team helps the customer by taking care of them even after they have paid their bill. The support team helps the business by delivering happy, ready to buy customers to the sales team.

Each team needs to have a strong relationship with the teams that precede and follow them in the business cycle in order to serve the customer well. Each team needs to look for the win-win balance of helping the customer and helping the business because helping the customer the right way is the same as helping the business.
Boundless Thinking

Friday

Why Are Businesses In Business?

A Short Rant on Business 101

Looking back I can’t believe how long it took me to truly understand what a business was for. I’d heard it repeated countless times, albeit for the most part by parrots and non-believers. I’d seen it portrayed in posters and articles all around me, but somehow I remained blind to the message. Like many of us, I was brought up believing that to make it in business you had to be ruthless and unfeeling at times. Clouded by this false perception I refused to believe the mantra all around me: “The Customer is Number One.”

The Purpose of Business

What follows is, admittedly, a bit of a rant. It’s important that you read it. Here’s why. To understand what businesses do, you need to understand why they do it. To understand how to improve the business you are in, you need to understand its true purpose. That’s what this is all about.

When it comes to business, you can look at things in one of two lights: Good or Evil. The evil view is that the heads of major corporations exist for the purpose of taking our money from us. If you’re looking for a bad guy, few compare to the faceless evil of corporate America so often portrayed in today’s media.


The Evil Corporation: Out to get your money!

The Good Company: helping us fulfill our needs and desires.


If you bother to take a second look with the good light turned on, you will have to admit that successful businesses are there helping us fulfill our needs and desires at every turn in ways we could never achieve without them. Are they in it for themselves? Absolutely! Are they also in it for you? Absolutely again!


Are they in it for themselves? Absolutely!

Are they in it for you? Absolutely!


Fundamentally successful businesses are started for two reasons.

1. To help themselves
2. To help others

Yes, they can do both. In fact they need to do both to remain useful to themselves and to remain useful to others.

Think about your favourite store, maybe it’s a stereo shop, a clothing store, or even a grocery store. What happens if they raise their prices so high, or hire such rude sales people that you and your friends stop going there? They start losing money and go out of business. You probably wouldn’t care, but they would no longer be able to help themselves, at least not with that business.

Now what happens if that same business hires lots and lots of really nice people to spend extra time with you, and then lower their prices so you get everything at near cost? They start losing money and go out of business. This only difference is this time you care, because now you can’t go back to that friendly store. Now you can’t return that item you didn’t want, or get it fixed under warranty. Because they didn’t help themselves enough, they can’t help you any more either.

So what’s the solution? Simple, they help themselves by helping you. They want to do both. They need to do both. You also want them to do both.

What do businesses do? They help others achieve their needs and wants, and they also help themselves in the process. The one who figures out how to help others the most is the winner. There is no other reason for people to patronize a business, other than to get something they either need or want. If a business doesn’t help you get that as much as their competitor up the street does then they go out of business. If a business helps you so much they can’t make a profit, they also go out of business and are not much help to you in the long run.

Every successful business helps themselves by helping others.
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Wednesday

Welcome to Business 101

A Quick Overview

All too often people make the transition from task based or technical job functions to management without really understanding what their business does. That was certainly my story. So I learned as I went along. I went to seminars, questioned my peers and managers, listened to audio courses, read a lot of books, and banged my head against my desk for long hours trying to make sense of it all. The “how” was easy. The “why” is what drove me crazy because so few people seemed able to explain it. I truly wanted to leave things better than I found them, and to improve the “how”, you must understand the “why”.

This writing is the compilation of years of personal study and experience. Its intention is to help you understand business as a whole, and provide some answers to these questions:

1. What is our business for?
2. What does our business do?
3. How should our business be organized?
4. What is the objective of each part of our business?

I believe everyone needs grounding in business 101 if they hope to help shape their business, and provide the very best for our friends the customers. I hope you enjoy what I have to say, and learn a lot along the way.

Upcoming Topics

The Basics of Business - Grasping the Concepts

  • Why Businesses are in Business - People helping People
  • Why People Buy Things
  • Why People Get Help
  • How People Find Solutions
  • How Business is Organized to Help Provide Solutions
  • The Two Ways to Grow a Business: More Money In or Less Money Out
  • Top 3 Ways to Shrink a Business
  • Basic Measurements - How do we know if we are succeeding?

    Basic Business Cycles: Day to Day Operation

  • Daily Business Cycle: Sales, Orders, Fulfillment, Support
  • The Sales Cycle
  • The Operations Cycle
  • The Roll of the Orders Team
  • The Roll of Customer Service

  • Growing the Business: Increasing Sales

  • Increase the number of customers
  • Increase the average value of each sale
  • Increase the frequency of sales

  • Growing the Business: Lowering Costs

  • Understanding Variable Costs
  • Understanding Fixed Costs
  • Reducing Costs

  • Introducing New Solutions

  • Finding New Ideas
  • Creating New Solutions
  • Commercializing New Solutions

  • Are We Succeeding? Finance 101

  • The Balance Sheet
  • The Profit & Loss Statement
  • Cash Flow Projections
  • Sales Forecasts
  • Success Rate Metrics
  • Cost of Failure Metrics
  • Budgeting

  • A Deeper Look at Each Department

    Core Competencies
  • Sales
  • Orders
  • Fulfillment (factory)
  • Customer Service
  • R&D
  • Marketing

  • Cross-Functional Business Segments
  • Strategic Planning
  • Quality Assurance
  • Human Resources
  • Finance
  •