Tuesday, July 17, 2012

How to be Great

5 Ways to Beat Mediocrity

It's easy to rest on success. But so often that can turn a great company into an average company.

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The Olympics are probably the greatest recurring example of superhuman effort compressed into a single point in time: A lifetime's practice comes down to a single 100-meter dash; four years of training pays off (or doesn't) in one passed baton in the final leg of the relay; nanoseconds, or fractions of an inch, separate elation and despair.

Running a business can become the exact opposite--no single point of payoff, no clear winner or loser at a particular point in time, no podium, no gold medal. There's just the long, arduous slog of doing the same things, day in, day out.

And it's in that sameness, in that cradle of monotony, that mediocrity is born.

If you are left unchallenged, you perform...adequately. Appropriately. You do what is right. You do what is enough. You excel intermittently, fail occasionally, but mostly, you just get by. Who's to say what difference this sales report will make in the long run? Where's the payoff in stacking this inventory correctly? Why exactly should I be excited about this week's management meeting?

But some businesses do operate like an Olympic team.

These companies hone and polish their business model, reshape and retool their decision-making processes, and practice their trade relentlessly, until they have it down, perfectly--or as near to perfect as they can get it. These companies work unceasingly at their product and service offerings, acutely conscious that they have to outperform the competitors. These businesses race to a goal as if their lives depended on it. Then race to another goal. Then another.

Think of Apple--who's to say its product announcements lack any of the drama or grandeur of ascending an Olympic podium (and who's to say the subsequent revenue isn't the equivalent of winning business gold)? Or take the Virgin Group, or Berkshire Hathaway. While competitors plow through each mundane day, these and many other companies race each day as if it's their last with passion and commitment.

So how do you make your team Olympics-worthy?

1. Set BHAGs

Jim Collins and Jerry Porras's concept of the Big Hairy Audacious Goal has fallen out of favor in recent years--except with gold-medal winners. Look at any of the companies in the list above, and their audacious goals stare right back at you. What are yours?

2. Achieve

Huh? Isn't that like saying "breathe"? Well, no.

I've worked with many companies (the majority, in fact) that set goal after goal after goal, as if goal setting is what will get them the gold. It won't. Achieving those goals is what gets the gold. Start with a goal you can achieve. Achieve it. Then another. Then another. Then achieve your BHAG. Then another BHAG. And another. Build a solid record of achievement. Very few nonachievers turn up at the Olympics and then suddenly win. They arrive at the Olympics with a track record of achievement.

3. Celebrate people

There's a reason that sales goals alone don't bring the gold medal: In the end, they're just numbers. Sure, sales goals are important (you won't get far without them), but people aren't motivated to go for gold by just numbers. They're motivated, frankly, by what's in it for them--ego, power, fun, passion, fulfillment--the exact same things that motivate you.

On the way to achieving your goals--small and large--make sure that your people are the centerpiece of celebration, not the numbers. It's your people who will win the gold for you, after all, not your balance sheet.

4. Teach, coach, mentor

Business is a team sport--you don't get the gold by excelling individually. Communicating your goals is one thing; inspiring your people to rise to those goals is another. But trading your time and energy to be a resource to your team members--mentoring them, coaching them, teaching them what you know and they don't--that's how you build not just a winning team but also one that can compete at Olympic level.

5. Get out of the way

If you diligently apply the four principles above, at some point your team members will begin to push you. You will feel it--their intuition about what works and what doesn't becomes more finely honed than yours. Their ideas are faster, better, easier to implement than yours. Their knowledge of your product, of your customers, of your systems is deeper, richer than yours.

That's when you know you have an Olympics-level team--one that can win. Your job is to get out of the way and let it.

Will you go for the gold? Or is today just another day?

Friday, July 13, 2012

Read How The Richest Americans Go So Rich

How the Richest 400 People in America Got So Rich

By Derek Thompson | The Atlantic – 23 hours ago

Screen Shot 2012-07-06 at 2.15.33 PM.png

In 1992, the 400th richest person in America made $24 million.

In 2007, the 400th richest person in America made $138 million (or $87 million, inflation-adjusted).

Now, that almost certainly wasn't the same guy. There's a lot of churn at the top of the money pyramid. In all of the 1990s, only 25% of the Fortunate 400 made more than one appearance. But the overall message is the same. The rich keep getting richer.

According to the IRS, which recently released 2009 data from the 400 richest individual income tax returns, the real runaway growth in wealth has come from capital gains. In the last years of the bubble, the "Fortunate 400" made nearly half their income from capital gains (a.k.a.: profit from the rising value of an investment, such as stocks or property) and less than 10% of their income from old-fashioned wages.

The average income of a top-400 earner grew by 650% between 1992 and 2007 to a whopping $344 million. Over that time, the average salary didn't even double. But the average capital gains haul increased by 1,200%. So how do the richest get richer? Not from their wages. From their investments.

Here's a look at the average salary and average capital gains income of a top-400 earner since 1992. Y-axis is labeled in thousands of dollars and all-time highs are noted in the graph.

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Three last things:

(1) Who are these people? As Tim Noah explained on our business page, a 2010 study studied the top 0.1 percent, who currently make at least $1.7 million. That's 14-times less than our Fortunate 400 group, but it's the closest we've got. Four in ten in this group were executives, managers, and supervisors at nonfinancial firms. Eighteen percent were financiers. Next came law (7 percent), medicine (6 percent), and real estate (4 percent). My guess is that the top 400 skews toward finance and chief exec even stronger. A lawyer/doctor making $2 million I can imagine. But $24 million?

(2) Capital gains absolutely dictate the wealth of the richest Americans. As Matt O'Brien graphed for us, that's why the income of the top 0.1 percent hugs the S&P so closely.

(3) Remember that as this is happening, the long-term capital gains tax rate has fallen from 28 percent in 1990 to 20 percent for the latter half of the 1990s to 15 percent under George W. Bush.

Financially Fit Reveals 5 Secret Habits of Wealthy Americans:

Wednesday, July 11, 2012

3 Simple Ways to Make People Happy at Work

Learn these strategies to make your employees happy, and extravagantly execute them. You'll create a better business.

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Most CEOs know that, if their workers are happy, they're also more productive. But how to make them happy is the challenge. Many take the goal too personally and try to build staff contentment through personal relationships. They get exhausted and find the strategy simply won't scale.

So what can you realistically pull off to make people happy at work?

Professional growth
People want to stretch, to develop their natural talents, feel their life has a narrative and is going somewhere. When they feel that they are growing, they may be exhausted but they're also inspired, energetic, and willing to take on a great deal. (That's one reason why investing in people can deliver a higher return that investing in new technology.) Anyone who reports to you (and anyone who reports to them) should have a professional development plan. That will keep everybody engaged, busy, and--eventually--happy.

Strong community
Everybody wants to be proud of where they work, to feel that they are investing the most precious thing they have--time--in something that matters. For some companies, the mission or the products are enough. If you make things that cure disease, create cleaner air, save carbon emissions, or improve life in any way, your business has an intrinsic sense of purpose which is probably what drew people to it in the first place. If you make ball bearings, knowledge-management software, light switches, or other kinds of widgets, you may find it tougher to demonstrate how you make the world a better place. Superficial social-responsibility projects won't fill this gap for you. You need to create direct links between the success of the business and the community you serve. These need to involve the entire work force and should be active, public, visible, and long lasting. Many companies get their staff to choose the causes or charities they support. The more they're engaged in these commitments, the more meaningful they will be to them--and your company community.

Fair treatment
"Everybody here is somebody." That's how one call-center rep once explained to me why he loved the company where he worked. The job wasn't thrilling, the pay wasn't great, but every single person was treated with love and respect. Just walking through the door, he said, made you glad to come to work. When people got sick, co-workers worried. When someone was due to retire, she most likely came back to work part time, just for the camaraderie. Sooner or later, everyone in a company like this talks about it as being like "family." The CEO knows everyone's name--even the names of everyone's kids and pets. This kind of fair--and kind--treatment also means startlingly low turnover rates, which also saves money. But it's not really about the money.

The very best companies I've studied and written about honor these principles and enact them lavishly. They don't pay lip service, and they don't do the bare minimum; they go overboard. Their CEOs do so because they know the secret of leadership: Look after the people, and the people look after the business.

Thursday, July 5, 2012

If you own your own business today, then you must read this

Top 3 Bonehead Moves Entrepreneurs Make

No one said starting a business would be easy. But don't make it harder on yourself with these dumb mistakes.

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Today's Editor's Picks

No one said starting a new business would be easy--in fact it's pretty tough. But many entrepreneurs make it much harder than it needs to be with dumb mistakes that can quickly kill their businesses. So says Victor Green, author of How to Succeed in Business by Really Trying, and a serial entrepreneur who's launched several successful companies, and has spent the past 15 years consulting with other entrepreneurs.

Here are the biggest blunders:

1. Skimping on research.

"The most important mistake people make is they fail to research their ideas sufficiently. They talk to their mother, and their father, and their friends, and all these people say, 'You're so smart!' Unfortunately, these people won't be your customers."

The only way to find out if an idea will actually work is to test it in the actual marketplace, Green says. "And once you've researched it, get a much wider look at how the industry will progress. You may have something that's a good idea on day one, but will it continue to be a good idea over time?"

2. Focusing on revenues rather than profits.

If your main concern is revenues and how they're growing, you're missing the most important part of the picture, Green says. "So many people are driven by that sales figure. They'll say, 'I did ten million in sales last month.' I say, 'How much did you earn?' They say, 'We're sort of breaking even.' Then what are you running a business for? I call that vanity vs. sanity!"

Of course, Green concedes, most start-ups aren't profitable right away. "It may take you five years to make a profit. But the purpose of a business is to make a profit, and you have to be honest with yourself about whether you can do that."

3. Never giving up.

It's the moral of a thousand Hollywood movies: Never lose heart! Don't quit when the going gets tough! But this attitude leads to trouble in the business world, Green says.

"People drive themselves to keep up an appearance because their egos get so inflated," Green says. "Will you say, 'I've been killing myself for two years, I've got $2 million invested, and I'm going to carry on no matter what.' Or will you be sensible enough to say, 'I'm a grownup. I'm going to shut this business down, it won't affect me, and I'll start again."

Being willing to pull the plug on your own creation is the test of a true entrepreneur, he adds. "I always congratulate people who tell me, 'I'm going to pull the plug--it's not working.' Every person in business will have a failure during their life, and if they say they don't I can only think that they have a very poor memory. Do you do most things right? If you get things right 51% of the time, you're ahead of the game."

Did you know that Groupon sold for $5.3billion to Google

The new Mark Zuckerberg: Internet entrepreneur to sell Groupon website to Google for $5.3billion

By DAILY MAIL REPORTER
Created 8:26 AM on 1st December 2010

Selling up: Groupon founder Andrew Mason is about to become a billionaire after agreeing a deal with Google

An internet entrepreneur was today set to follow Facebook creator Mark Zuckerberg and become a web billionaire.

Andrew Mason is on the verge of selling Google his fast-growing business Groupon for $5.3billion (£4.1billion).

The 29-year-old's website, which he set up two years ago, already employs around 1,000 people mostly in his home city of Chicago and has 2.5million users in Britain alone.

It is currently growing at around 10 per cent each week as it adds new users through Twitter and Facebook.

The website offers users discount vouchers called 'Groupons' which give large discounts on retailers websites.

Groupon sends its members daily e-mails with about 200 discounts for goods and services.

The deals are activated only when a minimum number of people agree to make a purchase, giving Groupon clout to negotiate steep group discounts on products.

The deals expire unless enough people sign up.

But despite being described by Forbes as 'the world's fastest growing company', Groupon is tiny compared with Facebook.

More...

The social networking site which was set up by Mark Zuckerberg and has had a film made about it is now valued at $50billion (£32billion).

Groupon makes it money by taking a cut of each sale and has a projected turnover of $500million (£320million) this year.

Enlarge

The Groupon website set up by Andrew Mason which has up to 90 per cent off products

Owner Andrew Mason was also reported to have turned down a $2billion (£1.3billion) offer from Yahoo in April because it did not meet his valuation.

Billionaire: Mark Zuckerberg created Facebook

His website provides up to 90 per cent off products ranging from glasses to car hire and cinema tickets.

Commentators have described Google's potential purchase as a 'killer move'.

Kara Swisher, from the All Things Digital website, said the deal will 'give (Google) huge troves of data about consumer buying habits and merchant information across the globe'.

Mr Mason, who lives in Chicago with his girlfriend, has over half his employees working the telephones making sales with small businesses.

In June, Groupon was registering eight million subscribers to its daily deal e-mail, with about 12 million unique visitors monthly to its website.

In the UK, it claims to have saved Britons £52million and is currently the 69th biggest website in the country.

The up-and-coming entrepreneur is famed for his sense of humour.

He studied music at university but dropped out after three months describing the course as 'the uselessness of which served as a chief inspiration not to be useless.'

He then set up a web service which formed the basis of Groupon.

Mason once claimed he owned over 200 cats, but when asked about it on live television he admitted it was a lie.

He said: 'Most CEOs will make stuff up about themselves to sound way smarter and cooler and people are disappointed to find out otherwise.

'I decided to set the bar very low and make up lies about myself that make me sound lame.'

Monday, July 2, 2012

Meet Americas Coolest Entrepreneurs Under 30

The 30 Coolest Entrepreneurs Under 30

Inc.'s most promising young entrepreneurs, class of 2012, includes the founders of Pinterest, Spotify, and 28 other awesome, visionary outfits. You gotta meet them.

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Today's Editor's Picks

Of course you know about the "pinboard" site Pinterest, which attracts 20 million visitors a month and has been valued at, oh, a cozy $1.5 billion. And Spotify, the Internet music service, is a whisker from being a household name, with more than three million paying users and a reported $220 million funding round waiting in the wings. To have created either company would be a pretty amazing lifetime achievement.

The fact is, though, the two companies' founders are just getting started. Pinterest's leaders--Ben Silbermann and Evan Sharp--are each just 29 years old. The serial entrepreneur behind Spotify, a Swede named Daniel Ek, is also a year shy of 30. In the age of Mark Zuckerberg, it's easy to shrug at tales of fabulous success among the improbably young. But seriously, now: How many great, disruptive businesses had you launched by age 29?

Odds are, quite a bit fewer than have been created by Ek, Silberman, Sharp or any of the 30 incredibly accomplished 20-something entrepreneurs identified in this year's 30 Under 30 ranking. Not to brag or anything, but Inc. has a pretty respectable record at indentifying future superstars before they're known in this ranking. Prior honorees have included Mark Zuckerberg (Class of '06), Aaron Patzer (2008), and Lauren Bush (2010), to name just a few.

You probably won't have to wait long for the class of 2012 to yield its own crop of mega-overachievers. One of them might be Jeremy Johnson, the 28-year-old college dropout behind 2tor, an online educator that is partnering with Georgetown, UNC-Chapel Hill, and USC to deliver college- and professional courses that are every bit the equal of those insitutions' classroom offerings. Ben Milne, a 29-year-old serial entrepreneur, is undercutting fee-heavy credit card companies with Dwolla, his cashless payment start-up. And Lucas Buick and Ryan Dorshorst, the 29-year-old co-founders of Hipstamatic retro photo filters for smartphones, inked a deal earlier this year with Instagram, the photo sharing app that Facebook bought for $1 billion in April. (Instagram, in turn, is led by 30 Under 30 alums Kevin Systrom and Mike Krieger, class of 2011.)

Some observations about this year's 30 Under 30 honorees:

They're solving big problems. These young entrepreneurs are going after sectors that are in desperate need of reform, such as health care and education. Zach Sims and Ryan Bubinski, co-founders of Codeacademy, and Adam Pritzker, Matthew Brimer, and Brad Hargreaves, the team behind General Assembly, are teaching the business and technology skills that are critically important in today's job market. Nathan Sigworth's Pharmasecure is working to combat counterfeit drugs in developing countries, while Aza Raskin's Massive Health app, the Eatery, creates a community that encourages healthy eating. GiveForward founder Desiree Vargas Wrigley is helping families raise money to cover the costs of medical emergencies.

They're creating jobs--lots of them.
While unemployment stats are consistently bleak and the jobless rate among young people a staggering 23%, the Inc. 30 Under 30 are creating jobs--and at a higher rate than ever before. This year, the Inc. 30 Under 30 employs more than 1,800 people, up 73% since last year. The median number of employees at companies on the list is 25, up 92% from last year. The biggest such job creators are serial entrepreneurs like Steve Espinosa (Appstack, a mobile website creator), and those who are well beyond start-up stage and have been in business for more than five years like Ilya Pozin (Ciplex, a web designer).

Manufacturing is back.
Inc. has already noted that American manufacturing is making a comeback. The young manufacturers who rank among the Inc. 30 Under 30 this year care about where they do business, too. Take Rachel Weeks, founder of School House, which makes fashion-forward college clothing; she brought her manufacturing from Sri Lanka back to Durham, North Carolina and, in the process, found a new and meaningful brand identity. Ziver Birg of Zivelo makes kiosks in Marion, Indiana and helps keep 200 metal fabricators employed at a local factory.

They're still young, but older than before.
This year, 70% of the Inc. 30 Under 30 founders are older than 27. And not one was younger than 25. It makes sense, if you think about it. GenY, a highly entrepreneurial generation, is growing up. Will the group that follows be as smitten with creating new businesses, and as comfortable taking on the risk? We hope so.

The future's in mobile.
We could cull together an Inc. 30 Under 30 made up entirely of mobile app makers, but we narrowed the field of applicants to those with truly innovative products. Among them: Geoloqi, which provides location-tracking of people in potentially life-threatening situations for a U.S. Department of Defense contractor; and Heyzap, which has created one of the largest mobile gaming communities in the world.

Check out the full Inc. 30 Under 30 list for yourself; read individual entrepreneur profiles, and watch them in videos. And be sure to cast your vote for your favorite.