Wednesday, July 17, 2019

Use Key Strategic Elements To Avoid Business Plateaus

Business-growth-plateauOne of the biggest challenges I find for new business owners is for them to move from working in the business to working on the business. You are so engaged in building and selling your product or service, that you “don’t have time” to focus on strategy and the next round of changes for the business to survive and grow. The result is a business plateau that hits you like a ton of bricks.

As a business advisor, when I bring this up, at best I will hear the defense that you are focused on the strategy of the moment, such as such as how to increase sales, or reach a new market. I have to admit that I have struggled with this myself many times, trying to understand all the dimensions of strategy, which has always seemed like an amorphous and overwhelming subject.

I was happy to see some good guidance on this subject in a new book, “Outsizing: Strategies to Grow Your Business, Profits, and Potential,” by Steve Coughran, who is a thought leader and consultant in this area. He outlines six dimensions of a winning business strategy, with some practical, research-based steps that I like, to focus on in achieving extraordinary results:

  1. Above all, deliver an exceptional total customer experience. The most successful companies today build a strategy to proactively anticipate the needs of their customers, as a group and individually, and totally delight them with all aspects of the shopping experience, value, delivery, and help with any follow-on questions or problems.

    For example, Apple has been a master at this, developing products like the iPod and iPhone before customers even knew they needed them, creating Apple stores with a whole new shopping and support experience, and intuitive usage needing no manuals.

  2. Highlight your competitive value, not your technology. This may sound obvious, but I still see too many companies with a strategy of highlighting technology improvements and features, rather than their value compared to competitors. This requires constant study of what your customers value, what competitors offer, and your target market.

    Converting customer-centric advantages into business value requires a deep understanding of all the financial elements of your business, as well as customer drivers. It starts with continually optimizing your business model, using analytics on all the data, and creating and using metrics to measure your performance and progress to date.

  3. Seek out and capitalize on emerging opportunities. We all wish we could “see around corners,” and are envious of people like Steve Jobs and Elon Musk, who seem to have this ability. With a little hard work at projecting market and technology turns, as well as the courage to make bold decisions, any of us can move further in this direction.

    For example, it doesn’t take a genius to see opportunities today due to the massive changes in healthcare, environmental concerns, social changes around the world, and the new generations of consumers. But it does take effort to weave these into a strategy.

  4. Unleash the potential of your team and talent. Strong leaders continually work on a strategy of hiring, developing, and retaining the best and the brightest. Too many business owners I know push these efforts to the bottom of their priority list, in favor of the operational crisis of the moment, or until they feel gaping holes in their team.

    Most successful CEOs now recognize motivated teams and a strong culture as one of the greatest sources of competitive advantage and long-term growth. A strategy of empowering people will produce near-term as well as lasting results for your business.

  5. Turn value creation (revenue) into value capture (profit). Strategy is more than hashing out mission, vision, and value statements. It’s making sure that these statements are financially grounded with specifics to assure an adequate return on investment for all constituents. Focus on user counts, or revenue alone, won’t make a long-term business.

    Smart growth and value capture strategies usually include selling more to existing customers and your current market, and selling current products in a new market. before developing new products or carving out a new and untested space for your business.

  6. Internalize the strategy process keyed to the bottom line. Strategy can’t be a one-time effort. Customers and the market don’t stand still, so your strategy can’t either. Efficiency is achieved through consistency and innovation, based on the bottom line results of your business. Establish a strategic cycle of initiatives, actions, and results.

With each of these dimensions, you can see that strategy is actually about working on the business, as well as in it. It’s hard work, and requires that you learn from your mistakes. Yet I’m convinced that we are operating at an exciting time, standing on the edge of new and exciting opportunities. Success won’t come from a random walk – build a strategy now for your future.

Marty Zwilling

*** First published on Inc.com on 07/03/2019 ***

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Monday, July 15, 2019

10 Ways Your Startup Co-Founder Is Like A Good Spouse

Sergey-Brin-Larry-Page-Eric-SchmidtAs a long-time business advisor and angel investor, I’m a believer that “two heads are better than one” in building a new business. Very few entrepreneurs have the range of skills and experience to be the solution creator as well as business creator, or operational as well as sales leader. The challenge is to recognize and recruit that ideal partner match early with minimal cost and risk.

In fact, I would broaden the definition of partner from co-founder to “business partner.” The reason is that good attributes apply equally well to “external” partners, as they do to internal partners, like a co-founder or CTO. A good overall example is the synergy between Google co-founders Sergey Brin and Larry Page, as well as long-time Executive Chairman Eric Schmidt.

In all cases, the challenge is the same, of finding people that you can work with and enjoy in the business relationship. The relationship has to have trust, communication, and respect in order to work. Otherwise, like a marriage, it will be doomed to constant conflict, second guessing, and unhappiness. So the following traits have to apply to both sides of the partnership to work:

  1. Capable of working collaboratively. Some people are too independent to be partner material. If they or you find it hard to trust others, love to work alone, always have to be in control, or insist on micro-managing, it may be time for change or looking elsewhere.
  1. Neither partner needs to be managed. Good partners are people who are confident in their own abilities, and willing and able to make decisions, take responsibility for their actions, and able to provide leadership, rather than require leadership.
  1. All partners have compatible work styles. Most entrepreneurs work long hours and weekends to get the job done. If you team with a partner who likes to sleep late, and reserves the weekend for other activities, the partnership will likely not work.
  1. Agree on a common vision and commitment. It doesn’t take long to sense someone’s real commitment, or vision and desired outcome of a joint project. Is your project seen by both as an end in itself, or a means to another end? Conflicting visions won’t work.
  1. Believe in similar values and goals. If one of your core values is exceeding your customer expectations for quality and service, and your potential partner ascribes to the low cost, high profit mantra, a successful partnership is highly unlikely over the long-term.
  1. Operate with a comparable level of integrity. High levels of integrity are important in business, but more important is your level of comfort with your partner’s integrity. This is a critical element of a good relationship, but a tough one. This is probably the best place to apply your “gut” feeling.
  1. Brings complementary skills and experience. If both of you are experts at software development, even though one loves design and the other loves coding, that still won’t get the marketing done. Look at the big picture first of development, finance, and marketing/sales.
  1. Feels a real passion and love for their role. The passion has to be in the business context – meaning results oriented, customer oriented, and sensitive to competition. In many cases, experts with academic or research credentials are not good partners for a business venture.
  1. Believe in the same ethical and diversity boundaries. How the leaders of your company handle adherence to the spirit as well as the letter of the law will be seen by all employees, customers, and investors. Ethics and the view of personal boundaries should be explored fully.
  1. Carry minimal historical baggage. Partner decisions are more important than team member hiring decisions. Thus you should do the same or more due diligence on educational background, previous work, and references. Look impartially from all angles and do the follow-up on all relevant previous roles.

Beyond the core team of two or three startup partners, every startup should seek to “outsource” the rest of their strategic requirements to external business partners. It’s faster and cheaper than building a large team in-house, and usually more effective.

By using this checklist, you should be able to objectively match potential partners with your own needs and expectations. Then, as I always recommend, it’s time to establish a formal agreement or contract to cement the partnership. With that, you will have a strong foundation for success, as well as a great working relationship for the next thirty years.

Marty Zwilling

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Sunday, July 14, 2019

10 Innovation Myths For New Venture Founders To Avoid

innovation-mythsMost people think innovation is all about ideas, when in fact it is more about delivery, people, and process. Entrepreneurs looking to innovate need to understand the execution challenge if they expect their startup to carve out a profitable niche in the marketplace, and keep innovating to build and maintain a sustainable competitive advantage.

Everyone thinks they know how to make their innovation into reality, but I can’t find much deep research on the subject. At the same time, myths about innovation are commonplace in business. Vijay Govindarajan and Chris Trimble, in their classic book “The Other Side of Innovation: Solving the Execution Challenge” have done some good work on the execution side.

They take you step-by-step through the innovation execution process, in the context the ten most common myths about innovation, which I think makes their approach particularly instructive:

  1. Innovation is all about ideas. While it is true that you can’t get started without an idea, the importance of the Big Hunt is vastly overrated. Ideas are only beginnings. Without the necessary focus, discipline, and resources on execution, nothing happens.
  1. A great leader never fails at innovation. When it comes to innovation, there is nothing simple about execution. The inherent conflicts between innovation and ongoing operations are simply too fundamental and too powerful for one person to tackle alone.
  1. Effective innovation leaders are subversives fighting the system. Effective innovation leaders are not necessarily the biggest risk takers, mavericks, and rebels. The primary virtue of an effective innovation leader is humility. What you want is integration with real world operations, not an undisciplined and chaotic mess.
  1. Everyone can be an innovator. Ideation is everyone’s job, as are small improvements in each employee’s direct sphere of responsibility. Yet most team members don’t have the bandwidth or interest to do their existing job, and well as address major innovations.
  1. Real innovation happens bottoms-up. Innovation initiatives of any appreciable scale require a formal, intentional resource commitment. That requires the focus and resources from top executives to sustain, even initiate, relevant efforts.
  1. Innovation can be embedded inside an established organization. Some forms of innovation can be imbedded, like continuous product improvement, but discontinuous innovation is basically incompatible with ongoing operations.
  1. Initiating innovation requires wholesale organizational change. Innovation requires only targeted change. The first principle is to do no harm to existing operations. A common approach that works is to use dedicated teams to structure innovative efforts.
  1. Innovation can only happen in skunk works. Innovation should not be isolated from ongoing operations. There must be engagement between the two. Nearly every worthwhile innovation initiative needs to leverage existing assets and capabilities.
  1. Innovation is unmanageable chaos. Unfortunately, best practices for generating ideas have almost nothing to do with best practices for moving them forward. Innovation must be closely and carefully managed, during the 99% of the journey that is execution.
  1. Only startups can innovate. Luckily for entrepreneurs, many large companies are convinced that they must leave innovation to startups. Yet research suggests that many of the world’s biggest problems can only be solved by large, established corporations.

Everyone agrees that the goal of innovation is positive change, to make someone or something better. Entrepreneurs need it to start, and established companies need it to survive. The front end of innovation, or “ideating” is the energizing and glamorous part. Execution seems like behind-the-scenes dirty work.

But without the reality of execution, innovative ideas really have no value. Customers are interested in solutions, and investors want to see the money. Your real challenge as an entrepreneur is to create an innovative business, not an innovative idea.

Marty Zwilling

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Saturday, July 13, 2019

9 Elements Of Every New Venture That Investors Expect

Business-model-canvas-prepNew entrepreneurs are always looking for a shortcut in getting their venture story and plan across to investors, and closing on the funding they need. An effective tool I see used more and more, as a prelude to a more detailed business plan, is the Business Model Canvas, first introduced by Alexander Osterwalder back in 2008. It forces you to bridge the gap between idea and execution.

The canvas is a visual chart with elements describing your value proposition, structure, finances, and customers, to help companies identify and align business activities. Now I see in an excellent book, “Business Models for Teams,” by Tim Clark and Bruce Hazen, an extension of this process to down inside the venture, for teams and individuals. It shows you how everyone works in synergy.

In my experience as a new business advisor, a business is nothing until people are aligned and work in sync. As an active angel investor, I look for this level of alignment and understanding in every funding presentation I hear. I look for evidence of the nine major elements of the model canvas, as paraphrased here from the author’s key points and how they apply to teams:

  1. Customer segments. A business without well-defined customers is never fundable. Valid customer segments must be quantified for every opportunity. Many businesses these days serve both paying and non-paying customers, such as Google and Facebook, who count on millions of non-paying users to attract advertisers, who really pay the bill.
  1. Value propositions. Think of value propositions as bundles of services or products that create benefits (value) for customers. The ability to deliver better value is the main reason why customers select one competitor over another. Value should always include not only functions, but also social, environmental, and emotional benefits as well.
  1. Revenue. Every business needs revenue to provide investor returns and offset costs. “Free” is not an attractive revenue model to investors. Popular revenue models today include recurring subscription charges, licensing, as well the traditional sale or lease model. Every team needs to understand how their activities relate to customer revenue.
  1. Costs. Every entrepreneur needs to know and communicate the total costs associated with their solution or product, including cost of goods sold, customer acquisition costs, capital costs, operational expenses, and partner costs. Every team and every individual should know their own cost contributions required to complete their activities.
  1. Key resources. Investors are looking for the sum of all assets that are truly essential for creating, communicating, selling, and delivering your value proposition. These normally include people, tangible property, intellectual property, and cash flow requirements. Secondary assets, such as desks and computers, can be ignored at the funding stage.
  1. Channels. Channels have to be identified through which a startup creates awareness, induces evaluation, enables purchase, and executes the delivery of the value proposition. Every team and every individual needs to know how they relate to, or are responsible for, specific customer relationships. Investors will demand clear channel definitions.
  1. Customer relationships. Today, businesses are all about customer relationships, not just transactions. Thus investors expect to hear about strategies and technologies that your company plans to use to manage all customer interactions, with the goals of attracting new customers, improving customer retention, and driving sales growth.
  1. Key activities. These are the important things the business must do to make a specific business model work, specifically creating, communicating, selling, and delivering value propositions. Then there is the follow-up to provide customer support and satisfaction. Entrepreneurs who can’t communicate specific activities are not ready for funding.
  1. Key partners. No startup or entrepreneur is an island. It takes partners to make a business work, normally including suppliers, marketing, channel, and distribution partners, as well as funding partners. Every partner has their own set of activities and required resources. Every startup looking for investment needs a solid partner story.

Beyond the investment, a major challenge that every entrepreneur faces is getting teams and every individual on the team aligned and committed to the overall strategy and plan. That step, commonly called the we-to-me translation, is another value of the business model canvas and its extensions. There are no shortcuts to funding, but it pays to use the tools that work. Try this one.

Marty Zwilling

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Friday, July 12, 2019

7 Wise Leadership Strategies When Smart is Not Enough

Bill-Gates-wise-lookMost of the entrepreneurs I have met are smart, but many are not always wise. That means they may show great insights into a new technology that has marginal business value, their passion may motivate team members more than customers, or they may allow themselves to be pulled over the ethical line in their success drive. Wise leaders are authentic, timeless, and enduring.

Of course, experience is the ultimate teacher of the differences between smart and wise. But none of us can afford to make that many mistakes, so it helps to understand the basic principles that are key to making wise, as well as smart, decisions. In their classic book on the subject, “From Smart to Wise,” Prasad Kaipa and Navi Radjou offer some great observations, based on their years of research and consulting experience with hundreds of leaders.

I’ve summarized their basic principles here, in the context of early-stage entrepreneurs and startups, in the hope of providing a head start, and fewer mistakes to recover from, for every entrepreneur:

  1. Broaden your perspective for your passion, to the greater good. Perspective is what defines us, and shapes our thoughts and actions. For technologists it drives the passion to take new ideas to new realities. Wise leaders tend to connect their worldview and ideas, to help everyone find a larger meaning in life. Steve Jobs espoused this principle.
  1. Act authentically and appropriately as your perspective changes. Wise entrepreneurs are sensitive to the context they operate in and fine-tune their actions accordingly, while continuing to serve their higher purpose. They never forget their moral compass, and maintain credibility by always bridging the saying-versus-doing gap.
  1. Learn to perform any role well, without forgetting who you really are. We all know a smart entrepreneur who wouldn’t give up the CEO role, and lost the company. Wise leaders give up an existing role when it is time. They willingly act as trustees or servant leaders in whatever actions and roles they accept. Bill Gates seems to fit this model.
  1. Expand horizons to make every decision win-win versus win-lose. Smart leaders tend to make decisions instinctively, based on their own experience, with little attention to the larger context. Wise decisions win in the long run for the broader purpose, as well as problem at hand. Don’t let practical execution or emotions sway strategic deliberations.
  1. Know when to hold and when to fold, with flexible fortitude. Many smart leaders tend to stick with a decision, without any re-alignment to a rapidly changing external context. Wise leaders show courage in following the context, and grace in letting go when appropriate. This flexible fortitude keeps them aligned with the long-term benefit.
  1. Act and lead with enlightened self-interest, to serve others. This world is now too complex for one entrepreneur to have all the resources and products needed to satisfy their customers. That means nurturing partnerships and cooperation with competition, for the greater good. It’s a move from pure self-interest to enlightened self-interest.
  1. Strive to create your own authentic path to wise leadership. First adopt the six leadership elements including perspective, action orientation, role clarity, decision logic, fortitude, and motivation. Then integrate these in your own path to wise leadership, building wise cross-functional teams, wise organizations, and wise communities.

Smart people impress us all with their intellectual power and uncanny ability to achieve their goals. But smartness alone is not always sufficient to keep entrepreneurs out of trouble and sustain their success. Wise entrepreneurs ultimately are the ones that create lasting value for both stakeholders and society.

Evolving from smart to wise requires nothing more than reflecting on the best practices of other wise entrepreneurs and emulating them appropriately in your own personal journey and roles. Now is the time to measure where you are along the path, and build the roadmap for your journey. Have you assessed your leadership style lately against these principles?

Marty Zwilling

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Wednesday, July 10, 2019

8 Ways To Learn From Your Team And Succeed Together

succeed-with-your-teamStarting and running a company is a team effort. Yes, it takes a leader (entrepreneur), but you can’t do it alone, without a team. Maybe only you and a co-founder comprise the team at first, to provide key skills, back you up, and test your ideas. As the startup grows, the team has to be able to really push you in making growth decisions, rather than you pulling them along.

The responsibility for leadership rests on you as the founder or CEO, and your leadership style. Many entrepreneurs still fall back to the traditional “control” leadership paradigm, but I don’t see it working so well any more. I agree more with Dr. Roger Schwarz and his classic book, “Smart Leaders, Smarter Teams.” He outlines eight keys to an effective mutual learning approach as follows:

  1. State views and ask genuine questions. When you state your views and ask genuine questions, you are convincingly open and curious. Understand that curiosity doesn’t mean agreement, and all questions are not genuine. Recognize that rhetorical questions seek to make a point or make people do something, not come up with a real answer.
  1. Share all relevant information. All team members need all the right information, before they can make, understand, and implement forward-looking decisions. That means sharing timely information that doesn’t always support your view, or might upset others. You should disclose your feelings, and any limiting factors like privacy or legality.
  1. Use specific examples and agree on what important words mean. If you hear someone on the team using a word or term that you think is unclear to others, ask for a specific example. This usually requires naming real names, rather than “someone,” and asking what you really want to know, without generalizing the question.
  1. Explain reasoning and intent. Teams are hardwired to make meaning out of problems. When you share your reasoning and intent, you reduce the need for others to figure out reasons, or assume something is being withheld. Start every meeting with one or two sentences that explain what you want to talk about and why.
  1. Focus on interests, not positions. Positions represent specific solutions from a given team member, whereas interests are the underlying needs that drive people to their position. You need a decision that meets all key interests, in order to get total commitment to the best solution from the team.
  1. Test assumptions and inferences. Assumptions are conclusions with no information. Inferences are conclusions about things you don’t know based on things you do know. Avoid assumptions, and test every inference by checking it against behavior confirmed by someone else. Untested inferences are among the main reasons a team gets stuck.
  1. Jointly design next steps. When you jointly design next steps, you design them with others instead of for others. It increases the chance that you will get a genuinely workable solution and that the team will be committed to implementing it. Keep in mind that joint design doesn’t mean that you give up your prerogative of making the final decision..
  1. Discuss un-discussable issues. These are topics relevant to a solution that team members won’t address in the team, due to fear or compassion. Examples include disruptive actions of a team member or a boss. Leaders may start the discussion outside, but must address it, with respect, inside the team for mutual learning and resolution.

Where you as the leader may be part of the problem in the mutual learning process, it may be necessary to ask a third party inside the organization, or a consultant from outside the organization to facilitate the transformation, or the resolution of a tough change issue. True leaders know how to move out of the way to let others do what they do best.

The results are improved performance, stronger working relationships, and greater well-being for you, your team, and your company. In the long run, every entrepreneur needs to remember that it’s the team, with their broader range of skills and experience, that builds the leader’s success – and not the other way around. This rarely happens with total control leadership.

Marty Zwilling

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Monday, July 8, 2019

10 Challenging Insights From New Venture Innovators

Insights-from-entrepreneursMost people agree that entrepreneurs have to think differently and take risks to have much chance of building a successful business. Yet I have found that serious entrepreneurs usually go way beyond these platitudes in their actions and thinking, and often won’t volunteer their real views, for fear of alienating “regular” people, and being branded a fanatic.

In the classic book “The Entrepreneur Mind,” from serial entrepreneur Kevin D. Johnson, he outlines 100 essential beliefs, insights, and habits of serious entrepreneurs. Most of these are predictable, like think big and create new markets, but I found a few, like the ten below, that will likely raise the hackles of many people outside this lifestyle, and many “wannabe” entrepreneurs.

Yet, based on my own years of experience “in the business”, mentoring many entrepreneurs, and following stalwarts like Elon Musk and Jeff Bezos, even these potentially controversial mindsets ring true to me:

  1. All risk isn’t risky. Entrepreneurs surely 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.
  1. Business comes first, family second. This view isn’t a selfish one, but a recognition by serious entrepreneurs that family well-being is dependent on the success of the business, not the other way around. This is why airlines ask you to put on your oxygen mask first. Should you forego closing a million dollar deal to attend a ball game with your son?
  1. Following your passion is bogus. Look for a good business model first. Your passion may be for a good cause, like curing world hunger, but it may not be a good business. In any young business, you inevitably find things that are not enjoyable, but need to be done, like cold calls or firing unproductive employees. Just doing fun things is a myth.
  1. It’s not about being your own boss. Great entrepreneurs aren’t interested in being bosses at all. People who crave the freedom to do what they want when they want generally make terrible entrepreneurs. In order to be a successful entrepreneur, discipline is a must, and accept your new bosses as investors, partners, and customers.

  1. Fire your worst customers. We have all had customers who take advantage of us, to the detriment of other good customers. The best entrepreneurs are quick to make the tough decisions to bypass bad customers, with proper respect, to minimize frustration, resource drain, and reputation loss. You can’t please everyone all the time.
  1. Ignorance can be bliss. It’s great to be highly familiar with the industry in which you plan to compete, but many times people see too many challenges, and never start. In other cases, entrepreneurs are opening up new business areas, so no one yet knows the challenges. Serious entrepreneurs trust their ability to beat a new path to the opportunity.
  1. You’re in no rush to get an MBA. If you are already an entrepreneur, more education, including an MBA, will only slow you down. Consider it a waste of time. If you plan to become an entrepreneur, and already have business experience or an undergraduate business degree, skip the two-year delay and cost of the MBA.
  1. You are odd, and it’s OK. Entrepreneurs, especially those in technology, usually don’t start out as well-rounded, well-adjusted leaders. In fact, being odd is quite the norm. According to other studies, attention-deficit disorder (ADD) is common, as well as host of other personality disorders. It’s actually cool to be a geek in this lifestyle.
  1. A check in hand means nothing. Every entrepreneur remembers their naïve days when that first customer check bounced. When you receive a new purchase order, a check, a verbal agreement, or even a written agreement, don’t get too happy and excited. Save the celebration until you have cold cash in hand, or the funds are verified.
  1. There’s no such thing as a cold call. If you are an elite entrepreneur, you don’t go into anything cold. With the Internet and a plethora of other resources, you can warm up any call quickly, and not waste your time or theirs. Doing your homework first is one of the best ways to get an advantage over your competition.

If you think Johnson is on the right track, see his book for 90 more challenging insights. Even if you disagree with some of these, try to open your mind to the value of the seemingly backward way of thinking required to be a great entrepreneur – others seek refuge, they take risks; others want a job, they want to create jobs; others follow the market, while they define the market.

Have you caught the entrepreneur bug yet? If so, prepare for a lifetime commitment, and learn from the elite. There is no turning back.

Marty Zwilling

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Sunday, July 7, 2019

6 Keys To Growing Your Career Through The Gig Economy

Gig-economy-careerWhile everyone agrees that the “gig economy” is really here, the practical realities, other than not counting on long-term employment, are not so obvious. In my role as a mentor to many business professionals, I still see some who have no idea how to adapt to the new realities. The simple answer is that we all have to start thinking like entrepreneurs, rather than entitled employees.

To me, that means treating your career more like a business than a job – with a continual and global focus on keeping up with competition, finding customers, preparing for changes ahead, and taking responsibility for your own finances. With entrepreneurial thinking, this can be a win-win, with you getting more control, and good for companies, who want the more flexible staffing.

On the other hand, if you expect your employer to push you into future training required, always have a growth opportunity waiting, and set all your work parameters, then you may find a difficult road ahead. My recommendation is that you must start today preparing yourself for the future, by thinking of your current employer as a customer, and focusing on the following specifics:

  1. Quantify your value to your employer, compared to alternatives. I’m not looking for a personal guess, but some real homework done via networking and the Internet to see what other companies pay for the same role. Then look ahead to assess the likelihood that your job could be eliminated with new technology, artificial intelligence, or robots.

    This may seem scary, but it’s the reality, and what every entrepreneur has to do at every stage of survival and success. The good news is that this exercise, if done well, will be the best evidence to support your next raise request, as well as showing your readiness for the new gig economy.

  2. Assess your intellectual capital and how to increase it. It’s time to take a hard look at your breadth of experience, relevant relationships, connections, and skill depth, compared to your peers in that role. More intellectual capital means that you are worth more today in the marketplace.

    Take advantage of any and all current opportunities, such as industry conferences and special projects, to increase your intellectual capital for current roles and gigs in the future. Entrepreneurial thinking is all about being proactive, rather than wait to be pushed.

  3. Start tracking your costs as well as income elements. Most employees I know have no idea what their business life costs, since they have never had to worry about costs as employees. These costs include travel, training, supplies, office space, bookkeeping, and many others. You need to understand your real income requirements to survive on gigs.

    You will find it pays big dividends, even in your personal life, to track and manage expenses with a simple business platform, like QuickBooks or Apptivo, for work and family. With one of these, the step into the gig economy will be much less painful.

  4. Build your reputation and visibility beyond your company. Every employee or entrepreneur needs to build a competitive reputation on the Internet, through a website, blog, LinkedIn profile, and social media. Don’t let Facebook party pictures be the only way people see you when looking for a professional. Market your business expertise.

    In today’s gig economy, your professional reputation, references, and your ability to market yourself are the keys to success. All of these can be built and will serve you well while still an employee, looking for your next promotion or your first gig.

  5. Explore small gig opportunities without quitting your day job. Just as I recommend that aspiring entrepreneurs get their startup going before leaving a regular job, you should start competing for small gigs that can be done in the evenings or on weekends, to test your fit and needs, before you get forced into this world full time.

    In the current vernacular, these are often called “side hustles.” They make sense if you just want to pad your savings by creating additional income sources, as well as for testing the waters for your ability to thrive in the solo entrepreneur world of the gig economy.

  6. Regularly scan the marketplace for potential anchor clients. Before you get pushed out into the gig economy, you need to be looking for a few key clients that would likely select you and give you recurring business. There are already multiple gig platforms, including UpWork and TaskRabbit, that you can freely explore through the Internet.

You may think that gigs are relevant only to the low end of the skill spectrum, such as data entry and social media monitoring, but I see more and more highly qualified marketing and development people choosing the gig route rather than long-term employment for higher returns and more challenging work. Don’t wait for your next company layoff to get you started.

Marty Zwilling

*** First published on Inc.com on 06/21/2019 ***

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Saturday, July 6, 2019

How To Ensure Results From All Business Conversations

Connection-Business-CollaborationWhether you are trying to motivate your team, close a deal with a customer, or get funding from an investor, a casual conversation is usually a waste of your valuable time. These result is a founder who is always “too busy,” but never seems to get the business done and the team moving. All real business is conversations focused on creating results.

Shawn Kent Hayashi, in her classic book “Conversations That Get Results and Inspire Collaboration” makes my point very well as she outlines the top twelve types of conversations that relate to working together in business, and provides tips on how to make each of them more effective for all concerned:

  1. Conversation for connection. Connecting with others happens when we slow down our talking enough to be in the present and really listen to one another. Rapport building requires listening, more than talking. Powerful listening causes trust to grow.
  1. Conversation for creating new possibilities. The questions a manager or colleague asks help us to understand a situation better, if we ask good questions and really listen to the answers. Conversations can also be the triggers to professional development.
  1. Conversation for structure. When we know what we want to create, the next step is to devise a plan. We build our plans with the steps as we become aware of them through conversations, with ourselves as well as with others.
  1. Conversation for commitment. For each identified action step, we identify potential candidates and then seek their commitment to produce the result that corresponds to the task. The commitments we make to ourselves are the most fundamental.
  1. Conversation for action. What actions will make your tasks and goals come alive? We’ve all seen people get stuck in a project because they do not know what to do next. They’re not asking themselves or anyone else the right questions, and not listening.
  1. Conversation for accountability. After a conversation for commitment has occurred and the expectations are clear, being accountable for engaging others in what you want to do is a sign of respect. Sometimes people need to be guided into better outcomes.
  1. Conversation for conflict resolution. Many people will avoid conflict in work relationships at all costs, which is nonproductive. Others feel fear when the smell of conflict arises. A few overuse this conversation type. Conflict is normal, so deal with it.
  1. Conversation for breakdown. Anger indicates that something or someone has crossed one of our boundaries, and is a signal to address the issue. Breakdown recognition is vital to moving forward. Asking for what we want might actually clear up the breakdown.
  1. Conversation for withdrawal and disengagement. It is unrealistic to think that all work relationships will be enjoyable or friendly forever. Often it is best to end a tenuous connection, so that we can invest our time in ones that are meaningful and productive.
  1. Conversation for change. Your ability to change the direction of an individual, team, or an investor occurs through conversations. By design, you can change the conversation in the office, at board meetings, and with peers who seem to have gone off track.
  1. Conversation for appreciation. Think of the last time you felt really appreciated at work. Undoubtedly someone showed appreciation of your efforts using language that works for you. Affirming others through conversation builds relationships and momentum.
  1. Conversation for moving on. You have conversations for moving on when leaving a community or transferring or retiring from a company. One day you might reconnect, but for now you have closure, with no expectations of future conversations.

Being successful as an entrepreneur begins in a conversation with ourselves first, and then extends to others, focused on what we are passionate about, and the solutions we are bringing to market. None of these are casual conversations, where you don’t really listen to the response. How committed are you when someone is obviously not listening to your responses?

Marty Zwilling

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Friday, July 5, 2019

6 Ways To Help Others At Work And Still Save Yourself

Mistakes-to-avoid-managing-timeDon’t you wish you were better at saying “no” to all those extraneous requests for a bit of help at work? Every business owner and professional I know is struggling with their own workload, yet they let themselves get signed up for other people’s work, either out of frustration that things aren’t getting done, or guilt, or just plain sympathy. It’s time to stop jeopardizing your own future.

For example, as a software executive, I once had a talented engineer working for me who was always helping others, to the extent that he consistently missed his own project deadlines, and was ruining his health through lack of sleep. After some tough love by me, he admitted that he just couldn’t say no to all the people around him asking for help.

He didn’t realize that he had become part of the problem, rather than the solution. I found him a coach, and we suggested the following steps that may help you as well in declining requests from peers, without leading with the “no” that you find hard to express:

  1. Ask for a small delay, to give you time to think. Even though your first reaction is that this request will only take a second, it always pays to assess your own workload and deadlines before jumping into another commitment. A good approach is to buy some time with a small delay, such as “Let me just finish this task, and I’ll stop by to see you.”

    After some thought, you may realize that you are already overloaded, and this new request is not so easy. Also there may be someone, or additional homework, that you can suggest quickly. Always be sure to stop by as promised, to maintain your credibility.

  2. Offer one-minute mentoring up front, and stick to it. Have you ever noticed how many “Do you have a minute?” requests turn into an hour or two of your time? Without saying no, and without a major impact on you, most people will appreciate a quick pointer or two to get started. Ask them to come back with specific results, and don’t accept less.

    One of the biggest mistakes you can make is to actually take over and do the job for the requestor, rather than make sure they do the work themselves. If you do their job, they don’t learn anything, and you can bet they will be back again soon. Both of you suffer.

  3. Positively point out a better alternative source for answers. Now is not the time to complain about being over-loaded or mistreated. A better approach is offer the loan of a guide book or documentation that you would have to review first anyway, or point out an expert in the department or outside who might be able to answer the question directly.

    For people who are inexperienced or new to the job, this is the best help you can give them. For slackers and people just looking for a shortcut, you need to stand firm or you will find yourself slipping to their level. Doing many things poorly won’t help anyone.

  4. Ask the requestor for help in making your help time available. Look for a win-win approach. For example, you both might visit a supervisor to re-prioritize your work, or you may even trade assignments. At minimum, you need to make sure that you get credit for your time and contribution, since most help requests tend to get forgotten by requestors.

    Ideally, a requestor will be happy to point out to a supervisor the need for additional training or resources, or will think twice before admitting that they can’t accomplish a task without help. You should be happy to now be recognized as a frequent requestee.

  5. Avoid using the word “no,” but humbly decline the request. Without emotion or a long-winded reply, a direct reply is the most effective – “I’d love to help you, but my time is already over-committed, so I can’t help you on this one.” It always helps to suggest a specific later time, such as come back tomorrow or give me another chance on Monday.

  6. Soften any delay or decline with a “thanks for asking.” Research shows that people pay more attention to how your conversation ends, rather than how it starts. Keep the conversation positive, and give the requestor your full attention, including body language. Showing frustration or anger may get you out of this request, but will hurt you later.

Remember, your first obligation is always to deliver your own work. Being viewed as a “yes” person does not make you a leader. As you look around you, the most respected leaders are most highly focused on their own goals and priorities, and are more productive in the long run. Taking on other people’s work won’t increase your job satisfaction or your productivity. Don’t do it.

Marty Zwilling

*** First published on Inc.com on 06/18/2019 ***

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Wednesday, July 3, 2019

7 Tips For Entrepreneurs Seeking A Balanced Lifestyle

Macy's_Independence_Day_FireworksI know some entrepreneurs with successful businesses, and others who seem to have a great relationship with their family, but I can’t think of many who have both. Some people would argue that these two successes are mutually exclusive, but I’m not convinced.

Individually, they both take focus, commitment, and a variety of skills, all the strengths of a good entrepreneur. Assuming a person wants both a family and a business, the challenge is to achieve a balance that can satisfy both. This July 4th Independence Day Holiday in the USA is a good time for all of us to do a reality check on our own efforts.

From my observational experience, as well as my personal struggles on both sides of this equation, here are some of the key parameters of that balance:

  1. Start with a solid family and business foundation. A successful business won’t lead to a great family relationship, and vice versa. Don’t assume that your focus will change once your startup gets past the initial struggle. Keep in mind that your loved ones often see your business enthusiasm and energy as negative reflections on them.
  1. Be realistic about what brings happiness to you. Many entrepreneurs, especially women, gravitate to entrepreneurship because they see it as the way to balance work and family demands. That could mean they are forgoing happiness on the business side. Some men want a family relationship, but the business is what makes them happy.
  1. Find fun things in and out of work that are high priority. These don’t have to be expensive or hard-driving activities like sports competition. They can be simple in nature, like being present for school engagements, or regular Friday night “date nites” with the spouse. Practice consistency with “fun” and “high priority” elements.
  1. Assess your ability to compartmentalize the two roles. Achieving a balance requires an ability to put aside the burdens of work at the end of the day, and giving your full focus to important relationships. Separation of work and home are fuzzy for an entrepreneur, and it’s easy to find yourself on duty 24/7. Can you find the off switch on your cell phone?
  1. Be accountable for decisions you make. Remember, as the entrepreneur you are in control, and the business is not. Don’t let the urgent crisis of the moment become the priority of your life, to the detriment of your balance. Keep in mind that the sacrifices you make for the business also impact your family.
  1. Say “NO” and “YES” with equal frequency in both roles. Be honest in how your decisions will affect others in either role. Be in control of your priorities. The first step is to track yourself on these responses. Most people don’t recognize that they may have a habit of being negative in one role, and positive in the other.
  1. Communicate well and often at your business, as well as with family members. You need to keep an open mind and listen effectively to people in your business, and to people who are in your relationships. Pay attention to body language, emotion, and time spent speaking versus listening. Talking is not communicating.

Most people consider entrepreneurship as a lifestyle, rather than a job. Being married is a lifestyle, and raising a family is a lifestyle. Recognize that it’s harder to balance two lifestyles than it is balance a job with your real lifestyle.

Also mixing business with pleasure is one thing, but mixing business with family yields an altogether different, and often volatile, dynamic. Running a family business or “FamilyPreneurship” is even more difficult, and can derail or splinter cherished relationships.

Before you conclude that entrepreneurship is your chosen lifestyle, make sure you understand the balance it will require, and make sure those around you are prepared to accept that balance. A failure in this regard will likely cause you some fireworks you hadn’t anticipated.

Marty Zwilling

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Monday, July 1, 2019

6 Elements of Customer Psychology Drive Buy Decisions

Customer-buy-decisionsMany entrepreneurs think that adapting to the new technologies, like smart phones and Internet commerce, are the key to attracting new customers. In fact, businesses need to adapt even more completely to the changes in the buying and social behavior of consumers. High-technology product startups, without customers, don’t make a business.

Today’s customer buying dynamics are all about “user experience,” according to Brian Solis, in his classic book “What’s the Future of Business?”. This thought leader in new media asserts that every business needs to understand social psychology and rethink their business models, approach, and relationships in order to create unique and memorable experiences for both customers and employees.

Solis outlines the heuristics of social psychology that are key to building positive customer experiences today. These begin with the following Cialdini’s Six Principles of Influence, which consumers use to make decisions, buttressed by results from various social media surveys he references in the book:

  1. Social proof – follow the crowd. During today’s dynamic customer journey, consumers often find themselves at a point of indecision. When uncertain of what to do next, social proof kicks in to see what others are doing, or have done. Survey results show that more than 80% of consumers now receive advice through social networking sites prior to a product purchase.

  2. Authority – the guiding light. Perceived authorities guide decision making, by investing time, resources, and activity in earning a position of influence, leading to a community of loyalists who follow their recommendations. Most consumers now research online product reviews, blogs, YouTube, Twitter, and Facebook, for authoritative guidance.

  3. Scarcity – less is more. Greater value is assigned to the resources that are, or are perceived to be, less available. Driven by the fear of loss or the stature of self-expression, consumers are driven by the ability to participate as members in exclusive deals. 3 out of 4 people like getting exclusive offers that they can redeem via Facebook or other sites.

  4. Liking – builds bonds and trust. There is one old saying in business that is still very true in this age of social media: People do business with people they like. We all have a natural inclination to emulate those we like and admire. Almost 50% of shoppers surveyed admitted to making at least one purchase based on a social media friend recommendation.

  5. Consistency. When faced with uncertainty, consumers tend not to take risks. Rather, they prefer to stay consistent with beliefs or past behavior. When these do not line up in the decision-making cycle, consumers feel true psychological discomfort. The result is that over 60% of online shoppers are brand loyal due to other online satisfaction data.

  6. Reciprocity – pay it forward. Perhaps the greatest asset in social capital is that of benevolence. We have an innate desire to repay favors in order to maintain social fairness, whether those favors were invited or not. Every month, over 25 billion pieces of content are shared on Facebook alone, with a major portion oriented toward reciprocity.

Social psychology in general deals with how individuals relate to one another. In today’s social networks, the social economy is defined by how people earn and spend social capital. Based on the commerce of actions, words, and intentions (or actions, reactions, and transaction), people build their own standing. Startups earn relationships and resulting stature the same way.

Another aspect of the social psychology of consumer buying today is the four stages where customers take actions that move them toward you or away from your startup. These are sometimes called the four moments of truth:

  • Zero Moment of Truth. The few moments before people buy, where impressions are formed and the path to purchase begins. It is that moment when consumers grab their laptop or mobile phone, and start learning about a product or service.

  • First Moment of Truth. This is what people think when they see your product and it’s the impressions they form when they read the words describing your product.

  • Second Moment of Truth. It’s what people feel, think, see, hear, touch, smell, and (sometimes) taste as they experience your product over time. It’s also how your company supports them in their efforts throughout the relationship.

  • Ultimate Moment of Truth. It’s that shared moment at every step of the experience that becomes the next person’s Zero Moment of Truth. This one is required to generating word of mouth, advocacy, and influence.

So for all you technologists, who routinely focus their resources on a great product (“if we build it, they will come”), it’s time to balance the business success equation. Learning how to craft and nurture great customer experiences around your product is critical. The future of your business these days depends on it.

Marty Zwilling

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Sunday, June 30, 2019

10 Keys To A Startup Surviving The First Five Years

frustrated-business-ownerThe “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. I often get asked about the real alternatives to bridge this valley, and there are some good ones I will outline here.

According to my experience and a this Motley Fool article, the challenge is very real, with around half of all new businesses no longer existing after five years. The problem is that professional investors (angels and venture capitalists) want a proven business model before they invest, ready to scale, rather than the more risky research and development efforts.

My first advice for new entrepreneurs is to pick a domain that doesn’t have the sky-high up-front development costs, like online web sites and smart phone apps. Leave the world of new computer chips and new drugs to the big companies, and people with deep pockets. For the rest of us, the following suggestions will help you survive the valley of death:

  1. Accumulate some resources before you start. It always reduces risk to plan your business first. That includes estimating the money required to get to the revenue stage, and saving money to cover costs before you jump off the cliff. Self-funding or bootstrapping is still the most common and safest approach for startups
  1. Keep your day job until revenue starts to flow. A common alternative is to work on your startup on nights and weekends, surviving the valley of death via another job, or the support of a working spouse. Of course, we all realize that this approach will take longer, and could jeopardize both roles if not managed effectively. Set expectations accordingly.
  1. Solicit funds from friends and family. After bootstrapping, friends and family are the most common funding sources for early-stage startups. As a rule of thumb, it is a required step anyway, since outside investors will not normally consider providing any funding until they see “skin in the game” from inside.
  1. Use crowd funding. The hottest new way of funding startups is to use online sites, like Kickstarter, to request donations, pre-order, get a reward, or even give equity. If your offering is exciting enough, you may get millions in small amounts from other people on the Internet to help you fly high over the valley of death.

  1. Apply for contests and business grants. This source is a major focus these days, due to government initiatives to incent research and development on alternative energy and other technologies. The positives are that you give up no equity, and these apply to the early startup stages, but they do take time and much effort to win.
  1. Get a loan or line-of-credit. This is only a viable alternative if you have personal assets or a home you are willing to commit as collateral to back the loan or credit card. In general, banks won’t give you a loan until the business is cash-flow positive, no matter what the future potential. Nevertheless, it’s an option that doesn’t cost you equity.
  1. Join a startup incubator. A startup incubator is a company, university, or other organization which provides resources for equity to nurture young companies, helping them to survive and grow during the startup period when they are most vulnerable. These resources often include a cash investment, as well as office space, and consulting.
  1. Barter your services for their services. Bartering technically means exchanging goods or services as a substitute for money. An example would be getting free office space by agreeing to be the property manager for the owner. Exchanging your services for services is possible with legal counsel, accountants, engineers, and even sales people.
  1. Joint venture with distributor or beneficiary. A related or strategically interested company may see the value of your product as complementary to theirs, and be willing to advance funding very early, which can be repaid when you develop your revenue stream later. Consider licensing your product or intellectual property, and “white labeling.”
  1. Commit to a major customer. Find a customer who would benefit greatly from getting your product first, and be willing to advance you the cost of development, based on their experience with you in the past. The advantage to the customer is that he will have enough control to make sure it meets his requirements, and will get dedicated support.

The good news is that the cost for new startups is at an all-time low. In the early days (20 years ago), most new e-commerce sites cost a million dollars to set up. Now the price is closer to $100, if you are willing to do the work yourself. Software apps that once required a 10-person team can now be done with the Lean Development methodology by two people in a couple of months.

The bad news is that the valley’s depth before real revenue, considering the high costs of marketing, manufacturing, and sales, can still add up to $500K, on up to $1 million or more, before you will be attractive to angel investors or venture capital.

In reality, the financing valley of death tests the commitment, determination, and problem solving ability of every entrepreneur. It’s the time when you create tremendous value out of nothing. It’s what separates the true entrepreneurs from the wannabes. Yet, in many ways, this starting period is the most satisfying time you will ever have as an entrepreneur. Are you ready to start?

Marty Zwilling

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Saturday, June 29, 2019

10 Ways To Make Your Business Memorable With A Story

Chad-Hurley-YouTubeThe entrepreneur’s challenge is to effectively communicate their value proposition, not only to customers, but also to vendors, partners, investors, and their own team. Especially for technical founders, this is normally all about presenting impressive facts. But in reality facts only go so far. Stories often work better, because humans don’t always make rational decisions.

Most people care the most about the things that touch, move, and inspire them. They make decisions based on emotion, and then look for the facts that support these decisions. Thus it behooves every entrepreneur to learn how to craft stories from their personal experience and the world at large that make an emotional connection, as well as tie in the facts.

I like the point from the classic book “Tell to Win: Connect, Persuade, and Triumph with the Hidden Power of Story,“ by Peter Guber, a thought leader on this subject and long-time business executive. He asserts that everyone today, whether they know it or not, is in the emotional transportation business, and compelling stories are the best way for you to move your business forward.

More importantly, he provides the insights and guidance that we all need to do this effectively. I have extracted these ten basic principles for telling the right story, at the right time, and telling it right:

  1. Select the right story for the right audience. The most successful story tellers are also attentive story listeners. They understand that it’s more important to be interested in their listener than to appear interesting. What does the audience want and need? Armed with this insight, you can tailor a story that will achieve both your goals.
  1. Choose when the listener will be receptive. Getting to know your audience also means figuring out the place and time where they will be most receptive and least subject to interruption or distraction. They need to be able to give you your full attention, so you need to look, listen, and locate their optimal context.
  1. Finding the source material for good stories. The key is not to expect to find a story fully born, perfectly framed, and read to be told, but to constantly stockpile fragments and metaphors that have the potential to become stories. The most effective story material comes from firsthand experience, infused with your personal feelings and emotions.
  1. Make sure your call to action resonates. Every story needs something that will move the audience emotionally to hear your call to action. This may mean finding a hero or a villain in the story, showing your real passion and emotion, or describing the excitement and fear of others.
  1. Get in the right state for your story. Getting in state isn’t just a mental, emotional, or physical process; it’s all three. This state is vital to telling a story because reading your intention is what signals listeners to pay attention to you. Intentions speak louder than words. Train both your body and your mind on your clear intention to succeed.
  1. Tell the story with authentic contagious energy. Like intention, authenticity and energy cannot be faked. If you are telling a story you don’t believe in, your audience will sense it instantly. The good news is that they will pick up just as instantly on your genuine enthusiasm and conviction.
  1. Demonstrate vulnerability and perseverance. Everyone has something in common with every other person, so open up and expose your fears and concerns, allowing others to do likewise. The trick to perseverance is not to eliminate fear, but to use it to ramp up your energy, heighten your passion, and intensify your sense of urgency.
  1. Make the story experience interactive. You can make any business story more memorable, resonant, and actionable by asking for input or a response during the story, or getting an emotional interaction. Engage the audience physically or verbally, which makes them feel like part of your story, and that they have a stake in the outcome.
  1. Engage the senses of your audience. Scientists tell us that words account for only the smallest part of human communication. The majority is nonverbal, more than half based on what people see and more than a third transmitted through tone of voice. The more the audience feels the story in their bodies, the more positive they will react to it.
  1. Listen actively with all your senses. Even when you make the story a dialogue, rather than a monologue, how you listen as a teller is as important to your success as the actual words you speak. You must listen to gauge emotions, attention, and interest – moment to moment. More engaged listeners will be more likely to heed your call to action.

Examples of great storyteller entrepreneurs include Howard Schultz, founder of Starbucks, and Chad Hurley, founder of YouTube. Both demonstrated many times the ability to turn “me” into a “we,” by being able to tell a story that shined the light on an interest, goal, or problem that both the teller and the listener shared. That connection ignited empathy, secured trust, and gathered commitment to the call to action.

Stories have been used since the beginning of time to share knowledge, history, and ideas. Sure they contain facts, but often emotion is what makes them work. How often do you get beyond the facts in your pitch to customers and investors? If you want to kick your business up a level, maybe it’s time to add some stories to your message.

Marty Zwilling

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Friday, June 28, 2019

5 Keys To Business Culture That Are Counter-Intuitive

Positive-business-cultureIn the popular press, it’s easy to find articles that will convince you that companies with a good culture, such as Google, do it by lavishing perks and benefits, including some combination of free meals, trips and parties, financial bonuses, gyms, and a dog-friendly environment. These things are clearly good for morale, but its not so clear that they translate into a competitive advantage.

In my own years of experience as a business advisor, improving the company culture is still a major challenge to company leaders, many of whom were raised in a different era, or struggle trying to balance the rising costs of perks and benefits against measurable growth in productivity and profits. They are still looking for key leadership feedback that culture is driving their business.

I was pleased to find some specific guidance in this regard in a new book, “Five Frequencies: Leadership Signals that turn Culture into Competitive Advantage,” by the team of Jeff Grimshaw, Tanya Mann, Lynne Viscio, and Jennifer Landis. These authors present 20+ years of research, including case studies and metrics, showing how culture really makes or breaks your business.

I have found that while many of their lessons may seem obvious, others are not so intuitive. Here are a few that I found insightful, and consistent with my own observations:

  1. Heated debates are a good thing for a healthy culture. I don’t encourage conflict for its own sake. But I’ve learned that heated debate is a good thing, when you are not afraid to voice dissenting opinions and able to understand opposing views. It creates ownership and engagement that may be missing with consensus decisions or management edicts.

    To make sure all debates stay healthy, always make sure the discussions are facilitated and limited in scope and time, to prevent wandering off subject and redundancy. Disparagement of a team member’s character is always inappropriate and toxic.

  2. Leaders own culture, supported by HR – not vice versa. Human Resources and other support functions can provide invaluable feedback and support, but if you count on them to move the needle on culture, it won’t work. Leaders must initiate and model culture shifting efforts – it’s not something you can delegate.

    HR leaders are your culture coaches, and responsible for aligning managers and employees with the desired culture. They can foster a sense of ownership for the culture, measure progress, and assess accountability throughout all levels of the company.

  3. What the team feels is more important than what they know. One of your most important culture responsibilities is making your employees feel truly valued on a regular basis despite internal fears and conflicting feedback from their peers. Feelings are known to statistically produce the biggest impact on future performance, as well as morale.

    Knowing things intellectually is easily overridden by emotions, even in the best of times. In addition, most business knowledge, such as the reason for a lost sale, is subject to interpretation. A positive culture of trust is required to neutralize uncertain feelings.

  4. It’s easier to go from bad to good, than from good to great. When things are bad and failure is not an option, leaders really focus on doing the right thing. But when a great culture is a desire rather than a must have, it’s easy to get distracted by other things, such as operational improvements. During these periods culture often is lost.

    The famous author, Jim Collins, in his Good to Great discussions, points out that you as the driver can only go so far, without the right people in all the key seats. Getting those key people, including hiring, training, and coaching takes a long time to accomplish.

  5. Ongoing culture steps require tuning of measurements. All your efforts to improve the culture may be moot if you don’t continually hone your ability to measure results and respond to feedback. Nothing frustrates employees more than continuing to provide the same feedback time after time in engagement surveys while nothing appears to change.

    For example, the questions on your engagement survey will surface the initial set of challenges, but once those are addressed, you need different questions to get to the next level. Measuring and tuning culture is an iterative process, integrating business results.

The overall approach to culture change that I and the authors recommend is to first assess your current culture for a liability, or a competitive disadvantage. Start with addressing specific things that your team needs to more consistently know, feel, and do. I assure you that when you measure and strengthen culture along these lines, better business performance follows.

Marty Zwilling

*** First published on Inc.com on 06/14/2019 ***

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Wednesday, June 26, 2019

5 Reality Checks On Running A Charitable Organization

Charitable-organization-startupA common misconception I often hear in the startup world is that non-profits are easy and safe, since they don’t have to pay taxes, and they don’t have to make a profit for their shareholders. In reality, from the feedback I get from non-profit executives, exactly the opposite is true.

Technically speaking, in the United States, a non-profit corporation or association is one which has been exempted from Federal income taxes by meeting the criteria set out Section 501(c) of the Internal Revenue Code, most notably religious, educational, and charitable entities like the Salvation Army. Other countries have similar exemptions for similar organizations.

Yet even a non-profit has to make a profit on everything it sells, in order to cover operating expenses (salaries, offices, equipment, research, travel, etc.), unless it relies wholly on donations. Even then, the business and leadership efforts to solicit and manage donations cost real money, and may be more difficult than the marketing and sales jobs of most startups.

Here are the common reasons I hear that make starting and running a non-profit actually more difficult than starting and running a conventional business:

  1. Creating a non-profit 501(c) business is a long and arduous process. You can start an LLC for-profit in less than a month, often for less than $100. A non-profit 501(c)(3) status requires filing IRS Form 1023. For a serious entity, the form must be accompanied by an $850 filing fee, and may take as long as two years to complete successfully.
  1. Investors are not interested in non-profits. Even non-profits usually require startup funds for facilities, people, and inventory. But because they can’t project excellent returns on investment, no investors will likely be interested. Also, they can’t sell shares on the stock exchange to raise money, even though both the NYSE and Nasdaq are non-profits. That means they need to grow organically, or find a philanthropist.
  1. Reputable non-profits need to keep their operating expenses low. This usually means keeping wages low, and no fancy facilities. Thus it’s hard to attract top-notch talent, premium locations, and first-class marketing campaigns. Managing volunteers, and running any organization with these constraints is a challenge.
  1. Results are always subject to public scrutiny. Most startups, as private companies, don’t have to disclose their salaries and spending habits to anyone other than the IRS. Non-profits have to answer to watchdog organizations like Charity Navigator for how much of their proceeds actually make it to the causes they proclaim to support.
  1. Some laudable non-profit missions are hard to sell to supporters. A common complaint from many non-profits is that both government and private funders would rather spend their dollars on ‘sexy’ causes such as children’s charities, cancer, and heart disease, rather than long-term causes like global warming and erasing hunger in Africa.

Unfortunately, misuse scenarios, like the lavish lifestyles of leaders and scams, have given the non-profit environment a bad name, making things even tougher. Even reputable organizations, supporting veterans, the police, firefighters or children, often raise eyebrows, with alarming real data like these from the America's Worst Charities report on a popular activist news website:

  • Kids Wish Network – 2.5% distributed cash aid from $137.9 million collected
  • Breast Cancer Relief Foundation – 2.2% distributed cash aid from $63.9 million collected
  • Firefighters Charitable Foundation - 7.4% distributed cash aid from $62.8 million collected
  • National Veterans Service Fund - 7.8% distributed cash aid from $70.2 million collected
  • Children’s Cancer Fund - 4.6% distributed cash aid from $43.7 million collected

These numbers vividly show that non-profits with good causes can fail to achieve satisfying results, in the same way that for-profit startups often fail, even with good products. Despite these challenges, my advice is still to follow your heart and your passion when starting a business.

You shouldn’t choose a non-profit, or a for-profit, because one seems easier, or one can make more money. Do it because you love the cause, the service, or the product, and the challenges will get lost in the satisfaction and results you achieve along the way.

Marty Zwilling

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Monday, June 24, 2019

9 Keys To Effective Communication In Today’s Business

Bulletin-Board-List-Business-StickiesWhen was the last time you changed how you communicate to your team and to your customers? The way you deliver your message is key to maximizing its impact, or even reaching the intended audience. Don’t count on people reading your Annual Report for breaking news. Your team needs to hear from you on a regular basis, on a channel they can relate to easily and quickly.

Thus, top business leaders now deliver requests to their team via text messages, and even expect updates from top national leaders via Twitter. As a business advisor, I still find owners and entrepreneurs who have never sent a business text message, written a blog, or produced a small video to update their constituents, or highlight a key message.

If you know someone in this category (including yourself), here are some key principles, from my own experience, that you can help me pass along for the benefit all of us:

  1. Every message must be keyed to your expected receiver. The limited channels for delivering a message have exploded in recent years, with social media, the Internet, and smartphones. Your team and customers will judge you by how timely and effectively you deliver the message. For example, I find that millennials rarely read emails or policies.

  2. Use professional wording and tone in all business messages. Even with the new channels, don’t forget that business is not casual for your constituents. Skip any urge to use abbreviations, slang, or emoticons. Make the context clear, and keep the content on point. People still expect separation between business and personal relationships.

  3. Build a communication culture of engagement and participation. The days of command and control are gone, and you can’t depend on your title and the management hierarchy to amplify and relay the message. For example, messages are better delivered these days via informal weekly “town hall” meetings, rather than official CEO updates.

  4. Minimize the use of meetings to communicate. Employees already spend up to 70 percent of their day in meetings, so meetings should be minimized and reserved for two-way decision-making opportunities, rather than delivering a message. With modern tools, you can deliver messages in a much more palatable format, without lost productivity.

  5. Use every message as an opportunity to highlight people. Everyone listens to messages where they expect to see and hear team members get recognized and rewarded. Even if you have bad news to deliver, try to couch it in the context of some positives and extraordinary effort. Always talk to the people, rather than about them.

  6. Remember, your actions speak louder than your words. It’s more important than ever that you be visible and approachable. Your team wants to feel comfortable that your actions are consistent with your message, and you are empathetic to their needs and feelings. Even customers these days expect to see and hear you online and in public.

  7. Pack each message with focused value to the recipients. People lose interest quickly receiving generic or irrelevant messages. Make sure every message you deliver is factual and valuable to your audience, and delivered in a compact and relatable fashion. Don’t try to pack multiple important messages into a single communication.

  8. Always communicate as a person, rather than a business entity. Real engagement depends on your team’s understanding of your commitment to them and what the business goals mean to you. Business names and brands are important from a marketing and consistency standpoint, but insiders, and even customers, want to be part of a family.

  9. Follow-up your message delivery with a question opportunity. By asking people for a personal perspective, or questions, you show inclusiveness and concern for people. In addition, their feedback and questions give you important information for follow-up and future actions. Overall, this is important to maintain engagement and relationships.

New communication tools have made great leaps forward in utility and potential impact, just like products. In addition, modern business leaders have raised the bar on employee and customer expectations. Just as you regularly update your products and processes, you need to enhance your communication style and tools to maximize your leadership. Your success depends on it.

Marty Zwilling

*** First published on Inc.com on 06/11/2019 ***

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Sunday, June 23, 2019

6 Clues To The Right Employees For Your New Venture

job-interview-innovationEntrepreneurs are usually highly creative and innovative, but many innovative people are not entrepreneurs. Since it takes a team of people to build a great company, the challenge is to find that small percentage of innovative people, and then nurture the tendency, rather than stifle it.

A few years ago I read a classic book “The Rudolph Factor,” by Cyndi Laurin and Craig Morningstar, which is all about finding the bright lights that can drive innovation in your business. The story most specifically targets big companies, like Boeing, but the concepts are just as applicable to a startup with one or more employees.

The core message is that real innovation and competitive advantage are more people-based than product or process-based. Every good entrepreneur needs a people-centric focus to ferret out creativity and innovation in his team, and to build a sustainable competitive advantage.

The authors observe that people who behave as mentors tend to have an uncanny ability to recognize and nurture people who have innate capabilities along these lines. Here are six of the characteristics they and you should look for:

  1. Problem solvers. Innovators are naturally creative and love new challenges. Some may appear a bit eccentric to people around them. They generally promote unconventional ways to solve problems and have an easier time than most at identifying the root cause of a problem.
  1. Passionate and inquisitive. These team members are passionate about their work and light up when talking about their role or a particular project they are working on. They often ask “Why?” even when it is not the most popular question to be asked.
  1. Challenge the status quo. They believe that questioning is of value and benefit to the organization. This is also how they discover what they need in order to solve a problem, so they aren’t rocking the boat just for the sake of rocking the boat.
  1. Connect the dots. Innovators have the ability to quickly synthesize many variables to solve problems or make improvements. To others, it may appear as if their ideas come out of the blue or that there is no rhyme or reason behind their thinking.
  1. See the big picture. They tend to be natural systems thinkers and see the whole forest rather than a single tree … or just the bark on the tree. They may express frustration if people around them are having conversations about the bark, rather than the forest.
  1. Collaborative and action oriented. They are not loners, and have the ability and confidence to turn their ideas into action. They act on their ideas, sometimes without knowing how they will accomplish them. The “how” is always revealed in time.

Your challenge is to go forth with this new awareness and thinking, to find and mentor those bright lights that will drive innovation and competitive advantage. The next step after finding innovators is to integrate them into your team. A key aspect is establishing a team-based culture that is a safe environment to share and execute ideas.

In fact, this safe and nurturing environment has to extend beyond a single team to the highest levels of the organization. It should embody a style of leadership that is essentially a commitment to the success of the people around you. That opens the door for anyone in the organization to lead from where they are, rather than waiting for management to “do something.”

Innovation is at the very heart of every successful startup. Everyone wins when you look at things very differently and wonder “why”, not “why not.” What better way to extend this power than to surround yourself with more highly creative people? Then you can make the world a place of possibilities, as well as probabilities.

Marty Zwilling

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Saturday, June 22, 2019

5 Keys To Growing What You Have Planted As A Startup

marketing-community-gardenHave you noticed that more companies beg you to participate in their business today? It started with an email survey on your last stay at their hotel, but now includes requests for online product reviews, to social media input on the design of future products. They do it because engaged customers become loyal advocates and buyers. Welcome to the “Participation Age” of marketing.

Some say it’s happening today because it’s new, and technology makes it possible. Others say it stems from Intrinsic Motivation Theory, which asserts that people have always been motivated by a desire to join, share, take part, connect, and engage, and find that experience rewarding. In any case, your business needs it today to rise above the crowd and edge out competitors.

If you want all the specifics, you must follow the new wave of marketing experts, like Daina Middleton, and her classic book “Marketing in the Participation Age.” I’m most intrigued by one aspect that I believe relates to every business - the move from a hunter-based metaphor to a gardening metaphor – nurturing what we have planted, based on the following five rules:

  1. Embrace test-and-learn values. That means constantly trying new marketing elements, understanding quickly what works, and immediately scaling, then moving on to the next alternative. Nurturing marketers reserve a minimum of 10 percent of their marketing budgets for testing and learning. It’s a dynamic customer environment out there.
  1. Innovate; don’t perfect. The nurture approach leverages from the best of the moment, quickly adding value before someone else does it first. The concept of continual innovation is crucial, because the best may not last long. Pick something that is good enough and embrace the flaw as an opportunity to learn. Adapt quickly and move on.
  1. Act quickly and motivate others, including participants, to act on your behalf. Motivate people, including your customers, to do something to improve your marketing today. Inspire your organization to act quickly and create an environment that rewards moving quickly. Estimate and act; because if you don’t, your competitors will.
  1. Mix and blend; don’t invent. Partner with others to create unique solutions that might benefit your brand, product, or solution. Choose an agency partner who is pushing the envelope and remember to consider technology, media, and creative opportunities. Look for elegant blends of all three, not an elegant single media solution.
  1. Embrace risks and champion failures. Prepare to learn from mistakes and accept that failures are inevitable in finding success. Partner with agencies that are willing to put skin in the game and get paid only if they deliver results. It often takes several failures to find opportunities that yield the best results.

In the current world of escalating change and information overload, marketing is not a luxury, and participative marketing can be the key to success, even for very technical solutions. We often see a mediocre product with effective marketing outperform a good product with little or poor marketing. Big marketing budgets alone and single blockbuster campaigns don’t assure results.

The message is simple. Ask your customers and partners for ideas, try them all, measure results, and scale up the ones that work. The participants, not the marketers, are in control, and they are demanding a relationship, not just a marketing message. If they don’t find value in the relationship, they move on. The choices and opportunities are theirs.

The situation is not unlike the attraction of current major social media sites, like Facebook, successful multiplayer game sites, like Activision, and today’s real world sports and politics. Gen-Y members were born participants, and they are a major force in every business domain. People thrive on continually learning, feeling empowered, and providing input to the world they live in.

So if you are a startup, or even a mature business, you need to nurture these intrinsic desires and develop more meaningful customer relationships that yield greater revenues. Marketing is no longer a one-way conversation. Does your marketing include listening as well as talking?

Marty Zwilling

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