Want a great “team”? Lessons from Moneyball

“Individually, we are one drop. Together, we are an ocean.” Ryunosuke Satoro

 I repeatedly see Business Owners struggling with employee performance which inevitably leads to discussion about the “team”. But, thinking “it’s the team’s fault” won’t fix it.

Getting the right people is the boss’s job

“Blaming a bad team for one’s difficulties is, by definition, a personal failure.” Christopher M. Avery, “Teamwork is an Individual Skill”

I can’t tell you how many times I’ve discussed “employee problems” with Business Owners, and whether a team member should be fired or coached. The question always comes down to: “Can they or will they be able to do what you need to run the business?” And, I’ve yet to find a business owner who can’t answer that question off the top of their head, i.e., they know the answer but that doesn’t mean they’re ready, willing or able to “fire” the person when the answer is negative. People hate hurting others but here’s the rub; it is the “Leader’s” responsibility to take care of the whole and not the individual, regardless of how distasteful that may be. As well,  there may be times when the choice is made to not reach full potential as an organization by choosing to accommodate versus liquidate. It’s a choice but as a Business Owner and Leader, it’s important to understand the implications. The critical question is always: what will make the team more successful?   

In the movie “Moneyball,” Billy Bean (played by Brad Pitt) wanted to win a championship and was willing to do whatever he could to do so. It wasn’t about taking care of individuals and what he accomplished was amazing but he “fired” a lot of people in the process. Rightly or wrongly, greatness isn’t accomplished by being nice.

And “Team Building” may be fun (especially if it is activity-based) but it doesn’t fix anything. That’s not to say that coaching can’t make a difference because, of course, it can (and over time it can make a huge difference) but hopefully you’re not hiring people who need to be taught how to co-operate. As in the movie, “Moneyball,” few have sophisticated algorithms to identify the best employees or even have the equivalent of experienced “scouts” who are adamant they incorrectly know best. That still doesn’t negate a Business Owner’s responsibility to find the right/best people for their business. It might not be easy but finding and implementing a way to succeed is always the Leader’s job.

Providing meaning, resources & clarity is also the boss’s job

“Teamwork is the ability to work together toward a common vision. The ability to direct individual accomplishments toward organizational objectives. It is the fuel that allows common people to attain uncommon results.”  Unknown

“Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work.” Vince Lombardi

Unfortunately, having the right people won’t do you much good if they don’t know how, don't want to or don’t have the equipment and tools to get the job done.

You need people who want to win and are passionate about “winning”. But, what’s winning in business? It’s less obvious than in baseball. It is crucial that you take the time to understand and define what winning is and communicate it to the team. How else are your employee’s going to know what to do? Cultivating motivation and commitment are also crucial but can be done only to a degree. You can only influence, you can’t control, although some people are a lot better at influencing than others. It’s about providing meaning and is the essence of what a leader needs to do. It also helps to provide coaching on how to get on base as is working on or finding bats to hit further and shoes to run faster so your team can get on base faster and score more runs. Bottom line, in order to have a great team it pretty much all comes down to Leadership. Sorry.

Question is, as a Business Owner, are you willing to step up to the plate to figure it all out and do what needs to be done?

How to Find Your Sweet Spot

Sweet Spot: The Intersection of Passion, Talent, & Economic Opportunity, Marelisa Fábrega

Sweet spot. You have one... You can do something in a manner that no one else can. Max Lucado "The Cure for the Common Life"

“The problem isn’t that we aim too high and fail, it’s that we aim too low and succeed.” — Sir Ken Robinson

I was recently at a Strategic Planning session where, of course, one of the exercises was to work on the company’s “Sweet Spot”. An unexpected, off-the-cuff sexual innuendo caused the room to explode into hysterics. Thankfully, someone had the good sense to recommend a break or else I don’t know that things would ever have gotten back under control. It was one of those rare, hilarious moments that would be the envy of any comedian. And while you wouldn’t have expected it to be a “productive” use of time, it was in a strange way. It, ironically, provided a pretty good analogy for understanding the impact of finding your “Sweet Spot”.

I personally think of a sweet spot as meeting the following 3 criteria:

Potential

What - It can be thought of as being based on strengths or talent but it’s always about optimizing unique attributes and/or abilities.

Potential Pitfalls - It’s normal to overestimate abilities. For example, most people feel they’re a better than average driver and a lot of them are wrong. It can also be difficult to understand. For example, while it might not be difficult to understand that someone with short legs isn’t going to be a great runner, it can be more difficult to figure who’s the most likely to succeed at winning Survivor.

How – It’s not only about working hard; you also need to find ways to get the prerequisite resources. You won’t win Gold at the Olympics without a good coach, the best equipment and facilities, and a lot of hard training.

Passion

What - You have not only to care but to really care. This is about providing motivation. Without it you have nothing.

Potential Pitfall – If you sacrifice what you care (really care) about “to make money” it simply won’t work as well than if you can find something that you really care about that can also make you money. And it’s not an easy thing. It takes a lot of work. You need to do a lot of self-reflection to discover treasure, and unfortunately, most people don’t know where to start, much less have the drive to see it through. And while most people think they “know thyself”, most don’t “know thyself” as well as they think. No one gets a perfect score on self-awareness.

And it saddens me when I see great people frustrated because they’re “comfortable” and afraid to change. You won’t find your “Sweet Spot” by being comfortable. It takes iterative, extensive exploration to figure it out.

How – Value identification exercises will help, as will peak experience reviews, or simply answering: What’s most important?

Opportunity

What - Where (as per Jim Collins) you understand (it’s all about the insight) the key factors that create revenue enough that you can articulate it as profit/x. And, this is so difficult that I’ve never come across anyone who could do it on the 1^st try and generally not on the 2^nd or 3^rd either.

Potential Pitfall – It’s elusive. We’d all love to come up with a great idea but it generally doesn’t work that way. Timing is everything. We’re all a product of our time and so are opportunities, but few have what it takes to capitalize on them at the optimum moment. So, when opportunity comes along, don’t hesitate or it might be too late. The trick, of course, is to recognize it. No one is all-seeing but certainly maintaining awareness is key.

How – Keep looking until you find one/it.

In my experience, finding a person or a business that’s in their sweet spot is a rare thing and yet I think it’s something every person and business should be striving for. Why wouldn’t you want to? It’s always about leveraging strengths and militating weaknesses. It’s just a lot harder than it sounds.

Twitter, Innovation and Product Life Cycles: It’s always about the Customer

It is not necessary to change.  Survival is not mandatory.  ~W. Edwards Deming

A perfection of means, and confusion of aims, seems to be our main problem. Albert Einstein

Twitter

I was at a TAB meeting when one of the participants asked me if I was on Twitter. When I replied “No”, her response was, “You have to. You’ll learn so much.” And so I signed up. My initial impression wasn’t great as I seemed to only be learning about weather anomalies. Thankfully, I figured out that it’s a matter of whom you follow so I “un-followed” the Weather Channel and started looking for credible business Twitterers. In the interest of full disclosure: I’m a neophyte given that savvy social networkers follow thousands of people while I find my current 126 like drinking from a fire hose. C’est la vie. Interestingly enough, my meeting companion proved correct in that I learned some things. Well, maybe re-learned would be a better way of putting it. Regardless, it got me thinking.

First, I discovered an interesting article on Social Media that suggested that social media isn’t about advertising. It’s about (wait for it) socializing. Really? Interesting concept, albeit not new. Lots of people have been suggesting for a while that the online rules of engagement shouldn’t differ significantly from face to face interactions. Still, it did seem somewhat novel given that I think many forget this simple common sense concept, even many of the apparently Twitter-wise. Pestering is annoying and when something is annoying we just want it to go away. And while some might get away with doing things like sending promotional e-mails without an unsubscribe feature typically it just demonstrates ignorance and hurts credibility.

Innovation

I also came across a link to a book that will be coming out soon about innovation. I won’t put in a plug for the author given I haven’t read it and to be truthful I’m not sure I’m going to. But his premise did intrigue me; that you need to innovate to stay viable in business. While this concept also isn’t new, it got me thinking. For example:

·         What’ job’ does your product or service ‘get hired’ to do?

The answer generally isn’t as obvious as you might think. For example, years ago I read, “The Innovator's Solution: Creating and Sustaining Successful Growth” by Clayton M. Christensen and Michael E. Raynor. There was one story that stood out for me: a quick-service restaurant chain wanted to increase their milkshake sales revenue.  When they asked their customers “What job are you hiring the milkshake to do?” they found out, to their surprise, that people were ‘hiring’ their milkshakes as a breakfast alternative when they had long commutes. The milkshake could be handled easily while driving and wasn’t as likely to be as messy or difficult as bagels or breakfast sandwiches. It could also be made to last which took some of the boredom out of the commute. The findings were significant: people would sacrifice healthier alternatives for convenience and still being able to make it to lunchtime without feeling uncomfortably hungry.

I’ve often wondered if this singular insight is what drove the plethora of Smoothies being introduced into the market: a logical innovation. Smoothies provide everything the milkshakes did but have the added benefit of being a healthier choice.

The factors that innovators need to take into account are:

·         An innovation is only worth pursuing if it is better at accomplishing the customer’s desired aim/job than existing alternatives.

·         Entrepreneurs/Businesses need to understand what those jobs are.

·         Sales and Marketing people are good at understanding customer’s needs. Engineers are not; they’re good at developing technical solutions. As Engineers are typically the innovators, they need to work with Sales/Marketing to understand what the customer wants.

To put this in perspective, Jim Collins (author of “Good to Great”) says that great companies have indicated that technology was way down the list on factors that contributed to their success. But it is important to note that this is not the same as being able to practically apply, or adapt, technology in a way that resonates with the customer. It may seem like a minor distinction but is consistent with ‘Guru’ Collins evangelizing “First Who, Then What” as being critically important.

Product Life Cycles

Which brings me to Product Life Cycles because it’s not something most entrepreneurs think about but they should.

·         Where is your business/product/service in its life cycle? Young? Old? On its deathbed?

Some businesses have much longer life cycles than others which are affected by many factors such as:

·         The current market

o   How do competitor’s offerings address getting customer’s ’jobs’ accomplished? Where are they in their life cycle? Are you in a different/unique space or fighting in a crowd?

o   What effect is the economy having?

·         Where is the market going or trending?

o   No one has a crystal ball but it doesn’t take a rocket scientist to understand that manufacturing is on the decline, as is printing. Printing is long in the tooth, technology- wise, and manufacturing is more economically viable in other parts of the world. You don’t want to be left trying to sell buggy whips when the market is moving on.

o   Will the economy improve, stay flat or worsen?

o   If not manufacturing, then what? Pundits believe that business offerings need to be creative. Hence consultative types of businesses are on the rise.

o   Are new competitors likely to emerge? How will their offering differ/address the job they’re being hired to do?

In summary, business owners need to figure out how to evolve. The only constant is change. Unfortunately, many business owners are way too bogged down in the current crisis of the day to focus beyond the here and now. They can’t see the forest for the trees. Too bad because it’s the ones who keep their focus on satisfying customer’s needs (help them to accomplish the jobs they’re trying to do) in the most effective way possible, that will have the best chance of long term survival.

Motivational Myths

“I have come to the conclusion that my subjective account of my motivation is largely mythical on almost all occasions. I don't know why I do things.”  J.B.S. Haldane

 “Classic economic theory, based as it is on an inadequate theory of human motivation, could be revolutionized by accepting the reality of higher human needs, including the impulse to self actualization and the love for the highest values.” Abraham Maslow

I recently read “Drive” by Daniel Pink. He suggests that some well accepted, long standing business practices are bad for motivation; effectively debunking a number of myths. His introduction includes a review of Edward Deci’s work who argues that: Rewards can deliver a short term boost…Just as a jolt of caffeine can keep you cranking for a few more hours. But the effect wears off… and worse, can reduce a person’s longer-term motivation to continue the project. Edward Deci further postulates: Human Beings have an inherent tendency to seek out novelty and challenges, to extend and exercise their capacities, to explore, and to learn.

Some of the myths debunked are:

Myth # 1: That big contingent individual bonuses, especially for short-term results, will increase employee performance.
From Drive: External rewards and punishments can work nicely for algorithmic[1] tasks. But they can be devastating for heuristic[2] ones because they interfere with people’s creativity.

Myth # 2: Goal setting will improve performance.

From Drive: Goals imposed by others – sales targets, quarterly returns, standardized test scores and so on…. can sometimes have dangerous side effects, including unethical behaviour. Goals that people set for themselves, and that are targeted at attaining mastery of their crafts, are usually better predictors of superior performance.

Myth # 3: Professionals (lawyers, accountants, etc.) should use billable hours for charging their clients.  
From Drive: Mechanisms such as the “billable hour” are “the most autonomy-crushing mechanism imaginable”. “Focus inevitably veers from the output of their work (solving a client’s problem) to its input (piling up as many hours as possible).

Myth # 4: All you need is talent.

From Drive: Grit[3] may be as essential as talent to high accomplishment.
 
Myth # 5: Good “Management” is critical.
From Drive:  If managing is about control then Pink suggests it is an out dated paradigm, and that providing autonomy produces better results. The acronym he uses in the book is ROWE: for results-only work environment. The closer you can get to it the better the results will be.

The Motivational ‘secret sauce’: Autonomy, Mastery and Purpose

Autonomous people working toward mastery perform at very high levels. But those who do so in the service of some greater objective can achieve even more.

The book “Drive” helps develop understanding of what motivates us which most Business Owners know they need help with and I believe is worth taking the time to read and understand.

You can also see a 10 minute YouTube video summarizing Drive’s key concepts by clicking on the following:

RSA Animate - Drive: The surprising truth about what motivates us

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[1] Algorithmic - a logical sequence of steps for solving a problem.

[2] Heuristic - arrived at by a process of trial and error rather than set rules.

[3] Grit - determination

Seven E-Mail Marketing Tips and a bit about Video

 

I had Geoffrey Claydon of Web Communications in to talk at a recent TAB Meeting about E-mail marketing. He uses all of the knowledge that he acquired in his extensive corporate experience to work with businesses of all sizes to improve the message that is communicated to their existing and future clients and customers. The points that stuck with me are:

1.       E-mail marketing must contain value for the recipient to prevent them from “unsubscribing”.

Value offerings can vary depending on the business (I offer business tips) but it can also be promotions, specials, discounts, new offerings, etc.

2.      Anything that engages prospects (for example, surveys) can really increase the “effectiveness”.

3.      Branding needs to be consistent and professional.

4.      Frequency should be at minimum once a month. This resulted in quite a debate; mainly because entrepreneurs are typically inconsistent when it comes to marketing approaches.

5.      Unsubscribing is permanent.

6.      Analytics are needed if you want to understand the “effectiveness” of your efforts.

7.      E-mail marketing can be an affordable and effective marketing alternative.

Of course the discussion included must-have content like links to websites which also opened the conversation up to video marketing. I became so inspired and convinced of video’s importance that I decided to make a video blog. After 20 some odd consecutive takes I finally decided I’d figured out how to produce reasonable sound quality and hoped the content would work. As I mentioned in the video, I’ve seen a lot of bad video: people just standing there, looking awkward; stilted dialogue; inappropriate backgrounds, etc. Interestingly enough, upon review of my video, I couldn’t control my hysterical laughter because I found it so funny, which, of course, didn’t bode well as far as professionalism goes. I wasn’t trying to produce a comedy. So, “Do It Yourself” webcams don’t work for me and I’m not ready to invest in professional productions at this point, although Geoff did pass on a good contact that I might investigate. Thankfully, I like the written word. It appeals to me in a way video doesn’t. I’d rather paint pictures in my mind then have them supplied for me.

Another lengthy discussion was whether unsubscribing is a “good thing”. General consensus is: it is. Knowing who “unsubscribed” tells you who isn’t interested so you don’t need to waste precious time and resources on them. Although, this isn’t always true. My example: I finally, and reluctantly, unsubscribed from Reed’s Flowers e-mail promotions. I use Reed’s primarily for condolences which are difficult to schedule and I’m not interested in things like Mother’s Day offerings (not applicable to me). To sum up, although their e-mail offerings didn’t contain value for me, I don’t think it’ll change how I do or will do business with them in the future. I trust them. They’ve never let me down where as other on-line flower deliver services have. Was that good money spent on their part? Not with me but it might be with others.

What works in marketing your business?

Seek First Clarity; to Find Meaning and Commitment

“The first step toward change is awareness. The second step is acceptance.” Nathaniel Branden

“The world is not a problem; the problem is your unawareness.” Bagwan Shree Rajneesh

"Your mind, while blessed with permanent memory, is cursed with lousy recall. Written goals provide clarity. By documenting your dreams, you must think about the process of achieving them." Gary Ryan Blair

Achieving Goals

There was a study done by Psychology professor Dr. Gail Matthews on Written Goals. She found that when people wrote their goals down, shared them and gave regular updates, people were (on average) 33 % more like to achieve them than those that merely formulated goals. It seems fairly obvious that they were more successful because they spent more time thinking about how to accomplish those goals but the act of sharing their progress was also important in that it affirmed their commitment. No one wants to “publicly” fail. It’s uncomfortable. We’ll take the time to fix a problem (reactive) but we rarely give ourselves permission to do it right the first time around (proactive). Stephen Covey’s (“7 Habits of Highly Effective People”) matrix of Urgent & Important is well known and yet I believe most people can’t bring themselves to move out of the urgent and of low importance quadrant and into the Important but not urgent quadrant. Why? It’s easier. When we lack clarity on how to best move forward we resort to being reactive.

Case in point: in “Switch” written by Chip & Dan Heath. They point out that a surprising thing they found out about change is that what often looks like resistance is simply a lack of clarity. Attaining clarity can be onerous and most people don’t know where to start much less be willing to give themselves permission to take the time.

Meaning

The question is: is formulating and achieving goals important? Yes. People are meaning-seeking and achieving goals is a way of fulfilling purpose.

“What also fuels their passion for work is a larger sense of purpose or passion. Given the opportunity, people gravitate to what gives them meaning, to what engages them to the fullest commitment, talent, energy, and skills.” – Daniel Goleman

Clarity

And where do most business owners lack clarity? Most would say marketing but I think, more importantly, many lack clarity about their business as a whole.

I understand that for most, Marketing is a seemingly impenetrable quagmire but Business Owners should keep in mind that it’s only part of the picture. Although, I will admit a big part; it’s not unusual that 1/3 to 1/2 of the price of a product or service is due to “marketing”.

Marketing Analytics are becoming more and more mainstream. Google Analytics are considered a must by many but Analytics for the small business should probably encompass a wider scope than just the internet. What’s most effective? Direct mail? E-mail? Telemarketing? You need to measure it to know. Measurement can be DIY; other methods could include hiring a school intern or one of the many marketing analytic companies.

Unfortunately, things change so effective marketing strategies are not the sort of thing you measure once and go “Yeah! I’ve found the magic formula”. You have to keep experimenting and testing to understand the impact. . For example, I was surprised when I learnt that Facebook Fan pages get a lot more hits than most company websites. Does that make it more effective? I suppose that depends on whether it results in more revenue.

Other interesting tidbits:

• I recently read Malcolm Gladwell’s book, “Tipping Point”, where he states that telemarketing’s effectiveness has decreased about 50% in the last 25 years. It should also be noted that’s why phone companies have been able to capitalize on offerings such as call display and call blocking.

• I keep coming across various forms of Multi-Level Marketing that are touted as the wave of future. Buyer beware: Multi-Level Marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a network of distributors and a hierarchy of multiple levels of compensation. Other terms for MLM include network marketing, pyramid selling, and referral marketing. Critics have complained that MLM-based businesses have few representatives that make much profit which may be due to the recruitment of the general population who have little or no business training or experience. But it may also be because most people do it as a supplement to their “real” job and the necessary focus and commitment is lacking. (Reference Wikipedia http://en.wikipedia.org/wiki/Multi-level_marketing)

Does that mean we should stop going to things like Pampered Chef parties? It’s unlikely we will because as Dr. Robert Cialdini mentions in his book “Influence”: “the attraction, the warmth, the security, and the obligation of friendship are brought to bear on the sales setting. The strength of that social bond is twice as likely to determine product purchase as is preference for the product itself.” Which, I suppose, is why companies do it but it begs the question of just how far you should go to get a sale. I’d suggest if you’re all about techniques and not about value that your focus is in the wrong place. It’s been repetitively and consistently reported that companies that focus on profits do not make as much as those that are passionate about, and focus on providing, value. This also seems fairly obvious and yet so many business people can’t get beyond the siren call of profit.

To be fair, profit is crucial in the context of survival. I believe Maslow’s “Hierarchy of Needs” applies almost as well to business (when viewed generically) as it does to the individual.

Commitment

At the end of the day, however, it’s all meaningless without commitment. There’s no moving forward or impetus for action without it. In Dr. Gail Matthew’s study, she includes weekly updates as being important and again this seems fairly obvious. This kind of accountability both forces and renews focus so you’re more likely to resolve challenges given that we all want to appear credible when we tell someone we’re going to do something. And especially if we’re reinforcing it with updates, it makes a significant difference. And if what we’re trying to accomplish has personal meaning, which also fosters commitment, then success is just that more likely again.

Thankfully this is a large part of the Value Proposition of The Alternative Board. It provides a forum to discover clarity, with respect to meaning, and fosters the commitment and accountability that Business Owner’s need to move forward and succeed.

7 Characteristics of Entrepreneurs

Many of the characteristics of entrepreneurs interrelate but the following are all worthy of note.

1. Perseverance

I have not failed. I've just found 10,000 ways that won't work - Thomas Edison, inventor and scientist

Entrepreneurs aren’t wired to give up. In fact, they so thrive on challenge that when they “succeed”; they generally don’t know what to do with themselves. Are they adrenaline junkies? Perhaps; but I think it more likely that entrepreneurs are more “committed” than most. I read an article that suggested that ongoing commitment is a lot more important than initial motivation. I think most people think commitment is a result of motivation; except you can be motivated one minute and then not so much in a relatively short period of time. Why is that? Doubt can erode even the strongest commitment. It’s important for an entrepreneur to be obstinate and confident and perhaps why so many people frequently see entrepreneurs as difficult to deal with. I remember one entrepreneur telling me that he doesn’t play well with others. To me that is the hallmark of a true entrepreneur; they can be downright willful about getting their own way.

How do you stay committed? You hold yourself accountable. It’s difficult to walk away if you see yourself as responsible even if you have doubts. You could also say that entrepreneurs are resilient and adaptable. Regardless, if you believe you’re responsible for making it happen then you do, even if you’re not very good at it ... yet.

In Chip & Dan Heath’s book, “Switch” they refer to a study that demonstrated that self control/willpower is an exhaustible resource and that what looks like laziness is actually often exhaustion. The “trick” is not to be forcing yourself. It’s only sustainable if you’re doing it because you want to.

Most people would articulate this as having a passion for what they do but what’s the difference between feeling committed versus passionate? According to Mihaly Csikszentmihalyi author of “Flow: The Psychology of Optimal Experience” the more we absorb ourselves in something, the greater our experience. Committed? Passionate? Ability to be in “Flow”? In the end, it probably doesn’t matter much. What matters is that people pursue the activity for the pleasure of it versus it being a means to an end. And what’s really interesting is that Csikzentmihalyi speculates that the difference is a matter of choice.

2. Clarity

In preparing for battle I have always found that plans are useless, but planning is indispensable - Dwight D. Eisenhower, U.S. President

People who understand the benefits of planning know that the important component is that 80% of the time needs to be in insight in order to implement a change. If you want to get “unstuck”, start planning. The fact that the plan frequently doesn’t get implemented as initially envisioned is not (IMHO) particularly important. Taking the time to work out a way to move forward is.

And it’s notable that at the root of all planning there is always a well defined purpose which needs to be consistent with a person’s values. Which comes first? I don’t it think it matters much as long as they’re in sync.

Also from Chip & Dan Heath's book, “Switch” they talk about what looks like resistance often being a lack of clarity. It works because clarity erases doubt and facilitates commitment.

Change does not necessarily assure progress, but progress implacably requires change. Education is essential to change, for education creates both new wants and the ability to satisfy them. - Henry Steele Commager

3. Confidence

Experience taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that you're generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you don't make - Donald Trump, real estate and entertainment mogul 

Entrepreneurs are independent which some might perceive as a desire to be in control. My personal belief is that it all goes hand-in-hand with being committed. Entrepreneurs have the confidence to stand alone. Where do they find this confidence? By doing. It’s amazing how confidence improves with practice.

4. Learning Mind Set

An entrepreneur tends to bite off a little more than he can chew hoping he'll quickly learn how to chew it - Roy Ash, co-founder of Litton Industries

Another way to say this is that entrepreneurs are “failure-tolerant”. They are not sidelined by the fact that what they tried didn’t work; in their minds it means they’re just that much closer to discovering what will.

5. Proactive

The critical ingredient is getting off your butt and doing something. It's as simple as that. A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow. Not next week. But today. The true entrepreneur is a doer, not a dreamer - Nolan Bushnell, founder of Atari and Chuck E. Cheese's

Entrepreneurs are energetic which again comes back to being committed. When you’re committed it’s amazing how you just want to get it done and before you know it, it is.

I think it’s important not to confuse any of this with being a work-alcoholic. Studies consistently show that productivity goes down after about 48 hours/week and if people get less than 8 hrs of sleep per night. Recently I read that productivity can be optimized (improved by 30-50%) by working in 20 minute segments that are separated by “mini” breaks to “recharge” the brain. I also saw another article that suggested the optimum working time is 90 minutes. The theme of working in segments is consistent even if the time is not. But it doesn’t mean time has to be structured into the classic 9:00 am – 5:00 pm model. Being committed means being both flexible and adaptable and doing what’s necessary to get the job done. If that means some strange hours the truly committed see that as no big deal.

6. Service Orientation

I never perfected an invention that I did not think about in terms of the service it might give others... I find out what the world needs, then I proceed to invent - Thomas Edison, inventor and scientist

People by nature are meaning seeking and entrepreneurs seek meaning in serving their market or customers. The importance of clarity of purpose can’t be understated as it facilitates the necessary sense of commitment.

7. Courage

Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover - Mark Twain, author

Many consider entrepreneurs to be risk takers but where does the courage to take those risks come from? I’d suggest both clarity of purpose and commitment. It provides the means to overcome and persevere in the face of fear.  

Life is either a great adventure or nothing. Helen Keller

In Summary

While entrepreneurs share the above characteristics, it is critical that they have a deep sense of purpose and commitment and taking the time to cultivate them is invaluable.

What are you doing to cultivate and clarify your business’ purpose?

The Importance of Identity in Business

“The value of identity of course is that so often with it comes purpose.” Richard R. Grant

"It matters not what a person is born, but who they choose to be." —J. K. Rowling

From Wikipedia; Brand - A brand is the identity of a specific product, service, or business

How does someone decide what business to be in? Or having decided what business to be in; what niche? I would suggest that before someone can decide what, they must first decide who they and their businesses are. “Who” is an essential prerequisite. For many, the question of “who” they are is done unconsciously but, as with everything else in life, the greater the clarity, the easier it is to move forward.

I recall one business owner telling how he had sold his business and subsequently discovered that the new owner didn’t treat his customers the way he thought they should be treated. He responded by starting a new, competitive business to provide a venue for the service he thought “his” customers deserved. He hadn’t anticipated that selling his business would create that problem or that he’d care as much as he did. But that’s the thing about values; they’re such a part of you that you generally take them for granted. Typically you don’t think about them but they drive your actions and especially if they’re violated. They’re a significant part of “who” and what makes up our identities.

Most consider our identities constant but the reality is they change over time. Initially we’re children and students, who graduate to adults and professionals; where our identity is largely defined by what we do and by the society we live in. Whether we are polite Canadians or astrophysicists, our identities change with time and circumstance.

As most personality assessments include “adaptive” styles; Dr. Robert Cialdini’s book: “Influence - The Psychology of Persuasion”, demonstrates this adaptability with the following example. People were asked to sign a petition to keep California beautiful. Subsequent to that, they and others that hadn’t been asked to sign the petition were asked to put up a large, obtrusive sign on their lawn with “Drive Carefully” printed on it. The result was that people were much more likely to agree to the sign after they had been asked the “identity” question of whether they’d sign the petition. The theory is that by asking the question, people identified themselves as being public-spirited and in support of that, were much more willing to do something they wouldn’t have done before. The conclusion is that by just asking an identity-clarifying question you can shift a person’s identity and actions.

Another compelling example is that people frequently become aware of “callings” at some point in their lives. It might be spiritual or professional but it marks a shift in how people think about themselves and it’s so prevalent that most of us know a number of people that have experienced it.

Interestingly, Dr. Philip Zimbardo notes that good people will do evil things because of their environment, such as abusive treatment by guards towards inmates or prisoners. He did an experiment with volunteer students where some were assigned as prisoners and others guards. He ended up terminating the experiment to avoid what he believed would result in inevitable physical violence. It was only an experiment and the participants knew it but it didn’t stop them from assuming the roles assigned to them and behaving in ways that they wouldn’t have otherwise entertained. I think this demonstrates just how transient identities can be and possibly why thespians can seem so believable.

This concept of changing the environment to change behaviour is also noted in Chip & Dan Heath’s book, “Switch” with Attila the Accountant who was a stickler for procedure and rejected any expense report that missed any detail. But when he spent some time at his clients Not For Profit businesses where they were severely overworked and understaffed he modified his behaviour dramatically. He became fanatical about getting them their money so they wouldn’t face any shortages or delays as he had a new understanding about just how tight their budgets were. This example raises the question: did he simply change his behaviour or did he change his values? I think you could argue that he “valued” the altruism inherent in his client’s business and changed his behaviours to support it. You could also argue that he came to value exactness less and expediency more but maybe they weren’t his “core” values” and hence why he was so willing to change.

I think we’re all a result of our circumstances and environment and when they change so do we. And while I think it’s important not to confuse behaviours with values (Jim Collins warns of this) I still feel values can and do change over time. Case in point, one day some one decides that the pursuit of power is no longer important to them, which for a lot of people coincides with retirement. In this instance, circumstance is powerful and leads to a profound change.

The irksome question is what role does choice play given the apparent high level of predictability of our reactions. I certainly like to believe choice is important. Still we’re limited by our strengths and aptitudes. Some will have an affinity for the physical which might foster being competitive as with a Tennis or Golf Pro while the more academically inclined may value learning more. So choice comes into it but it’s strongly influenced by personal strengths and circumstance.

So we’re adaptable but unfortunately, not always in a good way. But are businesses??? Pundits like Jim Collins say you need to preserve the core ideology (values & purpose) and change the rest. Between writing, “Built to Last” and “Good to Great” he changed his mind about the importance of Leadership, so perhaps, he’ll change his mind about the constancy of values. Jim Collins also suggests that you need to eject people like a virus, if they’re the wrong ones. And while I don’t believe he was very clear about what constitutes the “right” people, I think you could define it as the people that share the company’s values and have the aptitude to achieve the desired outcomes. A business’s values are shaped by its employees and if the employees change, so does the business’s values and culture. The question is: should an organization be shaped with intent from the beginning, i.e., should the criteria for hiring include values?

Jim Collins also asserts that a CEO’s core values should not be confused with the organizations core values. They’re different because the organization has a culture independent of any leader whether they like it or not.

Changing culture is understood by companies like IBM where they’ve made it a point to re-shape the company by bringing in new blood. It was a criterion for their survival. Now instead of being about “Business Machines” they’re about providing innovative business solutions. And maybe IBM will never again achieve their previous glory but you have to give them credit for re-inventing themselves.

When it comes to choosing people everyone wants the equivalent of Wayne Gretzky on their team but the reality is that superstars like Wayne pick and choose who they wish to be aligned with because they can, i.e., they qualify their employers based on their values. Hopefully, any fit works both ways but the chances of stacking the deck with all superstars is unlikely. And there’s really little point in hiring a Wayne Gretzky to play basketball so aptitude is clearly an important criterion relative to suiting the needs of the business. And it’s not all about aptitude - the systems in a business can make a huge difference. Whoever it was that came up with the McDonald’s “system” was obviously very talented (or lucky) but McDonald’s doesn’t need superstars to work in restaurants flipping burgers. In fact, it’d likely be counter productive. Although, I would say they need people that can interpret what people want and achieve a level of customer service that encourages people to want to do business with them. The bottom line is talent needs to be applied strategically, and where it matters.

Small business owners typically want to hire using networking because it provides some comfort around shared values and aptitude but it’s not particularly efficient. Obviously reaching out to a bigger pool is more likely to “net” better prospects but because most business owners aren’t great at qualifying people they avoid doing so. Hiring a HR professional to develop criteria for screening can help.

In the end you can be purposeful about the people and matching their values with the business’s or you can leave it up to chance. Which do you think will work better?

In summary:

• What people “value” will and can be changed
• Values shape culture. Culture shapes identity
• Aptitude influences identity
• Aptitude/talent should fit the business
• Aptitude/talent should be leveraged strategically
• Be purposeful about building the “right” organization

The Great Management by Numbers Debate - Putting Metrics in their Place

"You get what you measure. Measure the wrong thing and you get the wrong behaviors." - John H. Lingle

 "Perhaps what you measure is what you get. More likely, what you measure is all you’ll get. What you don’t (or can’t) measure is lost" - H. Thomas Johnson

 I think the above two quotes really sum up the “management by numbers” debate well in that metrics or Key Performance Indicators (KPI’s) will drive behaviour but not necessarily the ones you want or the ones that will help sustain your business.

Complexity

The way complex systems interact is often difficult to understand and can be the bane of business. When we don’t understand something we create hypotheses. And when those hypotheses prove to be correct it’s a wondrous thing. Where it gets tricky is when it can’t be or isn’t proven, and the varying opinions become the basis for non-productive conflict or delusion.

There are a couple of ways to react to this. One: You can accept that things are too complex to understand and give up. The problem with that approach is that it’s not productive. Two: You can try to make improvements and to understand what’s going on despite the complexity. I’m a big proponent of putting in effort to improve despite the fact that you may fail. You will at least have been proactive and the odds are, if you do it enough, you’ll at least improve and potentially succeed. The question I struggle with is how many times should you try and at what point should you give up? Obviously you’ll stop when your resources run out but is that the “best” time?

Metrics

I can think of lots of examples where metrics failed. Where specifications were set and met and yet there were problems. One case was a Tier 2 supplier who wanted to maximize their profits and really didn’t understand the application. Their cost cutting measure still met the specifications but not the intended purpose of use, resulting in premature failures. The resulting warranty costs definitely outweighed any cost savings not to mention the cost of damage to everyone’s reputation.

It’s possible that they didn’t care about potentially negative consequences but I seriously doubt it given how poorly it reflected on their competence and credibility. It also reflected badly on the OEM (Original Equipment Manufacturer) and Tier 1 supplier since it could be argued that the specification was inadequate.

There are ways to approach complexity to develop understanding but it’s helpful to put metrics into context first.

Key Performance Indicators (KPI’s)

Source Merriam Webster http://www.merriam-webster.com

• Key – 3 key adj Definition of KEY: important, fundamental
• Performance - noun 4b: the manner in which a mechanism performs
• Indicator – noun 1b: gauge. Example of INDICATOR: Economic indicators suggest that prices will go up.

In business, the term “Key Performance Indicator’s” provides a better context than “metrics”. Metrics shouldn’t be the-end all, be-all; they’re simply indicators of performance although they should be key ones. For example, as the dashboards in our vehicles demonstrate we need gas in order to drive but we don’t want to confuse the requirement for gas with the purpose of getting us to a destination. Fuel level is a key indicator for vehicle operation but it becomes irrelevant if we decide to use some other method of travel.

Driving Behaviour

Temple Grandin is a fascinating person and author. She’s autistic and has a Doctorate in Animal Science. She’s very passionate about the humane treatment of animals and has developed processes and methods to get cattle (and other animals) to calmly go to slaughter. Her challenge was on the human end; despite significant effort, slaughter house personnel kept relapsing back to old habits of using cattle prods, etc. Undaunted, in typical Temple style, she decided that if she could figure out how to get cattle to quietly go to slaughter, then she could figure out how to get humans to co-operate too. What she discovered was that auditing worked, i.e. when the desired behaviours were measured, they were maintained.

Similarly, providing bio-feedback can lead to amazing changes. Measuring also works effectively in other contexts too although you could certainly argue that it doesn’t always work given America’s struggle with obesity and obsession with weight loss. Clearly some things are harder to change than others. In the context of business however, we rely on metrics to drive quality improvements. Unfortunately, problems can arise in how we tend to think of “measure”. For example, I like the Hauser & Katz saying that, “Being vaguely right is better than being precisely wrong”.1 Their assertion is that measuring something precisely or easily isn’t as important as what you measure. What matters is that the measurement be pertinent. Things like culture, identity and emotion can have a big impact in business and yet it’s unlikely you’ll be able to precisely measure it, although, you might be able to differentiate between a supportive or non- supportive culture.

Other Considerations

I think it’s interesting that in Chip & Dan Heath’s book, “Switch” they don’t mention “metrics” as a change mechanism. Instead they talk about concepts like following the bright spots which I think of as leveraging benchmarks or figuring out how to apply what’s worked previously in new areas.

Their analogy reminded me of Six Sigma and Shainin techniques as the process is similar. Identify the issue, develop a hypothesis on the root cause, prove the root cause using paired comparisons, etc. Then develop strategies to repeat the desired outcome and minimize the variation. Notice that it takes time, analysis and perseverance. These types of improvements are responsible for the great quality we see in automotive vehicles these days but it’s not cheap and maybe that’s the rub. Understanding the complexity is difficult and resolving things that are difficult is typically expensive - but it can be done. Unfortunately, hiring a Six Sigma Engineer may be out reach of many small businesses but there are alternatives. (I recommend reading, “Switch”, to get some good ideas.)

Another thing to consider is that there are frequently conflicting perspectives; and it’s about striking an appropriate balance or finding the sweet spots. My favourite example is balancing between the cost of production and design optimization. It’s always nice to over-deliver but there’s little point in producing a Taj Mahal when a cottage will do, especially if you’re on a limited budget. Using targets to support an appropriate “balance” can help with understanding of what makes sense and can assist in providing context and perspective.

The Heath brothers also make the point that there are times when you don’t want to use measurement because people (being the lemmings we are) will follow the social proof or in their words: they’ll “follow the herd” or whatever the majority are doing. That is, you don’t want to show or reinforce what the majority are doing if it’s the wrong thing.

Metrics prove change. But what comes first: the chicken or egg? You can argue that the methods used to change behaviour can also be used to achieve the metrics. Regardless, you need to be working towards a purpose so if what you were doing isn’t working then you need to change and verify it achieved a positive outcome.

The bottom line? Don’t waste your time (and money) measuring something because it’s easy. Measure it because it supports the purpose of the business and remember, as is the case with vehicle dashboards: “metrics” (in this instance a fuel gauge) can have little to do with the purpose of getting to a destination and yet still be very useful in ensuring the “success” of the journey.

1 From: Metrics: You Are What You Measure! by John R. Hauser (MIT Prof) and Gerald M. Katz (Executive Vice President, Applied Marketing Science, Inc also went to MIT)

April 1998
http://www.mit.edu/~hauser/Papers/Hauser-Katz%20Measure%2004-98.pdf