Category Archives: Improving Your Business

Paying for Rural Fiber

I am in an interesting place in the industry in that our firm works for both municipalities as well as lots of small commercial ISPs like telcos, cable companies and CLECs. One thing that I have noticed over the years is that there is a huge amount of distrust by commercial ISPs towards municipalities that explore building fiber optic networks.

And I think for the most part this distrust is misplaced. It’s been my experience that there are almost no cities that want to be an ISP. I think perhaps the idea that cities want to do this has been caused by the big telcos and cable companies spreading alarms about the cities that have done this. I think that most of the cities that have built fiber, except for a few like Chattanooga, would have much preferred to have a commercial company bring competitive broadband to their city.

It’s easy to forget about the fear and angst in rural America concerning broadband. Rural communities keep seeing other rural places that are getting gigabit broadband while they still have homes that don’t even have DSL. They look around and see little towns of their own size with broadband that are thriving and they realize that if their town stays on the wrong side of the digital divide that their long term viability is at risk.

Perhaps the best example of this that I’ve heard came from Hiawatha Broadband of Winona, Minnesota. This is a commercial overbuilder who built broadband networks to a number of small towns in their region. They have been at this for a while and what they observed in the last census is that every one of the towns with one of their broadband networks gained significant population while every town around them that doesn’t have broadband is losing population.

People need broadband and they are going to live where they can get it. New homes are going to be built where there is broadband. People want to work at home and can only do that where there is broadband. And people with kids want broadband so that their family is not at a disadvantage. Towns and rural areas without broadband understand these issues and they don’t want their area to dry up and disappear.

I remember a bunch of articles back in 2012 where somebody had estimated that it would cost $140 billion to build fiber everywhere in the country. I have no idea if that is a good estimate, but obviously it would cost a lot. What I think is important to understand is that even if all of the small telcos and cable companies and electric coops wanted to build fiber everywhere that the combined borrowing power of those companies in aggregate is not large enough to get the job done. As much as folks want to think that small carriers are the national solution, as a whole they could not borrow the needed billions.

What I am finding is that communities are starting to wake to the fact that they are going to have to contribute to financing fiber if they want broadband. The likelihood of an ISP just showing up and building fiber in most rural communities is very small. It’s hard to make a good business case with rural fiber, and even if you can make the case it’s exceedingly difficult to borrow the money.

So I think it’s time to get rid of the mistrust between municipalities and small ISPs and instead come together to get the job done. I’ve done a lot of financial analysis of rural America and fiber projects are a lot more feasible when part of the project is funded by municipal bonds and not just from bank debt.

I think the way to get this done is through the creation of public private partnerships (PPPs). There are already a number of examples of places where this has worked, but there needs to be a whole lot more PPPs created. If rural towns and counties really want to get broadband then they ought to be willing to put skin in the game to make it happen. It’s something that taxpayers want and rural surveys are generally overwhelmingly in favor of local government helping to solve their broadband problems.

There are some very specific steps that ought to be taken to put together a good PPP for rural fiber. It would probably take a dozen blogs to discuss this topic thoroughly. I may or may not do that, but meanwhile, if your community needs a broadband solution give me a yell. I can tell you how other communities have gotten this done and point you in the right direction towards finding a PPP broadband solution for your area.

The Evolution of the Fiber Business Plan

Fiber CableThe other day it struck me how much the telecom consulting business has changed over the last decade. A decade ago a huge amount of the focus of an FTTP feasibility study was about integration. And today all of the emphasis is about finding the money to pay for fiber.

Integration is the effort required to make the equipment from different vendors work together. In the early days of the FTTP industry this was a very big deal because there were different issues with every brand of electronics in the industry. There was nothing at all automatic about getting a cable TV headend or telephone voice switch working on a given fiber network.

A lot of the work involved in choosing a brand of electronics was deciding which brand had the least number of bad things that wouldn’t work on an FTTP network. There was a time when very basic things like supporting a fax line or provisioning a T1 on FTTP was an issue. There were tons of problems getting some telephone features to work. And no matter what the vendors told you, when it came time to get a new network up and running all sorts of new surprises would pop out after each new software release from the many vendors. It got so bad that we were recommending not updating software at one point.

Sometimes the integration issues were significant. I had one client who was the first one to try an IPTV cable headend on their FTTP network and they had a huge number of headaches. The integration caused them a delay with their launch and their problems with cable delivery were so bad that they got a bad name in their market that took years to overcome.

But today there is almost no worry about making things work on an FTTP network. Most products are now delivered as native Ethernet and all of the work of decoding the signals is done by smart devices like set-top boxes or modems rather than in the fiber electronics. I can’t recall having used the word integration for many years, which is refreshing compared to a time when we had to practically scare clients to make them understand that they were going to see surprises and have delays every time they launched a new product on their network.

Today we are able to make a pretty reliable estimate of the cost of the electronics and know that when it comes time to get into the business that whatever major brand of electronics is chosen will work well.

Today our emphasis has instead turned towards figuring out how to pay for building a fiber network. This has never been easy, but it seems like all of the old avenues of financing – be that bank loans or municipal bonds – are harder to close these days than in the past. In the last fifteen years banks have tightened up significantly compared to the times before the housing meltdown of a few years ago. And municipal bonds for fiber are a harder sell due to a few failures of municipal revenue bonds for fiber as well as a tougher bond market in general.

I find that I spend far more time these says working on financing and as a firm we spend far less time working on engineering issues. I now warn clients that funding will be the big hurdle where in the past it was the worry of successfully getting all the products to work right. I now put a whole lot of emphasis up front with a new client on finding a business plan that they can take to the bank. I know that bankers are going to scrutinize every assumption and that there has to be a lot of safety margin in any business plan so that it will remain solvent even if it does worse than hoped for.

Managing Your Time

hourglassThis blog is a little off the beaten path because it doesn’t talk specifically about the telecom industry. But I have to assume that the majority of my readers either own or work at a telecom provider of some sort. As part of my consulting practice I occasionally provide what I would call mentoring advice to those clients that seem to need it.

As a consultant I face the same kinds of daily work pressures that most people do. In a typical day I work on a wide array of projects involving a diverse range of topics. I also have the typical daily interruptions from having calls with clients and my staff. Because CCG is a virtual company and we all work out of our homes we don’t have meetings to attend, but my schedule is frequently peppered with conference calls. And like most people these days I get deluged with emails that require a response.

Over the years I have developed some time management techniques that work for me. My particular solutions might not work for everybody, but there are always techniques that can make your day more productive. And being productive means not having to work late to catch up on those things that you didn’t get done during the work day.

My first technique is that I have a morning ritual to get my day started off right. I try very hard not to schedule conference calls too early in the workday to eat into this time. I am an early riser and I often start very early. But no matter what happens I make sure that I am at my desk by 7:00 in the morning.

I use the first hour to take care of what I call repetitive housekeeping tasks. I read the emails that arrived overnight and will respond to the more urgent ones. I take time during this hour to either write one of these blogs or else to at least think about future topics. And I use this hour to try to keep current with what is going on in the industry. Over the years I have developed a list of news sources that I trust to tell me about things I ought to know. During this hour I am not doing client work, but am instead taking care of housekeeping. I found that if I am not this disciplined then the housekeeping never gets done right.

The other technique that has worked really well for me is that I schedule production work time in the same manner that I schedule conference calls. I don’t actually put these time periods on my calendar, but I look ahead each day and designate some blocks of times for getting work done. As a consultant I produce a lot of work in the form of complex spreadsheets, long reports or detailed memos. These are the things that I tackle during these work hours. Of course, I tackle them any other time I’m not busy, but during these work hours I block off outside influences. I don’t read email or answer the phone, just as I wouldn’t if I was talking to a client on the phone. I’ve found that when I know I won’t be interrupted that I can be at my peak of productivity. It seems, at least to me, that worrying about being interrupted is almost as bad as an interruption.

The last technique I use might best be called mindfulness. I just started using that word recently because I saw an article that said that Google and a bunch of other large corporations had formal mindfulness programs. In my case, what I mean by this is that I set aside time every day to just think. I am either trying to solve a specific problem for a client or else I think about some industry topic that interests me.

Because I work at home I tackle mindfulness while tackling very routine chores. I might go and load the dishes in the dishwasher, walk the dog, or clean the cat litter. But while I am doing these tasks I am generally deep in thought and this is something I do deliberately. My wife says that she always knows when I am in this contemplative mood and she stays out of my way. And she might as well because I never remember a word she tells me when I am lost in thought. But she doesn’t seem to mind the chores I get done! Again, this is something that I do deliberately. I don’t usually schedule these in the same way that I do work time, but this is something that I do every day at least once each morning and afternoon. If I was in an office environment I would likely just walk around the building or somehow get away from the desk and give myself the time that I need to think. I solve many of the problems I face this way and if I didn’t do this I would be a lot less productive

When clients tell me that they are too busy to accomplish their work goals I generally tell them about my own habits. The fact is that we are all different and my techniques might not work for you at all. But I do know that being productive is something that can be scheduled and managed and that if you control your day you are going to be a lot happier.

Building Fiber to the X

Fiber CableAnybody that is a client of CCG probably knows that we build business plans as one of our primary products. Over the years we have built business plans for just about every kind of network and technology imaginable. And as you might suspect, these days we build a whole lot of fiber-to-the-premise business models for markets of all sizes.

I recently realized that we are on the verge of being able to use FTTP networks to do a lot more than serve residents and businesses. My typical business plan concentrates on the revenue streams that can be gotten from residential and business customers. We also look at a few other revenue streams like selling to large customers like schools or cell phone towers. And we normally consider wholesale sales made to other carriers already in the market.

But everything I read tells me that there are soon going to a whole lot of new opportunities for using a fiber network, particularly in medium to large markets. We are seeing some of these opportunities today, but each of these areas promises to get larger as time goes by. Consider some of the following:

Outdoor WiFi Network: More and more cities and even some carriers are starting to foresee business plans that include numerous outdoor WiFi hotspots. This can be for law enforcement and municipal use, for roaming WiFi cellphones, to provide a digital divide solution, or just to provide a service to citizens or customers.

Smart Lampposts: Similar to WiFi hotspots are smart lampposts that include smarter lighting that saves energy coupled with WiFi hotspots.

Mini Cell Sites: As the cellular carriers contemplate going to 5G they are going to need a lot more and smaller cell sites located close to users. And these cell sites will need fiber.

Traffic Light Systems: There are new systems of intelligent traffic signals that promise to significantly improve traffic flows using AI.

Cameras: There is a proliferation of cameras today including private security cameras, traffic cameras, web-cams, and law enforcement security monitoring.

Digital Advertising Signs: There are now programmable billboards that can change the display through programming.

IoT Aggregation Points: Most carriers envision a network of IoT aggregation points that gather the traffic to and from outdoor and other IoT monitors as a separate Ethernet network.

Smart Meter Aggregation Points: Although wireless technology seems to have won the smart meter race, these networks need neighborhood aggregation points to gather signals from the wireless monitors.

SCADA Systems for Electric and Water Utility Monitoring: While many electric and water systems now have fiber networks to connect monitors in their system, as we develop more sophisticated monitoring there will be the need for more monitoring points.

On top of these applications there are others that nobody has yet thought of, into a business plan. But fiber is a long-term investment and there are going to be numerous revenue opportunities like these that are going to help to pay for fiber, assuming that a fiber network is deployed with these kinds of connections in mind. People always ask me what happens to a fiber network as cable TV and telephone penetration rates drop, and at least part of the answer is that there are going to be numerous locations in a community that are going to require a fiber connection. None of us knows yet how these future revenue streams will be priced, but we know these are all revenue opportunities and that they are all coming in the not-too-distant future.

Take Control of Your Biases

brain-only-2011Today I am going to stray a bit from technology in order to write about something that I think is just as important to a lot of my clients. The topic today is about cognitive bias and how it might affect the way you look at your own company or at your customers. In this case I am talking about bias that interferes with the ability to make the right business decisions. People often associate bias with prejudice, but in this case it’s something different. I’m talking about how the normal way that most entrepreneurs think can lead them to see the world differently than it really is. There are two particular kinds of bias that can be a problem for a business owner or manager – confirmation bias and what is called the curse of knowledge.

Confirmation bias is the natural tendency to interpret information in a way that confirms a person’s view of the way things work. This kind of bias is probably most easily demonstrated in politics where people tend to believe news sites and politicians from the party or political leaning that most affirms their world view. But this kind of bias is present everywhere in life and can be a huge problem for a businessperson.

I can list many examples of confirmation bias I have seen with my clients. Some examples that come to mind include:

  • A company owner that believed his company was doing great because revenues were up year over year. But the increases were all due to cable rate increases and the company was losing customers and market share. He did not recognize a number of problems within the company and was not looking for any.
  • A company was moving into a new market and the owner was shocked when nobody was buying his products and services. He had assumed that customers wanted what he was selling.
  • A company that was convinced that Comcast had singled him out, was using unfair competition practices, and that this was why he was doing poorly. In fact Comcast was acting in that community identically as they were in surrounding communities.

In all three cases my client was seeing the world they way they thought it worked instead of seeing it the way it really is. If any business person can’t see the major problems in their own business or if they just blindly assume that assume that they can just ‘build it and they will come”, then they have let their cognitive bias overcome better judgement.

The other kind of bias is called curse of knowledge cognition which causes a better-informed person to find it difficult to see from the perspective of a lesser-informed person. I frequently see this when ISPs assume that their products are superior to their competitors and they just assume people will automatically choose their product over the competition. I often hear engineers and others declare things like, “Our broadband product is faster and has less latency. How can anybody else pick that other company’s product?”

This bias causes you to assume that other people think the way that you do, and that can be a problem in an industry where most of the people working at ISPs are technical and most of their customers are not.

Business owners need to remind themselves about such biases and there are several ways to battle against these natural tendencies. One good way is to periodically get an outside opinion. This can be done by hiring a consultant (like me), having one of your peers in to look things over, periodically having focus groups with customers or using well-designed customer surveys. But with any of these techniques an owner has to be willing to actually listen to what the outside world then tells them because the same cognitive bias that won’t let them see problems often won’t let them believe observations from outsiders.

Another good tool, which many business owners find uncomfortable, is to challenge employees to identify problems and the needed solutions. Many business owners are afraid that this cedes too much power to employees, but business owners who embrace this have found that it can energize everybody to work towards being a better company.

Whatever techniques you use, almost everybody has these biases and it’s important that you recognize your own tendency towards them and that you find a way to work around your own brain’s tendency to see the world as you want it rather than the way it really is.

Remember the Human Equation

MR MONOPOLYI took a lot of economics courses in college – not quite enough to get a degree, but enough to keep me interested today in keeping track of how economists view the world. One thing that economists have always been trying to do is to build economic models that predict how people act in the real world.

Recently the World Bank issued a new report in a series of what they call World Development Reports and they suggest that economists are still not accurately predicting some key human behavior in their modeling. They mention three areas where economists need to improve their models. I found these three areas interesting, because these are also types of behavior that any good salesperson knows very well. This report reminded me that it’s as important for salespeople as it for economists to keep the human equation in mind. The report said that economists need to do better in reflecting the following three things:

The first principle is that all people think automatically. Automatic thinking means that people are often intuitive and impulsive. This differs from a lot of economic models that assume that people are logical and deliberative when making buying decisions. Certainly some people and businesses make deliberate buying decisions. But the real world is full of examples of things we all do that are not logical. Perhaps one of the most common example is how we save for our retirements. I don’t think you can find anybody who doesn’t understand that saving for retirement is really important. Yet a majority of people still don’t take the steps needed to be ready for retirement.

And every good telecom salesperson knows that buying decisions are often made on impulse or based upon emotional factors and are not always fully logical. When somebody changes telecom providers they generally do so somewhat blindly and based upon trust. They really hope that the quality of the service or the level of customer service will be better with the new provider than it was with the old provider. And so they often make an emotional decision to change based upon something they don’t like about their old provider—perhaps a negative billing issue or customer service experience.

The second finding in the Development Report is that humans think socially. This means that they often make decisions based upon either pleasing others or in accordance to what other people think. By contrast, economist models generally assume that people make decisions based upon their own selfish best interest. This finding isn’t as relevant to telecom buying as the other two items, but salespeople still see it in the market. For example, it’s a lot easier selling to people with kids to make the sales pitch based upon what’s good for the kids rather than what’s good for the parents.

The third principle is that people often think using mental models. For example, people might identify themselves as part of a larger group and make decisions based upon that identity. For example, young urban millenials are now a very hard sell for traditional cable TV. Once somebody is a part of that particular culture then they often make many buying decisions based upon the peer pressure of their friends. They might not buy a car and instead use Uber and they might not buy traditional telecom services and rely completely on their cellphone and other people’s WiFi.

It is possible to break a group identify mindset, but it must be done deliberately. For example, many elderly people are of the mindset that technology is beyond them and so they are immune to any normal sales pitch you might make to them. But if you take the time to show them what technology might do for them and let them know that there is training and help for them to learn to use the Internet, then they can become good customers.

I build a lot of business plans and every client who is thinking about building a new network always wants to know what their market penetration rate is going to be. That’s an easy thing to predict if you build in an area that doesn’t have broadband, because most people in that situation will buy what you have as long as it’s affordable.

But it’s a lot harder to predict market penetration when building to a market that already has broadband. Predicting the take rates in existing markets requires understanding the human equation. Here are a few of the things that I tell people, based upon the experience of having seen hundreds of market launches:

  • If you sell residential broadband you are almost always going to get at least 20% and maybe as much as 30% of the market rather easily as long as you have a decent price and as long as your product works well. It seems that in every market there are at least that many people who just can’t stand the incumbents and who will leap to a new competitor. And if you do a good job you will generally keep these customers.
  • But after this first easy pile of customers, how many customers you get is going to depend upon how good you are at selling. And selling means understanding the market and understanding the human equation. I generally see that companies that sell based upon having a good story to tell will do better than companies that try to sell on price alone. A customer that buys from you due to a low price will also drop you when they find a better price elsewhere. But if you can instead show them that there are reasons other than price to use you, then you have a chance of building a loyal customer base.

Interestingly, almost all businesses buy based upon reliability, and not price. Business customers know how badly they suffer when their voice or Internet service is down and so they care about the reliability of your network first and foremost. So selling telecom to businesses is something that meets existing economists’ models well because most businesses will choose a telecom provider deliberately and logically. It’s easy to build models to predict business penetrations, because if you do a good job and you are willing to put knowledgeable salespeople on the street, they will be successful over time.

Your Weakness Might be Your People

Staff-buttonToday I’m going to talk about something that most company owners or general managers don’t want to be reminded about. I’ve read a number of things lately that remind me that often the employees at a company, while your biggest resource, can also sometimes be your biggest weakness.

What do I mean by that? For one thing, I’ve read several industry security reports lately that all say that company employees are the largest single reason that networks are getting compromised. Many companies now have pretty good firewalls and so hackers are no longer trying to break directly into company networks. Instead they are using techniques that get your employees to let them inside.

One of the primary new hacker tools is spoofed email. They will get valid email addresses for somebody inside the company, and then create fake and infected emails from that person to others in the company. Their hope is that somebody inside the company will open and download a file containing a virus from an infected spoofed email. Generally, once they see the structure of your email addresses it’s not that hard to figure out other email addresses inside the company.

The other way that hackers get in is with the older techniques of having somebody inside a network go to a web site that’s infected. I just reported in a recent blog that Menlo Security tested the top million websites (by traffic volume) and found that 6% of them contained malware of some sort. Much of this malware is just tracking spyware that isn’t too harmful, but some of it can be the deadliest malware on the web.

Cisco said last year that malware from web advertising is possibly the biggest new security threat. And malware is no longer just on suspicious web sites but can be found on very mainstream websites. This is due to the very odd system we have for getting advertising to websites. I discussed this in a blog earlier this year, and such malware is just as likely to come from a major news site as it is from someplace more suspicious.

The main defense against these kinds of problems is to continuously talk about these issues so that your employees are aware of them. The interesting thing is that employees are far likelier to open or download a file from an infected email at work than they are at home. For some reason employees are not as cautious with suspicious emails at work as they are on their home computers. If something is spoofed to look like it came from somebody inside the company they are likely to open it.

The other issue that brought this to mind recently is that I have several clients who have been the victims of embezzlement by employees. Of course, this is a crime that has been around forever and almost every time this happens people are shocked that it could happen to them. My first college degree is in accounting and I had several courses that dealt with these issues since it’s something that auditors are supposed to look for and uncover.

Accountants understand that there are two primary kinds of embezzlement. There is the loner who finds a way to write checks to themselves or to a bogus vendor they have created. This kind of embezzlement is almost always due to lax financial controls. If every check that is written must be approved by somebody who is going to make sure that a payment is legitimate, then it’s very hard for somebody to pull this off. Generally companies get into this kind of trouble when they have somebody with the sole authority to write checks or where people can somehow bypass the controls. Sadly, the temptation to steal is just too much for some people.

The other kind of embezzlement is a lot harder to catch and comes when a number of employees collude together to commit fraud. In that situation they are often able to bypass even the best internal controls. For instance, one employee can ask for a payment to a bogus vendor while another  employee cohort can vouch that it’s legitimate. I remember a huge case of this when I worked at Southwestern Bell many years ago where a large group of employees at the company colluded to buy huge amounts of telecom cable and electronics and have it delivered to a fake company warehouse.

It’s a shame that we live in a world where you have to worry about these sorts of things, but it happens to a lot of companies sometime during their corporate life. Almost invariably the person who is stealing from the company seems like the least likely candidate and surprises everybody.

I didn’t write this blog to cause you to be suspicious of your employees or staff. But it never hurts once in a while to think about these things because, sadly, one of your biggest weaknesses really can be your employees. And that can really hurt.

The Power of Why

whyI had a conversation with a friend the other day that reminded me of some advice that I have given for a long time. My friend is developing a new kind of software and his coders and programmers are constantly telling him that they can’t solve a particular coding issue. He drives them crazy because any time they tell him they can’t do something, he expects them to be able to tell him why it won’t work. They generally can’t immediately answer this question and so they have to go back and figure out why it can’t be done.

I laughed when he told me this, because it’s something I have been telling company owners to do for years and I might even have been the one to tell him to do this many years ago. When somebody tells you that something can’t be done, you need to make them tell you why. Over the years I have found asking that simple question to be one of the more powerful management tools you can use.

So what is the value in knowing why something doesn’t work? I’ve always found a number of reasons for using this tool:

  • It helps to turn your staff into critical thinkers, because if they know that they are always going to have to explain why something you want won’t work, then they will learn to ask themselves that question before they come and tell you no.
  • And that is important because often, when examining the issue closer, they will find out that perhaps the answer really isn’t no and that there might be another solution they haven’t tried. So making somebody prove that something won’t work often leads to a path to make it work after all.
  • But even if it turns out that the answer is no, then looking closely at why a given solution to a problem wouldn’t work will often let you find another solution, or even a partial solution to your problem. I find that thinking a problem the whole way through is a useful exercise even when it doesn’t produce a solution.
  • This makes better employees, because it forces them to better understand whatever they are working on.

Let me give a simple example of how this might work. Let’s say you ask one of your technicians to set up some kind of special routing for a customer and they come back and tell you that it can’t be done. That first response, that it won’t work, doesn’t give you any usable feedback. If you take it at face value then you are going to have to tell your customer they can’t have what they are asking for. But when you send that technician back to find out why it won’t work, there are a wide range of possible answers that might come back. It may turn out upon pressing them that the technician just doesn’t know how to make it work – which means that they need to seek help from another resource. They might tell you that the technical manual for the router you are using says it won’t work, which is not an acceptable answer unless technical support at the router company can tell you why. They may tell you that you don’t own all of the software or hardware tools needed to make it work – and now you can decide if obtaining those tools makes sense for the application you have in mind. You get the point: understanding why something doesn’t work often will lead you to one or more solutions.

My whole consulting practice revolves around finding ways to make things work. My firm gets questions every day about things clients can’t figure out on their own. We never automatically say that something can’t be done, and for the vast majority of the hard questions we are asked we find a solution. The solution we find may not always be what they want to hear, because the solution might be too expensive or for some other reason won’t fit their needs, but they usually happy to learn all of the facts.

Give this a try. It’s really easy to ask why something won’t work. But the first few times you do this you are going to get a lot of blank stares from your staff if they have not been asked this question many times before. But if this becomes one of the tools in your management toolbox, then I predict you are going to find out that a lot of the unsolvable problems your staff has identified are solvable after all. That’s what I’ve always found. Just don’t do this so well that nobody ever calls us with the hard questions!

How’s Your Strategic Plan?

parker_chess_set_burnt_boxwood_wood_burnt_boxwood_pieces_1000I help companies develop strategic plans., and one thing that I often find is that people think that strategic planning is the process of developing goals for their company. The first thing I have to point out to them is that having goals is great and you need them, but goals are not a strategic plan.

Having goals are an essential first step for looking into the future because they define your ultimate vision of where you want your company to go. Goals can be almost anything from increased profits, better sales, improved customer service, eliminating a network shortcoming, etc. But if you are going to try to reasonably achieve your goals you need to turn them into both a strategic plan and a tactical plan.

A strategic plan is basically a way to rate and rank your goals and turn them into an action plan. Not everybody goes about this in the same way, but a normal first step is to assess the resources you have available to achieve each of your goals. Almost every company has two primary resources that are limiting factors – cash and manpower. So it’s vital that you somehow determine how much of your scarce resources are needed to achieve each goal on your list.

This is harder than it sounds. Let’s say you have listed five goals. For each of them you want to do the following:

  • The first step is to rank your goals by importance. For example, you may have a few goals that are of top importance (like fixing a problem that is causing network outages or improving margins) while you will have other goals that are less important – at least for now. Theses perhaps the hardest part of the process because it is going to make you choose among your many goals and decide which ones are of the most importance to the business.
  • Once you have a prioritized list of goals, then the next step is to come up with a list of specific tasks necessary to achieve each goal. Be realistic and explicit in this determination. For instance, if you want to increase sales to businesses, then figure out what you think it takes to make it happen. Is that going to require more cash in the form of hiring additional sales staff or paying higher commissions? Will it take more human resources – are there key people in your organization that need to spend time to make the goal happen?
  • There is often more than one reasonable path to achieve a goal and so you also must explore the most likely alternatives paths to help determine which one that is right for you. This exploration is critical at this stage, because if you only consider one solution you will have locked yourself into a rigidly-defined path without flexibility. So spend some time brainstorming about the best ways to achieve each goal and don’t be afraid to consider multiple solutions.
  • Once you have assessed the reasonable ways to achieve each goal, you are then ready to start getting strategic. Very few organizations have enough resources to pursue all of their goals at the same time, and so you need to determine which of the possible solutions to various goals you are going to pursue. This is where you have to get realistic about what can be accomplished within the time frame of your strategic plan. For example, if you have a fixed cash budget for the following year, you obviously can’t pursue plans that cost more than you can afford. And the same with people. If achieving your goals is going to draw too much time from key people, you need to get realistic about how much can be accomplished by the resources you have. This step requires making a realistic ‘budget’ for achieving your goals in terms of your cash and key manpower limitations. I have seen strategic plans that assumed that a few key staffers would spend all of their time on the new projects, and in doing so would ignore their current workload – and such a plan is going to fail due to lack of people resources.
  • The way I like to do this process is much the same way that many people do a family budget. You start with the amount of resources available to ‘spend’, be that cash or key staff time, and then work backwards through the goals, considering the most important ones first, to see which you can afford to pursue. This can become hard because you will often end up end having to scrap some goals that are not ‘affordable’ and so this process often means making tough choices.
  • You want to make sure that the final strategy you choose will choose goals that you can achieve in a reasonable amount of time. I’ve found that you are almost always better off by putting all of your effort into completing a few goals versus only making partial progress towards achieving many goals. You want your organization to have wins and to see progress and the best way to do this is to get the top goals on your list behind you before you tackle your next strategic plan.

The final strategic plan will end up as a list of the goals that you think you can achieve during the strategic planning time frame (should only be a few years at most). From there you are then ready to develop a tactical plan. This means establishing a very specific set of assignments, timelines, and budgets to make sure that the goals you’ve chosen can be implemented. It’s no good creating a strategic plan if you don’t take this extra step to make sure that that plan gets implemented. There are very specific ways to make sure that a tactical plan stays on schedule and on budget – but that is the topic of another blog.

If the above process sounds too challenging to tackle, then don’t hesitate to bring in outside help to facilitate the process. Often, after going through the strategic planning process a few times, businesses eventually don’t need outside help. But learning how to be strategic is like learning anything else; you will find techniques that work for your company, and once you learn the discipline of thinking strategically, you will start to see your goals come to fruition – an outcome that every company wants.

Are You Ready for Do-It-For-Me?

General-Ledger-TemplateThe majority of my clients are small businesses, and as such they spend an inordinate amount on software. They have software that they use for billing, accounting, payroll, benefits, taxes, sales, inventory/continuing property records, and scheduling. It’s expensive to buy the various software packages they need and the software is all complicated to learn and operate. And the software is generally not flexible and is hard to customize to provide what the company would like it to do. As small businesses they have to fit the software versus the software fitting them.

There is a new trend in software that might make it easier on small businesses. We are now seeing Do-It-For-Me (DIFM) services that combine cloud software platforms with specialized external labor to perform functions that many companies find costly and time-consuming

This idea of DIFM is gaining huge traction in the consumer world. We see millennials not buying cars and instead using Uber to get from place to place (cheaper than car ownership). There are now a ton of DIFM services on the web and you can hire somebody to temporarily help you with anything from weeding your garden to mailing packages for you. Now this concept is starting to spread to the business world.

The last revolution in software was the concept of buying only as much software as you need, or software-as-a-service (SaaS). There are now tons of software packages for businesses that you can pay for by the user and which don’t force you to make a huge upfront investment. But most of these software packages are still hard to learn and they don’t integrate into other software used by a business. So each SaaS program you buy is its own little silo separate from the rest of your business and which has the added drawback of normally having a steep learning curve. SaaS software can save a lot of money for a firm compared to buying a huge expensive package, but it doesn’t necessarily make life easier for employees or the business.

But Do-It-For-Me software aims to do just that – take the burden off your staff and let outside specialists take care of mundane tasks so your staff can focus on the important stuff. This idea has been around on a limited basis for years. For instance, there are huge, successful companies that handle payroll and all of the tax forms and employee deductions that companies hate keeping track of. In the telco world a lot of companies for years have sent their billing out to a service bureau who provides turnkey billing of customers.

There are now DIFM services for all sorts of software that offer to perform functions that most businesses hate doing. What these software platforms ask of a business is to supply them with the raw data they need, and then they do everything else. These new companies are staffed to be super customer-friendly making them easy to use.

There are a number of new start-ups in the DIFM arena and I expect many more as these companies find success. Some of the more interesting ones include:

  • Buzz360 This firm has automated the marketing process for smaller companies. They can manage your web site, your social media interfaces, and other interfaces with customers. They offer a variety of tools for communicating with customers and potential customers.
  • Bench offers a DIFM accounting service that eliminates the need for an in-house bookkeeper.
  • UpCounsel offers a way to use small-business attorneys on an as-needed basis.
  • Zenefits is interesting in that they give free Human Resources software to manage employee benefits and make their money from commissions on insurance.

Every firm has some functions that they hate to do. Such tasks either take valuable time away from other more important functions, or since they are hated they don’t get proper attention. You should definitely look around for alternatives, because there is probably somebody out there willing to take these kinds of tasks off your plate.