A new home for the Blog

This blog is moving! 

"What's hatchin' at the CBD" is being integrated into the Meridian Technology Center website. Please update your bookmark to the new page: http://www.meridiantech.edu/business/entrepreneurs/cbd-blog

Thank you for listening.

Marine Corps' Leadership

I had the opportunity yesterday to participate in a presentation by the Oklahoma City Marine Corps office on how they might adapt their Leadership program for entrepreneurship and business leadership (see, for example, Semper Fi: Business Leadership the Marine Corps Way).

Among many interesting ideas presented, the following stand out:

• Career Progression: "A failure of an individual to advance (promotion) is a failure of the unit." or as the presenter remarked, "No one sits at the same desk for 20 years." Too often, we strive for competency - the ability of the person to complete the duties he has now. Businesses work hard to develop their hi-potential candidates, but the rest are left to their own actions. Which leads to the final most useful point they made which is...
• "The reward for success is greater responsibility". Whether in a business or in your own life, the desire for growth is often driven by the desire for simplicity ("if we increased sales by 20% I could hire a salesman to handle that side of the business" or "if I get that promotion I will have enough money to cover our expenses"), yet the reward for growth means complexity, that is, greater responsibility ("if I have a salesman, I now am responsible for his job, benefits, managing him, etc").

The above two points contrast each other both personally (comfort v. responsibility) and organizationally (stability v. dynamicism). How to create an organization that handles both is something the Marine Corps takes seriously, and so I am very interested to see if they will be able to adapt their program for leadership outside of the corps.

It might be a real good idea to hire a few ex-Marines for your organization!

Determing the Cost of Solving a Problem

About 6 months ago, I purchased a new BlackBerry phone. As I used it, I noticed there was an inordinate number of double-typing – in typing “how are you?” it would spell out, “hhhhooww arrre youuu?”

I just assumed it was my poor typing.

Finally I decided to do a quick Google search to see if anyone else had reported the same issue. It turns out that there is a problem with that model phone manufactured during a certain time period that was causing the issue. I then called my carrier, and sure enough, they will exchange the phone (for a slight fee as it is out of warranty).

What lesson we can draw from this situation?

You sell a product that turns out to have a problem. Do you try and contact all the purchasers and tell them to return the product for another? Or do you wait until those who report it contact you, before exchanging it? Most small businesses won’t have an issue the scale of a cell phone manufacturer, but there will be cases where you need to determine the right strategy.

Here is a set of criteria for making this decision:

• Contact: Can you contact the customer?
• Scope: How widespread is the issue?
• Danger: Does using the defective product harm the consumer?
• Cost: What is the cost of the solution (or continuing use without solving)?
• Reputation: Will not acting harm your reputation?  What is your reputation with consumers?

Let’s apply the criteria to some cases.

A restaurant serves something that can make the customer sick.

• Contact: will you be able to contact the customers who may have eaten the bad food? Not easily.
• Scope: do you know how many meals were served? Yes, of the x number of meals served, you should have a pretty good sense of how many included the bad food.
• Danger: how dangerous is the food? If it is just rotten, then of those who eat it, some may get sick, some may not. If it is extremely dangerous – then you have a greater cause to act on.
• Cost: usually if someone is sick the restaurant will pay doctor visit, or at the least a free meal.
• Reputation: if some people get sick, will it affect your restaurant?

Often, a restaurant will just wait and see who comes in a day or two later – most food pathogens take 24 hours to germinate, and if the customer complains they were sick, do something to recompense them.  But if you were a small local restaurant with a very supportive and regular clientele, you may decide to call those people you remember ate the bad food and let them know.

Apple’s iPhone has an antenna issue. You may remember back when their latest phone seemed to have a problem where holding the phone in a certain way meant calls were dropped or not completed.

• Contact: Could reach all the users, since they are phones.
• Scope:  All new versions of the phone had this issue.
• Danger: No danger to any of the users
• Cost: If they’d had to replace all the phones – high, especially in roll out with new phone.
• Reputation: People generally have a high opinion of Apple. If Steve Jobs felt it not a big issue, then the users might give him the benefit.

In this case Apple gave away free cases for a while, management came out strongly on the issue, and generally the issue petered out.

So in my cell phone example -

• Contact: Can you contact the customer? While in some cases it may be difficult to contact the customer, in the case of mobile phones it is quite easy.
• Scope: How many phones are we talking about? If it is 10,000, that is very different than 500 in terms of cost to replace.
• Danger: Does using the defective product harm the consumer? Will the user be harmed by using the product? In the case of my phone, it was annoying, but not dangerous.
• Cost: Unknown, but I would imagine the cost would be pretty easy to calculate (# phones x cost of replacement body + shipping).
• Reputation: Will not acting harm your reputation?  What is your reputation with consumers? I think we can all agree that cell phones are rather balky devices and we have low expectations regarding their operation.

From the above, the cell phone manufacturer determined they would let the customer call, and when they do, then replace the phone.  

I happen to believe this was a mistake, mostly on the grounds of reputation. BlackBerry owners generally are business users, not consumers. As such, they are already disposed to the strengths of the BlackBerry – reliable, email, voice mail. Since typing on the physical keyboard is why I use a BlackBerry, a typing input problem is a real issue.  Also, I bet that they could know which business users are most important – those that use the Enterprise server edition. Why not replace those phones? Since my company allows Apple iPhones to be used for business email, I stick with the BlackBerry for its keyboard.

What would you do?

Recommending your Customers

My wife and I were shopping at Barnes & Noble bookstore this weekend and when we got home, I noticed in addition to our receipt and books, our bag contained a short slip printed after the receipt that gave us 4 recommendations for other books, based on our purchase.

I am not sure how long they have been doing this, but it is a great means to engage your customers further. The recommended books were not extraordinary (they were on the same level as the recommendations you receive from Amazon), but as their algorithms become better, this will be very helpful. Moreover - why not allow you to scan the book you are interested in the store, and have it give you a list of available books (rather than waiting until you've completed browsing and are checking out.)

The reason I go to a bookstore is to buy books that are in stock (I can always order online if not) - so give me those choices!

The same process could be used by smaller retailers as their POS systems become more sophisticated. If I purchase the same products regularly, why not offer me the option to purchase additional items that are liked by people like me.

The unobtrusiveness of the paper in the bag is also nice since I can choose to review the titles or not (without being "sold" on the books).

When the Audience responds

At the beginning of each Entrepreneur Breakfast, I ask any new attendees to stand up and give their name, company and what it does. This morning because our speaker had to leave early, I skipped that part of our introductions. As the breakfast came to a conclusion, I still had not asked new attendees to introduce themselves.

One of our regulars asked, "aren't we going to have new attendees introduce themselves?"

Great question, and something I should have done. I was more heartened that he asked it. When your customers understand what you are doing so well - that they respond this is how it should be done - you've done a good job in creating a community.

Consider when someone takes their friend to a favorite restaurant. The regular will carefully explain how the restaurant does what it does well, tasty dishes, service. The regular brings the new person into the community of that restaurant. As the restaurant owner, you cannot buy better marketing than this.

When the audience responds, you know you are reaching them!

Same thing,...only different!

In his book, "Save the Cat", Blake Snyder describes how to write a good movie screenplay.

One of his pieces of advice has to do with the theme of the movie (what the movie is about). He says it's helpful if the movie is the 'same thing,...only different.' The idea is if someone is considering what movie to go watch, he needs to be able to fit it into his mental map of the type of movie it is, before he'll go see it.

When working on your business idea - you can use the same type of advice. What is your business like, and yet, different from other businesses?

One of our clients at the Center for Business Development, The Physician's Agency is a great example of this rule. They provide an agent relationship for new and current doctors. Their business model is like an agent for a football player or other sports star. It is different from that business by concentrating on doctors, not athletes.

When explaining their business model, people quickly catch on to what they are doing - and if it is relevant to them. It also makes it easy to say 'what do they do?'.

How about your business: is it the 'same thing,...only different'?

Pawn Stars Secret to Business Success

I must admit it is (a little) heartening when I read a news article whose point of view substantiates the advice we provide business owners.

An article on CNN about Rick Harrison of the tv show "Pawn Stars" describes his secrets of success. The article lists five secrets -

1. Set yourself apart
2. Know how to negotiate
3. Offer something no one else does
4. Treat every customer well
5. Embrace social media

and gives examples of each (his example of social media is to have the fans design their t-shirts, which not only created traffic, but also saved him money!)

Still visiting the Center for Business Development is much easier than going to see Rick - no bouncer at the door, no throngs of other customers and no funny nicknames for the staff!

Quality v. Location

I have noticed recently that the quality of small business marketing material has increased dramatically. Whether through the printing and layout of menu's online, to business cards, to simple logo design - the overall quality is quite good, especially given the costs associated.

What remains poor, generally, is the location - where the marketing is targeted.

I have had more than one business owner tell me he is on Facebook, has his own Twitter feed, great logo and design, etc - but no clients!

Part of this is due to the quality being something you can purchase/obtain without much difficulty. There are hundreds of qualified web designers who could make you a website - just figure out what you want to spend!

But knowing where to locate that marketing can't be easily purchased. It falls back to simple leg-work and doing the market research to know who is the client, where is he located, what does he want to buy/learn/enjoy - and how are you going to reach him.

The good news though is that this research can be done without a large amount of money, just time and effort. Since most small business owners have an overabundance of effort, this means they have the capability to actively understand their market.

The bad news is that the ease of purchasing quality of marketing material gives the pretense of understanding the market.

Where are you spending your time?

Crossing the Rubicon: No Excuses

An interesting article regarding Steve Jobs and his management style notes that Steve uses a parable to describe the difference between a VP and underlings:

Jobs imagines his garbage regularly not being emptied in his office, and when he asks the janitor why, he gets an excuse: The locks have been changed, and the janitor doesn’t have a key. This is an acceptable excuse coming from someone who empties trash bins for a living. The janitor gets to explain why something went wrong. Senior people do not. “When you’re the janitor,” Jobs has repeatedly told incoming VPs, “reasons matter.” He continues: “Somewhere between the janitor and the CEO, reasons stop mattering.” That “Rubicon,” he has said, “is crossed when you become a VP.

(Excerpt quoted from a MacStories report, accessed on May 11, 2011.)

Great story, great quote.

I'd like to turn this on its head a bit - and ask, "as an owner (manager/boss), are you giving your employees the circumstances, the opportunity, to make it so?"

Here is another story from Apple about Tim Cook.

Tim cook arrived at Apple in 1998 from Compaq Computer. He was a 16-year computer-industry veteran - he'd worked for IBM (IBM, Fortune 500) for 12 of those years - with a mandate to clean up the atrocious state of Apple's manufacturing, distribution, and supply apparatus. One day back then, he convened a meeting with his team, and the discussion turned to a particular problem in Asia.

"This is really bad," Cook told the group. "Someone should be in China driving this." Thirty minutes into that meeting Cook looked at Sabih Khan, a key operations executive, and abruptly asked, without a trace of emotion, "Why are you still here?"

Khan, who remains one of Cook's top lieutenants to this day, immediately stood up, drove to San Francisco International Airport, and, without a change of clothes, booked a flight to China with no return date, according to people familiar with the episode.

Now if Khan had to fill out 15 forms before he could leave, get preapproval from HR for being out of the office, use the 'corporate' carrier, and could not get any money to work from - how would he have been able to 'do whatever it takes' to make it so? For "no excuses" to mean something, the VP has to have some capability to make things happen.

You have to trust your employee (VP level or not) to get things done (and get out of the way). If you want them to 'cross the Rubicon' then just like Caesar they have to have their own legion (their own power) to do just that. And organizations are petrified of releasing that level of control.

Apple's advantage might be that they do a better job of clearing away those things that keep their VPs from being able to go out and act (without excuses). What about your company?

Customer Fatigue

You've probably noticed I haven't been writing as many blog posts lately. After running the site for a while, I became a bit fatigued; I have a new found respect for daily bloggers (and writers such as Seth Godin, who have good stuff every day, are residents of Olympus!)

But this fatigue can often strike a business owner dealing with customers. Growing up, I worked at the local Sears store. The department managers would be called again and again throughout the store during their shift to handle a problem or issue - usually with a customer who wanted 'satisfaction or your money back' from his Sears store. After a while, I noticed a certain bland resignation in each manager's eyes while handling any customer issue.

This Customer Fatigue strikes all of us working in our business day after day. Sears had many managers, so they could at least rotate out every once in a while. But a small business owner is there on the front line every day.

How do you mitigate your being tired of dealing with customers? One way would be to push whatever decisions you are making (returns/problem with product) down to the staff who work for you. You may have said that all returns have to be approved by you, because someone took something back from another store. Your simple idea has now forced you into being the person to work with every disgruntled customer.

Another is to try and discover the underlying reason driving the customer to speak with you. Could your staff need some customer service training? Could your return policy be vague or too liberal? Is your employee Mary causing problems time and again? By acknowledging the causes behind customer fatigue, you can perhaps handle it better.

Finally, try to avoid viewing customer interactions as a battle of wills - you v. them (either in selling or in handling disputes). I know this is harder for some of us (drive is what makes us successful!), but if you view an interaction as something to win (or lose), you will lose perspective.

Likewise, my fatigue in writing for this blog could be overcome by having another writer help, or not try to compare my writing to much better bloggers. Instead what are my goals for the site and keep those in mind as I think of topics to write about.

Seasonality - taking advantage of Spring

We are having a beautiful spring day here in Stillwater. If your business can take advantage of the season - do so.

Of course lawn and garden stores put out their flowers and new plants, but automotive businesses can sell wash and wax ("Get rid of Winter's dirt"), or painters can point out the peeling paint around the garage.

When we get to spring, customer's thoughts turn to activities they've put off through winter. Add to your marketing pieces a bit of spring color and the same message take on stronger meaning.

Take advantage of the seasons in your business!

Technology Ventures Summit, Feb 15-16

The Technology Ventures Summit is going on February 15th and 16th in Tulsa, Oklahoma. The first day is devoted to helping new Angel investors learn how to invest in technology startups. The second day has technology company presentations.

Three of the Center for Business Development client companies are presenting their businesses on Wednesday the 16th:

• XploSafe, LLC
• Secure Analtics
• Bluewater

If you are attending the Venture Summit and see their presentations, please let me know how they did! It is very helpful to have different people hear the presentation.

Email me at Bradr (at) Meridiantech.edu.

The value of individual data

I received the latest weekly memo from the Guthrie Chamber of Commerce this morning. In it, they described how they were at a travel show selling Guthrie as a tourist destination. During the show, they remarked "A couple of people commented they tried coming into Guthrie at the first exit by all of the car sales and salvage yards but was discouraged and turned around and went back to the highway. (that is good to know)"

Guthrie has two entrances off the main highway - the southern entrance takes a long curve up into town, the northern entrance cuts perpendicular to the town. And some people had gotten off at the southern entrance and gave up trying to get into town (which is about 3 miles max) because it did not seem as though they were getting to their destination.

The issue I want to raise about this is: "what should you do with a piece of information like this?"

You might -

• discount it, assuming most people wouldn't give up like that
• acknowledge it, but do nothing as it would cost too much
• acknowledge it, and buy a bunch of signage, get a committee together, etc

or do any number of a myriad of other solutions.

The point is: every day you will receive information like this at your location, store, business - but if every day you get information, how can you possibly act on any of it in a timely manner? You will end up being whipped from one item to the next.

A means for helping with this is for items that are not of immediate issue (there is ice in front of the door and it is slippery!) - instead of acting on the information right away, write it down in a list. At the end of the month, set aside one hour to review all the pieces of data, and sort/review according to need or importance. Then try for the next month to resolve one of the items on the list.

Returning to Guthrie - it might be easier for them to have a sign on the highway before the southern entrance that says "Downtown - take #" than to add a bunch of signs after the people get off at the southern entrance.

There is value in the data you gather for your business, but the value can only be taken advantage of if you can act on it (and then evaluate its effectiveness). Too often business owners come in to me and say "here are 17 items I need to work on in my business" - who can possibly get that many things done? Collate the data - and solve one item.

Marketing after the sale

My wife and I had the opportunity to purchase a car over the holidays. Once you have bought a car, you always have the stuff that fills the old car interior you have to move over to the new car.

If you've ever done this, you know there can be quite a bit of stuff to move. And the dealerships never seem to have any boxes around to fill.

Simple marketing opportunity: boxes printed with the dealership name. Have a stack of them in an empty office, and whenever someone comes in and buys a car, you fold them together, and help the new customer. Make the boxes white, with a cover. Or buy a stack of plastic bins like are sold for Christmas decorations. Make up labels and stick them on the side. Anything to get the dealership name out there, and make the new customer feel they were well cared for.

You could even have a local restaurant include a coupon for a meal up to $25 in the box. If people are like me, they have a pit in their stomach every time they have to sign all that paperwork - at least a nice meal will help me leave a bit less queasy.

The dealership loves you until you buy the car, then the relationship really begins. Why not keep the warmth for a bit longer.

Marketing continues even after the sale.