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Seven Strata of Strategy by Verne Harnish "Growth Guy"

" The challenge is balancing all the complexities of strategy while keeping it coherent and simple."

It’s no secret that the recession has decimated the building industry the last few years. But Jeff Booth’s company, BuildDirect.com, isn’t hurting. It sells building materials at a steep discount through its website, thanks to arrangements to ship directly from manufacturers. “It’s almost like an online Costco of building materials,” says Booth, president and CEO. Expecting his sales to increase by more than 20% this year, Booth has increased his staff by about 10% to 53 people. What makes BuildDirect.com thrive in a struggling industry is its growth strategy.  And my recent research involving more than 3,000 CEOs and executives from around the world confirms that strategy is their #1 focus this decade, as companies rethink their fundamental approach to changing markets.

The challenge is balancing all the complexities of strategy while keeping it coherent and simple.  Your strategy must tell a simple story, yet touch on what I call the Seven Strata of Strategy.  Booth and his partner are masters’ at all seven strata –  principles that every business must master and integrate to achieve its potential in today’s uncertain global economy.

Here’s a checklist that you can use at your own company.

  • Choose the words you want to own in your marketplace
  • Offer a unique brand promise
  • Make it hurt to break your promise
  • Create a one-PHRASE strategy
  • Support your one-PHRASE strategy with differentiating actions
  • Establish your "X Factor"
  • Measure your profit per X and BHAG

Read the full article "Seven Strata of Strategy" by Verne Harnish "Growth Guy"

 
Desjardins Financial Group Acquires 95.5 % of Outstanding Common Shares of Western Financial Group Inc

Desjardins Financial Group ("Desjardins") announced on April 15, 2011 that its offer (the "Common Share Offer") to acquire all of the issued and outstanding common shares of Western Financial Group Inc. (“Western”) has expired and that it has taken up and accepted for payment the shares tendered under the Common Share Offer. Desjardins will pay for the tendered shares on or about April 20, 2011.

 

“We are extremely satisfied that our offer was accepted by the vast majority of the shareholders,” said Monique F. Leroux, Desjardins Financial Group Chair of the Board, president and CEO. “As Western Financial Group continues to develop its business in Western Canada, we look forward to leveraging the entrepreneurial spirit that exists within the company and to supporting Western’s continued growth and success.”

 

Ms. Leroux also announced that Mr. Jim Dinning will remain Chairman of the Board of Western Financial Group and that Mr. Scott Tannas will continue as its President and CEO. He will also remain on Western’s Board. “We feel privileged to count on the expertise and commitment of such gifted individuals, as well as on the management and employees of Western Financial Group,” she added.

 

“We are delighted to have the overwhelming support of shareholders for this transaction. Western Financial Group today begins a new era in its growth and development. We are excited to join the Desjardins organization, and look forward to much success together,” said Scott Tannas, founding President and Chief Executive Officer of Western Financial Group.

 

Desjardins intends to acquire all of the remaining common shares of Western by way of a subsequent acquisition transaction between Desjardins Financial Corporation Inc. and Western. This transaction will be submitted for approval by holders of common shares at a special meeting of shareholders to be held in July, 2011.

 

Awarded the coveted title “Bank of the Year 2010 — Canada” by the UK magazine The Banker, Desjardins Group is the leading cooperative financial group in Canada and the sixth largest in the world, with assets of over $172 billion.

 

Western Financial Group provides property, liability and life insurance as well as banking and investment services for more than 550,000 customers in Western Canada. Our business units include: The Network, Bank West, Western Life and Western Financial Insurance.

 
5 ways to get your business strategy right

5 Strategic Blunders – Verne Harnish's latest Fortune “Venture” column is out on the newsstands (April 11 edition) and online. Read how Randy Cohen, TicketCity;  Roger Hardy, Coastal Contacts; Doug Schukar, USA Mortgage; and Tony Petrucciani, Single Source Systems avoided five strategic mistakes companies make. There are still 3 quarters left in 2011 to course correct! Please take three minutes to read their valuable lessons – and review at your next weekly or monthly meeting.

 

Fired up about your company's strategic plan? Great, but before you commit the rest of the year to executing it, make sure you pass these five litmus tests. If not, head back to the drawing board with your management team.

 

Remember: You're betting your company's future on your strategic plan. If you haven't gotten the details right or shaped it from the proper perspective, those two days you spent at your offsite will ultimately hurt your company. There's still time to polish it so that you can make the most of 2011.

 

Play to win

Worried that profits were declining, Randy Cohen, founder of Ticket City, an Austin-based ticket broker, laid off workers and cut managers' pay in 2008. Then Cohen came across an old article about his once-growth-oriented company titled "Don't Be Afraid." He realized he'd slipped into playing defense. So he changed his mindset, hiring 10 new people, investing more in marketing -- and driving revenue from $30 million to $40 million in 2010. Profits rose as well. And he's raised the ante further, sponsoring a new nationally televised college bowl game, the Ticket City Bowl. That's playing offense!

 

Ask customers for ideas

Coastal Contacts, one of the largest online contact-lens retailers in North America, came out of its two-day planning session at a loss for how to rev up growth. So over the next six months CEO Roger Hardy and his senior team called customers each week to see whether they had any ideas. To the company's surprise, one recurring theme emerged -- customers wanted lenses the next day. "We started overnighting everything," he reports. Sales in the U.S., where he recently made the change, were up 41% for 2010, bringing company sales to $155 million.

 

but know which to ignore

If you act on every suggestion your customers make, they can "want" you into bankruptcy. At customers' request, Hardy, who also sells eyeglasses at Coastal Contacts, started letting them choose and try on four frames at home, then place an order and return the testers. Data soon showed that shoppers who tried on multiple frames were just as likely to return purchases as those who ordered just one pair. Hardy canceled the program because the added shipping costs weren't offset by additional sales.

 

Involve middle management

Doug Schukar was thrilled when USA Mortgage, his residential mortgage bank in St. Louis, increased the loans it funded from $113 million in January 2009 to $1.2 billion by the end of the year. While other lenders struggled, he ramped up his sales efforts. Yet by failing to keep key middle managers informed of growth plans such as acquisition, he let them get blindsided by the work that came from the company's rapid expansion. Result: Almost all resigned, and he hired replacements. Today he includes middle managers in annual and quarterly planning sessions.

 

Set fewer priorities

A few years back CEO Tony Petrucciani and his team at Single Source Systems, a software firm in Fishers, Ind., set 15 annual goals, such as automating some of its software functions. But the company, which got distracted by having so many items on its goal list, missed its $8.1 million revenue benchmark by 11%. "Nobody focused on any one thing," he says. Going forward, Petrucciani decided to set just a few key priorities. Last year the company met its goal of $10 million in sales. How many priorities do you have for 2011? Less is more!

 

Verne Harnish is the CEO of Gazelles Inc., an executive education firm

Read the full article "5 ways to get your business strategy right" features on Fortune magazine “Venture” column

 
Hitting the sweet spot on every swing

Finding the sweet spot when you are hitting a golf ball can be just has hard as finding the differentiator or unique selling proposition in your company. It makes all the difference to the time, energy and effort you put into running your business, whatever the size.

 

We prefer to call this differentiator your "Brand Promise" — effectively it is what you promise to deliver consistently, but it has some subtle checks and balances. This is a crucial part of the process of discovery and will require you to ask some tough questions and probably make some significant changes to ensure it can be executed.

 

You need to start by defining the "sandbox" in which you'll play over the next three to five years. What are the core geographies you serve, the core products and services you offer and most critically, who is your core customer?

 

The first two are often easier to define. With geographies be careful to make sure this is a territory you can defend and that it is large enough to meet your financial aspirations.

 

With products and services, pick your core offerings. This is often a good exercise to clearly define what you actually offer.

 

In challenging economic times we often start saying "yes" to everything and find we are running lots of diverse products or services that aren't really making money or are distracting you from your core business.

 

Vivid picture

Finally, identify your customers. Go beyond demographics or statistics and try to create a vivid picture of your core customers. Use five to 15 carefully selected words that describe who your ideal customer would be to gain optimum profit.

 

Once you have this clearly defined you need to ask the fundamental question — what do these customers need? Differentiate between their needs and wants, focus on their needs and be cautious of ‘wants'.

 

Look at the list and decide which of the ‘needs' you can meet that other competitors can't? You are looking for what makes you different, through the eyes of your core customers.

 

This is not an easy process and often requires a facilitator to help drive the solutions, but when you discover a clear brand promise it will be like hitting the sweet spot every swing!

 

Brand promise

Defining the brand promise is not enough, you now need to make it a reality every day. This can only be done by finding out the systems, processes and measures that will impact delivery. Getting fanatical about these measures will ensure this becomes a genuine promise that will drive your business growth.

 

- Hazel Jackson, CEO of biz-group; passionate about performance UAE

 

Read the full story "Hitting the sweet spot on every swing" on Gulfnews.com

 
5 business myths to ditch for small business owners

Feeling a little disillusioned lately? That's not a bad thing if you're an entrepreneur. There's nothing like humbling economic times to force chief executives to let go of the sacred-cow ideas and grandiose illusions they've been harboring and start building on reality. Some of the smartest business owners I know have fallen for these five myths. Ditch them. It will make your business that much stronger.

 

1. Gross margins will grow as you get bigger

Not so. My research shows that they typically dip. That was a tough lesson for Jennifer Olsen Welding, who owns a 70-employee Salt Lake City casting company. Her tale: Unlimited Designs won a municipal contract to create a precast building façade in 2009. The trouble was, the $5 million company had to lease extra equipment to do the job. Sales increased significantly, and gross margins declined by 3%. "We would have been better off having no revenue than the revenue that was coming in," she says.

 

2. Competitors are always unfriendly

Baloney! When Steven Krane tried to get Wal-Mart (WMT, Fortune 500) to carry Raw Essentials, a line of skin-care products he developed with model Carol Alt, the giant retailer expressed doubts about the marketing muscle of his Boca Raton, Fla., firm. So Krane dared to call the president of Hard Candy, a competitor that had successfully launched its makeup in Wal-Mart, to get advice. It turned out that Hard Candy was interested in discussing some joint ventures. Krane also got some critical tips on building his social-media presence.

 

3. You really know your market

Gathering real data may prove you wrong. Dave McLurg, chief strategy officer and partner at Adaptive Technologies in Scottsdale, was certain that only big companies wanted his firm's software, which helps users predict which clients will be the most profitable. But surprise! After encountering a midsize firm that wanted something like it, he undertook market research that showed that others did too -- only for a lower price -- and launched a new version. "It's turned into a multimillion-dollar division for us that we hadn't anticipated," he says.

 

4. One size won't fit all

John Warrillow took on endless custom projects at Warrillow, a firm that helped big companies market themselves to smaller ones. Revenues didn't grow because Warrillow was the only one with enough experience to write custom proposals. In 2005 he relaunched the firm, offering one-size-fits-all research and events that clients could purchase by subscription. Providing one product was more profitable, he found, than doing custom jobs. "We went from being flat on the top line to growing at a rate of 25% to 30% a year," he says.

 

5. As CEO, you know it all

Despite regular team meetings, Bettina Hein, CEO of Pixability, a Cambridge, Mass., company that helps customers market themselves on video, was the last to find out that an instructional video added to the company's site had saved her team 135 hours of customer-service time, worth $8,000 to $10,000 a month. No one thought to mention it to her. "Only in a casual conversation did it emerge," she says. She's now rushing to create 60 more. Had she known, she would have launched the new ones sooner and saved even more money.

 

--Verne Harnish is the CEO of Gazelles Inc., an executive education firm

 

Read the full article "5 business myths to ditch for small business owners" published on CNN Money

 
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