The Real Power of Purposeful Tangents

March 22, 2014

mcbride2In a blog entry of mine last year, I discussed the concept of “Purposeful Tangents.” (if you’ve not read it, I encourage you to do so)

In that article, I mentioned I was going to take a class with master magicians. Well, I just completed the training, and it was beyond my expectations.

I felt like a kid at Disney World. I had so much fun learning magic.

But I learned something even more important.

Magicians take advantage of visual blindspots to create their illusions. They know how to “trick” the brain through misdirection.

When I give a speech, I take advantage of cognitive blindspots to create my experiences. The experiments I conduct on the audience demonstrate how the brain is designed for survival, not innovation. People are “tricked.” Their beliefs are challenged.

The typical keynote speaker has little or no audience interaction. And the interaction they have tends to be limited to questions. Although this process engages the audience, it does not provide the epiphany gained through hands-on activities.

Why does this matter?

Over the last 20 years, I’ve learned a massive amount about speaking from fellow keynoters. But something was always missing.

During my magic training, I discovered that my style is more akin to that of a magician than a keynote speaker.

The element of fully engaging – and tricking – an audience, was never part of my speech training. Over the past 20 years I taught myself how to perform these types of interactions. While watching master magicians in action, I learned some new methods.

No matter what we do or how good we are, there are always opportunities for improvement.

But if we only learn from people who are like us, we will ultimately limit our growth potential.

What is a similar discipline to your work? When you discover your purposeful tangent, read books on the topic, take training courses, or simply observe experts in action.

You may, like I did, find a new tribe that will help you take your craft to the next level.

P.S. The picture is of Jeff McBride, the magician with whom I did my training.

Your Customers Don’t Value What You Think They Do

March 11, 2014

oscarOne week after starting my speaking business a dozen years ago, I met with the owner of a speaker’s bureau in London to discuss representation. In the meeting he expressed serious interest. So much so that a few days later he called me about a potential gig.

The call came to my mobile phone as I waited for a train. It was difficult to hear him due to the noise on the platform.  However, through the ruckus I could hear  “What is your speaking fee?” I was ill prepared. I honestly had never thought about it. I did some quick calculations and pulled a number out of the air. “Thirty Five Hundred” was my response. He thanked me and hung up.

Later that day he called back. I quickly realized that he too must have had a hard time hearing me during our previous conversation, because he asked me, “Was that Thirty Five THOUSAND dollars or Thirty Five THOUSAND pounds (at the time about $60,000)?”

I stumbled for a moment, debating how to answer. I then sheepishly responded, “Thirty Five HUNDRED DOLLARS.” Again, he thanked me and hung up.

I spoke with him a few weeks later and learned I did not get the gig. I asked him why. He told me that when I said my fee was $3,500, I was not the caliber of speaker he thought I was. The person that was hired received $35,000!

I learned a powerful lesson that day. Your price often determines the PERCEPTION of your credibility. Underpricing can often imply low value.

We see this in all areas of life.

For one study, subjects were given a number of wines for tasting and were told their price. Some of the wines were given to tasters more than once, with a different price tag each time.

What did they find?

The same wine, when given a higher price tag, tasted better.

Surprisingly, according to fMRI scans, the pleasure centers of their brains lit up more when a wine was more expensive, even though the “taste” centers did not. The body knows the wine tastes the same, but it is enjoyed more when it is more expensive.

Just as price drives the perception of value, perception can also drive price as well.

Many times, the cost of something is driven by what we paid in the past – even when the rules have changed.

When “bricks and mortar” video chains were in existence (like Blockbuster), the cost to rent a movie was $3. Interestingly, this is the same price you pay to rent a movie from iTunes. Although production costs are significantly less for downloadable/streaming videos (there are no manufacturing/duplication and distribution costs), the price remains the same – and often higher.

What we’ve paid in the past often drives what we are willing to pay in the future.

A hardcover book might cost $25. The cost of eBooks are often the same (the Kindle version of my latest book is $14.39; to get the hardcover version on Amazon.com is only $1.50 more). Although it happens on occasion, it would be difficult to charge a couple hundred dollars for a book. But if I took the content from my book, reformatted it, put it in a 3-ring binder, and maybe added an audio CD, people would now be willing to pay $200 for this “system.” A book, regardless of the content and the value it can deliver, is only worth so much in the eyes of buyers.

The point is, price is often determined by what we paid in the past for similar products/services, not by value it creates. “Form” can drive perceived worth.

So, what do people actually value? I did an experiment a few years back to find out. I called it PW3 – “Pay What We’re Worth.”

In determining the fees paid to a professional speaker, traditionally the speaker sets the rate before the work is done.

With PW3, as an experiment, I turned this model upside down. Instead of quoting a standard rate, the client would determine my fee after the work was done.

The plan was to send the client a blank invoice after I gave a speech, and they would pay “what they thought I was worth.”

The only stipulation was that we would have a conversation about value up front. I wanted to learn the value they got from previous speakers. How were the concepts reinforced after the presentation? How were ideas implemented? How was value measured?

Companies were unable to define value, at least in terms of tangible results. In fact, in nearly every situation, when I asked them how they would determine what to pay me after an event, they said, “Um, I guess we’ll pay you what we paid the last speaker.” In fact, with 90 percent of my speeches, the client asked me for my standard fee and just paid that.

How do you determine what you are willing to pay for goods and services? Is it based on what you paid in the past? Is it determined by how much money you have in your bank account? Or is it determined by the “real” value you receive?

As Red Adair, the oil well firefighter, once said, “If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.”

In the past, if I hired freelancers based primarily on price, the quality suffered. I paid dearly in terms of iterations and rework. Something that could have been completed in a week, might take 2 or 3. Instead of the work being done with limited involvement on my part, these amateurs required a lot of handholding.

I now value my time more than anything else. Hiring talent requires less support from me. Each hour I spend helping someone figure something out, is one less hour I have to invest in something that can substantially grow my business.

In my world, I see so many mediocre speakers. Event planners with financial constraints sometimes hire based on fee rather than quality. But the cost of the speaker is quite small compared to the time invested by the attendees. 100 people sitting in a room for an hour is a big payroll burn. But the bigger cost is the opportunity cost. Each hour they spend listening to a presentation that does not provide real value, is an hour they can’t invest in growing their business.

Or, if you hire a consultant, the real cost is not their fee. The real cost is the impact of their advice on your business. Most consultants who give you their two cents are overcharging. If you implement their recommendations, you could waste time and money. Or worse, you could negatively impact your business.

As Oscar Wilde once said, “a cynic knows the cost of everything and the value of nothing.” Using this definition, most buyers are cynics. When you recognize this, you can be both a better buyer and a better seller of goods and services.

Two Email Productivity Life Savers

February 7, 2014

email productivityI am always looking for ways to make my life simpler.

I’ve found two that really seem to keep my inbox clean.

  1. Sanebox
  2. FollowUpThen

Both work with any email client or operating system (as far as I know).

Sanebox

Sanebox scans incoming mail and decides if it is important or not. If it looks like spam, a newsletter, an autoresponder, a mass mailing, an order receipt from Amazon.com or anything like that, it quickly removes it from your Inbox and puts it to a separate @SaneLater folder. Of course you can train it. If something is spam, you can move it into  @SaneBlackHole and it will never show up again. If something is incorrectly categorized as less important, you simply move it to your inbox and next time all emails from that person will arrive in your inbox (and vice versa). This keeps my inbox VERY clean. I can stay on top of the important messages while reviewing the less critical ones less frequently. This runs “in the cloud” so there is nothing to install on your computer, tablet or phone.

FollowUpThen

FollowUpThen is an awesome service. Once you set up your account, you simply forward (or bcc/cc) an email to timeframe@followupthen.com and you will get the email back at that date/time. For example, if I get an email that I don’t want to work on now, but want to deal with in a week, I forward it to “1week@followupthen.com.” And I delete the original email. A week later that email shows up again in my inbox. If a prospect wants me to follow up with them in a month, I respond to them and in the same email I bcc “1month@followupthen.com.” And again I delete the original email. My inbox is no longer a list of items I need to deal with in the future. I forward the email and delete it, knowing it will arrive back in my inbox at the requested date (and yes, you can set specific dates and times). My inbox has never been cleaner. And, the customer service support is EXCEPTIONAL!

In addition, I use Spamarrest. I’ve been using this for MANY years. If an email is received from someone that is not on my “whitelist,” they get an email back indicating they need to confirm their identity. Although they only need to do this once, it is an inconvenience for people, so I don’t love this approach. I only use it on 2 older email addresses that are overflowing with spam. I don’t use this for my main email address because I want it to be easy for prospects, clients, or friends to reach me.

It is easy for email to suck up a large portion of your day. These tools have made my life so much simpler.

What do you use? Please share your best email productivity tools.

P.S. I know some people set up an autoresponder on their email saying “I only check mail once a day so call if you need to reach me.” This is an ok solution, but given how much business is conducted over email, this is not one I like. I want to be “easy to do business with.”

Continue Buying Those Lattes

January 22, 2014

latteThe way you ask a question will have a profound impact on how you answer it.

This is a fundamentally critical concept in the world of innovation. If you are working on a problem/opportunity, changing just one word can influence the types of solutions you get. I’ve discussed this concept extensively on my blog.

But did you know that the way you frame your New Year’s Resolution (if you set one) will have a huge impact on the actions you take towards the achievement of that goal?

According to a survey I conducted a few years ago, over a third of people set financially related goals each year.

For many this means, “save more money.”

Paradoxically, the goal – “save more money” – can have unintended consequences that might leave your bank account with less money in the long run.

When we want to save, we look at where we currently spend money, and how we can reduce those expenditures. For many, their daily stop at Starbucks is one of their guilty pleasures.

As a result, there are many financial advisors who will tell you to “stop buying lattes.” If a latte costs $4 a day, you could save about $1,500 a year by cutting them out. That’s a lotta lattes!

But cutting out your lattes requires a lot of willpower. And as it turns out, willpower is not an unlimited resource.

Let’s examine some scientific research on this.

Imagine individuals tasked with solving a complex problem. In the room where they are sitting wafts the aroma of freshly baked chocolate chip cookies. On the table in front of them are two dishes: one with the cookies and another with radishes.

Although the combination of the olfactory and visual stimulation made the cookies irresistible, some individuals somehow managed to use their willpower to stay clear of the gooey chocolate.

Kudos to them. They win. Right?

Well, as it turns out, the people who resisted the cookies performed significantly worse on problem solving and other tasks. The willpower it took to resist the delicacies robbed them of their ability to perform a variety of activities. Researchers call this “ego depletion.”

What this implies is that the energy it takes to save $4 may in fact be robbing you of your skills required to make even more money.

What if, instead of focusing on saving $4 a day, you put your energy into finding ways of making an extra $10, $100, or even $1,000 a day? What if you used your latte as fuel for making more money?

There is of course nothing wrong with saving money. I am certain that all of us could do a better job and would benefit from it. But it is important to recognize there is a hidden cost.

As an entrepreneur, I would rather spend money on the guilty pleasures that energize me, help me stay focused, and in the long run enable me to make even more money.

P.S. Of course there are health implications of too many lattes. At 200 calories each, this may add an extra 30 pounds to your waistline each year. Other than bacon, my guilty pleasures are usually healthier (or at least lower calorie) alternatives.

The Danger Of Being Too Controlling

December 18, 2013

If you want to grow your company, you’ve got to learn to let go of any task that doesn’t set you apart from the competition.
***
 Give-up-controlI recently spoke at an event where attendees were mainly small-business owners and solopreneurs. One of the points of my talk addressed the need to “innovate where you differentiate.” In other words, any activity that doesn’t set you apart from the competition is something you should consider delegating or outsourcing.

Unfortunately, for a small-business owner, this means giving up some level of control.

At the conclusion of the event, an attendee approached me and asked, “So how do you get small-business owners to give up control when this is something they typically don’t want to do?”

Who’s In Charge?

This was an understandable concern. After all, the reasons to maintain control and avoid delegation are plentiful: There’s not enough time. To do it right, you must do it yourself. You enjoy the task.

To a large extent, the desire for control is driven by ego. Let’s face it; you need a bit of an ego to start your own business–it’s certainly not for the faint of heart.

However, there’s another important issue at play here: the “pain/gain” equation. The concept is simple: People first want to eliminate a pain or prevent a loss before they will be interested in generating any kind of gain.

To illustrate, here’s a simple consumer example:

Think about the last mattress commercial you heard. Most say the same thing: “Buy our XYZ bed, and you’ll get your best night’s sleep ever.” Yawn. Boring. Chances are, the commercial will put you to sleep long before you run out to buy the bed.

Now consider this actual radio advertisement. “If your mattress is 10 years old, it weighs twice its original weight due to the dust mites that accumulate over the years.” Ouch! This simple statement creates a pain, and it makes me want to replace my mattress immediately. Let’s face it, pains, whether real or created, drive action.

Pain Vs. Gain

In business, when we focus on overcoming a challenge that’s perceived as a threat, such as unfavorable regulatory changes or unexpected competition, the pain motivates us to eradicate the problem immediately. Conversely, when we focus on overcoming a challenge that’s perceived as an opportunity, we’re less inclined to take action. If you apply this same concept to control, it makes sense why most business owners struggle with relinquishing it.

Most people think about the opportunity or gain associated with giving up control: increased free time, the flexibility to engage in more meaningful activities and the ability to sleep in. It sounds logical. It sounds desirable. Yet this isn’t enough to motivate them give up control.

Why? Because, on the flip side, there’s the pain or threat associated with giving up control: increased errors, reduced quality and upset clients. If people are wired to minimize pain, it makes sense why entrepreneurs are convinced they’re best served by doing everything themselves.

Learning To Let Go

So how can you address this dilemma? One way is to rethink the situation: Don’t think of giving up control as having the opportunity for more free time. Reframe it to focus on the downside or threat of not giving up control. Answer these three questions when you’re considering the pros and cons of giving up control:

  • What is the cost associated with not giving up control?
  • What will you lose by not giving up control?
  • What is the pain that will be created if you don’t give up control?

These questions will help refocus your attention on where it needs to be to create action—on the pain associated with doing everything yourself.

And this technique can be applied to any behavior you may wish to change. By focusing on the cost of not changing it, you’re more likely to take action.

To reframe your view, write down all the costs associated with not giving up control. Create a long list—be creative, but be honest. You have to truly believe in those pains. Keep those pains front and center, and look at them every day. Talk about them with your team. Also discuss how you can minimize the risks associated with delegating work to others.

Only when the perceived pain associated with not giving up control is greater than the pain associated with giving up control will you be able to make a shift.

This article originally appeared on the American Express OPEN Forum - please comment there

Don’t Confuse Popularity with Value

October 22, 2013

popularA technology expert friend of mine just started blogging. We discussed which topics should be the focus of his articles. He told me that he recently read about another technology blogger whose most popular blog entries (as measured by tweets, comments, and Facebook likes) were in fact the least technical topics.

My friend wondered if he should also write less technical blog entries.

My response: Don’t confuse popularity with value.

Why did my friend want to write? Because he wants to sell more of his technology consulting services. Which articles are more likely to do that? Articles on technology. Although rants about philosophy and life may appeal to a broader base of readers, it may be less likely to entice them to buy.

When I write about Goal-Free Living, a topic that is about having a more enjoyable and successful life, everyone can relate. As a result these get read and shared a lot. But my less popular innovation articles are the ones that get me hired for speeches and consulting. Of course I continue to write (to a lesser extent) blog entries that I think will be popular as it attracts more readers to my work – some of whom may be interested in hiring me someday. But I focus on demonstrating the expertise I want to be hired for rather than shooting for something with mass market appeal.

Look at your business. Do you focus on what is popular/cater to the masses? If so, you may be spreading yourself too thin and doing yourself (and your customers) a disservice.

Instead, look for opportunities to focus on what sets you apart from everyone else and  is in the sweet spot of why people buy from you.

Being popular does not mean you will have a successful career. Business is not a popularity contest.

 

When You Hire on Price You Pay For It

October 8, 2013

calculatorRed Adair, the oil well firefighter, once said, “If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.”

Over the years, I’ve learned this the hard way.

When I’ve hired freelancers based primarily on price, the quality suffered. I paid dearly in terms of iterations and rework. Something that could have been completed in a week, might take 2 or 3. Instead of the work being done with limited involvement on my part, “amateurs” require a lot of handholding.

I now value my time more than anything else. Hiring talent requires less support from me. Each hour I spend helping someone figure something out, is one less hour I have to invest in something that can substantially grow my business.

I’ve found that truly gifted individuals can work magic. Their long-term value is significantly greater than those who are less skilled.

In my world, I see so many mediocre speakers. Event planners with financial constraints sometimes hire based on fee rather than quality. But the cost of the speaker is quite small compared to the time invested by the attendees. 100 people sitting in a room for an hour is a big payroll burn. But the bigger cost is the opportunity cost. Each hour they spend listening to a presentation that does not provide real value, is an hour they can’t invest in growing your business.

Or, if you hire a consultant, the real cost is not their fee. The real cost is the impact of their advice on your business. Most consultants who give you their two cents are overcharging. If you implement their recommendations, you could waste time and money. Or worse, you could negatively impact your business.

When investing time or money in anything, consider the total cost.

There’s on old Yiddish proverb, “He who marries for money earns it.”

In the world of business, I believe there is a corollary. “He who hires based on price pays for it.”

Do Less, Make More

September 5, 2013

dolessmakemoreIn the September issue of “Speaker Magazine” (published by the National Speakers Association), I have a 3-page article. It is called: Do Less, Make More: Work Only One Hour a Day by Mastering Leverage.

Here’s the beginning…

I’ve been trying an experiment. For the last six months, I’ve been working, on average, only one hour each day on my speaking business.

This wasn’t easy at first given my tendency to sometimes work more than 100 hours a week. However, what I eventually learned was that I could be insanely productive by simply shifting my mindset. Long hours aren’t necessarily required to lead a successful career.

The fact is, although there are an unlimited number of things that speakers can do to grow or improve their businesses, there is a point of diminishing returns. The upside on additional effort decreases significantly beyond this point.

THE L-WORD: LEVERAGE

To successfully work only one hour a day (or at least a greatly reduced amount of time), you need to master the concept of leverage.

Leverage is something that gives the greatest return with the least amount of energy. We typically view our work as linear. An hour of work gives us an hour of results. But what if an hour of work could yield 100 hours (or more) of results? Instead of diminishing returns, you get exponential returns.

This is leverage.

Each morning I ask myself, what is the one thing I need to do today? What is the one thing that will create the most value? What is the one thing that only I can do? That is the activity that I engage in for the day, delegating, deferring or eliminating everything else. The key is to focus on activities that create leverage and maximize results.

The remainder of the article discusses why you should “stop telling people what to do,” how to “multiple your results by first dividing, how to leverage your speech, and how to create new revenue streams.

Read the rest of this article

How To Work One Hour A Day And Have A Thriving Business

September 3, 2013

Do you run a small business? Or does your small business run you?

As entrepreneurs, there are countless things we could do to grow or improve our businesses. It’s easy to keep busy 100 hours a week. I know—I’ve done so countless times throughout my career. Unfortunately, I’m not the only one who has convinced himself that working long, crazy hours is a must if you want to find success.

The reality is, however, that there is a point of diminishing returns. Although more work might produce greater results, the return on the additional effort decreases significantly. 

We Work Too Hard

There are many reasons why people work so hard.

Although it’s sometimes because there is simply too much on our plates, more often than not, we work around the clock for other reasons. Do any of these sound familiar?

  • You feel like you’re a slacker if you don’t work all of the time.
  • You worry that if you don’t complete every task, you may lose business opportunities.
  • You work nonstop because it allows you to avoid dealing with difficult issues in your life.

Or maybe there’s some other reason. Regardless of the reason, most business owners work too much.

What if you were only allowed to work one hour a day?

I’ve been experimenting with this concept for nearly a year and have been relatively successful at keeping my time invested in my current business to about 20 hours a month.

Why am I doing this? There are two main reasons:

1. It forces me to focus on what’s really important. Each morning I ask myself, what’s the one thing I need to do today? What is the one thing that will create the most value? What is the one thing that only I can do? And that is the activity I engage in for the day. I delete, defer or delegate everything else.

Instead of keeping myself busy and climbing to the top of the “S” curve, I stop at the point of diminishing returns (the star on the chart below). The Pareto principle might state that 20 percent of the effort provides 80 percent of the results, but whether it’s 20 percent or 40 percent is not important. The key is that you find the point in your business where more effort starts producing fewer results—that’s your “star” point—and only you can decide that.

Will you extract 100 percent of the potential value? Probably not. But is squeezing out an extra 20 percent of value really worth 4 or 5 times the effort? That’s your choice. I could work 10 times harder and only increase my income 50 percent.

The key is to focus on activities that maximize results.

work-one-hour-shapiro-open-forum-embed

2. It frees up time to create new business. If you spent only 20 percent of your time extracting 80 percent of the revenue from your existing business model, this gives you 80 percent of your time to do something different.

You could, of course, spend your free time taking a vacation or spending more time with family. You could engage in work that you believe is more meaningful. You could volunteer and give back to society.

Or you could create a new S-curve.

Instead of squeezing out those few extra drops from your current business model, build a new business or new business model that leverages your past success and creates entirely new revenue opportunities.

With the extra time created, I’ve been working on a new book that targets a completely different market for me. I’m working on a TV show concept. And I’m creating new products that leverage my intellectual property.

These items take upfront effort. But when they’re done and have built up momentum, I will spend less time on those businesses, freeing me to create new revenue streams.

Encourage Creativity and Freedom

The purpose of working one hour a day isn’t to encourage laziness. And I’m certainly not suggesting you do a mediocre job, as this will kill your business in the long run. The purpose is actually to encourage creativity. This philosophy creates time/space for you to create—to create new opportunities, to create new revenue streams, and to create a better life.

Even if you don’t believe working only 60 minutes a day is possible, give the thought process a try. Use the “hour a day” mantra as a mental exercise. Determine what you might do if you only had an hour. Even if it ends up taking you four hours, it’s still better than the 10 you were previously investing. Now, what are you going to do with all that extra free time?

This article originally appeared on the American Express OPEN Forum

Every Idea Can’t Be a Good Idea (transcription)

April 5, 2013

Here is the transcription for my Monday Morning Movie

Gambling and InnovationThe other day I was at Mohegan Sun, which is a casino about an hour and a half outside of Boston. And while I’m there I love to speak with the gamblers because each of them believe they have a system. They believe they have a method to ensure that they win. And they’re all convinced they’ve won more money than they’ve lost.

Well, of course, this is not true. Casinos are not in the habit of giving money out to people. The house always wins. We know this to be true.

Why do people believe that they win more than they lose? It’s something called confirmation bias, and confirmation bias is the brain’s processing mechanism by which it finds evidence to support its belief structure. Whatever you believe, you will find evidence to support that, and you will subconsciously ignore anything that refutes your belief structure. That’s why we can have such powerful beliefs in spite of evidence to the contrary.

It’s very important for innovators to understand this concept, because every person is convinced they have a billion dollar idea. They’ve got the next big idea that’s going to change the world and make them rich. But what happens is their confirmation bias only allows them to see the evidence that supports their belief that they have a great idea. Their brain doesn’t allow them to see all the evidence that proves it’s actually a bad idea.

There’s a reason why 70 to 90 percent of new innovations fail. It’s not because these aren’t well intentioned, motivated, or excited people. But they’re people who, like all people, have confirmation bias. As a result they will subconsciously ignore the evidence that proves that what they think is a great idea, is in fact not such a good idea.

As innovators, as entrepreneurs, as individuals it’s important to recognize this. Now how do we counterbalance this?

It’s difficult for us to find evidence that refutes a strongly held belief. So what we need to do is, when we’re working on something, partner with a devil’s advocate. Find someone who’ll be the contrary point, somebody whose sole purpose is to find evidence that proves your idea is a bad idea.

Now it may be hard to hear what that person has to say. You will want to reject what they have to say. But if you can open up your mind and be willing to hear the contrary points of view, you may be able to refine your product, service, or idea, and come up with something that’s better. Or you may learn it’s just such a bad idea and you shouldn’t invest the time and money in this one. Find a different one.

This is really important for all organizations (big or small) and individuals.

We know that every gambler doesn’t win more than they lose. And we know that every idea is not a great idea.

The question is, “What are you going to do to make sure that you invest your time, money, and energy in the things that have the highest likelihood of paying off?”

Next Page »