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Turning Your Best Business Ideas into Actions, Part I

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Turning Your Best Business Ideas into Actions, Part I

How electrical distributors can take their best cocktail-napkin ideas and transform them into initiatives that help push their companies forward.  

 

Not enough ideas and your business stagnates. Too many and something similar happens, but with the end result being “analysis paralysis,” or spending so much time trying to figure out if those ideas will work that you lose sight of why you even brought them up on the first place. Somewhere in the middle of these two extremes is a happy medium where the best business ideas are culled down to a svelte few and put into action.

The problem is that converting ideas into reality isn’t always easy, and it’s especially challenging when business is brisk and everyone is busy. Innovation gets put on a backburner as managers and employees focus on putting out daily fires and meeting customers’ needs. Without a dedicated plan for developing, sorting through, and then picking the best new ideas to implement, those initiatives can quickly fall by the wayside.

Making sure this doesn’t happen requires both invention (the new idea) and innovation (the successful exploitation of that idea). For an electrical distributor, the focus may be on improving or upgrading business processes; developing new services that meet customers’ needs; adding value to an existing offering; or making a few small, incremental changes that add up to real results.

Putting the Customer First

Whatever the idea is, the key is to put the customer at the center of it. “Electrical distributors have one common purpose:  serve their customers profitably,” says Joe Raventos, president of distribution software firm Sales Management Plus. “The best customers have two very important characteristics: profitability and frequency of orders.”

For example, an electrical distributor may want to create a loyalty program for customers that have both high profitability and predictable frequency. Or, maybe the distributor has a sizeable customer group that places large and profitable orders, but infrequently—a clear sign that it may be time to “get to know” that customer a bit better. Maybe you don’t fully understand its business model and needs, or maybe it doesn’t understand yours (or, a bit of both).

“In most cases, the distributor will probably find that those customers work with multiple competitors and that they could be open to working more closely with that distributor if it understood their business a little bit better,” says Raventos. “Ask questions about how you can better serve them and earn more of their business, and then share stories of how you’re helping and supporting your other customers.”

Put it in a Grid

To help distributors prioritize their business ideas and whittle them down to only the best ones, Matthew Turner, founder of the Boston Turner Group and a marketing professional who worked for NxTrend, Infor Distribution Group, and Accellos, says one of the best tools is a weighted grid analysis. Here’s how it works:  List out the options you’re considering as priorities as vertical rows in a table, and then use the criteria for importance as the horizontal column headers (e.g., profitability, customer loyalty, ease of implementation, etc.).

Let’s say you’re deciding whether to attend a trade show, invest in new email marketing, and/or hire a new customer service rep. Assign a score to each option for each idea. Maybe the trade show is low in profitability and ease of implementation but high on customer loyalty, for example. On the other hand, a new service rep is low on profitability, high in customer loyalty, and a medium score in ease of implementation.

“Whichever option scores higher should be a higher priority,” says Turner. “You can then weight each criteria separately. For example, maybe profitability is twice as important to you as ease of implementation, so multiply the individual scores in that column.”

Here’s what your grid might look like:

Profitability Customer Loyalty Ease of Implementation Score
Trade Show 1 5 1 7
Email 5 2 2 9
Rep 2 5 3 10

As you can see, in this situation the addition of a new customer service rep will deliver the highest value for this particular distributor. Turner says the exercise goes beyond just ranking ideas and actually helps to drive good decision-making across the company. “You’re creating a framework for your entire team to be able to make good decisions,” says Turner, “by choosing criteria that’s important to your company.”

From 50 ideas to Just Three

In a business environment where distributors operate on thin margins, and where the next competitor is just one screen tap away, the company that comes up with and that acts on new ideas can get out in the front of the pack. That is, if it’s not bogged down by too many ideas—or not enough good ones.

To get on track, Balazs Hajde, content manager at Authority Hacker, says distributors should focus on implementing just three ideas at a time.

To get your current list whittled down, look at your company like the human body, Hajde recommends, understanding that there are certain functions that must be maintained in order to keep that body running well (e.g., blood flow). Then there are things you can improve on, but they don’t necessarily cause any harm when left alone for a while (i.e., muscle mass). Finally, there are purely cosmetic areas (nails, hair, etc.) that can be ignored if necessary.

“A business is similar,” says Hajde. “For example, revenue, profits, and logistics are all the literal blood and oxygen of your business. Any issue there is almost always an emergency, or a ticking time bomb.” Going down the list, activities like marketing, employee training, and research and development are all important, “but there is some leeway in how much damage they can take before the issues become critical.”

Hajde tells electrical distributors to identify and structure the most important areas of their businesses first, list all of the ideas related to those areas, and then prioritize them in the context of that structure. If, for example, any of the essentials are in jeopardy, then those should be priorities by default.

“The rest you can judge based on a variety of factors, such as how much money your distributorship is potentially missing out on by not developing the idea,” says Hajde, who cautions companies not to overwhelm employees with too many ideas at once. Instead, focus on three that can be actually implemented and put into action within a specific timeframe.

“The focus is what matters here; you’re not discarding your ideas, you’re prioritizing the most important ones,” Hajde says. “Concentrating on one or two goals at a time will get you over the finish line faster, giving you more space to work on your other 47+ ideas.”

 

In Part II of this article series, we’ll take a deeper dive into the strategies that distributors can use to engage their employees in idea generation, whittle down their lists of new initiatives, and pick the ones that translate into real business growth.

 

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Bridget McCrea  is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at bridgetmc@earthlink.net or visit her website at www.expertghostwriter.net.

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