DROOM (Don't Run Out Of Money) with Beth Polish

The Way We Live Now Revisited

Three years ago, I did a post on Anthony Trollope’s novel The Way We are Now, which former HBS professor Amar Bhide (now at Harvard's Kennedy School of Government) had recommended to me as " the definitve work of business fiction." So I was excited to see that Newsweek just named it #1 on their list of must-read books for our time.

In 2006 I was commenting on the book’s depiction of a way of life that, if you looked at from an entrepreneur’s point of view, embodied its own unstated -- and, it turned out, unsustainable -- business model. But Trollope serves up a lot more wonderful business intrigue than that.

For those of you who don’t read much fiction, this is a novel you’ll savor for its satiric but pitch-perfect view of business and life in a time strikingly like our own, complete with a Bernie Madoff figure.

And for those who shy away from business books, here’s insight into business practice and principle embodied in vivid, enjoyable prose and rich, recognizable characters.

Newsweek has it right. Anthony Trollope’s The Way We Are Now is book not to be missed by anyone, especially considering the way we are now.

War of the Models

Anyone who knows me knows I'm fascinated by business models. I love analyzing them and thinking up new ones that can be game changing.

Over the last few months I've been blown away by the number of articles written about evolving business models in many, many industries. I'm particularly interested in media and communications, and businesses in this industry are very focused on how they are going to make money in a changed and still changing world. The debate of the moment seems to be pushing people toward abandoning print and focusing exclusively on providing content online. But wait, some say, consumers aren't used to paying for online content, in fact they’ve shown some resistance to it, and advertising rates are lower online than in print media. Yes, that’s true, comes the response, but the cost of print is so daunting, and advertising revenue is falling in print, too. That may be, but what kind of content are we going to provide, once our audience is the *World Wide* Web. And so it goes, more opinions than workable solutions.

A recent look on the New York Times website shows the following articles:

• Newspaper Ad Revenue Could Fall as Much as 30%

• Media Executives Plan Online Service to Charge for Content

• Extra, Extra! Homeless Lift Street Papers and Attitudes

• 'Hyperlocal' Web Sites Deliver News without Newspapers

• In Switch, magazines Think About Raising Prices

• Even a Print Advocate Turns to the Web

And then there was this on CBS recently,

• Nonprofit Future Possible for Newspapers

It's all gets pretty confusing pretty quickly.

Get Out There and Play

With two eighteen-month-old sons, I’m more attuned than I used to be to news about education, so my eye was caught by a piece in The New York Times about the "4^th R" – Recess. It seems that a series of studies, including a recently published one in the Journal of Pediatrics, have found that kids who get daily recess behave better in class and that better academic performance goes hand in hand with physical activity in recess and gym class. And kids with ADD had increased attention and concentration if they got out and walked in natural settings.

One theory about all this is that there are two kinds of attention, the kind you use when you’re hard at work, called "directed" attention, and another, called "involuntary" attention which, according to the Times, "takes over when we’re distracted by things like running water, crying babies, a beautiful view, or a pet that crawls into our laps." (Actually, I don’t really see how "crying babies" fits on that list – I’m just quoting.)

The point, though is that we get "attentional fatigue," and we need refreshment. And in those studies of kids, it’s the active outdoor kind of break that is the most refreshing. (I confess to knowing some folks who prefer napping or meditating as a way to recover from attentional fatigue, but those pursuits were not covered in the Times article, so I’m leaving them out here.)

There isn’t any reason I can see to suppose that the benefits of active recess – increased concentration, learning and intellectual (work) performance – should be restricted to kids. (Besides, it wouldn’t be fair, would it?)

I know it may seem counterintuitive (not to say just plain wrongheaded), to be suggesting taking a recess, or any kind of break, when the future is so uncertain, job security feels constantly at risk, and we’re all worried that our businesses will fail because of external economic challenges. Perilous times like these seem to make everything feel like an emergency that has to be dealt with right now.

But it’s been my experience that working smarter is usually lots more effective than just working longer. So I’m going out on a limb and guessing that we grownups can get happy results like the ones enjoyed by schoolkids – thus improving our ability to deal with all our business challenges (and our personal ones as well) – by getting out there and taking our own recess every day. And that doesn’t mean standing in front of the building and smoking a cigarette.

I know I’m going to make recess a part of my own daily routine.

The Perfect Fit

Over the weekend I belatedly added to my winter wardrobe that new staple, a sleekly designed, precisely fitted, insulated black coat.  I got mine at Searle, where they do a creditable version that's cut well for me, and the experience of buying it was an unexpectedly illuminating demonstration of modern marketing and sales.

Searle fashions are sold at Bergdorf's and Saks and other places, and also at Searle's own retail stores, of which there are half a dozen in Manhattan, arrayed along the East Side from 5th Avenue and 21st Street to Madison Avenue and 84th.  I called ahead to a couple of the stores to be sure they had it in the size I thought would work. (I was guessing based on having tried on a friend's.)

My Saturday travels took me to the downtown 5th Avenue stores, but when I tried the coat on I wasn't sure that the fit was right.  A size smaller might be better, I thought.  The salesman I was talking to quickly determined that they'd just sold their last one in that size.  Then, almost as quickly, he learned that no other store in Manhattan had one.  But there was one in the warehouse in Long Island City.

That I was not staying in the store's neighborhood was no hindrance.  Basically what he said was  -- pick a store and we'll have it there for you in an hour.  I named a store  --  the one three miles uptown on Madison  --  and he quickly verified that they also had one in stock in the bigger size, just in case.  So I could pay for the coat now, arrive uptown at my convenience, try on both sizes, and walk out with the one that fit best.  No fuss, no muss, no extra delivery charges.

What retelling this doesn't fully capture is how effortless and almost instantaneous it all was, or how gracious was everybody I dealt with, including everyone at the uptown store, who had no connection with the sale except to serve as a delivery point and a place for me to try the coats on.

What the experience showed me was a sales staff with a complete 360 mastery of their business and the ability to deploy it seamlessly to make and close a sale.  Searle has combined its website with a transparent inventory control and monitoring system carried on its intranet (and the training to use it all) to make every person on the selling floor knowledgeable about the company's entire inventory.  And they've facilitated movement of inventory from warehouse to store, and cooperation between the stores, to make the most effective use of that knowledge.

True, many of their fashions are available at high-end department stores, but why go there when Searle's own stores can provide this level of service?  And compare my experience to the more usual one of convincing a sales person to call around to other stores (if you can), and get busy salespeople there to check their own inventory... or, more often, schlepping from one store to another yourself in the hope of finding the item you want.

Being able to do what they did made that sale.  And it made me a happy customer.  I didn't have to come back, I didn't have to wait (and maybe go somewhere else to buy a competing product).  Almost anything that might have stood in the way of the close had been anticipated and provided for.

There's a moral here for all small businesses, not just retail operations with a half dozen locations in one city.

It's  vital to know all the factors necessary to make a sale, and every bit as vital to give the people who are your front line control over them all.  To do less is to fight with one hand tied behind your back.  The requirements are different for different businesses, but the principle remains.  Not just know your customer thoroughly, but put yourself in a position to meet your customer's needs as (seemingly) effortlessly as you can.

Graciousness -- Never Goes Out of Style

As I write this I’m sitting in the sparely designed Museum Hill Cafe, part of a complex of small museums on a hill overlooking Santa Fe New Mexico. The views of the mountains are beautiful but that’s not why I’ve kept coming back here during my stay in Santa Fe. It’s because I feel at home here.

They offer wireless but they don’t have lots of people just sitting on their computers and not eating their food (unlike the COSI chain in Manhattan that hooks you in by offering free wireless only to shut if off during peak hours). Instead of making you get a waiter bring you your free refill of coffee or tea (iced or hot), they make it available for you to take, yourself. By being gracious even in these and other small ways they give the customer a feeling of control and being welcome.

True, we are living in a time when businesses are cutting back on the services they offer (like airlines that no longer even give main-cabin customers pretzels, let alone dinner, during a four hour flight at dinner time). But there are still ways to offer your customers services that matter to them in terms of their overall experience with you, without scuttling your profitability. It’s not about big things, it’s about simple and significant.

The coffee and tea refills would be free anyway. It’s how I get them that’s simple and significant. Do I drink more than I might if I had to flag down a busy member of the waitstaff? Maybe, but it also frees the waitstaff (very small and efficient here) to do more productive tasks.

And you know what? Because it helps make me feel at home and welcome, I’m not so conscious that everything I buy adds to my tab. And I end up buying more (I really didn’t need that terrific chocolate chip cookie that I got to accompany my free iced tea refill).

So as this year closes in tougher economic times than it began and we all think of ways to streamline our businesses, it seems even more important not to lose sight of how we can make our customers experience with us special. If we do, I have no doubt they’ll be loyal for years to come.

Saving, A Drop at A Time

The New York Times Sunday Business Section runs a regular column called "Job Market," full of advice for wage slaves, and today's installment was about watching how you spend your money.  The examples given are all about the things people spend on when they're at the office -- lunch, lattes, and such.  But the basic message was that it's a good idea to pay attention to the little seemingly inconsequential things you're spending your money on, and if you can't just eliminate them to look for alternative ways to get the same result (or something similar) for less money.

This is good advice in your personal life, for entrepreneurs as much as for employees, but it also pays to consider whether there are also costs you have in your business that on a daily or weekly basis don’t seem like much but that over a year add up to enough money that you could have done something better with it.

I just had a chance to see this principle in action in a fairly big way. On Friday I was talking to some executives of a rather large and successful company. And they were talking about cutting back on the bottled water the company keeps available for employees and switching back to water coolers (with filtered water, of course). Turns out those handy individual bottles of spring water cost a lot more than they’d realized. And something they decided rather quickly they didn’t really need, after all.

So at a time when it’s important to marshal your cash, it’s a great idea to look more closely at the details of how and where you spend your money every month, to find the inevitable expenses for things that don’t create value and that, however insignificant they seem individually, add up to real money that can be spent in ways more likely to keep your company on the road to realizing its potential.

Making Mistakes for Fun and Profit

Yesterday, I spoke at the Women’s Leadership Exchange Conference in Tempe, Arizona. The keynote speaker was Poppy King, better known as The Lipstick Queen. She recently came out with a book detailing her adventures as an entrepreneur. Adventures are what she sure has had. Poppy founded her original company when she was 18 years old. She built it into a multi-million dollar business and then she lost it. After a corporate stint, she has now started a new business where she’s focused on avoiding the mistakes that she made with the first. The good news is that it seems to be working and her new business is well on its way to being a success.

As the keynote speaker, Poppy shared some of her lessons. She started off by saying what it means to be a ceo -- having a vision and making mistakes. And she then went on to say that being a leader is all about learning from your mistakes. Just that simple.

Poppy hit it right on the head.

When I was running Dreamlife, Fred Rosen (the former chairman of Ticketmaster and all-around tough guy) told me that my job as ceo was to make 100 decisions a day. He said that on day one, I should be happy to get 50% right, and that as the days went on my batting average should go up. His point was that as head of the company I had to keep making decisions even if some of them -- a lot of them, even -- were wrong. It was the only way to keep moving forward. And the way to get my batting average up was to learn from the mistakes. After all, he said, iron isn’t made with sand, it’s made with fire.

It’s a bit of wisdom I was glad to be reminded of.

What is Innovation?

Lately I’ve been doing some research in the area of corporate innovation. It’s part of a project I’m working on. So I’ve been reading books like "Sticky Wisdom: How to Start a Creative Revolution at Work" from ?WhatIf! The Innovation Company and "The Innovator’s Solution: Creating and Sustaining Successful Growth" by Clayton M. Christensen and Michael E. Raynor, plus articles by Peter Drucker, Theodore Levitt and others.

They have different opinions on the types of innovation that companies should focus on and the ways to go about making innovation happen. And, of course, what seems like innovative to one company may not be for another.

But what struck me most was that in all my reading there was one consistent element -- that an idea doesn’t count as innovation until it’s turned into reality and makes money.

The ?WhatIf! Innovation Company, the folks behind "Sticky Wisdom" put it this way "Creativity only becomes innovation when ideas become useful -- in the business world that means when a new product or service is launched, or starts to make money."

In other words, no matter how cool or new it is, it isn’t an innovation unless customers use it and are willing to buy it at a price that’s profitable for the seller. (Or -- if it’s a new process or way of doing business -- unless it has a significant and lasting impact on the business model.)

Sounds like common sense. After all, what’s the point of coming up with great ideas if they never see the light of day, or if their day in the sun is only a brief one.

But my guess is that if you asked a cross section of business people for a definition of what qualifies as an innovation you’d get a whole list of different answers. And, if you then asked them what all business innovations have in common, I’d be surprised if they homed in on what all the innovation experts I read agree on -- that an idea isn’t innovation unless it’s commercial. Perhaps because figuring out how to make the idea make money doesn’t seem particularly creative or sexy or ground-breaking (adjectives that often show up in descriptions of innovation), and it takes hard work and requires tough decisions.

Whatever the reason, they’d be missing out on something powerful. And that is the great advantage we entrepreneurs have -- unlike other creative types (writers or scientists, say), we have a lot of control over turning our own ideas into solid innovations. Because we know how important it is to focus not just on how great our idea is but also on the job of any business -- to make money (to earn a profit, generate cash, and produce a return on assets). If we can do that, then there’s no stopping our ideas from making a significant positive difference to our customers and the world.

Beth in BusinessWeek SmallBiz

Last October I surprised myself by accepting an opportunity to speak at the Women’s Leadership Exchange’s New York Conference, even though my new twins were barely two months old. As you may know, the WLE asks its speakers to provide speed coaching to the attendees. While it can be thoroughly exhausting to "speed coach" 10 people in an hour, it’s also incredibly exhilarating, and it’s always great fun to meet so many talented entrepreneurs.

This time, though, one thing was different. One of the entrepreneurs I speed coached brought someone with her. Vigdis Ericksen, the founder and ceo of Ericksen Translations, a $5 million plus company, was being shadowed through the conference by BusinessWeek SmallBiz senior correspondent Amy Barrett.

I’m excited to tell you that Amy wrote about the speed coaching Vigdis received that day, and included much of Vigdis’s session with me. It’s in the just-released Feb/Mar issue of BusinessWeek SmallBiz. I’ve been a fan of the magazine since it’s inception and I’m pleased to be included.

I hope that you’ll click on the link below and read the article.

I think there are valuable things to be learned reading about Vigdis’s varied experiences with speed coaching. So much so, in fact, that it inspired the feature article in my upcoming issue of the "DROOM with Beth Polish eZine."

My DROOM eZine feature article will give you specific tools and tips for getting the most out of encounters like that, whether it’s in a formal speed coaching session, over a meal, in a meeting or on a telephone call. As someone who’s been on both the coaching side and the advice-seeking side, I know you’ll find these tips useful.

I want to thank the WLE again for giving me the opportunity over the years to speak at their conferences. I always look forward to the inspiring award winners, knowledgeable experts and outstanding entrepreneurs. And thank you Vigdis for coming to see me. I have no doubt that you’ll be successful in your continuing expansion into oversees markets.

Quarterbacks and CEOs

With the fourth quarter half over in Superbowl LXII, and the Patriots trailing by 3, Patriot quarterback Tom Brady found himself on his own 20 yard line. Brady got a first down, and then another, but with less than six minutes left, the TV commentators were calling it a two-possession ball game – Brady could be sure that if he couldn’t keep the drive going to a touchdown or a field goal, the Giants would run out the clock when they got the ball. It was genuinely do or die.

I was riveted watching Brady’s cool and precision and he marched the ball down the field. He’d already been sacked more than once by the Giants’ defense, but he somehow must have put that out of his mind – that, and the huge pressure on him with every play. He stayed focused, called the right plays, found his receivers when he was passing. It was terrifically impressive.

And then it was Eli Manning’s turn. The Giants were behind by four, so a field goal was useless, a tie and overtime impossible. The only way the Giants could win was for Manning to engineer a touchdown. A much bigger challenge than Brady faced, and he had less than three minutes to accomplish it, and just as far to go. And like Brady, Manning stayed focused, called the right plays, and executed them masterfully, improvising brilliantly when his line didn’t hold as well as he would have liked.

Amazing performances by both of them, and I couldn’t help thinking what exemplary CEOs they were. A great quarterback has to know his own team’s strengths and weaknesses, and he has to know almost as much about his competition’s. He has to see what’s happening around him, take into account past experience at the same time he’s anticipating what’s ahead and how his choices will fit into a changing environment. The he’s got to pick a course of action and execute it faithfully, all the while staying aware of everything that’s happening around him so he can adjust for the unexpected. Not only that, but he has to keep everyone on his team focused on getting the job done, keep everyone going and inspired to do their best, even when the hurdles ahead seem insurmountable.

Just like a CEO.