• Categories

Past Performance is No Guarantee of Future Reward

[picapp align=”left” wrap=”true” link=”term=stock+market&iid=7237024″ src=”d/5/e/2/High_angle_view_6dfe.jpg?adImageId=9873992&imageId=7237024″ width=”234″ height=”234″ /]This disclaimer is quite popular in adverts for stock portfolios and precious metal investments: past performance is no guarantee of future reward.  So true.  Have you considered that it is also true of your business?

You’re only as good as your last iteration.  Or hit song.  Or hit movie.

You shouldn’t rest on your laurels.  Your next “big thing” may bomb.

Here’s a good one:  There is always someone new who’s never heard of you or your products or services.  How do I know this?  The population of the planet is over 6 billion souls.

Our businesses, if they are currently enjoying success, can be something easily taken for granted.  Especially if a business is doing well in these times of recession.  But taking something for granted means that you aren’t really seeing it.  It’s like having a painting hanging on your living room wall.  Perhaps when you first saw it at the gallery you loved it.  It either conveyed an emotional meaning to you…or, as often happens, it simply matched the color scheme of your home.  Either way, you bought it and hung it in a place of visual prominence.  Over time, as human nature goes, you cease to even see it.  We get comfortable when things go well.  This getting comfortable can blind us to dangers and new opportunities.

I’m re-reading Michael Crichton’s The Lost World for about the fifth or sixth time.  [I get in these moods and love to read again the works of favorite authors.]  In the early part of the novel Crichton’s character of Ian Malcolm [played so wonderfully by actor Jeff Goldblum in the movie version ] gives a lecture having to do with chaos theory and the “edge of chaos.”  The character says [on page 4 in my hardcover edition], “…We imagine the edge of chaos as a place where there is enough innovation to keep a living system vibrant, and enough stability to keep it from collapsing into anarchy…if a living system drifts too close, it risks falling over into incoherence and dissolution; but if the system moves too far away from the edge, it becomes rigid, frozen, totalitarian.  Both conditions lead to extinction….”  [Great stuff!]

Said by me, simplistically – if we let ourselves become too comfortable with our current success then our businesses can cease to be alive and “vibrant.”  I think it is very interesting to liken our businesses to a living system because without constant growth and change, our businesses can indeed fall into extinction.  Sometimes staying on that edge means:

  • listening to our customers – what are they telling us about our products and services?  Is there something we can do better or provide in a better way?  Are we not offering a product or service that our customer could truly use in addition to our current offerings?
  • listening and watching the marketplace – trends shift; people may love purple widgets this year but will abandon them for yellow ones the next.  We have to constantly be aware of shifting needs in the marketplace.  This also means in times of recession we should be aware that perhaps our customers aren’t buying, not because there is a problem with our products/services, but because the customers simply don’t have the spendable income.  What can we do to adapt?
  • watching for new opportunities – new technologies come out all the time; how can we adapt them to our business?

Be thankful and grateful if your business is currently showing a profit…or at the very least breaking even…right now.  However, also be constantly working on and revising your business plan so that you are not caught unawares of new opportunities, trends and technologies.

Share

Advertisements

Make the decision – be a leader

[picapp align=”left” wrap=”true” link=”term=sailing+boat&iid=7204341″ src=”1/e/5/9/Outdoor_Sports_1706.jpg?adImageId=8930591&imageId=7204341″ width=”234″ height=”373″ /]Before you set sail it is probably a good idea to know where you’re going.  In fact, it is probably an even better idea to know if a sail boat will get you there faster or more comfortably than a train.  Or an airliner.  Or even an automobile.  Before you set sail you have to decide if sailing is the best use of your time.  You have to decide if leaving on a Tuesday is better than on a Thursday or if you should sail solo or with a friend.  Lots of decisions to make before heading out on a journey.

Business is not different than sailing in this regard.  Every business has a leader and the leader must make decisions regarding direction and timing.  Oh, he or she gets input from everything and everyone from the Farmers Almanac to the bookkeeper.  Shall you travel north next Tuesday? Well, only if the weather is good and the chores are done and you have the extra cash.

Leadership involves making decisions. And making a decision is the single most difficult task a leader must do.  Let’s look at a couple scenarios.

Scenario One: you and two buddies have a fantastic idea for a business.  You thought up a clever gizmo that will revolutionize the internet and your two friends have some money to throw in and some expertise.  One friend is great with numbers and the other is a super salesman.  However, the business dream is yours and mantle of leadership falls on you.  You get input from your friends and research you’ve done, but you have to decide:

  • what the business will look like
  • when to launch the business and where
  • what aspect of the gizmo to spend this year’s budget on
  • where to best use your sales efforts
  • how to spend your capital

None of these decisions is easy and the business will go nowhere until the decisions are made.  But it’s the making the decision process itself that causes the most stress and anguish.

Scenario Two: you and your buddies have been in business now for five years and are making an annual profit.  You are able to offer your employees good benefits and you were able to finally take a vacation.  One of the friends asks you: now what?  Now where do we go with this gizmo?  They are wanting to know if you want to take the next step of growth in the business through innovation and expansion into new markets.  There is risk involved.  What will happen if you take on the added expense of research and development and speculation?  What would happen if you don’t?  As the leader you have to decide:

  • how big you want your company to be
  • how diversified you want your product offerings to be
  • if the risk of expansion is worth the cost, time and effort

To be a good leader, you have to decide to lead.  What that means to a business is:

  • the leader holds the vision for the business – ‘this is who we are, what we stand for and what we look like’
  • the leader sets the direction – ‘this is where we are now and where we’re headed and hope to be in ten years’
  • the leader is willing to alter course – this could be necessary due to outside economic factors or due to rising opportunities
  • the leader is willing to make the decision to hold or fold [in this lies the interesting thought that maybe a business has a life span…when is it time to retire not just the human element, but the business itself? – that’s grist for a whole ‘nother post]

“…Management is efficiency in climbing the ladder of success; leadership determines whether the ladder is leaning against the right wall….” Stephen R. Covey.

Even a home-based business person has to shoulder the daily decision of upon which wall to lean the ladder.  And sometimes those decisions just aren’t easy to make.  However, once made, it’s all management the rest of the way.

Share

What’s your management style?

If you have a home-based business as I do, you wear both the leadership hat and the management hat.  You are the CEO, CFO, and every other capital letter combination there is, as well as middle management and the hourly help.  But, as in any business, you do have different functions depending upon which hat you are wearing.

The leadership role is the visionary role.  When you are wearing your leadership hat you are setting the vision and direction of your business.  You’re answering the “why am I doing this” type of questions and the “where do I want to go” type of questions.  With this hat on you ask yourself where you want to be five years hence and question how you’ll get there.  You devise the Plan.  Then you present the vision and the plan to your management role.

The manager of your business gets the job done. The manager makes sure you fulfill the vision and gets the business to its end destination by doing the work of the business on a day-to-day basis.  So, what is your management style?

I thought about this because someone told me recently that they have changes at their workplace they are not quite happy with.  It has something to do with putting all the programmers into one big room together…no individual cubicles or working from home anymore.  I wouldn’t like to work in that environment…it made me think about the way I do like to work.

I’ve had jobs where I’ve worked under a micro-manager.  This type of manager hovers over you stifling creativity and initiative.  This type of manager actually hinders workflow due to the constant second-guessing and checking that they do of a person’s work.  I’m of the opinion that if you hire qualified people and give them the tools for the job and the parameters of the tasks that you should then get out of their way and let them work.

Another type of manager for whom I’ve worked is the absentee manager.  This one is even worse than the micro-manager.  In this case I was given practically no training and very few tools.  Right off the bat I had questions about direction and policy and basic how-tos but the manager was no where to be found…until time for the task-at-hand to be completed at which point the manager would show up and be up-in-arms about why the task was not completed in the prescribed manner.  This type of manager is the “can’t win for losing” type.

The very best manager I worked with actually got to know me.  This manager found out that I work best independently and that I need a window.  This manager gave me the necessary training and was available when I had questions.  I had access to the necessary tools and support materials.  The direction for the project was clear and understandable.  I could actually work without someone hovering over my shoulder every minute and I could work knowing that if I had a question all I had to do was knock on the manager’s door.

Now I have a home-based direct selling business. I’m the only employee.  I’m the boss and the manager and the worker bee.  With my leadership hat on I developed my vision and direction…I know where I want to be in five years with my business and I devised a plan to get there.  With my manager hat on I work the plan.  I know my inner worker bee needs independence and a window so as manager I arranged my home office to provide the window I need and the privacy I require.

This may not be a comprehensive scholarly look at management styles, but my point to make is that the person with a home-based business needs to clearly understand the division of labor between leadership and management.  A home-based business needs a vision and direction and clear plan of action; it also needs the daily “doing the work” to complete the plan and realize the vision.  Figure out what kind of worker you are and manage your business to optimize your efforts.  It will help you to achieve your vision.

Add to FacebookAdd to NewsvineAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to Ma.gnoliaAdd to TechnoratiAdd to Furl

Leadership important for home-based business too

According to his book, “The 8th Habit – from effectiveness to greatness,” author Stephen R. Covey  says that former British Prime Minister Margaret Thatcher embodied the  three prime ingredients of a great leader : vision, discipline and passion.

  • “…she was passionate about urging people to assume the discipline of personal responsibility and to build self-reliance, and she was passionate about bolstering free enterprise in her country. During her tenure in British politics, she helped lift Britain out of economic recession….”

A business organizational structure must include leadership as well as management to find success in achieving goals.  Leadership supplies the goals and management fulfills those goals.

It takes vision to be a leader...for those of us with a home-based business, we had to start with the vision.  There was something needed or wanted  that led us to search out this type of opportunity.  Things that spark vision could be:

  • needs: bring in immediate income to meet basic survival needs such as a current mortgage, utilities, food and transportation and health care
  • needs: augment current income to allow for caring for elderly parents, or allow a spouse to quit work to be with children or help a child through secondary education
  • wants: enough income so that the work week hours can be scaled back and time with family increased
  • wants: financial independence so that  freedom of choice becomes the issue…not force by necessity
  • wants: be debt free

The initial vision could be as simple as wanting to take a vacation every year…starting a home-based business could bring in enough extra money to allow a family to do that. 

If the vision is strong enough, important enough then you can manage your business accordingly.  The home-based businessperson is both leader and manager.  In your leadership role you establish the vision for why and what you do with your business and provide discipline and passion which then in your role as manager you make come to pass.

Vision: setting the reasons, the why, the dream, the goal

Discipline: the work – keeping on track, staying true to your course and set objectives

Passion: the excitement and enthusiasm, the life of your business

If you will be a leader with vision, discipline and passion in your home-based business can success in reaching your objectives be obtainable?  I think so.

*today I had “help” with this post by George, our parrot.  As you can see he is just so “helpful!”

img_0598 img_0599

Add to FacebookAdd to NewsvineAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to Ma.gnoliaAdd to TechnoratiAdd to Furl

Hard question about CEOs and big bailouts

As the owner of a home-based business, I guess I could say that I am the Chief Executive Officer.  I am involved with a direct selling income opportunity that has potential for unlimited income and residual income…that’s “potential.”  What salary would I give myself?  And, if business were down, would I ask the government for a bailout?  Well, no, because my business has no employees.  There is no one to whom I would give a pink slip.  If my business is down it is me that receives reduced income.  For me, as CEO of my business, the “buck” literally stops at my desk and is dependent upon my efforts. 

I have always been of the opinion that the Chief Executive Officer of a company and the chairman of the board, the entire board for that matter, ought to be the vision makers and vision holdersLeadership means guiding.  As CEO – this person in this position should be guiding his company [to use maritime metaphors] through the seas, watching for squalls, finding safe harbors and looking for prosperous landfalls in which to do commerce.  Leadership positions are special.  They are meant to be the light which illuminates the company so that management and the workforce can make the vision reality.

But I’m not seeing this in CEOs.  The huge compensations they are paid seem to be insulting in the face of the layoffs occuring through the country.  Good grief, the chief executive officer of the United States – an entire country, not a company- doesn’t earn anything near the typical marketplace CEO.

There is an interesting viewpoint article  online at businessweek.com by Edward E. Lawler III about CEOs and their compensation.  Professor Lawler’s article talks about the complexity of companies’ boards of directors setting the compensation for CEOs and the [to me] troubling fact that in many cases, the chairman of a given board of directors is also that company’s CEO…just how might that work?

  • Here’s a picture: I’m the CEO of Good Cereal Company, and I’m also the chairman of its board.  I also handpicked 45% of the board.  When it comes to drafting my compensation package I vote for giving me $2 million a year in salary with a $25 million bonus.  Now, most of the employees in my company earn hourly wages, only one manager level employee earns in excess of $100,000/year…where in this do I – as CEO – possibly merit such a huge annual salary and bonus?

I read an argument recently about executive compensation packages that said it was practice to offer such huge amounts in order to attract and keep talentHere’s the hard question: if this proposition were true, then why would the big three automakers in the United States be needing bailouts?  If the CEOs of these companies were as talented as apparently they need to be, then why didn’t they:

  • attract other talented people to their companies who could: (1) forecast the economy; (2) see industry trends and act on them before disaster struck?

How can the CEO of a company accept a salary that is in the millions with an annual bonus in the millions and still hand out pink slips?

Add to FacebookAdd to NewsvineAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to Ma.gnoliaAdd to TechnoratiAdd to Furl

A business plan built by a fortune cookie

I’ve heard of people planning important business strategies by scribbling such on cocktails napkins.  I’ve even seen such planning diagrams on the paper coverings of little Italian cuisine eateries.  Once, at a Mexican cuisine dining establishment I saw some business men using crayons and drawing organizational boxes on the back of the child menu.  Needless to say, utilizing what is at hand at the moment of original thought is timeless and much practiced.

So why not a fortune cookie fortune?  This particular piece of fortune paper was not so much used to record business strategy as the fortune itself has become part of the vision planning…of the “you can do it,” “go get ’em!” encouragement part of the overall business vision.

This fortune reads:

  • One person with a belief is equal to a force of ninety-nine who have only interest.

This little scrap of white paper with blue ink was folded inside an already crumbled cookie from the Kari-Out Co., NY.   I have not done any research to discover where “they” find the pithy sayings “they” use as fortunes, but I’m grateful for this one. 

What does this fortune have to do with business?  The basic, most underlying foundation of any business is the vision of its founder(s).  At the core of that vision is belief.  Sometimes the vision will start with belief in an idea and grow from there.  Sometimes it is belief in the vision that sustains the leaders and managers of a business during times of difficulty.  At other times when business is good, that belief is vindicated and applauded. 

It is a fortune worth repeating to anyone and everyone who has a small business, a home-based direct selling or network marketing business and who must rely on their belief in that what they are doing is worth the time and effort; that one person’s belief does, indeed, have tremendous power.

  • One person with a belief is equal to a force of ninety-nine who have only interest.

If you know, in your heart of hearts, that what you are trying to accomplish is worthy of your time, effort and diligence…then believe that very thing and take power from it.  It will encourage you and enthuse you…and as I’ve said before, enthusiasm is contagious.

Add to FacebookAdd to NewsvineAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to Ma.gnoliaAdd to TechnoratiAdd to Furl

Success begins with Vision – great business strategy

I have a belief that when President-Elect Obama began his campaign, he did not envision coming in second.  I think he probably set winning the campaign as his “end goal.” 

Habit #2 of Stephen R. Covey’s “The 7 Habits of Highly Effective People” talks about the principles of personal leadership and is titled, “Begin with the End in Mind.”  He says in the book, “…If you want to have a successful enterprise, you clearly define what you’re trying to accomplish.”

I’m pretty sure that President-Elect Obama and his campaign team had set themselves a clear definition of what winning the campaign would look like.  My re-phrasing of this concept is that Success begins with Vision.

I read recently an article that said negative things about setting down your dreams, your vision.  This person had the idea that dreams won’t get you there.  Well, yes and no.

Dr. Covey does say that the first aspect of Habit #2 is Leadership.  In any organization [even if that organization is just you or just me] it’s Leadership that establishes the vision…that objectifies the dream.  Dr. Covey then says that the second aspect of Habit #2 belongs to Management – the aspect that gets the job done.

Yes, it’s not enough just to dream, to have a vision.  You do have to take action on that dream.  But I’m here to say that if you don’t first establish your vision, you won’t know where you’re going or why.

I began with a Vision for my home-based business before I chose which business it would be.  I examined my dreams and established my Why.  In this public forum I’ll share a part of that Vision, and it is to be able to contribute financially to global causes that have come to my attention and for which I have a heart.  One of those is the ongoing research to find answers for Diabetes.  My mother passed away from the complications of longterm Diabetes.  This is one of my Whys.

Once I had my Vision, I began to look for the vehicle to get me there.  I knew that a home-based business was going to be the vehicle based on various factors, and when I was introduced to the company I’m currently with, and did my due diligence, experienced its health benefits for myself, I knew that this was the vehicle model.

Success begins with Vision.  If you don’t know where you’re going, you’ll never get there no matter what kind of vehicle you hook your efforts on.

Do you know what success looks like to you?  Is it having a million dollars in the bank?  Do you know why you want or need that much?  Is it having Time – to spend with your family, to help in your community?  Is it the ability to answer the need that exists in so many places on this globe?  Is it to have the resources to help someone else achieve their dream?

I have a scrapbook…literally…and on its pages are pictures from magazines, notes on issues and website addresses of causes…all visual representations of my Vision.  The Leader in my business adds to it and visits it regularly to keep the Vision fresh.  The Manager of my business works to make it come to pass.

Is your business balanced with Leadership Vision and Vision Management ?

Add to FacebookAdd to NewsvineAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to Ma.gnoliaAdd to TechnoratiAdd to Furl