Thursday, December 31, 2009

Becoming Great: First Who, Then What

A few weeks ago, I started blogging about Good to Great. There, I wrote about the importance of the leadership that business owners/managers provide. So called "Level 5 Leadership" is critical, but a leader can't lead unless there's people to be led. So now let's take a look at what Collins has to say about the people you hire.

The research findings showed that the great companies first got the right people on board and the wrong people out before deciding on what they were going to do. They may have had a general notion of what direction they wanted to go, but the specifics needed to be determined by the people on board.

So, what makes someone the "right" or "wrong" person? First, they have a passion for the success of the business. This may lead to personal gain (i.e., higher income) for them but that is secondary to the drive they have to succeed. Second, they get along with others in the business. This is made easier if they share a passion for success, but moving forward with destructive friction is a killer. On the other hand, constructive friction, brought on while the team is trying to find the best step forward, can help the business move forward together. Third, they obviously need to have the proper technical knowledge, but it's more important that they have the ability to learn and adapt, applying that knowledge to various situations that come along.

The benefits of having the right people on the right spots in your business (even if there is only one or two spots) are huge! But it takes discipline to make it happen. Collins indicates that the great companies were rigorous about this. They would remove someone not in the right spot and, if they weren't the right person for any spot in the business, fire them. This is made easier if everyone puts the success of the business first. It is also easiest when that rigor is applied first to the ownership and then trickles down to the bottom levels of the organizational chart.

Collins gives three practical ways to apply this rigor in your business.
  1. If there are doubts about a candidate, don't hire them. It starts first by keeping the wrong people out of the business. Don't settle just to fill a position.
  2. When you know a personnel change needs to be made, do it. He says on page 56 "Letting the wrong people hang around is unfair to all of the right people."
  3. Put your best people on the biggest opportunities, not the biggest problems. If possible, get rid of the problems but always take on the best opportunities with your best people.

Whether you are a dairy farmer, a food manufacturer, a CSA owner, or other type of food or agricultural entrepreneur, these fundamentals should be applied to your business. Your management team and employees are key elements of your business. Be sure they are the right people to move forward with in 2010 and following years as you move your business toward greatness.

Thursday, December 17, 2009

Concentrating on existing customers instead of marketing towards new ones may be the key to increasing online sales

Every business wants to attract new customers, but are they losing sight of current customers?

A recent study by Verdict Consulting (a research company that provides analysis on a large variety of retail sectors, issues, geographies, and demographics) and Webloyalty (a company that offers a rewards and discounts program for over 450 online retailers) described actions online retailers should take to grow their business post-recession.

In the report (entitled "Internet Retail Trends 2010: Ten Actions For Your Business"), online sales have increased 13.3% in 2009. An increase is always great, but without a recession, sales were estimated to be $2 billion more. The report also states that in 2009, over 60% of shoppers will have used the internet to make purchases and will increase to an estimated 66% in 2012, but this is a much slower growth than the previous 5 years.

Neil Saunders of Verdict Consulting states that, "The recession has certainly caused online shoppers to alter their purchasing habits and online retailers are now also facing a severe slowdown in new customers. Our report suggests that retailers must turn their attention to driving repeat business — shifting marketing spend away from attracting new customers and instead focusing it on adding value for their existing customer base. Those retailers that try to win on price alone will be left behind but those that clearly offer extra value, and communicate it upfront to the customer will be ahead of the game.”

This shift from luring new customers to adding value for current customers will most likely change the web presence of many companies. Supermarketguru.com suggests , "Coupons, recipes, dietary advice and frequent shopper exclusives are all relevant to savings and health and could be effective at making a retailer website and stores compelling sources for how to live frugally and live well. Online games and family-oriented contests can entertain and build continuity. Each of these enhance the marquee retail brand."












As a business owner, how has your web presence changed during the recession (if at all)? Do you plan to change your online marketing techniques to engage existing customers? Do you feel that the recession has significantly influenced your online sales?

Wednesday, December 9, 2009

Another reason to use Twitter and Facebook

You may have been hearing a lot about Twitter (or tweeting) recently and how it can help you as a business owner talk about your business and hopefully gain customers. To be able to see tweets about a specific topic, a person would need to search on the Twitter website. A recent announcement from Google will help in this search for information.

In October, Google announced a search deal with Twitter to include tweets in search results. On the official Google blog, the benefits of the partnership are described. “Given this new type of information and its value to search, we are very excited to announce that we have reached an agreement with Twitter to include their updates in our search results. We believe that our search results and user experience will greatly benefit from the inclusion of this up-to-the-minute data, and we look forward to having a product that showcases how tweets can make search better in the coming months. That way, the next time you search for something that can be aided by a real-time observation, say, snow conditions at your favorite ski resort, you’ll find tweets from other users who are there and sharing the latest and greatest information.” After entering a search term, Google will scroll data in real-time (no need to refresh the page).

Coming in the beginning of 2010, Google will also be including Facebook updates in search results. The article below gives more information on the partnerships and includes a YouTube video on how the real-time data will be displayed.

Google article

As a business owner, do you use Facebook or Twitter? If you don't, will you start using these services now that Google will be displaying this data? What kind of feedback have you received from customers about your social networking usage?

Tuesday, December 8, 2009

Becoming Great: It Starts at The Top

Several of my colleagues and I are reading, or re-reading, "Good to Great" for a new book club here at work. (Our goal is to infuse our educational programs with the best ideas from the books chosen for the club.) This will be my third time through much of the book. It really is a fantastic read for any business owner. I plan to have a series of blog posts on my interpretation of how the fundamentals can be used in agricultural businesses. This time, I'll focus on leadership.

In their research of what made great companies different than good companies (as measured by stock market performance), Jim Collins and team discovered that the great companies had great leaders. They referred to these as "Level 5 Leaders." These can be charaterized as follows. (Read Chapter 1 for the full picture.)
  • They have a mix of personal humility but strong will. They want the business to succeed above all else.
  • They worry about the future, not just their own success. They position the business for long-term success and work closely with successors (heirs) to help them succeed.
  • They are results focused, concerned most about the success of the firm.
  • They share praise with everyone involved but look first at themselves when things go poorly.
  • "Celebrity" leaders, those with big personalities and personal success, were found in good companies but not in great ones. This happened because these individuals tend to be more concerned about themselves than the firm's long-term success.

Think about yourself as a business owner, a community leader, a mother or father, etc. Are you, or can you be, a Level 5 Leader? Are you hiring Level 5 Leaders? Would you respond differently to a Level 5 Leader than you would one with a big personality but less substance? Employees, input suppliers, buyers, and others you deal with will feed off your unwavering passion for the firm.

The agricultural business owner that exhibits Level 5 Leadership sees the business's success as his or her personal success. This connection provides the business with a leg up because it has a champion at the top who has its best interest in mind. This is a necessary condition for sustained greatness. No matter what you may hear, it is very possible to become a better leader. The payoff could be huge!

Friday, December 4, 2009

Networking with industry members

There are many, many trade shows and conferences available for ag entrepreneurs to attend. But why should you go? These events can help you network with people in your industry, learn about new products and services (you always need to know what the competition is doing!), and you can advertise your own products to gain customers. Many conferences even offer workshops so that you can learn about new techniques and ideas from experienced industry people. Below are a few events that may be of interest to you.

-PASA (Pennsylvania Association for Sustainable Agriculture) will be holding its 19th annual Farming for the Future Conference on February 2-4, 2010 (http://www.pasafarming.org/). Location is to be announced soon. At the 2009 event, two keynote speakers were featured as well as 75 workshops pertaining to sustainable agriculture.

-The Mid-Atlantic Fruit and Vegetable Convention will be holding its 33rd convention in Hershey, PA on February 2-4, 2010 (http://www.mafvc.org/html/). This event combines educational workshops, a large industry trade show, and a diverse group of crop producers.

-From February 5-12, 2010 in Lancaster, PA, The North American Farmers' Direct Marketing Association will hold a conference to bring together farm direct marketers and agritourism operators to discuss farm business management practices (http://www.nafdma.com/Pennsylvania/).

-Also in February, the USDA will host the Ag Outlook Forum in Arlington, VA (http://www.usda.gov/oce/forum/) with session topics including nutrition, food price trends and farm income, food safety, commodities, energy, and food security.

-The International Restaurant and Foodservice Show of New York will be held February 28-March 2, 2010 in New York City to showcase the latest trends, strategies, and product innovations.

-For wine industry members, http://www.wine-expos.com/ lists wine events including the New York Wine Expo to be held February 26-28, 2010.

As an ag entrepreneur, have you ever attended a trade show or conference? What have you learned from the events? How do you determine what events will be the best for you to attend?