Posts Tagged reputation

Balancing Linear and Nonlinear Thinking in an Entrepreneurial Setting


Imagine how entrepreneurs differ in their thinking from people running larger businesses. Linear thinking means a person thinks sequentially. Nonlinear thinking is different because no order exists in how a person thinks. I remember a situation I had highlighting the difference in these ways of thinking. Entrepreneurs embrace a more balanced approach employing both linear and nonlinear thinking skills.

To explain, I remember when I went to residency training for my doctoral work when an professor placed us in teams for a project. I had one member of my team with a military background. Although I found my previous experience with military people positive, I had a different experience with this particular person.

In my experience as an educator I taught several classes at Edwards Air Force Base in Southern California and always found the people in my classes ready and willing to learn. I believe the military training these people received made them disciplined and develop good study habits. I found military students usually completed and turned their work in on time.

The gentleman in my residency class, who I shall call Mr. Roboto, gave me a different experience. Although Mr. Roboto eagerly wanted to take on the project, he quickly assumed the leadership, and dictated terms of the project. The suggestions from other people on the team he quickly dismissed in favor of his own ideas. Reflecting on this experience, I found this person’s approach highlighted linear thinking. Everything Mr. Roboto did expressed the “my way or the highway” approach and gave me a new appreciation of military thinking.

As a seasoned entrepreneur, I had a hard time dealing with Mr. Roboto because he dictated and never listened to anyone else on the team unless they agreed with him. Entrepreneurs often have more nonlinear thinking skills and thrive in a team setting, but Mr. Roboto put himself at the top of the chain of command and did not accept ideas from other team members. I found the approach Mr. Roboto took stifled creativity and more in line with the approach taken by a larger business.

In my studies, I found a better balance between linear and nonlinear skills is more desirable in my area of focus on entrepreneurship. Groves, Vance, and Choi (2011) found entrepreneurs have a greater balance between linear and nonlinear critical thinking skills and more education contributes to improving the balance.

My experience highlights some of the differences in how entrepreneurs think, organize a culture conducive to creativity, and lead. Entrepreneurs normally reject command and control settings and value more flexible organic settings. Mintzberg (1980) described entrepreneurs favoring adhocracy. Adhocracy relies on mutual adjustment in a decentralized, lively setting seeking harmonization. Masood, Dani, Burns, and Backhouse (2006) explained leadership in an adhocracy as visionary, innovative, and risk-oriented. Entrepreneurs collaborate and guide workers using continuous feedback loops.

A hierarchy culture stresses more formal setting and policies guiding what workers do. The hierarchy culture focuses on stability, predictability, and efficiency. Formal rules and policies are the glue holding the organization together (Masood et al., 2006). Mr. Roboto embodied the hierarchy culture, which clashed with the adhocracy culture I worked in as an entrepreneur. Mr. Roboto relied on command and control and avoidance of risk.  No wonder I had such a difficult time in this group.

Entrepreneurs balance linear and nonlinear thinking and a good education helps the entrepreneur employ the right thinking to the proper problem. Entrepreneurs avoid all or nothing thinking and value collaborating with a team. Are you a linear thinker or do you have what it takes to balance linear thinking with nonlinear thinking? Please  leave a comment. Learn more.

References

Groves, K., Vance, C., & Choi, D. (2011). Examining entrepreneurial cognition: An occupational analysis of balanced linear and nonlinear thinking and entrepreneurship success. Journal of Small Business Management, 49(3), 438-466. doi: 10.2307/259034.1999-08070-001 10.2307/259034 10.1287/orsc.9.5.543.

Masood, S., Dani, S., Burns, N., & Backhouse, C. (2006). Transformational leadership and organizational culture: The situational strength perspective. Proceedings of the Institution of Mechanical Engineers — Part B — Engineering Manufacture, 220(6), 941-949. doi: 10.1243/09544054JEM499

Mintzberg, H. (1980). Structure in 5’s: A synthesis of the research organization design Management Science, 26(3), 322-341. doi: 0825-1909/80/2603/0323^1.25

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Starting a Business is Like Running a Marathon


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.

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How a Turnaround is Like Founding a New Company


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.

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Dr. Phil’s Fables of Entrepreneurship: Part I


The Falcon and the Pitcher

A falcon exhausted with thirst flew with glee to an abandoned pitcher hoping to find water. When the falcon reached the pitcher, it found so little water that it’s beak could not reach it. The falcon frantically tried everything to reach the water, but its efforts were in vain. Finally, the falcon took a collection of stones and dropped them into the pitcher one at a time bringing the water into its reach.

Moral of the story: Persistence is the mother of invention. Never give up.

The Owl and the Rodent

An owl in great need of food saw a rodent asleep in the grass and flew down and grasped him. Bewildered, the rodent turned and bit the owl a mortal wound. In agony, the owl exclaimed, “Oh unhappy me! I found what I thought a happy windfall only to find the source of my own destruction. ”

Moral of the story: Do not underestimate competition from the entrepreneur as it may prove the source of your “creative destruction.”

The Boasting Traveler

A man traveling in foreign lands liked to boast upon return to his native country about historic feats he had performed in the places he visited. The man exclaimed, while traveling at Rhodes, he had leaped a distance no other man could leap and had witnesses who could attest to his achievement. A bystander interrupted and said, “Good man no need for witnesses. Suppose this is Rhodes. Aust leap for us.”

Moral of the story: If you can’t see it, you can’t believe it! Success starts with vision.

The Ass and the Purchaser

A man wanting to purchase an ass agreed with its owner to try the animal before buying it. The man took the ass home and left it in the straw yard with his other asses. The ass joined another that was most idle and the biggest eater. When the man observed this behavior he took the ass back to its owner. The owner asked the man how in such a short time he could make such a decision to return the ass. The man answered,” I do not need a trial. I know the ass will be the same as the companion it selected.”

Moral of the story: Take care in selecting who you associate with.

The Boy and the Nettles

The boy was stung by a Nettle. The boy ran home and told his mother, saying,” Although it hurts me very much, I touched it gently.” The boy’s mother responded,” that is why it stung you. The next time you touch a Nettle, grasp it boldly, and it will be soft as silk in your hand and not in the least hurt you.”

Moral of the story: Use a full effort in everything you do.

The Ants and the Grasshopper

The ants spent a fine winter day drying grain from the summertime. A grasshopper, succumbing to famine, passed by and begged for some food. The ants asked,” why did you not gather up food in the summer?” The grasshopper responded,” I had not enough leisure. I spent the day singing.” The ants responded in derision, “If you’re foolish enough to sing all summer, you must dance supperless in winter.”

Moral of the story: You must plan today what you will need tomorrow. Never run out of cash, which is the lifeblood of the firm!

The Eagle and the Fox

An Eagle and a Fox formed an intimate friendship and decided to leave live near each other. The Eagle built her nest in the branches of a tall tree, while the Fox crept into the underwood and there produced her young. Not long after they had agreed upon this plan, the Eagle, being in want of provision for her young ones, swooped down while the Fox was out, seized upon one of the little cubs, and feast herself and her brood. The Fox on her return, discovered what had happened, but was less grieved for the death of her young than for her inability to avenge them. A just retribution, however, quickly fell upon the Eagle. While hovering near the altar, on which some villagers were sacrificing a goat, she suddenly seized a piece of flesh, and carried it, along with a burning cinder, to her nest. A strong breeze soon fanned the spark into a flame, and the eaglets, as yet unfledged and helpless, were roasted in their nest and drop down dead at the bottom of the tree. There, in sight of the Eagle, the Fox gobbled them up.

Moral of the story: Do unto others as you would have them do unto you. Treat others how you want to be treated.

Please leave a comment about the lessons learned from the fables.  Want to learn more?

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Business Reputation No Longer Matters


I have seen many examples in recent years where it appears reputation no longer matters. Starting with the financial crisis behemoth companies like AIG, Goldman Sachs, Bank of America, and a myriad of others have fallen to scandal only to come out with renewed vigor. So what does it mean when a company falls out of favor because of scandal or financial ineptitude? Why do companies work so hard to build a brand only to lose their reputation to scandal?

Seemingly, some companies believe they can have a double standard and believe it’s okay to “do as I say and not as I do.” Why do these companies jump right back into business and rebuild so quickly? Is it because reputation no longer matters?

I believe the problem is a leadership problem of trying to keep a double standard. What’s good for the goose isn’t good for the gander. Weren’t things better when we could trust companies to obey their own standards? Isn’t that what leadership is all about?

I believe leadership is about valuing people to carry out a common vision and trust is the main ingredient needed to develop leaders. Why do companies not spend more on training executives on developing their leadership skills? Are they too arrogant and insensitive to open and honest feedback or do they believe their reputation no longer matters?

Think about what people are buying. I see more people buying generic brands and putting less value on major brand names. I go to Wal-Mart and see generic foods just as good as the major brands for less money. I see the same thing happening with other products. Just yesterday I was looking at lawnmowers and I only saw brands I never heard of before. Whatever happened to an automobile with a body by Fisher? Does anyone care about the brand or do people go for the value?

AIG, Goldman Sachs, General Motors, and Bank of America are right back at it with renewed vigor and one would think these brands would have had some damage. I am sure you can think of others. These companies spend huge sums on advertising to replace customers. Can we trust these brands?

I still believe reputation is critical for success and trust matters. I believe in a new breed of leader that people can respect and trust. Why do today’s executives do okay without the respect and trust of their workers and customers? Why do they need double standards? Have we lowered our standards as consumers?

Please leave a comment or visit us for more. I want to know your thoughts. Does reputation matter?

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