Monday, July 30, 2018

7 Steps To Meeting The New Bar Of Delighted Customers

Delighted customerHaving satisfied customers is no longer enough to keep you ahead of competitors. The bar has been raised to having “delighted” customers. Customer delight is defined as surprising the customer by exceeding his or her expectations, thus creating a positive emotional reaction. This emotional reaction leads to word of mouth and social media, resulting in many new customers.

For example, during the last holiday season Mercedes Benz USA launched a #MBSecretSanta program on Twitter to personally engage customers and help find the perfect holiday gift. Then they did just that by providing responders with over 1000 gifts, ranging from branded bears, baby clothes, watches, and Bluetooth speakers. It was a small price to pay for the surge of delight.

TD Bank used a similar #TDTHANKSYOU campaign to delight customers with thank you gifts ranging from Disneyland tickets for a single mom, roses for the elderly, and airline tickets for a mother who wanted to visit her sick daughter. With today’s instant communication and the Internet, these efforts were soon known around the world. The value of such viral efforts is huge.

Thinking this way, and then making it happen, requires some strong leadership and lots of effort in existing business, to overcome the long-standing processes and procedures. For entrepreneurs and startups, it can be a bit easier, but still requires resources and risk. In either case, I recommend seven specific steps to set up the right culture, and keep it going:

  1. The priority on delighting customers must be visible at the top. By default, the perceived and most visible focus of most executives is to delight stakeholders first. Perceptions are set by your actions, what you measure, and what you reward. Make sure your actions are based on customer experiences, rather than only internal objectives.

  2. Relate all compensation criteria to customer experience levels. Due to pervasive communication in the marketplace, customers see and react to your compensation and recognition practices. They have negative emotional and viral reactions to people getting bonuses and raises, despite visible product and customer support shortcomings.

  3. Develop programs to exceed current role model leaders. Your competition is global, so look for best-of-breed globally, and apply it locally. Solicit creative thinking and continuous innovation to keep you ahead of the game today, rather than tomorrow. Look beyond industry boundaries for customer delight examples that you can adapt and adopt.

  4. Hire based on people engagement ability, not just skills. If you want excited customers, hire friendly people who love to work with and help others. Resumes and traditional HR processes tend to focus totally on skills and experience. Group interviews are more likely to expose motivation, attitude, and people relationship and learning ability.

  5. Get buy-in from the team on why, and let the team show you how. Your objective should be for every team member to look for opportunities to exceed customer expectations, not just meet them. Those on the front lines will know the best ways to excite customers, and will be more highly motivated if you inspire them take key actions.

  6. Give key employees the freedom to practice delighting customers. Requiring escalation for every exception, or providing scripts and fixed policies, won’t do it. Ensure you have formal mechanisms for employees to make decisions and practice customer sensitivity. Take action on feedback and provide updates to show you are listening.

  7. Highlight your company examples of exceeded customer expectations. Stories and anecdotes illustrate your message and evoke emotions in a way that even the best facts and figures can’t, both for team members and potential new customers. They improve customer retention and loyalty, as well as improving internal morale and engagement.

A culture of delighting customers doesn’t happen by chance, and it requires more than just good training and excellent operational procedures. Surprising and delighting customers requires a backdrop of strong leadership, deliberate planning, and integrity in execution. It requires a customer-first rather than company-first culture at all levels. Is your organization there yet?

Marty Zwilling

*** First published on CayenneConsulting on 07/17/2018 ***

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Sunday, July 29, 2018

7 Attributes Of Many Exceptional New Venture Founders

Jeff_Bezos_at_Amazon_Spheres_Grand_Opening_in_SeattleIn my years of working with entrepreneurs, I have heard many times the promise that their new idea will create the next Amazon or Apple, but I rarely hear the more important promise that the founder will practice all the good habits of winning entrepreneurs like Jeff Bezos and Steve Jobs. You see, I’m convinced that the entrepreneur makes the company, not the other way around.

This seemingly radical concept of people making all the difference in business has been around for a long time, perhaps most visibly in the classic book “The 7 Habits of Highly Effective People,” first published by Stephen R. Covey over 25 years ago. Yet I still see most of the focus in the startup community on creating the best technology and process, rather than practicing the most effective habits.

In that context, I’d like to restate and amplify in business terms the top attributes that I believe every entrepreneur should aspire and commit to, consistent with the seven most effective habits detailed by Covey many years ago:

  1. Be proactive and take the initiative. Being proactive in a new business means starting with a vision of how to do things better, rather than following someone else’s success model. We have enough social network startups. Enlarge your circle of influence, and manage risk as an opportunity, not a negative. Keep commitments, with no excuses.

  2. Make personal life goals drive the business. Begin with the end in mind - your definition of success based on your principles. You won’t be effective centering your life around someone else’s view of success, satisfaction, and happiness. Make sure you have a personal mission statement before you try to define one for your new business.

  3. Willing to work on the business as well as in the business. Many entrepreneurs, especially technologists, relish building the product, and assume the business will build itself. Effective entrepreneurs always put first things first, expect needs to change, and manage with discipline. That means knowing when to delegate, enlist help, and say no.

  4. Strive for win-win relationships and agreements. Successful startups are more about stakeholder win-win relationships than win-lose with competitors and vendors. In the same way, win-win performance agreements make for effective team members, partners, and investors. Win-win puts the responsibility on the entrepreneur to deliver results.

  5. Seek first to understand, then be understood. Communication is one of the most important skills in business. With today’s interactive social media, there is no reason to assume that you know what customers want, or they know what you have. Collect their view and communicate. Don’t be an entrepreneur with a solution looking for a problem.

  6. Build synergistic business relationships. Valuing the differences is the essence of synergy – the physical, mental, and emotional differences that might be used as stepping stones to new business and win-win opportunities. Different points of view, even healthy conflict, is the key to innovative solutions and timely required change.

  7. Practice continuous learning and self-renewal. Renewal is the principle and the process that empowers entrepreneurs to move through an upward spiral of growth, change, and continuous improvement. This is often called sharpening the saw. It facilitates learning, committing, and doing business on an increasingly higher plane.

For many entrepreneurs adopting these habits is a paradigm shift, as challenging as the one from technologist to business professional, but it can be done and has been done by every successful entrepreneur. In addition, the power of a paradigm shift is that it opens up a new level of thinking, and a new level of power. It’s a great new asset, often more important than new funding.

Remember that investors continue to see thousands of e-commerce and computer startups, but only a few new entrepreneurs like Jeff Bezos and Steve Jobs. If you already have the effective habits I have outlined here, make those part of the story you lead with. If you don’t have them yet, now is the time to start.

Marty Zwilling

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Friday, July 27, 2018

Why Pitching Your Product Is Not Enough For Investors

Pitch-Houston-by-TendenciAs an occasional angel investor, I always ask for a business pitch to get me in the mood. I’m still amazed at how many technical entrepreneurs don’t have a business pitch, and offer me their product pitch or product spec instead. I’m a technologist, so I always love to learn about the product, but every investor needs to make sure you have a business, as well as a product.

As a technology buff, I’m all too sensitive to the common investor complaint that technical people often end up selling yet another “solution looking for a problem,” because they are so impressed with their technology. Unfortunately, customers look for value in solving their problem, and new technologies alone scare them, so these solutions don’t get bought by customers, or funded.

In reality, there isn’t much overlap between the business pitch I expect, versus a product pitch. Certainly a slide or two needs to carry over describing the product and features at a high level. Beyond that, the why and how of the business are more important to investors than the what. Attracting business investors is as tough as attracting customers, but it’s a different challenge.

Investors are looking for motivation to buy a chunk of the business, not the product. Thus using product features to attract investors won’t work. Here are the unique business elements that I expect to hear as a potential investor:

  1. Target market size and growth projections. Most investors won’t be interested unless you can show them a large market (billion-dollar opportunity), with a double-digit growth rate. This implies high odds of a scalable business, simply needing an investment to lead to success. Of course, you wouldn’t include this data in your customer product pitch.

  2. Business model showing costs, pricing, and margins. Potential investors love to see gross margins in the fifty percent range or greater, with recurring revenue through subscriptions, follow-on sales, or services. Online and ecommerce businesses are especially attractive here, since they are instantly worldwide and not people-intensive.

  3. Team skills depth, domain experience, and track record. In my experience, the team’s credentials are more important to the business than product features. Customers may be attracted to product features, but investors look harder at the team (bet on the jockey, rather than the horse). Solo entrepreneurs have a hard time finding an investor.

  4. Intellectual property and sustainable competitive advantage. Patents, trade secrets, and trademarks are very attractive to investors, since these are not easily overcome by competitors. Your solution may include leading technology, but if available to competitors, the lead won’t last. “First to market” is not sustainable with normal startup resources.

  5. Customized marketing strategy and realistic sales plans. “If we build it, they will come” and “word of mouth” are not credible marketing strategies these days. I would expect to see specific plans for distribution, partnerships, and sales channels, as well as the use of social media and conventional marketing, with budgets for the major elements.

  6. Five-year financial projections of revenue and expenses. Of course, investors want to see a positive return on their investment, with timeframes and growth expectations. These are not meant to be an accuracy test, but a check on your commitment level, understanding of business norms, and an assessment of company valuation over time.

  7. Specific investment size request, and equity offered. Every investor pitch must include the size of the desired investment, followed by the percentage of equity offered, thus supporting a realistic valuation today. Equally important is a projected use of these funds in scaling the business, including time frames for future investment requirements.

  8. Discussion of likely liquidity events and exit strategy. Since startup stock has little market value for several years until the company goes public (IPO) or is purchased (M&A), investors want to hear your strategy for offering them a good return on their investment. Examples of similar events in your industry are especially helpful.

Creating a great investor pitch is probably more difficult for technical entrepreneurs than creating a great product pitch. But it’s critical to have one. Just as a great business can’t exist without a product, a great product won’t survive without a business to sell it. It’s up to you as an entrepreneur to create both, with the ability to pitch either one, to the right people.

Marty Zwilling

*** First published on Inc.com on 07/11/2018 ***

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Wednesday, July 25, 2018

7 Keys To Making People First And Winning In Business

Google-happy-employeesJust as national cultures influence and shape a country, so does the startup culture set by founder strategy drive the future of a new venture. In top current companies, such as Google, Apple, and Netflix, cultural strategies that include greater employee freedom and fostering creativity are the norm. I believe this new focus on culture is a key to startup success today.

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

Most startups are created by one or two entrepreneurial founders, with a vision and focus on developing an innovative solution, rather than on developing people. They are so immersed in their mission and their own ideas, that they find it hard to change their focus to nurturing new employees, and making sure the people have the same passion and motivation for the solution.

In fact, most see a more direct relationship between customers and their business success, so employee focus by default will end up in third place. Once this product-first, customer-second, and employee-last culture is set, it is extremely hard to change. Thus, in my advisory role to new businesses, I recommend a seven-step approach for setting the right culture from the start:

  1. Communicate clear direction and values daily from the top. Employees need to see and understand the “why,” before they can buy in to what they need to do. These days, more than ever, the “why” needs to be a win-win for them, and for the greater community as a whole. Only then can they stay motivated and make the decisions you need to win.

  2. Clearly define individual roles, and what you expect of them. Every team member needs to understand and be rewarded for the desired attributes, competencies, and results you need. It’s easy to see how cultures go astray, for example, when you pay only for sales volume, but expect a high focus on customer satisfaction.

  3. Provide an inviting and appropriate work environment. Place shapes culture. Open architecture is more conducive to certain desired office behaviors, like collaboration and easy communication. Even geography counts – there is a reason that tech firms cluster in Silicon Valley and financial firms cluster in London and New York.

  4. Establish metrics on the culture, as well as the product. Healthy cultures have high morale, as well as low turnover, high rates of retention, and attract top talent. These can be easily measured, and compared to winners in the marketplace. These metrics need the same top management attention as customer retention and sales metrics.

  5. Recruit, mentor, and promote talent to highlight opportunity. It’s tempting as a startup to grab family members, or pay less and get inexperience. It’s also easy to skip the personnel focus in the heat of daily product and customer crises. Yet, in the long run, your people are your business. Make sure they get your first priority and attention always.

  6. Highlight small successes rather than failures to set culture. The more intermediate successes you can attribute to team members, which confirm your direction and values, the more quickly people will relate to this culture as permanent, pervasive, and personal. Your goal is to have the team internalize and become advocates for your big picture.

  7. Solidity team member trust by admitting your own mistakes. Practice humility and openness by being transparent about your own weaknesses and mistakes. Don’t hide the need for pivots, or required quality corrections. If you want your team members to display certain behaviors, you need to display them first. Leaders must walk their talk to get trust.

Even if your business is not in the startup stage, these steps will move you in the right direction, in assessing your culture and improving it. If you aren’t at least keep pace with a strong culture and finding a way to differentiate yourself, you’re already falling behind competition. In any case, building and maintaining a winning culture is not a one-time effort or a sprint, but a marathon. Start today.

Marty Zwilling

*** First published on CayenneConsulting on 07/10/2018 ***

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Monday, July 23, 2018

4 Steps To The Support You Need To Save Your Business

The-Dollar-Finance-Cash-Business-CurrencyMany entrepreneurs and small businesses I know are struggling with business-threatening issues, but are reluctant to seek any assistance. Some assume that the help will be too expensive or doesn’t exist, but I find that others are just horribly uncomfortable asking for any kind of help. This results in personal and business failures that could have been easily prevented.

The fact is that none of us can go it alone in business. We all need people to support us, pick up our slack, and go to bat for us. I have found in business that other people are much more likely to help us than we realize, often for free or a later non-specific payback. Most people get a tremendous satisfaction from helping others, but are equally afraid to offer without being asked.

I’ve never really understood this conundrum, so I was happy to see a new book, “Reinforcements: How to Get People to Help You,” by the well renowned social psychologist, Heidi Grant. She explains the reasons and research behind why we hate asking for help, suggests the right ways to ask for assistance, and confirms that understanding the impact of efforts is critical to success.

I will paraphrase here the steps she recommends, using my own experience as a business advisor to set the context and examples:

  1. The advisor needs to know that you might need help. The best way to do this in business is to proactively ask someone to be your mentor. The most successful business executives build one or more two-way mentoring relationships with peers. For example, Bill Gates has a long-standing mentor relationship with Warren Buffett. Mark Zuckerberg openly acknowledges that he was mentored in the early days by Steve Jobs.

    In my experience as a startup investor, I’ve always been more impressed with founders who admit early that they need my guidance (as well as my money), rather than others whose ego or fears prevent them from ever admitting that might need some help.

  2. The advisor needs to see your requests as sincere. No advisor or mentor is a mind reader, and most don’t want to impose. Thus, if you don’t ask, you probably won’t get any help. The most common signal that guidance is desired is to establish an Advisory Board that meets regularly, which you support with regular reports and open communication.

    I hasten to add that asking for help should never be a request that someone else do your job for you, or provide you excuses for failure. Asking for advisor help also implies that you do your homework first, so that advisors will feel that their time is not being wasted on issues that have obvious answers or trivial implications.

  3. The advisor needs to take responsibility for contributing. As in any relationship, you need to do the due diligence to make sure the advisor or mentor is really committed to you. Some investors, for example, may have their own agenda for your business that is not in your best interests. It’s always smart to check their previous track record early.

    It’s typically well worthwhile to offer financial compensation, or a small equity ownership, to advisors in exchange for a written agreement on the “what” and “how” of their expected contribution. If appropriate, a reciprocal agreement between two equals, such as Gates and Buffett, may cement the understanding of expectations and responsibility.

  4. The advisor needs to be able to provide the help you need. The ability required should cover experience required, as well as access and time commitments. Often times, people in business want to help, but just don’t have the time to spare. Another problem that I have encountered is that smart people are not always able to relate to newcomers.

On the other side, you need to make sure your requests are reasonable, and you are open to receiving advice that is different from what you expected. If you are not willing to actively listen, and quickly become emotional and defensive, most advisors will not be able to break through your defenses and really help you.

In all cases, when you ask for someone’s help, make sure you emphasize what the impact will be. And of course, don’t forget to thank them for their guidance, and let them know the results of their efforts. Every advisor needs to know that their help is appreciated, and they have made a difference. Otherwise they lose motivation. We all need reinforcements and support in business.

Marty Zwilling

*** First published on Inc.com on 07/09/2018 ***

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Friday, July 20, 2018

How Some Ventures Continually Stay Ahead Of The Crowd

blockbuster-closingAs a business advisor, I have long been surprised by the large number of industry stalwarts, including Blockbuster, Kodak, and General Motors, that have been dealt major setbacks, or even total failure, by upstart young companies, with a fraction of the resources or industry experience. The stalwarts should be making the big leaps to be competitive, rather than the other way around.

In fact, almost 90 percent of the Fortune 500 firms that existed in 1955 are gone. Conventional wisdom is that mature companies are their own worst enemies, too blinded by their success to see the world changing around them, and too focused on repeatability to see the need for innovation and leapfrog advances in technology.

Based on my experience as an executive in a couple of large companies, including IBM and First Data, I second the principles for keeping up with competition and change outlined in a new book, “Leap: How to Thrive in a World Where Everything Can Be Copied,” by Howard Yu. He speaks from years of experience as director of an advanced management program for global executives.

Let me paraphrase a few key points that he and I both agree are critical:

  1. Understand your firm’s foundational knowledge and trajectory. Many large companies, and even startups, often forget their core competencies and direction in an effort to grow their business and customer base faster. The results in a dilution of their focus, doing many things poorly, and losing sight of key markets and key competitors.

    For example, Kodak invested billions of dollars into technology for mobile phones and other digital devices, but didn’t recognize the impact of digital cameras on their core film business. The result was that they reacted too late to recover, and were overrun by competitors as the market and technology rapidly changed.

  2. Acquire and cultivate new knowledge disciplines. Competitive advantage depends most critically on the assimilation of new knowledge and the timely creation of new markets and new businesses. The role of managerial choices cannot be overstated here. True leaders have to be willing to take calculated risks, rather than taking safe positions.

    Procter & Gamble, for instance, has maintained its leading position in household consumer goods by leaping toward new knowledge disciplines, versus merely refining existing products. They made big bets on IVORY soap earlier when they predicted candle revenues falling, and push the limits today with environmentally sustainable products.

  3. Leverage seismic shifts in the market or economy. Although important variances exist between industries, certain seismic shifts to the global economy will be felt by everyone regardless of who you are and where you live. Today it is the inexorable rise of intelligent machines, the emergence of ubiquitous connectivity, and digital convenience.

    Every potential winner must leverage these seismic shifts around them and leap accordingly. Whether you are a technology creator, traditional manufacturer, startup entrepreneur, or nonprofit organization, you must identify those forces that matter the most in the coming decades and reconfigure your competencies ahead of competitors.

  4. Experiment to gain evidence about unknown unknowns. Bold decisions always look good – until they are proved wrong. To make evidence-based decisions, leaders must carry out frequent experimentation to arrive at conclusions with the required level of accuracy. The biggest risk in large corporations is often political infighting and inaction.

  5. Starting with top executives, dive deep into execution. Awareness is not the same as commitment, so insights alone never suffice. Thinking doesn’t equate to doing. Committed executives at the very top must be ready to intervene to implement a new directive. Only they can remove the organizational hurdles that may stand in the way.

Deep dives are different from micromanagement, because they rely on knowledge power rather than position power. Elon Musk’s deep dive into Tesla has been based on his knowledge and conviction that electric and driverless car technology is here now, rather than any market research from third parties.

Even with these principles, outperforming competition is difficult, and doing it consistently over decades as your leadership changes is nearly impossible. It certainly can’t be done unless you start today. Your customers, your local community, and your stakeholders all are depending on you and count on you to maintain momentum and success. Are you ready to take the leap?

Marty Zwilling

*** First published on Inc.com on 07/06/2018 ***

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Wednesday, July 18, 2018

7 Ways To Counter The “I’m Too Busy” Syndrome At Work

hurry-too-much-workI’m sure you know a few people at work who are always “too busy,” but never seem to get much done. For many of these, it’s an excuse to decline new work, impress others, or gain sympathy. For others, it’s a legitimate complaint, indicative of being out of control or not managing their time. If you find yourself in this category, you need to focus on techniques to improve your productivity

On software teams, for example, a detailed study published years ago shows differences as great as ten to one in productivity between comparable team members. In fact, in my own business experience, I have found that team members who proclaim to be the busiest often are the least productive, producing the fewest results. In business, for me, the only thing that counts is results.

People will tell you quickly about all the external factors lowering productivity, including toxic office environments, motivation, and personal health problems, but I believe there are positive work habits that can more than compensate for these. As I outline key ones in my coaching practice, I find that many people have never tried them and even find them counter-intuitive:

  1. Stop multitasking and focus on the task at hand. Many people think they can improve their productivity by working faster and doing multiple things concurrently. In fact, constant task switching and rushing yourself kills efficiency and leads to many errors, requiring rework. In most cases, you can increase your productivity by slowing down.

  2. Capitalize on deadlines to maintain a sense of urgency. When your time on an important task is limited by a deadline, the urgency created will overcome your urge to procrastinate. If there is no deadline, it pays to impose one on yourself. Your competitive drive for success will cause you to dive in with more energy and not be easily distracted.

  3. Limit your daily “to-do” list to the top three results due soon. Thinking in threes allows you to not be overwhelmed by a long list of activities, keep important activities on top of mind, and better manage your time. If you can check off all three by the end of the day, you will get the satisfaction of list completion, without the frustration of a growing list.

  4. Intentionally classify more of your tasks as non-critical. The natural human tendency is to treat all tasks as equally important, causing that feeling of an overwhelming workload and being “too busy.” In fact, all business tasks are not created equal, and you may find some to ignore totally. Don’t be afraid to say “no” to extraneous work requests.

  5. Apply the “minimum viable product” (MVP) strategy to results. Perfection is not really possible nor necessary in most business tasks, so I recommend the same strategy that good startups use on products, before shipping to customers. This is also called the Pareto Principle, where 80 percent of the value comes from 20 percent of the effort.

  6. Position yourself at least 20 seconds away from distractions. Distractions, such as peer questions, smart phones, and snacks are the enemy of productivity. I recommend the 20-second rule, postulated by psychologist Shawn Achor after he found evidence that only a few seconds of delay or extra distance is enough to keep most people on task.

  7. Pause regularly to rest, renew, and celebrate successes. Let go of total exhaustion as your indicator of productivity. If you pause to relax and meditate every hour or so for five minutes, and reserve enough time for sleep at night, your productivity will increase. Take the time to acknowledge feelings, celebrate accomplishments, and gain insight.

If you have people on your team who are always “so busy,” the best thing you can do to improve team productivity is to spend some time coaching them on the habits outlined here to better manage their workload and their time. Don’t forget to take a hard look at your own work habits, for opportunities to improve. The value of increased productivity to your business is self-evident

More importantly, the value to your health and your career is paramount. Life is too short to spend every day at work feeling exhausted and stressed by an overwhelming workload, or by exasperation with other team members who are always “too busy” to get their job done.

Marty Zwilling

*** First published on CayenneConsulting on 07/03/2018 ***

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Monday, July 16, 2018

8 Ways To Instill A Sense Of Purpose In Your Startup

Environment_stewardship_photoStarting a new venture and thriving in today’s economy is hard, but the best have figured out that customers and employees need to feel that you have a sense of purpose, to complement the company’s pursuit of profit. A higher purpose motivates people in a way that financial wins alone never will. For a company to thrive, it needs to find and broadcast its purpose in all that it does.

A great product or service as a solution is necessary, but not sufficient. If you want your company and team members to be seen as going above and beyond the competition, you need to include an element that adds social value or sustainability for the greater community. For example, Whole Foods is involved in efforts to safeguard the environment and ensure humane animal treatment.

Nearly 80 percent of customers say they are more loyal to purpose-driven brands than traditional brands and nearly three-quarters are more willing to defend them, or even pay a premium, according to the 2018 Cone/Porter Novelli Purpose Study. Here are eight specific steps for how you can add purpose to your company’s image and execution:

  1. Let your passion and skills define a mission you can love. Make sure you select a mission that adds shared value and provides a competitive edge, as well as playing to your strengths and interests. Assess likely industry changes and disruption over the next five years, and structure your business to lead the way with personal commitment.

  2. Become a thought leader early through social media. Today anyone with a purpose can test their message through blogging, Twitter, YouTube, Instagram, and many other channels. Every customer is looking for provocative thought leaders, such as Sir Richard Brandon and Elon Musk, who are able to challenge current issues with creative solutions.

  3. Tie marketing content to the bigger picture of the world. Companies that matter focus beyond the buy/sell transaction view of the world. They recognize and contribute to the interconnectedness of all moving parts of the market as it evolves in real life. It’s about relationships, communication, thought leadership, and social value contribution.

  4. Build a skilled team to design and develop what is needed. Your company can’t be a leader without providing a great solution, based on realistic market needs, and demonstrating an ability to execute. Building a solution and a company is not a solo exercise. Assemble the right people, and don’t forget to include real customer interaction.

  5. Incent your team to focus on the purpose rather than profit. Nothing motivates a team more than feeling that company success is a function of their personal contribution to purpose and solving customer problems. This requires hiring people for their attitude, as well as strengths, training them properly, and empowering them to make decisions.

  6. Be a leader to a positive future, rather than a follower. People want to see inspiration and commitment to a better tomorrow, as well as sources of better solutions today. This requires that you be a disruptor of the status quo, and proactively lean into complexity to align people, processes, and systems to turn current problems into new opportunities.

  7. Demonstrate daily your personal commitment to your purpose. Your team and customers watch your actions, more than they listen to what you say. Your company has to be more than an in-animate brand – it has to come alive through people, starting at the top. People that matter take a long-term view, and value the future of their customers.

  8. Seek out partner relationships aligned to your purpose. Community partners should be aligned around a purpose they all explicitly share, such as eliminating world hunger. At the same time, partners should be clear and explicit on the benefit to their own group for involvement in the partnering endeavor. This will strengthen the message for all.

If your company consistently finds ways to add more value and drive higher-order customer needs, it will become the preferred choice in your targeted markets. In addition, it will attract the best talent, the most customer loyalty, and provide greater personal satisfaction to you, as well as your team and your customers.

Even in today’s rapidly evolving economy, driven by technology, the most successful companies lead with their purpose rather than their technology. It doesn’t matter whether your business is a startup or a mature operation, the principles are the same. Start implementing these steps now, before your competitors pass you by.

Marty Zwilling

*** First published on CayenneConsulting on 06/28/2018 ***

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Sunday, July 15, 2018

8 Lessons From The Field On Building A Premier Brand

brandEvery new business dreams of becoming the premier brand in their space, like Starbucks is to coffee, and Apple is to consumer electronics, but they have no idea how difficult that is to achieve. In fact, only 100 of the 10,000 multimillion-dollar consumer companies around the world can claim to be an “apostle brand” – one that inspires enduring trust, loyalty, and endorsement.

One of the reasons it’s so tough is that the rules are constantly changing on what it takes to win over customers, as customer attitudes and cultures change, and competitors continually strive to “raise the bar” on product and support. I found some eye-opening insights in the classic book, “Rocket: Eight Lessons to Secure Infinite Growth,” by The Boston Consulting Group.

They outline the new rules for existing brands, but I believe that every entrepreneur who doesn’t yet have a brand yet should study these carefully, as paraphrased for startups below. It’s a lot harder to recover from brand missteps made early, than it is to get is right the first time, so build your brand strategy accordingly:

  1. Don’t ask your customers what they want next. The challenge of every startup is finding that balance between solving a real problem today, and giving customers the courage to make a leap forward. Existing customers can’t envision a new concept, or new behaviors. You have to excite their imagination, then show them the new world.

  2. Turn your biggest fans into apostle customers. Your first satisfied customers define your voice in the marketplace. They see your strengths, weaknesses, and opportunities. If you listen to them and respond, they will become your best apostles, delivering on average eight times their own value in new customers. That’s a winning growth trajectory.

  3. Always welcome a customer’s scorn as a gift. Even in a new startup organization, it’s easy to become convinced that a percentage of unhappy customers is normal. Instead of scorn and dismissal, a comprehensive and deliberate response is the key to brand growth and vitality. Without the feedback, no change in the demand space will be noted.

  4. People still judge a book by its cover. Consumers shop with their eyes, just like they eat with their eyes. Target all the senses all the time. Shame on you if you offer any product or service that is dull or unattractive. Steve Jobs was a master at this. Visual appearance and core values matter. Make your team as well as your customers proud.

  5. Transform your employees into passionate disciples. A highly motivated front line engages customers and tells your story with passion. They are your greatest resource for generating new apostles and a cultural advantage. The result is higher repeat purchases and sales without promotion. Loyalty in the ranks creates loyalty in the customer.

  6. Ramp up your virtual and real relationships. The digital age is making virtual relationships with customers indistinguishable from real relationships. It’s a lot easier and faster to grow virtual relationships, and they are both real for online purchases. Your startup needs to use blogs and social media to establish interactive relationships early.

  7. Take giant leaps rather than timid steps. It’s hard to really change the world with incremental advances and consolidation. Be clear and vibrant in your claims and in your deeds, or you will never get noticed in the flood of messages we have to deal with every day. Startups have the advantage in starting with a dream and no feet stuck in the past.

  8. Don’t ever assume that your brand is stable. All relationships are in a constant state of flux, so don’t assume your customer relationships will remain stable. At any moment, your brand will be lifted high or knocked down low by cultural changes or external events. It’s up to you to track the data, recognize a change early, and intervene proactively.

The overall goal of these eight new rules is to help your startup forge the tightest possible emotional connection with the most customers in the shortest amount of time. These customer advocates lead to more love, loyalty, advocacy, and the exponential growth of an enduring brand. It’s the only way to make your startup the next Starbucks.

Marty Zwilling

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Saturday, July 14, 2018

5 Tips From Those Who Thrive Doing Multiple Startups

serial-entrepreneur-elon-muskKnowing all too well how hard it is to start a single new business, I’ve always wondered how several well-known entrepreneurs, including Richard Branson and Elon Musk, have managed to successfully lead dozens of startups to success, and thrive on the process. These special people are called serial entrepreneurs, because they have figured out how to do it over and over again.

In a very real sense, they seem to succeed at everything they try, just like the rest of us wish we could. I learned a lot about the mindset and actions required from a classic book, “Serial Winner: 5 Actions to Create Your Cycle of Success,” by Larry Weidel, a serial winner in the financial services business world over a forty-year career, while helping other people do the same.

Although Weidel’s focus is more generic, I believe his five principles and actions are extremely relevant and can be more specifically targeted to aspiring entrepreneurs as follows:

  1. Make a decision, any decision, and move on. For entrepreneurs starting a new business, the world is fraught with risk and there are no sure bets. Yet making no decision means you never start, or you quickly lose. Serial entrepreneurs embrace the risk, gather the relevant facts, and move forward. You have to move forward to win.

  2. Don’t just build a business, change the world. Every great startup begins with a vision that is much larger than just making a profit. Serial entrepreneurs understand that the business culture today rewards going beyond profit, to helping people and the planet. They set big goals, challenge limits, and have a mindset to exceed every one.

  3. Be prepared for many pivots, but never quit. Winning in business requires surviving many setbacks. Many experts believe that the single biggest cause of startup failure is that the entrepreneur simply quits too soon. Serial entrepreneurs take every setback as a positive lesson learned, alter their course accordingly, and charge ahead again to win.

  4. Trying is not enough, you have to deliver. Serial entrepreneurs focus on surpassing every objective, and they don’t even think about excuses, like economic downturns, culture changes, and running out of money. They have the mental toughness to keep their head down and charging until they have achieved one hundred percent of the goal.

  5. Each success incents a dozen greater ideas. The best entrepreneurs capitalize on the momentum of each success, and can’t wait to aim even higher the next time, based on lessons learned. Once they have mastered the fundamentals, they are never satisfied, but are driven to continuous improvement and streamlining the process.

It helps to have limitless energy, and unshakable determination. Elon Musk is known for his hundred-hour workweeks, and his endless curiosity. It’s also important to surround yourself with the right people, who can complement your vision with the necessary execution skills. Smart entrepreneurs also make good use of domain experts as advisors and mentors.

Don’t forget that today’s innovative “social economy” requires an emotional attachment that links customers to products, as opposed to competitors, translating into sustainable growth. Serial entrepreneurs have found that multiple simple inspirational product and brand messages are far more influential than ones which highlights product features and functions.

Serial entrepreneurs certainly understand the high probability of failure, but they don’t necessarily like to gamble. Instead, they take calculated risks, stacking the deck in their favor. They must have enough confidence in themselves, supplemented by expert knowledge, solid relationships, or personal wealth, to see the risk as near zero.

For serial entrepreneurs, the next step is often to be the CEO of multiple early-stage startups concurrently, or a parallel entrepreneur. The hot new term for this practice is “multi-table” entrepreneurs, which no doubt is derived from the common online gambling practice of playing multiple poker games at the same time. There is no end to the fun of being a serial winner.

Marty Zwilling

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Friday, July 13, 2018

7 Key Steps To Getting Top Performance From Your Team

google-teamDuring my early years of managing in business, I always assumed that if I hired and trained the smartest and most experienced people I could find, I would get outstanding productivity. I quickly learned that top performance also required the right initiatives and responsiveness on my part, high employee engagement, and a matching chemistry and culture with other team members.

For example, according to recent research from Bain & Company, Apple, Netflix, Google, and Dell employees are 40 percent more productive than the average, even though they are no smarter or more experienced. The research shows that senior leaders at these companies focus more on an efficiency culture, team makeup, and remove more obstacles to team productivity.

In my work with startups, I have been struck by how relevant and critical these same initiatives are to even the earliest stage of new ventures, and how hard it is to change later if you don’t get it right the first time. Here are some specific actions I now recommend to every entrepreneur, and to every senior executive, to get top performance from every member of their team:

  1. Clearly and iteratively communicate team goals and objectives. Don’t be lulled into complacency by a few team members who always seem to get the message quickly. I always felt I was over-communicating, having repeated a key message in three team meetings, until I heard a comment, “Why didn’t they tell me sooner what was expected?”

    As your team grows, and the business pivots, communication of expectations becomes more of a challenge. As you contemplate your key messages, I recommend that you count on repeating them at least five times in different forums to assure they are heard.

  2. Define and document role content and standards for performance. Don’t assume that your expectations for a given role will be intuitively obvious to the relevant team member. New team members in a new startup, coming from different backgrounds, may have quite different standards for excellent performance from previous experiences.

  3. Give team members the right to make decisions in their role. Micromanagement is never effective in achieving top performance. You as the manager don’t have the time to make every decision, team members will be de-motivated, and will use your actions as an excuse for low performance. Practice process coaching, but not edicting decisions.

    I recently was an advisor to a very strong technical executive who insisted on “being involved” in literally every decision in his startup. He ignored my advice and ultimately lost several key executives, and then his own health, due to stress and workload. No one can be a top performer in these environments.

  4. Relay regular informal observations on progress and results. Informal feedback should be provided weekly or daily, without emotion. More formal sessions should be held semi-annually. This may seem obvious, but I found it hard to do, given the daily crises and distractions of a normal startup. Don’t surprise your employee at the end.

  5. Give team members the training, tools, and data to do the job. No one can be a top performer without the resources necessary to get the job done. Your responsibility is to anticipate these requirements, listen carefully to feedback from team members, and provide resources on a timely basis.

    For example, if the business was built around your technical invention, it’s easy to forget your own learning curve and the wealth of data you have accumulated over the years. You can’t expect new team members to come pre-loaded with all the same background and insights. They need your mentoring, tools, and historical data to be a top performer.

  6. Diligently provide follow-up and support on assistance requests. Team members assess your responsiveness, just as you measure theirs. Top performers expect to be surrounded by leaders who recognize and supportively respond to situations that go beyond their domain. The goal is to have no employee action impeded by leader inaction.

  7. Formally and informally reward positive results. Informally showing your appreciation on a person-to-person basis and in front of peer team members is usually more valuable than financial incentives. Yet in the long run, you get what you pay for. Thus paying for sales volume, when you desire customer satisfaction, will not get you high performance.

Thus I learned that the performance of your team is a reflection on you as the leader, as much as the performance of individual team members. You select the team members, you set the culture and motivation for the team, and your support is the key to their delivery. Companies who have top performing teams must start with top performing leaders. Now is the time to be one.

Marty Zwilling

*** First published on Inc.com on 06/27/2018 ***

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Wednesday, July 11, 2018

9 Innovation Practices For Long-Term Business Health

innovativer-denkerA guiding principle for startup success, as well as the long-term health of a mature business, is a liberal dose of innovation at the beginning, with additions of the same on a regular basis. Unfortunately, innovation means change, and most business professionals and existing customers, by default, hate change. Thus without thinking, every company becomes more static.

In fact, innovation needs to be an integral part of the company culture and every process from the beginning. This takes leadership from the top, and an ongoing focus on market change, customer feedback, and internal measurement and rewards. For example, Google has institutionalized innovation through a manifesto initiated by Marissa Mayer in her early days as a VP there.

I believe these basic practices of innovation, paraphrased here, should be adopted by every new venture owner, and every business executive, as the keys to long-term health and success in every market served:

  1. Demand and reward innovation from all business elements. Executives should solicit new ideas from everyone at every level, both inside the organization and outside, top down and bottoms up. Business leadership and innovation implementation still need to be visible and supported by all management, through actions as well as messages.

  2. Let customer value be the driver, rather than cost savings. When innovations are driven by increased customer value and satisfaction, business growth will come naturally from repeat business, new customers, and referrals. Employees will be motivated by delighted customers, and the value will spread to the greater community and society.

  3. Aim for an order-of-magnitude innovation improvement. “Nice to have” features or a ten percent cost advantage is not convincing or competitive these days. To get customer attention, you need innovations that represent a tenfold improvement in cost or function. Of course, multiple small innovations should not be overlooked for their cumulative value.

  4. Focus on translating new technology into solutions. From a customer perspective, new technology does not have value until it provides a solution that meets their needs. For Google, this has led to their voice-activated personal assistant, better maps, and the prospect of self-driving cars. Technology innovation alone is necessary, but not sufficient.

  5. Innovations need real market feedback and iterations. Too many innovations that aren’t perfect the first time never get a second look, and die an expensive death. Others get caught in analysis paralysis, and never get exposed to real customers. Remember that the market is constantly changing, so “rinse and repeat” is the order of the day.

  6. Allocate one-fifth of every work day to finding innovation. Start with a focus on hiring people who have a track record as change agents, and encourage them to spend twenty percent of their work time on new ideas and innovations, both within and outside the job boundaries. Make sure you have compensation and rewards to support this strategy.

  7. Don’t be reluctant to share your efforts with your industry. Information sharing, such as through open source and white papers, will increase market acceptance of your innovation, and allow concurrent work on integration and standardization. You need others for collaboration and feedback, and you need their sharing of their ideas.

  8. Treat failures as a badge of courage and learning opportunities. Thomas Edison called every failure a success, as each one taught him what didn’t work. Learn to fail fast and fail cheap to keep up with today’s rapidly changing and highly competitive marketplace. Allow no negativity or penalties to be associated with failed experiments.

  9. Connect your innovation efforts to a higher purpose. Employees think harder and get more satisfaction if they believe their innovations will positively impact the greater good and the environment. Companies that give back are seen as more trustworthy and more attractive for new business. Set and communicate real legacy goals for the business.

The rate of change and competition in the world is increasing, rather than decreasing. This is all the more reason for no more excuses, delays, or negativity about the costs of change. It’s time to create your own innovation manifesto for leading the way, rather than the “business as usual” struggling to keep up. Catching up later is not a viable strategy for survival in business today.

Marty Zwilling

*** First published on CayenneConsulting on 06/19/2018 ***

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Friday, July 6, 2018

How To Become A Lifelong Learner In A World Of Change

lifelong-learnerAs a new business advisor, I often meet aspiring entrepreneurs looking for that magic formula for success. I tell them that success in today’s rapidly changing environment simply means learning and adapting faster than your competitors. There are no static rules, or constant states to strive for. Yet the fact is that most of us are very bad at learning, since it implies risk and failure.

It’s easy to say that the best business leaders never stop learning, but it’s harder to put specifics behind this process. I found some help on the steps in a new book, “Never Stop Learning,” by Bradley R. Staats. From the Flagler Business School, he brings a great combination of the latest research in behavioral science with engaging stories that demonstrate real learning in business.

I will paraphrase his key points here, adding my own insights on how they relate to business people and situations that I have encountered over the years:

  1. Continuous learners are willing to fail in order to learn. As Mark Zuckerberg once said, “in a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” Steve Jobs and Walt Disney are two entrepreneurs who took risks but failed multiple times, before achieving their legacy as winners in the world of business.

    Don’t expect failure not to hurt, like you have just lost your child. But then, you realize that the pressure to find success is replaced by the freedom to begin again, having learned from your mistakes, and be less afraid of uncertainty. Just don’t make the same mistake twice.

  2. Focus on the process rather than the desired outcome. Focusing on the outcome too soon is misguided, because you may have no idea how to get there. Better to take one process step at a time, with failure and learning at every step. Multiple small successes are key to the long-term motivation and determination needed to reach visible success.

    Bill Gates wanted a personal computer on every desktop, but he kept his focus on motivating and supporting one application developer at a time. Eventually this momentum attracted more and more end users, until he achieved his desired outcome.

  3. Don’t be afraid to ask questions rather than rush to answers. Dynamic learners recognize that “I don’t know” is a fair place to start – as long as you quickly follow with a question and some research. The scientific method, and all kids, understand that all learning starts with a question. People rarely learn anything new while giving answers.

  4. Take time for reflection and relaxation. Fight the urge to act for the sake of acting and recognize that when the going gets tough, the tough are recharged, and take time to think. Too many of the entrepreneurs I meet feel too busy to think before acting. The result is that they repeat their mistakes, and hope for a different outcome each time.

    I’ve worked with several talented entrepreneurs who refused to slow down, rest, or delegate in their drive to beat competition. Eventually each lost their health, or failed to learn from mistakes, to the point that their business suffered or could not keep up.

  5. Stop trying to conform – be yourself and willing to stand out. When you are truly yourself, this gives rise to positive emotions, and you are more likely to be motivated to expend the necessary effort to learn. Conforming to other’s expectations makes you a follower, not a leader. Being a follower puts you at the losing end of competition.

  6. Don’t try to fix weaknesses - play to your strengths. Most entrepreneurs believe they need to excel on all dimensions to achieve long-term success. They forget that business is not a one-person operation. The best strategy is to build a team with complementary, but not redundant, skills. For example, technical entrepreneurs should focus on the product, and find a partner with deep experience in finance or marketing. Each can then learn from other’s strengths, for a winning whole.

  7. Build a portfolio of experiences – both deep and broad. Accumulating experience in a specific skill improves performance, but at a decreasing rate. Variety is more productive. If tasks are related, knowledge transfers for one area to another – and becomes a learning accelerator. Use both specialization and variety as powerful learning tools.

  8. Recognize that learning is not a solo exercise. Business is the ideal environment to learn from others – advisors, investors, your team, customers, and competitors. Two-way relationships are crucial, since helping others to learn is a pre-requisite to self-learning. Be sure to put aside your biases and ego to more effectively learn from others.

As an occasional angel investor, I find that solo entrepreneur startups rarely get funded. Very few inventors also have deep business strengths. The ideal co-founder team is one with deep technical skills, and the other with requisite business and financial strengths.

Living in today’s learning economy means that all of us in business must approach learning with four mindsets: focused, fast, frequent, and flexible. Learning must be never ending, and anyone can master the process. Don’t be your own worst enemy, and be too busy or lose the will to learn. Learning is the only way to stay relevant, reinvent yourself regularly, and thrive in business today.

Marty Zwilling

*** First published on Inc.com on 06/22/2018 ***

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Sunday, July 1, 2018

7 Mistakes To Avoid In Forming A New Venture Board

Steven_Koonin_board_meetingMost entrepreneurs avoid setting up a board of directors for their new business unless or until they sign up an investor who demands a seat on the board. That implies that a board of directors has no value to the founder, and is just another burden that to be assumed for the privilege of attracting outside investors or going public. In my view, nothing could be further from the truth.

Especially for entrepreneurs who have not built and sold companies before, and need this startup to be an attractive acquisition or IPO target in a few years, I can’t think of a better way to enlist outside experts and keep them motivated to help you meet the challenges of a startup. High-performing startups today are the ones that use every resource at their disposal.

Of course, if the board is set up or used incorrectly, the impact can indeed be more negative than positive. In her classic book “Corporate Concinnity in the Boardroom,” board expert Nancy Falls outlines the most common mistakes with boards, and I believe several of these apply to startups as well as to more mature companies as follows:

  1. Have too many or too few board members. Size does matter. I recommend three or five members to start (an uneven number prevents tie votes). Too many members are difficult to schedule and manage, and cost too much. Less than three is not a board. Members should be compensated, starting at one percent of stock or a small retainer plus expenses per quarter. Their value will be well worth the investment.

  2. Avoid outside independent directors. Outside directors bring new input to the table that offers invaluable context to your hyper-focused inside officers. The objective is a balance of skills and interests to optimize the growth and success of the business. Friends and family may tell you what you want to hear, but not what you need to hear.

  3. Expect the board to always support management. A small number of board members have to represent the divergent views of all constituents (be a representative democracy). In fact, the primary function of the board is to be the boss for the CEO, setting clear goals, measuring performance, and providing business governance.

  4. Have the wrong management representation. In startups, where the CEO is usually the founder and major shareholder, it is normal for the CEO to chair the board. At most, one other senior insider would be appropriate, but a board that is dominated by insiders or family members with minimum business experience is generally not effective.

  5. Maintain too little diversity. As globalization and the shifting demographics of markets and the workforce make startups more dependent on diversity, a board built on homogeneous relationships has the inherent risk of insularity. Pick your outside directors, not only on ownership or relationship, but also on experience in the world you know least.

  6. Fail to establish adequate structure. Every board needs a playbook to bring clarity to the roles and responsibilities of the board itself. Board rules and governance policies should be articulated in writing and voted upon. The board should meet at a minimum of four times a year with a quorum present, or more often for critical issues.

  7. Lack commitment and trust in board recommendations. A culture of mutual trust, respect, and commitment must be set from the beginning and from the top. Board members in constant conflict can kill your company more quickly than any market forces. Members don’t need to all like each other, but they do need to respect one another and be committed to working together for the betterment of the business.

If your startup is not quite ready for a formal board of directors, then I would recommend you start with the less formal advisory board. An advisory board is a small group of mentors that have specific industry knowledge and connections and bring their consultative expertise to the CEO in much the same way as a formal board, but without any formal roles or associated liabilities.

Thus the biggest mistake any new entrepreneur can make is to believe that a board of advisors or a board of directors will only slow them down. It’s never too early to bolster your leadership strength with experienced partners inside the organization, and professional advisors who can take the larger view. It’s a complex competitive world out there, and learning is a full-time role.

Marty Zwilling

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