The three big economic stories since last month’s election have been a dynamic stock market rally, a strengthening dollar, and rising economic confidence.
Here are some encouraging statistics to ponder:
Of course and as one looks for them, threatening economic clouds can be found everywhere. But for now, the US economic mood is one of optimism, confidence, and possibility.
And so the ambitious executive should ask: How should 2017 business plans and performance expectations be “reset” in light of this improved outlook?
Here are three ideas:
#3. Raise Capital. As your business has adjacent opportunities for which the raising of outside growth capital would accelerate their pursuit, now is the time to go out there and get it.
In my 15 years of working with companies of all types and sizes with their fund-raising efforts, I have found that overall economic confidence is by far the most important factor as to the success or failure of any particular company's financing efforts.
When economic confidence is low - as it was during the Great Recession -almost nobody can raise money.
And when confidence is high, for example as it was during the late 1990s, almost anyone with a solid plan and who gives a heartfelt, assertive effort can.
So if the predictions of 3%+ growth for the US economy in 2017 hold true, then with them will come increasing economic confidence and thus a far easier time for companies of all types and sizes to raise capital.
#2. Work Harder. I vividly recall a conversation I had with a very successful IT services entrepreneur a few years back. He said that in reviewing his financial records October 2008 to March 2010 he determined that he would have made more money if he had closed his doors and sat on the beach during that time instead of actually running his business!
Well, good economic conditions like these are the karmic reward for those that fought and scratched to keep the "lights on" when times were dire.
AND the right reaction is NOT to work less because getting good results takes less effort, but rather to work twice as hard to profit from all the growth and expansion opportunities frothy conditions uniquely allow.
#1. Raise Expectations. As a proud and lifelong New England Patriots fan, I have been so inspired by the “winning is the only option” mindsets of Messrs. Belichick and Brady.
Sure, there's always some excuse for why a game was won or lost, or why a business grows or does not.
Excuses yes, but really no good reasons.
And just like my Patriots are marching relentlessly toward another division title and Super Bowl berth, so is 2017 shaping up to be a championship season for US business.
And that should be the expectation for all of us - record years for sales, profits, asset allocation, and growth.
The macro conditions are there for the taking.
Now it is up to us to go out and win the game.
We choose to go to the moon and do the other things not because they are easy but because they are hard.
- President Kennedy’s “Moon Speech” September 12, 1962
A fundamental executive leadership challenge is finding the right balance between focusing on what is "core" to one's business and investing time and resources into pursuing adjacent and complementary opportunities to it.
Examples of this include:
On the surface, all of these “adjacent” opportunity pursuits seem worthwhile.
They build on business assets and trade secrets, they often leverage "remnant" organizational resources, and diversification of revenues and customers is a sought after business goal is it not?
It can be, and yes effective executives should always default to a positive and optimistic mindset toward opportunities but...
...they obviously must be the right opportunities to pursue.
A simple “Acid Test” way to rate opportunities is to ask two questions:
One, is the opportunity one in which my business can truly be best-in-class?
And two only if the answer to the above is yes, are the market dynamics for the opportunity favorable for its pursuit?
I call these the internal and external opportunity acid test questions.
Internal in their inward look at the real strengths of a business and its people.
And external in their evaluation of the market landscape in which that business competes.
The internal acid test is easily performed by listing the business’ key strengths, like:
As we list these strengths what will arise will be “non obvious” wisdoms as to the likelihood of a successful pursuit of the considered opportunity and perhaps more valuably...
...“aha” moments as to other, more appropriate opportunities for the business to potentially pursue.
“Potentially” is the important word here, because in addition to the opportunity passing an internal acid test, it must also pass an “external” one too, with questions like:
Market. How big is the market for the opportunity? How expensive will it be to pursue?
Customer. Who are its customers? How pressing is their need? How hard are they to reach?
Competition. In our global age, by far the most important question - and not coincidentally the one that most executives do the worst job in asking - how strong and formidable is the competition?
What advantages - first-to-market, brand, relationship, cost structure, etc. - does the competition have that we will need to match and beat?
What points of differentiation must we build and emphasize to successfully compete and win?
As we honestly ask these competitive questions, very often discouragement can set in.
Everything can just seem really hard.
But this sad feeling is actually a good thing.
Because as we work through the discouragement we really learn if we have an opportunity worth pursuing or just a passing fancy.
If it is just a passing fancy, then we will quickly move on to the next bright shining object that passes our way.
But if it is an actual opportunity, then the internal and external challenges that present themselves to pursue it will embolden us to roll up our sleeves and go for it.
For sure, successfully pursuing any new business opportunity is hard.
But let's never confuse hard with impossible.
By properly performing these internal and external acid tests, we can distinguish between hard and impossible...
...and then relentlessly put forward our best energy toward going for it, crushing the competition, and winning!
Last week, I wrote about the Business Physical and of the importance of evaluating a business’ “red,” “yellow,” and “green” areas and proceeding, changing, and innovating accordingly.
As I wrote that post, the most surprising presidential election result of my lifetime took place.
Along with the political change that it represents, so does it foretell a changed landscape of opportunity for businesses of all types and sizes.
This changed landscape starts with the various prognostications on “industry” winners and losers.
Potential winners include pharmaceuticals, infrastructure, and traditional energy, and potential losers include renewable energy, carmakers, and real estate (on fears of higher interest rates).
But let’s note well that these prognostications should be taken with a big grain of salt, as they are made by the same set of pundits that got the election results so wrong to begin with!
But there is one thing as businessmen we can be sure of - that with change in Washington - like with big change of any type - comes big opportunity.
Yes, much of this opportunity will flow from changing federal government policies, but the election result should also be a wakeup call to “reset” on business as usual.
A reset where we reflect on the idea that no matter how long things have been done a certain way - and no matter the conventional wisdom as to how they will continue to go - change is always only a moment away.
As businesspeople, our first responsibility is to find the opportunities in these changes.
And to then act on these findings with velocity and determination.
Here’s three ways how:
#1. Do that Business Physical. As I outlined last week, positive business change starts with undertaking a structured and thorough review of “where things are now” in a business and its marketplace.
A quality business physical drills down into the real value drivers of an enterprise, how to enhance them and how to fend off the constant existential threats to them brought on by fast changing markets, competition, and customer preferences.
Do the physical yourself, or reach out to a qualified advisor to do it for you.
#2. Challenge the Conventional Wisdom. Whatever’s one’s politics, everyone should reflect long and hard on how wrong the “conventional wisdom” was as to the election’s course and result.
As it does in politics, in business echo chambers of opinion and consensus can quickly get formed and hardened
But just because everyone believes something to be so doesn't make it true!
A great exercise to breakthrough “stuck” thinking is to look at our business and our options from a “tabula rasa” place - letting go of legacy considerations, sunk costs, and the various frustrations of things that just didn’t work out - new hires, product launches, sales campaigns, etc.
As we let go, we start to see the choices and opportunities available to us from a fresh and “future forward” place.
Yes, the realities and limitations of our business model and marketplace will come rushing back to us, but it can be surprisingly high ROI (and exhilarating!) how far just a little bit of pure visionary thinking can take us.
#3. Hard Work Trumps All. Whatever one's politics, the energy and work ethic displayed by both candidates through the long and intense campaign season - unceasing 18+ hour campaign days - should be inspirational to all.
And these were a pair of 70 year olds!
Balance is an admirable life goal, but there’s also a time and place for intense “24/7” effort as so many endeavors of potential greatness cannot be achieved by any other means.
So let’s use this “Black Swan’ election as a spur to take stock of where we are, to let go of the conventional wisdom that might be holding us back, and work hard, hard, hard.
And let's all hope, believe, and act to make it so that the New Year and the new regime in Washington brings high ROI change to all of our businesses too!
Positive business change starts with a full and complete understanding of what the bottlenecks to positive change are and what can/must be done to remove them.
This may seem obvious, but I am constantly surprised by how many otherwise experienced executives invest time and resources into mission-critical initiatives without understanding the right business levers to pull (and how to pull them!) to transform the mere hope of positive change into its actual reality.
This process of understanding I call the "Business Physical" and like a personal health physical when done right it:
1. Identifies the Green, those areas that are working - i.e. things like good exercise and diet habits in a personal health physical that should be maintained and built upon.
2. Identifies the Yellow, those areas where as a business we are falling short and corrective measures are needed - i.e. like when a health physical comes back with high blood pressure, high cholesterol readings, etc.
In a business physical, green and yellow areas include things like:
And as in a health physical, these green and yellow areas yield mostly “keep on keepin on” suggestions. Keep leading with ethics and enthusiasm. Keep satisfying your customers. Keep close to the pulse of your market.
3. And most importantly, the business physical identifies the red areas, those heavy matters that if not fundamentally addressed will lead to the business' demise and death.
Here the analogy would be as when a health physical so very distressingly turns up life-threatening conditions like heart disease and cancer.
Now it is in these red areas where the analogy between a business physical and a health physical needs an important clarification.
You see humans are incredibly resilient beings. We can take hard punches, stay standing and when all is said and done recover pretty darn quickly.
Businesses are more fragile - they stop breathing when the cash runs out, which can and does happen to even the strongest of companies.
This fragility is heightened by the nature of modern business competition.
Blessedly unlike the vast majority of human beings on earth every modern business has dozens, hundreds, sometimes thousands of other businesses out there relentlessly trying to kill them!
Because of this fragility and the “only strong survive / fight to the death”nature of our modern marketplace, as business leaders we must always be super vigilant to the “existential” business threats surrounding us always.
Identifying these threats is core to a quality business physical - even to the point that if those threats are deemed too great to overcome the recommendation can be to sell or close the business.
But far more likely will come a series of recommendations and suggested tasks and projects that can and will make things better.
Some of these will be “Business Internal” - like tending to our financial health, to our culture, to the satisfaction of our clients, to the effectiveness of our organizational processes and accountabilities.
And some will be “Business External” - like tending to the positive attributes of our brand and reputation, to the “conversion efficiency” of our marketing and sales regimes, and how we leverage these assets in toward healthy growth.
When done right, a quality business physical spits out a list of specific projects and to-dos for executives to work on right away to make things better- more profits, more assets, more overall sustainability and longevity.
I encourage all executives and business leaders of ambition, especially this time of year, to submit their companies to a thorough and complete business physical.
It is almost always transformative and revelatory in its own right, and can quickly put a business on the correct path towards improved shorter term results and longer term health and growth.
Last week, I met for dinner with a longtime client as they traveled through Los Angeles on a stop-over on their way back to Europe.
It was both by design and natural inclination of all involved, a working dinner where the main topic of conversation was the client's business model in all its permutations - new market penetration and geographies, new product development, prospective new hires, growth-by-acquisition opportunities, establishing Newcos to house new technologies, discussing the personal exit plans of the company's founders, and on and on and on...
It was also meandering, energy was fruitlessly expended on ideas without reasonable probability of success, and was distracted throughout (pleasantly so!) by more "prosaic" conversation around food, wine, travel, family, sports and more.
AND it was probably the most productive two hours any of us had all year.
Because while enjoying a tasty meal in a beautiful restaurant, we organically arrived at a killer marketing idea worth potentially tens of millions of dollars.
By organically I mean we came up with it through a classic “thesis, antithesis, synthesis” back and forth.
The company’s sales manager shared some remarkable research that showed that while the “conventional wisdom” was that the company’s market space was in free fall and under severe “legacy” pressure, in actual reality the market was experiencing solid, and in some areas, unprecedented growth.
As we digested these eye-opening statistics came the "after-the fact obvious" idea of sharing them in a way that would paint the company's seemingly legacy offerings in a future-focused light.
First, through featuring these insights across the company's various marketing platforms - in its marketing and sales collateral, its white papers and case studies, in its email newsletter, and potentially in the its tag line and logo.
And more excitedly, through the development of a new product with a market potential many times greater than the company’s current core offering.
To give some idea as to the power of this idea breakthrough, it had the company’s CEO and Founder - and note that is a 20+ year old, 8-figure in revenue and very profitable business - thinking about changing the name of the company to leverage it.
This was obviously a very high ROI outcome from a simple dinner, but there was another outcome that was arguably even more valuable.
You see this wonderfully animated dinner discussion inspired that most magical energy to be found in any gathering of humans - a sense of BIG possibility.
The possibility that the future will be better than the past.
The possibility that we, as a team, have the right stuff to win and do great things together.
The possibility that technology can just not be a threat to an older line business, but instead can open up avenues of new opportunity for it.
And the possibility that even if we don't have at hand all of the solutions to our problems, that we can put our heads together and find them.
It doesn't always work.
As often as not those ideas arrived at after the third glass of wine don’t seem so hot in the cold light of morning.
Or if they do hold up, actually acting on and making them happen falls by the wayside for the various excuses and reasons.
And sometimes the ideas just don’t work.
But my experience is that as the seriousness and earnestness of purpose of all involved in a brainstorming/ideation session goes up, up, up...
....the likelihood of these “false positives” goes down, down, down.
I highly encourage all executives of ambition to bake more of these kinds of sessions into their normal business days and nights.
To do so alertly, with great stamina, a strongly positive mindset, and with a firm faith that answers ARE out there.
These sessions can and should be as much fun as one can have in business...
...and lead to breakthrough ideas, strategies, tactics and initiatives unreachable through any other means.
[To listen to a recording of the webinar, Click Here]
The artificial intelligence (AI) market is projected to grow extremely rapidly - from approximately $800 million this year over $5 Billion by 2020, a growth rate of over 50% annually (IDC).
AI Sectors leading the way include healthcare, advertising, security, education, e-commerce and robotics, with key business and consumer applications including virtual agents / chatbots, natural language processing, personalization of user experience, and process automation.
Perhaps more than any other next generation technology, AI applications like the above are making meaningful profit and loss impacts right now for businesses of all sizes.
Webinar Recording: Entrepreneurial and Investment Opportunities in Artificial Intelligence
You’re invited to listen to a recording of the webinar, via this link, where a select group of AI entrepreneurs who will share how they and their companies are winning in this incredibly dynamic space.
My panelists include:
On the web conference, our panelists will share:
Listen to the Webinar Recording via the Link Below:
“The chief business of the American people is business.”
- Calvin Coolidge, 1925
“I went back to Ohio / But my city was gone”
- The Pretenders, 1984
My 1980’s childhood growing up in Worcester, Massachusetts was a blessing that perhaps I never fully appreciated until having sons of my own, now ages 9 and 10, and especially so through the darkness and despair of this political season.
It’s just hasn't been easy to try to explain to them how the nation I love so much - the nation of Lincoln, Jefferson, Roosevelt, and Washington...
...has come to this.
National conversation so unattractive - from its lack of intellectual rigor, of manners, and of even lip service to that most blessed of American virtues -freedom and the role that limiting the size and scope of government plays in its preservation.
So as a father and a businessman, what is the best explanation and response?
How do we communicate and embody that beautiful and so admirable concept of Virtue, the “sense of our own interest in the preservation and prosperity of a free government” without sounding like a total hypocrite or a “martyr” through standing on principle as others propel themselves forward on bread, circus and nonsense!
Now, both by constitution and choice I pride myself as an inveterate optimist but try as I might I can’t reframe this in a fully positive light.
Something very special, civic idealism, has been fundamentally lost.
I feel this loss badly for my sons, who unfortunately will not grow up in a world as I did where admirable role models could be found in the national conversation.
These modern times of ours, so empowered by technology, are filled with inspiration and empowerment like never before.
We just need to find them in different places.
Places beyond the standard societal institutions, beyond government and traditional education, religion, and health care.
I mean really, who do you think is more likely to solve the challenges of modern transportation - innovation master companies like Tesla and Uber, or the State of California and the National Highway Administration?
Or address the challenge of delivering high quality, low-cost health care - legendary winners like Apple and Walmart or the AMA and the VA?
Or, for peace and friendship amongst people and nations - Facebook, LinkedIn, and Airbnb, or the fundamentally conflicted synagogue, church, and mosque?
A pair of important points to be made here.
First, all of us, through connections made around the world for business and pleasure by the click of a button, are able to be empowered and inspired in ways big and small.
So while it is sad that my sons will not get to live in that decent, homespun, and wonderfully dignified America of Arnold Palmer and Vin Scully, it is beyond awesome they will live in a world connected, working and playing together like never before.
The second point is that developing personal and professional proficiency in this brave new world is a beyond full-time vocation, habit, and way of being.
Doing so can and should easily “crowd out” any / all time and energy wasted in following and engaging with that which passes as “news.”
So sure, it is sad that our national life has come to this.
But this discouraging reality is far outweighed by the world of commerce, connection, learning, doing, possibility, and inspiration only growing more remarkable and awe - inducing by the day.
I suggest focusing on the latter.
Both your psyche and your wallet will thank you.
Last week, I wrote about how and why the most prized, but often overlooked asset of any organization is its capacity to change and innovate.
But as I wrote in that post, innovation can be a scary and often misunderstood word and concept.
And unfortunately many entrepreneurs and executives who otherwise could be excellent innovators and change agents simply are NOT, and thereby their companies suffer.
The key idea is that innovation isn't that hard and is well within the ability and capacity of any executive of serious and high stamina ambition. Simply:
Business Innovation is...
...accepting that it is impossible to do something new in a business - a new marketing campaign, a new hire, a new product launch - without also accepting that that new thing has a significant probability of not working. And doing it anyway.
Business Innovation is not...
...positive thinking that sits in a vacuum. Yes, the effective executive always focuses on opportunities and not problems. But when leading change initiatives, he or she does so with both a thoroughness of preparation and mature respect for competitive challenges and realities.
Business Innovation is...
...understanding that all modern companies are technology companies.
That technology may be in actual hardware and software sold to customers, or in how an otherwise "low tech" business utilizes it to improve the efficiencies of key work processes - marketing, sales, operations, organization design, customer service, etc.
Business Innovation is not...
...believing that one’s own business, because of its age, its type of work, its bureaucracy, is permanently "stuck" and incapable of changing and growing.
Rather, Business Innovation is...
...believing in the power of "cascading” change - small improvements that on their own might seem insignificant, but because of their “multiplier effect” on other key processes, have a dramatic impact on growth and the bottom line.
This is particularly true in our digital business age because as we increase our marketing to sales conversions percentages only slightly, we are in turn able to increase instantaneously the size of our marketing budget, which in turn immediately grows revenues and gross profits.
However, Business Innovation is not...
...believing that we are just one change away from breakout success.
The sturdy and wizened modern executive recognizes that no one business breakthrough - that new product launch, that great new client (or hire), raising growth capital, etc. - ensures our ultimate success. Modern competitive forces dictate otherwise, so the best we realistically can hope for is temporary success from any one innovation.
Instead, Business Innovation is..
...with the whole of our professional being committing to ongoing change attempts, i.e. that the very definition of what makes up a honest day's work includes examining with a cold, dispassionate eye all of our work processes, and then every business day acting to improve one or several of them in ways big and small.
But Business Innovation is not...
...believing we have to come up with and make happen all of the positive change in our companies on our own.
Help is always available, from our work colleagues of course, and also from the limitless universe of "around the world" consultants and contractors accessible to us at the click of a button.
Yes, the Capacity to Innovate is the most prized asset for any business seeking to:
a) Protect itself against obsolescence, from a fire sale, from bankruptcy;
b) “Turnaround” from a recent string of declining sales / underwhelming growth;
c) Structurally enhance the sustainability of its long-term success.
So let’s plan to innovate and then let’s innovate to be successful.
And then innovate some more to maintain and build upon that success.
We start by defining ourselves as innovators, we “walk the talk” with consistent and ongoing innovation - focused thoughts and actions, and then...
...we watch the magic happen.
The most prized, but often overlooked asset of any organization is its capacity to change and innovate.
This can be measured by the premium investors will pay to buy into the business.
Slow moving and growing companies are valued at very low multiples to their revenues and cash flows, while those possessive of strong brands and proprietary technology (ideally both!), and the capacity to build more of these assets are valued at very high (sometimes infinite!) multiples to theirs.
Investors realize that innovation capacity empowers that most valued coin of the business realm: Sustainable Competitive Advantage.
We live in a world where anything and everything we do can and is mimicked, copied, knocked off...
...and thus always under severe threat is our ability to efficiently attract and secure new customers , and more profoundly to sell and service those customers at price points where we can actually make a profit.
The logic is succinct: if we don’t constantly innovate and just get better, eventually, inevitably we will lose our competitive advantage and in turn lose money.
Now, “innovation” can be a scary word.
It conjures images of hotshot Silicon Valley technologists - of engineers, scientists, and programmers.
But while for sure technological prowess is a key component of innovation, it is not the only one.
Innovation, best thought of as simply introducing new ideas to change things for the better, can be imparted on any aspect of a business.
On the refreshing of its brand.
On the vigor of its culture.
On the "customer effectiveness" of its products and services.
For most companies, the easiest-to-grab and “make happen” innovations lie in process improvements.
Little things like moving from “wet” to electronic signatures with tools like Docusign, or seamlessly connecting disparate data platforms through integration tools like Zapier, or migrating business documents from desktops to hosted platforms like Google Spreadsheets, Dropbox, etc.
These little process improvements build upon one another, and as they do we have more capacity and confidence to take on big initiatives like brand and culture refreshing and the launching of new products and services.
Now, here is where many of us might feel that we just don’t have the creativity, the charisma, the technical chops to effectively innovate and grow in big ways like this.
Luckily, here is where the flip side of that brutally competitive world we all live in comes to our aid.
You see, while all of our “best stuff” is out there for all to see and mimic, so is everyone else's!
We don’t need to come up with all of the great ideas, we can just “borrow” from what our best competitors are doing and really from any business whose stuff we like.
And no it does not mean it is okay to plagiarize.
But it is a foolish, lazy or unnecessarily prideful executive that does not take advantage of the wealth of innovation ideas available to them at the click of a button.
It is even better than that.
Not only do we not need to come up with all of the big ideas, we don’t even need to implement them!
We can hire a marketing firm to refresh our logo and brand identity.
A change management firm to refresh our culture.
Tech. developers to design and launch our new products.
We just need to always vigilantly and ruthlessly look everywhere and anywhere in our business where things can be done better.
And then act.
Slowly but surely our innovation “muscles” will grow stronger and leaner and as they do...
...our ability to grow and make money will be both more effortless and sustainable.
The passing this week of Arnold Palmer at 87, and the retirement from broadcasting of Vin Scully at 88, is a moment to reflect on the time, world, and value system these men represented, and on the wisdoms from their careers that can be applied to our modern life and business journeys.
Arnold Palmer and Vin Scully - their names are synonymous with “old school” character and decency.
These were men highly comfortable with who they were and what they represented to their adoring fans.
And this heartfelt character and decency was wonderfully magnified by so many of those fans having their first exposure to them as impressionable youngsters, or as deeply from stories told by their fathers and grandfathers.
Yes, we wanted to see in them these old school qualities, which they embodied to begin with, and the more we found them when we looked, the more developed they became in them.
Is a great business brand any different? When we communicate our “best business self," and as it is positively received, this in turn encourages more of whatever these best qualities happen to be to grow in our business, and so on and so on.
And then by just “keep on keeping on” - as Arnie and Vin did for over 60+ years - the high virtues of consistency, longevity, reliability, and trust are washed over our brand.
Now, with these virtues alone Messrs. Palmer and Scully would be great men.
What made them legends was being insanely great at their chosen fields.
While many only remember Arnold Palmer in his grandfatherly later years, in his prime he was the best golfer in the world, winning four Masters, two British Opens, a US open, and over 90 other professional tournaments.
Well into his 80s Vin Scully still remains universally regarded as the best broadcaster in baseball - uniquely working alone and doing both the play-by-play and "color" game analysis in his perfectly paced and wonderfully melodious story telling way.
Now for the rest of us that fall rings below these world class talent levels, let’s first find and focus upon those areas where our talents are most competitively advantaged and then have faith and confidence in the truism that “hard work beats talent when talent doesn't work hard.”
It goes deeper than this, though.
Beyond character, beyond longevity, beyond talent, the reason why the passing of Arnold Palmer and the retirement of Vin Scully touches so many is because they represent a certain and sometimes sadly seemingly gone for good Mid-Twentieth Century America hopefulness and innocence.
A hopefulness that the future will be even be better than the past.
An innocence that the world and the people in it are at their essence good and well meaning.
These are at the heart of the childhood imaginings we all once had, and that Arnold Palmer and Vin Scully maintained throughout their long and storied lives and careers.
Rest in peace, Mr. Palmer. And rest well, Mr. Scully.
Let’s best honor them with more spring in our steps, cadence in our speech, and hopefulness and innocence in our hearts.