Trust or consequences?

'Tis also the season of boorish behavior, it seems.  Is it the solstice?

While the perception is that inexcusable behavior rises as we get into ho, ho ho mode, perhaps it's just made more visible because acting badly doesn't jibe with the Joy to the World, Season-of-Light narrative that's all around us.

But hey, neither does crass commercialism.

The silver lining is that there is a considerable, growing and very visible backlash.  With the rise of social media, uncivil behavior is not going unchecked. 

To wit:

• A FedEx employee made an un-Santa like delivery, (both in style and in being caught on video.) FedEx took quick action in a direct and forceful response.

• JP Morgan Chase CEO's Jamie Dimon was called out in Josh Brown's zeitgeist-lassoing letter for his peevishness at being castigated for being "successful."

• As Black Friday brings more and more stories of disturbing behavior among many, people are documenting it and putting pressure on institutions to check it.

It is a good thing -- to borrow a phrase from a convicted felon -- that we're not inured to such bad behavior, even as it seems pervasive. There are still affirming random acts of kindness being undertaken, as with the K-Mart angels making layaway payments across the nation.

The business lesson?  Only those organizations with a deep reservior of trust, rather than a foundation of sand, can withstand the very public backlash that's following these aberrant incidents.

Be Real and Get Real People! (Companies are people too, at least in this instance.)  In 2012, just be trustworthy.  Please don't waste our time and your money trying to manufacture trust.  Invest in earning it.  There's a much better return.  

Marketing guru Seth Godin nailed it in his blog post homage to Steven Colbert, "Trustiness."

 It's incredibly difficult to build a civil society on the back of "read the fine print...." When we have to spend all our time watching our back and working with lawyers, it's far more challenging to get anything done--and it makes building a business and a brand infinitely more difficult.

The question that needs to be asked by the marketer is, "are we doing this to create the appearance of trust, or is this actually something trustworthy, something we're proud to do?"

 The public is watching and they will out the fake, the false and the disingenuous. 

Don't dream it, be it. 

Best of the Season and Happy New Year to all.

The enemy: Embrace or dispatch?

Competition and Competitors.  It's been a topic of conversation at our TAB Board meetings in recent weeks.

While there are as many different views on the subject as Baskin-Robbins has flavors, they often settle into two main camps:  friend or foe.

Here are two favorite quotes that sum up those competitive mind-sets:

• "I will destroy my enemies by converting them to friends." - Maimonides

• “Every normal man must be tempted at times to spit on his hands, hoist the black flag, and begin to slit throats.” - H.L. Mencken.

In reality, it's a little less sinner or saint.  Most of us belong to trade associations or professional groups where fraternization is not only encouraged, but mandated.  Many of us also get work or referrals from within our industry, often from competitors.  "Coopetition" has become a standard business practice.  And if you have a sale as the exit plan for your business, your most likely buyer is a competitor.

One of the legends of the industry I grew up in had a standard practice of lunching with his competitors on a regular basis...he figured there was enough business for all, and that each of the firms were struggling with the exact same issues.  As a result, he built not only a business, but a legacy.

How do you deal with your competitors?  Do you treat them as the enemy, view them as irrelevant, tap their brains for knowledge, keep them at arms-length?

Do you keep to the advice of Don Corleone?  Or do you have a Blue Ocean Strategy approach?

Today's competitor may be tomorrow's client, or your next CEO.  In an ever-more networked, inter-connected and constantly-evolving business economy (especially in a local or regional commercial ecosystem), strategic cooperation can maximize value in a way that a winner-take-all mentality cannot. 

Besides, spitting isn't hygienic.

Seeing through it all

The word perspective is derived from the Latin word perspecire - to see through.

Today's meaning has morphed, as so many words have, from the original use or intent.  We do not so much look to see through things any more; we are more apt to see past them, or dismiss them outright.

Perspective, whether in business, life or art, is critically important to making good decisions.  Our individual views of events, intent, and values (to name just a few) are radically different from one another; yet we often don't stop to consider a frame of reference not our own.  This myopia often leads to an erroneous view of the world, or worse.

In his new book on the brain and its workings, Nobel laureate Daniel Kahneman describes the workings of our brains as two systems (named, appropriately, System One and System Two.)  System One is fast, sub-conscious and primitive; System Two is rational, methodical and conscious.   You can read more here. 

System One is our instinct, or gut.  How many of us rely on our "gut" in making decisions? According to Kahneman, System One is also very, very error prone.  But System Two -- our thinking brain -- also has its faults:  it's lazy and an energy hog.  So yes, thinking is hard, hungry work!!!

But in order to make good decisions, the two systems need to be engaged: we can not rely one one system of thought alone.  As the Latins knew a couple of millennia back: we need more than one perspective to see through the biases and illusions that we all carry but seldom recognize.

Can you believe your eyes?

So how was YOUR Black Friday/Small Business Saturday?  Oh, was there a holiday in there?  Sorry...hope you enjoyed your feast.  How many ways did you find to serve turkey leftovers?  Were you as glad to get back to business as I was? 

There seems to be as many opinions on the opening of the 2011 holiday selling season as there are pundits pontificating and organizations orating.  Sales were up 16% on Black Friday, or they were up 1.9% for the three-day weekend, or don't pay any attention to any of the data.

"Facts are stupid things," Ronald Reagan once misspoke.  He also said, more aptly "trust, but verify."  There are plenty of examples of the dangers of focusing on the wrong thing, one of my favorites being the famous "monkey business" experiment. 

The bottom line is that the most pertinent data are yours:  your Key Performance Indicators, and how you use data to guide your business decisions.  KPI's can be a powerful decision-making tool, when combined with a proper business plan, and they need not be elaborate to be effective; in fact, just the opposite.

For smaller businesses especially, data are essential for being able to separate fact from fiction and to verify the existence of any of 800 lb gorillas sitting in our midst.

Reasons to be thankful

 A short pre-Thanksgiving post., before I don my apron.

I am thankful for many things, mostly non-material, e.g., health family, friends.  I am also thankful to be living now, and in this country, where despite our many all-too-real difficulties, we have much to be grateful for, and to look forward to.  

Despite the gloom, and the real differences among us, we do keep advancing, making life better for most of our citizens.

Focusing only on the positive, I think of what did not exist (either literally or in the public consciousness) 10 years ago, when we were giving thanks in the aftermath of 9/11.  Among the advances which have had a profound impact on dissolving the limitations of time and distance and thus brought us closer by allowing us to share more of ourselves (whether profound or trivial) are:  social networks like Facebook; smartphones; blogging; YouTube; wireless networks; broadband internet; i-pads, pods, phones; internet activism. 

I do believe that the best is yet to come.  It may take some time yet, but we’re working on it for sure.

Happy Thanksgiving.

Thinking Small

Everyone loves small business these days:

• Both sides of the political aisle are looking for ways to foster growth and entrepreneurial drive;
• The 'buy local" movement has gained traction across the country;
  
• Big business has given small business its own day.

Isn't it nice to be smothered with love?  Small business big-brotherhood is better than a Tiger Mom, I suppose, but will these grasstop, macro efforts impact the "mom-and-pop" operations that make up most of the employment base of this country?

Color me doubtful.  For a very simple reason:  We think too big.  We are a nation of ideas.  Ideas are not in short-supply; they are like opinions -- everyone has one, at the very least.  Big honking ideas.  And, sadly, big ideas are a dime-a-dozen.

Small business owners certainly don't lack ideas, or the optimism, desire or drive to improve their business.  What they lack are the resources to get their ideas out of their heads and into play in their operations.   They lack the nuts and bolts process to put them into practice.   And they lack the ability to focus on fewer, rather than more, things.  (Funding plays a part, of course, but that's the subject for another post.)  

How does one decide which ideas are worth pursuing and which are non-starters?  How does a business owner decide what his/her priorities should be?

Let's get small:  

• Start with one clean sheet of paper.
• Ask yourself, "what is the one factor that is most critical to the success of my business in the next 12 months, that I can directly control?"  Write down the answer.
• Ask yourself, "What are the 3-5 actions I need to take to achieve that goal?" Write down the answer.
• Ask yourself, "What do I do that does not contribute to achieving that goal?" Write down the answer. (This may be the longest answer by far.)
• Ask yourself: "Who can I bounce my ideas and plans off of?" Write down the answer.

You may find that this simple exercise helps you focus your thinking on your true priorities, eliminating the unproductive tasks that distract you from putting our ideas into action, and identifying the resources that you must add to succeed.

The devil, as they say, is in the details.

Sticks and stones and carrots

I know a number of businesses that are looking for sales help.  By this I mean outside sales -- the "hunters" -- not the inbound sales reps that field incoming inquiries or walk-ins: the "gatherers."

Hunters are hard to find.  One of my colleagues (a sales training expert) posits that less than 10% of sales people have all of the skills and attributes to be successful hunters.  Hunters are also notoriously hard to compensate and motivate.  The conventional wisdom is that if you do not restrict ability to earn, the best will come knocking on your door.  Conversely, if the best you can compensate an outside salesperson is $50,000, then that's the level of professional you will get.

In other words, the standard industry practice is that the best sales pros are motivated solely by money...if you build a compensation system that allows salespeople to earn up to the limits of their ability, it should be a "win-win" for salesman and business owner.

But is that true?

Daniel Pink, in his best-selling book Drive, argues that "the secret to high performance and satisfaction—at work, at school, and at home—is the deeply human need to direct our own lives, to learn and create new things, and to do better by ourselves and our world."

Pink's conclusion is that commission-based sales systems are counterproductive; that the old carrot-and-stick, punishment-reward system of corporate motivation systems run counter to what the science shows.

There are a number of videos of Pink speaking on the subject, the best (in my opinion) can be found here.

Pretty mind-bending, but then again, most game-changing ideas are. So, how will you manage and motivate your stars -- the ones your business depends upon?

Talking trash

I was reading a post on one of my favorite blogs -- The Big Picture -- which included this description of the latest stock market surge:  "An excess of pessimism led to the breakout to a new trading range..."

That's a new take on the old stock market adage about higher prices being driven by "more buyers than sellers."  And both are just a wag's way of saying, "Who knows?"  (And if the pros don't really know, it's time to find a new game.)

So how does this relate to your business?  In two ways:

1. You cannot afford NOT to know why more customers are not buying -- unless you are on Wall Street and get paid whether your customers buy or sell or by simply fleecing your herd.  If you are guessing, you are losing market share.  And in today's environment, that's a death sentence.
2. You cannot afford to be pessimistic.  If your head is full of dark thoughts, that storm will consume you and your business.  See item #1, above.

There's a term used in selling and sports (and probably other disciplines) that describes a negative state of mind; the doubts and bad attitude that form a pessimistic view.  It's called "Head Trash."  We all suffer from bad days, but most successful business people have found a way to overcome persistent head trash.

• Some continue beatings until morale improves.  

• Some use a Reality Distortion Field.  

But most small business leaders have a less sadistic approach to accentuating the positive. Some use affirmations, others find comfort in physical endeavors, or family, or simply work itself.

What's your coping mechanism?  How do you stay focused on the positive?

Just a bit outside?

I’ve always been bothered by the concept of the “elevator pitch.”  That’s the up-to-30-second sound bite that you use to encapsulate your entire business value proposition to a prospect whose attention you have for but a moment.  The idea is to get them to ask you for more information; to jump-start a meaningful conversation.

It goes something like this:

Q:  What do you do?

A: “I’m a banker’s best friend.”

Q: Huh?

A: I make businesses perform better and their owners’ richer, and therefore, better customers for banks.

Q:  Huh?

A.  I’m a business coach.

Q. Oh! (Heads for exit…)

As a marketer, I know how difficult it is to capture the attention of a prospect.  It is essential in this era of communications carpet-bombing to stand out, to differentiate yourself and make your organization memorable.  My wife met a real estate salesman who handed out a business card that read “I sell homes, mother-----.”  Memorable indeed and certainly in less than a half-minute.  But effective prospecting message?  Not so sure.

And now there’s a new twist on the elevator pitch: answering the question with a question.  “What do I do?  Before I tell you, can I ask you…” If I wanted to be answered in that way, I would have said, “Hi, can you ask me a question about me?”

Question:  in a face-to-face situation, which is likely to make a better first impression, an artificial device or a genuine human-to-human interaction? 

Answer:  People HATE being sold.  The 30-second commercial, in whatever form it takes, is a selling device and people have figured it out and will tune you out.

If everyone has been trained to respond to the “what do you do?” with a short burst of captivating wit, it negates the uniqueness and effectiveness of the maneuver, unless you are pretty proficient in pithiness.

For the rest of us, being real is the best course.  Respect your audience.  If what you do has value, you don’t need to hide it behind artifice.  When making connections, the truth will out.

I drank what?

This  post's title is the punchline to one of my favorite bad jokes: "What were Socrates' last words?"  It came to mind when I read this article in Forbes on the state of US manufacturing titled "US manufacturing is not dead."

The story is accompanied by a pretty amazing graphic (I'm into chart porn).  The upshot of the chart and story is that the US is still the leading manufacturing nation in the world, and by a considerable margin, the most productive.

Manufacturing jobs, are another story.  They are in long-term, irreversible decline.

The Forbes story notes:  "Yes, rising productivity kills jobs—certain kinds of jobs.  David Ricardo (and 200 years of evidence) would say those jobs eventually get replaced by other kinds of jobs (in America, namely in the services industries). Said another way, in America in 1900, 50% of Americans worked in agriculture—now about 2% do, but we produce exponentially more food. Same thing."  And as the conclusion at the bottom of the chart notes, there are long-term benefits from producing more with less.

So what does this have to do with long-dead Greek philosophers?  That the benefit often gets lost in the pain of the execution.  Or maybe that suicide isn't painless, and as Socrates actually noted as he neared his death, a debt needed to be repaid after he passed.

Technology and productivity is a dual-edged sword (or cup of hemlock, if you will) for our communities in general and business owners and employees specifically.  The ability to  grow and improve  efficiency has been made possible by the technologies developed over the past decade.  Yet, this progress accelerates the creative destruction of capitalism and the human toll is evident;  we are living through a mass dislocation similar to our evolution from an agrarian to industrial society a century ago.  Our skills have not yet caught up to our capabilities.

As we look to leveraging technology to better measure and manage our enterprises, we need to be mindful that technology's successful implementation and integration requires the managing, motivation and development of flesh and blood and not just investment in silicon and plastic.  A debt remains to be paid and that's no joke.

Which line is it, anyway?

The top-line is the number one topic of conversation at all levels: at our TAB Board meetings, in discussions I have with business owners and managers, and given the nature of our economy, our national discussion overall.  How do we grow?

For many, growth is synonymous with being more successful.  I once worked for a man who measured the success of his firm...at least how he bragged publicly...by talking about how many employees he had.  That would have been appropriate had his vision been to provide employment opportunities to as many people as possible...but he was more about comparing the size of his staff.

Size is a relative measurement, after all.  Big or small in relation to what?  Will more revenues equal more profits?  The answer is... not necessarily.  Conversely, we've all been feeling the impact of the "cut to grow" mentality in the corporate world (now being emulated by a government near you.)  Short-term profits may improve, but at what long-term cost?

The New York Times recently captured the business owner's dilemma in an excellent "You're the Boss" column.
 
What's your vision for your company?  What do you you value most?

• Do you want to be the biggest or the best?  Are they compatible or competitive notions?
• What kind of business do your customers think you are:  low-cost or value-added, or somewhere in-between?  
• Should you raise prices or hire new sales staff?  Which will be more profitable?
• Do you have the staff, processes and infrastructure in place to grow?  
• What will growth cost you? Will increased revenues drop to the bottom line?  
• Will growth change the customer experience?

The Clash once asked musically, "Do I Stay or Do I Go?"  So what's the answer?  As always, it depends on you.

Something strange indeed

For business owners who have had the old Buffalo Springfield tune running through their heads, The NY Times reports today on what's been happening here. The Census bureau has found that incomes have fallen more since the official end of the 2007-2009 recession than actually fell during the recession. Peak to trough, median incomes have fallen nearly 10%, one of the largest drops in decades.

So again, data (and legions of economists and statisticians) are confirming what has been evident in many of our communities: the recession is really not over, at least in terms of consumer spending, the critical success factor of our local, regional and national economy.

During the Great Depression, one entrepreneur famously went about his business by focusing on "where the money is." What about you? Do you know where the (legal) money is to sustain your business?

The implications can be profound. In search of sales, many organizations begin to compromise on pricing and thus undermine their value propositions. Often it leads to a fatal spiral, where quality is compromised by the cuts needed to keep margins up in the face of lower prices, which leads to further cuts.

How well do you know your market...how tight is your focus? Are you wasting time (and money) selling to prospects that not just won't, but can't buy? Tough questions, but ones you should be asking yourself every day as we slog through this economic morass.

One head, many hats

It's 5:30 am.  You have been up for a while, waking well in advance of the alarm (which these days is more of a mockery than a fail-safe -- who sleeps?)  You face a full schedule of meetings, a lengthening list of to-dos (mostly business development priorities) a deadline and an evening community-service meeting.  The day is packed, and that's just running the business...there are kids to get out the door, spouses to converse with about the contractor not showing up -- again -- (you'll text her because you are leaving early and she's arriving back from work late:  you need that second income), oh and the pets need to be let in/out, and you have to remember to get gas for the lawnmower because the lawn hasn't been mowed in two weeks because of all the rain and the weekend has been completely taken up by baseball practice and the 100-mile bike ride fundraiser and the sleepovers, so you didn't get ahead of all of this last weekend, but tomorrow's another day and I will try harder to get it all under control.

And you love owning your own business, despite the fact that it is 5:30 am again and you've awoken before the alarm...

Demand, Part 2

Regardless of the endless stream of negative news and commentary on the economy, unemployment,  the 2012 Presidential election, the weather, you should be focused on executing your well thought out and intelligent business plan.

You do have a plan, don't you?

Oh, well don't worry, you are not alone. 

Over the past few months, starting in the early summer, the discussions I have had with many owners and managers of smaller enterprises has centered on increasing sales/revenues.  (A statement that will shock few people.) Most have trimmed all of the fixed costs that they can out of their business and are running lean...nearly to the bone.  And a few are actually hiring, albeit slowly, cautiously.  But many don't have an actual plan that leads their decision-making.  This leads to free-lancing, or worse, inaction.

While it may seem counter-intuitive, planning for smaller enterprises need not be an elaborate affair...in fact to be effective (translation: to be actually acted upon) a plan needs to be rather simple.  It cannot mirror the "business plans" that one develops for a funding agency or in entrepreneur "boot camps," documents which are written then put on a shelf by most business owners.

An effective plan acts as your script, or your playbook (actually more like the laminated one-page crib sheet that football coaches carry on the sidelines.) 

A working, workable business plan incorporates the following elements:

1.  Critical Success Factor (CSF) - The factors that are so critical that your company will not succeed if these factors are not satisfied, e.g., Increase Sales.  CSF's are conceptual; the frame for your goals, which are more specific.  Most have no more than two or three.
2. Goals - A restatement of the CSF that is specific, measurable and attainable.  Directly relevant to the CSF, above. Increase sales by 10% by year end 2012.
3. Strategies - Your plan of attack; how you will achieve your goal.  You may have several  strategies:  Increase pricing; expand product/services; hire salesperson.
4. Action Plan(s) - You must have at least one  action plan for each strategy, but no more than 2 or three -- too overwhelming for most, unless you have managerial staff with time on their hands (a subject for another post.)

Action plans should  follow the SMART planning construct:  Specific, Measurable, Achievable, Relevant (to the goal) and Time-bound.

Planning leads to a better leadership attitude.  It allows you to:

• Think strategically rather than working on “the idea of the week”
• Focus on building teams rather than trying to do everything yourself
• Motivating those responsible to get timely results
• Creating a results oriented culture that embraces and drives change

Remember:  Proper planning prevents poor performance!

Demand, Part 1

Recent economic reports -- and the projections for the remainder of 2011 and early 2012 -- have been grim.  The Federal Reserve added a new "twist" to its arsenal of unconventional tactics as it downgraded it's economic view.  Doom and gloom is pervasive, economically speaking, it seems.

There are many aspects of the world that can and should worry us as human beings.  But as business people, our success is directly dependent on our ability to focus on the drivers of our organizations and not be distracted.

What's a business owner to do?  Turn off the telly...delete CNBC from your bookmarks...stop worrying about the macro.  Why?  It's not in your control.

During the latter days of the year, you should be focusing on a plan for stoking demand for YOUR products.  That's totally within your control.

Start with your customer base...when was the last time you talked with your customers?  Have you analyzed your sales; do you understand what they are buying and why?  Have you conducted a marketing review and ROI to determine if you are in synch with buying patterns and demand.  Do you know which 50 percent of your marketing spend is being wasted?

Don't have a plan?  In our next post, we'll share some tips.

Ownership attitude

At our monthly TAB Board meetings, we usually start off with the host of the meeting sharing with the group a quote, phrase or story that has some personal meaning.  At a recent meeting, the quote and story pertained to perseverance; how not giving up can be the difference between success and failure.

The story evolved into a discussion of the attributes and attitudes that characterize success, especially among business owners.  It was a lively dialogue, and ended up on "ownership attitude" and the difference between owners and  employees. Like leadership, and more famously, pornography, the ownership attitude may be hard to define, but easier to identify.

Owners are independent, strong-willed, risk-taking, opinionated, combative, willful, perfectionist, far-sighted, deaf, myopic, sleep-deprived, the first out-of-pocket but last to be paid, and most often not millionaires-or-billionaires.

While not exhaustive by any stretch, what these attributes illustrate is that owners are NOT employees.  In fact, they make HORRIBLE employees, by and large. 

Do these traits describe you?  What others would you contribute?

On 9/11

Many say they hate change and no doubt that is true. But who hasn't changed in the last 10 years? I have.

I have changed in ways both profound and subtle; physically and emotionally; personally and professionally. Like it or not, change is a constant in our lives.

On 9/11/01, I was a senior executive in NYC at a large international consultancy, with about 40 in my group if memory serves. Other than the occasional fire drill, perfunctorily practiced, we had absolutely no preparedness for an incident like the terror attacks that day. No escape plan, contingency plan or formal communications tree.

I like many others, lived in blissful (willful?) ignorance. Professionally, I never met a planning exercise I wouldn't run from. On 9/11 I had never felt so unprepared, so exposed. Thankfully, we were all safe from harm, and managed to not harm ourselves in the ensuing chaos. Never again, I vowed.

Today, I am Mr. Plan. I have to - at the very least - sketch out any path from A to B that I am considering, get down the to-dos and task lists and outline my SMART goals. I have learned that planning is essential to managing change and embracing the ambiguity that confronts us daily.

It's one of my learnings from 9/11. What are yours?

Questions, questions...

I'm often asked (or overhear when I'm eavesdropping) "How do I sell more," or "How do I get my salesperson to sell more."  I always answer by asking "Who's buying now, what are they buying and why?"  Very few business owners or CEOs have a real handle on who their customers are, what motivates them and why.  One owner I know refuses to even ask his customers, believing it is an intrusion.  Oy!  Tip:  your customer has already made a commitment to you with their initial purchase...it is up to you to turn that into a relationship. Ask them how you can best serve them...they will be delighted to tell you what they think.

Overcoming disaster

Another hit to the backbone of our economy: many businesses took a big blow in and around the NY Capital region (and elsewhere) from Irene.  A lot are up and running again, but as one owner put it to me, "The costs didn't stop; the income did.  For a small business in this environment, that hit is very hard to overcome.  But we'll try and push forward."

What to do?  Many businesses are already running as lean as possible, and agonizing over every cost and potential investment. A disaster recovery plan, no matter how well thought out, can't overcome limitations of size and inadequate reserves.  Indeed, for some, proper insurance and the help of the government may not be enough to fuel long-term health.

Our local citizens can and must help....  Here's an idea...instead of using the web, going to a big box or mall...for the rest of the year, find, patronize and support local, and locally-owned businesses.  Call your local business association and Chamber of Commerce and get a membership list.  Share it with your friends.  Tweet it, "like" or "friend" a local business.  Get the word out and take action.  Support your neighbors and rebuild our communities.

Get out and dance

An active web-marketing capability is not a luxury or an elective...it is a necessity, a utility, like heat or electricity.  I meet business owners everyday who are still "trying to figure this social media thing out."  A few are still debating whether they need a web site.  It's like shy adolescents at a school dance:  standing on the sidelines watching others have all the fun.  Ladies, Dudes:  You've got to get on the floor to score!

Welcome to CEO Bootcamp blog

Welcome to CEO Bootcamp.  A blog of tips, advice, inspiration and an occasional kick in the rump for those leading private businesses.

We may be the backbone of the US economy, but sometimes we all need a little tough love.