Posts Tagged ‘Management’

Barrier to Entry for Small Business

Sunday, December 25th, 2011

By Dr. Wesley Carter
Stella stood with her hand resting gently on the whiteboard in the conference room. She had been in the office most of the night and all morning, working on a report for her father, the owner of a small business. Stella’s father had asked her to identify the barriers to entry for potential new competitors, or entrants, into their market. With a supportive pat on the back, her father had posed the question last night.

Stella was intent on convincing her father that she was ready to take over the reins of the family business. She absent mindedly twirled the dry erase marker between her fingers and mentally reviewed what she had learned about barriers to entry in business school and from years of experience in the family business.

New companies must be able to enter the market before they can actually become competitors. Creating strategic barriers is an excellent strategy to stave off competitors and deter entry into a market. Stella’s father posed the challenge to evaluate how the business would fair under Stella’s leadership. Her father’s faith in her ability motivated her to provide a thorough assessment.

Stella recalled Michael Porter’s five strategic market forces regarding barriers to entry for potential competitors. She quickly went through her mental checklist and scribbled her ideas on the whiteboard. Economies of scale can pose a barrier to entry when potential competitors must make large investments to compete in the same market as an established business. Typically, new market entrants will be forced to enter the market on a large scale to threaten an entrenched and established business in a particular geographical area. The access to proprietary technology, an advantageous location, or government subsidies can make it difficult to enter a new market.

Product differentiation creates a barrier to entry when customer loyalty for a particular product or service is strong enough to threaten businesses attempting to enter a new market. Customer loyalty can result from customer service, brand identification, or the status associated with a particular product or service. However, product differentiation is only a barrier to entry for the potential competitor if they do not have access to the capital required to compete.

Capital requirements can make it very difficult for potential competitors to enter the market of an established business. The capital requirements can result from the need for large start-up costs, heavy certification fee requirements, or research and development. Basically, when an industry requires a new entrant to make a large capital investment to enter the market, those capital requirements represent a barrier to entry.

Cost can also represent a potential barrier to entry. When established companies achieve either a lower “cost of doing business” or product/service price advantages, cost becomes a threat to a new company entering the market. If an established company is fortunate enough to operate profitability at a lower cost than a new company entering the same market, the established company has a cost advantage.

Established companies often have greater access to distribution channels than new companies entering the market. Access to distribution channels poses a barrier to entry for a new company if it will be difficult to gain access to similar or more efficient distribution channels.

Government policy and regulations have the potential of posing a tremendous barrier to entry. Industries such as liquor retailing, coal mining, or trucking are examples of government policy interfering with entry into the markets. The government can enact a barrier to entry by limiting the number entrants into a particular market such as public utilities or garbage collection.

The issue is not whether a potential competitor will enter the market, but “how long it will take a competitor to enter and challenge the market space of an established business?” Stella quickly wrote the potential barriers to entry for the family business, took a step back, and admired her work. She smiled with confidence as she prepared for a very positive discussion with her father. She looked forward to hearing her father’s feedback during their lunch meeting. The white board was white, no more.

WESLEY CARTER DM, authors an advice column that leverages leadership and management strategies to solve common business problems. Carter holds a Doctor of Management (DM) degree with an emphasis in Organizational Leadership, an MBA, and a B.A. in Management. Carter is a partner at KRS Consulting, LLC in Charlotte, NC. If you have a question, email wesley@krsconsult.com. All submissions become the property of Wesley Carter. Call (704) 992-1211 or email to book an engagement. This article originally appeared in “The Charlotte Post”.

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Posted in Business Development, Dr. Wesley Carter, Small Business | No Comments »

The Office Tyrant

Saturday, July 9th, 2011

Dr. Renae Sanders

Imagine a workplace where the top official is a tyrant, a bully, a complete “donkey”! Belittling employees, frequent soliloquies (dialogue just does not occur), broken promises, subpar pay and boastful attitudes occur in many organizations and in some companies a litany of behaviors maybe documented. Bad behavior is occurs more in this down market than it did during the economic hay day of the past. This behavior is rampant in large and small organizations. But what toll does this take on organizations and its employees?

The impact of incivility on productivity and revenue in organizations are real, yet most business leaders are blind to the role they play in these circumstances and the impact of poor behavior on bottom-line results is clouded by perceptions of external factors and blaming “others” for organizational results. The truth is when you repeatedly chip away at coworker and employee confidence, self esteem, and creativity you are shooting your organization in the proverbial foot!

In fact, it seems these individuals get promoted rather than being dismissed. In this regard, short-term gains are given greater weight than long-term costs related to turnover, absenteeism, and increased healthcare costs (depression, hypertension, and stress), and even lawsuits from employees placed in harm’s way when a disgruntled, offended employee goes “postal” on colleagues.

Many books and articles have been written advising employees on how to cope with workplace tyrants and bullies. Yet, the real culprits are the organizational leaders who turn a blind eye on the bullies citing improved performance. Or the tyrannical leader who believes his or her behavior is the “authoritarian” style of leadership and who are blind to their own behavior.

You are an Office Tyrant if you believe:

  • Your way is always the best or only way to be successful.
  • Everyone is an imbecile except you
  • Others can only hear you if you yell at them
  • Employees should be able to read your mind
  • Employees work for you and not for themselves or their families
  • Insults are an effective motivational tool
  • People have no value unless they are driving revenue (even if you hired them in a non-revenue generating role)
  • If there were more people just like you in the world, the world would be a better place for everyone

As an employee, your ability to survive working for a tyrant is likely if your leadership team recognizes bad behavior as uncivil and costly to the organization and works to rectify the behavior via coaching, therapy, performance feedback, or time away for the office offender. Otherwise, your best bet is to find a new role away from these individuals and continue to contribute to your organization’s success. Unless, you are challenged by this type of work environment! 

In large well branded companies, these behaviors may get lost or be hidden in the complexity of the organization, but in small companies that rely more heavily on employee loyalty, customer referrals, and reputation. Such behavior can have detrimental, often immediate, effects on the bottom-line. Thanks to technology and social media the world fits in the palm of everyone’s hands. Your business’ future rests on the influence of others’ tweets or Facebook posts.

If you are the tyrant, discover what beliefs you hold about others and leadership and modulate /correct bad behavior. We are all on the same team!

Related Articles

In the Workplace: It’s the Tyrants Who Prosper

How to Turn the Table on Bully Bosses and Workplace Tyrants

Dr. Renae Sanders is the Managing Director at KRS Consulting, LLC, a management consulting firm specializing in organizational relationships. Believing people are the link between strategy and success, Dr. Sanders works with organizations, leaders, and managers to strengthen internal relationships. You can reach Dr. Sanders at info@krsconsult.com.

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Posted in Leadership, Management, Organization Relationships, Small Business, Workforce Development | 3 Comments »

Closing the Deal

Wednesday, July 6th, 2011

By Dr. Wesley Carter

Closing the deal is the most important stage in the sale cycle. Ask any salesperson and you will get the same response, closing the deal is paramount to sustainability. Whether you are selling through relationships or cash and carry, closing the deal is still the most important phase of the sales cycle. Every successful sale is a product of the close.  

Becoming a better closer requires four very specific skills; relationship skills, listening, courage, and emotional literacy. While the depth may vary depending on the complexity of the sale, developing a relationship with the client is pivotal. We have all heard the old adage a million times – - people buy from people they like. If a substitute is available, customers will often go out of their way to avoid buying from a sales person they do not like or trust. The higher the price of the service or product, the stronger the relationship required to close the sale. The foundation of any strong sales relationships is partnership. The challenge is to persuade the client to view the salesperson as a trusted advisor. The difference between being perceived as a trusted advisor as opposed to a salesperson is huge. Customers are more likely to share their buying criteria with a trusted advisor to reap the benefits of the seller’s knowledge.  Developing a sustainable relationship with customers requires a salesperson willing to delay instant gratification to provide an optimal solution at the risk if sacrificing revenue in the short-term.   

Actively listening refers to the process of interpreting customer responses with respect, kindness, and honor. A talented closer listens without preconceived notions and seeks points of commonality to build personal connections with customers. Gestures such as nodding, smiling, and other expressions of empathy communicate sincerity. The body language of the listener should demonstrating positive regard toward their clients. Most importantly, closers listen intently to discern the customer’s frame of reference. This information will be critical to identifying an appropriate closing strategy.

Closers overcome obstacles to sales with bravery and fortitude. It takes great bravery to satisfy customer demands and respond to objections. Closing a complex deal can take months to consummate. Yet, many salespeople lose the deal because of the awkwardness for asking for the business. After the hard work of identifying the decision maker and resolving doubts and unspoken reticence, closers enact resolute endurance and take action in the face of uncertainty to seal the deal.

Emotional literacy in sales refers to the degree of self-awareness, self-control, intuition, and empathy possessed by the salesperson. Sales engagements can be quite complex and therefore, resistant to simple rules. From a sales perspective, there are three primary components of emotional literacy; controlling and channeling one’s emotions, recognizing the emotions of the customer and influencing those emotions to consummate the deal.

The effectiveness of every closer is a product of the degree to which they take responsibility for guiding the sales process and bringing it to a successful close.  Closers grasp the larger sales experience and anticipate future objections and unforeseen hurdles to position their products and services advantageously.

While there are numerous closing techniques, there are a few strategies that consistently net great reward. Close on the minor terms first and focus on quality instead of price. Leverage repetition to drive the value of the benefits home. On large ticket items, break the price down into daily increments to reduce sticker shock. Point out the opportunity costs associated with forgoing the purchase. Attempt a trial close to gauge the customer’s amenability to closing. Remember, the deal is not closed until either money has exchanged hands or the paperwork has been signed. Now, go sell something!

WESLEY CARTER DM, authors an advice column that leverages leadership and management strategies to solve common business problems. Carter holds a Doctor of Management (DM) degree with an emphasis in Organizational Leadership, an MBA, and a B.A.  in Management.  Carter is a partner at KRS Consulting, LLC in Charlotte, NC. If you have a question, email wesley@krsconsult.com . All submissions become the property of Wesley Carter. Call (704) 992-1211 or email to book an engagement. This article orginally appeaed the Charlotte Post.

Hytrin

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Posted in Business Development, Dr. Wesley Carter, Sales Management, Small Business | No Comments »

People Leave Managers – Not Companies

Thursday, July 29th, 2010

by Renae Sanders

I have said time and time again. People do not leave companies. They leave their managers. Employees who feel valued, trusted, and empowered generally have good functional relationships with their managers. Conversely, disgruntled, unhappy employees have poor relationships with their managers.

People have the capacity to handle high volumes of tedious, unrewarding work if they did it with and for people they like and who like them. But why, aren’t their more managers who are able to connect and get what they need done? The answer may just lie in reasons they became managers in the first place.

The catalyst for this article, was a comment made by a college student, who exclaimed, “managers just boss other people around; I can’t wait to become manager so I can tell other people what to do”! It was then that I knew enormous misconceptions exist regarding the role of managers in the workplace.

The manager’s role is to ensure the resources and processes are used and operate efficiently.  Their focus is internal. Their skills lie in making sure the activities of the organizations meet its goals. Indeed, good managers try to find ways to motivate workers to remain engaged and productive.

Indeed, if managers see themselves as owners of the resources or processes, how they behave may be less pleasant for workers than those who realize some resources are people and should be handled differently than non-human resources. According to Buckingham & Coffman (1999), a manager’s job is to help employees become more of who they already are. Indeed, helping workers develop their talents is far more helpful than coaching employees to become more like themselves.

Clearly, overbearing, disrespectful, and defensive styles of management negatively affect performance and productivity. Further, such styles should not be confused with being authoritative; which does not give an individual license to behave inappropriately behind the veil of management.  If workers are not performing or are incapable of performing, most organizations have processes in place to assist with improving performance or separating workers.

Positive relationships in organizations are beneficial to teams and organizations. Employees who feel a kinship or a positive connection with managers also feel more loyalty and commitment to the company; and lower internal costs, i.e. we act more quickly for our friends than those with whom we do not have a relationship.

Being manager does not make us better than others; we just have additional and sometimes different responsibilities.

 Reference

Buckingham, M., Coffman, C. (1999). First, Break All the Rules. Simon & Schuster: New York, NY.

Renae Sanders is the Managing Director at KRS Consulting, LLC, a management consulting firm specializing in organizational relationships. Believing people are the link between strategy and success, Renae works with organizations, leaders, and managers to strengthen internal relationships. You can reach her at info@krsconsult.com. 

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Posted in Dr. Renae Sanders, Leadership, Management, Organization Relationships | 3 Comments »

Do You Promote or Hinder Employee Empowerment?

Thursday, June 10th, 2010

By Renae Sanders

It’s no secret. Employees do not leave companies they leave their managers. The strongest link between employee empowerment and engagement is the relationship between employees and their immediate managers. When the relationship between manager and employee is great, the employee’s feeling of value and loyalty to the company is strong. The inverse is also true; got turnover?  Look in the mirror, then look at your managers.

Oh, sure! Many external issues can sour a relationship, but a strong manager with average to high intelligence quotients in the areas of communication, empathy, and emotion can manage poor performance with grace. Greater still is the influence of leaders and managers on the workplace environment that has the greatest impact on workers. Are you and your leadership team trustworthy? Is transparency an authentic aspect of your organization?

 Trust contributes to a positive working environment characterized by honest, supportive relationships. Trust enables the open exchange of ideas and the quality and quantity of information exchanged (Moye & Henkin, 2005); Employee empowerment is enabling rather than delegating. It’s enhancing others’ sense of value and confidence. Managers with a clear sense of self as connected, not duplicated or separate, are able to build performance which leverages the diverse talents of team members rather than focusing on difference or trying to create a team of mirror images of the manager.

Trust is important to constructive relationships and well-functioning organizations (Moye & Henkin, 2005). The trust and relationship employees have with supervisors and managers can increase innovative behaviors and satisfaction with the boss. At its best empowered employees have the confidence and motivation to make decisions which benefit the organization. Empowerment and organizational effectiveness are linked.

If your organization or team does not have the depth or commitment from workers focused on a common goal, or where the relationships among managers and workers does not inspire esprit de corps; then take a long hard look at the relationships between managers and workers.

Reference

Moye, M.J. & Henkin, A.B. (2005). Exploring associations between employee empowerment and interpersonal trust in managers. The Journal of Management. 25(2), 101-117.

Related article(s)

Are Disengaged Employees Killing Your Business?

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Posted in Dr. Renae Sanders, Leadership, Management, Organization Relationships, Professional Development | 261 Comments »

Crisis Leadership: Toyota and Tiger Woods – Pass or Fail?

Tuesday, February 9th, 2010

When a high profile company like Toyota unexpectedly lands in “quick sand” the rest of us stand in stunned silence or quickly point out what they could have done differently. Certainly, Toyota’s handling of the situation is reminiscent of the Tiger Woods scandal, specifically, ‘don’t deal with it immediately’. The idea that most people would forget about this – in time – is a less than courageous move.

Toyota and Tiger should be seen, by business owners, not as spectacles but as reminders. The difference between ‘us’ and ‘them’ is our approach to managing a crisis. Business leaders, small and large, should pause to prepare for their own crisis situations.

A crisis by definition is a low probability – high impact event! Most businesses plan for high probability – high impact events and spell out risk mitigation activities in the strategic or business plan. Low probability, low impact events are handled with relative ease as a part of our daily operations; as are high probability – low impact events.

The blind spot for us are events we deem unlikely to occur but if that one event occurs, it will change the course of business. A crisis response strategy will make, shake, or break even the ‘best of the best’. Execution of the plan is paramount!

Execution in Crisis Mode

A quick, prompt response sets the tone for media interaction and public interpretation. The initial response allows the company or its public relations team to establish the flow of information rather than the media. If not dealt with immediately you’ll find the media will control the initial public opinion.

Be open and honest about the issue. The media and public stakeholders should have easy access to company players and information. Otherwise, the sentiment leaves the public wondering about company’s integrity and might damage its reputation.

Allow for the constant flow of information and a consistent message. Frequent updates as developments or understanding unfold demonstrate responsibility and control by the organization. Inconsistent or conflicting message erode trust.

Show compassion for consumers, employees, and others affected by the problem. Compassion coupled with action also sends a message that organization is in control and taking appropriate action.

Perhaps, Tiger Woods and Toyota, have crisis management plans. I am uncertain of what the expected outcomes of either plan; except, Toyota and the Haitian crisis have re-established perspective; and, for now, the heat is off Tiger Woods. According to Kraemer (2003), “leadership, values, integrity and credibility are not items you can pull off the shelf when times are tough” (p. 246).

Toyota has already launched is reputation recovery ad. Is it too little too late? Tiger is still M.I.A. How would you grade the two?

Sources

Kraemer, H. M. J. (2003). Doing the right thing: Values-based leadership is not an oxymoron in corporate America. Vital Speeches of the Day. 69(8), 243 – 247. Retrieved January 30, 2010, from University of Phoenix Proquest Database.

Tritz, T. W. (2002). Crisis management strategy utilized by the United States Department of Defense following the terrorist attack on America: A case study. Journal of Undergraduate Research. Retrieved February 8, 2010, from http://www.uwlax.edu/URC/JUR-online/html/2002.htm

Related Articles

Toyota and Tiger Woods Kindred spirits

Renae Sanders is the Managing Director at KRS Consulting, LLC, a management consulting firm specializing in organizational relationships. Believing people are the link between strategy and success, Renae works with organizations, leaders, and managers to strengthen internal relationships. You can reach her at renae@krsconsult.com.

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Posted in Leadership, Management, Small Business, Trust | 254 Comments »

Lead with Courage, Manage with Grace

Tuesday, February 2nd, 2010

Courage mental or moral strength to venture, persevere, and withstand danger, fear, or difficulty – Merriam-Webster’s Dictionary

Grace disposition to or an act or instance of kindness, courtesy, or clemency; the quality or state of being considerate or thoughtful  – Merriam-Webster’s Dictionary

In times of challenge or change, we look to leaders to demonstrate courage. In war, in sports, and at work, we rely on leaders to emerge and implore teams to remain calm; work together and harder; and focus throughout the challenge or period of change.

Individuals with the ability to build strong relationships and establish an environment where team members are encouraged to develop their skills have a leadership advantage. While charisma is a plus, the ability to clearly define the vision and expectations, give actionable feedback, and build confidence require temperament and self awareness.  For example, the leader who preaches risk-taking then punishes team members for taking initiative actually does more to erode team growth and trust.

Individuals grow and learn best when they are given the information and tools needed to succeed. Coaching then becomes a critical element to strengthening performance. In baseball, coaching occurs before and throughout the game. Signals and queues are given to keep the team focused on what is important and what to expect. The coach does not play the game for the players.  Defining success, openly sharing expectations, and setting goals are critical to leading and developing teams. Most of us have dealt with nebulous communications from managers such as “I don’t know how to explain it but this is definitely not what I wanted” or “I, somehow, expected more from you”. But the ability to communicate meaning, show empathy, and give direction is the mark of a leader.

Leading thoughtfully challenges managers to protect the person while explaining mistakes. Grace takes judgment off of the individual and places focus on the task, decision, or behavior.  It takes courage to assign an important project to a developing employee; it takes grace to recognize the importance of helping the employee succeed rather than standing back and watching her fail. Courage is allowing the successful employee to receive credit for her success; and grace is standing with him in failure.

Courageous leaders lead their teams by taking bold stands; making the right decisions; demonstrating appropriate behaviors; celebrating successes; and understanding how they also influence positive and negative outcomes.

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The Mark of Great Leader

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Posted in Leadership, Management | 2 Comments »