Category: Team

Differentiation Isn’t Skin Deep

Five years ago, I took a sales training course from Blair Enns (Win Without Pitching.) The course focused on how to sell agency services at a premium. One of his criteria for an agency that could command higher pricing was their process. He said, “Your agency must have a process that is so different that it requires weeks of training whenever you onboard a new employee.”

I thought it was an odd characteristic.

Positioning and marketing are all about perception: how the world sees you. It makes sense that you need to differentiate from similar businesses in the market’s eyes. But underneath the hood, a UX designer is a UX designer the same as a grocery clerk is a grocery clerk. If you go into Whole Foods or Trader Joes, there’s a line of people who get their food swiped through a bar code scanner at check-out. The people and process are the same.

In hindsight, what Enns was recommending, in a round-about way, was for the agency to have a distinct strategy.

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Merging to Grow

I spent my Sunday driving back from my parents’ farm in Southern Idaho. As I drove, I listened to a course on business strategy. One of the lessons was on mergers and acquisitions. The main point was that most of the time businesses merge or acquire other businesses for the wrong reasons and research shows that it rarely works. The lecturer said that it’s often a misguided attempt to grow.

On Monday morning, I hopped on a call with a guy named Alan who operates a similar business to mine, in the market I’m trying to enter, but who has been working there for nearly thirty years. Alan is approaching retirement and wants to see his business continue. He told me on that call that he’s interested in merging our companies.

Here’s the initial deal Alan proposed:

  • His two long term employees would get equity.
  • He and his partner would retain ownership of the company.
  • I would take control of the business.
  • Our two teams would merge.

From his perspective, he thought I would benefit with:

  • Gaining his client list.
  • Being able to sell and build off his established relationships and brand.

That’s not attractive to me, but we’re going to keep talking to explore if there’s a way we can both achieve our goals.

What the lecturer recommended for mergers and acquisitions was to calculate the burden of merging. He said that often managers focus on the potential upside of deals- like me focusing on what I could do with Alan’s clients or portfolio. What most folks miss is that there is a challenge and cost to merging. It takes an investment to integrate teams, systems, and resources in a way that is productive. For Alan, if we merged, I’d have to take on the history of his choices: technologies we don’t use, system differences, client choices, and etc.

It’s sort of like considering whether to marry someone and only seeing the potential of that union. If you took a closer look though, you’d realize that marriage means you’ll have to live in a house with six cats, continually clean up after a slob, and keep one eye over your shoulder for that jealous ex who will be released from prison next year.

Two Lessons on Values

I’m president of my local Toastmasters club. Every meeting that I’ve attended has started with the president reviewing the Toastmasters’ mission. Under my leadership, we’ve started instead with a brief question or example of one of the club values. There are four values from our international organization parent:

  • Respect
  • Integrity
  • Service
  • Excellence

I introduced the values at a meeting by asking who knew them? Only one veteran member knew what the values were. When I gave the members the opportunity to speak on the role of values, someone said, “Values are what an organization tells you to try and make you fit into the system they’ve created.” In other words, a top-down attempt at manipulation.

To these four values that Toastmasters International provided, I’ve added:

  • Acceptance
  • Fun

I believe the four original values accurately reflect our culture today. However, they’re missing the additional two values which I’ve observed in our club’s behavior. In other words, bottom-up values derived from members.

Five years ago, I set the values of my business:

  • Freedom
  • Integrity
  • Results
  • Growth

These are a reflection of my personal values. I.e. Top-down.

The past two years, in weekly meetings spanning May through July each year, our team has discussed and refined these values into ten more specific expressions. I.e. bottom-up. Each week, I challenged them with actual scenarios from our work and asked them to derive principles from those scenarios, based on how they thought we should respond. Then we would discuss the long list of principles we all came up with and the pros and cons of each.

Below is what we eventually ended up with:

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The Price You Pay in Operations

I met up with some entrepreneur friends, Keith and Adam, to play a board game last weekend. Keith has been grinding to get a new SaaS product released that is an extension of his highly successful core SaaS product. After we finished gaming, we hung out in his kitchen and talked about the journey.

Keith said that he’s spending most of his time writing code, but to scale to his ideal exit point he needs to figure out enterprise sales.

Adam asked, “Why don’t you just hire a developer?”

“No one’s good enough to work on this problem,” he replied.

“What are the things in the business only you can do?” Adam asked.

“Product management, figuring out the strategic direction, what to build next,” Keith said.

I asked, “What’s the function in the business that is foundational to everything else? That must be accomplished and enables everything else?”

Keith thought for a moment and then said, “Sales.”

This is a challenge that many of us come to as owner operators.

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Multiple Opponents

What interested me in martial arts as a child was that skill gave you almost a super hero level of invulnerability. In the movies, the expert martial artist would fight groups of people and come out on top. As an adult training in the martial arts, the better and better I became, the more I realized that this was a fantasy. In a real fight, even someone exceptionally skilled has the odds heavily stacked against them as soon as another opponent appears.

To make a math comparison, a normal person’s threat in a live environment is a 1. An excellent martial artist might raise their threat to 1.5. Once another person comes in, the odds are now 2 : 1.5, add another opponent and they’re 2 : 1.

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Rein it In

A lesson that I return to again and again is that whenever I step in to solve a problem, I’m robbing someone on our team of the opportunity to grow.

When I was a teenager, my dad told me that you train people how to treat you. The same thing happens in a team with how you respond to challenges. If there’s a challenge in the business and you always hop on your horse and lead the charge, you’re going to train your team to look to you whenever a problem appears. You will advance your capabilities while they stagnate.

This isn’t to say that you nurture growth by tossing people into the deep end and yelling, “Swim or drown!” Rather, it’s that if you’re going to develop your team, you need to restrain the impulse to fix everything and reign in what you contribute.

Start with:

“What are your ideas?”

“What do you suggest?”

“What are the obstacles?”


Featured image is a Moroccan with his Arabian horse along the Barbary coast. By Eugène Delacroix. Used under public domain.

Juggling When to Hire

We tend to perceive information as static and think in abstractions. However, our experience is passing through time. What something means and how it works is different depending on that passage. For example, if I asked you how to build a campfire, you might reply, “Build a tipi with tinder, kindling, and wood ascending outward in layers.” That’s generally accurate. But if I asked you how to build a campfire in February, when everything is sopping wet, you would have a different answer filled with consideration.

Similarly, though there is much advice on who to hire and how to hire, I haven’t come across much concerning when to hire. The answer to that question depends on how quickly you’re growing.

Imagine a circus performer juggling three balls. They could do this in their sleep while composing haiku in their dreams. As the business grows, you’re going to throw them another ball. Four is a little more challenging, but they adapt. The business makes a little more progress and you throw them another ball. Five is their very limit. Their hands are a blur and sweat drips down their face. They can do this for a couple of minutes at the most. But you toss them another ball anyways. They drop a ball. You toss them another. They drop that too. After a few minutes they drop a couple of more balls and are back at three and having difficulty with that. Suddenly they stop juggling and start throwing the balls at you and then storm out of the circus tent to have a cigarette.

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Hat Tricks for Team Growth

Small business operators are multi-hat wearing folks. We put on our sales hat to deal with customers, switch to our operations manager hat to make sure sales are fulfilled correctly, and then put on our CEO hat to chart a path for the business. We’re a part-time everything. As a business grows, these different hats are transferred from our heads onto employees and contractors. However, hiring ourselves out of a role is a bit of a hat trick.

Hat trick is a term from sports that relates to the achievement of three goals in a game. Similarly with hiring, there are three factors that you have to evaluate accurately:

  1. The financial cost to the business of a new hire.
  2. The financial benefit to the business (in a time span.)
  3. The opportunity cost to the owner-operator.

This makes for some tricky math (pun!)

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The People Puzzle

I spent a significant amount of time doing operational work the first two months of this year. I’ve been providing digital strategy for client projects and augmenting our project manager. It’s an issue because my goal has always been to be a business owner and not an owner operator. The challenge of the situation is that, like many owner operators, I fill several gaps in capability in the business. The gaps I bridge are high risk areas where skill and care are required. Because of this, hiring someone isn’t as clear as if I were replacing an existing employee.

In considering this challenge, I asked one of my friends for advice. Specifically, I asked who he would hire next?

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The People On Your Next Ship

I read Stephen Covey’s book, 7 Habits of Highly Effective People, when I was a teenager. One of the habits that I return to again and again is to, “begin with the end in mind.” This perspective puts a lens over activity that encourages selection. It improves our ability to make decisions that support intentional change.

There are many ways this habit supports business growth, but to focus on a single example, do you know who should be on your team? Not for today, but for tomorrow. At your next stage of growth, what are the functions, roles, and people?

We tend to react to the environment and problem solve current situations. You hire or contract a sales role to drum up more business because your team is under capacity.

This isn’t inherently wrong, but you’re dependent on environmental cues that will shape your business. They will determine the shape, size, and kind of business you run.

It’s like only sailing in the direction of the wind.

But if you know where you’re going, you can make choices to bring sailors onboard that will aid in navigating to your desired destination.


Featured image is Dort or Dordrecht: The Dort packet-boat from Rotterdam becalmed, 1818. By JMW Turner. Used under public domain.