Archive for August, 2009

Strategy Dollars versus Bake Sale Bucks

August 23, 2009

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My first post-business-school job was at a shrinking company in a shrinking market space. My role was to provide the data analysis and support on major deals. Often those deals amounted to trying to reduce the bleeding by retaining large customers at reduced rates – deals our VP would call “strategic wins.” The other analyst and I joked that the day would come when we’d get paid in strategy dollars. We had a mock strategy dollar (with a picture of the VP) that we’d pass back and forth to whoever was working on the biggest, losingest, most strategic win.

In other roles I’ve seen even Fortune 500 companies hold bake sales. Think of a retail store that is short of the mark and starts selling off the fixtures. Yes, they hit the monthly goal, but would you invest in that store? Those are bake sale dollars. You can hold a bake sale to make up a cash shortfall on any given day, but it’s not a sustainable business model (unless you’re a bakery). Bake sales can take the form of a holiday discount that’s a few points deeper every year or of selling the intellectual property that the core business model is based on. Can you repeat what you did this month and scale it up? If you can’t, you have a bake sale where you need a business model.

Would you invest in a company that promised to pay you returns in strategy dollars? How comfortable would you be with an investment that generated this month’s return from a bake sale that couldn’t be repeated next month? If we wouldn’t invest under those conditions, how can we as managers possibly claim those as wins?

Photo by tiny banquet committee

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Five Brilliant Business Books for Kids

August 10, 2009

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Many of us are both parents and businesspeople. We’d like our children to grow up equipped for careers, entrepreneurship and success. So I thought I’d share my take on five brilliant business books for kids.

1) Mike Mulligan and His Steam Shovel, Virginia Lee Burton

Mike and his steam shovel Mary Anne face an industry in change. New entrants with disruptive technologies like gas, diesel and electricity have rendered their product noncompetitive. So they seek out greenfield markets and leave the big cities to find work in Popperville. Like any entrepreneur Mike takes a calculated risk – can Mary Anne really dig as much in a day as a hundred men can in a week? He makes a risky bet based on incomplete data, gut feel, and belief in his team. In addition to risk tolerance he and Mary Anne display pride in their work, finishing each corner “neat and square” where lesser competitors would sacrifice quality. And they close by morphing their business model and value proposition completely. Mike and Mary Anne establish a sustainable business with clear barriers to entry and leave the disruptive entrants grubbing in the dirt.

2) The Very Busy Spider, Eric Carle

If Mike and Mary Anne display dizzying creativity and flexibility, Eric Carle’s spider heroine is a disciple of David Allen. She focuses on Getting Things Done, showing GTD mastery by retaining control of her workflow despite continuous interruptions from the barnyard animals. She knows her agenda and, whatever tempting distraction is offered, doesn’t answer as she is “very busy spinning her web” to catch the pesky fly. She came, she spun, she conquered.

3) Green Eggs and Ham, Dr. Seuss

“Seuss on Business” could be a series of posts on its own. The Lorax warns about externalization of costs as the Onceler beggars his community while “biggering” his business.  Oh, The Places You’ll Go offers far more insight about that tricky period between ideation and big success than The Dip does (I’m a big fan of Seth but he’s no Dr. Seuss). And Horton (from Horton Hears a Who and Horton Hatches An Egg) is an example of character that my daughter and I often refer to in discussing how to handle adversity.

But Green Eggs and Ham is simply the best sales textbook ever written. Sam handles objection after objection by remaining relentlessly positive and recontextualizing his offering (In a box? With a fox?) until his prospect agrees to a trial. Having achieved that, he lets his prospect make up his own mind – and makes the sale. Throw out whatever sales curriculum you’re using and give each rep a copy of Green Eggs and Ham. They’ll think you’re crazy and sales will increase. I call that a win-win.

4) Madeline and the Bad Hat, Ludwig Bemelmans

The most difficult managerial task is dealing with a problem employee, and the hardest part is seeing the problem clearly. Even Miss Clavel is taken in by Pepito, making excuses (“he needs an outlet for his energy”) rather than confronting the issue. Madeline sees and articulates the problem (“It is evident that this little boy is a Bad Hat!”) when others do not. But she also recognizes that any real change in behavior comes from within. So she tells him what she sees in clear and uncertain terms, lets him make his own choices, and holds him accountable for the results. And she offers forgiveness when he does change but warns that she will be judge him on his actions, not his words.

5) The Day-Glo Brothers, Chris Barton

Like the others on the list this book is a timeless classic, even if it was published earlier this year. (Disclosure: Chris Barton is a friend and former co-worker. Further disclosure: this book belongs on the list anyway).

Bob Switzer’s work ethic and analytical mind perfectly complement brother Joe’s creative streak, reminding us that a winning management team is diverse in thought and approach. They find opportunity after Bob’s accident confines him to the house, and their big breakthrough is driven directly by their curiosity about flourescence. Ever tried to explain a skunkworks project or early-stage startup to your parents? Bob and Joe have the same problems (made worse by ruining their mother’s cookware from time to time with their experiments). There’s not a better book for making the point that true entrepreneurship is driven by curiosity and fun, not greed.

Those are my picks for the best business books for kids ever. What are yours?

Photo by Librarian by Day, appropriately enough!