One of my favorite authors, Robin Sharma, also coaches clients like GE, IBM, FedEx, and Coke.  He recently released a video called “The 5 Fastest Ways to Recession-Proof your Business.”  Click here to watch the video.  It is over 10 minutes long, so I will summarize for my blog.

1)  You can’t win a race to the bottom.  Many businesses are cutting prices in an attempt to gain more business and market share.  When doing this, you train your customers to see less value in your offering.  Thus, you will continue to charge lower prices.  This often leads to lost profits and not being able to stay in business.  Sharma suggests you should compete on value by offering superior products and services. 

2)  Shift from busy work to work that matters.  Many entrepreneurs spend significant time on the phone, reading and responding to email, and surfing the internet rather than doing the work that really matters.  Fake work wastes time.  Sharma says that not only should you have a To-Do list but also, and more importantly, a STOP doing list.  Also, focus your most productive time on the highest value work.  Studies show that this is usually from morning to lunch.

3)  Disrupt instead of being disrupted.  Sharma uses the example I used recently of Netflix and Blockbuster.  Don’t rest on your laurels and remain still as the world around you changes.  If you are not innovating, evolving, or even adding incremental value regularly to what you are doing, then you risk the chance of being disrupted.

4)  Grow leaders faster than your competition.  In tough times, you can get distracted and scared dealing with various other issues and fail to take the time to train your team.  Double the amount of time and money you use to prepare your team if you want to triple your profits.  Do this, so everyone, in their role, feels like the CEO.

5)  Take the time to develop your 2.O.  What is going on outside of you reflects your mindset.  Bulletproof your mind to deal with the world by bringing to work the right attitude, the right mindset, the right confidence, and the right gratitude to handle the tough times.  Also, have the right physical stamina by eating right, drinking lots of water, and working out.  When you get all of those things right, you will be amazed by the improvements in your business and your life.  

How recession proof are you?

I just got back from a conference for EO Injected Forums in Sonoma, CA where I had a great time with my Forum mates sharing and learning together. It struck me that I talk about Forum lot in my blog, but not everyone has had the opportunity to be in a forum or even understand what a Forum is, so let me tell you about the Forum experience.

My EO Injected Forum biking through wineries in Sonoma, CA

I am in two Forums. One is a local EO Forum that I have been in since 99, which meets monthly. The other is a regional Forum made up of EO members from the South East who have been in EO for more than 7 years, and meets quarterly. 

A Forum consists of anywhere between 6 and 12 people, usually staying in the 8-10 range. The purpose of Forum is to create an environment that is trusting and confidential, allowing a high level of sharing to take place. Members usually discuss issues they’re experiencing, both personal and professional. The issues are presented and discussed in a very organized fashion. Time is allotted for an issue to be presented, followed by a period for questions, then ending with experience sharing by other members. The experience sharing is the most important part of Forum, as the key to helping someone comes from sharing what you have experienced, and letting them know what worked and what didn’t work.

My East TN Forum Retreat in Atlanta, GA

Experience sharing should not be confused with giving advice. There are 2 important reasons why this time is called experience sharing: (1) people don’t like to be told what to do, and by sharing your experience they are more likely to take that information and figure out how to apply it to their own situation, (2) if you take someone’s advice on something and it doesn’t work out, it’s too easy to blame that person who advised you, thereby breaking the trust and respect between the members. I have found that this practice is better for all relationships, and wish I could do it all the time.

Confidentiality and trust are key in Forum, because without them, the level of sharing is not at its highest. Having the right Forum can be life changing and can allow for growth beyond comprehension in all areas of your life. It has done that for me, and sharing with all my EO friends around the world has given me perspective that has helped, changed and allowed me to grow in both small and large ways.

If you have been in a Fraternity or Sorority, you probably have experienced the closeness of a group of people similar to Forum. We take a yearly retreat to bond, get to know each other and to build trust. It has been said that you will talk about 95% of your life to most people. Forum is where you talk about the other 5%.

If you want to know how to set up a forum, how they’re run, and all the details, read Forum: The Secret Advantage of Successful Leaders by long time forum trainer Mo Fathelbab.

Our nation is struggling to create jobs.  You’ve likely heard that regulations have limited businesses’ capital, making it difficult for them to hire or expand.  Have you wondered what types of changes to these regulations would help this economy create more jobs?  Let’s discuss a few key changes that have worked in the past to encourage companies to grow and hire more people.

Many regulations create a big problem for the economy.  Which regulations and policies are stopping us from creating the jobs that we are missing?  Amity Shlaes writes an interesting article in the Wall Street Journal, Three Policies That Gave Us the Jobs Economy.” 

The first game changer implemented a venture capital investment increase from $39 million in 1977 to $570  million in 1978, an increase of 15 times!  What policy changed?  They cut the capital gains tax rate from 49% to 25%.  In the 1960s, the rate had been raised.  What happened then?  As Amity says, “The mid-1970s were a dead period.”   The decrease in the capital gains tax rate generated investments and growth in businesses, which actually brought in more tax revenue for the government.  

The second big policy change adjusted the ERISA law, which regulated pension and retirement plans.  In 1974, they instituted the prudent man rule, which said that pension plans would be violating their fiduciary responsibility if they invested in risky startup companies like Apple at that time.  They relaxed these regulations in the late 1970s, and as a result, more money was invested in small, younger start-up companies that create most of the jobs, as I discussed in an earlier blog post. 

The third major policy change centered around intellectual property rights and clarified how ideas in universities and research departments could be sold or used for commercial benefit.  Subsequently, so many great ideas surfaced after having been pushed aside on a desk or stuffed into a file cabinet simply because, until that moment, no one had the incentive to go out and reap the benefits.

The lessons here are plentiful!  We need to continue to lower the cost of capital transactions and capital gains.  When we take from the people with capital, we always get slow growth or dead periods, not more jobs or government revenue.  Amity suggests the major regulations of today include Dodd-Frank and Sarbanes-Oxley.  We need to change these policies and reduce the burdens they place on businesses. 

Most entrepreneurs understand this instinctively, but we need to share this data with others.  Shout it out loud and clear to the policy makers because this information is vital if their real agenda is to create jobs and improve the economy and not just to maintain power.

A  few weeks ago I had the pleasure of watching a presentation to my local EO Chapter by Simon Mundell Head of Business Development with RESULTS.com out of New Zealand. Simon shared some interesting material about how companies can operate better to get the results they are striving to achieve.

Of all the many things that Simon discusses, one stands out above the others; something so small that most of us tend to overlook its significance. Typically Simon will ask everyone in the group to pull out their business cards and swap with the person next to them. He’ll then ask everyone to look it over on both sides, and see if you can tell what the company does. If you have no idea what the company does, then you tear up the business card and give it back to them.

What does it say about us if we can’t even convey to the people we pass our cards out to what it is exactly that our business does?

Last week, I traveled to Dallas, TX for a guys’ weekend with my son Tony, his close friend Steven, and my brother Mark. While there, we also attended the Bills vs. Cowboys football game. Having grown up in Rochester, NY, I am a Bills fan, which is often difficult to endure. That weekend was no exception. Even after a great start to the season, the Bills lost 44 to 7. Other than that, we had a great time, and the Cowboys’ stadium is off the charts!

You seem to open your eyes more to what is around you when you’re in a new environment, so being a bit more observant, I watched the nonstop mobile usage around me. These observations made me want to share some recent research that has been released. Based on the research and my own thoughts, mobile devices are becoming a powerful force in our lives.

As we went to restaurants, the social watering holes, the tailgate party, and even in the stadium, I noticed how many people were using their mobile devices to stay in touch, update Facebook and Twitter, and take pictures to upload or send out to everyone. Sitting in Cracker Barrel next to a table filled with the 60 plus crowd waiting on their food, I watched all of them tapping away, or reading what was on their phones. This is universal and will expand as speed increases and apps are introduced, making our lives easier as well as more resourceful and connected.

In a previous blog, I discussed the research of Mary Meeker, a leader in mobile technology research. She released new data at the Web 2.0 Summitrecently, and it showed the continued surge of mobile usage, traffic, and e-commerce.

In the area of e-commerce, she discussed how eBay’s mobile sales have reached $4-billion, Paypal has hit $3-billion, Amazon has made $2-billion, and Square is at $1-billion. All had big increases with Square up 20,000% year over year growth! From what I observed, it is just going to continue to be off the charts!

Meeker explained that over the past year, the use of mobile search has increased four times, and the mobile app and advertising revenue combined has been growing at 153% annual compound rate since 2008. At that time, the revenue was at $700-million, and now it has hit $12-billion! This is amazing growth!

For internet services like Pandora, Twitter, and Facebook, a large portion of their traffic is from mobile devices. Actually, for Pandora and Twitter, the majority of their traffic is mobile with Pandora generating 65% of traffic and Twitter gaining 55% of traffic this way. Approximately 33% of Facebook traffic comes from mobile devices, and it is increasing dramatically.

This all means we are entering a world much different from where we have been, and it is changing fast. We will be doing so much more on our mobile devices, and this will drive how we work and play. How does this affect you and your business? Can you improve your service to allow easier access to your products and services over mobile devices?

As I contemplated these questions over the weekend, I had an idea dealing with mobile devices and connecting people that has been brewing for awhile now, but it was solidified in Dallas. What ideas do you have to connect people, share information, or simplify things? The next Gates, Jobs, or Zuckerberg is brewing and will show up soon. Why not you?

22 years in the investment world, running a money management and mutual firm taught me a thing or two. I experienced ups and downs, and learned a lot. The world is a difficult place when it comes to stock markets, and trying to decide where to place your money. In case you haven’t noticed, after a decade the markets today are still lower than they were in 2000. Scary thought.

It’s my experience that those in the marketplace that manage money have short streaks of what appears to be brilliance. They are labeled as a guru, right up until something changes in the market, and they go back to being the average Joe, or even worse, losing lots of money. I saw this happen firsthand when my partner and portfolio manager was labeled a guru when we had the number 1 performing growth and income fund and were on CNBC regularly. We were propelled there by placing money in what we felt was the direction of a more connected world, then supercharged by a floor of money released into the economy by the Fed in fear of Y2K. All that changed in the early 2000’s.

Being in that world and around all those “perceived” investment guru’s helped me see that no one had the market truly figured out, and in my opinion, still don’t. You will always find portfolio managers that generate above market returns for a while, then something changes and they revert back to the mean. Most people jump on board when the good performance numbers start to show up in the 3rd and 5th year rankings, but that is usually about the time that funds begin to fall back to mediocre, or even worse, fall like a rock.

Given my observations, I’ve chosen to invest in index funds with the lowest expense ratios, or not invest in the market at all. I read a great book a few years back that provided the numbers to support this theory, and even directed how to invest in the index funds and diversify between cash, bonds, international, large and small stocks. It’s called “The Smartest Investment Book You’ll Ever Read”, and if you’re going to invest in stocks or mutual funds, I fully agree with the title. If will provide you with a simple and easy to follow process.

If you read this and think, “Well Greg, what about Warren Buffett? He has blown away the market for over 40 years?” My response is, Warren Buffettis not stock market investing. He buys meaningful interest in business that his company either controls or advises on finance to help steer success. This is running businesses, not stock market investing.

There are a lot of theories floating around on the world and how things work. There are just as many assumptions, which the majority of us live by to varying degrees. Take for instance, opposites. It’s the general consensus that everything has an opposite. If I asked you the opposite of dark and cold, you would likely say light and hot, respectively. Have you considered that dark is merely the absence of light, and cold the absence of heat? If you added 10 degrees of heat to -200 degrees, does that make it hot, or just less cold?

Looking at it from this perspective shows us that they are linear graduations on the same line, according to Dr. David Hawkins in his book I: Reality and Subjectivity.

I: Reality and Subjectivity, pg 47

I first read this book about 4 years ago, and after really contemplating the subject, I see its implications all around. Could a business that is facing a world of opposing choices use this philosophy to find more solutions within a range? Could politicians find more common ground? Could scientists find more answers? Maybe if we had a little less duality the world could experience less dividedness.

Many of us out there hold a strong aversion and distaste for meetings. You have heard it before, or possibly even said it yourself: “We do nothing but have meetings around here, so how am I to get any work done?” Why do we have such negative feelings in regards to getting a group of people together to discuss issues and create solutions to move forward?

I believe strongly in the power of the group and think it is vital to bring people together to create the best ideas. If you have read this blog for any amount of time, you have seen me discuss my belief in collective intelligence, an ideal I trust in so much that I even started a mutual fund managed around the philosophy.

When you imagine a good idea occurring, what do you envision? Do you see Einstein with his crazy hair looking up into the sky with a light bulb going off? Do you visualize the lonely scientist looking into a microscope, and then Eureka . . . It happens?

I read about a study in Steve Johnson’s book “Where Good Ideas Come From / The Natural History of Innovation” and was not surprised to find it shows that good ideas happen not in these moments of individual discovery but when a group of people are sitting around a table sharing ideas. I said to myself, “Holy moly Batman! Now I have real evidence to support my gut!”

Psychologist Kevin Dunbar actually set up cameras to watch a research group of scientists work in the early 1990s. His team transcribed all the interactions and tracked the flow of information. Dunbar discovered the physical location where the most important breakthroughs occurred — the MEETING ROOM!

They found the group interactions helped reconceptualize the problem. In his book, Johnson explains, “questions from colleagues forced researchers to think about their experiments on a different scale or level.” Group interactions allowed the more surprising finds to be questioned rather than dismissed, and this led to better ideas and breakthroughs.

So there we have it! Those all day quarterly meetings we have in order to focus, strategize, and plan along with our two day off-site annual meeting have purpose! This can also be said for any other meeting where you need important decisions made or　great ideas from your team. If for some reason the team has doubts, get the book! It is a great piece of evidence.

There are times when you have to make business decisions that are painful. Those decisions are often accompanied by the feeling that your work, effort, worry, and money have all been a waste.

For 4 years now, my partner Rich and I have owned a franchise of 1-800-GOT-JUNK. These franchises have been successful all over North America, and we wanted to bring it to Knoxville. The founder of 1-800-GOT-JUNK is a fellow EO member that I met in 2001. For 4 years I watched the business grow and become successful before we bought the rights to the Knoxville market.

We launched with excitement and did all the right things that the other franchises did to be successful. We hung out door hangers, we did waves (guys in blue wigs next to trucks waving creating attention), we put out signs and tried a lot of the usual marketing programs. So what happened?

A year before we entered the market, a competitor did, and they captured the mind share of the local market place. We found that when people saw us, they usually thought of the competitor (the marketplace was trying to tell us something). As you can imagine, this was not good for business. We thought we could break past this with a national TV advertisement that the franchisor was going to start but they never did. Not long after, the real estate recession came, and paying to have your junk taken away was discretionary and could be delayed or simply done yourself (2nd time the marketplace tried to tell us something).

So what were we to do? Even after we cut back on manpower, we still were accumulating debt and had to make the decision to stop the bleeding. We did, and last week we shut down the business. We finally listened to the marketplace! This week Microsoft shut down the Kin Family of mobile phones after only two months. The marketplace had spoken, and they listened.

Lesson learned. We had the real life lesson that this business was not core to our focus and our purpose. Rich and I both work in our software company. The junk business was about an opportunity to make money, and that was it. As we all travel the business path, we continually have to make decisions that might be wrong. I have learned to accept this truth, brush it off, and keep going.

Key Lessons Learned:

• Follow your passion
• Keep a laser like focus

Swami Vivekananda

As we approach Christmas and get to spend more time with our family and friends in a spirited, colorful environment full of lights, we open our hearts and our pocket books to give and share what we have with others.  While I cannot speak for you, it makes me feel good to give to others.  When it is done with sincerity, I feel it has that effect similar to when the Grinch’s heart grows three sizes.  It changed him.  I look to the holidays to have that growing heart experience and hope the holidays have the same effect on you.

However, in certain areas of your business, I feel it is necessary to have a Scrooge mindset.  I have experienced this in the areas of operations management, stop doing , and cash!

For operations management, I find it useful to go through all the expenses on a periodic basis and for each ask, “is this expense necessary and does this add value to my business?”  I always do this at the end of the year and prefer to do it quarterly.  I often discover things we are paying for that no longer need to be paid or that could be modified or reduced.  For example, during this end of year review, I found that we were paying to store outdated documents off-site.  These can now be destroyed, thus stopping that expense.  My team is also reviewing our servers for potential consolidation and fee reduction. What expenses could you reduce or end?

What can we STOP doing in the true Scrooge fashion?  Many times we take on too much and have to stand up and be a scrooge and say, “No, I can’t do that at this time because it will affect my other work.”  It can be most difficult to say no to clients, but as I have experienced, it can be the most important thing you say in business.  You can read much more on this in last week’s blog.

The last and most important area I’ll discuss is cash.  We all know that not having the cash to pay our bills is a bad place to be.  Therefore, being cautious and miserly in this area is prudent in the right context.  Ask the question, “what can we do in order to get cash in faster and pay it out slower?”  Extending cash outflow for thirty days by putting some of our expenses on credit cards could be an option.  What are the opportunities to negotiate getting paid upfront or sooner from clients in exchange for some benefit to our clients?  We have lines of credit in place and credit card availability as a back-up in this area.

As we go into this holiday season and the New Year, I am shooting for balance between being a scrooge in some business areas and growing my heart three times.  Wishing you all a wonderful giving and sharing holiday season!