Monday, April 30, 2018

6 Strategies for Showing Authenticity in Leadership

authentic-bill-gatesEvery business owner and startup founder knows they are expected to lead the charge in starting and growing their business. In my experience as a business advisor and mentor, I find that most believe they are doing a convincing job, but in many cases, their key team members are not so sure. In reality, leadership is a function of what your team believes, not what you believe.

This is an area where perception is more important than reality. I find that leadership is a hard thing to fake. Authentic leaders start with a strong sense of values, and some deep beliefs in their mission and purpose, but just as importantly, they are able to personally inspire and build trusting relationships with the people around them who can make things happen in the business.

I found this concept of authentic leadership outlined well in a recent book, “Impromptu,” by Judith Humphrey. She has coached thousands of leaders over the years on how to inspire and influence people when they speak, both formally and informally. She offers a half dozen sharing strategies for demonstrating authenticity that I believe everyone in a leadership position should practice:

  1. Share your presence. The starting point of projecting authenticity is to be mentally and emotionally present and focused on people when you are physically present. We have all had bosses who seem to always be in another world, or take constant interruptions, when you are looking for attention. Make sure your authentic self is always perceptibly present.

  2. Share your ideas. Authenticity also means having the courage to share your thinking. Some business leaders feel more comfortable or obliged to echo what others think, or give you the company line, but never seem to have a view of their own. With classic leaders, like Steve Jobs, the team always knew his bold ideas for design and direction.

  3. Share your beliefs and values. Recognized leaders inspire others with their beliefs and values. Many years ago, I had occasion to work directly with Bill Gates at Microsoft on DOS. People on his team clearly waited for his technical insights, and couldn’t wait to make them a reality. His approach was not always polite, but it was definitely authentic.

  4. Share your feelings. If you announce a reorganization or business pivot in a purely factual manner, you will come across as unfeeling and insensitive. It’s important to use your own words, with real passion, to be viewed as authentic. Just don’t let that passion turn negative, by venting or making excuses about poor customers or the economy.

  5. Share your vulnerabilities. Authentic leaders are forthcoming about both their strengths and weaknesses. I once worked for a startup CEO who always pretended to have all the product answers, even when it was clear to everyone that his technical depth did not match his marketing passions. Humbly asking for expert help makes leaders stronger.

  6. Share your stories. Personal stories are always more effective in delivering a message, and in establishing the authenticity of the speaker. Team members find it easy to relate to stories about learning experiences and family challenges. Everyone wants to grow and develop their own abilities, and tend to follow people who are models of that ability.

With these initiatives, I believe every one of us can become a better leader, and be perceived that way by our peers and team members. While we are talking about perceptions and authenticity, another key element to watch is your body language. The wrong body language can easily undo all your efforts to create openness, warmth, and interest in the other person.

For example, if you intend to project openness, never cross your arms, or stand and hover above a peer or team member who is sitting down for a discussion. Don’t forget the power of good eye contact in making you appear approachable, likeable, trustworthy, and believable. There are many other body language elements that will reinforce or dilute your efforts to improve leadership.

Unfortunately, I still find too many entrepreneurs who are convinced that building a business is primarily about getting the technology right, and finding the money. In my experience, it’s more about finding the right people, and being able to be the leader that they need. That’s why the investors I know say they invest in the jockey, not the horse. Be the best jockey that you can be.

Marty Zwilling

*** First published on on 04/17/2018 ***



Friday, April 27, 2018

How To Pick A Business Model That Is A Match For You

business-model-for-youIt’s painful when you start a new business for the wrong reasons. As a mentor to aspiring entrepreneurs, one of my challenges is to make sure their idea is a match for them. For example, I have a friend who is a self-proclaimed “foody” who wants to start a restaurant, but really has no interest or skills on the business side. Loving food does not necessarily lead to a happy business.

Of course, one solution is to find a partner who has the skills you are missing. I actually worked with Bill Gates back in the early PC days, and I’m convinced that Microsoft may have failed to grow without his partner Steve Ballmer. Bill Gates ran the technical show, but Steve Ballmer, business trained at Procter & Gamble, carried the marketing and financial side of the equation.

Many technical entrepreneurs still tend to believe that their technology and passion are ninety percent of the equation, and the business will happen by default. In my view, this mismatch of interests compared to key business drivers is the primary reason that the majority of new ventures ultimately fail. Here are some key questions I ask to get you started on the right track:

  1. Is there a real business need for your proposed solution? A business need implies customers with money to spend, that have a painful existing problem. Remember that customers buy solutions, not technology, and they rarely pay for “nice to have.” Your passion alone, for your food or your product, probably won’t change the world.

  2. Are you knowledgeable and comfortable in this domain? Don’t step into an arena you don’t know, just because it looks like fun or easy money. Match the business to your comfort level, such as franchising, multi-level marketing (MLM), freelancing, or a new product. Don’t forget that all business types require management and execution skills.

  3. Is your intent to maximize profit or maximize social impact? The business implications and expectations are quite different for non-profits versus for-profit entities. For example, I often find social entrepreneurs looking for investors. You can’t interest investors if you don’t intend to profit. Non-profits need donations and philanthropists.

  4. Are you primarily motivated by family or peer expectations? Don’t try to be a business owner just to prove something to a loved one, friend or sibling. There are no business types that I would recommend here, except maybe an existing family business that is already successful. If you must proceed, at least pick something you love.

  5. Do you have money for bootstrapping or require financing? If you really want to run a business your way without a boss or professional investor hovering over you, then start small, fund it yourself or through friends and family, and grow it organically. Banks and investors will expect a proven business model and some traction, so be realistic.

  6. What is your sustainable competitive advantage? Working harder for less margin is not sustainable. A thriving business requires value-creating products, processes, and services that cannot be matched by competitors now, with a plan to maintain that position. It’s no fun for me to mentor business owners who are suffering continuously.

  7. Are you working alone or with an experienced team? Many aspiring business owners prefer to work alone, and avoid the problems of partners, investors, and large teams. There are business models for these, including consulting and freelancing, which can simplify your life, and limit your risk, but also have limited growth and upside potential.

Thus you see there are new business types and approaches for every personal motivation and lifestyle expectation. In any case, don’t expect the work to be automatically easier or more satisfying that a corporate job. Success in any business requires a serious commitment, and learning from setbacks. Switching business models is not a shortcut to success and happiness.

I often recommend to aspiring business owners that they first take a job with another business in the same realm as the one they envision, to get some practical insight into the challenges, make contacts, and learn more about their own motivations. Then take the big step of starting your own business, with fewer surprises, some good connections and likely more accumulated savings.

Overall, it is important to remember that happiness breeds success more often than success breeds happiness. Every aspiring business owner should play to their strengths and interests, rather than listen to well-meaning advice from friends and experts. For long-term satisfaction, make sure you are driving your business, rather than letting the business drive you.

Marty Zwilling

*** First published on on 04/11/2018 ***



Monday, April 23, 2018

The Peter Principle Can Kill Your Business And Career

emoji-Peter-PrincipleAs a former IBM executive, I used to think that big-company executives would be ideally skilled and experienced in business to run a small company or a startup. Yet that rarely happens, and when it does, like John Sculley moving from Pepsi to Apple, the results don’t turn out so positive. I see this as a variation on the “Peter Principle,” as well as considerably different skills required.

Back in 1968, Dr. Laurence J. Peter first published evidence that promotion strategies in most companies are based on performance at the current task, with the result over time putting people in new tasks over their head. Even worse, top performers are moved to management positions, which are often not their forte or interest, but have higher salaries and more career prestige.

Once topped-out and frustrated in a big company, many of these people seek key positions in a new business or startup where they can again be top dog and feel in control. Even though their resume may look great, I continue to advise small businesses to fill every team position based only on demonstrated current results, motivation, commitment, and not based on any past title.

This is easier said than done, especially in new ventures where the founder is personally inexperienced in hiring and managing employees. Thus based on my considerable experience in both domains, I offer my recommendations on what to look for and how to select people with minimize exposure to the devastating effects of the Peter Principle, past and present:

  1. Favor people who can both communicate and perform well. Small businesses can’t afford two or more people for every task -- one to do work, and others to communicate results to all constituents. As the founder, you won’t have a finance chief, a marketing staff or a requirements manager. Everyone must know how to listen, talk and write.

  2. Put a premium on customer-facing and relationship building. In a big company, you often need highly-skilled specialists, doing accounting, research and design, or quality support. These people can excel without ever selling or knowing a real customer. In a small business, everybody is in sales, and the customer is always the main focus.

  3. Prioritize current skills and a demonstrated ability to learn. People who haven’t changed in a while find it harder and harder to do so. If you don’t hear an enthusiasm for new challenges, you won’t find the flexibility you need to anticipate and create the pivots required for success. People trapped by the Peter Principle won’t be happy fixing chaos.

  4. Keep the focus on results - don’t hire or reward for effort. A common refrain I hear from team members in over their heads is how many hours they work and how busy they are. If you hear that in the interview process, change the subject to results, and then move on quickly to the next candidate. Set your metrics and rewards to map to results.

  5. Promote an “up or out” growth culture to prevent role stagnation. Look for team members that see every job as a step, rather than a destination, as the company grows. Make it clear through words and actions that you expect upward growth, and no-growth is a failure for both of you. The alternative is to lose your best people to new ventures.

  6. Look for an ability to manage people, as well as do the work. Some people are great workers, but are barely able to manage themselves. The best are comfortable in both roles, and approach every task from both perspectives. Many big company executives rely on their staff to do the real work. This doesn’t work in a small and growing business.

  7. Provide mentoring and self-learning opportunities. Most small businesses don’t have the time or resources to send team members to formal training classes, either in-house or off-site. Yet every new team member can be assigned an in-house mentor, provided with online seminar opportunities and given special assignments to facilitate new learning.

Another difficult challenge for new entrepreneurs and small business owners is being able to deal immediately with the Peter Principle in current team members, once they see it or recognize a hiring or promotion mistake. It’s as hard as every other pivot you will have to make as a new business, with the same penalty that the longer you wait, the higher the cost of recovery.

If you as the leader don’t deal quickly with incompetent people in key team positions, they will paralyze your business. The best people see the problem and beat a path to the exit, to take new outside opportunities, and only the ineffective ones will remain. That will make you the final proof of the Peter Principle.

Marty Zwilling

*** First published on on 04/09/2018 ***



Monday, April 16, 2018

How To Make Your Business Exit Planned And Positive

business-exit-strategyBelieve it or not, it pays to think about your exit strategy before you start a business, just like buying a house. Is it an investment, do you want to flip it, or do you plan to live there forever? For entrepreneurs seeking investors like me, it’s especially critical, since investors want to see an exit event plan, like going public or acquisition, to get a return and their money out for that investment.

In fact, every element of your company and your personal strategy should be tuned to that exit (or lifetime commitment). Your team, your customers, and certainly your investors, will be listening for a consistent message and will respond accordingly. Here are the key points I recommend as an advisor to business owners relative to their exit strategy:

  1. Focus first on your personal strengths and interests. Running a startup is quite different from running a mature company. Most entrepreneurs don’t relish the thought of managing repeatable processes, greedy stockholders, and endless regulation reports. Yet they often fall into these roles by not grooming a partner or planning for acquisition.

  2. Establish a personal goals roadmap and desired legacy. Exiting any business need not the end, and may be the beginning of something even better, like Bill Gates philanthropy, or your next plan to change the world. For many entrepreneurs, the real joy is the next startup challenge, or the potential to help other entrepreneurs as an investor.

  3. Seek relationships early with the right people for your exit. The best business people make things flow smoothly from one stage to the next. They don’t wait for a distress situation in the business or your personal life, and hope that the ideal people magically appear to facilitate your ideal solution. Start now with a mentor and business advisors.

  4. Set metrics to track progress toward the desired exit. If your intent is to be acquired or go public, you need to show consistent and dramatic growth, as well as opportunity. If your legacy objective is long-term social impact, progress may well be measured by a totally different metric, such as positive impact on climate change or world hunger.

  5. Build the business team to complement your direction. Make strategic team hires and organizational decisions consistent with your personal exit objectives. For example, if your intent is to go public, it makes sense to bring in executives early who are known and respected by the investment community who are key to making this happen.

  6. Maintain a convincing story with a supporting data. Well ahead of any planned move, you need to assemble hard data to and a presentation to support your historical performance and exit strategy. If it’s a sale or IPO, your valuation depends on the credibility of this effort. Budget time away from running your business for this effort.

  7. Manage the customer base and profitability for evidence. Some unicorns, such as Uber and Airbnb, achieved their goal with a focus on growing the customer base, versus profitability, to increase their valuation and attractiveness to important players. Whichever you choose, you need to manage customer and valued-supplier reaction to any change.

  8. Track the market and your industry and retain flexibility. Some business owners shy away from creating an exit strategy because they believe that once their plan is developed, it’s written in stone. In fact, smart ones always have a Plan B, and monitor market and financial appetite shifts, as well as the potential for personal interest changes.

Despite the common business sense of these recommendations, according to data from a recent UBS Investor Watch and other experts, 50 to 80 percent of business owners today still don’t have any formal exit strategy. That means they may well be executing the wrong strategy for their own happiness, or are candidates to be pushed out of their own business on terms they don’t like.

Contrary to the popular belief that working on your exit strategy is negative thinking, I find no downside to efforts in this direction. Thus if you are like most business owners, who look forward to a life of pride and profit even after their current effort, it’s time to take some steps to make the transition and ultimate legacy more than a wistful dream.

Marty Zwilling

*** First published on on 04/03/2018 ***



Wednesday, April 11, 2018

7 Modern Ideas That Will Make Your Website A Winner

winning-web-designYou can’t make any business work if your customers can’t find you, or don’t even know what you offer. Thus I was surprised to read recently that 30 percent of small businesses don’t even have a web site. As an advisor to new entrepreneurs, I’m also surprised at how many potential business owners tell me that they don’t know where to start in putting together an effective web presence.

You don’t have to be a Google expert to find a wealth of basic website creation tools, and many are free, or available for a low cost. Of course, there are also dozens of experts out there who are anxious to do the work for you, for a more formidable price. The real challenge, in all cases, is not basic site creation, but content that sets you apart from the crowd of potential competitors.

I can speak from experience that content makes all the difference. Here are some modern approaches that have worked for me, and for many other small businesses I know that continually stay ahead of the crowd:

  1. Add a blog to highlight your product or service expertise. You don’t have to be a trained writer to add case studies, personal experiences and recommendations, to make your offering stand out over the marketing hype on other sites. In addition, blogs provide real “Google juice” through inbound links, updated content, and mobile access.

  2. Link to or create relevant industry forums and participate. A forum is a two-way user discussion on the subject of your business. Your hosting or visible contribution adds authority, content, and traffic to your website and your business. Plus, owning such a forum can give you a valuable and highly targeted contact list of potential customers.

  3. For example, Dharmesh Shah, one of the co-founders of Hubspot, created and manages the popular LinkedIn discussion group, On Startups. This activity gives tremendous credibility and links to his website as well as himself.

  4. Define your website as the hub of your social media reach. Many businesses now have multiple social media accounts, including Facebook, Instagram, YouTube, and Twitter. But finding your various accounts is often a haphazard and frustrating effort for interested visitors. Make your website the coordination point for both you and them.

  5. Keep site visitors updated by posting eNewsletters. A newsletter is nothing more than a regular activity and change summary, usually monthly, via website and email that help with customer retention, and remind your customers that you are the expert in your industry. Through your website, you can also supplement text with video and audio.

  6. Escalate the engagement with customer contests. Websites are ideal vehicles to deliver creative contests and entice new prospect traffic. People love to submit stories, vote on entries, and receive the recognition of even small prizes or product rewards. These contests should be extended and connected through your social media.

  7. For example, if you run a photography services website, you could offer prizes and publicity for the best pet photograph submitted in the next week. Readers would win by getting visibility for their favorite pet, and your site would win thanks to the traffic and new customers.

  8. Supplement text content with video and audio. Simple videos, less than five minutes in length, are ideal for today’s “show and tell” customer mentality and short attention spans. You can do these yourself and upload to YouTube for display on your website. Keep the atmosphere relaxed and fun, to increase traffic, and maybe even go viral.

  9. Add creative elements, such as widgets and badges. A widget is a mini-app that displays or updates data on the web to share something of value and interest, such as your daily special deal or a promotional opportunity. A badge is a simple graphic designed for fun, to show support, or promote certain standards online. Both of them highlight you, and extend your reach to other sites.

There are many more items of effective content that could be on this list. But don’t let the number overwhelm you. You don’t need to tackle them all – just pick a few that you think you can do well, and consistently. The key is new and relevant content on a regular basis to attract the attention of search engines and new customers. Don’t be in stealth mode or invisible to your customers.

Marty Zwilling

*** First published on on 03/28/2018 ***



Friday, April 6, 2018

7 Tips Learned On The Street About Running A Business

street-smart-woman-in-businessBeing “street smart,” or able to anticipate and deal with daily business problems and surprises, is generally recognized as a critical skill to have for business owners and entrepreneurs. Most investors say they can recognize this capability when they see it, but it’s hard to define if you haven’t been there. They say you can’t have street smarts if you have never lived in the streets.

Some people argue that you can only be born with street smarts, but I see these as more of a function of experience. In many cases, they come from lessons learned from prior failures (and successes), but I believe the most productive street smarts are the result of personal disciplines, which can be learned and practiced by any business person. These include the following:

  1. Keep the emphasis on working smart, rather than working hard. This means using every resource to get smart on relevant issues before you start a business. Find out everything you can about the domain you are targeting, preferably by taking a job there to lean the unwritten rules before you try to compete with your own business.

  2. For example, we probably all know people who have started restaurants because they like to cook, but with absolutely no experience in the restaurant business. No matter how hard they work, most of these fail, not because of their food, but for a lack of marketing, or service, or lack of cash flow management.

  3. Every conversation is a business communication or negotiation. Don’t fool yourself into thinking that everyone has to be your friend, or wants to be. You can work hard on friendly chatter, but results come from sending and receiving real information from the right people at the right time. Use preparation, practice, delivery, and ask for the order.

  4. Surround yourself with people who can help, not just be helpers. We all have strengths and weaknesses, and the best business people understand their own. You must find partners and build a team of people smarter than you are in key areas, to complement your strengths. Look for a match in values, work ethic, and chemistry.

    It takes discipline to recognize your needs ahead of time, carve out the time to do the recruiting job right, and resist the temptation to hire inexpensive interns, or unqualified family members. Assuming or hoping that new team members can “learn on the job” and will free up your valuable time, without making mistakes, is not being street smart.

  5. Spend time working on the business as well as in the business. It takes discipline to focus on constantly improving processes and looking ahead for new customers, as well as looking behind for competitors sneaking up on you. As Andy Grove of Intel once said, “Only the paranoid survive.” If your business isn’t evolving and growing, you are failing.

  6. Manage your work, health, and work-life balance. It’s hard for a business to be healthy if the leader isn’t healthy. Street smart business leaders recognize that they need down time and non-work activities to stay balanced. They learn and practice time management disciplines. Banish procrastination. Be decisive. Have some fun.

  7. I have personally worked for two startups where the CEOs was so passionate and dedicated to the business that they were at work twenty hours a day, trying to make every decision, and destroyed their health or family relationships. These individuals had no fun, were not successful, and would never be considered street smart by investors.

  8. Manage your business cash flow personally every day.  The most street smart business people manage cash flow relentlessly and never delegate decisions about spending money. A big influx of orders may feel like success, but can kill your business if you don’t have the cash at the right time to produce, deliver and wait for payment.

  9. Be the visible role model for urgency vs emergency. Street smart business leaders are not easily distracted by putting out fires in the business while they are working on the business. The best display a calm but visible urgency for scaling the business, and designing the next product generation. They know their team culture mirrors the leader.

Overall, street smarts requires that you put all these things together for problem solving, and dodge and weave effectively through the risky business streets. It means balancing your idealistic vision of how things could be, against the realities of the business world. The alternative is a long and painful learning curve, which neither you nor your investors can afford.

Marty Zwilling

*** First published on on 03/20/2018 ***



Monday, April 2, 2018

10 Leadership Blind Spots That Stunt Business Growth

blindfolded-businessWe all have blind spots – things you don’t see despite your best intentions to observe the world changing around you. In business, these can quickly take you off the growth track, even as you work harder and harder. In my role as startup and small business advisor, it’s my job to help you see more clearly, and keep ahead of the curve. I’ve been there myself, so I have felt the pain.

The list of common blind spots is a long one, so I was surprised to see many I recognized in a new book, “The Road to Excellence,” by David Mattson. As CEO of the largest business training organization in the world, he is well-positioned to not only see the blind spots, but also provide some real guidance on how to avoid them. Here is my priority list of key ones to avoid:

  1. Not sharing your vision with those tasked with implementing it. Especially in small organizations, it’s easy for you to assume that everyone had heard and understands the business direction and goals. A while back, I was embarrassed to get some feedback from my own small organization on “why doesn’t anyone ever tell us the priorities here?”

  2. Not tying employee personal goals to business goals. Human beings always have been and always will be driven to improve their own personal situation ahead of improving your business. If you own the business, your business goals are personal. For team members, it’s your challenge to map these goals to each individual on your team.

  3. Allowing coaching to degenerate into fixing their problems. Coaching is the art and science of helping team members learn how to fix their own challenges, rather than you being critical or just jumping in to do the job. If you are not spending between 35 and 40 percent of your time coaching, your team and your business are unlikely to grow.

  4. Not building and modelling a culture of accountability. Too many entrepreneurs I know feel they have to know all the answers, and are quick with excuses for problems. It takes courage to show culpability, and always be accountable for whatever happens. Your team will respond to your actions – take the lead on being always accountable.

  5. Allowing hiring to slip to the bottom of your priority list. The acquisition of talent must be a continuous and structured process. I have often been too busy with daily crises to even think about a looming need in the organization. When that need is the crisis, it’s easy to use gut feel for a quick close. Bad hires are a huge cost to any organization.

  6. Not capturing and institutionalizing best practices. When your business is growing, you must document what works and what top performers do to stay ahead. Otherwise, that “tribal knowledge” walks out the door when key employees move on, and new team members have to continually re-invent the wheel. Relearning does not scale well.

  7. Not focusing on lead generation and prospecting. Another common blind spot I see in most business owners is that they focus on the wrong end of the funnel – lagging indicators like closing sales. That initial growth surge of a new startup quickly dries up, and the focus must be on widening the funnel, new marketing, and new channels.

  8. Allowing methodologies and systems to stagnate. Leaders need to be sure there is a process in place for everyone, and find a way to confirm that these processes are up-to-date. Again the key is to be proactive, asking each team to come to you once a quarter with recommendations for systems improvements, new metrics, and new tools required.

  9. Not initiating organizational changes proactively. Organizational changes must happen in every business to facilitate growth, and adapt to a changing market. Yet, in my experience, most organizational changes don’t happen until there is a crisis. Don’t allow this blind spot to develop – schedule reviews regularly and proactively plan for changes.

  10. Not creating a good onboarding experience for new hires. In the throes of growth, I most often see the “hire and forget” school of onboarding for new team members. New hires need training, clear examples of excellence, coaching, and measurable targets during those first critical weeks on the job. A “self-starter” culture is not a growth culture.

In my experience, blind spots are the symptoms of an impending downward spiral for your business. If you can relate to more than a couple of these blind spots, you need to do something today, or your long-term survival as a business is in jeopardy. The road to excellence is not the path of least resistance. It starts with planning and a commitment to continuous improvement.

Marty Zwilling

*** First published on on 03/19/2018 ***