What is a Good Leader?

When people talk about leadership they are often talking about the title or the personality of a leader. But real leadership is about a set of behaviours which we see and value in others, and can exhibit ourselves.  Real leaders lead not because of their title, but because of the authority they develop in others.  So, what is a good leader in business today? 

Lead Yourself to Lead Others

Leaders today are selected not from the oldest or those ‘in favour’, but from those whose behaviours reflect the values the business believes in. Successful leaders exhibit their leadership traits through their behaviours and actions which people chose to follow. These behaviours are seen as a set of value-based leadership skills. True leadership is therefore earned authority from your peers. 

What people stand for and how they behave therefore matters in assessing people’s leadership skills. 

Doing the right thing even when no-one is looking, is an excellent first place to start when looking at a leader living their values. How you lead yourself is the first and most valuable assessment any leader can make.  If you cannot lead yourself, how can you lead others?  

How you lead others therefore often starts by looking at how you lead yourself, with self-reflection. Do you as a leader look to find multiple viewpoints from across the organisation, or do you bunker-down with a few trusted voices?  Bringing in balance and inclusion is the most successful way to gain a complete understanding of potential outcomes of any critical decisions. It is also the most effective way to carry people with you as a leader, especially in today’s flat, diverse and skill centred organisations.  

Confidence and Humility 

Demonstrating your self-confidence in your abilities while simultaneously recognising and confronting your limitations through mentoring and coaching in developing those additional needed skills as well as counterbalancing them through a balanced team skillset is also vital for successful leadership. Leaders must be seen as human and recognise what being human means in their leadership.

This humility factor in acknowledging the whole team contribution in everything you do, is seen as a vital leadership skill in todays’ workplace.  Leaders who genuinely value their team create a positive team culture build stronger organisations, which both trust and enable people to dream, do and become more. In cultures such as these the leader becomes invisible as the culture becomes the defining driver of success. 

Successful Leaders Create Leaders

Successful leaders develop people who follow them, not obey them. In many of the most successful cultures leaders want people to challenge them as this makes decision making more robust and sustainable.  Inside positive leadership cultures there are often many leaders, leaders are trusted and respected, and often sit in various roles within the organisation.  

Leaders must also create collaboration and cohesion within their team to build in all the skills the leader will need to succeed within their role. Finding and pulling together the right group of people to create a winning team requires creating a common vision of where they are going that brings together the 3C’s of cohesion co-operation and ultimately collaboration.  

The process of collaboration maturity recognises the need of co-ordination of disparate people who must co-operate for mutual benefit and then will actively collaborate to achieve a shared outcome they could not achieve without each other. Collaboration maturity occurs as the team embeds this relationship into a single operation respecting and valuing each elements valuable contribution.

 

Leadership Model

 

Strategic Responsibility

Ultimately leaders are responsible for everything that happens within a company.  They are solely responsible for setting the direction, the strategy, and the prevailing culture within the organisation. That ultimate responsibility leaders must develop and own. They may take advice but they cannot look elsewhere for responsibility for the strategic decision making.   

 

Leadership Behaviours 

Leadership is a set of personal attributes which inspire others to behave. While leaders need to remember their humility, they do also need to adapt their leadership style to respond (or drive) situations. Leadership styles must also adapt to whom they are leading. Different people respond to different situations.  The idea that one style of leadership will work in all situations, is not true. 

Leaders also need to flex their leadership style based upon situations. While the humble leader is the ideal, it will not work with all people in all situations. So, leaders need to be able to create and deliver influence across all their spheres of influence. Leaders must adapt their leadership style both to influence diverse audiences but also to deal with the situations they face. 

Situational leadership is as much an art as a science. Predicting and reading situations is a learnt skill which leaders need to develop over time and through situations. Either through shadowing roles or through scenario planning being able to stay objective and understand what situational leadership skill you need to deploy to achieve the required outcome takes time to learn.   While each leader has their natural style they must also be able to adapt to motivate different types of people and different situations, moving from reflective / humble leadership styles to directional and pacesetting when needed.

Leading People 

Creating and leading teams of people takes time and effort. Team building was often seen as the occasional activity to bonding, recognising, and rewarding.  Today team development is on ongoing exercise, not the once-a-year review, but a continual mentoring approach supporting people develop and evolve into their role and through their role as it evolves over time. 

What used to be called Forming, Storming, Norming and Performing function of team building has been replaced by the view of continual team development. It is a supportive process that supports everyone as individuals, small cohorts as well as whole units to excel within their environment. Leaders today must now focus on barrier removal and building resilience within their people and teams to enable them to achieve their goals. 

The focus today for leaders is on outcomes not outputs. It’s easy to be busy, but to achieve planned and desired outcomes as bottom-line results teams require leaders they can trust, who are accountable, provide commitment and remove conflict. 

 

Successful Leadership 

Leadership is like any skillset, it can be learnt and developed. It is best developed within the culture of the organisation within which that leader will emerge as a leader within. But it does not have to, and often bringing skills learnt elsewhere is a great way to develop new leadership skills within an organisation. Becoming a leader should not be the end of someone’s development, but the start of their leadership development. 

If you would like to know more about how we help leaders lead, then get in contact with us here Richard@cowden   

 

The Skills Needed In Being a Company Director 

The Skills Needed In Being a Company Director

Having director in your job title is highly desired, but few people thing about what it really means. Apart from the legal responsibilities and added pressure of running a business, it is also a difficult role, often with little or no training or support. Suddenly you are in charge of everything, where the buck really stops, and everything you do is observed, judged and analysed. The decisions you make dramatically effect the whole business, and often or not not making a decision has the biggest impact upon the success of otherwise of a business.     

Directors have many roles to take on board, from leading the whole operation, the big picture of where the business is going, through to working with other senior people and ultimately taking ownership of achieving results. Directors are also responsible for taking charge of staff, developing and implementing succession planning and being seen as the public face of the company, directing is an all encompassing role requiring new skills to ensure success.            

Directors are ultimately responsible for all elements the business, not just the bit you like and know well. Being a director is about owning the whole operation. 

Director 100 Day Challenge 

Directors and owners of business are also responsible for taking ownership of where the business is going. This often overlooked role is vital, the 100 day challenge often determines success in publicly quoted companies (FTSE 100+) but is true in virtually every company. The director 100 day challenge is where a new leader has their business honeymoon. But it is not the time they get to settle in but the time they get to come up with the future of their department, their team and ultimately the business.

This is the window of opportunity directors and new senior people get to start to lay down where they are going and to turn their promise into a tangible vision of where they are going to take the their division or business during their tenure.  During this small window they have to connect and built their leadership team, secure existing roles and outcomes, meet the stakeholders to reassure and listen to them, as well as start to formulate where they are going. 

That window of 100 days is given to them to allow them the space to take ownership of the role. It allows leaders to get their feet under the table, assess what is really going on and who is whom within their organisation before making any real changes. The need for change has already been explained to them, that's why they are there, but what, how and when is left up to the new leader to assess and implement.  

Directing is a Difficult Job

Directing is a difficult Job, rarely supported or understood. It is very different from being a manager, yet the most common people promoted up to direct companies are good managers. Yet the roles are very different, directors create and direct the plan, managers manage the delivery of the plan.  

The key questions every director needs to answer and keep asking and answering are: 

1. Where are we going?
2. Why? and finally 
3. What is my plan to get us there?    

For every business, for every department having a well thought out detailed and deliverable vision is the single biggest role anybody in a leadership position must have and be able to create and deliver effectively. Knowing where you are going is the key role people look at leaders to deliver.   

For a director it is about making change happen to deliver tomorrow's results.  Directors must lead the organisation of where they are going. That means making tough decisions about what to focus on, who is going to do what, or even stay in the organisation should that be needed. Some decisions are therefore tough job in making change happen.

Director's Vision 

If a director has no vision for their business, how are they and the people they lead going to find their way?

Determining the direction of a business with a clear vision is down to the director to achieve developing and being able to communicate and convince people of where and why they are going in that direction. people like Steve Jobs developed his clear vision of the future in the same way as Graham Honeyman who turned Sheffield Forgemasters around in 6 months from a loss making business into one the world's finest high-value steel makers and went on to grow it through his clear vision and leadership. 

  

It is difficult to lead successfully with a clear vision, supported by a demonstrable plan to turn its into reality, fail to plan and you are left with a dream of what might have been. Fundamentally it is up to leaders to make things happen and lead from the front towards that goal.  

"If you don’t make things happen, things will happen to you". Lanes Company

For Directors Standing Still is NOT an Option

If anything happens it is you who is being viewed as to your response, assessed and judged. A do nothing approach to the directing role is seen as abdication, while the Don't Panic Carry On approach leaves everyone wondering what your role is. 

In every sector of every business the only certainty is CHANGE. Are you at the forefront of that change or follow that change, but you cannot ignore it. Someone, the person in charge, has to move that business forward.       

"Every time we've moved ahead in IBM, it was because someone was willing to take a chance, put his head on the block and try something new."

Thomas J. Watson, executive

To make change happen, you need to plan it out and engage with everyone so they know not only what they are doing differently and how, but most importantly of all why. 

Why standing BACK is vital for Director Success

To go forward successfully then firstly step back and give yourself some space and time to  see the big picture of where your markets are going and where you want to take your business. You need to remove yourself from the fighting in the trenches role of day-to-day business so you can start to evaluate where you want your business to go. 

Use appropriate planning tools to assess your position, your options and the opportunities available to the business. If you need to know more about planning tools, then drop us a line (click here) and we will be delighted to discuss your needs.  

Good planning does not only see what's in front of you but also sees beyond the horizon of where your markets and industry are going, so you can start to see the foreseeable future, with various degrees of confidence. Turning dreams into reality, from Steve Jobs to Graham Honeyman you have to have a dream and create a workable plan to turn it into the reality you can deliver.

"So many of our dreams at first seem impossible, then they seem improbable, and then, when we summon the will, they soon become inevitable."

-- Christopher Reeve, Actor

Looking to learn how to take the guess work out of your business success? Then get in touch to discuss your development programme, click here: www.cowden.com 

Directors role documents from Business link 

Contact Cowden: @ Learn more about Richard Gourlay

SaaS Strategy: Where are we Today, and which Pricing Model is Right for you.

SaaS Strategy: Where are we TODAY, and which Pricing Model is Right for you NOW? 

Back in 2012, I wrote an article (on this blog) about the potential future of business in the internet age, called The Internet Tsunami. Back in 2012 as we emerged from the infancy of the internet I stated that the internet would become a major business channel for all business sectors not just music and insurance. It was no longer a passing fad.  Back in late 1990's we saw the internet emerge from having been a research tool to something which people could experience through to the dot.com boom of the early 2000's when money flooded in to this emerging market but the infrastructure and customer engagement platforms were not ready preventing online becoming more than a side show for businesses.

After the financial crisis of 2007/8 as the economic bounce-back accelerated change in the economy opening the door to the internet age and it began to take shape. My article in March 2012 suggested that what we were seeing the beginnings of the permanent change across all sectors and markets, it was not just Amazon replacing CD music shopping, but that the world was going to change. 

The SaaS Tipping Point 

The technology tipping point has occurred and it has become the dominant force in driving consumer behaviour. This paradigm shift is when markets move in response to macro factor drivers. For companies going too early with any trend they commit in concrete to a technology which leaves them left behind as the internet evolves (for example Friends Reunited: no interaction and on-going relationship creation, as Facebook found is what makes a successful online social media platform), go too late and you miss the market move and find out you have been left behind (Comet sold electrical white goods and collapsed with over 20% of the UK market share through its 200 stores, but refused to see the move online for these goods by younger consumers, while Amazon at the time had already achieved 8% of the white goods market with no physical shops). 

If you can see a trend you have already missed it.  Once the tipping point has been reached in any trend then you are playing catch-up. So over the last 9 years the internet has not just become another channel to market for many goods, it has become the dominant channel for many sectors most noticeably in retail, but is now almost ubiquitous, impacting upon every market. 

The ability to take products and services online is now in full force with organisations inventing themselves, reinventing themselves as online (SaaS) business models. For many this is a result of a number of key factors, not least is about keeping up with your customers and the competition. But, other key factors such as the reduction in cost of developing online services, as well as the ability to upgrade services quickly in response to rapidly changing or evolving customer demands are other positive drivers of moving online.

Making the shift to go to a SaaS solution is a strategic one, it should be based upon a clear strategic assessment of the market and customer needs and carefully planned out in a detailed business plan.   

Software As A Service SaaS 

Software as a Service (SaaS) solutions are now common across all sectors replacing manually made service offerings. For many businesses replacing, upgrading and being able to compete within their sector requires companies to move to SaaS offerings. Either bespoke designed SaaS from scratch using in-house or outsourced technicians or tailored from white label sector providers. Offering a SaaS solution to a market is not just a shift change in what an organisation offers but a whole new way of thinking. Too often taking the product online is seen as a cost effective way to compete, or stay in the game as others do, or as a way of trading without barriers expanding the brands reach in an internet dominated world.

SaaS though is more than just simple a move online.  It requires a different way of thinking from traditional models. The changing nature of customer engagement, moves from the physical meeting to the online engagement, that requires companies to think and act differently. The nature of the service also changes as it becomes totally arms length customer centric. Customers choose when and what they want to use of the service (for example over 2,700 UK people did their tax returns on Christmas day in 2019, with over 30,000 doing them over the Christmas holiday period in 2019), this requires companies to resource supporting users when they need it not when you are open. 

Business to consumer SaaS models need to support consumers with planned engagement and support channels as well as developing SaaS loyalty strategies in place to retain and develop customer segments. For B2B SaaS models working across partner channels puts a set of different requirements in place in accessing target audiences through integrated service offerings through integrated software .

SaaS behaviours also require business to measure very different metrics to be successful,  many of which are new to companies not used to SaaS solutions, but if you do not measure them SaaS will fail to deliver the results you expect.  Here are some of the key areas for SaaS businesses to monitor and drive decision making from.

Successful SaaS Solutions Start with Minimum Product Viability (MPV)

SaaS achieving its Minimum Product Viability MPV is an essential must have which is not often measured early enough. The principle idea which business leaders are told is that with SaaS 'build it and they will come mentality," but they won't if you don't compete.  Just being an online service does not make your product achieve success. So MPV is often misunderstood as do what we have to do to be a player within the market. 

SaaS MPV metrics need to be clearer. If you take your service online is must do more than exist. Now I am not saying it needs to be perfect, over-polishing a SaaS solution is one of those very dangerous assumptions we will come onto shortly, but simple migration of a product online is not a SaaS MPV.  For Minimum Product Viability to be achieved a SaaS solution must actually compete within the market. It must win existing or new customers for it to achieve MPV status. Too often the model of lower cost looks good on paper, to the accountant, to the competitor analysis and trend analysis but without actually being able to win target segment customers.  

Built and they will come mentality often leads to the knee jerk reactions from companies to offer discounts to customers to gain traction. The downside of that is that the predicted margin gains aren't met and if you give it away, customers then do not value it so engagement is low, and the other major problem is that once the opening price is set to gain traction particularly form early adopters who usually are premium customers,  it is difficult to recover that market price unless you have large marketing budgets to support the opening offer discount.        

Measuring MPV requires leaders to not only check it works (and that is never a given with IT) but also that it achieves MPV as an offering. Does it do what it needs to do for the customer.  Does it meet the complete customer requirement of the value proposition, so do not just focus on the pure IT but on the whole value proposition to measure the MPV status. Test it with pilot groups, measure not only it looks good, but does it replace what they were doing? If not it needs to do more.

SaaS Solutions Being a Disrupter

To achieve SaaS MPV, a solution must disrupt the structure of the existing market. Being a disrupter within a market sector was easier with first mover advantage, but now in virtually every market that has been lost, SaaS solutions need to use the whole marketing mix to achieve MPV and not rely on opening offer pricing. 

Disrupting any market requires your SaaS offering to target and penetrate precise target segments and disrupt the existing market.  Focus on measuring the disruption your new offering is causing. Are you reaching your core target audience with your new offering and taking customers from the competition, or protecting your vulnerable customers with you new offering. Disruption is about changing people's perception and behaviour patterns. So it is important to measure the existing behaviours and their new behaviours using the SaaS solution. 

Just shifting your existing customers online maybe a strong defensive strategy if your are the last to move into SaaS, but that is not a disrupter. To disrupt a market you have to do something which changes the game. Changes the structure, the dynamics and the value proposition within the target audience. 

SaaS solutions MUST do MORE

SaaS solution need to offer more to customers within their sector. Providing a bigger solution, not just to the existing need but to wider segment needs should be built into the SaaS solution. Even if not a MPV points the potential to move online must drive engagement, through community, through advice and support to enable SaaS to add real value to target segments. 

Building more into a SaaS solution can be undertaken at low or no cost if planned in early, and is essential. SaaS solutions need to build in evolution so that they can evolve in response to customer evolving demand, competition short-term and long-term responses and to life-time evolution needs. Being able to add in and evolve a SaaS solution to a complete solution is essential so it offers a complete long-term solution, not just a quick fix. That requires several micro launches, (evolutions) to meet theses needs and to enable the SaaS solution to add more value (value proposition). 

Measuring why, where and who is using the site for what as well as forums and associated features will tell you the full value you could, should and must offer. Often support functions such as help desks, brochures, technical information, support functions as well as best practice and associated activities are always areas where doing more can be seen, but only if you measure it! What about training and certification of users and channel partners, and the whole range of other activities which these intranet offerings can also provide?

SaaS target the right segments.       

Moving to SaaS is not a straight line. Build - test - launch sit back and watch them come onboard is how SaaS is sold to CEO's in shifting to SaaS solutions, but that is not how SaaS adoption works. Adoption curves matter, so identifying who and when segments will move over to SaaS solutions is vital and plan out the adoption by target segment.

The challenge is that the key drivers of SaaS solution within an organisation comes from specific segments and so migration plans need to be reflected in the SaaS rollout and marketing adoption planning.  Adoption curves for SaaS should be planned in early so that realistic and appropriate marketing for SaaS solutions inform and determine metrics of success.    

Who are the core target segments that SaaS solution should be targeted at?  This core question is often lost in the generic answer everyone! But it is not. SaaS solutions must add value to everyone, but they must be focused on converting the businesses strategic target audience. That focus must be at the heart of the SaaS solution design and implementation, if you win more great but your focus is to move the brand's customer base. 

For success SaaS solution moves the brand's position, its profitability and its performance by acquiring new higher value customers. Higher value customers in both B2B and B2C environments for mainstream players are usually found higher up the adoption stream. So laggards find growth in volume and value in teh late majority (see below for market adoption curve and total market size modelling). Late majority players can already win downstream laggards but need to expand by either growing with their sector or by moving into early majority customer segments, and likewise early majority customers look at high value (but smaller total volume) early adopters. 

The key measurements here are to identify the precise target segments you intend to win, and measure that  as your metrics of success. Do not just measure total customers as this can inflate your SaaS success. While total numbers always looks good, it mayn't be profitable and can often lead to SaaS platforms being pulled into chasing total numbers not focusing on developing profitable long-term customers. This is typically seen when a new SaaS platform has to buy its customer growth, so people see the growth as success, but it can be boring through their cash reserves as they have focused on the wrong metrics. 

Profitable target customers support growth of a SaaS solution must be measured to see if the strategic goal is being achieved. 

SaaS Pricing Models

There are several ways to price your SaaS solution which we are break down into 5 key models, each reflecting the market your SaaS operates within, your competition and the solution you are providing to whom. Here are the most effective SaaS pricing models and the pros and cons of each with their key features::-

1. Flat Rate Pricing

The most common and simple, often replacing a previous non-SaaS solution. It is simple and effective, easy to use price to incentives by allowing target audiences to compare the value proposition. The difficulty in this model is that it is difficult to add value to target audiences, such as high-use or high-value customers. Some SaaS pricing models then try to add premium models to this, by adding a second solution to enable extra features and pricing to the offering, but this often creates technical and is difficult to migrate customers across to. 

2. Usage Based Pricing 

Usage based pricing is popular and provides an ideal way to price your SaaS solution. It enables pricing scaling, the more your company use, the more you value you consume, the more you pay. It allows low cost acquisition and then scale-up in pricing towards target audiences. This also enables additional levels to be added and funded through growth as usage drives demand.  Usage based pricing also reduces and often removes barrier to entry as the SaaS platform accounts for a wide-range of customer segments, from new entrants through to high demand heavy user groups. 

Usage based pricing does have some limitations. The moving up levels (and down) can be challenging for customers to see what they get for the price they pay. The key area of concern for a SaaS Solution using this model is that monthly revenue, a key metric will vary and is therefore not popular within the sector as predictable revenue is often a core demand for investors.   

3. Multiple Tiered Pricing Models

One of the most effective models as it allows the SaaS platform to be priced to target audiences using tiered pricing. Tailoring different packages around target audiences enables the SaaS platform you can appeal to multiple audiences. This has a key second advantage in revenue generation as you maximise revenue across all channels to market. It also allows simple clear and honest upselling opportunities as well as add-on pricing with new features/levels being added in response to changing demands. 

Key factors to be be aware of here is having too many pricing levels. Just because you can does not mean you should. 3 is optimum and 5 is often seen as maximum, the more you add the higher the abandonment rates and the lower the effective of marketing campaigns. 

The idea of dynamic pricing, too many tiers leads towards a platform that looks like usage pricing which dilutes and degrades the tiered pricing focus on key target segments, vital for strategic success of a SaaS solution. The other downsides of too many packages is that trying to over target segments damages the focus on the tiered model, confusing customers through too many choices and damaging price effectiveness by not reflecting tiered pricing to deal with heavy use customer groups.   

4. User Pricing

The fourth pricing model moves away form company wide pricing to the end user. This model is ideal for many sectors where simple pricing wins customers over. Wether that is a fixed annual or monthly fee, its simplicity and logic engages with SaaS platforms whose offering of a direct pricing model allows customers to sign-up as individuals. 

User pricing is popular as it is predictable in income and scales easily with numbers. This predictability makes it popular but needs to be internally measured by usage by individuals to see what value they generate from the platform. 

While simplicity makes it popular it is also its major limitation as a pricing model. Per user charges means that there is little opportunity to get group buy-in as one person can use the platform and share the results. The inability to signup whole teams as one limits routes to market through channel partners. It also means that churn becomes a major factor as it is harder to control churn as people relate use to value as an individual.    

5. Active User Pricing

Is a variant of of user pricing but works by charging for people actually using the SaaS platform. It is seen as excellent value for money as it removes risk for purchasers as sign-up does not cost. This drives engagement and adoption as it is only usage which is charged.  People can sign-up but do not pay until they actually use the platform, it is ideal for enterprise business models. 

The downside of active user pricing is that it is difficult to grow outside specialist enterprise areas. Often premium priced as a live service it is difficult to encourage widespread adoption with teams or across sectors.       

6. Per Feature Pricing

One recently developed and rapidly growing variation on this theme is called per feature pricing. Customers of businesses pay a subscription fee, a base fee with limited functionality which achieves MPV and adds value and then differing premium priced add-on features which either replace the need for multiple upgrade options or allow a SaaS solution to adapt with its own specialist feature cost model expansion. 

This model encourages customers to upgrade to unlock additional functionality which allows segment specialisation and directly relates those functions to direct costs.  This per feature pricing model allows sites to know their operating cost models and revenues of the base model, and enables cost scaling for bespoke areas that may take significant resources to develop. Sub-segmentation by feature is popular as it allows cost to value to be direct and then reverse rolled back into the SaaS site as it evolves as a cost-free upgrade.   

The key challenges of cost per feature pricing is that SaaS solutions can be pulled by small segments away from their core model to meet these minority groups. The other challenge of per feature pricing is that of customer frustration as key features are at a premium.  

7. Freemium Pricing

Saving one of the most popular and misunderstood to last is the freemium model. This model allows customers limited functionality the SaaS solution platform for free. This enables mass adoption through any market of the SaaS platform with a clear level of functionality which buys users in. It is ideal for large volume platforms such as social media channels as the model removes the key hurdle to volume customer acquisition. 

Freemium  gets customers bought in for nothing as there are no barriers to entry and this supports rapid expansion through and across channels, but it does limit value adding at the freemium level. Encouraging customers to trade up and use the additional chargeable features is teh real challenge  

Revenue is the real looser here for companies. This makes it less popular with funding parties as conversion to revenue is undefined within this model.  To fund freemium SaaS models multiple funding systems are often adopted, such as smart algorithm advertising which is an ideal way to fund expansion.    

With freemium sites high churn rates and low loyalty rates are major drain factors to this model, both of which make traction and the ability to encourage customers to upgrade difficult. Funding to support the core functionality is often under pressure to keep it developing and engaging with the volume of its core customer base. 

Summary

SaaS solutions are now mainstream to nearly all business and customer segments. Being mainstream though does not mean that the risks have disappeared, in many ways they have increased as expectations have accelerated as audiences demands have risen.  

Whichever SaaS pricing model you adopt understand that they all come with risks which need to be understood and actively managed within your planning.  

SaaS solutions must be part of a strategic process for leaders to understand and deal with. One area that many leaders do not fully appreciate is that building an experienced SaaS team around them is a prerequisite for success.    

Learn more read further blogs or get in touch to see how I can assist you.

Learn more at www.richardgourlay.com

Why Plans Don't Work: And What To Do To Make Them Succeed

Why Plans Don't Work 

Why Plans Don't Work, 

Here's Why And What To Do To Make Them Succeed. 

Leaders often say they have a plan, it can be written down or in their head. Sometimes they have great names, from action plans, to project plans, to business plans.  When I visit clients I am often presented with plans, ideas and concepts all in some state of existence. Some are online share documents with many contributors, several revisions and are carefully annotated graphs and charts, others are glossy brochure plans with pull out action and implementation plans.  

But Plans don't work!  A plan of any kind is just some works (images graphs etc) to make change happen. But plans do not make change happen. Plans only show the steps to make change happen. To move the company from where it is today too somewhere new. But that does not make change happen. That just moves people out of their comfort zone to somewhere where they are not comfortable.  

Habits Matter More Than Plans

Plans make change, but don't make change happen.  ITs what happens next that matters if plans are to work. Taking people somewhere new is interesting but getting them to stay there and thrive is the real goal of any vision. It is the afterwards that matters if change is too be sustainable. If you want people to perform in a new way it's making those new ways their habit that matters.

Habits matter because that is where change becomes the way. Habit is what matters in making change happen. The biggest driver of people's behaviours is creating new habits, but these do not feature in business plans. Habits are very powerful but business plans, action plans and implementation plans fail to have habit forming built into them.      

Habits are why people do things. Habits are why people are reluctant to implement real change. Habits are the most powerful driver in people's behaviour. Habits are often more powerful that people's desire to succeed in making change happen.  Employees are often open to change until it becomes something they have to do differently to their habits. 

Plans Fail. 

Habits are a lot more powerful than someone else telling you to change. This is why plans fail. Even if people see change as necessary they will agree that change needs to happen they often fail to embed it, preferring to go back to what they know, like and have always done, they kept their habit. 

"Plans change processes but fail to change peoples' habits."  

Changing habits needs to be built into a plan. The changing habit phase is rarely, if ever identified until after the plan has failed to succeed. Look at why plans fail and the most common and frequent reason given is the failure to change peoples' habits in implementing change. 

Creating and sustaining change requires plans to build in habit changing as part of culture change. Habit changing     takes time and needs to be planned out over the long-term not a short-term fix.  A plan saying we will change this process next week, is unlikely to succeed if it has been around for a period of time and is part of people's habits and is supported by the existing culture. 

The Power Of WHY

Simon Sinek has outlined the importance of why change is being made as a driver of supporting change. Leaders' must provide context, the WHY change is happening not just WHAT and HOW. The power of why is an essential underlying rationale which changes the relationship between leaders and employees, buying them into the strategy, rather than them being kept in the dark on a need to know basis of information.

Leaders need to understand that plans don't work, but people do when they are doing something they love, in a way they control for a cause they believe in.  

Plans are meaningless unless they carry everyone to somewhere they can create new positive habits. When you remove those habits you alienate your people. 

Changing Habits Takes More Than A Plan

Here are a few ways I have found to make plans really work, to get them beyond the page, implemented, and embedded with new habits in place.

Leadership Behaviours

]Leaders needs to act as ambassadors of change and provide new habits for people to adopt and ideally develop their own new habits within the new model which the plan determines.  Leaders need to proactive lead from the front in creating a new culture, being and developing role-models of the right behaviours and habits in each department so those role-models can be seen and modelled against.   

Recognition And Reward

Recognition is also a key element of habit forming, recognising and rewarding the right behaviours is central to bring the new way of working. Too often leader's spend too long penalising those not doing the right stuff rather than focusing on people doing the right behaviours.   

Burn Bridges

Burn the bridge of the old ways, change everything that needs changing with no going back or slippage options. This drives new behaviours which can be supported and allowed to develop.

Zero Tolerance

Zero and immediate corrective action to keep people on track with the new behaviours and performance which the plan requires. Do not let people have leeway in moving to the new way of doing things. Leaders must not just lead but also carry people forward and then allow them to flourish within that new environment. 

Champions Keep Everyone On Track

Creating habit champions is a highly effective strategy. But not just line managers, identify early adopters of the new from wherever they sit within the team, ignore their title or role, and make them champions to keep everyone on-track with the new, so that they can support across all the whole company the new way of doing things.

Buddy up people through change. Encourage those who have adapted early to support those who need to be nudged along the way. But don't waste energy on the change deniers (laggards), never waste good people on carrying deadwood. They won't thank you. 

Accountability Matters

Make everyone accountable to someone else for making a permanent change happen. Keeping a change alive is one of the biggest challenges a plan has, how to keep it living post the initial launch phases. Once the excitement of plans launch and big changes has happened, keeping the plan alive so that the cultural and new habit forming changes are shaped and embedded are often where the most required to deliver the plans Return On Investment ROI.  

Embed Change

Make the change permanent across the whole organisation. Plans don't work unless you make the change permanent across the organisation and re-enforce the changes you want to see and as importantly see the change that has happened. So often looking at where you have come from to where you are now and where you see teh company getting to carries your people forward. If you have made  change which can increase your processing by 25% then show them that change from where you were to where you are now and where you will get to over the full rollout of the plan as new habits are formed.  

Create An Environment Where New Habits Can Form 

To get people to stop smoking experts identified that getting people to stop for a month increases the likelihood of them giving up smoking for good six times more effectively than other traditional stop smoking campaigns.  It takes time to form a habit, and in stopping smoking giving yourself time and changing your existing habits from breaks to who you go for a work break with (don't hang out with smokers, or carry on the smoking driving habits) if you want to stop smoking. Form new habits that support you change your habits to the ones you want. 

The same is true to making change happen at work. For people to change they need to burn the old habits that are no longer wanted, but more importantly be allowed to create their new habits which fit with the new model. That requires leaders to allow people, actively encourage them to create new habits, so do not tell them what to do, give them the environment and the freedom to do it their way. Allow people to create their own new habits.   

Measure The Change

If you measure what matters, then measure how people adapt to the new normal, the change by their habit forming as they normalise to the new work environment the plan delivers. If you measure habit forming, people's ownership of the new way of doing things, how fast they take ownership and lead the change, then you will see the plan deliver the positive outcomes which your plan wanted to achieve. 

Plans don't work, but people making change does. Focus more on delivering a plan that moves people and allows people to own their plan then you will see the productivity and effectiveness that you wanted to see the plan deliver. It's not the plan that matters, it is how people react to that plan that will deliver the results leaders need to see.

Strategically are you leading ahead of the curve of behind the curve?

For a Managing Director or Chief Executive Officer, knowing where your business sits within its market is an important first step in leading it to where it needs to be. Where you are today is the result of action taken years before. For leaders' determining where they want their business to be is about deciding where a business is best positioned to succeed within its market over the leaderships tenure. 

Strategic Brand Positioning

That conversation of where to be (and where not to be) requires careful consultation with the shareholders, and key stakeholders as well as the people within the business.  What are their aspirations for the business today and over what horizon?  If a business is a mid-market player within a sector then is everyone happy to stay there and defend their market position and market share, or do they want to move to somewhere else?  Pressure mounts as other players within the market accelerate their growth by moving to other areas of the market. Staying where you are needs to be defended, then the leadership team must be able to defend these strategic decisions.  

That desire to shift should be based not just on a simple aspiration, or the selection of a new MD / CEO to move the brand, but on key factors which will include growth potential within segments of that sector, short-term opportunity analysis of moving compared to staying where you are as well as long-term goals including profitability and sustainability over the a long-term strategic and team culture goals.

Leaders' Biggest Decision

Moving position is not about dropping what you currently do, unless that is redundant within the market, but more about where will the business will be over time. Deciding where make prioritisation of future investments and place resources, including your energy is how businesses naturally migrate. Dramatic events such as Covid where businesses have to overnight pivot their model is the most often need to make complete shifts. Traditional change models are often driven by macro market drivers, (PESTLE) factors most of which are driven in response to consumer demand, reflecting changing preferences or within markets by changing dynamics of a market. 

The big decision for an MD / CEO is where to go from where you are today. That decision starts by answering why where you are today not where you want or need to be tomorrow. For a new leadership team moving the company's position is the reason they have been brought in as shareholders are not happy with the current position in terms of profits, ROI or sustainability. Deciding where to go requires some deep sole searching as well as emerging market opportunities from existing key customers but also in where and what impact emerging trends will make on the business. Dealing with the conflicting pulls and pushes of advice as to where to go, requires detailed analysis and evidence building, so as not to be pulled from pillar to post in strategic thought.

  

Leading ahead of the curve, or behind the curve.

Moving a business requires a thought process of where is that business sitting today within its market. Is the business ahead or behind the curve? Is the first and most important question to answer.  The gulf between the two is a huge chasm, are you a brand leader or a sector follower. 

What is the curve?

The curve is where a company/brand sits within a market. Any and every market are structured around the technology levels within them. From cars to computers, fashion to furniture, to energy to engineering every sector has its own defined structure. The curve is how customers see a market, and how customers engage with brands along that curve. In effect the curve shows where customers are by their buying behaviour, what they will spend based upon their value perception of each brand. It's why Rolex and Tag Heuer can charge more than Swatch and Timex. Those ahead of the curve invest more in research and their product across their marketing mix than those behind the curve.

This understanding of a market is a strategic issue for leader's to assess, understand and determine where and how they position their company to develop their long-term success. Where to position a company for long-term success is fundamental to the business's success.  Where you sit within a market provides you with a place to defend and an according accessible market presence, it is easy to use an existing cash cow to sell more downstream, it is harder to reposition yourself upstream with a new product as the brand perception is outside comfort or competency  The danger of growing using just cash cows is that it naturally slips the brand down the curve, a dangerous precedent which is hard to stop or reverse. 

Strategic Curve Positioning

This structure, the normal distribution curve is a line along which every player in the market is mapped by perception as to where they sit. At the far left are the innovators, small technical product/service creators at the cutting edge of the market who develop bespoke new products. While there are always very few of these players (in a mature market) they are vital as the develop the new and innovative products and services the sector is known for. To do this they require the right mix of talent, creative space to succeed and deep pockets to support their innovation development. That makes them small players but with disproportionally  big brand presences and are often funding (owned or in Joint Ventures with main stream players).  

As the curve increases businesses are seen as early adopters, where higher growth companies sit who have developed sufficient market size to stand alone, and who quickly adopt ideas form innovators and take it to the mainstream market. for many people these flagship companies are what determines a market as they reflect the innovation but in a larger scale than then the pure innovators. Typically good at marketing and sales as well as product development these companies can premium price their products and services to the discerning customer who buys the pure value proposition that early adaptors offer.

Early majority companies, play in the mainstream, safe, established with a wider value proposition than the product they bring innovation in once proved. By being a mainstream player the brand USP and value proposition has to be clearer across the entire marketing mix and unlike the earlier sections a wider skillset of people are needed who can identify trends and develop them into the mass market position early on in which those companies operate. 

Late majority companies gather trends and repackage them with lower priced versions of that trend, but bring it to new audiences with enhanced convenience, more support and rely upon mass acceptance using a wide range of marketing mix techniques suitable to their sector.

At the tail end of any sector are the laggards, players in the market who hoover up trends that are now past, but have some lower price or new laggard customer segments who they can resell these products too. Laggard markets can be extremely successful where they extend lifespans of trends to keep them alive by repackaging them to wider, often high value alternative markets. 

Why being ahead of behind the curve matters

Where a new or existing customer, sits on its sector curve is a core strategic issue. A company must play it its competitive advantage, and shifting that takes time and resources to achieve.  The gulf between the front of the curve, the innovators compared to the laggards is huge. Players within the same sector but at significantly different market positions are almost speaking foreign languages to each other and certainly very different cultures.   

Innovator and early adopters will more heavily invested in new products and services while those behind the curve invest significantly less, sometimes very little in products and services.  This reflect sin visual differences in the relative prices they can charge for their comparable products and the timeline with which they bring bring their respective products to market.   

That investment in new products require high investment which is offset by higher profit margins to premium customers, while those further down the curve have to offset lower gross margins with lower costs in product development coupled with larger market segments increasing sales volume and therefore lower costs to come to market. Choosing where to sit 

Strategic Sustainability

Choosing where to position your company is therefore a vital strategic decision to take. The key criteria of a long-term strategic view is essential, where does the company want to compete over the next 5 years, not just to capitalise on next years' opportunity. It takes time, even in agile companies to orientate, become established and achieve positive ROI's and develop a sustainable position within a market.   

This means that strategic positioning defines a leadership's success or failure. Picking the right strategic position is the biggest single decision which a leadership team has to undertake, it will determine what your business future looks like, determining your business model through to defining your long-term success.

Getting your strategy right.

Strategic planning is the most reliable way to develop a sustainable and successful market position. Evaluating all options, stakeholder and shareholder needs aligned to the current and future market opportunities and risks. It also focuses leaders on setting their goals and aspirations in context with those key factors aligning the whole business with a focus and shared direction to take. 

For leaders to lead they must be going someone and that requires them to make the big decisions, but make them strategically not tactically.