Why You Should Want to Work With Smart People

I read, post and respond to a lot of questions on Quora.  It’s a great place to interact with others and learn.  And who doesn’t want to learn?  With the idea of learning in mind, I wanted to share one of my answers which addressed working with smart people.   The question asked was “What is the most annoying thing about smart people?”  While I realize smart people may be portrayed as annoying but you really should consider the alternative of being surrounded by, or even worse, working in organizations led by the less intelligent.

One of my all time favorite articles that addresses this question is from 2005 Harvard Business Review, entitled “Competent Jerks, Lovable fools and the formation of social networks.” It basically says that people consistently and overwhelmingly prefer to work with a “lovable fool” than with a competent jerk.  Now, by competent jerk, we are talking about smart people that are socially awkward.  You might even think they are a little arrogant.  Whatever the reason, you’ve found a way to dislike them.  But is this a good approach for you?  Is it best for the company?  Before we dive into the discussion, here’s what I’ve learned from smart people and why I would prefer to work with them as opposed to a “lovable fool.”

My first experience with smart people was in graduate school.  My advisor and I were about the same age.  He did all of his work at Purdue University.  He was one of those “never made a ‘B’ kind of people. He was different but he was smart.  He had ten students that he advised.  Intellectually, I probably ranked number 10 on the list.  I knew it and didn’t have an issue with it.  I knew there are two kinds of people in engineering graduate school: smart people and those who work their butts off. Well, you know where I fit in.  But, I had to graduate and I knew that smart people would help me get through it all.  They did.  I opened my mind to learning.  Sometimes I felt dumb because I just didn’t get it.  There was one engineering technique, called the standstill frequency response, which took me a year to understand.  No matter how hard they described it, I just was picking up what they were putting down.  Then, I’m working the lab and BAM, it just hit me.  I thought, wow, why was that so hard.  They helped me graduate.  I was much better off hanging around them as opposed to people who didn’t understand everything we were doing.  The benefits of being around smart people were real.  But this is college, right?  Try befriending a lot of dumb people and completing your degree successfully.  It just might be a little harder.

Years later, I worked in a company of 700 people, where over 400 of them held PhDs.  It was a Research and Development Consortium.  I jumped into it mostly to see if I could survive.  I knew how to learn and ask for help when I needed it.  The good thing was my coworkers were smart. I mean like “Masters from MIT and PhD from Berkeley” smart.  This type of atmosphere can be a little intimidating.  After all, your own intelligence is vetted very quickly.  But that shouldn’t be a problem.  I wasn’t as smart as they were and that was ok.  It became evident that I had to find the value I had to offer.  For the most part, it was I that benefited the most from what they had to offer.  Here’s what I learned about smart people.

  • They never knew enough.They constantly studied, experimented and learned about their area of expertise.  It turns out that this is the behavior that makes you an expert.
  • They debated when they had an argument.Managers don’t do this because feelings get hurt. But technical people argue around the facts. Ensuring the team is right is far more important than ensuring someone’s ego isn’t bruised. Do you really want to risk failure to save someone’s feelings (who shouldn’t have inserted them to start with)?
  • They didn’t contribute for the sake of it.If they didn’t know anything about the discussion, they stayed out of it. Diversity of thought is nice but it must be helpful to be worth consideration.
  • Unfamiliarity didn’t scare them.If they entered into a situation they had no experience with, they studied and learned what others have done in similar situations to get some idea what any particular action would result in.
  • They are always eager to help.I’ve never worked for so many people who truly saw the value others had to offer and often displayed that understanding by sharing their time to develop others.
  • Team success was more important than personal success.You’ve probably never seen this in business before but these professionals are heavily focused on achieving goals and creating success. They don’t focus on power and money.
  • Success was about effort.They didn’t hesitate to dedicate time and effort, which was usually defined by the difficulty of the task, not by the number of hours in the day.

To get a better perspective on smart people, I thought it necessary to assess working with the intellectually challenged.  This could be your “lovable fool.”  In this discussion, I would like to consider the impact these members could have on your organization, especially if they occupy influential positions.  If you’ve had any experience here, leave a comment and share your story. I’m sure you’ll find many who will appreciate it.

  • They make “gut” decisions. They avoid any objective or analytical approach to decision-making.  This could occur for many reasons, such as don’t know how to do the analysis, don’t understand the value of the analysis or don’t realize that they probably aren’t the first people to ever engage in any specific situation so there should be some learning that could occur from other companies’ experiences.  It’s the exercise of unfounded theory.
  • They have no creativity. They avoid thinking out of the box or engaging in creative methods.  This type of thinking creates risk and reduces their sense of security.  If they do something different and it all goes wrong, then they’ll have to take the blame for it (even though it was their decision).
  • They don’t use metrics. Metrics….smetrics! Who wants to know how well they are doing?  Using metrics is likely to get them called out for poor performance.  If they don’t establish any quantitative measures, no one can know how epic their fail really was.  What a philosophy! I never fail because I don’t measure what I’m doing.
  • They use feelings. Their decisions are driven heavily by the desire to avoid negative feelings. It’s about how they want to feel or what they don’t want to feel. For example, a person who feels anxious about the potential outcome of a risky choice may choose a safer option rather than a potentially more lucrative option.  Now, can anyone tell quantify the correlation between feelings and success?
  • They avoid accountability. They lack the motivation to monitor to their own decision-making.  Even when motivated, obtaining accurate awareness of their decision-making is next to impossible.  We still want to love the fool, and when they are in charge, we want them to love us.
  • They focus on self-preservation. To some extent we all do this.  But few of us have the ability to change the organization to ensure our own job stability.  Sometimes this pressure to self-preserve leads to good decisions for the individual but bad decisions for the organization, such as chasing short term profits to ensure they get their bonus.

Ask me if I miss working with smart people? Damn right I do. I’d much rather work with smart people.   Sure, sometimes you are humbled by how little you really know but I now view that as an opportunity to grow and learn.  If you don’t care to learn anymore, then you should never be offended by smart people.  After all, who doesn’t want to work with people who love to solve the hard problems?  As an entrepreneur running my own company, I want smart people working for me.  Mistakes cost my company money and threaten my future.  The fewer of those I have, they more financially stable the company will be.  In the end, you have to ask yourself this question “will smart people help the company grow?”  In my experience, they do.  If you don’t have a lot of experience working with smart people, you may ask yourself another question “will the intellectually challenged people negatively help the company grow?”  You don’t have to really answer this question from your own experience, as there are many examples of organizational failures to provide the evidence.  Some statistics show that 95 percent of companies fail before 10 years of operation.  These failures happen very often.  They can drive companies into the ground with poor decision-making, which I’ve witnessed way too often. They can also wreck a company by chasing their own financial gain.   All of these turn out to be detrimental to any successful career you try to build because you fall victim to things you can influence, impact or control.

One last thing to consider, if you’re working hard to earn numerous graduate degrees that create the perception that you’re brilliant, you might want to consider in your career planning the idea that the world may not see your brilliance in a flattering light.  As you know, the brilliant people don’t always rise to the top and lead organizations….unless they create their own company (which is a discussion for later).

The MBA: It’s Your Ticket to the Middle

You’ve put a lot of time and effort into your job.  Yet, year after year, your performance reviews provide little insight into what you need to do to gain some upward mobility.  No raises. No promotions.  Eventually, you begin to realize that with little movement after 5 years or more, it’s unlikely that any real movement will be coming in the near future.  You’ve got to change your outlook and the MBA seems like the perfect credential to boost your career.  If you want to get into management, it seems like the ideal tool.  But can it really get you to the top?

When I was working on my MBA, I was just as optimistic as every other student.  I thought the MBA would propel me into management quickly.  I earned my MBA while working full time.  The managers around me didn’t have a lot of credentials themselves, so I felt that my MBA would have a huge impact on my growth in the company.  The only MBA in the company was a Harvard graduate and he was the CFO.  When he came in the company, he came in at the top.  He had considerable management experience at the top level and a MBA from Harvard.  This was my introduction to the two things that get you into top management.

Many believe that the possession of the MBA will push you to the top of any organization.  I wish it were true.  The challenge for MBAs entering the workforce is that there are too many MBAs for too few positions.  According to Statistics Canada data, 10.4 percent of all jobs were management jobs in 1995, but that has reduced to 7.8 percent today.  The recession has brought about change that will greatly impact your ability to climb higher in your career.  About 1 in 10 management jobs that existed in 2008 are gone.  Wal-Mart Canada cut costs by targeting more than 200 head-office jobs. After Tim Hortons merged with Burger King, the coffee chain cut 40 per cent of its middle managers. When Rogers Communications restructured its business under CEO Guy Laurence, it let go of several hundred middle managers and up to 15 per cent of its executives.  While the rate of MBA enrollment has not increased in recent years, it still remains high.  About 52 percent of students around the globe are exclusively interested in the MBA, indicating that the supply of MBAs is unlikely to decrease anytime soon.

If the reduction of management jobs and the large numbers of MBAs doesn’t deter you, then you’ll need to create value for employers to convince them that you’re ready for top management.  There are two things you must have to create that influence: a recognizable value and desired work experience.

The MBA is a faster ride to top management positions if you get it from a top program.  It’s not because they are considerably smarter than everyone else, it’s because they bring a perceived value that the company needs.  For example, if a company is preparing itself to be sold or seeking investment funds, bringing in top program alumni creates the perception that the company is well managed.  This makes investors feel more comfortable about the risk of investing in the company.  It’s little more than managing perception. It’s similar to reasons why professional athletes earn so much money playing a game.  They bring an inherent value to the organization, which for sports athletes lie in their ability to sell apparel with their name on it.  Do you think an MBA from an unknown university would create such perception?  If not, then it’s likely that the MBA won’t carry you to the upper echelons.  Even the ivy leaguers who start out with the Fortune 500 companies don’t start at the top.  Andrew Ainslie, dean of the Rochester University Simon School of Business, said “You’re reporting two to four levels below the CEO. That’s middle management, and that’s where most MBA students go and it doesn’t matter which university they came from.”

Another factor that will slow your rise to the top is work experience.  Companies looking for top level professionals will focus on the experience of the individual in the areas they need support in.  That could be mergers, acquisitions, startup, restructuring or dressing up the company for sale.  Company needs are often very specific and without such experience, you don’t have a chance.  Is experience more valuable than the MBA? I would say it certainly is.  Lynn Lee, managing director at Atlantic Research Technologies, a global executive search firm, says “Corporations typically call us in to help them identify people who are already in the upper management or middle management ranks. When recruiting these candidates, most companies, large and small, Singaporean and international, usually look first and foremost at the candidate’s employment experience, and at his or her achievements and management style. A person with a truly outstanding employment record can get a great senior management job without an MBA or other advanced degrees.”   How do you know what experience they want?  That’s a great topic for another post.  That’s coming soon!

After I earned my MBA and spent many years in middle management, I learned about another extremely important factor that can greatly decrease your chances in reaching the corner office.  It’s self-preservation.  Most managers at the top are focused on growing their own career, not limiting their employment by promoting someone else to take their job.  This mindset creates an environment that I call the “dark side of management” and I have an upcoming ebook that will dive into this topic in detail by providing real examples of situations that often happen that can limit your middle management career because someone at the top was trying to preserve their own career from poor organizational performance or create some organizational change that has great potential for personal financial gain.   I was really unsure about creating this ebook since the world wants to focus on all the happy stuff in life but it’s these unpleasant situations that damage and limit your ability to grow your career.  You will run into them at some point.

No matter where you earn your MBA, it’s all about value (i.e. perceived or real).  If you earned your MBA from a lower tier program, don’t expect it to have high perceived value that executives look for when they want to manage perception.  This will limit your upward mobility.  Therefore, you’ll be forced to develop specific experience that executives and boards are looking for if you want to draw their attention for any opportunities at the top.  Experience has value.  Otherwise, you’ll be stuck in middle management.  While that may sound exciting, especially when you consider where you are now, it comes with a big set of problems (which are covered in my upcoming ebook).  Then, when you consider the sheer quantity of competition for an ever shrinking pool of opportunities, you might just find middle management to be one of the toughest places in business.

The One Question Your Business Must Answer to Survive

….notes from my own entrepreneurial journey.  Walk with me!

It’s been a year in my business thus far.  It’s been a hard year and one that has taught me more than almost any other year in my life.  Some lessons I wish I hadn’t learned but every one of the lessons are valuable in some way.

My initial planning was great. I knew how to build a business plan.  I was an engineer and loved to dig into details.  I took several months to create it.  It had all of the right elements in it.  I had defined what the business was, how it would operate, what services would be offered, how it would be sold and marketed, what the operating costs would be and how much we would make in the first year.  I even included a competitor analysis, growth plan for expansion and customer profile analysis.  I had all the information I needed.

After I put the business plan down, I began to work on the business case.  Why? I knew that selling my service would be difficult.  First, my potential customers didn’t know they had a problem.  So, I needed to define that before I began to sell anything.  My first attempt at this was from the financial perspective.  To define the issue, I identified the amount of money my customer should be getting from their efforts.  I was hoping this would prompt my customer to look at how much they were getting and compare it to what they should be getting (my analysis).  This should have launched salvos in their brains but it only worked for a very few.  Some saw the huge delta and realized there could be something they could be learning.  For most….nothing happened.  I thought it might have been that they didn’t trust my assessment.  This made sense as I realize they didn’t know me.  So I changed the assessment to reference all of the official sources of data that I used.  It identified the authorities in their field.  The data and analysis were solid.  I used the data and mathematical methods from the experts in their field.  Easy sell, right?  Unfortunately, it did very little for the customer but it did solidify the case.

So maybe they needed to see the business case from a cost perspective.  The financial perspective essentially said that their processes were inefficient and that they could make more money if they did things differently or better yet, let me do it for them.  Perhaps they needed to understand what the cost was for their inefficient process.  I prepared a benefit cost analysis that illustrated their cost to perform the same functions that my company does.  Yes, you would expect that we were less expensive.  And, we are.  Our processes are automated, electronic and keep track of everything.  These are the benefits I shared with them, along with the fact that we are a fraction of the cost they are.

I took this new analysis and threw it in front of potential customers.  It was met with disbelief.  I soon realized they had never seen any analysis like this before and weren’t sure what they were looking at, although they realized that it didn’t paint an efficient picture of their process.  Eventually, discussions would go off track.  Once I started to see that customers were getting a little emotional about the topic, I realized that this discussion no longer hinged on the merits of the argument.  We had transitioned from the idea of what’s good for their company to what’s good for them.  It was clear that this was becoming a personal decision.  More importantly, my customer is apparently struggling with the “what’s in it for me” question.

I’ll have to admit that I should’ve seen this coming and that it should have been the first question I should have addressed.  No matter who you talk to, you must be able to convince them that your efforts are worthy of further discussion.  The challenge always comes with figuring out what interests they want to serve first: their own or the company’s.  Never assume any one is looking out for the greater good first.  Also, this is a never ending process.  As you move up the chain from contact to contact, you have to keep asking that same question.

Now, I’m embarking on a journey to figure how to assess what personal needs people are most interested in.  Do they want to look like a hero, avoid embarrassment, etc?  This will probably be the most difficult part of my journey as I’m sure to meet all kinds of people with various interests.  The challenge comes in developing a process to filter contacts into specific categories where I can have a process on how to deal with them.

Stay tuned!  This will be fun.

The Single Greatest Challenge With Today’s Career

No matter how well you prepare yourself for your career, there’s a rising force that is creating huge barriers for professionals today.  College degrees don’t matter.  It can’t prepare you for this.  Even a great network of professionals and coworkers and years of experience has limited impact in this landscape.  This force creates an environment like no other in the history of business.  For those in power, it provides the ultimate in flexibility in use of talent but for the talent, it affords some serious confusion in determining, much less traversing, any kind of career path.

Just a few decades ago, my father worked in a 100 year old company for over 34 years.  The company had a well defined structure, including a management hierarchy, job roles, payment structures, career paths and incentive plans.  I became a part of the company as I grew up.  Strangely, when I graduated college and starting working there, I couldn’t see the company I knew as a kid.  Changes had already begun and continued every year I worked there.  It was the beginning of what we call the “constant change” that we see today.

A softening structure.  When I began my first job, the organizational structure was rigid and well-defined.  Everyone had their place and knew what their responsibilities were every day.  I had a manager to help me when I ran into problems.  The organization chart was clear to each employee in many ways.  Now, let’s look at the difference within the last ten years.  I’ve helped many professionals who work in companies that have no organizational chart.  Companies engage in these practices because they say they want to remove barriers and allow their employees to approach anyone at anytime.  Having studied a few companies that have utilized this method, I can’t say that is highly successful, as many have failed.  While it seems like a good approach, employees quickly learn that there is still a hierarchy.  The management structure is well defined, just not put on an organization chart.  Decisions are still made by this structure and when things go wrong, it rolls downhill.  While some superficial facets change, many things don’t.  It’s not all bad though.  Employees do have the ability to interact with other business leaders, which can lead to new opportunities. Remember, there’s no structure so there is no real career path either.  You have to figure that out for yourself.

It’s hard to roll with my role.  Now, more than ever, high achievers are engaging with organizations that want to hire them but don’t want to provide a clear definition of their responsibilities.  Companies feel a strong need to remain flexible, which means they need to be able to use their talent any way they see necessary.  Role definitions tie their hands and contribute to an inability to change directions quickly.  Of course, it’s also possible that companies don’t know exactly what they need so they hire people who can function in ambiguity and aren’t afraid to charge headfirst into the unknown.  When I was a kid, I often worked as a farm hand.  This is a job that requires you to do whatever the landowner asks you to do.  They didn’t ask if you had certain skills or talents.  They needed something done and I was the person to do it.  Today, we see that even with the best business knowledge and expertise in the world, work boils down to that same simple principle.  Somebody has to do it.

There’s no work schedule.  This is certainly a more recent trend for companies that has been ushered in by technology that helps us work from anywhere at any time.   The typical work week was defined by the Fair Labor Standards Act of 1938, which was established to ban oppressive child labor, set the minimum wage standard and the maximum work week. Of course, with most employment, this doesn’t apply to you.  High achievers are often salaried exempt employees, which mean your work schedule isn’t really protected by law, as long as your pay is the same each pay period.  You can work 40 hours a week or 100 hours a week.  To make this more challenging for you, there is no real definition of work hours.  With a cell phone and laptop, you are reachable any time of the day and reachable almost anywhere in the world.  Growing up as a kid, my dad had a pretty good schedule.  He was an hourly employee and worked from 6AM to 3PM.  He could easily plan his life because the schedule was well defined.  Today’s work schedule is ill defined and makes your life a little more unpredictable.

Working ‘at-will.’  As if your career wasn’t already lacking of any real structure, states have created laws that allow employers to dismiss you for any reason and without warning.  Yep, that means they can walk into your office on Friday and terminate your employment without any justification.  Friday is a good day because it doesn’t disrupt the normal workday of your coworkers should you be terminated without reason.  So, the length of your employment at any company is always at risk.  Many years ago, this wasn’t much of a risk for the workforce but now many managers have figured out that balancing the bottom can include terminating a few employees to keep their division’s budget in the black.  I know we are all professionals here but when your job is on the line, you might be forced to do things you wouldn’t normally do, like terminating employees.

All of these factors have created a completely amorphous environment, void of any reasonable predictability, which further perpetuates the need for change.  We can’t see where we are going and that makes us uneasy.  Professionals remain in a job for 2 or 3 years but choose to leave because their future in the organization continues to remain undefined.  We are creatures of habit and embrace predictability, to some extent.  We’ve built our lives around our jobs and when that stability becomes unstable, so do our thoughts on satisfaction and happiness.  We once had a system that built careers on a visible, logical progression.  You went to college to earn a degree and then entered the workforce in your field.  After years of work in that field, you were promoted up the chain in a career that lasted a lifetime.  Bonuses and promotions were an annual part of your growth.  Today, we see more job uncertainty than we ever have but it appears to be occurring in times with sufficient economic stability. Nonetheless, young graduates will find themselves entering a workforce that struggles to define what it can offer in return for their efforts.   Whatever it is, it is likely to be short term.

Entrepreneurs: Optimists or Realists?

There’s no doubt that you’ve heard that most businesses fail.  When you look at the statistics, it’s very easy to believe that entrepreneurs are dreamers that either ignore the statistics or are just plain naïve.  If you knew 96% of companies fail within ten years, would you still do it?  We know entrepreneurs are smart and willing to take calculated risks, despite these overwhelming odds.  Do they even consider the realities of the entrepreneurial journey?

The first thing to realize about the odds of failure is that they are directly related to the amount of cash in the company.  Bill Camody stated in his article “Why 96 Percent of Businesses Fail Within 10 Years” that “cash is a fact.”  Once you don’t have any more cash, you can’t pay your bills.  This is a reality and certainly hits home very hard.  Now consider that the most significant source of funding for all business startups is the founder’s personal savings, which is roughly four times greater than any other source, according to the Kaufman Institute.  Venture capitalists and angel investors don’t engage heavily in startups.  If you’ve seen ABC’s TV show, Shark Tank, you know the sharks don’t like to invest in an unknown.  They want to see a cash flow before risking their money.  So, if you’re going to get money from others, either do it very early in the launch or you’ll have to grow the business before you can get a cash injection.

Most startups fail.  Most founders use their own money.  What can they be thinking? Do entrepreneurs overlook the realities of startups?  In a survey by Kauffman, many founders shared their thoughts on the factors that prevent others from creating their own startup.  These factors just might be the realities that one needs to consider (and constantly measure) when engaging in their own startup.

  • Risk – over 98% of respondents ranked an inability or lack of willingness to take risk as an important barrier to entrepreneurship.
  • Time and effort – 93% feel that entrepreneurs often underestimate the time and effort requirement to get their startup off the ground.
  • Capital – 91% identify the difficulty in obtaining capital as a major inhibitor, which may explain why most use their own money to start their new company.
  • Management skills – 89% cite management skills and the ability to start a company as critical to success.
  • Family pressure – 83% believe that family pressures to get a steady job and paycheck are real and challenging.

Other challenges mentioned in the survey include stress, maintaining a work-life balance, developing products and services for changing markets, government regulations, taxes, and the costs of employee benefits.

While it’s very hard to identify the right combination of the aforementioned factors that will lead to business success, there are some factors that will certainly lead to failure.  In a study by the University College London, it was found that businesses with entrepreneurs who held no real business experience did not increase profits.  The premise here is that nascent entrepreneurs don’t apply the appropriate weight to opportunities and threats.  In other words, their alertness to identifying threats and use of cognitive skills to recognize opportunities are not in balance.

Optimism has been shown to have a positive impact on entrepreneurial success, in terms of both actual firm growth and financial performance.    Realism, which also affects financial performance positively, is defined as the consistency between growth expectations and actual growth.  As with most entrepreneurs, and as verified by this study, optimism dominates over the impact of realism.

With regards to a balance of both optimism and realism, a dose of realism has the effect of modifying the overconfident cognitive bias of optimism.  For example, watching more cash flow out of your company than in for a long period of time has a propensity to dampen high expectations of future success, forcing one to reevaluate the current situation and cognitive strategy.  A lack of business experience can lead to a late recognition of this imbalance, resulting in failure.

In my experience, most entrepreneurs do a fairly good job of identifying threats and opportunities.  The things they incorrectly assess about them are the magnitude and timing, such as running out of money.   An important thing to remember is that most businesses are not creating something that hasn’t been done before.  There is a lot of literature, experience and information in the world.  Entrepreneurs should always seek it out and ensure they are correctly and constantly assessing their expectations, measuring performance factors (for a dose of reality) and maintaining just enough optimism to keep striving for their aspirations.  Additionally, before you begin to establish any expectations for your business, ensure you have fully applied your cognitive abilities to the factors mentioned above; that is, risk taking, funding, time and effort, management skills and family.

I’ve Got An MBA – Where Are the Management Jobs?

You’ve finally earned your ticket (the MBA) to the executive ranks. Graduation is over, you have a diploma and now you need to figure out how and, most importantly, where to put your skills to work.  The job market for managers is fairly hot right now.  If you haven’t found your opportunity yet, here are some places you might not have thought to look.

New business.  Many companies tout their successes to the world, mostly in the hopes of winning favor with potential customers but you can use these press releases to identify potential employers.  Small to medium companies often win big contracts from the private sector and government sector for which they are not totally prepared to manage.  While they may have established some preliminary management strategy to win the business, they may get changes to what they were awarded that is outside of their proposed plan.  Change always creates opportunity for establishing vision and direction.

Your action:  Monitor websites in your industry to identify companies that have announced big wins.  Learn as much as you can about their new business and determine where you can help out.  Then, contact someone in their Business Development department to see if you can get connected with the person responsible for that new business (e.g. department manager).  You go to Business Development people because they like to talk and negotiate.  Pitch your knowledge, skills and abilities in a way that clearly articulates how you can help them manage that new business.

Mergers & Acquisitions.  Companies are always trying to find ways to make money.  One of these ways is through the acquisition of other companies.  Big companies buy smaller companies to expand into new markets, increase their intellectual property or simply to show growth to investors.  Usually these transitions are challenging and difficult to manage as larger companies are not adept at adapting small companies into their fold.  Often, they will select new management for the smaller companies to help them make the transition, and this is where you can help.  A word of caution: Most of these acquisitions only last a few years before they are spun off or shut down.  If you’re not afraid of change, this is the type of business to follow.  M&A is always happening.  Read about 2015 M&A activity here.

Your action: M&A activity is not a highly publicized activity, at least not until the deal has been made.  The best way to learn about these activities is to tap into the industry grapevine and listen for rumors.  Talk with Business Development people to learn about rumors of mergers and acquisitions in your industry.  Go to trade shows and industry association meetings and conferences to gather information.  Companies love to talk about these rumors, which often have a strong element of truth.  Get your information and strategy ready for how you can make that acquisition more successful. Then, maintain contact with your connections to identify when it will occur.  Send your resume and cover letter that explains how you are the solution to the success of the new acquisition.

Venture capitalists (VC).  Another great source of management changeover is companies owned by venture capitalists.  Typically, VCs provide funding to companies and try to grow the companies as quickly as possible in an effort to sell them in a few years for a large profit.  This process of buying and selling companies creates a need for exceptional leaders who can manage each transition.  Often, VCs will identify organizational leaders they like and will seek to work with them many times during their career.  But there are also opportunities to introduce yourself and how you can help make them more successful.

Your action: Search the web for venture capitalists in your industry.  It’s as easy as doing a Google search on the name of your industry and the words “venture capitalists.”  Click the links to identify numerous VCs in your industry.  Then, research them to find out what companies they invest in.  Create your business case for why they should hire you and send it to the VCs and the companies they own. But make sure you know which of their companies may be in line for a transition before you engage with them.

Having an MBA is great.  You do learn about business.  Unfortunately, business isn’t run anything like it was when the MBA was first created.  Constant change is the flavor of the day.  Managing in transition isn’t the same as steady state management.  My guess is that there are far more companies in transition than there are in steady state.  If you can create a compelling case for why you’re the best for transition management, then you’ll likely find an opportunity to prove it.

Branding: It’s Mastering the Mind

Marketing is the battle for the customer’s mind – owning a share of mind. The process of strategic brand management is a two part exercise. The first part is getting into the mind by displacing something that already exists. The mind is like a dripping sponge and the only way to own a position is to replace a brand image that already occupies a share of mind.

Building a brand image is a long term proposition that requires an in depth knowledge of how the mind works. Words are the key to the mind and each word has either a positive, negative, or neutral value. So the process of building brand equity begins with the development of the right words to build a brand’s “unique value proposition”. That is what is: faster, better, or cheaper, than what already exists?

Obviously, Tesla has created a unique value proposition for their new model 3 that is reflected in the over 300,000 deposits of $1,000 each they have received so far from customers around the world for a car that will not be available for over a year, or more.

The second part of strategic brand management is maintaining and protecting that share of mind and growing the value of the brand with other customers. Brand equity is the value of a brand in the global marketplace. Some examples of the worth of a brand are: Apple ($154 Billion), Google ($83 Billion), Microsoft ($75 Billion), Coca-Cola ($59 Billion), Facebook ($53 Billion), etc.

Some classic examples of brands that have sustained and grown brand equity for many years are Nationwide Insurance (over 50 years) with their well known tune: “nationwide is on your side”. Peyton Manning, Nationwide’s current spokesman, only has to hum Nationwide’s infectious jingle for an instantaneous connection with customer’s minds. A competitor, Allstate, has another over 50 year old similar, but still effective slogan: “you are in good hands”.

Once you hear the familiar Intel “bing”, you don’t have to wait for the “bong” because it already has resonated. An over 100 year slogan that still resonates is Maxwell House Coffee’s: “good to the last drop”. And Wheaties: “breakfast of Champions”.

In conclusion, brand equity is made up of the intersection of the DNA of the brand with the DNA of the customer.

IAMPRO MBA Award Nomination

Well, it’s not often we are nominated for an award for our support of MBAs.  We’ve been blogging, publishing and working with MBAs on career development for a decade.  Considering I’m the only American among the International pool of nominees, I am truly honored to be representing the USA.

The IAMPRO MBA Awards celebrate MBA’s at the forefront of leadership excellence. To recognise the talents and contributions made by accredited schools and their students to the MBA arena and the wider community, the IAMPRO presents five annual awards to outstanding managers, entrepreneurs, non for profit managers, industry leaders.

The IAMPRO invites you to vote upon MBA students or alumnus/alumna for each category of the MBA awards. The winners will be individuals in each respected category.

Vote for me HERE.

I’m in Category 4. MBA ALUMNI ENGAGEMENT AWARD.

There is some real tough competition among these nominees and I’ll need all of the votes I can get.  Your vote is most appreciated.

A NEW DEFINITION OF TIME

One of the most noticeable differences between working for someone else and starting your own company is the personal definition of time.  As I look back on my many years building someone else’s dream, it’s very clear how much time was wasted during the work day.  In this post, I want to share my revelations from my own experience in the hopes that you will find some appreciation or recognition of this transformation in your own definition of time.

Time for an employee.  Working for someone, it always seemed as if my time was dictated for me.  It was hard to really grasp control of it.  There were two major factors that devoured my time each day.  The first, and the greatest thief of my time, was my leadership.  Meeting after meeting, we spent so much time and energy talking about the work that needed to get done.  My managers mostly held meetings to keep themselves updated, not to provide direction. For example, they would gather everyone in a meeting room every week, providing me the opportunity to listen to a lot of people talk about what they are going to do for the week.  Since our tasks didn’t overlap any, this new information didn’t have any value to me.  It was just for the manager to keep up with what was going on in the company.  You would always hear people mumbling “what a waste of time” as we left the conference room.  But this was part of the ritual time wasting activities that occur daily in established businesses.

The second force that targeted my available time for work was myself.  When I became well entrenched in my roles and responsibilities, I didn’t always feel pressured to get everything done as quickly as possible.  I realize time is money but when I was building someone else’s dream, and they were the biggest user of my time, I couldn’t really understand the value of time (at least not by their definition).  They spend my time like it was unlimited.  I would spend hours and hours every month listening to other managers talk about their projects.  Their projects weren’t my responsibility and the requirement to attend a full day of these updates provided no value to me.  With my leadership so eagerly burning time, I began to wonder if they really understood the impact this has on their employee’s definition of time. You see, with such time wasting activities, real value added activities would take longer than necessary.  The average time to perform services offered by the company kept growing.  The danger with this is that employees begin to accept that things will take longer, so there’s no rush to get things done.  Remember, time is money.  We always wasted both.

Time for a startup entrepreneur.  Starting up my company, time is defined by two factors: me and my customers.  When you’re in startup mode, you have considerably more actions to accomplish than time to complete them. The idea that time is money is what I live by.  It’s not anything like it is when working for someone else.  The longer I take to complete the actions to get my business off the ground, the longer it might take for cash to begin flowing in.  The impact of time has a more immediate and noticeable impact on me.  The faster I contact potential customers, the faster I can sell my service.  When they ask questions, I answer them right away.  All of my actions are now driven by my new definition of time, meaning that I must move as quickly as I can to bring in money.  The other definition of time that an entrepreneur must abide by is the customer, who is always right.  My potential customers don’t feel the same sense of urgency as I do and it drives me crazy.  I’m, at times, driven to push a little harder than I should.  Sometimes, my customers are nice enough to tell me to slow down a bit and yet others feel threatened or bullied by the constant barrage of communications and simply shut down.  To my customers, I’m new to the industry and have to learn their ways.  While I may bring something new that they haven’t seen before, I must be respectful and honor their ways of doing business.  When you’re just starting out, time can be the biggest hang up and a huge source of stress. But if you have a solid product/service and you know your customer likes it, it becomes an opportunity to develop patience.  Yeah, I know, nothing easy about that.

In bigger companies, time isn’t such a priority as actions are completed through the collective actions of many employees.  It’s easy to feel that when you’re working with someone else.  You’re in a meeting and the boss says, “let’s get this done in the next week or two.”  With big companies that’s tolerable, but startup mode seems to apply significant time pressure.  Startup entrepreneurs measure time in dollars.  Once the dollars are gone, so is time.  Actually, you can see this intense pressure in bigger companies when they begin to burn their backlog or fail to meet sales goals for a few quarters.  It often forces irrational behavior, such as signing contracts with financially distressed customers, further plunging the decline of performance due to lack of payment from the customer.

My suggestion in dealing with this time pressure is to understand your customer’s definition of time.  You do this in your planning phase; that is, when you put your business plan together.  Your chart showing cash flow should provide a reasonable timeframe that has been validated through interactions with potential customers.  If it takes them 8 months to approve a contract with you, then you must reflect that in your plans.  To think you can do that any sooner is risky.  You’ll have enough stress starting out so there’s no need to intentionally add more.

These are the ramblings of Todd during his walk into entrepreneurship.  Hopefully, you can relate to this.  If you want to share your experiences with us, contact me at todd.rhoad@blitzteamconsulting.com.

Startup Advice: Who/What/Where/When/How

I take advice from everyone.  It doesn’t mean I’ll use it.  I listen because I’m always interested to hear other people’s perspective on starting and running a business.  You never know what ideas people will give you (for free).  But when it really comes to advice that I plan to use, I’m very critical of the source I use.  And you should be too.

whoWHO DO I LISTEN TO?  It depends on what I want to know.  I always read what many experts have written on the particular subject before I go talk to people.  Being informed on the topic will help me filter out the “BS” people have a tendency to share sometimes.  Plus, it communicates to the expert that I’m serious about the situation and have done my homework, so I won’t be wasting their time.  Most experts want to be consulted, so they are happy to cull out a bushel of advice to help demonstrate their comfort with the subject.

Remember, you need advice you can use. It must be tried and true.  It must be applicable to your situation and spit out in terms that can be easily translated into action.  As for the people I pursue, they must have a few credentials that I can validate before I consider contacting them to ask for advice.  Here are some from my general list of traits.

  • Shares their experience (not too many years in the past).
  • Provides references to resources and people.
  • Offers actionable advice.
  • Respected in their field or industry.
  • Proven successful.
  • Share in a few fundamental beliefs: Faith, Family and Friends.

Don’t be afraid to ask anyone for advice, no matter how successful.  Recently, I had lunch with an alumni from my MBA school, Indiana Wesleyan University.  Evan is a financial advisor who just moved to Georgia and into my neck of the woods.  It never hurts to have such a fine, upstanding advisor in my corner.  Will I use his expertise?  You bet I will.  As you branch out to connect with the rich and powerful, realize it might take time.  The highly successful will just take a lot longer to connect with.  But keep trying.  My record is 18 months of continuous nagging. I think they felt sorry for me and gave me an hour of a billionaire’s time.  Wonder what that was worth?

whatWHAT DO I ASK ABOUT?  For me, this could be anything from the legal obligations of ADA, OSHA and E-verify to building the best marketing strategy.  I seek support as I need it.   Unlike the many executives I’ve served under over the years, I think it is very important to seek advice and get answers on anything that you don’t know about.  I’ve watched executives tank their company because they failed to reach out to experts to understand a part of the business that they didn’t.  Maybe it was pride or ego or just plain laziness, but a company’s existence depends heavily on its leadership’s knowledge base….and you never know enough!

For example, maybe you want to know how to distinguish your business from all of your competition, especially since you all seem to do the same thing.  I would say to you, “read the “Blue Ocean Strategy” by Chan Kim and Renee Mauborgne.”   In fact, I’ll send a copy of this book to the first two people who send me an email showing me that you promoted this post.  Running a great business is about finding the right answers and you must chase them vigorously. Your future depends on it.

whereWHERE DO I GET THE ADVICE I NEED?  I’ve found that the best advice comes from other business owners.  If you’re a startup, you probably don’t have a lot of connections to business owners.  Well, maybe you do.  My kids have been playing sports for years and now that I’m engaging in my own startup, I’ve just finally begun talking shop with the other kids’ parents.  I’m amazed how many are running their own business.  I never asked before because I didn’t have a real interest in their experiences, but I do now.  Business owners are great advisors because they can share real experience, not theoretical notions that you have to figure out how to apply.  Even better, they can connect you with other professionals they have worked with in the past, saving you considerable time in finding the support you need, such as legal, accounting, marketing, branding, strategy and funding.  You’re support is likely all around you and you don’t even know.  Take time to let people know what you are doing and what kind of help you need.  Many will be happy to help you succeed.

whenWHEN SHOULD I ASK FOR ADVICE?  This question is easy.  You ask for advice before you need it.  It takes time to really understand your issue in enough detail to ask a question.  You also want to ensure you do a little research to generate some potential answers to your question before you propose the question to an expert.  Then, you’re not really asking a question, you’re seeking validation of your ideas.  Professionals are more likely to respond positively to this scenario than an “out of nowhere” question from a stranger.  It also takes time for experts to respond to the question.  So you need to give yourself sufficient time for a response.  To improve your success in getting that valuable advice, choose times of the day where professionals are more likely to share information.  This includes early morning, the end of the day or after exercise when we are tired, as these are times when our defenses are down and we’re more likely not to think you might be a risk or threat.  Additionally, shared times of relaxation and enjoyment, such as during a golf game or a networking event, are great times to secretly tap into the minds of the experts.

howHOW DO I ASK FOR ADVICE?  There are several ways to approach this.  First, you can use mutual connections to make the initial pitch for you and setup the question for you.  Start with people you already know to identify potential experts who experienced what you’re preparing for.  Second, you can reach out to experts directly but you may want to hone a simple elevator pitch about your business that ends with the question that you so desperately need an answer. Third, you can invest in the experts you seek guidance from.  Most experts get tons of requests for information from people who want it for free.  We are all in the business to make money.  Show your expert that you have invested in them by purchasing their book, going to their seminar or promoted their work in some way.  Then, they’ll feel somewhat compelled to invest in you.  I would suggest that investing in the experts first is by far the best way to get the answers you seek.  It provokes feelings of reciprocity and will likely build a much stronger relationship that you can tap into for years to come.

The Source of Inspiration for High Achievers