Why Successful Companies Stop Growing

We’ve all seen examples of unstoppable companies that suddenly hit the wall. Growth slows down, stock prices start to decline, shareholders get nervous, and the press starts to speculate that something is wrong. In some cases, like P&G and Starbucks, the board brings back a former CEOwho can presumably return the firm to its previous glory. In other cases, like with Apple, GE, or Cisco, the board holds its breath and hopes that things will change.

But the reality behind many of these cases is that periodic slowdowns are inevitable, even if the company is fundamentally solid. That doesn’t mean that CEOs (old or new), and other managers, can’t do anything to slow the decline or reverse it more quickly. Taking action, however, requires an understanding of the three forces that always drag high-flying companies back to earth.

The first is the law of large numbers. As a company gets bigger, each percentage of incremental revenue suddenly represents a fundamentally larger number. As the base grows, the amount of new business needed to make a material difference in earnings also rises, increasing the pressure on sales to find new markets, new categories, and new geographies. In other words, the larger a company becomes, the more the entire engine has to work harder.

A company’s growth is also inhibited by market maturity. Over time, markets follow morepredictable patterns as buyers become familiar with and loyal to particular brands. Eventually, as the market becomes more crowded, prices tend to stabilize, reducing the ability to grow through price increases. Finally, some markets reach a saturation point either because of limited demographic growth or commoditization of products. Taken together, these product and market life cycle forces all put pressure on the typical sources of growth for marketing and sales.

The third reason that growth slows down is psychological self-protection. As a company gets larger, there is more pressure to preserve the base business and less willingness to cannibalize itthrough innovative new offerings. As a result, at the very moment when the company needs new sources of growth, there is a tendency to play it safe and focus more on adapting existing products and services, rather than breakthrough opportunities. This not only opens the door to potentially disruptive competitors, but constrains moves into whatever is perceived as “risky” territory.

Taken together, these natural forces almost always damp down growth, which is why we shouldn’t be surprised when successful companies hit periodic speed bumps. The challenge of course is what to do about it. Here are two suggestions that managers at all levels can consider:

• Regularly re-examine your business model. In the face of the forces described above, most business models eventually get stale and need to be either abandoned or refreshed. So periodically take a look at what you do, and how you do it — and ask yourself if it still makes sense. Could someone else provide this product or service differently? Do our customers have other choices or have their needs changed? In other words don’t limit your innovation and research to the development of new products and services, but also focus on the possibility of new business models.
• Think about getting smaller in order to get bigger. A second way to cope is to periodically do some pruning. Like trees that get too spindly, organizations also grow unnecessary branches that reduce the health of the overall enterprise. These need to be cut back in order to allow new shoots to have the resources to flourish. To do so, ask yourself whether some of your products or services may not be producing sufficient returns; or whether you would be better off without some of your customers. These are tough questions that often provoke strong emotional responses. But taking action on them can liberate you and your resources to focus on new opportunities and will lead to more growth in the long term.

There is no such thing as a company that grows forever without eventually hitting the wall, or at least slowing down to go over a speed bump. Through judicious pruning and the exploration of new business models however, managers can minimize the slow downs and give their organizations a better chance at long-term growth.

Reprinted from HBR.org

Listening to Complainers Is Bad for Your Brain

by Minda Zetlin

Exposure to nonstop negativity actually impairs brain function. Here's how to defend yourself.

shutterstock images

Do you hate it when people complain? It turns out there's a good reason: Listening to too much complaining is bad for your brain in multiple ways, according to Trevor Blake, a serial entrepreneur and author of Three Simple Steps: A Map to Success in Business and Life. In the book, he describes how neuroscientists have learned to measure brain activity when faced with various stimuli, including a long gripe session.

"The brain works more like a muscle than we thought," Blake says. "So if you're pinned in a corner for too long listening to someone being negative, you're more likely to behave that way as well."

Even worse, being exposed to too much complaining can actually make you dumb. Research shows that exposure to 30 minutes or more of negativity--including viewing such material on TV--actually peels away neurons in the brain's hippocampus. "That's the part of your brain you need for problem solving," he says. "Basically, it turns your brain to mush."

But if you're running a company, don't you need to hear about anything that may have gone wrong? "There's a big difference between bringing your attention to something that's awry and a complaint," Blake says. "Typically, people who are complaining don't want a solution; they just want you to join in the indignity of the whole thing. You can almost hear brains clink when six people get together and start saying, 'Isn't it terrible?' This will damage your brain even if you're just passively listening. And if you try to change their behavior, you'll become the target of the complaint."

So, how do you defend yourself and your brain from all the negativity? Blake recommends the following tactics:

1. Get some distance

"My father was a chain smoker," Blake confides. "I tried to change his habit, but it's not easy to do that." Blake knew secondhand smoke could damage his own lungs as well. "My only recourse was to distance myself."

You should look at complaining the same way, he says. "The approach I've always taken with complaining is to think of it as the same as passive smoking." Your brain will thank you if you get yourself away from the complainer, if you can.

2. Ask the complainer to fix the problem

Sometimes getting distance isn't an option. If you can't easily walk away, a second strategy is to ask the complainer to fix the problem.  "Try to get the person who's complaining to take responsibility for a solution," Blake says. "I typically respond to a complaint with, 'What are you going to do about it?'" Many complainers walk away huffily at that point, because he hasn't given them what they wanted, Blake reports. But some may actually try to solve the problem.

3. Shields up!

When you're trapped listening to a complaint, you can use mental techniques to block out the griping and save your neurons. Blake favors one used by the late Spanish golfer Seve Ballesteros during a match against Jack Nicklaus--a match the crowd wanted Ballesteros to lose. "He was having difficulty handling the hostility of the crowd," Blake says. "So he imagined a bell jar that no one could see descending from the sky to protect him."

Major League Baseball pitchers can sometimes be seen mouthing "Shields on!" as they stride to the mound, he says. He adds that his own imaginary defense is "more like a Harry Potter invisibility cloak."

A related strategy is to mentally retreat to your imagined favorite spot, someplace you'd go if you could wave a magic wand. "For me, it was a ribbon of beautiful white sugary sand that extended out in a horseshoe shape from a private island," Blake says. "I would take myself to my private retreat while people were ranting and raving. I could smile at them and nod in all the right places and meanwhile take myself for a walk on my private beach."

Blake first saw the picture of the island in a magazine, and the image stuck with him. Eventually, he got a chance to try it for real. "It turned out the island was for rent, and it was the same one I'd seen," he says. "So I rented it for a week. And I got to take that walk."

Innovation is Creativity x Risk Taking

by Robert Brands 

Innovation is impossible to achieve without taking a necessary amount of risk. In a world where the success rate of new product entries in the grocery business is 1 in 100, it is inevitable that every success sees failures along the way. An effective innovation leader should encourage creativity andrisk taking, while also practicing a tolerance for failure.

In order to foster initiative and innovation, ask yourself these questions.

• Do you allow free research and development (R&D) time?
• Do you invest in innovation: money, people, resources?
• Do you celebrate failure and risk taking?

In a tough economy the willingness to take risks can wither, so it’s critical to let team members know that failure will not result in punitive measures. A strong leader practices failure management by setting and agreeing on the risk taking bandwidth or budget. It is ok to fail but that failure should be seen and recognized as a learning experience.

Fear of failure is an innovation killer, so here are some simple steps to develop a failure management plan that will lead to a culture of sustainable innovation.

1. Clearly communicate the risk profile you are asking your people to adopt and state why it is important to the organization’s success. This limits your potential loss, while opening up the floor for creativity and risk taking.
2. Never allow an unsuccessful risk to hamper a team member’s opportunities and advancement. A culture of innovation depends on trust.
3. Create and communicate the results of an award program created with a high intraorganizational profile. It should, ideally, reward risks that pay off and “gee, nice try’s” that don’t.
4. Establish a formalized, non-accusatory process for harvesting key learnings from unsuccessful risks. Distribute these lessons learned. The key here is that all risks, whether successful or not, contribute towards the end goal.
5. Give your people the situational risk assessment tools they need to help them improve their risk-taking decisions. This can include risk scoring systems to identify different levels of risk, and ways to deal with adverse situations as part of a preventive strategy.

For more tips on achieving innovation through risk taking and failure management, see “Robert’s Rules of Innovation: A 10-Step Guide for Corporate Survival.”

Concocting The Right Business Strategy

by Joe Evans 

A cornerstone of corporate strategy is knowing your organization’s true value proposition and using that knowledge to innovate the business model so that existing customers can be better served and share of markets can be extended. Developing effective strategy requires business leaders to examine their value statements and to learn how to utilize and navigate the Organizational Value Quadrant (OVQ)¹ model. The four quadrants of organizational value define distinct operating models that relate the company’s positioning relative to the markets served by the business. Knowing which quadrant your business lives in and understanding how to navigate within the OVQ form the backbone of every strategic plan. This article explains the organizational value quadrants, and what they mean to a business in terms of strategy and investment.

Value Proposition; how well do you know it and live it?

For any business, understanding the company’s value proposition is the first step in strategy formulation and must be addressed as a key input to the OVQ discussion.

A value proposition can be thought of a business or marketing statement that summarizes why a consumer should buy a product or use a service. In essence, this statement should help the firm connect with a potential target market in a way that differentiates a particular product or service as to how it will add more value or solve a problem better than other similar offerings.

 

The purest three elements of a value proposition are:

The connection: What is it that makes the product or service inspirational and innovative? The connection must compel the customer to want the product and say, “I need this”.

The differentiation: What is it that makes the product or service indispensable? The differentiation should help eliminate the thought of substitutes in the mind of the buyer.

The substantiation: What facts can you state about the product or service to help create credibility and trust? The substantiation should help the potential buyer to believe in the product or service and take action.

Organizational Value Quadrants

Businesses operate on models designed for value creation that are in alignment with their stated value propositions for each class of products and services. While the value proposition helps communicate the marketing and sales message, the business model must deliver the value promised. That leads to the discussion of value quadrants.

Strategists should always be thinking in terms of value quadrants when considering their firm’s competitive positioning. Method Frameworks focuses on four primary quadrants to classify the business model a company is following. The quadrants are  shown in the graphic below:

 

Each quadrant represents the focus of a company or business unit and can be thought of as the strategy and business model generally being followed. Below is a synopsis of each quadrant:

The Customer Intimacy & Synergy Quadrant

Companies operating in the Customer Intimacy & Synergy Quadrant focus on the customization and tailoring of products / services. Their missions are geared toward know their customers well, delivering what specific customers want and “personalizing” the experience.

Customers of businesses in this quadrant have the expectation of a close relationship that is solution-based for their needs. In return, they are willing to accept a higher cost for the goods or services they are purchasing.

The Operational & Organizational Excellence Quadrant

Companies operating in the Operational & Organizational Excellence Quadrant focus operational efficiencies, supply-chain optimization, maintaining low overhead and accomplishing more with lean structures. Their missions are focused on creating predictability in delivering quality, low price, no-hassle purchase experiences and ease of use.

Customers of businesses in this quadrant have the expectation of low cost and best pricing. In return, they are willing to accept less in the areas of service and relationship intimacy.

The Customer Enrichment & Fulfillment Quadrant

Companies operating in the Customer Enrichment & Fulfillment Quadrant focus on helping their customers reaching and fulfilling their potential. Their mission themes relate to creating better lives for their customers and the opportunity for self-actualization.

Customers of businesses in this quadrant have the expectation of enjoying an experience and learning through exploration and discovery. In return, they are willing to accept a higher cost for the goods or services they are purchasing.

The Product / Service Superiority & Innovation Quadrant

Companies operating in the Product / Service Superiority & Innovation Quadrant focus on creating superior or unique “One-of-a-Kind” value-add services or products. Their missions are geared towards innovation and creating the best products and services available in their class.

Customers of businesses in this quadrant have the expectation of receiving high quality and benefiting from innovation in the products or services being purchased. In return, they are willing to accept a higher cost for the goods or services they are purchasing.

Utilizing The Quadrants In Strategic Planning

Each quadrant groups companies relative to their value propositions and respective customer expectations. Most companies standardize on a business model and force a fit of that model to all their customers. Although it may seem illogical to combine a strategy of individual service (custom-tailored and expensive) with a model of operational excellence (where cost-minimization requires a high degree of process standardization), it can and has been done successfully. A business does not have to be entirely committed to an exclusive relationship with only one category and can use strategy to navigate and position themselves in different quadrants of the OVQ.

Sales organizations have developed impressive sophistication in analyzing their customers and segmenting them appropriately. Likewise, CFOs are highly tuned into profit analysis and many have developed the equivalent of “heat maps” for profitability. Together, they have analyzed their sales and profit data and have developed a clear understanding of which customers are providing them with high sustained profitability. With this combined insight, customer segmentation can then be applied to strategically approach these profit areas with segment sub-strategies. Segment strategy can be applied to invest resources in securing and growing key customer relationships through integration of the company’s operations with those of the key customer’s in a tailored  and effective approach. When this approach is followed, the investments can result in lowering key customer’s cost while increasing the profits of the supplier business.

Customer integration within a value quadrant can be accomplished by tuning customer inventories, smoothing order patterns and even deploying substitute products in carefully-selected situations. The key is to partner with key customers and shift the focus of supply chain efficiency initiatives from optimization solely within the organization’s supply-chain ecosystem to an optimization of the joint vendor-customer supply chain domain. This shift creates enormous new efficiencies for both organizations and helps increase the cost of switching vendors for the customer in the future.

The example above illustrates how an organization can straddle both the operational excellence and the customer intimacy quadrants. With strategic positioning companies can begin to dominate in other quadrants through the creation of other differentiated serving models for important customer segments. Through careful strategic planning and follow-though in execution, a business can actually implement and sustain multiple parallel service models to operate successfully across quadrants.

Recap

Business leaders must begin with a clear and realistic understanding of their value proposition, the first step in strategy formulation that must be addressed as a key input to the Organizational Value Quadrant analysis. A value proposition can be thought of a business or marketing statement that summarizes why a consumer should buy a product or use a service.

The purest three elements of a value proposition are the connection, the differentiation and the substantiation. While the value proposition helps communicate the marketing and sales message, the business model (represented by quadrants of the OVQ model) must deliver the value promised. Each quadrant represents the focus of a company or business unit and can be thought of as the strategy and business model generally being followed. The four primary quadrants to classify the business model a company are:

- Operational & Organizational Excellence

- Product / Service Superiority & Innovation

- Customer Enrichment & Fulfillment

- Customer Intimacy & Synergy

Most importantly, a business does not have to be entirely committed to an exclusive relationship with only one category and can use strategy to navigate and position themselves in different quadrants of the OVQ.

Suggested Reading:

-  Organizational Authenticity

-  Corporate Strategy: 5 Critical Alignments To Assess

-  Value: Create – Capture – Share

-  Corporate Strategy: Multinational Organizations

^{1 – Organizational Value Quadrant based on the work of Edgar Papke}

Three Myths about What Customers Want

by Karen Freeman, Patrick Spenner and Anna Bird 
via @harvardbiz
 

Most marketers think that the best way to hold onto customers is through "engagement" — interacting as much as possible with them and building relationships. It turns out that that's rarely true. In a study involving more than 7000 consumers, we found that companies often have dangerously wrong ideas about how best to engage with customers. Consider these three myths.

Myth #1: Most consumers want to have relationships with your brand.

Actually, they don't. Only 23% of the consumers in our study said they have a relationship with a brand. In the typical consumer's view of the world, relationships are reserved for friends, family and colleagues. That's why, when you ask the 77% of consumers who don't have relationships with brands to explain why, you get comments like "It's just a brand, not a member of my family." (What consumers really want when they interact with brands online is to get discounts).

How should you market differently?

First, understand which of your consumers are in the 23% and which are in the 77%. Who wants a relationship and who doesn't? Then, apply different expectations to those two groups and market differently to them. Stop bombarding consumers who don't want a relationship with your attempts to build one through endless emails or complex loyalty programs. Those efforts will be low ROI. Chances are there are higher returns to be had elsewhere in your marketing mix.

Myth #2: Interactions build relationships.

No, they don't. Shared values build relationships. A shared value is a belief that both the brand and consumer have about a brand's higher purpose or broad philosophy. For example, Pedigree Dog Food's shared value is a belief that every dog deserves a loving home. Southwest Airlines' shared value revolves around the democratization of air travel.

Of the consumers in our study who said they have a brand relationship, 64% cited shared values as the primary reason. That's far and away the largest driver. Meanwhile, only 13% cited frequent interactions with the brand as a reason for having a relationship.

How should you market differently?

Many brands have a demonstrable higher purpose baked into their missions, whether it's Patagonia's commitment to the environment or Harley Davidson's goal "to fulfill dreams through the experience of motorcycling." These feel authentic to consumers, and so provide a credible basis for shared values and relationship-building. To build relationships, start by clearly communicating your brand's philosophy or higher purpose.

CEB has done extensive work on shared values, showcasing how brands like Mini, Pedigree and Southwest use them to engage with customers. You might also check into Jim Stengel's examination of growth ideals and David Aaker's latest work on brand relevance.

Myth #3: The more interaction the better.

Wrong. There's no correlation between interactions with a customer and the likelihood that he or she will be "sticky" (go through with an intended purchase, purchase again, and recommend). Yet, most marketers behave as if there is a continuous linear relationship between the number of interactions and share of wallet. That's why, as the Wall Street Journal recently reported, you see well-established retailers like Neiman-Marcus, Land's End and Toys R Us sending customers over 300 emails annually.

In reality, that linear relationship flattens much more quickly than most marketers think; soon, helpful interactions become an overwhelming torrent. Without realizing it, many marketers are only adding to the information bombardment consumers feel as they shop a category, reducing stickiness rather than enhancing it. (For more on consumers' cognitive overload, see the sidebar "Too Much Information" in our recent HBR article.

How should you market differently?

Instead of relentlessly demanding more consumer attention, treat the attention you do win as precious. Then ask yourself a simple question of any new marketing efforts: is this campaign/email/microsite/print ad/etc. going to reduce the cognitive overload consumers feel as they shop my category? If the answer is "no" or "not sure," go back to the drawing board. When it comes to interacting with your customers, more isn't better.

What a 9-Year-Old Can Teach You About Selling

via @ INC by Tom Searcy

I recently read a study that confirmed my suspicion that most people don't remember what we present to them in a sales call. The data suggested that the average buyer in a meeting will only remember one thing–one!–a week after your meeting.

Oh, and by the way: You don't get to choose what that one thing is. Sigh.

So what have sales professionals done about this? They have worked on "honing the message," developing a "compelling unique advantage" and, of course, the ultimate silver bullet: a surefire elevator pitch.

But here's what you're fighting: A world cluttered with information, schedules, packed with more meetings and work than a person can handle. A decision-making process with more people involved in every choice–many of whom know little about your product or service. No wonder so little is remembered; often your audience doesn't even understand much about what you're offering.

What Kids Want to Know

I have a 9-year-old daughter with spring freckles, long brown hair and blue eyes the size of silver dollars. She asks the kinds of questions that on the surface seem so simple:

• Daddy, what do you do?
• Why do people decide to hire you?
• Why don't they hire somebody else or do it themselves?

One of the great things about 9-year-olds: Like many buyers these days, they lack context. Any answer that you provide has to be in a language that they can understand.

What does a procurement specialist know about what you sell–or the IT person, or the finance person? The challenge is this: Can you answer the three questions my 9-year-old asked, for your own business?

Hint: There are right and wrong answers for both.

Daddy, What Do You Do?

• Right answer: "I help companies to grow really fast by teaching them how to sell bigger companies much larger orders."
• Wrong answer: "Our company helps develop inside of our clients a replicable and scalable process for them to land large accounts."

Why Do People Decide to Hire You?

• Right answer: "We have helped lots of companies do this before, so we are really good at it as long as they are the right type of companies."
• Wrong answer: "We have a proven process for implementation that allows organizations to tailor the model to their market, business offering and company's growth goals."

Why Don't They Do It Themselves?

• Right answer: "Just like when you learned to play the piano: Mommy and I could teach a little, but we don't know as much as your teacher, and teaching you ourselves would take a long time and be very frustrating. Daddy is a really good teacher of how to make bigger sales, and people want to learn how to do this as fast as they can."
• Wrong answer: "We are the foremost expert in this field with over $5 billion in business that our clients have closed using this system. Usually our clients have tried a number of things on their own before we work together and have wanted outside help to get better results."

In these cases, both answers are accurate, but that doesn't make them right. In a world in which more decisions are made with less information and context, our responsibility is to get to as clear and memorable an answer as possible for all of the buyers to understand.

Best business books list...

I shared this list with my Vistage group members... it is a collection of some of the best business books I have come across.    Below I have listed the book, a description of the value and a link to Amazon:

Leadership is an Art - Best book I have read on high level leadership - Amazon

The Marketing Playbook - Outstanding book on marketing strategy.  How to compete, new products and services.  Well written - Amazon

Top Grading - Discussed in our last meeting.  How to get the right people on the bus - Amazon

The Alchemist - Not your normal business book... this book is about life and work balance as well as priorities.  Thought provoking - Amazon

How to Become a Rainmaker - Excellent book for sales and BD, both practical and inspirational - Amazon

Fierce Conversations - A Vistage endorsed book on having the tough conversations and communicating with clarity - Amazon

Death By Meeting - A must read for executives.  This is a fable about meetings and very practical ways to make the far more effective - Amazon

I have many more listed on my LinkedIn Reading List.

Business Etiquette: 5 Rules That Matter Now

via @inc by Eliza Browning

The word may sound stodgy. But courtesy and manners are still essential--particularly in business.

The word "etiquette" gets a bad rap. For one thing, it sounds stodgy and pretentious. And rules that are socially or morally prescribed seem intrusive to our sense of individuality and freedom.

But the concept of etiquette is still essential, especially now—and particularly in business. New communication platforms, like Facebook and Linked In, have blurred the lines of appropriateness and we're all left wondering how to navigate unchartered social territory.

At Crane & Co., we have been advising people on etiquette for two centuries. We have even published books on the subject—covering social occasions, wedding etiquette and more.

Boil it down and etiquette is really all about making people feel good. It's not about rules or telling people what to do, or not to do, it's about ensuring some basic social comforts.

So here are a few business etiquette rules that matter now—whatever you want to call them.

1. Send a Thank You Note

I work at a paper company that manufactures stationery and I'm shocked at how infrequently people send thank you notes after interviewing with me. If you're not sending a follow-up thank you note to Crane, you're not sending it anywhere.

But the art of the thank you note should never die. If you have a job interview, or if you're visiting clients or meeting new business partners—especially if you want the job, or the contract or deal—take the time to write a note. You'll differentiate yourself by doing so and it will reflect well on your company too.

2. Know the Names

It's just as important to know your peers or employees as it is to develop relationships with clients, vendors or management. Reach out to people in your company, regardless of their roles, and acknowledge what they do.

My great-grandfather ran a large manufacturing plant. He would take his daughter (my grandmother) through the plant; she recalled that he knew everyone's name—his deputy, his workers, and the man who took out the trash.

We spend too much of our time these days looking up – impressing senior management. But it's worth stepping back and acknowledging and getting to know all of the integral people who work hard to make your business run.

3. Observe the 'Elevator Rule'

When meeting with clients or potential business partners off-site, don't discuss your impressions of the meeting with your colleagues until the elevator has reached the bottom floor and you're walking out of the building. That's true even if you're the only ones in the elevator.

Call it superstitious or call it polite—but either way, don't risk damaging your reputation by rehashing the conversation as soon as you walk away.

4. Focus on the Face, Not the Screen

It's hard not to be distracted these days. We have a plethora of devices to keep us occupied; emails and phone calls come through at all hours; and we all think we have to multitask to feel efficient and productive.

But that's not true: When you're in a meeting or listening to someone speak, turn off the phone. Don't check your email. Pay attention and be present.

When I worked in news, everyone was attached to a BlackBerry, constantly checking the influx of alerts. But my executive producer rarely used hers—and for this reason, she stood out. She was present and was never distracted in editorial meetings or discussions with the staff. And it didn't make her any less of a success.

5. Don't Judge

We all have our vices—and we all have room for improvement. One of the most important parts of modern-day etiquette is not to criticize others.

You may disagree with how another person handles a specific situation, but rise above and recognize that everyone is trying their best. It's not your duty to judge others based on what you feel is right. You are only responsible for yourself.

We live in a world where both people and businesses are concerned about brand awareness. Individuals want to stand out and be liked and accepted by their peers--both socially and professionally.

The digital landscape has made it even more difficult to know whether or not you're crossing a line, but I think it's simple. Etiquette is positive. It's a way of being—not a set of rules or dos and don'ts.

So before you create that hashtag, post on someone's Facebook page or text someone mid-meeting, remember the fundamentals: Will this make someone feel good?

And remember the elemental act of putting pen to paper and writing a note. You'll make a lasting impression that a shout-out on Twitter or a Facebook wall mention can't even touch.

Six Strategies for Partnering with Big Brands

BY JANE PORTER, Entrepreneur Magazine

Tom Szaky didn't even try to get his product--a worm excrement fertilizer packed in a recycled bottle--into small retailers when he started TerraCycle six years ago. Instead, he reached as high as he could: Wal-Mart. "If I want to be big and do it quickly, the best way … is to work with the world's biggest companies," he says. "They can accelerate your cycle much more quickly than any other company can."

The Trenton, N.J.-based conpany's first big partnership with Wal-Mart in Canada was just the start of what has become a $14 million business. TerraCycle now gathers unrecyclable trash and converts it into products and packaging for such big brands as Kraft, Pepsi and Mars. Last year, corporate partners spent $45 million on TerraCycle-related marketing--far more than Szaky could have ever done alone.

But breaking in with big companies is no easy feat. For Szaky, it took lots of research, persistence and trial and error. "The biggest mistake small companies make is they don't do enough homework," says Brant Slade, co-author of Think BIG!: An Entrepreneur's Guide to Partnering With Large Companies (Course Technology PTR, 2009). "They think … more from the small business point of view as opposed to thinking from the large business point of view."Here's a checklist to help your business prepare to partner with big brands:

1. Be unique. Make sure your business pitch is carefully thought out and offers value to your potential partner. After Robin Thurston co-founded MapMyFITNESS.com, an Austin, Texas-based fitness social network that offers online routes, training and group activities, he and his partner realized they had developed a geo-location technology that bigger companies wanting online fitness tools and access to a social network could use. With their first corporate partner, Cadbury's Accelorade sports drink, they collaborated on a web interface enabling users on their site to map and share workouts. "You have to have something that is clearly valuable to that big brand that they might not want to spend the time investing in or doing," Thurston says. Now, the company also builds web platforms and mobile phone apps for brands like NBC Sports, Humana and Skechers, whose customers can opt into the MapMyFITNESS social network.

2. Remain persistent. Although Szaky had the worm-excrement-in-a-recycled-bottle market cornered, getting that first deal with Wal-Mart in 2005 still required persistence. After scouring LinkedIn and alumni networks to find the right contact, Szaky called Wal-Mart 10 times a day, every day for three weeks until he finally got through and set up a meeting. Big companies field lots of requests, so persistence is a must. "There are some brands we are working with today that literally were five-year conversations," Thurston says.

MapMyFITNESS co-founders Robin Thurston and Kevin Callahan, Photo credit, Target Brands Inc.

3. Think big. You have to think like a big brand to partner with one. For MapMyFITNESS, that means developing large-scale projects. "A big brand doesn't want to talk about a $10,000 project," Thurston says. "They want to talk in seven figures and really big user numbers." For example, Thurston and his partner proposed that big companies give away their product with subscriptions to the MapMyFITNESS website. The size of their user base--nearly seven million today--was large enough to interest brands like Procter & Gamble's Febreze.

4. Plan for fast growth. If you're growing too quickly to keep up with demand, you'll lose money--and probably your partner. Szaky learned that lesson through experience. "The more we grew, the more we lost," he says. While TerraCycle's sales reached $6.6 million in 2008, it had a net loss of $4.5 million. The next year, Szaky began developing agreements with companies to handle production for him. Today, 40 companies make and sell TerraCycle products for major retailers and TerraCycle turned a profit of $100,000 in the last year.

Polka Dog Bakery, a Boston-based dog treat maker slated to expand into 1,763 Target stores this May, let the retailer oversee production and distribution in order to make the partnership feasible. "It would have been too much for us to expand at that capacity," says cofounder Robert Van Sickle of his 11-person company.

5. Prepare for scrutiny. Make sure your financial and legal affairs are in order. Since TerraCycle works with multinational companies, the company gets audited every two months. After failing the first few audits in his early partnerships, Szaky realized he needed to focus more on developing proper procedures. "If you are going to go down the path of working in big businesses, having your house in order is critical," he says. "You are going to get the growth but you are also going to get a lot more scrutiny."

6. Build on existing partnerships. Don't rush to find the next partner once you successfully link up with a big company. MapMyFITNESS gets a lot of new business from expanding existing partnerships, Thurston says. Companies are often more willing to consider developing a licensing partnership, for example, if they're already buying advertising on your website. "Too many entrepreneurs chase after the next client instead of recognizing the current client could mean a lot more revenue for them if they simply explore other revenue channels," Thurston says. Partnerships now account for a third of his company's total revenue.

Peer Advisory Groups Will Throw You For A Loop

by Leo Bottary

A reinforcing loop that is.  One of the most powerful dynamics of the peer advisory group is the momentum created when peers engage in a cycle of learning, sharing, applying, and achieving.  Whether they 

are executives with different skills sets from the same organization or CEOs collaborating with fellow CEOs from entirely different industries and backgrounds, they participate in a process that by its nature fuels continuous improvement.  For larger companies, even those with robust formal training programs, internal peer advisory groups can play a major role in maximizing a company’s Return On Development.  For small businesses, it’s often a brilliantly effective stand-alone solution for developing people and growing the enterprise.

The prevailing model in many large companies today is what I’ve described in earlier posts as Trickle-Down Leadernomics:Traditional episodic training designed to stimulate positive behavioral changes, aimed to build better leaders who inspire commitment rather than mere compliance, in an effort to create a healthier culture, a more productive workplace, and happier employees whom you hope will one day perform like a well-oiled machine and drive double-digit growth and profitability for years to come. (Notice the amount of “trickle-down” it takes to achieve the desired result).

The two big problems with Trickle-Down Leadernomics are 1)  If you believe the axiom that “practice makes perfect,” then you would probably agree that what you learn in training, while inviting and practical, is not likely to find its way into your daily routine unless you have the discipline and support system to assure its application.  And even then, short term behavioral changes tend to give way to old habits.  2) Since most companies don’t have a formal mechanism for helping individuals share and apply what they’ve learned, the organization by definition gets shortchanged.   It’s a bit like planting a garden and not giving it water or sunlight.

Believe it or not, I’m a HUGE fan of formal executive development, which is the reason I can’t stand to see so much of it go to waste.  That’s why I believe the reinforcing loop inherent in a highly functioning peer advisory group is worth some thoughtful consideration:

Learning – It’s the first stage of the process and, for too many organizations, it’s often the last.  In Peter Senge’sbook, The Fifth Discipline: The Art & Practice of the Learning Organization, he describes learning organizations this way: “…where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, are where people are learning how to learn together.”  Senge goes on to say that we wouldn’t suggest we learned how to ride a bicycle if we only actually rode the bike once.  It’s about demonstrating the capacity to produce quality results repeatedly.  It’s the difference between riding a bike and being a bicycle rider. Peer advisory groups create bicycle riders by fostering deep learning.

Sharing – Whether it’s knowledge gained from reading a book or attending an offsite training program, sharing delivers value to our peers and colleagues and, in our role as teacher or conveyor, helps us embed what we’ve learned.  Peer groups not only engage in rich dialogue about cutting-edge concepts, but the group members tend to ask hard questions and challenge each other to tackle complex issues using their newfound knowledge.  Peers reinforce and essentially give each other permission to try new ways of working.  As I wrote last week, peer to peer influence is incredibly powerful.

Applying – It’s hard to stress the importance of applying what you’ve learned.  Can you imagine a football team showing up for a game without having practiced?  It’s unconscionable.   The best of the best don’t rely on talent alone to excel or win championships.  They take what they learn and apply it until it becomes second nature.   Peer groups hold us accountable for practicing our craft and fine-tuning news ways of working.

Achieving – Good behaviors will replace bad ones, but only over time and after repeated success.  Achieving inspires believing.  And once you believe in yourself and grow to trust a newfound way of working, it fuels the hunger to learn more and the cycle continues.  Achieving also inspires others to emulate your behavior.  Jim Kouzes and Barry Posner call it modeling the way!  As a CEO you can model the way for your peers and your employees and, as leaders in larger companies, you can do the same.   It’s about walking the talk and others following your lead.  There’s nothing more powerful.

If you don’t mind getting thrown for a loop, then you’re an excellent candidate for either joining an external peer advisory group or starting one in your organization.   If you’re planting the garden anyway, why not help it grow?

The 7 Best Books on Time Management

Time management is a vital skill that one must learn to get the most out of life. Learning this skill is relatively easy as long as you know what you want in life and have the drive and passion to achieve it. To complement an individual’s fast-paced lifestyle, here are some of the best time management books to learn from.

The 7 Best Time Management Books:

1. Getting Things Done by David Allen: David Allen, a time management expert, introduces his methodology on how to get things done in his book, Getting Things Done. His philosophy on time management is explained plainly in this book and, in fact, most of the present time management methodologies are based on his time management style.

2. Do It Tomorrow and Other Secrets of Time Management by Mark Forster: Mark Forster is a well-known author and lecturer in the field of time management. His book, Do It Tomorrow, shows his alternative views on time management. In this book, readers will find the seven time management principles that Forster has developed for effective time management. Both novices and experts will find something worth noting in this book.

3. The One Minute Manager by Ken Blanchard: Ken Blanchard is a popular author of many time management books. The One Minute Manager is the first book in the One Minute series that Blanchard has published. This book is very brief and only highlights a few key concepts for effective time management.

4. Putting The One Minute Manager to Work by Ken Blanchard: This book is another Blanchard work that helps the readers of the One Minute Manager apply the ideas in real life. In this book, the readers will learn how to work well with their team in a lighthearted but effective manner.

5. Leadership and the One Minute Manager by Ken Blanchard: The Leadership and the One Minute Manager is another installment in Ken Blanchard’s One Minute series. In the above mentioned books, Blanchard has stressed the importance of time management and effective teamwork and monitoring system to become productive. In this book, Blanchard focuses on how to develop the leader in an individual to be a good manager. This book is a good accompaniment for the above mentioned Blanchard masterpieces.

6. The 7 Habits of Highly Effective People by Stephen Covey: For seasoned readers of books about time management, this book is a classic. Stephen Covey’s philosophical approach on time management helps the readers have a clear view point in life to determine their personal goals and achieve it. This book is a perfect life coach as well as a time management guide.

7. The Now Habit by Neil Fiore: Neil Fiore has finally discovered the antidote for procrastination. In his book, The Now Habit, he introduces several effective techniques to overcome procrastination. These techniques and systems make time management easy and fun so readers will enjoy applying these lessons in real life.

These books about time management are only some of the best in the market today. Whether a mentor or a learner, one can learn something useful from these books.

Author Info:

Find out more about time management books at this website:time management. 

Nine Things Successful People Do Differently

From Harvard Business Review

HEIDI GRANT HALVORSON

Why have you been so successful in reaching some of your goals, but not others? If you aren't sure, you are far from alone in your confusion. It turns out that even brilliant, highly accomplished people are pretty lousy when it comes to understanding why they succeed or fail. The intuitive answer — that you are born predisposed to certain talents and lacking in others — is really just one small piece of the puzzle. In fact, decades of research on achievement suggests that successful people reach their goals not simply because of who they are, but more often because of what they do.

1. Get specific. When you set yourself a goal, try to be as specific as possible. "Lose 5 pounds" is a better goal than "lose some weight," because it gives you a clear idea of what success looks like. Knowing exactly what you want to achieve keeps you motivated until you get there. Also, think about the specific actions that need to be taken to reach your goal. Just promising you'll "eat less" or "sleep more" is too vague — be clear and precise. "I'll be in bed by 10pm on weeknights" leaves no room for doubt about what you need to do, and whether or not you've actually done it.

2. Seize the moment to act on your goals. Given how busy most of us are, and how many goals we are juggling at once, it's not surprising that we routinely miss opportunities to act on a goal because we simply fail to notice them. Did you really have no time to work out today? No chance at any point to return that phone call? Achieving your goal means grabbing hold of these opportunities before they slip through your fingers.

To seize the moment, decide when and where you will take each action you want to take, in advance. Again, be as specific as possible (e.g., "If it's Monday, Wednesday, or Friday, I'll work out for 30 minutes before work.") Studies show that this kind of planning will help your brain to detect and seize the opportunity when it arises, increasing your chances of success by roughly 300%.

3. Know exactly how far you have left to go. Achieving any goal also requires honest and regular monitoring of your progress — if not by others, then by you yourself. If you don't know how well you are doing, you can't adjust your behavior or your strategies accordingly. Check your progress frequently — weekly, or even daily, depending on the goal.

4. Be a realistic optimist. When you are setting a goal, by all means engage in lots of positive thinking about how likely you are to achieve it. Believing in your ability to succeed is enormously helpful for creating and sustaining your motivation. But whatever you do, don't underestimate how difficult it will be to reach your goal. Most goals worth achieving require time, planning, effort, and persistence. Studies show that thinking things will come to you easily and effortlessly leaves you ill-prepared for the journey ahead, and significantly increases the odds of failure. 

5. Focus on getting better, rather than being good. Believing you have the ability to reach your goals is important, but so is believing you can get the ability. Many of us believe that our intelligence, our personality, and our physical aptitudes are fixed — that no matter what we do, we won't improve. As a result, we focus on goals that are all about proving ourselves, rather than developing and acquiring new skills.

Fortunately, decades of research suggest that the belief in fixed ability is completely wrong — abilities of all kinds are profoundly malleable. Embracing the fact that you can change will allow you to make better choices, and reach your fullest potential. People whose goals are about getting better, rather than being good, take difficulty in stride, and appreciate the journey as much as the destination.

6. Have grit. Grit is a willingness to commit to long-term goals, and to persist in the face of difficulty. Studies show that gritty people obtain more education in their lifetime, and earn higher college GPAs. Grit predicts which cadets will stick out their first grueling year at West Point. In fact, grit even predicts which round contestants will make it to at the Scripps National Spelling Bee.

The good news is, if you aren't particularly gritty now, there is something you can do about it. People who lack grit more often than not believe that they just don't have the innate abilities successful people have. If that describes your own thinking .... well, there's no way to put this nicely: you are wrong. As I mentioned earlier, effort, planning, persistence, and good strategies are what it really takes to succeed. Embracing this knowledge will not only help you see yourself and your goals more accurately, but also do wonders for your grit.

7. Build your willpower muscle. Your self-control "muscle" is just like the other muscles in your body — when it doesn't get much exercise, it becomes weaker over time. But when you give it regular workouts by putting it to good use, it will grow stronger and stronger, and better able to help you successfully reach your goals.

To build willpower, take on a challenge that requires you to do something you'd honestly rather not do. Give up high-fat snacks, do 100 sit-ups a day, stand up straight when you catch yourself slouching, try to learn a new skill. When you find yourself wanting to give in, give up, or just not bother — don't. Start with just one activity, and make a plan for how you will deal with troubles when they occur ("If I have a craving for a snack, I will eat one piece of fresh or three pieces of dried fruit.") It will be hard in the beginning, but it will get easier, and that's the whole point. As your strength grows, you can take on more challenges and step-up your self-control workout.

8. Don't tempt fate. No matter how strong your willpower muscle becomes, it's important to always respect the fact that it is limited, and if you overtax it you will temporarily run out of steam. Don't try to take on two challenging tasks at once, if you can help it (like quitting smoking and dieting at the same time). And don't put yourself in harm's way — many people are overly-confident in their ability to resist temptation, and as a result they put themselves in situations where temptations abound. Successful people know not to make reaching a goal harder than it already is.

9. Focus on what you will do, not what you won't do. Do you want to successfully lose weight, quit smoking, or put a lid on your bad temper? Then plan how you will replace bad habits with good ones, rather than focusing only on the bad habits themselves. Research on thought suppression (e.g., "Don't think about white bears!") has shown that trying to avoid a thought makes it even more active in your mind. The same holds true when it comes to behavior — by trying not to engage in a bad habit, our habits get strengthened rather than broken. 
If you want change your ways, ask yourself, What will I do instead? For example, if you are trying to gain control of your temper and stop flying off the handle, you might make a plan like "If I am starting to feel angry, then I will take three deep breaths to calm down." By using deep breathing as a replacement for giving in to your anger, your bad habit will get worn away over time until it disappears completely.

It is my hope that, after reading about the nine things successful people do differently, you have gained some insight into all the things you have been doing right all along. Even more important, I hope are able to identify the mistakes that have derailed you, and use that knowledge to your advantage from now on. Remember, you don't need to become a different person to become a more successful one. It's never what you are, but what you do.

Heidi Grant Halvorson, Ph.D. is a motivational psychologist, and author of the new book Succeed: How We Can Reach Our Goals (Hudson Street Press, 2011). She is also an expert blogger on motivation and leadership for Fast Company and Psychology Today. Her personal blog, The Science of Success, can be found at www.heidigranthalvorson.com. Follow her on Twitter@hghalvorson

Not What, Not How, But WHY...

Simon Sinek @TED... worth watching...

http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action.html