Getting Entrepreneurs Unstuck

So many businesses start with grand visions and hopes, only to miss the mark along the way. In our home state of North Carolina, 26000 businesses are started each year; but, 23000 fail each year as well. Without getting into the dynamics of how many survive for three or five years, we can at least ask the question “why?” Why do so many businesses fail each year?

Mismanagement, making mistakes others have already made, inadequate capitalization, and poor knowledge of systems and process resources are all contributors to business failure. The reason many of these mistakes are made is the lack of a sounding board for many entrepreneurs–someone to whom they can turn for ideas, resources, and encouragement. For centuries, there were very formalized apprenticeship programs in many industries that helped new workers become business people. In modern times, we use the term “mentor” to describe someone who is willing to work with an apprentice.

Management of a business is tough work. Having a mentor can make a big difference. Some of the things a mentor can offer include:

  • Business strategy and planning to make sure their business is focused on a viable market with a winning product and/or service that has a competitive edge
  • Forecasting and financing ensuring that sales plans are realistic and that cash is well managed
  • Operational discipline and judgment to increase the chances of success by making fewer mistakes
  • Industry connections that can help accelerate the business and its operations
  • Start-up company experience that can instill the wisdom of what it takes to really start and manage an emerging business

Organizations like EntreDot and incubators like the Cary Innovation Center and REDii in downtown Raleigh are but a few of the many resources that smart business owners seek out. The value is in having someone on site who can walk and talk  you through an issue that is new to you. The “someone” is often one who has more experience in business, but can also be a peer in these incubator environments.

Getting “stuck” on a tough issue is okay; staying in that predicament can put jobs, ideas, and investments at risk of loss. Regardless of whether you live in a community that has ready providers of mentoring or have to seek it from elsewhere, it is vitally important to your success to get help. Becoming “unstuck” makes life more enjoyable, fuels the economy, and builds better communities. Best wishes!

Root Causes of Executive Failure

Smart leaders make dumb decisions. This statement should come as no surprise. The questions we should ask, though, are why? when? and how? By attacking the root causes and attempting to understand the character issues, we can “peel the onion” and see what is so potently wrong when poor decisions are made and executives fail.

Do you know a leader who sees himself and the company dominating its environment? If so, they collectively are set up for a fall. The basic fallacious assumption is that success in one domain can be infinitely translated into every other domain.

Similarly, the executive who treats the business as a private empire blurs the necessary distinctions between the personality and the entity. Beware the (wo)man who uses position to attempt to carry our personal ambitions. Those who see themselves as stewards of a resource as opposed to royalty seem to avoid this trap.

Know-it-alls are another type of failure waiting to happen. Those who feel they must look polished and do not invite the input of others suffer from hubris that is unhealthy. Being decisive without considering alternative views and related outcomes is not a sign of executive skillfulness.

Slash & burn is not just a rain forest dangerous practice–it is also bad for a talent management policy. We’ve all seen mobster movies where opposing viewpoints are literally snuffed out. When an executive does this inside a business, it shows a lack of appreciation for objectivity. More than likely, decisions will be weaker and mid-course corrections will be missed.

Is the top executive an attention hog? Choosing appearance over substantive management can be a fatal character flaw. Hyper-focus with image can also mean that underlying, important issues like financial performance are not getting the attention they should.

Trying to vision-cast one’s way around a hurdle instead of approaching it head-on is almost always a huge mistake. Shrugging off a problem or pretending it is inconsequential shows immaturity and a lack of executive responsibility. It’s more than okay to admit a problem exists–in doing so, we invite others to help us resolve it and the organization benefits.

Fascination with the past as opposed to staying in the moment is a final way executives doom their organizations to failure. As we’ve heard it said, “what got you here won’t get you there!” Embracing innovation is a good habit of top leaders.

Sydney Finkelstein addresses many of these issues in greater depth in Why Executives Fail, a book published a few years ago that examines case studies of companies that once thrived and then took a nose dive. Similar to Good to Great in its treatment of lessons learned, the book highlights problems with mindsets, information management, and habits.

 

How Do You Show Value to Customers?

Most companies that I know are frustrated that they cannot get customers to appreciate what they do. The real rub lies in not being able to monetize what we believe sets us apart from the competition. Unfortunately, we find ourselves competing on unfavorable terms instead of the ones we’d prefer. How does one go about turning this scenario around to one that delivers superior results via customers who see the value in what is being offered? How do you show value to customers? Can you demonstrate savings in dollars, time, or some other resource? If so, you have a competitive advantage!

Take the time today to write out how your company makes the customer’s life easier, produces more opportunity, or decreases their costs. Do you provide complimentary training? As a result of doing business with you, do they have better control over quality–how can that be measured? Is your logistics solution extra convenient for them–what is that worth to them? How about the way you package your product–any advantage for them/how can you quantify it? All of these factors are significant to the customer if you find a way to communicate the value.

The story is told of a supplier to the apparel industry who found a way to get their customers to articulate the value proposition. As a provider of zippers, trim, buttons, lining, hangers, and garment bags, H.B. Trim was looking for a way to communicate how valuable it was versus the competition. Ross Nadelman, the owner, told his consultant “I do everything better than my competition. I offer more. I understand the business more, and I can deliver better.” Do you feel this way about your business? Guess what? None of this matters if you don’t find a way to monetize your value to the customer! What Ross did to turn the corner was to send a cover letter and an attachment to two prospects he’d been trying to reach for years. In the letter, he listed his company’s competitive advantages; the attachment was a worksheet that he asked the prospects to fill out estimating their current costs and anticipated savings if they did business with him. Not only did he pick up the two prospects, but enough others to increase his business by 60% Would you like to increase your business by 60%?

If you are not in the manufacturing world, but perhaps in a services business, then it is likely that your differentiation will be slightly different. Speak to your customers/clients about information–how you collect, manage, and wield it to their advantage. If you are doing a lot of work for small to medium sized businesses, they often lack access to key statistics and trends for their industries. You have some of that information just from your interaction with them, their competitors, and peers in related industries. All you have to do is summarize what you know and share it to show how much you care. The next step would be telling a new prospect that you will help them avoid costly mistakes or find new opportunities because of what you share by way of information. Be ready with a story of how an existing customer benefited from your thoughtfulness. This is how you build an unassailable customer base!

Pick 7 Marketing Trends for 2012

Lists can be so helpful for us to get our minds around the critical messages for a given subject. In a deliberate play on words, I wanted to juxtapose a “Pick 7” lottery concept with a “7 Marketing Trends” informational piece. Collectively, we can agree that any “list” is one person’s opinion and that it really is a “luck of the draw” as to whether applying someone else’s  recommended best practices will make a difference in your given market. Yet…simply attacking the subject matter sharpens our minds, encourages us to support our strategies with sound arguments, and generally makes for better decision-making! So…the list:

  • Location, Location, Location: Check-ins match message with timing
  • People are People: Listen, observe & match individualized message to feedback
  • Not One Size Fits All: Designing for multiple devices
  • Customers for Life: Customer retention through engaging multiple times
  • Behavior Speaks: Connect individuals based on how they interact with you
  • “Mocial”: Email, mobile, local & social
  • Dynamic Email: Static content is passe’; modernize!

With help from the folks at Silverpop, we hope to help you understand what’s at stake in each of these trends so that you may consider the impact to your marketing strategy and implementation. Location: think Facebook, Twitter & Foursquare–it’s important to help your customers share your brand with their friends. By combining incentives for people to let others know they frequent your business with intention in making it easy for your story to be told via email or social networks, you are able to create a user experience that keeps them coming back.

People: King Arthur Flour found that, by simply including quotes from customers in its emails, it was able to increase open rates, orders, and sales by 30%. What are you doing to move away from a generic message to a highly tailored one with a human element that is more engaging?

Device-specific: Smartphones and tablets are overtaking the computer world. Design with this in mind. If someone’s finger has to do the “clicking,” then spread clickable items out from one another and create “buttons” that are easy to use. Think about what you do/don’t like about viewing a website on a smaller device; make changes accordingly.

Retention: We’ve always heard that the customers we already have are the best ones and that soliciting a new one takes a ton of effort. Whether you are emailing those who have abandoned their online shopping carts, or reaching out with special campaigns to those who don’t usually open your emails, it’s important to think about getting as high a return as possible on the relationships we already have.

Behavior: Create a marketing database to track who visits your website, blog, online store, etc, what they do while there, whether they share your brand, and so on. Use tools like CRM to help track and segment your targets into smaller groups to whom you can send very tailored messages. Observe the response to the custom communications and refine what you send out.

“Mocial”: is a phrase used at Silverpop to explain the inter-connectedness of media and communications. What the connectivity means for you as a marketer is that thought must be given to how messages flow across platforms, how brand leadership can be stimulated and captured, and how to get users to check you out in as many formats as you are active.

Dynamic email: That should be enough to say on this subject, but some of us are thick-skinned (and -headed!) Consider: Air New Zealand sends customized pre-flight emails to passengers with information about booked destinations, crew members who will be serving on the flight, and social media buttons to share cultural articles, photos, videos etc about the local weather, itinerary or other matters of interest.

Challenging to think about? You bet! Determine to become a stronger marketer in 2012.

JTECH Your Way to a True Competitive Advantage

First things first: what/who is JTECH? It’s the former name of a restaurant paging company that eventually became a subsidiary of MICROS Systems. It was founded by a couple of guys from Florida who owned a great restaurant that had too many “walkaways”–people who were not willing to endure the wait for a table seating. In the old days (19990s, mind you!), patrons of their restaurant (like diners in most other establishments) used to have to wait by the hostess stand for an indeterminate amount of time until a table became available. By providing the electronic pager, these guys gave their patrons the freedom–and most importantly, peace of mind–to leave the front door area, relax, and look forward to a sumptuous meal.

But, what of the “true competitive advantage?” To even throw the phrase out suggests that false competitive advantages exist! Don’t they? You be the judge. How many businesses do you know of where price is the main negotiating point in the sales cycle? Unfortunately, way too many. You see, when price becomes the only distinction between a business and its competition, then it is not long before that business enters into a death spiral of decline. At the point that price is all that separates one business offering from another, the battle for customers is lost.

What, then, is a legitimate means of creating a distinctive in the marketplace? Many will argue that Service separates them from others. Alternately, Quality (products) or Experience (Services) are touted as key concepts that persuade one to buy from us versus them. Yet, I have seen over and over (and over !) where these are just words in many situations, without anything to back up the claim–OR anything that is being said that the competition cannot also say!

The original owners of JTECH ended up leasing their restaurant to others because they had found a much better opportunity. It was a great opportunity because and only because they had found a way to monetize the value they had created for restaurants and their customers. True competitive advantage is objective, quantifiable, uniquely claimed, and not a cliche’. (With due thanks to Jaynie L. Smith.)

What was the statement that JTECH developed to carve out such a market -leading position? Of the 50 largest chains who use paging, 100 percent use JTECH! Obviously, they were not able to make this claim Day One. It was something that was earned, one customer at a time.  What absolutely amazes is the recurring bad habit in many companies (and agencies) of developing marketing messages without customer input. Existing customers will tell you why they selected you, what you do better than the competition, and what it would take for someone else to snatch the business away. If you don’t know what your customers would say for each of these categories, you are tuned out. If tuned out, you have no strong competitive advantage positioning!