Main Street, with a bullet

The phrase "with a bullet" derives from the music industry.  It comes from Billboard magazine, the recording industry's bible in the age before digital downloads, iPods, piracy and business model implosion.  The term means a rapid ascension on a list...in the case of music, "climbing the charts."

"Small business" is number two with a bullet -- up 42 points --  according to Gallup's new study on Americans' confidence in major institutions.  Small business trails only the military in the level of trust the US citizenry places in it, followed by the police and religion.  (Interesting cocktail chatter the members of those groups would share.)

Big business, HMOs and Congress top the he bottom of the list.  I'm sure you're shocked, shocked.

Cinderella men (and women)

A recent survey of small business owners by Citibank generated a flurry of news stories last week, similar to this one, whose headline blared that more than half of business owners have gone without pay; a quarter of them for a year or more.

This is probably news to only those who don't own a small business.  Owning a business -- especially in its formative years -- is not the path to Easy Street that those who don't own or run a business may assume.  Asked to name a movie that epitomizes the small business lifestyle, it surely would not be Putting on the Ritz.

Many owners I work with take far more pride in, and get much more satisfaction from, creating jobs than improving their bank balances.  When we discuss their personal needs and visions, getting rich seldom enters the conversation.

Letting go

"It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change."  — Charles Darwin

A number of discussions over the past few weeks involved business owners in the midst of managing change.

Some notes from the field:

• A professional services CEO has just promoted a staffer into the #2 position, over some longer-tenured employees.  The staffer, great at his former job, is struggling, to the consternation of his boss.  Why? There's no job description for the new position, nor any plan for coaching the employee to succeed in his new role.

• A retailer whose recent multi-quarter run of increasing sales has suddenly stopped.  Her sales and marketing people can't tell  why...they don't have the data on what's changed. Why? They don't have access to the data, which includes the company financials.

• A business owner is in the process of selling his business to an employee/relation. He's agreed to a generous discount from the valuation and to hold a note for part of the price, because "it's family."  But the buyer hasn't spent even one day managing the business ever...never managed a project, never met a customer, never sold a piece of business. Why? "My father just gave [the business] to me, so I figured I do the same."

Smoking "hopium" is not a sound business strategy.  Why? Several reasons come to mind:

So sell me.

Last in a series...

The world of commerce has changed dramatically in the past few years. Technological, demographic, social and economic changes are raining over small businesses like a never ending series of squalls.

The processes and techniques employed by many small businesses were developed in the mid-to late-20th century and built for a “broadcast” world that for the most part no longer exists: large audiences that you can reach and motivate through traditional, one-way “tell and sell” laden with cliches and jargon.

Who are you?

Third in a series...

In 1978, The Who asked the musical question, "Who are You?" While the song and album were an exploration of conflicting progressive and punk rock attitudes, nearly 35 years later their query could be the anthem for current sales and marketing angst.

Gathering meaningful information on customers is one of the most important tasks for small businesses.  It is also one of the most difficult, and therefore, among the most neglected by small business owners. 

At its most basic level, any operating business has two target audiences:  current customers and potential customers.  Most proprietors I meet and/or work with operate under a "build it and they will come" approach of one form or another.  And for most, it works well in getting a business through its formative stages:  establishing a customer base and following, and building a revenue stream.

But to scale an enterprise takes more focus.  After all, your target market is not everyone.

Back to the Future?

Second in a series...

In our last entry,  we asked "are buyers liars?"

Buyers know what they want, and the key to more productive selling is gaining an understanding of the how, why and when of the purchase decision.

But getting that information, now there's the rub.

In some very meaningful ways, the selling today is much more difficult than in years past: while technology has made it easier to identify and communicate with prospects, it has also erected new barriers to making meaningful connections.

For example, there are fewer live gatekeepers (who has a secretary anymore?), but it is arguably harder to break through the electronic ones -- voicemail, email, online social networks.  And manipulation sure doesn't work in either case.

So, while there are new barriers to reaching customers, even when surmounted, the "trust hurdle" is much higher.

Getting past the nose

"Buyers are liars."  How many times have you heard that phrase?

It's a pretty common aphorism in certain sales-oriented industries, such as autos, real estate and home remodeling.

I've heard it thousands of times, usually following a salesperson's failed pitch.  "They said they were interested in a two-story colonial on a cul de sac, and I showed them every one of my listings, but they ended up buying a cape on Main Street from someone else.  I could have sold them that, they just lied to me. They don't even know what they want."

Does that dialogue strike a chord?  Does it seem true to you?  Do you believe that your customers really do not know what they want, or that they lie to your face?

Among professions, only politicians are trusted less than salespeople.  Why is that?  Can it really be true that in a society where the vast majority of our Gross Domestic Product is consumer-driven, that trillions of dollars are generated on deceit or cluelessness?

Punish the monkey

You may not have noticed, but this week our government became more accountable.  Is that a good thing?

The Merriam-Webster dictionary defines accountability thusly:

...the quality or state of being accountable, liable or answerable; especially : an obligation or willingness to accept responsibility or to account for one's actions <public officials lacking accountability>...

Not bad objectives for public institutions, but if you are a human being, specifically an employee, these are not terribly positive, empowering or motivating definitions.  All of the responsibility devolves to them.

Perhaps that's why the "A" word has employees rolling their eyes, running for cover, or heading for the exit:  many view accountability as just another modern, Newspeak business term for blaming, finger-pointing and butt-covering.  Punishment, in other words.

Is it safe?

Growth is always a hot topic at the monthly TAB meetings I facilitate:  strategies, plans, tactics, obstacles, wins, losses, etc.

Most of our businesses are doing well, but some have seen their top lines flatten and a very few have experienced sales declines.

Bottom line-wise, our business owners have seen their operating costs escalate.  The cost of goods, taxes, health care, energy, professional services have all been rising. Most have been very good at maintaining their margins by controlling their variable expenses.

But nipping and tucking only gets you so far, as we are finding out in the debate over growth versus austerity at the national and international level.  You can't cut your way to growth over the long term.

Beneath the waterline

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As you may have heard if you weren't stranded on an ice floe, the supposedly unsinkable Titanic went down in the North Atlantic exactly 100 years ago this weekend.

It remains an epochal event; one of the greatest catastrophes of the 20^th century.  At the time, it was “unthinkable,” "impossible."  A black swan. 

Until the details emerged.  With the benefit of hindsight, it all seemed inevitable:  corners cut, disbelief suspended, expert opinions ignored.  This is partly why Titanic has transcended the literal and become metaphor for commercial hubris, institutional blindness and human fallibility (and more, to some.) 

Empowering thoughts

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People start their own business for a number of reasons -- some to follow a passion, some always dreamed of being their own boss, while others were in search of flexibility that they didn’t find in larger organizations. Those who grow beyond solo entrepreneurship will quickly find out that getting the right people on the bus is even more important when you’re driving a small scale version. When on-boarding a new employee, consider this:

“If you hire people just because they can do a job, they’ll work for your money. But if you hire people who believe what you believe, they’ll work for you with blood and sweat and tears.” (Simon Sinek, author of Start with Why.)

Ensuring that you find people who believe what you believe requires that you have a clearly defined vision [see this earlier post]. You also need to choose those who are able to multi-task and not worry so much about staying in the confines of their role, and to “jump out of their seat” when needed. To see what a fully-engaged employee looks like, check out Jeff Haden's 8 Qualities of Remarkable Employees.

Haircuts, Lipstick and Yogi

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One day recently I dashed into a local haircut shop shortly after it opened, hoping to beat the rush and get a quick trim before a meeting.  It had been a while and I was looking and feeling shaggy.

The store is one of those national franchise chains that have grown, weed-like, to seemingly inhabit every local shopping center.  It has been hawking its franchises on CNBC, LinkedIn, and other media.

There was no one in the store when I entered…no customers and no employees up front.  After a couple of minutes, a young woman (I'll call her Abby) came up from the back and apologized for my wait, saying, “it takes us a little longer to open up because we are short-staffed these days.” 

My family and I patronize this store frequently.  The staff is attentive, friendly and professional.  The cost of its services are reasonable, the cuts competent and the customer loyalty program keeps us, well, loyal.  The store has been popular and can get crowded at peak times, hence my early morning visit.

Information duncity

Did you ever notice how some memes seemingly appear out of nowhere, then are suddenly ubiquitous -- like the car you never noticed until you bought one and now it seems everyone owns one?

I recently wrote about how failure can actually lead to success, and how "one's errors are a portals of discovery."  Turns out lots of people are talking and writing about mistakes lately.

One of the best pieces I've seen is one from TAB colleague John Dini, who recently wrote on the value of mistakes in business. His advice to start a "mistake budget" is one that I will steal gratefully, with generous attribution.

However, mistakes aren't always all they are cracked up to be.  In this unforgiving economy, we need to maximize "good" mistakes and minimize the "bad" ones.  We need to make better decisions.

And there's the rub.

Heat Burns

It's been an interesting week in damage control.

• Goldman Sachs, one of the mercenary handlers of the "animal spirits" of capitalism, found itself the subject of a lovely parting gift from departing employee Greg Smith.  (Ouch, that one will leave a mark.)

• Dollar Shave Club, whose funny, snarky introduction generated a viral sensation and tons of new customers, found that operating the business was a little trickier than creating a funny ad:  they announced that they can't ship initial orders on time because they weren't prepared for the demand. The impact: to be determined.

How well are you prepared to defend yourself in the court of public opinion?  Every organization -- whether a globe-straddling colossus or a start-up just launching itself -- will face an emergency at some point.  After all, accidents happen, things break, smart people do stupid things and sometimes good people do bad things -- occasionally on purpose. As the saying goes, "stuff" happens.

You say you want an evolution

Change:  there are few words in the human lexicon that evoke more angst than this, both good and bad.

Strange, that.

Change is a constant in our lives.  As constant as the dawn or the sunset.  Every day is different and change is an ever-present aspect of living.

Change is feared because often we are not in control of it, especially in business. Key employees leave, new competitors emerge, customers disappear.  (These changes are in your control, but that's the subject of another post.)

It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change. Charles Darwin

Change forces us out of our habits.  And habits are a basic human mechanism for dealing with the  complexities of everyday life.

In a recent book, The Power of Habit, NY Times business writer Charles Duhigg explores the science behind why we do what we do (and how.)

Land of the free

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So, how did you spend your free day on Wednesday?  You, know, February 29, aka Leap Day.

Ladies, did you channel your inner Sadie Hawkins?

Dudes, did you take it head on, mano-a-mano.

Was it a day of routines, deadlines, accomplishments, chores, sports, striving.  Just another day; one of 365 366? 

Pity if you didn't leverage this quadrennial opportunity. 

It was FREE.  What do you mean that  you didn't take advantage of it?  What's wrong with you?  Don't you love free stuff?  Doesn't everybody?  Didn't you get the memo?

It seems that there's a offer of "free" everywhere you look:  Buy One/Get One Free; Free Estimates; Free Consultation; Free Delivery.  Consumers lap it up.  And why not, it's FREEEE!

No wonder the country is broke.  We're giving it all away.  Increasingly so.  Hard to make a buck that way, isn't it?

Failures and other success stories

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It took Thomas Edison ten thousand tries to perfect the light bulb.  It’s a, if not the, classic story of overcoming failure through perseverance.

But the reality is that the founder of GE had resources unavailable to most private business owners today.  It begs the question:  how many failures can you afford before you get it right?  Certainly, it's far less than old Tom.

Failures are part of business, and life.  If we are smart, we learn from them. If we are not, we are soon out of business, and sometimes out of life. 

But let's not dwell on the negative.   There are plenty of motivational and instructional quotes on the value of trying but failing, one of my favorites being "A man's errors are the portals of discovery."

If failures are inevitable, can we minimize their occurrence and impact on our businesses and our lives?  How do we turn them into teachable moments, into Joyce's "portals of discovery?"

Ready, Fire...

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I played a lot of sports when I was growing up.  Baseball, hockey, football, lacrosse.  I was a decent enough baseball player, but at 5-foot-6, I harbored no illusions of playing at any high level of competition.   (Especially after watching "failed" major league pitchers up close and personal during one trip to Spring Training.)  In lacrosse, I was good enough to play at the Division I collegiate level, but not as a starter.  

I loved these sports, practiced diligently and consistently, and worked with my coaches to get better.  But at a certain point, I did not get any better:  I reached the peak of my abilities.  My potential was exhausted.  So, I focused my abilities and competitive drive in other, more productive areas.  I fired myself, so to speak.  So, it goes.

Several of my TAB members have been struggling with "people issues" of late.   Hiring is one of the three challenges (the others being sales and marketing) that form the "trinity" of core issues for most small business owners. 

Making the wrong hire is incredibly costly, for businesses small and large.  We're talking tens of thousands of dollars.  I won't list the studies and commentary here, but type "cost of a bad hire" into Google and you'll get 116 million results.

Why is hiring people thing so hard?  For one, it's "because we hire people for what they know, but fire them for who they are," according to one TAB member.

Going for broke?

Last night's Super Bowl was a thrilling one:  tightly-played between evenly-matched teams.  It came down to the last second,  a desperation heave -- a "Hail Mary" -- hoping to turn defeat into victory.  Didn't happen...for the Patriots, anyway.

But as the coach said after the game, there were "100 plays" that he'd like to do over again.  He wasn't so much talking about the strategy or design of any of the plays, but the execution.  After six months of practice and playing, it came down to the last minute and a couple of plays that didn't work out quite as planned.  Any of them could have changed the outcome.


Stuff happens, as they say...all the time.  In football, in business and in life.

But while there are many parallels and analogies between football and life, as a business owner or leader, if you are in in the position the Patriots were in with just over a minute left in the game, it is a classic Catch-22 if ever there was one.

In business, if you need to go for broke, the likelihood is that you already are well on your way to getting there.  If you are between a rock and a hard place, it is a much different reality than a football game where everyone goes home a bit richer.  

In _____ we trust?

Trust is on the wane. 

This is probably not a big surprise to you.  Given the economic and social change occurring globally, and the stresses that change induces, a fair amount of dislocation and disconnection is natural.

But it seems deeper than that. Everywhere you turn there seems to be another poll or study showing a dramatic decline in trust and a rise in skepticism.  (Disclaimer: I worked at Edelman back in the 90s.)
 
The state of trust in the world, or rather the lack of trust in our institutions and leaders, is disturbing.  And certainly not without cause:  the breadth of bad behavior is staggering and seemingly all-encompassing.  Type "list of recent scandals" into Google, and you will relive a cascade of misdeeds by corporate, academic, media, sports and religious institutions and individuals. 

The skepticism and lack of trust is bad for business.  Marketing 101 teaches us that for a business to succeed over the long term, it must be 1) known, 2) liked, and 3) trusted.

But it's not just big business.  Some of the worst offenders are smaller enterprises, the mom and pop operations that should know better, because they need every customer.  We all have stories of local businesses that we don't frequent any more because they changed for the worse and broke a trust that had taken years to build.