Monday, July 31, 2017

10 Ways To Prepare For Competitors You Don’t See Yet

Running businessman. When you are starting a business with an exciting new idea, it’s easy to dismiss potential competitors as not being in the same space, or too fat, dumb, and happy to be concerned that you even exist. I hear it all the time as an angel investor, but I also see that same naïve or cavalier attitude come back to haunt entrepreneurs once they really get out in the marketplace.

“Sleeping giants do wake up,” I always say, to remind new business owners that nobody cares what you do when you are not a threat, but when you get some real traction with customers, competitors will come out of the woodwork with a vengeance. Therefore it behooves you to ask yourself these ten key questions, and formulate concrete answers, before even entering the fray:

  1. What “secret sauce” does you bring to the problem? A strong work ethic is great, but patents and intellectual property are critical. You need quantified value for customers to see, feel, and pay for. Fuzzy words, like “improved usability”, “paradigm shift,” and “breakthrough technology” won’t convince investors, customers or deter competitors.

  2. Have you lined up the stakeholders who drive success? Stakeholders are key people impacted, and leaders who influence key people. For example, early adopters may be easily sold online, but new technology product success really hinges on adoption by mass demographics, more likely associated with distributors and brand name retailers.

  3. Do you have all the key deliverables for maximum impact? The last thing you need in a new business is a false start, where you can’t deliver on a seasonal deadline, volume manufacturing, or support. Deliverables and the resources you have on board are two sides of the same equation. Make sure all the elements are aligned before you commit.

  4. What metrics should you use to measure success? Define both hard data and soft (anecdotal) metrics on the new solution, as well as on the productivity of you team. That means you must know the current state of competitors against the same metrics, before you can assess progress or success. Make sure the team has buy-in, and is motivated.

  5. Are your financial projections consistent with current realities? It’s important to separate optimism and dreams from market possibilities. Ask yourself, “If I were an investor, would I support this effort, given the costs and traction to date?” Just because Google sales hit $1.5 billion in 4 years doesn’t mean any other new business can do it.

  6. Do you have the business discipline to prevent scope creep? Making last-minute enhancements to a solution without additional time or resources is called scope creep. It takes a strong team and strong leadership to manage it. What works is a documented change request process, as well as quantification of resources and incremental return.

  7. Is your business plan complete and documented? If your business plan isn’t written down and approved by all key players, it’s probably not complete. Calibrate the plan with the financial and people resources available to deliver it. Keep the plan simple, focused, and up to date as you learn more from early experiments and early customer feedback.

  8. Do you have a model to predict funding requirements? Without adequate funding and people to support your efforts, you will be faced with trade-offs that lead to cash flow problems and a burned-out team. What works is creating a financial business model, using credible advisors, with a reserve buffer of at least 25 percent for contingencies.

  9. Are you prepared to hire and train team members required? Most innovative solutions require new ways of working, including new knowledge, skills, mind-sets, behaviors, relationships, and processes. You need to provide adequate time, step-by-step job aids, training, and a hiring process to cover critical aspects of the new plan.

  10. Do you have a contingency plan to mitigate risk? A key aspect of mitigating risk is to first identify the competitive risk elements early, and build contingency plans, in case the risks materialize. Then establish trigger points to clarify when contingency plans need to be activated. This will speed up pivots and remedial actions and minimize damage.

Even if you believe there are no competitors today for what you are planning to deliver tomorrow, you still need all these questions answered. If the opportunity you are addressing is large, there are most likely several potential competitors, not yet visible, who will be there working against you near your rollout. Waiting for one of them to find your gaps before you do can kill your dream.

Marty Zwilling

*** First published on Inc.com on 07/17/2017 ***

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Sunday, July 30, 2017

10 Business Lessons On Trust From Spiritual Leaders

Church_at_Trappist_Monastery_GuimarasOne of the first harsh realities that every entrepreneur has to learn is that most of the things that are critical to startup success are outside of their direct control. Just because you dream it and build it, doesn’t mean they will come – that encompasses not only customers, but also investors, partners, team members, and even your own family. They won’t come if they don’t trust you.

In my experience, trust is the most powerful tool that an entrepreneur can wield, both inside and outside of his own realm of control. I’ve seen many examples of this in my own business life, and yet I gained a whole new perspective on how it works from a classic book by successful entrepreneur August Turak, titled “Business Secrets of the Trappist Monks.”

Turak first visited the monks for spiritual guidance, but realized as he talked to them about their business, that many of their secrets crossed over all boundaries. I was particularly struck by the lessons he gleaned on how to get and maintain trust. The best entrepreneurs I know seem to have learned every one of these, so start on these now if you want to survive among the best:

  1. Become trustworthy before you start a business. We are hard wired to seek out trustworthy people, and to test others to see who we can trust. But the first step is to be become trustworthy ourselves. Like attracts like, and if you invest early in becoming a person others can trust, business people who you can trust will be attracted to you.

  2. Keep your promises to yourself and others. The surest mark of a trustworthy person is one who keeps promises to others and to oneself, no matter how small or seemingly trivial these may be. Keeping promises to yourself is closely correlated with will power and self-control, and these virtues are essential to being business trustworthy.

  3. Under commit and over deliver. Make sure that you only make business commitments that you know you can keep. Many entrepreneurs over-commit because they are desperate to have business constituents like and respect them, yet the quickest way to lose respect is to fail to keep commitments.

  4. Be willing to make commitments. One of the stratagems of notoriously unreliable people is refusing to make promises in the first place, thinking that making no commitments relieves them of any worry about breaking them. People see through this strategy quickly, and will tag you not reliable and indecisive, as well as not trustworthy.

  5. Protect your personal brand. As a new startup, you the entrepreneur are the brand. Get in the habit of asking yourself, “How will this decision affect my personal brand?” Everything you do or don’t do affects your brand, and in the long run your trustworthiness is your most valuable asset.

  6. Avoid fuzzy commitments. Nothing undermines trust faster than ambiguity or soft commitments, through phrases like “I’ll try” or “I’ll do my best.” These are heard as attempts to stay off the hook, and furnish plausible deniability for anticipated failure. Don’t be afraid to write down what you expect, and what you are willing to commit to.

  7. Formalize business promise keeping. This simply means making it standard practice in your new startup of building a paper trail of contracts (no verbal contracts) between partners and vendors, customer transactions, and internal processes with team performance metrics.

  8. Never make people ask. If you make people hound you about a commitment, you have already lost half of your credibility. Nothing builds trust better than anticipating your obligations and delivering on them without being asked. A debt repaid before it is asked for reaps a huge dividend in trust.

  9. Communicate, communicate, communicate. No one can anticipate all risks and keep all their promises, but there is no excuse for a failure to communicate when contingencies arise, so there are no surprises. Lack of communication leads others to assume that you had no intention of keeping your promise, and were hoping no one would notice.

  10. Aim past the target. It is impossible to be trustworthy in business if you are unreliable in the other aspects of your life. The monks teach that trust is not a business strategy or tactic; it is the natural by-product of living for a higher purpose. If you have no higher purpose as an entrepreneur than to make money, you will most likely fail in your efforts.

In business, as in your personal life, an entrepreneur must offer his own trust before reasonably hoping to have it reciprocated. Don’t try to “game the system,” and don’t expect blind faith to save you. The power of real trust is that if your constituents trust that you can change the world, you probably will. Isn’t that why you signed up for this lifestyle in the first place?

Marty Zwilling

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Saturday, July 29, 2017

7 Keys To Positioning For Success In The Gig Economy

gig-economyIn case you hadn’t noticed, the world of business is becoming more and more a “gig economy.” This simply means that the number of people with a long-term single-employer agreement is going down, and the number of short-term contractors and freelancers is going up. It’s good for professionals, who get more control, and good for companies, who need more flexible staffing.

In my view, the gig economy is a key driver to the current boom in entrepreneurship – every professional and consultant is actually a solo entrepreneur. The good news is that each of us now has more control over what we do, when we do it, and how we do it. The bad news is we have to think like a business, with all the implications of branding, finding customers, and competitors.

If you are thinking of joining the rush in this direction, I found some practical insights for success in a new book, “Thriving in the Gig Economy,” by Marion McGovern. She speaks from years of experience mentoring and facilitating independent contractors and helping large companies, since well before the term “gig economy” was even coined.

As a new business advisor and mentor myself, I enjoyed her recommendations on many of these issues. One question I often hear from solo entrepreneurs, and she addresses directly, is “How do I set the right price for my services?” The simple answer is to balance supply and demand, but here are some specific considerations that she and I both proclaim as key factors:

  1. Use project pricing rather than hourly rates. Charging by the hour only makes sense for commodity work. For more complex or creative projects, where required hours to complete the work are less predictable, your experience, work ethic, and productivity are competitive advantages. Use them to increase your return, and drive repeat business.

  2. Quantify value to the client as price boundaries. Keep in mind that it is the work, not your pedigree that ultimately determines the price. An old rule of thumb, called the one-percent rule, or one percent of your annual income, should be your target daily fee. Like product companies, your pitch should quantify value to clients, rather than your costs.

  3. Your intellectual capital has value – factor it. If a gig is going to build your intellectual capital by broadening your skill base, or connections to future business, you should be willing to do it for less than you might otherwise. Conversely, if a client needs your unique knowledge and contacts, you should charge a higher price. Know your competitive value.

  4. Assess your fixed and variable costs per gig. Many solo entrepreneurs I know, who now work primarily from home, under-estimate their true costs, since they never had to worry about them as employees. These include office space and supplies, travel, training, bookkeeping, advertising, and many others. Simple rates-per-hour are very misleading.

  5. Factor in project risk before setting a price. The riskier a project, whether due to scope, aggressive goals, or too many unknowns, the more it should pay. The number of competitors who are willing and able to tackle risky gigs is small. The message here is to evaluate and negotiate each gig independently, rather than advertise a fixed low price.

  6. Anchor clients always deserve special treatment. An anchor client is one that pays your rent, so to speak, by giving you recurring business, and providing a stable level of income. Some solo entrepreneurs don’t hesitate to increase fees each year to match new clients, but that can be a mistake. Having a predictable base income is a wonderful thing.

  7. Government contracting is not for the faint of heart. Federal, state, and municipal governments are among the largest consumers of entrepreneur and freelance services, but client acquisition costs may be very high. Many require special licensing, insurance coverage, or security clearances. For these you should consider partnering with someone who has already satisfied the requirements.

While gigs have long been a focus on the low end of the skill spectrum, I now find more and more best-in-class professionals choosing the solo entrepreneur independent path and thriving. New digital platforms, such as Guru and Toptal, can quickly give you credibility and get you in front of top opportunities, but it’s up to you to compete and win in this new world of work.

Marty Zwilling

*** First published on Huffington Post on 07/26/2017 ***

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Friday, July 28, 2017

10 Entrepreneur Shortcuts To Be Avoided At All Costs

entrepreneur-shortcutsStarting a new business is a long, hard process, and I can’t blame any founder for looking for shortcuts. I’ve taken a few myself, and I know how much work they can save, as well as how painful some can be in retrospect. When you are trying new things, there are plenty of new problems to go around, so why would you want to re-experience the pain of others?

As a new business advisor and angel investor, I have assembled my own favorite list of shortcuts to avoid, in the hope of saving you from learning these lessons the hard way:

  1. Be satisfied with verbal or handshake partner agreements. This shortcut to avoid hard discussions and signed documents leads to more dysfunctional businesses and broken relationships than you could imagine. Early partners often drop out due to differences, but they don’t forget your original promises when you go public or hit it big.

  2. Wait until you have investors before incorporating your business. This is the classic “chicken and egg” problem of which comes first. I assure you that most investors will not take you seriously if you don’t have a real company, so you may wait forever.

    I recommend starting early with a cheap and simple Limited Liability Corporation (LLC), and converting later to a C-Corporation, if required. This protects your personal assets from liability immediately, and allows you to avoid being taxed on your founder shares.

  3. Count on family members and friends to grow the business. In the heat of scaling the business, it’s tempting to skip the cost and time of finding qualified job candidates, and enlist those close at hand, without paying them a competitive wage for the hard work and commitment you need. Remember the old adage that you get what you pay for.

  4. Reduce stress by hiring people who don’t challenge you. Very few people are experts in all facets of a new business, including finance, sales, marketing, and operations. The best strategy is to hire people who are smarter than you (in their domain), and allow you to learn from them, rather than the other way around. Moderate business conflict is constructive and should be embraced.

  5. Retain maximum equity by requesting minimal funding. Of course, you shouldn’t give away ownership, but squeezing yourself to failure, benefits no one. Size your funding requests to cover the next 18 months, and then buffer the amount by at least 25 percent. Things cost more than you expect, and cash-flow problems often are not recoverable.

  6. Focus on products and customers, and trust your accountant. New business owners should be signing every check, and managing every expense. The accountant may accurately record every transaction, but only you can make the strategic tradeoffs on marketing costs versus customer revenue, product quality versus support, and so forth.

  7. Maintain required control by not delegating decisions. Effective delegation is a skill that must be learned early by every business owner. There just are not enough hours in a day as the business grows for you to make every decision. To get business growth, you need team growth and loyalty, driven by letting them make decisions and do their job.

  8. Refusing to pivot from your initial business strategy. The strength of every new business is that it has no legacy, and being small, can adapt quickly and easily to new information and new customers. Your initial strategy will be wrong, no matter how carefully you worked it out. Refine your strategy at least quarterly, and relish changes.

  9. Spend all your time putting out fires, rather than planning. It takes effort and focus to drive the business, rather than let the business drive you. In every business there are crises every day that can prevent you from seeing the more important issues – including customer acquisition costs, competitive challenges, and new market opportunities.

  10. Never taking the time to enlist and learn from advisors. Too many business owners are convinced that listening to an advisory board or Board of Directors is a waste of time and money. As a result, they repeat the mistakes of peers, and also tend to repeat their own mistakes. Advisors and mentors enhance the learning and effectiveness of even the best business leaders.

I’m sure all you experienced business owners can add one or two more key items to this list. The reality is that making mistakes is a necessary part of every successful business growth effort, as long as you avoid the mistakes of others, and don’t keep making the same mistakes over and over again.

The other extreme shortcut is never trying anything new, which is always a mistake in business. You can’t win if you don’t try to push the limits. Work hard, but work smart.

Marty Zwilling

*** First published on Inc.com on 07/14/2017 ***

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Wednesday, July 26, 2017

7 Motivations Found In Business That Get Things Done

motivation-get-things-doneWhy do some people you know at work consistently get things done, while others never seem to finish anything? It’s certainly not all about intelligence, skills, and training. Some of the best-prepared people I know are the least productive, and they are quick to offer the excuse that they are idea people, perfectionists, or easily distracted. Most experts agree the real key is motivation.

In other words, highly motivated people will solve problems, learn new approaches, and deliver results on a far more timely and consistent basis than co-workers whose motivation is lacking or somewhere else. In a new book, “What Motivates Getting Things Done,” clinical psychologist Mary C. Lamia, PhD, explores the different motivations that drive people to pursue excellence.

Lamia argues that the most productive people learn first to interpret the messages from their own emotions, and secondly, pay more attention to the motivational style of key people around them, to be less annoyed and more synergistic with their efforts. From my own experience, I see many of the same key motivators in highly successful business people, including the following:

  1. Stimulated by the act of completing a task. Most often, these people are the ones who keep detailed task checklists, and get great satisfaction from crossing off each item as it is completed. The best task-driven people are motivated by the task itself. In other words, all business people, like others, are the most productive when they love their work.

  2. Motivated by meeting every deadline. These are the business professionals who have a natural default mode of starting immediately on every task, with the goal of finishing early for extra credit and extra satisfaction. If there is no deadline, they may make up one just to manage to it. While generally this trait is seen as positive, potential negatives include too much multitasking, appearing pushy, and not enough focus on quality.

  3. Need to avoid shame anxiety and fear of failure. Some highly successful people are actually procrastinators, and are driven by anxiety and low self-efficacy to start late, but work overtime to prove themselves. Active procrastinators are motivated by last-minute time pressures to complete on time. Passive procrastinators eventually give up or fail.

  4. The power of positive recognition from others. While some are motivated by their own negative qualms, others are motivated by positive feedback and incentives from peers and managers. They produce results because it gets them accolades and rewards, and more motivation. In this respect, you are the key to their productivity and success.

  5. A perfectionist’s pursuit of excellence in all things. The behaviors that people refer to as “perfectionistic” range from a healthy inclination to get things done very well to never-complete behaviors based on unrealistic standards and dreams. Obviously, business leaders must nurture the healthy side of perfectionists, and be selective in hiring.

  6. A strong emotional commitment to personal goals. People who set personal business and professional goals are more highly motivated to produce results and find success. Workers who see business work as a necessary evil, or a path to a paycheck, are not motivated to measure business results, no matter what incentives you provide.

  7. Willingness and ability to learn quickly from mistakes. In business, there are so many unknowns that some failure is inevitable. The key to productivity and success is what you make of your failures. Successful people are motivated to learn from failure, and follow up quickly with changes, while others play the victim and look for excuses.

The author Lamia makes an interesting note that humans are a marvel of evolution in not being solely motivated by positive emotions. Some are strongly motivated, and even driven to success, by the desire to turn off negative emotions, including fear of failure, shame, anger, and disgust. The challenge is to understand yourself and others around you to capitalize on these emotions.

Deadlines and results are just two of the many metrics you must use in business to measure yourself and others on motivation and productivity. There is no substitute or excuse for not getting things done in business. The long-term viability of your business and your career depends on it.

Marty Zwilling

*** First published on Inc.com on 07/12/2017 ***

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Monday, July 24, 2017

8 Big-Company Habits That Don’t Work In A New Venture

business-executive-corporate-jetWhen I hear executives and professionals in larger businesses talking about their dream of going out on their own to start a new company, I always cringe. I have been there and done that. They and I never realized how hard it is to break the big-company habits and conventions. If you are going to do it, don’t wait too long. The longer you wait, the more traumatic the decision will be.

First, the list of excuses for waiting gets longer and longer over time – need to work on my resume, broaden my experience, enhance my skills, save a larger nest egg, and maintain a stable income until the children are gone. Second, the list of non-entrepreneurial habits that you pick up in a large corporation gets bigger and harder to break. These include the following:

  1. Executives rely on staff to do the real work. Leaders in an enterprise soon forget how to write contracts, manage cash flow, or even how to schedule their own time and events. It’s easy to grow accustomed to saying “My staff will contact yours to work out the details.” In a new business, that luxury isn’t affordable, so key things may never get done.

  2. Professionals get dependent on big company perks. They assume that every business role comes with health insurance, a subsidized retirement plan, and maybe a company car or first-class travel. The longer you wait to start your own business, the higher the default burn rate, and the less happy you will be to take a financial step down.

  3. Expect to manage the team rather than be a part of it. In a new business, you are an integral part of every team, and the only member of many. Managing is not considered part of your workload. That’s a whole different mindset and skill set from the one you learned in a big enterprise. Small businesses require collaboration and walking the talk.

  4. Relish being the expert within a limited vertical domain. Entrepreneurs need to enjoy being a generalist, rather than a specialist. In a new business, there will not be an IT team to configure your computer, a procurement department for supplies and contracts, or even a personnel specialist for hiring and firing. You must be all of these and more.

  5. Rely on training courses and coaching for new roles. In a startup, you can’t afford to spend the time or the money for out-house training, so self-learning from the Internet and unpaid advisors is the norm. There are no in-house experts or training organizations to rely on. Thus big-company executives tend to under-estimate learning costs in a startup.

  6. Ability to attract top talent and offer near-term compensation. Entrepreneurs find it much harder to attract equity partners, compared to offering a premium salary to industry experts and people with highly relevant experience. Betting on the future is never as attractive to most professionals as an existing successful company and real cash today.

  7. Measure their worth by the size of their office and salary. Even the best new business owners often take no salary for the first couple of years, and use a cluttered back room for their office, if they have one at all. After too many years in a big company, that’s an unacceptable step backwards for many. Self-worth and self-confidence suffer.

  8. Social status becomes tied to recognized brand or role. Once you work for a prestige brand or carry a big title, it’s hard to be associated with a tiny business. Your extended family and social friends may still expect you at the country club, or ask you to join them on international vacations. Even your spouse won’t understand the new social norms.

So when is the best time to make the leap from a big corporation to a new business? My scan of the literature and talking to investors would indicate a few years of experience in a large organization (two to five years) is a good thing, while twenty or more years before founding your own venture will stack the cards against you.

Unless you are really young at heart, if you haven’t made the leap by the time you are in your early 40s, those habits you have picked up with your experience in a big company will be evident to you, your team, and to investors. Not to mention the fact that if you are accustomed to a big-company culture and lifestyle, you will likely not be happy or never risk the step to a startup.

So if you really want to start your own business, don’t wait too long. Old habits die hard, so the longer you wait, the harder it will be to make the jump, and your odds of success go down. In addition, if you change your mind, going the other way is always a lot easier.

Marty Zwilling

*** First published on Inc.com on 07/10/2017 ***

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Sunday, July 23, 2017

4 Startup Survival Lessons Lead To Business Success

Panthera_onca_predatorThe good news is that the rate of new entrepreneurship leveled off a bit last year, although it is still rising, according to the latest Kauffman Index of startup activity. The bad news is that it’s back to pre-recession highs, the opportunity for change is huge, and the cost of entry is at an all-time low. It’s a jungle fight for survival for aspiring entrepreneurs of all ages and demographics.

In this context, it’s time for every business, not only startups, to take a fresh look at the basics of business success. Jamie Gerdsen, in his classic book of lessons on business change, creatively titled “Squirrels, Boats, and Thoroughbreds,” aims first at existing businesses, but I believe that most of his points, like his laws of the jungle, can be rewritten for startups, as follows:

  1. If you want to eat... I don’t believe in greed, but we all need to make enough money to eat. This means building a revenue stream, and tuning your business model to produce margins in the 50 percent range or above. I support being socially and environmentally conscious, but you can’t help anyone else if you don’t eat.

  2. If you want to survive... Survival means growth and scaling. Once you have a proven business model, you need to scale the business up quickly to stay ahead of competitors. These days, doubling your business volumes every year is the “norm” that investors and potential acquirers are looking for.

  3. If you want to be feared... Every startup needs a sustainable competitive advantage. In the jungle, it might be the strongest jaws, but in startups it’s more likely the strongest intellectual property. With no competitive advantage, startups with new ideas gaining traction are never feared, and are usually eaten for lunch as sleeping giants wake up.

  4. If you want to mate... In the business world, we call this finding the right strategic alliances. That means you have to stand out above the crowd, and aggressively pursue those candidates that can help you breed even more presence and power in the marketplace. Sitting quietly on the sidelines, waiting to be found, is a lonely world.

Every startup in the business jungle begins with a limited amount of three precious commodities – time, talent, and treasures. The smart ones have a plan for how they intend to spend these resources, and measure themselves against the plan. Otherwise they will likely look back later, and find that one or more of the laws of the jungle have been compromised:

  • Time – Start with a timeline of how much runway you have, with objectives and milestones mapped against the timeline. Time management is an art. Don’t waste precious time on the “crisis of the day,” in favor of strategically critical tasks. The best entrepreneurs work on making better time management a top objective.

  • Talent – Every startup needs talents to give the company value. In the beginning, the entrepreneur has to cover all talents, which is made more possible these days by the wealth of information available on the Internet, as well as books and online courses. Talent can also be outsourced, but surviving in the business jungle without talent is unlikely.

  • Treasure – Most entrepreneurs assume that treasure means funding. In reality, more important treasures often include intellectual property, the ability to innovate, and well-defined processes that can deliver great products and reach new customers more efficiently and effectively than competitors. Money is no substitute for these other treasures.

In summary, whether you are running a startup, a family business, or a famous brand like IBM, you are all part of the jungle. You can be a small tiger with big teeth, or an aging dinosaur. The laws of the jungle apply to all. It really is a world of survival for the fittest.

The jungle framework is a great one to set the right perspective. Startups which prosper and succeed learn the rules of the jungle early, don’t make excuses, and don’t look for any entitlements. Does your startup have an understanding of reality, a real sense of urgency, and the overwhelming drive to innovation to make you the king of the jungle any time soon?

Marty Zwilling

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Saturday, July 22, 2017

8 Leadership Lapses Every Business Owner Must Avoid

leadership-lapsesEven entrepreneurs who have built many startups, or sold their last one for millions of dollars, know they make occasional people leadership mistakes. They know leadership is all about managing their own complicated, illogical, and fallible human foibles, as well as the people they depend on. These can trip up even the best, often at the cost of more than a good night’s sleep.

Thankfully, most mistakes won’t be as spectacular as the America Online merger with Time Warner for $350 billion, back in 2000, engineered by then superstar entrepreneurs Stephen M. Case and Gerald M. Levin. They apparently ignored all conventional wisdom and advisors, and struck a deal which crashed both companies, now a case study in many business schools.

By most accounts, this case exhibits almost all the lapses identified in a classic book by Dr. Nicole Lipkin, “What Keeps Leaders Up At Night.” She provides some great guidance, based on coaching experience and a doctorate in clinical psychology, on recognizing and resolving the most troubling management issues for leaders in all stages of an organization:

  1. I’m a good leader. So why do I sometimes act like a bad one? According to the evidence, good bosses go bad (temporarily versus the chronically horrible), for three overarching reasons – too busy to win, to proud to see, or too afraid to lose. Every leader needs to check and enhance his self-awareness to recognize and avoid these.

  2. Why don’t people heed my sage advice? Many people use the terms influence, persuasion, and manipulation interchangeably. But each carries its own specific meaning. Influence requires winning minds and hearts to inspire action. Persuasion intellectually stimulates a person to action. Manipulation is seen as insincerity, and it gets non-action.

  3. Why do I lose my cool in hot situations? Stress comes in two distinct forms: good stress and bad stress (distress). Managed effectively, stress is a good thing, leading to survival. But chronic stress and distress results in overreaction to non-life-threatening events. Schedule an on-going reality check with trusted advisors to know the difference.

  4. Why does a good fight sometimes go bad? A good fight in business is called healthy competition. Unfortunately, feelings of envy and inferiority can quickly turn healthy competition into a knock-down, drag-out fight between people and companies, turning a win-win situation into a lose-lose one. Check all your emotions at the gate.

  5. Why can ambition sabotage success? Every leader needs to balance ambition with humility, restrain one’s ego, treat others with respect, create positive impressions, and adopt a long-term perspective of success. Don’t let a “nearsighted” view cloud the “big-picture” view; success in the best interests of all. Contemplate your legacy to others.

  6. Why do people resist change? The brain’s hard wiring pre-disposes us to habitual behavior and decision making. We let biases influence our reaction to change and our ability to make decisions that cause change. To thrive you need to become more aware of biases and psychology behind your own and your people’s responses to change.

  7. Why do good teams go bad? Humans have always affiliated with groups and teams in order to survive and thrive. Group dynamics are not always good, including “us” versus “them” mentality, group conformity, social loafing, and emotional contagion. Leaders need to manage these dynamics to keep from falling prey to negative group behaviors.

  8. What causes a star to fade? When start performers fade, it’s almost always a failure to remain engaged with the people and the job. Smart leaders must constantly monitor the four essential elements of engagement: social connection, leadership excellence, aligned culture, and meaningful work and life. Engagement drives performance and satisfaction.

These questions should all be contemplated and understood by every entrepreneur and startup founder, starting on day one of their quest. Remember, we are all human, and we will make mistakes. The challenge is to learn from these, and just as importantly, learn from others who have been there before you.

So when you find yourself losing sleep at night, don’t get mired in the quicksand of self-pity and self-destruction. Every personal admonition of “What was I thinking?” should be followed with some objective analysis, maybe some help from a trusted ally, and a determination to get back on track and have fun. Being an entrepreneur is a lifestyle you must enjoy to be successful.

Marty Zwilling

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Friday, July 21, 2017

6 Steps To Saying No At Work To Your Boss And Peers

just-say-noEvery dedicated business professional I know can’t find enough hours in a day to do their best work, and yet they often find themselves saying yes to new requests from the people around them. In some cases it may be fear of retribution by the boss, but more often they just hate to disappoint others, and end up instead with high stress and low credibility in the crisis to deliver.

In addition to saying yes too often, professionals under pressure often say no poorly, by attacking the requestor or by avoiding any definitive response. Either of these approaches usually makes a stressful situation worse, often leading to guilt, burnout, and continuing accommodation.

The solution to this problem is part of a bigger challenge – taking back control of your work life, and regaining a sense of freedom and influence, as described in a new book, “Work-Life Brilliance: Tools to Break Stress and Create the Life and Health You Crave,” by Denise R. Green, a noted executive coach, speaker, and CEO of Brilliance, Inc.

A key part of her message that resonated with me, as a mentor to entrepreneurs, is her guidance on how to deal with the constant demands and requests that every business founder faces. She provides pragmatic advice for dealing with the three pains of the brain (social, status, and priorities) that erode your control and your satisfaction with work that you really love to do.

Specifically, here are six steps to declining requests without actually saying no, that she and I both recommend, when your plate is full or your priorities need to be elsewhere:

  1. Create a pause before responding. Did you ever notice how a yes can slip out of your mouth or get sent in an email before you even think about it? It’s tough to undo that yes without hard feelings or guilt. Before you respond, at least take a deep breath, or better yet, buy some time with language like “Let me give this some thought, and I’ll get back to you by the end of the day.” Be sure to follow-up as promised, to maintain your credibility.

  1. Clearly decline without using the word no. Skip the “maybes” or “I’ll try.” Make sure your response is clear and concise, with wording such as “I wish I could but I’m already over-committed,” “I’m just not able right now to do the job you need,” or “Anything new this week with my schedule is out of the question.” Be sure to keep a smile on your face.
  1. Share a credible reason for declining. Resist the urge to complain about being over-worked and under-appreciated, and share an honest explanation that you think is most credible with the requestor. For example, “I have another commitment at the same time that I can’t move,” or “This isn’t my area of expertise, so I’m just not the best person.”
  1. Offer sincere gratitude (as relevant). Ending with gratitude can soften the decline. It may sound like, “Thank you for considering me,” or “I’m pleased that you would trust me with such an important request.” Research shows that people pay more attention to endings, rather than beginnings, but you may choose to start with the thank-you.
  1. Make an offer that serves both your needs. Do not make an offer simply to make yourself feel better. A good offer might be, “Here is the contact info for the perfect person for this task,” or “I can recommend a new tool which will solve that problem with minimal effort by anyone.” The objective is to get the job done, and stave off future requests.
  1. Drop the guilt. Most times, guilt is just a bad habit – the result of trying to live up to unrealistic, unattainable standards. If you feel guilt, ask yourself, “Have I harmed someone or acted in conflict with my values?” If yes, apologize, then do better. Otherwise don’t let guilt trick you into thinking you are actually doing something productive for you.

Remember, you don’t have to be viewed as a yes person to be viewed as a leader. In fact, if you look at the leaders and most respected people around you, they are clear but selective in what they support and agree to do. They have learned the art of controlling their priorities, and they feel less stressed and more productive as a result. That’s the best way to enjoy work and life.

Marty Zwilling

*** First published on Huffington Post on 07/20/2017 ***

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Wednesday, July 19, 2017

5 Stages of Technology Adoption Compared To Grieving

mobile-phone-sad-faceHow many times have investors heard startups start their pitch by touting that their technology is “disruptive?” What entrepreneurs forget or don’t realize is that most customers are wary of all technology, educating the market on new technology is expensive, takes a long time, and people buy problem solutions rather than technology. Investors will likely wait for more traction.

The concept of disruptive technology was first introduced by Clayton M. Christensen in “The Innovator’s Dilemma” way back in 1995. Such technologies, like the digital camera and mobile phones, introduce such novel concepts that they displace existing technology quickly by societal standards. Unfortunately this “quickly” may be too slowly to save initial startups in the space.

In this time of rapid change, it’s easy to conclude that everyone is an early adopter, and we all tend to forget quickly the time and stages we go through while adapting to new technologies, and then loving them. It’s time to review the classic article on HBR “The Five Stages of Disruption Denial,” by Grant McCracken, comparing technology adoption to Kubler-Ross’ five stages of grief:

  1. Confusion. We don't quite get it. We sign up for the new app, or buy one of the new devices after we see our cool friends using it. We give it a whirl, and quickly complain that things were easier the old way. By this time, gurus are reassuring us that it is the greatest thing ever. But that doesn't help. We decide to wait another year for the next version.

  2. Repudiation. There are many people who don't get the new technology, and now social life is a little like a competition to show that we're not "falling for it." At this point, there can more social capital in saying that we don't like the technology than that we do. We all hear snappy one-liners like, "Twitter. What could I possibly say in 140 characters?"

  3. Shaming. This is when we are so persuaded that we're right and the new innovation is wrong that we are prepared to make fun of the credulous among us. "This Twitter thing. It's just a fad. Give it a couple of months and it will go away." We heard a lot of this sort of thing about Pinterest in the early days. Now it's valued at $12 billion.

  4. Acceptance. By this time, the innovation is taking off. The middle adopters are signing on. It is clear now even to late adopters (the great majority) that there is at least one useful aspect of the new technology, and it’s here to stay. Confronted by accomplished, irrefutable fact, the rest of us cave in, sign up, and brag about how modern we are.

  5. Forgetting. This is where we destroy the evidence, even in our own mind. Now we are inclined to act as if we always understood and approved of a world instilled with new innovation. One minute, we are too smart to be fooled by Twitter. The next we are fully on board. It's a like high school. We are captives of what Mark Earls calls "the herd."

In the old days, it typically took 20 years for this process to happen. Now it happens much faster, but it still takes longer that the survival lifetime of a struggling startup. Smartphone acceptance is now approaching 80 percent, only ten years after the first Apple iPhone was introduced. There is other evidence that may be the new norm, and will be soon beaten.

Marketing guru Seth Godin mentioned in an article a while back that “it takes about six years of hard work to become an overnight success.” Mark Zuckerberg spent about 7 years and $150 million before Facebook became cash-flow positive. MySpace and several others, who arguably pioneered the disruptive social media technology, never really survived to enjoy it.

Too many of the entrepreneurs I know who highlighted their disruptive technology early ultimately ran out of money and had to shut down for being “ahead of their time.” They did everything right, but the market just wasn't ready. Sometimes this is just an excuse for other problems, but don’t forget the old investor saying: "being early is the same as being wrong."

Overall, I think more startups do fail by being too early to market than fail by being too late. This is probably a hard message to swallow, but it’s usually the second mouse that gets the cheese. What are you doing to avoid this trap with your disruptive technology?

Marty Zwilling

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Monday, July 17, 2017

Startups Need Employees Who React Like Entrepreneurs

think-like-an-entrepreneurEvery startup lucky enough to get some traction gets to the point where they decide to hire some “regular employees” for sales, marketing, and administrative tasks. Then they are surprised to see productivity and creativity take a big dip. What they should be doing is hiring only “entrepreneurs,” meaning people who think and act as if this is their own business.

This commitment to hire people who think like entrepreneurs, or instill an “owner’s mindset” in every employee, should be a high priority in every business. It’s what every customer looks for in every transaction. Most people will tell you this is impossible, but I found a classic book, “Army of Entrepreneurs,” by Jennifer Prosek, where she seems to have actually accomplished this.

I like how she was able to motivate, train, and reward employees, including the implementation of an incentive program to get every member of the team actively involved in generating new business. She also identifies the typical myths against using this approach, and describes how to overcome each one:

  1. “Entrepreneurs are born, not made.” The reality is that all entrepreneurial skills are learnable skills. The entrepreneurial mindset is a function of motivation, priorities, and risk versus reward, all of which you set or enable by your leadership and example. Hire employees who have strong skills, with the motivation to learn new ones.

  2. “Employees will care only about work they create.” This is really an issue of the quality of the people you hire rather than the management or compensation system. The key is to hire people with the right mindset, and communicate it daily to your whole team, by your actions as well as your words.

  3. “Junior people shouldn’t be involved in new business.” This is the platitude of an obsolete corporate culture where you had to “pay your dues” in menial jobs before adding creativity or making decisions. In today’s marketplace, junior staffers are often the most intimately connected to the market, technology, and the customer network.

  4. “Employees will lose focus on their work.” Old management models encourage employees to optimize their own task, often at the expense of the overall company objectives. There is new evidence that people want to understand the bigger picture, and business growth financial incentives will increase productivity, rather than lower it.

  5. “Sales will be the organization’s sole focus.” Again, you get what you demand and reward. If sales are the only way to get rewarded in your organization, then sales will take precedence over other activities. Motivate for a spectrum of entrepreneurial behaviors, and you will see results.

  6. “We don’t need to reward lead generation.” For a startup, you don’t have a recognized brand to bring in the leads. All businesses need to proactively seek leads, rather than simply attract them, with the creativity and initiatives of every employee rewarded for every contribution.

  7. “There is too much risk associated with decentralized decision making.” When you have to move and change quickly to survive, centralized decision making is too slow. You become the bottleneck. If you train people properly, empower them, trust them, and they understand the business, your evolving business can become a revolution.

Every large company wishes they could harness the power of a thousand entrepreneurs within their employee ranks to re-create the exceptional business growth they once knew. Instead, for growth, most have resigned themselves to buying startups that exhibit these characteristics.

Thus, the last thing you need as a growing startup is a “regular employee.” Hire entrepreneurs like you, grow like an entrepreneurial company, and stand above competitors in the acquisition process to carry that fire forward. That’s a win-win for everyone in this new culture and new economy.

Marty Zwilling

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Friday, July 14, 2017

6 Ways To Learn From Failure, And Beat Success Odds

business-experiment-failureAspiring entrepreneurs and new business owners often ask me for a secret formula for success, and they seem surprised when I tell them there isn’t one. In my experience, every new business is best handled as a series of experiments, from which smart founders learn a winning strategy, after some mistakes. In fact, that culture of learning as you go is my secret to business success.

For example, you probably never knew that both Facebook and YouTube started out as dating-site experiments, but pivoted to something more unique when that experiment failed due to an apparently over-crowded market.

In today’s rapidly changing world, there are no sure-fire winning ideas, and experiments within clearly defined parameters are the only way to gauge the potential of emerging opportunities. Investors often argue that founders learn more from failed experiments, so don’t be afraid to wear your failures with pride, in support of what you have learned.

In fact, I just finished a new book, “Winning from Failing,” by business development and sales productivity expert Josh Seibert, which extends this principle as well to large corporate organizations seeking to improve their productivity and success. He and I both believe that the key to high growth in any company is a learning culture, led from the highest executive levels.

Everyone agrees that establishing and maintaining a company-wide learning culture is not so easy. It requires an ongoing commitment and effort from top executives and leaders at every level, with a focus on the following key principles:

  1. Incenting everyone to step outside their comfort zone. Innovation in building the business is just as important as in building the solution. Yet, by default, most team members stay within the realm of “what has always worked,” rather than stretch the limits. Leaders need to reward experiments, rather than demand fixed processes.

  2. Eliminate any drama and penalties from failed experiments. Many managers and entrepreneurs love to play the game of persecutor, rescuer, and victim, on every initiative that doesn’t go exactly as planned. In any of these roles, or by penalty, the manager discourages team members from taking anything positive from the learning opportunity.

  3. Encourage a strong learning culture to improve accountability. Organizations with a strong learning culture inevitably have a strong parallel culture of accountability. These are two sides of the same coin, and both lead to improved productivity and innovation. Accountability must be demonstrated from the top, and rewarded rather than penalized.

  4. Hire based on learning experiences rather than skills only. One question most interviewers never ask is for evidence of what you have learned from previous failures, as well as successes. This identifies “potential,” or the ability to adapt to and grow into more complex roles and changing environments. Potential is enhanced in a learning culture.

  5. Establish mentoring and coaching relationships. Both are an important part of every learning culture. Mentoring is a less formal arrangement for long-term career guidance, while coaching is a more formal association focused on improvements in behavior and performance in the current job. These roles can be equally beneficial for both parties.

  6. Clearly assign development responsibility and measure results. For every learning initiative, including training, mentoring, and coaching, someone has to be responsible for the actual work to get it scheduled and track results. Many executives give lip service to people development, but don’t allocate the necessary time or resources to be effective.

Once a learning culture is established, the fear of failure and retribution is removed, and people will move forward with confidence on a regular basis into uncharted territory. In today’s rapidly changing environment, that is the only formula any company can adopt to achieve long-term viability and success. It’s up to you to make it happen.

Marty Zwilling

*** First published on Inc.com on 07/01/2017 ***

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Wednesday, July 12, 2017

Great Businesses Focus On Solutions, Not Technologies

solution-not-technologyEven though I love technology, I always cringe when an entrepreneur starts an angel investor pitch to me by touting his new technology. They have forgotten that new technologies are perceived by most customers as causing more pain than the problems they eliminate. I chastise these startups to highlight the solution created by the technology, rather than the technology.

I usually get pushback about the success of all the great technology companies, like Intel and Apple. Let me be clear – technology and market-driven need not be mutually exclusive! The best companies find a way to drive the market with a solution based on their technology, rather than push their new technology as the solution for the marketplace.

Yet we all know that many customers delay their adoption of the latest software platform, and avoid new hardware, for a year or two until all the “kinks” are worked out of them. In reality, new technology alone is often assigned a negative value, as startups push out alpha and beta products earlier and earlier in the competitive rush.

Of course, there are always a few early adopters who love change and need to have the latest technology, but early adopters don’t make the market. Here are a few thoughts on a process that will keep you on the right track for the majority of your real customers:

  • Continually get real customer input. Is your product tempered with actual market and customer feedback? Everyone's personal perspectives and interests are different, so the key is starting from market problems, and going from there to technology - not vice versa. One good way to get this input is by providing a customer support forum, which asks for input, and also lets customers help each other.
  • Focus on user pain points. What are the major points of pain experienced by the users of your product or service? Users with no pain who say “nice to have” will not likely endure change for your product. For example, Xerox emphasizes the user multitasking capability for busy offices of their new printer family, rather than the new technologies.
  • Keep it simple and easy to use. Are the user problems being solved in the simplest possible way, with the fewest possible features, or have many features been thrown in, just because the technology can deliver them? Users want to know how your new digital printing workflow software helps you automate everyday operations, not how many features it has.

The easiest way to start this process is by starting from the market drivers and working forwards, not backwards. Don’t make the mistake of looking at market needs or requests as an afterthought to verify what's already been planned or built.

Companies that are market-driven are externally focused: they identify opportunities and then capitalize on them. Technology-driven companies are internally focused: they identify what is possible with the technology and then look for customers who might like the results.

Market-driven also means knowing the overall dynamics and forces in the marketplace and understanding how those forces might impact the business – marketing and sales driven. A technology-driven business is driven by engineers. A great company finds a balance between these two forces, but makes the business side the driver.

In fact, technology is neither intrinsically good nor intrinsically bad. We all know that very few customers will buy technology, simply for the sake of technology. Technology tools and platforms are hard to sell, because the people who love and understand them are not usually the decision makers, or the budget owners.

But how do you manage “disruptive” technologies, where people don't even know they have a need? Many entrepreneurs are convinced that they have the greatest invention ever, and others will believe when they see it. Investors know better, since dramatic changes in technology historically take a long time and lots of money go gain a foothold – with a few rare exceptions.

If you are looking for external investors, my advice is to take a hard look at your business plan and investor presentation. If they highlight your technology first, you will likely be tagged as a solution looking for a problem. Start by quantifying a customer problem, and show how you are using technology innovatively to solve this problem. That’s market-driven technology providing solutions, and every investor and customer will want a piece of that action.

Marty Zwilling

*** Published by Xerox Small Business Solutions on 07/06/2017 ***

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Monday, July 10, 2017

10 Unconventional Management Techniques That Work

sir-richard-branson-executiveI’ve been a manager in business for many years, and like most of you, I’ve also had my share of bad managers, as well as a few good ones. As a result, I’m certainly convinced that engaging, retaining, and developing people for maximum performance is one of the toughest jobs you will ever have. I’m also convinced that the conventional wisdom for best practices isn’t always right.

I was pleased to find a new book on this topic, “Managing to Make a Difference,” by Larry Sternberg and Kim Turnage, which manages to highlight some of the more pragmatic but unconventional insights on how to get better results, and still grow the respect of your team. Here are ten tips which may surprise many of you, but I have found to be real difference makers:

  1. Go ahead, get close to the people you manage. New managers are generally taught not to build personal relationships with direct reports – in case you have to discipline them later. I believe that a relationship makes it more likely they will trust your guidance, including corrective behavior, before anyone needs to resort to disciplinary action.

  2. Don’t get involved in mediating relationship conflicts. In my experience, this is definitely an area where “no good deed goes unpunished.” Managers often get sucked into relationship conflicts by trying to “manage” employees, instead of encouraging direct communication. Focusing on problems only magnifies negativity in your organization.

  3. Tolerate undesirable behaviors if results are solid. If a person is a top performer, but always late to meetings, or takes extra time off, it’s not smart to come down hard on annoying behaviors. This may be seen as favoritism, but I believe earned favoritism based on superior performance will be seen by others as a good thing and emulated.

  4. Kick butt to motivate a sense of urgency. In these days of feel-good incentives and only positive feedback, there are still times to let people know strongly that their work approach is unacceptable. Kicking butt cannot and will not increase people’s ability to perform better, but it can be very effective when they are not giving their best effort.

  5. Solicit volunteers for unpopular tasks. Most managers assume that unpopular tasks have to be dictated or rotated. In reality, the volunteer approach can be more effective, since you might be surprised by an unknown interest, or the appeal of a benefit, such as doing the task from home. Volunteers will always be more engaged and more committed.

  6. Invest more of your time with top performers. Personnel people talk primarily about spending time with and coaching poor performers. Yet top performers are the most responsive to coaching, and can leverage your help much more effectively. It’s also the only way to key your best performers challenged, or from being recruited away.

  7. Consider firing someone as the most caring thing to do. In the vast majority of cases, when an employee is not succeeding, he or she knows it long before you do. Extending their time in that situation is not compassionate, diminishes self-esteem, and the stress often causes health problems. Let them go to find a better fit, with real job satisfaction.

  8. Don’t chase hearsay, rumors, or gossip. When someone gives you third-party information, it is almost always incomplete, out of context, or biased. Any attempts by you to “verify” this information, takes valuable time, with results equally unreliable. Even worse, people follow your example, causing greater damage to productivity and morale.

  9. Take action on legacy employees. Contrary to popular belief, doing nothing is not the easy way out. Be thoughtful and compassionate, but deal with the challenge head-on. Carrying them, or allowing them to continue with no change until retirement, kills your credibility, as well as the productivity of the entire team. Taking no action hurts everyone.

  10. Focus on hiring people who can replace you. I have always sought to hire people I can learn from, rather than time training. It is easier to move up in your career when you have members on your team who can smoothly transition into your role. In addition, that kind of reputation tends to attract additional high-performing people to your organization.

I find that too many managers get so focused on business goals, and their own personal agenda, that they lose sight of the individual needs of their employees. Managers you remember and respect, even if their approach is unconventional, are the few who focus on making a difference in the lives of the people they manage. That’s a win-win opportunity that we should all strive for.

Marty Zwilling

*** First published on Inc.com on 06/19/2017 ***

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