Some people feel like the words leadership, culture, strategy, and innovation are buzzwords that just make people sound smart. That is what their competitors want them to think. These are processes that experts have proven through decades of experience, and written about.
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Business development is to discover, design, and deliver truths and principles in order to build wisdom and skills to serve customers with valuable products and services, and hopefully serve employees with meaningful work.
The core basic principles of business development are perspective, purpose, persona, proposition, promotion, and payments. More about these on the Business Planning page.
1. Leadership is the most important factor in business. It is not cash flow, timing, the idea, or the team. These are all decisions the leadership makes, not to mention the culture.
2. Setting a healthy culture increases collaboration and performance, and innovates better. I would bet on a healthy culture with no plan before I would bet on a toxic culture with a good plan. But nothing is stopping a leader from developing a healthy culture with a good plan. Check the Communications Skills page for some great tactics to help the culture.
3. Innovation is no longer an option to build a sustainable business. Times are changing faster and the businesses that last more than 10 years are ones that innovate.
4. Calm, clear, courageous, and compassionate communication is the best leadership behavior, followed closely by values-based decision-making with truth, purpose, and goals. Embracing the truth is a is a common denominator for success that I have noticed is emphasized in all great business books I've read. I submit embracing the truth is critical for any decision we make.
The seven key business disciplines are leadership, culture, strategy, marketing, sales, finances, and innovation.
Leadership has two responsibilities, to set a healthy environment and to lead by empowering, equipping, and encouraging. More on leadership on the Leadership Development page.
Culture is the emotional environment of an organization. There have been studies that show a "spartan" physical environment that is bare and has few thrills can bring out higher performance. There have also been studies that show high value environments can bring out higher performance. Of course, high value environments will attract high level talent. I submit the primary difference is the vision and values of the environment, or its purpose.
The book Good to Great studied businesses that had extraordinary growth in their performance and value, and highlights many principles. One of the principles of a good to great business is developing a culture of discipline, where disciplined people apply disciplined thought and take disciplined action.
Many books reference studies that show a healthy environment has more engaged employees who are more productive. The book the Advantage gives a process for developing a cohesive leadership team that includes building trust that engages in healthy conflict that leads to commitment and accountability to results. A healthy culture will naturally plan and implement better.
Strategy is deliberately choosing what market to compete in, or what customer segments to pursue. Doing some research helps gain clarity which helps align actions with strategy. There are businesses that have become successful with no plan, however, I submit this is not the norm.
Studies show planning helps increase the chance of business success. There are two types of planning, traditional and lean planning. Traditional planning is more detailed, usually 5-50 pages, while lean planning only considers the necessary elements to start testing an idea by taking action. A lean plan is only 1-3 pages (single sided). Holistic planning can be traditional or lean, more about planning on the Business Planning page.
Marketing is getting your organization’s message, or your product, in front of potential customers in hopes of influencing them to buy. The two types of marketing are traditional and digital. Traditional marketing includes advertisements in papers and magazines, radio, TV, billboards, and other physical places (like buses or benches).
There are five basic channels of digital marketing, including web pages (sites or landing pages), email, social media, content, and paid ads. There are three basic types of content, including articles, podcasts (spoken word only), or video. People can conduct digital marketing without owning any channels like a website or social media. They would just create their content and simply partner with other people’s websites, email, social media, or paid ads. You can get more helpful information about digital marketing on the Digital Marketing page.
Sales is an exchange of value between people or organizations. Sales is building value and serving. If you believe in your product or service, you have a moral obligation to get it in the hands of people who need it or want it. Sales is often thought of as in person engagements like door to door sales or cold calling or warm calling. This kind of sales often uses a script that is carefully thought out based on the customer segment that is being pursued. Sales often involves a "funnel" or process where "leads" are brought in with some free value like a pdf or a free online class. Then they are followed up with emails or phone calls to qualify the lead to see if they are interested, have a need for the product, and have the money and authority to buy.
Qualifying a lead is basically seeing if they are a good fit for the business. Once a lead is qualified the salesperson continues to build rapport and value, often through education. When the timing is right the salesperson attempts to close the sale. There are many sales closing approaches, one of the best is the assumptive close.
Finances are the life blood of any organization. Without "margin" there is no mission. There are three key financial statements to keep an eye on, the income statement (also called a profit and loss statement). This shows financial performance over a period of time, usually a month, quarter, or year. The balance sheet, which provides a snapshot of the capital structure of a business. This includes the assets, liabilities, and equity (assets should = liabilities + equity). Then there is the cash flow statement which shows the incoming and outgoing cash over a period of time. The three main areas of cash flow are operating activities, investing activities, and funding activities.
Some key financial ratios or metrics to keep an eye on include the current ratio, quick ratio, debt ratio, debt to equity, return on equity, operating profit, and net profit. A great business man, Peter Drucker, said You can't manage what you don't measure.
Innovation has become necessary for sustaining an organization over a long period of time, given the increasing pace of change. Innovation is a significantly new product or a new way of doing things that provides a significant advantage. Most people think of innovation as a new product, but it is more often a new process within an organization. The most effective internal organization innovations are changes to their business model, or strategic positioning, or profit levers.
If an organization feels like it could use some culture innovation consider the books The Advantage by Patrick Lencioni, The Infinite Game by Simon Sinek, or the Culture Code by Daniel Coyle. If an organization has never engaged in digital marketing and they live in a medium sized city, or larger, where people are searching for their products or services online, locally, this could prove to be a very valuable innovation, if done carefully. Maybe an organization can innovate their payment system to a recurring subscription or membership that provides a more predictable cash flow?
The Business Truth book includes great information on the seven key business disciplines along with tips on starting a business, the eight generic business types, the leadership guide, a one-page employee agreement and performance plan, research tips, the different types of competitive advantages, a list of over one hundred free online business products or services, marketing tips, website tips, social media tips, a sales process, an innovation guide, a conversation plan, and a goals program template.
A Couple Innovation Considerations
Leadership and innovation have some tension, yet need each other to sustain success. Leadership creates structure and standards while innovation is born from creativity and often chaos. Think of a sliding scale with leadership on one end and innovation on the other, with truth in the middle. Between truth and leadership is structure, and between truth and innovation is creativity.
There are many stories of how good innovation disrupted and eventually overcame good leadership. Consider the story of Blockbuster and Netflix. In 2000 the leaders of the young and upcoming (some might even say struggling) Netflix approached the leaders of the large and successful Blockbuster in hopes of a merger or acquisition. They could not come to an agreement. Ten years later Blockbuster files for bankruptcy while Netflix is well on its way, growing into a large and successful business. The Question is how do leaders in an organization innovate? There are three key approaches to innovation, the business model, the strategy, or the profit levers.
1. Customer acquisition - This is primarily marketing and sales that is based on a good strategy.
2. Customer loyalty - It is less expensive to retain customers than it is to get new ones.
3. Productivity - We all have 1,440 minutes each new day, and habits are the engine of productivity.
4. Payments - The revenue streams and costs are the largest factor that determine the profits. Many organizations are turning to subscription or membership payment models which helps make the financial forecasting more predictable.
5. Innovation - Implemented in the business model, strategy, or any of the previous profit levers.. Everything on this page is covered in more detail in my book, 7 Business Disciplines.
Leadership: Developing the Leader Within You, and the 21 Irrefutable Laws of Leadership, both by John Maxwell, Start With Why, and Leaders Eat Last, both by Simon Sinek, The Leadership Challenge by James M. Kouzes, Leadership and Self-Deception by The Arbinger Institute
Culture: The Advantage by Patrick Lencioni, The Culture Code by Daniel Coyle, The Best Place to Work Ron Friedman, Good to Great by Jim Collins, First Break All the Rules by Marcus Buckingham and Curt Coffman, Lean Business Planning by Tim Berry, and the 4 Disciplines of Execution by Chris McChesney, Sean Covey, and Jim Huling.
Strategy: Playing to Win by A.G. Lafley and Roger L. Martin, Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne, Competitive Strategy and Competitive Advantage both by Michael E. Porter, The E-Myth Revisited by Michael Gerber.
Marketing: Marketing Made Simple and Building a Storybrand by Donald Miller, This is Marketing by Seth Godin, The 1-Page Marketing Plan by Allan Dib, Digital Marketers Sound Off by Matt Chiera, Growth Hacker Marketing by Ryan Holiday, and Email Marketing Rules by Chad S. White.
Sales: The Ultimate Sales Machine by Chet Holmes, The Challenger Sale by Matthew Dixon and Brent Adamson, The Only Sales Guide You'll Ever Need by Anthony Iannarino, Crushing It by Gary Vaynerchuk, 80/20 Sales and Marketing by Perry Marshall, and Jeffrey Gitomer's Little Red Book of Selling.
Finances: The Total Money Makeover, and Financial Peace Revisited, both by Dave Ramsey, Rich Dad Poor Dad by Robert Kiyosaki.
Innovation and Entrepreneurship: The Startup Owner's Manual by Steve Blank, Disciplined Entrepreneurship by Bill Aulet, Zero to One by Peter Thiel, Business Model Generation by Alexander Osterwalder and Yves Pigneur, Value Proposition Design by Alexander Osterwalder, Yves Pigneur, Gregory Bernarda, Alan Smith, and Trish Papadakos, Testing Business Ideas by David J. Bland, Alexander Osterwalder, Alan Smith, and Trish Papadakos, The Lean Startup, and The Startup Way, both by Eric Ries, Driving Eureka! by Doug Hall, Blue Ocean Shift by W. Chan Kim and Renee Mauborgne, The Innovator's Dilemma by Clayton M. Christensen.
Business Beginner (including home businesses and freelancing): Will it Fly? by Pat Flynn, Expert Secrets by Russell Brunson, Launch by Jeff Walker, Choose, and Ask, both by Ryan Levesque, and The 4-Hour Workweek by Tim Ferris.
Business development is supported by leadership development.
Entreleadership, Marketing Made Easy, EO Fire, Smart Passive Income, Social Media Examiner, The Ziglar Show, The Unstoppable Entrepreneur Show, Gary V, Tony Robbins, and Boss Mom
Grant Cardone, Pat Flynn, Inc., Entrepreneur (magazine), YCombinator, Strategyzer, Google Small Business
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