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Thursday, January 19, 2012

Training Yourself To See New Strategic Options


Fast Company (magazine)
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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. …


strategy
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.


English: Alexandra Kosteniuk at the Chess Clas...
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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. …
  1. 
    Image representing Hewlett-Packard as depicted...
    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.
  2. 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. …
  3. 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.
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6 ways to fail your business


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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.
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Wednesday, January 18, 2012

What I Learned From Steve Jobs [real deal]

Growing Your Empire newsletter

Guy Kawasaki, American venture capitalist and ...
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By Guy Kawasaki

Image representing Steve Jobs as depicted in C...
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.


Steve Wozniak - Apple Co-Founder
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 representing IBM as depicted in CrunchBase
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
 
English: Steve Jobs shows off the white iPhone...
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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.

***

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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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Friday, January 13, 2012

Why Bootstrapping Is As Over-Rated As Raising Money

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 TechCrunch
Ashkan Karbasfrooshan 
boot
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
English: Diagram of venture capital fund struc...
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 representing WatchMojo.com as depicted i...
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Editor’s note: Contributor Ashkan Karbasfrooshan is the founder and CEO of WatchMojo.  Follow him @ashkan.
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Thursday, January 12, 2012

The Business Case for Reading Novels

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

Cover of
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)

Jane Austen
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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.
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