I was working with a company this week who are well-versed in the practices of evidence-based management. It was really impressive how they set up metrics to drive efficiency — sales, logisitics, procurement — all managed via the data.

What soon became apparent, however, is the difference between what I’ll call the process mindset and the growth mindset. When one is in the process mindset, one is focused on designing the most efficient ways to complete tasks. What comes next is tweaking the processes to drive out waste. Over time, the company gets better at conducting its day-to-day business. This mindset is focused mainly on managing the business you already have. In my experience, quantitative stars are most often found here.

In contrast, the growth mindset is focused squarely on marketing and sales. The attitude is “get the sales, we’ll figure out how to fill them later”. This is no way to run a big company because your sloppy processes will kill you. But for a start-up there’s no other way. As Guy Kawasaki points out: sales fixes everything. You’re worried about your strategic position in the market? Go get sales. You’re worried that your product mix isn’t quite right? Go get sales. Fly undone? Go get sales. As an entrepreneur, that’s your job. Grow the company.

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This article from Sean Wise at the Globe takes a different approach. He identifies Business Acumen, Operational Experience and Domain Knowledge as the “talent triangle” necessary for business success. If you’re an entrepreneur — read this article. It will help you identify what pieces of the HR puzzle are missing. And hey, if you can’t afford to hire someone to fill in the gaps, find a mentor.

Technorati Tags: startup, HR, growth, evidence-based management, process, Toronto

Metrics — in the application of statistics and mathematical analysis to a specified field of study, sense of the word — are crucial to success. I don’t think you can get very far unless you’re measuring your progress.

Take this example: I’ve tried to get in shape for years. Running and biking didn’t seem to work because I never had any sense of what was coming from all that effort. That all changed when I: (1) established a goal that I was committed to and (2) started measuring my progress. Things have been going well ever since.

But metrics provide something more. I think this quote from this article on Barry Bonds sums it up nicely:

“The reason we keep statistics — and the reason we care about statistical milestones — is that we assume some sort of emotional experience will accompany their creation and obliteration.”

Not only do metrics give you a goal to shoot for — they give you something to celebrate when you achieve and force you to step back when you don’t. When you’re running your own business it often feels like you’re in a bubble, separated from society. Metrics provide some context for your efforts. If you’re running a business right now without a clear idea of the measurable goals you’re committed to — stop and take this morning to create some.

Technorati Tags: entrepreneur, metrics, stats, emotion

So here it is: day one in my new condo working on my new business. The business plan is coming along splendidly thank you very much — although there is obviously much left to do. Everyone thinks that it must be great to work from home. Let me tell you it’s not. Getting up and going to an office really helps to increase focus and minimize distractions. That said, I’ve got a host of coping mechanisms in place to make sure I get as much done as possible when working from home:

• Start work on time, everyday — this may seem a bit strange because working for yourself is supposed to give you liberty from regular working hours. And it does. For me to be productive, however, I find that it’s best to commit to a regular start time every morning.
• Get dressed as if you were going to an office — seems silly but it really helps me.
• Monitor Internet “fun time” — and minimize it.
• Todo Lists — create lists and prioritize the tasks. Spend the majority of your time on what’s most important not what’s most fun.
• Daily schedule — I always do this the night before so I have an idea when I wake up as to what I need to accomplish with the day.
• Get out of your house — whether it be in the evening or for lunch, get out of your dwelling before it drives you bonkers.
• Due dates — set due dates for every task and hold yourself to them. If you’re having trouble, your business partner should be given full authorization to kick your butt when it needs kicking.

Technorati Tags: startup, telecommute, workfromhome

GM is in tough. They lost $8.6 billion last year, revenues are falling and market share is a downright pathetic 25.5%. Close to 40% of GM’s sales are low margin fleet sales. Fleet sales are to rental car companies or corporate clients. Not only do low margin fleet sales look bad on the Income Statement, used GM products flood the market when these corporate customers are done with them. This hurts resale value and GM’s loyal individual customer gets taken to the cleaners on her trade-in. What a mess.

I think there’s a lot to learn from what GM is going through right now. Although the business you create is unlikely ever to become the pillar of the economy known as GM, take heed of its missteps.

Legacy Costs

Legacy costs are all those costs associated with former employees &8212; particularly pensions and health care. Estimates are that GM has legacy costs of approximately $2000 per vehicle. GM’s cost disadvantage is being exploited by Asian manufacturers who don’t share similar legacy costs because they have a smaller number of former employees.

The lesson here is that you’ve got to fight to stay nimble. You should seek to compensate your employees fairly while maintaining a high degree of flexibility. Think long-term. You shouldn’t lock your company into any contract that has the potential of restricting your options should demand or supply conditions change. It’s tough to fault past executives at GM for all of these legacy costs. Their unions are strong and would have just striked them into submission. Regardless, remember that new entrants can attain a significant cost advantage if you’re locked into contractual obligations and market conditions change.

Customer Owns Your Brand

I’ve mentioned this in earlier posts, but one should never overlook the fact that your customer owns your brand. The Tragedy of General Motors mentions that General Motors products are now consistently reviewed as some of the most reliable in the industry. The trouble is &8212; no one cares. GM produced products of questionable quality for a number of years. Customers and mechanics took note. The word spread. This, in turn, hurt their brand. Winning back their customer’s trust is going to be tough. Your customer owns you and your brand. Don’t take them for granted.

Competition is Unfair

I think it’s natural for small business owners to make excuses for why larger, cash-rich companies are beating them up. Perhaps it’s tough to see how you’re ever going to make it against the big players in your industry. If you’re ever feeling sorry for yourself, recall that the big boys are at a disadvantage too. They can’t develop new initiatives as quickly as a small company can. They have legacy costs. Sometimes their success and corporate culture blinds them to new opportunities in the marketplace. As a small company, it’s your job to exploit this disadvantages.

Right now General Motors is being forced to compete with companies that can produce the exact same car for $2000 less. Well tough. Competition is unfair. You’ve got to use your brain to overcome the obstacles put in your way. Every company has got them.

Technorati Tags: GM, lessons, competition, goodgrief

Yesterday I was dining at a relatively new spot in Toronto called da nu la. The meal was quite good but not exceptional. As we were leaving the chef came out from the kitchen, shook my hand and introduced himself. He asked how my meal was and then held my jacket out so I could put it on. It cost him nothing but a minute of his time. I really noticed this. This was a good guy and I really want to help him out. I will tell all my friends about this place and, when I’m in the area, I’ll go back myself.

What little things do you do to improve the lives of people you work with? How do you connect with customers to show them you care? When’s the last time you told an employee that you genuinely appreciate her contribution? What about sending an important vendor a token of your appreciation? People want to feel appreciated. If you actively work on maintaining a good rapport with people, you will make people want to do business with you and improve morale. Little gestures can go a long way. So why not incorporate them into your management style?

Technorati Tags: marketing, customers, gestures, management