Welcome to Extremistan, Land of the Black Swan…

After the last blog post one of our project managers, Taryn, asked me “If you can’t predict a Black Swan, then how do you stay away from the negative ones, and vice versa, how do you put yourself in the path of positive ones?”

To answer this question, you have to understand the two types of environments that exist in the world of the Black Swan. Taleb calls them Mediocristan and Extremistan, and they are defined as:

Mediocristan …”When your sample is large, no single instance will significantly change the aggregate or the total. The largest observation will remain impressive, but eventually insignificant, to the sum.” (p.32, The Black Swan)

Another way to look at this is non-scalable types of events. Examples are those such as a person’s weight and height, or the non scalable income of a baker, beautician, or a massage therapist. You don’t grow 6 inches or gain 100 pounds in a day…and careers where a standard amount of money is exchanged per transaction are Mediocristan, and don’t subject you to a Black Swan event.

Extremistan…”Inequalities are such that one single observation can disproportionately impact the aggregate or the total.”(p.33, The Black Swan) This is a scalable event like wealth, book sales, planet size, and financial markets. Also in this environment, a few can take all the winnings, or a negative might totally wipe you out. The banking losses from the 1982 banking crisis wiped out all the collective profits made by banks in the past 200 years. In Extremistan you are subject to a Black Swan.

What all this means is that, when you know the environment that you are living in and if it is subject to a non-scalable or scalable event, you will know the potential of the risk. If your work is like an orthodontist (non-scalable), you can make a nice living over a long period of time, but no single day will dramatically change your income total. If you are an author (scalable), the masses end up working 2nd jobs while a few will experience Black Swan events like J.K. Rowling.

Our software company makes most of its money from building custom software products for clients, a non-scalable income. About 20% of our efforts, however, are spent building products that we put out in the market place. This is scalable and subjects us to a positive Black Swan if they were to go viral. This is a controlled way to manage for a positive Black Swan.

Now you know what a Black Swan is…it’s time to figure out if you’re living in Mediocristan or Extremistan. If you’re living in Extremistan…what can you do to move away from the negative Black Swans and put yourself in the path of a positive one?



4 Ways to Know (and Live) Your Purpose

Tony Hsieh (Zappos), John Assaraf (from the movie The Secret, and author of The Answer), Guy Kawasaki (Apple), Sir Richard Branson (Virgin) and even George W. Bush (need I elaborate?). All of their messages were very educational and insightful, but there is one in particular I want to share with you.

(a marketing firm) and CEO of The Purpose Institute. This was timely given my recent blog on core purpose. His story was about the power of focusing on your purpose.

Roy has worked with Herb Kelleher (former CEO and Chairman) of Southwest Airlines for decades now, and over the years has helped to support their purpose around freedom of the airways.

Roy showed this video called Hallelujah to help us understand what purpose feels like:

He said when you have these 4 things you will know purpose.

1) You have to know the words to the song

2) You have to listen to one another

3) You’ve got to step up when it is your turn

4) It really sounds good when you sing together…



How do you prevent a bad hire?

What is the most important duty of a CEO?  Bob Prosen, author of Kiss Theory Good Bye, says “Hiring people smarter than I am and putting them in the right positions!!!!” I have to agree, but creating roles and filling them with people who can play to their strengths in those positions isn’t an easy task.

Last week I did a presentation to my EO chapter on my company’s hiring process, which is built around the Topgrading methodology. It’s hard to express how important this is to us, because we put so much time and effort into taking what we’ve learned from books, speakers, and even bad hires to create something that really works for us. Our process is 13 steps, and has shown us a high success rate of getting the right people in the right places, in turn saving us money. For example, research shows that if you hire someone at 6 figures, and they turn out to be a bad hire (within what amount of time? A year? 6 months?) it can cost you as much as 1.5M in lost productivity and opportunity cost. This is reason enough alone to work harder to get it right the first time, and not just relying on your gut and a resume to make a decision on hiring someone.

In short, this is our process:

This isn’t something that happens in a day, or even a week. I and a few others on the team spend an extensive amount of time with each candidate throughout the screening process, getting to know their background, their work experience and their personality. We hone in on their natural strengths, and match them up to the needs of the company and the position. From another perspective, this also ensures that things they are not good at are not key aspects of the position.

Having a defined process and checklist in place for our hiring process is essential, but it is also extremely beneficial to other areas of business. Think of it this way, thousands of planes take off and land successfully every day. They manage this because they have a checklist to make sure they aren’t missing anything. We don’t want to miss one thing on our checklist, because that one thing could lead to making the wrong hire.



How much pain do you show?

Does your marketing material talk about you? Does it emphasize what you offer, why you are so great, and what sets you apart from competition? Do you notice a trend here? It’s all about YOU. I know our website is all about us. I also know that, if we want to truly relate to our clients, then it can’t be all about you. Why? Because as impolite as it might sound….potential clients don’t care about you! They care about themselves, their pains, and how to fix them.

Are you going to be the one that helps them? Probably not, unless you can show them that you understand their pains and you know how to fix them. Can you really define the pain that your clients experience when they seek you out, and talk about it as if you’ve been in their shoes? Can you talk to them about what would alleviate those pains, without it being a sales pitch? When you are seeking a product or service and you’re browsing the web, aren’t you more inclined to stop and read about something you can identify with? Something that relates to you and your experiences…

I’d heard similar theories time and time again, but didn’t take it into account when we designed and wrote the content for our website. Had I read Reality Marketing Revolution just a few short years ago, it may have been a different story. We’re now in the process of revamping our website, based off what we’ve learned from this intuitive book written by Michael Lieberman and Eric Keiles (a fellow EO Member). These guys put this into a process for approaching your marketing plan that resonated with me. It’s clear, it makes sense, and it’s obvious. We know the pains our clients’ experience, and we know how to help them. Now Eric is going to help us demonstrate that in a better way.



Cut From the Same Cloth

26 take offs and landings took my business partner April and me to the other side of the world and back for 3 weeks of cultural diversity, hard work, and once in a lifetime opportunities. What I brought back was a new perspective on people, life and business.

entrepreneurs. We were immersed in the most diverse array of food, climate, attire, languages, and even industries.

As business owners and as people, we all struggle to balance work and personal life. We all want to better our lives, take care of our families and children, to provide a safe environment to grow and play, and be surrounded by those that we love. On the surface, we are very different, but if you take a deeper look, you see that we are all cut from the same cloth.
 



Are You Still Doing It?

Not so many years ago my company, Efficience, went off into our annual meeting and planned our coming year.  We set goals for the company, discussed and planned the great things we would do the coming year, and naturally returned all fired up.  3 months later, in our quarterly meeting, we were in the same place we’d been at the start of the annual meeting.  The nuances of day to day business had laid a thick blanket over the plans we made, and without the help of all of us to lift it, it wasn’t going anywhere. 

This is so similar to the never-ending New Year resolutions we all succumb to making, and rarely find ourselves victorious in keeping.  Good intentions dissipate in the trials of life, love, work, and school.  How funny is it that year to year nothing changes? 

With January coming to an end, how many of you find your commitments are already fading?  It’s easy to become overwhelmed by the big picture.  We fail to see that these goals we set don’t happen overnight, they happen gradually, one step at a time. 

Your next step is crucial to reaching your goal.  Without it, you’ll never take the one that follows.

Our team recognized that we needed more than good intentions to execute our goals.  We brainstormed and filtered out the most important ingredients needed for a process that might make the difference, an experiment some might say. 

At the start of a quarter we take our Company Quarterly Goals and break them down into Individual Quarterly Goals that support them.  From there, each person begins with naming their first step towards reaching that goal, even if it’s a small one.  Where the process comes in is in the Visibility and Rhythm.  We don’t just talk about what we’re going to do, then come back the next week hoping no one remembered and say it again.  We write it down for everyone to see.   The next week, we check it off, and put down the next step.  This step can be as small as making a phone call, as long as it’s a step in the right direction.  It’s a process of reaching our goals one step at a time, and at the end of another quarter, we find ourselves having met our goals and ready to make new ones.  We now use online software, FlockGPS, to help us manage the process (our software, of course!)

The act of telling your peers what you plan to do, and knowing in a week you will have to report back to them, holds each person accountable to the next.  No one wants to be the person that didn’t do what they said they would.  Even more so, we are all contributing to the company goals.  We’ve built camaraderie in our office where we all work to execute our goals. 

The first of January we spent another weekend in the Smoky Mountains on our annual meeting retreat.  But these days we have a process that we didn’t have in the beginning, and that process has helped us reach goals that seemed unattainable in the past. 

In an economy where many businesses are happy just to keep the doors open, we’re growing!  I hope that you can find this helpful in finding execution for yourself, both personally and professionally. 



Do You Have Rhythm?



FlockGPS).
Death by Meeting by Patrick Lencioni and Mastering the Rockefeller Habits by Verne Harnish.

Can we be candid here?

In my business, I have found that at the top of the list of problem areas resides communication. Working in a global market adds in a variety of cultures making communication something that should not be taken lightly. With the world getting flatter, many of us now have customers, suppliers, partners, or team mates in other countries. For more than 5 years now my company has been working to grow our team in India and working diligently to make our processes better, as we have learned that the majority of our issues arose from communication, or lack thereof.

My US team has worked hard with our India team to create an environment of candor and better communication with every team member. In their culture, it is not easy to create a space where people feel comfortable to communicate in a way that is open, forthright and just plain candid!

We have made lots of progress, but I feel we can be even better. We did this by making candor the key thing brought up in our conversations and team meetings. I would obnoxiously ask over and over “what is our biggest issue….being Candid right? So are we being Candid?”

About 5 years ago I read a book called Winning by Jack Welch. To this day, one thing still stands out about that book…Chapter 2 entitled “Candor:” He spent an entire chapter on being Candid. He said, “When you’ve got candor – and you’ll never completely get it, mind you – everything just operates faster and better.” He was very adamant about the benefits of it, but also discussed why it is so difficult to accomplish.

So how do you get Candor? Even though we are fighting human nature, it can be done. Jack says, “There is nothing scientific about the process. To get candor, you reward it, praise it, and talk about it. You make public heroes out of people who demonstrate it. Most of all, you yourself demonstrate it in an exuberant and even exaggerated way – even when you’re not the boss.”

Keith Ferrazzi also talks about candor in his latest book who’s got your back? He says it is up to us to make it happen and to create an environment of candor. He points out that studies conducted since the 1970s make it clear that those who avoid conflict undermine their relationships and their success. He also says “Candor, or caring criticism, always ends up being greater than the sum of its parts. In other words, when candid exchanges between people collide, the fusion generates entirely new insights, new ideas, and new approaches what we collectively call innovation.”

We at Efficience think this is a very important issue and we continue to work hard to stimulate an environment of Candor. Is Candor alive in your company and in your life?



When there’s more than one right answer…

Dewitt Jones tells an exceptional story. He does it with a passion and purpose that he has put into his life as a National Geographic photographer. The title of his talk, Extraordinary Vision, was truly extraordinary. He shares the stories behind these fantastic photographs that make them real and meaningful in a way that sticks with you. I was fortunate enough to see him at both the EO Arizona University and the EO Canada Regional, and was captivated both times. Many people said they felt teary eyed listening to his presentation.

What really got to me, and he does get to you, is how he approaches moments with the possibility of what could be. He goes by a personal mantra, “There is more than one right answer!” No matter how great the photo, he is always open to the possibility that there is a better one. He would capture a moment in time that may have been just what he was looking for, but if he’d stopped there, he wouldn’t have seen the better one that came just moments later.

He spoke about a time where he’d gone to a dandelion field to take some photos, only to find that the dandelions had dried up and all that was left was a field of white puff balls waiting to fly away in the wind. Instead of walking away, he thought that maybe things didn’t end there, that dandelions didn’t make the only “right” photo. Take a look. Who would have thought a picture of a dried up dandelion in the sun could be so beautiful and serene? It wasn’t what he’d sought out, but his open mind and creativity offered something more, and something inspirational.

For me this begged the question, what am I not staying open to? What is the next right answer? Are you dealing with white puff balls instead of pretty, yellow dandelions in this economy? Are you open to the idea that there is another right answer?

Dewitt talked about having Vision, Passion, Purpose and Creativity in the way you approach where you are going. Honestly, it sounded more like something from a Jim Collins book like Good to Great than it did a photographer. He would say “When we breathe in, we take it all in, and when we breathe out, we give it all back!” He calls it the One Breath Meditation…what a good analogy for life.

He believes that when your vision is clear, it’s there, and it will show up. When you continue to believe in the next right answer, you find yourself traveling down the accelerating possibilities curve. He has a vision of beauty and special moments in all of life, and he has captured them over and over again to be witness in National Geographic for over 20 years.



EO Adventures in Canada

I attended the EO Canada regional conference in Ottawa Canada last week. It was exciting seeing my EO friends and I enjoyed the opportunity to learn from the speakers. It was a busy 3 days with lots of learning and amazing off site events.

Ottawa is the capital of the Province of Canada like DC is to the US. Ottawa is Canada’s fourth largest city and is also where their parliament resides. We took a tour of the different chambers that make up the parliament. It was interesting as well as educational to learn the similarities and differences between Canada and the US.

The highlight of my trip was traveling by train along the river heading north of Ottawa to a small town called Wakefield. The 90 minute journey gave way to some amazing scenery and provided invaluable time to just sit and talk with fellow EO members.

One of those members whom I was traveling with on business was Ben Ridler, the CEO of Results.com. Along with 2 other EO friends, we dined together and each shared stories about our businesses, the economy, and life in general. Accompanied by perfect weather and a spectacular view, this experience was yet another once-in-a-lifetime experience for each of us. It’s not often that you find the time these days to just sit and enjoy the company of friends from around the world all at the same time, with no clock ticking in the background.

On Friday Matt Stewart, one of my oldest EO friends, and I rode bikes alongside the Ottawa River, stopping along the way to take in the massive scenery and hopefully take home a few reminders of it in the form of photographs. We ran into a rock sculptor along the way, an older man full of stories to share as he shaped these rugged rock forms into pieces of art.

Noteworthy are two speakers I had the pleasure of learning from on my journey. I will be discussing them in more detail in my next two blog entries, but for the record:

The first is Peter Thomas who bought the rights to Century 21 in Canada and helped it soar to 9 billion in real estate before he sold it 11 years later. Peter shares his theories on the S curve and adds some interesting perspective on what a business needs to do to get past the end of the curve.

The second speaker I’d like to mention is Dewitt Jones. He had a 20 year career with National Geographic, creating hundreds of extraordinary visions as a photographer and is now rated one of the highest speakers in YPO and EO. His message is powerful and relates to finding the extraordinary out of the ordinary, and that there is more than one right answer. His message applies to life as well as business.

Being an Entrepreneur is sometimes lonely and can be a difficult place. The weight of many peoples lives are depending on you to get it right and to make things happen for everyone’s future. My EO time is very important to me because it is being with my tribe and it makes the world a lot less lonely. The energy, passion and zest for life can be intoxicating around my fellow EO friends and takes you back to what being an entrepreneur is all about: taking a risk and using our creativity to change our own part of the world.