Planning, Startups, Stories

MBA Get Rich Quick and Easy -- Not

From a letter in yesterday's New York Times:

The M.B.A. program was never designed as a personal get-rich-quick plan. It's about entrepreneurship, building organizations and preparing for a lifetime of principled leadership in all kinds of operations — not just on Wall Street, but around the world.

For a significant number of young women and men, business school provides valuable knowledge, skills and perspectives that will transform potential into a real capacity for leadership. A rigorous M.B.A. education is an excellent long-term investment.

That's signed by Carl Kester, a finance professor and deputy dean for academic affairs at the Harvard Business School.  It's here as a follow-up to my posts MBA buzzwords and Reflections on MBA experience.

Here's the link to the letter, although it might require signing up for NYTimes Select -- which is now free, but presumably still requires registration.

Be True to Your Home Office Self

There was a television commercial a while back in which a supposed small business owner answers the phone with different voices. "Customer service?" in one voice. "I'll connect you to shipping." Then "this is shipping" in another voice. And so on.

This comes up here because of the New York Times piece called Headquarters at Home and Proud to Be There about home offices that don't pretend they aren't home offices. That reminded me of those old days, and my business startup in my home office.

My company has 40 employees now, but I started it in a home office in a three-bedroom house by the commuter tracks in Palo Alto. We were really broke after two years of business school relatively (I was 33) late in life, and we had four kids. Creative financing was required (equity sharing). We had the four children in one bedroom in two bunk beds, we parents in another bedroom, and my home office in the third. It included a computer I'd built myself, as big as a small refrigerator, plus desk and bookcase, a very early Apple II, and a disconnected keyboard for our youngest  daughter (at the time -- she has a younger sister born later).

Those are very good memories. My then-youngest daughter and I spent a lot of time in that office. She learned early that as long as she was quiet she was always welcome. She would color on the floor sometimes, sit beside me and pretend to type, and she liked to sit on my lap during long phone calls, taking advantage of the lull in the typing. I would use my finger to tell her to be quiet, and her eyes would twinkle with the joke between us, as she climbed into my lap and stayed quiet.

Home offices weren't as trendy back then as they are now, but I did hang around with some others working out of home offices, and the rule was not to hide it. Generally, it seemed like bad business to hide that you were in a home office because it was too easy to get caught. Pretend you're something you're not and you look like an idiot when it comes out. What if the dog barks or a child cries while you're pretending to be downtown. I think it's interesting that the New York Times makes an issue of it with the "headquarters and proud of it" theme, because it's just common sense.

I don't think anybody would seriously advocate for pretending to be different than you are. There are advantages to the home office situation. My best-ever consulting client, who hired me for repeat business pretty steadily over 12 years, used to say that he liked working with one-person consultants because he knew who was doing the work. And the home office went right along with that.

So now we occupy the second floor of a local bank building, with a fairly standard office space full of the same kind of cubicles that Dilbert lives in.  The home office became impractical as soon as the business needed to take on employees, so I moved out to a small office about a mile away. Even then, however, we still did a lot of work at home and some of the disk assembly chores in the early days of Palo Alto Software were done by a family with a lot of kids spending weekend mornings with piles of plastic floppy disks and sticky software labels saying "Business Plan Toolkit."

Is there a lesson here? I think so. I think you have to be yourself in business, as in the rest of your life. It's a lot harder trying to be somebody else.

New online video

Today I posted the recorded version of a webinar I gave earlier this week to the Young Inventors International organization. That's now video number 1 on my videos page. No talking heads, just the slides and the voice. It's an hour long, but broken into intervals so it loads and streams quickly.

Thanks to the YII organization for providing me with the file.

More Priorities, Less Likelihood of Implementation

I wish I had data to prove it, but I will say that I've seen it over and over again for 30-some years: in business planning, three to five priorities work, and 10 or 20 priorities doesn't work. In fact, it's a classic inverse relationship: the more priorities, the less likelihood of implementation.

Even without data, there is the anecdotal value of how many business plans I've dealt with. The illustration here is a slide I've been using in presentations since the 1980s.

It's a classic inverse relationship. If one goes up, the other goes down. Like traffic and speed, clouds and sun, or teenagers in the household and money in the parents' pocket.

There's an obvious reason. Planning is about people and management, and people and management is about knowing when to say yes and when to say no. Priorities are sometimes about having to say no, we can't do that distracting other thing, we have to do this important first thing. That boils down to a matter of priorities.

Priorities are manageable when there are three, four, maybe five of them; but they are meaningless when there are 10 or 20. Who is going to believe the importance of not doing something just because it's not a priority when there are 20 priorities already? What's wrong with a 21st?

The opposite is focus. I've seen some real successes in business planning when the priorities made sense and the entire company was able to understand the priorities and focus down hard on them. Example? Apple Computer grew from an unmeasurable market share to 15% and from $180 million annual sales to $1.5 billion from 1991 to 1994 mainly by focusing on two key priorities: work with major Japanese companies as allies and develop the differentiation of the graphic operating system as a tool for using Kanji characters.

Thanks to Seth Godin for reminding me of this today with his post The Power Of Chunking. "There really is a rule of seven," he says, "when it comes to putting ideas into your head." I'm saying less than seven in this business planning context, but Seth is in a much broader context. And, at the end, he adds:

Seven is probably too many bullets. Three is more like it.

Three we can handle. Three is manageable and memorable and actionable. Give me three things and I can find a place for them in my brain. Each of those three things can probably have three subthings if you like. And then, at least for now, that's it.

Business Planning by Gender

Truth is I'm glad to be corrected on this one. Mommy CEO Sabrina Parsons does the correcting with Women, Business, and The Plan over at the bplans.com blog. In my post last week Is Business Planning Gender Specific? I thought that this was a rhetorical question, and I went on to muse about why sales of the leading business planning software would seem skewed toward men.

Sabrina catches me at my own game (in past posts, that is) as she points out that all we really know is that men seem to fill out registration data more frequently than women. She adds that of course women plan their businesses as well as, and as often, as men, whether or not they use our software.

I have to disagree. I think we are dealing with skewed data. The SBA released a report in Aug of 2006 stating that women are starting businesses at twice the rate of men (thanks to Penelope Trunk for finding this information). So why is our survey data so skewed towards men?

I think this is a case where you need to look at how Palo Alto Software got the results it did, and why that may be. We emailed a survey to a group of our customers. More than 70% of the respondents were male. Does that mean that 70% of our customers are male? No. I think it means that men are that much more likely to fill out a complete a survey.

In my defense, my original post, despite the rhetorical title, wasn't really saying that women do less business planning than men, only that they seemed less inclinded to use the software. Like Sabrina, I also included data showing that women in this country started as many, or more, companies as did men.

Regarding the business planning, whether women or men are different, she makes her point very eloquently in her How can you possibly manage without planning?

How can I possibly think I can do a good job managing Palo Alto Software, if I don't create a forecast and a budget for the next year? (I can't)!!! By creating the forecast and budgeting expenses I can easily work with our controller month by month to see where we stand financially. Did we sell as much as we predicted? Maybe we sold more or less? Where did we fall in our expenses? Did we spend more or less? Month by month, now that I have a plan, I will be able to assess the situation and make any adjustments necessary. I can then communicate this to my team of managers and make sure they know where they stand with their budgets.

This seems like one of those posts where people will say "DUH"... but you would be surprised at how many businesses we hear from that DO NOT HAVE A PLAN. They say they are too busy running their company to take time to plan. WHAT?!?

She is, after all, "Mommy CEO," and she's also very big on planning. On that we completely agree.

If You Dread Planning Your Startup, Don't Start It

Note: this is crossposted here from the original at Up and Running, my blog on Entrepreneur.com. Tim

Earlier today I had one of those light bulbs go off in my head. I'm referring to those times when you're reminded of something you already knew, but had forgotten. In my case today it was this: planning your new business, the one you're thinking of starting, ought to be fun. Planning isn't about writing some ponderous homework assignment or dull business memo, it's about that business that you want to create. It should be fascinating to you. What do people want, how are you going to get it to them, how are you different, and what do you do better than anybody else?

Honestly, isn't that related to the dreaming that makes some of us want to build our own businesses? It was for me, every time, including those that made it and those that failed. Dreaming about the next thing I wanted to do was always part of it. Dreaming is related to looking forward, anticipating, and — in this case — business planning.

This came up this morning during my second day of video sessions for SBTV, which has been filming me on starting and managing a business, and business planning. I was answering Beth Haselhorst's question relating starting a business to getting out of the cubicle, when I realized that I was in danger of forgetting that business planning is part of the dreaming and part of the fun.

I think what's important is that none of us should be intimidated by business planning because of what I've called the not so big business plan, or the point I made in this blog last month about starting anywhere you like. The business plan is a way to lay out your thoughts and think it through — it shouldn't be some dull ponderous task you have to get through.

If thinking through the core elements of your business, or for that matter the details of your business, isn't interesting, then get a clue. You're not really looking forward to it. Do you not want to do it?

Remember, you don't have to do the whole plan all at once. One of the most common and damaging myths about planning is that you are supposed to work only on your business plan until you finish that plan. To the contrary, you should be enjoying thinking about the market, what you do well, how you want to focus, what sales might be, what costs might be, and so forth; and you should be writing some of that down, simple and without a lot of intimidation, just write it down and save it and then do something else. You start your plan wherever you want to, and you start using it the next day, and you don't worry about exactly when it is formally done, because it never will be. Just get going, but enjoy the thinking and planning while you do.

If you dread the planning of your next vacation, stay home. If you dread the planning of your new startup, don't start it.

Don't You Hate These Trade Show Tactics?

Imagine yourself standing at a trade show booth, attending to customers, offering information to potential customers, doing business. Your company paid thousands of dollars for the booth space, plus time and effort and shipping to get the booth and related materials there, set it up, and do your sales and marketing at the event.

What you want, naturally, is customers to talk to. Everybody hates an empty trade show. Standing in an empty booth, waiting for somebody to show up in the empty aisles, is boring and bad for your feet. Standing in a busy booth, talking to the people you came to see, is
exhilarating. And exhausting as well, but when it's a constant conversation with a lot of interested people all day, it's great.

What you don't want is to be standing in your own booth doing your own business and having people come up to you to sell you whatever it is that they are selling. What are people who do that thinking? Isn't this worse than cold calling, in that you're in a spot you can't leave?

What's the appropriate response?

And it gets worse. Some people, without booths, roam the trade shows like sharks, pigeonholing innocent trade show attendees as potential customers, acting as vendors without buying a booth, and most irritating of all, standing in or near the booths of their competitors. So are they smarter than the rest of us who have paid for the booths?

Say Your Business Plan Every Day

I was on the Small Business Advocate radio show again today (I've been doing it regularly for 10 years now). This morning our on-the-air conversation brought up Jim's Don't Be Intimidated article, in which he says that you say your business plan every day:

If you are planning to start a business or are already running a business, you are actually "saying" your business plan, at least components of it, EVERY DAY. Check this out:

The Conversation
Me: Hi Joe. Heard you are starting a new business.  What kind?

You: Oh, hi Jim. Thanks for asking. Yeah, John and I are going to be selling square widgets to round widget distributors. "

Me: How're you going to do that?

You: I found out that no one has thought to offer square widgets to these guys. I asked around, and it looks like these guys not only NEED square widgets, but they will pay a premium for them. "

Me: Sounds good.  Where are you going to get your square widgets? "

You:   "I found out that the round widget guys don't need the perfect square widgets, so I am buying seconds, cleaning them up a little, and repackaging them for my round widget customers.  "

Me:    "Sounds like you found a niche.  How many can you sell in a year?  "

You:   "We've identified the need for 15,000 this year, and with the trend in the market, we think we can double that within three years. Gotta go. See you later.  "

How long did this conversation take - two minutes from start to end?  Let's look at what was said.  You identified your:

• business
• management team
• industry
• business focus (your niche)
• customer profile
• vendor profile
• pricing strategy
• market research
• growth plans.

See?  You probably  "say" your business plan every day, you just might not be getting it down on paper, or in your computer.

This kind of core value is one of your business drivers. If you're normal, your interested in this, you think about it a lot, and you refine and revise it as necessary in a changing world, changing market. Build your business plan around this core.

Turn Your MBA Green

I am so happy to see this. The green MBA. It is about time. I caught it this morning on the Huffington Post, which referred me to a wire service story by Michelle Locke, which referred me to the Green MBA program of the Dominican University and the Beyond Grey Pinstripes program which ranks MBA programs for social consciousness.

I've had some fun with the MBA degree and MBA stigma in past posts on this blog, particularly after a Guy Kawasaki post on his blog that became controversial (though for no good reason ... it was just funny ... but that's another story).

This is a serious follow-up to the earlier poking fun. The underlying point here is that serious business ought to be dealing with serious problems, because we -- small business, entrepreneurship, medium business, and large business -- well, I can't finish the sentence without pomp and platitude and predictability. It's just good, or maybe it's just me. I believe business is better when it has values. Guy Kawasaki says "make meaning" as part of the Art of the Start. I say give your customers value.

"Greening" has been a long time coming. A show of hands please ...  how many of you remember the stir caused by "The Greening of America?" Published in 1970 (Ok, a show of hands, how many of you were old enough to know better in 1970) it was essentially a tribute to so-called "counter-culture" ideas of the late 1960s. We're talking about Mario Savio and the free speech movement in Berkeley in 1964, then the anti-war movement of the late 1960s, the world wide student movement in 1968, civil rights, the Sierra Club, environmentalism, and hippies.

Which doesn't mean to imply that anything has changed that much, despite a new anti-war movement, Greenpeace, what we call "tree hugging," and environmental activism, and whatever other activism is there. Nor does it imply that I didn't "sell out" many years ago, happily in fact, when I crossed from regular journalism to business journalism and from there, eventually, to an MBA degree and business planning and building my own company. So while I would have liked to have clung to that "hippy" label I once wore with pride, I'll settle for "ex-hippy."

So. of course I recognize that the revolution of the late 60s died out, fizzled, or faded slowly into the Reagan years and whatever cynical non-idealist description you want to apply to our present world of spill and spin.  Then we get new sparks like this Green MBA and it reminds me that there is progress. We've been talking about global warming since the 1960s so I suppose it's discouraging how long it's taken, but then "An Inconvenient Truth" is a stock phrase now. Green is good. Organic is good. Maybe there's hope. And wire services are writing about green MBAs. 

And with that, risking the danger of getting boring and obvious, I'll close this post with a list of the top "green" MBA programs. You might notice that three of the top five are from outside the United States, which is interesting. And, with apologies for bragging, in a way, because I have degrees from two of the top five and one of the others is from Mexico, my country-in-law.  This ranking is from BeyondGreyPinstripes.org.

3 Ways to Make Employees Miserable

I just listened to an HBR Ideacast interview with Patrick Lencioni, author of  The Three Signs of a Miserable Job. Here's a quote:

A friend of mine was a waitress in college ... she said her and her friends would come to work and complain all the time about the people who came into the restaurant because they stayed too late, or they made a mess ... and they always wanted to get out of there as fast as they could. Finally their manager sat down with them and said 'look at these people who come here. These are people who are celebrating birthdays and anniversaries, or who are coming in to meet an old friend, or who have a stressful life and they need to go someplace where they can actually relax and get a good meal. We are the conduits of that. Everyone who comes in here has a story. Our job is to help them make this the best experience possible.'

He was sincere in that. After a while these waitresses starting coming to work with a different sense of purpose. During the breaks and after work they would talk about the different events they'd served, and the people who came into the restaurant. He turned what looked like a crummy job into a vocation. All people deserve that.

Notice the way his story puts it, that the waitresses deserved to have meaning in their job. It isn't about how their manager tricked them into working harder, it's about how he gave them relevance. Irrelevance, he goes on to say, is one of the three signs. People deserve to have their jobs matter. Good companies, and good managers, need to give them that level of satisfaction.

Who does the administrative assistant help? Her boss. Yet her boss is probably reluctant to acknowledge the impact that he or she has on his or her life because they don't want to seem selfish, so they fail to really sit down and say do you realize how  much better my personal and professional life is because of you? Do you know every thing you do for me makes me happier and less stressed?

Every employee needs to know that there is somebody out there that they serve, and when we don't let people know that, we deprive them of a fulfilling job.

This irrelevance is the second of the three signs. The first is anonymity:

People cannot be fulfilled in their work if they are not known. All human beings need to be understood and appreciated for their unique qualities by someone who is in a position of authority. People who see themselves as invisible, generic or anonymous cannot love their jobs, no matter what they are doing.

The third is a coined word, immeasurement. It reminds me of what I called metrics in a recent post on this blog.

All human beings in any kind of a job need some way to assess their own performance that's objective. It might not be numerical or easily quantitative, but it's somewhat objective and observable by them, because then they are not left to depend upon the opinion or the whim of a manager once a year during a performance appraisal. People need to be able to go home from work every night, or every week, or every month, and know where they stand, and know what they can do to influence how they're working. This is why sales people are generally very satisfied in their job, because they have very clear evidence of their performance. Most people think they are coin operated, but in fact a quota is a wonderful scoreboard for them evaluating themselves, and all people need that.

Sometimes it requires a manager to be very creative in how they come up with that. In my book this one guy works at the drive-through window in a fast-food restaurant and the manager helps him realize that the best way he can measure the impact of his success is to find how many times he can make somebody smile or laugh that comes through his line. So he writes down or records for himself how often he can do that.

We have to give people that sense that they have some measure of control.

What do you think? I posted a few months ago about research related to better performance from happy employees. This makes a lot of sense to me.

--Tim