I have spoken to in excess of 750 customers of financial services, insurance and business services advisory and brokerage firms globally over the past 12 months. Hear are the 3 most important questions your clients want to know:
Your ability to fix a human problem
Your ability to satisfy a human need
Your ability to ignite the human spirit
5% of customers report firms providing “absolute clarity/absolute conviction” to all three questions, 55% report firms providing answers that are “opaque/self-doubt” and 40% of responses that are “totally unclear/disingenuous”. If you are an executive in the last two groups (the overwhelming majority), you have a lot of work to do, fast, to change your customer’s perception of your business, your people and the perceived value.
Look at your marketing collaterals, exhibits, media comments, speeches, client and prospect conversations and ask
Internally and externally (clients, business partners, media partners), where can we improve in 1 week?
What needs to change first? (priorities, quick wins)
How will we know we are successful? (what ideally do you want to see, hear and feel)
How can we sustain that level of improvement? (better accountability, enhanced performance, changes to feedback and rewards system)
In a new series, Inside The Executive Office, James provides a series of quick fire techniques, powerful lessons and ideas set in real world examples for executives, managers, Board members and shareholders to rapidly apply in their own business.
In the first outtake from a recent executive discussion on integrating two multi-million dollar insurance businesses, James explains that the business integration process requires a process of its’ own. In a rush to integrate, whether it is a traditional takeover (the smaller business being fully integrated), a merger of equals (largely a mirage to save face for executives who won’t admit it is a takeover, in everything but name) or a financial acquisition (intent to allow the businesses to operate as two separate entities in the same ownership), way too many businesses start at the wrong point (action).
James points out that there is a necessity to consider first (in this order): business outcomes, integration alternatives, and the related risks and rewards of each BEFORE determining action. Otherwise “action” is largely driven by planning rather than strategy. An extrapolation of the present to determine the short-term future of the two combined or separate businesses rather than a picture of the desired future and the steps back to today. An excessive focus of executives’ and managers’ knowledge and time spent on “easy to implement” or “hygiene” tasks rather than performance-based priorities consistent with the deal thesis.
The effect with the former is 6 months post-acquisition a combined business that has made a swathe of largely cosmetic changes (new titles, new policies and procedures, new reporting forms) but very few profound changes (significant synergies captured, greater capital efficiency, stronger brands, increased productivity). It may operate marginally better than before the deal, at best but it is not “fit” to profitably grow and expand, at least at a pace commensurate with the competition. Indeed, it may very well be worse off, where the management distraction has resulted in missed opportunities in existing markets or the prospects for those existing markets have deteriorated at a fast pace than originally presumed.
The litmus test is “would your ideal customers and the competition honestly state that your “new” business is a more powerful/about the same/less powerful competitor in your highest potential growth markets?” The faster you can demonstrate increased power, the greater the level of value creation. Conversely, the longer it takes to get there (delays, procrastination, avoidance of disruption), the probable lower the value creation or even value dilution (management distraction in existing businesses).