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Buffet’s Advice

Kevin — Fri, 06 Mar 2009 19:33:00 +0000

Warren Buffet wrote in his annual shareholder letter:

In good years and bad, Charlie and I simply focus on four goals:(1) Maintaining Berkshire’s Gibraltar-like financial position, which features huge amounts of excess liquidity, near-term obligations that are modest, and dozens of sources of earnings and cash;(2) Widening the “moats” around our operating businesses that give them durable competitive advantages;(3) Acquiring and developing new and varied streams of earnings;(4) Expanding and nurturing the cadre of outstanding operating managers who, over the years, have delivered Berkshire exceptional results.

I would modify and simplify as:

maximize cash flow
create barriers to entry and to exit
grow sales
acquire great talent

The Kindle 2 Jumpcut (or, Jeff Bezos is an Idiot)

Kevin — Mon, 02 Mar 2009 07:11:00 +0000

I just got the Kindle 2 eBook Reader from Amazon. I’m too cheap to buy it for myself, but I’m giving a bunch of them away as part of a business launch I’m doing. So figure I’d better get one and take it for a spin. My experience is a good reminder of how you should put yourself in your customers shoes to make sure you understand their experience.

I loved the out of box experience (OOBE) of the Kindle. A decade ago people used to write much about the OOBE of personal computers and home electronics, but unfortunately many seem to forget about this part of a buyer’s experience. If you care about design–and you should–the OOBE is important. The kindle comes in a sleek cardboard box. Cool text on the outside. Zip pull strip to open up. Very nice.

But the huge let down comes from the simple fact that there are no books pre-loaded to get you started. Well, there IS one book I found you can download for free. It’s a Harlequin Romance novel. Yuck.

Now if I can afford $400 for a Kindle I know I can afford $10 to download a book I actually want. But that’s not the point. It forces a jump cut in the user experience and adoption. I’m sure my experience isn’t unique…

I come home and find the brown box from Amazon. “My Kindle!” I open it up, see a cool box inside, open that one up. I see the Kindle, it’s so small and light! Hmmm, let me plug it in, wow it auto-starts, sets up by itself, and knows who I am, it already recommends books! Cool! OK, let me play with a book, learn how to turn pages, highlight things, I want it to read to me.

What the ?! No books on it. OK, I’ll download some freebies to play around. Huh? Nothing free but a romance novel? Guess I have to search through the lists and find a book I actually want. And go get my credit card. Where is my wallet? And, now the phone is ringing…the kids need dinner…someone at the door…I’ve got that report to finish…must pay bills…life intercedes…

I’ve had the Kindle for a week now and still haven’t gotten back to it to download a book. It’s just sitting on my shelf. Looks nice though.

The sad thing is there a plenty of authors and publishers that would LOVE to give away a book as a marketing tactic to reach a wider audience. In fact, Seth Godin, has repeatedly offered to do just that.

What’s the matter, Bezos? Afraid a free book will keep people from paying for books? Don’t want to cheapen the experience? That’s stupid. Get people hooked right away. Pick a great book for every major category (business, history, children’s, cooking, etc.) and load it up for free.

How can you optimize the new customer experience?

14 Secrets to Expanding Time

Kevin — Tue, 24 Feb 2009 06:00:00 +0000

I obsess over time. Time is our most valuable resource. Nothing else even comes close; money is easy. This fact explains the popularity of Getting Things Done (GTD) and 4-Hour Work Week. Everybody wants to expand time.

Reminding myself of these keys has been critical to maximizing my productivity.

1) 1440 = the number of minutes in a day. (I used to hang a “1440″ sign on my office door as a reminder to myself and to others.)

2) Every “yes” is a “no” to something else.

3) Beware of distant elephants. (Far away, even large things appear small.)

4) Touch things once.

5) Each appointment needs an end time, not just a start time. (My number one time mistake.)

6) A “stop doing” list is as important as a “to do” list.

7) Block time on your calendar for all of the “got a minute” meetings.

Block 30 minutes at the end of the day to return important calls and emails.

9) Make time to plan.

10) Slow down, stop, think.

11) Review your to do list and ask not “How can I get this done?” But rather, “How can this thing get done?”

12) Know the monetary value of each minute.
(And realize the value of those whose time you seek. To keep the math simple, let’s assume you are an executive who makes $180,000 per year and let’s assume an 1,800 hour work-year, which equates to $100 per hour. Which means when someone grabs you in the hallway for an unplanned 10-minute chat, it’s like they stopped you and took $17 out of your wallet. And you are spending $50 to sit in on a 30-minute meeting, not to mention $100 to watch a CSI repeat. Maybe these are sound investments, maybe not, but you won’t know unless you know what you earn per minute. If you make closer to $90,000 per year, then your time is worth 83 cents per minute. If you are an entrepreneur who creates $1,000,000 of additional net worth each year, your time is worth $9.26 per minute.)

13) Relaxation is a skill.

14) Sleep is a weapon.

Perhaps most important is to remember the advice of the wise old philosopher Ferris Bueller, who once said: “Life moves pretty fast, and if you don’t stop and look around once in awhile, you might miss it.”

Use your life.

How to Measure the Performance of Managers

Kevin — Fri, 20 Feb 2009 02:00:00 +0000

I think one of the secrets to my success in the past has been to primarily focus on the numbers. I would have clear financial targets, practiced open book management, rewarded generously the business unit and sales leaders based on financial performance. It works, but it can also be a little hairy at times as internal rivalries grow, competition for internal resources emerge, and the short-term focus can cause pressure to accelerate revenue recognition or delay needed investments.

Bill Campbell, business coach to Google, Apple, and others, suggests that the performance of employees should be evaluated in a more balanced fashion. He suggests four key measures:

1) Performance against objectives

2) Innovation

3) Ability to work with peers

4) Ability to work with sub-ordinates

Over the long run, people do tend to do what they are paid and rewarded for.

You are evaluating employees, right? Is it time to re-evaluate your evaluation system?

Mirror Mirror on the Wall: Two Ways to Get Honest Feedback

Kevin — Tue, 17 Feb 2009 10:42:00 +0000

Great performers are always looking for ways to get better. But you need an effective way to discover areas to target for improvement.

The problem is that people don’t tell you the truth when you ask for feedback, for a variety of reasons. They might be scared of your reaction, or they don’t want to hurt your feelings, they’re too nice, whatever. I learned from David Meister that instead of asking, “What do you think of me and the job I’m doing?” ask:

“What are other people saying about me and the job I’m doing?”

And another method I’ve found very effective is to ask your client to quantify your performance, which then sets them up to reveal how you can improve in the future:

“On a scale of 1 to 10, how would you rate [us/our service/our product]?” Listen carefully to their answer, then ask, “What would it have taken for us to have gotten a 10?“

And if you’re really courageous and want an improved life, try these questions:

“On a scale of 1 to 10, how would you rate me in the last week as a husband? [listen] What would it take for me to be a 10?”

“On a scale of 1 to 10, how would you rate me in the last week as a Dad? [listen] What would it take for me to be a 10?“

Cut to the Chase – Now!

Kevin — Wed, 11 Feb 2009 06:00:00 +0000

James Bond movies always start with an action-packed mini-adventure before they even cut to the famous theme song and movie title. Indiana Jones movies were modeled after the Bond formula and also immediately start with a fedora’d Harrison Ford grabbing treasure and escaping from bad guys. These movies literally cut to the chase-scene before the movie even begins. Apply this idea to all of your business communications.

Speech Tip: Good presenters start by thanking the sponsors, the host, the audience etc., but GREAT speakers go immediately to a hook of some kind and they give thanks and acknowledgements at the end of the speech.

“We called it fire month. It was 138 degrees in Baghdad in August of 2003…” –Congressman Patrick Murphy beginning his speech at the DNC

Pitch Tip: Immediately dive into the solution you propose for your client, or a case study if you have one that is similar to their situation. They’ll be more interested in hearing about your company after you hook them with the product/service.

“Jane is a J&J; sales representative who lives in St. Louis. She is sorting through the day’s mail when she notices a large golden envelope. Intrigued, she tears it open to find a package of microwave popcorn and an oversize movie ticket inviting her to a Hollywood premier. The premier of course, to the launch of your new product…” — Account Executive beginning her pitch for a movie-theme for a national sales meeting

Proposal or Report Tip: Never put the information about your company at the front of your proposal. Put it last in an Appendix. You should start with a one-page executive summary that cuts right to your unique solution and the value proposition you present. Grab them with your first sentence. If they are interested, they’ll find out more about you at the end of the document.

“Mother died today. Or was it yesterday?” — First two sentences in Albert Camus’ book, The Stranger

Think of your business communication — whatever the form — as if it were a book or movie. Grab your audience’s attention in the first minute and then develop the characters and story line.

So what’s the “chase scene” for your next pitch? (oh, by the way, your client is always the hero in the story right?)

Win Friends

Kevin — Wed, 11 Feb 2009 02:20:00 +0000

“To gain a friend, let him do you a favor.” — Ben Franklin

No crying in baseball

Kevin — Tue, 10 Feb 2009 08:48:00 +0000

During these rough economic times it’s helpful to remember Tom Hanks’ encouragement to Geena Davis in the movie “A League of Their Own.”

It’s supposed to be hard. If it wasn’t hard everybody would do it.
The “hard” is what makes it great.

And 20 years ago I worked briefly in the clinical research department of a major pharmaceutical company. The VP of the group was well liked and respected by all. When things got really crazy, which was often, he would remind us, “This is just another opportunity to show excellence.“

How are you rallying your troops? Are you showing excellence?

Minimalist Drucker

Kevin — Sat, 07 Feb 2009 06:00:00 +0000

“The bottleneck is always at the top of the bottle.” – Peter Drucker

What’s Your “Profit Per Chicken”?

Kevin — Thu, 05 Feb 2009 10:52:00 +0000

Every company should have one key metric. One number to focus on and measure and to drill into everyone’s head. No it’s not profit or sales. It’s the number behind the numbers. The number that drives sales and profit. It’s the number that if you were a public company the industry analysts would all focus in on.

For restaurants and retail chains the magic number is “same store sales.” Think of a big chain like McDonald’s or Starbucks. There are two ways for them to make more money: open new stores or sell more stuff in the stores they already have. Now, of course, they try to do both. But the key indicator to how well the business is doing is whether existing stores are doing better or worse than they have in the past. Pricing, menu variety, cleanliness, service, marketing are all reflective in whether they are selling more in existing stores or selling less.

Other examples of key metrics:

Airline industry: Revenue per seat

Hotels: Revenue per room

I once heard an interview with Jim Perdue Jr. in which he said his Dad taught him that in the future he should focus not on selling more chickens, but on doing more to the chickens they were already selling. I think of this as I shop and see pre-packaged Perdue Short Cuts ready to open and put on salads, pre-cooked chicken nuggets, pre-marinated individually wrapped chicken breasts, and on and on. I don’t know for sure, but I bet the key metric Perdue Jr. looks at each quarter is profit per chicken.

So what’s your key metric?