In this Issue

🐺    Are Your Customers Prey?
⚖️    Dissatisfied to Change
✂️    Cut the Busywork

🐺  Are Your Customers Prey?

The biggest blind spot isn’t the wolf at your door. It’s the customer relationships you take for granted.

Stable, long-term customers are the easiest to take for granted. Their stability lets you focus on more pressing issues, until you hear, “It’s not you. It’s me.”

You may not have changed, and that’s the problem. What made you a good partner worked until it didn’t. Worse, you probably saw it coming.

Long-term customers don’t leave on a whim. There are signs:

• Some complain. You hear their gripes about customer service, missing features, or price increases.
• Some go silent. They’re eerily quiet and non-responsive, creating the illusion of a profitable, low-stress customer.

These irritants are the “Burning Needs” your competitors are targeting. You’re doing the same thing. You are working to win your competitors’ customers, and they are trying to win yours.

It’s a dog-eat-dog market, and taken-for-granted customers can be easy prey.

Before you go hunting for new business, make sure your house is secure and your existing customers are satisfied. Don’t let the wolf meet your customers.

⚖️  Dissatisfied to Change

Lenin said, “There are decades where nothing happens, and there are weeks where decades happen.” The pandemic was one of those moments when decades happened.

That’s the power of a crisis. When your back is up against the wall, you can change.

My question post-pandemic: How do we harness the energy to change without a crisis? The answer is dissatisfaction.

Change happens when Dissatisfaction times Vision and Plan outweigh the Cost of changing:

△ = D x V x P > C

On a scale of 1 to 10, rate each:

• Vision. 10 is a well-defined vision, and 1 is no vision at all.
• Plan. 10 is a clear, costed plan. 1 is no plan at all.
• Dissatisfaction. 10 is we have no choice but to change. 1 is what we’re doing is working, and we shouldn’t change. A stable, successful business usually scores low, 1 to 4.
• Cost. 10 is expensive, both in time and resources. 1 is cheap and easy.

Here is how a stable, profitable business might score its growth strategy:

• Vision: 8 / 10
• Plan: 9 / 10
• Dissatisfaction: 2 / 10
• Cost: 6 / 10

(8 x 9 x 2) / 1,000 = 14.4% Change Potential
6 / 10 = 60% Cost of Change

14.4% is less than 60%. In this example, the strategy is at risk. The company has a great plan and vision, but not enough dissatisfaction to change. They are comfortable until they face a predator.

Measure your growth strategy. Is your business dissatisfied enough to change?

📊  One Stat to Watch

52%

of US adults have canceled a streaming service subscription because of price increases. Make sure your decisions aren’t inadvertently pushing customers away.

✂️  Cut the Busywork

45% to 50% of an organization’s systems and processes are busywork. In a slow economy, cutting the busywork is a competitive advantage. 

The economy may not be in a recession, but we are seeing markets with slow to no growth and rapidly rising costs.

I described this as Asymmetric Inflation in last week’s newsletter. It’s like playing whack-a-mole. Companies are going from one inflationary shock to another.

To stay ahead of these shocks, apply a CFO’s lens to your systems and activities:

• What activities deliver the most profit?
• What activities deliver no return, but are necessary for the high-value activities to be performed?
• What activities are costing you money? This is busywork.

In an established organization, busywork compounds over time. Systems and habits become invisible as they are institutionalized. “This is how we do things.”

This is a good summer-end project. Task your managers to audit their workflows and systems. Ask each to find one system to optimize or cut.

Small changes will make your business more profitable and resilient.

🤔  Thoughts on Today’s Issue?

We’d love to hear your feedback. Message with any thoughts, comments, or ideas for future issues.