JACK MIXNER STRATEGY

Copyright Jack Mixner.     714 449 1040.    www.mixnerstrategy.com

Some time ago the Tech Coast Angels put out a powerpoint slide show on how to present to them in your initial requests for financing. The crucial eleven slides:

1. Cover - business positioning statement
2. Market - the need and what customers have it
3. Solution - product, core benefit, protectable technology (ies)
4. Competitive position - who they are and your defenses
5. Marketing / Sales / Support - channels and skills
6. Business strategy - how you plan to grow beyond launch
7. Financial projections - the usual spreadsheets
8. Funding sought - amount, comparables, use of funds
9. Management - relevant experience
10. Milestones - e.g. product launch, next funding, breakeven
11. Exit strategy - IPO / acquisition (who?)

Strategic Implications

We used to say you had ten minutes to present ten slides. These are the slides. Practice. Practice. Practice.

And, yes, you probably do have to figure out a valuation for your company. It would probably go on the eighth slide.

Slide Part of a Full Packet of Information

In addition to the slides above you also need:

1. A complete business plan
2. An executive summary
3. Financials going out three years, certainly, and as many as ten years
4. A practiced elevator pitch

Posted by jackmixner at 02:26 PM | Permalink

Copyright Jack Mixner.     714 449 1040.     www.mixnerstrategy.com

Porter compares strategic advantages of uniqueness perceived by the customer and low cost position with strategic targets which are industrywide or which focus on a particular segment only. When advantage and target are summed, he creates three generic strategies, differentiation, overall cost leadership and focus (Porter, Competitive Strategy, page 39).  

Michael Dell started Dell Computer by selling computers out of his now familiar dorm room. He differentiated himself in Porter terms by selling direct to customers computers assembled from readily available parts only after the order was placed. He kept no inventory of parts or completed computers. Remember, early on, he didn't even have a warehouse. Delivery was very fast. Financially, this meant Dell was able to grow rapidly with only his initial $1 thousand outlay.

Allegiant Airlines has an interesting strategy of focusing on smaller airports with direct flights to Las Vegas and Orlando using workhorse, inexpensive MD-80 aircraft. Scheduled to go public in the next weeks, Allegiant is profitable, a rarity in the airline business today (Bailey).

Porter's value chain approach came next. Linking inbound logistics, operations, outbound logistics, marketing & sales, service and support functions of infrastructure, human resource management, technology development and procurement, he linked cost drivers to the ultimate financial margins they produced (Porter, Competitive Advantage, page 37).

As Dell matured as a company, its foray into retail distrubution of computers failed early on in the 1990s because of horrendous overstocks in the channel of computers that became obsolete and dropped in price as they sat in warehouses, unsold (Dell, page 79). By refocusing on margin produced from each sale, Dell turned the problem around by ditching retail sales and retreating to direct sales. The sales team was incentivized not on sales alone, but on the profitability of each unit sold. Sales people actually had software on their screens as they interacted with customers that generated unit profitability on the fly.

Strategic Implications

Dell survived at the initial launch of the company by producing without any overhead attributed to inventory. Then, it transformed itself using profitability measures and incentives tied directly to each sale.

Finance interfaces differently with successive phases of company evolution.

The interesting question? How will Dell survive in the future when customers apparently demand to touch the goods instead of order direct.

Reference

Bailey, Jeff. Flying Where Bi Airlines Aren't. New York Times. 21 September 2006. http://www.nytimes.com/2006/09/21/business/21air.html?ref=business 

Dell, Michael with Catherine Fredman. Direct From Dell Strategies That Revolutionized an Industry. HarperBusiness. 1999. 

Porter, Michael E. Competitive Strategy Techniques for analyzing Industries and Competitors. Free Press. 1980.

Porter, Michael E. Competitive Advantage Creating and Sustaining Superior Performance. Free Press. 1985.

Posted by jackmixner at 01:48 PM | Permalink

Copyright Jack Mixner.     714 449 1040.     www.mixnerstrategy.com

Schmidt on Barry Bonds' batting strategy success (Schmidt, page 114):

• Bonds is left handed
• He's unselfish - he helps his team mates near him in the order
• He waits longer than other batters for the pitch to arrive
• He has a short stroke
• He knows he intimidates
• He rarely hurts himself by guessing wrong
• He takes advantage of the smaller strike zone.

Schmidt's take on the Bonds' "troubles": Bonds would succeed either way as he has a wonderful, natural talent.

Strategic Implications

Like his public personna or not, Bonds is a patient team player. Not bad attributes in business.

References

Schmidt, Mike with Glen Waggoner. Clearing the Bases. HarperCollins Publishers. 2006.

Posted by jackmixner at 08:24 AM | Permalink

Copyright Jack Mixner. 714 449 1040     www.mixnerstrategy.com

Sutton lists eight rules for successful brainstorming. Two key points:

• Don't bother if people live in fear, i.e. if your company lays off of ten per cent of the workforce every year.
•  Brainstorming requires skill and experience both to do - and especially - to facilitate (Sutton, page IN 18).

Strategic Implications

Do it right and brainstorming is very useful, in fact, it may "promote remarkable innovation."

Done improperly, brainstorming might be worse than useless.

References

Sutton, Robert, I. Eight Rules for Brilliant Brainstorming. BusinessWeek. 25 September 2006. Page IN 17.

Posted by jackmixner at 12:11 PM | Permalink

Copyright Jack Mixner 2006.     714 449 1040     www.mixnerstrategy.com

The old way to accomplish a complete re-engineering of your company began with a culture change.

Kotter says that doesn't work. Culture change is his eighth step.

"Culture changes only after you have successfully altered people's actions, after the new behavior produces some group benefit for a period of time, and after people see the connection between the new actions and the performance (Kotter, page 156)."

The other stages?

1. Establish a sense of urgency
2. Create a guiding coalition
3. Develop a vision and strategy
4. Communicate the change vision
5. Empower employees for broad-based action
6. Generate short term wins
7. Consolidate gains - produce more change
8. Finally, anchor changes in the culture (Kotter, Table of Contents).

Strategic Implication

Understand how to change culture, yes. Wait to implement culture changes until your planning processes have yielded significant results.

Culture change early in a process will be a culture change that flips back to old ways when the going gets tough.

References

Kotter, John P. Leading Change. Harvard Business School Press. 1996.

Posted by jackmixner at 11:38 AM | Permalink

Copyright Jack Mixner 2006. 714 449 1040     www.mixnerstrategy.com

I heard Colin Powell speak on leadership recently. His key points:

• Set goals with the your team
• Train your team continuously
• Provide your team with the resources they need
• Reward your team based upon their performance and
• Provide ethical leadership.

Planning only takes you so far. Build a plan that you and your team will implement.

Strategic Implication

Make your plan implementable, or don't bother planning.

Posted by jackmixner at 01:25 PM | Permalink

Copyright Jack Mixner.     714 449 1040     www.mixnerstrategy.com

When you attend a National Speakers Association meeting you learn very quickly that they see one very crucial strategy to succeed at speaking, writing a book. The first national conference I attended actually had a skit with fifteen dancing people all dressed up as books. They're serious about books. Dottie Walters has created a whole industry around speaking and writing (Walters, pages 132 and 180).

A client I had was in the pest control business. Every time one of his competitors went out of business, he bought their phone number and their yellow page ad space. In some phone books, his ads were the only ones available. Call any company and you called him. While I won't say if I agreed with the ethics of his strategy, I will say it was very effective.

For folks who like to write, speaking about their books is a very good strategy. Owning ad space in the yellow pages makes sense for a termite company. Locating next to a research university with a teaching hospital makes sense for a pharmaceutical company or a medical device company. If you have the strength, create a strategy that takes advantage of opportunities.

Weiss continually expands upward the envelope of clients he attracts, while handing off smaller clients to other practioners who provide great service in the smaller company niche (Weiss, page 50). Shenson says never make cold call for business. His focus is on obtaining referrals from existing clients and lecturing to civic, trade and professional audiences in his target market(Shenson, page 18).

Strategic Implications

How many strategies do you have for your company? Probably not that many. They may change over time, especially if you have a look at, and modify, your strategic planning at least quarterly. New data says that revisiting your plan frequently and modifying it as necessary is a very profitable use of time (Hymowitz, page B1).

References

Hymowitz, Carol. In the Lead: Two More CEO Ousters Underscore the Need For Better Strategizing. Wall Street Journal. 11 September 2006. Page B1.

Shenson, Howard. Shenson on Consulting Success Strategies From the "Consultant's Consultant". Wiley. 1994.

Walters, Dottie and Lilly Walters. Speak and Grow Rich. Prentice Hall. 1997

Weiss, Alan. Million Dollar Consulting The Professional's Guide to Growing a Practice. McGraw-Hill. 1992.

Posted by jackmixner at 12:36 PM | Permalink

Copyright Jack Mixner 2006.     714 449 1040     www.mixnerstrategy.com

At one point, one of the folks who was working on a project with me needed to understand what my vision was relating to the project. It was an economic development project focused on helping entrepreneurs acquire more venture capital. Why were we doing that in Orange County?

One way of looking at it is the purely personal point of view of helping a few people get rich. That's not really what we were about. The goal was to help Orange County succeed on the world stage. By helping a local company find funding, we were successfully competing against the tech capitals of the world like Switzerland, Ireland, Hong Kong, Singapore - and Silicon Valley. A single success helps Orange County succeed on a global scale.

What about your vision? Covey talks being proactive in everything you do (Covey, page 75). Proactivity fits with vision. Have a picture, even a very vague one, of where you want to end up and everything works better. One CEO I spoke with recently wanted to build a company like the ones Collins describes in Good to Great. He had three employees. Think his company is going to grow? I think so. A simple vision - we want to be great - helps define for him the next steps. New hires need to fit the mold. Can they grow with the firm? Will they know how to sell in a large company environment?

Objectives take the vision and make it more concrete for the next year or so. It's OK to be a small firm. If you are going grow, however, state annual objectives that reflect that growth. Make them doable. But also make them somewhat hard to accomplish. A stretch is in order if you are going to grow.

In the economic development project above, we stated goals in economic impact terms. We continually measured our results, and set our goals, according to the specific economic impacts our projects had for Orange County.

Strategic Implication

Having a long term vision makes sense. Having annual objectives supporting your vision also makes sense. Keep them in front of you at all times. Look at them at least weekly to make sure you are on track.

Reference

Covey, Stephen R. The 7 Habits of Highly Effective People. Simon & Schuster. 1989.

Posted by jackmixner at 12:25 PM | Permalink

Copyright Jack Mixner 2006.     714 449 1040     www.mixnerstrategy.com

Now it is time to focus on business. There are all sorts of different types of mission statements. They differ according to which book you consult. Birnbaum asks just two questions when creating a mission statement:

• What is your product or service? and
• Who buys it, and why (Birnbaum page 124)?

Values aren't part of the mission statement, nor are objectives. Just product/service and marketplace. If your mission statement is longer than, say, thirty words, I'd look very carefully to make sure it is useful to your company.

Locally, I see a demolition company's huge trucks that say on the side "no job too small." It looks to me like they focus on big jobs. I suspect the receptionist has a lot of screening to do. A discussion about the mission statement, and a change in the company truck graphics, would make things a lot easier.

Strategic Implication

Just last week I went out on a "get to know a CEO" visit with a potential client. The son of an old friend, I wanted to make sure he got what he wanted and needed, and that everybody ended up looking good. His was a wonderfully successful company. Only one problem. It really didn't fit the niche I target. I think we both came to realize that the fit wasn't perfect. We'll see how it ends up.

Mission statements help you - and your potential clients - decide if business makes sense for your company. Sometimes it's better to refer work on to a perfect fit if there is one.

Mission statements help you decide what business to take, where to market, and how to market. Only two very interesting - and very useful - questions to have to be answered. Sometimes they are not so easy to answer, but they do make things easier.

References

Birnbaum, William S. If Your Strategy Is So Terrific, How Come It Doesn't Work? AMACOM. 1990.

Posted by jackmixner at 11:47 AM | Permalink

Copyright Jack Mixner 2006.     714 449 1040     www.mixnerstrategy.com

The place I go to look for a discussion of values is in one of Morrisey's books (Morrisey, page 27).

From a private practice point of view he suggests values of, for instance,

• Independence/freedom of choice
• Financial return
• Challenge
• Family
• Personal legacy
• Power and influence and
• Principles and ethics.

You might have different values. Another friend of mine focuses on a continuum between success and significance. He's got all the success he needs (although he still is building) and is focusing on the significance of everything he does. Other folks are trying to figure out how to give back to the community. One is in the midst of joining the Peace Corps after a long career in strategic planning. You probably will have your own list of values.

Hawley makes the case that there is a difference between being a manager and a leader based upon their value systems. A manager might be concerned with goals and objectives, while a leader focuses more on vision (Hawley, page 167).

Change is a fact of life. Values help you take into account change in your market niche. Continual learning. Taking risks. Investing in the future. All are values that may impact your future personal, and business, growth (Kang, page 199).

In business, Johnson & Johnson has one of the most comprehensive value systems of any company. During the Tylenol scare, they destroyed their whole inventory of Tylenol and started over again with tamper proof bottles. They didn't need to destroy everything. It just felt right. Within a year, they had recaptured a large portion of their once-leading market share.

A simple bulleted list of values suits me just fine. You don't need a bunch of flowery text to make this impressive.

Strategic Implication

The short list of values you create is easy to apply. If your values are all about money, you will know that you charge for everything. Sometimes you will find a project that a client wants and will pay for that just doesn't fit your value system. There's the time when you refer the off to someone else, or point out to your client that they might want to reconsider their strategy. It's still amazing to me how many times CEOs change their strategy when something just doesn't feel right - even if it is profitable.

Values underlie the entire strategic planning process. Start here in your process.

References

Hawley, Jack. Reawakening the Spirit in Work. Berret-Kohler Publishers. 1993.

Kang, Lawler. Passion at Work How to Find Work You Love and Live the Time of Your Life. Pearson. 2006.

Morrisey, George L. Creating Your Future Personal Strategic Planning For Professionals. Berret Kohler. 1992.

Posted by jackmixner at 11:14 AM | Permalink

Copyright Jack Mixner 2006.     714 449 1040     www.mixnerstrategy.com

In our seven step process to create - and implement - a strategic plan, the first step is to realize you need a plan. Then, admit you need to learn how to put together a plan. Finally, involve a team in your effort. Consultants working alone might bring in their spouse and family. Sole proprietors might create an advisory board to support them during the process and to give - free - advice.

In the preface to his famous book How to Win Friends and Influence People, Dale Carnegie suggests that the best way to learn and, finally, implement, anything is to immediately use what you learn. My guess it that he thinks people ought to struggle a bit along the way until they are able to apply the principles ( Carnegie, pages 27 through 29). Once you have the plan in action, he suggests that you let your team "fine" you for every time you go off plan and do something that doesn't make sense. Then he suggests reviewing your progress on at least a weekly basis. Repetition is part of the process. On a daily basis, keep notes on your progress for review at the end of the week.

Strategic Implications

Learning is the first step in the process. Use my format or another, it really doesn't matter. The goal is to implement what you learn.

The plan gives you a scorecard to measure your progress. It also makes sure you understand what you are doing, and why. The why gets forgotten in the rush to make money. Clients know when you are just about the money. Many times, they are buying not your process, but the heart behind it, with all that implies. Having a plan helps make sure you are about more than just money.  

The next step, figuring out your values, helps to get to the underlying heart in all this, the basis for your business success.

References

Carnegie, Dale. How to Win Friends & Influence People. Simon & Schuster. 1936.

Posted by jackmixner at 10:19 AM | Permalink

Copyright Jack Mixner 2006.     714 449 1040     www.mixnerstrategy.com

Success requires a gameplan, practice in advance, the right people to support you, and implemention. The pay-off? A richer life in all ways for yourself, your family, your community - and your clients. The success gameplan follows seven steps. They're simple, but not necessarily easy. Let's work together to create Your Own Strategic Plan. 

The seven success steps are:

1. Realize You Need a Plan
2. Understand Your Personal Values
3. Create a Company Mission Statement
4. How Vision and Objectives Work Together
5. Create Strategies and Tactics Based Upon Personal Strengths - And Opportunities
6. Don't Bother If You're Not Going to Implement
7. Revisit Your Plan More Frequently Than You Might Imagine.

Strategic Implication

All that's left is action.

Bibliography

Birnbaum, William S. If Your Strategy Is So Terrific, How Come It Doesn't Work? AMACOM. 1990.

Carnegie, Dale. How to Win Friends & Influence People. Simon & Schuster. 1936.

Covey, Stephen R. The 7 Habits of Highly Effective People. Simon & Schuster. 1989.

Hawley, Jack. Reawakening the Spirit in Work. Berret-Kohler Publishers. 1993.

Kang, Lawler. Passion at Work How to Find Work You Love and Live the Time of Your Life. Pearson. 2006.

Morrisey, George L. Creating Your Future Personal Strategic Planning For Professionals. Berret Kohler. 1992.

Shenson, Howard. Shenson on Consulting Success Strategies From the "Consultant's Consultant". Wiley. 1994.

Walters, Dottie and Lilly Walters. Speak and Grow Rich. Prentice Hall. 1997.

Weiss, Alan. Million Dollar Consulting The Professional's Guide to Growing a Practice. McGraw-Hill. 1992.

Posted by jackmixner at 07:38 AM | Permalink

Copyright Jack Mixner.     714 449 1040     www.mixnerstrategy.com

Hymowitz describes an antiquated strategic planning process, namely creating - and filing and never using - an annual strategic plan. She says that CEOs practice this process at their own peril. She cites evidence that annual planning cycles generate less than three major strategic decisions, while companies that hold regular (read that monthly, or even bi-monthly) meetings make more than six major decisions (Hymowitz, page B1 citing research by Marakon Associates).

Strategic Implications

Annual isn't enough. Monthly is better. Bi-monthly might be better yet. Who to include? Senior managment staff who will effect decision making, and who have information about competitiors and implementation strengths and weaknesses.

Reference

Hymowitz, Carol. In the Lead: Two More CEO Ousters Underscore the Need For Better Strategizing. Wall Street Journal. 11 September 2006. Page B1.

Posted by jackmixner at 07:22 AM | Permalink

Copyright Jack Mixner.     714 449 1040     www.mixnerstrategy.com

The Welchs comment on a company where the IT department reports not to the CEO but to the CFO. Since the CFO is very busy, IT initiatives are not implemented expeditiously. Their fix? Make sure IT - and by extension HR - report directly to the CEO (Welch, page 116).

Strategic Implications

Speed of implementation is crucial. Also, new hires will be able to quickly tell if their suggestions are carried to the CEO and the Board in a timely manner. Ultimately, it will be harder to keep talented individuals - and attract new ones.

Reference

Welch, Jack and Suzy Welch. A Twisted Chain of Command. BusinessWeek. 18 September 2006. Page 116.

Posted by jackmixner at 06:42 AM | Permalink

Copyright Jack Mixner.     714 449 1040     www.mixnerstrategy.com

Hibbard looks at marketing strategically. He tells the story of Safeway's successful, long term strategy to upgrade their stores in order to increase sales and profitability. They didn't advertise the store and product upgrades until they were totally installed nationwide - and working.

Safeway's Secrets:

• "Tell a true story
• Deliver, then promise and
• Don't oversell" (Hibbard, pabe 61).

Strategic Implication

Some strategic steps, especially those including construction, take a while. Make sure they are up and running before you make them the focus of your marketing campaign. Then overdeliver.

References.

Hibbard, Justin. Put Your Money Where Your Mouth Is. BusinessWeek. 18 September 2006. Page 61.

Posted by jackmixner at 06:30 AM | Permalink

Copyright Jack Mixner.     714 449 1040     www.mixnerstrategy.com

Rosa Parks made a decision and sparked a revolution that had been long in coming. John Kennedy made a decision to go to the moon and sparked incredible creativity in a nation willing to be inspired. In business, Boeing bet the company on the decision on creating the 747 and assured the company's success for thirty years.

What about Truman's decision to use the atomic bomb? Axelrod shows that the harder decision for Truman was, in fact, whether to go with Korea some years later, not to end the war in Japan. "The idea, of course, was always to make the right decision. But this was less important than making some decision" (Axelrod, page 43). "Truman wrote, 'Presidents have to make decisions if they're going to get anywhere, and those presidents who couldn't make decisions are the ones who caused all the trouble' (Axelrod, page 43)."

Strategic Implication

Hard decisions have to be made. Indecision doesn't help anyone. Gather the information you need to proceed. Then proceed. Make your decision and move on.

References

Axelrod, Alan. Profiles in Audacity: Great Decisions and How They Were Made. Sterling Publishing Company. 2006.

Posted by jackmixner at 03:16 AM | Permalink

Copyright Jack Mixner.     714 449 1040     www.mixnerstrategy.com

In a previous article (Mixner),  we quote work leading to the conclusion that there are times to invest in your weakest divisions, not your rising stars, as the return on your investment will be higher.

It seems that investing in your currently least productive sales team members has the same result (Locke Simon, page 126).

Strategic Implications

While it pays to be careful how you do it, it appears there are at least two instances where an investment in underperformers makes sense. Since training a new salesperson - and buying a new division - are so expensive these days, taking the time examine the possibilities before you act makes sense.

References

Ledingham, Dianne, Mark Kovac and Heidi Locke Simon. The New Science of Sales Force Productivity. Harvard Business Review. September 2006. Page 124.

Mixner, Jack. Contrarian Situation Analysis Increases Valuation. http://mixnerstrategy.com/ARTICLE-CONTRARIAN-SWOT.html

Posted by jackmixner at 03:53 PM | Permalink

Copyright Jack Mixner.     714 449 1949.     www.mixnerstrategy.com

In the early nineties, Welch had completed his first, hugely sucessful, decade as CEO of GE. Realizing there was still much to do, he formulated the next strategy at GE. It responded to the culture changes needed to allow GE to continue to grow. His culture strategy had three components:

• Speed (decisions in minutes),
• Simplicity (projecting a vision that is first clear) and
• Self-confidence (having the self-confidence to be simple) (Slater, page 254).

Strategic Implication

Welch's culture strategy amplified changes already made, including downsizing (number 1 or 2 in a sector, or exit), dropping the bottom 10 per cent of management each year and company wide training efforts including six sigma.

Recognizing that he had a great team that needed continued growth, GE empowered their entire team to leverage their training to move even more quickly.

Choose the right people. Practice in advance. Move quickly.

Not a bad strategy.

Reference

Slater, Robert. The New GE How Jack Welch Revived an American Institution. Business One Irwin. 1993.

Posted by jackmixner at 08:33 AM | Permalink