4 1/2 Ways to Manage Risk in your business

4 and a half Ways to Manage Risk

Every business faces risk. How companies manage risk will generally determine a company’s profitability, competitiveness and longevity in their markets. Business leaders must assess the risks that their companies face and then manage the risks so that they don’t negatively impact the business. The goal of managing risk is to turn uncertainty to the company’s benefit by constraining threats. There are 4 ½ ways to manage risk.

The 4 ½ ways to manage risk in your business are:

# 1  Tolerate the risk

The exposure to the risk may be tolerable without any further action being taken. Even if it is not tolerable, ability to do anything about some risks may be limited or the cost of taking action may be prohibitive. Once you have assessed what the potential financial impact that this risk can have on your business, determine the cost to negate that risk. If the cost to fix or contain the risk is greater than the total impact to the business, then tolerate the risk. This first option is possibly the least expensive solution that your company might have and it should be the first step in deciding how to handle the risk.

# 2  Treat the risk

This is the way that most risks will be treated. This is where an action is taken to constrain the risk so that the risk is at an acceptable and tolerable level. If you can’t tolerate the risk, then the second option is to take action and spend the capital or deploy the resources to mitigate the risk. Monitor the costs associated with bracketing this risk and then confirm that the measures implemented to treat the risk are effective and responsive.

# 3  Transfer the risk

For some risks the best response it to transfer them. This might be done by conventional insurance or it might be done by paying a third party to take the risk in another way. This is a great method for mitigating financial risks or risks to assets. One of the simplest forms of transferring the risk outside of the insurance solution is to determine if one of your supply chain partners has the capabilities to manage the risk more effectively than your company does. If they do, then consider modifying your agreement or scope of work with them so that they can manage the risk for you. You might end up paying a bit more for their work but the cost could be significantly less than what your company would have had to pay to solve this risk problem.

#4  Terminate the risk

Some risks will not be treatable, or containable to acceptable levels unless you simply terminating the activity. Therefore, if all other methods are not viable then it is time to cut your losses and terminate the risk.

# 4 – 1/2     Take the opportunity

This option is the ½ option and it falls under the category of the best defense is a good offense. It might also be seen as a hedge. If you see can generate enough capital to weather the risks that your business faces, then consider taking advantage of opportunities to build the hedge that you need to conduct the business and continue taking calculated risks knowing that you have some gas in the tank in the event that things go wrong.

Understanding and applying these 4 ½ ways to manage risk for your business should be a high priority when it comes to leading and managing your business. Take the risks necessary to conduct business. If they are assessed and managed well then they should not threaten your company’s financial or operational stability.


Posted in Business Management by Mack Powers. No Comments

Do you have a PLAN to win?

business strategy

Do you have a Plan to Win?

Do you have a PLAN to win….  No seriously.  What is your PLAN to win in business during the next year?

“Winning” lessons learned on the soccer Field

About 20 years ago I was asked to take over as the head soccer coach for a team of 12-year old boys.   This team had finished in last place or second to last place during the previous three seasons.  Despite this fact, I gladly accepted the challenge of coaching this team.  I had been the assistant coach for this team and I knew that the kids had talent.   My goals as the new head coach were to:  1) help the kids develop a love for soccer; 2) help the players improve their individual and team skills; and 3) TO WIN THE POST SEASON TOURNAMENT.

Winning the post season tournament was a BHAG (Big Hairy Audacious Goal).  However, with the proper strategy and a full season to train and educate the kids regarding the finer points of the game, I felt that I had a fighting chance of achieving this BHAG. During that season, I taught the kids how to love the sport and how to improve individually and as a team.  During that season, when playing the better teams, I also took specific notes regarding the strengths and weaknesses of each of our opponents.  I focused particularly on the first place team from the previous seasons.

It was time for the tournament.  We made it to the final game and we were playing the number one team in the final championship game. To beat this team, I had to have a winning strategy.  My tournament strategy was to abandon some of the conventional ideas regarding the typical positions that each player would play during the match.  Instead of lining the kids up into the traditional positions (forwards, midfielders, defenders etc.), I took my two worst players and had them play man to man on the two best players of the other team.  Even though my two worst players weren’t great soccer players, they were great athletes and they were able to track the two stars on the opposing team every step of the game.  The result, we were able to neutralize the two best players on the other team.  Now, I had my 9 BEST players playing the 9 WORST players on each opposing team.  With this match up, were able to soundly defeat the number one seeded team and win the tournament.  What allowed me to accomplish this goal?  I had a strategy to win.

“Winning” Lessons learned from a CEO

A.G. Lafley is a business strategist who has been a winner in business throughout his entire career.  As the Chairman of the Board, President and Chief Executive Officer of Procter and Gamble, Lafley has proven that he knows how to win in business.  Recently, Lafley and Roger Martin have published a book entitled Playing To Win: How Strategy Really Works.  In this book, Lafley and Martin have created a set of five essential strategic questions that, when addressed in an integrated way, will move you ahead of your competitors.  Martin says he wanted to write it because he was perplexed that people say, “Oh, no, we’ve got to do a strategy exercise — it’s so complicated, so much work, and we’re not sure what we’ll get”.  But, according to Martin, it can be simple, fun, and effective. Lafley adds, “I’m surprised by how few people can say what strategy is. So we tried to create a do-it-yourself book for managers and leaders.”

5 Questions to ask yourself about your plan to win

In the book, Lafley and Martin lay out the five questions that every business owner should ask themselves:  These questions are:

1) What is our winning aspiration?

2) Where will we play?

3) How will we win?

4) What capabilities must we have in place to win?

5) What management systems are required to support our choices?

How well can you answer these questions regarding your business?  Are you confident that you are winning all of the business that you should be?  If you can’t clearly answer these questions, then maybe you aren’t winning as much as you could.  To learn more about how to win in business check out the summary of  A.G. Lafley and Martin’s book at Business Strategy

Posted in Business Stategy by Mack Powers. 1 Comment

How to change Bad Habits | TEDx Video of Expert Charles Duhigg

Change Bad Habits - Duhigg

Change Bad Habits – Charles Duhigg


How much are good and bad habits affecting your life and business?  Do you have great habits that allow you to exceed goals and self expectations?  Maybe you are trying unsuccessfully to change bad habits that cause you to under perform?  Charles Duhigg, a Pulitzer Prize winning author, has good news for you.  In his book The Power of Habit: Why we do what we do in life and business (and the video below), Duhigg clearly explains how we can modify our behaviors (change bad habits) to accomplish the goals that we set for ourselves and achieve happiness and satisfaction in life.

Mr. Duhigg has received a number of awards, including the George Polk Award, The Scripps Howard National Journalism Award, a Loeb Award, the Investigative Reporters and Editors’ Medal, the National Academies’ reporting award, the investigative reporting award from the Society of Environmental Journalists, the 2009 Science in Society Journalism Award, and recognition from the American Association for the Advancement of Science, Columbia University the Deadline Awards, and elsewhere.

Before joining the New York Times, Mr. Duhigg was a reporter with The Los Angeles Times. A native of New Mexico, he studied history at Yale and received a Masters in Business Administration from Harvard Business School.

In the TED(x) video below, Duhigg states “Each habit consists of cues and rewards.  If you engage in mindfulness where you are aware of what is driving the cues and rewards in your life then you have the ability to change any habit that you have”. In this 15 minute video Duhigg relays strategic findings on habit formation and the psychology and neuroscience that drives changes in behavior. With this knowledge you will learn how to change bad habits and replace them with good habits.

Check out the video and then “change the habits” in our life.  You can do it!

Posted in Personal Development by Mack Powers. No Comments

3 More Reasons Why Customers Don’t Buy!


Why Customers Don’t Buy

Losing a sale can be a painful experience.  You identified your potential customer.  Then you spent hours, days or weeks engaging the client.  Finally, you proposed a solution.  All of these efforts consumed time and energy that you could have been spending with another potential customer who would have purchased from you.  It just hurts (and costs!) to lose a sale.  To avoid future pain and the financial loss that comes with it, consider why you might have lost the sale

You might have seen my first Three Reasons That Customers Don’t Buy blog post on the Xoombi.com website.  If you haven’t, then see the link at the bottom of the page to find three additional reasons that your customers might not be purchasing from you.

  1. No apparent urgency – As a salesperson you should learn to love deadlines. Look for them.  If your customers have deadlines and they need to achieve results by a given date, your chances of providing a solution to them will increase greatly. Accounting software salespeople know that they will see seasonal increases in sales in the months leading up to the end date of a company’s fiscal year. This is because their prospective customers will often need to purchase software to get their books organized prior to the end of their fiscal year.  Immediately following the close of that year they will need to generate year end financial statements for the stakeholders of the companies, banks, insurance companies etc.  Find customers who have deadlines and position your offer to them in a timely manner that coincides with the buying cycles that are imposed by the deadlines.  If your customers don’t have natural deadlines such as a year end close, then create deadlines.  Make them discounted offers that expire on a given date.  People will want to realize the savings that you are offering and they will purchase now, rather than later, if they know that the opportunity will disappear.
  2. The purchasing process was too difficult – Some companies make it to difficult to purchase from them.  When it isn’t easy to purchase from a company, customers will take their business elsewhere.  I used to purchase items occasionally from Radio Shack.  When going in their store to purchase batteries or something simple, I remember that it would take about 3 minutes to fill out the paperwork just to purchase something as benign as batteries.  Why wouldn’t they just let me hand them cash and then take the batteries.  As a result, I quit purchasing from them regularly.  Those purchases were a decade ago and I still remember those encounters years later.  Find out ways to make “the process” of doing business with you and your company as simple as it can possibly be.  Many of your customers will purchase where the path of least resistance to the solution is offered.  Position your company and solution at the end of that path.
  3. Your offer wasn’t clear enough.  Every offer must be clear.  Check the following list to make sure that your offers answer the following questions. These are just a handful of questions that your customer might be thinking but not asking.  If they don’t ask, and don’t get the answers, they might not make the purchase.  Increase your chances of closing this business by making a clear offer.
    1. What is the scope of your offer?  What is included, what is excluded? Don’t go overboard.  Just make sure that most of the reasonable questions are answered in the scope.
    2. What other items will be required of your customers before you can close the transaction.  i.e. a credit check, a signature of the proposal.
    3. What are the next steps after the order is placed
    4. How long will it take to receive the solution that is being offered.
    5. Is there any additional instruction that I will need in order to receive the full benefit of the solution.

Improve the clarity of your offer and increase your sales.  To see my first post on Three Reasons That Customers Don’t Buy.

Posted in Selling Skills by Mack Powers. No Comments

Six Questions to test and IMPROVE your Value Proposition

Test Your Value Proposition

Test Your Value Proposition









Every company must have a Value Proposition (VP) to compete profitably in business.  I layout a very specific definition and guideline for building a winning value proposition here.  After building your VP test how effective it is by answering the following questions.  If you need help revamping the VP then check out the link above to re-engineer your value proposition to increase profitable revenue.

  1. How obvious is your value proposition?
  2. Is your value proposition specific?
  3. Is your value proposition succinct?
  4. Will people actually remember your value proposition?
  5. Is your value proposition strong enough and clear enough to cause someone to chose your business AND your product over that of your competitor?
  6. Does your value proposition make a clear case that your client WILL NOT get the same level of value from any of your competitors?

How do you feel after reading these six questions?  Did you grade yourself well?  If not, click the link above and get to work.  If so, great work.  I would love to hear any comments that you have about how to build a strong value proposition or any additional questions that you would use to TEST a value proposition.


Posted in Selling Value by Mack Powers. 2 Comments

How to build a Winning Value Proposition

value proposition

How to Build a Winning Value Proposition

Every company and every product or product line within that company needs to have a value proposition.  Without a clearly defined (and current) value proposition, your company will have anemic revenue growth.  However, for companies that take the time to understand, craft and then engage the market with sharpened and relevant value propositions, success and revenue growth will follow.

Dr. Flint McGlaughlin of www.MECLABS.com does a great job articulating some key facts regarding value propositions.  He says:

“A Value Proposition is creating a statement that answers the following question:  Why should your prospective customers and (existing) customers purchase the product or service that you offer rather than making that purchase from one of your competitors. It’s that simple.

It is a clear and concise definition of what your company can offer your customer that your competition cannot.  All sales and marketing efforts for companies get their greatest returns when they promote the messages that clearly operate on this level.

A good value proposition clearly and efficiently communicates the value of your company and/or their products and services in such a way that the customer is motivated to respond to your call to action.”

Consider the following action items that you should consider completing after reading the quote above.  These tasks require WORK but having completed them, you will be ready to craft very effective value propositions for your business and products.

  1. Define who your primary competitor is.
  2. List the products offered by your competitor that will compete with the products that your company sells.
  3. Make a list of everything that your competitors businesses do that makes them successful.  This will be the Business Value List.
  4. Make a list of everything that your competitor’s products have that make them (the products) desirable.  Make a separate list for each product that you want to compete with.  Product Value List
  5. Define what it is that your competitors do poorly.  This is the Business Detractor List
  6. List the inherent flaws that your competitor’s products have.  This is the Product Detractor List.
  7. Make the same lists for your company and products as noted in points 3-6.
  8. Place each of the lists created in lines 3-6 side by side and analyze what the strengths and weaknesses are between your company and your competitor.
  9. Place each of the lists created in lines 3-6 side by side and analyze what the strengths and weaknesses are between your products and your competitor’s products.
  10. Complete the above steps 1-9 for each of your competitors (I feel your pain… this is a monumental task)
  11. After reviewing conducting the analysis:
  • Define the value proposition for the company.
  • Define the value proposition for each product and service that your company sells.

The steps above represent a significant investment of time.  However, the return on investment will be high.  Would you rather cut down a tree with a sharp ax or a dull one?  The work described above IS “sharpening the ax”.  Invest the time on these steps and you won’t waste your time bringing a message to the market that is forgettable, non-competitive, non-actionable and costly.  Let me know about your successes using this formula.

Now that you have created a value proposition, consider asking yourself the following questions to TEST your Value Proposition.


See more about having a Competitive Advantage in Business.

Creating Value will give you FANS!

Playing to win:  A look at business strategy


Posted in Selling Value by Mack Powers. 2 Comments

Playing to Win: A Look at Business Strategy

According to A.G. Lafley, the formerly retired and recently re-instated Chairman of the Board, President and Chief Executive Officer of Proctor and Gamble, most companies have a vision statement and a mission statement but most companies don’t really have a strategy.  Companies that have strategies are companies that win in business.  A.G. Lafley knows exactly what he is talking about when he makes that statement.  Lafley previously served as P&G’s President & CEO from 2000 to 2009. During this time, the Company more than doubled sales and grew its portfolio of billion-dollar brands from 10 to 23 with a focus on consumer-driven innovation and consistent, reliable, sustainable growth. The Company’s market capitalization has made P&G among the 10 most valuable companies in the world.

A.G. Lafley, co-author of the book Playing to win: How Strategy Really Works, answers the following  question in his book: What is the Fundamental measure of winning?  His answer is summarized in the six questions below.  Winning, according to Lafley, is being able to answer the following six questions in a positive manner.

  1. Am I creating a customer?
  2. Am I creating more customers?
  3. Are my customers more loyal to me?
  4. Do they love my product more?
  5. Do they love my service more?
  6. Do they think that it is a better value than what the market offers?

Check out this short video loaded with wisdom and advice for more insight from Lafley regarding how to win in business.



The High Level Summary of this book is:

Winning CEO A.G. Lafley is now back at the helm of consumer goods giant Procter & Gamble. If you want to know the strategy he’ll use to restore P&G to its former dominance—read this book.

Playing to Win, a noted Wall Street Journal and Washington Post bestseller, outlines the strategic approach Lafley, in close partnership with strategic adviser Roger Martin, used to double P&G’s sales, quadruple its profits, and increase its market value by more than $100 billion when Lafley was first CEO (he led the company from 2000 to 2009). The book shows leaders in any type of organization how to guide everyday actions with larger strategic goals built around the clear, essential elements that determine business success—where to play and how to win.

Lafley and Martin have created a set of five essential strategic choices that, when addressed in an integrated way, will move you ahead of your competitors. They are: (1) What is our winning aspiration? (2) Where will we play? (3) How will we win? (4) What capabilities must we have in place to win? and (5) What management systems are required to support our choices? The result is a playbook for winning.

The stories of how P&G repeatedly won by applying this method to iconic brands such as Olay, Bounty, Gillette, Swiffer, and Febreze clearly illustrate how deciding on a strategic approach—and then making the right choices to support it—makes the difference between just playing the game and actually winning.

Playing to Win outlines a proven method that has worked for some of today’s most celebrated brands and products. Let this book serve as your new guide to winning, as well.

Also, check out an additional post (and Video) on the subject of business strategy and Competitive Advantage by Rita Gunther McGrath of the Columbia Business School.  McGrath is globally recognized expert on strategy in uncertain and volatile markets and she is the author of numerous publications and awards for her scholarship and work.

Great Quotes by Peter Drucker

How to build a winning value proposition

Creating Fans instead of Customers




Posted in Business Strategy by Mack Powers. 3 Comments

Great Quotes by Peter Drucker


Peter Drucker was a revolutionary business thinker!


“Management is doing things right; leadership is doing the right things.”

“The best way to predict your future is to create it”

“The most important thing in communication is to hear what isn’t being said.”

“If you want something new, you have to stop doing something old”

“Unless commitment is made, there are only promises and hopes; but no plans.”

“Efficiency is doing the thing right. Effectiveness is doing the right thing.”

“The purpose of business is to create and keep a customer.”

“Whenever you see a successful business, someone once made a courageous decision.”

“The leaders who work most effectively, it seems to me, never say “I.” And that’s not because they have trained themselves not to say “I.” They don’t think “I.” They think “we”; they think “team.” They understand their job to be to make the team function. They accept responsibility and don’t sidestep it, but “we” gets the credit. This is what creates trust, what enables you to get the task done.”

“No one learns as much about a subject as one who is forced to teach it.”

“Business has only two functions — marketing and innovation.”

“People who don’t take risks generally make about two big mistakes a year. People who do take risks generally make about two big mistakes a year.”

These are some great quotes by Peter Drucker  !!!!   If you have more that you would like to send to me, that would be great!


Posted in Quotes by Mack Powers. 3 Comments

Understanding the Definition of Value will allow you to create Fans instead of Customers !!!

It is important for every business to understand what value that they bring to their customers and their markets.  Before I share with you a FANTASTIC example of what great value is, let’s review first how Webster’s summarizes the definition of value.

Webster’s definition of value:


 noun \ˈval-(ˌ)yü\

: the amount of money that something is worth : the price or cost of something

Webster’s might provide us with the definition of value but id doesn’t clarify how value in a marketplace should be measured and how understanding how to create value will drive business growth.

Consider this:

“To be successful in building a business and establishing year over year growth in your business, you might consider that “business value” is delivering MORE value with your products and services than the price or cost that your customers paid you for those products and/or services.”

Your first thought might be, “won’t we go broke if we deliver MORE  than the cost of the product”.   Consider this… when determining the cost of the product you not only have to figure the cost of materials, direct labor, overhead etc. into the cost of the product but also the cost of sales.  The cost of sales can be a very high percentage of the cost of any product or service.  So, if you could create a product where the cost of sales was negligible or zero, then your profitability would increase rather than decrease.  How do you do this?

Simple:  you create so much VALUE that you don’t create a customer,  YOU CREATE A FAN!!!  When you create a FAN (not just a customer) that “raves” about your product and tells other people how much they love your company then your cost of sales will go down (possibly to near zero as more people talk up your product and service).  When your cost of sales goes down, your gross profit and net profit will go up.

This is exactly what happens when you deliver more value that the cost of the product.  You don’t just create a customer you create a FAN.  Check out this post from Facebook that I recently read where a friend of mine “RAVED” about a product:

How to Create a FAN by delivering Value

How to Create a FAN by delivering Value


Wendy, a friend of mine, posted this comment about Advanced Auto on Floyd Circle in Dallas, TX.  I don’t know how many friends that she has but they ALL now know that Wendy uses Advanced Auto for all of her five cars and that she is absolutely thrilled with their service.  How many people will use that company because of Wendy’s endorsement…. Enough to pay for the extra service (and the transmission fluid) they provided her (with great service) when she needed it.  If five of Wendy’s friends choose them as their automotive service provider and each person purchases $ 1,000 a year with that company then that business will generate an extra $ 5,000 annually just from Wendy’s recommendation.  If  Advanced Auto has a 20% gross margin then they will make $ 1,000 from Wendy’s friends.  The cost of the labor and the oil was less than $5.  The return on investment from the $5 would then be astronomical.  This is why creating FANS is the only way to grow your business.

Deliver more value than your product or service costs and create an army of FANS who will promote your business and help you establish year over year growth.

Great Quotes by Peter Drucker


Posted in Selling Value by Mack Powers. 1 Comment

Use Leads360 to manage the sales pipeline


Sales pipeline management is critical to every selling environment.  Leads360, a software product to  manage the selling process, is designed to help businesses of all sizes with their sales pipeline management success.  Leads360 is now known as Velocify.

7 Reasons Why Sales Pipeline Management is important to your business

Velocify will help companies with the following workflow tasks so that each lead is effectively and efficiently captured and managed:

  1. Lead Capture and De-Duplication – Seamlessly capture and automatically de-dupe inquiries coming from a variety of sources, including website lead forms, marketing automation systems, and lead providers.
  2. Configurable Lead Scoring – Simplify the measurement of lead quality with configurable attribute and action-based lead scoring. Leverage lead scores for distribution and to influence the dynamic prioritization of activities for your team.
  3. Flexible Lead Distribution – Take advantage of an unparalleled ensemble of push, pull, and hybrid lead distribution options that drive fast response, max conversion, and optimal team performance.
  4. Continuous Activity Prioritization – Ensure your sales team is always following up on the highest priority leads first, while staying on top of important opportunities throughout the day. By eliminating guesswork and driving a consistent process, you can make your team more strategic and more productive at the same time.
  5. Automated Lead Nurturing – Save time and improve conversion rates by automatically sending prescribed email and text messages at appropriate stages within the sales cycle — tied to changes in statuses, actions, or other inputs.
  6. Real-Time Dashboard and Reporting – Gain valuable, actionable insights into sales team performance with comprehensive reporting and metrics monitoring. Take advantage of real-time sales funnel intelligence, at a level of granularity not generally found in CRM.

Velocify LeadManager™ and Velocify Dial-IQ™ provide the foundation for achieving an ultimate contact strategy and systematically managing optimal selling activities to achieve higher revenue.

Designed to manage the unique needs of today’s high-velocity sales environments, Velocify solutions help sales teams respond to leads faster, establish an automated guided selling approach for all sales teams to follow, boost the number of daily sales activities, and gain funnel insights to monitor and control the sales process. With an integrated intelligent sales dialer, Velocify brings incredible speed and efficiency, dramatically accelerating speed-to-contact, call volume, and greater contact with more revenue generating opportunities.

Click here to learn more about Leads360 & Velocify

Great Quotes by Peter Drucker



Posted in Sales Pipeline Management by Mack Powers. No Comments