Wednesday, December 23, 2020

15 Things Not to Do as an Entrepreneur in 2021

Written by: Ian Khan
Inventor of the Future Readiness Score™

Whether you're a small business owner or run a large enterprise, avoid these missteps in order to get ahead next (or any) year.

We all know the year 2020 presented the world with a number of challenges in the entrepreneurial space. The following are the 15 things to avoid as an entrepreneur in the year 2021. 

1. Lose your focus

When you forget why you got into business in the first place, you are well on the path to failure. Examples include not caring about your customers and not being able to address their concerns and needs from a product or service perspective. Always keep your customer's needs at the center of how your products and services are developed. Continuously make sure that you are reaching out to your customers and constantly evaluate if you are on the right track.

2. Lack of leadership

Organizational leadership encompasses numerous concepts and ideals, with sales, marketing, operations and personnel management just the tip of the iceberg. When organizations and leaders start making the wrong decisions, it's typically the start of a bad outcome. In 2021, take the time to focus on leadership and creating value.

3. Not caring about your employees

As an employer and as an organization, if your employees are not happy, motivated or engaged, it is impossible for them to serve your client base diligently on a daily basis. Successful organizations work on their inside game and internal structure before they start going out to generate revenue and tackling larger goals.

4. Not working with partners

Successful organizations always look for opportunities to work with others. Successful leaders understand that winning is about collaboration. Start out by seeking 10 partnership opportunities with potential partners and work on something small to start off with. Consistency is key to winning the game.

5. Build walls

Successful organizations tear down walls. Never build walls with your stakeholders. This includes competition, industry organizations, associations, the media and any other organization. Be the person who tears down the walls and helps others connect and build a better industry. Become the leader that others can look up to and ask for help because they trust that you can help tear down walls.

6. Ignore your clients

Never ignore your customers. Many times, organizations focus too much on internal happenings. One of the companies that I worked with in my career was focused on how good their products were and internal processes that were more complicated than needed. This led to them not paying attention to the voice of the customer and what the customer ultimately wanted. The result? Declining revenue and organizational degradation.

7. Not holding people accountable

Accountability is key to organizational success. Experts suggest that accountability is one of the top reasons why organizations succeed. The American Society of Training and Development (ASTD) says that we have a 65% chance of attaining a goal if we commit to it. There are many studies that prove that personal accountability, organizational accountability and using accountability coaches helps increase the possibility and chance of completing a goal. You can elevate your organization's accountability by driving a culture of being held accountable.
8. Not creating a culture of execution

Execution is probably the most important element in successfully reaching a goal. Many of us endlessly plan things, but fall short when it's time to execute. Use the pursuit of consistent execution as a tool to get ahead. Make sure you deliver on the promise that you have made to your customers, employees and other stakeholders by executing on your stated tasks and goals.

9. Not taking any risk

Many industries today are suffering because they refuse to take any risks. Service industries such as legal and accounting, for example, are battling technology and the decline of traditional business models because they refuse to adapt to a new way of conducting business. Business risk is not only a financial risk, but it's also about exploring new areas of opportunity, creating new revenue streams and exploring avenues that have not been explored in the past.

10. Not having standards

Have you ever heard of an automobile company that had zero safety standards? What about an airline that has no operational standards? It's impossible for some industries to not follow standards because a lack of standards can lead to dire consequences. Make sure that you operate with high standards. This means doing the best, expecting the best and creating a mindset of quality and a minimum level of acceptable standards within your organization, across the board.

11. Letting people get their way

Organizational bullies are people who get their way. These could be people at a strong position within your organization who have developed a habit of getting away with actions that undermine organizational standards. Keeping your organization's culture free from organizational bullies is a tough task for leaders. However, it is important that everyone who is part of your organization knows the value you create, the culture you have and respect everyone they come across within the organization. This also goes into respecting organizational policies, the vision of the leadership and what you stand for.

12. Focus too much on competition

Some industries are very focused on what the competition is doing. In a small market with many companies offering the same products and essentially targeting a very small number of customers, competition and getting ahead can be a "do or die" situation. If all your focus is on competition, you start lagging in being an innovative and out-of-the-box thinker. Do not focus strictly on the competition, but work on your inner game, making your product and solutions more valuable for your customers and raising your standards
13. Ignoring your critics

Have you ever had critics who are always on your case? If not, then you have not really made an impact on your industry. This way of thinking is a bit non-traditional. You should always have critics and those who point you in the right direction, helping you identify both areas where you face challenges and areas where opportunities exist. Pay attention to those who point a finger at you and help guide you in the right direction.

14. Being socially awkward

In 2021, you must become a socially engaged organization. This means supporting social causes, meeting other people with similar interests, helping your employees be part of social change, involving your organization in initiatives and ideas that are beyond just what you do professionally as an organization. At a local level, you may find a school basketball team that needs support or a conservation project seeking volunteers. These projects and opportunities are a means to get your employees engaged and work closely with the communities that support you as an organization. Get involved and do not be a socially awkward organization.

15. Stop learning

If you have stopped learning as an individual and as an organization, then there is nothing much that can be done. Look at some of the industries that are dying a slow death today, including the accounting industry. Traditional accounting firms are facing an uphill task in surviving as technology is crushing firms that refuse to change and adapt to a new way of doing business. Always stay hungry as an organization and ensure that everyone within your company is learning something new.

Success as an organization, as a leader or as an individual contributor, is a blend of many different things, but there are plenty of opportunities to you can make headway and succeed in 2021 as an entrepreneur and as a business.

Thursday, December 17, 2020

2021 Small-Business Economic Outlook


Prepare now so your business can grow after the pandemic ends.

Just weeks from now, 2021 arrives, and business leaders must be prepared for abrupt shifts in the needs of their customers. For example, if your business boomed during the pandemic, are you prepared for a post-pandemic slowdown?

Investor fear that Zoom might not be prepared for this has cost its shareholders. Since peaking at $588 a share in October, Zoom's stock had lost 32 percent of its value by early December.

Why? I'd guess part of it is due to good news about Covid-19 vaccines from Pfizer, Moderna, and others and means that investors are betting the pandemic will end and people will go back to the office and not use Zoom as frequently.

Zoom's stock fell on November 30 when the company announced a growth slowdown. More specifically, for the third quarter Zoom reported 367 percent revenue growth while forecasting still blistering 329 percent growth for the fourth quarter ending this month, according to CNBC. Between then and December 9, Zoom stock fell 17.7 percent.

The point? Regardless of how the pandemic has affected your business, its end is likely to change things. You should prepare now to change your business strategy to take advantage of the new forces that could propel company growth after the pandemic.

2021: A Sideways-W-Shaped Recovery

Bearing in mind the idea that the pandemic has been great for some industries, terrible for others, and a tossup for ones in the middle, I think 2021 will feature a sideways-W-shaped recovery.

You should be able to find your industry in one of the three prongs of the W below. For each one, I describe how things have been going for your industry this year, what is likely to change in 2021, and the questions you should be thinking about now.

1. Covid-19 winners like Zoom and Wayfair boomed in 2020. Can they keep growing?

The first prong of the W is companies like Zoom, Shopify, Wayfair, and others that have boomed during the pandemic -- thanks to the surge in people working from home.

In 2021, these companies will need to decide how to adapt to a world in which the pandemic ends and people return to a mixture of how they lived in 2019 while continuing to practice some of the new habits they adopted during the pandemic.

Business leaders in this category ought to initiate close conversations with at least 100 users of their service. Discussion topics might include:
  • Will you go back into the office when the pandemic ends?
  • If so, how will you split your time between working from home and in the office?
  • How will that change affect how you will use our product?
  • What new services or modifications to existing ones will you need as your work-style changes?
On the basis of the responses, leaders should reimagine their business strategy, develop prototypes of new services customers demand, get feedback, and refine the services so they can launch them as the pandemic ends.

2. Covid-19 pivoters won by aiming their product at surging demand. Will they tack in the right direction?

The second prong of the W will be companies that adapted their strategies to take advantage of the increase in demand due to the pandemic. What comes to mind here is a company that provided ultraviolet lighting for diamond retailers that enjoyed a surge in demand when it changed its ultraviolet light to kill airborne viruses and bacteria.

As I wrote this August, Eden Park is a maker of ultraviolet lights designed to distinguish fake from real diamonds. Within weeks of the pandemic's starting, Eden Park was able to retool and launch a product that used UV light to kill the novel coronavirus that causes Covid-19 in crowded spaces.

Eden Park shipped 1,000 prototypes within weeks of launching them, and, by August, the company had grown 10-fold and was making a profit. However, will such companies be able to sustain their growth when the pandemic ends?

My advice would be for their leaders to research their current customers to gain insight into how their needs are likely to evolve and revamp their strategies as the pandemic ends.

3. Covid-19 losers like airlines and movie theaters are barely surviving. Can they ramp up when demand surges?

The third prong of the W is companies that lost 90 percent of their business during the pandemic -- such as airlines, cruise ship operators, restaurants, and movie theaters. While they cut back costs to survive during the pandemic, they will need to quickly add capacity and staff later in 2021 as the pandemic ends to meet what could be a surge of pent-up demand.

Once the pandemic is under control, such companies will hire back people and order supplies to handle those who return to these businesses. Make sure you've lined up the financing you'll need to do that quickly.

Tuesday, December 8, 2020

Keep board meetings focused on strategy, avoid riffs, specialists say


Written by: Robert Freedman@RobertFreedman

Panelists at the MIT Sloan CFO virtual summit recommend getting financial information to members early to make board meetings more productive.

Share company financial information and answer questions before quarterly meetings to equip board members to focus on forward-looking strategic issues, CFOs and board specialists said this week at the MIT Sloan CFO virtual summit.

Send an email several days before the meeting, and give board members a deadline to ask questions about it, said Joanne Cheng, CFO of PatientPing, a SaaS company for medical providers to track their patients' care. The extra time lets the executive team collaborate on the answers and get everyone on the same page before the meeting.

"The three-hour board meeting is no longer a readout of any financials," Cheng said.

Another way to complete the financial review ahead of time is to hold a pre-meeting.

Using the board meeting to look at a company's financial performance over the last quarter is a poor use of time, Deb Besemer, chair of video hosting company Brightcove, said. It's more important for the board to use the time to consider the company's strategic direction.

"At the end of every board meeting, it's always, ‘I have to get to the airport,' and the last couple of presentations have to be rushed," Besemer said. "The management team has sent out a deck of 80 slides, and you never get to the strategic ones."

For the pre-meeting to be effective, the CFO must speak to the board at a level the members understand. "That's a challenge," she said. "Not everyone has credentials in finance."

Bring consistent metrics

At these meetings, CFOs should present the same metrics each time; this gives board members a clear picture of company performance.

"The last thing you want to do is introduce different cuts on information and then invest time in a meeting to educate people on what they're looking at," Jason Park, CFO of sports betting operator DraftKings, said. "Stick to them quarter over quarter so people have some pattern recognition."

CFOs can establish upfront what measurements are most important to each board member and try to design metrics to capture what they want.

If the CFO identifies other measurements to track, let the board know your intention, even if you don't have the systems in place to do that tracking yet.

"Lay out a vision ... that you want this data but aren't able to report on it yet," said Cheng.

Group focus

While each board has its own dynamic, the CEO and CFO shouldn't enter a meeting in disagreement over a major issue, such as an acquisition.

A big disagreement can signal a problem between the two most important executives in the company. "That's a thorny issue," Besemer said.

The CEO and CFO disagreeing on smaller issues while the board's in session, on the other hand, can be a positive; it gives members a chance to see a matter from different perspectives and shows that the CEO values the executive team's views.

"It shades risks differently," said Matt Vettel, managing partner of private equity investor Great Hill Partners. "They're challenging each other, looking for the best solution. That can be very helpful."

Although it's important for CFOs to develop relationships with each board member, they should avoid trying to solve problems with individual members outside of the board context.

"It's a common trap that really puts the CFO in a bad position," Vettel said. "You're better off saying, ‘That's a very interesting viewpoint, something the board should discuss. Let me put together some information to support your viewpoint and let's have the board make the decision.'"

The biggest mistake CFOs can make is being less than forthright on the company's financial position. There's only one recourse for a CFO who misleads the board on a financial matter.

"If trust is broken with the CFO, it's really hard to get that back," Besemer said. "In my experience, the CFO has to go at that point."

Soledad Tanner MIB ’02 Honored with Trailblazer Award