“Two all-beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun.”

We’ve grown up on this jingle, it’s been ingrained in us, and McDonald’s success depends on it. Imagine what would happen if you ordered a Big Mac in Orlando and were served something different than when you ordered a Big Mac in Seattle. Sameness is a core component in the McDonald’s brand.

Then why all this noise about change? “The only constant in life is change.” Maybe if we could stop changing for a little while, life would settle down and stress would go away. Fair enough. Change is stressful and constant change creates constant stress.

Unfortunately, in business change is where fortunes are made. Fifteen years ago, we had the local sub sandwich shop with bread from the local bakery. Along comes Subway cooking bread behind glass doors right behind the counter. Overnight, the sub sandwich business changed.

25 years ago, Switzerland owned the watch business. When inventors from the Swiss watch-making institute invented the quartz-movement watch, Swiss watchmakers were appalled. Without a main spring, winding, or movement, it couldn’t possibly be a watch. So unimpressed were they that they didn’t patent the idea. So Seiko Japan and Texas Instruments took their idea – and most of the watch making revenues and profits.

While you’re busy trying to create sameness and uniformity in your business, someone else is changing something that will attract your customers. Whether it is an evolution in the product, or a lower cost approach to manufacturing, change is happening all around you, faster and more frequently than ever before.

When you can foster and encourage change in your organization you’ll improve the likelihood of success. There are four stages of change that organizations and their people must go through. Stage one is resignation marked by depression and helplessness. Stage two is resentment – we’re angry that things are changing and asking “Why me?” Stage three is acceptance and peace. “It is what it is, I don’t have to like it.” Finally, stage four is ambition. Energy is directed in a positive direction. Both you and your organization are poised to change to improve your own performance and surpass your competition.

Unfortunately, people resist change by nature. It means traveling into the unknown and an admission that whatever we are doing, it is less than the best we can do. While change has become chic, we still hear, “Change is good, you go first.” Successful leaders inspire their teams to be on the lookout for new and better opportunities. Most importantly, they give permission for trial and error.

So if you seek improvement in the performance of your organization, embrace change. For success is found in the next great idea. You just have to diligent in finding it.

The lifeblood of any business is revenues. The more you have, the more you can do. Managed properly, revenues give you freedom and control.

How do you get the amount of revenue you need for success? More customers. Get more customers. So you advertise, you market, you sell all in an effort to get more customers. The problem is that you can’t get customers.

What you can control is the number of suspects you can put your offer in front of and the rate at which you convert those suspects into customers. The number of customers you have is the result of processes over which you do have control.

The Sales Funnel represents that process. It is the act of acquiring suspects, evaluating them as prospects, and converting them into customers. Using the SWARM technique, you reach out to a large number of Suspects, Warm them to listen to your message, Align them to what you have to offer, discover whether they’ll Realize value from your offering, and Match them, as customers, with your company.

If you’re converting 100% of your suspects into customers you still need to find one new suspect for every customer that moves, dies, or no longer needs your service. If you’re like the rest of us, your conversion rate is less than 100%. At a 10% conversion rate, you need 10 new suspects for every revenue-generating customer. When you realize that you’re not going to make 100% of the people you talk to customers for your product, it takes the pressure off every presentation. It also tells you that you need to present your message to many more suspects than you need to convert to customers.

Thus, the first step in the process is to increase your efforts at gaining suspects to put into the top of your Sales Funnel. The next step is to improve your success at converting suspects into prospects, and prospects into customers. You test and measure your process; your approach, your questioning, your presentation, your closing. You work to improve your success rate at each step. When you improve your conversion rate from 10% to 20%, you need half as many suspects in the top of your funnel, or get twice as many customers out of the bottom of your funnel. The better you get at identifying the suspects most likely to be interested in your offering and converting them into customers, the more time you’ll be spending generating revenues.

Recognizing and managing your Sales Funnel is fundamental to success in your business. Wild swings in revenue, those disappointing boom and bust times, are symptomatic of a poorly managed Sales Funnel. Keep your Sales Funnel full and you’ll be in more control of your revenue stream.

In the past few years, successful business owners and senior managers caught on to the benefits of executive coaching.  Coaching can be thought of as a resource, a tool, and a process that has been shown to drive business results.

Executive coaching, at its core, is a leadership development process.  Over a period of time, the one-on-one support together with the structured approach enhances the leader’s performance and improves organizational outcomes.

The coaching relationship is a collaborative effort.  The leader is seen as a highly capable person in possession of virtually all of the knowledge necessary to achieve positive change.  The coach incorporates a process to bring that knowledge to the surface.  This is not a one-way relationship where the coach gives and the leader takes.  Rather it is a partnership where both the coach and the leader have responsibilities.

What you can expect when you enter into an executive coaching process is a structure to generate personal and professional change.  While change is seldom easy or entirely welcomed, more often than not the outcome is significant personal and professional growth that leaves the leader less stressed and more satisfied.

Here are the elements of a coaching relationship that you can expect.

1. Centered on change, the coach will help the leader get from one place (where you are) to another (where you’d rather be).
2. The coach will focus on the whole person.  Because a change in one area often impacts other areas, if attention isn’t paid to parts of the leader’s life that may impact the good work being done, it could undermine the effort.
3. Coaching helps successful leaders get even better.  Too often the process has only been used as part of a plan of correction.  The real value of coaching involves a positive approach to development and leaders are more likely to embrace the opportunity.
4. Positive feedback from the leader and the stakeholders is key to assessing progress in behavioral terms.
5. The process will focus on just one or two goals.  Fewer goals equals more focus, and that focus leads to a higher likelihood of meaningful change.

When you’re ready to push yourself beyond the success you’ve achieved so far, give me a call.  You’ll be amazed at how much fun reaching the next level can be.

Stephen Moore was the keynote speaker at the chamber of commerce annual meeting I attended on Tuesday.  Mr. Moore founded the Club for Growth in 1999 and is currently the lead economic writer for the Wall Street Journal.  He worked with Reagan and Bush Sr and is currently being consulted by the Terminator on fixing the budget problems in California.

Economists don’t often make engaging speakers.  Mr. Moore threw plenty of charts and graphs on the screen for us to peruse but kept the presentation light enough for any non-economist, yet relevant enough that only the ignorant partisan could ignore.

The thrust of his message was simple: if you own a business, are willing to get out there and compete, and believe that the free-market system has created the most prosperous and innovative nation on earth and the greatest level of wealth history has ever seen, then you must work to end the unparalleled level of government interference in that system that we are now seeing.

Mr. Moore showed charts of data going back to the early 1900’s. The correlation of prosperity and low tax rates, inflation and increases in money supply, economic trends and political party control of government was unmistakeable.  One just can’t ignore your head, and favor your heart, when looking at the numbers and laying blame for our current dilemma – and even more so fearing the cure we are being fed as the only way to resolve it.  The ’scariest’ graph was the one showing that the US money supply has grown 40% in the last 6 months!  When the economy turns around, we are facing an inflationary spiral that makes Jimmy Carter’s 21% interest rates and stagflation look like a walk in the park.

Ladies and gentleman, the market system works.  Greed gets squished, needs are met, and constructive destruction -  the process of shedding the old and replacing it with the new and more efficient – keeps the economic system healthy.  Companies that don’t redevelop themselves will be supplanted by those that do.  When paradigms change, everyone goes back to zero and your previous advantages are of no help in maintaining your success.  The process is not without localized pain, but the greater system operates most efficiently for everyone.

We must get angry and loud.  We cannot sit back out of fear and let the politicians continue to solve individual credit problems with a societal credit card that we’ll never be able to repay.  If we let the inefficient fail, labor, suppliers, and especially customers will gravitate to the successful and we will all benefit.  It is nonsensical and immoral for the government to take money (taxes) from successful businesses and homeowners paying their bills and give it to failing businesses and individuals who aren’t meeting their obligations.

The auto industry bail-out is a very complicated issue.  I’m not going to go into the details here.  But I am strongly against any plan that puts Nancy Pelosi, Harry Reid, and Barney Frank in the role of telling experienced auto industry executives how to run a ginormous industrial manufacturer.

We can disagree about whether or how the executives mismanaged their businesses.  But I doubt that any of us would agree that the government is better able to make the kind of decisions, in a timely fashion, that the big three need to make.

The industry isn’t sick, but the old, big three are.  They are paying a huge price for decisions they made when they had an oligopoly.  Now that more sleek competitors are in the market, those past decisions are coming back to haunt Detroit.  When they have their back against the wall, they will be forced to make changes to their business model or they will die.  And let’s not give the UAW a pass.  With labor costs nearly double what the non-union competitors bear, management and labor must make difficult decisions if they are going to survive.

I don’t believe that these difficult decisions can or will be made if politics are added to the mix.  If Washington wants to bail-out the industry, then they should offer the bridge loans with a few responsible loan covenants the way a bank would do it.  If they don’t have faith in the decision-making ability of the company’s management, then make a change one of the covenants.  But an auto czar in Washington?  That’s simply un-American.

The New York Times reported on December 5th that the U.S. unemployment rate is at a 15-year high of 6.7%.  What they didn’t tell you was that 93.3% of eligible employees who want work are working.

http://www.nytimes.com/2008/12/06/business/economy/06jobs.html?_r=1&hp

On the same day, Time reported that the foreclosure rate is running at record 3%.  Again, they don’t tell you that 97% of mortgages are not in foreclosure.

http://www.time.com/time/business/article/0,8599,1864746,00.html?imw=Y

For friends or family members that may be struggling right now, the statistics are irrelevant.  They are in pain and my prayers go out for them.  But what can you do?

Plenty!  If you own a business, you have the ability to contribute to turning the economy around.  How, you ask?  Begin by putting all the negative information presented daily by the media in perspective.  The economy isn’t strong and there are challenges we must all face.  But you can survive and even grow if you take advantage of what the market gives you.

Revisit your business plan and be open to change.  For example, if you sell real estate, your business may have been built on second or third-time home buyers.  That market is weak right now because few buyers exist for the home your traditional buyer currently owns.  If they can’t sell their current home, they can’t buy a new home.  However, the market for first-time home buyers with solid credit and a down payment is strong.  The inventory of bank-owned homes is at its highest in years.  By changing your focus and getting the education you need, you can shift your focus to the new market that provides opportunity.

Similar opportunities exist in many businesses.  Are you willing to shift your focus from a market you favored but isn’t good now, to one which you avoided in the past but is where the money is today?  Are you willing to work harder and compete smarter for the opportunities that are out there?  If you’re not, your competition will.

Successful business owners are focused on the performance goals they have for themselves and are prepared to make the shifts necessary to take advantage of what the market gives them.  Current economic conditions demand that you revisit your plan and make adjustments where necessary.

You never know.  You may find yourself calling that friend or family member and offering them a job because your business is expanding!

Good luck!

Early in what became the Great Depression, John Maynard Keynes was asked if anything similar had ever happened. “Yes,” he replied, “it was called the Dark Ages, and it lasted 400 years.” It did take 25 years, until November 1954, for the Dow to return to the peak it reached in September 1929. So caution is sensible concerning calls for a new New Deal.

The assumption is that the New Deal vanquished the Depression. Intelligent, informed people differ about why the Depression lasted so long. But people whose recipe for recovery today is another New Deal should remember that America’s biggest industrial collapse occurred in 1937, eight years after the 1929 stock market crash and nearly five years into the New Deal. In 1939, after a decade of frantic federal spending — President Herbert Hoover increased it more than 50 percent between 1929 and the inauguration of Franklin Roosevelt — unemployment was 17.2 percent.

“I say after eight years of this administration we have just as much unemployment as when we started,” lamented Henry Morgenthau, FDR’s Treasury secretary. Unemployment declined when America began selling materials to nations engaged in a war America would soon join.

In “The Forgotten Man: A New History of the Great Depression,” Amity Shlaes of the Council on Foreign Relations and Bloomberg News argues that government policies, beyond the Federal Reserve’s tight money, deepened and prolonged the Depression. The policies included encouraging strong unions and higher wages than lagging productivity justified, on the theory that workers’ spending would be stimulative. Instead, corporate profits — prerequisites for job-creating investments — were excessively drained into labor expenses that left many workers priced out of the market.

In a 2004 paper, Harold L. Cole of the University of California at Los Angeles and Lee E. Ohanian of UCLA and the Federal Reserve Bank of Minneapolis argued that the Depression would have ended in 1936, rather than in 1943, were it not for policies that magnified the power of labor and encouraged the cartelization of industries. These policies expressed the New Deal premise that the Depression was caused by excessive competition that first reduced prices and wages and then reduced employment and consumer demand. In a forthcoming paper, Ohanian argues that “much of the depth of the Depression” is explained by Hoover’s policy — a precursor of the New Deal mentality — of pressuring businesses to keep nominal wages fixed.

Furthermore, Hoover’s 1932 increase in the top income tax rate, from 25 percent to 63 percent, was unhelpful. And FDR’s hyperkinetic New Deal created uncertainties that paralyzed private-sector decision making. Which sounds familiar.

Bear Stearns? Broker a merger. Lehman Brothers? Death sentence. The $700 billion is for cleaning up toxic assets? Maybe not. Writes Russell Roberts of George Mason University:

“By acting without rhyme or reason, politicians have destroyed the rules of the game. There is no reason to invest, no reason to take risk, no reason to be prudent, no reason to look for buyers if your firm is failing. Everything is up in the air and as a result, the only prudent policy is to wait and see what the government will do next. The frenetic efforts of FDR had the same impact: Net investment was negative through much of the 1930s.”

Barack Obama says that the next stimulus should deliver a “jolt.” His adviser Austan Goolsbee says that it must be big enough to “startle the thing into submission.” Their theory is that the crisis is largely psychological, requiring shock treatment. But shocks from government have been plentiful.

Unfortunately, one thing government can do quickly and efficiently — distribute checks — could fail to stimulate because Americans might do with the money what they have been rightly criticized for not doing nearly enough: Save it. Because individual consumption is 70 percent of economic activity, St. Augustine’s prayer (”Give me chastity and continence, but not yet”) is echoed today: Make Americans thrifty but not now.

Obama’s “rescue plan for the middle class” includes a tax credit for businesses “for each new employee they hire” in America over the next two years. The assumption is that businesses will create jobs that would not have been created without the subsidy. If so, the subsidy will suffuse the economy with inefficiencies — labor costs not justified by value added.

Here we go again? A new New Deal would vindicate pessimists who say that history is not one damn thing after another, it is the same damn thing over and over.

Before you can ever reach your potential, both in your business and in your personal life, you need to understand what it is that you stand for.  Until you can answer that question you’ll be challenged to deal with many of the issues that arise in your life.

The first step in strategic planning is the development of a statement of values.  For most entrepreneurs, this seems easy.  Honesty.  Customer service.  The customer is always right.  Employees are most important.  But if the statement of values is to be anything other than simple platitudes, it is important that these values have meaning for you and will be adhered to when making decisions that impact both your customers and your employees.

For example, how do you handle a customer who is dissatisfied with the product they bought from you a week ago?  Let’s assume the product is not unique, it’s available all over town, and you don’t know this customer or remember the purchase.  And the customer doesn’t have a receipt.  And the package has been opened.  And the product has been used.  You’re not going to be able to return it to your vendor or resell the item.

As a customer, we’ve all been in this situation.  We’re not trying to take advantage and are being as honest as we can be in returning this product.  We’re not expecting the store to take it back.  So when they refuse to refund our money or seek our satisfaction in any way, we may not leave angry.  We’re also not likely to favor that business over any others, or to tell too many others about the company’s outstanding service.

As a vendor, we’ve been here, too.  We don’t know whether the person actually bought the product from us.  We are going to take a hit if we refund or exchange the product.  If we let our employee make the decision about whether to accept this return, the employees will give away the store, because they never make the right decisions for our business.

I stopped at a large chain convenience store this morning for gas.  I had a coupon for a discount which meant I had to go into the store to pay.  The sign on the pump said it was a pre-pay only pump.  I had to use my card or go into the store before I could purchase gas.  So in I went.  I had to leave a driver’s license or a credit card with the clerk because I didn’t know how much gas I needed.  Now I go out, pump my gas, and go back in to pay.  A terrible inconvenience for me.  When I commented to the clerk that they must have a real problem with drive offs, he said they’d lost $5,000 in the month prior to instituting the pre-pay policy.

As a customer, I was disappointed.  I had to take two trips into the store if I wanted to use the coupon that they provided.  I was told that they didn’t trust me to pay for my gas.  I had to leave my identification with a clerk I was supposed to trust not to copy or misuse it.  While I understand the vendor’s frustration, I’ll avoid that store the next time.  In the process of protecting their own interests, they’ve disrespected mine.

So which is it?  Honesty, customer service, respect for the employee?  Or when push comes to shove do we look out for ourselves?  These are difficult decisions for business owners, especially when finances are tight.  But how you handle these situations is what brings your statement of values to life and demonstrates to your employees whether the statement has meaning or is just a marketing ploy.

So what do you stand for?  And how far are you willing to go to live by the values you’ve declared as important to your business?

I met the owner of a small printing shop yesterday and we started talking about time off.  He told me that he hasn’t taken a vacation, a real vacation of a week or longer without the blackberry or email, since he became a business owner.  When I asked him why, he just laughed and reminded me that he owns a small business.  He was needed at the shop to keep the business running.

Sound familiar?  Being in control of your own destiny is right at the top of the list of reasons people get into business for themselves.  They want to make their own schedule, have flexibility, work less.  Yet, except for a small minority of business owners, what they end up with is just the opposite.  They are the first one at work in the morning, the last one to leave at the end of the day, and the only one who can’t call in sick.  All of the employees want, and take, vacations while the owner keeps the business afloat.

What’s going on?  You’re the boss but the business is controlling you, not the other way around.  In my experience, there are two causes here.  First, the business owner has far more at risk than do the employees.  After all, its your name on the door and if the business fails, the employees go off and find another job.  The owner has to deal with the “funeral” and the grieving process goes on for years.  On the other hand, success depends on the owner, alone.  The employees aren’t going to make the business lucrative; they’re just employees.  And I don’t have enough money to hire top-notch employees, so mine are only interested in themselves and their paycheck.

Or are they?  That brings us to the second thing causing the business to control the owner, rather than the other way around.  Everyone wants to feel that their contribution is important.  They want to live up to an expectation you have of them.  They want to grow in their career.  Your employees are no different.  They want to be trusted and they want to succeed.  It’s the owner who is too afraid to give them a chance, to trust to her employees the important decisions.  She is creating frustrated employees who underperform.

You’ve heard this many times.  Hire the best.  Pay a little extra for good people who can contribute.  They will make you more money than they cost.  Yet the small business owner continues to hire less than qualified employees, then won’t (or can’t) invest in training.  The owner is left to complain about being unable to trust her business to her employees.

Control is a double-edged sword.  It’s nice to have, lends a feeling of power, and fools us into believing that we are self-directed.  The real power comes when you give up control.  Empower your staff to make decisions and to take control.  They will make mistakes.  So will you.  Give them permission to make mistakes and to learn from them.

When you’ve established a strong organizational set of values and a compelling vision, employees will, more often than not, make the decisions you’d expect.  When you hold them accountable for well-understood performance standards, they’ll work to meet those standards.  Employees might fall short once in a while but they will learn and do better the next time.  You will be amazed at how much more “in control of your destiny” you’ll be when you shed some of the control you retain.

And you can take that vacation, without the blackberry, without the cell phone, without worry.  Good luck and good business.

Finally, the all-knowing federal government is going to produce the automobiles we’ve all wanted for so long, but couldn’t buy!

As a condition for receiving another $25 billion of bail-out money, our federal government is going to require that the auto industry provide certain concessions, reportedly including a greater emphasis on “green” vehicles, slashed executive compensation, and additional guarantees for the workers.

I believe it was Russia which figured out how to manufacture state-designed automobiles that citizens didn’t want, fell apart, and required on-going subsidies from the government.  Is that the road we want to travel?

If government loans are coming, they should come with no strings attached.  Government cannot be allowed into the boardroom and R&D department.  If strings must be attached, then the loan shouldn’t be made.

And that global warming thing?  Did you know that the earth has been COOLING since 1998?  Or that the arctic ice pack is 30% larger than it was at this time last year?  Or that NASA has been forced to retract many of the statistics they’ve put out because they were just plain wrong about global warming?  And that significantly more people die every year from the cold than from the heat?

Business owners, we need to put our collective thinking caps back on and conduct a sustained campaign to resist the environmental religion.  We are all stewards of our environment, but environmentalists are killing our economy, for no good reason.