What’s the Pattern Here?


 

Have you ever noticed how things work in cycles with observable patterns? As someone whose strength is observing and seeing patterns, I find it helpful to know that these patterns exist and to see if this awareness generates some form of opportunity. This may be because I have that entrepreneurial instinct that draws out this intrigue, but whatever the case, they seem to pop up everywhere.

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You can find these patterns in the stock market, football teams, the weather, time to market saturation for products, and a multitude of other things. For example, look at the stock market over a long period of time. You will see that over time the price to earnings ratio (PE) tends to expand and contract over a longer time horizon than the normal business cycle.

From 1903 to around 1920, you should notice a contraction of PE from around 24 to 5. From 1920 to 1930, the PE surged from 5 to 28. From 1930 to 1950, it contracted back to 9. From 1950 to 1969, it expanded from that 9 to about 23. Then from 1969 to around 1980, it dropped back down to 7. From 1980 to 2000, you should see it surge up to 42 (can you say bubble?). We have been on a PE contraction since then. The sad news, as you can see from the pattern, is that a long uptrend does not typically start until the price to earnings ratio falls into the single digits.

Being a University of Tennessee football fan, I observe the patterns there also. As fans, we have high expectations every season, which makes it difficult to see the patterns. However, you can go back to the 1960s and see a good decade for the UT program. The 1970s were tough. The 1980s bounced around with big ups and downs. The 1990s were great, and the decade of the 2000s has been sad. You would think from this, the current decade will improve.

If you listen to the news, you would think we have been on a warming trend from the past 100 years. Actually, we have been on a warming trend since the late 1970s. In the mid-70s, all the major news stories reported how the average temperatures had been dropping since the 1950s, so we would all starve to death because of crop failures. Last winter, we had snow on the ground in Knoxville, TN for over three weeks. Typically, snow only stays on the ground here for a couple of days, and this was the first time since I started living here in 1981 that this has happened. Could this be the start of something new?

Finally, notice the trend of how breakthrough technological inventions saturate the market. In a general sense, the automobile, television, and radio each took about 30 to 40 years to fully saturate the market. The VCR took at least 15 years. The internet reached saturation after around 8 to 10 years, and it only took Facebook around 3 years once it opened up to everyone.

This pattern is obvious, and we will see new products, services, and software tools reach full penetration within a year in the near future. This results from how connected everyone has become, and this connectivity continues to increase. I would say that at some point in the near future, products and especially software will reach full market saturation within weeks and even days.

What patterns do you see around you? Will these patterns affect your business? Are there opportunities in those patterns or just the satisfaction of knowing this is just one of those cycles and will eventually change?




SWOT your Way to Focus and Flow!


 

When you run a business, various opportunities often present themselves and persuade you to run off in different directions, pulling you away from your focus.  This happens to me frequently, and I find it difficult to avoid being sucked down a path that sounds like the next great avenue for huge success.

Thankfully, my partners, EO Forum,  or my team usually slap me back into reality.  Taking a closer look at what you are doing can also help you discover if these opportunities are worthy or if the current focus is best.

As my success coach Steve D’Annunzio asks:  Where have the most profitable clients come from over the past 3 months?  What is the common theme across those clients and what is it you are providing that makes the clients happy to pay you?  What is the common size of these clients?  What category are they generally from?  What are their locations?

If the answers point towards the companies paying me the most profit, why would I not want to go get more of the same?  Why would I not want to build on this synergy and find a way to get the most scalability possible by giving the clients what they love while also getting paid at the most profitable level?

Steve tells me that when those things happen, you are in “FLOW.”  When it’s right, you notice it in the areas of time, energy and currency because they will all be jamming together like a great jazz band or orchestra.

As we close in on the end of the year, many businesses are looking deeper at what they are doing and may be considering these same types of questions.  Another beneficial exercise that can help to open your awareness to all the options is the basic Strengths, Weaknesses, Opportunities, and Threats or SWOT analysis.  We utilize this every quarter to challenge our business and ensure we are considering all possibilities and are not about to get eaten by something sitting around the corner waiting to pounce.  Remember the Software Monster.

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We found that we spent too much time gathering data from all the participants for SWOT, leaving us little time to really dig into the data we had pulled out.  To fix this, we built a tool that has helped us ramp this up before we start our planning meeting and has given us much more time to go deeper.  This tool, called MeetingHabits, can now be utilized for free, and it may stay that way as we study how it benefits us.  We would also like hearing how it helps you if you would like to share your experiences.

As you work to focus more on bringing the most value to a core group of clients that will put you in the best FLOW, what are you doing to make sure your business is harmonizing the best tune?

 




3 Keys to Business Greatness!


 

If you asked me the business authors out there who I think provide the most value, I would have to say Jim Collins and Peter Drucker. Both of these guys have provided huge insight to the business community on how to run a successful company. Like most businesses, we at Efficience are starting the year formulating strategies and goals to make forward progress toward our destination, and reading Collins’ and Drucker’s material has always been good preparation.

Peter Drucker is legendary and has since passed on. I credit him for giving me the insight in the early ‘90s to see how the information revolution would provide the future with value and to develop a mutual fund called IPS Millennium Fund in ‘95 to participate in this information revolution.

Jim Collins opened my mind to creating a company that had a big vision with a BHAG (Big Hairy Audacious Goal), a heart with a core purpose, and personality with core values. So, when Collins came out with his new book, I was anxious to see the new awareness that would come from his decade long research.

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In Great by Choice, Collins and Hansen set up an awareness of how three key areas acted as the common themes in the companies that have dealt with uncertainty, chaos, and luck as well as why some companies thrive despite all this. What they found was very interesting and contradicts common thinking about great companies. They discovered what they call 10Xers (companies that have been beating the marketing and comparison firms by at least 10 times in stock market performance) were not more visionary, more bold, more risk taking, more innovative, or more creative than the comparison companies.

They were more of 3 things:

1) More Disciplined

2) More Empirical

3) More Paranoid

This book is very eye opening! When we think of a company that has had great success, we usually assume it has done so with a new break through idea, a new patent, or by taking a big risk that is paying off. However, this was not the case. Of course, to a point, these companies were innovative and creative, but they became really great by finding what works through empirical evidence, testing that out, and then being super disciplined to get it done. They also worried excessively about what was out there that could change the game for them.

I will discuss each in more detail in next week’s blog. Happy New Year, and I wish you much success this year being worried about what is coming, gathering evidence that your ideas work, and implementing them with vigorous discipline.

 




Entrepreneurs Don't Care, Just Like the Honey Badger!


 

I kept hearing and seeing the slogan “The Honey Badger Don’t Care” in email jokes, on television, and from various people. You may have seen it during the college National Championship Game between Alabama and LSU. You may have seen the signs referring to LSU player #7 Tyrann Mathieu as the Honey Badger.

This all started because of a video called “The Crazy Nastyass Honey Badger” by Randall (strong language; use viewer discretion). Given its popularity, you have likely seen it by now. If not, this video is really funny, but more importantly, it is a very intriguing story from an entrepreneurial perspective.

 

First of all, the video simply shows footage of a Honey Badger with voice over commentary by Randall that has gone viral (almost 34 million views). This has landed Randal a spot in the cartoon movie as well as a stuffed animal being sold with his voice. He also has a Honey Badger game app and has landed a book deal. The Honey Badger may not care, but Randall did. He cared enough to go out and take advantage of the opportunity he created for himself, turning something fun into what appears to be big money.

As I think about the slogan “the Honey Badger don’t care,” I see a mindset that an entrepreneur sustains when he or she is getting started. The entrepreneur don’t care . . . that he is unfunded, lacks experience in the marketplace, doesn’t have a team in place, doesn’t have any customers, is told he can’t do it, is not smart to quit his job, doesn’t have another source of income, and he still sees an opportunity and goes out there and makes it happen.

Now, you may be thinking that this was just a stroke of luck, and that this guy’s lottery ticket got called up. No, I don’t see it that way just as I don’t see the success of most entrepreneurs as luck. The real story is that Randall’s dad was a camera man for Mutual of Omaha’s Wild Kingdom, and since the age of seven, Randall would narrate the films for the family when his dad would come home from these exotic trips. They would go to the zoo frequently, and he would tell stories of all the animals at the zoo. His big success came from living what he loved to do!

This is the case with most of us! We live in such a way that our passion and love for the things we do puts up in the path of opportunities that have not yet been seen, and then those that decide they really want it “honey badger” away working toward success.

What are you passionate enough about that that you don’t care what gets in your way and won’t let anything stop you?




Opening Doors is Priority One!


 

Awhile back, I shared that we were working with a door-opening company called Kopp Consulting. Caryn Kopp and her team assist other companies in finding new clients by having a team of former senior management professionals use Kopp’s secret sauce to get you appointments and allow you open door3to do your thing.  What an informative experience!  Working with Kopp helped us design and focus our message to best tailor it to our core clients, and they helped us connect with even more clients and businesses.

How do they do it?  I am not privy to all their tricks of the trade, but I know they are paid to get appointments, and they do.  They know what to say to get past the screeners and to get appointments set.  They helped us gain access to numerous companies that we had not been involved with before.

I just came across an article shared on LinkedIn that suggests you should have people for cultivating leads, a separate team for closing the sales, and then another group to service them. Having professionals with strengths in different areas of the sales cycle is supported in this article.  To read it, click here.

The main objective of any business is to connect with the people who have the problem that their business’ product or service can solve.  This is the life blood of any company.  It keeps everyone employed, keeps bills paid, and with the right strategy and management, keeps profits flowing to expand and help even more people.

Yes your heard that right Occupy Wall-Streeters.  Most companies want to help others.  If they didn’t help their customers, people would not buy what they have to offer.  Living in a free county, and I hope it stays that way, no one is forced to spend their money with a company.  In fact, some companies have people so excited to spend their money there that they will stand in line for quite a while.  Think Apple, Starbucks, and that popular restaurant that you go to when another nearby sits empty.

The goal for any businesses is to keep their customers happy, so they not only keep coming back for more but also tell others.  When your company is newer, is not well known, or hasn’t gone viral, firms like Kopp can be just what is needed to get you in the door.

 




Energizing for the New Year!


 

As this year ends like all the ones before it, we strive to go into the New Year with a fresh outlook and usually one or more resolutions to improve our lives. I often ask others around me about their resolutions and usually find that at least one always has to do with improving health. For an entrepreneur whose world is filled with constant changes, ups, and downs, health and energy are key to pushing forward.

We often hear about how much time we need and how there are never enough hours in a day and so on. We cannot add time. We all have the same number of hours in a day. The level of effort and energy we put into that time can be changed. Much is being written about our need to manage our energy and approach our day and schedule with an energy focus instead of a time focus.

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The book “The Power of Full Engagement” discusses this in great detail. It says, “Managing energy, not time, is the fundamental currency of high performance.” It also emphasizes the importance of having positive energy rituals that are highly specific routines for managing energy. A ritual is a carefully defined, highly structured behavior that is in contrast to will and discipline, thus it requires pushing yourself. A ritual pulls at you.

When we have an energetic lifestyle, it translates into better brain output and greater productivity. This happens the most for me when I focus my energy on the things that are most important to my work or business. Our brains are made up of about 78% water and have greater output when we are hydrated. When we wake up, we are usually dehydrated, and our bodies need water to kick us back into full performance. Some say to drink a liter of water when you first wake up. I drink that liter of water along with a protein drink and feel so much better once I get the water and protein into my system rather than loads of carbs that will make me crash.

My son Tony and I work out together and have been doing the P90X DVDs for a couple of years to give us an overall strength, cardio, and flexibility workout. The power yoga and stretching workouts are vital for overall energy and flexibility. I just gave Tony the new P90X2 DVDs for Christmas, and we will start doing this series of workouts together to step up our conditioning and energy levels. This is one of my New Year Resolutions to up my game, so I can bring the highest level of energy possible to my work and company.

Good luck to you on whatever resolutions you create for yourself. As I wrote in last year’s blog, I experience the best results to my resolutions and goals when I create a habit or ritual around them.

By the way, if any of you are doing your yearly planning around this time and would like a free tool to help, go to www.meetinghabits.com and check out our SWOT tool that we use to pull out all the ideas from the team and make our meetings more productive.




What are your dreams?


 

What an interesting week!  Last week, I traveled to New York City to participate in the Entrepreneurs’ Organization Injected Campus event, which brings the regional EO Forums together.  We met in lower Manhattan to be close to the New York Stock Exchange.

This year during our event, the NYSE opening bell was rung by InvenSense, a company that makes the motion possible in the Wii and in smartphones.  InvenSense was launching their IPO and was going public.  I had always wanted to be there in person to see the opening bell, but it also made me think of my own dream of being up there to ring the bell with the IPO launch of my own company.  That evening, it felt a little closer as my friends on the Global EO Board got to be on stage and ring the closing bell!  WOW!  Click here to see the video I took of the opening bell.

Along with going to the Stock Exchange, we enjoyed a wonderful evening dining and socializing at the Harvard Club in Times Square.  We also heard from three great speakers and spent time with EO members that have really invested time and resources into the Entrepreneurs’ Organization, thus getting a lot in return.  This entire event was extra special! 

Matthew Kelly spoke to us at the NYSE for one of the events.  He does business consulting and wrote the book The Dream Manager.”  His talk resonated deeply with me, so I wanted to share it with you.  Matthew told a story about one time when he was playing golf.  One of the guys he was playing with seemed really down, and when Matthew asked him about it, he mentioned he was having business problems.  After digging, Matthew finally got him to reveal that he has a janitorial company with more than 400% turnover.  This man was spending all his time hiring people and had no time to work on business strategy.

Matthew inquired, “Have you asked the employees what is the problem?”  The man had not and wondered if they would even know, so Matthew said, “Let’s find out.”  They conducted a survey and realized that transportation was the main problem.  They decided to get buses to help the employees, and the business changed significantly.  The turnover rate dropped to just over 200%, so they did the survey again.  This time, they discovered the employees had dreams and desires.  They decided if the employees were helped to realize these dreams, then their respect and loyalty to the company would grow.

They hired a full time dream manager to discuss dreams with the employees.  The dream manager assisted them in creating plans and processes to put them on the path to realizing their small near-term dreams, such as purchasing a laptop or planning a vacation.  Additionally, He helped them work towards their long term dreams of buying a house or getting the proper education toward a new career. 

This approach resonated with me because I am of the type that is always strategizing about working towards the things that make the future better.  I have often asked my team what it is that they are working for and want to have in their lives as they increase their incomes.  It is astounding how the culture of a company can change and how your employees’ perception and loyalty toward their employer improves!

I am working toward my dream of building a company that can go IPO.  What are you doing to invest in the lives and dreams of those around you?




Hiring Employees with Value


People generate the most value and are your greatest asset when running a business.  Our society runs on knowledge and information.  We are not a bunch of cogs lined up to push metal through a machine in order to output something better on the other side.  Even these types of jobs now require knowledge to operate these intricate computers and technology. 

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Did you know that the unemployment rate for college educated individuals is less than 5%?   Compare that to the average unemployment rate of 9-10% or the 14% or more unemployment rate for those with a high school education or less.  Today’s economy needs knowledgeable workers, and they are a rare find.  We are searching for knowledgeable workers to fill roles in software architecture, business analysis, and software solution sales and have discovered they are not easy positions to fill.

 

We utilize a 13-step process, which includes a three hour CIDS interview from Topgrading.  CIDS stands for Chronological In-Depth Structured interview and looks at a candidate’s history starting from his or her education and going through each job position, identifying highs and lows along with strengths and weaknesses.  This gets to the meat of what a person was hired to accomplish and how they do in that role as confirmed by the person to whom they report. 

 

Even with this detailed process, we don’t always get it right.  Like software, people are very complex and don’t necessarily gel well together.  Getting it right from a technical perspective may not mean we have it right from a cultural perspective.  I hear war stories and have even experienced it myself.  When business cultures clash, all parties involved suffer.

 

As a leader, I must stay focused and be willing to endure because I believe the most important role of the leader is to bring the right team together.  As Jim Collins says in Good to Great, “Get the right people on the bus, and then with the right people figure out where you are going.” 

 

What do you do to make sure you have the right people on the bus?