Learned on 9/11

I stepped out of the shower at my parents’ house just moments after the first plane hit. TV news was claiming it was accident, suggesting that a small plane had wandered off course.

It seemed unlikely that a pilot would wander that much off course during daylight hours, particularly that close to two very busy commercial airports. The hole seemed too large for a small plane. It was a perfect day, weather-wise. From my perspective, the accident story didn’t add up. I wondered why the newscast had taken that angle.

The video of the first plane took care of that.

Lessons: Think before you speak. Gather facts, don’t assume. There is little value to rushing to judgment simply for the sake of speed. Trust your gut.

Distractions

I stepped out of the bathroom and stopped in front of the TV. The second plane appeared on the TV screen and removed all doubt about intention vs. accident.

I had flown to Dallas a few days earlier to attend a wedding and a meeting. I planned to drive to Austin that day for a meeting with a business partner. We had a brief call and agreed that neither of us felt good about spending the rest of the day in front of the TV. Letting these acts impact our businesses was simply not how either of us were wired. We had hectic schedules and this was clearly going to complicate life for some time to come. We decided the meeting was on.

My parents didn’t try to talk me out of it. I left for the four hour drive to Austin shortly after the first building collapsed.

Lesson: The easy thing isn’t always the right thing. You can allow the world to distract you, but that’s your choice. I was pretty clear early on that the attacks were terrorism. I remember being resolved to keeping the meeting because I was not going to allow them to prevent us from doing business. It was a small, symbolic victory that I couldn’t be talked out of.

Distributed is good

The radio said all planes were ordered to land ASAP during my drive to Austin. I remember thinking that it was a smart strategy to quickly clarify the status of thousands of airplanes.

We actually got something done during the meeting in Austin, and I drove back to Dallas. News interviews over the next few days showed many people frustrated with being stuck out of town, and unable to return to work or home. Some were collaborating to share a rental, spending thousands to rent a car and drive across the country. Remote work and a distributed company enabled us to live where we wanted. I was fortunate to be at my parents’ place, so I could stick around there as long as necessary.

Lesson: Eliminate unknowns as simply as possible. The simplicity of “land now at the closest airport” reminds us to seek a simple solution. Distributed companies that allow employees to live where they want and work from anywhere suddenly made sense to a lot more people, even though we’d been doing it for years.

Do your clients feel safe?

My return flight was booked for the 12th. I was rescheduled for return to Montana on the first day commercial flights resumed – Sept 15th. The vibe at DFW was strictly by the book. Passengers were tense and quiet. Everyone was quietly scrutinizing their fellow passengers.

Large, muscular athletes in Oklahoma State logo’d outfits started coming down the aisle. I first thought it was the Oklahoma State football team. OSU’s 2011 schedule tells me it probably wasn’t the football team. Their presence changed the passengers’ state of mind. The clear and unspoken change: “this plane is much safer now“.

Lesson:Perception matters. I remember the immediate change in perceived safety and how it changed the vibe on that plane. At the time, I didn’t correlate it to the value of creating a safe environment for your clients – regardless of what safe may mean for them. I later realized how compelling that shift was and how critical it is to create that sort of environment for clients. I’m speaking not simply of perception, but real safety.

Seek out the lessons life and business is trying to teach you, particularly in the worst of times.

Nothing happens till you sell something

For two weeks now, I’ve been encouraging about to become newly unemployed CFalls folks to rise up, figure out the value they can deliver and start their own business. Now it’s time to sell something.

This might be the part you’ve been dreading. Sorry, but you need to get over it. Selling the right product to the right person so they can do what they need to do (or get what they want) is honorable work. That sour stomach you get about selling is because you’ve experienced so many bad salespeople inflicting the hard sell on someone who had no interest in their product. That’s not what you’re about to do.

As I stated last week, the process is not easy. One of the things often used in the tech business that can make it easier is a process called “Lean Startup”. Lean Startup uses a process that is perfect for people starting out on their own – the use of the word “Lean” is intentional: This is not a process that requires that you order stationery and business cards, have a sign installed over your newly rented office and start pouring money into furniture, advertising, and so on.

Stay Hungry

The good news is that it takes advantage of things many hungry, underfunded entrepreneurs would do anyway: Spend as little as possible on stuff you don’t need, focus on a solution customers actually want, refine it quickly with multiple interviews / discussions with your prospective customers and swallow your pride long enough to ask for the sale.

If a “Startup Weekend” happens to pop up somewhere in the area in the meantime – take part in it. These events are often focused on technology-based ideas, but this is NOT a requirement and you don’t have to be a tech person to participate. The things you will learn by starting a business in 54 hours over a weekend will benefit you greatly, as will the relationships you build. The folks that often take part in these events are usually highly connected, entrepreneurial and happy to provide feedback on your idea and make introductions for you.

Nose to nose, toes to toes

Now is not the time to decide you need to take a college course, read the 27 books all entrepreneurs must read before starting a business, produce a detailed pro-forma for your banker, take a Udacity course on Lean Startup, etc. While the free Udacity course is good (for example) and the reading and pro-forma might serve you at some point – now is not the time for that.

Now is the time to get nose-to-nose, toes-to-toes with the people who you think are best suited to take advantage of what you want to do, discuss it with them and ask for the sale. Until you do that, get some feedback, ask for the sale, repeat (often) and start to get some feedback and reaction to your proposed offering,

It’s ok to tell them your business is new – they’ll probably figure that out anyway. They should quickly be able to figure out that you know your stuff based on how you position your offering and how you discuss how you intend to make it worth their investment.

Listen. Really listen.

One of the most valuable things you can hear during these conversations is “No, that’s not what I need.” You can either turn off and move on to the next person, or keep listening and keep asking questions. You know the process, product, solution you’re selling. It’s ok to ask them about the problems they’re having, what keeps them up at night, what makes them worry every day, and so on. If you ask the right questions and truly listen to what they’re telling you, you will find them making comments about things they invest time and money in to solve a problem. It might be a patch, but that’s ok.

They will spend time and money to get through something, solve something and/or perform a workaround simply to get some work done. Their workaround or process to get them by might seem crude or even ridiculous to you – that’s an indication that the problem is important enough for them to spend money on.

How can you make that better? Cheaper? Faster? More efficient? Safer? More dependable?

Sell that.

New project idea? Do this first

A new project idea is always exciting. You think you have a great idea that’s going to take off in your market like gangbusters and you can’t wait to get started. In fact, the gravitational pull of this new bright, shiny object might be so compelling, you might discard all encounters with reality and start without doing any sort of market research, perhaps even setting aside real paid work that has stacked up.

As you might expect, I have another suggestion: use a concept called the minimum viable product (MVP), which is part of process called “Lean Startup“. While this originated in the software world, the process of developing a MVP can be used in ANY business.

Let’s talk about what usually happens to a new project idea.

New project idea development

While the minimum viable product concept took root in the software business, it can be used ANYWHERE.

Let’s take a brief look at the old way. I’ll discuss it in the context of the development of a software project, but this can happen during the development of any new project idea in any business.

The Lean Startup world relates primarily to software startups. Lean Startup recognizes the history of software project development over the decades and that it’s had a high failure rate. This failure rate quite often happened because software development often looks like this:

  • Software people get an idea
  • They determine what they believe to be the perfect solution and fall madly in love with it.
  • They run into a room for two years (or longer) to develop it, and work incredibly hard to produce this perfect solution to fit their idea or problem they’ve identified.
  • After years, they emerge, sweaty and victorious, having completed some portion of this perfect solution

These developers might emerge from their self-imposed development exile having become chest-bumpingly-giddy about their victory, only to find that they built something in a vacuum of customer feedback and the customer finds the solution misses the mark – often by a wide margin. Either it solves a problem the customers don’t care about, or it addresses a problem in a way that makes little sense to the customer, or the customer thinks it’s workable, if only the software people can make these 247 changes to how it works.

Making those 247 changes might take longer than the initial development, might cost more than the initial development, may not have management support, and idea doesn’t do much for a team of software people who became quite misty-eyed over the baby they worked on for the last few years.

Minimum viable product does away with running into a room for two years, and with creating what has universally become recognized as a danger to new and existing businesses: a vacuum of customer feedback.

Test, gather feedback, repeat

The Minimum Viable Product process is a rather efficient, mostly emotionless process for getting to the root of the problem and to the solution that best fits the customer. It looks something like this:

  • Talk to clients.
  • Build what you think they want – but build the smallest possible solution that emerged from the conversation about the problem or idea.
  • Place it in the client’s hands as soon as possible. If you can make this happen in two weeks or less, do so.
  • Watch them use it, ask them how they feel about it, ask them what they like, don’t like, hate, love, etc.
  • Go back to work, leverage their feedback and quickly make changes based on the discussions you had.
  • Repeat as necessary.

During your feedback sessions, ask them if they would pay real money for your solution and let them do so if they say yes. If they won’t pay for what you’ve shown them, you need to reconsider further investment in (or the direction of) the project.

Rather than two years (or some other long, expensive period) of product/service development, you might have two to four weeks invested. It’s better to find out that you’re on the wrong track earlier, rather than later.

Want to learn more about this process? There’s a free course at Udacity that will take you through the process and teach you how to do it yourself. https://www.udacity.com/course/how-to-build-a-startup–ep245 

You don’t have to be a startup to use this process. It works for any project.

Micromanagement… is there a cure?

What is micromanagement? I suspect everyone who experiences it has their own definition. Wikipedia describes it as “micromanagement is a management style whereby a manager closely observes or controls the work of subordinates or employees. Micromanagement generally has a negative connotation.

Closely observes or controls” could be good or bad, depending on the context. It’s a tricky thing but like some other creations, we tend to know it when we see it, or experience it. One person might say “closely observes” is good management and that “controls” is necessary when training new people or people in new roles, but experienced people might feel that controls is unnecessary. Is your waffle detection alarm going off yet? Good. Look, it’s clear that there will be differing opinions on this, particularly between managers and employees who naturally have different perspectives. I don’t expect that to change, but how we view these things can change, even if we aren’t able to “cure” it.

If we look at micromanagement like a cold or flu that we want to cure, we’ll naturally focus on the cause and on symptoms. We focus on symptoms to make life easier until a cure is found, and we focus on the cause because the origin can often tell us how to solve (or cure) the problem.

What causes micromanagement?

I don’t think there’s any one cause. Based on experience, research and discussions with a number of people, there are four things that I’ve heard as reasons why micromanagement is taking place (noting that managers rarely acknowledge it) :

  • Lack of data.
  • Lack of trust.
  • Lack of control.
  • Previous delivery failures.

If you look at that list, what you’ll probably read from it is that someone is frustrated. That someone is management. The things management does out of frustration with these things will almost certainly cause frustration among employees.

It’s important to understand the people we’re working with: entrepreneurs. One of the things that entrepreneurs seek when starting a business is control. Control over income, destiny, time, etc. With success comes an eventual realization that the entrepreneur can’t do it all. Success means that the entrepreneur’s business has to grow and hire people, or it has to stop growing – something that rarely pleases entrepreneurs.

Must. Have. Control.

The minute you hire people, there’s a loss of control. The entrepreneur is now a business owner, not just an entrepreneur doing and controlling it all. “Suddenly” they have to trust someone else to do what they do well. When your neighbor takes over your BBQ chef role at the quarterly neighborhood block party, letting go is difficult. This is no different.

Years later, it’s no different for the entrepreneur. The work of the business reflects upon the entrepreneur personally. The entrepreneur’s inability to know and control everything is a difficult beast to overcome, particularly if the business grows to a point where they no longer has the ability to “know” every employee personally. When the entrepreneur no longer hires every employee, another phase of this process takes place.

So what to do?

A prescription

How do we deal with the four causes?

Lack of data – A lack of information brings assumptions. Assumptions usually don’t go how you expect, so that leads to …

Lack of trust – Trust might seem like the wrong word here, but that’s likely what it feels like to the employee. Trust is built by publishing plans, milestones, deadlines and then HITTING THEM.

Lack of control
– Much of this comes down to treating the entrepreneur’s lack of control. It may be new to them or not, but feeding the other parts of this helps provide the opportunity to analyze how things are going at a high level, ask if any help is needed without having to drill down into the nitty gritty on every little thing for every project you have in progress – what most employees would view as micromanagement at a company of 20, 50, or 100 employees.

Previous delivery failures – When projects fail or are late, lack of data about the cause of failure leads to assumptions (and the cycle continues).

The big thing about this is freeing the entrepreneur to wear the CEO hat. No one else can do that work. If the entrepreneur can’t get to it because of time spent micromanaging, that’s not good. Help them escape the micromanagement trap by providing the data they need.

Complete the important work

What are you not getting done? Why aren’t you getting those things done?

Does important work often go undone? If so, is that work truly important?

Delegation

Why aren’t you getting those things done?

Is it because of other things that keep you “busy”?

Are you busy because you aren’t delegating enough?

Are you unable to delegate?

Are you unable to delegate because you have no one to delegate to?

Are you unable to delegate because you don’t have time to document the task to be delegated?

Are you unable to delegate because the task requires skills that no one on the team has?

Do you have a system to develop people on your team? Is the system producing people that you can delegate tasks to?

If not, what should be changed so that the system produces team members who can take over the parts of your work that can be delegated?

Is it because you aren’t developing the “former” you in your team so that you can spend more time being the current you?

Systems

Is it because you don’t have an organized manner (system) of keeping track of what needs to be done?

Is it because the system (whether it’s paper, phone or computer-based) doesn’t work?

Is it because the system doesn’t work like you do?

Is it because the system doesn’t remind you of work that is scheduled or that needs to be done?

Is it because you don’t use a system that you have?

If you don’t use a system you have, why don’t you use it?

Focus

Is it because you aren’t giving yourself enough focus time?

What mechanism do you have in place to create focus time for yourself?

Does the mechanism work? If it doesn’t work, why is that?

Do others ignore the things you place in the way to allow you to have focus time?

If others ignore your focus time barriers, what have you done to clarify the situation or “discipline” those who ignore the barriers you build to create focus time? Are others aware of these barriers?

Classification

What is the cost of not getting these things done?

Is the cost, benefit or other financial impact what you use to determine the importance of a particular piece of work?

Does not getting these things done imply that they weren’t important after all?

Is the mechanism you use to identify work as “important” performing effectively?

If you look back at the work you considered important last month, do you still think it was important?

If not, how will you fine tune the system you use to assign importance?

Is there a system you use to classify work as important, not important, etc? One such system identifies work in four quadrants: “important and urgent”, “important and not urgent”, “urgent but not important”, and “not urgent and not important”. This system is often credited to “Seven Habits” author Stephen Covey, but there are also documents dating back to President Eisenhower’s use of the so-called “quadrant of work” system to decide what to do, what to decide upon, what to delegate and what to delete from the todo list.

Costs

Do sales or project goals depend on whatever you aren’t finishing?

Is the important work you’re not getting done tactical or strategic?

If so, is that a consistent situation? If not, have you recently been fighting through a situation that required you to focus on tactical?

Of the work considered important, is the cost of doing the work more than the benefit of doing that work?

If the cost exceeds the benefit, what makes that work important?

If the cost exceeds the benefit, should the work be done at all?

Turning that toward the less important (busy work?) that is consuming time best spent on the important work – if the cost of the busy work exceeds the benefit, should this work be done at all?

Do the important work

Consistently being able to identify the important and completing it while delegating what isn’t important IS the important work. The work you delegate may not be as important for YOU to do, but the fact that it can be delegated is the critical difference.

What’s the important work for you this coming week? What’s in place to make sure you get it done?

If you don’t have your system fine tuned yet… Does your staff?

Key person: Scalia and you

The loss of a key person, such as the death of Supreme Court Justice Antonin Scalia, is a critical moment in any organization. His passing sharply increased the temperature of an already highly-charged Presidential election season. It was already forecast that the next President will likely have to opportunity to make at least two and probably three appointments to the bench. What it make me think about was the impact of a Justice’s death on the day to day business of the court.

And that reminded me of you and your business.

Why? Events like this can have a critical, if not fatal impact on your business. Could your business survive your death or permanent disability, or that of key employees?

Regardless of your answer to that question, consider what’s in place to assure that the business will survive you. Is there insurance? A plan? Anything?

Key person insurance isn’t enough

While there is key person insurance available to help subsidize the cost of dealing with these kinds of situations, it often does little more than take care of expenses related to an orderly dismantling and/or sale of the business. Why? Because there was no plan to do anything else.

The real work, if possible, is the work necessary to survive the situation and keep the business running. That’s often the root cause of business failures that occur after an event that prevents the owner from being involved in the daily operations of the business.

Do you have a plan to survive a key person event? Without any instructions from you, could your family and/or your team know exactly what to do to get payroll out this week? A bank will work with you to get payroll out the door, but who can fund the payroll account in the first place?

What about the business that will transpire this week? What about the leadership void you would leave? Does your spouse take over? If so, do they have the necessary written instructions (or a video, or something) to help them get their feet under them in the short term? Have you organized the guiding information they need to take this on for the long term?

Keep in mind that in the early days, they will be trying to do this while suffering through the unexpected and sudden loss of you. This will certainly affect their decision-making abilities and focus, even if only temporarily.

Will there be a battle at the office to see who takes charge? If you don’t have a leadership assumption plan in place, what would happen? If your spouse isn’t ready to lead the company in the short term – regardless of the reason – who should their confidant be? Have you briefed the person charged with getting them up to speed on what’s important and how you make decisions? Is this information in writing?

Is the plan you left in place legally binding?

Key people need access

If you don’t pass on, but something happens to prevent you from having your normal access to business data, paperwork, assets etc or prevents the business from having normal access to you – what impact would that have?

Some events could impact almost any business, like these:

  • The owner, operations manager or a key employee has a stroke.
  • The owner, operations manager or a key employee leaves without notice.
  • The CEO’s spouse is taken to intensive care without warning, and the forecast is that he will be there for months.

For a larger business, international travel is likely – and that opens the door to many more possibilities:

  • Any of the items above could happen while an executive is out of the country, adding complexity to an already-trying situation.
  • The CEO could be stuck in a situation out of their control that keeps them out of the country for months.

How could this happen? Easy. If the boss is in South America, how will it affect your business if she can’t return for three months? It isn’t much of a stretch for the Zika virus (or something similar) to cause a country to close their borders, or for it to provoke the U.S. to disallow flights from the Zika-borne country.

How would the inability to perform simple tasks like signing checks impact your business? Little things can sometimes become big things when you lose control of them.

Is your business ready?

Why do startups fight city hall?

This past weekend, I had a brief discussion about Uber, France, tech startups and the need to “fight city hall”. It all started after I posted a story about an upcoming Paris taxi strike, which is designed to send a warning message to the French government and French people from a highly entrenched monopoly.

The message is “Don’t support something that threatens our monopoly or we will shut down the city.

The key thought in the article was that French government’s handling of the Uber situation is an illustration of what’s wrong with entrepreneurism in France and that the situation affects all French startups rather than solely impacting Uber.

It seems the laws in France are designed to frustrate entrepreneurs attempting to enter established markets, if not to suppress all new business entries. The article goes on to make note that all of this goes on while France’s leadership talks about how they want to encourage entrepreneurship.

Why care about what happens in Paris?

What in the world does this have to do with small business in the U.S.?

Similar things occur here in the States and in many cases, startups end up feeling forced into a situation where they are left with no choice but to fight city hall – often because the alternative is to be legislated out of business with the help of an entrenched competitor. Sadly, this “competitor” isn’t the least bit interested in competing. They’re happy to use the local and regional governments’ desire to protect the citizenry as a means of raising the bar into entering “their” market.

Most U.S. based entrepreneurs tend to avoid such battles because they are expensive, frustrating and quite often do nothing more than waste a business owner’s time and money.

Yet startups like Uber are often found doing that very thing – taking on governments to eliminate protections that were once created due to a public safety interest but have been perverted into something that seems perfectly designed to preserve and protect entrenched businesses not only from new entrants into the marketplace – but from their clientele as well.

Why startups?

Why are tech startups picking on established markets? And why do so many of them seem to want to fight city hall?

They often do this because that’s where the market is. We talk about the opportunity you create simply by improving service to clients here on a regular basis – and do so because it is one of the easiest ways to transform your business. Service – one of the essential things a business delivers – has gone from a foregone conclusion to a differentiating factor.

Uber is perhaps the most obvious and the easiest example to make note of, but they are far from alone on this one. Part of their attraction to consumers is how easy they make it to use their services when compared to most of their competition. Even now, their obstacle isn’t that cab companies all over the world have increased the quality of their cars, the ease of booking and paying for a ride, etc. No, their biggest obstacle is local / regional governments, many of whom have fought to keep Uber out.

The thing is, it isn’t really about Uber. They’re simply today’s easiest and most visible example to understand. What this is really about is creating more barriers to entry into a market.

Old rules that favor one company or one technology are what start ups deal with every single day. In fact they often focus on those areas because they make the market attractive. Markets with poor service often slowly become that way because of a lack of competition created by artificially created barriers to entry. Often companies in those markets treat their customers so poorly that people do business with them only because have no other choice.

These are markets that have repeatedly sent a message to their clientele that they need to be taught a serious lesson. Most local entrepreneurs can’t afford to fight City Hall. Only those who are highly capitalized have that luxury in most situations – the luxury of out-waiting and perhaps, out-spending city hall, something no small business owner can do.

As any small business owner knows, there are plenty of barriers to entry as it is. Be careful not to ask your representatives to help you create more of them, as the next time, it could be your business that’s targeted the next time. Each one of these barriers that is successfully installed makes it easier to create another one.

Starting a new business is hard enough as it is. Let’s not create more barriers.

Lessons from working at home

Geoffrey James put together a good list of 10 lessons learned from his 10 years of working from home. I’ve worked at home (and in my kayak, as shown above) since 1999 so I thought I’d chime in on the topics in his list.

1) Solitude: Solitude can be addicting, but like all good things, you can’t let it become a required condition for work (See #3). Pros perform well regardless of crowd noise.

2) Cut your hours: “you’ll be able to get twice as much done in half the time” – This can be true, but never assume it will happen simply because you’re working at home. Other interruptions that only happen at home can fill the gap left by interruptions you’d only encounter at the office. You have to manage your work environment and interruptions in both places.

3) Avoid Starbucks: Working at a neighborhood coffee shop has positives and negatives. If you’re likely to run into a bunch of people you know, go to a different shop. I used to do this a couple times a week simply to get out of the house back when I wasn’t traveling much. In a small town, it’s very likely that you’ll run into someone you know and that can easily consume an hour of time intended for real work, so don’t set yourself up for that. Going to a shop where you won’t likely run into friends / clients / etc will eliminate the interruptions. Some people filter the white noise of a coffee shop better than others, so use headphones if necessary. Avoid coffee shops that don’t use the sound-proofing systems for their 110 decibel smoothie machines / blenders. Learn to work productively in these environments because you will inevitably find yourself needing focus time in an airport or out of town.

4) Stay out of the kitchen: The draw of the fridge is a big one because it’s so convenient.

5) Limit gaming time: I’m not a gamer, but if you are, manage it as well as you do trips to the fridge or you’ll find yourself out of work and/or out of clients.

6) Don’t setup shop in the bedroom: James is right on point on here. Anywhere but the bedroom, for so many reasons.

7) Limit phone time: This depends on the work you do, of course. I strenuously avoid taking calls without an appointment – particularly conference calls. If you can’t do this, “train” co-workers (or clients) when to call you (if you can) or try to schedule planned calls immediately before or after another disruption to focus time (such as another meeting). Even if you can’t get anyone else to change their behavior, it’s on you and no one else if you pick up the phone during focus time. You’ll likely have to remind clients that you don’t allow interruptions from other clients when working on their stuff, and that this rule works for everyone equally. If you need to be available in an emergency, give people a way to let you know they need you ASAP. Text messaging works well, but only for people you aren’t regularly texting with.

8) De-clutter: This is a battle for me. The Fujitsu ScanSnap 1500 helps immensely but you have to stay on top of it.

9) Be comfortable: Absolutely. Comfort, proper posture and ergonomics are critical whether you’re at the office or at home.

10) Don’t assume telecommuting gig will last forever: I’m a bit contrary to Geoffrey on this one. I don’t care what Marissa demands of Yahoo employees. Each of them had to decide to accept the changes she demanded or find another job. Make your choice and make the best of it, or deal with the lack of choice until you can make life and/or career changes that allow you to resume working from home. If telecommuting is what you need or want, then you must use the ability to telecommute as a filter for clients and employers. I understand that some work must be done on premises. For the work that doesn’t, the best people for a project or a job don’t always live where the company is. Businesses who don’t recognize this sharply limit the talent they can leverage.

Working from home is a great thing most of the time. Preparation of your telecommuting environment and management or yourself & others are critical to doing it well.

Take bad competition seriously

I don’t talk much about competitors.

I avoid it for a couple of reasons. First, because you have far more to gain by investing time and effort into improving your own business. Second, worrying about what someone else is doing is usually a waste of time since you have no control over their behavior.

There are a couple of exceptions:

  • When a competitor does something smart.
  • When a competitor repeatedly damages the reputation of your market.

We’re going to spend most of today focused on the worst of these.

When a competitor does something smart

When you do something smart, a competitor will copy what you did – perhaps. Other times, competitors will watch what you did and fail to see value in it, fail to understand it, or decide that it’s not a good fit for their business.

Sometimes, you’re the one watching that happen. You owe it to yourself to pay enough attention so that when a competitor does something smart, you can analyze what your action would be. For example, if you run a high end hotel and the other high end hotel in town adds valet parking,  you’re going to need to think about how to respond.

The key here is not usually the thing being done. It’s seeing the move for what it is. Deciding why it was done and what it accomplishes isn’t always obvious. Consider it carefully.

Competition damaging the market

Usually a competitor who can’t get out of their own way will find a way to go out of business. This allows us to ignore them and let them flame out on their own.

Sometimes we aren’t that lucky. When that happens, what we’ll find is a business (and owner) who damages their own business, but not bad enough to make it fail. You’ll see this in markets with enough demand that even a poorly run business can find a way to make enough to survive.

The problem is that a business run this poorly creates a reputation that can damage every business in the sector. If there’s more than one of them, it’s a matter of time before their combined reputation stains an entire market full of businesses.

Including yours.

Don’t take it.

Are you willing to let your competition destroy the reputation of the market you’re in? Of the business you’ve worked so hard to build?

Think about the effort you invest to market and sell what you’ve worked so hard on. What would it take to accomplish the same thing if your reputation wasn’t what it is right now?

How many times have you heard people discuss putting off a transaction with a vendor because of prior experience with another vendor? You know of markets that already have this problem.

How would you cope with a business or group of businesses that do things to cause the public to think less of the rest of the businesses in your market?

Are you sure they don’t already exist? If not, how do you find them?

Finding bad eggs

Whether these reputation-damaging competition exists or not, you’re likely to find the scoop on the social review networks where your clients report their experiences.

In general, Yelp is the best place to start since their reviews aren’t limited to any single type of business. They do have more restaurants (for example) than many other types of businesses, but their coverage is quite broad.

In some cases, you’ll find more industry focused social review services, such as TripAdvisor. Finally, if your client community includes students, their school / university may have a review service, ombudsman or similar.

You should be reviewing and responding to comments on these services on a regular basis, but in this case, you’re looking for your competition.

If you find consistent patterns of client abuse and reputation damage that span a number of your competitors, you have a decision to make.

What to do

If you can take the guilt-by-association reputation damage, or you don’t think it will affect you, stick to working on your business – but keep an eye on it.

If it’s more than you can take or it gets worse, you have a few choices:

  • Buy them out.
  • Turn up the competitive heat.
  • Decide what you’re willing to do to save your business. Remember, your business and its jobs are at stake.

Are you willing to lose your business because they don’t care about theirs?

Shadow Everything

Warning: I’m about to discuss some technology things (yes, again), with good reason: Information Technology (IT) is a leading indicator with parallels in every business niche, including yours.

This isn’t about IT. It’s about everything.

Control

Historically, a company’s staff has had a love / hate relationship with IT. IT’s all powerful control was easy in the mainframe days. No department could afford to get their own, much less the staff to manage it and the space to house it.

Once IT grudgingly accepted the PC, things moved along calmly for a couple of decades. We’ve now circled back to the point where IT has once again become an obstacle in many companies.

Enter Shadow IT.

What is Shadow IT?

Shadow IT is departmental IT resources purchased to achieve a result faster, cheaper and better than the result a department is getting from their company’s centralized IT staff – whether that’s one person or 1000.

Consider who has the budget and who benefits from Shadow IT’s ROI.

Somewhere in the market where tech people are trying to close a sale, there’s a hungry group of owners who would love nothing better than to take over thanks in part to the advantages provided by tools that don’t depend on the status quo and/or lobbyist-funded legislation dating back to Eisenhower.

Seek those who want to change

In many companies, IT’s primary responsibility is to make sure nothing ever changes. Not in all companies, mind you, but certainly in the misguided ones.

The act of not doing anything in a misguided company is mind bogglingly simple. That’s why startups keep going after entrenched niches where a rarefied few are doing something other than clinging to what they always did and how they did it – that is, the companies whose primary R&D budget might be smaller than their political contribution budget.

The startup crowd targets and finds ways to disrupt and displace these businesses. They do so by seeking out those who WANT to change. Those who don’t look to improve are left behind to fend for themselves – which seems to be what they want, until it’s too late.

Let me clarify the “make sure nothing ever changes” comment. It’s OK to take incremental, ever-more-feisty steps to make sure nothing ever changes in production or under peak load. It’s another thing entirely when those actions morph into “Do nothing. Change nothing. Don’t break anything, in fact, don’t touch or move anything. EVER.

Not doing anything beyond acting in the interest of self-preservation is politician work, not IT work. It results in…

Shrinkage

CEB (formerly the “Corporate Executive Board”) reports on global corporate data and trends in that data. A few quotes from a CEB report from last year:

  • IT budgets projected to shrink 75% over the next 5 years.
  • Around 10% of CIOs, particularly in large multinational energy, pharmaceutical and consumer companies, already have a cross-departmental role.
  • Nearly 80% of IT professionals will see multiple changes in their responsibilities, skills needs and objectives, as the IT organization adapts to changing business needs over the next five years.
  • Corporate IT departments will shrink by as much as 75% over the next five years as businesses adapt to the cloud and changing economic conditions.

The result of this: Cloud computing and Shadow IT, which is often based on cloud computing.

Who invests in Shadow?

Shadow IT investors have budgets. They seek serious ROI. These are not people looking for things to remain as they are. They’re dissatisfied with how things are. They know there are tools that can work faster, smarter, cheaper.

Shadow IT requires risk, offers reward, but it doesn’t come without a price. These processes must be robust, well-documented and… work, because IT doesn’t have the desire much less the resources to research or repair Shadow IT assets and processes. Shadow investments demand full responsibility from their investors.

Shadow IT isn’t the real challenge. I think you’ll see IT and its shadows go round and round as each generation of departmental and personal computing reveals itself.

By now, you’re wondering how this Shadow IT problem could possibly involve your small business. Did he trick me into reading this far?

Shadow Everything.

No, because the thing I’m seeing more and more of is “Shadow Everything”.

The ranks of people “dissatisfied with how things are and wanting tools that work faster, smarter, cheaper” isn’t limited to IT.

They’re everywhere and they will invest in Shadow Everything.

What will you invest in? And your clients?