Category Archives: Business Mistakes

On the Recruiting Value of Slogans and Bluster — Not

Business Ethics, Business Mistakes,

Is this just me? The message says “looking for ball busting MBAs to join my firm. (no wimps) great opportunity to kick tail in renewable energy.” Does that make you shudder?

It reminds me of big-company sales mentality where quality is measured by bravado and the customer is a tool to be conquered. It smacks of a now-obsolete world in which fake enthusiasm is an important currency.

It’s hard to imagine that this kind of message works. Ask with slogans and bluster, and you’ll get people who like slogans and bluster.

Dragon and Treasure and Your Own Business

Business Mistakes, ,

The dragon guards the treasure. You’ve heard the story since you were a kid, in fables, legends, good and bad movies, and even computer games, such as Diablo and Dark Crystal. It’s there in the back reaches of your mind. Like it or not. Dragon

Just about everybody has dragons. And everybody has treasure. But we have to fight the dragons before we can find out what the hell’s in the treasure chest. And we’re all different, so nobody knows exactly what the dragon is, let alone what’s inside the treasure. We have to find out for ourselves.

We don’t have to think of this as a story about small business and entrepreneurship, but hey, that works, so why not? And if you’d like to think of it in more general terms, great.

First, you identify your dragon. I think I know mine right now, but it’s different for me than it used to be, and it does you no good to know what mine is, so I’m not sharing. Take a step back from your business, or the business you want to start, and think about what’s bugging you. Think about the stuff you avoid. Maybe it’s fear of failure, maybe it’s jumping too fast, maybe it’s being a boss instead of a leader, maybe it’s not distinguishing urgent from important … it’s probably something you don’t want to think about, but not thinking about it is impossible, like not thinking of a rhinoceros while reading this sentence.  Maybe dragon comes from “drag on the back of your mind.” Your dragon is different from mine. They’re all different.  What’s your dragon?

And what’s the treasure? Is it maybe strategy? A new direction? A clear head, perhaps? A creative leap? And — quite likely — you don’t really know what’s in the treasure until you defeat the dragon. I have only some hints and guesses about what my treasure is, if I manage to slay my dragon and reach it. If we knew what the outcome were, we wouldn’t have to slay the damned dragon. You do it, tough as it is, because you want to open that treasure chest.

Slay your dragon. Claim your treasure.

(image: bigstockphoto.com)

Reflections on Fake Reviews and Review Credibility

Advice, Business Mistakes, , ,

Last month the New York Times ran this story on fake reviews all over the web.

I was a late comer to Angie’s list. You’ve probably been using it for years, so you already know what I just discovered. It has no anonymous reviews. How refreshing. And, how much more useful.

In case you aren’t familiar with it, Angie’s List is perhaps the best known site for listing local service providers in mainstream categories like home maintenance, doctors, nurses, auto repair, and so on. I paid $12 for a year’s worth in my home town, and another $20 for a year’s worth in a second location.

And I saw immediately what should have been perfectly obvious: having no anonymous reviews makes the site way more useful than any other site I’ve dealt with that has reviews. We were looking for air conditioning, and we found that what used to be a word-of-mouth headache was suddenly pretty easy. Having all the reviews identified means I end up believing that the ones with the best reviews are the best vendors.

Do you think that’s a good bet?

I use a lot of reviews these days as I choose hotels, restaurants, and what to buy. And I discount the obvious owner reviews even more than I do the obvious disgruntled customer and/or competitor reviews. On restaurants and hotel sites, my best indicator is not how many stars, but rather how many reviews there are. The restaurant with more than a thousand reviews averaging out to four stars looks better to me than the restaurant with two reviews averaging five stars. I assume that’s the owner and a best friend.

True confession: my brother has a novel listed on amazon.com with five stars. You won’t find it if you look, because he uses a pen name; but there’s one single review for that novel, and you wouldn’t be able to tell this from the way the review is signed, and it doesn’t say it in the review, but I wrote it.

I hope more sites move away from anonymous reviews. I think that’s a great way to deal with all the gaming. If you don’t care enough to say who you are, I don’t want your opinion counted.

I hope it’s obvious to every business owner why gaming reviews is bad business ethics. And, perhaps more important, why it’s bad business: Because it’s going to come out. It will show.

Don’t Compete on Price. Please.

Business Mistakes,

I caught Ted Coiné’s 12 Most Irrefutable Laws of Business Heresy the other day. I really like that list. And it’s a great title for a post. And it’s an excellent post, great advice coming one delightful rule after another.

Still, I want to highlight one of his 12 rules for this post: Don’t compete on price:

You know who competes on price successfully? Walmart. Ryan Air. And… okay, two companies, in all the world. Let your competitor compete on price. You compete on quality, at a fair price. If for no other advice on this list, you’ll thank me for this.

I couldn’t agree more. And – I thought it was worth noting with this post – I have pretty good indications that you also agree: of more than 1,250 posts on this blog, my post warning against lowball pricing is in the top 20 by page views. I put that as #4 in my top 10 business plan mistakes, but, interestingly enough, it has roughly twice as many page views as any other post about any other of the top 10 business plan mistakes.

And, while we’re on the subject, read the rest of Ted’s list.

5 Questions About Power vs. Control vs. Results

Advice, Business Mistakes, , ,

Have you ever looked at the difference between power and control in leadership and management? Here’s what I’m guessing. Power and control are quite different and sometimes in conflict. The more control you have, the less power. Does that make sense? I’m just guessing here, not studying the literature.

The powerful leader creates and empowers powerful teams and lieutenants, inspires them with values, collaborates with them on goals, and then sets them loose to operate within general ranges and directions. 

The controlling leader, in contrast, keeps teams and lieutenants on a tight leash. They check back constantly. They move much more slowly because they can’t make a significant decision without their leader.

The powerful leader sets goals and metrics. The controlling leader reviews to-do lists, tasks, and details.

Which brings me to some follow-on questions:

  1. Are you a leader? Do you set your teams loose or keep them under control?
  2. What happens when the would-be powerful leader fails to inspire and set goals and ranges and directions?
  3. What happens when the would-be powerful leader doesn’t have the right teams and lieutenants?
  4. How much of this power vs. control range is a matter of the leader either trusting the teams and lieutenants’ ability and judgment, or fearing their incompetence?
  5. Which style is more likely to get good results? Which is more likely to defend against bad results?

I’m just asking. I don’t know.

If You Can’t Live With Mistakes Keep Your Day Job

Advice, Business Mistakes,

I’ve had several discussions lately, by coincidence or not, of entrepreneurs looking at fear of failure, fear of launching, and dealing with mistakes.

I really believe one of the most important qualities of a successful entrepreneur is acknowledging and accepting mistakes. If you are going to start a business, or run a business, or grow a business, you will make mistakes. It comes with the territory. You have to deal with uncertainty all the time, you have to make decisions quickly, and you won’t always be right.

Some people can’t live with mistakes. They plague themselves about them. They manufacture intricate stories about how it wasn’t really a mistake. They get so afraid of making them that they don’t do anything. They are constantly on the defense.

Don’t let that be you. Keep your eyes open. You’ve made mistakes, you’ll make more of them. Embrace the mistake, take long enough with it to catalog in your mind what you did wrong and what you’ll do differently in the future, and then let it go.

If you can’t live with mistakes, keep your day job.

Perhaps it’s not a mistake that the “business mistake” category in this blog has 116 posts — not counting this one. And I love John Caddell’s mistake bank blog posts at themistakebank.com.

(image: opensourceway via Flickrcc)

How to Stop Micromanaging in 3 Easy Steps

Business Mistakes, Weblogs, ,

How could anybody resist this title? How to Spot a Micromanager, on Liz Strauss’ Successful Blog.

As I clicked I was guessing my answer: My guess was that the micromanager would be that person you know who is chronically frustrated with people asking him or her questions all the time instead of just doing things. His or her lament would be: Why don’t they take any initiative? Why does everybody ask me every little detail?

Micromanaging isn’t just what you do; it’s the natural result of what you did: you gave (or pretended to give, because you didn’t really give it) a job to somebody, then you second-guessed their decisions and complained about results. It’s cause and effect. Ask somebody to do something and then complain that they did it wrong, and they’ll never make a decision again.

That’s not exactly what that post said, but it was close enough. And that left me thinking about what might be much more important: how to stop being a micromanager. Here’s my prescription, learned the hard way, in three steps:

  1. Give a person a whole job, not just pieces. Discuss the possibilities and uncertainties related to the job. Agree on expected results, the range of possibilities, and how to measure results.
  2. Close your eyes trust them. You didn’t want to do it, you wanted it done, so let it go. If you didn’t trust them then you shouldn’t have asked them.
  3. If you don’t like the results, you have two choices: never again delegate to that person or support them with the understanding that they had to make tough choices on the fly and you still trust them even though you don’t like these results. Make it clear that you know you might have had the same results too. Remind yourself that there was uncertainty from the outset. Don’t second-guess their decisions or they will never make another decision without asking you.

From what I’ve seen, micromanagers unwittingly create their own problem by making people ask them every detail. If you’re my boss and you don’t like what I decided, then I’m not going to make a decision again; I’m going to ask you. I’m going to ask you in excruciating detail. And it’s not my fault, it’s yours.

For the record, Liz’ post took a different angle, but I think it’s another view of the same problem:

You can usually spot a micromanager a mile away – the individual who wants to be a good leader but goes about in the wrong manner. While trying to better their workers, athletes, students, loved ones etc. they end up creating an issue that was not there in the first place.

The micromanager in many instances becomes just that because they want to make sure everything goes according to plan, their plan.

Do You Underestimate The Tasks You Like?

Advice, Business Mistakes, True Stories, ,

I’m sure I do this and I’m wondering whether you think everybody does. When I’m asked to estimate how much time some task is going to take:

  • If it’s something I enjoy doing, like writing, or programming, or driving  on an open road, my estimate is always too low.
  • If it’s something I don’t enjoy, like chores, or long meetings, or driving through city traffic, then my estimate is always too high.

I’m serious. Back in the 1990s when I was actually programming real software product – I did a third of the code in the first Business Plan Pro – my estimates of the time things would take were terrible. Even today, when I’m mostly writing, the time I actually take doing this blog post, to name one example, is about three times more than what I would have thought when I started it.

And that’s a business problem, not just a random thought.  Coordinating and collaborating requires managing time estimates. How do you coordinate marketing implementation and launch, for example, if time estimates are wrong?

It was hell on me when I was getting any of my books finished. It was so much more fun to imagine them, outline and highlights and all, think about them, than to actually write all those words.

I tried to double or triple my own estimates for my own work, but that didn’t work very well either, because every so often I’d get really psyched on a job, get into a zone, and finish it as quickly as I originally thought I would.

So I have no solution to this problem. Maybe it’s a good thing to have jobs you like as much as I’ve liked some of mine. But it’s hard to deal with. Do you have a solution?

(Image: Enrico Fianchini/istockphoto)

Half a Manager is Way Worse Than No Manager

Business Mistakes, ,

So you’re in charge of other people. Your job includes their jobs. Your success includes making them successful. Congratulations. And good luck. Half head

That means you have to set expectations and follow up with encouragement, advice, collaboration, and honest evaluation of results.

Your full job is inspiration and feedback.

If you just provide inspiration, that’s maybe half your role.

If you just provide feedback, that’s maybe half your role.

If you provide only positive feedback, and no negative feedback — you want to be everybody’s friend, well-liked — you’re only half a manager.

If you provide just negative feedback, no positive — you don’t let them get away with anything — you’re only half a manager.

And half a manager is way worse than no manager at all.

(Image: Liwax/FlickrCC)

Entrepreneurs: Profits are Overrated

Business Financing, Business Mistakes, , , ,

Real entrepreneurs don’t make profits, and for good reasons. Huge oil companies make excess profits, sure. Smart entrepreneurs don’t.

And I don’t mean just the land-grab web companies like Facebook and Twitter don’t make profits. Growing companies don’t make profits. Can you be more successful than amazon.com and Jeff Bezos? Amazon didn’t make profits until relatively recently. No, I mean small business everywhere.

Ideally, you do want enough in profits to support an increase in working capital, which would be a single-digit percent of sales. But that’s rare in growing companies.

Where do profits come from? Money you take in as sales that you don’t spend in cost of sales or expenses. And if you want to grow, then money that might have been profits goes right back into expenses as more product development, more marketing, more smart people on payroll.

When Palo Alto Software was growing at double-digit rates during its teenage years, I made the order of priorities as clear as I could: cash flow break-even first (we didn’t have outside investors); growth second; profits third.

What do you think?