Posts Tagged ‘relevance’

Being Expert: Bringing Personal Value to Those Around You

Wednesday, November 24th, 2010

I’ve written recently about how our economy is fundamentally changing. Everything seems to be disrupted and in a state of chaos. Normally routine business and established practices no longer function as they used to. Entire industries are being transformed along with the people in them. This brings me to the subject of today’s post, being an expert in your space and how you bring value to those around you.

In the past, our value was defined by how much we knew combined with the experience we accumulated over time. If you are truly an expert, every hour of everyday brings new experience and personal growth.

Those that find themselves in trouble today are the ones who learned their primary skill set a long time ago and have resisted learning more. They simply took what they were trained in and used it over and over, in a static kind of way. They would become more proficient at their daily performance and execution, much in the same way a golfer gets better at their swing if they practice the same swing over and over a thousand times. This is call “grooving.” Once you’re in a groove it is very difficult to get out of it. Grooving works very well when the skill does not require change to remain valuable.

In the knowledge or professional arena, our value was defined by how much knowledge we had and how specialized that knowledge was. If it was difficult material that took a long time to master, all the better. This meant we could charge more for our understanding of this knowledge. Think doctors, lawyers, and CPA’s. You could also think of master craftsmen as well.

This is the way we used to position ourselves and bring value, have knowledge that is hard to find, access, duplicate, and master.

Things are different now. With the rate at which technology, markets, and economies are changing, simply having the knowledge or experience is no longer enough. To remain an “expert” you must remain relevant to those you serve. To maintain your position of authority and value requires another skill set few truly master. It begins with the ability to be observational and recognize which elements of change are at work.

Simply observing isn’t the answer. The true answer is the ability to draw upon your knowledge and experience to synthesize new opportunities and solutions. This is an amazing time to be alive. There is so much disruptive change and technology around us.

The current recession and underlying permanent unemployment are perfect examples. The economies that are recovering quickly are the ones with low cost labor that can do many of the things our own skilled blue collar labor used to do. Now even our white collar workers are being outsourced by low cost offshore labor.

With rapid, pervasive change everywhere, we all have the opportunity to re-invent and redefine our value and skills. Our individual expertise comes from the ability to respond to these disruptive changes with innovative solutions that bring value to our customers and clients. As uncomfortable as change is, this is an amazing time of opportunity for those that can recognized and innovate new solutions.

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Using the SMART System for Setting Realistic Goals

Monday, March 15th, 2010

I recently came across an excellent discussion on goal setting. The process is to set SMART goals —

Specific, Measurable, Attainable, Relevant, and Time-based.

Specific means each goal is precise in its definition. An example would be be increase monthly revenue by $10,000 and gross margins by 3%. A general goal like “improve cash flow” is not specific enough. When you are precise, it is much easier to determine exactly what steps are necessary to achieve the outcome.

Measurable - I call this “As evidenced by.” I want to know exactly how I will be measuring the improvements I’m shooting for. If you can’t define how to measure your progress, you won’t be able to achieve the goal.

Attainable is exactly what it means, you can reasonably achieve what you set out to do. One of the biggest problems I see with goal setting is putting objectives out that can’t reasonably be met. Here is an example. You best month in business was a big stretch for everyone. There was a bunch of overtime and some mistakes, but not too bad. You monthly sales were roughly twice what an average month is.

Now. using this information, you set a goal where the monthly volume is 10%- 15% higher than your very best month. This could very well be an unrealistic goal for many different reasons. The biggest of which is personnel. Your trained employees were stretched to the max and were beginning to make mistakes due to the shear volume and from being tired. This is an example of unsustainable business volume. In order to keep it going, and grow it, you would need more new people.

The introduction of new people will actually slow your production down before you can get it to ramp up. Then there is the impact on your cash flow. Increasing business too quickly is one of the main ways you can crash a company. You’ll run out of working capital before you run out of work. In other words, you’ll burn up before you collect the receivables you’re due.

A more realistic goal and attainable goal would be to use the trailing 13 month average as the basis for improvement. To get this number, you add up 13 months and divide by 13. This approach takes seasonality out of the equation as well as any really good or really bad months. Set a goal of increasing this number by 15% - 25% over the next year. To track your progress, add each new month’s sales to the previous 12 months sales and divide by 13. That will show you how your average is tracking on a volume adjusted basis.

Relevant - This is harder to dial in on. I see companies setting goals all the time that are not relevant. This means, attaining the goal won’t necessarily improve the business. A good example of a suspect relevant goal would be to purchase a specific piece of new equipment, like an auto press. This goal in and of itself is not relevant until you determine all the other changes that will take place when you have this new capacity. You will need more screens, more people, bigger orders, perhaps more space, and certainly more working capital when you invest in automation. Young companies don’t recognized this and are often shocked at the impact of achieving their goal. Often this shocking revelation is not a good thing.

An example of a relevant goal would be to focus on increasing gross margin and cash flow before increasing production capacity. If you do set a goal for purchasing new equipment, be sure to look at all the things that will change when you have this new capability.

Time-Based Give it a hard completion date. Without a deadline, it simply won’t happen. Here is how I set time based goals. I set my goal objective. I then break it down into specific steps, stages, or events to get there. I put the time I needed to accomplish each step next to the step. I add up all the times and that will give me the absolute bare bones minimum to achieve it.

I look at that time, and then I double it. So if the total process is going to take 4.5 months, I double it to 9 months. I then look at the time I have assigned for each step and I double those times as well. Each step now becomes a milestone I can chart on my calendar. I determine my start day and then add each milestone deadline to the calendar based on the amount of time it takes to accomplish it.

I use an electronic calendar that allows me to filter events so I can have a tone of things going on, but each view is unique to the kinds of activities I’m working on. I find I get a lot more done this way and my colleagues and associates are always commenting on how much I can achieve in the time I have.

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