Sunday, February 7, 2016

6 Critical Steps To A Winning Company Culture

We_Can_Do_It!Creating the right company culture must be a top priority of every entrepreneur and business leader. Simply speaking, culture-driven businesses put their people first, and people make the business, rather than the other way around. Today’s business mantra must be “Take care of your people and they will take care of your customers.” Unfortunately, it’s easier said than done.

Most entrepreneurs start from a base of one or two co-founders, and their vision and focus is on developing an innovative solution, rather than developing people. When they need more team members, they tend to assume that these will come with the same passion and motivation that the founders feel. Moving these employees to first place, ahead of their solution focus, doesn’t happen automatically or easily.

Once a product-first, customer-second, and employee-last culture is set, it is extremely hard to change. Transforming an existing culture is even harder than setting it correctly at the start, as outlined in a new book, “Cultural Transformations,” by leadership experts John Mattone and Nick Vaidya. They do believe it can be accomplished, with the six specific steps paraphrased here:
  1. Culture starts by thinking different and thinking big at the top. In the midst of daily crises and information overload, it takes a strong leader to develop and communicate regularly to employees the “big picture” of where the company is going and why that is a good thing from an employee perspective, as well as for customers and for society.

  2. Accept the vulnerability of confronting leadership mistakes. The best, most able entrepreneurs, look first at themselves and acknowledge that they make mistakes. They practice one of the most important leadership tenets from an employee perspective – humility. This is necessary to solidify the trust between leaders and team members.

  3. Communicate what greatness looks like in the roles you need. Team members will never create your desired culture if they don’t know what you expect of them. They need to understand and be rewarded for the desired attributes, competencies, and results. You need to paint a compelling future for your company that they can all connect with.

  4. Transform team member mindsets, behavior, and results. The more successes you can help them create, the more chances they will have to interpret these wins as permanent, pervasive, and personal. As they rack up – with your leadership – yet more and more positive reference points, they internalize the causes and consequences.

  5. Find, nurture, and reward talent in support of a compelling future. A key step is to push every talent lever in support of your compelling future. Make sure you are hiring, training, and promoting the future leaders who possess what it takes to create the organization you want. Be sure to differentiate compensation and rewards correctly.

  6. Measure and measure again, and be quick to course correct. You must have a passionate and diligent focus on key results and required pivots. Most importantly, you must measure the strength and vibrancy of your current culture. As well, you need to focus externally on getting feedback from customers, suppliers, and competitors.
In medicine, prescription before diagnosis is malpractice. In the world of cultural transformation, the same is true. Culture determines engagement levels, not the other way around. Don’t confuse engagement or satisfaction surveys with culture surveys.

According to the authors, a good culture survey will show you the relative strength of the five desired cultures in the organization: the “can do” culture; the “will do culture; the “must do” culture; and the “team performance” culture. All of these combine to determine the health and vibrancy of your overall business.

Perhaps it’s time to take a hard look at the business culture in your organization, and what has transpired or not been done to set or transform it to a higher competitive level. In any case, this effort is not a one-time shot or a sprint, but a marathon. Your long-term business success in today’s world depends on it.

Marty Zwilling

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Saturday, February 6, 2016

10 Steps To Becoming A Thought Leader In Business

Exemplary_Thought_Leader_awardSuccessful entrepreneurs often start with a “random” idea, but they quickly focus their efforts and follow a “system” to organize their startup and maximize the clout of their activities. Too many entrepreneur “wannabes” never get past the idea stage, or strike out randomly in many directions, hoping that their passion will convince people to follow them and make their business grow.

There are many systems for business out there, but all of them need a way to keep score on progress and impact. If your business is to be a thought leader in the social media world, the dominant system of grading how much influence you have online today is your Klout score, as explained in a book on this subject, “Klout Matters,” by Gina Carr and Terry Brock.

I’m not convinced that maximizing Klout will maximize your clout in every business, but I do agree that social media must be a part of the system that every entrepreneur needs to implement today to build their business. I especially agree with the ten steps that these authors outline for building systems leading to businesses with clout in today’s world:

  1. Clearly define your purpose. You have to clearly understand what you want to achieve before you are likely to achieve it. If you can’t write it down, you probably don’t understand it. Key factors gating your success will always be your level of competency in your chosen field, level of demand for that skill, and how easily you can be replaced.

  2. Find those arenas where your needs are met. If you want to be a thought leader, find where your potential followers hang out. If you have something to sell, build relationships in the community of buyers. Experimentation is an important part of this process. You will need to test groups constantly to make sure you are in the right one.

  3. Allocate some time to spend on social media. Social media is critical today to almost every business. But make sure the time you spend is quality time, focused on your objectives, and balanced in relation to all your other business requirements. Spend time learning new techniques, and time measuring the return from your efforts.

  4. Be a great resource for others. What we all need is trusted advisors who can help us decipher the clutter. As you become an expert in your field, you need to offer yourself as a trusted advisor, and you will quickly gain a loyal following. Writing, audios, and videos are all great ways to do this, since these all facilitate the one-to-many multiplier.

  5. Provide a unique point of view. Be creative and add value to what you offer your target market. This is true for thought leaders, entrepreneurs, as well as anyone who is looking to be hired in a job. Adding value builds influence and subsequently can build your business, as well as your Klout score. People don’t follow followers or repeaters.

  6. Continue to learn and grow. One of the most important skills that every leader must nurture is how to learn. Some people learn best from conferences, while other learn best from blogs and other information online. Standing still is falling behind, and you can’t afford to fall behind in today’s fast paced business environment.

  7. Forget the old “spray and pray.” A popular old marketing concept was that if you did enough broadcasting of your message to enough people, you would find success. Today you need to talk with, not at, your customers and constituents to get ideas. The best thought leaders have learned how to listen and acknowledge their community.

  8. Build a team. Operating alone in today’s complex business world, including the many social media channels, is not physically possible as your business grows. The good news is that with new technology and the Internet, you can tap into the services of, and build relationships with brilliant people around the world, to build an integrated virtual team.

  9. Seek exposure to new people who are relevant. People come and go in the real world and on social media. Thus it is important that you continually expand your network to engage new people who are building influence in your community. Only in this way will you be exposed to new thoughts and ideas, and enhance your own digital influence.

  10. Focus on a specific niche. You need to find a niche where you have both passion and competency. More passion is not a substitute for focus and competency. Make sure the niche is large enough, and includes people with money, enough to provide an income for you to continue your efforts and be successful.

Influence is more important than ever in today’s connected world as brands, companies, and individuals vie to become the next big phenomenon. Do you have any idea how much influence your company commands today, and what is your business doing to extend that influence to the bottom line?

Marty Zwilling

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Friday, February 5, 2016

7 Steps to Master the Art of Persuasion

Reed_Hastings,_Web_2.0_ConferenceMany entrepreneurs are so passionate about their new startup idea that they can’t believe any intelligent being, investor or customer wouldn’t react just as excitedly after a quick introduction. They don’t realize that they can often kill their credibility -- and future opportunities -- by communicating only with passion, responding with a cynical comment or giving up too soon.

The art of getting others to see things as you see them -- usually called persuasion -- is a key one for entrepreneurs, and it needs to be honed from the first day that you formulate your new idea. You have to persuade the right partners to join and build the solution, the right investors to fund it and the right customers to buy it. Good marketing is just a subset of these efforts and skills.

The psychology involved in winning over others has been studied and preached for generations and continues to evolve as our culture changes, as documented on the website Psychology Today, and many others. Aspiring entrepreneurs need to study all of these but also need to learn from the pragmatic practices and tactics of successful peers and business advisors.
  1. Repetition is the key to getting people’s attention. Many entrepreneurs mistakenly assume that their passion will cause their message to immediately stand out above the din of today’s information overload. In fact, most people today have developed filters to ignore unsolicited inputs until they have heard it several times in both written and verbal form.

  2. Postulate the message in a context important to the receiver. Tune your message to each receiver’s situation or context. Avoid abstract or technical declarations that may sound like an effort to impress or mislead your audience with your intelligence. Use specific value propositions rather than fuzzy terms like easier to use, better and faster.

  3. Use contrasting story scenarios to illustrate the impact. Stories are often more convincing than simple statements of fact. If you can integrate the receiver directly into the story, the potential impact is even greater. The power of contrast, or side-by-side comparison of outcomes, is an effective mover of people from old beliefs to new ones.

  4. Personalize your message to match receiver background. Whether approaching investors, partners or customers, you need to listen first to find a personal intersection of interest with your idea. If the person is creative and intuitive, don’t hit them with a logical and analytical message. Establish a relationship or do some homework first if you can.

  5. Use friends and advisors as sources of warm introductions. Everyone is more prone to listen and believe new people brought to them by someone they know in common, especially if that connection has strong relevant experience or expertise. Even if it takes longer to arrange such a meeting, your credibility gain and impact may be well worth it.

  6. Materialize your idea into a prototype or demo. People always put more credibility into something they can touch and feel, versus mere words and arm waving. What you are visualizing in your mind’s eye is not so obvious to others, especially investors who will likely not have your depth of expertise in the product domain you represent.

  7. Present evidence of interest and excitement from others. Social media is a powerful tool for testing your idea with minimal cost and risk with a huge potential for spreading and amplifying your message to the right people. The evidence of 1,000 people responding positively to your message is much more effective than you alone pitching.
In the end, the most convincing evidence of a great idea to investors and partners is business execution traction. They want to fund and work with people who are willing and able to move an idea into the execution phase. Ideally, that means a solution has been built, with a proven business model, and real customers who have paid full price with high customer satisfaction.

Indeed, all entrepreneurs have to start at the beginning with passion for an idea. Then comes the hard part of convincing others that the idea has the same merit you see, persuading others to join and support your effort and persuading customers to buy. According to some experts, persuasion is the most important skill you need to succeed in business.

Are you convinced?

Marty Zwilling

*** First published on Entrepreneur.com on 01/27/2016 ***

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Wednesday, February 3, 2016

10 Tactics To Reduce Your Startup Success Timeline

entrepreneur-startup-successBusinesses always seem to take longer to succeed than an entrepreneur expects. Seth Godin once said that overnight success in startups takes about six years, and Seth is an optimist. Thus we all look for shortcuts. Execution shortcuts would be hidden strategies to achieve the endgame sooner, without losing 40 to 60 percent of the financial potential along the way.

The short answer is that there is no magic. But there is consensus from the experts that human dynamics are more the key and the problem, rather than any particular business strategy or tactic. The classic book, “The Execution Shortcut,” by Jeroen De Flander, a well-respected writer and speaker on business strategy execution, offers some good insights and examples.

If you aspire to get a better return from your strategy, De Flander and I agree that you must learn to position your strategy to capture the head, heart, and hands of your constituents. They need a full sense of awareness of where you are going, to care deeply about it, and maintain the highest energy to drive it. Here are ten ways he offers for an entrepreneur to enhance his strategies:
  1. Facilitate small choices that get you closer to the finish line. Provide prioritization guidelines to align day-to-day choices with the big choices. To make the right big choice, everyone needs to know who to focus on, and how to offer unique value to customers in the chosen segment. When to say no is also a critical part of any strategy.

  2. Keep the big choice clearly visible in all your actions and communications. People shorten and package messages all the time, causing message distortion which can hide the core of your big idea. So don’t pass messages down the line. Talk directly to every key constituency often, and make your messages as sticky as possible.

  3. Draw a finish line so key people know the real objective. Capture the core of your strategy and show everyone in an inspiring way what strategy success looks like. Everyone works harder when they know who’s winning and the distance to the end. The right finish line also motivates and gives purpose to those traveling the execution road.

  4. Define lead indicators, and regularly re-measure distance to the finish line. Everyone needs a limited set of lead indicators to provide feedback, and allow recalibration based on things learned along the way. Remove old signposts to prevent confusion, and work to prevent information overload.

  5. Share strategy stories for stickiness and heart connections. Story wrappers add context and emotion to the strategy to make people feel and remember the core message. People want to see what kind of small choices they have to make to contribute to the big choice.

  6. Climb the micro-commitment ladder with full engagement. Don’t settle for small commitments on big things. Go after big commitments on small things. The highest rung on the commitment ladder is “Yes, I will get it done no matter what.” This is the only level that represents full ownership of the task, and execution responsibility has really shifted.

  7. Go beyond self-interest to boost belief in others. The key to success is belief. Celebrating small successes along the road make people believe they can achieve a big success at the finish line. Success is a self-fulfilling prophecy, causing people to dig deeper, recover faster, and keep going longer.

  8. Constantly tackle complexity as your business grows. Complexity is the CO2 of the modern business world – the biggest performance killer in organizations. Embrace simplicity to create the most productive working environment. Be constantly on the lookout for best practices and tools to improve your strategy execution.

  9. Experience the power of habits to automate decisions. Each overt decision we make demands mental strength, and when there are too many decisions to take, our reserves run out. Remember how draining your first day on a new job was. Quickly the small decisions become habits. Group habits become your company culture.

  10. Find your 7-day rhythm. A daily rhythm or schedule creates habits faster, but is unrealistic in most business environments. A 7-day rhythm provides regular repetitions, and follows a more normal business flow. Be sure to connect decision horizons and find a spot for strategy in everyone’s weekly agenda.
We have all seen businesses and startups with great ideas that never seem to reach the finish line, while others with more mundane solutions seem to take some hidden path to success. In my experience, like that of De Flander, the difference is almost always related to the entrepreneur and their execution strategy, more so than to the solution provided.

So, the next time you talk to a potential investor, spend more time on your execution dynamics and less time on the product pitch. I suspect it will be a shortcut to at least the funding phase of your startup, and probably long-term business success as well.

Marty Zwilling

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Monday, February 1, 2016

8 Reasons To Incorporate Your New Company Early

lemonade-new-businessMany entrepreneurs are so focused on finalizing their innovative product or service that they procrastinate on the formalities of forming the requisite new company until later. Unfortunately, waiting until later will dramatically increase the risk of losing ownership of the solution they worked so hard to complete in addition to personal and family assets.

Although the specifics vary in all parts of the world, the common parameters I have experienced here in the U.S. for incorporation should provide you at least the key startup entity considerations you need to address in any business environment around the world.
  1. Isolate your new startup business from your personal accounts. By default, these domains are totally intermingled, which will lead you to manage both poorly. It’s very easy and inexpensive to set up online a Limited Liability Company (LLC) for the startup, which will allow you to track business costs, cash and taxes correctly -- no matter what happens.

  2. Liability for initial setbacks or lawsuits needs to business versus personal. If there is no legal business entity, early vendor or partner failures will jeopardize existing personal assets and any future personal income streams. The business entity has to be in place before a problem appears and is not recoverable by starting the business later.

  3. Focus on structuring the business brings priority to building a plan early. Building a business plan is a discipline every entrepreneur needs to learn early, required or not. Founders generally need more focus on the market sizing, volume projections, cost details and margin expectations to balance the optimism of their passion for the idea.

  4. Define a business entity early to manage taxes and intellectual property. An LLC will work just fine for this, but if you know enough to anticipate more than 100 investors or special classes of stock, I recommend incorporating as a Delaware or Nevada C-Corp or S-Corp. Tax status can be assigned separately to match your preferences.

  5. Founder’s stock may be taxed at time of incorporation. If you wait to incorporate the business until you have a product and customers, which normally has no taxable value until liquidity, it will be taxed at issuance at the current value. This could well mean a large tax bill due from you at the worst possible moment in your business rollout.

  6. New intellectual property should always be assigned to a business. Patents issued to you before you incorporate the business will not be considered part of the business valuation by investors. Until you have a business, you shouldn’t get a web domain name or social media accounts, since these all should match and are hard to change later.

  7. Co-founder and equity negotiations work best if you own all the equity. If several co-founders are involved before any company is set up, all will assume they get an equal share later, no matter how little they contribute. Negotiation and equity ownership needs to happen when they join you, and you need the leverage of being the business owner.

  8. You need a business entity to attract any investor or bank support. In my experience, any startup without a formal business entity defined will be viewed as a hobby, and would never interest investors or potential partners. Also, trends change rapidly these days, so you need to be ready move quickly from idea to a business.
Overall, the formalities of setting up the right business entity in the right timeframe for your new idea are just as critical to your ultimate success as building the right product. The work for both can be done in parallel, or the business setup work should be done first. Successful startups are all about being able to move to success before the market changes or new competitors appear.

For U.S. startups, sole proprietorships and simple partnerships are never recommended. LLCs are the easiest, quickest and least expensive ways to get started. S-Corps (Subchapter S corporations) work best for services solutions, and C-Corps (C-corporation) are the best long-term solutions for product organizations. Upgrading later from one type to the other is not difficult.

If you need help, there are many places you can go online, like BizFilings with state-specific information. If information online only confuses you, make an appointment with your local community SCORE free mentoring office, or your nearest Small Business Development Center (SBDC). For more detailed requirements, it’s always appropriate to hire an attorney to guide you.

The opportunities and the joys of creating your own business are great, but there are many risks as well. Don’t let your dream be derailed by failing to focus early on the design of the business, as much as you are focusing on the design of your product.

Marty Zwilling

*** First published on Entrepreneur.com on 01/22/2016 ***

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Sunday, January 31, 2016

10 Creativity Barriers To Overcome In Your Business

wall-barrier-overcomeSuccessful entrepreneurs are the ones who think the most creatively, not only in their initial product or service, but more importantly all through the stages of growth from startup to maturity. But even the best of them can easily slip into some bad decision habits that limit or hurt their business, due to natural human tendencies and the pressures of business challenges.

Obviously, the business of business has been around a long time, with many “best practices” well-defined and well documented, so creativity that ignores these is usually not a good thing. Thus every entrepreneur struggles to achieve that balance between methodically following “proven” processes, versus a new and creative approach which may be a real differentiator.

In my experience as a mentor, I find that keeping creative thinking in the balance is a challenge for every startup, due to the natural employee tendency to resist change. I agree with the classic book by Ros Taylor, “Creativity at Work: Supercharge Your Brain and Make Your Ideas Stick,” which outlines some key psychological impediments to creative business thinking and change:
  1. Just use the data metrics. Shocking statistics, like unexpected losses last quarter, can generate a knee-jerk cost cutting decision, when further analysis and creative thinking might better close the gap with new revenue sources. Using data metrics alone for decisions, without seeking the root problem and alternative solutions, kills creativity.

  2. Let’s just be optimistic. Optimism is essential for long-term success, but it can delay or cloud short-term decision requirements. Entrepreneurs have to be careful not to look too hard for evidence that confirms their passion and positive perspective. Be a realist when making a decision and an optimist when implanting it.

  3. The way we do things. It’s human nature to believe that the way we have first learned and long done things is the best way, and other ways won’t work as well. It stops us from having to learn anything new. One of the reasons change is hard is that people have to unlearn the old way first, which is twice as hard as just learning something new.

  4. Tricked by recency. We tend to remember the first and the last things we hear – the primacy and recency effect. Sales people tend to remember the latest product when selling to clients, not the one best for that customer. So when decisions are to be made, we tend to remember recent information and issues. Not always to good effect.

  5. Group think will give the best results. Group results are often dominated by an autocratic leader, or represent assimilation of the lowest common denominator. Most people tend to be compliant, rather than risk conflict. Creative ideas are the outliers, and tend to be eliminated first, rather than evaluated fully. Diversity challenges group think.

  6. Low appetite for risk. With humans as well as with animals, you tend to get what you reward. If you reward ‘right first time behavior,’ you might get fewer mistakes but you will also get fewer attempts at trying new things. ‘Fast failure’ and ‘minimum viable product’ are startup concepts geared to facilitate creativity while still mitigating risk.

  7. Polarized thinking. Early failures tend to swing later decisions entirely in the opposite direction, which can have equally traumatic results. Some people tend to manage challenges with “either/or” thinking, rather than creative “both/and” thinking to try to solve the problem. If there are polar opposites, look for the positives on both ends.

  8. Generate more stress. The more critical a problem becomes, the less creative our decision making will be. Concentration is impaired by stress, judgment and logical thinking deteriorates, we tend not to communicate well, we tend to stop gathering data, and we tend to make quick, impulsive, short-term decisions. Work on reducing stress.

  9. No feedback or results analysis. Every decision needs review and continuous feedback from constituents for validation and tuning. In the world of business today, the only constant is change. Even good decisions today will require adjustments as the environment or customers change. Avoid the tendency to fix blame and look for excuses.

  10. Failure to learn. Experience is inevitable; learning is not. Review and measuring decision results facilitates learning, just like sales metrics facilitate a better understanding of sales. Creativity without learning will be short-lived and ineffective. Learning required effective listening, and creative thinking to make sense out of tough experiences.
It’s time to get past the myths and mystery about creativity. Creative people don’t have to have eccentric personalities, work in the arts, or work in isolation, to achieve results. It is possible to be creative on demand, and to demand creativity in your startup. In fact, if you don’t, your startup will too quickly join the ranks of the corporate world that you love to hate. Think about that one.

Marty Zwilling

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Saturday, January 30, 2016

8 Essential Attributes of a Successful Mindset

42-34359416It’s easy to declare yourself an entrepreneur, but it’s not so easy to convince investors, your team and customers that you are that special one to fund and follow. If you don’t consistently display the right entrepreneur mindset traits, people won’t follow and business success will likely elude you. And don’t even think you can fake the important attributes once the going gets tough.

Business success begins in the mind of the startup founder and the team. A winning startup is built by an entrepreneur as an embodiment of who you really are rather than an artificial façade built on the myths around Steve Jobs and Mark Zuckerberg. As a startup investor and mentor, I look beyond the façade to find these eight keys traits in the mindset of every entrepreneur.
  1. Vision of providing real customer and social value. I still see too many startups driven by founders who have a solution looking for a problem. It’s not enough to invent a new technology because you can, want to be your own boss or see an opportunity to get rich, unless these are preceded by an innovative vision of solving some real-world problem.

  2. Confidence substantiated by desire, preparation and experience. A strong success motivation is a good starting point, but I want to see evidence of an ability to execute. Everyone knows of a dreamer who can display passion but doesn’t have the mindset of discipline and skill building to traverse the long journey from idea to business success.

  3. Sets realistic goals with milestones and metrics to gauge progress. Building a new business is essentially turning a vision into a financially self-sustaining operation that provides satisfaction and value to both the customer and the entrepreneur. That requires quantifiable objectives with measurements to assure forward progress and completion.

  4. Willing to endure personal sacrifice to make it happen. Aspiring entrepreneurs with a success mindset are willing to commit personal funds and time and give up other enjoyable activities in the interest of assuring the completion and success of the new venture. Investors call this a willingness to put “skin in the game," and they won’t invest without it.

  5. Effectively builds relationships inside and outside the company. No entrepreneur can succeed as the Lone Ranger. Relationships with others are required to build a team, nurture customers and complement individual strengths. The best relationships are based on personal integrity, good communication and giving more than receiving.

  6. Demonstrates the ability and determination to overcome obstacles. People see this persistence and problem solving ability as a sign of commitment and as an indicator of long-term success. The best entrepreneurs recognize that a new business is a journey, not a destination, and they get satisfaction from conquering challenges along the way.

  7. Accepts full responsibility and accountability. Too many entrepreneurs are quick to make excuses, look for shortcuts, and refuse to acknowledge the many risks. As a startup founder, you need to realize that the “buck stops with you,” even if the economy falters, the market changes or a major competitor appears at the worst possible moment.

  8. Clearly enjoys the work, the challenges and the people. Entrepreneurs who are seen to be rarely having fun are rarely successful. The best are clearly comfortable with their chosen business domain, the team around them and their customers. They also find time to balance their work against family expectations and outside relaxation activities.
Most experts agree that we all possess the right traits at some level, but a few may be buried deep in the subconscious, or blocked by insecurity, negative thoughts and lack of confidence. The first step in unblocking and highlighting these attributes is to understand what people are looking for as attributes that lead to business success.

Successful entrepreneurs possess many of the desired attributes, developed to phenomenal levels -- far beyond those of the average person. So before you decide to start a new business, take a hard look at your own mindset. You may profit most from surfacing and strengthening your winning mindset first before starting on the business.

Marty Zwilling

*** First published on Entrepreneur.com on 01/20/2016 ***

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