Pieces of 8 Need to Become All of 8

Have you ever heard the phrase, “work on your business instead of in it?” Michael Gerber (he of the E-Myth book notoriety) popularized this concept if he didn’t invent the phrase. Gerber chastises business owners for trying to do everything instead of doing the strategic things that will grow the business. He points out that the “jack of all trades,” “chief cook and bottlewasher,” etc epithets are crutches and should not be celebrated. Instead, he recommends systems over personalities and methodologies in lieu of gut instinct. 

Many years after writing the E-Myth, Gerber is still speaking, writing, and training. A blog post earlier today at Inc.com addressed what he considers to be the 8 Essential Parts to a Business (And How They Work Together.) He begins by saying that one “must understand that a small business is a system in which all parts contribute to the success or failure of the whole:”Model T assembly

Like Henry Ford understood the relationship between the Ford Motor Car and the Ford Motor Company (which manufactures, sells and services the car), you must understand the connection between all the parts in your business and how your company relates to the world.

Here are the essential parts of your business:

1. Consumer

Perhaps you’ve spent your life working in an industry. You know all about that industry from the inside. But building a business requires going outside. You must consider your customer’s needs first and foremost.

2. Competitor

Every customer is being pursued by other companies in competition to yours. They are all making offers to solve the same problem your business solves. Your job is to analyze those solutions, and know how yours is better.

3. Channels of Distribution

There are numerous channels of distribution available to you, but you need to know which ones are most effective for your business. The channels you ultimately choose will determine your reach and your cost.

4. Media

How will you get the word out about your business? You could get on the news by doing something newsworthy, or by buying advertising. Get yourself out there as often as you can.

5. Financial

This involves capitalizing your new venture. Likely, your first steps will be bootstrapping–or financing through yourself and those you know. Down the road, investors may be a possibility, but all the pieces of your business must be running smoothly.

6. Strategic

The strategic part of your business is what happens inside it. They include Strategy, Marketing, Operations and Finance–the four essential functions in your business.

7. Tactical

The tactical aspect of your business overlaps into Marketing, Operations and Finance. This is the execution of the strategy that you have created.

8. Incremental

All the work done by the workers in your business falls into this category. The tactical part lays out the tactics, the incremental part performs them.

You can tell that Michael Gerber is no novice when it comes to entrepreneurial matters. He has a keen ability to cut through words and phrases that are over used, and therefore meaningless, to succinctly get a point across. His entire hypothesis is that a business is an organization of many individual parts that work together in processes not unlike the human body and its respective systems.

When one component part is malfunctioning or misguided, it affects the other parts. Collaboration, synergy, and harmony arise when we achieve coordination of effort. Such clarity masterfully improves operating performance!

 

Entrepreneur Faith – Future, Attitude, Improvisation, Timing and Help

Reading outside one’s usual list of publications, blogs, and websites can be very eye-opening. Perspective emerges as familiar subjects are addressed in differing ways. When worldview is, in fact, only hemispheric or nationalistic, it is incomplete to say the least. Asia is exciting in the business world today, as can be parts of Europe. One European publication draws my occasional attention: Entrepreneur Country.

Entrepreneur Country recently held a forum in, of all places, the Royal Institution of Great Britain. (Same location where the first Industrial Revolution began.)  Contrast this austere setting with the arrival of Madonna as a guest lecturer and you get the sense that this was not “business as usual!”

Writing about the event, Peter Cook commented that “the day was characterized by entrepreneurs telling real life stories of their hopes, fears, successes and failures.” below he shares some of his observations and take-aways, with a few musical references (Cook is the leader of the Academy of Rock) for good measure:

iTrigga(Much) discussion was .. around what entrepreneurs do to avoid burnout. Ed Bussey of iTrigga was a prime example, having come to the conference after an all night vigil at hospital on the occasion of his wife giving birth! He did however point out the importance of pressing the OFF button from time to time to avoid the possibility of crash and burn entrepreneurship.  Others talked of rituals and routines such as working out in the gym, taking forced holidays, running the London Marathon, going to the North Pole (that’s hardly chilling out!) and so on. Seemingly obvious advice, yet not always taken by busy entrepreneurs.

Several speakers also gave witness to the importance of maintaining naivety if you are to succeed as an entrepreneur. Madonna’s contribution to this area is via her blockbuster hit “Like A Virgin”, which translates to the need to treat each new business situation like it’s the very first time. In particular, Sir William Sargent of Framestore painted a picture of the importance of intuition, creativity and the ability to remain adaptive and flexible as your company grows, saying, “If I stand still for 12 months, I will be out of business 12 months later.”

Entrepreneur Country Founder Julie Meyer and Dr Mike Lynch (offered opening remarks.) Julie presented her ideas about entrepreneurship clearly, concisely and without apology for wanting to create an enterprise economy, which produces both economic and social benefit. Business gets enough hard knocks and we need to start seeing it as an engine of improvement, rather than an evil empire as it is frequently portrayed by Governments and a self-righteous public sector. Mike Lynch extended Julie’s strident start to the day by giving us some home truths on entrepreneurship:

“Without good marketing you can have something amazing and no one will know.  Marketing is not cheating”

“Avoid the myth of doing things properly”

Another speaker, Stephen Linnecar, suggested that we gotta have FAITH – Not an allusion to George Michael, but the summary of his presentation which focused on five factors which he regarded as key to success as an entrepreneur: Future, Attitude, Improvisation, Timing and Help. Improvisation featured strongly throughout the day, a point that resonated personally with me, having taught creativity, improvisation and innovation for the Open University MBA for 18 years. However, what impressed me most of all about the speakers at the event was a real and unusual sense of authenticity.  Truths were told about successes. Much more importantly, we gained an insight into mistakes and outright failures. It’s much more important for an entrepreneur to learn from their mistakes than their successes and many speakers were candid about their regrets. 

 

 

 

 

Run Your Business Better With Games For the Mind

Owning a business is not a game. Seemingly, playing games is also irrelevant to running a business. Yet, there are skills requisite to entrepreneurship that may require development through practice. Whether one struggles with memory, focus, recall, or eliminating distractions, there may be a game to help you strengthen your mental capacity.

PositscienceThere is a growing number of “brain games” that help with decision making and memory improvement. Lumosity.com, which makes games for these needs, reached 35 million users earlier this year. Joe Hardy, PhD and Vice President of Research and Development for Lumosity, believes brain games are ideal for business owners. “Owning a business is one of the most cognitively challenging jobs,” Hardy says.

Lindsay LaVine, writing for Entrepreneur.com, says that, “Business owners have to process information accurately, balance projects, switch between tasks quickly and efficiently, divide their attention among tasks, and remember customers’ names. We took a look at three popular brain game providers to find out what the buzz is about:”

Lumosity.com

LumosityThe largest provider of brain games, the site works to train your brain in five categories: speed, memory, attention, flexibility and problem solving. “Each exercise is designed to train a different cognitive function of the brain,” Hardy explains. The games are based on neurological research performed by researchers from various institutions, including Columbia University and the University of California-Berkeley.

Lumosity’s in-house team of developers creates games based on what research shows exercises various parts of the brain. For example, Memory Matrix requires players to remember which tiles appear in a matrix and recall the pattern from memory, which helps improve spatial recall and working memory. “Think of it as a personal trainer for your brain,” Hardy says. He recommends that users spend 10-20 minutes every day playing brain games, as opposed to spending two hours one day and skipping out on the rest. “It’s like going to the gym,” Hardy says. “The more training you do, the better. The goal is to create a habit that’s sustainable and keeps you engaged.”

Lumosity offers a free limited membership that allows users to participate in some games, while the paid membership provides full access to the site and tracks your BPI (Brain Performance Index, a measure of cognitive performance) progress over time. Paid memberships range from monthly to lifetime options ranging from $15 a month to $80 a year.

Positscience.com

Positscience logoPositscience offers brain training in five categories: attention, brain speed, memory, people skills and intelligence. (A new category, navigation, will be available on the site soon.) Posit Science games include enhancing a user’s ability to read facial expressions, from easy (happy or sad) to the more difficult (puzzled or embarrassed). Its games also help users improve facial recognition as well as matching names with faces and remembering facts about people you meet, an important skill in networking and business.

Posit Science has developed games in collaboration with researchers from nearly a dozen universities, including Yale and Stanford. You can try some of the games out for free without having to sign up. Posit Science offers memberships at $14 a month or $96 a year.

Cogmed.com

CogmedCogmed is designed to improve working memory to allow users to learn new skills in academic or professional endeavors. Users are encouraged to spend up to 30 minutes a day, five days a week on training exercises over a five week period. Training is only available through programs offered by accredited coaches who monitor user results and provide motivation. Many programs are supervised by doctors or psychologists who specialize in attention problems.

Prices vary according to the program selected and the professional coach’s fees. The program is best for people who have working memory issues caused by ADHD, anxiety in social settings, or adjusting quickly to new tasks. 

 

Leadership Mindsets to Foster Innovation

When lively conversations abound on the subject of innovation, invariably, the matter of culture emerges. Does the organization have a suitable culture to nourish innovation? If not, why not? Often, management is held up as a scapegoat for the lack of innovation. Karl Ronn recently said, “Companies that think they have an innovation problem don’t have an innovation problem. They have a leadership problem.”

Scott Anthony, a regular contributor to the Harvard Business Review blog and managing partner of Innosight, took note of Ronn’s recent comment. Anthony  had featured Ronn in The Little Black Book of Innovation, and considers him to be “thoughtful, widely read, a seasoned practitioner, and a great communicator.” Anthony wrote of him in a recent HBR blog post:

Ronn’s basic idea was that four decades of academic research and two decades of conscious implementation of that work have provided robust, actionable answers to many pressing innovation questions. Practitioners have robust tools to discover opportunities to innovate, design, and execute experiments to address key strategic uncertainty; to create underlying systems to enable innovation in their organization; and to manage the tension between operating today’s business and creating tomorrow’s businesses. Large companies like IBM, Syngenta, Procter & Gamble, 3M, and Unilever show that innovation can be a repeatable discipline. Emerging upstarts like Google and Amazon.com show how innovation can be embedded into an organization’s culture from day one.

Pixar innovationIn Building a Growth Factory, David Duncan and Anthony suggested why many others have not been successful: too many companies use point solutions to address a systematic challenge. They may offer an idea challenge, ideation session, growth group, corporate venturing arm or incentives for innovation…

(writes Anthony,) “None of these is bad, but point solutions don’t solve system-level problems. Duncan and I suggest working on four systems — a growth blueprint, production systems, governance and controls, and leadership, talent, and culture. It isn’t easy to do all of that, but it is what is required to really make innovation work at scale.” (continuing:)

Ronn agrees, but notes that the responsibility for such systemic work ultimately rests with a company’s leadership team. And it’s absolutely necessary. Research by Clayton Christensen, Rita McGrath, Richard D’aveni, and Richard Foster make very clear that we are in a new era where competitive advantage is a transitory notion. (McGrath’s forthcoming book is provocatively titled The End of Competitive Advantage.) Any executive that doesn’t make innovation a strategic priority, ensure there is ample investment in it, and approach the problem strategically is committing corporate malfeasance.

Further, leaders can’t just set the context and hope that innovation happens. Innovation is enough of an unnatural act in most companies (which were built to scale yesterday’s business model, not discover tomorrow’s) that it requires the day-by-day attention of the company’s top leadership team or it simply won’t stick.

The leadership challenge facing executives today is to balance today’s needs versus tomorrow’s. In the current environment, productivity and risk management are priorities. In the longer run, being able to anticipate market needs and adjust one’s go-to-market strategy are critical. Leaders must now be good at both to create and sustain competitive advantage. 

Anthony acknowledges that, to justify why innovation is a struggle, leaders mention factors such as “short-term pressures from investors, talent deficiencies, the challenge of implementing innovation-friendly rewards structures, the still fuzzy nature of innovation, and, in candid moments, their own discomfort with the different mental frames required to lead innovation.”

Most importantly, the paradigm shift needs to occur whereby the goal moves from being most innovative among a peer group of companies to being cutting edge like some of the upstart organizations known for redefining the playing field. 

Dissimilarity Creates Innovative Thinking

How often does your organization examine ways to apply a concept from one part of the business to an entirely different component? I’d like to suggest that you do it far more often. Many innovative ideas flow from simultaneously considering two thoughts that, on the surface, seem to have little connection. For instance, what do you think of design mixed with meeting planning? Dennis Shiao, Director of Product Marketing at INXPO and author of the book “Generate Sales Leads With Virtual Events,” thinks this juxtaposition is an interesting one. After watching a 60 Minutes episode recently that featured an interview with David Kelley, founder of both IDEO and Stanford’s d school, Shiao was inspired:

Overview: Design Thinking
The design thinking process can be broken down into three components: inspiration, ideation and implementation. To quote a design thinking article co-authored by Mr. Brown:

  • Inspiration: “Think of inspiration as the problem or opportunity that motivates the search for solutions.”

  • Ideation: “Ideation as the process of generating, developing, and testing ideas.”

  • Implementation: “Implementation as the path that leads from the project stage into people’s lives.”

Corporate events

Incorporating Design Thinking into Meetings and Events

I’ve (Shiao) taken a look at the tenets and methodologies of design thinking and considered how they could be applied to meetings and events. Let’s consider some.

Attend Your Own Event (Empathy)

Meeting and event planners should take off their “planning hats” and attend one of their events solely with their “attendee hats” on. That means that you can have no part in planning the event. Go through the entire cycle of registration, travel, sessions, workshops, social events, etc. Practice further empathy by understanding how fellow attendees are experiencing the event.

Deepen (and Broaden) Your Team Roster

Design thinking introduces the notion of “multidisciplinary teams,” in which people of assorted backgrounds (and schools of thought) ideate, iterate and collaborate. You need a group that creates divergent thinking, which, according to Mr. Brown of IDEO, “is the route, not the obstacle, to innovation.” I’d recommend adding folks from Finance, HR and Engineering. 

Where No Idea is a Bad Idea
If you make an early judgment on the quality of an idea, you may have just squashed a “germ” that would develop into a breakthrough. The ideation process is critical in creating the next breakthrough event. Instead, design thinking teaches you to build upon each other’s ideas, sort of like the “yes, and..” methodology in improvisational theater. 

Meeting and Event Prototypes
Recall that part of the ideation phase is “testing ideas.” It’s an iterative process in which you deploy a prototype, collect “real user feedback,” determine what you learned, then ideate on product refinements (repeating the cycle all over again).

Let’s say you’re planning next year’s 5,000 person sales kick-off meeting and you have innovative new ideas for it. Create a prototype using 50 sales people and actually implement those ideas in a “real prototype” (event). Determine what worked, make adjustments, then plan another prototype. When the “real thing” comes around, you’ll have a much better “product.”

This type approach is both novel and holds promise for adaptation to a variety of other tasks, disciplines and situations. What dissimilar business processes can be combined in a brainstorming session to help you approach your customers, employees, or suppliers differently? What may be the outcome of such crazy thinking? Does your culture support such “frivolous” exercises, or disdain them? While the temptation would be to apply the concept only to new product development, the value is cross-functional!