Global Business

I want to make everyone aware of an upcoming radio show that we are doing this Friday at 4pm PST with one of the most interesting business authors I have spoken with in a while.

His name is James Hemerling and his book is called GLOBALITY: Competing with Everyone from Everywhere for Everything. Hemerling states that the old global business model (centralized, top-down, process-driven, with influence running from West to East) will recede, perhaps vanish. It is inadequate for a world in which every global company is forced to compete: in every market, with everyone, from everywhere, all the time, for resources and market share.Unlike developed-market leaders, emerging-market challengers have evolved new management and governance structures that are ideally suited to this new competitive landscape. In addition, it has enabled them to undercut, outthink, outwork, out-innovate, and generally outfox some of the biggest, most powerful names in global industry. What are these upstart challengers doing? How are they winning?Imagine companies that:

  • Innovate at the rate of one new product development every 12 hours.
  • Give up the notion of “headquarters” in a drive toward global expansion.
  • Do away with titles and committees in an effort to improve staff development.
  • Expand into 50 countries by satisfying global demand that no one else could see – at the lowest, cheapest end of the market.
  • Hire thousands of people to staff assembly lines, instead of automating, to be more efficient, flexible, and profitable.
  • Achieve such high efficiency that they can give away 60% of their services and still make a profit.
  • Retrain workers by the tens of thousands to build a world-class capability, in less than a decade.

Again, listen to my interview with James Hemerling this Friday at 4pm PST. Just go and turn-up the sound. Its that easy!

Give First

There is a communication breakdown in business today. Sellers are speaking but somehow buyers can’t hear a thing. Ironically enough, these potential customers feel they are screaming, yearning, literally begging to have their needs met, but it seems sellers continue to go on their merry way hawking their wares.

All marketers like to believe they have a unique solution. They are confident that they are different from the competition. But when you get right down to it, most marketers are all saying the SAME thing. They talk about what they DO, the services they provide or the products they sell. At best, they may allude to some generic group of benefits that they THINK buyers are interested in. Sellers and marketers are busy working hard at finding more effective and creative ways to communicate what they do and why they are better than the competition. They invest millions in these efforts. Yet they rarely succeed.Why?

Let’s face it; all customers care about is “what’s in it for THEM.” Buyers are desperately attempting to discover how their problems will be solved by these products or services, how they will enhance their lives, make things easier or life more rewarding.

The four simple steps below can help in developing a marketing plan that is customer centered, informational oriented and in the end produces far greater returns:

Step 1: Create Interest
Develop the interest of the customer by first acknowledging their problems, empathizing with them, asking questions that bear on their need and suggesting some action that reverses their risk. Understand their challenges from an emotional viewpoint. Do a little work “for them” and discover how the experts deal with these problems. Speak with authority and from the viewpoint of the customer NOT as a vendor or supplier.

Try to depart from the traditional forms of communication such as brochures, mailers, print ads, radio, TV, and so on. This makes us look like everyone else… a salesperson or marketer. Opt rather for the educational and inspirational approach. This philosophy should also be adhered to when communicating in person. It is our responsibility that everyone in our organization communicate a consistent marketing message. This includes sales staff, customer service and all employees on the front lines with the customer.

Rules in creating interest:

  • Acknowledge the customer’s problem
  • Empathize with them
  • Ask questions bearing on their need
  • Reverse their risk

Step 2: Give Something Away
This second step is where we bring the power of informational marketing to bear. We offer some valuable information to the customer that will help them to see how they can solve some of their problems on their own without our product or service. Notice I didn’t say see the benefits of BUYING your product or service. They don’t care about that. In fact the more you tell them about how fabulous your product or service is, the less they want it. The trick here is to get the prospect to think about their problems in terms of your solution WITHOUT telling them it’s your solution. This approach opens their minds to possible solutions that they themselves haven’t thought of before. Since you are the person to help through this process, it lowers their defenses. You can eventually position your solution as the only solution by creating a relationship with the customer even BEFORE they buy. Creating this kind of mindset cannot be forced. It must be earned. Be willing to GIVE first before pitching your wares.

Rules in giving something away:

  • Remove yourself from their solution
  • Educate, inform and inspire
  • Deliver a consistent message in all forms
  • Evangelize rather than sell
  • GIVE first

Step 3: Get Them on Your List
This gives us the ability to maintain contact with the prospect on a continuing basis. In this way we can build a rapport as well as educate the customer. In order to effectively launch an information-based marketing program we must craft a NO cost, NO risk, HIGH benefit offer that provides prospects with an incentive to sign-up with you to receive this information. We also must maintain a reliable database management system and employ a cost effective and user-friendly list management system.

Rules in getting them on your list:

  • NO cost, NO risk, HIGH benefit offer just to sign-up for information
  • Reliable database and list management system
  • Make it easy to cancel subscriptions

Step 4: Stay In Touch
In this step we must plan to consistently stay in touch with our prospect base. This involves providing information to our prospects on a regular basis. This could be monthly, weekly or even daily. The information must NOT be sales oriented. It must offer very clear benefits that are customized specifically for the target audience. It must educate and be emotionally supportive to them. When using the telephone, we must be creative in finding good reasons to contact prospects. Otherwise we run the risk of losing credibility. Merely calling and “just following-up” doesn’t cut it anymore. It screams, “I’m desperate, got any business for me?” This of course is not in the interest of the customer and it will cause them to back away from you.

Rules in staying in touch:

  • Make regular contact
  • Information that is customized for the audience
  • Provide information that is ONLY beneficial to the target audience NOT sales oriented information

The bottom-line is that traditional marketing just doesn’t work anymore. It focuses on GETTING. It centers on YOU. It tells them what they ALREADY know. It blends in with all the other NOISE. And it PUSHES people away. Following the above steps can revolutionize any marketing campaign. They are key in winning the customer’s trust and building a strong relationship. Practice and teach your people to be willing to first understand the customer’s needs, provide valuable information that serves their needs, and to find customer-centered reasons for staying in-touch. In other words be willing to GIVE FIRST!Give yourself every opportunity for success this year. Check out our web site for our next Entrepreneurial Workshop and get pre-registered. If nothing else I guarantee that it will be a great way to start the year with a positive first step.Those of you that have attended any of my classes know that they are energy packed and you walk out motivated and cranked-up!

Getting in the Way of Growth

I was reading the Wall Street Journal recently and I stumbled across a statistic that I thought was interesting if not disconcerting. A recent survey they conducted indicated that more than 100 Fortune 500 CEOs confess that they are, at best, only able to realize 50% of their growth potential in the firms they lead.

Now I began think, if it’s that hard for the country’s top CEOs to achieve growth how must it be for the rest of us?Certainly this is quite a performance gap. Why is it so difficult to overcome the barriers of growth? It seems these same CEOs are successful in bringing about efficiencies, reducing costs, reengineering business processes. Shouldn’t these things translate into corporate growth?I say NO, absolutely not! In fact these are the very things that may PREVENT consistent, long-term growth of any organization large or small. In fact evidence of this is visible wherever we look.Consider the global leaders of the Dow Jones Industrial Average. There is no economic indicator that is more synonymous with growth in this country than the DOW.Let’s look at four of the most rock solid companies operating in completely different industries all of whom are flagship components of the DOW: Proctor & Gamble, IBM, Coca-Cola and Disney.The giants of growth and success, right? WRONG.What do you see when you look at these leaders? STAGNATION!Hey I don’t mind telling you I have stock in all three of these companies and over the years I’ve done OK, but I’m talking about GROWTH.Proctor & Gamble considered to be the world’ leader in product marketing and brand management grew at a rate of only 2.4% between 1997 and 2002. This is far slower than the growth of our economy. IBM engineered the most successful turnaround of any market leader and prospered during the tech boom and bust.Yet they grew less than P&G’s 2.4% rate for the same period. Despite the fact Coke is one of the largest equity holdings of the legendary Warren Buffett, they grew at a rate of only 3.3% for the same period. And finally Walt would roll over in his grave if he knew that his Disney had grown at a rate of only 0.7% for the same period.Some may say well these are old companies Mark institutions really. Or they’re past their heyday or it’s been an uncertain economic environment as of late or any other of a host of excuses. But I believe there are some very good reasons that the powerhouses of our economy are slowing and unable to get back into a growth mode. This is relevant to small business because most small businesses pattern their growth strategy after the big boys and this is often why they just don’t grow!You see most of these larger concerns have tremendous momentum, top-of-the-mind awareness and consumer equity. Yet these organizations have sustained their market position without growing by alternately downsizing/cutting costs and latching onto some new technological fad and riding it out for a time. This is not consistent, sustainable but rather growth in short bursts.Graeme Deans and Fritz Kroeger in their book, “Stretch! – How Great Companies Grow in Good and Bad Times,” talk about the secret to long-term, sustainable growth. They say, there is no secret it is the result of implementing a growth strategy in four areas of the business: operations, organization, strategy and stretch.1. Operations – This represents getting your operation in order, targeting dramatic improvements in internal processes such as product development, sourcing, quality, delivery, customer service, sales and pricing.2. Organization – This represents finding the optimal organizational structure, culture issues, compensation, rewards and incentives, value chain reconfiguration and business unit accountability.3. Strategy – Take a fresh, holistic look at the company’s strategy and be willing to make wholesale changes. This may involve a higher risk tolerance.4. Stretch – This refers to expanding the company’s frontiers culturally, economically, geographically and strategically. Often times this involves breaking down old barriers and paradigms of doing business. This might include perhaps addressing new markets, customer bases, product categories.All of these elements can be applied to a small business as well as a large. Great companies find a way to grow regardless of the economy. They focus on innovation and calculable risk. Don’t let the economy or trends in your industry get in the way of your companies growth. Put together your own Stretch plan and start growing. Because remember if you’re not growing you’re actually shrinking.I hope that this “Business Update” has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email Deo

Farewell, Old Guard

There is a revolution in business today. The old way of doing things is passing into the dark mist of history. It used to be that you… created a product or service that was needed or desired, obtained sufficient financing, recruited a great team, cranked-up your marketing machine and eventually you could grow to become a leader in your industry. That is until some smarter competitor produced a superior performing widget, secured better financing, stole some of your people or out-marketed you, thereby knocking you off your high horse.

Not anymore! 

Don’t believe me? Consider this. Yesterday, Bill Ford, president of Ford Motor Company said: “The business model that sustained us for decades is no longer sufficient to maintain profitability.” Think about that for a minute. Here is the son of one of the “fathers of the industrial revolution” telling us that their business model no longer works! That’s kind of heavy. 

Product marketing, recruitment and financing are no longer the “sacred cows” of business success. 

Product Marketing
Just because a product or service is “better” in no way guarantees its success in the market. In fact our friend Seth Godin, author and marketing guru says in his book, The Purple Cow, “Very good products and services are very bad!” Why? Because while we are focusing on how marvelous our products have become, the market has changed and often so radically that your nifty little product has not only lost demand, it has quite likely become irrelevant! Marketers today must focus on creating the NEXT generation of products and services before their first generation ever hits the street. But often times we fall madly in love with our product line. This is a surefire approach to getting our clients to fall “out of love” with our company. Faster product and service turnover is a requirement of success in this blinding fast, whim sensitive culture.

Traditional Financing
While every enterprise must have some kind of basic financial foundation, today traditional financing is less important that ever before in history. Consider some of the recent start-ups that have grown into multi-million or billion dollar ventures with little or no traditional financing:

  • Skype started with less that $10,000 in capital and recently sold to E-bay for 2.6 billion.
  • Airborne Health with only18 employees, posted $150 million in sales for 4673% growth in the last 3 years.
  • Digital Lifestyle Outfitters, makers of i-pod accessories reached $84 million in sales after having been in business only 26 months!

All of these companies took risks. They were funded by immediate and astronomically growth not by a bunch of bankers with purse-strings and their greedy hands in every pie. I believe that self-funding ventures will become the standard for business growth in the future. Traditional financing and budgeting leads to waste. Like the old guard concept of, “it’s in the budget, then we need to spend it or they will cut the budget next year.” This is the kind of thinking that has created the 10 trillion dollar economic deficit that our generation faces.

Building a world class corporate team has always been the aim of every great company. Ford Motor Company, for years had one of the lowest employee turnovers in their industry. For decades loyal workers toiled for “mother company” in plants all over the Midwest. That is until the auto industry began to enter the world of collaboration and business alliances. Give a high five to the Japanese for this move. Today it would be difficult to count how many different automotive companies take part in the design and manufacturing of most Japanese automobiles. In fact many of those cars are designed and made in collaboration with competitors. That’s right competitors actually cooperating.

If this is so effective for the global auto maker why would it not work for small organizations like yours and mine? Because of FEAR! Many are afraid that their competitors will learn too much about us and use it to “beat us on the street.” Many are afraid that our best EMPLOYEES will learn too much and defect to the competition. How foolish. When you think about it. What was stopping them from doing that very thing in the first place? Nothing at all. 

I remember people laughing at me 3 years ago when I said on live radio that our corporate world is dying and that in less than a decade over 70% of the workforce will be free agents. This is now very obviously happening.

The watchwords of sustained growth in business today has been transformed from better product marketing, recruitment and financing to collaboration, risk-taking and blind fast product turnover.

Do you think your business can continue do things the same way that you have in the past? 

Bill Ford doesn’t think he can! 

I wonder, how will you? 

Have a great week!

Compromising Situation

I will never forget the first time I went to Japan on business. I shudder to think that it was almost 20 years ago. I was excited as you can imagine. So excited in fact I forgot to get a travel visa. Sad, but true. I had to drive my car like a maniac to the Japanese embassy in Downtown Los Angeles and get the visa stamp on my passport then drive like a nut-head back to the airport where, unbelievably, I made my flight with just minutes to spare. 

Never the less when I arrived I was greeted by Mr. Uyama. He was friendly but rather stoic. I would learn much from him in the ensuing years but he said something that I will always remember. He said, “Mark,” in his excellent but slightly broken English. “There is one thing that we just cannot do under any circumstances. I hate this more than anything. That is compromise. We must NEVER compromise.” He spat out the word like it was the most disgusting, vulgar action on the planet. I was shocked. I had always thought that compromise was good.I came to find out that what Mr. Uyama meant is that we wouldn’t just give up on an initiative without exhaustive due diligence. This makes sense. But what I also found out was that this could be a pretty inflexible strategy. Despite our best efforts and careful planning we may, as leaders, find ourselves facing circumstances in which the path ahead is far from clear. At times we have to resort to improvisation and creativity to find the best possible solution. Often times looking for the solution is the very thing that stands in the way of resolution. In fact, we should more often than not spend more time and effort examining the causes of the problem.Separating symptoms from causes is often times more art than science. It is critical that we understand the difference between a symptom that accompanies a circumstance and the root cause of a problem. This requires careful investigation and study. There is a relatively easy way to determine the difference between symptoms and causes. When we change the “cause” the problem, ceases to exist permanently. When we change a “symptom” chances are the problem will return. At times we can use compromise to root out the difference.In his book, “Leading Quietly,” Joseph Badaracco talks about how we can use compromise to allow the best solution to rise to the surface and to do so in a way that reduces risk. Compromise, not in the sense of immoral decision making like we’ve seen as of late with companies like Enron. As leaders we should do the right thing, not half of it. I am speaking rather about the kind of compromise that occurs in fruitful negotiation. This kind of compromise is rooted in ethical, well-informed decision-making. Fair compromise often rests on a leader’s ability to motivate participants to see circumstances from a unique perspective. They present a new line of vision which redefines the problem in a different light and leads to a mutually beneficial compromise.In many circumstances compromise is the beginning of wisdom in resolving difficult problems. King Solomon of the Bible was said to be the wisest man that ever lived. One day he had to decide which of two women was the true mother of a child. Both of the women claimed that the child was theirs and they came to Solomon for his wise judgment. They didn’t have blood tests in those days and he had no way to determine which one was the true mother. So the king proposed a horrific alternative: “Cut the baby in two and give one half to each women.” Of course the true mother cried out at this terrible proposition and gave the baby up to the imposter. This told Solomon all he needed to know and he reunited the child with her real mother.Solomon was a powerful king. He could have “faked it” and guessed which was the real mother. But he would know it was fake and many others would suspect as much. Eventually this would undermine his authority and the system of justice in the land. He could have looked for some technicality or taken the child from both women which would have separated a family and perpetrated a greater injustice. But Solomon was truly a wise man. He went beyond the legal issues to the issues of the heart. As a result one women demonstrated her love and devotion and the other her bitterness and envy.Are you facing a difficult decision? Does the road ahead look kind of murky? Think about how you can use ethical compromise to root out the cause of the problem and watch the solution rise to the surface.

Building Your Business Through Giving

A famous Chinese proverb reads, “An inch of time cannot be bought with an inch of gold.”

Few would argue that “time” is our most valuable commodity. No amount of money can allow us to purchase a 25th hour in a day or even turn the clocks back one minute. That being said, we need to make the most of our time. I guess that’s why people run to and fro, traveling from place to place, faster and faster. They want to jam as much as possible into those 24 hours and increase their chances of financial success. Oftentimes people analyze how they are spending their time to discover their R.O.T. (Return on Time). That’s right – it’s kind of like R.O.I. (Return on Investment.) After all, you have to make every minute count! There’s no time for activities that fail to produce a monetary return. 

This weekly business report is usually about things that we can do to improve our performance and create a positive financial impact. Certainly, time management is one of them and we have discussed it before. Yet I would like to present something that does not involve managing our time.

The last thing I want to do is pontificate with a “holier than thou” attitude. Unfortunately, that’s the way this might come off to some, so let me set the record straight right from the start- I am the worst offender.

I know there are many people who are reading this that have given to charities this year. God knows we’ve had plenty of cause to give with hurricanes, tsunamis, earthquakes and floods! I’m talking, however, about a different kind of “giving.” I’m talking about, “giving back.” That is using your talents and abilities to help other to prosper and grow. Now this might fly in the face of the “manage-every-second-jam-as-much-into-a-day-as-possible” mentality yet I have found that an amazing thing happens when we give our time while expecting nothing in return – we literally reap ten times, fifty times or even a hundred times the benefit. I can’t tell you how many times this has happened to me. 
Yet giving back involves a certain amount of giving up. You may give up an hour or two a week, or a Saturday, or perhaps a weekend or even some vacation time. Regardless, when we do this we access some kind of power that creates an eventual, reciprocal benefit for ourselves. Call it karma, the power of God or just a force of natural.

The photo you see is of myself (I’m the OLD GUY!) with the board members of the American Marketing Association at California State University – Long Beach. I spent a few hours with their chapter of about 60 members and practiced some of the Rules of Attraction. Not only was this a very enjoyable and rewarding experience but it was gratifying for me to help these young people learn the practicalities of marketing. 

I want to take a moment to encourage you to use the 4th Rule of Attraction: “Give without Selling.” When you do, I guarantee that it will return to you in multiples. You just might find it to be the best investment of time that you make all year!

Breakthrough Innovation

Last week I talked about my concept of “heartshare.” Marketshare is about getting more clients; mindshare is about getting them to remember us. Heartshare is about becoming more influential by creating extraordinary customer experiences. We do this by leveraging our intangibles. One of the intangibles that we can leverage is innovation. The most productive innovation involves revolutionizing processes that create greater customer satisfaction, rather than merely product improvement.

Tired of reading already? Click here- LISTEN TO THIS ARTICLE.
Breakthrough Innovation
Innovation has become a mandatory objective for all businesses rather than the optional advantage it once was. Innovation offers numerous benefits that can help to win market share and mind share. True innovation also allows us to capture a greater share of heart:


  • Increases market share by overstepping the competition.
  • Increases mind share by making our products and services more memorable and attractive.
  • Increases heart share by achieving greater efficiency and a smoother customer experience.

Levels of Innovation
Like anything else, there are different levels at which we can innovate. Over the years, I have identified four levels of innovation: Standard, Specialized, Extraordinary, and Breakthrough Innovation. What I do not address here are companies that are operating with a zero level of innovation. God help you if you are in this category. You need to move and move FAST to start developing an innovation strategy immediately. It behooves all of us to look at how we can innovate to win greater share of market mind and heart. Let’s look at how we can accomplish this.

Standard Innovation
The first level of innovation (Standard Innovation) merely allows us to keep pace with the changes in our industry. I like to call this survival innovation. At this level, companies innovate their products and services only enough to survive. This is a kind of reactive rather than proactive innovation. These organizations are merely reacting to the competition’s innovations. I guess you can say they’re just keeping up with the Joneses. This is the level at which most organizations are performing.

Specialized Innovation
The next level of innovation traveling up the continuum is “specialized innovation.” This typically occurs when an organization adapts their product or service to a specific marketplace or subgroup. For example, when I was in the consumer electronics business I did some consulting for a company called Bogen. They manufactured PA systems (public address systems). When this market went south, they literally saved their company from extinction by innovating all of the internal elements of their business to the marine marketplace. This was a very small but profitable and virtually untapped subgroup. The production, technical, and service innovations were relatively minor to accomplish this. Bogen quickly captured nearly 100% market share and mind share among the marine subgroup. Most importantly, they snagged a good deal of heart share since all of the other amplifier manufacturers had ignored the marine dealers and distributors.

Extraordinary Innovation
Just as it sounds, this innovation is out of the ordinary. This is where organizations can leverage their uniqueness in any combination of the processes to deliver a level of innovation that their competitors are not currently offering. Let me tell you about a client that we’ve worked with that has built some astounding innovation into their production and service guarantee. The company is Pelican Products. Their claim… “You break it. We replace it. Forever.” This is not marketing hype. The company manufactures cases and flashlights that are virtually indestructible. The product is sold to the military, law enforcement, fire, and emergency agencies. This guarantee is unmatched in their industry and their competitors are stymied by their ability to continue to offer this year after year. Even more amazing, Pelican tells me their return rate is less than 1%! How do they do this? By innovating the guarantee right into the product. How big is the market for industrial cases and flashlights? The company will do almost $100,000,000 this year. It helps to have massive heart share.

Breakthrough Innovation
Breakthrough innovation occurs when an organization makes a revolutionary advancement in one or more of the innovation processes. In this case, a company will deliver a level of innovation that their competitors are NOT EVEN CAPABLE of offering. Many times these organizations literally create monopolies that admittedly have a half-life, yet permit them to rapidly capture huge market, mind, and heart share almost instantly. Can you say Microsoft? 

What level of innovation are you achieving in your own business? What can you do to CREATE innovation? If you’re not at the “breakthrough level” in every area, don’t despair, you’re not alone. On the contrary, if you are achieving breakthrough innovation in even a SINGLE category, you are rather unique. 

In fact, I’m willing to offer a special gift to the reader with the most innovative breakthrough (an advance copy of our Attract More Business Program – valued at $499). Just email a description of your innovation and we will announce the winner on the Small Business Hour on 97.1 FM as well as in the Business Update.

Next week we will talk about the areas of innovation and the four steps to CREATING innovation. We will look at how we can innovate our sales approach, management strategy, marketing communications, products, services, production, systems, processes, and even the culture of our organizations.

About Risk

“Sometimes you have to do the wrong thing at the right time.” -Robert Varkonyi , 2002 Word Series of Poker Champion

“All in,” he declared, time and time again, pushing his entire stack of chips to the center of the table. If he guessed wrong, he would be eliminated, but if he guessed right, he would double his stake at the table.
One-by-one the professionals went down to the amateur, surrendering their chips to his ever growing stack. He entered the final table at the tournament with the fewest chips of anyone, and pulled off the biggest upset in poker history, winning the coveted platinum bracelet at the 2002 World Series of Poker.
His play throughout the tournament was risky, going heads-up with former champions and challenging them at their own game
“Who is this guy?” – the other players at the final table must have thought. And those are the thoughts of earlier players he knocked out, such as former champion Phil Helmuth who stated, “If Robert Varkonyi wins, I’ll shave my head.”
And win he did, becoming one of the most improbable World Series of Poker Champions ever, and picking up a two million dollar prize for his trouble.How did an amateur player beat professionals who have been living and breathing poker for their entire adult lives?
Luck, you say? That’s what most would think.
While an outside observer might say that poker is all luck, any experienced player or fan will tell you this is not the case. Over the course of a week long tournament the luck will even out amongst the players. The one who wins will be the player who best plays the cards they are dealt.
The truth is that what won Varkonyi the title was his bold play and willingness to take a risk.
Surely this is a lesson for all of us entrepreneurs.
Do you sometimes feel outgunned, out financed, and outmanned?We can increase our chances of success as by doing specific things. When you think about it there are aspects of our business that we may not be able to change very easily. These include location, ability to locate needed employees, financing or additional initiatives. These can all be very costly and time consuming. What we must do, however, is most effectively play the cards that we have been dealt. We must accept those things that are fixed (much as a poker player must accept the cards they have in their hand), and figure out what the best “play” is with them. We can compensate by capitalizing on our strengths. This could be viral campaigns, networking, creative marketing, collaborative partnerships with other businesses, perhaps sourcing interns from local colleges and so on. The action will vary with the “hand” you’ve been dealt.
You must also pick and choose where you decide to wage your battles. In poker you can fold on hands that you know are losers so that you apply your chips towards hands that you have a better chance of winning. This strategy can be applied to your business as well. Perhaps going to a tradeshow isn’t the best move, or if you’ve never been, maybe it’s worth trying. Selling only through distributors? Maybe adding a direct sales channel will be a good idea. Or if you only sell direct, resellers may be the way to go. These will vary from business to business and situation to situation, but you must decide where to spend your resources of time, money, and opportunity so that they give you the highest probability of success.
The game of poker appeals to me as a business consultant because there are many parallels with the world of business. You can’t change the cards that you’re dealt but you need to make the best of them. Often times, playing it safe isn’t necessarily playing it smart – even in cautious times.
As is the mantra of Brian Tracy, author of “Create Your Own Future,” you make your own luck. Those people we view as being lucky are people who did things to increase the chances that they would be able to take advantage of the opportunities that present themselves.
Go out and create some luck for yourself, as Mark Deo likes to say, “It’s about increasing the chances of success while decreasing the probability of failure.” Figure out what the best play is based on the chips and cards you have, and make them work for you.
Don’t be afraid of risk. To not take a risk is to risk being ignored. “Destiny is not a matter of chance, it is a matter of choice. It’s not a thing to be waited for, it’s a thing to be achieved.” Let’s go from a “risk aversion” business culture to a risk sharing and reward innovation culture.
In short, risk-taking is as much a part of good management as smart product development, effective marketing and strong leadership.
I hope that this “Business Update” has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email
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The Death of Corporate America

Remember the old days?

Our fathers and grandfathers worked for the same company for 20, 30 or even 40 years. Generations of sons and daughters toiling under the protective arms of the “COMPANY.” 

Today it’s more likely that we will outlive any organization that we work for. 

It has snuck up on us. We turned our head and all of a sudden Corporate America is dying. 

It is the result of a powerful force that has emerged in our society. Not a company or a new technology or even a new industry. It is the evolution of workers themselves. For the first time in history, there are more workers operating as “free agents” than there are people working for Corporate America. Fortune 500 companies no longer form the bedrock of our workforce. 

How Has This Happened?
This evolution has been rapid and decisive. It has occurred for a number of reasons. First, the social contract of job security has long been broken. Jobs are no longer sacrosanct at Fortune 500 companies. One day these firms are in expansion mode and the next they’re “laying off” 35,000 workers. Second, e-commerce and automation technologies have leveled the playing field so that smaller companies with less people could provide the same benefits as larger multi-national firms. This resulted in corporate re-structuring and downsizing. And finally the loyalty/security pact of the previous five decades has been broken. This was evidenced in the mid nineties when IBM broke it’s “full employment policy” by reducing it’s payroll by a whopping 120,000 employees. In this century, being loyal to a company does not guarantee job security.

What Does The Future Hold?
Today the largest private employer in America is not Ford, General Motors, or even Microsoft. It’s Milwaukee’s Manpower Inc., a temporary help agency with over 1,100 office throughout the United States employing over a million workers. Temporary staffing has grown from a $1 billion industry to more than $80 billion while employing over ten million temps nationwide. It is estimated that there are over 33 million solo, self-employed workers. And there is an emergence of a new category called micro businesses. These are small businesses employing just 2 or 3 people to drive particular initiatives on either a full or part time basis. In fact, more than half of today’s companies have fewer than 5 employees! Don’t look to our government to reconcile this societal evolution. They’re a full century behind. The Bureau of Labor and Statistics still divides all workers into two categories: farm and “non-farm.” Figure that out. 

What Free Agents Love
The work ethic of free agent entrepreneurs is considerably different than corporate employees. These entrepreneurs crave, freedom, control, security, and loyalty. If you think about it, these are the very job benefits lacking in Corporate America. Today free agents come in a variety of forms, entrepreneurs, independent contractors, consultants, advisors, 1099ers, hired guns, nomads, etc. But their focus is on producing a measurable result for an organization rather than performing a specific role within it. Free agents tend to provide a higher return on investment for organizations because of their accountability to themselves rather than to a hierarchy.

Freedom is the ability to exercise one’s own will. Within the corporate cocoon freedom takes on the meaning that the company as a whole projects. Some companies smother their employees in affection others try to purchase individual freedom with stock options and incentives. Free agents can choose to follow their own work ethic. This extends not only to what they believe, what they do and where they do it but also WHEN they do it. Free agents have succeeded in melding work time with home time. Gone is the Monday through Friday 9am to 5pm ritual. Today they balance a full time home life with a full time work life.

Life in Corporate America is about lining up behind the company culture and philosophy. Free agents can control their own destiny. Consequently they develop skills in areas which they desire to excel. They build relationships with those that match their business culture and paradigm. They focus on selling insight, talent, expertise, ideas, creativity and solutions rather than just performing tasks. They realize that what matters in the course of a day is what is accomplished not how many hours are worked.

The last decade has been one of prosperity. Members of Corporate America had job security but that prospect is diminishing. While a high standard of living has reached deep into middle class many members of Corporate America do not feel that their lives have improved. This dichotomy has altered our expectations of comfort and prosperity. People are looking forward to more than just a comfortable retirement after four or five decades of “work.” People are realizing that it’s not good enough to work to make money and survive. They desire to work to make meaning for themselves and their families. 

With free agents loyalty does not run up and down an organizational chart. It runs from side-to-side in allegiance to clients, colleagues, teams, projects, vendors and industries. In this sense free agents are far more loyal than company men and women. Companies can also afford to be more loyal to free agents because they lack the overhead that employees bring. Both benefit from the free agent structure because whereas vertical loyalty within an organization depended on one connection (boss and employee) this new horizontal loyalty depends on many connections.

How It Impacts YOU!
In the end I believe that we will see the free agent philosophy infiltrate every industry, profession and area of expertise. Those that are most prepared for this transition will benefit the greatest. Think about your own business. How could you use the “free agent mentality” to bring efficiencies to your business? If you’re an employer, how could you increase productivity and reduce overhead by employing free agents? If you’re an employee, how could you deliver greater production to your employer and increase your earning capacity by utilizing the above free agent infrastructure?

Failing to Fail

Are you doing the same things you did a year ago? Are you doing things the same WAY you did them a year ago? If so you’re bound to fail. Not that failure is bad mind you. The sooner you fail in fact, the better off you’ll be. So raise a glass with me and let’s toast all of our failures past, present and future! Ahhhh drink deep. Now wasn’t that thirst quenching? No?

Let’s face it, our culture doesn’t reward failure. We condemn it. Our condemnation is so prolific that most folks do whatever they can NOT to fail. They shudder to even speak of a failure to associates. They train themselves in fact to not even THINK about failing. It’s not an option! We walk around telling everyone who will listen to us about all of the great successful things we have accomplished in our lives. We have convinced ourselves that we must continue to succeed and more so, that we must become innovators.

Innovate or Die 
In fact innovation has become kind of a buzz-word in our society. We hear, “innovate or die.” What about “innovate AND die?” All the excitement about all things new has obscured the fact that most new ideas fail while most old ideas are still with us. With hundreds of breakfast cereals introduced every year how could it be that Cheerios and Wheaties still outsell them all? Why are Beanie Babies a faint memory yet Play-Doh is still a best seller? Evolution? Survival of the fittest? Maybe.Is there a way to combine innovation with proven methods? We’re all familiar with the old Rudyard Kipling quote: “the definition of insanity is doing the same thing the same way time after time and expecting a different result.” In this shrinking economy, it stands to reason that we need to do things differently. We all know we have to get creative, but how? How can we harness our creativity to create success rather than failure? Or better yet how can we train ourselves to endure our failures yet remain focused on the hope of a successful outcome?Not Creativity but Productivity 
The truth is that creativity is less about wild talent and more about productivity. To find a few ideas that work you need to try a lot that don’t. Successful people don’t have a higher success rate. They just do more and they do a range of DIFFERENT things. Research shows that the success of individual geniuses like Mozart, Shakespeare, Picasso, Einstein, and Darwin himself, is best understood from an evolutionary perspective, where excellence results from “a range of differences.” These famous creators generated a wider range of ideas and completed more products than their contemporaries. They also followed proven methods in order to accomplish them. They didn’t succeed at a higher rate than others. They simply did more. So they had both more successes and more failures.An Example 
A similar philosophy helps explain the success of Capital One, which has been called the most innovative credit-card company in the world. Just a few years ago, all credit cards were pretty much the same; you could have whatever you wanted as long it cost $20 per year and had an interest rate of 19.8 percent! Capital One has been the leader in offering thousands of different credit cards, with varying rates, and limits, which are targeted at people with different beliefs, hobbies, and affiliations: “They tinkered with credit lines, mileage awards, with the design of the cards, and with the color of the envelopes of their mailings. They tried different ways of retaining customers and pursuing deadbeats. Essentially they made Capital One an endless experiment.” The company tried about 45,000 experiments in the year 2000, for example. Capital One has succeeded by targeting smaller and smaller audiences for these experiments, like a “platinum MasterCard for middle-income hikers who drive Saturn automobiles.” Most of these ideas fail, but the constant experimentation with one variant after another, and constant learning, are big reasons why Capital One has over 30 million credit-card accounts.Repackaging the Old 
The other thing about innovation and creativity is that success is not usually the result of totally new ideas as it is the repackaging of old ideas in new ways, places and combinations. IDEO which is probably one of the most innovative companies in the world, has developed more than 4,000 products for firms in all kinds of industries. Their designers are constantly mixing and matching technologies to produce creative new solutions. One IDEO development group got the idea to create a “slit valve” for a bicycle water bottle out of a heart valve that was made for a medical products company. Henry David Thoreau said, “The question is not what you look at, but what you see.” When you look at your product or service offerings what do you see? What do your customers see? Better yet what should they see?Challenge Accepted Practices 
Often times ideas that are born from this kind of haphazard creativity are diametrically opposed to “accepted” practices. Entrepreneurs start new companies partly because they are purported to be more innovative, free from the pressures in established firms to follow ingrained precedents. Yet entrepreneurs can fall prey to ingrained habits just like managers in big firms. Don’t be afraid to challenge accepted practices. I’m not talking about a free-for-all but rather controlled experimentation in order to cultivate innovation. Some of the greatest inventions in the world were a result of an extra component here and there pieced together. Thomas Edison said, “To invent, you need a good imagination and a pile of junk.”Here’s some advice that will help to promote creativity and innovation:

  1. Expose yourself to new ideas. Increase the variance of your available knowledge. Study other industries that face the kind of challenges you face.
  2. See old things in new ways. Don’t just get OUT of the box. Walk around it. Look at the top. Don’t be afraid to pick it up and look at the bottom.
  3. Break from the past. Stop talking about your past successes and hoping the history will repeat itself. We stand in a new place today a place we have never been and will never be again.
  4. Understand that creativity as all about productivity. Be willing to turn the focus to more rather than better at times.
  5. Embrace failures. Reward failures. Plan to fail – knowing that success in just one more failure away.
  6. Challenge accepted practices. Become a tinkerer.

Play with these ideas in your mind and experiment with a few in your company. Treat them like toys that you might buy to mess around with: Try to break them, try to take apart the pieces to see how they work, try to improve them, and mix them (or parts of them) with your other toys. I offer these ideas not as immutable truths, but as methods that have helped other companies produce beautiful and profitable mutations, and that just might help your company as well.