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Board Mtg

A common misconception of business owners is that outside advisory boards are for larger companies – multi-million dollar international firms you read about in the news.  Smaller mom and pop shops, individual proprietors, or firms with less than $5 million in revenue would never have an outside advisory board. – Not true.

An outside advisory board consists of three or four individuals (outside of your business) that have the competencies and capabilities to help you be more successful.  It is that simple.

Most businesses are started by an individual, or several individuals, who invest their personal capital (time and money) in an idea.  In the beginning, they do everything, primarily because they simply don’t have the funds to hire employees.  If successful, they gradually develop into a more structured organization with numerous employees, customers, business relationships, and a defined capital base.  Along this journey, it becomes increasing difficult for the owners to break away from business operations to spend time thinking about the strategic perspective of the business.  They can’t work on the future because they stuck in the day-to-day.

This is where an outside advisory board can help a lot of companies.  Its primary purpose is to help/guide owners to spend time working on the future of their business.  In other words, planning for the future.  Of course, outside advisory boards also help owners work on the day-to-day stuff; but their greatest value is strategic.

There is a long list of reasons why companies say they have not considered outside advisory boards.  In many cases, the reasons are based on a lack of understanding of the role and responsibilities of outside advisors.  In other cases, the owner simply does not want outside advisors.  For companies that set up advisory boards, the board is one of the most valuable assets an owner can draw upon; regardless of the size of the business, its products or services, or its industry.  Clay Mathile, founder of Aileron and former owner of The Iams Company, has said that “if I had a popcorn stand on the corner of Third and Main in Dayton, I would have an outside board; it is the best investment you will ever make in your life.”  I know quite a few companies that have set up a Board of Advisors, and not a single one has regretted that decision.  Most wish they had done it sooner.

There are organizations that can help you develop a better understanding about the value of an outside advisory board.  Check local business listings, organizations, chambers, etc. to find out more.

On the other hand, I realize that outside advisory boards aren’t for many business owners.  If this is the case, find an strategic business expert that can help you develop and implement a “strategic perspective” of your business.  Like advisory boards, a strategic business expert is also a valuable asset business owners can draw upon to help them to be more successful.

Regardless, of setting up an outside advisory board or using an expert, you must take charge of your future; don’t leave it to chance.

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old-man

In the new normal, data has become the Holy Grail for making business decisions.  Everywhere you look the importance of data comes to the surface.  Marketing programs, websites, hiring practices, social media, finance, sourcing, and manufacturing, to name just a few, all rely heavily on data as a feedstock for decision-making.  Throw this data in to a computer and ‘presto,’ you have your answer.

As the world moves to the age of data scientists, data engineers, data analysts and data architects, I reflect on something I experienced many years ago that I believe remains true today.

I took a course at Massachusetts Institute of Technology in computer simulation of business strategies.  Part of the course was a three-day forecasting competition using the data of a real business.  We set up four groups.  Each group developed their own business strategies and entered the data into the computer system each night.  The next day we reviewed the results and decided on new input for the next run.  It was a financial simulation model that involved using random number generators and distribution functions that mirrored historic company data and performance.  At that time, this type of simulation modeling was very sophisticated.  It was like the data analytics of today.

One group who corralled at the back end of the class room, included an older gentleman (old man).  He didn’t say much but when he did, his questions and comments were measured and well thought-out.  On the final day, when we were comparing our results, he spoke up.  Out of the back of the room came, “It won’t work.”  What?  “Your models won’t work.  I just cut off your raw material supply.”  Silence.  Game over.  Using his 40 plus years of business experience, intuition, and knowledge of the industry, he made a human decision that trumped our models.  It didn’t matter what the data was saying.  I never forgot this experience.

I have built many financial simulation models in my business career and realize that in every fancy algorithm, there is an old man.  I believe he also exists in today’s data analytics.  –  Beware of the old man.

teens

In the last 100 years, 16,307,243 men have been inducted (drafted) into the military: WWI – 2.8 mil., WWII – 10.1 mil., Korea – 1.5 mil., and Vietnam – 1.9 mil.  In 1970 the Selective Service System went to a lottery system based on your birthday.  In that year, the first 195 birthdays were drafted; my birthday was #82.  It didn’t matter to me since I was already in the U.S. Marine Corps.  The last man drafted entered the Army on June 30, 1972.

No one that I knew wanted to be drafted, but off they went to serve their country.  As the years passed, I’ve bumped into very few individuals that served in the military, including those drafted, that didn’t consider it a life learning experience.  We learned responsibility, commitment, loyalty, discipline and the experience of “serving” our country.  We learned how to work with individuals with vastly different backgrounds and perspectives.  And, we experienced some things that we would like to forget.  Most of us can still talk about it as if were yesterday.

Let me put this into perspective.  Today we have 1.4 million individuals serving in the military protecting 323 million of us; or 0.4 percent of our population.  So very few individuals will acquire that “serving your country” experience.

I realize that everyone can’t serve in the military.  In a ‘We Are the Mighty’ article in 2015, it was reported that there were 34 million individuals between the ages of 17 – 34.  Of that group 71% wouldn’t qualify for military service due to physical, behavioral and emotional issues.  Of the qualified group, only 1% had an interest to serve in the military.  We, as a country, have become disconnected from the idea of serving our country.

Here is my thought-provoking proposal.  Every young person, starting at age 18 must serve their country in one of the following services.

  • Military (two years active, or 6 years reserve)
  • Conservation Service (National Parks, recreation, energy programs, etc.)
  • Medical Service (Veterans hospitals, health service, etc.)
  • Peace Corps (as is)
  • Educational Service (Programs for supporting primarily at risk schools, preschool programs, maintenance, etc.).

There would be two commitment choices for non-military service; a two-year full-time commitment, or a four-year commitment of two active weeks each year and two days a month.  Pay grades and ‘service’ benefits would be like those for military personnel.  How about earning funds for college, college credit, help with buying a house and medical benefits?

While the service requirement starts at 18, full-time student deferments (college, trade schools, etc.) would make sense for filling certain positions; however, the deferment would have a set period.  Also, the non-military service options would provide a great opportunity for those individuals with some physical limitations that could not serve in the military.

The future of our country will be determined by how well we prepare our young people.  However, too many of them today are struggling to find a path forward or a purpose; or in street terms, a way out.  I believe this would provide a valuable building-block for growth, and it would greatly benefit our country.

 

 

orignal-thought

One of the great benefits of the rapid development and integration of computers in our lives is that information/data is ubiquitous.  It is basically available to anyone who wants to discover it.  So, some say, original thoughts are simply a compilation of existing information; a new recipe of existing ingredients.  It reminds me of a quote I ran across years ago:  Charles H. Duell was the Commissioner of US patent office in 1899 when he said that “everything that can be invented has been invented.”

Think of the journey the Wright brothers traveled to develop the foundation of manned-flight.  Remember the term “wonder drugs?”  They were ‘magical’ discoveries.’  I remember the conversations I had with my Uncle Frank, who was born in 1914, about some of the discoveries he experienced in his lifetime.  Even as an engineer, he marveled at the atomic bomb, and in later years personal computers.  Society couldn’t begin to understand the substance of these early discoveries.

For me, I remember in 1964 when I was at the World’s Fair in New York City; we were young kids.  Several of my friends and I walked into a room to get something to eat.  We were directed to a cooler that had hot dogs in small plastic bags.  Quite surprised, we turned to the clerk and said “these are cold.”  He pointed to a machine of some kind and told us to put the hot dogs in it and press the hot dog button.  Sixty seconds later we had steaming hot dogs out of a machine that didn’t get hot.  It was magic.  We couldn’t wait to get back to Kentucky and tell our friends about this magic box.  The funny thing is that we couldn’t adequately explain it.  The magic – a microwave oven.

So, what has changed?  Is original thought dead?  My answer, a resounding NO.  What has changed is the “expectation” of discovery.  Just a few decades ago, society did not expect some of the inventions that have become part of our lives.  Now society recognizes the power of the technology/information/data we have at our fingertips, and how it is going to change our future.  Original thought is not seen as ’discovery;’ it is simply an expectation.  Even to the point where you hear “Why is it taking so long?”

 

 

victory-boy-silhouette

For almost forty years (1961 – 1998) ABC’s Wide World of Sports held a special place in sports broadcasting.  Who could forget those iconic words “The Thrill of Victory and the Agony of Defeat” coupled with clips of spectacular sports feats and unbelievable calamities.  My favorite was the ski jumper that crashed as he got to the bottom of the 90-meter jump flying off into the crowd; truly the agony of defeat.

As the years have passed by, I am amused by the change in perspective of losing.  Back then, the thought of losing was a great motivator not only in sports but in life in general.  Losing made you feel bad; and it made you want to work harder to win the next time.  I can still remember the time I didn’t make a little league baseball team when all my friends did; I wasn’t good enough.  What a motivator; it was the last time I didn’t make a team.  At the end of the season, there were no “participation” ribbons and plaques.  In fact, there were very few trophies in youth sports.  When the season was over, everyone knew how they did; that’s it.

We have gotten to a point where, in society, losing is not a big deal.  So what?  I lost!  No shame, no regret, no big deal, no disappointment.  A great business example is filing bankruptcy.  Bankruptcy use to carry a bad stigma, now it is just another option in an array of possible actions.

I worry about the standards we are setting for our children when we don’t expose them to the setbacks resulting from failure.  Setbacks they can learn from, setbacks that become the impetus for growing into something better.  Failure should hurt.  Failure should make you feel bad.  The feeling of coming up short should be a building block for improvement.  It should not be masked over with a feel-good participation trophy, a ‘get out of jail free’ card, or societal cuddling.  I worry about young people entering the workforce not knowing the pain of failure; i.e., the agony of defeat.

Some of the strongest people I know experienced great failures in their lives, overcame insurmountable odds, and became incredibly powerful people.  When you ask them about their success, somewhere early in the conversation they talk about their setbacks and how they had to fight their way out of a dark place. – No excuses.

mistake

I find it somewhat amusing that the term “unintended consequences” has been surfacing in the political discourse of the presidential campaigns.  It has been introduced as a new discovery.  Wow, look what happened when ‘they’ did that.  That’s awful.

There are always unintended consequences to a decision; some good and some bad.  It is not just recognizing that there will be unintended consequences to your decision that is important; it’s also thinking about how these consequences might occur.  – And, planning what to do if they do emerge.

In two earlier posts The Second and Third Order Consequences (https://thinkinthingsover.wordpress.com/2013/02/03/the-second-and-third-order-consequences-8/) and The Second and Third Order Consequences – Part II (https://thinkinthingsover.wordpress.com/2015/09/27/the-second-and-third-order-consequences-part-ii/) I give examples of how unintended consequence occur.  They are not random, and they should, in most cases, not be a surprise.  You have to think beyond your decision about possible reactions outside of what you are trying to accomplish.  I am not talking about decision science or some predictive algorithm; it’s “common sense.”

By now you have probably figured out where I’m going with this.  Political discourse → unintended consequences of government decisions → lack of common sense.  Yep!

 

Numbers

Math 2

Recently, I was having a conversation with a young manager about what the future would look like fifty years from now.  I was surprised by the “certainty” of his perspective.  He delved into everything from computer technology, medicine, manufacturing, education and communication.  Each of his projections was based off of what is happening today.  They were logical and made sense.  Why wouldn’t you expect these things to happen?  It made me think of ‘numbers.’

Over forty years ago, my first math course in college was called Modern Math.  The course was about binary mathematics and set theory.  Pretty cool stuff, huh.  Yeah, that is what I also thought.  But, who would ever use this crazy stuff?

For those of you who are a little rusty on your math, binary mathematics is the world of 0’s and 1’s.  Ah, you are getting the picture.  In today’s digital world, 0’s and 1’s rule.  Simply put, we would not have computers today without binary math.  In my wildest dreams back in that class, I could have never imagined the impact binary math would have on our society fifty years later.  Neither can this young manager project with confidence what the world will be like in fifty years.

Let me put this into perspective.  Back in my class we were doing binary math problems by hand.  Next, in the late 1970’s, I started using the ‘new’ personal computers, which seemed like magic at the time.  Now, Intel (Visit their website: “Guide to the Internet of Things”), estimates by 2020, over 200 billion devices will be connected through the Internet creating in excess of 500 trillion gigabytes of data each year.  Think about it; a gigabyte = 1 billion bytes, a byte = 8 bits, and a bit is either a 0 or 1. They are saying over 500 trillion ‘gigabytes’ of data. – That is a lot of 0’s and 1’s.

Trying to imagine a future world fifty years out is fun, but unrealistic.  What is important is to be keenly aware of the technological advances taking place today, and thinking about where they might be headed a few years out.  While you may be right sometimes, most often you will be surprised at what surfaces.  Most important, however, is that you will start to see patterns; which are the early images of things to come.

I will leave you with one of the projections I made about five years ago.  Nano technology → Medicine → med-bots, or robots → in my blood stream → my “in-house” doctor.  I think the holdup is that they can’t figure out how to bill me.

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