Date archives "May 2009"

Are You Micro Managing?

One of the qualities of an entrepreneur is that most of them strive for perfection. Things have to be just right, and they have strong personal opinions about a lot of different aspects of the business. I know this feeling a little bit too well! When I see something like a presentation, proposal, process, logo, website or any other aspect of the business that does not look or feel right, I am going to be on it and seriously voicing my concerns. To a certain extent , voicing your concerns and getting people to buy into your vision is something you need to be good at doing. However, it reaches a tipping point, when you start controlling every part of the entire process, and things start to lose control. Most likely, if you are a small business, the people you work with have similar passions and goals as you. Each one of them may have functional expertise in their respective fields, and if you begin to micro manage what they do…sparks are bound to fly.

The argument that you have to let go to grow etc, is all very well and great to hear and read about. However, a perfectionist will always be a perfectionist. Whilst figuring out this entire letting go concept, I began to realize that I was micro managing because the people I was working with did not have the level of functional expertise and drive that they needed to have. There was always this level of doubt about their ability to deliver on what was promised. I then realized this micro managing was entirely my fault. Some of the reasons this was happening was either:

1. I had hired or partnered with the wrong individual/s.: A common mistake for first time entrepreneurs, and a lesson I think we all need to learn the hard way. If you put a wrong person in the wrong seat, you are bound to see fireworks happen in some form or other. Identify the role you want the person to play, evaluate whether they have the expertise to deliver, and most importantly , the drive to see it all the way to the end.

2. I had obviously delegated insufficiently or ambiguously: No matter how great a person may be, if he/she does not know where they are going or what they have to do, things get complicated. From the get go tasks must be broken down into manageable chunks. Performance metrics need to be established and regular updates need to be provided. If communication gets muffled, you spend half your time telling someone things you thought you had already told them. Be clear from the beginning.

3. Addiction to control: Perfectionists like to be in control. It is how they reach a level of inner peace and satisfaction, knowing that things are in order. By micro managing we withhold that level of control and that is why so many small businesses remain just that small businesses. This addiction for control becomes one of the greatest detriments for entrepreneurs to evolve into better and more confident managers.

Everyone micro manages at some point or other. I acknowledge there will be times when due to circumstances, micro management will be necessary. However, if it becomes a habit, you will begin to lose your best partners and employees, it will limit the amount of work you can take on, it will also cause insurmountable levels of stress and anxiety and eventually may lead to your downfall.

Understanding Your Competition

At university many of us have taken courses in which we have been taught how to conduct a SWOT analysis. It is a simple matrix through which you evaluate opportunity and competition with an angle to using it personally on assessing yourself or your business. SWOT stands for strengths, weaknesses, opportunities and threats. As an entrepreneur this is an invaluable tool in understanding how to position one’s businesses, which areas need to be developed, which core strengths need to be highlighted and what to be wary about. It gives a holistic picture of both external and internal operating environments. Sitting down and doing a SWOT analysis on your competition is something that I really enjoy doing with the teams that I work with or coach. It is a fascinating discovery session where you break specific competition down, and analyze the best way to approach them. There are several variations on how to use your SWOT sessions.

Internal Analysis: The first SWOT analysis that needs to be done is on your own business. It is imperative to understand ourselves and what we can and cannot do. What are our core competencies, and in what places do we need to develop further to compete on a broader level. Only after we have a keen understanding about these facets, will we be able to align them with current situations in the market place, and carve out a niche that will play to our advantage.

Industry Analysis: The next session should be with your team, this is when you break down the industry that you want to operate in. This is very important from a holistic positioning point of view. One needs to be acutely aware about the opportunities and threats prevalent in the current market place. What are some areas of the developed core competencies that are viewed as strengths ,and where is the industry currently being under served. This helps the entire team to brainstorm ideas about where they should position themselves optimally so as to serve a relevant segment.

Specific Competitor Analysis: I usually like to do several of these sessions where we break down specific companies that are viewed as competition in our niche. I choose a company that is leading the industry, some operating in the middle quartile and some in the lowest quartile. These sessions provide much insight into best practices, specific segments where we could use our strengths to our advantage, how our competitors view us, where they are the most vulnerable and possibly even where synergies could be created. If you want to make your way to the top, you have to have a very good idea about who you have to beat.

Understanding your competition is critical in formulating a winning strategy. Being a startup we are often awed by the size, resources and abilities of larger competitors. Doing a SWOT analysis enables us to develop a balanced point of view that is pivotal to our success.

Starting Afresh

Picture partners quarreling, products/services not selling as expected, mis-hires, documentation in a mess, and just too many loose ends pulling everyone back. Most entrepreneurs will relate to all or some of these factors at different points in their startup phase. I know I have been there several times, and it is not a good place to be in. However, it is part and parcel of the path we chose. If you haven’t ever started your own venture, I do not want this post to give you a wrong idea, but these things do happen. Many a time they are inevitable and we have to roll with the punches. There are however a couple of choices that an entrepreneur has at times like these, and hitting the re-set button is one of them.

For example, a business has been running for a period of 18 months ,and has not being doing as well as it could . Some of the partners are aware of this while others may be oblivious to the opportunities lying literally under their noses. At times like these, if you have the passion and drive to take the business forward, the re-set button will involve purging the current status of the business by removing partners, getting your processes streamlined, setting realistic targets and clarifying your business vision. This process will be long, tedious and will involve lawyers. People tend to hang onto their equity with dear life even when they have lost all interest in the business venture. This is probably the most complicated part of re-setting the business. However ,when all is said and done, the feeling can be absolutely liberating. Having been through such a process, I know first hand the difference that can be made by starting afresh without the baggage that may have been holding you back.

When you really believe in something, and it has not worked out for you the way you had planned it too, it may be time to get some advice on how you could hit the re-set button and start again. Embracing your failures will not only make you stronger, it will give you the confidence required to succeed. I think Warren Buffer said it very well:

An Impatience to Succeed

I was discussing my early aspirations of becoming an investment banker with a friend a couple of days ago. I told him about my experience during my first internship at the investment banking division of a multi-national bank. It turned out, that to climb the ladder of success using this route would involve a lot of data-entry, and expert use of excel and powerpoint, for the better part of my 20′s and 30′s. It took me 3 days to quit my internship, on the grounds that this was definitely not what I wanted to be doing. During our conversation on the phone, I used the phrase “An impatience to Succeed”. I reflected on that phrase after the call, and realized that this was a common trait in many entrepreneurs. We have lofty ambitions for ourselves, and want to reach them as soon as possible. We may not be looking for shortcuts to success, but are definitely in search for a faster route than the traditional one.

In order to achieve this goal, we have to get off the beaten track, and figure out a faster and more efficient route to reach our target destination. This is the point where we begin to diverge, question the norms, and ask “Why can we not do this differently?” A mix of circumstances catapults us into the crazy world of entrepreneurship, where we have to take responsibility for our lives. In a way this “impatience” to succeed may appear to be jumping the gun, and not quite “earning” our success using a traditional path. The point that is constantly raised is, if we set out to achieve all these goals at this frighteningly fast pace, we will lose the ability to actually value success for what it is worth. Although I understand that point of view, I think it fails to address the fact that we all have different priorities and values through which we measure our success .

In conclusion this impatience to succeed, is synonymous with the drive that fuel’s most entrepreneurs to push them selves further. Testing the limits is something we live for, and though sometimes we do push a little too hard, that is how you learn about your thresholds. Putting yourself out of your comfort zone is not an easy thing to do, for anyone. It requires great confidence in your own abilities, as well as faith in your own ability to achieve what you have set out to do. Life really is too short to sit around and wait for things to happen. The world is moving too fast today, and if we do not keep our eyes on the ball, and push ourselves to our limits, we may live to regret what could have been…..

Two Lists Every Entrepreneur Needs

I got this post in through my RSS reader this morning. It is a Bnet article, and the headline caught my attention. I am quite into lists, and my to-do list is something that I reference many times, every single day. When I read the title “The Two Most Important Lists You’ll Ever Keep” I clicked on it immediately. What I found were two very simple lists, they really got me thinking . They were:

1. Things That Keep Me Up At Night.

2. Reasons I Get Up In The Morning.

Simple concepts often provide you a lot to actually think about. I think these two lists are truly very important lists that every entrepreneur should develop for him/herself and constantly update. The first list has the ability to reduce stress fairly substantially by the end of the day. Without this list you could ppossibly end up with something like …. have a crazy day at the office, and when you return back home your mind is still racing about all the things that need to get done, or the things that you may have missed doing. The problem without a list is that we tend to run through the same items several times, this can become tedious and overpowering. From personal experience I know there have been nights spent wondering about the events of the day or a big meeting the following day. There always seems to be something or the other niggling in your mind, the aim of this list is to bring a degree of order to this madness.

The second list is the bigger picture list. I have quoted Steve Jobs as saying “When I was 17, I read a quote that went something like: “If you live each day as if it was your last, someday you’ll most certainly be right.” It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself: “If today were the last day of my life, would I want to do what I am about to do today?” And whenever the answer has been “No” for too many days in a row, I know I need to change something.” This quote really brings home the importance of the second list for me . We need to constantly remind ourselves of our motivations to do what we do. Are we enjoying ourselves or just making our way through it somehow? This list should be a source of inspiration to affirm to yourself, that what you are doing has a purpose.

I have really enjoyed reading the above mentioned post and have to thank Sean Silverthorne for writing a great piece. I hope this post gets all of us thinking about the bigger picture and why we do the things we do.

Ever Felt Like Procrastinating?

Most of us have procrastinated at some time or the other, knowing fully well that we have things we need to do, yet, delay them because “something else” popped up instead. I have a report that needs to be submitted to a client by the end of the month, the end of month still seems relatively far, and I seem to be filling my days with everything else but the report! With the advancement of technology, procrastinating has become a lot easier. Hours pass by using facebook, twitter and youtube. Even going through my RSS reader and catching up on the blogs that I follow can take hours at a time if I am not careful. All of this has created a greater need for discipline in our daily routines. However, by and large, entrepreneurs do not like following routines very much.

I handle routines by batching my day into several compartments. I allocate time slots for each project that I am working on, and spread them through the day according to what I feel like doing next. My blog gets 90 minutes everyday. During this period of time, I can either write a post, research my blog and figure out how to improve it, or read other blogs within my niche that I follow regularly. Likewise, I have many such time slots that fill the entire day. It is a flexible way to keep on top of your work, and yet not be restrained by having to do any one particular thing at a given time. There are and will undoubtedly be parts of the day when I deviate from what needs to be done!

I use a software called RescueTime.that helps me keep track of time I spend on all activities on my computer. I strongly recommend you give it a shot, it is free, and will help you see just where your time is actually being spent when you are using the computer.

In the end we will all have days when we put off things that need to be done. However, we need to put controls into place to ensure that we do not have too many of these days within a specific period of time. Put checks and measures in place to ensure that you are hitting targets. Use programs like ResuceTime and GTD software to monitor where you are spending time. We should not wait until the last minute to deliver, this will cause our work to suffer and cause unwarranted stress in life. Start by arming yourself with a simple to-do list on a daily basis, and eventually build more sophisticated controls to ensure that you perform at your potential, for a major percentage of the time.

Taking the Initiative

A defining characteristic of entrepreneurs is their ability to take initiative. When everyone around them is talking about a developing trend, or a hot market that is opening up, they are already putting steps into place to take action. This is what differentiates them from the rest of the crowd. It does however all start with the need to take control of one’s life. Personal ambition becomes the driver that causes an entrepreneur to break out on his own. Traditional paths are slow, and often leave a lot to be desired. They do work for a great many, but for the entrepreneur, are often a source of frustration. This is when the initiative factor kicks into gear for the entrepreneur, often revolving around a situation or process that may be causing a great number of people tremendous difficulty. A good example of this is to rewind back to the year 1996 , when Sabeer Bhatia and his partner were having difficulty accessing their private email boxes from work. Therein lay the birth of Hotmail, setting the standard for webmail.

Taking problems being experienced by people at large, and solving them, is what taking initiative is all about. We have to address pain points with novel solutions, benefiting all those experiencing that problem. Identifying problems however, is the easy part of the equation. There are a number of different problems that we experience on a daily basis, that if solved, could make our lives a lot easier. Taking that first step, and addressing the problem with a solution is what takes courage and determination. Along the way, many people will probably tell you that the problem is too big, that you will not be able to address it, or that you are wasting your time. All of these ‘negative comments fuel and drive an entrepreneur even faster towards the impossible.

We have two choices about how we go about living our lives. Either we can take things the way they are, irrespective of whether they are good or bad, and just live with it. Or, we accept that each and everyone of us has the capability to take the initiative to put right the processes that need help. This will not only help increase the quality of our personal lives , but may also be of service to many, many others one day. Every journey begins with a single step, you have a choice as to which path you want to take.

 

The Art of Negotiation Revisited

The last couple of days I have been thinking about negotiating tactics. This is an area where many less experienced entrepreneurs face difficulty. There have been countless negotiations where I have been outplayed by more experienced business owners. My thoughts during the last few days have been around how lesser experienced entrepreneurs can shorten the learning curve, and negotiate on a more level playing field. Whilst going through my older posts I came across one from last year on negotiating better. I think it is a good primer to get thinking in the right direction. It does not however provide a comprehensive analysis of the negotiation process. This is something I am working on with a couple of other entrepreneurs, and hope to update this post with a more detailed part 2 soon. In the meantime, if you have any tips and lessons that you have learned about negotiating , please comment below for the benefit of lesser experienced entrepreneurs. Thank you.

5 Steps to Better Negotiations

1. Motivations & Interests: At the heart of every negotiation, each side has a set of motivations and interests which enable them to take certain positions on issues. Before beginning the negotiations, identify your personal motivations and interests for resolving the issue at hand. Internal clarity helps greatly to communicate your message. Next, we need to understand the other side’s position, as also why they have taken it. What are their motivations and interests on the particular issue? The initial round or rounds of negotiation need to include candid discussion to ensure as clear a picture as possible. To read specific examples please click here
2. Focus on the Problem: The entire objective of negotiating is to find a mutually acceptable consensus. To ensure that this objective is achieved, we need to keep the process as simple as possible. This requires us to understand each other’s perceptions to ensure that we are on the same page. It also requires us to keep emotional baggage off the table. Lastly, we need to ensure that during the negotiation process both parties communicate clearly, and listen attentively. At the same time, we need to be aware of non verbal communications as well. Being focused on the issue and not deviating ,greatly improves the speed at which to reach an agreement. To read more specific examples please click here
3. Develop Options: The objective of the option development phase is to arrive at a set of mutually viable and beneficial options. To reach this objective much collaborative work is required. We need to have several candid sessions whose sole purpose is to chart out maximum number of options. Each side has to ensure that its position’s and interests are clearly communicated, with the entire focus on how to maximize expectations by working together on a macro level. To read more specific examples of developing options please click here
4. Alternatives: These are options which form our backup options if negotiations break down and agreement cannot be reached. Before the negotiation process, one should clearly list down all the available alternatives related to the issue at hand. Then list down possible alternatives that the other side may have. This gives a better understanding of how much room there is to negotiate. Alternatives are vital negotiation tools and need to be used tactfully to ensure that a fair agreement is reached. To read more specific examples of alternatives please click here
5. Objective Criterion: These are benchmarks which provide a fair assessment to rate particular options against. Negotiations which use objective criterion’s usually result in fairer agreements. Therefore it is important that before one begins negotiations, criterion are researched and decided upon. Whether it is for purchasing a business or negotiating a salary increase, one needs to identify quantifiable metrics which can help make the decision making process easier and fairer.To read more specific examples please click here
Negotiations are usually not very straight forward. Much of the time, emotions get in the way which complicates matters dramatically and frankly confuses both sides on procedural matters. To say that we need to keep all emotion out of the picture is not possible. What we need to do is to exercise a great deal of self control, and constantly put ourselves in the shoes of the other side. Only once we begin to see negotiations as a two-sided process will we be able to progress to becoming a more skilled negotiator. I wish you the best of luck in all your future negotiations.

1. Motivations & Interests: At the heart of every negotiation, each side has a set of motivations and interests which enable them to take certain positions on issues. Before beginning the negotiations, identify your personal motivations and interests for resolving the issue at hand. Internal clarity helps greatly to communicate your message. Next, we need to understand the other side’s position, as also why they have taken it. What are their motivations and interests on the particular issue? The initial round or rounds of negotiation need to include candid discussion to ensure as clear a picture as possible. To read specific examples please click here.

2. Focus on the Problem: The entire objective of negotiating is to find a mutually acceptable consensus. To ensure that this objective is achieved, we need to keep the process as simple as possible. This requires us to understand each other’s perceptions to ensure that we are on the same page. It also requires us to keep emotional baggage off the table. Lastly, we need to ensure that during the negotiation process both parties communicate clearly, and listen attentively. At the same time, we need to be aware of non verbal communications as well. Being focused on the issue and not deviating ,greatly improves the speed at which to reach an agreement. To read more specific examples please click here.

3. Develop Options: The objective of the option development phase is to arrive at a set of mutually viable and beneficial options. To reach this objective much collaborative work is required. We need to have several candid sessions whose sole purpose is to chart out maximum number of options. Each side has to ensure that its position’s and interests are clearly communicated, with the entire focus on how to maximize expectations by working together on a macro level. To read more specific examples of developing options please click here.

4. Alternatives: These are options which form our backup options if negotiations break down and agreement cannot be reached. Before the negotiation process, one should clearly list down all the available alternatives related to the issue at hand. Then list down possible alternatives that the other side may have. This gives a better understanding of how much room there is to negotiate. Alternatives are vital negotiation tools and need to be used tactfully to ensure that a fair agreement is reached. To read more specific examples of alternatives please click here.

5. Objective Criterion: These are benchmarks which provide a fair assessment to rate particular options against. Negotiations which use objective criterion’s usually result in fairer agreements. Therefore it is important that before one begins negotiations, criterions are researched and decided upon. Whether it is for purchasing a business or negotiating a salary increase, one needs to identify quantifiable metrics which can help make the decision making process easier and fairer.To read more specific examples please click here.

Negotiations are usually not very straight forward. Much of the time, emotions get in the way which complicates matters dramatically and frankly confuses both sides on procedural matters. To say that we need to keep all emotion out of the picture is not possible. What we need to do is to exercise a great deal of self control, and constantly put ourselves in the shoes of the other side. Only once we begin to see negotiations as a two-sided process will we be able to progress to becoming a more skilled negotiator. I wish you the best of luck in all your future negotiations.

Made a Rash Decision Today

I had a left over stock lot of a product for which I had a couple of interested buyers. Most of them had made modest offers , no one had really made an aggressive push to close the deal. Today, a new buyer came into the picture and after evaluating the lot, made a cash offer on the spot to close the deal. The price he offered was around 20% less than what I think I could have got if I had opened up the bidding to all the prospective buyers. However, this buyer was pretty savvy, and probably took advantage of the fact that the other buyers were not biting, and made a one time cash only offer. I did not put up a real fight during negotiations, and gave in pretty easily I think. The amount sacrificed in this process was not a great deal, however, the lesson I took away from it will hopefully enable me to make more from future deals. Some things I took away from the deal today were:

1. Evaluation Period: Unless the offer made is substantially higher than the true value of the stock it is best to avoid making any rash on-the-spot decisions without evaluating alternatives. During negotiations, emotions tend to take over ,and we end up making decisions that we regret later on. From the closer’s point of view this is the exact position you want the buyer/seller to be in. This is the point of the most vulnerability, and the probability of closing the deal shoots up dramatically. I am a rather impulsive shopper, and do believe this is an aspect I need to work on.

2. Get some Feedback: Bounce the offer with partners or friends who may have some insight into the deal. It is always good to get an outside opinion. Sometimes we get so engrossed with the dynamics of the deal that we lose sight of the bigger picture. It also provides us with some breathing time and space to evaluate the offer, and see whether it is worth pursuing.

3. Do not Over Think it: This may be somewhat contrary to what I have written above, but it is important that we do not let time and an overload of information stop us from reaching a consensus. Sometimes, offers have short windows, and require quick decisions. This is a very effective closing tactic. We are required to expedite the evaluation and feedback process as fast as we can. Today, I could have made a couple of phone calls that may have swayed my decision. If however we overthink things, and take too long to reach a decision, we lose out on value that may be gained from deals with a short time window.

In conclusion there are three kinds of deals. Great deals, where you know you are getting the better end of it, bad deals, where you know you are getting the raw end of it, and the ones that fall in the middle. Dealing with the first two is relatively easily. However most deals will find themselves in the middle segment which is where experience will come into play. I hope my experience today can be of some benefit to readers of the blog who are currently negotiating similar deals.

Wanting to Break Free?

I just read Guy Kawasaki’s interview of Pamela Slim, the author of ‘Escape from Cubicle Nation’ at Open Forum. It is an interesting read on a widely discussed topic these days. Corporate instability and the present state of economy has a lot people out there looking into alternatives. Making the jump from a corporate job, where everything is well defined and monetary compensation is guaranteed, is not an easy one. I have had this discussion countless times with friends who talk about breaking free and setting up something on their own. Most of them often end up reaching the conclusion that ‘we need a little more time’. As Pamela mentions in the interview ,there will never be a ‘perfect’ time to start. At some point, one needs to take a leap of faith and just jump. I have never really experienced the feeling first hand, apart from the job offers I turned down straight after graduation and ventured out on my own. I can however understand that there is a lot of pressure in making this decision. Whenever I am faced with a tough decision, I like to break it down. Somethings you may need to evaluate are :

1. Why are you wanting to make the jump? Before making any major decision we have to ask ourselves what is the motivating factor. Is it fear that you may lose your job? Is it because you have found something that you are truly passionate about? Is it all about the money you could potentially make? Is it because everyone around you seems to be making the jump? List down all the reasons why you think this may be the right or wrong decision to make at the time being. This brings balance to our reasoning and helps us avoid making any irrational decisions.

2. Are you truly passionate about the business you have selected to pursue? I have talked about the importance of passion, time and time again on my blog. Doing anything without passion, more often than not leads to disappointment and loss of interest, very quickly. When an individual has that inner desire to learn and give more, it has a positive effect on their work. Everything becomes richer, more meaningful and work is no longer viewed as just “work”. Finding what you are truly passionate about, often requires a trial and error process. Experiment frequently until you find something that you can see yourself doing for the rest of your life.

3. Do you have a plan? As mentioned in the interview, it is not essential for you to have one of those business plans with all the bells and whistles that VCs require. What you do need to do is define your business concept, who you are going to be selling to, and why, and how you plan to achieve your target sales figure. It is important that you chunk the business plan down into manageable components for it to not become overwhelming. In the first couple of days it is important that you see yourself making some progress. Getting off to a good start puts you in a stronger mental state, and boosts your confidence levels.

If you are wanting to break free I do not think you could choose a better time to do so. The internet has made starting a business a lot easier than it used to be. However, with competition scaling back and many people too scared to make that leap of faith at the present time , it is a great time to get a head start. Things will turn around, and when they do, you will be positioned a lot better than the competitors who join the race later on.

I would really like to hear from readers who have made the jump recently and started their own business . What were some of the main hurdles you had to overcome and how did you do that? Look forward to your comments and feedback.