Josh Richards "jrichard"

How To Get Better At "Trying Everything"

2009-07-11T09:40:00.001-07:00

Sometimes we tell ourselves (or hear someone else say):

"I've tried everything. I just can't do it."

(With some variation of the second sentence.) The only problem is: it is hardly ever true.

It's important to recognize there is a difference between trying everything possible versus trying everything we can think of. This comes up daily, for all of us, while in the search for solutions to problems (ex: getting new business, finding a job, etc.) , tackling projects at work, and personal goals.

Sometimes we even convince ourselves we've been "working our ass off", where the real problem isn't that we're not motivated but that we've been floundering around doing seemingly useful "busy work" because we lack a clear idea what we should be doing next to move forward towards our goal. (An aside: Copying what others are doing, who may be not be all that better off, often isn't a good shortcut either).

I usually get into these ruts when I'm feeling one or more of:

tired
overworked
too focused
overwhelmed
unfocused

The best cure for me is some combination of:

taking a walk
studying something unrelated
reading a good, intellectual and perspective stimulating, newspaper (ex: NY Times, Washington Post, Wall Street Journal, etc.) in print (hard copy, old school, not on-line)
grabbing a letter or legal pad and writing down all the to do, worrisome, and upcoming items, goals, ideas, etc. I have sloshing around in my head (and also in my sub-conscious as a result)
watching a favorite or engaging fictional TV show
breaking the priorities/goals/to do items down into smaller blocks, chunks, to do lists
sleeping on it
clearing my calendar of outside appointments
taking a long drive (sometimes with the commitment to not come back until I've figured out a next step)
kicking the idea around with my wife, a partner, or a close friend or colleague
getting out, often to a coffeehouse to do some people watching
re-prioritizing my top 5 items (and adding anything else that comes to mind to the "6+ item", not bothering to prioritize it specifically since there's little point in worrying about the specific order of anything other than the top 3 to 5 at any given point in time)
cleaning my work area, home office, or the even some area of the house

You get the gist.

It's just too easy to get stuck. It is inevitable. There's no profit in worrying or trying to prevent it. The only two things worth spending some time coming up with solutions to are:

How to recognize when you are stuck, as early and often as possible
Things to do to cure it

We have to develop personalized ways to get unstuck. There's no point in fighting or trying to avoid these situations outright -- they are bound to occur despite our best intentions.

This post was (in part) inspired by this excerpt from an excellent book I'm reading by Jay Abraham called "The Sticking Point Solution: 9 Ways to Move Your Business from Stagnation to Stunning Growth in Touch Economic Times":

Usually when people claim to have "tried it all," they haven't. They're stuck thinking within the same old mindset. And I've seen this revealed--firsthand.

At a Tony Robbins seminar I ounce attended, a man came up on stage, in front of thousands of people, and asked for advice. "Tony I've tried everything to make more money. I can't do it."

Tony was skeptical. "Name the last twenty-five to thirty new tactics you've tried in the last six or seven months and describe how each performed."

The man was speechless. He couldn't name a single one. Tony didn't give up. "Okay, name just ten." The man could only mutter unintelligibly before Tony finally drove the point home: "Just what have you done?"

The man's response shocked me: "I've looked in the want ads, and I've gone to a few franchise shows." Those two attempts hardly amounted to the "everything" he claimed to have tried. With his creative process stuck, the man was simply unable to see beyond the traditional methods he knew.

Usually, when I'm working with clients or myself, and start to feel "stuck" it's not due to a lack of intelligence, capability, confidence, or ambition. It's just a loss of perspective. When these times hit, it may be good to remember this post. We could all use a little perspective every once in a while.

Sometimes I (we) get stuck and don't even realize it. That has me thinking that we should build some of the cures for being stuck into our routines, even when we think we're on top of things. Because, even under the best of circumstances and when we're making lots of progress towards our goals, there are always others ways to look at things.

So, in conclusion, I'm suggesting this philosophy (for myself and perhaps for you too): Don't lose sleep over it, just keep your eyes wide open and keep moving forward. Go out of your way every day, to use some of the cures that you know keep you from getting stuck, so that you can be confident you're keeping your eyes wide open.

My 6 Biggest Business Mistakes (Thus Far)

2009-07-08T14:52:00.000-07:00

When I started this post it was, initially, entitled my THREE biggest business mistakes. Then it got longer, more occurring to me as I typed. There are many more but I decided to limit it to the six that stayed top of mind, figuring they were probably the most important (thus far), and that I view as also being highly relevant to other folks.

So here they are:

Assuming that what others are doing, who are seemingly successful, is the best way. Studying the competition is one thing. But the best path to take is usually based on a mixture of creative ideas of your own and those stolen from other completely unrelated industries. Study the competition to be different from them and to spot the gaps.
Listening to and considering advice from folks who, while well meaning, have absolutely no idea, credentials, or background in where I was headed. Even those in the same business do not warrant serious consideration unless they are on the same plane that you aspire too. For example, if you desire to be wealthy don't take advice from those who are not wealthy, even if they have your best interests at heart and sound savvy. This also means most talking heads on the television and reporters in general are not the best sources of wisdom. (Though they, or rather those they report on, may be good leads as to who to actually to listen to, talk to, read about, etc. yourself). Ultimately you have to make your own judgments regarding sources of advice. I spend a lot of time figuring out how to discover who to listen to on particular topics so that I can spend less time listening to noise from others who aren't truly helpful or, worse, are spouting B.S.
Not focusing. Once I had narrowed down who I was going to draw inspiration from, there came a point where I should have stopped looking for external inspiration and started applying my new found capabilities and knowledge gleaned from all that studying of other successful folks. Yes, the additional study of systems that had worked for others was beneficial (and continues to be, as I keep up that studying every day). There is no clear "starting line" but at some point I realized that for all the good stuff I was learning for the future I was also to a point where I could do plenty with what I had if only I got to work applying it.
Thinking that marketing (mostly) meant advertising (and also, in part, being cynical about advertising and sales). Marketing IS the business. And I don't mean that statement in the way I might have interpreted it before I knew what I know now. Combined with cynicism I might have written that statement off. But marketing is about everything: the features, the products, the service, the positioning, pricing, every interaction, etc. In fact, there is not one thing that you could name in any organization that isn't about marketing. Nada.
Not studying direct response marketing earlier. Holy crap. If you think good marketing and advertising is about pleasing and artistic advertisements, headlines that are a "play on words" in an attempt to sound cute, and winning awards than you are, worst case, a sitting duck waiting for competition to stomp you. Best case: you are spending money on marketing without any idea what is working and what isn't... and thus no measurable ROI or means to improve it over time (which still means you're a sitting duck: for a savvy competitor who understands direct response to blow you out of the water even as you boost your marketing spending). Effective advertising and promotion does not flow from the hands of graphics designers anymore than a professional baseball player's home run is the result of the guy who mows the grass at the stadium. You may argue it plays a role, and that may technically be true, but there are far bigger factors at work that should be focused on first.
Under-appreciating the importance of mindset. I am not just talking about positive thinking here. I'm talking about feelings about money, success, being wealth, not following the herd, questioning the status-quo, etc. And things like who you hang around with, focusing on results/outcomes over tasks, etc.. A lot of this stuff is sub-conscious or invisible until you start really learning about it so you can recognize it. It's even more difficult to spot because the majority of folks are oblivious to it. You can be ambitious as hell and still fail to reach your goals if your mindset is off-base.

That's all for now. I'm sure there will be to discuss another day. Perhaps a few folks out there will find this post helpful.

-jr

It's not JUST The Economy, Stupid.

2009-07-07T10:13:00.000-07:00

The economy can only take so much blame for the woes of many of us before a bubble of a different sort bursts: our own. Especially for those of us who are business owners, we need to remember that we're in business for ourselves.

Business owners are rarely innocent victims of circumstances. Sure we can't anticipate every possible thing, but no one forced us down any particular path either. We business owners, especially those of us in the developed world, have far more opportunities, protections, and levers at our disposal.

We suffer from the same weaknesses as anyone else such as complacency, fear of uncertainty, and the need for positive cash flow. But we are not entitled to being handed solutions to these needs and problems. They are our own and and we must seek solutions that are empowering.

First though we need to be honest with ourselves:

How much credit do we really deserve for our growth during boom times? Was it strategic or more the result of the pie growing around us? (i.e. did business fall into our lap... as well as our competitors... or did we attract it systematically and through compelling positioning?)
How much is our blame on the nebulous "economy" our way of deflecting from our own weaknesses, mistakes, and oversights while putting off the nitty gritty work of tackling them?
What's the profit in continuing to blame things that are outside our control while ignoring the things that are?

As a blogger Brandon Boyd recently said:

This economy is 'thinning the herd' of weak business practices. Its affect will be a benefit to the customer in the long run - as businesses that truly 'deliver' will remain.

I'd add that it'll benefit business owners in the long run too. Those that manage to do more than simply coast through economic downturns will build stronger businesses. They will be the leaders, regardless of economic cycles. Those that go away, well, they were lucky to begin with.

The truth may hurt but that doesn't mean it can't be helpful. The first step is admitting it, right?

-jr

First Step To Dramatically Boosting Your Marketing Effectiveness

2009-07-02T12:20:00.001-07:00

Too much marketing is impersonal and "me too".

Make your marketing personal, emotional, and human.

Start saying "I" a lot more. Talk to your prospect directly by saying "You" a lot more too.

It's harder to copy your personality than a slogan. It's easier to connect with a human than generic language.

And while you're at it, stop saying "we're the best". Show them, paint a picture, and lead them to realizing it on their own. Make it obvious but discoverable.

The secret to good marketing isn't fancy slogans or perfect copy. It's about connecting and relating. It's much harder to do that while being inhuman and generic even if it makes for excellent academic prose.

-jr

Entrepreneurs in Impoverished Third World Countries Better Credit Risks Than Those In the United States?

2009-06-11T15:09:00.000-07:00

I have mixed feelings about Kiva's recent experiments with lending to U.S. based entrepreneurs. I'm going to let that concept roll around in my head and read more about Kiva's own reasoning for the foray before making up my own mind (Prosper.com, Lending Club, Pertuity Direct, and others already seemed to cover that space... and do so as commercial businesses).

However, something else immediately intrigues me: Of the $34,576,235 of loans with completed loan terms to folks in third-world countries, the default rate is 1.6%. Pretty good. While it's not apples to apples (for one, Kiva individuals don't have credit score categories to map into for comparison; secondly, Prosper and Lending Club lend don't loan solely to entrepreneurs), that's actually better than the across-the-board peer-to-peer lending statistics at both Prosper.com (stats) and Lending Club (stats).

What interests me most is how the statistics will look several years: will the U.S. based borrowers have as good a record as the ones from impoverished third world countries?

Another interesting tidbit, which I realize can be partially explained by cost-of-living differences, is that the U.S. based borrowers have far larger loan requests in nearly all cases. Usually $5,000 to $10,000 (though there are some outliers that are $1,000-ish).

The only loans this large from non-U.S. borrowers (which are most of the sample base so this is a pretty accurate set of statistics) are actually from large groups of entrepreneurs who are only borrowing $200-$300 individually in most cases (this group lending is common practice in micro-lending in these types of communities -- it reduces lending risk since peer pressure combined with the other members covering when someone comes up short ensures repayment).

It may be an unpopular, uncomfortable viewpoint, or simply cynical but my gut tells me that a higher percentage of the U.S. based loans will default over several years. Not because they don't mean well but because even the poor in the U.S. take a lot of things for granted. Lots of low-income folks pay for cable television, overpriced hyped cell phones like the iPhone, manage to go to Starbucks everyday, etc.

Don't get me wrong -- I support micro-lending, even domestically. I'll be curious to see the data though. While third-world countries may suffer from the risk of political instability and lack of resource availability, developed nations suffer from taking things for granted and curious personal money management practices. Even our worst off citizens have it better than much of the world's population. That doesn't make either okay but it does provide some context and, I believe, a catalyst for different mindsets when it comes to money management, suffering, and learning from our mistakes.

Micro-lending continues to fascinate me in any case. Especially when it can be done with less overhead using smart software and the Internet. Too much overhead (background checks, interviewing borrowers, checking in regularly to encourage prompt repayment, following up on late payments, etc) relative to the loan amounts has traditionally been one of its main hurdles. One which Kiva.org has tried to break through and commercial peer-to-peer lenders have tried to make viable on-line.

-jr

The 3 Camps Business Owners Self-Organize Into During Downturns

2009-06-10T09:35:00.001-07:00

Those that give up. There's nothing dishonorable about this. Owning a business isn't for everyone at all times. Perhaps these folks will try again later. Perhaps they won't ever come back but they'll feel better that they gave it a shot.
Those that survive. They hunker down and manage to get by. They don't thrive but they survive. When rosy prevailing economic conditions come back they are not much worse of then they were before.
Those that thrive. They use the downturn as a motivator to tackle the elements they knew (or at least sensed) were missing previously. When business was just falling into their lap it was easier to put off things like establishing predictable and systematic business attraction mechanisms. While putting in the extra work now they will also be building a much stronger foundation for all economic climates. Their businesses will thrive and be far more durable. They will enjoy greater long-term profits, less frustration and uncertainty, and probably greater fulfillment as business owners.

Those businesses that focus on thriving and not just surviving are the counter-intuitive twist to all economic downturns: the output of the downward cycle consists of stronger, better and more focused and profitable businesses... and business owners.

Which camp do you intend to be in?
What small step can you take today to get moving in that direction?

-jr

Are You Making This Grave Mistake In Your Business?

2009-06-05T09:00:00.001-07:00

The single greatest opportunity for your business to prosper (yes, even now) awaits... are you blowing it?

Dramatic changes in economic sentiment and wholesale rewrites of entire industry structures leave a lot of chaos in their wake. That chaos is, for most of us, uncomfortable. For some it is very negative, dramatically changing the course of their lives, while for others it only leaves them confused and uncertain but otherwise relatively unscathed (when viewed objectively).

The gravest mistake I see, in businesses which are otherwise perfectly reasonable ones to be in still, is too much of an inward focus. Businesses do not exist to and will never prosper when they focus on themselves. Your business exists to create value for your customers. In both good times and bad there are customers for all manner of products and services.

You may need to tweak your present offerings. Or reach out to your customers in ways that you have not had to in the past. You may need to connect with them in ways that are relevant to the conversations they are already having in their minds.

In some cases, depending on what your value add to the world is, that may mean reminding them about what's going on while giving them a different perspective on the situation. In other cases your job may actually be to save them from all the doom and gloom.... by helping them escape from it even if it is just for a brief bit of time. Only your own capabilities intersecting with your chosen customers can determine where on the spectrum your positioning should fall.

The single greatest corollary of the above also presents business owners with a tremendous opportunity. It is one of the most ubiquitous yet largely untapped opportunities to be seen in a long time. It spans across industries, has nothing to do with technology, and hits at the core of what successful businesses should already - and always - be doing anyhow: connecting with and adding value to their customers lives.

This is always a goal, of any business. Yet, especially in so-called "good times", it is easy to get complacent and simply focus on what is in front of you, what is handed to you -- on the customers that just seem to fall into your lap.

But there are always more customers out there. In good times you are leaving a lot on the table but just don't realize it. And in bad times you want a larger share of what is normally left behind.

The key is to get your marketing, relationship building, product, service, and offer development efforts, and other keys to value adding aligned. By doing this in good times as well as bad times, natural business cycles flatten out more and even under very poor economic conditions things are bearable.

The point being that those who are able to not be paralyzed by recent economic turmoil and use it as an opportunity to build a stronger foundation for their businesses will also be more profitable in good times. Survival is important and prospering remains possible with the right foundation.

The world has not ended. It has simply changed albeit dramatically (at least on the short time spans most of us view things under).

Get moving. But hurry... you're running out of time to capitalize on this opportunity!

-jr

NTT Buys Grover-Beach Based Pacific Crossing

2009-05-25T09:18:00.000-07:00

The Pacific Crossing trans-Pacific undersea fiber network (PC-1) connects Asia and the U.S. It lands here (where I'm based) in Grover Beach, California. It was originally part of the Global Crossing network but was sold off during GBLX's restructuring several years back.

Today NTT (Japan's largest telco & a major international carrier in its own right) acquired it:

Official Press Release
Official NTT News Release
PC-1 web site

-jr

Ineffective Efficiency

2009-04-29T09:49:00.001-07:00

A great example of just how different efficiency and effectiveness really are. In business (and in life in general) it's very easy to fall into the efficiency trap while missing the bigger picture. If you're looking for a bump in effectiveness, look here.

This is also a rare example of an insurance company finding a way to align itself with its customers in a win-win all around.

(this particular situation also happens to be a good example of the nuances that can be picked up in one-on-one conversation that cannot be picked up in a form or even, at times, a a letter or an e-mail. Good food for thought when you're looking to overcome a disagreement, build trust, or tackle a perplexing situation).

When Leslie McMillan was hired as a director at Quebec-based Industrial Alliance in January 2004, the company processed disability claims rationally and efficiently. People seeking disability pay would submit their claims to the company, analysts would read them to make sure they were properly filed and then pass them along to independent medical experts to determine if the requests were valid. With the medical analysis complete, the company would then approve or deny the claim. It was a process designed to avoid errors and maximize efficiency. It took about eight weeks from start to finish. And it worked.

In spite of the success of the existing system, McMillan decided to change things. Based on her experience at another firm, she believed that Industrial Alliance could become better by inserting a little empathy into the system. She instructed the ten claims analysts in her division to call the people seeking disability benefits and interview them for a half-hour to learn more about them.

Within a year, the results were astounding. Across the disability division, the institution of policies that put people, not paper, at the center of claims analysis transformed the division. McMillan reports that spending on independent medical evaluations dropped by 80%. The typical time required to settle a claim fell from eight weeks to four. As analysts developed better interviewing and decision-making skills, the company was able to boost revenue by marketing higher-value disability management products instead of just offering claims evaluations. Employee satisfaction shot up as their powers increased. And lawsuits, a major expense for any insurer, dropped off precipitously as well. She estimated that whereas 12% of all claims had previously ended up in litigation, that figure had dropped to just 7%.

These are major improvements. How did this happen?

Read the rest of the story here:

http://www.businessweek.com/innovate/content/apr2009/id20090427_553433.htm

How To Get Dumber While Learning

2009-04-28T16:27:00.000-07:00

Alan Weiss, a very successful consultant, has said this many times:

"If you improve by 1% a day, in 70 days you’re twice as good."

Today I ran across a follow-on insight he had late last year that he appended to the end of the prior statement:

"But if you don’t learn carefully and instead become confused, the opposite can actually occur. People can get dumber."

I gotta say, that I know that to be true because I experience it again & again... with myself. I am so addicted to acquiring new knowledge that I constantly read books, newsletters, web sites, blogs, etc. When I'm doing it connected to a particular topic or concern (as opposed to more serendipitous research) I often find myself learning WITHOUT doing. Eventually I have to convince myself to bite the bullet, take what I've acquired thus far, and take action on it.

It's tough deciding, especially when you don't have a concrete deadline, to stop researching and pondering... and to simply take action. But, until you do, it's all theory and, well, generally not very useful.

-jr

Celebrity Cash Crunch - Or Your Own?

2009-04-01T19:10:00.001-07:00

Brian Cuban, who happens to be the brother of Mark Cuban (the owner of the Dallas Mavericks but which is irrelevant to the topic...mostly), has a good thought piece in Worth magazine entitled Celebrity Cash Crunch - We may secretly enjoy it when celebrities go belly-up—but would we do any different in their shoes?

Indeed... Heck -- with far less money to throw away -- most folks make the exact same financial mistakes. I suggest you read it here.

-jr

Nine Things Every Business Owner Should Be Doing in 2009

2009-03-25T08:52:00.001-07:00

Getting their marketing systems in order. When the economy is rocking often business owners get lazy about marketing systems used to bring in new clients, boost business from existing clients, and build strong moats around their businesses.
If they have employees, identifying the top talent out there and re-approaching them. They are more likely to be available and amiable between restructurings, underwater stock options, and employer uncertainty, etc.
With competitors and complimentary businesses hurting and credit markets tightened up, both public and private business valuations are low. Acquisitions made now will be far cheaper and, if astutely approached, achieve greater returns over the long run. In some cases, significant returns can be achieved even in the near-term simply by bringing the clarity of more mature marketing systems to a target that did well when the economy was gangbusters but lacked systems useful when things got tougher.
Re-evaluating their unique selling proposition, value proposition, and positioning. Going back to basics and reconsidering what sets them apart and how they communicate this (both in words and in actions).
Taking market share from weaker, distracted, and confused competitors
Boosting direct marketing activities with provable ROIs and cutting vague "branding" activities with less provable ROI (branding can still be a part of the direct marketing activities but it should be a secondary goal).
Reaching out to clients, experimenting with new offers, packaging, and positioning. Also talking to clients, prospects, and others about their concerns, wants, and desires. Even in downturns we all still have needs and wants that we'll pay to get addressed.
Cutting unprofitable relationships (clients, vendors, partners). Good times make us fat, stupid, and lazy. Nothing like necessity to force us to get back into shape.
Stay focused. On what? That's for each one of us to decide. But it's important it be done deliberately or it won't be done at all. There are always distractions but when combined with strong emotions and widespread uncertainty it's even more difficult to decide where we want to go and then keep our eye on it.

Are you doing some of these things? Can you think of others? Drop me a line josh.t.richards@gmail.com.

One Of The Toughest Roles In America Right Now Yet A Great Leadership Example

2009-03-20T10:25:00.001-07:00

http://blogs.harvardbusiness.org/baldoni/2009/03/how_aigs_edward_liddy_lived_to_figh.html

(I suggest reading his actual opening remarks linked to in the article; they aren't as long as they appear at first - only ~7 pages).

-jr

How To Offend Business Owners For Their Own Good

2009-03-08T20:35:00.001-07:00

"Downturn my ass; they had no strategy to begin with."

Lots of businesses are suffering these days. I feel for 'em, I really do.

What frustrates me though is that many have tremendous opportunities ahead... if only their owners would stop using the economy as a convenient way to avoid the truth (I'm sure you can come up with your own appropriate metaphor for this behavior). Downturns offer great opportunities for those businesses which are willing to face the truth and ask the tough questions that propel them forward.

A very agreeable phrase that I ran across awhile back[1] goes something like this:

"Luck is when opportunity crosses paths with preparation."

It's relevant to present circumstances, even if many would consider these unlucky times...

Let's take almost every local retail type business which I encounter. Based on observation, as a customer of many of them no less, the root cause is that they never had a plan for success to begin with. Their existence rested far too much on the opportunity portion and not enough on the preparation aspect.... of luck.

In short: their business models, being entirely reactive and not proactive, leave them (seemingly) powerless when(ever) the tide turns against them.

Recent economy woes are really just the final straws.

I can prove it.

To have sustainability the business owner must take deliberate action. And opening up the doors and putting up a sign... even having a good product or service... is not what I mean by deliberate. Nor is dropping yet another "me too" advertisement in the local paper or Yellow Pages.

(And if the only solution they can come up with is dropping prices, it just proves the point that our relationship could use some upkeep... on their part not mine; I'm the customer after all).

Maybe they intended to do more but found they didn't have to so they got complacent. Or maybe they've only existed in "good times" and never even realized they were missing something. Maybe they just barely skated by before and recent times has just proven how thin the ice was underneath them.

Whatever. The reason is irrelevant. What's important is that they get moving. (After all, with fewer customers, they ought to have more time on their hands). Some may also have to put their fragile egos aside... (a small price to pay for long-term success).

It's been said that great friends are ones that will empathize with you while also kicking you in the ass with the cold hard truth when you need to hear it.

So I have some questions for you...

Why aren't you collecting my name, e-mail addy, phone number, snail-mail address?
Why aren't you doing something compelling and useful with those "frequent customer" cards my wallet is bulging with?
When was the last time you went out of your way to communicate with me outside of your store?
Why aren't you trying to up-sell/cross-promote me something else that I might also find of interest?
Translate "why you went into business" into something along the lines of "what's in it for me" and tell me all about it
Why haven't you come up with a way to encourage me to bring in my friends to your establishment?
Ask me what I like about you establishment. Ask me what I don't like about your establishment. (Make me feel like you actually want me to be honest and not just "nice").
If I start coming in less often, reach out to me, so that I perceive that you actually noticed...
Why aren't you trying to sell me your products and services in different ways that may be more conducive to my current concerns, pains, and desires? (a hint: it's not as simple as just lowering prices... in fact if you play your cards right you can keep your margins... maybe even boost 'em)

I'm already your customer for crying out loud! Make me buy more, come in more often, and drag in my friends. Make me compelling offers...some of which I won't be able to refuse. Reach out to me in interesting ways... that show me you care about me more than wallowing in your "woe is me" attitude.

Yes, it seems that many places are suffering. It's too bad that economic woes are just a cover for the real cause of weakness in many businesses today: a lack of preparation.

Sure, sometimes one can scoot by but look where it gets you?

Whenever I have a client who seems to be treating symptoms and not the underlying problem I try my best to guide them back to reality. So, if you (or someone you know) falls into the aforementioned camp I leave you with this...

It's not (just) the economy, stupid. Get off your butt, stop lying to yourself and your friends to avoid a bruised ago, and do something about it. (Then, if it'll make you feel more motivated, consider how you'll be able to brag about how you kicked ass through the latest business cycle).

To change things you first must face the truth...

-jr

Footnotes:

[1] Another one, this one coined by Warren Buffett is: "After all, you only find out who is swimming naked when the tide goes out". Stated shortly after September 11, 2001, he was referring to insurers who had failed to price policies properly (too low), certainly weren't prepared for the worst and thus were suffering mightily - some fatally. It's an appropriate metaphor for many recurring situations in history - and thus in business and in life.

Biggest Misconception About Small Vs. Big Businesses

2009-03-03T09:09:00.000-08:00

Reading through HBR today I came across a discussion entitled "Big Company Lessons for Small Businesses". This quote is from Dick Harrington, former CEO of Thomson Reuters and who now works with early stage and small businesses through his investment firm Cue Ball. I thought it was particularly dead on:

"Most small businesses think that big companies have limitless resources and tons of money, and accordingly can do whatever they want. At the same time, most large companies think that all small ones are entrepreneurial, acting quickly, and bursting with creativity. Neither of these common beliefs is true."

The full article is on-line here.

And Here I Thought No One Cared About Coffee Quality Until Starbucks...

2009-02-27T11:51:00.000-08:00

This is a real ad albeit from the 50s.

-jr

IT Should Pay Less Attention To The Technology

2009-01-26T12:20:00.001-08:00

A lot of IT folks consider themselves to be a far cry from the marketing and sales departments. I have news for them: Get over it.

Within the IT department the toughest problems, the ones that can really have an impact on the organization, are not about technology. Successful IT leader's recognize this and figure out how to connect the IT group with real business needs of the organization. I hit on this a little over a year ago in "Can Technology Geeks Be (Good) Managers?".

But it's not as simple as it may sound.

This is about marketing and sales, even if the IT group's customers are in-house end-users. The essence of marketing, which includes finding out what is really needed/desired by a constituency and then figuring how to give it to 'em, is the essence of the IT department's mission too.

But a lot of marketers fail. And even enlightened IT groups fail... and it's for much the same reason. Why? Because they forget about the "What's in it for me?" principle. Where "me" is your customer/end-user not you... if you're the marketer...or the IT group.

Jay Rollins, recently writing at TechRepublic.com, hit at this from a different angle that deserves to be pondered (below replace 'customers' with 'in-house end-users'):

The technology was the easy part. Pulling together a solution that the customers actually wanted was the tough part.

As with all technology implementations, the tough part is not necessarily the initial technology. The services and business processes that are typically not part of IT’s purview or area of expertise are usually what makes or breaks a successful technology implementation. Challenging long-held assumptions and having the intestinal fortitude to carry the ball across the goal line regardless of how tough it actually is separates the outstanding IT leader from the rest.

How are you making sure too much emphasis isn't being placed on the technology and the IT department itself?

A quick and dirty test:

How often do you question _IT_ best practices? (many don't make sense in a particular organization or at a particular time; similarly many so-called best practices are really conventional wisdom... and questionable tidbits at that)
How much do you argue over technical elegance versus pragmatic business aligned solutions?
How much do other groups grumble behind the IT groups back?
How cynical is the IT group about other groups?
Has the IT group done anything other than ask to be included in early strategic and tactical planning that has a technology component?
Have you explained your position not from the perspective of the burden it places on IT but from the perspective of the burden it places on the business? In marketing, those marketers who talk about themselves don't do as well. Those who talk about things from the perspective of the prospect, enjoy far more success. What is in it for your "customers" (end-users) not just you?

Each organization is different and IT can't work in a silo... nor can IT blame everyone else for its problems unless its willing to view the world with eyes wide open.

-jr

Pro Soccer Coming Back To SLO In 2 Weeks!

2009-01-23T15:28:00.000-08:00

I just finished buying our tickets (for both games)... go get yours here. We went last year and it was lots of fun! It, ultimately, motivated us to go to a regular season San Jose Earthquakes games. But seeing them play in a much smaller - more intimate - stadium, locally to boot, beat that because you are so much closer to the action.

During the opening, they have a couple lucky local youth soccer teams walk the pro guys out (one kid per player), while they announce the starters. Last year one of the kids turned out to be one of my old client's offspring.

Cal Poly Athletics will host a pair of Major League Soccer exhibitions in the 2009 MLS Central Coast Showcase on February 13 and 15 at Alex G. Spanos Stadium in San Luis Obispo, Calif. The San Jose Earthquakes will play exhibitions against expansion franchise Seattle Sounders FC on Friday, Feb. 13 at 7 p.m. and two-time MLS Cup champion Houston Dynamo on Sunday, Feb. 15 at 1 p.m.

“Cal Poly Athletics is incredibly excited to host the 2009 MLS Central Coast Showcase,” Cal Poly men’s soccer head coach Paul Holocher said. “To see world-class talent in your own backyard is just a fantastic opportunity. Whether you’re a soccer fan or not, this is an event to see.”

Last year, Cal Poly Athletics hosted San Jose as the Earthquakes played matches against the Columbus Crew and D.C. United. The Crew, 2-1 losers to the Earthquakes in San Luis Obispo, went on to win the 2008 MLS Cup.

Article continued here. Sitting chart for the stadium is here.

-jr

The Root Of All IT Problems - Cost: Free

2009-01-22T21:55:00.000-08:00

Simplification and perspective.

The lack of, that is.

I know how it is. We all get caught up in the day-to-day fire fighting. Business requirements change. Timeline warp. Scope creep.

The result is...

The endless, painful cycle of the treatment of symptoms. Not problems. Not root causes.

Ad hoc changes. Lots of 'em. Without any pro-active design. No big picture. High level thinking? Ha!

There's no time for any of that.

Then we either throw up our hands in frustration and run far far away. Or we hire an outside consultant that (we hope) will provide us with some much needed perspective (we know we need it we just don't know how else to get it). Consultants sell, when it comes down to it, hope and perspective -- and they are generally called in when we're fresh out of it.

Or we throw more bodies at the situation. But we're not used to letting people sit and "think" without any activity - we have fires to fight after all... we can't afford that luxury!

Or maybe we'll buy new gadgets to help us out. But they add more complexity, unknowns, and risks. Oh, and stuff for somebody to learn to apply appropriately. (Not to mention that we should have probably taken the time to make sure we understood what we were buying beforehand...)

Hmm.

I'm pretty lazy. That is, I don't like to do work I can avoid if at all possible. This includes having to tax my brain to work through complex problems.

It isn't that I'm not good at it. It's that I'd much rather apply my brain to other things... or at least make sure it's available for the next problem to come along...

For the longest time, this worried me. Until I realized an interesting habit it had ingrained in me as a result.... When I'm faced with a problem to solve, a new situation, or something else that smells of brain work -- I, without hesitating, click into "How can I make this situation as simple as possible because I sure as hell don't want keep thinking so hard about it if I can avoid it?". It's sort of like the situation where you know somebody who is known to "always be searching for the angle".

My angle is: "How in the heck can I simplify whatever the heck it is that I'm trying to do because I'm sure as well not interested in working that hard on it day after day?"

These days, with many of my consulting engagements, I'm called in to eliminate a specific problem... or make something possible. In the former, probably 9 times out of 10, there is a high probability that the "specific problem" is likely to be best solved by ignoring the known problem and tackling the underlying situation that resulted in it...

Which is usually where simplification comes in. And a healthy application of perspective - a clean approach - which is easier for me to apply than the prior folks since I have the benefit of hindsight -- but no less valuable to the client.

Simplify. MAKE the time. Make your IT infrastructure as simple as it can be. You do NOT really need an outsider to do this -- hopefully (but sometimes you do, and that's okay too).

Best of luck in your endeavors,

-jr

A Sign Your Start-Up Is Going To Fail

2009-01-21T17:12:00.000-08:00

We used to have this sort of thing come up at my last company so often that we turned it into a sales approach (that is, we'd help the prospect, usually gently, gain some perspective). That is why this quote hit home with me. Jeff Biggs, CIO of Peak 10 Data Solutions, has established a rule of thumb over the years:

“Whenever I see the Four Horsemen of the Apocalypse, I run for cover,” says Biggs. “The four horsemen are ‘We’re going to have big Sun servers, Oracle databases, tons of bandwidth and a bunch of consultants.’ You need to start small and see if you can make it work. That way, you’re a customer for 10 years and not six months.”

It's just so dead one.

When we came across this, we admired the ambition and vision, but we tried to re-focus the clients energies back into their business in other ways. An incremental approach makes far more sense. Things can always be ramped up for the right reasons when the time comes but it's tough to get back money already spent when things don't ramp up quite at the rate expected.

I'm not saying you should be a pessimist versus an optimist. More like a pragmatist. Toss a bit (not all) of the cash saved towards beefing up your "Slashdot effect" plans (as in, how you're going to get that level of success and what you'll do when it happens not what you've already done) and you'll be better prepared in any case. Besides are you sure you'd know what to do if you outgrew even the big stuff?

When we weren't able to make a convincing case for pragmatism, it wasn't unusual to see them last a year or two as customers... than pretty much disappear. Now even some of the pragmatic ones disappeared too but at least it wasn't because they spent all their cash before they'd even had a chance to become a success in the marketplace.

Most of the time, capital is better spent making the product/service more inspiring and actually getting real paying customers for the new product/service, and whatnot. Don't buy the big infrastructure stuff just because your IT advisor wants to prove his worth or even because you want to prove your own level of seriousness about the venture (there are far better way to do that...like by getting sufficient customers and cost structures in place to be a sustainable profitable enterprise that can afford to invest further in its infrastructure).

Commit your resources to the right things and the rest will come together as needed. Of course, I realize that is easier said than done but it's an important concept to strive for and keep in the back of your mind always nonetheless.

Are you involved in an IT (ad)venture like this? If so, I suggest refocusing the ambition to other aspects of the venture that could benefit from it, and talking the infrastructure over with an objective outsider before taking the leap. And, no, I didn't set out to make this post into a self-serving pitch... it just sort of worked out that way. :)

Best of luck in your (ad)ventures however big or small they may be or seem,

-jr

How Non-Profits Might Raise Their Online Donations

2009-01-18T22:36:00.000-08:00

Perhaps I'm unusual but I tend not to donate to non-profits that don't use Paypal or Google Checkout (or another large well known front-end processor) to accept payments. The reason is because non-profits are rarely large trusted brands, are usually underfunded and thus security isn't a high priority, and their web sites are often a hodgepodge of thrown together stuff hosted who-knows-where.

(It's not just non-profits I take this position with. I often click away from small no-name merchants if I can't be confident I'm bypassing their who-the-heck-knows-who-where-and-how web site to make the actual payment transaction).

I don't see justification for exposing my credit card so easily. With Paypal or Google Checkout, the credit card information is never exposed to the non-profits hosting provider. Plus, at least with Paypal, the person paying doesn't even have to have a Paypal account - any major CC with still do.

If you're a non-profit, give some consideration to how you might improve the trust level of your web site. Come at it with the mindset of a business doing e-commerce... someone may want to buy what you're selling but they also may click away because they are uncomfortable.

This is about more than having just an SSL certificate. Using https:// is meaningless if the server(s) behind it can't be trusted.

How can you give your customers (potential donors) the warm and fuzzy feeling when they hit your web site?

-jr

Are You A Buyer Or A Renter Of Your Stock Holdings?

2009-01-18T22:11:00.000-08:00

There's a lot of good stuff in this wonderful post. If you have any interest at all in investing in publicly traded securities I suggest a read:

How can the mindset of chief capital allocator help you distinguish between value and price? If you were in charge of allocating capital around the world, you wouldn’t be able to rely on the market to bail you out of bad investments. The greater fool theory of someone buying your shares at a higher price breaks down if the buck stops with you. Successful investors believe their return will come from the investee company’s return on equity rather than from sales of stock. This mindset produces a very different process of estimating value than if you rely on the market to establish value and then try to gauge whether a company was likely to beat or miss consensus earnings estimates.

[...]

Investment professionalization has had unintended consequences, as the ultimate owners of capital (households and endowments) have become increasingly detached from security selection. Short term-oriented “security holders,” such as mutual funds and hedge funds, have displaced long-term “owners.” The results have been a greater tendency to choose portfolios that reduce occupational risk rather than investment risk, increased trading mentality, and less participation in company affairs. As Vanguard founder John Bogle points out, “The old own-a-stock industry could hardly afford to take for granted effective corporate governance in the interest of shareholders; the new rent-a-stock industry has little reason to care.”

On Buffett:

[...] Buying businesses cheaply has not generated his long-term returns -- it has merely accentuated them.
Buffett raised eyebrows in the investment community many years ago when he bought Coca-Cola at a mid teens multiple of earnings. Most value investors couldn't understand why Buffett considered it a bargain purchase. Of course, Buffett was allocating capital to a superior business at a fair price. He knew that Coca-Cola would compound the capital employed in the business at a high rate for a long time to come. Buffett did not need P/E multiple expansion to make the investment in Coca-Cola pay off.

It's not all theory... it pulls together a lot of practical stuff.

-jr

Superficial Investing, Misunderstanding Under (and Over) Performance, and On Being an Optimistic Skeptic

2008-12-01T10:22:00.001-08:00

Dan Richards (no relation) has a thought provoking (and short) article in The Global and Mail here that reminds us that things are never quite what they seem, in good times or in bad. He starts off:

Psychologists talk about the human propensity to gravitate towards evidence that supports existing biases. What that means, quite simply, is that in buoyant markets, investors are prone to believe outrageous claims by market bulls – think no further than “the world has changed forever” rhetoric and best selling books like “Dow Jones 36,000” and Harry Dent’s “The Great Boom Ahead” in the tech boom in 1999 and 2000.

In the same way, in negative markets such as we’re experiencing right now, investors tend to believe even the most gloomy assertions from “media gurus” and self appointed experts - a recent New York Times article headlined “Forecasters race to call the bottom to the market” discussed the competition among market pundits to come up with the most dire possible predictions. (It’s noteworthy that the same Harry Dent who wrote “The Great Boom Ahead” has just published “The Great Depression Ahead.”)

I encourage you to read the complete article (again, it's very short), for the analysis he does of several commonly touted facts about stock market returns. Anyhow, he ends like this:

None of this is intended to say that stocks will always be a safe or pleasant haven for investors. And despite the overwhelmingly positive returns that long term investors in U.S. stocks have seen across virtually every time frame, there is always the possibility that it could be different going forward. Just remember, though, the only guide we have going forward is what happened in the past. And in looking at the past, we need to look at all the facts – not just those selected by people looking to grab newspaper headlines.

One item I'd add to it: Statistics regarding under-performance AND over-performance touted are both misleading without qualifiers and rarely as meaningful to a given individual investor as they are lead to believe. I have several reasons for stating this and, at the risk of leaving things hanging and encouraging people to misunderstand me since this also touches upon other areas of investing which I've formed strong opinions about, here are some quick reasons:

Some investors invest in markets (namely those who invest solely in index funds). Other investors invest in companies (those who select & invest, on whatever basis they've determined makes sense for them). And, yes, I realize plenty of folks are essentially hybrids of these two types. These two types of investors have dramatically different strategies. In many cases the returns of the various indexes are irrelevant to investors in individual companies and, interestingly, the inverse is true as well (i.e. the returns of any given individual company are irrelevant to index investors).
Market investors who get in (and out) at different times have dramatically different results even against long-term (say, 20+ year) metrics. This is because even over the long-term, a very small number of days, weeks, or months can account for a large percentage of the overall returns calculated into the average. Unfortunately, the majority of individuals get bit by this one far more than is often believed due to human psychology and our inability to tell the difference between temporary losses of capital and permanent (often exasperated by not truly understanding what we're investing in too)
Indexes are NOT actually the market. Every index is a bit different and represent some portion of the market in different ways. The Dow Jones Industrial Average for example, says absolutely nothing about mid-size and smaller companies and, for that matter, anything about any companies other than the top thirty largest (and most widely dispersed ownership) public companies. Which companies actually fall into this category actually change from time to time (imagine that). The components of the index thus are dynamic over time. That throws a bit of a monkey wrench into the possibility of even holding onto the DJIA for a long period of time (the allusion that it's not changing if you own an index fund is only because you don't own the underlying securities directly). This is to say (almost) nothing about how the weighting of individual stocks (and their price changes) is done inconsistently between indexes (and also not necessarily representative of how an individual investor would view the same portfolio of stocks if held directly).

Those who I'll call Superficial Investors are generally universally and especially hard hit anytime things are not all hunky dory in the stock market. I use the term Superficial by way of attempting an explanation and not to be judgmental. Superficial Investors are not really speculating nor are they truly investing (I define investing as Ben Graham did: where upon thorough analysis, it promises safety of principal and a satisfactory return.)

Superficial Investors (SIs) are essentially the masses of folks that have (generally) modest sums of capital in the markets by way of retirement accounts, mutual funds, college savings funds, and the like. Many also have regular brokerage accounts and can toy with investing directly in individual companies that way as well.

It's no surprise that most folks with money in the market these days have no idea what to do. After all, they really didn't know what they were doing to begin with. They were only under an allusion (of self-deception, though not maliciously or even knowingly).

Warren Buffett said just after September 11, 2001 that you only find out who has been swimming naked when the tide goes out. There's a lot of truth to that and its a recurring theme throughout history in many areas other than investing (though it may manifest itself around the search for profits more so than any other).

The credit mess (loans related to real estate but other types as well) falls into this category as well. Though my impression is that more than a few folks did understand they were being foolish - and chose to look past it for short-term gain (now, for a bit of medium-term pain too, doh!). Presumably the majority of folks were simply misinformed and did not understand what was going on...while they were also trying to honestly "get ahead" and saw an opportunity. Something essentially all Americans seek, right?

Human psychology is great at fooling all of us much of the time. Especially when things are good. But the same happens when everything is bad too.

There in lies an optimistic tone. Rarely are things as good or as bad as the popular belief at any given point in time. And there are always opportunities to make money in the market. But they are not for everyone - and that's fine.

My conclusion: Know what your place is (as in decide what it's going to be deliberately and take action that is in harmony with that decision; I'm not saying accept what someone else simply says is "your place" or whatever other clique that phrase may conjure up). And be cautious who you allow to shape your actions -- especially in areas where you are not fully informed yourself.

More specifically, unless you have a solid knowledge of the facts yourself (as well as, perhaps, aspects of human psychology and especially your own), you will be unable to combat some of the distortions and temptations you will be exposed to. If at all possible, invest the time to ramp up your understanding of history and psychology to be a better resource to yourself. If you fail to do this, be careful who you allow you shape your actions, since you are trusting that they've done their homework (yeah, that includes me).

My wife once called me cynical but I had to correct her by saying "I'm not a cynic; I'm a skeptic". It's generally my default initial position. Further, I'm an optimist too. I really don't see a discrepancy between the two.

An ironic twist I suppose is that being a skeptic makes it easier to be confident since I can trust myself more. And that (along with some other things) keeps me pretty optimistic most of the time.

All of the above has ramifications far beyond investing in the stock market - and beyond the pursuit of money - and I hope that if you've read this far that I've been successful at conveying a bit of that sentiment.

-jr

P.S. If you're further interested in the topic of human psychology as it relates to investing, google "behavioral finance" and "behavioral economics". Again, despite its (apparent) ties to finance & economics it's really all about every day human behavior and even a cursory awareness of its implications would benefit you no matter what your area of expertise or aim in life.

The SLO School of Law

2008-11-04T09:55:00.001-08:00

Nifty. Locally we have the University of San Luis Obispo School of Law. They offer a part-time weekend program. I had no idea.

How A Dishwasher May Determine Your Success

2008-10-06T10:34:00.000-07:00

As I sit here writing this, listening to our new dishwasher shoot, splosh, and steam our dishes to cleanliness, I'm forced to contemplate why our dishes used to pile up at our old place -- despite our best intentions.

Previously our dish washing foo was less than stellar.

In the old place we didn't have a dishwasher machine -- other than our own hands. We'd go through periods of keeping up on the dishes. It usually persisted through the first few days (rarely weeks) of clean house euphoria that resulted from spending a day cleaning the entire house or kitchen. Then, we'd fall off the wagon and dishes would pile up. Rinse repeat. Same thing every time.

Our behavior never changed despite our interest in keeping the dishes from piling up.

It was pretty frustrating. Each time we'd discuss it and get up the courage again, telling ourselves we'd do better this time. Then we'd fail. It became pretty stressful in and of itself.

Stress is usually the result of missed expectations. And our expectations were pretty shot to hell the millionth time around.

Now, throughout all this, one of us might pop in and pound some dishes out in random bursts but there was no consistency. And, usually, this was out of frustration over our falling off of the wagon versus a genuine desire to keep things clean. In an ironic twist, this actually added to the frustration -- because it seemed to be a demonstration to ourselves that we could do it when we chose to. So what the heck was our problem?

There had to be something that we were missing. The solution couldn't be that easy (just choosing to do it).

Sure, we could say it was because we just "didn't have the time" but really that was just a convenient excuse.

Our productivity, or lack thereof, was really driven entirely by our mood. We liked the idea of having a clean house and no dishes piling up. But, somehow, we just weren't totally getting it. Why were we committed to the idea but not the action? And what else was really going on?

What mental hurdle does it take to turn an idea into an action?
How do you know when you are failing because of, in fact, time (or an unrealistic goal) versus when you are failing because you are approaching things the wrong way?
How do you determine the difference between persistence (often a good thing when aiming towards a goal or dream) versus banging your head against the wall?
How do you effectively develop new habits (or change old ones) when you are "focused" on achieving a million other things in your life as well?
How do you coordinate this process across a household of different family members all with different time, energy, and stress tolerances and responsibilities?

How indeed.

Well, in our case, we got a dishwasher. :-)

But, the (more useful) explanation is of course more than that.

Yes, perhaps there were other things we could have done to motivate ourselves, penalize ourselves, etc. Perhaps we were too undisciplined. But sometimes a completely different approach is what is actually most effectively. Especially when there's no downside to doing something completely different.

Just because we could have found a way to achieve our aim, doesn't make it the best approach. I had no big deep down desire to prove to myself (and especially not anyone else) that we were the manual labor dish washing motivation experts. In fact, I just wanted clean dishes -- I didn't care how we got 'em as long as it didn't take much time, energy, or money.

I even only half jokingly mentioned to my wife that maybe we ought to hire someone to come in and do the dishes (and a few other things while they were at it). That thought stayed in my mind for a month or two but we never did pursue it.

In any case, sometimes tweaking the goal makes sense. The idea of hiring somebody actually was closer to where we should have been thinking even if it didn't end up being our ultimate solution. In our case, we were too focused on the goal of "how do we get -- and keep -- ourselves in the habit of washing the dishes?". It sounds simple now, but a lot of solutions do -- in hindsight.

Sometimes we get so caught up in a solution that we've been attempting that we become convinced that we "can beat it". That's not an un-admirable attribute, but we have to remember it can work against us to. Awareness of this problem is probably the best means of sorting out those situations where it is occurring from the others where raw persistence really is what's needed.

How we frame our problems (or goals) makes a big difference in our approach to them. In my case, caught up in the daily tasks and lots of other goals and dreams, I routinely frame seemingly less important issues (such as keeping the dishes from piling up) the wrong way. Most likely because I don't put enough energy upfront in pondering them. I am continually dumbfounded by how easily I can solve a stressful problem that's been lingering by simply re-evaluating the entire premise.

Often I'm stressing not because something isn't done but because I'm not yet sure how I'm going to get there. Or, the goal isn't really all that clear to begin with. Once I realize that something is not right, I mentally pull back and reboot. That takes some energy but far less than it would to persist down the wrong path -- or no path at all.

We're all pretty good problem solvers. That doesn't mean that we're always solving the right problems.

-jr