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.

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!