Start Up Mindset

Being involved with a startup is a very exciting and rewarding opportunity.   Building an organization focused on a new idea or product; or how to improve upon something already being done in the market, can be an amazing life experience.  Along with the excitement and enthusiasm, there also comes the challenge of accomplishing a high volume of work with limited staff and financial resources.   A few lessons I’ve learned after my most recent journey with a startup:

• Stay Lean – Generally, startup company teams are comprised of a few key individuals with broad business knowledge who possess the drive and entrepreneurial spirit to create something new.  As a new company’s ideas, vision and products begin to take shape, the demands on the team will continually increase and there will likely be the need for more specialized skills or equipment. The company’s leadership certainly should not ignore these needs.  They should consider outsourcing or leasing, rather than hiring or purchasing, to fulfill these needs early in a company’s lifecycle.  A few examples might include legal, tax, employee benefits, payroll processing, bookkeeping, technology equipment and software.  Adopting a pay-as-you go approach to fulfilling these needs can preserve cash early in a company’s lifecycle.

• Standardize – Taking time to document, in writing, policies and procedures is critical.  Otherwise, the team will quickly become buried in the minutiae, trying to remember, “how do I pull that report again?” or “what are we allowed to expense for meals?” Spending time trying to remember how to perform day-to-day tasks is inefficient and diverts your efforts away from innovating and running the business.  It is human nature to forego compiling such documentation in favor of attacking the next challenge.  However, having this documentation permanently recorded in operations manuals, accounting manuals and employee handbooks will make life much easier.  I recommend, at a minimum, creating procedure memos, distributing them to the appropriate parties and aggregating them into an official “manual” later. Operational ability is key as a business transitions from a startup to an ongoing business.   Always strive to create repeatable processes that deliver predicable results.

• Measure – Company leaders must define and measure the business’s drivers to success.  Often, these metrics are quantified as you develop your strategic plan.  Generally, financial metrics receive the most attention.  It is important to also measure non-financial metrics, as these are often key drivers to success.  Examples include customer-focused metrics such as customer satisfaction or number of repeat customers.  The metrics will certainly vary among industries and for individual companies operating within the same industry.  Finally, don’t just measure what you currently have the ability to measure.  Rather, design systems to measure what should be measured.  Otherwise, you may miss key indicators that require attention or a strategy shift.

Startups are not for everyone, but if you can see the forest through the trees, the fun of bringing a product concept to life can be a rewarding challenge.  Taking the appropriate steps to preserve cash, document and standardize procedures and measure performance will make the process a little easier.

Guest Blogger:
David Harris has over 18 years of finance and operations business experience.  He is currently seeking to align himself with an organization where he can apply his skills as part of a team and contribute to its success.

You can contact David Harris via email at daveharris1074@gmail.com or via LinkedIn by visiting  http://www.linkedin.com/in/davidharriscpa/.

Too Much Growth?

Over the years while driving strategy, planning and development for a variety of companies and in many different industries I have seen a fatal flaw in the thinking about growth.  

While there maybe growth or aggressive plans for growth I always ask two questions: 1. Are you ready to grow? 2. What does growth mean to your business? The challenges of execution and delivery maybe different in a product company vs. a service business, so for this conversation I want to focus on the idea of service company growth. Whether technical services, or engineering, or construction, or facility services the same issues can impact not just the bottom line but the long term health and viability of the business.

Let me tee up the thinking. So you have a sales force, or regional offices, or managers that execute the work and they also sell. You need to grow, need to add business, need to add projects. You assume everyone understands what you do to make money as a company and you tell them to go get more of the same. You might even put in place a reward and incentive program to motivate the whole company to go get “work!” Then it starts to happen, growth – at first it’s exciting and it’s great. Numbers grow, new clients, new projects with old clients. Within a short while though cracks in the success start to show. The margins drop, the customer satisfaction erodes, the field teams start to moan about the quality of the projects or the bids. The next thing you know, the leadership team is pushing back on the idea of growth and see it as a bad thing.

One simple tool I have used, to help refine the focus of growth is an “opportunity lens” to get everyone thinking about growth the same way. Having read Good to Great, Built to Last, How The Might Fail by Jim Collins along with Blue Ocean Strategy by W. Chan Kim, Attracting Perfect Customers by Stacy Hall and other books the goal was to take all this great thinking and make it a tool that anyone on the team could use to help make better decisions in growth and opportunity. The key was getting a wide enough cross section of leadership in one room to talk and think it all through. What would success look like and how to judge is a potential really in the sweet spot of potential? This can be a challenging effort but I have found it is a great way to gain alignment across operations, finance, business development, the president’s office and more.

Out of this dialogue I end up crafting a simple lens to look at these growth opportunities. Every business is different, so I am not saying one size fits all. Instead the idea of looking at potential all the same is important to sustainable growth. Attached is a template example. It takes a few areas to look at when sizing up a potential new client or a new project and put into a one page lens to view all opportunities through (and share with the decision and support team).

1. Does the client and the opportunity fit within your ability to execute the work successfully or is it out side your scope of experience and capability? It is good to take on some new stretch projects and clients but too many and not enough of the mainline stream of needed revenue can stretch resource as well.
2. Size of the opportunities? Too big? Too many small? Too far away from the support staff? The revenue potential? One time or gate way to a five year relationship program?  What is the profit potential, what are the risks of failure?
3. Does this opportunity support and strengthen your brand, your reach into a market? Is it not aligned with your brand promise?

You can have as many of these decision points to look at an opportunity, while I would strongly recommend keeping it under 10 elements at most. I also like to weight the decision points – how important to the mix are they and in the end you can see where the opportunity falls. Now I am not saying that if something isn’t 100% you shouldn’t look at the project or client, instead it is key to have your eyes open and be thinking about every choice and how it fits into the mix.

Example Template Opportunity Lens (just a starting point - yours will need to be special to your business, industry, skills, margin models...) 

Taking strategy, making vision and decision making easy and real world are needed to grow successfully. Do not assume that everyone is on the same page nor do they all understand what you mean about growth. Ask four people in your company, alone and to the side “what do you think we need to grow business wise?” and I can almost guarantee each will say something different.

In the world of construction and technical services it seems that there is a chronic desire to say yes to everything. “Have you ever done a micro tunnel under an air strip?” – YES! “Have you every built a bridge across a plasma stream?” – YES! Later only realizing that they never have, nor was it smart to say yes – realizing you can lose profit taking on the wrong work. Then you try and end a new opportunity after you have started or done one project only coming to damage the brand and the market’s view of who you are. Nothing worse than going to a brand new client and saying you need to end the contract because it is not working out.

It is important to look at the mix of the work, the past experience of the team, the practical reality of costs, time and possible risk. Too many yes decisions on new work and/or clients could turn a bad situation.

Next tool was how to say a positive no to opportunity that doesn’t make sense. I will share more in the next post on this.

Business Learning From Nature

 “Look to nature and you will understand everything better.”  Albert Einstein

A Conversation Between Darryl Hutson and David Carrithers

Over the past 25 years we would every so often drift down a conversation path talking about how we could learn for business from nature, in the patterns and actions of animals and the natural world. We find a level of comfort and guidance in learning what nature has applied to what we are trying to do in people behavior management and business results. This post is an attempt to capture some of the creative interaction. (As you can imagine our conversations can be fast, fluid and broad reaching!)

What is a simple example you see if nature that should be applied in business? 

Darryl: Whenever I think about how the Monarch butterflies’ annual migration to their ancestral home from all across the country I am amazed at their doggedness and determination. They know there mission and they are focused on reaching it regardless of the obstacles in front of them. To me it is a miracle that this tiny insect can fly to southern Mexico, their instinct survive is amazing.

Business implications include company goals may be reached even if they are lofty and seemingly impossible – no matter the size of the team nor the challenges. If you are tightly focused on reaching your goal and if you are totally committed to reaching them. The Monarch's story can be an inspiration to all business leaders in driving results for their enterprises.

David: For me the most obvious is when I see a formation of birds flying together. When birds fly in flocks, they often arrange themselves in specific shapes or formations - like the famous V-shape. Those formations take advantage of the changing wind patterns based on the number of birds in the flock and how each bird's wings create different currents and drafts. This allows flying birds to use the surrounding air in the most energy efficient way. It also takes into account a leader that is cutting the path and wind resistance, making it easier for each bird following in the formation. In addition the leader changes out when they become tired and another steps in and takes the lead - no stopping, no slowing down. A fluid change in leadership and always moving towards the goal.

For me I see the application in business at a few levels - ranging from the idea that the leader needs to lead the way, know the direction to take the flock/team to cutting the way - making it easier for those that are on the team. At the same time the idea of easily interchangeable leadership - as one tires and moves to the back another steps in. Business seems to miss this thinking, instead relying on a single leader until in some cases they are worn out and unable to lead, becoming a risk vs. value on the organization.

Have You Shared In Business A Nature Strategy?

Darryl: Yes, over the years I have shared with the team the thinking that many animals will group together when a predator (competitor) attempts to cause havoc to the group (herd). The strategy to herd together to protect the whole (business) when danger is around is key to survival and growth whether this is a herd of muskoxen, elephants or others. Even groups that normally do not have a herding pattern will when danger is around.


Business implication; As Porter tells us a Sustainable Competitive Advantage must include defensive measures when anything dangers the enterprise. Always be aware of what your Competitive threats are and implement a strategy to combat them. Being able to come together as a business no matter the area of responsibility, level and history when there is a competitive threat is a key attribute needed for a business to survive in challenging times.

David: Dolphins fishing together using mud circle to net fish and then feed them to each other - every time I watch this and I show it people are always amazed. It is simple, yet very sophisticated. It also goes against the whole idea that humans are the only ones making/ using tools. Even if the mud is only used in minutes it is still a tool to help capture fish, plus it is a group of dolphins working together vs. alone. In business there can be this drive to say "I did this on my own" or "not build here not good"  when in fact collaboration, looking at the broader world (including inside and outside different areas and players) are all key to success.

I usually show this at the start of a planning or strategy session, trying to get across two thoughts. 1. That we need to think differently to find new opportunities and 2. That working together we can eat more "fish" - find more success. The bridge between the common, the known and the unknown thinking is a hard one to break in humans - many walk thinking they have seen and know it all, know the outcomes. This act of nature shows that we can still be surprised.

The Big Idea To Transfer From Nature To Business?

David: I have two big ideas that seem to always come forward when I sit and think and observe nature. First that nature evolves. Even the landscape changes - mountains erode, rivers change direction, animals evolve but for many in business all things are fixed, permeate. Change is seen as a thing to fight or hide from vs. learn and grow from. Change happens in both speed and in small steps - but it is always happening. Next time you doubt this and the impact small changes can have, listen to this TED talk on the "rewilding" of wolves at Yellowstone even putting aside your believe on this effort the impact makes you think, or for me it does, what small changes can we make it our business, our lives, our selves that will have this level of long term impact? From a few wolves to forgotten trees and flowers to changing the path of a river - amazing to think about.

Secondly, the act of diversity in not just how a person looks or their socio economic view, but diversity in thought, experience and style. I have found many times in business a whole forest of single thinking, like a forest of one type of tree, can form in a company or business unit. While there image of a forest of all one type of species may look uniform, even healthy and have vigorous growth in the environment yet, there is a huge blind spot. If disease, if fire, if any type of threat is presented the whole forest could be lost and lost quickly. Disease will run rampage or weather changes could impact every tree as far as the eye can see. While an old growth, multi species forest is stronger; it fights fire, illness/bugs and temperature changes better. A diverse species wise forest in more resilient and able to withstand unseen issues of the future. A few years back when I was starting a new company I had this thinking at the heart of putting the start up team together. Many in business strive for finding outward differences, like ethic, gender or nationality but in the end the hire a team of very similar thinking people with little difference in prospective and view. This is a big danger. Yes, harder to manage, harder to build collaboration - but is ease the goal?

Darryl: When I look at our dog Cleo and I think about past canines that have been apart of my life I find that their determination, their loyalty and their attitudes of affection and compassion are inspirations to me. The symbiotic relationship between the pet and its companion is special on so many levels. I find that when I am stressed or there are tough days our dogs have sensed this without a word spoken and have given me comfort, a head to pat or just come and been near me. I find my stress comes down just being around them. I think of that moment tens of thousands of years ago when the first canines came closer to the fire to be near the humans – forever bridging their species and ours.

In business we also have these friends, these allies that can be of aid, be of encouragement. As leaders in business we need to have these packs of supporters in our lives. We need to find these symbiotic relationships and allow them to naturally take place and grow.

Final Thought To Share:

Darryl:  In business it is key to learn from all areas of knowledge, including nature. Business books, industry conferences, partners and even competitors are great sources of learning. At the same time we need to look beyond these streams of knowledge towards things like nature, or art, or history. Go to a museum, to a Zoo and walk among the works of art or the animals– clear your brain of the efforts at work and explore the beauty, the challenges in the pictures you see. Read about the artists, the animal specs you are seeing. I have been lucky to live in a great city like Saint Louis with wonderful Art Museums, The Missouri Botanical Gardens and a world class Zoo. These have been my sanctuaries of thought, recharging my batteries and education beyond the world of business. I bet anyone reading this has close at had a location that if they spent one hour walking in they too would find new thinking, new answers, and new energy. For me 30 minutes in the Japanese Gardens at the Missouri Botanical Gardens is amazing to restore my focus and energy.

David: Almost ten years ago I was in the middle of a business storm. No make that a business typhoon. Multiple fronts, legal fronts, contract fronts, business funding fronts and a long-term business history issue. The most toxic business situation you could find yourself. I had a great team, resources to help and a spirit of "we can do this" - yet the challenges on some days were overwhelming. I found that if once a week I could get to nature, alone, just sit and be there, be in the moment and clear my head, clear my heart in nature I could find a whole new level of strength and power. I remember walking in Armstrong Woods in Northern CA or sitting at the top of the cliffs at Bodega Bay and look out at the waves and ocean I would find a new peace, a new energy. So the next time you find yourself needing to think or gain a new prospective find somewhere close at hand to walk, sit and take in nature. Need not be hours or days, I found 45 mins was more than enough to make a big impact.

Darryl Hutson is a business adventurer, always looking to improve business results and individuals performance.

David Carrithers is a change agent supporting businesses, teams, products and individuals improve performance.