Managing Your eCommerce Business

Click here to view the webinar video “Managing Your eCommerce Business”.

Most entrepreneurs still think of their e-commerce site as a shop selling goods, like the old days, when they should be thinking of them as marketing machines. In this video I give you lots to think about.

 

Pain Relief

Competitive Advantage

Almost every day, somewhere in the world, for the last few decades, people have been discussing “competitive advantage” specifically with regard to the business itself. More recently, certain scholars have even gone so far as to suggest a business’s competitive advantage is transient or even non-existent. However, at ROKC we place competitive advantage front and center – in the customer’s lap! Simply put, businesses exist to provide their customers with a competitive advantage in achieving some specific outcome.

Let’s consider the Customer Competitive Advantage for a moment before getting into the concrete example of Over The Counter pain relief medication.

I don’t think anyone would contest the assertion that since the dawn of time man has struggled to survive. First and foremost, physiological survival. Up until fairly recently the rate of infant mortality, death at childbirth or within the first year of birth, was very high. Modern science, medicine and hygiene greatly increased the chances of an infant surviving anywhere in the world. Some have argued that infant mortality rates in the “developed” and “developing” worlds are so close it makes no sense to even use these words. The second struggle is to survive physiologically past that first year by having enough food, clean water, and access to medicine to keep your body healthy over the rest of your life time. Here again, many nations have overcome this struggle through bountiful access to these resources. While other nations are still struggling to bring these basics to their citizens. In almost all cases, both of these struggles have been overcome through science and the technological advances employed to make these resources readily available on a mass scale making the struggle for education the third most prevalent in life. These three struggles have contributed significantly to our “modern” way of life and business: science informs our understanding of what resources can be used while technology gives us the means to make them usable on a large scale so that we can alleviate the struggles of as many people as possible. Therefore, business serves only one purpose which is to provide customers with a competitive advantage in overcoming their struggle to survive.

Philosophically, ethically, morally, economically, politically,….we can engage in countless debates as to who gets what benefit from this process of transformation but we will not do so here as it is outside the scope of this article. However, it is a passionate subject which has been debated for centuries and forms the very basis the political and economic systems used in every country.

In more customer-centric economies where consumption is the highest proportion of the Gross Domestic Product it is probably easier to see how business’s provide customers with a competitive advantage in achieving a specific outcome if not for any other reason that the market is so crowded. More times than I care to admit I use the pain relief align at the local pharmacy to illustrate this point. Thus, the reason for this article. So, here goes!

Way back in history when you struggled with a headache you would have to romp around the forest and plains to collect herbs you then boiled up in a pot and drank – probably a very bitter – tea in the hope of some pain relief. The process probably took a great deal of time which meant people just suffered through it. The herbalist and then apothecary came along warehousing the herbs allowing you to gain some time but it was still rather inefficient. Subsequently, science came along to determine what, inside, the herb was the active ingredient that relieved a person’s pain allowing the pharmacist to synthesize it and keep a powder on hand for any customers who came into their shop with a headache. Technology helped standardize the process and mass production made it so cheap to manufacture little pills that you could keep a bottle at home, in the office, on your person, in car glove compartment,… Over the course of time relieving a headache went from a few hours to minutes. Or, to express it differently, the competitive advantage by which the customer relieved their headache increased significantly; it became not only faster but more sure with time, the uncertainty was reduced to almost zero.

However, in today’s modern pharmacy you don’t find just one product but hundreds. Why is this so? Well, at a minimum, you have four: Aspirin (Salicylic Acid), Acetaminophen, Ibuprofen, and Naproxen. These are the four most commonly used “active ingredients” in Over The Counter pain relief products. But what about the rest? The other hundreds of products are made up of variations of these four themes each one addressing another customer uncertainty by providing a competitive advantage to relieve the customer faced with that specific struggle.

  • Heart health
  • Children, Women, and Men targeted
  • Fast acting
  • Coated pills for stomach discomfort
  • Migraines
  • With/without water
  • Cold/fever/flu
  • Indigestion
  • Arthritis
  • Allergies
  • Chewable
  • Flavored
  • Brands
  • and so on and so forth, not to mention dose sizes and quantities.

In fact, a search of Walgreen’s e-commerce site shows no less than 79 Aspirin containing products, 278 Acetaminophen products, 112 Ibuprofen, and 40 Naproxen. 509 pain relief products that use these 4 active ingredients! From a ROKC™  Methodology point of view, each of these 4 key components has on average 127 products providing customer’s with a competitive advantage in treating a couple of dozen or so uncertainties. But this is only part of the reality because this is only the Over The Counter mass retailer market. These same pain relievers are available in convenience store, gas stations, vending machines,hospitals, medical offices, dental offices, veterinary offices, … all over the world. Next, you have to add the prescription products into the mix and maybe we have a complete picture.

In fact, in the US, all health products are registered with the FDA. A query of the FDA database using these active ingredients gives a complete picture for this country:

  • 1,393 – Aspirin
  • 8,090 – Acetaminophen
  • 2,899 – Ibuprofen
  • 1,365 – Naproxen

Or, 13,747 pain relievers using these 4 active ingredients!

In such a crowded market it is impossible to successfully penetrate a market with a new product by only taking into consideration the active ingredient, or as we call it the Key Component. And, please keep in mind, those ancient herbal remedies are still around vying for their share of the market as well as new compounds challenging the entrenched 4 to dethrone one or all of them.

So regardless of where your business is in its life cycle – startup or mega-corporation – you are going to be hard pressed to make any headway in a market if you do not approach it based on the competitive advantage you are providing to the customer.

While researching with topic we came across a newer company with a novel approach which illustrates this point. All of the pills, capsules, gelcap, tablets,… we looked at require the consumer to drink a full glass of water. Goody’s on the other hand provides a powdered product the consumer simply ingests, no water. Undoubtedly this is a very niche product however each does retails for $0.73 while basic aspirin is less than a penny. That’s over 73 times more expensive! Their margins must be very comfortable. Goody’s was able to discern an opportunity in the marketplace that no one wanted to – or could – address making it a viable new entrant into a very crowded market.

What Customer Competitive Advantage is your business addressing?

A Very Basic View of Economics

I’m not an economist or anyone with a plethora of degrees but I am an observer, and have been for many decades. Consequently, my view of economics and the world is probably very basic in comparison to many readers. I ask your forgiveness for anything foolish I may express. Nonetheless, I’d like to scope out views to better understand the world and how it works.

As far as I have come to understand, economics is the science of productive property. I know, I know, heresy! But bear with me a moment. Doesn’t economic growth and prosperity come from productive property being used in products and services that customers acquire because it takes the uncertainty out of some outcome they are trying to achieve, like: food, shelter, security, knowledge, health, beauty, or even getting rid of a headache. From a very basic point of view, the land we use to cultivate crops addresses our uncertainty about having enough food to survive. No?

Likewise, when our economy experiences an economic expansion it is sometimes – not always – “asset-backed”. The economic growth many countries experienced before the financial crisis was based on primarily on real estate. New assets being built at an amazing pace fueled by cheap money and the illusion of security provided by asset-backed securities and credit default swaps. At its lowest level, the construction boom created wealth and jobs in the construction industry. However, this spate of building also created demand for a whole “ecosystem” comprised of bankers, extractive and manufacturing industries, and – let’s not forget – retailers because many people, in the U.S. at least, were using their property as piggy-banks. Of course, once those asset values – real estate values – exceeded their “real” economic value it all came crashing down.

The occurrences of asset-backed bubbles – seems to me – to be very much a consequence of the liberalization of the financial services industry in the 80s. First, the savings and loans crisis then the Internet bubble and lastly the real estate crisis. Each bubble seems to become bigger and further reaching as time goes by. Or, maybe that is just an impression. Thoughts?

Similarly, there are economic expansions after these bubbles pop. Like drinking too much “bubbly”, you have to get over the hangover you feel the day after. These periods of economic growth bring the economy to a “new normal” which isn’t very different from the be state that existed before (1% – 2% GDP growth rates). Assuming I got this straight and you agree with this view, the growth experienced following the Financial Crisis was the result of this return to stability.

So what is next?

Well, it seems fair to me that the US Fed increase interest rates. Surely someone will disagree with me but that’s okay, I look forward to reading you. There are three major reasons I see for an interest rate. First, economic stability has been restored. Second, the rates practiced by the Fed go to benefit the big financial institutions, in the U.S. and abroad. If memory serves me, the US banks have been borrowing at low rates and lending that money to the Federal Government at 2%-3%; helping them to payback their bailout loans in record time? And third, if memory serves me, those low rates never made it to the real economy because of the need to deleverage and to recapitalize the banks. Not to mention that so many US dollars have been loaned to emerging markets that an interest rate hike would cause them significant damage. Now that emerging market borrowers have had the time to protect themselves and the Volker Rule has reduced US exposure to these markets when the US gets a cold emerging markets won’t sneeze. In sum, increasing US interest rates is a signal to the world that all is normal again in the US market.

If we tack onto this interest rate hike the weakness in commodities and many emerging market currencies the world economy seems primed for satisfy increased demand especially from the West. The only challenge to this increased demand is consumers having the funds to acquire goods and services above and beyond what they already have. In the US, there has been increasing pressure to increase the minimum wage and to pay overtime, both of which should put more money in the consumer’s pocket allowing them to buy without increasing their indebtedness.

But we can’t forget the retiring Baby Boomers, either. Since about 70% of US GDP is consumption, we must include them in the mix. Aside from their Social Security checks, these people live off of their retirement funds which are invested in stocks and bonds. If consumption can stimulated then stock prices and dividends will flow. However, with an increase in interest rates so will the interest in bonds. Any government with an aging population must take care of its pensioners! The US already did a lot to help this segment of the population out through the Affordable Healthcare Act which essentially redistributed healthcare costs through the private sector and bolstered the share price of insurers that are owned – probably to a significant degree – by pension systems. But this is another discussion for another time.

Assuming this all makes sense, we should see a slow economic expansion in the coming years. Nothing wild. Why? Because there is no new asset on which to base our irrational exuberance.

In keeping with the historical model, there could be a new asset. We did start with tangible property classes and then – during the industrial Revolution – added intangible property classes. If we go one step further – and we are knocking on this door with collaborative consumption – our legislators could add certain private property to productive property thus increasing the asset base some more. But this is a very challenging subject I don’t want to go into here.

Thanks for reading all this, now I look forward to reading your thoughts.

Handy screen shot 2015-08-02 at 3.02.33 pm

Independent Contractor vs. Employee : Handy

I just read an excellent article, This home-cleaning service shows everything that startups do horribly wrong by ALISON GRISWOLD of Slate, republished on Business Insider, about Handy, the New York based cleaning service. The articles looks well researched, and primarily covers the hot topic of work classification: Independent Contractors vs. Employee. A fascinating topic increasingly in the media because of the winner take all economics of the Internet and the inequality that results from such a concentration of economic power.

Below is my take on Handy’s business model, its problems, and how to potentially resolve it. Which is a blueprint for many collaborative consumption businesses being launched and growing.

“Based on this article it seems Handy has made a slight mistake in defining its business. It seems they define Handy as an online cleaning service which results in the company wanting to define how the work is done and then running afoul is employment laws. However, if the company understands that as an online marketplace business it is really in the business of facilitating the creation and development of the relationship between someone needing cleaning services and someone offering cleaning services, in other words a communications business, then it would develop online tools in this sense and not create problems of itself with regard to labor laws. Instead of training cleaning crews with a prescribed way of doing the job – which implies too much control and thus an employer/employee relationship – or hiding behind language to hide this relationship – our customers ask – just allow the customer to tell the cleaner what they want done and how using a form.

By creating the tools necessary to facilitate combination between the two parties in the cleaning marketplace and a feedback loop for quality control, Handy can effectively delegate how the job is done to the hiring and executing parties to the transaction. This allows the company to maintain a clear separation between itself and the independent contractors executing the jobs. And, more importantly, gives Handy the tools necessary to acquire a whole host of data about how people want their cleaning done, what products they prefer, what techniques, and so on. Information useful to many interested ecosystem members opening up other avenues of value creation through the sale of data, hyperlocal consumption habits, content creation, advertising, e-commerce, transactions (of course), and so on.”

DBV Technologies Viaskin Transdermal Patch

Case study: DBV Technologies

A few days ago, a friend of mine from another biotech company pointed out DBV Technologies (ticker: DBVT). It was a week before its secondary offering and my friend suggested it as a possible investment opportunity for a client I advise on portfolio management. To date, I have helped them achieve over 40% total returns, capital gains and income, so they listen attentively to my advice. Anyway, my friend’s enthusiasm for this company was contagious so I took a look at it from a ROKC ™ point of view.

Since the secondary offering, $34, the stock has risen to $42. In hide sight, an $8 per share capital gain in just a few days would have been excellent investment but truth be known, I did not make the recommendation. So I’ll tell you why.

After reviewing the publicly available information on DBV, I came away with reservations over the valuation.

DBV is a biotech startup operating in the allergy market. It provides a way of developing the antibodies necessary to combat certain allergies, like: peanut, milk and egg. In a country like the U.S., a vast and lucrative market especially for children. The antigens used to help develop this autoimmune response are bought in by the company so these cannot be important to the company’s valuation. Instead, DBV’s value lays in their development of a transdermal patch which regulates the flow of antigens into the body. This delivery system is proprietary and protected by several patents.

From a ROKC point of view, DBV has an asset (the patents) which it owns and controls, and is used in their products ( the peanut, milk and egg patches) providing the customer with a competitive advantage (antibodies to protect against potentially fatal allergies). Perfect! This is exactly what we look for in companies.

Company leadership also declared a strategy to maximize the return on this asset by targeting the U.S. market for children with an insufficient immune response to peanut, milk and egg allergies. An A+ for this strategy too.

So why is there a problem with valuation?!

The challenges I see for the company are two fold:

1. The machinery used to manufacture the proprietary transdermal patch is highly specialized and present machines do not have the capacity to fulfill potential market demand.

1st generation machine: 750k/annum
2nd generation machine: 2,250k/annum
3rd generation machine : 20,000-30,000k/annum (forecast for 2016)

According to their website, the recommended dose is one patch/day. Assuming the third regeneration machine gets up and running, between 54,794.5 and 82,191.78 patients can be treated on a full year basis.

According to the American Academy of Allergy, Asthma & Immunology, in 2012, 4.1 million children reported food allergies in the last 12 months. Although treating 54k – 82k children is certainly important, that is only 1.3% – 2% of the children’s market. If we add to that the adult market then the number of patients treated is even smaller. And, if we add other geographic markets it is minuscule. Much, much more productive capacity will be necessary.

2. This brings me to my second point, as far as I can see, no other company is seeking to license the patents or the transdermal patch manufacturing technology. Although some suitors may come out of the woodwork once the product is fully approved for sale, this also suggests that its applications are possibly limited.

Based on these two points, it is a challenge for me to see how a company with 5 million euro in annual sales, or $4.5 million, can have a post secondary offering market capitalization of $1.6 billion!

The market cap is over 260X annual sales when most young biotech companies are trading between 20-50.

Not knowing the patches sale price, it is challenging to estimate how many years of future growth the share price might represent taking into consideration the ramp up in sales. However, if we compare with a nicotine patch that has a public price of $2/patch and allow for 50% margin for distribution we arrive at a selling price of $1/patch. However, knowing DBV’s patches are special, we can augment this price by say 40%, for argument’s sake, leading to an average price of $1.40/patch. With 100% of production going to sales, no samples, the company would max out at $28 – $42M a year in sales, or 38-57X sales.

Although these multiples are much closer to the market they assume all the assumptions are realized without a hitch. Thus, this valuation brings with it a very high level of risk.

Mind you, the risks mentioned in this article relate to production capacity and product pricing. And, our pricing assumption just happened to produce this result because we have no idea of their pricing. In addition to these two risks there are many others, for example: final FDA approval, a marketing and sales organization that needs to be built, foreign exchange fluctuations, and a resulting profitability which is totally unknown.

The risk level is just way too high for $42/share; it is irrational. My recommendation to my client was to wait until the share price came down to half that price before buying.

Strategy Execution Done Right w/ MBMR

Effective leadership occurs when the community as a whole successfully executes a strategy. Large, complex, organizations have the resources to execute much more efficiently than startups or even small and medium sized enterprises (SME). In fact, I’d go so far as to argue most of the tools and techniques, online and off, hailed as the vanguard of business management are destined for these large players.

However, there is a more traditional tool which is available to SMEs, startups and Mega corporations alike: the Monthly Business Management Review (MBMR). Many of you won’t know what this is unless you come from a big company, so allow me to explain. A MBMR is simply a monthly meeting that convenes senior management to review and discuss the company’s progress toward its stated goals and decided on corrective actions. In every senior executive role I held (subsidiary, division, and HQ) I held these reviews.

Many of you might be familiar with similar types of meetings but know them under names. However, these are operational meetings, not strategic meetings or business planning meetings or even forecasting meetings. They are focused on short term operations and are very effective for sharing with the community where you have been and where you are going: execution.

A rather detailed online search demonstrated to me that there is a phenomenal amount of information and services about starting and exiting a company but hardly anything at all about how to go from one to the other. It is for this reason that I am throwing this tried and true tool into the arena for your consideration.

As a coach and consultant, I get the opportunity to work with business leaders from around the world on strategy but more often than not they totally underestimate the requirements of a successful execution. MBMR can be expanded to include other key people in the company but also from outside. Not only can you get a fresh pair of eyes on your most pressing business issues but you also avoid the traps of “group think” which blind you and your team to the assumptions underlying your decision making.

By way of an example, I offer the recent case of a client of mine. The CEO recently learned an imminent change in legislation was planned which could adversely effect the sales so he wanted to launch a campaign informing potential clients of the pending change thereby accelerating orders. He and his team spent hours working on the communication strategy. During our weekly session, I asked him how he was planning to execute this strategy?

  • How many replies did they anticipate?
  • Given the fact that the legislation might change at the end of the month how did they plan to service these clients? Did they have a contingency plan in place if every client responded on the last day?
  • How could they influence the prospects to reply sooner rather than later?
  • How would they address the risk of not getting a prospect grandfathered in under the old rules? If a prospective client did everything asked of them but the company did not would they liable for damages?
  • How were they going to manage the sales funnel?
  • Since the legislation changed only within the state how were they going to manage prospects from out of state? Did they want them even? Of course not. So how were they planning on blocking them?
  • Who could they call on if they needed extra resources? Had they been informed?
  • How much information did they need to share with prospects about their process so as to manage expectations?

And so on and so forth! You get the idea. The strategy was sound but very little thought had been put into execution. This is when I remembered my old management review meetings where a lot of similar issues got hashed out and suggested it to him.

Now, I am suggesting it to you.

Sure, you can go online and find any number of people to hire for a business plan, or to sell your business, or to raise money, or any number of other business related tasks. You can even find people like myself who can coach you and consult with you. You can even find peer-to-peer groups in which to get peer advice. But no one who will actually take the time to work with you and your team on a monthly basis on the operational issues that effect how well you execute your plans.

I will and do!

Likewise, the Internet lends itself very well to organizing and conducting MBMR. Using services like Skype and Google Hangouts, or any conference calling service, we can readily organize these meetings; expanding them as necessary to include other skills and views. Leaders should seriously consider using cost effective and efficient Monthly Business Management Reviews to improve their execution and their company’s performance.

The One Person Business

So many entrepreneurs and small business owners seek out my business guidance to help them be successful that it might be beneficial for me to post an article detailing my approach. Admittedly, for those of you read me regularly, this may sound familiar as it is a summary of what I have written in the past. Let’s get to it.

As far as I can see, all our belief systems – old and new – are road maps instructing us to be who are are. Contemporary thought leaders have tapped into this fundamental truth by coining such terms as being “authentic”, “mindful”, “why”, “What is your motivator?”, “Follow your passion”, or – my favorite – “ROKC”. Therefore, it is fair to say that your business success – like your success in life – is wholly a consequence of your ability to be who you are: to be the best you possible.

Even if you read all the biographies and auto-biographies in the world about wildly successful leaders you will come away with the same understanding. These people are not heroes but they are unforgivingly themselves. Whether they are perceived as good or bad, holy or devilish, they are their rock solid selves.

So, I say, there must be something to this being yourself stuff. And that is what I tell each and every person who comes to me for guidance: Be yourself.

I’m sure you are thinking to yourself, “Yes, this is more easily said than done.” And, you are right. It is very challenging. However, I do have techniques that help and after so many years of doing this I know they work. But I have explained them in other articles so you will just have to go read them on your own as I will not go over them again here.

Once you are able to tap into “who you be” you can truly understand what it is that truly matters to you. What matters to you is what ultimately drives what you do in life. It feeds into the exercise of your free will influencing the choices you make and the degree of happiness you experience in life. It is this fundamental truth that you bring to bear on the community you serve.

Some people keep this way of being for themselves, others share it their families, and still others can leverage it into a business. In the latter case, as business, your community is asking for the benefit of who you are because it reduces their uncertainty about achieving a given task. This can be monetized as a representation of the value your way of being brings to others. However, as one of my clients once stated to me, it does require you to “expose” yourself to the world and that can be scary. But if you want to be happy and make money doing it you will have to overcome that fear. Believe me, it is worth it.

So once you have tapped into your core and made it available to your community, and you are successful, you will want to scale your business. You want your business to work for you, not you for it. Here, too, I can help.

Up to now, you have been working on instinct. Whatever it is that you do, it comes as second nature to you. Your thought process requires 2 nanoseconds. This is your fast mind at work. Which is fine. Except if you want to scale. In order to scale, you have to slow your mind down and observe how you go about reasoning through the process. Note it down. Continue doing this down until you have detailed out the methodology by which you provide that value that is so sought after by your community. Write a manual, copyright it and publish it so it is now protected. This is your first asset derivative and is yours to keep for as long as your copyright can be enforced. You can sell it. You can train others to do what you do and serve more customers. You can give talks. … You get the idea. You can trademark some term and derive another asset.

Let me recap for a second here.

  1. You figured out who you are and what truly matters to you.
  2. You have verified this as true because you can see how it influences and has influenced the exercise of your free will.
  3. You have further verified this as your truth because the emotional connection you have with it makes you happy, or sad.
  4. You express your truth by using it in way that brings a benefit to your community.
  5. Your community asks for – no demands – this benefit because it makes their life less uncertain in some way.
  6. You have monetized it.
  7. You have observed your thought process and detailed it in a methodology.
  8. You wrote a manual or book expressing your methodology
  9. You have a copyright to the manual or book and, maybe, a trademark to some term.
  10. You can now pursue a happy and successful life because who you are aligned with yourself and are valued by your community.

This is the short and long of it. I refer to it as self-leadership. You have to be able to lead yourself because you can lead others. It requires awareness and discipline but those are within reach of all of us. So go ahead and challenge yourself to be who you are.

To Lead, Remember to Breathe

What do you do, have done all your life, that people are constantly asking you to do?

This is the question I found myself asking several of my leadership clients this last week. I don’t know why. Maybe there has been a recent rush of blog posts or news articles on personal development? Then again, maybe it is coming from me? Whatever the reasons, this week’s subject has centered on personal development, and taking leadership of one’s self.

The ROKC™ Method provides a framework for understanding why a business exists thus providing clarity for leaders to better influence outcomes.

However, it would be myopic of us to assume that such a model exists in a vacuum. It does not. It is actually the mirror image of personal development. The ROKC view of business is based on the organization owning and/or controlling an asset that provides customers with a competitive advantage. That is, the benefit of the product/service resides in reducing the risk of achieving an uncertain outcome for the customer. Something similar can be stated about each individual. Every person has a particular asset–an individual quality, talent, or faculty–which can be used to provide their community with a competitive advantage. If this sounds familiar to some readers, I wouldn’t be surprised. This idea provides the framework for the hero myth, which is very strong in Western culture, as seen in works from The Odyssey, in ancient Greece, to the Star Wars trilogy, in the 1980s, to the recent animated movie How to Train Your Dragon 2 and so on.

In a previous article, Easily Moving into the Leadership Role, I suggested that the people who assume a leadership role do so because they have mastered an “x-factor” that allows them to be recognized for that particular attribute and the benefit this attribute provides the community. This makes sense for the very simple reason that those supporting the leader must know what they are supporting. After all, a leader is someone who can help others see a less uncertain world, which inspires them to take collective action to make this world a reality.

Perhaps the following story will help to illustrate my point. I work with a brilliant young man who has an encyclopedic understanding of IT, and has risen to a leadership role but cannot manage to go beyond that particular level. In fact he is beginning to lose ground. For years, all his attention has been focused on the technology. He went to one of the finest engineering schools, got an MBA, worked for very large companies in different countries, managed very complex projects–you get the idea. When he came to me, he was convinced that it was his knowledge of all these different technologies that had brought him his success and by learning the newest, most cutting edge ones, he would be able to move up the ladder to a greater leadership role. After several months of our working together, he began to understand that there are many people who have the same education as he but do not reach his leadership level; and, that there are people who don’t know half of what he knows and yet they hold higher leadership roles. So, the key to achieving a better position within his organization is not to be found only in a mastery of technology, but must also lie elsewhere. There must be something he is doing with the information he has amassed that is different from what those around him are doing. But what is it? We started down the path of discovering his x-factor by asking the question above:

What do you do and have done all your life that people are constantly asking you to do for them?

And we found it! He is all about integrity. In everything he does – be it professional or personal – he wants to understand the integrity of the system. “Integrity” in its multiple senses: regarding honesty and moral character, as well as soundness, wholeness; whether this be the wholeness of a community, or the perfect condition of a piece of machinery. Thus, this search for integrity focuses on the people with whom he surrounds himself, as well as the systems with which he works. He is very interested in his own personal integrity, which is what drives him to spend hours learning about all the cutting edge technologies. Upon reflection, he realized that he has been obsessed with understanding the integrity of people, places, and things since a very young age. Likewise, he was surprised to learn that this is not a driving force for everyone in the world. (We all assume the rest of the world is a reflection of our self. No harm there.) When we applied his x-factor to his employment history we saw a pattern emerge in which the value he brought to his community was the result of his ability to see the integrity, or lack thereof, in an IT rollout and correct it. He can now move forward firmly rooted in the knowledge that what he brings to the party is integrity.

Another client, a woman, who has her own marketing business, went through a similar process in our discussions, and discovered that her x-factor is discerning limitations. For someone else, his x-factor is understanding why things are the way they are. And yet another, it is a love of language that drives most of her life. In all these cases, the x-factor is natural and easy for them to do, requiring very little effort; it’s as easy as breathing.

But here is the rub. All of them reached a point at which they felt blocked because their worldview, largely shaped by the culture, sees leaders only as those individuals with a certain wisdom acquired from years of study or from life’s experiences. To be more exact, a person lacking this kind of wisdom cannot become a legitimate community leader. By shifting the focus from a skill set to individual qualities expressed through that skill set we are able to break through this limiting paradigm to unlock the true source of their leadership skills and put them back on a path contributing to their community.

This opens up a whole bunch of other exciting areas of discussion like religion, mindfulness, self-awareness, political structures, economics, privacy policies, and so on, so I think this is a good place to stop. However, if you are interested in keeping the conversation going please use the comment section below or contact us through LinkedIn or via our website www.returnonkeycomponent.com.

Photo: Sarah Hamilton/Lebeast Photography

What Do You Bring To The Party?

Almost every day, at least once a day, I find myself asking my clients the same question: “What do you bring to the party?” This may sound like a silly a question but in this context it is full of meaning.

The world most of us live in is very object-oriented. This is an unfortunate way of saying that we tend to live life based on what is outside us. We have the expectation that what we acquire will bring us value without our having to do anything. A simple example is buying a hammer and expecting it to bang in a nail without someone swinging it. In fact, the reality is just the contrary. Even though a hammer is a simple tool a great deal of dexterity is required to use it properly.

A more complex example can be found in education. A person goes to school where they graduate with a degree of some kind and expect to be able to benefit from it immediately. Regretfully, before being proficient in an area some form of apprenticeship is usually a requirement. However, the situation doesn’t stop there. Some professions – most in fact – require the operator to continue learning over their lifetime.

Focusing only on the object is not enough to make you successful. Whether that object is a hammer, a law degree, a product or a technique, it makes no difference. You have to bring some of yourself to whatever you are doing in order for it to be of value. So: What do you bring to the party?

Some of my recent clients have come to me seeking guidance for a business or career that has stagnated. And each time my diagnosis has been the same: Stop focusing on the object and start focusing on the subject, you. Here are a few examples.

A wonderfully generous woman came to me with what she described as an energy bar business. She wanted to scale it up but didn’t have the resources or knowledge to do so. After a few sessions and trying her products, we agreed she did not have an energy bar business but a product development business. This woman has the gift of being able to make some of the most exciting flavor combinations many of us have ever tasted. Her ability to combine flavors in an unusual and unexpected way, and with an extraordinary combination of textures, makes eating her energy bars a true culinary experience. Interestingly, once we came upon this definition of her business she began to see a number of seemingly disjointed events in her life as a continuity that led her to where she is today. Over the course of her lifetime she had taken great joy from creating unusual desserts, for which many of her friends and family asked for the recipes. Similarly, she had recently been asked to develop products by three different companies. By realizing what she brought to the party, she was able to better define the value she brought to her customers and how best to serve them.

Another client came to me with a cheesecake business but, through the same exercise, understood the cheesecake was a vehicle for bringing people together, to create joyous moments of bonding or community. When he realized this was the true value he brought his customers, a whole bunch of projects he had worked on over the years began to make sense to him. He now had a way to help others to effectively communicate the joy and happiness of creating memories with those we love.

On the other hand, a client questioning his high-tech career of 15 years was unable to identify what he brought to the party and instead focused on the technology he had mastered. But when that technology was no longer in demand he could not change his focus, stumbled, and fell down the rabbit hole. This was a tough lesson he is now working his way through.

Another similar case is that of an artist who encountered a great deal of difficulty in defining her style. Until she was able to sufficiently differentiate herself from most everyone else in her profession, there was no compelling reason for potential customers to hire her.

It is challenging for most of us to see what makes us unique in a world where there is so much supply of talent. It is very difficult. Especially when we are not assisted by those around us. But, if we open our eyes and take the time to observe ourselves, we can gain the clarity necessary to define our special “X factor.” Here is the approach I use with my clients:

  • What do you do every day that comes to you naturally, effortlessly?
  • Have you been doing this for many years? Maybe even since you were a child?
  • Have you been regularly asked by family and friends to do this for them?
  • Have you done this for others but because it is so ridiculously easy for you, you would never think of asking anyone to pay you for it?

Once you can answer these four questions you will begin to see how this special ability you possess has been influencing your decisions your entire life. It has influenced your choice of educational orientation, friends, mate, how you educate your children, your work…everything. And this is normal, for nothing makes us happier – makes us feel more fulfilled – but to be in situations that allow us to express who we are. This authentic way of being is our individual “key component”, and we continuously seek out opportunities to be successful at being ourselves.

So, whether you are just being yourself with family and friends, starting a business, applying for a job, working, or in a moment of transition, answering this very challenging question will unlock a whole new way of looking at the world.

What do you bring to the party?

 

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