Beautiful Strategy; Deadly Execution

photo © 2009 Matt Hendrick | more info (via: Wylio)

One of my clients recently contacted me about yet another e-mail he had received, which he considered to be SPAM. We are all getting more and more annoyed with SPAM, regardless of the effectiveness of our filters. SPAM forces us into a huge waste of otherwise productive time, to deal with the nuances of those who would inflict their unsolicited marketing efforts and avarice upon us.

My client had received an unwanted e-mail “offer” for something from a company which produces software he uses in his business. He complained to the company. They responded, apologizing (something I find exceedingly rare these days), and said they would remove him from their e-mail list. End of story, right? Of course not!

He got more e-mail and even a phone call. As it turns out, the company, somewhat amazingly, felt it had to continue to apologize because they had turned their e-mail marketing efforts over to a “respectable third party” which, as they said, had created what they considered a “fail-safe mechanism.” This mechanism was designed so that when the “respectable third party” company received an “unsubscribe” message, the primary company was “blocked” and could no longer communicate with the “customer” by e-mail.

Bottom line seemed to be that my client continued to get hassled, possibly because multiple e-mail lists had been generated at some time after his initial subscription to an online professional publication he used in his business. Neither the primary nor the “respectable third party” e-mail marketing guru company seemed to be able to find where the continuing stream of e-mail was coming from, and so the SPAM continued.

My client finally got a total refund for his subscription, but during the process, felt, as many of us do, that, like the thermostat in a hotel room, the unsubscribe button seemed to be for show. I’ve actually read a few articles which caution against clicking on the unsubscribe button because some marketing companies use it to verify that they have actually hit a “live” e-mail address, and thus ramp up their marketing efforts on this newly verified e-mail account.

What we have here is a failure to communicate, effectively. (With apologies to Cool Hand Luke and Paul Newman)

It looked to me like this company did make a much better than average attempt to do what they could to “make things right” for my client, including the personal phone call, apparently thoughtful letter and e-mail, and presumably full refund. Key words, however, are “average” and “what they could.”

This point coincides with a growing frustration I have with big and small companies. That includes a recent attempt to redirect a birthday present I had tried to get shipped to a relative. I was presented with a logistics system from one of our major package “facilitators,” that apparently does not include humans, and a previously well rated vendor who, no doubt, intentionally conceals any ability to investigate the status of shipments or contact a human, once your credit card payment is accepted.

I likewise recently tried to get my hands on a software shipment that was mistakenly delivered to the wrong address. Being at least a semi-nerd, I went to the package “facilitator’s” Web site to redirect or attempt to pick the package up, since it seemed to be floating around town faster than I was. The shipping agent’s notice on my office door indicated the package was accompanied by a “don’t turn it over unless you get his signature” caveat. From the facilitator’s Web site, I happily changed the pick-up location to indicate I would drive 20 minutes away and pick it up from the local distribution hub, rather than chasing the drivers around town.

When I got to the hub the next day, however, I was actually told by the facilitator’s employee that the package had been delivered to my office’s next door neighbor, who had apparently been kind enough to sign for it, and that the Web site deal pretty much never seemed to work. It took several days, e-mails and phone calls with my office neighbor to coordinate with her part-time schedule to finally get the software, at no small inconvenience to her or me. 

Back to key words: “average” and “what they could.” I’m pretty well fed up with companies who cannot control their technology, and particularly those who tout the strength and efficiency of their logistical technology assets. Your experiences and mine, although different in many respects, may be similar in that more and more of these companies seem to have made a deal with the “devil” in order to leverage their business.

We all face this issue from time-to-time, but I’m afraid some aspects of the technology some companies use seem to be taking on a life of their own, not unlike the “Terminators” and “Cylons” of science fiction fame. I’m actually now starting to worry about whether I should unplug my iRobot vac in the basement when go to sleep at night or am away from home.

The efforts of my client’s vendor did appear sincere and beyond what most companies seem to be willing or capable of doing in such situations. I understand economies of scale and that a vendor can probably ship something more cost effectively through a company which focuses only on logistics. I also realize there may be a further economy of scale for the vendor if it turns over other functions, such as e-mail marketing, to other companies that concentrate only on that.

The problem seems to be developing and monitoring an effective way for the primary company to retain control of the whole process. In the 1984 science fiction film The Terminator, by James Cameron (more recently of Avatar fame) the premise was that mankind had developed an artificial intelligence system, including a network called Skynet. That AI network was so sophisticated that it became self-aware and then set about to eradicate the pesky and less efficient humans who built it. The humans fought back and were on the verge of winning back their planet. Skynet, according to the story, then used emotionless cyborgs they had created called Terminators, to try to kill off the survivors.

These Terminators were very effective because they had no emotion. They were totally focused upon the goals they were programmed to achieve. Does this start to sound, even remotely, like a company with good intentions, turning various core functions over to “respectable third parties” who, in turn, create a fail-safe system to prevent errors? When the next step is turning your customers into the “resistance,” is it possible it might be time to rethink your strategy?

I believe it was Winston Churchill who said: “However beautiful the strategy, you should occasionally look at the results.” Some companies may be creating their own Terminators, as part of their effort to improve efficiency and their own bottom line. The bottom line, however, could be terminating their customer base, and in turn, themselves.

 

Join the Applied Entrepreneurship group on LinkedIn. Membership is free and I try to post about ten articles a day there. We have some great discussions going and if you are an entrepreneur, we hope you will join us.

Save Your Business

This is a collection of articles I have found interesting and, hopefully, useful in our current economy. All of these deal, in one way or another, with strategies, tools, methods, and techniques to make the most out of what you have or to take advantage of what others might think is a bad situation. They deal with cost savings, harvesting, economies, and other planning and implementation techniques, which are part of applied entrepreneurship. I hope you will find them useful, will comment if that might help others, and will suggest other, similar articles you have found valuable.

What you find below is a “starter set.” I plan to add many more shortly, and to keep adding as long as there appears to be an interest.

Since I’m a lawyer, I’m compelled to state a disclaimer. I have not received anything from any of the companies, so I have no axe to grind on any of these tips or the companies mentioned.  I do serve as a pro bono SCORE counselor with the Louisville, Kentucky chapter of SCORE.

I also do not endorse any of what you find below, but I would not have put them there and published this list if I didn’t think there might be merit for some in considering what is said, suggested, or offered below. As we lawyers love to say, caveat emptor (let the buyer beware).

COST CONTROL

Cost Control Tips for Your Business

“As more and more small businesses are failing each day, companies are trying to develop new strategies in order to stay alive and earn profit. It may be the perfect time to shed a light on some useful small business cost control tactics and the fact that they can mean the difference between success and failure of a business.”

INVENTORY CONTROL

How to Cash in on Your Excess Inventory

“Excess inventory can be a serious financial drag for any business. But what to do with excess items – no matter what they are or where they came from – can be a difficult dilemma…”

MANUFACTURING

Free or Low Cost Help for Small Manufacturers

“There is a low-profile but high-octane national network of 393 manufacturing assistance centers —stocked to the gills with cutting edge expertise — whose sole purpose in life is to help small widget makers like yours become more tech-savvy, more efficient, more competitive and more profitable…”

SHAPE UP YOUR BUSINESS

6 Weeks to a Better Bottom Line

“You have to be pretty lean now, but there are opportunities to grow if you are in a position to take advantage of them,” says Edward Marram, a senior lecturer at Babson College’s Arthur M. Blank Center for Entrepreneurship in Wellesley, Mass. “It’s a good time to evaluate your business, find ways to conserve cash and improve. Then look at where other competitors aren’t making it and go after those opportunities.”

50 Ways to Save Money in Your Business

“On a shoestring budget (and what entrepreneur isn’t?), it really pays to scrimp and save. Just in case you’ve forgotten the value of a hard-earned penny, we’ve come up with a slew of money-saving ideas to boost yourbusiness’s bottom line-from cutting your legal bills to inexpensive ways to draw in customers. Though some tips will save you more money than others, the end result of your overall spendthrift strategy could add up to a bundle.”

RESOURCES AND LISTS

The Top 100 Resources for Small Business

“The What Works for Business 100 is our annual list of the best websites, organizations, products, services or other solutions for your business. Some are household names — others you’ve probably never heard of. The common bond is that they are terrific at what they do and can help your business in a critical area.”

“What Works for Business continuously seeks out, rates and analyses thousands of business resources.”

Small Business Resource Links

“These links are provided for the convenience of SCORE Web site visitors. They are not an endorsement of the companies or Web sites listed, or the products and services offered by them.”

SCORE

SCORE is a Resource Partner with the U.S. Small Business Administration. It provides free counseling as well as low cost seminars. The Web site provides numerous resources for small business owners.

Business.gov

IRS – Tax Information For Businesses

SBA

SBDC Locator

USA.gov

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Join the Applied Entrepreneurship group on LinkedIn. Membership is free and I try to post about ten articles a day there. We have some great discussions going and if you are an entrepreneur, we hope you will join us.

Lessons I Learned Today 6/23/09 – Entrepreneur Crowdsourcing

This is a digest and recap of highlights, quotes, and comments from articles and discussions posted on this date on the Applied Entrepreneurship, LinkedIn group site.

  

*Traits of a Successful Entrepreneur

“Success and failure always depend on the entrepreneur.”

Here are the traits of a successful entrepreneur:

• Whether short term or long term, a successful entrepreneur never misses setting his goal.
• Successful entrepreneurs know how to revise or rewrite goals whenever there is something that needs to be changed.
• An entrepreneur knows how to search for opportunities that may not be visible for most people.
• An entrepreneur knows how to take advantage of these opportunities.
• An entrepreneur knows his strengths and weakness.
• An entrepreneur always wants to be the best.
• An entrepreneur enjoys what he does and knows how to enjoy as well.
• A successful entrepreneur loves his work and enjoys what he is doing but does not make his business his life.
• An entrepreneur knows when to get help.
• A successful entrepreneur recognizes that he could not do some things alone and needs a hand in order to get things right.

 

*Have a Purpose in Life? You Might Live Longer by Kathleen Doheny

“If you have a purpose in life — lofty or not — you’ll live longer, a new study shows.”

“It doesn’t seem to matter much what the purpose is, or whether the purpose involves a goal that’s ambitious or modest.”

“When comparing scores, Boyle found that those with a higher sense of purpose had about half the risk of dying during the follow-up period as did those with a lower sense of purpose. And that was true, she said, even after controlling for such factors as depressive symptoms, chronic medical conditions and disability.”

“What this is saying is, if you find purpose in life, if you find your life is meaningful and if you have goal-directed behavior, you are likely to live longer,” she said.

 

*Crowdsourcing: What It Means for Innovation by John Winsor

“Some have predicted that crowdsourcing is the future of the marketing, advertising, and industrial design industries. The phenomenon, they argue, will accelerate creativity across a larger network.”

“The current global economic conditions have forced all of us to do more with less. Participants sharpen their creative skills, stay involved with the things they love to do and—most important—get noticed at crowdsourcing marketplaces such as InnoCentive, TopCoder, uTest, and CrowdSpring.”

“The increasing complexity of problems has caused a rise in mass collaboration.”

“New forms of social editing will emerge that allow customers, experts, and brand advocates to curate crowd-created ideas to sort through the ideas and stay on strategy. For now, the most important thing is to jump in and try.”

“As crowdsourcing continues to accelerate, the biggest question is how it will affect business writ large. But it will certainly usher in radical changes to business models and business systems.”

 

*Turning Nonprofits into For-Profits by John Tozzi

“Social enterprises like Bikestation often don’t fit neatly into existing ownership structures. Those that register as nonprofits have trouble tapping private capital to expand, while for-profit companies risk compromising their missions because they must put shareholders’ returns first. But growing interest in hybrid business models has spurred recent efforts at the state level to create new corporate structures that allow entrepreneurs to integrate nonfinancial goals into for-profit businesses. “The intentions of entrepreneurs and investors have evolved over time to include a desire to create social value as well as shareholder value.”

“One new form, known as the Low-profit Limited Liability Company (or L3C), is intended for companies that put their missions before profits. The structure lets them qualify for “program-related investments” from foundations—loans or investments that further a foundation’s goals and also may yield financial returns.”

“The nonprofit remains essentially a holding company for the intellectual property, though Bikestation plans to use the licensing revenue to make grants. As part of the agreement, the nonprofit got a small ownership stake in the new Bikestation and controls a seat on the board.”

 

*A Brief Guide to Personal Branding Using Social Media by Hasan Shirazi

“Developing a brand over social media is a step-by-step non-linier process, and it will take some time before you start seeing the results. Remember, creating a personal brand is directly proportional to creating value for other people.”

“Besides blogging, to further extend you personal brand, creating accounts on other social networks and media platforms help a lot.”

“The concept of personal branding is closely associated to that of leadership and at the heart of its passion. There is much more you can do to standout and become a brand. Remember, Online personal branding using social media is depended on creating quality relationships. Try to look for ways to help those who are best placed to help you, they’ll be more inclined to help you, and if you need to call on them they’ll remember who you are.”

 

*Employees: The Direct Route to Customers’ Hearts

“The link between employee engagement and business outcomes has been well established: employees that are more engaged in their work and with their companies are more likely to stay, more likely to recommend the company and its products, and more likely to go the extra mile to get the job done. But employees can also be a window to customers, and more importantly, a barometer for their satisfaction with your company’s products and services.”

“Research involving more than 30,000 customer service employees conducted earlier this year by the Corporate Executive Board indicates that there is a close connection between employees’ work experience and customer opinions. Departments where employees reported they had the authority to take actions to meet customer needs, make decisions on their own to improve quality, and respond to problems without waiting for approval had the highest levels of customer satisfaction.”

“The study also discovered that even a small change in employees’ ability to get the job done for customers can yield big dividends. Improving the percentage of employees who reported they had the ability to easily correct customers’ problems by just 5 percentage points yielded a 10% increase in customer satisfaction. Satisfied customers buy more of your products and services and recommend your organization to others. In fact, the relationships between employee and customer viewpoints were so strong that employee opinions about their ability to serve customers could be used as a bellwether for client concerns.”

 

*Learning from Pirate Communities – Entrepreneurship by John Horn

“According to an up-and-coming business publication, the Harvard Business Review, “entrepreneurs look at financial challenges or a recession and, instead of wringing their hands, find ways to innovate and spin them into gold for social transformation.” The biggest immobilizer today is fear. Fear to take risks. Fear to innovate. Fear to change.”

“Yes, many – or most – of the pirates are gangsters. No, this doesn’t make hostage-taking okay. But this article has outlined some of the ways that these seagoing thugs are dealing with a recessive global economy. “Pirates were the first people to rebel against this world,” says Hari. They didn’t like the rigour, restrictions and “oppressiveness” of the seafaring alternatives of, say, the Merchant Marine or Royal Navy, so they chose a more independent, democratic and risky life at sea.”

 

*Dusting Off a Big Idea in Hard Times by Reena Jana

“As recession-racked companies search for ways to cut costs, some are rediscovering automated innovation. In the early 2000s, auto-innovation was trumpeted as the Next Big Thing. Instead of relying on engineers and designers, HAL-like computers would create goods on their own by exhaustively combining bits and pieces of previously successful products.”

“Now that companies are under intense pressure to get more out of every dollar, automated innovation is making a comeback. Rather than being used to create products, however, it’s turning into an efficiency tool to improve business processes.”

“Successful innovations are often built on the backs of failed ones.”

 

*Seniors as Entrepreneurs: Their Time Has Come by Stacy Perman

“Economic volatility plus more boomer retirees have moved the starting age for startups and led to a surge of senior-run businesses.”

“In recent years, the number of individuals starting their own businesses during what is usually considered the “retirement years” has been rising, according to economists and small-business observers. And so has the age at which they are starting their own ventures: According to the nonprofit AARP Public Policy Institute, in 2008, 21% of the self-employed were between 55 and 64, while 10% were 65 and older. Experts believe the stock market’s recent brutalization of retirement accounts will prod additional older Americans to start their own businesses.

“While many have elected to become first-time entrepreneurs after 60, a number of economic factors and a job market perceived to be biased against older workers have pushed a number of people into starting their own businesses. With many retirees finding their pensions and 401(k) plans dented—and a rising U.S. unemployment rate, now at 9.4%—the trend toward aged entrepreneurs is poised to grow.”

 

*Governing in a Recession by Beverly Behan

“As board members wade through today’s grim business headlines of massive layoffs, tumbling stock prices, and chief executive officer terminations, many are asking themselves what they should do differently. Here are four critical things boards must consider in responding to today’s tough business environment.”

• If your corporate strategy was set six months ago or earlier, you should look at whether it’s best to stay the course or make some critical changes to respond to the tough new economic environment. Take the time at your next board meeting (three or four hours for a really good discussion) to go back to the underpinnings of the strategy—the classic SWOT analysis (strengths, weaknesses, opportunities, and threats), with emphasis on the opportunities and threats presented in today’s economy.
• Spend another two to three hours at an upcoming board meeting talking specifically about risks. Focus on five major risks facing the company. How might they have changed in view of the current economic environment?
• As board members, you must ask yourselves: Do we have confidence in the CEO and the management team to lead the company through this tough economic situation? If the answer is no, then it’s time to pull an AIG. If the answer is yes, then it’s important to let the CEO manage and keep the board members governing.
• When losses mount and big investors rattle their sabers, boards always feel pressured to fire the CEO. Whether you should take the plunge goes back to the earlier question: Does the board still have confidence in him? If the answer is no, the board must consider the timing and ramifications of pulling the plug.

“Tough times call for some tough boardroom discussions. Make sure your board steps up to them in the right way.”

 

What I Think

I think a couple of common threads come together when I look at the random articles posted on this date. The Entrepreneurship Process blog article, Traits of a Successful Entrepreneur, makes the point that success and failure always depend on the entrepreneur. John Horn’s article, Learning from Pirate Communities – Entrepreneurship, makes the point that one of the biggest immobilizers today is fear to innovate or to take other risks. Pirates, glorified or seen as humorous to some extent in recent movies, are, as Horn states, gangsters who should be seen as neither glorious nor humorous.

What some pirates do have is a life so harsh at “home,” that taking almost any risk seems less dangerous than doing nothing. We all have a comfort zone where we like to stay because it is more comfortable than any alternative of which we are aware. Some simply fear any change, yet a fire or tornado can cause all but the most reluctant to leave in the face of clearly impending disaster. We have seen, of course, before and after Katrina and other disasters, that some will never leave, regardless of the certainty of the impending destruction of their homes. Most, however, have a great enough sense of self-preservation, that they can be forced to accept the uncertainty of the future after escape, as opposed to the certainty of destruction of everything they know, should they choose inaction.

If you look at crowdsourcing from the macro level, at one level entrepreneurs themselves are forming a global crowdsourcing case study. Some are staying where they have been most comfortable and successful in the past, hoping things will turn around. Few are unblemished by the sagging global economy, but undoubtedly many are well enough off to experience little or no change in daily life, despite lower profit margins or even losses in their various enterprises.

Stay with me on this. If you analogize our current global financial crisis with a Katrina type storm approaching our home, some entrepreneurs will have anticipated this, and made sufficient disaster preparation and recovery preparations so that they will be “OK” and survive the storm. Some will not have made those plans, but will detect the early warning signs, and move away from the “storm,” by cutting costs, reducing obligations, trying to speed up cash flow, looking for “disaster-resistant” goods and services, etc. This is kind of like buying plywood before the storm and checking your insurance coverage again.

Some, of course, will ignore the storm warnings, thinking the storm will turn away at the last minute, as it usually does. Those who live or have a vacation home in the Carolinas or Florida are probably accustomed to watching the early warning radar and tracking tropical storms during the hurricane season. Based upon that experience, I’ve often watched those storms form, grow, and start on their destructive path in a direction pointed at my property. Many of those storms have turned into hurricanes and actually gotten close enough to knock down some trees, but in every case, so far, they have turned away. If you do this enough, you can become complacent, thinking “it will never happen to me.”

It seems too many of us have fallen into this storm “watching and ignoring” pattern with the economy. I didn’t live during “The Great Depression,” but those I know who did, have a different view of saving and living frugally than many of us “younger” folks. Their paradigm is simply different from ours, based in large part upon the hardships they faced and became accustomed to as they tried to survive that storm.

It seems to me, entrepreneurs, as a macro group, are showing signs of a changing paradigm. Some have not made sufficient plans or have chosen to ignore the storm, and will undoubtedly perish, in terms of having sufficient resources to remain in the entrepreneurial community. Some of my own clients have been so economically damaged by trying to hold onto a sinking business, that they will likely never be able to must the financial energy to re-emerge as a business owner.

Most of the survivors, however, are those currently scurrying away from the storm in one way or another. They are changing the way their business thinks and works. They are using strategies, such as the employee empowerment tactics described in the Business Week article, Employees: The Direct Route to Customers’ Hearts. They are finding ways to determine what their customers really want, finding more efficient ways to provide this to them, and to doing what they must to survive.

How are you handling the storm? If it has already destroyed your business, do you have the strength to make it rise from the ashes? If it has not hit you yet, at least to the point of making you alter your thinking about the potential to cause you serious damage, have you made realistic disaster preparation and recovery plans? Many of the old rules seem to be going out the window with this storm. It could, in fact, become the perfect storm. Some will survive it. Some will not. Which are you and how will you make that a certainty, as opposed to a possibility? One way might be to continue to watch the macro entrepreneurial crowdsourcing patterns forming now, and to say with those who are getting to “higher ground.”

  

If you enjoyed my impression of these articles, why don’t you read them for yourself and see what you and I missed or hit? Join the Applied Entrepreneurship group on LinkedIn. Membership is free and I try to post about ten articles a day there. We have some great discussions going and if you are an entrepreneur, we hope you will join us.