Thursday, December 29, 2005

Keep Those Water Cooler Conversations Under Control

With the national landscape swiftly changing, even the "water cooler" discussions about the prior evening's television-viewing have heated up from rehashing season premieres or the weather to highly-contested political debates and controversial government bailouts. Rich Masters, a specialist in teaching people how to prepare for televised talk shows, has several suggestions for keeping a cool head during these possibly heated discussions.

  • "Zing it!": Have one or two "zingers" ready, quotes that can help you break the ice or clinch the conversation. Think like Jon Stewart...have something amusing and memorable to add to the discussion that supports your argument.
  • "Don't Squawk Alone": Having someone like-minded to "jump in" gives you a chance to collect your thoughts.
  • "Give in-- a little": Don't be afraid to concede a smaller point to win the larger argument. Besides, being agreeable can throw your opponent off-guard as well.
  • "Stay Calm and Polite": As Masters explains, "If you are smiling it will leave the person with a positive impression." And luckily they cannot hear your thoughts.

Remember, injecting humor into a situation with a pithy saying or a witty retort, maintaining relationships with like-minded people, being willing to concede on the small stuff, and remembering to take conflict in stride will help you maintain relationships as you build a stronger business.

Wednesday, December 21, 2005

Are You Watching Your Numbers?

In the and post-Enron era, one would think stock inflation had been outlawed altogether. But according to the article “Soft Numbers” in The New York Times Don Durfee’s research in CFO magazine tell a different story.

Durfee reports that more than half of chief financial officers say they can legally influence reported earnings by 3 percent or more.

“When presented with various scenarios in which their companies would either beat or miss analyst expectations, a third of respondents said they would try to influence the results,” notes Durfee.

“If your percentage of sales uncollectible could fall anywhere between 2.1 and 2.5 percent with equal likelihood, you might choose 2.1 percent if you wanted to increase your earnings,” says Michael Peters of Villanova University School of Business. Peters helped survey 743 senior finance professionals worldwide, along with Rich Houston of University of Alabama and Jamie Pratt of Indiana University.

Finance chiefs don’t believe many auditors would report any manipulations, even if they caught them. Every company must ultimate make their own decision about ethics policies. But decisions made for short-term gain can have long-term repercussions. Keep that in mind as you work towards building a stronger business.

Tuesday, October 25, 2005

Without Outside Feedback, People Tell Themselves Strange Stories

It's all too common (and easy) for us to criticize leaders in government and industry for their shortcomings and missteps -- and sometimes they give us ample ammunition!

Of all of the recent talk about President Bush's nomination of Harriet Miers for the supreme court post that I find most interesting is that on his selection process. Both conservatives and liberals hark on the limited pool that President Bush drew from in selecting Miers.

What's remarkable about this line of criticism is that they're right about the distortion. And that we do the same thing to ourselves more often than we realize.

Here's an example. 74% of Americans believe that they're above average drivers, according to a 2003 survey by the Journal of Safety Research.

Doesn't that strike even the most mathematically challenged among us as being slightly off kilter?

Only 1% of those surveyed believe that they're below average drivers.

To build a stronger business, we must take a hard, honest look at our current situation -- our customers, our finances, our communications, our marketing, and so on -- and that's easier to do cleanly with expertise that is not part of the company culture that we've created.

I know the truth in this from working inside a Fortune 100 company, as a entrepreneurs who's hired outside lawyers and accountants, and as a consultant to business leaders.

How about you? What are your perspectives and experiences with outside feedback?

Thursday, September 29, 2005

Trusty Texting

The article “All E-mail (All the time),” from Inc. illustrates the pervasiveness of Email in the workplace. Alpine Access is a company where employees are based in their homes and conduct business by phone and e-mail. Here are some principles that govern their interoffice email protocol.
  • Clarity is everything —important messages need to be carefully vetted for style, grammar and nuance before they’re sent.
  • Trust but verify — employees are required to acknowledge receipt of e-mails. Managers constantly check back to see that employees are in the email loop and not missing any messages.
  • Know when not to type —e-mail may be a great convenience, but for sensitive issues like work appraisals or conduct issues it’s far better to have a face to face meeting or a phone conversation.

Understanding the best way to use email across your company can help you build a stronger business.

Monday, September 26, 2005

Win More Business by Sharing the Risk

Motivating customers to buy your product can be the biggest challenge for a company trying to build its business. Inc. article, “…Or Your Money Back?” shows readers how they can transfer the risk of a transaction from their customers to themselves.

That’s the strategy Matthew Smith enlisted to develop his Shoes for Crews business. He offered to pay workers’ compensation claims to give peace of mind for managers concerned about injuries and workers compensation. It was too attractive an offer to resist and nine of the 10 largest restaurant chains buy the shoe brand or actively encourage their employees to do so.

Initially Smith put a $500 cap on the warranties but that was extended to $5000.

Introducing the warranty had an enormous impact on Smith’s business. Sales of his $25 to $75 shoes multiplied and he was able to secure impressive contracts with large companies.

Here are some suggestions for warranty offers:
  • Test your warranty offers on a handful of key accounts.
  • Do exactly what your warranty pledges you will do.
  • Fulfill your promises and clients will return.

By figuring out a way to minimize your customers’ risk, you can build a stronger business.

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Thursday, September 22, 2005

Offshoring Not a Panacea for Businesses

Inc’s article “Cost-cutting: Offshoring isn’t Such a Sure Thing,” highlights the downside of using contractors in other countries to reduce work and costs for businesses.

Offshoring may be one way to reduce costs, but companies report that it can cause problems as well as solve them.

A survey by Chicago based DiamondCluster International (now Diamond Management & Technology Consultants) found that the number of executives satisfied with outsourced IT vendors plunged 17 percentage points in 2005 compared with 2004 – the first decline since 2002.

Early termination of relationships between buyers and offshore service providers soared 51% in 2005, double that of 2004.

Delays in resolving customer issues topped the list of reasons for the dissatisfaction with offshoring.

Despite the growing level of dissatisfaction with outsourcing, 74% of participating companies said they planned to increase IT outsourcing in 2006 by reducing their domestic workforce and increasing overseas spending.

Building a stronger business means managing costs and that may mean offshoring. Before you make a move, however, thoroughly weigh the risks involved.

Monday, September 19, 2005

Etiquette for Entrepreneurs

The “Mind Your Manners” article from Inc. reminds us that thinking globally isn’t just a mantra for dealing with supply chains and foreign markets. You also have to be a bit of a diplomat to navigate the sometimes complex waters of foreign protocol.

After all, what’s acceptable in the US may be a grievous deal-breaking faux pas in other countries. All the business acumen in the world won’t save a business deal unless you mind your manners in whichever country your business dealings occur.

Here’s an introduction of protocol tips pulled from Norine Dresser’s updated 1996 book “Multicultural Manners”.
  • Business cards: When you accept a business card in Asian countries, writing on a card or shoving it in your pocket is considered insulting.
  • Desk etiquette: don’t lean against or place objects on the desk of a prospective Asian client; it’s considered disrespectful.
  • Deal-making: In China, Korea as well as many Middle Eastern and Latin American countries, don’t rush the deal. A decent rapport must first be established through informal meetings before the negotiations begin.
  • Public displays of affection: in the Middle East it is customary for men to greet each other with a kiss on both cheeks and holding hands between two men is common, but take your host’s lead.

Having insight into foreign protocol will win you respect and good sentiments in whatever country you do business, essential to building a stronger business.

Thursday, September 15, 2005

Phishing Raises Risk of Online Transactions

The issue of PayPal security is addressed in a recent letter in the Ask Inc. section of Inc. For small businesses, PayPal can be a useful device for paying employees. But just like many software programs it can be manipulated by professional scammers. Although physical goods are covered by a seller protection policy, it does not yet cover digital goods. Here are some ways you can protect yourself by improving security.

  • Software can be easily purchased to plug PayPal security holes. Companies such as Cybersource offer antifraud services.
  • Flag orders for shipping addresses more than 50 miles away from the billing address for computer IP addresses.
  • Monitor customer behavior; check for any unusual transactions that veer away from normal practice such as someone whose orders average $50 per transaction suddenly jumps to $1000.
  • Call for verbal authorization.
  • Look at how much you spend on refunds and set aside enough money to cover them.

By protecting your online transactions, you can improve your customers’ confidence as you strive to build a stronger business.

Wednesday, August 10, 2005

Hire Globally, Succeed Locally

Companies have realized that to grow and develop innovative solutions from product development to problem solving, it’s best to have a diverse, international staff, writes Jeffrey Pfeffer in his Business 2.0 article, “Recruiting for the Global Talent War”.

Although diversity in business has been caught in a cultural war of quotas and political correctness, multiculturalism can bring people with a wide diversity of experiences with the benefit of insight developed from growing up in another country, or extended periods of working overseas.

In most developed countries birth rates have dipped below the replacement level. This means that when managers retire, the line to replace them may shorten drastically. In China, Hewitt Associates says there are few seasoned executives older than 40 because of the dramatic effects of the cultural revolution. Colgate Palmolive employs 20,000 employees in China but few Chinese managers.

It can be a challenge for companies to overcome their innate “homosocial reproduction” tendencies, says Pfeffer. People naturally identify with people who are similar to them. It takes more effort to hire and promote people different to us.

Employees need to cultivate global expertise by working internationally even if that means a tough relocation.

By picking employees that can offer a wide range of insights derived from international experiences, you may develop a more sophisticated outlook and are more likely to develop more innovative solutions. By being more open to hiring people with a variety of backgrounds, you’ll build a stronger business.

Sunday, August 07, 2005

The Brain Science that Keeps Couch Potatoes Seated

The next time a store prepares its latest advertising pitch, they may look at the results of brain wave activity from an EEG machine as well as their market research. Neuromarketing is a new approach to finding out how the brain responds to marketing and the discipline is making waves in the advertising community.

Neuroscience combines clinical psychology and neuroscience. Employing functional magnetic resonance imaging (fmri) and electroencephalography, EEG machines that are mobile, less intimidating and less costly.

The global advertising industry is worth $358 billion, but neuroscience companies hope to grab a share of the market.

British firm Neuroco is one of those firms. Based on its neuromarketing research it presented the ideal way to structure an ad to maximize brain response and get viewers in the ideal mode to buy the company’s product, in this case an SUV.

• Establish the mood
Pulsating music in an outdoor setting as the SUV plows down a highway creates
increased EEG activity in the left frontal lobes suggests a sub-conscious emotional

• Build Tension – show the SUV narrowly avoiding a group of baby seals on the highway – the drama creates a massive frontal lobe response, more heart flows to the brain and alertness increases.

• Deliver the message: three seconds after the tension dissipates and the mind relaxes as people see the SUV is on an unobstructed path into the sunset, hit the audience with the new information.

Neuroco plans to evaluate the subliminal of colors, logos, and product features. It can gauge the impact of music or jingles, celebrity endorsers, and retail design that have the most positive impact on consumers. They can even measure such subtle effects as the feel of automobile upholstery and the sound of a car door slam.

The experience has demonstrated to researchers like nothing else has the power of emotions in decision-making and advertising is particularly well disposed to taking advantage of that. Erik du Plessis, the author of The Advertised Mind: Ground-Breaking Insights into How Our Brains Respond to Advertising.

Perception of short term rewards is controlled by the limbic system. Emotions come first in response to a sales pitch and exert a powerful influence on how we make decisions.

Stanford University communications professor Byron Reeves cautions that advertisers shouldn’t transmit brand messages or product claims during an emotionally aroused phase of a commercial. Instead they should do it immediately afterwards when the brain is best disposed to receive the information.

If you can develop a marketing campaign that has a powerful but positive affect on how people view your company and its products, you’ll build a stronger business.

Sunday, July 24, 2005

Ongoing education requires an open mind

"Education's purpose is to replace an empty mind with an open one."
-- Malcolm S. Forbes

Mary Callahan Edros, CEO of JPMorgan Private Bank, is profiled in today's NY TImes column, The Boss.

In it, she tells of recovering from an early career blunder in handling a client's account that cost the client a seven figure loss in his holding. How she dealt with this experience is instructive for all business owners and entrepreneurs.

As soon as she realized the situation, she got on a plane and flew to Louisiana to meet with the client. When she explained that one of the client's major holdings was about to go bankrupt, the client wanted to know how this happened. Mary Edros explained that she had made a bad choice and took responsibility for the decision. The client then asked what they should do about the situation going forward.

The experience marked a major milestone for Mary Edros for the following reasons. She learned that:
  • Taking responsibility means accepting the consequences for both strong and poor performance.
  • Staying connected and staying in communication with your client makes a world of difference.
  • How you handle yourself under adverse conditions can as easily mean a positive turn in a business relationship as it could a negative turn. The client is still with her, 7 years later.
  • Monday, July 18, 2005

    Use Refunds to Lower the Risk

    Theaters are struggling. After all, people feel pretty sore after spending $10 a ticket to have a mediocre entertainment experience.

    That's why I was amused to read the Wall Street Journal story about AMC and Cinemark offering "no-hassle" refunds for limited engagements for films like "Cinderella Man." It's encouraging that distributors are taking some of the risk. Perhaps by having that skin in the game, they'll be able to leverage their feedback (in terms of quantitative refunds and qualitative anectdotes) in discussions with their suppliers.

    How do you offer your clients and customers ways to reduce their risk?

    If you're clever, you'll use their feedback to improve your product and/or service.

    Thursday, July 14, 2005

    Lessons from the Front Line: Malcolm Bricklin

    Inc.’s profile of auto industry entrepreneur Malcolm Bricklin in “Would You Buy a Chinese Car from This Man?” offers some refreshing insights into the business acumen of a 50-year veteran of the car industry. Here are some of his sage words of wisdom:

    1. Persevere
    “Where would we be if Edison had stopped after 10,000 tries?”

    2. Hiring
    “I love nepotism. My friends and family are smarter than most people and they certainly care more.”

    3. Leadership
    “As CEO I don’t have all the answers, just the questions.”

    4. Failure
    “The things that people see as failures are often the steps to success. I got my fame and power from the failure of the Bricklin. What did I get for the biggest failure of my life? I got a stamp and a $20 coin in Canada with my car’s likeness on them.”

    5. Working with international partners
    “I have gone out of my way not to learn other languages because I will inevitably say something incorrectly. Besides, listening to me is like listening to a fire hose. So I depend on an interpreter. If the person I’m speaking to isn’t smiling then I know the interpreter is saying the wrong thing.”

    6. Business Savvy
    “Being smart can keep you from being wise. Logic is the biggest deterrent to awareness.”

    7. Email
    “If there are too many e-mails on my computer, I just turn it off. I had so many e-mails recently that I just got up and erased them all. If you want to be in touch with me you’d better do it in person.”

    Draw some inspiration from Bricklin’s words and see if it can help you build a stronger business.

    Wednesday, June 29, 2005

    Brand Loyalty - How Strong is Yours?

    Jared Sandberg writes in today's WSJ about how brand loyalty in a family creates lines, that if crossed, create tension and strain in relationships. Here are a few examples cited:

    • An Ohio-based husband worked for P&G and his wife worked for Kao Brands. They argued about what shampoo to have in the house and whether to even allow products from the competing company. The husband (with stronger brand loyalties) acquiesed when the wife raised the issue that her job brought in more money to the household.
    • Tom Muccio was quoted in the column as saying that his Del Monte Dad would "hit the roof" when Tom's mother would buy private label brand canned goods to save money. Tom says, "it only happened a couple of times and then it didn't happen any more."
    • In 2003, a Coca-Cola bottling company driver was fired for buying a Diet Pepsi from a store where he delivered Coke. Management at the Sylmar, CA bottling plant told the employee he was being dismissed for violating a policy prohibiting slander of Coke products.

    In large corporations, such as auto manufacturers, brand loyalty is driven as much by the unions which want to prevent job losses as by management interested in market share and stock prices.

    Small businesses can build brands, as well, much to their benefit.

    In building a stronger business, you need to ask yourself 3 questions about branding:

    • What brand(s) have you developed? Developed brands are clearly identified and represent values choices as much as they do product/service choices.
    • How strong are those brands? In other words, how much do they influence your clients and customers to buy when presented with a choice in the marketplace?
    • What steps do you need to take in the next period (quarter, year, etc) to increase your brand? Success stories and endorsements can be valuable in advancing your brand.

    You might find the branding class that I'm teaching at MyBusinessGym to have more suggestions and techniques that you'll find useful.

    Tuesday, June 21, 2005

    A Change Can Be as Good as a Rest

    "For fast-acting relief, try slowing down."
    -- Lily Tomlin

    As we enter the summer months, business owners and entrepreneurs should remember the importance of taking time off to recharge and refresh.

    Unlike most other lines of work, the entrepreneur is almost always on. Always thinking of the new product under development, the client who needs attention, the opening that needs to be filled, the cash flow that needs to arrive.

    Taking a break from business can often be the best thing you can do, paradoxically.

    When you unplug for at least a day or two -- no checking e-mail or voice mail, your mind and body have a chance to step back from the daily routine.

    When I go on vacation, I make sure that I get at least 8 hours sleep a night, bring non-business books to read, and go for long walks/bicycle rides in new locations to really give myself a chance to recharge and stimulate my mind in relaxing ways.

    What works for you?

    Tuesday, May 17, 2005

    Start with the Belief that You Can

    "He is able who thinks he is able."

    -- Buddah

    It's advice that's as relevant today as it was 2,500 years ago.

    A core responsibility for a business leader is to develop confidence -- among staff, clients, and shareholder -- in order to attract the necessary investments in the business to make success possible.

    People will contribute the money, effort, loyalty, talent, support, attention, and best thinking when they believe that it's for a winning cause.

    What are you doing this week to perpetuate that belief in your organization?

    Sunday, April 24, 2005

    I Admire Your Enthusiasm, But You're Heading in the Wrong Direction

    "I wish people who have trouble communicating would just shut up."

    -- Tom Lehrer

    A client at a financial management firm said something remarkably similar to this statement earlier this week.

    To build a stronger business in the area of interpersonal communications, you've got to do three things at the same time: encourage communication, model clear communication, raise awareness of different communication styles.

    The weakest companies stiffle communication, which cuts off vital feedback and can cause all sorts of backlash and resentment. If you find yourself in a culture that is disrespectful, arrogant, or otherwise hostile to open communications, you may have to get out from that relationship, group, or company altogether.

    Good companies not only encourage communication from and between all sectors, but they make a conscious effort to provide training and personal examples of communication that is clear, concise, and solution-oriented.

    The very best companies and organizations explicitly recognize, reinforce, and reward good communicators. Part of good communications is supporting others to become more proficient. I've been fortunate to work with managers and leaders in companies such as DuPont, Apple, IMS, and Astra-Zeneca who demonstrated this with one-on-one interactions as well as in group meetings.

    What examples of good communications are you aware of in your company?

    Sunday, March 20, 2005

    Leaders are Readers

    The smallest bookstore still contains more ideas of worth than all that has been presented in the entire history of television.

    -- Andrew Ross

    Television is the default entertainment source for such a large part of society, it seems blashemous to reproach.

    However, to the audience of business owners and entrepreneurs who read these posts, it's absolutely vital to be aware of the quality of your entertainment/downtime choices.

    Keep these guidelines in mind the next time you're looking for a way to unwind:

    1. . Does your activity match your intention?
      If you want to unwind from a stressful day, then do something physical like taking a walk, a bicycle ride, or an exercise class. Sitting in front of the tube is often a way to collapse, not relax, after a hard day.

    2. . Does your activity stimulate your body, mind, emotions?
      Call an old friend on the phone, go feed ducks at a park, join an after work softball league. Involve two or more areas.

    3. . Does your activity make you feel more isolated or connected to others?
      Having friends outside the circle of work relationships is important for life-work balance. The characters from Friends don't count. People who know your name and know who you are do count.

    4. . Does the activity match who you are today?
      Often, we perpetuate habits that were formed long ago. It's helpful to re-examine and upgrade aspects of your life. Ask yourself if this form of relaxation really meets the needs of who you are today and where you want to go with your life. Maybe you're ready for something bigger. Maybe something entirely different would really float your boat. Explore, discover!

    5. . Set up your home environment to make effective relaxation easy and automatic
      This step involves proactive planning. It's so much harder to do certain things when you need to do them, compared to ahead of time. To set up a better relaxation environment at home, you might want to have meals prepared in advance (or at lease the shopping or prep work done before you arrive home). You might want to reorganize your CD collection or iPod play lists. You might want to schedule a tennis match with some buddies a week in advance and make it a regular appointment to avoid having to make arrangements each week.

    So, what options have you thought of as a result of this article?

    Monday, February 14, 2005

    Quick Quiz -- What Holiday is Responsible for the Most Greeting Cards?

    Is it:
  • Valentines Day
  • Mothers Day
  • Christmas
  • Fathers Day

    Hint: It's a holiday centered around someone wearing red, but it's not the one you think!

    According to Hallmark, Christmas dwarfs the second-highest, Valentines Day, by a hundredfold.

    Here's the data from Hallmark: Christmas (1.9 billion cards), Valentines Day (192 million), Mothers Day (150 million), and Fathers Day (101 million).

    Happy Valentines Day. ;-)
  • Stronger Business Quote: Frederick Wilcox

    Progress always involves risk; you can't steal second base and keep your foot on first.

    -- Frederick Wilcox

    This quote uses a baseball metaphor to illustrate the need to let go of some thing(s) before we go after others. Successful business decisions require a combination of analysis, risk, and courage.

    Wednesday, February 09, 2005

    Give Us (service) Online...And Be Quick About It!

    The Pew Internet and American Life Project said that nearly half of Internet users (44%) now manage their bank accounts online, according to a survey Pew released today.

    What makes this November 2004 survey significant is that:
  • This activity has grown faster than any other tracked since Pew has been doing this research (March 2000)
  • It shows growth in a non-entertainment category
  • It shows growth among a population that is mainstream (ages 28-39, men and women)

    OK, no surprise that those most likely to bank online come from more affluent households. (Add a few premium channels to a basic package, and a cable tv-internet access package can easily top $100 monthly.)

    Implications for your business:

    1. - Now that (technology late adopters, conservative culture) banks have opened this channel and met with success, it's time for you to re-examine what service(s) your clients might be ready for now. What ideas have been "parked" and should now be taken off the shelf?
    2. What other assumptions are you making about your current clients that bears re-evaluation?
    3. What projects under development need to become higher priority to meet this emerging market readiness (and to avoid losing clients/customers to faster competitors)?
  • Tuesday, February 08, 2005

    What Does It Take to Get Value from a Business Network Event?

    I loved Carol Hymowitz's column in today's Wall Street Journal titled, "Networking with CEO's and other VIP's Takes Homework, Confidence" for 3 reasons:

    1. It highlights the nature of networking as relationship building, rather than a "quick sale"
    2. It points out the critical importance of intention as it contributes to networking success: knowing who you want to network with and what you have to offer (i.e. what's in it for the other guy/gal)
    3. It illustrates how to get a return on the investment of an elite conference investment through new ideas, strategies, and trends.

    Now, I haven't been to Davos for the World Economic Forum and chances are good that you haven't either, but the lessons that these participants share are applicable to any business networking situation, even those that cost less than $37,000 to participate.

    What else have you found to be key to getting the most from a business networking event?

    Monday, February 07, 2005

    What's Key to Driving Economic Development in a Region?

    A lot of factors contribute to economic growth.

    However, when you have an overlap of 3 factors -- an educated workforce, investment capital, and networking opportunities -- the rate of business activity is greatly acclerated.

    Business historian and Working Solo leader Terri Lonier labels these three factors as:

    1. Human capital
    2. Financial capital
    3. Intellectual capital

    and introduced me to the term she coined to represent this confluence as the nexus of capital.

    I've found it to be a very useful term.

    Consder the following questions:
  • How is your nexus of capital doing in your company and in your community?
  • What can be done to improve these factors?
  • Who stands to gain?
  • Whose cooperation, support, and influence would be beneficial?
  • How could you start today?
  • Sunday, February 06, 2005

    Stronger Business Quotes: 3 on Stress

    "The reason why worry kills more people than work is that more more people worry than work."
    -- Robert Frost

    "I have a new philosophy. I'm only going to dread one day at a time."
    -- Charles M. Schultz

    "I don't suffer from stress -- I'm a carrier..."
    -- Scott Adams

    You've heard of the good stress that pumps us up and allows us to rise to challenges (eustress) as well as the bad stress that can hinder our thinking and actions in addition to putting undue wear and tear on the body (distress). The interesting thing about stress is how much is determined by our internal perspective compared to external circumstances.

    Friday, February 04, 2005

    Lessons from Malcolm Gladwell's Blink talk - 2/2

    When Malcolm Gladwell, author of Blink: The Power of Thinking Without Thinking visited Philadelphia yesterday, I asked him if the ground hog's proclaimation of winter's duration based upon a quick glance at his shadow qualified as 'blink' thinking, he responded that it had not occurred to him to research that particular line of inquiry.

    Lessons from Malcolm Gladwell's Blink talk - 1/2

    I took advanage of the opportunity to participate in a "meet the author" event at the Philadelphia Free Library when it hosted Malcolm Gladwell.

    Here are four lessons I learned from his presentation:

    1. People are unaware of our biases. We all have blind spots. Becoming aware of them on your own is like a fish pondering a bicycle ride.
    2. Snap judgements happen fast. This isn't just a clever witicism. Consider the study where two groups evaluated the effectiveness of a college instructor. Group A evaluated the professor at the end of the term. Group B in one version only spent an hour listening to single lecture. Turns out the evaluations between the groups were quite similar. Now, the variations become interesting: Group B only gets a 1 hour video of the instructor -- essentially same evaluations; when Group B only got 10 minutes of video, it turned in essentially the same evals; when Group B got only 10 seconds of the lecture, yes, essential the same evaluation; and then, finally, when the sound was removed and only 10 seconds of a visual was presented, the same essential evals were scored. Wow!
    3. Sometimes it's important to exclude data to make better evaluations. Gladwell is a big fan of screens to remove visual data because of the overwhelming bias it creates. When asked how he would structure presidential campaigns to remove extraneous influences, he said he'd want the candidates to be hidden from public view for the year prior to elections, and only issue written or accent-neutralized audio speeches.
    4. Changing the environment changes solves the problem now! Admitting bias is hard; removing its influence by changing the environment is considerably easier and more expedient.

    Here's a link to his worthwhile book:

    Thursday, February 03, 2005

    Weaknesses Can't Be Hidden (Forever)

    Valerie, a strong 11 year old girl at our club who practices with the strongest men players because her strokes are so good, stopped playing tonight in an uncharacteristically abrupt way. We wondered if she was injured. "No," she said, "Patty just came on the court and I didn't want her to see that I was having trouble with short balls tonight."

    I find the underlying lessons between business coaching and tennis coaching highly transferrable, so I offer the following three points as conversation starters with your trusted advisor/coach:
  • It's powerful to be forthright about what makes you uncomfortable. Being direct is an important communication skill for all business leaders and entrepreneurs. What's an example of how you were concise and direct today?

  • When you're feeling low on reserves, you're less likely to take risks, whether perceived or actual. The solution to feeling low on reserves -- whether they're of confidence, endurance, or cash flow -- is to build them up. Identify a resource (either personal or in your business) that is vital and create a super reserve of it. That's right, not just a day or a week's supply, but 3-6 months. What a difference that will make!

  • Eventually, weaknesses have to be addressed. They won't go away on their own, and your competition will find a way to exploit them sooner or later. You might as well address them on your own terms and at your own pace while you have that luxury. Valerie needed to work on her short game, and she was going to do it when she felt less vulnerable and more in a learning mindset. She would have a few weeks to schedule time to do so before her next tournament. What is a weakness that you're aware of in your business that deserves your attention and resources now, before it becomes even more of a liability down the road?
  • Monday, January 31, 2005

    Stronger Business Quote: Thomas Edison

    I never perfected an invention that I did not think about in terms of the service it might give others...I find out what the world needs, then I proceed to invent.

    -- Thomas Edison

    This quote underscores the genius of linking market research to product development.

    Sunday, January 30, 2005

    Job Satisfaction Impacts Retainment Capacity

    We've all heard how keeping employees happy keeps employees on the payroll, and that job satisfaction includes thinks like being inclusive, open, appreciative, helping the employee see how his role fits into the larger organizational mission, providing opportunities for developing skills and following advancement paths, and so on.

    Today I came across a quantitiative measure that shows the relationship between pay rate and the probablility of retention that I found very interesting because it presents the information in a way that every business leader can use as a litmus test to see which employees might be lost to a better offer.

    W. Michael Kelly of the Saratoga Institute says, "The rule of thumb is that in a healthy job market an unhappy employee will bolt the company for a 5 percent pay increase, but it will take at least an increase of 20 percent to compel a satisfied employee to jump ship."

    "Doing something" to show employees that they are valued is better than doing nothing. A thoughtful manager could spend time reviewing an employee's goals (or meeting to set those growth and achievement goals!), send a note of appreciation for a job well done, or appoint a high-potential staffer to lead a new project or initiative, among many other steps.

    These things require clear thinking, prioritization, and follow-through, not a big budget, right? It's the strategic use of discretionary time.

    What have you done lately to improve job satisfaction at your company?

    Tuesday, January 25, 2005

    Saying You'll "Underpromise and Overdeliver" is an Insult

    C'mon, people are smarter than that cliche gives credit.

    If a sales person agrees to set 10 appointments next week when she really expects to make 15, don't you think her sales manager will catch on after a week and simply raise the bar?

    If a middle manager promises his direct reports 45 minutes for weekly catch-ups and regularly goes an hour or more, don't you think that after the second or third time the staffers will realize the gesture as an empty quantity over quality (depending on how the meetings go) or a terrible example of time management?

    If a computer consultant claims to be able to fix a problem (that he's fixed before but not revealed to the client) in less than 3 hours when it actually takes 30 minutes because he wants to promote his "genius" reputation, guess what happens when the hype meets a problem that he doesn't have the answer to in his back pocket?

    If an outside accountant promises that batch of 1099/W-2 forms by Friday and you say you need them by Thursday because of another deadline, the accountant should be able to deliver the forms without a long story of how he killed himself to get them to you on time. The martyr story just throws into question the accountant's lack of a system to process this routine request, or lack of project management skills to juggle multiple priorities.

    I've heard all of these from client experiences or seen them first hand.

    Here's my advice if you've ever done this or feel tempted to do so in the future: stop it.

    It's not only insulting to "underpromise" when you know you can do better, but it's a distraction from the true mission of adding value to a business relationship and doing so erodes your authenticity. Focus on the higher priorities and the bigger picture.

    That's my position, what's yours? Do you think underpromising and underdelivering is ever a good idea?

    Sunday, January 23, 2005

    Stronger Business Quote: Ralph Waldo Emerson

    It is one of the beautiful compensations in this life that no man can sincerely try to help another without helping himself.

    -- Ralph Waldo Emerson

    This quote provides context for service leadership.

    Saturday, January 22, 2005

    Cap It So You Can Keep It

    The EPA's report released a few days ago confirmed previous tests that airline drinking water did not meet the agency's safety standards.

    Obvious implication: when you fly, bring your own bottled water; or, request bottled or canned beverages on board, because even tea or coffee can contain the "compromised" water.

    Now, here's the part that really makes my turbines spin: From Q3 2004 testing period to the Q4 2004 testing period, coliform bacteria was found on MORE planes, not fewer. In September, it was found in 13% of the planes in the sample, in December, it rose to 17%. That's approaching almost 1 in 5 planes ...and this reading takes place 3 months after warnings were issued!

    OK, the airlines are getting an undue share of the public's attention and criticism (so many of us are concerned!). Perhaps we can't make changes to airline operations and stocking procedures. However, let's take a quick check in our own back yard.

    What's one small, simple-to-correct flaw, mistake, or weakness in your business that you've been tolerating even in the face of client (or, gasp, government regulatory) feedback?

    Three words of advice from this business leadership coach: fix it now.

    Cap your water when you travel so you can keep your lunch; cap these energy leaks in your business so you can keep it healthy and growing.

    Monday, January 17, 2005

    Celebrate Ben Franklin Today!

    Ben Franklin's inventiveness, curiosity, talent, dedication to public service, and entreprenurial spirit live on and light our world today, perhaps more than any other American.

    Here are a few of my favorite Ben Franklin quotes in honor of this feisty fellow Philadelphian, particularly apt for those who want to build a stronger business:

  • A cat in gloves catches no mice.
  • A penny saved is a penny earned.
  • Lost time is never found again.
  • The definition of insanity is doing the same thing over and over and expecting different results.
  • If you'd like to know the power of money, go and borrow some.
  • Experience keeps a dear school, yet fools will learn in no other.
  • Human felicity is produced not so much by great pieces of good fortune that seldom happens, as by little advantages that occur every day.
  • Three may keep a secret if two of them are dead.
  • There never was a good war or a bad peace.
  • Laws too gentle are seldom obeyed; too severe, seldom executed.
  • In this world nothing is certain but death and taxes.

    Do you have a favorite aphorism or quote of his that you'd like to share?
  • Sunday, January 16, 2005

    Stronger Business Quote: Dolly Parton

    If you actions create a legacy that inspires others to dream more,learn more, do more, and become more, than you are an excellent leader.

    -- Dolly Parton

    This quote reminds us of the essential qualities of leadership in plain English.

    Saturday, January 15, 2005

    Why "Failure" Isn't an Option

    Why is it that I deliberately avoid using the word "failure" when referring to human performance?

    Is it because:
    a. I don't recognize that the opposite of success is failure?
    b. I'm one of those touchy-feely kinds of people who avoid contrarian positions?
    c. I'm incurably idealistic and think that given enough time, any set back can be turned around?
    d. For another reason: it's creates obstacles instead of solutions.

    From a strongly pragmatic point of view, I don't find it helpful to use that label in this context.

    Instead of asking, "What or who failed?" in a consulting or business coaching (or managing or supervising) relationship, I encourage you to ask, "What did we just learn?" to discover meaning in the results you just achieved.

    Blink Think - Immersion Leads to Better Hunches

    Malcolm Gladwell's new book Blink: The Power of Thinking Without Thinking was reviewed by David Brooks in the Sunday NY Times this weekend.

    Gladwell's primary premise reminded me of a survival phrase we used in college to remind each other that we could hone our instincts for scientific and engineering thought processes through sufficient immersion in the subject matter. The expression was, "that's intuitively obvious to even the most casual observer."

    An example from Physics: acceleration is force divided by mass. Intuitively obvious to even the most casual observer (...who understands how to manipulate some form of F=MA, the meaning, units, and relationships between those entities, and how to diagram and apply them).

    An example from Chemistry: compounds formed from covalent bonds are usually liquids or gases at room temperature. Ionic compounds, by contrast, make up the room temperature solids. Intuitively obvious to even the most casual observer (...who understands electron balancing, molecular diagramming (those Lewis diagrams with the 'parking spots' in particular), balancing chemical equations, and so on).

    An example from Computer Science: for quick and dirty on a relatively small group of items, nothing beats a bubble sort. It just writes itself. Ah, intuitively obvious to even the most casual observer (...who has studied several different types of sorting algorithms, written and tinkered with them, analyzed how a group of methods performed on different data sets to judge relative strengths under controlled conditions, and has the experience to implement different sort routines in different languages and/or computing environments).

    Gladwell's research sustantiates this perspective (as you knew it would when you started reading this entry!).

    Now, this may seem esoteric techie trivia for building a stronger business, but you'll see the point when you consider that what you know that is specialized -- your processes, your business, your industry, for examples -- is esoteric to others, which is why they rely on your expertise.

    It's when you're out of your domain and don't have that that expertise behind you, that you can get into trouble trusting your 'blink think.'

    Three quick implications for business owners:

    1. Continue to immerse yourself in your discipline so that you develop greater gut accuracy. The stronger and more current your knowledge base, the better your starting point is for 'blink think,' as Gladwell would say.
    2. When you are seeking out expert advice, gather a sampling of opinions/recommendations.
    3. Conduct your own experiments to develop greater trust in your own 'blink think' by paying attention to your gut instinct and deliberately decide to follow that hunch. This will develop your gut instincts in other areas.

    How do you develop better instincts?
    By developing greater confidence in your decisions. Start off with low-risk, low-frequency situations, say, travel decisions 5 times a week. Keep a record of those decisions and how they turned out. (Hmm, somehow I knew that road would be closed today. Glad I took the old shortcut. I wonder why that made sense to my guy? Oh, yeah, now I remember that I heard about the construction starting on the radio last week.) Sometimes you'll find evidence, sometimes you won't. What matters more is that you recognize your successes in proportion to your non-successes.

    It becomes a positive re-inforcement cycle: the more you trust your gut or 'blink think', the more fully you will tap into the capabilities it holds and expand the range in which it serves you.

    Wednesday, January 12, 2005

    The Best Paper-Based Filing System Ever

    Are you someone who hates to file, but who hates even more to not be able to find a file?

    Do you resist filing papers that have accumulated on your desk/workspace at the end of each day because it's a tedious chore?

    Do you realize how much more productive and satisfied you'll be if you overcome this simple, but pervasive hurdle to business success?

    Make this the year that you put that time- and energy-wasting obstacle to your productivity behind you!

    This is a system that I use everyday to put my hands on any paper-based file in my system in less than a minute. I can do the filing, or my assistant can do it, and either of us can find anything in there.

    Best of all it only costs your time to implement.

    It's called giving up alphabetical filing and moving to a numeric look-up system.

    In practice, it means using the tabs of your folders for numbers, not names (of people, projects, resources, etc.), and putting an index on a spreadsheet. When you file, you records the next sequential number in a row, followed by an optional category/location, followed by as much descriptive detail as you like. When you want to find something, open your spreadsheet up and do a quick "find" on the key word/phrase that you're looking for.

    For instance, here are my top four categories (because each has its own filing cabinet or drawer):
  • Administrative Financial
  • Business
  • Household
  • Speaking engagements

    In row 33 of Household, I list every home appliance manual I own. As new ones come in, I add to the details "Toro lawnmower", "powerwasher - 1800 psi", etc., so it's easy to find when I'm looking for it again.

    If you're looking for more guidance/structure, I recommend that you visit Barbara Hemphill's website Productive Environment . She's and entrepreneural genius in this field, and has developed several great products such as "Taming the Paper Tiger" that you might enjoy. She also trains professional organizers if you want some help with your business or household organizing.
  • Tuesday, January 11, 2005

    "Check Your Credit Score for Free" Roll-out Schedule

    Business owners are ever-conscious of their credit rating because it affects their ability to borrow money from banks and insurance rates.

    Starting in December 2004, US citizens are eligible to receive one free consumer credit report annually.

    This is a good offer to take advantage of for many reasons, especially if you've not reviewed your credit rating in awhile.

    The primary driver of this is to uncover identity theft sooner and to limit the losses from this insidious crime that will affect upwards of 7 million adults in the US alone in 2005.

    The one catch to the free annual credit report is that it becomes available to individuals on a set date based upon your state of residence. Here's the basic schedule in the USA:
  • Western States - December 2004
  • Midwestern States - March 2005
  • Southern States - June 2005
  • Eastern States and all US Territories - September 2005

    Visit the Annual Credit Report web site to claim yours and review it carefully.

    The web site has an interestign FAQ page and links to the 3 major credit bureaus if you want to act sooner and pay for your report.
  • Sunday, January 09, 2005

    Stronger Business Quote: Charlie "Tremendous" Jones

    You are the same today as you'll be in five years except for two things, the books you read and the people you meet.

    -- Charlie "Tremendous" Jones

    This quote inspires me to write powerful entries in this blog so that its cumulative effect makes a positive and noticable improvement in your business life.

    Parables and elevator speeches make valuable feature articles

    Since I spent a few days with like-minded entrepreneurs in December, it seems like I'm tuned it to parables and elevator speeches more so than ever before.

    The latest example greeted me in the Sunday New York Times, where a man was written up for starting his own butler services al a carte business.

    He immigrated to the US via Canada from India to marry his wife, who his parents would not approve of. His wife died, unfortunately, and he struggled as a single parent. Out of that pain, he realized that others must have a need for help with personal organization, walking pets, preparing meals, and other general errands and administrative stuff (think of PA's, not VA's!).

    It's a great story and fits the model I teach and coach entrepreneurs to use.

    Here's the link, in case you're interested:

    Registration on the site is required, and free.

    I'd be interested in examples of parables and elevator speeches that
    you come across in your travels/reading.

    By the way, the fellow in the article is admittedly lousy at marketing, but having his business written up in the Sunday Times just might turn that around.

    Hint, hint: Do you have "sharing your parable with a magazine/newspaper journalist" as one of your 90 day business development goals?

    Saturday, January 08, 2005

    Inc Magazine's Forecast for 2005 is Tough on Small Businesses

    Amy Gunderson layed out these forecasts for 2005:

    1. Shortage of raw materials

    2. Higher benefits costs

    3. More import restrictions

    4. Tighter state budgets

    5. Increase in venture capital for start-ups

    Four of the five impact profitability with downward pressure for businesses of all sizes, both private and public.

    Read the article for yourself.

    Particularly hard hit will be human-capital intensive companies that rely on industrial materials who compete for state contracts, such as construction companies.

    Companies from solo entrepreneurs on up that employ the following the following approaches will have an advantage:

    • Look for alternatives to wood, steel, and cement in synthetics and pre-fabricated structures.
    • Incorporate contract clauses that protect you from sudden raw matrial price hikes and delays due to factors outside your control.
    • Investigate storage opportunities to stock up on materials that might get tight later on in a project.
    • Leverage this storage arrangement by exploring the possibility of selling excess stock materials to competitors at a premium.
    • Retool your marketing to diversify your market base.
    • Offer discounts for project pre-payment to avoid being caught in a mid-year or mid-session budget squeeze. By law, many organizations are required to take advantage of fee discounts whenever prudent to save actual budget dollars.
    • Implement strict spending curbs now if you'll be seeking venture capital. Showing fiscal discipline will help you approach the negotiation in a better cash position and be respected by the investors as much for your financial leadership as your business product.

    All of these techniques are transferable to some degree to almost any business. What course corrections will you be taking?