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Critical clarity: customers and culture

Monday, August 31, 2015

I recently read a comment in Patrick Lai’s book, Business for Transformation – Getting StartedHe said “before producing a product, ensure that you have customers first.”  That got me thinking about culture and the key role it plays in any business endeavor.

Culture is the values and practices shared by the members of group.  The business culture determines how different levels of staff communicate with one another as well as how employees deal with clients and customers.  A strong culture flourishes with a clear set of values and norms that actively guide the way a company operates.

Corporate culture is a hot topic these days, and is no longer considered a fluffy, touchy-feely component of the business.  It is an important driver of strategy and is the environment in which the brand thrives or dies.  We all are aware of the unique culture of Southwest Airlines, Zappos.com, Whole Foods and Starbucks. The culture glues the company together, engenders a sense of pride and endears itself to the customer.

Every owner and manager must assess his company’s culture in order to determine what it is.  I discovered one of the best ways is to ask and to listen – to employees, suppliers, customers.  Some of the factors which are important are clarity of mission, employee commitment, empowerment, integrity, strong trust relationships, effective systems and policies, customer focus, 360-degree communication, high accountability, support for innovation and many more.

Peter Drucker is quoted as saying, 

“Culture eats strategy for breakfast.”

One time when I was responsible for about 45 employees I realized that most of them had regular contact with customers and overseas employees. I was very concerned about how we treated each one.  I set about designing a strategy to align everyone with a plan for optimum treatment of those customers.  

Over the past few years there has been much written about “the customer is king.” For example, the lean start-up strategy method strongly suggests that “while existing companies execute a business model, start-ups look for one.” 1 And where do they look? To the customer! Steve Blank suggests:

  1. Instead of a well-planned business plan, begin with a series of untested hypothesis which essentially are guesses of how a company can best create value for its customers.
  2. Use a “get out of the building” approach to customer development to test the hypothesis.  Go out and ask potential users and purchasers for feedback.  By using customers input, lean start-ups then revise their assumptions.
  3. Lean start-ups practice agile development to form a Minimum Viable Product (MVP).  This revision toward a product is called a “pivot”.  Each stage is customer driven and is iterative, picking up from failures in the pursuit of success.
These quick rounds of experimentation and feedback are customer focused and are definitive of the culture of a lean start-up.  Although Microsoft is hardly a lean start-up, CEO Satya Nadella is attempting to apply such a culture. “The only thing that I value and look for in other leaders really circles around the notion of: are they creating clarity and energy and are they a learner?  If you are not curious, open to learning, raising your own game, admitting your own mistakes, then I think you stop doing useful things at some point.”  Nadella sees culture as key at Microsoft.

The annual Booz & Company study indicates that spending more on R&D alone will not drive results.  The most crucial factors are a strategic alignment and a culture that supports innovation.  There may be no more crucial source of business success or failure than a company’s culture – it trumps strategy and leadership. And there are clearly two “Top Cultural Attributes”: 1) Strong identification with the customer and an overall orientation toward the customer experience; 2) Passion for and pride in the products and services offered.2

End customers play a defining role in determining future product needs.  Those that use a “Need Seeker” strategy have an advantage.  They directly engage current and potential customers to help shape new products and services based on end-user understanding.  Apple is the classic example of a company following the “Need Seeker” strategy.

CD Baby founder Derek Sivers says, “Never forget that absolutely everything you do is for your customers…it’s counter-intuitive, but the way to grow your business is to focus entirely on your existing customers.  Just thrill them, and they’ll tell everyone.”  Sivers had one mantra, “I am just trying to help musicians…and I had to keep the customers happy.”3

"To do more for the world than the world does for you – that is success!"

Henry Ford

1 Blank, Steve. “Why the Lean Start-up Changes Everything.” Harvard Business Review, May 2013.
2 Jaruzelski,B; Loehr; J, Holman,R; “Why Culture is Key.”  Strategy+Business, Winter 2011.
3 Sivers, Derek.  Anything You Want. Do You Zoom, Inc. 2011.

Larry W. Sharp, Director of Training, IBEC Ventures

Recommended read: "Business for Transformation – Getting Started"

Monday, August 24, 2015

Patrick Lai is a thought leader and a proven BAM entrepreneur/practitioner of Business for Transformation (B4T), a term closely related to Business as Mission (BAM).  In his second book, Business for Transformation – Getting Started, he talks about authentic businesses which are profitable and sustainable, create jobs, and bring people to follow Jesus.  It is filled with practical cross-cultural wisdom as well as stories from his many years of experience in Asia and around the world.  

This book is a necessary read for those starting businesses overseas for Kingdom purposes and for those who serve these businesses as mentors, consultants and subject matter experts.  It focuses on the question “How do you start a business that transforms communities of unreached peoples?”

If some of these quotes intrigue you, determine to read and benefit from this book:
  • Excellence is defined first by the person, then the product.
  • The ultimate bottom line of transformational business is the greater glory of God…our ‘market’ is more than product or service.  It is the people and culture we engage…
  • B4Ters model Kingdom values in the way they work or run a business and the way they relate to others in the community.
  • Business constitutes ministry in and through its daily activities.
  • A B4T business is ultimately going to be judged by two factors: its impact on the local community and its profitability.
  • “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.”  Alan Toffler
  • Get out there and fail!  The faster you fail, the faster you learn; the faster you learn, the faster you will succeed.
  • Instead of focusing on what you want to be or what you want to achieve, think about what it is that someone else truly needs.
  • Work is not a penalty, but a blessing.  “I love my job! When I am at work I get to be with all these people. It’s eight hours of opportunities to be Jesus to my employees – I wouldn’t give that up for anything.”  Bill
  • “Don’t sit down and wait for opportunities to come.  Get up and make them!”  C.J. Walker
  • “You don’t learn to walk by following the rules, you learn to walk by doing and falling over.”  Richard Branson
  • “An intelligent man is always open to new ideas; in fact he looks for them.”  King Solomon
  • Before producing a product, ensure that you have customers first.
  • The business should be adding value to the local community in ways that the locals, and especially the government, appreciate.
  • “God works as long as His people live daringly. He ceases to work when they no longer need His aid.”  A. W. Tozer

Larry W. Sharp, Director of Training, IBEC Ventures

Lessons from Microsoft @ 40

Monday, August 17, 2015

For sure there are many lessons from the 40-year history of Microsoft. Clearly they are a gigantic success and I will highlight just three lessons here in hopes they will provide insight for all of us in the startup world.

I travel to and through Seattle quite often and took note recently of “Microsoft at 40” articles  headlined in the business section of the Seattle Times.1  

I often think of the late sixties when I was packing COBOL cards around my university in Seattle while just a few miles away the teenage genius Gates was beginning to change the world. Many articles have detailed the history of Microsoft and books have been written about both Gates and the company.  But these lessons intrigued me recently.

1. Failure is often the stepping stone of success.

Have you ever heard of Traf-O-Data?  Probably not.  It was a computerized machine for processing paper tapes from traffic counters.  The goal was to end traffic congestion and the prospective customers were state and county governments.  We would never have heard of it except for the fact that the two people involved were Paul Allen and Bill Gates.

Their only demo was a failure as the tape reader malfunctioned and the sale was lost.  It never became a product until turned over to Paul Gilbert.   According to Allen, this failure “…was seminal in preparing us to make Microsoft’s first product a couple of years later”. Thus in 1975 when Gates was 20 years old, they had learned from the failure of Traf-O-Data and Microsoft was founded.

Says Gates, “It's fine to celebrate success, but it is more important to heed the lessons of failure.”

2. Every company, even Microsoft,  must guard against complacency.

This year Microsoft’s CEO, Satya Nadella is piloting an effort to keep the company relevant against fierce competition from Silicon Valley.  Probably the shift to mobile and web-based devices is the biggest challenge Microsoft has ever faced.  Since the smash hit of the iPod, Microsoft has been chasing Apple.

All successful companies get complacent.  Michael Cusumano, an MIT business professor, suggests that Microsoft was hampered by its focus on the PC, after all it had achieved its goal of having 1.5 billion people using Windows.  They were asking “what’s next?”  As a company becomes successful they must be careful that innovation does not get squeezed as they focus on protecting the successes. The purchase of Nokia’s handset division had the goal to allow Microsoft to go head-to-head with the iPhone, but the deal has been a disaster with some sources indicating Microsoft has had to eat more than $7 billion in losses.

Harvard professor, Clay Christensen insists that all companies must foster disruptive innovation, meaning to create new value networks which transform historical technology into new need-based products and services which are affordable and universally prevalent in new markets.  Such advice is important for startups and large companies alike.  Listen to Christensen’s argument.2

3. Executives must not be afraid to re-structure and re-focus.

Five months after being named Microsoft’s third executive, Nadella announced the layoff of 18,000 people with a reorientation toward its fast-growing cloud computing units.  Nadella was not afraid to admit the complacency referenced above and do something about it.  He is seeking to energize the culture and spark new innovation.

Time will tell if Microsoft will continue to lead in some software sectors and catch up in others.  Much of the answer will depend on its ability to understand and respond to consumer-technology shifts in the coming decade.

And so it is with overseas Business as Mission companies. Money and time spent in understanding the customer is vital.  It is all about the customer as without them, there is no business.  And customers demand that companies understand them and their needs.

1 Day, Matt (2015).  “Microsoft at 40.”  The Seattle Times (May 24): D1 – D6.

2 http://www.claytonchristensen.com/key-concepts/

Larry W. Sharp, Director of Training, IBEC Ventures

Leadership lessons for my grand kids – part 2

Monday, August 10, 2015
Last week I highlighted five principles of leadership I wanted to pass on to my grand kids.  They apply to a profit-making business, not-for-profits, charities, a team and just about anything.  This is Part 2.

1. Figure out how God made you and spend your life developing that.  

When I was in my twenties I joined an agency and together with my wife moved to Brazil.  By that time of my life I was starting to think that my wiring was for management with some capacity to teach.  However there was considerable pressure in the agency to do tasks that were more “sacred” in nature.  I knew that I wanted to please God in all things but in my second year in Brazil, I was given the challenge of leading a high school in Belem, Brazil.  Sometimes people wondered why I wasn’t out on the frontier reaching people who were in the jungles, but occasionally someone encouraged me in my leadership functions.  Through this I discovered that it is important to not try to be someone you aren’t meant to be.

Mason Hawkins, a friend of Warren Buffet says, “…the thing I admire most about Warren is his passion in knowing what his strengths are and keeping his focus on those strengths.”1 This focus on playing to his strengths lies at the heart of Buffet’s success.

2. Work hard to choose the right heroes.  

My father was very strong about this while I was growing up.  He talked often about choosing the right friends and good heroes.  Since sports was important to me, my father often talked of character, and not skill and charisma only.  One lesson he insisted on was to hang out with people better than me who will help me improve; hang out with people who behave worse than me and pretty soon I will become like them.

When I was in university in the 1960s, the hippie movement surfaced and it seemed focused on the anti-war movement and the drug scene.  I knew I needed a hero and someone to be my mentor.  I found this person in a WWII hero like my dad who was a school teacher near my university.  I had lunch with him and his family weekly and we discussed what was going on in the world, how I should think in relation to my studies, and how I should live.  That relationship was key to my survival and growth in college.

3. Learn to manage your time and eliminate distractions.  

Many people call me organized and some people think I should be more of a people person.  I have tried to have a balance between work and leisure, but this lesson reminds me that I was often distracted and lost control of my time.  I remember that when I led school teacher meetings and also team meetings in a not-for-profit, I would let the discussion go randomly according to people’s interest.  This usually led to lack of productivity, frustration and wasted time.  I learned finally to have an agenda, predict potential outcomes and hold people (including me) accountable for their time talking.

It is said that Bill Gates manages his time with detailed precision, such as “6:47 shower” and “6:57 shave.”  This is beyond what most of us should do.  But it is healthy to plan your day and learn to say “no” to things that do not contribute to the results you wish to accomplish that day.

4. Seek to bless others and help them improve.

 I once heard Daniel Gunaseelan, Founder and CEO of the successful Gateway Ventures (a leading supplier to the gas and oil industry) in Asia say, “…it is all about how I can be a blessing.”  Mark Russell in his book The Missional Entrepreneur 2 says essentially the same thing about business owners in Asia who endeavored to operate businesses which were holistic, focusing on every element in the lives of their employees and community.

This lesson came to me when I discovered that some of my employees were afraid of me.  I was shocked when I discovered that their perception of me was that it was “all about the job”.  They did not see me as their advocate in any way, or that I wanted them to develop.  I started to change my outlook on my colleagues when one day a Swiss teacher in our international school just outright told me that she was scared of me.  After that I determined to bless people and empower them to be successful. This lesson is one that can be developed at a very young age.

5. Hold firmly to foundational values and determine to follow them.  

Most of us know that values of integrity, trust, faithfulness, love, perseverance, fairness, etc. are important; but practicing them can be a challenge sometimes.  Often we can be tempted to exaggerate something to make it seem bigger and better.  When I was young, sometimes I exaggerated my successes on the hockey rink; and when I was a truck driver in the summer while in university I sometimes exaggerated the size of the trucks I drove or the number of hours on the road.  Later it became easier to exaggerate the size of the student body (rounding up of course) or the budget of our school.  I had to stop it.  Integrity has become important to me and I try to remember not only my spiritual roots but also Harry Truman’s quote, “Do right and risk the consequences.”

My father would remind me (and Warren Buffett also has stated it) that “It takes 20 years to build a reputation and just five minutes to ruin it.”  Be a person of integrity – always!

1 https://www.linkedin.com/pulse/ive-followed-warren-buffett-decades-10-quotes-what-i-keep-green
2 Russell, Mark 2010, The Missional Entrepreneur, New Hope Publishers, Birmingham, AL.

Larry W. Sharp, Director of Training, IBEC Ventures

Leadership lessons for my grand kids – part 1

Monday, August 03, 2015

I’ve been blessed with some incredible opportunities in life.  While I regret not taking full advantage of all of them, I’m thankful for what God and others have taught me over the years about that which I have been called to do – run stuff!  

I’m also called to teach and to inspire others to use what they learn for the betterment of the world. With that in mind, I recently sat down to write to my grandchildren, sharing with them leadership lessons I’ve learned through a lifetime of experiences, both failures and successes. 

If you are called to run stuff too – whether a business, a team, a not-for-profit, a church or whatever – I hope that my experiences and the lessons I’ve learned from them will help you too. Here’s Part 1 of “Leadership lessons for my grand kids”:

1.    Others are often better at something than you are – get over it!

While growing up, I loved ice hockey and worked hard to become skilled at it.  I was even deluded to think I could go pro someday.  While in junior high school, two of us, Steve and I, were invited to play on a local men’s team.  Steve was two years younger than me but he was much better.  We played on various teams together into our college years, but even though I was captain sometimes, I had to realize I was not always the best player.  As a leader, my role was to be complementary and to help others to be successful.  It took me a long time to learn that but it is an important principle of leading any kind of team – and of leading a business.

2.  It is important to trust people on the team to do their job.  

I was a school principal for a number of years.  When I started I wanted to help Judy teach her 3rd graders.  I thought I knew all there was to know about classroom learning – since I had been teaching high school for several years.  How foolish!  But after a while I learned that Judy was one of the best 3rd grade teachers in the world.  I finally learned to trust her to do her job, and I learned to say, “Judy, if I can help you get a resource you need or help you in any way, please let me know.”  When we are on a team, or working together with others in a school – or in business – we must trust others to do their job.

3. Get to work early – before others.

I thought at one time that this was just my nature, but before long I learned that other people noticed – and cared.  In heading up a mission agency in Brazil, I learned that the expats and Brazilians alike took note and realized they could come and talk to me at that time and pretty soon they started to come on time to work; sometimes a challenge in Latin America.  There is nothing like demonstrating what you expect in the workplace – it works far better than telling someone to do something – no matter if it is in school, church, a sports team or business.

4. Look around for ways to improve a situation.

Most of us do not start with the ideal job or ideal position within an organization.  I remember my first day on the job in a fish processing plant in Alaska. The boss told me to sort fish eggs – millions of them (called roe and considered a delicacy in Japan).  I did this for half a day and I had a headache by noon; and I began to think that there had to be a better way to make a living.  So at lunch hour, I asked the guy beheading fish, if he could teach me how to ‘head’ a fish since that looked like a gravy job to me.  Pretty soon I was heading fish (which turned out not to be the best job either).  However, I looked around again and thought I would like to learn to drive the forklift – which I did.  It was not long before I could do most jobs in the plant.  The next summer I was a foreman and the next year after that I was the plant manager.

5. Always try to understand others by listening and asking questions – be a learner.

Nine years ago I started IBEC, a Business as Mission consulting group.  Since doing so I have met lots of really interesting and skilled people – vice presidents of Fortune 500 companies; people who have started their own companies; attorneys experienced in foreign affairs; bank vice-presidents; pastors who understand BAM; theologians; entrepreneurs and college presidents.  I had a lot to learn from such people. I had to learn from them even though I may have learned enough to get by in my job. I realized there is always a lot more to learn.  For example I learned from Ken that we do not have a business unless we have customers!  Duh – right!  Why didn’t I think of that?  We always need to listen to others, be lifelong learners and ask honest questions.

Larry W. Sharp, Director of Training, IBEC Ventures

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IBEC Ventures -- Consultants for BAM/Business as Mission