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!

I recently finished teaching another course in leadership and management from FranklinCovey.  As always, teaching the fifth of Dr. Covey's famed seven habits was very interesting.  Habit five simply states, "Seek first to understand, then to be understood."

When I teach this section, I sometimes ask, "how many of you have ever taken some sort of a class on speaking?"  Typically, many people raise their hands, they've taken a speech class, debate class, etc. or had some sort of training in giving a presentation or speaking.  Then, I ask how many have ever taken a class in listening.  Very few people raise there hand. 

As it turns out, it seems to be human nature to spend a great deal or our energy trying to get others to understand us - often at the expense of listening to really understand another.  Dr. Covey often said, "One of the deepest needs of the human soul is to be understood."  Little wonder then, that we generally aren't as good at listening to understand as we are at listening to respond.  Nor is it any wonder that we typically do habit five in the wrong order - insisting on working from our point of view first, and perhaps secondarily seeking the other's perspective.

So, I found this article from the Harvard Business Review, What To Do When You've Made Someone Angry, to be very instructive.  This brief, easy-reading article provides some simple examples to which all can relate.  So, to you I extend a challenge - read the article, then apply it. In other words, give it a try.  (Just for clarification - I mean try it if you ever have occasion to find that you've upset someone else... don't go out and tick someone off, just to try this.) When you do so, you will be experiencing the essence of habit five because you'll be - first and foremost - acknowledging things from the other person's perspective. 

I have found this practical application in empathizing exceptionally effective.  Share your experiences - I'd love to hear about them.

Managing means directing. Leading frees up those you oversee to perform to their highest ability (and frees you up to stop “managing” them). In the long run, leading employees is less stressful and more effective than “managing” them.

The Leading EDGE refers so a model for great leadership. EDGE is an acronym for each of the four basic components of the model. The beauty of this model lies in the fact that it is so simple and easy to incorporate with a bit of forethought. Here it is:

E – Explain
D – Demonstrate
G – Guide
E – Empower

After explaining what needs to be done, demonstrate how it is to be done. Then, let them do it as you guide. This process teaches and instills confidence. Then, provide resources and authority to the individual to go forward applying what they have learned, this is empowerment. Explain, Demonstrate, Guide, Empower. Simple. Effective. Try it today.  (Or, if you’ve got a boss who needs this advice, forward this to them!)

This fall, Snow College's VP for Academic Affairs asked me to serve as a member of the college's Mission Fulfillment Team.  This group is charged with helping the college see how well they are doing toward achieving their mission and advising on ideas for improvement.

It caused me to reflect on the simple, yet crucial, concepts taught in the book, The 4 Disciplines of Execution.  These four items apply to an organization and are a bit less granular than the keys to individual performance as mentioned in my blog posting of a few months ago titled, Let Them Manage Themselves. It may seem overly simple, but for an organization, there are really just four basic “to do’s” for good execution in a business or team. 

1. Everyone in the organization must know the goal. 
   
2. They must know what to do to achieve the goal. 
   
3. You’ve got to keep score.  In other words, constantly make sure everyone knows how they and the organization are doing.  This information should be timely. 
   
4. All must be held accountable, consistently.

Here are a few additional tips for making each of these four keys work well:

One key to the first item is involving everyone in the goal-setting process.  Engagement creates buy-in.

A key to the second item is simplicity.  Keep it simple.  Also, strategically, you should realized that “what to do to achieve the goal” may change depending upon trends and changes that affect your organization and its situation.  So, be sure you have a means of watching for leading indicators that may help you spot changes on the horizon so you can adjust as needed.

The key to the third item is relevancy, followed by timeliness and accuracy.

The key to accountability is ensuring everyone is very clear on expectations – which should have been established together.  Then, be consistent in holding everyone involved accountable equitably.

If you have insights that would provide additional help in applying these four basic principles please share them by commenting below.  I would love to hear them, and I'm sure other blog readers would too.  Here's to great execution!

I consult and train on business plan development.  Like most others who do this, I encourage those I assist to make their business plan a living document.  Revisit it often.  Review and update regularly.  That makes a lot of sense in today's world, but the reality is, most of the time these end up in a drawer collecting dust.  They are useful because they help a person think through their business venture.  Having to articulate something in writing is very good for that.  Additionally, the process of writing a plan creates buy-in when the whole team is involved, not to mention the fact that it helps ensure that partners are on the same page.  And, the most common use for a plan I've seen is to secure funding from a lender or investor. So, the plan is written and accomplishes much of the aforementioned things. 

But, do they revisit it frequently?  Is it fluid?  Does it get updated?  No. 

Rarely, if ever do most small business owners actually update their plan. The version they took to the bank is the last version ever drafted (until they need another loan). 

Do they operate according to the plan?  Maybe.  But, for the most part, the plan is placed in a drawer and collects dust.

I've found that one of the valuable uses for the Business Model Canvas is helping a business keep their plan fluid.  Helping them think through changes and make changes to the plan is best done when they have a visual tool that makes it simple and easy to think through adaptations, changes and improvements.  The business model canvas keeps the business planning process alive, even after the business plan document is stuck in a drawer to collect dust.

What helps you maintain perspective of your company's direction and keep the plan current?

Yes, you know where this is going... How do you eat an elephant?  You eat it one bite at a time.  Cliche.  This valuable principle has been taught this way over and over by parents in homes, teachers in classrooms, trainers in corporations and executives in boardrooms around the world.

Today, I heard it put a different way.  Perhaps not quite as simple but definitely more insightful.  I spent the day with Chuck Coonradt and several business professionals from the Utah Small Business Development Center network.  Chuck is an author and founder of The Game of Work.  He is also an Angel Investor in the Park City, Utah area, which is where we met today. 

Here is Chuck's straightforward way of stating the elephant eating principle: "When you decrease the size of the problem, you increase the emotional willingness to solve it." 

This is perhaps not as rich in imagery, but it is definitely more instructive.  It hints at why we really need to think about eating elephants one bite at a time.  Emotional willingness to solve a problem is what every great leader seeks in those they lead.  

Where have you seen this work?

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).

Today, I had lunch with Jeri Mae Rowley, a highly respected speaker, trainer and... well, and "saddle-maker's daughter."  She tells the story of how she remembers hearing her grandfather, Ray Holes (yes, that Ray Holes!) say to her as he tapped away on the leather of a custom saddle while customers were in his shop, "Aren't we lucky!  Those people work hard for so little and they choose to do business with us." 

Not only is Ray Holes a nationally known saddle-making legend, he was also humble, appreciative and wise - wise in how he shared his vision!  Ray shared his vision with each member of the family who worked in his shop - including Jeri Mae Rowley. He shared it in simple conversation and by genuine example.  Living your vision is the best way to deeply communicate it to others.  Ray believed in treating others respectfully - whether they were customers, employees or even competitors - and he believed in appreciating them too.  Those two key components, coupled with best-of-the-best quality went a loooooong way to building a business and covering whatever shortcomings he or his business may have held.

Do your employees know your vision by what you say and do daily?

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.