Understand Your Market Or Fizzle Out

When it comes to starting a business, growth hacking your business or even just trying to launch something new in your business there is one piece of the equation that (in my opinion) does not get enough attention. Entrepreneurs and business owners are so fixated on getting the first iterations of their products, ideas, or services out of the door that they fail to assess the depth of the market they are serving.

An awesome idea with no market or a market that is on the verge of some kind of pivot makes for a bad business.

There are two things that are as good as fact when it comes to building a business:

1. Your customer’s tastes and expectations will constantly change.

2. There is no such thing as long term or sustainable competitive advantage.

It’s because of those two things that you really need to be able to identify your market/industry and to try your darndest to get a handle on what’s happening around you so that you can best position your business for success.

I know. You’re thinking that you don’t need a deep dive into understanding your market or industry because you know your customers and are solving a problem they have.

Great but...

• Do you have any idea what your competitors are doing?
• Do you know what your market is expected to do over the next few weeks, months or years?
• Do you know what the demand determinants are for your customers?
• Have you positioned your business such that it you’ve added to the barriers to entry that already exist?
• Are you adding value or different from similar industries, products or services that might already exist?
• Do you know what the most important external drivers are that motivate your customers to take action or engage with you?
• Are you measuring success in a way that will keep challenging your business growth?

One more and then I’m done.

• Do you know how your cost structure measures up to that of your market?

I could keep going but, I think you get my point. Understanding your customers and the world around you is imperative to keep your business moving in the right direction. It might feel like just a busy work exercise but it’s not! The better you know your business’ environment the more quickly you’ll be able to spot trends, you’ll be able to react quicker a your customer’s tastes and expectations change, and you’ll be able to ask good questions to get good feedback from your customers.

There’s no worse feeling than pouring your heart and soul into something only to have no one buy. I know because it’s happened to me once or twice in my early days. It happened because I skipped trying to understand my market and assumed that I knew what was best for my customers.

Besides answering the questions I listed above here are 3 things you can do right now to get a better idea of what’s happening in your market.

1. Go to the Bureau of Labor Statistics and look at trends in people’s discretionary spending.

Here’s a link that goes straight to the Consumer Expenditure page http://www.bls.gov/cex/ It might sound dry but after you figure out your demographic you can learn a lot about what is important to people by taking a look at their spending. Probably the most important thing is to see if people are already spending money on your solution - great way to look for validation. You can also tap http://www.census.gov to get more on drilling dow into the specifics of who your demographics are and how they behave. Yay “.gov”’s!

2. Break your target market into segments.

Think of segments as buckets that are full of different “people who...”. If your product/service is for small businesses then you should break them out into “small businesses who....have a physical location, have under 10 employees, need a business plan, etc.” That will help you as you are trying to quantify your market and your market’s behavior over time. Get specific and deliberate about who you are serving and it will help you make the most out of your time, money and emotional resilience in your business. Remember, tastes and expectations are always changing and they might change in different sizes, rates, or scopes.

3. Figure out what the experts are saying about the future of economic activity.

Yes, this step is about making your way through some economic data but I have a link that will make it manageable for you. This article from Kiplinger is a good place to start because it hits all the major economic indicators and offers links back to their sources so you can continue to dig around. Market and economic outlooks are important because they will give you some insight into the future of your customers needs, confidence, and spending. All very important information when you are trying to compete to get their discretionary dollar’s attention as economic conditions ebb and flow. Here’s the link back to the article: http://www.kiplinger.com/tool/business/T019-S000-kiplinger-s-economic-outlooks/

Most of the businesses I run into don’t give this type of thinking and planning enough attention because they believe they are too small to be affected by their “market”. Please don’t make the same mistakes. You are making decisions in your business everyday and the quality of those decisions are a direct impact of the information you use.

Stop winging it, stop wasting time, and start spending more time getting to know your customers/industry.

How Improve Your Project Management Skills

Whether you are starting a business, working in a start-up business or have been in business for a while I can guarantee, with almost complete certainty, that you have dipped your hands in the murky waters of project management.

I know this because when you break down all the moving pieces and guts of almost any business, what you’re left with is a string of projects. Some successful, some not so successful and every one of them a potential cornucopia of interesting data about your business.

It’s in the data and outcomes from your projects that you will be able to make the important decisions that guide your business through the ebbs and flows of your market. When you don’t manage projects well you run the risk of wasting lots of time, money and energy on things that will never add value to your business or your customers.

That makes for a bad time.

Managing projects can be tricky business. What’s important to measure? What’s not? How are you tracking progress? Who’s accountable for what? Etc. Another part of that trickiness is the fact that there is an industry full of project management support businesses trying to get your attention. These businesses attempt to lure you to spend money on software, training and consulting that promises to fix all of your business woes - and even helps you come to terms with business woes you didn’t even know you had.

What are you, a busy entrepreneur trying to grow a business, supposed to do?

I have a simple framework to help you keep your well intentioned projects on task and on budget.

Before that though I want to share a quick caveat: I don’t think that there is one perfect tool or solution for everyone. I do think that if you look hard enough you should be able to find the tool that best supports the sizes and scopes of your projects. I also believe that the tool you adopt should be creating efficiencies and using your project data to tell stories that you can use to make solid decisions in your business. But, if you needed to start somewhere I highly recommend the Disruptive Decision Framework - this hyperlink will take you to a blog post on this site where you can get your free copy and tells you how to use it. 

1. Is this project really important?

The first step is buy in. Is the proposed project on deck really going to move some needle in your business in any kind of meaningful way? That goes for the good and bad possible outcomes. Has everyone involved reached some kind of consensus on the project’s importance? What (in as quantitative and as measurable criteria as possible) does success look like? If you are a solopreneur talk to someone you trust about what you’re thinking about exploring. Talk to two people. The worst thing you can do as a solo entrepreneur is start down a closed-system project rabbit hole. I’ve seen good businesses and entrepreneurs burn out because they dumped too many resources into a project that wasn’t really important.

2. Outline the project.

In this step you are outlining and identifying all the important milestones you need to hit to get to some kind of outcome. You are also thinking about all the people and resources you’re going to need to support the project as well. Knowing that very few things in life follow any kind of strict schedule it’s important to build in some flex room as you are attempting to get a handle on what the time frames are going to look like as you approach and pass through each of those milestones. It’s also here that you’ll identify the formal scope of the project (what are you hoping to acheive), roles and responsibilities of the people involved at each phase (this counts for you too solopreneur), what information you are going to track and why.

3. Get it on the books.

There’s a good chance that this project is not going to be the only thing your business is working on at any given time. Armed with the knowledge that things don’t always go as planned do your best to schedule your projects in terms of the milestones that need to be completed. This is important because as time passes you’ll be able to balance the demands of your day to day operations with the scope and goals of your project. After it’s on the books go back and work out your outlines for a work plan. It’s great that you gave yourself 3 days to get from one milestone to the next but what are the crystal clear action steps needed to honor that timeline commitment. Vague timelines might be acceptable here but vague workplans are not. Spend time really getting into the nitty gritty of what needs to get done. Whether you have a team or not - getting specific and granular is your best bet at actually getting this work done.

4. Create guiding policies.

Before you start working on your project you need to set up the policies that will be used to manage the project. It’s not redundant I swear. These are the things that help you manage issues in your team, expectations, accountability, quality and so on. Picture the guiding policies for your project as the rules of Monopoly. You know, Monopoly - the game that breaks up families and friendships. That Monopoly. Your guiding policies act as an independent and impartial judge for the times when playing by house rules gets a little out of hand. As the work in your project ramps up managing people's, expectations, responsibilities and the rest of your business could get potentially dicey. Guiding policies act as a way to navigate challenges because you decided them before you started. They can also help to keep you honest if motivation starts to wane as a solopreneur. And, just like any good game of Monopoly you can literally decide to abort a project by flipping the game board over in a fit of power hungry plastic house rage should the need arise.

5. Work, Observe, Record, Evaluate, Repeat (Maybe)

This is where the project rubber meets the road. You are all planned and scheduled up now get to work. As you are making your way through your milestones make sure you stop to celebrate little victories or assess the little challenges along the way. Because you did such a great job with identifying all the quantitative, measurable and trackable data throughout the project you’ll be able to see in real time how the work you are doing impacts your business. You’ll also be able to make decisions about adapting or pivoting your business as the market changes around you. Probably one of the most important parts of this step is being able to recognize when you should just pull the plug on a project. There’s no shame in quitting here - you still learned something that will help better shape your business and by quitting you’ve salvaged any remaining time, money and sanity you may have lost by following through. Individual outcomes might be good or bad but if you’ve designed an experiment or project well you can only get good information from the experience.

6. Deliver and Evaluate

Congratulations! Regardless of the outcome you’ve finished. That means you are hopefully delivering what you said you were going to in a time that closely resembles what you originally quoted. During the process you laughed, cried and communicated lots. After you’ve celebrated your completion it’s time to tear through the data of the project. What parts of your work plan were successful? What weren’t? Where were the bottlenecks? What could you tweak? Was all this work really worth it? Giving your project a proper post-mortem will provide you with insight that will help you get the most out of your next projects. Don’t be afraid of failing or of fallen flat deliverables. You can always tweak your processes and frameworks. Be afraid of putting yourself through the trouble of launching a project with vague ideas, no accountability and no clear way to identify success.

Whatever system you choose to help you manage your next project should touch on these 6 steps. If they don’t then you are missing something. There are tons of resources at lots of different price points but the most important thing to remember is that any of the project management tools are only as good as the information you are feeding them and the commitment you give them. Sounds cliche I know but I can share first hand that I have worked with businesses that have dumped ridiculous amounts of money in project management software that they never used.

Being a tool hoarder is not going to help you do better work in you business.

Why Outcomes Matter In Your Business

There is too much focus on idea generation and idea management and not enough time given to trying things out and actually testing to see if an idea is worth iterating on. (Listen to Gary Vaynerchuk, he'll tell you that being an operator is everything!)  Every article and post I’ve seen lately seems to elude that the only way to find success through innovation is coming up with the next newest, brightest, sexiest, or most cost effective idea.

What?!

What happened to the iterative process?

The real iterative process. Not some watered down entrepreneur-light version that gets talked about in conversations between wantrepreneurs. 

What happened to going out and talking to your customers or potential market to figure out what they wanted? Then taking it a step further and seeing if they'd put their debit/credit card on the line for it. 

What happened to doing the work to test whether an idea had merit or could be adapted to succeed?

What happened to making real and action oriented decisions? 

In order to address those questions entrepreneurs have to first learn (re-learn) how to think about outcomes.

The funnest part about what I do is that I am always getting the opportunity to help entrepreneurs and even politicians understand that strategy is not just about a plan of action or a set of goals you might be working towards. It’s about creating systems to make good choices and to clearly evaluate possible outcomes for those choices. Thinking about as many possible OUTCOMES is such a big part of strategy!

I need you to think back to your high school or college economics classes. You may vaguely remember hearing about oligopolies as a particular kind of way a market might organize itself. It’s not a board game and I’m not going to give you a pop quiz about that particular market structure but what I do want you to try to remember are the concepts around Game Theory.

With me?

Even if you have no idea what I’m talking about I promise it will make sense in a second.

The neat thing about this simple “game” you played in your economics class or that you’ll see in the Game Theory Wikipedia entry is that all the possible outcomes were laid out in front of you. As either a player in that game or as an objective observer of the game, think Dungeon Master if you’re a D&D fan, you were able to always make the choices that were not only best for you but wouldn’t leave you making a decision that could get you into trouble. That’s dominating strategies vs. dominated strategies.

No one wants to be told that they are a bad decision maker but if you are constantly pushing yourself or your team to come up with new ideas you might be falling into bad idea territory. Before you make a commitment to allocate time and resources to idea generation you should evaluate the ideas or business choices that are already on the table. Are you measuring them effectively and can you make marginal changes to increase performance or get to however you are measuring success? Best of all you should be thinking about the outcomes of your ideas or choices.

You’re probably thinking at this point - ok that sounds good but what outcomes should I be looking for? The outcomes you are concerned with are the responses you could anticipate to your choices by your competitors and customers.

How might your customers respond to you offering a discounted version of your service?

Would they still perceive it as valuable?

What about your closest competitor? Would they try to undercut your new discounted pricing to try to stem market share?

Answers to those questions are outcomes. The better you get at trying to anticipate how people and businesses might react to the choices you make with your business the better prepared you will be and ultimately you put yourself in a position to be more profitable. You won’t have to waste time scrambling for the next idea or worry about losing customers because you will have responses and resources allocated/planned for the fallout (good and bad) of any choice that you make.

That’s strategy!

It came from iterating and evaluating not just rushing some new idea to market.

It's Time To Start Paying Attention To Cash Flow

Odds are you probably have seen a business plan at least once in your life. It could have been a well detailed spiral bound behemoth of a document or even scribblings on a napkin at the bar. (The scribblings are definitely my favorite!) The funny thing is about business ideas is that everyone has the capacity for great ones - I can think of at least three conversations in the last 24 hours that started, “You know what we should do next..”. The problem isn’t the visualization or the concept (OK, maybe that’s the problems sometimes.) it’s the detachment people have from the reality of the financials.

Also taking real action but, for the sake of this post, let’s stick to the gross underestimation of the need for and management of resources in a business. Being an entrepreneur can be an expensive endeavor and that goes for spending money or if you don’t have money spending time which by virtue of opportunity cost can also be measured with money.

Relatively speaking, money is not hard to come by these days. Credit is easier to get and there are amazing resources like Indiegogo, Kiva and Kickstarter to help get your project off the ground. Heck, you can even start a GoFundMe campaign if you want. The problem is that would-be entrepreneurs don’t understand how cash flow works and that it can get kind of expensive to take that napkin from the bar to a full blown business.

For the record, I really do understand that with very little liquidity, some time, and some great use of web resources you can launch a venture with a small budget.

But what next?

How do you plan to use the resources that are coming in the door to keep building your business?  <<Cough Cough>> Remember, making deliberate choices is the heart of strategy...<<Cough Cough>>

Here are a few tips to get you thinking about your cash flows even before you really have them.

1. Get real about your expenses.

When you are small and your funds are commingled it’s easy to rationalize a monthly fee, some office supplies, a subscription, and maybe even rent in a co-working space without classifying them as proper business expenses. You are never too small to take your business idea seriously. Start tracking from the outset and you will be able to make more realistic assessments of the business and be able to allocate future resources that much better.

2. In the same vein as tracking your expenses you should be staying in line with GAAP - Generally Accepted Accounting Principals.

You don’t have to be a CPA to crunch your own numbers but you should have an idea around how and where your figures are coming from. That makes your tax preparers job easier - especially if that’s you. It also makes it easier for you to compare what you are doing to your competitors. If you are just making up accounting metrics and accounting systems on the fly it will compromise the integrity of your financial information. Figure out how your industry tracks their numbers and try to emulate that. It might not always be a perfect fit but you’ll be able to tell how you are doing against your market.

3. Have a collections policy.

Sending out an invoice is great. Getting paid 180 days later is not so great. An economist could argue that people are profit maximizing little automatons and I would say that works for businesses too. Not just in maximizing what we traditionally think as profit but also conditions, environments, and choices that make sticking around easier. What all that means is that you are going to hear excuses as to why people can’t or don’t pay. You may not be able to avoid the headaches that come with being paid on time but with a well thought out and incentivised invoicing strategy. Think “2% net 30” kind of stuff. This will help keep your cash flows relatively predictable so that you can plan around them, in good times and bad.

These three tips are not your conventional cash flow kind of tips. I know. But they are important factors to consider for your business. You can have all the spreadsheets and calculations you like but if it’s not quality information, if you aren’t collecting anything, and if you aren’t realistic about what’s going out the door then you won’t be in business long.

How To Disrupt And Innovate Right Now

Today I want to channel my inner Seth Godin.

(Short posts that generate reflection and inspire action.)  

I want to challenge you to disrupt and or to innovate right now. Wherever you are, in whatever role you serve in your business and in whatever project you are working on as you’re reading this.  

Disruption is not a strategy. It’s is about simplification. Look at your business. Are there any parts of your customers experience that you can simplify or streamline? Is the value you offer simple by design so that your customers know exactly the pain you solve? Can anyone (I mean anyone) understand your pitch? Where can you attack a problem non-conventionally or even contrarily so that your business stands out against your competitors a little more?

Innovation is about efficiency. What can you do that will save your business time, money, emotional energy or even just keep your audience engaged. Innovation happens when you can generate ideas quickly, then test and experiment ideas and finally decide what’s important to your business. Where can you add value without adding costs?

Disruption and innovation don’t have to always happen on a large scale. It’s also not only for technology companies our of Silicon Valley. I challenge you to look at your systems and try to find small changes you can make today that will push you business forward, in whatever way you measure your progress.

Focus On Outcomes To Get More Out Of Ideas

There is too much focus on idea generation and idea management and not enough time given to trying things out and actually testing to see if an idea is worth iterating on. Every article and post I’ve seen lately seems to elude that the only way to find success through innovation is coming up with the next newest, brightest, sexiest, or most cost effective idea.

What?!

What happened to the iterative process?

What happened to going out and talking to your customers or potential market to figure out what they wanted?

What happened to doing the work to test whether an idea had merit or could be adapted to succeed?

In order to address those questions entrepreneurs have to first learn (re-learn) how to think about outcomes.

The funnest part about what I do is that I am always getting the opportunity to help entrepreneurs and even politicians understand that strategy is not just about a plan of action or a set of goals you might be working towards. It’s about creating systems to make good choices and to clearly evaluate possible outcomes for those choices. Thinking about as many possible OUTCOMES is such a big part of strategy!

I need you to think back to your high school or college economics classes. You may vaguely remember hearing about oligopolies as a particular kind of way a market might organize itself. It’s not a board game and I’m not going to give you a pop quiz about that particular market structure but what I do want you to try to remember are the concepts around Game Theory.

With me?

Even if you have no idea what I’m talking about I promise it will make sense in a second.

The neat thing about this simple “game” you played in your economics class or that you’ll see in the Game Theory Wikipedia entry is that all the possible outcomes were laid out in front of you. As either a player in that game or as an objective observer of the game, think Dungeon Master if you’re a D&D fan, you were able to always make the choices that were not only best for you but wouldn’t leave you making a decision that could get you into trouble. That’s dominating strategies vs. dominated strategies.

No one wants to be told that they are a bad decision maker but if you are constantly pushing yourself or your team to come up with new ideas you might be falling into bad idea territory. Before you make a commitment to allocate time and resources to idea generation you should evaluate the ideas or business choices that are already on the table. Are you measuring them effectively and can you make marginal changes to increase performance or get to however you are measuring success? Best of all you should be thinking about the outcomes of your ideas or choices.

You’re probably thinking at this point - ok that sounds good but what outcomes should I be looking for? The outcomes you are concerned with are the responses you could anticipate to your choices by your competitors and customers.

How might your customers respond to you offering a discounted version of your service?

Would they still perceive it as valuable?

What about your closest competitor? Would they try to undercut your new discounted pricing to try to stem market share?

Answers to those questions are outcomes. The better you get at trying to anticipate how people and businesses might react to the choices you make with your business the better prepared you will be and ultimately you put yourself in a position to be more profitable. You won’t have to waste time scrambling for the next idea or worry about losing customers because you will have responses and resources allocated/planned for the fallout (good and bad) of any choice that you make.

That’s strategy!

It came from iterating and evaluating not just rushing some new idea to market.

This Is How You Use Failure To Your Advantage

Right off the bat - strategy is important! It doesn’t matter if you are a carpenter working 50 hours a week on the job or running an online eBay business from your kitchen table. It’s strategy that will keep you making great and consistent choices that will move your business forward. It makes my heart sad when I hear business owners say they are too busy to come up with strategy or that having a strategy doesn’t fit for their kind of business.

Wrong!

As a business owner you make choices everyday and having a way to measure the success and appropriateness of those choices only helps to add value and to keep your pipeline full. It’s not always nice and neat though and sometimes you’ll fail, epically. Here’s what to think about when you find yourself in an epic business fail and how to pull yourself through it.

It all starts with developing strategy.

Developing strategy and then implementation can get messy. Trying to communicate goals to each level of the organization so that every player understands how their input directly affects how your business will reach its goals can get messy. Gathering and analyzing data can get messy. In all that messiness comes failure every once and awhile - contrary to the superhero in all of us, every set of strategic choices that come out of our brains are not home runs.

Messy and failure are not bad things though. In fact you can learn a whole lot about your business and your strategy through failure. Here are a few ways you can embrace your messy processes and occasional failures to keep your business running lean and adapting to your markets as tastes and expectations change around you.

Remember that this stuff applies even if you are a solopreneur or a hobby business.

1. Reframe your capabilities and learning curves.

Entering new markets and offering new services can give you access to a segment that might be untapped by your competition. Figuring out the scale or scope that you can serve that segment takes a failure or two before you get it right. Think about how quickly you can acclimate and focus in on how you are adding value to that market segment. It’s ok to venture out into new markets and figure out that it’s not a good fit. Realize where you can extend your capabilities and start from there.

2. Talk to your customers or non-customers.

If you tried something new and it didn’t work out go ask why! Yes, you still have to do this even if no one bought. You can have the best plans and projections in the world but you won’t know how to grow until you get feedback from your market. Maybe you misjudged your audience or made an assumption that wasn’t true. That’s ok, this gives you the opportunity to reach out and iterate. If you had customers that bought and weren’t happy this is a chance to serve them so hard that they become raving advocates. They get to raving because you are showing that audience that you can dig deep and deliver on what really pains them.

3. Failure makes you think about the process.

Maybe it’s not your strategy but how you implemented it. Failure is great because you have concrete data to work with. You made a choice and it either worked or it didn’t - now it’s time to find out why. All too often I see business throw away perfectly good strategies because they tried it for a little while and nothing happened. Really they should have been looking at the specific actions they were taking to reach those goals. If you burnt the last batch of chocolate chip cookies you baked would you swear off those delicious treats entirely after that one experience or would you look back and think about your steps. Maybe you realize that you had the oven set too high and fix that part of the process. You wouldn’t stop eating those cookies and you shouldn’t just stop thinking about improving your strategy.

I could keep going but I want to keep this post simple. Think about failure in three ways: where you failed, who you failed and why you failed. From there you can ask all kinds of great questions that don’t involve relegating strategy talk to the “would be nice” conversation topics. Strategy is important especially because entrepreneurs are some of the most prolific rationalizers that exist on the planet. It’s strategy that keeps your choices consistent, your resources allocated efficiently and your brand growing.

Now, I’m off to find some chocolate chip cookies. I mean work on my strategy. I mean, I need a glass of milk.

Build A More Compelling Value Proposition

What’s your business’ value proposition? Is it to be the “best” at something? Is it to serve your customers better than your competitors? Is it my favorite value proposition faux-pas, just an explanation of what you do that’s full of 3-Dollar business words like: maximum impact, advisory services, creating synergy, problem-solving, solution ideation, increasing efficiency and allocating resources efficiently?

Awful.

Value propositions are supposed to appeal to the people that you are trying to serve that reaches them at their core. If your value proposition is good enough it will make it through all the noise and advertisements that your customers are bombarded with daily and sit right at the top of the feel good parts of their brain. That’s what a good value proposition does.

A value proposition is not just your mission (missions are super important for strategy to work though). It’s not a catchy tag-line. Well I mean, bad value propositions are. Bad value propositions talk about capabilities, features, and generic accolades.

When you use jargon and fuzzy words to convey your values (or just what you do) you are making it hard for your customers to engage with you. You aren’t pushing the buttons hard enough to move your customers in either a rational or an irrational way. Borrowing some concepts from the economics courses I teach; when you don’t do a good job of aligning what you offer with the tastes and expectations of your customers, you are making yourself substitutable.

Ahhh price elasticity of demand, you are a heartless but fair judge.

Customers are always measuring the value of something against the dollars they have to trade for that something. A good value proposition lets your customers know that they are getting their money’s worth. The real question behind a great value proposition is - How do you communicate the real benefits of what you do and why someone should do business with you?

A good starting point to framing your value proposition is to make a choice. You are choosing to either operate at the lowest possible cost or sell something for more. Sounds simple and probably a little cliche but there are some caveats here that most people don’t think about.

Let’s start with selling for more. When you charge a higher price you are communicating to your customers that you are offering a higher quality product. Your solution is more expensive because it solves your problem better than your competitors. The value you are providing when you are selling for more has to be measurable and meaningful to people. These are two traps you need to avoid to successfully charge higher prices:

1. Meaningless Differentiation.

You are charging a higher price for a reason right?! You need to do your best to make sure it’s a reason that matters to your customers. Seriously, charging a higher price because of some input that your customers don’t really care about or that doesn’t really affect them is not a good way to differentiate. It has to be customer focused!

2. Unsustainable Differentiation.

You have to do your best keep what makes you special for as long as possible. If people are working with you because they like what you are doing, your goal is to grow those connections as wide and as deep as you can. If your competitors start to imitate what you do you’ll risk losing your customer base to lower prices. When they buy from you make sure YOU are part of that value.

On to low cost. Competing for low cost producer is not my favorite way to build a business but in some models it works great. The value you are communicating to your customers here is that they get to have everything they want and keep more money in their pockets. Easiest example to think about is Wal-Mart. To have a successful value proposition in this space the value you communicate has to be extremely specific. There are some traps here too to watch out for as well:

1. Maintaining your lowest cost status.

As a small business or an entrepreneur there’s a lot of pressure to innovate. The problem is that lowest cost producer is a title that’s really hard to keep. Don’t fall into the trap of offering low prices with hopes of that you’ll steal market share away from your competitors and keep them. When you raise your prices, customers who are seeking for low cost will move on to the next lowest price points.

2. Substitutes.

When you enter the low cost/low price game you’re dealing with customers that are looking for the most bang for their buck. Think personal finance tracking apps for smartphones and tablets. There is a lot of competition and a lot of very close substitutes. It can be really challenging to communicate with customers about the value of what you offer when you are trying to scream over everyone else in your marketplace.

As you can see there’s no guarantee of success when it comes to choosing selling at higher prices or trying to compete as a low cost producer. Success comes from the heart of your value proposition. Your value proposition has to resonate with people so that they feel like buying from you matters, be different enough to stand out among your competitors and provide measurable substance.

When you are building your copy talk to people like people. 

Don't Get Stuck In Strategy Sensory Overload

Henry Mintzberg is a man after my own heart. Too bad you, dear business builder, have probably never heard of him...yet. Emergent strategy is going to be the approach that makes sense for the agile, lean and <insert another word for business flexible> models.

You’re welcome.

Writing about strategy has been awesome for me. It’s forced me to really funnel through all the academic and corporate strategy hype so that I can bring you the most distilled and actionable pieces of strategy goodness. Recently I stumbled upon what is my new favorite definition of what strategy is - “the integrated set of choices that positions the business in its industry to generate superior financial returns over the long run”.

Integrated set of choices. It’s brilliant!

In this definition you don’t see the words: plan, technology, social media, or marketing. What we are talking about is getting to the heart of how you will decide to run your business. This post is dedicated to anyone wanting to up their strategy game and are paralyzed with conceptual strategy sensory overload. Here is your 3 part strategy jumpstart.

In thinking about your integrated set of choices you should be framing them (at least at the start) into one of two camps.  Are you going to differentiate or attempt to be the low cost provider?

I am drastically oversimplifying but if you are wondering what your first steps should be when trying to build a new strategy I would recommend the following 3 steps.

1. Work out your business model.

Business models can change over time and when most people think they are talking about strategic planning, they are really talking about outlining their business model. The what’s and how’s of their business. Flushing out your business model will give you a better idea of what the entire process might look like for the customer or client experience. This is how you will make money. Once you settle on something don’t worry about tinkering with trying to get a few extra fractions of percentage points in profit out of it. Odds are it will probably be changing over time. Leave it alone, start doing the work you outlined and start collecting outcomes.

2. Pick! It’s really hard to be the low cost innovator in any industry or business.

How you get to the golden “disruption” is by experimenting and iterating with your customers. I’m not saying it’s impossible to fly out of the gate and be the instant lowest cost and most needed differentiation in the market - I’m just saying you might get a better return on your immediate investments by picking one and working at it for a little while. I’ve seen many guru’s and self-titled experts misguide clients with hopes of finding the holy grail of competitive advantages that will place them leaps ahead of their competition. That’s not how it works. You need to pick first and then start doing the work to best serve who you think your best customers are right now while doing the best you can to understand the drivers and motivations of your market - especially your competitors because they are going to be the ones reacting to you!

3. Work on systematically making choices that support your pick from number

Any time a decision has to be made you need to be able to objectively qualify it as either supporting your overall strategy or not. If it doesn’t, is there a way to tweak it so that some part of it still might. This is where the fun stuff happens. It’s all in the rationalization. What I mean by systematically making choices is to constantly be evaluating how your are conducting business.

Here’s an example: As part of a service offering you provide paper copies of all your materials. You could go to Staples and keep buying paper because it’s closer, convenient, and instant. Because of that convenience you are probably not getting that paper as cheaply as you might be able to if you worked on creating a relationship with a wholesale or office supply dealer. Now, if you are competing for low cost you might want that mass distribution discount rate but if you are differentiating and Staples offers a very specific, specialized paper then you will have to translate some of that cost over to the end consumer.

This is the decision part. Are you the low cost provider or are you trying to differentiate?

Situations like this happen every day and it’s important to make choices consistently - yes even the smallest ones. This is how real strategies gain momentum, by adjusting behavior and monitoring outcomes. Yes there are bigger frameworks like Porter, Blue Ocean, and Resource Based View that you could be considering. You absolutely should but, don’t get bogged down in the learning and understanding that you never put those frameworks into practice.

Take the first steps and make a few choices now and hold yourself to them. Then iterate as you go!

There Is No Such Thing As Sustainble Competitive Advantage

There’s no such thing as sustainable competitive advantage. If anyone tries to sell you that as part of their “consulting package”, you can tell them to knock it off. Differentiation tends to lose its edge over time. 

Competitive advantage by its very definition is a fleeting notion - it’s something you are always going to have to work towards.

The reason?

It’s because people’s tastes, expectations, values change over time. In your business you have to constantly be working towards satisfying the needs of your clients and customers to be successful. No secret there. At the same time though you have to be thinking about ways to continue to create that awesome value while keeping your own overhead and expenses as lean as possible. Again, no soul shattering revelations.

Growing a successful business means you are taking specific actions to deliver specific value. Figuring out or planning for your competitive advantage will in no way, shape, or form guarantee your business’ success.

This post isn’t about finding competitive advantage. It’s about figuring out how to create consistent value for your customers and clients once you recognize it. It’s about creating a repeatable business model.

The quickest way to get your business to grow is to create repeatable systems that will deliver the most value you can and make sure you can do it over and over again.

You’re looking for your “Big Mac”. Seriously. Anywhere in the US you can walk into a McDonald’s, order a “Big Mac” and have your expectations on that product/experience be met. Why? Because McDonald’s makes it the exact same way every time.

You want that! Innovation and disruption are great and absolutely have a place in your business. (It’s even in my business’ name.) But in order to grow your business and to give yourself the room you need to actually test out ideas, products or services you need to record lots and lots of tries. How can you know which changes helped to grow your business when you changed lots of stuff at the same time. Better still, you are changing something on a weekly basis.

I love the Lean Startup model but there is a piece of it I don’t really agree with. The potential customer interviews. Asking people what they want and discovering what they really want are two very different things. You won’t know what people do or don’t want until you ask them to put their debit/credit card information on the line. Here’s how you can work on creating a repeatable business model.

The best advice I can give, in terms of a repeatable business model, is the same advice I give to my clients looking to iterate, pivot or adapt their business. It’s actually a set of questions I want you to give some honest thought to:

1. Do you have a system that tracks the entire customer cycle?

2. Are you using that system every single time you in front of a customer?

3. How big is your market and how many times have you used that system?

4. Are you solving a relevant and specific problem? (Benefits (NOT features) > Costs)

5. Is your value being clearly communicated?

6. Are you changing one thing at a time?

7. How are you measuring success at each stage of your system?

8. Are you following up and asking “why” with your customers after they buy and even when they don’t?

If you don’t have clearly defined and measured answers to any of these questions don’t innovate, disrupt, adapt, or pivot.

You need more data!

Figure out what a fair amount of tries are and work from there. Changing your website every day because your products didn’t sell that day is probably not a fair amount of time to test your copy. Before you go changing everything start trying to isolate possible weak spots in your system and change one major variable at a time. This is how you test your market to see if what you’ve changed resonates better and creates more engagement.

Don’t rush to innovate or pivot. It’s time, money, and emotional energy that you can’t get back and that you probably won’t take the time to measure. Instead focus on the boring - the system. With enough tries you’ll start to see patterns in your business. Patterns with variables you can start to manipulate with intention. That’s the secret to getting the best return on your business.

It also helps to keep you from going crazy. Which, I guess is a good thing too.

How do you handle the impulse to constantly innovate, adapt, pivot, or disrupt? Is there a method to your madness? I’d love to see your system in the comments below.

How To Get The Most Out Of Your Next SWOT Analysis

I am throwing the gauntlet down on SWOTs. I'm tired of people telling me their organization/team/business did one and it wasn't useful. I'm so amped up about this topic that I'm not even including a call to action in this blog. Well besides me trying to show you how to do a SWOT better and how to make it be actually useful for your business decisions and strategy. 

No shame in my game. This image came straight from the Wikipedia entry on SWOT. The content that follows most certainly did not. 

There are lots of tools to help you through your strategic thinking and planning process. So many it’s hard to choose sometimes - really hard. This post is dedicated to using one of those tools well, the SWOT Analysis.

I know.

I can feel it.

I’m already losing you and this is only sentence six.

Hear me out though. You need to ask yourself, have you ever really SWOT? (For my internet friends, "Do you even SWOT bro?") If you do it well a SWOT has the power to bring people together, save your company time and help you get the most bang out of whatever your budget looks like - including a low/no budget operation.

A strategic tool is only as good as the information and the intention that goes into it. A lot of business owners stick their noses up at the idea of going through the process of a SWOT. They think that a SWOT is too rudimentary or not powerful enough to handle the complexities of their business. I blame MBA's (who I have much love for and have been a professor to) and business gurus too for ruining this tool. 

I vehemently disagree that the SWOT analysis is too simplistic. I think it's perfectly simplistic and more often than not, business owners make things too complicated for their own good. 

That's not you of course. 

I think the SWOT is a great tool for organizing ideas, identifying your business model (you’d be surprised to see how many business think they are in one kind of business but in reality are in a totally different industry) flushing out themes and core competencies, and even helping to identify your competitive advantage.

The goal of the SWOT is to get information out in the open so that you can make decisions. The SWOT will not make decisions for you. This is so important you have to read it again. The SWOT will not make decisions for you. It’s not a decision making tool (that link takes you to a really great and free decision making tool) and I’m not thrilled about some people using it as an “icebreaker” for strategy talks. Let’s give Albert Humphrey and his SWOT the respect they deserve!

SWOT stands for Strengths, Weaknesses, Opportunities and Threats. The S and W should be internal questions - the things that are happening in your business. The O and T should be external questions - what’s happening around your business. You’ll see a SWOT in lots of shapes and formats but that’s just working space. Your SWOT can be a list or a matrix. What matters is the intention and content.

Let’s start with Strengths.

When you are thinking about your strengths it’s important to think about why your customers buy from you. If you can get to your customer’s why you’ll be able to communicate with them more effectively and consistently deliver awesome value. Here are some other questions you should be thinking about in terms of your strengths.

What’s your unique value or unique selling proposition.

Are you doing anything that your competitors can’t reproduce - like your level of customer service.

Are you a low-cost producer?

How do you differentiate?

Are you creating barriers to entry to insulate yourself from future competition in any unique way?

Do your customers say that you do anything really well?

Next are your Weaknesses.

Don’t approach this like you would if you were answering an interview question for a potential dream job. No fluff here! You need think about how you’re delivering value to your customers or clients. There are always parts of the business that can get more efficient or capabilities/capacities you can improve. In terms of creating a meaningful strategy the more honest and raw you can be about your business, processes and systems the better the decisions you will produce. Here are some questions you should answer honestly in terms of your business's Weaknesses:

Are there improvements that can be made to better compete with your strongest competitor?

Are there products/markets/services you should be avoiding?

Are you measuring success in any kind of definitive way? If you do, are there factors in your businesses that aren’t measuring up?

Are there parts of your business that lead to lost sales/revenue?

Is there waste and where is it coming from?

Are there core capabilities you should have that are keeping you from being more successful?

On to Opportunities.

Opportunities are new chances for your business to either continue to differentiate or to reinforce your competitive advantage. The goal being an increase in revenue or market share if an Opportunity is pursued. A great place to start looking for Opportunities is to glance back up at your Strengths and Weaknesses and start comparing what’s going on in your business to the businesses you compete with. Here are some questions to get you thinking about your Opportunities:

Are there new or interesting trends in your market?

Are your customers tastes or expectations changing?

Are there new technologies in your market?

Are your customers getting the most value out of the current set of solutions offered?

Are there new pains that customers are suffering from?

Sorry to use a word while it’s being defined but: Are there any opportunities to better serve your market that can be done only by you?

Last are the Threats.

Threats are external factors that could influence your business that you can’t control. They are negative factors that could impact your business alone and even your potential industry. Threats are factors that could have a negative impact on your business in terms of both decreasing revenue and operations interruption. Here are some questions to get you thinking about your potential Threats:

What external factors put your business at risk?

What obstacles does your business face?

How stable and predictable is your supply chain?

Are you protected from changes in technology?

Is your market changing? How?

How have your competitors reacted to decisions your business has made?

What does your current and potential competitive landscape look like?

After you’ve answered these questions and maybe even a few that weren’t listed you are probably asking yourself, now what? Well first thing is to go back through your SWOT and to try to frame everything you listed in terms of your competitors. Next is to try to make each component as specific and as clear as possible. Remember you are trying to use this information to create strategy and make decisions. Being clear and specific is important! Then make sure that everything here is as close to factual as possible and that it’s a reality now not a want or wish. Use dollar amounts, inventories, sales, time, and any other way you are quantifying your business activity. Lastly is to make sure that everything in your SWOT is as action oriented as possible - action words are your friends here.

After you’ve brainstormed your SWOT and have gone back through and polished it up you can start to use what this information. This is the information you should be using when you are starting to create short-term and long-term strategic plans/actions to grow your business. The purpose of the SWOT was to get you laser focused on the most critical parts of your business.

Now that you’re focused you can make better decisions in your business. Start by going through and trying to prioritize your most pressing opportunities. Decide which opportunities you are going to engage and set the goals and actions in place to start the allocation of resources and work to achieve those goals. Measure everything! Go back through your strengths and try to rate them. This will give you an idea of how to better differentiate and position your business to strengthen your unique selling/value proposition. Take a look at your weaknesses and really try to create systems to improve them. You’re supposed to use this SWOT as a springboard.

The worst thing you can do is nothing after you complete the SWOT! 

So the next time this comes up in your business or in your profession, I want you to calmly pull up this blog post and drop the SWOT gauntlet down in your group. You'll be a strategy hero. 

Why You Should Care About The Market And Strategic Aspirations

The market decides what it wants. It decides how good you are and at what price consumers/clients/buyers are willing to pay for you. That means you need to get really clear and articulate about the value you’re bringing to the market. Big fluffy mission statements that try to reach everyone are just an exercise for boards and executive teams that makes them feel good about themselves that day.

No joke, a mission statement doesn’t cut it any more. Having your vision statement or your core beliefs taped up in a common space or over your computer monitor will only marginally motivate you and your stakeholders. In order to get the commitment and the engagement from yourself and your customers or audience, you need to be able to deliver value and communicate that value in a universally understood language. In other words you have to let your value show everyone in the market that you are worth paying attention to. Once you get clear about that it’s at the crossroads of value and meaningful communication where you will find strategic aspirations.

There has been a lot of buzz around the word “aspiration” lately. I hear it in the business audiobooks I listen too, the blogs I read and all over the Harvard Business Review site. Large businesses use aspirations to paint a picture of what the world will look like in the future when every consumer utilizes their product or service. If you’re struggling for an example to visualize, I will happily oblige by offering you the imagery of the “Buy ‘n’ Large” mega-corporation from Disney’s Wall-E. Talk about the future of consumerism... But what does it mean to the independent entrepreneur who is out there everyday hustling to find success?

You aren’t “Buy ‘n’ Large” and this isn’t a Disney Movie.

Your strategic aspiration is your conceptualized view of what success looks like. It’s the scenario you play in your head of what your business looks like when it’s firing on all cylinders. That means you delivering your most valuable work to the people or businesses that need it most. That also means that you have to work everyday at clarifying what your aspirations are - especially because they can change and that’s ok!

Strategic aspirations are not daydreaming and well wishing. They are not empty intentions. Your aspirations are the foundations of the strategic choices you make going forward and will guide your allocation of resources. As an entrepreneur you are constantly making choices and are constantly battling resource constraints. Often your aspirations will help you make the best possible choices by default (with a little practice that is). Getting crystal clear in your aspirations will help you evaluate your choice outcomes and navigate them in a way that produces outcomes that will move you closer to realizing your aspirations.

The neat thing about strategic aspirations is that you don’t need a gimmick to remember them. Because you put in the work to figure out what success looks like, feels like, and even smells like your aspirations should be resonating with you to your core.

As an entrepreneur or a professional with entrepreneurial tendencies, life is a constant balancing act. Aspirations provide the framework for how your business will behave and a systematic way of checking in with yourself. At this point if you like your taped document or stick notes above your computer you can put them back up. Only if you are really clear about what success looks like. When you do the work and get to the core of clearly identifying success for your business you can start to deconstruct it into steps you can take daily to get there.

After I get clear on my aspirations what happens?

I have a very simplified set of tips or tactics that you can implement right now. Not overly complicated and not overly difficult.

Decide What Matters: Figure out how you are going to measure success. Here, the fewer the metrics the better.
Everyday Action: Figure out what you have to do daily to get you to your aspirations.

Week/Monthly Action: Work in time to evaluate how your weeks/months are going based on what you’ve done and what you decided matters.

Quarterly/Annually Action: These are the things that have to happen for your business to grow as you want it. Your individual daily actions might not necessarily provide the direct outcomes needed to get here but they should be building to these goals or plan.

That’s it. The hardest part is not the planning, especially because that can change. The hardest part is deciding what’s important and then doing the WORK! So figure out what you can do daily to help push your aspirations forward and take some kind of action today!

How To Create Better Strategy By Going Simple

Being “disruptive” at it’s core is about simplification. Getting to outcomes or results more simply by better using the resources you have around you, by creating more efficient processes or a little bit of both. Disruption is all the rage these days in startups all over the world. There are books dedicated to teaching you to innovate in disruptive ways and conferences that pull entrepreneurs and programmers together to celebrate and showcase how markets are disruptively evolving. There are companies pitching for investor dollars everyday because they’ve thought up tricky ways to deliver value to customers in markets that have been stagnant for decades - think Uber.

You’re not Uber though (yet). So why should you care about disruption?

Thinking in terms of disruption is very good for running your business. The best part of thinking disruptively is that it doesn’t cost much and you don’t need a fancy set of tools to implement it well. In this blog post I outline three tips to help you get to simple so you can get more out of your strategy and your business.

Think simple for your next attempt at a strategy you want to try out. Running a business successfully means managing a lot of moving parts, there is no getting around that. Lots of running parts often leads people to think that there’s too much complexity to try to navigate around. I’m encouraging you to think about the parts of your business that you can simplify by a step or two. What are the processes you wake up and start in on everyday? At any time any one process might be a positive thing but look at what those singularly good processes are doing on the entire company. Are they slowing things down? Making it hard for information to flow or for decisions to get made? Besides trying to simplify how you do business, which could conceivably reduce your resource burn, how you position your brand and what you stand for also doesn’t have to be complicated. Think simplicity and act like 37Signals.

If you aren’t familiar with 37Signals (now officially just Basecamp) they are a firm that not only puts out amazing software but has published a few really rockstar entrepreneurship books. (One that I re-visit daily is ReWork.) What makes them simple lies in their product offerings: Basecamp, Highrise, and Campfire. Each of these SaaS product offerings are very specific and very simple in their functionality.  I want to highlight Basecamp in particular. It’s SaaS business that is built around one thing project management. If you go to their website today you’ll see that they are pivoting their model yet again. They are going all in on Basecamp. They are taking their already simple model and drilling down to get really good at one thing. Project Management.

37Signals is an awesome example of how a business can cause innovative disruption, continue to differentiate themselves, and succeed. ( I swear this isn't a plug, just really like their model.) This is also not the only thing I want you to take away from this post - I want you to walk away with some tips on simplifying your strategy and finding success.

1. Start with the why.

This one is a little introspective but seriously, why are you in business. The more honest you can be about what your business does, the better. Stop trying to do everything. I did that once and I burned myself and a few relationships out. No bueno. When you can craft a story behind the motivation of why you are in business it not only helps your stakeholder’s relate to what you’re doing but it helps to make decision making in the future just a little easier because you have a story compass to follow.

2. Boil down to what matters most in your business.

What are the most critical functions within your business. What needs to happen every time so that a customer is delivered an amazing experience. Focus on flushing those out and simplifying them as much as possible. There is so much bloat in even small companies these days because firms are trying to hard to be the all providing problem solving experience for the customer. That suffocates your “why” and your mission and makes it harder for your key processes to work efficiently.

3. Fight wanting to do more.

I don’t mean get lazy what I do mean is flex your “no” muscle. As the economy continues to recover and expand it will be tempting to want to reach out to new markets or offer up complimentary products or services. It will sound great and you might even produce data that would support chasing customers in a new segment but you should fight that urge. Instead focus on being the best you can be at a few core competencies, offer more value, innovate, and reduce costs. Work on serving your clients and customers the best way that you can. This will keep you from feeling overworked, spread too thin, and help to keep you from wasting resources. If Google can and did unload Motorola to Lenovo that has to create some kind of social proof right?!

Simplify doesn’t mean easy and it doesn’t mean lazy. It means serving very specifically and very intensely to a focused market. When you do that you create opportunities to differentiate in a way that makes it very hard for rivals or competitors to match because you cultivate a depth of understanding and relationships that someone just strolling into your market won’t find. There are a lot of programs that do way more than Basecamp and I’ve tried them - only to hate them and make my way back to a software that is easy to use, has awesome customer services, and always does what I expect it to do. Make your business do that in your industry and you will have no problem being as successful as someone like 37Signals.

What Powerlifting Can Teach You About Your Business

This was my first meet and my deadlift opener. 

“Everybody wants to be a bodybuilder, but nobody wants to lift no heavy-ass weights.”

- Ronnie Coleman

That is one of my all time favorite sayings. Except, in my case substitute “bodybuilding” for “powerlifting”. The message still stands though - you can’t do either unless you commit to moving some “heavy-ass weights”.

I love this adage because it applies to business development and business strategy as well. And, it does it on a few levels. Let’s break four of them down.

1. Like any exercise regime (powerlifting included), building good strategy takes an investment of patience and dedication before you start to notice the results. In most cases, strategy is not something you decide on today and see the outcomes, benefits or data tomorrow. It takes time. Time for information and processes to disseminate through your organization and to take hold. When you’re building strength and strategy you have to put the time into actually doing the work to get to some kind of outcome. Not just thinking about/planning for all your future success. You can’t get your body or your business stronger if you aren’t putting in the work.

2. Realistic goals are important. When you’re powerlifting your body and gravity are absolutely brutal judges. When you’re setting goals around how much weight you’re going to move you have to do so within some (albeit temporary) constraints. Where am I today and realistically how much can I expect to improve before my next competition or meet? Works for business strategy too!

For the most part, as an entrepreneur you aren’t going to just wake up one day and decide that being a seven-figure business is attainable in the next 6 weeks. Especially, if you’re looking at your financials and you’re only a three-figure business today with no real growth opportunities jumping out at you. I’m not saying it’s impossible or never going to happen but in the short term it is probabilistically unlikely. So, get pragmatic. What are your current business constraints? How can you start to move the needle today to build some winning momentum that will eventually carry you towards being the World's Strongest Business.

3. Use the feedback you’re getting from your body and your business in real time. When I’m training my body it is constantly giving me real time feedback about what I’m doing. Tight shoulders? Put the weight down and stretch. Too heavy? Have someone help me get the weight off my chest and take it down a pound or two. Your business (any business) is often doing the same thing. Every decision you make in your business will provide you with feedback. It’s up to you to figure out what that feedback is telling you and make adjustments so that your next actions support the goals you set for yourself. The worst thing you can do while you’re training your body and running your business is ignore the feedback. It will eventually lead to some kind of breakdown or negative outcome that will cost you time, money and energy to come back from - if you can come back from it at all.

4. What you feed your body and your business matters. Talking about diets and business strategy is not a stretch I promise - just stay with me. It’s no secret that when you feed your body good things, like healthy food and appropriate sleep, you are setting the stage to get the best possible performance out of your body. The same goes for your business. When you are thinking about business strategy we swap out food for inputs. Inputs like time, money, workflow, sales prospects/opportunities, etc. These are examples of the things your business needs to perform optimally. It doesn’t matter how good your strategy is, if you aren’t feeding your business appropriately you won’t be able to get the most out of it. There is also a resource management function piece to this. It’s about equipping yourself, and your teams, as best you can so that they can have the opportunity to do the best work and deliver as much value as possible.

There has to be a balance of inputs. Just like in your body, there’s only so much protein your body can absorb in any one sitting. Eventually, the marginal benefit from eating one more ounce of chicken goes to zero. In your business keeping tabs on the marginal benefits of the inputs you’re providing it is just as important - you don’t want to waste any of the already scarce resources your investing if you can help it.

I have to cap this at four points because I think I can literally keep making this analogy for another 1500 words. Hopefully you’re seeing a pattern here. That pattern is that running your business or building good strategy isn’t all that different from taking care of your body. If you take the time to think about how you are measuring your physical health you can translate that into how to better take care of your business’ health. You don’t even need an MBA for that!

It boils down to a little bit of discipline, an eye for identifying what’s important and the commitment to follow through. Too many people and their businesses go the way of fad (crash) diets. The try really hard for a little while, see some results and then get lazy. What happens? They yo-yo back to unhealthy and look for the next secret to get them the quick results they think they need. Don’t be that person! If you are committing to healthier lifestyle, commit your business’ strategy and success in the same way.

Making better business decisions takes practice and discipline. If you need some help I have a free resource for you. It’s the Disruptive Decision Framework. Think of it as the workout plan for the decisions you have to make in your business. It will help keep you accountable and it’s free!  

How To Delegate (Better)

Delegation is scary. (Whisper Voice: It doesn’t have to be!) In my experience the entrepreneurs that I’ve worked with struggle with delegating work because it means having to let go. It means knowingly and willingly trusting that someone else can get the job done - exactly as you would. It’s also scary because it means that you can’t hide behind a wall of to-do’s that may or may not be the thing holding your business’ performance back. Crazy to think that you might be the biggest obstacle to your success isn’t it?!

For the record, it’s really hard to grow your business when you are focusing on growth and everything else in your business at the same time. This goes double for you if you are a self (or otherwise) proclaimed perfectionist. That means that getting good at delegating is critical if you plan on hitting the goals you set for yourself and your business.

The great thing is that delegation isn’t just for businesses that have lots of employees. It’s also not just a neat management trick for working in teams or getting your non-profit boards to get any real work done. Being able to prioritize and delegate is just as important to the solopreneur working from her kitchen table as it is to the CEO who’s charging her board with the goals for the next quarter. Before I can teach you how to be a better delegator I need to outline what kind of tasks/actions/responsibilities are best suited to be delegated.

Here’s the definitive list of things that can be delegated:

1. Everything that’s not a strength, that you’re not great at and/or that takes away from you driving your business forward.

End of list. Big list I know.

When you are trying to grow a business there are tons of things you need to be doing everyday. Some of that stuff is going to be fun and engaging and some of it is going to be repetitive and brain-numbing. The trick is finding a way to get everything done enough to keep you from burning out. Those things that you're responsible for only compound when you start adding variables like employees, contractors or even trying out new social media channels. Being able to delegate effectively will give you more time to focus on doing the important business growth stuff that you are best suited to do.

Here’s how to delegate. (This can even work if you are only delegating to a future you.)

1. Get specific. Get specific about desired outcomes, processes and resources you’d like to see utilized. This is not micro management! This is managing expectations. When you provide clear constraints and expectations you’re giving people permission to do their best work in a way that’s authentic to them - instead of guessing about what they think the outcomes are supposed to look like.

2. Get accountable. Accountability is a two way street when you are delegating. First, you should clearly identify the time frames and outcomes you’re expecting. Then you should make sure that you are also being held accountable with any resources, feedback or time that will help push the delegated tasks forward. There’s nothing worse than a breakdown in communication and accountability that leaves everyone involved a little frustrated and a little resentful towards you and the process.

3. Give authority. When you delegate something it’s important to make sure that who you delegate the task to has the authority to get it done. How can you expect someone’s best work when they feel like they have to be constantly checking in or asking for permission to make decisions or take creative liberties. Set up the constraints and give the appropriate authority to get the most out of your delegate-eys.

Those three things are the most important components to delegation. I’ve seen lots of entrepreneurs and business owners struggle with managing their employees and contractors because expectations weren’t managed, directions weren’t followed and projects weren’t completed. Spend a little time in the beginning, assume that no one knows what’s going on in your head but you, and in really good detail set the guidelines for what you’re delegating. You’ll be surprised with what comes back.

Happy delegating!

3 Tips To Creating Strategy That Works

There is such a thing as too much strategy. Way too much. 

There is so much advice on the web about creating strategy. Lots of frameworks, lots of fill-in-the-blank plans and LOTS of generic advice that you write down but never really know how to implement.

I hate it.

So in this post I’m not going to give you a dashboard to work through or some one-page cheat sheet. That’s not to say that I’ll never do that or that it’s not helpful to have guides but today is all about getting to real progress quickly. This post is going to teach you the three most important things to think about when you are crafting your business strategy or you are trying to make decisions about what you’re going to do to get your business growing.

1. Focus on an identity. You need to get crystal clear on who you are, who you serve and why it’s important. When you focus on your identity it takes the pressure off of just focusing on generic growth targets and ideas.

Here’s real life, when you focus on generic growth you are inclined to do all the growth oriented things everyone else is doing. Which eventually just turns into stuff that looks like work. That means you’re thinking about making things more cheaply, trying to chase more of your market or even thinking about your next product/service offering based on the ebbs and flows of your competitors actions and consumers changing tastes. All that stuff takes time, energy and money that could be better spent by better honing in on who you are, why you are valuable and doing the work that only your business can.

When you focus on your identity all kinds of fun things fall into place. First, you better align yourself and your actions with your value proposition. This is a big deal because it re-enforces everything from how you make decisions in your business to how you deliver value to everyone outside of your business. Next everyone that interacts with you, buys from you or is in your audience better understands what you’re great at and why that sets you apart - in business-speak it’s your clear system of capabilities.

Lastly, focusing on your identity allows your audience or customers the chance to really fall in love with who you and your business are. It better allows you to create and foster an authentic relationship with them. You need that trust because it’s in that relationship and your differentiation that will keep people around and hungry for the work that only you and your business can do.

2. Strategy needs to be everyday. Strategic plans can sometimes be these big silly, overly complicated documents that you write and then instantly deviate from because it’s focusing on what you think you’re idea of your business is versus what you’re actually doing every day. Setting goals, figuring out what’s important to measure and having benchmarks are all great things - just make sure they reflect the work you are actually doing. When you’re building a strategy for everyday you don’t want to focus all of your energy on the big pie-in-the-sky stuff, you want to focus on what little things. Get really clear and focus on a small number of things that you do well and work on getting even better at them. (These are those pesky capabilities again.) Those activities is the heart of the work that you’re doing that ultimately reflects your values and reinforces your value proposition. You want to outline in detail the stuff you’re great at so that your employees or even virtual assistants can without any question replicate the experience you’re working to create for your customers.

If you’re not growing or don’t have any virtual assistants that’s ok too. You still want to do this stuff because it will help keep you focused and accountable to the work that matters as you’re growing your business. It’s definitely not a secret that there can be lots of distractions at any given moment in your business. As your business grows or iterates there will be lots of small changes so you want to make sure that you are keeping an eye on the stuff you’re trying so that you can pinpoint the stuff that works and continue to develop that.

3. Cutting costs helps you grow stronger. I know, sounds a little cliche but hear me out. Businesses that do the best jobs at closing the gap between what they planned to do and what they are really doing are businesses that have a near superhuman stranglehold on their expenses. I’m not going to tell you that you’re never going to spend money as you’re trying to grow your business.

That’s just downright misleading.

What I am trying to tell you is that the businesses that do the best are making sure that every dollar they spend is being spent to support what they are great at and as little as possible on everything else. When you’re looking at your business you need to be thinking of every expense as an investment, not just numbers in a checking account or in a report that Freshbooks (or Quickbooks) generates every month. You need to think in terms of opportunity costs and be constantly measuring what you’re spending money on and how that’s going to add value to your business.

Coffee meetings and business cards shouldn’t be necessary evils that are just rationalized expenses. You want to make sure, guarding money just like you should be guarding your time, that if you are allocating a resource or handing out a business card that it’s going to a person to which you can provide a ton of value.

That’s it! Those three things will help you create a strategy that actually works for you. Why?

1. When you don’t commit to an identity, your identity, you run the risk of washing yourself and your business out. You’ll scatter who you are and what you do so thinly that your audience won’t have anything compelling enough to hold on to and eventually engage with.

2. When you don’t make your strategy an everyday thing you run the risk of doing the same stuff that you’ve been doing all along. How can you affect change if you can’t distill what you want out of your business in a way that you can take action and implement daily? Answer: You can’t!  You don’t want to be the business that promises lots of things and struggles to deliver or worse never actually grows into the vision you had for it when you started.

3. When you don’t keep an eye on your spending, more specifically spending on the stuff that really matters you run the risk of self-stunting your growth. Money is easy to lose sight of because it’s easy to fall into the “I’m a habitual consumer trap” or the “if I had this one extra resource I’d be successful trap”. Be mindful and cut costs to grow stronger.

Building your strategy for your business is going to be a process. There’s going to be happy tears, sad tears and lots of anxious tears. That’s ok! When you’re following the advice of your favorite growth hacking guru or in my case I like to follow lots of different economists I want you to just remember these three things along the way. They will help ground you and help you build something that works with and for you.

Find More Money Inside Your Business

Do you really need that wireless credit card payment processing subscription? 

Lately, every business owner I’ve been running into has been talking about needing more money. That’s usually a bait to have me ask them about their business and most of the time I bite. When I ask them about what’s going on in their business they are quick to tell me all about how they’d love to do more marketing, hiring or <insert generic growth term> (sometimes that even means hiring me) but their budgets are anemic.

Every business owner (or person alive really) has to face opportunity costs. Making choices is all about giving something up to gain something. “Not having enough money,” is an excuse to avoid making hard choices and just complaining about it shows me that there’s probably more to the story. So, I ask about more qualitative stuff. How happy are their customers? Their employees? Do they work on weekends? Then when they are feeling good about talking about themselves, and a little less defensive about money, I ask more quantitative questions and one of two things always happens.

Either they are growing and revenues/clients/customers are increasing or they aren’t. I give a little more leeway to the businesses that are struggling because they’re immediate opportunity costs probably sting a little more and the choices are a little harder. For both kinds of businesses I offer the same kind of starting advice - looking for more revenue or outside financing is not going to make all your internal financial problems go away. You need to take a hard look on what’s going on inside your business first, that’s where you’re going to find some liquidity the fastest.

Here are 3 places you can start to look for money right now.  

1. What kind of subscription are you paying for every month?

This sounds like a no brainer but some business owners hoard monthly subscriptions like people hoard apps on their phone or porcelain cats. When business is good it’s easy to rationalize away a $10/month subscription here or a $29/month membership there because you set them up once and make the buying decision once based on your financial situation at the moment of the purchase. Those small monthly cash-outflows add up though! You need to look at each of those monthly expenses as an investment. What kind or return are you getting every month? Would you invest in something that earned you negative, zero, or less than one percent on the life of the investment? NO! So if you haven’t used that gym membership in 3 months it’s either time to find some way to hold yourself accountable or get rid of it.

The same goes for monthly subscriptions to anything else. If you signed up for some customer relationship management, podcast hosting, email management or cloud storage service that you don’t use or isn’t actually helping you move your business forward it’s time to get rid of it. If you are looking for more money in your business start by getting clear and objective about where money is going automatically every month.

2. What are you doing with your time?

Time is money right? This isn’t a plea for you to go out and hustle more it’s a plea for you to spend your time evaluating looking at the billables or billable projects you have on the table. If you aren’t a point-of-sale kind of business you should be looking at tightening the payment terms or the time it takes people to pay you. If you are keeping busy with lots of billable work you can start to up the money that’s coming into the business by asking the people you serve to pay you quicker.

You can even offer some kind of small percentage off for paying early. If you are more of a retail or point-of-sale kind of business maybe give your suppliers a call and ask about either extending terms or asking for some preferential early pay terms. A few percent off a bill might not sound like a lot but in the long term it adds up. It adds up in the short term too if you’re at a point where you are trying to stretch the dollar of every dollar in the business. The same goes for calling credit accounts you have and asking for lower rates. Every. Dollar. Saved. Counts.

3. Watch your driving.

If you’re a small business owner you might be doing a ton of driving. Not thinking that every time you hit the pump it’s money that’s coming out of your business. As a management consultant I know this pain all too well. Yes gas prices are falling and yes eventually you can claim mileage on a tax return but that doesn’t stop the sting of hurting for cash now. Setting some kind or parameters around your driving can make a big difference every month. Think about how you can use more technology if you need to meet people face to face, things like Skype and Google Hangouts are my new favorites.

Planning ahead and batching your schedule with meetings or networking based stuff by location is helpful too in controlling the fuel cost bleed. Professional truck drivers and delivery companies do it, you should too. Lastly, if you can have your people come to you. Personally I used to insist on being on site with clients and for a select few I still do but if you have a professional space or a favorite coffee shop that’s close try to load your schedule such that there are big chunks of time where you get to be in one place.

You can start to work on these three right now! 

These three tips sound really simple in theory but you’d be surprised how much static you give yourself when you start to trim away the unnecessary. As a business owner you have to make choices and if you’re goal is to stay in business you can’t let any decision about money slip unseen into the murky fog of rationalization.

When it comes to the money in your business (and your life really) it’s about building good habits. No one wakes up a perfectly rational decision making maching but you have to actively try to be clear about what you expect in terms of return on those dollars you're spending. Otherwise, you’ll just be the person no one likes to talk to because no matter how good times are you’re always going to be talking about how there’s never enough money. That person get’s hard to listen to, or take seriously, after a while.

Why Are Strategic Plans The Worst?!

I hate excuses. I think that the old way of creating long form strategic plans is an exercise in preemptively creating excuses for your business. Strategic plans are so often argued over, passively decided on and luxuriously spiral bound for businesses that haven’t yet done the work necessary to truly understand the impact of the decisions they are (or aren’t) making in their business. My favorite offenders are the one-page downloads that promise to, in one-page, definitively nail down the over-arching strategy you’re going to implement or execute on in your business. Definitively. All that stuff that looks just like strategic planning busy work is just that, it’s busy work and a scapegoat for you to blame your business shortcomings on later.

Don’t get it twisted though, I’m not at all down on crafting strategy for your business. Articulating goals is great. Teasing out effective ways for you to track whether or not your efforts are pushing you towards those goals, even better. Evaluating the decisions you make everyday against the backdrop of the vision and values you and your business stand for, the best. I’m just down on how maybe some institutions frame strategic planning…<<cough cough>> Some bad “business” mentors/consultants <<cough cough>>

But, that’s hard.

Getting to real understanding and depth in your business and for your customers means doing the work to understand more than just what you do and what you offer. It means getting to the heart of why your consumers choose (and maybe keep choosing) you, quantifying the real value you offer (not what you think you offer) and the ability to objectively identify what’s working and not working in your business.

Let’s set the scene. You're a new-ish business owner. (In business for yourself for less than 3 years.) You’ve been at your craft for a while, have moved a few units and/or have delivered a some hours of your services. You believe you bring value to your target market and you may even have a few testimonials on your website that support that claim. You wake up one morning and decide that you need strategy to get your business to the next level. That’s what you’ve read on the internet from your favorite “teach you how to build a business” business guru so it must be true. You’re first, albeit unintentional, excuse as to why you haven’t grown into the lifestyle or business size that you want is that you haven’t had a good strategy.

So you set off one morning and Google all kinds of fun strategic planning based keywords and over and over again you see the same kinds of results:

• Articles about the Balanced Scorecard

• Wikipedia Definition

• HBR Articles

• Forbes Articles

• Software/Web-App Planning Tools

• Dummies.com Articles

• Assortment of colleges and university course resources

Great. Now what?

I know what. You download the worksheets, read the blog posts, listen to a few podcasts and probably even peruse a few HBR articles. That’s great, you just spent hours getting your learn on. I’m all for learning but your shotgun scatter patterned attempt at muscling through how to create a strategic plan has forced you to a cross roads. Also on top of that, you’re still not even sure what the value of a strategic plan is for you and your business. #mixedmessages

At this point you’re making a choice.

1. You are either going to keep powering through and are going to try to recreate a strategic plan from some template or example and try to force what you “think” is important into a mold that most likely has nothing to do with who you are and what your business actually does.

2. Or you’ll quit. You’ll quit and move on and rationalize that you are too busy, too small or that crafting strategy really isn’t right for YOUR business.

Both are terrible but, are totally natural reactions. It’s the result of oversaturation/information overload, you're wrestling with how to spend what scarce resources you can muster on this task and business guru’s trying to package some program to sell you in a $497 ecourse.

That’s why strategic plans are the worst. You just spent all this time trying to figure it out and have made your way to creating something that is not at all authentic to you and your business or you move on from it all together.

Strategy is important and it hurts my heart that business owners never get to see the value of good strategy. Strategy that comes from deliberately thinking through problems and opportunities and actively participating in the choices that come from that thinking process.

Instead of trying to slap together some word document that you’ll only reference once or twice a year try this instead.

The Strategic Un-Planning Process

Below I’m going to outline an example process that you could use in lieu of the templates you just downloaded that I bet will work better for you and matter more to you. It’s not the be-all-end-all in strategic planning but if I can at least help one person who’s reading this create something that has the potential to be a real asset over some generic nonsense it’s 100% worth it.

1. Figure out what your long game really is for your business and be able to articulate that long game. Is it a specific idea of what you’re life will look like, some large financial goal or building a legacy business. That’s going to be the big idea you measure the choices you make everyday against.

2. In smaller intervals what kinds of goals are you going to have to hit to get to your long game. In strategic planning speak these would be your strategic aspirations. Is it buying a building, controlling 40% of your market share, selling one-billion hamburgers? Again get specific.

3. Repeat number two again but do that process for each of the individual goals you listed from step two. That should get you to a place where you can identify the actions you need to keep track of on a daily/weekly/monthly basis to get you to those goals. I’m all for impact and engagement but to be the most effective you need to associate actions with dollars.

4. Look outside your business. Talk to your customers about the value they really get from your offerings. What are the biggest pain points that customers can specifically share with you that you’ve solved. This will help you get even more focused in your offering and how to better position it in the market.

Before we move on I just want to recap what you will have really done up until this point. Going from 1-4 means you’ll have honestly reflected on what matters most to you, you’ll have broken down to at least two tiers worth of goals that you need to hit to get there and started to work out why people are engaging with you to better frame the actions you need to take to get more customers through the door. We are flying through these steps in a very simplistic way but this is all the work that I talked about in the beginning of this post.

 5. Look at your business. Really, truly, objectively look at your business. Do your day to day actions reflect the value that you bring to the market? What does it cost to get one more customer? Is there a gap between what you planned to do at the start of your business and what you are actually doing? Are you making excuses right now because there’s a little bit of dissonance stirring in your brain about this stuff? It’s time to do something about that right now. You need to DECIDE what the actions are in your business that are the biggest drivers in how you deliver value as well as get in front of potential new customers. If you’re struggling with this part I’ve built a decision making framework that you can download for free. (Notice it’s not a one-page strategic planning template. You’re welcome.)

6. Pick a handful of actions to really focus on in your business. Think of them as strategic themes. These are the types of work that align best with what’s important to you, your customers and what you want the business to stand for. Figure out what success for each of those actions looks like in a quantifiable way and how each of those themes will get you to your short, mid and long game goals.

7. Get to work and stick to it! What gets measured, gets managed. This is where the work really begins because here you’re working to prove the hypotheses you created for yourself. Just like in 7th grade science class you need to collect data and that data comes from getting your hands dirty. Creating and managing strategy is a daily practice and it works best when you can make decisions against the outcomes your actions are showing you. No winging it, no shortcuts, no more guessing about what you think people want - just data.

8. Rinse and repeat as necessary. What’s important to you may change over time and being honest about that is what makes strategy work. If you’re long game changes, your goals change or your market changes it’s ok. It just means that scale and scope of your work needs to change. This is where old timey strategic plans fall flat on their faces. When you or your business change, your work has to change or else your productivity and the quality of your outputs are going to drastically deteriorate. Think about the last time you worked on something you hated. You probably did the minimum and just went through the motions. If you are building a business I’m guessing that you don’t want to find yourself just going through the motions. Your customers probably don’t want that either.

I hope that if this blog post did anything for anyone it at least saved you a few hours of mindlessly searching for strategic planning resources on the interweb. This post was not designed to be a conclusive resource for your strategic planning needs but it was designed to challenge you to think. If you are pressed for time or resources I like to think that I’ve also offered you an abridged approach to creating something that matters for you personally.

Strategic planning is really a personal (business personal?) process and it’s not something you can just hammer out in a one page template and expect any real results. It’s a process that you have to work at everyday and one that requires you to get brutally truthful with. The people that buy from you or that you’d like to buy from you aren’t stupid, they know when what you’re offering is lip service. Customers know what authenticity is and how to hunt for the most value. Strategy at its core is about making decisions to so that your customers can find that value.

So, are you making decisions everyday that will match what you’re offering and how you deliver with the needs of the people that you serve?

How To Start Making Better Business Decisions Right Now

Welcome to the first blog post for the new and improved Disruptive Strategy Co. site!

Exciting times, I know. With this new (and improving) redesign comes a renewed focus on where I believe great strategy comes from - making better decisions. Growing a business, launching a new product and hiring your next employee all boils down to making good choices consistently. There are lots of tools, tricks, tactics and even paint-by-number style worksheets to get at business strategy but at the end of all that organization and planning it still takes you making a choice for anything to happen.

That’s where the heart of strategy is - choosing and equally important not choosing to do something. So with this blog I am going to teach you how to make better choices in your business, how to track those choices and how to decide on the outcomes that are most important in helping you on your business growing adventure. (Along with sprinkles of other types of business and strategy development.)

I’ll do my best to avoid all the buzzwords and jargon that can be intimidating or are interesting to read but leave you asking, what now? There may even possibly be an appearance of supply and demand type graphics - you can take the serial adjunct professor out of the classroom but you can’t stop him from geeking out over behavioral economics concepts.

In this blog post I’ll be offering up my first free decision making resource for you. It’s a downloadable framework you can use to help you through your next sticky situation.

Let’s tee it up first.

Sometimes making decisions in your business (or to grow your business) is hard. You have lots of information, options or challenges and there’s often not a clear way to weigh your options. Juggling lists of pros and cons in your brain doesn't work, just like it doesn’t work when you try to mentally balance your checkbook. Please, please, please don’t mentally try to keep track of your checking account. Bad things happen. Worse things if it’s the money you’re using to manage your business.

Hopefully you’re using some kind of framework to manage your money that’s not based on mental math. For the decisions you have to make in your growing business I have a framework for you. It’s something you can literally put into practice today and that I know works because I use it with the businesses I work with. It’s called the Disruptive Decision Framework and it’s a “pick your adventure” kind of exercise that helps you get to the heart of what’s important and provides some insight.

It starts with identifying what’s important, then running what you’ve identified through a gauntlet of important priorities and then challenges you to come up with solutions that are in line with what’s important to you. You’ll also get me in the process helping your through the steps like a little angel on your shoulder providing a little insight and helping you mentally digest the process as you move through the 5 steps.

Here’s the first page to give you an idea of what kind of adventure you’re in for and to get the second half there’s a digital download below it.

Page 1 of the Disruptive Decision Framework

Happy decision making!