2Up – The Power Of Thinking Like the Boss’ Boss

When you are considering how to position a business idea, who do you imagine is the audience? The normal reaction is your boss. This is both right and wrong. Confusing I know, but let me explain why.

Consider what your boss will do after you pitch your idea. Most likely, he or she will have to consider the impact to their areas of responsibility and then the impact to the broader organization. If the idea could be visible to others or possibly impact something outside of their jurisdiction, they will need to let someone know. Guess who that someone is? Their boss. This should not dissuade you from pitching ideas. To make any change you must have ideas that cause people to think. What it should do is just be a consideration you know going into any meeting. Always think about the 2Up – i.e. the pitch you give to your boss (1Up from you) to give to their boss (2Up from you).

Example of a 1Up pitch to your boss – I want to get $1ooK to change our packaging for product line A. It is a small change and reduce our costs by $0.4o per box. I have already looked at the changes and know there is bandwidth on the design team to make this happen in the next quarter. I would just need to meet with a couple of people on distribution to make sure everything is ok first.

Example of a 2Up pitch to your boss’ boss – By investing $1ooK into a packaging redesign on product line A, we envision a 4% reduction in packaging cost resulting in a $150K savings per year. In addition, we envision other product lines being able to benefit from similar changes producing similar cost savings per year. A conservative estimate for all product lines could put us in range of saving approximately $5ooK per year. Prior to making those changes we would want to ensure product line A revisions are smooth, quality is maintained, and cost reduction is actually realized.

There is a significant difference. The 1Up is very focused on tasks, people, and limited scope. In all actuality, is sounds complicated and doesn’t look like a lot of return to the company. The 2Up is all numbers and the vision of what could be. Focused on what you need to put in, what you think you can get out, and how much more you think you can push it.

Now consider you go to your boss and make the 2Up pitch. What you are looking for is challenging on your assumptions and numbers. Get a dialogue going about the bigger picture and not the smaller details. Instead of it sounding like a lot of work, it sounds like a lot of opportunity and is usually followed by “how soon can we start”.

What Can Improve Margin?

We have all heard the mantra ” do more with less” and we get it. Scaling, leverage, efficiency… put whatever term you want on it, all of these terms denote the need to increase your margin. There are all different definitions of margin, so let’s start out this discussion with a quick outline of how I am defining margin. Simply put, margin is the difference between what you put in and what you get out.

What are the options with margin? Overall, your goal is to increase the spread between input and output, so you have essentially two angles to play:

1) Decrease what you put in – focus on value
Most individuals consider this part of the equation easy. Just look at your inputs (people, money, time) and try find something similar that is cheaper, right? This is where you find outsourcing (people), discount vendors/parts (money), or process improvements (time). All of these strategies could work, however most are not as effective as people anticipate. Why? The trick with decreasing what you put into something is you must stay focused on value.

Focusing on value makes your considerations of changing input(s) much different.

• Does your change just include cheaper products? If so, do your cheaper products still hold up and provide the quality experience you are used to getting?
• Does your new process just make it easier to cut corners? If so, what is now being missed that will catch up with you later?
• Do your new people just have less experience? Less experience is not always bad. However, if you find they are spending more time to figure out how to do something right vs knowing how to, then what are you really saving?

If you fail to consider what impacts value, then making the changes to decrease cost of input is only going to decrease what you get out. Thus, not increasing your spread between the two (i.e. margin).

2) Increase what you get out – focus on leverage
When looking at the output, the first thing to consider is what are you getting out of everything now? Often, we think we have done a great job by getting something complete and moving on to the next project, but we do not realize the additional potential of leverage.

To determine how to get the most out of leverage, you have to experiment. Here are a couple areas to consider when looking for leverage points:

• New channels – Keeping everything else the same, is there  a new distribution method for your product or service?
• New uses – Who else could use your product or service that isn’t on your original target market?
• New packages – Could you offer your product or service in a new way to serve another group? Could you combine it with another product or service to create a completely different offer?
• Follow Up – This is the most under utilized area of any program. Have you considered what would happen if you just followed up with customers once or twice after a product or service is completed? It has to be a genuine interest on your part, but trust me, it goes a long way to have a proactive touch point from a company.

Now that you have considered what is already available, you should also consider what you should do that is different. This is where you need to step back and look at all of your input (people, money, time) to determine what else could be done. Here are areas of focus for using leverage to think differently:

• Completely new products or services – How you could harness all of the input for something completely different. This is tough to pull off, but building a business case is the best route to sell the concept.
• Change your mix – How much of your revenue comes from product? How much comes from service? If you are 100% product or 100% service, there is opportunity to change that. Consider how to move the mix of product and service to still complement each other for existing customers but also drive new opportunities for market growth.
• Find new partners – Are you completely working alone or have you enlisted the help of a partner network. Often there are companies that are experts in a niche that is a great complement to yours. If you have not considered who else is out there that plays in the same space, look around. You could put their marketing and sales resources to work for your (for the right price).

Value + Leverage = Increased Margin

By thinking about your input and output in terms of value and leverage, you should be able to change things to create more opportunities. If you are looking to make big changes, plan on a couple offsite days with a cross functional group to evaluate. If you are looking to make smaller incremental changes, then you can probably get good traction by taking an hour or two a day for a week or so.

The Value In Finding Problems and Running Toward The Mess

When is the last time you started the day with a statement like “I can’t wait to run into a problem today” or “Where is the best place to find a mess”? Sounds like things you should actually try to avoid on a daily basis, right? If you want to just do your job and get done with it, then yes, try to avoid these situations. However, if you want to make an impact, then you should actually work to find problems and run toward the mess.

Why should I look for problems or a mess?
Problems represent obstacles and a mess is an irritant to most people. A colleague of mine pointed out one day that we shouldn’t think of these as something to avoid, instead, they should be something we go toward. When approached correctly, these represent opportunities for new solutions. New solutions represent new products, services, jobs, or even companies. It depends on what you can do once you find a problem as to the potential upside.

What should I do when I find a problem or a mess?
1. Figure out the type it is:

• Efficiency problem – process oriented issue where quantity is generally impacted
• Effectiveness problem – value oriented issue where quality is generally impacted

2. Determine who it impacts:

• People that could gain from change – work to get them involved
• People that could lose from change – work to let them know what is coming and why it is important
• People that could help you in making the change – get people on your side

3. Find out what it is worth:

• Ultimately you want to know how much could it save on costs or increase in sales
• Would it require money to get you there or just time?

4. Do something about it:

• Start to socialize the concept with others. In this instance, it is better to give than receive. So when talking to others, find out how it can help them, not you.
• Make a proof of concept. Depending on your skills, get as close to a viable and functioning solution as possible. It doesn’t have to be perfect, but it does need to get the point across.

When people find out you are interested in solving problems and cleaning up messes, you become more valuable. Once your interest turns into action, your value increases yet again. And if your action has a positive impact on results, then your value becomes exponentially higher. So in order for you to increase your value, start by finding problems and running toward the mess.

Give Them Something To React To

To get something done right, the first step is actually getting something done. And trust me, doing something and doing something right are two completely different things. To get something done, you need to get someone’s attention. And what is the best way to get someone’s attention? Give them something to react to. But you have to remember, getting a reaction doesn’t signify agreement, it is simply the start to a conversation. Your goal is to start a conversation that ultimately leads toward the positive change you were hoping to achieve.

More often than we would like to admit, we have talked about what we want to do or attempted to convince others of an idea to execute with little to show for it. Think about the last time someone told you about something cool, but there was nothing to look at, what did you say? Probably something along the lines of “come back when you have something to show me.” Now consider what happens when someone puts something in front of you and says “what do you think?” There is a very different result – you actually provide input and the discussion moves forward.

What you will find on most occasions is an inability to actually make change until something is present to react to. A drawing, a prototype, a spreadsheet… anything is better than a blank stare. However, getting that first tangible item should be done with one objective in mind, to start a conversation by getting a reaction. What type of reaction you get is another story. Regardless of positive or negative feedback, my thought is any reaction is a good reaction. Why? Because you can now move forward with change knowing what you are up against and begin a dialogue that moves your efforts forward.

How to react to negative feedback:
Take the input and understand if it is due to actual function or because of impact to that person’s role. After consideration, determine if you need to change your direction or just change your presentation. You might even consider bringing this person into an advisory role to show them how much their input means to you. Then make sure to follow up with that person with your modifications and ensure you address the original critique.

How to react to positive feedback.
First of all, be very hesitant to take good news at face value. Not trying to sound pessimistic, but there are a lot of people that will do anything to a avoid conflict. Ask questions along the lines of “so you would recommend this to your friends and family?” or “if you were going to focus on one thing to improve, what would it be?” If you still get positive feedback, thank them and see of you can get a name of someone you don’t know from their network. Don’t push it too hard, but just know there should always be constructive feedback so continue to find people willing to give it to you.

Regardless of feedback, attempt to not take it personally. I can admit on more than one occasion I have reacted from an emotional standpoint instead of an objective one. That does not get you very far. Try to remember that it does not have to be your idea that solves the problem, rather your action that makes a solution happen. Taking this attitude means you are in it for the greater good, not the personal glory.

Going from getting something done to getting something done right can be quite a process. Just know that every time you strive to improve your work, you must have something tangible to show in order to get a reaction. Through iterative feedback and taking on multiple perspectives, you can make significant change in a relatively short period of time.

Attack Big Objectives

If you truly want to make an impact, think about what you want to achieve and find a simple way to describe it. Why is that important? In order to truly make an impact you need others to understand, to be involved, and to adopt. It sounds easy, but reality usually paints a different picture. Consider you are passing an investor/exec in the hallway or friend you haven’t seen in a while – how would you briefly describe what you want to do?

Here are five steps to take in order to clarify your thoughts and simplify your message:

1. What is your “thing”?

Before you try to tell someone about what you want to do, think about what you want to be known for once you accomplish your objectives. Think about this scenario: You walk by two people and one looks at the other and says “Do you know him?” The other person says, “Yes, he is the one who ….” This is your brand. So, consider how your big objectives are going to impact your personal brand. You might be surprised how much this quick step could actually influence your original intention.

2. Know the objectives of others

Ensure you have perspective. Who else will be impacted (positively or negatively) by your plans? Attempt to understand if others are interested in attaining a similar outcome. If there is an ability to channel multiple efforts so there is more than one “win”, your odds of success will increase. One major caveat here – you should be asking more questions here instead of providing answers. Socializing your idea prior to knowing how it could impact others could put your idea at risk before it is ever off the ground.

3. Estimate effort and impact of making a change

Now that you have a concept about what success might look like and who might be impacted, it is time to start socializing ideas. Do not focus on getting attention from others, instead drive to understand what a goal (measureable impact) would look like and resources (people, time, and money) needed to get there. Assume the next step from here is to get the right people to together to clearly articulate your objective, goals, and what you think it will take to get it done.

4. Tie it to numbers

One thing to remember, the bigger the objective, the higher in the organization you need to go. And the higher in the organization you need to go, the more you need to have numbers. Whether it is volume (#), revenue ($), or percentages (%), you must show a tangible result to the top or bottom line.

From experience, you have two options to get attention.

• When times are good, you should focus on driving the top line. Focus on driving more sales so you would want to see numbers such as revenue, market share, number of clients, etc.
• When times are tough, focus on impacting the bottom line. Here the focus should be on reducing costs which would highlight margins, profitability, scalability, etc.

5. Make a BIG statements

Now that you have everything in order, make your big statement. Whenever you have an audience, you need to make the most of it. To do this, make sure your statement has a core component and a variable component to tailor to the audience. Sounds confusing, but it’s not that bad.

Example:
Core Component – “Become dominant global brand…”
Variable Component (talking to Sales) – “… to drive significant market awareness resulting in more sales opportunities and increased revenue”

By taking these steps you should see a dramatic increase in both awareness of your initiatives as well as support. Be prepared for it!

What is Strategy?

If someone were to ask you “What is your strategy?”, how would you respond? Would you go to wikipedia and look it up? It seems like a simple question, but if you were in a situation where a question was expected right away (e.g. interview, planning session with executives, etc.), what exactly would you say? Try to write it down in a sentence or say it out loud and you will find out how hard it really is to clearly articulate a definition of strategic plan.

From my experience, the best explanations are simple and to the point. The more complicated you make it, the harder it will be to actually do something with it. Always think “application” when outlining a strategy. Because until you can do something with it, a strategy is just another document you want someone to read.

My definition of strategy: WHAT are we going to do and WHY we are going to do it.

Outline of Strategy:

1) What are you going to do?

• Objectives – Description of 1-3 high level initiatives that you are looking to achieve. Do not try to make over three objectives because it will dilute the impact. Example: Achieve top line revenue targets within largest growth market segments.
• Goals – This is how you are going to measure your objectives. Once again, keep this simple by outlining at the highest level #, %, $, etc. Example: $100M in revenue generated from retail, healthcare, and financial services markets.

2) Why are you going to do it?

• Underneath each objective should be a reason as to why you decided to focus in this area. This is the rationale to support your decisions. Focus on facts, not opinions. If you are presenting to an audience, you might not put this on a slide, but it should be in your talking points. Consider someone asking you “Why $100M, and not $110M?” You should have a rock solid response based on customer data, market data, sales history, etc.
• Consider if you are doing one thing, you are choosing to not do something else. Make sure you have an idea of what will not get done and how that might impact time, people, and money. Once again, not sure it should go onto a slide, but definitely noteworthy during the discussion if it will impact the organization.

Once you have identified your Strategy, you are able to put things into action by formulating a Strategic Plan. This is where you put together how you plan to accomplish with a HOW and WHEN focus.