iSmith

When Paul Allen asked Bill Gates how big their new software company could get, Gates replied that he thought they could get to thirty-five programmers.

Gary Vaynerchuk combined his passion for technology and wine to transform his parent’s New Jersey liquor store into a $60 million dollar online empire.  Vaynerchuk’s infectious enthusiasm that eliminates the stuffy elitism associated with oenophiles is offered daily via web video, though Vaynerchuk supplements his ubiquitous online presence with regular tweets.

Julie Powell started a blog to describe her experiences cooking her way through the 536 recipes in Julia Child’s seminal work Mastering the Art of French Cooking. The blog became popular as readers easily related to Powell’s culinary triumphs and comedic kitchen disasters. The blog fostered a book deal, the book became a best seller, subsequently becoming a major motion picture, Julie and Julia – the first blog to be made into a film.

We think of Allen and Gates as billionaire visionaries, philanthropists, and financiers now, but at their core they are programmers. They spent years, day after day, on a mission – writing code that would make personal computing accessible for the masses, their customers.

Vaynerchuk didn’t accidentally “discover” the secret sauce of e-commerce or get lucky by being the first or the only. The secret of his success is expressed every day when he ends each webisode with, “YOU, with a little bit of me, are changing the wine world.” In his last show before switching formats after 1,000 episodes, Vaynerchuk told his community of fans, simply,  “I love you.” His mission, day after day, is to love his customers.

Powell could have given up the blog and the endless hours in the kitchen, particularly when the recipes were for sweetbreads, brains, and kidneys, or when Powell’s personal life perhaps needed more attention, or when the recipe called for twenty steps and ten different pots and pans. But her unflagging dedication to entertain her audience kept her cooking. Powell’s mission, day after day, was to engage her readers, making something seemingly inaccessible – the complexity of French cooking – in a humorous, poignant, and human way.

Business people can easily get lost in their own dreams of success, riches, and stature with convoluted  five year plans and mission statements. It’s evident to us at SGP that the realization of dreams is achieved by the lessons of Microsoft, Gary V, and Julie Powell and they are two-fold:

• Execution of a daily mission is the basis of success
• The daily mission is about what you help other people accomplish, not about what you hope to accomplish for yourself

We are fond of an ancient story that tells of a young man climbing a mountain to seek the wisdom of an old master. When the young man comes upon the master, the old man is hunched under the weight of gathered firewood, trudging along the path toward his hut. The young man asks of the master, “What is the secret of life?” The master drops his burden at his feet, straightens himself, inhales a deep breath then slowly exhales. He then picks up his firewood, puts it on his back again, and continues on the path.

Don’t let the visions of your dreams get in the way of your dreams. We often find company mission statements that state what the company “will become.” Be conscious of who you are in relation to your customers and make that your daily mission, and you will be rather than become. Accomplish that, and you will succeed beyond your dreams.

Our last post,  “Tough Questions”, we suggested you ask yourself a really tough question: “What are you doing because everyone else is doing it?”

You answered “Not much,” didn’t you? After all, you are the leader in your company. The innovator, the entrepreneur. You got to where you are by seeing what others couldn’t, by capturing opportunity your competitors missed. You are the creator and lord of all you survey, and by nature a contrarian and visionary.

All of that may be true, but if your company is stuck, flat-lined, or sucking wind, you may want to revisit the question and answer it more honestly. Consider the following:

In a New York Times article examining the reasons most individual investors lose money, or end up were they started, one factor clearly emerged (paraphrased):

People are social animals hard wired for, and conditioned to, conformance.  Most people take comfort in being with the majority and being acceptable, and accepted, by the majority.

Furthermore, we take comfort in knowing that if we’re wrong we won’t be alone.

Here’s a short list of “Everyone’s in the pool, so let’s jump in”:

• In the 1990’s VC invested in every company that had a .com in their name. Result: Dot Bomb
• Late 90’s, investors fled to the “safety” of bonds. Result: Bonds tanked in 2002
• Mid 90’s, home buyers and lenders became cohorts in the real estate boom. Result: Banking and Foreclosure crisis in 2006.

To be sure, there is quick money in following the herd, if you know when to cash out. For example, we’re seeing investment activity in the collective buying space with companies trying to improve upon or at least nip at the heels of Groupon and LivingSocial. Every investor knows the market can’t sustain hundreds of companies doing the same thing, but they are drawing up term sheets nonetheless.

In business most follow most.  That gives rise to the “Me Too” organization convinced that what everyone else is doing is good for me. Time for a check in with your team if you are a Me Too company. “Me Too” leaves no space for innovation or creativity.

“Following the leader would be fine” said Earl Nightengale, “but the problem is far too many are following the followers!”  Ever wonder why 95% of all businesses go under in the first five years?

There is great illusion in groupthink. One example we see in our work at Smith Growth Partners is that clients are convinced that “everyone” in business is using social media to market.  It’s not a conclusion based on objective facts and research, it’s because they tend to associate with people immersed in social media. We advise clients to start NOT with the answer, “We need to market in social media,” but rather to begin with a set of questions that promote original thinking:

“What do we want out of marketing?”

“How does social media help reach our marketing goals?”

“Now that we know what we want to accomplish and what role social media plays in the mix, how do we use social media more effectively than anyone else?”

Ask yourself again, and be honest. Just what are you doing because everyone else is doing it? The answer may open up new avenues of communication, innovation, and creativity.

(Photo courtesy of http://www.freefoto.com)

Old friend and iSmith fave, Carol Coughlin from BottomLine Growth Strategies has a wonderful message for non-profits.

Til then Carol, over to you…

Anyone who reads Summit knows that BottomLine Growth Strategies cares deeply about supporting profitable, sustainable growth.

This is, of course, tangential to and a means of achieving our overall mission of guiding CEOs to business success, but still, helping businesses achieve profitability is primary. In fact, the financial strategies we recommend are always based on what we know will support profitability – whether we are advising on pricing or creating an exit plan for a business owner.

What you might not know is that many of our clients are actually non-profits.

Specifically, non-profit organizations that realize the success of a social mission depend largely on the multitude of financial strategy decisions made (either consciously or unconsciously) every day. Especially, in the new economy.

Non-profits today are facing a more difficult set of challenges than ever before:

o Intense competition for donor dollars
o Government cutbacks (devolution)
o Decreased staffing budgets
o Increased accountability pressures
o Tax and compliance regulations
o Elusive and/or intangible performance indicators
o Mounting debt
o Drains on creative energy from all of the above

These, on top of the unique challenges non-profits have always faced, have had a substantial and increasingly negative impact on these organizations as a whole. If you also consider the impact to the non-profit’s ultimate bottom line (its social mission), the cost of caving under these challenges is more than an issue of success or failure. In some cases, it’s literally an issue of life or death.

Now more than ever, non-profits must think and act like for-profit businesses. They must commit to a mindset of profitability in decision making if they wish to not only survive, but to thrive. They must adopt sound and forward-thinking financial strategies.

So, what do sound and forward-thinking financial strategies look like through a non-profit’s eyes? Not surprisingly, very much the way they look through a for-profit’s:

o For-profits must finance their corporate mission. Non-profits must finance their social mission.

o For profits must determine where to spend capital. Non-profits must determine where to spend funding.

o For-profit CEOs must plan for their succession. Non-profit directors must plan for leadership continuity.

o For-profits must align financial strategies with business objectives. Non-profits must align financial strategies with mission and values.

The list of relevant general comparisons goes on. Then, there are the financial strategies and objectives non-profits must put even more effort into in light of their unique nature and current challenges. Non-profits must:

o Provide 100% transparency in financial reporting.
o Present multiple accurate, compelling and motivating financial stories for various audiences and goals.
o Judiciously manage their risk.
o Quantify intangible performance indicators.
o Seek innovative ways to achieve their objectives.
o Define ROI for initiatives and articulate value for donors.
o Scrutinize every aspect of the organization to find “hidden” funds.
o Innovate in procedures and practices to boost budget.
o Find ways to save on the expert financial support required to do all of the above effectively, including accounting and bookkeeping.

What makes these strategies and actions particularly difficult for non-profits is that the role of CFO is often filled by the director, a board member or even a staff member with a background in finance, who simply does not have the specific, in-depth, real-world CFO expertise required to meet the demands of the job. It is difficult enough for a less tested “CFO” to accurately analyze the current financial picture, much less create a fiscal vision for the future and develop the progressive strategies that have monumental impact in terms of both available budget and mission success.

What our non-profit clients understand is that the role of CFO is so specialized that it can only be played effectively by a highly trained CFO.

What they choose to do is avoid the CFO salary and benefits expenses by outsourcing short- and long-term CFO support to us.

What they see is a revitalization of their entire organization.

We start by facilitating the profitable growth mindset that takes non-profits out of survival mode and into results mode.

And what we’ve found, time and time again, is that this one mindset shift (with everything it triggers) makes all the difference.

Nothing fulfills us more than witnessing any client’s success – and we are profoundly honored to have supported and to continue to support some of the Baltimore/Washington area’s most critical, compelling and creative social missions. Our overarching goal is to inspire them as much as they inspire us.

Carol Coughlin can be reached at BottonLine Strategies at (443) 798-1357 or CFOSherpas@BottomLine-Growth.com.