Over the past 10 years I have developed a respect for Alan and Leslie Layton.  My respect however has not been for Alan’s accomplishments in the business world but rather the relentless service that he and his wife have given.   Alan and Leslie have been one of the examples in my life of how I believe service should be done and the level of intensity at which it can be attacked.  Although my relationship with Alan has been on a more personal level,  I  have superficially been aware of some of his philosophies and approaches in the business world.

Alan was central to helping Layton Construction grow from a family business to a main stage commercial construction corporation.

I took the opportunity this week to discuss with Alan what enabled the scale and growth in Layton Construction into a world class organization.   I was delighted with the response because it resonated perfectly with the past several posts I have been making.

Alan shared the following story with me.

Back in the late 80′s he was attending a conference with several of his executives and the question was asked from the stage  ”Who has a mission statement in their company?”   Alan raised his hand at what point the speaker asked if any of his executive staff was there.  He responded that they were.   The speaker then proceeded to ask the executives   “what is your companies mission statement?”   These individuals stuttered and stammered and could not recite it. Alan stated that he was embarrassed and the members of his staff were very apologetic.  Alan then realized that what the speaker had said was true, and he wrestled with what he could use to unify the company.    He settled on the phrase:

Constructing with Integrity

Alan  went on to explain in detail the three components of what the  mantra meant:

1. What We Produce – Build using the highest level of quality and not cut corners.  Use the best materials and the best methodologies available to Construct with Integrity.

2.  How We Deal With People  -  Behave ethically and treat all people equally and with respect.   Construct relationships with Integrity

3.  The Organization We Build –  Remove posturing and politics, but build our organization and interactions with each other with respect.   Construct the organization with integrity.

These simple three words became the North Star – the guiding beacon,  indeed the Catalyzing statement for Layton Construction.

To Quote Alan:  “Everyone understood it and it was very rewarding.”

At one point at a company function they took a camera around and just began asking team  members  what Constructing  with Integrity meant to them.   Here are a few of the statements they made:

“It means I can live the same way on the job as when I am home with my wife.”

“It means I don’t ever apologize to anyone for what we do”

Alan believes that this Catalyzing statement coupled with  employee ownership in the company was what enabled the scale and durable growth in Layton Construction.

As we were closing Alan made some intriguing comments regarding the second aspect of what allowed Layton Construction to scale so effectively.  It was structuring an employee ownership program.

In my next conversation with Alan I will explore more about how he structured the employee ownership program,  and of course I will share it with you.

Thank you Alan for your insights and also for being a good man and a great example.

The closing questions that I ask you are:

Are you constructing your life with integrity?

and

What is your catalyzing statement?

Want to really focus your team and get amazing results?

Set a really big goal and then form a Catalyzing Statement around this goal.

Catalyzing statements hook people emotionally and are the driver that propels individuals towards a challenging goal.

About a month ago I heard  Rick Sapio give several examples.   I would like to share his and then give a fun one that I ran across in Japan this week.

Fed Ex – When It Absolutely Positively Has To Be There Overnight —  If you want a GREAT laugh, watch this FedEx Commercial
Microsoft Bill Gates – I picture a world with a PC  on every desktop and in every home – 1975
President Kennedy – We will put a man on the moon and return him safely to earth before the end of the century.

These catalyzing statements go FAR beyond placing a goal. They emotionally charge us and align us. They emotionally allow us to seek and believe and go forward.

A good example of this is Bill Gates. Prior to making the  unifying statement the goal was clearly set to have Microsoft be the largest software company in the world. Great goal, but where is the emotion and the emotional buy in.  It came when he stated  ” I picture a world with a PC on every desk and in every home.” That inspired us, we visualized this and indeed it enabled the goal.

This past week I have been in Asia. I was able to spend a bit of time in Japan and visited a company in Tokyo called Fujita. From the instant I entered this business I knew it was different. The tone, the conduct of the staff, and the presentation of the board room was simply different. They were focused and clearly were on a mission.  There was not the usual motion that I frequently experience in Japan.   Indeed the meeting I had was successful and at the end of the communication I could not help but poke a bit. I asked the individual I was meeting with to explain more about the company, the founder, and the history. His answer gave it all away. With out a second of hesitation here was his response:

“Fujita’s vision is to bring American culture to Japan”.

Wow, now that is powerful.  That is a hairy, big, audacious, and crazy goal.   “Bring American culture to Japan!”

You see they are not in the hamburger or movie business.  They are not selling clothing. They are not in the import / export business. Those things are simply vehicles.

They are going to change Japan from eating sushi to Big Macs, and guess what…they did.

What I did not tell you earlier is Fujita’s founder  Den Fujita is responsible for bringing McDonalds to Japan. He was also responsible for bringing Toys R Us and BlockBuster to Japan.

As I have considered this, I realized that this type of statement not only motivates us and inspires us, but also allows the company to change and extract us from the weeds when necessary.

Next time you set a big goal, create a catalyzing statement!   Hang on because it will rock your world with what happens if done properly.

In 1989 I helped make my first $2MM business mistake.  I keep this box on my life-trophy shelf to remind me never to make this mistake again.

So what was it we did?

Rich Christiansen $2MM Channel Lesson

We did what so many eager engineering types do–we built a way cool, exciting,  leading-edge technology (digital power line transmission) and then tried to sell it.

We just knew the customers would buy these by the bucket loads.  We would go to the trade shows and got mobbed, so certainly this was going to be a barn burner. Everyone told us we were so smart and this was the coooooolest technology ever.

NOT! Cool technology does not necessarily mean purchasing customers. In 1990 the company went belly up!

I would rather have purchasing customers and profit than some cool little box sitting on my shelf reminding me not to be stupid again.

Better to sell it first and build it second, than to build it first and then try to sell it.

Today I did a BootStrap Business lecture at an Entrepreneurial Launch Pad event.

I love meeting with eager individuals who are on those tender first steps of venturing out into the brave cold and exciting world of creating a business.   However, there is one thing that makes me want to scream every time I see it and indeed I saw it today.

Make sure someone is going to buy it before you build it.

Its All about the channel!

Build It and they will come…NOT!

Save yourself a couple of million $ and let my box be the reminder. Don’t build your own.

Each successful business goes through four phases. This is my Four Phase Model:

Phase One: Brainstorm
Phase Two: Examine
Phase Three: Optimize
Phase Four: Protect

Phase One: Brainstorm

Yes, yes, yes! That idea sounds great! That one, too! This is Fire, Fire, Fire, Aim. You can identify this phase by the number of “yes” responses you give: yes, that idea is viable; yes, that does sound fun; yes, that idea takes advantage of a wave; yes, that opportunity is transactional. As long as your imagination is liberated, you are in phase one. Capture all the crazy things you’ve ever thought might work. Write them on a whiteboard or in an idea document. The idea is to brainstorm lots of ideas and see what sticks out.

Not everyone does this as well as some. You probably know people who are walking idea farms—I mentioned one earlier who was so good that he couldn’t get out of the “a rabbit, a rabbit, a rabbit” mindset. If you aren’t that way, reread chapter 2, “Juice to the Light Bulb,” for ideas on getting ideas. If you are, though, realize that lots of phase-one people have a hard time transitioning to later phases. Just when you find something that works, you want to run with something else. Most people who excel at phase one have lost steam long before they get to phase four. If that describes you (and if you have the entrepreneurial spirit, it might), take steps to counteract your natural tendencies and hone your strengths. For me, I have pretty good ideas, but my real strength lies in phase two.

Phase Two: Examine

Yes—yes! No! When you have a whole stack of ideas, you need to learn to start saying “no.” Now you start to apply the principles from Aim, Aim, Aim, Fire. Sit down, have a close look at your ideas, and select the most viable. Most front-end people who see rabbits in every bush have a tough time saying “no” at this point. The transition might be tough, but realize that you should settle on only two or three viable ideas at most. Don’t throw out the others—you might need them later—but you can’t afford to jump around when you get here. Keep those ideas in the “parking lot” list. Go gas up one of your top two or three and take it for a drive!

I love working in this stage. Nothing is more fun to me than taking a raw idea and slapping a business together with baling wire and duct tape. Shoot the moon with your $5,000; if you miss, you can pick another of your top two or three ideas and make that one work. It validates all of the hard work when you see one of your ideas suddenly become viable. Your first duct-tape attempt may be crude, but when you get it functional, stand back, and say, “Yes!”—as long as you say “no” enough to make time for building your business.

Phase Three: Optimize

Yes—but no. No. There is a time to chase and a time to optimize. During the optimization phase, you will say “no” more than you say “yes.” You can’t keep second guessing which ideas are the juiciest. As well, just because your phase-two idea is able to stand on its own, you can’t leave it to start another. Now, you must move forward with your idea and develop, improve, and optimize it.

Take time to look at the processes and procedures related to your business. Can you tighten some connections? Can you sand and buff some rough edges? Can you tweak the gears to get more torque? Optimization is a great phase to be in. The infrastructure is in place and you are generating a nice profit. With a little tightening, tweaking, sanding, and buffing here and there, you increase your margin. Nice work!

Ron is great at this. I can hand him a taped-together load of wire and turn around to see a shiny, well-oiled business running in his hands. At the same time, he is my reality check. During this phase, you may discover that certain ideas just can’t be optimized. Don’t be afraid to abandon some of the main ideas or side initiatives you said “yes” to during the first two phases. Ron helps me stay on track with this, optimizing our best ideas and pointing out our weak ones. Ultimately, we head toward success because we are able to change course to maintain our optimal output.

In fact, many entrepreneurs I have collaborated with relate that they don’t always end up doing what they started out to do. This occurs for many reasons. Maybe the initial opportunity was not as quick to cash as it needed to be. Perhaps related opportunities worked out better. Maybe it hit a financial, time, or marketing wall and could not scale or optimize. We’ve been down those roads. Usually, we knew going in that we would allow our initial business to recede into the background as we developed and optimized something better suited to our long-term qualifications.

Phase Four: Protect

No. No. No. We can’t do that. We can’t make that change. We can’t jeopardize what we have. Our policies forbid us from considering that. You will find this attitude prevalent in many large corporations and government agencies. Once businesses are optimized, owners have the tendency to start thinking, “Don’t screw this up!” They develop the “play not to lose” mentality. This is good. Some things do need to be protected. Where would your technology business be without your algorithm? Or your restaurant without your special sauce? However, if you get into the “play not to lose” mentality and stay in it, it will be to your detriment.

Protecting your business from unwarranted idea chasing once you hit full optimization is important, but you might be able to snag a few rabbits without derailing your ultimate goal. Part of protecting your business is building it to the point where you can have teams that help the good things keep running while other teams can go out on exploratory development projects. If you don’t like this phase of business, that is completely fine. I don’t like it either.

Figure out which phase feels most comfortable to you. Hire others, find a partner, or develop skills that help you succeed in the other phases. Branching out to other people is especially important in phases one, two, and three—by the time phase four hits, though, you might need to consider an exit. Entrepreneurs seem to excel at the first two but often begin to lose interest by the third and fourth, when they have to say “no” more often. It is our experience that many small businesses never endure all phases for this very reason. You don’t have to be one of those many small businesses, though, if you go in knowing what you want and how to leave. Say “yes” when you can, “no” when you must, and always start with Fire, Fire, Fire, Aim as you take your business through the four phases to success.

Porter’s Points – The Four Phase Model

• Cognitively assess what phase of business you are in and act accordingly.
• “Whate’er thou art, act well thy part.”
• Are you an idea person? Do you love the details? Do you thrive on stability? Match your personality type and skills with the phase of business you are in.
• As you transition between the four phases, surround yourself with partners and employees who augment areas you are weak in.

I know another young, idea-rich entrepreneur whose ability to stumble across ideas initially fascinated me. He would think up a dozen different ventures at the drop of a hat and start to build one up a little. If another great idea didn’t take its place, he’d soon get bored and jump on the next big thing. This is the “a rabbit, a rabbit, a rabbit!” syndrome. He bounced from opportunity to opportunity but never exerted enough focused energy to make even one of his ideas fruitful.

One of my business associates uses an analogy to describe this that I love. Imagine that you are standing in front of four different soda machines. To get a soda out, you have to put four quarters in. It so happens that you have exactly four quarters. You approach the first machine, put a quarter in and hit the soda button. Nothing happens. You get frustrated and leave the machine, going to the next machine to stick in another quarter. You continue the pattern until you’ve dumped four quarters in four different soda machines.

Only then does it hit you—you’ve expended all your means and you’re still thirsty! So many people put their four quarters in four separate soda machines, then stand there pounding on the door and wondering why the soda isn’t coming out. If you want to drink from the deep, refreshing well of entrepreneurship, you must put enough focused energy at the right time into one soda machine.

I remember one really great quarters-and-soda machines moment. I was working at Mitsubishi Electric with a team that developed motherboards. Competition in the market was intense. To make its way through the thick underbrush, the team quickly investigated the market using the trusted Fire, Fire, Fire, Aim method. Ten to fifteen opportunities jumped up immediately, but some proved more valuable as we examined each rabbit. Even so, I recall how painful it was to mentally transition to the Aim, Aim, Aim, Fire mindset with all that plentiful game hopping around, just begging to be shot. However difficult it was to leave some of the rabbits behind, it was a critical transition.

More rabbits were to come. Through the team’s investigations, they wisely discovered a niche and established some barriers. It appeared that most companies were focusing on motherboards with frequent component rotation. Our team decided to target a more stable motherboard market for gear like medical apparatus, video game machines, and gambling equipment.

At the same time, Dr. Horne, my mentor and the worldwide head of Mitsubishi’s PC division, had established several strict parameters for us in accepting orders for the motherboards. Specifically, he mandated that we not accept orders unless they were at least $100,000. This was my first time in the role of general manager; while eager to earn my stripes, I wasn’t mature in the GM role. Although I agreed to the limit, I found it difficult, as our shooting had turned up plenty of smaller prey.

It frustrated me to no end that I had to let a number of lower contracts go by. How would we ever sell anything? Suddenly, my dismay quickly turned to exuberance as we landed a seven-million-dollar-per-year deal. Dr. Horne was right: waiting for the big fish was worth it. For all of the extra effort it takes to support a smaller client, you don’t get nearly as good of a payout. If we had tried to hook all the little fish, we would still be struggling for pennies that wouldn’t have even made a dent in our eventual catch.

Porter’s Points – Aim, Aim, Aim, Fire

• It will be hard to make the move from Fire, Fire, Fire, Aim to Aim, Aim, Aim, Fire. Set a limit in the amount of firing you will do; once you have hit your limit, start aiming and pick the best ideas. Focus on only one or two.
• Always write down all of your ideas (Rich and I call this list the “parking lot”). If you reach your cease-fire limits on personal time, duration of the venture, or cash flow, you might be able to take a shot at some of your parked ideas.
• Decide right now what kind of customers and orders you will accept. What are your requirements? Visibility? Sales volume? Sustained ordering? Say “no” to those that don’t fit.

While the first method might seem like a more traditional form of hunting, I found the second method to be wildly successful. Here’s the thing,
though: I wasn’t just firing blindly and counting on a random hit. This rapid-fire method, for the price of a little more ammunition, gave me useful information in much less time. I learned that shooting randomly into the bushes startled the rabbits, causing them to jump out of their hiding places. One rabbit’s jump made another pop up—and then another and then another—and then pretty soon that “empty” field was hopping with rabbits. Instead of spending all my time looking for just one, I had all sorts of choices. Rabbits were everywhere!

During my first five to seven years in business, I assailed the business world with the stealth and cunning I learned from my MBA classes. I quickly discovered there are many variables in business and in daily life, making it difficult to hit any target with your first shot. Frustrated by how my plans never quite worked, I accidentally discovered a way to change my strategy.

Inspired by my days spent hunting rabbits, I decided just to call up the competition and start acting like I was already in business. I wagered that all I had to do was get as many ideas to “jump” as I could. The new process didn’t involve long, thought-out planning, but rather demanded I go out into the market and actually test the myriad of back-burner ideas I had waiting. It worked.

In the early ’90s, new software releases came out every one or two years. Most software distribution was done on diskettes and CDs. A new release was a huge production that took serious project management, coupled with a forebodingly heavy process of developing, releasing, and updating the software. Then Internet distribution changed everything.

Different versions of software suddenly became available by simply downloading updates from the web, which computers were soon programmed to do automatically. Today, the Internet is so comprehensive that people simply develop a rapid-fire product and go live with it while still making changes. In today’s Internet-driven world, if you take a year to write a business plan, your opportunity is likely to pass you by.

Let’s say that you follow conventional tactics and spend six months preparing a business plan, researching the market, buttoning up your pro forma, and gathering your reserves. Meanwhile, the guy next door has a similar idea but forges forward with testing, releasing, improving, and updating his product.

By the time you’re ready to get down to the business of testing your idea in the actual market, your neighbor has been raking in profits for six months, figured out the “sweet spot,” released his seventh update, and firmly cornered his market share. Usually, the market moves faster than it would take you to line up all your ducks. The best way to qualify and quantify the market is by simply getting out in the field, firing off your ideas, and discovering what jumps out of the bushes.

Don’t misunderstand me: planning is an important event, even in the early stages. The question you must answer is, “What planning is essential for me to hit the ground running?” You only have two steps and then you’re off. John C. Maxwell wrote, “No one can wait until everything is perfect to act and expect to be successful. It’s better to be 80 percent sure and make things happen than it is to wait until you are 100 percent sure because by then, the opportunity will have already passed you by.”

In 2003, search engines were riding a tremendous wave. Several ideas jumped out of the field and I decided to shoot at the juiciest by creating a personalized search engine application. I very deliberately applied the Fire, Fire, Fire, Aim principle. My partner and I quickly dumped about $30,000 into our idea, which went belly-up in a few months. Most companies in that phase would have been out beating the bushes for venture capital, which would have taken writing a business plan and going back and forth with the VCs until we had enough to make it happen.

Don’t get me wrong—the idea could have raised funding, no doubt about it. And with that kind of capital, we could have gone to trade shows, hired engineers, and whipped it out into the market only to discover that our idea wasn’t going to work—after two years of wasted effort and millions of wasted dollars. Instead, we shot thirty grand at a dead rabbit and moved on.

More than saving our time and a VC’s money, though, our one shot earned it all back. Even though our initial good idea was off on the market timing, our shooting did scare up a pair of juicy rabbits that became very successful ventures. We left the initial rabbit behind and had great success—and a lot of fun—chasing the other two down. The point is that we did something. Our original plan didn’t take off, but we got ourselves into a better situation because we were out and active in the market.

Here is one of Ron’s favorite quotes, from Jack London: “You can’t wait for inspiration to come to you.  You have to go after it with a club.”

In the early ’90s, I had a young man working for me who was a very intelligent chap, absolutely fascinated by business. After surveying his options, the young man decided he wanted to purchase some real estate and begin building his own little real estate empire. He met with me several times and picked my brain on what had worked for me. For some reason, even after all our counseling sessions, he never did manage to get around to making the purchases. Every time I checked in with him, he was hot on the trail of a new property, plowing through the numbers and doing the analysis. Ten years later, I still get calls from him about every other year, wanting to talk about real estate—and he
still hasn’t bought anything!

Does this kind of person drive you crazy? Don’t be one! In order to achieve success, you eventually have to quit plowing and start planting. Get out there and do something that allows inspiration to envelope you! You can’t hit anything unless you pull the trigger, no matter how much time you take to aim.

Porter’s Points – Fire, Fire, Fire, Aim

• Call the competition and ask questions. You don’t need to tell them why you’re calling to find out what they’re selling and how they’re selling it. Talk to administrative assistants and secretaries. They are on the inside track and are often willing to share information.
• Call potential customers and attempt to sell them your model—you’ll find out quickly if you have what they want. Don’t start with your most important target accounts. Start with the least important one and use the feedback to work out the kinks.
• Ask advice from everyone you can. Chances are they’ll offer you an earful. Apply what you think will work and forget anything that has no value to your initiative.
• Run a quick—“quick” being the operative word— model to see if your idea is viable, and then do another quick cash flow analysis to determine if the business can sustain itself. (See chapter3, “Power Tools,” for more about models.)

So, your heart is right and your head is on straight. You’ve had the grit you need ever since chapter one and you really want to start your own venture. That’s fine, but how will you get going? If you are like many entrepreneurs, you have big dreams and big plans and don’t want to mess up. You want to make those big plans as clear and detailed as possible. Qualifying and quantifying the market, writing a detailed business plan, and drafting a pro forma are all very good things to do, but they have one thing in common: they take time.

For Rich, expending all that precious time for planning has a consistent rate of success: zero. Even so, he has done it, I have done it, and you may have, too. Rich has some good insights about why the rate of success is zippo. See, the thing about exhaustive planning is that it is comfortable. Taking months to answer every possible cash flow and marketing question lets you play with your gold nugget of an idea, turning it over in your hands and patting yourself on the back. This is comfortable. Planning is a lot of hard work, but it isn’t risky work. Spending days without end sweating over every minuscule detail of a business plan is easy compared to hitting the streets, getting your hands dirty, and doing the hard work of making your business happen. Once you have spent several months pushing pencils and drafting documents, you finally have the courage to begin. You have a safe plan in your entrepreneurial holster to load and fire into the market. You settle in, take aim, fire, and…

…Bang, you’re dead. You missed the wave, you overstated your potential, you let your competitors beat you to market—business failed. Most entrepreneurs want to have a plan with answers for every contingency, but you cannot afford to do the comfortable thing when your gold nugget can start making cash now. You need to get to work.

But don’t you need to plan? Rich is about to explain that planning skills help, sure, but he has had a lot of success using another, less conventional method. It is one of his most powerful tools in creating new businesses. He likes to call it “Fire, Fire, Fire, Aim.”

When he shared the concept with me the first time, I thought he’d spent too much time hiking at extremely high altitudes. Go to market before you have a business plan? Fire, Fire, Fire, Aim went against everything I had been taught! Much to my surprise, as I tested Fire, Fire, Fire, Aim with Rich, I discovered what he already knew: it works!

In this chapter, Rich will explain why you need to shoot first and aim later. He’ll share his Four Phase Model for business growth. Understanding the way your business grows—and how you need to react to that growth—helps clarify when to fire and when to wait. Fire, Fire, Fire, Aim may seem counterintuitive, but by the time you have read this chapter, your heart, head, and determination will be ready to start gunning for success.