Winning on the uphills

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Interesting business lesson learned on a bicycle: it’s very difficult to improve your performance on the downhills.

I used to dread the uphill parts of my ride. On a recumbent bike, they’re particularly difficult. So I’d slog through, barely surviving, looking forward to the superspeedy downhill parts.

Unfortunately, I had a serious accident a few years ago (saving the life of a clueless pedestrian by throwing myself onto the pavement). Downhill might be fast, but it’s crazy.

Lesson learned. Now, I look forward to the uphill parts, because that’s where the work is, the fun is, the improvement is. On the uphills, I have a reasonable shot at a gain over last time. The downhills are already maxed out by the laws of physics and safety.

The best time to do great customer service is when a customer is upset. The moment you earn your keep as a public speaker is when the room isn’t just right or the plane is late or the projector doesn’t work or the audience is tired or distracted. The best time to engage with an employee is when everything falls apart, not when you’re hitting every milestone. And everyone now knows that the best time to start a project is when the economy is lousy.

Most of your competition spend their days looking forward to those rare moments when everything goes right. Imagine how much leverage you have if you spend your time maximizing those common moments when it doesn’t.

The posture of a communicator

If you buy my product but dont read the instructions, thats not your fault, its mine.
If you read a blog post and misinterpret what I said, thats my choice, not your error.
If you attend my presentation and youre bored, thats my failure.
If you are a student in my class and you dont learn what Im teaching, Ive let you down.

Its really easy to insist that people read the frigging manual. Its really easy to blame the user/student/prospect/customer for not trying hard, for being too stupid to get it or for not caring enough to pay attention. Sometimes (often) that might even be a valid complaint. But its not helpful.

Whats helpful is to realize that you have a choice when you communicate. You can design your products to be easy to use. You can write so your audience hears you. You can present in a place and in a way that guarantees that the people you want to listen will hear you. Most of all, you get to choose who will understand (and who wont).

Debt, equity and a third thing that might work better

If your business needs money, it seems as though you have two choices:

  1. Get a loan from a bank
  2. Raise equity from an investor, giving up part of your company in exchange

Banks are everywhere, so the idea that they can loan us money seems obvious. And venture capitalists and the companies they fund are in the news all the time and making a billion dollars sounds like fun.

Here’s the thing: for most businesses, most of the time, neither is a realistic option.

Banks aren’t in the business of taking risk. Which means that they make boring loans to boring companies for boring purposes. They do everything they can to be risk-less. Which means you need to guarantee the loan with your house or with assets worth far more than the loan. Which means that a good idea is not a sufficiently good reason for a loan.

And equity? Well there are two problems. The first is that the number of investments that professional VCs can make is microscopically small compared to the number of businesses that want them. A bigger reason is that if there’s no obvious and reliable exit strategy (like going public or selling to a huge public company) then there’s no rational reason for someone to make an equity loan. The entire upside comes when you sell, and if you can’t easily sell (which is most businessesthey’re even harder to sell at a profit than a used car) then there’s no VC investment to be had.

But that doesn’t mean you’re stuck. I’d like you to consider the idea of selling part of your income.

It works like this: you have an idea, a fledgling business or a new market to enter. You find an amateur investor (a wealthy dentist, a retired executive) and raise the money to bring it to market. And in return? The investor gets $xx for every unit you sell. From the first one until forever.

No fancy bookkeeping, no board meetings, no worrying about the accounting. Instead, you pay a royalty on income. The rest is up to you.

Of course, this is exactly how the math of book publishing works. The publisher puts up money and keeps 80 or 90 percent of the income. You get the rest.

It could even run on a sliding scale, with early royalties to the investor being lower, or with a buyout once a certain amount was earned back If you needed $5,000 for some tooling, perhaps you could offer an investor $100 for every unit you sell until you’ve paid her $10,000, then $40 a unit forever after that. (typos fixed, sorry).

Need to raise money for a restaurant? It’s hard for an investor to figure out how to win by owning equity (because it’s so easy for the owner of the restaurant to manipulate profit). But if the investor gets 4% of every check paid, that’s money back starting on the first day.

Investors are as irrational as the rest of us. They buy a story and expectation about risk. They buy the excitement of upside. They buy an opportunity to turn one thing into another. Banks want a boring story. Other investors might like this alternative story quite a bit.

My general bias for entrepreneurs starting out is to bootstrap their business, because raising money is so hard and so distracting. But if you’ve set out to do something that needs cash you can’t raise any other way, this is worth exploring. Tell a story to an investor that wants to hear it, and create a cash-flow

Its not the rats you need to worry about

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If you want to know if a ship is going to sink, watch what the richest passengers do.

iTunes and file sharing killed Tower Records. The key symptom: the best customers switched. Of course people who were buying 200 records a year would switch. They had the most incentive. The alternatives were cheaper and faster mostly for the heavy users.

Amazon and the Kindle have killed the bookstore. Why? Because people who buy 100 or 300 books a year are gone forever. The typical Customer buys just one book a year for pleasure. Those people are meaningless to a bookstore. It’s the heavy users that matter, and now officially, as 2009 ends, they have abandoned the bookstore. It’s over.

When law firms started switching to fax machines, Fedex realized that the cash cow part of their business (100 or 1000 or more envelopes per firm per day) was over and switched fast to packages. Good for them.

If your ship is sinking, get out now. By the time the rats start packing, it’s way too late.

Projects vs tasks

Your job might be a series of tasks. Tasks are work where money is traded for time and effort. You put in a fixed amount of time, expending effort along the way, and you get paid. In the end, tasks are completed and its up to the boss to weave those tasks together into something useful.

The person at the front desk of a hotel is probably doing a task. So is the lineman working on a high power line. The easier a job is to get, the more likely it involves doing tasks.

The alternative is projects.

The way a project gets done is up to you. Your goal is to create an extraordinary outcome, not to perform the tasks. The work done is simply a means to an end. If you can figure out how to do less work or different work and still create project magic, thats exactly what you should do.

The challenge is in owning the project. To say, Im going to engage with this customer in a way that changes them from frustrated to loyal, as opposed to saying, Im going to move this paper from here to there.

Claim the project before you start the work.

Initiative

The only way to get initiative is to take it. Its never given.

And some people hesitate to take it, perhaps because theyre worried that well somehow run out.

Were not going to run out. Its a self-renewing resource.

From an early age, most of us were taught to avoid it. Do your homework. Take out the trash. Wait to get picked. Wait to get called on. Become popular. Fit in. Maybe stand out, but just a little bit. Failure is far worse than not trying.

The alternative is to take some initiative. On behalf of those you seek to serve.

Go ahead, theres plenty to go around.

The travel agents problem

Not just travel agents, but all agents.

Information scarcity is disappearing.

Forty years ago, passengers didnt know which airline flew where and when. And forty years ago, airlines had no easy way to find out who wanted to fly somewhere. Today, of course, theres no shortage of information or ability to connect. So paying 10% of their revenue to a human who will use a terminal instead of the passenger using a computer hardly makes sense for the airline.

Movie studios used to have to wrestle with information scarcity, and so did talented creators. Actors werent sure who was making what, and studios had imperfect information about who to cast. Today, IMDB (and proprietary tools) surface enormous amounts of information for the studios. They know who is working on what, who is a pain in the neck, who can add to the effectiveness of the project. And the creators are part of networks, formal and informal, that get them information faster and more efficiently than a single human often could.

The same thing is happening to car dealers. In fact, just about any job where you used to hoard information and charge a fee is now in danger.

When your clients know more than you do, its difficult to be an old-fashioned agent who is making money based on information scarcity.

The alternative is to become a network hub who creates value through information abundance.

Two buttons on offer

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Every person in your organization needs to wear a button.

And they can choose one of two. The choice is up to them, but they have to own it.

One button says, I dont care.

The other button says, Id like to help.

Its entirely possible that youve managed your way into a bureaucracy that acts like its wearing the first button. If thats true, admit it and have you and your team put on the buttons. Youll save a lot of heartache by telling us and your co-workers the truth.

On the other hand, if you want the satisfaction that comes from wearing the second button, youve got to keep the promise.

Make a habit/break a habit

If youre trying to help yourself (or those you serve), the most effective thing you can do is create long-term habits. They become unseen foundations of who we will become.

The goal of running a marathon in six weeks is audacious, but its not a habit. You might succeed, but with all that pressure, its more likely youll simply abandon the project.

On the other hand, the goal of running to the mailbox (at least) and back for 50 days in a row is the sort of habit that might stick.

The same goes for education (we do flashcards every day is very different from I need to cram to learn quantum mechanics for the test.)

And it goes double for our lifestyles. If you can replace a bad habit with a good one, youll live with the benefits for decades.

The challenge is to set up systems that are likely to create habits, not sprints that lead to failure.

29 Motivational Quotes for Business and Work..

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Some days a motivational quote can provide a quick pick-me-up for employees and even management. They can be a breath of fresh air when it comes to a drab afternoon.

These are also a great way to jazz up a newsletter or a memo or even to simply print and attach to a bulletin board. Using quotes like these are perfect ways to create a motivational and successful work environment.

As Mr. Rick Pitino says “The only way to get people to like working hard is to motivate them. Today, people must understand why they’re working hard. Every individual in an organization is motivated by something different.” –Rick Pitino

Motivational Quotes:View all here