Stop Hiding Behind Your Business

I have been having the same kinds of conversations lately with the businesses I’ve been helping. I believe it’s because the businesses I’m working with have seen some growth and are all doing the exact same thing right after their growth experience. They are retreating into their offices and hiding behind the glorious (positive) data they have collected. I absolutely respect the sanctity of the growth process but, getting out from behind your computer screen and continuing to be out in the world making things happen just can’t stop!

I love data.

I will be the first one to tell you that I get a little bit of a thrill working my data into a model and then working on either creating some kind of inference or using derivatives to look for points of maximum/optimal return. But there comes a time when even the best modeling can’t guarantee business success - especially if that model you just built is a permanently positive linear one.

For all my creative independent businesses out there - I promise, that’s the last of the math talk.

I also love people. I love mission. I love seeing customers and clients getting value out of something I put into the world.

In order to create positive momentum in your business you have to go out and do the things you say your business does. You can’t just tinker.

This post is a cry out to any entrepreneur who has seen a little growth or momentum recently. Any growth. It could be an increase in view, subscribers and of course sales. My plea to you is to avoid the temptation to tinker. Avoid diving into your spreadsheets and falling to the business romanticising trap - the Business Ghost of Christmas Future Fallacy is what I’m calling this.

Having a plan and checking the results your actions have yielded against benchmarks for success is important. But a check-in is really all it should be. Here are a two tips to keep your inner quant at bay while you are out there in the world hustling in your business to succeed.

1. Commit to only changing one thing in your business model/process at a time.

This is how testing works. You go out and try to do something awesome for people that need what you are offering. If you feel like something isn’t working or could be working you make a single change and then get back out there. As you collect more experience and take more actions you’ll start to get a feel for the impact that change had - eventually deciding if it was a winner or not. This works best when you give your ideas some time to grow and your business enough time to get a little traction. I can’t tell you the perfect amount of time because every business is different. I can tell you that a week is probably too short and a two year period is probably a little too long. Check in systematically in that window a few times.

2. Stop running your business in terms of one-offs and winging.

Tinkering thrives in environments that lack structure. I’m not saying that every component of your business’ processes have to be etched in stone. What I am saying is that you need a routine. Tinkering happens because it feels like work and you have the potential to discover something interesting that might push your business forward. It’s not work that is going to directly grow your business through (most of the time). You know what will push your business forward - having processes or systems that take the winging out of your business. To beat the hour-eating-tinker-monster first find out what the important parts of your business are that need to happen on a daily, weekly, and monthly basis. Build a process for as many of them as you can that includes putting time into your schedule to plan, execute and review. This will lead to less one-offs and more focus. You’ll also find that your productivity will start to get a little better because you are worrying less on what to do and more on going out and doing.

Like I said earlier, I love data. You can’t get stuck in the data though. You have to create a plan that means something to you and then trust yourself (and the plan) enough to go out and keep bringing something awesome into the world. Whether you feel it or not all businesses have a bit of inertia to them. Great strategy is about building on the positive inertia so that you never stop moving forward.

How Do I Price My Product?

Buckle up boys and girls. This is going to be an epic deep dive into the different ways you can price your products or services. Pricing is an interesting topic and there's a ton of advice out here on the internet. The funny thing is that "other advice" doesn't really do a good job of setting up the frameworks so that you can compare how different pricing strategies work or can even change over time given the conditions in your market.  

When it comes to driving your business’ success, how you price plays a major role. Your prices communicate your value, can illustrate your quality amongst your competitors, and even influence what the market is willing and able to pay for what you’re offering. The problem with finding what the “right” price is for your business is that there is no magic formula. That’s where this article comes in. This article is going to outline some of the bigger objectives of pricing right and then offer you pricing strategies you can implement today. Your job is to figure out where your business model falls within the objectives and then pick a pricing strategy to run with.

Let’s lay some foundation points first:

• Buyers are intrinsically motivated to get the most value for their dollar based on cultural, social, personal, and psychological influence. Buyers need to know, like and trust you. So work on understanding your target audience to best communicate your value to them.

• Most buyers will go through this process:

  • Identifying their problem.

  • Doing some kind of research (yes even simple chats with friends count).

  • Evaluate their solution choices.

  • Make a purchase decision.

  • Have a post purchase response (think in terms of buyers remorse vs raving advocate).

• As a seller you need to have the mindset that you are trading some kind of value for dollars. You are motivating buyers by fulfilling some kind of specific need. Those needs can range from being the low cost provider to offering the highest quality product.

• Guessing is the worst thing you can do in your business when it comes to pricing.

• Prices don’t have to be set in stone forever. They can change over time but remember your prices strongly communicate how your business is doing so change with purpose.

What Motivates a Seller

Below you will find some of the biggest motivations that drive seller behavior. The best advice I can give is to read each of these motivations with your business model in mind. Think about where in the market you want your business to compete and where you think you’ll have the biggest chance at finding success. Every seller will hit each of these points with varying levels of intensity. The important thing is to understand what should motivate you and to look at what you are doing in your business to bring those motivations to actions and outcomes.

1. Maximizing profit. This can be a long or a short term goal and it has to do with how you have aligned your costs and production process. Every business should want to maximize profits. The special sauce here is understanding that high prices do not always translate to higher profit.

2. Maximizing unit sales. This can be for both a maker and a do’er. As a seller you should always be striving to work at delivering the best work you can in the time you are allowing yourself to do it. Once you're comfortable a level of production work on continuing to build your capability and grow your capacity.

3. Capture market share. More market share leads to more advocacy, more sales, more authority, and a growing community. You don’t have to be the biggest business on the block to be the most popular.

4. Create barriers to entry. When you think of pricing and profits the more profitable your business the more incentives you will give businesses to try to jump in and steal your Kool-Aid. Finding your competitive advantage and holding on to it is going to make it hard for that to happen.

5. Best quality or be exclusive. Creating a culture around your business and brand will help keep your customers or clients from making snap judgements based on price alone. You need to be aware of the low-price-low-quality stigma and if you are low price be prepared to combat it with a flurry of “innovation” based support.

6. Using the loss leader strategy carefully. It can be tempting to start slashing prices to get traffic to your site or store front. Be careful about the message that sends and how often you use this tactic.

7. Trial purchases. As a seller you might want to encourage your customers to give a trial a shot. The guys over at Fizzle did an awesome job of communicating and executing this concept. The best thing I can do is tell you to check out their splash page.

There are probably a few motivations that I missed but those are the biggest and most prevalent ones that sellers have to try to juggle when figuring out how to price their products/services and even running their business. You have to care about all of these things not just about what your profit or revenue looks like all the time. It’s ok if one or two resonate with you a little more than the others. Use what drives you most as you start to think about how you are going to price going forward.

Pricing Strategies

Now that you’ve reflected and mastered what motivates you as a seller it’s time to find the pricing strategy that fits best with what motivates you and your business model.

Cost-Plus Pricing - *Full Disclosure: Not my favorite because most people use this wrong* Cost-plus is a pretty straight forward approach in terms of pricing and it’s also one that lots of people default to. Just because it’s easy does not mean it’s right or right for you! All you do is figure out what the per unit cost of what your good is or of what your equivalent service is and add a fixed percentage to it as profit. So, if you are selling something that costs $100 to make and sell and you want to make 15% profit on each unit your selling price is now $115. This really only works in super niche, unique or noncompetitive markets. It’s not my favorite because as a seller you aren’t really doing any of the work you need to do to align your prices with the needs and wants of the buyer. It also doesn’t lend to the seller working to deliver more efficiency because the profit just gets tacked on to whatever the cost to market is.

Price Skimming - This is a fun problem to have. As you sell more and more of your stuff you’ll need more and more inventory or resources to deliver. As you continue to build capacity and your capabilities you are going to find efficiencies. As a seller you get to translate those efficiencies into lower prices for your consumers. This works really well with manufacturing and technology typically because you are playing with classic economies of scale. You are lowering your prices (lowering profit per unit) with the goal of moving more units than your competition. If you are a service provider or are selling an information based product this probably isn’t the strategy for you because continuing to skim prices over time might lead to unwanted perceptions of your brand and product. To make this work well you need to make sure that your quality is always staying the same or increasing (you might hear the buzzword: value innovation). When customers feel like they are getting cheaper prices and cheaper quality it doesn't go over so well.

Penetration Pricing - This is great for new businesses and it’s a pretty straight forward strategy. You enter the market at a lower price than your competitors and then increase prices over time. This is your typical trial offer. You entice buyers or users with a low cost of entry and then do your best to deliver as much value as possible with the hopes that those customers will stick around and continue to engage. Also works well when there are subsequent offers or upsells as part of your customer experience. The best success happens when your business is tied to a very specific experience or problem. I love this approach because you are communicating to your potential customers that you are so confident they will find success/be happy they will continue to come back and engage with you. Plus, if it was one of the few times that it’s not a good fit your customers only paid a discounted price so they are less inclined to be as upset (even less vocal) because the stakes were so low for them to try you out.

Prestige Pricing - Malcolm Gladwell does an amazing job explaining this concept in terms of Grey Poupon in one of his TED Talks that I linked here. With this strategy your goal is to create the perception of quality and exclusiveness. Higher prices here will imply higher value but there’s a catch. The price alone isn’t going to impress the average buyer. The packaging, copy, branding, and experience around the good/service needs to align with the higher price you are demanding. You have to create a prestigious experience for the buyer. This is a great strategy for service providers and information products because you are delivering a very specific solution or specific information that will solve your customer's pain points. The more specific your service the more expertise or experience is needed to deliver that information and in terms can command a higher price.

Bait and Hook. This sounds like what happens in the bar scene on the weekends but it really is a pricing strategy. With this strategy you are charging a low price for the initial purchase or interaction and then much higher prices for either replacement parts or supplemental services/products. The razor blade industry does amazing here. Think about the last time you bought a razor and what that price was. When you went back for more blades did you notice how much more expensive they were compared to the initial razor purchase. That is a classic bait and hook. The same goes for the average ink-jet printer. This works well if you can be fairly sure that your initial customers will continue to interact with you after the shock of learning about the higher prices the next time they engage with you. As a seller you need to be able to communicate the value of those subsequent purchases. If you fail to do that you’ll end up with customers like me that see the higher prices of the replacement razors, skip that purchase, and just buy another new razor start up kit.

Price Promotions. This is when you temporarily give out coupons or rebates to reduce your prices when you: introduce new offerings, are trying to attract buyers from other businesses, or you have extra inventory that you are trying to get rid of. These promotions work really well when you create mini campaigns around them for special occasions. This strategy is like a kinder gentler bait and hook. You have to be careful with price promotions - customers will only tolerate them for so long. If you coupon too often or too steeply your customers might think that your work doesn’t deliver the value your price says it should. Think of this as a strategic tool in your pricing tool kit.

Phew! I hope you are still with me :) So up until now you’ve been thinking about what motivates you as a seller and some different approaches to pricing. The last piece of the puzzle is talking about the customer’s perceived value.

Customer’s Perceived Value

This conversation wouldn’t be complete without touching on perceived value. As a seller, maker, do’er or marketer you need to understand a little more about what drives customers. There is a pretty easy measuring stick for this and it’s one that will also help you work on your copy when you are communicating your what makes you so awesome to your audience.

The metric is figuring out what the price or cost of the best alternative is and adding the difference in value that your work brings to the customer. If it sounds a little fuzzy it’s because it is. Unfortunately though, it’s one of the best ways you can work to differentiate yourself and figure out how your customers perceive the value that you offer. Another way to think about it is to think about what your customers are missing out on if they choose to go with your best competition...actually that’s an easier way to think about it. Use this metric as a way to take your markets temperature on what you are offering and comparing that perceived value to what’s out there.

It’s important to understand what you’re really good at (competitive advantage) and to be able to communicate that in a way that will best serve your target audience. Perceived Value is not just buzzword fluff and it’s not something that you should just skim over. When you are thinking about how your business stacks up against your competitors or how you are looking to be different start at your core. Your core capabilities are the things you have to do every day to get your work in the hands of the people that need it most. Think carefully about how where you are special or unique throughout that process and why that matters to your customers. Take me for example. There are lots of Professors, Small Agencies, Management Consultant Firms, and Freelancers out there that do what I do. We all have access to the same kind of information and tools (relatively). What sets me apart is my process and how I do my best to deconstruct concepts and problems so the business I work with can take action right away. That’s my competitive advantage - plus I hate when similar professionals hide behind academia or corporate boardrooms because they think they are the only ones that can decipher and implement strategy.

Phew (again)! If you are still with me then you have a solid set of tools to start really thinking about what sets you apart, what motivates you and how you can start to tinker with your pricing model. This stuff takes practice so just start! If you are looking for a little something extra to help you get started you can check out the free Disruptive Decision Framework down below.

Don’t forget to check back in with me too! I want to hear about your successes, struggles, and questions as you start to get objective and deliberate about your business. 

What Business Consultants Don't Want You To Know

Don't get distracted by the fluff! 

Business strategy is great to talk about around the water cooler and looks good on paper better on paper. But, is that where it ends in your business? I sure hope not. There are already way too many wantrepreneurs in the world right now. If you’re talking about doing stuff and not actually doing stuff then you probably won’t be around for very long.

How then do you give your strategy and your business the best chance at success?

It’s in the execution.

I have a few strategy secrets that I want to share with you. They’re the kind of secrets that “consultants” don’t want to share because it’s what they use in their “coaching”. Yes, egregious use of “” but I’m not mad about it and it’s going to happen a lot in this post.

I’m putting all the untrained and inexperienced “business consultants” who charge for strategic planning on blast right now. I’m putting you on blast because strategy is not something that should be locked in the safe at the end of the day and it’s not information that should be kept behind long contract obligations and expensive retainers.

Before I get really salty on the hucksters out there I want to just take a moment to share the positives of working with quality professionals. Working with a strategy or business development professional is great because they can potentially bring in a new perspective, insight, and infrastructure when helping you build a strategic plan. They are the ones that help make complex concepts simple and actionable for you and wherever your business is at the time.

Let’s get to dishing on some of those insider secrets I mentioned earlier.

The first thing that you can do to give your strategy (and business) a fighting chance is be extremely clear on who gets to make decisions. Not only the who but, what kind of decisions they get to make and why their input is critical. You are literally describing and clarifying the rights that the decision maker has. You want to call them rights because it will help bring the expectations to a crystal clear level and you will avoid problems around who owns that decision.

Here’s why this is important:

1. Help people that you rely on understand how their day to day decisions affect your business's bottom line. Feel free to get brutally honest and transparent about the real costs.

2. Helps increase the way information moves through your business. This is super important even if you are a solopreneur.

3. Helps with delegation of tasks, resources, and responsibilities. Again even if you are a small business, (even a one person shop) deciding where to spend your time is critical. To decide well you have to clearly define what kind of decisions get made in the business, when they happen, and how you follow up on those decisions.

The next and final ingredient in the secret strategy sauce that “consultants” will charge you for is helping you understand how information flows through your business. You might not think that is important but in order to help push your business forward, having quality information that’s reliable is crucial - winging it doesn’t make businesses go.

Well go for very long any way.

You need to be collecting the right kind of data. Decide what matters most and track those things. You would not believe how many times I witnessed businesses just throwing away their end of day sales numbers. If you are a retailer or a service provider how can you make good decisions is you don’t have an accurate picture of one of the most important pieces of information your business collects - how much have you actually sold today!

Here’s what you need to think about in terms of information flow:

1. Look at your organizational structure. Is how you run your business day-to-day, week-to-week, and month-to-month providing you with good operational data when you make your decisions? If not time to reorganize.

2. Are your incentives aligned properly. Even when you are a business of one if your incentives don’t match your workflow or needs it’s easy to get lazy. Lazy leads to bad information and bad information leads to bad decisions.

3. Get cross-functional. Are you looking at your business from a holistic enough lens? That might sound “fluffy” but when you are trying to make decisions that will make your supply chain more efficient it’s important to measure that against the entirety of your business. Do you use all the information your business collects to make decisions?

4. It’s easy to just keep your head down and keep working. Are you picking your head up enough so that you can look around and make sure the information you are collecting and using is relevant?

Those are the biggest things to consider when you are trying to shepherd your strategy to  success. Consistency is important. All the other parts of the strategic planning process can be worked on over time. Keeping your competitive advantage, finding the cheapest suppliers, and making sure your margins are not pricing you out of the market can be tweaked in the very short-term. Setting the stage for good information flow and better decisions are changes in behavior take a little more time, effort, and follow through.

So go decide some stuff and make your business a strategy executing machine!

How To Make Better Choices

**Steps on to soapbox.**

I’m getting a little tired of the entrepreneurs and the would-be business coaches/consultants that are minimizing the importance of strategy. I keep bumping into claims that business plans and strategic plans are a waste of time. A waste of time? Why are entrepreneurs just sprinting to a MVP? Is it because iterating makes you feel like your business is doing something?

I’m all for minimum viable products but that doesn’t mean your work shouldn’t be thoughtful, deliberate, and value-creating. Lately objections to competitive strategy I’ve been getting are when someone from this camp claims that their lean strategic approach is the only way to deal with the volatility/uncertainty/complexity/ambiguity of today’s marketplace. (That’s the VUCA acronym for all my strat-nerds out there.) I believe, not always but most of the time, entrepreneurs are using this kind of strategy argument as a cop-out.

What?!

I get it. It’s fun to tinker. Strategic thinking takes time, research, and is a little unsexy sometimes. Not to mention the need to be consistent and systematic with how your firm makes decisions. I’m 100% for “failing fast and failing often” but I guess I would add “failing deliberately” to those first two fail prefixes. Why “failing deliberately”? Because it means you tested something specifically, collected some data, and made a choice. Here are four steps, concentric circles, or tips about how you should frame strategy.

Strategy at its core is about making choices. Planning is great but it’s the actions that are taken after everyone agrees on the plan that really matters. There’s a very real breakdown that happens when you come up with the plan and then never do the work to realize the goals or <insert success metric>. There’s also a lot of power in choosing what not to do. Channel your inner economics student/professor and try to remember all those talks about opportunity costs. It’s real and it’s a thing.

When you take a step back from the core it’s about understanding how your business is positioned in its market. This is where your business’ malleability and your market’s predictability get pulled in. How quickly can you continue to align yourself with the tastes and expectations of your target market? Do you even know who your target market is and why they should engage with you? How are your competitors reacting to the choices you’re making? Are you really getting the most out of your supply chain? Immediate follow-up answer: Yes, every business (even solo-service-providing-consultant-freelancers) has a supply chain.

Another step back from that should be around how you are communicating with your stakeholders. Anyone that is engaging with you or that you want to be engaging with is a stakeholder. Why should they listen to you? Why should they care? Your strategies success hinges on your ability to tell a story that matters. It’s that story that will drive your actions, the actions of your employees and even the actions of your customers. You need to be able to communicate in a way that makes them feel like their roles matter. Engaging with you matters. Buying your product or service matters (and also provides lots and lots of value).

The last step back has to do with planning. Planning is part of strategy. Planning is NOT strategy. Planning also isn’t perfect. It’s hard to predict the future, it’s a volatile world out there. It’s important that you think of planning as a way of surveying a landscape. It’s a way of taking stock of what you have, all the “stuff” that makes your business work. You’re looking at things like capabilities, talent, money, time, social media celebrity status and trying to organize them in a way that will get your business to achieving it’s goals in terms of mission and profitability. What comes from planning is a framework for making choices and a way to evaluate those choices as you go.

Strategy is an interesting mix of science and art. It’s also hard and scary sometimes. A good strategy will push us to be a little uncomfortable and as Malcolm Gladwell says a little disagreeable. That’s where strategy differs from planning - the act of doing something! Making choices systematically can be tough and not always what you think running a business should feel like. I’ll end borrowing from Roger Martin encouraging you to make deliberate decisions around deciding where to play and how to win as you’re trying to get the most out of strategy.

**Steps off soapbox.**

If you're still stuck or wondering how you can start to make better choices in practice right now you can download a FREE resource I made for just this occasion. It's called the Disruptive Decision Framework and all you have to do is sign up and I will hand deliver a copy to your inbox. 

Here's Why You Can't Fake Agility In Your Business

What does it mean when an entrepreneur or business owners says that their business is agile?

Does it mean anything?

It does.

Business agility is a way of describing how quickly and efficiently your business adapts to changes in tastes, expectations, and needs in your market. It also describes your ability to create change in your market. The fervor over agility started in tech/software companies and is being applied to businesses in almost every industry and sector.

Being agile, in my opinion, is as important as focusing on being cost effective, delivering the most value and constantly creating an awesome experience for your customers. As an entrepreneur at heart, you have a natural inclination to being agile - it’s how you keep your business moving forward.

If you’ve been following me for a bit you know that I am not a fan of buzzwords. When it comes to business agility I turn down my jargon-filter a bit because being able to change in your market and make good decisions in your business is a big part of good strategy.

Sadly, just like any good business concept this too gets butchered in the corporate world. Faking agility is probably the worst thing your organization can do.

Here are 5 tips to help you spot an agility faking organization or team.

1. No real buy-in from your team or staff.

This is where everyone is on board in public and when an opportunity to change comes up there’s nothing but static. How can you be agile when you’re support staff is constantly complaining about the constraints of their roles? Change is hard. It’s easier to just keep your head down and work like you always have. It’s that familial force that impedes your agility. Watch for the overly enthusiastic in person that show signs of underperformance on the front lines. It’s up to you as a leader to create an environment where the people you count on are invested in you or your business’ value to get to real buy-in.

2. Calling yourself agile but not adopting the agile mindset.

Being agile in your business means that your mindset and your business model shifts a bit. Being agile means you are spending time developing communication, collaboration, feedback and even incremental delivery processes. Pro-Tip: It’s focusing on the process that matters here - lip service = no real buy-in. (See #1.) Seriously, focus on the process.

3. Always serving up the same product or service.

Competitive advantage is a fickle muse. It’s not something that you get once and then you’re done. For your business to be agile you need to be able to take time and evaluate what your market is doing. A big question to answer is: “Is my business still solving a relevant problem?” It can be tough though, there’s always a little resistance when you’re standing on a precipice of change. Don’t fear change and don’t fear failure. It’s in both change and failure that you will keep figuring out how to best serve your customers and most importantly how to keep creating value for them.

4. No active leadership.

A big term in agile business principles is the idea of the scrum. Since I’ve been playing rugby for so long this is one of my favorite parts of being agile. An agile scrum represents your team or the project you’re working on. Part of being in a scrum means that there is a designated leader or owner for the scrum. It doesn’t have to be the same person all the time and the person in charge of the scrum is really more of a facilitator. The benefit to having a lead in the scrum is that someone owns the project. It’s the accountability that helps drive your business or projects forward. Without a facilitator you have the potential to have projects make little to no progress and eventually fall off the face of the planet. Leadership should be rotated and it’s leadership that will continue to support everyone’s buy-in.

5. Killing creativity.

Being agile includes giving people permission to explore. To do that in your business it’s important you don’t create too many processes or systems to get permission or consensus at every single step in the process. While I totally support process and systems - too much of it can be a really bad thing. There has to be a balance. Don’t fall into the trap of getting so caught up in designing how you are going to be/measure/implement your business agility that you forget about applying the core principles of giving people freedom to go out and look for opportunities. The more logistical hoops you create the slower the innovation, the more opportunities you miss, and you are creating an environment for change to be really hard.

If you do the opposite of these 5 tips you’ll be in good shape. Agility is about helping people share a mindset and nurturing your business so that you can continue to make great stuff for people. An implied part of being agile is your willingness to never stop learning. It’s being open to new things that will help you see opportunities to better for your customers and clients.

Use Strategy To Focus Your Business Planning

Continuing to deliver your value better than any/all of your competitors can be one of the hardest ongoing challenges any business owner can face.

That’s competitive advantage and it’s one of my favorite parts of strategy. It’s one of my favorite because it forces you to consciously decide what you’re going to do in your business and more importantly what you are NOT going to do. If you think about strategy in terms of a set of boundaries for your company it will help you focus all of your business planning and business actions to make sure you are doing your best to keep your business growing.

I know what you’re thinking (some of you anyway): “I’m too small to think about strategy.” “Strategy is too broad a topic and it’s not worth thinking about.” “I’m too busy to think about changing my business plan.” “My business is running fine.” And my favorite, “I have a strategy in my head that I’m working on”.

If you thought or are thinking of anything along those lines I’m going to just straight up tell you; you're wrong. Wrong and probably wasting time, money, and burning yourself out.

I want to outline three big questions that you can use in your business planning process to help you fight off the temptation to do “everything” just because you think it’ll bring in some extra revenue. These aren’t questions that you just answer once and then your done either. It’s important to check in every once and a while to make sure that you are keeping up with the tastes and expectations of your customers as well as what your competitive environment looks like. Remember, competitive advantage has to be actively worked for because the your market will constantly be evolving.

1. Where are you competing?

This question is tackling what market opportunity or opportunities are worth working towards. Another way to think about it is to think about the pain that your business is offering a solution for. It’s important to ground your thinking around how you can better serve that market over your competitors. To do that you need to make sure you have the appropriate resources and abilities. You might have the best and most profitable market opportunity in your head but if you can’t get it to market effectively then you need to keep distilling that idea down to a scale or scope that makes sense for you.

2. How do you compete?

After you have identified a pain you are going to solve better than anyone else (market opportunity) you need to work on how you are going to compete. Are you going to offer the best customer service, the cheapest price, or just crush-it with value. I hope it’s the value part. To engage your customers they are also going to need to like and trust you, at least enough to give you a shot in the first place. How and what you communicate is just as important to the customer as the solution they are buying from you. You are looking for capabilities and resources (also read: knowledge or specialization) that will give you an advantage in serving your very specific market opportunity better than anyone else.

PRO-TIP: Better doesn’t mean cheaper necessarily - working for a cost/price advantage is a very specific way to build a business. If you aren’t sure of the best way to price I wrote an epic pricing post here to help you through specific pricing strategies.

Ok, so the first two questions are centered around Strategy Formulation. You flushed out the pain you are attempting to solve along with how you are going to do it better than anyone else. Strategy Formulation is not all there is to strategy and this is where most people stop or get stuck. It’s why strategies don’t work out or business plans start to become more of a burden to maintain instead of an actual resource to help you keep building your business.

3. How are you going to execute?

This is how you are going to organize your time, money, people, and resources to take the strategy you’ve developed and bring it to life. The business buzzword here is - implementation. Here is where you try to map out and identify your motivations, incentives, how you are going to organize your business (processes) and even what leadership in your business looks like. This applies for big businesses and probably applies best to the solo entrepreneur because it’s this implementation that will keep you accountable to your customers and yourself. This is the nitty-gritty. You are going to be working on the processes that will push you business forward. The best advice I can give here is to keep it as simple as possible. Take a look at your business and build the action plans or lists for all the functions of your business. This even includes something like an editorial calendar for your content marketing. A simple editorial calendar is a brilliant system that will help you manage your time and stress so that you don’t have to worry about what to produce next.

Now that you have an idea of the three fundamental questions let’s cover a few traps that businesses can fall in when they are working on strategy.

1. Bad Strategy + Good Implementation = Doing the wrong thing really well. = Wasting Time and Money

2. Good Strategy + Bad Implementation = Doing the right thing poorly. = No to Slow Growth

3. Good Strategy + Good Implementation = Doing the right thing really well. = Sustainable Growth and Profitability  

It doesn’t matter if you’ve been in business for years or are just starting out. Taking the time to really think about strategy is important. You need to work out how you are going to take what you have access right now and use it to deliver more value than anyone else. Here’s the kicker: It will all change. Understanding your customers motivations and pains will help you to keep your strategy growing as your consumers are growing. Business plans and strategic plans are living breathing resources - not just stuffy documents voted on at board meeting. Get specific on how you allocate your resources and how you are serving your market.

Oh and for the love of Mike you should be writing this all down! Think of these processes and action plans like a recipe to your most favorite meal. You want to make sure that every time you step into the kitchen you are making your favorite dish just the way you like it - every time. Consistency matters when you are trying to get an audience to know, like and trust you. More on that later.

Then, rinse and repeat.

If you are still feeling like you don’t know where to start you can download my Disruptive Decision Framework free! It’s a resource to help you visualize your strategy and give the strategic part of your brain a little jumpstart. You’ll also get access to the Strategy School Newsletter that’s full of extra strategy action nuggets every week.

How To Think Your Way To Better Business Results

I’m going to be tip-toeing the jargon-buzzword line just for a second here. It’s worth it I promise. This post is all about creative agility and how developing your creative thinking muscles is one of the biggest assets you can carry around with you in your strategy toolbox.

Creative agility is the ability or the process of seeing problems or challenges in your business and taking the time to vet out ALL possible solutions (even the seemingly ridiculous) before deciding on a course of action. Being creative isn’t just about creating something, it’s also very much about how we think about the challenges your business faces everyday. It’s also a practice in authenticity. Working as your truest self and do the work that you believe matters most, not just what you think will make you the quickest buck.

When you are working on your business strategy you are using the resources you have to provide some kind of value to the people you are trying to serve. You are faced with all kinds of constrictions, deadlines and communication hurdles. Practicing creative agility helps you reframe what’s going on so that you can get to as many possibilities as you can and then deciding from there the best course(s) of action. Your strategy has a lot of moving parts to manage. It’s important to find the right balance for your strategic aspirations so your vision, the people you serve, your managers(even if you are a business of 1), and your resources are all aligned to be as awesome as possible.

Here are some tips and exercises you can work on to start building that creative agility muscle. It takes practice and creative thinking is a deliberate kind of thinking. You can’t force it and you most certainly can’t fake it. When you start to think more creatively you’ll be honoring the most authentic parts of your business and your strategy. Plus you’ll be more fun to be around at parties, which is a good thing right?!

1. Frame the problem, issue, or “why”?

Being able to tackle issues creatively requires a bit of focus. You have to have a specific end in mind as you are starting in on this process. You don’t have to have all (or any) of the answers at the start but your energy will be best spent when you have an idea of what the end looks like.

2. Embrace the idea divergence.

Give yourself time and space to think freely. Don’t let traditional barriers or approaches guide how you approach your problem. Get ridiculous, get unconventional and get improbable. This is the time to come up with any and all solutions no matter the cost, relevance, or efficiency. As you are brainstorming the only limiting factor you should hold yourself to is a time limit. With a time limit you are making sure that you don’t just get stuck coming with ideas so you can keep the process moving.

3. Establish your processes.

After you get all your ideas out in the open and articulated it’s important to have a process for getting through them. You want to systematically widdle down to a handful of ideas for serious consideration. This is the point where you start to add back some of the filters you took off through your initial brainstorming process. I would encourage you to only consider back the filters that are absolutely essential and continue to play with ideas or solutions that might seem non-traditional or that are different to currently available solutions.

4. Focus on making your customers look good.

I know it’s almost common-sensical to say that you should be focusing on creating value but I want to frame it from a different perspective. Don’t necessarily think that value-add solutions are your winners. Instead focus on making your customers look good in front of their social groups. Shift your attention just a bit to not just making people better off but making them look good. The way your business is perceived shifts a bit too. People want to engage with the businesses that are the most authentic and that create the greatest connections. Having a genuine interest in your customers after they buy definitely qualifies for both those categories. Most importantly, it ups your trustiness.

Creativity is more than just sitting around and waiting for inspiration to jump out of your computer screen. It takes deliberate work. You can give yourself a nice little head start and a safe/positive place to think if you put these four points into action. Understanding the components of how strategy is created and implemented is half of the equation. Getting people to resonate with your mission and to support that strategy is the other half and it’s your creativity that will draw them in.

I think if I were to have one last point. A bonus point, perhaps? It would be this:

5. Have fun with it.

There are a lot of businesses that take themselves too seriously. Yes, there is a place for big box distribution/manufacturing firms where the profit is in the volume shipped and the savings created by having an airtight process. That’s not most businesses and probably not you. Have fun with your creative process if for no other reason than to show your customers that there is a real person on the other side of the screen, receipt, product or service. When you allow yourself to get out of your own way and drop your guard you are able to better invite people to be a part of your community.

Get out of your own way and stop using templates or systems for strategy that you don’t really believe in. That’s not how you get to good strategy and you won’t be able to run the business you really want to run. Instead, get a little creative and be a little more authentic in your strategy creation process.

Your business will thank you for it!

Understand Your Market Or Fizzle Out

When it comes to starting a business, growth hacking your business or even just trying to launch something new in your business there is one piece of the equation that (in my opinion) does not get enough attention. Entrepreneurs and business owners are so fixated on getting the first iterations of their products, ideas, or services out of the door that they fail to assess the depth of the market they are serving.

An awesome idea with no market or a market that is on the verge of some kind of pivot makes for a bad business.

There are two things that are as good as fact when it comes to building a business:

1. Your customer’s tastes and expectations will constantly change.

2. There is no such thing as long term or sustainable competitive advantage.

It’s because of those two things that you really need to be able to identify your market/industry and to try your darndest to get a handle on what’s happening around you so that you can best position your business for success.

I know. You’re thinking that you don’t need a deep dive into understanding your market or industry because you know your customers and are solving a problem they have.

Great but...

• Do you have any idea what your competitors are doing?
• Do you know what your market is expected to do over the next few weeks, months or years?
• Do you know what the demand determinants are for your customers?
• Have you positioned your business such that it you’ve added to the barriers to entry that already exist?
• Are you adding value or different from similar industries, products or services that might already exist?
• Do you know what the most important external drivers are that motivate your customers to take action or engage with you?
• Are you measuring success in a way that will keep challenging your business growth?

One more and then I’m done.

• Do you know how your cost structure measures up to that of your market?

I could keep going but, I think you get my point. Understanding your customers and the world around you is imperative to keep your business moving in the right direction. It might feel like just a busy work exercise but it’s not! The better you know your business’ environment the more quickly you’ll be able to spot trends, you’ll be able to react quicker a your customer’s tastes and expectations change, and you’ll be able to ask good questions to get good feedback from your customers.

There’s no worse feeling than pouring your heart and soul into something only to have no one buy. I know because it’s happened to me once or twice in my early days. It happened because I skipped trying to understand my market and assumed that I knew what was best for my customers.

Besides answering the questions I listed above here are 3 things you can do right now to get a better idea of what’s happening in your market.

1. Go to the Bureau of Labor Statistics and look at trends in people’s discretionary spending.

Here’s a link that goes straight to the Consumer Expenditure page http://www.bls.gov/cex/ It might sound dry but after you figure out your demographic you can learn a lot about what is important to people by taking a look at their spending. Probably the most important thing is to see if people are already spending money on your solution - great way to look for validation. You can also tap http://www.census.gov to get more on drilling dow into the specifics of who your demographics are and how they behave. Yay “.gov”’s!

2. Break your target market into segments.

Think of segments as buckets that are full of different “people who...”. If your product/service is for small businesses then you should break them out into “small businesses who....have a physical location, have under 10 employees, need a business plan, etc.” That will help you as you are trying to quantify your market and your market’s behavior over time. Get specific and deliberate about who you are serving and it will help you make the most out of your time, money and emotional resilience in your business. Remember, tastes and expectations are always changing and they might change in different sizes, rates, or scopes.

3. Figure out what the experts are saying about the future of economic activity.

Yes, this step is about making your way through some economic data but I have a link that will make it manageable for you. This article from Kiplinger is a good place to start because it hits all the major economic indicators and offers links back to their sources so you can continue to dig around. Market and economic outlooks are important because they will give you some insight into the future of your customers needs, confidence, and spending. All very important information when you are trying to compete to get their discretionary dollar’s attention as economic conditions ebb and flow. Here’s the link back to the article: http://www.kiplinger.com/tool/business/T019-S000-kiplinger-s-economic-outlooks/

Most of the businesses I run into don’t give this type of thinking and planning enough attention because they believe they are too small to be affected by their “market”. Please don’t make the same mistakes. You are making decisions in your business everyday and the quality of those decisions are a direct impact of the information you use.

Stop winging it, stop wasting time, and start spending more time getting to know your customers/industry.

How Improve Your Project Management Skills

Whether you are starting a business, working in a start-up business or have been in business for a while I can guarantee, with almost complete certainty, that you have dipped your hands in the murky waters of project management.

I know this because when you break down all the moving pieces and guts of almost any business, what you’re left with is a string of projects. Some successful, some not so successful and every one of them a potential cornucopia of interesting data about your business.

It’s in the data and outcomes from your projects that you will be able to make the important decisions that guide your business through the ebbs and flows of your market. When you don’t manage projects well you run the risk of wasting lots of time, money and energy on things that will never add value to your business or your customers.

That makes for a bad time.

Managing projects can be tricky business. What’s important to measure? What’s not? How are you tracking progress? Who’s accountable for what? Etc. Another part of that trickiness is the fact that there is an industry full of project management support businesses trying to get your attention. These businesses attempt to lure you to spend money on software, training and consulting that promises to fix all of your business woes - and even helps you come to terms with business woes you didn’t even know you had.

What are you, a busy entrepreneur trying to grow a business, supposed to do?

I have a simple framework to help you keep your well intentioned projects on task and on budget.

Before that though I want to share a quick caveat: I don’t think that there is one perfect tool or solution for everyone. I do think that if you look hard enough you should be able to find the tool that best supports the sizes and scopes of your projects. I also believe that the tool you adopt should be creating efficiencies and using your project data to tell stories that you can use to make solid decisions in your business. But, if you needed to start somewhere I highly recommend the Disruptive Decision Framework - this hyperlink will take you to a blog post on this site where you can get your free copy and tells you how to use it. 

1. Is this project really important?

The first step is buy in. Is the proposed project on deck really going to move some needle in your business in any kind of meaningful way? That goes for the good and bad possible outcomes. Has everyone involved reached some kind of consensus on the project’s importance? What (in as quantitative and as measurable criteria as possible) does success look like? If you are a solopreneur talk to someone you trust about what you’re thinking about exploring. Talk to two people. The worst thing you can do as a solo entrepreneur is start down a closed-system project rabbit hole. I’ve seen good businesses and entrepreneurs burn out because they dumped too many resources into a project that wasn’t really important.

2. Outline the project.

In this step you are outlining and identifying all the important milestones you need to hit to get to some kind of outcome. You are also thinking about all the people and resources you’re going to need to support the project as well. Knowing that very few things in life follow any kind of strict schedule it’s important to build in some flex room as you are attempting to get a handle on what the time frames are going to look like as you approach and pass through each of those milestones. It’s also here that you’ll identify the formal scope of the project (what are you hoping to acheive), roles and responsibilities of the people involved at each phase (this counts for you too solopreneur), what information you are going to track and why.

3. Get it on the books.

There’s a good chance that this project is not going to be the only thing your business is working on at any given time. Armed with the knowledge that things don’t always go as planned do your best to schedule your projects in terms of the milestones that need to be completed. This is important because as time passes you’ll be able to balance the demands of your day to day operations with the scope and goals of your project. After it’s on the books go back and work out your outlines for a work plan. It’s great that you gave yourself 3 days to get from one milestone to the next but what are the crystal clear action steps needed to honor that timeline commitment. Vague timelines might be acceptable here but vague workplans are not. Spend time really getting into the nitty gritty of what needs to get done. Whether you have a team or not - getting specific and granular is your best bet at actually getting this work done.

4. Create guiding policies.

Before you start working on your project you need to set up the policies that will be used to manage the project. It’s not redundant I swear. These are the things that help you manage issues in your team, expectations, accountability, quality and so on. Picture the guiding policies for your project as the rules of Monopoly. You know, Monopoly - the game that breaks up families and friendships. That Monopoly. Your guiding policies act as an independent and impartial judge for the times when playing by house rules gets a little out of hand. As the work in your project ramps up managing people's, expectations, responsibilities and the rest of your business could get potentially dicey. Guiding policies act as a way to navigate challenges because you decided them before you started. They can also help to keep you honest if motivation starts to wane as a solopreneur. And, just like any good game of Monopoly you can literally decide to abort a project by flipping the game board over in a fit of power hungry plastic house rage should the need arise.

5. Work, Observe, Record, Evaluate, Repeat (Maybe)

This is where the project rubber meets the road. You are all planned and scheduled up now get to work. As you are making your way through your milestones make sure you stop to celebrate little victories or assess the little challenges along the way. Because you did such a great job with identifying all the quantitative, measurable and trackable data throughout the project you’ll be able to see in real time how the work you are doing impacts your business. You’ll also be able to make decisions about adapting or pivoting your business as the market changes around you. Probably one of the most important parts of this step is being able to recognize when you should just pull the plug on a project. There’s no shame in quitting here - you still learned something that will help better shape your business and by quitting you’ve salvaged any remaining time, money and sanity you may have lost by following through. Individual outcomes might be good or bad but if you’ve designed an experiment or project well you can only get good information from the experience.

6. Deliver and Evaluate

Congratulations! Regardless of the outcome you’ve finished. That means you are hopefully delivering what you said you were going to in a time that closely resembles what you originally quoted. During the process you laughed, cried and communicated lots. After you’ve celebrated your completion it’s time to tear through the data of the project. What parts of your work plan were successful? What weren’t? Where were the bottlenecks? What could you tweak? Was all this work really worth it? Giving your project a proper post-mortem will provide you with insight that will help you get the most out of your next projects. Don’t be afraid of failing or of fallen flat deliverables. You can always tweak your processes and frameworks. Be afraid of putting yourself through the trouble of launching a project with vague ideas, no accountability and no clear way to identify success.

Whatever system you choose to help you manage your next project should touch on these 6 steps. If they don’t then you are missing something. There are tons of resources at lots of different price points but the most important thing to remember is that any of the project management tools are only as good as the information you are feeding them and the commitment you give them. Sounds cliche I know but I can share first hand that I have worked with businesses that have dumped ridiculous amounts of money in project management software that they never used.

Being a tool hoarder is not going to help you do better work in you business.

Why Outcomes Matter In Your Business

There is too much focus on idea generation and idea management and not enough time given to trying things out and actually testing to see if an idea is worth iterating on. (Listen to Gary Vaynerchuk, he'll tell you that being an operator is everything!)  Every article and post I’ve seen lately seems to elude that the only way to find success through innovation is coming up with the next newest, brightest, sexiest, or most cost effective idea.

What?!

What happened to the iterative process?

The real iterative process. Not some watered down entrepreneur-light version that gets talked about in conversations between wantrepreneurs. 

What happened to going out and talking to your customers or potential market to figure out what they wanted? Then taking it a step further and seeing if they'd put their debit/credit card on the line for it. 

What happened to doing the work to test whether an idea had merit or could be adapted to succeed?

What happened to making real and action oriented decisions? 

In order to address those questions entrepreneurs have to first learn (re-learn) how to think about outcomes.

The funnest part about what I do is that I am always getting the opportunity to help entrepreneurs and even politicians understand that strategy is not just about a plan of action or a set of goals you might be working towards. It’s about creating systems to make good choices and to clearly evaluate possible outcomes for those choices. Thinking about as many possible OUTCOMES is such a big part of strategy!

I need you to think back to your high school or college economics classes. You may vaguely remember hearing about oligopolies as a particular kind of way a market might organize itself. It’s not a board game and I’m not going to give you a pop quiz about that particular market structure but what I do want you to try to remember are the concepts around Game Theory.

With me?

Even if you have no idea what I’m talking about I promise it will make sense in a second.

The neat thing about this simple “game” you played in your economics class or that you’ll see in the Game Theory Wikipedia entry is that all the possible outcomes were laid out in front of you. As either a player in that game or as an objective observer of the game, think Dungeon Master if you’re a D&D fan, you were able to always make the choices that were not only best for you but wouldn’t leave you making a decision that could get you into trouble. That’s dominating strategies vs. dominated strategies.

No one wants to be told that they are a bad decision maker but if you are constantly pushing yourself or your team to come up with new ideas you might be falling into bad idea territory. Before you make a commitment to allocate time and resources to idea generation you should evaluate the ideas or business choices that are already on the table. Are you measuring them effectively and can you make marginal changes to increase performance or get to however you are measuring success? Best of all you should be thinking about the outcomes of your ideas or choices.

You’re probably thinking at this point - ok that sounds good but what outcomes should I be looking for? The outcomes you are concerned with are the responses you could anticipate to your choices by your competitors and customers.

How might your customers respond to you offering a discounted version of your service?

Would they still perceive it as valuable?

What about your closest competitor? Would they try to undercut your new discounted pricing to try to stem market share?

Answers to those questions are outcomes. The better you get at trying to anticipate how people and businesses might react to the choices you make with your business the better prepared you will be and ultimately you put yourself in a position to be more profitable. You won’t have to waste time scrambling for the next idea or worry about losing customers because you will have responses and resources allocated/planned for the fallout (good and bad) of any choice that you make.

That’s strategy!

It came from iterating and evaluating not just rushing some new idea to market.

It's Time To Start Paying Attention To Cash Flow

Odds are you probably have seen a business plan at least once in your life. It could have been a well detailed spiral bound behemoth of a document or even scribblings on a napkin at the bar. (The scribblings are definitely my favorite!) The funny thing is about business ideas is that everyone has the capacity for great ones - I can think of at least three conversations in the last 24 hours that started, “You know what we should do next..”. The problem isn’t the visualization or the concept (OK, maybe that’s the problems sometimes.) it’s the detachment people have from the reality of the financials.

Also taking real action but, for the sake of this post, let’s stick to the gross underestimation of the need for and management of resources in a business. Being an entrepreneur can be an expensive endeavor and that goes for spending money or if you don’t have money spending time which by virtue of opportunity cost can also be measured with money.

Relatively speaking, money is not hard to come by these days. Credit is easier to get and there are amazing resources like Indiegogo, Kiva and Kickstarter to help get your project off the ground. Heck, you can even start a GoFundMe campaign if you want. The problem is that would-be entrepreneurs don’t understand how cash flow works and that it can get kind of expensive to take that napkin from the bar to a full blown business.

For the record, I really do understand that with very little liquidity, some time, and some great use of web resources you can launch a venture with a small budget.

But what next?

How do you plan to use the resources that are coming in the door to keep building your business?  <<Cough Cough>> Remember, making deliberate choices is the heart of strategy...<<Cough Cough>>

Here are a few tips to get you thinking about your cash flows even before you really have them.

1. Get real about your expenses.

When you are small and your funds are commingled it’s easy to rationalize a monthly fee, some office supplies, a subscription, and maybe even rent in a co-working space without classifying them as proper business expenses. You are never too small to take your business idea seriously. Start tracking from the outset and you will be able to make more realistic assessments of the business and be able to allocate future resources that much better.

2. In the same vein as tracking your expenses you should be staying in line with GAAP - Generally Accepted Accounting Principals.

You don’t have to be a CPA to crunch your own numbers but you should have an idea around how and where your figures are coming from. That makes your tax preparers job easier - especially if that’s you. It also makes it easier for you to compare what you are doing to your competitors. If you are just making up accounting metrics and accounting systems on the fly it will compromise the integrity of your financial information. Figure out how your industry tracks their numbers and try to emulate that. It might not always be a perfect fit but you’ll be able to tell how you are doing against your market.

3. Have a collections policy.

Sending out an invoice is great. Getting paid 180 days later is not so great. An economist could argue that people are profit maximizing little automatons and I would say that works for businesses too. Not just in maximizing what we traditionally think as profit but also conditions, environments, and choices that make sticking around easier. What all that means is that you are going to hear excuses as to why people can’t or don’t pay. You may not be able to avoid the headaches that come with being paid on time but with a well thought out and incentivised invoicing strategy. Think “2% net 30” kind of stuff. This will help keep your cash flows relatively predictable so that you can plan around them, in good times and bad.

These three tips are not your conventional cash flow kind of tips. I know. But they are important factors to consider for your business. You can have all the spreadsheets and calculations you like but if it’s not quality information, if you aren’t collecting anything, and if you aren’t realistic about what’s going out the door then you won’t be in business long.

How To Disrupt And Innovate Right Now

Today I want to channel my inner Seth Godin.

(Short posts that generate reflection and inspire action.)  

I want to challenge you to disrupt and or to innovate right now. Wherever you are, in whatever role you serve in your business and in whatever project you are working on as you’re reading this.  

Disruption is not a strategy. It’s is about simplification. Look at your business. Are there any parts of your customers experience that you can simplify or streamline? Is the value you offer simple by design so that your customers know exactly the pain you solve? Can anyone (I mean anyone) understand your pitch? Where can you attack a problem non-conventionally or even contrarily so that your business stands out against your competitors a little more?

Innovation is about efficiency. What can you do that will save your business time, money, emotional energy or even just keep your audience engaged. Innovation happens when you can generate ideas quickly, then test and experiment ideas and finally decide what’s important to your business. Where can you add value without adding costs?

Disruption and innovation don’t have to always happen on a large scale. It’s also not only for technology companies our of Silicon Valley. I challenge you to look at your systems and try to find small changes you can make today that will push you business forward, in whatever way you measure your progress.

Focus On Outcomes To Get More Out Of Ideas

There is too much focus on idea generation and idea management and not enough time given to trying things out and actually testing to see if an idea is worth iterating on. Every article and post I’ve seen lately seems to elude that the only way to find success through innovation is coming up with the next newest, brightest, sexiest, or most cost effective idea.

What?!

What happened to the iterative process?

What happened to going out and talking to your customers or potential market to figure out what they wanted?

What happened to doing the work to test whether an idea had merit or could be adapted to succeed?

In order to address those questions entrepreneurs have to first learn (re-learn) how to think about outcomes.

The funnest part about what I do is that I am always getting the opportunity to help entrepreneurs and even politicians understand that strategy is not just about a plan of action or a set of goals you might be working towards. It’s about creating systems to make good choices and to clearly evaluate possible outcomes for those choices. Thinking about as many possible OUTCOMES is such a big part of strategy!

I need you to think back to your high school or college economics classes. You may vaguely remember hearing about oligopolies as a particular kind of way a market might organize itself. It’s not a board game and I’m not going to give you a pop quiz about that particular market structure but what I do want you to try to remember are the concepts around Game Theory.

With me?

Even if you have no idea what I’m talking about I promise it will make sense in a second.

The neat thing about this simple “game” you played in your economics class or that you’ll see in the Game Theory Wikipedia entry is that all the possible outcomes were laid out in front of you. As either a player in that game or as an objective observer of the game, think Dungeon Master if you’re a D&D fan, you were able to always make the choices that were not only best for you but wouldn’t leave you making a decision that could get you into trouble. That’s dominating strategies vs. dominated strategies.

No one wants to be told that they are a bad decision maker but if you are constantly pushing yourself or your team to come up with new ideas you might be falling into bad idea territory. Before you make a commitment to allocate time and resources to idea generation you should evaluate the ideas or business choices that are already on the table. Are you measuring them effectively and can you make marginal changes to increase performance or get to however you are measuring success? Best of all you should be thinking about the outcomes of your ideas or choices.

You’re probably thinking at this point - ok that sounds good but what outcomes should I be looking for? The outcomes you are concerned with are the responses you could anticipate to your choices by your competitors and customers.

How might your customers respond to you offering a discounted version of your service?

Would they still perceive it as valuable?

What about your closest competitor? Would they try to undercut your new discounted pricing to try to stem market share?

Answers to those questions are outcomes. The better you get at trying to anticipate how people and businesses might react to the choices you make with your business the better prepared you will be and ultimately you put yourself in a position to be more profitable. You won’t have to waste time scrambling for the next idea or worry about losing customers because you will have responses and resources allocated/planned for the fallout (good and bad) of any choice that you make.

That’s strategy!

It came from iterating and evaluating not just rushing some new idea to market.

This Is How You Use Failure To Your Advantage

Right off the bat - strategy is important! It doesn’t matter if you are a carpenter working 50 hours a week on the job or running an online eBay business from your kitchen table. It’s strategy that will keep you making great and consistent choices that will move your business forward. It makes my heart sad when I hear business owners say they are too busy to come up with strategy or that having a strategy doesn’t fit for their kind of business.

Wrong!

As a business owner you make choices everyday and having a way to measure the success and appropriateness of those choices only helps to add value and to keep your pipeline full. It’s not always nice and neat though and sometimes you’ll fail, epically. Here’s what to think about when you find yourself in an epic business fail and how to pull yourself through it.

It all starts with developing strategy.

Developing strategy and then implementation can get messy. Trying to communicate goals to each level of the organization so that every player understands how their input directly affects how your business will reach its goals can get messy. Gathering and analyzing data can get messy. In all that messiness comes failure every once and awhile - contrary to the superhero in all of us, every set of strategic choices that come out of our brains are not home runs.

Messy and failure are not bad things though. In fact you can learn a whole lot about your business and your strategy through failure. Here are a few ways you can embrace your messy processes and occasional failures to keep your business running lean and adapting to your markets as tastes and expectations change around you.

Remember that this stuff applies even if you are a solopreneur or a hobby business.

1. Reframe your capabilities and learning curves.

Entering new markets and offering new services can give you access to a segment that might be untapped by your competition. Figuring out the scale or scope that you can serve that segment takes a failure or two before you get it right. Think about how quickly you can acclimate and focus in on how you are adding value to that market segment. It’s ok to venture out into new markets and figure out that it’s not a good fit. Realize where you can extend your capabilities and start from there.

2. Talk to your customers or non-customers.

If you tried something new and it didn’t work out go ask why! Yes, you still have to do this even if no one bought. You can have the best plans and projections in the world but you won’t know how to grow until you get feedback from your market. Maybe you misjudged your audience or made an assumption that wasn’t true. That’s ok, this gives you the opportunity to reach out and iterate. If you had customers that bought and weren’t happy this is a chance to serve them so hard that they become raving advocates. They get to raving because you are showing that audience that you can dig deep and deliver on what really pains them.

3. Failure makes you think about the process.

Maybe it’s not your strategy but how you implemented it. Failure is great because you have concrete data to work with. You made a choice and it either worked or it didn’t - now it’s time to find out why. All too often I see business throw away perfectly good strategies because they tried it for a little while and nothing happened. Really they should have been looking at the specific actions they were taking to reach those goals. If you burnt the last batch of chocolate chip cookies you baked would you swear off those delicious treats entirely after that one experience or would you look back and think about your steps. Maybe you realize that you had the oven set too high and fix that part of the process. You wouldn’t stop eating those cookies and you shouldn’t just stop thinking about improving your strategy.

I could keep going but I want to keep this post simple. Think about failure in three ways: where you failed, who you failed and why you failed. From there you can ask all kinds of great questions that don’t involve relegating strategy talk to the “would be nice” conversation topics. Strategy is important especially because entrepreneurs are some of the most prolific rationalizers that exist on the planet. It’s strategy that keeps your choices consistent, your resources allocated efficiently and your brand growing.

Now, I’m off to find some chocolate chip cookies. I mean work on my strategy. I mean, I need a glass of milk.

Build A More Compelling Value Proposition

What’s your business’ value proposition? Is it to be the “best” at something? Is it to serve your customers better than your competitors? Is it my favorite value proposition faux-pas, just an explanation of what you do that’s full of 3-Dollar business words like: maximum impact, advisory services, creating synergy, problem-solving, solution ideation, increasing efficiency and allocating resources efficiently?

Awful.

Value propositions are supposed to appeal to the people that you are trying to serve that reaches them at their core. If your value proposition is good enough it will make it through all the noise and advertisements that your customers are bombarded with daily and sit right at the top of the feel good parts of their brain. That’s what a good value proposition does.

A value proposition is not just your mission (missions are super important for strategy to work though). It’s not a catchy tag-line. Well I mean, bad value propositions are. Bad value propositions talk about capabilities, features, and generic accolades.

When you use jargon and fuzzy words to convey your values (or just what you do) you are making it hard for your customers to engage with you. You aren’t pushing the buttons hard enough to move your customers in either a rational or an irrational way. Borrowing some concepts from the economics courses I teach; when you don’t do a good job of aligning what you offer with the tastes and expectations of your customers, you are making yourself substitutable.

Ahhh price elasticity of demand, you are a heartless but fair judge.

Customers are always measuring the value of something against the dollars they have to trade for that something. A good value proposition lets your customers know that they are getting their money’s worth. The real question behind a great value proposition is - How do you communicate the real benefits of what you do and why someone should do business with you?

A good starting point to framing your value proposition is to make a choice. You are choosing to either operate at the lowest possible cost or sell something for more. Sounds simple and probably a little cliche but there are some caveats here that most people don’t think about.

Let’s start with selling for more. When you charge a higher price you are communicating to your customers that you are offering a higher quality product. Your solution is more expensive because it solves your problem better than your competitors. The value you are providing when you are selling for more has to be measurable and meaningful to people. These are two traps you need to avoid to successfully charge higher prices:

1. Meaningless Differentiation.

You are charging a higher price for a reason right?! You need to do your best to make sure it’s a reason that matters to your customers. Seriously, charging a higher price because of some input that your customers don’t really care about or that doesn’t really affect them is not a good way to differentiate. It has to be customer focused!

2. Unsustainable Differentiation.

You have to do your best keep what makes you special for as long as possible. If people are working with you because they like what you are doing, your goal is to grow those connections as wide and as deep as you can. If your competitors start to imitate what you do you’ll risk losing your customer base to lower prices. When they buy from you make sure YOU are part of that value.

On to low cost. Competing for low cost producer is not my favorite way to build a business but in some models it works great. The value you are communicating to your customers here is that they get to have everything they want and keep more money in their pockets. Easiest example to think about is Wal-Mart. To have a successful value proposition in this space the value you communicate has to be extremely specific. There are some traps here too to watch out for as well:

1. Maintaining your lowest cost status.

As a small business or an entrepreneur there’s a lot of pressure to innovate. The problem is that lowest cost producer is a title that’s really hard to keep. Don’t fall into the trap of offering low prices with hopes of that you’ll steal market share away from your competitors and keep them. When you raise your prices, customers who are seeking for low cost will move on to the next lowest price points.

2. Substitutes.

When you enter the low cost/low price game you’re dealing with customers that are looking for the most bang for their buck. Think personal finance tracking apps for smartphones and tablets. There is a lot of competition and a lot of very close substitutes. It can be really challenging to communicate with customers about the value of what you offer when you are trying to scream over everyone else in your marketplace.

As you can see there’s no guarantee of success when it comes to choosing selling at higher prices or trying to compete as a low cost producer. Success comes from the heart of your value proposition. Your value proposition has to resonate with people so that they feel like buying from you matters, be different enough to stand out among your competitors and provide measurable substance.

When you are building your copy talk to people like people. 

Don't Get Stuck In Strategy Sensory Overload

Henry Mintzberg is a man after my own heart. Too bad you, dear business builder, have probably never heard of him...yet. Emergent strategy is going to be the approach that makes sense for the agile, lean and <insert another word for business flexible> models.

You’re welcome.

Writing about strategy has been awesome for me. It’s forced me to really funnel through all the academic and corporate strategy hype so that I can bring you the most distilled and actionable pieces of strategy goodness. Recently I stumbled upon what is my new favorite definition of what strategy is - “the integrated set of choices that positions the business in its industry to generate superior financial returns over the long run”.

Integrated set of choices. It’s brilliant!

In this definition you don’t see the words: plan, technology, social media, or marketing. What we are talking about is getting to the heart of how you will decide to run your business. This post is dedicated to anyone wanting to up their strategy game and are paralyzed with conceptual strategy sensory overload. Here is your 3 part strategy jumpstart.

In thinking about your integrated set of choices you should be framing them (at least at the start) into one of two camps.  Are you going to differentiate or attempt to be the low cost provider?

I am drastically oversimplifying but if you are wondering what your first steps should be when trying to build a new strategy I would recommend the following 3 steps.

1. Work out your business model.

Business models can change over time and when most people think they are talking about strategic planning, they are really talking about outlining their business model. The what’s and how’s of their business. Flushing out your business model will give you a better idea of what the entire process might look like for the customer or client experience. This is how you will make money. Once you settle on something don’t worry about tinkering with trying to get a few extra fractions of percentage points in profit out of it. Odds are it will probably be changing over time. Leave it alone, start doing the work you outlined and start collecting outcomes.

2. Pick! It’s really hard to be the low cost innovator in any industry or business.

How you get to the golden “disruption” is by experimenting and iterating with your customers. I’m not saying it’s impossible to fly out of the gate and be the instant lowest cost and most needed differentiation in the market - I’m just saying you might get a better return on your immediate investments by picking one and working at it for a little while. I’ve seen many guru’s and self-titled experts misguide clients with hopes of finding the holy grail of competitive advantages that will place them leaps ahead of their competition. That’s not how it works. You need to pick first and then start doing the work to best serve who you think your best customers are right now while doing the best you can to understand the drivers and motivations of your market - especially your competitors because they are going to be the ones reacting to you!

3. Work on systematically making choices that support your pick from number

Any time a decision has to be made you need to be able to objectively qualify it as either supporting your overall strategy or not. If it doesn’t, is there a way to tweak it so that some part of it still might. This is where the fun stuff happens. It’s all in the rationalization. What I mean by systematically making choices is to constantly be evaluating how your are conducting business.

Here’s an example: As part of a service offering you provide paper copies of all your materials. You could go to Staples and keep buying paper because it’s closer, convenient, and instant. Because of that convenience you are probably not getting that paper as cheaply as you might be able to if you worked on creating a relationship with a wholesale or office supply dealer. Now, if you are competing for low cost you might want that mass distribution discount rate but if you are differentiating and Staples offers a very specific, specialized paper then you will have to translate some of that cost over to the end consumer.

This is the decision part. Are you the low cost provider or are you trying to differentiate?

Situations like this happen every day and it’s important to make choices consistently - yes even the smallest ones. This is how real strategies gain momentum, by adjusting behavior and monitoring outcomes. Yes there are bigger frameworks like Porter, Blue Ocean, and Resource Based View that you could be considering. You absolutely should but, don’t get bogged down in the learning and understanding that you never put those frameworks into practice.

Take the first steps and make a few choices now and hold yourself to them. Then iterate as you go!

There Is No Such Thing As Sustainble Competitive Advantage

There’s no such thing as sustainable competitive advantage. If anyone tries to sell you that as part of their “consulting package”, you can tell them to knock it off. Differentiation tends to lose its edge over time. 

Competitive advantage by its very definition is a fleeting notion - it’s something you are always going to have to work towards.

The reason?

It’s because people’s tastes, expectations, values change over time. In your business you have to constantly be working towards satisfying the needs of your clients and customers to be successful. No secret there. At the same time though you have to be thinking about ways to continue to create that awesome value while keeping your own overhead and expenses as lean as possible. Again, no soul shattering revelations.

Growing a successful business means you are taking specific actions to deliver specific value. Figuring out or planning for your competitive advantage will in no way, shape, or form guarantee your business’ success.

This post isn’t about finding competitive advantage. It’s about figuring out how to create consistent value for your customers and clients once you recognize it. It’s about creating a repeatable business model.

The quickest way to get your business to grow is to create repeatable systems that will deliver the most value you can and make sure you can do it over and over again.

You’re looking for your “Big Mac”. Seriously. Anywhere in the US you can walk into a McDonald’s, order a “Big Mac” and have your expectations on that product/experience be met. Why? Because McDonald’s makes it the exact same way every time.

You want that! Innovation and disruption are great and absolutely have a place in your business. (It’s even in my business’ name.) But in order to grow your business and to give yourself the room you need to actually test out ideas, products or services you need to record lots and lots of tries. How can you know which changes helped to grow your business when you changed lots of stuff at the same time. Better still, you are changing something on a weekly basis.

I love the Lean Startup model but there is a piece of it I don’t really agree with. The potential customer interviews. Asking people what they want and discovering what they really want are two very different things. You won’t know what people do or don’t want until you ask them to put their debit/credit card information on the line. Here’s how you can work on creating a repeatable business model.

The best advice I can give, in terms of a repeatable business model, is the same advice I give to my clients looking to iterate, pivot or adapt their business. It’s actually a set of questions I want you to give some honest thought to:

1. Do you have a system that tracks the entire customer cycle?

2. Are you using that system every single time you in front of a customer?

3. How big is your market and how many times have you used that system?

4. Are you solving a relevant and specific problem? (Benefits (NOT features) > Costs)

5. Is your value being clearly communicated?

6. Are you changing one thing at a time?

7. How are you measuring success at each stage of your system?

8. Are you following up and asking “why” with your customers after they buy and even when they don’t?

If you don’t have clearly defined and measured answers to any of these questions don’t innovate, disrupt, adapt, or pivot.

You need more data!

Figure out what a fair amount of tries are and work from there. Changing your website every day because your products didn’t sell that day is probably not a fair amount of time to test your copy. Before you go changing everything start trying to isolate possible weak spots in your system and change one major variable at a time. This is how you test your market to see if what you’ve changed resonates better and creates more engagement.

Don’t rush to innovate or pivot. It’s time, money, and emotional energy that you can’t get back and that you probably won’t take the time to measure. Instead focus on the boring - the system. With enough tries you’ll start to see patterns in your business. Patterns with variables you can start to manipulate with intention. That’s the secret to getting the best return on your business.

It also helps to keep you from going crazy. Which, I guess is a good thing too.

How do you handle the impulse to constantly innovate, adapt, pivot, or disrupt? Is there a method to your madness? I’d love to see your system in the comments below.

How To Get The Most Out Of Your Next SWOT Analysis

I am throwing the gauntlet down on SWOTs. I'm tired of people telling me their organization/team/business did one and it wasn't useful. I'm so amped up about this topic that I'm not even including a call to action in this blog. Well besides me trying to show you how to do a SWOT better and how to make it be actually useful for your business decisions and strategy. 

No shame in my game. This image came straight from the Wikipedia entry on SWOT. The content that follows most certainly did not. 

There are lots of tools to help you through your strategic thinking and planning process. So many it’s hard to choose sometimes - really hard. This post is dedicated to using one of those tools well, the SWOT Analysis.

I know.

I can feel it.

I’m already losing you and this is only sentence six.

Hear me out though. You need to ask yourself, have you ever really SWOT? (For my internet friends, "Do you even SWOT bro?") If you do it well a SWOT has the power to bring people together, save your company time and help you get the most bang out of whatever your budget looks like - including a low/no budget operation.

A strategic tool is only as good as the information and the intention that goes into it. A lot of business owners stick their noses up at the idea of going through the process of a SWOT. They think that a SWOT is too rudimentary or not powerful enough to handle the complexities of their business. I blame MBA's (who I have much love for and have been a professor to) and business gurus too for ruining this tool. 

I vehemently disagree that the SWOT analysis is too simplistic. I think it's perfectly simplistic and more often than not, business owners make things too complicated for their own good. 

That's not you of course. 

I think the SWOT is a great tool for organizing ideas, identifying your business model (you’d be surprised to see how many business think they are in one kind of business but in reality are in a totally different industry) flushing out themes and core competencies, and even helping to identify your competitive advantage.

The goal of the SWOT is to get information out in the open so that you can make decisions. The SWOT will not make decisions for you. This is so important you have to read it again. The SWOT will not make decisions for you. It’s not a decision making tool (that link takes you to a really great and free decision making tool) and I’m not thrilled about some people using it as an “icebreaker” for strategy talks. Let’s give Albert Humphrey and his SWOT the respect they deserve!

SWOT stands for Strengths, Weaknesses, Opportunities and Threats. The S and W should be internal questions - the things that are happening in your business. The O and T should be external questions - what’s happening around your business. You’ll see a SWOT in lots of shapes and formats but that’s just working space. Your SWOT can be a list or a matrix. What matters is the intention and content.

Let’s start with Strengths.

When you are thinking about your strengths it’s important to think about why your customers buy from you. If you can get to your customer’s why you’ll be able to communicate with them more effectively and consistently deliver awesome value. Here are some other questions you should be thinking about in terms of your strengths.

What’s your unique value or unique selling proposition.

Are you doing anything that your competitors can’t reproduce - like your level of customer service.

Are you a low-cost producer?

How do you differentiate?

Are you creating barriers to entry to insulate yourself from future competition in any unique way?

Do your customers say that you do anything really well?

Next are your Weaknesses.

Don’t approach this like you would if you were answering an interview question for a potential dream job. No fluff here! You need think about how you’re delivering value to your customers or clients. There are always parts of the business that can get more efficient or capabilities/capacities you can improve. In terms of creating a meaningful strategy the more honest and raw you can be about your business, processes and systems the better the decisions you will produce. Here are some questions you should answer honestly in terms of your business's Weaknesses:

Are there improvements that can be made to better compete with your strongest competitor?

Are there products/markets/services you should be avoiding?

Are you measuring success in any kind of definitive way? If you do, are there factors in your businesses that aren’t measuring up?

Are there parts of your business that lead to lost sales/revenue?

Is there waste and where is it coming from?

Are there core capabilities you should have that are keeping you from being more successful?

On to Opportunities.

Opportunities are new chances for your business to either continue to differentiate or to reinforce your competitive advantage. The goal being an increase in revenue or market share if an Opportunity is pursued. A great place to start looking for Opportunities is to glance back up at your Strengths and Weaknesses and start comparing what’s going on in your business to the businesses you compete with. Here are some questions to get you thinking about your Opportunities:

Are there new or interesting trends in your market?

Are your customers tastes or expectations changing?

Are there new technologies in your market?

Are your customers getting the most value out of the current set of solutions offered?

Are there new pains that customers are suffering from?

Sorry to use a word while it’s being defined but: Are there any opportunities to better serve your market that can be done only by you?

Last are the Threats.

Threats are external factors that could influence your business that you can’t control. They are negative factors that could impact your business alone and even your potential industry. Threats are factors that could have a negative impact on your business in terms of both decreasing revenue and operations interruption. Here are some questions to get you thinking about your potential Threats:

What external factors put your business at risk?

What obstacles does your business face?

How stable and predictable is your supply chain?

Are you protected from changes in technology?

Is your market changing? How?

How have your competitors reacted to decisions your business has made?

What does your current and potential competitive landscape look like?

After you’ve answered these questions and maybe even a few that weren’t listed you are probably asking yourself, now what? Well first thing is to go back through your SWOT and to try to frame everything you listed in terms of your competitors. Next is to try to make each component as specific and as clear as possible. Remember you are trying to use this information to create strategy and make decisions. Being clear and specific is important! Then make sure that everything here is as close to factual as possible and that it’s a reality now not a want or wish. Use dollar amounts, inventories, sales, time, and any other way you are quantifying your business activity. Lastly is to make sure that everything in your SWOT is as action oriented as possible - action words are your friends here.

After you’ve brainstormed your SWOT and have gone back through and polished it up you can start to use what this information. This is the information you should be using when you are starting to create short-term and long-term strategic plans/actions to grow your business. The purpose of the SWOT was to get you laser focused on the most critical parts of your business.

Now that you’re focused you can make better decisions in your business. Start by going through and trying to prioritize your most pressing opportunities. Decide which opportunities you are going to engage and set the goals and actions in place to start the allocation of resources and work to achieve those goals. Measure everything! Go back through your strengths and try to rate them. This will give you an idea of how to better differentiate and position your business to strengthen your unique selling/value proposition. Take a look at your weaknesses and really try to create systems to improve them. You’re supposed to use this SWOT as a springboard.

The worst thing you can do is nothing after you complete the SWOT! 

So the next time this comes up in your business or in your profession, I want you to calmly pull up this blog post and drop the SWOT gauntlet down in your group. You'll be a strategy hero. 

Why You Should Care About The Market And Strategic Aspirations

The market decides what it wants. It decides how good you are and at what price consumers/clients/buyers are willing to pay for you. That means you need to get really clear and articulate about the value you’re bringing to the market. Big fluffy mission statements that try to reach everyone are just an exercise for boards and executive teams that makes them feel good about themselves that day.

No joke, a mission statement doesn’t cut it any more. Having your vision statement or your core beliefs taped up in a common space or over your computer monitor will only marginally motivate you and your stakeholders. In order to get the commitment and the engagement from yourself and your customers or audience, you need to be able to deliver value and communicate that value in a universally understood language. In other words you have to let your value show everyone in the market that you are worth paying attention to. Once you get clear about that it’s at the crossroads of value and meaningful communication where you will find strategic aspirations.

There has been a lot of buzz around the word “aspiration” lately. I hear it in the business audiobooks I listen too, the blogs I read and all over the Harvard Business Review site. Large businesses use aspirations to paint a picture of what the world will look like in the future when every consumer utilizes their product or service. If you’re struggling for an example to visualize, I will happily oblige by offering you the imagery of the “Buy ‘n’ Large” mega-corporation from Disney’s Wall-E. Talk about the future of consumerism... But what does it mean to the independent entrepreneur who is out there everyday hustling to find success?

You aren’t “Buy ‘n’ Large” and this isn’t a Disney Movie.

Your strategic aspiration is your conceptualized view of what success looks like. It’s the scenario you play in your head of what your business looks like when it’s firing on all cylinders. That means you delivering your most valuable work to the people or businesses that need it most. That also means that you have to work everyday at clarifying what your aspirations are - especially because they can change and that’s ok!

Strategic aspirations are not daydreaming and well wishing. They are not empty intentions. Your aspirations are the foundations of the strategic choices you make going forward and will guide your allocation of resources. As an entrepreneur you are constantly making choices and are constantly battling resource constraints. Often your aspirations will help you make the best possible choices by default (with a little practice that is). Getting crystal clear in your aspirations will help you evaluate your choice outcomes and navigate them in a way that produces outcomes that will move you closer to realizing your aspirations.

The neat thing about strategic aspirations is that you don’t need a gimmick to remember them. Because you put in the work to figure out what success looks like, feels like, and even smells like your aspirations should be resonating with you to your core.

As an entrepreneur or a professional with entrepreneurial tendencies, life is a constant balancing act. Aspirations provide the framework for how your business will behave and a systematic way of checking in with yourself. At this point if you like your taped document or stick notes above your computer you can put them back up. Only if you are really clear about what success looks like. When you do the work and get to the core of clearly identifying success for your business you can start to deconstruct it into steps you can take daily to get there.

After I get clear on my aspirations what happens?

I have a very simplified set of tips or tactics that you can implement right now. Not overly complicated and not overly difficult.

Decide What Matters: Figure out how you are going to measure success. Here, the fewer the metrics the better.
Everyday Action: Figure out what you have to do daily to get you to your aspirations.

Week/Monthly Action: Work in time to evaluate how your weeks/months are going based on what you’ve done and what you decided matters.

Quarterly/Annually Action: These are the things that have to happen for your business to grow as you want it. Your individual daily actions might not necessarily provide the direct outcomes needed to get here but they should be building to these goals or plan.

That’s it. The hardest part is not the planning, especially because that can change. The hardest part is deciding what’s important and then doing the WORK! So figure out what you can do daily to help push your aspirations forward and take some kind of action today!

How To Create Better Strategy By Going Simple

Being “disruptive” at it’s core is about simplification. Getting to outcomes or results more simply by better using the resources you have around you, by creating more efficient processes or a little bit of both. Disruption is all the rage these days in startups all over the world. There are books dedicated to teaching you to innovate in disruptive ways and conferences that pull entrepreneurs and programmers together to celebrate and showcase how markets are disruptively evolving. There are companies pitching for investor dollars everyday because they’ve thought up tricky ways to deliver value to customers in markets that have been stagnant for decades - think Uber.

You’re not Uber though (yet). So why should you care about disruption?

Thinking in terms of disruption is very good for running your business. The best part of thinking disruptively is that it doesn’t cost much and you don’t need a fancy set of tools to implement it well. In this blog post I outline three tips to help you get to simple so you can get more out of your strategy and your business.

Think simple for your next attempt at a strategy you want to try out. Running a business successfully means managing a lot of moving parts, there is no getting around that. Lots of running parts often leads people to think that there’s too much complexity to try to navigate around. I’m encouraging you to think about the parts of your business that you can simplify by a step or two. What are the processes you wake up and start in on everyday? At any time any one process might be a positive thing but look at what those singularly good processes are doing on the entire company. Are they slowing things down? Making it hard for information to flow or for decisions to get made? Besides trying to simplify how you do business, which could conceivably reduce your resource burn, how you position your brand and what you stand for also doesn’t have to be complicated. Think simplicity and act like 37Signals.

If you aren’t familiar with 37Signals (now officially just Basecamp) they are a firm that not only puts out amazing software but has published a few really rockstar entrepreneurship books. (One that I re-visit daily is ReWork.) What makes them simple lies in their product offerings: Basecamp, Highrise, and Campfire. Each of these SaaS product offerings are very specific and very simple in their functionality.  I want to highlight Basecamp in particular. It’s SaaS business that is built around one thing project management. If you go to their website today you’ll see that they are pivoting their model yet again. They are going all in on Basecamp. They are taking their already simple model and drilling down to get really good at one thing. Project Management.

37Signals is an awesome example of how a business can cause innovative disruption, continue to differentiate themselves, and succeed. ( I swear this isn't a plug, just really like their model.) This is also not the only thing I want you to take away from this post - I want you to walk away with some tips on simplifying your strategy and finding success.

1. Start with the why.

This one is a little introspective but seriously, why are you in business. The more honest you can be about what your business does, the better. Stop trying to do everything. I did that once and I burned myself and a few relationships out. No bueno. When you can craft a story behind the motivation of why you are in business it not only helps your stakeholder’s relate to what you’re doing but it helps to make decision making in the future just a little easier because you have a story compass to follow.

2. Boil down to what matters most in your business.

What are the most critical functions within your business. What needs to happen every time so that a customer is delivered an amazing experience. Focus on flushing those out and simplifying them as much as possible. There is so much bloat in even small companies these days because firms are trying to hard to be the all providing problem solving experience for the customer. That suffocates your “why” and your mission and makes it harder for your key processes to work efficiently.

3. Fight wanting to do more.

I don’t mean get lazy what I do mean is flex your “no” muscle. As the economy continues to recover and expand it will be tempting to want to reach out to new markets or offer up complimentary products or services. It will sound great and you might even produce data that would support chasing customers in a new segment but you should fight that urge. Instead focus on being the best you can be at a few core competencies, offer more value, innovate, and reduce costs. Work on serving your clients and customers the best way that you can. This will keep you from feeling overworked, spread too thin, and help to keep you from wasting resources. If Google can and did unload Motorola to Lenovo that has to create some kind of social proof right?!

Simplify doesn’t mean easy and it doesn’t mean lazy. It means serving very specifically and very intensely to a focused market. When you do that you create opportunities to differentiate in a way that makes it very hard for rivals or competitors to match because you cultivate a depth of understanding and relationships that someone just strolling into your market won’t find. There are a lot of programs that do way more than Basecamp and I’ve tried them - only to hate them and make my way back to a software that is easy to use, has awesome customer services, and always does what I expect it to do. Make your business do that in your industry and you will have no problem being as successful as someone like 37Signals.