According to the SBA over 80 percent of the 29.6 million small businesses are owned and ran by a solopreneur (single person). These businesses are often very successful and the owners are satisfied with the results they are getting. They generally are working very hard, but they’re ok with this. Often, they intend to pass the business on to family members. Solopreneurs think, also, that real economic and personal freedom isn’t possible because they must keep the grind just to stay afloat. Vacations are hardly ever taken. Work is all there is. So, they go on like this for several years until they just can’t physically or mentally do it any more.
This is the basic arrangement, but if you are a solopreneur, think of what could happen if you were able to share your wonderful product or service with more people and make a larger impact on the world.
Solopreneurs or small businesses in general, make up 99.9% of all firms in the U.S. and contribute millions of dollars to the economy each year.( SBA Office of Advocacy) This is a fantastic contribution and you are influencing many lives for the better. You could increase your contribution and influence more people if you change your mindset from that of the solopreneur to the mindset of a CEO.
Your business could grow to serve more people and you could even expand to more locations. All of this could be done in the same amount of time you’re putting into your business every day. It just requires thinking of the business in a different way and, of course, performing different tasks.
Martin Zwilling reported, “Over 25 years ago, Michael E. Gerber wrote a best-selling business book called The E-Myth: Why Most Businesses Don’t Work and What to Do About It. “The E-Myth (Entrepreneurial Myth) is the mistaken belief that most businesses are started by people with tangible business skills, when in fact most are started by ‘technicians’ who know nothing about running a business. Hence most fail.”
The importance of business management skills isn’t widely appreciated even with the Google Library and You Tube University where all the information you would ever need is available to everybody. Most new business owners don’t realize the need for “tangible business skills”.
Therefore, most businesses are started by professional technicians with great skills and no knowledge of the management skills needed to help the business thrive and multiply.
With the help of Martin Zwilling, contrasting the mindsets of the professional and the business builder will highlight the change in perspective required for building a strong and growing business.
The Professional or Technical Perspective(the Soloprenuer)
- How much work should I do to get the income I need to stay in business? The owner is concentrating on the volume of work that he/she must personally complete to keep the business running.
- What should we offer the customer? Concentration is on the size and scope of the service or product and what is required to please the customers.
- How much should your product/service cost to produce and what should be the cost to the customer? Understanding the financial requirements and results in the business is foremost.
- How will we get the basic materials we need to supply the product? Supply chain requirements are considered and chosen.
- How can I get additional funding? Venture capital or loans are considered for operating costs.
- How can we market this business to get more customers? Marketing options are considered and chosen according to available funding.
- How will I hire people when I need them and how will I pay them? Hiring workers or getting volunteers are contemplated but often avoided.
The focus is on the present and attempting to keep things as they are now. Seeing what has worked in the past and what seems to be working now is the total consideration of the owner. This perspective often fails.
Of course, these tasks must be completed in any business, but with a different perspective, a good amount of stress is removed because you have business skills to design a Vision and plan for handling the required tasks more efficiently with projected timelines. The motivation and energy you will get from this action will surprise you.
“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.” Sun Tzu
The Business Builders’ Perspective
- How should my business work in today’s environment? This perspective takes into account the changing environment of the business and research is completed to help design how the business will work today and in the future.
- What are my competitors doing that I should know about? A careful analysis of existing successful, related businesses is completed to determine the state of the art in the chosen discipline. Internet searches make this task easily accomplished.
- What meaning can we bring to the marketplace? The contribution to society the business will make is taken into consideration and held as guiding principles in the business.
- What should my business look like in the future? A Vision of the future is carefully described and used as a business target.
- What strategy should I adopt to get to that Vision? An analysis of where you are in the business building process, what targets you wish to reach and how you are going to reach these targets is thought through, designed and documented. This is your strategy.
- What Systems should be in place to ensure consistent results that satisfy customers and create the best results? These will be routine ways of running the business that can be easily repeated in all important operations. Examples would be a marketing system, a financial system or a customer service system that works the same every time unless changes are indicated.
- How can we be better than the rest? Attention to innovation, improvement, excellence and industry leadership are important considerations for this owner.
There are other elements, of course, for each perspective. The listed ones are just a few major differences in the thinking processes of the professional and the business builder. The truth is, the business owner must carry out both roles. Your artistic application of state-of-the-art management skills will help you organize and control all aspects for the sustainability and growth of your business.
The business builder takes the perspective of the CEO who sees the big picture, then plans for business fortification, endurance and expansion. You don’t see yourself as always keeping your head down grinding out the work and hoping you will eventually get help. You believe there is great help out there for building a growing business and you know there are proven ways to get excellent workers as well as proven ways to carry out the role of CEO.
You see yourself as the founder of a great or legacy business that will be a benefit to society and help gain financial and personal freedom for yourself and your employees. So, it’s obvious, if we analyze the questions a CEO asks, the mindset for running the business is entirely different from the mindset of the solopreneur.
If we consider this information, we can conclude that there are 5 steps to moving from the soloprenuer perspective to the CEO perspective.
- Clarify your ultimate business Purpose and commit to it. Include a clear description of the contribution you want to make to your customers. Understand the need for every business affiliate to commit to your Purpose.
- Design a strong Business Core and embed it deeply into your mindset and the mindset of of all workers. This is the key to your success. You will be the one to control the operations in your business and ensure that the Core is reflected in all Systems. You will also be the first modeler of what is important in your business. Your Core will contain your Purpose, Values, Vision and Strategy.
- Become a continuous learner and stay ahead of industry news and innovation. This practice will give you insight for creativity and innovation. Your business survival and growth will depend on your ability to change and adapt your Systems to current and changing requirements.
- Design Systems that can be replicated and improved by anyone working in your enterprise. Your Systems will be the standard no matter who is working them. This allows your operations to be consistent across each of your businesses.
- Firmly establish your uniqueness to remain relevant in your industry. It’s a lot easier to highlight your uniqueness rather than keeping your eye on winning over the competition. It’s good business to be aware of what the competition is doing, but your energy should be spent on establishing and maintaining your uniqueness.
The specifics of managing from the CEO perspective can be learned easily with the availability of knowledge in our time. It’s worth the time and energy when you consider the financial and personal freedom as well as the fulfillment you will enjoy as you build a great and growing enterprise.
Try a free sample of this book for clear management recipes: “20 Directives for Small Business Success: Do or Die”
We are living in a unique time for business building and innovation. Every thing we need to build a business is at our fingertips. The money isn’t always available, but the ‘how to’ resources are free for everybody to access. The uniqueness of our times offers the opportunity to build businesses but our dynamic environment is extremely challenging. As you build your business, you must continue to be innovative and creative regardless.
According to Drew Marshall,
“Creativity is about unleashing the potential of the mind to conceive new ideas.” and “Innovation is about introducing change into relatively stable systems.” As you build your business, you’re required to consistently create and innovate. This seems to be an almost impossible task. It just adds to the many things already on your plate.
So it seems logical that you should stabilize whatever you can and contain your business activities within some kind of solid framework not easily shaken. This happens when you clearly define your Mission, Values, Systems and Vision. These elements will remain constant in spite of changes of any kind, creative, innovative or imposed. One or more of your Systems will go through change but the stability of your Mission, Values, Vision and other Systems will keep you grounded. This stability will help you survive and prosper because your business processes will fit into this firmly engrained mold. Without this framework, you can become pulled in all directions and achieve nothing your Vision described.
As your framework is becoming firmly rooted in your business activities, you also embed the principles of innovation and creativity into you everyday activities. In other words, everybody in your business will understand that you intend to keep up with the current trends in your industry as well as create new ones. You’ll need to shape your working environment (culture) to support innovation and creativity in all areas of your enterprise. You will not only stay in the game but you can be proactive and become a leader in your discipline.
“Innovation [and creativity] only happens in the right environment, one where everyone is not only allowed to innovate, but they are actively encouraged to speak up and bring new ideas to the table. This may sound like common sense, but it is far from common practice.” Kotter International
9 Ways to Embed Innovation and Creativity into Your Business Environment
1. Create an environment that supports innovation as well as creativity. How? Build a collaborative environment where people are free to ask questions and make suggestions. They should feel included in most of the important things concerning the business. It also helps to make questioning an important part of your everyday processes.
2. Thoroughly train new affiliates and new hires on the importance of innovation at all levels and across all Systems in your organization.
3. Include innovation and creativity as job responsibilities in your job descriptions across all jobs and positions.
4. Set ground rules, ex. adequate research before presenting an idea or clarify the impact on the other Systems in the proposal. Pilots, prototypes or practice runs could also be a requirement. Make sure that everybody knows and follows the ground rules.
5. Use customer complaints and suggestions for inspiration to create or innovate.
6. Become a model innovator. Share your procedures, questioning, successes and failures. This is a valuable way to train creative process and ground rules to your employees.
7. Understand that failure is a part of the innovation and creativity processes. You can set limits for timelines and resources to help keep control.
8. Develop reward Systems for successes as well as failures. For example, there can be recognition and more authority for successes and some kind of special recognition for failures to show the importance of attempting to innovate. Research the best rewards for employees. A feeling of freedom and purpose is often reward enough for most people.
9. Use change management skills to implement the innovations in your business. This determines how much your organization and others will benefit from the new practice.
Entrepreneurs and start ups are required to use their “super powers” to build a business from the ground up and continually create and innovate while responding to rapid change. Whew! That’s a lot, but it can be accomplished. In fact, it must be accomplished for survival in this “Conceptual Age” as described by Daniel Pink. Building some type of stability is required. If you design and fortify your business framework, you can control and direct your actions or reactions to this rapidly changing environment. Sharpen your management skills and manage well.
Easy to follow Management Skills and Development Guides in “20 Directives for Small Business Success: Do or Die”
As you are building your business it’s a good idea to think about the future of your small business with your new hire. How will you integrate and maintain great employees. Thinking about this before you need it will make this part of your business building process easier. A good old fashioned rule is to treat others as you want to be treated. When you’re involved in an intense and fast moving situation, this isn’t that easy to do.
Coffee and Jones in, “Creating the Best Workplace on Earth” wrote“We call this “the organization of your dreams.” In a nutshell, it’s a company where individual differences are nurtured; information is not suppressed or spun; the company adds value to employees, rather than merely extracting it from them; the organization stands for something meaningful; the work itself is intrinsically rewarding; and there are no stupid rules.”
Planning how you want your employees to feel will help you develop a productive culture. Everyone involved can be proud to be a part of your business.
The first thing to establish in the minds of your new hire is the Purpose of your organization. In other words, they will know what you stand for. You must be dedicated to it and promote that dedication throughout your business. It’s really a type of indoctrination that’s essential to business success.
Goffee and Jones reported a statement by Jack Welch.
“There are only three measurements that tell you nearly everything you need to know about your organization’s overall performance: employee engagement, customer satisfaction, and cash flow. It goes without saying that no company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it.” – Jack Welch, former CEO of GE
Carefully relate why you are organized and what benefit you plan to bring to your customers and the larger society. Your Core Values are the elements that will help you build a strong, sustainable business foundation. Everyone involved in your operation should have a clear understanding of what your Values are and become committed to them as they perform business tasks.
5 Ways your new hire can enjoy helping you build your business
If your new hire shares your original business Purpose and wants to make a contribution to your cause, he will enjoy the work. He will work through challenges and setbacks and continue to move the business forward.
If your new hire has personal Values that match your business Values, she will enjoy helping you build the business. You can test for this fit in your hiring process. It’s important to inform all new hires, early in the process, of the importance of practicing these Values in all of their activities. Of course, you must be the ultimate model of these Values to make your intentions believable. If they know without a doubt what your organization stands for, their pride can begin to build.
If you allow your new employee to be himself with a sense of freedom to participate, he will enjoy his work. If he knows his perspective is valued, he will enjoy helping you build the business. Coffee and Jones
If you tell the truth about your business and business results, employees will enjoy their work. Employees like to know how what they are doing impact the business. They even appreciate knowing about the failures. This helps them adjust their work to what’s needed. In many situations, they can give suggestions to prevent future problems. They will enjoy working because they feel included in everything and they feel trusted.
“Employees who believe that management is concerned about them as a whole person – not just an employee – are more productive, more satisfied, more fulfilled. Satisfied employees mean satisfied customers, which leads to profitability.” – Anne M. Mulcahy
If hiring, training and coaching are done well, your new hire will become proud to work with your growing business because they share the purpose and beliefs driving the business.
Most employees want to see themselves advance in your business. Designing development plans for your workers will take care of this. Just being aware of the plans is motivating to workers. Understanding where they are in relation to the developmental levels will result in a feeling of appreciation and add to the sense of pride.
If your new employees know they are doing worthwhile work, the work matches their values, and they can see themselves advancing, they will have few problems feeling proud to be a part of your business. They will enjoy coming to work.
Consequently, they will regularly tell people where they work with enthusiasm and pride. Your business will prosper.
Additional guidance in: “20 Directives for Small Business Success: Do or Die”
This is a phenomenal time to be in the process of business building. Any information you need is at your fingertips. You can learn to avoid mistakes that other businesses have experienced by checking industry histories and stories. You can also learn what has led to extraordinary success. It’s all here for anyone to find. In this commentary, I will examine the one fundamental reason legendary businesses have survived and prospered. Hopefully, you will be convinced to follow in the footsteps of these great businesses as you begin the process of business building. From Day 1 your intention can be to create a legacy business for service to humanity.
Most of the important business literature points to the importance of designing a strong Mission or Purpose. In this writing, I will use Mission and Purpose interchangeably. I will treat Vision and Values and separate elements of your business foundation. You have more than likely, seen these terms used in various ways. Sometimes Mission and Vision will mean the same thing or Values, Mission and Vision are all the same. Here, they are three different things.
The focus here is on the importance of a sound Mission/Purpose. Jim Collins and Jerry Porras in their book “Built to Last” consistently found that great companies embraced a strong overarching principle or Purpose to guide their business operations. They found these principles lasted through many years of development and formed a solid foundation for continued success. “There is an ‘extra dimension’ in a great company. Enlightened business leaders around the globe intuitively understand the importance of timeless core values and a purpose beyond just making money” Collins and Porras.
Let’s consider some of the Missions of great American businesses of today:
Southwest Airlines has flourished for 38 years. It’s managers have upheld the original Purpose:
“The Mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit.” “Our Purpose is: To connect People to what’s important in their lives through friendly, reliable, and low-cost air travel.” Southwest describes a Mission and a Purpose. Both are principles the company continues to be deeply passionate about. Everyone involved with the company knows that all business actions must be guided by these fundamental principles.
Charles Schwab continues to grow after 30 years. The Mission is “to empower individual investors to take control of their financial lives, free from the high costs and conflicts of traditional brokerage firms.” The focus of this Mission is on the customer and the intent to simplify the investing experience. This Purpose has led to great success.
Amazon was founded in 1994. It has continued to be the leader in its industry. The Mission reads:
“Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.” There is no doubt Amazon has fulfilled its Mission for over 23 years. Recently, it has ventured into brick and mortar locations, but continues to dominate their original industry. It’ll be interesting to see how this venture outside of their original purpose will effect their success.
Two of our most successful businesses have made changes to their Purposes even though their original Missions have brought them tremendous success.
Facebook founded in 2004 has enjoyed phenomenal success in just 13 years. The original Mission was:
“Making the world more open and connected.” An excellent, open Mission to encompass many products and services.
The new Mission reads: to “Give people the power to build community and bring the world closer together.”
This is also an excellent, open Mission to encompass many products and services but it limits the Purpose to two ideals. The current intent highlights the values of community and internationalism. It will be interesting to see the difference the new Vision makes in the operations of Facebook. “Watch this space” (Maddow).
Apple’s Mission has served them well for 37 years.
According to the Economist, Steve Jobs’ mission statement for Apple in 1980 was: “To make a contribution to the world by making tools for the mind that advance humankind.” His goal to be the best in the world was evident in the passion he and his affiliates showed for the Mission. They were extremely successful.
Apple’s Mission today is quite different. It reads:
“Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store.” This Mission moves aways from the broad, overarching principle that has grown a digital empire.
Henry Blodget in “Apple’s ‘Mission Statement’ Is Making People Worry That the Company Has Gone to Hell”, believes “If that really is Apple’s ‘mission statement,’ it is indeed pretty lame. It’s not a mission statement so much as a list of product lines. And it would be hard to imagine a less-inspiring, more prosaic description of what Apple is (or used to be) all about.”
The fundamental difference between the two Missions is: Jobs saw the products as tools to improve the quality of life for mankind. There was no product limitations. This left the door open for many products or services as long as they fit the principle. The passion came from a great purpose. The new Mission focuses on products, not service. What happens in the future remains to be seen. “Watch this space” too!
“People want to do well and do good. They want to understand how they’re making a difference in the world. Things change all the time, but your organization’s purpose transcends any individual product or service.” – Mark Weinberger, EY
We can identify at least 4 characteristics a great Purpose after careful analysis of these legendary Missions.
Collins and Porras reveal many characteristics of a business purpose in “Built to Last”. I highly recommend this book for business building. Four characteristics are highlighted here:
First, the Mission promises to give something to the customer or society at large. The Purpose is larger than the founder and extends to the greater community. Such as Southwest Airline’s promise to “connect People to what’s important in their lives through friendly, reliable, and low-cost air travel.”
Second, the Purpose is something the founder is deeply passionate about. He or she “walks it and talks it” with zeal. Steve Jobs is known to reiterate the larger principle whenever there were problems to solve. He always kept the overarching principle in mind… “To make a contribution to the world by making tools for the mind that advance humankind.”
Third, the Mission supports a viable business model to achieve economic feasibility. Business is formed to make money. It must have money to support all operations and services so, any Mission must imply financial growth. Amazon’s Mission exhibits this. “Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”
Fourth, the Purpose should be set in an industry where the business can strive to be the best in the world. This intent should be implied in the overarching principle and promoted by the founder. This can only be done if a narrow niche is defined. The Purpose can strive to improve, create, or innovate. Charles Schwab provides an example of niche definition allowing the business to strive to be the best in the world…“to empower individual investors to take control of their financial lives, free from the high costs and conflicts of traditional brokerage firms.”
One more example of an excellent Mission is Merck’s principle designed by George Merck II in 1935: “We are workers in industry who are genuinely inspired by the ideals of advancement of medical science, and of service to humanity.” Merck was true to these principles in at least two well known incidences. The company supplied the Mectizan drug for “river blindness” to Third World countries free of charge. They also supplied streptomycin to Japan after World War II to eliminate tuberculosis, free of charge. They saw the need and supplied it. The CEO said they had to go forward with the distribution without government funding because if they hadn’t the scientists working for Merck would have become demoralized. They were committed to the Mission. They continue that commitment today.
This brings me to the most important revelation about the Missions or purposes of legendary companies. Dedication to the Mission/Purpose above financial concerns leads a company to greatness. The money usually follows strong dedication to some kind of contribution to mankind. More focus is given to the overarching principle than pleasing investors. It happened in the 18 legendary companies Collins and Porras studied for their landmark research reported in “Built to Last”.
Carefully design your Mission/Purpose as an overarching principle you can become passionate about. A great Mission/Purpose will help you through problems as well as successes. Try to live up to your grand principle and become another legendary business for the world.
More information in: “20 Directives for Small Business Success: Do or Die”
Management research of the best businesses in the world have highlighted some important practices for business success. If you’re building a business, it will be of great benefit to know and understand these practices at the beginning of your venture. The current Knowledge Age allows us to find these practices and study how to apply them to what we are doing today.
As you analyze these successful and enduring businesses, you will find they share several principles as guides for all of their business activities. The key thing is: they never deviate from their most important principles. Today we are calling them “Core Values”.
The ability to stay with the adopted principles gives these enduring businesses stability in times of change. These principles insure stability and focus in a highly unstable environment. Enduring businesses find comfort in what they know and what they have committed to. This is reassuring to the owners, customers and employees. It shows in the sustainability and growth of their businesses.
One excellent example of a legendary company with sustained principles is Birkenstock founded in the year 1774 in Langen-Bergheim, Germany.
“At Birkenstock, tradition and heritage are important hallmarks of a brand that dates back not years or even decades, but centuries. Birkenstock is deeply rooted in the fine art of crafting premium quality shoes that are good for you. Since 1774, Birkenstock has passed this commitment down from one generation to the next. The result is the absolute best in quality, comfort and support.”
The core of their Mission is: “Birkenstock is deeply rooted in the fine art of crafting premium quality shoes that are good for you.” You immediately know that the shoes are of excellent quality and great for your health. They are committed to providing value and contributing to human welfare. Notice also, that the Mission is focused on one product. They have kept this focus throughout the years.
Johann Adam Birkenstock developed a footbed for shoes that were flexible with arch support. It was called the “blue footbed”. He trained podiatrists on the benefits of the “blue footbed”. The company later designed a sandal with a deep, flexible footbed that is known around the world for comfort.
In 1988, the company introduced environmentally-friendly adhesives to produce his shoes. They set the standard for environmental awareness all over the world. They also modernized production by reducing energy consumption by 90%. This reinforced their focus on the health of their customers and the environment. This was further reinforced with books, better base materials, and machines for footwear production. Birkenstock continues to lead in orthopedic and comfort footwear all over the world.
So, what are the prevailing principles of success for the Birkenstock organization?
-The principle of excellence prevails in all operations. A timeline detailed in the Birkenstock History describes meticulous attention to detail throughout the years. The techniques, materials and production equipment were continually improved and streamlined.
-The principle of customer care is carried through the years. It’s evident in the study and training in the field of podiatry. One example was the hiring of Konrad Birkenstock Sr to manufacture footwear for wounded soldiers in 1915.
-The principle of contribution to society has always been important to the Birkenstock Mission. This was shown when the “Birkenstock classes” were established. 5,000 specialists were trained in 1932. As a result, many doctors supported the Birkenstock system. The company also published a book “Podiatric System Birkenstock” that sold 14,000 copies. It was the most widely read textbook on podiatry at the time.
-The principle of environmental protection was important from the beginning. In1988 environmentally friendly adhesives were introduced. In 1990 energy consumption in shoe production was reduced by 90%. In 1995, they produced sandals without using any adhesives.
-The principle of innovation was engrained into the culture of the business from the beginning also. The environmentally friendly examples and others highlighted above prove this. However, there are a few more examples of innovation to highlight. In 1999, the company designed the world’s first super light weight EVA (ethylene vinyl acetate) clog. In 2001, a computerized picking machine to facilitate rapid order fulfillment was developed.
“Birkenstock remains a family company, maintaining these traditions up to this day.”
The traditions of excellence, customer care, societal contribution, environmental protection and innovation continues. These principles show up time and time again in the management research of legendary companies. Many of these companies follow some of the described principles. See the studies of Collins and Porras, Buckingham and Coffman and others.
Consider following in the footsteps of legendary businesses as you build your growing enterprise.
Your questions might be: How do I design principles I can commit to? or How can I make sure people working with me always stick to my principles? Continue reading.
4 characteristics of Legendary Business Missions
9 Ways to Embed Innovation and Creativity into your Business Environment
Lost Customers, Revenue and Employees: Cultural Implications for Business
4 Benefits of Integrity As A Core Value for Profound Business Building
Core Values: Your Competitive Edge
20 Directives for Small Business Success: Do or Die
Business owners have wonderful opportunities to make important contributions to their industries. All information you need is at your fingertips and you can skillfully use that information to your advantage.
Daniel Pink has described the coming environment as the Conceptual Age.
“The Conceptual Age is the new era of work where current economic demand calls for workers who are skilled in areas guided by the right hemisphere of the brain including: Design, Story, Symphony, Empathy, Play and Meaning”
The primary thing to do is to value the potential of your workers and include creativity and innovation as strong Values in your business building efforts. If you keep these intentions in the minds of all of your business affiliates, you’ll be able to survive and grow in this rapidly changing environment.
Creativity and innovation are sometimes used interchangeably, but they’re different.
According to Drew Marshall,
“Creativity is about unleashing the potential of the mind to conceive new ideas.” and “Innovation is about introducing change into relatively stable systems.”
So, your business should be able to develop new products or services and also amend, improve or provide extra value to existing systems in your chosen industry. Doing this will help you build your business as an indispensable service to your industry.
You can find opportunities for creativity in many situations. Here’s just a few:
Unexpected conditions such as natural disasters, an unexpected previously reliable national, local or industry system failure.
Demographic changes. Opportunities are available because of changes in numbers, age distribution, education, occupations, location and technology. Such as millions of people being out of work because of artificial intelligence or robots.
New knowledge in the areas of science, technology or sociology offer tremendous opportunities for innovation. Customer awareness and acceptance are the basic challenges when implementing knowledge based creations.
Opportunities for innovation are found in:
Incongruities in system process operation or efficiencies such as incongruities in an educational system or incongruities in your marketing system.
Incongruities between expectations and results such as found in many customer service processes. These process needs can be exploited, simplified or redesigned for your particular industry.
A change in the way people perceive a service or product. According to Peter Drucker “A change in perception does not alter facts, it changes their meaning…It [this perception] can be defined, tested and exploited for innovation opportunity.”
The management strategies you use will significantly impact the outcome of your creative or innovative endeavors. Neil Kokemuller in “Difference Between a Proactive & a Reactive Business Strategy” contrasted proactive and reactive basics for each strategy.
“Proactive business strategies are used to achieve predetermined goals. For instance, a proactive marketing strategy carries out research, development and promotional objectives for your business. You outline your message and media strategies within your marketing plan. Companies that want to shift gears or business approaches ahead of an environmental or economic threat also use proactive strategies. For instance, some companies proactively cut budgets ahead of anticipated slowdowns in demand.”
“A reactive strategy doesn’t mean your business waits for crises to plan. Instead, you develop a strategy with more of a wait-and-see approach. For instance, if sales decline, the response may be to invest in promotions or a clearance of remaining inventory ahead of a new product launch. In marketing, a reactive strategy is a plan for response in the wake of criticism or negative events that impact your brand.”
In other words, If you are using a proactive strategy you stay abreast of the current and changing trends in your industry. You identify opportunities for you to create or innovate ahead of the changes. You will allot time and resources for proactive activities.
If you use a reactive strategy, you create or innovate in response to additional needs or requirements in your business or industry. Your creative or innovative actions take place only after you identify a need. Theses contributions can be helpful to your industry but seldom put you ahead of others in your discipline.
The greatest danger in times of turbulence is not the turbulence – it is to act with yesterday’s logic.
What are some practical tips for business survival in the Conceptual Age?
Fundamentally, recognize and nourish the creative and innovative potential of all business affiliates.
- Stay in touch with your customers. Ask for suggestions. Carefully analyze customer complaints or problems. This is your primary source of creative ideas and it helps you begin with a level of customer acceptance built in. See Peter Drucker’s advice above: define, exploit and test your customer’s perceptions.
- Constantly search for trends and new findings in your industry by reading relevant magazines articles and social media posts. Attending conferences will help you remain current. Find other ways to communicate with people in your industry. Adopt a “trend foraging” habit.
- Design your overall strategy to include resources for proactivity when creating and innovating.
- Always ask “why”. When you’re designing your business systems you can find opportunities for innovation if you answer this question for each element of the system. Why are we using this method? This will lead to greater efficiency and effectiveness. Encourage affiliates to remain curious also.
- Encourage and reward creativity and innovation from everyone in your organization. Model the behaviors you require of your affiliates. Demonstrate the creative and innovative process as a part of your management activities. Your training and coaching efforts should also demonstrate creative and innovative activities. There are opportunities in everywhere waiting for new ideas in your industry.
There are no barriers to the amount of information you can obtain to help you build a trend setting business. It only depends on your willingness to constantly study, create and innovate. Legacy companies do this on a regular basis. It empowers them to continue to contribute. Know the difference between reactive and proactive strategies and choose proactivity. Use practical ways to practice these principles and prevail in your industry. The agility of a small business is perfect for the Conceptual Age!
Related: “9 Ways to Embed Innovation and Creativity Into Your Business Environment”
Many talk about the the existence of rapid change and how it’s disrupting the status quo. It seems as soon as we become accustomed to one way of managing our everyday lives, something changes. We find the need to learn a new technique or a new process. We are pushed into learning something new even if we don’t intend to. There are new functions on our cell phones, computers , TV’s, the addition of new electronic devices and more. There is no indication that change will slow down. So, survivors will learn to deal with it.
If you are building a business, staying ahead of and managing constant change is a paramount survival skill. Trend foraging will help you control and direct the types of change required if you want to build and maintain a strong business. The availability of vast amounts of information will help you know what you need to know to become and remain an industry leader.
Industry trend foraging is using as many methods as you can afford, to find out where your industry is now and where it is going in the future. Websites, magazines, blogs and industry conferences are the most logical resources to use. Use as many free sources as possible and if you value frugality, free resources will be more than adequate.
Norma D. Anderson in “The Importance of Watching Trends” suggests, “Network with other entrepreneurs, both in and out of your industry (I promise, you’ll gain some of your most valuable trend insights by talking to people in completely different industries.) Take advantage of social networking tools like LinkedIn and Facebook. Start or join groups on the networks and see what people are buzzing about. Pose questions about trends you are seeing.”
Interact with your customers as much as possible. This is probably one of your best sources of trending needs in your industry. You may need to simplify or enhance your product/service quality or delivery process to align with the changes your customers are experiencing. Try to determine the level of stress they may experience around your product/service and use this as a possible indication for innovation.
“You win by engaging with your most visionary customers to co-design new products and new processes.” Patricia Seybold
Proactive innovation, not reactive innovation, is a basic requirement for industry dominance in the Conceptual Age although both may be useful.
If you are using a proactive strategy you stay abreast of the current and changing trends in your industry. You identify opportunities for you to create or innovate ahead of the changes. You will allocate time and resources for proactive activities.
If you use a reactive strategy, you create or innovate in response to additional needs or requirements in your business or industry. Your creative or innovative actions take place only after you identify a need. Theses contributions may be helpful or even necessary to your industry but seldom put you ahead of others in your discipline.
“Nothing is done. Everything in the world remains to be done or done over. The greatest picture is not yet painted, the greatest play isn’t written, the greatest poem is unsung. There isn’t in all the world a perfect railroad, nor a good government, nor a sound law.” Lincoln Steffens
Trend foraging will help you plan your creative and innovative projects. You can determine the value of these projects to your business building efforts by testing them against your Purpose, Values, strategy and working Systems.
Test the feasibility of your creative and innovative endeavors.
You can test for system incongruities, demographic changes, customer perceptions and new knowledge. This will help you measure the efficiency and effectiveness of your creation or innovation. In addition, you’ll learn how much your customers will accept or adapt to your creation or innovation.
According to Branden Kelley in “Innovation is All About Value” “Innovation transforms the useful seeds of invention into solutions valued above every existing alternative..and [is] widely adopted.” If your innovation seems to have high value and improves upon the existing design and customers want it, you’re on the right track.
Does this seem like a daunting task? There is no doubt it is. It will take plenty of conscientious work. Building a business is a daunting task at its core. However, your love and dedication to your Purpose will pull you through the required tasks. Trend foraging can become a part of your regular schedule and you can make it a requirement for anyone joining your enterprise. This will allow you to stay ahead of the curve in all of your critical business Systems. Become a futurist and help create the future with regular trend foraging.
For System design and control see: “20 Directives for Small Business Success: Do or Die”
Great marketing plans are essential. No one will know about your service or product unless you put it out there so your potential customers can see it. Many small businesses fail or never grow because they don’t put enough time into marketing. However, it seems that many startups have gotten the message. Marketing is essential. As a result, they put tremendous time and resources into marketing efforts with very little effort put into other critical business functions.
Hundreds of marketing services can be found, particularly online, so entrepreneurs sometimes overestimate their importance. A great marketing service may drive customers to your business, but how will you keep them pleased and willing to come back again?
How will you handle the inevitable changes that come with business expansion? What will you do when the money is going out too fast? What will you do when customers require more than what you can offer? How will you handle too many customers? How will you make sure all customers are served in the same manner? When will you know when its time to hire someone to help in your business?
How will you embed and ensure excellence in all operations? How will you know when it’s time to scale or open another business? How will you manage employee performance? How will you keep up with changing customer needs and trends in your industry? How will you measure business results?
Are you feeling overwhelmed? Well, these are just a few of the questions you must answer for your business.
These and other questions are often left to chance and that’s why the businesses don’t last. New owners think they’ll magically find answers when various business situations come up. Unfortunately, answers don’t “come out of thin air.” For some reason its very hard for entrepreneurs to consider the big picture and understand the need to prepare for growth and success.
Most know they have the technical skills and more than likely, have had success with satisfied customers in the past. However, running a business and maintaining great product or service delivery must be designed consciously if you want to grow a larger business. You’ll also need to know how to perform the management skills needed to complete the actions indicated by the questions above.
Michael Gerber in “The E Myth” states: “Life is what a business is about, ….Coming to grips with oneself, in the face of an incredibly complex world that can teach us if we’re willing to learn. In this way, the Business Development Process can be thought of as a metaphor for personal transformation, for coming to grips with real life. For developing real skills within a structure of your own design.” A fantastic privilege!
Building a business in our fast changing environment is complicated and requires a change of mindset for success and growth. A mindset that includes a framework for business development, not just product or service delivery with marketing.
5 Reasons a strong emphasis on marketing only can lead to business defeat.
1. No strong and clearly defined Vision is adopted and used as a guide. There could be a tendency to perform tasks outside of the original Vision and splinter the business in too many directions.
2. Important Values are not embed in all business activities leaving customers confused about the promises of your brand, product or service.
3. No consideration of what will happen if the business begins getting more customers than you can handle efficiently or effectively. No plan for growth has been designed. Customers may become frustrated and leave with a bad reputation of your business. They will sometimes pass on the bad reputation to others and undermine your business growth.
4. No knowledge of what processes are working and what processes aren’t. Or even worst, no standard processes at all. This leads to a lack of reliable measurements leading to a “shot in the dark” approach for decision making. It’s frustrating to do it this way and the results are often frustrating as well.
5. Lack of standardized Systems for important business functions leads to irregular and unstable results. This fills you with feelings of uncertainty and anxiety about the future of the business. You eventually get overwhelmed and quit trying.
“No business in the world has ever made money with poorer management.” Bill Terry
If you want to escape some of the problems lack of proper business management causes, make time to get acquainted with basic management skills. Plan for success in the complicated business building process with emphasis on all required business functions, not just marketing. Actually, you should ask yourself the question Michael Gerber suggests: “How can I systematize my business in such a way that it could be replicated 5,000 times, so the 5000th unit would run as smoothly as the first?
Of course, marketing must be one of your strong Systems but you’ll also design and put adequate effort into budgeting , production, delivery, customer service and other Systemsrequired of your industry.
If you’re building a business, build it the right way according to current “best practices”. Avoid feeling overwhelmed and frustrated. You can then enjoy making a real contribution, financial freedom and experiencing your preferred life style. What are your feelings on this subject?
An easy guide to critical management skills: “20 Directives for Small Business Success: Do or Die”
Most of us don’t think about having many businesses with our name on them when we start out as business builders. We like the independence and prestige of owning our own business, so we work and work to keep paying the bills and perhaps, make a little profit in the one enterprise we have. I have a suggestion. Take a few moments to think about what could happen if you visualize several businesses from day 1. What would you do differently? What would you plan for? What steps would you take to build more than one business? How would the activities you engage in change?
Did you think about making sure that the same qualities of excellence and efficiency were carried out in all your businesses? Did you consider the kind of people you would need in each place? Did you consider what budget levels you would need to add a new business each time? There is a lot to think about if you want your business to grow and make a great impact to society in several locations.
Even if you don’t want to have several businesses with your name on them, using a growth and replication perspective can make your business stronger, more profitable and best of all, give you time to do other things. Your main purpose for starting your business was independence, achieving your purpose and financial freedom. With this financial freedom, you see yourself enjoying life. However, more than three quarters of all small businesses never achieve all of these goals. They may enjoy independence and purpose but financial freedom is still far away and there is hardly any time to really enjoy doing other things in life. Most spend many hours just keeping the business alive.
“There are no great limits to growth because there are no limits of human intelligence, imagination, and wonder.” Ronald Reagan, Actor and 40th President of the United States
The mindset required for building multiple strong businesses is call “generative thinking”.Generative thinking is the ability to hold a grand vision in mind while designing multiple definitive enterprises. In other words, your business building efforts are designed with the intent to repeat successful processes in several locations. It’s a growth and replication perspective. Initially, you may add one or two locations to your current enterprise and as they are successful, you will add more.
Does this sound like something from outer space? Are you wondering what kind of green tea I’m drinking? It’s true. You can actually plan to own several businesses with proven procedures.
Following are 3 basic things you will do as a generative manager:
First, you must have a deeply embodied and personal business Purpose. There must be a strong emotional and intellectual attachment to your Purpose or Mission. Kyle Zagrodzky in “7 Reasons Why the ‘Why’ is So Important in Business” explained the role of a Purpose with a clear analogy.
“Light moves in mysterious ways. A single beam of light can do a million different things depending on what it reflects through or onto. If you shine a ray of light into a crystal, you can see rainbows on the wall. Shine light onto a mirror, and you can project the beam into a dark corner. Tilt a prism just right, and you get one solid ray of rainbow colors. Focus a single laser beam just right, and you can slice steel.
Rediscovering the why in your business is like honing the laser to a razor point that’s sharp enough to cut through metal. The why isn’t just the reason you do what you do, it’s the consistent reminder that keeps you grounded, energized and focused. It’s your cause, your purpose, your motive and your proof. The why is the core belief in what you do.”
Your Purpose will take you through the disappointments, failures, and various difficulties that are normal parts of business building. Each time you experience a negative situation, you’ll be reminded of the ‘why’ you started the business. You’ll keep going.
Second, you will design a big Vision. This is a visualization of the ultimate outcome of your business building efforts. A good Vision is thoroughly designed and describes the dreams that you have for the enterprise(s) you are creating. A well thought out Vision has the following characteristics:
- It exhibits the purpose and direction of the business.
- It is supported by the established Values.
- It helps to set operational standards of excellence.
- It is believable and motivating.
- It is ambitious and challenging.
- It identifies the uniqueness of the business.
Your Vision is what your business will become in the future.
Third, your business strategy will be achieved through well designed Systems. This is the primary component that will make your enterprise repeatable. Without tested and enforced Systems, your dream of many businesses can’t be achieved. Small businesses that succeed, develop systems of operation for almost every function performed. See “The E Myth” by Michael Gerber and “Stick With It” by Lee Colan.
Business systems are activities performed in a consistent manner to achieve the business goals. Creating systems simply starts with documenting what you do and how you do it. It could be called an operations manual or a systems manual or some unique name that might come to you, but the object is to document the successful operations that you want to make routine.
“Organize around business functions, not people. Build systems within each business function. Let systems run the business and people run the systems. People come and go but the systems remain constant”
With effective dedication, planning, perseverance and resolve, you can become the owner of from 1 to 1000 businesses. The most important ingredient is how dedicated you are to your ‘why’.
Kyle Zagrodzky nailed it again when he shared:
“Sometimes, we just want to start something from the ground up, because there is no challenge like it. When things are first getting off the ground, entrepreneurs have to become experts in everything, from finance to marketing and everything in between. It’s an uphill climb like no other, and genuine entrepreneurs thrive on the drive required to crest that hill. Whatever the longest, worst day throws at you, it’s never, ever going to be dull.”
A simplified and clear starting point is to read and apply “20 Directives for Small Business Success: Do or Die”
“With purpose, a company can create positive value that is far greater than the sum of its parts.” Sherri Hakimi
A business Purpose or Mission is the GPS of your business. It’s your guiding star.
Sherry Hakimi describes the importance of Purpose this way:
“As a company, it’s important to think about why you are in the business you’re in. What drives you? If your business succeeds, what would your ideal world look like? When a company demonstrates an authentic purpose, consumers feel a connection to the products and company. They will choose the authentically purposeful company’s products, even if it’s not the cheapest offering.”
How do we find a business Purpose?
Your Purpose comes from a desire to contribute something to the economy. Your Purpose can be mainly economic progress for yourself and partners or it can be geared toward economic progress as well as contribution toward a improved society. You have designed either of these from your personal beliefs, values and desires. Therefore, your Purpose is a deeply held expression of what you believe you can do with your business.
Are you excited about your business venture? Are you fulfilling a life-long dream? Are you excited to get up everyday to work on your venture? If you answered yes to these questions, you may have a deeply embodied business Purpose. A deeply embodied business Purpose (Mission) is a purpose that motivates you dramatically, gives you a sense of well being and brings you joy. If this is the state you’re in, congratulations. Your business has a much higher chance of success than many of the businesses of your entrepreneurial colleagues.
Craig and Snook in “ From Impact to Purpose” explains: “Business experts make the case that purpose is a key to exceptional performance, while psychologists describe it as the pathway to greater well-being. Doctors have even found that people with purpose in their lives are less prone to disease. Purpose is increasingly being touted as the key to navigating the complex, volatile, ambiguous world we face today, where strategy is ever changing and few decisions are obviously right or wrong.”
A strong business Purpose/Mission can create a legacy in these ways:
It will provide a strong foundation for your Values, Vision and Strategy. Everything you do in your business will spring from your Purpose. You will have definite parameters for decision making and System building.
You will facilitate an “adaptive business culture” with your Purpose as the anchor. Our fast changing environment will require the ability to make rapid changes and innovations. An adaptable culture supports the continuous flexibility your business will need. As a result, you will need something to direct and ground you activities. A strong Purpose performs this function.
You will create and sustain a great reputation. A strong Purpose will draw employees and customers to your organization and if that Purpose is promoted over time, your reputation for consistently delivering according to your Purpose will spread.
Following are some great examples of how deeply embodied purpose works in reality.
Birkenstock 243 years
The core of their Mission/Purpose is: “Birkenstock is deeply rooted in the fine art of crafting premium quality shoes that are good for you.”
Delta Airlines 90 years
“Delta Air Lines Mission Statement: “We—Delta’s employees, customers, and community partners together form a force for positive local and global change, dedicated to bettering standards of living and the environment where we and our customers live and work.”
Southwest Airlines 38 years
“Our Purpose is: To connect People to what’s important in their lives through friendly, reliable, and low-cost air travel.”
Amazon 23 years
“Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”
All of the Purposes described are very broad. They allow for any technological advance or other changes that relate to their industry. They address social needs or challenges and are designed as economically feasible business models.
“Most of us go to our graves with the music still inside us, unplayed. Oliver Wendell Holmes
Don’t be like “most”. Design your entrepreneurship because you can do anything you want to do! The information available to everybody today can hep you build a genuine legacy. Designing a Purpose that energizes you should be your first step. This can also move you closer to building your legacy.
Easy to apply business building guides: “20 Directives for Small Business Success: Do or Die”