We all have scarce resources

Omega Pocket Watch (Alexander T Carroll)

I comes as no surprise that we all have scarce resources. Even the US Federal Government has scarce resources as we certainly know. While Bill Gates or Warren Buffett have huge sums of money available to them, they, like we, have exactly the same amount of one scarce resource; time. Every week, we all have 168 hours to spend as we see fit. If you are very rich, you can have legions of assistants to off load things that take your time, but for the most part, they have the same amount of time that the poorest have. This is precisely why Steve and I started this Opportunity Quandary blog; to assist those who were chasing too many business opportunities, and squandering their scarce time and other resources in their business. Bill and Warren, based on their success, prioritized correctly and in the process gained a lot of wealth. Today’s blog is a personal checkup for the individual, although it will also help your company. How are you spending your scarce resources of time and money? Perhaps it is time to take stock in that and see where your resources go. Your company CFO, controller or accountant accurately details how your money is spent in your company. Therefore, this blog article is focused just on the aspect of time. Do you know how you are spending your time?

Here is an exercise for you. Take a week and log how you are spending your time. Log all of the 168 hours. How much time do you spend in company meetings, sleeping, eating, traveling, emailing, listening to music, with your family, delegating, exercising, dressing….. well, you get the idea.  Everyone’s list will be different. Come up with a list that is actionable by you. Do you multitask? Most of us do these days, in an attempt to stretch those 168 hours. Go ahead and make an honest assessment of how well you do those simultaneous tasks. Current research as reported in Scientific American, indicates that the mind can often manage two tasks simultaneously, but not three. So if you listen to music while reading your email, go ahead and list those two separately.

After a week, look at how you are spending your time. Are you spending your time wisely? Look and see if there are ways you can revise the way you spend your time to make your week more productive. Are you accomplishing what you need to do? If not, where can you make changes in your time allocation to make your goals easier or faster to accomplish?

And if you have now freed some extra time, we’d love to hear from you on what you learned and how you improved. Feel free to leave us a comment or two about that.

 

Shooting at the flock or why aiming at all the ducks gets nothing but sky.

You are chasing too many opportunities. That is impossible, there is no such thing as too many opportunities! Check around your company. Are you chasing one opportunity, only to see another possibility that appears to be just a little better? Do you have so many opportunities that you can’t even get one of them to market let alone all of them?
Everyone knows that new products and services are usually the fundamental driver of a company’s growth. The pressure to grow your business is huge. Therefore, companies often get trapped into investigating too many ideas in a cursory fashion. As consultants, we often see many companies trying to do too many new product projects at one time. It’s similar to duck hunting. If a flock of ducks comes over your blind do you shoot into the flock hoping to shoot down a number of ducks or do you take aim at one duck, shoot, aim at another, shoot and so on? Good duck hunters know that you will get more ducks by aiming at one duck at a time. So it is with new opportunities in organizations.
We have talked with individuals within companies ranging in size from the divisions in Fortune 100 companies to small businesses with a few million in sales. The magnitude of the issue is different with those extremes, but the problem is basically the same. Management is under significant pressure from a variety of sources to get new products out the door. There is an almost universal belief, that more is good and much more is even better. Time to market is another business imperative. So faster is better. This more and faster mentality is taking place in the face of less to resources. All of this is fanned by what we call Digital forest fire. See our Digital Forest Fire blog: digitalforest.wordpress.com

The 3 biggest causes of the Opportunity Quandary

There can be many causes of the opportunity quandary, where organizations and individuals are faced with and begin action on more “opportunities” than they can handle simultaneously.

The first is technological change. Rapid advancements in technology have allowed us, and our competitors to do more things to grow our business, or improve productivity than we ever have been able to before. Often these actions do not replace others that we are doing, but merely add more to what we are already doing. Advancements in technology also open up new product opportunities that your business either adds or competes with.

The second is the state of the economy. Our economy has now been in a recession for more than two years and for most businesses, this has meant a decline in sales and profits. This in turn, has caused many businesses to try to grow by adding products and services that are different from their core business. Add too many, and your company can fail at all of them, or worse yet, your whole company could fail.

The third is the natural human nature of wanting to grow your business fast, possibly faster than your organization can adapt. We all want our businesses to grow, right? We want to become more successful, have more employees, more sales, more respect in the business community. These internal pressures can cause you to take on more than your company can handle at one time, and threaten the day to day business.

In the next few blogs, we will take a look at these three top causes individually, ways to recognize when we are doing things that are detrimental to our organizations. We will also take one topic, and create a blog especially for that particular aspect of the opportunity quandary.

We invite our readers to share their comments, experience and questions about the opportunity quandary with us.

The difference between an Angel Investor and the Venture Capitalist

We really like the following article that we saw and and want to share this with our audience.
By COLLEEN DEBAISE

Adapted from THE WALL STREET JOURNAL COMPLETE SMALL BUSINESS GUIDEBOOK (Three Rivers Press).

Venture capitalists generally don’t provide seed or start-up financing, as angels do. VCs tend to get in later in the game, supplying high-growth companies with much larger chunks of financing—on average, more than $7 million a deal, according to the University of New Hampshire’s Center for Venture Research.
More

“What’s an Angel Investor?”

“How to Win Angel Funding”

Tips for Finding Angel Investors

Unlike angels, venture capitalists do not invest their own money—a common misconception. Instead, VCs typically invest money from institutions, such as big pension funds or college endowments, and, in some cases, high-net-worth individuals. VCs, because they have a fiduciary duty to maximize returns, typically demand board positions and veto rights to exert greater control over a company’s direction. Angels, on the other hand, are more likely to play an advisory or mentoring role to a company’s founder or principals.

Certainly, angels and VCs are alike in many ways. As professional investors, angels and VCs look to invest in companies in prosperous industries, and both have strict investment criteria: a venture needs to have a solid business plan, strong management team and viable exit strategy before it’s considered for equity financing.
[300venturecapit]

Five Facts About VC
Source: National Venture Capital Association, 2007

1. The top ten states for VC investment are California, Massachusetts, Texas, Washington, New York, Pennsylvania, Maryland, Florida, New Jersey and North Carolina.

2. In the last 35 years, venture capitalists invested more than $441 billion in more than 57,000 companies in the United States.

3. The clean technology sector, which includes alternative energy, pollution control and clean power supplies, has had the most venture capital investment growth in the last five years.

4. Since 1973, close to 3,000 venture-backed companies have gone public on the U.S. stock exchanges. During that same period, more than 4,000 venture-backed companies have been acquired for their innovations and business models.

5. The majority of venture capitalists were once entrepreneurs, scientists or engineers themselves before they began investing.

Will the iPad affect your business?

For those in the throws of an opportunity quandary, where you have too few resources chasing too many current opportunities, the iPad represents yet another “distraction” to your business if you deal with customers that potentially can use it. I (Bob) purchased one for my wife on the first day they were available. All four of our family members have an iPad Touch and we love them. But we all found this device is a great new addition to the family. Initial sales of the iPad, reported in the USA Today paper, which I read on the iPad, were above expectations and Apple sold out its initial inventory and delayed shipments abroad.

So how is this new product going to impact your business if at all? For ours, one of the first activities I did was take a look at how our web site www.theluciditygroup.com looked. It was workable, but we will probably make some minor tweaks as the iPad population increases. (It should be noted that we did not make or support iPod or mobile web pages for the web site as we do not think our customers will access pages on a mobile device.)

In essence, our consulting business will not be affected by the new device. But our forthcoming book, will likely be to a great degree as an eBook reader. Already we need to consider digital downloads on the Kindle, the Nook,  and similar readers. The new iPad is also a book reader, and we will likely want to make sure that our book is available on iBook as well as Amazon.com. Of course, it will affect our competitors books as well, and we need to pay attention to what our competitors do.

But for many businesses, the iPad is a big deal. If your business already writes software for the Mac or iPod, then this is something to look at. Some big businesses already had to bet on the device. When I got my device, the USA Today app was already written, as was one for Weather Bug, AP, and Netflix. These companies had to focus on this business segment before the first iPad was sold. It is a gamble, but one that likely will now prove to be profitable for many of them. They focused on the iPad, and at the same time likely did not focus on the noise surrounding other similar devices.

And this points out another issue with focus. As we have stated before, focus is essential when operating a business and expanding due to limited resources. But failure to focus on the right thing is just as lethal to the business. So how do you know you have the right focus? Well initially you may not. If you had to focus on the iPad versus the Kindle or the Nook for your business, you could look at how many of your customers (not the whole population that bought a device) are using this technology in conjunction with your business. And of course, look at the number of customers NOT using this technology. This will give you some idea of the trends over time. The bigger the bet your company makes on a situation like this, the more important it will be to check your focus.

Steve and I would like to solicit your input on our blog. What do you think of the content we have published so far? If you have comments, questions or criticisms, we’d like to hear from you. If you have ideas for future blog subjects, please let us know. We do not want this to be a one way conversation.

Lessons of Toyota Motors and their focus on product quality

Toyota is in the headlines these days, and not in a way that Toyota would like. We (Bob’s family) currently have 3 Toyotas. Why we have them is because of brand loyalty. And the reason we are brand loyal is because the nameplate has meant quality to us. We value a car that is reliable and does not leave us stranded. And for our family, Toyota has delivered on that promise. Toyota has focused their brand image and indeed the company itself as a quality manufacturer of automobiles. This focus, developed in the early days and refined over decades, helped Toyota Motors take on and eventually surpass competitor General Motors. It was the right focus for them.
As a business owner, you can tout quality all you want in your marketing materials, but delivering a quality product or service, year after year requires a consistent focus from the very top to the very bottom of an organization. There are no shortcuts. Toyota’s processes and focus on quality have been adopted by other companies, and those companies have benefited from them. Books and instructional courses extol the benefits of adopting some of Toyota’s quality systems and processes. We used parts of Toyota’s quality systems, such as Kaizan process of continuous improvement at both 3M and Imation. The reason – they worked.
Another well known Toyota process, the A3 process, is designed to understand and fix a problem or to implement an improvement. The A3 process is well known in engineering and manufacturing management circles. The A3 process focuses all on the issues needed to solve a problem. One of the steps, diagnosis or cause analysis, is designed to get to the root cause of the problem. This is done by the Five Whys, another process developed and implemented by Toyota. This is essentially repeating five times of why a problem occurred to get to the root cause.
Example: Chris was late for work. Why? Because Chris had car trouble. Why? Because the car ran out of fuel. Why? Because the fuel gauge did not work. Why? Because Chris forgot to ask to have the gauge fixed last time I brought the car for service. Why? Because Chris did not write down what was needed to have fixed as they came to attention so that there was a complete and accurate list of problems to be fixed at service.
Stopping at the first why, would indicate that the problem was an unreliable car, when the real cause was a lack of organization on car problems by Chris.
This system of asking why until we get to the root cause indicates a fundamental issue with focus that must be addressed. That is, a consistent sharp focus alone will not solve your problems. The focus must be aimed at the right place.
For the opportunity quandary, where organizations try to focus on too many new opportunities, the key to success is to find that right aiming point. Or to put it another way, what new opportunity is the best, right now, for the company to focus on. You may think that all are equal, but a closer examination will find that there are differences, and one should edge out the others. And if they were equally good, then any one of the top ones would do, right?
Some of you reading this blog might say: “How can you mention Toyota and quality with all of the problems they have today?” Or “How is it that Toyota has all these great systems and these processes, such as A3, apparently failed them?” These are good questions and the answers could fill another blog, but the problems Toyota has today with the current recall of millions of cars and the situations they are involved in are so complex that simple processes of the 5 whys cannot solve them. That does not mean that these processes are bad, but simply that they do not solve or cover all possible situations.
In summary, when one is faced too many opportunities, the business owner must focus on the right opportunity, the one that will grow the business successfully, and that focusing on the wrong opportunity is no better than not focusing.

I twittered and emailed about how I linked our blog to Facebook and Linked In….whew.

Suppose we could transport people from just 20 years ago to today. And suppose we could have them look at our lives and how they have changed. And especially our work lives. I have for years told my retiree friends just how hectic our schedules are today and they look quite different from people who worked as little as 10 years ago. Oh, we had email back then. But it did not dominate our lives. We dealt with SPAM, but there was not a lot of it compared to today. But the real difference is all of the social networks that have come to the forefront. In some ways, it reminds me of the early days of the Internet when we all needed to be on the Internet, but did not have a clue as to how to leverage it. I think the same is true today, and worse, it is defocusing us and our marketing budgets. Some of the new social media sites have come to the forefront: Facebook, Twitter, LinkedIn, and WordPress. But there are dozens more, just a heartbeat away from them, and thousands more just a bit past the second tier. So what do you do? How do you get noticed? What should be your marketing mix for your company? How do you focus? Steve and I do not have all the answers, and we are leery of anyone that says they do. The online world is just in too much state of flux.
So what is a good company executive to do? The words of advice are the same as before: FOCUS. And to do that you must AIM. And to aim at the right spot, you need to do some digging. Who are you trying to reach and why? Where are they likely to look for you or be influenced by you. Each of the various communication methods has a return on investment. You should know what it costs and estimate your return based on the activity from your customers. In some cases, clever linking of these tools can make some of them free or almost free. And be prepared to change the mix as you learn what works and does not work.
Remember that your audience is having the same problem deciding where to keep their eyeballs nowdays. Email takes up a lot of the time, so do search engines. Some are heavy into LinkedIn, others love Facebook and spend their time there. All are bombarded with commercial messaging at every corner of the web and their personal life. How do you cut through the noise and how do you make an impact on present and future customers? It certainly is not by jumping on the latest social media trend. Find the few that make the biggest difference, that make your ROI targets, and Focus on them.

So what is working for you? What has not worked and why? Are you having difficulty focusing because of all this new stuff? Let’s hear from you on this. Leave a comment.
Robert Herman