Would You Bet On It?

Avoiding These Dangers Can Save Your Business

"Seven Ways To Fail Big"

http://www.hbsp.harvard.edu/flatmm/hbrextras/200809/failbig/index.html

Adapted from "Seven Ways to Fail Big," the September 2008 Harvard Business Review article by Paul B. Carroll and Chunka Mui

As the economy continues to keep us guessing, it is even more critical that each move you make, makes sense! Watch the 10 minute seminar to get a brief overview.


~the GURU

Speaking of the 5 o'clock Shadow: Case Study

I find it ironic that a week after I write an entry about companies who believe they have a product that can save the world, yet no one buys it, I come across an article touching upon the issue.

As I was readying Inc. there was a case study on a similar situation. Is the Small Biz. Guru beginning to foresee the future? Anyways, here is the what transpired:

Bill Randle was a bank executive with an entrepreneur waiting to emerge. His software promised, "big savings, while also allowing banks to offer better service. They could give customers one easy place online in which to view all sorts of accounts, from checking to savings to mortgage and auto-loan balances. The product would also give banks a real-time unified view of balances, inflows, and outflows, which could help them make more informed lending and financing decisions throughout a day." (Salkever, Alex Inc. Magazine, pg 70)

The background information was that of a situation where banks were unable to adequately judge cash levels until the close of business. On top of that, it required tremendous labor time.

Mr. Randle left his executive job at the bank, purchased full control of the software, raised millions of dollars, and hired a CEO.

Yet, as the article mentions, the timing could not have been any worse. "Banks feared losing business online to upstarts... and were looking for ways to offer similar online services" As a result, R&D money was limited thanks to the Y2K scare! (Ahhhh, to think, two digits instead of four could have caused world chaos!) Add in the dot-com/Internet bubble choking and welcome economic "gloom."

So, needless to say, Bill laid off most of his work force, at one point he had 120 employees, he emptied all the way down to 10. It was at that point, he realized, maybe it was time to change market segments. Not too mention the over reliance on two main clients. What were to happen if one of these clients were to leave? Eek! Now, imagine 10 people trying to manage current accounts and bring in new business?!

As a result, Synoran (company name) decided to join in on the mess that is health care. Now, I will be the first to say my knowledge in health care is limited. All I know is that it is extremely expensive, no clear vision, and there is probably someone making a lot of money because of this chaos. The article's brief description of health care, "deal with a mass of incompatible computer networks among insurance companies, testing labs, third party plan administrators.." all that interact in a very secure environment.

But, there are 100s of IT companies in the mix as well.

So, the present situation today is:

Randle left with a skeleton crew, limited funds, no r&d resources, nor marketing.

Now let's do a little analyzing here:

Synoran thought they had struck gold. They had a product/service that could reduce costs, streamline processes, and take the load off of employee workload. But, timing is everything and they were off. Not only was timing off, it seems they expected for the product to sell itself. And we all know, you have to put in the sweat and tears to reach success... oh yea, and have a sales force.

A business needs employees knocking on company doors, making calls, building PR, and raising awareness in the communities. Unless a business is very well connected, building a foundation takes a lot of time. I have spent almost 10 months building my foundation and I feel that I am still a ways off and I'm glad. I am doing the grunt work, fortifying my long term success because that is what it all comes down to... long term success and have an invincible foundation. I do not give it to the short-term mumbo-jumbo.

Synoran is down to a skeleton crew, barely a sales force, no resources, and moving into an industry where the competition is so fierce and the time-line is so long a battle of attrition is the main factor. I love under dog stories and stories of businesses that went against all odds, but this may be much bigger than simply David vs. Goliath.

Good luck Synoran, good luck.

~the GURU

5 o'clock Shadow Part II

Going from Rugged to Clean-Cut

To refresh your memory

From the preceding post, I raised the point of pin-pointing areas where there may be a hole (inefficiency) either slowly or rapidly leaking water (resources) from the bucket (business).

As the talks and reports of the United States economy/recession continues, what were your findings? Aside from the fact that the "U.S. economy lost 80,000 jobs in March, the biggest drop in five years, as weakness in the labor market spread beyond housing and finance to engulf a broad swath of businesses. (EVANS, WSJ.com)" times like these can blow open parts of your business that are bleeding the business dry.

Now we can speculate as to who precisely is being laid off in certain industries, for example, the financial industry is being wiped clean compared to 2007's growth according to Tig Gilliam, chief executive of temporary-employment company Adecco Group North America. (I won't touch the fact that we're laying off thousands of analysts and yet paying and awarding the CEOs with millions of dollars for doing so well... isn't this an oxymoron?)

But, back to the 5 o'clock shadow. Where are bottlenecks occurring in your business?

Let's say your software/ intellectual property is your bread and butter. It can save companies thousands, if not millions of dollars, and it has been available for a couple years now, yet, sales are lacking. These software "Gurus" (SGs) know everything about developing the product and making it work. However, the SGs are not strong in sales. They are awkward around consumers and do not exude confidence. Thus, the expense of having these developers is hurting your business, despire their skills Ladies and gentlemen, the leak in your bucket is weak sales force.

In this day and age, you could have a product that does everything and reduces cost or boosts profitability, but if customers do not know about it, they will not find it nor know what it does. You have to have a sales force / marketing team. That means investing in salesmen to make the cold-calls, developing advertisements, and targeting a market segment to hone-in on. Your programmers are, well, programmers. They build it and fine-tune, they do not sell it. A prime example is this AT&T commercial about a beer brewery. There is the brew-master and then the salesman.

The next example of a potential leak is so simple, it is almost embarrassing that people do not realize the potential savings.... inter-office call transfer or auto-mated attendants. Do you have a receptionist or a couple receptionists who answer the phones all day, update company records, manage appointment books, organize business newsletters, or relay information around to all the divisions. As your business continues to grow, usually, your call volume increases as well. The poor receptionists are already stretched so thin, add in the increased call volume and we may have some cases of insanity approaching.

As the call volume increases, the receptionists jot down the message from the clients and then have to walk / re-dial the proper party and inform them of the message. That takes time. Time away from the million other tasks they have and time is money.

Enter the PHONE SYSTEM! Imagine being able to transfer the calling-party directly to the individual or their voicemail? The receptionist hits two buttons and she's done and back to work, focusing on the other tasks. It is all about efficiency and time-savers. Another way to fill-in the leaky hole. Or, if you choose to have an automated attendant, she only answers the phone when she is requested.

So, I briefly illuminated two potential hindrances. Nothing too in-depth, but something to think about.

Let me know some issues your business faces and see where we can attack them!

At the end of the day, you can either settle for the shadow or you can shave again.


~the GURU
(changed my signature... tell the difference?!)

What's Your Company's "5 O'Clock Shadow"?

Not even a Gillette Fusion can prevent it....

This is a two part entry. First, I need you all to take a couple days and think about your business. Hopefully, you know what you do well and what your SCA (sustainable competitive advantage) is and you are taking full advantage of it. As a result, your reaping the benefits of doing something better than your competitors, but how long do you think your SCA will last? Think about it?

Is it with your people?

Your software?

Your location?

First Mover Advantage?

Market Niche? Etc etc.

However, the businesses that truly know what they excel at spend more time focusing on what they need to work on / could do better or, as some say, fix "the hole in the bucket." Where are you efforts not holding water or not doing as well as you hope?

Business practices seem to be great early, but as the days/months go on, the shadow starts to emerge and your business is not as smooth anymore... What begins to itch? While the rugged look may look great on mountain men, they are not your business.

Please take a couple days and think about it. Be honest with yourself. This will help identify your next steps... Stay tuned.

~The GURU