The Wheels of the Bus Go Round and Round

Posted on July 5, 2015 by anentrepreneurswords

Here’s a scenario. Sales are flat. The product development team is feuding with the marketing folks. Production is lagging and customer complaints are trending in the wrong direction. Sounds like a nightmare situation – right? It’s at a time like this that makes us wonder why we became entrepreneurs in the first place! As we try to sort out this mess, something becomes quickly apparent. We have the wrong people on the bus.

The whole problem wouldn’t even exist if we had selected the right people in the first place. But for most of us, we are where we are and have to deal with an unwise hire here and a hopeful hire there. Rarely do we make the right hiring decisions from the get-go and find smooth sailing forevermore. Something I’ve grappled with for decades is when to change out the people on the bus – and sometimes the bus driver to boot! The mistake I’ve made over and over has been to give people too many chances and believe that if I just find the “right slot” for someone, that I can “save” him or her. In recent times I’ve come to realize that we’re not in the business of doing social work and it does no favor to someone who is miscast to continue to try and salvage them.

Most of us have a level of empathy that prevents us from being Donald Trump . . . that is to simply say, “You’re fired!” But there’s undoubtedly a middle ground. We don’t have to have a hair trigger and instantly terminate someone who is beginning to struggle. And we also don’t need to continue to enable someone for months or even years who can’t get the job done.

As with much about entrepreneurship, there is a process that can make the decision to invite someone off the bus both humane and timely. We start with clear written roles and accountabilities. It’s imperative that our team members truly understand what is expected of them. Roles and accountabilities should be quite comprehensive and they must be measurable. We also must make sure that our team members understand how to perform their roles and accountabilities and that they have the proper resources to succeed. If I tell a non-pilot that he is responsible for flying a passenger jet from New York to LA I can be very clear about this. But if he’s not trained to fly the plane, then it will either fail to get off the ground or if it does, well, what happens might not be pretty. I realize that this is a bit of an exaggeration, but it illustrates the point.

Hand-in-hand come key performance indicators. These are the metrics by which we determine if the roles and accountabilities are being sufficiently executed. Ongoing performance reviews are also an important element of ensuring that the right people are on the bus. Some companies do an annual performance review. This may be fine in a formal sense, but team members need a continual feedback loop. Then there will be no surprises when the annual review is performed. It’s also helpful (and often judicious) to offer a written assessment as part of the continual feedback process. It’s not so much to build the file as it is to make sure that everyone is on the same page regarding where improvement is needed.

Often when things are going poorly, it’s the result of a lack of roles and accountabilities; or a lack of training; or a lack of proper resources to get the job done; or a lack of measuring results; or a lack of providing team member feedback, or all of the above. When this happens and we must make a change in personnel, we dread having to take action. Why? Because we know deep inside that we probably didn’t do everything necessary to be completely fair with our team member.

Ensuring that we have the right people on the bus is a strong step toward building a successful culture and producing the results we desire. And following a well-designed process to invite people off the bus who aren’t the right fit will allow us to act objectively and at the right pace.

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.

Prom Night

Posted on June 28, 2015 by anentrepreneurswords

The Holy Grail for business start-ups and mature organizations alike is customer procurement. Winning customers at a sufficient pace is critical to the survival of every company and especially for those at the fledgling stage. And yet I can’t tell you how many times I’ve seen entrepreneurs focus more on other aspects of their businesses rather than making sure they have enough customers to keep the doors open.

There’s no doubt that we must have a minimally viable product that our customers want to buy. And implementing a wide variety of systems and processes is also an important factor. But without the customers, everything else is moot. To find the customers and convince them to spend their money with us requires pulling out all of the stops. Top notch interactive websites, regular informational blogs, referral programs, social media, drip marketing, multi-media advertising and positive publicity are building blocks toward customer procurement. Yet, even with full implementation, the customers may not come in numbers or as quickly as are needed. What to do? Go back to the basics and fundamentals.

Think back to prom night – what was happening? Girls had their hair done. Guys were renting tuxedos. Corsages and boutonnieres were purchased; makeup was applied, and shoes were shined to a fine gloss. In other words, we were all trying to look our very best. Think about this with respect to our products or services. Have we done everything possible to look fantastic to those outside our company?

Do prospective customers clearly understand our value proposition? How strongly are we able to demonstrate that our product or service solves a problem and preferably one with which a lot of pain is associated? This is a major failure for a vast number of companies. Their product/service might be nice to have, but the customer can’t find a compelling reason to purchase it. Think Colgate Kitchen Entrees. Never heard of this? You’re not alone. The folks that make Colgate toothpaste thought it might be a good idea to launch a line of frozen dinners. Customers could eat a Colgate meal and then use Colgate toothpaste to brush their teeth. What kind of a value proposition is that?! If we can’t nail our value proposition then neither can our customers.

Customers have many choices when purchasing a product or service. Entrepreneurs sometimes become so enamored with their own ideas that they fail to objectively assess the competition. I’ve certainly been guilty of this myself in the past. I would pooh-pooh a competitor and rationalize that our approach was far more sophisticated and desirable. And yet, I didn’t ask the bottom-line question of what customers liked better about the competition. We may have a product or service that truly is twice as good as anything else on the market, but unless we can make a clear and concise case for differentiation, we’ll be stuck with the rest of the pack. Effectively communicating product or service differentiation means life or death in the business world.

A strong uptrend for customer procurement will happen if we practice the basics and fundamentals. This can be accomplished by presenting our product or service in as attractive a manner as possible; when we have a killer value proposition, and when we effectively communicate how we’re different. Doing all of this will ensure that we’ll be the hit of the party.

The Really Deep Dive

Posted on June 21, 2015 by anentrepreneurswords

Way back in the olden days I can envision a prehistoric man trapping a small animal of some variety (probably a mini-dinosaur) and trading it to another prehistoric man for a new spear. And at that precise moment in time, the first entrepreneur and the first customer were born. Now suppose that this first entrepreneur continued to trap small animals and trade them to other “customers” for the basic necessities that they could provide. This economy worked reasonably well until something happened. Another prehistoric man decided to do his own trapping and he too made his “product” available for trade. But a funny thing happened. He was willing to trade it for something of less value than the first entrepreneur. So “customers” flocked to him leaving the first entrepreneur with “unsold” “inventory.” And thus, competition was born.

Ever since the earliest days of commerce, entrepreneurs have developed a rudimentary understanding of their customers. More recently, highly sophisticated techniques and technologies have been created to aid with this customer understanding. Yet still, a vast number of businesses do not truly have the depth of customer knowledge that is necessary to consistently win. How could this possibly be considering the amazing advances that have been made since prehistoric days? The answer is relatively simple. Many entrepreneurs have not chosen to make their customers the absolute primary focus of their business. Much time and effort is spent improving processes, creating systems, increasing productivity, cutting costs, managing revenue and a host of other business practices. There’s no question that all of this is necessary. But from where does it emanate? If it starts with the bottom line instead of with the customer, the road may be rocky.

A customer-centric business starts with the basic question, “How well do I really know my customer?” Most of us think we have a pretty good idea who our customers are and what makes them tick. But I’m willing to bet that we probably have only scratched the surface with respect to the depth of our customer knowledge. Do we know the stratification of age cohorts across our product and service offerings? That’s an easy one. Do we understand the subtle preferences, needs and desires of these different age groups? Have we spent much time fine tuning our products and services to address this information? Oh sure, we perform ongoing customer surveys. But often they are designed to determine whether our customers are satisfied with our products and services. How much survey work do we do to get to know our customers better? We suspect that live customer focus groups might provide some valuable insights, but we believe that this approach is too expensive, something left to big corporations or we have no idea how to go about implementing such focus groups.

I submit that we all need to step back and take a deep breath. Then we need to pull together our team and begin to examine just how we are going about a deep dive into customer understanding. I’m championing this effort in my own companies and believe that it may dramatically transform our product and service offerings. Big Data is a treasure trove in this regard. We’ll be combining extensive demographic studies with customer focus groups, surveys and other initiatives to know for certain that we absolutely understand exactly what our customers need and want. We are looking for more than just what our customers tell us however. Big Data will help us go beyond the obvious and identify the buying habits and other trends with our customers that might not be readily apparent. And then with the customer front-and-center, we’ll make sure that our products and services precisely meet those needs and wants – stated and unstated.

Developing a deep understanding of what our customers really want and need, will help us create more customer-centric organizations. Then we are able to align our products and services with this customer focus that will manifest in high levels of customer satisfaction and greater profitability for our enterprises.

Walking Shoes

Posted on June 14, 2015 by anentrepreneurswords

We’ve all known hard-charging Type A entrepreneurs who have a “take no prisoners” attitude. These people are the doers. They are decisive and they know how to execute. But sometimes there is a downside to this sort of personality. Yes, sometimes those of us who are very driven may have a tendency to be insensitive. This usually isn’t intentional but nonetheless it can have a detrimental effect on our team members and the culture we are trying to build.

There are a number of ways that insensitivity can manifest. It can be as direct as making derogatory or belittling comments to as subtle as failing to acknowledge someone with a friendly greeting in the morning. Think about an exchange like this. Team member – “I’d like to volunteer to work with Jim on the Norton project.” Entrepreneur – “No, you just need to stay focused on what you are doing.” While it may be absolutely true that the team member needs to keep doing what she’s doing, the way the entrepreneur delivered the message could be construed as insensitive. A different selection of words would make all the difference. How about this instead? “Jan – thanks for the offer. Your project is critically important and I’m counting on you to get it wrapped up. But I will take a rain check on having you help with the next one.” This statement acknowledges the team member with an expression of appreciation and also affirms her value. And it gives her hope that she’ll be given another opportunity in the future.

So, how do we develop the appropriate level of sensitivity without going so far as to sing Kumbaya all the time? There’s a very simple method that I’ve learned over the years. I will admit to once-upon-a-time being the insensitive Type A hard-charger that was described in the opening paragraph. I justified my behavior by believing that I was simply being expedient in my dealings with others. After all, I was moving at 100 miles an hour and the quicker I could get through with one meeting the sooner I could move on to the next. But I gradually became aware that my people skills were suffering. I wasn’t doing anything to cultivate relationships or goodwill. Eventually I developed a new awareness by just putting myself in the other person’s shoes. How would I feel if someone spoke to me a certain way; said something in a certain manner, or failed to somehow acknowledge me?

The key is to practice, practice and constantly practice. I try to pay attention to how everyone around me is feeling. In a restaurant, I want to make sure that the wait staff is properly appreciated. At the office I try to make eye contact with members of our team as I walk by and greet each and every one of them. I pay attention to the language that I use, going the extra mile to avoid careless statements that could be misconstrued. Again, I’m always testing what I say or do against the basic premise of how I would want to be treated if I were the other person. After a while it becomes very intuitive.

The mark of a good leader is the manner in which he or she treats others. Running roughshod or being humble and sensitive? The choice is easy when walking a mile in another’s shoes.

On It or In It?

Posted on June 7, 2015 by anentrepreneurswords

I have the good fortune to regularly mentor several amazing entrepreneurs. One question I frequently ask is, “how much time do you spend working on your business versus in your business?” A similar question is, “how much time do you spend working on strategy vs. tactics?” Usually the answer to both questions is, “not much.” The problem is easy to identify. Entrepreneurs find themselves sucked into the daily grind of firefighting and there’s no time left to do much else.

So how do we focus on strategy and vision when the bullets are flying and we’re hunkered down in our foxholes? For starters, we need to examine exactly what it is that we are doing. As part of my mentoring process I inquire on specifically what an entrepreneur is spending his or her time. It’s interesting to listen to the responses which often reflect the fact that entrepreneurs are handling things that really shouldn’t be their responsibility. Mostly this includes performing tasks for which others should be held accountable. And it’s not just about the failure to delegate. Some entrepreneurs take the position that “if I want it done right, I need to do it myself.” Or, “I really don’t have the time to show someone else how to do it – it’s more efficient for me to bang it out.”

To solve this we need to understand what prevents us from delegating that which should be handled by others. Do we have the right people on the bus? Do we have enough people? Are the right people properly trained? Are we too high control? When I have experienced problems with delegation in the past it’s usually been the result of not having the right people to whom I can delegate. Getting to the root cause of our inability to delegate is crucial. If we don’t have the right people, what is more important than solving this problem? One of the nice things about having the right people on the team is the fact that they may not need as much training – bright, right people figure out a lot of things on their own.

How is an entrepreneur who has a very small team able to delegate effectively? In other words, he or she is a player/coach and is on the field for every single play. This is where blocking out specific amounts of time to plan and strategize can be invaluable. Perhaps this occurs every morning from 8:00 to 9:00 without fail. During that timeframe, the entrepreneur takes no phone calls or any other interruptions and refines the strategy for the enterprise, reviews key performance indicators and determines if the business is on track with respect to vision and mission. Then the entrepreneur suits up and runs out on the field with the rest of the team to face another day. I cannot emphasize enough how absolutely nothing can be allowed to disrupt this daily routine.

We can ill afford to procrastinate when it comes to working on our business because we are too busy working in our business. The more this happens the more likely it is that we’ll get caught on the hamster wheel. Around and around we go as fast as our legs will churn – but we’re not making any headway. Why exert so much energy (and money) to end up right back where we started?

Learning how to delegate and hold others accountable will allow us to strategize and envision the future for our enterprise. And sequestering ourselves for a specified period of time every single day will enable that planning and visioning to happen.

Confluences

Posted on May 31, 2015 by anentrepreneurswords

Consider this. One of your key employees just gave her two-week notice. Your company didn’t win a major contract for which it was bidding. The vice-president of production just informed you that delivery of a key component for manufacturing a product that is 30% of your sales has been indefinitely delayed. Your company website was hacked last night and decorated with cyber graffiti. Cash flow is a bit tight right now. Oh, and you haven’t been able to squeeze in a workout for a week. How does all of this feel right about now? Certainly being under siege might be one way to describe it.

Let me assure you that similar situations like this are experienced by many entrepreneurs every single day. Perhaps some of it is preventable. But more importantly – how do you handle it? Are you able to stay calm, smile and find your way through the minefield? Or is it meltdown time and maybe a visit to the local tavern after work? The key is how we choose to view and respond to such events. If we see all that I’ve described as a crisis, then we may react with fear and panic. However, if we simply see this as a “Confluence of Events,” we may be a bit more sanguine about it. Let’s look at some of the reactions I’ve witnessed over the years when I see entrepreneurs encounter a “Confluence of Events.”

The Beginning of the End – those who go here lay awake at night conjuring images of complete and total disaster and destruction. They are convinced that their company is going down the tubes; they’ll personally go broke, and they’ll end up living under a bridge. They go to the office and try to slug it out, but they have this feeling of impending doom. Sometimes this becomes a self-fulfilling prophesy.
Deny and Hide – others utilize the Deny and Hide approach. They refuse to acknowledge that something needs to be done and go play golf, take a “business” trip or find some other distraction. Rather than face the issues at hand, they rationalize their reaction by positing that “others need to step up and show leadership” in order to solve the problems.
Focus, Focus, Focus – I’ve watched leaders with the best of intentions sharpen their focus . . . in over-the-top ways! They tend to jump in and micro-manage a particular situation to the exclusion of everything else that is occurring. By plunging in this way they believe that they are being productive – except that the rest of the issues that need solving are languishing.

These are just three of the reactions I’ve observed and each demonstrates the classic fight or flight response. There is another way.

When the “siege” begins and a Confluence of Events is in sight the first thing we can do is take a deep breath. Seriously. Spending several minutes to become quiet will help clear the mind. There’s plenty of time to deal with the issues at hand, and becoming centered will make the process easier. Next, we write down the specific facts surrounding each challenge that we’re facing. This helps move us away from dwelling on the emotional elements. I’ve found that when I push out the emotion, things generally aren’t as bad as they seem. Finally, we map out the manner in which we are going to tackle each situation that is contributing to our Confluence of Events. We identify the priorities and start working our way through them. At no time do we feel victimized or defeated. We show leadership by maintaining an even keel and demonstrating that no matter what the situation, there’s always a resolution.

A confluence of problems in our business and personal lives may seem insurmountable. Avoiding a siege mentality begins with remaining calm and unemotional. Then we’re able to methodically and successfully work through or around the obstacles we are facing.

A Right Way and a Wrong Way

Posted on May 24, 2015 by anentrepreneurswords

My cell phone rang the other day. The person on the other end started by introducing himself but did not speak clearly so I couldn’t catch his name. He immediately launched with a hearty, “Mr. Harris, how are you doing today?” This sort of greeting is always a warning signal for me that someone is going to try and sell something. Being a polite person I responded by saying that I was fine. Before I could say anything else he began reading from his script. He was peddling the most amazing product since the invention of the light bulb and it was going to save me millions of dollars . . . or something like that. This guy literally filibustered for more than 30 seconds without taking a breath. He obviously had a lot of practice doing this.

Does this sort of old school cold-calling really work? Perhaps it does to a point, but I question whether it is the most effective approach. Let’s examine all of the ways I found this conversation to be off-putting. #1 – Failure to speak clearly – the fact that he spoke so fast that I couldn’t understand his name was certainly not the right way to get started. #2 – Cliché greeting – asking how I was doing is incredibly trite and inauthentic. #3 – No need-determination – this was at the heart of his ineffective approach. He arrogantly assumed that I needed his product or service and made no attempt to validate this assumption. #4 – Reading from a script – I had no confidence that he understood what he was supposed to be selling. After listening to him tout his product for a while I finally interrupted him and said, “I’m not interested, thank you.” And then I hung up. I wonder how many times this happens to him every day?

This type of cold calling utilizes a classic high-pressure technique and I’m surprised that in today’s business world there are still companies (and sales people) who use it. Cold calling can be a thankless task yielding poor results except for a high degree of discouragement. Cold calling should be less about the product or service we are selling and more about building and collecting relationships that we can serve. The problem is that many companies still expect sales people to meet quotas and apply extreme pressure to sell, sell and sell. The alternative (and much more effective) approach is to call without making any attempt whatsoever to sell anything. Instead the call is to introduce one’s self and build a rapport with the customer. This process includes making an attempt to understand how the customer does business and to identify his points of pain.

I would begin a call like this by indicating that I’m not calling to sell anything. This statement is usually somewhat disarming and increases the chance for a customer to stay on the phone. Instead, I’m doing some research to learn more about how customers are dealing with a certain issue. If my product is inventory management software, I’m going to ask open-ended questions that get the customer to talk about what problems he might be experiencing with his current inventory management system. And I’m going to carefully listen to his responses and ask pertinent follow-up questions based upon what he has told me. I will not read from a script. Once I have a greater understanding about my prospective customer and his needs, I’m going to thank him for his time and hang up.

I’ll follow-up with a handwritten note expressing appreciation to the customer for his time. Very few people write notes anymore. I won’t send it by e-mail because I won’t stand out as much. I may wait several days and send him something relating to the conversation we had – perhaps it’s an article that is applicable to his situation. But I’m still not selling him anything. Instead, I’m working to build a relationship. By the time I call him again, he knows who I am. And there’s a reasonable chance that I’ve differentiated myself from the high-pressure cold callers he hears from every day. When I finally call him days or even weeks later to help him buy my product, it’s now a warm call.

Effective selling isn’t about the product we’re pushing. It’s all about the customer and his or her needs. And while this premise seems so basic, it’s not practiced extensively. Thus, when we take the personal approach rather than the product approach, we have a real opportunity to stand out from our competition.

The Personal Acronym

Posted on May 17, 2015 by anentrepreneurswords

Almost every entrepreneur has heard about the acronym, SWOT. It stands for Strengths, Weaknesses, Opportunities and Threats. Typically the SWOT analysis is used as a corporate assessment. We gauge each of these areas relative to our own businesses and then create strategies to respond accordingly. But there is another application of the SWOT analysis that I’ve rarely (maybe never) heard utilized. And that is to perform a personal SWOT analysis. As the entrepreneur, it is a good practice to self-perform the SWOT. But it would also be enlightening to have a peer or trusted colleague do the same to gain an additional perspective.

We start this process by analyzing our personal Strengths. Are we strong leaders – if so, how is this demonstrated? Are we persevering? Do we have exemplary resilience in the face of adversity? Perhaps we have a strong innovative flair. Could we safely say that we are calm, patient, kind or generous? We should identify and assess the strengths that matter most.

Seeing our Weaknesses may not be so easy especially if we aren’t an introspective type. This may require help from that trusted colleague or a peer who isn’t afraid to tell it like it is. Do we have a temper? Does our ego ever get in the way? Do we always treat others with respect? Are we perceived to be of high integrity? Do we give up too easily? Maybe we have a tendency to lose focus.

Analyzing our Opportunities is an exercise in determining whether our glass is half empty or half full. Think about what we personally have the potential to do. Could we become more philanthropic? Is there a mentoring or coaching opportunity in our future? Do we begin speaking at industry conferences? Perhaps we could develop a new product or service. Ultimately this is about how we can become more fulfilled as human beings as well as becoming even more valuable to our enterprise.

Finally we must look at our Threats. Could our lifestyle be a threat to our health? Is there a lurking situation that could degrade our financial security? Does our mindset work for or against us? When we evaluate Threats in a corporate sense we generally are contemplating external pressures that we may think are beyond our control. As we consider Threats from a personal standpoint we find that most will be of an internal nature. We can be our best friend or our worst enemy.

Once we complete an honest and realistic personal SWOT assessment, we need to take the next step of creating strategies that bolster our Strengths; resolve our Weaknesses; take full advantage of our Opportunities, and eliminate our Threats. The ensuing plan can become the centerpiece for leading a balanced work and personal life. And revisiting it often will ensure its implementation.

A personal SWOT analysis can be an invigorating and exhilarating process. When done in concert with a SWOT for a company, the results can be a powerful catalyst for positive change in both the entrepreneur and his or her enterprise.

Making the Distinction

Posted on May 10, 2015 by anentrepreneurswords

There’s a lot of talk these days about mentoring. Many members of Generation X and Generation Y (Millennials) have told researchers that having a mentor is of high importance to them. As a Baby Boomer, I take great pleasure in being called upon to mentor other entrepreneurs. But as the CEO of our family of companies, I made the mistake of also thinking that I could be a mentor to some of the up and coming leaders in our organization. This realization has just recently become apparent to me and its subtlety is what tripped me up.

By my definition, a mentor is an advisor and nothing more. The mentee can take what the mentor offers and do with it what he or she wishes. A mentor typically has no “skin in the game” where the mentee is concerned. As a result, the mentor is able to freely dispense advice and opinions without an agenda. CEOs should not try to be mentors within their own companies. Why? Because they clearly have an agenda which is first and foremost shaped around what is in the company’s best interest. In my experience trying to be a mentor to a handful of leaders in our firm has not worked effectively. They are deferential to a fault because I’m the CEO. They listen to what I have to say differently than if I were outside the organization. For example, when I challenge them with a particular question or premise, they take it as gospel. The relationship of the CEO to any member of the team is going to be such that a true mentoring relationship will be very difficult.

So what is an appropriate role for a CEO to play in developing leaders within his or her company? I have found that becoming a coach is the right path to take. Let’s use sports as the metaphor here. The coach is a teacher. He/she may call the plays from the sidelines until a sufficient level of expertise and trust is developed with the players to allow them to call their own plays. A coach should be wise and compassionate; yet there are times when he may be appropriately demanding and exacting.

Gen Xers and Millennials are well-served to understand the distinction between coaching and mentoring. I believe that a future leader should have both. Find a mentor who is older and has plenty of experience outside the company. By building extensive relationships throughout the community, one can usually connect with someone who may be willing to serve in a mentoring capacity. Then, try and establish a coaching relationship with a superior inside the company, assuming that the individual has a coaching personality. Unfortunately this isn’t always the case with certain people in positions of authority who are insecure and have power issues. I submit that it is healthy for the organization to move away from the boss-employee mentality and develop an attitude of coach-player.

CEOs and members of their teams can be fulfilled by a healthy coaching relationship. And an outside mentor can be the icing on the cake.

To Proposition or Not To Proposition

Posted on May 3, 2015 by anentrepreneurswords

The other day I was talking with an entrepreneur about his company. For a number of years he had achieved a reasonable level of success with the manufacture and sale of a particular product. But more recently his sales had trailed off and he was becoming worried. He made very telling statement, “the product is the same as it has been for the past 15 years – I don’t understand why people aren’t buying it in the quantities they once did.” Framed in this manner, the problem is obvious. But how often do we march on oblivious to the changes that are occurring around us?

I asked the entrepreneur to explain his value proposition, a question that was followed by silence. He admitted that he really hadn’t thought about it for quite some time (actually it had been several years). The bottom line was that his customers no longer saw the value in his product the same way as they had in the past. Tastes change. Competition is fierce. Customers can sometimes feel like they are being taken for granted. Unless we make an effort to continually understand why our customers buy our products or services, we aren’t in a position to make the tiny tweaks or major overhauls that are necessary to maintain our winning streak.

Conventional wisdom says that a value proposition is a promise of value to be delivered. Obviously there’s a lot more to it. A restaurant where we eat sometimes seems to be having a bit of a struggle with its value proposition. I suppose that the proprietor could say to me the customer, “You pay me money and I’ll cook your dinner.” Technically that’s a value proposition – but a pretty bad one. The website for this restaurant references “a special dining experience.” There are some other superlatives in the “About” section of the website, but nothing that would really grab you. There are a lot of little things about this place that demonstrate a lack of focus on a strong value proposition. The prime rib is fatty and gristly; the wait staff isn’t trained to make sure that a diner’s glass of tea or water is always full – even if it’s not their assigned table; likewise, empty plates aren’t cleared by the bus staff while guests are at the table (only by the primary server), and finally, service can be a bit slow at times.

A value proposition needs to reflect the culture of the organization. In the case of the restaurant previously mentioned, there doesn’t seem to be a culture of attention to detail. This restaurant probably gets 95% of the dining experience right, but doesn’t seem to care enough to nail that last 5%. If I owned the restaurant, I would re-tool the culture and become fastidious about the little things. My ultimate value proposition would be something like this: “Most restaurants can cook you a meal. We focus on that last 5% to make your dining experience 100% perfect.” Then I’d follow that with a further explanation – “your drink glass will never be empty; we select only the highest quality beef, pork, poultry and fish; our wait staff will always be looking for ways to serve you – regardless of whether or not it’s their assigned table.” Not only does this clearly state what value we’ll be delivering, but it also defines the points of differentiation with competing venues.

A good value proposition is clear, inspiring and differentiating. To avoid becoming irrelevant, entrepreneurs must continually review and refine their value propositions.

An Entrepreneur's Words to Live By

Lifechanging Ideas for Entrepreneurs

Tag Archives: Entrepreneurial Spirit