Archive for October, 2007
RICARDO SEMLER’S INTERESTING LECTURE AT MIT
Tags: Angelina Jolie, Brad Pitt, Business, MIT, Ricardo Semler
Checkout these excerpts from Ricardo Semler’s lecture at MIT. You can catch more of this on the 37 Signals blog. TIME Magazine featured Ricardo Semler among its Global 100 young leaders profile series published in 1994 while the World Economic Forum also nominated him. The Wall Street Journal America Economia, the Wall Street Journal’s Latin American magazine, named him Latin American “Businessman of the Year” in 1990 and he was named Brazilian “Businessman of the Year” in 1990 and 1992.
MOST BUSINESS PLANS ARE WISHFUL THINKING
A 5 year plan is just an extrapolation added to wishful thinking. Have you ever seen a business plan that says, “I’m going to go up 5% and then down -14% and then -22% and then I’m going to recuperate a little bit and then it’s going to go to hell?” ‘Cuz that’s what happens. That’s how it looks in practice, but that’s not the way we design it. We’re willing to trick ourselves into thinking we have control as long as we do it with wishful thinking.
COMPANY GROWTH IS OVERRATED
The assumption that growth is good for companies is a very difficult one to sustain. There is no evidence whatsoever that companies that grow a lot do better than companies that don’t grow a lot.
ADMIT WHAT YOU DON’T KNOW
We don’t know where we’re going, but we’d rather not pretend that we do. Because we think pretending is a lot more dangerous than admitting that we don’t…Talking about specific numbers more than six months out is improbable. Think about the future but don’t write it down. If you write it down, you have to follow it.
MAKE MEETINGS VOLUNTARY
All our meetings are on a voluntary basis. Because if it’s getting boring, go…If no one’s left, do we really need to do this?
MOST HIRING IS LIKE INTERNET DATING
On hiring, the typical process of recruitment and selection in a company is basically an internet dating process. You say your company is Brad Pitt and she says she’s Angelina Jolie and you go and meet at a bar…You get together for two quick meetings and then you decide to get married and hope it work. Instead, we take qualified candidates, the ten that fit the bill, and ask them to come in together. Then we have whoever wants to be involved interview these people. This will go for hours. Then “the interviewers” write down the two people who they want to keep. The two who score highest come back and spend the whole day here and talk to anyone they want…The result is less than 2% year turnover.
DO NOTHING SOMETIMES
Sometimes doing absolutely nothing, even about a critical decision, will end up bringing you through a solution. The idea that we alone can be trained to “know the answer” is a very dangerous rational.
WE NEED MORE DEMOCRATIC WORKPLACES
We will send our sons anywhere in the world to die for democracy…but I’ve never seen a democratic workplace. So it’s very important for our lives except where we spend 60% of our time. There must be something wrong with that.
AIM FOR SECONDARY EXPLOSIONS
Tags: advertising, Marketing, public relations, Taco Bell
TACO BELL HITS A HOMERUN
Advertising Buy… $5.6 million, Potential Giveaway Cost: Under $1 million, Publicity Value…Priceless. That could well be the marketing brief at Taco Bell, which scored a PR home run with the promise of a free taco to any American who wants one if a base was stolen in the World Series. Luckily for those hungry masses, Red Sox rookie
Jacoby Ellsbury stole second base in the bottom of the fourth inning in the series’ second game. Taco Bell’s promotion gave every American a free taco.
According to Nielsen Monitor-Plus, Taco Bell is one of the top 10 advertisers in the series, spending $5.6 million (General Motors Corp. is the heaviest hitter, at $13.2 million).
It’s expected that figure includes all the extra airtime Taco Bell got on the broadcast — plugs from TV anchors and sports figures about the promotion and a live interview with Rob Savage, COO of Taco Bell — not to mention a mention of the promo from a player in a “candid” conversation between Sox shortstop Royce Clayton and Mr. Ellsbury the evening before the big steal.
“It’s definitely driving the conversation,” said Pete Blackshaw, CMO of Nielsen BuzzMetrics. It’s hard to argue with good buzz.
SECONDARY EXPLOSIONS
One measurement of success by our military when bombing our enemies, is the discovery of secondary explosions. Secondary explosions indicate that the bomb landed on stored vehicles/aircrafts, fuel dumps or ammunition depots… indicating maximum effectiveness for the risks and costs incurred.
Who’s talking about your product or service? While nobody’s likely to lead that effort more aggressively than you… it’s important for you to develop smart strategies that engage and encourage “others” to talk about you. Taco Bell successfully landed some secondary explosions with their advertising.
Aim your marketing, PR and advertising efforts at targets that will deliver “secondary explosions,” delivering your business maximum returns for your investment.
BRANDS IN A MICROWAVE WORLD
Tags: Branding
Brands are decision making shortcuts in a fast paced world. People will frequently choose a well-branded product or service that’s inferior and more expensive, over a non-branded product or service, that’s superior and 30% cheaper.
Think about it. Prospects trust brands. A brand is a promise… a promise that you’ll do what say you will do. Offer your clients a shortcut. Build and strengthen your brand.
THE BLACK HOLE PHENOMENOM
For years… physicists have discussed an important phenomon… the “gravitationally completely collapsed object.” Then, a creative physicist, devised a better name for it… he called it… a “Black Hole.” Suddenly the world was interested.
Your words matter. One word or metaphor can quickly define your concept and uniqueness, and make your concept compelling.
If you are selling something complex, simplify it with a metaphor.
TOP 6 REASONS FOR UTILIZING EMAIL MARKETING
Tags: email marketing, LOUD! Creative, Marketing, Technology
More and more… businesses of all sizes are harnessing the power of email marketing. In years past, email marketing was only utilized by Fortune 100, 500… and perhaps “some” of the larger Fortune 1000 companies. Today, even the smallest local businesses are realizing the power of this great marketing vehicle.
For those of you that might still be sitting on the fence… I thought I’d share with you the top 6 benefits of email marketing.
1.) VIRAL MARKETING: Unlike web and print marketing, email marketing allows your recipients to conveniently forward your event, product or service promotion to as many additional recipients as they’d like. The “Forward To Friend” feature allows your message to penetrate a much larger market than you may have originally anticipated. Additionally, these forwarded emails have even greater credibility and marketing power, because the email was forwarded from a familiar friend, as opposed to being sent from an unwelcomed stranger, vying for attention in their inbox.
2.) INCREASED WEB TRAFFIC: An effectively designed email marketing campaign will significantly increase traffic to your website, exposing your services and products to a greater audience, and increasing your potential for new business development.
3.) COST SAVINGS: Email marketing is considerably more cost efficient than direct mail and other any form of print advertising. Email marketing reduces the need for postage and print costs… creating an enormous savings for your you and your business.
4.) TIME SAVINGS: Email marketing allows your business to get your message out faster. No printing down-time or delays at the post office. Email marketing can be scheduled to go out and reach your recipient and the precise moment you’d like.
5.) INTELLIGENT RESPONSE: Unlike many other forms of advertising, email marketing allows you to guage the response of your audience. You can measure what promotions are successful and what are not. This allows you to adjust and improve the focus of your marketing efforts.
6.) COMMUNITY DEVELOPMENT: Strong community development is always good for business and brand. Email marketing is a great vehicle for offering free tips and advice in the field of your experise, announcing the philanthropic activities of your company, and providing loyalty based promotions, like discounts and special offers for your specifically targeted audience.
GOT SYSTEMS?
This post is directed to all of you entrepreneurial business owners out there. Do you “EVER” want to take weekends off… leave the office at 5pm… coach your son’s little league team… or leave for vacation without stressing over what will crash and burn in your absence?
Well, it’s all about systems. You will be enslaved to your business forever unless you choose to systematize your business. “A little hard work and some common sense is enough to get me where I want to go.” That’s a myth.
I’ve posted about it before… but I vehemently and emphatically implore you… I insist… I beg you to read 2 books that are critical to your business and personal freedom… by Michael Gerber… E-Myth Revisited and E-Myth Mastery. If you’re not a reader… then checkout the E-Myth Revisited and E-Myth Mastery audio books from iTunes. Study these resources with a microscope… examine them… implement them… master them! They are the cure for most forms of your business cancer.
Click Here to watch a newly posted video that highlights some business leaders that have experienced EMyth success.
THE FOLLOWING ARTICLE IS FROM MICHAEL GERBER’S MONTHLY
E-NEWSLETTER, THE E-MYTH INSIDER:
Documenting the processes that control business operations is where the rubber meets the road in systematizing a company. System documentation requires a business owner to analyze and define all regular business processes. In E-Myth terminology, standard operating procedures are documented using “Action Plans.”
An “Action Plan” is a form that defines the desired result, required materials, sequential steps, quality standards, due dates and staff responsibilities for individual business processes.
Once processes are formalized, the “Action Plans” become key elements in the “Operations Manual” of your business. Producing your “Operations Manual” will help your business run more efficiently, and should allow you to step back from the day-to-day tactics to do real strategic planning.
WHY CREATE ACTION PLANS?
1. Action Plans can be used as templates for defining systems
2. Action Plans capture input from those involved in the process
3. Action Plans become lessons for staff training
4. Action Plans become the contents of your business’ Operations Manual
Click Here to see an “Action Plan” sample for “making coffee.”
DEATH BY MEETING
Would your staff rather walk through fire than come to your weekly staff meetings? Do your meetings leave everyone feeling dissatisfied or worse… disgruntled? Does your staff talk more “about” your meetings afterwards by whispering in the hallway, than they do “in” the meeting itself?
Meetings are such a critical element of effective organizational communication. I’ve just completed a great book; entitled
Death By Meeting, by Patrick Lencioni.
This book; written in classic Lencioni form, takes you through a fable about a leading video game corporation that aquires its smaller counterpart competitor with a sports-centered niche in the marketplace. This aquisition leaves the CEO from the smaller company desperately reevaluating his approach to staff meetings after coming under heavy scrutiny from his newly found CFO.
Anyway, I’ll let you discover the story for yourself, but I thought I’d leave you with this highly condensed summary that highlights Lencioni’s formula and regiment for healthy, productive, stimulating meetings that actually inspire, rejuvenate and add value to your business or organization. Enjoy.
MEETING #1 - THE DAILY CHECK-IN: The daily check-in requires that team members get together, standing up, for about 5 minutes every morning to report on their activities for that day. It’s a great way to keep everyone in the loop with what’s going on.
MEETING #2 - THE WEEKLY TACTICAL: This tactical meeting should last 45 to 90 minutes. There are two crucial goals: (1.) Resolution of issues, and (2.) Reinforcement of clarity.
MEETING #3 - THE MONTHLY STRATEGIC: The length of a monthly strategic meeting will vary depending on the topic(s). However, it’s advisable to schedule at least two hours per topic. This will give everyone the confidence to table critical issues knowing they will be addressed… and more importantly, that a plan to resolve them will be discussed.
MEETING #4 - THE QUARTERLY OFF-SITE REVIEW: Effective off-sites provide executives an opportunity to regularly step away from the daily, weekly, even monthly issues that occupy their attention so they can review their business in a more holistic, long-term focus and approach.
SHOOT FOR SPEED OVER QUALITY
Okay, I am not suggesting that quality isn’t important… but if you’re to compete in the marketplace of tomorrow, prioritize speed over quality. We’re living in a world where my family and I can pull up to a drive-thru window, and be driving away with a hearty full-course dinner for 5 in under 2 minutes.
I can walk into my bank tomorrow morning, and close on a $250,000 business loan before lunch.
I can order a $10,000 MacPro computer, an $1,800 30″ Cinema Display, and a $650 HP printer on Monday afternoon… and have a pile of boxes sitting on my doorstep by the following morning.
Shooting for “fast” simply isn’t good enough anymore. We’re living in a culture that more and more offers us instant gratification. People expect more, and expect it faster. The delivery of services is headed towards “real time.”
Shoot for speed over quality. Refine your business to cut your service delivery times in half… then in half again… then in half again.
MAKE YOUR SERVICES EASY TO BUY
Think how often you’ve been virtually sold on something, but chose not to purchase because it was too difficult to buy. The sales person offered all kinds of options, or made you worry about the value of an extended warranty, or offered complicated financing packages that you could not intelligently choose among.
Now think of your opposite experiences. Something appealed to you… a little… not necessarily a lot… and it was simple, so you made the purchase. Good marketing must focus on the buy. How clear is your offer? Can the prospect sample the service thereby reducing their risk? How clear is the price? How easy is it to buy?
In his book The Paradox Of Choice, author Barry Schwartz says that contrary to conventional wisdom, giving people many choices is often bad for them.
When presented with many choices, many people experience “choice paralysis” and do nothing, even when doing nothing is the worst possible choice. For example, give people 20 choices of mutual funds in their 401k, and many more will just let their money sit in a low-yield money market fund than if they only had a few choices.
Additionally, when people “do” select from a large field of alternatives, they usually experience greater “buyer’s remorse” than those who had selected from a small number of alternatives.
Make your service easy to buy.
By the way, If you don’t have time to read the Schwartz’s book, you can watch the 1-hour presentation Schwartz delivered at Google.
IS BUSINESS PLANNING ALL IT’S CRACKED UP TO BE?
Tags: Andy Stanley, Business, Google, Leadership, Sergey Brinn, Walt Disney
Clearly, planning is crucial to your organization… but not so much because of what the plan itself yields, but rather because of what the “process” of planning yields. Plans themselves often prove to be ineffective, simply because things change… The economy changes, the market changes, we change, culture changes, and our focus changes. But the “process” of planning keeps us sharp, always evaluating, collaborating and pursuant of creative new approaches to our business or organization.
Conventional “Walt Disney” wisdom of decades past, led many to conclude that you must have a 5, 10, 15, 20 and perhaps a 25 year plan… and that you leave little to chance. That “crystal ball” mindset in today’s culture and economy is simply obsolete. It’s impossible to consistently predict with accuracy what tomorrow holds.
Best selling author, renowned communicator, and senior pastor of a leading church in Alpharetta, Georgia; Andy Stanley, was questioned at a conference about his long-term plans. Andy compared the limitations of planning… with the headlights of his car while driving at night. “The headlights of my car shine and reveal a certain and finite distance ahead of me… I can only see so far. But I can see farther and farther ahead as my car advances forward, one linear foot at a time.”
Paraphrased… Every new day reveals a little more about the need for new business strategies and tactics. Plan for the short-term. Dream for the long-term.
STUMBLING AROUND IS HEALTHY TOO
On the other hand, while it’s healthy to plan, stumbling around a bit is just as healthy in balanced proportions. Sergey Brin; Co-Founder of Google, once stated, “The more you stumble around, the more you’re likely to stumble upon something valuable.”
Did you know that Google requires their senior engineers to spend 20% of their salaried work-week to pursue their own personal projects. These personal projects have nothing to do with their professional responsibilities at Google. They just invent.
The process of planning is crucial, but allot time for your executive, professional and administrative teams to stumble… to grow, to develop, to invent, to make mistakes, to fail forward. This balance promotes growth, and a happier and more fulfilled team… and ultimately a stronger business/organization.
FUEL FOR SUCCESS
A BEAUTIFUL DAY AND A CLEAR BLUE SKY
Imagine a beautiful day, a clear blue sky, and nothing but the long road in front of you. You and the family are packed, and headed to a 5 star resort on the beach for a well-deserved vacation. You’ve worked hard to earn this time away. You’ve made preparations at the office, you’ve saved the money, you’ve asked your neighbors to watch your house and water the lawn while you’re gone, you’ve prepaid the bills that are to be due while you’re away, and you’ve made all of the necessary hotel and entertainment arrangements for the entire week of your get-away. It’s white sands and crystal clear water or bust!
Now… what if… half way there and 850 miles from your vacation destination, you decide that you’re simply not going to stop for gas anymore. It’s inconvenient to keep pulling over, it slows you down, gasoline is too expensive, and your hands smell of fumes after handling the fuel pump. By not stopping for gas, you’d remove the expense, inconvenience, and risk of getting your hands dirty, but you’d also remove any possibility of successfully making it to your vacation destination.
AFTER ALL, IT’S BETTER THAN OTHER STUFF THEY’VE SEEN
Sounds like a dimwitted decision… right? But this is exactly what I see business owners and professionals doing more often than you’d imagine. They just stop. They stop prioritizing and focusing on their marketing efforts. They stop updating their website with relevant information and inspiration. They discontinue their email marketing efforts because it’s too time consuming during their busiest season. They refrain from updating their print marketing collateral because it’s expensive, and after all… it’s better than other stuff they’ve seen… right?
JUSTIFICATION WILL SCREAM YOUR NAME
Hand-in-hand with your brand, consistent marketing is the primary source of fuel that allows you to reach your ultimate destination… a successful and profitable business. You must endure inconvenience to make it happen. Yes, there’s a price… but successful marketing is an investment, not an expense. Resist the temptation to justify your marketing neglect. “Justification” will scream your name from the sidelines of the race… “Quit, you’ve run far enough… take it easy!” But justification will not lead you to victory.
DON’T BE A DIMWIT - SOAR WITH THE BEST
Besides… if your competitors thrive, and your business fails… you’ll know a truer and more intimate definition of the words… “expense” and “inconvenience.” Don’t be a dimwit. Relentlessly fuel your business with consistent and effective marketing, and you’ll soar with the best.
GOOGLE’S HEALTHY DISREGARD FOR THE IMPOSSIBLE
Tags: Business, Google, Larry Page, Leadership, Sergey Brinn, Technology
Co-founding duo of Google; Larry Page and Sergey Brin, cruised onto the stage of an academically elite high school auditorium in Israel to speak to the student body. They were met with the kind of roars and excitement that teenagers usually reserve for rock stars. Larry and Sergey entered the auditorium through a rear door… leaving behind photographers, sunglasses, a pair of hired cars with drivers, and an attractive young woman that was travelling with Sergey.
Dressed casually and pleased at their welcome, they sat down and cracked smiles. They were to speak about what they had done, how they had done it, and what their dreams were for the future. “Do you guys know the story of Google… Do you want me to tell it?” Larry asked. “Yes,” the crowd shouted.
It all began while Sergey and I were Ph.D students, studying Computer Science at Stanford University. We didn’t know exactly what we wanted to do.
I got this crazy idea that I was going to download the entire web onto my computer. I told my advisor that it would only take about a week. After about a year or so… I had some, small portion of it. The students laughed.
So optimism is important, he went on. You have to be a little silly about the goals you’re going to set. You need to have a healthy disregard for the impossible, said Page. That’s a really good phrase. You should try to do things that most people would not!
THE $400 GRAND BRAND
Tags: Branding
Harry Beckwith shares the following true story in his book, Selling The Invisible.
Two men spent 7 years building a contracting company into a successful business. In 1995, a man came along and offered them $400,000 for the business. The company had no assets, employees, inventory, non-proprietary products or services, no accounts receivable, and no real estate.
The only assets were the name and client list.
It wasn’t the client list the buyer was after, since there was very little repeat business. In fact, repeat business wasn’t much better than a funeral parlor.
Moreover, the client list was only of any value at all if and only if the clients perceived, that in light of a transfer of ownership, that they would continue to receive the same standard of quality.
In other words… THE BUYER JUST WANTED TO BUY THE BRAND, after just 7 years of work.
A successful brand is money. Build your brand.
FORTUNE 500 COMPANIES ARE TYPICALLY NOT AS LARGE AS THEY APPEAR
I can cite more than one instance in which one of my business development staff had celebrated their big meeting with that large “trophycase-worthy” prospective corporate client. “Finally!” they gasped. Their mouths watered at the sheer prospect of landing this huge new client with buldging budgets and liberal spending policies. Their years of feeding on business chum had finally paid off… or so they thought.
After landing their so called “big fish” client, they rapidly discovered a different reality than they’d previously expected. They learned that Joanne; Marketing Director for a large medical system conglomerate, had less money in her budget than several of our existing “maw & paw shop” and new business startup clients. And that ubiquitous billion-dollar oil and gas company they’d been stalking for months, was run by a CFO that survived the Great Depression… and who’d rather personally vacuum the offices each night, than pay for the opulent luxury of a janitorial service. Who woulda’ thunk it?
Don’t underestimate or under-appreciate your prospects and existing clients that have yet to appear on the cover of Forbes. According to the International Information Program, 99% of all independent enterprises in the country employ fewer than 500 people. Furthermore, some 19.6 million Americans work for companies employing fewer than 20 workers, 18.4 million work for firms employing between 20 and 99 workers, and 14.6 million work for firms with 100 to 499 workers. Agressively seek out smaller fish in bigger ponds. You’ll live longer.
Secondly, when you “are” going fishing for that large corporate prospect, manage your expectations. Understand that large corporations are extremely compartmentalized, and budgets are reluctantly passed down to department heads. Recognize that your proverbial foot-in-the-door might be a great step, but it’s likely to be the first of many on a long and strenuous journey.
Please feel free to share your comments. I’m always thrilled to know if I’ve helped you, your business or organization in any way. - Brian
SATISFIED CUSTOMERS WILL NOT GROW YOUR BUSINESS
Mandy; an executive at Microsoft, is looking to potentially recruit the services of a business consulting company. She remembers that her long-time friend and contemporary in Chicago had previously recruited a particular consulting company for similar purposes. Mandy calls her friend in Chicago to inquire about her experience.
In speaking with her friend in Chicago, she replies to Mandy… “I was satisfied.”
Does her lukewarm response inspire Mandy to pursue, let alone recruit the services of this consulting company? No. Absolutely not.
Continue to better your services and the experience of your clients. Don’t fall victim to the Lake Wobegon Effect, by believing that you’ve already arrived… that you’re better than you actually are.
You can always be better. Probably much better. Relentlessly refine and improve your services. Be exceptional!
Please feel free to share your comments. I’m always thrilled to know if I’ve helped you, your business or organization in any way. - Brian