Ian Portsmouth: I
Ken Tencer: K
I: Welcome to the Business Coach Podcast, an advice-oriented series that tackles the top issues and opportunities facing Canada’s small businesses. I’m your host, Ian Portsmouth, the Editor of Profit Magazine. And we’ve developed this podcast in cooperation with BMO Bank of Montreal.
Expansion is the dream of many business owners but wanting and doing are two very different things. That’s why Ken Tencer and John Paulo Cardoso have written the 90% Rule, using entrepreneurial thinking to inspire innovation and growth. They are the co-principals of Spyder Works, a growth strategy and design firm based in Mississauga Ontario and Ken Tencer, the CEO of Spyder Works joins me on the line to discuss how to grow your business smartly and successfully. Ken, welcome to the Business Coach Podcast.
K: Thank you for having me.
I: So many businesses stagnate or simply die due to the lack of diversification and expansion. Other businesses get into trouble because they don’t stick to their knitting. Why is diversification and expansion such a difficult thing?
K: I think people hear the word diversification on its own and they start to think, you know, I’ve got to do something new, I got to grow almost at any cost. And that can mean that they start to get into new products and new markets. So I like to associate different words with diversification, words like next step and logical because it helps companies to focus on what they are already great at. So from there, they can better understand what they can or should do next. And I mean, if you look at Apple, and they are in the news all the time these days, they are just such a great example for knowing what their core business is. And I have always seen that has designed driven personal technology and that’s helped them to move seamlessly from days like computing to the iPod, the iPhone and now the iPad.
I: And I think that brings us to the next question, what is the 90% rule, what does that mean?
K: It’s truly about building on what you’re already 90% capable of achieving. I mean, essentially, it’s about evolution and evolution is a growth strategy, no revolution, so that you’re sustaining growth and doing so at lower cost with lower risk. And I first figured this out when I co-founded and was growing a personal body care company. We would always ask ourselves how we could grow without using or risking huge amounts of money, because like most entrepreneurs, we just didn’t have huge amounts of money to spend. So we started focusing on things like shampoos and conditioners for women and then we expanded into the teen, tween and male market. And then we look at new verticals like head products and then homecare products liquid based. So really, we are just learning or teaching ourselves to leverage our current equipment, inventory and expertise into these new markets.
I: So opportunities for sales and expansion are everywhere. What are the key differences between a good opportunity for a business and a bad one? That is something that many business owners and managers have trouble distinguishing between.
K: Well, I like to say that a good opportunity is one that is relevant. And you know, you have to figure out which ones are most relevant to your company. And to be able to do that, we figure you have to assess them against pre-determined criteria. And I just don’t think that most companies today take the time to sit down and figure out what these criteria should be. And we tell our customers to focus on three key areas when developing their criteria. One is global such as understanding, you know, your company’s vision, mission or position. The second set of criteria would be market related such as sales and marketing. And the third obviously would be financial. So the process we go through is to choose only two different criteria from each of these areas. And this way, you know, you’ve got this litmus test so you can tell, which are the best opportunities to match your current strategy and resources. And it brings a lot of discipline and rigor to the whole process of assessing what is a good or bad opportunity for your company to pursue.
I: Now, one chapter in your book covers exploring what you can be, not what you are. Explain the thinking behind that.
K: What it really means that our process is not a cosmetic one. It makes our customers, you know, really think about what their company and brand stand for and what level they can take it to. And when we go through, we settle for nothing short of answering how they can change their customers’ lives, what real impact they can have on them. Because it forces the company to move pass the traditional features and benefits models to go into personification and impact exercises. And there is one great example that I have always used and it is a quote by Charles Robson, [inaudible 0:04:22.5] said: “We’re not in the business of manufacturing cosmetics, we’re in the business of selling hope.” And to me, that’s just a really powerful statement of understanding what that company is about and what it can be in the future.
I: What are some of the more common obstacles to the innovation and re-imaging that sustainable and profitable growth demand?
K: Well, there is a common obstacle there, as we say, the barriers to innovation or what I call the idea killers in the room and it soon happens when people put their hand up and say, you know, that’s going to cost too much or it’s going to take too long. I always tell them, you know, you got to get past it because innovation doesn’t start with money, it doesn’t start with resources. It starts with an open positive state of mind and a focus process and one quote I always share with people: “Discovery consists of seeing what everybody is seeing and thinking what nobody has thought”. So here again, the is key this open-minded process making innovation part of regular meetings that recognize that it truly is as important as sales and marketing to your company. Because really innovation drives sales and marketing. But I am finding today that so many companies leave [inaudible 0:05:27.6] to their annual corporate retreats and our experience shows that that leads to an abrupt retreat in sales.
I: The other side of the coin is the impulsive manager or the impulsive staff member who wants to chase after everything. And those opportunities that people chase often don’t serve the long term wants and needs of a company. So, how can bosses control that and themselves and how can they control that organizationally?
K: The key again is establishing criteria that help you do identify the opportunities you should be pursuing and to do that in a group. I mean, innovation, it’s a team sport, everyone should be involved in determining and establishing the criteria and then understanding them better. And also again, remember that the criteria that they necessarily have to select from our process are all encompassing that they focus on driving profitable sales, clearly focusing on customer needs and also keeping with you know, the long term vision of your company. So, by identifying and working with these criteria as a group, you eliminate what we call the rouge innovator and you keep everyone focused on those logical low-risk opportunities.
I: Ken, that’s great stuff. Thank you for joining the Business Coach Podcast.
K: Thank you so much.
I: Ken Tencer is the CEO of Spyder Works, a growth strategy and design firm based in Mississauga Ontario and he is also co-author of a new book called The 90% Rule, using entrepreneurial thinking to inspire innovation and growth. If you would like to learn more about the 90% Rule or order the book, you can visit 90percent.com
That’s it for another episode of the Business Coach Podcast. Be sure to check out other episodes which you can download from BMO.com, profitguide.com and iTunes. For other tools to help you build your business, visit BMO.com/coach. Until next time, I am Ian Portsmouth, the Editor of Profit Magazine, wishing you continued success.