Apologies to Rodney

Posted on March 26, 2017 by anentrepreneurswords

Successful entrepreneurs display many different leadership traits. But there’s at least one aspect of leadership that an entrepreneur cannot just automatically possess – instead it must be earned. Of course I’m talking about Respect. Many believe that respect should be granted simply due to a station in life or perhaps a position that is held. Certainly there may be some truth to this but true respect is not something that is simply bestowed. Yes, the Queen of England, the President of the United States and other heads of state command respect. But it’s for the office and not necessarily the individual.

Rodney Dangerfield made a living as a comedian with his trademark phrase, “I don’t get no respect.” With apologies to Rodney, respect is no laughing matter. It should be viewed with the utmost of seriousness because it can be a life or death factor for businesses and organizations of all sizes. When CEOs misbehave not only is the individual disgraced but the company he or she represents is shamed as well. On September 28, 2015, the EPA announced an order to recall Volkswagen cars built from 2009 – 2015 due to software that was programmed to cheat on emissions testing. Two days later the company admitted to this malfeasance and on September 23 the CEO resigned. As of this writing, Volkswagen faces enormous financial penalties and long-lasting reputational damage that would bankrupt smaller firms. Rebuilding the respect of the public for the VW brand will be a long and arduous process. And who knows if the former CEO will ever again be truly respected.

Earning respect doesn’t just happen. There is an intentional process that is required and it consists of multiple facets. From my perspective it all starts with integrity. Do we always do the right thing even if it’s seemingly detrimental to our best interests? And do we always do the right thing even when no one is watching? Integrity cannot be turned on and off on a whim. Either it’s there or it’s not. Our team members, customers, suppliers – everyone is watching. If we keep our moral compass centered we will have taken a giant step toward the pinnacle of respect.

Hand-in-hand with integrity is authenticity. It’s impossible to be authentic and genuine without integrity. Are we comfortable enough in our own skin to be ourselves? We’ve all seen others who are struggling with inner demons and insecurities. They “put on airs” and engage in bragging and blowhard behavior. It’s pretty hard to respect someone who is living in disguise and can’t deal productively with his or her personal issues.

Entrepreneurs who have empathy and genuinely care about others are more likely to earn respect than an insensitive tyrant. Think about this. An individual is completely honest; does everything in an above board and straight forward manner; is totally authentic – but he’s also a flaming asshole. How much respect do you suppose those people with whom he interacts have for him? Treating people poorly is a fast way to lose the respect of others. The leader who is courteous and thoughtful is earning respect. The leader who shows a real interest in others and their welfare is earning respect. The leader who subordinates his needs or desires to the wishes of another, is earning respect. When a leader enjoys success but publicly gives the credit to members of his team, he is earning respect.

Consistency is the final ingredient in this recipe for respect. We can’t be hit or miss with our integrity, authenticity or in the way we treat people. Inconsistency sows seeds of doubt about our real motives. In a worst case scenario others see us as being manipulative and conniving. Clearly when we stay true to our principles we have no problem remaining consistent.

Earning respect takes time and once achieved the quest to maintain it should be sacred. Earning and keeping respect is best accomplished through integrity, authenticity, empathy and consistency.

You can also listen to a weekly audio podcast of my blog. What you hear will be different than what you read in this blog. Subscribe on iTunes or wherever you get your podcasts. You can also click on this link – Click here to listen to Audio Episode 37 – Master’s Degree.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The Few, The Proud . . .

Posted on March 19, 2017 by anentrepreneurswords

The U.S. Marine Corps is well known for taking raw young men and women and transforming them into lean, mean fighting machines (or so goes the saying). The process they use is fascinating and very instructive. It involves breaking down an individual and then building them back up. Legendary drill instructors use a variety of physical, mental and emotional techniques to accomplish this. There’s a lot of yelling and screaming. Recruits are pushed to their limits and beyond. After weeks of training a recruit who was 45 pounds overweight can climb a thirty-foot rope with one hand or run three miles in 19 minutes.

How does any of this apply to us as entrepreneurs? There was a statement in the preceding paragraph that is the key. “Recruits are pushed to their limits and beyond.” Many of these future Marines never dreamed that they could perform some of the physical tasks required. They never knew they had the mental fortitude and emotional stamina to endure. But here’s the truth – they totally underestimated themselves.

As entrepreneurs we may also have a tendency to underestimate ourselves. We fail to see our full capabilities and understand our greatness. Sometimes this is due to a lack of confidence. But it may also be because we just don’t think big enough. And there’s a lot of societal noise that is difficult to listen through. Remember when we were children and an adult asked us what we wanted to be when we grew up? Some of us answered an astronaut, movie star or even the President of the United States! Then something happened and we didn’t become astronauts, movie stars and U.S. presidents. Certainly our interests changed, but we also felt pressure to be more “realistic” with our expectations. We were herded into more “achievable” chutes and we eventually conformed to generally understood limitations. All of this imprinted upon us as adults and we lost the desire to dream in a large way.

Almost every one of us has the potential to be more and to do more. This is evidenced every time we learn something new. I don’t think I’ve ever met anyone who has reached his or her full capacity to achieve. And yet we sometimes sell ourselves short. We tell ourselves in different ways that we’re not smart enough or persistent enough or creative enough to do something. “Where are we going to get the money to pursue this new idea,” we ask. Then we answer, “I don’t have the right contacts to do it.” This may be a true statement at a particular moment in time. So what are we going to do about it? We can avoid underestimating ourselves when we take intentional “I can” steps.

The first step is to reject the societal noise that tries to impose limitations on us. I’ve learned to catch myself when I start to think or say, “I can’t do that.” I replace this with the thought or statement, “How can I do that?” This sets a whole new tone and puts me in a problem-solving mode from the outset.

The “How Can I” notion will be the trigger that releases a creative stream into which we can tap. By throwing off our mental shackles we are shaping a mindset that is receptive to this creative flow. We explore a multitude of ideas and begin to see a path that leads us to that which we want to achieve. We don’t worry about our ideas being judged as stupid or crazy for we’re looking at all kinds of possibilities. I find the process of discovery to be exciting and challenging, and I thrive on the mental stretch that ensues.

The final step is that of visualizing the successful outcome we are seeking. Visualization is a powerful tool and cements our objective into our conscious and subconscious minds. What started out as the question, “How can I raise money for this idea,” now is revealed as complete. The idea has been implemented and boy is it amazing!

We can avoid underestimating ourselves by asking the question, “How can I” rather than affirming “I can’t.” Then we let the creative juices flow to figure out “How I can.” Ultimately we visualize the end result in grand fashion and move decisively to make it happen.

Bears in Trash Bins

Posted on March 12, 2017 by anentrepreneurswords

Here are several scenarios. Tell me what’s missing. A manufacturing operation is experiencing an alarming increase in the number of product rejections. A child chronically fails to turn in his homework assignments. Monthly financial reports for a company seem to always be delivered at least two weeks late and sometimes more. Customer service ratings for a particular business are abysmally low. Bears are constantly getting into trash bins in a neighborhood and making an incredible mess.

So what is it? What’s missing? It’s a concept that can sometimes be elusive in entrepreneurial environments and often in our personal lives as well. It’s called . . . accountability. Accountability has four basic components – understanding, commitment, responsibility and consequences.

A failure to understand what is expected can obviously lead to an overall failure in whatever operation is being performed. The manufacturing rejects could very well have been caused by a machine operator not understanding a critical step in his or her process. It’s pretty hard to hold this person accountable if there was a lack of training to ensure a full understanding of the process.

Without commitment full accountability is impossible. The child must not only understand how important it is to submit his homework but he must also be committed to the notion as well. If he refuses to commit to turn in his work, then he will refrain doing so. While it’s true we can hold him accountable for his actions, it’s unlikely that we’ll achieve the desired result.

The path to accountability involves a willingness to take responsibility. “It’s mine (or ours) to do” becomes the mantra. In unhealthy organizations there may be a great deal of finger pointing. “It’s the fault of Marketing.” “No, Sales screwed up!” No one seems willing to step up and claim whatever “it” is. Taking responsibility is a sign of integrity and sacrifice, especially if things go wrong.

Finally there are consequences. We may think of consequences in a negative sense but of course consequences can also be positive. The accountant who finally figures out how to deliver the financial reports on time may benefit from positive consequences in the form of a bonus. On the other hand, the customer service department that gets consistently poor ratings might suffer the consequences of being terminated. It’s important to note that for negative consequences to be administered fairly, the individual(s) in question must have a clear understanding of what they are supposed to do. One of the most common mistakes that is made in the accountability process is firing someone for their failures that are really the result of their not clearly understanding how to perform their role.

So let’s put it all together in a positive scenario. Mike and Susan are a two-person team employed by Newco, a tech start-up. For the first week after they are hired they undergo intensive training that provides them with the knowledge and understanding they need to undertake the functions assigned to them. The second week they work with “buddies” that scrutinize their work and ensure the finished product meets quality standards.

At the beginning of the third week the company founder sits down with Mike and Susan and asks them a number of questions about the work they are doing. He inquires as to whether or not they are clear on what they are supposed to do and how to do it. When they answer affirmatively, the founder asks if they are fully committed to do their part as a team in delivering a flawless product to the customer. Mike and Susan now have understanding and commitment.

One day a customer complained that two of the units she had purchased were defective. Upon further investigation Mike realized that he had missed a step in the production process. He wrote a note to the customer offering his apology and made sure the founder knew that the error was totally his and not Susan’s fault. Thus, he took responsibility.

Over the course of a year, Mike and Susan performed in exemplary fashion. They were accountable to each other, to their company and to their customers. As a result they were both promoted to supervisory positions and received generous raises. All in all the consequences were positive.

When we have understanding, commitment, responsibility and consequences we have full accountability. And that’s how we keep the bears out of the trash bins.

Up and to the Right

Posted on March 5, 2017 by anentrepreneurswords

Tyler is an entrepreneur. He runs a small but growing company that recycles old computer equipment. Tyler is very frustrated right now. Marie is a stay-at-home mom. She has two small children under the age of five and produces marketing materials for three companies, working from a spare bedroom. Marie is very frustrated right now. Why are Tyler and Marie so frustrated?

Tyler’s company has been growing at a rate of 25% a year for the past three years. He’s doubled the size of his team and his margins are increasing. If you looked at a graph depicting his business, the line would be up and to the right.

Marie has two beautiful and healthy children. Her husband is a physician and the family is financially secure. Her marketing venture is flourishing. She’s landed a new client each of the last three years and the type of work has become much more substantive. By all measures, Marie’s graph looks the same as Tyler’s – up and to the right.

Why in the world would these two individuals be so frustrated? Tyler has chosen to reinvest a major portion of his profits back into his company. As a result, he hasn’t seen his personal cash flow increase in any meaningful way. Intellectually he knows he’s doing fine, but it still rankles him that his bank balance has remained fairly static.

Marie loves her marketing business and she is ecstatic over motherhood. She worries that her two primary roles may someday collide (at times they already do) and she feels guilty that she may fail to do justice with either. Marie wonders how she can possibly achieve her personal and professional goals with the juggling act that she is managing.

Here’s a simple but powerful truth. Tyler and Marie have not yet learned how to celebrate their success. To those of us looking in from the outside it would appear that these two are ideally situated. Everything seems “up and to the right” for them and yet they are frustrated. Tyler and Marie are trapped in the tunnel of limited thinking. They have set lofty expectations for themselves – both in terms of what they want to achieve and how quickly this will happen. How many entrepreneurs and non-entrepreneurs do you know who are suffering the same plight? What can be done to break this negative-mind cycle?

If we were coaching Tyler and Marie we would tell them to become quiet for a few minutes and clear their minds. Then we would suggest that they “go to gratitude.” That would involve creating an inventory of all that in their lives for which they are grateful. Going to gratitude helps them get out of themselves and see beyond the tunnel walls of their frustration. And it’s a way to re-set the mind in a positive manner. In fact, we would advise Tyler and Marie to use the gratitude exercise in the future whenever they feel frustration welling up.

As armchair coaches we would next encourage Tyler and Marie to discover how to celebrate their successes – no matter how large or small. Sometimes we have a tendency to singularly focus only on the BHAGs – Big Hairy Audacious Goals – that we have set, and we fail to see the progress we are making along the way. Tyler and Marie need to re-pattern their thinking to be able to see the smaller achievements that occur every day and intentionally celebrate them. One of Tyler’s team members earned a difficult industry certification. Tyler celebrated this success with a pizza party and some congratulatory remarks. When his company recycled its 10,000^th CPU, he walked into the middle of the warehouse and rang a big brass bell. He left the bell there to be used as future milestones are realized.

When Marie’s four year-old daughter read her first book Marie took her out for a special lunch and lavished her daughter with praise and encouragement. One of Marie’s clients entered her brochure in a regional marketing contest and it won first place. Marie celebrated her accomplishment by laminating the brochure cover onto a plaque along with her award. She hung it in her home office to remind her that she does really fine work.

We all need to learn to celebrate our successes no matter the size. And going to gratitude helps us to break out of the tunnel of limited thinking. This puts us on the path to appreciate each and every day as one filled with joy and promise.

Disaster to Brilliance

Posted on February 26, 2017 by anentrepreneurswords

In the old days if a product was lousy it was hard to get the word out to the general public. Short of taking out a full-page ad in the newspaper or standing in front of a store handing out flyers, there really wasn’t an effective way to inform unsuspecting customers about a flawed product or terrible service. Social media has changed all of that in a good way for the most part.

Do you ever read online product reviews? Smart companies give customers the chance to rate a product or service and write a short statement about their experience. And smart companies constantly monitor the ratings and reviews and take immediate action to resolve issues as they arise. I don’t know about you, but I have been paying more attention to ratings and reviews when I make purchases on Amazon and in other internet stores. Social media provides entrepreneurs with a terrific opportunity to “up their game” so to speak. Failure to deliver top quality or resolve customer problems can have severe consequences. In an instant the whole world can learn about a bad experience. And when too many bad experiences are chronicled online, an entrepreneur can lose business in a big way.

I purchased a battery-operated handheld drink mixer for use in mixing a supplement I take daily. The device worked quite well for a few weeks. And then it became temperamental and would only work intermittently. Eventually it stopped working altogether. I had tossed the packaging, so I wasn’t sure how to contact the manufacturer. The easiest thing was to simply post a review on the website from which I had purchased the item. I stated that the product was flawed and presented the facts about my experience.

Within 20 minutes of the posting I received an e-mail from the owner of the manufacturer. He expressed genuine concern that I wasn’t satisfied and said he would send me a full refund, send a replacement product or provide tips on how I could get the unit to work properly. Apparently my issue was fairly common and the fix was relatively simple. I liked the mixer and told him I’d take him up on his tips which he quickly sent to me. He also reminded me that his product had a lifetime warranty. I was able to use his tips to get the mixer working properly and have been able to keep it running ever since. I quickly wrote an updated review congratulating this gentleman on his customer focus and endorsed his product.

This entrepreneur did it right. He smartly monitored his reviews. When he saw a negative one he quickly reached out to his customer with the singular objective of doing whatever it took to make the customer (me) happy. There was never any hint of defensiveness in his responses. His lifetime guarantee is impressive. What he did was turn a potential disaster (bad review) into a stroke of brilliance by getting a positive re-write of my review – by the way, he never suggested that I do this. Better yet, the way I re-wrote the review recounted my initial dissatisfaction and all that the owner did to resolve my issue. Potential customers reading my review should take comfort in knowing that this entrepreneur stands behind his product and only wants his customers to be totally satisfied.

No matter how hard we try, things can go wrong. Stuff breaks. Customers can be cranky. Social media has created an environment where we are very vulnerable as entrepreneurs. Committing to move with lightning speed and doing whatever it takes to ensure total customer satisfaction will help keep us out of the ditch. The Pony Express days of customer service are over. This is as it should be.

The Minefield

Posted on February 19, 2017 by anentrepreneurswords

A lot has been made in recent times over insensitivity, hurt feelings and words that are seemingly offensive. There are many sociological factors in play – I’m going to refrain from debating them. Our culture is shifting in seismic fashion and where it will end is anyone’s guess. It’s easy for the modern entrepreneur to get caught up in this brouhaha which I can assure you is a losing proposition. Staying out of the fray is relatively easy but requires discipline.

There are two sides to this coin. Let’s start with our reaction as an entrepreneur to things that are said to us and actions directed our way. We are going to take slings and arrows from a multitude of constituencies. Customers may say horrible things about us and our product or service. Team members may accuse us of a wide range of transgressions. What our competitors say may be even worse. Regulators, bureaucrats, politicians and members of the public in general may be generous in taking their shots at us. At times it may seem that we’re a punching bag and a pin cushion all rolled into one.

So here’s where the discipline enters the picture. It’s 100% our choice whether or not we let ourselves be hurt or otherwise impacted by what others say and do. This isn’t just a matter of having thick skin and amazing resilience. When someone says or does something to us that is negative, we must be able to dispassionately analyze the words or deeds and look for the truth. For example, suppose we are slammed by a customer for a defective product. A product review is posted online that says among other things, “the ABC Company produces a substandard product and their CEO is a crook for taking my money.” Actually, this is a pretty mild review but will work for illustrative purposes.

What is the truth here? Does our company really produce a substandard product? We have to be able to objectively evaluate this claim. Have there been other complaints? If so, how many? Is there a chronic problem with the product or do we truly have a Six Sigma level of success? Assume for a moment that our extremely low error rate is exceptional which allows us to know the real truth . . . we do not produce a substandard product. And the personal statement about the CEO is easily dismissed as an ad hominem attack. Personal attacks like this can generally be completely ignored because they are inherently dishonest. Of course we want to try and solve the problem encountered by our customer, but we choose not to be hurt by what has been said. Boiled down to its simplest form, this is a case of, “if the shoe fits, wear it.” And if it doesn’t, then don’t.

Now to the other side of the coin. How is what we say and do impacting others? This also requires discipline on our part. But again, it’s really very simple. We practice the Golden Rule whereby we treat others as we would want to be treated. Do we make it a practice to denigrate or berate others? Are we guilty of making ad hominem attacks of our own? Before we say something potentially contentious to someone else, do we stop for a brief moment and measure it against the Golden Rule? While it’s true that we all make a choice as to whether we will be hurt or offended, it’s important that we as entrepreneurs try and avoid putting others in the position of having to make such a choice. This doesn’t mean we have to walk on eggshells or adopt political correctness. Instead, we must understand our audience and try and be sensitive to how they might react to us. I’ve always found that focusing on the Golden Rule in such situations is usually sufficient to avoid trampling on the feelings of others.

The interpersonal functioning of society today is fascinating, but can also be bewildering. We choose not to be hurt by what others say and do, and we practice the Golden Rule when communicating or taking action. Taking this approach will help us skirt around the current cultural minefield.

Ted’s Song

Posted on February 12, 2017 by anentrepreneurswords

Southwest Airlines has been in business since 1967 and has recorded 43 consecutive years of profitability. The company flies 707 Boeing 737 aircraft with 278 more on order. Southwest pioneered low-cost air travel and has grown to be one of the largest airlines in the world. United Airlines launched Ted, its low-cost brand in 2004 with 56 Airbus 320 aircraft. It folded operations in 2008. Delta Airlines launched Song, its low-cost brand in 2003 with 47 Boeing 757 aircraft. It folded operations in 2006.

How is it that two enormous legacy air carriers failed to challenge Southwest with similar low-cost service? Just like Southwest, they flew point-to-point routes. They used a single type of aircraft, just like Southwest. And they charged low fares, just like Southwest. What’s more, they had massive financial backing from well-established parent companies. All three companies were playing a commodity game. So why did Southwest win the game?

There was one aspect that neither Ted nor Song could replicate. Southwest had developed a unique culture that was friendly, whimsical and borderline radical at times. Customers were attracted to this culture. Southwest passengers enjoyed corny songs sung by flight attendants and the overall attitude of the Southwest team. Ted and Song were simply offshoots of United and Delta and reflected their respective cultures. It’s true that there are other low-cost airlines that are profitable today, but they haven’t made serious inroads into Southwest’s market share or customer base.

What’s fascinating about all of this is how a Winning Culture can be so elusive. I’ve said many times that I’m not particularly concerned about sharing my playbook with my competitors. It’s not the design of the plays that necessarily wins the game. It’s how well those plays are executed that makes the difference. There are a multitude of sports metaphors in this respect. Think of all the professional football teams that are stocked with amazing athletes possessing world-class talent. And every single team has a playbook full of intricately designed plays for the offense and the defense. Yet, a dropped pass here and a missed block there can be the difference in whether a team wins the Super Bowl or watches it at home on TV.

What exactly is a Winning Culture? As entrepreneurs, it is something we may not think much about, but it can be the difference between success and failure. Far too often, entrepreneurs may not pay enough attention to creating and nurturing a Winning Culture, opting instead to focus more exclusively on operations and metrics. Southwest infuses the following into every employee it hires:

A warrior spirit
A servant’s heart
A fun-luving attitude (Southwest’s stock ticker symbol is LUV)

At Southwest, the warrior spirit is “being fearless in terms of delivering the product,” according to Ginger Hardage, the now-retired chief communications officer. The servant’s heart is based upon the Golden Rule and the need to treat everyone with respect. It’s pretty obvious what the “fun-luving attitude” is all about. Southwest looks to hire people who don’t take themselves too seriously and always have a smile on their face. There’s no question that Southwest pays a great deal of attention to operations and metrics, but its cultural foundation is rooted in these three values.

When a company stops winning and starts losing, the first place to look is to see if it has strayed from its Winning Culture. If the culture’s not right, the operations may be off kilter and the metrics will look bad. I believe that we must fix the culture first and then make the technical adjustments from there. And one more cogent point needs to be made. A Winning Culture is different than just plain culture. An organization may have a culture that has been intentionally cultivated, but doesn’t necessarily lead to winning. To win, we must be extraordinarily positive about it. Our entire team must be convinced that we are going to win and they must completely embrace the notion.

A Winning Culture is not replicable. It is unique to each company or organization and must be developed organically. It enables us to execute our playbook effectively in ways that our competition can’t.

Leap Year

Posted on February 5, 2017 by anentrepreneurswords

It’s Leap Year! When you check on this statement you may be confused because it might not be officially true – at least according to the calendar. But from an entrepreneur’s perspective, it’s Leap Year. OK – some additional set-up is in order. Let’s think about where we are in our lives and in our careers. What have we achieved? Does it seem like we may be putting one foot in front of the other and carefully walking down the street? Is something holding us back from bursting into a full sprint? Do we have a gnawing feeling that we’re behind the curve and maybe even falling short?

I’d like to tell you a story about a friend of mine. I have his permission to share this, so I’m not talking out-of-school. More than 15 years ago he asked me if I could mentor him in a life-coaching sense. He had a great job with a well-known and highly respected company and was climbing the ladder. He had the opportunity to move to another city with the same company and eagerly did so. He continued to excel in the corporate world and was financially secure. But he was yearning for something more.

This individual had a passion for the outdoors and loved to go rock climbing and whitewater rafting. It was his release from the stress of his daily routine. Eventually this passion became a part-time business. My friend began guiding trips for other entrepreneurs that had a similar passion for the outdoors. He became a master at juggling his day job with his new hobby-business. Ultimately, his yearning overtook the conservative, safe side of him and he quit his very lucrative corporate job to work for himself. Today, I am proud of the fact that he has built a successful company providing a wide range of guided outdoor excursions to a variety of destinations.

Of course the path taken by my friend was neither direct nor smooth. He struggled mightily to make the final decision to take the Big Leap. But in the end he did and it has paid off mightily for him. He is a happy man who is in charge of his own destiny and blessed to be able to provide a good life for his family. So, how did he do it?

The Big Leap is undoubtedly different for each of us. But it requires some of the same basic elements. First, is the element of Strong Desire. Do we really want it? The Big Leap can happen when Strong Desire becomes overwhelming. We really, really want something to happen. It’s stuck in our consciousness every day. It’s a craving. All we can think about is that which we envision becoming a reality for us.

The second element is that of Knowledge. My friend amassed considerable Knowledge by experimenting with his business ideas while still working his full-time corporate job. He did this for a period of years – not weeks or months – and was able to learn what worked and what didn’t. He achieved a deep understanding of the market opportunities as well as the pitfalls to avoid. And the more Knowledge he gained, the more his Strong Desire became even stronger.

The third element is that of Confidence. I watched with admiration as my friend’s Confidence soared over time. His Strong Desire supported by Knowledge had become a quest. We worked through an Opportunities-to-Fail exercise where we inventoried all of the risks we could think of and how he would mitigate those risks. This all unfolded in a measured way. We didn’t rush but we also didn’t tarry. His Confidence grew as the result of a process.

Finally, the last element of the Big Leap is that of Faith. I’m not referring to Faith in a religious sense. Instead it’s a belief that goes beyond the empirical nature of Confidence. In this case, my friend had reached the point where his Strong Desire, Knowledge and Confidence coalesced to produce a belief that he would absolutely succeed. Oh sure, there were still moments of doubt. But they didn’t shake his Faith that he would be able to make his new venture work.

We can make every year Leap Year. When we’re ready to shake out of the same-old, same-old and take that next big step, we can do so when the four elements of Strong Desire, Knowledge, Confidence and Faith are combined to buttress the big idea that we have.

Moats

Posted on January 29, 2017 by anentrepreneurswords

We know from our history lessons that in medieval days, members of noble families often lived in castles. These fortresses were imposing in appearance and have stood for centuries – a testament to their design and construction. Castles were actually built over a 900-year timeframe which in itself is truly amazing. These structures were protected by a wide range of defenses including various forms of artillery, arrows, boiling oil, tar and sewage, and there are even reports of diseased dead bodies being catapulted at assailants. Finally, deep wide ditches were dug around many castles and filled with water, requiring access via drawbridges. In fairy tales we heard about moats being home to alligators, crocodiles and other horrible monsters though it’s doubtful that in real life moats were populated in this fashion.

So what’s your moat? Strange question you ask? I’ve written several times in the past about how important it is that entrepreneurs differentiate themselves from their competitors. In 2007, Warren Buffet was speaking to a group of University of Florida MBA students and had this to say about differentiation.

“I don’t want a business that’s easy for competitors. I want a business with a moat around it. I want a very valuable castle in the middle. And then I want…the Duke who’s in charge of that castle to be honest and hard-working and able. And then I want a big moat around the castle, and that moat can be various things.”

“The moat in a business like our auto insurance business at GEICO is low cost. I mean people have to buy auto insurance, so everybody’s going to have one auto insurance policy per car basically, or per driver. And…I can’t sell them twenty…but they have to buy one. What are they going to buy it on? They’re going to buy it based on service and cost. Most people will assume the service is fairly identical among companies, or close enough, so they’re going to do it on cost, so I gotta be the low cost producer. That’s my moat. To the extent my costs get further lower than the other guy, I’ve thrown a couple of sharks into the moat.”

Thinking about differentiation in terms of a moat is a slightly different perspective than I’ve had in the past. I’ve viewed differentiation proactively and as an opportunity to exploit. Buffet seems to be seeing it from a defensive standpoint – thus his moat analogy. Either way, we get to the same place. There has to be a reason that people want to do business with us beyond our charm and good looks.

I am advocating for a combination of defense and offense with respect to differentiation. On the one hand, I’m looking for products and services that have high barriers to entry. Perhaps this is due to substantial capital requirements; extremely complex aspects to the product or service; maybe it’s a patent; or perhaps there’s a vertically integrated process that is extremely difficult to replicate. All of those factors become the moat. They make it hard for competitors to easily jump into our space and make inroads.

Now let’s play offense. Simply keeping our competition at bay doesn’t ensure success or profitability. It’s what we do inside the castle that really counts. We can sit on a throne, eat rich foods and get fat (dumb and happy), or we can exploit the opportunity we have to function in an arena where competition may not be as intense. This might take the form of developing a premium product, or a marketing strategy that creates FOLO – the Fear of Losing Out. Maybe exploiting the opportunity looks like the streamlining of an internal process that produces even greater profits. The point is that with a moat in place we are able to take our endeavor to an even higher level than ever before.

Differentiating ourselves as entrepreneurs is essential to our success. Doing so with a dual strategy of building a moat and exploiting the opportunity allows us to play defense and offense at the same time.

Alligator Food

Posted on January 22, 2017 by anentrepreneurswords

When is the last time you thought about being eaten by an alligator? When was the last time you contemplated being run over by a cement mixer? Or, how about being beaned in the head by a meteorite? Probably never – right? The risk of any of these things ever happening is so low they never even crossed your mind. But there’s that pesky word that entrepreneurs love to hate . . . risk. As I write this we’ve launched a new year and it’s a good time to take stock of a lot of things.

Have you ever created a Risk Matrix? If not, let me provide some context. We entrepreneurs tend to rock and roll a lot. We have a lot on our plate and are generally an optimistic bunch. When it comes to the subject of risk we may not spend much time in contemplation. We roll with the punches and keep moving forward. This philosophy works most of the time – until it doesn’t. Sometimes what interrupts that forward movement is a risk we didn’t see coming.

Here’s how the Risk Matrix works. Slow down for a moment. Stop juggling. Don’t worry about e-mails, sales figures, meetings, personnel issues and the host of other things that occupy our mind throughout the day. Instead become singularly focused on this exercise. Let’s brainstorm for a while and identify all of the different risks that we encounter in our business or whatever endeavor in which we are engaged. I know that it may be hard, but it’s very necessary for us to follow through and complete this inventory. We need to turn over every stone even if we believe there’s nothing under some of them. There are competitive risks, operational risks, capital risks and macro risks. It’s important that we not leave a single one off of the matrix.

Once we have determined all of the risks we must then figure out how to mitigate them. This will undoubtedly require some strategic thinking on our part. What will we do if our top salesperson walks out the door? How will we respond if a competitor opens a store right across the street? If raw material prices increase by 20% how will we preserve our margins? Suppose our largest client wants to double the amount of business that it does with us? All of these are risks that need to be addressed. And our cataloging of risks has come about based upon the knowledge and understanding we have gained toiling in the trenches day-in and day-out.

Ultimately our Risk Matrix is populated. Perhaps we’ve flagged 20 different ways our train could derail. And maybe there are 30 different mitigation strategies and tactics that we’ve developed to address those risks. Regardless, we’ve spotted the gaps and done our best to plug them as effectively as possible. But there’s still another step to be taken. Suppose that a few of our mitigation strategies or tactics don’t work as advertised? Maybe one or more of the risks leak through and actually have an adverse impact on our organization. What now? We can solve this by also creating contingency plans for that “just in case” situation where a risk overpowers our mitigation efforts. In other words, what specifically will we do if our mitigation strategy to keep that top salesperson in the fold actually fails because he/she gets eaten by an alligator? Gee, we didn’t think about that!

I was a Boy Scout and everyone knows that our motto is “Be Prepared.” Entrepreneurs need to adopt this motto relative to the risks that we face every day. In doing so, we move from being risk takers to risk managers. As individuals the concept is also just as applicable. What personal risks are we exposed to? We deal with personal risks to the loss of our home, car, health and life through various forms of insurance. Perhaps there are other risks that aren’t insurable in a traditional sense, to which we should give thought.

Here’s the bottom line. We can blithely wander through life oblivious to the alligator lurking around the corner that wants to eat us. Or we can spend a few minutes once in a while and think about what could bite us and what we can do to avoid the unpleasant side effects.

An Entrepreneur's Words to Live By

Lifechanging Ideas for Entrepreneurs

Tag Archives: Entrepreneurial Spirit