Have you had the opportunity to meet published authors, whose books are well-known or even best-sellers? Often you are compelled to acknowledge, regardless of the material or subject matter, that you are dealing with a critical thinker who has chosen to broadcast intellectual property to the public through an unforgiving medium. In short, you are dealing with a power plant—all you need do is plug in. If you’re reading this article, then your daily imperatives most likely revolve around ways to improve your organization’s product, service or collaboration. That in turn means you are practiced at seeking out informative resources, with authors being chief among those resources. This past year I have had the good fortune to meet several fantastic authors, as well as great collaborators in my work.
When you spend time researching the next big idea, you inevitably start populating your daydreams with “what if …” scenarios. I wonder, “What if I could pick Michael Gerber’s brain over lunch? What could I learn from Guy Kawasaki while he doubles as a workout partner for me? Where could I take my business? Or who could help capture my vision after a walk in the park with Seth Godin?”
Recently, I worked an event with two of my most favorite authors, Mike Michalowicz and Barry Moltz, and I have to say I felt like I was hanging with the cool kids—the rock stars in the entrepreneurial firmament. And I wondered, how did I get so lucky?
Mike Michalowicz is the CEO of Provendus Group, a consulting firm that specializes in igniting growth in companies that have plateaued. He is a small-business columnist for The Wall Street Journal, a frequent television guest and keynote speaker regarding the do’s and don’ts of entrepreneurship, and the author of the cult classic book The Toilet Paper Entrepreneur. His most recent effort, The Pumpkin Plan, demonstrates a laughably straightforward business analogy and uses it to create an unstoppable action plan for your business—your business should be like a pumpkin farmer whose sole focus is growing a massive hernia special for the county fair, rather than season after season of pleasing jack-o-lantern enthusiasts.
So, who is Michalowicz? He has launched three multimillion-dollar companies, all before his 35th birthday. He was awarded the Small Business Administration’s Young Entrepreneur of the Year when he was 26. He sold his first company to private investors; his second to a Fortune 500 company; and currently manages his third company, Obsidian Launch, which provides behavioral marketing services.
In his new book, Small Town Rules, Barry Moltz and co-author Becky McCray show how the business world is like a global small town, and how even the largest companies must compete for customers as if they were small, local businesses. By revealing the seven “rural-style” solutions that have proven invaluable to organizations of all colors and creeds, Barry illustrates how even the largest companies, most dominant brands and most cosmopolitan businesses have been forced to adjust to recent economic realities. The philosophy of thinking “small” is like the new “black.”
So, who is Moltz? He worked for one of the largest companies in the world and has started three businesses. He has hired hundreds of people and unfortunately, had to fire some of them. He has been fired more than once. And he sold his last business, but also went out of business and was kicked out of his business, but luckily, not in that order.
ICOSA: We believe that collaboration could save the world. Describe how collaboration and entrepreneurship could be the answer businesses are looking for when it comes to continuous success over time?
MICHALOWICZ: The pendulum of how entrepreneurship works has started to swing in the other direction. The turning point, I believe, was the "greed is good" mentality of the late ‘80s. It started the implosion that stars go through ... gobbling up everything in sight, and in some degree has caused our current economy. But there is a clear shift toward collaboration now. The concept in entrepreneurship is that two companies can join forces and exploit their unique talents.
For collaboration to work, a few things must come in to play. First, it works best with small businesses. Small businesses have the luxury at being masters at one thing; alternatively, however, big juggernaut companies need to feed the beast, and try to gobble up everything.
Second, it requires that there are strong communications. The rule is to "keep talking." Just like any work where multiple people—or in this case companies—are involved, misunderstandings often happen and then can spiral into conflict. Frequent communications between collaborators is the lubricant to successful collaboration.
Third is to start small. Just like any other skill that entrepreneurs need to build, collaborating is a critical skill. If you dive in without experience, you may run into roadblocks that turn you off to it permanently. That would be a mistake. Start with smaller collaborative projects and build up.
The result of successful collaboration is long-term success. It allows you to run with thinner overhead and focus on just what you do best. You get more work since you are collaborating with partners who are turning you on to new work and vice versa.
MOLTZ: The famous quote that “no man is an island” is really true in small business. If you are alone or have no collaborators, then you don't have a company—you just have a job. With people working remotely based on their varied skills all over the world, learning how to collaborate is a basic requirement for success these days in business. Years ago, people worked for one company until they retired. Then, they worked for three to five years before changing jobs. Now, most people will actually have multiple lines of income. Co-workers are actually teams that are made up of a loose confederation of collaborators that come together for a short time for a single project. Over time, these teams reform, and the collaboration begins all over again.
Probably one of the most important skills that needs to be learned is how to effectively collaborate with many different types of people, and effective communication skills will be one of the most valued assets going forward.
ICOSA: From your perspective, what are some successful examples of continuity in the entrepreneurial and small-business world?
MOLTZ: I love the word “continuity” instead of “longevity.” These days, years in business is not really a milestone. Rather, companies have to be able to continually reinvent themselves to be relevant to the customer—Apple went from being a computer company to a media and consumer products company.
One of the qualities we now value the most is sustainability. Many people can build a company in the short term and make a financial profit. However, it takes real skill to build and rebuild a company. Companies such as Nintendo originally sold playing cards, and Nokia originally sold rubber tires and boots—but they are two companies that have had to evolve.
MICHALOWICZ: I want to lead with a big-business example since it is something we can all identify with. I love what IBM did to maintain continuity. Instead, they reinvented themselves from computer makers to technology consultants. They noticed that something that was once big for them had started to decline—it was their imploding star. Instead of trying to fix the inevitable, they used the life left in it to springboard a whole new version of themselves. That is what I call continuity.
The buzz word now is "pivot." It used to be "transition." And the concept is simple. Everything has a life cycle, including businesses and the products and services we deliver. When something is growing, you feed it; when something is clearly dying, that is when you start something new.
I see small business do this all the time. They have the luxury of, literally overnight, shifting what they do. For example, a local book store in Philadelphia recognized they couldn't compete with Amazon, so they built direct relations with publishing houses to ship large orders. At the beginning the store was doing $500K annually in book sales; today it does $1.5 million in sales, all by transitioning their approach.
There is one major risk, though, with small businesses that shift; many shift too often. They pursue the flavor of the month and never make it. The key to continuity in business is transitioning the growing parts of your business, without losing your core purpose—the "why" your business does what it does. If you can retain your purpose and simply change the vehicle for delivering on the purpose, you can have long ongoing success.
ICOSA: What kind of impact has the recession had on the continuity of entrepreneurship and small business?
MICHALOWICZ: It opens people’s eyes to what is not working. When the economy recedes, and I hate to say this, but likely gets even worse, the problems in our businesses become very apparent. Free-flowing money covers up our problems, but when things slow down, our problems become very apparent. It truly is like a wildfire tearing through the forest of business. All the dead wood gets burned up, some or even many healthy trees die, but some survive. Most importantly, the trees that drop seeds deep in the soil prior to the wildfire have the offspring surge to life after the fire tears through.
I think small businesses need to do two things in this economy; become healthy fast and “plant some seeds.” Small businesses need to cut out the dead wood and do only what they do best, then collaborate with others to do the rest. Secondly, by testing small opportunities with minimal costs, businesses can plant seeds and see what takes root. I wouldn't push these aggressively yet, but just want to have it ready for the better times. I would push aggressively on what I do best.
MOLTZ: It forces businesses to continually adapt and re-invent themselves to stay relevant and profitable as the economics of consumer demand change. Recessions are a valuable part of the business cycle. It forces every company to re-examine customer solutions and how they can do it profitably. For example, one of my customers had been in business for 100 years with a 32 percent gross margin. When the recession hit and sales dropped, they were forced to examine their gross margin for the first time to keep net profitability steady. It was only through this exercise did they increase their margin to 35 percent. When sales finally did go up, they were a more profitable company than ever before!
ICOSA: What are some of the core strategies you employ for continuous success?
MOLTZ: There are five things I do. One, I plan for zero. I question assumptions. Every business has seasons and cycles. Invest your success in the long term. Be like the farmer who only expects one great crop every five years.
Two, spend creative brainpower before your money. Too much money makes you stupid. Don't throw money at a problem. Solve it with as few resources as possible, before trying to buy your way out of it.
Third, multiply your lines of income, but build one opportunity at a time. Do not be dependent on only one line of income or one customer. Spread your risk.
Four, treat customers like community. Now that every customer can talk to every other customer, it's like living in a small town where your reputation means everything.
And five, build local connections to your community. Local is the new black! People would much rather buy locally than at the end of a 10,000 mile supply chain. Take advantage of that!
MICHALOWICZ: The biggest thing I have done, and we all should do, is pick the "giant seed." This is actually a method that farmers use to grow gigantic pumpkins. They don't use ordinary seeds; they use seeds with colossal genes. In entrepreneurship, the colossal seed is where our passion overlaps with customer demand and with scalability. If we have a passion for what we do, complemented by customers who want it and have a system so that it can grow without our direct involvement, we have a business with huge, long-term success potential.
ICOSA: What are the key elements for small businesses to successfully use the collaboration growth model? \
MICHALOWICZ: Entrepreneurs need to go into business with the "I will be the master of one thing" mentality. If an entrepreneur goes into business trying to be everything to everybody, not only will they struggle mastering any one thing, they will repel collaborative opportunities because they will automatically see all these other vendors as competition.
MOLTZ: The key is understanding your strengths and weaknesses and then finding others to collaborate with that complement you. No one can scale a business alone. Find other people that share your common vision. Collaboration is the key ingredient in building a business that can leverage your skills and bring long-term profitability.
The keys to successful collaboration are to go in focused on being the world's best at one thing. Then, you must seek other complementary vendors who are the world’s best at their thing. Then, working together, you start with small collaborative experiences with these other vendors. Like any other long-term relationship, you want to build a level of trust and comfort before you go "all in."
You must lead the relationship by being a "go-giver”—someone who makes the collaborative effort not just about servicing the end client extremely well, but also servicing your collaborative partner extremely well. This sets the foundation for a relationship that will flourish.
If you are interested in continued success over time, I highly recommend you RUN—don’t walk—and get both of these books. They have words of wisdom for business and life!
Learn more about Mike Michalowicz (pronounced mi-CAL-o-witz), at http://MikeMichalowicz.com/.
Learn more about Barry Moltz, at .http://barrymoltz.com/.
Rebecca Saltman is a social entrepreneur and the president and founder of an independent collaboration building firm designed to bridge business, government, nonprofits and academia. www.foot-in-door.com.