#OWNR.LIFE with William Eastman: Recent Episodes

IBGR onAir Talent William Eastman

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This is very different series than anything I have done. I usually stay out of the personal aspects of entrepreneurship but I know how challenging it can be - especially if you have some notion of balance.

So what is my end game for the series? To become a biz mogul, to build an empire of multiple businesses that are built and run in a way that my role is limited to the critical.

Before we get started one last thought. Look at IBGR as your CGO - your fractional Chief Growth Officer, a partner for Living The Life on Your Terms. We have built a platform that moves beyond the one-way conversation of radio and podcasts to real relationships; our Community of Commerce.

Start by joining my new group in the Community of Commerce - Living the Lifewhere we can discuss how The Life is effecting you. I have a script ready for you in my group - all you have to do is join.

This series of shows is focused on a subject not normally discussed - building an empire. If you are a serial entrepreneur maybe your future is not building and selling but building and buying?

I have worked with several entrepreneurs that have built empires as well as studied the best. This series represents everything I have learned and done over my career - and one more thing - I am building an empire in front of you starting with IBGR.

Last thought - our goal at IBGR, be a game changer for you.

Key Issues - Owner Perspective:

What is balance?
What model can I use to build this business that is eating me alive?
Can i make that work in other businesses?
Can I really manage something I don't understand?
Listen to Living The Life Series
JOIN the Community of Commerce - Living The Life
Show Up Next week

The purpose of this show was to provide a road map for all to build a business empire and maintain some semblance of sanity and a personal life.

We are your single, one stop source for business and personal success, period, end of story.

Now that you have enough quality information on the aspiration or problem, the next step is to build a prototype that is minimal in its offer (MVOffer) but complete enough for the customer to use. In many ways this step can be viewed as the opposite of R&D (Research and Development) - D&R - Development and Research.

Most companies as they mature develop a R&D process for the developing improvements or something new. We are advocating this is the first process to develop and is the inverse - D&R - Development & Research.

Topics:

Your Core Process - Agilean
Never Build On Spec, Find A Partner
Managing The Mess Using Teams
What If You Could Put Your Feet Up On The Desk During The Workday?

This is consulting in its purest form - knowing the questions to ask. Our experience is answers are easier than questions and when engaging in this type of experimental design to prove the business idea there are 3 distinct stages in the process. Although initially only the first two matter. Once you have a winning offer, the last stage takes you from a tested prototype to a repeatable and a 'manufacturable' offer.

The first chasm problem is reality - what are the market conditions that will determine the offer and its price point.

Topics:

Turning The Plan Into Reality
Draw A Picture Of The Competitive Landscape
How Do Customers Make Buying Decisions

Since all startups are really experiments and not businesses. Therefore your goal is the keep everything simple and easy to test: limited variables, simple processes, quick production & testing, easily improved.

Understand what you are testing.

This might seem over simplistic but it gets at the first problem - are you a solution looking for a problem (finding the right customer) or building the right offer for a specific customer (the customer is known)?

Topics:

ALL STOP - A Startup Is Not A Business, It Is An Experiment!
What Must You Know Before Starting The Startup
What To Build and When to Build It? (Right Customer or nature of the Offer)
One More Thing Before You Start - How Are The Best of The Best Doing It

Let's start with risk. The simple act of creating a new business that is going to do something different than the competition. You are looking to create value at an acceptable price point that will make your offer standout while delivering a profit.

When we look at that equation from an internal perspective our vision is based on a confidence in the model. However, when you look at it externally - how arrogant.

Unless your idea and model is truly unique and untested, which by the way is at least slightly delusional, why do you believe in the greatness hasn't already been tested and discarded?

So let's start with minimizing risk until you have sufficient real-time data to have real confidence in your idea and model; and that starts with the offer and processes.

Minimize the risk for the first offer by reducing the initial development investment while providing just the core features needed to make the sale.

The challenge with the first offer is the number of critical assumptions that must be made and how those can be tested or minimized.

Building the MVO is never a finished product or service, it is a process to build right enough the first time and improve from there. Identifying the bare minimum features and functionality to engage the target market that is upgraded with each successive upgrade.

Topics:

What Is The Minimum You Must Build to Make the First Sale - MVOffer?
Given the product or service, what is the MVOrganization?

This will give you an opportunity to develop the 'muscle' memory and SOP's for not only in the prototype stage but for the entire process. Remember this is going to be your methodology for the development of every new product and service from this point forward.

Topics:

The Define Sprint
The Explore or Update Sprint
The Validate Sprint
The Iterate Sprint

Now you need to build a detailed road map of each step in the process. This is also a repeatable process and time to practice. Focus on the 3 Scrum Phases.

Topics:

Exploration Scrum
Testing Scrum
Development Scrum

The team charter for the project should reflect what will actually occur when moving to the beta stage (2.0). This is a repeatable process and you need the practice to make it error proof.

Topics:

Define what success looks like
Assign roles
Determine which problem and decision making tools you will use
Gain agreement on how conflict will be resolved

We will start by acknowledging you cannot build the entire offer in this 1.0 or Alpha version. Given your first Matrix - The Customer / Design Requirements - what can you build that is core to the offer and can be tested internally?

Topics:

Select the core customer requirements that represent the total offer you can test
Select the design requirements that represent the total offer you must build

Given the Agilean process, it provides the manager/leader with 6 options for controlling the process and end result of the project. We will discuss how to use each effectively to raise the probabilities of a successful first offer.

Topics:

Control of Inputs: select only customers that fit your brand and skill sets, QFD (Requirements, Design, and Offer Characteristics Matrices).
Control of Throughput: Project and Sprint processes
Control of Output: Offer Characteristics
Direct Supervision: SCRUM Master or Owner/Facilitator on Time boxing and accountability.
Cultural Boundaries: reduce variation by creating a set of behavioral boundaries.
Standardization of Skills: technical competence, industry competence, teamwork competence.

A SCRUM: it is a project management process that relies on incremental improvements and is based on 1 to 4 week sprints.

The Sprints are short-term, time boxed to accomplish a segment of work. The output of a Sprint provides the basis of the next Sprint; each is an incremental accomplishment to reach an end result.

Topics:

SCRUM 1: Exploration - goal is to go from problems (opportunities) to solutions.
Define: create user story
Explore: identify all of the root causes / drivers
Validate: test root cause / drivers to select highest probability solutions
Iterate: test each solution to isolate the 1
SCRUM 2: Testing - goal is to develop the right solution right.
Explore: research market leaders, best in class providers for a building a first version; process or offer.
Update - upgrade solution from SCRUM 1 and build first process or offer.
Validate - use it internally (1.0 or alpha version) to determine if (1) produces expected results, (2) how user friendly is consumption.
Iterate - based on 1.0 test, upgrade the process or offer
SCRUM 3: Development - goal is generate new business
Explore: prepare client test (2.0 or beta version), control the controllables
Update: with install team, fix issues as it arises to meet results and use expectations.
Validate: review the client results and compare against storyboard - adjust as necessary.
Iterate: prepare the release offer (version 3.0)

We have used this analogy in previous shows but still applies - go slow early to go fast later. We have collaboratively created the purpose and ground rules for group functioning. Now is the time to shift the focus to the details of the project.

Topics:

Goals are the customer's, objectives are the team's - what is the big picture (goal) then break it into required activities (objectives).
Requirements Matrix
Design Matrix
Offer Characteristics Matrix
Avoid details until the latest possible moment - focus on estimating time and topics.
Based on the topics break everything down into the smallest pieces possible - the Sprints.
Create a Road Map of how the project will evolve over time - what question/problem/issue is each Sprint solving.
Sprint Planning based on the Agile Cycle - include resource requirements.

For the most part this is standard 101 for creating temporary project teams working on a specific issue. The goal is to perform a brain transplant of everything you know and the importance of the project.

Groups can become either a gaggle of individuals or synergy producing team and most of that lies on your shoulders. Here is a process we have used for years to increase the probability of having a high performing team.

Topics:

Vision for the New Offer
Reason for the Team
How this Team Supports the Business
3 Key Results the Team Must Accomplish
Team Member Roles
Rules for Problem Solving & Decision Making
Rules for Dealing with Conflict
Time Demands for Team Members
Principles of Agile Projects and Sprints

OK, this seems to have taken forever but understand one of the dynamics of building world-class products and services - you must go slow early to go fast later.

In Show 4 we covered the key questions to start build the prototype. Let's take that a little deeper.

Topics:

What Is The Design?
Build a model of the initial process
How Are You Going to Test It?
Do a walk through, imagine what happens at each step and record the initial brainstorm
What Must You Learn to Build It Right?
Based on the walk through and brainstorming - make 3 lists: based on facts, where are you certain (no assumptions); based on a few assumptions - where do you have reasonably certain; what don't you know

This is list is where the Design Phase and the Development meet.

EPISODE 35: FINALIZING OFFER CHARACTERISTICS

We are almost done with the design phase, at least for customer requirements. Once we have a final prioritized list, it is time for your team to go to work and build a prototype.

Topics:

Fourth Executive Meeting
Share results from focus group and finalize the weighted design characteristics
Request that members of the focus be available to help during production to ensure we are building what we promised

EPISODE 33: HOLDING EXECUTIVE SESSIONS

There is allot here to unpack, so I am going to move quickly. The goal is to validate everything done to date and this is the end of the Research and the beginning of Design Phase.

Topics:

Selecting the right customer - A review
Part of a fast growing industry and/or market
Unsatisfied or neutral about the current offer purchased
Willing to help design a solution for them?
First Meeting
Share the big picture - who you are, what you are trying to accomplish as a company - create a desire to be affiliated
Focus on the offer - why this offer, what you have researched and learned to date - surprise and intrigue with your understanding
Overview: Physical characteristics, What does the Offer Do, What additional Value does it provide
Schedule Second Meeting - allow the customer to share and discuss internally and create a second meeting to capture their requirements
Second Meeting
Restate the objective for the meeting - what new offer are you building to solve which customer problem
Work with the group to fine tune the offer's goal - what problem will it solve
Inquire about the positives and negatives of the offer currently being purchased
Create a list of customer needs; ensure you capture both what it must do (results) and what will make it user-friendly
Request volunteers to help in the design and build process
Schedule third meeting for gaining closure on the list
Third Meeting
Prior - clean the list and rework into your design process
Share your list for agreement
Solicit participants for Focus Groups

EPISODE 34: RUNNING FOCUS GROUPS

In the previous episode you have achieved much - found a partner for the offer, gained their insights into what they would buy if it was available at the right price point, and help in the production phase of the project.

The Focus Group's role in the beginning is to validate the requirements for results and user-friendliness by talking to the people doing the work.

We will come back this later as the prototype is being built. The Agilean Process requires the Focus Group to test the prototype as it is being built.

Topics:

Group members - marketing, sales, production, distribution, service
Create a group charter for working together
Have each person (1) discuss their role in the company, and (2) their role with the new offer
Share the requirements list and have them prioritize the items in 2 lists: (1) results, (2) user-friendliness
Solicit for requirements missing from the list, add, and re-rank
Review the final list and gain agreement

EPISODE 33: HOLDING EXECUTIVE SESSIONS

There is allot here to unpack, so I am going to move quickly. The goal is to validate everything done to date and this is the end of the Research and the beginning of Design Phase.

Topics:

Selecting the right customer - A review
Part of a fast growing industry and/or market
Unsatisfied or neutral about the current offer purchased
Willing to help design a solution for them?
First Meeting
Share the big picture - who you are, what you are trying to accomplish as a company - create a desire to be affiliated
Focus on the offer - why this offer, what you have researched and learned to date - surprise and intrigue with your understanding
Overview: Physical characteristics, What does the Offer Do, What additional Value does it provide
Schedule Second Meeting - allow the customer to share and discuss internally and create a second meeting to capture their requirements
Second Meeting
Restate the objective for the meeting - what new offer are you building to solve which customer problem
Work with the group to fine tune the offer's goal - what problem will it solve
Inquire about the positives and negatives of the offer currently being purchased
Create a list of customer needs; ensure you capture both what it must do (results) and what will make it user-friendly
Request volunteers to help in the design and build process
Schedule third meeting for gaining closure on the list
Third Meeting
Prior - clean the list and rework into your design process
Share your list for agreement
Solicit participants for Focus Groups

VALIDATE RELATIONSHIP BETWEEN P/S CHARACTERISTICS & DESIGN REQUIREMENTS

The last test is sharing the relationship between what the customer wants and how to build it. Here is an opportunity to build some street cred as a quality company, regardless whether you are building a product or service.

Topics:

Executive Meetings with 'decision makers' - multiple customers
Focus Groups between 'buyers & users' and designers - 1 customer

Next Show: Creating a list of testing variables part 2

VALIDATE DESIGN REQUIREMENTS

The second test is the out layer and an internal activity. Before we start building it answers the key question - is it manufacturable for the targeted price point.

Topics:

Process
Design
Material
Environment
Compliance/Testing

for the Mike King Network

for the Mike King Network

for the Mike King Network

for the Mike King Network

Now that we have broken down the Balance & Cash Flow Statements, you need to create a spreadsheet where you can track the flow of dollars or pounds or euro's - or any currency. It is powerful for you to do this manually to really understand how this cycle takes place to identify trouble periods. I have found this the most useful way of doing it rather than having it built for you.

The cash conversion cycle measures how efficiently a company’s management is handling its working capital. It shows the length of time between an entity’s purchase of inventory/materials and the receipts of cash from its accounts receivables. More precisely, it is put in practice by the management to envisage how long a company’s cash remains tied up in its operations.

Let's get this puppy rolling. None of this difficult, it is really a thought process to capture how money is flowing in and flowing out. You start with a Balance & Cash Flow Statements. Then add your Sales Forecast to build an accurate picture of the next 90 or 120 days.

https://www.ibgr.network/show_notes/show-chapter-17-the-cash-conversion-cycle-william-eastman

The Plan The third phase covers the last 4 steps - Empowering for Action, Generating Short-Term Wins, Consolidating and Accelerating Change, and the New Culture.

Topics:

What is the Plan to make the change effort successful?
Given you need short-term wins to build momentum, where will you start? It must be significant enough to matter and easy as a first win - you must have a success story to tell from the first attempt (SCRUM #1)
What process are you going to use to create the first success - (Sprints)
What is second - SCRUM #2
What is third - SCRUM #3, etc. How are you going to use those early successes to create momentum and accelerate the process?
Ongoing to communication plan to keep everybody up-to-date
How is the progress affecting the company?
Impact on Vision, Mission, Values - need to change/update?
Impact on compensation - are you rewarding the past or the future?
Add to your company's story

The Burning Platform Team The second phase is to build the team that is going to support the change. Having your people involved will ensure better thinking and commitment to make it happen. If you have few employees, they will be part of the Guiding Coalition and Action Teams. If you are alone - then you have the load. The steps don't change, just the dynamics.

Topics:

Creating Guiding Team
Who should be on the team
What is their role
How will they operate
Developing the Change
Vision
Impact on the company's Vision - what modifications are required - if any
Impact on the company's Mission - what modifications are required - if any
Impact on the company's Values or Operating Principles - what modifications are required - if any
Developing the Change Strategy
What are the company's Aspirations (Initiatives) for the change?
If the Aspirations are obtained, what are Results (Goals) for the change?
If the Results are achieved, what are the Activities (Objectives) for the change?

Initiating the Change Let's start with consolidating these 8 Steps into 3 Phases. The first is the prework you need to - as we covered last week in PART III: CHANGE MANAGEMENT - STRENGTHENING YOUR CORE PLAN.

Topics:

Market Research
Current Weaknesses that will make the situation worse
Future Threats that must be removed
Current Strengths we can build on
If we can make the change, great
Opportunities open to us
Strategy Changes
Impact on brand Impact on current products and/or services and the mix that comprises your offer Impact on
Operations
Implications of changing products and/or services on processes
Impact on People
Implications on the future
Implications on their roles Impact on Customers
Implications on the value of our offer to customers and price point
Impact on Suppliers Implications on our relationship with major suppliers

Many years ago I had the good fortune of working with John Kotter who is considered the foremost expert on organizational change. We took his book "The Heart of Change", which was an academic review of effective change strategies and created something for business owners - "Our Iceberg Is Melting".

One thought before we start, you need to review PART III and those 4 Episodes (57-60). That show covered the big issues and today we are going small. Also, the shows we covered this week in Finance (Episodes 61-64), Operations (Episodes 65-68), Customers (Episodes 69-72), and People (Episodes 73-76) provide the details contained in the change plan.

Summary

The following 8 Steps reflect how the companies that were able to make change work for them. I have used it many times over the last 18 years with my clients and companies.

Topics:

Establishing A Sense of Urgency
Create a Guiding Coalition
Develop a Change Vision & Strategy
Communicating the Change
Vision
Empowering for Action
Generating Short-Term Wins
Consolidating and Accelerating Change
The New Culture

Personal Scoring We are working at two levels: (1) using peer pressure and transparency to drive performance, and (2) gaining commitment to own the numbers.

We will or should have electronic employee dashboards (on their computer) so they already know the numbers, this is different. Imagine in a work group a schedule board available visually to everyone with each individual posting their own numbers.

What impact would that have on performance and contribution?

Topics: Schedule Board - work scheduled over a specified period of time. DTD (end to end) - based what is on the Schedule Board, total time from beginning to end TaKT (performance in individual unit), WIPI (what is tied up between individual units, OEE (up-time or availability).

The Business Plan & Line of Sight Peter Drucker on Contribution: “the man who focuses on contribution and who takes responsibility for results, no matter how junior, is in the most literal sense of the phrase, “top management.’”

Instead of focuing on just top management as outlined in the Druker quote, what if we had everybody focusing on contribution? What if everybody in the company asked themselves this question when in doubt about what to do next - which of these will make the most significant impact on the business?

That question underscores why everyone in the business modt know two things - how the company makes money and what is their role in the show.

Topics: Strategic Initiatives (Aspirations) Goals - Company and Department (Results) Objectives (Activities) Line of Sight - their part

Training the Financials Start with the basics - Balance Statement, Income Statement, and Cash Flow Statement.

Make sure everybody in your meeting understands how to read these 3 vital statements. Next discuss the drivers of profitability and where to find it on the respective statements. Now move to assets and how it is created, then move to how cash is created.

Finally close with how their day-to-day behavior impacts the numbers.

Topics:

Conduct basic financial training
How to read the key business documents - balance sheet, profit and loss statement, and sources and uses of cash.
The goal - improve employee competence to participate in the process
Map Your Processes
Fully Burden Everything with True Costs
Conduct advance profitability training
Build a model for how the company makes and keeps money
Turn the model into a game - use it for application training

In most businesses, only the owner or the executives are having fun. Business is a game and fun to play if you know the rules.

The question universal in all organizations is “how do we get people involved and committed?”

The reason that question is so critical is most people just trade time for money and arbitrarily limit their performance to match a paycheck. Getting people in the game changes how they think and increases the amount of discretionary performance they choose to share with the company. Show Objective Given your employees are a good fit for the job and have accurate position descriptions, you will create a system for focusing their efforts to maximize the impact on the company.

EPSIODE 73:

Summary

Getting People in the Game is an effect and is caused by how well the business goals and objectives are shared and are used as management tools. Once people understand their role in the show, it is time to increase their business knowledge so they understand the rules. Combining these two elements together with providing a daily line of sight to the business plan is an essential tool that allows them to own their own performance. The only thing left is the ‘WIIFM” - what's in it for me and that can be addressed by creating variable compensation where they share in the upside.

Topics:

Management By Objectives (MBO)
Business Acumen Training
Shared Financials
Line of Sight to the Business Plan
Personal Scoring
Variable Compensation

When Delivery on Promise fails, your Recovery process becomes paramount. It is the opportunity to show how service oriented the firm is, as long as it is not an ongoing situation; it will destroy your reputation and become financially unsustainable. The marketing and sales processes create a set of expectations on how important the customer's business is to you, what results can they expect from purchasing the offer, and how easy the offer will be to use or consume.

Show Objective

Given an organization wide emphasis for delivering on promise to customers, you will be able to take a negative event and make it a win for the customer.

EPISODE 69:

Summary

An effective recovery strategy requires several things are in place: (1) your marketing and sales efforts don't over promise to any significant degree, (2) your processes are under control so defects are minimized, (3) there is a policy for handling recovery situations, and (4) the front line can solve it without management involvement.

Topics:

Understand the opportunity to build a service reputation
Clear and stated Recovery processes
Front Line personnel enabled to handle the complaint

Recovery Starts With Policy The frontline needs both the responsibility and the authority to fix customer problems. This is partially based on having a clear set of policies or standard operating procedures that provides both. Also the business has to be organized to provide support when needed. Most service failures at the frontline are because when they request help - there is none.

Topics:

Customer Intelligence is shared throughout the company
All internal processes are designed to respond to customer complaints
Frontline / Customer Facing personnel are supported internally
Policy and Procedures align with servicing customers

Recovery Must Happen Immediately This is one of the more crucial elements of a Recovery strategy that enhances the company's reputation. The frontline individual dealing with an unhappy customer must be able to fix it immediately. If they have to get permission or boot up to management the moment will be lost.

Topics:

Parameters are set that allow frontline / customer facing personnel maximum flexibility to fix the problem on the spot
A clear policy exists outlining the the limited situations the customer-contact personnel push the issue to management

Fixing It for the Customer is Decision Making

This is a tough issue for management or the owner, you must trust the frontline person to make good decisions. If you have brought them into the great game of business and they understand how you make money, they can make better decisions. This is not an issue of trusting them, your education on the business will make most of their decisions sound for the business while the customer wins.

Topics:

Customer contact personnel understand how the company makes money
There is a post-recovery discussions on the thought process for recovery
Most situations do not require a financial response

Next Show/Chapter 19: The Personnel Gap

Creating Value Through Intangible Assets Just like we did with Tangible Assets, the following list is what is typical of Intangible Assets in a small business.

Topics: Trademarks Copyrights Patents Domain Names Employees Brand Goodwill

Calculate Intangible Asset Based Value This is a little more difficult and we are going to take the indirect methods. That is accomplished by looking at the company's pre-tax performance and isolating how much more you made that is not accounted for by ROA.

Topics: (Your ROA X Industry Average ROA) - Pretax Earnings = Intangible Asset Brand Value

Next Show/Chapter 17: Operating Costs

Calculate Tangible Asset Based Value Now that we know what is considered a Tangible Asset and where to find the information, we can determine its performance. There are many ways to compute how well these investments have performed and we have selected the easiest.

Topics: Balance Sheet Total Liabilities + Owners Equity = Total Assets Debt to Assets Ratio Total Liabilities / Total Assets = Debt to Assets Ratio Return on Assets Income / Assets = ROA

Before we can determine where to add value to a company we need to identify the value of current assets. The answer you are looking for is your ROA - Return on Assets.

The math is simple and it is nothing more than an extraction from your balance sheet. Once we know how well your investment into tangible and intangible assets perform, it will present the next question - what do I need to do to increase its value or what do I need to add to realize the full potential of my processes. The question is for next week.

Summary

The production of a product or service requires the investment in equipment, what are your capital investments to date to determine effective usage. How much did the equipment cost (don't consider platforms you lease or subscribe to), what is its life cycle before replacement, how often does it need to be serviced professionally (costs), what are costs incurred in your preventive maintenance system, what are the warranties/guarantees, does it require manufacturer training.

Creating Value Through Tangible Assets Today's show will start on the easier part of the problem - Tangible Assets. Here is a list of what is considered a Tangible Asset and the information is available on your Balance Sheet. This list is not inclusive of everything you potentially have, just what exists in most small businesses.

Topics: Cash Accounts Receivable Contracts Equipment Tools Furniture Real Estate Inventory Pre-paid Insurance

ABC and Break Even You have now reached the magic of this method and your ROI. The first cut of BE (break even) was in the aggregate - looking at everything. This will work as long as you sell one product or service but if you have several offers or lines (products and/or services). If your offer is more complicated you need to look at each line starting with individual products and/or services. This analysis will provide you with an accurate picture of how to sell in each area or abandon it.

Topics: You have increased production but margins are trending downward Product or Service mix has changed due to customer demands and margins are trending downward The factors used for drivers has changed and margins are trending downward

Next Show/Chapter 17: Cash Flow Cycle

Create Cost Pools This usually involves three areas for variable costs - materials, labor, and margin. Next, determine how much fixed cost to assign to each step. The simplest is to use time - how long will the step take and what percentage of overheads costs should be assigned. You will never get it exact but will be amazed when you compute all the costs and look at the price - how much margin are you really making?

Topics:

Start with your new "TO BE" process as part of becoming the Lowest Cost Producer Divide the activities into cost pools, which includes all the individual costs related to an activity—such as manufacturing.
Calculate the total overhead of each cost pool; Assign each cost pool activity cost drivers, such as hours or units;
Calculate the cost driver rate by dividing the total overhead in each cost pool by the total cost drivers;
Divide the total overhead of each cost pool by the total cost drivers to get the cost driver rate;
Multiply the cost driver rate by the number of cost drivers.

Value Mapping - Improve First This starts with creating value maps for each major process that produces something to sell. As we discussed in previous shows, once you have reviewed and improved the process to take all unnecessary steps of the process, now is to time fully burden each step with all of its costs.

Topics:

Show/Chapter 6 Review Select the Target Process: Project Manager selects a target process. Assemble Process Teams: Simple Projects – Project Manager creates an Action Team to handle the design, building, testing, and finalizing of the new process. Complex Projects – Executive creates a Design Team for research, design, and project management; and an Action Team for building and testing the new process. Create “As Is” Process: Project Manager or Design Team works with employees in the targeted process to determine what they “actually do” and why those steps/methods were chosen.
Conduct Market Research: Based upon the output produced from the targeted process Project Manager conducts research to establish a Benchmark (Should Be) as a starting point.
Compare “As Is” to “Should Be” Process: Project Manager or Design Team compares what should be done against what actually occurs to determine the reasons for the difference. This information is critical for designing the “To Be” process.
Perform a Value Check:
Check 1 - does this step provide value to the customer is willing to pay for?
Check 2 - is the step required for technical or quality demands?
Check 3: is the step required for legal or regulatory demands? Complete a QSFD: A structured process for creating design specifications based upon user needs and technological requirements. Should include project manager, functional management, subject matter experts, and front line employees.
Create “To Be” Process Map: Starting from the As Is, Design and/or Action Team build a process that establishes the company as the LCP (Lowest Cost Producer) or as close as possible.

This is by far the powerful tool in your financial tool box. Using conventional accounting methods will provide you with gross margins, which leads to profitability, but without the ability to identify the highest margin products and/or services or customers.

Also it calibrates your break even point with far greater accuracy.

Show Objective Given a contracting economy with diminishing business opportunities and inflation devaluing the currency, create a new "TO BE" process and use it to establish best practices for each process and achieve Lowest Cost Producer in your market.

EPISODE 61: Summary

In order for a process to generate a good margin and contribute to profitability, all costs need to be identified and assigned to the correct step. This is required to identify a product or service's full cost, variable and fixed, and embed into each step of the process. There is no other way except guessing to answer the most fundamental question - does the output of this process, whether it is a product or service, have sufficient margin to make it profitable?

Topics:

Every major process must a visual map - both internal and external. Economies, improvements, reduction in steps in every process has been identified and the map updated.
Understand all costs - fixed costs (like power, rent, office staff etc) and variable costs (materials, labor, equipment maintenance).
Working forward each step has a margin assigned. When completed has does the final number compare to the price?
Hint: the best companies in the service sector are operating at 40+ margins. Determine whether you need more process improvements to alter the price?

Elements of The Plan, Your Role as the Executive The Burndown List. The following is not really in an overall order, let me explain. If you are tackling just operations, this is the flow. However once you finish the SOP's, net next step might be in the people section to reorganize how employees are deployed.

The order of how the Burndown List is burned down is part of the SCRUM and Sprint Process.

Topics: Operations Value Map all Variable Cost Processes Value Map all Fixed Cost Processes Reduce cycle time and costs by a minimum of X% Create new/update SOP's to rerflect current best practices Create new/update Position Descriptions Customers Create/update data collection - formalize a data collection system Create a Report on the "State of the Relationship" Share with customers for feedback and a go-forward plan Incoporate improvement plans with Value Mapping and SOp's Share improvements with customers to include price reductions People Based on new/updated Positiond Description, reorganize employees - fully engage and apply excess capacity to new roles Provide Business Acument Training to all levels of the organization Provide Line of Sight to all emplayees - Company Goals & Objectives Create individual scorecards and manual scoring for all employees Create a variable compensation system for performance Finance Chart chnages to Revenue Chart changes to Margins Chart changes to Profits Chart changes to Retained Earnings

Next Show/Part IV: The Strengthening Our Core Plan - The Details

THE 3 SCRUMS & 4 SPRINTS, Your Role as the Executive A SCRUM: it is a project management process that relies on incremental improvements and is based on 1 to 4 week sprints.

The Sprints are short-term, time boxed to accomplish a segment of work. The output of a Sprint provides the basis of the next Sprint; each is an incremental accomplishment to reach an end result.

Topics: SCRUM 1: Exploration - goal is to go from the Burning Platform to A Plan of Action Define: create user story - Vision for the new company Explore: identify all of the root causes / drivers for change Validate: test root cause / drivers to select highest probability solutions Iterate: test each solution to isolate the critical few SCRUM 2: Testing - goal is to develop the right solution right. Explore: review the burndown list (Episode 60) and prioritize by sequence. Update - based on SCRUM 1 - i.e. improve Operations Validate - use it internally (1.0 or alpha version) to determine if (1) produces expected results, (2) how user friendly is consumption. Iterate - based on 1.0 test, upgrade the process or offer SCRUM 3: Development - goal is generate new business Explore: prepare client test (2.0 or beta version), control the controllables Update: with install team, fix issues as it arises to meet results and use expectations. Validate: review the client results and compare against storyboard - adjust as necessary. Iterate: prepare the release offer (version 3.0)

Planning Sessions Determination of goals - action plans – time frames, determination of how performance will be tracked and feedback provided, determination and allocation of required resources, review system changes necessary to support the change, education/training scheduled, forum for sharing information and problem solving, determination of how success will be rewarded, determination of next series of targeted communications. (90% completed – focus of 5 the track planning process).

Topics: Agile SCRUMs Sprints

As we do every week on Friday, in the Executive block, we pull together the week from the owners perspective. How do I (you) implement what was discussed this week? EPISODE 57: Summary Monday in the Finance Section we covered how to determine BE (break even) point in units, products & service lines, and hours. On Teuesdaywe covered the concpet of LCP - Lowest Cost Pruducer to add the WHY behind value mapping. Wednesday we tackled making the core of our relationship with customers Data; how to create a data based process to understand the customer and their perception of us. Thursday will coverd how to build Position Descriptions that provioded clarity by being accuracte, challenging, and fit the personnel assigned.

Today's show we put this into the perspectiver from last week - what is your plan to use the Burining Platform to make change in the company?

Identifying the Right Job Fit Now that we have addressed challenging work and position accuracy, now its time to identify what is required to put the right person in the right role.

Topics: Knowledge What must you know to successfuly perform, can be expressed in education level Experience How much time is required to achieve average levels of proficiency Skills What behvior do you expect to see when successfuly competing task; if you were to test their ability Certifications Alternative to knowledge and skills, most certification require a demonstration Attributes What personal characteristics are required to be successful in the role

Next Show/Chapter 16: People In The Game

A Collection of SOP's This is the other requirement for creating accurate and challenging descriptions. This section is about accuracy - excatly what process, steps, and tasks are part of the position.

Topics: Responsibility Which tasks are part of the job Authority How much control does the individual have over the assigned tasks Task Variety Challenging which requires growth

Visual Presentation of the Position Most people thing a position position is nothing more than a form and its format didn't matter. Well I have a very different view. I have spent many years trying to tap into 'discretionary' performance that is available when the right job conditions are present.

Our design of position descriptions is part of that mindset, to define the job in a way that not just accuratly defines the job, but challenges them to grow.

Topics: Task Identity Part of a process, the job has a beginning and end, a scope Ability to experience an end result Task Sigificance How meaningful is the work, how does it contribute, a purpose Company, Department, Individual Goals & Objectives

Much has been written and available about the necessity for position descriptions and what is the right format. Here is the difference we bring to the feast - the most important element of position descriptions is it must be process based. Show Objective Given a complete set of process maps and standard operating procedures, you will create a position description that is challenging, accurate, and enables job fit - right person in right role.

EPISODE 53: Summary Most businesses create organizational charts and write descriptions based on the function. You work in finance or service and describe the job within a silo; we know different. All businesses are processed based, which leads to a different orientation to work. Instead of fumbled handoffs between departments, everyone is focused on making things better and faster than the competition, which leads to higher quality and better margins.

Based on your work building value maps of each process and then creating SOPs (Standard Operating Procedures) each position is nothing more than a list of those responsibilities. This is essential in smaller businesses that cannot afford over staffing, defects, and poor margins.

GAP 5.1 and the 3 Expectations The 3 expectations were covered in the Summary. The first is the most obvious - you promised a set of results from using the product or service. The are a rangoe of outcomes from you hit the markt to alomost to you were lying. This is a reflection of what was sold vs what was made. If you have to emblish results to make a sale - fix what you make. If you are close to truth in the marketing and sales process then you have an internal quality issue - failure to produce what was promised.

The third issue, which is soly Process Quality, is reflection of what it is like doing business with you. How does the customer feel about the overall experience?

Topics: Creating accurate expectations with potential customers in the marketing & sales process Post sale alignment meeting to start with accurate expectations The product or service is delivered on time, on budget, and with the features promised

Next Show/Chapter 15: Recovery Gap

Gap 5 - Customer Experience There are five elements of Gap 5 that determine how the customer perceives the experience. In this series we combined the 5 into 3 - Promise, Recovery, and Personnel.

Topics: 5.1 Reliability (Failure to Deliver on Promise) 5.2 Responsiveness (Recovery Methods) 5.3 Assurance (Competent and Empowered Personnel) 5.3 Empathy (Sincerity – Value Their Business) Tangibles (Features – Specific of Your Solution)

The 5 Service Gaps Back in the 1990's when we developed the best selling book "Raving Fans" and the corresponding consulting process, the reserach focused on the gaps between what was promised vs. delivered. That led to us to looking at the underlying reasons for the Cusotmer Expereince Gap and the development of 5 Gaps concept. One is experienced by the customer and is the result of 4 other causes. The 4 causes are dealt with in other tracks in this series on Receession Proofing Your Business.

Topics: Gap 5: Customer Experience Gap 4: Creating Expectations Gap 3: Work Performance Gap 2: Leadership & Management Gap 1: Insufficient Customer Knowledge

The most critical issue in customer service is the initial delivery of what the customer purchased - does it perform as sold? How user friendly is it? Was it delivered on time? Is the value worth the price? Many times in the sales process, marketing and sales overstate results gained from purchasing, delivery date, or features. This creates a situation where the customer will feel deceived or cheated when the product or service is delivered; there is usually no reasonable recovery that will hold this account or recovery that is affordable. Show Objective Given a contracting economy with diminishing business opportunities and inflation devaluing the currency, start with holding your best accounts and determine the gap between what you promised and what was delivered.

EPISODE 49: Summary The process starts with marketing and advertising, what is promised in terms of the results you can expect, how easy the product or service is to use, and what is like doing business with your company. Next, what happens after the customer raises their hand and the sales process starts? Are the promises made validated, dashed, or expanded? Once the product or service is delivered, does the result of the entire process align with what the customer was led to believe?

Today's show starts with a quick review of the two types of quality that are present in every product or service: Process and Delivered.

Process Quality is how you build the solution promised during sales. It is creatiing what was promised and begins in the marketing & sales process, through installing a solution, and the service follow-up; it is an alternative way for defining customer service.

Delivered Quality is the customers experience using or consuming the product / service delivered and whether it meets the promises made - does it do what you promised it would do and how user-friendly is it?

How To Build The Right Relationship If your assessment of the supplier is they are the right choice, now its time to start the investment. Your goal is to make their offer a competitive advantage for your organization AND a competitive advantage for your alliance partner.

Are you up to the task?

Topics: Consider both brands Build revenue for both Shared investments in each uther Reduce the number of suppliers to a few, the best Next Show/Chapter 14: Company's Value Added

What Do You Look For In A Supplier Well, it should be obvious what to look for in suppliers - shared internal and external branding. Whether you are a startup without much market awareness or a major player with a long track record, who you associate with matters. You can't have your brand associated with organizations that will spoil or destroy yor brand.

Once you assess their products and services fit what you need, the preliminaries are done. It is time to do the heavy lifting of finding what they are about. Are they as dedicated to make the relationship as you are?

Topics: Good faith negotiation Long, intense meetings Not replaceable Willingness to invest into the relationship

Why Are The Right Suppliers Critical The place to start is internally. You are building an organization based on a vision of the future, a mission statement on what value you provide to whom, and finally a set of operating principles that defines what is in or out of bounds; a set of ethics on how to achieve goals and objectives.

This is your internal branding. Now the focus shifts outward and turn who are internally to who customers will experience in terms of quality, service, and value at price.

Topics: Ease or friction in the buying process Amount of rework required to use their products or services Impact of friction and rework on unit price or price per hour Have expertise to share

The quality of your suppliers will have a major impact on the quality and margin of the products and services you will deliver. Additionally you want to find marque suppliers to use as part of your brand association. Life cycle costs: defects requiring rework, defects requiring return, warranty or guarantees, durability. Also consider payment terms. Show Objective Given a contracting economy with diminishing business opportunities and inflation devaluing the currency, can you identify and build a relationship with suppliers where both parties will prosper from the alliance.

EPISODE 45: Summary The place to start is to compute all associated costs for buying, using, servicing the input and add to the initial price. Did you pick the right supplier? Use this metric to evaluate current relationships and it provides a model to interview and evaluate future suppliers.

The Service Formula by Hours What if you run a service based company where you don't sell things, you sell time like coaching? You have the added problem of not being to sell lost time - like last week. If you sell products a promotion will work to get rid of excess inventory. When you sell time there is no promotion for selling last week.

When you compute breakeven for hours, go for a yearly number, then bresak it down into smaller units. What don't sell to make breakeven in the first month has to be added to the remaining 11 months, etc.

Topics: The Service Formula by Hours: Hour BE = Total Fixed Costs / Margin Contirbution by Hour

Next Show/Chapter 13: Activity Based Costing

The Formula by Product & Service Lines Computing by line is a little more sophisticated. It mease you sum the total of all the products or services within a specific line. For example you have a line of lawnmowers sold at your Home & Graden Center. You trying to determine how many in total you need to sell to breakeven and will help to decide if this is a product line you should carry.

The same is true for services.e a HVAC company and selling several different types of service contracts for the heating / ac units you sell and install. It will answer how many do you have to sell to breakeven?

Topics: The Product Formula by Product Line: Product Line BE = Product Line Fixed Costs / (Price - Product Line Variable Costs The Service Formula by Service Line: Service Line = Service Line Fixed Costs / (Price per Hour - Service Line Variable Costs)

The Product Formula by Unit The easiest of the calculations, it is the determination of the number of untils that need to be produced that will take you to breakeven - you made no money and lost none. Look at like a childs see-saw - where is the balance point the two ends - revenue and cost.

One of the areas this impacts is sales forecasting. It provides a baseline for sales targets of a specific period of time; a year, a quarter, a month, or week.

Topics: Unit Breakeven = Total Fixed Costs / (Price per Unit - Total Variable Costs) Total Fixed Costs: Sum of all Nonvariable Costs (rent, leases, utilities, etc.) Price per Unit: Total Revenue from Sales / Number of Units Produced Total Variable Costs: Sum of all Nonfixed Costs associated with the Unit (materials, labor, commissions, marketing, etc.)

Summary If you run a business that sells units the goal is to determine how many must be sold at a set price. On the other hand if you sell services, basically time, then it is how many hours must be sold at a set price. That is the basic formula and it becomes complicated when you have multiple product and service lines.

Here you need to estimate what percentage of revenue each line will contribute and using historical data is the safest place to start. Today's show won't get that complicated, if you can do the basic contained in today's show notes you'll be fine.

VALIDATE PRODUCT (SERVICE) CHARACTERISTICS

We are going to use the same approach for two of the three segments. You have two individuals/groups working - the boss and the design team.

The owner's job is to interact with their peers to gain feedback on the 3 areas of concern - usability, performance, and connection with the offer. You can also venture into pricing by establishing what is the maximum you can charge.

The design team works with prospective customers to validate all of the functionality and features you intend to build.

Topics

Executive Meetings with 'decision makers' - multiple customers
Focus Groups between 'buyers & users' and designers - 1 customer

Today is Show 9 and we plunge into the depths of details. We are going to cover how the company's executive, you the owner, and the people building the new MVO need to interact with prospective customers.

This is a final validation of the offer characteristics and design specifications before starting the prototype. It will be build with feedback along the way so this isn't the only bite at the apple, just the second. You are testing all of the information assembled and validating your understanding is correct.

COMPONENT TESTING & ALL UP

This is an external testing methodology and starts with the mindset of 'All Up'. It is termed from the space program that a rocket with over million parts can only be tested during flight since it is not reusable. That puts maximum pressure on testing the component pieces along the way. If the components work, you are assuming the final assembly will work.

The second issue is when testing the components, there is enough functionality that a solid conclusion can be drawn.

Topics:

Usability
Performance (Results)
Emotional Connection

MARKETING TIMING

So far our focus is on being right. There is one problem. Being right at the wrong time will lead to failure and therefore the market situatio needs to be accessed.

Topics:

Where is the market for the initial offer? Innovation, Early Adopter, Early Majority, Later Majority, Laggards
Where is the market/customer in the sales cycle?
Where does the company stand in brand awareness?
What are competitors selling that is similar to our offer?
Where is economy and how will that influence timing of the buying decision?

Next Show: Creating a list of testing variables.

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OFFER CHARACTERISTICS

Now we have a buying persona which means we know how they search for information, what they evaluate about the company and its offer, and arrive at the decision to buy. Let's make all of those elements obvious and easy to find.

Topics:

Physical characteristics?
What does the offer do?
What additional value does it provide?

TARGETED CUSTOMER(S)

Starting with the most important issue, who is the highest probability customer who will find value in your initial offer and willing to buy first or early.

Topics:

Start with the smallest cohort group possible
Understand how value is perceived by the targeted customer
Find a co-development partner to test & validate
Create a buying persona

Last week in Show 7 we covered the Planning Stage to create a process that will increase the probability of success of your initial offer. Today in Show 8 will start addressing all of the potential variables we will test during the research, build, and testing of the offer prior to a full launch.

EPISODE 25: WHAT ARE THE REAL SUCCESS FACTORS?

OK time to pull our research together and focus on the specifics of the build, and that starts with customers. The following topics are the major areas you must drill down on to get a clear picture of required Design Requirements.

Topics:

Targeted Customer
Offer Characteristics
Market Timing

PRODUCT (SERVICE) CHARACTERISTICS

Last step in the QFD (Quality Function Deployment) processes is to convert Engineering Specifications into Product (Service) Features - what you are actually going to sell.

You are now ready to move from mostly planning and research to implementation and using the Agile Cycle.

Topics:

Engineering Requirements: Engineering Speciation's (X Axis)
Product (Service) Requirements: Convert Engineering to Offer Characteristics - Results and UX (Y Axis)

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23: DESIGN REQUIREMENTS

Once you have converted Customer Requirements into Design Requirements, the focus shifts to manufacturability - how to build it with the highest quality at the lowest cost.

Topics:

Design Requirements: what is required to build/make the offer (X Axis)
Engineering Requirements: convert Design to Engineering Speciation's (Y Axis)

REQUIREMENTS MATRIX

This is where you start. Based on your research on the market as well as working with the first customer, you start with what they need and want based on aspirations and/or pain points. You start with a shopping list and will not represent the first offer. Over the next three matrices you narrow the list down to the essentials and provide data for further improvements.

Topics:

Customer Requirements: complete list of needs and wants (X Axis)
Design Requirements: what is required to build/make the offer (Y Axis)

Today we pull together everything covered in Shows 1 through 6. The last Show we focused on building internal processes and now shift focus back on the customer and the offer.

This is the plan you need to build to ensure 3 things: (1) MVO, (2) customer offer match, (3) speed to market.

This entire process can be accomplished in months and sometimes weeks depending on the complexity of the initial offer.

EPISODE 21: AGILE IMPLEMENTATION PLAN

This is an overview of the planning process that puts the required structure into place that can be managed and tested. This will provide the script to build a MVO that the customer wants and do it without burning any more working capital than necessary.

Topics:

Planning: Product Vision, Development Roadmap, Release Features, Project Iteration
Designing: Understand, Research, Sketch, Design, Prototype, Test, Refine
Execution: Discovery, Implementation
Testing: Communications, 4 Quadrant Acceptance
Deployment or Release: Client UX

WHERE DO I FIND THE INFORMATION?

Time to start your research muscle. Like building your first offer or finding the right customers, this is the business muscle and the one you will use over the entire span of your business life. Here is the paradox of successful business ownership - spend enough time to understand what you are trying to do then act with urgency to turn knowledge into action.

Topics:

Statista
Hoovers Dunn&Bradstreet
SCORE
Sizeup.com
IBGRGROWTH APP

TYPES OF BENCHMARKING

There are several approaches to benchmarking your organization, it all depends on what you are looking to learn. Below I provided 3 of several options and these represent what a small business owner wants to know.

Topics:

Performance: involves gathering and comparing quantitative data (i.e., measures or key performance indicators)
Practice: involves gathering and comparing qualitative information about how an activity is conducted through people, processes, and technology.
External: compares metrics and/or practices of one organization to one or many others

The last two shows - 4 & 5 focused on customer needs and technical specifications - both at internal to your offer / customer match. We didn't address one of the main issues - how are you going to make and deliver the MVO

WHY BENCHMARK?

Benchmarking is nothing more than looking around a various industries: (1) your competitors, and (2) similar business models to identify how the best of the best are building, making, delivering their offer. You can either go in the dark and build it on your own or you can save yourself allot time and pain and learn from others.

Topics:

Lowest Cost Producer of Best Quality Offer (LCP/BQO)

BUILDING THE COMPETITIVE LANDSCAPE

This last step is organizational, creating spreadsheets that contain all of the information gather from market research so we can move back to the topic of building the MVO. In order to use one of most effective tools - the QFD, the information needs to be accurate and user friendly.

Topics:

Building spreadsheets: (RESZ, Markets, Competitors)
Revisiting your plan for the prototype

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EPISODE 15: UNDERSTAND COMPETITOR OFFERS

The last question and now the most critical is once you have zeroed in on a few great market opportunities, what is current state of competition? At this point the answer is obvious - the best market opportunity with the weakest competition should service a s the basis of our MVO.

Topics:

Aspirations & Pain Points
Features & Benefits
Price Point

EPISODE 14: MARKET CHARACTERISTICS

Once we have completed this very Macro perspective of what is happening today and in the near future, the next critic al question to answer is what markets to pursue. Where is the greatest growth potential and the easiest path to segment domination.

Topics:

Market Size
Market Growth
Market Segments

Last weeks Show Four, we covered your initial offer, your MVO. That was just to set up what you need to start the design process and lack the detailed process we will cover later in the Season.

What really starts the process is your analysis of the bigger issues, the market, and competitors.; and that is where we are today.

MARKET RESEARCH

There are many ways to define market research. For our purposes we will look at it from the 3 Levels from a Macro to a Semi-Micro perspective. The goal is simple. Bring to market the MVO that will capture market share because it is a better match between what the customer wants and any of the known alternatives.

Topics:

Level 1: RESZ- Regulatory, Economic, Scientific, Zeitgeist
Level 2: Competition - Primary Secondary, Tertiary

BUILD IT RIGHT

If you get this far what do you have, what do you know?

You will have proven the business idea is viable and there is at least an early market for you offer. Now you can focus on building a full featured offer and standardizing the support process. You have made the transition from an experiment to a business.

Topics:

What are the Sprints (Steps) Required to Build It?
How Do We Involve the Vx of the Customer?
How to Manage Incremental Improvements to a Finished Offer?

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BUILD THE RIGHT THING

Now that you have enough quality information on the aspiration or problem, the next step is to build a prototype that is minimal in its offer (MVO) but complete enough for the customer to use. In many ways this step can be viewed as the opposite of R&D (Research and Development) - D&R - Development and Research.

Topics:

What Must We Know Before Starting?
How Should We Build It to Learn?
How Should We Measure Performance?

EXPLORING THE PROBLEM

This is the hardest step because of the need to fully understand the problem or aspiration from the customers perspective and that might have many layers. Also you are under considerable pressure to get started. Every day you don't have something to sell precious capital is being burnt up. Resist the pressure to shortchange this step and use it to make every day count.

Topics:

What is the Context of the Problem?
Why is the Current State Not Working?
Create a Problem Statement to Solve?

Quick review. In Show 1 we provided an overview of our 13 weeks together with an emphasis on startups as experiments until the business idea is proven.

Show 2 expanded on the 'Startup as an Experiment' idea to cover some of the tools which we will expand on today.

EPISODE 9: WHAT IS THE PLAN TO BUILD THE PROTOTYPE?

This is consulting in its purest form - knowing the questions to ask. Our experience is answers are easier than questions and when engaging in this type of experimental design to prove the business idea there are 3 distinct stages in the process. Although initially only the first two matter. Once you have a winning offer, the last stage takes you from a tested prototype to a repeatable and a 'manufacturable' offer.

Topics:

What Is The Design?
How Are You Going to Test It?
What Must You Learn to Build It Right?

CREATING THE FIRST DESIGN MATRIX

It is time to construct an operating model to test. There are at least 3 QFD's (Quality Function Deployments) created: (1) Requirements Matrix, (2) Design Matrix, and (3) Product Characteristics.

Topics:

Requirements Matrix
Customer Requirements / Design Requirements
Design Matrix
Design Requirements / Engineering (Process) Design
Product (Offer) Characteristics
Product Characteristics / Engineering Design

That is all we can accomplish today. In Show 7 we will build 3 hypothetical matrix's to demonstrate the simplicity of the process.

KEEP THE VARIABLES TO THE FEWEST NUMBER POSSIBLE - ONE IF POSSIBLE

It is almost impossible to limit the variables being tested to 1, but this needs to be goal. If you are trying to solve the problem and there are 3 or 4 reasons why the first offered succeeded or failed - how do you select the right one?

Topics:

Variables
Customer
Inputs
Processes
Output

UNDERSTAND WHAT YOU ARE TESTING

This might seem over simplistic but it gets at the first problem - are you a solution looking for a problem (finding the right customer) or building the right offer for a specific customer (the customer is known)?

Topics:

Selection of the Right Customer, or
Features of the Offer

Last week in Show 1 we covered the concept of the MVO or Minimally Viable Offer; what is the minimum we can build and sell as our first offer. The idea was to create a well researched but quick to market offer to initiate sales and gain customer usage to improve the offer.

This week we are taking the same minimalist approach only instead of the offer, it is the processes required to build the offer and support systems to ensure the first sale is successful.

EPISODE 5: BUILD ONLY WHAT YOU MUST BUILD

As we discussed in Show 1, all startups are really experiments and not businesses. Therefore your goal is the keep everything simple and easy to test: limited variables, simple processes, quick production & testing, easily improved.

Topics:

Minimum process possible to 'produce' the offer
Minimum processes possible to service the account

BUILDING YOUR FOREVER CORE - WHETHER A ZERO OR A BILLION IN REVENUE

Show 10: Your Core Process - Agilean
Show 11: Never Build On Spec, Find A Partner
Show 12: Managing The Mess Using Teams
Show 13: What If You Could Put Your Feet Up On The Desk During The Workday?

CLOSING THE CHASM BETWEEN THE PLAN AND REALITY

Show 7: Turning The Plan Into Reality
Show 8: Draw A Picture Of The Competitive Landscape
Show 9: How Do Customers Make Buying Decisions

A STARTUP IS NOT A BUSINESS, IT IS AN EXPERIEMENT

Show 3: ALL STOP - A Startup Is Not A Business, It Is An Experiment!
Show 4: What Must You Know Before Starting The Startup
Show 5: What To Build and When to Build It?
Show 6: One More Thing Before You Start - How Are The Best of The Best Doing It

HOW MUST YOU THINK TO BUILD THE OPERATIONAL FUNCTIONS OF A STARTUP BUSINESS

Today's show is using the concept of MVO to introduce what is really required to build a startup - constant experimentation to test assumptions, build quick and test ideas to get it right.

Minimize the risk for the first offer by reducing the initial development investment while providing just the core features needed to make the sale.

The challenge with the first offer is the number of critical assumptions that must be made and how those can be tested or minimized.

Building the MVO is never a finished product or service, it is a process to build right enough the first time and improve from there. Identifying the bare minimum features and functionality to engage the target market that is upgraded with each successive upgrade.

Show 1: What Is The Minimum You Must Build to Make the First Sale - MVO
Show 2: How Do Operations Look Like In A Startup?

EPISODE 40: Building a Consensus At this point in the change process, it is still early but you should have as much commitment as possible. Whether you can maintain it comes later as the plan is built, progress achieved, and adjustments made. Topics: Financials Open Book Management Line of Sight on Business Performance Operations Value Mapping all Processes Creating / updating SOP's (Standard Operating Procedures) Creating / updating all Position Descriptions Customers & Suppliers Understand the current state of relationships Create / update data collection Triage today - fix what we can fix immediately People Involved all aspects of the business - management and improvements

Next Show/Part III: The Strengthening Our Core Plan

EPISODE 39: Your Vision of the Future When painting a picture of the present and future if we don't change, you focused on the negatives - short-term weaknesses and long-term threats. Now is the time to shift focus to Strengrhs and Opportunities.

Your job in explaining the vision is to create legitimate hope we have what it takes to get it done.

Topics: Strengthening Our Core Our Financial Situation Increase Cash On Hand Improve Available Credit Pay down or eliminate Debt Collect everything owed Achieving Lowest Cost Producer in our market Build only on demand Eliminate non-value processing time Reorganize work areas - 5 S Increase quality Improve margins Enhancing Relationships with Core Customers & Suppliers - holding their business Improve relations through the use of data Bring core customers into improvement efforts Share cost improvement by reducing prices while maintaining marhins Making Work Easier to do more - long-term employment goal Process improvemnts = better work environment Focus on skill mastery first, cross training second Building a variable compensation system - rewarded for improvements

EPISODE 38: The Burning Platform Last week we covered the attributes of an effective 'Burning Platform. It cannot discount the past and it has to tell the truth about the present and future without using fear.

The following is an approach I have used in the past that has worked.

Topics: The Current State of the Business Details of your SWOT Analysis Strengths to Build On Weaknesses to Fix Opportunities the New Enviroment Presents Threats the New Environment Creates The Current and Future State of the Economy Weaknesses we must fix Threats coming our way

Unless you are starting here with a blank sheet with no operating business, something exists. This one of your multiplier roles, the ability to Manage the Change from today to the future. Never forget that most change efforts come up short of its potential. Only your management will make change successful and create the success you need. Managing Change is both a technical process to align all of the businesses resources, it is also a method for building commitment and consensus for the change.

Never forget that as long as the pain of staying the same is less than the pain of changing, you will be pushing a very large boulder uphill. A second lesson is good plans with commitment will always outperform great plans with little commitment. Show Objective Given the topics covered in week 2, you will create a unique Burning Platform presentation and Vision of the Future that will serve as the basis for changing all aspects of the business.

EPISODE 37: Summary Our experience with managing large corporate change is no different in the smaller companies - just fewer people and resources. The place to start is the ‘Burning Platform” - why can’t we stay the same?

Next is your vision for the future - if successful, what will that look and feel like? Then there are the challenges of building concensus for the change.

If you have been successful selling why the past needs to be abandoned and the future embraced, then concensus is enhanced by having a strategic plan without the details. Why? Because to make the changes owned by everyone, they need to participate in its design and implementation.

EPISODE 36: Creating Basic Process Metrics The same is true here as in Episode 35, we are introducing concenpts and metods for later use in the series on HR.

Topics: Individual and/or TeamPerformance Dock-To-Dock: time frame of beginning to end TaKT Time: match between schedule and acutal completion WIPI: work in progress inventory or how long between steps is a job waiting

Next Show/Chapter 12: Position Descriptions

EPISODE 35: Work Requirements & Job Fit We are going to introduce several new topics today, some are for this show and others are concepts and methods we will use later in the series.

The following are the components of any effective SOP.

Topics: Visual Process Map Task Identity Task Significance Responsibility Authroity Written Components of a SOP Purpose: in general terms, what is the goal of this SOP. Scope: in general terms, what functions or parts of the business does this SOP cover includes Position Descriptions. Prequisites: list of other SOP’s this is built on. Equipment & Materials: list of equipment and materials that are part of this SOP. Procudure: a list of all the steps covered by this SOP Steps: how is the procedure performed Role: Owner, Manager, Worker Documents: supportive information required to perform the steps Position Description Role Knowledge, Skills, Experience, Certifications Work Attributes Work Processes Compnay, Department, Individual Goals and Objectives

EPISODE 34: The Work Molecule The following is one of the most improtasnt models we share. It is based on the experience of getting the right people in the job. That is driven by what are the process requirements to achieve LCP. In order to write an accurate SOP for how tasks are to completed, the process needs to be mapped and made as efficient and effective as possible. That leads to creating an accurate Position Description and serves as the basis for hiring, promotion, and compensation.

Topics: Process or Value Mapping - All positions are based on process requirements Job Fit - given the demands of the job, who has the right mix of knowledge, experience, skills, and personalty for the position? Team Work - based on the Process Map and Job requirements - what type and how much collaboration is required. Supervision (Leadership) - given process demands, job requirements, and type of temwork required, does immediate supervision have the skill set to lead Company Culture - how well does the company's culture match what is required to achieve discretionary performance.

The smartest method of defining roles, creating expectations, and providing initial training is the creation of standard operating procedures. Each step in a process requires sub-steps, documentation, tools or equipment needed, preventive maintenance, and specifies everything in 1 location for reference. The process for building SOPs will be covered in other shows. The goal today is to emphasize its importance in placing the right people in the right roles with the highest probability of success. Show Objective Given the best practices for building LCP (Lowest Cost Producer) processes and designing work, you will be able to build SOP's (Standard Operating Procedures) that will enable discretionary performance.

EPISODE 33: Summary What is a SOP? It is a set of steps and substeps based upon the best practices possible now that provides to the user all the information they need to complete assigned tasks. It includes tools, equipment, and documentation required to perform; It is used to document best practices, helps in achieving Lowest-Cost Producer status, and as a training tool.

Once you have assembled the SOPs, it is used as a reference for creating Position Descriptions. Each step, sub-step, and task has a designated position that handles that unit of work. That information is transferred to the corresponding Position Description. The most important result is a more accurate Position Description because it is based on a process, not a function.

EPISODE 32: Building a Working Model The first decision is what mix of these 6 approaches fits your business and the nature of customer relationships.. The minimum is the ability to produce a 'State of the Relationship Report' annd work backwards from there. You must at least 1 quantative and one qualitative source.

The second decision is to build your own or buy surveys and assessments. If you are concerned only about accuracy, you can build your own and then test with the client to ensure it is valid (measures what it is supposed to measure) and relaible (everybody interprets the questions the same way).

If you are interested in purchasing existing surveys and assessments, IBGR has a full suite that will provide a great place to start.

Next Show/Chapter 11: The Promise Gap

EPSIODE 31: Qualitative Data The Qualitative Relationship is to capture comments and opinions from your and the customer’s front line personnel. This is a series of questions driven by Point of Sale Surveys. Next is occasional Focus Groups where you propose changes based on collected data. You want to know if it is working. Finally, at the top of the data collection ladder is the Executive Advisory Groups, where you report on the relationship, what you have fixed, and the impact. This provides two critical opportunities: demonstrating changes made to improve the relationship and a chance to probe for new opportunities.

Topics: Point of Sale Their Front Line - comments Your Front Line - comments Focus Groups Share collected data to gain their interpretation and conclusions Testing new processes or features Executive Advisory Groups Discuss your report on the 'State of the Relationship', ask for guidance going forward Results Expectations - does the product / service deliver on promise User Friendliness (UX) - how easy is it to use Relationship with your business - where is the friction between the 2 organizations that needs to be removed

EPSIODE 30: Quantitative Data When we talk of Quantitative Relationships, it is about the skeleton - the numbers. There are three basic types of data collection tactics. The first is a Point of Sale Survey - what happens when they buy? Moving up the data collection ladder are Periodic Surveys to sample the customer over time. The last is a yearly Organizational Assessment using all the information collected to understand the state of the relationship given how you responded to earlier survey data. Now that you have a skeleton, time to hang some muscle on it.

Topics: Point of Sale At the Customers Point of Sale At your Point of Sale Periodic Surveys - Reactive and Proasctive Reactive - incident based Proactive - pulse taking Organizational Assessment - 2 Part General questions to compare clients Specific questions based on periodic surveys

The essence of all business relationships is data. That includes quantitative (numbers) and qualitative (feelings) to build a complete picture of the relationship. Most businesses, the large included, focus on just one. However, both are required to tell the story of the customer's relationship with the offer and doing business with you. Later on, when we discuss how to gain the customer’s support for improving the offer or creating a new one - this is essential.

Show Objective Given a methodology for designing a data based measurement system for customer relationships, create an unique model that fits your organization and customers that completes the picture of business performance. The goal is to measure CUSTOMER ENTHUSIASM.

EPISODE 29: Summary This is one of the more significant decisions you will make for the business. Your goal is to get it right early, both in what you are going to measure and how the data will be collected and organized. In 5 years this data will become a very valuable resource and has a positive impact on the businesses valuation.

The best place to start is looking at how you are measuring internally and asking the question - what don't we know? For example you measure how long it takes from a sale to delivery (Dock-To-Dock), the measure the performance of each step in the process for cost and quality (Takt Time or actual performance to schedule which includes quality). Your quality metric is internal - what does the the customer think when they receive and use the product / service? Does it meet their expectations for promise - results, ease of use, ontime and budget?

LCP Part 2 Test “To Be” Process: Action Team tests the new process under real conditions to identify cycle time, costs, and defect constraints in achieving LCP. Upgrade “To Be” Process: Action Team incorporates improvements to reduce costs and cycle time, and eliminate defects until performance standards are achieved. Finalize “To Be” Process: Project Manager or Design Team reviews results from the Testing and Upgrade Steps and “freezes” the final design as a new “As Is”. Integrate Policy & Procedures: Project Manager or Design Team updates Corporate Policies and Procedures to formalize the new process – creates the new standard – the “As Is” process. Create / Update Standard Operating Procedures - creating documentation of new best practices Create / Update Position Descriptions: Ensure new and/or revised tasks are incorporated in Position Descriptions for hiring, management, and compensation. Scheduled Review: Each significant process should undergo periodic review to ensure the organization maintains LCP in their market. Next Show/Chapter 10: Supplier Value Added

LCP PART 1 Select the Target Process: Project Manager selects a target process. Assemble Process Teams: Simple Projects – Project Manager creates an Action Team to handle the design, building, testing, and finalizing of the new process. Complex Projects – Executive creates a Design Team for research, design, and project management; and an Action Team for building and testing the new process. Create “As Is” Process: Project Manager or Design Team works with employees in the targeted process to determine what they “actually do” and why those steps/methods were chosen. Conduct Market Research: Based upon the output produced from the targeted process Project Manager conducts research to establish a Benchmark (Should Be) as a starting point. Compare “As Is” to “Should Be” Process: Project Manager or Design Team compares what should be done against what actually occurs to determine the reasons for the difference. This information is critical for designing the “To Be” process. Perform a Value Check: Check 1 - does this step provide value to the customer is willing to pay for? Check 2 - is the step required for technical or quality demands? Check 3: is the step required for legal or regulatory demands? Complete a QSFD: A structured process for creating design specifications based upon user needs and technological requirements. Should include project manager, functional management, subject matter experts, and front line employees. Create “To Be” Process Map: Starting from the As Is, Design and/or Action Team build a process that establishes the company as the LCP (Lowest Cost Producer) or as close as possible.

KEY TERMS LCP "Lowest Cost Producer" “As Is” - what it actually is – what people are doing “To Be” - what is possible – how much of the gap can close between Should Be and As Is “Should Be” - what the organization believes – what policy requires & best practices built on a clean slate Value Checklist - Customer Value, Technical Requirements, Legal Requirements AGILE - project management process that is iterative and collaborative, usies internal and external resources (SME) to solve problems and build solutions SME – Subject Matter Expert, either internal or external QSFD – Quality/Service Function Deployment – technical method of integrating end user demands with technical requirements, used for designing processes, products, and services. ABC - "Activity Based Costing"

Before we get into the details of achieving status as the Lowest-Cost Producer within your market, let’s tackle the difference between cost and price. LCP status is simply producing a product or delivering a service better and faster than the competition. That means if you don’t change the price you will have better margins than the competition or you can reduce the price and have the same margin as the competitor - both are excellent positions in the market.

You can use the additional margin to increase your marketing spend or price reductions, which will not hurt you, to buy market share from the competition. Usually it will force them to do the same and because of lower margins they are jeopardizing the health of the company.

The easiest method, especially if you are starting from scratch, is to use the value mapping process.

EPISODE 24: CASH FLOW STATEMENT The Cash Flow Statement explains the process - how the Income Statement (P/L) created the Balance Statement. It reorganizes the information from the Income Statement into: operations, investing, financing, and supporting. Operations addresses the sources of cash. Investing covers how acquiring assets where acquired to operate and grow the business. Financing is about shares and dividends; most small business owners are not taking or paying dividends during the company’s early stages so this is usually blank. However, pay close attention to this item because if you were attracted by the concept of an employee buyout, it starts here. Supporting covers non-financial transactions and taxes paid during the month.

Next Show/Chapter 9: Establishing BEP - Break Even Point

EPISODE 23: INCOME STATEMENT The Income Statement is a picture of the process - business conducted over the month. It is also known as the Profit and Loss Statement or P/L. It tells the business owner the level of profitability over the month. This a critical document for bankers and other lenders to determine if the business is a good risk. It is a picture of Revenues & Gains, and Expenses & Losses. It explains how the Balance Statement changed from month to month. Provides insights into the efficiency of operations, the managment of resources, and performance relative to its industry.

EPISODE 22: BALANCE STATEMENT The Balance Statement is a picture of an event - the business's financial position at the end of each month. Its purpose is to provide a clear picture of your assets, liabilities, and equity. Assets are what you own that drives revenue or supports business operations. Liabilities are long-term or additional obligations you have to gain assets. Equity is the leftovers when taking on liabilities to acquire assets.

The Balance Sheet divides assets into groups: Current and Non-Current. Current Assets are usually under 12 months old and can be easily converted to cash. Current Assets: includes cash and cash equivalents, accounts receivable, and inventory. Inventory is further subdivided in raw materials, work in process, and finished goods. Non-Current Assets includes machinery, computers, land, and buildings as well as intangible assets like goodwill, brand, and patents. Also included in this group is depreciation which represents economic costs over the life of the equipment. Liabilities are listed in two groups: current and long-term. Current is long term debt that does not come due within 12 months. This includes car payments...

You need a foundation to build knowledge upon, the ability to create, read and understand basic reports. This entire process starts here - understanding how your business makes money. Today's show is Business Finance 101 - what standard reports are available and what story does it tell. Show Objective Given the 3 standard financial statements (Balance Statement, Income Statement, and Sources & Uses of Cash), you will be able to interpret the financial performance of the business and improve future decision making.

EPISODE 21: Summary We now start week 2 of the series and specifically how to get a handle on your key financial reports. This is a two step process. It starts with you becoming intimate with the standard reports and using it to then build custom reports based on what you learn from the Balance Statement, Income Statement, Cash Flow Statement. The second step is finding at a minimum a CPA and the best case is a fractional CFO to handle the reporting so you can spend your time discussing the implications of past, present, and future decisions.

EPISODE 19: IS IT WORKING? Track and report progress/establish consequences — If you do a good job of identifying a real and credible threat to the business, and articulating a pathway to averting or navigating the risk, then you should be able to establish some good metrics for reporting success. Think of these as milestones or way-points on your journey. Report these frequently so that they enable critical course corrections. You’ll want to make sure you hold yourself and those on your team accountable. Again, if you’ve done a good job of defining the threats, risks, and path for success, then improvement in the business should allow for ample rewarding of those who contributed the most. Don’t overuse the tactic. — There is nothing worse than a leader who constantly “cries wolf”. All of us have had bosses who live in a constant narrative of “the sky is falling.” They repeatedly send the same message over and over again, and when subordinates stop listening, they ascribe it to their staff “simply “not getting it”, when in fact what has happened is that they have become so “numb” to the message that it has the reverse effect, i.e., of creating complacency.

EPISODE 20: HOW TO RECESSION PROOF YOUR BUSINESS

Get Your Financial House in Order - Next Show: Show & Chapter 5 - Basics of Financial Reporting Attack Costs - Next Show: Show & Chapter 6 - Create a Cash Reserve from Reducing Costs Making Money in an Economic Downturn: Show & Chapter 7 - Data Based Relationships Recession Proofing HR: Show & Chapter 8 - Standard Operating Procedures

EPISODE 18: HOW TO CREATE A BURNING PLATFORM Show how staying where you are is not an option, and that doing nothing will result in disaster. Look for a crisis that you can highlight. They are often lurking nearby, forlorn and unnoticed. You can also engineer your own crisis that forces change. Be careful not to disrespect the past. Make sure the platform you choose is real, credible, and significant. — Focus on specific threats or risks to your business that cannot be dealt with or averted using existing processes, practices, or people (e.g., a specific safety risk that if unmanaged would sink the company, or a productivity gap that is 40% worse than your top competitor, is better than a repeated message that sales are down, costs are up, and profits are hurting). Make sure you offer a “roadmap” or “pathway” for success that is achievable (assuming one exists)– Everyone has heard the adage “accept the things you cannot change…change the things you can …and have the wisdom to know the difference.” There are two implications of this in creating your burning platform. First, there is nothing worse than a dismal scenario that has no way of being averted, as that is a sure path to apathy and hopelessness. Assuming there is one (if there is not, you may want to think about jumping ship), make sure that you help your staff see it. None of us are capable of changing the “end of days” scenario described above (should it prove out), but we can change our behaviors, approach to relationships, and other facets of our life. The “burning platform” doesn’t always have to be apocalyptic in nature. — You can be just as successful defining a future scenario that might open possibilities for you or your organization to “break out” or leapfrog competitors. Our visit to the moon was a good example of where we used external forces and opportunities to inspire a very positive outcome. A “compelling narrative” is essential. Almost every good example of a “burning platform” tactic being successful begins with the ability of a leader to clearly and compellingly state the case for change. At its basic level, this is the ability to be a good storyteller, in a way that vividly paints the picture of the crisis at hand, shows the vision for success, and clearly identifies what must change, all while respecting the history and past successes of the organization.

Summary The challenge of Friday Shows is for you as the business owner to stop being just a technician in the firm. You will need to balance two things at once: what is happening and how is it being accomplished.

The WHAT are the specific areas of focus like finance, operations, customers, and people that is being built or improved..

The HOW is how you managing the change from today in those 4 areas to where you need to take the business. Every Friday we start with the HOW.

Objective Given a contracting economy with diminishing business opportunities and inflation devaluing the currency, you will generate new solutions to built an operation that can deal with current challenges.

EPISODE 17: WHAT IS A "BURNING PLATFORM"?A "burning platform" is a term used to describe an extremely urgent or compelling business situation in order to convey, in the strongest terms, the need for change. Using this process, you can get people’s attention and build awareness of the need for change very quickly. The only caveat is that not every change can have a burning platform. If this were to become the norm, employees may begin to ignore the message (not everything can be an emergency). As the old story goes, you do not want to be caught “crying wolf” for every change, in case you find yourself really faced by a wolf and no one responds to your call.

Book & Series: Recession Proofing Your Business Chapter & Show 4 - Introduction: Recession Proofing HR - How to Do More With Less EPISODE 13: Summary One of the tougher business decisions during an economic contraction is to look at labor costs last, not first. Why is that such a challenge? Because labor costs make up approximately 30% of all costs and are the most controllable. Don’t fall to the temptation of starting here. You might be required to reduce labor costs when there are no other options. If you have analyzed and improved internal processes, it will improve each position and identify its contribution to the success of the business. This will also identify positions and individuals not contributing enough to the bottom line. Before deciding to release these individuals, create new positions identified in value mapping to achieve a high level of robustness in all processes.

Based on your value mapping, create a new "TO BE" for all critical processes and reassign non contributing positions to the new process or steps. Then retrain all personnel from the new / updated SOPs.

Show Objective Given a contracting economy with diminishing business opportunities and inflation devaluing the currency, we will demonstrate the need to strengthen the core of the business to not only survive, but thrive.

EPISODE 14: The Schedule (65 Shows) Finance Monday: Recession Proofing Your Cash Flow in 13 Weeks Operations Tuesday: Cut Costs & Develop New Offer - A Solid Recession Proof Business Model Customer Wednesday: How to Make Money in an Economic Downturn People Thursday: Recession Proofing HR - How to Do More With Less Build out every existing and missing process - all positions must be process based, not based on function or department Understand the power of SOPs (Standard Operating Procedures) Owner Friday: First Principles - A Business Owner’s Survival Guide in an Economic Downturn

EPISODE 15: How to Make Money in an Economic Downturn Chapter 8: Standard Operating Procedures Chapter 12: Position Descriptions Chapter 16: People In The Game Chapter 20: Management By Objectives Chapter 24: Business Acumen Training Chapter 28: Shared Financials Chapter 32: Line of Sight Chapter 36: Personal Scoring Chapter 40: Variable Compensation - Margins Centers Chpater 44: Variable Compensation - Profit Centers Chapter 48: Manage By Meeting Chapter 52: Summary & Implementation Plan

EPISODE 16: How the Book, Shows, and Podcasts Work Together We, the IBGR Network, has been using a very simple business model for content creation - make it once and use it multiple times. We looked at the best practices for business talk radio shows, podcasting, and creating eBooks. Then we built a process that integrates all 3.

That lesson is the basis of the Series Recession Proof Your Business. Instead of a weekly show, we have decided to take the subject through all 5 days using our balanced scorecard model. Every Monday we tackle what you need to do on finance, on Tuesday what you need to do for operations, and so forth. That means we will address Recession Proofing from 5 different perspectives and 65 shows. Each show is supported by a LIVE podcast for later review as part of the process of taking what what we provide and using it as it fits your business.

Our support system are the two Private Groups on LinkedIn and Facebook to move the conversation from one-way to creating a dialog and relationship with you. All you have to do is download the pre-release of Recession Proofing Your Business and listen to the podcasts. Our goal for the series is for you, the entrepreneur, to have a proactive plan to use the economic downturn to your advantage.

If you have questions post it here in the comments section or join our groups. Our handle on Facebook and LinkedIn is the same - ibgrnetwork.

See you there.

Next Operations Thursday - Chapter 8: Standard Operating Procedures

EPISODE 12: How the Book, Shows, and Podcasts Work Together

We, the IBGR Network, has been using a very simple business model for content creation - make it once and use it multiple times. We looked at the best practices for business talk radio shows, podcasting, and creating eBooks. Then we built a process that integrates all 3.

That lesson is the basis of the Series Recession Proof Your Business. Instead of a weekly show, we have decided to take the subject through all 5 days using our balanced scorecard model. Every Monday we tackle what you need to do on finance, on Tuesday what you need to do for operations, and so forth. That means we will address Recession Proofing from 5 different perspectives and 65 shows. Each show is supported by a LIVE podcast for later review as part of the process of taking what what we provide and using it as it fits your business.

Our support system are the two Private Groups on LinkedIn and Facebook to move the conversation from one-way to creating a dialog and relationship with you. All you have to do is download the pre-release of Recession Proofing Your Business and listen to the podcasts. Our goal for the series is for you, the entrepreneur, to have a proactive plan to use the economic downturn to your advantage.

If you have questions post it here in the comments section or join our groups. Our handle on Facebook and LinkedIn is the same - ibgrnetwork.

See you there.

Next Operations Wednesday - Chapter 7: Data Based Relationships

EPISODE 11: How to Make Money in an Economic Downturn

Chapter 7: Data Based Relationships
Chapter 11: Promise Gap
Chapter 15: Recovery Gap
Chapter 19: Personnel Gap
Chapter 23: Inside the Customer
Chapter 27: Process Improvements
Chapter 31: Customer Relationships
Chapter 35: Customer Inside
Chapter 39: Agile Projects
Chpater 43: Co-Development
Chapter 47: Co-Testing
Chapter 51: Summary & Implementation Plan

EPISODE 10: The Schedule (65 Shows)

Finance Monday: Recession Proofing Your Cash Flow in 13 Weeks
Operations Tuesday: Cut Costs & Develop New Offer - A Solid Recession Proof Business Model
Customer Wednesday: How to Make Money in an Economic Downturn
Assessing what data is currently collected
Organizing the data in a common location with shared employee access
Audit for both qualitative and quantitative data
People Thursday: Recession Proofing HR - How to Do More With Less
Owner Friday: First Principles - A Business Owner’s Survival Guide in an Economic Downturn

Book & Series: Recession Proofing Your Business

Chapter & Show 3 - Introduction: How to Make Money in an Economic Downturn

EPISODE 9: Summary

During an economic contraction, it is essential to strengthen relationships with your core or most profitable customers and suppliers. It is an opportunity to gain favorable terms from suppliers and hold on to the customer business. Gaining favorable terms and holding onto great accounts is essential when the economy is contracting. Strengthening the relationship with suppliers is applying the concepts from the Cash Flow Management Funnels. Strengthening the relationship with customers is applying the concepts from Lowest-Cost Producer.

Making Money in a recession starts with holding your customer base as much as possible. Given it costs five times more to gain new accounts and hold customers with existing relationships, it is a proven method of minimizing risk. The place to start or build upon is ensuring the relationship is data based to identify the best opportunities to improve your offer and prices. The next step is to bring this expertise to customers who can benefit from the same cost reduction and relationship improvements. Once you have shown your ability to help them, look for opportunities to bring them inside your operation to do the same. BTW - this also applies to suppliers.

Show Objective

Given a contracting economy with diminishing business opportunities and inflation devaluing the currency, we will demonstrate the need to strengthen the core of the business to not only survive, but thrive.

EPISODE 8: How the Book, Shows, and Podcasts Work Together

We, the IBGR Network, has been using a very simple business model for content creation - make it once and use it multiple times. We looked at the best practices for business talk radio shows, podcasting, and creating eBooks. Then we built a process that integrates all 3.

That lesson is the basis of the Series Recession Proof Your Business. Instead of a weekly show, we have decided to take the subject through all 5 days using our balanced scorecard model. Every Monday we tackle what you need to do on finance, on Tuesday what you need to do for operations, and so forth. That means we will address Recession Proofing from 5 different perspectives and 65 shows. Each show is supported by a LIVE podcast for later review as part of the process of taking what what we provide and using it as it fits your business.

Our support system are the two Private Groups on LinkedIn and Facebook to move the conversation from one-way to creating a dialog and relationship with you. All you have to do is download the pre-release of Recession Proofing Your Business and listen to the podcasts. Our goal for the series is for you, the entrepreneur, to have a proactive plan to use the economic downturn to your advantage.

If you have questions post it here in the comments section or join our groups. Our handle on Facebook and LinkedIn is the same - ibgrnetwork.

See you there.

Next Operations Tuesday - Chapter 6: Achieving Lowest-Cost Producer

EPISODE 7: Strengthening Your Core Operational Topics

Chapter 6: Achieving Lowest-Cost Producer
Chapter 10: Cost of Purchased Inputs
Chapter 14: Capital Costs
Chapter 18: Operating Costs
Chapter 22: Margins
Chapter 26: Forward Channel Costs
Chapter 30: First To Market With A Winner
Chapter 34: Design A Winner
Chapter 38: Never Build On Spec
Chpater 42: Building Alpha
Chapter 46: Beta To Omega
Chapter 50: Summary & Implementation Plan

EPISODE 6: The Schedule (65 Shows)

Finance Monday: Recession Proofing Your Cash Flow in 13 Weeks
Operations Tuesday: Cut Costs & Develop New Offer - A Solid Recession Proof Business Model
Cost Reduction Topics:
Value Mapping
Moving from “AS IS” to “TO BE”
Making process improvements is a collaborative process
Customer Wednesday: How to Make Money in an Economic Downturn
People Thursday: Recession Proofing HR - How to Do More With Less
Owner Friday: First Principles - A Business Owner’s Survival Guide in an Economic Downturn

All the evidence is the United States, and therefore the world, is on the edge of a recession. This is a fact that business owners don't control, except in response. Using the perspective of managing the business based on the economy, there are two rules: in a (1) contraction - strengthen your core to (2) gain a multiple in the next expansion from processes under control and therefore better margins.

Book & Series: Recession Proofing Your Business

Chapter & Show 2 - Introduction: Cut Costs & Develop New Offer - A Solid Recession Proof Business Model

EPISODE 5: Summary

During a recession, unless you are selling necessities, you can expect a reduction in customer spending or losing accounts though no fault of the business. The key is to use the adverse economy to strengthen the core of the business - the variable cost processes that affect margin and fixed cost processes that impact profit.

Cutting Costs starts with value mapping your core variable cost processes, then eliminate steps and time to improve quality. This is the same process for fixed costs; value map your core fixed cost process to eliminate steps and time to improve quality.

Show Objective

Given a contracting economy with diminishing business opportunities and inflation devaluing the currency, we will demonstrate the need to strengthen the core of the business to not only survive, but thrive.

EPISODE 3: Strengthening Your Core Financial Topics

Chapter 5: Basics of Financial Reporting
Chapter 9: Establishing BEP - Break Even Point
Chapter 13: Activity Based Costing
Chapter 17: Cash Flow Cycles
Chapter 21: JIT+ Inventory
Chapter 25: Accounts Payable
Chapter 29: Accounts Receivable
Chapter 33: Credit & Risk Managment
Chapter 37: Cash Flow Forecasting
Chpater 41: Financial Scorecard
Chapter 44: Crypto for Transactions
Chapter 49: Summary & Implementation Plan

EPISODE 3: Strengthening Your Core Financial Topics

Chapter 5: Basics of Financial Reporting
Chapter 9: Establishing BEP - Break Even Point
Chapter 13: Activity Based Costing
Chapter 17: Cash Flow Cycles
Chapter 21: JIT+ Inventory
Chapter 25: Accounts Payable
Chapter 29: Accounts Receivable
Chapter 33: Credit & Risk Managment
Chapter 37: Cash Flow Forecasting
Chpater 41: Financial Scorecard
Chapter 44: Crypto for Transactions
Chapter 49: Summary & Implementation Plan

EPISODE 2: The Schedule (65 Shows)

Finance Monday: Recession Proofing Your Cash Flow in 13 Weeks
Operations Tuesday: Cut Costs & Develop New Offer - A Solid Recession Proof Business Model
Customer Wednesday: How to Make Money in an Economic Downturn
People Thursday: Recession Proofing HR - How to Do More With Less
Owner Friday: First Principles - A Business Owner’s Survival Guide in an Economic Downturn

Book & Series: Recession Proofing Your Business

Chapter & Show 1 - Introduction: Recession Proof Your Cash Flow in 13 Weeks

EPISODE 1: Summary

Strengthen Your Core: minimize your exposure and build a bad weather fund, look inward and get back to basics to reduce cost and hold present employment, enhance customer relations, and co-develop with customers a new improved / new offer.

Show Objective

Given a contracting economy with diminishing business opportunities and inflation devaluing the currency, we will demonstrate the need to strengthen the core of the business to not only survive, but thrive.

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