Steve Huey’s Blog

What if you could only give a friend, a student, your son, or daughter one piece of start-up advice, what would it be?

That is the question I will put to the business leaders in Louisville.  I will blog some of their answers and assemble an ebook from the rest.

My answer is the following:

Figure out the one metric that drives your business.  The one thing that keeps the cash flowing and measure it.  Track it relentlessly.  Focus your entire organization on that one metric.  I will give an example.  A restaurant owner calls in on a Friday night at 7:30 and asks, “What is the wait for a table?”  That one question can tell her how business is and give her an idea as to the revenue for the evening.  How can the wait do that?  The answer is simple – wait equals how busy the restaurant is which translates to people in the store, which when multiplies by the average check equals the cash take.

When you identify the metric that drives your business, and when you focus your entire organization on that metric, then the company moves as one.  One purpose, one aspiration, a single goal.  Know the metric, focus on the metric, drive the metric.

How would you answer the question? – Let me know.

Let me guess – you have a great idea , new product, ability to do something unique!  Why are you not starting it, doing it, expressing it?

I see this all the time.  People have good ideas maybe even great ones and do nothing.  They do nothing because they have built a life around having things – cars, houses, vacations, games, toys, etc. and need – no must have a steady income to support their addiction to things.  This need for a steady income adds to the reasons why many people do not go after their dreams.  I know a great engineer who is busy creating great products for his company when he could go off and create them for himself.  I know a product manager who had five “fund-able” ideas and yet took a job working for someone else working on a product that did not excite him.  A know many people like this as they continue on in their jobs because they create their cages and shackle themselves to their own desks.

I have done this as well – so if you feel this way do not despair you can break the bonds.  get rid of the junk – reduce your dependence and set a goal to buy your freedom from the tyranny of the paycheck.  Once you are free you can try all the things you dream about.  You can go “All In”.

When you do go for it their will be investors waiting.  If you want them (different story).

What are the top ten lessons learned in 2009 that will be useful in 2010?  I think the following:

1. Establishing TRUST is the #1 biggest thing in business.  Without trust no business can take place.  Work hard to earn it and guard it like the gold it is.
2. Building a fluid culture will do more for your business’s survival than any other corporate value.  Building an Adaptive Culture that is unafraid of change means that you can be more responsive to changes in the market place – 2009 has been that if nothing else.
3. APIE is the answer.  What is APIE it is in essence Six Sigma, Continual Improvement, etc.  APIE stands for Assess, Plan, Implement and Evaluate.  Constantly striving to be better makes you better and builds on an Adaptive Culture.
4. Training and Cross Training helps the people in your business get better.  Better people = better service = Happy Clients.  They taught me about the importance of Cross Training at Wendy’s and I have only recently (2009) remembered the principle.
5. Repetition of core concepts helps people digest the message.  I view repetition as the key to communication.  It is not effectively communicated if you only say it once.  Think about this – when a fire breaks out in a crowded theater does the person only say it once?
6. What worked yesterday (yesterday’s value) does not not work today or in 2010.  If you rely on the methods of the past you will not deliver on the promises of tomorrow.  In order to add value a business has to add more value than yesterday.  Ask GM if it is OK to sell a car today that does not have air or power windows.  Better yet ask GM if they can even sell a car where that costs extra. (You may be asking if they can sell any car which is also a good question).
7. Look Back every once in the while.  Remember what worked and where you came from to appreciate your efforts; to remember success and failure.  It is good to remember the past but not to focus on it.
8. Excellent Failures beat Mediocre Successes – to borrow from Tom Peters who no doubt borrowed from someone else.  It is only in excellent failures that ground breaking opportunities are born.  A mediocre success is just that mediocre.
9. Build Raving Fans – You can interrupt people and tell them what you have to sell (Classic Marketing), you can beg (or pay) someone to tell your story (PR), or you can build Raving Fans by offering a unique or unexpected service that wins Raving Fans or Promoters and they – your clients – can sell for you.
10. Create more VALUE than you take.  I call this the secret of life – give more love =get more love, create more value = get more value.

These ten things are what I am going to remember in the new year.  I hope your New Year will be more successful and happy than 2009.

What standard do you set for your company? To be better than your competition? What about the three people in a garage? Ask Craig Newmark!  He blew away multiple Billion dollar industries with a free or almost free product.  I bet no web company – Ebay, Amazon, Yahoo thought that anyone would come along and snipe them out of a market.  Craig did with a staff of less than 30 people.

You must cannibalize yourself before others do.  Do you have a weak spot that can be exploited?  If so it will be.  I am not advocating selling you high end product for zero dollars.  What I am suggesting is that you must make sure that your point of differentiation provides real value.  Newspapers classified ads created real value for a hundred or more years but when confronted with new technology they stuck their collective heads in the sand and hoped it was a fad.  Their real value (providing reach in a local community) was eliminated and became a commodity.

Trends that will kill your business move slowly until they don’t.

Today there is much talk about this latest round of layoffs creating more stress and more work for the people who “survived” the layoff.  The stress may be high but it can be lowered if the employees that are left are well Cross Trained.

Fast food managers know the cross training principle.  From the moment they walk in a store they are trained to cross train their crew.  I have seen a well cross trained crew handle 30% more volume with half the staff.  My belief is that team members who are cross trained in several functions like customer service, and training, or client marketing and brand marketing, or sales and marketing etc.  are exceptionally more valuable than single purpose workers.  They can handle more issues, work more efficiently, and can squeeze much needed leverage from the system.

If you are cross trained then the company can afford to pay you more or can afford to pay you in the first place.  As a manager you should seek out employees who can do more than one thing.  As a leader you must cross train your team to develop this type of leverage.  If you are a leader of a startup this is a fact of survival.

If you take Jim Collins’ word for it and believe that great companies first ask who getting the right people on the bus, then you place a large value on people.  I agree with Jim that people are a company’s largest investment.

I served as the head of Human Resources for a publicly traded company during 2001 and 2002.  During which time I spent the majority of my time fixing policy errors, hiring mistakes, compensation issues and other abuses of my predecessors.  I learned a lot about people management during my stint with the company and have assembled a list of talent management “MUST DOs” :

• It is not “HR” it is Talent Management (start by placing the right adjectives on it)
• Talent management is every managers responsibility not just three clerks in a corner.
• Discussing people or the team is always a priority – building a great team is the same as building a great company.
• When the team comes to you and tells you one member does not fit – they don’t PERIOD!
• Invest in the talent – training is to people as repairs and maintenance are to plant and equipment – you certainly oil machines – so to do you need to “oil” your talent.
• All salaries do not have to equal but they do have to be equitable.  You better be able to justify salary differences.
• Bonuses must be tied to two things – first company performance and then and only then to individual performance.  It does no good to award personal performance if the company is failing. – The extra credit part of this is that I actually believe that client performance should be first but that is another topic.
• The head of Talent Management must sit on the executive team.
• Once a year for feedback is not acceptable.  Feedback must be given every single day!  Great coaches are constantly giving feedback during the game.  Why don’t managers? They were never taught to give direct constant feedback.

If you take money the people whom you take money from have influence over you and you are not – no matter how much you think – independent anymore.

Today we celebrate our country’s Independence.  It was declared this day but we did not earn it this day.  we earned it over the coming years and we still are earning Independence.

A company is much like the United States.  You can declare Independence but you have to earn it every day by having positive cashflow.  Right now is a horrible time to raise money.  You give up more Independence today than ever before.  Stay cashflow positive – stay independant.  Stay cashflow positive stay alive!

If you are not cashflow positive I challenge you to make your own Declaration today and work for it.  Freedom and Independance is a great thing!

What do lawyers and your mom have in common?  They both want to protect you.  Your mom tells you to wear a helmet, take your jacket, look both ways before you cross the street etc.  All good advice just as your lawyer gives you good advice.  In most cases you should take their advice.

Sometimes moms can be too protective.  My wife once spent 20 minutes dressing my son for outdoor play in the winter.  It took 20 minutes to put on all the clothing, get a second pair of socks, get a hat, a winter coat, a set of gloves, good boots and then finally he was ready to go out.  Open went the door and in 15 minutes he was ready to come in and play with toys inside.  Sometimes lawyers can be too protective as well.

In some companies they call legal, “The business prevention team.”  Too much power is given to a team or person who gets paid to avoid all risks.  At some point it is not worth the effort to play.  This is a terrible problem in that business is about risk and taking risk.  Risks are minimized based on experience, and consideration of the people involved.

So what is the “1 risk” lawyers do not warn you about?  The risk of not trying.  See if you give them too much power over you, like your mom, they will protect you.  You will never skin a knee or worse break an arm.  But I would argue you will never live.  Like life business is about taking risk.  Remember no risk – no reward.

Some risk is ok.  Go ahead jump in.

Remember a while back that the Mission Statement was thought of as the thing you had to have to effectively run your business.   Then they fell out of favor because they became long corporate type meaningless Hooey!

The idea of the Mission Statement is not wrong!  It is not Hooey!  It is just that people lost their way in creating them.  The Mission Statement became this public declaration to be issued in a press release for the world to see instead of a becaon for the people of a company to ralley around.

We must get back to making the Mission Statement be a ralleying cry to have the people in your company gather around.  A single unifying statement that has purpose.  A mission statement is written as a press release.  A MISSION STATEMENT is written for the members of your Tribe to ralley around.  A MISSION STATEMENT can unify your team, help guide their actions, give them the internal strength to say “No” to bad customers.

A mission statement is a scourge.  A MISSION STATEMENT is a Savior!

When do you sell as an entrepreneur?  A few answers:

• When you have the next business idea!
• When you can sell for enough to start your next idea!
• When the thought of the next idea makes you happier than the current one.
• Before the organization out grows you.