Friday, September 29, 2017

7 Steps To Building The Right Team For Your Business

Business People. Successful Business Partner Shaking Hands in the office. Business TeamMost new entrepreneurs work alone in developing their idea or a solution to a problem, but ultimately realize that starting and growing a business requires more. Not many people have the bandwidth to simultaneously cover all the required bases in finance, marketing, manufacturing, and operations, as well as solution development. It takes a working team to build a business.

What many don’t realize is that building that team is as critical and as difficult as building the solution. If you have the wrong people on your team, or the team can’t work together, you have no chance of making an epic business, no matter how great your solution. Witness the many memorable failure examples, including Friendster, Pets.com, and Webvan.

I see plenty of guidance of developing ideas, but very little on how to build the right team. Thus I was particularly pleased to see the new book, “Do Big Things,” by Ross, Paccione, and Roberts, that highlights the team building process specifically, based on their years of experience facilitating leadership teams around the world.

The authors detail seven steps, which I adapt here to new businesses, for mobilizing the hearts of minds of your team, in order to make the epic impact that you envision:

  1. Define your desired business culture and find people who fit. The first step is to assemble people who are willing and able to work together as a team. Getting subject matter experts is necessary but not sufficient. Finding interns or family members to save money won’t work. You need team members who are aligned in their thinking and action.

  2. Make sure the team embodies a common definition of success. Find people who share your vision of success and have confidence in you and what you are setting out to do. Teams that do big things do not team casually or randomly. They are willing and able to leverage failure, without losing confidence, since every business has many unknowns

  3. Everyone must choose to contribute, activate, and connect. Each team member must be determined to bring their best to the role, bring out the best in others, and choose to partner across their areas of expertise to deliver on the shared objective of a successful new business. Make it clear how you will measure each person’s results.

  4. Assure each team member has barrier breaking authority. Because every new venture has limited resources, the team will have to deal with real barriers, perceived barriers, and symptomatic barriers. The toughest barriers are competing priorities caused by business leadership not being aligned on a common purpose, strategy, or plan.

  5. Foster solid relationships to keep focus on what matters. It’s impossible for a team to effectively focus its energy on executing a plan when team members are distracted by poor relationships with one another. If you want epic team results, equip team members to have epic relationships, and clearly communicate purpose and milestones expected.

  6. Energize the team around a shared purpose and reality. A team can only build a successful business when the members of that team have an open mind that is receptive to your vision of changing the world. Energy that is being used to protect yourself cannot simultaneously be used to build the connections necessary for the team to succeed.

  7. Convert your vision to milestones to mobilize hearts and minds. Empower the team to create action plans for delivering a new and innovative business. Every team member must be equipped to ask the types of questions that lead to positive results, not boilerplate questions that aren’t intended to solicit answers or forward movement.

Every new business team has a big job to do – against swirling priorities, rapid change, and seemingly impossible deadlines. Too many teams are formed as groups of people thrown together with outdated and naïve ways of working with others. With scarce resources, this means that the average team is destined to flatline and fail. Don’t let your new business be the casualty.

Marty Zwilling

*** First published on Inc.com on 09/14/2017 ***

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Friday, September 22, 2017

8 Coaching Myths To Avoid In Building Your Team

team-coaching-mythsBusiness productivity is all about having the right people, even though I’m bombarded daily with online tools and mobile apps that promise to solve every problem with automation and data. In reality, business success and satisfaction is about doing the right things at the right time, which requires leadership and coaching. But coaching doesn’t always work the way you expect.

In fact, I’m a strong proponent of coaching and mentoring in the workplace, but I recognize that these efforts can only go so far in eliminating your human resources problems, and increasing team morale and performance. Some managers work too hard on fixing the weaknesses of the people they have through coaching, rather than enhancing the strengths of the right people.

Most companies still operate around a set of related coaching myths I saw described well in a new book, “The Power of People Skills,” by Trevor Throness. Trevor is a veteran coach who has helped hundreds of entrepreneurs, organizations, and business families across the country. He knows well when it works, and when it doesn’t.

For example, he says that he has never yet worked with someone who succeeded because they had a well-honed set of strong weaknesses. I have paraphrased here his summary of the most common coaching myths:

  1. Coaching is to help people manage their weaknesses. Everyone has weaknesses, including your star employees. The focus of coaching should be to capitalize and extend their strengths, not manage their weaknesses. Coaching is helping a person increase self-awareness and adjust their role to take better advantage of their greatest strengths.

  2. People’s basic weaknesses will change if they’re coached. In reality, if you like the basic package of who your employee is now, know that they will get better with coaching and training. If you don’t like today’s package, all your effort, time, and money will not turn them into a different person. People can change themselves, but you can’t change them.

  3. Coaching will fix the behavior of stubborn, poor performers. A good test of your poor performer is to mention the possibility of receiving coaching. If their ears perk up, and they express interest, maybe there’s hope. If you see no enthusiasm, don’t waste your time with elaborate, ongoing coaching efforts that go beyond the basics.

  4. Tough coaching conversations damage relationships. Ironically, more often than not, just the reverse is true, if the conversation is direct and without undue emotion. Superstar leaders are able to have difficult conversations without making enemies. They earn trust and loyalty because they’re willing to tackle these issues, without being judgmental.

  5. Successful coaching suggests making sweeping life changes. Typically, sweeping changes are short-lived. Real change happens more gradually and takes more enduring effort. A successful coaching engagement is more like a marathon that a sprint. All it takes is someone committed to getting a little bit better each and to finishing the race.

  6. All age generations can be coached the same way. If you use the same approach with every age group, you will miss the mark for all. Members of different generations tend to view the workplace differently. The best leaders and companies adapt the role and guidance to the people they have, rather than expect people to adapt to assigned roles.

  7. The person with the best qualifications wins every time. Skill is needed, but if you have to weigh skill against culture fit, choose fit every time. Hire for fit; train for skill. People who are bright, people-savvy, and eager to learn and grow are always a good fit. Look for natural-born leaders with drive, vision, purpose, and a focus on the customer.

  8. Personal life changes need not be allowed to impact work. At the end of the day, your personal and professional lives are the same life. If your work life is going badly, your loved ones feel it at home, and vice versa. The best leaders don’t dodge personal issues, but add coaching to minimize the work impact, and adapt roles where possible.

Effective coaching starts with sitting with each of your team members, helping them identify their greatest strengths, and brainstorming with them about how they can capitalize on strengths. Coaching is not pouring time into people who are not interested in growing, not pleasing customers, or not moving ahead. Focus on people coaching, and the tools will do the rest.

Marty Zwilling

*** First published on Inc.com on 09/07/2017 ***

*** Polish translation provided by Marie Stefanova ***

*** Bosnian translation provided by Amina Dugalić ***

*** French translation provided by Jean-Etienne Bergemer ***

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Friday, September 15, 2017

7 Effective Approaches For Navigating Office Politics

office-politicsRunning a business would be so much easier if we didn’t have to deal with office politics. Every business professional not only have to deal with their own office politics, but also with those in their customer offices, vendors, and partners. According to some sources, 47 percent of workers feel that office politics take away from their productivity, and is one of the top 10 stressors.

Yet “Basic Office Politics” is one of those required college courses that, as far as I know, still doesn’t exist. We all have to learn the hard way all the tactics to use and avoid to be productive within the complex network of power and status that exists within every business, large and small. In my own case, it took me many years of trial and error to find some paths through the swamp.

Fortunately, today there are some good books around to get you started, including “How to be an Even Better Manager,” by Michael Armstrong. His handbook on business skills has been the textbook for business professional through all its ten editions, and has been translated into twenty-one languages. Here are his key points and mine on how to capitalize on office politics:

  1. Identify the political players and stakeholders. We all start out naively assuming that all business leaders make decisions based wholly on fact and merit. The first challenge is to develop your “political sensitivity” – observe and ask questions about how things are done in your business, where the power bases are, and who has hidden agendas.

  2. Learn how to keep political players comfortable. Every individual and leader has their comfort zone – behaviors, values, attitudes, fears, and drives that result in productive relationships. Actions outside these comfort zones will likely lead to feuds, hidden decisions, excessive arguing, counter-productive lobbying, and back-biting.

  3. Build your cases to align with decision makers. Before coming and launching a fully- fledged proposal at a committee or in a memorandum, it’s smart to test opinion and find out how key people will react, This enables you to anticipate counter-arguments and update your proposal to answer objections and to accommodate political realities.

  4. Work the network of key people on decisions. Facts and merit don’t make decisions – people make decisions. Just as you do your homework on the facts, also it pays to do your homework by visiting the players in a given situation. Effective management is the process of harmonizing individual interests with the goals of all business stakeholders.

  5. Identify the gatekeepers and norms for action. Focus your powers of persuasion on the right people, and the right issues. Politically insensitive business people often try to steam-roll others with emotion, a barrage of facts, or a claim of high-level support. In fact, a political approach is often the best solution where clarity of goals is not absolute.

  6. Support others as often as you ask for support. Successful businesses are run by building relationships, and every relationship is a two-way street. If you are viewed as always demanding support, but never giving it, your effectiveness will be greatly reduced, even when you are right. Always communicate the win-win element in every decision.

  7. Be prepared to stand firm and lose some deals. When your integrity and values are at stake, do not fold. Everyone needs to see that you do have strong principles, and are not merely compliant with the whims of a political power center. Even the most powerful influencers don’t win every battle, and need to show that they are still part of the team.

There are obviously occasions when a subtle or indirect appeal, rather than a direct attack will pay bigger dividends in highly-charged political situations. It is never legitimate or appropriate to tread on other people’s faces, or revert to buck-passing, memoranda wars, or back-stabbing.

In summary, whether you hate it, admire it, practice it, or avoid it, office politics is a fact of life in every company and organization. Whether you learn it in school or in real life, office politics is not rocket science, but something that you need to master to assure your own success. Complaining about it won’t help.

Marty Zwilling

*** First published on Inc.com on 08/23/2017 ***

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Monday, September 11, 2017

10 Negatives That Still Make Going Public A High Risk

ipos-are-high-riskIn the old days, every entrepreneur dreamed of easily taking their startup public, and making it big. Today the rate of startups going public (IPO – Initial Public Offering) is up from the dead zone, but is still half the rate of 15 years ago. Smart entrepreneurs are just now starting to look at this option again, due to its unpredictability and the challenges of running a public company.

According to a recent Ernst & Young global report, the first half of 2017 was the most active first half by global number of IPOs since 2007. Yet they still see warning lights in many geographies around the world, due to political uncertainties. Today around 90 percent of successful startups are still acquired by bigger companies, as the safer and preferred method of growth and funding.

The reasons are a lot more complex than the meltdown of key investment banks in the US a few years ago, so don’t expect a big change in the numbers soon, even with recent stock market rallies. In my view, the key reasons that IPOs have lost their luster from an entrepreneur and investor perspective include the following:

  1. The US IPO process is still stumbling. Too many startups have experienced early financial losses and technical glitches, like Groupon and the Zynga IPO a while back, which antagonized individual investors and startup executives as well. In addition, most ordinary investors are convinced that IPO rewards only go to insiders.

  2. Going public is an expensive process. Typical costs for startups today range from $250,000 to $1 million, even if the offering does not go through. In addition, huge amounts of executive time are required, as well as hits to key operational, accounting, and communication processes. The M&A alternative looks simple by comparison.

  3. Constant pressure to increase earnings. Because public shareholders usually take the short-term view, they want to see constant rises in the stock's price so they can sell their shares for a profit. Thus, there is tremendous pressure to increase current earnings, and little appetite for strategic investments.

  4. Startups going public are laid open to competitors and critics. Startups are typically run by a couple of executives who are reluctant to disclose via the prospectus and SEC reports all the decision-making criteria, operational financial details, and compensation formulas. With thousands of shareholders, dealing with critics is an onerous challenge.

  5. Complying with Sarbanes-Oxley requirements is a heavy burden. Public companies of any size must comply immediately with the full reporting requirements of the SEC. There is no accommodation for smaller public companies, who can’t be competitive in their space with the new accounting, documenting, and reporting processes required.

  6. Public companies are always at risk for takeovers. Friendly or hostile takeover attempts are just a couple of the many ways that company founders sense a loss of control of their own destiny. The board of directors, as well as public stockholders, are no longer part of the inside team focused on the founder’s vision to change the world.

  7. Increased liability risk exposure. Public company executives and directors are at civil and even criminal risk for false or misleading statements in the registration statement. In addition, officers may face liability for misrepresentations in public communications and SEC reports. Executives are also at risk for insider trading and employment practices.

  8. Violent market swings usually hit public companies first. Private companies in less-relevant market segments can often fly under the radar in turbulent times like the recent recession. Public stockholders are more easily swayed by emotion and the activities of the crowd, than real market conditions.

  9. Startup founders don’t fit in a public company. Most just don’t enjoy all the challenges of communicating to analysts, placating demanding stockholders, and keeping up with legal reporting requirement. They know they can be quickly tossed aside for not maintaining the right image and the right relationships with people they don’t like.

  10. The image of large public companies is negative. In the last few decades, the paternal image of large multi-national company leaders like Thomas Watson at IBM and Henry Ford is gone. Now the mistakes of large companies like Enron and BP have set a new image of public companies as being led by greedy and uncaring executives.

These negatives have largely overshadowed the potential IPO positives of increased capital for the startup, possible huge increase in personal net worth, broader access to investors, market for their stock, the ability to attract top-notch professionals, and the peer prestige of running a public company.

Thus most startups I know don’t even mention the IPO exit option, when applying for angel funding, and most angel investors will react negatively if you do mention it. As best, you should reserve this option for later stage VC discussions, once you have a well-proven business model, large market following, and substantial revenue.

More importantly, make sure first that you really want to give up the entrepreneur lifestyle for the challenges of a public company executive. I’m betting that Mark Zuckerberg of Facebook fame still has second thoughts from time to time, despite being worth $71 billion as a result.

Marty Zwilling

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Sunday, September 10, 2017

7 Action Items For Introverts Starting New Ventures

introvert-business-ventureYou can’t win as an entrepreneur working alone. You need to have business relationships with team members, investors, customers, and a myriad of other support people. That doesn’t mean you have to be a social butterfly to succeed, or introverts need not apply.

It does mean that you need to look, listen, and participate in the business world around you, and network through all available channels, like business-oriented social networks online (LinkedIn), local business organizations (Chamber of Commerce), and events or conferences in your school or industry.

I hope all this seems obvious to you, but I still get a good number of notes from “entrepreneurs” who have been busy inventing things all their life, but can’t find a partner to start their first business, and others trying to find an executive, an investor, or a lawyer.

What these people need is more relationships, not more experts, more blogs, or more books. So I thought I would drop back to some essentials in building and nurturing business relationships (most of these apply to personal relationships as well):

  1. Build your network. These are people of all levels that have been there and done that, meaning people who know something that you need to know. See my article from way back “Entrepreneurs Learn Best From Business Networking” on how and where to get started. You don’t need a thousand friends, but a few real ones can make all the difference.

  2. Give and you will receive. Relationships need to be two-way, and can’t be just all about you. If you are active in helping others with what you know, they will be much more open to help you when you need it. The more you give, the more you get in return, both literally and figuratively.

  3. Work on your elevator pitch. This is a concise, well-practiced description of your idea or your startup, delivered with conviction to start a relationship in the time it takes to ride up an elevator. It should end by asking for something, to start the relationship.

  4. Don’t skip all business social settings. Face time is critical, even with the current rage on social networks, phone texting, and email. Studies show that as much as 50-90% of communication is body language. That’s usually the important relationship part.

  5. Nominate someone as your mentor. Build a two-way relationship with several people who can help you, and then kick it up a notch with one or more, by asking them to be your mentor. Most entrepreneurs love to help others, and will be honored to help you.

  6. Cultivate existing allies. These are people who already know and believe in you, but may not be able to help you directly in your new endeavors. But don’t forget that each of these allies also has their own network, which can be an extension of yours, if you treat them well.

  7. Nurture existing relationships. We all know someone who claims to be a “close friend,” but never initiates anything. They never call, they never write, and wait for you to make the first move. If you don’t follow-up on a regular basis with someone, there is no relationship, only a former acquaintance.

On the positive side, many attributes of an introvert lead to better business decisions, such as thinking before speaking, building deep relationships, and researching problems more thoroughly. Mark Zuckerberg, Facebook founder, is currently the most famous introvert entrepreneur, so don’t let anyone tell you it can’t be done.

One of Mark’s secrets seems to have been to surround himself by extroverts like COO Sheryl Sandberg, and people who have a complementary energy. But working alone doesn’t get you very far. It takes a team to win the game of business, so take a look around you to see how you are doing so far.

Marty Zwilling

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Friday, September 8, 2017

Are You Involved With Business, Or Fully Committed?

involved or committedIn my role as advisor to small businesses, I often think of the old joke, “In a bacon-and-egg breakfast, the chicken is very involved, but the pig is committed.” Some business owners claim to be committed, but seem quick to look to someone else to make the hard decisions, or some external factor to blame for challenges. On the road to success, the buck always stops with you.

Some argue that success is all about being "blessed with talent" or even just lucky. Billionaire Mark Cuban writes on his blog that it took an incredible amount of commitment and work to benefit from his luck. When starting his first company, he routinely stayed up until two in the morning reading about new software, and went seven years without a vacation.

Even after many years running his company, retiring, and returning, Starbucks CEO Howard Schultz still gets into the office by six in the morning and stays until seven PM. Schultz then talks to overseas employees even later at night from home. He goes into the office on Sundays and reads emails from his thousands of employees on Saturdays. That’s commitment.

On the other hand, I often hear from “wanna-be” entrepreneurs who dream of being their own boss, and working their own hours by running their own business. Let me assure you, if you don’t have the mindset to fully commit to all the rigors of owning a business, you will be happier taking orders, and a paycheck, from someone else.

From my own experience, for your own calibration, here are some indications of what I believe truly committed means for a business professional and leader today:

  1. Actively proclaims leadership and responsibility. The most successful business owners are not hesitant to ask for advice, but would not dream of letting someone else make the final decision. They only blame themselves when things go wrong, but are quick to try again, and never give up. They don’t like to share rewards or responsibility.

  2. Demonstrates ongoing passion for the business. Committed owners love their idea, and you can hear the commitment in their voice and dedication. Often they connect their work with a higher purpose, such as changing the world, rather than just making money. My challenge as advisor is to help them find facts and structure to validate their passion.

  3. Does not seek repeated confirmation of value. In business, count on it being lonely at the top. If your psyche is one that needs regular positive feedback, and a commensurate paycheck to stay motivated, you need to find a real job rather than an entrepreneurial one. The best businesses are innovative, which means venturing into the unknown.

  4. Gives priority to business demands over social. If you find yourself unable to clear your head of work-related thoughts at the end of the day, that’s commitment. Social relationships are important, and you do need to blank out work from time to time, but if social priorities are at the top of your list, you won’t enjoy the business owner role.

  5. Gets satisfaction from solving business challenges. Some people need a predictable schedule, for personal reasons or just peace of mind. Entrepreneurs need to be flexible, and assume there will be long working hours. If you are annoyed rather than exhilarated at the unpredictable schedule at your business, you may be involved but not committed.

  6. Never finds time or interest in a real vacation. Most business owners I know can’t remember the last time they had a “real” vacation (without bringing their work along). This may not be healthy, but it illustrates the level of commitment of your competitors in the marketplace. Many see trade shows or business expositions as their vacations.

  7. The thought of retirement suggests boredom. Most employees involved with a business are working hard, but are looking forward to retirement. The most committed entrepreneurs wouldn’t think of retiring, even if they made millions from the current project. They enjoy work too much to retire, and can’t wait to start their next venture.

These characteristics are not a statement of right or wrong, but just different strokes for different folks. The next time you have the urge to chuck your day job and jump to your dream role, remember to test yourself first against these principles of commitment. It’s a hard landing, and a big climb back up the cliff, if you change your mind after the jump.

Marty Zwilling

*** First published on Inc.com on 08/18/2017 ***

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Monday, September 4, 2017

6 Symptoms Of A Dysfunction That Can Kill Your Dream

businessman-founders-syndromeFounders almost always cite lack of money as the reason for failure, but if you look deeper, I believe the reason is more often about dysfunctional people and leadership. Sometimes it comes right back to the founder, in terms of a malaise often called “founder’s syndrome.” A few years ago I was intimately involved with a promising startup that taught me about this issue.

I’ll be short on specifics here, to protect the guilty, but I hope you get the idea. It’s not a disease, but it can kill your startup. You can find a more complete discussion of founder’s syndrome on Wikipedia, but here are a few of the “symptoms” I observed in the founder and CEO in this case:

  1. Advisors and staff hand-picked from friends and connections. Personality and loyalty are apparently the key criteria, rather than skills, organizational fit, or experience. The executive is looking more for cheerleaders, rather than people with real insights and ideas.

  2. Reacts defensively and talks constantly. Sometimes it's time for quiet listening rather than talking. A strong and confident leader will always realize that a defensive response before the input message is complete does not impress investors, nor anyone else on the team.

  3. Staff meetings are for one-way communication. This founder holds staff meetings only to report crises, rally the troops, and get status reports on assignments. There is no concept here of team strategy development, and shared executive agreement on objectives.

  4. With no input and no “buy in” from the team, sets extremely ambitious objectives. These objectives are set based on the desires and dreams of the founder, with no recognition of technical realities, costs, or time required.

  5. Over time, becomes more and more isolated and paranoid. The first clue is some veiled comments about the motives of staff members, advisors, and investors. These become more specific as the situation gets more dire, to the point where key members begin to desert the ship in disgust.

  6. Highly skeptical about planning, policies, and advisors. Claims "they're overhead and just bog me down." The founder perception is that his experience is more applicable than the input of others, and formal planning and policies are just a way of introducing unnecessary bureaucracy.

In the beginning, we all found our startup founder to be dynamic, driven, and decisive. He had a clear vision of what his organization could be. He seemed to know his customer's needs, and was passionate about meeting those needs. Just the traits one would expect for getting a new organization off the ground. However, he had other traits, including the ones listed above, which became major liabilities.

The undoing of the company began when a potential investor, after months of search, was ready to put up $1 million, but made it clear that his firm would likely need to replace the founder with someone with more credentials and experience in this industry. With that revelation, the founder killed the investment deal, and every other potential deal which raised the same issue.

Of course, no situation is this simple. There were product development problems, pricing problems, and early customers who demanded more features and delayed contractual payments. The ultimate result was a startup founder who exhausted his personal funds, drained the investments capability of friends, and drove away the team one by one.

For me, this is a most frustrating and difficult problem for any advisor or team member to deal with, since communication and learning can only occur when someone is open and listening. If any of you out there have seen this, or have some experience or ideas on how to deal with this situation effectively, let me know. You can be a hero if you have the cure.

For all you founders out there, if you find this article anonymously taped to your computer, it might be time to take a hard look at yourself in the mirror. We can’t change you, but you can change yourself. It could save your startup!

Marty Zwilling

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