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The beginning of the New Year is a good time to identify the future that has already happened, but whose real impact has yet to be felt, and adjust our business strategies to be in attune with what’s happening.

Here are three questions to answer in evaluating your strategies to manage customer relationships, productivity and profits in 2013:

1. What unexpected events -- surprises, whether good or bad – occurred in 2012 that could make or break your business?

We're talking here about really big surprises -- like discovering that one of your products is selling much better than expected -- and you don't know why ...or... discovering that you are selling to the wrong customers ...or... your product or service needs to be revamped from top to bottom ...or... even discovering you are in the wrong business.

For example, you may have started your company to be in the software product business, but month after month your computer consulting service revenue far outpaces your software sales. This is a clue that you should rethink your business strategy.

You may not need to switch businesses, but, clearly, you should change your resource allocation and operations in recognition that the company is now consulting-services driven. With this altered strategy, your software development efforts might better be redirected toward providing a stronger competitive edge for securing and maintaining consulting-service customers.

2. How can you protect your customer franchise?

We know that it costs 8 to 10 times more to get a new customer as it does to keep a current customer. Yet, the average business loses 10% to 30% of their customers every year. The reason for this is customer satisfaction does not equal customer loyalty. Of the customers who defect, 80% are actually satisfied with the company's service.

So, how does a company build customer loyalty?

Single out your best customers and create a strategy to serve them better in the New Year. The old "80/20 Rule" applies: In an established business, 80% of your sales come from 20% of your customers. These are the customers to focus on. If you don't know who they are -- if you can't list them in order of decreasing sales -- find out. Analyze your sales and make a list -- and hang that list where you can see it every day. And every day, ask yourself, "How can I build my sales with these customers? How can I strengthen my relationship with them?"

3. What ways build customer loyalty and expand your reach?

Gone are the days of the geographically captive customer when merchants and service providers had the advantage of being the only place within driving distance.

With the impact of the Internet, there is now a shift of choice and power to customers. Think about how you can use the Internet to more effectively communicate with your niche markets and special interest groups. How can you refocus your efforts on being the best company competing within these well-defined market segments—to become a dominant factor in 2013?

Here are some suggestions:

•Look for ways of maintaining an on-going flow of information with customers through on-site visits, websites, email newsletters and personal telephone calls. Think of them -- and try to get them to think of you -- as a "business partner."

•Make the effort to learn their business so thoroughly that you can initiate new areas of business activity between you and them to generate more profit for both of you.

•Add additional services – preferably focused on your customer's needs -- that demonstrate your attention to the small but important details.

•Think about adding "loyalty" programs where you can reward your customers' loyalty in ways that your competitors can't easily copy.

Local businesses are expanding their market presence and reach by connecting with customers through the Internet. Even in cyberspace, the velvet-glove treatment is what your customers expect...or...they will shop elsewhere. Consider shifting your limited resources to spend 70% devoted to creating greater customer loyalty and only 30% on marketing expenses.

Your Real Job is Change

We live in a world of permanent which whatever job title you hold, your real job is in fact change. Yet, the majority of efforts to change organizations fail: between 50% and 75% of change initiatives fail.

Why do so many attempts at organizational change fall short?

Certainly not for lack of advice. These ideas matter and can prove most useful. This psychological perspective taken alone, however, can promote the belief that the success or failure of any given organizational change effort comes down to motivating individual members of the organization and that, correspondingly, a leader's primary job comes down to inspiring "the troops."

Such a belief can easily lead to unfortunate attributions whenever individuals don't change, namely marking individuals as the problem. The person receives the label "resistant," and perhaps the leader becomes stigmatized as "uninspiring." Altering the attribution and recasting the challenge of resistance can significantly improve the likelihood of success.

Change efforts fail for two reasons:

1. Leaders present vague and abstract change objectives: "Improve communication between caregivers and patients and their families" or "Increase profitability." Phrases like these mean different things to different people. They do not specify what to do or how to change.

2. Leaders underestimate the power of the work environment to precipitate or stall change. Many change efforts lack a coordinated or aligned approach to designing the work environment. One aspect of the environment tells people to make a change, while other aspects of the environment signal to people to continue to act as they always have.

"Leading Successful Change" by Gregory P. Shea, Ph.D., and Cassie A. Solomon will show how to identify not the behaviors you are seeking to change, but rather, those behaviors you want to see in place when your change is complete.

Transforming an organization isn't for the faint of heart. Doing so takes patience, discipline, even courage. But it can be done. It has been done successfully, time and again. And you can do it.

Our era is dominated by the reality that change is constant. We all need to get better at it--and sooner rather than later. You owe yourself and the people depending upon your leadership no less.

Source: Gregory P. Shea: Leading Successful Change: 8 Keys to Making Change Work

 Mentoring Matters

The mentor and mentee relationship is one of mutual benefit.

The mentor gains the satisfaction of helping develop the talent and mentees get access to "someone who has been there" as knowledge and experience is shared from one generation to another. Many successful people believe a key factor in their success was and is having a mentor or coach. Mentoring programs have become popular ways for organizations to groom "high potential" employees for future leadership positions. Companies are hot on the practice these days, believing it encourages loyalty, diversity, and cohesion. Fully half of the 500 biggest businesses in the U.S. now offer mentoring, up from about 10% five years ago, according to Menttium Corp., which sets up such programs for corporations.

Mentoring takes on many forms. Mentoring can be a one-shot intervention or a lifelong relationship. It can be carried out informally, as relationships develop on their own, or formally as part of a highly structured program. One of the most common problems, especially with formal programs, is simply that the mentor and mentee are incompatible. Even the best intentions and most thorough questionnaires can't always identify what might really irritate you about the other person. Many companies have discovered that it is best for the mentee to choose his or her mentor rather than having the company do the matching.

Here are three steps for preventing a brain drain where you work:

Identify your vulnerabilities. Create an age profile of your workforce by work unit or by function. Determine the average age of employees in each unit and identify who's likely to retire or leave the company for other reasons.

Identify types of knowledge at risk. Use interviewing and social network analysis software to find out what knowledge is most valuable. This will help you decide where to focus your knowledge-retention efforts.

Choose your tactics. If you're focusing on transferring "tacit" knowledge, or experience that is hard to catalog, establish mentoring programs that bring older and younger workers together for extended periods.

Overcoming the Leadership Paradox

A survey of 3,000 leaders and associates in 117 organizations reports that 63% plan to increase spending on leadership development programs that 75% of HR executives surveyed don't give a high quality rating to.

The paradox of spending more on what's not working is due to leadership development being seen as a classroom event. Yet, you don't fix people by sending them off to executive education. Managers need ongoing coaching to get in the habit of being good leaders.

The survey reported that two-thirds of the respondents said leaders at their company exhibited at least one potentially fatal flaw or "derailer"--a personality attribute that interferes with leadership effectiveness.

Here are a few examples of derailers:
an inability to listen, lack of self-control, pessimism, self-centeredness, know-it-all, not a team player. Derailers are more personality-oriented than skill-based and are more difficult to change than teaching someone a new skill.

For all the money spent on them, we still don't know if executive leadership programs spent in the classroom work but we know that personal leadership coaching does work.

Bottom Line: Leadership development is self-development. Learning how to not micromanage, not be overly concrete, not fail to explicitly state expectations and other unproductive inter-personal behavior only happens through the increased self-awareness gained in a personal coaching or mentoring relationship.

On-demand, immediate leadership coaching insights in digestible bites allows for on-the-job application while fitting easily into action-packed schedules. That's why enrollment in leadership coaching is Leadership 401.

Email us your questions and comments.

Transformational Leadership

Leadership onboarding

Leading a business transition through a cultural change, to deliver dramatically increased value, is a tough assignment. Getting the people side right can make all the difference. Business transitions are times of heightened emotion where perceptions, feelings and hunches trump logic.

Everyone's decision making is emotional, not rational...subconsciously under the control of their emotional brain (limbic system), not their analytical (neocortical) brain. When people make decisions, their decisions are not just about rational data weighing of the pros and cons. Buying a car, choosing a mate, selecting a new home, following a career path, perceiving how the world works is all decided emotionally. Emotion is always operating below the surface and the executive doesn't recognize how important his or her feelings are at the time of the decision. That is why it is important to help leaders of organizations to be emotionally stable, free from the fear of failure, when making important decisions.

Albert Einstein once said, "We should take care not to make the intellect our god; it has, of course, powerful muscles but no personality. It cannot lead; it can only serve."

Transformational leaders have a clear collective vision and manage to communicate it effectively to all employees. By acting as role models, they inspire employees to put the good of the whole organization above self interest.
Transformational leaders know and science has discovered emotionality's deeper purpose: the timeworn mechanisms of emotion allow two human beings to receive the contents of each other's minds. They are using the power of emotion to get managers to innovate through taking risks on-the-job.

Yet, after years of cost-cutting initiatives and growing job insecurity, most executives don't feel like putting themselves on the line. Add to that individual performance incentives, where a one-year term determines a large bonus, and investing in risky long-term payoffs takes a back seat. Most managers postpone risky decisions for
fear of failure---to not make the incremental mistakes that can lead to innovative successes. That's why it is difficult to make the shift from a play-it-safe corporate culture to an innovation-driven culture.

Here in Metro Detroit, the automotive industry is talking about innovation-driven cultures that are imperative in
today's globally competitive world. But where are the fearless transitional leaders that can instill the confidence of automotive industry executives to innovate? When will the Lee Iacocca’s of the 1960s and 1970s reappear to overcome the present corporate paralysis? Changing the organization's culture requires recruiting or promoting emerging leaders and helping them get up-to-speed quickly.

Lee Iacocca's career within the automotive industry illustrates how emerging leaders can change corporate cultures to walk the talk of innovation. When the over hyped, oversized and overpriced 1960 Edsel failed in the marketplace, Ford Motor Company needed to listen to new ideas from within the company. The introduction of the 1964 Ford Mustang was an innovative product tuned into customers' call for stylish affordability. Iacocca went on to become president of the struggling Chrysler Corporation where his streamlining measures and new product innovations, including the first innovative front-wheel drive Dodge Caravan minivan, made the difference between failure and success.

When an industry or company is restructuring to survive in the global economy, executives are all driven by the fear of not surviving the transitional period and this fear can adversely affect their decision-making abilities. The turnaround won’t be complete until the fear of failure is confronted in the minds of the executive survivors.

After a corporate restructuring, it is important to provide newly recruited or promoted executives with access to inside mentors and
outside executive coaches who can help their perceptions to evolve. Executives often leave a coaching session feeling calmer, stronger, safer and more able to manage within their corporate culture. With every mentoring or coaching session, the executive learns to self-coach—reducing the dependency on the coach. The executive’s leadership capacity grows and becomes a natural part of the self, like knowing how to ride a bike or tie one’s shoes.

Executives are then ready to guide the cultural transition by instilling confidence in each employee's ability to meet and overcome workplace challenges. Confidence precedes competence. Each employee must first believe he or she can succeed by developing a winning attitude reinforced by skill-building practice.

As each person's talents are built into strengths and then merged with others, a positive energy emerges. This energy force builds and reinforces each individual's confidence to create a critical mass. Then it is the leader's job to keep the momentum going;
so as not to lose the positive energy flow.

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