8 People And Process Skills Required In Any Business

As an investor in startups, I most often see entrepreneurs who are technologists, or at least have a real passion for a specific product. They rarely highlight their marketing and relationship skills, even though, in my experience, these are more often the key to success in business than product skills. I’m a believer in the old saying that investors look for great people, more than great ideas.

During my time in Silicon Valley, I was struck by the fact that most successful entrepreneurs seemed to personally know and regularly hear from all the “movers and shakers” who had the investment capital and leadership they needed. In addition to listening, they spent much of their time communicating their vision and marketing themselves to everyone they encountered.

For example, even though Mark Zuckerberg built Facebook as an innovative product, most experts believe it was successful due to his relationship with Peter Thiel and other top VCs that he convinced to invest early. While these investors, and early customers, will always argue that they found you, I’m convinced that there is no substitute for aggressive networking on your part.

Implicit in effective marketing of yourself and your solution are a set of skills that every professional needs and can develop over time in business, whether their focus is on career advancement, or starting your own company. Here is my list of key drivers that I find critical to thriving in big businesses, as well as startups:

1. Networking to build and maintain key relationships. Relationships are key to finding opportunities, building trust, and continuous learning. All businesses these days are too complex to be one-person shows, so you need all the complementary held you can find to keep up with customers and competition, fill your expertise gaps, and scale the market.

2. Marketing your personal brand and your vision. Selling yourself requires an ongoing confidence, without bragging, to relate your vision of the future, in conjunction with accomplishments of the past, in a credible story that illustrates your leadership and results to date. The best marketing requires storytelling skills, with emotions and values.

3. Ability to relate aspirations to customer needs. You need to show insights to real customers and their needs, that get beyond your passions and projections. Typically this means describing interactions with customer groups, real customer feedback, and showing an understanding of price sensitivity, alternatives, and competitive offerings.

4. Maintaining an insatiable curiosity about change. Great business leaders, including Bill Gates and Warren Buffett, are constantly asking questions and reading books about new technologies, new cultures, and new business opportunities. They mentor each other, and seek out experts in domains outside their current expertise and experience.

5. Assembling a winning team and delivering results. Here your challenge is to show that you can lead and motivate others to make things happen. You can’t build a business or deliver results alone. Many entrepreneurs try to do the whole job alone, or surround themselves with “yes” people, or count on family and friends to back them.

6. Negotiating outside partnerships and vendors. Just like you can’t start a business alone, you can’t scale the business without external partners with expertise and access to specific customer sets, channels, manufacturing, and support. You need to highlight value for all parties to make every deal a win-win for all, rather than win-lose.

7. Using metrics to measure results and commitments. Managing people and results require the ability to track progress and reward the right people. Some people try to do this based on gut feel and emotions, but full accountability and engagement means data and real-time feedback for credibility. Keep the focus on efficiency and growth.

8. Managing time and priorities for maximum impact. The best entrepreneurs and business professionals always find time for strategic thinking and new ideas, no matter how many times they have to say “no” to immediate demands, or work extra hours. They prioritize tasks, define milestones, and measure results versus activities completed.

Business success is all about working with people, inside the company, outside with investors and partners, and always with customers. These skills, including effective communication, combined with discipline and a positive attitude, are what it takes to set your business apart from competitors, an make every interaction a memorable experience for you and your customers.

Marty Zwilling

*** First published on Inc.com on 11/16/2022 ***

7 Staffing Strategies That May Cost You Your Business

Business success is all about having the best team, yet the average entrepreneur has little prior experience with hiring people and building top-notch teams. It’s no wonder that 45 percent fail in the first five years, and an even smaller percentage ever see a return for their years of effort. Most new entrepreneurs assume their passion will attract and motivate the right team members.

In reality, motivation and passion are necessary but not sufficient to build a business. Higher motivation does not overcome role mismatches, poor communication, or culture differences. Hiring in any new venture needs to be a structured and high priority task, not the ad hoc informal process I see in many startups that are struggling to grow:

1. Crisis mode hiring rather than planned team growth. Hiring requirements must be anticipated and implemented with the same precision and tracking as manufacturing volumes, sales leads, and customer service. Crisis mode hires too often get done without due consideration for strategic fit, training requirements, and cultural considerations.

2. Hiring before organizational structure is defined. The requirements of the desired organization need to be formalized before people are hired. Hiring good people without a strategy and structure invites inefficiency, low morale, and chaos. My recommendation is to hire core executives, and have them define, justify, and build their organizations.

3. Utilizing unprofessional sources for candidates. Trying to save costs by seeking resumes on the Internet will result in poor quality candidates, more time required for screening and interviews, and high turnover. I’m not suggesting executive search firms for every startup position, but national recruiting organizations will get better results.

4. Poorly defined and executed hiring process. The best candidates quickly figure out that companies that don’t respond, demonstrate chaos during interviews, or keep delaying a decision are not a good opportunity. Less qualified prospects don’t have alternatives, so they tolerate the frustration, but may return the favor as an employee.

5. Don’t bother with previous employment follow-ups. Some candidates can talk a great story, but have trouble delivering, or may have team relationship challenges. Your gut-feelings are important, but need to be validated by normal background and reference checks. Candidates with few credentials on paper may be your best growth candidates.

6. Quick to hire and slow to fire. We all make staffing mistakes, so it’s most important to quickly fix them, before the morale of the whole team is impacted, or your business loses some key customers. I recommend a thirty to ninety-day trial period, defined in writing, where either party can terminate the relationship without recourse. Assigning and measuring early milestones is a must.

7. Failure to include company culture in the hiring criteria. Every company and team develops a unique culture of work flexibility, personality, and communication that must be matched to every new hire, independent of job qualifications. Thus every serious candidate should be vetted and approved by peers, as well as company executives.

Making the right staffing decisions, and doing it efficiently on a timely basis, is critical to getting entrepreneurs and their startups to the next level. A great team can turn even a mediocre strategy and solution into a successful business. On the other hand, even the best solutions and ideas will fail as a business, if excellence in execution is lacking.

Entrepreneurs who can’t find the time to focus on hiring until it’s a crisis are doing themselves and their business a disservice. Making late or poor choices will cost you time, money, customers, and may cost you your business. You need the very best to maintain a competitive edge, and get the satisfaction you want for you and your team members. It won’t happen by default.

Marty Zwilling

7 Winning Strategies For Utilizing Startup Advisors

In my role as an angel investor to startups, I’m struck by the broad variety of advisor strategies I see in investor presentations and business plans that cross my desk. Some entrepreneurs are “lone rangers,” never mentioning any outside guidance, while others tout dozens of advisors. In my experience, both of these approaches will likely have minimal value for your venture.

Few entrepreneurs, no matter what their background, have the breadth of experience and expertise to face all the challenges of a new startup without relying on some guidance from an engaged and committed advisor. Even the best of us needs someone we trust to bounce ideas off, or challenge our perspective on a regular basis. That’s the function of a good advisory board.

Thus I believe every smart investor, potential partner, or critical new hire will look for a properly built advisory board as a key criteria before selection or making a commitment. In my experience, the key parameters for building that winning advisory board should include the following:

1. Select people who fill gaps in your own team. If your startup team is highly technical, an advisory board member with a strong financial and business background clearly adds value. In other cases, an advisor with strong customer, distributor, or celebrity status might be important. A long list of friends or associates is usually considered a negative.

2. Keep the advisory board to a manageable size. Communication and organization is always a challenge, so three advisors is about the maximum that any entrepreneur can handle. If you have more, they better be major investors or partners who will likely be part of your formal Board of Directors at a later stage. Advisors in name-only will hurt you.

3. Compensate advisors for their time and commitment. While it’s possible to have reciprocal agreements or friends willing to seriously engage, most often you get what you pay for. A common stipend might be one percent of your stock, or a few thousand dollars annually to cover expenses. Don’t expect valuable and busy people to work for free.

4. Establish advisory board agreements to set expectations. As you add a member to your advisory board, you should give them an agreement in writing on what is expected in terms of time, responsibilities and term of office. This will assure no surprises on either side on role responsibilities, confidentiality, level of availability, or decision authority.

5. Budget your time and effort to effectively work with advisors. One of the biggest mistakes I see is an entrepreneur who only communicates with advisors in a crisis (too little, too late). Recognize that it takes a minimum of a couple of hours a week to meet with the right advisor, and communicate status to all, in addition to more hours up front.

6. Schedule and prepare for regular advisory board meetings. In addition to individual advisor meetings, you should schedule a meeting of all advisors each quarter. This should be structured and run as a formal Board of Directors meeting, including major milestone achievements and plans, as well as strategy and issues discussions.

7. Don’t be hesitant to add or subtract members as your needs change. As your startup grows into a business, you may hire a CFO to replace your financial advisor, and find you need an advisor in new customer segments. A good advisory board gently evolves into a formal Board of Directors without upheavals or changes in direction.

Advisory boards that exist in name only, or have non-committed members, can actually have a negative value to the entrepreneur, by elongating decision times and providing poor quality guidance to the business. This often leads to a death spiral for the board, and subsequently for the startup. Thus the negative implications go far beyond the difficulty in attracting investors.

Smart investors believe that a top quality team is more important to success than any given startup idea. An engaged advisory board is an inexpensive way to add power to your team where and when you need it most. For long-term success, make it happen, and highlight it in every pitch and business plan you produce. There’s no better way to use your precious time and resources.

Marty Zwilling

7 Startup Costs That You Assume With Outside Funding

One of the myths I often hear as an advisor to many entrepreneurs is that their lifestyle would somehow be better if they could more easily find other people’s money to build their startup. They don’t realize that according to many experts, more than 90 percent of satisfied entrepreneurs use bootstrapping, since other people’s money always comes with strings, most of them negative.

For example, Bill Gates founded and grew Microsoft, and Michael Dell built a great technology company, both with no outside funding until they went successful enough to go public years later and sell shares to common stockholders. In fact, Michael Dell privatized his company again in 2013 for a few years, in his words to “unleash again the passion of our team members.”

Maintaining your team’s passion and freedom to focus first on innovating for customers are only a couple of the reasons for thinking hard before you seek money from crowdfunding, angel investors, venture capital organizations, or attempt to qualify for a public stock offering. Some of the specific challenges that always come with other people’s money include the following:

1. You will stay awake nights worrying about how to pay it back. Most entrepreneurs never forget for a moment that having investors means owing money, even if they can legally argue that equity is not debt. Many times friends and family have been broken by failed investments. Usually it pays to move a startup slower rather than risk relationships.

2. Investors want board seats and a vote on key decisions. Of course, this can be positive if you really need the help and experience in making key decisions. But I suggest that a small advisory board with the right people might give you better guidance (no near-term financial bias), and you can always choose to ignore it if your insights are strong.

3. Pre-defined milestones and deadlines in an uncertain world. No entrepreneur enjoys the stress of committing to dates and results on an innovative and unpredictable journey to change the world. Yet every investor, including a rich uncle, will likely ask for specific progress evidence. Bootstrapping gives you the flexibility to explore creative alternatives.

4. You left your corporate job to get away from budgets. When you are spending other people’s money, they want to know how much and when. Startups don’t come with the discipline on payables and receivables that you left at corporate. Investors quickly learn the only control they really have is financial, so they will use it to apply any constraints.

5. Pivots become a source of pain rather than positive learning. Every startup I know has had to pivot at least once, no matter how certain they were of their solution and market. Pivoting early brings satisfaction and saves money and time, except when you don’t pivot due to investor evidence required, and the pain of explaining your mistakes.

6. Explaining actions to investors takes time you don’t have. Very few entrepreneurs I know have the patience and time to communicate to the satisfaction of all investors. It’s usually the small investors who want the most frequent updates, or phone calls before every direction change, and investor relations costs only go up as your business grows.

7. Investors will become the toughest boss you ever had. It’s very common for founders who find venture capital funding, to soon find out that they are being replaced by a CEO who has “more experience.” Other founders, even with experience, are forced out by disagreements over strategy or progress. You won’t be fired if you use your own money.

Of course, bootstrapping does imply living within your means, and it may require you to postpone your startup efforts while you build up an investment fund of your own. It also may mean finding alternatives to cash for attracting team members, or bartering services to expand your access to infrastructure or expertise. It also may just mean taking less money later.

On the other hand, avoiding outside funding means you can apply your passion and innovative solution without investor challenges, and remain in full control of your destiny. Isn’t this why you were attracted to the entrepreneur lifestyle in the first place?

Marty Zwilling

5 Keys To Breaking Through Success Barriers At Work

After many years working in business and investing in startups, I’m convinced that the primary reason for new business and career failures is NOT a lack of skill or money, but people giving up too quickly on their dreams and goals. Great businesses and great leaders never give up, especially as pivots and interim failures provide learning opportunities to recover from setbacks.

Thomas Edison is a classic example. The first electric bulb was actually invented by Sir Joseph Wilson Swan, who demonstrated the concept, but gave up trying to develop a practical product after only three attempts. By contrast, Edison persevered and designed a working light bulb after thousands of failures. He went on to start many successful companies, including General Electric.

I recently found a wealth of practical guidance on how to build a perseverance mindset and use it to overcome adversity, break through barriers, and keep moving forward to success, in a new book, “Win When They Say You Won’t,” by Daphne Jones. She is a former Fortune 50 executive and innovation thought leader who developed her own actionable system to overcome obstacles.

Adding my own insights from experience, I will summarize here her five key principles for persevering and finding success in business, despite the setbacks and barriers that we have all faced:

1. Be resilient and treat setbacks as a distraction. We all encounter issues and challenges as we pursue our goals in business. Building your resilience by never giving up as you work to neutralize these will get you back to executing your plan of action, rather than letting stress and fear of failure drive you to throw in the towel.

   It's worth the effort because of the impact that resilience (or lack thereof) has on our behaviors, attitudes, outcomes--and even health. Research has found that people with low resilience are four times more likely to experience burnout, or even premature death.

2. Don’t let anyone kill your dreams and passion. The challenge here is to choose your friends and relationships carefully. You will learn to recognize that some friends and colleagues are always downers, and get their satisfaction from snuffing out your aspirations through negative thinking. Avoid these and build relationships with winners.

   In my experience, you unintentionally tend to think and act like the people you spend time with. People who associate with quitters tend to become quitters themselves, rather than the other way around. Broaden your sources, including industry speakers and experts.

3. Focus on your performance, image, and exposure. No matter what is going on in your business as you work toward your personal vision, always be sensitive to your exposure, image, and personal brand. You need to take responsibility for selling your value to the right people, as well as building relationships with leaders who can help you.

   A first step is empowering yourself to achieve success and feel satisfaction from doing your job. Empowerment starts by developing a small set of specific achievable goals for the period ahead and then pushing yourself to achieve and celebrate completed results.

4. Build and maintain your emotional intelligence. You need to ensure that you are executing a viable plan with self-awareness, self-control, empathy, and good communications. Don’t be hesitant to use coaches, mentors, and other resources to test and improve your image by others, and your perceptions of business realities and biases.

   Based on my many years of experience in business as an executive and consultant, I have long been convinced that emotional intelligence (EQ or EI) in business wins over logical intelligence (IQ) every time. Don’t let your and their emotions drive your actions.

5. Keep thoughts, actions, and results growth-oriented. Your mindset needs to stay fixed on learning and change, rather than risk-averse and negative. Be willing to pivot or persevere, but never quit. If you don’t like the results you are getting, seek to change the way you think. Your thoughts determine your actions, so stay confident as you iterate.

   Begin by asking more questions and being more curious about everyone you meet, their journey, experiences, and what they can teach you. There is always more to learn, and great business leaders, including Bill Gates, still block out calendar time for learning.

In summary, perseverance is essential in the workplace because it allows you to continue working towards your goals even when things get tough, and they will get tough. The business world today is very competitive, and customers are more and more demanding. I urge you to practice the strategies outlined here and maximize your business survival and success today.

Marty Zwilling

*** First published on Inc.com on 11/10/2022 ***

8 Negative Reactions To New Ideas And How To Prevail

One of the complaints I often hear from engaged business professionals is that their new ideas, innovations, and change recommendations are unfairly criticized or dismissed without analysis. The result is fewer and fewer new ideas are volunteered by prospective leaders and key team members, and the business suffers from poor customer satisfaction or loss of market share.

In many cases, the ideas may be small ones, such as starting a promotion to kick-start sales on a stalled item, or suggesting a huge strategy move to acquire Netflix and supplement an already healthy Blockbuster DVD rental business. The challenge is for leaders to really listen to their team and the market, and for every team member to anticipate pushbacks and respond effectively.

In my experience as an advisor and mentor, I have assimilated the following most frequent negative reactions from others to your ideas, with my own suggestions and feedback from other experts on how to counter them, build your credibility, and be more productive:

1. The implementation does not fit the way we do things. This argument is actually not attacking the idea, but shows a generalized resistance to change. Your challenge is to show examples of forward-thinking companies that are ahead by doing things differently. Consider getting the help of outside consultants and advisors to overcome obstacles.

2. People perceive that this idea has been tried and failed. Your challenge here is to differentiate this situation, or the specifics of your proposed implementation, from others that have gone before you. Find other situations that led to success, or explain why the environment, competition, or opportunity has changed to reduce the risk of failure.

3. Your idea has unpredictable negative side effects. This usually means that you need more specifics to offset the projected qualms. Here I recommend that you narrow your focus, if possible, and document specifics of impact, cost, and value. Show how your specific implementation plan will include antidotes to offset potential side effects.

4. Your proposal is dismissed as being too risky. Rather than trying to argue defensively that the risk in minimal, you should focus on quantifying the potential reward. Do your own research and gather supporting facts, rather than firing back with emotion and gut feel. Input from outside experts and real customers is always a credibility booster.

   In addition, you may need to remind your leaders that doing nothing also has the risk, of loosing to competitors and new customer needs. Make sure they see the difference between your smart risk, which can be managed, and bad risks, which have no recourse.

5. The suggested change won’t create desired results. The best response to this qualm is to fashion an experiment to demonstrate at least a small change in the right direction. Show that the time and resources to do a trial are manageable, and the potential results are well work the effort. Incremental small experiments can easily be scaled into success.

   In fact, Jeff Bezos of Amazon credits much of their growth and success to incenting regular change experiments. Bezos believes that if you double the number of experiments you do, you’re going to double your agility, and outpace your competitors.

6. You don’t have the domain experience for credibility. The best counter to this criticism is to do your homework with third-party resources to find similar ideas that worked in related domains, and get expert validation to support you. If you sense a challenge to your leadership, ask for an opportunity to bring in outside domain experts.

7. We don’t have the funding for any changes right now. Blaming the budget or the current state of the business for not considering any new ideas is a head-in-the-sand excuse. Your response at this point must be a factual, not emotional, analysis of the cost versus benefit of your idea. Show how costs are containable, and returns come quickly.

8. Your idea is opposed by people with a hidden agenda. The best strategy here is to surface the ulterior motives without being defensive or letting emotion get the best of you. Use your relationships with trusted leaders to highlight specific value to customers and to the company, while pointing out hidden agendas and ask leaders for their support.

I believe a steady stream of innovative new business ideas and changes is the key to long-term business success, as well as your career growth, so don’t give up on bringing ideas forward and customizing your sales approach to beat common rejections and pushbacks. True business leaders will listen to all ideas, and appreciate your contributions to long-term business success.

Marty Zwilling

*** First published on Inc.com on 11/7/2022 ***

7 Team Building Principles For Connected Leadership

Most startup ideas begin in the mind of an individual, but an idea is not a business. It takes a team, with effective leadership, to build a business. Many aspiring entrepreneurs default to team leadership by domination and control. Yet in my experience, the best entrepreneurs quickly learn the art of people connection. They connect and inspire the right people to achieve more with less.

Connected leaders often become transformational for people and the company, as they use their people insights to incent a new level of performance, leaving team members feeling proud and deeply satisfied. Richard Branson, for example, often makes a point of rewarding outstanding people by taking them aside and telling them that they are now in charge of the new company.

The principles of connected leadership are outlined well in a classic book, “The Vitality Imperative,” by Mickey Connolly, Jim Motroni, and Richard McDonald. As principals of the Conversant consultancy, they speak from experience in improving people connectivity and leadership through working with over 400 organizations in 100 countries.

While their focus has been primarily larger organizations, I believe the principles they espouse are equally applicable to startups and small businesses. Here is my extrapolation of their key elements of connected leadership into the entrepreneurial world:

1. Be visibly present and aware of individual sensitivities. In the chaos of a startup, it’s easy to have “not enough time” to listen and relate to individual members of the team. As a result, impatience increases and effectiveness declines, leaving even more to be done. Presence without prejudice increases leader trust, and enjoyment of work by all parties.

2. Seek to appreciate team goals, worries, and circumstances. People in a new venture are not mechanical elements. Align your leadership practices with human nature, which requires empathy. In any organization, large or small, empathy improves accountability, accelerates learning, increases influence, and facilitates future planning.

3. Define and highlight a business purpose, beyond profit. A common purpose creates a community. Process without purpose leads to frustration and bureaucracy. The tangible benefits of a purpose, such as reducing environmental pollution, include making work more meaningful, promoting teamwork, and improving personal role commitment.

4. Speak the truth, even if painful, over avoidance and deception. Authenticity creates trust, accelerates the solution process, improves agility and resilience, and inspires innovation. Some leaders avoid candor to reduce employee fear, and others to induce fear. But the most destructive fear is the fear of deceit, only eliminated by authenticity.

5. Outline future potential for the business and the person. Connected leaders don’t let probability and ordinary work destroy possibility. Seeing wonder in the future breaks the grip of the past, redeems mistakes, creates options, and ignites vitality. This leads to new connections and creates new possibilities for the venture and the person.

6. Build a culture of innovative evolution after initial revolution. Startups often begin with a revolution, but continuous revolution is risky and stressful. A better sense of timing is a commitment to an agile, ever-evolving venture, where the return on investment can be predicted. This improves team leverage, getting more out of time, money, and talent.

7. Leverage small surprising results into repeated cycle momentum. Momentum is a powerful multiplier that supercharges community, contribution and choice. Surprising positive results are energizing, cause people to update their beliefs, and cause positive chain reactions. Connected leaders share the lessons and show due appreciation.

The vitality of a startup team, and the founder leadership provided, are more key to startup success than the potential of the initial idea. This is why professional investors will tell you that they invest in people, rather than ideas. How much value can the principles of connected leadership bring to your new venture?

Marty Zwilling

7 Realities Related To Customer Value Disrupt Growth

As a startup advisor, I see too many entrepreneurs get distracted by technology or their favorite cause, and then wonder why they can’t find an investor, attract customers, or build a long-term business. Every startup needs to start with an honest assessment of how they provide customer value, and how that translates into a sustainable business return for stakeholders and growth.

Customer value used to be a simple concept of how much they pay for a solution, compared to their incremental cost reduction driven by your business. Now these principles are complicated by the worldwide instant access to many competitive alternatives, indirect social and environment impacts, and the velocity of change enabled by the pervasive market move to digital.

The market is now a chaotic swirling storm of change, which is characterized in the classic book, “Digital Vortex,” by Jeff Loucks et al, as causing digital disruption on a massive scale. In this new world, finding customer value is elusive, where out of nowhere startups and other tech savvy disruptors attack, and your most loyal customers bolt for the door at the slightest opportunity.

The authors focus on the many new principles of customer lifetime value in the digital disruptor age, which I believe every business executive and entrepreneur needs to understand, in order to make their business more competitive and investable. These principles include the following:

1. Free and ultra-low cost may no longer be competitive. The old saying that it’s pretty hard to compete with free no longer holds, when cost is not the primary customer value element and free is the norm. Customers now put big value on experience, social impact, empowerment, and feedback. Value to second-order customer advertisers is key.

2. Internet disruptors make prices and margins transparent. A wide range of digital comparison-shopping tools enable customers to see differences, and instantly source at the lowest cost worldwide. Competitive customer value that can be monetized for stakeholders has to go beyond the short-term value of special deals and coupons.

3. Customer empowerment and digital tools removes middlemen. Circumventing middlemen (going direct) do-it-yourself (DIY) and placing the customer “in charge” are core element of digital disruption to traditional customer value levers. For example, Netflix uses a digital model to unbundle television programming, creating new customer value.

4. Digital customization creates unique experiences for each customer. Value is now derived by tailoring the product per customer, or interpreting a user’s location and specific needs to create an experience that maximizes value. Even advertising and search results are personalized per user for maximum impact and improved business return.

5. Instant gratification requires automated digital fulfillment processes. This business model gives customers the value they want without have to wait, either by delivering physical products quickly, or by providing digital versions instantaneously. In today’s world, time is often more valuable then margin to the business as well as the customer.

6. Digitizing processes reduces friction and increases convenience. Automation provides customer value by using technology to complete tasks and arrange for the completion of tasks by others. Customers and businesses alike benefit from not having to enter the same data multiple times, and making better decisions from accumulated data.

7. Digital platforms create network effects that multiply customer value. Network effects are huge value generators. They span the gamut from peer-to-peer interactions to crowdsourcing, gamification, and communities. They are a powerful competitive force, once successfully established, that is difficult to dislodge with winner-take-all potential.

Digital disruptors have also introduced the concept of value vampires, who shrink the overall revenue and profit pool in a market to gain competitive advantage. On the other side of the equation, every business needs to find value vacancies, which are market opportunities that can be profitably exploited via digital disruption.

Thus customers and investors still need to see customer value as the key deliverable from your business, rather than technology or a “save the world” mission. But in this Digital Age, customer value has many new dimensions. Make sure you are focusing on the right ones for your customer segment, and the return for your business will let you live long and prosper.

Marty Zwilling

8 Strategies To Create A High Team Engagement Culture

With today’s interactive social media and the real-time Internet, both customers and employees see inside your company easily, so you can’t hide your real company culture. At the same time relationship perceptions have become the biggest drivers to customer loyalty and employee engagement. Thus in every business, big or small, culture can make or break your success.

Examples of companies well known for their winning cultures inside and out include Apple and Google. In both cases, their products are not generally cheaper or unique, but the mindset behind how they do what they do, and think what they think, makes them stand out. Others, by most accounts including Blockbuster and JCPenney, lost their focus on culture, and paid a heavy price.

In fact, most entrepreneurs and executives today recognize the importance of building and maintaining the right culture, but many are not so clear on how to do it, or assessing where they stand in the process. To that end, I was impressed with the specifics provided in a classic book, “Nimble, Focused, Feisty,” by Sara Roberts, a “go-to” expert on organizational transformation.

What I have seen in startups correlates well with Roberts’ evidence that there are three basic elements of a winning culture mindset today – fast is better than big, possibility over profitability, and being passionately outward-directed to customers and employees. I support her outline of several guiding principles for any company on how to achieve and maintain this mindset:

1. Remain nimble and ready to pivot. Winning organizations have a culture of no expectation of always doing what they are currently doing. They know how rapidly things change, and that today’s positive reality may not carry them to where they ultimately want to go. They are always on the lookout for new opportunities and innovations.

2. Structure for speed in making changes. Speed in any organization is largely a function of hierarchy, trust, and the ability to make decisions quickly across the organization. The primary key is establishing a culture that relies on values, rather than rules, to guide every action. Teams and individuals at all levels must be motivated to make decisions.

3. Solve problems by co-creating and collaborating. Effective collaboration requires bringing together a variety of contributors who trust each other to get to the best solution. These days, that includes the initiative to bring up issues and tap the wisdom of “crowds” through social media, employee forums, and listening to industry influencers.

4. Lead with purpose as a balance to profit. Increasingly, the landscape is shifting from an emphasis on “how” to an appreciation of “why,” both inside and outside the company. If executives don’t see social good or higher purpose as important to success, customers and employees will remind them – overtly by feedback, or passively by deserting them.

5. Maintain a customer-centric focus. Businesses oriented primarily toward near-term shareholder value make themselves vulnerable in the long term. If you focus on what’s best for the customer, both near-term and long-term, you will see where customers are headed, and can plan change versus crisis reaction. Talk with real customers constantly.

6. Find leaders who are courageous connectors. Courageous leaders acknowledge doubt and gaps, but still make decisions with confidence. Connector leaders enable their teams to navigate other organizations effectively, connect them with required resources, and expand their sense of possibilities and purpose. Set the culture by example.

7. Build teams with people who get things done. A nimble organization needs doers and makers. Makers are not scared of taking action; in fact they’re biased toward action. They ask forgiveness rather than ask for permission, are motivated by results, and naturally collaborative. Leaders help most by not putting barriers in the way of their people.

8. Winning cultures need consistent people practices. The best team cultures are built and maintained by systematic and deliberate hiring. Don’t hire only under duress, or settle for less than the best fit. Involve the team in selecting the best fit, culture matching, and getting “buy-in” from all the right players. Motivate with meaning, not just money.

For companies to remain successful in this new era, they need a culture that is proactive rather than defensive. It’s purposely designed, leveraged, and honed to be nimble in addressing change, customers, and integration of purpose with business value. How long has it been since you have reviewed your culture at the employee and customer level? Surprises are expensive.

Marty Zwilling

6 Hurdles To Deep Relationships With Business Clients

Selling services has always been about relationships, but the challenges of building relationships with services clients have exploded. Customers today extrapolate their relationships not only from personal contact, but from every aspect of their interface with your company, including web site and social media interactions, access to peer reviews, as well as the actual services experience.

In addition, as every business becomes instantly global via the Internet, it’s virtually impossible for you to touch every customer personally. Thus services experiences and relationships tend to be based more and more on new media and technology. Customers today may actually feel a personal relationship, or an unsatisfying one, without ever interacting with you or your team.

I saw these modern challenges and some positive guidance summarized in the classic book, “Service Excellence,” by Ruth N. Bolton, a distinguished Marketing Educator Award winner at the W.P. Carey School of Business. I agree with her focus on six challenging characteristics, both old and new, of every services business:

1. Intangibility of a customer experience with services. Customer services experiences can’t be seen, felt, tasted, or touched in the same way that people interact with tangible goods. Services experiences are different for each client, so it’s important to customize experiences and timing per customer. If your business doesn’t offer personalized services, don’t expect good relationships.

2. Relationships are a function of customer culture. For consistency and efficiency, services companies have traditionally minimized personalization. Yet today, people of every culture worldwide expect every relationship to relate to their unique perspective. Companies need service strategies that increase spontaneity to enhance experiences.

3. Experiences are more visible to other customers. In some cases, such as in a hair salon, services are delivered in view of other customers who may be impacted by your experience. In all cases, experience details are quickly and easily communicated to others via Facebook or Yelp, meaning a relationship will impact many others very quickly.

4. Services experiences cannot be inventoried. Service organizations must find effective ways to manage capacity and thereby match the supply and timeliness of services with customers’ usage of them. It is very important for service companies to use and market peak load pricing, seasonal, and customer scheduling without impacting relationships.

5. Infusing technology within the customer experience. Customers now expect services to be more technology-enabled, such as online banking, parcel tracking, transportation on demand, and smart home security. The overall experience and relationship derived are more and more set by the technology interaction, rather than personal interaction.

6. New media shapes and reflects the customer experience. Unlike traditional media, which is not interactive, social media provides for and customers expect targeted, personalized, and socially responsible communications. These become a key part of your engagement and relationship, and also define community and demographic associations.

The rise of the “sharing economy” has sparked intense interest in services that allow people to co-produce the service in new ways, such as Airbnb for accommodation and Uber for transportation services. Thus your relationship needs to consider ways that customers can participate through spontaneous and discretionary contributions to your services, with variations for each market segment.

It’s time for all services organizations to take a future-oriented view of customer experience and relationships, rather than the traditional retrospective view. Services are no longer a simple people-to-people business. Relationships and experiences are now driven more and more by interactive media and smart technology. If your services business isn’t innovating with the market, it’s falling behind.

Marty Zwilling

7 Challenges For Good Businesses To Achieve Longevity

Every new venture that survives the first five years starts to drift away from their entrepreneurial thinking, and assumes they have achieved the path to longevity. In fact, even within Fortune 100 companies, almost 90 percent have encountered growth stalls or flirted with failure, or worse, in the last 50 years. No company can afford to lose the agility, flexibility, and innovation of a startup.

Examples of great companies that have achieved longevity, by initiating major changes, include American Express (originally express mail), IBM (tabulating and computer hardware), and J.P. Morgan (chemical manufacturing). Others, including Eastman Kodak (film and cameras), Pullman Company (railroads), and RCA Victor (radio) never kept up with change and are gone forever.

The many ways that great firms can slip away from entrepreneurial thinking were highlighted in the classic book, “Achieving Longevity,” by Jim Dewald, based on his own experiences as a corporate executive, entrepreneur, and Dean of the Haskayne School of Business. Here are a few of the key challenges he outlines that I have seen as well:

1. Competitors are easier to quantify than new opportunities. Competitor statistics are the domain of analysts, financiers, and shareholders, so naturally it is attractive for companies to focus on them primarily. Undefined opportunities which may be built from innovation are the stuff of dreams and passion, relegated only to entrepreneurial thinking.

2. Companies follow each other rather than the market. Change is hard. Businesses firmly ensconced down an existing path find it hard to leave their comfort zone or jeopardize current revenue streams, and tend to prioritize the value of incremental change, even in the face of new markets, technology, or economic conditions.

3. The future is extrapolated from internal data analysis. Metrics and observations while running the existing business become the primary basis for future projections. This data reinforces what they already know and believe, so a divergent path rarely looks attractive. The result is a self-fulfilling prophecy that often leads to disaster.

4. Efficiency focus strips away resources from innovation. Through cost-cutting and highly-specialized hiring, firms unintentionally weed out the capacity to innovate and adapt to change. The drive for resource-based advantage can be profitable for big companies, but it is always temporary, never permanent.

5. Penalties for management learning experiences. In an entrepreneurial venture, errors are expected, and even celebrated when positioned as learning opportunities. In stable corporate ventures, mistakes are seen as a signs of incompetence, and penalized by loss of bonuses or position. As a result, undefined new opportunities are deemed too risky.

6. Focus on data-driven leadership versus passion. Strong creative views or even arrogance in new realms by entrepreneurs is expected and often revered, as was the case with Steve Jobs at Apple. In corporate boardrooms, a show of hubris or emotion is deeply troubling, and can end careers. Logic and data-driven leadership is the norm.

7. Intolerance for pivots and failed experiments. Every startup I know has pivoted at least once, and expects failed experiments to lead them to the true market. In corporate environments the cost in time and dollars of a pivot or failed experiment can be huge, like turning a large battleship. Stakeholders and board members alike react very negatively.

What is most ironic is that the inverse of many of these challenges is critical to success in the first five years of a new venture – focus on competitors, generating internal data and analysis, emphasizing data-driven leadership, and creating standardized repeatable processes. Many see these activities as the elimination of entrepreneurial thinking, for stability and endurance.

My message is that the pendulum has to swing in concert with the market and the economy, as well as the maturity of the company. Today’s market is extremely volatile, where unprecedented change is the norm, and entrepreneurial thinking is the only way to assure longevity. Maybe it’s time to take a hard look at the balance in your own mindset and your business.

Marty Zwilling

7 Tips On Advancing Your Career To Being A Great Boss

A common complaint I hear in my business consulting is that your boss is the problem, and you could fix the business if you only had the opportunity. When I ask what you are doing to prepare for that role, I usually only hear frustration and a lack of specifics or an action plan. Having spent my career on both sides of the fence, I have found some important things that worked for me.

In my perspective, the key is to practice thinking like you are the manager, rather than a critic or a victim, in every project and professional role you find yourself in. In this context, you will find that your peers will see you as a positive force to follow, and your manager will appreciate the support and your insights, maybe even recommending you for the next available opening.

Of course, the first requirement is to get the education and tools you need to feel confident that you are ready, and have the mindset to be a leader in every role. This alone will improve your productivity and effectiveness in your current role, as well as give you a head start towards a future role, including a management role or starting your own company as an entrepreneur.

In any case, here are some additional key principles that I have learned and recommend:

1. Build win-win relationships, including with the boss. You can’t be a loner or complainer and ever by considered a leader or manager, despite knowing more than the rest of the team. You will always be more effective when people know you don’t struggle to always win at their expense. They will then support you in future leadership roles.

   If the other party, including your boss, thinks you're only looking out for yourself, their distrust and fear will automatically turn the result into a win-lose or lose-lose situation. Your challenge is to convince everyone that you see both sides of the situation.

2. Actively seek guidance from people smarter than you. As satisfying as it is to feel you are helping others at your level or below, you will learn more from people with more role expertise and management experience. Even the smartest team members and executives humble themselves and listen, although the message is often difficult to hear.

   I find that even very smart and successful business leaders, like Bill Gates, still seek and use a mentor they can learn from, such as Warren Buffett. Their relationship is well-known and long-term, and enjoyed by both parties as a continuous learning opportunity.

3. Strive always to be a leader, rather than a follower. Leadership elements include clear communication to all, providing support and coaching where required, and driving activities based on the big picture. If you practice all the key elements of leadership in every role, you will be recognized as a great team member and ideal future boss.

4. Seek to understand the challenges that managers face. There are two sides to every coin, and you need to look at both sides, rather than just your own. For example, in business, owners and leaders create the vision and direction, while management is charged with gaining traction to achieve success. No one has independent control.

5. Accept responsibility for your actions and results. Accountability is a practice that you must impose on yourself to be effective and appreciated by others. When you demonstrate this, you will be recognized as a natural leader and peers will seek your advice and counsel. Entrepreneurs and business leaders cannot escape accountability.

6. Free up time for high-priority tasks and helping others. Work on habits and tools that improve your productivity and availability. We all know bosses and peers who are always busy, but real results are not apparent. Learn to say “no” with a smile on your face, so that your image is not one of working on many things, but rarely generating results.

7. Share your successes and credit people around you. Make even the smallest victories and steps forward count. Find reasons to share success and celebrate with other team members and your boss. This will make you look good to senior management, build team morale, and improve your image for future opportunities.

With these initiatives, the best potential and real managers always see themselves as their own boss. They look at their boss’s side of the coin, and act as they would expect a boss to act. I recommend this as the best way to assure success in your role today, train your current boss on how to do the job better, and make you the best candidate for future management roles.

Marty Zwilling

*** First published on Inc.com on 10/31/2022 ***

6 Guides To Get You Started Down The Best Career Path

Too many people, young and older, let their career and their lifestyle happen to them, rather than proactively making things happen based on their personal passions, skills, and interests. Others make decisions based on someone else’s interests, such as the father who wants his son to take over the family business, or dreams openly of having a doctor in the family. Neither of these approaches is likely to lead to a satisfying career or personal happiness for you.

These days, with the instant access to information and experts in every field around the world, and the wealth of personal assessment tools available on the Internet, there is no excuse for not exploring and evaluating the alternatives before you make a step forward. A very credible starting point is the classic book “Promote Yourself: The New Rules For Career Success” by Dan Schawbel, managing partner of Millennial Branding, a Gen Y research and consulting firm.

Among other things, he outlines some of the popular assessment tools that I also often recommend as a mentor to entrepreneurs, including the following:

1. MBTI (Myers-Briggs Type Indicator). Myers Briggs is one of the most widely used and recognized career assessments in existence, and does an excellent job of identifying your personality type so you can connect it to the right career and lifestyle. It can also help you better relate to others and become more self-aware.

2. Gallup's Clifton Strength Finder. The focus of this tool is to help you discover your top five strengths and learn how you can use them to excel and perform at a higher level. The creator, Dr. Donald O. Clifton, is widely recognized as the Father of Strengths-Based Psychology, and has helped millions of people around the world discover their strengths.

3. Marcus Buckingham StandOut Assessment. This one builds on the positive premise that the most effective method for improving people is to build on their strengths, rather than correcting their weaknesses. It’s the one to use if you have tried other assessments that claim to tell you who you are, but don't tell you what you can do with that information.

4. Career Key. This one helps you identify careers and even college majors that match your set of interests, traits, skills, and abilities. It was developed by Lawrence K. Jones, a professor Emeritus in the College of Education at North Carolina State University, who specializes in the areas of school counseling and career counseling and development.

5. MAPP™ Career Assessment. The MAPP career assessment is perfect for students, graduates and working adults. You'll get a wealth of information to help find the right career that matches your unique assessment profile. The MAPP career test was one of the first comprehensive career tests online for consumers, with over 8 million customers.

6. Leadership Motivation Assessment. This one tells you how motivated you are to be a leader. After all, it takes hard work to become an effective business leader; and if you are not prepared to put this work in, or if, deep down, you're not sure whether you want to lead or not, you'll struggle to lead people effectively, and not be happy doing it as well.

If after taking one or more of these, you are still stuck on what domain you fit best into, whether you should be an entrepreneur, and how to get started, the following questions should help get those introspective juices flowing into action:

• When have you been the most committed and passionate toward something in your life?
• What talents do you use the most and what are your strengths?
• Which roles and activities did you like and dislike in the past?
• What aspect of those roles did you like the most and least?

After you get your own thoughts and assessment results together, it helps to get some feedback from people you respect, including parents, industry experts, and mentors. An outside perspective can be incredibly valuable as well, and help you narrow down what may seem like a long list, and relate that to the real world. Something you feel passionate about that doesn’t put food on the table, for example, may not be sustainable.

But the time to start is now. The most important point is to plot your own path, rather than be a victim of unpredictable circumstances and someone else’s whims. Don’t let other people be winners at your expense.

Marty Zwilling

10 Classic Rules For Venture Success That Still Apply

In this world of constant change, new technologies, and a thousand cultures, it’s evident and somehow comforting to me that the basic rules for business prosperity really haven’t changed in the last hundred years. Business success is still more about the people than the technology or idea involved. As an angel investor and a mentor to entrepreneurs I still see this every day.

I was recently reviewing a collection of essays by and about Napoleon Hill, “The Science of Success,” who is most recognized as the author of the best seller “Think and Grow Rich” from way back in 1937. Hill attributes his ten rules of success to Andrew Carnegie, who was in his prime well before that, over a hundred years ago, but I believe the principles are still relevant.

Since language and implication have changed a bit since then, I’ll restate Carnegie and Hill’s original principles here, with my own current-day commentary and recommendations added:

1. Definiteness of purpose. Every entrepreneur needs to start by setting a major purpose for embarking down a specific business path. This objective needs to go beyond making a parent or spouse happy, getting rich quick, or advancing a technology. For success these days, the purpose better focus on people, and solve a real problem for customers.

2. Master-mind alliance. Building successful businesses still requires the ability to find and inspire the best people who “have what you haven't,” whether that be skills, knowledge, connections, or funding. Then you must extend these alliances to vendors, partners, customers, and even competitors (coopetition).

3. Going the extra mile. Hill's eagerness to serve others gave him greater opportunities, and this Law of Reciprocity works the same today. Doing more than you have to do is the only thing that justifies raises or promotions, and puts people under an obligation to you.  This is still one of the most important competitive differentiators that you can offer.

4. Applied faith. This is a level of belief that has action behind it. Anyone can have ideas, passion, and faith about an important business opportunity. Yet for most people it’s only a daydream, since they are not willing or able to commit the actions required to deliver. Results are still the only true measure of success in business.

5. Personal initiative. Successful entrepreneurs do what they need to do without being told how to do it. Asking for insight is not the same as asking for the next step, or asking an advisor to make the decision. Great entrepreneurs are proactive, not only in selecting the right idea, but in implementing a product, setting a price, and choosing customers.

6. Imagination. This is the number one skill required for creativity and innovation. Without imagination, entrepreneurs cannot look at a problem from a new perspective. Without imagination, entrepreneurs cannot visualize how various solutions to a problem would work. Without imagination, entrepreneurs can never dream up new ideas.

7. Enthusiasm. This is the contagious quality that great entrepreneurs have to attract correlative passion, commitment, the best people, and customers to their idea and solution. Enthusiasm is one of the most powerful motivational tools in an entrepreneur’s arsenal, and no success will accrue without it.

8. Accurate thinking. Accurate thinking is the ability to separate facts from fiction via deductive reasoning, and to isolate and use facts effectively that are pertinent to your own challenges and problems. When the necessary facts are not available, accurate inductive reasoning or hypothetical thinking is required to fill the gap.

9. Concentration of effort. In current terms this is called focus and determination, to never give up and never be diverted from your purpose. With focus and determination, you and your team will understand what's most important for success, and drive your motivation through the execution steps required.

10. Profiting by adversity. This simply means remembering that there can be an equivalent benefit for every setback. Successful entrepreneurs learn from funding failures, economic adversity, ruthless competitors, and lethargic customers. They insist on greater efficiency, try new business models, organizational improvements, and better cash management.

Carnegie and Hill understood how business success rules were tied to the entrepreneur way back in the early 1900’s, and the evidence is that those rules are still as applicable now as they were then. Business models and technology have improved dramatically, but the power of people with foresight, passion, and determination continues to supersede all these elements.

So the next time you are tempted to broadcast an abstract email to me and other investors on your new “million dollar idea,” make sure you include your track record on how well you stack up against these rules for business success. Investors still tend to bet on the jockey, not the horse.

Marty Zwilling

9 Principles for Getting Along With Everyone At Work

I was always impressed by a few people at work who seemed to get along with everyone, and wondered what I was missing in talent or temperament. After years mentoring young aspiring entrepreneurs, I am now convinced that getting along and becoming more productive with other people is a skill that any professional can learn, or accomplish via a dedicated strategy.

For example, we all have experienced a few difficult relationships, perhaps including an insecure boss, the ultimate pessimist, a passive-aggressive peer, or the perennial victim. Sometimes you can simply avoid these, but more often you have to work in concert with them on a common project or career-risking decision. It is in these contexts that I am often asked for specific advice.

I was happy to find my own insights and recommendations confirmed in a new book, “Getting Along: How to Work With Anyone,” by Harvard Business Review workshop facilitator, Amy Gallo. She offers a set of nine strategies that I will summarize here, and you need to follow to more effectively navigate the complicated workplace dynamics and difficult coworkers that we all face:

1. Focus on your own self-control and their views. Don’t waste time trying to convince a colleague to change. People change only to the degree they want to change. Focus instead on what you can do to match their interaction style and expectation. Look for patience and more subtle ways to influence their views and actions to meet your needs.

2. Recognize that your perspective is just one view. There is rarely an objective truth that everyone sees and accepts. We all come to the workplace with different experiences and a different set of values. You don’t have to agree to get along. You only have to respect each other’s perspective enough to decide on a mutually agreeable way forward.

3. Be aware that you have some prejudices as well. For example, recognize that the affinity bias is the unconscious tendency to favor people who are like us. Confirmation bias is our likelihood to interpret events as confirmation of existing beliefs. Don’t hesitate to consult with someone you trust who is willing to push back to see the situation fairly.

4. Don’t polarize things or make it “me against them.” Separate the people from the problem. No one wants a nemesis at work. Think about how to engage your colleague in problem-solving, which is inherently collaborative instead of combative. Never make it about who’s right and who’s wrong, but about a decision or plan you need to complete.

5. Rely on empathy for others to see things differently. Always give your coworker the benefit of the doubt. Try to understand the rationale for their prickly behavior and views. Start by giving yourself a dose of self-compassion for what you also are going through before you turn your attention to a colleague. Give yourself space before reacting.

6. Be clear with yourself about goals for a relationship. Identifying your goal will help you avoid getting pulled into any drama and stay focused on constructive tactics. Don’t let any hidden agendas or ulterior motives, such as political strategy, throw you off course. Write down your key goals and refer to this list before any interaction with your colleague.

7. Resist the urge to talk behind your coworker’s back. Gossiping often reflects poorly on you the gossiper. You may get the immediate validation you are seeking, but you may also garner a reputation for being unprofessional, or end up labeled as the difficult one. When seeking help on an issue, seek out people who are constructive, and stay positive.

8. Experiment with alternatives to find what works. Start by coming up with two or three ideas you want to test out on a difficult colleague. Often, small actions make real progress. Keep adjusting your approaches and be willing to abandon ones that aren’t working. Try something you haven’t tried before that others might not expect.

9. Adopt a growth mindset and stay curious. Adopting a curious mindset helps to disrupt the stories we tell ourselves. Assume you have something to learn and believe that the negative dynamic can be turned around, both of which are elements of your own growth. Catch yourself in unproductive thought patterns, and step back to change the framing.

I’m confident that you will find that practicing these strategies will make your difficult relationships more productive, and improve your ability to get along with everyone. The result will be less work stress and more job satisfaction, as well as more positive movement in your career. We all need these in the changing work environment today.

Marty Zwilling

*** First published on Inc.com on 10/25/2022 ***

5 Steps To Locking In The Right New Venture Partner

Business partnerships have traditionally been agreements to drive more transactions than either company could do alone. The new paradigm, driven by disruptive technologies, cloud-served supercomputing, and the new generation of young adults with global empathy, is partnering and giving something now for a competitive advantage in the future.

An excellent example is the initiative by Elon Musk and Tesla Motors a few years ago to give away their battery patents, to infrastructure and competitive car providers, without transactional agreements. This will facilitate the expansion of battery charging and support facilities, and ultimately create more customers and growth for the whole industry, including Tesla.

Another partnering model example is the IBM Watson Group $1 billion investment to share cloud-based development and super-computing tools. A partnership was announced a while back with the City of New York, to connect and grow NYC's startup ecosystem. This facilitates technology growth and innovation for startups in Silicon Alley, as well as positioning IBM for future growth.

These initiatives are what Bob Johansen and Karl Ronn call “The Reciprocity Advantage” in their classic book on how partnerships must work in the future for innovation and growth. Johansen knows this space, as a distinguished fellow at the Institute for the Future in Silicon Valley, and Ronn is a serial entrepreneur and managing director of Innovation Portfolio Partners in Palo Alto.

Their recommendations are consistent with mine in working with startups, as well as more mature organizations, to start future-proofing their growth in today’s world of relationships and conscious capitalism. The basic steps to adopting this reciprocity advantage paradigm can be summarized as follows:

1. Identify your assets that have complementary value to others. Johansen calls this uncovering your right-of-way. Ideally, this is an existing platform where you already have established the ability to innovate with authenticity, and can afford to give access to others, with the potential to yield greater value later, like the Tesla and IBM examples.

2. Find partners who can do what you cannot do alone. Here you are looking for formal and informal relationships that can increase your innovation potential in the long run, and not be inclined to undermine your own efforts. Some of the more interesting partnerships may be asymmetrical: very big companies partnering with startups, or even individuals.

3. Learn by experimenting in low-cost and iterative ways. This is the new world of do-it-yourself (DIY) prototyping. FabLabs is an example of a new class of facilities for entrepreneurs to start experimenting early. Success is when both you and your new partners learn how to make money while experiencing new growth from the initiative.

4. Scale it once you figure out what works. When you are convinced that your new business offering is desirable, viable, and ownable, then you are ready to scale. Cloud-served services will be an amplifier for almost any opportunity, not only in the developed world, but in the developing world as well. Social media relationships fuel the scaling fire.

5. Maintain the agility to quickly pivot or quit. Not everything will work. Too many companies and entrepreneurs find it hard to stop a bad project. Key success indicators to monitor are passion level, and the ability to meet regular short-term milestones. If a plan doesn’t work, the key is to fail fast, create a new plan, but don’t give up.

The authors and I predict that the new forces of social structuring and the so-called digital natives (Gen Y and younger) will soon disrupt the traditional transaction model for doing business, as well as the current partnering model. Partnering will begin to happen across great distances, include reciprocity thinking, and even intellectual property will shift from a closed to a more open system.

It’s time for every individual, startup, and mature company, to uncover their shareable value, find complementary partners, and capitalize on their scalable advantages. I’m certain you will find it to be more fun and more productive than plotting every day to kill your competitors for growth.

Marty Zwilling

5 Preconditions for Success in Spawning a New Venture

After many years in business, working in large companies as well as startups, I’m no longer surprised at why mature and successful companies struggle with introducing innovative new ventures as the market and environment changes. Their track record is dire, with only twelve percent of the companies in the Fortune 500 from fifty years ago still even in business today.

Even with advantages that independent startups can never hope to match, including brand recognition, customers, financial capital, and distribution, I don’t often see the entrepreneurial passion for innovation, agility, and team perseverance exhibited by new startups. Your challenge is to balance the challenge of providing a stable return today, with meeting future customer value.

Thus, I was happy to see some real actionable advice on this challenge in a new book, “The Unicorn Within: How Companies Can Create Game-Changing Ventures at Startup Speed,” by Linda Yates, the founder and CEO of a leading growth incubator for global businesses. I agree with her set of preconditions for success, and offer my own insights to complement her specifics:

1. Select a full-time highly qualified and motivated team. You need a minimum of four to six top performers full-time for at least twelve weeks. You can augment this internal team with outsiders to complement internal skills, but take care to avoid the not-invented-here problem. Make sure everyone comes with an entrepreneur mindset for real innovation.

   In my experience, team members with an entrepreneur mindset are rare in mature companies, due to a growing focus on low risk fixed processes, narrow job roles with specialized expertise, and long-term tenure. Entrepreneurs crave more ownership.

2. Choose a trusted team lead with executive sponsors. The team lead will serve as the new venture’s interim CEO/GM, and should anticipate a long-term, rather than a temporary startup role in the new venture. Of course, someone with more operating experience may be brought in once the new venture has been successfully launched.

   Somehow, it always seems that the most high-potential leaders in large companies are offered the keys to the current business first, leaving the new venture opportunities to second-stringers or long-term loyalists whose view of innovation is all company internal.

3. Commit a source of internal or external seed funding. There is no point incubating an innovative new venture if you don’t have the funds to launch and expect quick self-sustaining revenue. Don’t count on friends and family, crowdfunding, angels, or other external investors. A documented business plan for the new venture is critical here.

   Even though the funding cycle for external startups is often long and arduous, I find that big business funding processes are even longer, and more political. If you wait to start until your new venture really needs the money, the project will likely die of starvation.

4. Assemble an engaged new venture advisory board. These should be senior executives in the existing business. In essence, the executives will serve as the new venture’s internal venture capitalists. In my experience, new ventures are fragile things, and more likely to be derailed by in-house politics than a lack of market acceptance.

   If you are really serious, this is a good time and place to commission a couple of external advisors, who are industry experts or experienced in related businesses. I’m sure you already do this for your real Board of Directors, and a new venture needs them badly.

5. Get prepared for the accelerate and scaling phase. Incubating is not enough; successful new ventures must be quickly scaled to stay ahead of competition and show a level of acceptance by customers as well as your financial executives. Feedback from pilots and early experiments must be integrated to maintain momentum.

   Scaling any new initiative globally these days takes a large ongoing investment, and a carefully thought-out plan and execution. Don’t let early success dilute your focus, or demand that the new venture quickly meet your mainline financial and growth metrics.

If your company practices these initiatives, you should feel confident in joining a new venture project, and contributing your creativity with low risk to your career, and a high probability of team success. If now where you are today, look around for new job opportunities. The time to start is now, with all the volatility and change in the market, and customers looking for answers.

Marty Zwilling

*** First published on Inc.com on 10/24/2022 ***

7 Principles For Success As An Owner Or Team Member

One of the realities of being an entrepreneur is that you have to keep learning and changing to survive. Everyone on the startup team knows there is no buffer, and no personal isolation from impact based on your job description that can save you. Thus everyone has to make sure they are focusing on what is important, and making leadership decisions to save the business.

That is what business leadership is all about. Unfortunately, in mature companies, a larger and larger percentage of employees forget company survival and customers as the objectives, and focus only on their own personal gain. Risks to the business drift off their radar screen, resulting in poor business decisions, as well as less job satisfaction and declining professional success.

In a classic book exploring these issues, “Lead to Succeed: The Only Leadership Book You Need,” Chris Roebuck, an expert on transformational leadership, highlighted the positive impact of entrepreneurial leadership. I have worked in both large companies as well as startups, and I have observed first-hand the principles that he highlights:

1. Total focus on delivering to the customer. Every startup team member is close to the customer front lines, so they see how every function does or does not add value to the service they give to the customer. People in larger organizations move away from day-to-day contact with the end customer, and focus becomes company internal and isolated.

2. Optimizing risk, not minimizing it. Calculated risks must be taken to enable change, to improve, and meet new customer needs. Minimizing risk will eventually cause any company to fail. Mistakes will happen, so the objective should not be to eliminate all mistakes, but to catch them before they create disasters, and become repeatable.

3. Constantly being creative and innovative to get better. Mature organizations forget that change is an opportunity, not a threat. Yet nothing stands still. Change allows everyone to be push the limits in response, to improve their opportunity for personal growth, improve the company competitive position and odds for long-term success.

4. Taking personal responsibility for organizational results. The attitude that creeps into big companies is that individual employees have no results responsibility outside their own objectives. This causes company-wide inefficiency, poor communication, and poor alignment, and also tends to reduce the effectiveness of every individual leader.

5. Understanding the wider picture. To get individual and team performance to the highest level, everyone has to be committed to the organization’s vision, values, and strategy, just as much as their personal objectives. An attitude of no responsibility outside of individual objectives is almost always detrimental to the company.

6. Keeping things simple. Over time, people in large organizations tend to make things more complicated than they need to be. This may be to impress others with their expertise, or their desire to minimize risk. Entrepreneurial leaders know that complexity actually increases risk, as well as mistakes, and ultimately reduces customer satisfaction.

7. Inspiring people around you with a clear vision and target. People need a customer-driven vision and some form of end destination to give meaning to why they do things, and engages them beyond their internal view. They also need step-by-step targets to help them visualize the journey to that destination, and see that it’s possible to achieve it.

In fact, large organizations need entrepreneurial leadership and thinking just as much as startups. The challenge to build and maintain this perspective is the same everywhere. It has to start with leadership from the top, hiring people with the right skills, giving them the right training and tools, and motivating them with the right leadership objectives, compensation, and growth opportunities.

I’m convinced that we are entering a new era of the entrepreneur. The cost of starting your own company is at an all-time low, and all the information and tools you need to lead are readily available on the Internet. More and more people are doing their own thing, freelancing, working from home, and starting their own companies.

But this doesn’t mean that everyone should start their own company to be an entrepreneur. Entrepreneurial leadership and thinking like an entrepreneur have just as much value, both to you and to your company, in big organizations as well as small. You can lead to succeed wherever you are. Do it now.

Marty Zwilling

6 Reasons That Managers Still Add Value In Business

As a business consultant with experience in large companies as well as startups, I often hear about dysfunctional management hierarchies, as well as the value provided by exceptional ones. We have all heard about the successes of flattened management organizations in the last decade at Facebook, Valve, Zappos, and others. Individual team members all dream of being unleashed.

I can see the positives on both sides of this hierarchy argument. Good managers improve focus and productivity through effective communication and coordinating disparate activities. Bad ones build fiefdoms and assign work autocratically, with little consideration for individual motivations and fit. Overall, I’m still convinced that businesses larger than twenty people needs a hierarchy.

For an in-depth study of the pros and cons of a bossless environment, I found a new book, “Why Managers Matter,” by management scholars Nicolai Foss and Peter Klein. These authors provide inside details of recent management experiments, as well as historical data from both successful and failed traditional companies. They also look ahead to forecast what you should expect.

Here are a few of their key points, with my own insights added:

1. Workers today are more educated and aware of options. In this age of millennials and social media, individual workers are more driven by the greater good, work-life balance, and peer culture, than by organizational pressures. They are more sensitive to customer needs and see peer collaboration as the most effective decision process.

   Most experts agree that the key to worker productivity, decision making, and satisfaction, is raising their level of engagement from the currently low thirty percent range. Giving them a feeling of self-empowered decisions with fewer managers is key to this move.

2. Office jobs and communication technology have evolved. Modern Internet communication and video meeting software have given new scope and immediacy to communal work efforts and customer feedback. Traditional management tasks of updating and coordination are reduced, and even focus and direction may be obvious.

   Examples of the new tools include online meetings through Zoom or GoToMeeting. These and other collaborative communication platforms, such as Slack, have absorbed many former manager responsibilities, including scheduling, summarizing, and follow-up.

3. Leadership and hierarchy perform strategic functions. In today’s knowledge-based and highly competitive environment, strategic leadership and company direction can still most quickly be decided and executed in a hierarchical organization. Innovations, both inside and outside the company, are driven more by great thinkers than organizations.

   In addition, strategic functions involve working ON your business, whereas tactical work, done by most employees, is working IN your business. In my own experience, I find that highly flattened organizations struggle with strategic focus and execution pivots.

4. Rewards for results versus work requires monitoring. More and better performance management and the greater use of rewards hardly implies bosslessness. Certainly managers need to be better trained, more sensitive to worker needs, and focused on hiring and training the right people for the right job, rather than treating all as soldiers.

   I have found that creating and administering creative rewards programs for results produced is an important role of every manager, and not one that can be done by peers. The proper use of rewards can make or break any business and employee relationship.

5. Outsourcing and working from home needs coordination. The recent pandemic, global outsourcing, and new remote collaborative tools have increased the need for company-centered team management, rather than reduced it. Outside contracts and freelancing rapidly dilute everyone’s focus on the higher company mission and purpose.

   In the early days of outsourcing, I was led to believe that it would reduce the need for local managers. After some bad experiences, I realized that, in fact, just the opposite was true, since outside contractors had little view of my company values, priorities, or goals.

6. Market evolution is not the same as company success. Some people argue that markets evolve quickly and are optimized without managers, so why not let this happen within a business through spontaneous decision making? Businesses have specific objectives, producing particular products, and providing financial returns to shareholders.

In summary, I am supportive of the trend toward delayering, reducing the number of managerial layers, and managerial training for those interested in that role. It’s always positive to foster self-management for all employees, and to delegate operational decisions to the lowest levels. Your challenge is to make this all work for you, and qualify yourself to be at the top of the hierarchy.

Marty Zwilling

*** First published on Inc.com on 10/20/2022 ***