Archive for July, 2010

29
Jul
10

Raising Entrepreneurs – Understanding risk and investment

It’s that time of year – time to rob our bee hives!  If you’ve seen me speak you know I am in the process of raising entrepreneurs.  Avoiding traditional learning programs that tend to produce “worker bees”, while searching out ways to develop my children’s creativity and business acumen.  Seth Godin writes about this in his latest book, “Linchpin” – urging us to move beyond the #2 pencil, to develop our problem solving skills and creative abilities.

Yesterday we suited up in our “almost” bee proof uniforms, and headed out to the bee hives.  They’ve been working all summer to make enough honey to survive the winter, and hopefully enough to support my apiculture team through the winter as they sell their honey.  But, like all business ventures, there are no guarantees.

The bees do most of the work.  They begin by building up the hive in the early spring.  We start to really see some activity in March as the queen is mating and recreating to build up her team.  As the first flowers appear, nectar flows and the bees collect pollen.  Comb is then built on frames, first in the lower brood boxes, then in “supers” which are added as the brood chambers are filled with both brood and honey.

But there’s a risk.  As the hive builds, the bees know its time to multiply.  They’ve been created with an instinct to raise up a new queen, and so some of the brood are targeted for this new role in the hive.  Royal jelly is applied to several eggs to raise up this new queen.  A queen cell develops from this application, and two-thirds of the hive members prepare to leave with the old queen!  That’s right, most of our hive will try to flee the hive, hunting for a new home somewhere out of our reach.  If we don’t find a way to stop them, they’re gone.  The new queen will then emerge and begin repopulating the hive.  All of this is natural, however it completely disrupts the honey production, leaving the bee farmers with only a small amount of honey at the end of the season.

There are other problems as well. Mites may infect the hive, killing it off.  There are other pests that may disrupt the hive, weather conditions such as drought or a freeze may disrupt the nectar flow leaving us empty. Or perhaps an animal will get into the hive and completely destroy it as they help themselves to the honey.

It turns out that this was one of those years.  After faithfully caring for the hives through the summer, we incurred a few swarms (this is how the bees take off with the new queen), one of our hives died last winter, and for some reason the hives just didn’t produce.  In fact, only one hive had enough honey to actually harvest.  The rest only made enough for next winter.

Of course the kids were disappointed!  But let’s not miss the important lesson here.  For the Stelzl family, keeping bees is less about profit and more about learning (at least that’s how I see it).  I don’t expect any of my kids to actually support their future families on bee farming, however I do want them to learn about investments, overhead, gross profit, marketing and selling, and the work required to produce their product.  This year we’ve learned a lesson on risk – there is no guarantee.  They’ve put in a great effort, however the pay plan is pure commission.  In fact, they’ve even spent their own money buying bees to replace past failures, purchasing equipment and hive repairs, and purchasing jars to sell the honey in.  Who will make up for their loss?  No one.  There are no bail-outs for this type of failure.  Instead they will have to rely on their other business ventures to support their coming year’s expenses.  And of course, there’s always next year’s honey if all goes well.  But there are no guarantees.

28
Jul
10

Note to Star Alliance Partners…

Star Alliance – you know, USAirways and associated partners that make up the Star Alliance…a few comments for those involved:

1. If your website advertises online booking, it should work.

2. If you provide a phone number, in case of an issue, the customer should not be on hold for 45 minutes or more before just giving up.  Is there anyone actually there?

3. When the customer enters their information in and presses save – the information should be saved, not just 10% of it.  This would allow the customer to recall it once you actually get your website working again.

4. Don’t advertise “easy/fast booking” unless you can provide it – it only irritates the customer to read this while things keep crashing or hanging.

5. If you only support Explorer – you should state this on the website, but this is short sighted.

6.  When you finally do get through to the customer service people, they should be able to process the ticket right there.  The current process of having me send an email, wait on an email back, and then make another phone call in several days is ridiculous.

Customer service really is important!  Make a regular habit of seeing your business processes from the customer point of view!

27
Jul
10

SMB Sound Bites – Crime Targets SMB Businesses through The Web

Preparing for my workshop with Kaspersky today, I came across this great article on SMB cyber crime targets.  Some great sound bites as you speak with business owners who don’t feel like they need your help (the following are sound bite quotes from the linked article below):

1. Hackers and computer criminals have lately been turning away from the impenetrable security systems of large corporations in order to reap the fruits of the vulnerable small business sector.

2. A hefty portion of small business owners have little to no cybers ecurity at all… 1/5  of all small businesses don’t use anti-virus software, 60% have unencrypted wireless networks, and 2/3 do not have a proper security plan in place.

3. cybercrime is undergoing a new phase by switching its focus to the susceptible assets of small businesses…85% of all business fraud occurs in small to medium-sized businesses.

4. Web-based threats are emerging as the most common form of cybercrime…total online theft for 2009 alone totaled over $1 trillion.

5. …only 60% of Level 3 businesses (just one level above mom-and-pop shops) have complied with the Payment Card Industry’s Data and Security Standards

Here’s a link to the entire article: https://www.infosecisland.com/blogview/5760-Small-Business-The-New-Target-for-Cybercriminals.html

23
Jul
10

Notes from My Ingram Micro Presentation

Just returning from my Dallas event with Ingram Micro…what a great trip and event!  Ingram Micro always does a great job hosting these types of programs for it’s reseller community…a few follow-up notes on my talk for those who attended and even those who did not…

There is a time to charge for assessments!

1. When the fee is commensurate with the sales effort

2. When the scope includes stake-holder level people who can see it through to remediation

3. When an assessment is required by law or internal policy

There is also a time to give it away…While some people hesitate to provide anything complementary, this may be short sighted…

1. Demonstrated by three assessments I was personally involved in, I showed one that sold for $125K – no remediation work followed, however the GP was extremely high given the efficiency of the deliverable.  In sample 2, I sold the deal for $36,000 – however, given my inexperience at the time (this was over 15 years ago), we disengaged from the buyer and produced a report that did not meet his expectations.  They never paid, and we took a loss.  In the third sample, the assessment was done for free, however it landed $32,000 in remediation and $7000/month in recurring managed services work with a three year contract.  Which would you choose?

2. For smaller assessment opportunities – SMB level business, it often makes sense to perform the assessment at no fee.  If your opportunity will sell for $2500 or $3500, an experience had by more than half of my audience, I showed that the amount of GP in the deal is not worth the trade off in control of the process.  While I do make somewhere in the range of $1500 to $2000 in GP (if I really know what I’m doing), the client controls the process simply because they’ve paid for it.  If I do it for free, I can demand time with any asset owner in the organization, both as part of the discovery as well as in the delivery, where I sell the remediation and managed services.  At any point, if management disengages, I can stop the process.  It’s free, so it’s my call.  In this case, the profit does not justify the sales time unless follow-up work is sold.

3. Finally, never give the assessment away – it’s not really free.  Not to contradict point 2, but to require a trade of services.  In the case of an event, executive attendance justifies a complementary assessment.  There may be other situations that do the same.  But don’t devalue your service by advertising free assessments.  Put a price tag on it and perform it as a gift for those willing to invest the time and energy at the right level.  Discernment is required – but in the end, you’ll create the justification needed.

4. Finally, the deliverable must sell the next step.  This is never a technical paper.  Data supports the case, however the measurement of risk must be delivered in a compelling business case document.  It’s like going for angel investor money.  You’ll need the support of economic buyers to move forward, so treat this as a marketing process and remember, it is your job to convince management if there’s a serious risk at hand, not IT’s.

20
Jul
10

Creating Business

Tomorrow I’ll be presenting the opening Keynote at Ingram Micro’s vertical symposium – health care and finance, in Dallas.  As I’ve prepared for this, I’ve recounted numerous conversations over the past year concerning the economy, cloud computing, business struggles, and managed services.  What’s working and what isn’t.  The majority would say, not much is working…

Creativity might be defined as approaching a task or idea from a different or unique perspective.  It’s a simple concept, but often misunderstood at the deepest level.  We have creative teams, creative people, creative software, and Adobe’s creative suite…but what’s so creative about these things?  Most of the time, nothing.  I see thousands of websites, data sheets, and even resumes sporting the same meaningless esoteric language.  I love how Goden, author of Lynchpin describes the education system of our country – we learn to use #2 pencils, dress the same, write the same, follow instructions, take notes, take tests, forget the material and move on.  Failure is not an option, and so the idea of creating and trying new things is not permitted.  Being a home educator I can really see this in the materials offered to us.

Instead, I’ve opted to largely ignore traditional books in place of creative problem solving, team oriented learning, and building entrepreneurial enterprises with my kids.  Business is getting harder to conduct, competition is greater, and price pressure is killing us (and of course taxes will finish us off).  Going the traditional route is not going to succeed on average.  In fact, history shows us, of the thousands of companies that start, only about 4% (according to a recent business conference I attended) make it to ten years, and this says nothing about profitability.

So what are we going to do differently to stay in the game?  Creating business has to to be part of it.  Understanding how to build effective messaging and move people from prospect to client, is fundamental.  Finding more efficient ways to buy and sell, and delivering greater value through discontinuous innovation, is needed.  Intellectual capital is important, but those who tend to be risk adverse are destined to fail – the entrepreneurial spirit has been stripped from us.

I’m just coming off of a 4 day planning and strategy sabbatical with lots of ideas and enthusiasm.  Hopefully you’ll be in Dallas tomorrow to hear about it.  Either way, start thinking outside the box – start practicing creativity.

12
Jul
10

The Park Hotel Meeting

In 1995 I was working with a small group of guys to establish a profitable, strategic business in systems integration, support, and services.  One of the most important investments we ever made became known as the Park Hotel meeting.  At the start of each quarter I set aside an entire day with my leadership team to work on the business (rather than in the business).  As the company grew, it became more and more difficult to set aside this time, but we did it anyway.  We set the date for our next meeting while in the current meeting, picking a date that worked for the group.  This date was written in stone – it was non-optional.  We talked about strategy, personnel, futures, profits, ideas, etc.  Things that would make our business not only work, but work well. Looking back, those four days were worth every minute.  We could bill or sell that day, however the plans we set in motion multiplied the profits of our company.

In 2003, when I started Stelzl Visionary Learning Concepts, the business I run now, I set out to do the same.  My leadership team is just my wife and I, and often I schedule my “Park Hotel Meeting” alone, yet it has the same result.  Fresh ideas, a broader view of where I am headed, and a rest from the daily grind.  This week I am doing something a bit more extravagant.  I’m spending not just one day, but 4.  No vmail, no email, just focused time…

If you’ve never done this sort of thing, I highly recommend it.  One of Rockefeller’s habits includes this sort of planning and strategy time.  In fact, many great leaders did this – why do we have such as hard time stopping our wood cutting to sharpen the saw?

10
Jul
10

I hate resumes

I think Wall Street’s headlines put an end to the recession a year or so ago – I guess they missed it.  In any case, there are lots of people on the street and resumes flying about wherever I look.  Most of them poorly written boiler plate text that won’t land a position with anyone worth working for.  I found this great (in my opinion) article through one of my colleagues…it’s worth a read if you are updating your resume.  I prefer to answer no, when someone says, “Do you have a resume.”

http://www.businessweek.com/managing/content/aug2008/ca20080822_050187.htm?chan=careers_managing+your+career+page_find+a+job

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06
Jul
10

On Boarding and Maintaining

As some companies are seeing signs of recovery in their business, they are turning back to hiring as well as working to retain the people they need.  I was talking with a successful entrepreneur in Dallas on this topic – that of bringing in great people and keeping those you need.  His words “Training is one of the most important investments business owners can make”, caught my ear.  Here are a few excerpts from our call:

1. Long term employees that don’t receive regular training from qualified trainers, actually decrees in ability over time and may go down in IQ (from studies he has conducted in him company).

2. Employees that receive good training and take it seriously grow in their value to the organization, are therefore worth more and receive greater raises, which in turn keep them from going out to seek other employment. (In Stephen Covey’s words – WIN/WIN)

3. Those who receive no training, yet stay, become a liability over time.

4. Regular training programs keep people interested in learning and stimulate creativity.  Creativity brings forth invention which is at the heart of value-differentiation.

5. Training comes from classes, books, and mentors.  It’s the greatest investment a company can make in it’s people.

If your people are not worth investing in, fire them and hire new ones, then begin training.

© David Stelzl, 2010

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02
Jul
10

Trouble finding urgent security risks – try the copy machine!

Ignore the first 8 seconds of this video (advertisements), then take notes.  Every one of your clients has one – a copy machine.  This video explains where the risk is and how to demonstrate it.  It this doesn’t wake them up, nothing will.  But make it part of your risk assessment so that you can actually show the client copies of every document they’ve ever copied.  If they are leasing the machine, it may be another company’s documents.  In this video you’ll see documents downloaded from a used copy machine in a warehouse.  One system contains sex crime unit pages, another from a police department, and a third from a health care organization. The key to closing business is in finding something urgent – security issues always top the list, but they must be demonstrated.  Here it is – 100% likelihood  (originally reported on in April, but worth taking a look at right now…Thanks to Matt for passing this on).

© David Stelzl, 2010

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