Tag Archives: Marshall Fredrick & Co

Goal!

Goal setting is a powerful tool for business success.  Here is why:

First, you and your employees engage in a great deal of activity.  Without specific, short-term, measurable goals, this activity is unfocused.  Add such goals, and you influence both your and your employee’s activity.  You direct it.  You channel it.

Second, people love competitions and games.  By setting goals and measuring progress, you make work a competition.  You make work a game.  This will motivate your staff.

Third, you change what you measure.  You want to change your and your employee’s habits, and motivate each of you to spend your activity on the things that matter.  By choosing a goal and measuring progress toward that goal, you will change behavior.

Fourth, you provide a yardstick to measure choices against.  Once you have specific, measurable goals, you give yourself a powerful mental tool for decision-making.  When someone wants you to spend time or money on something, you can ask whether this will help you meet one of your current goals.  If not, it is easier to say “no”.

How, then, does one go about setting goals?

Set Goals That Matter.  If goals are going to change your and your behavior and channel your activity, the goals had better be ones that really matter.  Many companies get into trouble because they set goals that do not matter, and then their activity is directed into channels that do not really help accomplish long term strategic objectives.

Therefore, goals must be things that, if accomplished, will move the company toward accomplishing its long-term strategic objectives.

When I was hired as Traffic Manager by McDevitt Street Company in Charlotte in 1989, part of my job was to manage the mail room.  McDevitt Street’s headquarters in Charlotte took up two, four-story buildings off the Billy Graham Parkway.  McDevitt Street also had permanent satellite offices all over the country – Orlando, Nashville, Dallas, several in California.  About twenty satellites altogether.  There was a  lot of mail, both between the workers in the home office and among workers in the home office and workers in the satellite offices. 

When I took over, one of the biggest problems with the mailroom was misrouted mail – every day, multiple items of mail when to the wrong satellite office and had to be re-routed, costing days that were, in some cases, valuable.  I could have yelled and screamed and threatened and created an emergency, and that would have gotten the workers attention for a short time, and misrouted mail might have temporarily declined.  I did not.  Instead, I put a poster up in the mailroom.  On one half, it said “Days With No Misrouted Mail”.  On the other half, it said “Most Days with No Misrouted Mail”.  I changed the numbers every day.  I told the group that our goal was ten consecutive days of no misrouted mail.  Once we hit that goal, I told them we should shoot for thirty.  When we hit that, I asked them what the new goal should be.

A year and half later, when the “Consecutive Days Without Misrouted Mail” hit 250, the President of the Company came to the mailroom and personally thanked the mailroom workers for a job well done. 

Set Goals That Are Achievable.  To really be a goal, one needs to be able to achieve it within a determinable time period.  Otherwise, it looses its immediacy and becomes a sort of long-term objective.  Tom Mendoza of NetApp says 90 days is the right time frame.  That’s a decent rule of thumb, but one can set thirty-day goals or even annual goals – the key is to cause the goal to be immediate enough that it affects daily decision-making,

Set Goals That Are MeasurableIf it’s not a game, why are we keeping score?   Goals are only goals if progress toward them can be measured, and you can objectively determine success.  “Dress Better” is not a goal – it cannot be measured and success cannot be determined subjectively.  “Sell more” is also not a goal – even though an increase may be measurable, one doubts if selling $0.01 “more” is really success.  To create that competition/game excitement and really change behavior, your goals must be measurable.

Set Goals That Reward.  Many people will tell you that every goal should not only be achievable and measurable, but also that each goal must have a specific, financial reward tied to success.  This overstates the case.  Napoleon said “A soldier will fight long and hard for a piece of colored ribbon”, and he was right.  Often, recognition and appreciation are enough to create change.  Rewards come in many flavors – financial is just one tool among many.

There is an old army saying “Inspect what you Expect”, meaning that only those things that are measured will change.  Business owners will be amazed by the results if they can master the challenges of setting goals that matter and measuring progress toward those goals.

Have a goal-setting success story: share with the group by commenting.  Need help setting goals and measuring progress?  Give us a call!

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Flying too Low: The Icarus Deception, by Seth Godin

The Icarus Deception: How High Will You Fly?

He instructed the boy as well, saying ‘Let me warn you, Icarus, to take the middle way, in case the moisture weighs down your wings, if you fly too low, or if you go too high, the sun scorches them. Travel between the extremes.  –  Ovid, Metamorphoses, Book VIII.

The theme of Seth Godin’s newest book “The Icarus Deception” is that society has altered thy myth of Icarus.  Society teaches half of the myth – that if you fly too high, if you try to be better than you are, if you dare too much, then you will crash into the sea like Icarus.  “Don’t disobey the King.  Don’t disobey your dad.  Don’t imagine you are better than you are, and most of all, don’t ever believe you have the ability to do what a god might do.”  Godin explains.

But society has left out the other half of the myth.  Flying too low, too close to the waves, is just as dangerous.  “We’ve built a world where it’s possible to fly higher than ever, and the tragedy is that we’ve been seduced into believing that we should fly lower instead”.

For the rest of the book, Godin opens our eyes to the new, connected, possible world.  We live in a world where it is easier than ever to create what Godin calls art – and to get our creative, artistic expressions out there in front of everyone.  Godin sees the new, connected world as an exciting place, a beginning of unlimited potential, and sweeps us up in his excitement.

Godin sees that the old, safe world where if you just went to your job and did as you were told and didn’t make waves you would be able to have a nice house and a car and send your kids to college and retire with a pension and a gold watch is gone.  Playing it safe is no longer safe.  The only choice now is to create.  The only failure is to hide.

Godin’s book is an easy read, if a bit repetitive.  But Godin does a great job of getting us to buy into his vision of the future, and it is a pretty good vision.

I recommend The Icarus Deception.  It is empowering and exciting.  I was already recommending it to close friends before I even finished it.

If you read it, let me know what you think.

Every Run is Precious

Last week, I attended a retirement party for my friend Bill Beckman.  Bill is retiring from a career as a regional manager for an insurance company, but before that, Bill was a high school history teacher and a baseball coach.  As long as I have known Bill (14 years) he has used baseball analogies to explain his business concepts.  It is just how he sees life and the world.

We roasted Bill a little at his retirement party, and the surprise guest of honor was Bill’s son, Chuck – an executive at Coke Europe.  Chuck told the story of a time when he was playing baseball for his dad, and the team, even though winning, gave up a run through a careless error.  Bill, who can be emphatic, was not happy.  He told the boys, in terms that caused his son to remember the event 25+ years later, that “Every Run is Precious”.  And so they are.  A careless error that gives up a run in the first inning seems like less of a big deal than the same run-giving error in the 9th, but it is not.  If you lose 5-6, the run you gave up in the first was just as much a part of their 6 as the one you gave up in the ninth.  Chuck told the group that not only did he remember that day vividly; he also used that lesson to guide him in his business and management success.

In business, “runs” are what wins the game – revenues are runs for your team, costs are runs against you.  You win or lose each month or quarter or year depending on that critical final score.

As in baseball, every run – for you and against you – is precious.  If you “loose the game”, the cost you carelessly incurred on the first day of the month is just as much a part of the score as the one you incurred on the last day of the month.  The revenue you let slip away in January matters as much as that lost opportunity in December.

The real power of this analogy is in paying attention to the small things, and empowering your team.  “Every Run is Precious” means that the person who can cut a small cost is as important to the overall success of the team as the person who can cut a large cost.   You may have an awesome pitcher who mows the opposition down, and a golden gloved center fielder who can run like the wind, but if the 3rd Baseman boots an easy grounder and gives up a run, and you lose 5-6, that one error that gave up that one precious run mattered.

It’s ten o’clock.  Closing time.  You have just locked the door and turned off the “Open” sign, when a man dashes up and tries to open it.  “I just want to buy a chess set” the man says, through the door.  You are tired – it has been a long day and home is beckoning.  “We’re Closed” you shout back through the door.  The customer walks away, dejected.  The sale is lost. The run not scored.  Bill Beckman wants to shout at you “Every Run is Precious!”   

Your business is a team, and everyone needs to have their head in the game.  Every one on the team matters, because every run is precious.  Chuck told me he uses the story and its lesson to motivate his team to seek cost cutting measure, no matter how small, and no matter who suggests them.  “We are not going to lose 6-5”, Chuck tells them.  You can use the story to motivate your team to open that door at ten o-clock, and sell that chess set.  Because every run is precious, and teams that understand this win.

Fly Three Mistakes High

My über-smart friend Phil Yanov was giving advice to entrepreneurs the other day – about start-ups.  Every founder will make at least three mistakes, Phil said, the key is to make those mistakes survivable.  Fly three mistakes high.

Flying three mistakes high is an aviation term.  When a pilot makes a mistake while flying, the plane looses altitude while the pilot corrects the error.  A pilot should, the adage goes, fly high enough to make and correct three mistakes before he runs out of sky and hits the ground.[1]

How high is three mistakes high?  That depends on the pilot and the aircraft.  Experienced pilots correct mistakes more quickly and loose less altitude per mistake.  Some aircraft glide better than others.  Knowing how high “three mistakes high” is, for you, is the trick of it.

How does this apply to start-ups?  Start-up mistakes cost time and money.  And, since time = money, all mistakes cost money.  What kinds of mistakes to start-up entrepreneurs make?  Let me count the ways:

  1. Hire the wrong person, or don’t hire the right one.
  2. Hire too many people, or not enough people.
  3. Rent the wrong location, or rent the right one for too much rent, or for not a long enough term, or for too long a term.
  4. Buy too much equipment, or don’t buy enough.
  5. Set prices too low, or too high.
  6. Open for the wrong hours.
  7. Buy the wrong inventory, or too much of the right inventory.
  8. Pay too much or anything, or even for everything.
  9. Partner with the wrong person.
  10. Pay too much attention to the business, and not enough to developing relationships with customers.[2]

If all entrepreneurs are going to make three mistakes, and if each mistake is going to cost you time and money, then you fly three mistakes high by limiting your initial bets to bets that you can loose and survive.  In other words, early on it’s important to limit your exposure on any decision to something survivable if you are wrong.

How high is three mistakes high for you?  That depends on how well attuned you are to your business.  Collecting data, and performing analysis on that data, can give you a clue that something you are doing is not working.  The sooner you catch a mistake, the less it costs – the less altitude you loose.  More experienced businessmen, like more experienced pilots, should loose less altitude per mistake because they will catch and correct the mistake sooner.

For example, I once hired the wrong person.[3]  The worker took too much time off, always had some malady, and asked to borrow money for emergency after emergency.  The stories were tear-jerking.  The reasons were compelling.  The worker was getting nothing done, and my business was paying and paying. We continued to pay the worker for days taken off long after all sick leave and vacation were exhausted.  Finally, I had enough and terminated the worker.  Months later, I heard from an acquaintance that had hired this worker after me.  He has kept the worker on much longer, and had been sucked into loaning money he would never get back.  We both made the same mistake – we hired the wrong person.  But he lost more altitude (money) than I did, because he did not catch and correct the problem as quickly.

Businesses, like aircraft, also effect how high “three mistakes high” is for you.  A mistake that interrupts the productivity of a capital and labor-intensive business may cost a great deal of money per day or even per hour.  Make a mistake running that business and you had better catch it quickly.[4]  Other businesses may only burn capital slowly, and can glide along without loosing too much cash even as the entrepreneur corrects errors.  Knowing how well your business can handle mistakes is important.

Finally, in order to fly “three mistakes high”, you need to know your altitude in the first place.  How much time and money do you have?  Undercapitalization is one of the most common reasons small business start-ups fail.  Having the capability of “flying three mistakes high” begins in the pre-start up planning phase.  Successful start-ups plan for mistakes, and try to make sure they have access to capital to fly through the mistakes, and into the blue skies beyond.


[1] Another adage says “It’s not the fall that hurts, so much as the sudden stop at the bottom.”

[2] The guy who is in the back baking the cookies, and not out front creating a great customer experience, for example.

[3] Ok, I have done that at least five times.  That I will admit to.

[4] Try making a mistake that shuts down a customer like BMW’s production line for an hour to see a living example of an extremely vertical glide path.

The Five Phases of the Professional Business Cycle

The professional business cycle has five phases:

  1. Originate (Bring in the Work)
  2. Perform (Do the Work)
  3. Deliver (Get the Work to your Client)
  4. Bill (Send a Great Invoice)
  5. Collect (Get Paid!)

Each of these five phases are happening almost every day.  Certainly they should be happening at least one a month.  To create success, the professional should focus on each phase, but most professionals focus on only a few and leave the rest to chance and circumstance.

Bringing in the Work requires a good reputation and the opportunity to pitch for the Work.  Often, professional referrals come from word of mouth from past, satisfied clients – so performing well in phases 2-5 will help with phase 1.  Sometimes, though, even for busy, successful professionals, keeping enough new work coming in can be their biggest challenge.  Rather than leaving phase 1 to chance, the successful professional can help matters by actively creating good content (writing articles or blog posts, or even a book, so that people who are looking for professionals in this newly connected world can see the professional’s expertise and willingness to help in a graphic way) and by networking.  By networking, I mean getting out of the office and going to events where potential customers are gathering for the purpose of networking and meeting people and talking to them.  Teaching a seminar, for example, is a good way to both create content and network.  The point is to be active and intentional in the business of bringing in the Work.

The Work must, of course, be done.  And done well.  Ironically this is both the thing most professionals spend the most time on, and the thing they can most easily delegate.  Most professionals do not need help with knowing how to do their work – if they do perhaps they need more time working as an assistant to a more senior professional in their field.  However, professionals who are very good at phase 1 may consider hiring other professionals (who are not as good at phase 1) to do the Work they bring in, under supervision.  When delegating the Work, it is important to supervise the delegee, both to ensure that the Work gets done timely and to ensure the Work is done to the expected standard.

Delivering the Work would seem like a part of phase 2, and perhaps it is, but I treat it separately because I believe the delivery requires its own intentionality.  Not only must the completed Work be delivered timely (completed Work sometimes sits in limbo for days or weeks if not monitored), but also some thought should be given to the method of delivery.  Can the completed Work be e-mailed to the Client?  Should it be?  When should it be delivered as a written document, or delivered in a face to face meeting?  Does the delivered product look professional?  Like everything in this world, presentation matters.  When a customer buys a Kia, they expect to pick it up at the store with a minimum of fuss.  But when a customer buys a BMW, they are invited to receive it at the factory, with a full red carpet delivery.  Presentation matters.

Billing for professional Work is the opposite of doing the Work – it is the phase more professionals spend the least time on, and delegate the most, but it is the phase that is the least easily delegated.  Or, at least, delegated effectively.  The bill is, itself, a marketing tool and a reputation builder.  Consider the following example:

Activity Time Rate Total
Hearing – Judge Anderson 5.5 Hours $250 per Hour $1,750

Compare that with:

Activity Time Rate Total
Meet with Client and Local Counsel.  Discuss upcoming Motion for Summary Judgment and Prepare for Hearing. 2.5 Hours $250 per Hour $625
Lunch with Client and Local Counsel, discuss afternoon hearing. 1.0 Hours $250 per Hour No Charge – Thank You for Lunch!
Hearing with Hon. G. Ross Anderson on Motion for Summary Judgment. 2.0 Hours $250 per Hour $500

Both bills cover the same amount of time.  There are, however, two differences that are important.  One is that the second bill is more detailed.  It probably could be even more detailed.  The client will see and pay this bill some time after the hearing, perhaps as long as a month later.  Memories fade.  Often, a bill will include items the client was not present to witness.  Detail lends credibility.  Detail makes the client feel like they have gotten value for their money.  Detail matters.  The second thing is that all business, including professional business, is at heart really about relationships.  Clients, like all of us, want to be treated well.  Giving no charge for the lunch the client treated the professional to is courteous.   Yes, it cost the professional $250.  But that hour was more about phase 1 than phase 2, even if the Work was discussed over lunch.  When the client gets the bill, you do not want his next conversation with his friends (your potential clients) to be “he charged me for eating lunch, and I paid!”.

In my experience, Getting Paid is the hardest of the phases.  The best way to do phase 5 is to do phases 1-4 well.  But there are always clients that, for one reason or another, do not pay their bill timely.  This is another area that is often delegated, but really should not be.  When a client does not timely pay their bill, the professional should get involved sooner, rather than later, to determine whether there is a problem.   The matter must be approached gently – remember this business is about connection, trust, and a personal relationship.  Sometimes the failure was an oversight, or perhaps an embarrassing lack of cash flow on the client’s part.  What is needed is a reminder or question that does not assume hostile intent.  If the problem is that the bill was unexpectedly large, or that the client does not feel he got value, then it is best to deal with that personally and professionally and timely.  Sometimes, a disgruntled client can be converted into a happy client by sensitive and timely attention to their issues.  Sometimes, unfortunately, there are those clients who are just out for a free lunch, and will take as much as they can before moving on to the next provider.  Identifying and such people and terminating the professional, relationship sooner, rather than later, is important.

Being conscious of the five phase business cycle, and approaching each phase with intent, will help any professional to be more successful at their Work, and to work with happier, more satisfied clients.  Which part of the business cycle do you need to work on?

Act Intentionally

Become_a_SponsorOne of the keys to being a successful entrepreneur (or probably a successful anything) is to act intentionally.  We are faced every day with choices of what to spend time and money on.   It is easy to let other people or circumstances dictate what we spend time and money on, but to be successful, you should make the decision intentionally.

The overriding goal in any business is, quite simply, to get paid.  You should spend your time getting paid.  But one does not always get paid in money.  One can also get paid in expertise, in reputation and in referrals.  In order to effectively prioritize your time and efforts, you should know what each of those is worth to you, and how they exchange.

The successful entrepreneur needs expertise, reputation and referrals.  Your expertise in your chosen industry or field is the backbone of your success.  Your reputation helps you turn referrals into customers.  Referrals let you put your reputation and expertise before a potential client or customer – and by referral I mean someone with a problem you can solve and the money to pay you to solve it.  You must have each of these – expertise, reputation and referral – in order to by in the position to solve someone’s problem and have them pay you to do so.

The successful entrepreneur should have some idea how his money and time translate into expertise, reputation and referral.  For example, you might decide your time is worth $300 per hour, and that a good referral is worth $100 to you.  If you know that, then you can decide whether sponsoring an event for $500 is worth your money, or whether attending an event is worth your time, based on how many referrals you expect to gain.  You can also assess the success of the sponsorship or event based on the number of referrals you received, and decide whether to participate next time.  Finally, you can make goals for yourself at the event – in our example, if you are going to attend a three hour event, you should have a goal of getting introduced to three good prospects there.  This allows you to act intentionally, and increases your chance of success.

The entrepreneur who knows what his time and money are worth in terms of expertise, reputation and referrals is able to act intentionally.  The entrepreneur can better manage his time and involvement, rather than letting circumstances or others dictate for him.  He can better evaluate the success or failure of events he does get involved with.  Spend a little time thinking about the value of your time, money, reputation, expertise and of a referral, and apply those measures next time you are asked to sponsor an event or participate in an event.  I believe that by acting intentionally, you will have better results, and make more money.