Tired of Your “Old” Business? Then Do This


 

A friend of mine runs a successful 8-figure IT security business, with a clientele consisting primarily of federal government agencies.

 

He has built the business via long term relationships, and via a deep understanding of the government procurement and competitive bidding process.

 

He both loves, and doesn’t love, it.  

 

He loves it for the relationships.

 

And he loves it because he doesn't have to worry about delinquent customers as so many companies serving the private sector must do.

 

But he doesn’t love the competitive bidding process on which his business is based, as it makes it impossible to predict and feel secure about future revenues and cash flows.

 

And, more personally, he doesn’t love it because the work is often painfully bureaucratic and boringly slow.

 

So earlier this year he did something about it.

 

He started a new business.

 

A new business that, while built on his IT security experience, instead is aimed at a completely different market and clientele - individuals and small businesses.

 

Now before we get too deep into the challenges and competitors his new business faces, let's first admire and acknowledge my friend because - as opposed to just complaining about the limitations of his current business like way too many business owners do - he did something about it.

 

And he did so maturely, pursuing a new business that leverages the strengths of his current one.

 

And a business which, at its heart, is the opposite of the elements of his current business that he doesn’t like - its slow, bureaucratic clients and its lack of predictability.

 

Will he be successful?

 

Maybe. Maybe not.

 

He will need to overcome the sad reality that his years in the government sector have left him lacking key skills in how to market and sell via the “modern way” to individuals and small business.

 

He will need to learn how to balance his focus and resources between two companies, especially given the natural tendency to be enamored with the new and promise-filled one, and to neglect the “old faithful” one.

 

In spite of these challenges and risks, his expected economic value for the new venture is clearly positive, especially as he is building it from the start for an “early exit” to a strategic or financial buyer.

 

And more importantly, it is the right personal choice, as starting a new business is one of life’s “Hero's Journeys,” and one that by no means should be reserved just for the young, or for those currently not in business.

 

I wish my friend best wishes and hopes for prosperity.

 

But he really doesn’t need it.

 

Because he is in the arena, living and acting on his dreams.

 

He has won already.

 

Want to Start a New Business from Within Your Existing One?

 

Have a good new business idea but need a burst of solid execution to get it moving?

 

If so, we should talk.

 

Click here and complete this short questionnaire as to a few questions regarding your business’ current status, and key goals now.

 

And we’ll reach out with our thoughts to help you.

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How Nostalgia Can Help Your Business


 

Last week, I traveled from my home in Los Angeles back to Worcester, MA, where I was born and raised.

 

 And while nostalgia can be a guilty pleasure, on this particular trip it gave me many “aha moments” on how to get more enjoyment and results from my business.

 

 For me, nostalgia usually starts with travel itself.

 

 The ride to the airport, the journey to the gate, onto the plane and into my seat - all of it is pretty much the same as when I first flew between the coasts 30 years ago.  

 

 Yet technology has made it, in ways both sad and wonderful, quite different.

 

 First, the travel disconnect is gone, as no matter how far we go, we are never really “offline” any more.  

 

 So is the “challenge” of travel, the need for resourcefulness as we navigate from place-to-place, also mostly gone - with just a few swipes there magically appear all kinds of assistants to effortlessly chauffeur and direct us on our journeys - Uber, Lyft, Waze, et al.

 

 And we wonder if, on balance,  is it really better now than it used to be?

 

 Then we arrive and “return” to the places and relationships of our youth.

 

 Riding down familiar roads and seeing familiar faces - a bit more aged and grayed, for sure, but still the same - and we reminisce of times gone by and of the contrasts with the present time.

 

 Like helping my 80-year-old mother, once so strong and vibrant, take just a few steps down the corridor from her hospital bed.

 

 Then, a few moments later, showing her how to stream her favorite shows from her iPhone to the big screen TV mounted in her hospital room.

 

 Like jumping from a conversation with my 85-year-old father about how, when he was his grandson’s age of 12, he sold the afternoon newspaper announcing the end of World War II...

 

 ...to navigating on his phone to the Uber application so that on those cold and snowy New England mornings he can hop a ride to work (yes he is still working and loves it!), and not fight the elements alone.

 

 Like driving past my hometown baseball diamond - unchanged from that glorious day so many years ago when I hit my first and only Little League home run...

 

 ... to noticing how the old town soda bar, bowling alley, movie theater, and candy store were long ago replaced with the franchises and chains that are so great in their way but also leave us wanting something more...authentic.

 

 This whole “chicken soup” of experiences evoke in me a soft sadness for sure, but also motivating feelings of gratitude and encouragement.

 

 Gratitude for the humanity of it all, that shows and comes through not in spite of technology, but so often because of it.

 

 Like seeing the excitement rise in my mother’s eyes as she “facetimes” with her precious two-year old granddaughter many thousands of miles away.

 

 Because in moments like these, I am reminded that as long as there is breath in us, there are more of our stories to be told.

 

 Stories of personal connections for sure, but equally ones of professional opportunity and accomplishments.

 

 Because while the old world will never be forgotten, it is gone.

 

 And the new world and present day is a cool place.

 

 Because of the technology that sometimes feels a little “off” and frightening, but to a far greater degree enriches our world in ways too innumerable to count.

 

 The choice, just as it is for my 85-year-old father who remembers FDR and Joe Dimaggio and a time before television, is ours.

 

 Whether to - as a matter of pride and tradition - battle through a New England snowstorm on our own...

 

 ...or to reach out for a little help from some new friends.

 

 That is the kind of nostalgia I like best.

Categories:
 

What Your Business Can Learn from Milkshakes


 

Famed market research firm Nielsen recently evaluated 20,000 new products.

 

 From those, it found only 92 with sales of more than $50 million in the launch year and sustained sales thereafter.

 

 What do these breakthrough products have in common?

 

And how can they be applied to your business and its change and innovation efforts?


Well, a great book by famed business author Clayton Chistensen offers a simple framework to help companies develop new products that connect profoundly with customers each and every time.

He explains by first illustrating the opposite: how most new products are conceived, designed, and launched based on little more than luck...

...with key executives gathered in a room and guessing as to what new products and marketing campaigns might sell and work.

 

 Chistensen uses himself as an example.

 

 He is a Harvard Business School professor living in an affluent suburb, so, for example, marketing a New York Times subscription to him would make sense - as these demographic characteristics are highly correlated with the paper’s current subscribers.

 

 But characteristics are NOT reasons why he might purchase a subscription.

 

 Reasons are specific and actionable.

 

 As in, he might purchase because he needs something to read on his commute to work...

 

 ...or because he’s a sports fan and likes to read about last night’s games.

 

 Or because he wants to (though he might say so out loud), impress his neighbors with his erudition by having the delivered paper prominently displayed on his driveway each morning.

 

 Christensen calls these reasons “jobs to be done,” or “the progress that a customer is trying to make in a given circumstance, what they hope to accomplish.”

 

 One of my favorite “jobs” from the book is the story of the “Reeses Mini,” which in just two short years grew to be a $235 million new business in an almost 100-year-old product category.

 

 Christensen explains it like this:


Hershey’s researchers began by exploring the circumstances in which Reese’s enthusiasts were “firing” their current product formats. They discovered an array of situations—driving the car, standing in a crowded subway, playing a video game—in which the original large format was too big and messy, while the smaller, individually wrapped cups were a hassle (opening them required two hands). In addition, the accumulation of the cups’ foil wrappers created a guilt-inducing tally of consumption: I had that many? When the company focused on the job that smaller versions of Reese’s were being hired to do, it created Reese’s Minis. They have no foil wrapping to leave a telltale trail, and they come in a resealable flat-bottom bag that a consumer can easily dip a single hand into.


The results were astounding: $235 million in the first two years’ sales and the birth of a breakthrough category extension.


How can small companies - especially ones that have been around for a while - apply this kind of thinking and approach to turbocharge and transform their new product efforts?

Christensen’s answer is simple: Talk to your customers.

And talk to them neither in a formulaic "Thank you, we appreciate you" way nor through an anodyne email survey.


No, talk to them conversationally, intimately.

The way Christensen did when he was hired by a famous hamburger chain to help them sell more milkshakes.  

He first looked at the demographic data of who was purchasing milkshakes and it was as we would expect - mostly teenagers and parents purchasing for young children.

But there was also a solid category of adult buyers who did so early on weekday mornings, and try as he might Christensen could not put these buyers into any understandable profile.


So...he went to the store and stopped and asked these milkshake buyers why.

 

 And he found they were buying because they had a long and boring ride to work and needed something to keep the commute “interesting.”

 

 And that they were buying because they wanted something that was easy to eat in the car and would keep them from being “hangry” in that late mid-morning “eating dead zone” right before lunch.

 

 Now milkshakes in the mornings have a lot of competitors for these “jobs” - bananas and donuts and bagels, and even candy bars.  

 

 But for these buyers, none of them got it done quite like the milkshake. As one happy customer said -


“This milkshake, It is so thick. It easily takes me twenty minutes to suck it up through that thin straw.  Who cares what the ingredients are - I don’t. All I know is that I am full all morning. And it fits right here in my cup holder.”

 

The “aha” insight here is that only through this “direct-to-human” approach, in ways simply not possible from evaluating data alone, we can become inspired to conjure up and innovate new products and marketing campaigns with breakthrough potential.

 

So call your best customers today.

To say hello and thank them for their business, of course.

But also to ask them why they bought.  Or didn’t buy.

And don't settle for superficial answers. Dig down and get to the real stuff.

What you uncover will almost certainly surprise.


And from this surprise, breakthrough new business ideas and action plans will almost certainly be born.

Need New Products?

 

 Need new product ideas and a burst of better execution to get your business unstuck?


If so, we should talk.

Click here and complete this short questionnaire as to a few questions regarding your business’ current status, and key goals now.

And we’ll reach out with our thoughts to help you.


Categories:
 

Getting Big Deals Done, Part II


 

Last week, I wrote about how successful companies are led by entrepreneurs and executives highly skilled at getting big deals done.

 

 In it I shared 3 factors you must embody to become a great dealmaker [if you missed that post, you can read it here].

 

 Now, great dealmakers get deals done for companies with "dealable" qualities.

 

 Those qualities include financial health, scalability and companies that compete in hot markets.

 

 And when dealmakers are at the helms of companies like these...

...deal-making magic happens.

 

 Let’s start with financial health.

 

 The plain fact is that it is hard - not impossible, just hard and slow - to consistently get deals done without available cash and liquidity.

 

 Of course, there are certain kinds of deals that by their very nature involve "dealing" - i.e. our hustle and promises of to-be-delivered value in exchange for the other side's cold hard cash.

 

 But even here, except in special circumstances (e.g. startups where cultures of financial discipline and frugality needs to be developed), operating on a shoestring is suboptimal, as the trying need for cash too often tempts us to accept deal terms not in our true strategic interest.

 

 Here, a great (and for most mature small businesses, under-utilized) solution is to “strengthen the balance sheet” through an outside capital raise.

 

 Then, when deal opportunities present themselves - like strategic partnerships, new hires, marketing campaigns, growth-by-acquisitions, etc. - that solid balance sheet enables a more strategic analysis of the opportunity’s value, versus approaching it from a place of financial scarcity.  

 

 And with fund-raising, there naturally follows an evaluation of a business’ scalability, its ability to grow revenues at a faster rate than variable costs - marketing, sales, customer fulfillment, etc.

 

 Normally, software and product-based businesses are more scalable than service and retail-based ones, but importantly business scalability is measured on a spectrum versus on a “you-have-it-or-you-don’t” basis.

 

 Facebook is a great recent example. Necessitated by its recent privacy and data breach challenges and snafus, the company announced earlier this month that it is hiring 20,000(!) new employees to police the site’s various bad actors - nefarious foreign governments, hackers, snoopers, et al.

 

 The point here is that even the company with arguably the most scalable business model in history has been forced to descale, which in turn makes it a less attractive deal-making partner than it was in its Instagram-, WhatsApp-, and Occulus-acquiring go-go days.

 

 In contrast, small businesses can re-scale themselves via improving business model components - product offering, marketing, sales channel, fulfillment, etc - that over time have become bloated and uncompetitive.

 

 Finally, because of the inherently higher value placed on companies competing in hot markets - crypto, artificial intelligence, cannabis, e-commerce, mobile -  those companies will naturally be offered more and better deal terms by partners and suitors.

 

 But what of the large majority of businesses that are not in hot markets?

 

 Well, get a deal done so that you are!

 

 Last time I checked there is no rule that says that if a company is in a low growth, low sizzle market now that it has to stay there forever!

 

 Because when we put great dealmakers at the helm of well-capitalized, scalable companies competing in hot markets....

 

 ...big deals just happen.

 

 What is better than that?

 

 Want Some Big Deals for Your Company?

 

 Tired of business as usual at your company?

 

 Want a burst of ideas, capital, and action to propel your company forward?

 

 If so, we should talk.

 

 Click here and complete this short questionnaire as to a few questions regarding your business’ current status, and key goals now.

 

 And we’ll reach out with our thoughts to help you.

Categories:
 

Getting Big Deals Done


 

Getting big deals done is almost always the key success factor that allows companies to achieve breakout growth.


What kind of deals?


  • Securing big new clients

  • Joint ventures/strategic partnerships

  • Raising capital

  • Mergers & acquisitions

  • etc.

 

Sadly, most smaller company executives and business owners are lousy dealmakers...as evidenced by the undeniable fact that their companies remain small!

For starters (and paradoxically), they are lousy dealmakers because so many of them possess those best qualities of Main Street America - prudence, thriftiness, deliberateness, and consistency.

Admirable qualities all, but these qualities are also representative of and correlated to risk aversion, which is anathema to great deal making.

 

Building on this, many small businesses are conducted with blood relatives, or built on long standing work relationships that approximate family dynamics.

There is, of course, much beauty and power in family businesses, but within them, complexity is also often introduced.

Complexity of decision-making processes and of motives, which then “complicates” what is already a very complex process - i.e. navigating and driving across the finish line  multi-faceted, risk and uncertainty-filled business deals.

Additionally, a byproduct of risk aversion and complexity can be the loss of the intense proactive energy needed to originate and close deals.

Proactive energy is distinguished from the more reactive type  that most small business people have in admirable stores - the stamina for the day-to-day grind of customer and employee maintenance and support, for e-mail response, even for the prosaic challenge of just getting out of bed and to work everyday...

While again admirable disciplines, reactive energy is usually not conducive to the kind of creative, imaginative, and “make things happen” vision and mindset that deal-making requires.

So to improve our dealmaking, we can ask ourselves these three simple questions:

1. What is our attitude toward risk?

This is a question that takes time and space to answer honestly.  My experience is that over time, most small business owners become far more risk averse. They increasingly struggle to differentiate between real risks and consequences, and those perceived, and - dare I say - feared as the consequences of what the failure (or in some cases the success!) of a big deal would mean for them and their companies.  

Quite simply, this question asks us to “catch ourselves” and to generally be more optimistic and opportunity-focused than perhaps our “default” “woe-is-me” mindset might have become.

2. How complex has our company’s decision-making become?

 

And how much has that complexity eroded leadership’s leeway and budgetary authority to think and act freely?

These questions ask us to confront stakeholder motives - are decisions and commitments being made on a “what is best for the company” basis versus what might serve or threaten a particular individual or stakeholder?  

3. Do we have the necessary proactive energy to drive big deals home?


Do we have the force of will and intensity of focus to attend to those myriad details and obstacles - big and small - that must be attended to and overcome to get a big deal done?

 

 Can we just “block out” the piles of minutiae and cycles of reactive response to focus upon and drive the truly important stuff?

 

 Above all else, great deal making requires a champion - a dynamic leader who does not accept business as usual and energetically cut through complexities and bureaucracies on all sides to get deals defined, progressed, and signed on the lines that are dotted!

 

 Grappling with the above questions forces us to be honest, both with ourselves and about what the cultural touchstones, good and bad, of our organizations stand now.

 

 And from this honesty can come the kind of breakthrough perspective through which we see, attract, consummate, and profit from deals that before were obscure and seemingly unattainable.

 

 Let’s get some big deals done!  Today!

 

 Want Some Big Deals for Your Company?


Tired of business as usual at your company?


Want a burst of ideas, capital, and action to propel your company forward?


If so, we should talk.


Click here and complete this short questionnaire as to a few questions regarding your business’ current status, and key goals now.


And we’ll reach out with our thoughts to help you.

Categories:
 

This is MUCH more important than Ideas


 

Amazingly, two of the world’s largest management consulting firms - McKinsey ($8.8 billion annual revenue) and Bain ($3.8 billion annual revenue) - no longer focus on giving their clients new ideas.

Where once these firms almost exclusively prided themselves on their “Think Tank” strategy and idea generation expertise, now their fastest-growing practice areas focus on “grittier” execution work - especially with technology projects like digital marketing, hardware and software modernization, metrics dashboarding, and business automation through artificial intelligence and machine learning, among others.

In fact, some of Bain’s largest projects now involve helping clients execute on ideas that they generate themselves but on their own can’t get done!

Now you would think an execution-focused business environment would be one where smaller and normally far more efficient companies would thrive and compete very well vis-a-vis their larger brethren.

But too often, unfortunately,  small company executives find themselves caught in a “keep the lights on” survival cycle, or - even worse - just waiting with forlorn hope for that “big idea” to save them.

And what gets crowded out are many, very easy execution-based approaches to growing a business.

Like simply working harder and longer.

Or learning how to complete projects more quickly and cost-effectively.

Or how to reduce labor costs and make our core team more productive via business automation tools and platforms.

Luckily, learning how to execute better has never been easier, as hundreds of awesome books, articles, websites, and role models on the topic are readily available to us.

And...even when deep down we know that no matter how much we try, we won’t be able to get the big and important stuff done on our own...

...well just like Bain does for its biggest clients, smaller businesses too can contract with outsourced partners to have those ideas done for them.

The first, most important step is simply putting great execution right toward the top of our company values chart.

For inspiration, think of the entrepreneurial legends - Ford with the Model T, Watson with the computer, Disney with the theme park, Gates and Allen with software, Wynn with modern Las Vegas, Bezos with e-commerce, Zuckerberg with social media, Musk with the electric car, and on and on...

Entrepreneurs all with very big ideas....

...but even bigger commitment to the thousand million details, projects, and to-dos to transform those ideas into brilliant business reality.

Need Better Execution in Your Business?

Have good ideas but need a burst of better business execution to get them done?

If so, we should talk.

Click here and complete this short questionnaire as to a few questions regarding your business’ current status, and key goals now.

And we’ll reach out with our thoughts to help you.

Categories:
 

This Simple Formula will Change Your Business Forever


 

The potential of any business can be calculated by its “Idea Formula,” namely:


The quantity of new ideas a business generates X its probability of successfully executing upon the best of them.

Let’s start with quantity - disregarding how good or bad an idea might be, the fact that a company culture is vibrant, accepting, creative, optimistic and ambitious enough to contemplate "new stuff" is one of the most powerful indicators of a future-focused, and thus high value, business.

Of course, the vast majority of these ideas - whether they be for new products, marketing campaigns, or revised pricing strategies, job descriptions or work processes - will after relatively quick review prove to be too risky, too costly, or in the cold light of morning just flat out not good, and thus deserving of quick discard.

This is fine, because more than a few of them will also reveal themselves to be of quality - possessing business promise and thus worthy of deeper investigation.

I wrote last week on a good shorthand to conduct this investigation and to move the most promising ideas forward, from the visualization to the “let’s go for it!” phase.

Which takes us to the 2nd half of the formula - execution.

Luckily for us, business history is enlivened with and defined by tales of entrepreneurial masters of great execution.

From Thomas Edison and his famous quip that what he really should be applauded for is the 10,000 ways he discovered to not invent the light bulb...

...to Steve Jobs’ maniacal talent for wringing from his people their absolute best work (even if it meant driving them to physical and mental exhaustion)...

...to closer to the modern day, when scores of direct-to-consumer e-commerce companies like Warby Parker, Casper, Dollar Shave Club, and The Honest Company have the ability to break down to the most minute detail all of the components of a product design, distribution and consumption life cycle...

...from these examples, we can quite easily see the firm connection between intense and engaged leadership and companies with strong execution capacity.

So, improving our company’s Idea Formula is simple - it starts with us business leaders leading and inspiring and encouraging more, better ideas from everyone in our organizations.

And if the ideas don’t appear, or if the ones that do just aren’t very good, then being humble and self-aware enough to outsource to the legions of able service providers of all types (i.e. marketing, product design, customer fulfillment, financial, etc.) to develop the new ideas for us.

With the ideas in hand, it comes down to execution, and here - perhaps more than anywhere else in our business - a little honesty goes a long way.

Maybe we can’t get things done.

For whatever reason - because we are too old, too young, too tired, too busy, too burned out, too whatever.

Then we need to get out of the way.

And find someone who can.

Or if we truly believe we’ve still got it, then let’s take our cue from the entrepreneurial masters.

And channel their work ethic, their mania, their attention to detail, their sense of cause and business purpose...

...and start executing upon our best business ideas with more speed and effectiveness than ever before.

Need Change in Your Business?

Feeling sales, pricing and margin pressure coming at you from all sides and not sure what to do?

Need new ideas and a burst of better execution to get your business unstuck?

If so, we should talk.

Click here and complete this short questionnaire as to a few questions regarding your business’ current status, and key goals now.

And we’ll reach out with our thoughts to help you.

Categories:
 

Is it a Cost or Investment? Answering this Right is Crucial


 

One of the hardest decisions a business owner must make is determining when an outlay of scarce business cash should be seen as a cost...


...and thus with the goal of minimizing “money out” as much as possible.


And when that same outlay should be viewed as an investment...


...with the goal of building a company’s asset portfolio and maximizing long-term ROI.


Sadly, in most small businesses no distinction is made.

The usual mind-set is frugality, whereby any “money out” no matter its potential strategic value is reviewed through a strict “minimization” filter - i.e. the lowest cost option being highly preferred.

Now, for sure frugality is and can be a business virtue, as evidenced by the legion of over-funded startups that burden themselves with high, unsustainable cost structures and then recklessly burn cash and doom themselves to quick insolvency.  


In more mature businesses, high cost structures often force companies - even if they don’t really want to - to sell “legacy” products and services and take on patently "unstrategic" and unattractive customers to pay the bills and keep the lights on.


In contrast, frugal businesses stay nimble, and pivot and respond as marketplaces become more competitive and customer preferences and demands change and evolve.

But too often, frugality becomes an end in itself versus what it should be...an empowerer of a brighter company future.  


Contrastingly, usually the most interesting cash outlays a business are its potential investments where long-term ROI and the contribution of that outlay to a company’s asset portfolio are far more important considerations than cost.

Here are some common scenarios where this is the case:

  • When evaluating employee compensation.  

  • When designing and building new products and services.


  • When building "soft" company assets, like the brand of the company, its logo, collateral, and its strategic and financial plans and forecasts.


  • When evaluating “inorganic” growth opportunities, like financing and M&A.


  • When evaluating outlays for technology - both on the hardware side (desktops, laptops, fast Internet, etc.) and software (Salesforce, Slack, QuickBooks, et al).


All of the above are examples of working on and not in the business kinds of decisions and cash outlays, and where the three questions below can be a quick acid test to distinguish between when we should be assessing them through investment and not cost lenses and filters:


  1. Will the outlay be a saver of time and worry for senior leadership?

  2. Will the outlay make more of a long-term versus short-term business impact?

  3. Is the outlay one we “fear” to make?


This last question is of the “trust our business gut” domain - the natural wisdom that arouses: a “pit in our stomach” when we contemplate projects and opportunities that call to our highest and best selves.


A neat thing about this three question approach is how it shortcuts more complex and data, financial and accounting analysis while as often as not arriving at the same answer.


And with time and energy saved, we can then turn our full focus to finding the courage to do what we know we should:

Make the best long-term decisions, commitments, and investments we can for our businesses.


And ourselves.


Need to Focus More on Opportunities in Your Business?


Feel like you are just “treading water,” and focused too much on the costs and expenses of your business and not its opportunities?


Need a burst of energy, ideas, and vision to get your business unstuck?


If so, we should talk.


To learn more about our business planning, innovation, and execution services, click here.

 

And we’ll reach out with our thoughts to help you.

Categories:
 

Two Words from Jeff Bezos that Can Transform Your Business


 

Last week, Jeff Bezos, in his annual letter to Amazon shareholders, listed many of the company’s incredible successes. 

Like Amazon Prime signing up its 100 millionth member. 

Or Amazon Web Services growing to be a $20 billion+ business. 

Or its acquisition of Whole Foods. 

Or how last year the company sold and shipped more than five billion items.  

And then he did a remarkable thing.  
 

He shared why and how Amazon has been able to accomplish all of the above and so much more. 

And to keep doing so in spite of now being a very big (560,000+ employees) and mature (20+ years old) company. 

For Jeff Bezos, it comes down to two words and all they represent.

High Standards.

A simple concept that all of us have been taught in some form - from our parents, from school, from professional mentors as we have made our way through our careers.

But a concept that when promulgated and enforced rigorously and daily throughout a business organization is the only true wellspring of lasting success.

Bezos notes how Amazon’s culture of high standards naturally derives from the its call-to-arms of "meeting the high expectations of our customers."

With false modesty and to make the point that he does not equate high standards with perfection, he remarks that Amazon has had "some success" in meeting these expectations, but “billions of dollars in failure” too.  
 

Then, he emphasizes that only through teamwork and culture can true and lasting organizational high standards be conceived and achieved.

And that it naturally follows that high standards are not intrinsic to an individual, but are teachable, "contagious" and able to be learned "through exposure."
 

To bring the point home, Bezos concludes with this thought on the importance of human talent and skill: 

How about skill? Is it another required element? In my view, not so much, at least not for the individual in the context of teams. The football coach doesn’t need to be able to throw, and a film director doesn’t need to be able to act. But they both do need to recognize high standards for those things...someone on the team needs to have the skill, but it doesn’t have to be you.

This is about as guiding a formulation of what effective business leadership and management is all about as we might ever read.

I've written often about Amazon because of the company's outsized impact on competitive marketplaces and customer expectations across almost all of modern society and business.

While they, like every complex organization, are not without their flaws and justified distracters, it is energizing and motivating to get a “peek under the hood” of the business engine that had outraced so many competitors for 20 years on now.

Meeting the high expectations of modern customers demand extraordinarily high standards of performance across all aspects of our organizations.

For sure, this is a lot of pressure and hard work, but also as Jeff Bezos lightly ends his letter...“high standards are fun! Once you’ve tasted high standards, there’s no going back.
 

Amen to that. 

Need More High Standards in Your Business? 

Feel like you and your team are not performing at a high enough level to really “break out of the pack” and compete and win? 

Need a burst of energy, ideas, and vision to get your business unstuck? 

If so, we should talk.  

To learn more about our business planning, innovation, and execution services, click here. 

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Overcome Business Stasis [or Pay the Price]


 

A good friend of mine runs an IT consulting business. 

From the outside, it seems successful. He has solid revenues and marquee clients. 

But if you look closely, the business is actually crumbling beneath him. 

Because its core fundamental - the "delta" between what competitive pressures allow him to charge his customers and his fixed and variable costs - especially the cost of his W-2 employees - has been shrinking year after year.

Even more ominously, my CEO friend sees this squeeze only being tightened in the years to come by that merciless combination of high customer information plus low switching costs plus competitors willing and able to perform comparable work with lower cost structures and profit expectations and needs.

Now, let’s be clear, entrepreneurs and executives get paid a lot to identify the root of a business problem, its solution, and then to persist, overcome, and win. 

And to do so no matter which sacred cows might need to be gored in the process, whether those be an old brand identity, nice office space, long-time employees and of course the all time favorite “the way that things have always been done.”  

Alas, my CEO friend, so ambitious, admirable, clear minded and strategically brilliant in so many ways... 

...well he sees these swirls of dangerous marketplace and technological change all around him and intellectually understands what he must do yet he does nothing.

This is business stasis, and there's a strange but solid case to be made that, in spite of how much the speed of business has increased, that it is more of a problem today than ever before.

A first reason for it was outlined by economist Thomas Piketty in his seminal work, Capital In The 21st Century.
 

Pinketty’s hypothesis was that the affluent now make most of their money not via labor - in the case of business owners, from their company’s operating profits - but from their capital - i.e. their inheritances, stocks, bonds, real estate, and the like.

Thusly too many business owners, like my friend, want to see their businesses perform better, but don’t need them to do so to maintain their comfortable lifestyles.

Combine this economic reality with a certain fatalism that nothing that could be done will make a real difference anyway in the face of the inexorable onslaught of technology and globalization and...
 

...a certain “deer-in-the-headlights” inertness and inaction that can overtake even the most dynamic and change-oriented among us.

Now, the above is all intellectually interesting, but does not make it excusable, defensible, or right.

Because just as we could not defend a businessperson who purposefully set bags full of $100 bills aflame, nor should a pass be given to those who sit idly by and watch otherwise promising and valuable businesses slowly crumble because of leadership inaction.

No, what these “inert” business owners and executives need is a big bucket of ice water poured over their heads and a firm slap in the face (or several!) to snap them out of it! 
 

And do what they should do - calmly assess the threats facing their businesses now, along with those inexorably rolling down the road. 

And get out of their way.   

And do something else.

While that “something else” might be different for every business, determining it for a particular business really isn't that hard.

It is usually as plain as day, and when it isn’t a reasonably astute outsider - a hired consultant or a well-credentialed business friend - in a relatively short amount of Q&A, discussion and then competitive research, can easily surmise the needed business pivots. 
 

From there, it is then up to the owner/executive to do what is their sacred responsibility and charge to do.   

To drive change. 

The good news is that once the “change snowball” is set in motion, the additional energy needed to keep it rolling down the hill is normally not all that much. 

The key is to just get it going.  Today. Right now.  Without delay. 

Because waiting on inexorable fate is no way to live. 

Or run a business. 

Need to Overcome Stasis in Your Business? 

Feeling pricing and margin pressure coming at you from both sides and not sure what to do? 

Need a burst of change energy and ideas to get your business unstuck? 

If so, we should talk.  

Click here and complete this short questionnaire as to a few questions regarding your business’ current status, and key goals now.  

And we’ll reach out with our thoughts to help you.

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