This evening I read Peter Bregman’s blog post about his experience at the Four Seasons in Dallas. It brought to mind my own experience at the ITC Windsor Manor in Bangalore. The family and I had been visiting some friends in the northern part of town. It was late in the afternoon, when we headed back. Of course the kids waited till we were a fair bit down one of Bangalore’s interminable one-way roads, before clamouring to use the restroom. Usually, the chorus of “I’m hungry” or “I need to use the bathroom” from the backseat would result in much heated discussion between my lovely wife and myself. Luckily we were right in front of the Windsor Manor, so no discussion was needed. We pulled in, parked the car and dashed to the front door.
The liveried doorman, the one with the enormous moustache, held the door open. “Which way to the rest rooms?” I asked as my eight-year old wiggled in front of me. The wife was still walking from the car, dragging our reluctant ten-year old behind her. “Straight ahead sir, through the arch and turn left. You will find the restrooms in the first corridor on your right.” We made it safely with time to spare. As the girls and their mom, took their time powdering their noses or discussing Dad’s driving – I hung around the corridor, admiring the Raj era landscapes on the wall.
“Can I help you sir? Were you not able to find the restrooms?” I looked up to see the liveried doorman, who was clearly headed for his break. I assured him that I had already availed of their fine facilities, was merely waiting for the family and thanked him for his concern. After ensuring I had everything I needed he finally headed out the staff door. It was only then that I noticed the discretely designed staff door down the corridor, through which another staffer had just passed.
I was just blown away – there must have been 15-20 people at the front portico, as the family and I had passed through the front door. It was a good ten minutes or so later, when the doorman and I met in front of the restrooms. We were not guests at the hotel and I am sure that his job required him to manage matters primarily near the front porch. Yet, the care and sincerity with which stopped to inquire after my needs and the way he tried to address the matter of my possibly not having found the restrooms clearly reflected the sense of ownership he took over helping visitors and guests. Elsewhere at the Windsor Manor, at their incredible “Jolly Nabob” restaurant, I have seen the same excellent sense of ownership and pride with the maitre d’.
As anyone who’s been in the hospitality business knows, finding good help – the talent – is hard. Training them and inculcating in them the sense of ownership and service mindset is even harder. And institutionalizing it requires trust! This is a lesson all of us could use and Windsor Manor and the Four Seasons teach us well to use in our own business and lives.
Last week one of the first tweets I came across, as I started my day, was a re-tweet by @CharlieCurve — a poetical summary of Gary Vaynerchuk (@garyvee) earlier tweet.
“Stop worrying about who’s President, what the market did and FOCUS on your business & brand.”
Yep, focus – say it again – FOCUS is the one thing you need to succeed as an entrepreneur. If you thought you needed it before, the recession has made it a burning need as the economy totters, markets tumble and Cassandras abound. You’d think it would be easy to keep this one word in mind and hence stay focused.
It’s easy to understand why we lose focus, particularly in entrepreneurial setups. The passion and dynamism of being entrepreneurial is the first cause for the loss of focus. There’s always some new problems to be solved, a new customer to be served or more cash to be brought in. This makes it hard to say NO to a lot of things. So one YES at at a time, you get another ball in the air, and soon there’s no time to do things as well as they need to be done. Worse yet, you keep falling behind and losing ground.
Staying focused requires us to master just one word and that is “No” Doesn’t have to be NO, screamed at the top of your voice, or even a “Hell no!” hissed out the corner of your mouth. Just a plain and polite no would suffice. Everything else that lead you to be an entrepreneur in the first place will kick in, once you focus. So take Gary’s advice and quit worrying about anything other than staying focused on your business goals!
For the two of you who may have not heard of Gary Vaynerchuk – here’s a quick blurb. Gary, who by age 30 had grown his family’s small wine business into a $50M dollar business, knows a thing or two about building successful businesses. And that was before before he started “Wine Library TV” that has nearly 100,000 daily viewers. Gary has become a much sought after speaker on the matter of personal branding — patience and passion, he exhorts are critical elements to building your brand and business. But that’s matter for a whole another post.
You’ve finally taken the plunge. Quit that steady paying job, roped in a couple of friends and started your own business. You’ve even squirrelled away some money to pay the rent and keep the wolves from your door, at least for a year. If you are smart, you are still working out of a coffee shop or your father-in-law’s basement (or attic) and keeping your burn rate low. And all this before the market imploded and the economy slid from being merely slow in to a full-blown recession. You’ve even managed to line up the first customer and then it hits you — you are going to need money to buy hardware, software and pay those two programmers you plan to bring on board. The capital you and your partners had pooled together no longer looks like it will stretch as far as it needs to.
Barack Obama might have been talking about your business in his inaugural speech when he said: “The challenges we face are real, they are serious and they are many. They will not be met easily or in a short span of time.” Alas, because you are not a Wall Street firm or even a regular old bank, the Government is unlikely to step in and bail you out. You realise you are on your own.
A friend asked me recently, “How is an entrepreneur going to find funding in times such as these? Even with a compelling idea, I suspect it would be difficult to get people to fork out money. And even if you do get start-up capital, managing working capital will be difficult, won’t it?” This was right after my waxing passionately in an earlier column as to why the right time to start a business is always ‘now’, carpe diem and all that! So if indeed the best time to start a business is ‘now’ — in a downturn — what should an entrepreneur do for money? Even if you figure out a way to find money, is there such a thing as good money or bad, for that matter? And don’t even the smartest of boot-strappers need working capital?
Get customers to pay your way The best way, in my mind, to run a business is to get your customers to pay for it, preferably up-front. At first glance it may seem outrageous, but getting customers to pay you is not merely about money but about validation — of your business, the value you bring and yourself. If it can work for lawyers, accountants and other service providers (all of whom you encountered when you began your business), there is no reason why it shouldn’t work for you.
I don’t intend to trivialise the raising of money. Unlike trying to get venture capitalists (VCs) to invest in your business or your wife’s uncle to cough up cash, getting customers to pay your way may actually be worth all the time and energy you pour into it. It is hard, but not impossible. Whilst getting money from your customers is easiest done in professional service businesses, it can be done for virtually any service offering, and with some imagination, for product businesses as well.
In my first start-up, $5,000 advanced by a customer was used to buy our first computer, develop software and to deliver it. Many an entrepreneur, freelancing for the first time, has tapped their previous employer to be their first customer and source of (micro) capital!
Beg, borrow or… Bills unfortunately have a mind of their own and so they reproduce and pile up. Telephone calls, printing paper, Internet access — all generate bills even as you look to land that customer who will pay you in advance. So you will need some money before you can get customers to pay your way. In an ideal world, this is the capital the other founders and you would have brought into the business. As most of us discover this is never enough and even the visits to angel investors or VCs take up not just time, but money for travel and expenses such as a decent outfit to wear to those meetings. So let’s just admit it, we need more money than we thought we did.
If Sumerian clay tablets are to be believed, entrepreneurs have been borrowing from their relatives forever. So family, beginning with your parents and siblings, are your lenders of first resort. For those brave enough, in-laws and friends form the next round of prospective lenders. Only spouses of the founders should be exempt from this global scan of relatives, by blood or marriage, as a source of loans or working capital.
An alternate way to borrow from family or relatives is to have them guarantee a loan you take with the bank; this way they are not directly lending you the money, you get access to capital that you otherwise will not have and you are liable to the bank directly. While the relative who co-signs the loan is taking comparable risk whether they write you a cheque or co-sign at the bank, they don’t have the same near-term cash flow implications nor will they have to explain to their spouse why they are giving you money.
Even when you are successful in raising debt by having family or friends lend to your company, don’t lose sight of the fact that you want customers to be paying you and continue to pursue that.
Conserve what you have It may no longer be in vogue to be told “A penny saved is a penny earned,” but it never was truer. A good entrepreneur is a penny pincher extraordinaire! Extraordinaire, because he can pinch ’em unseen without making a show of it, without giving his team a sense of being deprived or thinking that he is penny wise and pound foolish. Now might be a good time to learn the true meaning of the term ‘fiscal conservative’.
Question every expense, anything that would involve the outflow of money from your business, including advances such as rental deposits. Rethink salaries, always the hardest thing to do, first. Don’t get yourself a new or fancy office. Look at every dollar or rupee you spend — do you really need to do that? Your borrowing from family need not be confined to just money, it could be work tables and storage units. Bring in your own lunch, reuse both sides of the printer paper, manage your mobile phone bills and see if you can take the train rather than the plane. Every little bit adds up and fiscal prudence is best learnt in tough times and can be practised subsequently in good times.
If you practise all three strategies for raising money — getting your customers to underwrite you, borrowing from trusted sources and conserving what you already have — you will be in pretty good shape. And it is always the best time, when you are feeling safe and don’t need money desperately, to try and raise it from more angel investors, banks or VCs. Most importantly, you will be equipped to outlast the recession.
Talking about firing a customer sounds blasphemous in the present climate of economic slowdown. Nevertheless talk about it we must , if only to get acquainted with the idea well before we actually have to do it. The idea of having to fire an employee, while unpleasant, has definitely crossed the minds of most entrepreneurs. Even the notion of letting go of a founder, for various reasons, is within the realm of possibility once the reality of an impending business divorce stares us in the face. But firing a customer seems suicidal or at the very least worth a close examination of someone’s head. Even in the best of economic times, it is hard to part with customers who contribute a significant amount of revenue. So, can there be a good reason to do so in hard times?
Five years after we began our software product business we had our first break-even year. The following year we made a real but nominal profit which, after one day of feeling good, made us face the fact that we would have to work even harder to grow or stay profitable. This, I will admit, was disheartening.
A close examination of where we were revealed that we had grown excessively dependent on one customer. This customer was taking us in a completely different direction from what we set had out. While the customer’s contribution had grown year-on-year (and was paying the bills), it would soon become non-scaleable, leaving us with little to spare for developing new products or alternate sources of revenue.
After much soul searching, Microsoft Excel crunching and internal debate, we decided to let go of this customer — not scale back — but truly let go. It was not easy; the customer was Japanese, we had spent five years cultivating the relationship, their CEO had practically adopted our CTO and their projects were technologically challenging and highly profitable. Over 18 months they went from nearly 60 per cent of our business to zero. And hard as it was, it turned out to be the right decision. In this instance, the relationship and our company survived the break and we were able to focus and execute in a scaleable manner elsewhere, which resulted in our subsequent acquisition.
So how do you know when to let go of a customer? What is the right way to go about it? How do you handle the fallout of such an action with your own employees and other stakeholders?
The deadbeat
If letting go of a customer could be easy at all, it would likely be letting go of the category of customers who are deadbeat — customers that don’t pay or those that pay many months later, act as though they are bestowing a favour on you and, in the interim, run up a bigger bill yet.
Most start-ups find firing deadbeat customers difficult for two reasons. First, an entrepreneur’s innate and at times unreal optimism that militates against terming a receivable as bad debt and the customer as delinquent. It is hard to separate the deadbeat from the merely late, particularly in India where we have a business culture of paying our suppliers late, if not last. Things get worse when a particular customer contributes significant revenue (at least on the P&L) but is a drain on your cash flow. Adding insult to injury, most such customers tend to be far bigger than the start-up and have greater resources available to them.
As an entrepreneur, hard as it might be, the moment you admit that you — a cash-strapped start-up — are financing the cash flow of a much larger company, is the moment you decide to let go of that customer. Having made the decision, you should pick the when and how with care. As with an employee or a founder, the assiduous application of common sense is critical to the termination of a relationship with a customer. Also, not every customer who pays late, occasionally or otherwise, may need to be terminated. Payment terms in your industry, your own reserves and cash flow planning should be factored into your decision. However, do not shy away from a quarterly review of your customers’ and your own receivables history to see if any of them are deadbeat; you may even be making some of them deadbeat by accepting such behaviour on their part.
The divergent
This group of customers is the hardest to let go of. They are a good source of revenue and profit for you, they pay on reasonable terms and promise continued growth. However, where they are headed and want you to go is very different from where you want to go. The good news is that if planned and executed well, such disengagement could be the win-win situation that business books talk about. This calls for honest self-assessment of where you want to go and regardless of how good the money or the relationship, if this customer will not take you there, then, the ability to disengage.
Such disengagement is best done by meeting the customer, explaining your assessment of the situation and your concerns. The customer may surprise you or at the very least agree and appreciate your quandary and be prepared to work with you for a transition. The longer you put off such a discussion and decision, the more difficult and messy it will get.
The difficult
With deadbeat or divergent customers you can at least put your finger on a cause. While this may not make it any easier to fire or disengage from them, the rationale for action will be clear. You can state and defend your reasons, even if they are unacceptable to the customers and sometimes to your own team members. There will, however, be times when you encounter customers who are neither deadbeat nor divergent and yet cause you no end of grief by being difficult. Such difficulty could range from the interpersonal — they don’t treat your staff or even their own staff well, to ethical issues — they expect you to do things that you feel are not correct. Again, these could be as simple as pre- or post-dating invoices or shipping documents going all the way to kickbacks. Others may merely be inconsiderate, wasting your staff’s time, nitpicking on every occasion or bad mouthing you.
In other words, customers can act just as any individuals could, in an insensitive, rude or inappropriate manner. As with friends or acquaintances, you are likely to overlook the first or the rare transgression.
However, many start-ups and entrepreneurs who would never put up with protracted abuse in their personal lives, tend to be tolerant or even masochistic with difficult customers. The toll this takes in the long-term is the primary reason you should fire such difficult customers. All too often, the brunt of such abuse will be felt by the front-line staff.
Unlike deadbeat and divergent customers whose impact is largely felt on your business first, the difficult ones will undermine the entrepreneur’s or the management’s credibility which is far more damaging. The need to act decisively with such difficult customers cannot be overstated.
Twice a year, review your customer list and their behavioural scorecard with your team.
Those customers who repeatedly behave in a difficult, divergent or deadbeat manner should be flagged and dealt with appropriately. This will allow your organisation to thrive like a garden that’s well weeded!
This article appeared originally in my Start Up Logic column in the Hindu Businessline
In 45BC, Julius Caesar decreed the Julian Calendar. This formalized the then-new trend, that a calendar year begin in January—which for centuries before had started in March. Little did Caesar know that two millennia later, even with the minor modifications of the Gregorian calendar, the world at large would use this time to take stock.
With our own startup still finding its feet and so many good friends looking for jobs, I thought it might be appropriate to look at what entrepeneurs can do in 2009 to win. Even for those of you lucky enough to have a job, as Tom Peters said many years ago, you are the CEO of Me, Inc. and may want to check these out.
So here are 4 things that entrepreneurs need to do more of in 2009
[a] Give – as in contribute freely, your knowledge and at least some of your time. Start with your employees, who may be worried about the company, their own jobs and unclear how best to contribute. Share your learnings with peers in your trade organizations, with customers and prospects – be it in a blog, newsletter or a speech. At the very least, you will realize that you are not in half as bad a situation as many others are. Giving is not only psychically fulfilling but is an investment in your own future that makes just plain good business. And on any given day, giving need not take more time than a longish lunch break!
[b] Reach out – get out in the field, in front of prospects & customers every other day. This means you—not just your marketing or sales person. You can’t talk to customers too much (in a single meeting you can, but then you may never be called back!) The silver lining in a downturn is that customers have time to talk. So reach out. You can start by calling on all those folks you haven’t connected with, just this last year, and work all the way back to those you haven’t spoken to since high school! Remember you are not trying to sell, but to connect.
[c] Listen – having reached out, it is important to listen. You would be surprised at the insights that arise when we truly listen to our customers. Often customer themselves gain clarity when they talk and so many of our own assumptions get uncovered and prove to be baseless. Listening requires both preparation as well as asking clarifying questions. Only those of us who do this well will get invited back.
[d] Simplify – this is a great time to simplify everything about our business and jobs. Simplify your products, your collateral, your sales pitch, your internal systems, your website – you get the picture. Make it easier for people to find you, to understand what it is you do, why you do it better than anyone else and why buying from you and using your products is going to simplify your customers’ own life and work. Simple is not easy – simple is hard! So the sooner you start the better.
In a downturn it’s easy to batten down the hatches and focus on the numbers – which is important, but we are never going to dig ourselves out of a hole, let alone grow or thrive with just a defensive game. So it is important to stay the course with Giving, Reaching out, Listening & Simplifying (GRLS). While this sounds like a lot of work, it is not. GRLS require passion, planning and perseverance – but aren’t these the very reasons you got into business in the first place?
You might want to check out the following two articles for interesting takes on this topic.
We’ve all read of horror stories of VCs forcing actions leading founders to leave their companies. But are there reasons for a founder to leave voluntarily or being asked to leave by other founders or the management team? Many a times, the answer is yes.
When people set out to start a business, a few jump in with little planning. Most though, do so after much forethought. Even when a good deal of planning has gone into starting a company, it is the rare entrepreneur who has actually thought about a scenario in which the founder leaves.
I realise that the very thought may sound nihilistic to some readers — can there be a start-up without the founder or can start-ups that survive without the founder do well or at the very least exist meaningfully?
The answer to both questions fortunately is yes. Apple is probably the best illustration of this, with Steve Wozniak leaving to pursue other interests and Steve Jobs being ousted by John Sculley – so not one, but both founders left (or had to leave). Of course Jobs’ return and subsequent success is a matter for another article altogether.
So what should a founder or founding team consider about the possibility of one or more founders leaving, voluntarily or otherwise, the company they founded? Is this inevitable? Can this be avoided? Or should this be planned for and if so how?
Before we examine these questions, it’s worth reflecting that few companies — Microsoft under Bill Gates or Dell Computer under Michael Dell being the exceptions — survive, grow and actually thrive under the same helmsman from founding to widely acclaimed success. Change at the top is more the norm than the exception. However start-ups, particularly in their early days, are so closely identified with their founders — and founders with their companies — the change, of a founder leaving or being asked to leave, can be traumatic. So it is best planned for and, hopefully, never actually encountered.
Leaving voluntarily
I remember the day when one of my partners informed me that another of our founding team (there were five of us founders) wanted to quit. We had not been at it for a year and the fire of a new adventure still burned in our heart and flushed our cheeks — so it came as a shock!
In this instance, the issue was one of personal belief regarding religion in the workplace. I am not sure, to that day, we had even thought about religion (or its absence in my view and excessive presence in the departing partner’s view). This is an instance where a founder wanted to leave voluntarily as he felt there was an irreconcilable difference in personal beliefs.
There can be numerous reasons for a founder to leave voluntarily, many of which may have nothing to do with the business itself — family commitments (wife wants to relocate) or health reasons (allergies in Bangalore) are examples.
Of course, there could be several other reasons — loss of faith in business partners; the gradual realisation that a start-up is not for him or her; or the thought of a Web-based cobbler service no longer exciting them — there are as many reasons for a founder to leave as there are people.
Having an inter se — Latin for “between or amongst themselves” — agreement amongst the founding team members is the best way to prepare for this eventuality. While the heartache that follows the departure of a founder may take time to dissipate, such an agreement will minimise the business impact. Also, the fact that such an agreement is in place prepares the concerned parties to consider the possibility of a founder leaving and address the potential causes up-front.
A good inter se agreement would at the least cover issues pertaining to shareholding: Do insiders or the company get first right of refusal? Will the leaving partner be permitted to still hold some or all of his or her shares? If so, will he or she retain voting rights? If the company bought the shares, how would these be valued? What would the payment terms be? How would the death (strictly speaking this would be an involuntary departure) of a partner be handled?
A good corporate lawyer would be able to pull together a reasonably well thought out inter se agreement. Most people are comfortable having health insurance and don’t blame it as the cause when they fall sick. However, many folk balk at having an inter se agreement believing this may sow the seeds for the undesirable to happen.
As someone who’s been there more than once, I would say that you are better of thinking and planning for all eventualities and this will never be the cause of a partner leaving. And you will be glad it is in place, when they do actually leave.
Forced to Leave
There are primarily two different stakeholders — the Board of Directors and the management team — who may force a founder to leave.
In venture-funded companies — most of which have active boards — the board could be the primary driver for change, particularly if a founder is the CEO of the company. This could arise for good reason — if the company is growing faster than the CEO/founder is, someone else should be brought in as a replacement.
The founder, in this instance, could then focus on other areas such as key technology, marketing or other contributions.But if he is not prepared for the shift, he may be asked to leave.
Alternately, a founder may be asked to leave for not-so-good reasons such as having rubbed powerful board members the wrong way.
For such founder/CEOs of venture-backed companies, having an explicit employment agreement could avert dismissal under unfavourable terms or without cause.
The other founders or management team, particularly in closely held start-ups, can also force a founder to leave.
Again, the reasons could range from the appropriate, namely incompetence, unethical behaviour or sexual harassment, to the inappropriate — politicking with other members of the founding or senior team in the company.
The best way to address this is to have a clearly spelt out code of conduct, periodic performance reviews (including peer feedback) and open communication so that there are no surprises.
The inter se agreement is once again a good safety net for all parties in this instance.
Asked to leave
This is the hardest thing to both plan for and execute. While asking a founder to leave may not sound that different from forcing them to leave, it is not trivial and is the most likely of the three situations an entrepreneur will be faced with.
When a founder is caught stealing, for instance, the decision can be black-and-white and he can be terminated or forced to leave.
However, it is much harder to confront and tackle issues that have to do with cultural mismatch or personal behaviour that, while legal, show poor judgment or the more common issue of self aggrandisement at the cost of the company or its employees.
The best way to address this situation is to ask ourselves the question, if the person doing this was an employee or anyone other than a founder, would they be asked to leave. If the answer is ‘yes’ for an employee, it ought to be ‘yes’ for a founder.
This is, of course, easier said than done — for founders have great emotive appeal — to the rest of the company, the community and, of course, to themselves!
However, as our mothers taught us, a stitch in time, does indeed, save nine!
Here experience and my scuffed knees speak — all those start-ups that avoid confronting this sooner, end up regretting it later.
(This article was published in the Business Line print edition dated December 15, 2008)
Last week, I began getting a flurry of invites to connect on LinkedIn from ex-colleagues, all of whom were at the same firm — a sure indication that pink slips were in the offing! Alas, I was right, as the entire location got the axe on Monday. I suspect the first day every engineer in the place was in a state of shock, not to mention folks in finance, admin and marketing. It was hard to see folks that I admired, liked and even loved, struggle with what to do next – even as I counseled some, made calls for others and helped with resumes.
As a veteran (survivor, victim and instigator of) numerous layoffs stretching from my first week at work in August 1988 through the mid 2000s, I thought I should share my learnings on the Top 5 things to do when you lose your job. Not s Surprisingly my first list looked very similar to the Top 5 things to do while you still have a job! Further thought and reflection helped refine it. So here goes….
Plan: Write down a set of objectives for next 90 days
As the man said, when you don’t know where you want to go, any road will take you there or NOT! So it better to know where you want to go first and then we can figure out how to get there. So get a plain piece of paper and a pencil and write down a set of 90 day objectives. This could be as forward looking as “I’ll figure out what I want over the next three years” to “I’ll have at least six/twelve/twenty four interviews.” Break this down into what you will get done in the next 5 days, 15 days, 30 days, and every two weeks beyond.
Create Collateral: Get your resume re-done
With the 90 day objectives in front of you, create at least two versions of your resume/curriculum vitae
The first one is a plain vanilla, one pager (or one sheet, if you have to go to two sides of a hardcopy resume) that highlights your skills, summarizes accomplishment and a quick employment summary. This is useful firstly for yourself to hone in on what you want to highlight and particularly for headhunters to get a sense for who you are.
You can do a second, more detailed one (build on the first, don’t waste time), that adds an objective up front (what are you looking for) and expands on specifics of what you have done or skills you possess to make you the right person for the stated objective. This you tweak for each company/interview that you appear for. Feel free to bring in an updated CV to the actual interview, particularly if there’s been a phone screen.
Doing your CV also means making yourself easy to find – so update your profile on LinkedIn, Spock or other business networks that may be relevant to your business. Regardless of your feelings or advice you may get to the contrary, it is worth posting your resume to the job sites – be they Indeed.com, Dice.com, Monster.com, Shine.com, Naukri.com or whatever specialized job sites may be there. Don’t forget your alumni sites, regardless of how long ago you graduated or it was only an executive ed program you attended at that school.
Reach out: Work the phone/email/fax Be clear that you are in sales, regardless of what job you are looking for. Sales is a numbers game – so you have to set a clear target on how many folks you will call, how many mails you will send out and if you have to fax stuff, you’ll do it! Ten (10) is a nice round number, as are of course, 15, 20 or 25. Set realistic goals for the number of mails you’ll send or calls you’ll make EACH DAY. And then just do it every morning. Yep, start your day with this. Once you connect with someone, or when you can never connect with someone you are trying to reach, you’ll figure out what’s the best time, if it is not the morning. You don’t have the luxury of “I didn’t like how he spoke to me,” “Will she think I am desperate?” “I’m not sure I want to work there” – regardless of the truth of the these statements, they are EXCUSES – just move to the next call/email on your list.
Track
When you lose your job, the only thing certain is that you are going to have a few lousy days. The best way to keep these short, is to stay busy meaningfully which is best done by tracking two critical things.
Who did you send a resume to, or make a call, where did you already attend an interview, who said they’d give you an intro. Write everything down, so that nothing falls between the cracks.
What worked and what didn’t on a given day & how you felt. So any day that you feel down, you can see what you got done that day or at the least find another day that was lousier, that you already survived and so you know this too shall pass.
I find using a daily diary or a notebook with one page per day is the best way to get this done. You can carry it with you and there is no boot-up time nor do you lose it because the battery died. I know folks who use MS Excel and a diary – choose your favorite method but do it!
Volunteer Instead of sitting at home or in your cubicle (till your last day), get out and keep yourself busy. Volunteer to help out at your friends’ startup, at a local VC firm, at a non-profit – with your specific skills – be it letter (copy-)writing, programming, project management or basket weaving. Firstly this prevents you from moping around the house and bothering the spouse, kids or pets; more importantly it keeps your game sharp through practice at something real it helps you make new contacts, potentially learn a few new things and finally builds psychic karma for doing good. If it opens your eyes to new opportunities or insights about yourself, that’s icing on the cake.
Stories of personal heroism and the extraordinary effort are slowly appearing from the survivors of the terrorist attack on Mumbai. Besides the obvious lessons on preparedness (or lack thereof ), there is an important lesson for all of us on the criticality of timely communication. Much of the anger and angst felt by people towards politicians and the media , during and after the attacks, stems from the vacuum created by the absence of a single official source of information. Even if it were to tell people, “We don’t have the facts yet, but we are staying on top of it and will let you know the moment we know something,” people would have rallied around the speaker and the message.
Contrast this with the role Rudy Giuliani played even as the World Trade Center towers burned during the 9/11 attacks on New York. As the New York Times reported ,
Three hours [after the attack began] … he stepped into a press conference with Gov. George E. Pataki.
“Today is obviously one of the most difficult days in the history of the city,” he said softly. “The tragedy that we are undergoing right now is something that we’ve had nightmares about. My heart goes out to all the innocent victims of this horrible and vicious act of terrorism. And our focus now has to be to save as many lives as possible.”
Through that day, Giuliani held two more press conferences and at 11PM, was seen walking around Ground Zero talking to rescue workers. While I was no admirer of Rudy Giuliani prior to 9/11 or his recent run for the 2008 Republican nomination, he demonstrated through his actions and presence, the signs of a leader – one who understood the need to communicate, to reassure, even when he did not have all the facts.
While the Chief Minister and Deputy Chief Minister of Maharashtra did appear on television several times, their unsubstantiated assertions on the number of terrorists, their origins and the state of the seige which changed with each interview undermined any confidence the public may have had. The Prime Minister too when he addressed the nation a day after the attack began, seemed to mumble incoherently and was insipid in the kind words of one editorial commentator .
It is a shame that the Indian political leadership at the city, state or national level failed to step up to the bar, to provide the focal point that people sought. Mr. Chidambaram, this might be your opportunity to provide such a leadership to reassure the citizens through direct, periodic and factual communication.
Leadership requires communication, be it good news, bad news or worse yet no real news. Communication done clearly and consistently is more likely to reassure listeners than silence, even if the crisis isn’t over.
Life has a nasty way of springing surprises on you. The only certainty, it would appear, is that you will encounter a lot of uncertainty. Being an entrepreneur is no different. If you are like me, you might have thought you made your hardest decision when you chose to become an entrepreneur.
Wrong! Before you know it, the business, customers, employees and the world at large are bringing problems that require you to make decisions. There also seem to be few easy decisions. Why didn’t anyone tell you about this? Well, you heard it here first — much of your productive time as an entrepreneur will go to making, hopefully, good decisions.
“Effective executives do not make a great many decisions. They concentrate on the important ones,” says Peter Drucker in his book The Effective Executive. Simple as Drucker’s assertion sounds, it is hard in the fog of entrepreneurial battle to focus on the important few. So how do you identify the important from the merely urgent or routine problems? Having identified these, how can you make good or effective decisions?
Is this your decision? The best way to make good decisions is to first determine if it is even your decision to make. Entrepreneurs — and here I speak with some experience — love to be in the thick of things. “The equipment is stuck in Customs. We won’t be able to ship our product on time. What do we do?” “He won’t accept our offer without a joining bonus. Should we offer him one?” “The customer will not issue a purchase order without a penalty clause. Do we agree to one?”
Issues like these will keep popping up all the time. While you may love playing Captain Crunch, the one everyone goes to for decisions, you would be mistaken to offer one for every question posed. If you want your business to grow and, importantly, if you want to have a personal life, it is critical that most decisions be made by other people. That is the first decision you have to make every time, answering the question: Is this a decision someone else should be making?
So how do you determine which decisions are yours to make? I’d recommend that you use the following simple guideline — if a year from now it would still matter what decision you make now, then it is probably something you want to be involved in. For instance, agreeing to a penalty clause in a multi-year contract with the Government will matter. Similarly, anything that involves the culture of your organisation or shareholding or capitalisation would make the cut. Most other decisions can probably be made by someone else. Which of course brings up the question: How do you ensure that the decisions others make do not drown your business?
Decision mechanics Having a well thought out and tested process for decision making will not only help you but your entire team make the right decisions. Here again, I refer to the work of Peter Drucker who spells out a five-step decision-making process. They are:
Comprehending the nature of the problem or decision — is it generic or an exception?
Understanding the boundary conditions of the problem.
Figuring out the right solution without considering real world compromises that might be needed.
The action required to execute the decision.
Validating the appropriateness of the decision once taken.
At first glance, it may seem tough to figure out what to do if your product won’t ship on time. Most operational issues do not require executive decision making. As in the example of agreeing to a penalty clause in your Government order or deciding to do business with the Government or setting up an overseas distributor — issues that will have a long-term impact on your business — a well thought out process helps. Further, it allows your senior staff or other partners to use the same methods and yardsticks to make their decisions. This way your direct presence or involvement is not needed in each time.
Drucker makes the point that one rarely encounters truly exceptional cases. Most situations you encounter, even if new to your business, are generic and would require a rule to be fashioned. “We don’t sign penalty clauses in our contracts or any penalty or liability clause cannot exceed the value of the contract itself,” is a rule you can formulate. “We may offer discounts or walk away but no penalty clauses,” is another. It is critical to define the problem before you attempt to make a decision. This requires the first three steps to be followed rigorously. Subsequently, dealing in the real world rather than in some ideal scenario, it is important to ensure that the solution is effective. And this should not merely be faith-based but data-driven; such validation after a decision is made will ensure you continue to make good decisions or learn from bad ones.
The five steps could take a few minutes in some instances and a few weeks in others. Either way, it will help you make measured decisions. Needless to say no process is infallible and good leaders trust their instincts. Of course, great leaders know when not to rely on their instincts but to get the data first.
Not making a decision is a decision The former Indian Prime Minister P. V. Narasimha Rao epitomised the art of non-decision making or so it seemed. Legend has it that he’d avoid making difficult decisions and in time, the problem would disappear or resolve itself. As an entrepreneur you will rarely have the luxury of ignoring decision making. That is not to say you will not do it. I have avoided the hard decision to let go of some difficult employees, as my staff keep reminding me frequently. Such avoidance of decision making is the classical ostrich-sticking-its-head-in-the-sand syndrome.
It is critical to recognise that it is a legitimate decision when you decide to not make a decision. It’s worth reading the previous sentence more than once — it is not intended as a play on words. Choosing to not make a decision is completely different from avoiding a decision. The difference is that you have made an explicit choice, one with consequences that you understand and are prepared to live with. Such a choice is particularly appropriate when it is evident that the situation will take care of itself. More importantly, it is of little importance, even if annoying, and is unlikely to have any material impact. In such circumstances, it is worth keeping in mind the Roman edict, “De minimis non curat praetor”or “the magistrate does not consider trifles!”
This article was published in the Business Line print edition dated November 17, 2008
Life has a nasty way of springing surprises on you. The only certainty, it would appear, is that you will encounter a lot of uncertainty. Being an entrepreneur is no different. If you are like me, you might have thought you made your hardest decision when you chose to become an entrepreneur. Wrong! Before you know it, the business, customers, employees and the world at large are bringing problems that require you to make decisions. There also seem to be few easy decisions. Why didn’t anyone tell you about this? Well, you heard it here first — much of your productive time as an entrepreneur will go to making, hopefully, good decisions.
“Effective executives do not make a great many decisions. They concentrate on the important ones,” says Peter Drucker in his book The Effective Executive. Simple as Drucker’s assertion sounds, it is hard in the fog of entrepreneurial battle to focus on the important few. So how do you identify the important from the merely urgent or routine problems? Having identified these, how can you make good or effective decisions?
Is this your decision? The best way to make good decisions is to first determine if it is even your decision to make. Entrepreneurs — and here I speak with some experience — love to be in the thick of things. “The equipment is stuck in Customs. We won’t be able to ship our product on time. What do we do?” “He won’t accept our offer without a joining bonus. Should we offer him one?” “The customer will not issue a purchase order without a penalty clause. Do we agree to one?”
Issues like these will keep popping up all the time. While you may love playing Captain Crunch, the one everyone goes to for decisions, you would be mistaken to offer one for every question posed. If you want your business to grow and, importantly, if you want to have a personal life, it is critical that most decisions be made by other people. That is the first decision you have to make every time, answering the question: Is this a decision someone else should be making?
So how do you determine which decisions are yours to make? I’d recommend that you use the following simple guideline — if a year from now it would still matter what decision you make now, then it is probably something you want to be involved in. For instance, agreeing to a penalty clause in a multi-year contract with the Government will matter. Similarly, anything that involves the culture of your organisation or shareholding or capitalisation would make the cut. Most other decisions can probably be made by someone else. Which of course brings up the question: How do you ensure that the decisions others make do not drown your business?
Decision mechanics Having a well thought out and tested process for decision making will not only help you but your entire team make the right decisions. Here again, I refer to the work of Peter Drucker who spells out a five-step decision-making process. They are:
Comprehending the nature of the problem or decision — is it generic or an exception?
Understanding the boundary conditions of the problem.
Figuring out the right solution without considering real world compromises that might be needed.
The action required to execute the decision.
Validating the appropriateness of the decision once taken.
At first glance, it may seem tough to figure out what to do if your product won’t ship on time. Most operational issues do not require executive decision making. As in the example of agreeing to a penalty clause in your Government order or deciding to do business with the Government or setting up an overseas distributor — issues that will have a long-term impact on your business — a well thought out process helps. Further, it allows your senior staff or other partners to use the same methods and yardsticks to make their decisions. This way your direct presence or involvement is not needed in each time.
Drucker makes the point that one rarely encounters truly exceptional cases. Most situations you encounter, even if new to your business, are generic and would require a rule to be fashioned. “We don’t sign penalty clauses in our contracts or any penalty or liability clause cannot exceed the value of the contract itself,” is a rule you can formulate. “We may offer discounts or walk away but no penalty clauses,” is another. It is critical to define the problem before you attempt to make a decision. This requires the first three steps to be followed rigorously. Subsequently, dealing in the real world rather than in some ideal scenario, it is important to ensure that the solution is effective. And this should not merely be faith-based but data-driven; such validation after a decision is made will ensure you continue to make good decisions or learn from bad ones.
The five steps could take a few minutes in some instances and a few weeks in others. Either way, it will help you make measured decisions. Needless to say no process is infallible and good leaders trust their instincts. Of course, great leaders know when not to rely on their instincts but to get the data first.
Not making a decision is a decision The former Indian Prime Minister P. V. Narasimha Rao epitomised the art of non-decision making or so it seemed. Legend has it that he’d avoid making difficult decisions and in time, the problem would disappear or resolve itself. As an entrepreneur you will rarely have the luxury of ignoring decision making. That is not to say you will not do it. I have avoided the hard decision to let go of some difficult employees, as my staff keep reminding me frequently. Such avoidance of decision making is the classical ostrich-sticking-its-head-in-the-sand syndrome.
It is critical to recognise that it is a legitimate decision when you decide to not make a decision. It’s worth reading the previous sentence more than once — it is not intended as a play on words. Choosing to not make a decision is completely different from avoiding a decision. The difference is that you have made an explicit choice, one with consequences that you understand and are prepared to live with. Such a choice is particularly appropriate when it is evident that the situation will take care of itself. More importantly, it is of little importance, even if annoying, and is unlikely to have any material impact. In such circumstances, it is worth keeping in mind the Roman edict, “De minimis non curat praetor”or “the magistrate does not consider trifles!”
Over the last several years, I have written about startups, entrepreneurship and business in general in the Hindu BizLine and Wall St. Journal. I have compiled these for easy access in the column below.
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