Saturday, November 30, 2019

10 Early Business Strategies That Can Lead To Failure

ManagementLeadershipStarting a new business is a serious undertaking. Yet many aspiring entrepreneurs I know approach it as a fun project, get-rich quick scheme, or perhaps an expensive hobby. Others quit their day jobs and commit everything to their new passion, without regard for their own well-being, or the welfare of others around them. Neither of these approaches bodes well for success.

As an entrepreneur, you need to start early to implement the discipline and business practices that will lead to success. Even though everyone has an opinion on good early stage practices, I was impressed with the actionable blueprint in the classic book by Scott Duffy, “Launch! The Critical 90 Days From Idea To Market,” on the first steps that determine long-term success.

Duffy emphasizes the often overlooked personal side of entrepreneurship, including balancing finances, relationships, and your health. I will paraphrase here, based on his book, ten of the top failures we both see in the early stages of entrepreneurship, followed immediately by recommendations to mitigate losses from each of these items:

  1. Take the largest risk to get the biggest return. Startups always involve risk, but should not be risky. Every business move should be planned and well thought out, with milestones set in advance. Processes should be in place to ensure that even if something does not go as planned, you, your family, and even your job are secure.
  1. Let your passion drive your cash flow projections. Moderate your optimism. That means coming up with revenue and expense assumptions that balance your natural optimism and determine how much cash the business will really need. Then take your revenue projections and cut them in half. Now take your expenses and double them.

  1. Your idea will attract the funding you need. Assume that raising money from investors to get started will be difficult, unless you have a track record in business, or friends with deep pockets. Will key funding be your family’s entire nest egg, or just half? Are you going to bootstrap, or borrow from personal assets?

  1. Pretend your family doesn’t matter. Discuss the plan and the costs with your spouse or significant other. It’s essential that the two of you be in agreement on key milestones and how much to put on the line. It is better to risk less and be on the same page than to risk more and have your spouse worried and resentful day after day.

  1. Mix personal and business funds. Put your risk capital into a separate checking account before you start. Once you see it moved from your savings account to an account tied to risk, it becomes real. You now have a clear financial framework to help you make better decisions, and you will act more strategically, less impulsively.

  1. Use personal credit cards for business. Keep your personal credit cards separate from the business. You need to do this as a way of tracking, accounting, and leveraging business payments and expenses for tax purposes. Never commingle personal and business funds. Remember that credit card cash advances are very expensive loans.

  1. Keep business expenses in the bottom desk drawer. Hire a bookkeeper or setup a QuickBooks chart of accounts on your first day in business. If you don’t set up a system early, you will spend tremendous amounts of time and energy going back trying to reconstruct business transactions, for you, your investors, and tax preparers.

  1. Don’t formalize the business until you get revenue. Have an attorney set your business up as a Corporation, by the books, before the first transaction. We live in a very litigious society, so you need to at least protect yourself from liability. Set aside money to create a proper legal entity and get business insurance. It is not just about you.
  1. Strive for success before thinking about your own payback. Being unprepared for success is the fastest way to lose your first million. It is important to constantly expand your understanding of how investments work, so that as your business grows and spills off cash, you are able to manage personal profits.

  1. Hedge your bets by starting several initiatives or products. Decide to launch one business or product at a time. The best route to success is not to spread your energy and focus on ten things, hoping one will work. Give that one focus everything you’ve got, or you will likely not have the resources to anything well.

Obviously, avoiding all of these errors won’t guarantee success and won’t save you if you don’t have a viable offering or a viable business model. Being an entrepreneur may start with passion and an idea, but turning that idea into a great business is all about smart execution. Don’t let a million dollar idea turn into a million dollar loss, for lack of proper discipline, personal balance, and business execution.

Marty Zwilling

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Friday, November 29, 2019

6 Hard Questions That Every Entrepreneur Must Answer

Hard-entrepreneur-questionsAs a mentor to many aspiring entrepreneurs, I challenge them to think beyond what I call linear extensions to a current trend, such as another “easier-to-use” app for smartphones, a new dating site for pets, or another niche social network. In my experience, these startups usually find the field crowded with competitors, making it hard to get any attention, and most drift into obscurity.

On the other end of the spectrum are ideas that truly represent a disruptive technology, or could lead to real social or environmental change. Examples I have seen include atomic battery technology, or how marine algae could help feed the world. Unfortunately, all of these may be fraught with high technical risks and political change required, which also often leads to failure.

Obviously, where you need to be is somewhere in the middle, and certain that you are the right person with the right resources to win. I encourage every entrepreneur or new business owner to ask themselves a set of hard questions to validate their idea and fit, before they put their heart, much hard work, and money on the line. These questions should always include the following:

  1. How realistic is your business opportunity today? Your idea may indeed be a worthy cause, like feeding the hungry, but hungry people rarely have any money, and third-world governments are not a viable market. On the other hand, if you can find ten or more similar existing competitors, your chances of being found by even a large market is small.

  2. Why doesn’t this product or service already exist? The right answer to this question is that you bring some new intellectual property to the table – like a patent or other secret sauce. After years of working with smart entrepreneurs, I’m convinced that most good ideas have already been tried, and you need to focus on your unique execution potential.

  3. Do you have the resources to build a business? Building a product, as well as a business, takes money and people. Do you have the skills and interests to overcome problems, lead people, and find partners and funding? Most businesses require a team of people with diverse skills, all with a success mindset and commitment to common goals.

    In the real world, evidence indicate the vast majority of new ventures are self-funded, or bootstrapped. Attracting external investors takes much time and effort, and forces you to pay home to their interests. In all cases, people management and leadership are key.

  4. Should this be a non-profit or for-profit business? The difference relates to how you expect to get funding. Traditional investors are not interested in non-profits, no matter how good the cause, since there will be no financial return on their investment. Non-profits rely on philanthropists and donors. Also evaluate the values of desired customers.

    In my experience, non-profits are also harder to run and grow, since money is always short, internal salaries and skills may be low, and the customer set is often driven by emotional decisions rather than financial value. Great social entrepreneurs are rare.

  5. What will you do if you get no traction on this idea? Smart entrepreneurs think proactively about a “Plan B” or obvious pivot before a crisis and they are out of money. This will incent earlier thinking outside the box, and help you get metrics in place to track progress, or lack of it, along the way. Keep alternative business models on the table.

    For example, if you have a new calendar-scheduling app, it would be tempting to target consumers as your primary market, because there are so many of them, compared to businesses. Yet business have real budgets and a clear need, so may be easier to sell.

  6. Why are you the right person to do this now? No matter how great the potential, if you are starting a business for the wrong reason, failure is likely. The right reason would be to bring value to customers, with a strong conviction that you are uniquely qualified to make it happen. Think twice if you are trying to escape a problem, get rich, or satisfy others.

Of course, there are no magic formulas for entrepreneurial success, since every new business inherently has many unknowns. My goal is to give you a way to bound these risks, and perhaps be better prepared with some alternatives. More success is better for all of us – business owners, investors, and certainly customers.

Marty Zwilling

*** First published on Inc.com on 11/15/2019 ***

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Wednesday, November 27, 2019

7 Tips For Building Millennials Into Next-Gen Leaders

Kathy_Ireland,_Warren_Buffett_and_Bill_GatesMillennials have come a long way in business since I started writing about them nearly ten years ago. They started out as that spoiled generation of kids, born between about 1982 and 2004, who had everything, and could care less about business. Today they are in every business, and will likely comprise 50 percent of the workforce by 2020. Their success is now vital to our success.

Like all of us, they have matured tremendously in the last decade, weathering a recession where there were few jobs waiting as they emerged from school, to finding that living with their parents was no longer a panacea for all problems. What they need now is some coaching from more experienced business leaders, to catch up and overcome some unique qualms and challenges.

As a partially-retired baby-boomer in business, I’ve spent much of the last few years mentoring aspiring millennial entrepreneurs, and I’m always looking for more insights into how to help them. I defer to a classic book on this subject, “Millennials Matter,” by Danita Bye, which helped me to solidify some jointly recommended strategies for building millennials into next-gen leaders:

  1. Help them strengthen character by finding balance. This balance of character and courage is fundamental to a leader’s confidence, and is the key to getting results. Millennials need our coaching and mentoring to build confidence, to improve how they handle business relationships, tackle new responsibilities, and handle leadership roles.

  1. Build more determination by capitalizing on values. Determination is the character quality needed to fuel resoluteness and resiliency as millennials face business realities. They generally have strong values, around a higher purpose, and these need to be supported and honed to improve emotional stamina and guide business decisions.

  1. Activate a broader awareness of real-world drivers. In addition to the normal hurdles of growing up, millennials have had to deal with a media-saturated world of conflicting messages, celebrity excesses, and viral distractions. We can help them focus thinking inward to their strengths and personality, and outward to real forces in the marketplace.

  1. Provide deeper knowledge to solidify moral fiber. A better understanding of how things works will boost moral fiber. Lack of knowledge can prevent it. A strong moral fiber is the key to acting responsibly, reacting to ethical dilemmas, predicting the intended and unintended consequences of any business decision, and guide toward wiser actions.

  1. Nurture a realistic optimism for overcoming obstacles. Many millennials have grown discouraged or fatalistic about all the uncontrollable issues in our world, such as debt, terrorism, global warming, and a rocky political landscape. We need to focus their attention on what they can control to improve morale, creativity, and a positive mindset.

  1. Be a role model for integrity to validate trustworthiness. Millennials are slow to trust business leaders, since many trust scandals hit during their impressionable years. Thus it is critical that trustworthiness and truthfulness be demonstrated for and nurtured in young leaders. A driving force in trust is showing integrity and concern beyond yourself.

  1. Demonstrate positive action and accountability. Accountability means having the emotional maturity and internal backbone to take responsibility for your own actions and choices, and not shift blame to external factors. Business leaders and mentors must highlight their own focus on positive leadership actions, instead of defensive reactions.

Think of these strategies as an investment in your own future, as well as theirs. The end goal is to inspire them to invest in others, and to make a positive difference as well as a lasting impact. Each of us must us must use our wisdom and life experiences to show millennials, as our next-gen leaders, that they also have enormous wealth to share that goes far beyond monetary value.

Marty Zwilling

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Monday, November 25, 2019

8 Work Trends Driven By New Ventures And Competition

Trends-work-2019The new era of highly connected and interactive technology is changing not only how business employees interact with customers, but also how they interact with each other, and with their company. I am happy to see reports that young companies are leading the way in these trends, on both the customer and the employee side. Both are required to stay competitive.

Much has been written about the trends on the customer side, but I find less specific guidance on the changes which are impacting the way we interact with peers at work. An exception is the classic book by Alison Maitland and Peter Thomson, “Future Work: Changing Organizational Culture for the New World of Work,” which offers some real insight on this subject.

They point to several key trends in organizational cultures and working practices that can boost output, cut costs, and give employees more freedom. I have added my own insights, based on my experience advising and working with entrepreneurs and startups:

  1. Pay for results, rather than pay for work. Measuring results in itself is not new. What is new is the trend and mentality to just look for results and ignore other traditional management constraints, like the amount of time spent. When and where you do the work does not matter; producing the outcomes to the right quality on time does.

  1. Reward shorter hours of high productivity. People who get paid by results have every incentive to think up smarter ways of getting work done. Their reward is more free time for leisure, or more time for bonus objectives and stock options. It does not mean the culture is soft or lacks discipline. Peer pressure keeps productivity standards high.

  1. Encourage people to work where and when they are most productive. People concentrate better if they can work at least some of the time in a quieter location, or escape the stress of a long commute. Trusted to get on with the job, people tend to be more motivated to do so, especially if they gain more rewards as a result.

  1. Bring your own device to work (BYOD). An increasing number of startups are adopting a BYOD policy, realizing that individuals have their own preferences in the way they access data, collect emails or ‘chat’ to colleagues. Computers are no longer stand-alone dedicated devices, but are built into personal devices, like phones and tablets.

  1. Use of collaborative and other social media platforms. In startups, and even corporate environments, I see the spread of collaborative social platforms such as Slack and Trello. Customers and clients are already on LinkedIn and Facebook, so it makes sense to go where they are, rather than limit your team at work to internal systems.

  1. Explore benefits of employing “mature” workers. Current surveys and case studies show that the more mature workers are just as productive as their younger counterparts, are just as successful in training, take less short-term time off, and offer better judgment based on years of experience. They are now actively recruited for many roles.

  1. Mobility and connecting to work via the ‘cloud.’ Virtually every collaboration platform and mainline business process today has a cloud-based deployment option. This follows the ‘work from anywhere with any device’ trend, gives everyone the freedom to work more productively, and not be forced into an outdated standardized solution.
  1. Trend to a ‘contingent’ workforce. Work is becoming more of a tradable commodity, rather than a job, with freelancers and independent contractors, according to recent data. In the U.S., 57 million workers identified themselves as freelancers in 2019, up 4 million since 2014. Freelancers now make up 35% of U.S. workers and earned $1 trillion last year.

Certainly, there is still much work to be done in finding the balance between physical gatherings of team members in the same place at the same time, versus remote working and remote collaboration. The announcement by Yahoo back in 2013, pulling home workers back into the office, triggered a debate on whether some new companies have gone too far.

Overall, as an entrepreneur, you just need to be aware that the notions of work are changing just as fast as the technology for products. It’s an opportunity for innovation that cannot be ignored as a success and competitor differentiator. When was the last time you applied real innovation to the work model in your business?

Marty Zwilling

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Sunday, November 24, 2019

10 Steps From A Closet Freak To A New Venture Founder

tom -eyeball bath bombsEvery culture and community puts pressure on its members to follow the norms. Even young people who start out wanting to be different are called “freaks,” and most are slowly bent back into the norm by the time they “grow up.” Maybe that’s why so many entrepreneurs struggle with building a disruptive new business, where breaks from the norm are the key to success.

I suspect that there are really a lot of “grown-up closet freaks” out there who could be great entrepreneurs. We should really be enticing them to overcome their fears of thinking differently. Chris Brogan, in his classic book, “The Freaks Shall Inherit the Earth,” offers some great steps of encouragement for them on how to come out of the closet, some of which I will paraphrase here:

  1. Declare your freakiness (even if only to yourself). Get comfortable with your difference in thinking, and commit to run your business your way. You will be the best entrepreneur when you make your new startup personal, and keep your heart in mind along the way.

  1. Define the parameters of your own success. Whatever will make your success yours, list it out on paper on in your favorite note-taking software. Try to list a success criteria for each role that’s important in your life and for your success. Know your strengths, and learn some new skills. Start working on your weaknesses.

  1. Establish a daily framework for action. You will build discipline and get much more accomplished if you build a self-imposed schedule, and commit yourself to following that framework. This will lead to you defining your path, knowing what matters most to where you are at this moment, and facilitate planning where you are going next.

  1. Get comfortable with not knowing. Learn to be okay with the unknown, and learn how to really appreciate what comes next in the universe. Don’t be afraid of being dumb; always be willing to ask questions. You should be afraid of being stupid; being stupid means that you think you know everything and don’t ever ask questions.

  1. Appreciate obstacles and challenges. One way to overcome obstacles is to set a new challenge for yourself every day. The more challenges you face daily, the stronger you will feel about doing more with your business and your life. Obstacles and challenges help you to grow your intestinal fortitude and your skill sets.

  1. Create work processes that get things done. Similar to the framework step, you have to build systems that get the right work done. For example, you might block your working day into half-hour segments, and never allow any activity or meeting to take too much of your time. Reserve time for tasks important to you, rather than just urgent to someone.

  1. Expand your communication media world. Start wherever you can to grow beyond the phone, texts, and email, to a blog, photos on Instagram /Pinterest, or YouTube. Build your world up a little at a time. This is a big benefit others won’t likely copy and it’s where you can get ahead.

  1. Connect with all the freaks like you. The more you communicate to find the people you seek to serve, the better your opportunities. Also connect with people you can help. Connect two people who might benefit from knowing each other. Do everything you can to extend your network, and keep it alive and well.

  1. Expect to encounter some bad times. Remember that you can hit bumps in the road at any time. Be ready. Know how and when to apologize. Be ready to assess what needs to get done when there are issues. Know whether or not you have to pull the plug. Keep your mind open to how your ideas might have to shift.

  1. Take action, any action. The biggest difference between you and other closet freaks, who will just accept what life and work brings them, is that you’ve chosen to take action. The big opportunity for you is to do something based on ideas you have had lingering in your mind for a long time. Where do you start? Anywhere.

My conclusion is that you don’t have to be a freak to be a good entrepreneur, but you do have to be willing to think differently, to get beyond the norms of business today, define a platform for real change, and make it happen. If you are a freak in your own mind, relish that thought, and take action to turn your passion into a successful new business. We need more of you!

Marty Zwilling

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Saturday, November 23, 2019

A Culture Of Purpose In Business Leads To Doing Well

migration-integration-migrants-mergeMany entrepreneurs still don’t understand that building a business culture today of doing good, like helping people (society) and planet (sustainability), is also a key to maximizing profit. Employees and customers alike are looking for meaning, not simply employment and commodity prices. Every company needs this focus to attract the best minds and loyalty in both categories.

In the classic book by Christoph Lueneburger, “A Culture Of Purpose,” he details how to build this new culture, and why it is becoming more instrumental in bringing about success, as well as sustainability, in organizations as diverse as Unilever and Walmart. He outlines a three-phase process to develop the necessary business culture of energy, resilience, and openness:

  • Nurture your current leadership strengths. Learn how to recognize, cultivate, and leverage the competencies of your current talent to develop your leadership team. Highlight leaders with business acumen as well as purpose as role models. Change leadership is a critical competency in the early stages of a transformation.
  • Hire the right team. Ask the right questions to identify the innate personality traits in potential new hires, regardless of level and function, to bring on board those most likely to succeed in and shape your organization. Employees with a purpose actually are easier to recruit and retain, and are likely to be more engaged. They also tend to stay longer with the organization, reducing costs.
  • Craft your culture into an actionable plan. Create an environment that unleashes these competencies and trains and pushes them to the fore. Shape how people relate to one another and collectively go for what would be out of reach to them individually. Success is people moving from a reactive to a proactive focus on doing good.

In all cases, the transformation starts with placing leaders with a purpose at the core, hiring talent with a purpose at the frontier, and then building and extending the culture of purpose both inside and outside the organization. I can think of at least five ways that this benefits the business, as well as customers:

  1. Products in a purpose culture more readily sell at a premium price. Evidence is growing that consumers are willing to pay at least a small premium for sustainability, and have started to demand a discount for “un-sustainability.” Companies can use this strategy to improve their profitability and competitive advantage.
  1. Doing good opens the door to a broader customer base. By adding to perceived value, a company attracts more sophisticated and demanding customers less expensively and more quickly. More and more customers choose a company based on their perceptions about the good that they do, as well as their price and service.
  1. Customer loyalty and trust go up for companies with a purpose culture. According to marketing surveys, 76 percent of global consumers believe it is acceptable for brands to support good causes and make money at the same time. We all know the cost of retaining customers is far less than the cost of new customers.
  1. Companies with a purpose culture have more productive teams. Doing business is a human process. Team members interact on a daily basis with the stakeholders of the company and the way they feel about the organization has a major and direct impact on how they perform their tasks and do their job at the end of the day.
  1. Investors like startups that foster planet and social responsibility. Investors believe these startups demonstrate more integrity and less risk, as well as being better positioned to deliver long-term, sustainable value to their stakeholders. Of course, investors still require a profitable business model, and the potential for high returns.

Thus doing good leads to doing very well, not less well. Lueneburger contends, and I agree, that the most effective and remembered leaders of our time, and the most successful companies, will be builders of cultures of purpose, which inspire the hearts and minds of people both inside and outside the organization. Is your personal leadership shining well or less well in this direction?

Marty Zwilling

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Friday, November 22, 2019

8 Techniques For Shining A Light On Your Blind Spots

burmese-elephant-blind-menMost of us have blind spots in our ability to build a business, due to lack of experience, too much ego, over-confidence, or unjustified faith in a subordinate. Only a few of the entrepreneurs I have worked with in a decade of consulting are smart and humble enough to recognize that they don’t know what they don’t know, and have an effective process for shining a light on their blind spots.

For instance, I find that tech entrepreneurs are often so blinded by their shiny new technology that they fail to anticipate the infrastructure and political changes which gate the business. Auto engines that burn hydrogen are a great technology, and would appear to be a great business, but getting service stations around the world and new safety legislation has already taken decades.

Every successful leader has to learn how to act with a visible confidence and faith in their own abilities, and that of their team, while remaining aware of their own biases and blind spots. They need to actively avoid the hazards that come with overconfidence and excessive optimism. The best leaders accomplish this by asking good questions and really listening to the feedback:

  1. Don’t preface your questions with your own assumptions. I find that team members are often reluctant to challenge their leaders, and will tend to concur or just keep any counter-views to themselves, thus avoiding conflict that could impact their career. Never state your position first, when asking for input from others before a hard decision.

  2. Always use directed questions and insist on direct answers. Smart leaders are quick to cut off attempts to redirect the discussion, or evade the question, to cover a lack of knowledge or feign support. The best strategy is to narrow the question until you get a specific response or a clear indication that they have no relevant input.

  3. Insist on facts and specifics to support all opinions. Be sure to separate speculation from facts, and act only on facts. It’s fair to start with what people think they know, as long as you use that to zero in on corroborating evidence and real examples. Blind spots are easily covered by opinions and speculation, but real facts are hard to counter.

  4. Restate what you are hearing for confirmation. To confirm understanding, and push people to provide more information, it pays to paraphrase back from a different perspective their conclusions and recommendations. This often leads to follow-on questions that expose the real blind spot that either of you may be unaware.

  5. Push alternative views limits, to check for side effects. If I suggest your technology needs validation in the market before scaling, it’s fair to ask how long and how expensive that test could be. That’s really a form of risk management, as well as a learning opportunity. Risk management in the face of unknowns is the primary job of a leader.

  6. Expand every dialog by asking open-ended questions. Yes-or-no questions may appear to be more efficient, but usually these don’t surface the new information that may help a leader to realize what he doesn’t see or understand. Strong leaders actively seek out people who have opposing views, with the intent to overcome their own biases.

  7. Look honestly at your track record on similar issues. If this issue reminds you of your previous failures, it may indicate one of your blind spots. If these cases, I recommend some extra due diligence and soul searching, to make sure you are not about to go down the same road again. Smart leaders learn from their mistakes, and don’t repeat them.

  8. Regularly question and listen to a trusted advisor. Even industry titans like Bill Gates and Warren Buffett have mentors and advisors, and they use them often to search for blind spots in their own thinking. Often an outside perspective, especially if rooted in a different industry, will give you the insight you need to make a smart leadership decision.

Today’s business world is more complex than ever, and the international elements make it all the more challenging. I always recommend that you lead with your strengths, and recognize that we all have blind spots. Surround yourself with people who have strong complementary skills, rather than less experienced people who will tell you what they think you want to hear.

The result will be fewer blind alleys, fewer required pivots, and a clearer view of your business potential and legacy. In business, it’s always less painful to get it right the first time, than to be in crisis and reactive mode most of the time.

Marty Zwilling

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

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Wednesday, November 20, 2019

Look For The Hunter Gene In Every New Venture Founder

safari-hunter-manMost entrepreneurs believe they are “different,” but they can’t quite understand how. They usually explain it by insisting that they are driven to follow their passion, need to be their own boss, want to get rich quick, or want to change the world. I now believe that the roots of the difference may go back more than 10,000 years, when hunting and farming became two different lifestyles.

The classic book, “Hunting in a Farmer's World: Celebrating the Mind of an Entrepreneur,” by serial entrepreneur and business coach John F. Dini, tied together several threads I have often seen in my own experience of mentoring and helping aspiring entrepreneurs. Dini makes the case that entrepreneurs are hunters, while the rest of us (large majority) are farmers.

This is not a statement of good or bad, right or wrong, but just an explanation of why some people see and do things one way, and others do it another way.

In business, entrepreneurs hunt for new innovative solutions to problems, new ways of beating competitors, new markets, and new customers. Farmers are the management that comes after the hunt, to build repeatable processes, do seasonal planning, and make sure all employees are well-fed and trained.

All this made more sense to me as Dini defined the types of entrepreneurs into four categories. Within each of these types, I can easily highlight strengths and weaknesses that we both see every day in startups:

  1. Technicians. The good news is that technicians are entrepreneurs who have previously learned a skill or job so well that they can do it without a manager. The bad news is they may not be good at managing people, or even managing basic business. Technicians can become true hunters when they learn to provide for both employees and family.
  1. Inheritors. These are former employees who find themselves thrust into owning a business, due to family ties or evolution. Unfortunately, most inheritors have been farmers for too long, or never had hunting instincts. The best ones learn to be hunters, or revert to that mode, allowing their business to grow and change with the requirements.
  1. Acquirers. Entrepreneurs who are willing to acquire an existing business, and believe they can make it a better business than previous owners, are clearly hunters. Farmer acquirers, who want to manage a proven opportunity, with no change, buy a franchise. Hunter franchisees move on quickly, or end up owning the entire franchise system.

  1. Creators. These are the ultimate hunters. They build businesses as their lifestyle, not as a job. They love the continuous hunt, for investment capital, resources, talent, and new markets. Only a few of these slide into farming, as the company grows in employees and products. The remainder usually exit within five years, to start the process over again.

In addition to the right type, there are clearly traits that every aspiring entrepreneur should recognize as critical for business success and happiness:

  • Creativity. Hunters thrive on the challenge of the unknown. They look at every situation as a puzzle that has an answer. Success at any level always brings a new set of problems. Hunters live for solutions and change. Farmers live for repeatable processes, minimal risk, and predictable results to feed the family.
  • Tenacity. Hunters never quit. There are no defeats, only setbacks. Success is always just a little further down the road. “Never” is not an option. If a solution doesn’t work, there is always another, then another, and another. Farmers are easily frustrated by setbacks, and count on “leadership from the top” to give them new fields for growth.
  • Business sense. Hunters need “street smarts.” If you are looking to create a business, you better have a strong “gut feeling” or “third eye” for business that goes beyond the usual five senses. Farmers have a narrower view of what is required, to optimize quality production, customer satisfaction, or close a sale.

There once was a time in mankind’s history when almost everyone was a hunter, for survival. Our civilization has evolved now almost to the other extreme, where the vast majority of the people in business are farmers (managers and employees).

For those of you who have the hunter gene, or the yearning to learn, the time has never been riper to be an entrepreneur. How long has it been since you have taken a hard look in the mirror?

Marty Zwilling

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Monday, November 18, 2019

5 Ways To Increase Your Agility In The Face Of Change

As a business and entrepreneur advisor, I have no trouble getting owners and managers to agree that change is happening faster and faster in the consumer and technology world, requiring them to keep their business more agile, just to keep up. The challenge is that too many are confused on what that means for them, and what it takes to make their business competitively agile.

I just finished a new book, Agility: How to Navigate the Unknown and Seize Opportunity in a World of Disruption, by Leo Tilman and Charles Jacoby, which has helped me net out the key principles for businesses to become more agile. These authors, and I agree, define agility in business as the ability to detect and assess changes in the competitive world in real time, and then take decisive and effective action.

We also agree that agility enables a business to stay healthy and outmaneuver competitors by seizing new opportunities earlier, better defending against threats, and acting as a well-orchestrated and empowered whole on innovative initiatives.

The book brings a wealth of examples to the picture, based on author strategy consulting with major companies, governments, and the military. In their experience and mine, the essence of business agility is embodied in the following five principles:

  1. Early detection of change and the need for change. This may seem obvious, but most small business leaders are so busy with current issues, and running the business today, that they spend very little time or resources looking for customer culture changes, analyzing new technologies, or political and economic realities that will impact them.

    Crisis-driven agility is not enough today. You need time and resources looking ahead for change. Perhaps failure to look ahead was not the primary reason for the demise of Blockbuster and Kodak, but I see it happening to smaller businesses every day.

  2. Effective assessment of change drivers and alternatives. It starts with everyone being encouraged to look for the surprising or unexpected, and not being penalized for bringing bad news. Sometimes you need to use outside consultants and listen to your advisors, before the crisis, to overcome cognitive biases and evaluate response options.

    Often the answer may be a quiet change in marketing strategy, or adding a new demographic, but real change may require a bigger response. Apple, as an example, has made agility and new markets their brand image, as well as their source of growth.

  3. Timely response with smart risk-taking and innovation. Cohesion and team unity are integral to timely agility, expedited by a willingness to take and share risks. These imply a special brand of people leadership and a culture of trust throughout the business. Often I find that small businesses slow down as they grow, and become more risk-averse.

    Jeff Bezos and Amazon are an example of continuous growth, where you can see how far and fast constant change, innovation, and risk taking can take your business. They started with a focus on books, but expanded online access to cover almost everything.

  4. Culture of purposefulness and decisiveness. Every business needs a strategic purpose, vision, and values that are regularly updated, visualized, and clearly communicated by senior leaders to everyone in the organization. True agility also requires a willingness and ability to make decisions and execute in stride, at all levels.

    Examples of business today who have focused on a higher purpose and values includes Whole Foods and Patagonia, where evidence indicates that their average return, brand image, and growth are much greater than other companies in their space.

  5. Sustaining a will to win, with a bias toward the offense. Agility requires a mindset and culture grounded in the competitive will to win that encompasses what is called a bias toward offense rather than defense. It’s the only way to avoid losing. Team members look up and down the command chain for role models and positive direction in this regard.

    If you think of successful entrepreneurs, including Elon Musk and Richard Branson, you will find them primarily in offense mode. Both are capable defenders, but spend most of their efforts pushing new limits in aerospace, advanced technologies, and new markets.

In summary, both the authors and I see agility as the overarching quality which encompasses many important other more specialized business traits, including adaptability, resilience, flexibility, and dynamism. If you intend for your business to survive and thrive in today’s world of rapid change and global competition, it’s time to start now making agility your leadership strength.

Marty Zwilling

*** First published on Inc.com on 11/04/2019 ***

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Sunday, November 17, 2019

8 Tips For Right-Brain Entrepreneurs To Build Balance

Right-brain-entrepreneurTraditionally, the majority of entrepreneurs have been logical thinkers, problem solvers, with full attention to details. These are the stereotypical left-brain engineers. Yet I see a big shift from the knowledge age, with its left-brain foundation, to a critical focus today on visualization, creativity, relationships, and collaboration, which are more in the domain of right-brainers.

Of course, the best solution would be a new wave of so-called whole-brain thinkers, but this term is usually reserved for Einstein and Picasso, and no entrepreneurs that I can name. Even right- brain dominant adults are hard to find, according to many expert views. They say most children start out this way, but after their years in school, less than ten percent retain their high creativity.

That means we need all the help we can get to bring out the right-brain attributes we need to be the best entrepreneurs in this challenging new age. Fortunately, there are resources available to help, like the classic book by right-brain entrepreneur Jennifer Lee, “Building Your Business The Right-Brain Way,” which teaches you to capitalize on these strengths, and still build a business.

Obviously, there are places for right-brain thinking as well as left-brain thinking, as it relates to starting and building a business. Lee offers the following guiding principles to right-brain thinkers who need to balance their focus, but I’m convinced that the same principles apply to every entrepreneur-minded person:

  1. Be uniquely you and embrace your creativity. Creativity is the key word here. Engineering creativity, like innovate low-cost solutions, needs to be combined with marketing creativity, like viral social media campaigns, to build a sustainable competitive advantage today. Be visual and imaginative, but don’t forget the business details.
  1. Dream big but start small. Don’t be seduced by the bigness of your right-brain vision and expect everyone to follow, based on the strength of your passion alone. Challenge your left-brain side to break things down into manageable pieces and structure a practical plan to unfold things over time. It doesn’t all have to happen at the same time.
  1. Keep it simple and focused. Opt for easy, broad strokes instead of detailed, complicated solutions. The advantage goes to right-brain thinking on this one. Too many entrepreneurs (engineers) I know define the ultimate system and processes that even a large company can’t afford, and no startup has the money or time to execute.
  1. Take action, make it real, and tweak as you go. Be willing to take action and put yourself out there, even when you don’t feel ready and even if your idea is not yet perfect. You’ll actually learn more and gain more clarity the more you interact with your idea and get feedback. Neither right-brain nor left-brain entrepreneurs will success without action.

  1. Look for the learning and repeat what works. Always have your eyes peeled for valuable new insights to help you continuously improve. Then, when you find something that works, keep doing it until it doesn’t work anymore. Don’t be afraid of using your intuition and feelings to guide you with customers, but don’t ignore real data.

  1. Consider where you are headed and don’t get ahead of yourself. Stay ahead of the curve but don’t advance so fast that you overwhelm yourself. Make sure you have a solid foundation first to support your future vision. Left-brain logical and sequential thinking usually has the edge on this one. Some creative people are always working in the future.

  1. Recognize where you’ve come from. Even as you move forward, also acknowledge how far you’ve come, and celebrate each step of the way. Recognizing past achievements and reflecting on your success helps keep your circuitous progress in perspective. Thomas Edison found his best learning was from his failures.

  1. Know thyself. Building a business is a journey accompanied by personal growth. Understand what makes you tick, and be willing to courageously move past your comfort zone. When you transform yourself, you transform your business. Success in business is often about knowing when and who to ask for help.

As you can see, it’s hard for most of us to be adequately right-brained and left-brained at the same time. Thus I always recommend that two heads are better than one, meaning seek a co-founder who supplements your natural skills and tendencies. It’s hard to beat entrepreneur teams like Bill Gates (engineer) and Steve Ballmer (marketing) in the early days at Microsoft.

So my conclusion is that while the opportunities are growing for right-brain thinkers, the ideal entrepreneur is still a team that can work together to accomplish whole-brain thinking, and whole-team execution. Have you assessed the thinking-balance and the effectiveness of your team and yourself in your own business lately?

Marty Zwilling

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Saturday, November 16, 2019

10 Traits of Leaders Who Can Hold People Accountable

businessmen-accountableGetting things done effectively in a startup requires total individual and team accountability. You can’t afford excuses and multiple people doing the same job. In my view, “taking responsibility” is the core element behind accountability. Many people hear responsibility as an obligation, but I hear it as “the ability to respond.”

Unfortunately many people don’t have the ability to respond, because they lack confidence in themselves, or simply don’t have the skills required. Therefore an entrepreneur’s first requirement is to hire or team only with people who are accountable (already have the confidence and skills you need) – training them on the job is prohibitively expensive when you have minimal income.

Even with the best people, accountability must be nurtured, since it can be killed more quickly than it can be grown. Here are some characteristics of current business leaders, including Richard Branson, who foster responsibility and accountability, and keep it growing:

  1. You need to walk the talk. Above all else, you as the founder or executive have to be a role model of accountability. You need to exemplify the “buck stops here,” and never play the blame game. Reward accountability consistently and often.
  1. Communicate continuously. You need to make sure that your team members understand your expectations, and you need to proactively listen and understand the expectations of all stakeholders. Frequent and consistent communications, both verbal and in written processes, are required. Take away the “I didn’t understand” excuse.
  1. Measure objectively. Goals and objectives must be unchanging and measurable, based on results, with benchmarks for comparisons. Accountability assessments must be based on facts, not distorted by opinions, politics, and desire for power. Frequently changing expectations does not lead to accountability.
  1. Give control before expecting accountability. A sense of responsibility and accountability requires a sense of control. If several levels of approvals are needed for a specific decision, no one will feel accountable, and no one can be held accountable. Real delegation is required.
  1. Align functional groups with business goals. If key inputs are not under the control of the proper group, then they will cede accountability as well. If your sales group is measured on profitability, but is required to process leads from outside sources paid by volume, you have a conflict where everyone loses.
  1. Manage up the line and support your team. You need to be the sponsor and the advocate for every member of your team. Team members who take risks through accountability need to see your overt support up the line, with no blame and no scapegoats.
  1. Provide timely feedback on performance. High performance teams need immediate and useful information on how to improve, as well as regular full performance reviews, individually and as a group. Help people, including yourself, look in the mirror and see reality.
  1. Conduct humiliation-free problem analyses. Getting to the source and fixing problems should never be a “name and shame” game. Leaders need to provide safe havens where difficult issues can be discussed without assigning blame. The goal should always be to solve problems, not hurl accusations.
  1. Provide tools to support accountability. No tools and no data lead to total subjectivity and biased interpretations. Absolute dependence on tools leads to abdication of personal responsibility. Provide adequate tools, but trust the people.
  1. Differentiate accountability from entitlement. Accountability is hard, so no one is entitled to be right every time. Don’t punish people for making a mistake, but make it clear the mistakes have consequences, sometimes painful ones, that we all have to live with. Higher responsibility means more work and more skills needed.

Many executives subscribe to the misguided notion that you can hold people accountable. This is usually a ploy to control others and hand off responsibility, without being accountable yourself. People need to make themselves accountable, and accept the consequences of their actions. Remember that you are the model, and what goes around, comes around.

Marty Zwilling

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Friday, November 15, 2019

Why You Need Tools And Analytics For Employee Metrics

Employee-performanceEven after many years mentoring entrepreneurs and advising businesses, I continue to be surprised by the primary focus on products and processes, and the often incidental attention to hiring and nurturing the right people. Employees are still too often thought of as a commodity, to be acquired “just in time” for the lowest cost, and managed as a disposable asset.

All this despite continuing evidence that the right people make a business succeed, rather than the other way around. Further, based on results from the annual Sierra-Cedar HR Systems Survey, businesses that use data and tools in their people management, rather than traditional manual processes, see a 79% higher return than other organizations, suggesting the time is ripe for relying on data and analytics.

With the latest advances in software technology, it’s no longer cost-prohibitive for business entrepreneurs, who can’t yet afford a human resources department, to take advantage of analytics tools. Almost any startup can start with Excel, and move to open-source data analysis tools, including Python or RStudio. Bigger organizations should invest in the new “big data” tools.

For a hands-on guide in developing data-driven people strategies, I found some practical techniques in the classic book, “The Data Driven Leader,” by Jenny Dearborn and David Swanson. Based on many years of HR leadership at SAP and elsewhere, these authors start by highlighting the risks of not leveraging data analytics. I have added my own observations to theirs as follows:

  1. People decision making by gut, more than data. Common sense and emotionally driven decisions are sub- optimal in assessing team members. Data, however, removes guesswork, biases, and anecdotal reasoning that can throw decision efforts off course. It’s the same for customers and products, where analytics have long proven their value.
  1. Working on the wrong problem or assumption. Data helps avoid predetermined (and often erroneous) approaches to solving your people problems. Don’t let one incident, observation, rumor, or misunderstanding cause a rush to judgement, or hiring mistake. Make sure subjective feedback is buttressed by objective data before making decisions.
  1. Measuring efficiency rather than effectiveness. Efficiency in the workplace is the time it takes to do something, but it can ignore work quality and customer impact. Employees are often ineffective because they don’t care about their work or because they don’t possess the skills to contribute. Use data analysis and metrics to measure for results.
  1. Subjectively measuring employee engagement. Manually assessing engagement clearly isn’t working. According to Gallup’s often quoted global engagement survey, only 13 percent of workers are now fully engaged in their job, which is hugely expensive in productivity. With data and analytics, you can gauge employee engagement accurately.
  1. Underestimating absenteeism and accident costs. Many businesses still ignore the magnitude of the problem of employee absenteeism and accidents. They look only at historical data, and lump it all under "the cost of doing business." The best leaders use data and analytics to identify key offenders to continually reduce these problems.
  1. Failure to factor in new employee ‘time-to-performance’. Based on statistical data, it typically takes eight months for a newly hired employee to reach full productivity, and that doesn’t include hiring. Through analytics on current employees, you will be able to predict re-training requirements and minimize employee turnover.
  1. Waiting to hire until the business is in crisis mode. It’s easy for entrepreneurs to fall into the trap of focusing only on what’s urgent and leaving aside what seems merely important. The solution is to plan ahead by using data analysis tools with predictive indicators. Trying to hurry the hiring process is a key reason for bad hires in business.

Most companies I know will claim to be busy collecting and analyzing data, but very few actually use it to drive people management. Integrating the analytics of people management with business results is key to driving a winning strategy and long-term sustainability in today’s competitive and rapidly changing environment. These should not be seen as two separate efforts.

I often have to remind entrepreneurs that good products are built with the best technology, but good businesses are built with the best people. Great business leaders have figured out how to apply the right attention, time, and tools to both. Where are you along this spectrum?

Marty Zwilling

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Wednesday, November 13, 2019

10 Key Strategies For Innovation Leadership By Design

Design-thinking-textAs a business advisor, I strongly believe that continuous innovation and design thinking are the keys to long-term viability and success. A recent survey of design professionals shows strong agreement, but 92 percent expressed some lack of confidence in their organization’s design vision. They are always on the lookout for ways to prepare current and future design leaders.

“Design thinking” is a methodology used to solve complex challenges, such as the ones faced by every business in today’s rapidly changing and highly competitive environment. A design mindset is not product-focused - it’s solution focused and action oriented towards creating better customer experiences and value. In businesses, this requires a new internal culture and leadership.

Probably the most recognized design thinking business leader was Steve Jobs at Apple, as he drove the company from personal computers to new markets, including the iPhone and iPad. Yet I believe the role and requirements continue to evolve, as detailed in the classic book, “Innovation by Design,” by Thomas Lockwood and Edgar Papke, based on their studies.

I support their list of key requirements for you as an aspiring design thinking leader or entrepreneur. I’ll paraphrase and outline the top ten from my perspective:

  1. Use empathy to understand the experiences of others. By understanding experiences, you will better understand the needs of people around you, including your customers and partners. That leads to trust, motivation, and a greater ability to convince them of your point of view, and follow you despite the pain of change and innovation.
  1. Focus on creating a benefit for the customer. Keeping the focus on the customer creates a shared understanding and alignment for all to the intended outcome, and a move toward greater levels of innovation. This focus also allows your team to better manage disagreement and conflict by reminding everyone of the shared intent.
  1. Listen with mutual respect and fearless exploration. Using design thinking as a framework not only increases your ability to listen, but also develops your inquiry and conflict resolution skills. You are able to reframe difficult questions in a way that allows your team to identify root cause challenges and execute more powerful solutions.
  1. Openly express ideas and what you think, see, and feel. Giving and receiving feedback isn’t easy, especially considering that people can quickly fall into defensive modes of behavior and feel ill at ease. Design thinking leaders make it safe to critique ideas, but keep the focus on the process and work, rather than personal views.
  1. Pursue knowledge by being curious and asking questions. Rather than being authoritarian, design thinkers are explorers. You learn by asking hard questions and listening fearlessly to the answers you receive. This facilitates the dialogue and the mindset in all participants to find the right solution, without undue emotion and conflict.
  1. Demonstrate the ability to be vulnerable. Everyone recognizes that vulnerability requires a higher level of strength and courage, including an ability to accept your own mistakes and weaknesses. Leaders demonstrating this ability are more trusted and convincing in their roles as design thinkers. They become the model for their followers.
  1. Coach others, rather than competing with others. Coaching is helping a person increase self-awareness and adjust their role to take better advantage of their greatest strengths, rather than highlighting and critiquing their weaknesses. As a leader, this fosters constructive contribution of design ideas, rather than protective debate.
  1. Rely on the knowledge and insight of others. Leaders who are fostering innovation as a culture in their organization cannot afford to act as the lone genius. Other members of the team have unique customer access and insights, as well as their own perspectives. Only through collaboration can a leader achieve the force multipliers to compete.
  1. Use curious confrontation to manage disagreement and conflict. Curious confrontation is simply facing differing ideas with the desire to investigate and learn. This is a key precept of design thinking, and leaders in this arena must be the models for the rest of their team. They keep business conflict constructive and embrace it in steering through the innovation and change that must be part of every successful business
  1. Align personal purpose with the organization’s mission. Purpose-driven design is more than branding – it is the catalyst that aligns an organization's actions, character and culture with its purpose. The best leaders are able to align their own vision and power of choice with the organization mission for maximum credibility and impact.

Whether you are looking to further your career as a business professional, or plan to take a leadership position in your own business, developing these key attributes will pay big dividends. None of these are a birthright or require advanced degrees – they can be learned by anyone.

They all play directly into another megatrend I see in business – moving from a single bottom line of economic value, to the triple bottom line of economic, social, and environmental value. Be there with innovation and design thinking, or plan to get pushed aside soon.

Marty Zwilling

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Monday, November 11, 2019

6 Technology Trends Will Spawn Countless New Ventures

Internet-of-thingsA tidal wave of valuable data is surging from the Internet and connected devices today, and the volume is growing exponentially each year. It’s enough to drown any business which tries to fight it or ignore it, and it’s an opportunity to ride higher and faster than even the successes of Google and Facebook, for those startups that use it as their driving force.

Per the latest study by networking giant Cisco, the world’s yearly mobile data traffic has grown 17-fold over the past 5 years, reaching 11.5 exabytes per month at the end of 2017, of which more than half was video. According to the classic book “Data Crush,” by Christopher Surdak, data in all formats will soon be the largest source of new opportunities for startups, or death.

According to what I see, as outlined by Surdak, this data surge is being driven by the following six technological and social trends:

  1. Mobility: smartphones, tablets, and the “Internet of things.” Smartphone penetration in the U.S. exceeds 80 percent of all mobile phone owners, and these generate more data from their non-phone functions than voice. In addition, more people now own cell phones than toothbrushes. All devices are becoming self-aware and Internet connected.
  1. Virtual living: the rise and growing dominance of social media. Facebook has created an environment where millions of people can hold billions of conversations with people and companies, transforming how people expect to interact with each other and the world. For startups, this is an engagement opportunity worth billions of dollars.
  1. Digital commerce: infinite options for buying goods and services online. Data-enabled shopping has completely changed our purchasing experience, has undermined some of the greatest brand names, and has created some new brands, like Amazon, that now dominate. There is still infinite room for new startup sales modes and models.
  1. Online entertainment: millions of channels, billions of actors. With the adoption of the Internet, digital entertainment has rocketed across the world, changing how people entertain themselves. YouTube is now the 800-pound gorilla of entertainment. Online gaming has moved from the geeks to the mainstream. The audience is now the actors.

  1. Cloud computing: the death of dedicated infrastructure. More and more company and personal services are being virtualized to the Cloud. Many companies are already seeing their computing costs drop by thirty percent as they move in this direction, providing new startup opportunities with the Everything as a Service (EaaS) trend.

  1. “Big data:” learning from the flood. Big data is mining the storage for knowledge. This gives rise to the personalization and customization that we all want. Analytics will soon drive nearly all business decisions for any company that wants to remain relevant to its customers. Startups are in the best position to provide the analytics, and use them first.

As an entrepreneur, what steps can you take to help your business not only survive the data hurricane, but to thrive under these new and challenging conditions? Surdak emphasizes that the goal is to either mitigate some of the pressure caused by data growth or to put that pressure to work for you in growing your startup and remaining competitive:

  • Focus: play to your strengths. Determine your core business strategy and resolve to remain true to it. Make strategic versus opportunistic decisions.
  • Accelerate: speed is life in this new world. Look for and reward quantum changes, like cutting cycle time in half, in your processes, products, and services.
  • Data enable: use metrics and measurements. Extend data metrics into non-traditional channels, such as email, internal social media, and customer collaboration platforms.
  • Quantification: big data, bigger results, and controls. Startups should seek to continually improve performance through statistical analysis and predictive monitoring.
  • Gamify: engagement to get what you pay for. Use internal collaboration platforms, then extend to online customers through your website, blogs, and social media.
  • Crowdsource: putting your audience to work beyond customers. Look beyond today’s requirements for entire new market opportunities.

You need to start now to understand the trends and specifics of the information tidal wave that is building up in front of us. Use the steps outlined here to stay ahead of it, and use its power to propel your startup into the future, ahead of your competition. The possibilities are endless, but the downside will be painful.

Marty Zwilling

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Sunday, November 10, 2019

10 Ways To Be More Adept At Seeing Around The Corner

Steve-Jobs-quoteHow is it that only a few business leaders and entrepreneurs seem to drive exceptional results and disruptive innovation in this rapidly changing market economy (marketquake)? These few seem more adept at executing market and technology turns, not just incremental evolution. They consistently take bold steps to stay ahead of the curve, often contrary to conventional wisdom.

Steve Jobs at Apple may have been the most visible example of this ability to “see around the corner,” but others often mentioned include Richard Branson (Virgin Group), and Elon Musk (SpaceX). Most of you could suggest one more, but not many.

While searching for some structure that could facilitate learning the process, I came across a classic book by G. Shawn Hunter, “Out Think,” which offers a step-by-step outline for executives to achieve this stage of creativity. It suggests that they need to shed outmoded management and organizational biases, to foster an atmosphere where disruptive innovation becomes the norm.

Here is my summary and interpretation of the ten strategies that he outlines for driving the disruptive innovations that entrepreneurs and startups all dream about:

  1. Establish the engine of leadership. People Development Magazine recently listed inspirational leadership (trust) as one of the top three characteristics business leaders must have today. These are about being true, honest, and teaming with others, inside and outside the company. Without trust, no one will ever follow even the best innovators.

  1. Provoke with questions, not answers (inquiry). Peter Drucker once said “The most serious mistakes are not being made as a result of wrong answers. The truly dangerous thing is asking the wrong question.” Exceptional outcomes don’t come from standard answers to pre-defined questions by conventional leaders.

  1. Mine the organization for expertise (exploration). Identify individuals within the organization who have led innovation over many years, as well as newer employees that share the same vision. Just as importantly, you have to deal quickly with innovation blockers, including bureaucrats, power mongers, and skeptics.

  1. Dream well – you may find yourself there (aspiration). Aspiring to greatness requires uncovering and exploring truths – including hidden truths – and sharing them with others. The most innovative leaders expect the best of everyone, and develop the guru in others. Emulating perceived heroes and role models can lead to realizing your own aspirations.

  1. Embrace new kinds of risk (edge). Finding the “edge” is similar to “finding flow,” being “in the zone,” or being “in the groove.” These are states conducive to heightened engagement, accelerated learning, and creativity. These states allow deep curiosity, exploration, and highly focused activity to occur, leading to disruptive innovation.
  1. Collaborate to innovate (connection). To create a culture of innovation, leaders must first create a culture of collaboration. That means engaging and inspiring the creative talents of others, respecting employees’ ideas, and bringing new insights into group decisions. With collaboration, differences add up to more than the sum of the parts.
  1. Borrow prior and current brilliance (mash-up). By constantly mashing up prior ideas, applications, and outcomes, powerful new combinations emerge that have value to customers. Find people who deviate positively from the norm, intentionally destabilizing the work environment, and foster moderate creative tension that can spark innovation.
  1. Get moving or accept the consequences (action). Action counts – not words – especially when that action is novel and unique. Once you are in motion, actually producing something, people will respond, contribute, collaborate, and spread the word, driving energy and awareness your way. Innovation does not come without action.
  1. Make it your own (signature). A signature innovative solution is born of the core identity of those who have joined in the innovation journey, executed with the unique personalities of participants. Signature innovation is not easily copied or pirated, because it comes out of a truly unique cultural identity within a team.
  1. Connect with “why” (purpose). In any endeavor, there must be a purpose behind it if we are to receive maximum enjoyment, fulfillment, and a deeper sense of our own role in its achievement. Many companies and leaders now reinforce and demonstrate a commitment to responsible behavior that goes way beyond profit and individual gain.

Exceptional innovation or “seeing around the corner” does not come from closing your eyes and jumping into the unknown. It comes from a focus on learning and following the processes proven by other great entrepreneurs and leaders.

Even creativity alone is not enough to deliver real innovation, unless it is teamed with the tendency and tenacity to execute. How well are you executing on the drive to exceptional outcomes in your business?

Marty Zwilling

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Saturday, November 9, 2019

When Planning A Startup, A Top Priority Is Location

Prime_Real_Estate_LogoEven in this age of globalization and virtualization, the geographic area where you choose to live and work can still make or break your startup business. I still have to tell some entrepreneurs that even with the best idea, they have to move to Silicon Valley to find the investors they need, or they need to move to the U.S. get the attention of the market they choose.

For example, if you are working on a great social networking idea to replace Facebook, and need funding, you probably won’t find any interested and focused VCs or Angel investors in Arizona, where I live. Also, investors from the super-hubs (Silicon Valley, New York, or Boston), probably won’t assume anyone outside their domain has the savvy and resources to make it happen.

On the other hand, if you are into solar technologies, there is probably an advantage to being in Arizona or a similar location. Having a great idea in the wrong place won’t get you the funding you need, the experienced domain experts you want, or the pilot market results you need for survival. You need to move to right location and get connected before you ask for help.

Of course, there are always exceptions, but how much added risk do you need for your startup? Maxwell Wessel, in a classic article in the Harvard Business Review on this subject, points out the exception successes of Zappos in Las Vegas, Sendgrid’s massive growth in Colorado, and RightNow’s $1.5 billion dollar sale to Oracle from Bozeman, Montana.

For your own startup location positioning, I recommend his four key questions that every entrepreneur should contemplate before resigning themselves to failure, or deciding where to move to improve their odds of success:

  1. What’s your city’s advantage? Today, Silicon Valley is the consumer and enterprise software capital of the world. Finance has homes in New York, Hong Kong, and London. Energy is still the domain of Houston and Dubai. The list goes on and on. Most cities have something that they are particularly good at. Find yours if you want to stay home.
  1. How can you get exposure? Finding talent and financing isn’t the only hurdle to overcome on the road to startup success. It’s just the first of many. Exposure is another key ingredient. Exposure to customers, incumbents, and competitors all drive success. Exposure instills the fear and urgency you need to deliver the right competitive solution.
  1. What will set your business apart? No one can tell you what to do to create your edge, but it is important that you figure out how you can. Being in the right location helps you to maintain pace because of access to skilled and experienced people. Being close to your customers, your vendors, or even your competitors can make all the difference.
  1. Are you sure you can’t move? Moving might not be easy. But it is one of the simplest things you can do to improve the odds that your business takes off. If you’re about to devote your professional life to building a business, and ready to sacrifice the blood, sweat, and tears it requires, seriously consider this question. It’s very important.

Wessel also summarizes the costs and potential impacts of creating and building your startup in secondary markets, usually meaning not in Silicon Valley or one of the other super-hubs:

  • It takes longer to raise money. Raising capital isn’t the be-all and end-all of startup success. But it is an important metric for firms in pursuit of explosive growth. Raising capital is a necessary step, and survival time without it grows short, or interminably long. That extra two months spent traveling to fundraise is two months falling behind.
  • It decreases your odds of being bought. When it comes to the technology ecosystem, clusters are vital. Wessel measures a 39% acquisition advantage to being in-state. Tech companies see engineers move frequently, integrate their products tightly, and often find themselves acquiring or merging with counterparts. Personal relationships do count.
  • It decreases your odds of success. If you judge entrepreneurial success as surviving or selling (including raising follow-on funding, being bought, or successfully IPO’ing) as no doubt your investors do, then your odds of success are 10-15% higher inside the realm of the super-hubs. That’s not a big margin, but every little bit counts in this space.

But this measurable difference in outcomes, however significant, is not stopping aspiring entrepreneurs from building businesses where they live today. There are many good reasons to do so. Entrepreneurs cite family roots, a sense of neighborhood responsibility, existing professional networks, and more.

In fact, according to Wessel, following the last recession, startups have mushroomed everywhere. Since 2006, the number of startups founded and funded outside of California, Massachusetts, and New York, has grown by more than 65 percent. So don’t let location hold you back, but you need to go in with your eyes open. It takes more than a dream and passion to build a business.

Marty Zwilling

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Friday, November 8, 2019

6 Ways Of Telling Your Story That Draws People To You

Share-your-storyIn my role as a mentor to entrepreneurs and an angel investor, I find that too many are stuck in this myth that a good pitch, and good marketing content, should consist of more product features, and more hype on customer benefits. Naturally, these are important, but real winning content has to start with a story that excites people’s imagination, and pulls them in emotionally.

Whether you are addressing potential investors, your company’s board, business partners, or your customers, if you plan on becoming a person of influence, you need a collection of stories to weave into your message. In fact, the same is true in your private live, or as you move up in your professional business career, or even if you are interviewing for your first job.

I found some excellent specifics on the magic of storytelling in a classic book, “The Compass Solution: A Guide to Winning Your Career,” by Tim Cole. He shares his insights from three decades in business, growing billion-dollar portfolios, and managing thousands of people. I will paraphrase his key tenets here, based on my focus on entrepreneurs and new businesses:

  1. People want you to excite their passions. You grab any audience, even logical left-brain executives, in the first 60 seconds, or you lose them forever. The hook is everything, and a story fragment to clutch their hearts is the key to holding their minds. Exciting their passion to better the world or themselves is far better than saving a dollar.
  1. We all want to be entertained. With the current data overload, we remember someone who does more than inform us. We yearn for things that engage our senses, and give us hope. That’s why gamification is so effective, why celebrities are effective marketers, and why you need that amazing story that goes viral. We need more than facts to convince.
  1. No story resonates without a struggle. Struggle engages us – it compels us to want to listen and participate. That’s why I recommend every solution pitch must start with a painful problem, not just “nice-to-have.” That’s why most successful new businesses highlight a higher cause, i.e., world hunger, environmental sustainability, or equality.
  1. Avoid the use of wordy visuals in telling your story. Today is the age of images to make a point, including videos and sound. These engage your senses and cross all cultures and languages. PowerPoint pitches crammed with words will bury your message and yourself. Make sure the words you do use convey feelings, as well as facts.
  1. Every story needs a hero who comes to the rescue. That hero may be an idea, it may be an individual, it may be an initiative, but without the struggle and the knight on the white horse that comes to the rescue, there is no story, and the audience will not listen. In business, the “bad guy” can easily be an existing painful problem, or a key competitor.
  1. Logic may set the stage but it is emotion that wins the day. Even the most analytical of us responds to a story that engages the senses and appeals to our souls and sense of well-being. Think of the popularity and power of social media – the average daily usage worldwide is now up to 136 minutes per day. People don’t spend that much time on facts.

Your ability to weave stories and your heart into how you communicate with others in business, as well as your personal life, is far more important than most people realize. Examples of business leaders who are great storytellers include Richard Branson of Virgin Group, Howard Schultz of Starbucks, and Sheryl Sandberg of Facebook. Emulate them rather than envy them.

These leaders always make extensive use of metaphors and similes, as well as their collection of human experiences, to more vividly communicate important messages. They engage the often misunderstood creative right brain of their audience to amplify the point and make it stick. Their ability is not a birthright – it can be learned through practice and attention to your own emotions.

Just remember that business is about people, more than products and solutions. Investors invest in the jockey, more than the horse. Customers buy from people they trust, respect, and admire. Don’t forget to make people part of your business story.

Marty Zwilling

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Wednesday, November 6, 2019

10 Ways To Trample And Smother Business Innovation

trample-on-innovationSuccess in any business these days requires a constant flow of new and innovative solutions, to keep up with changes in the market, competition, and to attract new customers. Yet in my role as a small business advisor, I still see a singular focus on achieving repeatable processes and “cookie-cutter” manufacturing. I don’t believe these two objectives have to be mutually exclusive.

The best entrepreneurs, and the best executives in mature businesses, have learned how to foster both high efficiency and high creativity, in a balance that keeps their business ahead of the pack on both sides of the equation. These business leaders are constantly are on the prowl for mistakes to avoid and opportunities to improve their impact.

I saw some good insights on the most common mistakes that crush creativity, in the classic book, “Lateral Thinking Skills,” by Paul Sloane. Sloane is well recognized for his work on innovation and lateral thinking (new ways of looking at a problem rather than proceeding by logical steps). Here is my summary of the ten top creativity mistakes we both still see too often:

  1. Criticize any new idea or employee suggestion. A natural human reaction to any new idea is to point out potential weaknesses. New ideas tend to not be fully thought through, so it is easy to reject them as ‘bad.’ This only discourages the person from making any future suggestions. You must praise creative thinking, and evaluate results later.
  1. Avoid brainstorming sessions to find solutions. Brainstorming is still seen by many as old-fashioned and passé. Recent evidence is that brainstorming, done right, is still one of the best ways of generating fresh ideas from people at all levels. Keep brainstorming sessions short, non-judgmental, high energy, and chaired by an enthusiastic facilitator.
  1. Escalate all problems upward to senior management. In fact, people lower in the organization are often closer to the customer, and have more insight into what works and what doesn’t. Avoid the macho concept that only top management can solve problems, or address strategic challenges. Decisions made lower down always get more buy-in.
  1. Pervasive focus on efficiency rather than innovation. There is nothing wrong with a focus on making the current business model work better. Yet ‘better’ sometimes requires ‘different’ (innovation), rather than just more efficient (faster or cheaper). An exclusive focus on efficiency is a dangerous and limiting to long-term growth.
  1. Promote the belief that hard work will solve all problems. Often we need to find a different way of solving a problem than just to work harder at the old way of doing things. Every working day needs time for some fun, some lateral thinking, some wild ideas, and some testing of new initiatives. Make sure people take time to look for new opportunities.
  1. Plan in great detail and avoid things not in the budget. Markets and needs change so quickly these days that the view we had last week can be out of date today. Business plans should be loose frameworks to be used as guidelines rather than detailed route maps. Budgets must be reviewed monthly for adjustments to accommodate innovations.
  1. Create a culture of finding blame for every failure. Many innovation projects will fail, but are still worthwhile, because only by trying them can you determine whether a promising idea is a dud or a winner. If people fear they will be blamed for failures, they will quickly avoid attempting something new. Encourage an entrepreneurial culture.
  1. Provide bonuses for volumes, not milestones. Typical incentives give percentages of quarterly revenues and contribution as rewards for success. You need different rewards for a team running an innovation project, such as reaching agreed milestones. An even better alternative could be stock options, linked to the long-term success of the company.
  1. Always promote from within rather than seek fresh blood. Promoting from within is generally a good thing, but should not be used exclusively. For real creativity and innovation, an outsider not bound by your company cultural assumptions and beliefs, and bringing a new set of experiences to the table, will see and fight for new opportunities.
  1. Assign innovation projects to production organizations. Existing production teams are generally too busy meeting monthly deadlines and targets to give new innovations the attention they need. It is better to put new products or services into a new or special department, sometimes known as an innovation incubator, to get the focus they require.

Creativity and innovation are fragile business elements, and they can be easily starved, smothered, and trampled by the larger daily operational demands and old ways of doing things. Business leaders, and every member of their team, need to proactively use lateral thinking skills to develop and nurture creativity and innovation. Your long-term business survival depends on it.

Marty Zwilling

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