PR and press releases: does anyone care about what you're saying

Here's Carole Theriault, senior security consultant at Sophos, on the humble press release…

So, you are a company with something to say, and you think the best way to spread the word is through a press release… 

Now, in my job, I get to see quite a few press releases from a variety of sources, and the difference in quality can be quite simply astounding.  It makes me feel for the journalists who have to scour through these things each and every day searching for something worthy of a story.

How can you tell if your release is going to cut the mustard? Here are some questions you can ask yourself:

Is it really news?

Forgive me if this sounds like an obvious question, but considering the number of releases that seemed best designed to inspire the widest and deepest of yawns, it seems this question is not being asked enough.  In the word 'news', you can clearly see the word "new" - that means that something is happening or is about to happen, or that you have a fresh viewpoint on something that has very recently happened. 

The point here is that timeliness is everything, so don’t waste effort on something that’s already past its sell-by date.

It's news, but will anyone care?

Of course, inside your company, everyone might be thrilled to bits about the latest upgrade or version of your product, but the point of a release is to try and appeal to a wider audience.  Answer the question in the first paragraph of why the journalist should give two hoots about the subject matter.  Back it up with independent views as to why this is important information.  Offer proof that this has a significant impact on your potential readership. 

By pretending to be the recipient of the release, you stand a better chance of writing a story worth publishing.  And bear in mind that some news is best kept for the internal company newsletter…

Is the piece punchy?

The point of a release is that journalists can read it and grab the info they need for a good story, but that doesn't mean that you should clutter it with tidbits of unnecessary peripheral information that complicates the release and confuses the reader.  The KISS rule - yes, that old chestnut - is invaluable here.  One main point and a maximum of three supporting points is good advice to follow. 

Another thing to remember is to be clear in your sentence construction.  I cannot tell you how many releases I have seen with loooooooong, convoluted sentences that take me back to my days of studying Latin.  Press releases shouldn’t be littered with modifiers and marketing speak.  Just say what you want to say.  A good trick here is to read it out loud.  Does it sound interesting and, well, punchy?

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Getting a standing ovation

 

How to Get a Standing Ovation, Guy Kawasaki

When I started public speaking in about 1986, I was deathly afraid of public speaking--for one thing, working for the division run by Steve Jobs was hugely intimidating: How could you possibly compete with Steve? It's taken me twenty years to get comfortable at it. I hope that many of you are are called upon to give speeches--it's the closest thing to being a professional athlete that many of us will achieve. The purpose of this blog entry is to help you give great speeches.

1. Have something interesting to say. This is 80% of the battle. If you have something interesting to say, then it's much easier to give a great speech. If you have nothing to say, you should not speak. End of discussion. It's better to decline the opportunity so that no one knows you don't have anything to say than it is to make the speech and prove it.
2. Cut the sales pitch. The purpose of most keynotes is to entertain and inform the audience. It is seldom to provide you with an opportunity to pitch your product, service, or company. For example, if you're invited to speak about the future of digital music, you shouldn't talk about the latest MP3 player that your company is selling.
3. Focus on entertaining. Many speech coaches will disagree with this, but the goal of a speech is to entertain the audience. If people are entertained, you can slip in a few nuggets of information. But if your speech is deathly dull, no amount of information will make it a great speech. If I had to pick between entertaining and informing an audience, I would pick entertaining--knowing that informing will probably happen too.
4. Understand the audience. If you can prove to your audience in the first five minutes that you understand who they are, you've got them for the rest of the speech. All you need to understand is the trends, competition, and key issues that the audience faces. This simply requires consultation with the host organization and a willingness to customize your introductory remarks. This ain't that hard.
5. Overdress. My father was a politician in Hawaii. He was a very good speaker. When I started speaking he gave me a piece of advice: Never dress beneath the level of the audience. That is, if they're wearing suits, then you should wear a suit. To underdress is to communicate the following message: “I'm smarter/richer/more powerful than you. I can insult you and not take you serious, and there's nothing you can do about it.” This is hardly the way to get an audience to like you.
6. Don't denigrate the competition. If you truly do cut the sales pitch, then this won't even come up. But just in case, never denigrate the competition because by doing so, you are taking undue advantage of the privilege of giving a speech. You're not doing the audience a favor. The audience is doing you a favor, so do not stoop so low as to use this opportunity to slander your competition.
7. Tell stories. The best way to relax when giving a speech is to tell stories. Any stories. Stories about your youth. Stories about your kids. Stories about your customers. Stories about things that you read about. When you tell a story, you lose yourself in the storytelling. You're not “making a speech” anymore. You're simply having a conversation. Good speakers are good storytellers; great speakers tell stories that support their message.
8. Pre-circulate with the audience. True or false: the audience wants your speech to go well. The answer is True. Audiences don't want to see you fail--for one thing, why would people want to waste their time listening to you fail? And here's the way to heighten your audience's concern for you: circulate with the audience before the speech. Meet people. Talk to them. Let them make contact with you. Especially the ones in the first few rows; then, when you're on the podium, you'll see these friendly faces. Your confidence will soar. You will relax. And you will be great.
9. Speak at the start of an event. If you have the choice, get in the beginning part of the agenda. The audience is fresher then. They're more apt to listen to you, laugh at your jokes, and follow along with your stories. On the third day of a three-day conference, the audience is tired, and all they're thinking about is going home. It's hard enough to give a great speech--why increase the challenge by having to lift the audience out of the doldrums?
10. Ask for a small room. If you have a choice, get the smallest room possible for your speech. If it's a large room, ask that it be set “classroom style”--ie, with tables and chairs--instead of theatre style. A packed room is a more emotional room. It is better to have 200 people in a 200 person room than 500 people in a 1,000 person room. You want people to remember, “It was standing room only.”
11. Practice and speak all the time. This is a “duhism,” but nonetheless relevant. My theory is that it takes giving a speech at least twenty times to get decent at it. You can give it nineteen times to your dog if you like, but it takes practice and repetition. There is no shortcut to Carnegie Hall. As Jascha Heifitz said, “If I don't practice one day, I know it. If I don't practice two days, my critics know it. If I don't practice three days, everyone knows it.” Read this article to learn what Steve Jobs does.

It's taken me twenty years to get to this point. I hope it takes you less. Part of the reason why it took me so long is that no one explained the art of giving a speech to me, and I was too dumb to do the research. And now, twenty years later, I love speaking. My goal, every time I get up to the podium, is to get a standing ovation. I don't succeed very often, but sometimes I do. More importantly, I hope that I'm standing and clapping in the audience of your speech soon.

Written at: Atherton, California.

January 18, 2006 in Pitching, presenting, and speaking |

 

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Make your website stand out when bookmarked

 

When you bookmark a webpage, some of the websites have a little icon next to them to make them stand out

 

This website generates the icon from an image file bookmarkedand tells you where to put it.

 

http://www.html-kit.com/favicon/

After the Honeymmon of fundraising -

After the Honeymoon

by Guy Kawasaki, Garage Ventures

Much of my blog, and other information for entrepreneurs, focuses on creating new products, raising money, and building a successful startup. The advice stops there, and everyone lives happily ever after. Guess again.

Here’s some information about what happens after the honeymoon is over when the shit hits the fan. There are three parts to each section: the problem, how you got to this point, and what to do now.

1. Problem: A founder isn’t delivering.

How you got here: In the early days of many organizations, the primary qualifications for key positions are being present and believing in the story. For example, your college roommate became “chief technical officer” because he was the only programmer that you knew. However, now that he has to build a scalable product and implement serious engineering discipline, he’s lost.

What to do now: You could simply get rid of him. This isn’t very humanitarian, but neither is keeping him around until he tanks the company. Let’s keep termination as a last, desperate step because losing a founder is usually traumatic for everyone.

Until then, let’s assume that he is good at some functions. The thing to do is to move him into a position where he can succeed. This usually involves a demotion, but that’s tough shiitake for him and a good precedent for everyone else to see. If he doesn’t want to make this transition, then it’s aloha oe. Remember: Founder status affords a person equity, not immunity.

Here’s a news flash. The founder may be happy to change position with fewer management responsibilities.  Perhaps all he wanted to do was code, and a “management” role was thrust upon him. Changing his role could be win-win for everyone.

2. Problem: The product is late.

How you got here: It could be because you hired your roommate :-) The other common reasons are inexperience; wishful thinking; and knuckling under to the real or imagined pressure of investors to ship by a certain date.

(By the way, an experienced engineering manager (usually not the founder/visionary) would not have let you get into this situation. And an experienced investor would have added six months or doubled the time to completion—whichever is greater—to your initial prediction.)

What to do now: Several things: (a) Gather the team and have a “come to Jesus” about the real status of the project. (b) Ruthlessly decide on any changes in roles of people. (c) Scale back the scope/complexity/coolness of the product. (d) Plead guilty to your investors—that is, admit that you screwed up. (e) Sandbag the investors—that is, tell them a shipping date that you know you can beat. And I do mean “know” because your neck is on the chopping block. (f) Shut up and get to work.

3. Problem: Sales aren’t meeting projections.

How you got here: Let’s assume that you can completely lay blame on the shipping schedule—that is, even if you were shipping, there aren’t orders to fill. Most likely you’re in this position because you’re too close to the product, so that you thought that customers would leap to adopt your curve-jumping, paradigm-shifting, patent-pending innovation.

In fact, your greatest fear was the ability to ramp up and scale volume. :-) You never anticipated that customers wouldn’t demand an unproven product from a thinly capitalized startup in the middle of a buying cycle.

(By the way, an experienced sales executive would not have let you get into this situation. And an experienced investor would have divided your initial projection by twenty five to be conservative and by one hundred to be truly safe.”

What to do now: Sales needs to have its own “come to Jesus” meeting with the goal of determining what’s truly happening and what the correct roles are for everyone. Other gurus would recommend staying the course and pursuing the big, strategic reference accounts. This guru would tell you to get any kind of sale that you can. My reasoning is that (a) you never know who will turn into a big account; (b) closing smaller, easier accounts is good practice; (c) these little successes build confidence in the sales organization; and (d) beggars can’t be choosers.

The clock is ticking. You need to prove that the dogs will eat the food. Sure, you can try for the AKC champion German Shepherd, but I would recommend finding a few hungry mutts.

4. Problem: Our team is not getting along.

How you got here: You’re in this position because this is how it always goes. Companies don’t ship on time, watch sales go the roof, go public, and kick back. Startups are messy. Things go wrong. People don’t get along. If it was easy, everyone would do a startup and be rich. Welcome to the real world.

What to do now: You work things out. You keep talking. You try to get an experienced outsider to provide a fresh perspective. There’s no magic bullet to fix this—it simply takes time. The same time, by the way, to finish the product and achieve sales because not getting along is the flip side of poor sales. If sales were booming, believe me, you’d probably be getting along—if not euphoric.

One thing you don’t do is lynch people because you want to (a) set a precedent; (b) show everyone you can make tough decisions; and (c) get it over with. You should give people a second chance. Maybe even a third chance. Focus on the positive: how people can help an organization, not how they are hurting it.

You have a moral obligation to give everyone a chance to change their ways and to succeed. If you don’t fulfill this obligation, then the unintended message that you’ll send through the organization is: “Anybody could be gone, so don’t piss me off.”

5. Problem: We are getting slammed by the press/analysts/blogosphere.

How you got here: Arrogance is the most likely cause: believing that your product is so great that you’re going to make Google look like a lemonade stand. When you start believing this crap, you draw a nice target on your chest.

What to do now: The first thing you need to do is improve your reality. Ship your product. Fix it so that it’s good. It makes no sense to seek press coverage if your product sucks.

The second thing you need to do is focus on customers, not the press. If you make customers happy, the press will always come around. They have no choice. For example, Apple currently gets great press because its customers are so happy. When Apple’s customers are not happy, the press will turn on Apple like a pack of starving hyenas.

The third thing to do is to suck up the press (unless you are Apple). I don’t want to get into a new debate about the art of sucking up, but the people who disagree with me on this seldom get good coverage. :-)

6. Problem: VCs are micro-managing us.

How you got here: First, let’s set the record straight: VCs don’t want to micro manage. We’d love to make an investment, show up for a brief monthly board meeting to hear how great things are going, help select an acquirer or investment bank for an IPO, and cash out. You’re in this position because you either did something wrong or something out of your control went wrong. But it’s not like a VC wants to be in your face.

What to do now: Ship. Sell. Achieve success. The VC will be more than happy to declare victory and move on to the next squeaky wheel. Until then, there’s no simple, cosmetic fix for this. You dug yourself into a hole—now you have to dig yourself out.

7. Problem: VCs aren’t helping very much.

How you got here: There are two likely reasons. First, you’re gullible and believed the VC when she told you that she’s a real “roll up the sleeves” investor who will be by your side. Second, you’re not asking enough.

What to do now: You can’t do much about the first reason. What you got is what you got. However, whether it’s the first reason or the second, you’ve got to ask. Maybe you don’t want to be a burden, but the only thing that’s worse than asking for too much help from a person who’s unwilling to give it is to ask for too little help from a person who is willing to give it. So ask. And keep asking.

8. Problem: Our PR/ad agency/consultant is not delivering.

How you got here: Let me guess: you were in a rush so you interviewed a grand total of one or two agencies. You “really liked” Trixie and Biff because they gushed about how great your product is. You didn’t check references because you’ve “always been good about judging the quality of people based on a gut reaction.” Plus, you’ve never worked with an agency before but you insisted on selecting and managing it.

You’re acting like an idiot. What can I say?

What to do now: I bet that whoever is working with the agency on a day-to-day basis (a) knows more about marketing than you do; (b) has a good understanding of the agency’s capabilities; and (c) knows how to get more out of the relationship.

This is usually your vice president of marketing or director of marketing. I would make it clear to the agency that this person is now running the show—including the ability to change agencies.

Let’s say that you don’t have  this person. Then you have to come up to grips with the fact that generally speaking, there are more lousy clients than lousy agencies. It’s your job to understand how to be a good client. I will try to cover this in a future posting.

9. Problem: We are going to run out of money before we can raise more.

How you got here: This is the perfect storm of entrepreneurship: the product is late, sales are less than hallucinated, and money is running out. You got here because your product delivery schedule was totally out of whack—a quality that it shared with your sales projections. To add fuel to the fire, you scaled up your infrastructure because you were afraid of too much sales swamping your systems. 

What to do now: This is a tough question because each situation is different. However, here are actions to consider. (a) Freeze all hiring—no matter how strategic a position may be. At the very least, you make a one-for-one trade: if you hire one, you fire one. (b) Cut marketing expenditures. You’re probably wasting money on stupid things anyway. (c) Get interns from local schools. They have something you want: free labor. You have something they want: real-world experience. (d) Cut the pay of the management team. Merely symbolic? Too little too late? Cut early and cut hard, then.  (e) Get the co-founders to put more money in the company as a bridge loan to the next round of financing. (f) Do some non-recurring consulting work to increase cash flow. (g) Try to get some beta sites to pay for a pilot implementation.

Do you see any magic bullets in this list? I don’t either. Here’s the lesson: Don’t get yourself into this position because there is no easy way out.

Take whatever capital you have and make it last as long as you painfully can. I have never seen a company fail because it couldn’t expand fast enough. I have seen many companies die because they “invested in the future” and “spent ahead” to avoid missing an opportunity.

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Benefitsof no longer being CEO - Scott McNealy, SUN

As reported in the San Jose Mercury News. You’ve got to love Scott McNealy’s sense of humor.

10. “I don’t have to apologize for stuff I say to Wall Street.”

9.  “I’m no longer on the most overpaid CEO list.”

8. “I just say, ‘See Jonathan on that.’”

7. “I read The Hockey News without guilt.”

6. “I shave even less often.”

5. “I don’t have to sign the SOX (Sarbanes-Oxley) certification anymore.”

4. “I have someone to blame now.”

3. “I can sell my last business suit.”

2. “Jonathan doesn’t golf, so I guess I gotta do it.”

1. “My new office is VERY close to the men’s room.”

 

Benefits of not being the CEO - by Scot McNealy, SUNBenefits of not being the CEO - by Scot McNealy, SUNBenefits of not being the CEO - by Scot McNealy, SUNPowered By Qumana

Building a business is about sales....

 

A Few Good (Sales) Men

 

Sales: "You want answers?"

 Finance: "I think we are entitled to them!"

 Sales: "You want answers?!"

 Finance: "I want the truth!"

 Sales: "You can't handle the truth!!!"

 Sales (continuing): "Son, we live in a world that requires revenue.  And that revenue must be brought in by people with elite skills.  Who's going to find it?  You?  You, Mr. Operations?  We have a greater responsibility than you can possibly fathom.

You scoff at the sales division and you curse our lucrative incentives.  You have that luxury.  You have the luxury of not knowing what we know: that while the cost of business results are excessive, it drives in revenue.

And my very existence, while grotesque and incomprehensible to you, drives REVENUE!  You don't want to know the truth because deep down in places you don't talk about at staff meetings ... you want me on that call.  You NEED me on that call!

We use words like comps, migration, discounts, flex licensing, global purchase agreements, butt-fusion.  We use these words as the backbone of a life spent negotiating something.  You use them as a punch line!

I have neither the time nor inclination to explain myself to people who rise and sleep under the very blanket of revenue I provide and then question the manner in which I provide it.  I would rather you just said "thank you" and went on your way.  Otherwise I suggest you pick up a phone and make some sales calls.  Either way, I don't give a damn what you think you're entitled to!"

 Finance: "Did you expense the lap dances?"

 Sales: "I did the job I was hired to do."

 Finance: "Did you expense the lap dances?"

 Sales: "You're goddamn right I did!"

 

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Sales success - Be liked. Qualify. Close. - Mi...

Sales success - Be liked. Qualify. Close. - Mike Southon (Beermat Entrepreneur)

How to avoid wasting money on Marketing

Of all the ways to waste money on Marketing, advertising seems to be everyone's favourite - so this is all about how to get better results from your advertising.

First - be aware that there are many more effective ways to market than just advertising. In my experience, many businesses depend too heavily on advertising, when there are many more effective ways to market. In addition, advertising can be one of the most expensive marketing options. So I would always look at more cost effective marketing strategies before we get to advertising. But if you are advertising already, or plan to in the future, here are some basics on what works and what doesn't.

First of all, stop any advertising that isn't working.
That may sound ridiculously obvious but you would be amazed at how many people are running ads just because that's what their business has always done and they don't really know whether the ads are working.

Secondly, you wont know whether the ads are working unless you test and measure all of your advertising. I spoke about testing last time - but it's so important. So many businesses just allocate a certain amount of money to an advertising budget, spend the money every year…and they've only got a vague sense of whether the ads are working or not. This is crazy. If your ads are working, you want to roll them out on a larger scale. If they're not, STOP and use the money on one of the dozens of other marketing strategies that can bring you a 100 or 200 or 300% return on your investments.

Third, only run ads that are going to produce a response. This is known as direct response advertising. The other form of advertising is institutional (or brand) advertising. This is what Coca-Cola and McDonalds engage in. It's designed to build and sustain awareness of their brand. If you're in a small or medium sized business, brand advertising is almost certainly a huge waste of money.

Unless you're a global multi national, the purpose of your ads must be to produce a response. Smart marketers are ruthless in only creating and paying for ads that produce a response - a profitable response.

In the ad itself the most important element is the headline. The headline is either the heading that goes at the top of the ad or if there's no heading it's the first words of the ad. The headline needs to grab peoples' attention. One change in a headline can produce a 50 -100% increase in response. (TIP: If the headline of your ad is currently the name of your company, you can almost certainly increase the response rate by changing the headline.)

The copy of your ad needs to be a personal communication to the individual reading it. And it needs to be about them. It needs to address their needs, desires and fears and it needs to constantly communicate the benefits of what you are offering. At the end of the ad you need a call to action. Tell people exactly what they need to do to follow through and make it easy for them to do so.

Here are some other fundamentals of advertising: Don't advertise on a left hand page. This has been tested again and again. When you read a publication, your eyes are drawn to the right hand page as you flick through, so statistically more people will see your ad if it's on the right hand page.

Never pay the full rate for advertising. Most advertising rate cards are far too high and you can always negotiate. If you're a small business remember that large companies who use ad agencies are buying based on the readership or audience levels rather than the ratecard - so haggle and negotiate. If you can pay 20 or 30% less for your advertising it can sometimes turn an unprofitable ad campaign into a successful one.

One of the biggest mistakes people make is advertising in publications just because their competitors are in them. Don't for a minute think that all your competitors are there because their ads are producing great results. They're more likely to be there because everyone else is and most of them wont have a clue whether their ads are working. The only criteria for advertising anywhere is if the ad produces great results for you.

Once again, my experience when I first start working with clients is that many businesses are wasting money on ineffective advertising when they could be getting a much better return on other forms of marketing (Direct Mail, Telephone Marketing, Direct Sales, Email, Internet, Referrals, Strategic Alliances etc) But if you do it well and test and experiment, advertising can become a highly profitable element of your marketing mix.

For more Marketing information visit www.CardellMedia.co.uk.

 

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Excellence can be attained if you...

Excellence can be attained if you:

 

o     Care more than others think is wise

o     Risk more than others think is safe

o     Dream more than others think is practical, and

o     Expect more than others think is possible.

 

 Michael E Fairey - President of BQF &  Deputy Group Chief Executive LloydsTSB

 

Business Networking Events and Singles Parties... are really the same.

Everyone's been to a few "business networking" events. With talk of mixing business with pleasure made me consider the real similarities between networking ewvents and singles dating clubs.

 

Location: Networking events are often held in a bar. Guess what? Singles mingle in bars all the time, and the booze is a flowing in both types of events.

 

Attendance : much like Saturday night at a sports bar, the men will vastly outnumber the women.

 

Breaking the ice : Much like attending a matchmaker's party, the business networker is often given something to help break the ice while meeting new people. Sometimes it's just a name tag. Other times it's a badge, colour-coded to what your professional niche is, or what your convention status is. Oreveyone has a code badge with specific characters - find another person with an identical stamp on their card and you win a prize. Sounds like arranged marriages!!

 

The people: At networking events, there seem to be two types of people: those huddling with entourage, only occasionally leaving their group to fetch a new drink; and those who approach potential partners and drop opening lines like "Hi, my name's Bob. What's your job?" Sound familiar?

 

Making the introduction: At networking events, the vast majority of opening lines revolve around dropping your title and/or enquiring as to the other person's job. So it's not "what's your star sign", but "what do you do for a living". An opening line is still just that, even if more people lead in with a handshake in networking events than their singles equivalent.

 

Leaving with a Partner: At a business event, you might be looking for a long-term strategic partner or just a partner for a particular short-term need. The exact same thing occurs at a singles party, although modesty precludes too close an examination of this context.

 

Looks are important: While you're out looking for that business partner, there are frightening parallels. Looks are still important, though the emphasis is maybe the cut of one's suit. Business cards are collected and fancy titles savored. All the better if you partner with the CEO, instead of a programmer.

 

Looking for funding : When the networking is for Venture Capital and potential investorsthen this is the business equivalent of a Sugar Daddy. A lot of people would like nothing more than to have an investor fund their short-term, exit-strategy-focused venture. That is to say, they want to be taken out for dinner and bought some jewelry before they stop returning phone calls. Then there's another class of investor-stalking attendee that's looking for first-round financing for a long-range business plan. These people are looking for a ring.

 

The morning after: Especially in the case of the investor function, just like Saturday night, even though everyone's out looking for a partner, almost every one still goes home alone. And for those who don't go home alone, sometimes their new partners don't look so good in the morning. Much as a single person would rather gnaw off their arm, as to slip out in the morning without waking a particularly distasteful partner, a breach of contract lawsuit is the ultimate extension of Coyote Love.

 

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10 Painless Steps to Starting and Finishing Your Business Plan

Summary

Preparing a business plan can be a time-consuming and daunting task. However, the importance of a business plan to achieve funding and growth goals cannot be ignored. So how do you prepare a business plan that clearly, concisely and compellingly convinces investors to fund your venture? Check out these 10 steps to painlessly develop a business plan that will impress readers and help you achieve your goals.

 

 

You need to prepare a business plan for your company. Anxious to start, you immediately open your favorite word processing program. But now you're staring at a blank screen and a blinking cursor that appears to be mocking you. Not sure where to start or what to write first, you flip the computer off and decide that tomorrow is a much better day to work on your plan. After all, the weather is much too nice to be sitting inside on a day like today.

 

Many entrepreneurs and business owners have faced this situation before, but what to do when waiting until tomorrow to start your plan is unacceptable? Follow these 10 tried and true tips to help you complete outstanding business plan.

 

1. Decide why you're writing your plan.

Are you raising money? Clarifying your future? Launching a new venture? Searching for strategic partners? Game-planning to destroy your competition? Whatever the reason - it's important to get committed to the business plan writing process. Prepare for yourself a short paragraph that outlines "why you are writing a business plan and why it will be great." Call it your business plan mission - it will keep you motivated and help you clarify the message you send your readers.

 

2. Get the big picture.

Before accumulating mountains of research and information, take a look at your business plan through a wide-angle lens to get the big picture. Visit your local library or bookstore and bring home a few business plan books. Take a look at Internet resources, consider business plan software programs and review the SBA's business planning outline. Your goal is to get a feel for what a business plan is, what it isn't and what to expect from your business plan. With this new insight, prepare an outline that includes the major sections and subsections that you believe should appear in your business plan.

 

3. Grab everything that's already handy.

Dig through every computer file, box and file cabinet you have to unearth the information that's already available to you. You'll surprise yourself with what you find and with how nicely this step will move you forward. Consider marketing pieces you've prepared, press releases, related articles, industry journals, historical financials, important web sites and notes or ideas you've accumulated over time. Don't rate the quality of this information - just gather it. At this point quantity is the name of the game, and the more you can find the better.

 

4. Just type!

Start typing thoughts, ideas, words, questions and to-dos into each section of your business plan outline. Put rough thoughts on paper and empty your brain. Don't worry about complete sentences or proper grammar - just type. Approach this step like a brainstorming session, the more powerful the storm, the more potent your business plan. Jot down any ideas that demand further consideration, areas that present a challenge and topics that require the input of others. Strive to place your thoughts in the most appropriate section of your business plan outline and rearrange the outline if it will be more logical for your readers.

 

5. Prepare your rough draft.

Now it's time to take your outline, the information you've got handy and your brainstormed ideas and shape them into a useable rough draft. Move through your entire outline, section by section and begin writing complete sentences and paragraphs. As you work, start a Biz Plan To-Do List to keep track of topics that require in-depth research, statistics or back-up information. When you're done, print out a copy and read it a few times, revising lightly as you go. Your plan should be rather sparse, but when you've completed this step, you've truly made business planning progress.

 

6. It's research time.

Now is the time to think like a lawyer and build a case for your business plan. Your goal is to compile information and research to support the claims and assertions you make in your plan. Drop by the library and ask the librarian if they know of any sources of information that can help your cause. Schedule a meeting with a local SBA representative or a Small Business Development Center counselor. Call your local and national industry associations and track down annual reports for companies in your industry. Request product and service information from your competitors. In short, talk to anyone and everyone that might be able to help you collect information for your business plan.

 

7. Start thinking about the numbers.

It is advisable to begin developing your pro-forma financial statements at this point. If you start any sooner, one of two things is likely to occur: 1) Your numbers will be based on pure fantasy and you'll have to change them anyway, or 2) You'll attempt to write your plan, do the research, revise your plan and complete your financial statements all at once - and none of it will get done. If you prepare your financial statements at this stage, your numbers have a much better chance of matching and supporting the text in the body of your business plan. For example, if you mention a specific marketing medium in your marketing section, you'll need to include the corresponding costs somewhere in your financials.

 

8. Write a final draft and finish the numbers.

Sometimes finishing is the hardest part of completing large projects like a business plan. But if you follow the steps leading up to this one, success is just around the corner. Avoid the mistake many business planners make at this stage - it is important to check, double-check and triple-check your writing for grammatical and spelling errors. Think of it this way - bankers and investors will assume that you will manage your business and protect their money with the same level of care and attention that you demonstrate in your business plan. Go all out and create a document that sends a powerful message about the quality of your work.

 

9. Set a deadline.

To ensure that you complete your plan, set a deadline for yourself that you can't ignore. We suggest calling a few people you respect to ask if they would be willing to read your plan and offer suggestions. Make this arrangement with someone whom you are not particularly close with, possibly a professional acquaintance, so it's more difficult and uncomfortable to call and delay. Ask for feedback and make it clear that honesty is what you are after. If you don't explain this up-front, you may hear "looks good to me" - essentially a waste of time for both of you. If you feel tears coming on as they serve up their advice - things are gong well. Take detailed notes and refrain from crying until after the phone is back on the receiver.

 

10. Polish your plan to perfection.

The comments you receive from your readers will help you to beef-up the sections of your plan that need attention. Track down any additional information you may need, incorporate the ideas that your readers offered and clarify sections or points that were not clearly conveyed. Put together an appendix if necessary, create a clean cover page and table of contents and include a non-disclosure form. Lastly, prepare a one-page executive summary that encapsulates the highlights of your entire business plan and place it up front. Walk into your local print shop like you own the place and professionally print and bind as many copies of your plan as you need. Congratulations - you're the proud owner of an excellent business plan.

 

If these tips help you get your business plan on track, we will have assisted in wiping the smirk off the face of one more emotionless and spiteful cursor.

 

First appeared on www.bizplanit.com.

 

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Jim Collins on Making Tough Calls

Published in Fortune Magazine , Jerry Useem interviews Jim Collins on Tough Calls

“It's really a stream of decisions over time, brilliantly executed, that accounts for great outcomes.”

When he's not out scaling mountains (he's a world-class rock climber), author Jim Collins eats, drinks, and sleeps business. So when FORTUNE senior writer Jerry Useem (a sometime Collins collaborator) asked him to discuss the art of decision-making, he got so into the idea that he pored over 14 years of research and interviews he had amassed in the course of writing his business blockbusters Built to Last and Good to Great. Then, in a series of conversations, he and Useem explored the intriguing insights he had gleaned from analyzing the processes behind key decisions in business history. For example, lasting excellence in corporations seems to stem less from decisions about strategy than decisions about people, and seeking consensus is not the way to make the tough calls. Here are edited highlights of their talks.

What were the surprises when you reexamined your research through the lens of decision-making?
We tend to think that decisions are very much about "what." But when I look at my research notes and I look at interview transcripts from the executives we've interviewed, one theme that comes through is that their greatest decisions were not "what" but "who." They were people decisions.

Why are people decisions so important?
Fundamentally, the world is uncertain. Decisions are about the future and your place in the future when that future is uncertain. So what is the key thing you can do to prepare for that uncertainty? You can have the right people with you.

Let's take a nonbusiness case and a business case to illustrate the importance of the people piece. In 1978, Jim Logan and his partner, Mugs Stump, became the first people to climb the Emperor Face of Mount Robson in the Canadian Rockies. And to this day, everybody else who's tried the face has either died or failed on the route. When I asked Logan, "Why were you able to do the Emperor Face?" he said, "Because I made the single most important decision, I picked the right partner."

He told me that there was this one place, the "death zone," and once they went above it, they really couldn't retreat. They were going to either summit or die–no going back. They didn't know what they were going to find beyond that point, and they didn't know what the weather was going to be. And so, therefore, what's your greatest hedge against uncertainty? Having people who can adapt to whatever the mountain throws at you.

Give us the business example.
Let's take the story of a company heading into a very uncertain world: Wells Fargo in the late 1970s. Everybody knows the storm of deregulation is going to hit. But nobody knows precisely how it's going to shake out. When is it going to hit? What exact form is it going to take? What impact is it going to have on the banking industry? Dick Cooley, chief e

Okay, but once you have great people in place, you still have to make decisions.
Great decisions begin with really great people and a simple statement: I don't know. The research evidence on that is very clear–that the leaders who ended up setting things in place that produced extraordinary results over time, and a series of great decisions over time, really were very comfortable saying "I don't know" until they knew.

And really, they were just being honest. I mean, which is best? Lying–meaning saying you don't know when you've already made up your mind? Or presuming to know when you don't and therefore lying to yourself? Or speaking the truth? Which is, "I don't yet know, but I know we have to get it right."

How do you say that without looking irresolute? Don't people expect leaders to say clearly, "Here's where we're headed"?
That's the typical thing that happens in companies. The CEO has already made a decision, and his definition of leadership is to get people to participate so that they feel good about the decision he's already made.

What's wrong with that?
For one thing, you're ignoring people who might know a lot that would be useful in making the decision. You're accepting the idea that because you're in the CEO seat, you somehow know more or you're smarter than everyone else. But what you're really doing is cutting yourself off from hearing options or ideas that might be better.

How do you create the kind of atmosphere where information flows freely?
You have to recognize that your position can be a hindrance to getting the best information. And so can your personality. My own greatest enemy is my personality–I can convince the people on my team of a point of view. I'm older than they are. I've done more research than they have. I know more than they do. I can influence them perhaps too much and therefore not get the best answers. So when we were doing the research for Good to Great, I built a culture that began with disagreements, that set people up to disagree with each other and disagree with me.

I tried to increase what I call my questions-to-statements ratio. I learned this from the Good to Great leaders we were studying. They were just marvelous at igniting dialogue and debate with Socratic questions. And I tried to make heroes out of those on my team who identified flaws in my thinking. At the next meeting I might say, "I really want to give Leigh or Brian or Stefanie credit. She really pushed my thinking, and I wasn't looking at this right."

I looked for people with a streak of irreverence and independent thought. One of my favorite researchers is a young man who went to Princeton, majored in medieval literature, and then joined the Marine Corps. Now, that's independent thinking. I wanted him on my team because he's not going to care what I think.

The really critical part came in designing the research so that for every piece of the puzzle–for every case, every analysis–someone on the team knows that piece as well as I do or better. This was a key mechanism to reduce the odds that my authority and strong personality would override the evidence.

Does having that kind of team make it harder to reach consensus?
I really want to underscore something. This is not about consensus.

You mean it depends on conflict?
That's the key. What we found in companies that make good decisions is the debate is real. When Colman Mockler at Gillette is trying to decide whether to go with cheaper, disposable plastic razors or more expensive ones, he asks marvelous questions. He's Socratic. He pushes people to defend their points of view. He lets the debate rage. And this is, by the way, not an isolated case. We found this process in all the companies we studied, when they made a leap to greatness. The debate is real. It is real, violent debate in search of understanding.

And then in the end, the leader makes the call?
Yes. It's conflict and debate leading to an executive decision. No major decision we've studied was ever taken at a point of unanimous agreement. There was always some disagreement in the air.

Doesn't that make it hard to carry out the decision?
Our research showed that before a major decision, you would see significant debate. But after the decision, people would unify behind that decision to make it successful. Again, and I can't stress this too much, it all begins with having the right people–those who can debate in search of the best answers but who can then set aside their disagreements and work together for the success of the enterprise.

Okay, so creating a debate is crucial. What are some other ingredients of great decisions?
Most people start with the outside world and try to figure out, How do we adapt to it? Greatness doesn't happen that way. It starts with an internal drive. And there's a really key question with big decisions: What is the truth of this situation? There are three parts to this question. The first is internal: What are our real core values and our real aspirations? I mean, what do we really stand for? What do we really want to get done? What is internally driving us? I believe that it is the internal imprint that drives all the action. Everybody harps about "It's all about responding to the outside world." But the great companies are internally driven, externally aware.

So the first question is, What is really driving us internally? The second question is, What is the truth about the outside world? And in particular, What is the truth about how it operates and how it is changing?

And the third question is, When you intersect our internal drive with external reality, what's the truth about what we can distinctively contribute potentially better than anyone else in the world?

Now, let's look at Boeing's decision to build the 707. [See "Billion-Dollar Bets."] What are the factors? First, you have the values of Boeing, which had to do with "We're adventurers, for goodness' sake. We like doing big, adventurous things. We'd rather not be in business than not do that." And second, the aspiration to make Boeing even greater than it was. Those are internal drives. They had nothing to do with adapting to the outside world.

But the second question–What was the truth about the outside world and how it was changing?–well, the war was over. There wasn't going to be as much demand for bombers. And there was a major change in technology, from propellers to jets. And the demand for military aircraft was going to decline relative to demand for commercial aircraft. So that's how the outside world was changing.

On to question No. 3: What could Boeing do better than anyone else in the world? Well, they had jet technology. They'd been building those big strato bombers, the B-47 and the B-52. They had experience, so they knew they could build a large-scale jet. Boeing confronted the truth, internal and external, and grasped that it could make a distinctive impact by bringing the world into the Jet Age–and that's when Bill Allen pulled the trigger on the 707.

We've been talking about big decisions, but there's a lot more to running a business than making one life-or-death decision, right?
No decision, no matter how big, is any more than a small fraction of the total outcome. Yes, some decisions are much bigger than others, and some are forks in the road. But as far as what determines outcomes, the big decisions are not like 60 of 100 points. They're more like six of 100 points. And there's a whole bunch of others that are like 0.6, or 0.006. They add up to a cumulative result. Business schools have regrettably taught us that it's all about the singular case decision. And when you and I write, we like the dramatic moment of decision.

Right. So-and-so leaned back in his chair, looked out the window, and said, "Should I do X or Y?"
But that's not the way life really happens. Yes, there are pivotal decisions, but it's really the stream of decisions over time, brilliantly executed, that accounts for great outcomes.

What elements of a leader's psychology, or the company's psychology, affect decision-making?
One big factor is, Do you believe that your ultimate outcomes in life are externally determined–"I came from a certain family, I got the right job"? Or do you believe that how your life turns out is ultimately up to you, that despite all the things that happen, you are ultimately responsible for your outcomes?

Consider the airline industry, and think of all the events and factors outside managerial control that have hit it since 1972: fuel shocks, interest rate spikes, deregulation, wars, and 9/11. And yet the No. 1 performing company of all publicly traded companies in terms of return to investors for a 30-year period from 1972 to 2002 is an airline. According to Money magazine's retrospective look in 2002, Southwest Airlines beat Intel, Wal-Mart, GE–all of them! Now what would have happened if the folks at Southwest had said, "Hey, we can't do anything great because of our environment"? You could say, "Yeah, the airline industry is terrible. Everyone in it is statistically destined to lose money." But at Southwest they say, "We are responsible for our own outcomes."

Are you saying that you can control your own destiny with good decisions?
Not entirely. Luck is still a factor. But overall our research is showing that the primary factors reside more inside your control than outside. Yes, the world throws a lot at us, but the fundamental assumption needs to be like Southwest's–the ultimate responsibility for your destiny lies with you. The question is not what the world does to you but how you make an impact on the world. Decision-making is ultimately a creative act.

So it's hard to make good decisions if you don't really think they're going to make that much difference in the end. What else counts?
Our research shows one other variable to be vitally important for both the quality of decisions and their implementation. If you look at some of the great decisions in business history, the executives had the discipline to manage for the quarter-century, not the quarter. Look at Andy Grove deciding to abandon memory chips at Intel, Bill Allen and the Boeing 707, Reg Jones choosing Jack Welch to run GE, Darwin Smith selling the mills at Kimberly-Clark, Jim Burke standing firm in the Tylenol crisis, Tom Watson Jr. and the IBM 360. Those leaders were very clear that their ambition was for the long-term greatness of the company. And where decisions can go awry is when there's ambiguity or confusion about what you are really making decisions for–yourself or the company. Why should people throw their full creative energies into a decision that is ultimately about you?

Can you give us a preview of your current project?
My colleague Morten Hansen, formerly a professor at Harvard and now at Insead, and I conceived a simple question: Why do some prevail in brutally turbulent environments, while others do not? How do you retain control over your destiny when you are vulnerable to an environment that seeks to rip that control away from you or where you are statistically destined to fail? Think of it this way: If you wake up at Everest base camp and an unexpected storm hits, you'll probably be fine, but if you're high on the mountain when that storm hits, you just might die. Morten and I believe leaders increasingly feel they are high on the mountain, facing storms they never anticipated. We want to know, How do you build greatness anyway?

And the answer is?
We're early in our research, and we don't yet know. But one thing we're learning is a great relief to me, because I'm so hard on myself. You can make mistakes, even some big mistakes, and still prevail. That's a wonderful thing to know. You don't need a perfect hit rate. You might need to go four out of five on the really big ones, and there are some killer gotcha mistakes from which you can't recover, but you don't have to go five out of five. And I didn't know that before.

 

 

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How to Make Great Decisions...

Published in Fortune Magazine by Jerry Useem

Strategies, careers, companies: They're all made of decisions. .

"Nothing is more difficult, and therefore more precious, than to be able to decide," Napoleon said. The Frenchman definitely made some major calls, such as invading Russia. Now that was a decision. A big, cold decision 1,000 miles long, with no food, bad clothes, and a lot of unfriendly locals. And you see what Napoleon was talking about. Some decisions leave you wearing an emperor's crown; others leave you in pajamas on Elba.

It's horrifying, really. If there's one thing we humans abhor, it's uncertainty. The Romans dealt with it by worshiping Fortuna, goddess of randomness. The Persians had another approach, which Herodotus recorded around 430 b.c.: "If an important decision is to be made, they discuss the question when they are drunk. The following day, the master of the house submits their decision for reconsideration when they are sober. If they still approve it, it is adopted; if not, it is abandoned. Conversely, any decision they make when they are sober is reconsidered afterwards, when they are drunk." They were mysterious, the ancients. Or maybe just loaded.

For modern decidophobes, business is a bad hiding place. Strategies, careers, companies–they're all made of decisions the way glass is made of sand. The quality of your decisions is what makes you valuable. And the hardest ones roll uphill: A CEO's job, it's been said, is to make the decisions that can't be delegated.

You'd think people would give serious thought to such a serious business. But most of us get … what? Campfire stories about Johnson & Johnson's pulling Tylenol from the shelves. Warmed-over parables about visionaries who saw the future. Shopworn examples of famous blunders (the Edsel). The lesson? Go with your gut except when it's wrong. And don't be stupid.

Hey, thanks. But what am I to do with this memo telling me to "reduce headcount" in my department? That's where this issue comes in. Part two of FORTUNE's 75th-anniversary celebration is devoted to decisions–and to helping you make better ones.

We're serious about this. Yes, we wanted to create a package of delectably good reads. But visiting a flaming Colorado mountainside (In the Heat of the Moment) or the hallways of the Pentagon (How I Make Decisions) or the Siberian oil frontier (Billion-Dollar Bets) isn't just a way of bringing decision-making alive. You'll come away with a set of ideas, tools, and questions that you can carry into any decision-making context.

Now a question for you: Are you serious about decisions? Start with the Latin decidere. It means, literally, "to cut off." Decisions force us to foreclose other opportunities–jobs not taken, strategies never attempted, options unpursued. Would that sales gig in Houston have worked out better? You'll never know.

Most of us will do just about anything to avoid uncertainty. We might defer decisions endlessly (thus surrendering what power we do have to control our own destinies) or, like ripping off a Band-Aid, pull the trigger all at once. Making a call takes guts. It means inviting uncertainty into your home, offering it a drink, and asking it to stay for dinner. Uncertainty is a creepy houseguest, but not your captor.

If surmounting your anxieties is step one, step two is letting go of your inner perfectionist because there is no such thing as a perfect decision-maker. Even if you had all the information in the world and a hangar full of supercomputers, you'd still get some wrong.

But there's a big difference between a wrong decision and a bad decision. A wrong decision is picking Door No. 1 when the prize is actually behind Door No. 2. It's a lousy result, but the fault lies with the method. A bad decision is launching the space shuttle Challenger when Morton Thiokol's engineers predict a nearly 100% chance of catastrophe. The method, in this case, is no method at all.

The distinction is important, because it separates outcomes, which you can't control, from process, which you can. Wrong decisions are an inevitable part of life. But bad decisions are unforced errors. They're eminently avoidable–and there are proven techniques to avoid the most predictable pitfalls (see Great Escapes).

There is, of course, no one archetypical decision. Some are drawn out and deliberative, others made at the flick of a switch. If you find yourself at the receiving end of an Andy Roddick serve, for instance, pausing to weigh your options (forehand? backhand? law school?) is not an option. You have to jump, right now. For bond traders too, the time between analysis and action lasts milliseconds.

Now imagine you're responsible for a whole floor of bond traders. Orchestrated well, their decisions mean a great quarter; guided poorly, they'll dig a billion-dollar hole. You can't tell them what to decide, but you can train them how to decide, and select who does the deciding. That's how you build a decision-making machine–like GE or the Marine Corps. "If you explain to your subordinates the end state you want and the timeline you'd like to get there," says Gen. Peter Pace, "you can observe progress, provide resources, and know they're going to do things to get you to the goal. Maybe differently than you would do it. Often better. Sometimes worse. But inside the lines you've painted."

Some of our decisions will outlast us. We have those fading Polaroids because Edwin Land, in 1943, decided to answer his daughter's question, "Why can't I see the picture right away?" We have U.S. Steel because Andrew Carnegie wrote "$480 million" on a piece of notepaper and J.P. Morgan said, "I accept this price." And in 1929 a woman named Lila Luce was given a list of names and picked one: Fortune. Her husband, Henry, had favored Power or even Tycoon. But her decision held–and lives on, more than 1,000 issues later.

 

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Advice to new CEO's.

New CEO is given 3 envelopes by outgoing CEO and told if you fail to hit quarterly targets, open an envelope.

After problems in the first quarter, he opens first envelope which says "blame the previous CEO"

At the second quarter he's still behind target so he opens second envelope which says "blame the market"

It's not going well, and after poor results for the third quarter, he opens third envelope which says "take 3 envelopes..."

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Launching a new area / product

Don't try and launch into any new area unless you have a partner - either a customer prepared to invest (pay for work which develops product/service) or a 3rd party who has experience already.  

 

Trying to understand the market, build the offering and sell it takes too long and is too expensive to do alone.

 

Launching a new business is a similar example, except you may not want to team as you lose the IP (intellectual property) before you get going.  But don't be tempted to get 100% of the product built before you go to potential clients.  Get enough built 20-40% so that that client can help you shape the offering, in return for a lower price, but on the agreement that they will be your first reference.

 

See the other post about Picking Your First Client

 

Forget everything you know about being a leader

Theres an interesting take on why you should reconsider how to lead your team... here

 

 

If you want to build the most powerful company...

If you want to build the most powerful company possible, then your first job is to help every person generate compelling answers to 12 simple questions about the day-to-day realities of his or her job. These are the factors, argue Marcus Buckingham and his colleagues at the Gallup Organization, that determine whether people are engaged, not engaged, or actively disengaged at work.

 

1. Do I know what is expected of me at work?

2. Do I have the materials and equipment that I need in order to do my work right?

3. At work, do I have the opportunity to do what I do best every day?

4. In the past seven days, have I received recognition or praise for doing good work?

5. Does my supervisor, or someone at work, seem to care about me as a person?

6. Is there someone at work who encourages my development?

7. At work, do my opinions seem to count?

8. Does the mission or purpose of my company make me feel that my job is important?

9. Are my coworkers committed to doing quality work?

10. Do I have a best friend at work?

11. In the past six months, has someone at work talked to me about my progress?

12. This past year, have I had opportunities at work to learn and grow?

 

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Some useful thoughts/quotes for when it all seems too difficult

I've started blogging a huge list of quotes which I've collected over the years, and which have helped me, or at least given me a different perspective.

If you've got some favourite quotes, email me at quotes@iangotts.com and I'll add them.

When to hire the sales team

When are company forecasts reliable, and when is it time, based on those forecasts, to ramp up the sales force? Investors and entrepreneurs face these two critical questions, respectively, in every venture-backed company. The wrong answer will either blow a startup's precious capital, or miss the opportunity.

Always keep in mind the Sales Learning Curve (SLC). The SLC is the invention of Stanford Business Professor Mark Leslie, who also happened to have founded and led two companies, one of which is dead and forgotten, and other of which is Veritas! Prior to Leslie's formal description of the SLC, CEOs just stumbled along, making clumsy judgments about the quality of forecasts and a company's readiness to "ramp it up" based upon the patterns we could glean from our own anecdotal data.

Leslie describes the SLC in a paper (pending publication) titled something like (it's been a while since I've read it) "It Always Takes Longer and Costs More." This paper attempts to explain why it is that Silicon Valley, which is so good and experienced at inventing new technology and building new companies, can't ever seem to craft business plans that track reality.

Leslie's approach springs from the observation that factories would never presume to produce widgets in volume until they have brought the cost per widget down to a profitable level through a commonly recognized manufacturing learning curve. Only once you start manufacturing something can you identify hurdles and opportunities, ultimately learning how to reduce cost, improve quality, and raise yields.

Likewise, technology companies shouldn't expect to sell their 1.0 product without undergoing a learning curve around the needed feature set, the competitive response, the right type of channel and sales rep, optimal pricing, etc. And yet, nearly every business plan I have seen shifts gears directly from Development to Sales, staffed by a growing number of experienced sales reps charged to sell their regular quota of product.

The consequence of skipping the Sales Learning Curve in a business plan is all too common: the company fails to meet the plan, sales reps are fired, eventually the VP Sales is fired, and the company has to raise a highly dilutive down round of capital to stay in business.

Leslie's prescription for success and capital efficiency is a plan that includes the Sales Learning Curve. Accept that until we're out there selling, we can't know what we don't know about the selling process. The goal at this point is to maximize runway, since you can't rush science. As my erudite partner and Harvard Business School Professor Felda Hardymon likes to instruct, "run the business like a one story whorehouse" (with no fucking overhead). Hire only two or three creative, guerilla-style reps and a VP who knows how to experiment with multiple channels.

It may take 4, 7, or 10 quarters to climb the curve. Only then, when your sales force is a profit center (with two quarters where contribution exceeds twice the sales costs) is it time to flick the switch. At this point, raise lots of capital and hire as many talented reps as you can possibly find! This kind of prescriptive framework for clearly distinguishing the phases of a company is so much more actionable than the wishy-washy approach of hesitantly adding more and more sales reps over time.

The SLC is least helpful in markets like telecom carrier equipment, in which it's rather straight-forward to determine the needs and buying habits of the customer. That's why these companies tend to accrue a lot of value after winning just one or two large customers.

But for enterprise-focused startups, the SLC is critical. No amount of up-front due diligence can yield the clarity that comes from actual field sales. Enterprise companies are particularly vulnerable to the delusion that they have cracked the code, thanks to some early wins. But without a proven, profitable sales force, it is reckless to ramp up the sales and marketing expenses.

The extreme value of the SLC is seen in consumer markets. Focus groups or not, you just never know. That's why, try not to guess User Behavior Risk.

Further reading: Professor Leslie's slides on a case study of applying the SLC to the Nano-Optical Customer-Adaptive Software/Hardware (NOCASH) company.

100 day review

What is it? 100 days after their start date, an interview with the CEO for 1-2 hours

What for? To give their impressions of the new company, compare it with their previous company, thoughts for improvement.

Why 100? - They know enough about the new company by then, and they've not forgotten their last company, and they are open enough to comment

Interview for Business Solutions Magazine. http://www.businesssolutionsmag.co.uk

Strategy –

What's the secret to good business strategy?

One that is shared / developed by the mangement team, that they
believe in, and most importantly that can be implemented. It must be
credible and have clear measures so that you can tell whether it is
working. The strategy is described in an end-to-end process diagram
and the related performance KPIs (Key Performance Indicators)

How can you involve employees in the business strategy?

You involve employees in the execution of business strategy by making
it relevant to their daily job, so that they understand how their
actions contribute to the company's overall goals and success.

There is only one way to do this. It is by using live workshops to
heirarchically breakdown the top business strategy (which is defined
in terms of the end-to-end processes and their related performance
KPIs). At every level you can breakdown each processes and KPIs until
you reach the lowest level where the process diagram describes the
work that is delivered. i.e. how you raise a Purchase Order, or how
you induct a new recruit.

Using this approach every activitiy must contribute to the overall
processes, an the KPIs msut contribute to teh overall goals of the
business.

"You achieve more with a poor strategy well executed, than a perfect
strategy which stays in teh heads of the management team"

Competiveness –

What's going to be the biggest challenge for you in the future?

Maintaining agility as we grow, so we can respond to changing market conditions

And how can companies stay competitive?

If companies have a clearly understood strategy at every level of the
organisation, with clearly documents processes and relevant metrics -
they are already in a competitive position - as very few companies are
in this position. To maintain their lead they then need to develop a
culture of continuous improvement which is process-led. i.e. the
processes are used to identify and quantify the changes, and are
maintained so that they stay current (and therefore the cost of
complaince is massively reduced).

Finance –

How can organizations improve their financial competence?

Firstly by defining clear financial processes and metrics, and then
ensuring that all finance and finance related (sales / management)
staff understand them. Once metrics become personal you start to take
an interest. But exercises like Balanced Scorecard never get beyond
the first 2-3 levels of the organisation. Why? Because at the lower
levels the detailed activities are not defined, so it makes it
difficult to identify the correct metrics. And as the old saying goes
"People act as they are measured".

How can you make Financial short term goals fit into a long term vision?

The plan to reach the long term vision must be validated by the
limitations of the achievable short term goals.

People –

What are the biggest challenges when it comes to developing/retaining people?

See short article (weblog) entry...
http://ideas-warehouse.blogspot.com/2005/05/why-people-dont-perform.html

What do organizations do to attract/retain the best people?

People want to work for a company which has a strong vision, is lead
by peopel who are committed to delivering on that vision, and have the
experiance and ability to deliver.

Management at all levels then need to ensure that the culture is
conducive to allowing people to grow, feel they can contribute, and
there is trust and honesty.

How to decide on what to pay yourself

How to agree what to pay yourself is a tricky one... plus it changes as the business develops. See also the 3 Hats principles, which will help you think about how to make decisions.

So.. salary.

First of all, ZERO is not the correct answer. This will mask the fact that the business is not viable (ie won't work). Clearly in the early weeks & months you may pay yourself and the other founders a very low salary - just enough to live, but balance this with a large bonus.

For a CASH FUNDED business

A low basic salary + bonus, where

bonus = (month's revenue - month's costs ) / X for each founder.

This means that if X was 10 and there were 4 founders, 40% of the surplus that month is paid as a bonus in total, leaving 60% to grow the company

This means that there is no argument each month, and when you have a very good month you can pay a very large bonus with a clear conscience.

For a business with INVESTMENT

If you've taken investment, you are expecting to make a loss initially as you grow the company. Therefore the bonus approach above does not work as well. You are also going to have more than just founders that you need to incentivese with bonuses. You need to make sure that your bonuses are aligned with the employees, who have joined early into the life of the business and consider themselves "founder-employees".

You can modify the calculation to it so that any revenue greater than plan, minus costs less than plan gives a a calculation of bonus. But paying large bonuses is probably going to upset investors and you cannot afford to do this for employees as well.

Instead you can go for a revenue target based bonus. Hit 80% of monthly target revenue and the bonus starts. For each 1% of target revenue over this point you pay an agreed % of the person's salary - giving a 20% increase in salary if you hit target - and more if you exceed target.

Make sure you have budgetted for this!!

All bonuses should be uncapped.... more thinking behind this in another blog.

3 Hats - how to make decisisons

When you have critical business decisions in the business, as a senior person you actually have 3 roles, each of which could give a different result.

You are a SHAREHOLDER - so decisions are all about using capital t gow the longer term strateegic value of the company

You are an EMPLOYEE - do decision are about increasing salary and compensation and improving working environment

You are a DIRECTOR - so decision are about the fair governance of the company, maximising returns, and developing a strong business.

What brings this into stark contrast is the decisions in the early days about what to pay you and the other founders.

As SHAREHOLDER - nothing, we want all revenue to go into growing the company
As EMPLOYEE - everything, we want to be paid as much as is available
As DIRECTOR - enough to stop the employee leaving - a balance to keep company rgrowing, but not lose valuable staff.

The number 7.....

The number 7 is a recurrent theme in our universe. It represents the
number of; days in the week; wonders of the world; sides of a 20p and
50p coin; million cubic feet of water let into the ocean by the Amazon
River every second; items most people can process and remember (called
the digit span); spikes on the statue of Liberty crown; days after a
Japanese baby's birth when celebrations take place (they also mourn
the seventh day and seventh week following a death). From cradle to
grave the number abounds in our daily lives.

Just a thought....

Mapping your business flows.... worth reading (honestly)

It seems really boring to be thinking about process (the way you want to operate), when I know that you want to get on with "being successful".

But dealing with your intial customers well (consistently, professionally) will determine your early success - especially when your early marketing is word of mouth.

Sitting down for 1/2 day or a day seems time wasted.

So what are the benefits?
* forces you to think through what REALLY happens to get from PROSPECT to CASH. YOu will be surprised what things spring up that you haven't thought of, and which could destroy the business before it has got started
* identifies which forms/documents/systems you need to support the business improving quality/consistency
* it is the training manual or operations manual for new staff to enable you to grow more quickly so you can get beyond the start-up phase more quickly.

PLUS It is a lit easier to do it now than wait until you are trying to run the business with a million things going on and no time even to sleep.... but that is when you need it most

How do I get started then?
* download copy of control-CE - it is the free single user version of the market leader for major corporations www.consultants-edition.com
* take the time to do the tutorial & print out the quick start guide (use your business as the example as you work through the tutorial)
* work with a colleague/partner to challenge you as you create a visual picture of the process
* understand that it will need to be changed as the first version and as the business starts to work you will identify improvements

Therefore - think of this "process model" as a CRITICAL ASSET of the company which should be maintained and looked after.

"Failing to plan is plannng to fail"