By The Book: Perspective for Your Business Opportunities
Who and what you allow into your head matters. Reading a book gives an author plenty of time to wrestle with your assumptions and state their case, and much of the opportunities I see for businesses in 2012 are framed by the authors I've invited into my head in the last year.
Derek Sivers is best known as the founder of CD Baby, but you may know him as the narrator in the viral YouTube video "Leadership Lessons from a Dancing Guy." Sivers asserts that the most important role in starting a movement is not the leader. It is the first follower, because the first follower teaches other followers how to follow.
In his book, Anything You Want (Domino Project, 2011), Sivers, a musician at heart, describes taking a new song to his voice coach. Sivers would sing it, then his voice coach had him sing it an octave high, an octave lower, now twice as fast, now half, now like Bob Dylan, then Tom Waits. It became hard to remember the original idea of the song.
This same concept applies to your business plan, as you've prepared it or revised it for 2012. Sivers' coach would have you make a new plan that requires only $1000 in seed money, then make one without a web site, now 10 times as many customers, now half, then franchise it, then assume all your assumptions are wrong but it somehow works anyway.
The movie "First Knight" (1995) is chock full of advice for business and life. After running the gauntlet for the very first time, and surviving without padding or protection of any type, Lancelot was asked by King Arthur, "How is it that you succeeded where so many others had failed?"
Lancelot replied simply, "Perhaps fear made them go back when they should have gone forward."
This point is echoed by Julien Smith in The Flinch (Domino Project, 2011). Smith argues that your flinch, the natural physical reaction based on fear or experience, is best used to move forward through fear or pain. After all, he reminded me, police and military use the flinch to gain an advantage in hand-to-hand combat when they train themselves to react towards an opponent rather than away from it.
Many of us have been forced to make some painful decisions in the last year. Shortly after coffee-mogul Howard Schultz returned as CEO of Starbucks after an 8-year hiatus, he was faced with a financial situation which led to closing stores and getting back to the original intent of the company.
In presenting financial scenarios to his board, as he describes in Onward (Rodale Books, 2011), Schultz was asked to go back and prepare a Plan B, as if same-store sales were to drop yet another 15% in the next year. Schultz and his team slashed and cut and cut some more. Upon presenting Plan B to the board, the board responded simply with, "This is your new Plan A."
And with that painful move, Starbucks crouched it's posture for an eventual pounce back to profitability. Looking back, he had to admit that it was, indeed, the second tier of cut-backs that gave Starbucks the strength to make a move on profitable new products and brand-extensions.
There are many ways for your business to scale in this economy. The art is choosing a model. The risk might be greater in staying the same.
If you're running your business by the book this year, make sure you're buying the right books.