Category: Octane Blog

B2B Game Changers: How to Discover a Distinct Advantage and Become a Market Leader

Tim Hamilton, an EO member in Austin, is founder and CEO of Praxent, a custom software and web app development firm that has been named for three consecutive years to the Inc. 5000 list of the fastest-growing private companies in the US, most recently as #2,118 on the 2019 list.

In part 1 of this article, Tim discussed the false assumptions driving B2B innovations that fail. In this post, Tim offers B2B companies a strategy for creating digital products around customer experience gaps in their industries:

B2B companies today have a strong desire to create better digital solutions for their buyers, recognizing innovative customer experience (CX) as a key ingredient to success in current markets. While the desire and intention to create disruptive digital customer experiences grows, however, the majority of B2B companies struggle to deliver.

According to Accenture, 80 percent of B2B companies try to innovate around CX, but fail to generate a satisfactory return on investment. In all, billions of dollars are wasted on research and development of innovative ideas that never win new business.

What does it take to design innovative digital customer experiences that predictably win? The key is uncovering the false assumptions driving the failure of B2B innovation experiments. Find the truth behind what motivates customers to make purchases in a given industry, then innovate around those foundational realities.

Opportunities to Innovate: Addressing Challenging B2B Customer Experiences through Digital Products

When companies focus innovation primarily around the product or primarily around the customer, they end up creating customer experiences that fail to make much of a difference in people’s lives.

Understanding customers only provides a certain amount of value to the innovation process. While demographics, personas and psychographics may provide helpful information about customer preference, those things alone won’t point to the best opportunities for innovation.

Likewise, simply improving a product for the sake of improvement does not lead to any strategic, industry-altering innovation. The only way to create new products or product improvements that offer customers new and formerly unavailable value is to identify the “job to be done,” then remove friction from the customer experiences surrounding that “job to be done.”

4 Steps to Create a Digital Product Strategy for B2B CX Innovation

Creating a digital product strategy for innovative B2B customer experiences starts with understanding the “jobs to be done” by your product. From there, analysis will reveal the best opportunities for investing in innovative solutions that pay off both for you and your customers.

Step 1. Identify the Jobs to Be Done

To get started, conduct user interviews to dig deep into the “jobs” customers expect a product to complete. Don’t trust your assumptions about what motivates purchases. Make a list of what characterizes the customer situation before using the product and what would characterize success as a result of using the product. This gaps analysis will reveal one or more “jobs to be done.”

Step 2. List Customer Experience Gaps

Once you know the “jobs to be done,” you are one step closer to defining an innovative product concept that will predictably win. The next step is to create an exhaustive list of customer experience challenges people face as they seek help accomplishing the “job to be done.”

Customers “hire” products to complete jobs for them—their satisfaction is driven by how well the product completes that job, and how easily it does so. Successful CX innovations not only get customers from Point A to Point B, they also remove challenges B2B customers would otherwise experience.

Each “job to be done” from your gaps analysis will usually have three customer experience aspects: functional, emotional and social. Consciously or not, customers will measure satisfaction based on a product’s performance in each of these areas.

For instance, the amount of effort and time customers have to invest in using a product are considerable challenges associated with the functional aspects of a job. Fear of failure may accompany customers as they “hire” products–as may social constraints, such as meeting the expectations of others through the use of the product. These are both examples of emotional and social challenges that can represent friction between customers and the progress they wish to make by hiring a product.

Here are four questions to ask as you create your list of customer experience gaps:

1. What about the current product experience is holding customers back from making the progress they need to make?
2. What are the functional, emotional and social aspects of their goals and the current product experience?
3. What challenges and barriers are associated with the functional, emotional and social aspects of the job?
4. How can the product address these functional, emotional and social challenges throughout the customer journey?

Step 3. Create a Buyer Utility Map

The next step is to identify the innovation opportunities which exist behind every customer experience challenge on your list.

We recommend plotting obstacles and points of friction in a buyer utility map to visually track innovation opportunities along the buyer experience cycle. Simply enter each functional, emotional and social pain point under the stage where it falls in the buyer experience cycle:

● Purchase
● Delivery
● Product use
● Supplemental products
● Maintenance
● Disposal

As you create your buyer utility map, remember to take into account the various types of target customers your B2B company does business with. Each type of customer will have completely different pain points, so you’ll want to create unique buyer utility maps for each. An area for innovation may lie with one type of customer or both.

Step 4. Choose Your Focus

There are usually multiple pain points along a buyer experience cycle, which translate into multiple opportunities for investment.

To create an innovative product that generates a high return on investment, B2B companies will need to make strategic choices on where to focus their energy. This means making the harder choice of where to underperform their competitors. Avoid being decent at addressing all pain points, yet failing to be a market leader.

There may be countless CX challenges your product or service can address. But not all of them represent the best business opportunities. It’s essential to choose where to focus your energy, resources and budget. Ask yourself:

● Which areas are you most capable of addressing?
● In which areas will you choose to underperform?

Assess the results of your buyer utility map, and compare how your industry as a whole is investing in innovation to solve each of the pain points. If most competitors are already addressing certain pain points, it may behoove your company to focus on an opportunity that’s currently being ignored.

Change the B2B Game with Low-Risk Innovation

Innovation is often risky, but it doesn’t have to be. Join the 20 percent of B2B companies that successfully and predictably innovate to create customer experience value. Discover your distinct advantage through “jobs to be done” research, challenge-opportunity analysis, and plenty of first-hand market and user research to validate the concept before sinking money into a development project.

Tim Hamilton is the founder and CEO of Praxent, a custom software and web app development firm. Praxent has been named for three consecutive years to the Inc. 5000 list of the fastest-growing private companies in the US. Tim has been an EO member since 2011. Learn why industry leaders like Tim choose EO for their entrepreneurship network.

This post was originally published on the EO Global Octane Blog.

Experts Share Ways to Recession-Proof Your Business

Contributed by Bill Lyons, CEO and president of Griffin Funding.

Along with the excitement that comes with a new decade, 2020 brings a lot of speculation on the economy, including a focus on what we call recession proofing. While business owners don’t know for sure if a recession will hit in the near future, the need for ensuring your business can weather the storm is real and growing.

Bill Lyons from Griffin Funding, says, “Make financial moves to stay nimble.”

The more nimble your ship is, the quicker you can make decisions and implement change throughout the culture and organization. If you want to recession-proof your business, ensure that you are nimble. Here are my recommendations:

Be proactive about taxes.

One of the biggest expenses a business owner can incur are taxes. It’s best to be prepared and have a plan in place to minimize what you’ll end up owing.

If you don’t have an internal CFO who is forecasting, budgeting, managing lines of credit and managing cash flow, consider hiring an outsourced part-time CFO or working with a proactive CPA (not reactive) who can help you plan throughout the year.

I also recommend getting your CPA financials quarterly and sitting down to plan and strategize.

Finance to keep you recession-proof.

In addition to building cash up on your balance sheet, apply for a low-interest line of credit with your local community bank so you can utilize it for growth, acquisitions or for a period when you need to pivot to a new marketing plan or a new product. A line of credit and cash together will put you in a position of strength and provide you the fuel you need to navigate through a recession.

Don’t wait to apply for a bank loan until you need it because more often than not you won’t get approved. Banks most often will lend you money only when you don’t need it.

Navigate a recession.

If you’re a giant cruise ship you could be a sitting duck if a recession comes. By the time you turn the wheel, a year may pass before the rudder starts to turn the ship in the new direction it needs to go. If you are a big fat cruise ship with lots of overhead, put a plan in place to be able to transform it into a nimble ship quickly that can execute. If that isn’t an option then put some nimble ships around you (small independent ancillary businesses) that can either protect you or diversify you. Do this especially if you are in a business that is sensitive to the market and outside forces.

Ryan Shortill from Positive Adventures, suggests, “Build a strong team and make adjustments to increase flexibility.”

Not knowing how much longer the economy will march on, we see the potential for a challenging year ahead.

Examine your overhead and make changes as needed.

Here are some questions to get you started:

Can you make one division of your company recession-proof so you are more shored up than most?
How about the other portion of your business? Is it sensitive to business spending? If so, a reduction from others may spell a reduction for you, so you have to tailor an agile team headed into the new year.

Strengthen your team and ensure employee retention.

Consider adding or repositioning staff: This is part of the strategy to make sure you have a division in your company that is recession-proof.
Increase employee appreciation: There are many ways to show employee appreciation. From the everyday “job well done” recognition, to giving your staff space and autonomy to accomplish their tasks, to sales bonuses, to appreciation gatherings. These should all be in the mix to keep your team energized.
Find ways to improve company culture through CSR or experiential retreats: Now more than ever there is a push for more conscious ways of doing business, commonly known as CSR—corporate social responsibility. Companies also know they can attract and retain more talent with a culture that values workplace wellness and a general feel that an individual can make a difference! Corporate retreats often fall into the same routine, making them feel more like work and less like a retreat. Give your employees an experience they will never forget while taking advantage of this time out of the office with their colleagues.

Lauren Zerweck, marketing consultant, advises, “Get creative with your communications and marketing.”

Keep up on your marketing efforts.

When a business is feeling pressure to cut their spending, they often start by reducing the marketing budget. Business owners may think, “Did this campaign bring in sales?” The issue here is sales and marketing are measured with different metrics, so to deem marketing activities unsuccessful based on sales, doesn’t actually make sense.

If your budget is tight, however, it does make sense to be more creative and cut back in areas based on marketing metrics such as web traffic and social reach. There are low-cost options and there are smart and creative ways to pair down as long as you continue to track progress and adjust.

Focus on customer communications.

This is no time to lose out on your regular customers, it’s time to strengthen your relationships.

Improve communications with customers: While staying relevant in your customer’s minds through digital marketing is great, having those quarterly check-ins or face-to-face coffee catch-ups are essential—especially with your top clients. This allows you to really know your clients business and anticipate their needs.
Under promise and over deliver: The importance of stellar customer service cannot be stressed enough in times of recession. The under-promise, over-deliver strategy means that you are always exceeding their expectations rather than setting them high and never being able to meet them. This can be done in a lot of little ways. Everything from following up to ensure all needs were met, to showing appreciation through thank you cards. This will keep them as your loyal customers as well as spread the word resulting in new referral business.
Network, network, network: Building trust is one of the hardest hurdles when courting a new client. Especially when you may only have a single phone call to establish that trust. Whether you have met your prospective client online or in person, you need to make sure they get a good feel for who you are, what you do and how to do business.

This post was originally published on the EO Global Octane Blog.

How Employers Can Support Workplace Mental Health

Contributed by Bethany Seton.

Our mental health clearly affects all aspects of our daily life—including the way we do business and conduct ourselves in the workplace. However, due to the nature of conditions such as anxiety, addiction, depression and the like, problems can go undetected for lengthy periods of time, even as they damage relationships with family and coworkers.

Unfortunately, mental health is not a topic people typically discuss openly. Some employees may worry that revealing their depression or anxiety makes them appear unfit for the job. Others may not even be aware that they are experiencing mental health problems.

To help improve the mental health in your workplace—and thus improve productivity—follow these steps.

Acknowledge the problem

The first step toward healing is facing the problem. This includes not only the person experiencing symptoms of a mental health issue, but the people close to them as well. In the workplace, those people are coworkers and the employer.

Raising awareness is essential. One way to do this is to give employees access to education and resources from competent organizations. Once educated on the possible tell-tale signs of mental illness, they will be able to reach out to colleagues in need or even recognize the need in themselves.

Provide adequate psychotherapy options

Once the problem has been detected, it’s time to take the bull by the horns. In order to ensure a healthy working environment, many employers have opted for workplace counseling.

This is usually a short-term solution meant to encourage employees to work on acute issues. When all employees have access to free, confidential workplace counseling services, it not only helps improve the overall efficiency of the company, but also shows the commitment and care of the employer.

On the other hand, in today’s modern world, online or remote psychotherapy is also an option. You are now able to reap all the benefits of virtual psychology, meaning, you can now have access to sessions online.

Teleconferencing and instant messaging counseling services provided by trained professionals have been slowly incorporating themselves into the field of psychotherapy. While it’s not completely accepted in every culture, many find that remote counseling is both effective and timesaving. Also, the field is further developing in terms of perfecting, adapting and using artificial intelligence chatbots so they can perform cognitive analysis of patients.

Train your managing staff

Managers greatly benefit from relevant training designed to support staff with mental health problems. Every employee is unique, and managers should be able to recognize specific features that define their staff’s behavior.

Some people will need just a little support and guidance, while others will require significantly more attention and encouragement. Confidence building is essential to good performance, as well as motivation and acknowledgement of achievement.

All employees should feel valued and appreciated when they perform well, and when they encounter obstacles including sensitive topics such as their mental wellbeing.

Prevent stress

You have control over the working environment of your company, and you should try to make it as pleasant as possible for your workforce.

For instance, encouraging work-life balance will greatly help reduce stress and prevent burnout. Flexible hours are a perk many will appreciate since they’ll have more control over their day, manage traffic better and have time for medical appointments.

Furthermore, offering flexibility shows your employees that you trust them to be independent and creative, and thus they will surely be motivated to do their tasks without that stressful feeling of you hovering over them. Assertive communication and constructive criticism will show your employees that you appreciate all the effort they put in, and have an understanding of their potential mishaps.

Offer healthy perks

Activities such as lunchtime yoga or gym memberships are well worth the investment. There is a myriad of options an employer can choose from. Offering a healthy lunch in the staff kitchen is an excellent way to start. Or, educate staff about maintaining a healthy lifestyle in a company-sponsored workshop led by a health professional.

Psychological health must never be taboo in a well-organized and success-oriented company. There are many things employers can do to improve their staff’s wellbeing, which undoubtedly leads to better work performance. After all, it is the people that make the company thrive and a happy worker equals a profitable business.

Bethany Seton is passionate about traveling and writing, and contributes to various online content outlets.

This post was originally published on the EO Global Octane Blog.

The Emotional Intelligence of Effective Entrepreneurs

Contributed by Dr. Gleb Tsipursky.

Effective leaders know they need to be excellent at emotional intelligence (EI), the skill of knowing and managing our own and others’ emotions. After all, the only things we can control in life are our thoughts, feelings, and behaviors, and if we can manage those, we can lead our organizations effectively.

And if we know how our minds work, we can become more intentional about our patterns of thinking and emotions. We can evaluate reality more clearly, make better decisions and improve our ability to achieve goals, thus gaining greater agency, the quality of living intentionally.

How do our minds work?

Intuitively, our mind feels like a cohesive whole. We perceive ourselves as intentional and rational thinkers. Yet cognitive science research shows that the intentional part of our mind is like a little rider on top of a huge elephant of emotions and intuitions.

Roughly speaking, we have two thinking systems. Daniel Kahneman, who won the Nobel Prize for his research on behavioral economics, calls them Systems 1 and 2, but I think autopilot system and intentional system describe these systems more clearly. The term intentional system, in particular, is useful as a way of thinking about living intentionally and thereby gaining greater agency.

The autopilot system corresponds to our emotions and intuitions. Its cognitive processes take place mainly in the amygdala and other parts of the brain that developed early in our evolution. This system guides our daily habits, helps us make snap decisions, and reacts instantly to dangerous life-and-death situations, like saber-toothed tigers, through the freeze, fight, or flight stress response. While helping our survival in the past, the fight-or-flight response is not a great fit for modern life.

We have many small stresses that are not life-threatening, but the autopilot system treats them as tigers, producing an unnecessarily stressful everyday life experience that undermines our mental and physical well-being. Moreover, while the snap judgments resulting from intuitions and emotions usually feel true because they are fast and powerful, they sometimes lead us wrong, in systemic and predictable ways.

The intentional system reflects our rational thinking and centers around the prefrontal cortex, the part of the brain that evolved more recently. According to recent research, it developed as humans started to live within larger social groups. This thinking system helps us handle more complex mental activities, such as managing individual and group relationships, logical reasoning, probabilistic thinking, and learning new information and patterns of thinking and behavior.

While the automatic system requires no conscious effort to function, the intentional system takes deliberate effort to turn on and is mentally tiring. Fortunately, with enough motivation and appropriate training, the intentional system can turn on in situations where the autopilot system is prone to make errors, especially costly ones.

Here’s a quick visual comparison of the two systems:

The autopilot system is like an elephant.

It’s by far the more powerful and predominant of the two systems. Our emotions can often overwhelm our rational thinking. Moreover, our intuitions and habits determine the large majority of our life, which we spend in autopilot mode. And that’s not a bad thing at all—it would be mentally exhausting to think intentionally about our every action and decision.

The intentional system is like the elephant rider.

It can guide the elephant deliberately to go in a direction that matches our actual goals. It can help you address the systematic and predictable errors that we make due to how our brain is wired, what scholars term cognitive biases.

Over 100 cognitive biases exist, and more are found all the time by scholars in behavioral economics and cognitive neuroscience. These errors lead to dangerous mistakes for entrepreneurs, in everything from mergers and acquisitions to assessing company performance.

Recent research in these fields shows how you can use pragmatic strategies to notice and address these dangerous judgment errors. You can do so using structured techniques to assess cognitive biases in your workplace, and then use effective decision-making strategies for making quick everyday decisions, for more complex and significant ones, and for critically important and highly complex choices. You also need to avoid failures and maximize success in implementing decisions.

The elephant part of the brain—which is most prone to cognitive biases—is huge and unwieldy, slow to turn and change, and stampedes at threats. But we can train the elephant.

Your rider can be an elephant whisperer. Over time, you can use the intentional system to change your automatic thinking, feeling, and behavior patterns, and become a better agent in taking charge of your life and career, and reaching your goals as an entrepreneur!

Dr. Gleb Tsipursky is on a mission to protect leaders from dangerous judgment errors known as cognitive biases by developing the most effective decision-making strategies. With over 20 years of experience as CEO of the training, coaching, and consulting firm Disaster Avoidance Experts, he also spent over 15 years in academia as a cognitive neuroscientist and behavioral economist. He’s an EO speaker, a recent EO 360° podcast guest and author of Never Go With Your Gut (2019), The Blindspots Between Us (2020) and The Truth Seeker’s Handbook (2017).

This post was originally published on the EO Global Octane Blog.

Not All SEO Problems Are Easy to Solve

Contributed by Jackie Carrillo, a content coordinator and contributor who writes on technology, marketing, business management and education.

SEO is often touted as one of those essential business practices that are simple enough to do yourself. After all, you probably have the power to edit your business’s website, so you can stuff pages with keyword phrases, sprinkle links galore and alter other factors that could improve your performance on the search engine results pages (SERPs). Thus, you could conceivably save tens of thousands of dollars by going the DIY route — unless you run into some SEO trouble.

SEO is simple until it isn’t. Unfortunately, SEO can get exceedingly complex exceedingly quickly. To prove the point, here are a four relatively typical SEO problems that tend to be too complex for the average business leader to solve.

1. Your Website Indexing Is All Wrong

You can put all the care into optimizing your webpages—researching keywords, tinkering with metadata, etc.—but if Google can’t find your webpages, it is all for naught. Websites and pages don’t automatically join Google’s search. Google deploys digital spiders to crawl the web looking for new pages and content, and then the search engine indexes those new pages, or adds them to it search capabilities.

Some creators intentionally hide webpages from Google’s spiders or prevent Google from using those pages in search. In fact, this is a good SEO tactic if some of your content is lower-quality or non-vital to the user’s experience of your website, like archives of tags. Then again, many more websites accidentally prevent their pages from being indexed through shoddy coding. Unfortunately, you can’t tell your website developer to fix the problem because they don’t know what pages to index and what to leave hidden from Google.

If you are wondering what an SEO company is for, it’s knowing the difference between webpages that should and shouldn’t be indexed. You should work with an SEO agency to help you with indexing your website properly, so the right content has the chance to rank on Google’s SERPs.

2. Your Pages Are Competing Against Each Other

Many SEO DIY-ers use a tool like this one to research viable keywords, choose a couple relevant phrases and integrate those keywords into every bit of content on their website.

This strategy is called keyword cannibalization and it is not an effective strategy for getting multiple webpages on your site to rank. Instead of competing against other sites, your pages compete against one another, hurting the chances of all pages involved at ranking high on Google’s SERPs.

The solution is to create a keyword map, which will help you identify which keywords are used on which webpages. Then, you should strive to diversify not only your keyword phrases but also the topics of your content, so you avoid overcrowding. Again, you should work with SEO professionals to choose the best keyword phrases for your pages and compete with other websites, not only yourself.

3. Your Content Isn’t Structured to Google’s Liking

The number of backlinks to your website matters. The quality of your content matters. However, these factors matter a bit less if your content isn’t taking the right form.

Consider this example: You spend days developing a comprehensive, 3,000-word list of the best travel destinations for this year, replete with a few stunning, high-res images of a few destinations—but when you publish it, it doesn’t come close to ranking.

That might be because Google only deems content of this sort acceptable when they take the form of an image gallery with minimal text. You can determine this with a bit of research using keywords similar to your content, like “best travel destinations 2020.”

However, the differences in format between what you publish and what Google likes might be all but indiscernible to the average web user. Thus, you should rely on an SEO pro to perform thorough research on content styles before proffering instruction on content development.

4. Your Website Speed Is Embarrassingly Slow

Surprising to many SEO DIY-ers, website speed is one of Google’s top-ranking criteria. Google’s spiders don’t like wading through a slow website, and users hate waiting for pages to load, too. Thus, Google knocks points off websites that aren’t prioritizing haste and hustle, and that goes double for mobile.

SEO isn’t the only reason you should invest more energy into increasing your website’s speed on traditional and mobile platforms. Research shows that users will only wait about three seconds for a page to load before bouncing in search of a swifter page. Slower pages don’t just rank lower; they also are less likely to cause conversions because of their subpar user experience.

Yet, increasing speed isn’t as easy as it sounds. Typically, you need to tinker with exceedingly technical aspects of your site, like compression and code optimization, caching and content distribution. A simple speed boost comes from reducing the size of your images. Still, it helps to have a pro on hand to help you optimize your website for speed without compromising its quality.

Ostensibly, you can manage basic SEO on your own—but when your business encounters obstacles in its efforts to rank, you shouldn’t try to solve any problems without professional help. Your website is simply to valuable to harm with shoddy SEO practices.

This post was originally published on the EO Global Octane Blog.

Leading Change as a Female CEO

Entrepreneurs’ Organization (EO) is proud to support International Women’s Day (IWD), which celebrates the social, economic, cultural and political contributions of women. With robust female-focused initiatives and a longstanding history of empowering women leaders, EO upholds the mission of this global program every day.

Terry Segerberg is an EO member in Cincinnati, Ohio. As the CEO at a manufacturing company, Mesa Industries, she is often the only woman in the room.

She shares her perspective on breaking habits, women’s strengths and motivating a new generation of female professionals.

I have been the lone female in the room for my entire career. In the past two-plus decades, this was because I chose to return to my family’s business and assume the leadership role. We serve the petroleum and construction industries, neither of which have traditionally been known as places for females.

That said, as I step back and look around our offices today, we have more women than when I started.

Breaking Habits

Twenty years ago, women often were limited to being the secretary at the front desk. While women seem to be well suited for the role of greeter because they tend to relate to the people walking in the door or calling on the phone, for us, this role has evolved. It probably happened because I saw myself doing that job, and saw that secretaries could do so much more if we gave them more tools and left them to their own devices.

The role did grow and these women became people we all rely on for so much. No one is getting anyone coffee these days.

Yes, this change happened because I came along and valued a female as much as I value a male. It does take someone to lead the change.

I remember a meeting where we were setting salary guidelines. The goal was to focus on the position, rather than the person in the position. It didn’t take long for that to fail and for one of the men in the room to protest a female’s compensation because he thought it was too high—after all, she “did have a husband who had a job.” Well, after I stopped choking and was able to breathe, I reminded him that he had a wife with a job.

Old habits are hard to break, but it can be done with a conscious effort embraced by all. Today I believe the average workplace is much more sensitive and safer for women than it was 20 years ago, but it is still not perfect. Part of the problem is that many women don’t know how to advocate for themselves. Men do it and women don’t.

Natural Multi-taskers

Women underestimate what they bring to the workplace. They are natural multi-taskers and it always amazes me how adeptly they can have a conversation with one person while continuing with a project they were working on. I watched one woman have two different conversations—one with me—while assisting another person with a transaction, only to find that in the middle of all that she had researched the name of a business I was talking about but couldn’t remember and had emailed me its name and new location. All at the same time!

Left alone, women can see the questions coming, asses the challenges and propose solutions. It is just something that comes naturally to our gender. As a mom, I knew that I had to see things coming before they arrived with my children. I do believe that women are somehow wired differently even if they choose not to have children.

In our organization, women excel in roles where details matter. They are favored by our customers. At times, our customers prefer to speak with females over their male counterparts. The women have created processes and other tools to make their tasks easier.

The tradeoff is that I am seeing our females working longer hours and perhaps dealing with more frustrations when others aren’t being supportive. I don’t think they have completely found their voice in expressing frustrations. Again, they may not know how to advocate for themselves and when they do, they can be labeled a “b*tch.”

For all of the above reasons, having females on leadership teams and as managers is a great benefit. They simply look at problems differently. They view the challenge from the solution, backwards. It’s not necessarily a better approach, but at times you need a quick solution and working backwards does that.

Recently, my human resources manager came to me with a pretty ugly situation. As soon as she finished reporting the problem, she gave me two viable solutions. She was calm (calmer than me) and prepared to take on the challenge no matter which path I chose. I think many women can see the outcome and find the path quicker than men simply because they isolate the challenge from everything around it.

Inspiring the Younger Generations

I am watchful and concerned for the younger women, especially the Generation Zers. I realize that we have a new challenge and obligation to them. They are wired so very differently—and perhaps there’s a pun intended, since they are the most connected generation. They communicate differently and, importantly, respond differently to the social interactions in the workplace.

While it was somewhat easy to assign projects to their older colleagues and check it off your list as a manager, younger women (and men) require an entirely different approach. They need frequent reassurance that they are progressing as you had anticipated. Their view of the world is not rosy and so in the workplace we need to be mindful to help them find the positive in what they give and do.

We must respect them and not measure them by our yardstick. They hear a different drummer and we must work harder to hear that drummer. Gen Z and Millennials together represent over 50 percent of the workforce. To not recognize that they tick differently and expect them to play by the old rules is foolish.

I know that these younger generations want to work for a company that truly has a social conscious and that they are very clever in utilizing technology.

Even so, we have traditional needs, as does every company. We need someone to do the bookkeeping, get invoices out and manage inventory. These are essential to any business, but I find they can be seen as “boring” by younger employees. We make an effort to make it fun by providing an upbeat work environment. We are also exploring ways to cross-train as a means of supporting coworkers and providing variety in the workday.

Our rising leaders and future entrepreneurs face a similar challenge. They, too, must find a way to engage a younger workforce to ultimately run an organization that inspires people to want to work for while simultaneously maintaining an age-old business necessity: profitability. It’s a longstanding challenge that I anticipate they’ll tackle with unique solutions.

This post was originally published on the EO Global Octane Blog.

Where to Turn for Financial Support During a Crisis

Written by Ami Kassar, CEO and founder of MultiFunding.com and an EO Philadelphia member. As an expert on access to capital for entrepreneurs, he is committed to ensuring that business owners have the best possible access to the capital structures to help grow and manage their businesses. This article has been edited from a version that originally appeared on Inc.om.

Are you a business owner, entrepreneur or startup founder who is concerned about the impact of the coronavirus oncash flow and business continuity? You are not alone. And there are several financial options to consider to get through the challenges.

I have been asked by many business owners about the emergency Small Business Administration (SBA) coronavirus loans. As we wait for information to become available about this program, some historical context may be useful.

The SBA does, and has historically, issued loans in emergency situations, such as hurricanes, fires, tornadoes etc. What makes these loans different from regular SBA loans is that they are issued by the government—not the banks. And while the interest rates are low and the repayment terms are favorable, the application process has historically taken months and is often unpredictable.

As the impact of COVID-19 continues to grow, it is important to know that regular SBA loans are still available through banks and we have not seen any changes in their underwriting yet.

Traditional SBA loans are still available, and often easier to apply for

The application process for regular SBA loans is simpler if you are applying for US$350,000 or less and have the historical cash flow to support the payment.

These loans amortize over 10 years and the interest rate is 7 percent. There are no prepayment penalties, and no lien on a house—if the loan is US$350,000 or less. While the lender will take a lien on your business assets, it is willing to sit in second lien position behind other loans. It is also important to note these are term loans instead of lines of credit, which means you start paying interest on the full balance immediately.

Another option: Line of credit

In addition to SBA options, you may want to approach your bank about a line of credit, or see if you can get a home equity line of credit against your home.

You should be extremely careful of online lenders offering loans or advances with quick paybacks. While they may be appealing for their simplicity, they can rapidly become a bigger problem as daily payments can drain your cash flow.

Filing your taxes now could help speed up the approval process

If you are interested in one of these loans, it would be wise to file your 2019 tax returns as soon as possible, as this could make a difference in being approved. Ninety-plus percent of business loans, including lines of credit, equipment loans, government lending, senior debt instruments, commercial mortgages, and even asset-based lending (at reasonable rates) will require tax documentation.

With the path of coronavirus everchanging, the situation is fluid. In my company, we advise business owners on a daily basis about SBA loans as well as other borrowing options.

Ami Kassar is a three-time recipient of the Small Business Influencer Award as well as the Small Business Advocate Award. He is the author of The Growth Dilemma.

This post was originally published on the EO Global Octane Blog.

Four Ways to Successfully Lead a Remote Workforce

Written by Larry Prince, CEO of PrinceLeadership^TM. A version of this article originally appeared in New Jersey Business magazine.

The current health crisis has thrown our world into disorder. No longer can teams stroll into work ready to interact, exchange ideas and take care of business. We’re leading our businesses through uncharted territory. By now, most of you have set your employees to work remotely.

Let’s explore best practices to make remote work function as seamlessly as possible.

Knowing that companies already do this successfully should make you confident that your company and your employees will adapt to these changes. The key is to prepare your people for a smooth transition, by adhering to four leadership practices.

4 Tips for Leading a Remote Workforce

1. Be present: Keep in mind that your people are socially removed from their peers. So, check in frequently. The idea is to be a source of comfort and business focus—and not to micromanage. Set up a consistent phone or video chat schedule with each person and as a team.

Learn how they are doing. Ask—what they need to be successful, while not in the office. Ask—their input, to develop new ideas and solutions enabling business to move forward. Think through how best to coach each person individually.

Here is what the CEO of a home health company did to facilitate the process. “I set up morning huddles with my management team. Connecting each day at the same time will keep us focused, allow me to know what is going on with my people and provide them an opportunity to share with each other.”

2. Reinforce the organization’s purpose: Companies with a strong sense of purpose are sustainable companies and tend to weather uncertain times.

Reinforce your organization’s values, goals and core mission and how this purpose supports your people, your community, your customers and your business. This will ground your people and team in what is most important—a common cause aligned to achieve specific and measurable goals.

Doing so helps to set priorities and make better business decisions—and to keep your culture in motion.

A director of retail store sales addressed the issue with his staff by reviewing their mission and values. The exercise reinforced for them that the community needs them and the products they provide. He added, “We bring value. Rather than taking a passive position, we are now actively engaging our customers online.”

3. Clarify roles and expectations: Your people are now working under unfamiliar conditions—and removed from their colleagues. Ensure that they’re absolutely clear about their role, responsibilities and expectations, since you are not with them each day in person.

Standardize expectations by developing and communicating guidelines for working remotely. Also, review and update workflow processes.

A director of operations for a charitable organization offered this analysis: “I recognized that working remotely is throwing off my people’s focus. We regrouped and spent extra time ensuring each person is absolutely clear of what to do, why it’s important and how to do it from home. The details matter—and process matters.”

4. Support employee connectivity and communications: Create ways for employees to connect with each other. For example, set up commitment partners—teams of at least two people who are responsible for specific actions and problems to solve. Each team reports back to their peer teams with practices they have learned along the way. This will elevate teamwork and lessen the sense of isolation.

In addition, set up clear communications channels between employees and with management—create the why, what, how and when to keep each other informed. This is another way of maintaining your culture and maximizing employee productivity and satisfaction.

The COO of a health care company devised this solution with the help of his consultant. Since they are categorized as an essential business, they created three teams: Team A and B rotate days in the office and team C, about half their workforce, will work exclusively from home. This provides a blend of what is right for the community, their employees and for the business.

Along the transition path, learn what is working and what needs adjustment. This will strengthen your chance of making it through to the other side. By following these four proven practices, you are helping your people, your community and your business achieve transitional success.

Don’t be surprised at some future point to find yourself a stronger organization.

Larry Prince is the CEO of PrinceLeadership, a New Jersey-based business consultancy that works with middle market companies to create growth and sustainability. You can reach him by emailing: larry@princeleadership.com.

This post was originally published on the EO Global Octane Blog.

How to Project Cash Flow to Forecast the Impact of COVID-19

As uncertainty swirls around how long the COVID-19 crisis is going to last, many businesses are temporarily shuttered. The definition of “temporarily” is yet another unknown. Without knowing how long the crisis will continue, it’s critical to get a handle on your company’s funding needs.

We spoke with Greg Crabtree, chair of EO@Wharton Executive Education program, to gain insights on how to plan during these uncertain times.

Greg Crabtree is a speaker, author, entrepreneur and financial expert. Greg founded his own firm, Crabtree, Rowe and Berger, to focus on helping entrepreneurs build their economic engine. After being named to the Inc. 5000 list for 2019, Greg’s firm merged with Carr, Riggs & Ingram CPAs and Advisors, a top 25 U.S. accounting firm, ranked by Accounting Today. Greg is currently the organization’s partner-in-charge of their Huntsville, Alabama office.

In 2011, Greg’s first book, Simple Numbers, Straight Talk, Big Profits shares his core principles of how to turn your business into a wealth-building engine. In 2014, Greg contributed a chapter to Verne Harnish’s book, Scaling Up on how to improve profits though labor efficiency. In 2020, Greg will release his newest book, Simple Numbers 2.0: Rules for Smart Scaling.

What can entrepreneurs expect to learn from your presentation, “Simple Numbers Crisis Cash Flow Process”?

This presentation teaches business owners how to turn their projected profit and loss (P&L) into a cash flow forecast to project cash impact from the COVID-19 virus. The presentation is divided into two videos: Video 1 covers the basic planning concepts. Video 2 goes through case studies and instructions on how to use the templates to benefit your business.

My goal in making these videos is for entrepreneurs to be able to own your own data, own your own existence, roll up your sleeves and make a 90-day plan and/or a 180-day plan for your business so you can evaluate the cash required to move forward.

In your experience, what’s the top misunderstood financial-related function around running a business?

Entrepreneurs struggle to understand how their balance sheet connects to their P&L. By taking the traditional balance sheet and turning it into the Simple Numbers Capital format, you will better understand what parts of your balance sheet impact your cash flow. Once you understand the impact, you will be better prepared to influence key items to improve cash flow.

It’s important that entrepreneurs understand that profit is very different from cash flow:
• Every business model has a distinct profit and cash flow signature.
• In a crisis, you must have a keen understanding of when profit turns to cash.
• Expect a disruption of normal terms (expect to get paid slower, but you may have to pay faster)

Why is it so crucial for entrepreneurs to understand their cash flow and balance sheet now more than ever?

During economic disruption, customers will take longer to pay and vendors will need to be paid faster. You must factor these key changes in normal business terms to accurately predict cash flow, which is the lifeblood of a business.

Profitability and cash flow are two wildly different things. This is a time when you need to be in touch with how things move in your specific company. Entrepreneurs need to understand their Balance Sheet—not just the P&L. We’ve come up with a way to show you how to do that, which we detail in the videos.

We don’t know how long this crisis is going to last. With the current stay-at-home orders in many areas, most businesses need to prepare for a hard 90-day plan.

Some companies will need to make a 180-day plan. If the spring and summer months represent their selling season, they may be at a loss through January of next year. Hopefully most businesses will be through this in 90 days.

Once you create your 90-day plan, you can evaluate the cash required. How will you find it? Is it readily borrowed? Is it worth it to keep the doors open? Unfortunately, some businesses may be better off to “go dark” until this crisis passes—though hopefully more will choose to press through.

How can understanding these concepts help leaders better prepare for the impact of COVID-19?

Going through a formal cash flow analysis will give you a quantification of impact. Some business owners will over-estimate and others will under-estimate, but rarely will your gut estimate match the actual quantification.

We share more in the second video, but a preview of the exercise entails the following steps:

• Plan out monthly gross margin. Notice that we don’t say plan out revenue. For example: the restaurant industry. If your business is based on liquor sales as well as food sales, you’re not going to have the same margin if you’re only doing carry-out food. Gross margin equals your revenue minus the cost to get your product sold, not including labor.
• Consider non-labor expenses. Identify which expenses you can turn off or delay: Facilities? Rent? Discretionary expenses? With apologies to my marketing friends, you’ll likely be the first expense to be cut—but you’ll also be the first to come back once we resume business.
• Consider direct labor expense. Which employees do you absolutely need to produce your gross margin? As you consider this expense, be careful not to destroy the incredible teams you’ve built.
• Look at management labor last. You have to have a management team, but those are some of the higher-paid people. Can you make temporary pay cuts? Or suspend their pay?
• Evaluate resources and runway. Consider your cash position, access to debt, investors and disaster loan assistance. Decide if you can support more labor at full or reduced pay, or if you have to cut faster and harder than you originally thought.

I advise entrepreneurs to go through this formal exercise to let the data tell the story, rather than trying to manipulate the data into the story you want it to tell.

What action steps can entrepreneurs take to prepare their financials for scaling back up after the crisis?

Once you understand how profit percentage compares to trade capital percentage, you will be better prepared to make funding decisions, if needed, once the marketplace begins to recover.

Having a healthy understanding of how cash and product move within your business is a benefit to every business owner, both now in times of crisis and in the everyday management of your company.

Greg is currently partner-in-charge of the Huntsville, Alabama office at Carr, Riggs & Ingram CPAs and Advisors. As an EO member, Greg has chaired the EO@Wharton Executive Education program for the last five years and plans to launch a new Executive Education program for EO in 2020 called Functional Finance for Entrepreneurs that will teach any entrepreneur the basics to understand their financials and use the data to drive exceptional business performance and value.

This post was originally published on the EO Global Octane Blog.

Innovation Through Crisis

Written by Ruchir Punjabi, the co-founder and chief digital officer of Distributed Energy, a company that matches investors with renewable energy projects across Africa, Middle East and India, and the founder of Langoor, which was sold to Havas Group in 2019. He is also a member of the Entrepreneurs’ Organization (EO) UAE chapter.

A version of the following article originally appeared on Entrepreneur Middle East.

There is a popular meme circulating these days that asks, “Who is responsible for your company’s digital transformation?”

CTO
CEO
COVID-19

As this joke shows, most businesses are struggling to evolve in the current environment. But as every entrepreneur knows, every crisis offers opportunities, and this one is no different.

Before I go into considerations for surviving the current situation, I want to talk about self-care. We all know what the issues are. To analyze, plan and get on top of this, we need to ensure that we are healthy, safe, and in a good mind space.

Establish routines, talk to as many people as possible, and make the most of the current situation. Most importantly, focus on things you can control.

Empathy and decisiveness are the two key qualities that a crisis like the COVID-19 outbreak needs. Your ability to empathize with people in your business and your key relationships will ensure support and loyalty. Decisiveness towards survival, and later investing, will move the needle forward.

Cash Is Everything

For entrepreneurs, cash is everything right now. There are seven places where you can look for cash in your business:

Price
Volume
Cost of goods sold (COGS)
Overheads
Accounts receivable
Inventory
Accounts payable

It is crucial that you work out—given your current revenue and funding (equity + debt) availability—your scenarios, and establish a path forward to optimizing cash. Without knowing your runway, the rest of what I am about to say falls flat.

I’m involved with a few boards where we have taken a position of revenue-centric spending. Once we have optimized the expenses and on top of our cash position, we have decided to limit our spending to what will generate revenue—now or in the future.

In the now, revenue is about generating leads and retaining clients. To do both, a company needs a customer relationship management (CRM) platform. If you don’t have one, spend the time to set one up inexpensively, and load it with all your customer information.

If you don’t have visibility of your pipeline of clients, you are operating blindly. Pipeline, ultimately, makes every business thrive.

Once a CRM is set up, first think about how your customers are doing. Empathy for your customers right now will go a long way. Help them with a service or product that they need, regardless of whether you will make money or not. Your support in these difficult times will go a long way in retaining them for life.

Engaging clients through knowledge sharing, thoughtful ideas, and proactive support will build a strong, long-lasting relationship.

Focus on Growth and Innovation

The other aspect of the pipeline is growth. Can you increase customer lifetime value (LTV)—meaning, can you increase how much they spend with you over time, and can you create new leads for your business?

There are a range of marketing channels that cost money, and there are many that do not. You can use the time to optimize your owned media, such as social media, newsletter, blogs, or to even start new content channels like webinars and podcasts. You can pay for ads through Google and social media, but focus your spend on customer acquisition as much as possible.

For the future, focus on business model innovation. If your business has taken a beating given the sector that you are in, is it possible to innovate out of this crisis?

Primarily, there are three levels of innovation: incremental, sustaining and disruptive. Before elaborating on the innovation, are you clear about your business’ purpose? If you don’t know why you do what you do, the rest of this article may not make sense. If you are clear about the why, the what and how can adapt rapidly.

Incremental innovation can be something as small as using what you currently have as products and services, and focusing on sectors that are doing well during this time. A range of essential services like healthcare, e-commerce, gaming, telecom networks, and so on, are thriving right now. Do you sell something already that these sectors need from you?

A good example is how hotels are currently offering “quarantine zones” to a range of governments around the world. My former digital agency is focusing on leveraging their B2B clients’ events budgets and helping them reach their customers digitally.

Sustaining innovation means adding a product or a service that complements what you do, but is not part of your offering right now. This is where you pivot your business towards serving a market need that you see, that you know how to deliver, and that will need to make business changes.

For example, my energy business matches investors with renewable projects. We are now going to launch a fund for renewable energy, so people who are out of the stock market can invest in a different, long-term annuity style product that offers a stable and high return. We will launch this as soon as people have a bit more faith back in the economy.

Disruptive innovation is what most people mean when they say innovation. Such innovation usually turns your business upside down. Disintermediation has hit most industries hard in the last decade. What can you do today that will kill your own business model? This is a much more bitter economic pill, but there has never been a better time to do it. The opportunities for disruption often don’t just hurt your business but disrupt the market on the whole with a completely new product service.

We have many examples of existing businesses that have achieved this such as with Apple iPhone and Netflix amongst others.

Lastly, not all innovation is technological—often, it is business model innovation. Fundamentally, the change is about delivering value. The transformation can also be in the order I outlined where once you embark on the journey, through a range of experiments, you reach the outcome you’re after.

A considerable part of this will feel like hell until you try a range of experiments and discover some working. Eventually, they become habits that work and adapt your business to sustain through the crisis. There are many resources available online that help dive deeper in what I have shared.

Getting a grip on your business first is the top priority. If you don’t have cash, how can you get to a place of stability first? If you already have stability, then this is an amazing opportunity to transform what you do, and thrive for what is certainly going to be a changed world after this crisis.

Ruchir Punjabi has been an EO member since 2014. For more tips on surviving the global crisis, visit the #EOTogether platform.

This post was originally published on the EO Global Octane Blog.