How do you develop a winning mission statement?

One that fits on the back of your business card but doesn’t clutter the whole thing up?

The more important question is: When do you write your mission statement?

Many want to write a mission statement too soon.The sequence should be strategy formulation, business plan, then mission statement.

Strategy formulation will force you to narrow down what your central business value proposition is.  Knowing where you give value to the world makes it simple to formulate your message.

Crystal clear strategy answers this question: What one thing must my team be great at to have a great business?  As that one thing changes, you will still know it and be able to adjust your business accordingly.  (A business performance dashboard keeps track of the most important aspects of your business so you can see what is changing.)

I say business plan comes next, but that is just as a way to verify your strategy and make the purpose of your business completely clear to everyone.  You don’t need to have your business plan 100% done to move on to writing your mission statement.  (Actually, your business plan is never done.)

Once you know your strategic imperatives and have communicated them well through your business plan, you are ready to write your mission statement.

Look for how to write your mission statement in the coming week.

How do you develop leaders in your organization?

One of the ways I give back to the community is to volunteer as a Varsity Coach for the Boy Scouts of America.  I work with 14 to 18 year old young men.

We just completed a 57 mile hike at Philmont near Cimarron, New Mexico.

In that setting, you learn about life and leadership.

The purpose of Philmont is for the youth to be the leaders.

In our crew, all decisions and planning and orienteering were done by the young men with us.  If they chose the wrong trail, we all went that way.  The cooking, the bear safety precautions, and even the spiritual devotionals each evening were all under the direction of the crew leader, who was 18 and had experienced Philmont before.

Other crews would arrive at camps and the adult advisers would sit them down and go over all the assignments for the day.  They made the decisions.  And at the end of the trek, the young men may have had some good experiences, but they hadn’t developed any new leadership skills.

Here are some lessons I drew out of my Philmont experience that can improve the long term health of your business:

• Having a compass and map are like having a vision and a strategy.  Vision shows true north, and strategy shows you how to get where you need to be.
• Give people the opportunity to fail.  Sometimes spectacularly.  For your business to be the most successful, you need to have your hands in as few a tasks as possible.  Think about it.  Do you want to have to make all the decisions for each individual or department?  No way!  Then you get caught up in the thick of thin things.
• Put people in the right positions.  Just because you allow people to fail, doesn’t mean you should throw them to the wolves and ask them to do things they have no preparation for.
• Individuals and departments need to be autonomous, but aligned with the overall goals of the organization.  If they know the high-level strategy of your business and how they fit into that strategy, it will be simple to make correct decisions.
• When things are unclear, knowing the business strategy can enable creativity.
• Do difficult things.
• Have an adventure.

I loved working with our crew to complete our trek.  What trek are you taking your business on?

This is Mount Baldy at Philmont, elevation 12,441 feet.  We all made it to the top.

If you want to move your business and your life forward, you need to improve your ability to communicate well.

The best innovations will never change the world if they do not have a champion.  Someone to push them forward.  Someone to spread the word.

If you want to implement change in your business (whether you are the owner or an employee) you must communicate effectively.

How can you develop your communication skills?

One thing is to practice.  I have joined my local chapter of Toastmasters International here in Tempe, Arizona.

Toastmaster programs develop your communication skills as well as leadership skills with specific programs and recognition.

The communication program allows you to practice specific skills and a variety of topics.  Here are just a couple of examples:

• Speech organization,
• How to use body language,
• Vocal variety,
• Using visual aids,
• Persuasion, and
• Inspire your audience.

The leadership program has projects that help you practice skills and builds on the communication skills that are developed concurrently.  The projects include:

• Listening and leadership,
• Giving feedback,
• Time management,
• Planning and implementation,
• Organizing and delegating,
• Motivating people, and
• Team building.

This is just part of the introductory program.  The potential for improvement in this area of life is endless.

How can you be good at marketing without communication?  How can you make a presentation to potential investors without polished presentation skills?  How can you implement the best strategy without communication your vision to your entire team?

One of the most consistent things in any resume or interview is: ‘I’m a people person.’

You can’t be a people person without the ability to communicate and lead.  And most people far overestimate their abilities in this area.

In just a month at Toastmasters, I have seen how my skills in these areas need a great deal of development.  Don’t yours?

In my part of Tempe, Arizona, I am Varsity Coach for the Boy Scout troop. So one thing that interests me is teaching young people to be creative and look at the world around them for ideas.

The Boy Scouts of America recently announced a new merit badge – Inventing – that fosters creativity and innovation.

The requirements for the Inventing Merit Badge are essential skills for any entrepreneur.  Let’s see how you stack up.

This is just a few highlights questions Boy Scouts will be able to learn from this new merit badge.

1. Define the term intellectual property. Explain which government agencies oversee the protection of intellectual property, the types of intellectual property that can be protected, how such property is protected, and why protection is necessary.
2. Explain the components of a patent and the different types of patents available.
3. Think of an item you would like to invent that would solve a problem for your family, troop, chartered organization, community, or a special-interest group. Keep a notebook to record your progress.
4. Talk to potential users of your invention and determine their needs. Then, based on what you have learned, write a statement describing the invention and how it would help solve a problem. This statement should include detailed sketch of the invention.
5. Build a working prototype of the item you invented. Test and evaluate the invention. Among the aspects to consider in your evaluation are cost, usefulness, marketability, appearance, and function.
6. Discuss with your counselor the diverse skills, education, training, and experience it takes to be an inventor. Discuss how you can prepare yourself to be creative and inventive to solve problems at home, in school, and in your community. Discuss three career fields that might utilize the skills of an inventor.

So what do you know about your business’s intellectual property?

Do you know different kinds of patents available?

What problems could be solved with a new invention?

Would people actually pay money to have that problem solved?

Can you make a functional prototype?

Can you assemble a team with the diverse skills, education, training, and experience to develop a new product and bring it to market?  If you make the best mouse trap in the world, but nobody knows, what good is it?

If your idea solves widespread problems, you have a societal responsibility to sell as much as you can.

Your advertising message needs to be in front of as many people as possible.  But reaching out to everyone is cost prohibitive.

The art of advertising effectively is to segment the population and find out what your ideal customer looks like so you can pay just to be in front of them.  If it cost a dollar to reach out to one person, it would cost $310,000,000 to reach everyone in the United States – once.

Whatever you sell, that probably isn’t going to be effective.  Coca-Cola doesn’t reach out to people once.  (They are one of few companies that reach out to everyone, though.  You can do that when you had revenue of $31 billion in 2009.)

Once you have segmented your market, you need to spread the word.  But you might be disappointed that one of the modern “laws” of marketing is wrong: Sex doesn’t sell.

Oh, sure sex sells itself.  A sexy movie would have sexy advertisements.  Same for violence.  It sells a summer blockbuster.  But for people that sell normal products and services, sex and violence aren’t very effective for attracting and retaining customers.

In 2005, a University of Michigan study told why “sex sells” is upside down.  Advertisers love shows like CSI, Sex in the City, or 24 because they bring in younger viewers.  But when viewers are enthralled with the sex or violence (or both) of a TV show, they couldn’t remember the TV advertisements shown at the regular commercial breaks.  This was true of both genders and every age demographic.

I suppose this doesn’t specifically talk about sexy or violent commercials.  But can a commercial really compete with 24?  And if a commercial based on ‘sex sells’ was bought on a show that appeals to young families, they would be as likely to generate boycotts as sales.

If customers don’t remember your message you wasted your advertising money.  Don’t fall for lazy advertising that tries to sell with sex or violence.  Find authentic ways to reach your customers and have a compelling story they will remember.

I know what I said last week.  It still applies in most situations.  But in a climate of disruptive innovations, listening to your customers can cost you industry leadership.

Your customers know what they need now.  But if you always base your plans off of what your customers think they want in the future you will lose your position of industry leadership.

Your customers are chasing markets with higher sales and higher margins.  They should and you should.  But there are new businesses trying to expand from their markets to yours.

An example from the steel industry over the last 20 years in the United States is a prime example of this problem.

The steel industry has made a shift over the past 35 years from large integrated mills that have input of ore, coal, and limestone to make various steel shapes to minimills that essentially recycle scrap metal to make steel shapes.  The cost of an integrated mill is in the billions of dollars, while a minimill was in the hundreds of thousands.

In the mid-1970s, minimill steel started at the low end of the totem pole in steel mill profitability.  They melted down other things and made it into rebar.  The integrated mills were more than happy to be rid of the rebar business.  Rebar customers are the least faithful, they are most price sensitive, and the profit margins were the lowest.

The minimills saw rebar differently.  They sold it as fast as they could make it.  And because their cost structure was so much smaller, they beat the large integrated mills on price.  All the minimills had to do for sales was have a phone and fax.

By 1980, minimills then saw an opportunity to move upmarket.  They improved quality to make other kinds of bars, angle iron, and rods.  Again, the integrated steel mills were happy to be rid of these products.  It was their least profitable.

The same thing happened with structural steel by the late 1980s.  Minimill technology improved and their quality improved enough to make structural steel.  Getting rid of this line of products again increased integrated mill profitability.

The integrated mills were left to focus on the most profitable of their products: rolled sheet steel for appliances, cars, and cans.  Then it happened again.  Someone developed a process and the machinery for minimills to make sheet steel.  The integrated mills gladly let them have the low profit end of this market: corrugated steel, culverts, and Quonset huts.

In 1989, the integrated steel mills posted record profitability – just before minimills developed the ability to generate the smooth, defect-free rolled steel surface needed by makers of cans, cars, and appliances.

Now the only integrated steel mills in the world are in rapidly developing countries like Korea, China, and India.

So is chasing your most profitable customers and meeting their needs going to leave you vulnerable to attack from below?

(This is summarized from the book, The Innovator’s Dilemma.  Just in case you were wondering, I have really enjoyed this book.)

By now you have read about the problems with AT&T and iPhone 4.  There were so many orders that AT&T stopped taking new orders.

This probably isn’t good for AT&T, who may soon lose iPhone exclusivity.

But from Apple’s perspective, the problems with AT&T are the perfect advertising.

It can be a challenge to generate buzz for a new product release.  (Granted, the iPhone 4 isn’t just a normal new product release.)

All the bad press AT&T is getting keeps the iPhone in the news.  For now, people will hold their nose about the network if it means they can get their new toy.

This is perfect for Apple because the problem is with the network.  Their new product and its features will continue to get talked about, and even if a few people get miffed because they have to wait a week to get theirs.  Sales will go up because the problem is not with Apple.

All the record sales do for Apple is attract new buyers.  And once Apple releases the iPhone to other wireless providers, this will make sales soar.  It may be the perfect way to fend off the Andriod taking market share.

I wouldn’t be surprised if Steve Jobs arranged the shutdown of the AT&T webpage just to get the iPhone 4 in the news more.

Are you going to get the new iPhone?

If you had a football stadium full of every potential customer for your product or service, what would you tell them to make them love you?

How will you keep them from tuning out after 10 words?

Don’t frame yourself based on your competition.  Don’t talk about about the products and services you offer.

Talk about their pain.

Talk about how they lose time and money because of their pain.

Teach them something.

Get feedback from your customers.  Many times, they will ask for or develop innovations that will make your business better.

Give them something free.

Whatever you say you need to be authentic.  Your message needs to match the image of your brand.  Coca-Cola had ads that ran briefly (that was pretty funny) where people fought over their Coke and did funny things to get their Cokes back from someone else.  The whole ad campaign was pulled because it contradicted the image Coca-Cola always portrays to people.  Have you noticed how every in Coca-Cola advertisement people are sharing with their friends and making new friends?  That’s no accident.

I had a BYU professor who regularly said, “Provide a service; collect a fee.”

If you want to be rich, the best way to do it is find a problem people want solved and find a new way to solve it that costs lots less than ignoring the problem.  The more people you can solve that problem for, the richer you will be.

If you are authentic, your story matches your image, and you are providing a genuine service to your customers, you will be successful.

I happened across one of the most brilliant advertisements today.

A friend passed it along to me on Facebook.  All you have to do is “Like” the Redbox page and you get a password for a free one night movie rental on June 21st.  Redbox wants people on their “Like” page (at 622,000+ as I type this).  People want free movie rentals. Of course I will share the location for your free movie (below the fold).This is perfect advertising.  And it is cheaper than typical online pay-per-click.  Redbox is only out $1 for each person who gets a free movie and lots will probably forget to turn it in on time.  Click on the picture to go to the Redbox “Like” page.

Redbox is the prime example of “Why didn’t I think of that?”

Remember when you had to go to the local Blockbuster to rent movies?  Then Netflix came in and blew them out of the water.  You have endless variety, and you can have any movie you want if you wait for it.  They had advertisements a while ago bragging of their one billionth rental.

Then comes Redbox.  It has less variety than Netflix or Blockbuster (unless you are willing to drive across town to get the movie you want).  But nine months ago, they celebrated half a billion rentals.

Netflix and Redbox are classic disruptive innovations.  (Check out this post to see what I’m talking about or buy the book, The Innovator’s Dilemma to get the whole story.)

Netflix started out in a completely different market than Blockbuster.  But in short order, they expanded to a wider customer base and then displaced Blockbuster’s customers.  By that time it was too late for Blockbuster.  They may have initially been worried that an idea like Netflix would be cannibalistic to sales.  By the time Netflix forced Blockbuster to copy them, it was genuinely cannibalistic.

Then Redbox comes in to McDonalds, Walmart, and corner stores with lower selection, but 100% convenience.  People who don’t watch enough movies to justify a Netflix subscription will pay $1 for a rental.  I don’t know how much Redbox hurts Netflix, but I bet it’s a good deal.

So why didn’ t you think of it?  (And while I typed this post, 3000 more people “liked” the Redbox page on Facebook.)

The biggest little problem I have heard lately is employees texting on the job.

One text message is no big deal.  You lose a minute or so of productivity per text message.  But what happens when someone receives and sends 30 text messages an hour as they carry on at least three conversations?

I recently heard this story about a veterinary clinic.  One client came in with a dog having seizures.  The employee behind the desk barely acknowledged the client and said, “Sign in and someone will be with you,” as she continued to text away.  Apparently, a dog having seizures wasn’t important enough to delay sending an LOL or OMG.

I also know of a medical records department that struggles with productivity.  Some in that office consistently miss their deadlines.  Others, who finish their responsibilities each week, take time to help their colleagues catch up.  But while they are being helped, they are texting away on their phones.  No wonder they are always behind!

This problem with productivity is only going to get worse.

Things like Facebook, ESPN.com, or celebrity gossip trash sites cost productivity.  For now there is a simple solution: Many companies have filters that prevent internet browsing during business hours.

Once mobile device browsing surpasses PC browsing in a couple of years, companies won’t have the ability to easily block access to time wasting webpages.

One aspect of employee evaluations should eventually include a log from the cell phone provider showing when people are texting and browsing the internet during business hours.  Is that so different than the police getting phone and texting records to determine fault after an accident?

Is the day coming when there will be a texting break just like there used to be a smoking break?  As an employer, don’t you want your employees to give you all the time you pay them for?

How can you realistically solve this problem?  Is this something you just let slide for certain positions?