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.

Ode to the vision thing

Ok, not really an ode, at least in the English tradition. More a lamentation.

It's been 25 years since the "vision thing" died at the hands lips of the first President Bush.  That phrase, according to Wikipedia, has now become a metonym for an inability to articulate the bigger picture.

A few years later, Lou Gerstner, then recently-installed CEO of a then-troubled IBM, was famously quoted as saying: "the last thing IBM needs right now is a vision."

What is it with vision that evokes such a roll of the eyes and shaking of heads among many leaders, business owners, CEOs and other organizational chiefs?

For many, having a vision recalls images of being lost in the desert, returning with a call to action from some higher authority.  For others, it may conjure images of the Summer of Love.  No business strategies emanate from either of those retreats.  No increased sales or profits, either.

So then, is myopia a virtue for a leader?  Not really, as target fixation often leads to missing the bigger picture.

Let's turn again to Gerstner, and examine his full "vision" quote, delivered at a news conference following his first 100 days at Big Blue:

‘There’s been a  lot of speculation as to when I’m going to deliver a vision of IBM, and what I’d like to say to all of you is that the last thing IBM needs right now is a vision [. . . ] What IBM needs right now is a series of very tough-minded, market driven, highly effective strategies for each of its businesses – strategies that deliver performance in the marketplace and shareholder value."

Later, Gerstner wrote in IBM's 1993 Annual Report, "Some call it mission, some call it vision. I call it strategy."  Few would argue that Gerstner's vision/mission/strategy focused IBM on a successful path forward, when many other US commercial icons have failed to make the turn. 

Always be losing?

The movie Glengarry, Glen Ross was on TV recently.  I watched for a few minutes.  I always do when I spot it.  It's like a roadside accident; disturbing, yet hard to avert your gaze. 

The most famous scene in the film is when Alec Baldwin's character comes to "motivate" the under-performing sales team.  "Always be closing," he spits.  "Coffee is for closers," he sneers.  It is the epitome of the "man-up," high-pressure school of sales.  It resonates because we recognize and empathize with both sides of the dialogue.  I guess that's why the play won the Pulitzer Prize.

"I need to increase sales," is the most common refrain I hear from business owners and CEOs.  They are constantly looking for the magic bullet:  the system or process that will tap the revenue gusher that they know is just a little further beneath the surface.  Just keep drilling.

There's a reason that only politicians are trusted less than salespeople, according to one of the leading sales training organizations.

Do your customers or prospects respond to being accosted, being stalked?  Do you?  Can't you just picture the stereotypical "bad" salesperson?

Shark Jumping

It's a new year, and the armchair quarterbacking on 2011 is in full swing, as a variety of businesses, mostly retail, report December results.  It looks like a mixed bag...some gainers, some laggards, some BIG losers.

Sears and Kmart seem to be among the losers, with the announcement that they will be shuttering stores across the country.  Will we lose these venerable names to the dustbin of business history?  Possibly, and they would join a decidedly non-illustrious group.

While attention is paid on the failure rate of small and start-up businesses, as noted in this recent blog post, there is also a continuing churn at the top of the corporate heap:

Comparing the Fortune 500 companies in 1955 and 2011, there are only 67 companies that appear in both lists. In other words, only 13.4% of the Fortune 500 companies in 1955 were still on the list 56 years later in 2011, and almost 87% of the companies have either gone bankrupt, merged, gone private, or still exist but have fallen from the top Fortune 500 companies (ranked by gross revenue). Most of the companies on the list in 1955 are unrecognizable, forgotten companies today.  That's a lot of churning and creative destruction, and it's probably safe to say that many of today's Fortune 500 companies will be replaced by new companies in new industries over the next 56 years.

Along with Sears and Kmart, Best Buy seems to be jumping the shark as well. This Forbes story tells a tale that is all too familiar to customers, but seems to continually escape notice of those leading these sinking ships.  In nearly all cases, the operators lose touch with the customers...and start selling what they want, rather than what the customer wants or needs.

Smaller business owners have a natural advantage over these behemoths, in that they are closer to their customers, but, alas, often suffer the same "buy what I have" rather than "sell what you want" mentality.

It's the customer who decides your businesses fate.  Engaging yours in an active dialog about their wants and needs is the single best thing you can do to grow your business.

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.