7 Ways to Stop Wasting Time

Is your business focused on your Value Proposition?

How much of your business activity is focused around adding value to your clients – i.e delivering your value proposition. The base logic behind  Kaizen is removing waste, while optimising value to your clients.

Prior to commencing the valuable process of eliminating waste I suggest getting great clarity around your core value proposition and what target market you are taking on as well as your strategy to maximise it.

Kaizen or “Lean” has been popular in large business for some years now. Most of the evangelists like John Cook from Stainless Design in Waikato all come from the larger end of SME or big corporates.   After attending an inspirational seminar with Julie Hazelhurst (Kaizen guru), she has got me thinking about the implications of this thinking to the smaller end of SME.

Waste (Muda) comes in 7 forms

  • Motion – people movement, searching
  • Waiting – stalled customer processes
  • Transport – Information and material
  • Storage – Information and material
  • Defects – rework
  • Over producing – doing more than client pays for
  • Over processing – over engineering, more precision

Julie’s premise was “if you’re running short on time and money in your business perhaps you should tackle your waste first and maximise the value out of your talent in your team, before looking at taking on more staff”. She took us through the basic process of mapping your internal value chain and observing the “waste” processes  typically interleaved with the activities that your client values.

Its interesting that in Business Dominoes we use a similar focus on value chains to spot new market opportunities and strategic alliance partners outside the business, where Kaizen uses the internal value chain to focus process improvement.

7 common waste areas that I continually see SME’s wasting time on:

  1. Potential & current clients not in your target market Get clear about what is and isn’t an ideal profitable customer. Create a bullet list of their characteristics : eg revenue, location, ability to “get” your value etc
  2. Distractions of activities off “piste” Get clear about your business competencies and larger goals, then “stick to your knitting”. Too many businesses never achieve anything because their visionary leader is always chasing the next big idea. Put some structure around your business and then say NO to stuff that will not achieve your goal.
  3. Poor performing staff. Failure to deal with non performing staff will scare off the bets performers. Despite the hassles of our employment law – act now.
  4. Over engineering products and services, rather than selling Get the balance between engineering and marketing spend right. Know when you have that minimum viable product and then go sell, sell, sell. Craftsmen are never satisfied and continue to tinker with the machine when they should be bringing in revenue. If you have zero sales stop everything and validate your market before progressing.
  5. False economy of not having or having  a low performing professional service providers  Get some great outside help to challenge you on your big decisions and to have a shoulder to cry on as well as celebrate success with. If you have zero budget start with a fellow entrepreneur and meet them for a coffee once a fortnight.
  6. Inefficient accounting systems If you are not using auto bank feeds to avoid entering transactions – try Xero with bank feeds –use bank accounts that auto feed transactions into your accounting system -link your credit card as well. Learn how to do your own GST return, it takes minutes and you get a  great check point on your business.
  7. Outdated IT systems If technology is not helping your business you are doing it wrong – get a new IT supplier.  If you have less than 50 staff throw out your email server and replace it with office 365 (a great cloud computing service). Share electronic contacts and calendars around your organisation and embrace smartphone technology.

What’s your biggest area of waste?

Add a comment below with the big saving areas that you have made in your business.

Redefining – employee commitment and work life balance

Pigs or chickens?

Too many employee’s have an entitlement attitude and its killing business owners – who’s fault is that the employee or employer?

The employee owner – divide is a constant challenge for business owners. How do you motivate your employees to go the extra mile and behave more like owners? Mastering the art of people leadership, is the toughest of all talents a business leader must acquire if they are to be successful and not die of a heart attack due to “staff issues”

Owners and employees are as different as the pig and the chicken in the “bacon and eggs” business – the pigs are committed and the chickens are involved.

Are your staff pigs or chickens?

 One of my biggest observations after working with business owners is that most people have never worked for an “inspirational leader” or in a “high performing team”.  As such they have no role models or experiences to reference to, or emulate.

 Are you an Inspirational leader and do you have a high performing team?

Yes we need to recognise that employees will never behave exactly like owners mainly because they will never have as much on the line as owners do but …

as business owners it is our role to lead and develop a culture where we can get the best out of people.

Too often I hear business owners complain about the performance of staff, in particular well-paid senior staff, yet as leaders they have not been clear and upfront with what they expect from their staff.

In my blog post on Daniel Pinks – book Drive I referenced one of his concepts that has stuck with me has been the concept of “pay people enough, to take money off the table as a motivator” and “replace it with purpose”.  Its we worth watching, RSA’s Daniel Pink Drive 10 minute video summary of the book– it is great at positioning money is not the best motivator.

A well-crafted BHAG (big hairy audacious goal) is a great way to clarify with your team the purpose. For tips on this read my BHAG blog post.

So lets set the record straight: what do we actually expect from our staff and in particular our staff paid more than $70K a year. My guess is to many people are being held ransom by their employees and are not clear enough on expectations.

 Redefining “work life balance”

One of my pet issues with “employee” logic as a opposed to “owner” logic is the distorted and biased view of work life balance.

I quote from the Department of Labour website – which typifies employee logic:

Work-life balance is about effectively managing the juggling act between paid work and other activities that are important to us – including spending time with family, taking part in sport and recreation, volunteering or undertaking further study.

Interesting all the examples on the DoL are about employees getting rather than giving.

Here is my redefined definition of work-life balance

Work-life balance is acknowledging that modern work and home life are integrated with each other and cannot be separated. 

It means: just as its ok to have time off to go watch your kids athletics, or bugger off early on a Friday to go on that Mountain bike trip with you mates, its ok to check you emails in the weekend, stay late at the office because we have a deadline.

It is not about clock watching and collating time in lieu, it’s about being part of many winning teams : at work, at our sport and  family – all simultaneously.

 Signing up staff to a new commitment contract 

How would your staff react if you asked them to sign up to a commitment pledge?

Commitment contract

I agree that I get:

  • Fair compensation for my contribution to the company?
  • An opportunity to share in the upside of the business? (profit share, bonus, promotions) 

 I commit to:

  • Being as passionate about work as my non-work life.
  • Not switching my phone or brain off as I leave the building:  So I am constantly thinking about how our business can be improved and do better , sharing my ideas with other team members
  • Spend company money as if it was my own
  • Not clog up our finance system with petty little expense claims (items less than $100) – noting it costs most organisations more than $100 to raise and settle an expense claim
  • Go the extra mile on a regular basis including doing extra hours over and above 40 hours per week

What else would you add ? …

Better ways to finance your business than investment

So you are short of working capital (cash) for you business:
Is getting an Angel Investor the best option? Most probably not.
Should you get investment ready – definitely!

In most cases, the act of preparing for investment will eliminate the need to raise money.  Companies that get investment typically will receive the capital to accelerate growth, not initiate it. 

Apart from having a realistic valuation expectation, being “investment ready” is simple, get clarity and focus around:

  • Product or service value proposition
  • Business model, strategy, and plans
  • Having something unique and defendable in your product offering
  • Building and maximising the productivity of your team, including governance
  • Have customers that buy stuff

There is no rocket science around all this, but I consistently see companies going to the market to talk to investors that do not have their act sorted. Equally so, they are attempting to do too many things with mediocre results.

Now for the reality – raising capital is slow and arduous process.  Typically it will take you six to 24 months before the money appears in the bank account and will consume at least 200 hours of your time.

Many businesses seeking capital will go bust before they get there and the more fragile their current position, the more likely it is they will not attract the capital.

Without a clear strategy and go-to market model, you are unlikely to find an investor.

So if Angel Investment is not the magic answer what is?

One of the issues of technicians starting businesses, apart from those raised in my e-myth blog post, is their lack of experience in structuring deals of any type, too often playing with price as the only negotiating tool.

Other options for funding growth include:

  • Selling more
  • Charging more for your product – what effect would there be by increasing your sales price by 30, 50 or 100%? In many cases increasing sales price will increase sales.
  • Establishing better sales channel partners – preferably ones that already have your target market as customers
  • Using customers as promoters of your product
  • Sharing promotion costs with distributors
  • Licensing deals
  • Structuring payment options eg. 50% deposit with order
  • Debt finance
  • Invoice factoring
  • Government grants – yes there are still some available

For those who are looking to get smarter around strategy and structuring their business for growth, Debbie Humphrey and I run a four day workshop called Business Dominoes to tackle this very issue.

Personas & Zero-Based Strategic Thinking

Incremental change is dangerous, particularly come planning time for your business. Left unchallenged you can suffer a slow death, or be taken out by a gorilla in your market. Here are two ways to break your normal incremental thinking.

Personas at the Boardroom Table:

What would Steve Jobs, Richard Branson, or John Key be saying in your strategy day if they were on the board of your company? This is the power of personas.

Edward de Bono first popularised this method with his “Six Thinking Hats”. User experience design people adopt a similar approach to ensuring real users can utilise modern software applications. There is a great article on “The Power of Personas” for user design in the MSDN Magazine.

Create some imaginary board members to your company, they come cheap, and give them a seat at your boardroom table. Then listen to what they would be saying if they were in the room.  To balance the big thinking of a Jobs or Branson, you may want someone else at your board table to balance out their big budget thinking.

If you are known to dream big, perhaps you need the conservative ‘black hat’ thinker at your table to question the reality of your plans.  This is a great way to break with conservative limited thinking, beliefs that exist in many boardrooms, whether your problem is not dreaming big enough or you need a hand break. Do not invite too many imaginary friends too frequently or your friends and family may think you are going nuts!


Zero-Based Thinking:

Accountants often refer to zero-based budgeting. This is the method of creating your budget from a clean sheet of paper, rather than simply modifying last year’s budget by X%.

The same goes for business planning: take the stance if you were starting your business over again, but with the resources and capabilities that you have now – what would you do? Invite your new board members (personas) to the table as well to help you with this exercise.

Test your BHAG

What is the uniting force in your business? Running and working in high growth companies is hard work and we are often losing sight of what we are all about.

Daniel Pink in his book Drive he outlined three core drivers for people: Autonomy, Mastery, and Purpose.  (Note:  For those who have not read this great book watch the 10 minute animated summary)

Nothing binds a business like a clear and succinct BHAG (Big Hairy Audacious Goal) and a clear purpose.  I am not talking about the traditional boring mission statements that lime the walls of corporate offices, full of: Corporate blah blah… typically lots of words taken from a corporate speak bingo competition.

What I am talking about is a mantra or Big Hairy Audacious Goal (BHAG) that is worth waking up for in the morning and going the extra mile.

Ingredients of BHAGs that work are:

  • Compelling and gripping: people understand straight away
  • Action orientated
  • Bold: bordering on arrogant and unattainable
  • Clear: who, what, where, by when
  • Types: target, common foe, role model, internal transformation
  • SUCCINCT: The power of message is inversely proportional to its length

Have a look at some of the founding BHAGs for some of industries great companies noting this is what they started with…

  • Microsoft: “A computer on every desk and in every home”
  • Amazon: “Every book, ever printed, in any language, all available in less than 60 seconds. Also: Earth’s most customer centric company”
  • Ford: “Democratize the automobile”  (1900’s)
  • Twitter:  “To become “the pulse” of the planet”
  • Giro Sport Design: “Become the Nike of the cycling industry”
  • Nike: “Crush Adidas” (1960’s)

Brian Gaynor spoke at Springboard this month citing “New Zealand  business owners, in comparison to Australian counterparts, lacked ambition”.  Check your BHAG against the above list. Do not fall into the trap of being another conservative Kiwi company without big ambition.

Here are a few ideas from local examples (note: not their actual BHAG)

  • Biomatters:  “Tools on every biologist’s desktop”
  • E-spatial : “THE location intelligence behind all major New Zealand enterprise solutions”
  • Sale finder: “New Zealand’s ultimate consumer research tool”

When it comes to purpose statements – these are just clear concise versions of your value proposition in the language of your clients. More on this later – a topic for another blog post.  In the meantime, you can read value propositions revisited, creating succinct messages, No value proposition = No business from old posts.

Example Purpose: Spike mail: “Building qualified and engaged buyers versus creating lists”  – note no reference to their core craft of email marketing.

Product Marketing – the missing discipline…

An effective Product Marketing team is most probably the best insurance policy for any new venture.   For a trading company the Sales team and CEO’s all have tunnel vision on next quarter’s revenue.  The role of product marketing is to build next year’s revenue and ensure that any investment in product development produces a measurable return. 

The finite definition of product marketing’s function is variable, but it unanimously does include the full range of marketing activities, rather than just promotion activities. Noting that for too many business people, marketing is just a promotion activity.

Key activities of pure product marketing that are often absent in businesses include:

  • Assessment and validation of marketsWill someone actually buy this product once it is created?
  • Access to channels to marketsmart go-to market strategies and distribution agreements that are workable and will not conflict with potential company exit strategies.
  • Return on Investmentworking out if this is the best use of the company’s capital and when and how will it get a return.
  • Development of effective sales collateral and messaging – that communicates what is relevant to customers, rather than a feature or technology list.

Check your company’s marketing activities against this great list from www.pragmaticmarketing.com

This is one area we have a lot to learn from American technology companies. New Zealand technology companies often make the first move of appointing product managers, to manage product road maps, product requirements definitions, and act as the referee between sales and development teams.

My suggestion following on from my recent  Rule of 10’s post is, at the very least, budget an equivalent amount of money in the complete list of marketing activities as you do in product development. Likewise, balance your marketing spend between strategic and tactical activities.

I would encourage CEO’s of companies, Crown Research Institutes and universities to explore this missing discipline. I would also welcome the Ministry of Science and Innovation to begin to invest in this crucial area of commercialisation, rather than just the science part.

Don’t spend all your money on development

The process of selling costs and it takes time…
A company without sales and a go-to market plan is a science project, not a business.

It blows me away every time I come across yet another business that has a product all finished, patents applied for, accounts done, but no go-to market strategy or any sales to speak of – AND NO CASH LEFT.

Worst still, licensing deals that have not taken into consideration cash flow and go-to market issues – AND STILL NO CASH LEFT.

It disgusts me that all the lawyers and accounts that the business spent money with never encouraged the business to save some money for sales and market.

Whether it’s science, technology, or products, too many businesses are running at Death’s door, because they have failed to budget for and spend appropriately on marketing of their products.

 

Rule of 10’s

One of the most basic rules any new product based venture should take into consideration is the Rule of 10’s.  If it takes $1 to create a business concept, it will take $10 to build a product, $100 to market it, $1000 to build a brand, and $10,000 for an international brand.

Please make sure you have some time, energy, and money left for taking your product to market.

As an ex-engineer I get it guys, you want it finished and perfect before you go sell it – but get over yourselves, go sell vaporware. Trust me, the sales cycle will take 10 times as long as you think and cost you 10 times as much.

STOP spending on technology and products. START spending on marketing and sales NOW.  It appears that most professional out their patent attorneys, accountants and the like have no knowledge of product commercialisation – otherwise they would be advising businesses to save some cash for this crucial activity.

At very least, consider how you are going to sell and market your product and budget for it now.

9 Traits to Excite an Investor and Prosper…

Will your company get investor interest and, more importantly, will it prosper?

Too many companies I see pitching for investment pitch a product or a technology, not a company.  Fixing the product pitch is a relatively easy task in comparison to fixing the business pitch, mainly because most businesses don’t have a strategy or even a plan. Sorry, “build it and they will come” doesn’t count. 

Test your company against this list to see if you are investment ready:

  1. A product that we understand –  the problem and the solutionno matter how complex the science is behind your company, it must have a simple explanationof the problem you solve for customers and the value you give your customers and end users.
  2. Validated market demand for the productif it’s a new venture what third party proof do you have (eg. market research, etc) that people will buy your product at a price, you can make money from it. If it’s in the market already, excite us about your sales growth story.
  3. A trend driving increased demand – creating the “perfect storm” – what is going on in your target market that says this demand will continue and ideally increase?
  4. A sustainable competitive advantage how are you going to defend yourself against the competition when it wakes up?
  5. Clear, quantified metrics as to how the business makes moneyhow well defined is you business – finance model? Can you model your sales process (eg. x dollars spent on Google ad words = y dollars sales)? At least understand the financial model and your capacity constraints.
  6. A clear and easily communicated business plan/strategy – including go-to market –  a clear and concisestrategy and plan is a long way towards achieving greatness. Give us confidence you have a tangible way to reach customers and meet demand.
  7. An experienced teamNothing happens without a committed and well-equipped team. What relevant experience does your team have? Remember always employ people smarter than you.
  8. Clear return for investoris your valuation set at a point where the investor can actually make a return? Remember no exit plan = no investment.
  9. Fun people working on cool stufffun and cool mean different things to different people – but like pornography it is obvious when it is, or isn’t. 

I consistently see in the New Zealand market place, time and time again, businesses get caught up with the product, technology or science and are wasting their efforts because they failed to stop and look at the bigger picture of a full go-to market plan and strategy.

Debbie Humphrey and I have launched a new investment ready programme called Business Dominoes to help business owners both recognise this strategy gap and fill it. All of our clients from the first intake are raving about the transformation their business stimulated from this programme. Debbie and I believe you are expert at driving your company, you just need a hand as to where to drive to and who you should take with you.

Technician, Manager or Entrepreneur – E-Myth Revisited

Do you experience Exhilaration or Exhaustion daily?

What are you? Technician, Manager or Entrepreneur?

Too often people start businesses with great enthusiasm, then before you know it, the passion is gone and its just hard work.

Michael Gerber’s “The E-Myth Revisited” book makes the point that to be successful in business we need to be master juggler of three functions Technician, Manager and Entrepreneur.

  • Technicians – live in the present: Experts in doing stuff, craftsman at their trade. Their ethos is captured by the statement “you want it done right, do it yourself”.
  • Managerslive in the past: Pragmatic in nature, planning order, creating predictability
  • Entrepreneurs – live in the future:  They turn a trivial condition into exceptional opportunity, true visionaries and catalysts for change. They are focused on the bigger picture continually questioning the business and its place as opposed to operating it.

The E-myth refers to the Entrepreneurial Myth that businesses are started and lead by entrepreneurs, rather than the truth, most businesses fail because the founders are technicians. Their entrepreneurial traits only appearing for a small moment in time at inception, to be quickly replaced by the dominant behaviour of a technician.

The acts of a technician lead businesses, inevitably lead to what Gerber describes as “entrepreneurial seizure, that point when the business has enslaved the owner”.

 The classic sign or precursor to this “seizure” being when the technicians abdicate tasks they dislike or do not have skills in, rather than delegating. Typically this plays out as employing someone for a while to do all the stuff they dislike. Slowly they become disconnected from the business they started and after a while the new manager they employed gets pissed off and leaves them in the poo (poo being my technical word not Gerber’s).

 “Too many entrepreneurs start out with passion and drive, to only find themselves with a lousy job a few years later, working their butts off for little or no reward.”

 The e-Myth Revisited is a great read and is available on Kindle well worth an afternoon on your deck chair.

More wisdom from Gerber … “A mature business knows how it got to be where it is and what it must do to get where it wants to go”. Shifting from adolescence to maturity as a business usually coincides with a crisis or getting outside help, you choose.

 The fact that these technicians (craftsman) are not strategists or skilled in some basic business skills, is very evident in the NZ landscape.

 How do you balance the technician, manager and entrepreneur hats?

Coincidentally, or not, I have recently just re-enthused a couple of businesses owners, who had lost their way, just as Gerber describes in his book.

Fixing this type of dilemma takes two steps best done with outside help:

  1. The Awakening – some form of strategic review and tool kit, where you can see your business from the outside looking in.
  2. Getting Clarity around how to best take advantage of this new strategic view point with a new simple strategy and mode of operation that recaptures motivation, clear direction and business opportunity. Rather than doing lots of more technical stuff.

So for pragmatists – some tips:

  • Work on obsoleting yourself from your business – “if your business depends on you, you don’t own a business you own a job”
  • Be conscious of your natural tendencies or biases towards being a technician, manager or entrepreneur. Challenge yourself to perform the two roles you do not have a natural affinity for. When was the last time you revisited your strategy? Who are you being today?
  • Delegate don’t abdicate: Do not abdicate tasks that you should have accountability for e.g. finance just because you don’t like it or don’t understand it.  Can you lay your hands on an up to date (end of last month) P&L and balance sheet within the next 10 mins? If not you have abdicated.
  • Learn some more business skills to complement your skills so you can delegate with full knowledge and respect for specific technical skills specialists provide. E.g. basic finance is not hard to learn.

PS:  I am on the hunt for a final year student to come work part time at GMC AKL to help me “delegate” and grow GMC. Apply here

Oh and I would be remiss to not mention

Milestone Map-Plan

Need to communicate your business plan to attention deficit stakeholders? … or perhaps just get smart feedback on your plan.

Creating a one-page milestone map-plan on a chart is a great way to keep you, your team and advisors focused. With a small list of tactics and key measures you have a far greater chance of achieving your desired end result.

Many business growth strategies fall apart at the transition point between creating key strategic themes and establishing a set of measurable tactical tasks and goals.  Too many businesses end up with huge lists of tactics, most of which will only get token attention, with the end result being  the plan never being executed.

This technique will force you up front, to prioritise and rationalise your tactical list of things to do. The milestone map-plan is a great way to succinctly communicate your business plan both past, present and future to all stakeholders of your business. Particularly when you are seeking intelligent feedback and buy-in from potential investors and staff whose attention spans are limited.

A fictitious example of a web company is shown below to illustrate the technique. (click the chart image for larger view)

Tips on using the milestone map-plan:

  • Limit yourself to max of 10 milestones per year – prioritise the top 10 that will influence or measure success
  • Split your milestones across different functional areas.  Add rows to suit your business but make sure you include at least finance, market, process and people.
  • List the last 1-2 years to help provide flow
  • Include additional boxes on key risks and your competitor’s response, both historic and forecast.
  • Do not fill the chart with activities that will naturally happen unless they help with the understanding of the plan
  • This is not a product roadmap –list only major product releases/events
  • Put it up on the wall by your desk for daily review

The milestone map-plan is great for helping all staff members focus on tasks that will help you achieve your goals, as well as showing the dependencies of tasks.

If you find yourself or your staff overtime not executing tasks on the plan then its time to challenge the map-plan and test out whether “the plan is still relevant”. If not change the map-plan otherwise re prioritise your work.

Put your plan up for continual challenge with advisors and staff. Do not be afraid to throw it out when the environment changes. Do not fall into the trap of “the law of committees”

If a committee is allowed to discuss something long enough, it will inevitably vote to implement their idea, simply because so much work has already been done on it.”

If the plan is no good say so and do something about it.

Succinct visual tools like this and the business model canvas, create powerful discussions very quickly and maximise interaction time.
More importantly they increase the probability of success.