The last few weeks we have explored the differences between creativity and innovation, the need to continually innovate the delivery of a product or service to the customer, and the value of “micro-Pivots” as a way of keeping the customer at the center of the business and improving profitability. All of these topics have roots in my reading of the Pursuit of Wow by Tom Peters, yet none of the concepts are explored explicitly in the book. The book itself is, as the back cover describes it, is a book that is “organized into more than 200 though- and action-provoking elements…” (Peters, 1994). There may be no more apt description of how it stimulates my thinking about business.
This week, though, I want to call out a particular three pages of the book—116-118, if you’re interested—where Peters’ calls out to entrepreneurs. Here he offers a few distinct ideas that resonate with me as a serial entrepreneur with a lifetime of work in a small business with other entrepreneurs. Here are a five of those ideas about how to beat the odds of failure (Peters, 1994):
- Be different. And make that difference easy to identify and understand. We have to be able to clearly and succinctly explain how our business offerings differ from those of our competitors. If one owns an auto repair shop, how is the different than the five other auto repair shops the same distance from my house or office? If the business cannot differentiate in some way, the default differentiation will likely be the price. And in my experience, competing on price can be one of the fastest ways to business failure.
- Have a soul. As Peters’ suggests, the soul is the things that can help a business differentiate (Peters, 1994). In short, it’s the things that make customers take notice.
A barber I used in the Chicago suburbs years ago gave a quick neck and shoulder massage at the end of my cut and never seated a new customer until all the hair from the previous customer was swept up and vacuumed from the chair. As a bonus, if you needed your shoes shined while you were getting your hair cut, it was done free of charge. The shop had six chairs, and they were always full even though there were three other barbers within walking distance. That’s soul.
- Success springs from the details. Pay attention to the tiny particulars of the day-to-day operations. From the cleanliness of the restrooms to the engagement with the customers. Everything matters. Everything must put forth a message that is consistent with the customer’s expectations and the brand the business wants to convey.
A few years ago I attended a sustainability summit. The basic premise of the summit was how to make a difference in the world by deploying sustainable measures in business. Some of America’s biggest companies known for sustainable measures were present, as were several of the world’s thought leaders on the topic of sustainability. Indeed, sustainability is a broad term that means different things to different people, yet the summit organizers missed the boat on some very basic items. For example, coffee was served in styro-paper cups, water was provided in plastic bottles, and the event was held in one the oldest, most power-inefficient venues in the country.
- Watch the money. A good accountant and accurate books are essential, as is the ability to understand the financial health of the business those books convey. It is also important to develop a good relationship with a banker and keep that banker abreast of the ups and downs of the business. A solid relationship with a bank, one that is built on honesty and trust, will be a lifesaver for the business.
- Talk about it. Being an entrepreneur can be terribly isolating and lonely. A trusted, fellow entrepreneur is a valuable asset to any business owner. It is invaluable to have someone to talk to who understands the ups and downs of entrepreneurial ventures. Honest, direct communication is key to effective counsel. Every entrepreneur needs advice from someone who has been in the trenches, too, but few seek it.
- Regularly reinvent. See Always be Pivoting.
I cannot say that employing these six ideas will unequivocally prevent failure of an entrepreneurial venture. But, I will say that if deployed consistently and with purpose, I believe these ideas will mitigate the possibility of failure. And when the odds are against entrepreneurial ventures, everything that can tip the scales for success should be used.
Do you use these ideas in your business? Do you believe they have or are contributing to your success?
Reference
Peters, T. (1994). The Pursuit of Wow! Every Person’s Guide to Topsy-Turvy Times (1st ed.). New York: Vintage Books.
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9 thoughts on “Beating the Entrepreneurial Odds”
When I had my mortgage company I did use these ideas. The one that stands out the most is being different and it was easy to identify. There are several things I did different from other mortgage loan officers. I was in constant contact with the customer throughout the loan process. If for some reason something did not happen in the timeframe I had promised up front to the customer I would knock some of the closing costs off and eat those costs myself. My customers knew I would take care of them and be fair at the end of the loan process hence coming back to me or referring their friends. I had a marketing person and had a strong belief of that consistent message being very important. I knew early on I needed a good bookkeeper and accountant and I had both. They kept me out of trouble. I was friends with another mortgage broker who had her own company and we were always collaborating which made it nice in the mortgage world. I believe all of these contributed to my success.
I’m reading from his later books on Innovation. He indeed has a lot of nice ideas and examples.
Ten Faces of Innovation: IDEO’s Strategies for Defeating the Devil’s Advocate and Driving Creativity Throughout Your Organization, Tom Kelley, Jonathan Littman, February 14, 2006
The Art of Innovation: Lessons in Creativity from IDEO, America’s Leading Design Firm, Thomas Kelley (Author), Jonathan Littman (Author), Tom Peters (Foreword), December 18, 2007
I”d say 1,3, and 4 are obvious and today’s truisms
#2 – soul is crucial in the day of the social media which didn’t exist when this book was written. Companies without souls (in the west at least) are called out. I suppose even in China companies that pollute are called out by the public so even in repressive countries, companies are somewhat required to pay attention to these details
I totally agree with you on sustainability but not sure it follows from #3, perhaps that is your own #7? I think as social media grows and #2 becomes more and more prominent, #2 [soul] will expand to include sustainability. That is don’t just do the right thing but do the right thing for the planet [assuming the planet is still livable my then….]
I am glad to hear this, Margaret! I, too, have used these ideas in my businesses. All are very important but often overlooked by entrepreneurs–especially those who are in the ring for the first time.
Regarding #3, The details. The idea here is those things that make the customer take notice. The “soul” or “heart” in the sense of why the company exists should bleed through every company action (the details). So in the case of the sustainability summit, the “soul” was preaching “we differentiate by making the world a better place through our work to protect the environment.” However, the actions did not align with the soul and diminished the value the organization was trying to build. The details were important here and they were seemingly not given adequate consideration with regard to how misalignment would affect the brand and/or soul of the organization.
Sustainability could be another bullet. But, I think it’s so loosely defined at the moment. There’s no clear leader (or consistent definition) and until that tightens up, saying “sustainability matters to us” seems more like lip service than an actual differentiator.
The Art of Innovation and Ten Faces of Innovation are good ones. It’s been a while since I’ve read those.
Hi David, I believe that those beating the odds are more than ideas, they are the gospel. They create a solid foundation for a successful business. I really like the barber testimonial. He exceeded a customers expectation by creating a wonderful experience for the customer. Men can be pampered too. In this case price wouldn’t be a major factor because of the experience. I am willing to pay more for the experience than for an order taking service. The add-ons that one can provide to their customer, is what makes a customer for life ensuring the longevity of a business, plus referrals!
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Thanks, Michelle. I agree these ideas are solid. With the barber, you are correct on price. I recall the charge was about $18, versus $10 or so at a competitive barber down the street. I did tell most everyone about the shop and still do!
Seeing the word “pivot” reminded me of Marc Andreeson and some advice offered him that I’ve always remembered. It’s “raise prices”. A lot of companies out there seem to think that the only way to achieve volume is to make their products as cheap as possible. This has the ironic effect of having no money left over for the marketing and advertisement that are needed to make people aware of the product and also sustain the product over the long haul. The “app” market seems to have a lot of this – give away the lion’s share for free and achieve volume in the short term but the long-term can be slow starvation. Nice post – enjoyed it.
Money is important, isn’t it? It’s the thing that makes the business go. It seems some entrepreneurs forget this when they’re developing their “business” model. Planning is the first step. 🙂
Hi David,
Thanks for sharing – First I would like to say, Tom Peters is an awesome writer! I had the pleasure of reading one his book during this class called “O My Soul, The inside Story”. David, this book will take your whole soul on a spiritual journey- in a way that allows your mind, think abilities to recreate- to be resurrected in a sense.
I enjoyed reading this post – especially # 2 ; although very short and simple; this was and is a powerful statement. I believe when one does put there whole soul into something- people will be able to identify them and their creation immediately – its only one of each of us- so why not be great!