Executive Coaching – Another Growth Strategy for Singapore Companies?

Not too long ago, I read a series of discussions on social media among Singapore business owners on the benefits, or the lack of benefits, of executive coaching.  The discussion seemed to be more on the lack of benefits, with some Singapore entrepreneurs even likening executive coaches to frauds at worst, or at best, only skilled in ‘theory’.  As an executive coach representing a business strategy coaching organisation that has helped more than 40 000 companies across the world, I found this discussion very interesting and of course, insightful into the mindset of the Singapore business owner.

Is it true that executive coaching yields no benefit to the Singaporean entrepreneur?

As I followed the discussion, I began to see certain misconceptions held by the business community here, and how these misunderstanding could actually prevent Singapore businesses from unleashing their full potential.

Let me explain why.

Imagine asking an Olympian or a top athlete whether he or she needs a coach? What do you think his or her answer would be? Would he or she say that a coach is only for those who ‘haven’t made it to the top’?

Andre Agassi, a world tennis champion supposedly said that no one ever achieves peak performance without a coach. Sports stars like Tiger Woods and Michael Phelps all have coaches.

What about business champions? Steve Jobs, Bill Gates, Jeff Bezos and Eric Schmidt all have a coach.  An article in Forbes reported that executive coaching grew from a little known industry to a US$1B one over the last twenty years with the majority of the bill being foot by giants like General Electric, Google, Goldman Sachs and other world beaters. In the past, these organisations considered coaching as a performance enhancement measure for failing employees, but now, coaching is the key to helping key executives to lead and win in a world that is increasingly competitive and complex.

And the benefits are evident – a study by PriceWaterhouseCoopers and the Association Resource Center puts the ROI on executive coaching at an average of 7x, with 25% of respondents saying that the returns could go as high as 10-45x the investment.

The main reason given why executive coaching has risen in prominence among the world beaters is this – the world has become increasingly competitive and complex. And leaders need to change in order to succeed in the ‘new world’. If executive coaching is a key driver of business growth among the commercial giants of the world, could this also be the key to help Singaporean companies breakthrough and scale?

To quote one of my clients from the Philippines, a CEO of a company that I am working with to push through the $1B mark: she said that if we had met 5 years ago, she probably would not have seen the importance of engaging an executive coach for her and the management team, but much has changed in the last 5 years in the Philippines. They no longer compete against local companies but also international ones. And to beat the competition and grow, she thinks it is time to call in the help of a coach to effect lasting change down the ranks, flowing from the top.

So do the changes that affect these countries affect Singapore too? If the answer is yes, then perhaps executive coaching might be an effective tool to help Singapore companies to thrive in this complex environment.

So what is stopping this?

From my experience working with companies in Singapore and SEA, the main obstacle to engaging a coach is the misunderstanding of what a coach does. There are two main misconceptions. The first one is similar to the view held in the west twenty years ago – the coach is like a ‘tutor’.

And in and Asian society, who goes for tuition?

Thus this view tends to limit the role of a coach to one of a trainer. Everybody in Asia wants to learn, that is why they have no qualms going for courses, or hiring a coach to ‘teach’. But few like to be coached towards changing. This is because it implies that they are doing something wrong, and need a coach to correct them and the way they run their business. To illustrate this difference in mindset, two companies I worked with, an Australian and a British, both based in Singapore, were upfront that they want to be coached, not trained. They want continuous engagement e.g. monthly or quarterly follow-ups to make sure the executive team is following the process. They even gave the coach permission to ask direct and harsh questions. But the converse is usually true for Asian companies – they want to be trained, taught the latest techniques but not held accountable over a period of time. Also, the C suites in Asian companies tend to see coaching as something beneath them – it’s for their managers. Thus, change is usually not driven from the top. Whereas there is no such stigma attached with western companies. Usually, it will be the CEO that is at the forefront of the work with the coach and it flows down from there.

This difference in perceiving coaching is why Asian companies usually do not engage a coach to coach, but to do the job of a trainer.

That’s why several of my clients short change themselves by putting a lot of emphasis on what I can teach their teams, but fall short on the coaching process.  In fact, it is the coaching that will bring lasting results to the team, not the initial teaching. After all, only 10% of learning takes place during training, 20% through interacting, but 70% happens through doing. And a coach’s highest effect is when he holds the team accountable for what they do.

What could be the cause of this mindset? One, it could be a misunderstanding between what   training and coaching is? Or a cultural confusion that blurs a tutor’s role with that of a coach.

Or worse, it could be a case of ego. Verne Harnish, world famous guru on business growth, observed after more than 30 years of helping companies to scale, says that the biggest obstacle to scaling up a business is a leader’s ego.

Another possible reason why coaching is not making its maximum impact here could be due to another misconception – Coaching is often confused with consulting. The fundamental difference is a consultant is an industry expert who provides you with an answer that you do not know while a coach is one who helps to uncover issues that hinder growth and co-develop a process with the executive to solve the problem.

In short, a consultant gives answers, a coach asks questions. A consultant finds the answers for you, while a coach walks you towards the answers. The first focuses on the end result only – the answers, while the second focuses on the process you take to find the answers.

Both have their uses for different circumstances. One is about finding answers to complex questions; the other is about growing towards results.

Thus, it is common to hear business leaders say ‘what can the coach tell me about my business since I have more years, more achievements than anyone in the industry’? And this is not an idle boast, since many business leaders are deserving of their success. But that was never the coach’s intention or role in the first place. The coach’s role is to help the executive and his team to go through a process of change to become more effective in scaling, rather than to answer industry specific problems.

One of my clients understood this. Despite being the third generation leader of a hundred year old business that yields billions of dollars in revenue, he initiated a process of change from top down because he knew that the previous ways of running the business, of developing strategy and developing people had to change.  His family business spans seven industries, and I worked with the management teams across these seven industries to implement a process of growth and change, of re-looking at their businesses in a new way for a new phase of growth. As coach, I help to drive a process across the company. I don’t provide industry specific answers.

So how can Singapore company leaders benefit from coaching?

The important thing is to find the right coach.  There are literally hundreds of thousands of coaches that can be found through Google. So the first thing is to know what you want to achieve through coaching. Is it personal leadership change, business strategy change, business processes change, people development change etc?

Every coach may be good in their respective areas, but they won’t be good in everything. The first step is to know what you want to deal with; it will make it easier for your coach and you to lay out expectations.

Next is to see what the coach brings to the table. Here, another common misconception interferes. A lot of people I spoke to do not know the difference between a coach and a mentor. In a nutshell, a mentor has experience, a coach has a method. If you are looking for a guide who has been there, and done that to guide you, you are looking for a mentor. If you are looking for a system or a process that will bring results through various levels in your organisation, then you are looking for a coach.

So the next step after knowing what you want, is to ask if a coach or a mentor serves your needs better. If it is a coach you need, then what methodology does the coach use? Is it proven? Has the method been used successfully across different industries, different countries, different cultures to bring change and results? For example, the 4 Decisions Framework coaching process developed by Verne Harnish has helped more than 40 000 companies across the world in 6 continents. This is what I mean by a system or methodology that stands the test of circumstances and culture.

And the last, but most important question is – how willing are you to change? Coaching is a process of change, not a one-off impartation of knowledge. Find a coach that you are comfortable to work with, with a program you are willing to commit to. A coach’s job is to ask the uncomfortable questions and hold you accountable to implement change. The extent of your success, and the coach’s, is dependent on the degree one is willing to work at change.

As Singapore’s businesses face increasing competition in an increasingly complex environment, perhaps executive coaching could be the answer to their growth woes. After all if it helped the world beaters like General Electric and Goldman Sachs maintain their edge, it should help our business leaders become world beaters too.PG Presskit NOV FLA 2013

How to Identify a Company that Has Potential to Scale?

In Feb 2016, MIT released a report on the state of entrepreneurship and its impact on the US economy. The report is titled A New View of the Skew: A Quantitative Assessment of the Quality of American Entrepreneurship. In a nutshell, the study raised a very important point for policy makers to note:

Quantitative measurement of entrepreneurship (no of start-ups per country) tells us nothing about the future of an economy because it is not start-ups but scale ups that matter.

Start-ups are too diverse in nature, and hence hard to pin ‘how to help’ whereas scale ups have certain characteristics that can be identified and to indicate potential.

Thus, the key question shifts to this – how to identify ‘potential’ in a company?

I believe potential can be spotted in two areas. One is in the mindset of the owners, and the other is in the ‘framework’ of the company.

Mindset

I will address this question with a point raised in this report as well as from my view as a business coach with Gazelles International, an organisation at the forefront of working with Scale Ups across the world. Gazelles International is founded by Verne Harnish, one of the best minds on how to scale a business. Harnish is also the best-selling author of the books Mastering the Rockefeller Habits and Scaling Up, two award winning business books that are the culmination of his 34 years of experience helping businesses to scale.

The first point I want to address is the mindset of the business owner and the management team. Harnish teaches in his masterclasses that in his years working with Scale Ups (companies who grow 20-30% a year, and who double their growth every 5 years approximately), he observed that the name of the company tells a lot about the intention of the founders. In other words, it reflects the mindset. This point is also brought up in the report by MIT as an indicator of potential – the name counts because there is more to a name than just words.

It signals intention.

One of my personal observations working with companies across Southeast Asia is this – to scale a company requires a business owner to think differently about his business – different from competitors, from culture, from industry. He or she will want to do something differently.

One key difference is how they approach the question of change. To scale up, businesses have to make changes. How disciplined are they in implementing changes is the key? How open are they to change? Most people will say they welcome change, citing clichés like ‘Change is the only constant’, but their approach to strategy and their implementation of things that are different from their usual practices tell us if they have the right mindset to scale. Maybe business leaders are willing to learn, but few are willing to change. Change means to adapt and implement.

In short, to manage change effectively requires discipline. Discipline in thinking and focus as well as in execution.

Framework

A way to determine this is to use the 4 Decisions Framework developed by Gazelles International as an indicator. Gazelles International has helped more than 2000 companies around the world to scale. The 4 Decisions Framework identifies 4 areas a company must do well in in order to scale. While not all companies will use the term ‘The 4 Decisions’, the characteristics identified in the 4 Decisions serves as a good indicator of whether a company has the right foundation for higher growth.

The 4 areas are:

Strategy – All businesses not only need a clear strategy that differentiates, but it must also be positioned to break industry bottlenecks to develop an overwhelming advantage over its competition. As Harnish puts it, a company who has the potential to scale is a company who deals with a ‘big-ass’ problem with a ‘kick-ass’ solution, with people who are ‘smart-ass’.  In other words, Scale Ups have people who think where the competition doesn’t think.

As John Rockefeller said, ‘Competition is a sin.’

The foundation of a good strategy is the right mindset – to not accept industry constraints but to constantly find those problems that competition neglects or resign themselves to accept, and solve them. Besides having this mindset to find the bottleneck, does the company have the tools and skills to find and solve these problems? If they do, the company does not get stuck in the traffic jam of competition and be resigned to accept marginal growth.

I call this the difference between a Keep-Up and a Scale-Up. Scale-Ups run towards the industry’s constraints while Keep-Ups run away from them.

Thus, to identify if a company can be a scale up, one needs to examine this company’s mindset towards strategy – is strategy to differentiate from competition or merely to keep up?

The next question is whether they invest time in delivering their strategic differentiation. Strategy can be simple, but the execution of strategy is time consuming and requires discipline.

What will they do when they find a constraint in the industry? Do they have the time, patience and skills to break it?

Whether a company is prepared to invest time and resources into strategy will tell if it has the potential to be a long-term, sustainable Scale-Up.

In a nutshell: Scale Up potentials see industry problems differently from their competitors.

People – No company ever scales without good people.

Every business should examine if they are held under the tyranny of the organisational chart. We do this by applying what Jim Collins teaches: asking if we have the right people, on the right seats, doing the right things.

What does this mean?

It means that everybody is clearly aligned to an outcome that is significant to the business, with the right action KPIs assigned, and that person is clearly the best person to fulfil those actions and deliver those results; in other words, fit people to actions that can be taken rather than fit people into roles. Companies traditionally fit CVs to roles, but we need to move beyond that to fit people i.e. unique strengths, talents and interests to critical actions and outcomes.

Most businesses I know do not have the patience, or more importantly, the mindset to ask themselves honestly if everyone they have is that ‘right’ person on that ‘right’ seat doing that ‘right’ thing? A person who fulfils these 3 criteria is an ‘A’ player; someone who is a natural in creating value in that given capacity.

This process is tedious and requires a different way of looking at staffing and recruitment. But companies who invest in this process to find ‘A’ players gain 3 times the value of a person who is merely ‘staffing’ the role.

Kip Tindell, CEO of The Container Store believes that only ‘A’ players should be hired. Everyone in his company from the store assistant to the management team is carefully selected through a rigorous process. For example, even if you are a junior front line staff, you go through as many as 9 interviews. The Container Store, as Kip says, “sells empty spaces in boxes”. Yet it is has grown huge enough to be listed in the NYSE. For sixteen years, The Container Store was consistently voted in the Fortune’s List of ‘100 Best Places to Work in the USA.

Their secret, according to the company’s president – hire only ‘A’ players. The Right Person, on the Right Seat, doing the Right Thing.

Another aspect of having the right people in the business is to have people who are continuously learning. Here, Harnish starts at the top; he observed that Scale Ups usually have a leadership team that never stops learning. He calls them ‘Rabid learners’. The leaders are not only industry experts in their own right, but they learn and learn, and in doing so, encourage their colleagues to grow and learn. This is even more critical in the 21st Century where things are changing faster than before. Businesses can be made obsolete overnight, so learning is the only way to keep scaling.

Are you intentionally building a system with the 4 ‘Rs’ – Right People, Right Seats, Right things and Rabid Learners?

A company that has the right people policy is poised to scale up.

In a nutshell: Scale Ups are not afraid to invest a lot of time in finding the right people to put on the right seats, to do the right things.

Cash –  Cash flow is the oxygen of all businesses. Cut it and a business, no matter how good, dies.

Do you have a strategy to ensure that cash flow is smooth? Most businesses I know accept the payment terms of their industry as something cast in stone.

They often complain, ‘But the industry is like that.’

Do you have to accept that?

Can you be intentional about getting a better cash flow than your competition? Business strategy, by definition, is the intention to achieve differentiation. So we need to be intentional about getting better payment terms than the industry standard if we want an advantage over our competitors in this area. One way to do this to understand and shorten your Cash Conversion Cycle. Which part of the cycle can you work on to shorten it?

Besides a cash flow strategy, it is also important to have a money value strategy. What this means is to understand whether you are getting the best value out of your business model. Is your business model building company value, or is it merely creating profits? If there is a hierarchy of revenue, is your revenue stream giving your company it’s the highest valuation? Thus, for a business to scale, it must have a smooth cash flow, as well as a money value strategy to ensure that the business can grow smoothly and achieve its highest value.

In a nutshell: Scale Ups constantly find ways to improve cash flow, and constantly question and improve their business model.

Execution – The last, but not the least, is how a company executes its strategy. Be it business strategy, people strategy or cash strategy, it all hinges on Execution to get things done systematically. Hence I consider this the most important decision amongst the Four Decisions.

In Gazelles, we put in place three things that help keep a company on track. They are Priorities, Metrics and the Rhythm. These three things form the ‘Execution Culture’. Do you have a great execution culture? Or is execution haphazard and frantic? Are meetings more a waste of time or a time when things get done?

The first step to develop a great execution culture is to understand the differences between a task and a priority in order to develop focus.

Tasks are often mistaken for priorities. What are priorities? Priorities differ from tasks by having a direct leverage on results. Which action has the biggest impact on results? Which action needs to be completed before other actions can take place? When we fire-fight, we are focusing on tasks. When tasks are not differentiated from priorities, businesses become stuck on a treadmill – they work very hard to keep up but they don’t scale.

The Rhythm is like the heartbeat of the company. Irregular heartbeat can cause death in humans, so it is the same for companies. The Rhythm keeps the organisation focused on priorities that will drive the strategy of the company. Without a rhythm, most companies get lost in the day-to-day fire fighting.

How do you set a Rhythm in your business that ensures that strategic priorities are executed and accounted for?

Do you have a system to warn you in advance if things are not going well so that you can take corrective action?

There are some companies who have outstanding strategy, the result of a lot of time and effort put in, only to fail because it was not executed well.

Coming back to the point that strategy is differentiation, if we want to achieve a different result from our competitors, then we need to do things differently. We need to look at Execution differently.

How a company executes strategy is a sign of whether it will scale up.

In a nutshell: Scale Ups invest time to set Rhythms in the business. They don’t allow things to happen by chance. Nor do they miss opportunities because they got too busy with day-to-day things.

Conclusion

There are many ways to determine a company’s potential. Some people look at market size, demographics, macroeconomics and trends etc, but all these are meaningless unless a company is poised to seize the opportunity. There is only so far a business can grow by being at the right place at the right time, or by the entrepreneurial guts of the founders. A business’s potential should be determined by whether the company has the right mindset and skill set towards growth.

In other words, do they have the right approach to scaling up? Their mindset and actions will tell. While they might not have everything laid out in a nice package as explained in this article because business is always messy, but intention is always seen in actions. Thus, as long as a business owner or leader demonstrates an intention to build the characteristics of a scale up in his business, there will be potential for higher growth.

 

 

 

What’s the ‘POP’ in your corn? 3 Things you must examine in your strategy if you want to play to win!

How does popcorn pop? Ancient Native American Indians believed that a spirit lives in every kernel of corn. When heated, the spirit gets angry and throws a fit. As a result, the corn pops! However, we now know that the popcorn phenomenon occurs because water trapped in the kernel turns to steam when heated, and like a steam engine, it pushes against the soft kernel, causing it to burst open with a ‘pop’.

Last week, at a business strategy course, I heard a story of a man who turned his popcorn business around by capitalizing on this little secret. This man realized that selling popcorn was a business that did not have much competitive edge. So how do you differentiate yourself when your product is a mere commodity that everyone sells? He started to ask himself ‘who buys popcorns and why?’

His answer – families with young children and the reason they buy is to watch the popcorn go ‘pop’.

So he kinda figured out that the unique selling point of pop corn is the ‘POP’. So he asked himself the next question, how do I make my popcorns pop louder?

After studying and discovering how popcorns explode, he found out that the amount of pop was tied to how much water the kernel had; it will determine how much steam it will produce. He tinkered with various ideas how to increase the amount of water in each kernel, until he was able to produce a type of packaging that allowed the right amount of moisture to be maintained in storage. This allowed him to sell popcorn that gave a bigger POP! Now, his popcorn was differentiated from his competitors in the area that mattered to the client – the POP!

So what can we learn from this story? As the year comes to an end and business planning cycles begin for the next year, what are some areas you must consider in your planning? From this story, there are three things:

First – how well do you know your core customer? Do you know why they buy what they buy? Can you articulate in one sentence who is your core customer, and what problem are you really solving for them? Have you differentiated their needs, fears and their wants? Many businesses have a vague idea about this. And from my experience working with companies worth a few million to a few billion, they usually have little time invested in dissecting this question.

Secondly – Do you know in particular, why they buy from you, and not from your competitor? What makes you different? How does your product or service address your customer’s needs and fears? In a world where everything is becoming more and more commoditized, the need to stand out is critical. The only problem is this – many times, our customers want to ‘commoditize’ us because they want it cheap, but is that the game you want to play? Too many businesses get sucked into this whirlpool of letting your customers, and sometimes your competitors, decide what your business should be. Identify three reasons why people buy from you and focus on making these three things better!

Thirdly – What is the core competency you need that will help you make that special difference? The common thinking is to focus on correcting weaknesses or plugging gaps. However this approach will not help you to scale up. It may solve your problems but it will not help you grow exponentially. Take a step back this planning session and ask this question,

Many of my clients start off saying they don’t know what makes them different; they just try to meet industry norms or standards. Or they list an industry standard as a competency e.g. ‘We have ISO XXXX and this is our edge’.  However, they miss the point that everyone has the same competency as them.

But when we push them harder and help them ask the right questions, they discover that every business has a core competency they can leverage. It is just a matter of finding out, and putting a strategy to enhance it. “What makes us special? What makes us unique in meeting our customers’ needs? What makes it hard for our competitors to copy? These are questions to explore in your planning.

Too many year-end planning sessions go to waste because business leaders ask the wrong questions. Wrong questions lead to the wrong answers, and wrong answers lead to bad strategy. While business may still grow due to various factors, we want to not just grow but to grow continuously. These three questions, when answered well, will lead you to not just profitability but profit-ability – the ability to continuously grow your profits. Happy planning!

Purpose Driven Sales

I’m increasingly intrigued by the impact of purpose on business performance, especially sales performance. Last month, I had the chance to speak with two of my clients, who have been adopting Scaling Up for the last nine months, and both reported a breakthrough in sales after a period of stagnation. Their businesses were not growing, that’s why they came to attend Scaling Up to find an answer. One of them grew 25% in nine months after hitting a plateau. After being in business for seven years; her business stopped growing after the fifth.

So I can’t help but ask – What did you do to turbo-charge your sales?

Both of them, speaking to me on separate occasions, told me the same thing: They chose to focus on Core Purpose.

Both of them spent time to clarify their purpose in doing their business, focusing on answering the questions:

  1. Why did they do this business?
  2. How does this business benefit the client in a way money cannot buy?
  3. Will our customers miss us if we no longer exist? Why?

Once they gained clarity on these three questions, they make every effort to talk about it during their weekly sales meeting. One of the business owners told me she kicks off her sales meeting by sharing how big an impact they are making on their client’s life, and why they cannot do this wrongly, or with the wrong motivations. She shifted the focus from numbers to purpose. They start talking about numbers only after everybody had reflected on how they are doing in terms of fulfilling their core purpose.

And they saw sales increase!

How did this happen? Intrigued, I did more research on this, and found out that studies have shown that when people believe that their work will truly make someone else’s life better, performance goes up by an average of 28%. Adam Grant, Wharton Business School’s professor was talking about this in Linkedin, when he interviewed Jack Welch on why it is important for leaders to provide meaning to the work done by their employees. You can read about it in Jack Welch’s new book The Real-Life MBA. Giving meaning to employees is all the more important, given that world-wide employee engagement towards their work is only at a measly 13%.

So how do you find purpose for your business beyond making money?

One of my coaching clients shared how he found it so hard to relocate to Singapore. One of his biggest problems – finding a home. He then started a company helping people find the right property. The lesson – He could identify with his customer’s pain. He still thinks about it, and constantly asks himself how to lessen that pain. As his business grew, it became more complex, but he did not lose sight of why he started the company – to lessen the pain of relocation as he himself experienced. As a result, they grew beyond the $100m mark and now operate across SEA. Not too bad for a company younger than 10 years.

Selling with the purpose of solving someone’s pain is value creation. Customers pay for value, not for how much work you do. Instilling a purpose-driven mindset in your company will therefore drive value-creation!

So how do you help your staff develop meaning in their work?

  1. Talk about the problems you are solving for your customers. Too many companies talk about how many customers they need without talking about WHY someone should become their customers.
  2. Re-look at how you sell. You can see this in how company proposals are structured – company profile, intro, board member faces etc dominate the bulk of it.

Who cares?

Solutions come after that, and that’s what the customer cares about. Why do you put the part that matters most to the customers last?

  1. Spend time understanding your core customers’ needs and fears, and focus on how to solve them. Demographics will only tell us so much – who will buy, but does not tell us why they will buy. The WHY is the most important question. You need to answer it.
  1. And lastly, develop a compelling long-term goal couch NOT in financial terms e.g. be a $1 billion company in 10 years, but in terms of how much benefit to your core customer. Which do you think engages people more – $1 billion dollars in 10 years or 1 000 000 lives transformed in 10 years? Talk about this big goal frequently and link your employees’ contribution to it. This will motivate them more than money, as most humans want to be intrinsically motivated.

Do you find your business stagnating, or wondering how performance can be better? Perhaps it is time to seriously consider what drives your business.

A tale of two airlines: How Singapore companies can touch customers Hearts

In a highly competitive environment, how do you win raving fans for your business? How do you turn your detractors to your supporters? if you can do this, your business has an edge. Read about it in my latest article first published on the Singapore Business Review on:

Singaporeans have always complained about service providers. Why is it so? Is it because service is really bad, or are companies doing their best, but just not being able to meet their customers’ needs? Granted, there will always be customers who are unreasonable, but what about the bulk of people out there who just want to feel valued and get value for their money? Are they unreasonable as well to ask to be cherished and to get value for their money?

The term ‘value for money’ is contentious. How do you measure this? Unfortunately, the ‘real’ value of a business proportion is often revealed when a ‘crisis’ occurs. While this article is not a scholarly piece on customer service, it is an observation of a recent case where I believe a complaint could be turned into an opportunity to build raving fans by proving that the value of their product is beyond what money can buy. That is the assurance that the vendor can truly meet the needs and fears of the client, not just the wants. However, unfortunately from this instance, we can see that the company was only interested to meet the wants, which is the product they paid for, versus the needs and fears of the customer. In other words, the company was not selling what money could not buy.

As a business coach, I like to ask my clients this question:

“What is your client buying from you that money cannot buy?”

Are you selling a budget air ticket? Or are you selling convenience and happy times for family and friends? Are you fulfilling a transaction, or are you building a relationship? While safety is important, I excluded it from this discussion because it is a must for this industry.

Recently, a couple of budget flights from a Singapore based airline were delayed more than 20 hours, and passengers complaint that little was done to make up for their inconveniences. Even senior citizens and little children were not given assistance their age required. The delay was so bad that some passengers were even told to go home. While I am not going to discuss the reasons for these incidents or company policies, I will look at how their response to complaints revealed that they did not have their core customer’s needs and fears in mind, and therefore did not know what their customers were really buying from them.

After the furore of the incident went viral on social media, which some passengers described as almost like a riot, the budget airline first explained that the reason for the flight delay was due to safety. I won’t fault them for that because safety is paramount, and I would rather be late than not arriving at all. What happened later, according to the people affected, was a public relations disaster, even though the CEO gave a public apology.

What I find strange was the CEO’s need to remind his customers that they bought a budget ticket, and therefore should not expect anything more than ‘getting from point A to B’. He even emphasized that this is the ‘understanding’ between buyer and seller when they transacted. While the whole letter and other correspondences from the CEO sounded really sincere, I wonder why he needed to remind passengers that Scoot is going beyond their promise to issue some vouchers as compensation. Do you think it makes your disgruntled customers grateful?

I find it puzzling why he needed to remind them of that – especially when they were hugely inconvenienced by his company’s poor handling of the matter. Legally he may be correct, but is playing the technicality game going to win you customers? The delay was so bad that passengers were even told to leave the airport and go home. Precious moments of having fun together with friends and families were lost. And these could not be replaced. Will people whose happiness got dashed by your poor service be convinced by your ‘legal correctness’? You can hide behind the ‘Buyers Beware’ clause, but it will not make you raving fans, which is the point of business.

In this case, the response of the company seemed to arise from the need to defend itself more than to assure the customer. In an argument with customers, especially one that was caused by your own mistakes, you almost never win because they contribute to your livelihood. And they have choices. What is worse, staff echoed the view that if you want better treatment when the airline messed up, passengers should buy a seat on a premium airline instead of a budget – and they had no qualms posting that on Facebook. This reveals condescension for those who are paying your salary. I wonder if internally, the corporate culture is one of contempt for their customers. To be honest, I was contemplating a trip to Taiwan next year on this airline with my children, three years and seven years old, but after this incident, I decided I will try other airlines. I shudder to think what they will say to me if such an incident happens and I have two young children stranded.

So I wonder why they felt a need to respond in this way.

Does it make customers feel better? Are you assuring them that you know what they are really buying from you – which is time with family and friends, convenience and happy memories? It seems that the airline just want to push a product to the customer without establishing a bond with them. When things don’t go well, too bad – fall back onto the T&Cs. This is why they will not have raving, loyal fans. If they want to keep things to just a monetary transaction then they will get the same level of loyalty from their customers. In highly competitive markets, this might not be a good idea. No amount of cute marketing will win you raving fans more than a wrong made right. Being ‘legally right’ certainly wins you no future business. Showing contempt is even worse.

So how should they have responded? A good case study would be Air Asia’s response to complaints that their flights are not safe for disabled passengers because disabled passengers had to be physically carried up by people to the plane. This caused the criticism that it is not safe, because the passenger could easily fall if the personnel carrying him lose his balance. Air Asia recognised that their customers’ need is not just for an air ticket – which anyone else can supply, but comfort, assurance and the timely access to loved ones and time with them. No one likes to have a potential holiday or a visit to family spoiled by an accident.  So instead of ‘defending ‘their lack of infrastructure to support disabled customers simply because they are a budget airline, Tony Fernandes, CEO of Air Asia, said,

“It is great to finally see that our disabled friends are able to fly with us more comfortably today with the assistance of the ambulifts and aisle wheelchairs. After understanding the needs of our disabled friends, we have also enhanced our booking system to enable everyone including our disabled friends to now enjoy low fares when they log into our website. As a low cost carrier, we acknowledge that there are certain limitations on our end with the services that we can offer but we will enhance our services and accessibility where possible and we hope to set the example for other LCCs to work towards an improved environment for our disabled guests in terms of enhanced amenities for greater mobility and comfort.”

He did not defend his business’s failings. Best of all, he did not claim that as a budget airline, he could not afford to purchase the equipment that made it possible for disabled people to enjoy what Air Asia was truly selling – convenience, time with and access to loved ones. His reply showed customers that Air Asia understands what really matters to the customer and is on their side despite their limitations.

Why did he do that? After all, disabled passengers only take up four seats per plane. Is it worth the cost of buying the special equipment for them? Some things are not about money. As Peter Drucker said, the sole purpose of business is to serve its customers. This is what it means to put customers ahead of money. And perhaps this is why Air Asia is an award-winning business despite being a budget airline.

What is your business selling that money cannot buy? Find that, emphasize it, inculcate that into your culture and you will make raving fans. When you face a complaint, see it as an opportunity to go beyond the T&Cs, and people will love you for it. When you have raving fans, business will not stop flowing.

The Half Way Point – Are You on track to your 2015 Goals?

All airplanes file flight plans before they take-off. The flight plans capture the destination, routes, alternative airports in case of emergency, critical information like aircraft capabilities, number of passengers and pilot details. The plans are important because when there is an emergency, such as when bad weather happens, alternatives are already thought through. Or if control tower loses contact with the plane, rescues know where to start looking. These plans enable constant monitoring between the plane and the control tower until it safely reaches its destination.

Would you fly in a plane without a flight plan?

Or would you trust a pilot who doesn’t check with the control tower regularly?

Now, are you running a business without a plan or a system to ensure that the plan is monitored?

As we come close to the half-year mark, I just conducted the second quarter review with our company. The review was timely as it helped us to re-focus on our long-term goals, and adjust our current plans to align again with the growth plans of our company. It was helpful that we had a full-day, off-site planning session to take us away from the day to day issues and focus on re-alignment.

Re-alignment – what a difficult thing to do.

It is difficult because it is so human to get caught up in the fire-fighting, and forget how the daily stuff we do is supposed to build towards the overall purpose and plan of the company.  So how do we hedge against the distractions of running a business and stay focus on the things that are important? We can do this by putting in place a Meeting Rhythm. Like music, the rhythm keeps things going smoothly. It is a disciplined process that needs to be instilled. The organisation’s rhythm is broken into the Annual, the Quarterly, the Monthly, the Weekly and the Daily, but since we are at the Quarterly mark, let’s focus on how to run a good quarterly review that captures the important things that need to be done. I will share how I ran the quarterly planning session below:

  1. Start with a review of the overarching trends – is your business goals and plans going against or along the prevailing macro trends? In the past, we look at trends only during annual planning sessions, but trends change so rapidly now I believe we should always keep an eye on it.
  2. Ask the question ‘Where do we play?’ This question is from the book Playing to Win by AG Lafely and Roger Martin. This is a critical question that will help you to refocus what are the current areas you are putting your bets on. Re-examine this in the light of the trends. Do you know where you should concentrate your business resources on? Or are you just shooting in the dark?
  3. Ask the question ‘How do we win (in where we play)?’ Again another question from the book Playing to Win. It is really a good book on strategy. How do we win examines if we have a few aces up our sleeves to help us get to where we want to go. Are these aces working? Are you using these aces? How do we do them better? If the aces are not working, do you have a Plan B?
  4. Is there an opportunity or threat you need to deal with in the next quarter? This opportunity or threat could pop up in ‘Where do we play’ and ‘How do we win?’ Or in the trends.
  5. Lastly, and very importantly, are we constantly working on core competencies that will enable us to win? What is one core competency we need to improve or build to answer points 2 and 3?

These 5 steps are akin to a pilot checking prevailing winds, weather conditions ahead of his flight path, and evaluating if his aircraft has the means to get to where it needs to go viz-a-viz the conditions he is facing. He not only reviews the conditions, he also makes alternative plans.

You are the captain of your company, and many people, your staff and your clients depend on you. Do you have a flight plan? Are you reviewing it frequently enough so that you don’t get any surprises? And if you are reviewing it, are you asking the right questions that will give you the best answers?

I hope this article helps. Have a fruitful planning for Q2!

Customer Service that Touches the Heart!

Yesterday, I took Philippines Airlines for the first time for a business trip to Manila from Singapore. What I saw touched my heart, and made me realize what customer service really is.

A baby was crying almost for an hour, and i could see the mother trying her best to calm the child down, to no avail. She looked frustrated and stressed, embarrassed. After serving the meals, an air stewardess  approached the mother and asked to hold the child. She soothed the child, patting him on his back and calmed him down. It took quite a long time, and the baby fell asleep, and she returned him to a grateful and relieved mother.

I was observing the entire episode because I had requested for a drink from the same air stewardess. When I asked her again, she apologized and quickly got it. But I did not blame her; instead, I was impressed with the service from the heart. The care she gave to a fussing child and the relief to the mother was heartfelt and genuine. I gladly waited for her to ease the child before asking for my drink again.

I have taken airlines that won multiple awards for service, but I have seen none like that – service from the heart. You can win awards for excellent service by training your staff, establishing service protocols etc etc and have excellent service from robotic airline staff. The danger of ‘over-proceduring’ service can get the job done efficiently but it does not touch the heart.

As I stepped off the plane, I could not help but wonder, how do we reproduce customer service like that?

Some key questions to ponder in the quest to find the answer:

1. Does your company have a great culture?

2. Does your company have the right values?

3. Does your company have the right people – not just the competent ones, not just those who care about what they do, but those who care for others?

4. Does your organisation know, or care, or even realizes that your customers are human beings with needs, fears and wants?

Philippines Airlines, kudos to you!

I will take this airline again.

Core Purpose – The Driving Force that Turns the Ship Around!

Ford-Factory-1903

As a Gazelles business growth coach, I have been helping my clients revisit their company’s core purpose at the start of every planning session. From local businesses to international ones, the question of Core Purpose has always been hazy.

What really is the use of articulating, remembering and living out the Core Purpose? Why is it important, and how should Core Purpose be positioned? At the start of each session, there will be cynicism, as key personnel wonder would Core Purpose be relegated to a poster on the wall, unremembered, unarticulated and totally irrelevant to business the way how Mission and Vision had been for them in the past?

So what exactly is Core Purpose and why is it important?

The founder of Gazelles, Verne Harnish, a.k.a the Growth Guy whose business tools and consulting have helped more than 40 000 companies around the world including some national brands like Benetton International (India), shared an article from Bloomberg on how Ford Motors was turned around from near bankruptcy to its former glory. Always looking for stories to inspire business owners to grow, Verne shared this article on his website www.scalingup.com. The article is called The Happiest Man in Detroit.

3 Things I Learnt from this Article

Purpose gives strength through hard times

Alan Mullaly, the CEO who turned Ford from the brink of bankruptcy to the most profitable auto-maker in US said he derived strength from the Core Purpose of Ford Motors, as envisioned by the founder Henry Ford. Every day, when he walks into the company building, he reads the Ford advertisement published in 1925:

“Opening the Highways to All Mankind”

In his own words, Mullaly said,

“I walk in here every morning [at 5:15 a.m.], and the light comes on, and I stop and read it—to serve all mankind. It makes me cry.”

(Source: Bloomberg Business, Feb 03, 2011, The Happiest Man in Detroit by Keith Naughton)

He believes that his job in Ford is to bring safe and efficient transport to EVERYONE.

Mullaly talks about it frequently. He memorizes it. He begins auto shows with the declaration of the core purpose of Ford. And this belief in the noble purpose of Ford gave him strength to turn Ford around despite the hard times. When we only look at financials and forget why we do what we do, it is easy to forget. Worst, if finances are the only reason we do what we do, we will never have the fortitude to survive a crisis. If we hire people who do not believe in our Core Purpose, they will leave when the company goes through a crisis. Only people who share your Core Purpose will stay and turn the ship around.

Purpose Gives Focus

Mullaly had to make some critical decisions – what should Ford focus on to turn the ship around? They had limited resources; at one time even surviving on a loan while burning $2 Billion a month. Again, the CEO went back to Ford’s purpose – what does it mean to bring safe and efficient transport to EVERYONE?

He returned to Ford’s roots to provide affordable and top-quality cars for the common man. Thus, he sold off the European luxury lines like Jaguar, Land Rover, Aston Martin and Volvo, and focused on beating Toyota and Volkswagen, two similar brands that targets the man-on-the-street by becoming more fuel-efficient, safer and more beautiful than these two competitors. When the Lehman Brothers crisis was over, Ford showrooms had cars that were nicer, better and more efficient than what car buyers remembered Ford had. By focusing on their Core Purpose, they went back to what they did best.

Purpose gives Clarity

The last thing I learnt from this article if the importance of clarity. In line with Ford’s purpose to bring transportation to EVERYONE, Mullaly asked himself where is the world’s largest population, and what do they need?

The answer – Asia and small cars.

Asians neither need nor idolize gas guzzlers. And Asia’s big population would generate enough demand to lift Ford’s profits. This belief drove him to get his designers to design cars that are good for all markets rather than just regional ones. This led to billions in savings as Ford plants got great economies of scale. He hired the right people to lead the Asia team, invested in plants in China, and set a target that 70% of Ford’s growth must come from Asia. Core Purpose helped him to see clearly where to put his resources to achieve the company’s financial as well as highest goals. Although late to the China market, he believes Ford can make an impact by having cars that are beautiful, high-quality and at the same time affordable – cars that have universal appeal to the man-on-the-street.

Conclusion

Last week, as we celebrated Chinese New Year in Singapore, our company, the Adam Khoo Group held our annual AGM. During our AGM, we reiterated our Core Purpose, which is to Inspire a Better World through Training.

What does it really mean?

For us this year, it means adopting a CSR project that will allow us to use our expertise as a training and education company to create a better world. We decided to work with a school in a slum in Batam, where students can’t even afford to pay $4 a month for school fees.

Why did the management team do this? For publicity, as most cynical people would label CSR? It is because Core Purpose, if not DELIBERATELY lived out, made alive and acted upon, will die crucified upon some poster hung on a wall, unremembered. When purpose is alive and well, it will be like a lighthouse pointing us in the right direction. At times of haze and fog, it will direct us safely through the storm. It reminds us who we are, and where we can be at our best.

Is your company clear about its core purpose? This is how to find out:

Does the Core Purpose give you clarity, focus and strength? Ask yourself, if your company stops its operations tomorrow, will your customers feel a sense of loss? Or will they shrug and go next door to your competitor and life goes on?

Does your company have a clearly defined and articulated Core Purpose?

Are you keeping your Core Purpose alive?

If you need help on how to craft a meaningful Core Purpose statement that will drive your company forward and inspire everyone through difficult times, grab the book Scaling Up or just join us at the upcoming Scaling Up MasterClass with Verne Harnish “The Growth Guru” Live! in Singapore on 27th April.

You can also visit www.scaling-up.sg for more details or contact the team at masterclass@akltg.com for more details.

Promises are Meant to be Kept – And Here is how Businesses can Do It!

Singtel_new_logo

Source: Mothership.sg

This week Singapore Telco Singtel announces the launch of a new logo. The new logo is part of a re-branding exercise, which includes a new Brand Promise:

Let’s make everyday better

According to their CEO, the re-branding exercise was launched to counter unhappy customers, with some even calling the telco ‘Stinktel’ to highlight their unhappiness over poor customer service. The new Brand Promise promises better service and more caring attention to the little things that conveys to the customer that Singtel cares.

Readers can read the details of the change in this article: https://sg.news.yahoo.com/singtel-just-unveiled-logo-looks-023544688.html

What however intrigues me is the use of the term ‘Brand Promise’ instead of ‘Branding’. And if Singtel is truly intent on fulfilling a Brand Promise rather than just build brand equity or create brand awareness, I applaud them. From the view of a business coach, Brand Promises are one of the most important ways to build raving fans and loyal customers. It is one of the first few things I help my clients build to gain a strategic advantage over their competitors.

So What is a Brand Promise?

It is a promise – A promise meant to be kept. Every time a transaction takes place, it is an exchange of money for the promise of something. That ‘something’ is expected. In today’s world. where transactions go beyond the simple barter trade, what we implicitly promise in the transaction involves the tangible product you sell, and the experience that comes from dealing with you, as well as the experience of using your product after the transaction. It does not end when the service concludes or when the product is consumed. People blog and write about their experience long after they finish their deal with you.

While Branding gives association and awareness, a Brand Promise is a bond that is established firmly between you and the customer. It is a bond that you must honor. It is a commitment that your brand, representing your company and all who are associated with it, will deliver what was paid for in both tangible and intangible ways.

For example, one of the premier airlines I take for business trips and the rare holiday messed up its luggage loading badly during a family vacation. More than fifty people did not get their luggage. While the flight was great e.g. flying comfort, food, cabin crew service, the way they handled the troubled customers was horrendous! They simply did not care. Emails took as long as a month to get a reply. Compensation was paltry for the inconvenience caused. And the worst experience I had was to deal with the automated, templated email replies to queries. By the end of the experience, I could memorize their standard reply word for word. It was as though this award winning airline is run by robots!

They wanted very much to tell me they DID NOT CARE! Remember, a contract with the customer is no longer restricted to the moment the product is consumed or the service is used. The whole experience, including post-service, is equally important!

While this airline has great branding involving winning several awards and international rankings, it broke its Brand Promise. Period.  I’m not impressed with its ranking when I’ve discovered they don’t care at all when they made a mistake that affected me. I’m not expecting perfect service; things happen especially when transporting a few hundred people. But a broken promise, even if its an intangible one, is something never forgotten. In fact, it is the intangible promises that are more critical than the tangible ones.  A Brand Promise, whether official or not, is equally real to the customer. And it left a sour taste in me for a long time as a customer.

Every Company Needs to Formulate and Track its Brand Promise

Your Brand Promise, whether you have strategically worked out one or not, is taken seriously by your customers. Even if you do not have one, your customers expects it. If you don’t have one, they will create one for you. When you have a Brand Promise that works, it will give you tremendous advantage because it essentially becomes an emotional bond tying your customer to you every time the Brand Promise is kept. And when you have one, you can strategically manage it and use it to your advantage.

Creating a Brand Promise

From the customer’s perspective, they demand it whether you have it or not. A Brand Promise can therefore be a strategic, calculated move to win you loyal customers.

How do we create a Brand Promise? Firstly, do you know your WHO? You need to define your Core Customer, and the clearer you can articulate your Core Customer, the better.

Who is your Core Customer? Is your business, and your Brand Promise targeting a want, a need or a fear? What is your customer really buying from you? For the case of Singtel’s customers, are they buying a phone and a line or are they buying convenience, lifestyle, status and connection with friends and family?

Next will be to break down the Brand Promise into supporting metrics and KPIs. This step is extremely important, because it tells you whether your company is delivering on its Brand Promise or not. In developing metrics, keep it to a few critical ones. As a rule of thumb, your metrics for Brand Promises should focus on a few areas ONLY:

Productivity, frequency and customer satisfaction are common ways to set the Brand Promise KPIs on.

Too many and you lose track of what is important. In my course of work, I notice some companies love to have complex metrics – too complicated to tell them what is really happening!

When setting Brand Promise KPIs – KISS (Keep it short and sweet)

And the presence of KPIs and measurables will differentiate your Brand Promise from a slogan. Slogans are meaningless, but Brand Promises are powerful. They are powerful because they are promises, and a promise kept is a bond made between the buyer and the seller. You want to establish more of such bonds and strengthen them, because it is always easier to sell to your fan than to a stranger.

I am excited to see businesses move from using Branding to win customers to using a Brand Promise. As a customer, I am most definitely thrilled when a promise is fulfilled.

I applaud Singtel in their move from branding towards Brand Promises. I look forward to the day when more companies build great brand promises.

And if you want to know how to build a great Brand Promise to take your business further, help is just an email away!

You should Have Charged Us More!

This was what a client said to us at a recent workshop conducted in Vietnam, Ho Chi Minh City.

And frankly, we love such feedback. Don’t you too? This is the favorite feedback for every business in the world.

Now, how did we achieve that? It certainly did not happen suddenly or overnight. It was a carefully planned strategy. But at the core of the strategy is one very important and fundamental key:

The CORE CUSTOMER

What is the core customer? And how does it differ from market segmenting?

Firstly, the core customer analysis goes deeper than understanding the market segment. Market segments only tell us the demographics, but a thorough core customer analysis delves deeper than that – it looks into the wants, needs and fears of our core customers. The heart of the core customer analysis is our customer is human – and humans buy irrationally.

Consider this:

Every time I visit Ho Chi Minh City, I visit the same tailor. I had countless suits and shirts made there. Is it because he is the cheapest? Or the best? Rationally speaking, I doubt it, so why do I keep going back?

It is because I am irrational. The human buyer buys on emotions because needs and fears are emotional. For a traveller like me, my fears of going to a tailor:

1. I go home and find that the clothes do not fit.

2. The tailor can’t finish in time for me to collect before I go to the airport. (This is a real fear because it happened to my wife when she went to Bangkok. The tailor could not deliver her suit in time and we left Bangkok without the suit and with an angry wife.)

So this tailor has consistenly met these 2 fears. And that is why I don’t bother to find a cheaper/better tailor. But wait, aren’t there tailors in Ho Chi Minh City who could meet the criteria I set? Isn’t what i am doing Irrational?

You bet! Irrational, but human. Humans are strange beings.

3 things to note, if you want to have a killer strategy for 2015.

The first – Find out your core customer’s needs and fears, and align your company’s purpose to fulfilling it. There is no better way to touch a client’s heart than by giving them the feeling that the reason why your company exists is to meet those irrational fears and needs your customer has.

This requires serious thought, because a company’s purpose is not something most company’s pay attention to. It is like Mission and Vision, two concepts that are critical, but often neglected in the rush of daily life. These two vital parts of the company are left on the wall as posters, but not as a critical part of the strategy to align and meet those needs and fears that will drive your customer to you.

The second – When your value exceeds their perception of price. What does this mean? Let me illustrate with a point  I used in my workshop. Imagine you have a headache, and you went to see a doctor. One doctor charges $100 and the other $10, who will you go to? Even if the doctor who charges $100 is the best doctor in town, you will not go to him simply because the value of a headache treatment does not exceed the perception of the price!

But if you have a heart attack, when your life is endangered, you will pay $100 000 if you can afford it to get the best doctor, right? Why? Because his value to you exceeds the perception of what is a fair price.

Is headache treatment a need or a want? is heart attack treatment a need or a fear?

The greater you understand the fear and need of a customer, the better you can position your product’s value to address their perception of price.

And the last – Be different. How do you be different in a way that is significant to your client when everyone of your competitor claims to be different?

You must be different in a way that matters to your client. And that is again, your uniqueness must address the needs and fears of the customer. Joe Girard, the world’s greatest salesman once said that his customers’ greatest fear is the lost of income arising from a broken-down car. He addresses this fear by providing a personal guarantee for immediate servicing versus his colleagues who only offered a car manufacturer’s warranty.Joe Girard made himself different by offering something of high value to his core customer – peace of mind when one goes to earn a living!

Being a seminar and education business, we did all these 3 things:

1. We emphasized that our purpose is to transform lives and thereby transform the world. We reflect that in our training programs by constantly finding programs and trainers who could change the way our participants think and act for the better.

2. We bring in the latest and best content from internationally known speakers and teachers to an audience who has little access to such content and experience.

3. And last but not least, we have fun while learning through authentic experiences. There are seminars and there are seminars – some are content driven while others are experience driven. For the same price, our participants could have gone to a workshop and sit like zombies for 2 days having content downloaded into them or they could engage in life-changing experiences that make the lessons applicable and real so that they know how to use the knowledge they gained – all while having fun!

We know our core customers hate to waste time and money (especially on a weekend), so we do these three things to make them enjoy learning and to remember and apply what they learnt.

The Core Customer is really the most important piece of information your company needs. Without it, strategy is useless. With it, you can become a company where your clients come to you and declare:

You should have charged us more!

You can do a Core Customer Analysis for 2015 if you are not clear what strategy you need. Just ask! Gazelles International coaching has an entire exercise just to determine who your core customer is!