Exit Strategy – More than Just a Buy-Out

In military strategy an exit strategy is used to minimize blood and treasure (lives and material). In business it’s not that much different. Having an exit strategy allows you to:

  1. get out of an unfavorable situation with a pre-crafted plan
  2. achieve an objective worth more than the cost of continuing the organization

When you start a business, determining a long-term plan should near the top of your to-do list.

The most common exit strategy is the sale of your business based on the valuation of your company. However, there are many other strategies and planning a back up strategy is not a bad idea. For examples of other exit strategies, see what Yahoo Small Business says.

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Would You Pay to Use Twitter?

Word on the street last summer was that Twitter may not be paying the bills and will soon be charging for their service. Is this still the case? If it was would you pay to use Twitter?

It’s an interesting question, but more importantly WHY would they start charging for a service that is currently offered for free? It’s all about exit strategy.

Many new companies being started by GenYs seem to be giving away their product with only one strategy in mind – sell out to the highest bidder. It’s an ideal situation, but not a very practical one. Okay so it worked for YouTube, but their business model was advertisement-based and made $15 million per month according to Wikipedia.

Entrepreneurs need to be focused on generating revenue and have clear exit strategies in mind. Yes I said “strategies” – plural.

If you know your market and know how to get them and you have a long-term exit strategies in mind – you can be successful.

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January Whiteboard Session: 2020 Strategic Vision

On January 8th from 10am to 11:30am I lead a discussion called “2020 Strategic Vision” at our monthly Whiteboard Session, hosted by Tomato Fish Marketing. Below is a list of helpful links from articles, books, etc. that we find useful in developing a 2020 Strategic Vision.

Curious what our Whiteboard Sessions are like? Take a look a the short 4 minute clip of the January Whiteboard Session below.

You can also view excerpts from previous Whiteboard Strategy Sessions on the Creo Quality YouTube channel.

Twitter is NOT a marketing strategy.

From the Nonprofit Marketing & PR page on Smaller Indiana:

Comment by Amy Stark on January 6, 2010 at 2:37pm
“If non-profits in Central #Indiana want their mission to be widely known, the most cost effective way is with a rock solid twitter strategy. Yes. I said it. Twitter strategy NOT social media strategy. No one will pay you a donation before they pay you ATTENTION, and I have yet to encounter a non-profit in Indianapolis with a comprehensive understanding of twitter’s influence and potential.

I wrote a passionate blog yesterday, at the end I wrote: “The Internet is far too fluid to predict the popularity of the next hot product or platform with any certainty. Last year’s My Space is this year’s facebook. But I’m 5 Nines Sure* I’ll read about the next hot product or platform on twitter first.”

Comment by Jon D. Speer on January 9, 2010 at 12:36am
“I’ve read some of the previous comments, and respectively, I disagree. Nonprofits need a holistic marketing strategy–not just social media and twitter.”

Comment by Joe Dager on January 9, 2010 at 12:46a
Jon, I think everyone on this thread would agree with you. Social Media alone is a failed strategy. If I implied anything of the sort, I was wrong. Social Media allows you to extend offline communications online and if you are not allowing your online to be extended offline, more than likely you are in trouble.”

Comment by Chad Pollitt on January 9, 2010 at 1:05am
“Sorry Joe, but I disagree. Everything depends on the target demographic. Marketing on the web is no different that way back in the middle ages when the town crier went to the town square and rang his bell to promote the blacksmith. He went to the town square because that’s where the people were. If your target demographic is on social media than that’s where the campaign should be.”

Comment by Amy Stark on January 9, 2010 at 7:26pm
“Social media platforms come and go, but the basic 140 characters sent via Internet Protocol globally – at the speed of light – at the grassroots level will not go away. Just like the telephone never went away, or microwave ovens.”

As you can see there are mixed messages based on the comments taken from Smaller Indiana above. But I stick to my guns and say, organizations (for profit and nonprofit) need a HOLISTIC marketing strategy–just ask Tomato Fish Marketing (TFM).

TFM has put together a complete marketing system that helps organizations build strong marketing foundations. Once you’ve built a solid foundation through a holistic strategy, you are better equipped to work on the tactical side of marketing such as Twitter, and other social media tools. “Drop them a line” to learn more.

Disagree? Great, post a comment and let’s have an open dialogue.

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Email Marketing: Effective Marketing Tactic

Recently, I received an email via Marketing Technology Blog by Scott Hardigree. His post was intended to be a resource for people who know they could get more value from email marketing.  He goes on to talk about the things you need to think about when considering whether to hire outside marketing help or stay in-house. His thoughts are very insightful and I suggest you read the full post here.

However, for me, the most interesting point was the recent summary by MarketingSherpa that states:

  • “Those that see the effectiveness of their email programs diminishing are much more likely to have short-sighted organizational attitudes toward the tactic. Organizations with investment-oriented views of email reap the rewards.”

As much as I believe in and love email marketing it is ONE TACTIC. It is very cost-effective and successful in helping grow our business and create brand loyalty and trust within our network, but it is only one tactic that we use in our marketing strategy.

For more reading on tactics vs. strategy, click here.

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Overvaluing Product Ideas Can Lead to Failure

Do entrepreneurs overvalue their companies and products?

According to Jonathan Lambert developers tend to overvalue their innovations and customers undervalue innovation and it’s this disconnect that is fundamental to why innovative start-ups are failing.

Here’s what happens:

  1. inventor becomes obsessed with their product or idea
  2. they quit their day job and devote EVERYTHING to their invention (including their savings)
  3. they fail to due their market research
  4. potential customers are not impressed by the innovation and don’t want to spend “that much” to purchase the product
  5. inventor is broke with no market to sell to, but a really pretty prototype

Yes, it’s hard to see things clearly when you’re engulfed in the day-to-day, so to be successful, inventors and entrepreneurs need to recognize their weaknesses and learn to rely on outside objective advice.

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Medical Startup Ideas – What do I do first?

Small businesses are important to economic growth and have an incredible impact on economic growth. So, let’s say you are a small business and you have a medical device idea. What should you do first and where should you spend your money when building your idea?

Before you do anything, you need to prove that there is a market for your product or idea. Will people use / buy your product? At this stage, we recommend limiting the amount of dollars spent by determining your market through market research. Do not rush to build a prototype.

Yes, prototypes have value, but you must be sure that there is a need for the product and that the pricing to manufacture the product and sell it is such that your product price is justifiable and people will buy it.

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Pass The Bricks. I Need To Make Our Wall Stronger.

Have you ever worked in a company where every functional group had their own “kingdom”? I have. It was frustrating. I’ve also had the pleasure of consulting for companies where the objective seems to be “How can we screw the other groups?” and communication seems to be discouraged. Here is a short story based on an actual meeting I attended. The names and places have been changed. I might have added a little “color” to make the story funnier.

Introduction

I was recently part of a project for a medical device company that required changes to many products due to changes in regulations. During the exercise, some of the company personnel decided now would be a good time to assess product sales and to eliminate products with little to no sales during the past few years. However, this company has never eliminated products, regardless of sales performance.

Chapter 1

The sales and marketing resources look over the list of affected products. They decide to exit the market on about 10% of the products. There haven’t been significant sales for quite some time. Several of the products have also been replaced by newer and better products. Keeping these products active is a burden on company systems, inventories, etc. and would require additional expenses and maintenance to keep regulatory registrations up to speed. Everyone reviews the list and agrees.

Chapter 2

The team proceeds with eliminating the products from the market. A decision is made to scrap quite a few of the products on the shelf. For some of the others, the team decides to keep the inventory and allow slow sales to deplete the remaining inventory. In all cases, no more product will be manufactured. In all cases, the products will not be re-registered or marketed. But it makes sense; some doctors still might use existing quantity on hand.

Chapter 3

The team works hard but makes the project deadline. This is a real deadline because the regulations go into effect. Any product not meeting the new regulations by this date represents a compliance issue. The team is happy and celebrates success with a small party–unusual in the corporate world these days.

Chapter 4

Weeks after the project is done, requests stream in demanding that several eliminated products be reactivated. In a couple of cases, there might have been some errors. Humans make mistakes. The team works to correct the errors and all is good.

The requests continue. Not a lot, but more than the team expects. The team members have moved on to other demanding projects. Didn’t everyone review the list of products slated for elimination?

Chapter 5

As it turns out, not everyone did review the list. As it turns out, the team’s interpretation of “elimination” is not shared across the company. As it turns out, the systems the team used to eliminate products are not used by other functions in the organization. Bummer. This project was pretty smooth until now.

Other functions, not a part of the original team, start demanding reactivation of several products. “You need to reactivate this product. If not, we will lose a couple thousand dollars in sales.” Unfortunately, it would cost the company at least this much to reactivate the products just to fill the small order and then eliminate it again.

Conclusion

The team calls a meeting, this time including the “other functions”. The attendees all learn a little about one another and the importance of their roles. More importantly, the attendees learn that none of the enterprise systems that each functional group uses communicates with the other. Most importantly, the attendees learn that the functional groups are terrible about communicating with one another.

Epilogue

Regardless of size, companies need to understand the importance and usefulness of cross-functionality and active communication. Building kingdoms went out of fashion during medieval times. We need to establish cultures of communication. Stop building walls and figure out how to tear them down. Understand that change is part of life. Realize that any change should be examined holistically. Understand both short-term and long-term ramifications and benefits of change.

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Project Planning Through the Eyes of Dilbert

I love reading Dilbert and subscribe to the daily RSS feed. So many of strips by Scott Adams are so true. Here is one about project planning from November 9, 2008:


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Multi-Tasking is Good (see the disclaimer below)!

I provided some links about multi-tasking in a previous post. I’ve worked in project management and planning for nearly 10 years now. Just about every project in this time has relied on multi-tasking as a way of doing business. If evidence supports that pitfalls of multi-tasking, why is it done so often?

I think the main reason is the illusion of progress. The perception is that the more parts of a project that are underway, that more of the project is getting done faster.

I believe multi-tasking has its place and could lead to faster results–if executed properly. If one project resource attempts to tackle many task simultaneously—this is bad and will likely cause delays for all the tasks. The “trick” is to have a cross-functional team and multiple resources. Tasks should be assigned by function. Multiple functions can do multiple project tasks at the same time. Maybe this interpretation does not fit the multi-tasking definition. The caveat remains, though, that each function should only tackle one task at a time.

This suggested parallelism could work very well for all project resources–all except the project manager. But maybe that’s okay. The life of a project manager should be somewhat hectic, right? Beware: it will be easy to overload the project manager and force multi-tasking by this resource. An ineffective project manager does not bode well for project progress either!

Another “trick” could be to split the project into several mini-projects and to use outsourcing to help manage this smaller efforts. But again, the overall project manager needs to be ready to handle a new set of challenges with this type of arrangement.

Multi-Tasking is Bad!

I tried to say this in an earlier post but these articles say it better:

“. . . multi-tasking is not only a bad mindset to have, but it can actually make projects up to 30% late, with only one instance of multi-tasking going on . . .”

“In most project environments multi-tasking is a way of life. This seemingly harmless activity, often celebrated as a desirable skill, is one of the biggest culprits in late projects, long project durations, and low project output. At the same time it is one of the least understood factors in managing projects.”

 

 

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Be sure to check out the Theory of Constraints site too.

Project Planning in My Personal Life

I want to share some recent events from my personal life that have helped me better understand project management and planning. I enjoy how life lessons can be applied throughout my career (“enjoy” is not the term I used at the time the events below took place).

We recently moved to a beautiful new home and 5+ acres. We’ve been in the home just about one month. The house is around 10 years old. The previous owners built the house and took great pride in their results. From the first moment my wife and I saw the home, we fell in love. Eventually, we were able to agree to terms and purchased the home.

So next, we needed to coordinate a move. I approached the moving process as an opportunity to plan a project. A project has a defined beginning and an end. We knew our tentative start date, and while all our stuff is here, I’m not sure I would say this project has officially ended. For the planning process, I considered the following:

  • Who is willing to volunteer?
  • Should I rent a truck or can the contents be transported via pick-ups and trailers?
  • How long will it take to move the contents from the old house to the new house?
  • How should I “pay” volunteers? What’s in it for them?
  • What about the weather? What if it rains?

I started to seek answers to these questions and formulated a mindmap and plan:

  • Resources:
    • 10 – 15 willing volunteers.
    • ~6 pick-ups and three flatbed trailers.
  • Timeline: Considering the resources available, moving majority of contents (the big stuff) should take 3 – 4 hours.
  • Payment: Food and beverages.
  • Contingencies: None really. Constantly watching the weather forecast for the entire week leading up to the move.
  • Other points:
    • Prepare contents at the old house and organize ahead of the move date. 
    • Move contents room by room and put in place at the new house.
    • Manage the process at the old house and the new house; act as a foreman.

For the most part, the plan I developed was executed as I had hoped with a couple of exceptions:

  • Not all resources were available at the same time.
  • No rain but it was damn hot!
  • 75% of the contents were boxed and organized at the old house.
    • Some of the remaining 25% required the attention of my wife (one of the project managers).
    • With the rest, the project resources took initiative and packed and moved the contents. This was not supervised or known by either project manager. (I still do not know where some stuff is at the new house).

Could things have gone more smoothly? Probably not. The project was short in duration and did not require mid-stream contingency planning. I’m not one to doubt the need for thorough planning and think this process can be applied to life projects and professional projects. This experience and my preparation only reinforced the following:

  • Planning does not yield results until execution. Execution of a project, though, is as good as the planning efforts. To borrow the cliche, “fail to plan and plan to fail”.
  • It is impossible to plan for everything. But enough time and effort should go into the process to ensure the best possible results.
  • Sometimes things go wrong or not as planned due to lack of oversight.
  • Project resources are often willing to go above and beyond their assignments. Channel this energy and the project efforts can be strengthened dramatically.

A Riskier Approach to Project Management

Project management is largely about managing risks–technical risks, end-user risks, schedule risks, etc. The least risky approach is to execute project activities in series. For example, a project may comprise of tasks A, B, C, and D. The lowest risk for this project is:

Do task A, then task B, then task C, and lastly task D
The least risky project management approach is to do all tasks in series. Projects seldom (and in my experience never) follow this path. A riskier approach is perform some of these tasks in parallel or to initiate the next task prior to completing the previous:

Start task B before task A is completed; initiate task C after A but before B is completed; start task D after task B and C.

Usually a project will have limitations or “rules” regarding what can be done in parallel and what can’t. This is especially true with medical device product development. For example, design inputs and acceptance criteria must be defined prior to execution of design verification.

I’m managing a product development project for a medical device start-up. The product involves a disposable, software, and hardware–all of which are being done in parallel. We are also building a quality system in parallel. It has been challenging and is very risky. If one item slips, then all are compromised.

And this has happened a few times. Are the project risks worth taking this path? For this project, it’s too late. We now have to develop contingencies to get things back on track.

I “inherited” this project mid-stream. Had I started project management at the beginning, I probably would not have planned everything in parallel. Food for thought for the next project. :)

Link to “How To Be Happy” from Personal Development Blog

Okay, this post is not specific to medical device planning. However, it definitely applies.

Enjoy “How To Be Happy: Productivity and Finding Time” from the Personal Development Blog. Some very good points that can help with just about anything we do–including medical device product development projects.

Planning Is Constant

Project planning seems never-ending and is very dynamic. Once a plan is created, it’s out of date. Project activities can change so rapidly.

The best approach to planning is to engage the actual project resources in determining project tasks, activities, and duration. Even when this happens, the information received is probably off. I’ve been there as a project resource providing feedback to the project manager. I was very optimistic and thought I could jump through hoops. My intentions were good but wrong.

As a project manager, I know this. The project resources I’m working with are for the most part top notch. Most have committed to doing whatever it takes to get the project done. I appreciate the enthusiasm and can do attitude. But at the same time, I realize these are unrealistic expectations.

We have target dates for milestones. We are marching towards our goals. There will be lots of things to detract us from our project tasks and activities. Many things will take longer than we thought. The project schedule will ebb and flow and be wrong. But somehow, we need to find a way to resolve issues and put contingencies in place.

Planning is constant. For a project manager, it doesn’t end. I’m always in planning mode. Some how, some way, my primary job is to get more out of people than anyone else might have thought. I also need to act as a filter to keep “noise” from project resources. I get to remove (or go around) obstacles that may get in the way.

Project management is part science and part art. It takes a fair amount of experience and quite a bit of luck. So wish me luck!