Author Archives: Tom Foster

About Tom Foster

Tom Foster spends most of his time talking with managers and business owners. The conversations are about business lives and personal lives, goals, objectives and measuring performance. In short, transforming groups of people into teams working together. Sometimes we make great strides understanding this management stuff, other times it’s measured in very short inches. But in all of this conversation, there are things that we learn. This blog is that part of the conversation I can share. Often, the names are changed to protect the guilty, but this is real life inside of real companies.

Take Your Company to the Next Level – Market Platform

Strategic platforms help us understand our business model and where we compete for customers, what our customers expect from us and how we go to market.

  • S-V – Industry platform, where our enterprise competes using industry standard practices.
  • S-IV – Market platform, where our multiple systems integrate with market systems.
  • S-III – Single serial system platform, where we see the introduction of warranties as a competitive edge.
  • S-II – Process implementation platform (of someone else’s system, like a franchisee).
  • S-I – Product or service platform, where it’s all about the product.

As the organization grows from product to process to system, it ultimately ends up with multiple systems. The hallmark of an S-IV company is its ability to integrate those systems and subsystems. Internally, that integration inspects how work travels from one function to the next with a close eye on the capacity of each system and how that capacity impacts the capacity of its neighboring systems.

Until the organization emerges as S-IV, there is one system in its strategy often overlooked. That system is NOT internal, it is external. It operates like any other system, but it sits outside the company and it’s called your Market.

When the organization matures into S-IV, it finally has the capability to look outside. Prior to that, all energy is directed inside, on the product, process and internal systems. At S-IV, the company blossoms to look outside. That outside look is market responsive.

A market responsive strategy looks at the internal product or service offering through the lens of the customer, through the lens of the market. Adjustments are made in the product, not because of technical expertise, but because the market demands it. Car manufacturers took out ashtrays and installed cupholders. Why? Because the market demanded it. The market is mindful of gas mileage, but, at the end of the day, it demands cupholders.

System Platform

Business platforms help us understand the condition of our business model, its requirements, characteristics, competitive edge.

  • S-V – Industry platform, where our enterprise competes using industry standard practices.
  • S-IV – Market platform, where our multiple systems integrate with market systems.
  • S-III – Single serial system platform, where we see the introduction of warranties as a competitive edge.
  • S-II – Process implementation platform (of someone else’s system, like a franchisee).
  • S-I – Product or service platform, where it’s all about the product.

Bob’s Burger was all about the product. Assuming Bob’s Burger is the best burger around, how do you beat Bob? You get more trucks, geographic expansion. And, geographic expansion (more trucks) comes with its own set of problems. The quality of the burger begins to suffer. Raw ingredients scream for a supply chain where there is none, several trucks run out of lettuce. One truck runs its griddle too hot, the burger tastes like shoe leather. Customers expecting Bob’s Truckburger to be as good as the original Bob’s Burger are disappointed. Worse, Bob is in no-man’s (no-person’s) land. Expansion costs money. The unit cost for more trucks and more people are driving up overhead. A little bit of success can create a whole lot of overhead. Bob is everywhere with his new trucks, and, he is struggling. Bob has plenty of revenue coming in, and, profitability is elusive.

How do you beat Bob’s Truckburgers? Move to the next level, the system level. Bob had trucks, but no system. Bob could have purchased a system from McDonalds, Burger King, Wendy’s. If Bob had, he would never run out of lettuce, because the supply chain would be a system with ordering min/max’s. The griddle in each truck would always be the same temperature, calibrated on a monthly basis. Every burger would always taste the same. This is scaling. Scaling requires a system. Scaling without a system is a disaster.

Outside the burger world, you will notice a business model with a system frequently offers a warranty, a promise. A warranty promise without a system is a disaster. A warranty promise with a system yields predictable results. And, for the first time, profitability emerges. If you want to improve your profit, improve your system.

Process Platform

The roles and levels of work that you need in your company depend on your business model sitting on your business platform.

  • S-V – Industry platform, where our enterprise competes using industry standard practices.
  • S-IV – Market platform, where our multiple systems integrate with market systems.
  • S-III – Single serial system platform, where we see the introduction of warranties as a competitive edge.
  • S-II – Process implementation platform (of someone else’s system, like a franchisee).
  • S-I – Product or service platform, where it’s all about the product.

Yesterday, we looked at a product or service platform. When it’s all about the product, how many roles and how many people do you need? For Bob’s Burgers, all you need is Bob. Can you make money on this platform? Yes. Just not very much. The product or service platform will always struggle with revenue.

In fact, as a competitor, how can you beat Bob? Assuming Bob has the best burger going, how do you beat Bob? You get more trucks than Bob. Actually, Bob read my column before today, he is already going there. In this video, Bob moves from a product platform to a process platform. It is no longer about the burger, now, it’s all about the number of trucks. More trucks, more revenue. But, the video also shows more trucks, more overheard. Where the product platform struggles with revenue, the process platform struggles with profitability.
Bob’s Trucks

Everyone always says, “I want to take my company to the next level.”

Most have no clue. Business platforms help you understand your business model, where it succeeds, its problems and what the next level looks like. (Yes, I have a 3-hour in-person program on business platforms.)

Next, the system platform.

Product Platform

From the Ask Tom mailbag –

Question:
You always talk about the five levels of management –

  • S-V – Business Unit President
  • S-IV – Integrator role
  • S-III – Single system manager
  • S-II – Coordinator, supervisor
  • S-I – Technician, production role

But my company is not that big. Do I have to have all these roles?

Response:
It depends. Depends on the size and complexity of your company. The five levels of management correspond to five different business platforms, any of which are perfectly acceptable as a business model. You can make money at any of these.

  • S-V – Industry platform, where our enterprise competes using industry standard practices.
  • S-IV – Market platform, where our multiple systems integrate with market systems.
  • S-III – Single serial system platform, where we see the introduction of warranties as a competitive edge.
  • S-II – Process implementation platform (of someone else’s system, like a franchisee).
  • S-I – Product or service, where it’s all about the product.

And any of these platforms are valid. Today, let’s start with S-I, product or service platform, where it’s all about the product. How many roles do you need?
Bob’s Burgers

Decide What is Necessary

“The forecast was a bit optimistic,” Miguel observed. “We went back and looked at our sales activity. Not our sales results, because those were dismal. I gotta tell you, my guys were pounding the shoe leather. It’s funny. The same salespeople with the same customers, but not closing sales like they did this month last year.”

“Working harder isn’t working anymore?” I asked.

“No, I think my guys are going to have to work differently, not harder,” Miguel replied.

“And who will decide what they do differently?”

“What do you mean?”

“Whose job is it, to decide what is necessary? How to go to market? To make the efforts of your salespeople more productive?”

Miguel’s face slowly revealed a mild panic. He stared straight ahead. “It’s me.”

“It’s time,” I nodded. “It is the job of the manager to take the resources of the company and make them productive. It is only managers who make those resources productive. As a manager in this company, you are the only one who can make your sales team productive. The job of management is more important than ever. The decisions you make in the next twelve months will determine whether your company will survive.”

And, We’re Back

Some of you may have noticed a service interruption for Management Blog last month. There was a problem between our RSS feed (syndication) and our SSL (socket security) configuration. Fixed now. Well, if you are reading this, as an email, it’s fixed. We published throughout the duration, so if you missed some posts, they are all available at managementblog.org all the way back to Nov 2004.

From the Ask Tom mailbag –

Question:
I want to grow my company, but a bit overwhelmed at what I need to focus on. I see so much opportunity in nearby markets within a six hour drive. I think I can go into those markets without a huge initial investment, and organically grow as the business matures. Of the thousand things I need to pay attention to, what’s the focus?

Response:
I am often asked, what are the biggest constraints to growth. There are lots of them, geography, capital, market characteristics, economic cycles. The biggest, I think, is people.

We can purchase lots of things, equipment, office space, advertising. But, you can’t purchase talent. You have to find it. You have to seek it out.

We often only hire people when we have an opening, when we need to always be recruiting. You can have the brightest office space, brilliant marketing, pristine equipment, but with the wrong (not-right) people, you will still fail. Yet, with the right people, you can still be successful with Class B office space, used but serviceable equipment in a struggling economy. The biggest constraint to growth, even in otherwise challenging times, is people.

Identify Management Potential

Succession is not just when the CEO decides to retire to Florida. Succession happens all the time, all over the organization. Technicians become team leaders, team leaders become supervisors, supervisors become managers and managers become executive managers.

And, we are all getting older. How old will you be in five years? It’s a simple math problem, but the answer can be surprising.

We look for those team members who have matured and are ready to step up. Or do we? Most times, we wait until there is an open position and we scramble.

Often, we put together a leadership program to teach identified management skills. Should it be a matter of teaching management skills, or rather, putting people in position to identify their management potential.

I did not say give them a promotion, a raise or the corner office, because if you did that, and they failed, you would have a chocolate mess on your hands. You test people with project work.

The First Step is Not a Step

How to start? What to do before you start?

The first step is a mental state. How you get there is up to you. Before you start, your mind is wandering, aimlessly, subject to the whims of where you are, the circumstances in which you find yourself. The first step is to break the pattern, break the pattern of your mental state.

Some do it with meditation. Some do it with a mental exercise. Some do it with a physical sensation, as simple as rubbing two fingers together. Basic Assumption Mental State is a phrase coined by Wilfred Bion, made understandable by Pat Murray (BAMS).

It’s just a shift
How do you shift the mental state of a group? Focus each member on a common question. It could be as simple as a common experience, an understanding of purpose (Why are we here?), thoughts about mission (When we are finished, what does life look like?) or even just some Good News (tell us something positive that happened in the last two weeks).

Create a positive mental state. Now, you are ready to proceed to the first (next) step.

What is Your Intention?

It’s January, annual reflection time. What are your intentions for the year?

More important than the ideas of your intentions, how will you make them more effective as guideposts, milestones, motivation and internal encouragement?

What is the form of your intentions? Like New Year’s resolutions that are forgotten, intentions can easily fade.

  • Define your intentions in written form.
  • Read your intentions out loud, in private.
  • Say your intentions out loud, in front of a group of people.
  • Give that group permission to hold you accountable.
  • Post your intention somewhere public, where you see it every day, where others see it every day.

You can start with a 3×5 card taped to your mirror.