Business Enhancement Associates Aha! Moments

What to do when you're stuck

2012-02-03T16:26:00.001-06:00

CBS News
(MoneyWatch)
February 2, 2012 7:41 AM

By Margaret Heffernan

Leaders always face difficult, apparently intransigent problems. You can look on the bright side and appreciate that this pain always represents learning. But the reality is that, all too often, getting stuck is frightening. Here are some ways to get un-stuck:

Stop working
The natural tendency, when up against a tough problem, is to keep working at it. And, up to a point, that's what you should and must do. But we all reach a moment of diminishing returns, where we are retracing the same old thought lines, beating our heads against the same brick walls. At those moments, it's crucial to stop. … To find new approaches means you have to do something new too.

Do something completely different
Codebreakers will tell you that often the best way to solve a problem is to look away from it. … Exercise brings a rush of oxygen into the brain which definitely helps. … Even the slightest physical movement can jolt you out of the mental rut in which you are stuck.

… Don't start something that takes time - that's displacement activity. Just choose a simple enough task that will shift your thinking while you do it.

Have a conversation (not a meeting)
Conversations about the area you're working in will force you to frame the subject, to define and articulate exactly what it is you are working on. The very act of articulating it may help you to see it differently or to define it for yourself more clearly. …

Ask for help
Don't expect a solution. … Instead, discussing a range of approaches may spark a chain reaction that eventually leads you to see the solution - or at least part of it….

Go to sleep
… I know so many people who have had great ideas in their sleep that now, if I'm working on something particularly intractable, I will deliberately think about it just before I doze off. I want my mind to work on it. Sometimes it does, sometimes it doesn't, of course. But even if I don't have a revelation, the next morning I'm alert and ready to try again.

Remember
Don't panic. Remember: You've been here before. … So don't forget that you already have those successes under your belt. You've confronted horrible obstacles before and cleared them. That means you're very likely to be able to do so this time. As long as you keep your nerve and keep going.

© 2012 CBS Interactive Inc.. All Rights Reserved.

Margaret Heffernan Margaret Heffernan has been CEO of five businesses in the United States and United Kingdom. A speaker and writer, her most recent book Willful Blindness was shortlisted for the Financial Times Best Business Book 2011. Visit her on www.MHeffernan.com.

8 Things Your Employees Need Most

2012-02-03T15:39:00.001-06:00

Forget about raises and better benefits. Those are important -- but this is what your staff really wants.

Inc.com
By Jeff Haden | @jeff_haden | Feb 2, 2012
iStock
Pay is important. But pay only goes so far.

Getting a raise is like buying a bigger house; soon, more becomes the new normal.

Higher wages won’t cause employees to automatically perform at a higher level. …

To truly care about your business, your employees need these eight things—and they need them from you:

1. Freedom. … Autonomy and latitude breed engagement and satisfaction. Latitude also breeds innovation. …

Whenever possible, give your employees the freedom to work the way they work best.

2. Targets. … Targets create a sense of purpose and add a little meaning to even the most repetitive tasks.

Without a goal to shoot for, work is just work. And work sucks.

3. Mission. …. Striving to be worthy of words like "best" or "largest" or "fastest" or "highest quality" provides a sense of purpose.

Let employees know what you want to achieve, for your business, for customers, and even your community. And if you can, let them create a few missions of their own.

Caring starts with knowing what to care about—and why.

4. Expectations. While every job should include some degree of latitude, every job needs basic expectations regarding the way specific situations should be handled. …

Few things are more stressful than not knowing what your boss expects from one minute to the next.

When standards change make sure you communicate those changes first. When you can't, explain why this particular situation is different, and why you made the decision you made.

5. Input. Everyone wants to offer suggestions and ideas. Deny employees the opportunity to make suggestions, or shoot their ideas down without consideration, and you create robots.

Robots don't care.

Make it easy for employees to offer suggestions. When an idea doesn't have merit, take the time to explain why. You can't implement every idea, but you can always make employees feel valued for their ideas.

6. Connection. Employees don’t want to work for a paycheck; they want to work with and for people.
A kind word, a short discussion about family, a brief check-in to see if they need anything... those individual moments are much more important than meetings or formal evaluations.

7. Consistency. … While you should treat each employee differently, you must treat each employee fairly. …

The key to maintaining consistency is to communicate. The more employees understand why a decision was made the less likely they are to assume favoritism or unfair treatment.

8. Future. Every job should have the potential to lead to something more, either within or outside your company….

Take the time to develop employees for jobs they someday hope to fill—even if those positions are outside your company. (How will you know what they hope to do? Try asking.)

Employees will care about your business when you care about them first.

Jeff Haden

Jeff Haden learned much of what he knows about business and technology as he worked his way up in the manufacturing industry. Everything else he picks up from ghostwriting books for some of the smartest leaders he knows in business.

5 Traits of Highly Successful Salesmen

2012-01-27T15:00:00.001-06:00

Are you cut out to make the sale? Make sure you've got these characteristics--or else learn to develop them.

Inc.com
By Geoffrey James | @Sales_Source | Jan 27, 2012

… Buyers and sellers are emotional human beings, which is why great salespeople are always masters at managing their own emotions. Based upon my observation (and some pretty hefty research in emotional intelligence), highly successful salespeople cultivate the following five emotional traits:

1. Assertiveness
This allows you to move a sales situation forward without offending or frustrating the customer. … For example, suppose a customer is delaying a decision. There are at least three basic responses:

Passive: "Could you give me a call when you've made a decision?"
Aggressive: "If you don't buy right now, the offer is off the table."
Assertive: "Can you give me a specific time and date when you'll make your final decision?"

The passive response puts the sale on hold indefinitely (or give your competitor the opening to outsell you). The aggressive response creates pressure and resentment: … The assertive approach sets up the specific conditions for the close, without forcing the customer's pace.

Image via Wikipedia

2. Self-Awareness
You need to be able to identify your own emotions, understand how they work, and then use them to help you build stronger customer relationships. This is a four-step process:

Identify the emotions that you're feeling,
Based on experience, predict how those emotions will affect your sales effort.
Compensate for negative emotions that might hinder the sale.
Expand your positive emotions that might help you make the sale.

For example, suppose you feel furious that an important customer stood you up. You might take a break before your next meeting in order to remind yourself of all the times you've succeeded in the face of challenges. Or you might, as an ice-breaker, tell your second customer that you're having a tough day and why.

3. Empathy
This entails adapting your behavior to the customer's moods and emotions. … You must be able to feel what the customer is likely to be feeling.

Suppose, during a sales call, you discover that the customer's firm just announced major layoffs. …

… [If] you want to build a better relationship, you'll be empathetic and imagine your contact's sense of fear and confusion. Then, depending on your emotional reading of the customer, decide whether the customer would prefer to commiserate, complain or (alternatively) be distracted from the situation.

Image via Wikipedia

4. Problem Solving
The desire to solve a problem helps you create new ways to satisfy the customer's needs, both financial (the ROI of your offering) and emotional–such as the customer's need to be convinced that your and your firm are reputable and reliable. Problem solving is a four step process:

See the customer situation as it really is. (Never try to solve a problem before you fully understand it.)
Help the customer visualize a more desirable situation.
Devise a way to move the customer from the ways things are today to the way the customer would like them to be.
Communicate that solution in a way that makes it easy for the customer to make a decision.

While those steps might seem obvious, they're the exact opposite of old-school salesmanship, where selling entails "giving a great sales pitch."

5. Optimism
Optimism helps you maintain a sense of balance when things go awry. … For example, if the first sales call of the day goes poorly, your performance for the rest of the day will be different if you have this rule...

A bad first call means that I'm off my game this will be a bad day.
... rather than this rule:
Every sales call is different, so the next will probably be better.

… [If] you automatically jump to the first rule, rather than the second, it will be difficult for you to remain happy.

This principle works on bigger events, too. I've run into about a dozen top salespeople who saw the weak economy as an opportunity to sell even more,and did so, while their colleagues were busy hand-wringing. …

This column is based on an interview with Robert Scher, president of the Scher Group, a sales performance improvement firm. (He used the term "happiness" for what I call "optimism," but it comes out to the same thing in the end.)

Geoffrey James

Geoffrey James is an award-winning journalist and author of Inc.com's Sales Source column. Previously, he wrote Sales Machine, the world's most-visited sales-oriented blog. James has written hundreds of articles on sales and marketing for publications like Technology Marketing and SellingPower, and has helped thousands of sales professionals communicate more effectively with customers. To get column updates, sign up for his weekly "insider" newsletter or his @Sales_Source Twitter feed. James' newly published book is How to Say It: Business to Business Selling.

Networking For Introverts

2012-01-27T14:03:00.001-06:00

Forbes

9/01/2010 @ 5:11PM
Meghan Casserly, Forbes Staff

“Networking is excruciating,” says Jessica Klein, who works in rare books in Manhattan where, according event listing hub EventMe.com there are hundreds if not thousands of public and private events daily.
Klein admits: “Actually, I don’t even really ‘network. It’s more like standing around awkwardly while sipping drinks. I make phone calls to avoid talking to people. And concentrate very hard at drinking so no one bothers me.”

... Klein and thousands of others, … struggle with networking.

“In many cases it’s been defined as something negative,” says Devora Zack, author of the new book Networking For People Who Hate Networking. “Some people see it as a means to manipulate people or just an exercise in self-promotion, and these notions can definitely leave a bad taste in a person’s mouth,” she says.

But a better definition of networking, offered by Zack, is building “mutually beneficial” connections one person at a time. …

With the new framework for networking in place, Zack sets out a master plan for “introverts, the overwhelmed and the underconnected” for networking success, one social event at a time.

Here’s How:

Plan Ahead
Setting a goal for networking at an event is a great starting point for preparing yourself to succeed. Your goal can be as simple as, “I’m going to have a great time,” or as concrete as, “I’m going to walk away with three new business cards and follow up with them the next day.”

Prepare yourself to meet your goals by coming armed with questions for new acquaintances, answers you feel comfortable speaking about and tactics to help you feel as relaxed and social as possible.
Stagger your networking events throughout the month. “Don’t feel like to be a good networker you have to go to every event you hear about,” says Zack. …

Most people, she says, will crash and burn on an overwhelming schedule of events. To be responsible and effective networker, choose two to three events a month that you feel position you for success.
In choosing networking opportunities, Zack says the best strategy for success is picking events that you are inherently interested in and not necessary career-related….

Image via Wikipedia

Zack’s point is this: if you go to an event strictly to network, you might dread it and feel as if you’ve failed if you don’t walk away with a dozen new connections. But if you go to a seminar you’re interested in, you will not only be excited to go, but you will have gained something even if you leave with a single business card. An added bonus in choosing an event that interests you? Built-in talking points.

No matter what event you choose, make sure to register in advance. “You’re much more likely to bail if you don’t pre-register,” says Zack, who knows from first-hand experience how easy it is to backpedal out of events at the last minute. “…[When] you arrive you will find a printed nametag …, which makes you look good,” she says, “a lot better than stragglers who are scribbling their names down with a Sharpie.”

Work the Room
… [Another] early pointer from Zack is to never, ever arrive late. “It’s really the worst mistake you can make,” she says. “You get there and everyone’s already talking to each other, or talking in groups. … If you get there late, there’s a lot of noise, a lot of action, and worst of all you’ve got nowhere to go.”

Zack advises to make a rule of arriving within the first fifteen minutes of an event, when the mood is low-key and the number of attendees manageable. …

Once the pace of the event has picked up, use Zack’s top tactic for identifying people to talk to …. “I always tell people to get in a line,” she says, “which seems counterintuitive, but think about it: when you’re in line, you have two built in people to talk to. ...” Not only that, but again, there is a built-in talking point to make conversation easy.”

… [In] terms of promotion, Zack says that no one should feel pressured to come armed with an “elevator speech” to pitch themselves about the room. “But be prepared to ask questions, and prepare for them in return. …”

Take a Breather
… “Even within the context of an event, make sure to take a few pauses to simply not be talking to people,” [Zack] says.

One of the best ways to create “downtime” is to pause after each new acquaintance, step away and jot a few notes about them on the back of their card. … Other ways to take a breather include stepping out of the main room, checking your voicemail, “or pretending to check your voicemail!” says Zack, but it’s critical to take that time.

Check Out
Knowing how to best end a conversation within the context of a networking event is important, because you always want to end it before it fizzles out and you’re left with nothing to say. Zack offers two fail-proof exit strategies: “One of my favorites is ‘I promised I’d circulate the room, but it’s been great meeting you. Do you have a card?’ and the other is ‘I’m sure you want to meet other people, so I’ll let you go. Do you have a card?

The bottom line is that people are at events to meet people. Acknowledge it while the conversation is still upbeat and then move on. And don’t forget to smile.

Follow Up
Zack can’t stress this point enough: If you don’t follow up with people you meet at networking events, there was no point in going. … Follow up, and follow up quickly. Zack suggests the next day if it’s just a casual connection.

But if you’re looking for a favor, aim for the Friday following the event. “People are far more responsive and receptive and willing to say yes to things on a Friday,” says Zack. And if you really want to make a stellar impression with a follow up, go with a hand-written note. “They’re an endangered species, and they take three minutes. Consider them the supertool of networkers.”

Meghan Casserly
I cover the juggle of work, life and play for smart, ambitious women.

10 dumb mistakes companies make over and over - CBS News

2012-01-25T16:46:00.001-06:00

CBS News

By Steve Tobak

"Not again!" (Photo courtesy Flickr user Alex E. Proimos)

(MoneyWatch) COMMENTARY These days I'm constantly bombarded with books and articles about why leaders, executives and companies fail. … Most of the "sage" advice is pretty weak, running the gamut from the absurdly obvious to the obviously absurd.

One article by author and psychologist Jack Stark lists the top five reasons leaders fail as greed, insecurity, power, arrogance and narcissism. Can't say I disagree, but I seriously doubt if any of the CEOs I know will be running to a shrink anytime soon. Maybe they should.

Mark Stevens, author of "Your Marketing Sucks," says companies fail because of "lack of leadership." Well, thank you Captain Obvious. To be fair, he also lists "complacency" and "conventional thinking," which I do agree with.

Why leaders need a good shrink, not a coach 10 reasons why smart people do dumb things

… Here are my top 10, along with some recent and notable examples:

Image via Wikipedia

Killing promising new businesses to maintain old ones. Kodak (EK) just filed for Chapter 11 bankruptcy protection after years of mismanagement and playing catch-up in digital photography. Ironically, Kodak invented the digital still camera in 1975 and then sat on it for a quarter of a century … . When will companies learn that if you don't cannibalize your own business, competitors will do it for you?

Image via CrunchBase

Lack of objectivity and perspective. Probably the most common mistake executives make is being too self-contained … . They stop asking questions like, "How are we doing," and when a daring customer or employee tries to provide some feedback, they ignore it. As failure modes go, this one even takes down big companies like BlackBerry maker Research in Motion (RIMM), for example.

Image via CrunchBase

Failure to articulate the company's strategy. … [There] are large, public companies with CEOs who cannot tell you what the company's unique vision and value proposition are. As one VP said of Scott Thompson, the new CEO of Yahoo (YHOO), "Maybe he can let us all finally know what Yahoo is." …

Chronically bleeding red ink. Over the years, I've watched dozens of once prominent companies continue to lose money, quarter after quarter, year after year, until they're either acquired for peanuts or they file for bankruptcy protection. …

Not challenging the status quo. Many famous leaders have said it a lot of different ways, but it always comes down to the same message: when you stop challenging the status quo, you're dead. Few companies are great at constantly reinventing themselves … But the ones that resist change and try to hold onto what they were are lost.

Image via CrunchBase

Poor risk management. The flipside of taking no risks … is unnecessarily betting the company on huge mega risks or jumping from one strategy to another hoping that one will actually stick. An example of the latter is the current incarnation of AOL (AOL). An example of the former is the old AOL's merger with Time Warner (TWX). …

Image via Wikipedia

Ignoring hot new trends. Resting on your laurels, ignoring viral trends and failing to innovate turns market leaders into dinosaurs in record time. [There’s] Nokia (NOK), Yahoo, and for some historical perspective, big iron computer companies like Digital Equipment Corp. whose CEO couldn't understand why anyone would ever want to own a computer.

Dumb customer service policies. … [Some] companies have systemic issues with bad policies and procedures. The reason, I think, is the inherent conflict between the customer's satisfaction and the company's customer service expense and efficiency. Still, that's no excuse for customer service nightmares we all experience, like these.

Harassing customers. We all get spam in our inboxes, but most annoying is the spam you can't get rid of no matter how many times you unsubscribe. Don't these companies know better? … Take it from me: persistence is fine, but harassment has the opposite effect.

The Peter Principle. Last but certainly not least is the gold standard of executive failure, the Peter Principle. Incompetence that breeds more and more incompetence, … is the perennial gift of business mediocrity that never stops giving.

Why Appreciation Matters So Much

2012-01-23T16:53:00.001-06:00

Image via Wikipedia

Harvard Business Review

9:44 AM Monday January 23, 2012

Tony Schwartz

Image by glsims99 via Flickr

… Whatever else each of us derives from our work, there may be nothing more precious than the feeling that we truly matter — that we contribute unique value to the whole, and that we're recognized for it.
The single highest driver of engagement, according to a worldwide study conducted by Towers Watson, is whether or not workers feel their managers are genuinely interested in their wellbeing. Less than 40 percent of workers felt so engaged.

Feeling genuinely appreciated lifts people up. At the most basic level, it makes us feel safe, which is what frees us to do our best work. … When our value feels at risk, as it so often does, that worry becomes preoccupying, which drains and diverts our energy from creating value.

So why is it that openly praising or expressing appreciation to other people at work can so easily seem awkward, contrived, mawkish and even disingenuous?

The obvious answer is that we're not fluent in the language of positive emotions in the workplace. … Heartfelt appreciation is a muscle we've not spent much time building, or felt encouraged to build.

Image via Wikipedia

Oddly, we're often more experienced at expressing negative emotions — reactively and defensively, and often without recognizing their corrosive impact on others until much later, if we do at all.
That's unfortunate. The impact of negative emotions — and more specifically the feeling of being devalued — is incredibly toxic. As Daniel Goleman has written, "Threats to our standing in the eyes of others are almost as powerful as those to our very survival."

In one well-known study, workers who felt unfairly criticized by a boss or felt they had a boss who didn't listen to their concerns had a 30 percent higher rate of coronary disease than those who felt treated fairly and with care.

In the workplace itself, researcher Marcial Losada has found that among high-performing teams, the expression of positive feedback outweighs that of negative feedback by a ratio of 5.6 to 1. By contrast, low-performing teams have a ratio of .36 to 1.

So what are the practical steps you can take, especially as a manager, to use appreciation in the service of building a higher-performing (and more sustainable) team?

1.

Image via Wikipedia

As the Hippocratic oath prescribes to physicians, "Above all else, do no harm." … The costs of devaluing others are so great that we need to spend far more time thinking than we do now about how to hold people's value, even in situations where they've fallen short and our goal is get them to change their behavior for the better.

2. Practice appreciation by starting with yourself. If you have difficulty openly appreciating others, it's likely you also find it difficult to appreciate yourself. Take a few moments at the end of the day to ask yourself this simple question: "What can I rightly feel proud of today?" …

3. Make it a priority to notice what others are doing right. The more you work at it, the better you'll get at it, and the more natural it will become for you. For example, start by thinking about what positive qualities, behaviors and contributions you currently take for granted among the members of your team. Then ask yourself, what is it that each of them uniquely brings to the table?

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4. Be appreciative. The more specific you can be about what you value … the more positive your impact on that person is likely to be. A handwritten note makes a bigger impression than an email or a passing comment, but better any one of them than nothing at all.

We're all more vulnerable and needy than we like to imagine. Authentically appreciating others will make you feel better about yourself, and it will also increase the likelihood they'll invest more in their work, and in you. The human instinct for reciprocity runs deep.

Tony Schwartz is the president and CEO of The Energy Project and the author of Be Excellent at Anything. Become a fan of The Energy Project on Facebook and connect with Tony at Twitter.com/TonySchwartz and Twitter.com/Energy_Project.

Taking a longer-term look at M&A value creation

2012-01-23T15:41:00.001-06:00

Companies that do many small deals can outperform their peers—if they have the right skills. But they need more than skill to succeed in large deals.

McKinsey Quarterly - Corporate Finance - M&A
JANUARY 2012 • Werner Rehm, Robert Uhlaner, and Andy West

Image via Wikipedia

Measuring the value that mergers and acquisitions create is an inexact science. Typical analyses compare share prices before and after a deal is announced, using short-term investor reactions to indicate how much value it would be likely to create. One benefit of this approach is that it provides a measure of expected value unaffected by other variables, such as subsequent acquisitions or changes in leadership.

Yet relying on market reactions to gauge value creation has drawbacks. It skews the results to larger deals, which have the heft to affect share prices, and underrepresents smaller ones—even though they account for a majority of M&A. It can also underestimate the amount of value created by multideal strategies whose real worth develops over the longer term. …

To address those shortcomings, we analyzed the excess shareholder returns¹ of the world’s top 1,000 nonbanking companies, which completed more than 15,000 deals over the past decade. … When we segmented companies by the scope of their M&A programs (Exhibit 1), we found that long-term returns vary significantly by deal pattern and by industry. The implication is that across most industries, companies with the right capabilities can succeed with a pattern of smaller deals, but in large deals industry structure plays as much of a role in success as the capabilities of a company and its leadership.

Exhibit 1: The excess shareholder returns of the world’s top 1,000 nonbanking companies reveal distinct patterns of deal making.

Long-term returns to M&A

Because we look at excess returns over a full decade, we’re better able to correlate longer-term strategies with shareholder returns and company survival rates. The data confirm that the larger companies get, the more they rely on M&A to grow: 75 percent of those that remained in the top 500 used active M&A programs, including 91 percent of those that stayed in the top 100 (Exhibit 2). A majority of these companies complete many smaller deals, with no large ones.² … A correlation of the identified patterns of M&A with long-term excess returns shows that the only companies that had, on average, negative excess returns were those that did large deals (Exhibit 3). …

Exhibit 2: The larger companies get, the more they use M&A to grow.

Exhibit 3: Companies using a programmatic strategy are the most successful.

Companies using any of the other approaches to M&A showed positive excess TRS relative to global industry indices. Those with a more programmatic pattern of M&A (defined as many small deals that over time represented 19 percent or more³ of the acquirer’s market capitalization) on average performed better than companies relying on organic growth. They also had a higher probability of positive excess returns.⁴ Finally, the data suggest that a growth strategy built around a series of small deals can actually be less risky than avoiding M&A altogether. Organic strategies showed the greatest variability in excess TRS between top performers and companies in the lowest quartile, while programmatic and tactical M&A had the smallest range.

The importance of industry specifics

As compelling as these global averages might be, they do not answer the question of whether an individual company in a specific industry at a given time should engage in M&A. … As our previous analysis showed, returns by M&A approach are widely distributed and can obscure individual results.⁵ Consider the data on an industry-by-industry basis (Exhibit 4). The results vary widely but patterns do emerge.

Exhibit 4: Returns by M&A approach are widely distributed and can obscure individual results, but they roughly indicate the top strategies by industry.

Large deals. Companies are more successful with large acquisitions—those worth more than 30 percent of the acquirer’s market capitalization—in slower-growing, mature industries. Here, there is great value in reducing excess industry capacity and improving performance, and a lengthy integration effort is less disruptive.

In contrast, large deals in faster-growing sectors⁶ have been less successful, with –12 percent excess TRS in the five years after such deals, significantly lower than the 4 percent excess TRS for companies in slower-growing industries over a similar period. Why did companies in faster-growing sectors underperform? Many focused inwardly during the lengthy integration required for large deals, missing critical product or upgrade cycles. Others attempted to expand into complementary businesses, where targets had limited overlap in products and technology. In addition, over the period we reviewed, we found that these companies tended to do large deals in years when market valuations were generally high. Tech companies, for example, have fallen into all three of these traps.

Of course, the success of large deals also depends on a company’s strengths and its leadership’s ability to guide it through a year or more of integrating a large acquisition, as well as other factors idiosyncratic to specific deals.⁷

Programmatic deals. Companies across a variety of industries do well using the programmatic approach. … Companies using the strategy completed many acquisitions that together represented a material level of investment as a percentage of market cap.⁸ In addition, we found a volume effect—the more deals a company did, the higher the probability it would earn excess returns.⁹

Evidence shows that executing a high-volume deal program requires certain corporate capabilities but not necessarily a specific industry structure. … For example, IBM’s program of acquiring smaller software firms succeeded because the company could offer acquired businesses access to global markets, which they had lacked. …

… In some cases, big companies are also looking to find new growth opportunities. In the late 1990s, German industrial conglomerate BASF, for example, determined that it could grow more quickly and profitably if it shifted its focus to specialty chemicals—an area in which managers believed they could create value through their technical skills and understanding of customer needs. The company then shed its commodity chemical operations and acquired specialty companies and businesses, which it quickly integrated.

In another series of deals, The Walt Disney Company acquired brands such as Baby Einstein and the Muppets, lending the power of Disney’s global profile to expand their market and reach. Acquisitions of Club Penguin and Marvel Entertainment were similar: the former gave Disney a product in a new distribution channel; the latter allowed it to pick up content that’s popular with teenage males—a relatively tough demographic for the company.

Tactical deals. Companies using a tactical approach to M&A also do numerous small deals, but those deals do not, combined, make up a large portion of the acquirer’s market capitalization. … Tech companies were significantly more successful with this approach than with the others: they used M&A as part of an innovation and capability-building strategy, buying options and adding functions.

Microsoft, for example, has a history of adding features to its core products through M&A to give users incentives to upgrade. Many smaller products acquired by the company found their way to the next release of Excel, and the upgrade cycle provides continued revenue for the franchise. Manufacturer Foxconn Electronics executed more than 20 small strategic and equity outsourcing deals over the decade. Some were intended to expand its capabilities from PC assembly into digital cameras, handsets, and networking equipment, to name a few things. Others eased the company’s vertical integration into components, with the goal of serving end customers better and thus helping the acquired businesses to grow.

Industrial companies in this segment seem to use tactical M&A to fill gaps in products or channels. … Caterpillar, for instance, used M&A to round up its product portfolio by purchasing companies that made diesel engines, railroad and mining equipment, and specialized repair gear. …

Selective deal making. Many companies do deals occasionally but don’t appear to have an M&A capability or a proactive M&A strategy. Most of the companies in this segment spend less than 2 percent of their market cap a year on M&A. Their total shareholder returns are in all likelihood driven more by an organic-growth tailwind than by M&A strategy. The rest of the companies in the segment are individual cases, many stemming from unlucky one-off deals at the end of the 2001 tech bubble. It is therefore hard to conclude that the performance of this group is based on a clear M&A strategy. More likely, these were solid companies that engaged in occasional pragmatic deals to support the growth of the underlying business.
It’s possible to understand M&A performance better by taking a finer-grained look at patterns of deal activity. The success of large deals tends to depend more on the industry where they take place, the success of small ones more on the capabilities of the acquiring companies.

About the Authors

Werner Rehm is a senior expert in McKinsey’s New York office; Robert Uhlaner is a director in the San Francisco office; and Andy West is a principal in the Boston office.

The authors would like to thank Theresa Lorriman for her significant contribution to the research.

Notes

¹ We measure excess TRS by assigning companies to subsectors and tracking the difference between a company’s TRS and an index that follows the sector. In this analysis, we used 11-year excess TRS to avoid some of the issues resulting from the collapse of the high-tech bubble in the early 2000s.
² Defined as a target acquired for at least 30 percent of acquiring company’s market value in the year the deal closed.
³ Among companies completing only small deals, we used the aggregated median acquired market capitalization, or 19 percent, as the cutoff between those with significant M&A programs (programmatic acquirers) and those that acquire small deals opportunistically (tactical acquirers).
⁴ However, the confidence intervals for average returns are overlapping.
⁵ Andres Cottin, Werner Rehm, and Robert Uhlaner, “Growing through deals: A reality check,” mckinseyquarterly.com, April 2011.
⁶ Defined as average annual growth above 7 percent. This data set included 82 deals worth more than 30 percent of the acquirers’ market cap.
⁷ See, for example, Ankur Angrawal, Cristina Ferrer, and Andy West, “When big acquisitions pay off,” mckinseyquarterly.com, May 2011.
⁸ A median of 36 percent of market cap acquired with 33 deals over the time frame.
⁹ As with the other analyses, this is a correlation, not necessarily a causative relationship. Although we feel confident that the deal strategy contributed to the outperformance, it is possible that better-performing companies executed more deals in the wake of their success.

The Surprising Benefits of Solitude

2012-01-20T10:57:00.001-06:00

Harvard Business Review

2:47 PM Thursday January 19, 2012

Andrew McAfee

Some recent reading crystallized two hypotheses that have been rattling around in my head for a while now:

Digital crowds work better than real-world ones For some things, nothing works except solitude

These formed after reading a great article by Susan Cain in the New York Times called "The Rise of the New Groupthink." The column is a preview of her new book Quiet: The Power of Introverts in a World that Can't Stop Talking …

The book summarizes a lot of research about what actually happens when people work together in groups, and most of it ain't pretty. As Cain writes,

...decades of research show that individuals almost always perform better than groups in both quality and quantity, and group performance gets worse as group size increases. The "evidence from science suggests that business people must be insane to use brainstorming groups," wrote the organizational psychologist Adrian Furnham...

The reasons brainstorming fails are instructive for other forms of group work, too. People in groups tend to sit back and let others do the work; they instinctively mimic others' opinions and lose sight of their own; and, often succumb to peer pressure

So it seems like we need to add brainstorming sessions to the scrap heap of plausible business techniques that actually don't work that well, along with focus groups and job interviews. …

There is one large exception to this rule: groups that come together digitally, rather than in the real world, are often very creative, innovative, and productive. … According to Cain:

The protection of the screen mitigates many problems of group work. This is why the Internet

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has yielded such wondrous collective creations. Marcel Proust called reading a "miracle of communication in the midst of solitude," and that's what the Internet is, too. It's a place where we can be alone together -- and this is precisely what gives it power.

I love this idea, … because it provides a great counterargument to all the hand-wringing about the Net's isolating and society-corroding tendencies. Alone together has until now been a lament; it should also be a celebration.

The second hypothesis is that as powerful as the Net can be for generating and improving ideas, those of us who think for a living still need to be alone a lot to get good thinking done.

… It's usually a blast to digitally swap ideas; tweet, update, share, comment, 'like,' and multitask with multi-people. It's usually a drag to take yourself away from all that, sit down, disconnect, and start writing, sketching, coding, diagramming - in short, to start thinking.

If and when you get into a flow, solitary work becomes fantastic. But it rarely starts that way. It proceeds the way my marathoner friends tell me their winter training runs go: with a lot of initial discomfort and why-am-I-doing-this? followed eventually by enjoyment and accomplishment.

Getting over that initial hump is hard. And people might stop trying if they start believing that digitally facilitated ensemble work suffices. … It's absolutely necessary, but it's not enough when genuine novelty is the goal. We - YOU - also need to spend some time alone, just thinking. The poet Charles Bukowski got it

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right: "Isolation is the gift."

Andrew McAfee is principal research scientist at the Center for Digital Business in the

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MIT Sloan School of Management. He is the author of Enterprise 2.0 and the co-author, with Erik Brynjolfsson, of Race Against The Machine.

Five Painless Ways to Raise Prices this Year

2012-01-19T15:15:00.001-06:00

| Blog | Daily Dose | Entrepreneur.com

BY Carol Tice| 23 hours ago|

It may sound odd, but small businesses are increasingly handing out pay raises. …

Apparently, the pay-raise trend is pretty widespread. A Pepperdine University/Dun & Bradstreet Credibility Corp. study showed 43 percent of small businesses have already hiked worker pay in the past year, and 42 percent said they plan to raise pay this year. …

This may be a critical time to raise prices for many businesses in any case, as prices are rising or remaining high for many basic materials.

With the economy still so uncooperative, how can you sell customers on a price hike? Here are five ideas:

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Phase it in. Let customers know prices are going up next month, or next quarter. … Give clients a chance to buy in volume ahead of time to save money. It feels like a deal, but, sooner or later, customers still end up paying the new price. …
Related: More Small Businesses Plan to Push Up Prices in 2012
Offer valued-customer discounts. Take a page from grocery stores and offer one price for your loyal frequent shoppers, and a higher one for occasional users. That way you can start grossing more without alienating your core customer base. Don't make those customers haul around a loyalty card, either -- keep the information on who gets the good prices on file yourself.
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Revamp or repackage old products or services. Add new features, bundle existing products to create a new one or redesign your packaging. Freshen it up, and you've added value -- or at least created the appearance of added value -- and can command a better price for it.
Introduce new products. … What can you sell that your competitors don't? Add fresh items that can't be easily price compared and you can charge a better markup on them.
Related: Four Rules for Pricing Products
Review and retool your product assortment. Do you know which of your products has the lowest margins, and which has the highest? … Then drop slower-moving, low-net products and add more high-end ones. Also review competitors' pricing to see whether some products are priced unnecessarily low. Small, strategic increases on a few popular items can add up quickly, while customers may barely notice the difference.

Want to Become Known as an Industry Expert? 3 Tips to Get You Started

2012-01-19T14:47:00.001-06:00

Forbes

1/18/2012 @ 1:33PM

Cari Sommer, Contributor

…For those of you who’ve decided that this is the year to up your visibility, you may be asking yourself “how?’’ How will you become known as the one to go to for relevant press stories, speaking events or other high profile events? How will you make yourself and your brand stand out in your space?

It starts with building your reputation as an expert. You may be thinking, “Well that’s easy, I AM an expert.” … It’s great that you feel confident about your knowledge base, but now your focus should turn to getting others to see you in the same light.

Here are a few tips for doing so.

Call yourself an expert. … We fear that others will perceive us as bragging or that there’s some magical threshold we must pass before we can TRULY be considered an expert. Wrong! If you feel confident enough to put your name out there and speak about a particular market segment or industry, feel confident enough to tell people that you’re doing so. Be on the lookout for opportunities to contribute to conversations—whether through social media or relevant industry groups. You can also start to build relationships with a targeted group of bloggers or journalists by letting them know your specific areas of expertise and your willingness to chime in if and when they need a specific quote, facts or data.
Share Generously. … As you have interesting industry news to share—whether it’s about a particular trend you’re seeing or up-to-the-minute data you’ve gathered, let people know about it. Blog about it, email industry influencers about it—maybe even think about putting together a press release. Sometimes business owners question whether and how much they should share—they think that their knowledge is their ‘special sauce’. When it comes to brand building, application of that knowledge is what counts. …
Stay Focused: While the ability to appoint oneself an expert opens up a world of possibility in terms of business and personal brand-building, the flip side is the worry that the title doesn’t mean anything anymore. … Maybe, but that doesn’t mean you should avoid the dialogue. Instead, it’s an incentive to be really clear on your skill set and what you want to be known as. …

Making yourself known to industry influencers (media and beyond) is an ongoing effort. It takes time and constant attention. But in today’s noisy world, there’s no short cut in making yourself and your business visible in your space.

Cari Sommer Contributor
+ Follow on Forbes
I am the Principal of Cari Sommer Media + Communications (www.carisommer.com), a consulting firm that works with high growth companies to stand out from the crowd through powerful content, thought leadership and top notch publicity. I developed this expertise first- hand through my role as the co-founder and the head of press relations of the angel funded company

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Urban Interns (www.urbaninterns.com), which has been widely publicized in outlets such as the Wall Street Journal, Crains, Inc, Tech Crunch, Entrepreneur, Mashable and Reuters. Prior to becoming and entrepreneur, I was a litigator for seven years at an international law firm, where I first learned how to convincingly convey a point of view-- a much needed skill for any entrepreneur. I am a graduate of

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Cornell University and Brooklyn Law School. I am a mentor-advisor to Cornell students in e-Lab, the Cornell undergraduate incubator program, and a member of the President’s Council of Cornell Women.

Train Your Brain to Focus

2012-01-19T14:20:00.001-06:00

Harvard Business Review
1:32 PM Wednesday January 18, 2012
by Paul Hammerness, MD, and Margaret Moore

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… Many of us are proud of our prowess in multitasking, and wear it like a badge of honor.

Multitasking may help us check off more things on our to-do lists. But it also makes us more prone to making mistakes, more likely to miss important information and cues, and less likely to retain information in working memory, which impairs problem solving and creativity.

Image by cloois via Flickr

… Studies of adults with attention deficit hyperactivity disorder (ADHD) using the latest neuroimaging and cognitive testing [PDF] are showing us how the brain focuses, what impairs focus — and how easily the brain is distracted. … The good news is that the brain can learn to ignore distractions, making you more focused, creative, and productive.

Here are three ways you can start to improve your focus.

Tame your frenzy.

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Frenzy is an emotional state, a feeling of being a little (or a lot) out of control. … Emotions are processed by the amygdala, … It responds powerfully to negative emotions, which are regarded as signals of threat. Functional brain imaging has shown that activation of the amygdala by negative emotions interferes with the brain's ability to solve problems or do other cognitive work. Positive emotions and thoughts do the opposite — they improve the brain's executive function, and so help open the door to creative and strategic thinking.

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What can you do? Try to improve your balance of positive and negative emotions over the course of a day. Barbara Fredrickson, a noted psychology researcher at the University of North Carolina, Chapel Hill, recommends a 3:1 balance of positive and negative emotions, based upon mathematical modeling of ideal team dynamics by her collaborator Marcial Losada, and confirmed by research on individual flourishing and successful marriages. (Calculate your "positivity ratio" at www.positivityratio.com). You can tame negative emotional frenzy by exercising, meditating, and sleeping well. It also helps to notice your negative emotional patterns. …

What can your team do? Start meetings on positive topics and some humor. The positive emotions this generates can improve everyone's brain function, leading to better teamwork and problem solving.

Apply the brakes.
Your brain continuously scans your internal and external environment, even when you are focused on a particular task. Distractions are always lurking: wayward thoughts, emotions, sounds, or interruptions. Fortunately, the brain is designed to instantly stop a random thought, an unnecessary action, and even an instinctive emotion from derailing you and getting you off track.

What can you do? To prevent distractions from hijacking your focus, use the ABC method as your brain's brake pedal. Become Aware of your options: you can stop what you are doing and address the distraction, or you can let it go. Breathe deeply and consider your options. Then Choose thoughtfully: Stop? or Go?
What can your team do? Try setting up one-hour distraction-free meetings. Everyone is expected to
contribute and offer thoughtful and creative input, and no distractions (like laptops, tablets, cell phones, and other gadgets) are allowed.

Shift Sets.
… Set-shifting refers to shifting all of your focus to a new task, and not leaving any behind on the last one. Sometimes it's helpful to do this in order to give the brain a break and allow it to take on a new task.

What can you do? Before you turn your attention to a new task, shift your focus from your mind to your body. Go for a walk, climb stairs, do some deep breathing or stretches. Even if you aren't aware of it, when you are doing this your brain continues working on your past tasks. Sometimes new ideas emerge during such physical breaks.

What can your team do? Schedule a five-minute break for every hour of meeting time, and encourage everyone to do something physical rather than run out to check email. By restoring the brain's executive function, such breaks can lead to more and better ideas when you reconvene.

Organizing your mind, and your team members' minds, will yield a solid payoff in the year ahead. … Try holding a no-multitasking meeting and see what happens when everyone in the room gives their undivided attention. …

Paul Hammerness, MD, and Margaret Moore

Paul Hammerness, MD, and Margaret Moore are the authors of Organize Your Life, Organize Your Mind (Harlequin). Hammerness is an assistant professor of psychiatry at Harvard Medical School. Moore is the founder and CEO of Wellcoaches Corporation and co-director of the Institute of Coaching at McLean Hospital.

Training Yourself To See New Strategic Options

2012-01-19T12:21:00.001-06:00

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Fast Company

BY FC Expert Blogger Kaihan Krippendorff
Wed Jan 18, 2012
This blog is written by a member of our expert blogging community and expresses that expert's views alone.

[Image: Flickr user Tim Green aka atoach]

I just returned from a long weekend skiing with the kids and some friends. … Saturday morning, stepping into our cars on our way to the slopes, I reminded one friend of the house’s garage door code: “Twelve thirty-four.”

He looked at me oddly, paused, and said, “You mean 1-2-3-4?”

It hit me then. I had been trying to remember “twelve thirty-four,” not realizing that the code was as simple as “1-2-3-4.”

At the choice between these two ways of remembering lies the key to great strategists. …

You see, the strategic choices we make every day are determined by the “strategic narratives” we tell ourselves. …

Image by Sean MacEntee via Flickr

The challenge you face today may remind you of a problem you faced in the past, and if what you did in the past worked, you will simply want to try the same strategy again.

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For my new book, Outthink the Competition, I got a chance to interview Alexandra Kosteniuk, the reigning women’s world chess champion, and get some insight into how she can see the winning strategic move in a chess game when her opponent cannot. What she describes fits perfectly with the research into how great chess players win.

She looks at the board, and while I am thinking in terms of “things”--pawns and knights--she is thinking in terms of “sequences.” She sees the board and actually recognizes the game--she has played this game before, and so she knows the winning move.

In other words, I try to juggle multiple things in my head--“twelve” and “thirty-four”--while she just recognizes one story--“1-2-3-4”--and so is able to see with ease that the next move is “5.”

Your ability to see new strategic options is a function of the number and variety of stories you recognize. …

What strategic narratives are you going to tell yourself today to see new options that will surprise your competition and lead you to breakthrough solutions?

This week I am working on closing three major agreements for my business. I ran the free “Strategem Selector” on my website (kaihan.net), went through the strategic narratives it recommends, and here are the three that I will be thinking about. Try these on for yourself as well. …

Image via CrunchBase

What “brick” can you give away? The story goes like this: You give up something of relatively little value to you and exchange it with your partner/customer for loyalty. This is like HP selling printers for low profit in order to make money selling ink cartridges.
Who else benefits if you win? The story goes like this: You face a tough situation but you find an unexpected ally who benefits by you winning. You partner with that person and they help you succeed. …
To where can you move the action? The story goes like this: You are in one business but competition enters, so you create a new related business and move your profits into this new business. …

Let me know how these three narratives work for you. I’m sure they will reveal a trove of new ideas and will also expand your possibilities.
Want more?

For real-time leadership coverage, follow us on Twitter and LinkedIn.

6 ways to fail your business

2012-01-19T11:37:00.001-06:00

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CBS News

By Jeff Haden

(flickr.com user The Doctr)
(MoneyWatch)

Sure, businesses fail -- but are you failing your small business?

Here are six ways you could be failing your business:

Your eye has started to wander. You're bored with your business because, well, things have gotten a little stale. … You're thinking about forming other companies, or starting a side venture, and you pay less and less attention to your primary business. In the process results, relationships with customers and suppliers, and employee morale all suffer.

You focus on the wrong line. When revenue is down it's natural to focus on cutting costs, … Instead of focusing on the top line and growing sales, you cut and cut and cut until nothing is left. Sometimes it is impossible to save your way to profitability, and focusing on top-line growth is the only long-term answer.

You use "we" at the wrong times. You know there is no "I" in "team" so you try to say "we" -- but at the wrong times. … Use "I" whenever you personally make a mistake, and use "we" whenever you do something positive.

You network rather than sell. Networking is like sowing seeds. Selling is like harvesting crops. … Network some of the time -- sell all the time.

You're in it for glory. … You should serve your business. Your business should not serve you -- and especially not your ego.

You can't stop searching for that one big idea. … Most companies succeed through hard work, attention to detail, and consistent execution. Ignore ideas and small improvements while you search for that one incredible breakthrough and your company will fail. A big idea is unlikely to transform your business; executing lots of small ideas can build a great business.
© 2012 CBS Interactive Inc.. All Rights Reserved.

Jeff Haden Jeff Haden learned much of what he knows about business from managing a 250-employee book manufacturing plant. Everything else he picked up from ghostwriting books for some of the smartest CEOs and leaders in business. He has written more than 30 non-fiction books, including four Business and Investing titles that reached #1 on Amazon's bestseller list. Follow him on Twitter at @Jeff_Haden.

What I Learned From Steve Jobs [real deal]

2012-01-18T10:33:00.001-06:00

Growing Your Empire newsletter

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By Guy Kawasaki

Image via CrunchBase

Many people have explained what one can learn from Steve Jobs. But few, if any, of these people have been inside the tent and experienced first hand what it was like to work with him. I don't want any lessons to be lost or forgotten, so here is my list of the top 12 lessons that I learned from Steve Jobs.

1. Experts are clueless
Experts-journalists, analysts, consultants, bankers and gurus-can't "do" so they "advise." They can tell you what is wrong with your product, but they cannot make a great one. They can tell you how to sell something, but they cannot sell it themselves. They can tell you how to create great teams, but they only manage a secretary. … Hear what experts say, but don't always listen to them.

Image by Anirudh Koul via Flickr

2. Customers cannot tell you what they need

… If you ask customers what they want, they will tell you, "Better, faster and cheaper"-that is, better sameness, not revolutionary change. They can only describe their desires in terms of what they are already using-around the time of the introduction of Macintosh, all people said they wanted was better, faster and cheaper MS-DOS machines. The richest vein for tech startups is creating the product that you want to use-that's what Steve and Woz did.

3. Jump to the next curve
Big wins happen when you go beyond better sameness. The best daisy-wheel printer companies were introducing new fonts in more sizes. Apple introduced the next curve: laser printing. Think of ice harvesters, ice factories and refrigerator companies. Ice 1.0, 2.0, and 3.0. Are you still harvesting ice during the winter from a frozen pond?

4. The biggest challenges beget best work.

Image via CrunchBase

I lived in fear that Steve would tell me that I, or my work, was garbage. In public. This fear was a big challenge. Competing with IBM and then Microsoft was a big challenge. … I, and Apple employees before me and after me, did their best work because we had to do our best work to meet the big challenges.

5. Design counts
… Mere mortals think that black is black, and that a trash can is a trash can. Steve was such a perfectionist-…and … he was right: some people care about design and many people at least sense it. Maybe not everyone, but the important ones.

6. You can't go wrong with big graphics and big fonts
Take a look at Steve's slides. The font is 60 points. There's usually one big screenshot or graphic. … So many people say that Steve was the world's greatest product introduction guy...don't you wonder why more people don't copy his style?

7. Changing your mind is a sign of intelligence
When Apple first shipped the iPhone there was no such thing as apps. Apps, Steve decreed, were a bad thing because you never know what they could be doing to your phone. … [Six] months later … Steve decided, or someone convinced Steve, that apps were the way to go-but of course. Duh! Apple came a long way in a short time from Safari web apps to "there's an app for that."

8. "Value" is different from "price"
… Price is not all that matters-what is important, at least to some people, is value. And value takes into account training, support and the intrinsic joy of using the best tool that's made. …

9. A players hire A+ players Actually, Steve believed that A players hire A players-that is people who are as good as they are. I refined this slightly-my theory is that A players hire people even better than themselves. It's clear, though, that B players hire C players so they can feel superior to them, and C players hire D players. If you start hiring B players, expect what Steve called "the bozo explosion" to happen in your organization.

10. Real CEOs demo

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… [Why] is it that many CEOs call upon their vice-president of engineering to do a product demo? Maybe it's to show that there's a team effort in play. Maybe. It's more likely that the CEO doesn't understand what his/her company is making well enough to explain it. How pathetic is that?

11. Real CEOs ship
For all his perfectionism, Steve could ship. Maybe the product wasn't perfect every time, but it was almost always great enough to go. The lesson is that Steve wasn't tinkering for the sake of tinkering-he had a goal: shipping and achieving worldwide domination of existing markets or creation of new markets. …

12. Marketing boils down to providing unique value
Think of a 2 x 2 matrix. The vertical axis measures how your product differs from the competition. The horizontal axis measures the value of your product. Bottom right: valuable but not unique- you'll have to compete on price. Top left: unique but not valuable-you'll own a market that doesn't exist. Bottom left: not unique and not value-you're a bozo. Top right: unique and valuable-this is where you make margin, money, and history. …

Bonus: Some things need to be believed to be seen
When you are jumping curves, defying/ignoring the experts, facing off against big challenges, obsessing about design and focusing on unique value, you will need to convince people to believe in what you are doing in order to see your efforts come to fruition. … Not everyone will believe-that's okay. But the starting point of changing the world is changing a few minds. This is the greatest lesson of all that I learned from Steve.

***

Cover via Amazon

Guy Kawasaki is the author of Enchantment: The Art of Changing Hearts, Minds, and Actions. He is also the co-founder of Alltop.com, an "online magazine rack" of popular topics on the web, and a founding partner at Garage Technology Ventures. Previously, he was the chief evangelist of Apple. Kawasaki is the author of nine other books including Reality Check, The Art of the Start, Rules for Revolutionaries, How to Drive Your Competition Crazy, Selling the Dream, and The Macintosh Way. Kawasaki has a BA from Stanford University and an MBA from UCLA as well as an honorary doctorate from Babson College.

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Why Bootstrapping Is As Over-Rated As Raising Money

2012-01-13T10:56:00.001-06:00

Image via CrunchBase

TechCrunch
Ashkan Karbasfrooshan

Photo credit: Leonard John Matthews
Entrepreneurship requires balancing unbridled optimism with delusional foolishness. Most entrepreneurs are mocked and misunderstood until they are wildly successful, at which point the chorus changes from “good luck with that ‘business’, pal” to “I always believed in ya, buddy!”

Master of your Domain

There is an undeniable appeal to the notion of bootsrapping your company to success without venture capital. While bootstrapping has many advantages aside from control and ownership—…—the reality is that the disadvantages may be greater. …

Yes, Mo Money = Mo Problems, but Money = Lifeline
Throwing money at problems is usually a short term fix. …
But with no safety net (let alone a warchest) on your balance sheet, you can’t really pivot if your business is hitting a wall. Even if you’re doing well, money is your lifeline, so lacking it may starve even the most promising of bootstrapped companies, preventing you from investing in growth or supporting your clients. So in a best case scenario, you’re operating with one foot on the pedal with another in the grave. You’re basically in a perpetual state of fund-seeking, which is far more distracting than being in fundraising mode.…

Give equity to grow equity
Fundraising is an art, and in Silicon Valley, conventional wisdom suggests that you “raise as much money as you can”. …

Except raising as much money—or diluting—as much as one can is good for investors but bad for entrepreneurs. …

But this shines a light on another reality of value creation: you have to ensure that others want to see you succeed and prosper, and the only way to do that is to hand out equity; as John Doerr says “no conflict, no interest”.

Meet the Board: Your More Objective Bad Cop
Once you have investors on board, the board they assemble will come in handy when you need to make tough decisions. Knowing that you have a regular evaluation and review of the business’ operational and financial metrics helps you succeed, plain and simple.

It’s also helpful for the CEO to be able to play good cop to the board’s bad cop. Indeed, many CEOs lack an objective sounding board and have an emotional attachment to an idea which not only wastes money but more importantly, the best years of your life.

So while too many companies chase the flavor of the month at the behest of their investors, the board will push you until your business takes off or you need to pivot.

Psychological Price Floor
While businesses should be valued on their financials, the historical valuation that investors place on your company may play a role in at least determining a floor price in a worst case scenario or a framework, at least. …

Conversely, I have been told at least a dozen times that not having raised any venture capital values my company at a discount.

The Perception Problem: Red flag?
Moreover, not raising money from professional investors is—in all honesty—a potential red flag. It’s rare for an entrepreneur to run a business and spend millions of dollars without having any outside help. When that is the case, it’s a normal reaction to wonder: why? Why hasn’t outside money been raised? It’s unfair, but saying that it’s never come up would be a lie.

No Sympathy Points
Ultimately, while you may score extra points for building a large business despite being bootstrapped, you don’t actually score many points for running a small business if you have avoided venture capital, even though 99.9% of VC-funded companies wouldn’t exist or last as long as yours if they didn’t have VC funding to rely on.

The cliché is that it’s not the destination that matters, but the journey. … In the sports and business world, it’s all about the outcome. No one remembers the score, let alone how the teams played the game, they remember who won, even if it means giving in to greed and resorting to bad behavior.

When it’s said and done, you can own 100% of a lemonade stand or 1% of Coca-Cola. While these are extreme polar opposites and a middle ground does exist, you have to understand that neither approach to building a business comes without its share of problems and drawbacks. In some ways, you build a business despite bootstrapping or raising VC, and not because of it.

Image via CrunchBase

Editor’s note: Contributor Ashkan Karbasfrooshan is the founder and CEO of WatchMojo. Follow him @ashkan.

The Business Case for Reading Novels

2012-01-12T13:40:00.001-06:00

Harvard Business Review blog
4:02 PM Wednesday January 11, 2012
by Anne Kreamer | Comments (27)
Anne Kreamer

Cover of The Great Gatsby

I've been a devoted, even fanatical reader of fiction my whole life, but sometimes I feel like I'm wasting time if I spend an evening immersed in Lee Child's newest thriller, or re-reading The Great Gatsby. … That slight feeling of self-indulgence that haunts me when I'm reading fake stories about fake people is what made me so grateful to stumble on a piece in Scientific American Mind by cognitive psychologist Keith Oatley extolling the practical benefits to be derived particularly from consuming fiction.

Over the past decade, academic researchers such as Oatley and Raymond Mar from York University have gathered data indicating that fiction-reading activates neuronal pathways in the brain that measurably help the reader better understand real human emotion — improving his or her overall social skillfulness. … It turns out that when Henry James, more than a century ago, defended the value of fiction by saying that "a novel is a direct impression of life," he was more right than he knew.

In one of Oatley and Mar's studies in 2006, 94 subjects were asked to guess the emotional state of a person from a photograph of their eyes. "The more fiction people [had] read," they discovered, "the better they were at perceiving emotion in the eyes, and...correctly interpreting social cues." In 2009, wondering, as Oatley put it, if "devouring novels might be a result, not a cause, of having a strong theory of mind," they expanded the scope of their research, testing 252 adults on the "Big Five" personality traits — extraversion, emotional stability, openness to experience, agreeableness and conscientiousness — and correlated those results with how much time the subjects generally spent reading fiction. Once again, they discovered "a significant relation between the amount of fiction people read and their empathic and theory-of-mind abilities" allowing them to conclude that it was reading fiction that improved the subjects' social skills, not that those with already high interpersonal skills tended to read more.

Theory of mind, the ability to interpret and respond to those different from us — colleagues, employees, bosses, customers and clients — is plainly critical to success, particularly in a globalized economy. The imperative to try to understand others' points of view — to be empathetic — is essential in any collaborative enterprise.

Emotions also have an impact on the bottom line. A 1996 study published in the journal Training and Development assessing the value of training workers at a manufacturing plant in emotional management skills … found that union grievance filings were reduced by two-thirds while productivity increased substantially. And a study of a Fortune 400 health insurance company conducted by Peter Salovey, a psychology professor at Yale, looked at the correlations between emotional intelligence and salary and found that people rated highest by their peers in emotional intelligence received the biggest raises and were promoted most frequently.

To bring the subject home, think about how many different people you interact with during the course of a given day … Then think about how much effort you devoted to thinking about their emotional state or the emotional quality of your interaction. It's when we read fiction that we have the time and opportunity to think deeply about the feelings of others, really imagining the shape and flavor of alternate worlds of experience. …

Cover via Amazon

… And if you want your diet of fiction, as it's shaping your mind to be more emotionally acute, to be specifically relevant to work, there is a body of great literature about business and organizational behavior. For instance, Anthony Trollope's The Way We Live Now, inspired by 19th century financial scandals among the British elite, resonates powerfully today. In his autobiography, Trollope wrote that "a certain class of dishonesty, dishonesty magnificent in its proportions, and climbing into high places, has become at the same time so rampant and so splendid that there seems to be reason for fearing that men and women will be taught to feel that dishonesty, if it can become splendid, will cease to be abominable. If dishonesty can live in a gorgeous palace with pictures on all its walls, and gems in all its cupboards, with marble and ivory in all its corners, and can give Apician dinners, and get into Parliament, and deal in millions, then dishonesty is not disgraceful, and the man dishonest after such a fashion is not a low scoundrel. Instigated, I say, by some such reflections as these, I sat down in my new house to write The Way We Live Now." …

… In addition to the Trollope, below are some of my favorite books to get you started.

Kurt Andersen, Turn of the Century — set in 2000 and 2001, a successful TV producer husband and digital entrepreneur wife, trying to balance the demands of work and life, wind up pitted against each other as executives in a U.S. media empire. His mistrust grows when she becomes a favorite of the Rupert Murdoch-like chairman. Meanwhile, their hedge-fund-manager best friend is involved in big-time stock manipulation. (Full disclosure: my husband is the author)

Image via Wikipedia

Jane Austen, Sandition — in this unfinished fragment of a novel, Austen departs from her typical marriage plot to describe the zealous entrepreneurialism of a real estate speculator. While we can never know how the novel would have ended, we can be pretty sure his housing bubble will burst.

Charles Dickens, Bleak House — Dickens' tenth novel explores the human cost of prolonged litigation through the eyes of Esther Summerson, who is caught up in a multi-generational dispute over the disposition over an inheritance. Anyone who has ever been entangled in a lawsuit will revel in the characterization of the process. At the time of publication, 1852–1853, public outrage over injustice in the English legal system helped the novel to spark legal reform that culminated in the 1870s.

William Gaddis, JR — in the 1976 National Book Award winner, the 11-year old protagonist, JR, secretly trades penny stocks, using the tools of the trade at the time — money orders and payphones — to build a fortune. Written entirely in dialogue, the absurdity of a precocious child's feat satirizes as Gaddis put it, "the American dream turned inside out." His description of dysfunctional boards and the corrosive effect of corporate takeovers and asset stripping are as current today as they were 30 years ago.

Joseph Heller, Something Happened — Heller's stream of consciousness second novel follows a regular-joe middle manager as he prepares for a promotion. The messy interweaving of his thoughts about his job, family, sex, and childhood perfectly distill how complicated the selves we bring to work really are.

Anne Kreamer was the Executive Vice President, Worldwide Creative Director, for Nickelodeon and Nick at Nite. Her books include Going Gray, What I Learned About Beauty, Sex, Work, Motherhood, Authenticity, And Everything Else That Matters, and more recently, It’s Always Personal, which explores the new realities of emotion in the workplace.

The 5 essential functions of a great boss

2012-01-05T15:28:00.000-06:00

The 5 essential functions of a great boss - CBS News: 'via Blog this'

Image via Wikipedia

December 27, 2011 9:58 AM

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TEXT

By: Jeff Haden

(istockphoto)

(MoneyWatch)

Great business owners become great based on their actions. ... Results are everything.

But probably not the kinds of results you might have in mind.

Consistently accomplish these five functions and you, your company -- and most importantly your employees -- all reap the benefits. ...

1. Develop every employee. ... Without great employees, no amount of focus on goals and targets will pay off. Employees can only achieve what they are capable of achieving, so it's your job to help every employee become capable of achieving more.

... As a manager you owe it to your employees to provide the training, mentoring, and opportunities they need and deserve. In the process you listen, guide, and develop loyalty and commitment. Reviewing results and tracking performance is transformed from enforcement into personal progress and improvement -- both for the employee and for business.

Employee development is your primary responsibility as a boss. Spend the bulk of your time developing the skills of employees; goal achievement becomes a natural, long-term result.

2. Take care of problems immediately. ... Interpersonal squabbles, performance issues, inter-departmental feuds all negatively impact employee motivation, enthusiasm, and even individual work ethic.

Small problems never go away. They always fester and grow into bigger problems -- and when you ignore an issue, employees immediately lose respect for you. Without respect you can't lead.

Never hope a problem will magically disappear (or someone else will deal with it.) No matter how small, deal with every issue head-on.

3. Rescue a struggling employee. Every team has an employee who has fallen out of grace: Publicly failed to complete a task, blew up in a meeting, or just makes particularly slow progress. ...

When that happens it's almost impossible for the struggling employee to turn a corner on his own. ...

But that weight is not too heavy for you to move.

Before you remove a weak link from the chain, put your full effort into trying to rehabilitate that person instead. Step in and address the situation, but do so in a positive way. ... Express confidence, be reassuring, and most of all tell him you'll be there every step of the way.

Don't relax your standards, though. Just step up the mentoring and coaching you provide.

Granted, sometimes it won't work out, so see the effort as its own reward.

4. Serve others -- never yourself. ... Never say or do anything that in any way puts you in the spotlight, however briefly. ... Never say, "This took a lot of work, but I have finally convinced upper management to let us..." If it should go without saying, don't say it.

Your glory should always be reflected, never direct. When employees excel you excel. When your team succeeds you succeed. ...

Consistently act as if you are less important than your employees and everyone will know how important you really are.

5. Stay humble. ... Some admire what you have accomplished; most respect you for your hard work and achievements. So sometimes an employee will just want to talk or to spend a little time with you.

When that happens you can blow that person off, or you can see the moment for its true importance: A chance to inspire, motivate, reassure, or give someone hope for greater things in their life.

The higher you rise, the greater the impact you can make, and the greater your responsibility to make that impact.

Jeff Haden

Jeff Haden learned much of what he knows about business from managing a 250-employee book manufacturing plant. Everything else he picked up from ghostwriting books for some of the smartest CEOs and leaders in business. He has written more than 30 non-fiction books, including four Business and Investing titles that reached #1 on Amazon's bestseller list. Follow him on Twitter at @Jeff_Haden.

The Seven Habits of Spectacularly Unsuccessful Executives - Forbes

2012-01-03T13:48:00.001-06:00

Forbes
1/02/2012 @ 10:47

Eric Jackson, Contributor

Cover via Amazon

Sydney Finkelstein, the Steven Roth Professor of Management at the Tuck School of Business at Dartmouth College, published “Why Smart Executives Fail” 8 years ago.

In it, he shared some of his research on what over 50 former high-flying companies – like Enron, Tyco, WorldCom, Rubbermaid, and Schwinn – did to become complete failures. It turns out that the senior executives at the companies all had 7 Habits in common. Finkelstein calls them the Seven Habits of Spectacularly Unsuccessful Executives.

… Here are the habits, as Finkelstein described in a 2004 article:

Habit # 1: They see themselves and their companies as dominating their environment
This first habit may be the most insidious, since it appears to be highly desirable. Shouldn’t a company try to dominate its business environment, shape the future of its markets and set the pace within them? Yes,but there’s a catch. Unlike successful leaders, failed leaders who never question their dominance fail to realize they are at the mercy of changing circumstances….
CEOs who fall prey to this belief suffer from the illusion of personal pre-eminence:… As far as they’re concerned, everyone else in the company is there to execute their personal vision for the company.
Warning Sign for #1: A lack of respect

Habit #2: They identify so completely with the company that there is no clear boundary between their personal interests and their corporation’s interests
… We want business leaders to be completely committed to their companies, with their interests tightly aligned with those of the company. But digging deeper, you find that failed executives weren’t identifying too little with the company, but rather too much. Instead of treating companies as enterprises that they needed to nurture, failed leaders treated them as extensions of themselves. And with that, a “private empire” mentality took hold.

CEOs who possess this outlook often use their companies to carry out personal ambitions. The most slippery slope of all for these executives is their tendency to use corporate funds for personal reasons. … Being the CEO of a sizable corporation today is probably the closest thing to being king of your own country, and that’s a dangerous title to assume.
Warning Sign for #2: A question of character

Habit #3: They think they have all the answers
… Leaders who are invariably crisp and decisive tend to settle issues so quickly they have no opportunity to grasp the ramifications. Worse, because these leaders need to feel they have all the answers, they aren’t open to learning new ones.

… Leaders who need to have all the answers shut out other points of view. When your company or organization is run by someone like this, you’d better hope the answers he comes up with are going to be the right ones. …
Warning Sign for #3: A leader without followers

Habit #4: They ruthlessly eliminate anyone who isn’t completely behind them
CEOs who think their job is to instill belief in their vision also think that it is their job to get everyone to buy into it. Anyone who doesn’t rally to the cause is undermining the vision. Hesitant managers have a choice: Get with the plan or leave.

The problem with this approach is that it’s both unnecessary and destructive. … In fact, by eliminating all dissenting and contrasting viewpoints, destructive CEOs cut themselves off from their best chance of seeing and correcting problems as they arise. Sometimes CEOs who seek to stifle dissent only drive it underground. Once this happens, the entire organization falters. … Eventually, these CEOs had everyone on their staff completely behind them. But where they were headed was toward disaster. And no one was left to warn them.
Warning Sign for #4: Executive departures

Habit #5: They are consummate spokespersons, obsessed with the company image
You know these CEOs: high-profile executives who are constantly in the public eye. The problem is that amid all the media frenzy and accolades, these leaders’ management efforts become shallow and ineffective. …

Behind these media darlings is a simple fact of executive life: CEOs don’t achieve a high level of media attention without devoting themselves assiduously to public relations. When CEOs are obsessed with their image, they have little time for operational details. …

As a final negative twist, when CEOs make the company’s image their top priority, they run the risk of using financial-reporting practices to promote that image. Instead of treating their financial accounts as a control tool, they treat them as a public-relations tool. The creative accounting that was apparently practiced by such executives as Enron’s Jeffrey Skilling or Tyco’s Kozlowski is as much or more an attempt to promote the company’s image as it is to deceive the public: In their eyes, everything that the company does is public relations.
Warning Sign of #5: Blatant attention-seeking

Habit #6: They underestimate obstacles
Part of the allure of being a CEO is the opportunity to espouse a vision. Yet, when CEOs become so enamored of their vision, they often overlook or underestimate the difficulty of actually getting there. And when it turns out that the obstacles they casually waved aside are more troublesome than they anticipated, these CEOs have a habit of plunging full-steam into the abyss. …

… Some feel an enormous need to be right in every important decision they make, because if they admit to being fallible, their position as CEO might seem precarious. Once a CEO admits that he or she made the wrong call, there will always be people who say the CEO wasn’t up to the job. These unrealistic expectations make it exceedingly hard for a CEO to pull back from any chosen course of action, which not surprisingly causes them to push that much harder. …
Warning Sign of #6: Excessive hype

Habit #7: They stubbornly rely on what worked for them in the past
Many CEOs on their way to becoming spectacularly unsuccessful accelerate their company’s decline by reverting to what they regard as tried-and-true methods. … Instead of considering a range of options that fit new circumstances, they use their own careers as the only point of reference and do the things that made them successful in the past. …

Frequently, CEOs who fall prey to this habit owe their careers to some “defining moment,” a critical decision or policy choice that resulted in their most notable success. … The problem is that after people have had the experience of that defining moment, if they become the CEO of a large company, they allow their defining moment to define the company as well – no matter how unrealistic it has become.
Warning Sign of #7: Constantly referring to what worked in the past

The bottom line: If you exhibit several of these traits, now is the time to stamp them out from your repertoire. If your boss or several senior executives at your company exhibit several of these traits, now is the time to start looking for a new job.

The Power of the Post-Recession Consumer

2011-12-30T11:43:00.002-06:00

An analysis of attitudes and spending reveals a return to traditional values, driven by consumers searching for quality, affordability, and connection.

strategy+business magazine
February 22, 2011 / Spring 2011 / Issue 62
by John Gerzema and Michael D'Antonio

Illustration by Lars Leetaru

Image via WikipediaThe wave of hyper-consumerism that propelled the U.S. economy through the last decades of the 20th century and into the first years of the 21st century has passed. …Consumer spending patterns are changing as part of a trend that has been quietly gathering strength over the past 10 years. …People are returning to old-fashioned values to build new lives of purpose and connection. They also realize that how they spend their money is a form of power, and are moving from mindless consumption to mindful consumption, increasingly taking care to purchase goods and services from sellers that meet their standards and reflect their values.

This change in consumer attitudes … is …, in part, a reaction to economic hard times. But it is also closely related to the civic dissatisfaction that is rocking the political establishment, and additionally has some roots in environmental awareness and changing aspirations. That is why this Spend Shift movement, as we call it, is here to stay. It will create opportunities for businesses that heed its message, and penalize those that do not. (For another perspective, see “Values vs. Value,” by Timothy Devinney, Pat Auger, and Giana M. Eckhardt, s+b, Spring 2011.)

Our view of the Spend Shift is based on two years of gathering and analyzing data, and traveling around the U.S. to discover how the recession has affected people’s lives. We started with Young & Rubicam’s BrandAsset Valuator (BAV), which is a poll of consumer values, attitudes, and shopping behaviors that goes back nearly 20 years. …

The BAV data revealed that even before the recession took hold in mid-2008, there were dramatic shifts in what people expected in the consumer marketplace and how they defined and pursued what they considered the good life. … More recently, the BAV surveys show sharp increases in the number of consumers who want positive relationships with marketplace vendors and who focus more on corporate behavior. Between 2005 and 2009, a growing number of people rejected status-driven values such as snobbishness and exclusivity, and embraced attributes related to bringing people closer together or making the world a better place. Among the once-prized brand attributes that declined in this period were: “exclusive” (down 60 percent), “arrogant” (down 41 percent), “sensuous” (down 30 percent), and “daring” (down 20 percent). On the opposite side of the scale, the brand attributes Americans found more important as they began to sense the impending recession and then suffered through the crisis were: “kindness and empathy” (up 391 percent), “friendly” (up 148 percent), “high quality” (up 124 percent), and “socially responsible” (up 63 percent).

… Between 2005 and 2009, U.S. consumers expressed a nearly fourfold increase in their preference for companies, brands, and products that show kindness in both their operations and their encounters with customers. This desire for companies to be more empathetic toward consumers is the biggest shift in any attitude that we have ever seen during the BAV survey’s two-decade history. …

1. United by Change

The Spend Shift is a far-reaching and inclusive phenomenon that can’t be defined by any particular demographic. According to our data, 55 percent of all Americans are part of this movement; in addition, about one-quarter of the U.S. adult population embraces many of the Spend Shift attitudes and characteristics (we call them Fast Followers). Although the word values tends to polarize U.S. citizens, the Spend Shift is blind to geography, education, age, and income. …

What unites all these Spend Shifters is a common sense of optimism and newfound purpose. As the shock of economic loss wears off for many people, they are redefining what it means to be successful and happy. They are living with less and yet feeling greater satisfaction. …

2. The New Thrift

…Consumer spending will no longer be able to grow faster than personal income, as it did during the 30 years leading up to the crisis. … If you look at historical savings rates in the U.S., people have on average saved 10 percent of their income going back as far as six decades. It was only in the mid-1980s that … ordinary people [ere encouraged] to get out over their skis. In only 20 years, average American households swung from being net savers to being net borrowers. Now, however, consumers are returning to traditional values that have long defined the U.S. ideal.

Image via Wikipedia… In the post-recession economy, resourcefulness and self-sufficiency are viewed as virtues, and excessive consumption as a sign of weakness. … We examined the 2009 performance of a basket of “retooling” companies — those that are in the top 10 percent of our data on being “helpful,” “reliable,” “educational,” and “durable,” such as LeapFrog, Weight Watchers, Craftsman, and DeWalt, because they help people help themselves. The performance of these companies against all others is notable: They performed 249 percent better than other companies when respondents were asked whether they would recommend these brands to a friend, 234 percent better when respondents were asked if they used the products regularly, and 210 percent better on whether the products were worth a premium price.

…[Many] people, … are seeking ways to experience a sense of competence, self-sufficiency, and accomplishment. … If you have an idea for helping people learn new skills and connect with others, your business has a good chance of success.

3. Transparency Breeds Trust

… Companies serving these customers, who know more and expect more, will need to continuously listen, respond, and innovate. They are in for a challenge: Our data shows that confidence in all types of big organizations, including big government and big business, has declined by nearly 50 percent in the past two years. …

Wary consumers are going beyond just reading labels to get the best products and the best deals. The most tech-savvy are using online services as they stand in the supermarket aisle to get instant access to information on prices and on a company’s social or environmental record. …

… Today, however, customers have equal (and sometimes superior) access to data. As a result, transparency becomes all the more crucial. Today’s stakeholders … crave a true, authentic story. They will be interested in how a company thinks and how it makes decisions. …

4. Companies That Care

… The ability of a company to identify with its customers is now a prerequisite for any brand in the post-crisis age. Today, openness, humility, and understanding are critical. Generosity binds a company to its community and its stakeholders.

The rising importance of generosity reflects the fact that the post-crisis era will be defined by inclusion rather than exclusion. … Spend Shifters are buying artisanal food because they trust companies that reveal how their food is produced and handled. They patronize cooperative small businesses because such businesses use their profits to build up their local regions. Passionate customer groups will also band together to fund niche offerings that speak directly to the areas about which they feel most strongly. Because 71 percent of U.S. consumers are now aligning their spending with their values, businesses that practice in a new way will find a vibrant marketplace. Instead of selling shoes, such businesses sell empathy and respect. … Instead of serving food, companies create communities of hope. Instead of making cars, they promise fairness, openness, and shared discourse.

Consumers will be looking for signs that companies care about their impact on communities and are investing in making things better. … The vanguard companies understand that showing kindness and humanity is now a competitive advantage.

Microsoft is a telling example. … In our BAV survey, Microsoft always scores high on measures of its reputation, exceeding Apple by a wide margin. … Despite its massive size, Microsoft is still widely associated with the single personality of its founder, Bill Gates. He gives Microsoft a human face and, more important, his philanthropy gives the company a heart. …

When we talked to Akhtar Badshah, Microsoft’s senior director of global community affairs, he told us that in its response to the recession, Microsoft pursued three main areas of focus: education, innovation, and jobs and economic opportunity. … The key point is that Microsoft uses both its money and its true areas of expertise to maximize the good it can do as a citizen corporation, showing how a company can be charitable by redeploying its existing assets and infrastructure as tools for social and economic development.

The Consumer Connection

… Although the growth of consumer spending appears to be slowing, we believe that people are simply reallocating the way they spend — looking for a connection to the creator of the product; banding together to get better deals; and pushing service and product creators to do more, price better, and connect more deeply to their wants and needs.

Image via WikipediaEven as people find themselves less rich, they are deploying their dollars in a more calculated and strategic way to influence institutions such as corporations and government. …

The most successful companies will respond to this shift by adopting a business model in which all three parties — the business, the customer, and the community — win in every transaction. Although the Spend Shift will dampen domestic demand for some products, the market for values-oriented goods and services offers opportunities for growth in what might otherwise be considered mature categories. We examined the performance of a group of companies and brands that scored in the top 20 percent in the BAV survey on the values we had noted were becoming increasingly important — self-reliance, adaptability, honesty, quality, and community. And we found that in aggregate they enjoyed nearly three times as much usage and preference as brands that did not represent these values.

We believe that the future face of capitalism will be defined by delivering value and values. Those that embrace this reality and adapt will find extraordinary opportunities. Those that ignore it will do so at their peril.

Reprint No. 11107

Author Profile:

John Gerzema is president of Brand Asset Consulting, a Young & Rubicam Brands company. He is a pioneer in the use of data to identify social change and to help companies both anticipate and adapt to new consumer interests and demands. Gerzema oversees the BrandAsset Valuator, the world’s largest database of consumer insights. Follow him on Twitter at @johngerzema/Twitter.
Michael D’Antonio is a Pulitzer Prize–winning journalist based in New York. He is the author of more than a dozen books, including Forever Blue: The True Story of Walter O’Malley, Baseball’s Most Controversial Owner, and the Dodgers of Brooklyn and Los Angeles (Riverhead Books, 2009).

Volkswagen turns off Blackberry email after work hours

2011-12-23T14:30:00.002-06:00

BBC News
23 December 2011 Last updated at 06:59 ET

Volkswagen has agreed to stop its Blackberry servers sending emails to some of its employees when they are off-shift.

The carmaker confirmed it made the move earlier this year following complaints that staff's work and home lives were becoming blurred. …

A spokesman for VW said: "We confirm that this agreement between VW and the company's work council exists", but would not comment further. …

"We wanted to take a preventative approach to tackling the issue," said Gunnar Killian, VW's works council spokesman. …

Spare time

Image via WikipediaThe move follows criticism of internal emails by Thierry Breton, chief executive of the French information technology services giant, Atos. He said workers at his firm were wasting hours of their lives on internal messages both at home and at work. He has taken the more radical step of banning internal email altogether from 2014.

Last month the maker of Persil washing powder, Henkel, also declared an email "amnesty" for its workers between Christmas and New Year saying messages should only be sent out as an emergency measure.
Industry watchers say the moves reflect growing awareness of a problem.

"It's bad for the individual worker's performance being online and available 24-7. You do need downtime, you do need periods in which you can actually reflect on something without needing instantaneously to give a reaction," said Will Hutton, chair of the Big Innovation Centre at The Work Foundation.
"Secondly it has a poor impact on an individual's well-being. I think that one has to patrol quite carefully the borderline between work and non-work.” …

Consultations

Union officials in the UK have also cautioned other firms against repeating Volkswagen's move without consultation.

Image via Wikipedia"The issue of employees using Blackberrys, computers and other devices out of working time is a growing one that needs to be addressed as it can be a source of stress," Trades Union Congress (TUC) secretary general Brendan Barber told the BBC.

"However other organisations will need different solutions and what works in VW may not work elsewhere.

"By working in partnership with their union, Volkswagen's policy will have the support of all their employees. Where employers simply introduce policies on their own, however well-meaning they may be, they are unlikely to be successful."

The 10 Biggest Mistakes Entrepreneurs Make

2011-12-19T14:53:00.003-06:00

Growing Your Empire Newsletter

By Paul Lemberg

It's hard to avoid certain mistakes, especially when you face a situation for the first time. In fact, many of the following mistakes are hard to avoid even if you're an old hand. Of course, these are not the only mistakes CEOs make, but they sure are common enough. …

1. Big Customer Syndrome
If more than 50 percent of your revenues come from any one customer you may be headed for a meltdown. … [You] are so busy servicing that one big account that you fail to develop additional customers and revenue streams. Then suddenly, for one reason or another, that customer goes away and your business borders on collapse.

Use that burgeoning account as both a cause for celebration and a danger signal. Always look for new business. And always seek to diversify your revenue sources.

2. Creating products in a vacuum.

Image by ronploof via FlickrYou and your team have a great idea. … When you finally bring it to market, no one is interested. Unfortunately you were so in love with your idea you never took the time to find out if anyone else cared enough to pay money for it. …

… Do the market research up front. … Talk to potential customers, at least a dozen of them. … If enough people say "yes" go ahead and build it. Better yet, sell the product at pre-release prices. Fund it in advance. If you don't get a good response, go on to the next idea.

3. Equal partnerships
Suppose you are the world's greatest salesman, but you need an operations guy to run things back at the office. Or you are a technical genius, but you need someone to find the customers. Or maybe you and a friend start the company together.

In each case, you and your new partner split the company 50/50. That seems fine and fair right now, but as your personal and professional interests diverge, it is a sure recipe for disaster. Either party's veto power can stall the growth and development of your company, and neither holds enough votes to change the situation.
Almost as bad is ownership split evenly among a larger number of partners, or worse, friends. … No one has the final say, every little decision becomes a debate, and things bog down quickly.

Image via WikipediaTo paraphrase Harry Truman, the buck has to stop somewhere. Someone has to be in charge. Make that person CEO and give them the largest ownership stake, even if it's only a little more. 51/49 works much better than 50/50. If you and your partner must have total equality, give a one percent share to an outside advisor who becomes your tie-breaker.

4. Low prices
Some entrepreneurs think they can be the low price player in their market and make huge profits on the volume. Would you work for low wages? Why do you want to sell at low prices? … Remember, low margins = no profits = no future. So the grosser the better.

Set your prices as high as your market will bear. Even if you can sell more units and generate greater dollar volume at the lower price (which is not always the case) you may not be better off. … Figure all your incremental costs. Figure in the extra stress as well. For service companies, low price is almost never a good idea. How do you decide how high? Raise prices. Then raise them again. When customers or clients stop buying, you've gone too far.

5. Not enough capital
… Regardless of the cause, many businesses are simply undercapitalized. Even mature companies often do not have the cash reserves to weather a downturn.

Be conservative in all your projections. Make sure you have at least as much capital as you need to make it through the sales cycle, or until the next planned round of funding. Or lower your burn rate so that you do.

6. Out of Focus
… [Many] entrepreneurs - hungry for cash and thinking more is always better - feel the need to seize every piece of business dangled in front of them, instead of focusing on their core product, service, market, distribution channel. Spreading yourself too thin results in sub-par performance.

Concentrating your attention in a limited area leads to better-than-average results, almost always surpassing the profits generated from diversification. …

… Don't spread yourself thin. Get known in your niche for the thing you do best, and do that exceedingly well.

Image via Wikipedia7. First class and infrastructure crazy

Many a startup dies an untimely death from excessive overhead. … Your management team should earn the bulk of their compensation when the profits roll in, not before.

… Spend all the money really necessary to achieve your objectives. Ask the question, will there be a sufficient return on this expenditure? Everything else is overhead.

8. Perfectionitis
… Finishing the last 20 percent of the last 20 percent could cost you more than you spent on the rest of the project. When it comes to product development, Zeno's paradox rules. Perfection is unattainable and very costly at that.

Plus, while you're getting it right, the market is changing right out from under you. On top of that, your customers put off purchasing your existing products waiting for the next new thing to roll out your doors.

… Focus on creating a market-beating product within the allotted time. … Know when you have to stop development to make a delivery date. When your time's up, it's up. Release your product.

Image via Wikipedia9. No clear return on investment

Can you articulate the return which comes from purchasing your product or service? … You say it's too hard to quantify? … If it's too difficult for you to figure, what do you expect your prospect to do?

… Talk to your customers, create case studies. Come up with ways to quantify the benefits. … If you can demonstrate the great return on investment your product provides, sales are a slam dunk.

10. Not admitting your mistakes.
… At some point you realize the awful truth: you have made a mistake. Admit it quick. Redress the situation. … Sometimes this is hard, but, believe me, bankruptcy is harder.

Assume your costs are sunk. Your money is lost. There is good news: your basis is zero. From this perspective, would you invest fresh money in this idea? If the answer is no, walk away. Change course. Whatever. But do not throw any more good money after bad.
OK, everybody makes mistakes. Just try to catch them quickly, before they kill your company.

***
Paul Lemberg helps small business owners become wealthy. Since 1995, Paul has helped hundreds of small business owners achieve outstanding success. He has written three books, including Faster Than the Speed of Change, Earn Twice As Much with Half The Stress (co-authored with Tom Matzen), and his latest, the business best seller, Be Unreasonable. On television, Paul has appeared on Good Morning America, CNN, Financial News Network, and dozens of national radio programs. His work has been featured in over eighty magazines and publications including the New York Times and the Los Angeles Times, as well as the world's largest circulation newsletter, Bottom Line Personal. You can learn more about Paul at http://www.paullemberg.com/.

The Top 10 M&A Fallacies and Self-Deceptions

2011-12-16T17:06:00.002-06:00

Image via Wikipedia

With merger and acquisition activity heating up, here’s a due diligence checklist for regaining clarity.

strategy+business magazine
by Barry Jaruzelski, Marian Mueller, and Peter Conway

Imagine that you have just concluded a major merger or acquisition. … Having crossed off every item on your due diligence checklist, you expect big savings from restructuring; more importantly, you know that a year from now this newly created company will be the leader in its industry, with significant growth in revenue and higher profit levels.

Then flash forward to the first anniversary of your M&A deal announcement. The company’s performance is below expectations and you’re left with a nagging sense of doubt about the transaction. …
…Often, when you look closely, a common set of attitudes is at play — implicit assumptions held by the leaders who put the M&A deals together and conducted the due diligence. These attitudes fall into two broad groups. First are fallacies, … Second are self-deceptions, … By becoming more aware of them, you can raise the success rate of all your M&A deals significantly.

Five Fallacies to Avoid

M&A fallacies are often ingrained in a company’s legacy practices, including the due diligence practices that have been successful in the past. It’s not enough to recognize these fallacies. You must take specific precautions to keep from being blindsided by them.

1. “We can’t walk away from this deal.” This fallacy about M&A seems to make intuitive sense. The people who put a deal together — often the business unit general manager and his or her staff … are subject to the vagaries of human nature. When they are too close to a deal, it clouds their ability to make an objective, unbiased decision. They are far too likely to focus on details that confirm their preconceptions and ignore details that contradict them. This is known in the field as “deal fever.” …

You can generally avoid deal fever with a layered decision-making process. The deal team, including the business leader who champions the acquisition, should present the case to a separate group or individual who can review its attractiveness more objectively. You must balance these prudent checks and balances against your need for speed. The most effective companies adopt “high-speed lanes” for decisions that must be fast-tracked, as well as top-layer deal review committees staffed by executives who agree to make themselves available quickly if needed. …

2. “Any experienced negotiator can negotiate deals.” …Unfortunately, the auction-like nature of competitive deals can make mergers and acquisitions very different from negotiating a product launch or joint venture–related agreement.

For example, the acquiring management team may fall prey to a seller’s overoptimistic projections or their own synergy estimates. … It is easy to lose sight of the fact that if the price and terms aren’t right, “winning” the deal can be worse than losing.

The answer is to think ahead of time about what you are willing to pay and to develop a true “walk-away” price. During negotiations, as you learn about the sellers’ motivations and as new options are suggested, this preparation can help you turn down any new arrangement that doesn’t give you what you need. … You can also put measures in place that share some upside potential while still staying below the walk-away price. For example, you can prearrange a performance bonus for the sellers, to be awarded when agreed-upon financial milestones are reached. …

3. “M&A performance is all in the numbers.” Many executives assume that if the financial arrangements are secure, the rest of the deal will follow. But all deals have two other significant factors to consider that are often not accounted for in the numbers: the human element and the need to develop the capabilities required to succeed in the new or merged business. … A comprehensive due diligence process should take into account both the cultural and capability aspects of the deal….

4. “Information in the M&A process will naturally be kept confidential.” When middle- and low-level employees get wind of a possible acquisition, leaks are possible, and they can have major consequences. Confidentiality should be taken very seriously and enforced during the due diligence process; leaks can come from a variety of sources….

Other ways of enforcing confidentiality include extending the NDA requirements to administrative staff, highlighting the importance of confidentiality during key due diligence checkpoints, prohibiting e-mail about the deal, and instituting preannounced penalties for leaks and breaches. Sometimes, key components of the due diligence process can be outsourced to a third party to reduce internal communications. …

5. “There’s time for detailed postmerger planning after the merger takes place.” This fallacy … rarely leads to good results. Unless you define a detailed merger integration plan before the submission of the binding bid, you risk losing the momentum that you need to drive change and integrate the companies. …
Identify a postmerger integration team and a leader during due diligence, as soon as it is clear that a binding bid will be submitted. This will help you identify some of the key integration risks and issues, and the resources required for integration. It will also lay the groundwork for postmerger review processes and metrics that can help hold the integration and business leaders accountable.

Self-Deception vs. Reality

Self-deceptions are often more difficult to address than fallacies, since practitioners think that they are already following the best practices. Our experience suggests otherwise.

1. “Our company’s M&A process is strategy-led.” [Even] in a sophisticated company, strategic definition can be surprisingly incomplete. This leads to significant delays in conducting due diligence, or to a lack of preparation in responding to deals when they become available …

… Deals need to be generated with strategic intent, no matter how attractive the financials appear to be. This means that the acquired business should bring in capabilities that fit with the capabilities system of the larger company — or bring in new products and services for which the acquiring company’s capabilities system is relevant. Otherwise, a deal may put the core business at risk or drain attention, time, and resources. In particular, mergers and acquisitions should reinforce and help build the capabilities that distinguish the core business from its competition.

2. “We have a thorough understanding of our markets.” Most business leaders are predisposed to believe this. … However, a merger or acquisition can easily bring a company face-to-face with aspects of its market that it doesn’t know well….

Draw on multiple perspectives, whether from inside or outside the company, to help you become aware of these sorts of issues. As you conduct due diligence, make sure you have a reasonably complete and up-to-date picture of the value chain for your target company’s industry; the relevant market size, relevant segmentation data, and trends and growth drivers in each segment; customer needs by segment; customer attitudes toward the target company; current profit and profit potential by segment; technology trends and potential substitute products; geographic nuances by segment and product; competitive landscape (including as much as you can glean about products, pricing, and costs); and barriers to entry and new disruptive entrants.

3. “Our core market success is replicable in adjacent markets.” The traditional definition of an adjacency is products and services that share some qualities or characteristics with your core market. … In reality, however, most moves into adjacent markets are unsuccessful, especially those made through M&A. … [Only] companies that have a well-defined M&A process that recognizes the importance of existing capabilities and the changes that will be required to evolve those capabilities have successfully executed such transactions with regularity.

Thus, when beginning an acquisition campaign, you should begin by evaluating your capabilities. Examine how well these will apply to the businesses in the company you are acquiring — and how well the capabilities you acquire will mesh with your own lineup of products and services.

The best acquirers take a strongly disciplined approach to business building, with strict criteria for acquisitions. These could include criteria related to target market size, degree of market fragmentation, gross margin targets, cyclicality and volatility, brand strength, customer concentration, and robust replacement parts or other streams of ongoing business. … When you reject target companies that do not fit your strictest criteria, you put a stake in the ground indicating that any company acquired will set up your company for above-market growth.

4. “We have a well-defined due diligence process.” Many corporate leaders learn the hard way that this isn’t true, particularly when their company is an infrequent acquirer or when they consider acquiring companies in different markets. They underestimate the amount of effort and time consumed by an acquisition or merger. Even when experienced senior executives are overseeing various functions, enthusiastic junior staff are executing the requisite tasks, and some due diligence processes are in place, there is still a tremendous amount of work to be done in a compressed time frame.

You may find, as you begin due diligence, that your processes are incomplete, and your team lacks the expertise to evaluate commercial prospects; technologies; legal issues; manufacturing footprints; procurement concerns; intellectual property; tax questions; regulatory issues; export controls; or issues related to health, safety, and the environment. At the least, you will need detailed standard questionnaires covering these issues; more likely, you will need to bring in experts who can answer questions with confidence….

To avoid these types of problems, arrange regular meetings of new business development practitioners across internal boundaries. Document what went well and what did not go well following each transaction, to share with the group. Use these meetings to drive best practice development; share basic information about the market, as well as simple tips and tricks. Create due diligence templates and questionnaires, such as data request templates, so that work can flow seamlessly, even if individual staff members depart in the middle of a project.

5. “Our legacy due diligence team knows what they are doing.” Even experienced due diligence staff may not have the right skills for every deal. It is important to bring in pertinent expertise to fully analyze a given opportunity, especially for adjacent markets, new geographies, and unfamiliar technologies…
M&A is a complex process that requires significant and diverse skills and resources to execute well. By being aware of the trap these common fallacies and self-deceptions present, teams can design and execute an M&A process that is more effective and yields outcomes that consistently create rather than destroy value.

Author Profiles:

Barry Jaruzelski is a partner with Booz & Company based in Florham Park, N.J., and the leader of the global engineered products and services practice. He specializes in due diligence, corporate strategy, and transformation of core innovation processes for high technology and industrial clients.
Marian Mueller is a principal with Booz & Company based in Florham Park, N.J. He serves industrial and automotive clients as well as associated financial investors by focusing on organic growth, mergers and acquisitions, organizational design, emerging market growth, and portfolio management.
Peter Conway is a senior associate with Booz & Company based in Chicago. He specializes in M&A due diligence and organic growth strategy, as well as helping clients develop the capabilities required for each.
Also contributing to this article were Booz & Company senior associate Prashant Vishnupad and associates Michael Zarrilli, Tushar Kanungo, and Abhishek Jha.

Five Things You Should Stop Doing in 2012

2011-12-16T14:52:00.002-06:00

Image via Wikipedia

Harvard Business Review
2:55 PM Thursday December 15, 2011
by Dorie Clark
I recently got back from a month's vacation — the longest I've ever taken, and a shocking indulgence for an American. … The distance, though, helped me hone in on what's actually important to my professional career — and which make-work activities merely provide the illusion of progress. Inspired by HBR blogger Peter Bregman's idea of creating a "to ignore" list , here are the activities I'm going to stop cold turkey in 2012 — and perhaps you should, too.

Responding Like a Trained Monkey. Every productivity expert in the world will tell you to check email at periodic intervals — say, every 90 minutes — rather than clicking "refresh" like a Pavlovian mutt. … [Spending] a month away — and only checking email weekly — showed me how little really requires immediate response. In fact, nothing. A 90 minute wait won't kill anyone, and will allow you to accomplish something substantive during your workday.
Mindless Traditions. … In the moment, not fulfilling an "obligation" (like sending holiday cards) can make you feel guilty. But if you're in search of professional advancement, is a holiday card (buried among the deluge) going to make a difference? If you want to connect, do something unusual — get in touch at a different time of year, or give your contacts a personal call, or even better, meet up face-to-face. You have to ask if your business traditions are generating the results you want.
Reading Annoying Things. I have nearly a dozen newspaper and magazine subscriptions, … But after detoxing for a month, I was able to reflect on which publications actually refreshed me — and which felt like a duty. … I'm weeding out and paring down to literary essentials. What subscriptions can you get rid of?
Work That's Not Worth It. Early in my career, I was thrilled to win a five-year, quarter-million dollar contract. That is, until the reality set in that it was a government contract, filled with ridiculous reporting mechanisms, low reimbursement rates and administrative complexities that sucked the joy and profit out of the work. …These days, I'm eschewing any engagement, public or private, that looks like more trouble than it's worth.
Making Things More Complicated Than They Should Be. … As Eric Ries points out in his new book The Lean Startup , developing the best code or building the best product in the world is meaningless if your customers don't end up wanting it. Instead, test early and often to ensure you're not wasting your time. What ideas should you test before you've gone too far?

Eliminating these five activities is likely to save me hundreds of hours next year — time I can spend expanding my business and doing things that matter. What are you going to stop doing? And how are you going to leverage all that extra time?

Dorie Clark is a strategy consultant who has worked with clients including Google, Yale University, and the National Park Service. She is the author of the forthcoming What's Next?: The Art of Reinventing Your Personal Brand (Harvard Business Review Press, 2012). You can follow her on Twitter at @dorieclark.

Top Ten Reasons Why Large Companies Fail To Keep Their Best Talent

2011-12-15T15:11:00.002-06:00

Forbes

Eric Jackson, Contributor

Image via WikipediaWhether it’s a high-profile tech company like Yahoo!, or a more established conglomerate like GE or Home Depot, large companies have a hard time keeping their best and brightest in house. …

Yet, Yahoo!, GE, Home Depot, and other large established companies have a tremendous advantage in retaining their top talent and don’t. … Here’s my Top Ten list of what large companies do to lose their top talent :

1. Big Company Bureaucracy. This is probably the #1 reason we hear after the fact from disenchanted employees. … No one likes rules that make no sense. But, when top talent is complaining along these lines, it’s usually a sign that they didn’t feel as if they had a say in these rules. They were simply told to follow along and get with the program. No voice in the process and really talented people say “check please.”

2. Failing to Find a Project for the Talent that Ignites Their Passion. Big companies … usually don’t have people going around to their best and brightest asking them if they’re enjoying their current projects or if they want to work on something new that they’re really interested in which would help the company. … Top talent isn’t driven by money and power, but by the opportunity to be a part of something huge, that will change the world, and for which they are really passionate. …

3. Poor Annual Performance Reviews. You would be amazed at how many companies do not do a very effective job at annual performance reviews. … The impression this leaves with the employee is that my boss — and, therefore, the company — isn’t really interested in my long-term future here. … This one leads into #4….

4. No Discussion around Career Development. Here’s a secret for most bosses: most employees don’t know what they’ll be doing in 5 years. … However, everyone wants to have a discussion with you about their future. … If your best people know that you think there’s a path for them going forward, they’ll be more likely to hang around.

Image by learningexecutive via Flickr5. Shifting Whims/Strategic Priorities. … Top talent hates to be “jerked around.” If you commit to a project that they will be heading up, you’ve got to give them enough opportunity to deliver what they’ve promised.

6. Lack of Accountability and/or telling them how to do their Jobs. Although you can’t “jerk around” top talent, it’s a mistake to treat top talent leading a project as “untouchable.” … [Top] talent demands accountability from others and doesn’t mind being held accountable for their projects. Therefore, have regular touch points with your best people as they work through their projects. They’ll appreciate your insights/observations/suggestions — as long as they don’t spillover into preaching.

Image via Wikipedia7. Top Talent likes other Top Talent. … Many organizations keep some people on the payroll that rationally shouldn’t be there. … [Doing]exit interviews with the best people leaving big companies you often hear how they were turned off by some of their former “team mates.” If you want to keep your best people, make sure they’re surrounded by other great people.

8. The Missing Vision Thing. This might sound obvious, but is the future of your organization exciting? … What is the vision you want this talented person to fulfill? Did they have a say/input into this vision? If the answer is no, there’s work to do — and fast.

9. Lack of Open-Mindedness. The best people want to share their ideas and have them listened to. However, a lot of companies have a vision/strategy which they are trying to execute against — and, often find opposing voices to this strategy as an annoyance and a sign that someone’s not a “team player.” If all the best people are leaving and disagreeing with the strategy, you’re left with a bunch of “yes” people saying the same things to each other. You’ve got to be able to listen to others’ points of view — always incorporating the best parts of these new suggestions.

10. Who’s the Boss? If a few people have recently quit at your company who report to the same boss, it’s likely not a coincidence. …You’re better off trying to find another spot for them in the organization — or, at the very least, not overseeing your high-potential talent that you want to keep.

It’s never a one-way street. Top talent has to assume some responsibility as much as the organization. However, with the scarcity of talent — which will only increase in the next 5 years — Smart Organizations are ones who get out in front of these ten things, rather than wait for their people to come to them, asking to implement this list.

Five New Management Metrics You Need To Know

2011-12-14T13:52:00.005-06:00

Image via CrunchBase Forbes

12/13/2011 @ 10:58AM |128,876 views

James Slavet, Greylock Partners
This is a guest post from James Slavet of venture firm Greylock Partners. Slavet’s investments include Coupons.com, Groupon, One Kings Lane and Redfin. Greylock Partners has invested in Facebook, LinkedIn and Pandora..

…“If you can measure it, you can manage it” is a business saying that goes way back. … Regardless, most managers only measure outputs, not inputs… Similarly, most companies measure traffic, revenue or earnings, without considering how to improve the company at an atomic level: how to make a meeting better, or an engineer more productive.

Here are five metrics that great teams should measure:

Image by Jordanhill School D&T Dept via FlickrMetric 1: Flow State Percentage

Jobs that require a lot of brainpower—software programming for instance—also demand deep concentration. You know that feeling when you’re “in the zone,” … That is flow, a term coined by psychologist Mihaly Csikszentmihalyi. Unfortunately, most of us are constantly interrupted during the day … Studies have shown that each time flow state is disrupted it takes fifteen minutes to get back into flow, if you can get back at all. And programmers who work in the top quartile of proper (i.e. uninterrupted) work environments are several times more productive than those who don’t.

Ideally … knowledge workers can spend 30% – 50% of their day in uninterrupted concentration. Most office environments don’t even come close. To get started, ask your engineers to track for a few days their personal flow state percentages: how many hours each day are they in flow, divided by the number of total hours they’re at the office. And then brainstorm ways that the team can move this number up. … Tom Demarco has written insightfully on the topic of flow.

Image by Wesley Fryer via FlickrMetric 2: The Anxiety-Boredom Continuum

Years ago, … [an] instructor said something that really stuck with me. He said that his goal was to keep all of his students in the pocket between boredom and anxiety – but closer to anxiety. In other words, we shouldn’t be so overwhelmed that we break down and give up, but we also shouldn’t be coasting either. …

… Star performers can get bored easily, and often function best when they’re expected to rise to great challenges. You want expectations to be high, but not completely overwhelming. With this in mind, check in with your employees periodically … If they have low energy, or are showing up late and leaving early, they may be bored. If they’re responding to small setbacks with anger or frustration, or getting sick a lot, they may be pushing too hard.

Metric 3: Meeting Promoter Score
…[A] one-hour meeting of six software engineers costs $1,000 at least. …Nobody tracks whether meetings are useful, or how they could get better. And all you have to do is ask.

In the last minute of a meeting, ask the participants to each rate from 1 to 10 how effective the meeting was, with one suggestion for making the meeting better. … Verne Harnish has some good ideas about running better meetings.

Metric 4: Compound Weekly Learning Rate
… Joi Ito wrote recently about “neotony”, the retention of childlike attributes in adulthood. This ability to learn is like the compounding interest on an investment: after two or three years, a relentless learner stands head and shoulders above his peers. … So try asking your team this question: how did you get 1% better this week? Did you learn something valuable from our customers, or make a change to our product that drove better results? As your team gets into a learning rhythm, you can review this as a group. 1% per week adds up.

Image via WikipediaMetric 5: Positive Feedback Ratio

…John Gottman …, a psychologist, is the author of “Why Marriages Succeed or Fail”.

In his research, he found that marriages that succeed tend to have five times as many positive interactions as negative ones. And when a couple falls below that ratio, their relationship falls down too.

Cover via AmazonThe same is true at the office, … Catch people doing good things. Never miss a chance to say something nice, even if you feel a little silly. Then when you have feedback on areas to improve, they‘ll really listen. It may be hard to manage to the 5:1 ratio at the office, but you should be mindful of the balance.

So, there you have it, 5 metrics that will never show up in the best companies’ financial statements or a Wall Street Journal article, but are the kinds of reasons those companies succeed. Tracking these five metrics isn’t glamorous. But it’s something everyone can do. And it really works.

7 Things Highly Productive People Do

2011-12-14T13:02:00.002-06:00

You have more important things to focus on than, um, focusing. Get back on track with these tips.
Inc.com
By Ilya Pozin | @ilyaNeverSleeps | Dec 13, 2011

Flickr/ryantron
…Want to be more productive and get your focus back? There are no secret tricks here… do one thing at a time. Stop multitasking—it’s just another form of distraction. ...
Recently I sat down with Tony Wong, a project management blackbelt whose client list includes Toyota, Honda, and Disney, to name a few. He’s an expert in keeping people on task, so I thought he’d be a good person to ask.
Here are his tips for staying productive:

Work backwards from goals to milestones to tasks.
… Break down the work into smaller and smaller chunks until you have specific tasks that can be accomplished in a few hours or less: Sketch a wireframe, outline an introduction for the homepage video, etc. That’s how you set goals and actually succeed in crossing them off your list.
Stop multi-tasking. No, seriously—stop. In fact, changing tasks more than 10 times in a day makes you dumber than being stoned. When you’re stoned, your IQ drops by five points. When you multitask, it drops by an average of 10 points, 15 for men, five for women (yes, men are three times as bad at multitasking than women).
Be militant about eliminating distractions. Lock your door, put a sign up, turn off your phone, texts, email, and instant messaging. …Go to a quiet area and focus on completing one task.
Schedule your email. Pick two or three times during the day when you’re going to use your email. …
Use the phone. Email isn’t meant for conversations. Don’t reply more than twice to an email. Pick up the phone instead.
Work on your own agenda. … Most people go right to their emails and start freaking out. You will end up at inbox-zero, but accomplish nothing. After you wake up, drink water so you rehydrate, eat a good breakfast to replenish your glucose, then set prioritized goals for the rest of your day.
Work in 60 to 90 minute intervals. Your brain uses up more glucose than any other bodily activity. Typically you will have spent most of it after 60-90 minutes. …So take a break: Get up, go for a walk, have a snack, do something completely different to recharge. And yes, that means you need an extra hour for breaks, not including lunch, so if you’re required to get eight hours of work done each day, plan to be there for 9.5-10 hours.

Ilya Pozin

Ilya Pozin founded his first company, Ciplex, at age 17. The digital marketing and creative agency caters to small businesses and start-ups. Ciplex, which has received the Inc.500|5000 award for two consecutive years, is headquartered in Los Angeles with offices in New York, Jerusalem, Serbia, and Germany. In 2010 Ilya hired a new CEO and moved into the President/CMO role so that he could focus on building new ventures. Originally from Russia, he currently resides in L.A. with his wife and daughter.

Getting Out of a Conversation

2011-12-14T12:28:00.001-06:00

Getting Out of a Conversation
Think Growth! newsletter
Bridget diCello

...While it's good fun to visit with friends and family, in the business setting, the professional who attends a good deal of events probably does so with a business agenda in mind. While still enjoyable, the event also turns into an opportunity to build current relationships, initiate new connections and discuss business opportunities. When you wish to accomplish those objectives, getting "stuck" in a non-strategic conversation can be a problem. ...It's important to make sure you see all those people important to your success this time of year.

Why do we get "stuck"?

There are a lot of people who are not good at getting into conversations, so they don't want to leave the security of the one they are in. If this is you...get out there, make eye contact, shake a hand, go get food or drink - but get comfortable getting into conversations.
Maybe the person with whom you are speaking does not think you have learned enough about them and their company yet! If this is you, this is a major networking mistake. Ask more questions about the other person to build a relationship. Talk less and you will be considered much more interesting.
The person who you are speaking with is not there to make multiple connections, just to socialize. If this is you, more power to you - enjoy yourself, but also open the door for the other person to leave if they are looking for more concrete results from their attendance at events.
You don't want to hurt their feelings by cutting off what they are saying. If this is you, realize that many people will speak to fill the silence, and may be relieved if you end the conversation.

How can you politely get out of a conversation?
Start with a thank you such as: It was good talking to you... I've enjoyed our conversation... I was surprised to learn (something you learned about them...)I hope your (vacation, business venture, event they mentioned) goes well...

And finish the sentence with something that says you are thinking about them. I will let you go mingle and meet some more of the attendees. I'd like you to meet... (Identify someone you want to introduce them to and take them there.)

Or finish the sentence with something you need to do.I'm going to go try that delicious looking food.I'm going to go get myself something to drink.If you'll excuse me, I see someone I need to catch up with.

There is no requirement that you stay in a conversation for as long as it can possibly last. Especially in a business setting, most people have objectives in their head for what they'd like to accomplish.

Have you ever felt "stuck" in a conversation?

Bridget DiCello is an expert in getting things done by effectively navigating difficult conversations. She inspires audiences to take action in the relationships most important to their business and their success. Bridget is the author of Opportunity Space: Purposeful Interactions, Energizing People, Producing Powerful Business Results.

For nearly a decade, Bridget has been working with executive teams and professionals using her powerful concept of Opportunity Space to transform their teams and their businesses.

WTE: Next-Generation Sustainable Energy

2011-12-01T14:09:00.000-06:00

Image by Colt Group via Flickrhttp://accessintelligence.imirus.com/Mpowered/imirus.jsp?volume=pow10&issue=6&page=78
WTE: Next-Generation Sustainable Energy
by Marco J Castaldi
Power Magazine July 2010

excerpts:
The typical question I hear after lectures and presentations on WTE technologies is, "Why aren't we doing more of this?" The simple answer I give is that preconceived notions, based on incinerator emissions before the MACT regulations, have held back development. But that is changing.

Image via WikipediaCurrently, WTE constitutes about 25% of the renewable energy produced in the U.S. That percentage has the potential to grow because only 7% of waste is converted to energy via WTE, 64% if landfilled, and the remaining 29% is recycled.

Encouragingly, WTE was identified among eight emerging green technologies in a report from the Davos World Economic Forum in 2009 entitled "Green Investing: Towards a Clean Energy Infrastructure."

Richard Branson on How to Avoid Common Startup Mistakes

2011-11-15T12:18:00.002-06:00

Image via CrunchBase

Entrepreneur.com
BY Richard Branson

Editor's Note: Entrepreneur Richard Branson regularly shares his business experience and advice with readers. What follows is the latest edited round of insightful responses. …

Q: What are some of the most common mistakes entrepreneurs make when starting out? -- John Gachiri

A: Making mistakes is part of the process of building a company; quickly recovering from them is what's most important. …

But your way forward is not entirely uncharted: When you notice an opportunity that has never occurred to anyone else, there are certain steps to turning your vision into reality. You must formulate an innovative business plan, find funding, hire the right people to carry out the plan, and then step back from your role in the business at exactly the right moment.

Step 1: Stay on Target
A mistake often associated with the first step is signaled by an entrepreneur's inability to clearly and concisely convey his idea. You have to be able to generate buy-in from investors, partners and potential employees, so nail down your "elevator speech" -- what you would say if you ran into an important potential investor in an elevator. Try using a Twitter-like template to refine the essence of your concept into just 140 characters. Once you've done that, expand your message to a maximum of 500 characters. Remember, the shorter your pitch is, the clearer it will be.

An associated error is lack of focus. ... Clearly define your goals and strategies, then establish a timeline. Don't let the other possibilities or hazy dreams distract you from achieving your goal.
Getting too far ahead of yourself is also dangerous. If your product or service is still on the drawing board, don't get sidetracked by plans for future versions. As a general guideline, looking two or three years ahead is best, but the nature of your business and feedback from your investors will help you determine just how far ahead you should plan.

Be flexible, because just as lack of planning can be a problem, adhering blindly to your plan is a surefire way to steer your company off a cliff. A successful entrepreneur will constantly adjust course without losing sight of the final destination.

Step 2: Be Realistic About Costs
Don't shortchange your start-up when estimating the funds you will require -- you'll just diminish your chances of success. Keeping your expenses under control is vital, but don't confuse capitalization with costs. …

Step 3: Hire the People You Need, Not the People You Like
As tempting as it may be to staff your new business with friends and relatives, this is likely to be a serious mistake. If they don't work out, asking them to leave will be very tough.

When Virgin starts any new business, we always hire a core team of smart people who already know the industry and its inherent risks. … One of your goals should be to find a manager who truly shares your vision, and to whom you can someday confidently hand the reins so that you can carry out the next step.

Step 4: Know When to Say Goodbye
A great entrepreneur knows when the time has come to leave the CEO role. It's seldom easy, but it has to be done: few entrepreneurs make great managers. …

Stepping back doesn't mean turning your back on your business. …

Image via CrunchBaseImage via CrunchBaseFounders shouldn't hesitate to re-insert themselves into their businesses when necessary -- look at Larry Page, who temporarily returned to the CEO role at Google in April. That said, I had to laugh when I heard this news, wondering how many managers at Virgin businesses had thought, "Wow, I hope this doesn't give Richard any ideas."

FAQ: What the new U.S. crowdfunding bill means for entrepreneurs

2011-11-15T11:25:00.002-06:00

Image via CrunchBase

Scott Edward Walker is the founder and CEO of Walker Corporate Law Group, PLLC, a law firm specializing in the representation of entrepreneurs.

Last week, the U.S. House of Representatives passed a crowdfunding bill that will allow startups to offer and sell securities via crowdfunding sites and social networks. If passed by the Senate and signed off by the President, the bill will become a law, giving entrepreneurs new options for raising money for their companies. …

What is crowdfunding?

As the term suggests, crowdfunding is funding from a crowd of people; that is, many people provide small amounts of money to finance something. Crowdfunding has its roots in charitable causes, including the advent of microfinancing …

Can startups use crowdfunding now?

Under current laws, startups may not sell stock or other securities through crowdfunding sites or social networks… They may, however, accept donations.
This is because of applicable federal securities laws ... The laws include the following:

A prohibition against “general solicitation” — which means that a company may not offer or sell securities unless there is a substantive, pre-existing relationship between the company (or a person acting on its behalf) and the prospective investor. (See “Can I Raise Money For My Startup Via Twitter?”)

Disclosure and state law compliance requirements if the investors are not “accredited investors” — which usually makes the offering too costly and onerous. (See “Ask the attorney — securities laws.”)

A requirement that any intermediaries (including websites) must be registered with the SEC as a “broker-dealer” in order to legally accept any transaction-based compensation in connection with the sale of securities. (See “Finder keepers could be losers, weepers”).

What will the new crowdfunding bill do?

Basically, if this new crowdfunding bill becomes a law, all of the foregoing prohibitions and requirements will be lifted, and a startup will be able to sell securities through crowdfunding sites like Kickstarter, or social networks like Twitter or Facebook, so long as the company (and its intermediary, if applicable) comply with the bill. According to the bill, the company will have to meet these key provisions:

The company may only raise a maximum of $1 million, or $2 million if the company provides potential investors with audited financial statements.

Each investor is limited to investing an amount equal to the lesser of (i) $10,000 or (ii) 10% of his or her annual income.

The issuer or the intermediary, if applicable, must take a number of steps to limit the risk to investors, including (i) warning them of the speculative nature of the investment and the limitations on resale, (ii) requiring them to answer questions demonstrating their understanding of the risks, and (iii) providing notice to the SEC of the offering, including certain prescribed information.

Are there any downsides to crowdfunding for startups?

Yes, there are several key downsides that you need to be aware of before jumping into crowdfunding.
First, startups must understand that minority stockholders have certain significant rights under state law, including voting rights, the right to inspect the company’s books and records, the right to bring a derivative claim on behalf of the company, and certain protections against oppression by the controlling stockholders. …
Second, having hundreds of stockholders is an administrative nightmare and will be time-consuming and costly. …
Third, startups will likely have difficulty raising funds from VCs and other sophisticated investors if they have hundreds of unsophisticated stockholders. …

What’s next?

Now we wait for the U.S. Senate, … The White House supports the House bill, so upon reconciliation, it will be signed into law. Then entrepreneurs will have a new option to consider when raising money for their startup.

About the Author, Scott Edward Walker

Scott Edward Walker is the founder and CEO of Walker Corporate Law Group, PLLC, a boutique corporate law firm specializing in the representation of entrepreneurs. Scott has 15+ years of broad corporate law experience, including nearly eight years at two prominent New York City law firms. He has built a strong team of lawyers, with offices in Los Angeles, San Francisco and Washington, D.C. You can follow him on Twitter as @ScottEdWalker or check out his blog.

Fat Replaces Oil For F-16s As Biofuels Head To War

2011-10-18T13:33:00.001-05:00

Fat Replaces Oil For F-16s As Biofuels Head To War
Financial Advisor magazine

(Bloomberg News) Biofuels face their biggest test yet -- whether they can power fighter jets and tanks in battle at prices the world’s best-funded military can afford.

The U.S. Air Force is set to certify all of its 40-plus aircraft models to burn fuels derived from waste oils and plants by 2013, three years ahead of target, Air Force Deputy Assistant Secretary Kevin Geiss said. The Army wants 25 percent of its energy from renewable sources by 2025. The Navy and Marines aim to shift half their energy use from oil, gas and coal by 2020.

The military’s drive to cut dependence on oil, coal and gas goes beyond biofuels. It’s developing wind and solar farms to power U.S. bases and expanding the use of renewables into combat zones such as Afghanistan, where a study last year showed one Marine is killed or wounded for every 50 fuel and water convoys.

Under a 2005 law, federal government facilities must source at least 5 percent of their electricity from renewable sources in 2010-2012, and at least 7.5 percent afterward.

Image via WikipediaPresident Barack Obama on Aug. 16 announced the Navy and Departments of Agriculture and Energy would each plow $170 million over three years into the commercial development of biofuels, with the aim of generating at least as much in private investment. The Navy aims to ramp up its biofuels use to 3 million gallons in 2016 from 900,000 gallons next year.

10 Mistakes Growing Companies Routinely Make

2011-09-29T14:40:00.002-05:00

Forbes
Martin Zwilling, Contributor
I provide pragmatic advice and services to entrepreneurs and startups.
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9/28/2011 @ 2:04PM |1,936 views

I’ve been advising and mentoring startups and growth companies for years, … for the sake of growth and survival. When you try new things, you make mistakes, ... Smart companies learn from their own mistakes, but some don’t pay enough attention to other people’s mistakes. …[Here] are some common mistakes that seem to happen routinely:

1. Wait until your company is up and growing before you formalize it. …The simple answer is to do something, and start simple. In almost every state, you can incorporate as an LLC with a minimal effort, and a cost in the hundred dollar range. This step shows everyone you are serious, and limits your liability on any mistakes. It also forces you to pick a name for your company and put other intellectual property stakes in the ground. It’s not that hard to change later to a C-Corp.

Image via WikipediaCompany and product naming may also seem simple, but should be a key early effort, because mistakes can be very costly. You may recall the Chevy Nova, a compact car from GM. Pundits in Latino countries quickly pointed out that the name, ‘no va’ means ‘does not go’ in Spanish. Professional advice in this area is highly advised. Cultural and religious implications must be very carefully considered.

2. Rely on informal agreements with partners. You may all be friends, or spouses, today, but things do change quickly in the stress of a growing company. The same principles apply to strategic partners. …

3. Quick to hire and slow to fire. … The message here is that if you don’t know exactly what help you need, you probably won’t get it. … On the other end of the process, don’t hesitate to pull the trigger fast when a new hire isn’t working, but don’t forget to be human and follow all the steps. Carrying a non-performing employee probably triples the costs, since you are paying two people to do the job, and at least one other is de-motivated by the inequity.

4. Only hire people who like you or think like you. … Look for the thoughtful challenge to your ideas, and practice active listening, when you are selling your vision. … Make it a rule to not fraternize with your employees, and choose your partners wisely.

Image via Wikipedia5. Be super-conservative on your cash needs. Double-check both the money you need before funding, and the size of investor funding requests. …You should buffer the first by 50%, and the second by 25%. Severe cash flow problems are a big mistake, and may not be recoverable. When you have people and their families depending on you for their paychecks, and you are strapped for money, there certainly won’t be any money for growth. Even if you can find someone willing to help, it may be a very expensive proposition. Cash is more important than profit.

6. Let your accountants manage the expenses. … In reality, the most important task of a every small company CEO is to review every expense with a miserly hand before the money flows out. Do not delegate this task. … The result of budget and expense overruns is not only lost growth opportunities, but lost credibility and lost support from investors and vendors.

7. Make all the decisions yourself. … For a company to grow, the team has to grow, and decisions must be delegated. …Even early in the startup process, you need someone like-minded but complementary in skills to help you with the startup plans. … Lastly, make good use of your Board Members. One or two “experts” who have “been there and done that” can head off many mistakes and suggest a calm recovery plan for the ones you make. …

8. Defining the strategy is a one-time process. Assume your initial strategy will be wrong. … Plan for strategy changes by scheduling an adjustment review every month. … Be sure to communicate changes to the team effectively and often, so it doesn’t look like you are making random changes.

9. Let the daily crisis keep you from the “most important” issues. It takes practice and effort to focus on the most important things first. In business, “most important” means time to market, customer service, low cost, and beating your competitors. It also means knowing when to delegate, when to rest, and reserving time for effective communication with your team. If you allow yourself to be driven by the crisis of the moment, you will lose the ability to set priorities and focus on goals. …

10. Ignore the mistakes of others. The biggest mistake of growing companies is failing to learn from the mistakes of others, or even from your own mistakes. … Wise people admit their mistakes easily, and move the focus away from blame management and towards learning. The …reality is that making mistakes is part of every successful growth effort. … But the one unforgivable mistake you should never make is to repeat a previous mistake. …

I am the Founder and CEO of Startup Professionals, a company that provides services to startup founders around the world. My background includes a 30-year track record as an executive in general management, computer software development, product management, and marketing. I'm now in "give-back mode" as a mentor to startup founders, and an Angel investor. My experience with investors includes roles on the selection committee of two local Angel groups, and working from the other side of the table with several VCs in Silicon Valley. In addition to blogging, I recently released my first book titled “Do You Have What It Takes To Be An Entrepreneur?” You can contact me directly at marty@startupprofessionals.com .
The author is a Forbes contributor. The opinions expressed are those of the writer.

Negotiating in a Nutshell

2011-09-15T13:29:00.001-05:00

Harvey Mackay Blog
by Harvey Mackay

Here are some ... rules of the road:

Never accept any proposal immediately, no matter how good it sounds.
Never negotiate with yourself. ...
Don’t raise a bid or lower an offer without first getting a response.
Never cut a deal with someone who has to "go back and get the boss’ approval." ...
If you can’t say yes, it’s no. Just because a deal can be done, doesn’t mean it should be done. ...
Just because it may look nonnegotiable, doesn’t mean it is. ...
Do your homework before you deal. ...
Rehearse. Practice. ...
Beware the late dealer. ...
Be nice, but if you can’t be nice, go away and let someone else do the deal. ...
A deal can always be made when both parties see their own benefit in making it.
A dream is a bargain no matter what you pay for it. ...
Don’t discuss your business where it can be overheard by others. ...
Watch the game films. ...
No one is going to show you their hole card. ... Clue: Since the given reason is never the real reason, you can eliminate the given reason.
Always let the other side talk first. ...Image by bartek.langer via Flickr

Trash To Cash: Mining Landfills For Energy And Profit

2011-09-08T13:30:00.002-05:00

Fast Company

BY Ben Schiller Wed Sep 7, 2011

A Belgian company is working on removing the raw materials from dumps, making both energy and building materials out of them, and then redeveloping the land.

[Image: Flickr user D'arcy Norman]

… Dating from the 1960s, the Remo Milieubeheer landfill at Houthalen-Hechteren is a typical dump full of industrial waste and household garbage--16.5 million tons of it in all.
Hardly the sort of the place to get anyone excited.

Except, that is, Patrick Laevers, director of Group Machiels, the Belgian waste management company that owns the site. Laevers has a 20-year plan to excavate the entire expanse, recycling about 45% of its contents, and converting the rest into electricity.

Eventually, … he hopes to turn the site back to nature. What's more, Laevers thinks Houthalen-Hechteren could be the first of many such projects around the world. “We really believe this concept is the future, and that we can all benefit from it,” he says….

Machiels has formed a joint venture with Advanced Plasma Power, a U.K. energy-to-waste company that converts the non-recyclable residue into a mixture of clean-burning natural gas--which generates electricity for 100,000 homes--and a building material called Plasmarok.

Machiels hopes the scheme, which has cost hundreds of millions of dollars, will be fully operational in 2014….

Rolf Stein, CEO of Advanced Plasma Power, says “the mind boggles at the potential” for landfill mining--and not just for energy and recycling. Several companies with landfill sites near cities are looking to reclaim land for property development, he says. …

The concept of mining landfills has been around for years. In the 1950s, the Israelis took soil enriched with waste and spread it over orchards to improve earth quality of the land. And, in the 1980s, some U.S. states farmed landfill material for use in incinerators.

But it has taken rising energy prices and higher demand for recyclables (notably plastic and metals), to make landfill mining viable for companies like Machiels. That, and government support: A key part of the funding for the Houthalen-Hechteren project is coming from renewable energy credits….

12 Things Happy People Do Differently

2011-09-07T12:46:00.002-05:00

Marc and Angel Hack Life Blog
August 30th, 2011
by Jacob Sokol of Sensophy

Cover via AmazonStudies conducted by positivity psychologist Sonja Lyubomirsky point to 12 things happy people do differently to increase their levels of happiness. These are things that we can start doing today to feel the effects of more happiness in our lives. (Check out her book The How of Happiness.) …

Express gratitude. – When you appreciate what you have, what you have appreciates in value. … We’re gonna have a hard time ever being happy if we aren’t thankful for what we already have.
Cultivate optimism. – …People who think optimistically see the world as a place packed with endless opportunities, especially in trying times.
Avoid over-thinking and social comparison. – Comparing yourself to someone else can be poisonous. … If you feel called to compare yourself to something, compare yourself to an older version of yourself.
Image via WikipediaPractice acts of kindness. – Performing an act of kindness releases serotonin in your brain. … What’s even cooler about this kindness kick is that not only will you feel better, but so will people watching the act of kindness. …
Nurture social relationships. – The happiest people on the planet are the ones who have deep, meaningful relationships. …
Develop strategies for coping. – How you respond to the ‘craptastic’ moments is what shapes your character. … It helps to have healthy strategies for coping pre-rehearsed, on-call, and in your arsenal at your disposal.
Image via WikipediaLearn to forgive. – … When you ‘hate’ someone, and you’re continuously thinking about it, those negative emotions are eating away at your immune system. …
Increase flow experiences. – Flow is a state in which it feels like time stands still. It’s when you’re so focused on what you’re doing that you become one with the task. …
Savor life’s joys. – Deep happiness cannot exist without slowing down to enjoy the joy. … It’s the simple things in life that can be the most rewarding if we remember to fully experience them.
Commit to your goals. – … When you’re fully committed to doing something, you have no choice but to do that thing. Counter-intuitively, having no option – where you can’t change your mind – subconsciously makes humans happier because they know part of their purpose.
Practice spirituality. – When we practice spirituality or religion, we recognize that life is bigger than us. We surrender the silly idea that we are the mightiest thing ever. …
Image via WikipediaTake care of your body. – … If you don’t have your physical energy in good shape, then your mental energy (your focus), your emotional energy (your feelings), and your spiritual energy (your purpose) will all be negatively affected. …

Jacob Sokol is committed to living an extraordinary life. Today he released “Living on Purpose – An Uncommon Guide to Finding, Living, and Rocking Your Life’s Purpose.” He also loves his mom dearly.

The FINAL Question

2011-09-07T10:06:00.002-05:00

The FINAL Question

By Adam Shaivitz

The following story is great:

During my second month of nursing school our professor gave us a pop quiz. I was a conscientious student and had breezed through the questions, until I read the last one: "What is the first name of the woman who cleans the school?"

Surely this was some kind of joke. I had seen the cleaning woman several times. She was tall, dark-haired and in her 50s, but how would I know her name? I handed in my paper, leaving the last question blank.

Before class ended, one student asked if the last question would count toward our quiz grade. "Absolutely," said the professor. "In your careers you will meet many people. All are significant. They deserve your attention and care, even if all you can do is smile and say hello."

I've never forgotten that lesson. I also learned her name was Dorothy.

--JoAnn C. Jones, Brockville Ontario

Get to know the people whose paths you cross, remember their names, and smile and say hello. ... We meet so many people in organizations who seem to have amazingly strong technical skills and abilities. How do the ones at the top separate themselves? It's often that they have developed the ability to relate to all the people they pass--from the mail room to the board room. A few basic applications from the lesson above:

Smile and say hello. ... Be the person who looks the other person in the eye and smiles with a friendly greeting. You'll be amazed at whom you'll meet, how great it will make you feel, and one day, one of those people will be able to help you.

Gatekeepers. Joel, a successful sales rep with 35 years experience uses the line with gatekeepers: "I know you're really in charge. I'd like to speak with the person who thinks he's in charge." All the time, we hear stories of deals that were won or heavily influenced because of a relationship with someone involved in the process other than the "decision-maker." People buy from people, and they would always prefer to do business with people they like.

Names. ... Multiple studies show that people who use names in conversation are generally seen as being more friendly and likable. Think about the last time someone remembered you and your name, when you didn't expect him or her to. It makes you feel important, because you were memorable to that person. Imagine how much more success you would experience if you made everyone in your network feel that important.

Close out a strong year by taking the initiative to greet people in your path and use their names. You'll be amazed at how you accelerate your performance.

***

Cover via AmazonAdam Shaivitz is a well known sales expert. He is the co-author of the best-selling book "Selling is Everyone's Business: What it Takes to Create a Great Salesperson." His company, Accelerate Performance, specializes in sales performance development programs for salespeople and sales managers. You can learn more about Adam at www.accelerateperformance.com or contact him at info@accelerateperformance.com.

The No. 1 Predictor of Startup Failure: Premature Scaling

2011-09-06T11:16:00.003-05:00

PEHub
Posted on: September 5th, 2011
Joanna Glasner

…The Startup Genome Project … published last week, crunches data from a set of more than 3,200 companies, seeking to identify the qualities that make startups most likely to either succeed or fail.
… The most consistent predictor of failure, …was a startup’s propensity to engage in premature scaling.

What is premature scaling? The authors define it as “focusing on one dimension of the business and advancing it out of sync with the rest of the operation.” For example, a startup may overspend too early on customer acquisition, hire too many employees, or focus too much on engineering at the expense of customer development. …

Researchers at the Startup Genome project, an eight-month-old effort supported by a collection of startup industry insiders and academics, also churned out some other interesting findings related to startup success. Insights include:

Pivoters do better: Switching a core facet of one’s business model, or pivoting, is sometimes the only way a startup can stay competitive in a fast-changing market. …

Image via Wikipedia… Researchers found startups that pivot once or twice raise 2.5 times more money, have 3.6 times better user growth, and are 52% less likely to scale prematurely than startups that pivot more than two times or not at all.

Co-founders scale faster: Researchers found solo founders take 3.6 times longer to reach scale stage compared to a founding team of two, and they are 2.3 times less likely to pivot.

Business and Technical Partners Outperform: Teams with one business and one technical founder raise 30% more money, have 2.9 times more user growth, and are 19% less likely to scale prematurely than technical or business-heavy founding teams.

Founders are ridiculously over-optimistic: Researchers found that startups need two to three times longer to validate their [market] than most founders expect. Startups that haven’t raised money, meanwhile, tend to over-estimate their prospective market size as 100 times bigger than it actually is.

Interestingly, while premature scaling is quite common, its opposite, which the authors call dysfunctional scaling, is quite rare. … Curious to see if you’re committing any of these startup sins? The Startup Genome Project has a tool for companies to test whether they are scaling prematurely.

3 Steps to Handling the Unexpected

2011-09-06T10:58:00.000-05:00

Image via Wikipedia

Harvard Business Review Blog
Peter Bregman

Peter Bregman is a strategic advisor to CEOs and their leadership teams. His latest book is 18 Minutes: Find Your Focus, Master Distraction, and Get the Right Things Done. To receive an email when he posts, click here.

Trying to predict the future is futile. Instead, be ready to respond. When the unexpected arrives at your door, do these three things:

Stop. If you feel pressured to make a decision, stop what you're doing. Give yourself a chance to think before acting.
Assess your options. Don't waste time wishing things were different. Think about the best outcome in the given situation, the information you have at hand, and the available resources. Then lay out your options.
Move forward. Based on your new assessment, make a decision and commit. Even if the decision isn't ideal, accept that it's the best under the circumstances.

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