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need to know about: finance, marketing, management, operations
"contrary to popular belief, my experience has shown me that the people who are exceptionally good in business aren't so because of what they know but because of their insatiable need to know more.
the problem with most failing businesses i've encountered is not that their owners don't know enough about finance, marketing, management, and operations - they don't, but those things are easy enough to learn - but that they spend their time and energy defending what they think they know. the greatest businesspeople i've met are determined to get it right no matter what the cost.
and by getting it right, i'm not just talking about the business. i mean that there is ... something uplifting...some higher end... that "getting it right" would serve
on the otherhand, notwithstanding the search for "something higher," the best of the best i have known are extraordinarily grounded people "
"to live through an impossible situation, you don't need the reflexes of a Grand Prix driver, the muscles of a Hercules, the mind of an Einstein. You simply need to know what to do." -- Anthony Greenbank, The Book of Survival
the Fatal Assumption: "if you understand the technical work of a business, you understand a business that does that technical work"
problem that often happens when a technician starts a business:
"the real tragedy is that when the technician falls prey to the Fatal Assumption, the business that was supposed to free him from the limitations of working for somebody else actually enslaves him.
Suddenly the job he knew how to do so well becomes one job he knows how to do plus a dozen others he doesn't know how to do at all. "
"the technician...takes the work he loves to do and turns it into a job. the work that was born out of love becomes a chore, among a welter of other less familiar and less pleasant chores. Rather than maintaining its specialness, representing the unique skill the technician possesses and upon which he started the business, the work becomes trivialized, something to get through in order to make room for everything else that must be done."
"is it any wonder we have such a tough time keeping our commitments to ourselves?
it's not that we're indecisive or unreliable; it's that each and every one of us is a whole set of different personalities, each with his own interests and way of doing things. asking any one of them to defer to any of the others is inviting...a war ... well, that's the kind of war going on inside the owner of every small business.
... it's a three-way battle between The Entrepreneur, The Manager, and The Technician"
"The entrepreneurial personality turns the most trivial condition into an exciting opportunity. The Entrepreneur is the visionary in all of us.... lives in the future, never in the past, rarely in the present....in science, the entrepreneurial personality works in the most abstract and least pragmatic areas of particle physics, pure mathematics, and theoretical astronomy. ... every strong entrepreneurial personality has an extraordinary need for control. living as he does in the visionary world of the future, he needs control of people and events in the present so that he can concentrate on his dreams.
given his need for change, The Entrepreneur creates a great deal of havoc around him, which is predictably unsettling for those he enlists in his projects.
as a result, he often finds himself rapidly outdistancing the others.
the farther ahead he is, the greater the effort required to pull his chohorts along.
this then becomes the entrepreneurial worldview: a world made up of both an overabundance of opportunities and dragging feet.
the problem is, how can he pursue the opportunities without getting mired down by the feet?
the way he usually chooses is to bully, harass, excoriate, flatter, cajole, scream, and finally, when all else fails, promise whatever he must to keep the project moving.
to The Entrepreneur, most people are problems that get in the way of dream.
The managerial personality is pragmatic. Without The Manager there would be no planning, no order, no predictability.
The Manager is the part of us that goes to Sears and buys stacking plastic boxes, takes them back to the garage, and systematically stores all the various sized nuts, bolts, and screws in their own carefully identified drawer.... lives in the past
...
Where The Entrepreneur craves control (bayle: i'd say mb not 'control', although demanding control is the result interpersonally, but 'a world that conforms to ideals'), The Manager craves order (bayle: i would say that The Manager is content with a non-ideal world but attempts to make their own situation within that world maximally predictable).
Where The Entrepreneur thrives on changem The Manager compulsively clings to that status quo.
Where The Entrepreneur invariably sees the opportunity in events, The Manager invariably sees the problems.
The Manager builds a house and then lives in it, forever.
The Entrepreneur builds a house and the instant it's done begins planning the next one.
The Manager creates neat, orderly rows of things. The Entrepreneur creates the things The Manager puts in rows.
The Manager is the one who runs after the Entrepreneur to clean up the mess. Without the Entrepreneur there would be no mess to clean up.
Without The Manager, there could be no business, no society. Without The Entrepreneur, there would be no innovation.
The Technician is the doer
"if you want it done right, do it yourself" is The Technician's credo.
The Technician loves to tinker. Things are to be taken apart and put back together again. Things aren’t supposed to be dreamed about, they’re supposed to be done. If The Entrepreneur lives in the future and The Manager lives in the past, The Technician lives in the present. He loves the feel of things and the fact that things can get done. As long as The Technician is working, he is happy, but only on one thing at a time. He knows that two things can’t get done simultaneously, only a fool would try. So he works steadily and is happiest when he is in control of the work flow. As a result, The Technician mistrusts those he works for, because they are always trying to get more work done than is either possible or necessary. To the Technician, thinking is unproductive unless it’s thinking about the work that needs to be done. As a result, he is suspicious of lofty ideas or abstractions Thinking isn’t work, It gets in the way of work. The Technician isn’t interested in ideas, he’s interested in “how to do it” To The Technician, an idea needs to be reduced to methodology if they is to be of any value. And with good reason. The Technician knows that if it weren’t for him, the world would be in more trouble than is already is as Nothing would get done, but lots of people would be thinking about it.
Put another way, while The Entrepreneur dreams, The Manager frets, and The Technician ruminates The Technician is a resolute individualist, standing his ground, producing today’s bread to eat at tonight’s dinner. He is the backbone of every cultural tradition, but most importantly, of ours. If The Technician didn’t do it, it wouldn’t get done.
Everyone gets in The Technician’s way.
The Entrepreneur is always throwing a monkey wrench into his day with the creation of yet another “great new idea” On the other hand, The Entrepreneur is always creating new and interesting work for The Technician to do, thus establishing a potentially symbolic relationship. Unfortunately, it rarely works out that way Since most entrepreneurial ideas don’t work in the real world, the Technician’s usual experience is one of frustration and annoyance at being interrupted in the course of doing what __needs__ to be done to try something new that probably does not need to be done at all.
The Manager is also a problem to The Technician because he is determined to impose order on The Technician’s work, to reduce him to part of "the system".
But being a rugged individualist, The Technician can’t stand being treated that way To The Technician, “the system” is dehumanizing, cold, antiseptic, and impersonal. It violates his individuality. Work is what a __person__ does. And to the degree that it's not, work becomes something foreign.
To The Manager, however, work is a system of results in which The Technician is but a component part.
To The Manager, then, The Technician becomes a problem to be managed. To The Technician, The Manager becomes a meddler to be avoided. To both of them, The Entrepreneur is the one who got them into trouble in the first place!
The fact of the matter is that we all have an Entrepreneur, Manager, and Technician inside us. And if they were equally balanced, we’d be describing an incredibly competent individual.
The Entrepreneur would be free to forge ahead into new areas of interest, The Manager would be solidifying the base of operations, and The Technician would be doing the technical work.
Each would derive satisfaction from the work he does best, serving the whole in the most productive way.
Unfortunately, our experience shows us that few people who go into business are blessed with such a balance. Instead, the typical small business owner is only 10 percent Entrepreneur, 20 percent Manager, and 70 percent Technician.
The Entrepreneur wakes up with a vision. The Manager screams ‘Oh, no”. And while the two of them are battling it out, The Technician seizes the opportunity to go into business for himself. Not to pursue the entrepreneurial dream, however, but to finally wrest control of his work from the other two.
To The Technician it’s a dream come true. The Boss is dead.
But to the business it’s a disaster, because the wrong person it at the helm. The Technician is in charge! "
"...the work of an Entrepreneur is to wonder...I wonder. I wonder..."
chapter 3 infancy: the technician's phase
lifecycle of a business
infancy: "finally, you can do your own thing in your own business....in the beginning, nothing is too much for your business to asl. As The Technician, you're accustomed to "paying your dues"... there's work to be done, and that's what you're all about. ... and so you work. ten, twelve, fourteen hours a day. seven days a week. ... but now you're doing not only the work you know how to do but the work you don'f know how to do as well. You're not inly making it but you're also buying it, selling it, and shipping it... keeping all the balls in the air.
It's easy to spot a business in Infancy - the owner and the business are one and the same thing. ... "
and customers love you b/c you give them high quality. the business grows and grows, and then there's too much work for you to get through. then you get behind and start dropping balls. and your enthusiasm starts waning, and quality starts dropping.
you try putting in more hours. "but the balls keep dropping."
"all of a sudden, you want to hide." you're embarrassed to be associated with the business. "you find yourself at the end of an unbelievably hectic week, late on a saturday night... thinking about all of the work you didn't get done this week, and all of the work waiting for you next week. And you suddenly realize __it simply isn't going to get done__. There's simply no way in the world you can do all that work yourself!
In a flash, you realize that your business has become The Boss you thought you left behind. __There's no getting rid of the Boss!__
Infancy ends when the owner realizes that the business cannot continue to run the way it has been; that, in order for it to survive, it will have to change.
When that happens -- when the reality sinks in -- most business failures occur.
When that haeppens, most of The Technicians lock their doors behind them and walk away.
The rest go on to Adolescence. "
"there's nothing wrong with being a Technician. There's only something wrong with being a Technician who also owns a business! Because as a Technician-turned-business-owner, your foxus is upside-down. You see the world from the bottom up rather than from the top down. You have a tactical view rather than a strategic view. You see the work that has to get done, and because of the way you're built, you immediately jump in to do it! You believe that a business is nothing more than an aggregate of the various types of work done in it, when in fact it is much more than that.
If you want to work in a business, get a job in somebody else's business! "
questioner: "but i can't even imagine what my business would be like without me doing all the work..if it weren't from me, my customers would go someplace else. I'm not sure I understand what's really wrong with that" answer: "Well, think about it... in a business that depends on you, on your style, on your personality, on your presence, on your talent and willingness to do the work, if you're not there why of course your customers would go someplace else...because in a business like that what yout customers are buying is not your business's ability to give them what they want but __your__ ability to give them what they want. And what's wrong with that?
" That what you call The Entrepreneur, I have always thought of as my spirit. 'My spirit' is what my aunt called it. She used to say to me, 'Sarah, feed your spirit. It is your spirit which gives you life.' I remember as a little girl, it was my spirit that always got me into trouble. It was my spirit that my teachers complained about so much. They used to say to my parents, 'If it weren't for Sarah's spirit, she would be doing much better in school than she does.' It was my spirit that would dream when I was in the classroom, rather than pay attention to what was going on around me.
I used to fantasize about things all the time -- my head went to the strangest places. Anything could set me off. And while that part of me would really seemm to tick my teachers and my parents off, my aunt always seemed to nurture it. 'You need to be very gentle with your sipirt, Sarah,' she used to say to me. 'It needs to be free, but it also needs you to direct its attention. Too much of one, and not enough of the other, and your spirit will take off like a wild horse. That's how you need to think of your spirit, Sarah, like a wild horse. Part of it is there to serve you, and another part to serve itself. The thing you need to learn is which part is which. If you put it behind a fence, you will kill it. But if you leave it to come and go as it pleases, you will never understand it.'
"
make an org chart: roles and responsiblities
otherwise, when something isn't getting done, no one in particular will feel responsible for correcting it (or, if they tell others to correct it, it won't be clear if they have the authority to do so)
todo page 171
have detailed operations manuals that tell everyone exactly what to do
take every employee very seriously
take the correct operation of your business very seriously. your business must be a symbol of your values. more must be riding on it than "just work" or no one (but maybe you) will care. the idea behind the work must be more important than the work itself.
"your people strategy is the way you communicate this idea"
you have to set the standard and live this idea seriously. and the manner in which you communicate the idea to employees must be consistent with the idea.
describe the idea to job applicants. talk about it again the first day on the job.
take the time to talk to new employees at length to tell them about your values, right at the beginning. this is more important than almost anything else that is going on, so almost everything else can wait.
the culture of a particular workplace can be thought of as a game. some rules of the game:
beware of hiring professional managers -- they may manage the way they've been taught to manage elsewhere, which may be in conflict with your business's values/culture/vision.
"..you need people who want to play your game... not people who believe they have a better one"
"when it comes to marketing, what you want is unimportant. It's what you customer wants that matters."
your customer comes to your business and absorbs all sensory data.. including seeminly irrelevant details such as the crease in your slacks, whether your shoes are shined, how your hair is combed, the color of the walls, etc. Your customer's unconscious mind processes all of this. Your customer's unconscious mind quickly decides whether or not it will buy based on all available stimuli. "in a sales presentation,... the sale is made or lost in the first three minutes". buying decisions are made irrationally.
you have to focus not on your customer's needs, but on your customer's perceived needs
you need to know your customer's demographics, and psychographics (which means why a customer of a certain demographic buys).
identify other products that customers who buy your product also buy. then look at how those products position, packagae, and advertise themselves
you can't just randomly create marketing materials. you have to try to get some data on which colors, presentations, etc work best on your target market.
(lead generation, lead conversion, client fulfillment) := (marketing, sales, ops)
3 kinds of system: hard systems (inanimate objects, including machines and buildings), soft systems (people and ideas), information systems (e.g. inventory control, cash flow forecasing, sales activity summary reports)
an example of a soft system is a selling system: e.g. a literal script of the words that a telemarketer will use to sell your product
suggest a 3-call process.
1. appointment presentation. goal: to get an appointment (not to qualify the customer). method: engage the prospect's unconscious needs "by speaking primarily about the ((value of the)) product you have to sell rather than the commodity". if you do this right, the prospect's emotional committment will already be made after hearing the pitch, and all they will need is "to find the rational armament to support it", which you will deliver in the next call 2. the needs analysis presentation. first, repeat what you said in the appointment presentation, in order to reestablish the emotional committment. second, tell the prospect an overview of "how you would like to...fulfill your promise to him". third, establish credibiliy by communicating your company's expertise in the domain (not necc. by facts, just by a postitioning statement), and by expressing a "personal willingness to do whatever is necessary to utilize that expertise on" the prospect's behalf. Communicate that you understand what frustrates the prospect with the status quo, and and that you have "the expertise to alleviate those frustrations -- not personally but systematically". Fourth, describe the product and why it works so well. Not what it does, but the impact it will have on the prospect. fifth, complete a questionaire with the client that will let you tailor the solution presentation to them. sixth, provide the customer with the information you promised in the appointment presentation (you could also do this step first). seventh, make an appointment for the solutions presentation 3. the solutions presentation. if you have done the other two steps right, the sale is already made. review the needs analysis presentation. now present the customized solutions. at the end, ask for the sale (and then wait for the answer... don't speak again after you ask until the client says something).
example of an information system: tracking the following sales metrics:
from this, you can calculate conversion rates, find outlier salespeople, and calculate cost of a customer at each stage in the pipeline
the remaining chapters are philosophical and don't lend themselves to summary
