Category Archives: Entrepreneurship

How to Build a Company: Part 3 – Market Research

Thus far we have reviewed the process of creating a Business Entity Type (e.g. LLC, LLP, INC) and the formulation of the Business Plan.  Now we need to look a bit closer at Market Research.

What is Market Research?

Market research is the process of gathering relevant data to help solve marketing challenges that a business will most likely face–an integral part of the business planning process. In fact, strategies such as market segmentation (identifying specific groups within a market) and product differentiation (creating an identity for a product or service that separates it from those of the competitors) are impossible to develop without market research.

The key process behind market research is to get to know your customer better than they know themselves.  The more through the research the more information one has to develop a new product and grow their business.  The smaller the niche the easier it is to develop a killer business model.  When we started Orbitz, there were only two other businesses doing meaningful travel sales online (Expedia and Travelocity).  We changed the online travel business model by making money by volume vs sales price through our unbiased matrix display showing the lowest fairs first.  Orbitz didn’t make a percentage of ticket sales price (e.g. 10% of a $1000 fare) like our competitors.  We established our revenue model around a flat fee per ticket sold (~$6 per ticket) requiring us to move significant volume and capture marketshare to be profitable.  It was easy to get new customers when our pricing was less than anyone else online!  The market void we discovered through our Market Research helped us build a profitable business that customers loved.

Orbitz Matrix Display

Orbitz Matrix Display

What is the Market Research Process?

Market research basically involves gathering two types of data:

  • Primary information. This is research you compile yourself or hire someone to gather for you.
  • Secondary information. This type of research is already compiled and organized for you. Examples of secondary information include reports and studies by government agencies, trade associations or other businesses within your industry. Most of the research you gather will most likely be secondary.

When conducting primary research, you can gather two basic types of information: exploratory or specific. Exploratory research is open-ended, helps you define a specific problem, and usually involves detailed, unstructured interviews in which lengthy answers are solicited from a small group of respondents. Specific research, on the other hand, is precise in scope and is used to solve a problem that exploratory research has identified. Interviews are structured and formal in approach. Of the two, specific research is the more expensive.

One of the most effective forms of marketing research is the personal interview. They can be either of these types:

  • A group survey. Used mostly by big business, group interviews or focus groups are useful brainstorming tools for getting information on product ideas, buying preferences, and purchasing decisions among certain populations.
    • NOTE: Survey Monkey is a tool very often used to quickly reach and gather results.
  • The in-depth interview. These one-on-one interviews are either focused or nondirective. Focused interviews are based on questions selected ahead of time, while nondirective interviews encourage respondents to address certain topics with minimal questioning.
    • NOTE: If a company is operating this is typically an easy step.  Contact existing customers and pay them something for their time.

Secondary research uses outside information assembled by government agencies, industry and trade associations, labor unions, media sources, chambers of commerce, and so on. It’s usually published in pamphlets, newsletters, trade publications, magazines, and newspapers. Secondary sources include the following:

  • Public sources. These are usually free, often offer a lot of good information, and include government departments, business departments of public libraries, and so on.
  • Commercial sources. These are valuable, but usually involve cost factors such as subscription and association fees. Commercial sources include research and trade associations, such as Dun & Bradstreet and Robert Morris & Associates, banks and other financial institutions, and publicly traded corporations.
  • Educational institutions. These are frequently overlooked as valuable information sources even though more research is conducted in colleges, universities, and technical institutes than virtually any sector of the business community.

Why do I need to Market Research?

The main issue I typically see is that an Entrepreneur who is developing a business believes they “Know” the customer and there is no need to research the market.  I see this mindset all of time.  What is surprising to me, however, is I actually see this problem in large well established firms more than startups.  I call this process designing “in-a-box.”  I have seen countless large firms invest millions into a program with zero market research then wonder why a product they launched failed. Here’s a link to an article that describes 22 epic product flops (http://www.businessinsider.com/biggest-product-failures-in-business-history-2014-7).  #22 is the ORBITZ drink!

That’s right, Orbitz was a soda before it was a travel website!  We bought the rights to ORBITZ from the bottling company, which is how we obtained our brandname.

The companies that are looking for help to get to know their customers better are the ones that tend to withstand the test of time.  Good examples of some proactive tech companies that spend the time and money to understand their customers and then utilize their research to create profitable products are Apple, Google, Facebook, Amazon, and LinkedIn.  Prominent businesses that I personally don’t believe do an effective job understanding their customers are Yahoo, Twitter, Groupon, and Travelport (Travel GDS provider: Worldspan, Apollo, Galileo).

Apple does Market Research?

Those that follow Apple may think it is strange that I would list them as a market research company when Steve Jobs famously said, “It isn’t the consumers’ job to know what they want. It’s hard for [consumers] to tell you what they want when they’ve never seen anything remotely like it.”  Although the statement is technically accurate for a company developing a never seen product before, it is only the version of the truth that Apple wants to disclose publicly.

Apple spends millions of dollars understanding their customers.  If you’ve ever visited an Apple Store, I suspect that most of you would agree it is an experience like no other retailer.  It is hard to put your finger on why.  Everything in an Apple Store form product placement to the LED lighting and Air Handlers has a purpose geared to engage their customers.  Their retail model is so pervasive that not only do customers come back frequently for the experience, they are willing to spend hours waiting in line to get their hands on a new product.  The Apple Store success is one that most retailers research throughly. We certainly did at Walgreens.  The Walgreens Flagship Stores were developed using concepts we discovered form researching Apple.

Apple operates in a highly competitive market and they do not share their secret sauce with the world.  During a lawsuit between Samsung and Apple in 2012, the Apple VP of Product and Marketing, Greg Joswiak, testified that they do Market Research and got into detail about their process.  Mr. Joswiak said, “they survey customers every month…”  Then went on to explain that “if a competitor were to find out what drives iPhone purchases – whether it be FaceTime, battery life, or Siri – it would serve as an unfair competitive edge to rival companies. Further, competitors, as it stands today, have to guess as to which demographics are most satisfied with Apple products.”  Apple petitioned the court to have the records sealed (read more).

Conclusion

Hopefully I have convinced you to do Market Research!  The process takes time, but it pays off more than one can imagine.  I have seen good market research transform a business.  We put orbitz on the map.  We took Walgreens who was an aging retailer and in a few years completely transformed the business.  Every business I have worked with that embarrasses Market Research and creatively implements solutions to the problems the unearth benefits form extraordinary success.  I trust you will have the same results if you put the time into researching your market and developing products that your customers want.

 

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.
How to Build a Company: Part 2 - Business Planning

How to Build a Company: Part 2 – Business Planning

The next stage of this series is intended to expand on what I have found as key elements that need to be addressed to develop a winning business venture.

I suppose some may think this article series is somewhat out of order.  Arguably one should formulate a Business Strategy before actually forming a Company.  It is the chicken vs the egg scenario in my mind.  I believe planning on the business structure to be formed early in the development stage is equally important.  A business venture should never be started without a solid foundation and liability protections in place.  

Brainstorming the Business Concept

The first step in tackling a business idea is to throughly research the market, competitors, etc. before getting too far into the rabbit-hole wasting time and money.   We don’t want to start an expensive hobby.  The point of creating a business is to establish and entity that can actually make a profit, grow and evolve.  A good rule to start off with is simple…If a zillion people are already doing the same thing then chances are the market is saturated (read low profit margin); however, if no one is doing it there may not be a need for the product or service in the first place.  Identifying an area in demand that is in a niche market is generally the best way for a small business to quickly evolve.  Regardless of the concept, however, it is critical that the idea is throughly researched.

Business Planning Word CloudTo start a plan of any type one needs to brainstorm the idea and get their thoughts on paper.  I often use a word-cloud that has linked short phrases on a notepad with the core idea in the middle — building out the concept as new ideas come to mind.  I’ve found that this method is one of the most efficient ways to test and develop a potential business idea.

The Word Cloud step generally forces one to think about areas where they need more information — competitors, pricing models, sales strategy, etc.  I typically take one area at a time and gather as much information as I can.  The point is actually to try to kill the business idea at every step.  Look hard and be honest.  Is there money to be made?  Are there customers that will legitimately buy from you vs a competitor?  How much money will it really take to get started?  Have other businesses entered this market and failed?  Why?

After researching a sub-topic, I then create a word cloud with that topic in the center and build out on it.  Competitors, for example, can be expanded by adding sections:  Who are they? Who are their customers?  How long have they been in business?  Do they have good/bad reviews online?  Who are the principals?  Are you connected through LinkedIn or other sources to employees and/or customers?  What products do the sell?  What is their pricing model?  Are they making money?  How many customers do they have?  What are their product limitations?  etc., etc.  When all of the questions are reasonably answered (don’t spend months on this task) I move to the next section.

The word-cloud process can really help hone in on a working business model quickly.  If there are areas that will nuke the idea they are generally unearthed during this step fairly quickly.  It is much better to move onto another business idea than to try to start one that will very likely fail.  Statistics work against startups.  Something in the neighborhood of 90% of startups fail within 24 months.    If you want to be in the 10% that survive category, don’t spend time developing a business that your preliminary research predicts will not succeed!

Market Entry Planning

The next step in the process is to be honest with yourself and build a market entry strategy. This should not be a Masters Theseus, but it needs to be complete. You need to clearly identify your market, you need to accurately estimate what it will take to create the product, and you need to realistically project sales.  The best product in the world is useless if people don’t know it exists.  Conversely if you don’t understand the customer-base it is very easy to create a product that no one wants.

Market research is the core to building a workable Business Plan.  No one can sit in an office creating an idea on their own.  They need to talk to customers and sincerely invest time into developing their go-to-market products and services.  Getting a strong handle on what people will pay is equally as important.  Again, the point of starting a business is to make money.  You don’t want to sell a product for $100 that costs $99.75 to create.  This is an area where you have to be painfully honest with yourself.  It is very easy to only see the facts you want to see.

See How to Build a Company: Part 3 – Market Research for more details on Market Entry Planning

Business Plan

There is a ton of hype and confusing information on creating a business plan.  I personally don’t believe it should be a novel.  Regardless of what you create, any business that survives long-term morphs into something entirely different than the founders initial intent.  I’m sure the early IBM founders never thought they would be making Personal Computers one day…  I know those of us who started Orbitz never planned to be owned by Expedia  — our #1 competitor — ever!

The key elements of a business plan need to stay simple.  If you are looking for investors then a section about the principal owners is very important.  A new business typically doesn’t have a working product or revenues.  Investors are investing in and trusting the founders.  If you aren’t qualified by yourself, look for others that can join your team.  I personally, and I know of many others, will sit on an Advisory Board for minimal compensation up front until the company gets going.  Others may be looking for the next big thing and join your day-to-day management team for ownership interest vs a big paycheck.   The more experience you have on the management team the better the market and investors will valuate your business.

The Problem

The most important section of a plan is to clearly describe what problem you are solving.  Are you reducing costs, are you filling a niche market, are you solving a problem no one realizes exists (e.g. Apple iPod/iTunes)?  It is very important that this section is well thought through.  If you aren’t solving a problem, filling a void, saving money, improving efficiency, or doing something that has meat on the bone no one will buy your product.  Understanding the problem statement is also key to marketing and sales pitches.  It should be tested, tested and retested on friends, family social network, etc. to refine this section into something that anyone can understand.  This is not a book.  The entire concept should be easily understood in a few bullets.

The Solution

After the problem is defined then the solution section is where you describe how you will solve it.  What products will you offer?  What makes your products different than your competitors?  Who are your competitors?  Why would someone buy your product over theirs?  The more compelling the solution is the more likely you will secure investors and customers.  Similar to the Problem section, the solution needs to be tested.  Market research potential customers, call competitors customers, hire a market research firm, send out Surveys, etc. and nail down the solution!

Expanding on the solution concept, this isn’t a section where all of the worlds problems are solved.  Out of all of the areas you will likely discover through research, pick one or two solutions that will have the widest understanding and market appeal then zero in on those offerings only.  Too many offerings will dilute your brand and confuse the audience!

A/B Testing

Up until this point I have written a lot about developing a concept.  What I want to make clear in this post is that none of this can be done in a box.  Testing the market early and often is the key to being successful.  I believe a lot of Entrepreneurs wait too long to get offerings to the market. They try to create the “perfect” product and miss the boat entirely.  I like getting a product out as soon as it is stable to test the waters.  It is better to find out early an idea is not working than investing months or years into a product no one wants.

At Orbitz, we were one of the first travel companies to launch a mobile app.  It was exclusive to the Apple iOS platform and would only allow search (had to call an 800 number to book).  It was simple, but it clearly showed there was a demand for mobile search, which then provided us with data on what customers were looking for that helped us evolve the app and justify the expense to develop on the Android platform.  For example, we observed that travelers would actually get to a city and then search for a hotel vs. buying one early.  That was a surprise to all of us.  We “assumed” that people would use the app predominantly to find hotels before they traveled.   What travelers understood better than we did was that hotel rates drop the closer you get to a checkin time.  If a hotel property has a lot of available inventory they will release more rooms to the online travel sites and often dramatically drop their room-rates to fill the property.  Watching pricing change via our app was an unexpected benefit to our customers that clearly helped grow our revenues.

Business are Dynamic

Businesses that survive in this economy are dynamic and ever evolving.  The business planning process is cyclical.  Work through the steps, A/B test, refine the process and evolve every section of the plan accordingly.  The key is not to get stuck in a rut doing the same thing that although may be successful one day could be nonexistent the next.  Apple is a good company to research that follows this cycle.  They find a niche market, they build a killer product, they gain crazy market share, then they start working on the next big thing in secrecy while their competitors play catchup.  When Apple sees sales drops and competitors taking their marketshare they launch the next game-changing product.  Companies that are in a proactive position will always be more profitable long-term.

Expanding on the proactive vs reactive business is why I believe startup businesses are viable and can succeed in any economy.  It is a lot easier to change the direction of a small company vs a large one.  Employees are also very close to the market as well as the leadership in a small business.  In a large corporation it can take decades for them to evolve.  The older they are, the bigger they are, the more profitable they are, etc. stifles creativity in most big businesses.  Large company employees know what is going on in the world, but they don’t generally have a voice at the executive level that has the authority to make changes.  It is an accordion effect in a large business.  By the time the executives see a market shift other competitors are materially impacting their revenues. What generally happens is the large company does what they do and opens their checkbook acquiring a competitor vs building a product in-house.

I personally believe that the build a very solid product, get noticed by companies with deep pockets and be acquired is a very good long-term business exit strategy.  Having the right product that a large corporation would want can instantly make founders millionaires practically overnight.  Having a clear end-game strategy is something that should be incorporated into a business plan.  Not many businesses are built to last 100 years anymore.  Venture Capital Investors specifically look for clear exit strategies.  The better an exit strategy is defined the more likely you will get a VC’s attention.

 

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.
How to Build a Company: Part 1 - Business Entity Types

How to Build a Company: Part 1 – Business Entity Types

I have started over a dozen businesses throughout my career.  Some successful and some “learning experiences.”  I am fortunate that more have succeeded than failed.  I try to pay it forward for the blessed life I have had by helping others learn from my mistakes and benefit from my experiences.  I coach young Entrepreneurs every chance I get.  I am proud to see many of them grow to create successful businesses of their own.

One of the questions I frequently get when talking to people thinking about starting a business is, “do I really need to form a Company?”  After answering yes with zero hesitation, I usually get the deer in the headlights look.  With that WHY? look in their eyes.  Establishing a company and dealing with lawyers, accountants, taxes, forms, annual board meetings, etc. isn’t generally the first thing that someone wants to do.  I thought I’d write a series on what forming a company actually means.  This first post in the series will discuss different business entity types.

Sole Proprietor and Partnerships

One of the key reasons for a new business venture to establish a formal entity out of the gate is to insulate the founder(s) form liability.  Anyone can start doing business as themselves, but that comes with significant risk that isn’t always understood.  As a Sole Proprietor, one who is in business for themselves, the principal owner is 100% at risk for everything they do.  If they have an employee that drops a box on a customer, the Owner/Sole Proprietor is personally on the hook for damages.  Every personal homeowner, auto, and umbrella policy I’ve seen has exceptions that exclude professional coverage.  In other words, if you are sued for doing work for a business you own…your personal insurance likely will not cover you.  Simply hauling boxes in your car to a clients house could result in no insurance and policy cancellation if you are in an accident (even one not your fault). Employees with a grievance can sue for a multitude of issues that could wipe out a Sole Proprietor’s personal assets even if the petitioner doesn’t win the case. 

NOTE: The personal liability issue also holds true for the small multi-level marketing businesses such as Amway, Mary Kay Cosmetics, Herbalife, etc. as well.  The people selling those products, recruiting others, etc. are typically operating as Sole Proprietors and could be personally held liable by an unhappy customer or recruit.  

A side note on personal liability and insurance is the emerging “shared economy” business models such as Uber and AirBNB.  When one starts driving for Uber, as an example, they are in the gray area of commercial vs individual operations.  Uber covers a driver and passenger liability and the vehicle (with restrictions) under their commercial policy as long as a paying passenger is in the car or the driver is on the way to pick up the passenger (e.g. they have accepted the trip on the Uber app).  However, when the driver is waiting for the next assignment they are doing so under their personal Insurance policy.  Uber will cover a loss with state minimum coverage in some cases if the main insurance doesn’t, but an accent regardless of what sage of a trip the driver is in often leads to policy cancellation putting them on the high-risk list.  

Geico and other carriers are starting to offer Hybrid personal/commercial policies for drivers that is significantly more expensive (read: Geico Ridesharing Insurance FAQs)

Accordingly, when one lists their home through services such as AirBNB, they turn their private residence into a rental.  Most personal homeowner polices do not cover commercial operations such as rentals.  When operating either of these business types the person and/or property/vehicle owners are considered Sole Proprietors or Partnerships when the asset is co-owned.

Similar to a Sole Proprietor business, a Partnership is a company formed by two or more people.  The only difference from a liability perspective is that all owners are equally liable for business damages and losses.  For example, one partner could file bankruptcy leaving the other 100% responsible for all debts and liabilities.  A Partnership is not an equal split either.  One partner could be silent with minimal direct interaction with daily operations while the other could be fully engaged, yet when liability is handed out the person who has the most assets ends up being responsible. The percentage of involvement in the business has zero effect on liability in a partnership.

Partnerships and LLP’s

Partnerships come in all shapes and sizes, but if a partnership is what one wants then we have to look no further than the legal profession.  Most Law firms are LLP’s, which stands for Limited Liability Partnership.  LLP’s are unique in that there are legal protections that cover the owners (states have different laws though). LLP’s are considered a General Partnership arrangement, which basically means that every partner has an equal say in how the business is ran.  It is management by committee.  When there is a stalemate then effectively the hold-out wins since decisions can only be acted on when voted in favor by the majority.  It tends to be best to form partnerships with an odd number (3, 5, 7, 9) of partners to prevent situations such as this from occurring.

Another potential downside with both partnerships and LLP’s is that you can’t simply leave the group.  In the case of a traditional Partnership the Business would have to be dissolved if a partner leaves or dies.   A partner cannot transfer or sale their portion in a traditional partnership.  An LLP is somewhat different in that partners can be added or removed, but a majority vote of the remaining members must pass to permit a change.  The remaining group may actually decide they do not like someone a partner is trying to sell their partnership to and deny the transaction.  Liabilities and profits are also equally spread over all partners.  If the business has a loss, the partners are responsible to settle the debts every year.  They are also personally liable for their portion of a business profits.

Limited Liability Company or LLC

A LLC is a form of a Incorporation (Inc.) I will discuss shortly.  LLC’s are similar to a partnership where individuals can buy into ownership, but the main difference is that there can be levels of shares that can equate to voting rights  One person in an LLC could own 51% of the shares and bring in others while maintaining control over the Business.  Similar to LLP’s, profits and losses are generally spread across the owners based on the percentage they own of the Business.  The prorated gains or losses are incorporated into each owners personal tax return.  Depending on the success of a company and the wealth of each individual owner, however, the income tax liability may be significant.  Individuals are generally taxed at a higher rate than a standard Corporation.

Another key advantage of forming an LLC is that some states, including Delaware, have laws that enable an LLC to be single entity formed.  This means an individual, or another Company type, can create a LLC without any additional owners.  A LLP requires at least two named partners.  The advantage of a single-entity LLC is that this enables the business to be formed, bank accounts opened, leases signed, etc. by the business in preparation to bring in investors, customers, and/or other owners after the company has started operations.  Individual Entrepreneurs can create a business on their own to incubate and then go to market with a working business, which will have more value than an idea on paper.

I’m not a tax attorney, so I highly recommend seeking professional advice when it comes to taxes.  It has been my experience that it is best to form an LLC and change its tax classification to a Corporation.  There are tax forms that need to be filed for this to happen…again talk to a tax professional…  When an LLC is taxed as a corporation it then files and pays its own taxes.  Moneys paid out to shareholders are paid in the form of dividends that are carried on the shareholders personal income tax returns.  In certain situations, however, a corporation classification for an LLC can lead to being double taxed — the business pays for its income then the owners are subsequently taxed on their dividends, etc.  Shareholders can get hit with capital gains if the company is successful and they sell their shares or the business as well.

Standard Corporations (a.k.a. Inc.)

Typically when we talk about a Company we are talking about the Incorporation or what we see in many business names as Inc.  An Inc. is an entity of its own in the eyes of the taxing systems and can have a virtually unlimited amount of shareholders, stock classifications, etc.  When we see US businesses being publicly traded they are generally an Inc.  Other country’s have similar classifications that go by different names.  In the UK, for example, they have a company definition as a PLC (Public Limited Company), which is basically the same as an Inc. in the states.

Inc’s have a big advantage when it comes to raising funds while maintaining control.  A business could release millions of shares while the principals continue to maintain control over the business.  Walgreens Alliance Boots (NASDAQ: WBA) is a good example.  Stefano Pessina is the primary investor that owns approximately 45% of the publicly traded Company.  He effectively has implicit control over the $130-Billion per year business with billions in assets.  Mr. Pessina along with any other other investor that owns 5.1% or more of the Company makes the final decision on what the Company will do.  Shareholder meetings, voting rights, etc. have no material impact on how the Company is operated.

Inc’s have many advantages, but as an entity in their own right traditional Company formations are fully tax burdened.  The Company is responsible for its own income taxes and any financial distributions to shareholders, investors, etc. are fully taxed.  I generally do not recommend starting an Inc. unless a Business is clearly on the IPO track bringing in multiple stages of funding or has plans to raise money through a significant number of investors (e.g. Penny Stock or GoFundMe investors that acquire ownership in a business).

Although it can be a complicated transition that could require back-filing of taxes, ownership structure may be changed in the future if necessary.  At Orbitz, for example, we started the company as DUNC, LLC in Delaware when the airlines (Delta, United, Northwest and Continental) were the sole owners of the Company.  After the LLC formation the airline owners subsequently added American Airlines to the LLC.  We later formed Orbitz Inc. when we were preparing to go public.

Summary

Hopefully I have helped bring clarity to this confusing topic.   The main decision can be boiled down to asking a couple of questions.  Are you creating a partnership that will have equal voting rights for everyone or do you want different levels of ownership?  In general terms, if you want everyone to be equal form an LLP.  If ownership levels are needed, the principal founder(s) want to maintain majority control, a single individual needs to start the initial business, etc. form an LLC.  However, if you expect to be brining in a large number of investors through penny stock sales and other means that would require SEC oversight then form an Inc.

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.
How to identify and set goals for 2016?

How to identify and set goals for 2016?

As we enter into this New Year we all tend to have a heightened sense of the opportunities and possibilities that 2016 can bring. The need for goal-setting becomes more obvious and clear. And the great thing about goal-setting is you can keep it as simple or get as elaborate as you would like.

The primary reason for setting a goal is because it forces you to focus on and accomplish it. What it makes of you will always be the far greater value than what you get. That is why goals are so powerful – they are part of the fabric that makes up our lives. And goal-setting is where we create our goals.

Goal-setting is powerful, partly because it provides focus. It shapes our dreams. It gives us the ability to hone in on the exact actions we need to perform to achieve everything we desire in life. Goals are GREAT because they cause us to stretch and grow in ways that we never have before. In order to reach our goals we must become better. We must change and grow.

Also, goals provide long-term vision in our lives. We all need lots of powerful, long-range goals to help us get past short-term obstacles. Life is designed in such a way that we look long-term and live short-term. We dream for the future and live in the present. Unfortunately, the present can produce many difficult obstacles. But fortunately, the more powerful our goals (because they are inspiring and believable) the more we will be able to act on them in the short-term and guarantee that they will actually come to pass!

So, let’s take a closer look at the topic of goal-setting and see how we can make it forceful as well as practical.

What are the key aspects to learn and remember when studying and writing our goals?

Evaluation and Reflection.

The only way we can reasonably decide what we want in the future and how we will get there is to first know where we are right now and what our level of satisfaction is for where we are in life. So first take some time and think through and write down your current situation, then ask this question on each key point – is that okay?

The purpose of evaluation is two-fold. First, it gives you an objective way to look at your accomplishments and your pursuit of the vision you have for your life. Secondly, it is to show you where you are so you can determine where you need to go. In other words, it gives you a baseline from which to work.

I would strongly encourage you to take a couple of hours this week to evaluate and reflect. At the beginning of this month we encourage you to see where you are and write it down so that as the months progress and you continue a regular time of evaluation and reflection, you will see just how much ground you will be gaining – and that will be exciting!

What are Your Dreams and Goals?

These are the dreams and goals that are born out of your own heart and mind. These are the goals that are unique to you and come from who you were created to be and gifted to become. So second, make a list of all the things you desire for the future.

One of the amazing things we have been given as humans is the unquenchable desire to have dreams of a better life, and the ability to establish goals to live out those dreams. Think of it: We can look deep within our hearts and dream of a better situation for ourselves and our families; dream of better financial lives and better emotional or physical lives; certainly dream of better spiritual lives. But what makes this even more powerful is that we have also been given the ability to not only dream but to pursue those dreams and not just pursue them, but the cognitive ability to actually lay out a plan and strategies (setting goals) to achieve those dreams. Powerful!

What are your dreams and goals? This isn’t what you already have or what you have done, but what you want. Have you ever really sat down and thought through your life values and decided what you really want? Have you ever taken the time to truly reflect, to listen quietly to your heart, to see what dreams live within you? Your dreams are there. Everyone has them. They may live right on the surface, or they may be buried deep from years of others telling you they were foolish, but they are there.

So how do we know what our dreams are? This is an interesting process and it relates primarily to the art of listening. This is not listening to others; it is listening to yourself. If we listen to others, we hear their plans and dreams (and many will try to put their plans and dreams on us). If we listen to others, we can never be fulfilled. We will only chase elusive dreams that are not rooted deep within us. No, we must listen to our own hearts.

Here are some practical steps/thoughts on hearing from our hearts on what our dreams are:

Take time to be quiet. This is something that we don’t do enough in this busy world of ours. We rush, rush, rush, and we are constantly listening to noise all around us. The human heart was meant for times of quiet, to peer deep within. It is when we do this that our hearts are set free to soar and take flight on the wings of our own dreams! Schedule some quiet “dream time” this week. No other people. No cell phone. No computer. Just you, a pad, a pen, and your thoughts.

Think about what really thrills you. When you are quiet, think about those things that really get your blood moving. What would you LOVE to do, either for fun or for a living? What would you love to accomplish? What would you try if you were guaranteed to succeed? What big thoughts move your heart into a state of excitement and joy? When you answer these questions you will feel GREAT and you will be in the “dream zone.” It is only when we get to this point that we experience what OUR dreams are!

Write down all of your dreams as you have them. Don’t think of any as too outlandish or foolish – remember, you’re dreaming! Let the thoughts fly and take careful record.

Now, prioritize those dreams. Which are most important? Which are most feasible? Which would you love to do the most? Put them in the order in which you will actually try to attain them. Remember, we are always moving toward action, not just dreaming.

S.M.A.R.T. Goals. S.M.A.R.T. means Specific, Measurable, Attainable, Realistic, and Time-sensitive.

I really like this acronym S.M.A.R.T., because we want to be smart when we set our goals. We want to intelligently decide what our goals will be so that we can actually accomplish them. We want to set the goals that our heart conceives, our minds believe and that our bodies will carry out. Let’s take a closer look at each of the components of S.M.A.R.T. goals:

Specific: Goals are no place to waffle. They are no place to be vague. Ambiguous goals produce ambiguous results. Incomplete goals produce incomplete futures.

Measurable: Always set goals that are measurable. I would say “specifically measurable” to take into account our principle of being specific as well.

Attainable: One of the detrimental things that many people do – and they do it with good intentions – is to set goals that are so high they are unattainable.

Realistic: The root word of realistic is “real.” A goal has to be something that we can reasonably make “real” or a “reality” in our lives. There are some goals that simply are not realistic. You have to be able to say, even if it is a tremendously stretching goal, that yes, indeed, it is entirely realistic — that you could make it. You may even have to say that it will take x, y, and z to do it, but if those happen, then it can be done. This is in no way to say it shouldn’t be a big goal, but it must be realistic.

Time: Every goal should have a time frame attached to it. I think that life itself is much more productive if there is a time frame connected to it. Could you imagine how much procrastination there would be on earth if people never died? We would never get “around to it.” We could always put it off. One of the powerful aspects of a great goal is that it has an end, a time in which you are shooting to accomplish it. You start working on it because you know there is an end. As time goes by you work on it because you don’t want to get behind. As it approaches, you work diligently because you want to meet the deadline. You may even have to break down a big goal into different parts of measurement and time frames. That is okay. Set smaller goals and work them out in their own time. A S.M.A.R.T. goal has a timeline.

Accountability (A contract with yourself or someone else)

When someone knows what your goals are, they hold you accountable by asking you to “give an account” of where you are in the process of achieving that goal. Accountability puts some teeth into the process. If a goal is set and only one person knows it, does it really have any power? Many times, no. At the very least, it isn’t as powerful as if you have one or more other people who can hold you accountable to your goal.

So: Evaluate/Reflect; Decide What You Want; Be S.M.A.R.T.; Have Accountability. When you put these 4 key pieces together, you are putting yourself in a position of power that will catapult you toward achieving your goals.

Here’s to doing something Remarkable in 2016!

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.
Creating a Billion Dollar Startup

The Process of Creating a Unicorn (>$1B Valuation Startup)

Orbitz was the first company I was involved with that exceeded $1B in valuation. We achieved what they now call Unicorn status.

The Unicorn name came from an article from venture capitalist Aileen Lee in November, 2013, and from that point on, the name Unicorn has permeated the startup culture.

When I look back on the Orbitz experience I see a Company that did a lot of things right even though we were working in uncharted territory. A startup in the Midwest didn’t have the support infrastructure as our West Coast counterparts. In some ways a lack of support was a challenge, but in other ways it pushed us into innovating completely unique solutions that propelled us. Orbitz was one of the first commercial companies to implement RedHat Linux, we were one of the first to use JAVA as a programming language, and we were the first to implement Oracle RAC — all considered standard technologies now days. We were even running our development processes Agile-like a decade before Agile was coined as a term.

Orbitz prelaunch website

Those of you who are familiar with the Orbitz history know the challenges that company has faced over the years. For example, we launched June 2001… 3 months prior to the tragic events that happened on September, 11 2001. We started a DOTCOM during the recession and in the middle of the DOTBOMB. And we started a travel business that generated nearly all of its revenue from Airline ticket sales when many of our Airline partners were on the verge of bankruptcy…

So how did we survive and achieve Unicorn status?

First, I believe the main reason we survived is because we hired super smart, dedicated, hard working people that sincerely cared about our success. Our recruiting process was rigorous to say the least. Our CEO, Jeff Katz, personally interviewed every new-hire and our CFO, John Park, was incredibly scrupulous when it came to adding headcount and increasing operating cost.

At the time we viewed these strict policies negative because it put a lot of work on our staff. We saw the money come in from our Airline founders and at the time it was easy to think there was an unlimited bucket of money raining on us. However, as I look back I see the policies our executive leaders enforced is what ensured our survival. If they had wasted the money we received in stage funding like many businesses do now days we would have never survived the completely unexpected events of 9/11.

Secondly, we focused on our customers and continually tested the market. We released rudimentary functionality as we built the platform and continually tested with our customers. Ideas we thought might be good that weren’t overwhelmingly adopted by customers were scrapped. We averaged 2 out of 10 ideas that actually landed in production. This approach established a very loyal customer-base that stayed true to our brand.

First Orbitz Website June 2001

First Orbitz Website June 2001

We carefully built our functionality starting with Air, then Car, then Hotel, then packaging. We didn’t try to build everything at once. We partnered with other suppliers until our platform was ready. This approach gave us cash flow early in our evolution that ultimately led to us surviving 9/11. We were 100% on our own after 9/11 and received zero funding from any third party source.

Unicorn Classification

I put Unicorn businesses into two buckets. There are the Hype businesses that quickly hire a ton of people and generate loads of press. And there are the Quiet businesses that grow strategically.  In Chicago we have examples of both.

Groupon is a good example of a Hyped business. They grew fast, raised millions in funding, and benefited from an unlimited sea of press. Now they are on the decline. They recently laid-off 1,600 employees, closed operations in non-profitable areas, replaced many of their executives, etc. It is clearly going to be challenging for them to survive long-term.

Unicorn examples in Chicago that I classify as Quiet include Signal, who’s CEO is Mike Sands the former Orbitz COO, and Raise.com who is led by some young and smart entrepreneurs. I had never even heard or Raise.com until recently. They are a great example of a solid well thought out business. They are growing slow and steadily creating value for their customers without taking unnecessary risk or setting unrealistic expectations through overly Hyping their business. It is very impressive that they have achieved >$1B in valuation quietly in a small startup market like Chicago.

Understandably it is hard to take the quiet route when we see the Hyped businesses everywhere we look, but we need to keep in mind that the point of creating a company is to build a long-term viable organization. Investors are ultimately investing in and trusting the leadership team. Behind every penny is someone that trusts us to deliver what we promised. As entrepreneurial leaders we need to take that responsibility seriously and spend every dime like it is our own.

The Business Model

The WSJ recently released its Billion Dollar Startup Club list. About thirty-nine of these companies are platform businesses. The other 39 are linear. According to INC Magazine, investor confidence is approximately 25 percent higher in the platform startups than linear.

“Picking the right business to be in is the most important decision when starting a company.” Tony Hsieh, Zappos startup CEO

The key is to pick a business model that has a high potential with less competition. The platform business model, in my opinion, is the best for long-term sustainability. Zappos is a good example. They focused on selling a small subset of products (Shoes). As the online shopping world evolved their market share shrank opening them up to acquisition by Amazon. The Zappos business has continued to be financially pressured and they continue to struggle to achieve profitability. Amazon, is another example. Although they are a household name around the world they still struggle to achieve profitability. There platform business Amazon Web Services, however, is incredibly successful.

Platform businesses are typically based on consistent revenue model. Signing up customers for a monthly fee helps guarantee cash flow vs businesses like Orbitz, Zappos, Groupon, etc. that must attract customers every day to generate sales.

Accordingly, there are many traditional businesses such as Adobe who have pivoted from a linear product sales offering to a platform subscription. Microsoft is doing the same with Office 365. Constant monthly revenue is the key to long-term survivability. Products bring in big $$ in large spikes whereas platform subscriptions are more predictable.

Ok, we agree we need to build a platform. What comes first?

The hardest problem with building a platform businesses is that you need two components to be successful that are dependent upon one another. If Uber wants to grow, it needs more drivers to get customers and more customers to get drivers. Neither works without the platform behind coordinating both supply and demand.

When building a platform revenue doesn’t come until the platform is operational. If you build customers first based on Hype and then don’t deliver they will quickly become dissatisfied, leave and likely never come back.

I am a proponent of continuous A/B testing. Roll features out, test, evaluate and change. The sooner a working prototype is in the world the quicker you find what works and what doesn’t as well as start generating revenue. Uber started small, perfected their platform and then grew market by market, which is clearly why they are incredibly successful.

The problem with many platform businesses is they build what they “think” is right. By the time it goes out the door they often discover the customers don’t embrace the product as expected. This process has killed many tech businesses. They lose their valuation when the product doesn’t work as promised and they die on the vine. Releasing small features that attract subsets of customers enable a business to learn what customers want while generating revenue. Again, look at the Uber model. They started in a niche market testing, evolving and perfecting their platform to achieve worldwide recognition and valuation they have now.

Go Mobile First

Mobile is the key to capturing seamless engagement with end-users. Most want to start with a full-blown fully functioning, “perfect”, website, but I believe perfecting and testing an engagement model on mobile should be considered as the first priority.

A company doesn’t have to launch with both iOS and Android apps. There are countless examples of platforms only leveraging one operating system at launch and after becoming successful build the other. At Orbitz, we started with iOS apps. It was several years later before we introduced apps for Android. The key is to prove that you can get strong recurring usage on one operating system and then replicate that model.

Show me the money

Raising seed funding from family and friends is the easiest way to start a business. They invest in you without needing to understanding what you are doing. However, unless your friends are Warren Buffet and Bill Gates, it is hard to raise sufficient capital to build a Unicorn. Unicorns need to be valued over $1B, which is done by investment firms that comes through staged funding. Institutional Capital firms are necessary to raise material capitalization and help get to the coveted $1B valuation, establish a brand and beat others that may end up launching a similar concept.

People often think of a VC firm as organizations that take risks. This couldn’t be further from the truth. VC’s have investors that expect them to generate ROI for them. Ones that don’t generate a return for their investors don’t last long. Institutional capital firms look for a strong management team, a product they can understand and a business model that can generate revenue.

Conclusion

At the end of the day the people are the key to success no matter what you are doing. Surround yourself with only “A player” people. When thinking about people I follow the saying, “Hire Slow and Fire Fast.” Use the core team to develop the business Idea with a strong slant to creating a platform business. Start with mobile development first and test small features and start generating cashflow. Use the A/B testing experience to refine the business plan. Use family, friends, goFundMe or other sources to get startup funding. Then only when having a mature enough business model approach Institutional Investment firms. Finally, work through staged funding steps exceeding all objectives at each stage and achieve Unicorn status.

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.

Square’s IPO…What Happened?

“Square’s IPO popped on the first day. What does that say about unicorn valuations? #SquareIPO”

The IPO process is fascinating.  Back in the dotcom era every tech nerd including me wanted to take a business public.  I was fortunate enough to be a part of Orbitz going public twice (NASDAQ: ORBZ; NYSE: OWW).  However, sometimes you have to be careful for what you ask for – you may actually get it…  What we found on the other side of the IPO was a scary place that we were not ready for.  Orbitz was overly hyped when we went public both times.  It is an exciting feeling before an IPO seeing the initial sale price set high and we were all doing the mental conversions of our options in our heads.  I was even in lucky enough to be in NYC ringing the opening bell!

 

ORBZ_02

The unfortunate fact about tech IPO’s is that it is more a game of chance than any of us would like to believe.  Apple, Google and Facebook are the success stories we all aspire to be like; however, truth be told most tech businesses that go public drop like a rock out of the gate – in the industry they call this rollercoaster ride a “Market Correction.”  Orbitz for example, was listed around $20 something a share on NASDAQ as the initial strike price and hovered around $6 after.   The stock fell losing millions for our initial investors.  Our second IPO on NYSE wasn’t much better.  We went out around $15 and no matter what the leadership team did the stock price never reached that value again.

Orbitz and Square are not alone in the rapid decline of valuation after an IPO.  Chicago Based Groupon (NASDAQ: GRPN) have found themselves in a similar position.  There 5-year high was $26.19.  As of this writing, they are trading at $2.79.

YahooGroupon

So what is the deal with IPO’s?

Personally I think it comes down to how the valuation process works.  Everyone wants to experience the ride that Google and Apple had.  The process of getting there, however, is not easy.  The vast majority of IPO’s I’ve seen end up overestimating their valuations through a process that is not easy for startup tech leaders to navigate.  There are tricks that seed investment firms use to alter the formulas that calculate the valuation of a pre-IPO company.

As an example, when a Company gets to a certain FTE count then their valuation increases.  When they burn through their rounds of funding they get more money because their valuation goes up.  Every time a pre-IPO business hits a stage the hypothetical valuation of their business increases.  What is mind-blowing to me is that revenues are not weighted heavily in the valuation process.  They can be losing millions a day and continue to have a high valuation.  Unfortunately no one wants to admit that their numbers are overly inflated.  If a valuation goes down a pre-IPO a business is very likely dead.  No one will invest in them.  They will be out of money and are either acquired at a discount or bankrupt.

What happened to Square?

I don’t have any personal insight on Square, but chances are they fell victim to the same catch-22.  They have a good product, they have market recognition and they have experienced leadership.  So what happened?

I found this October 22, 2012 quote on the web that makes me think they were going through the cookie cutter increase our valuation process:

“Square, the mobile payments company started by Twitter co-founder Jack Dorsey, announced today that it will be moving its corporate headquarters next year to 1455 Market Street in San Francisco’s Central Market neighborhood (next to Twitter). The move will help accommodate the company’s hiring plans, which include adding about 600 employees over the next year to reach a total of 1,000. Square expects to move into its new location, which will have a chef’s kitchen and rooftop deck, by mid 2013.”

1000 employees is a big number!  How can any business manage the rapid growth in employee population?  Why would they need to grow to 1000 FTE’s?  What are the additional 600 people going to do for them?  Why not outsource and take advantage of more competitive labor rates?  Why?  They can’t.  They very likely had an objective to hit 1000 to get to their next round of funding and increased valuation.  If they don’t hit whatever the magic target is then chances are they can’t get the next round of funding and die on the vine.

“A decrease in valuation is a big deal for everyone, not just the employees of Square.  The Venture firms investing in them lose their money.  The people who invested in the Venture firms lose theirs.”

Ok, I’m sure by now you are all saying yea great.  What are we to do about it?  First, don’t invest in IPO’s just because there is a lot of hype.  Take the Warren Buffet approach. Invest in businesses you personally understand and love.  Accordingly, look at their product objectively and do your own evaluation.  Is the business truly unique?  Is it worth what they are selling it for?  Why is this product better than others out there?  Ask yourself if you, your friends, family and coworkers would buy/use it and continue to buy more as products evolve (public companies are expected to have solid quarterly revenue growth).  Then look at their competitive landscape.  In Square’s case, it isn’t that difficult to find formidable competitors.  Google, Paypal and Apple are in the mobile payment business.  Stable Businesses like Intuit is as well.  How is Square or any startup going to compete in a marketplace they do not control with highly capitalized and experienced competitors?

Step back and think about Apple, Facebook and Google.  Why have they been a big success?   They have a solid business plan that is clearly tied to revenues.  Facebook resisted for awhile, but they were smart about implementing a profitable revenue stream.  They monetized their captive audience well and respond quickly to their customers.  Google did the same with search, which is still by far their #1 profit center.  Google is so good they cornered the market in search and turned their company name into a verb Googling.  Apple lives by clearly understanding their customers.  People buy Apple products without even knowing what it does — and they pay top dollar for it.  Apple has a very loyal following.  They have  done an amazing job cultivating their customerbase.

The business plan with realistic revenue streams, not the employee count or how many rounds of investments they have had is what makes the difference.  My recommendation is to read the SEC Filings carefully before investing in any IPO.  Some of the stuff in those documents make my hair stand up on ends.  Here are some quotes that I pulled directly out of Square’s S1 filing:

“Our growth may not be sustainable and depends on our ability to retain existing sellers, attract new sellers, and increase sales to both new and existing sellers.”

“Our business has generated net losses, and we intend to continue to invest substantially in our business. Thus, we may not be able to achieve or maintain profitability.”

“We derive substantially all of our revenue from payments services. Our efforts to expand our product portfolio and market reach may not succeed and may reduce our revenue growth.”

“Our quarterly results of operations and operating metrics fluctuate significantly and are unpredictable and subject to seasonality, which could result in the trading price of our Class A common stock being unpredictable or declining.”

“An active trading market for our Class A common stock may never develop or be sustained.”

“The market price of our Class A common stock may be volatile, and you could lose all or part of your investment.”

Another area to explore with the SEC is who is actually making the money from the public offering.  In the case of Orbitz’ second IPO (NYSE OWW) we didn’t actually benefit a penny from the investment.  We raised somewhere around a billion dollars and the money was transferred from our bank account to Travelport (NYSE: TVPT) who owned 49% of the Company and was private at the time.  They in-turn transferred the funds to to their owner Blackstone who was also private.  I’m told those funds were eventually paid to Blackstone investors as dividends.  Another area in the Orbitz case was we were over valued from when we were acquired by Cendant.  We were actually carrying a loss on our books for being over valued by savvy investors that had nothing whatsoever to do with our leadership team.

Orbitz had outstanding leadership and we did what we could to keep the company going.  The Company survived for 15 years (I was there for 11 of those years); however, in the end the pressure from investors to grow stock eventually took the toll on the company leadership and they sold the company to Expedia (NASDAQ: EXPE) – our arch rival.  Chance are Square will eventually take the same path.  It is going to be challenging for them to move their stock price up with the cards already stacked against them.

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.
Multitasking is out -- Pinpoint focus is in

Multitasking is out — Pinpoint focus is in

Have you ever had this experience?…

You’re working on a project that requires creativity, such as drafting a report or working on budgets, and suddenly the phone rings, jolting you out of deep concentration. Even if you don’t answer the phone, it takes a few beats before you can re-anchor into what you were doing before.

That time lapse is your “mental CEO” shifting from one task, with a specific goal and set of “rules,” to another, with a completely different goal and set of rules. That shift takes time. The more complex the tasks, the longer the shift takes.

What else are you trying to do while reading this posting?

Sure, we can multitask. We might even believe we can do it without losing efficiency. But we would be fooling ourselves.

It has been proven in scientific studies that toggling between tasks slows the brain down. In effect, multitasking makes us momentarily stupid — unable to establish priorities, focus, or integrate anything new.

Have you ever tried to read your email while listening to a conference call? How about trying to have a serious conversation on your cell phone while driving?

Yes? Then you know that neither was done with your full presence or capacity. It’s as if you weren’t there for half of the time. You neither fully understood the emails nor fully integrated what the call offered. Too little of your consciousness was on driving – scary – and you couldn’t fully connect in the conversation.

We all know that multitasking has real costs. So why do we still do it?

It’s ingrained in our habits. All the “time-saving” devices of our technological age encourage us to be distracted and lose the ability to focus. And that’s a significant loss because focus is what brings prosperity. Distraction keeps us from it.

Focus means your full attention. Here are five daily practices to attain pinpointed focus and stop multitasking.

1. Clear your desk of anything unrelated to your current goal. Things command attention. The less you have before you, the less likely you’ll be distracted. If you are in an open environment like we are at Orbitz then schedule a conference room.

2. Schedule your time into blocks so that you can focus in on one individual task at a time. Include separate blocks for completing high payoff actions, emailing, working with clients, planning, etc. Then set sacred boundaries around those tasks. Complete one, then move on.

3. Do the most important thing first. High payoff actions are the things that will have the biggest positive impact on your success. What will bring you the results you want most quickly? Put that first, always.

4. Take short breaks away from technology between time blocks or tasks. Take a walk around the block, play music, do something physical or creative. This will clear your mind and help your mental CEO recalibrate to the next task.

5. Plan for tomorrow. Schedule 1 to 3 high payoff activities for the next business day.

Become a master single-tasker!

Take the next 30 days and replace your multitasking habits with these five daily practices and see how much more you accomplish and with less stress.

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.

7 Disciplines for High Performance

It has been awhile since I’ve posted to my blog.  I thought I’d talk a bit about Disciplines for High Performance.  What are some things that High Performing people do?

Goal Setting
Every morning, take three to five minutes to write out your top goals in the present tense. Get a spiral notebook for this purpose. By writing out your ten goals at the beginning of each day, you will program them deep into your subconscious mind.

This daily goal writing will activate your mental powers. It will stimulate your mind and make you more alert. Throughout the day, you will see opportunities and possibilities to move more rapidly toward your goals.

Planning and Organizing
Take a few minutes, preferably the night before, to plan out every activity of the coming day. Always work from a list. Always think on paper. This is one of the most powerful and important disciplines of all for high performance.

Priority Setting
The essence of all time management, personal management, and life management is contained in your ability to set the proper priorities on the use of your time. This is essential for high performance.

Concentration on your Highest-Value Activities 
Your ability to work single-mindedly on your most important task will contribute as much to your success as any other discipline you can develop.

Exercise and Proper Nutrition
Your health is more important than anything else. By disciplining yourself to exercise regularly and to eat carefully, you will promote the highest possible levels of health and fitness throughout your life.

Learning and Growth 
Your mind is like a muscle. If you don’t use it, you lose it. Continuous learning is the minimum requirement for success in any field.

Time for Important People in your Life 
Relationships are everything. Be sure that in climbing the ladder of success, you do not find it leaning against the wrong building. Build time for your relationships into every day, no matter how busy you get.

Action Exercise
These seven disciplines will ensure that you perform at the highest level and get the greatest satisfaction and results from everything you do. Study these seven disciplines and then make a plan for how you can incorporate each of them into your daily life.

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.

Boosting Moral

 

There’s no denying that occasional, unexpected rewards from management can really lift a group’s spirits. Thoughtful gestures such as a surprise lunch together, tickets for an event that can be shared later with a spouse or a snazzy new espresso machine for the office speak louder than words for saying, “We appreciate you.”
When budgets were especially tight this past year, smart companies rewarded heavily burdened employees with bonus paid time off. Whether it was a half day, a full day, or a chance to plan for leaving early on Friday afternoon, these companies showed they really cared about taking the “mean” out of lean times.
But boosting morale in a consistent, meaningful way is a day-in, day-out way of life for businesses who want to retain valuable talent. Here are some best practices from the champions:
  • Communicate honestly & clearly about where the company is headed and what management is doing to get there. Give employees a choice of ways to submit questions and give feedback to management. Conduct an employee survey to find out what their current perceptions and concerns are. Address their concerns.
  • Don’t shy away from difficult conversations. Your silence leaves a void for gossip and (probably inaccurate) speculation, while your straightforward honesty builds trust and credibility. Respond to employee questions, even when you have to admit you don’t know the answer or have made a mistake that requires a course correction.
  • Show employees how their role fits into the big picture. Connect individual, group and departmental goals to company goals. Connect company goals to the mission and potential to positively impact stakeholders and the industry at large. This underscores daily activities by connecting them to the team’s shared effort to achieve outcomes and makes work more meaningful in the process.
  • Apply fair, consistent and transparent policies in the workplace. Don’t selectively allow certain people to, for example, borrow company equipment for personal use, bring dogs or kids to work, or sidestep dress codes unless everyone can. Have a policy for telecommuting and flexible scheduling that is based on a logical evaluation of roles and tasks, not preferential treatment for individuals. If some employees have earned extra privileges through performance, be sure that the reasons (and the way others can earn the same privileges) are clearly understood.
  • Be respectful. By all means acknowledge when an employee has made improvement in an area where they’ve struggled, but be sensitive to their feelings by giving reinforcement in private when appropriate.
  • Show appreciation publicly. Make it a point to praise employees for a job well done in front of their peers and customers, but be sincere or don’t bother. Everyone else’s baloney-indicator works as well as yours does. And there’s no need to limit positive feedback to an employee of the month program. Just as it takes (depending on which marketing expert you listen to) 3 – 7 repetitions for a person to absorb a message or recognize a brand name, it takes multiple messages for employees to really believe that you see and value their contributions. Remember that your frequent, honest praise for a job well done establishes a foundation of respect between you. This is the foundation that will give employees the confidence to feel safe discussing areas where they need improvement.
  • Deliver development opportunities. Professional development is a vote of confidence in their abilities and an investment in employees’ career progression within your company. They recognize both, and the bonus (beyond improved performance here and now) is that the company will have a healthier internal talent pool to draw from as growth opens up new positions.
  • Offer a sense of ownership. Invite employees to make suggestions for better ways to get the work done. Really listen. Then give them responsibility for integrating a good idea or process into the job. Adults appreciate being treated with respect for their abilities and judgment. At the same time, over-extended managers need to strengthen the “delegation muscle.” For example, use a performance management and development process that actively involves employees in decisions about enhancing their competencies.
  • Allow choice & control when you can. Being micro-managed should be the consequence of a pattern of poor decision-making, not a standard operating procedure. Preferred “best practices” should be established because they are clearly connected to results, not based on one person’s whims. Look for opportunities to give employees healthy autonomy over their personal work space and processes, as long as they are not in conflict with company values.
  • Align business practices with core values. Really make working at your company something to be proud of. “Walk the talk” is just another way to say “Have integrity.” It means that the values your company claims on the company web site or in documents are in fact visible in its actions toward employees, customers and vendors.

 

Managers and their teams thrive in an atmosphere of mutual respect and trust. An assessment of the entire group provides a team motivators and behaviors report that shows at a glance where the group’s strengths and potential lie.
Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.

Responding, Not Reacting, To Life

Starting a new job got me thinking about how to deal with major life changes.  When you respond to life, that’s positive; when you react to life, that’s negative. Example: You get sick and go to the doctor. Chances are good that after an examination, they will give you a prescription with instructions to return in several days.

If, when you walk back in the door, the doctor starts shaking her head and says, “It looks like your body is reacting to the medicine; we’re going to have to change it,” you probably would get a little nervous.

However, if the doctor smiles and says, “You’re looking great! Your body is responding to the medication,” you would feel relieved. Yes, responding to life is good.

A few years ago, there was much turmoil in the U.S. job market. People were losing their jobs through downsizing, mergers, and takeovers. This created some unusual opportunities for many people. For example, the Wall Street Journal reported that in a five-year period, more than 15 million new businesses were created, well over half of them by women. Very few of the women had any marketable skills, and all of them had great financial need.

Most of the new businesses were “trust” businesses, meaning that the women collected the money before they delivered the goods or services. Many, possibly most, of those new businesses would never have been started had not an unfortunate event occurred in the people’s lives. When those events did occur, and needs became obvious, the women chose to respond, and there is little doubt that many of them are better off now than they were before.

The message is clear: If you respond to life instead of react to it, then you’ve got a much better chance of achieving success.

Chicago CIO and Entrepreneur. Started @Orbitz, @AssureFlight, Team ITG, YourPrivateLine and others. I Love technology, startups and meeting interesting people.