Posts Tagged controlled chaos
Errico (2010) shared the following story about the Great Hill:
Before time was time, there was a Great Hill.
And on the Great Hill there lived the Yolks.
The Yolks spent their entire lives climbing the Great Hill, trying to reach the top.
Some Yolks climbed fast.
Some Yolks climbed slowly.
One Yolk in particular was a very slow climber. He was different than the rest of the Yolks.
When he climbed, all the other Yolks passed him.
It was hard for him to watch them pass by.
He felt like the worst climber in the world.
Some Yolks made fun of him as they passed.
Some Yolks wanted to help him climb but he didn’t let them.
It was hard for him to climb. It was even harder when it rained because the ground got slippery. Sometimes it seemed like it was only raining on him.
But it wasn’t.
There were times when he felt like he wasn’t moving at all.
But he was.
Then one day he met another Yolk who climbed even slower than he did.
He helped the slower Yolk climb.
“Thank You,” said the slower Yolk.
“You’re Welcome,” said the slow Yolk, “I can’t be of much help to anyone else since I climb so slowly.”
“Slowly?” asked the slower Yolk.
“Well yes. I watch other Yolks pass me all the time.”
“I do not know if you are slow or fast, but I do know that you helped me, and that you are still climbing.”
The slow Yolk said goodbye to the slower Yolk, and kept climbing.
“Still climbing,” he thought to himself.
“That is true.”
And he smiled.
So the Yolk kept climbing. He climbed when it was nice out, he climbed when it rained, and he even climbed when it snowed.
As he kept climbing he got better and better.
Sometimes he would pass other Yolks and sometimes they would pass him.
He had stopped paying attention.
He also noticed that some Yolks were no longer climbing.
When a yolk stops climbing it stays where it is.
Some Yolks stop climbing because they are happy with how far they have gone.
Others stop climbing because they don’t want to climb anymore.
The Yolks that had stopped climbing did not like to be passed, and they made it harder to get by.
But the Yolk kept climbing, right over them!
There were still times when the Yolk thought he was climbing an impossible hill, but he kept climbing.
Always, always, climbing.
Do you think he made the top ?
The Great Hill story highlights the entrepreneurial journey. Often entrepreneurs climb slowly to get to the top of the hill, but must persist to reach the top. Entrepreneurship is about persistence and keeping focused on the end goal (to reach the top of the hill). Some entrepreneurs climb more slowly than others, but the challenge is in the journey to the top.
Entrepreneurs recognize others want to trounce them and say, “I told you so,” but filter out the negativity and keep moving on the journey despite the odds against them. Few entrepreneurs are on the fast track, but advance at their own pace. Successful entrepreneurs preserve their passion by settling at a comfortable pace instead of racing to the top of the hill.
Most important, successful entrepreneurs do not let the competition intimidate them. Successful entrepreneurs want to help others succeed in their journey. The key is to keep moving toward the top of the hill no matter what position the entrepreneur is in at a given time.
As the entrepreneur approaches the top of the hill he or she notices other entrepreneurs quitting or conceding on their journey. The successful entrepreneur just keeps going no matter what the pace. The successful entrepreneur knows his or her limits and works within them.
Think about the Great Hill story! How do you describe your entrepreneurial journey? Are you working within your limits at a comfortable pace or are you trying to race to the top of the hill? If you want to get to the top of the hill and avoid stalling before getting there, let us help you find a comfortable pace and help you work within your limits. Learn more.
Errico, D. (2010, December 7). The great hill. Free Children Stories. Retrieved from http://www.freechildrenstories.com/story_details.php?st_id=156
I started running late in life when two of the guys at worked challenged me to run a mile with them. I worked at a large hospital at the time and worked and often socialized with two guys. One managed patient accounts and the other was a consultant from Andersen Consulting (now Accenture). At the time, I was overweight and wanted to lose some weight. The challenge we made with one another stipulated that whoever quits has to buy whoever keeps running dinner. Guess what? I am the guy who did not quit and I went on to become fanatical about my running. The other guys treated me to a free dinner.
Good entrepreneurs are like runners because they do not quit. I used to tell myself, “one foot in front of the other.” Entrepreneurs should tell themselves something similar like take it a step at a time, but whatever you do, do not quit. Similarly, an entrepreneur should take an active interest in the business he creates. The entrepreneur should also give himself small rewards along the way like the free dinner I received from my work associates.
Okay, so after this first episode I continued to run. I started running about three miles about three times a week through my neighborhood, but then the fall came. Another friend of mine wanted to join a new health club so we could play racquetball. I went to the club and signed up with him to play racquetball, but we started our routine doing a workout. I noticed the club had an indoor running track and next time I brought my running gear so I could run a little first before playing racquetball.
Next time we visited the club, I started running first before our game. I met some nice people on the track who encouraged me to run the Chicago Marathon with them. My racquetball friend did not like running and our racquetball games quickly stopped, but running with my new friends continued.
Starting a business is like running because you develop and nurture new relationships. After our runs we would go upstairs to the bar and have a few beers and have a good time. We forged a strong relationship with each other. We talked about our plans for the marathon. Starting a business is similar to planning to run a marathon because a business founder plans his business and develops strong relationships in forming those plans. A business founder does not exist on an island, but collaborates with those he trusts. A good business depends on good relationships.
As the date of the marathon approached, we trained together encouraging one another. We trained inside and out depending on the weather. We continued encouraging one another on our runs and discussed different strategies to take to complete the marathon and run a good time. A few of my friends fell to injuries, but most of us went on to the marathon.
A new business is similar because some relationships will stop and others will continue depending on who is the fittest. The camaraderie continues as the goal comes into sight. The new business founder has to keep his goals in front of him just like a person wanting to complete the marathon. The new business founder continues to forge relationships with the fittest of his relationships.
The day of the marathon finally arrived and the weather was perfect. I started out slow to pace myself. I learned from running with my friends I am an endurance runner, but not too fast. However, my friends pushed me to improve my time. Running a new business is similar to the marathon because business associates push you to do better and recognize your abilities.
During the marathon I built speed as the race progressed and I loved the cheering crowd’s encouragement. As the I approached the twenty mile mark, runners started to hit the wall and drop from the race, but I continued to press on. Running a new business is like running a marathon because some people hit the wall, while others press on to the finish. Customer encouragement helps the new business put the final goal in sight. A new business needs customer feedback to stay on course and complete the race.
As I approached the finish I saw many struggling to continue. Some stopped or walked as they headed to the finish. I felt good as my training paid off and I decided to pass as many people as I could. I surged to the finish picking off as many competitors as possible and I could finally see the time clock at the finish. I knew I had beat my goal and a good feeling it was.
Starting a new business is like running a marathon because training pays off and allows an entrepreneur to surpass the competition. The goal of the entrepreneur becomes clearer as the founder approaches the finish line and it feels good to beat the goal.
As I crossed the finish, a few of my faster friends greeted me and I waited with them to see the others of us who finished. One by one I greeted the rest of my friends as they completed their journey. Running a business is like running a marathon because the encouragement continues throughout the journey. The camaraderie continues as those who make it have cause to celebrate.
Are you ready to run the marathon and start your own business? Learn more.
Once I took a position as the chief financial officer of an organization with a history of over 100 years. The institution in its early years thrived because of its location bordering a city nearly the size of Chicago with a booming coal mining industry. The location bordered on the one of the Great Lakes cutting off half the circumference of the target market.
Eventually, the coal mining industry declined and the city bordering the organization dwindled in population because of lack of other industry in the area. Recreation supplied the next biggest industry in the area because of ideal conditions for snowmobiling, cross-country skiing, and other winter sports. In the summer, the area provided ideal conditions for hunting and fishing. These industries failed to provide enough jobs and opportunities to keep the city alive.
The organization I worked for had its numbers drop by nearly 70% because the organization depended on people within a hundred mile radius of it. When I arrived I found the finances in a shambles and an accumulated deficit resulting in a negative net worth. At first, this condition alarmed me, but I knew I had a calling to turn this ship around.
A turnaround of this magnitude is like starting a new business because it needs a radical transformation. Fortunately, the executive team committed to a radical transformation of finding a new model for the organization that would turn around the organization and create positive cash flows. Weekly we explored new ideas and acted on cutting drains on the organization’s cash flows. In this way, the turnaround is more difficult than starting a new business because a new business does not have to deal with getting rid of existing programs causing a drain on cash flows.
The result of these efforts balanced the organization’s budget and identified new programs capable of producing positive cash flows. When I did my doctoral research I discovered that many companies that go public have accumulated deficits of the same magnitude and about 70% of them eventually fail. This revelation surprised me and I thought about how many companies can use the same help a turnaround expert provides. Big and small companies have similar failure rates. ‘
Although the cause is different, the need to identify a working model is the same. Without transforming an organization by finding a working model that produces positive results any organization will subject itself to failure. This revelation also caused me to think about the benefits of going public versus remaining private. Often, companies go public far before they rightfully should and prematurely remove the founder whose role it is to find a working model.
Public companies start to create more bureaucratic settings, while the organization needs to stay nimble enough to allow the working model to develop and meet consumer needs. Bureaucratization adds costs and reduces flexibility to adapt to make the model work. I believe many companies act too fast to go public because they believe it provides a safety net for raising capital. I believe a slower more deliberate growth may benefit many companies and allow the founders to keep their company and learn how to manage it instead of getting shown the door. Founders work hard and if they are serious should hold on to their creation and learn how to improve it.
I believe other consultants place too much emphasis on getting big too fast. Companies might do well to slow down and grow organically than fall prey to seeking the safety net of a public company. Slowing down allows the founder to start to see the forest from the trees and build a sustainable model without risking the founder’s position.
My company works to build organic growth by building on gaining the experience and education needed to grow organically. I believe a serious entrepreneur has an attachment to his or her creation and needs a different focus to preserve an identity with the company the founder creates.
What is your goal in founding a company? Would you prefer to stay involved in the company you create or do you want to exit and put the company in someone else’s hands? Please leave a comment to let me know your view.
If you are serious about preserving your identity with the company you want to create I urge you to try the services of my company by signing on now.
I often see bankers trying to lure small business owners into letting them help manage their cash flows. Although managing cash flows is critical for the small business owner, I question the value of going to a banker for help. In my experience, many bankers only have banking experience and little other tangible business experience. Banks concern themselves with cash flows mainly to ensure customers produce enough funds to pay the bank back. Is this approach enough to create enough cash to run your business?
Banks do not provide services without some form of compensation and may charge fees for managing cash flows. Banks often have no understanding of your business and what it takes to increase cash because all they understand is that you must sell more without understanding the tactics it takes to make more sales. Many times banks simply focus on cutting costs without considering new ways to raise revenues. Is this the approach you need?
My advice to the small business owner is to look at your own cash flows daily. Looking at your own cash flows will help understand where to increase revenues and where to cut costs. The business owner is the person who needs to decide how to increase cash and how to cut it not some outside party with little experience in your business. A business owner can look at the environment in which the company works and do some scanning to see what best fits the company’s model.
A company that does need help should employ a coach or an analyst to help design a procedure for the owner to make his own daily evaluation of cash flows. A coach or an analyst can also help the small business owner asked the right questions about what to add to improve revenues and what to cut to decrease costs. Experience and education are key ingredients in deciding what revenues to improve and what costs to cut. A good consultant is worth his or her weight in gold in helping the small business understand how to produce enough cash flows to keep a profitable business.
In my view, a good coach or consultant is there to guide you and help you develop the experience you need to make intelligent cash flow decisions. Yes a good coach or consultant comes with a cost, but the cost pays for itself because the small business owner benefits from learning how to manage his or her own cash flow. Do you want to learn more? Do you think you can get the same service from your banker?
Entrepreneurs do not spend too much time planning, but often consider opportunities arising from uncertain conditions as they deal with original ideas. As new opportunities come into focus original ideas can garner new value not considered when the entrepreneur acted on an original opportunity.
Larger companies use net present value, internal rate of return, payback period, and many other sophisticated methods to evaluate cash streams from capital investments. Often these companies do not consider the “real options.” Capital budgeting involves understanding time value of money and probability analysis, which many entrepreneurs may not have learned about. The idea involves evaluating projects like a game of chance using the time value of money and probability analysis.
For example, the idea is similar to a card game in a casino and playing the odds. The player finding the project with the best odds usually wins. The concept of “real options” evaluates cash flow using net present value and the odds for each alternative to decide if the project has future value. If the expected value in a project turns negative the player can cut bait to minimize losses. On the other hand, continued investing may give the player an option to chase a project with a dubious future value.
Sometimes early losses can reverse and turn profitable. Without committing to an investment in a project, the entrepreneur may not see any prospect for net present value turning positive and not invest in the project. Thus the entrepreneur may find a project is worth investing in because the chances are good the net cash streams will turn positive sometime in the future.
“Real options” offer the entrepreneur a call option to help decide when to cut bait or to continue with a project. Without a sense of what lies ahead the entrepreneur may overlook good projects and exit too soon leaving the prize for someone else to discover.
What alternatives do you consider when deciding to invest in projects for your business?
I see some of the events going on in the business world today that make me wonder where the leadership is. I believe many so-called “leaders” in big companies are nothing more than managers. What training do they have in leadership or did they just reach their position by using excellent managerial skills? What do these people feel for their employees and for society?
A good example is in the political setting today. I wonder what planet some of these people came from. Some of them use the term leader so loosely it makes me sick to listen to them. I hear too much “my way or the highway” in the political world polarizing the electorate so politicians get nothing productive done. I ask, “How is this leadership?” Leaders collaborate and work well in teams. Do we even have a team working to solve problems in government anymore? Everything I see is a stalemate of polarized views. A leader is not a divider, but a person who unifies an organization to achieve a common goal.
A leader has a vision and uses it to attract followers. A manager simply commands attention by using management tactics to take advantage of others for self-motivated reasons. Often business plans sit on a shelf collecting dust. A leader works his or her plan, but stays nimble in its execution. A leader has a connection with followers by listening and using emotion to win followers over. A manager simply commands people the only way to do something is his or her way.
Managers are many times smart people and know precise skills, but a leader knows how to connect with others and change the way they think. A leader is flexible and wants to know what others think. A manager has a superiority complex because the skills he or she has makes him or her feel superior to others. A leader finds value in finding the right people to learn from instead of relying on his or her own skills.
I see more opportunities for people wanting to become small business entrepreneurs to use leadership. Right now the world needs more leadership and I encourage people with a good idea to exercise their entrepreneurial spirit. A person must have leadership skills to become a successful entrepreneur as a good manager will just not cut it. Casualties are too high for new start-ups so people with an idea and leadership skill have a calling waiting for them as a small business entrepreneur.
Do you have what it takes to start a business? Start by considering your leadership skills. Learn more.
I remember when I started my first business how frustrated I became when everyone wanted to reject my business plan. Everyone wanted to say, “Your plan is not good enough, “You can’t do that,” “Your numbers don’t add up,” or some other lame reason to reject me. I don’t even remember them all. The average person might just say, “I’ve had enough,” I tried,” “I give up,” or “Maybe everyone else is right.” I thought who are these people who do not know the first thing about my business to make these disparaging remarks. Do these people even care?
After finally getting the loan I needed to start my business, these comments didn’t even make a difference to me. I was free and I could put my focus on my passion. Now is the time to prove the naysayers wrong!
Unlike some I am not a quitter. Think about it! Would you rather work with someone who is persistent, diligent, determined, vigilant, and deliberate or would you prefer to work with someone who quits? Do you want someone who helps take a project to reach its final conclusion or someone who simply walks away without giving it the effort it deserves?
I know what I prefer, and it’s not quitting. I know I have it in my DNA to never to give up. I yearn to achieve what I set out to achieve and do not let little setbacks stand in my way. I am energized by learning more about my business so I can serve my customers better. For me the fun is in getting to my goal, not settling into a comfortable position. If you want a comfortable position get a job. What I do is not a job; it’s an eternal fire I need to put out.
If you don’t have the fire, I suggest quitting now. Do you want to learn more?