Business Sense

We built really smart businesses. Great business architecture, systems infrastructure, and process flows. We hire the smartest people and design the best products. We develop and implement strategies that astound even the largest global business.

This was the recipe for success.

Now, even if you have all of these capabilities, your business is vulnerable. Your business must increase its situational awareness; its ability to recognise changes in the environment and initiate change.

You need a business intelligence system. One that is truly intelligent. Like the body, your business has a sensory capacity. It operates at the boundary between your internal and external environment. Where you touch your customer, hear their needs, see changes in trends. You taste the possibilities created by technology and smell the coming rain.

The good news is you already have this capacity. You have all the smart people and infrastructure to pull this off. You need to reprogram your brain to be sensitive to the information coming from the extremities and interpret them accurately.

Strategy is not a cognitive function, it’s a creative function. Your business intelligence system provides the stimulus for change.

 

Originally posted here.

What you have

The productive capacity of every individual and every organisation consist of three elements. Intent, Energy, and Intelligence.

The mix of these elements is what determines the quality of our products, our competitive advantage, and our ability to service our customers.

Intent is the desired reality the organisation aims to achieve. What difference do we want to make? How do we want to influence our customers? How do we want to inspire our customers to be their best? This is your strategy. This creates a vision and unlocks energy. The leader defines Intent and focusses all the energy of the organisation in this direction.

Energy is all the resources of the organisation. Capital, assets, networks, time, goodwill, etc. Energy is spent on activities we believe will bring us closer to our intent. Our desired reality. This is a limited resource. It includes an opportunity cost. All the more reason to ensure our Intent is accurate.

Intelligence is the collective intelligence of all our employees and our organisational processes. How well are we using the capacity of our employees. We are spending Energy (salaries) on acquiring access to their intelligence. Are we using it effectively and efficiently? We also want an ROI on all this Intelligence spend. The best way to ensure this happens is to transfer Intelligence of people into the intelligence of a process.

If all your people leave, how much is your business worth? That is the value of organisational Intelligence.

What are you doing with what you have? Most importantly, how does your customer benefit?

Originally posted here.

Two fundemental questions

Are we going as far as we possibly can with the fuel we are using?

Are we headed in the right direction?

The first is a question of efficiency. Input vs output. ROI, cost versus benefit, etc. This is easy to measure but difficult to achieve. Every system, collection of processes, or organism experiences this. The inherent friction caused by the moving parts. This friction should be as low as possible.

Your business is somewhere between a rusted motor with no oil, and perpetual motion. This could make business very painful, draining experience. It forces you to spend your limited energy on creating momentum that impedes your future performance.

The second is a question of effectiveness. Are you delivering on your purpose? This is challenging to define, and hard to determine. How much of your output is used to get you down the road you want to be traveling?

Even autopilots in commercial aircraft are never on course. The system makes constant corrections for the duration of the journey. If you are not intentionally doing this with your strategy chances are you are not heading in the right direction. All your energy is spent, very efficiently, taking you in the wrong direction.

The trick is you can never answer the one without considering the other. They are two sides of the same coin. Co-essentials.

Successful strategy secures efficiency, successful management secures efficiency. Both secure sustainability.

Originally posted here.

How Corporate made me an Entrepreneur

Don’t you just love those fairy-tale start-up stories that inspire us all to dream big and shoot for the stars?  Twitter, Facebook, Apple, these brands are synonymous with the brainy tech entrepreneur making it big in a fortnight. Something we all hope to achieve.

Although we can learn plenty from these inspiring stories, I have found they trip up many aspiring entrepreneurs. It creates the illusion that a multi-billion-dollar idea is enough to launch you into stardom. The reality is slightly different.

From a previous career in corporate, I learned 4 valuable lessons to help entrepreneurs evaluate their expectations and business goals.

  1. An idea is not all you need to make money.

This is one of the fallacies these fairy tales teach us. An idea is rarely enough to make you lots of money. Ideas are a dime a dozen. Your idea may have the potential to create billion-dollar value, that does not mean it will. If you follow NLP (Neuro Linguistic Programming) we all have the potential to win an Olympic Gold. The question is, why don’t we?

It’s like the laws of motion. Potential energy remains potential energy. Like a boulder at the top of a hill, it has significant potential. This potential is only realized if the boulder can be pushed over the edge. How do we get it there? This brings me to my next lesson.

  1. Teams are more successful.

So, you want to be the Einstein locked up in his dorm room building the next tech breakthrough? Please reconsider. Entrepreneurs need to surround themselves with skilled and experienced people with different perspectives and mindsets that challenge their own.

Having people around to question us improves the quality of the decisions we make. It creates an accountability structure that forces us to stay committed when the billion-dollar idea takes slightly longer than expected. It avoids isolated and one-dimensional thinking in solving problems.

In the long run, teams have a greater chance of success. It is simple odds. You have a larger body of knowledge, broader perspectives and experience, and wider networks to utilize in crafting a successful business.

We are faced with huge demands in the amount of information available to us. Being a generalist will leave your ideas exposed to specialized factors of which you are not aware. Being a specialist exposes you to areas of business and product considerations you are not able to incorporate.

  1. You don’t know what you don’t know.

This is one of the mistakes we make most often. We build products or solutions based on assumptions. Those assumptions are usually determined by whether I would buy my own product. That is like asking a fox if it likes chicken.

If you are serious about providing a solution people want and are willing to pay for, you need to get your hands dirty. You need to test your idea with the people you think will buy it. In this process, I can guarantee, you will learn many new and exciting things about your customers. Some of these lessons you may not like at first. They may create some friction in your current product design. Trust me, it’s much cheaper and easier this way. Market research is critical. That is why many corporates spend so much time and money on R&D. It does not have to be nearly that expensive for you, but it will be if you ignore this step.

Once you have what your customers want, you start selling. Not quite.

  1. Strategy is messy.

This last lesson seems somewhat counter-intuitive. We have this idea about business strategy. It’s thinking that happens in a glass castle on the top floor by men wearing ties and fancy suites. We think that strategy is like a game of chess, with the strategist moving pieces as he deems fit. The other view is militaristic: General commanding troops to conquer an enemy.

These views oversimplify strategy to a system where you have only one enemy or opponent, and the pieces on the board or soldiers in the army have no choice in the matter. With chess, even the possible moves are restricted.

In life, each chess piece, you and I, have freedom of choice. We also have much more than just one hand trying to move us, and they are not all moving us in the same direction. We have many competitors and a changing legal landscape.

Strategy is like playing chess on a Rubix cube in space, where each piece has their own jetpack.

Strategy is about planning and implementation but is it also about how well we respond to changes in our plans and how quickly we can adapt to new information on the go.

Entrepreneurs will do well to dream bigger than ever, but understand that each dream requires foundations laid with wise counsel and real, authentic market feedback. Make sure you build businesses that are flexible and responsive. Be willing to reinvent your business to cater to the changing needs of the most important person, your customer.

*Originally posted here.

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