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.

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?

On my trip to Canada for the EO Conference, Peter Thomas, who I introduced in the last blog, (founded Century 21 in Canada and took it to 9 billion in sales) spoke to us about the S Curve.

I spent many years in the investment world and back in the early nineties I went thought the Chartered Financial Analyst (CFA) program. We discussed the S curve in depth, which depicts the life cycle of a business. With the S tilted forward a little, you can see how a growing company starts out flat for a bit, then takes strong spurt upward and then levels off and starts to decline. This is the life cycle of most businesses, usually lasting 5 to 7 years. Hang on for a second if you think this may not be relevant to you.

Peter demonstrated that if you add the S curves on top of each other (as shown below) and draw a line between them, it shows the steep declining cycle that happens over and over again in companies with a long history. What do these companies do to keep from going out of business during these declines? They have to make changes and inject something different, something new, something innovative, to start the cycle over again. If not…what happens?

 Peter talked about how we can use this analogy in life as well. This really got me thinking, and I have spent the past week pondering how many areas of our life this theory applies too. Think about relationships and marriage. How many do you see that are short lived, that only make one S curve cycle. How many go through multiple S curve cycles? Do the longer ones add something different, something new or innovative into them? 

Think about the S curve as it applies to our other interests in life…our workouts, our diet, our favorite sport or team and even our friends. I can only imagine how many more excited fans we’ll see this year for the TN Volunteers football program with the new, young, energetic coach Lane Kiffin at the helm. What is it in our workouts, our diet, or our relationships that we can add to keep them on an upward growth curve?

If you are a business, what are you doing if you are starting to round out the top of the S? Are you looking at new markets, new products, a strategic partner, a new leader, technological innovation, or going to the web? We all know that change happens around us and we also need to change with the times!

In last week’s blog, I introduced the three core behaviors for business greatness as researched by Jim Collins in his new book “Great by Choice.” These behaviors include fanatical discipline, empirical creativity, and productive paranoia. Let’s take a deeper look at each of these, so we can have a better understanding of how to apply them in our own businesses.

In the core behavior of fanatical discipline, Collins discusses how these companies had a relentless approach in implementing their processes and strategy. Collins describes “relentless” as “consistency of action, consistency of values, consistency with long term goals, consistency with performance standards, consistency of method, and consistency over time.” He then adds, “For a 10Xer the only legitimate form of discipline is self-discipline, having the inner will to do whatever it takes to create a great outcome, no matter how difficult.” These 10Xer companies operated on a completely different level of discipline than the average or even the comparison companies. They were fanatics about it!

In regards to the core behavior of empirical creativity, Collins shows that 10Xers would try things in the marketplace, get feedback, make changes, and get more feedback. They relied on this practice to make bold moves with less risk. He says, “By empirical, we mean relying upon direct observations, conducting practical experiments, and / or engaging directly with evidence rather than relying upon opinion, whim, conventional wisdom, or untested ideas.” I really relate to Collins analogy of firing bullets instead of cannonballs. Fire the bullets and make adjustments to be sure you zero in on the target. When you have a lock on the target, then you fire your cannonball.

When observing the core behavior of productive paranoia, the 10Xers displayed a sense of constant worry in regards to what could cause their demise in good times as well as bad. They worried, like Gates, that the guy in the garage would come out with something that would sink them. Like me, you may remember Andy Grove of Intel, a 10X company, coming out of the cover of Fortune with the title Only the Paranoid Survive.” Collins says, “They (10Xers) believe that conditions will – absolutely, with 100 percent certainty – turn against them without warning, at some unpredictable point in time, at some highly inconvenient moment. And they’d better be prepared.”

I have discussed many times in these writings how Efficience is working toward its BHAG by creating many products in the marketplace and observing the evidence of what works. Those are our bullets, and when the empirical evidence comes in, we will fire a cannonball. I expected this to be a core behavior, but the other two behaviors of discipline and paranoia found in the 10Xers surprised me. We will be working hard to step up to our discipline and paranoia going forward. How will you use these behaviors to be great?

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 to 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.

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?

This week when I was reading about all the trouble that Netflix is experiencing with their pricing, it got me thinking about all of their success and how they got their start.  Did you know that back in 2000, Netflix founder Reed Hastings went to Blockbuster and proposed running an online brand for them?  They laughed at him, so he went out on his own.  Now look at all that has transpired.  Blockbuster is going sneakers up, while Netflix has become the single largest source of web traffic in North America this year.

How the tables turn, wouldn’t you say?!  It’s fun to see the little guy with the big idea get brushed off by the big corporation, then go on to dominate or even wipe out that very corporation that blew him off.   Repeatedly in my career I’ve seen changes in technology push out the well established businesses that wouldn’t evolve with the new technology.  Consider for a moment the evolution of music: from the LP to the 8 Track Tape, then on to the cassette, the CD and now the mp3.  Take a look around, it’s everywhere.  When was the last time you had to use a pay phone?  How many books did you download on Amazon instead of buying from Borders?

So why is it that these well established businesses can’t (or won’t) grasp this and get on board with new age technology?  Technology is a game changer and they’re simply not playing?  Do they lack the competency, the strategy, are they blind, complacent or just plain unaware?  Do you think you’re immune to it?

Back in my investment days I thought about this often as businesses described by those same adjectives failed to progress into the new age. Surprisingly, however, it was also happening to businesses filled with smart, competent, strategic and visionary people. 

In the late 90’s Clayton Christensen published a a book called The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail.  He talked about how even good business practices, like focusing on the best customers and investing in technology, can’t prevent new technology entrants from sneaking up on you.  The reason is that new technologies are rejected from your best customers, and if you’re listening to them, you reject them, too.

In addition, when you’re a big guy in the market, in order to grow your business you have to have things that are meaningful in real dollars.  If a new location can make you $20M in new revenue, it won’t make that big of a difference if you’re already doing $20B in annual revenue.

So how do we prevent it from happening to us?

To begin with, listening to your customer’s is good, but excessive customer focus distracts a company from looking at new markets and products/services of the future.  Unless becoming the next Blockbuster or Borders is the objective, paying attention to where all the attention is going is something to consider.

In my next blog I will get into more detail on the rules that Christensen discussed on how managers can know when to listen to customers and when to invest in what might be a low payoff technology now, but could potentially turn into your core business.

Back in mid May I attended the Fortune Leadership Summit.  A fellow EO member named Marc Ostrofsky also attended the event, and although he was not a scheduled speaker, he did take a few minutes to speak to all of us.

Marc has a successful background in entrepreneurial start-ups, with his current portfolio of online businesses generating over 75 million a year.  When he got on stage, he talked about making money online and the vast opportunities available.  One story that he told literally made my jaw drop.

He told the story of a guy who had made a YouTube video on how to jump higher (yes, the vertical leap).  He posted it up just for fun.  The number of hits it received was enormous, so he took it town and built an e-commerce site with educational material, such as videos on how to jump higher.  Users can subscribe to the videos via a monthly payment plan.  Marc said that this guy made over a million dollars last year, with over 7,000 people subscribed and paying $9.95/mo.

Marc told us of a few other stories that are portrayed in his new book called Get Rich Click!.  I just saw a report in this last Saturday’s Wall Street Journal that popularity of his book is growing quickly, up 814% for the week.  What is so fascinating about his story and his book is that it’s an entrepreneur’s utopia of ideas to start making money.  The title of one of his topics is “The Riches ARE in the Niches…$5 Million a Year Selling Cuff Links Online!” 

What’s awesome is when you look at it from the niche perspective.  Think about those areas of life that we are passionate about (discussed in my last blog), which can usually unfold some niche opportunity to scale and sell something that we know and love.  In some cases you don’t even have to invest capital, make a product, buy inventory, or ship anything…you can have others handle that while you simply bring in the customers and maintain a portion of the profit.

There was a great example in the book about a couple of kids that were really into bike riding with their dad.  Tires being the most important gear in this sport, their dad ordered bike tires from a UK specialty shop in just enough quantity for their bike club.  When they came in a color that no one liked, he offered the kids the option to get rid of them (in quantities of 10) and just pay him the cost of $30 per tire.  The kids set up an ebay store and sold the tires for $35 each.  They made a $50 profit, then turned around and ordered more and sold them as well.  This happened back in 2002 when they were only 10 and 12 years old.  They now own BikeTiresDirect.com, and generate over $8 Million a year in sales.  WOW!

We are in an age of opportunity that is unprecedented in our history.  Never before could you start a business with so little, and reach so many customers so easily with the help of the internet.  There is nothing standing in our way, so what are you doing to get started?  Personally, my team just released a beta version of a software tool called Sluice (Join the beta users community) that is built to simplify requirements gathering and collaboration for projects, and we hope to sell thousands.  

What is your passion, which leads to your niche, which leads you to profits…which will lead you to financial freedom???