Category Archives: Management

A True-Story Reminder About Pricing In Consulting

Business Stories, Management, Marketing, True Stories, ,

True story: back in my business planning consulting days, 1983-1994, Apple computer was by far my best client. I worked for the Latin America group, then Apple Pacific, then Apple Japan, and a bit for Apple USA and Apple Europe. I facilitated a lot of business plans, and did market research and some country plans, single-issue plans, and so on. I also worked with other clients, of course; but I depended on Apple.

money trapI priced my consulting by the engagement. The client would describe the job, I’d write a proposal, set a pricing and billing schedule, and then stick with it.

There was one person, among several dozens I worked for, who had a pattern of scope creep: meaning that after we’d agree on what was to be done for how much money, as I delivered the work in stages, he’d consistently want more than what had been agreed. It was always “But what about this” and “have you followed up on that?”

And it’s hard, as you know if you’re in this kind of expert business, to tell the client too often that what he or she is asking for is beyond the scope of the project. Sure, you have to sometimes, but it’s never easy.

So here’s my nugget about pricing: after I worked with that person and had that happen once, I was concerned with the problem. The second time he asked for a job, I wrote the proposal much more carefully, trying to block out scope creep; but it happened anyhow. The third time he asked, I calculated what I would normally charge, and tripled it.

That pricing idea worked. I didn’t want to have an enemy embedded among my favorite clients. So he didn’t accept that proposal, and I didn’t do any more work with him after that. But we remained on good terms at meetings, and he didn’t lobby against me when my name came up.

The worst I heard he said about me, second hand, was “how can you guys work with him so much? He’s really expensive.” And that was fine with me.

Goodbye Office Hello Metrics, Tracking & Accountability

Leadership, Management, Technology

In his recent post Goodbye to the office, Seth Godin list a lot of good reasons for working virtually, remotely, or whatever you want to call that. He summarizes:

“If we were starting this whole office thing today, it’s inconceivable we’d pay the rent/time/commuting cost to get what we get. I think in ten years the TV show ‘the Office’ will be seen as a quaint antique.

When you need to have a meeting, have a meeting. When you need to collaborate, collaborate. The rest of the time, do the work, wherever you like.”

One thing he doesn’t mention there is accountability. Traditionally people were accountable for physical presence: butts in seats (and pardon the expression).  I’m not in favor of that old-fashioned metric. Technology gives us a lot of options. And meanwhile  we suffer the ills of commuting, overcrowding, energy use, and all the rest.

However, as old-style accountability fades, we need new management, with planning, tracking, and metrics. Not just people in seats, people in workstations, or people at desks. People getting things done.

(Image: Monkey Business Images/Shutterstock)

It’s Not the Technology That Makes You Dumb. It’s What You Do With Your Time and Attention.

Advice, Management, Personal Productivity, Reflections, ,

Yesterday I posted WSJ vs. NYTimes on How Dumb You Are or Aren’t on Huffington Post, tracking conflicting opinions on whether technology makes us all smarter or dumber. Smarter because it’s a lot of print, creativity, and intellectual work; dumber because of multitasking, distractions, shorter attention spans.

I find the debate interesting, but I go with the commenter to that post who summarized:

Seems to me that the Internet can do both. It probably depends on the person…

Amen to that. Don’t confuse tools with how they’re used. I think we all have that friend who’s petting the phone, reading email and doing instant messages while pretending to listen, and we’re all guilty of that sometimes (well, I am). But we also have that other friend who’s now writing seriously on their blog, taking up haiku via Twitter, and reading and writing like never before.

I grew up without all this. I was in my 30s before there was email, in my 40s before I got a cell phone, in my 50s when the dot-com world crashed, and in my 60s when I fell in love with Twitter. Back in that distant past, we still had endless choices of distractions and amusements vs. thinking and working. We still made choices. We still had to choose between staying late at the office, getting things done, or not. There were a lot of good business reasons not to take vacations. Today I find myself turning away from the computer at times, while talking on the phone, to focus on the conversation, without the IM interrupting me. And I find myself not doing that, wandering out of the conversation and looking at email, turning dumb.

The power of it all, these days, the instantaneous communication or whatever you want to call it, it’s just plain amazing. I love it. And yes, I misuse it all the time, just like you do.

But in the end, today as in the 1960s, what you value, who you are, and what and who you care about is a matter of how you spend your time. It’s a matter of focusing attention. You aim attention, or fail to; it doesn’t just happen.

And attention is time, and time is the scarcest resource.

(Image: HomeStudio/Shutterstock)

Real Leaders Know What They Don’t Know

Advice, Leadership, Management, , ,

I’m afraid this might be a theme. I posted In Praise of Not Knowing here April 30, an ode to the value of respecting uncertainty. I suggested there that not knowing is a sign of intelligence. I’ve caught it a couple of times since in the context of leadership. Leaders know what they don’t know.

Bob Sutton recently posted his 12 Things Good Bosses Believe on one of the Harvard Business Review sites. Here are two points in his 12 that go straight to that point.

  • I aim to fight as if I am right, and listen as if I am wrong — and to teach my people to do the same thing.
  • One of the best tests of my leadership — and my organization — is “what happens after people make a mistake.”

Several months before that, also on a Harvard Blog, Bill Taylor posted Real Business Geniuses Don’t Pretend To Know Everything. Consider this:

In simpler times, fierce personal confidence, a sense of infallibility as a leader, might have been a calling card of success. Today it is a warning sign of failure, whether from bad judgment, low morale among disillusioned colleagues, or sheer burnout from the pressures of always having to be right.

I particularly like that last phrase: “the pressure of always having to be right.” That’s a hard path to take.

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Name This Oldie-but-Baddie Business Tune

Business Ethics, Business Stories, Management

Has this happened to you? Somebody does you wrong, and you take the high road, decide to forgive and forget; but even so, that person avoids you from then on? So you really don’t even have a forgive and forget option? It seems so ironic. And quite common.

Help me. I need a name for this. Double-cross double whammie? Twice-baked business mistake?

Here’s a true story. It happened so long ago that I don’t mind telling it. The guy in question, call him Guy One, was a distributor of Apple Computers in Latin America, and I was business planning consultant to Apple’s Latin America group. Once, over a couple of beers, I told him I was thinking of starting a business localizing major software products for Latin America.

He said nothing significant at the time, but within two months he’d started a business intending to localize software for Latin America. It was pretty much the business I’d described. So much so, in fact, that I learned about it when a mutual friend remarked on my having partnered with Guy One on that localization business.

I told him no, I hadn’t done that. He answered: “well then, Guy has done it on his own, and it sure sounds like exactly your idea and your basic plan.”

The truth is that I was miffed for about five seconds, but I let it go that quickly because 1.) I’d never really convinced myself that it would work; 2.) I was more interested in keeping the business I was already doing; and 3.) (Practicing what I preach) I didn’t own the idea. Nobody owns ideas, so if he did it first then more power to him. That’s business, and the idea belongs to whoever builds a business around it.

But from then on – and this is my main point here – Guy treated me like his enemy. I didn’t treat him that way, but – and note the irony – he did to me. I guess he was embarrassed. He started avoiding me, causing some business awkwardness in my consulting business. As soon as I guessed the problem I called him and told him that I’d heard he was doing the localization business and that I was fine with that; I wasn’t going to do it anyway and I would even be happy to help. I made it clear I didn’t care. But the business relationship never recovered. Hence, my use of the double whammy: first, a business double cross; second, a business problem you can’t solve by letting bygones be bygones.

Since that time I’ve seen it a lot of times, and in regular life too, not just business. The aggressor ends up avoiding the victim, causing the double whammy. I guess they don’t want to be reminded. But it is ironic.

Or could it be that his localization business failed?  That came a couple of years later.

Has this happened to you? Can you think of a good phrase for it?

(Image: 1000 Words/Shutterstock)

The Secret to Gen Y Top Performers

Advice, Leadership, Management

The man looked about late thirties or so, the young woman with him early twenties, both well dressed, and acting like family, brother and sister, or niece and uncle, rather than a couple. They were both well equipped with fancy phones, laptops, and the like.

I didn’t mean to listen to their conversation. I couldn’t help it. They stood near me on the train-like transport from the gates to the baggage claim at Washington Dulles airport.

He: “So how do you like the new job?”

She: “I like it a lot. I’m really glad I switched.

He: “Why?”

She: “They care what I think.”

And that, in a nutshell, is why I like working with the Gen Y youngsters. Maybe I have a natural affinity to the Gen Y group because I’m 62 and there’s a jumping-generations phenomenon going on. Could be. Whatever it is, I find these ambitious, impatient, amazingly entitled early-20-something people a kick to work with. As in fun.

And, after all, “they care what I think” is a good thing to want in a job. She didn’t say the salary, perks, or whatever; she wanted to matter.

5 Ways to Tell You’re Too Corporate for Entrepreneurship

Business Mistakes, Leadership, Management, , , , ,

I was reading Should We Worry About Older Entrepreneurs? from Small Business Trends the other day when I stumbled upon this intriguing quote:

Field also worries that entrepreneurship might not be right for older Americans because these folks have spent too much time in the corporate world.

corporate towersHmmm … a bit of a generalization, no?

In honor of that thought, with a tip of the hat to comedian Jeff Foxworthy’s “you might be a redneck” routine, here’s my list of ways (none of them age related) you can tell that you just might be too corporate:

  1. If, when you see $850 or $1,450 in the budget, you assume that means $850,000 and $1.45 million (you ask: the numbers are in thousands, right?), then you might be too corporate for entrepreneurship.
  2. If every time you encounter something that has to be done, you look immediately for staff people to assign it to, then you might be too corporate for entrepreneurship.
  3. If you measure yourself and everybody else by office or cubicle size and layout, then you might be too corporate for entrepreneurship.
  4. If problems are to be ducked, and monkeys to be passed on to somebody else, then you might be too corporate for entrepreneurship.
  5. If having a reason why not is the same as getting something done, then you might be too corporate for entrepreneurship.

But just age? Age might make a person too old, but not too corporate.

(Image: Fisherss/Shutterstock)

Business Plans, Plan A vs Plan B. Real or Fiction

Business Planning, Management, Planning Fundamentals, , ,

Very interesting talk from earlier this month on Stanford’s Ecorner. This is Randy Komisar, of Kleiner Perkins Caufield & Byers, as part of a one-hour talk built around his book Getting to Plan B.

http://ecorner.stanford.edu/swf/player-ec.swf

That’s a two-minute piece. Interestingly enough, it was followed immediately by an additional one-minute piece, called the Benefits of Mapping Plan A. That’s also important.

http://ecorner.stanford.edu/swf/player-ec.swf

In Planning, Not All Metrics Are Created Equal

Business Planning, Management, , , ,

This is an important point. More and more I’m focusing on metrics as a vital component of any useful business planning process, but then I read Entrepreneurs: Beware of Vanity Metrics from Harvard Business Review, which warns of …

… the curse of vanity metrics, numbers which look good on paper but aren’t action oriented: website hits, message volume, or “billions and billions served.” They look great in a press release, but what do they accomplish?

Metrics are magic, or at least that’s what I’ve written in a number of places, related to business planning. But maybe I should have written good metrics, or valid metrics. Metrics as measurement become accountability, which becomes management. Build the metrics into your planning process, and you have better management, better steering, and better teamwork. Not just dollars, but metrics you can track, and metrics that are specific to different jobs, functions, and goals.

Good metrics might be sales, costs, expenses, trips, seminars, ads placed, publications, leads, presentations, posts, tweets, retweets, calls, minutes per call, incidents per serial, and so on. You need things you can track.

But vanity metrics happen all the time. Those are the numbers that look good but come after the fact, without a direct link to cause or performance. I’ve used vanity metrics often enough to know. When preparing a presentation, find a number that looks good, and pretend that it shows progress.

Cool … but is that what you were aiming for?

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5 Ways to Build a Team that Builds Itself

Management

(Note: I posted this yesterday on the Amex OPEN forum. I’m reposting here for your convenience. Click here if you prefer the original.)

Looking back now at more than 20 years of running my own business, it was rarely about anything as simple as just making money. Money mattered, no doubt; in fact we had a lot of debt resulting from the business during bad years, and no outside investment until much later, so money was the critical resource. But it was also about doing what I liked, building a place I liked to arrive at Monday morning, working with people I like and respect, and avoiding boredom.

3d balanceI don’t think anybody builds a business without hard work. But it doesn’t have to be all blood, sweat and tears. I’ve always hated micromanagement, and I’ve never been good at negative feedback, so I’ve had to come up with some extra help to get through it without being a tyrant, but still building a business.

Sure, everybody always says it’s about building a team, but there are teams that work together by pitching in, teams that work in fear, and of course teams that don’t work at all. I can’t say that I’ve figured any of this out for sure, but these five rules seem to have worked pretty well for me:

1. Build your business around believable values

People naturally rally around things they can believe in. Is there anything in business as powerful as believing that what you’re selling is good for your customers? It takes people to grow a company, and people work better when they believe in what they’re doing. Do they walk out the door at the end of the day feeling like they’ve made people’s lives better? It doesn’t have to be natural cosmetics or clean energy or organic food, necessarily; you can even sell used cars in a way that makes your customers’ lives better.

Think of how much shared values can empower your team and motivate your people. Think how much they can liven your marketing. Think about credibility and authenticity.

2. Empower your people

Micromanagement is a real drag. It’s hard to do and annoying as hell. Hire smart people who share your business values, give them ownership of what they do, and trust them. The idea of owning tasks and functions and specific areas of the business is really important. Wherever possible make sure a single person, with a name and a face, is responsible for things — not a group.

Then you have to trust them. Offer them help, collaborate, and empower, but without second guessing.

The real test is when they get bad results or do things differently than you would have. If your team is going to work for the long term, you don’t second-guess or take potshots. Do that once and you’ll have somebody coming to you forever after, always making you, instead of them, make the decisions. And that will be your fault, not theirs.

3. Live the metrics

People love metrics: scores, statistics, grades, and so on. In business it’s not just the money in the accounting reports (although that’s good, believe me) but also the visits, trips, presentations, calls, support incidents, emails processed, minutes per call, and so on. It might seem very un-hippie of me, but that’s actually what we meant, back then, when we were saying everybody should dance to their own beat. That’s metrics.

People who own their own metrics have something they can work toward, that you and they and their peers can see. People who succeed love it. And people who don’t succeed need to know they didn’t.

By the way, this is about the business planning process, setting metrics collaboratively, and reviewing results. Your business planning should also be your management dashboard.

4. Make feedback a constant habit, not an occasional event

I could call this one “tell the damned truth.” And that’s often hard. I hate those annual and semi-annual review processes that serve to fossilize feedback in formality.

Negative feedback is hard. Unpleasant with people you work with, your team members. Doing it easily, honestly, and without delays is one of the better ways to ease the pain. The metrics themselves, in my point 3 above, can make this infinitely easier.

When things go badly, talk about it. Don’t pontificate from above; recognize the pain, bring it up, talk about it, collaborate in finding a solution. Move people around if you have to, give them different jobs, and if that’s not possible, then let them go. Hiding failure is bad karma for everybody.

5. Use mistakes as fertilizer

Yeah, fertilizer smells like excrement, and so do mistakes. But if you’re going to survive long term in your own business, you need to expect those mistakes, acknowledge them, and feed the future with them. This whole feedback thing isn’t about getting the goods on people so you can use it against them later. It’s about building a better team, working on knowing strengths and weaknesses, and using that knowledge to grow slowly better instead of just stagnating.

We make mistakes. Everybody does. Get on with the business.

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