The Reactionary Entrepreneur

Entrepreneurship is all about innovation and being on the cutting edge. It’s about dreaming, creating and doing things our own way. Sound about right to you? Then what would you say if I told you that another aspect of entrepreneurship is being a reactionary? Actually I’m taking liberties with the term. When I was reaching adulthood in the late sixties and early seventies, a reactionary was usually associated with a person who was protesting the Vietnam War, and might use extreme measures to do so. To be sure, I’m not referring to entrepreneurs as this kind of reactionary. Entrepreneurs are reactionary in the sense that we are often reactive. What we react to can be make or break for our enterprise. Let’s look at two different aspects of being reactive.

Many entrepreneurs react to their competition. This is evident every day as we watch companies raise or lower prices based upon what they see their competitors doing. But there are many other examples of how this is being done. Company A produces a wearable device that measures the steps taken by a consumer. Company B produces a similar device that measures steps, but it also measures sleep patterns. Executives at Company A become concerned that it will lose market share, so they order the  production of an upgraded device that measures, steps, sleep and calories consumed. This is the additional “bells and whistles” approach. This arms race continues unabated – we’ve all seen it over and over.

While it’s important to know what our competition is doing, there’s something even more important to which we must react. Smart entrepreneurs react to their customers. Just because Company B produced a wearable device that measures steps, sleep, calories, plays music, allows the viewing of text messages AND counts the number of black cats that cross our path, it doesn’t mean that their customers actually want such features. Rather than participate in the aforementioned arms race with his/her competition, the smart entrepreneur drills down to understand what customers want and need, and then focuses on producing a product that responds accordingly.

Normally we say that we want to be proactive. We tend to think that being reactive is somehow “behind the curve.” In many areas of entrepreneurship this way of thinking is absolutely correct. We may equate being reactive to being unprepared, slow to respond or being a step or two behind. As entrepreneurs we need to be proactive when it comes to our production methods, marketing and sales ideas, and in all areas of human resources. But, being reactive to our customers is just plain good business.

Let’s break this down further. If we are totally and continuously connected to our customers, we are going to know immediately when they perceive issues with our products and services, giving us the opportunity to make the necessary adjustments. For example, maybe we make a thing-a-ma-jig that is blue. But we learn from some of our customers that they really want it to be red. We react and begin making a red version. This is good. Suppose that our delivery time used to be one week and now is two. Our customers begin telling us that two weeks is too long. So we react and tighten our delivery schedule. This is not good. Why? Because we should know that customers don’t want to wait two weeks for anything – everyone wants everything yesterday. We should have been proactive in this instance and never let the delivery schedule push out to two weeks. Instead, we should have been proactively trying to figure out how to shorten the timeframe from one week to a couple of days.

The entrepreneur who is constantly reacting to his/her competitors is the one who is behind the curve. Always trying to one-up the competition is a dangerous game to play unless it is done in concert with understanding the needs and wants of the customer. And then, the focus actually shifts from the competition to the customer. In the end, this may result in besting the other competitor in the space – but that wasn’t the primary objective.

Being an entrepreneurial reactionary makes sense when we are reacting to what we can do better for our customers. Then we can be proactive in all other aspects of our enterprise.

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 110 – Exciting Disappointment.

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.

Fortune Telling

How would you like to be clairvoyant? Think about how amazing it would be to see into the future. Maybe you could even take your act to Vegas or have a television program of your own. Well, I’m here to tell you that you can develop a strong sense of clairvoyance. And as an entrepreneur it will serve you well in your business endeavors and in your life.

What I’m really talking about is the ability to think several steps ahead – I call it logical sequencing. I have a theory that our thoughts and actions have a natural rhythm and follow a pattern of some kind. Understanding this rhythm or pattern enables us to predict what will follow in each step of the process. Assume the following simplistic example. A mother sees the cookie jar on a shelf in the kitchen and she also sees her small son looking at the cookie jar. She immediately concludes that her son is going to want a cookie. Based upon her past experience with the lad, this is a reasonable conclusion and he does not disappoint. He looks around and notices his mother is not in the room. He also knows that he just asked for a cookie a few minutes ago and was told he could not have one. The determined child is enterprising and drags a chair to the counter but realizes that he still can’t reach the shelf. Then he sees a large ball on floor and puts it on the chair presumably to provide an added boost to the cookie jar. You know the rest of the story.

The mother obviously knew that this scenario was not going to end well. We’ll also assume that she intervened to avoid a trip to the emergency room because she could predict the outcome with great certainty. Yes, this is an overly simplistic scenario, but it demonstrates the point I’m making. Now, let’s translate that into a more complex business situation.

Assume that we own a small manufacturing operation with 20 employees. We’ve had a problem with shrinkage – the copper that we use in our manufacturing process is disappearing. Our general manager has decided to crack down and conduct random frisks of employees at the end of each shift. He requires each employee to sign a consent form agreeing to this procedure. Will this solve the problem? Maybe. Could it cause other problems? Most likely. A logical sequencing approach might have allowed for a different solution that would not cause problems.

In our hypothetical example the general manager was simply reacting out of frustration to a serious issue. Instead, he would have been better served to create a decision tree. He would have realized that if he took Step A, he might expect Result A to ensue, which could then cascade to Result B and Result C. Result A might have been all of the employees feeling that they are being unfairly accused of being dishonest. Result B might have been a growing resentment by the employees of the GM, and Result C might have been five of the employees quitting because they don’t want to work for a company that doesn’t trust them.

By using a logical sequencing process and creating a decision tree, we can anticipate the politics of a situation; how people are likely to feel about certain actions, and what the impact of our decisions might be. As entrepreneurs we may make such decisions in a reactive or expeditious manner without fully exploring how the various ramifications may unfold. As you read this you may be thinking, “Master of the Obvious!” But you would be amazed at how many decisions are made in society today where little or no thought is given to the ultimate outcome.

When we adopt a calm and measured approach to making decisions and taking action, we have a greater chance to succeed. Using logical sequencing to predict outcomes can greatly support this process.

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.

fortuneteller