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You want to revolutionize your business.

Say you bring in an outside "transformation" expert.

Having only a superficial view of your business, what does the outside consultant tell you?

  1. "Eliminate Products A, B, C, D, E!"
  2. "Replace them with Products V, W, X, Y, Z!"

Five months later, with a major drop in revenue, you're back to doing what worked well for you -- but still achieving those mediocre results.

Transformation programs usually fail because of this misconception:

  1. Revolutionary transformations rarely happen.
  2. Instead, what looks like revolutionary change on the outside is simply a case of piling up small wins on top of each other, everyday/week/month/quarter/year/yadda.

How Do You Pile Up Small Wins?

Play the "Defeat the Champion" game (a.k.a. A/B Testing).

Think of boxing and the WBA championship title belt; organizers consistently line up folks to see who can defeat the champion.

For instance:

  1. Winner of Title Match fights next top contender.
  2. Winner of that Title Match plays next top contender.
  3. Repeat ^2.

That is, you have a consistent stream of fights to try to defeat the champion.

Likewise, with your business:

  1. Determine what you want to improve (e.g., Sales Team).
  2. Determine your current champion (e.g., Salesperson Jenny).
  3. Play the "Defeat the Champion" Game (e.g., Jenny vs. X, to see who can sell more).

You can play the game with almost every aspect of your business in determining:

  • the best products to sell
  • the best sales procedures
  • the best clients to target
  • the best operational techniques
  • the best packaging designs
  • the best ways to recruit
  • etc., etc., etc.

That will give you a clearer perspective on how to divvy your resources, and keep your business ticking.

The moral:

  1. Don't eliminate things that already work (i.e., things that are profitable).
  2. Instead, try to produce things that work better (i.e., things that are more profitable).
  3. Hedge resources accordingly.

Move your business sustainably forward.

Defeat Champion.

Posted on February 12

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You know how businesses go out of business?

It's like this:

  1. Spend on junk that barely affects Customer Stewie's life.
  2. Spend some more on junk.
  3. Spend a tiny bit on customer value stuff.
  4. Spend even more on junk.
  5. Go out of business.

How do you avoid sucking?

Try this:

  1. List expenses.
  2. Then, rank your expenses by this measure: How much value does it provide your customer?

Rock your business accordingly.

  • The Suck Business: Let's buy mighty expensive chairs because we need to be comfortable!
  • The Good Business: Let's buy that industry report to help our clients further.

Ta-$!^@-da.

That is, expensive chairs might make you more comfortable; but if the:

  • customer value provided by comfortableness < customer value provided by report

...that means: spend more on the entity that drives more customer value (the report).

Quickest Way to Identify and Eliminate Waste

Two columns:

  1. Expenses ordered their dollar amounts.
  2. Expenses ordered by their customer value.

That will help you identify:

  • where you're wasting money
  • where you're underusing your resources

For instance, expensively-customer-value-sucking items:

  • high rent
  • expensive lamps, chairs, desks, tables, yaddas
  • brand new $2500 computers for every new employee
  • pricey polos for in-house employees
  • ridiculously-expensive printers for a print-unrelated company
  • $^@%^@%^@ $$$ paintings

Possible cheeeepy-customer-value-goodness?

  • email tips
  • intro phone calls
  • industry reports
  • ongoing training stuff
  • newsletters

The Quick Steps

  1. Understand precisely what can deliver value to your customer's lives.
  2. Rock accordingly.

Custom-value || Expenses.

Posted on February 10

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  • Smile. Johnny smiles back.
  • Laugh. Sally laughs back.
  • Look up at the sky. Dikembe looks up.

Ever throw up a high-five sign to a 2-year-old?

That 2-year-old will raise the same high-five sign.

  • We humans imitate.
  • It's in our DNA.
  • If we see John do X, we're likelier to do X.

Peep:

  • You adopted your manner of speech by conforming to those around you.
  • You picked up your work ethic by imitating those around you.
  • You wore a certain style of clothes by copying those you admired.

How Do You Influence Your Company?

Use the power of imitation.

Because we're heavily influenced by imitation, anything you/your-staff do at your office sends a signal to Billy B.:

  • "Hey $^@! I'll subconsciously do that too!"

Peep issues:

  • Lazy workers? Start working like a mofo on roido producing freaksih workodos -- or fill your staff with workaholics.
  • Extravagantly wasteful spending? Penny-pinch like a %^@^^@ and start publicizing how much you saved -- or fill your staff with coupon-clippers.
  • Bored work environment? Start being enthusiastic like a freak non-stop-can't-stop-dancing-like-1999 -- or fill your staff with happy people.

What model behaviors exist in your workplace = absolutely, freaktastically, contagious.

You/groups-of-people do one thing, someone else picks up on it, the others start adopting the behavior -- and before you know it, WHABAM! -- a freak load starts doing it.

WIN.

Start with models.

Posted on February 06

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  1. "Always be closing."
  2. Dikembe can't sell.

What should Dikembe do?

Dikembe should sell by steps.

Sell by steps.

  1. Sell receiving the brochure through email.
  2. Sell the appointment.
  3. Sell the demo/proof-of-concept.
  4. Sell the proposal.
  5. Sell the product.

If you can't get from step-to-step, break down those steps further.

For instance, if you can't move from proposal to product sale, insert this middle step:

  1. Sell the proposal.
  2. Sell the 30-day trial.
  3. Sell the product.

If you still can't go from step-to-step, insert more middle steps.

TADA.

Always Be Selling Somethin'

Before you meet/talk/phone/communicate with a prospect, identify what you want to sell (e.g., the appointment, the demo, etc.).

Ideally, you'll have these two in mind before a meeting:

  1. "The reach" -- that is, you have a 20% chance of selling it.
  2. "The safety" -- that is, you're pretty 95% likely you can sell it.

Go for the reach, but prepare for the safety to keep yourself in play.

Each "sell" should move the sale forward (i.e., you're leading the prospect toward a transaction).

(Disclaimer: Ethics. Use it. Think sustainably.)

Steps.

Posted on February 05

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Say, you're given $800 billion to fund anything you want.

  1. You can buy cars.
  2. You can buy railroads.
  3. You can buy cookies.
  4. You can buy chipmunks.
  5. You can buy __________.

You can do whatever you want with the money.

Your job is to create a thriving, strong, sustainable business that produces freakish value -- and most importantly, generates freakish cash that will allow you to create more jobs for people and grow the organization exponentially further.

How should you spend your cash?

Peep this:

  1. You buy 100 Chevrolets for $3 million.
  2. Ten years later, those 100 Chevrolets depreciate to $800,000.

In other words, you spent money on junk that actually lost you over two million bucks.

Sure, you provided jobs when you made your initial purchase (HOORAY!) -- but you didn't create a sustainable model that would produce an endless array of jobs that would grow your organization into the future.

That is, ten years later, the community and your business are worse off with your purchase.

They now have to scrounge around looking and pleading to get jobs, while the ones who work for financially-responsible businesses are supporting their unemployed butts.

Is there a better investment?

Instead of spending $3 million on 100 depreciating assets, you instead do this:

  1. Spend the $3 million on a staff of salespeople and domain-specific folks for your business.
  2. What happens 10 years later? At a 20% ROE, that initial $3 million investment produces a return of $18 million.

You see that extra cash you generated?

  1. You use it to employ more people and buy more resources to grow the business even more.
  2. You start creating more job opportunities, as well as hiring more vendors and contractors -- which, in turn, creates more jobs for other businesses.
  3. With the added investments, you produce more cash -- which DING DING DING...creates even more jobs to amplify the organization further.

As the cycle escalates:

  1. More investment opps.
  2. More cash.
  3. More jobs.
  4. More resources for the world. Yay!
  5. Repeat ^1.

Now, flash-forward another 10 years; that initial $3 million at a 20% ROE now produces $111 million.

(The 100 Chevrolets, now twenty years old, are worth a measly $0.2 million. OH NOES!)

The Key to Spending Cash

It's just this:

  • Invest your cash in things that will give your business the biggest return for its buck.

That's it.

That's the key to investing/using-cash/running-a-business/running-a-coffeeshop/running-a-__________.

Focus on the ROEs (a.k.a. ROIs) of your different investment choices.

The more you spend on higher ROEs, the more money your business will generate (and the more jobs and resources you'll create for the world).

What About Investment X?

Say Investment X sounds tempting because you see a potential return of 5%.

(In any event, you'll create jobs either way to help stimulate the economy, so you think you're doing your community a greater good.)

But, then Investment Y captures your eye; you see it giving you a much better return: 15%.

What do you do?

Ding-ding-ding-ding-ding!

Investment Y.

With the bigger return, comes more investment opps. for your business -- creating more jobs, more cash, more jobs, more cash, more jobs, more cash -- as the cycle viciously continues like a penicillin-induced ostrich on a $^@%^@ spinner.

The biggest pitfall that business/organizational decision-makers make is this:

  • They spend money just because they see a "positive return".

BOO.

  1. Don't just spend on X because you speculate a positive return.
  2. Spend on X because you see X having a bigger return than any other investment choices you have.

Let's repeat that:

  1. Spend on X because you see X having a bigger return than any other investment choices you have.
  2. Spend on X because you see X having a bigger return than any other investment choices you have.
  3. Spend on X because you see X having a bigger return than any other investment choices you have.

Here's the most ignored investment trick.

  1. List your investment opportunities.
  2. Rank them by potential return on investment.
  3. Hedge your bets accordingly.

ROEs.

ROIs.

Basic. Fundamental.

(Yet, mysteriously ignored.)

The Biggest Bangs.

Posted on January 29

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According to the greatest management guru in the world's history and its momma's momma:

"If there's a storm on the mountain, more important than the plan are the people you have with you. When I did my El Capitan climb for my 50th birthday [on Yosemite's 3,300-foot rock face], my partner was Tommy Caldwell, who happens to be the greatest climber in the world. My hedge against the scariness of this climb was Tommy.

"If you go back in history, a few companies used difficult times to bolster their legions of talent. After World War II, all the government labs were shutting down, and engineers were streaming out. Hewlett-Packard was actually going through a layoff. But at the same time, Bill Hewlett and Dave Packard said the greatest opportunity they ever got wasn't technology; it was the opportunity to hire those engineers."

Posted on January 26

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Peep:

  1. Basketball team.
  2. Group of aspiring players.

How does a basketball team distinguish stars from sucks (i.e., how do they choose their players)?

Here's how a typical "company" would do choose their players:

  1. Bob: "Hi, can you take a seat."
  2. Willy: "Sure."
  3. Bob: "Are you really good at what you do?"
  4. Will: "Yes, I'm the best. I'm tenacious. I love to succeed. I'm motivated."
  5. Bob: "Great! You're hired! HOORAY! HIGH-FIVE!"

Companies operate in the obsoletecrap^^^@stic thinking of seeing "interviews" as the end-all-be-all of judging an applicant.

As a result, they end up with sucky-suck people who have no business doing what they're doing.

Even worse, drive away potential superstars to competitors.

How to Conduct Your Interviews

Be like a basketball team:

  1. Give a tryout.
  2. See how they really perform.
  3. Win.

For instance:

  • If you're hiring a programmer, pose Challenging Assignment X to your applicants.
  • If you're hiring a salesperson, give them a call sheet -- and see what they can do in an hour.
  • If you're hiring a graphic designer, pose a mini on-the-spot design contest, and see who's best.
  • If you're hiring an admin assistant, give them 5 tasks. See who's fastest + best quality.

There's a fine line between what someone says they can/would do in Situation X, and what they'd really do.

Posing actual tryouts (i.e., letting them showcase what they would perform if hired) gives you a pretty sweet picture of how the applicant would perform if hired -- letting you hire the most qualified freshtastic peeps for your company.

Tryout.

Posted on January 21

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Think of a burger chain.

  1. A store manager is responsible for profits-and-losses at their individual store.
  2. If s/he goes into the red for a quarter, you know who's accountable.

Yet, $^!@ companies put one person responsible for the company's P&L: The Boss.

That's it.

The Issue With Sole Power

Putting too much power into one person:

  1. diminishes your profits
  2. slows your growth
  3. will destroy the company if the person commits one oversight

Instead, organize your company like a chain of burger chains:

  1. Someone's responsible for the P&L of a small group of employees/area/customers.
  2. That means hiring/firing/marketing/the-yaddas.
  3. If the person can't consistently achieve a healthy-profitable quarters, PINK SLIP.

You start diversifying power from the boss, and forcing a subset of people to optimize their bottom-lines.

Result: You start optimizing your company from the top-down-all-around.

Diversifiy P&L.

Posted on January 18

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You know what sucks a business out of its star existence?

  • The way they treat their superstars like little-tiny kids.
  • The way they handhold the @!$ out of them.
  • The way they drive out any motivation they had for anything through corporate "policies".

Star performers have the potential to transform your business with their creativity/ingenuity/insight.

Yet, unfortunately, everyday, their potential suffers because of bureaucracy/fear/mediocrity.

How to Steer Star Performers

The integral difference between star performers and yes-men is that star performers crave meaningful work.

They're intrinsically-motivated to do good work.

How do you steer them?

  1. Set big goal.
  2. "Go."

For instance:

  1. "Build this division into a $5MM business in 2 quarters."
  2. "Go."

That is, you don't give them any directions/tasks/yaddas to fulfill the mission.

You're only there to guide/tutor/equip/cheerlead them.

What Happens?

You get folks who:

  1. tap their creative juices to get things fulfilled
  2. keep your superstars happy and motivated
  3. get the "big pictures" completed without your presence

It's almost like you're cloning YOU; but, if you're doing it correctly, you're getting somebody who's much more capable of fulfilling the chosen mission.

How to Set Your Goals for Stars

  • First, ensure the star is (1) intrinsically-motivated, and (2) has the capabilities/experience/brainpower to fulfill the goal.
  • Second, choose a large business-oriented goal with a 60-70% chance of succeeding.
  • Third, set a time limit.

The stars (p.s. calling them "stars" will cause complacency; don't do it) will concentrate on nothing until either (a) they accomplish their goal, or (b) the time limit expires.

It's like you give him/her the gi-normous homework assignment, where they do nothing but eat/breath/sleep the assignment.

Examples:

  • ex. a: "Build a $500,000 pipeline in 30 days."
  • ex. b: "Build the most-read blog in our industry in 6 months."
  • ex. c: "Increase our workforce efficiency by 50% in 5 months."
  • ex. d: "Increase customer walk-ins by 50% in 8 weeks."

Go.

Posted on January 14

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  1. Do one client project. Finish.
  2. Do second client project. Finish.
  3. Do third client project. Finish.

The yaddas.

What happens?

  • You lose time.
  • You burn cash.
  • You business stagnates.

The optimal way to do your client projects?

Think of any hamburger joint.

  • Current status: Five orders of cheeseburgers.

The horribly inefficient way (i.e., the non-trained way):

  1. Make and complete Burger ^1.
  2. Make and complete Burger ^2.
  3. Make and complete Burger ^3.
  4. Make and complete Burger ^4.
  5. Make and complete Burger ^5.

The optimal way:

  1. Place five patties in a skillet.
  2. Place five pairs of buns on table.
  3. Place five cheese slices on each pair.
  4. Place five lettuces on each pair.
  5. Finally, place a patty on each pair of bun. DONE.

What just happened?

  • You could've made one burger in 5 minutes.
  • But, you made five burgers in 7 minutes.

It's obvious in the restaurant industry, but most of us don't follow the same approach with our everyday client/project work.

We do one project-at-a-time; complete it; then start on the next.

Instead of grouping similar tasks, and doing those in chunks, we take the horribly inefficient road.

The ToDo

  1. List all current projects.
  2. List tasks needed to finish those projects.
  3. Then link common tasks, and do the mofosokos in chunks at a time.

BAM.

Instead of spending 5 hours on each project, you spend 7 to complete them all.

  • You've exponentially reduced your workload.
  • You've increased the number of client work you can take.
  • Your business soars like an $^@%^ eagle who's eating dinner with Dikembe Mutombo aboard a choo-choo bounded for Froo Froo. SAY WHAT.

Chunk tasks.

Posted on January 12

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