Game changing innovation needs a risk-taking environment

In the April 26th Indianapolis Star Michael Goldsby the executive director of the Entrepreneurship Center at Ball State University wrote a very good My View column titled “The game has changed for entrepreneurship.” Dr. Goldsby, an expert on the field, makes the argument that currently policy makers and companies view entrepreneurship as primarily composed of small business startups and that this is a mistake. By only looking at small business we are missing a large segment of the economy since continuous improvement coupled with continuous innovation is the magic formula for a company’s success. He states that companies of all sizes need entrepreneurial thinking to compete successfully in the 21st Century and suggests that schools must craft curricula to teach creative problem solving and innovation that can and will be used to drive innovation in small and large companies.

I agree with everything he is saying. Problem solving, how to effectively manage risk, and more importantly how to think creatively are critical skills that should be taught in every management school in the country. I also add that we won’t succeed in converting our medium to large companies into entrepreneurial powerhouses until we seed and grow a culture with current company management that promotes rapid experimentation and accepts short term failures as a learning event to prepare for long term success.

So why is entrepreneurship composed of mainly small business start-ups? I think a small company is an ideal climate for entrepreneurial thought. The stakeholders are usually willing to bet the farm and risk their jobs and financial wealth on an idea. Successful entrepreneurs have passion and are able and willing to focus on the key success factors for getting a product or service to their customers. The management team is a critical piece of the puzzle. Successful management team members are judged not on what they have done in the past but what they can contribute in the future. Each member must be willing to roll up their sleeves and participate in multiple tasks for the venture to succeed. It is OK to fail as long as information is learned. Timelines are short. Milestones are measured in weeks or months. Who knows where anyone will be in 5 years. The key is to enjoy the moment. If the basics are done right success will follow.

So how does a large company foster an entrepreneurial culture? Many years ago I started my post MBA career at a large company here in Indianapolis. At the time one of the selling points to join the company was that it was managed by consensus. I got an excellent education in business and worked with some of the best individuals I know but one thing I learned very early on was that consensus did not promote or reward risk taking. If 100% of the decision makers had to agree that an innovative idea was worthy of a risk before it was approved there was usually one member willing to kill or postpone it until one of our competitors tried it first. Decision makers were worried about failure. Some found it was much easier to go along with the status quo than try something different and find him or her knocked off their career track.

That is not to say that entrepreneurship in large companies will never happen. 3M is known for spinning off numerous companies based on internally developed technology. Apple over its lifetime has continuously reinvented its product line to lead the field.

I agree with Dr. Goldsby that if large companies in Indiana embrace the role they play in an entrepreneurial society the entire state will thrive. The challenge is how can we encourage them to do so.

1. The first thing is that the company must make a long term strategic decision from the top down that in order to promote game changing innovation they need to accept diversity of thought in their organization and also provide a safety net for entrepreneurs that try but fall short of a goal.
   
2. Second they need to cross pollinate by hiring or contracting with individuals from businesses outside of their traditional environment to provide input to product and/or business development teams. A pharmaceutical company could benefit by hiring someone with a consumer goods background, an airline could hire an individual with an expertise in promoting widgets who also flies a lot, a company wanting to compete using social media should add a few 20-something employees that text their friends rather than call them. These new members should encourage companies to think outside the status quo and consider non-traditional change.
   
3. Finally companies should not expect to change overnight. Mount Everest is not climbed in a day or even a week. The process takes months and involves conquering numerous milestones to get to the top. The road to game changing innovation is littered with hazards. Successful companies are the ones that do their homework, provide a supportive environment, take calculated risks and allow their employees to spread their wings and enjoy the process.

Until next time - all the best!

RolandB

BizTown – the entrepreneurs of the future!

I had the opportunity recently to be a mentor at the Junior Achievement BizTown. For about a day I watched as 100 entrepreneurs created and ran a “town”. They came from a wide variety of backgrounds. Some came from families rich in financial wealth, others qualified for school lunch programs. Some were taking many of their classes in Spanish or French, others were Hispanic where English was their second language. What the students (the citizens) discovered was the joy of learning how business worked and how one business depended on others. They got along. They had fun. What I learned was that I can learn a lot about life from a group of 5th graders.

For those of you not familiar with BizTown it is a simulation where about 80-120 students run a town and all of the businesses that make the economy run. There are businesses that make and sell interesting things, there are banks that loan money to the businesses and collect interest on the loans, there is a power company that sells utilities, there is a newspaper company and sells advertisements and produces and sells an actual paper, there is a radio station with DJs that sells air time to businesses in the town for commercials, there is a post office (FedEx), a Steak and Shake restaurant where students can buy popcorn and soda, the Peyton Manning Wellness Center where students go for medical checkups and learn how to eat healthy, and a city hall where the mayor and police keep the peace. Each company has a payroll. Each company pays taxes. The employees are paid with checks, they pay income taxes, they cash their checks at the bank where they receive a small amount of cash and deposit the rest into their checking account. They use the checking account to pay for the interesting things sold at the retail stores.

This all happens between 9:30 AM and 2:00 PM. Each day a different group of students enjoy the opportunity at the facility. A group of five JA staff make sure the town “runs” correctly. Adult mentor volunteers assist in each business to answer questions. The student citizens make the decisions, do the legwork, sweat a bit and have a lot of fun.

The day I was there we had students from the International School, Saint Phillip Neri and Saint Anthony. Most of the citizens were in 5th grade. Over the previous few weeks each student had filled out a resume and had interviewed for the job they wanted. Each business had a Chief Executive Officer (CEO) and a Chief Financial Officer (CFO) along with 4-6 supporting roles. Each student had a job description so they knew what was expected of them before arriving.

Our citizens came from much different backgrounds. The International School of Indiana is a private school in Indianapolis. According to their website http://www.isind.org/ the yearly tuition is $13,050 per year. Students pick a language track in either Spanish or French and learn most of their coursework in that language. Saint Anthony is an inner city school supported by the Archdiocese of Indianapolis. The average family income is $14,000 per year. Approximately 90% of the student body is Hispanic and most of the students qualify for free school lunches. Very few of the students pay tuition. What I found fascinating and encouraging was that all of the student/citizens regardless of what school they were from participated as equal members. They all worked hard, they communicated, and the system worked.

I’m sure many of the students learned a lot about business, about teamwork, about leadership and a few life skills like how to balance a checkbook. What I experienced as a mentor was how well the students got along, how well the students were prepared by their teachers for the day’s activities, how well they performed in their roles, how hard they worked, and in many ways how once they understood the rules they policed themselves. I learned that our youth when given the opportunity rise to the occasion.

As a marketer I am often the champion for the voice of the customer. The following are the top 10 reasons for BizTown as recorded in JA BizTown Newspaper by the citizen staff.
1. It is fun.
2. You learn how to be an adult.
3. You learn how to do jobs.
4. You learn how to control money.
5. You learn how to write checks.
6. You learn how to balance a checkbook.
7. You learn how to handle breaks.
8. You learn different jobs.
9. You get to spend money and shop.

….. and the final reason

10. You get two paychecks!

What is the value to this adult volunteer of experiencing entrepreneurial spirit in a group of 5th grade students – Priceless!

If you have an interest please consider making an investment in the future by giving some of your time and/or your financial treasure to support a good cause like JA BizTown. It is worth the effort.

Until next time - All the best!

RolandB

Ducks Quack - Eagles Soar.

A friend of mine sent me this message today. I cannot vouch for the authenticity. I do know that Harvey Mackay is a very successful businessman, motivational speaker and author from Minneapolis. He is very active with my alma mater the University of Minnesota. The message is a great one though. Thought I would pass it on.

"Life isn't about waiting for the storm to pass. It's about learning to dance in the rain." Have a great day.

Until next time - all the best!

RolandB

Photo credit

_____________________________________________________

No one can make you serve customers well.....that's because great service is a choice.

Harvey Mackay, tells a wonderful story about a cab driver that proved this point.

He was waiting in line for a ride at the airport. When a cab pulled up, the first thing Harvey noticed was that the taxi was polished to a bright shine. Smartly dressed in a white shirt, black tie, and freshly pressed black slacks, the cab driver jumped out and rounded the car to open the back passenger door for Harvey. He handed my friend a laminated card and said:"I'm Wally, your driver. While I'm loading your bags in the trunk I'd like you to read my mission statement." Taken aback, Harvey read the card. It said: Wally's Mission Statement: To get my customers to their destination in the quickest, safest and cheapest way possible in a friendly environment.

This blew Harvey away. Especially when he noticed that the inside of the cab matched the outside. Spotlessly clean! As he slid behind the wheel, Wally said, "Would you like a cup of coffee? I have a thermos of regular and one of decaf." My friend said jokingly, "No, I'd prefer a soft drink." Wally smiled and said, 'No problem. I have a cooler up front with regular and Diet Coke, water and orange juice. Almost stuttering, Harvey said, "I'll take a Diet Coke." Handing him his drink, Wally said, "If you'd like something to read, I have The Wall Street Journal, Time, Sports Illustrated and USA Today."

As they were pulling away, Wally handed my friend another laminated card,"These are the stations I get and the music they play, if you'd like to listen to the radio." And as if that weren't enough, Wally told Harvey that he had the air conditioning on and asked if the temperature was comfortable for him. Then he advised Harvey of the best route to his destination for that time of day. He also let him know that he'd be happy to chat and tell him about some of the sights or, if Harvey preferred, to leave him with his own thoughts.

"Tell me, Wally," my amazed friend asked the driver, "have you always served customers like this?" Wally smiled into the rear view mirror. "No, not always. In fact, it's only been in the last two years. My first five years driving, I spent most of my time complaining like all the rest of the cabbies do. Then I heard the personal growth guru, Wayne Dyer, on the radio one day. He had just written a book called You'll See It When You Believe It. Dyer said that if you get up in the morning expecting to have a bad day, you'll rarely disappoint yourself. He said, "Stop complaining! Differentiate yourself from your competition. Don't be a duck. Be an eagle. Ducks quack and complain. Eagles soar above the crowd". "That hit me right between the eyes," said Wally. "Dyer was really talking about me. I was always quacking and complaining, so I decided to change my attitude and become an eagle. I looked around at the other cabs and their drivers. The cabs were dirty, the drivers were unfriendly, and the customers were unhappy. So I decided to make some changes. I put in a few at a time. When my customers responded well, I did more."

"I take it that has paid off for you," Harvey said. "It sure has," Wally replied. "My first year as an eagle, I doubled my income from the previous year. This year I'll probably quadruple it. You were lucky to get me today. I don't sit at cabstands anymore. My customers call me for appointments on my cell phone or leave a message on my answering machine. If I can't pick them up myself, I get a reliable cabbie friend to do it and I take a piece of the action." Wally was phenomenal. He was running a limo service out of a Yellow Cab. I've probably told that story to more than fifty cab drivers over the years, and only two took the idea and ran with it. Whenever I go to their cities, I give them a call. The rest of the drivers quacked like ducks and told me all the reasons they couldn't do any of what I was suggesting.

Wally the Cab Driver made a different choice. He decided to stop quacking like ducks and start soaring like eagles. How about us? Smile, and the whole world smiles with you... The ball is in our hands! A man reaps what he sows. Let us not become weary in doing good, for at the proper time we will reap a harvest if we do not give up... let us do good to all people. Ducks Quack, Eagles Soar.

Have a nice day, unless you already have other plans. SORROW looks back, WORRY looks around, and FAITH looks UP. "Life isn't about waiting for the storm to pass. It's about learning to dance in the rain." And while in the storm, give it to God and let Him handle it.

Selling with a System

This article was originally posted on the Indianapolis chapter of the AMA's website on 3/15/10. Click here to access the article.

One of the advantages of joining the Indianapolis chapter of the American Marketing Association (AMA) is an invitation to free members only meetings. I attended one recently titled “Selling With a System.” The presenter was Aaron Prickel from Lushin & Associates, a sales training and consulting firm.

As the economy has slowed the rules of the game have changed. Everyone at your company is a salesman and we are all required to climb higher on the tree to get to the “low hanging fruit.”

As Aaron put it, our parents have taught us since we were children it is not polite to talk to strangers and also don’t about money. A successful salesperson needs to talk to strangers confidently and also needs to talk about money early in a conversation in a positive way. Without conscious effort we will fall back into old habits.

The sales process is relatively simple; ask, present, quote, close. The successful salesperson needs to understand the type of person they are talking to, what the buyer is consciously or unconsciously trying to do and finally creating a win/win agreement that both parties will feel comfortable about the day after the sale.

People buy from people who are like them. You need to understand your customer and communicate with them in the way they are communicating with you. Aaron breaks most individuals into three categories:

1. Dominant – this type of individual knows what they want and is results driven. A successful salesperson will ask a few questions then ask for the sale.


2. Influencer – a happy go lucky person, talks a lot about themselves and what is going on in their life. A successful salesperson will ask questions about the person, listen, then after a period of time ask for permission to move on


3. Steady Relater – a cautious thinker, detail and process orientated. A successful salesperson will need to be very patient and move the individual forward slowly in small increments.

Understand the 4 step traditional buyer’s process. Buyers will

1. Lie – they don’t want to lose control. How many times have you entered a store to buy something but told the attendant you were “just looking?”


2. Steal – information and time. The salesperson usually knows more than the prospect. When the prospect asks questions the salesperson will think the prospect is interested and will usually answer question after question requesting nothing in return.


3. Lie again – this time in a positive way. How often have you told a salesperson that you think the product they are trying to sell you is great but you need to go home and think about it?


4. Hide – Many prospects want to say “no” but don’t want to hurt the salespersons feelings. They will give the salesperson unlimited access to their voicemail and will never call him or her back. The result is that the salesperson will keep the prospect on their active list and invest an increasing amount of time trying to contact and sell them. This is time that should be spent cultivating other prospects.

Successful salespersons will implement a personalized form of the following system

1. Ask – pain is the #1 compelling reason why people make changes. You build credibility by the questions you ask rather than the statements you make. Get your prospect to share their pain. Then tailor your presentation to helping them remove the pain.


2. Present – but first set expectations up front with the prospect. Outline a mutually beneficial agreement of what is going to happen.
   i. Don’t be afraid to talk about money up front to qualify the prospect. A fair question is how much money do you have? How much are you willing & able to spend on this project?
   ii. Start talking about the decision you will be asking them to make before you give them all of the information. (Remember they want to steal time and information)
   iii. Don’t tell them everything you know. Your expertise is worth something. If your product/service is a commodity all you can compete on is price.


3. Quote – Price is never the real issue. Don’t be embarrassed about giving them a fair price. Don’t feel that you need to come down in order to get the business.


4. Close – Ask for the business. Remember your prospects have a need for approval. Make it easy for them to say “no.” This is counter intuitive since you want the business. If they are going to say “no” you want/need to hear it sooner rather than later. According to Aaron one of the biggest problems in the sales world is delayed closings, those customers that will tell you tomorrow that becomes tomorrow etc.

Talk to your prospects the way they are talking to you.

1. They are visual thinkers if they describe a picture, look up with their eyes (more on eye movement a bit later), and speak quickly. You may want to respond by saying “ I see what you mean.”


2. They are auditory thinkers if they describe sounds, look straight and have a slower rate of speech. You may want to respond by saying “I hear what you are saying.”


3. They are kinesthetic thinkers if they describe feelings such as “I can’t put my arms around it” and look down with their eyes. You may want to respond, “Tell me how it make you feel.”

Looking at the eyes can also tell you a bit more. If a person looks to their left after you ask them a question they are most likely thinking logically and if they look to the right they are thinking creatively. Ask someone (preferably a friend) about where they were last night. If they look to the left they are trying to place where they were. If they look to the right they may be trying to create an answer (i.e. they are lying)

A commercial for Lushin & Associates. They help energize or reenergize individuals or groups of salespersons to get more sales in less hours. If you or your company is in need give Aaron a call. I’m sure he would like to help you.

A commercial for the AMA. This outstanding seminar lasted about 90 minutes and had about 40 attendees. Lots of great information was presented that helped me do my job better immediately and lots of great folks were there to network with. What a benefit!!

Until next time – all the best!

RolandB

Photo credit - I was looking for an "agreement" photo. Thought this was a great one.

The Time to Invest is NOW!

This article was originally published at Inside Indiana Business and can be accessed at http://www.insideindianabusiness.com/contributors.asp?id=1643

I was at the monthly meeting of the Venture Club of Indiana recently. The organizers had invited respected entrepreneurs, angel invertors and venture capitalists from around the country to comment on the Top Trends Impacting Midwest & Indiana Business in the Upcoming Year. The panelists accepted questions from the audience and seemed very open and passionate in their responses.

One topic that came up repeatedly was that a recession is a great time for buying companies. The reason is that there are lots of good ideas to pick from and valuations of many companies are relatively low when compared to a booming economy. To prove a point one of the members of the panel asked the audience how many individuals in the audience were looking for money? About 75 hands went up from the group of about 400 individuals. When asked how many people were ready to invest today only about 10 volunteers raised their hands.

I think it is human nature that when times are bad many of us hide in our “box” where it is safe until we are convinced it is safe to come out. However if you look at history a lot of winners did just the opposite and invested in times of turmoil. I read an article recently that stated 16 of the 30 companies that make up the Dow Jones Industrial Average were started during a recession or down economy. These include Procter & Gamble, Disney, Alcoa, McDonald's, General Electric and Johnson & Johnson. Some other companies that made their start when many were pulling back are Hyatt Corporation, Burger King, IHOP, FedEx, LexisNexis, CNN, and Microsoft. Why did these companies succeed? The founders knew their customers, understood their needs, understood the changing environment they were operating in, and created new products and services to meet the needs. They identified a solution and were not afraid to move forward.

In a recession the reservoir of business is drained to critical levels exposing the rocks on the bottom. Companies set in their ways with aging policies/mindsets are like ships that were able to succeed in good times but are now too bulky and crash into the rocks. This creates opportunities for nimble, flexible companies (visualize a speedboat) to take advantage of the situation and change.

In the climate today here are a few investments to consider to achieve a sustainable competitive advantage.

1. Market your existing products aggressively. As others decrease marketing and promotional spending keeping your level of spending the same or even increasing it will help you build share of voice in the marketplace. This increased share will give you an incredible advantage over your competition now and once the economy begins to grow again.


2. Innovate your product line. Has your market changed? Can you come up with a better mousetrap that will allow you to meet your customer’s needs at a lower price point.


3. Improve your production process. Can you produce more for less allowing you to lower your price and buy market share?


4. Fill a new market vacuum. How are your competitors responding to the recession? Are they pulling back creating a vacuum that you can fill?


5. Talk to your existing customers? Are they happy? What are their needs? Identify things your company can do to increase sales to them. A satisfied customer is much easier to sell than a new one.

Entrepreneurs willing to take risks with their time and/or financial resources understand that this is a time to invest rather than pull back. It is what makes them entrepreneurs. This is what separates them from all others.

In summary don’t be afraid to invest now. When the economy improves and your competition climbs out of their box you will be several steps ahead.

Until next time - all the best!

RolandB

Photo credit

Walk a mile in your customer’s shoes

A large article appeared yesterday in the business section of the Indianapolis Star. The piece titled "Lilly changes course as it shrinks its sales force" discussed how the pharmaceutical giant was cutting over 4000 sales positions and how the changes were effecting selected representatives.

The article can be accessed here.

The fact that the pharmaceutical sales model is broken and needs to be revised is not a surprise. Experts in the industry have seen it coming for years. A few years ago pharmaceutical companies in an effort to increase share of voice in the doctors’ office dramatically increased the number of sales representatives calling on doctors. In many cases 3 or 4 individuals from the same company would call on a single doctor. Each representative would give the doctor essentially the same message adding little new information that would help the doctor prescribe the product. The representatives were rewarded on number of calls they made and volume of samples distributed rather than valuable information provided. Information was pushed down to the doctor. Listening to the doctors concerns was discouraged. As a result the doctors quickly became frustrated. They were not learning any new information. In fact the visits were taking time from their fee-paying patients. An increasing number of institutions or physician practices now ban pharmaceutical reps from calling on their doctors or make it mandatory that the rep has an appointment to see a doctor. Doctors view a representative as a distraction rather than an allay.

Times change. There was a time not too long ago when a sales representative visit (most were a registered pharmacists) was appreciated and valued. What happened?

My opinion is that in many pharmaceutical companies the short term goal of selling product at all costs overshadowed and in many cases destroyed the relationship between the company and key customers that had taken years to build. In the past a doctor and an educated representative spent time building a strong trusting relationship by engaging in effective conversation. This meant questions and answers on both sides regarding disease and available treatments. The representative learned about patients the doctor was seeing, outcomes she experienced and concerns he about particular therapies. The doctor learned how a particular treatment worked, details of clinical trials and why a drug should be considered for certain patients and why it should not for others. Quality information was passed. Time was well spent and valued by doctor and rep.

Today doctors are seeing more patients and receiving less income for each patient. The number of products to treat disease has exponentially increased. The time doctors spend to research new therapy is less. In theory the doctors’ need for quality information is at least as high today as it was in the past.

So what can be done? There is a solution but it is not easy and will take time and commitment to implement. Success will be measured over years but disaster can happen in weeks if management loses direction. Pharmaceutical companies need to build back trust with their key customers. They need to understand the patients that use their products and the doctors that recommend them. A doctor will need to see a pharmaceutical company not as a company that demands profit but as a trusted resource that will help him or her get the best possible outcome for their patient.

So how do you start? I think the winners will be pharmaceutical companies that make a commitment to walk in the shoes of their patients and doctors. The company must recruit and train a representative to really listen to and understand the doctors they support. How many patients does he see a day? How prevalent is a particular disease state? How dedicated are her patients to treating their disease? Where are his frustrations? What questions does she have? What information can be provided to make his life a bit easier? How can the rep win the doctors trust? Remember trust will and should be built on the exchange of quality information. Gone are the days when trust was bought by sponsorships, lunches, trips, trinkets and/or grants.

This is how you build a relationship. This is how you rebuild your brand, your company, and your business. It will happen one doctor at a time, one rep at a time. It will mean that representatives will be placed in an area for an extended time to build and grow relationships. It will mean that representatives are trusted to develop relationships and not just to deliver a scripted message.

In the successful pharmaceutical company of the future representatives will decline in number but increase in knowledge and value. Many of today’s reps will find new employment in other areas. A few will rise to the challenge and be rewarded both monetarily and professionally.

Can it happen? I think so but I am an eternal optimist. Let me know your thoughts.

Until next time – all the best!

RolandB

Image: By Jennifer König http://www.gettyimages.com/detail/85155202/flickr?esource=en-us_flickr_photo

Movin' On

Yesterday 12/31/09 was my last official day as Director of Marketing for ParaPRO. Next week I start a new chapter with EYP Advisors. That story is for a future post. Today I’d like to say thanks to a few people that have helped me in 2009.

1. Social media expertise. One of my goals for 2009 was to increase my understanding how social media can be used to initiate and grow relationships with key customers. James Burnes, Don Schlinder, Shayna Martin and the team at MediaSauce did a great job helping us understand how our customers were using social media and what we could do to make a real impact. Together we created a living lab and had the opportunity to experiment and figure out what worked, what needed improvement, and how to maximize the opportunities we were seeing. Dr. Itchy and the disease awareness site at http://www.dritchy.com/ are properties other companies will be using as benchmarks for years to come.




2. A quality article. Another one of my goals was to publish an article on our clinical trial results in a peer-reviewed journal. Julie Aker, Leslie Schuh and the team at Concentrics did a tremendous job assisting Dr. Dow Stough to get the paper published in the journal Pediatrics.




3. Public relations. Ed West and Debbie Davis taught me a lot about how the media works and how to create win/win opportunities to get our message out.




4. The team at ParaPRO. No one can get big picture things done if the small things don’t get done. A big thanks to my admin team. I wrote about them in an earlier post.




5. The ownership of SePRO. In 2002 SePRO, the parent company of ParaPRO decided to take a gamble and invest to license the active Spinosad from Eli Lilly and Company for the treatment of human head lice. Since that time the company has invested considerable resources to complete clinical trials and bring a product to market that will change way head lice are treated. Without management willing to take considerable risk and think like an entrepreneur this opportunity never would have happened.
   
   May 2010 bring you much happiness and success.
   
   Until next time – all the best!
   
   RolandB