3 Steps for Creating Leverage in Your Business

August 23, 2012

“Work smarter not harder.”

This dreadfully overused phrase is meant to address the apparent lack of time, money and resources we experience in our work and personal lives. But how do we translate these words into something actionable? Here are three methods I have used in my business to accomplish this:

1. Focus on what matters. Over the years, I have studied numerous organizations and have found that only about 30 percent of the typical day is spent on activities that directly create value. For example, sales representatives devote on average only one-third of their day with prospects. The remainder is allocated to administration, travel, meetings, and other less valuable activities. The same is true for almost every other “knowledge worker” in an organization.

To get more done, focus on the critical tasks while eliminating, delegating, outsourcing, or automating less important activities. I have seen many individuals go from 30 percent to 50 or 60 percent with little effort using this method.

While working at a major computer manufacturer many years ago, I was able to cut my 80-hour a week workload to less than 20 hours simply by using this strategy. It took only a weekend of analysis and implementation. This allowed me to focus my energies on activities that really matter, while helping others find time saving strategies.

2. Leverage sales channels. The ultimate goal is to maximize results with the least amount of effort. You can accomplish this through leverage: generating disproportionately large returns with a minimal investment.

Let’s look at selling again. Traditionally, to sell more, you identify prospects, create sales collateral, develop marketing materials, and then directly solicit potential buyers. This is a linear strategy. If you make a sale, it is one sale.

To create exponential growth, consider working with businesses that already have the relationships you want to build. One partnership with the right distribution channel can lead to hundreds or thousands of sales, without any extra effort on your part…

Read the rest of this article on the American Express OPEN Forum

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Laziness is the Father of Innovation

August 22, 2012

If necessity is the mother of invention, then laziness is sometimes its father.*

Some of the greatest innovations were developed by people who were too lazy to do a particular task.

Professor John Atanasoff, along with graduate student Clifford Berry, built the world’s first electronic-digital computer back in the late 1930′s. Why did he do this? He said, “I was too lazy to calculate and so I invented the computer.”

A number of years back while working for a computer manufacturer, the department head dubbed me the “Chief Laziness Officer.” He meant that as a compliment. I was constantly finding ways to reduce my workload. I got so good at it that in my spare time I helped others do the same. (you can read more about this in an earlier blog entry)

Laziness drives innovations that improve productivity. It comes from saying, “There must be a better way.”

Laziness does not mean sitting on your butt watching Jerry Springer and eating bon bons.  The process of simplifying takes a lot of effort. But when you develop a new innovation once, you get to leverage it over and over again. So in the long run, you are ahead.

Leverage is the key word. Laziness often involves the creation of something that results in exponential returns.  The development of the computer certainly did this.

Although it is not considered to be a positive trait, sometimes it is useful to tap into your inner laziness.

* This reminds me of when I worked with Dr. Michael Hammer many years back.  I once introduced him at a conference and said that he was the father of reengineering.  When he took the stage he said, “Every time my wife hears that I am the father of reengineering, she wants to know who the mother is.”  Classic.

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The Walk More, Wait Less Innovation

August 20, 2012

Think about this problem.

You run an airport.  It takes on average 8 minutes for luggage to go from plane to baggage claim.  Customers can walk to baggage claim in one minute, resulting in 7 minutes of impatient waiting.  Complaints are high.

What do you do?

Conventional wisdom says, speed up the process.  Use more automation.  Hire efficiency experts.  Hire more baggage handlers.

But according to a recent New York Times article, this isn’t what they did in Houston’s airport.

Instead of speeding up how quickly bags arrive in the claim area, they slowed down the speed at which passengers arrived. They moved the arrival gates so that they are further away from baggage claim. This increased the walk time so that waiting in the baggage claim area was reduced to almost nothing. Complaints also dropped to almost nothing.

This innovation highlights a key point in innovation:  solve a pain.

In this particular case, the pain is the waiting.  The walking is not perceived as painful.  It is productive time.  Waiting is not.  Disney does a great job of helping people pass the time in their amusement parks while waiting an hour to get on a ride.

I wrote about the concept of the perception of time back in 2006.  I talked about how time passes at different speeds when stuck in traffic versus when moving quickly down the highway.  I started the article with a favorite quote of mine from Einstein…

“When you sit with a nice girl for two hours, it seems like two minutes. When you sit on a hot stove for two minutes, it seems like two hours.”

Time, and hence customer satisfaction, is relative.

Traffic is pain.  Waiting is pain.  Unproductive time is pain.

I wrote several articles on the power of solving a pain, versus creating a gain.

One article is about financial investments: people will take massive risks to protect what they have because loss is perceived more powerfully (pain) than a financial gain.

I also wrote an article on why a blizzard was the key to the ATM’s success: although people were not interested in the convenience of cash machines, when a blizzard prevented them from getting money elsewhere, ATMs became an overnight success.

When innovating, look at the pain points of your customers.  Be sure to look at the perceptions of pain, not your guess as to the pain.

Waiting is more painful than walking.  Unproductive time is more painful than busy time.  Driving slowly on back roads, even if it is takes longer in the end, is perceived as being a better option than sitting in traffic on the highway.  Financial losses are felt more deeply than financial gains.

Design your business to reduce the pain.  The perception of pain.

P.S. I provide other examples of the pain/gain concept in my book “Best Practices Are Stupid.”

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How Goals Kill Luck

August 17, 2012

Richard Wiseman is the author of many great books, including The Luck Factor.  I’ve spoken with Richard on several occasions, and we share a similar perspective: a myopic focus on goals can reduce how lucky someone is.

Dan Pink (an endorser of my Goal-Free Living book, and author of A Whole New Mind and Drive), interviewed Richard for Fast Company magazine. Here is a small excerpt…

What are some of the ways that lucky people think differently from unlucky people?
One way is to be open to new experiences. Unlucky people are stuck in routines. When they see something new, they want no part of it. Lucky people always want something new. They’re prepared to take risks and relaxed enough to see the opportunities in the first place.

But the business culture typically worships drive — setting a goal, single-mindedly pursuing it, and plowing past obstacles. Are you arguing that, to be more lucky, we need to be less focused?
This is one of the most counterintuitive ideas. We are traditionally taught to be really focused, to be really driven, to try really hard at tasks. But in the real world, you’ve got opportunities all around you. And if you’re driven in one direction, you’re not going to spot the others. It’s about getting people to have various game plans running in their heads. Unlucky people, if they go to a party wanting to meet the love of their life, end up not meeting people who might become close friends or people who might help them in their careers. Being relaxed and open allows lucky people to see what’s around them and to maximize what’s around them.

Much of business is also about rational analysis: pulling up the spreadsheet, running the numbers, looking at the serious facts. Yet you found that lucky people rely heavily on their gut instincts.
Yes. You don’t want to broadly say that whenever you get an intuitive feeling, it’s right and you should go with it. But you could be missing out on a massive font of knowledge that you’ve built up over the years. We are amazingly good at detecting patterns. That’s what our brains are set up to do.

Read the entire article

Be sure to read my article from yesterday which provides mathematical “proof” for why a focus on specific goals can reduce luck.

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How to Increase the Probability of Your Success

August 16, 2012

My next article in the series on success

You can mathematically increase the likelihood of your success when you are not obsessed with specific goals or approaches to achieving those goals.

Let me illustrate this with the famous “birthday game.”  Here’s the extremely short version…

If you have a room of people…

  • for there to be a 50% chance that two people have the same birthday – any birthday, you need only 23 people in the room (matching day and month)
  • for there to be a 50% chance that two people have a specific (e.g., April 25) birthday, you need over 600 people in the room

These probabilities show that the likelihood of ANY event happening is quite high (e.g., any birthday), while the likelihood of a PARTICULAR event (e.g, a specific birthday) happening is quite low.  This gives us insight into how to improve our odds of success.

If you are wed to things working out in a particular way, it requires a large number of events coming together in a specific way—just like looking for a particular birthday. Keeping an open mind and “increasing your peripheral vision” will improve your chances.  What particular outcomes are you seeking that may be probabilistically limiting? Do you have a particular view of how your business should look? Do you believe that a particular business partner is the key to your success? Are there specific clients that you feel you must land? Are there particular milestones you must hit? Are there technologies you must develop?

The more specific you are, mathematically speaking, the less likely you are to find hidden opportunities that may look different than your expectations.

If you want more details on the birthday mathematics or on how to better leverage the concept, read my American Express article on the topic.

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Never Trust An Expert

August 13, 2012

Given my recent articles on success, I felt it was appropriate to dig up an old one (from 2007) which talks about how we never really know what made us successful….

A couple of nights ago, I gave a presentation to a group of eager individuals who are either launching or advancing their speaking careers. During our 90 minute discussion, I gave dozens of tips and techniques for growing their business.

At the end of the evening, one attendee asked, “What is the MOST important tip?” I thought about this for a minute and replied, “I don’t know.”

Although this answer may seem like a cop out, it is in fact the truth. No one REALLY knows what made them successful. More importantly, they have no idea how others can replicate their success. They may be able to look at a series of events that led to a particular outcome. But most likely the “most important tip” is something completely different than what is seen on the surface.

Last year I attended a “book marketing” conference led by a well known author who has sold millions (and millions) of books. His promise was to provide steps and tools that made him successful so that others can also reap the rewards. Thousands of people have tried his formula over the years and as far as I can tell, none have come even close to his level of success. Those that achieved some level of success did so by riding on the coat-tails of this author, leveraging his name and network. [NOTE: leverage is one key to success, so this is not necessarily a bad formula]

I am not implying that these experts are misleading or malicious. Not at all. The issue lies in our inability to find the correct correlations between cause and effect. Too many hidden factors play a major role – ones that we might never consider or notice. Most experts use anecdotal evidence to support their conclusions. “It worked for me and a few of my buddies, so it should work for you.” This is faulty reasoning. Maybe the expert’s “10 Steps to Financial Wealth” were not the true causes of their success.

There are many, harder to measure factors that often play a substantial role. Your attitude plays a larger part than you might think. Your Rolodex of contacts can be a huge part of the equation. Being in the right place at the right time has launched many businesses, including Microsoft (see my Sliding Doors Success article).

Or sometimes plain old dumb luck is the real cause. Fortunately, in the case of luck, people can create their own luck. Studies show that those who are less goal-oriented are luckier than “goalaholics” because they are open to possibilities outside of their narrow goal-focus. [NOTE: This is a significant part of my new research on innovation and success.  Stay tuned.]

So the next time someone makes a suggestion – or someone tries to sell you their 5 steps to success – be skeptical. Although it may be great advice, it may also be (unintentionally) misinformed counsel. They may not know the REAL cause of their success. Then again, this blog entry is my advice to you – so it too should be taken with a grain of salt.

P.S. Notice this entry is entitled, “Never TRUST an Expert” and not ‘Never LISTEN to an Expert.” There is a lot that can be learned from others.  

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Books in Portuguese

August 10, 2012

Best Practices Are Stupid is now available in Portuguese.  One version is for Brazil and the other for Portugal.

 

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Sliding Doors Failure

August 10, 2012

In an earlier article, I discussed the Sliding Doors Success model.

It is worth noting that there is a corollary to this: The Sliding Doors Failure model.

Just as an opportunity can appear that can change your life for the positive (read the Sliding Doors Success article), one event can derail a lifetime of achievement.

There are two stunning and recent examples of this.

Joe Paterno was loved and revered by so many during his coaching reign at Penn State.  He was the winningest coach of all time.  But by turning his back on some horrible events, Paterno will now be remembered for something other than his coaching.  His statue has even been removed from the Penn State campus.  He is no longer the hero he once was.

Jonah Lehrer, the author of the best selling book, “Imagine: How Creativity Works,” is facing a similar situation.  After a meteoric rise to fame and accolades, he has fallen from grace because (amongst other things) he fabricated some quotes in his book.  As a result, his book was pulled from bookstores by the publisher, and he resigned from his position at The New Yorker magazine.

There are many other examples of people who spent a lifetime doing great work, only to have that taken away due to one mistake.

Arthur Andersen learned that even large companies can suffer the same fate.  They went from being the world’s largest professional services firm, to a practically nonexistent company after the Enron scandal.

Winning at all costs is eventually a losing proposition.

As you and your organization grow, make sure you are working with integrity.  One mistake can erase a lifetime of great work.

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Turning the Screw

August 8, 2012

This is the 5th article in a series on alternative paths to success

I was once told a story while working at UPS. At its Louisville, Kentucky, air hub, hundreds of thousands of packages go through the sorter every day. This is a critical operation that is supported by a complex conveyor system. If the conveyors go down, packages might be late and significant time and money can be lost.

One day, the story goes, the conveyors stopped working for some unknown reason. The engineers tried to restart it, but to no avail. So they called in the best conveyor consultant around.

He walked into the package center, looked around for about three minutes, walked to the far end of the building, opened an electrical box, turned one screw, and to everyone’s delight, the conveyors started running again.

The package center manager was thrilled, and asked the consultant for his bill.

The consultant thought about it and said, “Ten thousand dollars.”  The manager was shocked, “Ten thousand dollars for five minutes work? Give me an itemized bill.” So the consultant pulled out his pen and wrote a two-line invoice.

First line read, “$500 — turning the screw.”

The second line read, ” $9,500 — knowing which screw to turn.”

He got his fee.

Not all activities have the same impact.

  • Some activities have little or no (or possibly a negative) impact on your success and business.  Eliminate these.
  • Other activities have a linear impact.  They will improve the business, but not radically.  Delegate these.
  • The activities where you want to focus your energy are those that create exponential returns; the things that give you incredible leverage.  Focus your energies here.

Look at how you spend your time.  Are you getting an hour of return for an hour’s work?  If so, that is not good enough.  Get creative.  Find ways of creating massive results with little effort.

We will continue to explore this concept in the next blog entries coming soon.

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Why Chuck Hates Me

August 6, 2012

This is the 4th in series of articles about alternative paths to success; ones that go beyond the traditional approach of goal-setting and years of hard work.

Back in 1987, I was working for Accenture (then Arthur Andersen’s management consulting division).  I was working on a large project with over 200 people.  I had been out of college for a little more than a year, but was given a leadership role on the project.

I shared a desk with a guy by the name of Chuck.  He too had one of the few leadership roles.  One day, Chuck turned to me and said, “I hate you.”

I was a bit taken aback, but I understood.

Chuck and I knew each other in college.  We had similar majors and took many of the same classes.  But there was one big difference.  Chuck busted his butt for 4 years and got a 4.0 GPA.  I, on the other hand, became social chairman for my fraternity, focused more on developing my leadership skills, skipped many of my classes, and had a less than stellar GPA.  Although I am not proud of my academic performance in college, I did learn a lot of valuable skills that were not taught in the classroom.  These ultimately proved to be more useful than memorization and test taking.

Although Chuck and I took very different paths, we ended up, at least back in 1987, in the same place.

One of the things I have learned over the years is that the amount of effort you put in rarely equals the result you get.

Some people can work 80 hours a week and only make incremental improvements in their careers.  Others can work only a few hours a week yet achieve incredible results.

How hard you work is not correlated with how successful you are.  I will continue to explore this in the next blog entry (coming in 2 days)…

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