Author Archives: lotfi saibi

Lotfi Saibi has authored many white papers and articles in the areas of leadership, customer service, operations, and business development. Mr. Saibi’s vast management experience as a business owner, a consultant, VP sales, and more recently as CEO, coupled with his love to teach and mentor, has made him a very well respected leader among his peers, customers, and competitors.

Mr. Saibi’s management style only got better when he began coaching soccer over fifteen years ago-a career that ranged from youth soccer, to college, and eventually to the U. S. Soccer Olympic development Program. It was only natural that his passion to teach and mentor extended to his professional life in the areas of customer service, employee training, enterprise software sales training, asset management and mobile field services software, and financial services.

Purpose before Self-Your mission as a leader

August 23, 2009 – 9:24 am

In an era when many business leaders seek celebrity at the expense of their companies, others are quietly focused on something else entirely: the business.

What they care most about is carrying out the mission of the business, delivering the promised results, and building an organization they can be proud of.

They have a sense of purpose that goes beyond their own personal desire for extraordinary wealth, status, self-aggrandizement, or power. They put a broader purpose before interests that benefit only them.

Magnetic Leadership

Look around your organization and you’ll likely see leaders who are always thinking of what’s best for them or what will make them look good.

Then there are others who are driven to create something meaningful and enduring. Their purpose might be to make the organization the most respected in its industry, or to develop the best workforce in the world. One CEO I know has made it his purpose to recast his company as an innovation-driven organization.

These are the leaders people typically gravitate toward. The ones we trust, and who we want to be more like — not because of how much money they make, how much power they have, or how well-known they are, but because of who they really are, their inner substance.

Given the public transparency of the 21st century, leaders who put purpose before self are the ones to follow — and to emulate.

Actions Speak Louder Than Words

Some leaders make impassioned speeches about their glorious mission or lofty goals, but their actions reveal their true motivations. They want their own fame, power, and fortune more than anything.

Are you the type who says the right things, or the type who does the right things? Is your self-interest served by meeting a higher purpose?

Put yourself to the test by being intellectually honest in answering the following questions:

1. Are you willing to give up some of your turf for a broader purpose?

In 2005, a $20 billion company underwent a major reorganization, and one of the senior executives approached the CEO to tell him a portion of the executive’s new job really should belong to someone else.

What was he thinking? He was in a horse race to succeed the CEO and already had the smallest scope of all his peers and fellow contenders for the top job. Under those circumstances, many leaders would try to expand their span of control. But he believed the organization would work better if certain areas went to someone else.

This leader was not naïve or unambitious. It’s just that he truly wanted the business to succeed. Of course he hoped that his thinking would be recognized and appreciated. When his boss and the board get close to the succession decision, no doubt they’ll remember that this person revealed he’s not a greedy empire builder.

Caring about the good of the organization can mean ceding a portion of your span of control, voluntarily agreeing to cut back on projects in order to meet a budget goal, or sharing part of your leadership responsibilities with an up-and-coming leader who needs a development opportunity.

It might also mean giving up valued team members who would better serve the organization in a different capacity. In today’s global organization, letting go of good people is almost an imperative.

2. Do you place a high value on relationships?

Leaders who lead with a purpose understand that they must build and sustain relationships — with customers, suppliers, employees, colleagues, and others whose favor or contributions are important to their organization’s success.

They don’t see relationships as an immediate exchange of benefits. Their primary concern is not “What’s in it for me?” In fact, it may not even be clear exactly how a relationship could ultimately prove beneficial. Nonetheless, they’re happy to devote the time and energy.

One legendary leader who understood this was John Weinberg, the former head of Goldman Sachs. He was famous for regularly calling to check in on clients, even when he had nothing to sell them. He just wanted to be available to them to help with any issue he could.

The payoff was that he built deep, trusting relationships with his clients, who would often turn to him for advice. These relationships in turn helped solidify the reputation and strength of his business. It’s part of what brought him recognition as a great leader.

3. Can you value — and leverage — different perspectives?

If you lead with purpose, you understand that there’s little value — and much short-sighted paranoia — in dismissing or deflecting viewpoints that differ from your own.

If you try to create a picture from a higher altitude, namely the corporate viewpoint rather than a departmental or divisional viewpoint, you’ll be better able to reconcile conflicts. To do that, you have to be able to step into someone else’s shoes and see things through their eyes.

Are you given to clashing with other leaders in your company, or do you seek to build strong working relationships with them based on your shared commitment to the common good of the organization? Do you automatically push back on customer demands for earlier delivery dates, discounts, or more favorable credit terms, or do you try to understand why these requests are being made and work with the customer to arrive at solutions that benefit both parties?

Leaders who put purpose before self can recognize, accept, and even leverage different perspectives — often to tremendous advantage

4. Are you comfortable with transparency — because you have nothing to hide?

Transparency is the order of the day, and people are more willing to work with, work for, and partner with people they trust. Trust is, after all, the crucial glue of collaboration.

Those who are narcissistic, who cut corners, and seek the easy path when the right path appears too difficult, and who clearly put themselves first, are less effective because they’re held in much lower regard.

If, on the other hand, a higher purpose guides your actions, others will know where you stand and what you’re about because you have nothing to hide.

Mark Twain observed that if you tell the truth you don’t have to remember anything. He offered this as a humorous observation, but as a leader you should take the spirit of the message seriously. If you put purpose before self, you’ll spend little time covering your tracks, “spinning” bad news, brandishing your image, or seeking to rebuild trust with others. And, as a result, you’ll have that much more energy to devote to your purpose.

Disclaimer: source and author unknown.

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Superficial Leadership, a common Malaise.

August 11, 2009 – 7:10 am

How often have you known a leader who takes command of the room the minute he walks in, gets all eyes focused on him, delivers a fantastic PowerPoint presentation, and has everyone eating out of the palm of his hand?

When that happens, people think to themselves, “Now that’s a leader!”

But as time goes on, the same leader makes terrible decisions or none at all. The people who report to him lose focus, the organization loses direction, and the business begins to flounder.

The so-called leader, it turns out, has no real ability to lead a business.

Style Before Substance

The issue comes down to style versus substance. Far too often, the people who identify, develop, and appoint leaders focus on the appearance of leadership. They miss the most important aspect of it: knowing how to run a business.

In his book Blink, Malcolm Gladwell notes that CEOs are on average three inches taller than the average male, and he attributes this fact to an unconscious bias. An imposing physical stature, he surmises, sends unconscious signals about who is or isn’t a leader, and thus influences who gets picked.

It may be hard to believe that people are swayed by such superficial qualities, and height is clearly an extreme example. But there are many other traps that cause us to put the wrong people in leadership positions, with terrible consequences for the person and the business.

Are They Really Leaders?

There are certain types of leaders who aren’t necessarily business leader. Don’t assume you’ve found a leader when you find one of the following:

  • The Pedigree

When you hear leaders making frequent references to their alma mater (“When I was at Harvard…”) or the big successful company they used to work for (“When I was at Toyota…”), be skeptical. Such people may be trying to impress by virtue of where they’ve been, rather than what they’ve done as a leader.

I’m not against education or valuable work experience. (In the spirit of full disclosure, I’m a proud Harvard guy myself.) The point is that some people are taken in and choose such “leaders” either because they assume something good must have rubbed off, or because they think it’s safe.

It isn’t. You have to look at the person’s skills and record of actual accomplishment to have any sense of the person’s capability as a business leader.

  • The Spiritual Leader

Some people have a way of stirring up energy and excitement in other people. They conjure a vision of something great and appealing and have extraordinary communication skills that fire up emotion. People believe them, and want to go where they’re going.

The ability to inspire others is indeed a wonderful trait in leaders, but not every person who can arouse emotion can link her vision to the practicalities of business, and emotion alone cannot get an organization where it needs to be.

When a spiritual leader, rather than a business leader, runs the show, the initial burst of excitement can be uplifting. But it inevitably fades when results fail to materialize.

  • The Brain

One way people gauge a leader is by how smart she is. We can’t help but be impressed by the person who reacts quickly, gets to the answer fastest, can speak knowledgably on a breadth of topics, and has instant recall of names, quotations, and numbers.

Sometimes such people let you know how well-read they are. But being quick on your feet is not the same as intelligence, and intelligence is not the same as being a leader. Do we want intelligent leaders? Absolutely. Just don’t choose leaders based on raw intelligence alone.

  • The Savior

A leader is running a troubled division. Margins are shrinking, quality is deteriorating, and customers are defecting. But he is undaunted by every piece of bad news. In every review, he assures his superiors that change is right around the corner.

He has a plan, meticulously detailed in charts and graphs. He wants you to trust him, and because he seems so confident and sincere, you do.

Optimism and confidence are appealing, but make poor substitutes for the know-how of addressing problems. And we all know that problems neglected have a way of growing. The person who promises the answer but never delivers on it is not a business leader.

Focus on Substance

There are lots of personal traits we want in our leaders — things like confidence, intelligence, and communication skills. But if we want our organizations to be in good hands, we have to focus primarily on the substance of leadership — whether the person really knows what he or she is doing.

If you’re an aspiring leader, don’t assume you were born to be a leader. Leaders are largely made, not born. You have to build your leadership capabilities. The time you spend polishing your PowerPoint presentations or building your reputation may get you ahead temporarily, but in this age of transparency, the inability to deliver results will eventually catch up with you.

Disclaimer: Article source unknown, author unknown.

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What is needed from a Leader in 2009.

August 11, 2009 – 6:59 am

I have often struggled to find convincing answers or a magic formula for what makes companies operating under similar circumstances, in the same verticals, identical markets, same starting point, you get the idea… end up 180 degrees apart, heading different directions, with nothing in the way to stop them. Now that I have you thinking of at least a few, you are probably saying to yourself that it is obviously the usual suspects (fill the blanks). The one intangible I keep coming back to is the person at the very top of the pyramid- the leader who sets the course months, sometimes years before the first employee is even hired. Like infants when they are born, companies thrive on their internal culture, sowed by leadersip. It is that culture, properly cultivated, that will lead to greatness. Just like the mind of an infant, filled with negativity, it will lead to mediocrity, at best.

Many books have been written about leadership, great leaders, and mediocre ones. I have, instead, chosen to share with you some real life scenarios of good and bad examples of leadership, from exisiting and long gone organizations. I am certain that these next few posts will enact a sense of deja vu for most of you. You will see that lack of leadership is often the common denominator for great plans, strategies, and companies that struggle, and in some cases vanish.

The first of this upcoming series is about Superficial Leadersip. Feel free to comment.

Diaclaimer: I have come across some great articles a few years ago that I kept, and have since made them required readings every so often. Most were from a series of articles by The Economist magazine. The next few blogs will contain some of those articles. Dates are unavailable.

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Rethinking Major Accounts Strategy, part 2d

July 25, 2009 – 8:23 am

As we come to a close of the Congruence Model, our last section being the Processes and Systems that allow for all other elements of this model to flow freeely and coherently. I would like to quickly say thank you to some of you who have actually taken the time to phone or email me, and in some cases, post a comment. For this is exactly the kind of forum I was hoping to create. A free exchange of ideas spanning many industries, experiences, and skill levels.

Processes and Systems:

This final element of the congruence model includes systems and processes for planning, managing information flows, identifying opportunities, measuring customer satisfaction, and many others. These systems and processes enable key account managers to effectively develop and implement strategies and plans for individual accounts.

The analysis of the key account helps the key account manager identify the full scope of potential opportunities and threats at the key account. This identification, together with analyses of competitors as well as your own firm, leads to a series of decisions regarding which opportunities to pursue (and which to avoid), which threats to combat, and the particular strategic approaches to pursue.

The key account manager needs to have complete understanding of the fundamentals that constitute the key account: they include organization, ownership, top management, locations, corporate culture, financial performance, and future prospects.

To develop the appropriate depth and breadth of data to conduct these analyses, the manager should attempt to become intimately involved with the key account’s strategic planning process.

The strategic key account analysis comprises four major elements: identification of mission, external analysis, internal analysis, and an analysis of strategic coherence.

These analyses will lead you and your team to a set of planning assumptions on which the key account strategy will be based.

Conclusion:

The material presented here is extensive and even overwhelming, in scope. It takes us back to the 80/20 rule and the value of key accounts. If it would hurt your bottom line to lose more bids, or be of immense value to gain a potential key account, then performing a full-blown situation analysis, isolating planning assumptions, and carefully identifying opportunities and threats is surely worth the effort.

Having a group of dedicated Business Development Managers is a short sighted solution- transactional sales that might increase revenue in the short term, but fail to garner any long term relationships- therefore future contracts and revenue. Because of the very nature of the payment plan BDOs receive, it contributes very little to company loyalty, and that contradicts what most mission statements has set to achieve. Additionally, it should be pointed out, that this approach was tried and abandoned by most  in the early 1990s. BDOs do not provide what most companies stands for and represents in their mission statement and value proposition. They are not the long term solution.

Increasing, or changing the incentive plan, is also a short term band aid, which does not address the core issues. Sure, consultants would be more motivated by additional financial compensations; however, a lot of what a consultant does is very subjective, and therefore hard to quantify. This front-loaded plan will most certainly motivate consultants to be more productive, and may increase utilization ratios across the company, but will fail to establish what you have established as a financial goal- positive, suatainable cash flow. 

Each of these two possible solutions has value to it, but will not on its own solve the current revenue crisis. Both solutions must not be considered as mutually exclusive. I mention this because of the remaining 20/80 of the equation- the other 80% of the customers that provide 20% of your companys sales, or Non Key Accounts.

What should be done next is provide a strategy, combining both the BDO and new incentive plans with the traditional “seller-doer” model to address the non-key accounts, which will increase revenue and position the firm more competitively.

The following publications have been used as references to the prior 4 blogs pertaining to Major Account Management:

  1. Capon, Noel. Management and planning
  2. The Wall Street Journal,
  3. The Economist,

      4.   Ingram, LaForge, Avila, Williams. Sales Management analysis and decision making. Sixth Edition

      5.   Forrester research, January 23, 2003

      6.  http://www.cnn.com/business/marketing

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Rethinking Account Management Strategy, Part 2c

July 18, 2009 – 4:19 am

Today I tackle the third part of the Congruence model, that is the Human Resources piece. Thank you all for the kind words and flattery. I understand that some of you actually enjoyed the prior posts, while others actually went back and revisited, compared notes, and even used some of the methods I provided to further drive the effectiveness of their strategies.

Recruitment and Selection of Key Account Managers                              

As a leader, manager or owner, you must put in place appropriate procedures for recruitment, selection, and training to generate key account managers who can effectively carry out their several roles and responsibilities. You must also develop ways of retaining them. In particular, reward systems must be carefully thought out. Clearly, financial compensation is an important issue, but you must also consider several other types of reward mechanisms.

Candidates for this position could be recruited either internally or externally.

  1. Internal Candidates: Typically, sales consultants make the easy transition to key account managers. However, the capability profile of successful key account managers is quite different from that of successful seller-doers; not all successful salespeople are able to make the transition. Since relationship building is such a critical factor in key account management, your company’s needs for high-caliber managers in other positions must be carefully weighed against both the key account manager’s personal development goals, and the requirements of key account relationship.
  2. External Candidates: The second source of key account manager candidates is executives working for other organizations. Such candidates may have significant key account management experience and/or considerable knowledge, experience, and relationships at the key account, developed with a competitor, a noncompetitive company, or as an employee. Such candidates may lack intimate knowledge of the account, but balance this deficit with powerful key account credentials.

Training of Key Account Managers

The specific training required by newly appointed key account managers is in part a function of the major customer, its key accounts, and the nature of the desired relationships. It also depends on the knowledge, skills, abilities, and experience of those executives appointed to be key account managers. Some key account managers may require specific training in planning, others may benefit from better negotiating skills, proposal development, and time management. Of course, training should not be a one-time event, and periodic educational and training programs should be considered.

 

Retaining Key Account Managers

Well trained effective key account managers are an extremely valuable corporate resource. To executives in major account, if the relationship is successful, key account managers often will be the face of your company. If a key account manager leaves his or her job, the potential exists for any value residing in the relationship to disappear overnight.

Management must realize that in their plan to establish successful KAM, if  your compnay lags the market in rewarding key account managers, you will surely lose critical personnel. Certainly, you will have to maintain a database on the destination of departing employees to ascertain where noncompetitive situations exist.

In addition to financial compensation, you must consider the full range of available reward systems—promotions, other formal rewards, and intangible personal rewards— so as to preempt unexpected key account manager resignations. Management should also consider processes such as identifying role models and developing mentoring relationships, as well as assisting the key account manager in balancing personal and family life with work responsibilities. 2

Rewarding Key Account Managers

The starting point for developing a reward system is clarity on the requirements of the job. In particular, you must be clear about the appropriate performance metrics. Let’s discuss performance measurement before turning to reward systems.

Performance Measurement: Using the “balanced score card” approach, you will have to measure:

  • Financial performance– including sales revenues and profit contribution.      
  • Growth– including new applications developed and sales to previously unsold customer divisions.
  • Customer– including customer satisfaction
  • Internal– including the quality of internal firm relationships, inventory management, and team leadership.

In measuring key account manager performance, you should select metrics that meet four often-competing objectives:

  • Alignment with the vision, mission, strategy, and objectives at the key account
  • Controllable by the key account manager
  • Trackable by the firm’s reporting systems
  • Focused, meaning avoiding too many measures

Reward Structure: Should be highly motivating and should generate high levels of effort and performance. Some of the more popular and highly sought after rewards include financial rewards, promotions, recognition, and other intangible personal rewards.

Compensation should involve mainly three principal variables (base, commission. bonus). The greater the amount of revenue the key account manager can impact, the greater should be his or her financial compensation. The more importance given to current sales revenues as the key account manager’s objective versus long-run development, the greater should be cash compensation.

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Rethinking Account Management Strategy, Part 2b

July 9, 2009 – 7:16 pm

In our pursuit of better account management, we continue with the second of the four major points that, together, comprise the Congruence Model.

Organization of Key Accounts Management

Certain “actions-of-choice” have to be taken for your company to survive in this increasingly fast-changing, complex, and turbulent environment. Your organization has to develop a heightened awareness regarding the importance of a small subset of their customer base, those firms that currently do, and in the future will, account for a large percentage of your revenues and profits.  The critical business implication is that these customers have an importance to the firm’s long-run future that exceeds that of the “average” customer.

Typically, introduction of a key account management program cuts across existing lines of responsibility and authority, and various organizational systems and processes. Power bases are affected and, as a result, turf wars and individual political agendas may get in the way of successful key account program introduction. Strong committed support from the top of the organization can ease the introduction of key account management but, nonetheless, considerable skill is required to get a key account management program up and running.

Aside from the top down approach in support for the program, selecting the right mix of key account management is crucial. Focus should be on three critical roles—top management, the key account director, and key account managers. 

Top Management: For a key account strategy to realize its potential, senior management must fully and openly support the key account program in a tangible manner. This support must be multifaceted and may be evidenced in a key account program champion. Top Management must openly and consistently support the program in the following manner:

  1. Commit to a key account strategy
  2. Provide a positive internal environment for securing high quality Human Resources
  3. Fund the development and/or purchases of systems and processes
  4. Support the development of a key account culture
  5. Be directly involved with key accounts
  6. Secure the firm’s objectives at the key account. These may go beyond sales and profit margins
  7. Develop strategy and action plan from a micro-level.
  8. Ensure the implementation of strategy and action plans.
  9. Develop and manage relationship with key account.
  10. Build and manage key account team.

 Key Account Director: The person assigned to this position must have full support of the top management, be an executive with considerable business acumen, and must assure the congruence among the four elements of key account strategy: organization, human resources, and systems and processes.

Key Account Manager: Typically, this is a formally appointed position. A consultant or senior executive may assume the key account manager role in addition to other responsibilities. Regardless, the key account manager is the lynchpin around which the entire inter-organizational relationship revolves. This function may vary considerably depending on the client, or area of interest. However, the following responsibilities remain:

Necessary Key Account Manager Skill Sets:

1. Business skills – The increasingly important yet difficult role played by key account managers makes it imperative that individuals of the highest caliber staff this position. Management must be very clear about the particular set of knowledge, skills, and abilities that it requires in the key account managers. Skill sets requirements should be determined based on the priorities set by senior management; that is, build a relationship or acquire new business. Management should also be very clear about the results expected out of each KA manager and each Key Account relationship. For example, the skills necessary to ensure that current sales levels are maintained and increased may be quite different from those required to identify opportunities within a client’s other business sectors.

2. Leadership skills – Leadership and team building skills are necessary qualities for key account managers. Team leadership “requires a complementary mix of skills, a purpose that goes beyond individual tasks, goals that define joint work products, and an approach that blends individual skills into a unique collective skill—all of which produces strong mutual accountability.” To successfully lead a key account team, the key account manager should possess strong interpersonal skills that engender trust, resolve conflict, and bring about the required behavior. In addition, such personal traits as assertiveness, attractiveness, charisma, energy, flexibility, integrity, persistence, personal discipline, and toughness improve the chances for success.

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Rethinking Account Management Strategy, Part 2a

July 2, 2009 – 2:35 pm

First, a note to all the loyal readers of this blog, about 30 by now:). I have been abscent for a few weeks, and for that I am sorry. To my surprise, I received some inquiries about future posts. With no further delay, here is part 2.a) of  Major accounts management & strategy:

CONGRUENCE MODEL FOR KEY ACCOUNT MANAGEMENT

Effective key account management requires consideration of several complex elements in an overall management process. Consideration must be given to several interconnected building blocks that I term the key account congruence model.

  • Strategy                      
  • Organization of Key Accounts
  • Human Resources
  • Systems and Processes

Successful implementation of this model will be achieved only if senior corporate executives fully understand the issues involved in key account management and are prepared to put in place the organizational, technological, financial, and human resources necessary to manage the firm’s key accounts on a long-run basis.

I have personally witnessed on more than one occasion SMB suffer in acquiring and managing major accounts, because senior management failed to understand their roles in the success of the model.

Today, I will share my thoughts on the strategy, as a key point of the congruence model.

The following four major points are necessary to the success of the congruence model management must make sure are in place. They are what I refer to as KPIs, or key performance indicators, which if measured properly, will form the basis of a successful strategic plan.

  1. Defining Key Accounts Values:
  1. Identify target clients and corresponding profits they represent to your organization.
  2. Develop factual understanding of what the most profitable customers expect and value from company.
  3. Identify which of these expectations impact their decisions to partner with organization.
  4. Formulate and quantify how key accounts rate your company’s performance versus its competitors.

        2. Designing Key Accounts Experience:

  1. Thoroughly understand the experiences your best customers currently have with your company.
  2. Identify the critical touch points which make up the customer’s experience touchline.
  3. Design new service experiences that will deliver your company’s promise in a way that is consistent, differentiated, and valuable to targeted key accounts.
  4. Identify specific team members’ behavior required to deliver the key account promise at each point.
  5. Develop fully integrated and comprehensive change strategy to implement the new relationship and assure success.

       3. Equipping People and Delivering Experience:

  1. Develop internal communication plans to build commitment, understanding, and clarity around the implementation of the new relationship.
  2. Assure that leaders/managers at all levels understand their roles and champion the key account experiences.
  3. Prepare all team members with the skills and knowledge required to deliver the key account experience.
  4. Be proactive in improving people, processes, and services to deliver the key account experience.

       4. Sustaining and Enhancing Performance:

  1. Develop systems to continually collect customer and employee feedback and how it can improve the relationship.
  2. Implement a balanced set of performance metrics that provide executives on both sides with objectives, timely feedback, and how ENSR measures against its promises.
  3. Have a reliable, effective training program that continually builds capabilities to deliver customer experience.

Because of the increasing importance of key accounts to your firm’s longterm success, management must make critical resource allocation decisions around KAM. At a fundamental level, it must decide on the level of corporate commitment to key accounts in general, on a vision for the key account program as a whole, and on the types of key account relationships it wishes to develop. More specifically, it must identify specific criteria and selection processes for choosing key accounts, considering both current and potential revenue and profit streams, and other important issues. Both in making critical key account selection decisions and for allocating resources among its key accounts, a variety of portfolio approaches may provide significant managerial guidance.

Potentially useful criteria that can be used in the key account selection process are grouped into two major categories—direct sales revenue and profit, organizational interrelationships.

1.      Direct sales revenue and profits

  • Current Sales Revenue.
  • Current Profits.
  • Future Sales Volume and Profit.
  • Financial Security.

 2.     Organizational interrelationships

  • Coherence with Firm Strategy.
  • Cultural Fit.
  • Your company valued by potential customers
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Competing with the BIG BOYS

May 23, 2009 – 4:54 am

If you are concerned with maintaining your competitive advantage, or simply staying alive like the rest of us, you most likely have considered alternative sources of revenue in the last eighteen to twenty four months. You might be a one person outfit selling a better mousetrap, or a Fortune 500 executive launching a new division to rev up growth. Discovering new markets must be part of your overall growth strategy.

Whatever the case, at some point you’ll need to go back to basic- thinking like an entrepreneur — whether it’s to launch a new product or service line, extend to a new market segment, or establish a beachhead in a new geographical territory.

The reality, as every entrepreneur knows, is that most markets already have existing competitors. Even the largest companies in the world sometimes find themselves the small fish in a big, new pond. And the bigger fish already know the territory; they have the scale, connections, and market share to make life difficult for newcomers.

Still, there are tried-and-true ways to swim with the sharks, and start and grow a business. What I will share with you, and what other readers have provided, are not only classic cases of market penetration, but some unconventional ways and some examples of how to leverage the tools that avail themselves to you.

There are three steps to effectively entering a new market in spite of what players are on the scene:

1.     Don’t buy into swinging for the fences, try for singles and doubles:

 Big companies are accustomed to hitting home runs every time they step up to the plate. They generally do not venture anywhere unless they know for certain the ROI is in place and waiting. For they have the research, the channel partners, and the consultants. What they lack as a result of their size are flexibility to change courses quickly and efficiently, flexibility to work with customers on specific needs, and the quickness necessary to meet deadlines.

As a new player, you may not have the resources some of the BIG BOYS have in place. Do not despair. There is a clear advantage to being small, cross functional, and flexible.  You can create pilot teams throughout your company, each composed of people from all the departments. Their mission: Getting a revenue project up and running in a ninety days. That is what I call “small ball” strategy, to use one of Baseball’s favorite terminologies.

90 days? I can sense some skepticism as you are reading this.

What you need to keep in mind is the purpose of the 90 day goal-line: The 90 days forces everyone in the team to confront issues that would keep you from succeeding. The clear focus and short time frame force team members from different departments to break down the walls that literally and figuratively keep them separate.

On a personal note, I always try to enlist the help of at least one stake holder from the customer side. If that is not possible, make sure the customer’s wishes are well represented through the sales representative.

2.     Be creative with execution.

There is so much to cover in this section. I want to instead focus on small organizations with scarce resources and smaller budgets.

You probably remember the case of how Red Bull decided to compete. They did not go after the soft drink market and compete head to head with the giants of that industry. They instead went after the college and athletics crowds, and distinguished themselves as an energy drink. As they established their name brand, customers, like liquor stores and super markets came calling. The rest of the story is well known to all. My point is, you need to know your competitors. You need to know your market, or a segment of it. Taking the road less traveled is often times the safer way to go.

On a recent trip, I came across a customer that was hesitant to pull the trigger on a solution that was certain to help his organization. He was reluctant due to timing, budgets, and all the reasons you are all too familiar with. I offered we customize a solution for him, provide him a sampling of our offering at no charge to his company. I needed to validate to him and his shareholders the benefits. Our down side was insignificant vise a vise the trust I needed to create. I am certain that if he does not go forward with it, it will not be because he failed to see the benefits our solution will offer his company.

3. Change your moneymaking approach to be different from the market leaders.

By not playing in the same soda markets as Coke and Pepsi, Red Bull didn’t have to compete on price, where it probably couldn’t have won.

By working with our prospects on finding unique solutions for their needs and offering proof of concepts, and even providing the hardware they need to “play with”, we have essentially increased our chances of landing future contracts exponentially.

The Game has just began

If the good news is that you’ve successfully entered or created a market, the bad news is that you’d better be ready for a competitive reaction. If you’ve been successful, you’ll almost certainly wake the sleeping giants and draw in newcomers.

Be prepared to fight

There may be times in which a new entrant’s growth stalls even though it does everything right. Innovating, moving quickly, and offering something unique — be it customer service, technology, value, brand association, or a different mix of attributes — should give the entrepreneur a good start.

But giants have a lot of power in their scope (i.e., bundling different products and services together), brands, relationships, and customer bases. Think of Microsoft’s successful battle with Netscape over the web browser market. Clearly, not every big company is slow or can’t innovate. Some are very good at figuring out new market segments and can shift huge amounts of resources — both capital and great talent — to defend whatever turf is under attack.

Not all big companies are afraid to take risks, either; indeed, because of their size and resources, they can afford to take them. GE, for example, brings those advantages to almost every market in which it competes.

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Size does not matter

May 19, 2009 – 10:41 pm

I have recently returned from a trip abroad researching new markets for our company. I visited three countries to be exact. I have found that in our domain expertise, there are already several key players embedded in to the fabric of the local markets. At first glance, I was discouraged – who wants to deal with a small custom software solution provider with no real fooprint in this part of the world. I began my usual recon mission about the potential, customers, existing vendors, the solutions they are selling, the business model they are offering, the service packages they claim to support. I realized that we can play in this arena, and possibly give the big boys a real competitive game. (Sorry, too many playoff games)
Competing against the BIG BOYS will be the subject of my next post. I am hoping you will share your own ideas and personal experiences, what side were you on, and how did you deal with it. Please send any posts directly to me and I’ll put them on the site: lotfisaibi@gmail.com

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