Michael E. Nolan: December 2007

Best Glide Speed

Monday, December 31, 2007 by Mike Nolan

10,000 feet, in a small single engine plane. The unthinkable happens. The engine sputters, and stops. The good thing is, this is something you’ve practiced over and over again.

The procedure is to immediately trim the plane for Best Glide Speed. This is the speed at which you stay in the air the longest. Any faster speed, you hit the ground sooner. Any slower speed, you hit the ground faster.

Then you try to restart the engine, call for help, find a place to land, etc.

It occurs to me that this is a useful analogy for business. There comes a point in time that the business model you have isn’t going to keep you up in the air forever.

Take commercial radio, or newspapers, or commercial TV. Listenership, readership and viewership is going down. We live in an on-demand world, and broadcasting is still using the same “we’ll give you what we think you want when we think you want it if you hear/read/watch our commercials” business model.

Set for Best glide speed.

Worse, technology is already circumventing this model. Ipods are killing radio. How many 17 year olds listen to radio more than to their Ipods? Guess what? These kids grow into the 18-34 demographic next year. Best glide speed.

My 74 year old father no longer subscribes to the New York Times or the Wall Street Journal. (Gasp!) He instead relies on their web pages, along with his Google home page for his news. Newspapers? Set for

Best glide speed.

TV? My 12 year old will not and never has watched a commercial. She is a master of the DVR. She will never remember a time when she didn’t have this cool device. And she has never, ever watched the local news. Best glide speed.

Now what?

Focus on restarting the engine.

The trick is not to let the plane crash.

Organic growth is next big buzz word. It’s basically a fancy term for businesses thinking and acting like entrepreneurs. Killing their own cash cows before they die of old age. Restarting the engine.

Labels: Entrepreneurship, glide, organic growth

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Organic Growth

Friday, December 28, 2007 by Mike Nolan

Here's a book review reprinted from a great weblog by John Moore - BrandAutopsy.com The Six Keys to Organic Growth It's an excerpt from Edward Hess's new book. I cut and paste the article, and would encourage you to visit John Moore's site.

“Growth achieved through a commitment to customer satisfaction, employee engagement, and core profitability—organic growth—is a smart long-term strategy for any company. Organic growth represents the underlying strength and vitality of the core business.” (p. 1)
“Our investigation found that [high-organic growth] companies generally possessed the six keys discussed below.” (p. 20)

1. An Elevator Pitch Model“High growth companies have a simple, understandable business model that their employees can understand and execute—none has a complex or sophisticated strategy.” (p. 70)

2. Instill a “Small Company Soul” into a “Big Company Body”“High organic growth performers have a small-company soul housed in a big-company body. A small company soul is entrepreneurial, with employees having ownership of the customer, being held accountable for results, and sharing in the rewards of those results.” (p. 81)

3. Measure Everything“One of the six keys to building a consistent high organic growth company is measurement—of everything. The 22 companies on the organic growth index (OGI) list track a variety of metrics—financial, operational, behavioral—to understand which areas of their business are not performing as efficiently as possible, and then they take action to shore up those numbers.” (p. 97)

4. Build a People Pipeline“All the high-growth companies have a high management and employee retention, high employee loyalty, and high employee productivity as compared with their competition. Employees in these companies ‘own’ their results and their careers, and most even own part of the company. These companies’ management teams are frequently home grown, with long company tenures.” (pgs. 22, 117)

5. Leaders: Humble, Passionate, Focused Operators“Rather than being overly confident about their success, at high organic growth companies, leaders are frequently paranoid about complacency, arrogance, and hubris. Although many leaders are very wealthy, for the most part, you would not know this from their dress, their office, their demeanor, their attitude, or any outward appearance. Few of the leaders, if any, take credit themselves. There is a sincere respect for line workers, where many had begun their careers.” (pgs. 139, 140)

6. Be an Execution and Technology Champion“The high-organic companies generally do not have unique strategies, products, or services, nor are they market-leading innovators. But they are execution champions—day after day, they have figured out how to get consistent high-quality performance from their people. These companies use technology to drive efficiencies across their value chain. To them, technology is not a service function; it is an operational function.” (pgs. 23, 161)

source: THE ROAD TO ORGANIC GROWTH (Edward D. Hess)
Review reprinted from http://www.brandautopsy.com/

Labels: Entrepreneurship, organic growth

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Kill your own cash cows

Wednesday, December 12, 2007 by Mike Nolan

All companies seek growth. Below is a plan of attack for identifying new venture opportunities within the framework of your current business. The key is to start with problems of your customers, suppliers and other stakeholders. If you can solve these problems, you’re bound to make money.

Problem

Research problems of all stake holders – on both sides of the network
Define the scope of the problem – dig for “pain points” and causes
Segment into problem groups – shared problems across stakeholder

Idea

Brain Storm – With each problem comes the solution brainstorm – think big, think
wild, record everything
Crystallize – Start to talk it out, dig deep, apply a little bit of real world
Return to beginning – go through the list, record new ideas, dig into each idea little more

Opportunity

Can we do it?
Is it true to our brand?
If we don’t do it, can someone else do it? Can we do it with a partner?
What is its potential? – profitability, barrier to entry, stabilizing force, etc.

Plan

Real business planning process - not just writing a business plan
Weave a MAT – Milestones, Assumptions and Tasks*Assign Actions & Responsibilities – Senior management must not abdicate execution knowledge!

Execute

Invite to succeed - Identify leaders & opinion makers and sell within first
Re-examine against original goals
Learn from failure – is it still a good idea? Can someone else do it better and still benefit our stakeholders? Explore cultural aspects of failure, and distinguish from technology, systems and HR factors.

*Thanks to Guy Kawasaki – The Art of the Start – a must read

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