Creating a System to Grow your Business

This article was jointly written by Alex Meyer of Renaissance Information Systems and Eric Hart of NPI Technology Management.  We share the view that strategic planning is the best approach to managing business growth.

Not every business wants to grow in size.  Vermont statistics bear this out.  Of the nearly 22,000 firms in the state, 80% employ fewer than 10 employees, regardless of how long they have been operating.  However, there are many small businesses that want to expand.  If expansion is your goal, we recommend creating and following a roadmap and process for managing the business’s growth in conjunction with the technology that will help to drive it.

A focused, intentional and flexible approach to planning is key.  For fast-growing companies, it may seem that the business changes faster than plans can be made.  Keeping a continual focus on a forward and backward view creates a smoother path for growth.  The desire for smooth growth highlights the need for growing companies to adopt a flexible and adaptable approach to planning and incorporating it into your everyday workflow.

The Agile Retrospective approach is a simple yet powerful method of incorporating regular planning throughout an organization, the retrospective is intentionally incorporated into your regular meetings and focuses your attention on what is going well in your business, what could be going better, and what changes you want to make.  These meetings can be used at any level of your business and on any timeline.  For example, production staff might meet every other week to improve their processes while the executive team might meet monthly to review the status of the business and/or quarterly to review strategic plans.

Systematize your business to support the increased size and complexity that comes with growth.  Systemization covers every part of your business—how you communicate internally and externally; how you acquire, maintain, and update technology; and how you make decisions.  As your business grows, technology plays a larger and larger role in your success and planning your technology usage becomes vital.  Below are a few of our recommendations for planning your use of technology.

Maintain access to your core data.  Whether you use a custom system, an off the shelf software package, or a Cloud-based software platform, be sure that you can access your data how and when you need to.  This is particularly important if you decide to change software systems and need to migrate your data.

Choose technology (hardware and software) that can grow with you.  When your company first starts, a loose collection of laptops and cloud applications works to keep costs low.  As your business grows, migrating to business-grade computer and networking equipment becomes a must for reliability and maintainability.  The same goes for Cloud services such as Microsoft Office 365, which has more features and is more secure than Google Docs.  Finally, your information systems must also be robust enough to capture the increased complexity in your business as you grow.  Some applications that served you well as your business started may no longer be up to the task and you will need to migrate to new systems or build your own.

Ensure there is oversight of all of your technology.  As you grow, maintaining and managing your technology will become a full-time job on its own.  You will either need someone internal who is dedicated to the task or an external partner with deep technology experience that can maintain your systems and guide you through making, updating, and executing on your technology plans.

About Renaissance Information Systems

RIS guides businesses through growth by helping them build a culture of continuous improvement and systematization; selecting, implementing, and integrating the right software; and uncovering insights about their business through business intelligence.

As Vice President of RIS, Alex Meyer works closely with business leaders to translate goals into action, strengthen and streamline business processes, and make smart investments in technology that will support their long-term growth.

About NPI Technology Management

NPI Technology Management is a technology partner, strategic advisor, and problem-preventer. We make sure our clients have the right system and network, and, as these evolve, we help them stay ahead of the curve.

As the CEO of NPI, Eric Hart works with business leaders throughout the Northeast with their technology planning and execution. 

Asynchronous Written Communication Provides an Opportunity for Deeper Thought

My bi-weekly link collection, including: balancing charisma, delegating, and matching your customer service to your business

Asynchronous Written Communication Provides an Opportunity for Deeper Thought

Marrion Barraud presents a few insights he found when he began coaching using written language instead of voice after a diagnosis of ALS.  Initially, he was concerned that IM and email would be too slow to keep the conversation flowing. Fortunately, he found that "clients say they like having more time to listen, absorb, think, and respond during a conversation."  Personally, I prefer asynchronous communication for this reason in particular. I find that the natural delays in asynchronous communication provide me with time to process what was said and consider a response in a way that can be difficult to achieve in in-person conversations.  Ultimately, I think it results in higher quality communication as both parties have a chance to think more carefully about their response during the conversation.

Scaling up?  5 stages of customer service development to consider

In this article, Michael Redbord of Hubspot uses his experience to provide insights for developing your customer service model as your company grows in size.  Using five stages of company growth, he provides a detailed guide of what you should consider as you develop and grow your customer service function. To guide you in moving from stage to stage, he also provides tips for the process of scaling from one stage to another. From the excitement of your first sales to managing a high customer volume, this article will help you make key decisions as your customer service evolves to meet your company's changing needs.

Can you be too charismatic?

Apparently so.  Up to a point, charisma correlates with effectiveness in leaders.  However, high levels of charisma result in lower ratings of effectiveness for leaders.  Why?  Highly charismatic leaders tend to focus more on strategic leadership to the detriment of day-to-day operations.  As a result, these leaders may fail "in managing the day-to-day operations needed to implement their big strategic vision and in taking a methodical approach to getting things done in the near term."  It seems, as with many things, moderation is the key to success.  Jasmine Vergauwe finds that leaders with moderate levels of charisma and a balanced focus on strategic and operational priorities tend to be more effective.

Find your "inner lookout" to better manage your stress

Growing a business is hard work and with hard work often comes stress.  Recognizing and effectively managing your stress levels and reactions to situations around you is vital to success as a leader.  Erica Ariel Fox provides a few quick tips to help you use your "inner lookout" to see how you are reacting to a given situation so that you can make a conscious decision about your actions.  By using your inner lookout, you can identify your emotions and choose how to effectively respond, rather than react to stressful situations.  That's a path toward good leadership. 

Balancing Doing with Leading

As a leader or a manager, delegation is a key skill that will keep you sane.  As your company grows, you can't do it all and it's not in your best interest to try. Skillful delegation allows you to distribute responsibility across employees, creating stability- the work will get done even when you're not there - and enhancing employee engagement. To delegate well, 1) provide your employee(s) with context for the assignment; 2) fully define the scope of your expectations and discuss how they align with the employee's strengths and priorities; 3) discuss how you can best support their success. When new work needs to be assigned, consider your role using the same criteria, taking on the highest-valued contributions that you’re most skilled at making and then delegate the rest as appropriate.

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Good Custom Software Makes Data Easy

This is a guest post by Elizabeth Meyer, a retired executive director with 25+ years of leadership experience.

During my tenure as an Executive Director, my best software made it easy to get the data I needed, when I needed it.  And I needed data a lot.  I needed it to track service demand so that I could determine staffing needs and predict revenue, to justify funding requests to grantors, and to educate my community about critical issues.  Whether non-profit or for-profit, public or private, in today's world, every organization needs good data for management and marketing. As the organization changes, those needs change overtime. Therefore, your software needs to be designed to capture the information that is critical to your organization now and in the future and make that data accessible.  Access to your data allows you to investigate and explore the questions that drive your management and marketing.

When choosing software, consider the following:

Your software needs a robust database

All of the software we used to generate data had some form of database behind it. Some software products were better than others at generating the data we needed when we needed it. Those that did the best were built on a relational database model. These databases, if well designed, have the capability to answer just about any question that is relevant to the business function it serves. In a relational database, unique sets of data are stored in tables and the tables are linked through unique identifiers. Any data from any database that shares those unique identifiers can be subsequently be linked to the main database as new table. 

My best database was a custom database that was written in MS Access. The database allowed us to capture everything we needed to know about the many and diverse events we offered each year. Over time, we built a history in this database so that we could examine trends from multiple perspectives and test new approaches.  We could tell people what we were doing, how well we were doing it, and how much of a difference we were making. This database was built to last. As technology advanced, it was upgraded to newer versions of MS Access. As our needs and processes changed, our custom software developer, made changes in the application so that it could support our changing practices, while our underlying database was preserved.   

Your software should make it easy to extract information

Most database applications come with some level of built in reporting.  When database applications are not customized to your particular needs, it is unlikely that the built-in reports will meet your deeper and evolving needs.  It is just not possible for a developer who is developing a product for the mass market to integrate all of the questions you might ask for your specific business. Given that, if you are purchasing a software product, be sure that your software has a robust query builder for your ad hoc needs or the ability for a developer to write custom queries against the software's database.  

One of the key database applications we used was a specialized product developed for our particular industry but not customized for us.  It had a flexible ad hoc query function and could answer many questions fairly easily.  However, there were significant limits to its query ability that made it difficult and complicated to answer some of our most important questions. Again, our customized MS Access database beat this specialized software product with its flexibility and querying capability hands down. In fact, there were times when the easiest way to analyze data from the specialized application was to export data sets from it and create our own MS Access database from these exports. 

A good relationship with your software developer is essential

As I mentioned above, my best database was a custom MS Access database that changed and evolved with my organization.  This change was only possible because we had a long-term relationship with a software developer.  The software developer was our mentor, helping us learn how to make the best use of the database. Over time, the software developer learned our system and our business and was able to help us make changes to the database to ensure it continued to support us as we changed and evolved.  This partnership is vital and is only possible through continued partnership on the system over the long-term.

With all this in place, you can transform your data into information

The power of the relational database, especially one customized for your needs, helps you understand your business world in a way that is not otherwise possible. It makes it easy to capture important data and transform it into the information you need to drive decision making throughout your business.  While standard business needs (e.g. accounting) can be well addressed by packaged software and software as a service models, custom software is the best solution for managing the information that makes your business unique.

Contact us below to find out more about how custom software can help you get better information for your business!

Is Software Development a Craft?

My bi-weekly link collection, including: innovation, continuous improvement, and sales metrics

Is Software Development a Craft?

In some ways, yes.  In other ways, no.  The pursuit of perfection is one of the hallmarks of craftspeople.  When developers care about their work on a personal level, customers receive the best value.  The RIS model, where developers interact directly with clients, encourages this craftsperson approach and results in highly custom solutions to clients' exact needs.  As Dave Nicolette describes, the "end result is so much better than when the work is done carelessly by people who aren’t fully engaged with their occupation."

Use the "Third Way" Approach to Innovation to Deepen Ties with Existing Customers

In 2008, Gatorade was struggling to compete against Powerade, despite an aggressively expanded line of energy drinks.  However, Gatorade reinvigorated growth by expanding their offerings to pre- and post-workout nutrition products, which was an incremental innovation focused on their core customers' (athletes') needs.  This "Third Way," a product family approach to innovation, allows a company to deepen their ties with their core customers by providing more value and strengthening their core branding.  Instead of risky disruptive innovations, this style of innovation leverages existing strengths and relationships to power growth.

Incorporating Continuous Improvement (Kaizen) Into Small Businesses

We've talked before (here) about the importance of continuous improvement and how to incorporate it into small and medium businesses without necessarily adopting the full lean and/or six sigma frameworks that work well in large enterprises. For small and medium businesses, it is most important to foster a culture of "step-by-step improvement in productivity and quality, practiced by staff at all levels," ensuring that people feel needed, supported, and valued as individuals along the way.  Soliciting small ideas at staff meetings is a good place to start.  "Celebrate small ideas, wait for ideas to come even if this means a pause in discussion. Help your team realize they have two roles – doing their normal tasks and activities, and contributing improvement ideas."

Improve your Team by Improving their Feelings of Psychological Safety

Being able to admit when things aren't going right is part and parcel of continuous improvement.  Unfortunately, many cultures discourage admitting mistakes, making it less likely that everyone in the organization will contribute to improvement.  Laura Delizonna offers a few tips for improving psychological safety on teams:

• Approach conflict as a collaborator, not an adversary
• Speak human to human
• Anticipate reactions and plan countermoves
• Replace blame with curiosity
• Ask for feedback on delivery
• Measure psychological safety

Choose the Best Metrics for your Sales Team

The proliferation of metrics has led some management teams to measure everything.  The result is metrics overload.  "Managers don’t have a clear sense of what is really driving sales in their business" and salespeople are buried in dozens of metrics, unable to cut through the noise to use the metrics to impact their decision making.  The article suggests focusing on leading metrics (e.g. demos, web registrations, calls, or C-suite-level meetings), which offer "real-time feedback on whether salespeople are spending their time and efforts in the best way."

Senior Executives get Burnt Out Too

Countering burnout and ensuring that junior and mid-level employees love their job is a common focus in businesses.  However, it is just as important for senior executives to be engaged and love their jobs.  Jacob Morgan presents some of the ways that executives find meaning in their jobs and avoid burnout.

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How Much Will My Software Cost?

How much will it cost?  This is probably the most common question we get when talking with clients and prospective clients.  It's understandable.  Software development is often expensive and difficult to estimate.  People have been burned in the past by software that ended up not meeting their needs while simultaneously costing a lot of money.  That is clearly a recipe for trepidation when undertaking new software projects.  However, it doesn't have to be this way.  Below, we'll talk a bit about how software projects end up being more expensive than estimated and present a different approach to software development that can stretch the investment over time while resulting in software that better matches a business's needs.

The traditional style of software development, often referred to as waterfall development, involves gathering all the requirements for software at the outset, estimating how much it will cost to build each one, and adding them all together to get the total cost of the system.  Unfortunately, that total estimated cost is almost always wrong.  There are a host of factors that conspire to make those estimates inaccurate, but two of the major factors are:

• Users often don't know for sure what they want - They have ideas and visions, but those visions change as they see more of the software and start to interact with it.  This is in no way a bad thing, quite the opposite, it ultimately results in software that does more for users and is better fitted to their need.  Unfortunately, it's nearly impossible to account for at the start of a project
• There may be technical hurdles that are unknown before development starts - As much as developers would love to know every single corner of a programming language or technology platform, the truth is that they can't.  So, they do their best, based on their experience, to identify where they may encounter challenges and complexity.  But, as they say, you don't know what you don't know, and there are usually areas that are more difficult than anticipated.

We find that the main flaw in this approach to software development is that it treats the development of the system as a one-time event.  Get everyone together, build the system, deploy it, pack up and go home.  Job well done.  This simply isn't how business works though.  Consider, how many parts of a business can be done once and never considered again?  Very few aspects of business meet those criteria.  Instead, most areas of business require ongoing investment and continuous effort at improvement.  For example, marketing in a business is an ongoing process of interacting and communicating with customers.   Marketing is such an ongoing function that businesses typically allocate a significant percentage of their revenue to sustaining those activities (4%-24%, depending on the industry!).

We find that a similar approach to developing and maintaining information systems is much more effective than a one-time system development.  By making continuous investments in software systems, the systems can evolve and grow along with the business, keeping their functionality closely aligned with the needs of the business.

Here are three tips for changing how your business, develops, maintains, and ultimately benefits from its software.

Develop a software plan

Successful businesses make organized plans for their growth.  They have a business plan, a marketing plan, production plans, hiring plans, on and on.  One of those plans should be a software or technology plan.  This plan should identify the impact that all the other plans will have on the needed functionality of the business's technology and identify what is needed to make sure the software can meet those needs.  We wrote in more detail about developing software plans in a previous post.  If you don't have a plan and are not sure where to start, we can help you identify your technology needs and develop a plan to meet them.

Set your budget

Consider how much you should be investing in your software on a regular basis.  While there is more variability in technology investments than in marketing investments, you should determine what is appropriate for your business.  A few of the premium research services (e.g. Gartner, Computer Economics, and Forrester) provide extensive research if you want to benchmark.  However, you can also use a bit of trial and error to zero in on the appropriate budget for your business.  The most important aspect is to commit to the continuous investment in your information systems so that they contribute rather than hinder your success.

Find a trusted partner to implement the plan

Developing and maintaining software requires consistent partnership with the person or team developing the software.  The developer must understand your business, your strategic goals, and how your business is changing.  With that knowledge, they can work closely with you to continually refine your software plan and continue to evolve your software to meet your needs.  Your partnership may be with an internal software team (or person) or may be with an external development team.  Success can be had either way.  If you are not sure whether internal or external developers are best for your business, keep your eye out for our future post on choosing between an in-house development team and hiring an outside team.

If you're not sure where to start with your technology or what your next step should be, contact us below for a free consultation.