Thursday, 23 July 2015
Tuesday, 21 July 2015
Do or do not…there is no try.Yoda to Luke Skywalker The Empire Strikes Back
Some places measure effort in working hours. Others on a series of objective and subjective measures. All of this begs the question; is effort important?
Effort is measurable and valuable in one area, improvement. Improvement is change in measurable output. Sales went from X to Y…unit production went from X units/ hour to Y units per hour. This helps those people with potential who get off to a slower start, but may well prove valuable to the company in the future.
Tuesday, 23 June 2015
“The minute you read something that you can't understand, you can almost be sure that it was drawn up by a lawyer.”Will Rogers
Accountants are the pathologists of business. They can tell what wrong six months after the business died!Bill Erichson
Over the years, I have worked with hundreds of business people and I have found an important truth… business is too complex to run without professional advice. A well run business has three key advisors: a lawyer, an accountant and a business advisor. The trick is how to use the advisors in order to help you run a sustainable, successful business.
The Business AdvisorBusinesses need good business advice. This is what I do for my clients. In general, business advisors help the business owner see the big picture, mentor the owner and keep an eye out for the pitfalls that often lead a business down a dangerous path. Some business advisors are technical specialists and focus on particular industries. Others are business specialists, usually concentrating in on are such as marketing or finance. A good business advisor helps you make decisions that make good business sense! This is a critical factor when making decisions. The advisor helps you look at things from different sides, and often looks at unforeseen risks and unintended consequences.
The AccountantBusinesses need good accountants. Accountants, recent advertising notwithstanding address financial issues, especially around the preparation of financial statements and tax returns and around providing solid financial advice. Many business owners simply use their accountants as tax strategists, and in truth, many accountants look at business through a ‘tax lens’. Unfortunately, many accountants are not as expert as explaining things as they are doing things. As one client once told me, “Five minutes into my meeting with my accountant and all I see are dancing cows.” Accountants are essential, not only for taxes, but for helping entrepreneurs make good financial and tax decisions.
The LawyerLawyer jokes notwithstanding, it is imperative to get good legal advice. Contracts are tricky, whether we are talking about a lease, loan agreement or sales contract; all of these are contracts and are written by lawyers for judges! They are often incomprehensible to normal people, but the language of contracts is important. This way, the intent of the agreement between two parties is reflected in the legal agreement just in case anything goes wrong and the contract goes to court or to arbitration. Lawyers look at your business through the legal lens just as accountants often look at the business through the tax lens. A good lawyer is an essential part of any business.So, what is the problem? The problem is how many business owners use their advisors. I have a rule. See your business advisor first…your accountant second and your lawyer third. The reasoning is simple. If a decision does not make good business-sense then don’t do it. (I am always amazed that people make decisions to spend money because they can “write it off”. Remember, you have to write it on before you can write it off!)If a decision makes good business sense, then meet with your accountant so you can structure the decision to ensure it makes good financial and tax advice. This can include buy vs. lease decisions, to structuring contracts for tax purposes. If a decision does not make financial advice, then again, don’t proceed!Finally, if the decision meets the first two criteria, then see your lawyer. Ensure that the decision makes good legal advice and that you structure it correctly. Lawyers often see the differences between an agreement, as you understand it, and the contract as written. This is far cheaper than trying to enforce something not found in the contract, but something you are sure should have been there.You need all three pieces of advice. For example, if you decide to incorporate, it should make good business sense, tax sense and legal sense, and the legal agreement and shareholders agreement must reflect the intent of those involved. A shareholders agreement is developed to protect both the shareholders and the corporation from the future disputes that will inevitably arrive.So use those advisors. In my experience, they are on your side and are advocates and allies in your enterprise. Find good advisors and then trust the advice you receive. It will save you from harm, and help you build the kind of foundation to build a successful and sustainable enterprise.
Monday, 1 June 2015
Believe in yourself! Have faith in your abilities! Without a humble but reasonable confidence in your own powers, you cannot be successful or happy.
Norman Vincent Peale
My father thought that his way of getting to the important aspect of an engineering problem was obvious. In fact, he got frustrated with anyone who could not do the same. I have met instinctive sales people who make terrible sales managers. I met one woman who was a recruiting savant. Her techniques were non-transferable to anybody else, but she rarely made recruiting mistakes, and when she did, she said that she didn’t use her instincts.
- Not everybody has the gift. They reach the same destination using a more formal process.
- Try to de-construct your gift. This is the only way you can pass on your instinct to others.
Monday, 18 May 2015
Sunday, 26 April 2015
- The search snippet (The brief snippet Google displays below the company name, describing the Website) is useless at driving business. Nine out of ten users ignore the search results and select a competitor’s website. The company spends time and money for search optimisation, yet fails to convert due to this one small, but critical error.
- The home page leaves new users confused. Testing shows the entire forty-nine page Website is so confusing that most users simply give up. The calls to action do not stand out and it is unclear what action the customer should take.
- The Website does not take advantage of any management tools such as page based SEO or split testing. There is no conversion optimization testing, but rather the owner bases the design on guessing what customers really want. To make matters worse, there is no performance testing to confirm if the guess was correct.
- The president institutes changes without any strategy or change management process. The result is unreliable and inconsistent performance.
- It takes over twenty seconds to return a list of products selected to the shopping cart. This is due to high levels of unnecessary customization. Twenty seconds is an eternity in the internet world.
This company breaks every e-commerce rule in the book except one…that they make money! They are doing one very important thing right that is customer service. Company policy is is always do right by the customer. Examples include:
- Anyone who complains receives a free company T Shirt; talk about turning enemies into friends.
- If a customer perceives any financial loss, the company reimburses them without question.
- The customer support staff are empowered to do whatever it takes to make a sad customer happy.
- The company president follows up every complaint with an email asking the complainant, "Did we solve your problem, are you happy, and is there anything else we should do? “
In my experience, most business owners are lousy business people. They are, typically, very good at what they do or very good at sales and marketing. To sustain a business, owners and their teams must develop a more complete skill set, incorporating all aspects of business and not merely in the areas they prefer or the areas in which they are comfortable.
Wednesday, 1 April 2015
Joseph collected all the food produced in those seven years of abundance in Egypt and stored it in the cities. In each city he put the food grown in the fields surrounding it.The seven years of abundance in Egypt came to an end, and the seven years of famine began, just as Joseph had said. There was famine in all the other lands, but in the whole land of Egypt there was food.Genesis 41
Sunday, 8 March 2015
Hofstadter's Law: It always takes longer than you expect, even when you take into account Hofstadter's LawDouglas Hofstadter
The Optimism Bias
Saturday, 21 February 2015
Chances are good there is a psychopath on your management team.
Most of the entrepreneurs I have met throughout the years are great people. Working with entrepreneurs is the one of the highlights of a career working with business owners. Whether they are pre-start ups, or successful, long term businesses successful entrepreneurs are generally enthusiastic, positive and forward looking people. There are also two 'negative' characteristics possessed by many successful owners. In the right measure, these characteristics form an integral part of the entrepreneurial success persona.
As you know I am a geek. I like useless information, spreadsheets and science fiction. I recently watched an old episode of Star Trek called "The Enemy Within." A transporter malfunction splits Captain Kirk into two halves: one meek and indecisive, the other violent and ill tempered. The ‘good’ captain, was indecisive and unsure of himself while the ‘bad’ captain was violent and selfish. The social premise (and there were several in Star Trek) is that we need both halves of ourselves to survive. We need both the caring, thinking human being and the cunning violent beast.
Most of the successful people I know have a trace of ruthlessness. At the heart of ruthlessness is the ability to make hard, fast decisions and execute them quickly. Sometimes, people get hurt when these decisions are made. Decisions to fire people is a prime example. We have talked about the importance of firing the wrong people in the ninth law The Dangers of Settling. On paper (or even on a computer screen) this is easy. In reality firing people is difficult for most people. A fellow with whom I worked once joked, “The first time you fire somebody is hard…after that you can start to enjoy it.”
I remember my first fire. My boss was so concerned that he called me to make sure that I was OK. (I am not very ruthless.) Ruthlessness is not confined to human resources. One of my clients went through a ‘demarketing’ program. He systematically went through his customer list and dropped small and unprofitable customers. The reactions were amazing. Some of the customers were really upset, even though he found alternative suppliers for the former clients. He had to be ruthless. Some of these customers were costing the company money and others were tying up valuable productive capacity with low margin, low volume jobs.
Sometimes we have to act way outside of our own characters. We have to act in a manner not consistent with our nature. But that little bit of ruthlessness helps the timely execution of those unpleasant decisions all entrepreneurs make from time to time.
Now some may think that this is not paranoia, but rather extreme cautiousness. OK…it really borders on extreme pessimism. There is something about paranoia, assuming that your competition is ‘out to get you’ that resonates with many entrepreneurs.
Just as too much ruthlessness can make you too mean for business, too much paranoia can paralyze you. You want to have just enough paranoia to keep you on your toes, and prevent you from getting too complacent. In business, it a safe bet that there is someone out there who wants to steal your customers. There is another company looking to gain on you through better products, better service or more cost effective processes. A am sure that Blockbuster never even gave Netflix a second thought. After all, they sent DVDs by mail! Now, Blockbuster is broke, and Netflix is huge. So much for a lack of paranoia. (As a friend of mine once said, “Even paranoids have real enemies.”)
The Entrepreneurial Nature
We entrepreneurs are a strange breed to begin with. I am a third generation self-employed. My great-grandfather was a blacksmith and farmer. My grandfather was a wheat farmer in Alberta. My dad was a self-employed Electrical Engineer and I am a business trainer and consultant and my brother is a self-employed contractor. My son, is in the film and television business, where everyone is considered self-employed. This demonstrates beyond any reasonable doubt that insanity is truly genetic.
Tuesday, 10 February 2015
To influence people, you must learn to tell your story. Telling your story, warts and all, makes you human and more likeable. Structuring your story makes you more understandable.
Wednesday, 4 February 2015
If everybody else jumped off the Lions Gate Bridge, would you jump off the Lions Gate Bridge? (It all depends on the tide and wind conditions)
Don't fear failure so much that you refuse to try new things. The saddest summary of a life contains three descriptions...could have...might have and should have.
Tuesday, 3 February 2015
One person with a belief is equal to ninety-nine who have only interests.John Stuart Mill
Saturday, 24 January 2015
The biggest risk is not taking any risk…In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.· Mark Zuckerberg
Tuesday, 13 January 2015
The 737, which is made up of 367,000 parts, is assembled at a factory in Renton, Wash., south of Seattle. Boeing delivered 372 of the single-aisle 737s last year — a little more than one a day.· NBC News
Tuesday, 6 January 2015
Trying to create scarcity can backfire. In anticipation of demand for the 2015 World Junior Hockey Championships, the Montreal organizers raised ticket prices to a rate much higher than the NHL Canadiens. The result was empty seats in the stands…taking away for the overall hockey experience.
Scarcity and urgency affect consumer behaviour and price sensitivity. Creating, or at least understanding these two pillars of your customers' mind will help you develop a more robust pricing policy.
Happy New Years. I look forward to more posts as the year progresses. This is a great time for forward planning, change and business development.