Wednesday, 22 July 2015

How to Market Using Social Media

This afternoon I was writing some notes for a client for who I have just developed a new strategy with a flagship product to drive their position within their chosen market, and as I started to explain how to implement their social media it dawned on me that this would be useful to many other businesses owners and leaders as well. 

Social Media 

The problem with social media is that people are always trying to sell on first meeting, like a new toy everyone wants to play with and some that just doing social media is like selling online. This inevitably fails. Why? Well it is like walking up to someone at a networking event shaking their hand, giving them your name and saying do you want to buy my product/service? What is the chance of success? Even for the most successful sales person it is going to be zero, or worse, even a realistic prospect will be turned off by this approach, because the audience does not know you, your products / services and is not tuned into to thinking about their needs or wants at that time.  

Using social media to win customers is about a structured conversion process

Social media is not The Wolf of Wall Street 

You would never just go up to anyone and start selling, this attitude comes close the perception of the 1980's (Think Wolf of Wall Street) which was typified by the ABC (Always Be Closing) approach to selling. It did not work then and it certainly does not work now. Yet in the field of social media where there is no personal handshake people forget that opening with a cheesy sales line is likely to result in someone reacting with an unfriend/disconnect approach or worse a negative review of what you do. 

In the digital world of social media, the rules of engagement have not changed. People are still people, not fools and not mugs, so don't treat them like they are. A poor first impresssion reflects on you as the connector not on them as the recipient, with the added disadvantage that there is an audit trail and an attentive viewing and engaging audience, two things which can be more damaging to a brand than any traditional sales person could achieve on their own.

So here are the key steps I suggest you undertake in using social media to open up new markets and develop your customer base using social media:

7 Steps in Social Media Marketing

  1. Define your target customers and routes to them through researching target customers social media activity 
  2. Connect to them using social media and identify conversations with them and direct them to open conversations on premises.   
  3. Look at who is responding and looking for further information, support them with further information and options.
  4. Invite them to join your online communities (LinkedIn, Twitter, Pinterest etc) 
  5. Connect with them personally with further information and add them to your existing marketing database, marketing as part of the funnel development.
  6. Listen to their engagement with you to engage with them when they are researching relocation.
  7. Then and only then can you can start selling to them.
These steps provide a good first principles in finding you way into the world of social media for companies looking to understand this new world order of social media.  Look first to understand rather than to sell. Look at how people learn rather than tell them what to buy. Look at what people think and how they value information before you show them your products and services. Do these 7 steps in social media marketing and you will learn what works before entering the online social media world.   

Social Media Marketing

You never sell and then market. Marketing is about identifying and targeting the right prospects who you then move at their pace towards your products and services. Once the customer moves towards you then you can market to them until they are ready to be sold to. By marketing effectively first you can then sell efficiently to customers. So market yourself online first and then sell to buyers really to buy.  

I hope that helps you think about how to deploy a social media strategy and not try to sell at first connection. IF you would like to learn more about social media then click through my blog posts to see more:

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Monday, 6 July 2015

Managing Strategic Risk

When leaders think about risk management in business they are too often talking about legal compliance.  This is a common misunderstanding of risk by leaders, not seeing risk as primarily a strategic issue in business. This view of risk misses the strategic elements of risk, which leaders need to consider in defining their business model and in making strategic decisions. From start-up to exit risk is a strategic issue, which should underpin all strategic thinking.  

Developing leadership risk skills is an important element for leaders to understand that their approach to risk defines how the lead and what they lead. Strategic risk defines the type of business model that leaders develop through to which markets and where in them they choose to operate. 

Drawing up lots of rules and making sure that all employees follow them on the other hand can solve operational risk. Many such rules, of course, are sensible and do reduce some risks that could severely damage a company. But rules-based risk management focuses on legal requirements, not complete risk management. 

Understanding strategic risk and learning to how to manage key business risks throughout your business is an important skill set for leaders to develop in establishing their judgment in risk considerations and ensure they are integrated into strategic thinking.  There are two parts to risk, firstly identifying your strategic risk and then secondly how to actively manage the identified risks, which this article covers. If you would like to know more about strategic business planning then click this link here.

Here are some key questions to consider in identifying strategic risk:  

1. Risk Appetite 

The first stage in managing risk is to look at the leadership team and its surrounding stakeholders, both formal (Board, NED, shareholders) and informal (employees, advisors, channel partners) to map out the appetite to risk. The leaderships' risk appetite determines the overall approach the business will take to risk. Risk is always directly linked to reward, take no risk and you take no reward. Conversely take high risk and you could achieve high reward, but equally high failure. The more the leadership diversifies from its core skill sets it also increases the risk it takes. So risk is linked to the sector you are operating in, established and known is lower risk than emerging and unknown.       

2. How well is your strategy defined? 

Without a strategy your business is at high risk. If the leadership does not have a clear and articulated strategy, which is shared and owned, then the business is vulnerable to strategic drift, living in a dream and is without clarity and purpose. Having a strategy in place, provides the context of the business, with strategic goals, intent in positioning and outcomes defined which enable the business to drive forward. To learn more about strategy click here.

3. Strategic Risk Analysis

A business strategy must define the risk environment within which it operates. Strategic risk starts by looking at the risk of entering a market compared to the risk of not entering a market. Strategic risk management should compare not only the risks of the strategy but the reverse risks of not doing the strategy, the gap risk of missing the opportunity.

Strategic risk also covers risk analysis of the leadership and its approach to risk, how comfortable it is with risk reflects in how leadership teams actively manage risk which reflects its established risk skill set and appetite to risk across the board.

4. Strategic Risk Assessment

Risk, any risk is defined by the potential impact of the consequences from it. The manifestation of its likelihood of occurring is the assessment which must be undertaken, this is often scrutinized by undertaking scenario analysis (driven by board, NED and expert support and advisors) will encourage the leadership to consider a range of scenarios that can result in significant adverse consequences for the business and assist the leadership to make sure full width and depth analysis of strategic risk is undertaken.

This assessment provides the basis of mapping the risk and determining the investment in mitigation required to reduce or remove that risk.

5. Strategic Risk Mapping

leaders must see risk in the context of how shareholders or stakeholders measure value in the organization. This essential mapping of risk enables the leadership to articulate to stakeholders how the risks they are taking or the risks the business is exposed to may affect the organization’s ability to realize its strategic goals. By identifying common metrics for risk and performance also allows the leadership to define the priorities of risk management activities and focus on the mitigation of relevant and important and decision defining risks the board.

The second step, in creating an effective strategic risk management system is to understand the qualitative distinctions among the types of risks that a business could face and determining how to actively manage those risk. Risks typically fall into one of three categories and here's how leaders should be managing them:

1. Managing: Strategic risks.

The leadership having determined the level of risk it is willing to take in order to generate the returns from its strategy, its risk and reward profile, leaders must then develop appropriate channel partners to achieve that strategy. From its bankers credit risk, its strategy of launching new products through to its channel partner selection, all these decisions impact upon the strategic risk strategy. 

Strategic risks are quite different from operational risks because they are not inherently undesirable; they are quite the reverse they are deliberately accepted as part of operating within that industry. A strategy with high returns requires the business to take on higher risks, and actively managing those risks is a key driver in achieving those potential gains.

Strategic risks cannot be managed through a rules-based control models, such as compliance to legislation. Instead, the leadership must install a risk-management system designed to reduce the probability that the assumed risks actually materialize and to improve the company’s ability to manage or contain the risk events should they occur. Such systems enable companies to take on higher-risk, higher-reward ventures by identifying drivers of strategic risk, most often these are identified through 5 Forces analysis within markets and systems usually include primary (and secondary fallback) detailed objectives which must be achieved which underpin the strategy to actively manage the strategic risks.    

2. Managing: External risk factors

Certain strategic risks arise from events outside the company and are beyond its influence or control, often identified through PESTLE analysis. These major macroeconomic risks are outside the market but directly influence it. PESTLE identification and analysis enable leaders to manage the external risks effectively, through proactive identification and mitigation of their impact. For example changing economic conditions may raise global interest rates, which put pressures on even successful businesses, which impacts upon costs and profits.

Businesses need to build a defined risk management processes to these different PESTLE categories. By identifying key drivers of external change leaders can devise stress testing through scenario planning and devise alternative strategic options should external risk factors come into play.

3. Managing: Preventable internal risks. 

Conversely internal risks, arising from within the organization, that are controllable and ought to be eliminated or avoided. Businesses should have well defined internal risk systems in place which includes a tolerance level, such as 95% of all calls must be answered within 3 calls, in other areas health and safety for example mandatory 100% requirements for the use of PPE and operating systems must always be in place.  

Businesses should seek to eliminate these risks since they get no strategic benefits from taking them on. This risk category is managed through active prevention by monitoring operational processes and guiding people’s behaviors and decisions toward desired norms.

Identifying and managing preventable risks is about good management of existing best practices within the legal and industry best practice.  Companies cannot anticipate every circumstance or conflict of interest that an employee might encounter, so ensuring that risk is talked about, reviewed and assessed against best practice. 

Managing Risk effectively

Risk is a difficult subject for leaders, precisely because it is seen as an operational detail rather than strategic in nature. Business planning sets over optimistic forecasts, from unrealistic timescales to launch new products and services through over inflated revenue streams.  This form of linear extrapolations, how leaders have done it before will be immediately repeatable with something new is compounded by the use of conformation bias, selectively picking supportive data and ignoring unsupportive data. This form of groupthink often limits the risk discussion by narrowing the discussion down to it will happen rather than taking a holistic approach to risk.

Other key drivers of strategic risk failure come from leaders ignoring industry activity, how fast and quickly competitors will react to any new strategic initiatives to minimize their impact upon the status quo and how channel partners and customers will sound supportive but will measure the risk to them and mitigate it by limiting their exposure to risk. How industries react to change is one important consideration from an effective 5 forces analysis of any market. How do they players react to change is often analyzed by war-gaming with scenarios played out in theoretical games to see the impact of industry competition.

By strategy mapping your business leaders can often assess all risks linked to objective setting, looking at risk events associated with each objective and generate a risk profile for each risk and associated mitigation strategy.

Recently the adoption of the balanced scorecard has become a major way of mitigating risk, by linking mitigation to performance driver indicators of behavior within the organization. This highly effective risk management tool enables companies to engineer risk out of departments through positive mitigation strategies.  

For areas of risk which cannot be mitigated from within the company, such as natural disasters or acts of terrorism, then developing contingency plans act as mitigation to unforeseeable external risks. Not putting all leaders on the same plane is a simple example of contingency planning as is having secondary operational site, should your primary site be unusable from either natural causes such as flooding or from acts of terrorism.

Like to know more about strategic business planning then learn more through my video course on strategic business planning, which will reduce your risk in succeeding within your market, then click this link.

Richard Gourlay, how to take the guess work out of your business success

Good leaders embrace risk, they do not avoid it and investing time and skills into understanding and actively managing risk is an important element of leadership.  Good strategic planning encompasses strategic risk assessment and leadership teams need to invest in understanding their risk if they wish to succeed in their market.  

Wednesday, 1 July 2015

Deconstructing Leadership Development

Developing leadership is the most effective investment any enterprise can make in its people. It is the most effective investment any organisation can invest in, but it is also one of the most misunderstood investments organisations often make. 

For organisations to achieve success across the complete basket of performance measures, from top-line sales growth, operations through to shareholder returns, developing the current and next generation of leadership is the core driver of tangible and intangible success.

The challenge for organizations is to understand the context of the leadership they need which varies over time. This is one of the key challenges I face when working with organizations, what type of skills do they need to develop within their organization; all depend upon where they are today and where they are trying to get to tomorrow. That context defines organizations immediate and foreseeable skill needs in its leadership, which once delivered, will open up the next set of leadership skills, which an organization then needs to deploy.

There are a huge number of leadership skills which leaders will need and use at differing times, these can be broken into three main groups.

Strategic Leadership Skills

The traditional skills leaders are most often selected for by shareholders to deliver and therefore need to develop are in defining the vision of the organization and in shaping the organization to achieve that vision. These primary role of the leader as a strategic business developer are often the most challenging to leaders as it is the most difficult role to deliver, mainly because it is the one undertaken the least and the most high risk to undertake.

Operational Leadership Skills

The second set of leadership skills based around day-to-day operational skills include acting as a role modeling, decision maker, situational leadership, and shaper create leaders who are good at adapting to changing circumstances.

Advanced Leadership Skills

The third set of leadership skills often defined as the soft skills, which always include communication at there core, are have been defined under skill sets such as emotional intelligence, motivation skills and succession planning. These skills, often seen as higher skill sets are often the defining ones in what makes leaders stand out in their field and why some organizations become benchmarks of success.

By redefining leadership skills into these three sets of strategic, operational and advanced skills, it helps leaders see what skills they need to develop to be effective in context to their needs and the organisations requirements. Leaders are not only real people, but they operate in real time within their organizations business cycles. Where the business is in that cycle drives the types of key performance characteristics, which the leadership skills need to deliver. That makes the definition of what skills a leader needs to deliver harder to define; it all depends of where the organization is in terms of performance results.      

Too many leadership support programs are sheep dip sessions of theoretical skills rather than bespoke packages focused around defined needs at stages of organizational and person needs.  This is often why leadership and development programs don’t deliver the anticipated results. The second reason why many leadership programs not deliver results is because they are theoretical in nature, rather than practical in application. So leaders don’t get to apply what they have learnt relative to their precise situation. This is compounded by a third failure of leadership development programs is that too many are in reality mutual support clinics, piling leaders into a mixed group of leaders and potential leaders all with differing skill development needs.

In constructing leadership development programs it is therefore important to put the context of where the organization is within the business cycle as well as the individual needs to the leaders themselves. The range of skills which leaders need across the three types of skill sets are significant, and while all are important, recent studies by McKinsey and others show that the most effective four skills that ultimately define leadership effectiveness are:-

1. Diverse Network Perspectives   

Successful effective leadership relies upon being outward looking by establishing effective networks with other leaders in differing sectors, differing cycles, sectors, and personality types, this provides leaders with the ability to base their decisions on sound outward viewing analysis and avoid the many biases to which inwards decisions are often prone. 

2. Being Results focused

Nothing succeeds like success in business; successful leaders follow through their plans with a passion and determination, by being results orientated leaders drive their people forward improving other aspects of their organization to support results through efficiency and productivity towards those results.  

3. Effective Problem Solving

The skill in in gathering relevant information from the tidal wave of data and converting it into intelligence necessary through effective analysis to be able to solve problems effectively is a vitally effective skill. This skill set enables effective leaders to take control of situations with one touch decision making.

4. Supportive Leaders

Giving time to listen to others, with an open mindedness to understand others challenges builds trust and is seen to inspire subordinates in their performance. Investing time in people and teams providing them with ideas to overcome blocks and supporting progress, is the final vital skill leaders need to have to be effective.  

These four core skills make the biggest impact upon leadership effectiveness, but do not distract for the need to focus on the context in which the leadership operates.  Different business situations require different styles of leadership, but the four core leadership behaviours above are a constant across all leadership situations and transcend the three sets of leadership skills which all leaders face in their role, strategic, operational and advanced. 

By developing diverse networks leaders build core skills in understanding strategic perspectives. While both being results focused and effective in problem solving leaders drive their operational skill sets and through being supportive as a leader, they enable themselves to develop their advanced leadership skills in getting the most out of their people at every level. So these four core skills drive the top-line behaviours of leaders under which all other skills can be developed and delivered. Without these four core skills todays and future leaders will struggle to be truly effective leaders.

If you are looking to develop leadership skills then click here 

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