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They make you feel like you're the bad guy when you expect them to do their own jobs.
Probably the most difficult to manage employee (or coworker) is the "people pleaser." If a job candidate uses the term "people pleaser" to describe himself or herself in a job interview, do not hire that person.
When somebody says "I'm a people pleaser," it's always with an air of apology, as if they're embarrassed that they sacrifice so much to make others happy. The remark, however, is a self-compliment masked as self-deprecation.Understanding How They Think
People pleasers proudly position themselves (both publicly and in their own minds) as selfless and considerate, when in fact they're self-absorbed and controlling.
People pleasers pretend to be interested in other people's feeling but they're actually obsessed with how other people should feel about them, which is the exact opposite concept.
People pleasers take actions they believe you should appreciate, regardless of whether you have asked for those actions or not. They then expect you to be grateful for favors rendered and resentful if you ask for something else that you actually want.
For example, a people pleaser might stay late working on a report that's not due (or needed) for a week and then hand it in early because "he knew you would appreciate having it early."
To the people pleaser, it doesn't matter whether or not you actually wanted the report early. To the people pleaser, you now owe him something because he's worked overtime to "please" you.
Therefore, if you assign that employee a difficult project, he will accept the project (to "please" you, of course) but feel justified in doing a slipshod job because (after all) he "worked overtime and didn't even get a 'thank-you.'"
Here's another common example: the person who appoints herself as the office morale booster, spending large amounts of time and energy on birthday cards, anniversary gifts, snacks in the break room, etc.-- rather than doing work that actually needs doing.
In the opinion of the people pleaser, you should feel grateful that she's raising the morale of the organization, even if you believe that her efforts are a distraction from what you want and need done.
Later, if you present the people pleaser with a less-than-glowing performance review, she'll be surprised and offended because (after all) she's "given so much to this organization."
Despite their belief that they're trying to please other people, people pleasers are always working their own agenda while simultaneously trying to make others feel indebted.
For instance, the employee who handed in the (unneeded) report early may have done so because he wanted to clear his calendar. Similarly, the office morale booster undoubtedly enjoys socializing more than doing actual work.How to Deal
If you're not aware of what's going on and you genuinely care about the people who work for (or with) you, it's very easy to get caught up in the people pleaser's skewed viewpoint. They're very good at veneering their desires with ersatz martyrdom.
If you find yourself stuck with a people pleaser, the only solution is to be blunt and very specific about goals and measurements. This can be difficult if your corporate culture assumes that self-motivated people will do the right thing.
A huge word of warning: if you ever feel "guilty" or "demanding" when setting goals for the people pleaser or holding his or her feet to the fire, you're getting caught up in the people pleaser's head game.
As I said before, the easiest way to deal people pleasers is to not hire them. If you're stuck with them, set up up circumstances so you can move them out of your organization if they can't change their behavior.
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There's a myth that having a family and running a company are incompatible, but here are 3 reasons why kids can be a business advantage.
As a mother of two (with a third on the way), who started both a company and family at the same time, I'm always eager to dispel the myth that having a family will set back your business. This is constantly a topic of focus in the media regarding women-owned businesses (as if men don't have kids too), which make up only 35% of the total entrepreneurial population. Who knows how big that percentage might get if women felt like starting a family was an asset, instead of a conflict, with launching a business?
In fact, there are reasons why creating both a family and jobs go hand-in-hand:
1. Family-Owned Businesses Have a Bright Future
Family-owned businesses account for 50 percent of U.S. GDP, generate 60 percent of the country's employment and account for 78 percent of all new job creation. When you have children, you're potentially creating a succession plan for your company's future generations. And that's good for your company: family-run businesses have higher levels of employee loyalty, because they often treat non-family as if they were family. This means that when tough times occur, they are less apt than traditional corporations to do mass layoffs just because of profits.
2. Having Kids Opens Your Eyes to New Markets
When you become a parent, your business management thinking starts to change, in terms of who, what and how you prioritize. Your consumption habits change as well: Thinking about others' well being--most notably our offspring--enables moms, with an estimated $2.1 trillion in spending power, to influence 85% of all purchase decisions. As you begin to buy differently, you'll see new gaps in the market.
Take, for example, Brooklyn-based organic bread mix company Baked Better, co-founded by female entrepreneur Justina Hierta out of the need for better and healthier bread that is easy to make. Thanks to my angst in trying to be a better mom, Baked Better inspired me to bring my baking in-house versus buying from the store. But it's an area of the market I'd never have known about if I didn't have kids.
Or consider Texas-born entrepreneur and co-CEO of U.S. Virgin Island's Blue Shore Grill Restaurant Group, Nicole Boswell-Horstmeyer. Based in Saint Thomas, Nicole wasn't afraid to build her restaurants and her family simultaneously. But what's most special is her ability to go beyond just offering food to also making a difference. Her flagship restaurant, HAVANA BLUE, recently established a groundbreaking local farming initiative, sourcing from and benefitting the indigenous Caribbean community, allowing diners to eat well and indulge a bit, all while giving back to the local economy in the process.
3. Making Babies = Making Money
Last month, Nick Drydakis, a fellow at the Institute for the Study of Labor and economics lecturer in the business school at Anglia Ruskin University in Cambridge, England, revealed that people who have frequent sex tend to be happier and have higher self-esteem, as well as better reasoning ability. Better reasoning ability ought to lead to smarter business decisions and therefore to higher revenue for your burgeoning enterprise. While, of course, causation versus correlation isn't as clear, at the end of the day, there's a real relationship between more sex and more money, leading to higher financial returns. So the more actively you're trying to get pregnant, the more of an improvement you may see in your bottom line.
If you've been using your business as an excuse to delay having a family, it might be time to rethink your strategy. So go forth and get busy (making money)!
Researchers looked at the effectiveness of coping tactics for entrepreneurs.
Taking time away from work has a positive impact on entrepreneurs’ psychological well-being, a recent study found. But there’s a catch: the coping mechanism seems only to benefit experienced entrepreneurs.
The study, led by the University of Colorado Boulder, included survey responses from 156 entrepreneurs. The researchers classified those who had previously been involved with at least one startup as “experienced.”
“No one has really studied whether experience in a venture actually helps in coping, so these are new and somewhat surprising findings,” Maw-Der Foo, co-author of the study and associate professor of management and entrepreneurship at CU-Boulder’s Leeds School of Business, said in a statement.
Foo suggested that taking work breaks backfired on inexperienced entrepreneurs because they felt guilty about stepping away, causing them to become even more stressed.
For the study, entrepreneurs’ psychological wellbeing was assessed using their answers to questions like “Have you recently been able to concentrate on whatever you were doing” and “Have you recently been losing much sleep over worry?”
Participants were asked about the extent to which they had used two different coping mechanisms to deal with the daily startup grind. One, called "avoidance coping", involves stepping away from a stressful situation and going out to see a movie, for instance.
The other, called "active coping", requires facing the problem head on. Foo said a future study might look at factors that predict stress for entrepreneurs and the ways that they can cope.
Nobel laureate Daniel Kahneman says that if you rationally weighed the odds of success, you'd never start a business. Thank goodness for irrationality.
An expert on negotiating warns the GOP that they are playing a very dangerous game. Let's hope they understand the rules.
This weekend House Speak John Boehner talked with George Stephanopoulos about the debt ceiling and the government shutdown. The tonality was clearly one of brinksmanship. Indeed, brinksmanship has dominated the Washington dialogue for a while now. It has become part of the lingua franca of American politics.
Even though “playing chicken” like this is a risky venture, many leaders rely on it to get things done. This brinkmanship mindset, with the dramatic emphasis on the cliff, is one way that leaders, in frustration and desperation, use crisis as a way of forcing action. Brinksmanship can move agendas that could have stagnated otherwise. In politics, as is presently the case, parties not in the majority can use brinksmanship as a way of enhancing their power. Leaders can use brinksmanship as a way of bringing attention to themselves.
Leaders who use brinkmanship have to be very careful, tactical, and strategic. Misused, it can have precisely the consequences that everyone is working to avoid. And even when you play the brinksmanship game brilliantly, there are still permanent costs that you must be willing to pay.
So Before you use brinkmanship as a call to action or as a way to force a decision, keep the following eight points in mind. (And pray that the politicians in Washington are doing so now.)
Make sure there really is a cliff. If you try too often to stir up panic about the impending doomsday, your leadership credibility will suffer.
Do not bluff. Although bluffing is a useful negotiation tactic in many circumstances, it is not part of the brinkmanship strategy. In the do-or-die scenario, the cost of having your bluff called could be catastrophic. You may be forced to go over the cliff and live with the consequences.
Keep the collective interest in mind. For brinkmanship to be effective, you need the support of those who will be affected. It is critical that stakeholders and supporters do not see brinkmanship as a self-serving exercise in opportunism but rather an effort to solve a problem that negatively affects all parties.
Avoid creating a panic. Hanging out too long at the end of the cliff without coming to a deal may create anxiety and panic, which can have the same result as going over the cliff. That is, you may unwittingly create a stampede that takes all parties over the edge.
Don’t use brinkmanship on small issues. If something can be solved fairly easily and creates a win-win, don’t create a false crisis. That's not the way to the best outcome.
Don’t be taken by the short-term drama. Don't let yourself get drunk on your own rhetoric. The confrontation may give you a sense of empowerment, but you must be aware that this drama is short-lived.
Remember, over the cliff you have no allies. Once you’ve gone over the brink, your supporters will only remember who was responsible. They will forget their prior alliances.
Finally, even if you never go over the cliff, there is no coming back from brinksmanship. Things will never be the same. Going to the brink inevitably raises doubt about your leadership capacity. Foes and allies alike will begin to question your leadership capability. If you are a good leader why did you have to go the brink? Sure, the fanatic few who may get an adrenalin rush and admire that you stood the barricades may not question. But most will ultimately ask, “Why did you take it so far?”
After this debt ceiling storm, in quiet reflection, this is the question many will ask. It will be interesting to see which players will pay the price. But someone will. Hopefully, next time few will play “Chicken” on the brink.
Like many entrepreneurs who don't know any better, in the beginning he did everything wrong. In the process, Tom Clancy did a number of things spectacularly right.
When you think of some people, you may not think of them entrepreneurs--but they are.
In the 80s (yes, I'm old) I was a machine operator at an R.R. Donnelley book manufacturing plant. A fringe benefit of the job was getting to read books before they hit bookstores.
We weren't allowed to take books home, but a good operator could get a lot of reading done: On long runs the job mostly involved periodic quality checks, so if you cut the backbone off a kill book and discreetly placed a few pages at a time in a strategic spot, you could read under the Universal Theory of Flexible Supervision, which states that, "If you're getting your job done and don't make it obvious to everyone else we'll both just pretend that's not happening."
(Tell me you don't sometimes follow the Universal Theory of Flexible Supervision.)
A few of us liked to try to predict which books would become bestsellers, especially those by previously unknown authors. Sometimes we missed, but--and this will date me, too--we did guess right on The Firm, Presumed Innocent, The Name of the Rose, and Rules of Prey.
Our plant also ran textbooks and non-fiction titles. Books from some publishers I could automatically ignore: Springer-Verlag published titles that to people like me, who were not on speaking terms with math and science, were totally impenetrable. Another, the Naval Institute Press, published really dry non-fiction nautical titles.
One day we were setting up to run a Naval Institute job and I thought the forklift driver had staged the wrong jackets. Hunt for Red October didn't sound like a Naval Institute title. But it was. Assuming any novel published by the same folks that published books like Battles of the Malta Fighting Forces (surely a real page-turner) I sarcastically thought, "Yeah, that one will do really well," and didn't add it to my to-read pile.
As memory serves, the first print run was 2,500 or 5,000. Not many at all.
A couple weeks later we ran another 5,000. Then a week later we ran 10,000 more. Then another 10,000. Then the book took off, partly because of great reviews but also because President Regan named it his favorite recent book. Somewhere along the way I read it, loved it, and read the author's next four or five books as soon as they hit our plant. (I even borrowed the "blues" for Red Storm Rising and read it before it even went to press.)
Hunt for Red October was an unlikely bestseller by an unlikely author. Tom Clancy had never published a book and the Naval Institute Press had never published fiction. (Clancy wrote a query letter to a Naval Institute Press editor and asked to deliver the letter in person; the editor, finding out Clancy was an insurance agent, the editor assumed he wanted a face-to-face meeting so he could try to sell him insurance.)
Since Clancy had never served in the military or an intelligence agency or held any government position, fact-checkers spent eight months going through the manuscript. (To their likely surprise, he got everything right.)
Tom Clancy was just a guy--but a guy who loved all things military and over time developed a comprehensive knowledge of weapons systems and technical minutiae. So like most people without advanced degrees or experienced mentors or serial failures to learn from, he did everything wrong: He spent nights and weekends, totally on spec, writing a tech-heavy military thriller when no one was reading techno-thrillers. He pitched a specialty press that had never published fiction.
And in the process he created a new genre, wrote or co-wrote over 50 books that sold approximately 100 million books, saw actors like Alec Baldwin, Harrison Ford, and Ben Affleck star in movies based on his books, and licensed his name to a series of popular video games.
Like many entrepreneurs who don't know better, he did everything wrong--and in the process did many a number of things spectacularly right.
Tom Clancy passed away last week. He was one of the most successful authors of the last few decades, but at his core he just a guy: A guy with a passion, and a dream, and the willingness to bet on himself and try the unexpected.
Just like you.
Could Apple actually sell 10 million iWatches in one year? That's one prediction. Plus--another screen to keep on your radar.
Each Monday, I cover the tech trends, gadgets, business services, and apps of note. The goal is to highlight not just consumer flash-in-the-pan ideas, but real developments that could impact your business. Post in the comments if you spot other essential headlines!
1. Samsung & Apple: Stolen Ad Concept?
Branding experts, this one is for you. Business Insider posted about the similarities between a new Samsung Galaxy Gear ad and one from Apple back in 2007. You can watch both ads at the link. Did Samsung copy too much from the Apple ad? There is a similar feel--both ads feature people saying quick phrases. What do you think? Side note: The Samsung ad is one of the best I've seen recently.
2. AirBnB Faces More Scrutiny in NYC.
New York City is demanding data from about 15,000 AirBnB users who may have started using the service to rent out apartments. (A law in the city says you can't rent out a space for fewer than 30 days.) My take: this is part and parcel of an app that actually does something new. Cities will have to deal with services like Uber and AirBnB that provide a legit service that also might shake up their industries in the process.
3. Should You Get on the iWatch Bandwagon?
If the rumors are true, Apple is about to release a truly time-shifting product called the iWatch. An analyst at Piper Jaffray is predicting the Cupertino tech behemoth could sell as many as 10 million iWatches in one year. That would beat the original iPhone by a wide margin--Apple sold about 6 million of the first-gen model in the first year (plus one quarter). The estimate is based on surveying about 800 customers.
4. Need Start-up Advice? Try Quora.
Quora is fast becoming more than just a place to ask questions about raising kids and finding a good place to buy a pizza. It's a respectable outlet for start-up advice from fellow entrepreneurs. One recent question about how to find a good business partner is chock full of concrete resources and is better than what you'll find in some MBA classes.
5. The Phablets Are Coming.
While you're considering what the coming onslaught of smartwatch screens might mean for your business, there's another screen you might want to follow: the phablet. Big phones like the Samsung Galaxy Note 3 do have one big advantage: they are so big that the battery can hold more of a charge and last longer. (Of course, the screen size also uses up more juice.) Now, CNET is reporting that the Google Nexus 5 will also have a 5-inch screen and a amazingly fast 2.3GHz processor. An event on October 14 will reveal the next big thing we already know about.
Maximize the potential of your most popular tweets by recirculating them (but don't just literally retweet yourself).
For brands or individuals on Twitter, getting a blizzard of retweets can be a coup--and a disappointment. There's nothing like the thrill of successfully engaging your fans, delighting them enough to share whatever you had to say or link. But you also know that only a portion of your audience saw your uber-shareable message. In that case, you might wonder: Can I tweet it again?
Tomasz Tunguz, a Redpoint Ventures partner and former product manager for Google's social media monetization team, had the same question. Tunguz, who focuses on consumer Internet, online marketing and digital media investments, decided to experiment with periodically re-upping some of his older tweets.
While his methods wouldn't hold up to peer review, the results should still intrigue anyone managing a social media account. For this experiment, Tunguz used his personal Twitter account, which has just over 10,000 followers. He chose 30 of his previously-used tweets to recirculate, using identical language each time, but varying the timing of attempts. "Sometimes it's a few days, otherwise it several months or even quarters," he explained over email.
Tunguz's results hint at two potentially useful discoveries. First, "each subsequent attempt gains about 75% of the previous number of retweets--a very encouraging metric," he wrote on his blog. This would indicate that the second or third tweets aren't likely to achieve the success of the original, but could still be worthwhile for driving attention.
What's really interesting is what Tunguz found by looking more closely. He noted that tweets with high initial retweet rates acted differently than those with low rates. "Recirculating a moderately successful post, one with about 2 initial retweets, results in about 2 more retweets. But recirculating a very successful post, one with on average 9 retweets, creates a cascade of another 4 retweets," he blogged. The numbers suggest that it's only useful to recirculate your most popular content.
While Tunguz is clear that his results may not be consistent for different publications or accounts, it seems like it might be a strategy for others to test out: Let unpopular tweets drift down the Twitter stream for good. But if there's something your audience really likes, recirculating it, even months later, may help draw noticeably more attention.
Have you tried tweet recirculation as part of your social media strategy? Has it been effective?
Jeff Hayzlett checks under the hood of CrossFit, MGM, and Dunkin Donuts on Bloomberg's new TV series.
A new TV show promises viewers a peek under the hood of some of America's most prominent companies. Jeff Hayzlett, best known for his stint as chief marketing officer of Kodak, hosts "C-Suite," premiering Tuesday, 9:30 ET on Bloomberg TV.
The first of eight thirty-minute episodes finds Hayzlett sitting in on a Dunkin Donuts board advisory council meeting, where franchisees share what they're seeing on the ground as well as their ideas. Company execs go through the suggestions, explaining which ideas will and won't fly. Some ideas are shot down for branding or economic reasons. Others are dismissed because the ideas run counter to the company's ongoing mission of steering consumers away from donuts and over to sandwiches and frozen drinks. After the meeting, Hayzlett interviews the executives about the role franchisees play in the company.
"We didn't set out to do a cheap entertainment show," says Chris Berend, the show's executive producer and head of video development at Bloomberg. "This is about getting in there and getting real advice from some of the real executives in the country."
Hayzlett was ideal for the hosting gig, says Berend. Hayzlett's experience at Kodak and as a small business owner (he owns the PR and branding firm, The Hayzlett Group) helps him draw more thoughtful responses out of executives.
Before filming each episode, Hayzlett pulled stories from Bloomberg's terminals and local reports. "Everything we could get our hands on," he says. Before setting foot at Dunkin HQ, Hayzlett boned up on the company's financials and its two failed expansions in California.
"We know those things walking in so that we can get right to the questions," he says. "They're not just in the business of making donuts, they're in the business of growing their franchises. And 99 percent of their leadership is new. I ask, What makes you think you're going to get it right this time?"
Most companies on the show should appeal to viewers because of their recognizable brand names, but Hayzlett says he gravitated toward those with a different approach to business and massive reach. "A company like Dunkin touches people all over the country in myriad ways," he says. Others include CrossFit, MGM, and the Seattle Sounders, a minor league soccer team.
The hope is that small business owners will come away from the show feeling their companies aren't so different from those in the big leagues.
There's not a huge difference between a restaurant in Sioux Falls and a publicly-traded restaurant chain says Hayzlett. "The only difference is the scale," he says. "Same problems, same personalities, just different numbers. You'll learn key things about honesty, about how to refresh the brand. How to take a brand new leadership team and mold them into a well-oiled machine. This is what a small business does every day. And this is what big corporations do. They're just doing it with more zeroes."
Congress is close to devastating America's shaky economy, its reputation around the world--and its small business owners.
The U.S. is just 10 days away from defaulting on the national debt, currently worth about $16.7 trillion. And with both Democrats and Republicans stuck on their political positions and unwilling to budge, it's like watching a car wreck in slow motion.
Over the weekend Congressional Republicans and Speaker John Boehner announced they would not raise the debt ceiling or end the government shutdown, now in its sixth day, until President Obama agrees to budget changes that would defund the Affordable Care Act. Obama has rejected that idea, noting that his signature health care act passed both houses of Congress and was approved in a Supreme Court ruling in 2012.
The internecine brinksmanship is bringing the U.S. government closer to a potentially cataclysmic economic event that could cause a financial market meltdown similar to what occurred in 2008 or much worse.
Debt Default Is Destructive
"No country in the world has ever voluntarily defaulted for political reasons, and the notion that the U.S. should do so when we are the foundational economy for the global economy is particularly irresponsible," says Robert Shapiro, a former undersecretary of commerce for President Clinton and a senior policy scholar at Georgetown's Center for Business and Public Policy.
A default would send both bond and equities markets into a freefall. It would also wreck the standing of U.S. Treasury bills, which currently have a Triple-A rating, the highest in the world, which has taken centuries for the U.S. to develop, experts say.
U.S. Treasuries make up the so-called safe part of investment portfolios held by institutional investors as well as small-time investors through 401(k) retirement plans or as a component of mortgages. Just as important, Treasuries make up enormous parts of some sovereign holdings. China and Japan each owns about $1 trillion in U.S. debt. In the event of a default these countries would be tempted to unload their holdings, causing bond prices to plummet, and interest rates to soar to compensate for risk.
A Default Could Devastate Small Businesses
A default would lead to increased borrowing costs for everything and everyone, including small business bank loans, credit card loans, and other forms of financing. It would be the end of the virtually free ride the country has had since World War II, in which the government has been able to finance its activities for almost nothing.
"No one would want to buy [U.S. Treasuries] and we will still need to raise capital from China, but under which conditions can we do this?" Laura Gonzalez, professor of finance and business economics at Fordham, says, adding interest rates would rise, and financing of all kinds would automatically become more expensive.
In short, we could wind up like Greece, with lots of sovereign debt nobody wants to buy, experts say.
And rising interest rates would cause an immediate drag on the economy, says Jonathan Citrin, founder and executive chair of investment advisory Citrin Group and an adjunct professor of finance at Wayne State University. Every 20 to 30 basis point move upward in yield on the 10-year Treasury could decrease GDP by 1 percentage point annually, Citrin says.
Rising interest rates would also work against the low-interest monetary policy established by the Federal Reserve, which Chairman Ben Bernanke has kept in play by buying bonds and maintaining the federal funds rate near zero percent.
What's more, the dollar would also weaken, and could potentially lose its place as an international currency, and one used to value commodities such as oil. While that may boost exports in the short run, the costs to the economy and to small businesses would be enormous.
Small investors are likely to abandon crowd-sourcing, banks are likely to stop lending again, except to the most creditworthy small businesses, and venture capital companies would have leverage to push company values down and their ownership stakes up, says Mitchell Fillet, a professor of business and finance at Fordham University.
"VCs will deploy their money but by using different models and at lower valuations, because they can," Fillet says.
And for small businesses that depend on Small Business Administration 7(a) and 504 loans for their businesses, "you could say goodbye to the SBA for a year," Fillet says. It would take that long for the SBA to get its house in order again and respond to the backlog of loans and loan requests. That could take $80 billion of small business lending out of the market, which includes the guaranteed and non-guaranteed portion of the SBA loans, Fillet says.
Default Threat Already Dents America's Global Reputation
The threat of default and the government shutdown have already begun to destabilize markets, and they've made small business financing harder to get. The SBA has been shut down since October 1, and since that time critical loans are not going out to small businesses depending on them to finance growth.
"There's a direct damage to small businesses every hour this goes on, because these are highly credit-dependent businesses," Fillet says.
Shapiro says that the closer the U.S. gets to the debt default without signs of a resolution, the more it will rattle markets.
U.S. markets fell on Monday, with the Dow Jones Industrial Average down nearly 1 percent to 14,936. The S&P 500, which represents a broader basket of companies, was also down nearly 1 percent to 1,667. The dollar fell against most major world currencies. The yield on the 10-year Treasury fell 0.01 percentage points on Monday to 2.65 percent.
As is true for anyone who borrows, credit rating is critical, and defaulting goes against the business ideals of nearly every politician in Washington.
"One of the greatest assets of the U.S. is the perception around the world for half-a-century that the U.S. is the single most stable, conservative, and reliable government," Shapiro, former Clinton commerce undersecretary says. "The value of this asset…is incalculable and loss of it will have a very longterm effect, and if we come right up to a default, markets will not forget this."
In 2013, businesses that adopted workplace competitions have been reaping the windfall. Pit your competition-hungry reps against one another and watch the magic.
Do you love to win, or hate to lose?
As a sales manager turned entrepreneur, it’s a question I’ve always asked my employees - especially sales reps. So, I was surprised to hear that very same question posed to tennis superstar Serena Williams in a recent interview. Her answer? The same as the hundreds of sales professionals I’ve asked over the past few years: “Hate to lose.”
The desire to succeed that we see in professional athletes, and that we learn growing up playing sports and games, is essential to sales. Are salespeople and professional athletes fueled by the same competitive spirit? Definitely. A sale is a game. To succeed at that game, and more to the point to avoid losing, you have to fight your way into a win. If you’re in sales, you’ve probably heard the line, “The sale starts when the prospects says no." That’s when the competitive fire kicks in.
Gamification: Work it or lose it.
Sometimes that competitive spirit gets lost. After nearly 10 years of building a strong sales team within ePrize, a large digital engagement provider, I realized something was missing. It wasn’t just our own sales team. Other VPs of Sales at other companies agreed that the competitive spirit was lagging.
I had an idea. Sales professionals are hypercompetitive people who get revved up by dynamic, real-time competition. Why not create contests and high-impact leaderboards to motivate them? I’m not talking whiteboards, spreadsheets, or CRM reports that are considered longtime motivational pillars in sales. (Frankly, they’re a giant pain in the butt to administer.)
I’m talking real-time digital leaderboards--the kind that offer options for personalization. That includes employee photo displays and engagement tools, such as audio splashes that demand attention when someone makes a big move in a competition. Whether on flat-screen monitors in central locations around the office, or on each employee’s iPhone, these leaderboards would surround entire sales teams, keeping individuals cognizant of where they, and their colleagues, stand in competitions--and motivating them to see their face move to the top. Some call it gamification. I just call it making things happen so you can hit your number.
We saw immediate results, with a 230 percent spike in sales.
It took us three months of around-the-clock work, but we created an app, called Compete, that we thought would do the trick. It runs within Salesforce.com and allows sales managers to design competitions based on very specific goals. Whether a manager needs to drive Salesforce.com adoption, or rally their team around key sales initiatives, managers could now build an engaging competition around that goal. They’d simply download the app by visiting the Salesforce.com AppExchange, and have access to creating as many competitions as necessary, for any given duration.
While at ePrize, we saw immediate and remarkable results with the app--a 230 percent spike in sales over one summer. It quickly became clear that we had more than a side project on our hands. We had a business to fulfill a market need. We hit a true gap in the market. We decided to build a new company around Compete, and established LevelEleven in October 2012.
Buzzword aside, the trend’s picking up speed as big companies adopt it.
I wasn’t the only one who realized the potential windfall of creating compelling workplace competitions to motivate sales teams. There were other players in the market tackling the same issue, including Hoopla,Badgeville and Bunchball, who called the trend "gamification."
Technically, LevelEleven falls under the category of gamification--but we’re sensitive about it. That’s because gamification has become a buzzword that describes slapping on badges and shelling out awards. And that falls incredibly short of what we and other players do to inspire sales reps and help teams get far beyond what they thought they were capable of.
Lately, the gamification trend has really picked up speed. In the past year, we’ve seen major corporations and businesses deploy gamification and CRM-based solutions across sales teams to drive better results. Aetna, Cisco, Comcast, OpenTable, and even Spotify are big brands using gamification.
We can all agree that regardless of the terminology used to describe it, the concept is sound. Running competitions within the workplace creates a fun and energetic environment. It helps make goals and incentives incredibly transparent. And it encourages people to change their behavior. Importantly, it makes a salesperson’s work visible to their peers and managers. You can’t beat the motivating force of that.
It worked for the Detroit Pistons.
Given that salespeople are ambitious and competitive by nature, you’d be smart to use that to your advantage, whether you’re a startup or a growing company. If you want to motivate them to focus on the right things and to drive your bottom line, take advantage of the software and app offerings available to make your gamification campaign as dynamic and seamless as possible. You can use competition to achieve anything from progressing your sales pipeline to making sure every contact record has a completed "industry" field. Competition in the workplace can provide serious ROI. Don’t believe me? Look at the Detroit Pistons.
Last summer, the Detroit Pistons’ ticket sales team was looking for new ways to engage reps day-to-day on key products they wanted them pitching and closing, all of which was tracked in their CRM system. They decided to use an enterprise gamification app to run a contest instead of the traditional spreadsheets and whiteboard strategy.
When comparing a contest they ran within the app to one run outside, the team experienced an 18 percent increase in actual ticket sales. They built another contest, this time around selling a key product: single-game suites. Real-time leaderboards and ongoing updates kept selling the suites top of mind. In six weeks, the Pistons reached $500,000 in sales--half of their annual sales goal.
Our competitive nature hasn't changed, but the way we compete, in real-time, has.
For years, managers have been trying to get the full potential out of reps by running old-fashioned competitions. We all remember the classic 1992 film Glengarry Glen Ross, which tells the story of four salesmen desperately competing in a "sales contest" that offers a Cadillac for the winner and job loss for the two lowest performers. While the Glengarry Glen Ross story isn’t the recommended approach, the psychology behind why competitions work as motivators hasn’t changed much.
Sales contests aren’t new to the industry. But the way we run these workplace competitions to get sales reps engaged and connecting with their leads is evolving rapidly. Today we can run competitions that are dynamic and digital, making them that much more efficient for managing and effective for motivation. Why wouldn’t you take advantage of that?
Where we work is being redefined, as Industrial-Age requirements of set time and place work are knocked down by technology.
Work is no longer a place. Telecommuting, freelancing and online work have been growing for years, and the lines between our professional and personal lives are increasingly blurry. We make dinner reservations from the office, and take our conference calls from the dinner table.
As work becomes less routine and more results-focused, people are coming back together to foster collaboration based around results. A movement is taking shape--the rise of coworking. According to a recent report by DeskWanted, there were 2,498 coworking spaces as of February 2013, up from 703 spaces in February 2011. How many commercial real estate models have seen 3.5x growth over the last two years?
Coworking is a logical extension of the collaborative consumption model into the commercial real estate market. We have "software as a service," "platform as a service" and now "office as a service." Eryc Branham, the Chief Revenue Officer of RocketSpace, one of the top San Francisco-based coworking spaces and accelerators, explains:
If you are a 15-person startup in Portland and need to find 3,000 square feet of office space, good luck. The economics just don't make sense and it's a major distraction. Should you be spending your time negotiating leases, managing build-outs and setting up your IT infrastructure, or should you be heads-down building your product? The traditional commercial real estate model is just broken.
The Coworking Evolution
As coworking grows, a hierarchy of models is starting to emerge. At the most basic level, you need a desk, an outlet, an Internet connection and chairs. You can find any number of 90s-style cube farms in one of the various shared-space aggregators. The next level up is the "love and esteem" equivalent--collaborative spaces, open and fresh floorplans, and chrome Sub-Zero fridge to hold gallon-sized cans of energy drinks.
At the top of the hierarchy are models such as RocketSpace and Google's Campus London that create a curated community, designed to encourage cross-pollination among the residents. Branham describes RocketSpace as an "innovation campus" that offers acceleration programs, resources from corporate partners such as Microsoft and Amazon, and assistance in attracting talent and raising funds.
According the head of Campus London, Eze Vidra, more than 1,000 entrepreneurs flow through Campus every week. As a result, it is rapidly becoming ground zero for the London tech scene, with the old warehouses around it morphing into more coworking spaces and funky startup offices.
This evolution of coworking--from a desk and a chair, to a collaborative workspace, to a curated community--will only continue as companies and professionals grapple with the changes in how, when and where we work. The move towards online, distributed and independent workers is the biggest shift in employment since the Industrial Age, which brought people to city centers, because physical proximity was a requirement. As those physical constraints are lifted, coworking and similar models will allow businesses to become more flexible, collaborative and results-focused.
Metal Mafia founder Vanessa Nornberg talks about the importance of designing an extensive hiring process that includes multiple steps and practical tests.
Full of yourself? Great brands know how to pump up who they are. Be relentless, boastful, and delighted with yourself because it works.
Selfishness need not be defined as doing something at the expense of others. It’s not a measure of greed. The great brands learn how to be self-referential without being predictable, overly indulgent, or creatively lazy. With stunning persistence, those brands create moments that elegantly refer back to their core values, delighting their consumers time and time again. They constantly loop back to their brand’s point of view, instead of just "making stuff." The best-in-class authentic brands--whether they’re people, products, or services--do this effortlessly and relentlessly. But don’t assume any of it is a coincidence or is magically improvised. It never is.
Here’s my take on the 10 most unapologetically self-referential people, places, and things:
All of them. Ever heard a selfless rapper? Of course not. Even rappers who have their authenticity challenged, like Macklemore or Baauer. Then he’d be a folk singer. Rappers have to establish their unique voice among fierce, almost World Wrestling Entertainment-style competition, all while referencing the "culture" and somehow casting themselves above the fray. From Kanye to Rakim, from the Beastie Boys to Run-D.M.C., studying rappers--the self-boasting, the almost psychotic pursuit for notoriety--is a master’s class in building authentic personal brands. Just ask Ben Horowitz. A billionaire venture capitalist (Groupon and Skype), he frequently uses hip-hop to explain business and even sends rap lyrics to other executives to help them make decisions.
2. Andy Warhol
For the young reader, you know enough to know that he was a cool motherf*cker, even if you don’t know exactly what he did. That’s the power of his brand; even in death he’s an "unlabel." Andy was the master of controlling his environment, best represented by the Factory, his studio that flung together artists, celebrities, and a stew of offbeat notables. (The concept inspired me years later.) Whether it was the tireless white wig he rocked or his nonstop postering of pop-culture icons, Warhol, like the contents in his famous Campbell’s soup can, understood which ingredients to serve again and again. And again.
This one’s controversial, I know. And this has nothing to do with the pros or cons of any organized religion; I know less about theology than I do about advanced calculus. That said, building a personal brand looks more like creating a religion than creating a marketing deck. If you want to observe the ultimate execution of deploying a self-referential marketing tactic, look no further than Christianity. As an iconic symbol, the Boss on the Cross is tough to top.
4. Alfred Hitchcock
From the specific cinematic devices he used time and time again, to his recurring themes, to his "hidden" cameos in all of his films, Hitchcock was a hardcore self-promoter. He’s also a story of "It’s never too late," as he didn’t direct his first American film, Rebecca, until he was 40 years old.
What’s so interesting about her is that her ability to be self-referential--whether in books, shows, O Magazine, or even on the Oprah Winfrey Network--makes us all more aware of our own selves. She makes us forget that she’s a billionaire who rolls with celebrities. By baring all her scars and her battles with weight, she’s self-referential in a way that makes her human.
6. The USA
What a brand. It has it all. Dramatic story with all sorts of violent twists and turns. Sick logo. Red. White. Blue. Stars. Stripes. It even has a catchy soundtrack and strong merch! It has everything from the rockets’ red glare to the apple pie to the pursuit of happiness. The brand’s still standing, unwavering, after generations of cultural and tectonic shifts more than 230 years later. Your brand has done something right when it can pull that off. Ask Ralph Lauren; he even tried trademarking the flag.
7. Star Wars
George Lucas, more than anyone else I can think of, managed to create an entirely new mythology that has a self-perpetuating, self-referential engine at its heart. (And that’s why Disney bought them. Yoda is the greatest invention since Mickey Mouse.) This is the reason "the force" will stay strong forever. Some critics have panned Lucas for extending his brand too broadly. That pisses me off and makes me want to go on some saber-and-blood-soaked revenge fantasy to destroy the rebels. What George created in all these strains of his brand--from the LEGO Star Wars partnerships, to the animated series The Clone Wars, to Industrial Light & Magic, to Star Wars: The Old Republic MMORPG (massively multiplayer online role-playing game), and even to Jar Jar Binks--was a pop culture virus built on being self-referential. He never falls into the trap of getting lazy. It’s still fresh. It still works.
8. Will Ferrell
The most self-referential comedian. There’s a reason we all love Will Ferrell characters; the only thing that distinguishes one from the other is the wigs, the makeup, and the mustache. Practically every one of his characters, whether George W. Bush or Ron Burgundy, is a reckless alcoholic who, through brilliant timing and the escalation of his voice, will suddenly start talking very loud. Most importantly, these characters all share something else in common: Will Ferrell’s face. There’s absolutely a "Will Ferrell brand" in the DNA of each of these characters, from Chazz Michael Michaels in Blades of Glory to Frank the Tank in Old School.
If you were to write the business plan for AARP, you would laugh it out of the room: "We’re going to be this brand for old people. We’re going to be the Nike for the elderly." But whatever you think about AARP--good or bad--you have to respect the shrewd and persistent way that William Novelli, its CEO, has created mechanisms to promote the brand, whether it’s insurance products or the AARP logo or positioning the organization in both culture and politics.
Not just any "me," but Marc Ecko. This is my formula, so I’ll be damned if I don’t include myself in a "Selfish" list that includes Yoda, Frank the Tank, and Jesus.
Don’t be selfish, just be yourself.
The word "selfish" has an ugly implication, but a strong sense of self--both internally and externally--is the engine that powers your brand. You need to dig deep, into your flesh and bones, to discover this core sense of self, and then you must own this self, from your guts to your skin.
Be as close to your singular purpose as you can. Gandhi knew who he was--and he was at peace with himself. Nike, for instance, knows what it is; regardless of the product or sport, everything has its clear and common purpose. You get in trouble when you get split against yourself. Like when Microsoft cranked out the Zune, just because it thought it should. Or that kid who comes back from spring break with fake dreadlocks. Or athletes who rap. (Sorry, Shaq.) You’re better served when you’re authentic to your nature and to not the pomp or perception.
Why the savviest brand marketers are thinking more and more like journalists.
For years, social media-obsessed companies have manically sprayed the digital space with short bursts of information. But Tweets and Facebook posts--no matter how copious--can’t do a brand justice. In his upcoming book, Your Brand: The Next Media Company, Michael Brito, urges marketers to create full-fledged editorial teams and processes ranging from story schedules to style manuals. To interest and influence customers, companies must adapt the mentality of journalists, says Brito, group director of content and engagement at global marketing firm W20. And they can hire actual journalists to help them.
Brito spoke recently with Inc. editor-at-large (and actual journalist) Leigh Buchanan.
In the 1990s when the Internet was first being commercialized, the phrase “content is king” quickly became cliché. What is new here?
It’s very easy to say content is king. But if you look at it from a business perspective or a brand standpoint, it’s very difficult to create content. Study after study show that it can take anywhere from three to six months to create a video. The way I look at content is, before you even look at what you want to say as a brand person, you have to have a substantial amount of infrastructure. The business itself must evolve into a content organization. Businesses struggle with content marketing because they are not aligned internally. They don’t have the right financial investments. They don’t have the right team structures.
What are the characteristics of a media company that traditional marketing functions should adopt?
First, media companies are storytellers. If you look at Conde Nast or Gannett, there are different narratives depending on which publication you are talking about, from travel to weddings to golf. For news outlets, the narrative is whatever is happening in the world. Second, media companies are content engines. The last data point I saw, the New York Times publishes 2,500 articles a day, and 400 or 500 blog posts. That’s 3,000 pieces of long-form content. AP is around twice that. Third, media companies produce content that is relevant. The problem from a consumer standpoint is what is relevant today might not be relevant tomorrow. So content has to be recent. It may even be real time. Fourth, media companies’ content is ubiquitous: it can be found in many channels. Finally, media companies are agile. They move very quickly because they have a content supply chain. So between ideation to the time that content is distributed, there is a streamlined process involving editors and writers and designers and maybe video producers. That’s tough for brands because they require approvals. Sometimes they even need legal to approve stuff.
Media companies aren’t, for the most part, self-reflective. They don’t create media about themselves. And news companies are supposed to be objective. How does a marketing model square with that?
It’s a problem. But brands that only create content about themselves don’t see a lot of engagement. If I post a press release on Facebook, it is going to go nowhere. A portion of the content does have to be about the brand and its products, or what’s the point? But content can also be about what’s important to your customers. Red Bull is the poster child for this. They don’t talk about their energy drink. They talk about really awesome things, like snowboarding and jumping from space. That is their narrative. But they are the exception to the rule. If you are a computer manufacturer you need to find other angles that drive relevance with your consumers.
You advise building editorial teams within the business. How does that work?
These teams used to be committees. You would have people working in their actual functions, and they’d meet once a month. It’s no longer a committee. It is now a full, centralized organization with a variety of roles and responsibilities: digital marketing, PR, customer support, IT. They may report to marketing or to corporate communications-;or they could even be a standalone organization. They create content strategy and they invest in some kind of content workflow management system to facilitate the content supply chain. And they are driving a lot of the editorial, whether that means training employees to be brand journalists or finding influencers to write content on behalf of the brand.
How is the content actually created?
The processes change all the time. It’s different for planned content versus unplanned content. The time frame for creating planned content should be 24 hours to three or four days. With unplanned content or, in some cases, real-time content, that should take less than an hour. Companies can’t just wait for something to happen. You create a central editorial team and you empower and train employees to serve as content contributors. Then you build the processes and the workflows using technology so that you can feed that content engine every single day.
You mentioned “brand journalists.” What’s that?
Every year, Edelman does a trust barometer that measures the level of trust people have in media, in industries, in certain verticals. One thing we find every year is that when people are seeking information about products, services or companies, they find employees of a company--people like themselves--and subject matter experts to be highly credible. CEOs are pretty much on the bottom of that list. And they don’t want the PR person putting our press releases. The product manager, the data center engineer--those people are trusted. So brand journalists are employees who are telling stories about the products; they’re telling stories about employees; they’re telling stories about customers. And these are not just Tweets. It’s long-form content.
So everybody in the organization could potentially be a brand journalist?
You don’t want to just open the floodgates or quality suffers. Start by identifying ten people who have superior writing skills and are smart about what they do. Then build best practices, build that workflow, and then slowly open it up to everybody. If people want to do Twitter that’s fine. But if you’re talking about long-form pieces or video you have to have the quality.
What role do real journalists play?
Companies are spending a lot of money on this. And they are hiring ex-journalists to train people to do it. When I was at Intel we hired an ex-journalist. His job was to go through the organization and interview these really, really smart people and write stories about them and publish them on the Intel newsroom site. What happened was someone from the Wall Street Journal or the New York Times or TechCrunch would come to Intel and say, “We want to talk to this guy. This person you talked to who invented the USB port.” We got a lot of inbound media requesting to talk to employees. Sometimes it starts out with the journalist interviewing this really smart engineer. And then when the engineer gets recognition out of it he wants to start writing stories.
What other companies have hired ex-journalists for this?
Coca-Cola and Pepsi, for example. Even some smaller B-to-B companies are hiring ex-journalists to be that kind of editorial lens, so employees can be trained how to write stories. It really raises the level. A few years ago it was, ”Let’s get employees to Tweet all about us!” Or, “Let’s get our employees to re-Tweet us or share our content on their pages!” That’s good, but it doesn’t have an impact. What has an impact is enabling employees to tell awesome stories.
Do professional journalists or even ex-journalists have trouble thinking like brand advocates?
It’s tough. Because journalism is not marketing. Journalists are trained to be objective. So the hard part is finding a good journalist who understands marketing. One of our clients is looking for an editorial director. They’ve gone through rounds and rounds of interviews with ex-journalists and writers trying to find the right fit. It’s a marketing function: it’s not the norm of how a journalist would look at content. But I think kids coming out of journalism school today may be more equipped to take on roles like this.
Someone from Gannett was telling me that she found my book ironic. She said, “We are a media company and we are trying to be more like marketers. We have journalists who write really good content. But they start a conversation and they never come back to it. They don’t Tweet, or when someone leaves a comment they don’t respond to it. From our brand perspective we tell journalists you need to respond to comments. You need to re-Tweet this.” Also, we are seeing the rise of journalists who are building their own personal brands. The CTO of Cisco has two-plus million followers. She’s very influential. She writes really good content. She’s the model that media companies I talk to want to replicate. How do we drive people back to our content? How do we get our journalists to build brands so they can have influence and drive people back to our content?
This sounds like a fairly expensive proposition. How do younger or smaller companies take advantage of it?
Smaller businesses are more nimble, which actually makes it easier to do some of these things. You may not have the quantity but you can have the quality. There is a company here in the Bay Area called Visage Mobile. They have maybe 60 employees. They use an agency to do all their social content. But they also have two or three employees who have been identified as savvy in the social space. They aren’t paid extra. But they raised their hands and said, “I’m an engineer.” Or, “I’m a sales guy. And I love the brand.” And they are happy to spend an hour or two a week writing content. So it’s not expensive to operationalize.
You can also hire a small agency. Or you can use a platform like Contently or Ebyline or Skyword. I think Mashable uses Contently to manage their contributors. It manages workflow and has version control and all this great stuff. They also have a network of freelance writers and influencers. As a brand, you write a brief and say, “I want an article written about this topic.” It’s a marketplace that connects brands with writers. So a smaller brand that doesn’t have an agency or a group of employees who are willing to write can pay people to create quality content.
If companies do all this, then do they still need traditional advertising?
Absolutely. Consumers need to see, hear, or interact with your content three to five times before they believe it.
A study found that eye contact might make persuasive speakers less effective.
Contrary to popular belief, a recent study found that eye contact might actually hurt the effectiveness of persuasion.
Researchers at the Harvard Kennedy School and the University of Freiburg found that when experiencing direct eye contact, listeners were unreceptive to viewpoints that differed from their own.
The study’s participants’ eyes were monitored with a tracking technology while they were shown videos of people giving speeches about various controversial issues. Researchers found that participants’ beliefs about a particular issue were less likely to change the longer they looked at a speaker’s eyes. A locked gaze proved to be positively effective only when the participant already agreed with the speaker’s opinion.
“Whether you’re a politician or a parent, it might be helpful to keep in mind that trying to maintain eye contact may backfire if you’re trying to convince someone who has a different set of beliefs than you,” Julia Minson, assistant professor of public policy at the Harvard Kennedy School of Government and co-lead researcher of the study, said in a statement.
Her team conducted a follow up study, which found that looking anywhere but the eyes could be beneficial. They found that those who looked at the speaker’s eyes were not as persuaded as those who had focused on speakers’ mouths.
Minson acknowledged that reactions to eye contact are completely situation-dependent; body language that might normally inspire trust and closeness in friendly situations can just as easily be associated with intimidation or bullying when two people are at odds.
Get this: 92 percent of B2B customers watch online video and 43 percent of B2B customers watch online video when researching products and services for their business.
YouTube isn't just a platform for sharing videos, it's also one of the most popular search engines on the web--second only to Google. And YouTube is the third most popular website in the world, with over a billion unique visitors each month according to the company. Using YouTube for your business has the potential to energize your current customers, and attract new ones.
Still think YouTube is just for cat videos and the like? Well, if you're a business selling to another business you might want to take another look; 92 percent of B2B customers watch online video and 43 percent of B2B customers watch online video when researching products and services for their business, with 54 percent of these watching on YouTube. Here are a few ways you can harness the potential of video for your business.
Stand Out from the Crowd
Two-thirds of B2B customers consider three or more companies when purchasing and over half don't know which company to purchase from according to information from the recent Google Think B2B Conference. What can sway their decision? A brand's reputation was shown to be highly influential in how B2B customers decide.
We know that 22 million B2B customers watch YouTube videos every month, so how can you tell your story and express your brand in a compelling way to engage directly with your customers? Look at Cisco, a global provider of networking systems from routers to webinar software. They've developed a YouTube channel full of videos and tutorials to help prospective customers learn everything they want to know about network solutions. When you think routers you don't think,"oh, I'd love to watch some videos about that!" but Cisco presents their content in a way that hooks you from the get-go including their headline, "Welcome to the future-ready network."
At the core of good content marketing is providing utility to your prospects and customers and a great way to do this is using video. It's as easy as producing simple how-tos and showing how to solve common problems (just look at the Vine videos Lowes did recently full of simple six second home improvement tips). You can also talk about cool new tools and apps that will make your customers lives easier. At my e-mail marketing company, VerticalResponse, we recently began a once a week video series called What's New Weekly. Our social media manager and a weekly guest each pick a cool tool or app they want to share with our customers and record a quick video. We publish the video on our blog, share the link on our social media channels, and send out an email with a link to the video to our subscriber base. And slowly, we're building our YouTube subscribers from a measly five when we started to over 200 in a few short weeks. We still have a long way to go, but we're laying the bricks. You can do the same thing with a fairly simple set up. The VR team got everything they needed from Amazon for less than $150 (not including the camera).
We wouldn't be talking B2B if we didn't talk about generating leads, and you can do plenty of that with videos and YouTube. Here's the trick: make sure that with every video you produce that you include a call to action and an URL of a landing page or page back to your website where folks can learn more, sign up, register for a demo, etc. YouTube also offers overlay ads that you can use if you're a Google Adwords advertiser. According to YouTube, "The overlay will appear as soon as the video begins to play and can be closed by the user. You can use the overlay to share more information about the content of your video or to raise interest in your channel, other videos, or additional websites. When users click on the overlay, they are directed to your external website as specified in the overlay's destination URL."
How are you using video to grow your business? Share in the comments.
Lee Colan, founder of The L Group, explains why it's essential to identify and focus in on the one thing that really matters every day.
Instead of dumping your cash into a Swiss bank account, try tweaking inventory, accounts receivable, liabilities, equipment write-offs, retirement plans, and more.
Really? The Beanie Babies guy? Tax evasion?
It's true. Ty Warner, the college dropout who became a billionaire creating the Beanie Babies collectibles, pleaded guilty last Wednesday to tax evasion. He hid millions of dollars in a Swiss bank account and is facing five years in prison.
Don't hide your money in Switzerland (duh).
I'm pissed off, perhaps a little irrationally, because those dollars belong to me. For years, my daughter collected those ridiculous looking toys. Obsessed, she had them all: Safari the Giraffe, Slush-Husky, Nibbly the Bunny, Hannibal Lector. (Just kidding about Lector, but can you believe this stuff?) But those things weren't cheap. I sunk a lot of money into those ridiculous dolls. And then Warner squirreled my hard-earned cash into a Swiss bank account--so he could avoid paying taxes? Grrrr.
What makes me even more peeved is Warner's stupidity. No one wants to pay taxes. But that's the best he could come up with? Hiding cash in Switzerland? Every business owner I know goes to great lengths to minimize their tax burden. All he needed to do was hire a good accountant and practice a few of the legal, time-tested tax avoidance strategies that many of my clients do.
Here's how to "avoid," not "evade," taxes.
Inventory. Smart business owners know that the higher the inventory they have, the more taxes they have to pay. That's because when inventory depletes, it becomes a cost of sale and therefore an expense. So was Warner doing everything he could to keep his inventories at their minimum? Did he get write off bad or damaged goods? I would've been more than happy to torch a warehouse or two of it meant I'd rid the world of this Beanie Baby pestilence. Were his reserves for obsolete inventory suitably established and was older inventory written off according to an established policy? Was his manufacturing outsourced enough so that he could have others produce product and only ship to him when he needed (or just drop ship to his customers)? Doing everything he could to keep his inventory balances at their lowest would have kept his tax bills down. That's what smart business people do.
Accounts Receivable. I know it's hard to believe this, but not everyone wants a Beanie Baby. Shocking, yes, but true. So there must be certain situations where Warner's company shipped product and their deadbeat customers didn't pay them. I, for one, salute those people. Smart business owners keep a very close eye on their accounts receivable, establish reserves for those that are in question, and have a policy for writing off bad debts. That way they can stay on top of this deduction and keep their taxable income as low as possible.
Other reserves. Not everyone likes Beany Babies. My sons really enjoyed cutting the arms and legs off my daughter's Beanies once in a while. I always pretended not to notice. But did Warner make sure to have reserves for damaged or abused Beany Babies? Did his company take the time to reserve for inventory in transit or expenses that were incurred before the end of the year for which an invoice wasn't yet received? Did they do a good job considering other liabilities, such as lawsuits or contingencies, that should be reserved? Tax laws won't let you deduct this stuff until you actually incur the expense. But they need to be on your books, tracked, and then written off when allowed.
Equipment write-offs. Don't tell my daughter, but those cute little Beany Babies aren't created by their Beany Baby mommies and daddies. They're made by Satan. Okay, they're actually manufactured by huge, powerful machines. Those big machines are a potentially large tax deduction. The tax code (Section 179) allows many businesses to deduct up to $500,000 in equipment purchases a year. Unfortunately, this law is set to expire at the end of 2013. Maybe Warner's company was too big to take advantage of this deduction, but most small businesses are eligible. It's a great way to take a big deduction this year instead of having to depreciate your equipment over a few years.
Retirement plans. I guess Warner, if he gets sentenced to five years, has his retirement plan all figured out for now. But many small business owners I know, who are tax savvy, are sticking away as much money as possible into SEP, 401Ks, IRAs, Keoghs, and other retirement plans where they can deduct against their profits and put away money for the future. Why not put your money here instead of a Swiss bank account?
Accelerating income and expenses. People do this all the time, especially those lucky ducks who are small enough to still be on the cash basis of accounting. If you're one of those people, take advantage of this benefit, particularly if you think tax rates may go up. So, for example, business owners who anticipated that tax rates would rise in 2013 chose to accelerate their income into 2012. If you're going to pay taxes, you may as well pay them at a lower rate. No need to hide your assets in a Swiss bank account, get caught, go to jail, and ruin the hopes and dreams of countless little girls around the world.
Gifts. Speaking of little girls, do you have one? Or a son? If you do, you're allowed to give them a tax-free gift of up to $14,000 annually so you can save on estate taxes. Or you can contribute money into a 529 plan where it can grow (also tax-free) as long as you use it for your child's college education. I have three kids who just went off to college and those 529 plans were a huge help.
What else can we learn from the Beanie Babies fiasco?
First, apologizing doesn't help. No one cares if you paid more than a billion dollar in taxes over your lifetime (as Warner claimed). In fact, most of us are kind of amazed at how profitable those stupid Beanie Babies are. The more money you make, the more exposure you have, and the more chance you'll find yourself in the IRS' sights. The more in the public eye you are, the more careful you have to be. So maybe, Mr. Warner, if you charged just a little bit less for those stupid little Beanie Babies, you wouldn't find yourself in this predicament.
Sure, taxes are high. And they're probably going to keep going up, especially as we pay down our huge national deficits and debt. But you don't have to hide your money in a Swiss bank account for God's sake. If there's anything to be learned from Warner's ordeal, it's that you can ut back the amount of taxes you pay by being strategic. And speaking of cutting back, anyone interested in a few thousand slightly used Beanie Babies (including a dozen without arms and legs)? My daughter's off to college now and those tuition bills are enormous.
Think you're only on time because you hurry? Actually it's all that rushing that's making you late.
Does this sound familiar?
"For many years, the only way I knew to get from one place to another was to rush. I was chronically ‘running late.’ In fact I couldn’t conceive of managing time in any other way. I usually would get to an appointment in the nick of time, but never without a rush."
And how about this next observation, does it also ring true for you?
"It’s common to treat each other terribly when we’re 'in a hurry.'"
Both quotes come from a blog post by coach Linda Gabriel on happiness site Tiny Buddha. In-depth, thought-provoking and generous, the piece tells the story of Gabriel’s previous life as a chronically late working mother and is packed with details that many time-crunched business owners will identify with.
The set up and problem may be all too familiar, but Gabriel’s solution is far from expected. In fact, her eventual fix for her crazed schedule was simple but utterly counter-intuitive. She just stopped rushing.
Wait. What? How?
If that’s your reaction, the complete post is worth a read in full, but the essence of Gabriel’s argument is that, "rushing and being late are two sides of the same coin. You can’t have one without the other. When we are in rush mode, we believe we have to not be late in order not to rush.The truth is if you stop rushing, you’re far less likely to be late."
If you’re skeptical, Gabriel offers up her own life as an example and testifies that as soon as she vowed to stop hurrying everywhere, “much to my astonishment, I started to be on time. All the time. If I ran into traffic and arrived late, I just relaxed into it. More often than not the timing was perfect anyway.”
But if you find this too perfect to be believed, perhaps the best bet, she suggests, is simply to try it for yourself. What’s the worst that can happen after all?
For those hard-charging types who are about as likely to embrace this zen approach as they are to grow flippers and take to the sea, there is more practical advice available which involves handicapping your time estimates and investing in some more clocks. But perhaps don’t dismiss the wisdom of simply letting go of your stress and accepting whatever time you're actually going to arrive quite so quickly It may seem counter-intuitive at first, but it has strong backing from psychologists, doctors and thousands of years of spiritual tradition.
What do you make of Gabriel’s story?