The “Fired” Entrepreneur

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.

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.

Five Reasons Exponential Growth Can Be Elusive

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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.

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 93 – Chicken Feed.

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.

Curveballs and Changeups

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 of 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 backfill 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 roadmap for us to follow, but it doesn’t account for every possible instance where we may need to be flexible. 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 of 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 end 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.

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On It or In It?

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.

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.

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30,000 Feet

Question: Sometimes I tend to get caught up in the details and miss the big picture. What should I do to develop my abilities to have a broader focus?

Answer: Life in general and entrepreneurship specifically, is a mixture of strategy and tactics. It is very easy to fall into a routine of dealing with tactics on a daily basis and letting someone else worry about strategy. After all, this subject is a bit fuzzy anyway. The work has to get done and if the details aren’t tended to, then everything falls apart – right?

Actually the reason many people are extremely tactical is because the overall strategy has never been adequately explained to them. Let me give you an example that borders on the absurd, but will illustrate the point well. Let’s say that you are blindfolded and led into the cockpit of an airplane. The blindfold is removed and you are told that your job is to fly the plane. Let’s also assume that you actually know how to fly the plane. Great. Now what? No other instructions are given. Are you supposed to fly the plane to another destination? If so where? Will there be passengers on the plane or are you flying cargo? Maybe this is just a test flight. Are you starting to get the picture? You know how to fly the airplane – that is to say, that you understand the tactics. But you have no idea what the end result is supposed to be – that is to say, the strategy. By now it’s pretty obvious that the “What” is the strategy, and the “How” are the tactics.

Stop and think about you daily routine. Do you understand the strategies to which your tactical efforts are aimed? If you are a leader, how well do you explain the strategies to those you are expecting to implement tactics to deliver said strategies? This may sound like a very simple premise but it’s one of the biggest areas of miscommunication in our lives today. As a result, many people toil in frustration, feeling like one more cog in a wheel that is going nowhere.

Starting today, resolve to understand the strategic aspects of what you are doing. Make certain that you communicate the strategies to everyone involved if you are the leader. If the strategy is to deliver better customer service than any of your competitors, make sure that you clearly articulate this and make everyone aware of the metrics to be used for accountability. If your team understands the strategy, it can develop the tactics that will lead to success. But if the strategy is unclear and poorly communicated, don’t be surprised if you don’t have the buy-in of the team members.

Each of us wants to feel as though what we are contributing matters. Only when the strategy is clear to all do the tactics matter. And then our sense of self-worth can be fulfilled.

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.

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