A Businessman’s Book of Black Gold

BlackBookv1About 20 years ago I met a unique businessman. He was very tall and built like a linebacker. To compensate for his size, he spoke in a soft voice and always carried a smile. I had never seen such a sight, so I crossed the waiting area at our gate to introduce myself before our flight boarded. I’ll refer to him in this post as Mike.

I was working for a Fortune 50 company at the time and always on the lookout to learn from the best. It didn’t take a lot of observation skills to ascertain that Mike was a successful executive, wearing the latest Armani suit with highly polished wingtip shoes. His uniqueness was evident in how he responded to my approach.

He immediately sat up and leaned forward to give me his undivided attention. His word choice suggested that he could hold his own in the country or on a farm, while his dialect and presentation was clearly Park Ave. He was approachable, knowledgeable, and filled with wisdom—knowing exactly how to alter his conversation on the fly to match the other person’s.

His face reflected a fascination with my questions, which allowed me to continue asking questions that most businessmen would find exhausting. At one point he stopped our conversation and cut to the chase, asking me outright if I wanted to know the core reason for his business success. I said, “Yes.”

After pulling a small, black notebook from his pocket, he said that all of his business secrets were in the book. He then asked if I’d like to read through it while we waited. I took the book and sat down to read his handwritten notes. I was amazed at the business techniques that were captured on each page. I had found “black gold,” Texas tea, business oil, that is. The stuff that could catapult a man toward success.

He saw my hunger for the information as I absorbed page after page. He quietly borrowed my ticket and went up to the gate, while I continued to memorize the information. He returned after exchanging my economy ticket for the first class seat next to his so I could continue reading.

At 35,000 feet, I turned to Mike and asked him for clarification. One of the business statements didn’t read in a way that was easily understood from a business context. Proverbs 8:20 read: “A king who sits on the throne of justice, sifts all evil with his eyes.” He told me that understanding the translation sometimes required a deeper dive into the word choices selected by the translator who converted the info to English.

Mike said that a “king” represented him as a business owner reigning over his small business empire. He was to do it “justly,” always making sure he was fair to himself, his employees, and his clients. His greatest task during the transaction was to “sift” through all “evil,” or one-sided choices, by carefully observing his team and the clients, making sure to purge or get rid of anyone who was not conducting business on the up and up.

Mike then told me about a man who was trying to leverage an additional 3% margin out of the customer to make himself look good. He immediately remembered the proverb and fired the man. Five years later he heard how the man finagled business at his next job to the point where his boss got fired and he took over the position—not the kind of man anyone would want on their team. Two years later the business was scrutinized by the FBI, ending with the man being jailed 11 months later for embezzling.

I admired how Mike’s experience proved the black book’s notes to be effective and accurate. I wanted more, and Mike saw it in my eyes. As we disembarked, Mike handed the book back to me as a parting gift with the hope that I’d always mold my business according to its biblical principles. I thanked him for the first class seat and the chance to learn from one of the best. He suggested the best way to return the favor was to share my story about the black book with others. And so I have, again.

Copyright © 2018 by CJ Powers
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Work Hard, Someone is Watching

Work Hard,Someone isWatching

I climbed the stadium seats at the dolphin aquarium in Baltimore and spotted one of my favorite actors sitting with her three kids and mother. I smiled and walked past, not wanting to interfere with her mom time. Unfortunately, the guy sitting behind her finally figured out where he had seen her and chatted it up. She politely responded and then collected her family and left before the show started.

Her kids were not upset because they left the dolphin show; they were upset because a man tried to pull their mother away from their precious time together. Thankfully she made the right choice and put family before fans. After all, fans come and go, but family is still present in the aftermath of one’s career.

Colin Powell came to mind after the actor left, fully functioning in her mom role. Powell is a man who quickly gains respect from most everyone he meets, not because he’s so awesome, which many would say he is, but because he lives by his own words with integrity.

Had he been present during the decision to work hard in her role as a mom in that moment, he would’ve agreed with her decision. Powell’s great work ethic was not altered by the fans that surrounded him, but by his own focus on life. He owned the moral decisions he made daily and shared his simple viewpoint when he said…

“Always do your very best. Even when no one else is looking, you always are.”
Colin Powell

If You Take the Pay, Earn It

When I was in high school, I spent the early hours on weekends delivering newspapers to fund my art. The team would start at 4:00 a.m. stuffing inserts into the paper, and then stuffing the sections together into a lightweight plastic bag for ease of delivery. I did the prep work quickly because the goal was the delivery process, not the stuffing, as we were paid per paper delivered.

The college drivers got to pick the teen they wanted to ride with. The guys were jealous because the best-looking woman always picked me first—I’ll call her Beth. Some thought it was my charm or the good looks I sported back in the day, but I knew it was about the money.

You see, the teens moaned about stuffing the papers and dawdled in the process. Since the drivers got half the pay, they wanted the teen that worked hard and fast. Beth was smarter than the rest. Her motto was that if you’re going to take the pay, you needed to earn it. So, instead of hassling me like the other drivers did to get their teen helpers in gear, Beth encouraged me to find faster streamlined ways of stuffing the papers. I always ended up with three times more papers for delivery than my peers.

Beth also stepped away from the other jeering drivers and quietly stuffed additional papers herself. Due to her speed and the slowness of most teens, she typically stuffed an equal amount. Our truck was always packed with four times more papers than any other truck, which gave us four times more pay.

Always do Your Best

Not only was the stuffing process important in providing our potential pay, but also how we delivered the papers was important in determining which drivers got extra pick up routes at a bonus pay rate. To gain more opportunities, Beth memorized the entire map and knew where every street address was located in relationship to our current location.

If we were within a half-mile, she’d send me out of the truck with enough papers to walk 5-10 houses, while she drove off to cover the customer service issue. Beth’s timing always amazed me. Every time I’d get to the last house, I’d see her pulling up along side of me.

We had polished our process to the point of excellence. Beth had even determined my jogging speed and matched it, so I could jump in and out of the truck while it continued moving down the street. I’d basically jog a “V” pattern. On our approach to a given house, I’d grab the paper and jump off the truck jogging on an angle to their front door and return on an angle to be picked up a little past the house.

This allowed me to place the paper on every front stoop, giving the customer a great experience. Most of my peers tossed the papers from the truck, which scattered many sections across several lawns.

Don’t Disappoint Yourself

The process that Beth and I worked out allowed us to achieve our financial goals. She loved the opportunity of making extra cash and was disappointed when someone else got to pick a rider first, as it meant that our team would be broken up and our pay would drop to a fourth of our goal.

Regardless of how much our peers struggled to understand our drive, we never eased up. We were in it to achieve our goals and we didn’t want to ever let ourselves down. We were successful because we worked hard.

Beth always said that if she were too often stuck with an uncaring teen, she’d quit and find a new job. She was in it to accomplish her goals and made sure that she did her part in adding to the team’s success.

As for me, I never wanted to fall short of my goals or disappoint my partner. I had no problem hustling in order to achieve what we deemed as success. But boy, the disappointment that came from working with a lazy driver felt almost as bad as getting handed a measly check on an earlier lackadaisical day of work before meeting Beth.

Copyright 2017 by CJ Powers

 

Networking for the Future

pexels-photo-70292

Networking is a term that many fear and avoid yet it’s essential for business growth. The negative connotations rise from the riff raff who prey on people during professional networking sessions. They are in it for themselves and have no comprehension of how powerful maintaining a network of courageous professional relationships are to their future.

Others become disenchanted by the process due to those who immediately escape a conversation the moment they determine you aren’t a potential customer. They are short sighted, not realizing you may know a dozen perfect customers in your circle of influence that will add to their business growth.

After participating in numerous networking events, I’ve learned that there are three things all business people can use from the experience to grow their business.

Great Courage

It takes a lot of gumption to enter a room of strangers. The initial atmosphere causes many to connect with those they already know rather than exploring the unknown. No matter how skilled the person is they find themselves digging deeper into their soul for the strength to put themselves into the vulnerable realm of possibilities.

Courage is not about being comfortable, but about the choice of facing fear head on. We tend to forget that the courageous around us feel just as vulnerable as we do, but they’ve taken the further step of pressing through the fear courageously. It is merely a choice to take action, while feeling exposed.

This ability to choose courage over fear is a tool that will always force a business to land upright regardless of any temporary setback it might endure. It’s also the formula used by most businesses to grow. We know that businesses are either shrinking based on ignorance and fear, or they are growing because someone was courageous enough to take a risk.

Listening Skills

No one cares if you have a solution for their business unless they first learn that you care about them. Taking time to meet someone in a networking environment requires huge listening skills, especially in the din of most rooms designed for socialization.

Selective listening isn’t considered listening at networking events. The person only listening for a potential buying signal is shortchanging their future. Listening is a tool to learn about the person first and their needs second. Anyone who doesn’t take time to first learn about the person will never care about his or her customer.

The old saying about having two ears and one mouth gives us the perspective of talking a little and listening twice as hard, which actually helps at networking events. It’s also an asset for the person that wants to grow their business. A customer that feels like the vendor understands their need will always be a happy customer.

Clarifying Pitches

Noisy rooms force a person making a pitch at an event to be concise and understood at the audience’s level. Using jargon and rambling on about what you do is a sign that you may not know your core business or what value your current customers see in you.

By sharing your core competencies you avoid using stereotypical phrases, which stops the person listening from lumping you into a group of all others that do the same thing. Your razor sharp focus helps the person understand what differentiates you from the others who carry a similar title.

Setting yourself apart from the stampede of cookie cutter functions is critical to be noticed over the marketing noise that permeates the Internet, business market and event space. A quality pitch is one that is all about the uniqueness that makes you who you are, which can’t be replicated by any competitor.

Having the guts to meet new people, taking time to really hear about who they are and what they are trying to accomplish, and fine tuning your presentation so its easy to distinguish you from others, helps develop long term relationships that will eventually pay off.

Networking is about surrounding yourself with quality people and developing those relationships so you can help them when needed and they can reciprocate when you’re in need. These lifelong skills always drive business growth and force us to continually better ourselves for the next great adventure we face.

© 2017 by CJ Powers

4 Steps to Setting the Value of Your Services (Part 3 of 3)

Continued from part 2.

BusNotesPt3Pricing Sample:

An editor I coached needed to make $50,000 a year. She also needed two weeks of vacation, holidays off, and some personal/sick days to take care of her kids. She was also able to work 6 hours a day, although not in a row, and wanted to make sure that her work time was filled at least 80% of the time. Here is the formula we used to determine hours she’s available to work each year:

((6 hours per day * 5 days per week) * 48 weeks per year) * 80% of time busy = 1,152 hours of work

• The 49 weeks allows for two weeks of vacation, one week of personal/sick time, and five holidays.

Next we had to figure out the hourly rate:

$50,000/1,152 hours = $43/hour (Not taking into account overhead, education, etc.)

Since no one wanted to hire her by the hour, she needed to convert the hourly rate into a per page or per word rate. She determined that there are about 150 words per page and it takes her 5, 10, or 20 minutes per page depending on the type of editing she does. So we developed the following two formulas:

$43/(60 minutes/time per page) = per page rate

per page rate/150 words = per word price

She created two versions of the above prices based on the three types of editing she does, which looked like this:

Editing Type A = $3.58/page
Editing Type B = $7.20/page
Editing Type C = $15.00/page
Editing Type A = $0.03/word
Editing Type B = $0.05/word
Editing Type C = $0.10/word

Now when she gets a call from a potential customer, she asks how many words are in the manuscript. If they tell her 77,000 words, she says, “For type A editing, your price will be $2,310.”

Gone are the days of calculating out how many days are left in the month and her workload. She no longer has to review the physical documents for typeset size based on the font used in the manuscript. She just uses a simple multiplier to calculate the answer. All the other background work is done by the previous formulas to free up her quoting process. And, if she’s a bit faster on a job or two, she’ll find a nice bonus at the end of the year.

End of part 3 of 3.

© 2017 by CJ Powers

4 Steps to Setting the Value of Your Services (Part 2 of 3)

Continued from part 1. 

3. Value Results-Oriented PricingBusNotesPt2

I met with a CEO of a small business that requires lots of traveling to disseminate its products. The team is well liked by all clients, but the traveling process makes the business inefficient. This drops the overall value of the product and delivery services. It also means, unbeknownst to the CEO, that clients are looking for alternative solutions.

My package offer to fix the looming problem was designed to increase revenue 300% by implementing online ordering. The new process guaranteed that the parts and services happened “just in time” rather than by chance. It also allowed for territory expansion without adding more personnel or trucks.

The package was priced at $120 per hour for my time to set up the online services, train the employees, and structure the new distribution practices using a third-party shipping company. Plus, they wouldn’t owe anything if I didn’t double the company’s revenue in 12 months. In other words, if I only hit 99.9% of the financial goal, they’d get everything I did for free.

The CEO turned me down because he never paid anyone more than $29 per hour. Since our last meeting, the business has seen a 12% reduction in revenue because clients have found alternative sources for the product. While this situation was an odd bird, there are plenty of companies that would love to work with a vendor that guarantees his work. The real value of any workload is in the end results.

4. Establish a Formula for Service Pricing

When I worked for the network division at Lucent Technologies, our competition was running circles around us. After loosing two dozen bids in a row, upper management demanded something be done about it. I researched the situation and learned that it took our team 7 days to publish a quote, and our competitors did it in 3-4 days.

After discussing the issue with the team, we came up with an online quoting system that returned accurate quotes within 4 hours. No one ever questioned why we were inundated with orders. Upper management just smiled all day long.

An entrepreneur that I met with last week had a similar problem. She didn’t have enough time each day to put quotes together and lost most jobs before she could finish her quotes. By turning to a modular formula system, she can now turn some quotes around while she’s still on the phone.

End of part 2 of 3. Part 3 will provide a pricing sample.

© 2017 by CJ Powers

4 Steps to Setting the Value of Your Services (Part 1 of 3)

BusNotesPt1

My Denver omelet was tastier than normal and I wondered what happened in the kitchen that made it more flavorful. Its value went up and the menu’s price tag no longer mattered. I took another mouth-watering bite and looked across the table at the CEO of a small marketing firm that I was coaching.

I suddenly saw a connection, as she struggled to accept the value of her newest service offerings. The streamlined approach simplified her workload, which compelled her to reduce prices that were already under valued. She was basing the asking price on her ability to streamline her work efforts rather than on the service’s value to the customer.

Many small firm executives struggle with the perception that unless it involves a melee of sorts, the service or product must be priced lower to justify its value. Truth be told, in today’s market the client’s outcome determines the services value.

Executives can learn to position their services based on the value of the recipient’s outcome by following the below 4 Steps.

1. Value Your Clients Success

Last year I coached a small business owner whose declining revenue numbers suggested his doors would close within 6-12 months. I was asked to increase the store’s sales in whatever manner might work. While my strategy was foreign to the team, I was fully supported and given an expense account to implement my action plans.

Within 6-8 months the measureable results had increased the revenue percentage by double digits and brought in about 130 new customers. Each customer spent an average of $1,000 per visit—a 100% increase over the national average order size benchmark. The elated owner said, “You’re worth ten times what I’m paying you!” I suddenly realized that my value was in the end result, not in how much I struggle or sweat.

By placing a focused value on the outcome, clients are willing to pay for those results. Most will not care how much it costs, if it’s a small percentage of the revenue it generates. Everyone likes a project to pay for itself and then some. The happy client is always the one who gets the results they asked for, not the one who saved money and is forced to close down.

2. Value Your Ingenuity of Development

One business I coached never front loaded any lessons learned or ramp up time when starting a new project. The owner felt that his customers shouldn’t have to pay for his education, especially if it is required on their project.

I asked him what his greatest value was that drew his customers. He pointed out that they come to him because of his expertise. It didn’t take long for him to realize that his learning curve on the current project would soon be a part of his expertise and of great value to his customer.

I suggested his ingenuity, education and development time, which are his greatest assets, should be included within his pricing. After fidgeting a bit, he agreed to charge 50% of the learning costs since the customer would gain from his new knowledge.

Companies are willing to hire someone who can figure things out quickly to get them up to speed in new market areas. Whenever someone comes along with similar, but not exact experience, they are snapped up for the sake of speed to market. The cost is never the issue; the only concern is productivity and timeliness of release. So all ingenuity during the development stage is of great value whether learned on the job or outside of it.

End of part 1 of 3. Part 2 covers steps 3 & 4 with part 3 providing sample pricing.

© 2017 by CJ Powers

Creative Child’s Game Simplifies Value Decisions

How to Assign Value to Disparate Projects for Equal Consideration

Have you ever wanted to know which project to start next? Did you get frustrated comparing unrelated activities in an attempt to determine which provided the greatest value? The solution is as simple as a child’s game.

No, I’m not talking about a Six Sigma Pugh Concept Matrix to determine which potential alternative solution can more quickly and easily be engineered into a viable product for just-in-time manufacturing.

I’m talking about a simple game that boutique tech businesses use to prioritize projects by overall value.

It’s called a weighted decision matrix and its fun to use.

Picture a simple table with the name of the projects listed down the far left column. Across the top of each column is the criteria that you’ll use to measure a projects overall value. Where each project and column intersects are the letters H, M, and L. The far right column holds the total of the criteria scores for each project.

Slide1

STEP ONE:

Name each project in the first column. Name the criteria being considered at the top of each column.

The H M and L represent the importance level of the criteria for the project—giving it a high, medium or low level of importance for each particular criterion. Circle the level of importance that each project holds based on the given criteria.

Slide2

 

STEP TWO:

Give a value to each H, M and L. With less complex decisions I use the following values: H=4, M=2, and L=1. If the decision is more complex I use: H=9, M=3, and L=1. Then total the score by adding the values from each cell. The decision is obvious—I need to write a blog on Decision Matrix (see below table).

Slide3

 

But many times life is not so simple because some criteria are more important than others, which requires some form of weighting.

STEP THREE:

When criteria are not equal, a numeric value must be attached that will work as a multiplier. I use a 5-point scale to make sure each criteria receives its due credit or strength in the formula. However, when sorting through a large number of projects, I switch to a 10-point scale in order to pick up on the value of subtle nuances for each criterion.

In the below table I’ve given each criteria a numerical value. In the first cell the M was circled and is valued as a 2. I then multiply it with the weighted criterion value of 4 and get a new total cell value of 8. Each cell is added together for a total score of 40.

Slide4

The weighting has clarified what’s more important and shifted the score to a tie. In this case I would’ve been better off using the larger spread of values: H=9, M=3, and L=1 as in the below table. However, the scoring is so close that the decision of what blog to write had an original score of 10, shifted to a tie, followed by coming in second place (see below table).

Slide5

Here’s where the game gets tricky. You have to be totally honest with yourself whenever assigning values to what’s important. Deciding between H, M, L is pretty easy, but the choice is more difficult with a 5-point criteria value—even more tricky with a 10-point value.

In the table below I changed the weighted amount for the third criterion from 3 to 4. Why? Well, since most of my readers run families, small businesses and departments, I thought the category should hold a higher level of importance.

Slide6

Now look at what happened to the scores. The numbers made the decision very clear, but only because I was being truthful about the third column’s actual value of importance.

WARNING: As in all games that use numbers, a person can cheat to make things read anyway they want, which defeats the purpose of playing.

STEP 1A:

It’s important to use only the criteria that are truly important to a project. Extra criteria that’s not seriously weighted only complicates your decision making process.

If you’re an artist, consider some of these criteria:

• Passion Zone
• Stretch Comfort Levels
• Gain Knowledge
• Generate Money
• Advance Career
• Network Expansion
• Develop Skills
• Touch Lives
• Build Relationships
• Fun & Games

The above factors can all impact a decision for an artist deciding whether or not he or she is interested in signing on to a film project. Sometimes it’s worth doing if it expands your network or you can learn something significant from the experience. Other times making money is the number one weighted factor.

In business, other criteria might be considered like:

• Meets Objectives
• Forwards Career
• Meets Boss’ Bonus Requirements
• Generates Commission
• Creates Double Digit Growth

The above list can go on and on, but the idea is sound. Figuring out what criteria is important for the projects being considered helps change the decision from an aggravating dilemma to a child’s game that’s easy to solve with a quick hand written table or spreadsheet.

Members of different departments that make up a special team can also play this game. Each can add a few criteria to the table to make sure their area of expertise is well considered by the decision maker.

The biggest decision I faced was sorting through 11 projects with 32 criteria. Thankfully it was on an automated spreadsheet and the answers were quick and sound.

Let me know what other games or tools you use to decide which project should be next.

© 2017 by CJ Powers