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by Dr. Donald N. Sweet

There are two major concepts in the title, brand promise and core customer.  Kind of like a chicken and egg situation.  Which do you think is more important?

Businesses usually begin by providing a solution to a customer.  Something they are good at, understand and interest them.  No doubt that’s where yours began.

By intentionally crafting a brand promise, the business communicates several important concepts.  First it signals to employees what is important to core customers.  This becomes even more meaningful as the business expands and adds additional people.  Internally a brand promise aligns the team around both the customer and product or service.

The business must then rigorously organize to deliver the brand promise to the core customer.  From location to people to systems, lots of work and consideration goes into delivering the brand promise to the core customer.  The brand promise should inform all aspects of the business.  A good visual is an iceberg.  The tip of the iceberg, the part we see, is the brand promise.  The majority however is below the surface, where all the work takes place.

For instance, Rackspace Inc., an IT hosting company based in a suburb of San Antonio, Texas, has “Fanatical Support” as it’s brand promise.  They go to great lengths to support their customers.  Check out what they say, and mean, about their Fanatical Support here.

Externally, brand promises communicates to the marketplace what it can expect from your company.  This is an opportunity to tell the market how you are unique from the competition.  A solid brand promise becomes the basis for everything your business does to attract customers and drive revenue.

All businesses have implicit brand promises, at some level.  Many are intuitive like the corner grocery or hardware store.  Your local attorney and CPA often have these assumed promises.  In fact we find most businesses have only expected brand promises.  A lost opportunity.

Crafting a well-defined brand promise can set your business apart.  If done properly it can also become the cornerstone for your marketing effort.  But who is this brand promise focused upon?  The core customer, made up of a select few in the marketplace.

A core customer is one who most values your offering.  They have a need that you are uniquely able to provide and they are willing to pay for.  Your brand promise resonates with them.  When we work with clients helping define core customers we spend time on both demographic data (age, income, type of need, etc.) and psychographic tendencies (early adopter, research buyer, green oriented, value buyer, etc.) of the core customer that they want to appeal to.

The better defined the core customer is the better we are able to craft a brand promise that appeals to them.  By defining our core customer well, we won’t waste scarce resources chasing after customers who don’t bring optimal value to the organization.

Your brand promise and core customer definition will set you apart from the competition while attracting the type of customer that you want.  It is the intersection of what your business does well and what the right customer needs.   It’s effective execution means sucess for your business.

By Dr. Donald N. Sweet

Your major business processes generate and consume large amounts of cash. Much like closets, basements and attics, business processes accumulate excess stuff. We usually find that any process that has been around for several years has some waste in it. Those processes that have been around for a decade usually have geometrically more non-value added activities.

With the goal of reducing process waste, we suggest using the Pareto 80/20 principle to define the most important processes in your organization. We’re looking for that handful of mission critical processes. The ones that add most value for the customer and consume the most internal resources.

The first step is to pick the biggest process opportunity. Next, organize a team that will review each and every step of the process. Here we find that a combination of process owners, process support staff and one or two team members who don’t know specifics about the process, works best. We find the last group are the folks that ask the “why do we do it that way” questions that those more familiar with the process ignore (Hint: It’s not uncommon to hear, “because we’ve always done it that way,” or “we tried that seven years ago and it didn’t work,” as answers).

Using LEAN methods (see www.lean.org), we suggest drawing up a current state map that includes each and every single step in the process. Nothing gets left out, however small or seemingly insignificant.

For example, order entry is a key process for most. Orders may come in via the phone, fax, internet, etc. How is each one received? What are its next steps? List the steps that follow, and so forth until the order is eventually fulfilled.

Each and every step, stop, rest, movement, change, etc. is mapped out, often with different color Post-It-Notes. This is known as the current state map. Here we’re looking to capture some 95% of all the possible activity (sorry Pareto). It’s important that it be recorded exactly as the process is currently being done. We find that it is not uncommon for two people working the same process to have slightly different steps. Both should be mapped out.

When complete, the result is known as the “current state map” and it often ends up looking like a spaghetti bowl.
We then go back and review each step asking if it is value added from the customer’s perspective. Typically customers don’t care about batching, or inventories or reviews or approvals, etc. They just want what they ordered, on time. To that end each step gets designated as being either 1) value added or 2) non-value added, always from the customer’s perspective.

Once we have completed this process we go back through it again looking for ways to eliminate as many of the non-value added activities as possible. This is where the “outside the process” people often shine. We record those changes and at the end of this process we have a “future state map“.

Our next step is to take the current state map and look at what needs to be done to migrate to the future state as we see it now. Some changes can usually be made immediately. Other will take longer. Still others might require investments in additional resources, i.e. computers, people, etc. Those investments will have to be weighed against the benefit they provide before determining whether they make business sense or not.

Once the major processes have been cleaned out, you can start on the next tier.  At some point revisiting the major processes again and again will often provide more return on investment. The ultimate goal is to develop LEAN thinking within the organization and perpetuate continual improvement.

Just like closets, basements and attics, processes gather clutter over time and need to be cleaned out.

by Dr. Donald N. Sweet

The 80–20 rule, also known as the Pareto principle, or the law of the vital few, states that for many events, roughly 80% of the effects come from 20% of the causes.

Said another way, 80% of your profit typically comes from 20% of your customers.  Often 80% of quality problems come from 20% of the reasons for those problems.   And so on.

Vilfredo Pareto was an Italian engineer, sociologist, economist, political scientist, and philosopher. He introduced the concept of efficiency and helped develop the field of microeconomics.

The multi-talented Pareto observed that by focusing on the Vital Few, we can make the most difference. To that end, we need to set up systems that constantly look for those Vital Few. Be they customers, products, or problems, tending to the Vital Few, while discounting or ignoring the “trivial many,” can dramatically improve our businesses.

We find that for many people, a problem is a problem, an opportunity is an opportunity, and they should all be addressed.  We disagree.  The issue is that we only have scarce resources to apply to any problem or opportunity.  There is only so much that can be done effectively.  We much choose the vital few that get attention.

I worked with a quality system once that required us to categorize failures by root cause.  After gathering information it became quite clear which root cause was responsible for the most failures.  It is there that we first spent time and effort to make improvements.  We then moved on to the next highest number and so forth.  By the way, we used what was called a Pareto chart when looking at the failures.  This method allowed us to make large improvements in output quickly while improving customer satisfaction.  There were lots of “one off” failures that probably never got resolved because the cost/benefit was just not there.

The same concept and process works for priorities.  Many of us have a “to do list” of 30 some items.  Fewer of us prioritize them by the value they have to the organization.  Fewer of us yet work on only the top three until they are complete.  Imagine what we could really accomplish if we put the majority of our work day (even half our workday) on the three most important items.

We work with our clients to help them identify and debate what the most important things on which they should be expending resources.  They we help them (follow up with them) to ensure they are actually spending the time to get those items accomplished.  Sometimes we haven’t identified the right items and priorities need to change.  That okay.  More often its the discipline the needed to stay the course and not be distracted by some shining new object.

The process of hammering out the top priorities using Pareto’s 80/20 rule pays big dividends within a year.  We suggest every organization keeps this process at the core of its decision making.

by Dr. Donald N. Sweet

There are three simple steps to help you get more accomplished.  Notice I said simple, not easy.  While they are simple, the discipline to stick with them is usually far from easy.

First, define your longer term targets.  These are usually best set out a reasonable amount of time in the future.  Somewhere from one to five years is often a good place to start.  As Yogi Berra said, “If you don’t know where you’re going, you might not get there.”

The next step is to set moderately difficult intermediate goals.  The trick here is to make them ones that will stretch you, but still be reasonable for you to accomplish.  I know a young lady in her twenties, a millennial, who set a goal of doing one unaided pull-up.  That’s right, one.  When asked why she only set one as her goal, she replied that since she had never done a pull-up unaided before, she thought that was a good place to start.

What this person intuitively realized is that setting moderately difficult, but attainable goals, improves the probability of success.  Many of us have been known to set lofty goals, ones that we have little chance of attaining.  Along a similar vein, someone in the same situation as this young lady who set twenty pull-ups as a goal, and only achieved two, would feel a failure.  They would then be less likely to try to stretch themselves the next time.

This millennial, on the other hand, is more likely to stretch herself again after attaining her more modest stretch goal.  Keeping the initial targets manageable actually improves probabilities of success because they seem more within our grasp.  As Lao Tzu, an ancient Chinese philosopher said, “A journey of a thousand miles begins with one step.”

The third of our simple steps is perhaps the most difficult, discipline.  That is where we keep at something until we have sufficiently mastered it.  Once again that is where the tactic of this individual above comes into play.  Keeping the goal challenging, yet achievable, makes the discipline required to accomplish it more realistic.  In turn, that success fuels the next moderately difficult challenge and its accomplishment.

Following these three steps helps one build the virtuous cycle that perpetuates both achievement and success.  The blending of 1) longer term goals, 2) moderately difficult targets, and 3) discipline to continue to work toward the target, will help anyone accomplish their goals with more regularity.  And of these three, I believe the middle one is of most importance.  Thank you, Diana, for showing me this so clearly.

by Dr. Donald N. Sweet

We find many business people try to overcomplicate strategy.   We don’t believe it needs to be complicated.  There a just a few basic questions that must be answered.  That said, what we find is what most businesses overlook is the most important element of strategy – a Healthy Team.

Change is a given and it’s accelerating.  Companies that don’t have management teams that can change with market forces and demands will underperform, then disappear.  That’s scary, as change is difficult for most of us.
Many teams put so much of their focus on being smart that they forget to work on being healthy.   Smart teams are good at marketing, finance, technology, production, etc.  All of which are important.  The trouble is most other businesses also focus on them so they become table stakes.

Healthy teams are ones that have minimal politics, clarity around the important items, high morale, high productivity and low turnover.  They work together well, making the best use of all of their resources.  Healthy teams have the advantage of being able to focus on the important issues in a business.  They don’t have to expend energy on the political intrigue present in so many of their competitors.

Our business schools train people to be smart.  Focus is on right brain activities that are easier to calculate.   As Pat Lencioni points out in his book The Advantage, the human side of the equation is much messier.    But that is where organizational health resides.

There are a handful of important questions an organization must answer to move toward healthy.  Of course to be effective they must also have the willingness to deal with messy human issues.  Healthy organizations will be more competitive in the long run than merely smart ones.

If you would like a free, no obligation healthy review, please contact us at Vital Growth.  We are passionate about helping organizations and their employees achieve healthy and sustainable growth.