Luck and providence aside, nothing has a more pivotal impact on a businesses success than good strategic decisions.  What are good decisions made of?  Nothing can more effectively optimize the strategic decision making ability of a small business owner than knowing the market and their company's position in it. 

But, the devil is in the details - knowing the market means knowing suppliers, vendors, every aspect of your product or of the end product of which yours is a part, and on and on.  Also obviously important is an intimate knowledge of competitors and of the multifaceted (and in many cases, continuously evolving) customer issues, such as who they are, where they're located, their purchase motivation, timing and process, their perceptions and priorities with regard to the product and its utility, and so forth. Sometimes I refer to all of this as "watching the horizon."  What's out there? What is your environment like? How is it changing?

Unfortunately, it isn't as simple as just looking through binoculars to see the horizon. Also unfortunate is that fact that many small business owners don't take the time to actually do this.  Instead they seem to see the landscape only as it passes under their feet as a hundred-mile-an-hour blur as their business careens in whatever unorchestrated direction they happen to be going with their head down working IN the business instead of working ON their business.

Contrast this with the story of YKK.  If you are wearing clothing right now - and if one of the articles you are dawning has a zipper, check it and see if it doesn't have these letters stamped on the zipper pull.  Go ahead - do it right now!  Odds are very good you'll find YKK on your zipper because YKK manufactures most of the zippers in the world - more than 7,000,000,000 - yes, billion with a B, (between 60-90% of all zippers depending on whose numbers you believe).

How is it possible that in an industry as old as fasteners, one company can have that kind of market share for zippers?  Simply because Tadao Yoshida, founder of YKK, watched the horizon and acted accordingly.  He knew exactly what would position a zipper manufacturer in first place and what it would take to maintain that market share.

Although I realize my summary here will be a drastic oversimplification, here's what it boils down to.  One bad zipper, ruins an entire garment!  Let's assume a zipper costs 35 cents for YKK to produce.  Now, shift gears to YKK's customer - a clothing manufacturer making a $90 dress - which they spend about $30 - $40 manufacturing.  There's little chance they'll go with the 5 cent cheaper zipper without regard to quality.  It makes no sense even if that article of clothing is only one fourth the cost and price of the dress in our example. 

For 90% of apparel manufacturers in the world, quality and dependability reign supreme when it comes to the zipper because the zipper renders the overall product 100% useless when it fails, yet costs only a fraction of a percent of the price of the overall materials going into the product.

Mr. Yoshida understood the market and his desired position in that market - then he acted daily to ensure his company maintained a posture that leveraged this knowledge in order to obtain and keep the desired position in the market.  Here's a list of other examples of how YKK has done this:

• Yoshida innovatively designed better and better zipper making machines (proprietary and well-protected from competitor knowledge).
• Over time he brought nearly every aspect of the process for making zippers in house: According to a Los Angeles Times article on the company, “YKK smelts its own brass, concocts its own polyester, spins and twists its own thread, weaves and color-dyes cloth for its zipper tapes, forges and molds its scooped zipper teeth, extrudes the monofilament for coil zippers, hammers and paints the sliders, ... [and a bunch of other stuff - concluding with] ... fabricates the cardboard boxes in which zippers are packaged.”
• Not only does YKK make their zipper making machines, they make the machines that make the components referenced above. 

This type of vertical integration helps ensure complete control of their highest market-position-critical priority - consistent high quality (as well as other important aspects like cost and speed). 

I'm currently working with a rapidly growing company who is feeling their way into an amazingly similar situation to that of YKK.  As a strategic research team leader for the National Center for Economic Gardening, I'm pleased to see the strategic research team helping this company with valuable information to really understand the market and their place in it.  But, even for companies for whom their product situation or business models are vastly different from YKK's, the lesson is the same:

1. Know your market (ALWAYS - that means keeping your eye on the horizon).
   
2. Determine the position you seek in that market.
3. Identify the top key factors that would uniquely qualify your company to obtain and maintain that position.
4. Then, act on it - relentlessly.
   

So, how do you (or will you) keep eye on the horizon?  Please share your thoughts!

If you are a one-person shop and your business feels like it's out of control, you are not alone.  Here are a few "watch out" items for you, depending on what type of person you are.  They are based on the idea that certain temperaments in people lead those people, be adept at and thus focus on certain activities - sometimes at the exclusion of other types of activities.

• If you love accounting - WATCH OUT for marketing.  Outsource it or make a conscientious effort to focus on and improve your efforts at marketing.
• If you are good at marketing - WATCH OUT that your books aren't a mess. 
• If you tend to take action quickly - WATCH OUT for big-picture thinking.  In other words, make time to understand the overall strategy and possible long-term implications of your current business activities.
• If you are good at strategy - WATCH OUT for the details.  Come up with a good way to make yourself follow-though on the day-to-day operations.

No, it isn't rocket science.  Bigger corporations handle this by hiring those with temperament and training well suited for each type of activity to handle each respective type of activity.  Micro-enterprises may deal with this by outsourcing.  But, if you are wearing all the hats (yet only have one type of temperament) then these WATCH OUT''s may help.

There is an additional WATCH OUT, regarding this concept of one's temperament.  Chris Gibbons, commonly known as the father of Economic Gardening concept, sums it up this way, "If you hire people like yourself, your company strengths will get stronger, and your company weaknesses will get weaker."

This week I had the pleasure of lunch with Susan P. Rice, founder of Cavanagh Services Group, Inc.  Cavanagh specializes in integrated project management and transportation services for hazardous and industrial waste. She started the company in 2002 after securing an SBA loan to purchase 30 waste containers and within one month had landed a $600,000 contract.  Since then the firm has grown rapidly and currently services areas throughout the country!  She was recognized by Utah Business Magazine’s “Fast 50, Utah’s Fastest Growing Companies”, and also received recognition in 2010 as one of the Ernst & Young Entrepreneurial Winning Women™.

Before lunch, in a brief presentation on entrepreneurship, Sue shared some great ideas regarding how the company has survived and thrived.  She spoke of peaks and valleys.  We've all heard about peaks and valleys, and we've all experienced them. 

On this topic her thoughts were brief but sound.  When in a valley, look at the obstacle and turn it into an opportunity - this is quite natural for her because in addition to owning her own company she is a very competitive athlete.  (How many ladies do you know who religiously read every issue of Sports Illustrated cover to cover?) 

And what of the peaks?  When at a peak, you've got to resist the temptation to coast.  Sure, enjoy it!  But, at the same time look for valleys.  Search them out.  Where are the areas you can improve?  This helps ensure that you will better survive the next valley and may even help you avoid valleys you would otherwise have been forced to pass through.

Words of wisdom.

What specifically have you done in your company that has worked well for you with regard to peaks and valleys?  I'd love to read your comments.

In the book, The Gift of Fear, Survival Signals that Protect Us From Violence, by Gavin de Becker, is found an interesting excerpt.  It refers to the way circus elephants are trained:

The author goes on to discuss how this dynamic affects people who, when young, are repeatedly told certain things and believe them throughout their lives.  It caused me to wonder how many great leaders and creative entrepreneurs in embryo do not develop to their potential because they were trained by chains that sounded like this:

I am certain I've had business clients whose eyes have been somewhat opened to the fact that the chains were only illusions and that they indeed could and would succeed.  And what opened their eyes?  Perhaps a bit of encouragement and sound business plan coaching helped, but ultimately it was their effort - their actions.  When they act upon their ideas, they catch a glimpse of their capacity and more importantly their potential.

I believe this little story of how elephants are trained is powerful for parents and teachers of young people.  We can learn a great deal about the importance of the message sent by our attitude and language towards a child's achievements (or lack thereof), their creativity, their entrepreneurial spirit, etc.  How many of the potentially great leaders and entrepreneurs of the future are held down by the illusion of great chains that in reality don't exist?

Share a comment below and tell me where you've seen these so-called chains at play (or seen them broken).

The news may seem to be filled with stories of business people with no morals.  This, however, is a different kind of story (and I suggest that the world is just as full of this kind of story as the other, they just don't get the same kind of press partly because people seem to seek justice more than they wish to recognize honor).  This is the story of my brush with Mr. Harold "Hal" R. Wing.

Just over nine months ago, I had the privilege of meeting Hal Wing.  We had arranged for his presentation to a group of about 90 people eager to learn about entrepreneurship.  Mr. Wing did not disappoint.  He arrived early - probably because there's a lot of open road here and, yes, he was in one of his famously fast sports car (a Porsche to be exact)!  He set up for the "show."  I had only asked him to come talk about entrepreneurship, bit it was indeed a show.  Both inspirational and impressive. 

Mid-way through his presentation he climbed to the top of a Little Giant ladder and demonstrated how he had yodeled his way to success (he really did yodel from a ladder in the early days in retail demo areas to garner the attention of the crowd - but that's a story for another time).  Latter, he declined to have lunch because he didn't eat lunch - hadn't done so for years.  Said that in the early days he became accustomed to living in his car, working hard, pinching pennies and simply ate one meal per day and spent the rest of the day selling his ladders.  That one-meal-a-day thing stuck (and that one meal is apparently not lunch).

I found myself wondering, exactly what kind of guy is this?  Doesn't eat lunch.  And, here he is, in his seventies and yodeling atop a ladder in an entrepreneurship presentation.  As I thought about it, I realized this is a man of great integrity.  He adheres to what he believes.  He teaches by being, not just by saying (thus he was atop a ladder).  He didn't say, be energetic, he was energetic.

To me, integrity is truly making one's actions consistent with one's beliefs.  It takes real discipline.  It is a virtue.

I believe integrity had been his way from the very beginning and point to this evidence as published in CNN Money.  After starting and growing a company that was grossing well over $1 million per year, Mr. Wing, experienced a reversal of fortune.  The article states:

Of course, the company Mr. Wing started (and then restarted) has grown to be worth much more than that today.

So, I pay tribute to Mr. Wing.  He passed away earlier this month, August 6, 2012.  May he rest in peace.

Today my wife is bottling salsa.  This year our little garden has done well.  There's nothing like a BLT sandwich with fresh tomatoes and lettuce (no, I don't raise pigs - I go to the store for that).  Although our tomatoes have done well, she needed a few more than were ripe in our garden.  So, I stopped by the local fresh produce stand, Harward Farms. 

They operate a well-run business that has developed and maintained a great reputation throughout the local region they serve.  As she was carefully moving my purchase from the display basket to a box I asked Traci, their cheerful produce stand operator, if the people who started the venture were still around. 

I was delighted to here that Jake and Lenny began operating the produce stand business when they were just youngsters after their father gave them charge of a small piece of farmland.  Two generations earlier their grandfather had started Harward farms, but now their once-little produce division has expanded to nearly thirty roadside stands throughout Utah.

Lesson: Start young.  I love this lesson.  I started a business when I was 15 years old and was dabbling in entrepreneurial ventures even before then.  I work a lot with businesses in remote, rural communities and have learned that long-term, stable growth typically comes from within - meaning local startups.  The key: teach kids (beginning in elementary school) to value innovation and entrepreneurship.  Of course, it also doesn't hurt if they know how to work.

Lesson two: Business models are adaptable.  With the right business model, even as other family farm operations are threatened by the move to large-scale, commodity-style production, the small agriculture business can thrive.

Congratulations Haward Farms!