A friend of mine was in a meeting this past week, talking about some unique deal structures she’s put together through her years as an entrepreneur. The meeting organizer loved what she presented and immediate started talking about putting on an event for her to present it to a larger audience. From prior experience, she knew the tendency of this group to expect her to do this on a volunteer basis and wanted to nip that in the bud.
“You know, this is not the PTA. If you have some funding for this, I would be happy to discuss it with you.”
The organizer chuckled and actually high-fived her for her directness. What she knew, and I have personally seen, too many people – mostly women – are all too quick to offer valuable services for free. We do it on a whim, almost a knee-jerk reaction.
We then work to rationalize or justify giving away our time:
- “I’m building credibility”
- “I want to give back”
- “It would be good experience”
- “I need good references”
I’m not buying it. We give away too much. One of my favorite quotes that I have hanging on my wall at home as a reminder: “Stress is what happens when your gut says no but your mouth says “Of course, I’d be glad to.”
Don’t get me wrong – I am all for giving back and encourage volunteer work and philanthropy, but it must be proactive rather than reactive. It must be done strategically – intentionally.
It’s great that so many entrepreneurs want to change the world, but as I tell my students and clients: It is easier to change the world when you have money. Focus first on building your business by meeting a need in the marketplace for which customers are willing to pay. Give away your time or products only when the cost/benefit has been carefully thought through and the strategic value understood.
Next time you’re in a situation where you’re tempted to raise your hand and volunteer, stop and think. If someone around the table is getting paid to be there, why not you?
With the economy experiencing dark times, a lot of companies are focused on innovation right now. Everyone wants to know where that next “Big Idea” is and how to make it happen. I wish I could tell you there was a quick way, some software, or even better, a RainMaker who could come in and make it all happen regardless of whatever the rest of your company is doing. Alas, capitalizing on innovation takes more than just funding and a dedicated project team, especially if it is something you want to do more than once or twice. What sustainable innovation really takes is the right processes bolstered by the right culture. My recent experience at the World Innovation Forum confirmed and supported what I have been teaching and facilitating about finding opportunities to innovate. It requires different types of thinking, searching for the “job to be done” as Clayton Christensen put it, rather than the typical customer-specific segmentation. I’ve actually been using his “milkshake” story for a couple of years now - I think I got it from an old HBR article. Diversity of thought and experience is crucial as well. Most new innovations come from making connections between disparate ideas and industries. Take for example biomimicry, the study of nature to find new products. That’s how the idea for Velcro came about - burrs sticking to someone’s clothes. There’s even a non-glue adhesive being made after studying how Gecko’s walk up walls. Opportunities to “Get Sparked” are often right in front of your eyes if you care to notice them. Turning on the right filters, though, can take effort.
Once you have a lot of ideas the next challenging step is getting out of what I call “Shiny Penny Hell(TM)”. This requires separating the ideas from the opportunities and then ranking them according to some criteria you’ve established for moving forward. We spend 6 months doing this in our ACTiVATE class but the time this takes depends on the resources available to focus on it.
Armed with a set of whittled-down opportunities, it is time to “Get Real” by analyzing feasibility. It is an iterative process that can go as shallow or as deep as you need to answer the question “Will this work?” according to your criteria. The other equally crucial part of this phase is to make the plan for moving forward – the how. For external innovations, how will you reach the market and convince them to buy your product or service, how will you challenge the competition, how will obtain the resources necessary (financial, people, materials), etc. Not being willing to fail at this stage is a real innovation killer because it means that you’re not taking risks. Taking the time to evaluate feasibility thoroughly provides the opportunity to Fail Fast, especially good when high costs are involved.
Once opportunities have been deemed feasible and an implementation plan devised, it’s time to “Get Results.” Unfortunately this is the point at which most people and companies fall flat. It requires that accountability and transparency be well defined with metrics that can indicate when adjustments need to be made. A willingness to change course or to kill the project is also required, though a thorough evaluation of your measurements to make sure they’re not “innovation killers” is also key.
Does this sound easy? For some, maybe. Innovation requires specific elements of an entrepreneurial culture as the soil in which opportunities can grow into cash. Without the right foundation you might get lucky, but true innovation is hard to sustain without the right environment in which to grow and flourish (and sometimes even fail!).
In forward-thinking companies you’ve worked with, created, or led, what have you seen as the crucial elements of the innovation soil?
Pop quiz: What should you do with your marketing budget in a recession?
A. Cut it
B. Increase it
C. Keep it the same but use it wisely
If you answered A, you’re WRONG. Marketing is the last place you should cut when faced with an economic downturn. Whether B or C is right for you depends on the nature of your business and who your customers are.
For one woman, Carolyn Warrick (pictured on the left) of Carolyn Does Quickbooks (CDQB), cutting her plans for putting on a Customer Appreciation Breakfast was never an option. Smartly, she knew that when the times are tough, you need to pull your assets even closer. For her, that means her clients.
A couple of weeks ago, Carolyn and her daughter Cheree (pictured, on the right), who is the author of “7 Ways to Grow Your Business Using Quickbooks” (and who is joining the company full time in July), hosted 30 of their clients to a full breakfast along with a paid keynote (by me) on how to grow your business in a down economy. In my speech, I couldn’t help but refer to the very event we were at when speaking about the difference between customer loyalty and customer satisfaction and how to drive loyalty. Didn’t know there was a difference? Consider the following:
I am happy with my Ford Expedition. It’s a decent car, it has held up well, and gets the job done for me. Our next car might be a Ford, or we may look at other models. It will depend solely on the economics of it (price vs. meeting our needs).
I am THRILLED with my Lexus. The car do the ‘job’ I hired it to, but it certainly isn’t perfect. But I just got a letter in the mail from their service department. Apparently I still have a free oil change I haven’t used even though I bought my car 3 years ago. When I take my car in for service, they give me a free loaner (another Lexus!). Oh, and after my car is serviced they personally call me to ask me about the service. I would absolutely buy another Lexus.
I am satisfied with my Ford. I am loyal to my Lexus.
By taking care of her customers and going beyond the service they’re paying her for, Carolyn is building a loyal customer base that doesn’t hesitate to refer her to others. She still has to perform and do a good job to satisfy her clients, but taking that extra step to keep them loyal really pays off both personally and on the bottom line.
What do you do to build customer loyalty? Is everyone in your company engaged in that mission?
Last week, I was fortunate to be one a several “Official Bloggers” for the World Innovation Forum. Since then I’ve written several blogs on the great sessions and information I got there. What I haven’t shared, yet, is how much fun I had. I really saw the power of Twitter first hand! Let me explain…
There was a special section at the event reserved as the “Blogger’s Hub“, which was sponsored by Pitney Bowes. They had tables, power, and wireless internet ready (mostly, anyway) and waiting for us. Our job during the event was to capture the essence of what was being said on stage through our “tweets” - 140 character micro-blog posts and to take notes for sharing our insights later on our blogs.
This was my first “live feed” event as a tweeter so it took some time getting used to listening, distilling, and tweeting. At first, many of us were saying almost the exact same thing. Once we got to “know” each other, though, we started to play off of each other. If someone had captured an idea well, we “re-tweeted” it (re-sent what they had said) rather than restate it ourselves. We even started getting into discussions back and forth debating what had been said. My favorite was when the inside jokes started flying. At one point, one tweet was so funny that there could be heard a low chuckle amongst the Blogger’s in the Hub.
When a friend asked me to describe what it was like, the best I could come up with was this: It was like being at a cocktail party, listening to someone else speak and being able to hear other people’s thoughts on the topic at hand. Sometimes it was just a restatement of an idea for the benefit of those not present (which was VERY helpful!) and other times it was an opinion or observation which could lead to debate or realization of similar thoughts.
The most unexpected benefit of participating was that I met some wonderful, smart, and talented people (that’s us in the picture!). We laughed one night at dinner when we thought we got “peppered” and were quick to forgive when we realized it was an honest mistake. The experience fostered admiration and maybe even friendship with people behind the avatar. Could there really be something to this twitter? Follow me, engage in the discussions, and find out!
Those of you who know me, know that my participating in a marathon is about as far away from possibility as my starring in a Broadway musical. I am sadly tone deaf and do not like to run, much less for more than necessary for mere survival.
But last week, as a result of participating as one of the official bloggers for the World Innovation Forum, I was asked to participate in an innovation marathon called 24 Hours of Innovation. Running from 4 a.m. EDT May 15th to 4 a.m. May 16, 24 Hours of Innovation is sponsored by the Board for Innovation. The Board is dedicated to providing a global platform for innovation. According to the Board’s Web site, this will be a “non-stop, online marathon of innovation initiatives from around the world.”
I need your help!
My contribution for this marathon will be focused on entrepreneurial innovation. Specifically, how do you find it and how do you keep it alive as your company grows! I am looking for ideas and stories to use for this angle so please comment below and share with me your thoughts on the topic.
And don’t forget to tune in this Friday-Saturday for 24 Hours of Innovation. No doubt you will find tips, ideas, and inspiration to kick up your personal or business activities in innovation!
He covered so many good ideas that they can’t all fit in one blog but one area I found particularly poignant was around segmenting a company’s strategic choices into 3 boxes.
Box 1 is managing the present – closing the performance gap between where you are and where you want to be with existing customers and products. Box 2 involves projects and initiatives that close the opportunity gap between what your company does and existing opportunities it could exploit. The third box is about creating the future – clearly the hardest one to capitalize on.
Box 1 initiatives, he recommended, should comprise about 60-70% of a company’s strategic projects given the current economic challenges. These are more tactical or shorter-term refinement of what you’ve already got. Think: restructuring. This is where you’re doing benchmarking looking for best practices in your industries and modeling those.
Box 2 initiatives focus on adjacent growth – pushing existing competencies into adjacent customers, products, or geographies. Under “normal” economic conditions, he recommends that these projects make up 10-20% of you strategy but in today’s environment, he suggested an adjustment to 15 – 30%.
Anything that launches into new territory would fall under a box 3 initiative. Along with box 2, this box ignores best practices and strives to find or create “next” practices. He gave an interesting story around this using the Olympic High Jump. Essentially the techniques that were used for the high jump were considered “best practices” only until the next style of jumping was perfected. Each time, experts said “this is the best” but when another approach was perfected, that became the best. The last one, which is called the Fosbury Flop (named, of course, for the guy who created it) redefined all the rules and is still the current standard.
How many of your strategic initiatives are Fos Flops? Better question: how well balanced are your projects between the 3 boxes? Another interesting point he shared is that projects in box 1 must be managed completely different from the projects in box 3. In box 1, you’re working 95% with knowledge. In box 3, it shifts to 95% assumptions. Clearly, the ways those projects are implemented must be completely different.
At the end of his program during the Q&A, he made the point that the 3-box strategy also works for individuals. He suggested putting your daily activities into one of the 3 boxes to see if you’re spending your personal growth time in the right places. Do you have enough Fos Flop opportunities on your horizon?
Day 1 of the World Innovation Forum in New York City has been a whirlwind. Very much like drinking from a fire hose.
First up: Paul Saffo, technology forecaster from Stanford, provided an engaging start to the day with his insight into why now is an ideal time for innovation. The economic outlook is uncertain. According to Saffo, uncertainty is good. If everything was certain, he reasons, there would be no opportunity.
And I learned a new word: biomimetrics. That’s the practice of taking ideas from nature and turning them into new products. Saffo was talking about a new compound for glue-less adhesives derived from researching the feet of wall-climbing geckos. Makes me think about what other ideas nature might have to share with us!
He also talked a lot about the importance of being willing to fail. He mentioned that Silicon Valley was founded not on many entrepreneurial successes, but originally based on many failures. We teach the entrepreneurs in our ACTiVATE class to celebrate failure and to “Fail Fast”. Progress is built upon the rubble of failure. Initiatives that have been failing for 20 years or more, Saffo argues, are ideal places to find opportunities for innovation.
Some other great tips for entrepreneurial companies and ventures:
- Don’t mistake a clear view (from your vision) for a short distance. Everything takes longer than you think it will.
- Look for things that are the exact opposite of what they should be – could be an innovation opportunity. Keep a journal of these things you notice.
- You must look to the past to find trends moving forward. Look for rhythms and patterns, not repetition.
- His guess on the next technology “big ideas”: robots and sensors
Finally, I was able to really connect with him when he started talking about how to make people more comfortable with change. He said that the more we can make the strange seem like something we know and make what we know seem strange, the more open we’ll be to change. Hmmmm. Could relating unknown entrepreneurial business challenges to the more “known” family dynamics help more people start and succeed in business? Someone should write a book about that! Oh, yea. I already did.
I was immersed in thoughts of my upcoming jaunt up to NYC for the World Innovation Forum when I received an e-mail from one of the entrepreneurs I featured in my book, Graham Weston. He is the Chairman of Rackspace Hosting, and hearing from him reminded me of a story that he told me about how his business started and the key to how they’ve grown, now to over $500M in revenues.
The founders of Rackspace actually started a different company in 1996 as an internet service provider which also did some application development. While customers were becoming savvier about developing their applications, few wanted to deal with the hosting part and preferred to outsource that. In 1998 they broke out the hosting into a separate company and Rackspace was born. Initially, they thought they were in the business of leasing hardware for their clients to put their applications on.
A significant number of new players began emerging in the ISP market forced the company to start looking for something to differentiate them from the competition. After talking with customers, they realized clients were buying more than just server space – they were buying peace of mind that their site would be up 24/7. All the other providers at the time focused on the technical side of the business but by understanding what their customers really wanted from them, the Rackspace management team realized an opportunity to win customers by focusing on customer service and support. This decision along with the successful execution of their strategy in implementing Fanatical Support®, they were able to not only survive the ISP shake-out but have come out on top as a provider of application hosting, sporting a promise of 100% uptime and a unique culture geared towards customers.
Understanding what your customer is buying is not difficult, but few companies do it. It requires that you ask the right questions and then – here’s the key – openly listen to the answers. It also demands that you appreciate that there is often a misunderstanding between what companies sell and what customers buy, a gap that can mean the difference between success and failure. You have to be flexible – willing to change your business/product or what you think about your business/product. I have seen that this is where many entrepreneurs and companies stumble.
I’m looking for examples of other companies who have innovated based on finding out what they’re customers are buying. Send me your ideas and stories and you may be featured!
I have blogged before about my invitation by HSM to join a prestigious list of leading bloggers at the upcoming World Innovation Forum next week on Tuesday and Wednesday May 5th and 6th. We’ll actually be in the BOX SEATS onstage at the Nokia theater in New York City. Guess I’ll have to guard my facial expressions better than that one event where I ended up directly BEHIND the POTUS and my facial expressions were broadcast all over the country. Ah, the lessons we learn.
We’ll be blogging and tweeting away, so check out the following incredible folks if you want to get different prespectives on the same event. If you’re on twitter you can follow us all (I am YourBoot) or just go to twitter and search on #wif09. Note that you do not have to have a Twitter account to see our tweets!
I get loads of e-mails every day – in the hundreds – and once in a while a message comes across that makes my day. Last week I received a note from a woman I had been mentoring in Iraq through the US Iraqi Businesswomen’s Partnership (USIBP) initiative, a program I helped create some 18 months ago working with various organizations including the US State Department.
I had not heard from her in over a year but I knew she had just recently given birth to her third child so I figured life just got in the way. In our correspondences last year, she was busy operating her pharmacy (she is a licensed pharmacist) and was trying to grow it. We talked about her challenges in finding good people to manage the daily operations and came up with some ideas on how she might be able to do that.
At the same time, she had also bought into a clothing boutique and a farm. I had advised her against spreading herself so thin but she couldn’t pass up the opportunities presented her. If you’re an entrepreneur, I am sure these challenges sound familiar.
Her recent e-mail made me smile. She is indeed doing well. She cashed out of the farm and boutique and bought into a company that imports medications from the UK. She is active in that company as well as her pharmacy, though her role there has moved to more of a CEO role since she implemented our plan to get her help and she has two people running the place that she trusts. The bonus is she gets to spend more time with her children while also making more money! It doesn’t get any better than that, does it?
She was writing to tell me about the 5 important business lessons she’s learned and they are so generally applicable, I want to share them here (they are presented in the order she provided):
Focus is critical. Buying into two other unrelated businesses distracted her focus too much. Once she bought out her partners in those businesses and focused on her core competencies, everything fell into place.
Stay in businesses you have some knowledge in. While I think you can go into new businesses areas and industries with a sound team and good advisors, it is generally better to stay in areas you know, can learn, or at least know enough to know where and when to get help. IT execs have been known to commercialize medical devices successfully, but that is the exception rather than the rule.
Have active and honest help you can trust. Once my Iraqi friend learned how to attract and incent the right kinds of people, her time was freed up to focus on other opportunities.
Know the markets and be careful with your money. Enough said on this one.
If you have more than one business, it is easier if they are in similar fields. She learned the hard way on this one - it is hard to run multiple unrelated businesses. Note that I didn’t say it was impossible, because many people do this. It is easier, however, if you can realize some synergies across businesses being in the same space.
What’s really exciting about hearing from my friend is the reconfirmation that online mentoring, even over such distances and language challenges, can work! I’m hopeful that we can resurrect the USIBP. We’re always looking for mentors, so if you’re interested in connecting with women in Iraq to help them grow their businesses, let me know!
But last week, as a result of participating as one of the official bloggers for the 
