7 Strategies For Running Your Business While Pursuing Your Passions

People often live by the saying: if you want to get something done right, you need to do it yourself. While I have heard people toss this phrase around like a badge of honor, there is no philosophy more toxic for an organization, especially small businesses. Businesses of any size are complex and it is unrealistic to think that a small number of individuals will have all of the necessary expertise. So how do you determine where to focus your attention?

To illustrate an example of what not to do, let’s take a look at how I used to run my own business.

When sales were slow, I would put all of my energy into selling. Once the sales pipeline was full, I would then focus 100 percent of my time conducting speeches and advising clients. This meant, of course, that my sales pipeline would eventually dry up and I would need to refocus on selling once again. At some point, I would realize that my products were no longer innovative—and no amount of selling will increase sales. Therefore, I would shift my efforts and deep dive into R&D mode, creating a new book, speech or product. And the cycle would continue over and over again.

This is what happens when you do everything yourself. It is inefficient. And worse, it is exhausting.

If you are a small business owner, you need to focus on the activities that are at the intersection of your passions, skills and value. That is, what do you love to do, what are you good at, and what creates value for others. For everything else, find suitable partners who can help you execute.

Start by making a list of all of the activities that your business needs to do: new product development, sales, marketing, customer service, order taking, fulfillment, IT, HR, etc. Go to whatever level of granularity feels right.

Then, for each activity, rate its passions, skills and value quotient from low to high: high passion activities are those you love to do; high skills activities are those where you have the necessary expertise to execute effectively; and high value activities are those that are strategic to your business.

The result gives you seven different targeting strategies:

Strategy 1: Target high passion/high skills/strategic activities

This is the sweet spot of your business. “Target” these areas and put most of your energies here. If this is your core business, then you have chosen wisely.

Strategy 2: Outsource low passion/low skills activities

If you neither like nor do an activity well, then outsource it to someone who enjoys it and has the skills to execute it at a higher level. This can be done through bartering, hiring employees, using contractors, summoning friends and family, revenue sharing or other creative collaborative strategies. Employ this strategy regardless of the value dimension.

Strategy 3: Minimize low passion/high skills/strategic activities

If you don’t want your job to become work, you probably want to outsource these capabilities as well. If you are starting out and finances are an issue, you may want to continue doing these activities for now then outsource at a more appropriate time. Given that they are strategic in nature, someone has to do them as they are critical to your businesses success.

Strategy 4: Learn high passion/low skills/strategic activities

If you love doing these activities, then you may wish to acquire the necessary skills. This can be done through a variety of means including training, mentoring or researching. If you anticipate a steep learning curve, consider finding a partner during the learning process who possesses these talents. This will help you move forward while gaining the necessary skills.

Strategy 5: Extend high passion/high skills/tactical activities

If you are passionate and skilled in a particular area and it is not currently strategic (i.e., tactical), consider how you might “extend” that capability. How can you make this a strategic part of your business? How can you create extraordinary value for customers by leveraging this expertise? Perhaps one way is to offer this service to others who are in a similar business. For example, professional speaking is my core business. However, something that I am both skilled at and passionate about is securing business with large corporations. I could offer this as a service to other speakers as a source of additional revenue.

Click here to read the rest of this article on the American Express OPEN Forum

How Aristotle Can Help You Sell Better

[This article originally appeared on the American Express Open Forum]

I was recently in the market for a new car. I had narrowed down my list of prospects and went out for some test drives. At the car dealerships, each sales person immediately jumped enthusiastically into sharing the features and functions of the cars. “It has cruise control, alloy wheels, and a cup holder.” Exciting. Interestingly, the same thing happened when I was looking to purchase some software. The sales person recited a well-rehearsed script. “Our software will allow you to keep a record of every customer.” My reaction: “Um, and so can all your competitors.” In both cases, I was uninspired and unmotivated to buy.

This got me thinking about the selling process.

Your ability to sell is fundamental to your success. Maybe you want customers to buy a product or service that you offer. Or maybe, as a leader in an organization, you might want your employees to embrace the latest management technique to help spur innovation.

Regardless of what you are selling, from my experience, most people sell incorrectly.

When you focus your selling strategy on features and functions, it positions you as a commodity. It is well-known that people buy more often for emotional rather than logical reasons. So why are you starting the sales process with logic?

A more effective way to sell involves a simple three-step process: ethos, pathos, and then logos. Just in case your Greek is a little rusty, ethos, pathos, and logos are the three corners of Aristotle’s “Rhetorical Triangle” – the use of language to persuade. Ethos is credibility, pathos is empathy, and logos is logic.

Selling your ideas using this construction, in that order, leads to more persuasive arguments.

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

Is Your Organization Anorexic?

The President of a $1 billion company once asked me to describe his organization in one word. My response?

“Anorexic.”

The Vice Presidents who sat around the table nodded in agreement.  They assumed that I meant there was no fat left to cut.  That is not what I meant.

Anorexics often have relatively “high” body fat percentages because their lean body mass erodes along with the fat.

This is what many organizations have done.  An an effort to cut costs, in addition to cutting fat, they also cut large amounts of lean body mass.

Are you thinking of further cost cutting?  If so, what are you eliminating?  Fat?  Bone?  Muscle?  Vital organs?  No company in history has ever “cut” its way to long-term success.

Exercise grows muscle while burning fat.

Innovation is exercise for businesses.  It helps grows the organization while also enabling cost efficiencies.

During the depression, Henry Ford said, “A man who stops advertising to save money is like a man who stops a clock to save time.”

The same is true for innovation.  Although cost cutting may be a necessary short-term tactic, it is NEVER a strategy.  If you are in cost-cutting mode, make sure that your cuts target fat and not lean body mass.  In addition, be sure to exercise your organization,  Invest in innovation now and you will be prepared for long-term growth and success.

P.S. I like this photo. It nicely depicts the obsession that many companies have with measuring everything in sight, yet in the end not measuring anything of value.

Is Your Career Doomed? Mine Might Be.

I spend most of my days thinking about the “innovation bell curve.”  The concept is simple, yet profound.

Budget brands will continue to prosper as mid-market consumers move left to save money.

Although premium brands may suffer slightly, there will still be strong demand for high-end products and services.

It is the middle of the bell curve, the “mid-market brands” that are getting squished as consumers move toward greater value and premium brands reposition themselves (a bit more) toward the mid-market customer.

I’ve been thinking about this model as it relates to my career – giving speeches about innovation

On the right-hand side of this model are the “celebrity” speakers.  These individuals include Harvard Business School Professors (e.g., Clayton Christensen), former CEOs of big companies (e.g., Jack Welch), and major best-selling authors (e.g., Seth Godin).  These individuals charge MUCH more than I do.  But they are also a draw.  For large events, having one of the speakers on the platform will get butts in seats.

On the left-hand side of this model are the “vendor” speakers.  These individuals work for large companies who view speaking as great marketing.  These speakers are often not only free, sometimes they even pay sponsorship dollars to be on the platform.  VPs of Innovation for large consulting firms or presidents of innovation software vendors fall into this category.  They have something to sell the audience.

Where does this leave me?  It certainly leaves me rethinking my business model.  Then again, I am always rethinking my business model.

I am continuing to put more energy into books and products like Innovation Personality Poker®.  These move me towards the left-hand side of the model.  You can take me home for a fraction of the cost of one of my speeches.

I am also staying focused on the corporate market (rather than large conferences) because there is still great demand here.  With group sizes of 50 – 300, celebrity speakers are prohibitively expensive.  And given the small event size, the marketing opportunity is not as great for vendor speakers.  My business continues to boom in this area.

Finally, I am shooting the pilot for my TV show in April.  If all goes well, I may be able to re-position myself in the right-hand side of the chart – a celebrity speaker.  But of course, time will tell.

Where are you positioned?  Who is squishing you out of business?  How can you reposition yourself?

P.S. In a previous blog entry, when discussing the innovation bell curve, I talked about the wisdom of Mr. Miyagi in the Karate Kid.  He talks about those in the middle getting “squished like grape.”  I thought you might like to see the YouTube video…

[youtube]http://www.youtube.com/watch?v=3PycZtfns_U[/youtube]

Johnny Cupcakes

What do T-shirts and cupcakes have in common? A guy by the name of Johnny.

Today I spoke at an event for the National Foundation for Teaching Entrepreneurship (NFTE).  They are an amazing organization that teaches entrepreneurship to high school kids, many of whom are in the inner city.

I did a breakout session for about 50 students.  We had a blast.

The keynote speaker was Johnny Cupcakes (that wasn’t his given name, but is the name he now uses).

Ever since he was in high school, he has been an entrepreneur.  He bought candy in bulk at Costco and sold it to students.  He bought gag items (whoopi cushions, itching powder) and sold those – until one student had a bad allergic reaction that landed that kid in the hospital.  He made buttons that were sold in a comic book store.  While there, people gave him various nicknames – Johnny Appleseed and Johnny Cupcakes, for example.  One day, as a gag, he made a Johnny Cupcakes T-shirt.  People loved it.  He made more designs.  After selling them out of the back of his car for a while, he started selling them on the web.  His fan-base grew until the point he opened a store on Newbury Street in Boston.  This is a VERY fancy and expensive retail street.

Johnny is a great role model for the students.  He has never had a drink, never did drugs, and has dedicated himself to his business.  He said his happiest moment was when he could hire his mother as his bookkeeper so that she no longer had to do a job she didn’t like.  When I spoke with him after the event, he said he would never sell the company for any amount of money.  The business is now pulling in millions of dollars per year.

What does this have to do with innovation?  Quite a bit actually.

Johnny has dedicated his life to his business.  He even left college to stay focused in his business.  Most of the money he makes he puts back into the company.  He took big risks.  He signed a multi-year deal for $7,000 a month retail space.  You have to sell a lot of T-shirts to recover that kind of money!  He did a brilliant job with word-of-mouth marketing.  He has never done any advertising. But people line up days in advance when he launches a new line of limited edition T shirts.

And this is his brilliance.

Although he had requests to sell his shirts in all of the big stores, he declined.  He wanted his T shirts to be exclusive.  You can (for the most part) only buy his items from his stores and online.  The stores are AMAZING.  They are done up just like a bakery.  He has been meticulous with the details.  Mock ovens that open randomly shooting off steam.  Cupcake scent.  The doors to the storage room are made from huge 10 foot tall oven doors.  The T-shirts are displayed in bakery cases and refrigerators with the motors removed.  The labels in his T-shirts are in the shape of oven mitts.  The boxes are beautiful and are in the shape of a muffin box. He even sometimes throws random things in the boxes of T shirts ordered online (e.g., a battery, 37 pennies, or a baseball card).

I could go on and on.

In previous articles I describe the bell curve of innovation.  Johnny has been masterful at working the right side of the bell curve.  Exclusivity.  Creating an experience.  Limited editions.  Attention to details.  A conversation piece.  Johnny is not about T-shirts.  He is about a life style, a story, and an experience.

If you are not familiar with Johnny’s work, please visit his store or his website.  He’s an inspiration.

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