Building Your Guardrails – Zig Zag Principle #55

December 22nd, 2011 by Rich Christiansen

 

Building Your GuardrailsThe guardrails you create must be closely aligned with the values you set in chapter 3.  You need to have people in your life who will tell you out when you are out of bounds.  I have a good friend who was a successful and well-known college basketball coach until he got embroiled in some politics and lost his job.  We were talking not long after that, and he shared what I consider to be a very profound insight.  He said, “Rich, when I was winning championships, everyone laughed at my jokes.  Now they only laugh when my jokes are actually funny.”  You need someone in your inner circle who knows you and who you trust to tell you if your jokes are funny or not. 

 Alex Mendozian is a teleseminar trainer.  We had discussed the possibility of working on a project together.  Before we began, he called me and said, “Rich, I have some good news and some bad news.  I’d really like to work with you.  That is the good news.  The bad news is before I do, I need to have an intervention in your life.”  I pushed back, thinking, “What is he talking about?  I don’t have a drinking or a drug problem!”  He continued, “Yes, you need an intervention!”  He then got my wife and his executive assistant on the phone and explained he was having this intervention because I had to quit saying “Yes” to everyone and everything.  Warren Buffet once said, “The difference between successful people and really successful people is that very successful people say ‘no’ to almost everything.”

Sometimes, in your zeal to reach your beacon in the fog, everything seems possible.  It’s a time when you’re generating a lot of ideas.  It’s a time when, out of necessity, you need to fire, fire, fire, and then aim.  I refer to this part of zig number 1 as the time I have to weave gold out of straw.  During this time I may not have a lot of resources, and I may find myself holding things together with duct tape and bailing wire. As I’m trying to get something to work that will generate cash, I find myself saying, “Yes, yes, yes, no; …yes, yes, yes, maybe.”

Once I get to the next zag, I have to create systematic and organized processes so I can hire employees and teach them how to make the business work.  During this time, I find myself saying “No” about half the time.  Part of that involves learning the discipline of delegating and letting others do the work for me. 

Getting to the third zig demonstrates that I have achieved success by reaching cash creating an organization that is working.  Now I need to scale it.  This is a much more controlled phase of the process because I do not want to destroy what I have just created.  I finally have all of the gears meshing, and I now need to figure out how to scale the business so it will generate income independent of my direct involvement.  During this period, I find myself needing to say “No” far more often. 

Another guardrail you need to put in place is identifying and empowering those people in your life who will help you say “No” and who will let you know when you are heading out of bounds.  For me, those people include my wife and my executive assistant, both of whom are excellent at letting me know when I am crossing the lines I’ve established.  My children will sometimes even tell me when I am out of line—and I’ve learned to listen.  My business partner is another person I make sure I listen to.  Unfortunately, it’s rare that your subordinates will point out when you’re heading toward danger.  Some see things quite clearly, but many are either making sure they look good in your eyes, or they are afraid of your reaction.  If one speaks up, listen, unless it feels like they’re stoking your ego. 

 

Who’s The Most Important Hire? – Zig Zag Principle #46

October 12th, 2011 by Rich Christiansen

Eating Our Own Cooking

In our test business, we hit profitability one month ahead of schedule.  We then documented processes, which helped ensure that when we began hiring people, they would actually know what to do.  Shane, our college student that was so helpful in the beginning, graduated from college and was able to join us full time.  The next person we hired was Koral, my executive admin. I believe this hire is always the most important.  We vetted and screened hundreds of people before we found Koral.  She has been a perfect fit with our values, and she has brilliant skills.  She is now the gatekeeper of our values and does a screening of every person who enters our organization.  She makes sure that they are a valued fit.

To help document the process that made our company profitable, I identified twelve parts of our operations that needed to be managed in order for us to be successful.  I then stapled a piece of paper with one of these items written on it to a $20 bill and posted these around the office.  I told everyone that the first person who wrote up the process for that step got to keep the $20 bill.  We now have twelve documented processes, each with their own set of simple steps written out so that each new person who joins the business has a clear picture of what needs to be done to make our company work.

After hiring Koral and a few other key positions, my partner Curtis needed to hire a very important individual for our sales team.  At this point, we had created our values filter, and we had the skills test assembled to give to our future hires.  Curtis was thoughtful and pragmatic as he ran a large number of candidates through this process, even though we had an urgent need to fill this position. After screening all the candidates, one in particular stood out.  He was very talented and had the skills we needed.  He had passed all of our tests.  I told Curtis to just hire the guy, but Curtis slowed down just a little because he saw some red flags.

Some of the red flags had to do with this individual’s work history.  He had not had real consistency in his employment.  We figured we could overlook this because we knew he had dealt with some health problems.  Another red flag was that in our interviews, this man seemed to have more motion than momentum.  Even so, I was convinced this guy was a good hire, but Curtis was still concerned. After I kept prodding him, Curtis decided to extend the offer.  As Curtis and the man were talking on the phone, Curtis could hear the man’s wife in the background.  She was shouting things like “If you agree to accept this, make sure they let you work from home two days a week!” We hadn’t discussed that in the interviews, but Curtis thought it might work.  Then Curtis heard her say, “Make sure the health insurance kicks in immediately!”  That was fine because we offer a good health insurance package.  Then he heard her say, “Find out how many vacation days they’re giving you, and then ask for a week more.”  In a bad economy with a lot of competition for this position, there was no gratitude or excitement about the offer.  There was no dialogue about how he was going to add value to our company. It was all about take, take, take.  After four or five of these demands, Curtis paused and simply said, “I’m sorry, we’re not moving forward.” He knew our company’s values, and he knew we would not be adding a resource that fit.  Even though we really needed this position filled, Curtis went back to the drawing board and started all over.  Fortunately, we soon found a delightful woman named Chiaki who fit our needs perfectly.  She is aligned with our company values and has been the right hire for this job.

 

Summary

After you have hit profitability in zig number 1, zag number 2 is all about adding resources.  You are making the transition from working harder to working smarter.  You are going from determination to discipline.  You are going from being the butcher, the baker, and the candlestick maker to cheerleading a team and turning over control to others.  Remember that this will involve letting them make some mistakes and do things a little differently than you would.  But if you do this effectively, you are increasing your profitability, adding resources in to the system, and documenting the processes.

This is where the culture of your company will be defined.  It’s one of the most fun phases of your business and where stories will come that will define the life of your business – good and bad!  Your values will be tested for the first time, so hold strong.

Kindle Keeps the Book Industry Moving with the Trends

October 2nd, 2011 by Rich Christiansen

 

One of the key elements in a business is recognizing trends and then knowing how to ride the wave to help your business succeed. Indeed, many businesses fail because they do not adapt quickly or intelligently enough to the changes in an industry. Zigzagging helps keep you take advantage of trends. It also helps you learn to recognize when to jump on a trend and let it take your business to new and exciting places. The book industry has learned to ride the technology wave and adapt like few others have.

Though books have been around for centuries, the advancement of consumer technology posed both a threat and opportunity to the industry. Instead of insisting that people would prefer to hold physical copies of books, Amazon in particular (one of the largest book retailers in the world) jumped on the wave with the Kindle in 2007. And now Amazon sells more ebooks via the Kindle than it does paperbacks on its original website!

What would have happened if Amazon kept driving to its goal of selling books as defined by a limited view of what makes a book? It would still be fighting an ongoing trend that has impacted the world, especially with the advent of the iPad. Instead, Amazon is not only able to keep selling Kindles, but it sells ebooks through Kindle apps on iPads, iPhones, Androids and other competitors.

This continual drive to ebook profitability has enabled Amazon to try something new with the Kindle Fire. Though I prefer my iPad, the Kindle Fire tries something new for tablets by being both comparatively very inexpensive and focused.

Only time will tell how successful this new zigzag will be for Amazon, but think of how you can use the trends in your industry to boost your own business. Then, before that trend dies away, make sure you find another trend to harness, like the Kindle jumping onto the tablet trend. By making strategic, intelligent zigs and zags, you can dance among the trends to keep your business thriving. 

 

 

 

 

No, I Will Not Take Out The Trash – Zig Zag Principle #40

September 23rd, 2011 by Rich Christiansen

Adding resources is harder than it sounds, but it’s the only way you’ll build your dream.  I have a neighbor who owns a shoe repair shop.  This man makes a decent living and takes care of his family’s basic needs.  However, to keep his head above water, he has to work day after day, week after week, repairing those shoes single-handedly.  If he needs a day off, he has to close the shop.  Same if he’s under the weather or has to take care of a sick wife or child.  Of course, that leads to a loss of income.  Now, his business model allows for some days off, but it’s a pretty thin margin.  If something major happened, the effects could be catastrophic.

My friend has made it through zig number 1 profitability—but he has not thought to turn his skis in the other direction for zag number 2.  In other words, he has not added the resources that would allow him to live a fuller, richer, and safer life.

A key reason many people have a hard time adding resources is they have become accustomed to micromanaging every aspect of their business. As hard as it can be to let go of control, as you hire the right people to fill in the gaps of knowledge or skill that you don’t have, and then as you help them learn your processes, your company will begin to reach its full potential.  Think of yourself as being akin to Emperor Shah Jahan, who may not have known how to carve flowers out of stone but was able to hire someone to do that job—and thus help him create his masterpiece.

I’m familiar with a family-owned business, run by a father and his sons, where the father has micromanaged every aspect of the business.  The father is now getting old and is about to retire.  He has talented sons who want to modernize the business, but his response is always, “We have been doing business this way for over forty years.  This is how it has to be done.” When the sons bring up the need to modernize equipment or processes, the father adamantly refuses. 

It’s no wonder the sons and their families are frustrated.  They feel stuck in a business that is archaic, and they would like a little leeway in bringing the business into the computer age and making it more productive. 

This example is common among family-run businesses, but the same plight is found among businesses founded by a strong-minded personality, who is then unwilling to bring in additional resources and let them do what they were hired to do. As you begin to take zag number 2 in order to grow your business, remembering that it is all about disciple will help you loosen your grip on the controls.  The imagine I keep in mind to help me do this (because, I’ll admit it, I can be a bit controlling) is what I call the “Yes, Yes, Yes, NO! Principle.”  While you are working on zig number 1 and trying to get to cash, you will, of necessity, say “Yes” to many things, such as:

  • Yes, I will do the accounting.
  • Yes, I will sell a small order that has potential for larger orders.
  • Yes, I will answer the phones.
  • Yes, I will take out the trash.
  • No, I will not compromise my values.

 

Now, as you add resources, it’s time to add a few more “Nos.”  Some of these might be:

  • No, I will not take out the trash. I will hire a cleaning person.
  • No, I will not do my own accounting. I will outsource my taxes to an accountant.
  • No, I will not answer the phones and do the bookkeeping. I will hire an administrative assistant.

Zag Number 2 – Zig Zag Principle #39

September 23rd, 2011 by Rich Christiansen

Adding Processes and Resources

I love the Taj Mahal.  I’ve had the good fortune to visit this remarkable shrine several times, and neither words nor pictures can describe it. What adds to its magnificence is that I’ve always come straight from the chaos of India, where there is mayhem everywhere, and to walk into this peaceful grove is like walking into another world.

The Taj Mahal was built with a labor force of over twenty thousand workers who were recruited from all across Northern India and other parts of the region.  In addition to common laborers, the workforce included sculptors from Bukhara, calligraphers from Syria and Persia, inlayers from Southern India, and stonecutters from Baluchistan.  A team of thirty-seven men formed the creative unit.  Of these, one was a specialist in carving marble flowers and another was the best at building turrets.  It took twenty years to complete the Taj Mahal.  It was built by Mughal Emperor Shah Jahan in memory of his beloved third wife Mumtz Mahal.  It is considered one of the most beautiful buildings in the world and is a symbol of eternal love.

Imagine for a moment the possibility of this emperor trying to build the Taj Mahal all by himself.  He clearly had a vision of what it was to be. He was a very wealthy man, so he had the necessary cash.  And likely he knew where to find the materials from which this edifice was constructed. Despite all that he had at his disposal, building the Taj Mahal would have been an impossible feat, even if Shah Jahan had had several lifetimes in which to complete the work.

Instead, he put together his beacon in the fog, fueled it with his passion, and then added resources—lots and lots of resources.  And as he added those resources, he had to get everyone to catch the same vision for them to complete something that beautiful.

Adding Resources

In the first zig, you made your business or your life profitable.  Zag number 2 is about adding resources.  Once you have enough cash from the first zig, you can use it to add those people, equipment, and other resources that you need.  You need to do so in order to help perform the labor-intensive work that keeps the cash flowing.  Then you are able to spend more of your time defining the processes and adding meat to the bones of your organization.  This is the time to formalize, structure, and expand those things that led you to your initial success in zig number 1.

Getting to cash feels great! Your determination has begun to bear fruit. You’re in the black. Life is good. You’re actually making money. The only problem is you’re completely worn out.  And your gas tank is now on fumes, if not completely empty.  You know you need to make a change, but you’re also sensing how hard it is going to be to let go of some of your control and bring others on board.  Doing so requires that you shift gears dramatically, and if you don’t you’ll never get to your destination.