Category Archives: Business

• The secret to growth in a recession: Motorboat vs. Sailboat

  Saturday, June 13th, 2009 by Wes Ball

  As I have watched a broad range of businesses react to this slow economy, something hit me about the differences between those who are thriving right now and those who are either dying or barely surviving.  The thrivers are all “sailors.”  The fatalities (even if they are only dying slowly) are motorboaters.

  Here’s what I mean:

  Motorboaters need to have all the fuel on board necessary to reach their destination before they start off.
  Sailors only have to have the tools and knowledge to take advantage of what they find along the way and stay out of serious trouble.

  • Motorboater businesses worry about moving forward without a clear view of how they are going to get there and confidence that they have enough “fuel” to make it without problem.
  • Sailor businesses move forward with the confidence that they can navigate to the resources they need, as long as they are creating sufficient demand which “floats” their vessel.

  Motorboaters expect to take a straight line path to their destination.
  Sailors expect to take a constantly changing course to reach their destination.

  • Motorboater businesses believe that they should somehow get to their destination smoothly and predictably.
  • Sailors know better and count on using the surprises along the way to help them.

  A motorboater expects to get to his destination as quickly as possible, with the fewest detours, and is upset if he misses the cocktail hour at the other end.
  A sailor enjoys the trip and doesn’t need the cocktail hour to have enjoyed the journey, because the joy was in the process of getting there.

  • Motorboater businesses hold on to an entitlement attitude.
  • Sailors enjoy the ups and downs and the detours along the way without the need for further gratification.  Look at the offices in sailor companies: they are trim, minimal, and functional.

  Motorboaters get extremely worried and begin to panic when their boat tips and water is rushing along one of the the gunwale.
  A sailor knows he has the opportunity to go faster and gain more ground when his boat tips and water is rushing along one of the gunwale.

  • Motorboater businesses panic easily and start “bailing” persons necessary to their future success as soon as they see difficulties ahead.
  • Sailor businesses make sure everyone knows their job and helps them work together to gain success.

  When a motorboater believes his fuel to reach his destination is below the minimum required, he starts to call for help, slows things down, and wallows in the sea.
  When a sailor starts to lose the wind he needs, he moves to where better wind is or simply waits patiently for the wind to come back, as it always does.

  • Motorboater businesses are victims of the economy.
  • Sailor businesses are opportunists.

  A motorboat must maintain power to sustain itself in a heavy storm, otherwise it wallows and is soon capsized.
  A sailboat can maintain itself in a storm without any sails and choose to either run before the storm under “bare poles” or turn bow into the wind and ride it out using a “sea anchor” to make it go slightly slower than the oncoming seas.

  • Motorboater businesses require too much investment to sustain themselves during economic downturns.
  • Sailor businesses can keep moving or just survive with far less investment.

  When the seas get a bit rough and the boat begins to rock, a motorboater will most often either run for port or just hold position, get seasick, and wait until things get better.
  When the seas get a bit rough and the boat begins to rock, sailors know they can make even better speed; they just shorten sail a bit.

  • Motorboater businesses require far more exaggerated responses to difficulties in order to survive.
  • Sailor businesses can reduce their response and still move faster.

  Most large businesses act like “motorboaters.”  That’s why they have to cut people and budgets as soon as they see potential trouble ahead.  They head for port and ride out the difficulties.  They are victims of the economy, not drivers of it.

  The most successful entrepreneurs are “sailors.”  They know how to spot new wind, how to take advantage of changing tides and currents, and they drie their businesses based upon what they come across.  They are the drivers of a new economy, because they are the ones out front discovering what’s ahead.

  Sadly, far too many small businesses try to emulate large “motorboater” organizations.  During tough economic times, they make the same mistakes, but they don’t have the resources to survive as long while doing the wrong things.

  The secret is to make your organization more of a “sailor” organization.  Watch for the wind.  Move to where it is.  Don’t panic when things look tough, but recognize the opportunity to accelerate while others founder or run for port.

  Wes Ball is the author of The Alpha Factor.  He has sailed for more than 30 years in both cruising and racing boats on both coasts and in the great lakes.  He is also a business owner, executive coach, and business turnaround consultant.  He has created growth for businesses in three recessions, even while their competitors are foundering.
  

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• Top nine mistakes owners of small to medium sized businesses make during an economic downturn

  Wednesday, May 6th, 2009 by Wes Ball

  I see many articles being written about how to survive this economy.  Few, however, point to how to create growth.  Well, here are nine mistakes that, if avoided, will force you to grow, while your competitors continue languishing and complaining.

  Mistake #1:  Believing that price discounting will overcome the problem

  Discounting only makes things worse.  Every time you discount your product, you prove that it really wasn’t worth what you originally said it was worth.  It takes a lot longer and requires a lot more investment to raise your prices than it does to lower them.  So it is worth finding ways to sell why you are worth more rather than taking what looks like the easy way out and cutting prices to try to attract customers.

  Mistake #2:  Following big companies

  I continually wonder why small to medium-sized companies are so infatuated with large companies.  Perhaps the fact that I have worked as an employee in two of the largest and have consulted with more than 50 of the Fortune 500 on creating growth helps me keep a more rational view.

  The fact is that larger companies are not as profitable, not as flexible, not as nice to work for, and not as capable of creating dramatic growth as smaller companies are.  So why do so many smaller companies try to emulate what big companies do?

  During tough times most big companies hide out.  They cut costs, often eliminating the very things they need to create future growth.  They make their employees miserable and demoralized.  They make suppliers dislike them.  And they generally behave like angry pouting children.

  Don’t follow that.  Use your strengths to be aggressive and visible, while the big guys are hiding.  Invest wisely in the things that will make you stronger and more attractive when things turn around.  (These things will also make you more attractive now.)  Make employees glad they work for you.  Make suppliers so happy to work with you that they will turn down calls from larger companies to help you instead.  And act like an Alpha – confident, calm, and controlled no matter what the marketplace seems to be doing.

  Companies that follow this model invariably take share from their larger competitors.

  Mistake #3:  Following competitors

  Leading is the key to long-term success and greater profitability.  Every time you follow what a competitor does, you make that competitor look better than you.  You should be looking for something different that you can do that makes you look smarter and better.

  Finding that “something different” requires an understanding of what customers really want to buy, not just what they have been forced to buy.  You need to discover what will make people feel better about themselves (smarter, more knowledgeable, more appreciated, more powerful, etc.) and what will make them believe that other people think better of them (envied, more attractive, smarter than they, etc.).

  Mistake #4:  Believing that leadership during tough times comes from the top of the company

  Contrary to popular belief, success does not come from the top.  Great leadership at the top may make it easier for a company to thrive and grow, but long-term, self-sustaining success comes from much further down the corporate ladder.

  The most successful companies of any size know that it is much easier to be successful and to create growth when every employee becomes a leader of positive innovation and growth.  The best thing a manager can do is to engender a “leadership” and “innovation” attitude among all employees.  They should believe that you want new ideas to lead the company into a leadership position and they should be rewarded for helping that be accomplished.

  While other companies are trying to get more out of terrified, demoralized employees during tough times, you should be engendering a more positive attitude of teamwork to move forward.

  Mistake #5:  Believing that you can’t affect change until the new market defines itself

  Right now is the best time to invest in growth… before things get better.  Why?  Because while almost everyone else is holding back, the companies that confidently define what the market will become will be the leaders coming out.

  It happens in every recession.  But in this one, this may be more true than ever before.  Large companies may never be the same after the government has terrified both corporate boards and stock holders with their heavy-handed tactics of government control.  Many smaller companies have the opportunity to make huge, sustainable strides right now, while larger competitors are wondering how to even run their companies in the future.

  Don’t miss this opportunity.  Become the definer of the future and you can be its leader.

  Mistake #6:  Believing that product or technology innovation is the secret to success

  Products and technology are the things that you may sell, but they are not what people buy… except when there is no better alternative offered.  People want to feel better about themselves.  They also want other people to think better of them.  You can innovate in these areas for far less investment and greater return on investment than you can with any product or technology innovation.

  New products or technology drive entire new markets or business models.  These can occasionally create dramatic growth, if sufficient investment in made.  Innovation in helping people feel better about themselves and better about how others think of them is far less cost intensive and drives far greater ROI more consistently.

  Mistake #7:  Believing that you must improve on product quality or performance to demand a higher price

  Actually, most of the highest-priced products in the world are not superior in either quality or performance.  People prefer to buy ego-satisfaction above function. In fact, in my 15 years of research into how to create dramatic, self-sustaining success, I discovered that people will pay almost anything to feel better about themselves and to make other people think better of them… even when the product or service being offered is of lower quality or performance than competitive products.  At least as long as “minimum” functionality is provided.

  Harley-Davidson, Victoria’s Secret, Mercedes, Tiffany’s, and John Deere are just a few of the Alpha companies I studied that sell more for higher prices despite lower quality or performance than many competitors.

  You can sell more by innovating to provide greater ego-satisfaction than by innovating to create greater functionality.

  Mistake #8:  Believing that cost-side management alone can save you from trouble in a tough economy

  You can’t “save” your way to sustainable success or growth.  Cost-side management has created many spectacular failures, but revenue-side management has always been the key to real growth.

  If you wish to grow (especially with sustainable growth), you must focus upon the revenue-generation side.  And right now is a better opportunity for revenue-side growth than there was two years ago.  Customers still have needs, even if they may be looking for things to put off until later.  The winners will be those who address the most burning needs with believable promises of ego AND functional needs satisfaction.

  Mistake #9:  Believing that growth cannot occur during tough economic times

  While the press and other media focus upon the failures and the reasons for fear, there are a few companies in almost every product or service category that will create sustainable growth without discounting during a recession.  There is no better time for significant, sustainable changes to occur in markets and product categories than during an economic downturn.

  This is your chance, so take advantage of it.

  When the marketplace gets tough, all that means is that someone has a chance to define a new future for the category.  If it’s not you, then it’s someone else who you will end up having to follow once things get better.  If you’re happy with following behind someone else, picking up whatever is left over, then ignore everything I’ve said.  However, if you want to take control of your market or category and make others follow your lead, then avoid these nine mistakes and watch yourself grow.

  If you would like to understand how to overcome these nine mistakes and grow your business no matter what the economy is doing, you need to read my book, The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success. You can get your copy for just $24.95 at www.ballgroup.com, or you can buy it through any online bookstore.

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• Grow your business by hiring Alpha-style superstars

  Monday, February 9th, 2009 by Wes Ball

  How can you make your staff an Alpha “superstar” staff?  The answer is not to put the right people in the right seats.  It’s putting only superstars in those seats.  Here’s how you can make that happen…

  Your staff is second only to what you sell in defining how successful you will be at growing your business.  As an employer, I have had great teams; I have had almost great teams; and I have had mediocre teams (thankfully, only in my early days as a business owner).  The difference in results was dramatic, as a focus upon hiring excellence increased. 

  Employee teams who are committed, talented, persistent, and ready to do whatever is needed can accomplish almost anything.  Employee teams that have to make up for even a few weak members have a much harder time even accomplishing the minimum.  Any company aspiring to become an Alpha has to address this issue early and with a commitment to not give up even after your entire team is superstars.

  I was at a conference a week ago, and I heard John Bisnar, a very successful “Alpha” attorney in California, describe how he gets and keeps the best employees.  His process for getting and keeping “superstar” employees is a worthwhile model for any aspiring Alpha to look at.  It’s certainly a strategy that has merit for any business of any size.  In fact, a version of this is used by Andy Grove at Intel, one of the few long-term Alpha’s still maintaining its Alpha position today.

  The strategy is pretty simple in concept, but, like most things that really work, it is hard to stick to and implement consistently.  Here’s how John’s version could be applied to your company:

  Start with a clear definition of what a “superstar” employee would look like in your company.  Write a list of the specific attributes and behaviors you would expect from someone you would consider an “outstanding” performer you would not want to lose to someone else.  This is not a job description.  This is a description of how a superstar employee works and acts.

  For instance, your list might include things like…

  • extraordinarily skilled
  • anticipates needs
  • arrives early and is already working at “start” time
  • works well as a team participant
  • never says, “That’s not my job”
  • thinks creatively “outside the box”
  • models how all employees should behave
  • extremely productive
  • understands and is committed to the company’s mission

  John Bisnar’s team came up with 25 attributes that they believed describe a “superstar” employee in their company, no matter what specific job title they hold.  When they hire, they only hire someone they believe will become a superstar, as defined in that list.  They look beyond just how much experience the person has or what success they have created in the past.  They look for signs that this person has what it takes to become a superstar.  

  That means that they look at how the person is motivated, and how that matches with the company’s environment and motivational system.  It means they look at potential as much as past experience, as long as the skill sets are already in place for the job being filled.  It also means that they are weighing how a person likes to please others and how well that fits within the model the company follows with its customers and other employees. 

  If they don’t see a clear indication of a superstar, the person doesn’t get hired.  There is no hiring for a “B” team.  

  Everyone is held to the same standard of excellence.  When a person proves that he is not going to become a superstar, he is gone as quickly as is practical.

  Why this obsession with excellence?  Because in order to become and stay an Alpha, you have to be absolutely committed to having the right team driving your company.  The difference is not just how much people enjoy coming to work and working with each other.  It is also a matter of how much horsepower you are efficiently putting to the wheels of your daily efforts.

  More gets done with more effectiveness and greater return on investment, because every great employee spurs on every other great employee.

  How many times do you hear employees complain about how another employee is not contributing as much to the team as should be expected.  Certainly, as the employer or manager, you don’t hear it as often as they are telling it to others.  Mediocre or lazy employees are a drag on the entire organization, both in direct efficiency an in poor morale created.

  So how do you implement such a process, when you already have “B” or “C” team employees on staff?  John Bisnar’s plan is a good one.  When he instituted this, he divided all employees into three groups:  

  • those who were already superstars
  • those who might become superstars
  • those who would obviously never become superstars

  The last group was replaced as quickly as possible.  The second group was challenged to become superstars and given a clear definition of what that looks like (that’s where the list of superstar attributes really comes in handy).  If they didn’t make it in a short period of time, they too were replaced.

  Then, here is the most important part:  How do you keep your superstars?  Certainly, every other employer out there would love to have more superstars.  So, the superstars you have need to be continually “loved.”  That simply means that they want to recognize that the company (and especially top management) sincerely appreciates what they are doing and the effort they are making to help the company reach its goals.  You want them to not even consider an offer from a competitor.

  That doesn’t have to mean money, although that might be the motivation for some.  Actually, many research studies over the years have shown that being valued as an employee is demonstrated by being clearly noticed by top management and by being included in hearing what is going on, what the company is planning to do, and being invited to participate in that process.  

  As the Alpha model has proven over and over again, money is never as big an incentive as is feeling “successful” in what you are doing and knowing that others notice and care about you.  Those are the employee versions of the “self-satisfaction” and “personal significance” factors of the model.

  Can you succeed without following a superstar-only model?  Certainly.  It just takes longer and costs more.  

  There are Alpha companies now and in the past who did not have superstar teams.  But that typically became more of a problem after they became Alpha’s, because once a company gets comfortable, it often loses sight of what got it there.  

  What I have seen is that having a “B” team staff makes it a longer and more expensive process than having an “A” team.  There are just too many stumbles and too much pressure on the superstars that are on staff to enable the kind of sustainable success that should be anticipated as you move toward Alpha status.

  You can become an Alpha.  If you are an aspiring Alpha and don’t already have a copy of The Alpha Factor – a revolutionary new look at how to really create market dominance and self-sustaining success, you can get a copy at www.thealphafactor.com or at almost any online bookstore.

  If you would like to know more about John Bisnar, visit his website at www.bestattorney.com.

   

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