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Community Employees Entrepreneurs

Why Business is Personal

14 years ago when this blog got the name “Business is Personal”, you’d occasionally hear “It’s not personal, it’s just business.” I found the idea repulsive, transactional, and most importantly – the opposite of everything I’d been taught. The phrase later became part of pop culture thanks to a TV show. I even had a business partner say this to me back in 2006. Because I never believed it wasn’t personal, it marked a turning point in that business relationship – which soon ended. “Business is Personal” was true when “it’s just business” was said to me in 2006 and it’s still true today, perhaps more than ever.

Sales and marketing is personal

The marketing messages that touch us and do some part to convince us to make a purchase are effective because they touch us. I recently heard of a study of a man who had an operable brain tumor. When the tumor was removed, it required removal (or damaged) a part of the brain that controls emotion. There was speculation that he would be more capable of making decisions than most people, since emotion would no longer cloud his decision making. It turned out quite differently. Without the ability to use emotion, he was unable to make even the simplest of decisions. Unable to decide between salt & pepper, or between red wine & white, he required extensive care, rather than becoming a highly logical decision-making juggernaut.

To excel at sales, we must become experts at listening to prospects. We must “get inside the head” of people to learn what motivates them, how they are thinking, and often, what their deepest wants and needs are. My dad used to tell me to “be a good listener”, a phrase which changed meaning from decade to decade. Today, “listen to understand, rather than to respond” has become the catch phrase of many who are figuring out that listening to respond completely misses the point.

We’ve all been subjected to a salesperson who is focused on their quota, or on their sales process, rather than on our wants and needs. It’s frustrating. Transactional. Many avoid businesses with this type of sales team. Eventually, some businesses figured it out and started using non-commissioned salespeople. Despite that, I still get calls and meet salespeople who start the conversation about their quota and the need to close a deal by some irrelevant date.

The sales our companies make are very personal. They allow us to hire people who support their families, which support schools, charities and entire communities. Those sales fund salaries that are spent at other local businesses, that fund infrastructure and schools, and allow our employees to get their kids into schools, sports, outdoor activities and more. In communities where a business is a substantial employer, the impact of that business ripples across the economy of the entire community.

Employment is personal

For many people, their job or their chosen field of work is a part of their identity. It may be what motivated them to go to college or trade school. It might be what got them to spend Gladwell’s perhaps-discredited 10000 hours to achieve mastery, and/or to seek out the mentor who would teach them the ropes. For some it’s a bit bigger piece. Ever spoken with someone who’s unemployed? Would you even begin to tell them that experience isn’t deeply personal? For some, it digs at them to their core and they might never forget it. It might even drive decisions they make for the rest of their lives, simply because they never want to be in that situation again. “It’s just business” doesn’t begin to describe it.

It’s personal when you get the job you’ve worked years to be qualified for. When you get the job of your dreams, it’s personal. It’s personal to take out massive student loans while becoming a doctor, lawyer, engineer, teacher, etc. When someone tells you that you aren’t good enough at a job and fires you, it’s personal. It’s personal when you come home and explain to your family that you were laid off or fired. When you have one of the greatest business successes of your life, it’s personal. If you have to humble yourself in front of friends, peers, and the people you love because you were fired, it’s personal. When tough times threaten the faith they put in you and tarnish the promises you’ve made to them… it’s personal.

Ownership is personal

That business you built from scratch, the one that almost now one knows how much time, mental strain, money and work you invested in, it’s personal to you. The sacrifices you made, the jobs and financial opportunities you gave up to build your dream, they’re personal too. The dream is personal. It pushes you to work, sacrifice, get your life out of balance, struggle to get it back in balance, only to work harder the following month to keep it that way. Your business is personal to you, no matter how it feels or appears to someone else.

You chose who you wanted to be a hero to. It was a personal choice. There’s probably a reason for it. I think back to how I advise people to take care of their customers, and it surely goes back to watching my grandmother make butter and riding around in my granddaddy’s truck to deliver eggs, milk, butter, and chickens. Even though the world had all those things at the corner grocery store, people paid still paid them to deliver these items to their door. My grandmother’s butter wasn’t simply a round of butter. She milked the cows. She churned the butter. She hand-formed the rounds and then personalized them with a design she hand embossed on the top with a wooden spatula that someone had carved for her.

How is your craft any different from that? How is it “just business”? Please.

For some, it’s who they are

Like it or not, what we do and how we earn a living is quite personal to most of us. Even if you’ve arrived at a point where “it’s what I do, it’s not who I am“, the fact that you had to do some introspection to get to that point is evidence that your business is personal. It doesn’t matter what you do. If you deliver firewood that you carefully chose, cut and had the patience to season before selling it, do you toss it over the fence and leave the pile for the owner? Or do you neatly stack it where they asked and cover it with a tarp so it’s dry and ready to warm their home? If you do the latter, is it really “just business”?

Taking your business personally doesn’t mean you’re emotionally fragile. It doesn’t mean you hate your competitors, or that you’re angry at someone who decides not to buy your product. It means your customers’ success is important to you. It means the work is important to you. How you help them achieve success, how you deliver the work, how you care for them over the years. These things tell people what kind of person you are. The people you rescue and the effort necessary to rescue them is important to you – no matter what form that rescue takes. If it’s “just business”, it shows. If it’s “just business”, you’re just a vendor that can be replaced by the next lower priced option. There will always be a vendor that’s cheaper – and it shows. There will always be someone who takes their work personally. That shows too.

If your business is personal to you, that’s OK. It’s your choice. Don’t let someone else take that away from you.

Photo by Benjamin Suter on Unsplash

Categories
Entrepreneurs Management Small Business strategic planning

Selling your company

In Silicon Valley, “exiting” means a company you started / invested in went public or was bought by another company. It’s a time of celebration, reward, & anticipation of the next big project. When you are selling your company, it’s often different. For some, it’s an escape. For others, it’s the achievement of a long-anticipated goal. Are you prepared for it?

Is your company ready to sell?

The process of getting a company ready to sell is really about getting it running smoothly. It’s easy to think of it from the “E-Myth” perspective & focus on “systematizing” your business, but there’s more to it. Put yourself in the shoes of a buyer during due diligence.

They’re looking for proof. Signals that provide assurance.

They want to see data that indicates how your company performs. If you have good, verifiable data, you don’t need to make big claims. Let the data talk. For example: You can probably predict gross revenue over the next 90 days with a fair amount of accuracy simply by gut feel, but can you show data that supports your prediction? How you do this will vary, but many use some form of leads-per-month and conversion rate.

Sidebar: One conversion rate calculation is the number of leads who buy during a period divided by the number of leads you gained during that same period. If you get 1000 leads a month & sell to 520 of them that month, your conversion rate for that month is 52%. Sales cycle length & other factors can complicate rate calculations. Keep it simple.

Selling your company requires leading indicators

Measurable business performance can be difficult to extract solely from financials, which produces trailing indicators. Income history over time is good to have, but it’s a trailing indicator. A trailing indicator is one that documents how the company did last week, last month, last quarter, last year, etc. What about the future?

Buyers want to see leading indicators. Data that accurately predicts future performance.

A leading indicator uses verifiable data to reasonably predict how the company will perform next week, next quarter, etc. Restaurant reservations are a leading indicator: You can predict on average that 78 people will show up for dinner if you have 100 dinner reservations for next week.

Lead counts (inbound phone calls, website opt-ins, etc) function both as a trailing & leading indicator. Imagine you got 100 new leads a day on average over the last two years. Let’s say your close rate on sales hasn’t changed during that period. If your average sales cycle is 60 days long, you should be able to predict income quite accurately for the next 60 days. Why? Because the lead count is steady and so is your close (conversion) rate. While this ignores changes in prices & costs, it reasonably predicts future gross income.

Why are you selling your company?

When someone approaches you about selling your company, it’s often done without provocation. You haven’t listed the business for sale. You haven’t indicated that you’re ready to retire. “I’m not ready“, you might think.

They see opportunity. Sometimes they see synergy with their existing business. Maybe they want to buy more customers. Their reasons are theirs. What are yours?

When you ask owners in this situation what they really want, they’re often unsure. There’s nothing wrong with that. You don’t always know what the next step beyond business owner is because you haven’t thought hard about it. You’ve been focused on running the company, growing it, & taking care of customers. It’s OK if you haven’t put serious thought into what a sale really means – even if you always knew you’d sell someday.

A big check” is too simplistic an answer for some, because the business is a big piece of who they are. Some want a role in the company after the sale. Many don’t. Some care what happens to the company, the customers & their team. Some don’t.

Owners often have a number in mind that they would take. The first number I hear is rarely based on hard numbers, desired ROI / payback period, etc. Remember that a buyer is purchasing assets (most likely) as well as an income, whether they’re an individual or a company.

When it comes to selling your company, your “why” is as important as theirs. Think about it and get your business ready.

Categories
Buy Local Employees Entrepreneurs President-proof Restaurants Retail Small Business

The butterfly effect of a shutdown

This past weekend, my wife & I shared a cold one at a local brewery while discussing the shutdown. Pundits and others wave off the shutdown’s impact as “a small percentage of the Federal workforce”, as if it’s trivial. Trouble is, the headcount of furloughed Federal employees creates a butterfly effect that ripples outward to almost every sector of U.S. business.

Shutdown data & families

800,000 Federal employees are currently going without pay. Slightly fewer than half are furloughed – meaning they aren’t allowed to work. More than half are “essential workers” – required to work during a shutdown. Those working will receive back pay once the shutdown ends, but furloughed employees have no “guarantee” of receiving back pay.

The shutdown affects about 3.2 million employees & family members. My non-scientific extrapolation assumes four members per Federal employee household. There’s income flowing into those households if they have two employed people if one isn’t a Federal employee… maybe. Perhaps the two jobs depend on access to childcare. If one is unpaid, can they still afford childcare? If one employee is “essential”, both still have to work. Result: childcare is necessary. It’s not uncommon for both family wage earners to be Federal employees. I know a number of couples who both work for the USFS or Park Service, having met at work when they were single.

You’ll hear some say these people don’t matter and/or that they don’t care if they’re paid. You should. Their economic activity (or change in activity), regardless of their financial condition & habits, is what creates an economic butterfly effect in towns all over the U.S. (Update: 1/9/2019 from the NYTimes based on US Gov data: https://www.nytimes.com/interactive/2019/01/09/us/government-shutdown-state-by-state.html?smtyp=cur&smid=tw-nytimes )

The local economic butterfly effect

Federal employee families have mortgages, eat in restaurants & go to bars. They get oil changes, rent movies & purchase medical care. These families own businesses (like a favorite local brewery), buy raw materials, & employ people. They buy gas, clothes, donuts, firewood, cleaning services, plumbing / electrical repairs, groceries, etc.

This economic activity creates revenue for all local businesses. If you run a restaurant, bar, or other business near a Federal building – it’s likely that a lot of your business comes from Federal employees. TSA folks get a coffee/meal at an airport business. I suspect that activity will shrink at every U.S. airport.

Tax refunds often pay for vacations, bills, & down payments on large purchases. Loaning the Feds money at zero interest may seem unwise, but the economic impact is undeniable. The IRS does not pay refunds during shutdowns.

The now-closed IRS income verification service will eventually impact home purchase closings. Mortgage approvals use the service for income verification. Home purchases affect local banks, real estate agents, closing firms, home inspectors, and home repair contractors, among others.

Local breweries that can / bottle beer are stuck in line waiting to release new beers. The Federal agency that processes over 16,600 beer label applications per month is closed. Someone sells them hops, malt, yeast, bottles, cans, labels, & graphic arts. Someone manufactures & delivers them. Some puts that income into investments, savings, tuition, a home, etc.

Closed or limited Federal lands access can more directly affect local businesses. In West Yellowstone, Montana Public Radio reported that Xanterra and 13 other local businesses managed to arrange a temporary deal to pay the park to plow the roads & groom snowmobile trails in Yellowstone. While $7500 a day is expensive, the alternative is a lot of lost revenue & people out of work during winter peak season. There aren’t a lot of open jobs in West Yellowstone, so even one business laying off its entire staff could create a cascading nightmare for a small town and its families. A snowcoach business owner in the area mentioned that the deal keeps his 14 employees working. Businesses in the Mammoth, Cooke City and West Yellowstone areas are likely thrilled about the temporary deal.

That option isn’t available everywhere.

Butterflies & ripples are different

In a pond, ripples get smaller in height as they expand their reach toward the shore. When they reach the water’s edge, they might barely be noticeable. The butterfly effect works in reverse. Each wave is bigger and interactions create more waves.

As each of these economic impacts ripples outward, it affects more and more people & businesses. At first, the impact is small. Over time, these small impacts accumulate and start to push family & business finances over the edge. Not just those of Federal families, but everywhere. Want to help out? Buy local.

This highly scientific diagram is an incomplete and highly simplified representation of a part of this discussion. Note that it doesn’t include every Federal agency, nor does it include cash flow lines between families who own local businesses to other local businesses.

Categories
Entrepreneurs Management Small Business

What does freedom mean to business people?

When you ask business owners why they started their company, you frequently hear these words: Freedom and opportunity.

Opportunity tends to have a narrow definition. Someone sees potential in a market and goes after it. Opportunity may also mean the ability to make more than they could make at a job.

Freedom’s meaning seems to vary a bit more from owner to owner, at least as it relates to “I started my business because I wanted more freedom“. Knowing exactly what it means to you is critical. Those specifics will impact on how your company takes shape, how it’s run and eventually, how it appears to potential buyers.

I bring this up because I’ve recently been in a number of conversations with owners who are planning or considering the sale of their business. Some haven’t made the “I want to sell” decision yet. Those who haven’t decided yet are still  focused on improving their business practices. These changes will make their businesses more attractive to potential buyers if and when that time comes.

Working toward a better freedom

When discussing what needs to be done to sell your company, there’s usually a long list of things that the owner wants to improve before looking for buyers. Since your company will benefit from a subset of these improvements even if you don’t sell the company, be sure to focus on those things first.

Why?

First – Anything that makes the company better also improves it for you between now and the time you do close a deal. If you never close a deal, you still benefit.

Second – Some of the things you’d to prepare will only benefit you in situations where an “investor-class” buyer is involved, such as a private equity group.

Selling your business to “someone in your town” is much different than selling it to investors. The more sophisticated the buyer, the more complicated, annoying, and costly the due diligence process will be. Be sure that the prospect is dead serious before venturing into this process because it won’t be fun, cheap or easy – and it’s possible their intentions won’t be honorable. Doing your homework is essential.

How does this relate to freedom? The improvements you make should improve the freedom your business provides – and these things are almost always the same things that make the business more attractive to buyers.

What does freedom mean to you?

Specifically, what freedom does your business provide – or what freedom do you want it to provide?

Whether you are looking at what happens after you sell your business, or simply what will happen once your business reaches the point of being able to support you – it’s critical that you know exactly where you want it to take you.

Does freedom mean more time? What’s that mean for you?

Working fewer hours than at your last job? Working at home vs. having to commute? Being home every weekend? Not having to travel 25-30 weeks per year? Having the ability to come and go at will? Having a more flexible schedule day to day than at your last 8-5 job?

Businesses that provide time freedom typically have a team doing the day to day work. At first, the owner might be managing the team. Over time, owners need to recruit and/or develop someone to manage their team.

Companies structured like this can be easier to sell because they aren’t as dependent on the owner to run them day to day, much less to create revenue. They also provide smoother continuity if the owner dies or is disabled.

Does freedom mean more money? What’s that mean for you?

Does it mean that your income is more secure? More resilient? More diverse? Less likely to be at the whim of someone else?

What aspects of the business protect that income, your pipeline, etc? How resilient is that income if you have to interrupt your work (as owner) to care for a family member for more than a day or two?

Companies where income freedom is more important than time freedom can be harder to sell if the owner is critical to day to day operations.

Either way, the important thing is knowing what you want & structuring your business to support that over the long term.

Photo by USAG-Humphreys

Categories
Amazon Community Entrepreneurs Leadership Small Business

Your town can fuel the rise of two pizza teams

Last time, I noted that Amazon received no HQ2 (second Amazon global headquarters location) proposals from communities in a number of rural states. At the time, I noted that the decision to pass on that opportunity was a well-considered choice.

More importantly, I asked the following question:

What would the impact be if your community had five new, active payrolls of that size five years from now? “Technology” could be software, wood products, water purification, medical research, etc.

Payrolls “of that size” refers to two pizza teams, ie: a team small enough that you can feed it with two pizzas.

I’d like to talk about what communities can do to encourage the formation of two pizza team. Every community can gain from the benefits these teams produce.

You’re not too rural for pizza

Rural communities can benefit from the kind of jobs HQ2 will bring, without bringing Amazon to town. If your community manages to do what’s necessary to help build only one new 300-400K payroll in town every year or two – the benefits are substantial.

The initial question to address is “What should communities do to create a local culture that encourages the formation of these teams?”

Your town already has an entrepreneurial petri dish, but in most cases, new business creation currently depends on:

1) the bullheaded optimism of entrepreneurs (and sometimes, their access to capital), or

2) Desperate situations demanding that the impacted family do something, anything to create an income.

In both cases, these creations tend to be tied to a short list of highly-motivated (internally or externally) individuals. Some families have always started businesses, so their kids learn to do the same. Others are forced into it. Both groups experience varying levels of success.

We want to create conditions that make your entrepreneurial petri dish a bit warmer and a bit more nutritious, making it easier to grow something in it. A stronger entrepreneurial culture is more likely to hatch a creation that can survive on its own when transplanted into the real world.

While funding is important for some businesses, most two pizza teams start off as knowledge-based businesses that don’t need large capital expenses to get started. Capital needs will likely appear during periods of fast growth.

Fuel for two pizza teams

Two pizza teams need:

  • ideas that serve a hungry market
  • people with the right skills and the spare time to devote to their “side hustle”
  • the confidence to adjust & keep trying when things aren’t going so well

Communities don’t need an inventory of unserved ideas to hand out to wanna-be entrepreneurs. Instead, create conditions that consistently produce ideas. These include Startup Weekends, makerspaces, meetups, & coworking spaces.

Almost any clean, empty warehouse / retail space will do. Dedicated, fancy areas aren’t required. Start with a library or business conference room. Meeting in a clean, safe, empty warehouse or retail space is an inexpensive way to get meeting space while raising awareness of a space looking for its next productive use.

The keys? Create a constructive environment for discussion, formation, & execution of ideas – and get the right mix of people there.

How can community leaders help?

Every community has people with the skills to create a side hustle. What they often lack is experience, confidence, a group to brainstorm with and to ask “Does this make any sense at all?”.

What encourages people to have the confidence to suffer through the rough times? Experience. Mentors. Sounding boards. A community of business owners / side-hustlers who are going through & have gone through that bramble of thorns and roses.

Community leaders can leverage their connections to experienced business owners / managers & local angel groups to get them involved and gain access to meeting space. Like-minded people with the right skills & spare time meet each other at these gatherings. When experienced business owners add their voice, their insight & mentoring builds confidence in those trying to figure it all out.

The confidence part is important. When a small group of people is dedicated to turning an idea into a side hustle & then a payroll, they need the self assurance to weather whatever storms come over the ridge. They need know that it’s OK to pivot (ie: adjust their business and business model to reality) rather than quit.

Every community has a meeting space, experienced business people & folks looking to start a business who need advice & critical mass. Get them together.

Photo by cote

Categories
Entrepreneurs

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.

Categories
Entrepreneurs Getting new customers Sales Small Business

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.

Categories
Entrepreneurs Project Management Small Business Strategic Notepad

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.

Categories
Employees Entrepreneurs Leadership Management

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.

Categories
Entrepreneurs Leadership Management Project Management Small Business

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?