Did you see the current economic storm coming? Were you listening to what the reputable commentators were saying and reviewing the likely impact on your business?

If not, its time to raise your eyes from working in your business and look at what is happening around you.

Upheavals in world financial markets caused by the US sub-prime mortgage problems has made many business owners very nervous.  Every day the news seems more gloomy as world stock markets tumble and yet another banking icon declares losses that are incomprehensible to mere mortals who occupy the small business world.

When economic sentiment turns from optimism to caution cutomers tend to close their wallets and wait for the air to clear. As a result, business owners are forced to review sales forecasts, marketing strategies, production plans and cash flow projections to ascertain the best course to survive the storm and identify new opportunities.

What should you do when the world seems to be closing down?

• Review your customer and product profiles - Is you business concentrated on a range of customers who are able to survive economic storms and do you provide the products and services to help them survive?
• Review your marketing strategies - Do your customers, and others like them understand understand the total solutions your business provides? How are you making this information available to them and what mesages are you delivering? Are your current marketing strategies still appropriate? What new opprtunities present themselves in difficult times?
• Review your production plans and processes - What is the balance between production and inventories? How does production align with current market conditions? Are your production processes producing the best output for the least appropriate cost and minimum waste? Are you producing what your customers actually want and at a price they are willing to pay?
• Review your cash flow projections - When times are tough, cash is king. Are your credit and cash collection policies current, appropriate and complied with? Are your inventory holdings in line with current customer requirements (inventories can be one of the hidden stores of cash in your business)? Do you have other assets which are surplus to requirements and could be sold for cash? Will projected cash flows allow you to ride out the storm?

Any good sea captain uses all the resources available to him when storms arrive. He not only relies on his own knowledge and information provided by his instruments, but also on his navigator, engineer, and the rest of the crew , as well as advice from outside his vessel to help steer a safe passage through the storm.

By all means use the institutional knowledge within your business to plan your way through the current economic turmoil. Remember though, there is advice available from outside of your business also, and often the perspective from outside is clearer than from within. Your banker, lawyer, accountant, trade association and business coach can help you steer a course to new opprtunities and/or safe havens.

Everything done by you or your business has an outcome, a result. The very purpose of a business is to produce results in the form of value for anyone with an interest in the business, especially customers.

The mistake many business people make is to focus on the work, not the results. The purpose of work is to produce a result. If you focus on the work, you get what you get. If you focus on the result, it will direct the work toward the outcome you want, and you'll get what you want to get. It's actually a chain of purpose:

Goal leads to Work leads to Results leads to Success

It's a simple principle: set goals to achieve the results you want and keep your eye on those results as you work toward them.

It's only after the fact, after you've accomplished something, that you can call it a success. Before the fact it's a hope, or if you do it right, a goal. Setting goals is actually defining success before it happens. Goals give you something to aim for, something to direct your efforts, something to motivate you, and something to keep you on course.

The first point about defining success is the simple act of doing it. The mere fact that you define success before leaping into an activity goes a long way toward insuring that you will, in fact, be successful. So look ahead and consciously decide what success means to you and to your business.

Stripped to the essentials, success is nothing more than setting a goal and achieving it.

There's a deeper experience of success. Each of us has an inner drive that motivates us. It's something that was shaped in our earliest days, that's so basic to us it seems inborn, part of our characters that operates mostly at an unconscious level. It needs to become a part of our conscious awareness so we can factor it into our decision making, and use it to tap into our passion and motivation.

We call it "Core Purpose" because it is core to your personality and it shapes your sense of purpose in your life.

Core Purpose 

The main point about Core Purpose is that the goals you set for yourself and your business can't conflict with your Core Purpose or you're setting yourself up for failure or an unfulfilling life and career.

What is success for your business? Again, success is what you say it is. And again, it's not quite that simple. Defining success for your business should be done in a way that actually launches you toward that success.

Goal-setting is an important part of that, so are setting a vision and mission for the future of the business and deciding on how it will operate and how the people in the business should behave. In our Full Spectrum program, we ask you to define something called "Strategic Intent."

Strategic Intent 

Strategic Intent is a clear statement of what the business will become in the future when it is successful. Strategic Intent sets the stage for success and puts your business on the right path to succeed.

So, success is what you define it to be - both for yourself and your business. If you don't define success, how will you know whether you have achieved it, or not?  Part of the business development work you do on your business is setting goals.  Don't limit those goals to just financial goals - look at your business as a whole and set goals in non-financial terms also.

The summer holiday season has finally come to an end for Australian and New Zealand businesses. The "silly season" from mid December till the end of January brings everyone back to work with suntans and refreshed minds.

Holidays provide an opportunity to get away from the business to spend time pursuing other activities.  The business however, is never far away.  Unless you are totally out of range of telephones and the internet, the business goes on holiday with you.  You do get time to reflect though, away from the bustle of working every day in the business:

• How have we done in the last year?
• What mistakes did we make that we can avoid in the future?
• Where is the business headed?
• When do I plan to retire?
• What new opportunities are out there that we need to look into?
• Is there a better way of doing what we do?
• and so on...

Why not start the new year by writing down your goals for yourself and your business for the next year, and the three or four years beyond that? What is the strategic intent for your business, and what is the gap between the current reality and this strategic intent?

Writing your thoughts down gives you something tangible to think about and gives you the opportunity to develop strategies for change and prioritise them.  This means that the actions that you take in the new year are taken intentionally, and therefore have a greater chance of success.

And, don't forget to ask for help if you need it - you probably don't have all of the answers yourself.

Have you ever wondered how people make decisions about what they do and how to do it? Maybe you've noticed that some people seem to be very intuitive in what they do, but others are very analytical.  What kind of person are you, and how do you make decisions about your life and your business?

Human beings come fully equipped with both logical and intuitive thinking abilities, and somehow, over the years, most of us learn to rely on one more than the other. Neither is better than the other and neither is more reliable.

People who intuitively "trust my gut" are just as likely to be right or wrong as people who "figure it out" logically. The people who learn to use both logical and intuitive thinking get the best results. It's as if they had two brains, and everyone knows "two heads are better than one." 

If you tend to be a logical thinker, wouldn't it be better if you could double-check your logic with your intuition?

If you tend to be intuitive, wouldn't it be better if you could build a logical case for what your intuition tells you? Of course, the answer to both questions is yes.

This principle of using your whole-mind will make your decision making and business management far more effective than relying primarily on one thinking mode or the other.

An understanding of the importance of conscious and unconscious thinking and logical and intuitive decision making will dramatically increase your effectiveness as a business person and leader. It's a theme that should run throughout your business development process.

We have all heard "rules of thumb" about how to improve the way we do business. In some circumstances these seem to work quite well, but not always.  A rule of thumb is really a formula someone has worked out for their business that seems to deliver results for them, most of the time.  We hear them from acquaintances, from golfing partners, and sometimes from business consultants who offer them as a panacea or cure for business ills.

When we say "formula" we include rules, templates, best practices, and other "cookie cutter" methods, which are simply attempts to transplant methods that worked in one business into other businesses. 

Formulas make sense, don't they? Only if your business is exactly the same as the one where the formula was developed. The problem with formulas is not that they don't work. The problem arises because your business isn't the same as any other business, not even other businesses offering the same products and services to the same markets. 

You're not like other leaders. You have your own strengths and weaknesses, and they're not like anyone else's strengths and weaknesses. And your specific situation isn't exactly like the situation for any other business. 

A business principle is an underlying business reality. Principles are fundamental laws.  You cannot change them.  However by knowing and understanding them you can build these principles into the design of your business.  You get to have them powerfully working for you rather than against you. 

A business principle is deeper, more fundamental than a formula. A formula is a generalized attempt to solve a general business problem. But your problems - and opportunities - aren't general. They're specific. What you need are specific solutions to your specific problems and opportunities. 

You don't want "approximately" or "good enough." You want "exactly right" for your business, and "outstanding" for your customers, investors, employees, and others.

The previous four posts to this blog highlight a number of key principles that you can use in your business. In case you missed them they are:

1. The customer must be paramount

2. Systems are the solution to business frustrations

3. Deliver Full Spectrum value

4. The 80/20 Rule

The next few posts will bring some additional principles for you to consider. Using them as a basis for you business development thinking, you will begin to develop some ideas about how your business might become different.  Now that's a thought!

Leverage yourself and your resources

Effective people know to focus their attention and their resources on the small number of tasks that get the greatest results. It's called the eighty-twenty rule - eighty percent of the results produced by a person or a business are produced by twenty percent of the work. 

There's nothing magic about the "eighty percent" number. Just remember that smart people know to leverage themselves and their impact by putting their attention and their resources where they'll get the greatest results. 

The trick is in knowing which work and resources will get the results they want.

What are the driving forces in the business? That's where you put your attention.

What elements of value drive the customer's purchase decision? That's where you put your attention.

What business systems are the ones that get the most important results? That's where you put your attention.

What are the highest priorities for work to be done? That's where... well, you know.

This basic principle of business development asks you to figure out what "drives" your business, your customers, your employees, and to focus your attention on those drivers.

Value is one of those words that means what you think it means, depending on your point of view. In business, value is anything you provide that someone wants. If you provide it and they don't want it, it's valueless. If they want it and don't get it, it's valueless. If they want it and get all of it, that's full spectrum value.

What might this mean to the people your business touches?

To the owner, value is wealth, profits, satisfaction, making a contribution, status ... and much more.

To customers, value is a good price for the products and services they buy, a good experience of the product and the provider they get it from, status, emotional satisfaction ... and much more.

To an employee, value is a paycheque, job satisfaction, a good working environment, respectful treatment... and much more.

To the community, value is a business that pays its taxes, provides jobs for its citizens, contributes to the positive energy and the economics of the community ... and much more.

The bottom line is this: 

Value is whatever satisfies the needs of anyone having anything to do with the business.

Unless your business can deliver full spectrum value that can be recognised by everyone that it touches then there is nothing that will differentiate it from all the other businesses in the community that are its competitors.  The less it is undifferentiated, the less reason there will be for prospective customers to visit and existing customers to stay, employees to remain loyal, suppliers to offer special deals, lenders to lend, and investors to continue their investment.  The choice is yours.

A business is a system of systems within systems. That may sound like gobbledygook, but it's not. Systems are the foundation of business excellence and the best way to make simplicity out of complexity.

Systemizing your business is the surest way to getting the reliable, consistent, high quality, and cost-effective results that are necessary for success. Systems are the primary tool for building a business that delivers value for everyone.

At the heart of most business frustrations are one of three causes:

• Lack of written policies or procedures
• Faulty documented policies or procedures
• Documented policies or procedures that work if they are complied with, but are not being followed.

A basic principle of business development is the documentation of key policies and procedures to ensure that important aspects of your business are performed the same way every time. This provides everyone that has an experience of your business with consistent outcomes and certainty about what to expect.

Where most small businesses have trouble is knowing how to document their policies and procedures and having the time to undertake a task that seems overwhelming in its scale.

Like all big projects, having a plan and the right tools allows the job to be broken down into smaller tasks that can more easily be accomplished.

The key to success with policies, procedures and systems is simplicity. Some points to consider when documenting policies and procedures in your business are:

• Clearly define expected outcomes or results on every document
• State which position in your organisation is resposible for producing the outcome or result 
• Keep policy documents short and to the point
• Don't mix several policies into one document
• Consider whether a checklist, form, flowchart, diagram etc can replace a narative document
• Keep work steps in action plans or work plans short and to the point
• Number work steps
• Identify resources required to produce the expected result
• Clearly identify expected performance standards and key performance indicators, where necessary.

There are a number of software tools that are now available to help make your business documentation easier.  These include TKO Business Modeller and Touchstone Business System.

These types of tool allow you to:

• Organize your whole business and all its key work into Systems & Procedures
• Produce your own fully customized Operating Manual
• Create a Dynamic Organizational Chart with integrated Job Descriptions
• Develop & Control your business with Action Plans, Checklists, Forms & Policies
• Produce the framework for your professional management system.

No matter whether you use a software tool as described above, or you document and organise your policies and procedures in some other way, the key message is to get started. If necessary, seek help to get it done

Life can be very painful at times, especially when legal rights and defences are concerned.  For want of documentary evidence a right or a defence can fail, often with painful monetary consequences.

In the last year I have had to assist several businesses to defend themselves against claims where they had kept insufficient or inadequate documentation to support their argument or position.  It becomes very difficult to construct a defense when the evidence is largely anecdotal and verbal. 

Often the person or organisation prosecuting a case can support their argument with written contracts, meeting notes, correspondence, diary entries etc, and even though the moral ground may strongly be in favour of the defense, their argument can fail through lack of documentary proof.  Procecution lawyers and revenue authorities thrive on these situations.

The fundemental tenet here, and one that business people need to adhere to at all times is "if its not written, its not real". 

Its the same with business systems.  If you want want the people in your organisation to perform key tasks in the same way every time to achieve the same results every time, your systems need to be written down.  Some benefits of written systems are:

1. There can be now doubt about what is required to be done
2. Routine tasks can be dealt with quickly and easily
3. Performance measures can be easily understood by all
4. Performance can be measured against written standards
5. Documented systems form part of position agreements
6. There is transparency about what is required.

There is a moral here.  Next time you don't get the results you expect or have to defend your position in a complaint or action against you, look for the written documentation to support your point of view.  Whereever you find a gap, remedy it, especially if a material consequence could arise from its omission. Without written evidence your life will inevitably become more difficult.