Please Allow Me to Quote Boyz II Men

It's so hard to say goodbye to yesterday. Remember that song? If not, click here to listen to it on YouTube. If you do recall the song, do you remember how cool they made it to sing A capella? Love it!

At any rate, last week I wrote about the futility of efficiently doing the wrong things. If you did not read last week's post, click here.

It is true that it is difficult to say goodbye to yesterday. We are hard-wired to resist change. Click here to read more on the subject.

Because we are wired to resist change, and we hold on to the past, it is very difficult to succeed as an entrepreneur. Entrepreneurs are fundamentally change agents. We make change happen. Which goes against human nature.

To be a successful entrepreneur you must embrace change. And, to embrace change, you must override your natural circuitry. Quite the conundrum, wouldn't you say?

So, how do we do it? Again, I will hearken back to the advice of Peter Drucker. Drucker recommended, “Organized abandonment.” I have never heard Drucker refer to the Status Quo Bias, but he knew that people had a hard time letting go of the past. Especially past “breadwinners.”

This is what happened to the Kodak company. The jewel of Rochester, New York is a dead company walking. Kodak held on to film, their past breadwinner, for far too long. And, theirs is a particularly bizarre story considering the fact that Kodak invented digital photography!

Again, it's so hard to say goodbye to yesterday.

Those who are able to let go of the past can create the future. This is what Jack Welch did as CEO of the General Electric company.

Welch used one very simple question, from Peter Drucker, which allowed him to create the strategy that grew GE by leaps-and-bounds. What was the question? The question was this, if we were not already in this particular business, would we go into it today?

With this simple yet elegant question, Jack Welch decided if GE was not either #1 or #2 in any given sector, they would sell or close that business. This was quite the radical decision because, as I say, people hold on to the past.

To many people, Welch's decision was so perturbing it earned him the label “Neutron Jack.” It also helped General Electric succeed. Wildly so.

Being that it is hard to say goodbye to yesterday, Drucker was dogmatic in saying that we must be organized and systematic in our abandonment efforts. Otherwise, the decision will always be shelved, for another day, and it will never get done.

Drucker would say every three years every product must be put on trial for its life. Unfortunately, organized abandonment also applies to our human products, our human associations. And, this can be enormously difficult.

As we grow, as people, others around us make the choice to not grow. Or, they choose to grow in a direction which is incompatible with our own. This is when tough decisions must be made.

There will be times when you need to cut people lose. I know it may sound a bit savage but the market is not sentimental. What's more, we only get one life to live. Let's not waste it by staying stuck in the past. I wish you only the best.

There is Nothing Worse

Peter Drucker once said, “There is nothing quite so unless, as doing with great efficiency, something that should not be done at all.” I tend to agree. But, I prefer to paraphrase and say there is nothing worse than efficiently doing the wrong things.

As most of us know, Drucker also said, efficiency is doing things right and effectiveness is doing the right things. Though we need both, in view of the first quote, we can see that deciding on the right things ends up being more important than doing things right.

Probably the most famous example of Drucker's quote pertains to the Titanic. Efficiently doing the wrong thing would be like trying to arrange the deck chairs as the ship was going down.

But, let me give you a personal, and somewhat embarrassing, example. When I first started a business, I did like most people, and created business cards. Then, I hit upon this 'marvelous' idea to hand-write a note on each card.

I created a streamlined system whereby I could crank out these 'personalized' cards in rapid succession. I was the embodiment of efficiency. Of course, not a lot of the cards were ever given out. And, of the ones that were, the effect was virtually zero. I was doing with great efficiency something that should not have been done at all.

A Drucker example, of efficiently doing the wrong thing, would be holding on to the past. Drucker would say there is nothing quite so futile as trying to keep a corpse from rotting. Holding on to the past is such a common human tendency, it led the late Andy Grove to proclaim, “Only the paranoid survive.”

Let's talk about a very common mistake that all of us see every day. Spam email. Yes, it is true that email is an extremely efficient way to disseminate your company's information. The problem is that spam is less than useless. In fact, it can often backfire.

I have a number of Realtors, whom I have contacted, in the course of my business. Sometimes I end up sending emails to said agents. And, on a number of occasions, these Realtors have added me to their spam list. I did not opt-in. They just unilaterally added me to their mail campaign.

Now, I realize these real estate agents probably think it cannot hurt to 'drip' on me. However, they are incorrect. Not only do I not care about their messages, I have also lost respect for them and their spamming ways. I would never use them to represent me. Yes, efficiently doing the wrong things can blow up in your face.

Of course, one of the main problems with Drucker's prescription is that it can lead to procrastination because we cannot know all the right things to do before we get started. Especially in the case of the entrepreneur, we often must learn by trial-and-error. What a conundrum!

What is the solution? Well, there is a fundamental tension between efficiency and effectiveness. And, it is up to each of us to deal with that tension. One of the basic paradoxes of the entrepreneur is to possess rock solid conviction and blaze a new path. While, at the time, be humble and keep learning and improving. In a word, iterate.

There are no easy answers along the entrepreneurial journey. My suggestion today is, while you are dialing-in the efficiency of your operation, be sure to keep checking to make sure you are headed in the right direction. The real pisser is that the right direction changes over time. Sorry, but it is true. For solace, read Grove's book.

The good news is that course correction is not all that hard IF you are willing to let go of the past. Thus, organized abandonment is a subject we will discuss next week. In the meanwhile, when it comes to balancing effectiveness with efficiency, remember to do both. Always both.

What is Effective?

What is effective?

Discipline

Sacrifice

Courage

Resilience

Faith
Fairness

Proactivity

Patience

Urgency

Good Communication

Responsibility
SMART Goals
Lifelong, Systematic Learning

What is not?

Procrastination

Shortcuts

Wishful Thinking

Blaming

Impulsivity

The Three Barriers to Effectiveness

The three barriers to effectiveness are: Fear, Doubt, and Apathy.

As the antidotes, Drucker says we need: Courage, Faith, and Work.

How do we develop courage?

A little bit at a time. By facing our fears. By listening to Josh Groban or Sara Bareilles. By studying Brené Brown. You see, we cannot go around fear. We must go through it.

How do we develop faith?

Through education and by getting around people that have accomplished what we are looking to accomplish. Remember, what one person has done, another can always do again. Perhaps you listen to Craig Ferguson singing a Dead Man Fall song.

How do we keep on working?

I do not know. Motivation is a tricky thing. Some people are motivated extrinsically by dreams, goals, and possessions. Others are motivated more internally by autonomy, competence, and relatedness. Then, others are motivated by anger and revenge. What I do know is that motivation is an inside job. It is up to each of us to motivate ourselves. It is not something I can teach you. Although, I would recommend reading Ed Deci's book.

One thing I do know is that fear and doubt zap motivation. Conquer your fear, and build your faith, and your motivation should improve.

Lest you think I am full of so much hot air, we need to remember what Geoff Colvin wrote, Talent is Overrated.

Drucker writes, "A good many studies of research scientists have shown that achievement (at least below the genius level of an Einstein, Niels Bohr, or a Max Planck) depends less on ability in doing research than on the courage to go after opportunity."

The Effective Executive

Last week I spoke briefly about Peter Drucker's book The Effective Executive. This week I will quickly run through the main elements of the book.

There are five, main prescriptions in Drucker's masterful book. They are:

1. Know Thy Time – I think we have all heard the Delphic maxim, “Know thyself.” It is wise advice. And, it plays a large roll in effectiveness. Effective executives always start with their time. Because, if you cannot control your time, you will not be very effective. Here is a little hint, time management is largely a function of self-discipline. Specifically, effective time management is highly dependent upon your ability to say, “No.” Simply in theory. Difficult in practice.

2. What Can I Contribute? – Peter would say, to focus on contribution is to focus on effectiveness. A lot of people are focused on success. And, Drucker would suggest focusing on success is a mistake. Success, like happiness, is a byproduct not a destination. Success comes from acting on the question, “What should my contribution be?” And, in order to answer that question, we need to possess self-knowledge. Which leads us to Peter's next point.

3. Making Strength Productive – Drucker would say most people are not aware of their strengths. People think they know their strengths. But, more often than not, they are incorrect. I will give you two ways to identify your personal strengths. The first comes from Peter. Drucker recommended what he called “Feedback Analysis.” The technique goes like this. Whenever you make a significant decision, or make a big change in your life, write down the expectations you have. Meaning, write down the reason for your decision and the decisions' expected outcomes. Then, 9-12 months later, review what you had written and compare it is what actually happened. The other method, for identifying your strengths, comes from Professor Martin Seligman. If you go to Marty's website you can take a free, strengths test. Simply visit authentichappiness.sas.upenn.edu and create a free profile. On Seligman's site, there are numerous tests you can take. And, for our purposes, I am recommending the test titled, “VIA Survey of Character Strengths”

4. First Things First – This is, very simply, a question of priorities. When I say “very simply,” I most certainly do not mean “easy.” In fact, keeping first things first is very difficult. Like time management, keeping first things first is largely a function of self-discipline. Which ain't easy. However, part of the problem is confusion. When we lack focus, we are much more easily distracted. Focusing on your strengths, and contribution, will help you to stay focused on the important stuff. Because, like Heidi Grant Halvorson says, successful people, “Don't Tempt Fate.” Drucker writes, “If there is any one “secret” of effectiveness, it is concentration. Effective executives do first things first and they do one thing at a time.”

5. Decision-making – Effectiveness is a function of action. It is all about action. And, in as much as we can only do so many things, action is a function of decision. Drucker writes, “Effective executives do not make a great many decisions. They concentrate on the important ones. They try to think through what is strategic and generic, rather than “solve problems.” They know that the trickiest decision is that between the right and the wrong compromise and have learned to tell one from the other. They know that the most time-consuming step in the process is not making the decision but putting it into effect.”

I will leave you with Drucker's five elements for effective decision-making:

1. The clear realization that the problem was generic and could only be solved through a decision which established a rule, a principle.

2. The definition of the specifications which the answer to the problem had to satisfy, that is, of the “boundary conditions.”

3. The thinking through what is “right,” that is, the solution which will fully satisfy the specifications before attention is given to the compromises, adaptations, and concessions needed to make the decision acceptable.

4. The building into the decision of the action to carry it out.

5. The “feedback” which tests the validity and effectiveness of the decision against the actual course of events.

Effectiveness Can, and Must, Be Learned

If you have not read him before, let us talk some Peter Drucker. Peter was so eloquence in his writing. One thing he would talk about is the importance of perception. He would say one of the most important areas of education is the development of the ability to perceive.

So many people are good at analysis, at breaking things apart. It is what we are taught in school. What is needed is to add the ability to perceive that which is around us. Perception is about looking out the window and observing what is really there (Something I wrote about is the post about here) It is a lot harder than it sounds.

If you have ever studied calculus, you know the two main functions are differentiation and integration. Analysis is like differentiation and perception is the integration. So, let us do a little integrating. In this post I will continue to integrate the teachings of Drucker into this blog.

The first Drucker book, that everybody should read, is The Effective Executive. Though The Effective Executive was released in 1967, do not let its age detract you. The book truly is a golden oldie.

Here are a few quotes from the beginning of the book:

An effective executive is not “talent,” let along “genius.” The effective executive follows practices that can be learned and must be learned.

The Effective Executive is both a concise blueprint for effectiveness as an executive within an organization and a practical guide to managing oneself for performance and achievement, whether within an organization or on one's own.

This is a program first developed for the senior executives of the Eisenhower administration.

Every developed society has become a society of organizations. And every organization, whatever its specific function, depends for its performance (and indeed its survival) on the effectiveness of its executives.

Here is a verbatim transcription of the book's Preface:

Management books usually deal with managing other people. The subject of this book is managing oneself for effectiveness. That one can truly manage other people is by no means adequately proven. But one can always manage oneself. Indeed, executives who do not manage themselves for effectiveness cannot possibly expect to manage their associates and subordinates. Management is largely by example. Executives who do not know how to make themselves effective in their own job and work set the wrong example.

To be reasonably effective it is not enough for the individual to be intelligent, to work hard or to be knowledgeable. Effectiveness is something separate, something different. But to be effective also does not require special gifts, special aptitude, or special training. Effectiveness as an executive demands doing certain – and fairly simple – things. It consists of a small number of practices, the practices that are presented and discussed in this book. But these practices are not “inborn.” In forty-five years of work as a consultant with a large number of executives in a wide variety of organizations – large and small; businesses, government agencies, labor unions, hospitals, universities, community services,; American, European, Latin American and Japanese – I have not come across a single “natural”: an executive who was born effective. All the effective ones have learned to be effective. And all of them then had to practice effectiveness until it became a habit. But all the ones who worked on making themselves effective executives succeeded in doing so. Effectiveness can be learned – and it also has to be learned.

Society has become a society of organizations in all developed countries. Now the effectiveness of the individual depends increasingly on his or her ability to be effective in an organization, to be effective as an executive. And the effectiveness of a modern society and its ability to perform – perhaps even its ability to survive – depend increasingly of the effectiveness of the people who work as executives in the organization. The effective executive is fast becoming a key resource for society, and effectiveness as an executive a prime requirement for individual accomplishment and achievement – for young people at the beginning of their working lives fully as much as for people in mid-career.

I did not link to the book because next week I am going to give you an overview.
Stay tuned.

The Parting Shot

In 53 BC the Battle of Carrhae was fought in Persia. In the battle, the Parthian Empire took on the Roman Republic. And, legend has passed down to us what has come to be known as the “Parting Shot.”

Today, I will leave you with a couple, simple examples of the folly of the bright idea. In this, my last post, I will use ridiculously basic businesses. Let us first take a step back and revisit how we might have gotten here.

I think the thought coming up with an earth-shaking, great idea can be pretty glamorous. It is a rather sexy proposition. And, that is a big part of the reason people attempt to come up with bright ideas.

The little known secret, or, at least the one that is seldom admitted, is the fact that very few glamorous ideas succeed. It would be nice if sexy ideas succeeded. But, the truth is, they don't.

So, I think we are well-advised to remember the words of the late business tycoon, Felix Dennis, “Forget glamorous.”

Personally, I believe a wise task is to take the mundane and make it transcendent. Meaning, take something that needs to be done and do it better than anybody else. A good example is Eric McLean.

Who is Mr. McLean? Well, very simply, he is a notary. Talk about unsexy! Now, I am most certainly not suggesting that you become be a notary. But, the example is instructive.

As you likely understand, a Notary is a person, “with legal training who is licensed by the government to perform acts in legal affairs, in particular witnessing signatures on documents.”

What McLean did was he built himself a nice, little empire for $36. What did he do? He created "ASAP Notary" based on the simplest of ideas: a mobile notary. Instead of the customer coming to the notary, the notary would travel to the customer. And, $36 was all it cost Eric to get his license.

(Another good example is Wayne Huizenga. Dude got super rich as the trash man!)

As I have quite clearly demonstrated, over the last few weeks, the notion that entrepreneurs need bright ideas is a complete fallacy. And, I will wrap things up by giving the final words to Gary Vaynercuk.

Gary Vee said, “Every idea has been thought about. There is nobody who has come up with a big idea. I am telling you. All of them. Every one of them. People executing, or having the pieces in place to be able to execute, or the right time in their career, or the right resources, financially, energy, skills, opportunities, those are the variables, not the ideas.”

Speaking of Chiquita Bananas...

Last week I talked about the fact that Chiquita Brands purchased Fresh Express for $855 million. So, obviously, the company is not doing too bad. But, this was not always the case. And, their folly is very instructive.

This story affirms two lessons. One about the importance of integrity. And, the other, about advertising's ability to shape peoples' belief systems.

As it pertains to my blog, leadership is an integral part of entrepreneurship. And, integrity is the sine qua non of leadership. Taking shortcuts can really hurt a person. In the case of Chiquita, it might have wiped them out.

According to Arthur Freeman, “Back in the 1940s, a highly popular advertising jingle for Chiquita Bananas ended with the line: 'Bananas like the climate of the very, very tropical equator, so you should never put bananas in the refrigerator. No. No. No. No.'”

According to a former vice president of the company, that marketed Chiquita, the only reason the word refrigerator was mentioned in the jingle was that it rhymed with equator.

The company wanted to position their product as being exotic, coming all the way from Central America. The truth was, of course, that bananas can go in the fridge, and indeed last longer if they are cold.

However, this was not a big deal, in the forties, when refrigerators were tiny and the majority of women went grocery shopping almost daily. What mattered then was that people loved the Chiquita jingle, sang it everywhere, and bought lots of bananas.

As a matter of fact, the jingle became so popular recordings of it appeared in jukeboxes. And, the U.S. Government borrowed the tune for a song about conserving water during World War II.

At any rate, what had seemed to be the prefect ad campaign began costing the company sales in the fifties when the suburbs boomed, refrigerators doubled in size, and shopping became a once-a-week event.

Shoppers would buy a dozen apples or a dozen oranges but only three bananas because they “knew” that bananas should never go in the fridge. The company tried in vain for years to counter the jingle's message but finally gave up.

In many ways, Chiquita got what they deserved. Advertising can be an extremely powerful activity. The main reason being advertising's ability to shape peoples' beliefs. And, once those beliefs are formed, they are quite difficult to change.

For this reason, if you wish to influence peoples' minds, I encourage you to get it right. Please, do not take shortcuts. Not only can your shoot yourself in the foot, but you can also destroy your integrity.

Successful entrepreneurship requires leadership, and leadership requires integrity. Remember that, and please don't compromise yourself.

Healthy Eating

These days, a lot of people are interested in eating healthy. And, one staple of the healthy diet seems to be the salad.

Let me ask you a question. How much time do you spend thinking about salad? Hopefully, not too much. But, it is a great lesson in entrepreneurship.

As I have been trying to prove, the great idea is largely a myth. This has been the premise of my last few blog posts. If you have not read them yet, go here and here and here.

You see, a lot of companies have an Inside-Out perspective. That is to say, they ask themselves what can they produce and how can they sell it.

This is essentially the chotsky phenomenon. A lot of companies create products that do not have viable markets. Essentially, they are creating junk, or, solutions for which there exists no real problems.

A much better approach is an Outside-In perspective. Meaning, we need to be market and customer focused. Drucker would call it, "Looking out the window." We need to search for real problems to solve. And, sometimes, the solution is mind-numbingly obvious.

Let's talk about Fresh Express.

While it is true that a lot of people want to eat healthy, it is also true that most people want convenience. And, eating healthy can often be at odds with convenience. Meaning, healthy eating usually requires more effort.

Enter the bagged salad.

A little company, in Salinas California, called Fresh Express, was able to see what the big boys could not. The big produce companies, as big companies often do, kept their attention squarely inside their own windows.

What I mean is, while the big boys were focused on their commodities, things like lettuce, carrots, and radishes, Fresh Express was focused on the customers' problems. This allowed Fresh Express to pick up on what might be called the "elusive obvious." The company did not have some bright idea. They simply saw what other people could not see.

The people, at Fresh Express, asked themselves, “If people want to be healthy, but they also want convenience, why don't we give it to them?” The solution? They created pre-made, single-serving salads and put them in a convenient, airtight bag.

People want to eat salads, but they do not want to go to all the trouble of making a salad. Fresh Express fixed the problem.

Was it a big problem? Well, in 2005 the company got acquired, by Chiquita Brands, for $855 million. Not too shabby for a bunch of lettuce! Next time you are at the grocery store, see if you notice them in the produce section.

To take single-serving salads, and put them in a plastic bag, is ridiculously simple. It is the very antithesis of a great, or bright, idea. And, it is the essence of entrepreneurship.

The fact of the matter is, most successful innovations are amazingly simple. So, if you wish to succeed as an innovator, do not get all sophisticated. Remember to keep it simple.

Zipcar

It is important to remember you do not need a great idea to start a business or to become an entrepreneur. As a matter of fact, you do not even need an idea of your own.

The Austrian economist, Joseph Schumpeter, has been called the Prophet of Innovation. Schumpeter said that capitalism was characterized by a phenomenon he called creative destruction. Creative destruction is the very definition of innovation.

Though Schumpeter did not give much instruction on how to innovate, he was a large influence in the life of Peter Drucker. Drucker built upon and extended Schumpeter's work. 

And, Drucker was no fan of the great idea. In fact, Drucker said, “In the theory and practice of innovation and entrepreneurship, the bright-idea innovation belongs in the appendix.” Strong words.

The reason Drucker disliked the bright idea is pretty simple. Contrary to popular belief, entrepreneurs do not love risk. In truth, if you wish to succeed as an entrepreneur, you are well-advised to minimize your risk.

The main problem with the bright idea is that it is the riskiest of all methods of innovation. Statistically speaking, the bright idea is, by far, the least likely to succeed. Indeed, very few bright ideas end up being a success.

Enter Robin Chase and the stolen idea.

Drucker recommended that all entrepreneurs, and executives, search for the future that has already happened. Robin Chase started Zipcar in her fifth decade of life. At the time, she was living near Boston, had three children, and a strong desire to become an entrepreneur. But, she was never able to come up with the big idea.

Fortunately for Chase she has a very astute friend named Antje Danielson. Danielson is originally for Germany. On one trip back home, Antje noticed a new business concept. Namely, rental car companies that were offering cars by the hour instead of the day or the week.

All Chase and Danielson did was to import the idea of the hourly rental car to America. I say this with nothing but love, but, Zipcar is a stolen idea. And, in 2013, the company was acquired, by Avis, for $491 million. Not bad for about a decade's worth of work. Especially considering that neither Chase nor Danielson had ever been in the automotive industry. Chase did not even like to drive!

Hopefully you agree that entrepreneurship need not be some mystical or elusive endeavor. In fact, like most things entrepreneurship can, and should, be studied systematically. And, as the title indicates, the systematic study of entrepreneurship is a big part of what is blog is all about.

For more examples of the future that has already happened, visit my site courtneyleeds.com

Primekss

This is a concrete story. And, it is a tale of innovation.

Last week I mentioned that I am going for a full-out assault against the myth of the great idea. A lot of people think entrepreneurship is dependent upon having great ideas for products and services. I will be giving you concrete examples to debunk this unfortunate myth.

How much do you know about concrete? Me, I do not know very much. But, what I learned is, concrete and cement are the third leading producers, of CO2 gas, in the entire world.

Obviously, this means concrete and cement are massive contributors to global warming. This is a very real problem. And, as you know by now, entrepreneurs use innovation to solve problems.

Problems are opportunities. The thing is when people think of innovation they tend to think about new products and services. And they miss enormous categories of opportunity.

While it is true that you can start a business around a new product or service, it is also true that you can innovate around various processes. Let me give you an example.

There exists a company, in the country of Latvia, called Primekss. Primekss was founded, in 1997, on a very simple premise. The premise was to create a more environmentally friendly form of concrete.

In order to do this, the folks at Primekss first looked to history. What they found was that it was the Egyptians who first developed concrete. One of the things the Egyptians (and later the Romans) did was add blood and horse hair to their concrete.

This caused the Primekss people to think about re-engineering the process of creating concrete. The result was their product that made come to be known as PrimeComposite.

PrimeComposite reduces the emission of CO2 by 30-50% (depending on who you ask.) What's more, builders end up using less PrimeComposite than they had traditional concrete. And, PrimeComposite is less likely to crack than old school concrete.

Now, I do not know about you, but, for me, concrete is about the least sexy product in the world. In fact, on Primekss's website, they brag about being boring.

You see, it is okay to not be sexy. Because, properly understood, entrepreneurship is not appeal sex appeal. It is about making the world a better place. Entrepreneurship is about solving real problems. And, the bigger the problem, the bigger the payoff.

As I stated at the start of this post, entrepreneurship is not about great ideas. Entrepreneurship is about problems, solving problems.

Problems come in many shapes and sizes. In the case of concrete, the solution was to redesign the creation process. Not a great, earth-shattering idea. But, a valuable idea nonetheless.

Why a Great Idea Will Never Make You Rich

Over the last couple weeks I have written some simple ideas about being an entrepreneur. The key word being “simple.”

A lot of people (perhaps most) fall for the myth of the great idea. Meaning, people think they could start a business if they could just think of a great idea for a product or service.

Over the next couple weeks I am going to debunk the myth of the great idea. I am going to start, today, with a guest blog.

The other day I read a great blog post, by Robert Kiyosaki, and I figured I would pass it along. The remainder of this blog are the words of Mr. Kiyosaki:

Moving from thinking ideas to building a business

On December 31, 1879, Thomas Edison did his first public demonstration of the incandescent light bulb.

Today, novel (and bright) ideas are often represented by a light bulb. But the reality is that the light bulb wasn't Edison's idea. As Wikipedia explains, “Many earlier inventors had previously devised incandescent lamps, including Alessandro Volta's demonstration of a glowing wire in 1800 and inventions by Henry Woodward and Matthew Evans. Others who developed early and commercially impractical incandescent electric lamps included Humphry Davy, James Bowman Lindsay, Moses G. Farmer, William E. Sawyer, Jospeh Swan, Heinirch Göbel.”

Many of these early light bulbs weren't functional for commercial use. Edison's genius was to discover the commercial application of the light bulb for the masses-and to find a way to make the light bulb commercially viable. When he revealed his light bulb for the first time, he said, “We will make electricity so cheap that only rich will burn candles.” That was his driving force, and the rest was history

Do you need a light bulb idea?

Today, many want-to-be entrepreneurs fall into the trap of thinking they need a new or novel idea, something the market has never seen. This is false thinking that holds many people back.

Great ideas do not need to be new or unique. They just have to be better. Many of the most financially successful people are not necessarily people who have creative ideas. Many of them often just copy other people's ideas and turn the idea into millions or even billions of dollars.

Getting rich off others' ideas

For example, fashion designers watch young kids to see what new fashions they are wearing, and then they mass-produce those fashions.

Bill Gates did not invent the operating system that made him one of the richest men in the world. He simply bought the system from the computer programmers who did invent it and then licensed their product to IBM.

Amazon.com simply took Sam Walton's idea for Walmart and put it on the Internet. Jeff Bezos became rich much more quickly than Sam did.

In other words, who says you need to have creative ideas to be rich? Usually, only those who are still poor.

So, what is the secret then for these entrepreneurs who take others good ideas and make millions? What separates them from the people who had the good ideas in the first place? Simply put, they understood how business works.

Systems make you rich

As a young man, rich dad gave me insight into how to make any idea an asset by applying the right framework. That framework is what I call the B-I Triangle.

The B-I Triangle is a system and a model for building a successful business, and products or ideas are the smallest components of the triangle. When the components of the triangle are strong and working in harmony, nearly any idea or product can be successful.

So, if you want to be a successful entrepreneur and have been chasing down the fabled great idea, I encourage you to stop and instead start focusing on learning all you can about the components of the B-I Triangle. Then, you won't need your own light bulb, you'll just need to see the opportunities others' great ideas present.

How can this be a good thing?

Entrepreneurship is ALL about change. Change is where the opportunity is at. But, it is also a problem.

Undoubtedly you will agree with me when I say people resist and fear change. In fact, humans are hardwired to resist change. The psychological name, for this phenomenon, is the Status Quo Bias.

The Status Quo Bias has been empirically proven. And, what scientists have found is that we value what we have roughly twice as much as what we could have. Stated simply, we do not want to change.

Let me go a little deeper into the problem. The famous philosopher Søren Kierkegaard said life exists in tension. I agree. Allow me to explain.

Another thing you would have to agree with is the old paradox, “The only constant is change.” Change is inevitable. But, just a second ago we agreed that people resist changing. Can you see the tension?

Enter the entrepreneur. One of the main things entrepreneurs do is we help people to make good changes. So, if you wish to be a successful entrepreneur, you need to be comfortable with change. To that end, I have a little exercise for you.

Here is an exercise, I personally use, when faced with change. Whenever I encountered a change, in my life, I ask myself, “How can this be a good thing?”

As the beginning of this blog suggests, change equals opportunity. And, the reality is, you cannot capitalize on change if you do not ask yourself how any given change can be a good thing.

Let me give you two examples. One personal. The other more public.

First off, I use Realtor dot com a lot. Recently, they changed their search function and it kind of messed me up. However, I asked myself, “How can this be a good thing?” And, I kept trying to get the website to work for me.

It took me a little while, but, it turns out the new search method is actually much better, and more effective, for me. Make no mistake, when the site was changed I almost threw in the towel and went elsewhere. The only thing that helped me was the question, “How can this be a good thing?”

Now for my second example. Most of you will probably remember an old service called Napster. Back in 1999 a guy by the name of Shawn Fanning created a file-sharing software that came to be known as Napster.

Napster was the way many people illegally downloaded music. It turned into quite the ordeal. Many people in the music business thought their industry would be destroyed.

In an attempt to salvage their golden goose many record companies, and artists, banded together and started suing the downloaders. What these companies and artists were doing was a rear-guard action. They were trying to protect the past.

But, Apple Computer was smarter than that. The folks at Apple asked themselves some form of my question, “How can this be a good thing?” And, their answer changed everything. Today, iTunes practically owns the music business.

Tension is a reality of life. You are wired to fight against change. And yet, change is one of the few things you can reliably count on.

If you can overcome the Status Quo Bias, and begin to see change as the opportunity it is, you are moving in the direction of successful entrepreneurship. Good luck!

Entrepreneurship Explained Very Simply

What do true entrepreneurs do? They bring valuable innovations to the market.

Innovation is about making things better.

If you want to be an entrepreneur, a good exercise is to always ask yourself, “Can this be done better?”

When you find something that can be improved upon, and sold to people, you have one important hurdle.

You need to test it out.

That is to say, you need to prove there is demand for your concept. Some might call this a “Pilot.”

Get out there and see if people are willing to pay for what it is you have to offer.

If enough people are volunteering to buy what you've got, then it is all about distributing (selling) your product as quickly as possible.

Easy in theory. Difficult in practice.

Good luck!

Revitalizing Oneself

As we all know, the new year is a time of renewal. A time to begin anew. Any regular reader of this blog is familiar with my nearly ridiculous fondness for Peter Drucker. In honor of Profesor Drucker I would like to give this year's first blog to the man himself.

Drucker once wrote an article describing seven experiences that taught him how to grow, to change, and to age–without becoming a prisoner of the past. The contents of this article have been labeled Revitalizing Oneself. The remainder of this blog post are Peters' words.

I was not yet 18 when, having finished high school, I left my native Vienna and went to Hamburg as a trainee in a cotton-export firm. My father was not very happy. Ours had been a family of civil servants, professors, lawyers, and physicians for a very long time. He therefore wanted me to be a full-time university student, but I was tired of being a schoolboy and wanted to go to work. To appease my father, but without any serious intention, I enrolled at Hamburg University in the law faculty. In those remote days--the year was 1927--one did not have to attend classes to be a perfectly proper university student. All one had to do to obtain a university degree was to pay a small annual fee and show up for an exam at the end of four years.

THE FIRST EXPERIENCE

Taught by Verdi

The work at the export firm was terribly boring, and I learned very little. Work began at 7:30 in the morning and was over at 4 in the afternoon on weekdays and at noon on Saturdays. So I had lots of free time. Once a week I went to the opera.

On one of those evenings I went to hear an opera by the great 19th-century Italian composer, Giuseppe Verdi--the last opera he wrote, Falstaff. It has now become one of Verdi's most popular operas, but it was rarely performed then. Both singers and audiences thought it too difficult. I was totally overwhelmed by it. Although I had heard a great many operas, I had never heard anything like that. I have never forgotten the impression that evening made on me.

When I made a study, I found that this opera, with its gaiety, its zest for life, and its incredible vitality, was written by a man of 80! To me 80 was an incredible age. Then I read what Verdi himself had written when he was asked why, at that age, when he was already a famous man and considered one of the foremost opera composers of his century, he had taken on the hard work of writing one more opera, and an exceedingly demanding one. "All my life as a musician," he wrote, "I have striven for perfection. It has always eluded me. I surely had an obligation to make one more try.”

I have never forgotten those words--they made an indelible impression on me. When he was 18 Verdi was already a seasoned musician. I had no idea what I would become, except that I knew by that time that I was unlikely to be a success exporting cotton textiles. But I resolved that whatever my life's work would be, Verdi's words would be my lodestar. I resolved that if I ever reached an advanced age, I would not give up but would keep on. In the meantime I would strive for perfection, even though, as I well knew, it would surely always elude me.

THE SECOND EXPERIENCE

Taught by Phidias

It was at about this same time, and also in Hamburg during my stay as a trainee, that I read a story that conveyed to me what perfection means. It is a story of the greatest sculptor of ancient Greece, Phidias. He was commissioned around 440 b.c. to make the statues that to this day stand on the roof of the Parthenon, in Athens. They are considered among the greatest sculptures of the Western tradition, but when Phidias submitted his bill, the city accountant of Athens refused to pay it. "These statues," the accountant said, "stand on the roof of the temple, and on the highest hill in Athens. Nobody can see anything but their fronts. Yet you have charged us for sculpting them in the round--that is, for doing their back sides, which nobody can see.”

“You are wrong," Phidias retorted. "The gods can see them." I read this, as I remember, shortly after I had listened to Falstaff, and it hit me hard. I have not always lived up to it. I have done many things that I hope the gods will not notice, but I have always known that one has to strive for perfection even if only the gods notice.

THE THIRD EXPERIENCE

Taught by Journalism

A few years later I moved to Frankfurt. I worked first as a trainee in a brokerage firm. Then, after the New York stock-market crash, in October 1929, when the brokerage firm went bankrupt, I was hired on my 20th birthday by Frankfurt's largest newspaper as a financial and foreign-affairs writer. I continued to be enrolled as a law student at the university because in those days one could easily transfer from one European university to any other. I still was not interested in the law, but I remembered the lessons of Verdi and of Phidias. A journalist has to write about many subjects, so I decided I had to know something about many subjects to be at least a competent journalist.

The newspaper I worked for came out in the afternoon. We began work at 6 in the morning and finished by a quarter past 2 in the afternoon, when the last edition went to press. So I began to force myself to study afternoons and evenings: international relations and international law; the history of social and legal institutions; finance; and so on. Gradually, I developed a system. I still adhere to it. Every three or four years I pick a new subject. It may be Japanese art; it may be economics. Three years of study are by no means enough to master a subject, but they are enough to understand it. So for more than 60 years I have kept on studying one subject at a time. That not only has given me a substantial fund of knowledge. It has also forced me to be open to new disciplines and new approaches and new methods--for every one of the subjects I have studied makes different assumptions and employs a different methodology.

THE FOURTH EXPERIENCE

Taught by an Editor-in-Chief

The next experience to report in this story of keeping myself intellectually alive and growing is something that was taught by an editor-in-chief, one of Europe's leading newspapermen. The editorial staff at the newspaper consisted of very young people. At age 22 I became one of the three assistant managing editors. The reason was not that I was particularly good. In fact, I never became a first-rate daily journalist. But in those years, around 1930, the people who should have held the kind of position I had--people age 35 or so--were not available in Europe. They had been killed in World War I. Even highly responsible positions had to be filled by young people like me.

The editor-in-chief, then around 50, took infinite pains to train and discipline his young crew. He discussed with each of us every week the work we had done. Twice a year, right after New Year's and then again before summer vacations began in June, we would spend a Saturday afternoon and all of Sunday discussing our work over the preceding six months. The editor would always start out with the things we had done well. Then he would proceed to the things we had tried to do well. Next he reviewed the things where we had not tried hard enough. And finally, he would subject us to a scathing critique of the things we had done badly or had failed to do. The last two hours of that session would then serve as a projection of our work for the next six months: What were the things on which we should concentrate? What were the things we should improve? What were the things each of us needed to learn? And a week later each of us was expected to submit to the editor-in-chief our new program of work and learning for the next six months. I tremendously enjoyed the sessions, but I forgot them as soon as I left the paper.

Almost 10 years later, after I had come to the United States, I remembered them. It was in the early 1940s, after I had become a senior professor, started my own consulting practice, and begun to publish major books. Since then I have set aside two weeks every summer in which to review my work during the preceding year, beginning with the things I did well but could or should have done better, down to the things I did poorly and the things I should have done but did not do. I decide what my priorities should be in my consulting work, in my writing, and in my teaching. I have never once truly lived up to the plan I make each August, but it has forced me to live up to Verdi's injunction to strive for perfection, even though "it has always eluded me" and still does.

THE FIFTH EXPERIENCE

Taught by a Senior Partner

My next learning experience came a few years after my experience on the newspaper. From Frankfurt I moved to London in 1933, first working as a securities analyst in a large insurance company and then, a year later, moving to a small but fast-growing private bank as an economist and the executive secretary to the three senior partners. One, the founder, was a man in his seventies; the two others were in their midthirties. At first I worked exclusively with the two younger men, but after I had been with the firm some three months or so, the founder called me into his office and said, "I didn't think much of you when you came here and still don't think much of you, but you are even more stupid than I thought you would be, and much more stupid than you have any right to be." Since the two younger partners had been praising me to the skies each day, I was dumbfounded.

And then the old gentlemen said, "I understand you did very good securities analysis at the insurance company. But if we had wanted you to do securities-analysis work, we would have left you where you were. You are now the executive secretary to the partners, yet you continue to do securities analysis. What should you be doing now, to be effective in your new job?" I was furious, but still I realized that the old man was right. I totally changed my behavior and my work. Since then, when I have a new assignment, I ask myself the question, "What do I need to do, now that I have a new assignment, to be effective?" Every time, it is something different. Discovering what it is requires concentration on the things that are crucial to the new challenge, the new job, the new task.

THE SIXTH EXPERIENCE

Taught by the Jesuits and the Calvinists

Quite a few years later, around 1945, after I had moved from England to the United States in 1937, I picked for my three-year study subject early modern European history, especially the 15th and 16th centuries. I found that two European institutions had become dominant forces in Europe: the Jesuit Order in the Catholic South and the Calvinist Church in the Protestant North. Both were founded independently in 1536. Both adopted the same learning discipline.

Whenever a Jesuit priest or a Calvinist pastor does anything of significance--making a key decision, for instance--he is expected to write down what results he anticipates. Nine months later he traces back from the actual results to those anticipations. That very soon shows him what he did well and what his strengths are. It also shows him what he has to learn and what habits he has to change. Finally, it shows him what he has no gift for and cannot do well. I have followed that method for myself now for 50 years. It brings out what one's strengths are--and that is the most important thing an individual can know about himself or herself. It brings out areas where improvement is needed and suggests what kind of improvement is needed. Finally, it brings out things an individual cannot do and therefore should not even try to do. To know one's strengths, to know how to improve them, and to know what one cannot do--they are the keys to continuous learning.

THE SEVENTH EXPERIENCE

Taught by Schumpeter

One more experience, and then I am through with the story of my personal development. At Christmas 1949, when I had just begun to teach management at New York University, my father, then 73 years old, came to visit us from California. Right after New Year's, on January 3, 1950, he and I went to visit an old friend of his, the famous economist Joseph Schumpeter. My father had already retired, but Schumpeter, then 66 and world famous, was still teaching at Harvard and was very active as the president of the American Economic Association.

In 1902 my father was a very young civil servant in the Austrian Ministry of Finance, but he also did some teaching in economics at the university. Thus he had come to know Schumpeter, who was then, at age 19, the most brilliant of the young students. Two more-different people are hard to imagine: Schumpeter was flamboyant, arrogant, abrasive, and vain; my father was quiet, the soul of courtesy, and modest to the point of being self-effacing. Still, the two became fast friends and remained fast friends.

By 1949 Schumpeter had become a very different person. In his last year of teaching at Harvard, he was at the peak of his fame. The two old men had a wonderful time together, reminiscing about the old days. Suddenly, my father asked with a chuckle, "Joseph, do you still talk about what you want to be remembered for?" Schumpeter broke out in loud laughter. For Schumpeter was notorious for having said, when he was 30 or so and had published the first two of his great economics books, that what he really wanted to be remembered for was having been "Europe's greatest lover of beautiful women and Europe's greatest horseman--and perhaps also the world's greatest economist." Schumpeter said, "Yes, this question is still important to me, but I now answer it differently. I want to be remembered as having been the teacher who converted half a dozen brilliant students into first-rate economists.”

He must have seen an amazed look on my father's face, because he continued, "You know, Adolph, I have now reached the age where I know that being remembered for books and theories is not enough. One does not make a difference unless it is a difference in the lives of people." One reason my father had gone to see Schumpeter was that it was known that the economist was very sick and would not live long. Schumpeter died five days after we visited him.

I have never forgotten that conversation. I learned from it three things: First, one has to ask oneself what one wants to be remembered for. Second, that should change. It should change both with one's own maturity and with changes in the world. Finally, one thing worth being remembered for is the difference one makes in the lives of people.

I am telling this long story for a simple reason. All the people I know who have managed to remain effective during a long life have learned pretty much the same things I learned. That applies to effective business executives and to scholars, to top-ranking military people and to first-rate physicians, to teachers and to artists. Whenever I work with a person, I try to find out to what the individual attributes his or her success. I am invariably told stories that are remarkably like mine.