Why Management is Noble

Clayton ChristensenHarvard Business School’s Clayton Christensen teaches Fortune 100 companies and aspiring MBAs how to apply management and innovation theories to build stronger companies. But he also believes that these models can help people lead better lives.

In his now-famous article and book of the same title, “How will you measure your life?” he asserts among other things that the most powerful motivator isn’t money; it’s the opportunity to learn, to grow in responsibilities, and contribute. That’s why management, Christensen says, “…if practiced well, can be the noblest of occupations; no others offer as many ways to help people find those opportunities.”

A Great Idea vs. A Great Leader

Would you rather have access to the next great idea or access to a great leader with a mediocre idea?

Bill Draper, world renowned venture capitalist, was once asked this question, “When evaluating companies, do you pay more attention to the idea or the leader?”

Considering the intense focus by entrepreneurs and investors for the next big idea, I think Mr. Drapers answer is telling.

He explained, “The Leader. Even if a product is wrong, a great, visionary leader will come up with another idea. During a presentation, I keep my eye on the top person, looking at how he interacts with his team, if he understands his audience, if he is the least bit unsure, or if he lacks information he should have had. Most of all, I am looking for judgment. Why did he make certain choices in life?”

Perhaps entrepreneurs should focus on leadership skills, sound judgment, and excellent decision making as their first priority. Then, and only then, does trying to find the next Great-Idea become a worthwhile endeavor.

The Catalyst for Entrepreneurial Success

Catalyst2There’s an infinite number of great ideas out there. Millions of people have big financial hopes and dreams. There are a lot of people who can talk about their concept or idea with great conviction and enthusiasm—or about how they could improve an entire industry with their unique insight and experience.

But for all of the millions of ideas, concepts, and plans only a small number of them ever materialize.

Consider two of the most vital ingredients of any business endeavor—in fact these ingredients apply to any worthwhile objective that we choose to pursue.

The first is risk and the second is persistence. They’re the catalyst for entrepreneurial success.

When I was a teenager I shaped and glassed my own surfboards. I became very familiar with the process of solidifying fiberglass using a mixture of resin and catalyst. In order to create a bucket full of solution that would cover the entire surfboard, I would add several cups of standard marine resin and just about a tablespoon of catalyst. That tablespoon made all the difference—though just a small amount, it was the key ingredient that caused the entire mixture to eventually solidify into a hard fiberglass finish.

Risk and Persistence are solidifying ingredients, like catalyst, that will help any great plan actually come to life.

The trouble though, is that many people are either paralyzed by the potential costs of taking risks and choose to avoid something potentially great altogether, or after taking a risk lack the patience and tenacity, the Persistence, that’s required to see something to the finish line. In a sense, they throw in the towel prematurely.

To rise above the sea of great ideas that remain just as they are, take risks and be persistent. It’s a proven recipe for success.

Small Giants: Companies That Choose to Be Great Instead of Big

Small GiantsWhen you think of a business, the image that typically comes to mind is an enterprise existing for the purpose of profit – and the more profit the better.

That’s what capitalism is all about, right? The entrepreneurial dream of starting from nothing and making it big – like Ray Kroc did with McDonald’s, or Michael Dell with Dell Computers.

That image makes a 180-degree turn in Bo Burlingham’s book, Small GiantsHe’s identified and analyzed 14 businesses that “Choose to be Great Instead of Big.”

Burlingham has delivered a great read that takes us deep inside fourteen remarkable companies that have chosen to march to their own drummer. They include Anchor Brewing, the original microbrewer; CitiStorage Inc., the premier independent records-storage business; Clif Bar & Co., maker of organic energy bars and other nutrition foods; Righteous Babe Records, the record company founded by singer-songwriter Ani DiFranco; Union Square Hospitality Group, the company of restaurateur Danny Meyer; and Zingerman’s Community of Businesses, including the world-famous Zingerman’s Deli of Ann Arbor.

While doing research within these companies, Burlingham outlined The 7 Qualities of Small Giants that ran through all of the profiled companies:

  1. They consciously questioned the usual definitions of success and imagined different possibilities than the usual ones. This concept had surfaced in the world of professional businesses, such as CPAs, physicians, and architects, where people talk about having a profession rather than a job.
  2. The leaders had to overcome enormous pressures to take traditional paths to success. Often this meant rejecting outside capital and growth opportunities outside their usual geography.
  3. Each company has an extraordinarily intimate relationship with its local community in which it does business.
  4. Each company cultivated exceptionally intimate relationships with customers and suppliers based on personal contact, one-to-one interaction, and mutual commitment on delivering on promises.
  5. They had unusually intimate work places, which were in effect functional little communities that strove to address a broad range of their employee’s needs as human beings, creating an emotional, spiritual, and social, as well as the economic ones.
  6. This sample represents a broad variety of corporate structures and modes of governance that they have come up with to help them achieve their driving force.
  7. The passion that the leaders brought to what the company did—they loved the subject matter, whether it was music, safety, food, lighting, special effects, or constant torque hinges. They had deep emotional attachments to their business, and this deep emotional attachment extended, as mentioned earlier, to employees, vendors, customers, and their community.

Burlingham shows how the leaders of these small giants recognized the full range of choices they had about the type of company they could create. And he shows how we can all benefit by questioning the usual definitions of business success.

Guy Kawasaki’s Lessons on Becoming a Successful Entrepreneur

In a guest post for Sun Microsystems, thought-leader Guy Kawasaki spells out his 5 lessons of becoming a successful entrepreneur. His insight needs no introduction so let’s just get right to it:

  1. “Focus on cash flow”: Guy explains how P&L profitability is important, but that’s not specifically what pays the bills.  Cash on hand is what’s key. With cash you literally pay your employees, vendors, and all other overhead. Cash is king.
  2. “Make a little progress everyday”: Guy is suggesting the value of small steps…it’s no longer about major marketing campaigns.  Instead, the focus has turned toward closing another sale, focusing on a better product, and ensuring the website is just a little more user friendly.  These baby steps are essentially what’ll bring the big picture to life.
  3. “Try stuff”: He explains that luck happens only to those who try new things – not those who wait for things to happen.  Some people fail to act and pass up opportunities only to see someone else take them and run. You became an entrepreneur in part because it’s adventurous, so don’t forget to go out on a limb and experiment every once in a while.
  4. “Ignore schmexperts”: Sometimes our gut is screaming so loud that we can’t hear anything else.  When it does, listen to it and not those so called experts.  They’ll always say “I told you so” whether you succeed or fail. Your gut instinct is usually more reliable.
  5. “Never ask anyone to do something that you wouldn’t do”: Don’t ask your client, employee, or vendor to do something that you wouldn’t be willing to do yourself.  This includes the small stuff—if you aren’t willing to do it yourself when it makes sense, you won’t have the respect of those you lead.  Sometimes we forget that we are dealing with people with busy and active lives… treat everyone as equally as possible.

I’ve given a summary, but go get it from the horse’s mouth!

Read Guy’s original post here: Lessons of Becoming a Successful Entrepreneur

How’s Your Brain Power?

Ironically, most of us forget about our brain.

We work fanatically for a hard-body but largely ignore the fact that our brain needs exercise too.

As America ages, we’re finally seeing an increase in brain programs. There are even “head health” facilities cropping up that focus on increasing mental capacity and keeping our minds sharp.

Skeptical? Consider this, Do you ever want to say something but just can’t find the word? (I thought so.)

We all have some mental weaknesses. I exhibit mine at least 10 times a day.

Brain fitness is real. And the more fit you can keep your noodle, the more successful you will be in life, business, and anything else.

There are many new tools popping up to help increase your brain power. An example of this is “Brain Age” and “Brain Training” by Nintendo. Additionally, over the next several years you will see “brain gyms” popping up throughout the country.

But you really don’t need to buy a product or hit the brain gym to sharpen your skills.

Here are some brain exercises recommended by Dr. Lorne Label of the Brain Longevity Center:

  • Use your left hand, if you are right handed, for tasks such as placing a stamp on an envelope, writing, or combing your hair.
  • Name the letters of the alphabet but mix it up—by skipping every other letter (a, c, e, g); skipping every third letter (a, d, g) or, perhaps, starting from the end of the alphabet and skipping a letter (z, x, v)
  • Sweep your eyes across a room. Then spend the next few minutes recalling what you saw, where things were placed, the colors, etc.
  • Subtract 3 from 100; then continue to subtract 3s from each remaining number (100-3=97-3=94-3=91)
  • Pick a category, like food or animals. Then name an item in the category. Think of a second one that begins with the last letter of the previous item. (For example, hot dog, grape, egg.)

According to a five year study by the Journal of the American Medical Association, more than 2,000 adults showed that simple mental exercises improved cognitive skills.

Why am I delving into this today? It’s simple. Smart people experience more success than dummies!

Pay attention to your brainpower and work on simple ways to stay smart and get mentally fit.

I think I’ll work on a crossword puzzle today.

How to Sell a $1,000 Blender

Capturing the attention and dollars of your target audience is the “Holy Grail” of marketing. For decades eager marketers have produced goofy jingles, shocking images, and unique perspectives to make us stop, look, and listen.

Every once in awhile a marketing campaign works perfectly. It’s rare, but it can happen. Recently, I found myself spending almost an hour glued to a marketing campaign. In fact, my three kids were huddled around with me staring at the monitor. We were a hypnotically captured audience. (Pathetic!)

Within 15 minutes my kids were pushing me to buy a thousand dollar blender. A thousand dollar blender? That’s ridiculous to consider. I mean, what, am I going to start the next great smoothie shop? I don’t think so. But I was still very tempted to purchase something I had no real need for and at a price that’s about 15 times the price of a similar product I could find at Target.

Effective marketing does a few things really well. The message connects with a highly targeted audience, it’s interesting and captivating (and the best ones are usually video), there’s compelling proof and credibility, and when done dynamically; these combine to create an almost irrational sense of urgency and need.

This is an excellent example of a campaign that gets these ingredients right. Take a look for yourself, but if I were you, I’d hide your credit card. www.willitblend.com

The Speed of Trust

I just finished reading The Speed of Trust, by Stephen M.R. Covey.

So much of what he covers is extremely relevant. Especially today.

In times of uncertainty it’s much more difficult for people to hide under the radar or just “skate by.”

Whether in a job, running a company, looking for new work, or starting a new business, those we deal with have a heightened awareness of what’s going on around them. Who can they trust? Who are the most valuable players? Who’s for real? Who’s genuine?

In times like these, one of the best ways to stand out in the crowd and rise to the top of the ladder is to have a solid, trustworthy reputation.

Those who are trusted have a massive advantage.

Covey explains it this way:

“There is one thing, if removed, will destroy the most powerful government, the most successful business, the most thriving economy, the most influential leadership, the greatest friendship, the strongest character, the deepest love.

“On the other hand, if developed and leveraged, that one thing has the potential to create unparalleled success and prosperity in every dimension of life. Yet, it is the least understood, most neglected, and most underestimated possibility of our time…that one thing is trust.”

“Trust under-girds and affects the quality of every relationship, every communication, every work project, every business venture, every effort in which we are engaged. It changes the quality of every present moment and alters the trajectory and outcome of every future moment of our lives–both personally and professionally.

“While corporate scandals, terrorist threats, office politics, and broken relationships have created low trust on almost every front, I contend that the ability to establish, grow, extend and restore trust is not only vital to our personal and interpersonal well-being; it is the key leadership competency of the new global economy.

“I am also convinced that in every situation, nothing is as fast as the speed of trust. And, contrary to popular belief, trust is something you can do something about. In fact, you can get good at creating it!”

Mr. Covey’s message is powerful for two reasons. First, it’s simply an enlightened and timely truth (and his book goes on to explain exactly how trust can be built and restored). Second, I’m imperfect and have broken trust at times. So, knowing that trust can be restored, even rapidly, is encouraging to me as a leader and as an individual.

Are your to be trusted?

Venture Capital Screw-Ups

Seasoned business-builders typically recoil at the prospect of facing any public exposure of their failures, and they certainly don’t report their own mistakes to the world. But Bessemer Venture Partners does just that. They actually report their “Anti-Portfolio”.

As someone who lives in the world of business, it’s refreshing to observe that even the best entrepreneurs and investors make the same mistakes I’ve made; missed opportunities, wrong assumptions, poor judgment, and lack of foresight. All necessary lessons on the road to success.

Thanks to BVP for showing some light-hearted humility on our behalf:

“Bessemer Venture Partners is perhaps the nation’s oldest venture capital firm, carrying on an unbroken practice of venture capital investing that stretches back to 1911. This long and storied history has afforded our firm an unparalleled number of opportunities to completely screw up.


We chose to decline the investments below, each of which we had the opportunity to invest in, and each of which later blossomed into a tremendously successful company.


Our reasons for passing on these investments varied. In some cases, we were making a conscious act of generosity to another, younger venture firm, down on their luck, whom we felt could really use a billion dollars in gains. In other cases, our partners had already run out of spaces on the year’s Schedule D and feared that another entry would require them to attach a separate sheet. Whatever the reason, we would like to honor these companies — our “anti-portfolio” — whose phenomenal success inspires us in our ongoing endeavors to build growing businesses. Or, to put it another way: if we had invested in any of these companies, we might not still be working:

Apple Computer
BVP had the opportunity to invest in pre-IPO secondary stock in Apple at a $60M valuation. BVP’s Neill Brownstein called it “outrageously expensive.”

eBay
“Stamps? Coins? Comic books? You’ve GOT to be kidding,” thought Cowan. “No-brainer pass.”

Federal Express
Incredibly, BVP passed on Federal Express seven times.

Google
Cowan’s college friend rented her garage to Sergey and Larry for their first year. In 1999 and 2000 she tried to introduce Cowan to “these two really smart Stanford students writing a search engine”. Students? A new search engine? In the most important moment ever for Bessemer’s anti-portfolio, Cowan asked her, “How can I get out of this house without going anywhere near your garage?”

Intel
BVP’s Pete Bancroft never quite settled on terms with Bob Noyce, who instead took venture financing from a guy named Arthur Rock.

Intuit
Along with every venture capitalist on Sand Hill Road, Neill Brownstein turned down Intuit founder Scott Cook. Scott managed to scrape together only $225K from friends, including HBS classmate and Sierra Ventures founder Peter Wendell, who personally invested $25K to get Scott off his back.

Lotus and Compaq
(formerly known as Gateway Computer)
Ben Rosen, one of the founders of Sevin Rosen, offered Felda Hardymon the chance to invest in both Lotus and Gateway Computer on the same day. Says Hardymon: “Lotus had just missed a payroll, and I was worried about the situation there. As for Gateway, I told him there was no real future in transportable computers since IBM could do it.”

Paypal
David Cowan passed on the Series A round. Rookie team, regulatory nightmare, and, 4 years later, a $1.5 billion acquisition by eBay.”