Launching Your Next Big Thing - A Prelude

Step One is Vital to the Success of Your Business

Jake was taking his dog, Whiskers, for a walk one morning, just like every other morning, when…BAM!  The idea that was going to change the world as we know it occurred to him.  And, it was going to make Jake and Whiskers very rich.  Jake’s business is doing pretty well now, but this is going to take it to the next level.  So...Tally Ho!!!  As soon as Jake can shower, shave and get to the office, he is going to call a meeting and get the staff cracking on making the future happen, NOW! 

Just a minute there, Ole’ Jake.  Isn't there something that you should do first?  The answer is:  yes, first make sure that your company is ready for the effort.   

Innovation and growth is what keeps businesses profitable and what keeps entrepreneurs, like Jake, engaged and thriving.  You, too may have a vision of a new product, want to enter a new market, acquire a new business, take on a partner or form a joint venture – a growth strategy that will propel your existing business to the next level, and solve some unmet need. So, now you have a great idea on how to grow your business, and you are ready to commit to it.  What is the first step?

Just like an athlete about to enter a major competition, she needs to make sure that she has the necessary fitness to withstand a sustained effort.  If not, there is a real risk of sustaining serious injury that will put her back for months of painful recovery.

This is all too often the step that is skipped by the entrepreneur.   Because there was not adequate appreciation of the extra effort required and the strains such a project puts on the organization staff and finances, the project fails to reach the end goal and damages the core health of the business in the process. It happens all too frequently.  This is the dark side of the incredible power of the entrepreneurial spirit – the unshakable belief in the idea and the underestimation of the challenges.  Does that sound familiar, Captain Ahab?

While the risk of a misadventure is great for any company is doubly so for a small to medium-sized enterprise – let's say less than $20-million of annual sales – run by an owner entrepreneur.  Not only are the resources limited and the financial cushion smaller than that of a Fortune 500 company, but the control and decision making is generally concentrated among a small group, or one!  While small enterprises can be incredibly nimble and reactive, they can also be driven off the road since they frequently do not have the management guardrails of institutional inertia found in large corporations.

So, yes!  Jake should shower and shave and go to the office.  And, sure…why not bring the staff together and get working on two things: dust off that 5-year projected financial plan for the company and its existing products.  Does it still represent the team’s best estimates of sales, sales growth, margins, and expenses?  If so, step two is to develop a business plan for your idea of the century.  

The business plan should tell you how much investment and energy will be required and what the likely return would be. 

The fundamental question to answer before you risk Whisker’s kibbles is, where will the invested capital return more?  Are there opportunities that should be harvested first?  Is there sufficient management and senior staff bandwidth to take on a new project? 

Share your ideas and get some outside opinions from your senior staff, friends or your board.  Don’t have a board of advisors…?!?!?  Don’t have a 5-year business plan…?!?!?  Well, that is a subject for another article. 

Lessons from Skiing Can Keep Your Company from Going Downhill

Managing a business reminds me of skiing.  In skiing, as in business, you are going as fast as you can, avoiding obstacles and drop-offs, there is risk, the terrain and conditions are always changing, and the more timely the application of the right actions and reactions, the smoother the ride.

Years ago I skied with two fabulous skiers.  They were both members of the elite PSIA National Demo Team. I would watch them ski a tricky section of a slope to get insights on just how I could more efficiently and elegantly get past that rough patch.  Often they did not make the same movements, nor employ the same strategy, yet they both made those trick sections look so easy and effortless.  Mike was tall and thin and Bruce was shorter and powerfully built, so for each of them to control their descent down the mountain balancing such different cargo on top of their skis required different movements. 

The classic approach to teaching and learning to ski was to observe a new movement by a better skier and then go try it yourself, and VOILA!  Tragically that movement or action only works at a given speed, inclination, turn radius and snow condition.  In other situations the same action might lead to a disaster.  An important change to this flawed approach to ski teaching and learning came along when a big-thinking Austrian named Horst Abraham (who is now a renowned business consultant and business school faculty) realized that all of the skier actions could be grouped into a few easily identifiable and trainable skills.  If the skill tool box was sufficiently developed the body would apply the action with the right force and timing for the situation creating the perfect turn for the conditions.  Separating the complex skier movement into its component skill sets allowed skiing professionals to analyze and understand the endless variations of actions more clearly, and helped them to develop those skills in their students.

Just as aping the movements of other skiers can lead one astray, the mere replication of the actions of successful companies may not lead to the same success for another company. It is similar to watching Bruce versus Mike go down the hill.  Is your business the same size, does it serve the same customer, do you have the same market position and brand equity as the one you are observing?  Probably not.  It is even harder when trying to choose the best action for early stage companies developing new technologies, because there are few comparable precedents.

While one individual can have all the strength, skill and experience to pilot a pair of skis through the toughest terrain, no individual can do it alone in business.  The demands are just too great; technology is contantly changing, customer needs evolve and the details of budgeting for and running operations are too much for one person to handle.  Therefore, create a management team with at least one senior member from each one of the following three business functions: 1) R&D and manufacturing; 2) sales and marketing; and, 3) operations and finance in order to harness three major skill sets of business.

Skiers who have a deficiency of one or more skills have to compensate by expending excess effort in an uncoordinated overuse of their other competences.  If they make it safely down the hill, they burn up lots of energy getting there, and it certainly is not a vision of pure grace.  Watching companies lurch from one avoidable crisis to another is the best indication that there is an imbalance of business skills. 

Examples of companies that do not have a balance of critical skills and a culture of cooperation are all too common.  Consider the example of a company started by a core of technologists or scientists.  The team may be brilliant, hard-working, demanding, and capable of solving the toughest technical development problems.   But, the technology still needs a plan and financing to be translated into a sellable product, brought to buyers and sold for a profit.   The technology team will need the help of competent marketing and management professionals to complete the project. 

If the team has a sufficiently developed reservoir of business skills and they are allowed the freedom to analyze, plan and react, will the right action be chosen at the right time to achieve the desired outcome?  It is no guarantee of success. Having the best and the brightest team, possessing all of the required business skills is not sufficient if there is not mutual respect for their skills and willingness to collaborate. If your company is a start-up, and does not have senior person in these roles, you should seek mentors or board advisors to fill the void for the short-term.

Create a culture of multifunctional teamwork from the beginning, and you will be better able to negotiate the tough terrain and changing conditions of business.  Make sure you have a team with the necessary skills - R&D and manufacturing, sales and marketing, operations and finance – that are empowered to question and challenge each other to arrive at realistic goals and a workable plan.  Finally, give the team adequate resources and the freedom to achieve the business objectives.  It is much easier to create a well balanced and highly functional team culture from the beginning, as a start up.  The reward for building a strong multifunctional management team can be the difference between a success and a crash.

The Three Most Common Mistakes Made by Medical Device Startups

(The Combined Opinion of 61 Medical Device Pros)

What you are about to learn is what 61 medical device pros think are the most common and most deadly mistakes made by medical device startups.

I am a member of a number of LinkedIn Groups, and follow the discussions to learn what my peers feel are the key business issues and pick up the latest best practices.  One of my favorite LinkedIn Groups is the “Medical Devices Group.”  This group is excellent because it is well curated, and because it is well curated it draws a lot of intelligent conversation.  Recently there was a discussion with the title - “Startups: Top three common mistakes that startup companies make.”   I couldn’t resist clicking on this, nor could a large number of other members.  There were over sixty comments from industry luminaries, sharing their opinions on which are the most common (and, I presume, the most fatal) of all mistakes that plague medical device startups.

At the time of this writing, there were 66 comments that covered over 25-pages when transferred to word processing software.  To make some sense out of the discussion, I tallied the comments.  For example, eleven of those who commented wrote that a poor team is the best way to scuttle a startup.  Of course, each person had their own way of expressing their view, but that was the essential message from eleven of my peers, and the most referenced sin that would lead a startup astray.

Next, many of the comments were related, and could fit into one of the following categories*:

• Planning - Errors of planning, not planning, bad planning, extravagance, underestimating cost and time requirements,  etc.
• Product Marketing - Not following a good product marketing process, not  enough early prototyping, testing assumptions, and not understanding  the market
• Team - Poor selection of team, or not respecting  the input of good capable team members
• Technology Worship -  Developing technology over product considerations,
• Funding - Insufficient funding, under capitalized projects.
• Greed
• Bad luck

(*Note – These were not the categories that you or I might think are the most important, but the  discussions clearly  steered in these directions.)

And, the envelop please….

I, and my colleagues at MarketSpace, have our own ideas from our collective 100+ years of experience that will be the subject of future articles.  For example, we find that the industry giants are prone to many of the same mistakes (with the exception of being underfunded).  Perhaps the biggest difference is, while a first class blunder may not rattle a device giant, a minor misstep can be fatal to the more fragile startup. 

Thanks to all of you who cast your votes and made your opinion known.  And, my deepest sympathy to the companies that formed the examples!

In the meantime…WATCH OUT FOR THESE TRAPS IN THE ROAD!

Deliver a Better Brand Experience: A Customer Relationship Skills Tune-Up

(Adapted from the Integrated Training Solutions employee development programs by D. Bertoni and J. Hogen)

You have probably had a great experience buying something or receiving a service. In these rare instances, the company just seems to understand you, what you need, and performs beyond expectations. Experiences like these leave an impact, because they are such pleasant surprises. Performing consistently at that level is not an accident - it requires serious attention to team development. The good news is: 1) there are only three primary skills to focus on, and; 2) each of your employees is probably proficient at one or more of them.

Consistent delivery of an outstanding brand experience requires the effort of all managers to develop their team into first class performers. For some, delivering a great customer experience is natural - for others it is a matter of improving one or more of these basic skills: Relating, Authenticity and Steering.

The following is a short introduction to the three basic skills that form the foundation of positive customer relationships and superior brand experiences. The intention is to make your team development a little easier, by focusing on three identifiable proficiencies. Thus, instead of seeing a team member as a customer relations liability and a loss, you see an achievable skill development tune-up.

Relating
Before a customer can form a bond with the product, service or brand he or she has to feel at ease with the company. Customers rarely arrive at your door in that mental place. Understand that customers, vendors, and others often have a pre-formed notion about your brand, product and service, and come hauling their own emotional baggage from the previous events of the day. Each visitor has an agenda or a purpose for visiting or calling – the problem is to know what it is so you can deliver. Until your caller’s intentions are clear, all that is necessary is to make him or her feel welcomed, at ease and the focus of attention.

In the first minutes of an interaction, it is hard to know much about the visitors’ agenda, so the fail-safe position is to be a “mirror.” That is, mirror the customer’s behavior, i.e. - if the caller or visitor seems in a hurry, you should be too, etc. It is important to listen carefully and gather clues as the caller’s point of view and goals reveal themselves. Then it is time to demonstrate the next important skill – Authenticity.

Authenticity
Authenticity is being a knowledgeable representative of the company and seeming a vital part of the customer’s company visit and experience. It’s knowing the job, doing it well and understanding how the organization can solve problems for customers.

Authenticity includes product knowledge. Armed with a large volume of product knowledge, you can decide what information to share to help inform a customer and what to keep in reserve. The skill of Relating moderates the tendency to recite every excruciating detail of a product’s virtues and arcane attributes.

How competently each individual and team performs their role (which we call a Pivot Point, or simply “Pivot”) determines in large part the visitor’s perception of the company. While most managers and employees feel that Authenticity (how well I know my job) is the central skill, without ample measures of Relating and the last skill – Steering – the customer’s experience can still be quite unsatisfactory.

Steering
The Steering skill involves expanding the customer’s relationship with the company. Each customer has limited time to discover the company’s hidden product and service gems. The process of informing customers and potential customers about the uniqueness of the company and the value of the product requires a skilled guide, sometimes drawing on other team members at critical moments. Sometimes called “closing the sale”, “creating a customer relationship” or “developing a lead” – guiding a customer through that company discovery requires a person accomplished in the Steering skill to keep the process moving efficiently and deliver.


The stakes are high, don’t leave this to chance
Success in the marketplace comes from repeated success with customers and other visitors. The cost of customer acquisition is so high that losing customers due to repeated customer disappointment is simply deadly for a business. Satisfied customers are like free advertising. Angry customers are also free advertising - though definitely not the kind you want. Angry or dissatisfied customers retain the scars of a bad experience for a long time, while spreading the warning call to others. Tales of bad customer experiences travel quickly and far.


Once is never enough
A good brand experience should not depend on which employee a customer happens to tumble onto. Management must strive to have all employees represent the brand well. Simply look down the company roster and identify the employees that have strengths or weaknesses in Relating, Authenticity and Steering skills. Have the CMO (Chief Mentoring Officer) – that’s you! – explain the skills, and do a little coaching. Ask each individual to perform his or her own self-analysis – which is the strongest skill which is the weakest. Identify the stars, point out some of their best performances and let their actions be the guide. You’re on your way!

Remember that we live in an entropic world, where employee development usually returns to chaos and randomness! Monitor the progress, expect a certain return to old habits and make improvement tune-ups part of your company routine and culture.

The Broken Brand of the Month

Broken Brand of the Week Month

In February, a new feature appeared called the “Broken Brand of the Week.” Voting continued for about two weeks and the results were (in order of most damaged to least):

1. Toyota
2. President Obama
3. Tied: Congress, Tiger Woods, Democrats and Anthem Blue Cross

Republican's, Take a Victory Lap!

The “winner” Toyota seemed a bit of an upset to me, especially because the media was having a picnic on the remains of the Tiger Woods carcass that week. Tiger had just given his first press conference after the brouhaha, and in spite of the fact that it was a media feeding frenzy, the readers of The Marketer’s Almanac saw Toyota and President Obama as more deserving of a damaged brand award. The GOP – the only nominee that did not receive a single vote - scores a big win, or at least it is the Party of No Self-inflicted Fiasco this week.

The Envelope, Please!

Admittedly, this poll was not scientific, the vote count didn’t quite break into double-digits, but the respondents were the erudite cream of the intellectual crop and brand cognoscenti, who are the readers of The Marketer’s Almanac. (I cast an errant vote for Anthem Blue Cross, but soon we shall see how and why my vote was so misguided. See, I learned something reading this blog!)

Post Poll Analysis: It Takes More Than Stupidity and Law Breaking to Break a Brand

We expect shady behavior from shady characters, so ruining a crime syndicate brand into the ground would take extraordinary indiscretions (maybe a string of good deeds). When the transgression is a flagrant violation of the explicit promise of the brand (not necessarily the law or morals of the land) the crowd starts throwing stones. That appears to be our readers’ definition of a “Broken Brand.” Thus, the votes of our learned readers (and, my misguided ballot) can be viewed as follows:

• Toyota positioned its brand as the auto company that had the lock on design and production quality, while it was trying to sweep dangerous flaws under the rug;
• The “change you can believe in” and “Yes we can” presidential brand got mired in the mud of governing, and seems too comfortable with the status quo;
• Tiger posed as the clean cut, All-American dedicated to his craft, family and the American way – the archetype of sports hero – NOT!
• Democrats given the power they wanted to change the paradigm and cowering;
• And, congress’s insistence that they are doing the people’s bidding yet only focused on raising money for the next campaign.

As for Anthem Blue Cross, while their action to raise rates at that particular moment was impressively stupid from a public relations point of view, it really didn’t break the brand. It was just a for profit company, striving for greater profits – that’s what they do.

The Crowd Hates Hypocrites

Watching a poll like this causes one to ponder what a broken brand is and how a winner manages to claim that prize when there is so much competition. Recall the brand implosion of the decade - the Catholic Church’s decade long scandal of sexual abuse and cover up. There are many examples of senators, congressman and others that have been caught in compromising situations – sending toe-tapping signals from stall-to-stall in an airport men’s room comes to mind – and, a host of other financial, sexual and other imaginative “indiscretions” of public figures and institutions, some of them even serial offenders. However, none of those stories seemed to last long nor create anything more than a partisan scramble for points in the intramural game of politics. Furthermore, institutions are rarely shaken at the foundation from the actions of the fringe minority of individuals and the efforts to cover up the scandal. The difference could be that violent public reaction seems reserved for payback for lying and/or hubris, not for the transgression even when it is considered quite serious.

The lesson? Live up to your brand bargain. There are two ways to do that: pay particular attention to policies that tread near the line of promise breaking; and, do not make brand promises that the company cannot keep.

There Are Plenty More Where These Came From

The “Broken Brand” feature is going to become a regular item of The Almanac, but we are going to change to “The Broken Brand of the Month.” In addition, there needs to be a way to do write-ins, which the blog gadget does not handle in the most efficient manner. To do a write in, post a comment on the Brand of the Month posting with the name of your choice and put a vote in the generic “Write In” slot and your candidate will appear in a few days with a vote next to his, her or its name.

Need a Gig? Fix a Brand!

The ultimate challenge is rehabilitation of the broken brand (think, Richard Nixon). This is where The Almanac’s army of creative thinkers and marketers has a forum to showcase its prodigious talent. When Akio Toyota reads your visionary plan to rescue his family and brand name from the gutter of busted images and brands, he may just decide to fire that good-for-nothing-white-shoe firm and hire YOU!