FailingCompany - Back to the Basics

What are you worth? Tough question, isn't it? How do you even go about determining your worth? What if I asked you something easier, like what's your business worth? That's easier. You can probably give me a pretty accurate answer to that question. Yet, your business is an extension of you and it's nearly impossible to quantify what you are worth.

I admit that was a bit of a dramatic opening to get your attention. Why? I've been wrestling with this concept a lot lately. Something as abstract as what we think we're worth can have a profound impact on how we live our lives and run our businesses. Sadly, many of us are walking around with a deflated sense of worth deep in our core.

We have an internal set point as to what we think we're worth. It's nearly impossible to articulate, but it's there and it's set just like a thermostat. It was usually set early on in life, often in childhood. We internalized negative feedback and that helped to lock our set point to where it is today. As a result, we achieve a certain level of success, then we hit a glass ceiling. It's not due to any external factor. It's the internal set point working to keep our external reality in alignment with our predetermined sense of worth, just like a thermostat regulates the room temperature.

Moving this set point is very difficult, but also very critical. If you run your own business, then your internal beliefs about your worth have probably spilled over into the pricing model for your products and services. As a result, it's possible that you're way undercharging for your products and services. You could be artificially limiting your business growth and without even knowing it.

It's worth the reminder that you're in business to solve some problem or fill some need / want. Your customers see great value in what you have to offer, and you deserve fair compensation for that value. It's easy to forget that when you live and breathe your business, but it's true, nevertheless. Sometimes it takes walking away for a bit to see the bigger picture.

I took my daughter on vacation earlier this month. We went to the Walt Disney World and Universal theme parks. There's no more blatant demonstration of charging for perceived value than going to these places. Prices are very high for everything and there is no shortage of customers. In fact, you wait in lines for everything. They even sell passes to people so they can by-pass the lines or wait in shorter lines! What a business model!!

These theme parks are designed to meet a need or want. People want to experience the interesting rides and tell others about their amazing experience. Parents need to feel like great parents, so they pay the inflated prices with a smile on their face. While in the park, there are additional needs to be met. Park guests need to eat and drink. The parks gladly oblige with mediocre meals for $15+, soft drinks for $5+ and bottled water for $3.75+. People line up to pay the prices with few complaints!

These parks intimately understand the value provided to their customers. The prices are set based on the value created, not just for the product of service itself. Are the rides worth the price of admission? It's debatable. Yet, few argue the price when it's compared to the memories created in the park and the smile on their kids' faces. These memories will last a lifetime!

The same goes for food and drinks. No one would argue that they are bargain or even high quality. However, people are paying for the convenience of being able to stay in the parks and quickly get to more rides to stand in more lines, not the food or drink itself. When that comparison is made, few truly complain about the prices. They just pay the high prices, eat and drink quickly and get back to the fun!

Places like Disney and Universal benefit from being large corporations. They employ lots of experts to perform in depth analysis on customers, buying trends, pricing models, etc. to land on price points that generate maximum profit while still delivering value to the consumer. The average small business owner does little to no pricing analysis when setting prices. Prices are usually set by the owner or partners based on their opinions, which are often emotionally driven and usually discount the value generated. That's where the game changes.

How do you make sure you don't underprice your products or services due to your own internal beliefs about worth? Analysis and market research is key. How are you priced compared to your competitors? Are you on the cheaper end of the price curve? If so, why? Does your product or service lack important features and benefits? Perhaps the lower price is appropriate. However, if your product or service is on par with your competitors at the top of the price curve, then it's time to consider a price adjustment.

Spending time to really understand the value that you create for your customers is instrumental in helping you lock in on a price. Once you really understand the value that you generate, begin fine tuning the price to more accurately to reflect that value. What you land on may feel uncomfortable and that's ok.

It's also helpful to evaluate your product or service and the proposed price through your own eyes as a consumer. Would you pay the asking price for the value you'd get out of it? If so, then it's likely that there are plenty of customers who would as well. Test it out.

The key is to land on an objective method for setting prices for your products or services. Something that takes your internal beliefs and emotions out of the equation. Over time, as you see your sales stay consistent or rise with the higher prices, you'll begin to internalize new beliefs about what you're, worth. Then pricing new products and services will become more intuitive. Forego an objective method and you may just see your business stagnate and profit margins erode year-after-year.

Finally realize that you've underpriced your products and need help setting a new price? Maybe you realized that you need to add some key features and benefits to your products or services to command a higher price? Check out FailingCompany.com to find the help that you need. Go sign up for an account or log in to your existing account and start working with someone today.

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Last week I hit on three key lessons that I learned from my daughter's first marching band season. As a refresher, those were: 1) Don't underestimate yourself, 2) Don't be too hard on yourself when you make a mistake and 3) Be open to trying new things. I did some reflecting and felt the need to add a fourth lesson today.

So, what's the fourth lesson from marching band? Play your part. Marching band is a team endeavor. Each team member has a role to play. When they play that role, things go well. When they try to play someone else's role or change what their role somehow, things don't go well. Pretty obvious, right?

You're probably thinking to yourself, well duh! Every sports team works the same way. You're right. It seems to be more noticeable to me for marching band, though. Most sporting events, like football or basketball, are organized chaos. You have to watch very closely to see if a team member steps out of line. With Marching band, precision is key. You very easily see if someone moves to the wrong position or is playing the wrong notes. You actually have to work hard NOT to notice it. Because of that, it helps to shine a spotlight on the need for real teamwork.

The teamwork for marching band extends beyond just knowing your spot on the field, where you need to march to next and what music you need to play. It requires each person knowing those things not just for themselves, but for every other person on the field at the same time. They work as a collective to produce the mesmerizing effects on the field during a show or competition. Each person playing a brass instrument knows how what their playing complements what percussion or woodwinds are playing. Likewise, they know where they are headed on the field and know their position relative to those around them at all times. Without this interconnectedness, the entire show fails.

The same goes for the pit crew, which is the team of band members and parents who help get the instruments and props on and off the field before and after the event. They are timed and have between 1 to 2 minutes to get the pit instruments and props in place before the show and the same time to break it down after the show. What happens if each person doesn't know their place? Chaos ensues and the entire show suffers.

The pit crews don't have defined roles, so they have to self-organize to get the job done quickly. The person in charge of prop placement doesn't try to help move an instrument onto the field until he or she has the prop in place. Then, and only then, can they break off to help with something else that's struggling. Precision is key. Sort of like having to put your own oxygen mask on in an airplane before helping anyone else with theirs.

This may seem like very basic knowledge to you. I hope it is. What it demonstrates is that teamwork is far more than just people figuring out how to work together and get along. Whether it's a marching band or construction workers building a skyscraper, true teamwork means precision.

Let's examine a high end Swiss watch for comparison purposes. The watch is made of tiny components manufactured to extreme tolerances and assembled to work perfectly for decades. Each tiny component, such as a gear, spring, etc. must fit together and work perfectly with its related components to achieve second or sub-second precision in tracking time. That level of precision is what's need for extremely high performing teams.

High performing teams are not only precise, but they form a system. I define a system as a set of interrelated parts working together is an orchestrated manner to accomplish a specific goal. Each person on a team has a role to play. His or her role either compliments the role that someone else is playing on the team or serves as a direct input to the work that someone else must perform. If one person's output is off the mark, it's similar to a machine in the middle of an assembly line breaking down. Everything comes to a halt or quality issues go through the roof.

Let's look at an example of how one person compliments another. Maybe one person is designated a neutral facilitator during all the team meetings and brainstorming sessions. If he or she does a good job, then everyone else will have equal opportunity to state their point of view and submit their ideas. If they fail to facilitate properly, then some of the team members are left without an opportunity to be heard. The team could miss out on a suggestion that solves a major problem they've been dealing with, all because the facilitator did a subpar job.

An example of one person's work feeding into another person's work is much more common. A designer must design a part before the machines can be set up by someone else to manufacture the part. A writer must write an article before the editor can edit it. An analyst must gather business requirements before a developer can create a software solution to meet the business need. The examples are endless, but the results are the same. If one person fails at performing their role in a precise manner, then the effect is felt throughout the system and the entire system can break down.

Admittedly, the topic of teamwork has to be one of the most fundamental lessons to learn in business. Most of us learn about it starting in grade school. However, few ever stop to think about what a high performing team really looks like. Seeing teams as a system made of precision components working together always helps me to focus on the importance of each and every member of the team. I'm sure there are lots of other analogies that are just as effective, but hopefully this one helped you see teamwork in a new light.

Building a high performing team and need to add a few experts? Maybe you need help getting a new team through the developmental stages so it can perform with a high-level of precision? Check out FailingCompany.com to find the help that you need. Go sign up for an account or log in to your existing account and start working with someone today.

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My daughter joined Marching Band this year. More specifically, Color Guard. There are several new members, which means they needed to go through the full process of forming a team all over again. Practice started in the middle of July and hasn't stopped since. I've also gotten involved in the logistics for the competitions, which I hadn't planned on and quite frankly didn't think I had time to do. Why does any of this matter?

I've learned some valuable lessons during this marching band season. I'm sharing the top 3 with you today. 1) Don't underestimate yourself, 2) Don't be too hard on yourself when you make a mistake and 3) Be open to trying new things. Let's dig into them now.

Lesson 1, Don't underestimate yourself. I watched the Marching band transform from a group of kids figuring things out to a competition worthy team in just a couple of short months. They learned how to march, perfected their show routine, polished up their musical parts and learned how to twirl flags in a very short time after school each day. That's amazing progress.

All of us, not just kids, tend to underestimate what we are capable of learning or accomplishing. We have all sorts of excuses on why we can't try something. We're too old, too young, too short, not fit enough, don't have a college education, never worked with power tools before, etc. These kids set aside all excuses and said they were going to go for it...and they are succeeding! What can you accomplish if you just quit making excuses and actually try something that you've been talking about for weeks, months or years??

Lesson 2, Don't be too hard on yourself when you make a mistake. I noticed that the kids were their own worst critics. They picked apart every little mistake they made on the field. In one particular example, a boy complained about how he played a drum incorrectly. Nobody else noticed and the team actually won #1 for percussion at that competition. Why did he beat himself up over something that clearly didn't matter?

Most of us are too hard on ourselves. We notice all of our mistakes because we make them. The people around us often don't even notice. Unless it's a material mistake where someone gets hurt or the business loses customers, money, etc., then most people aren't even going to remember in a few days. It's simply a learning opportunity. Learn the lesson and move on. Save your energy for more productive endeavors rather than dwelling on a past mistake that can't be corrected!

Lesson 3, be open to trying new things. I was insistent that I had no time to volunteer with Marching Band. I had more important things to focus on. Then I went to the first booster meeting and learned how just a few parent volunteers orchestrate the whole show from a logistics perspective. I started with volunteering to help get instruments on and off the field at competition. I'm now showing up at school to load the box trucks, help unload them at competition, get things on and off the field and then get it all back to school afterward. I thoroughly enjoy it and the kids are starting to learn who I am. If I hadn't let my guard down and said yes to helping, I'd be missing out on great memories.

My daughter also helps to reinforce lesson 3. She decided she wanted to be in marching band and went for it. Just a month before she told me she had no desire to be in Band or Marching Band. She's now in both. Why? She decided that the experience was greater than whatever was in her head that was holding her back. She's doing fantastic in Color Guard and I see her personality really opening up as her confidence grows. Something that benefits all ages.

Actually, my example ties into lesson 2 as well. I'm a novice at all the band logistics stuff. It shows how we can be experts in parts of our lives while being incredibly green in other areas. I've made mistakes and one was particularly noticeable. It happened while helping to get the props onto the field prior to their show. I thought I cost them points for my newbie mistake and really beat myself up for it afterward. Nobody said anything to me about it. Not one comment. Truly, fewer people probably noticed than I imagined in my head. Either way, it wasn't the end of the world. My energy should have been invested in supporting the kids rather that replaying my goof up over and over again. It solved nothing!

We all have areas in our lives where we're reluctant to try new things. How many things have you said you want to do in your business or career and never did because you were too busy? That new business you wanted to start, the new product line you wanted to launch, the skill you wanted to learn, etc. What would happen if you let your guard down and said it's now or never? Could you double your business in a year? Grow you career with new skills and get that big promotion? All that it takes is saying "yes" where you've been saying "no." Can you do that?

I'm sure I'll learn many more lessons before the season wraps up. Can you see how these lessons fit into one or more areas of your life? If middle and high school kids can clearly demonstrate these lessons, don't you think you, with all your life experience, can too? It simply takes a decision to not hold yourself back. Get that behind you and you'll surprise yourself what you can learn or do, how little anyone else cares about your mistakes and how amazing it can be to do something new!

Recently decided to try something new and need some help executing? Maybe you actually did make a mistake and just need help getting it fixed quickly? Check out FailingCompany.com to find the help that you need. Go sign up for an account or log in to your existing account and start working with someone today.

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I recently listened to an audio book that really resonated with me. The book wasn't specifically about business but did hit on topics that are relevant to the business world. There's one particular topic that seemed to fit well with past posts that I've made, so let's talk about it this week.

The topic was about boundaries. We've all probably heard about setting boundaries in relationships or with relatives. People must know what's acceptable to you and what isn't. How many of us actually set boundaries in our professional lives? It almost sounds a little scary when you think about the possible ramifications, but it's really not.

Boundaries in our professional lives are critical. If you work for someone else, you need to be clear with your employer what you're willing to do and what you're not, your expectations around compensation and raises, promotions, etc. It should be something that's discussed openly, agreed upon and regularly reviewed. If you run your own business, the same should occur with your clients, your employees and even your suppliers. Be very clear with what will make you walk away and be ready to stick to it.

I'm obviously not talking about being a jerk. If you work for someone, I'm not saying to NOT go above and beyond for your job. That would be career suicide. However, if something seems unethical to you and ethics are clear cut black and white thing in your mind, then you need to be clear up front. If you are an amazing worker and know that you're worth material annual pay raises, it should be made clear what you find acceptable. Same for promotions. Doesn't mean you'll actually get them, but you shouldn't hide them.

If you run your own business, your customers or clients should know what you will and won't tolerate form them. This could be how they treat your staff, the amount of post-sale support you'll provide, your expectations around timeliness of payments, etc. They should have a clear understanding of what can and can't be done. The same for your suppliers. Make it clear how flexible you are with late deliveries, out of stock inventory, price increases, etc.

This probably seems like basic stuff, and it should be. However, most people fail in one or two area. The first is that they never explicitly communicate their boundaries and simply assume that they should be known. The second is that, even if the boundaries are communicated, they rarely do anything when they are crossed. As such, they are little more than wants or desires.

The key with boundaries is to consistently enforce them. This includes walking away from a job, client or supplier if needed. Always have a backup plan but do what you say you're going to do. People will begin to respect your boundaries and work to accommodate them as long as you keep creating tremendous value. However, if you begin to let your boundaries slip then people will lose all respect for them.

Let's say you work for an employer and are a super star. You know you deserve a promotion. You can secretly want a promotion and not say anything, you can meekly ask for a promotion, or you can state your case for why you've earned it & what you're willing to do if the company can't accommodate. Which has the greater chance of earning the promotion? The last option, because you're clearly communicating your boundary and what will happen if the boundary is crossed. Be ready to walk away if they say no, but your odds are much higher. If you are told no, then you had no chance with the first two options either and would have worked a dead-end job for months or years with no promotion.

Another example is that you have client who is always asking for extras and tries to see just how much they can get for free. This is eroding your profits. You can simply keep saying yes or you can set a boundary. Perhaps you communicate that you can accommodate the extras this time, but it's a one-time thing. In the future it will cost extra because you have a business to run. If that's unacceptable to them, you understand and will wish them good luck in the future. Think the client will keep trying to get extras in the future if you've set that clear of a boundary? Maybe once or twice. Stick to your boundary and the problem will either be solved by them paying for the extras or you'll lose an unprofitable client.

Obviously, this is basic stuff. It's having the guts and backbone to actually stand up for what you want that's important. If you don't, you'll continue to get walked on. The wants and needs of others will always be placed before your own. Become resolute in what you deserve, and people will respect it. It's your choice in how to live your life.

Has enforcing boundaries opened up opportunities to work with better business partners? Maybe you need a little help with enforcing boundaries in your management practice? Check out FailingCompany.com to find the help that you need. Go sign up for an account or log in to your existing account and start working with someone today.

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