Wednesday, January 14, 2009

All companies want to increase their growth and productivity. After all, growth and productivity equal profit, and profit is the reason we are in business. However, a question common to all organizational leaders is: How best to achieve the goal of increased growth and productivity in the most efficient manner?

In order to compete, succeed and prosper, large organizations need to look at the entrepreneurial model of small companies for guidance and direction. Why? Because the entrepreneurial model is based on small business units in which everyone is a contributing participant and everyone thinks like an owner. When large organizations embrace this concept and break into smaller groups, they increase their ability to mobilize quickly, slash response time, cut through layers of bureaucracy, and ultimately drive down costs. Small, organized work units allow for greater risk-taking and promote creativity, allowing everyone to actively participate in the risk and reward dynamic.

The most effective business leader is one who takes personal responsibility for managing change. At the entrepreneurial level, everyone in the organization thinks like an owner, and so everyone takes on the same level of responsibility. The entire workforce is therefore prepared to take advantage of opportunities and provide solutions.

This sense of responsibility can be the core principle of every employee in every organization. Since the market presents new challenges every day, the creative mindset of the entrepreneur can help you most effectively deal with these challenges.

You can start thinking and acting like an entrepreneur today by applying these Better Changes to your business operations:

Better Change: Create Customer Insistence

Remember when air travel was comfortable and luxurious, even for those riding in coach? The flight crew was cheerful and attentive, the cabin was clean and the seats - even in coach - were padded and comfortable. It was expensive, but from the time you boarded until you entered the terminal at your destination, the experience felt special.

Now, the airlines cut every corner they can, the cabins are more often than not dirty, and coach seats feel like church pews, except you get more legroom in church. What happened? The complicated answer involves 9/11, fuel costs, labor unions and price competition. The simple answer is that the airlines began to concentrate on cost cutting and squeezing every penny they could from their passengers, forgetting who they were in business for.

Southwest Airlines has been successful while the majors floundered. Southwest is a low-priced, single class airline, but for all the lack of "extras" they have prospered and grown, and their passengers rarely complain. Their success rests in their single-minded focus on the giving their customers what they want - affordable air travel in clean airplanes with friendly cabin attendants.

It's remarkable that the major airlines still find it near impossible to do this, but Southwest does and the result is that more and more people have made Southwest their first and often only choice for air travel. Southwest, in short, created customer insistence, and so long as they maintain that, they will continue to prosper.

Better Change: Provide Clear Direction

Without clear direction, few organizations can survive in a changing marketplace. General Motors had to kill the Oldsmobile brand because it had no clear identify and no clear market. In short, it had no direction and as a result, the brand steadily lost market share until nothing could save it.

The same symptoms plagued Cadillac and Pontiac, but GM saw the light and has made significant progress in identifying the direction it wants these divisions to go. Cadillac has gone from the maker of lumbering, indistinct but expensive cars to cutting-edge luxury, both in design and technology. Pontiac was not quite Chevy and not quite Buick as it attempted to be all things to all people. It now has re-focused on its tradition of power and performance with style.

Both brands are now thriving, and the difference is they now have a clear direction.

Better Change: Stay Connected

You have to stay connected to the changes in your industry and markets in order to know how best to serve your customers. You need to see the whole picture so that you can develop a comprehensive strategy.

To stay connected, you must continually communicate not just with others within your organization, but also with those outside your company, such as business partners, suppliers and, of course, customers. Highly connected leaders increase their ability to see the whole picture, can avoid unpleasant surprises and are able take advantage of new opportunities discovered through the contacts they make.

Better Change: Remove Barriers

I have had a Diners Club card since 1975, and I've used it extensively over the years. In fact, in my book, Doctor Travel's Cure for The Common Trip, I said that Diners Club was the best card to carry in your wallet. That is no longer the case.

Recently, my Diners Club card became a MasterCard with a Diners Club logo on it. With the change came the promise that it would still be a Diners Club card, but it would have the convenience and wide acceptance of MasterCard. Now, however, any charge over $10,000 is automatically rejected. The vendor has to call and get approval. For many years, my credit line was $250,000. When they switched to MasterCard it dropped to $25,000.

These changes came without a letter or any other warning. The policies just changed, and I learned about them when I ran into the new barriers. American Express, on the other hand, has long been difficult to deal with, but they have listened to both their card members and their vendors. Relationships with both have improved considerably, with Amex making it easier for vendors to take the card and offering more and better services to card members. They have removed barriers where Diners Club has been creating them. Guess which card I now "don't leave home without"?