Straight Talking Strategy – Rockefeller Habits

“Mastering the Rockefeller Habits – What you must do to increase value of your growing firm” by Verne Harnish was referred to me by an entrepreneur who thought it was my style of book: pragmatic, full of useful tips and to the point. He was on the money, in fact I found the book addictive – I could not put it down. For me it went well beyond the promise of another one page business plan template to consider, its goes on my top 10 must read business books list.

What I liked was the way Verne brings business strategy and plans back to simple lists, questions and statement. Below I have given you a taste of what is in this great read.

The right things model – 3 basic decisions Executives need to make:

  1. Do we have the right people?
  2. Are we doing the right things
  3. Are we doing those three things right?

Base Strategy:

Let’s face it, business is basically the act of Getting, Keeping and Growing – Customers, Staff and Shareholders and we get better at this when we sell stuff, make or buy stuff and measure stuff.

Verne has simplified all business strategy into two dimensions best illustrated with the diagram below.

Often in business we can make things more complex than we need to. Verne’s one page business plan and measurement framework is well worth exploring.

Note: you can download a word version of Verne’s one page plan from www.gazelles.com.

For me it’s not necessarily the exact template as much as the principles behind concise “Succinct”  business plans and measurement models.

  1. A simple framework that documents your position
  2. Use of a common language to express the strategy
  3. Develop a habit of using the framework and a language to continually evaluate process. (Like the GMC guide to NO).

This one pager is a good mix of strategy, execution and measurement and complements the business model canvas and balanced score card approach I use.  My take is, you need to work with a model that works best for you, perhaps a hybrid of all of the above.

Verne also shares his philosophy on people and management – including effective use of meetings.

We have all heard people say they don’t need help; Verne says it all “if your staff do not have bottlenecks, then more than likely they aren’t doing anything at all”. As a manager always find out your teams top 3 -5 bottlenecks, remember that it’s your job to clear those.

On KPI’s he also follows the “keep your KPI list small” model, he sights one CEO who had three critical numbers engraved on watches that he handed out to his execs’

Having worked with a number of high growth companies I have come to realise that high growth companies operate with a different measure of time and pace. Verne confirmed this with the statement:

“If you’re growing at 20-100% per year – think of each quarter as if it were a year”

Oh and the link to “Rockefeller”…. well to be honest, you’ll need to read the book for this, for me it got lost in all the great gems I took from the book on how to help companies grow fast.

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Why do business people speak like idiots?

Before you hit send on that next memo, or deliver that speech or announcement to your staff, or write that next PR release – check for bullshit!

Ok look at your last piece of prose: did you include any of these words “Best of breed, centre of excellence, paradigm shift, results driven, socialise”?

Fear and Peer pressure it seems is the main cause for most business people to use this strange version of the English language.

I have just finished reading “Why business people speak like idiots” a book authored by Brian Fugere, Chelsea Hardaway & Jon Warshawskey.

Whether it’s memos that say nothing, sloppy boring presentations or jargon overload these guys take the knife to all of it. Their take is: this predictable-PC dialect, the business world has fallen into is a waste of time. Hell, we’ve become immune to these empty, generic messages. And as a result no one really listens any more.

The worst enemy of all – CUT PASTE and BLOAT – be careful with that next power point you prepare and how you use these features. Templates kill the message, and cut and pasted templated messages are the worst.

A couple of my favourite tips were reiterated in this book:

  • Stand for something – avoid the curse anonymity – staying low may keep you safe but will not help you get noticed and achieve stuff
  • People love imperfection – ums and ah’s are ok. Overly scripted messages fail. Check out my Rework blog post- “no one likes plastic flowers”
  • Avoid the tedium trap – boring, boring, boring – spice thinks up
  • Stories work – tell a story about a customer or something relevant to your topic – people get it.

Theory vs Story telling:
Brian and team give a great comparison as to the world’s acceptance of storytelling versus theory. Compare the book sales numbers on the two books on transformational change below.

  • “Leading change” by John P Cotter – 210,000 copies sold 2003 – Theory
  • “Who moved my cheese” by Spenser Johnson – 14 Million copies sold 2003  – Story

More Tips from this entertaining and informative book:

  • Short presentations pack punch – straight talkers get more credit
  • Short sentences are more memorable
  • One syllable words build momentum – big words don’t impress
  • Bull has an aroma – and it isn’t exactly channel 5. Say it as it is – if its bad news front up to it and take ownership
  • Avoid the obscurity trap – don’t let fluff and verbosity get in the way of the real message
  • Avoid stupid generic photos or clip art

The good news is that it is not that hard to stand out from the pack, by just telling it as it is and using simple words.

Check out Winston Churchill’s famous speech to the House of Commons June 4 1940, below.

“We shall go on to the end, we shall fight in France,
we shall fight on the seas and oceans,
we shall fight with growing confidence and growing strength in the air, we shall defend our Island, whatever the cost may be,
we shall fight on the beaches,
we shall fight on the landing grounds,
we shall fight in the fields and in the streets,
we shall fight in the hills;
we shall never surrender”

How many big words does Winston use ? 

If you are after a light read and are willing to join the no bullshit movement get your hands on a copy.
Thanks for the book Motive8 team – a great read.

Forget Motivating Staff With Incentives – Pink Drive Review

Are your staff on board or not?   Do a quick test – sit back and listen to how your staff talk about your company. Is it  in terms of “we” or “they” – this is a good barometer as to whether you have engaged your staff or are controlling them.

The old days of control, carrots and stick have gone – they simply do not work. In fact research shows giving people extra rewards for work is not a way to motivate them in the long run. It works the first time, then they expect it and when it doesn’t come they get de-motivated.

I drew a parallel for you cyclists out there, it’s like eating chocolate on a long hard ride, a great sugar rush  that is followed by a crash in energy.

This is not to ignore a basic “baseline reward” (remuneration) that people get for doing their job. But we need to hunt down how we inspire the inner drive in people.

Enter the new age of autonomy, mastery and purpose…

I have just spent the weekend reading Daniel Pink’s Drive – the surprising truth about what motivates us.  Many of the business owners I deal with, are often faced with the thought “how do I get that extra drive out of staff?”

Pink questions the age-old management philosophy of carrot and stick. He provides some great scientific examples of how people behave or more importantly how traditional management approaches simply do not work. “So here we have a major mismatch between what science knows and how business behaves”.  I drew a parallel for you cyclists out there, it’s like eating chocolate on a long hard ride, great sugar rush that is followed by a crash in energy.

Pink presents an evolutionary approach to how people are motivated – i.e we have lived in two worlds and are about to join a third. Motivation 1.0 – world of basic survival, Motivation 2.0 based on fact that humans respond to rewards and punishments and now we have entered the world of 3.0 – Motivation 3.0  is based on the theory that humans have a third drive – to learn, to create, and to better the world. For me it was like the next step from the Maslow’s hierarchy theory. By the way like DOS motivation 1.0 and 2.0 are no longer supported!

Pink advocates that we need to focus more on unleashing the inner drive – that place we get to when we are doing thing that we enjoy and have purpose – that state of flow.

What he advocates is that we need to create an environment of:

  • Autonomy – the desire to direct our own lives
  • Mastery – the desire to get better at something that matters
  • Purpose – the yearning to do something in the service of something larger than ourselves

In practise, we need to find ways to let people harness what matters to them, rathing than ordering creation or fun!

To spark creativity in teams Atlasian ran FedEx Days – like Fedex they had to deliver something overnight. So all the staff were given complete freedom to work on anything they liked as long as it delivered something finished the next day. After initial trials Atlasian now give staff freedom to spend 20% of their time on stuff that is not part of their normal tasked job.

The book suggest caning those “fun off sites” and replace them with “fed Ex days” hell most people like what they do let them “create” with their skills. An interesting example was given – Artist’s best works are never the commissioned ones. Another interesting point is that generally people waste at least 10% of their working day anyway.

Gmail and google news, all came about by giving staff free creativity time.

Drive is one of those books that doesn’t give you the answers, as much as it inspires you to rethink your world both from a personal and business perspective.

Questions that came to me reading Pink’s Drive were:

  •  Do you earn your money from a job or your vocation?
  • How much of your time are you operating in your flow zone?
  • What are you doing in your business to ensure you are creating flow, unleashing the inner drive in your people, rather than using carrots and sticks?

So my verdict … not good enough to topple a book of  my  top 5 book  list.  Why, too slow to start and not enough practical takeaways, but certainly a great thought provoking book just the same.

Thanks Simon for putting the link to this video in comments on this post

If you are  looking at how to best capture human capital for your business then get a copy. Bottom line it has changed the way I think, I sense as I reflect on it I may change my rating.

post ed note: It definitely rates in my top 10 books, although post Simon connecting me to the video I actually recommend people watch the great RSA animates video version of the book. Now posted above.

Running Lean – Business Canvas Variant

Running Lean (e-book) attacks the problem of how to grow web start-ups.  Ash Maurya has taken my favourite business model tool “The Business Model Generation” and tweaked it to meet his need of web SaaS companies.  For me this book was almost two books in one, peppered with some great tips on going companies:
1)      A variant on the business model generation for SaaS companies– the Lean Canvas
2)      A form of the agile development process, adapted to web companies, integrating agile development, experience design and market validation.

The “lean canvas” section was of most interest to me and I finished feeling I wanted more,“perhaps the sign of a great book” – but worth the $19.95 all the same.

The Lean Canvas:

The lean canvas is an adaption of Alex Osterwalder’s  “Business Model Canvas” which he describes in his book: “Business Model Generation”. For those who are not aware of this methodology I would strongly suggest a read of my book review.
Ash dropped – partners, key activities, key resources and customer relationships and replaced them with Problem, Solution, Key Metrics and Unfair Advantage.

I empathise with the Steve Blank’s quote:
“Business Plan: a document investors make you write, that they don’t read”.

My advice to entrepreneurs is use a business model canvas to bait discussion and debate. Hell you may not even need as business plan.

One of the key advantages of this sort of technique is that can create several business models in one afternoon rather than taking months to perfect a business plan that is out of date. Ash recommends doing one canvas per customer segment.

I am a great fan of the business model canvas tool to speed up decision-making and the communication of business plans for both investors and staff.
Of the modifications made to the original plan – I most like the focus on “unfair advantage” and will add this into my own variant inspired by this technique.

An example of the tips that Ash has on start-ups:

  • If you’re going to charge for a SaaS do so from day one – Price is a key ingredient to your product test it early – if you need a new business model find out early.
  • There is an “I” on Vision – create a business model in isolation but then test it  and test it.
  • Plan A’s never work – so be ready to adapt and create plan B and C quick.
  • Focus on activities that generate results – don’t get distracted on long-term activities as many will become redundant as you adapt
  • Distinguish between users and customers – always splinter customers into smaller subgroups
  • 3 must have departments Design, Development and Marketing – all of equal importance
  • Getting investor funding is NOT market validation
  • Have staff meeting’s in most unproductive part of day – not first thing.

Development Model:

Ash’s development model is based around three iterative stages:

1)       Problem/Solution Fit : Do I have a problem worth solving?

  • Is it a must have – if you take the solution away will they mind
  • Can it be solved – feasible
  • Will they pay for it? If not who will?

2)       Product/ Market Fit : Have I built something people want?
3)       Scale: How do I accelerate growth

The book devotes the majority of its 200 odd pages to describing this model-process in detail.

Close, constant and controlled customer feedback is the main theme around which he builds his model to develop the product/service around similar minimum viable product (MVP) principle the 37Signals team describe in Rework. (read my review here)

If you are interested in using diagrams and visual models to speed up your business planning and improve your stakeholder communication I would suggest coming along to one of my business planning seminars .
Oh – yes have a read of this e-book along with “the business model generation” and also check out Ash’s Blog

Rework your perspective on growing companies

Jason Friend & David Heinemeier Hansson are founders of 37signals – home of products such as base camp, high rise and creators of the “Ruby on rails” revolution. The 37signal’s team created software products that are used by millions of people, by doing stuff different.  

They provide simple tools for people like them, with basic problems. They have not designed a product with more feature s than their competitors.  They focus on delivering fewer features, in a simpler and easier product to use.

I have just finished reading their book “Rework”. I must say it’s is the most refreshing look at how to grow a business, that I have come across for some time.  It has gone on my top 5 books business owners must read. Every page is a gem.

What makes this book interesting is they challenge the norm e.g. you don’t need to employ heaps of people to grow a successful business. Their company is small, Frugal and profitable”, services millions of users worldwide and employees only 16 people.

So here is a taste of their magic:

  • Workaholism is stupid – working more doesn’t mean you get more done, it just means you work more.
  • Underdo your competition – focus on less than your competitors but better than them.
  •  Start a business, not a startup: Let’s drop the word entrepreneur and startup it has become synonymous with: creating businesses that spend other people’s money that don’t focus on making real revenue with real profits. 
  • Less is a good thing: it forces you to be smart with money. Only employ people who do stuff – no managers. – Hire when it hurts – resist the urge to over hire – teams are more productive when small.
  • Build half a product, not a half assed product: focus on the basics and get them right, and get it out there. Hell they launched a product with no billing system; they figured they had until the end of the month to create the billing system.
  • Make lots of small decisions: the consequences of failure are less and you build momentum.  Swap: let’s think about with, let’s decide- don’t waste time on long planning sessions – just do it.
  • Pick a fight: – stand for something, take a stand against competitor
  • Culture is by product of consistent behavior:  No policies – just tell people when they do wrong stuff

My favourite:

  •     Nobody likes plastic flowers – imperfection is natural, seize it and don’t over fuss stuff. 
        Make a stand for something and be brave enough to defend it.

  “So those that know me well – those typos and spelling mistakes – that’s just me imperfect. I add value in other ways – not as an editor”

The book concludes with a great concept:

 Inspiration is NOW THING.
Inspiration is perishable – it has a use by date.
So when inspiration strikes, do not hold back. – that’s the time to do the all-nighter.  Not when you are late on something.

Get your own copy of this book, it’s truly inspirational.

Documenting and Developing Business Models

The “Business Model Generation” methodology is an essential aid to all business owners and consultants, who want to  document, communicate and brainstorm businesses models in a succinct manner.

The book “Business Model Generation” by Alexander Osterwalder & Yvess Pigneur provides great examples of how to document business models, along with methods to brainstorm innovative changes in business models for existing businesses.

If you like visual aids, then you are going to love the techniques described in this must have book. What struck me, biased as I am toward visual tools, is how their visual models encapsulate the linkage and dependency on the key elements of the business in one page.

The base technique describes uses a common base canvas to capture the core building blocks of your business model: Key Partners (FP), Key Activities (KA), Key Resources (KR), Value Proposition (VP), Customer Relationships (CR), Channels (CH), Customer Segments (CS), Cost Structures (CS)  and Revenue Streams (RS).

A simple example of how this would work for apple’s I-pod is shown below:

Once the base or existing model is created the book then helps you explore the opportunities to explore other alternative business models. Some example business models described in the book include:

  • Unbundling Business Models
  • The long tail
  • Multi sided platforms
  • FREE as business model
  • Open Business Models

Key techniques described include brainstorming with the use of post-it notes against the base canvas, as well as my old chest nut of customer value propositions and what’s in it for customers.

Once you have your model developed with post it notes, you can really go to town and prepare a visual form of your business with pictures.

BTW: Do not be put off by the 72 page book preview available on their web site http://www.businessmodelgeneration.com/.  As a result of my pre-read of the preview I nearly didn’t buy the book. So glad I did purchase, based on a recommendation (thanks Matt McKendry).  My order on amazon was delayed waiting for a reprint, so hopefully they now have plenty in stock.

This book is now going on my must read list for entrepreneurs, order your own copy now

Post Ed note: I now run workshops which include this methdology – www.growthmanagement.co.nz/training

After using this model for some time I have come up with my own variant read more>