The Opportunity-Driving Entrepreneur

Posted on November 20, 2022 by anentrepreneurswords

There’s a Netflix series that I used to watch entitled, “Better Call Saul.” It’s about a scummy low-life ambulance-chasing Albuquerque lawyer named Jimmy McGill. Spoiler alert – in one episode, McGill becomes a minor celebrity when he rescues a man hanging from a billboard. A wealthy eccentric rancher sees the local newscast video of the rescue and calls McGill for a meeting. The rancher proceeds to announce that he and his multi-thousand-acre ranch are going to secede from the United States. He needs a lawyer and offers Jimmy $1 million to handle the case – $500,000 up front and the other $500,000 when secession is final. You can see McGill sitting in the rancher’s living room – about to burst into a massive happy dance. The rancher goes to his safe and brings back a tray with bricks of 100-dollar bills. Wait for it . . . when McGill looks at one of the bricks, the bills are emblazoned with the face of the rancher! Perfectly legal tender portends the rancher, in his newly formed country. The scene ends with McGill driving away from the ranch in his beaten-up two-tone Suzuki Esteem.

You may be wondering what this television episode has to do with entrepreneurship. Jimmy McGill was clearly “opportunity-driven.” In other words, opportunity knocked, and he answered. You may also be wondering what’s wrong with this – why wouldn’t every entrepreneur grab opportunity as they emerge? And that’s just the problem. Being opportunity-driven is effectively allowing external factors to shape our businesses and lives. Sometimes we win and sometimes we end up with a brick of fake 100-dollar bills.

There’s a great temptation for young organizations (and young people) to “grab” opportunities as they see them. This is certainly understandable. Perhaps we don’t have a lot of traction or credibility yet and need to pay the bills. The entire career of many entrepreneurs is stuck in the opportunity-driven mode. I call it the “Jim Rockford $200 per day plus expenses” approach. Those of you old enough to remember James Garner’s Rockford Files television series from 1974 – 1980 can relate to this. As a private investigator, Jim Rockford would do anything (mostly legal) for $200 per day plus expenses. I loved that show, but it taught me a great lesson – the lesson of personal limitation. Rockford would pretty much take any case that came his way and limited himself to a fixed amount of compensation and lived hand-to-mouth in a trailer on the beach.

There is another way. It’s called “opportunity-driving.” The difference between being opportunity-driven and opportunity-driving is rooted in strategy. The entrepreneur that is opportunity-driving is operating on a very strategic basis. He or she has a winning aspiration; knows where to play; knows how to win; has developed core capabilities and resources and has created the necessary systems and processes.Utilizing this approach, the entrepreneur is focused on creating opportunities that fit the strategy.

I can relate this concept to my own business interests. In the earlier days of our organizational evolution, we would take pretty much any business that dropped in our lap. Our property management operation handled all sorts of properties – apartments, condominiums, office buildings, shopping centers, industrial facilities, and even a golf course at one point in time. We rationalized accepting assignments of all types by positing that we were in the property management business. It’s true that we developed enough critical mass with these various types of properties, but I know for a fact that not all the business was profitable. In fact, we lost money on certain assignments. We also claimed that we were taking assignments to develop relationships that could grow into something bigger and yes, profitable. Occasionally that happened. Often, it didn’t.

Today, we are much more targeted with what we do. Our different business units are disciplined in handling projects that are strategically aligned. And yes, we once again were involved with a golf course, but only because it came with the 612-unit apartment community that we acquired as part of a strategic initiative. Fortunately, we found a competent operator to whom we contracted the golf course operations since this specialty is outside our wheelhouse.

Being an opportunity-driving entrepreneur will almost always produce better results than being opportunity-driven. To accomplish this, we must be strategic and disciplined.

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 ROCKFORD FILES — Pictured: James Garner as Jim Rockford — (Photo by: Fred Sabine/NBC/NBCU Photo Bank)

The “On It” Entrepreneur

Posted on November 15, 2020 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 is no time left to do much else.

So how do we focus on strategy and vision when the bullets are flying, and we are 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 is interesting to listen to the responses which often reflect the fact that entrepreneurs are handling things that really should not be their responsibility. Mostly this includes performing tasks for which others should be held accountable. And it is 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 is 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 do not 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 will get caught on the hamster wheel. Around and around we go as fast as our legs will churn – but we are 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.

The Adaptable Entrepreneur

Posted on April 5, 2020 by anentrepreneurswords

Major league baseball pitchers throw some amazing pitches. Their repertoire includes the breaking ball, changeup, forkball, screwball, slider, curveball, knuckleball, four-seam fastball, split-finger fastball, cutter, sinker, two-seam fastball and probably some other customized versions of all the above. These pitches range in speed from 70+ to over 100 miles-per-hour. How a batter can even see a pitch that is screaming in at speeds above 90 and dancing all over the place is an incredible feat. And the fact that such pitches can be hit for home runs is even more stupefying. How do they do it?

Major league batters expect to adapt. They know that they are going to see a wide array of pitches that are surgically placed in different locations in the general area of home plate. Thus, every at-bat requires them to adapt to a host of variables. Top-flight big leaguers have an uncanny knack for successfully adapting their vision and their swing to hit the ball and get on base. They go to the plate knowing with absolute certainty that they must be able to adapt, or they will strike out, fly out or ground out.

As entrepreneurs we would be well-served to study successful major league baseball players and observe how they adapt. Sometimes they shorten their swing. At other times they become supremely patient. They may try and push the ball to the opposite field; they may bunt, and they might also time their swing in order to pull the ball. All of this happens within a split second.

We entrepreneurs often work hard to create elaborate strategies and back-fill with a host of tactics. We plan and we create extensive systems and processes. All are absolutely necessary to succeed. But sometimes we forget that we must expect to adapt. There is nothing negative about holding this expectation. The game plan provides a road map for us to follow, but it doesn’t account for every possible instance where we may need to be flexible.

With the disruption caused by COVID-19, our ability to adapt will be tested more than ever before. Businesses have been turned upside down along with the rest of our lives. Having a playbook is important but being able to turn on a dime and act entrepreneurially is critical to adapting to what may be the new normal. Over the years I’ve tried to muscle my way through a plan that I was convinced was the only way to go. Most of the time it led to failure or at least results that were less than stellar. I realize that I was being resistant to adaptation.

What I wish I had understood at the time is that the need to adapt can offer some incredible opportunities. And my resistance caused me to miss those opportunities. It’s easy to say, “OK, I have a plan and undoubtedly something will knock me off-course.” What goes unsaid is the thought that, “Then I’ll do whatever it takes to get back on-course.” But what if we had a mindset of expecting the need to adapt and actually turning it into a desire?” Think about all the wonderful inventions that have occurred in the past. If you’ve ever read the story of Steve Jobs, you’ll know that he was a master of adaptation. Through his flexible nature he embraced the chance to make changes to the iPhone and the result was, “WOW!” It’s well-documented that the initial vision for this technology would not have been nearly as phenomenally functional as what was eventually developed.

When we rejoice at the prospects of adapting our ideas, our creativity increases exponentially. Then we are positioned to achieve greatness in whatever we choose to do.

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 Risk-Averse Entrepreneur

Posted on November 10, 2019 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’re closing in on the end of the 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 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 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 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 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 meteor speeding toward us from outer space. Or we can spend a few minutes once in a while and think about what could conk us on the head and what we can do to avoid the unpleasant side effects.

Just Say No to “Straight-Line” Entrepreneurship!

Posted on July 28, 2019 by anentrepreneurswords

I’ve advised every entrepreneur with whom I’ve ever worked to develop a business plan. But I never expect that the path to success outlined in such plans will ever be precisely followed. Some people say that a business plan is a blueprint for the organization. Nah, I don’t think so. I see the business plan as a starting point. I’m convinced that some businesses fail because the entrepreneur hews too closely to the plan. He or she fails to recognize the little signs along the way that point to major pitfalls for which a deviation is warranted . . . or enormous opportunities that will be missed due to a blind devotion to “the plan.”

The notion behind the business plan should be to organize our thoughts around a concept. That concept is actually the Vision, or what it looks like when we get there. An organized process for achieving the vision is extremely important for without it we find ourselves all over the map and failing to make any tangible progress. One of the problems for many entrepreneurs is working too much “in” the business rather than “on” the business. They become bogged down in the organized process tending to minor details best left to others. And weeks, months or even years later they look up and realize that the vision is still a distant fuzzy form way out in the distance. They are the victims of “straight-line thinking.”

Every organization needs some straight-line thinkers and doers. If not for them, there would be sheer chaos all the time. But straight-line thinking is not the job for the entrepreneur. The entrepreneur continually works to bring that “fuzzy form in the distance” into sharp focus. He or she realizes that there will be obstacles along the way and works to anticipate them and determine the path around, under or over. The straight-line thinker runs into the obstacles and is stopped – maybe permanently.

Straight-line systems and processes are critical. That said, they should be periodically reviewed and modified as necessary to meet the continually changing needs of the business. It’s the strategies that must be nimble and flexible. The simplest analogy is that of a car driving down the road. We are going from Temecula to Tucumcari which is nearly a straight 1,000-mile shot across I-40. Just west of Flagstaff the highway construction signs begin to appear – Road Closed Ahead. And the next thing we know there’s a detour on West Route 66 through Flagstaff. We follow the detour and a few miles later we’re back on I-40 on our way to Tucumcari, no worse for the wear. Easy peasy – right? The problem in the entrepreneurial world is that the detours are not so straightforward. Sometimes it’s a challenge to even know that there’s a need for a detour.

Exactly how do we decide when to be flexible with “the plan?” The answer is . . . always! We need to pay a great deal of attention to our customers and understand what they want and need. If we don’t, we may miss subtle signals that inform us that their preferences are shifting. We must stay abreast of what our competition is doing and especially how demand for our products and services might be changing. If a competitor is quickly garnering more market share, we had better know it and be prepared to react accordingly. It’s equally critical that we stay plugged in to the regulatory environment at all governmental levels. Understanding early in the game that a proposed set of rules or new laws could adversely impact our business gives us a chance to re-tool our operation to minimize the downside. And, we must have a constant pulse on the status of our team. Are our team members feeling fulfilled? Is their compensation in line with the work they are doing and the results they are producing? Again, if we aren’t mindful of our team, we’ll be caught flatfooted when someone jumps ship at a time we least expect it. Finally, while keeping our head down and putting one foot in front of the other, we may miss a golden opportunity that was unanticipated and could accelerate our sales and punch-up our bottom line in a major way.

Look, I’m all about focus and paying attention to the details. But as entrepreneurs, sometimes by following the straight-line path we’ll walk right into the mouth of a hungry grizzly bear. To thrive and prosper we use our business plan as a starting point; develop a strong set of systems and processes; but are nimble and flexible with the strategies we deploy that deliver us to our ultimate vision.

The “Fired” Entrepreneur

Posted on November 11, 2018 by anentrepreneurswords

Nathan is an entrepreneur who started a medical device company four years ago. The enterprise is really beginning to scale with 47 employees and top-line revenues that exceed $10 million. His gross margin is steadily improving and serious profitability is within sight. With all of his success however, Nathan is finding each day to be more and more frustrating. He is pushed and pulled in many directions and is constantly being hounded by members of his team to make a myriad of decisions. He worries about whether things are beginning to spin out of control, and the go-go nature of his organization is beginning to take its toll.

What Nathan is experiencing is very common for entrepreneurs with companies at this stage of growth. Often, Nathan finds himself enmeshed in the tiniest of details. While it may be satisfying for him to have such a thorough understanding of every aspect of his business, something in the back of his mind tells him that this practice is not sustainable. In the final diagnosis Nathan is spending too much time working IN his business and not enough working ON it.

I know many entrepreneurs who suffer this condition. I’ve certainly been there myself. We reach a degree of early success in our business by paying close attention to detail. Our focus is laser-like. All of this becomes one of our primary points of differentiation. But maintaining this level of focus on tactics and granularity does not allow us to scale if we continue to be in the center of it all. By the time we are starting to scale on a regular and significant basis, our energies need to shift toward becoming more strategic – that is, working ON our business. Many entrepreneurs want to lead by example. They are proud of the fact that they can go onto the plant floor and operate a machine that produces a thingamajig. In Nathan’s case, he considers it a badge of honor that he has the uncanny ability to design a state-of-the-art medical device from start-to-finish.

Here’s the problem with Nathan’s approach. He may be sending a signal to his team that they are inadequate as product designers even though this may not be true. The team may also develop a tendency to sit back and wait for Nathan to “make his move.” They are thinking, “Why bother, Nathan is going to jump in any way!” Further, there are other pressing issues that Nathan may be leaving unattended – or he may be intentionally avoiding them altogether. Eventually the lack of strategic direction will trap the company in a perpetual state of go-go where everyone feels as though they are on an endless hamster wheel and not getting anywhere.

So what exactly does working ON the business mean? For Nathan, he needs to create a clear vision for his enterprise and communicate it in an understandable fashion to all 47 of his team members. He needs to work with his senior leaders to establish Key Performance Indicators (KPIs) that he monitors collaboratively with them. Nathan needs to have a deep understanding of his industry, its trends and how he should tweak and refine his operation to take advantage of this knowledge. He will also work with his senior team to develop specific strategies that are designed to deliver on his multi-year vision. Perhaps he’ll call on different customers periodically to learn more about what they think of his company and the products it provides. Nathan should “fly” between 50,000 and 100,000 feet most of the time. But there may be special situations where he swoops down to 500 feet to verify something he’s been told or to share domain expertise for training purposes.

I’ve known (and mentored) entrepreneurs who simply don’t want to move to a model of spending 75% or more of their time working ON their business. Working IN their business is where their heart is and where they are most comfortable. Not only that, they are really, really good at what they do. My advice has been to “fire” themselves from their CEO roles and hire someone to handle this function. When they finally get past their ego, they realize that they still own the business and make the final decisions. In Nathan’s case, if he’s truly a superstar medical device designer – and if this is where his passion lies – he’ll be happier (and richer) by hiring someone to work ON his business while he works IN it.

Spending the majority of our time working ON our business will yield positive results. But if doing so isn’t appealing, we should look in the mirror and say, “You’re fired!” Then we can hire a professional to handle this important function and devote our time and energy to that which we do best.

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 12 – Second Place.

Driven or Driving?

Posted on May 6, 2018 by anentrepreneurswords

There’s a Netflix series that I am enjoying entitled, “Better Call Saul.” It’s about a scummy low-life ambulance-chasing Albuquerque lawyer named Jimmy McGill. Spoiler alert – in one episode, McGill becomes a minor celebrity when he rescues a man hanging from a billboard. A wealthy eccentric rancher sees the local newscast video of the rescue and calls McGill for a meeting. The rancher proceeds to announce that he and his multi-thousand acre ranch are going to secede from the United States. He needs a lawyer and offers Jimmy $1 million to handle the case – $500,000 up front and the other $500,000 when secession is final. You can see McGill sitting in the rancher’s living room – about to burst into a massive happy dance. The rancher goes to his safe and brings back a tray with bricks of 100 dollar bills. Wait for it . . . when McGill takes a look at one of the bricks, the bills are emblazoned with the face of the rancher! Perfectly legal tender portends the rancher, in his newly formed country. The scene ends with McGill driving away from the ranch in his beaten-up two-tone Suzuki Esteem.

You may be wondering what this television episode has to do with entrepreneurship. Jimmy McGill was clearly “opportunity-driven.” In other words, opportunity knocked and he answered. You may also be wondering what’s wrong with this – why wouldn’t every entrepreneur grab opportunities as they emerge? And that’s just the problem. Being opportunity-driven is effectively allowing external factors to shape our businesses and lives. Sometimes we win and sometimes we end up with a brick of fake 100 dollar bills.

There’s a great temptation for young organizations (and young people) to “grab” opportunities as they see them. This is certainly understandable. Perhaps we don’t have a lot of traction or credibility yet and need to pay the bills. The entire career of many entrepreneurs is stuck in the opportunity-driven mode. I call it the “Jim Rockford-$200-a-day-plus-expenses” approach. Those of you old enough to remember James Garner’s Rockford Files television series from 1974 – 1980 can relate to this. As a private investigator, Jim Rockford would do anything (mostly legal) for $200 per day plus expenses. I loved that show, but it taught me a great lesson – the lesson of personal limitation. Rockford would pretty much take any case that came his way and limited himself to a fixed amount of compensation and lived hand-to-mouth in a trailer on the beach.

There is another way. It’s called “opportunity-driving.” The difference between being opportunity-driven and opportunity-driving is rooted in strategy. The entrepreneur that is opportunity-driving is operating on a very strategic basis. He or she has a winning aspiration; knows where to play; knows how to win; has developed core capabilities and resources, and has created the necessary systems and processes. Utilizing this approach, the entrepreneur is focused on creating opportunities that fit the strategy.

I can relate this concept to my own business interests. In the earlier days of our organizational evolution, we would take pretty much any business that dropped in our lap. Our property management operation handled all sorts of properties – apartments, condominiums, office buildings, shopping centers, industrial facilities, and even a golf course at one point in time. We rationalized accepting assignments of all types by positing that we were in the property management business. It’s true that we developed enough critical mass with these various types of properties, but I know for a fact that not all of the business was profitable. In fact, we lost money on certain assignments. We also claimed that we were taking assignments to develop relationships that could grow into something bigger and yes, profitable. Once in a while that happened. More often than not, it didn’t.

Today, we are much more targeted with what we do. Our different business units are disciplined to handling projects that are strategically aligned. And yes, we once again are involved with a golf course, but only because it came with the 612-unit apartment community that we acquired as part of a strategic initiative. Fortunately, we found a competent operator to whom we have contracted the golf course operations since this specialty is outside our wheelhouse.

Being an opportunity-driving entrepreneur will almost always produce better results than being opportunity-driven. To accomplish this we must be strategic and disciplined.

Five Reasons Exponential Growth Can Be Elusive

Posted on April 22, 2018 by anentrepreneurswords

Toby founded a small construction company that does quality commercial work. While his company’s growth has been extraordinary, he is concerned that it doesn’t feel like he’s “broken out” yet. And his biggest worry is that he doesn’t see how he’s going to achieve the scale that he desires. In fact, there are signs that his growth is starting to flatten out. Toby is struggling to understand what is lacking in his approach to building his business. This is a very common problem for many small businesses where the founder has lofty aspirations . . . and even loftier expectations. Let’s look at some of the more common reasons that growing to scale is such a challenge.

Lack of Differentiation – We win when we are able to offer a product or service that is materially different than our competition. Toby thinks his services are differentiated, but in reality they aren’t in a substantive way. He insists that he offers the best customer service of anyone in the market – but that’s a claim that all of his competitors make as well. What should Toby do to tweak his products and services so that they are in much greater demand? He should start by gaining a better understanding of his customers and prospective customers. Exactly what are the problems they are encountering with their construction projects? What are the most important things they want from their contractor? Toby needs to spend time interviewing as many people as he can to identify what the customer wants in the most granular fashion possible. Then he needs to refine his product/service suite to deliver what he has been told. Too often, we think we know what the customer wants – or what we think is best for the customer – rather than actually asking them over and over.
Deficient Strategy – A Strategy Cascade starts with Winning Aspirations that leads to Where to Play, then How to Win, then Capabilities Needed and ends with Management Systems. Many small businesses have a poor to no strategy at all. Many entrepreneurs think tactically rather than strategically. Toby has this affliction. When asked, he says his strategy is to regularly attend various networking functions and try to identify business people who may be undertaking a construction project. Then he intends to do his best to convince them to use his firm. Unfortunately he has no real plan to get from Point A to Point B.
Small Thinking – Toby says within seven years he wants to build a business with $10 million in annual sales. He’s already at $3.5 million. My question is – why only $10 million? Why not $100 million? I’ve met very few entrepreneurs that have BHAG – Big Hairy Audacious Goals. Look, there’s nothing wrong with growing a business to a respectable level. But if one of the objectives is to scale-up in a major way, thinking really big is requisite. Toby should start by dreaming as big as he possibly can, then work backward to see what will be needed in the way of resources to realize his massive dream.
Working “In” Instead of “On” the Business – In addition to small thinking, entrepreneurs often spend too much time working “in” their business instead of “on” it. Toby is involved with every cost estimate. He spends a lot of time on job sites and performs the final interview of every employee that is hired. There’s no question that he’s a “hands-on” business person – and he’s very proud of this fact. In this case, Toby is his own worst enemy. He hasn’t yet learned that it’s imperative to delegate if he wants to scale his company. When a company is very small, the founder must spend a great deal of time as a jack-of-all-trades out of necessity. But this isn’t sustainable if real growth is to be achieved. The entrepreneur who can scale his or her company in a serious way has figured out how to stay focused on the big picture and leave the smaller details to others.
A Lack of Patience – I’ve said many times that it’s difficult for fast-moving, hard-charging entrepreneurs to be patient people. I have had this problem my entire career. Nothing ever happens as quickly as I want. Toby gets antsy when his business isn’t performing to his expectations. Part of the problem is the lack of a Big Vision and a coherent Strategy Cascade. When a comprehensive business plan is created, it includes a timeline that can be monitored allowing for refinement of the plan to stay on track. Toby will become much more patient when he’s working his plan and can see how his performance is matched with his timeline.

There are other reasons that a business fails to grow and scale. But meaningful differentiation of products/services; a well-designed strategy; thinking big; spending enough time working “on” the business, and maintaining patience, are critical elements to the scaling equation.

Rabbit Trails

Posted on June 18, 2017 by anentrepreneurswords

I’ve had a number of conversations lately with bright energetic entrepreneurs. In each instance, they had a burning desire to build their business. And in all cases, they were filled with ideas, but implementation was a challenge – after all, the day-to-day aspects of running their businesses needed constant attention. It’s easy to see what often happens next. I call it rabbit trails. We become enamored with one idea and rush to put it into action. Then another idea emerges and yet another. Meanwhile every time a “rabbit” pops up we are ready to chase it down its hole. Needless to say this is an exhausting process! And we never seem to get where we want to go.

There is a cure for rabbit trails. Very simply, we need to know what it looks like when we get there. In other words – what’s our vision? Think about it this way. The weather is miserable outside – we want to relax in the warm sunshine. We know that it’s sunny and warm in Florida, so that’s where we head. Our vision is relaxing in the warm sunshine. We plot a course via air or car to get there. Now, here’s the rabbit trail approach. The weather outside is miserable. We jump in the car and start driving to get away. An off ramp appears ahead and we take it thinking maybe the weather will be better where it leads. As we drive along the frontage road we see a sign directing us to yet another destination and we make the turn. Eventually after multiple detours . . . we run out of gas. The analogy is similar to what it’s like when we run our business without a vision.

My advice to my entrepreneur friends was the same in every case. Start with the end in sight. Spend the time necessary to truly understand what it looks like when you get there. Think big and even bigger. Decide upon a timeframe. Are you looking out three years, five years or even longer? Avoiding rabbit trails is critical. Having clarity about where we’re going is the solution.

Now it’s time to work backwards. By understanding where we’re going we can identify the course that we’ll need to take to get there in the prescribed timeframe. This course may appear to be fairly precise but we all know that there may be a need for corrections along the way. By “reverse engineering” our vision we can determine our strategy for achieving it as well as the individual tactics that will support the strategy. A big vision may require big resources and this process will help us identify the level of human and capital resources. All of this will help us assess how realistic our vision is and guide us to make the necessary adjustments.

There is another aspect to avoiding rabbit trails. I’ve written several times before about the notion of “why” we do what we do. Our organizations also need a “why.” In Corporate America today a CEO can tell us what his company does. He can tell us how it’s done. But when asked “why” his company does what it does, he may struggle with this question. Often the answer may be, “we do what we do to produce a return on investment for our shareholders.” But that’s not really a “why.” There are nine “whys” that include: 1) Doing things the right way; 2) Doing things a better way (innovation); 3) Making sense of complexity; 4) Making a difference; 5) Creating trust and building relationships; 6) Simplifying things; 7) Mastering things; 8) Challenging the status quo and thinking differently, and 9) Creating clarity. Often the “why” of an organization mirrors the “why” of its founder/leader.

Understanding our personal “why” and the “why” of our organization will enable us to develop a vision that is congruent with that “why.” Thus it is critical that the “why” and a vision be developed in concert. We will struggle to implement a vision that isn’t aligned with our “why.”

Rabbit trails can be all consuming. Determining our “why” and defining a clear picture of what it looks like when we get there will help keep us on the path to success.

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.

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