Do you have a great Big Hairy Audacious Goal (BHAG), core purpose, core values, painted picture, and hedgehog strategy? These key aspects of a company’s vision drive it to become everything it is striving to be. Do you have yours? In my experience, most do not. Why? Because it’s hard! After many years, we at Efficience are solid in all of them except the hedgehog, which we constantly struggle to pin down. However, that is the way it’s suppose to work; it takes time and an iterative process to get it done.

How fast you progress depends on how fast you continue the iterative process. The more time you spend bringing the key stakeholders who share your vision together, the more often you will cycle through a process of discussion that allows you to ask questions, debate the answers, make decisions, and then, with experience, decide if you’re going in the right direction.

In his book “Good to Great,” Jim Collins discusses this and refers to the stakeholders as “the Council.” He shows a circular flow, starting at the top with the questions guided by the three circles followed by dialogue and debate, then executive decisions, and finally ending with autopsies and analysis. This is for the hedgehog strategy, but it can be used for any areas of your vision or values. We all know that a circle can have many revolutions to ensure you are rock solid in your decision.

Verne Harnish coaches and exposes midsized growth companies through his very successful consulting firm. He states that page 114 and 115 in Collins’ book are the two most important pages in any business book out there. That is a pretty strong statement, but I agree with him. Your company’s success will come from the decisions your council will make, and if they have a process like Collins describes in the book, then you will get better decisions. This is especially true if you make more turns of the circle at a faster pace.

Some companies may get their council together annually, some quarterly, and others monthly. The ones pushing to speed things up meet on a weekly basis. Even when you push to get these answers, sometimes it just takes time. On average, it took the great companies about 4 years to come up with their hedgehog concept, which took them from good to great.

Do you have a process that vets out your vision? If you are looking to put together your council, then page 115 in “Good to Great” will give you the characteristics of a great council to help as you pull yours together. From my experience, getting the vision that feels right is not easy, so keep the wheel spinning and good luck!

Check out this picture from my trip to India. This is my office manager Mukesh and his family.

Umm . . . are you thinking, “Whoa, my car doesn’t seem quite so small anymore?”

Now look at this picture:

You may speculate, “Wow! This family must have had an emergency! They all had to jump on the bike and race off to the hospital or wherever on an impromptu moment!” Well, that is not the case. In fact, this is the way most of my team and their families get around all the time. They all load up on the bike and ride off to whatever activity, school, or work commitments they have.

I have contemplated this often as I travel the world and have reflected on how we perceive our lives, our work, our homes, our incomes, our appearance, and the world around us in general. It comes down to a simple thought: It’s all relative!

I will venture to guess that when you saw that picture, your judgment hat flipped on, and, as I did, you thought, “You mean they let their kids drive around on those bikes without helmets? That is crazy!” Well, yes they do, and in their world it is commonplace. Therefore, it isn’t crazy to them relative to their world.

We define the poor in America as individuals or families whose income is under some threshold determined by the government’s Department of Health & Human Services. In 2012, for a family of four, that threshold is $23,050. Is it really poverty when, even at this level, you have a phone, washing machine, TV, stove, refrigerator, and a car? I repeatedly hear that over 2.5 billion people in the world live on less than $2 per day, which would be the equivalent of approximately $730 per year. That is over one-third of the world population. Isn’t what we call “poor” in America VERY relative to what others experience and consider being poor?

During my trip I visited Kalki, a center that Efficience and my team support in Pondicherry near our office. Kalki takes care of girls that have been abandoned because they may have been abused in some way. In this culture, when a girl has been abused, she is often discarded in the streets. At Kalki, they are not only provided shelter but are also educated and given entry level jobs, due to arrangements with community businesses. Many have excelled.

Relative to the joy and passion I having in starting a company and having a team in India that works to make us all money, the feeling of helping out those that really don’t have anyone else is fulfilling beyond measure.

Capitalism is improving living standards in India. Being an entrepreneur is allowing me and my team to help change the lives of over 200 people along with the ability to share our success with Kalki, and that is a purpose beyond words.

Looking at the world and realizing that most all things good and bad are relative to something better and worse help me keep perspective as I live my life. How do you see things being relative in your world?

As an entrepreneur, I consider myself a pretty optimistic person.  I look to the future and see a rosy picture filled with visions of a lifestyle that incorporates my dreams.  I will sacrifice now acknowledging that I will see better times ahead.  Knowing that the little steps of progress I see in my company is leading to something better really gets me excited, and the optimism overflows even more!  Have you ever thought this could be a little risky?  I didn’t, but let’s explore this some more.

When I was preparing for India, I knew I needed some good reading material to entertain me on the 24 hours of travel time I would have each way.  I went to Barnes & Noble to search and came upon a really good book called “Thinking, Fast and Slow” by Daniel Kahneman.    Daniel won the Nobel Memorial Prize in Economics in 2002, and with this book he aimed to “improve the ability to identify and understand errors of judgment and choice in others, and eventually in ourselves, by providing a richer and more precise language to discuss them.”

 I have found this book to be very interesting and mentally stimulating in the same vein that I did with “The Black Swan,” which you can read more about here on my blog.  I have not finished the entire book yet but was very intrigued with a chapter called “The Engine of Capitalism.”  Here, Daniel discusses the advantages of optimism and how it leads to happier, healthier, more resilient people.  The optimists are the inventors, the entrepreneurs, and the political and military leaders, which he points out are not the average people.  They get there by seeking challenges and taking risk.

Most interestingly, he discusses how an optimistic bias can blind an entrepreneur from seeing the full risk of an undertaking or the decisions they make.  In study after study, Daniel shows that optimistic people were not capable of predicting or generating the results they expected.  What do we do with this overconfident optimism?  Daniel suggests one option would be to do a “premortem,” and I see another option of firing “bullets.”

The premortem occurs when the organization has almost come to an important choice but still before the big decision.  They gather a group of people involved in the assessment, and they write a brief history imagining that they implemented the decision and it died, so now they have to imagine they are looking back and come up with reasons why it might have failed. Daniel says this does two things.  First, it overcomes group think when it appears a decision is moving forward.  Second, it opens up the floor for knowledgeable individuals to express their doubts when they may have been suppressed by the leader before.

I think there is another way to handle overconfident optimism, and that is to fire bullets, as Collins discussed in “Great by Choice.”  When you test the market reaction by looking for empirical evidence with small, low risk exposure (firing a bullet), your confidence comes from real world market feedback.  Only then do you fire the big cannon ball without worrying that your optimistic bias got in the way of a venture that could have been devastating to your company.

I know my over eager optimism has gotten in my way and has been costly. How are you managing yours?

Side note on the 4 Billion Customers’ blog last week:  I read David Meerman Scott’s blog this week, reinforcing the mobile expansion to all parts of the world.  He was in the jungles of Central America and experienced tribal people with no running water or electricity using mobile devices to better their world.  Check out his blog.

So much of what we do in business is about the things we need to get done.  I need to write a report.  I need to send e-mails to my clients.  I need to create a budget.  I need to put a plan together for the next quarterly meeting.  On and on it goes with stuff we need to do in order to make progress in our business.  Nothing is wrong with this, especially when it creates progress.  Progress has been determined to be the number one motivator of both business owners and employees.

However, we really ought to find the things that we need to STOP doing!  It is the one thing we, myself included, often neglect to do.  What is it in my business or my world that I need to stop doing?  Business guru Jim Collins and coach to the Fortune CEO Marshall Goldsmith emphasize this topic frequently.  They ask, “What is on your STOP doing list?”

When we want to create value, we want to DO something.  At times, we can create value by stopping the things that are wasting our time, distracting us from important work, and keeping us from clients and other people vital to our business. 

There are various things I find myself doing that I should stop.  I should stop having my e-mail open all day long because I get distracted from what I am working on every time I receive a new e-mail.  I need to stop not writing the important things on my calendar because time management is event management.  I write my blog when I happen to get around to it rather than putting it on the calendar and letting the calendar manage my events.

I also need to stop looking at things once, leaving them, and then coming back to spend more time on them.  I will read an e-mail, leave it to do something else, and continue this process by moving on to something else again instead of taking care of it right then.  This is a major waste of time, and I need to STOP it.  When something comes up, I should get it done now, move it to the calendar to do at a later time, delegate it to someone else, or delete it and move on.

What do you need to STOP doing?

Think about that!  If you had access to 4 billion customers, how would that impact your marketing, your strategy, your vision, your opportunities, and your profit potential?  Well it’s coming, and I see it happening right before my eyes.

Let me back up for a moment and give you some perspective.  As I write this, I am at my office in Pondicherry, India.  I started Efficience with my partners April and Rich back in 2004 and came to India shortly after to set up the office.  We started with one full time team member and one intern and then quickly added five more.  We have now grown to 40 bright, enthusiastic, hardworking men and women.   

When I started coming to India, none of the team members had cell phones.  Cell service existed here, but the phones were expensive, and most didn’t see the value in having one. This continued for a few years.  Now all our team members, from the lowest to the highest paid, have cell phones.  At this point, eight of them have smartphones, and I see the rest upgrading in a year or so.  I can see this new global customer base growing right before my eyes.

You may remember reading the Software Monster blog I wrote about how new software applications, Software as a Service (SaaS) tools, and apps are eating up the legacy business of a huge number of mainstream industries.  This was based on an article that Marc Andreessen, founder of Netscape, wrote in the Wall Street Journal.  Now, he has another article out that deals with the expansive opportunity that putting a handheld computer or communication tool connected to the entire world is offering by bringing customers to your doorstep.

In a CNet article called Marc Andreessen Predications for 2012, Marc discusses how smartphones are now in the hands of about 2 billion people in the developed world, and in three to five years they will be in the hands of 6 billion.  Can you imagine what to do with 4 BILLION New Customers?  I have been advocating the power of connectivity since the early ‘90s, and this adds an exponential growth factor to that, which compounds the potential.  If you read any futurist thinkers like Ray Kurzweil, it looks like we are much closer to that Singularity moment.  You can check out his book here.

Marc ends the article with how opportunities and growth wrap around smartphones saying, “Local merchants, like local restaurant owners, are going to have a smartphone app they can use to dial up customers on demand. Whether that’s from Groupon or Foursquare — any of these companies can do that. A lot of small business owners are going to start running their businesses from their smartphones.”

Your marketplace is not your backyard anymore; it’s not even your country.  We recently launched a requirements gathering tool called Sluice, and it gets 60% of its sign-ups from outside the US.  I can already envision all kinds of great opportunities with this mobile expansion, and we are moving our company in that direction for the potential it offers.  What are you doing to go after the soon-to-be total of 6 billion new customers?

When you look at the aspects of positioning yourself in business, think about where the world is going and where you should be to set yourself in its path.  Easier said than done, right?  How does one know where the world is headed?  The answer is to take in as much information as you can that provides the clues to where things are going.  Back in my investment days, I spent a lot of time reading research reports and other material that discussed future technologies and trends.

I used to follow an internet analyst named Mary Meeker of Morgan Stanley.  She was dubbed the Queen of the Net by Barrons in ’98, and has been there since Netscape did its IPO.  Mary now heads up the Global Technology Research Team, and her latest report has eye opening predictions on the growth of mobile technology.

Meeker’s team predicts that, within the next 5 years, “more users will connect to the internet over mobile devices than desktop PCs” and that this trend will result in new opportunities for a lot of companies.  Her analysis predicts a ramp up with Apple devices at a rate of 11 times faster than AOL and Netscape experienced in the early 90’s.  On the same path, 20% of the world’s mobile phones are on 3G technology.  I remember just a few short years ago when almost none of our team in India had cell phones, but now every one of them does, most with iPhones.

The implications of this in the ecommerce world are huge.  Her report details features like location-based services, time-based offers, mobile coupons, push notifications and more, all creating new opportunities for existing and new businesses.  Even virtual goods sales have shown huge grown in Chinese companies.

According to Meeker, more users are willing to pay for content on mobile devices than on desktops for key reasons such as:

1)      Easy to Use/Secure payment systems

2)      Small price tags with most being under $5

3)      Established storefronts like iTunes that allow easy discovery and purchase

4)      Personalization, which is more important on a mobile device than on desktops

So now that we’re all thinking about where this is going and realizing that over the next few years more of us will be using internet on our phones rather than our computers, what can that mean for you and your business?   What is the opportunity for you to be more accessible to your customers?  Can they connect with you easier or faster?   Are there coupons or location based services you could provide to them?  Is there a mobile product or service that you could provide that would benefit consumers?

This market is already big, but the room to grow and benefit is still vast.  On the flip side, if we do nothing with this mobile opportunity, will we lose a market share of our business?  Don’t be left behind.  

You might be thinking “who is on first and what is on second?” if you’ve had any exposure to the old Abbott and Costello joke.  What I’m actually referring to though is the first thing that should be done in business; finding the WHO that is your client and defining them as descriptively as possible.  To get to second base you do want to find your “What” which is defining your unique offering.

Back in 2007 at the Fortune Growth Summit in Las Vegas, I had the pleasure of meeting and getting to know Robert Bloom (engaging in conversation around Italian food and his love of the country).  Bob is the former CEO of advertising giant Publicis Worldwide. He also wrote a very influential book in the business world titled The Inside Advantage.  Why so influential?  Because it gives you a process to discover WHO your client really is and HOW you are going to sell them WHAT it is that you have to offer them.

This blog I want to focus on the WHO.  A few months after hearing Bob speak and reading his book, I called him up.  I shared that we were going to go through the process of finding our Inside Advantage at our upcoming annual retreat, and Bob so graciously gave us some pointers and even engaged in a call with my team at our retreat to help us through a few stucks.

Your WHO, as defined by Bob, is the core customer most likely to buy your product or service in the quantity required for optimal profit.  Finding the right WHO is important because, as Bob says, “The easiest and most profitable growth will be achieved by adding additional customers very much like your current most valuable customer.”

So how do you find your WHO?  It is a process, and going through it will generate a lot of awareness about your business.  How we did it was by gathering our entire team and brainstorming what our most valuable clients look and feel like.  This is not a demographic exercise…you have to be more specific and know by sitting across the table from that person how they would think and feel about what you have to offer.  With everyone contributing their (brilliant) ideas, we started with a few words and ended with a plethora of words that describe our potential client.

Afterwards we threw out the duplicates and honed in on the top 10 to 15 words that were the truest representation of our core client.  There was a lot of intense debate, but finally we narrowed it down.

Our core customer is:  A technical business leader who has an intense need for a reliable solution (software) delivery partner.

What is your core customer? If you don’t know, Bob’s book is a great place to start helping you find out. 

Recently I wrote two blogs on the Inside Advantage, discussing the Who and What that make up your offerings.  Today I’m going to finish up this topic and talk about the How and the Own It’s of this great strategy.

The HOW part is your persuasive strategy that gets your Who (your core customer) to buy your What (your uncommon offering).  This approach doesn’t void out competition, but it does allow you to stay ahead of them and to stand out from them, a process that is both dynamic and constant.

Bob (author of Inside Advantage) states that there are five hallmarks to a good persuasive strategy:

1. It must be action-oriented, not just a vague promise or sincere commitment.
2. It must define the specific action right up front; the first word must always be an action verb.
3. It must be strategic, not tactical – it must state “what” your product will actually do, not “how” the product will do it.
4. It must be honest and achievable, not imagined and unaffordable.
5. It must be tightly integrated with your definition of the core customer and the reality of your uncommon offering.

A few good examples (the book has several more) of How statements are:

Triaminic

Help Mom select the symptom-specific Triaminic formula that has only the medicine her child needs to get well as quickly as possible.

Juicy Juice

Demonstrate that Juicy Juice is the healthy juice for kids by comparing its 100 percent pure juice-absolutely no added ingredients formulation with the ordinary competitive juice beverage drinks.

After you’ve discovered your Who, What and How, the last part is to define your Own It’s, which are the imaginative acts that celebrate and support your advantage.  The Who, What, and How are your own private awareness that can only be made known to your clients through “imaginative acts” that celebrate your What (your uncommon offering).

Demonstrating imaginative acts might look like this:

A newspaper wants to earn the community’s trust by making it a better place to live, so they offer reader coffee talks with reporters, free article lamination service, advertiser appreciation lunches, recipe contest, new-neighbor showcase or an amateur art contest.

The book provides Own It examples for an upscale tanning salon, a sports and entertainment marketing agency, a prominent wealth management firm and a renowned symphony orchestra just to name a few.  Implementing Own It’s for your company is a great driver to support the message you want to convey to clients and to prove to them that you mean it!

Often times in business we say and write about who we are and what we do, but it’s in the Own It process that we put actions with those words and prove to our clients how we’re different.

Having come from the investment world, I like to stay informed and keep my eye on what people are seeing and thinking about prospects for growth and where the world is going.  For that reason, I always find reading Berkshire Hathaway’s annual report written by Warren Buffett very informative, down to earth, and a balancer to all the hype and exaggeration about how bad things look out there.  The world is not ending, even though it is going to be a hard road for many.

We have been overwhelmed by the reports and video’s coming from Japan.  So many people are carrying heavy hearts for what the Japanese people are experiencing, and will continue to experience as they rebuild their lives and their homes.  We all wish major blessings and much inner strength to all of Japan, and to our EO friends over there, to help them get through these tough times.

A few weeks back, before this tragedy, Mr. Buffet made some interesting comments in his report, which happen to be very appropriate for hard times, be it the state of the US Economy, a natural disaster or personal crises.  He started with commenting on how over the span of his life living standards have increased over 6 times.  He followed with “The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential – a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War – remains alive and effective.”

I agree with this wholeheartedly and know that this applies not just to America, but everyone participating in the world capitalist economy.  Japan dealt with the mass destruction of WWII and nuclear attacks, to become the 2^nd largest economy in the world (now 3^rd).  The Japanese people have shown a very high consciousness deal with this crisis, and with all the human potential they possessed getting it done before, they can do it again. 

Other observations in his report had to do with the future prospects of companies to create intrinsic value.  He focuses on 2 areas, which he calls the “what-will-they-do-with-the-money” factor and “what-do-we-have-now” calculation.  In order for CEO’s to do a good job, they must look at these areas and allocate effectively.  Buffett used the example of going back to 1960 and seeing how Sears and Roebuck or Montgomery Ward’s CEO’s allocated capital compared to Sam Walton.

He also talked about how culture counts, and that CEO’s and directors should act like owners.  Under the Berkshire system they receive “token compensation: no options, no restricted stock and, for that matter, virtually no cash.”  There’s no liability insurance in place either, so if they mess up, they lose their own money as well.

In regards to leverage and debt, Buffett is not a fan of what he calls “financial adventurism”.  A lot of people have gotten rich and magnified their gains through the use of borrowed money, but many have also become very poor in the process.  Having a large amount of debt in your business can be destructive if the timing of maturity or refinancing comes during a worldwide credit shortage.  Buffett is a fan of having lots of cash on hand, this way you always have money to deal with a crisis or take advantage of an opportunity. He keeps at least 10 Billion and usually up to 20 Billion on hand.  Cash is King! 

We’ve made it to first and discovered our “who” in the last blog.  Now it’s time to talk about our “what” that is sitting on second.  To further the discovery into your Inside Advantage, we need to have a cleare understanding of the “what” that you offer to your clients.

What you learn is the difference between what business you think you’re in, versus the business you are actually in.  Many businesses think that the transaction that takes place between them and their client is their business.  For example, if I remove junk, I’m in the junk business.  If I develop software I’m in the software business.   If I sell coffee, I’m in the coffee business. You get the idea.  This perspective won’t get you far according to Bob (Inside Advantage), because it lacks the most important aspect, which is the customer’s emotional connection to your business.

Let’s try turning this around and looking at it from another perspective.  If I remove junk, I am also in the business of giving you back your space.  If I sell coffee, then I am in the business of creating an escape from everyday life, like Starbucks.  I develop software, but we are in the business of helping you gain execution around your goals, streamlining your processes, making your work like more efficient so that you have more time for your personal life.  Make sense?  See how this relates to people’s emotions, and why people flock to FourBucks for coffee?

It’s all about the emotion that is generated from the interaction with what you offer.  Bob worked with L’Oreal, which you would assume are in the business of cosmetics and hair care.  That’s not the case…L’Oreal markets and conveys in everything they do that they’re in the business of helping women look and feel beautiful.

Bob refers to this as an “uncommon offering” because it focuses on the customers’ benefits and emotional experience that are provided by your product or service.

If you’re thinking that your business is just another copy of competitors, don’t lose hope.  Bob says that in every business there is a hidden uncommon offering, waiting to be revealed, and it is just a matter of looking in the right place to find it.  This isn’t a marketing strategy…this must be an honest and meaningful uncommon offering.

We went about discovering our uncommon offering just like we did with our WHO.  It wasn’t an easy process, but was definitely very rewarding.  If you feel you are a commodity, Bob has lots of examples that prove that you can pull out your uncommon offering in any so called commodity.

Our What is: More than a software company, a trusted technology partner committed to ensuring the best customer experience. 

Have you discovered your WHAT?

Note:  I have recently transferred the publication of my blog from Google to HubSpot. You may have noticed a few small changes in appearance, and possibly received a few additional emails that slipped out during migration.  I’m very sorry for the disruption, we’re trying to make this as smooth and painless as possible!