Straight To The Point

Can You Wait A Minute or A Year?

I met a woman yesterday who consults with people on how to eat SOUL food: seasonal,  organic, local.  Another one is a time management consultant who teaches people how to pack less into their days and get more done. It got me thinking about how many small business owners have adopted publicly held companies' values and made short term decisions the norm rather than the exception.

Here are some great short term decisions: Calling 911, cleaning up a spill in a store, calling someone into work when another calls in sick.  There are plenty more but you get my drift.

Here are some terrible short term decisions: Cutting out advertising for the next month because sales were a little short, using personal money to cover payroll the second, third and fourth times, hiring a loser because if he could get your sister to marry him he must be the greatest salesman in the world.

When did we start - in the business sector - measuring ourselves against an illusory time frame? It started in the early 1980s I think.

In my own small manufacturing company back then we looked at our monthly sales figures, payroll, etc. We knew within a couple days of the end of the month if our balance sheet looked odd or our numbers from the year before were better or worse.  But we didn't cut sales and marketing because that was a yearly plan put into place in January.  We were somewhat seasonal so we tweaked it but we didn't spend any significant time deciding what to do "this month".  We didn't lay people off at the drop of a hat.    We weren't so obsessed with cutting fat until we reached muscle and started to bleed. Really, a thing of beauty. Why?  We didn't have to report to anyone but ourselves.

This made for some very interesting discussions in one of my MBA classes.  Even then people were obsessed about making bigger and bigger profits even if it meant enjoying it less.  They could not even imagine that profits were not necessarily the end all and be all.  (I never finished my MBA for that reason.)

Still, making sure profits were achieved was just a quarterly issue.  We always knew who was publicly held either by cutting prices to get sales from us and requests to return product we had sold to others.  We laughed at the absurdity of having to measure one's self in three month increments. On the other hand Gordon Gecko's declaration that "Greed is good" struck a nerve in the minds of people who saw Wall Street and all its machinations as the guide to wealth.

Then, at the end of the Eighties came the internet.  My teenage daughter cannot fathom watching a war (the Persian Gulf conflict under Bush 41) on a computer screen at 2500 bps during the day at work.  Or that people envied my ability to do that.

Time started to feel less scarce as computers became not just data collectors but interpreters as well. I didn't need three weeks to do all the analysis for the annual sales meeting.  I needed one day to download all the data to spreadsheets.  Then I spent a day looking them over and making recommendations. The third day I discussed them with other people in the company.  By the next week the sales people had their territories information on large floppy disks they could look over before our meeting.  It saved time for me, for the sales people and for the restaurant that held our dinner meeting. 

Saving time became addictive.  No need for a secretary to type my letters.  I could do it myself on Word.  No need for a secretary to take calls.  I could do it myself with a cell phone (back then it was connected to my car but I digress).  No need for a secretary to open the mail.  Most of the orders came in and invoices went out by fax. 

Accounting knowledge became far less important as software became more sophisticated. No need for dedicated accounts receiveable or accounts payable clerks. I saved time by looking at the books on my own terminal.

No need to stop for lunch.  I could fax in my order and have it delivered.  No need to call someone for a quote.  I just looked them up on the computer.

I literally saved myself so much time I could not get everything done.  I went to time management classes at 6:30 a.m.  It was so burdensome, this saving time, that I threw MyTime against the wall. (Caveat: It was a great system just not for me.)

Websites became so numerous that I couldn't use my program to surf a new site every 30 seconds so I saved time by bookmarking the ones I liked.  Audiobooks saved time because I could listen on my commute rather than sit down for an hour or so.  Fast food drive throughs and salad bars at Kroger provided sustenance.  Microwaves became reasonably priced and actual cooking was no longer absolutely necessary. Thank goodness because who had time for that?!

It spilled over into the way we thought about our companies. What about today? What about today? What about today?  New business owners became as obsessed with short term goals as public companies were.  What if your company had the exact product or service venture capitalists might support?  They only cared about profits and how fast you could gear up to get them.

We forgot why we went into business.  Or we went into it for the wrong reasons.  We lost our entrepreneuralism.

This is a remarkable moment in our economic history.  It has forced us to remember that short term gains are not sustainable in the long term.  It has forced us to look at large publicly held companies and accept that we do not need to emulate their methods to be successful in our own.  It has given us an opportunity to take time and figure out what is best for our selves and our businesses.

Let's decide to take quality over quantity whether it's decision making, eating or customers.  By doing so we can change the world. 

Thinking Through With Paper And Pencil

I have rediscovered the BCG matrix.  I used it a million years ago in grad school but it became less important with software that would "give" me the answer.  But lately I've come to the conclusion that whether I am using it for personal decisions or business strategy the matrix forces me to make difficult choices easier to avoid when data is buried in spreadsheets.

The matrix is pretty simple. Place your products, services or whatever based on their market shares and growth rates.  (I did one once on all my friends' boyfriends.  Please note: One person's opinion of the appropriate quadrant is not necessarily shared by others.  Keep that in mind when doing this as a collaborative effort.)

Here's a brief overview of what each means.

Dogs are low market growth, low market share.  I never liked using this designation because it just seems disrespectful.  Dogs may be new products or services that arrived too late to take advantage of a market.  More commonly, I think, they are products that were once stars or cash cows but the market has changed.  Either way someone usually has an emotional connection (our first product, the CEO's favorite, etc.) that keeps them in the mix.

Having said that there can be value in dogs.  The Long Tail was first coined by Chris Anderson in an October 2004 Wired magazine article to describe the niche strategy of businesses that sell a large number of unique items, each in relatively small quantities.  If you have a small quantity or not a lot of time this is not for you.

Cash Cows have high market share, low market growth.  I love cash cows because these products just make money without a lot of effort.  On the other hand there isn't a lot of room to expand the market.  It has either moved on or it's saturated.  Ever notice how your cell phone supplier is more eager to tell you how appreciated you are?  It's because the goal now is not getting new customers, it's keeping them.  They talk in terms of retention not new sales.  Makes for a lot better customer service.

Stars are fab.  They are high market share and high market growth.  It's the category that gets people excited.  Two things have to happen.  One the market has to be ready to embrace the product/service and the market has to be large enough to sustain the embrace for a long enough time to make a profit, sell the company or attract investment. Hold on too long and they become dogs.

Question Marks (also known as Problem Children) keep business owners up at night.  They currently have low market share but high market growth.  They have great potential but at what cost?  If you can get a powerful marketing and sales program they might become stars or cash cows.  On the other hand they might just drain resources from other great ideas.

Mind Tools notes on its website pages for the Boston Matrix: Be careful about the lines - there's nothing magical about them or their position.  There may be very little real difference between a "Problem Child" with a market share of 49% and a "Star" with a market share of 51%.  It's also not necessarily true that the line should run through the 50% position.  As ever, use your common sense.

Take the time to make a chart.  Get out a pencil and put your products or services or professional skills in each slot.  Ask a trusted friend or mentor to do one separately.  Compare them.  Decide what you will do with each entry.  Invest more, invest less, do nothing, say good-bye?  Regardless of how you handle each one you will emerge with a better of idea of who you are and what you do.

How Do You Know Unless You Look?

I designated the last twenty days of November to hammer out the final strategy and tactics I was going to use to reach my goal of having the biggest, best business video website on the internet. 

I am exhausted.  I joined extra social networks, looked at a million websites, ordered books and ezines and it's only been four days. But how do you know who and what you need and where to find it?  How do you know when to stop? 

I stopped today - looking for external experts to reinforce my expertise in my own mind.  Yes, I had to look for many hours four days straight.  What I discovered was I had something to offer.  All I have to do is put it out there, market like crazy and expect great results.