Sunday, August 18, 2019

8 Steps To Stop Killing Yourself As A Micro-Manager

boss-will-not-delegateFor a few, delegating comes easily, maybe too easy. For others who are perfectionists, letting go of even the most trivial task is almost impossible. If you are in this second category, you probably don’t like the references behind your back that you are a “control freak” or a “micro-manager.”

London business school professor John Hunt notes that only 30 percent of managers think they can delegate well, and of those, only one in three is considered a good delegator by his or her subordinates. This means only about one manager in ten really knows how to empower others.

The challenge is delegating the right things, and not delegating the wrong things. If you don’t get it right, you are busy, but working on the wrong things. Almost every entrepreneur needs to improve their skills in this area, so I did some research on the basics. Jan Yager, in her classic book “Work Less, Do More,” has outlined eight key steps to effective delegation which I endorse:

  1. Choose what tasks you are willing to delegate. You should be using your time on the most critical tasks for the business, and the tasks that only you can do. Delegate what you can’t do, and what doesn’t interest you. For example, non-computer types should consider delegating their social media, website, and SEO activities.

  1. Pick the best person to delegate to. Listen and observe. Learn the traits, values, and characteristics of those who will perform well when you delegate to them. That means give the work to people who deliver, not the people who are the least busy. This requires hiring people with the right skills, not the least expensive or friends and family.
  1. Trust those to whom you delegate. It always starts with trust. Along with trust, you also have to give the people to whom you delegate the chance to do a job their way. Of course the work must be done well, but your way or the highway is not the right way.
  1. Give clear assignments and instructions. The key is striking the right balance between explaining so much detail that the listener is insulted, and not explaining enough for someone to grasp what is expected. Think back to when you were learning, when you were a neophyte.
  1. Set a definite task completion date and a follow-up system. Establish a specific deadline at the beginning, with milestones. In this way you can check up on progress before the final deadline, without fuzzy questions like “How are you doing?”
  1. Give public and written credit. This is the simplest step, but one of the hardest for many people to learn. It will inspire loyalty, provide real satisfaction for work done, and become the basis for mentoring and performance reviews.
  1. Delegate responsibility and authority, not just the task. Managers who fail to delegate responsibility in addition to specific tasks eventually find themselves reporting to their subordinates and doing some of the work, rather than vice versa.
  1. Avoid reverse delegation. Some team members try to give a task back to the manager, if they don’t feel comfortable, or are attempting to dodge responsibility. Don't accept it except in extreme cases. In the long run, every team member needs to learn or leave.

Almost everyone who has grown their startup from a one-person entity to a going concern with many employees has struggled with letting go of any task. On the other hand, executives who come from a large company to a startup tend to delegate too much, resulting in high costs and lack of control.

Finally, every entrepreneur needs to set aside their fear of delegating. If you do it right, as outlined above, every task will likely be done better than you could do it. The only thing you can't delegate is “the buck stops here” role. That can only be done by the person in charge, and it better always be you.

Marty Zwilling

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Saturday, August 17, 2019

7 Common Themes That Indicate An Extraordinary Leader

extraordinary-business-leaderIn building successful businesses, I find that creating a new and innovative product or service is usually the easy part. The hard part is providing the leadership required to align and motivate all the constituents and players – from engineers, to investors, vendors, and ultimately customers. Great entrepreneurs are not just idea people and then managers, they are extraordinary leaders.

Most investors admit that they invest primarily in people, not ideas, and they inherently believe that they can sense this leadership ability needed to get the rapid growth and 10x return we all strive for. Yet beyond a list of noble attributes, like vision, courage, and integrity, it’s hard for them to define what separates an ordinary entrepreneur or manager from an extraordinary leader.

I saw a new approach in the classic book “Leadership Transformed: How Ordinary Managers Become Extraordinary Leaders,” by Dr. Peter Fuda, which identifies seven leadership themes, presented as metaphors. I believe these will really help anyone recognize great leaders, and even more importantly, accelerate their own entrepreneur leadership transformation:

  1. Demonstrates a burning ambition and a burning platform (fire metaphor). These are the forces that initiate and sustain transformation efforts. The top two on the personal side are “urgency” and “desire,” but these have to be matched on the business side with the willingness to burn the platform (change any aspect of the business) without a crisis.
  1. Sense of accountability and momentum (snowball metaphor). This means no excuses and no rationalization, sweeping team members into mutual accountability. The leader then builds momentum from small successes into a snowball that will grow into a large, powerful, and eventually unstoppable business. Have you addressed all sources of drag or friction on your snowball?
  1. Artfully applies tools, and strategies for change (master chef metaphor). New entrepreneurs are really amateur chefs learning to cook a new business. Existing business frameworks are the recipes, and great entrepreneurs creatively use new tools and strategies to hone these frameworks, just like a master chef.
  1. Works with other team members on mutual aspirations (coach metaphor). It is not about leaders becoming coaches; it’s about leaders letting themselves be coached by others – advisors, team members, and even customers. A team’s captain is dependent on the support of their teammates, requiring trust and respect from both parties, and humility on the part of the leader.
  1. Does not mask authentic self, values, and aspirations (mask metaphor). Too many entrepreneurs put on a mask to conceal personal imperfections, or they adopt an identity not aligned with their authentic self, values, and aspirations. This fa├žade is a burden soon recognized, so dropping the mask is more effective, as well as more comfortable and more fun.
  1. Enhance their self-awareness and edit their own performance (movie metaphor). Great entrepreneurs recognize that leadership is like a movie, and it can be honed and improved by disciplined reflection (see yourself as others see you), edited for impact, and directed by experts on your team. Reflect on how often you operate from judgment as opposed to perception. Think about who could help you reflect-on-action.
  1. Embed their personal journey within the business journey (Russian dolls metaphor). Business is really a set of journeys that interact with an entrepreneur’s personal journey. Up-line this may be your interaction with your Board, investors, and family. Down-line it’s the leadership model you use with your internal teams and external partners. Focus on improving your up-line and down-line dolls with your personal journey.

In addition, here are five strategies that Dr. Fuda and I both agree will lead to a more empowering approach to entrepreneur leadership, and help you optimize all the themes described above :

  • Shift your focus from your business content to market context.
  • Spend more time showing others what is required, rather than telling them.
  • Focus more on collaborating with others, rather than competing.
  • Evolve from guru to guide, and coaching others to find answers for themselves.
  • Move from critic to cheerleader, from what is going wrong to what is going right.

If you are an investor, you need to recognize and mentor entrepreneurs to extraordinary leadership. If you are a startup founder or executive, you need to strive continually to change yourself and your business to build and maintain the leadership you need to out-perform your competition, and generate the results to meet personal and financial objectives. How many of these themes and strategies are you practicing today?

Marty Zwilling

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Friday, August 16, 2019

8 Keys To Delivering Exceptional Customer Experiences

customer-experience-exceptionalMost businesses spend big money testing their brand logo, catchy marketing phrases, and demographics, but spend little time training and validating that their employees can and do deliver exceptional experiences to their customers. The result, according to an often-quoted Gallup survey, is 70 percent of workers not fully engaged, and poor customer experiences.

The customer experience is really your brand, since that is what customers remember and communicate to others, rather than your marketing. Thus the real challenge in building your brand is building the level of engagement and delivery of your team. Gregg Lederman, in his classic book, “ENGAGED!: Outbehave Your Competition to Create Customers for Life,” offers eight key principles for defining and managing the experience to keep it consistent and profitable:

  1. Keep every employee on stage, delivering an experience. At work, all team members (everyone who gets paid for doing a job at the company) are on stage responsible for delivering a branded experience to coworkers and customers. They have to out-behave and outperform your competition. Is your team performing like they are on Broadway?
  1. Keep your team happy to create engaged customers. An unhappy team member can’t create an engaged customer. Yet less than half of the people working today claim to be satisfied and happy at work. How many of your employees would say that what they think, what they say and what they do are in harmony? Money does not buy engagement.

  1. Don’t just announce your culture, make it visible. Your mission, values, brand positioning, and guiding principles are invisible, unless your employees know specifically how to act them out through their day-to-day behavior. You have to define these behaviors, measure them, and reward them. Walking the talk is the place to start.
  1. Focus on culture change rather than culture talk. Culture is changed by how we act (perform) and interact (employees and customers). Define and document a common mindset and make related behaviors non-negotiable. Everyone must know and do these things consistently. The secret to success is 1% training and 99% reminding.
  1. Turn common sense into common practice. The only true employee-driven measure of whether the workforce is “living the brand” is the perspective of others in each work area. Use a company-wide assessment at least twice a year to understand and remind the team to out-behave the competition. No more gamed employee satisfaction surveys.
  1. Build relationships and stop surveying customers. Every senior leader needs to have regular quality conversations with customers. These enable leaders to learn firsthand about how the company is living the brand and when it is not. Relationships will get referrals, drive more sales, and build loyalty. Use the feedback to improve and grow.
  1. Incent engagement with training and recognition, rather than rewards. Employees get much greater value from the power of recognition and much less from the actual rewards. Reward programs don’t drive sustainable culture change or business results. Provide recognition for the right behaviors consistently, and the results will accrue.
  1. Build trust in you as the leader by managing the experience. Without solid leadership people simply won’t follow. Earn trust by making the right experience a part of the day-to-day conversation, and reminding people by your actions what you expect. Demonstrate a culture of responsibility and accountability.

Lack of engagement is very expensive. According to Lederman, engaged organizations grew profits as much as three times faster than their competitors. Highly engaged organizations have been shown to reduce staff turnover by 87 percent, improve performance by 20 percent, and increase customer satisfaction by at least 12 percent.

Overall, successful startups and world-class companies are known to have fiercely loyal customers driven by fully-engaged team members, resulting in proactive referrals and more purchases. That’s the brand you want, and it needs minimal focus on the logo and advertising to survive and out-perform your competition. How would you rate your customer experience today?

Marty Zwilling

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Wednesday, August 14, 2019

10 Keys To Your New Venture Success And Satisfaction

Entrepreneurship-success-satisfactionAs the economy flourishes after some tough economic times, more and more people seem to be turning to entrepreneurship as an alternative to traditional employment. I applaud this trend, but caution all of you thinking this direction to approach entrepreneurship with your eyes wide open. It is not for everyone, as the entrepreneur’s path is fraught with challenges.

Many experts have tried to clearly lay out the criteria for survival in a way that allows you to judge your own situation and your own temperament, and make a rational decision before starting down this path. I recommend the ten points in a classic book by Bill Murphy, Jr., titled “The Intelligent Entrepreneur,” outlining the keys to successful entrepreneurship, as follows:

  1. Make the commitment. Entrepreneurship can be learned. But you have to be committed to the process of building your own thing and the act of creating something, rather than just coming up with an idea. It will likely take several ideas, with the learning process of failing on a couple, before you can call yourself a successful entrepreneur.
  1. Find a problem, then solve it. Rather than finding a new idea first, try finding a problem first. Problem solvers make successful entrepreneurs. Idea people are dreamers, who often don’t enjoy the hard work of a solution in a specific timeframe to make money.
  1. Think big. Thing new. Think again. In other words, make sure your solution will scale up. Professional investors will tell you they look for business plans that can credibly project revenues of at least $20M within five years, or they won’t justify an investment.
  1. You can't do it alone. Have a support team of people you know and trust. An idea person and a problem solver make a great team. Successful entrepreneurs have to work well with people, whether they be partners, investors, employees, suppliers, or customers.
  1. You must do it alone. But the dichotomy is that there are things that you have to do alone. “The buck stops here.” You have to be decisive, accept responsibility, and provide the vision. Vision is not a group-think activity. Sometimes decisions have to be made quickly, and with very little hard data, so you need the confidence in your gut.
  1. Manage risk. Without risk, there can be no innovation. Not every idea can, or will, be a winner. Fear of failure will kill innovation, but reckless disregard for risk will kill a business. The successful entrepreneur is able to find the balance between these two extremes.
  1. Learn to lead. In a startup, the entrepreneur leader has to do two things. First, drive the business creation process, and secondly, inspire all the others. The others include the rest of the team, investors, and customers. That means hands-on leadership and effective communication.
  1. Learn to sell. Don’t believe the old myth that “if we build it, they will come.” Selling is a learned skill, and takes effort, just like building a product. Everyone in your startup, especially the entrepreneur, needs to understand sales, and needs to be a salesman.
  1. Persist, persevere, prevail. Experts say the prime cause of failure in business is quitting too soon. The successful entrepreneur never gives up, and uses creativity to overcome all obstacles, including personal, financial, and technical ones.
  1. Time, not money, is the key resource. Entrepreneurship is a lifestyle, not a job. Be prepared to play the game for life. There are no quick fixes, or quick get-rich solutions. Learn to manage and balance your time; it’s the one thing that belongs to you alone. Great entrepreneurs have a life outside of work, and find time to give back.

Reporter Bill Murphy compiled his book based on three real-life success stories of Harvard graduates, all of whom proved the points by their failures as well as successes. There is no magic here, but I believe these rules can shorten the learning curve and increase the success rate for every budding entrepreneur. They can also help you be happy and have some fun.

Marty Zwilling

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Monday, August 12, 2019

6 Keys To Convince Investors Of Your Competitive Edge

Entrepreneur-investor-pitchMost entrepreneurs are quick to assert to potential investors that their product or solution will kill the competition, but unfortunately your opinion alone is not enough to convince most experienced investors. They want quantifiable facts and figures on how your offering compares to recognized key players in your domain, and quotes from recognized third-party experts to back you up.

Of course, we all know there are no guarantees, and we like your passion and commitment to future results. We certainly want to hear about any positive feedback you have from potential customers on your idea, your prototype, and your business model, but that better not be the end of the story. We want to see a documented business plan that clearly addresses this challenge.

First of all, you need some convincing market research that your solution addresses a real and growing problem. A competitive advantage to a non-problem or tiny niche is not interesting to investors. They want to be convinced that you are attacking a large opportunity, preferably in the billion dollar range, that will continue to grow at least ten percent per year, without a solution.

Secondly, they want to see your competitive analysis of how you stack up to the top players in the space, by name, with quantitative comparisons and customer value. Skip the fuzzy marketing terms, like “easier to use” and “more functions.” Avoid the temptation to narrow the scope so far as to conclude that you have no competitors, since investors might conclude you have no market.

There are a myriad of other important ways that you can demonstrate your competitive advantages in your presentations, discussions, and business plan, including the following:

  1. Highlight your intellectual property. We all know the challenges involved in getting and protecting a patent, but patents are still strong evidence of a competitive advantage, generally sustainable for twenty years. Don’t forget other intellectual property, including trade secrets, trademarks, copyrights, domain names, and your expert publications.

  2. Capitalize on the experiences of you and your team. Competitive businesses have great teams, as well as great products. If you already have a proven team in a previously successful business, this puts you ahead of most startups, and investors will give you extra consideration. Past leadership success is definitely a competitive advantage.

  3. Promote any inside relationships or customer base. Many markets, including government and education, are especially difficult to penetrate, and connections to public leaders are very valuable. If you already own a known brand, or an existing customer base that is relevant, any market lock or carryover can be a large competitive advantage.

  4. Quantify any dramatic changes to the cost or value equation. Most investors agree that cost reductions need to exceed 20 percent to break loyalty ties and convince customers to change. Thus any order-of-magnitude cost reductions or customer value increases are very important. Reducing margins to lower prices won’t help your case.

  5. Present a clear differentiation and a laser market focus. If your product or strategy is targeted too broadly, or attempts to combine several existing products, it will likely confuse customers and not be competitive to any one segment. Your best competitive position is picking a clearly needy market niche and serving it better than anyone else.

  6. Outline a long-term strategy of maximum depth. While you must start with a narrow focus, make it clear that you are not a “one-trick pony.” Highlight your innovative technology, giving you a great initial product, and documenting a long list of follow-ons as the business scales. This is clear evidence of a long-term competitive advantage.

To survive for any length of time against competitors, you need a “sustainable competitive advantage.” This requires that you demonstrate a competitive lead today, as well as a plan and strategy to maintain that lead over time as the market evolves, and competitors with deep pockets try to replicate your advantage.

Thus, the ultimate competitive advantage is the agility and insight to stay one step ahead of your competitors and changing market needs. No one said it would be easy, but I’m confident you’ll find the payback well worth all your efforts.

Marty Zwilling

*** First published on CayenneConsulting on 07/26/2019 ***

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Sunday, August 11, 2019

Driving Your Team With Fear Has Negative Consequences

fear-in-businessTrying to be a business leader by instilling fear in your employees and partners is never a good approach, but it is particularly devastating in a startup. Yet I see this approach used all too often by new entrepreneurs, most of whom are not natural tyrants, but who are fighting to mask their own internal fears and insecurities about starting a business.

The classic book on this subject, “Leading Without Fear,” by Laurie K. Cure, PhD, convinced me that fear is a natural reaction to the risks associated with a new venture, and people handle this fear in different ways. Some are able to read the danger signals, and catapult themselves and everyone around them into action without fear, resulting in progress and success.

Others intentionally or unintentionally project their own fear into a weapon that gets used on their team and constituents to get things done and assure accountability, at least in the short term. According to Cure, there are three main reasons that entrepreneurs resort to propagating fear:

  1. Need to establish a sense of urgency. Sometimes it seems like instilling fear is the quickest and most effective way to instill a sense of urgency in other team members. In fact, it does work in the short term, but in the longer term it breeds mistrust and cynicism, which quickly erodes morale and leads to reprisals worse than the challenge.
  1. Don’t know any other way. Often new entrepreneur leaders reach a point of desperation in dealing with people, and hope that they can somehow shame, anger, or scare people into behavior change and desired results. This approach usually stems from primal reactions during early childhood, or a specific cultural background.
  1. Engulfed in the flames of their own fear. Others use fear because they are simply afraid, and unable to hide it. It requires extreme discipline not to project your fear onto others. When leaders are in fear, be it for their own security, sense of affiliation, or self-esteem fears, they become blind to how they might be using fear in their own leadership.

Smart entrepreneurial leaders avoid these reasons, and don't use fear because of its devastating consequences on their long-term business success. Here are a few of the consequences:

  • Fear drives the team into fixed and safe positions, allowing competitors an easy advantage.
  • Fear short-circuits change, creativity, and innovation, which are the life-blood of startups.
  • Fear limits rational discussion of alternatives, leading to poor decisions and inaction.
  • Fear fosters suspicion, mistrust, and cynicism of the leader and the startup.
  • Fear tends to turn the focus inward to survival, rather than outward to customers.

Based on the insights I see from Cure’s book and others, I recommend the following strategies for reducing fear in your own mind and in the minds of your constituents:

  1. Increase your own self-awareness. This is essentially your ability to know yourself, your motives, desires, and personality. Who are you, and why do you do what you do? It is only with self-awareness that you can grow and learn. Self-awareness simply requires an ongoing practice that you can engage in and make a part of your lifestyle.
  1. Be clear on all your goals, and communicate these regularly to your team. If either you or they don’t know the goals, neither of you will know when a threat is imminent, or if everyone is in alignment. When you are out of alignment with the team in terms of goals, everyone feels torn, dissatisfied, and fearful.
  1. Focus more on the positive side of risk. Everyone’s brain has a reward pathway that creates a sense of euphoria and pleasure when you overcome high odds, or do something innovative. Stop focusing so much on the things that can go wrong, and anticipate the joys of progress and success.

All entrepreneurs have to take risks and provide leadership to succeed, but driving yourself and your team with fear is not the answer. The best leadership is providing real motivation from the work itself, and the drive to build something lasting. Fear has no role in either of these.

Marty Zwilling

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Saturday, August 10, 2019

10 Startup Quandaries That May Redefine Your Business

Here-Opportunity-Right-FalseMost entrepreneurs struggle with many startup founders quandaries in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. People may jump into the lifestyle to be their own boss, achieve great wealth, start a new trend, or all the above. The dilemma is that these goals are usually mutually exclusive.

For example, is the person who starts a new trend likely to be the one who controls it through the growth phase? In a famous Harvard study of 212 new ventures a few years ago, USC professor Noam Wasserman found that half the founders were no longer at the helm after three years, and over time 80% were forced out. That’s not an attractive statistic if you crave control and power.

Don’t wait for the harsh reality of the demanding business world to start thinking about these tradeoffs. The research from Wasserman and others outlines the following top ten dilemmas that every founder needs to deal with sooner or later in their career as an entrepreneur:

  1. The make money or serve humanity dilemma. Your great idea for the next Facebook may make you wealthy, but it probably won’t help the hungry. The answer is to look hard inside yourself, to see what makes you happy and satisfied. If living on Raman noodles while you make the world a better place is fine, skip the investors and growth race.
  1. The right time to start dilemma. The right time to jump is a function of favorable career, personal, and market circumstances. While it’s unlikely that all three of these will ever be true at the same time, most experts don’t recommend jumping at the first opportunity, but first gaining some skill, financial, and business experience first.
  1. The founding team size dilemma. Should you start a company solo or find co-founders to help you? With one or more co-founders, you gain complementary skills, spread the workload and responsibilities, and reduce the risk. The downside is loss of control and financial dilution. In my view, two heads are always better than one.
  1. The co-founder relationship dilemma. While long-time social friends and family may seem like the natural choice for co-founders and team members, these relationships often get in the way of hard business decisions or necessary business adjustments. Old co-workers or new friends with complementary skills usually make the best partners.
  1. The founder’s title and role dilemma. Usually co-founders expect to get a C-level title associated with their area of interest, like CFO for the financial expert. Make sure these titles are handed out only to people who are willing and able to accept the responsibility and workload of the associated role. It’s tough to downgrade titles and roles later.
  1. The compensation model dilemma. Every founding member wants to be compensated richly for the risk and the unknown. You have very little money, and you don’t want to give away your equity. Recognize that the best people don’t work for free. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones.
  1. The right investors and right time dilemma. You don’t want to take money from friends and family, but it’s too early for angel investors and VCs. No one wants to put in money until you have a product, and you need money to build the product. Bootstrap if you can, otherwise climb the pyramid of family, friends, angels, and VCs.

  1. The right motivated employees dilemma. Very early, you need generalists who can cover multiple areas, but you can’t pay for experience. Later you need specialists and managers. Offer low cash early, with bonuses or stock options for milestones, to people in your personal network. Later use LinkedIn and other job sources for professionals.

  1. The founder succession dilemma. Startups are usually founded by product or service experts who don’t enjoy the various growth phases. Should the founder keep the company small, try to adapt, or step aside in favor of a seasoned business executive? Transition to a specialist role, plan to exit, be prepared to be pushed out, or plan to fail.

  1. The control and growth dilemma. If you take investor money, expect a push for hockey-stick growth and a liquidity event, like going public (IPO) or sale (M&A), to get the payback. If you prefer a private company with organic growth, keep control within friends and family, and prepare for the long haul. Otherwise exit and startup with another idea.

Not facing these dilemmas squarely and honestly is one of the biggest pitfalls facing every entrepreneur. You can’t have it all, just like your startup can’t be all things to all customers. You have to focus on the things you can do and love to do, and do them better than anyone else. Turn these top ten dilemmas into your strengths, and you will have a competitive advantage, as well as the fun and satisfaction you sought to find in the entrepreneur lifestyle.

Marty Zwilling

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