Allen Harris: Why is my competition always one step ahead of me?

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Business is good, but it could be better. It's not so much the economy or consumer demand that could make it better. The problem is that your competition is eating your lunch. You need an advantage.

Advantages can come in the form of marketing prowess, planning, financial strength, product differentiation and the way we use technology. These are all important, but the most untapped competitive edge is organizational health — aka teamwork.

Unlike good teamwork, all the others are easy to access. You can hire a consultant to design a strategic plan. The technologies of those disrupting your industry are mostly available to you as well. Access to capital is plentiful. Marketing can be outsourced. But creating good teamwork requires a unique set of skills, commitment, communication and conflict.

What many business owners hate about the concept of improving their team is that it seems touchy-feely. But the result of teamwork is just as tangible and practical as anything else in your business.

A quick web search can find research from the likes of Stanford, PriceWaterhouseCoopers, Harvard Business Review and Microsoft supporting the claim that companies with collaborative workforces are far more likely to be high-performing.

Intuitively, the managers at your company know this. According to Salesforce, 86 percent of employees and executives blame lack of collaboration for workplace failures. McKinsey& Co. finds that 97 percent of employees and executives believe lack of alignment within a team impacts the outcome of a project.

Teamwork equals health

Teamwork is less "Kumbaya" and more clarifying what each department is doing and how they are connected. Silos within an organization are removed when the entire team is clear on why the company exists, what the firm's goals and priorities are, which steps must be taken to advance the firm toward those goals, and who has accountability and decision-making authority.

Bringing your team together on a vision and a plan should set you apart as a quality leader and give you a competitive advantage. Without teamwork, your departments — finance and operations, for example — will fail to be healthy; they need to communicate with each other on margin requirements, costs and the return-on-investment hurdles. Even if those and other departments are satisfactory on their own, they are vulnerable to disruption from the toxicity and confusion of bad organizational health.

Another example is having your sales and marketing departments working together. A common problem I find in businesses with fewer than 50 employees is that owners place the marketing responsibilities on their salespeople. When that occurs, I often find that one of the biggest owner gripes is something like "We've got good products, but our salespeople just aren't closing enough deals."

It's not the salespeople's fault. Sales and marketing are connected, but they are not the same. The job of marketing is to define and promote your brand, educate potential customers of your value, provide relevant materials and create a pipeline of prospective clients. But they can't do that without the sales department, whose job it is to close deals and provide relevant feedback to the marketing department so that marketing can be effective.

Berkshires example

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Albert, the owner of an information technology company in the central Berkshires, found this out. For the last decade, Albert's firm has grown like wildfire, but not as fast as his larger competitors who were gobbling up market share.

During the Great Recession, Albert laid off his sales team and focused on keeping costs low. For a few years after the recession, his technicians were forced to take sales calls, and that was a bad idea. Eventually, Albert hired two new salespeople and Albert pretty much said, "Go out and close deals" by attending networking events, hobnobbing at the country club and connecting with old schoolmates. But what truly successful company do you know that relies on salespeople to rub elbows with a bunch of randos?

Three years ago, Albert hired Nikki to handle the marketing functions that the salespeople were stumbling through. And not a minute too soon. One of the salespeople was ready to quit out of the frustration of being a glorified telemarketer during the day, only then to spend evenings at networking events away from his family.

Nikki interviewed the salespeople about what worked and didn't, dug into their CRM system to see who was buying their service pre-Great Recession, and compared trends in new leads, closed deals and lost opportunities.

Nikki surveyed current customers to learn what led them to hire an IT support team (to determine what brand to promote), what problem the clients were trying to solve (to create advertising targeting prospects who required particular solutions), and what method of communication they preferred (to figure out the best medium of advertising — radio, digital, print).

Nikki defined Albert's "ideal client profile" and figured out how much money to spend on what kind of ads, and where those ads should be placed. The result was that instead of the salespeople hunting and killing, they received prospective leads who were already informed about what Albert offered, and those leads had problems Albert could solve.

The result of that teamwork was that the salespeople were spending more time actually selling, and with warmer leads.

'Broken' is easy to fix

Something like Albert's case was an easy improvement because the team was broken, but not dysfunctional. Broken things are relatively easy to fix. When teams are dysfunctional, that's when they need the most work.

Nonetheless, managers are hesitant to take on the task of building teams because conflict can be uncomfortable, which makes it hard for leaders to address the dysfunction within their firm with honesty, persistence and effectiveness. However, if your team isn't optimized, your business will never realize the potential that continuously eludes you, but that, somehow, your competition seems to find.

By eliminating the dysfunction of your team, whether caused by inside politics or ambiguity about roles, you empower your people to do their best work, solve problems for both the firm and the firm's clients, and gain market share.

Firms with the best teams are better equipped to bounce back from setbacks, attract the brightest people and create opportunities that they couldn't have otherwise. Ultimately, creating this environment of success puts you on track to beat your competition.

Allen Harris, the author of "Build It, Sell It, Profit: Taking Care of Business Today to Get Top Dollar When You Retire," is a Certified Business Valuation Specialist, Certified Value Growth Adviser and Certified Exit Planning Adviser for business owners. He is the owner of Berkshire Money Management in Dalton, managing investments of more than $400 million. Allen's forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquiries to Allen at AHarris@BerkshireMM.com.


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