Posts Tagged ‘shark tank’

Top 10 Things to Avoid in Business!

July 26, 2010

Some obvious, some NOT so obvious!

Overhead – Bigger is not always better. Don’t add Overhead for Overhead’s Sake (O4O). Overhead and infrastructure really depend on what your ultimate outcome or exit plan is: Create an empire or a cash-flow machine? Although infrastructure (human capital, office space and marketing) is deeply discounted right now, one must evaluate if technologies and outsourcing can be used to reach maximum return. Oftentimes, a giant office space doesn’t allow for the flexibility and mobility that this economy commands. Flexibility can be one of our greatest strengths while Elimination can be a path to enlightenment: “Simplicity is the key to brilliance…Absorb what is useful, Discard what is not, Add what is uniquely your own.” –Bruce Lee

Anti-Automation – The worst thing one can do in a business is fail to create systems. Scalability and profit depend on it! If you have to replace someone due to one of the principle’s outlined below then you will need to have systems in order reduce the reliability on one employee. A component of the business can’t be in one person’s mind or on a collage of sticky notes. If you don’t automate your business and take yourself out of the equation you are creating a JOB.

Conundrums – Avoid having to solve a series of problems in order to solve the one real underlining issue that needs to be solved in order to get the result(s) you need. Again, keep things simple and automated. Avoid the Cheesecake Factory mentality and strive for the Southwest Airlines / In & Out Burger Menu. You can be the “master of complication” in your own mind but not in business.

Time VampiresTime Vampires can come in many forms:

Busy people” that run in circles and never get anything done. They seldom ever get results and rarely solve problems. And usually can’t change and adapt. They focus 95% of their time focusing in on the activities that don’t get direct results and 5% on of their time on activities that yield direct results” Mostly “Work for Work’s Sake (W4W)” – Tim Ferriss

Talkers” are almost as bad as “busy people” they are the ones that “know everybody but really know nobody” or the false “Connectors” that never are able connect their so-called “connections.” These people never want to dig in and “work.” They just want to make money off of “introductions or “overrides” (Which is fine for the lone-rangers but has no place within a real business)

Social Media Expertslock-down everyone’s computer and don’t allow anyone on any site, software or program that isn’t necessary to complete a task, period! “But…I need to check my personal email, but I need to check my bank account, but a need to get on my social network real quick, but my friend sent me a funny email, (personal emails to company email prohibited)” Answer = TOO BAD. “But I read somewhere that it makes for a more productive and happy workplace” Answer = B.S. Do personal things on your own time, have fun focusing 90% of your time on profit generating activities and the day will fly by. You’ll then have plenty of personal time to do personal activities to create balance. Time Management is about blocking your time. If you feel it is necessary to allow personal computer time then put an off-network, virus-ridden, community computer smack dab in the middle of the room that everyone has to sign up for. If the culture is truly performance driven then the team will make fun of anyone who jumps on it.

As Neil Strauss says: Every second Counts!

Open Door Policy – I hear it all the time “I am the CEO of XYZ Corporation and I have an open door policy with all my employees on all levels. I don’t want to seem “unapproachable” and I want employees to be able to come to me with their “problems.”” In my opinion this is the worst way to lead an organization. How are you going to be creative, strategic and effective if you let other people’s agendas become your vision? How can you manage profit and growth? Remember, “Trying to get everyone to like you is a sign of mediocrity.” – Colin Powell and “…the key to failure is trying to please everybody” – Bill Cosby. Imagine when you have 250 employees that all want to get 2 minutes of your time everyday so they can cry about their problems or come up with the next new “brilliant idea” instead of following the system. Let’s assume that you work 8 hours (480 Minutes)/day. 250 employees with an urgent unimportant issue x 2 minutes = 500 minutes. Your day has just been sucked up by someone else’s agenda. If it is really important they can always request an appointment with you. Oh, and one more thing your employees are NOT your friends so therefore NEVER hire your “friends.” “If you love life, don’t waste time, for time is what life is made up of.” –Bruce Lee

Personal Guarantee (PG) – Never ever, ever sign a personal guarantee. If things ever happen where you make one too many mistakes, hire that one wrong person, get a psycho client and/or something out of your control happens you will end up Bankrupt or in a short sale. Business is not personal and a business is not you, it is a separate entity/soul. All you can do it control the things you can control. Always keep your integrity; always do whatever it takes to resolve things and constantly do your best to adapt and find a way. If the vendor asks for a PG ask for a higher rate instead.

If you operate as a corporation all documents should be executed as follows:

Where indicated to Print Name: Print Company Name

If indicated to additionally Print Individual Name: Print Name, President

Where indicated to Sign Name: Signature, President

If you operate as an LLC all documents should be executed as follows:

Where indicated to Print Name: Print Name, Member

If indicated to additionally Print Individual Name: Print Name, Member

Where indicated to Sign Name: Signature, Member

*Disclaimer: I am not an attorney and this post is not legal advice. Please seek a competent attorney for professional legal advice.

Misaligned/Incongruent Values – If your goals are to create opportunity for customers and employees alike, positively impact as many lives as possible and create one of the largest conglomerates in the world then don’t value opportunity, charity, growth and a performance driven culture above profit. The sole reason a business is in business is to profit, period. If along the way you create opportunity, change lives for the better, make an impact on society and grow – great. A business is not a place to “fix” people it is a place to collectively attract talent in order to add value. If you want to do charitable work then start a charity and keep the charity work out of the business. If everyone is “fixed” and everyone has been given opportunity at the cost of profit there will eventually be no opportunity to give. Don’t overdue opportunity, it is easy to do and can really create a sense of “entitlement” within the company culture.  In a culture “where anything goes eventually everything will!”

Blanket Partners – I’ve never been a big proponent of having a partner or partners but sometimes it can make sense. Make sure, if you do, you make a fair deal for all sides based on what each of you brings to the table. Never, ever, go 50/50 just for the sake of going 50/50. Never make a win-lose partnership, eventually the loser will find a way to get out of the deal no matter what you do. It is important to go in correctly upfront and in writing. AND the never of all, never partner with a “blanket partner.” A “blanket partner” is defined as someone who wants/needs to be involved in every business you have because she/he is a partner is one of them. Don’t marry a partner! Just because someone is a partner in one business does not give him or her the automatic right to be a partner in another business. Partners are utilized to add value not ride your coattails. Whether, you partner or joint venture, THE most important thing is “who” you are doing business with. If they fall into the “Bad People” section of this post then you can get egg on your face real quick!

Here are four questions that may help:

Who is going to manage/run the business and the day-to-day operations? = 0-25%

(Maybe both of you will so 12.5% each)

Who created/invented the technology/widget/idea? = 0-25%

Who is investing the capital? = 0-25%

Who is taking the risk? = 0-25%

*The percentage can be profit and/or capital interest

Bad People – Unfortunately “Bad People” are a fact of life.  They lack integrity. They connive and manipulate. They are willing to lie under oath. They don’t believe in Karma. They would rather destroy than create. They think with scarcity. They are miserable and negative. AND they’re ultimately lazy and weak underneath it all.

Believe it or not there are people out there that will betray you and try to do everything in their power to destroy you. I’ve had to learn that it doesn’t mean that all people are bad. I also have learned to not allow “bad people” to trigger dis-empowering emotions that don’t serve but rather to harness, utilize, deflect and transfer the energy into power and strategy. If you pity yourself and allow yourself to stay in the emotion it will eat you up. Every emotion has a purpose but don’t stay there!

You are not going to eliminate them all together but the best way to avoid “bad people” is to not attract them in the first place and filter them out the best you can. Spend time on the basics: Background checks and real reference checks but also implement real behavioral assessments that are tailored to the performance driven culture you want to create. “Good People” add value, positive energy and passion. They follow the vision, reciprocate, act with integrity and earn trust.  And remember if you happen to hire a “bad person”, “It’s not who you don’t hire that matters the most, it’s who you don’t fire” – Tony Robbins

Regression – You’ve heard it before “if you’re not growing you’re dying.” The important part is the pace of the growth and how we can best manage it. There are two main principles that we must master in order to constantly grow:

1. The Peter Principle

Simply put, “The Peter Principle” is when an organization outgrows an employee’s workload, intellect or skill level and that employee becomes a cog in the system. This employee can even stop the entire company from scaling to the next level. These employees oftentimes are afraid of delegating and don’t have to ability to say “uncle.” They have the fear that the company will become bigger than just them and that they will ultimately lose their job. Unfortunately, in most cases, this becomes a self-fulfilling prophecy as most are unable to adapt to change. There are however, three possible solutions for this 1.) Replace them, 2.) Hire a manager above them, or 3.) Transfer them into a different role. (All three have risks and the decision must be made cautiously)

2. The Pareto Principle refined with Jack Welch’s Differentiation 20/70/10)

It’s not about loyalty. Loyalty is a double-edged sword it can save you but it can also kill you if don’t make a needed decision based on loyalty towards someone. In today’s workplace it’s about performance plain and simple. Company pays you, you follow system and perform, and vice versa. The bottom 10% are managed out so there is room for better talent to be recruited in and the rest are managed and lead up. If you want peak performers and a winning team you have to eliminate the bottom and reward the top. That will create healthy growth and limitless possibilities.

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