Category Archives: Family Businesses

What Medium Do You Choose to Publish?

This week marked the announcement of Medium, the newest offering of Evan Williams and Biz Stone. These are the two “rock star” entrepreneurs who successfully created Blogger and Twitter. What they are trying to do with their newest venture is to redefine how and why content is published on the web.

In his first blog post about the new concept, Williams says Medium represents only “a sliver” of what he and his team have learned about publishing and the need for innovation. Blogger pioneered the premise that one could publish for free whenever and wherever desirable and create a reading audience. While the effort was revolutionary at the time, it has become commonplace as other substitutes and competitors have pursued the same target market. To “up the ante,” Williams thinks that collaboration and quality content that is crowdsourced are the new frontier:

“Lots of services have successfully lowered the bar for sharing information, but there’s been less progress toward raising the quality of what’s produced. While it’s great that you can be a one-person media company, it’d be even better if there were more ways you could work with others.”

Pinterest postures as a collaboration platform where favorite objects (mainly photos) from the Web can be saved and shared. Crowdsourcing quality content through reader votes is done in differing ways by Digg, Reddit, and Tumblr. Of these, Tumblr is the best of the bunch for publishing and sharing content. In the dual realm of curation and instant publishing RebelMouse, uses social-networking activity to create a curated page of content that can be organized by preference, and Svbtle is a simplified blog platform with a stripped-down design.

Matthew Ingram, writing for GigaOm, observes that “both of the things Evan Williams is famous for also looked either unnecessary or unimpressive, and in some cases both. Blogger was cool if you were a geek and wanted your own website, but it was far from obvious at the time that self-publishing was going to become something huge or crack open the media industry in a fundamental way. And Twitter looked so ephemeral (not to mention the ridiculous name) that many people dismissed it as a plaything for nerds that would never amount to anything. So as Aaron Levie of Box.net noted on Twitter, it doesn’t pay to underestimate Williams when it comes to this kind of thing.”

Ingram says that Medium looks like a combo of Pinterest & Tumblr, though not proficient at text contributions. Furthermore, he references Josh Benton of the Nieman Journalism Lab as saying that Medium subverts the notion of the author as the most important thing about the content. Medium is focused more on the value of the content, regardless of who is producing it or voting on it. Instead of a blog or collection showing whatever is the newest thing — the typical reverse-chronological format used by most blogs and publishing platforms — Medium sorts according to popularity (similar to Digg.) does (in a similar way, tools like Prismatic sort items based in part on the social activity around that content).

The social media culture demands more from publishing; BuzzFeed and the recently-launched Branch (also incubated by Obvious Corp.) are trying to become viable, popular solutions. Time will tell whether Medium is better than anything else out there. As Levie put it, don’t bet against it!

 

How To Grow Business All the Time

 

Whether your trade is producing software, computing tax liabilities, or manufacturing tangible goods, the success of your organization is going to be tied to strong sales (business development/ “bizdev”) performance over the long haul. Yet, few organizations are able to create a bizdev model that is sustainable and that constantly fuels the capital needs of the enterprise. Bizdev, however, is something that far too many senior executives (or, business owners in the SMB world) think must be acquired through osmosis or tenure. While I don’t actually believe that they think that, their actions would indicate otherwise.

Virtually everyone in North America has had a frustrating experience with bad sales execution. Either one has been on the end of trying to convince someone to buy, or the other end where we hate to be the recipient of “sales.” There’s much wrong with the selling models that are so pervasive that negative experiences abound on both sides of the equation.

Mahan Khalsa, who led the Sales Performance Group at FranklinCovey for a number of years, is one of my favorite authors on the subject of business development. His background included developing instruction for one of the old Big Eight CPA firms, then turning his attention to training almost 100,000 salespeople and consultants from all over the place in many different verticals.

Khalsa says, “Most professional sellers have good intent. They know manipulation and deceit hurt rather than build long-term sales success. They know that building trust is essential to both creating and capturing value. So they eliminate a lot of what would otherwise be dysfunctional—no surprise there. Yet most also consistently engage in actions that are not value adding–for them or for their customers. Even when great intent is present, there is a lot of room for improvement in eliminating dysfunctional behaviors.”

Both Khalsa and Neil Rackham find the tendency to jump to solutions before having completed the questioning process to be the bane of many folks involved in bizdev. I have observed noted rainmakers stumble in prospect meetings over this very subject. It’s as though the brain clicks into autopilot and, rather than seeking to understand, hubris takes over and the rainmaker is intent on being understood. Often, the solution that is recommended is premature–it doesn’t bear the wisdom of listening and consultative due diligence.

“Looking a little more holistically we could say the missing link is the ability to successfully blend excellent inquiry with excellent advocacy – to do a superb job of matching our story to the client’s story. Good inquiry is essential and most often the more undeveloped portion of the balance – and it is still only part of the equation. I’ve seen people get good at inquiry and still not be able to convert on advocacy.” (Khalsa)

When Khalsa left FranklinCovey, part of his intent was to transform the way business developers approach their work. He felt there was room for continuous improvement over an entire career. To that end, he began to wed together the twin concepts of business development and change management, with a sprinkling of performance measurement. In order to see strong long-term results, he argues, there must be an environment supportive of continuous improvement and a repeatable process that can be practiced and refined. 

Edward Deming once said, “It is not enough to do your best. You need to know what to do and then do your best.” So the quality of the practice and application is as important as the quantity of practice – and the quantity is essential. Khalsa subscribes to this concept as it relates to bizdev, stating “What I find liberating and motivating about the research is that everything, repeat everything, we need to do in order to get really good at sales is learnable – if we are willing to practice. It doesn’t have to do with our DNA, our native IQ, our personality type or social style, our years of experience. If we are willing to engage in a high number of repetitions of quality practice we can become as great as we want to be. That’s powerful.”

A key factor in effective bizdev is the ability to build a trusted relationship with the other party. Khalsa firmly believes that trust can be built intentionally and that it is tied strongly to value and information flow. In fact, he would argue that anyone who has two can obtain the third. Fundamentally, a rainmaker will have to become consistently better at doing what is promised and establishing a culture where the other party feels safe to share meaningful information.

 

Jump Start Creativity For Growth

Matt May, who writes a blog for OPEN, recently described many businesses as having an entrepreneurial spirit that had gone “M.I.A.” He wrote of how established companies can become set in their ways, very resistant to change. It’s as though the status quo becomes hallowed and the perceived trouble of doing anything different keeps the organizations from innovation.

“As business begins to boom, the fight-to-survive instinct fades and the entrepreneurial spirit isn’t quite what it was when the company was a startup. Sometimes it’s completely M.I.A. More and more people seem to need more resources to get ideas implemented quickly. Eventually, the ability to flex, react and innovate is lost.

Addicted to Resources

But that’s not how the company began. Maybe it didn’t start in the proverbial basement or garage, but it certainly started with little of everything—money, space and labor. There was a goal, and a passion for reaching it. Those limits made the company more creative and resourceful than it is today. Today, the addiction to resources is blocking innovation.

The good news is that there’s a relatively simple (but not necessarily easy) fix. But before revealing it, it helps to physically experience what I’m referring to, because the complacency in question has a universal presence, no matter how creative or resourceful we think we are.

Greater Potential

Stand up, feet planted shoulder width apart, arms straight out at your sides, parallel to the floor, elbows locked. (Imagine Leonardo da Vinci’s sketch of the Vitruvian Man if you need a visual reference.)

Now, twist your torso all the way to right as far as you possibly can go. Look down your right arm and mentally mark your stopping point on the wall. Remember that mark.

Now, turn back around to face front. Now close your eyes and repeat the exercise, stopping when you think you’ve met your previous stopping point.

Now…go a little past it. Open your eyes.

Most people surpass their previous mark by a good margin, and are surprised when they do. The point is that we generally don’t know what our potential is until we put our capacity on trial. We don’t stretch the limits of what we are actually capable of. But every business needs to constantly stretch in positive ways to move the business forward, to remain relevant.

Embrace Limitations

The solution is to treat resource constraints the same way artists do. All artists work within the confines of their chosen mediums, and it’s the limits that spur their creativity. The canvas edge, the marble block, the eight musical notes—these are finite resources. It’s how we view and manage resource constraints that makes all the difference.

And that’s the key question: Are limited resources preventing innovation, or enabling it?

There’s only one right answer.

A team that doesn’t thrive on the challenge of limitations is a sure sign that big company sickness is lurking. It signals an inherent fear of failure in your company. And that spells danger for innovation, because most real innovation springs from failure and conflict. The bigger and more successful a company gets, the less they have tolerance for both. So they mismanage a valuable source of new thinking by adding a buffer zone: higher budgets, more layers and lower expectations.

Unfortunately, success usually isn’t what breeds the kind of thinking that produces the extraordinary results needed to add value and keep competitors at bay. In fact, success can often generate a defensive posture that discourages the very behavior that created it. It can absolutely stifle innovation.

Innovation—which is the specific tool of the entrepreneur—demands exploiting limits, not ignoring or lamenting them!”

Being able to create much out of little is a sign of innovation. When your company loses the will to break the mold, it’s a sign that you are becoming less competitive. Find ways to re-energize the creativity and risk-taking of your employees.

 

Lead Me – Don’t Manage Me!

 

“People don’t want to be managed. They want to be led. Whoever heard of a world manager? World leader, yes. Educational leader. Political leader. Religious leader. Community leader. Labor leader. Business leader. They lead. They don’t manage. The carrot always wins over the stick. Ask your horse. You can lead your horse to water but you can’t manage him to drink. If you want to manage somebody, manage yourself. Do that well and you’ll be read to stop managing. And start leading.”

-Printed by United Technologies Corporation in the Wall Street Journal

One of the most heated conversations we had in the MBA program at Elon (ranked #1 part-time program in the USA) was over the value of management versus leadership. One of our courses was in organizational leadership and many of the younger students did not enjoy the finesse and nuances of the subject matter. They wanted to stay in the realm of concrete, numbers driven topics wherein there is a clear cut “right” answer. Leadership, for people who have not held positions with substantial responsibility, is challenging to describe, pursue, evaluate, and articulate. Management, on the other hand, was easier for the cohort to articulate in terms of metrics and definitions that met with consensus.

Whether in class or on the job, very few people want to be managed per se, they would prefer to be led. Managing is a process better applied to resources rather than individual people. Even in our home lives, when we are trying to get our children to do the right thing, it is incumbent upon us as parents to inspire them to make good choices. Inspiration is one of the key results of leadership.

Cynthia Stewart, writing for the Lead Change Group’s website last week, made some keen observations about the dichotomy between management and leadership:

“One specific example of what I am talking about comes to mind that illustrates this perfectly.  In fact, I was speaking with a President of a company today and she mentioned the same example.  Most of us have been part of a United Way campaign.  In the early days, these campaigns were delegated to management to run.  Typically management would take the tact of talking to their employees about the importance of being a good citizen and helping to fund helping agencies so their patrons could have a hand up (effectively trying not to appear to strong arm you into giving so that the company goals could be met.)

Then, one year things changed.  The leaders asked for employee volunteers to lead the campaigns. Everyone couldn’t wait to show up to the next new event, and attendance and giving doubled and tripled.  You saw people showing their true talents, coming alive, doing things you had no idea they could do.  The fun quotient spiked, the giving exceeded goals, employee morale improved, and the new office stories were accompanied with more laughter.   Hmmm – no management in the picture.”

Stewart’s commentary reveals a gap in thought leadership. Many Millenials are misunderstood because Boomers think that they are too revolutionary and almost insubordinate. That’s because many in management are not leading them; they are trying to only tell them what to do. My experience with the younger generation is that they are in search of authentic leadership.

How can we individually and collectively make a commitment to leadership?

 

 

Add Value to Your Privately Owned Business

Most corporate governance articles, presentations, and conferences are focused on publicly owned businesses. With corporate and executive scandals galore occurring over the past few years, there have been outcries for better controls, systems, and oversight guidelines. Yet, the same emphasis and attention is grossly lacking in the privately owned business community. One of the areas in which governance best practices could be applied is in the realm of mergers and acquisitions. Nick Miller of Clayton Utz law firm in Australia offers some insights below for this unique situation:

Increasing the level of formal governance can assist in reducing risk, identifying issues that might emerge upon a sale and generally enhancing the credibility with which the business presents itself to potential buyers. Perhaps even more powerfully, governance is a means by which, both in fact and in perception, a business can present as less dependent on the involvement of its founders than it would without governance. This can add very significantly to value.

Many private business owners think that the absence of governance procedures makes them more flexible, more adaptable and more opportunistic. That may be so, but the benefits of that should be weighed against the benefits of formal governance when planning a sale. 

There are a range of ways to adopt some greater formality in governance:

  • without changing the make up of the board of a company, the company could implement a more structured system of monthly meetings. These may or may not be formal board meetings, but should nonetheless involve the directors and those who report into the CEO;
  • a company can set up one or more committees. These can be formal board committees or more informal, but they are set up to address areas of need, to bring in expertise and focus on how risk management can be improved and issues for the business addressed. Examples are an audit and risk committee, a brand development committee and an employee policies committee, to assist in developing those aspects of the business in readiness for sale. These committees might have outsiders on them and they might not, depending upon the need and the expertise available in the business;
  • an advisory board could be established. Properly structured, members of an advisory board will not carry director duties and liabilities and this can be a sensible stepping stone towards a more fully independent board;
  • one or more outsiders can be brought onto the board. This can be very beneficial, but it needs to be right for the business; and
  • governance can also be improved by developing appropriate governance policies and procedures.

Corporate buyers and private equity see many poorly organised privately‑owned businesses. They will take the opportunity to highlight the possible risks to them in undertaking an acquisition of a poorly organized or more risky business. Some investment in governance can dispel most of these apprehensions, and allow private business owners to defend the level of risk in the business and so achieve higher value for a seller. Nonetheless, formal governance should be introduced carefully, to ensure the owner’s ability to drive and control the business is not unduly impeded.

In summary, shareholder value is enhanced in privately owned businesses through better corporate governance. Opinions of value are enhanced by checks and balances, independent processes, and a decreased dependence on the founder(s). Make the necessary adjustments to your business. You will make better decisions, increase the market value of the business, and create an environment wherein others can grow in their roles and responsibilities.