General Motors Big Comeback

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They most certainly have had their ups and downs, but 2013 looks to be the comeback year for General Motors.  With their stock trading near a 52-week high, their bond rating just increased to investment grade by Moody’s, and 4 of their brands rated by J.D. Power as “The Most Dependable”, GM seems to be on the mend.

Tracing its roots to 1908, General Motors started as a holding company for Buick.  In less than two years, GM merged or acquired 8 brands including Oldsmobile, Chevrolet, Pontiac, Cadillac, Elmore, Oakland, Reliance Motor Truck Company, and Rapid Motor Vehicle (predecessor to GMC Trucks).   The company ran into its first experience with leverage in 1910 when then founder, and majority owner, William Durant lost control of the company to a bankers’ trust due to the overly aggressive, rapid expansion and acquisition spree.  Durant would later take control again of GM in 1916, this time for good.  GM would experience stratospheric growth until the early 1980s when new cracks in its armor would begin to appear.

For years GM had operated with hubris…an extreme arrogance coupled with the Company’s inability to realistically understand its own competence.  Build it and they will come was the motto.  This led to poor quality, cheap and unreliable components, and total disregard for consumer preferences.  GM actually pioneered many of today’s most popular in-vehicle features but was unable to follow through.  The 1955 Chevy was the first documented car that offered cup holders, but it took nearly 30 years for a different car company to make them standard and popular.  That car company was Chrysler and the vehicle was the Chrysler minivan.  GM was the first to manufacture a mass-produced electric vehicle in 1990, the EV1, and also is recognized as the inventor of air bag safety systems in our vehicles today.

Watching GM from the mid 1980s through the early 2000s was like watching a company in suspended animation.  They produced vehicles that were average at best, offered mediocre quality, and still had not paid much attention to the interior features of its cars.  The Japanese and German automakers fine-tuned their cars offering better sound proofing to eliminate road noise, higher-end textures inside the cabins to make the vehicles more comfortable, and new exterior designs offering new looks every few years versus the seven years it took for General Motors to make exterior changes.

GM’s disregard for what the buyer wanted finally caught up to them in their 2009 bankruptcy filing at the height of the Great Recession.  Public opinion ran in extremes during this time.  The topic of a GM bailout was viewed as black or white.  You were either in favor or not…no in between.  Ultimately the U.S. government propped up General Motors with $50 billion dollars, of which half has been repaid.  The remaining balance – about 200 million shares will be sold off in traunches by the U.S. government.  To break even the stock will need to trade north of $70 per share as of today.  As so sticks the name “Government Motors”.

That brings us to GM’s comeback.  While a $70 dollar share price is still very aggressive in the near term there are promising signs that GM may have found its swagger.  They’ve unloaded their unprofitable brands including Oldsmobile, Pontiac, Saab, and Hummer.  They have poured millions into Chevy and Cadillac and so far the results have been impressive.  The new 2013 Cadillac XTS won an Edmonds “best car of the year” category while the ATS won the North American Car of the Year award.  GM’s 4 remaining brands can be found in J.D. Powers top 10 list of most dependable vehicles.  From styling and quality, to sales and service, General Motors seems to be coming back from the dead, and that’s a great thing.  Putting aside the politics of the bailout, the fact is we should all be cheering them on.  After all it’s our money.  It’s quite possible we are witnessing one of the greatest comebacks in the history of corporate America, and if that’s the case, we’re all the better for it.

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3 Quick Ways To Understand Your Buyer

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What’s better, simple or easy?  If you buy a product that is easy to use is it better than if it were simple to use?  Is there a difference?  Or does simple sound insulting.  We had to make it simple because we didn’t think you could figure it out on your own.  And so the dilemma arises for marketers around which word to use.  Select the right one and buyers respond, chose the wrong word and you can find yourself on a path to nowhere.

Understanding your buyer is the first step to learning what words or phrases will resonate the best.  Once you have the words down you can design and develop content, or campaigns, that speak the words that buyers find most engaging.  Here a few quick tips for identifying the best words or messages that will drive a positive (lead generating) response from your prospects:

  1. Survey.  Do a quick survey of your existing clients using e-mail, SurveyMonkey, or phone.  Ask them to provide you with words, or a description, of what comes to mind when they think of your company.  Leave it general.  The more parameters you place around the survey the more constrained their responses will be.  Allow them to think freely and simply react to your question.  Remember playing word association when you were a kid?  I say blue, you say sky.
  2. Key Word Test.  If you have a company blog, focus on testing key words in your titles and then throughout the blog piece.  You’ll find that the view and/or response rates will provide good insight into the words, topics, phrases that are most engaging to your audience.  Of course you should keep records to track responses when using certain words as this data will allow you to adjust future topics, titles, etc.
  3. Councils.  Both b-to-b and b-to-c companies use councils.  Customer Advisory Councils are mechanisms or tools you can use to gain quick and direct insight into your buyer.  Depending on the size of your company and the type of offering you are selling I would recommend no more than 11 Council members, always having an odd number.  Why?  The most effective and productive Councils I have been a part of, involve their members.  Council members are engaged under an NDA and have access and input into new ideas, strategies, and tactics the company is considering.  Often times a vote is involved, hence the odd number requirement.

Once you have deployed some or all of these ideas you must document and record your findings.  The data set you will create is your road map for developing your messaging.  If your customers refer to you as “easy”, you now know that there’s a good chance easy will resonate.  Likewise if the feedback you receive suggests “you are the simplest X,Y, Z to work with”, then your message should revolve around simple.

The fact is it’s up to you to find out what the right and wrong words, or phrases, are when marketing your product or service.  And the only one that truly knows what will work and what won’t is your customer…so ask them…involve them.    Once you do you will be on the road to creating a value proposition with supporting messaging that will engage the audience and generate lead response.

Leadership Lessons From 3 Influential Men

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Much has been written on the subject of leadership over the years. There are more than 103,000 books pertaining to “Leadership” at Amazon.com, and a huge multiple of that if you include books about specific leaders. I have read hundreds of these books over the years written by, or about, corporate leaders, world leaders, philosophical leaders, and celebrities representing all areas of fame. Great thoughts, ideas and perspectives can be gained from reading books across a broad swath of leaders. But for me, 3 individuals specifically have taught me some of the most important lessons in leadership. Here they are:

  1. Ronald Reagan. In her book, When Character Was King by Peggy Noonan, she describes Ronald Reagan as a deep thinker. Someone who wrote his own speeches, delivered his own messages and negotiated his own deals. He spent little time worrying about what others thought of him…other than Nancy his wife. Reagan became known as the Great Communicator and for good reason. He said what he meant, didn’t mince words, and had an unshakable conviction when he spoke. Being an effective communicator is important in all areas of life whether personal or professional. From President Reagan I learned the importance of having a clear, strong message of my own, that must be delivered with confidence and conviction.
  2. Bill George. The former CEO of Medtronic, has made the concept of authenticity the focus of two great books: Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value, and True North. He stresses the importance of being authentic, taking action in a way that conveys complete alignment with your values and your beliefs. When people begin to operate outside of their area of “authenticity”, those around them see and feel this disconnect, thus resulting in the creation of distrust. When your actions are not in alignment with your inner values an internal conflict begins to emerge and ultimately leads to failure personally and professionally.
  3. Joseph A. DeRosa – my dad. I understand that you don’t know my father. No books have been written about him, nor has he been profiled in any business publications or newspapers. Yet the lessons he continues to teach me as a man are consistent with those he instilled in me as a boy. From my father I learned the importance of integrity and character – knowing what the right thing is to do and doing it…no matter what. I learned that accountability is something to seek and cherish, not something to hide from. His teaching style is by example. He worked several jobs to raise his family and taught me the importance of working hard and being the best at what you do. Finally, the most important lesson I learned from my dad is to place family first, for at the end of the day, when the work is done or dissolved, your family will always be there to provide comfort, support, and love.

When I look at the leadership lessons I treasure most, I realize just how intertwined they are. Without strong character and self-awareness, it’s impossible to operate in an authentic way. And if you don’t emulate authenticity, no matter what your message is, it will not be believed or trusted. As the late Stephen Covey said, “Seek first to understand before being understood.” To place the needs and concerns of others, in front of your own, will demonstrate your desire to first understand.  Once people can FEEL your authenticity and trust develops, they will follow you even if only to catch a glimpse of where you’re going.

In the  coming weeks I will be posting a blog on Leadership Lessons from 3 Influential Women.  There is so much to be learned from all people, men and women, that I wanted to be sure I shared both sides.  Great leaders have a combination of many different traits, talents, and attributes, all of which have been developed over the years with multiple influences.

P-cubed = Profit

Profit

For-profit companies operate with a simple goal – make a profit.  Profits are the essence of life and growth for all businesses.  Investments in talent, innovation, and new markets are all dependent upon a company’s ability to generate profits with which they can invest back into its business.  In the absence of profits, some businesses start on a path to leverage…borrowing today on a bet that tomorrow will be better.  Many times this approach leads to disaster.

There are three (3) critical factors in driving profits for any business.  And while there may be thousands of criteria that enter into a profit equation, just about all of them can be bucketed into these three categories.

  1. People.  The first ingredient required to drive profit.  People generate the ideas, relationships, and creative thinking that’s required to grow a company.  Great leaders know how to identify the right people to introduce to their specific work culture.  Many companies make the mistake of seeking only the “top performers” from their competitors.  Unfortunately this approach often leads to failure and disappointment.  Why?  Because leaders often lose sight of the fact that beyond the person, they also need two other factors to succeed…a plan and process, and herein lies the problem.  No two companies operate the same, have the same plan, or the same process/infrastructure to execute with.  Therefore what makes someone successful in one environment does not equate to success in a different environment.
  2. Plan.  As the saying goes, “failing to plan, is planning to fail”.  Successful companies have a plan including a 12 month, 3 year and 5 year plan.  They know that the further they look into the future, the more uncertainty the plan takes on – but that doesn’t stop them from the exercise of planning.  The biggest benefit of having a plan is not always the plan itself but what was learned and gained from the act of planning.  Deeper insights, critical understandings, and lessons learned, are all positive outputs from a detailed planning process.  Once the plan is made it MUST be communicated or cascaded throughout the organization.  Without clear line of sight, employees are left with an empty feeling that results in a numbing effect taking ahold of the business.  This leads to morale issues, turnover, and a general decrease in quality of products produced or service delivered.
  3. Process.  The process factor is one of the most overlooked factors in generating profits.  Existing companies feel that they know what they do, and start-ups feel like they’ll figure it out along the way.  Both are wrong.  Processes must be documented, monitored, measured and improved.  The Toyota Production System, otherwise known as TPS, pioneered the Kaizen – a philosophy that embraces continued improvement.  All processes can be improved or enhanced.  To drive improvements requires a deep understanding of your people (internal and external) and your plans.  A great book that illustrates this philosophy is The Toyota Way by Jeffrey Liker.

Focus on these three factors and they will help you build a better road map to achieving stronger profits.  But remember this…it all starts with having the right people.  As Herb Brooks, the coach of the 1980 U.S. Men’s Hockey team said when putting his team together, “I’m not looking for the best players, I’m looking for the right players.”  This quote validates the importance of knowing your culture, how it operates, what its strengths and weaknesses are, and what type of individual would thrive within it.  It all comes down to people…and it starts with you.

A Lesson in EQ – Move To Improve

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Most people evolve into a leadership role.  Sure, we’ve all heard people talk about a specific person as a “natural born leader”, but few are. Often times, someone rises to the position of leader as a result of their accomplishments as an individual contributor.  Think about it.  What was the reason for your first promotion?  Or your second?  Most likely you were promoted because you exceeded a specific sales number, or made an improvement that saved the company a great deal of money.  Early in your career, those are the reasons you achieve recognition and promotions.

Many companies invest heavily in leadership development.  They use tests to identify potential leaders, teach classes in leadership lessons and ideals, and even rank employees in the ever popular “Org & Talent Review”.  And while each of these components serves a very specific purpose in building the leadership ranks within a company, it’s the time and development spent in the areas of EQ that tend to be overlooked.

EQ, or emotional quotient, is the measure of a persons ability to deal with others in a sensitive and empathetic way.  People with high EQ have a great sense of self-awareness and know the importance of treating people with respect and dignity regardless of position, title, etc. A report published by Glowan Consulting Group, looked at the correlation between leaders with high EQ versus IQ, or cognitive intelligence.  The report found that those leaders with a high level of EQ generated results ranging from 10 – 24% better than those with low EQ.

John Mackey, CEO of Whole Foods said, “For leadership positions, emotional intelligence is more important than cognitive intelligence.”  Having the ability to respond to one’s own emotions, and those of others, is the key differentiator between those that manage people versus great leaders of people.

Leaders that have a difficult time connecting with others in high stress environments should look to improve their EQ.  As the pace of change rages on, and companies are faced with changing strategies, workforces, and philosophies, it is critical that its leaders understand how to connect with people in order to affect positive change.

Daniel Goleman brought EQ to the forefront in his 1995 book, Emotional Intelligence.  I highly recommend this book for any leader looking to gain a better understanding, as well as, improvement of their own EQ level.  Your ability to connect with those around you in an authentic and genuine way will create the trust and bond required to help you – the leader – provide direction and guidance both in good and bad times.  An improvement in your EQ level will drive increases in your individual performance, as well as, producing better results across the team you lead.  The reason?  People don’t care how much you know until they know how much you care.

Buyer Personas. The Key To Sustained Growth.

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In my prior blog, 3 Philosophies of a Great Company, I wrote about the importance of knowing your customer.  We’ve all heard this expression before but many companies still struggle with the essence and simplicity of its meaning.  Knowing your customer involves having a thirst for knowledge, the ability to confront reality, and dedicated resources including time and dollars.  Those that embrace this strategic component are those that excel and succeed.

Using a buyer persona process is a great way to get to know your customer.   Companies like Sirius Decisions and HubSpot have invested countless resources in the development of creating a buyer persona process that drives new customer growth while improving the retention rate of existing customers.  When used effectively, buyer personas can become a powerful P&L management tool.  How?  Buyer Personas help to:

  1. Improve target marketing by aligning your product or service to the right audience.  If your product is geared toward SMB (Small-Medium-Business) or enterprise-size companies, your buyer personas will provide critical insights into the buyer behaviors of these specific segments.  Having a deep confidence in knowing your customer helps to avoid wasting precious time, and money, spent marketing to the wrong prospect group.
  2. Provide granular detail around how your prospective buyer thinks and gathers information.  How do they make their buying decision?  This information helps improve your ROI on marketing investments by knowing what to say, where to say it, how often to communicate your message, etc.  Keep in mind that each business could have more than one buyer persona.  A CEO, CFO, Office Manager, General Manager, all make decisions differently.  Why?  Because each have their own perspective from which they process information.  This becomes extremely important when determining where each of these individuals go to find information.  Sirius Decisions concept of “watering holes” illustrates the importance of knowing where to place your message – where your customers and prospects spend their time.
  3. Convert your value proposition into a high-impact message.  The strength of your value proposition is dependent upon how well your message aligns to the needs of your customer or prospective buyer.  You cannot succeed if your value proposition is disconnected from the buyers needs.  Therefore, having a completed buyer persona allows you to take your value proposition and craft it into a specific message that addresses the needs or pain points of that buyer.  Being able to demonstrate to the buyer your understanding of their needs, builds their confidence and, ultimately leads to their conviction to select you as their provider of service.

Think about the companies that really seem to know what the customer wants.  Companies like Apple, Toyota, Cadillac, Samsung, Proctor & Gamble, and Victoria’s Secret are all companies that have taken a buyer persona approach to growing their market share.  They invest heavily in knowing their customer.  They understand that what worked yesterday may not work today given internal or external influences to their market.  The key is change.  Seek it, drive it, embrace it, demand it.  Change is what drives innovation and innovation, if done correctly, drives growth.

3 Philosophies of a Great Company

Greatness-vs.-Mediocrity

You work for a great company, right?  You know what your customers want.  Your product, your service, your company has got it.  You’re the best out there and you know it.  You’ve built things from the ground up or possibly revamped an existing infrastructure to improve your sales effectiveness and efficiency.  You installed a sales CRM tool, you’re looking at a marketing automation system, and you just bought a prospect list that will help you focus on where to fish.  You’re ready.  You’re set…and off you go!

But wait.  You’ve spent months focused only on the internal aspects of your company.  You’ve developed plans based upon a certain set of assumptions, all of which, are best guesses based upon what you know.  But herein lies the problem, it’s not what you know that presents the risk of failure…it’s what you don’t know.  And  right now you’re missing the biggest piece of your success equation – what does the customer want and how do they want it?

Most companies still operate from an inside-out viewpoint.  What do we sell?  Why are we the best?  What makes us different?  Why is our product or process better?  This is why we’re special.  This is why you’ll love our solution.  And on, and on it goes.

So what separates average companies from star performers?  While there are many things that go into creating a great company I’d offer the following three philosophies as perhaps the most critical:

  1. Outside-in view.   Placing the buyers needs first is crucial to a company’s growth and success.  This requires dedicating time and resources to studying and understanding your prospective buyer.   Sirius Decisions, an expert in the integration of sales and marketing, developed a proven process that companies can use to identify and define their various buyer personas.  These personas provide deep insight into the buyer, who they are, how they operate, where they go to gather information, and their preferred methods of absorbing information.  Without this deep understanding of your prospective buyer, your sales and marketing efforts will continue to produce disappointing results.
  2. Thirst for knowledge.  Great companies are also learning companies.  They apply different techniques to deepen their awareness and familiarity of the marketplace.  Leadership gurus like Noel Tichy have introduced various methods for gaining and using this knowledge, inside of large organizations, that can also be applied to small businesses.  Tichy’s Virtuous Teaching Cycle, introduced in his book The Leadership Cycle, provides clear steps for how to gather, assimilate, and cascade knowledge throughout an organization.  Companies that commit to this quest for knowledge are better prepared to take the lead when the opportunity arises.
  3. Commitment to talent.  It’s no wonder that the companies on the list of Fortune’s Great Places to Work have some of the strongest performance results around.  For years, we have read the studies and seen the data that prove a direct correlation between employee satisfaction and high performance.  Today, we see companies like HubSpot, Zappos, and Square2Marketing providing benefits to employees ranging from “unlimited vacation time” to “pet friendly work places”.  Companies are beginning to see the benefits of providing more control and accountability to their employees.  Brian Halligan, HubSpot’s CEO said, “we hire very smart people who focus on the growth of our company and we expect them to use common sense”, and they have done just that since this HubSpot’s unlimited vacation policy was introduced in January 2010.