Uncle Ralph's e2e forum Blog by Del Chatterson

The Essence of Entrepreneurship

2010-11-09T13:05:00.002-05:00

What makes a successful entrepreneur?

The question is often asked and there are many different, but acceptable, answers. To add my perception, I think there are certain personal character traits mixed with particular skills, knowledge and experience that add up to the "essence of entrepreneurship" that leads to success.

Here is my list of what I think adds up to be the Essence of Entrepreneurship:

Burning desire to turn an idea into a successful business.
Determination and persistence to achieve results.
Treating every obstacle as just another challenge to be met.
Recognizing the challenge to provide both strategic leadership and operational management.
Consistently communicating vision, mission, values.
Willingness to change the plan but not the goals or ideals.
Strong social awareness and empathy for people.
Motivated by more than the money.
Good marketing and sales instincts - knowing what appeals to the target market.
Understanding the industry measures of performance for the business.
Continuously aware of business results relative to planned performance.
Does not waste time - the most precious non-renewable resource.
Knows to decide when it's time to decide, not waiting for all the information to be sure it's right.
Mix of strong industry knowledge or technical/professional skills with good instincts
Acceptance that success is a very imprecise objective and that never being satisfied is the way to continue being better and doing better.

Not a short list and not all essential. But also probably not yet the complete answer to what it takes to be a successful entrepreneur.

Let's keep working on it.

Richard Branson's Five Secrets to Success.

2010-10-15T15:11:00.002-04:00

Multi-business billionaire Richard Branson has always been one of my favourite examples of a model entrepreneur (and the most successful practitioner of guerilla marketing.)

He recently described his short answer to the frequently asked question, "What is the secret of your success?"

Here is the summary and a link to his article.

After reflecting across 40 years and thinking about what characterises so many of Virgin’s successful ventures, I have come up with five "secrets" to business success.

1 - Enjoy What You Are Doing.

2 - Create Something That Stands Out.

3 - Create Something That Everybody Who Works for You is Really Proud of.

4 - Be a Good Leader.

5 - Be Visible.

Go over to Entrepreneur.com to read his five business tips in full.

Listen to Richard.
He's about as thoughtful, creative and successful as any entrepreneur on the planet.

Back to School means Back to Business too?

2010-08-25T17:03:00.001-04:00

Yes, it's time to get back to business.

End of August means summer holidays are nearly done, kids returning to school, and it's time to re-think your business too.

Seize this opportunity to assess your current performance and come up with an action plan to improve results and enhance the value of your business.

Here are some ideas to inspire you to get back to business and do better than ever.

Check your numbers against the top performers.

You probably already know the key variables to manage profitability in your business - gross margin, sales per square foot, or sales per employee, for example – but have you compared your numbers to the top performers in your industry lately?

How has the current economy affected their growth rates or performance ratios compared to yours? You will have to do some homework to get the answers. Be sure to find the most comparable companies by industry size or type of business and then try to select the top performers. You may get useful comparisons from available data on public companies, from trade journals or from industry data bases. Your banker likely has access to RMA (Risk Management Association) data that is used by the banks to assess your credit worthiness. It is worth knowing what they are looking at and how they assess your performance.

Ask for key stakeholder opinions on your performance.

In addition to the bank’s assessment you should also regularly solicit feedback from your other key stakeholders. Those would be your employees, your customers and your suppliers.

The key questions to ask are:

• How would you describe our company relative to our competitors?

• What do you think we do best?

• Where do you think we need to improve?

• What opportunities do you think we are missing?

Listen and learn from the feedback.

Often business owners are surprised to find that the perceptions of their employees, customers and suppliers are quite consistent, but very different from their own.

You may think your business is best known for low prices and fast service, but others see you as having expertise that is valuable and worth paying the perceived higher price and accepting relatively poor service. Oops!

Now you have something to work on. First, try to ensure that your perceived strategic position in the market is the one that you want; then work on delivering what is expected. And finally, assess the feedback on perceived opportunities that you are missing. You have already established a receptive audience to new initiatives, so follow-up quickly.

Verify your corporate fitness for growth

In order to pursue new opportunities and grow your business it is also timely to verify that you have a solid foundation for growth. The foundation needs to be resilient, flexible, and expandable in all the dimensions related to organisation, facilities, financing, and IT infrastructure.

A fitness test on all these areas is a necessary first step before launching new initiatives.

Focus on maximizing long-term value.

In these processes of performance review there will be some obvious and easy “quick fixes” to generate revenue or cut costs. But as Einstein apparently once said, “For every serious and complex problem, there is an easy and obvious answer, that is wrong.”

For businesses the error is usually to focus on short-term profitability, rather than long-term value. In fact, the accumulation of short-term decisions to control costs or push revenue may actually diminish the long-term value that arises from sustainable and profitable growth. Typical examples are under-qualified staffing, limited capacity software applications, cutbacks in marketing and promotion, chasing big customers with low prices or accepting questionable credit risks.

Identify and select the priority opportunities.

After completing the review and assessing the opportunities, the list of potential action items may be long. A selection of priorities to address in the immediate future is required. And more than three priorities means you have not yet made a selection, only a ranking. Try harder.

Make a new plan.

With a short list of priorities, you can make a realistic and achievable plan to improve performance. Simply list the steps required with names and dates assigned to each step.

Then make it happen.

Take this “back to school” opportunity to rethink your business and make something happen. Remember if nothing changes, nothing happens.

Be better. Do better.

LISTEN TO MOM

2010-08-19T16:38:00.002-04:00

As my mother once said "Don't do anything you wouldn't do if I was there." Ouch! Now that was a great way to keep me on the straight and narrow, instead of looking for trouble as a teenager.

I've often thought about that advice since then and generously offer it by thought and gesture to others. Especially those dangerous drivers flying by on the highway - "Does your mother know you drive like an idiot!?"

Mothers are an important influence to guide our ethical conduct in business too. That was apparently understand by the jeweler in Cranbrook BC who had a conspicuous sign posted next to the cash register stating "We give instant credit to all our customers. If they are over 90 and accompanied by their mother." Good credit guideline!

Most entrepreneurs and executives probably don't often think of their mothers on the job, unless she's the boss – like Ma Boyle at Columbia Sportswear. Maybe they should. We would probably have fewer issues of corporate misconduct if their mothers knew what was going on. Perhaps instead of all those current management courses on ethics and corporate responsibility, we only need to remind decision-makers to ask themselves "Would my mother be proud of me if she knew what I was doing?"

My Uncle Ralph persona is partly inspired by my father and his unique character and style of dispensing wise advice, punctuated with easily remembered one-liners (“Always do good work and charge like Hell!”).

But my mother also had a strong influence on my personality and management style, although it was more subtle and less frequently stated than demonstrated. Quiet, hard working, good humoured, responsible and respectful of others; those are the characteristics that immediately come to mind. Things we all learned from her example, simply by being around her. Of course, she was also good at reminding us when we forgot those important principles or our behaviour was not up to her standards. And it's still a pleasure to make her proud.

That's why I recommend you use the test "What would Mom think?" before your actions and decisions in business too.

Thanks Mom. And Happy Mother's Day every day.

On the other hand, “I am not your mother.”

Now I am suggesting that we might have better decision-making if managers asked themselves what their mother would think of their actions. But what about those employees that expect you to act like their mother?

What is the right level of caring and compassion before it becomes more personal than a working relationship should be? Is there a reasonable limit? Is it appropriate to get involved with issues that are strictly personal? Do employees become part of your extended family with all the additional obligations that implies?

Some recent exposure to business owners dealing with their employees' personal issues has caused me to be more cautious about getting involved. Once the managers start lending a sympathetic ear and then a shoulder to cry on, it soon becomes more time consuming on and off the job and creates a relationship that is difficult to steer back to business only. It also becomes a distraction for other employees and creates new concerns about employee favouritism.

My guideline for these situations would be to decide whether you would do what's being requested for every employee in the same situation. Personal advice? Time off? Cash advances? If not, then say no to the first request. Don't start a precedent that you're not prepared to write into the policy manual.

And don't be afraid to clarify the relationship, "I'm your boss, not your mother".

Those are my thoughts on Mom's influence on your business. Do you agree? Any comments?

Teaching kids entrepreneurship

2010-07-06T14:12:00.001-04:00

Check out this video and tell me if you agree that it actually promotes the most negative stereotype of entrepreneurs as greedy and manipulative - in it for the money and part of the problem in our consumption based economy.
"Let's Raise Kids to be Entrepreneurs ..." http://on.ted.com/8Qs5

The video at the end of this TED presentation is a more positive and inspiring view of entrepreneurship but most of the commentary seems to be focused on his own version.

Thought provoking, but not convincing that this is what we should be teaching kids in school.

Learning Entrepreneurship at School?

2010-07-05T12:38:00.001-04:00

I am starting to see more articles and commentary about the "need" to teach entrepreneurship at school. Is that a good idea? I have taught Entrepreneurship courses at Concordia in the Continuing Education program, mostly to young adults seeking relevant knowledge to advance their careers or to manage their own business.

Should Entrepreneurship be taught sooner? Probably not in elementary school, but high school or college? I tend to agree with Rick Spence (Financial Post, June 28, 2010), that the emphasis should be on entrepreneurial qualities such as creativity and innovation, problem solving, critical thinking, collaboration, persistence and leadership. I would add curiosity, self-confidence and independence.

Entrepreneurship packaged as a course is more appropriate at levels where students are considering career options. But it would help to have some early education on basic economics from savings and investment to financial and economic systems. I fear the bias of many teachers is that big business is evil and that entrepreneurs and the capitalist system create more social problems than solutions.

It would be an improvement to have some balance added to that point of view. I'm not optimistic. The media focuses most high profile stories on the disasters and the criminals among us. It's hard to find the heroes to emulate. After Donald Trump or Richard Branson (whom not everybody loves), who do we have doing good PR for business and entrepreneurship as a means of having fun and doing good?

Do you Tweet?

2010-06-01T16:35:00.001-04:00

Nope, useless waste of time.
Wrong!

Follow me on Twitter

Like the old days when you first built a Web site, the only reason you are now looking at Twitter is because ... "it's cool,
my kids tell me I have to,

customers are asking for it".

Let me give you some other reasons.

My Thoughts on
How to Use Twitter for Your Business

First let's review what it is. Aside from all the "New Media" hype and the old media fascination, Twitter is essentially a simplified version of the bulk email newsletter or a short form (140 character) Blog entry. So if you use either if those, you need to check out Twitter.com

It also has elements of the social media sites, like Facebook or LinkedIn, but is simpler, more spontaneous, easy and fun. Not looking for fun? Then consider that it is also interesting, informative and occasionally entertaining to be a Twitter follower. You get new personal insights as well as some good tips, tricks, and tactics from the people you already know and respect - from Harvey Mackey or Tom Peters to Bill Cosby or Tony Robbins. You choose for yourself if you want to follow the gurus or to be a celebrity groupie.

I use Twitter to maintain contact with friends and associates, think out loud, play with words, create new content, add to my Web presence and build a new audience. Any of those may be important to you and your business. It's easy and fast to set up and use or you can just visit and browse the content. Try it.

Or visit my Twitter account and follow me if you're interested.
Follow me on Twitter
See you there.

Every Business is Global

2010-05-31T17:13:00.000-04:00

You may think your little local business is too small or unimportant to be affected by the global economy, but unfortunately there is nowhere that is sheltered from the fallout - good or bad.

It doesn't matter whether it's an oil leak in Louisiana, or a torpedo off Korea, or civil service perks in Greece, the consequences for the global economy will get passed on down to you and your business, wherever you are. It may be interest rates, tax increases, program cuts, exchange rates or simply changes to your operating costs and demand for your products and services, but you will see a connection.

So what? Well, obviously you don't have much control over events or any more ability than the plethora of erroneous experts to predict the event. All you can do is BE PREPARED. That means plan and manage with a large margin for error. We live in volatile times and can only expect the unexpected; on top of the potential for the worst case scenarios.

I don't mean to be too pessimistic, it is also possible that things could turn out much better than expected. Be prepared for that too.

Nobody said it was getting easier.

FREE Business Plan Guide to Join "Entrepreneurs Only"

2010-05-27T17:22:00.000-04:00

I am now offering a FREE copy of "The 10-Minute Guide to Business Plans" when you join the "Entrepreneurs Only" mailing list.

The subscribers receive regular updates, tips, ideas and information to help entrepreneurs be better and do better.

The 10-Minute Guide is a quick summary of all the basics to prepare an effective business plan and includes the recommended financial projections and a sample of a successful plan from a client.

Check it out yourself at: http://www.diybusinessplan.com/FREE10-minuteBusinessPlanGuide.htm

I will be pleased to have you join us with entrepreneurs from around the world.

Do-It-Yourself Business Plans

2010-03-23T16:56:00.005-04:00

It's done.

I finally expanded the quick 10-Minute summary into a Complete Do-It-Yourself Guide to Business Plans.

Including:

A clear concise 50-page Guide that describes all the requirements for a great Business Plan .

Valuable ideas and information on the personal and strategic business decisions required before you start

Recommended Templates for your Financial Projections

A quick summary 10-Minute Guide to Business Plan basics

An actual sample Business Plan that delivered results

Check it out at: http://www.diybusinessplan.com/DIYcompleteGUIDE.htm

Why Do-It-Yourself?

As a management consultant, I have often been hired to help with Business plans. (As an entrepreneur, I've also written a few of my own.) But if you hire someone, it still needs to be "your" plan. Nobody can go away and write it for you.

It needs to reflect the entrepreneur's passion, competence, knowledge and commitment to the business. A consultant can help with the planning process, words, numbers, and presentation, but investors, lenders and strategic partners need to know the entrepreneur behind the plan, not the consultant.

Learn how. And do it yourself.

Breaking even is hard to do

2010-03-13T12:50:00.005-05:00

Checking my portfolio after reading the Canadian market was up 60% since March last year, I was disappointed to see that I was just barely above the original investment values before the crash.

That didn't seem fair as the crash of 2008-2009 was widely reported as knocking values down by only 40%. I was expecting to be up by more than that.

Unfortunately, it's a lesson in the inconvenient truth of basic arithmetic. If your original investment is down by 40%, then it has to come back by 67% to return to break even. Do the math.

I agree it doesn't seem fair, but that's how it works. Breaking even is hard to do.

Being concise

2010-03-11T10:57:00.004-05:00

Finally we're writing the all important Executive Summary to the Business Plan. And, of course, it has to be concise.

(Most advice also says to write it last, but I think it's a good starting point as an outline of all the points you will cover in more detail - so I recommend that you do a draft Executive Summary first.)

But the final objective is prepare a brief (1 - 3 page) summary of the key points in your Business Plan, which might be a 20-page document or more, plus all the supporting data in appendices.

An excellent guide to the Executive Summary is available at Garage Technology Ventures (Garage.com). They emphasize that aside from being concise and still answering all the important questions the Executive Summary is primarily a selling tool for your Business Plan. It allows potential lenders, investors or strategic partners to quickly decide if they are interested in participating in your plan.

And even more important than the executive summary is that one sentence or paragraph in your cover letter or e-mail (or elevator pitch) that convinces them you may be onto something that could be a viable business.

Golden Glow of Winter Olympics 2010

2010-03-02T16:29:00.004-05:00

This week it feels especially good to be Canadian. Sorry (which we apparently say too much), but I just cannot help myself.

Being Canadian is sufficient to feel proud and strong after being such successful hosts of the Winter Olympic Games and winning an all-time record 14 gold medals. I know I didn't do much more than watch and cheer, and clap with my red souvenir mitts, but I still feel part of the team that hosted the games and did so well in almost every event.

Proud to get to know so many new Canadian heroes.

So many who worked so long and hard for their few seconds, or their long ordeal over ice and snow, to prove they could be the best in the world. Such an inspiration to us all to persevere in pursuit of our own goals - however humble they may be.

Go Canada! There is more for us to accomplish and more of us to expose to the world.

Olympic lessons for entrepreneurs

2010-02-11T14:27:00.016-05:00

Enjoy the Winter Olympics in Vancouver, but don't miss the opportunity to learn some lessons to help your business go for gold!

You can help your business to perform like an Olympic champion if you take these ideas from the Olympics as your inspiration:

Have a four-year plan to achieve Olympic records

Decide: Go for gold, or Quit.

Learn from your losses

Push your limits

It's not for the money

Don't cheat

It's never too late

To see the full article visit: "Olympic Lessons for Entrepreneurs."

Be inspired to take your performance to Olympic heights.

Customer banned for life?

2010-02-11T13:41:00.005-05:00

Occasionally it's necessary to refuse business and fire customers, but banned for life?

A complaining Tim Horton's customer in St. Andrews New Brunswick has received legal notice that he is no longer allowed on the premises of either location in town. Ouch! The former customer is now brewing his own decaf at home instead of using Tim Horton's drive through.

Now maybe the franchise owner had good reason for banning the customer - disruptive behaviour is not good for business and needs to be stopped in the best interest of both employees and customers. But managing the fallout can be a bigger challenge. The customer has become an international celebrity and champion for better customer service as the story gets played out by the media. The owner seems an unfriendly tyrant defending bad product and poor service. He certainly hasn't done a good job of the PR.

Maybe a more tactful, diplomatic resolution would have been less provocative and provided less fodder for the consumer to go public.

Recycle your Business Plan

2010-01-26T14:50:00.002-05:00

I'm re-thinking my approach to Business Plans as I give another course on the subject at Concordia's Centre for Continuing Education. To consider alternative approaches, I recently reviewed other widely available resources on the Web.

All very un-inspiring. Not convincing in presenting the reasons to document a good Business Plan and entirely discouraging in describing the process for preparing one. Not likely to persuade any busy, results-oriented, documentation-challenged entrepreneur that it's a good idea and that they can do it for themselves.

So I have come to describe my own approach as "Recycling your Business Plan". That best describes the process I recommend of starting simple, then continuously reviewing, revising and expanding the plan to deal with more issues and answer more questions.

I'm reminded of the "million dollar napkin" that one entrepreneur boasts he used to start and guide his business simply by responding to the challenge to put it all on a restaurant napkin.Or the thousands of successful businesses that were launched "on the back of an envelope". It's a good start to your Business Plan.

Here are the steps I recommend to "recycle" your Business plan.

Remember the objective is to arrive at that communications document that confirms the business opportunity, describes your strategy and operating plans, and presents the financials to prove it will be a profitable and successful business.

Each step is a version of the Business plan that becomes more solid and detailed at each "recycling":

Describe the concept, business strategy, marketing slogan and target market on one page (or napkin, or envelope).

Confirm that your personal objectives, skills, personality, experience, contacts and knowledge are consistent with your business objectives.

Collect the market data on customers and competitors that confirms both the business opportunity and your ability to meet customer needs against competitive alternatives.

Do business feasibility test at your estimated sales volumes, pricing and operating costs to determine profitability. Calculate break-even sales and compare to your forecast.

Adjust sales forecasts and cost estimates to assure profitability.

Expand the financial analysis to include start-up costs, working capital required and the cash flow consequences to arrive at the financing required. How much, when, and how will it be recovered?

Document in more detail your business concept and strategy and all the operating plans for facilities, organisation, operations, marketing and sales. Add a section on the risks considered and your response to anything that may not go according to plan.

Complete the document and full set of financial projections against a checklist of the Business Plan requirements of your intended audience - management team, lenders, investors, strategic partners.

The next recycling step is to capture your Business Plan in a 2 - 3 page Executive Summary, in a 1-minute elevator pitch, and in a 10-slide PowerPoint for alternative presentation situations.

The final recycling process is to continuously refer to your Business Plan against operating results for each period. After review, check whether the plan and objectives are still valid, then revise plans or performance to achieve the business objectives.

That's it. A few simple steps that take you from a good idea to a well developed and fully documented Business Plan that will serve as a guide to management and will persuade others to invest in your plan.

Recycling is good.

Marketing, Sales or Customer Service?

2009-12-02T08:54:00.005-05:00

Choices to be made or all part of a continuum?

I believe they are the three elements of a process required to build long-term valuable customer relationships. Which is the primary value proposition of most businesses. (Buy once and goodbye forever is not a business model that works for anybody. If you can find one, please let me know.)

The three elements defined:

Marketing - to build awareness, interest, attraction and generate customer initiated action in your direction.
Sales - converting interested prospects into qualified, buying customers.
Customer service - ensuring that each customer is a satisfied, repeat customer.

Each step has to be done consistently well for the results to be achieved. But a choice still has to be made - which element are you going to be best at? Will you win from competitors on marketing, sales, or customer service? You cannot be best at all three.

From my experience as a second tier OEM brand name in computer hardware, we knew that we couldn't possibly out-spend or out-market the multinationals, but we could out-sell them -one customer at a time.

Winning on customer service was also a challenge - it's expensive to compete on warranty terms and technical support. So we went back to salesmanship in the service department - coaching staff on persuading the customer to be reasonable, patient, and give us another order, please!

So take a look at your own performance in marketing, sales and customer service - then choose, focus and build one of them into your competitive weapon.

Even Seth gets it wrong sometimes

2009-11-24T09:33:00.006-05:00

Seth Godin has to be the best at capturing concepts and then communicating them creatively.

You may know him best from his books, if you've heard of "The Purple Cow", "Survival is not Enough", "Meatball Sundae", "The Big Red Fez" or his original claim to fame -"Permission Marketing".

His Blog is also recommended reading for thoughtful inspiration on marketing and communications in general. (Click on the Blog link in the right margin.)

But even Seth Godin doesn't get it right all the time. And he admits it as he has re-issued his book "All Marketers are Liars" under the new title, (same contents) "All Marketers Tell Stories".

As he discovered, it may be a catchy title, but it is insulting and unappealing to the intended audience. Another lesson learned.

Good headlines are key

2009-11-16T17:28:00.009-05:00

Maclean's magazine arrived in the mail today and it's hard not to notice the four catchy headlines for articles in this issue. Starting with:

"THE FLU SHOT SCREW-UP
Can we fix the vaccination plan before it's too late "

And across the top banner:

WHY CANADA NEEDS THE MONARCHY
(Even if it's these two)

Amiel: GOD HELP DOGS

INTERVIEW: CANADA VS.
GARY BETTMAN

Now that's an issue that will get read today.

Are your marketing communications that catchy? Maybe too much sensational yellow journalism for you? (No coincidence this issue had a yellow cover?)

Still it's a key principle of marketing that images and colours may catch the eye, but headlines capture attention. If you can also qualify the reader and get their interest, then you've really got it right this time.

Too many networking choices?

2009-11-09T14:50:00.004-05:00

Something ironic about going to a networking meeting to learn about all the online networking choices.

Talking about Facebook, LinkedIn, Twitter and all the other social media opportunities for virtual networking without any face-to-face contact. But what about the breakfast meetings and seminars where you can meet real people and not their polished Web personalities? Two-way conversation face-to-face seems to me a much better way to present yourself or to meet others when you are offering professional services.

If the key factors to evaluate are credibility and integrity it is much easier to fake it on the Web than in person.

I'm not suggesting that online media cannot be helpful, but they should be complementary to other real-life expressions of your individuality and unique skill set. In particular, make your online presentation more real and personal by adding original content in your own words and include audio or video to complete the picture.

It all takes time and effort, so it's important not to waste time on unproductive networking opportunities or to participate ineffectively.

Seven Mistakes in PowerPoint

2009-10-20T10:20:00.004-04:00

Our PSN Breakfast Series on October 15th went well with three speakers on "Entrepreneurial Challenges" including my own presentation on "The Seven Biggest Mistakes that Enrepreneurs Make". (Lots of nodding heads and smiles of recognition from the audience even if no one wanted to admit to having made all seven!)

If you would like to review the PowerPoint slides, including Chris Murray's "Success Strategies for Internet Marketing" and Margot Uson's "Winning the War for Talent", they are available at PSNetwork.ca

Thanks for your interest.

The Seven Biggest Mistakes that Entrepreneurs Make

2009-09-15T20:10:00.012-04:00

The Seven Biggest Mistakes that Entrepreneurs Make

Which ones are you making? How can you avoid them?

I was recently asked to do a presentation with my associates at a breakfast seminar for business clients. We had arrived at the title “Seven Biggest Mistakes that Entrepreneurs Make” before I had the list prepared, so I decided to do a survey of entrepreneurs and their advisors to complement my own ideas. The feedback was enlightening.

Here are some of the suggested “Biggest Mistakes” from the survey:
“Cash flow, cash flow, cash flow”, “Afraid of Marketing and Sales, “Reactive, not strategic”, “Not delegating”, “Hiring too fast, Firing too slow”, “Not focused”, “Communicating too much, or too little”, “Not using consultants” (That last one was from the consultants, not their clients!)

The feedback also reinforced my own experience that it is OK to fail and make mistakes, as long as they are small, frequent, and early. It’s all part of the learning experience to get better. But big mistakes can kill your business.

Here is my final list of the Seven Biggest Mistakes that Entrepreneurs Make.

#1 Too Entrepreneurial
Certain characteristics of entrepreneurs are necessary for them to be successful. But if over-indulged they can lead to big mistakes. These include the tendency to be too opportunistic and not be sufficiently selective and focused; to be too optimistic and miss or ignore the warning signs; to be too impatient and expect too much too soon.

Entrepreneurs usually have great confidence in their instincts and consequently rely on “gut feel”. The mistake is to neglect or ignore market feedback and analysis of the facts. Being action-oriented, the tendency is to react and “fire” before the “ready, aim” stages are complete. Painful surprises can result.

Many successful entrepreneurs have achieved a lot based on their energy, charm, charisma, and persuasiveness, but then get caught by selling on personality, not on performance. Clients start to notice that expectations are not being met.

Entrepreneurs are expected to be decisive and demonstrate “leadership”. Both can be overdone – deciding too quickly and providing too much direction so that input, initiative and creativity are stifled.

“Doing it my way” often means improvising and learning on the fly, or sticking with what works, until it stops working. The mistake is in neglecting to evolve and grow by optimizing systems and installing best practices and latest technologies.

All these mistakes can lead to serious consequences, as a result of being “too entrepreneurial”.

#2 Lack of Strategic Direction

Another consequence of the action-oriented entrepreneurial approach is the tendency to get lost in the daily details and completely neglect the original strategic plan and objectives. The owner-manager soon becomes pre-occupied by operating decisions and all the demands on his time from customers, employees and the constant fire-fighting. It leaves little time for fire prevention.

This situation is worsened as the entrepreneur concludes that the best solution is “do-it-myself”. Not delegating to staff or using external expertise may seem like the least-cost solution, but probably undervalues the owner’s own time and expertise and does not lead to long-term solutions.

The entrepreneur may have good awareness of long-term strategic issues and had them in mind when the business was launched. But they are now neglected, and the original Business Plan (if there was one) is not documented, updated or shared.

Lack of strategic direction is listed here as #2, but may be the Biggest Mistake that Entrepreneurs Make.

#3 “That was Easy, Let’s Do It Again!”

Another common mistake that can have devastating consequences on the business is the over-confident entrepreneur who concludes, “That was easy, let’s do it again!” So he or she leaps into new markets, new product lines, or even a new business or investment opportunity.
It’s important to remember: Making money doesn’t make you smart.

Do you really know what you did to succeed? Or what mistakes and risks you avoided? Is now a good time to start something new? How much will the current business be impacted by new initiatives? Is your success really transferable?

Many successful entrepreneurs have made the mistake of jumping into a new venture – merger, acquisition, restaurant franchise or real estate investment – and blowing away the equity value they generated in their original business.
Another big mistake to avoid.

#4 Focused on Profit

Being focused on profit doesn’t seem like a mistake. After all, isn’t that the whole purpose of running a business? No, actually. As I explain to students in their first Finance class, the primary financial objective of any business is “to enhance long-term shareholder value”.
Many short-term profit-oriented decisions can hurt long-term value. Examples are many: cutting staff, maintenance or marketing expense; not upgrading systems and technology; accepting high credit risk or low margin customers; avoiding taxes, environmental or quality issues.

Most entrepreneurs are very focused on managing the bottom line by monitoring sales, gross margin and expenses. They always know those numbers.

But they are usually ignoring asset management, especially cash flow. The business may appear very profitable, but have constant cash flow challenges because management is neglecting inventory and receivables, in particular. And unfortunately it is not as simple as: Collect fast, Pay slow. Customer and supplier relationships can be at risk if cash flow issues force you to take that approach.

Managing the Balance Sheet also requires good management of debt and balancing short-term and long-term needs with short and long-term sources of funds.
And the Most Undervalued Asset doesn’t usually even appear on the Balance Sheet: Human Resources. That leads to Biggest Mistake #5.

#5 Neglecting Key Relationships

The key relationship for any business is the one between its owners and the staff. Management and employee communications are essential to business performance and often not managed very well. Key employees need to be recognized and engaged. Mistakes made with key employees can jeopardize the whole business.

Similarly, don’t make the mistake of being distracted by the most annoying and persistent customer. Your biggest customers are not likely the “squeakiest”, just the most important. Don’t make the mistake of letting them be neglected.

Do you need to squeak more yourself? Do your suppliers appreciate you enough?
Fast growth and profitability may be coming from one or two key customers or suppliers which can lead to over-dependence on their business. And your success may be convincing them that they don’t need you in the middle any more. Be wary.

Another key relationship not to be neglected: Is your bank a welcome and willing partner in your business? Remember “friends in need” have to be developed in advance.

#6 Poor Marketing & Sales

You know there is a problem brewing when you hear the entrepreneur explaining that “The product sells itself”, or “Price is all that matters”, or “Our Sales Reps need to do a better job”. These are signs of poor marketing and sales results. Usually the company is failing at both the strategic marketing level and at the execution of effective marketing and sales activities.

Not only are opportunities for profitable growth being missed, but the company may be on the downward slide to “out of business” without a well-conceived marketing plan and effective sales strategies.

#7 Distracted by Personal Issues

And finally #7 – Personal Issues that distract attention from good management of the business.
Personalities and their issues can seriously affect business performance regardless of whether they are owner, management or staff issues. Sometimes they are simply ignored until they become a problem. Sometimes they are a result of too much success and behaving like a rock star.

Family businesses in particular run the risk of favouritism and having family matters interfere with business success. Managing personalities and corporate culture are a particular challenge in family businesses.

In Summary, the Seven Biggest Mistakes that Entrepreneurs Make:

Too Entrepreneurial

Lack of Strategic Direction

“Let’s do it again!”

Focused on Profit

Neglecting Key Relationships

Poor Marketing and Sales

Personal Distractions

Now the obvious question is: How to Avoid Them?

The answer is: Balance!

Each of these Big Mistakes is a result of the entrepreneur failing to achieve balance between opposing approaches and decision making processes. Avoiding these mistakes requires the entrepreneur and business owner to:

Balance the Entrepreneurial Approach with Analytical Input

Balance Strategic Vision with Operational Detail

Add the Head and the Heart to the “Gut Feel”

Manage for Long-term Value not just Short-term Profit

Keep Personal Priorities in your Plan but Out of your Business

I hope that helps you to grow and prosper in your own business and avoid the Seven Biggest Mistakes that Entrepreneurs Make.

Biggest Mistakes that Entrepreneurs Make?

2009-07-08T09:44:00.006-04:00

I need your suggestions. I'm working on a presentation titled "The Seven Biggest Mistakes Entrepreneurs Make" and so far I have only my top four.

Most of them I've made myself and I'm sure I can complete the list, but it would help to have some consensus from other entrepreneurs and their consultants/advisors.

From your experience what are the most common mistakes and what do you recommend to avoid or fix them? I would appreciate your input.

For some hints, but here’s my list to date:

1. Neglecting strategic vision, too entrepreneurial/opportunistic/reactive/intuitive
2. Not knowing and managing your numbers
3. Neglecting key strategic relationships
4. Letting the product sell itself, poor marketing and sales support

Others have already offered:

5. Hiring too fast, firing too slow
6. Poor communication with employees
7. Under capitalisation
8. Poor research and planning
9. Neglecting to manage cash
10. Too corporate, no personality

And more…. So now it's your turn.

Thanks.

Back to Basics

2009-06-30T07:34:00.003-04:00

I introduced myself to a new corporate finance class yesterday and was reminded that, although much has changed in business and the economy since the 1970's when I first taught the course, the same basic principles of financial management still apply.

Not to be confused by current economic circumstances or the impacts of globalization, green themes or new technologies, the basic principles are worth remembering.

A quick summary may help you get back to basics too:

The primary objective of financial management is to increase long-term shareholder value, not short-term profits.

Long-term value requires ethical consideration of other stakeholders - employees, customers, suppliers, government - and respect for corporate social responsibilities.

Every financial decision needs to deliver an economic benefit that adds to shareholder value.

Risk and return are inevitably linked - expectations of higher return will necessarily involve acceptance of higher risks associated with volatality and uncertainty of results.

Continuous monitoring and improvement of financial performance requires analysis and benchmarking against prior years and the indices of top performers in the industry.

Higher fixed costs in operations or from debt financing add to risk and raise the break even point for the business.

There is a time value of money that requires future cash flows to be discounted to Net Present Value.

Managing cash flow is as important as managing net income.

The simple principle of managing working capital by "Collect Fast, Pay Slow" needs to be balanced against the maintenance of good service relationships with customers and suppliers.

Asset management cannot be neglected and significantly affects liquidity, credit worthiness and the valuation of the business.

Worth remembering.

Avoid Swine Flu at Work

2009-05-08T22:18:00.004-04:00

Friend and associate, Lynda Goldman has recently published an article on "Swine Flu: 7 Keys to Keep your Workforce Healthy"

It is based on a recent interview with Dr. Ashok Oommen, a respected specialist in preventive medicine. He offers practical and effective tips that can be applied immediately to protect your employees and your business.

Check it out: http://www.lyndagoldmanink.com/Swine%20Flu%20-%207%20Keys%20for%20Managers.pdf

Stay healthy.

How are we doing so far in 2009?

2009-05-01T15:58:00.004-04:00

We could all be even worse off, but let's hope it gets better from here. For most of us the impact on our businesses has been inconsistent and inconclusive.

What are the right management strategies and action plans to get through this economic turmoil with a more resilient and successful business?

Here are the lessons we have learned from clients, commentators and other experts, so far:

1. Do not rely on the headlines.

They are just trying to get your attention and a train wreck is more interesting than a success story. They will not provide either balanced or insightful input to your planning or decision making. You will have to dig deeper. Make sure your market data and competitor intelligence is current and accurate.

2. Communicate Communicate Communicate.

Keep employees and customers informed. They are worried, confused and need to be reassured that they can count on you. Unfortunately, you may not have good news for them, but it will be appreciated that they are hearing directly from you and are not left guessing what's next.

3. Keep on Selling.

Now is not the time to cut back on marketing and sales. Your efforts now will be more even conspicuous and effective as your competitors back out of the market and away from their customers. Be selective and very focused. Work on building stronger customer relationships by being relevant and responsive to the current economic circumstances. Avoid the “cry for help” advertising that only confirms “we’re desperate and need the sales”. Calmness, confidence and competence are much more appealing to those potential buyers who are still spending and want reliable, long term suppliers.

4. Do quickly what obviously needs to be done.

If it’s clear to you it's also clear to the people affected. They are waiting for you to act and will be more confident and proactive themselves if they see you taking action. Face the facts, don't fight the facts.

5. Adapt.

Remember Darwin's "survival of the fittest": those who adapt to their environment are most likely to survive; not the strongest or the biggest. This is not the time to be stubbornly persistent about your plans. Look around and be creative. Your destination may still be the same, but the route, the vehicle and the passengers may need to be changed.

6. Be confident, but cautious.

Recognize the difference between calculated risk and a state of uncertainty. Make a decision if the potential outcomes and the percentage probabilities are reasonably clear, but hold fire if they are not.

7. Show conspicuous leadership.

President Obama understands the concept of being the conspicuous spokesman for his plans and policies. No one can do it better than the one who is ultimately responsible. We may not all be as adept communicators as he is, but we can all speak with more sincerity than any spokesperson or intermediary on our concerns, our strategies and our plans.

Good management will be tested during these times, but good decisions now will mean a better business for the future. Keep at it. This too will pass.

Cautious optimism

2009-04-29T12:10:00.002-04:00

Is it just my imagination or is the consensus shifting to a more optimistic view of the economy and financial markets?

Maybe the media has just decided to select more positive headlines before they plunge us back into doom and gloom. Could they be that smart?

Maybe it's just me being more selective about which news items and analyst's commentaries that I read. Or maybe it's because those bargain stocks I bought over the last six months are finally up 20%!

In any case, I've decided to stop worrying, be more optimistic and act accordingly. It feels better already. You should try it.

Wow, my stock's up 67%!

2009-03-12T13:35:00.006-04:00

Sounds exciting, but it's actually a cruel lesson in mathematics.

The good news was that CitiGroup stock had jumped from $1.00 per share to $1.67. The bad news was that my average cost is still about $33.00 per share and the current value is still about 95% below cost. Starting from today's $1.67 the stock has to come back 1,976% for me to reach breakeven.

A sad but true fact of mathematics: as values decline the percent increase has to be much more than the percent that has been lost. Think about it - a stock that has lost 50% of it's value has to come back by 100% (double its price) before returning to the original value.

In the other direction this effect is a good justification for cashing our before you get too greedy. For example, if the stock has doubled from your original cost, it only has to slide by 25% to take back 50% of your gain.

Since we're looking at market values currently down about 40% from a year ago, they have to climb about 67% to recover their original value. Faint hope or sure thing? The historical comeback of 80% within two years of a recession suddenly doesn't sound quite so good. Unless you were lucky or smart enough to get out before the crash and are buying back in at today's values with all that available cash.

Unfortunately, that's not me.

Rhetoric is not leadership

2009-02-23T10:41:00.008-05:00

Guiding business, government and the economy through these difficult times will require strong, decisive and competent leadership from all three sectors.

Unfortunately we have been getting more rhetoric than meaningful leadership.
President Obama has already been a disappointment. Aside from not being able to persuade either Washington politicians or American citizens to get with the program, he hasn't had good answers to the crisis.

Throwing more taxpayer money on the fire hasn't helped us yet and all the emphasis on dire consequences to persuade the non-believers has made us even more cautious and pessimistic that things will continue to get worse instead of better.

Real leadership means leading by example. Start getting things done differently and we'll start to follow. Artfully crafted speeches are simply not enough.

Greasy imitation

2009-02-17T11:55:00.005-05:00

With some experience as a traveling sales rep I have learned to appreciate McDonald's egg McMuffin breakfast and Tim Horton's for coffee meetings. So I was intrigued by Tim Horton's newly announced breakfast sandwich.

An opportunity to try it come on a recent early morning flight to Toronto when I realized there would be no breakfast on Air Canada (or any other airline these days!). That's when I noticed a Tim Horton's with its new breakfast combo at only $5.06, tax included, for the egg and sausage sandwich, hash brown's and coffee. Great!

Clearly an imitation of the egg McMuffin, but Tim's version of the hash browns was even worse than McDonald's! A greasy patty of partially cooked potato and spices that looked disgusting and tasted worse. A good idea badly executed. Imitation may be the most sincere form of flattery, but it seems to me the strategy should be to improve on the original, not make the bad even worse. If you try it, skip the hash browns.

Y.C.D.B.S.O.Y.A

2009-02-02T10:19:00.005-05:00

Some good business advice from a Canadian cabinet minister in the 1960's government of Prime Minister John Diefenbaker. Imagine that!

I'm reading "Renegade in Power" by Peter C. Newman and he is describing the colourful George Hees who was responsible for Trade and Commerce and was determined to push Canadian businesses toward new international opportunities. He often wore a tie clip (it was the 6o's) that consisted of the letters Y.C.D.B.S.O.Y.A. Visitors to his office couldn't help notice as he fidgeted with it until they finally asked what it meant.

He would obligingly exclaim "You Can't Do Business Sitting On Your Ass!" More direct than they were used to hearing form cabinet ministers, but they did remember the sentiment.

Just another reminder that we can learn from history.

You be the judge

2009-01-12T11:10:00.004-05:00

Each January presents the opportunity to participate as a judge in the annual Concordia MBA International Case Competition. Thirty-two university teams of enthusiastic and ambitious young MBAs analysing, strategizing and recommending solutions to the corporate challenges that they are presented.

It does raise the question in my mind of encouraging the arrogance of MBAs to think they can solve corporate issues in a quick study without any relevant experience. Imagine - if they can solve these cases in two hours, what could they do in a couple of years as CEO! Brings me back to Henry Mintzberg and the admonition to focus on creating better managers not MBAs.

Relevant prior experience is the first requirement before embarking on the study of management. The case study is a gross oversimplification of business dynamics and trivializes the need for industry and functional knowledge and experience in addition to leadership and management skills. Perhaps it adds some realism to textbook theory and allows a more complete strategic view of the corporation, its stakeholders and its environment, but in the absence of relevant experience it will be a limited academic exercise.

You be the judge.

Immune to the recession

2009-01-12T10:43:00.005-05:00

At the recent Concordia MBA International Case Competition we had a presentation from Jet Aviation on their dilemma of whether or not to scale up their facilities to accommodate the interior design and build for a private Airbus A380 just purchased by Prince Al-Waheed of Saudi Arabia. He already has a private Boeing 747 and has decided to add another $300 million palace in the sky.

An interesting observation by executives during the presentation was that the "low end" private jet market was being affected by the financial downturn, but that the super rich were pretty much immune so far. The explanation was that aside from their continuing ability to afford these luxuries, their planning horizons at this level were also longer than the normal short-term period of an economic recession. Interesting.

Suggests we might all take a closer look at which customers or products are more or less vulnerable to these challenging times. Your Cadillacs and SUVs are in trouble, but maybe not the Bentleys and Ferraris?

Unfortunately the super rich market may be immune but it is not very large. The forecast market for private A380's is only about 8 - 10 over the next 15 years, with three potential competitors. And the other bad news is that the buyers tend to be tough negotiators, slow to pay and quick to sue!

High risk and huge investment. Not much attraction there for most of us.

Steven Kates has it wrong on Starbucks

2008-12-10T13:09:00.003-05:00

A recent article in the Financial Post by Steven Kates, SFU Business Professor, prompted me to reply.

I also use Starbucks as an instructive example for other businesses. But Steven Kates has it wrong in suggesting that Starbucks needs to "emphasize that it is continually learning how to be a good corporate citizen, not simply appear as one." Sorry, but that is not a relevant response to recessionary times.

He has it right in the first sentence of his article, "I have an abiding love for the Starbucks brand." That is the hot button to push for Starbucks - their astonishingly loyal, dedicated customers. Leverage that relationship to make the business recession proof. Recognize and reward loyalty. Keep them coming back; don't disturb or distract them from the attraction of the ambiance and the attitude that comes with visiting Starbucks. I know of no other brand loyalists that are such fierce defenders of their daily fix. (Some even admit that it's somewhere between an addiction and a cult.)

Starbucks customers might back off the $5 latte for a cup at $3.95 in response to current economic pressures, but they are unlikely to go to Tim Horton's for their coffee.

My advice to businesses in these difficult times is to focus on key customer relationships and know what will continue to work and what needs to change for them to stick with you. Starbucks is doing that very well by eliminating outlets in oversaturated markets and by returning to the service concepts that made them indispensable in the first place.

Ideas for Difficult Times

2008-11-23T13:27:00.003-05:00

Ignoring or avoiding the current challenging business environment is simply not possible. The credit crisis, stock market meltdown, and looming recession are all affecting the attitudes and actions of consumers, employees, investors, lenders and business managers. What are some helpful ideas to respond effectively?

Stay focused

Avoid being distracted by the bombardment of bad news. Stay focused on customers and employees, especially the ones that you have and you want to keep. Don’t freeze. But don’t over-react. Be calm, rational, reassuring and pro-active. Don’t just share their pain, provide relief. Misery may love company, but everybody still remains miserable if you just talk about it and do nothing. Try to be more creative and take appropriate action. Don’t neglect the good news – the Canadian dollar and interest rates are down so maybe you can expedite US dollar receipts or re-finance some lending to improve your results.

Be relevant

Take a close look at your customers’ changing needs and your product or service offerings. Do you have recession proof products or are they vulnerable? Costumers will be postponing or redirecting their purchase decisions in the current climate. Can you keep their business with a new cost-reduced service or more creative approach to packaging, pricing, terms and conditions?

Leverage the sense of urgency

Nobody is unaware of the current circumstances affecting your business. Employees are already focused on the problems, so it will be easier to get them to accept the solutions. That means being more receptive to expense reductions, removing frills, postponing projects, reducing assets and conserving cash. It may be opportune to revise compensation or bonus plans, change distribution channels, move marketing programs to lower cost Internet approaches. Take advantage of the sense of urgency that exists. Now is the time to resolve lingering problems; just be cautious not to do permanent damage to key employee, customer and supplier relationships that you want retain.

Recognize the changing environment

You probably started the year under different assumptions. That affected budgets and compensation plans. Sales targets may now be unrealistic and should be adjusted downwards to continue to reward and motivate top performers. Try to use an external benchmark to justify the adjustment and not give the impression that you are forgiving poor performance.

Look for opportunities generated by the crisis

If you have been smart enough to stash cash and build a relatively secure business, then you can take advantage of some unique opportunities that exist. Build your team by attracting top performing employees who may be ready to move from your competitors into your welcoming arms. Or take out a competitor if the whole company is for sale at a bargain price. The big boys are doing it; so can you.

Avoid being the unwilling prey

Competitors may see you in difficulty and recognize their opportunity to raid key employees or buy you out at a bargain price. You need to keep close to your key employees and ensure their career plan remains with you. If you are a likely target for merger or acquisition, then start working on your choice of preferred partner and determine your business valuation under normal circumstances, not distress pricing.

Talk to your banker

Make sure she is not worrying unnecessarily. Or at least worrying for the right reasons and hearing them directly from you. If you are in better shape than most and credit is available, then increase your credit limits now to support the opportunities you want to take advantage of.

Be focused, be flexible, and be creative.

Analyze, decide, and take action. You and your business will be better for it.

Guy Kawasaki

2008-11-23T12:08:00.007-05:00

Introducing Guy Kawasaki, former Apple Mac evangelist, venture capitalist and business philosopher.

I've added him to my recommended Blogs, based on two great articles; 10-20-30 guide to PowerPoint and Zen for Business Plans (look 'em up on Google before you see it here).

His first Blog by way of introduction.

Better Late Than Arrogant

Welcome to my first attempt at blogging. Admittedly, I’m three years behind the bleeding edge, but I had to get over the inherent arrogance of blogging: that people would give a shitake about what I have to say.
A book every two or three years is one thing, but a daily blog? (Not that I’m committing to daily blog.) However, many people pounded on me, so here goes. Not that you can hold me to this, but I’ll write about entrepreneurship, venture capital, innovation, public speaking, Macintosh, and hockey.
From time to time, I will also discuss things that I do not “know,” but I’ve never let ignorance get in the way of expressing an opinion—and clearly, very few bloggers do! So let the good times roll…

Written at Atherton, California.
December 30, 2005.

I have to agree with what he says about bloggers. I reached the same conclusion about writing for myself - who cares if I know what I'm talking about! I have an opinion or an idea and I'm determined to share it. Although I do try to remember the warning from my mother, "Don't waste your time confusing them with the facts when they've already made up their minds." I don't want to be one of those people.

Mixed messages

2008-11-19T11:45:00.003-05:00

Thumbs up or down for GM?

It seemed like a strange combination on the same page of the Business Section in a national newspaper.

All the headlines were about GM and the risk of bankruptcy. One of America's largest and most important corporations in dire straits because of the economic circumstances. Should they get bailed out by the US treasury? Something must be done to save them and all the jobs that depend on GM.

And across the bottom of the same page a full colour ad for the new Cadillac CTS with 556 horsepower for zero to sixty in 3.9 seconds at only $68,500. Just what we need for difficult times.

It seems to me that one message explained the other.

Bad management leads to bad results and the free market economy will help to decide who consumers (i.e. taxpayers) should support.

Working like a dog?

2008-11-06T13:00:00.005-05:00

Harvey Mackay has some great suggestions on learning from dogs. Here is an extract from his recent newsletter (Nov.6/08).

We can learn a lot from dogs. Live simply. Love generously. Care deeply. Speak kindly. We give dogs time we can spare, space we can spare and love we can spare. And in return, dogs give us their all. It's the best deal anyone has ever made.

When loved ones come home, always run to greet them. Dogs treat us like celebrities when we come home. There's nothing wrong with showing people that we care about them.

Never pass up the opportunity to go for a joyride. On warm days, there's nothing wrong with stopping to lie on your back on the grass. I think of Richard Gere's character in the movie Pretty Woman. He was so busy working—doing big business deals—that he never stopped to enjoy walking barefoot in green grass until Julia Roberts showed him.

Take naps. Many of us are on overload, so in life you have to know when to throttle up and throttle down. If you can't take a nap, at least take a break. It will improve your disposition.

Run, romp, and play daily. If you have a chance to have fun, go for it. Life presents plenty of difficult times, and we all need a break every now and then. My motto: work hard and play hard.

Let people touch you. Don't be aloof. Allow people to get close to you.

Avoid biting when a simple growl will do. Just make sure your bark isn't as bad as your bite. It's okay to warn people that you're upset or even angry, but keep your temper in check.

When you're happy, dance around and wag your entire body. Happiness is the American way. After all, the Declaration of Independence says we are endowed "with certain unalienable rights that among these are life, liberty and the pursuit of happiness." So we have a right to be happy!

Delight in the simple joy of a long walk. Exercise is always good. I've been doing it all my life. It just makes me feel better, gives me energy to work more productively and, I hope, live longer. My philosophy is: Exercise doesn't take time; it makes time.

Be loyal. In a recent column about loyalty, I wrote that one of the first qualities that I look for in both employees and friends is loyalty. And my friends know they can expect my loyalty in return.

If what you want lies buried, dig until you find it. I'm constantly asked what the secret of success is, and persistence is at the top of the list. When you study truly successful people, you'll see that they have made plenty of mistakes, but when they were knocked down, they kept getting up ... and up ... and up.

When someone is having a bad day, be silent, sit close by, and nuzzle them gently. People remember two things in life—who kicked them when they were down, and who helped them on the way up.

Mackay's Moral: My goal is to be as good a person as my dog thinks I am.

For more from Harvey visit: harveymackay.com.

Elvis is No. 1

2008-10-30T15:08:00.003-04:00

Here is an inspiring fact about Elvis. Among dead celebrities he is still number one in annual income. More then thirty years after his death in 1976, he is still earning in excess of $50 million a year! (OK, he's not earning it, his heirs and successors are.)

An impressive example of building a business model that ensures recurring income long after the initial work is delivered. It works for recording artists, authors and others that receive continuing royalties or sell continuity programs, memberships, subscriptions. Some of the highest earning consultants, advisors and coaches are the ones that are smart enough to sell their services with a percentage override on future sales revenue or cost savings.

Is there an opportunity that you're missing in your business? After selling the product or service are you selling the add-on warranty support or technical service?

Wouldn't your kids be pleased to know they'll still be getting cheques from you long after you're gone?

Running into a burning building.

2008-10-17T17:39:00.003-04:00

Another exciting week for investors.

Was it the bottom finally? Did you have the nerve to jump back in and was your timing right?

The advice of most so-called experts was either to stop watching and worrying or start buying at the bargain prices available. The latter advice sounds to me like being at a big game when someone yells "Fire!" and thousands panic and run for the exits, but your buddy suggests now is a good time to buy front row tickets from someone on their way out; then head back in.

That's a good plan if the fire is out and the game is back on. Not so good if its getting worse before it gets better. Maybe if you can grab a season ticket at a good price then be patient until everyone comes back in again.

Who knows?

It's a good time to remember it was always a risky investment and we've been here before. This too shall pass.

Twenty-something employees

2008-09-04T16:52:00.003-04:00

I was in a good discussion today on the special challenges of managing young employees from the twenty-something generation.

There is often a large gap in job expectations between the 30 to 40-year old managers and their younger staff. Loyalty, extra hours, and commitment to the company are concepts familiar to the managers but foreign to new employees. Their key issues are flexibility, social time, open communication and personal attention. Work habits may include continuous connection to their cell phone and online text messaging. These young employees present management with new challenges to attract, recruit and retain them.

Meeting their needs is difficult in an environment that has to remain equitable for all employees and still be a productive and customer-centered work place. Progressive companies have found creative ways to achieve their goals and to meet the expectations of desirable young employees.

They have implemented flexible work schedules within reasonable limits, make senior managers accessible, and recognize personal needs that have priority over job responsibilities. Adapting old personnel practices to the expectations of the newest employees requires careful assessment and implementation. It is worth learning from the successful employers so that your company can also become recognized as a great place to work. It is key to attracting and retaining the best qualified employees.

Summer doldrums

2008-08-07T16:25:00.004-04:00

Quietly drifting in no particular direction. That's what the doldrums mean to me, based on vague memories from high school history classes of the great explorers in their sailing ships . (Confirmed by Wikipedia it's apparently an area near the equator, famously described in the "Rime of the Ancient Marine" by Samuel Taylor Coleridge.)

For business it often means a quiet period too. Everyone is enjoying their family holidays or summer recreation activities rather than starting new business activities.

But it can also be an opportunity to spend more time building stronger client relationships because there is less pressure and conversations can be more relaxed and informal. It may be a good time to reflect, plan and strategize with key customers before the hectic season of "back to school" arrives. Trying to fit in some social contact with customers during the summer doldrums may help you be more successful during the winter flurries of activity that follow.

Another lesson in Business Planning

2008-06-19T15:38:00.003-04:00

The most common reason for preparing a business plan is because the bank asked for one before evaluating a request for financing.

We've already discussed that a well prepared business plan document may still not be enough when it's finally delivered. Next comes the negotiating phase. The lesson that was recently confirmed was not to be deterred by questions and requests for more information, but do not be persuaded to go back and revise the Business Plan document. That will only cause the bankers to recycle through the process of internal review, look for the answers and revisions and probably come up with more questions. It may be a good stalling strategy to avoid the "no", but the entrepreneur wants to move forward to a clear "yes", or "no".

So we agreed to respond to the specific questions in a short follow-up note using the approach of "Thank you for reviewing our plan. Here are the answers to your questions and we now look forward to a favourable reply to our request for funds". It worked.

And I got that very pleasant consulting feedback of: "Hey Del, they really liked the Business Plan and our answers to their questions. We're getting the financing!"

A good lesson in effective use of the Business Plan as a negotiating tool. I hope it works for you.

Still a necessary step

2008-06-12T14:45:00.002-04:00

I had a banker comment this week on my earlier posted opinion that it is important to know all the requirements before starting on a futile business planning exercise that still won't get the financing required.

He disagreed.

It's always a necessary and useful step he said. And he's right.

At some point the entrepreneur has to test his plan against the real world and its better to know now, rather than later, that the plan needs to be changed for it be a successful business. If more equity is required or a new cost and risk reduced plan is necessary, then at least we now know exactly what is required before we get a third party to invest. It also helps to look further ahead to make sure we don't just have enough financing to dig ourselves into a hole and not enough to work our way out of it.

It's a good start along the path of "no surprises" management.

A Business Plan is not enough

2008-06-09T16:46:00.004-04:00

Asking for more information is often just another way of postponing the inevitable "no".

I've learned this is often the way potential investors or bankers manage to turn off the entrepreneur without ever being so direct as saying "No, I'm not interested." It would be even more helpful if they continued with "because ...". But they usually don't offer much explanation (or the real reason) and the entrepreneurs doesn't ask.

The first question investors and lenders do ask is, "Can I see your Business Plan?" And that often leads to work for me to help with the strategizing, documentation and financial analysis, but I always ask the entrepreneurs if the Business Plan is the only thing left to satisfy the lender or investor. Too often, after we have spent time and effort and cash to prepare a solid business plan that confirms the prospect of a viable business and the potential returns to investors and lenders, we then discover that the owners cannot put up the equity or the collateral that is required. We should have known that from the start.

It may come out during the planning process and the analysis of cash requirements, but it would be helpful to know the guidelines in advance. If you need $500,000 then the banker or investor probably wants your investment and guarantees to be a lot more than the $25,000 you've arranged.

All lenders and investors have a checklist. Be sure you are aware of the whole list and whether you can meet all the requirements, beyond a good Business Plan.

Good for your health

2008-04-23T12:34:00.004-04:00

I recently participated in a breakfast seminar with some associates, clients and friends where the guest speaker was Dr. Oomen from the Cardiogenix Medical Centre in Montreal. He is a very dynamic and animated speaker who presented the topic of "Health is Wealth, De-stress for Success" and he had us all motivated to follow his advice and lead healthier, stronger, longer lives.

We were left, however, feeling inadequate trying to be as effective as he was at passing the message on to family, friends and employees. Employees are a particular challenge. Some participants spoke of their frustrations with various programs, large investments and a great deal of time and effort with very marginal results for their staff. Only a few had lost weight or stopped smoking, even with financial rewards or other incentives.

Dr. Oommen seemed to agree that making real progress needs constant attention. Continuous communication, support and encouragement, measuring and rewarding results will all be required before momentum is created and new habits become established.

Nevertheless, it is worth the effort. Everyone wins.

Effective Branding

2008-04-07T16:51:00.004-04:00

The value of a good company name struck me en route to spring skiing on Sunday. Flying by on the freeway I suddenly noticed two distinctive names that seemed to stand out in the row of businesses along the highway.

Stonedge and Simple Signman.

Memorable don't you think? A catchy, meaningful and memorable name is always a huge advantage in building brand recognition and corporate identity. Especially if it is a good fit to the business and its strategic positioning.

In working with entrepreneurs I often have to get them to re-think their planned business name after we've completed a thorough review of their corporate strategy and marketing communications plan because it is simply not consistent, not supportive, and often in direct conflict with the message and the corporate identity. For example; "J&B Java" for a retro '60's style diner and gift shop. Or "PBX Services" for an architectural and interior design consulting firm. It's worth the extra effort to try and be more creative and consistent with your marketing image.

You may want to invent a new word for your name, like Yahoo or Google, but unless you can spend a fortune making it known and putting it everywhere, like Starbucks or EXXON, then try something that is more meaningful and memorable.

Imagine the additional business that comes from customers who will instantly recognize who you are and what you do, as well as those customers that will more likely remember you for next time. Think of a good name as a valuable silent salesman - always working for you.

Evolving loyal, long-term customer relationships

2008-02-13T17:15:00.001-05:00

Sometimes we get so preoccupied with marketing and sales activities and all the associated details that we forget the original strategic objectives.

The basic objective, of course, is to generate and grow sales revenue. But to have sales you need customers. And to have sustained, profitable and growing sales, the best strategy is to develop loyal, long-term customer relationships.

So the marketing, sales and customer service activities should all be aligned to deliver a customer experience with you, your company and your brand that evolves from a first time buyer to a loyal, long-term customer.

The customer experience typically evolves through four levels:

1. Satisfaction with price and availability

On the first exposure to you and your business, customers will quickly, maybe even subconsciously, compare price and availability to their expectations based on prior experience with your competition. There will likely be no sale, and maybe no second chance, if this minimum expectation is not met.

2. Recognition of superior service levels

The first point of differentiation and the first step to building a stronger customer relationship will be when the customer recognizes that you offer superior service. You can demonstrate it in many ways – faster response to inquiries, easier access, more stock, better prices or terms, better delivery, better warranty service and support.

3. Appreciation of the value of your knowledge and experience

After the basic needs of price and availability are met, and you have distinguished yourself with superior service, the customer experience should then lead to an appreciation of the added value of your knowledge and experience. This will be demonstrated by applying your product knowledge, training, education and experience to educate the customer and give him/her the confidence to make better purchasing decisions. Now you are building a valuable customer relationship.

4. Connection on values, mission and vision

The final step in cementing loyal, long-term relationships will occur when the customer recognizes a common sense of values, mission and vision in the way you both do business. This connection will be developed over several interactions, particularly when problems are solved together, or you meet on non-business related issues.

The sooner you can meet customer expectations at these four levels, the faster you will build lasting and loyal customer relationships.

Super Bowl decisions

2008-02-05T19:15:00.000-05:00

Super Bowl ads are always part of the attraction for the 95 million viewers from around the world. For advertisers it was a $2.7 million decision to book 30 seconds.

A good or bad marketing decision? For Budweiser or Pepsi it's a small drop in the bucket of advertising millions they spend every week. For smaller companies it may be an all or nothing budget item and can be a risky bet. In the dot.com days there were always a few that spent their venture capital dollars on a Super Bowl ad just because the notoriety was worth the expense. This year there were still a few Internet companies in the mix.

The most controversial ad decision was the commitment to 60 seconds by Under Armour, an athletic underwear brand name that was launching its new line of training shoes. The six million dollar cost represents the equivalent of one month's net income (last quarter was about $17 million). Somebody really believes in the value of advertising.

When will they know if it was worth it?

Blinded by concentration

2008-02-01T11:23:00.000-05:00

I was at a seminar recently which for some reason digressed into demonstrating how we can be so focused on a particular task that we fail to observe what is going on around us. The presenter gave a few demonstrations that we found interesting but unconvincing, then he proved it to us with a group experiment. The object was to watch a short film of students passing basketballs among themselves and count the number of passes, but only betweeen those students in white T-shirts, not those wearing black. OK, we watched closely for about 30 seconds and I counted 12, some said 16 or 17.

He asked, "Did anybody see the gorilla?" What gorilla? Most of us didn't know what he was talking about. So he showed the fim again and, to my amazement, somebody in gorilla costume walked into the middle of the scene, paused, waved at us, pounded his chest, and walked on. Wow. (It wasn't a different film because some people had seen the gorilla the first time.) I always knew I was able to concentrate and ignore the background noise, but this surprised me.

I was reminded of the story by this morning's newspaper article about Barbara Ann Scott who is celebrating the Sixtieth anniversary of her Olympic gold medal in figure skating at St. Moritz in 1948. (The first and still the only Canadian woman to do so.) Apparently in her early routine on the outdoor rink, a helicopter flew over and hovered to watch her perform. When asked if it bothered her, she said, "What helicopter?"

Being able to focus is obviously important to performing a task at our best, but occasionally we need to look up and be aware of our surroundings. Maybe the gorilla is not friendly, or the helicopter is crash landing.

Looking back and planning ahead

2008-01-14T16:24:00.000-05:00

The start of a new year is a good time to look back and plan ahead. (Sounds dangerous. May explain the pain in my neck.)

However, looking back at 2007 can you conclude on the mistakes you would rather not repeat or the things you would like to do more often? Or maybe the issues and ideas that were completetly neglected? Select your priorities and include them in your plan for 2008.

Is it time for a radical new strategy or simply continuous improvement of a well established formula for success. Don't forget to look outside your business at your personal priorities. Is it time to fix the foundations of family, friends, physical and financial health?

And don't try to do too much. Small successes will usually add up to more than a few big ideas that don't get finished. Good luck.

Pricing your business

2007-12-07T14:04:00.000-05:00

In recent mandates with several different clients, we have gone through the exercise of valuing their business.

A few important principles were confirmed:

The value to the owner is unique to that individual. Ego may artificially inflate the price, but more importantly the role and relationships established by the owner may change drastically with his/her departure and thereby affect the price.
Value is always determined by an evaluation of the future income relative to the uncertainty or risks associated with obtaining the expected returns. Regardless of the valuation method, (P/E multiple, payback period, or discounted cash flows) the forecast future income stream has to be solid and the known risks have to be reduced to get the best possible valuation.
Current owners tolerate more risks, uncertainty and "fuzzy" circumstances than new owners/investors. You may be OK with the fact that you are dependent on one key supplier because he is an old high school buddy; or that you have no signed lease but the landlord is your uncle; or that your best sales rep is also your only son and he wants to be president. Prospective buyers will be much less enthusiastic unless those issues are all resolved to their satisfaction in advance of any offer to purchase or invest.
Different buyers will accept different prices, terms and conditions. The prospects usually range from the passive investor looking for a reasonable return for reasonable risk; to the active investor who sees the potential to do better than your forecast under his own management; to the strategic investor who sees even greater opportunity in buying a competitor, supplier or customer and merging it with his existing business to increase revenues, eliminate unnecessary overheads, and substantially increase profits. The selling price will increase accordingly.

For more on the subject visit: http://www.directtech.ca/pricing_a_business.htm

Teaching entrepreneurship

2007-11-24T16:51:00.000-05:00

So the course is over and a dozen enthusiastic young entrepreneurs passed with excellent marks. Will they all succeed as entrepreneurs? Sorry, but taking a course is not enough.

In the very first class we agreed that anyone can be an entrepreneur if they are passionate determined, persistent and patient. So why not? It sounds like the same cliches we hear from successful celebrities - "believe in your dream, never give up". But we neglect to be honest and admit that there is always one more requirement for success - talent!

It's like the rookie golfer who just couldn't improve and after every bad shot the pro kept explaining that his problem was LOFT. So the the rookie tried another club and still couldn't hit it straight. The pro then explained "I didn't say your problem was loft, I said it was L-O-F-T: Lack Of F***ing Talent!"

Sometimes its best to discourage budding entrepreneurs who have a dream but need to recognize they are only dreaming. First find something they can be good at.

An impressive CEO

2007-10-23T18:01:00.000-04:00

At a recent McGill alumni breakfast, the guest was Darren Entwhistle, President and CEO of Telus, Canada's newest national telecommunications provider.

A very articulate and focused leader, Entwhistle clearly communicates where he wants to go and his process for getting there. Still "frustrated and bitter" about the federal government's inability to get out of the way for his bid to acquire Bell Canada, he thinks we are handicapping Canadian telecom's from growing into world class competitors. A familiar refrain also from the banking sector and other industries frustrated by regional and provincial barriers.

Entwhistle also described the challenges of ignoring the financial critics and market watchers to stay focused on the internally sound corporate strategy. Short term share prices and industry fads will sway those outside opinions, but a well developed sound strategy will succeed over the long term.

An impressive CEO, Entwhistle obviously inspires confidence in his leadership for the management team, employees and shareholders of Telus. (And he's another McGill MBA - Class of '88.)

The Platinum Rule

2007-09-28T14:23:00.000-04:00

Again I learned something new at the McGill MiniBiz Seminar this week. The topic was managing diversity, especially the generational gap between those born before WWII, the Boomers, Gen X and Gen Y.

For both managers of those diverse groups and for members of each generation the recommendation was to remember the Platinum Rule.

OK, we all know the Golden Rule, "Do unto others as you would have them do unto you". Apparently a pretty universal concept that has worked for many generations. Essentially, treat other people the way you would like to be treated. Seems good to me.

But consider the more effective Platinum Rule, especially when there are large cultural or generational differences to consider: "Treat other people the way they would like to be treated." Powerful concept.

Henry Mintzberg is worth listening to

2007-09-19T11:05:00.000-04:00

I had the pleasure yesterday of hearing a presentation by Henry Mintzberg, McGill professor and management guru. One attendee described him as the "Tiger Woods of management science".

I know him as the Strategy professor during my McGill MBA program from 35 years ago. (Yikes, neither of us seem to have aged that much! OK, maybe less hair.)

He is a widely respected academic and the acclaimed author of "The Nature of Managerial Work ", "The Rise and Fall of Strategic Planning", "Managers not MBAs" and many other books and articles that argue against the conventional wisdom and provoke thoughtful reflection on management and business. He is also the co-founder of the International Masters Program in Practicing Management (IMPM), a unique approach to learning that is designed to flow from the experience of the participants.

His presentation yesterday was originally advertised to be on the dilemma of corporate compensation, but that turned out be only part of his critique of the modern CEO focus on shareholder value that is leading to the great depression of 2008.

Some of his points to consider:

Productivity is a euphemism for cutting costs, mostly by firing employees, while maintaining short-term revenues.
The theoretical corporate objective of maximizing long-term shareholder value has been hijacked to mean pushing short-term earnings to inflate current market share prices.
How can employees be motivated to work for shareholders they have never met? Many of whom have no interest in the company except for the short-term ability to make a profit on their investment - they are day traders or hedge funds.
Shareholder value is not a worthy objective of the corporate institution as it specifically ignores (or exploits) other stakeholders, especially employees.
Mercenary corporate leadership is stealing from shareholders with absurd compensation and severance packages that are not tied to performance. The "robber barons are back!"
The old corporate silos have been replaced by horizontal slabs of concrete separating executives from their employees and the real operating issues.
"Human resources" is a term that dehumanizes human beings. It makes it easier to treat people like other "resources" to buy, sell, use and dispose of them. It's like describing airline passengers as "self-loading cargo"!
Corporations need to remember that customers are people too. They are not just another asset to be exploited.

Professor Mintzberg also suggested some remedies to avoid the great depression of 2008:

Stop being misled by the apparent productivity gains and profitability of large American corporations.
Get the mercenaries out of the executive suite and add employee voices in the boardroom.
Stop running businesses to satisfy financial analysts or investors with no interest in anything except short-term results.
Install real corporate leadership that is concerned, engaged, and modest. (Interestingly close to Jim Collins description of Level 5 Leadership from "Good to Great".)
Ignore the obsession with measurable factors and reconsider the immeasurable - values, benefits and impacts of economic activity.
In the larger context, get back to a better balance of the three sectors in society - public, private and social.

His full commentary is available at How Productivity Killed American Enterprise.

Lots to think about and to influence if we can.

Not worth reading

2007-09-17T11:45:00.000-04:00

Seymour Schulich's recent book "Get Smarter" is a disappointment.

In spite of the reviews and promotional news releases that it's full of brilliant insights, it is instead full of clichés and old anecdotes borrowed from Aesop's Fables or father's favourite tales. Not the wisdom and lessons of life and business and that you would expect from a prominent Canadian billionaire.

More a confirmation of the power of money to buy respect and admiration that Mr. Schulich has already demonstrated by his conspicuous donations to Canadian universities. I don't know him, but I have an impression that Mr. Schulich is most impressed with himself and acted on the urge to say "I'm very rich so I must be pretty smart and people should listen to my advice." He offers his opinions on China, the Middle East, and his favourite movies (why is that relevant?) A good friend or editor should have told him not to embarrass himself. He doesn't need the money or the attention from writing a book.

He does have old-fashioned views and strong opinions on some subjects that are both surprising and interesting and the Appendix describing his lucky strike in Nevada is more revealing of how to become a billionaire. Still not enough to justify the price or the time to read the whole book.

A Peter C. Newman story of his life and times would have been more interesting, but probably not as flattering for Mr. Schulich.

Anyone can be an entrepreneur

2007-09-12T12:17:00.000-04:00

That was the advice of David Lank, Director of the Dobson Centre for Entrepreneurial Studies at McGill, in a seminar last evening. I agree that anyone can be, but not everyone should be, and not everyone wants to be.

As David suggested, why would anyone want to be an entrepreneur when they know that:

You will not really work for yourself, but instead for all the people that depend on you.
The world really doesn't care about you or your business.
Most new businessses fail.

The first test of a real entrepreneur, of course, is that he/she proceeds with enthusiasm in spite of all that knowledge. In David's opinion, based on providing start-up capital to more than 140 companies during his career in venture capital, the most important element in deciding to invest in an entrepreneur is the passion they demonstrate in support of their plan.

A formal business plan is always required, but that is less important than the passion factor. The most important element required for favourable consideration of the business plan is the understanding of reality communicated by the entrepreneur.

Good perspectives to keep in mind.

Learning entrepreneurship

2007-09-11T14:36:00.000-04:00

My next teaching challenge is to present the subject of Entrepreneurship in the Continuing Education program at Concordia University.

Can you really teach entrepreneurship? What if you have to be born that way? What about all those stories about "delivering papers when I was nine years old"...? I didn't, so am I disqualified?

My own theory is that an entrepreneur is simply a creator of businesses to meet an opportunity. Anybody can do it anytime; if they have the marketable skills, relevant knowledge, and determination to succeed.

So what can I teach? Having reviewed a number of textbooks on the subject, I have concluded that the expectation of those signing up for the course is to learn some basic business processes and principles that will help them to evaluate their choices and make the decisions necessary to develop an idea or opportunity into a valid business model and business plan, finance it, start it and make it grow.

Sounds simple.

Leadership

2007-09-10T13:50:00.000-04:00

I'm currently reading Stephen Covey's latest - "The 8th Habit"; following of course his best selling "The Seven Habits of Highly Effective People".

On the subject of management and leadership he summarizes the themes and concepts of many other authors. (Give him credit for some humility.) What sticks with me are the stated principles of: 1. Set the direction, 2. set an example, 3. define the values, 4. provide the systems; then let people manage themselves.

My own summary of management has always been simply to communicate the objectives and then remove the obstacles to achieving them. The guiding principles may be simple, it doesn't mean they are easy to follow.

Financial management

2007-08-22T15:27:00.000-04:00

I am just completing the teaching of two summer courses in Financial Management at Concordia University. It's time for their final exams so I'm now thinking about what are the most important lessons to learn for future business managers and entrepreneurs. Or alternatively, what do most entrepreneurs neglect in the management of their businesses?

Most of us focus regularly on the income statement - revenues, gross margins, expenses and the resulting profits. But we often neglect the management of our balance sheet - inventory, receivables, return on assets, and the short and long-term sources of funds. These issues can all have significant impact on profitability and the long-term value of the enterprise.

So I will try to emphasize the importance of regularly reviewing performance of assets and liabilities in addition to the more obvious and intuitive issues of sales and income. How does balance sheet performance compare to prior years? the plan? or the industry averages?

Can we improve turnover on inventory and receivables without losing sales or diminishing service levels. Can we extend payables and get additional short-term financing without hurting our credit ratings or adding to our costs? Are we making good use of long-term debt to add financial leverage and improve the return on our equity investment?

All important issues for effective financial management.

Mysteries of human behaviour

2007-07-23T11:38:00.000-04:00

I've just returned from an interesting trip to Sept Isles and tour of the Quebec North Shore. Sept Isles is on a large circular bay protected by seven islands (surprisingly) and is a young, prosperous industrial town. Quite unremarkable as a tourist destination.

But it has one characteristic that seems to be entirely unique to the population of Sept Isles. The town has two very popular Tim Horton's coffee shops and strangers cannot help but notice that absolutely everyone takes their coffee in the familiar "roll-up-the rim" paper cup with a plastic straw! They attempt logical explanations that it keeps the coffee from spilling out the flip top opening while driving, but there is really no explanation for it becoming unique to Sept Isles.

It seems to me a useful reminder that human behaviour cannot always be explained, predicted, understood or managed. Just accept it and work with it. Like the counter staff at Tim Horton's in Sept Isles - just punch a hole in the top and give them a straw.

The relentless pursuit of knowledge

2007-07-13T18:08:00.000-04:00

It's not trivial. One thought or idea leads to another.

I mentioned Dale Carnegie's original successful book written in 1936 and wondered if he was related to the famous American industrialist named Carnegie. Maybe he was just a lazy rich kid with the time to philosophize and write about "winning friends and influencing people". How to find out? I thought of Wikipedia, partly inspired by a recent article on Wikinomics in Canadian Business by Don Tapscott, Canadian philospher,writer and commentator on technology trends.

So I searched Google (of course) to find the Wikipedia entry and learned the following, plus a bonus marketing tip!:

Born in 1888 in Maryville, Missouri, Carnegie was a poor farmer's boy, the second son of James William Carnagey and Amanda Elizabeth Harbison.[1] In his teens, though still having to get up at 4 a.m. every day to milk his parents' cows, he managed to get educated at the State Teacher's College in Warrensburg. His first job after college was selling correspondence courses to ranchers; then he moved on to selling bacon, soap and lard for Armour & Company. He was successful to the point of making his sales territory, southern Omaha, the national leader for the firm.[citation needed]
Perhaps one of Carnegie’s most successful marketing moves was to change the spelling of his last name from “Carnegey” to Carnegie, at a time when Andrew Carnegie was a widely revered and recognized name.

More fascinating facts, or useless trivia. You decide.

Summertime

2007-07-06T11:48:00.000-04:00

Two long summer weekends and two short weeks every year at the end of June. (Unique to Québec?) Followed by the so-called "construction holiday" where almost everyone leaves for the last two weeks of July. Hard to be productive with clients or any other business partners during this period.

Should be a good time for blogging, but other summer attractions have more appeal. All of which is to admit I don't have much new to say.

Some more progress on summer reading and my reviews for your consideration:

Crime and Punishment, by Dostoevsky. A classic on my "must read" list. Written in the Russia of the 186o's and considered the original psychological murder mystery. Intriguing and very different from the modern murder mystery as it is told primarily from the point of view of the murderer.
How to Win Friends & Influence People, by Dale Carnegie. One of the originals (consider also Think and Grow Rich by Napolean Hill.) written in the 1930's and still worth a read. Not so serious or so slick as the current crop of self-help books that are so effectively mass marketed. Adds some perspective to the basic skills required to be effective in working with other people.

I've also agreed to teach two summer courses in Financial Management at Concordia so I'm reviewing the current textbook, "Principles of Corporate Finance" by Gitman and Hennessey. The principles haven't changed in the thirty years since my MBA and the first time I taught the course, but the text is well done and covers the elementary to the advanced topics.

Happy summer reading on your own list.

Back to Blogging after golf

2007-06-22T14:47:00.000-04:00

Too much time has passed since my last posting. Apologies to any avid subscribers, but I expect my absence was hardly noticed. My feeble excuse was being away for a dynamite golf and family visit in beautiful BC.

It was easy to be distracted by the spectacular scenery of BC at it's best in May/June. Lush green hillsides rising to snow-capped mountains reflected in the clear blue lakes. And we experienced a perfect father and son day at Whistler with a morning of spring skiing on Blackcomb and an afternoon of golf at Nicklaus North with a black bear on the 7th tee and waterskiers around the 17th green. Not to mention the outstanding sushi feast at Whistler Village.

So back to business after the reminder of how it's like golf. As my father would say about baseball "It's not good enough to swing and hope". You have to study, practice, and do it a lot to succeed. Watching it on TV or reading about it may help a little, not a lot. Better equipment is not the easy answer. Keeping score is the only way to really know how you're doing. And I'm sure there are other ways business is like golf. Material for a future Blog. Stay tuned.

Meanwhile enjoy the summer weekends, golf or no golf.

Essence of Customer Service

2007-05-24T11:29:00.000-04:00

A quick comment after another demonstration of what distinguishes good customer service.

I've always said the essence of good customer service is simple; not easy, but also not complicated. And for it to be reflected consistently on every customer contact is the real challenge for management. Instead of trying to explain it, just think of leaving every customer with a positive impression of the company, every time.

TD Waterhouse does that for me. As a discount broker that I use online regularly, I occassionally need to talk to them or meet someone in their office. Always prompt, personal, polite and efficient. The real test is when a problem arises. A transfer request that didn't happen as promised caused me to call today. Even though I started with a complaint, it was quickly corrected and I was again a satisfied customer. Congratulations to TD Waterhouse for continuing to impress me with excellent customer service. I'm a tough critic, but they are the best among all the large companies I know.

Essence of entrepreneurship

2007-05-24T11:04:00.000-04:00

I had lunch yesterday with a client and friend who represents for me the essence of entrepreneurship. (He is too modest and discrete for me to mention his name here.)

In my opinion, the essence is to combine the strength of a marketable expertise with the ability to think and act strategically. In his case, he has a very high level of knowledge and experience in the design, build and maintenance of computer data centres. He initally worked for another a specialist in that field then left to start his own business. Over time he successfully positioned his company as the recommended service centre for the industry's leading manufacturer; grew to a size that exceeded his own management abilities; introduced a new partner and executive management team; accepted a new role in the company that leveraged his unique expertise and skills in developing customer relationships; and managed to re-position the company as a major project contractor to design and build large computer room installations from its origins selling and servicing basic hardware.

Many entrepreneurs I work with are equally competent and dedicated to their area of technical expertise but much less capable of managing their business strategically. Others may have the education and experience to manage and think strategically but have little to offer in unique expertise.

Success flows more easily for those that have both.

Maintenance time

2007-05-22T17:28:00.000-04:00

After a long weekend there is extra urgency to get a week's work accomplished in the remaining four days. And this weekend I'm away for 2 weeks to enjoy Beautiful BC with friends and family so even more pressure .

It's a good time to remember the importance of maintaining the foundation - physical, financial, friends and family. Too much focus on business and career goals can easily leave no time for those other important elements of a successful life.

Weekends and holidays should be protected from work intrusions to allow quality time to be spent on those other priorities. They all add to the solid foundation that will support you through the inevitable challenges up and down the business cycle. Physical and mental strength, financial security, and the refuge and counsel of friends and family will help you weather the storms of economic adversity. If neglected, they will not be there to respond in times of need.

So take the time for maintenance. Sometimes, the work can wait.

Happy Birthday to me

2007-05-17T20:14:00.002-04:00

If you're here on Friday morning May 18th, I've gone golfing. Happy Birthday to me in case you forgot.

If you found this Blog through my e-newsletter on "E-Business opportunities with Web 2.0" (see www.directtech.ca/ebusiness_2007.htm) then you'll appreciate the beauty of online applications like Campaigner (www.campaigner.com) which sent the newsletter while I was golfing and directed you to the DirectTech Solutions website or the Blog. If you click on the Google ad links I might even make nickel while I'm golfing.

Now that's what I love about the Internet!

Happy Birthday to me

2007-05-17T20:14:00.001-04:00

If you're here on Friday morning May 18th, I've gone golfing. Happy Birthday to me in case you forgot.

If you found this Blog through my e-newsletter on "E-Business opportunities with Web 2.0" (see www.directtech.ca/ebusiness_2007.htm), then you'll appreciate the beauty of online applications like Campaigner (www.campaigner.com) which sent the newsletter while I was golfing and directed you to the DirectTech Solutions website or the Blog. If you click on the Google ad links I might even make a nickel while I'm golfing.

Now that's what I love about the Internet!

Networking or not

2007-05-17T19:52:00.000-04:00

I started a group a few years ago that resisted the standard approach to networking. This morning was a happy confirmation that we have a good thing going.

We are all refugees (or alumni, to put a more positive spin on it) of other networking groups. We wanted to avoid any more of the forced and superficial generating of leads and referrals for people whom we didn't really know that well. We were seeking areas of common interest and levels of business experience to share ideas and information. It is best described as a peer advisory group. We do have a mutual interest in identifying and developing business opportunities and occasionally feel guilty about not generating more referrals for each other.

This morning after a long discussion on a variety of fascinating subjects that strayed far from our standard agenda, I apologized for neglecting to keep them focused on our networking agenda. "Hell no" they said, "these exchanges are why we come here and avoid other networking groups!"

I agree. The networking results are actually better than elsewhere and there is considerable value in sharing ideas and information among like-minded professionals. I recommend it to you. The breakfast doesn't even matter.

Neglecting e-business

2007-05-15T12:11:00.000-04:00

In the early days of e-business consulting most of us doing the e-missionary circuit were preaching the message of "Catch the wave or be drowned by it". Every business was being told to get on the Internet and get rich quick or stand back while the "new economy" took over their industry. Hype and hysteria were used to persuade entrepreneurs and investors to put large amounts of money into their e-business initiatives. They were motivated by either fear or greed.

Then the "old economy" rules hit the dot.com ventures and the bubble burst. Many investments ended badly. Some could be written off as an expensive learning experience. The hype and hysteria died and many businesses decided they could go back to business as usual. They were wrong.

The Internet revolution continues, albeit more quietly. The hype now focuses on Web 2.0 with highly interactive web sites and user generated content. Huge values are being placed on high traffic sites as they are acquired by Google, Microsoft, or the media moguls.

But businesses that are leveraging the Internet to their advantage are those that simply make the best use of Web marketing to attract business and online services to reduce costs and to build strong loyal customer relationships. Those are the e-business opportunities not to be neglected.

Much has changed on the Internet, but neglecting e-business is not an option. Remember fear and greed still apply.

Happy Mother's Day

2007-05-10T17:31:00.000-04:00

Mothers and business seems to be my current theme. Perhaps it's the subliminal (or blatant) advertising for Mother's Day this weekend.

My Uncle Ralph persona is partly inspired by my father and his well-recognized character and manner of dispensing wise advice. But my mother also had a strong influence on my personality and management style (other than the genetic connection), but it was more subtle and less frequently stated than demonstrated. Quiet, hard working, good humoured, and responsible are the characteristics that immediately come to mind. Things we all learned from her example, simply by being around her. Of course, she was also good at reminding us when we forgot those important principles or our behaviour was not up to her standards. And it's still a pleasure to make her proud.

That's why I recommend you use the test "What would Mom think?" before your actions and decisions in business too.

Thanks Mom. And Happy Mother's Day.

I'm your boss not your mother

2007-05-08T14:32:00.000-04:00

An earlier post suggested that we might have better decision making if managers asked themselves what their mother would think of their actions. But what about those employees that expect you to act like their mother?

What is the right level of caring and compassion before it becomes more personal than a working relationship should be? Is there a reasonable limit? Is it appropriate to get involved with issues that are strictly personal? Do employees become part of your extended family with all the additional obligations that implies?

Some recent exposure to business owners dealing with their employees' personal issues has caused me to be more cautious about getting involved. Once they start lending a sympathic ear, then a shoulder to cry on, it soon becomes more time consuming on and off the job and creates a relationship that is difficult to steer back to business only. It also becomes a distraction for other employees and creates new concerns about favouritism.

My guideline for these situations would be to decide whether you would do what's being requested for every employee in the same situation. Personal advice? Time off? Cash advances? If not, then say no to the first request. Don't start a precedent that you're not prepared to write into the policy manual.

And don't be afraid to clarify the relationship, "I'm your boss, not your mother".

Does your mother know?

2007-05-03T16:41:00.000-04:00

As my mother once said "Don't do anything you wouldn't do if I was there." Now that was a great way to keep me on the straight and narrow while I was looking for trouble as a teenager.

I've often thought about it as I encounter bad and dangerous drivers flying by on the highway. "Does your mother know you drive like an idiot?"

Mothers are also an important influence to guide our ethical conduct in business. That was apparently understand by the jeweller in Cranbrook BC who had a conspicuous sign posted by the cash stating "We give instant credit to all our customers ... if they are over 90 and accompanied by their mother." Good credit guideline!

Most entrepreneurs and executives probably don't often think of their mothers on the job, unless she's the boss like Ma Boyle at Columbia Sportswear. Maybe they should. We would probably have fewer issues of corporate misconduct if their mothers knew what was going on.

Perhaps instead of all those current management courses on ethics and corporate responsibility we only need to remind decision makers to ask themselves "Would my mother be proud of me if she knew what I was doing?"

I have a duck

2007-05-01T10:45:00.000-04:00

Why do I keep the duck? It's not a live duck, it's a painted plaster duck, so no care and feeding required. But it's old and faded from years in the garden through snow and rain then beside the bathtub or on a bookshelf. It's not attractive but it's a frequent reminder to be humble in my business decisions.

The duck was a Christmas gift exchange from a computer technician who worked for me in my first entrepreneurial venture, TTX Computer Products. He was also the first employee I had to fire. Not because of the duck.

It was a classic business slowdown in the early '90's and forced me to look at downsizing my staff. "Laid off due to economic circumstances" may sound better to the individual and look better on his resumé, but it was still a difficult and painful decision. Especially as I had made the committment to never fire anyone in my own company after having lived through the slow decline and never-ending terminations at AES Data right up to my own "departure" a few years earlier.

But I came to realize that the best way to protect the company and the other jobs was to accept the inevitable and reduce costs by lowering the most significant variable expense - staff levels. As a senior executive from AES assured me, "the only way to avoid ever firing anybody is to make perfect hiring decisions, and nobody is that smart".

And he was right. It was also not the last time for me to have people fired, laid off, or terminated and it never gets easier.

I wonder if those CEOs deciding to cut back by 10,000 or 30,000 people take it as personally. Do they actually sit face-to-face with any of those individuals and worry with them about their futures?

It has to be one of the toughest challenges for any entrepreneur or executive. And still a worthy objective to try and avoid any firings. So hire as "perfectly" as you can, then manage well enough to avoid those "economic circumstances" that lead to downsizing.

Who needs a consultant?

2007-04-25T13:22:00.000-04:00

If importing a celebrity CEO is seldom a good idea, why would you want to use that hired gun called management consultant? He (or she) may know even less about your business and may have never even been a manager or business owner. How can they contribute anything?

Since I spend a lot of my time selling that service and playing that role I had better have a good answer to that question. Some of my thoughts on the subject are already documented in the article ""Consultants: How to choose, use and not abuse them." See: Ezine articles.

The consultant cannot know your business, your environment or your issues better than you. But he (or she) can add the value of their own knowledge, experience and skills to better analyse the problems or opportunities and develop solutions and action plans with you. The consultant should assist with brainstorming, open up new possibilities to consider, suggest some different strategies, tactics and techniques to get where you want to go. They should be practical and fit your business needs, budget, timetable, priorities, capabilities and corporate culture.

A good consultant should challenge and stimulate you to do better. You are not hiring a friend to remind you how smart you are or to tell you that you already have the right solution.

More than that? You will have to pay me. I am a consultant after all.

Too much multitasking?

2007-04-22T23:28:00.000-04:00

It may seem like we are getting more done by multitasking but maybe we would be more productive and deliver better results by focusing on one thing at a time.

I'm guilty of needing to keep all my faculties engaged by doing at least two things at once. Reading the paper, eating breakfast, listening to the radio would be typical. On Sunday night I'm switching between doing my blog, watching the hockey game and talking to my son in Vancouver. Probably not focusing adequately on any one of them but feeling productive by doing several things at once.

Also working on two interesting books at the same time. Jim Collins "Good to Great" and Henry Mintzberg's "Manager's, Not MBA's". Both have quite controversial and and unconventional points of view. Collins' research on companies that have gone from poor to exceptional performance concludes that none of them brought in celebrity CEOs that made big breakthrough strategic moves. Mintzberg makes a strong case against the value of an MBA for future managers and the damage done by the emphasis on analysis and bold strategic decisions by MBA trained executives. They would both suggest the recent history of HP under Carly Fiorina proves their point. She apparently disagrees.

Can we learn anything good from the celebrity CEOs that get so much attention as visionary leaders with exceptional entrepreneurial skills? I would say yes we can extract some useful ideas from their business strategies and tactics, but their are two important things to remember. First, their unique personalities and skill sets have a lot to do with their success (and their notoriety) and cannot be replicated. Second, their industry and company knowledge and experience may not translate into success in another company. That lesson has been very expensive to learn for many Boards of Directors and Shareholders. Think HP or Home Depot.

That's all for tonight. My battery is dying and Calgary-Detroit are in overtime!

Spring in Montreal

2007-04-19T13:23:00.000-04:00

Maybe not that unusual for Canadians, but we've gone from four inches of wet snow on Monday morning to warm and sunny today with a forecast of 23C on the weekend. Winter to summer in less than a week? Welcome to Montreal in 2007.

No this is not another rant about global warming. Enough is being said, blogged or otherwise, about that subject without my personal contribution. This is more about recognizing what is unique and worth appreciating about our hometown.

Just back from a trip to Spain where the historic sites go back almost 3000 years to 800BC when the Phonecians first built sophisticated structures at Cadiz, followed by the Romans then the Moors and the Spanish Catholics, all on the same site. Makes our upcoming 400th anniversary of the founding of Quebec City seem fairly recent. But as a native of south-eastern BC where a 40 year old log cabin has historical significance it is still fascinating to me. And they're still here. I had lunch yesterday with a M. Leduc who is a 13th generation Quebecer.

And I thought I was a real Canadian as a third generation native. But I do feel lucky to be able to enjoy the special charms and features of two home towns - Kimberley, BC and Montreal, Quebec.

Blogging discipline

2007-04-18T18:07:00.000-04:00

Now that I've said I'm committed to blogging for the greater good, more than just the personal satisfaction, I'm going to have to keep it up.

Flurry of topics to consider - more business advice from Uncle Ralph, comments on the Virginia Tech massacre, business issues discussed at lunch, or the best seller I finally bought "Good to Great" by Jim Collins?

Let's settle on the latter - best business books that must be read if you're serious about being a better manager or running a more successful business.

On my list:

Built to Last, also by Jim Collins
In Search of Excellence by Tom Peters and Tom Waterman(?) the original business best seller that is claimed to have started an industry.
Ben Franklin's 12 Rules of Management by Blaine McCormick and the Autobiography of Ben Franklin by Ben himself (obviously).
Swim with the Sharks Without Being Eaten Alive by Harvey Mackay
The Bootstrapper's Bible by Seth Godin
The 7 Habits of Highly Effective People by Stephen Covey
First, Break All the Rules by Marcus Buckingham & Curt Coffman

And on your recommended reading list?

Who is Uncle Ralph?

2007-04-17T15:52:00.000-04:00

This is Uncle Ralph checking in.

Who am I? I'm a creation of Del Chatterson. He's too humble to offer all this advice and insight himself so he has created this pseudonym. Remember Mark Twain? And how about Samuel Clemens, why was he hiding behind a pseudonym?

I am a composite character of all the best managers that Del has ever met or learned from. He attributes to me all the best advice he has ever received from colleagues, associates, employees, customers, competitors, teachers, writers and his parents. I have learned more lessons from experience than he or any other one person will ever learn for themselves. Or as his sister puts it, "learn from the mistakes of others, you can't live long enough to make them all yourself."

So I will offer wise words of advice and counsel to business owners, managers, entrepreneurs and executives without any inhibitions, humility or modesty. I will moderate the e2eforum and facilitate discussion between business peers and expert advisors. My intent is to to help improve people's business performance and their personal lives. I am optimistically ambitious about what we can accomplish together.

Until the next time ....

Trying harder

2007-04-17T15:16:00.000-04:00

OK, after more browsing of other people's blogs I have been suitably inspired/motivated to try harder.

You can give the credit (blame) to the bloggers listed in my sidebar - Mitch Joel, Rick Spence and finally Jim Estill. You may not know them but they're worth a visit; maybe they'll inspire you too. Mitch is a marketing guru in Montreal, Rick is a business writer on entrepreneurship, and Jim is a very successful entrepreneur in the Canadian computer industry.

It seemed to me that blogging was very narcissistic - a self absorbed, lonely, anti-social mission to make daily diary entries and expose them to the world. Who wants to browse your bad writing about who you are, what you're doing and what you think? Who cares?

But now I can appreciate that it is more of an expression of the personal desire to share ideas and information and to expand our personal networks through the Web. It is also a good discipline to force ideas into writing and then expose them to interested readers for critique and discussion.

So this blog is now the introduction to Uncle Ralph and the e2eforum's mission to inform, educate, advise and inspire other business executives and entepreneurs.

Stay tuned.

Slow progress

2007-04-12T17:16:00.000-04:00

OK now its more than two years after that first post... where did the time go?

e2eforum has made little progress beyond the concept - a place online for entrepreneurs and executives to share ideas, information and inspiration.

Where to start? How to create a "forum" with enough partipants to make it interesting and valuable?

Some ideas and opportunities are developing. A first draft website is underway and the concepts are being refined. Some strategic partners are appearing that provide the necessary catalyst to accelerate the launch.

Stay tuned.

Launching Blog for e2e forum

2005-02-22T22:18:00.000-05:00

This is a start.

First discussion group for e2e forum. A place to share ideas and input on business, management and personal development.