Axis Insurance Community

Axis Producers: Are you ready for market turbulence?

Part 1 of 2: Know the warning signs of distress  

It’s a frightening time to be in business in Canada.

Market turbulence, which has been garnering daily headlines, is expected to intensify across all sectors. From automotive and forestry to fishery and gas services, the business landscape is evolving rapidly, and no company can afford to ignore the changes and their potential impact.

In the oil and gas sector, for example, producers and services firms are grappling with massive increases in energy and commodity costs. Significant labour shortages and a tightening regulatory environment have pushed many companies in this space to the ropes.

Agriculture is similarly under siege. Canada’s livestock and cattle producers, greenhouses and fisheries are wrestling with spiraling input costs and unpredictable border controls that restrict exports. The strong Canadian dollar has priced many Canadian producers right out of the market just as the federal government shifts its focus away from agriculture toward other market sectors.

The forestry sector is also suffering, in large part due to its failure to prepare for a rising dollar. Years of depreciated Canadian currency allowed many producers to become complacent. As a result of this natural money market advantage, many players failed to invest in R&D, plant upgrades or economies of scale rationalizations needed to effectively compete in global markets. The dollar took flight just as international competitors arrived on the scene.

China has emerged as a leading low-cost manufacturer. Similarly, South America is known as an inexpensive source of eucalyptus fibre, Nordic Europe is home to a range of very efficient plants and Finland has established a strong reputation for technological leadership in the forestry industry.

The timing couldn’t be worse for Canada, as the volatile currency exposes forestry industry weaknesses just as global market competition heats up. It gets worse in pulp and paper, where Canadian mill capacity ranks among the lowest in the world, while the average age of Canadian plants is older than the global norm.

Canada also lags in lumber, where yields and rotations are significantly below international averages because of climate and tree species. The situation isn’t helped by Canada’s relatively high cost structure and inefficient, outdated transportation infrastructure.

Despite their reputation as sudden events, crises typically percolate for quite some time before igniting. Forward-thinking organizations recognize that even subtle symptoms can, if left unchecked, evolve into full-blown disasters over time.

Because it can take a significant period of time for business emergencies to take root, it is important to view these events as preventable. Businesses that put processes in place to actively watch for and respond to symptoms of underperformance stand a better chance of avoiding crises altogether. If setbacks prove unavoidable, well-prepared companies are better equipped to stop their progress before they worsen.

Read the whole article from CMA Management magazine:

Download market_turbulence_challenges_canadian_companies.doc

How the Best of the Best Get Better and Better

Compete only with yourself, demand relentless feedback, and don’t forget to celebrate, says this sports psychologist and executive coach.

by Graham Jones

Until 1954, most people believed that a human being was incapable of running a mile in less than four minutes. But that very year, English miler Roger Bannister proved them wrong.

“Doctors and scientists said that breaking the four-minute mile was impossible, that one would die in the attempt,” Bannister is reported to have said afterward. “Thus, when I got up from the track after collapsing at the finish line, I figured I was dead.” Which goes to show that in sports, as in business, the main obstacle to achieving “the impossible” may be a self-limiting mind-set.

Sport is not business, of course, but the parallels are striking. In both worlds, elite performers are not born but made. Obviously, star athletes must have some innate, natural ability—coordination, physical flexibility, anatomical capacities—just as successful senior executives need to be able to think strategically and relate to people. But the real key to excellence in both sports and business is not the ability to swim fast or do quantitative analyses quickly in your head; rather, it is mental toughness. 

Elite performers in both arenas thrive on pressure; they excel when the heat is turned up. Their rise to the top is the result of very careful planning—of setting and hitting hundreds of small goals. Elite performers use competition to hone their skills, and they reinvent themselves continually to stay ahead of the pack. Finally, whenever they score big wins, top performers take time to celebrate their victories.

You can’t stay at the top if you aren’t comfortable in high-stress situations. Indeed, the ability to remain cool under fire is the one trait of elite performers that is most often thought of as inborn. But in fact you can learn to love the pressure—for driving you to perform better than you ever thought you could. To do that, however, you have to first make a choice to devote yourself passionately to self-improvement. Greg Searle, who won an Olympic gold medal in rowing, is often asked whether success was worth the price. He always gives the same reply: “I never made any sacrifices; I made choices.”

Read on the rest of this article from Harvard Business Review:

Download how_the_best_of_the_best_get_better_and_better.doc

 

Understanding what the customer buys - by Peter Drucker

The most important question for a business is: “What is value to the customer?” Yet it is the one least often asked. One reason is the sales professionals are quite sure they know the answer. Value is what they, in their business, define as quality. But this is almost always the wrong definition. The customer never buys a product. By definition the customer buys the satisfaction of a want. He buys value.

For a teenage girl, for instance, value in a shoe is high fashion. It has to be “in”. Price is a secondary consideration and durability is not value at all. For the same girl as a young mother, a few years later, high fashion becomes a restraint. She will not buy something that is quite unfashionable. But what she looks for is durability, price, comfort and fit. The same shoe that represents the best buy for a teenager is a very poor value for her slightly older sister.

What a company’s different customers consider value is so complicated that it can be answered only by the customers themselves. A salesperson should not even try to guess the answers – it should always go to the customers in a systematic quest for them.

Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality.

The fallacy of the sales people is often the sole focus on the thorough knowledge of the product while it is the intimate knowledge of the needs of each customer that is of the primary importance.

Action point: What do your customers consider most valuable about the product or service you provide? If you don’t know, find out. If you do know, ask your customers if you are delivering.

Peter Drucker is considered the top management thinker, the father of modern management, his 39 books and countless articles explored how humans are organized across all sectors of society—in business, government and the nonprofit world.

Enterprise Management Risk - what is it?

Enterprise risk management, or ERM as it is called, uses an integrated or holistic approach to understand and manage all the risks an organization faces. Its primary purpose is to improve the quality of decision-making throughout an organization.

ERM started in the late 1980s, when financial and insurance companies began to understand that they were taking dissimilar, independent and sometimes competing approaches to managing a mounting number and types of risks they faced internally and externally. The uncoordinated, and sometimes conflicting, approaches to managing organizational risk led executives to ignore some risks while spending too much time managing others. The result was employees did not give senior management a complete picture of the risks they faced, thereby increasing the likelihood that the organization would be surprised by events that, in retrospect, were predictable.

During the past decade and a half, ERM has grown from being a good idea into a more formal discipline to manage an organization’s risks. No universally accepted definition of ERM exists, so it's best to think of it as a common framework for managing four types of organizational risks.

• Strategic risks involve the organization’s direction. Is the organization’s current course and ability to adapt to market changes correct, or does it need to be changed to keep from stagnating or collapsing? Strategic risks include the organization’s overall objectives, the assumptions that underlie those objectives, as well as the constraints the organization faces.

• Operational risks involve the people, processes and technology that are needed to carry out the organization’s strategic objectives. These risks would include how well information technology systems function or the effectiveness of information security to protect confidential data.

• Financial risks involve the allocation of resources, including the organization’s financial investments. For instance, are financial resources allocated so they create the best return for a public company’s shareholders, or in the case of a government agency, do investments generate the best value?

• Insurable risks are amenable to be addressed by insurance (specifically, “pure” risks that involve only outcomes of a financial loss or no loss).

Of course, some risks include aspects of more than one of the four classes of risks. Some risks also evolve from one class to others. For instance, disclosure of personal information due to the loss of a laptop (an operational risk) may create both a reputational (a strategic risk) and monetary (a financial risk) consequence.

For the past decade, ERM has been touted as how organizations should manage their risks. The subprime mortgage crisis and its ramifications, however, have created an open question of the value of ERM. Financial institutions, including Bears Stearns, HSBC, Merrill Lynch, UBS and many others, which before the crisis were touted as world-class best practitioners of enterprise risk management, have experienced tens of billions of dollars in losses because they did not understand the risks in which they had invested.

What the subprime situation has made clear is that many financial firms practiced ERM in only a pro forma manner. These organizations may have talked a good ERM game, but they definitely didn’t practice one.

For instance, some institutions never questioned strategic risks related to basic market assumptions, such as housing prices would never fall dramatically. Nor did senior management understand the extent of the risks, such as in their size or complexity. Part of the reason was that managers were not concerned about long-term risks as long as short-term profits were being generated. A predictable, nasty surprise was a foregone conclusion.

The subprime debacle once again underscores the critical importance of creating a healthy organizational risk culture, in which senior managers want to know about risks, take action to mitigate them and not make overseers feel unwelcomed when they point risks out.

The subprime situation also highlights the importance of understanding the many ways risks are interconnected. Firms that believed they were immune from what was happening in the subprime market found to their surprise they were not.

You can access this free webinar "Enterprise Risk Management: Eliminating Obstacles to Success" here: http://www.businessinsurance.com/cgi-bin/page.pl?pageId=1104

Name your price - get what you pay for

We all have areas in our life that we will not compromise and areas where we will be a little more flexible. Knowing what we will or will not negotiate sets a boundary that can guide us professionally and personally. Without knowing this about ourselves, we can loose sight of goals or find ourselves losing track of our core reason for being in the business that we're in.

Non-negotiables can be vastly different for each of us, as you can see from the following examples:

• D. wants to be known as a mover-and-shaker within her business community.
• C. wants to be able to set his own hours.
• T. wants to earn a six-figure income.
• I. wants Thursdays off to volunteer in her child’s classroom.
• D. wants to become an independent business owner

Defining your non-negotiables can give you a basic framework for keeping your professional life moving forward as planned. Certainly there is a price to pay and a trade-off involved here. For an individual who desires considerable financial success the price will involve long hours and higher commitment level. An involved parent will face stalled professional development and lower earnings capacity while enjoying time with her family.

The old adage is always true: you get what you pay for.

You can find more helpful tips here: http://www.womensenterprise.ca/enews/Jan2008.html#FeatureArticle

Axis year-end: setting goals and action plan

By Colleen Francis

Year-end is a great time to start thinking seriously about your business goals, and your sales plan for the year. Of course, it's always a great idea to plan ahead. But don't make the mistake of setting new goals for your career without first reflecting on your accomplishments - and your shortcomings - from 2007/2008.

This isn't always an easy (or pleasant) task. But to truly control the direction you take this year, you need to be fully aware of how you fared in the last twelve months - and where you can really work to improve. Once you have a clear picture of where you excelled, where you need to focus more time or effort, and your overall results, you can begin to set the goals and behaviors you'll need to succeed in 2008/2009.

Now for the hard part. The sad but true fact is that, in the overwhelming majority of cases, most sales people fail to achieve their goals. Why? Because they lack a detailed plan that tells them how to achieve those goals, in the time they want to achieve them.

Setting goals without creating a plan to achieve them is like deciding to hike up Mount Everest without a day of training, a route map or guide, or any equipment besides your running shoes and a bottle of Gatorade.

Would you want to attempt this? Of course not (I hope!). Yet very few sales people understand what we need to do on a daily or weekly basis to achieve our goals. Just as most of us recognize that buying a lottery ticket is not a viable retirement plan, we also need to realize that simply setting a goal and then wishing or praying to hit it is not an effective planning strategy.

So where do you begin on your trek up the mountain? The following is a simple, 4-step planning tool you can use to build your career, by building a clearer path towards achieving your goals each month, quarter or year.

Step 1: Define your objective, and make this definition quantifiable.
What, specifically, are your sales and production goals for 2009? Decide what your specific goals for the year are, and then state them in a direct, concise - and measurable - way, that makes it clear what you want to achieve, and when.

For example, if your focus is on revenues, then you might define your goal as: "I want to close $1,000,000 in new business and $1,000,000 in existing client repeat business this year." If your goal is to increase customer numbers, then you might state something like: "I want to make 10 new customers this year, and sell to 20 existing customers."

Other goals we have seen include:

• I want to increase the annual dollarized value of each of my clients to an average of $20,000; or
• I want to increase my amount of repeat business by 80%.

Step 2: Plan to succeed.
Once you have a clear, quantifiable statement of your goals for the year, break them down into more manageable quarterly, monthly, weekly and daily objectives.

For example, if your goal is to land $1,000,000 in new business, and your average sales size is $50,000, then you need to make 20 new sales to achieve that goal. Based on average sales statistics (and if you've measured your own statistics, please use those instead), the average sales person closes 1 in 3 qualified leads. Therefore, to make 20 new sales this year, you would theoretically need to have 60 qualified prospects.

Now, the average sales person needs to meet 3 prospects in order to qualify 1, and must usually make about 20 attempts (phone calls, voice mail, email, etc) to get one meeting. So in the above example, to realize your goal of $1,000,000 in new sales, you would need to make 3600 attempts and meet 180 prospects over the next twelve months.

If this sounds like a frightening number, remember that 3600 attempts over the course of a year really only translates into:

• 300 attempts a month;
• 75 attempts per week; or
• Just 15 attempts per day.
  Now that's what I call an easy plan to follow!

Step 3: Execute your plan.
Now that you have your plan, you're ready to execute it.

To give you a baseline on the amount of time it takes to make those daily calls, I make 25 attempts per day, which takes me 2-3 hours to complete. As Zig Ziglar says: "Daily objectives are the best indicators of character." So to help you complete your daily sales goals, try some of the following tips and techniques:

• Get to work! In sales as in life, half the battle is just showing up!
• Call at all times of the day. Sometimes even Friday afternoons can be the best time to make sales calls.
• Mix up the types of contacts. Make some on the phone, some face to face, some at Networking events and some by email. This will help you hedge your bets and keep things interesting.
• Track your attempts, meetings and close ratios consistently, and measure your results. Then adjust your plan based on your real metrics. You may find that you're above or below the averages I've used above, but if you don't measure to find out, you'll never know.
• Stay focused. The top 10% of sales performers have one thing in common: they are consistently focused on what needs to get done to achieve their goals. Mark the time you're going to spend attempting to reach customers in your calendar each day or week, and close your office door until you've completed the task. While you're at it, turn off your email and don't take any in-coming calls. If you work in a cubical, find a closed office in which to do your prospecting. In other words, force yourself to stay focused and avoid distractions. The fewer distractions you have, the faster the work will get done.
• Prospect consistently. Whether you choose to make all your weekly calls in one day or do a small amount each day doesn't matter. What matters is that you are consistent. Think of yourself as an elite professional. Tiger Woods would tell you that it's the consistency of his practice time - the 100's of balls he hits and thousands of putts he makes every day - that leads to ultimate success.
• Keep records and make lists. Successful sales people record their progress toward each goal every day, and then list the 5 most important things they need to do the next day to move that goal even further ahead. This short "To Do" list is 100% focused on achieving their goals, because the most successful sales people also understand that daily discipline is the key to reaching their goals.

Step 4: Reinforce your goals to stay motivated.
Finally, remember that tasks that get rewarded are tasks that get done. So find a way to reward yourself after finishing your calls each day.

My personal reward for completing my daily prospecting calls is a trip to my local Starbucks for my favorite "venti triple shot non fat extra hot no foam mocha!" (Hey, nobody said I was low maintenance!). No calls, no coffee - it's that simple.

Guess what gets done first thing each morning?

Help out a fellow sales professional
Staying motivated to consistently do the work needed to achieve your goals is probably the single hardest part of sales. It's not surprising then that one of the questions I'm most often asked by my clients is, how do I stay motivated?

I would love to be able to tell you precisely how to motivate yourself, but the fact is, different things work for different people. What's important is finding what works for you, and then sticking to it until you accomplish the tasks you've set for yourself.

In the meantime, the best advice I can offer is to write your goals down, update them constantly based on your real results, and make them public, including displaying them close by. Studies show that people who share their goals with others are 70% more likely to achieve them. So share your goals with the people you respect the most, and you'll work harder to ensure that you don't disappoint them.

The difference between top sales performers and the rest of the field is that top performers have a plan to achieve their goals, and they act on that plan every day. This year, commit yourself to being a top performer. Design a daily and/or weekly plan, act on it consistently - and monitor your results.

It's been said that most people aim at nothing, and hit it with surprising accuracy. We all have a goal in mind. Whether you hit it or not will depend on your ability to define and focus on the tasks that will consistently lead you to your goal, time and time again.

to access the wealth of sales knowledge by Colleen Francis visit her blog: http://www.engageselling.com/blog/

Three Factors for Financial Success by Brian Tracy

What do wealthy people do or have that enables them to accomplish so much more than the average?

    I believe that these people are successful as a result of what I call leverage. Leverage is the key to maximizing and multiplying your potential for success and financial achievement. Here are three examples of leverage that you can develop to achieve financial independence:

Become an Expert
First, become an expert in your chosen field. Read all the books, take all the courses, listen to all the audio programs. Second, specialize in those areas that are of greatest importance and greatest value to your company or to your customers. And the third key is know your product or service inside out. Aim to be recognized as the industry expert in your field. Remember the person who has the expertise has a far greater contribution to make than the person whose knowledge is just average.

Develop Your Skills
The second type of leverage is skill. The better you are at your job, the more you will be paid. The top 20 percent of salespeople earn as much as ten and fifteen times the average earnings of the bottom 80 percent. There are three keys to developing the leverage of skill. First, make a decision to be the best. Pay any price. Make any sacrifice. Go any distance to become excellent at what you do. Second, engage in continuous improvement. Never allow yourself to become satisfied or complacent at your current level of skill. And third, always strive to exceed the expectations of your customers, your boss, of the people you serve. Always do more and better than you're paid for.

Save Your Money
The third type of leverage is money. Money is a powerful source of leverage and usually follows the development of knowledge and skill in your field. One of the reasons that it takes money to make money is that the accumulation of funds is an essential step in the development of the personal qualities and character that must precede the achievement of financial independence. In other words, you become the person capable of becoming financially independent by accumulating the funds that are necessary for you to achieve it.

Action Exercises
Here are two things you can do immediately to put these ideas on personal leverage into action:

First, resolve today to become an expert in your chosen field. Set it as a goal, make a plan and work every day to become a little bit better in the most important things you do.

Second, develop the habit of saving money out of every single paycheck. It was once said that, "If you cannot save money, the seeds of greatness are not in you." The very act of regular saving changes your character and gets you ready to achieve financial independence.

You can find the above and many other motivational tips on success on Brian Tracy’s blog: http://blogs.briantracy.com/

Professional membership - what's in it for you?

How can you make the most out of your professional membership? If you expand your social network and build bridges to other industries, opportunity is everywhere.

When you are considering getting involved in any association or venture you ask “what is my return on investment?” Unfortunately most organizations have a narrow definition and limited strategy to maximize their ROI. If you merely focus on “money-in money-out” measure of ROI you are missing out on long-term business growth.

The 360-degree ROI model as seen below takes into account a full spectrum of revenue, brand and relationship multipliers that progressive organizations are using to fully engage the marketplace and maximize their true ROI, as well as what Darcy Rezac calls “Return on Relationships”.

When you are involved in a professional association like The Vancouver Board of Trade you need to measure ROI in many ways to truly see the full impact of their contribution, networking and branding activities:

Reputation and trust-building:

“Business moves at the speed of trust” says best-selling author Stephen Covey. By making a commitment to be involved, engaged and visible in your business community, we make it easier for our clients to trust us and be exposed to positive word-of-mouth within the community. As more people get to know us and the work we do it takes the fear out of saying “yes” to doing business with us.

Corporate capacity building

Our ability to build relationships, communicate, sell, market, and lead is critical to our success as an organization. Through educational programs, networking opportunities, and exposure to your communities business leaders you are growing your individual team members’ capacity and turn your overall organization competitiveness.

Brand association, PR and exposure

Your people are your brand. With every interaction with the community they have the opportunity to promote your brand, and tell your unique story. People buy from people, and face to face is your currency.

Business intelligence

You have to have your finger on the pulse of what is going on in your industries and the economy in general. Usually, by the time it’s reported in the news, it has already happened. Getting involved allows you to see the trends as they are developing.

Long-term revenue

Are you in business for one year? Ten years? Or twenty? It’s too easy to get caught up in day-to-day crisis and cash flow emergencies and lose sight of the big picture. Reputations, brands, and corporate goodwill that bring customers through the door are earned over time.

Impact of your business ecosystem

By contributing to the success of other business people in your community through networking, mentorship, or contributing expertise, you make a positive impact on your local community. Also, when you write a cheque for a local charity or band together with a group of business people to make changes to government policy, you improve the economy on which your business depends.

Happiness and well being

New research shows that our connectedness to others is directly linked to our happiness and well being. “Social networks help you stay healthy”, writes Bowling Alone author Robert Putnam. “as a rough rule of thumb, if you belong to no group but decide to join one, you cut your risk of dying over the next year in half” As we spend more of our life at work we need to put more life into work.

Immediate revenue and opportunity creation

Most people join an organization for this reason. Joining isn’t enough. The more active you are, and the more you contribute, the more chances you have for immediate revenues and business connections. Some people say they do not have time to be active, yet successful networkers always have time to meet potential clients.

Network growth

Networking fuels the entire 360 degrees of ROI model. Organizations like The Vancouver Board of Trade give you both opportunities and the insight needed to fully succeed at positive networking. Business is a contact sport.

Differentiation

Many industries are commoditized; in the instance that you are selling a similar or identical product as your competitors, the only differentiator is your level of relationship with the client or prospect.

If we can expand our personal and corporate vision to encompass the 360 degrees of ROI, our short term cash focus will soon be replaced with enhanced corporate brand, an abundance of prospects and clients, long term stability and growth through “community engagement and connecting for good”.

By Shane Gibson and Fiona Douglas-Crampton

The Source of Competitive Advantage - After the Sale...

To keep buyers happy, vendors must maintain constructive interaction with purchasers – which includes keeping up on their complaints and future needs. Repeat orders will go to those sellers who have done the best job of nurturing those relationships.

The relationship between a seller and a buyer seldom ends when a sale is made. Increasingly, the relationship intensifies after the sale and helps determine the buyer’s choice the next time around. The sale, then merely consummates the courtship, at which point the marriage begins. How good the marriage is depends on how well the seller manages the relationship. The quality of the marriage determines whether there will be continued or expanded business, or troubles and divorce. If the marriage that remains is burdened, it tarnishes the seller’s reputation.

A healthy relationship maintains, and preferably expands, the equity and the possibilities that were created during the courtship. A healthy relationship requires a conscious and constant fight against the forces of decline. It becomes important for sellers regularly and seriously to consider whether the relationship is improving or deteriorating, whether their promises are being completely fulfilled, whether they are neglecting anything, and how they stand vis-à-vis their competitors.

The seller and the buyer have different capital structures, competitive conditions, costs and incentives driving the commitments to each other. The seller has made a sale that is expected to earn a profit. The buyer has bought a tool with which to produce things to yield a profit. For the seller the sale is the end of the process; for the buyer, only the beginning.

One of the surest signs of a bad or declining relationship is the absence of complaints from the customer. Nobody is ever that satisfied, especially not over an extended period of time. The customer is either not being candid or not being contacted – probably both. The absence of candor reflects the decline of trust and the deterioration of the relationship.

A seller has to ask those questions: “How are we doing in the relationship? Is it going up or down? What have we not done lately?” The emphasis on “lately” is not coincidental. It reflects the fact that relationships naturally degrade and have to be reinvigorated. If I owe you a favor, I forget – but you don’t. And when I’ve done you a favor, you feel obligated-but not for long. You ask “What have you done for me lately?” A relationship credit must be cashed in or it expires, and it must be used soon or it depreciates.

The above is an excerpt from an artice by Theodore Levitt "After the Sale is Over..."

Download after_the_sales_is_over.pdf

By Iwona