Great discussion and chance to share ideas. Thanks to Yale and the Department of Ethics, Politics, and Economics. Very impressive students.
Great Discussion at Yale!
Keep The Bucket Full
A few months ago, I did some advisory work with a team of entrepreneurs running a fast-growing internet sales business. They were adding new customers at a rate of 10% a month and loving every minute of their success.
Unfortunately, they were burning cash. They were also losing existing customers without even noticing. The good was covering up the bad. In their drive to capture new business, the organization was failing to keep existing customers happy. Out-of-stocks, late shipments, and a lack of a customer retention effort were sucking the life out of their amazing sales progress.
These guys were the embodiment of the business metaphor of a leaky bucket. Imagine that each new customer is represented by a drop of water added from the top. The problem is that there are holes in the bucket that slowly let drops of water (customers) escape. While every new drop is exciting, the most important goal should be to keep the bucket full. That’s how to grow.
It is much easier to sell more to your existing customers — who know and trust you — than it is to develop new relationships. Think of the lengths you must go to in order to get a meeting with a new client, compared to the ease with which you can call up a longtime partner and chat. Don’t mess things up with missed shipments, product defects, or customer service flaws. Pay attention to your existing customers and work to keep them happy and in your bucket. It is way more fun to have fewer holes than it is to try to plug them.
The most important customers are the ones you already have.
Pass It On
When I was the CEO of Urnex, I struggled to find a way to keep my team of direct reports updated on key issues. Even more difficult was finding a way for them to efficiently share news with each other. We had daily, weekly, and monthly staff meetings, but it always felt like there was valuable news shared at the watercooler or over an impromptu cup of coffee that could take days or weeks to get to everyone on the team. It is often one person’s little idea or observation that sparks a big idea in someone else. The faster and more efficiently those ideas can be spread, the more likely we are to discover great opportunities.
Eventually, we found a process that worked wonders. Each member of the top team would send out a Friday update email sharing their thoughts with everyone. Beyond helping us pass along information efficiently, the approach helped us reflect on the week and find closure to better enjoy the weekend.
Here is a summary template of 5 key points I suggest you and every member of your team share with each other on Friday. Give it a try:
- Accomplishment: What was my greatest accomplishment this week?
- Disappointment: What disappointments did I suffer this week?
- Future: What is my primary objective for next week?
- Recognition: Did someone on your team or outside the organization do something you appreciated?
- Other: This is a place to share something else on your mind. Is there something you worry about or something you are excited about?
Here is an example of a typical email I sent weekly. Take notice that this is easily read in a short period of time:
Hi Gang! Boy am I exhausted. I felt pushed and pulled in a million directions this week. I’m thrilled it’s Friday but I’m also super excited about what we’re accomplishing and how we are moving forward. Here’s a quick recap. Looking forward to hearing from each of you:
- Accomplishment: Finally – We got the order from Acme Co. Dan and I have been talking to those guys for nearly 3 years. Let’s make them wish they’d come to us years ago and never let them leave.
- Disappointment: I really thought we would have heard back from the city with permission to move forward with our plans for the factory expansion by now. It doesn’t mean we won’t get the OK but it’s definitely another week lost. We might have to start thinking about off-site warehousing if the delay goes on much longer. Keep in mind for planning.
- Future: Next week is a big one. Monday and Thursday we will have visitors coming from Taiwan and Chicago. Let’s be sure the place looks perfect and we’re prepared to wow them. On Tuesday the accountants will be here so Sarah and I may be tied up in long meetings. Don’t be afraid to interrupt.
- Recognition: Wow – Amazing job with the new website that launched this week. Kudos to Lina, Jeff, and Anna. I have had many complimentary emails from customers and friends. Great job! I will be sending a similar email of praise and thanks to the entire organization.
- Other: The order flow is really building. Keep in mind to make sure we don’t get overwhelmed toward the end of the month. Stay ahead of it in customer service and production. If you need to ask people to work extra hours, do it! Let’s keep things on track and be ahead of problems.
Have a great weekend.
Know Your Audience
While Columbus settled the round vs. flat argument many years ago, the world is still filled with people who see things from different perspectives. When I started in the coffee machine cleaning products business, I knew nothing about the industry or even how to brew coffee. I assumed that my only chance of pleasing customers would be to offer a product of comparable quality to that of the competition at a better price. I began with an expectation that my customers just wanted “coffee soap.” Thank goodness I was wrong.
My first step was to make a great product and try to sell it at a lower price. That failed miserably. No one wanted to switch to our products despite the value we offered. In response, I set out to figure out what made my customers tick. I hung out in coffee shops, traveled the Pacific Northwest, visited roasteries, and learned to make my own espresso each morning.
Quickly, I realized that price didn’t matter. It was about trust and confidence and comfort. My audience was passionate about keeping coffee equipment clean and they wanted to buy from others who understood that. They would do anything for safe and effective products from a company that thought like them. In fact, they didn’t want low cost options. They wanted the best and they wanted it from someone connected to them. It wasn’t until I separated myself from the barista, the roaster, and the specialty shop owner and learned to appreciate them that business started to click.
Business success often depends on our ability to separate our personal wants and expectations from those of our target audience. Remember, it takes work to understand our audience so that we can sell the products they desire, seal the deal they expect, or make the hire of the employee we need on our team.
Anytime you find yourself liking your own advertisement, assuming an employee will love a new work assignment, or expecting your competitor to follow a path you see as the obvious choice: STOP! Take a breath and remember to remove yourself from the equation. Think about your audience, their situation, and their interests. It’s never just about what you like or desire.
Never forget: You are not your target audience.
Bronze Door LLC
Josh Dick is that rare entrepreneur with the complete package: he had the courage and strategic vision to shut down five out of six product lines to focus on the one with potential; he had the sensibility to build a premium brand by telling a story that resonated; he had the operational acumen to build a lean manufacturing engine; and the leadership to grow an effective organization.
Josh is an inspiring entrepreneur, whose experience is a model for business leaders in small and big businesses alike. He’s inspired me to never rely too heavily on past rules and to always question and test assumptions. Yesterday’s truth could be exactly what’s holding your business back today. Try and test continuously. Small but clear wins snowball into big success.
Josh's advice has regularly helped me manage the challenges faced by our fast-paced global business. His ideas and insights have inspired our team to think strategically and focus on what's most important. I especially value his logical thinking, straightforwardness, experience and ability to advise on almost every subject.
"Grow Like a Lobster" presents a very human and self-aware approach to growing a business. The organizational processes presented are succinct and real-world ready. What resonated for me was Josh's assertion that key to success is building a business that you love - your own "dream job." In a world focused on cash outs, this is so refreshing.
The Lobster as a Business Metaphor
A Message from the Author
During my time as CEO of Urnex, I relied on metaphors to communicate priorities and unify our team. While some were from movies and others from the coffee industry we served, my favorite was that of the lobster. Remembering that the molts always come was our team’s way to keep focused and prepare for the inevitable. Through discipline and high expectations, we built an organization of extraordinary value. In the process, we created a workplace experience unlike any other.
With each molt, a lobster grows 15% — the rate of growth we targeted and achieved for 15 consecutive years.
The book is divided into three sections:
- Larval – Building Our Base: We are young and nimble, enthusiastic and filled with energy. It’s time to invest, define our identity, create our mission and values, understand our customer, and set the foundation for the future we envision.
- Mature Adult – Fishable But Stable: We're now a real business with an impact on the world around us and within the markets we serve. It is time for big risk taking, confidence, tough decisions about our team, and determination to push forward.
- Market Leader – Can’t Catch Me: We’re now a leader in our industry and thinking about growth at a scale that is multiples upon multiples larger than where we began. We're adding discipline to our organization, managing crises, and thinking about exit.
Grow Like a Lobster cuts through the academic doctrines and delivers actionable concepts that readers can immediately implement to focus on achieving extraordinary results.
Grow Like a Lobster
Grow Like a Lobster: How to Plan and Prepare for Extraordinary Business Results provides an entertaining and approachable game plan for how to prioritize, focus, and get things done to grow the strongest possible business.
The book cuts through the academic doctrines and delivers a toolbox of actionable concepts that the reader can put into immediate action:
- Focus on one thing to avoid distraction.
- Understand your audience.
- Invest for the future you aspire to achieve.
Wish Someone Had Shared This With Me
Here’s a little something I shared recently with a bold new entrepreneur. A few days earlier he had cleaned out his desk at a well-established corporate employer and decided to build a business on his own.
Good luck and congratulations! I'm taking the liberty of offering some advice I wish someone had shared with me when I was getting started:
- One Thing: Figure out the one thing you want to be really good at. Once you're sure it's a good opportunity, don't look back. Don't ever let yourself get distracted or tempted to expand past that one thing until you've absolutely nailed it.
- Define: Articulate that one thing in a way that you can share it with your organization, customers, and industry. Write a mission and values statement that is really unique to you and your one thing. It will help you make tough decisions over and over.
- Know Your Audience: Work really hard to understand and think like your audience (customer, competitor, vendor, employee, and even yourself). Do not ever think you are your audience. Separate yourself from those you are trying to convince, sell to, hire, or compete with.
- Communicate: Find a plan for how to pass information along within your organization quickly and efficiently. If you cannot make sure the information is shared with everyone who needs it, you are going to waste a lot of time and money.
- Ask: Ask a lot of questions. Talk to everyone you can. Every conversation brings another new idea or confirmation that an old one wasn't crazy.
Have fun. You're about to start the best job of your life.