Rethinking Business

The problem with relying on gameable systems (Google search results, New York Times best seller list, grocery store aisles) for entertainment, information and products is that you aren’t necessarily finding quality information. It’s good enough information at best.

Gameable systems don’t necessarily favor the best, they favor those who have figured out how to game it. They can be the same, but often they are not.

If you base your workflow, contracts or recipes on results you found on Google, there’s a fair chance it’s amateurish. If you buy your gift based on who’s on the bestseller list, there’s a fair chance it won’t be as great as you hoped. It’s OK, maybe good enough is what you need right now, but if not you just need to realize that it’s a starting point.

The professional is the one who’s willing to put in more effort than the others, to dig deeper, study and test longer. Similarly, the best gifts are the ones that have been thought through and personalized.

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Once in a while you need to tear down what is, break the model, rip the process apart and start over.

Some models, when they’ve been running for too long, miss the mark and become beyond repair. The only thing left is to break it and start over.

The process is long, tedious and painful.

The next step of course is to rebuild. Establish priorities, write a map and follow it relentlessly.

Also a long, tedious and painful process. There are countless traps along the way: meetings, committees, set-backs, short cuts, templates, assumptions… Every step hides a chance to step back into the old way.

Is it any wonder most choose to plug along? Is it any wonder that those who stick with it are miles ahead of the competition?

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I haven’t been posting Monday Morning Meeting talks recently simply because I haven’t done any. There’s a multitude of reasons for that and I won’t be doing any again today. That being said, I’d like to share a weekly kickoff this morning anyway.

Here are some of Howard Schultz’s thoughts on success and leadership (Howard is the ceo of Starbucks). I took the notes a while back when reading Onward. I don’t remember if they’re direct quotes or paraphrases.

    Success is not sustainable if it’s defined by how big you become. The only number that matters is “one.” One cup. One customer. One partner. One experience at a time.
    The core capacity of leadership is the ability to make right decisions while flying blind, basing them on knowledge, wisdom, and the ability to stay wedded to an overriding goal.
    Recipe for successful leadership: an unbridled level of confidence about where their organizations are headed and the ability to bring people along.
    Leadership is about instilling confidence in others

Happy Monday and have a great week!

Go create!

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Of course you can cram for the exam,

    Email your list for a hundredth time,
    Cut costs on a small feature,
    Hide the fine print,
    Lengthen the fine print,
    Bulk up the legalese,
    Cut corners,
    Borrow someone’s class notes,
    Say only what we want to hear,
    Appeal to the lowest common denominator…

Or you can take the time to make something that matters. That requires no small print or mass emails. Something to that people want to talk about and share.

Sure it’s harder than clicking send. Sure the results might take longer to happen. But more sustainable and worthy for sure.

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Our world increasingly favors who you are. But more than that, it values what you do, what you ship and what you stand for.

The rise of personal branding is a direct result of this. The idea that you should and need to stand for something is not new. Not long ago you were the shoemaker, the blacksmith, the general store owner. Then industrialists tried hard to erase you, to make you a cog and convince you that you didn’t matter. “We’ll give you a salary, we’ll give you benefits, we’ll give you vacation, we’ll give you a pension. All we need in return is your individuality, your creativity and your vulnerability.”

The connection economy requires us to be us again. It begs us to create a ruckus as Seth Godin puts it. We need to take a stand. That’s why, I think, my friend Frédéric Harper published his book: Success in Programming, How to Gain Recognition, Power, and Influence Through Personal Branding.

It came out today so I haven’t read it yet (What? No advanced copy?), but I know Fred well enough to know this is a book not only for programmers, but anyone who works behind the scenes and anyone who wants to do work that matters. I look forward to reading it and I encourage you to do the same.

On a more personal note, I’m incredibility proud of what Fred has accomplished – writing an important book in a language that isn’t his mother tongue. Fred is a great example of someone who has chosen himself.

Go, choose yourself, read the book.

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Fred Pellerin is a story teller. He tells tales that take us back, make us dream and entertain.

They might not be as polished or practiced, but we all tell stories. “I’m too fat,” “I’m to old,” “people like me don’t do stuff like that,” “I can jump that high,” “I try things,” “I’m adventurous.”

Stories have more power than we acknowledge. They give us permission, they give us excuses. They help us and stop us, inspire and frighten. The strongest stories, I think, are those told by one person. The ones that are raw, honest and open. Sure, a good editor can help tell the story, but the essence is there – it’s vulnerable and will make us care.

And that’s precisely where the problem with corporate stories lies. The ones written on plaques at the door or in taglines on sites. The ones with phrases like “commit to quality,” “invest in our people” and “excellence driven.” They were written by committees. They’ve been asepticized, cleaned and Cloroxed. There’s no emotion left, they lost their ability to inspire, educate and make us care.

(Photo credit: Rick Hanzelin)

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Growth and value. You need both, yet my experience they shows they’re often at odds.

Growth means onboarding a significant amount of new users/customers. Why? To
– gain clout in the market,
– push towards a leadership position,
– play the law of numbers (more users means more paying customers).

It seems like a short view strategy – gain users today to survive tomorrow.

Value means looking to add value and not chasing users. Why? So
– that you add so much value that existing users become fans,
– that you are extracting the most bang for your buck (each user pays a lot),
– that each user today keeps adding revenue in the long run.

It seems like a long view strategy – pay more today to gain even more tomorrow.

Both require their own type of investment. I’ve talked about this before. Each approach has its weaknesses. Growth can mean onboarding users that have no short or long term value (what good is your app if you have 1,000,000 registered users that never use it or spend on it?). Value means you’re spending capital up front for presumed future value, but time and capital are often scarce in organizations.

So which do you chase? Maybe the approach depends on what stage your business is at. I believe there is a five stage cycle in growing a business (I say cycle because once you get to stage five, you need to figure out how to go back to one):
1. Product – figure out your product and product market fit. Without a product you’ll have a hard time making money.
2. Brand – once you have a decent product you can focus on getting known through partnerships, marketing, advertising, etc.
3. Customer – once you’re known you can focus on onboarding customers.
4. Sale – once you have users/customers you can focus on monetizing them. How to get them to pay you.
5. Profit – once you have paying customers you can focus on the ones that add the most value and ignore the lower value ones. This is a Pareto principle thing really.

(A few side notes: once you hit the profit stage you should start thinking of product again (new products, new features, new markets, etc.). Also each stage isn’t mutually exclusive: you can’t ignore product or marketing while focusing on sales…it’s just a question of focus. Finally, I’m sure there are a ton of exceptions that prove the rule – overlapping stages, reversed stages, etc.)

Although, you can “growth strategy” your way through the 5 stages just like you can “value strategy” your way, I think overall, you can see where value works best and where growth works best. Stages two and three are mainly growth focused with a value undertone. That means the investments are really geared towards getting more users, customers, presence, etc. Stages one, four and five are primarily value focused with a growth undertone.

Is the trick then is knowing your plan and were you currently are so you aren’t aimlessly chasing one strategy.

(Photo credit: Susana Fernandez)

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Apple’s value proposition was that it just worked. You plugged it in and it just happened; no drivers to download, no configuration, no command prompt, just plug, and play…

Over the weekend, I was trying to Skype with my Mom so she could see her grandson. I was on my Nexus 5 and her, on her Windows based PC. It didn’t work and I couldn’t figure out out why, was it an Android/Microsoft thing? Was it a new OS thing? Was it a Google thing? Maybe it was a user thing. All I know is it ended in frustration.

It reminded me of Apple’s value proposition. It’s crazy to think that your product just doing what its supposed to is a value proposition. That’s like GM saying, “Hey, our cars just drive.”

And that’s exactly the point isn’t it? Cars have a long history. Digital communications, don’t. I can imagine when cars first started rolling out to the masses that your value proposition could have been “they just drive.”

There’s another time-based difference. Abundance. The cost of switching to Hangouts or FaceTime on the iPad is next to nothing. So while not long ago you could have gotten stuck with a car that didn’t just drive, “getting stuck” now is less and less of a reality. In a world of abundance, it just needs to just work…

Companies aren’t stupid, they’ve understood this and chose the easy option. They chose to lock down users with features, contracts and cancelation fees. The same goes for work mind you, the cost of switching jobs is next to nothing. Contrast that with before when you bought into a job for life. Companies have answered by locking down employees with policies, non competition clauses and probation periods. In short, industrialist marketers and HR professionals have chosen to be average, cut costs and lock down with fine print.

But the smart ones, the ones with courage, the ones that understand the short term doesn’t work in the long run have chosen to just make it work. Get rid of the lock downs and focus on value. Once you accept that the cost of switching is zero and that the only sustainable way to keep your clients and employees is not fine print but value and trust, you become remarkable and people don’t want average, they want remarkable.

(Photo credit: LaszIO GadjOS)

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A legend is a story. A story of past victories and heroics. They’re exaggerated and embellished. They’re there to entertain and inspire. Myths on the other hand are largely false pretenses. They’re also stories based on past events but they’ve been twisted and embellished not to inspire but as matters of fact. They become a truth that, if you’re skilled enough, work enough, hustle enough can be attained once again.

A legend is unattainable, even if your skills surpass the legend, the legend lives on. Gretzky, Jordan, Phelps are all sports legends. You can beat their records, but the name lives on.

Myths are presented as attainable. 10 years ago, I on boarded 200 clients in a week, he ran the 100 meters at breakneck speed, that hack generated triple digit month over month growth. The details are ignored. Never mind that I got 90% of those clients from a rep who left the company a week before they signed. Forget that the fact that the stopwatch was started late or that the hack happened at the same time as another major marketing push. The myth stands. You can beat it only if you’re good enough.

The main difference lies with the facts. A legend’s achievements are publicly available. You know exactly what you need to beat them. A myth on the other hand is void of any facts and figures – they’re simply anecdotes.

Watch out for is the myth. They’re dangerous at best. They set up false hope, wrong expectations and broken promises. Better look to the legends as inspiration. You can even look up to them once the record is broken.

(Photo credit: Francis Bongo)

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In Montreal we have a ritual. Twice a year we change the tires on our cars. In November we switch out the summer ones for winter ones and in the spring, the summer ones come back on. Last year, the small garage we go to told us our tires were out of whack.

We asked around, did some research and, to the best of our knowledge, came to the conclusion that he had lied so we went to another mechanic. That’s the garage’s losing game. Drip by drip he loses his customers and closes shop.

If you’ve been in business for a while you quickly learned that you knew more than the customer and some decided to use that knowledge to deliver a better service (or better products), others used this to lie and cheat to make a few quick bucks.

But you know how the story goes – the rules have changed. The tables are turned. The customer has access to more knowledge than ever. And the rate is accelerating – phones, tablets, blogs, free calls, Facebook, news sites… Little, if any, information is scarce today. It doesn’t appear that way, especially to those who chose to lie and cheat.

And that’s exactly where their problem lies. They built their business on scarcity of information – their ways, their pitches, their promotions all depend on the customer not knowing. That’s a losing game.

The one who wins is the one who partners with the client, shares the information and helps them make the best choice or even the one with the better story, the better experience and the better process. It might be counter intuitive at times, but that’s the winning game.

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