Right after I tell you that you have a lot of bosses comes this article by Joel Spolsky about Seven Steps to Remarkable Customer Service. That’s Seth Godin’s definition of Remark-Able: Being so good, people remark.

Takeaways:

• Fix every problem two ways – solve it then prevent it from ever happening again.
• Have a person answer the phone – one with enough ability and experience to do the above
• Plan ahead how to say things in the right way
• Take the blame
• Solve the Problem
• Make it easy for your bosses to get their money back (hint – it will make it much easier for them to give it to you in the first place)
• If I gave you all 7 steps (8 actually) you wouldn’t read the article. Go do it.

[tags]customer service, entrepreneur, customer, small business [/tags]

What a thrill it is when that day finally comes. That is the company founder’s joy. Also the company founder’s deception. Also (potentially) the company’s destruction.

Joy
Well duh! Now you can finally do what you know needs to be done without someone with their own agenda getting in the way. I think we can all relate to this one.

Deception
Of course you have a boss. In fact you have lots of them. The customers are your bosses. When Scott Adams (creator of Dilbert) quit working for the phone company and went out on his own (Dilbert was quite a success by then) he called it “boss diversification”. But this isn’t just a word trick. That’s why it’s a deception. These bosses don’t even tell you when they’ve fired you. And they rarely give you a warning. So they don’t make it as easy for you to know how to please them. Yet pleasing them an absolute requirement for success. Usually the only signal you have is that they’ve decided to buy (or not) and by the time you get that signal it’s often too late.

So your customer base should be considered a diverse, silent boss.

How could it be different?
If you treated them like you want employees to treat you what would you do? You’d make more effort to decipher their behavior. You’d probably test things more and pay attention to how they react to what you do. This is hard with a boss as diversified and silent as your customer base.  Testing is tedious. Changing just one thing at a time so you can test feels limiting (just like having a boss). Recording the results can be inconclusive or ambiguous.

But it must be done. The difference between success and failure is due to how good you are at pleasing your boss.

Destruction
Thinking you have no boss can be your downfall. Why? Think about this, when you have a boss, they usually control what you do, how you do it, and how much money you have to spend on accomplishing your goals. That’s why we all went to work for ourselves isn’t it? (See JOY above).

Yes, but to get permission or budget approval your boss made you jump through hoops. In the best of times, that means you had to clarify your thinking, do a cost benefit analysis and show how your ideas would serve the good of the company. Don’t you appreciate it when your employees do that for you?

Without the boss requiring that – you can just take off on a whim, use nothing more than your gut to justify changes in direction or huge spending outlays. I don’t mean to disrespect your gut. I’m sure it’s wonderful. But clear thinking and careful analysis has it’s place too. Without a boss, it’s too easy to ignore these activities and not hold yourself to account.

This has caused the death of many, many companies.

How Could it be Different?
Put in place a structure for the kind of analysis your company needs before every major (and many minor) decisions. Use a board of director if you can – an advisory board at least and [warning shameless plug alert] a coach.

The good news is that you can still decide to go with your gut; approval won’t be based on corporate politics (unless you allow it); and you still have the final say. But finding a way to require some rigor will ultimately help the company grow to please the real bosses – your customers.

Takeaways:

• Your Customers are your Boss. In fact it’s the market that gives your company permission to survive.
• Pleasing your new bosses may require testing and other tedious work that isn’t fun. Do it anyway.
• Dump the politics and the pettiness of your former bosses, but find a way to keep the rigor and analysis that success requires.

[tags] entrepreneur, customer, boss, management, small business, CEO [/tags]

Among the many tasks of a CEO probably the hardest and most beneficial is to obliterate SHEEPWALKING. The term comes from this post by Seth Godin who defines it as what happens when you hire “people who have been raised to be obedient and [give] them a brain dead job and enough fear to keep them in line”

The opposite is: ‘At first, it seems crazy. There’s too much overhead, too many cats to herd, too little predictability and way too much noise. Then, over and over, we see something happen. When you hire amazing people and give them freedom, they do amazing stuff. ” – also quoted from Seth’s article.

Here’s why it’s so hard. Running a company you’ve got way to many things to do. You’re looking for things to control. You don’t do it consciously but creating a culture of sheepwalking is a comfortable way to run a company and think you are in control. In fact, you really are in control. And that’s the problem. The things you can control in a company don’t guarantee success. At best they only prevent catastrophic failure. At worst they cause the failure albeit slowly so you don’t realize what’s happening.

Why? As I’ve said before, business is like sex where success depends on the interaction between you and the other person. The control you think you have in your company is all about you – not about the other person and it limits the kinds of interactions and responses your company will have. Plus it limits the types (and number) of people you’ll be attractive to.

This may have worked in the old days when the markets didn’t change very much, and the types of interactions were limited. But that’s not true anymore.

Takeaways:

• You can’t build a successful company on sheep.
• You have to create a culture where innovation, risk taking and creativity get rewarded, NOT sheepwalking.
• That’s your job as CEO.

[tags]Small Business, Entrepreneur, Management, How to be CEO[/tags]

Jessica Hagy’s stuff is funny, clean, and shows you new ways of looking at the world.

What more could you ask for?

[tags]Humor, Insight[/tags]

You wouldn’t ever spend a penny of your company’s money without expecting some benefit. You spend advertising to get sales, you spend on inventory to have something to sell. You spend on sales people because they put money in your pocket.

A business model is a tool to help you figure out when to spend how much, what results you should be getting when, and to know in advance when you’ll have to raise more money from investors.

How, you ask, can you predict all those things with enough accuracy to bother? Well, you can’t. Certainly not at first. But the fact that you can’t predict the future doesn’t mean you shouldn’t develop a tool that helps you understand it – especially as the future becomes the present. That tool is the business model. Probably the most important thing you’ll do as CEO is develop, refine and then USE the business model when decisions are being made in the company.

What is a Business Model? It’s an understanding of how these three things intersect:

1. What the customers want to buy (and why).

2. How the company will make and sell those things.

3. How the company will make money from doing so.

As you can imagine, there is a bit of guesswork involved. We call them assumptions. And it’s important to write them down and test them against reality, then revise them as you learn more. Pretty soon they’ll actually be dependable.

The other thing you’ll need assumptions about (at least at first) is the capacity of parts of your business. Production capacity is pretty easy to come by – how many widgets can a machine make in a day. But Sales capacity (how much can you sell before you need to hire an additional sales person) and administrative support are things you’ll have to guess and refine.

The parts of your model that you can get exactly are your costs.

Many people don’t build a model because so much of it involves guesses (I mean assumptions) so they don’t think it’s valuable. They are wrong.

I build mine based on cash flow. On the dollars page I put all the sources of cash in on top of the reasons to spend cash out. I group the cash in by product line and the cash out by reasons to spend: COGS, Cost of Sales & Marketing, Overhead, Paying back lenders & investors and PROFIT. Profit can be money taken out of the company or money kept in and used for growth.

On the assumptions page, I make all kinds of assumptions about how long it will take for customers to buy, what the average sale size will be, how interest rates will affect my business, how long it will take to raise more money etc. Make sure the numbers on the dollars page accurately reflect these.

I make a third page for capacity. This is a specialized form of assumptions that relates how much it costs to accomplish or produce a certain number of results. Things like how many people can each administrative assistant support, to how big can you grow before you have to rent larger facilities.

When you first start this, the number of details can seem overwhelming. Don’t worry. Start at the highest level and add details as you need them.

Takeaways:

• A complete business model will help you make every business decisions.
• It will help you adapt quickly when things don’t go as planned (and they won’t).
• It’s not a trivial task to build and use a business model. But I know of no better way to grow a company that has a functioning CEO. Without it, you’ll always be just the CCB – chief cook and bottle washer.

[tags]Business Model, Small Business, Entrepreneur, Management, How to be CEO,CEO Skills[/tags]