Charting your course

October 17, 2017 -  By
Photo: ©istock.com/MicroStockHub

Photo: ©istock.com/MicroStockHub

Decide what business choices to pursue based on your passions.

Fall is an ideal time for green industry companies to review and update their plans for the future. Which services should you add, grow, shrink or eliminate? Which customer segments should you target or move away from? Which geographic areas should you operate in? Which services should you perform or subcontract? How fast should you grow? What do you want your business to look like in three, five and 10 years?

Strategy is all about making choices, deciding what to pursue and what not to. This can be challenging because of the many available opportunities. So, how do you make sense of all the options and chart a course that’s right for you? Let’s look at some ideas that can help guide the way.

A starting point is to clarify your passions. When pursuing them, you have more energy and focus, which results in better outcomes. You tend to be happier, more successful and usually earn more money. Best of all, working never feels like work if it’s aligned with your passions.

Earlier in my career, I read an interesting book, What Color Is Your Parachute? by Richard Bolles, during a soul-searching time when I faced a critical career decision. For the first time, I was clear about how my passions and career could align. I highly recommend the book, which has sold more than 10 million copies in 28 countries.

When determining your business strategy, it’s important to focus on your passions. What you do every day—the services you provide and the customers you focus on—will feed your passions or it won’t. This is your choice. Why would you choose to do anything but what excites you the most? Life is too short to pursue things you don’t really care about, right?

One of the great things about the green industry is the variety it provides in terms of potential services you can offer. However, without understanding and aligning those with your passions, many companies fall into the trap of trying to do too many things. When this happens, performance and profitability decline, and reputations suffer. Selecting the right service mix for you and your business is a critical strategic decision.

Think about the various customer segments in the green industry. Take retail space, for example. There are high- and low-end retail properties, enclosed shopping centers, strip malls, lifestyle centers—big, small and everything in between. The same applies for office, industrial, medical and municipal markets. In the residential segment, there’s a similar list of choices. What to pursue, and what not to?

The service-segment matrix is a great tool to help you focus on your strategic decisions. This matrix is simply a chart with the services you offer listed on one axis and your customer segments on the other (see chart A). For each service segment, show this year’s revenue in terms of dollars and percent of total revenue. If you’re not comfortable projecting this year’s revenue, show last year’s. This first step provides you and your crew with a nice, clear snapshot of where you are today.

Next, think about the future. What do you want this service-segment matrix to look like next year, in three years or in five? Select a time frame to focus on and get to work. What changes would you like to see? Which service segments should be added or increased? Which should be eliminated or decreased? Avoid the temptation to answer “I just don’t know.” While that might be true, it’s not helpful.

Developing a plan requires an element of uncertainty. Having a vision of the future doesn’t mean there won’t be unknown factors, surprises or risks. There’s value in sharing your vision to provide leadership with charting a course, inspiring others and laying a foundation for more detailed goals and objectives to be laid out. Unless you know where you’re headed, you won’t know where to begin.

Looking at the service-segment matrix again, it’s also helpful to look at gross profit and margin and net marketing contribution in addition to revenue. It’s good to know if there are service segments that are unprofitable or highly profitable as you formulate your plans.

Hedgehog concept

Another interesting book is the best-seller Good to Great by Jim Collins, who outlines the hedgehog concept, which simply states that businesses should only focus on what they’re most passionate about, what’s profitable and what they can be the best at in the world. We’ve already discussed the first two items in this article but not the third, so let’s take a quick look.

Being the best at something is what we all should strive toward. This desire springs out of our life’s purpose and is closely aligned with our passions. However, it’s not the same as our passion. I love playing hockey, but I’ll never be the best in the world at it. I knew that even as a kid, so I didn’t select it as a career path. Who wants to get out of bed every day with the ambition of being just good enough, or below average, in his career? How depressing would that be? Rather, we want to aspire to be great at whatever we’re called to do with our lives. This is the third leg of the hedgehog concept.

Next year will be here before you know it, so now’s the time to put your plan on paper. Use the service-segment matrix to guide you. Apply the hedgehog concept to help you find the intersection between your passions, what’s profitable and what you can be the best at.

Now go forth.

Photo: ©istock.com/MicroStockHub

This article is tagged with , and posted in 1017, Business Planner 2018
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About the Author:

Harwood is a Managing Partner with GrowTheBench and Pro-Motion Consulting. Reach him at Phil@GrowTheBench.com. He is a Landscape Industry Certified Manager, NALP Trailblazer, NALP Consultant, and Certified Snow Professional. Harwood holds a BA in Marketing and Executive MBA with Honors from Michigan State University.

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