Roger Martin, Dean of the Rotman School of Management at the U of T, wrote about the growing malaise about big business in a blog at Harvard Business Review.

His message is that the modern corporate environment, in which shareholders who have no real ties to the companies they own but do control all the actions of those companies, exerts a negative influence on the companies, their employees and their communities.  It creates an environment that forces managers within those companies to lead inauthentic lives, which causes them to lose their moral compass, which leads them in turn to behave ever more inauthentically.

It’s a complex argument, but Martin lays it out well.  And his message is that this situation is totally unsustainable because it ultimately leads to decreases in shareholder value.

What’s missing from the article, though, is the solution.  How do large organizations remedy this problem?  How can large, public businesses serve their communities and their employees as well as their shareholders?

I think one solution lies in the business model of employees as shareholders – like WestJet.  This ensures alignment between the corporation’s financial returns and those who generate them.  It reduces one of the complexities of a model in which there are 3 primary stakeholders – customers, employees and shareholders.  Ie, it reduces the model to customers / company.

There are other ways – what have you seen that’s working?

98% of venture capital firms say that business plans play an Important or Somewhat Important role when they look at new ventures (according to a study recently published in the Canadian Journal of Small Business and Entrepreneurship).

What’s even more important than the business plan document, though, is the business planning process. I have seen many companies come to new and important realizations about the key success factors and obstacles for their concepts by working through the business planning process, by conducting good research, and by projecting financials.  They make smarter decisions faster and more cost-effectively through business planning than they would by launching and trying things out.

So while a business plan is incredibly important, it’s the process, not the outcome, that matters most.

Yesterday we did a Growth Strategy Session with an entrepreneur who has a very successful business in the fashion industry.  She’s spent the last 12 years building up a brand, reputation, and enviable client base. But now she’s bored!  She’s mastered what she does and is looking for a new challenge.  The problem – she’s identified 4 different opportunities for growth and can’t decide which one to pursue (she’s smart and experienced enough to know that she can’t take on all 4).  We see this problem with a lot of early-stage companies and entrepreneurs: too many opportunities and no focus, which results in resources being spread too thin and no success in any area.

Here’s what we did to help get clarity on which opportunity to say YES! to, and which to say NO to.

a)      Define goals.  For the fashion industry CEO, it was the classic entrepreneur goals: autonomy, impact, challenge, flexibility, decent financial income, and the ability to build an asset that is one day saleable.

Whatever your goals, everything you pursue has to start here.

So lay out your goals and constantly refer back to them when evaluating opportunities.

b)      Define each of the opportunities.

1. What is the business concept?
2. Who is the target market?
3. Why do they need it / why will they buy it / what’s the value to them?
4. What will it take (time, money, people) to deliver the concept
5. What are the economics of the concept
   • Revenues minus Costs equals Profits

You may not have all the answers to economics question – that’s ok, do a thumbnail, highlight what numbers you’re least certain about, and do follow up research if you need to validate your numbers

c)       Evaluate the opportunities relative to your goals.

Last night, of the CEO’s four opportunities, it quickly became clear that 2 would be a huge amount of work, for meager returns.  It was easy to toss these out.  A third offered reasonable potential returns, but the risk of it not working out was high.  The fourth looks very exciting.  It is clearly differentiated, the market opportunity is strong, the company is in a unique position to be able to deliver it.

This was a great process for the CEO.  She had come into the session with a ‘gut feel’ that the opportunity we eventually identified as best was the best, but she didn’t have any way to articulate that or quantify it.  And that’s a challenge in the business world:  intuition is valuable, but even more so when you’ve gone through a process to validate it.

So the next step is to figure out the steps to pursue that opportunity.  This is where the CEO wanted to be all along, but before we went through this process, she didn’t have the ability to commit to this one opportunity and throw her all into it.  Now she does!

If your organization faces numerous opportunities, I encourage you to go through this kind of process to winnow the ones that aren’t worth your while, and to help you give it your all to the ones that do.

Chris Anderson (Wired Magazine editor and author of The Long Tail and Free – The Future of a Radial Price) was one of the speakers at the Canadian Business Leadership Forum. His talk was related to his new book – Free – and how to do business in an era when so much is expected for free.

All that was good.  But he started his talk on a related but different theme -  that what we are living in now is ‘The Golden Age of Small Business”.  He believes this is true for two reasons and they make perfect sense to me:

a) there is a massive ‘release’ of talent from big companies.  Lots of smart people are now looking for an opportunity – and they’ll find it at small businesses.

b) the tools to create a small business are more available and less costly than ever before. You can create a large global presence with a website, outsourced IT, open-source software and everything else you need at almost no cost.

I thought this was a great message and one that should be shared with entrepreneurs everywhere. We are living in exciting times – the Googles of next decade are being created today. Are you one of them?

One year after ‘the meltdown’, here are 3 reasons why market intelligence (aka market research plus analysis) matters now.  As companies stop thinking about the downturn and making cuts, and instead start thinking about the growth opportunities that lie ahead, they need to know:

a) how has buyer behaviour changed.  Businesses and consumers (B2B and B2C buyers) have changed their shopping and spending patterns in the last year.  What is the result on how customers and prospects find and make purchase decisions on your products and services?

b) how the competition has changed.  In the last year, many companies have disappeared while others have been launched. Recessions prompt many people to start their own companies, which brings innovative and ambitious new entrants to every industry, and causes other companies to shut their doors.  What impact does the new competitive landscape have on your products and services, and how customers view your offering vs the other guy’s?

c) how the communications landscape has changed. The last year has seen literally millions of people sign up for services like Facebook and Twitter.  There are dozens of new channels for talking with customers.  Where do your customers and prospects go for information, and what do you need to be doing to get their attention?

As companies make their plans for 2010, these are just 3 reasons they need to be starting first with market intelligence before jumping into strategy and implementation.

Those of us in marketing talk about customers all the time. We’ve all heard the age old classic ‘the customer is always right’ and have had heated debates about how to interpret and use that statement effectively.

Clients tell us that ‘customers are everything to my business’ and that ‘my business is built around serving the needs of my customers’. They work hard to retain customers, not just because the cost of acquiring new ones outweighs the cost of effectively servicing existing ones, but because they care about the businesses they built and they want their customers to enjoy their experiences.

At Mezzanine we conduct customer satisfaction studies that help clients understand how customers perceive them and what they can do to better engage and service their customers’ needs. In these studies we identify the core issues that are driving satisfaction, and more importantly, areas of dissatisfaction that our clients must address. In the end, we develop benchmarks, a scorecard, and a list of recommendations on how to improve scores in the future so that our clients can more strategically build better relationships with their customers and be thought of as preferred vendors.

But what about the flip side of that? What does it mean to be a good customer?

Over cocktails last weekend, a new acquaintance was boasting about the demands he’s making on his vendors, ‘squeezing every dime out of them’, and ‘pushing hard to get more for less’. He was quite proud of the leverage his large, stable company has in this economy and is clearly using it to his short-term advantage.

In a b2b relationship where referrals are critical to growing your business, and where service providers offer expertise that you’ve strategically outsourced, this is a bad move.

Good customers recognize the expertise that their vendors have developed and reach out to them for advice. They involve their vendors in their business planning, and invest time to share and gather insights that could lead to the development of new opportunities. They pay their bills on time, and don’t threaten to cut contracts short or pull the plug if further concessions aren’t made when times get tough. Good customers respect their vendors’ time, forgive honest mistakes, and give advanced warning when things are starting to get tough.

The vendors this new acquaintance was referring to are smaller businesses (revenues from $100K to $5M from what I gathered) that are unlikely to rapidly expand during a turn-around. For this type of business, the clients that beat you up in bad times are the easiest ones to replace when new opportunities come knocking.

Think about the time and costs involved in replacing a trusted vendor and building a new relationship. Ask your vendors if they can think of ways to help you grow your business, and if they would share the risk in new ventures involving their services. You might be surprised to learn about the true breadth of their capabilities and the lengths they will go to help you grow rather than to help you save.

Good customers are often referred to as trusted business partners – and this is no subtle change in terminology.