10 Golden rules to survive the Global Crisis in Small Business

Global crisis.....Local Bonanza

10 Golden rules to survive the Global Crisis

Roland Hanekroot New Perspectives Business Coaching http://www.newperspectives.com.au email roland@newperspectives.com.au, ph 0404490012

Ominous Clouds gather on the Horizon, the talk is of Doom and Gloom, an enormous Storm is heading this way, and one thing seems quite certain... there are no certainties for the coming year in small business.

Anyone can make money and have a successful business during the good times, but now that the rug has been pulled out from under us, courtesy of the insane behaviour of large institutions around the world... You are about to find out how good your business really is.

The Paddlers
In any financial storm there are lots of shipwrecks, but you will always see three groups of people during and after the storm:
1) Those who freeze and drown
2) Those who cling on to a piece of flotsam hoping they will be rescuedAnd then there are those who go looking for the upturned rowing boat, manage to right it, find something to bail the water out with and paddle to shore
3) by themselves.

Who do you want to be?
The paddlers don’t just survive; when the sun comes out again they are the fittest, the healthiest and they may even have gained strength through the ordeal. The paddlers are best able to take advantage of the new opportunities when they arrive back on shore.
Long term successful businesses have usually come through several storms, not by clinging on and hoping for the lifesavers to arrive, but by making it happen themselves.

How do you get to be one of the strong survivors?

These are 10 Golden Rules to ensure you come through the storm as one of the paddlers:
1) Get very very clear on what your Core Business is, and what your competitive advantage is... and focus on it... totally.
2) Slash overheads, slash debt, wherever you can.... Cash is king
3) Collect, collect, collect and collect some more... Cash is king
4) Ruthlessly Cut away the dead wood, the hangers-on, the time servers... but…
5) Really generously and personally look after the people you want to have with you when the storm clears.
6) Make it as easy as possible for your favourite Customers to continue to support you (that doesn’t mean grovelling by the way!)
7) Be on the lookout for Opportunities to expand after the storm... there will be plenty of competitors who are dying for a helping hand.... give it to them... it is the right thing to do and there is nothing wrong with building up your stock of favours.
8) Don’t panic... take your time... assess calmly... negotiate.... everyone is going through the same storm.
9) Plan for the future, Planning is key.
10) And finally... don’t try and do it all by yourself...now is the time to get all the support you can get... Now is the best time to talk to your accountants, your mentors and to get a business coach by your side.

Please contact me to arrange a valuable free consultation about how to prepare for the heavy weather ahead, and how to ensure that you will be one of the Paddlers.

Roland Hanekroot New Perspectives Business Coaching http://www.newperspectives.com.au email roland@newperspectives.com.au, phone 0404490012

Hard work never made anyone Rich!

Hard work never made anyone rich

Or the lessons I learnt from a fallen tree

By Roland Hanekroot, New Perspectives Business Coaching
I went for a big bushwalk by myself recently. One of the reasons for doing so was because I felt stuck writing this article. While listening to the birds, enjoying being by myself in the bush and giving my brain some space away from my business, I found the missing link that allowed me to become unstuck.

Walking along in the National Park, I stumbled on an enormous fallen tree, blocking the path ahead completely. It was muddy everywhere, but I felt like a rest so I decided to sit down on the tree. As I was eating my apple I noticed that the tree had been down for a long time and it had become a whole ecosystem in itself of lichen and moss and fungi and ants and beetles. The more I looked, the more fascinated and inspired I became about the system of life and abundance in and around the tree.

I moved on again but the only way ahead was to climb across the tree. After spending 15 minutes observing the tree so closely I realised that I had to climb across it with great care and attention so as not to disturb and destroy the beauty of the tree. As I continued my walk I started thinking about the tree, its beauty and the important lesson I had just learnt by taking the time to observe this particular obstacle closely.

Nearly every time I work with my clients at some point we come across the same two obstacles on the road to continued business development: The number of hours in a day and the number of cells in our brains, and as in the case of the beautiful tree across my bush track, the only way forward is to appreciate the beauty of these obstacles and learn to see them not just as obstacles but as the most valuable resources in your business.

Juggling Jane
You may recognise all or part of this scenario: Jane, is the owner of JW Solutions: Business is growing, Jane is happily spending more and more time fulfilling her contracts and extinguishing the ever present number of brush fires. Her customers love JW Solutions and the personal attention they get from Jane… and Jane is pleased with herself for keeping all the balls in the air… she is buzzing.

And things progress apace… until… “Oops”… One of the balls crashes on the floor…”Bugger, I won’t fix this with a bunch of flowers… I suppose you can’t win them all… I just don’t seem to have the time to supervise properly these days… better start doing some of those non-critical things in after hour’s time… Focus on the guys delivering during the day… Haven’t had a holiday for while… ah well cash is a little tight anyway… next year…”

Slaves to the business
And so it goes, For Jane and for you; you work harder, longer hours, weekends…”Business doesn’t stop just because I take a day off!”

But in the back of your head you can feel this little voice that says: “Wasn’t this business supposed to be something that worked for you? Wasn’t it supposed to give you freedom? Instead, have you actually become its little slave?”

“Nonsense” says Jane, “I just don’t work hard enough… after all,
“No-one ever died from hard work… right?””

Right indeed, but no-one ever got rich from hard work either …

No, the most effective way to get rich in a business is not to work harder, but to employ more people producing more products or services. We all know that of course, it is one of the reasons we are in business in the first place. But as you develop your business on this model, you will at some point be confronted by those twin obstacles of time and brain cells and you may, like Jane and like many before you, get stuck.

How you manage to get unstuck and how you interact with those obstacles in the middle of your path determines where your business will get to and if it truly starts to deliver the freedom and personal reward you want from it.

Stop and observe
When you do come across these obstacles in your path, instead of running faster, pushing harder and yelling louder, I would like you to stop for a minute instead. Take a breath and observe the striking beauty of the obstacles, just like I did when I came across the fallen tree.

You see, the missing link I found while being in the quiet space of the bush is this: The reason these same two obstacles appear for you and every small business owner that ever was is that your time and your brain cells are the ONLY truly scarce resources in your business, you simply can never go out and buy some more of them. At the same time, your business can not survive without being constantly fed with your time and your brain. Therefore they are far and away the two most valuable assets of your business and at the same time their scarcity is also what causes them to become obstacles.

The work of the business owner
Scarce resources need to be protected and once you truly start to value your time and your brain cells, you will start to let go. Because with every demand on your time or your brain you will first ask: “Does this actually need to be done by me? Is there anyone else who can do this? Does this need to be done at all?” You will want to use your time and your brain only for the “Work of The Business Owner” instead of the “Work of the Business”.

This is how you will build the beauty of the tree into your business.
I appreciate that this is a big change for you. Most business owners never make this change, and they remain stuck.

Don’t think you have to make this change in one fell swoop though; all I want you to do from here, to set out on the road to becoming a True Business Owner… is to actually get ON the road and take the first little step.

Little Step 1: A good first little step to take to start on this road is to set aside 1 hr a week for “Business Owner Time”, during business hours, at the same time every week, blocked out in your diary.

Don’t worry about how to use this time… just block it out first. At the appointed hour, turn off the phone, turn off the email, turn off the mobile, you might actually leave the office, go to a café, or sit in the park, but do not take any calls, emails or anything else, (except from your spouse of course)

You can do this!

Let me assure you, every business owner can do this and nearly every client I have ever worked with has tried to convince me that there was some special reason why they couldn’t possibly do this… but they could and they did… because it is an absolutely critical first step, and basic to the long term development and viability of your business.

Later you will need more than an hour a week but start with this hour first.

Little step 2: What do you do with this hour? This hour is business development time; It is strategic work; It is the work that no-one besides you, the owner, can do; and it is the best, most powerful use of that most valuable resource in your company…Your time.

To start with, just use the hour to think, sit and think, or walk and think, drink coffee and think, think with a piece of paper and pen or think in the park. Think strategy, think future, think big picture, think plans, think about where you want the business to be in a year, in 5 years…?

From here there is no limit to the projects you could turn your mind to: The coming recession and how to manage around that; Your marketing challenges; Your tendering processes; Innovation; Business Plan; etc

And I want you to treat this hour as absolute holy writ, come hail rain or shine…Tuesday morning from 10 to 11 you are not contactable, by anyone for anything…

Janes little steps
Back to Jane; Jane is actually a client of mine, and JW Solutions is her recruitment business. Jane found the obstacles, the tree in her path and she started with “Little Step 1”. Jane asked her PA for assistance. She explained to her assistant what she needed to do and that on Thursday morning every week, from 9 to 10 she would no longer be available for anyone except her husband or kids, and she asked her PA to help her manage that, and not to allow her to slip anything in her diary or answer any phone calls.

The first three weeks were tough but then Jane started getting into the habit. Things started to change for Jane, it was as if a weight was being lifted off her shoulder, and she started becoming clear about the things that needed doing in her business to move it forward. Now, a year and a half later, she has altered her approach and takes an hour and a half from 9 to 10.30 3 times a week, Monday, Wednesday and Friday, and her business has increased its turnover by 30% in the same time. Jane truly appreciates the unique value and beauty of her time and her brain, and I believe her husband is much happier too.

Further Reading:

• The “E-Myth revisited” and other books in the series, by Michael Gerber
• The “One Minute Manager” series, by Ken Blanchard et al
• “Small Giants”, by Bo Burlingham
• "Secrets of small business owners exposed”, by Dale Beaumont
• “The Elves and the Shoemaker”, by the brothers Grimm

BLUE OCEANS AND CLEAR SWIMMING POOLS

Blue Oceans and Empty Swimming Pools

Or the business lessons I learnt in an Italian "Piscina”

A few years ago I spent 4 months in Italy looking for the answer to the meaning of Life, the Universe and Everything. Sitting on piazza’s, sipping espresso, licking gelato and letting the Universe speak to me without distraction felt like a good idea. (By the way, it was a good idea and She did speak to me, but that is another story!)

One of the many exciting experiences I had while in Italy was going for a swim in a local swimming pool. I had taken up swimming as a serious strategy on the way to everlasting life a few years previous and was keen to continue the regime while waiting for the universe to send Her messages.

Most of us have some knowledge of Italian traffic; we take great delight to relate crazy traffic stories on our return from Rome or Naples. Italian traffic does indeed seem to operate along different rules than traffic in Australia, but the truly crazy traffic of Italy is to be found elsewhere, namely in the local swimming pools on any afternoon of the week. My first introduction to the council swimming pool in Florence was a heart stopping experience.

Bloodbath
There must have been 500 people in the pool, swimming in 500 different directions and all trying to find clear water. My pursuit of life everlasting took a backseat to my pursuit of life right then. I crawled out of the pool 10 minutes later with a bleeding nose, bruises and scratches all over my body, as if I had been in a pub fight.

I realised that I needed to change my approach to keeping my hard-won level of fitness during this summer of Chianti and Pizza. The competition was simply too fierce, there was only so much water to be found and everyone had to battle it out in the bloodbath that is the Florence Piscina

"How to make the Competition irrelevant"

I was reminded of this experience recently when reading a great book called “Blue Ocean Strategy; How to make the competition irrelevant”. In order to continue my swimming and fitness regime I had to find a pool where I could swim my laps, and zone-out without fearing for my life. I did; It turns out that Italians hate early morning exercise, it doesn’t fit with their life style at all, especially in summer, and so even though the pools open at 7.00 am, nobody comes near a swimming pool until about 10.30.

The other buggers
The authors of Blue Ocean Strategy make a similar point about business and competition. Most of us business owners look at our competition and ask: How can we stand out from the crowd, how can we be better, quicker, cheaper than the other buggers? In other words, we go to battle with our competition for the same dollar, the same customer. But what might we see if we step outside that battle for a minute? What might we see about the market and our business in it? What other opportunities are there? And how can we access those opportunities? What can we do to find clear water in the pool, so we can focus on doing what we do best instead of spending all that energy trying to beat the competition?

It is tempting to engage with the battle right in front of us and become absorbed by it. But is it really the best place to direct our energy? Maybe we can find a different field to play in all by ourselves?

My own example
Let me give you a business example from my own experience. I normally refer to myself as a “Business Coach”. There is no accepted definition of what business coaching actually is, but there is a successful franchise company that also describes its services as “Business Coaching”. Because I also refer to myself as a business coach, I am by default in competition with this company and swim in the same pool with them even though my approach and services are very different from theirs.

For a while I was tempted to compete head-on with this crowd, to develop marketing materials and products, services and packages that were better, cheaper, quicker, faster than theirs. In other words I felt compelled to try to compete with them for space in the same swimming pool.
At some point I realised the stupidity of this strategy. To do so I would have to change my personal values, my philosophy and my approach to my clients. That is not a tenable proposition obviously, and it became clear to me that what I had to do instead, was to find my own swimming pool. Being able to settle into my favorite stroke without concerning myself what stroke everybody else was swimming and if I was about to be run over. It took me some time, but I have found that pool and I am so much happier for it.

Find your own pool
So this is your mission, should you choose to accept it: Go out and find your empty swimming pool, where you can swim powerfully on your own, being able to focus on your own stroke as opposed to everybody else’s.

To find this empty swimming pool you need to ask yourself a few simple questions:
1) Who are the potential customers of my services?
2) Which group(s) of potential customers don't buy (or virtually don’t) from my company or from my competitors?
3) What are all the factors that we and all our competitors already compete on with each other?
4) On which factors are none of us competing?

3 Case studies:

1) Financial planning for Gen Y:
A Financial Planning company I worked with some years ago went through a strategy planning process with me in which we asked questions like those above. The process turned up that all financial planners were trying to out-compete each other on the same factors and all aimed at the same clients.

The owner of the company saw a trend in society that indicated that young generation Y’ers were holding off buying their first bit of real estate and electing to continue to pay rent in the trendy inner city areas of Sydney. He suspected that when Gen Y’ers turn 35 they too start to think about having families and homes in the suburbs and that they would need a substantial nest egg to put down as a deposit. The other thing he noticed was that Gen Y’ers as a rule want nothing to do with financial planners, and vice versa.

He put these observations together and developed a really funky and smart offering aimed at helping Gen Y’ers prepare for the day that they do want to buy a home to raise their family in. Initially the fees they earned from these services were minimal but over time it has become a golden business, and essentially without competition. My client swims in his own pool and practices his own stroke.

2) Smart video productions:
Another client of mine produces video productions. To create his own swimming pool he has found a way to produce a professionally edited and cut 3 camera coverage of an event for the price of single camera operator. The difference this makes in quality is enormous. He is now swimming in a pool all by himself. For particular types of events (awards nights, school events, weddings etc) and a particular type of client, his competition is irrelevant.

3) Renovating Sydney’s terrace houses:
Finally I have another example from my own days as a builder in the crowded Sydney renovations market. We came to a realisation that 80% of Terrace houses fit in one of 5 design templates. At the same time most terrace house owners want to open up the back of the house to the light, bring the bathroom into the middle of the house and update the kitchen etc. Putting these two realisations together meant that we were able to offer a standardised design-and-construct service that nobody else was able to match. Very soon clients were knocking down the door and we stopped worrying about the competition.

Do your thing
If you would like to create your own swimming pool, your own golf course or your own private trout stream for your business, why don’t you come and have a chat with me. I can assure you there is nothing more fun and rewarding in business than swimming in your own pool.

The book I referred to is:
"Blue Ocean Strategy" by W. Chan Kim and Renee Mauborgne

The world’s greatest business development tools revealed

Or Metrics that matter

Article by Roland Hanekroot of New Perspectives Business Coaching www.newperspectives.com.au

Amazon stocks some 11,000 titles in the category “Small Business Management”, and although I can’t profess to have read them all, I am reasonably sure that very few will give you this simple bit of advice:

Experimentation and measurement are the most powerful business management tools any business owner can ever employ.

Did your ever hear your dad/ grand father/ uncle utter these words:

“If a job’s worth doing it is worth doing it well…”

Mine did, but now I disagree (respectfully of course). Instead I make this statement:

"If a job is worth doing it is worth messing around with!”

Too often we feel stifled by the feeling that this or that problem is worth tackling if only we knew what THE answer was. We are afraid we won’t get it right, that it won’t work, we’ll fail….

And of course we don’t know THE answer…………..

Good news and bad news:

• The Bad news: …………..There is no answer!
• The Good news: ……..….There are lots of answers!
  

There are as many answers as there are businesses and business owners.

This is not to say that there aren’t a number of basic principles that apply to all businesses. There are important common principles of marketing or finance for example, but how those principles apply to you in your business is entirely dependent on the unique combination that is you and your business.

Somewhere in those 11000 books on Amazon you might find the answer to your particular problem appropriate for you and your business, although that is by no means guaranteed. Besides, if you have time to read even 1% of that library you don’t need to read the rest of this article, your business is already running the way it should.

A much more useful approach is to look at the issue, pull it apart into as many component parts as possible and ask yourself: I wonder what I could try next? That is experimentation. Look at an issue and say hmmm…I wonder….. Big change can come from little experiments, and if the experiment doesn’t work out…try something different.

The “But”
There is always a “But” and this article is no different, sorry to disillusion you. The “but” is this: Experimentation must be based on measurement, without relevant measurement, experimentation falls flat on its face, is frustrating for everyone and costs lost of money.

You can’t manage what you don’t measure.

It is the continual cycle of measurement, experimentation, more measurement and more experimentation that will have the greatest impact on the sustainable growth of your business.

Case in point
I am going to take you through a real world example that will demonstrate what I mean. The example comes from a client of mine who is an electrician. I have tried to reduce the story down to the bare essentials, and obviously it demonstrates a principle only. How you translate this principle into something that works for you and your business I can’t say from here. My hope is that you will let it stew in your brain for a bit and ask yourself: “I wonder how I can experiment with that principle in my business?”

My client has a number of vans on the road, with a tradesman and apprentice in each van. One of his burning issues was the amount of (un-chargeable) time that his teams spent running to the local suppliers each week to pick up bits and pieces they needed for each job. The vans normally carried some stock (mostly stuff left over from previous jobs) but an enormous amount of time each week was lost because the vans were on the road, shopping. Over the years he had experimented with different ideas, but the issue persisted and he really didn’t know how to make headway with it.

This is what we started working on:
First we set up a way to measure how much time each team spent travelling to buy the bits and pieces, day by day and team by team.

We learnt two things:

• On average he lost about 11 billable hours per week for all teams combined to “shopping time”
• One of the teams spent significantly less time shopping than the other three.
  

Armed with that information we decided to find out what was different for this team.


We found two differences:

• Their van was tidier than the other vans,
• They kept rough diary notes about some of the items they were running low on.
  

Clearly here was the beginning of a solution worth experimenting with.


We also decided to measure 2 other things:

• First we measured what the top 100 most common items were that were used on jobs.
• Second we worked out that 85% of jobs would require nothing else than those top 100 items.

This gave us some solid base lines to work from.

Stock lists
Putting together all this information we decided to make the top 100 items the standard inventory of each van. At the completion of each job, the team notes on a standard stock list how many of each item they used on that job. When they next pass one of the regular suppliers, they replace everything on the inventory list in the exact same quantity that they have used (and noted on the list) since the last time they went to a shop. And then they start a new list.

Now he is measuring again.

The initial impact is significant; he has reduced the non-chargeable shopping time by 50% across the board. There is further work to do; the goal is to have no more un-chargeable shopping time at all, by the end of the current financial year.

Linda Evangelista
For now my client is able to take on an average of 3 extra jobs per week with the same resources. That equates to approximately $25,000 extra profit per year.

Apparently even Linda Evangelista would get out of bed for that!

One of the benefits of working with a business coach is that you will be encouraged time and again to ask yourself that question: “I wonder what would happen if……”

Further reading:

• “The E-Myth series” by Michael Gerber
• “Re-Imagine” by Tom Peters
• “The Solutions Focus” By Paul Jackson and Mark McKergow
• “Solutions Focus Working” by Mark McKergow and Jenny Clarke
• “The One Minute Manager series” by Ken Blanchard et al

Business Owners and Schizophrenia

The case for Multiple Personality

Disorder in business

Or how to be the Business Owner

By Roland Hanekroot, New Perspectives Business Coaching http://www.newperspectives.com.au/

Every business owner I have ever worked with has at some stage been stumped by a variation of the chicken or egg dilemma:

What comes first?

• I would like to spend more time developing my business, but I don’t know if I can afford to lose the time.
• I would like to employ extra staff, but I don’t know if I can afford the time to train them.
• I would like to spend more time generating leads and business, but if I am successful at that I don’t know if I will be able to handle the extra work.
• I would like to employ extra staff, but I don’t know if my cash flow will be able to handle it.
• I would like to develop my business processes and systems to be able to handle a lot more work, but maybe I should get that extra work first.
• I would like to employ extra staff, but I don’t know if I will still have enough work for them in 3 months.
• Etc.

So what really comes first?
First comes a realisation. It is the realisation that owning a business involves a particular type of schizophrenia or multiple personality disorder; you have to be three different people at once,

Michael Gerber in his E-Myth books refers to them as:

1. The Technician (Who does the technical work, be it that of a carpenter, a salesperson or a lawyer)
2. The manager (Who does the day to day management of the business: admin, finance, sales, managing people and processes etc)
3. The Entrepreneur, or the business owner (Who does the business building work)

Suffering from schizophrenia is something you would not wish on your worst enemy and what is more, if you are intent on owning a business there is no cure.
You are simply going to have to accept the fact that all three personalities demand their time and space, equally.

Most business owners (including myself) know how and when to be the technician, how to do the technical work (the work of the business), that is how we got started, and who we have always been. Most of us also know something about being the manager and with a greater or lesser degree of efficiency we carry out the work of the manager, maybe a bit later than we’d like, or just pushing the deadlines. Often we feel this manager person gnawing at the back of our minds when we are being the technician on a daily basis, but generally we give him or her the required time and space, otherwise our businesses would have gone down the toilet ages ago.

The entrepreneur

Not many of us know how and when to be that third person though. We really just put her in the too hard basket most of the time. We can feel her fighting to get out of that basket sometimes, but there just is no time this week; that quote must be finished first and project “X” has fallen behind, and we are already a week late with our BAS return etc. So we keep the entrepreneur in her basket, put the lid on the basket, and sit on it for good measure. Maybe we let her out at night sometimes, or on a weekend every now and then, but certainly not during business hours when we have to make money and do the stuff we do, and do it and do it and do it….

Yet, the contradiction is that the most important work that you and only you as the business owner can ever do is the business building work.

The work of the business owner is not the work of the business. The work of the business owner is not the technical work, it is not the administration, and nor is it the sales or any of the other things that the business needs to carry out on a day to day basis.

The work of the business owner is the creative work of developing the business; it is imagining what you want the business to look like in 6 months, a year, 5 years. It is thinking time, it is planning; it is looking into the future and deciding how it will look. It is developing the strategies, the processes, the systems to make your vision a reality. It is creating the methods to measure the effectiveness of your systems and processes, it is learning and innovating, and deciding what the key indicators for the health of your business are, and where to get them when you need them.

This is the work that you and you alone are accountable and responsible for. Only by doing the Business Building work consistently as a matter of priority, will you be able to build your business into the thing you set out to create when you started it.

The challenge

So here is my challenge to you: As a first little step, beginning modestly, starting this week, with the new financial year coming up soon. How would it be to block out 2 hours a week from your diary, every week? Set in stone, come hell or high water, you are no longer available for clients, suppliers, meetings, employees, administration, phone calls, emails, or anything else. This will be your business building time, your thinking time, and your creative time.

You might find it confronting and feel guilty at first to block a slab of time out of your diary for this work, and on a workday as well! What if a client has an urgent issue for example? Well, I would like you to look at it this way; if your clients want to talk to you urgently at 3.00 am on the Sunday morning of your daughters first birthday, while on a skiing holiday with your family, would you take the call and have a meeting with them at that time? (If you answered “yes” you have greater issues than I can deal with in this article).

Build a bridge

So as my girlfriend says: Build a bridge…. (And get over it)…. simple as that. This weekly business building time is right up there with sleeping and holidays and your family. If you are not building your business, you are not building anything. To quote Michael Gerber again: “You have created a job for yourself with a fool for a boss”.

When you do start to step into the personality of the Business Owner you will find that this is one of the rare occasions when suffering from Schizophrenia is highly rewarding, and you will start to find the solutions to those typical business owners’ dilemmas.

One of the benefits of engaging a business coach is that the realities of being a business owner will become inescapable and the coach will help you integrate this personality and the work that belongs to him into your business life.

Further reading:

• “The E-Myth” series (E-Myth Revisited, E-Myth Mastery, E-Myth contractor, E-Myth manager, E-Myth physician) by Michael Gerber
• “Maverick” by Ricardo Semmler
• “It is not the big that eat the small, but the fast that eat the slow” by Jason Jennings and Laurence Haughton
• “The effective executive” by Peter Drucker

Neuroscience and marketing your business

Your customers, their Amygdala and Sabre-tooth tigers.

Article by Roland Hanekroot, New Perspectives Business Coaching, www.Newperspectives.com.au

There is a small almond shaped region in our brains, called the “Amygdala”. It is one of the most primitive regions deep in the base of our brains. As business owners we need to get intimately acquainted with this lump of cells in your clients brain, and how it affects her decision making processes. It is your clients’ Amygdala, more than anything else that decides if she is going to become your customer.

One of the functions of the Amygdala is to scan everyone and everything it comes into contact with for threats and danger; it is constantly on the lookout for who can be trusted and who can’t. It is often referred to as part of our reptile brain and dates back to the times when survival depended on being able to assess in an instant if the figure coming towards you was about to kill you, take you food or take your family.

And ever since the days of the dinosaurs, and sabre tooth tigers, when men were men, (and just as dense as they still are), rocks were used as tools and women were dragged around by their hair, it has been performing this function for us.

The Amygdala knows that threats are constant and all around us, and so it makes instant gut level decisions, and then goes on to scan for the next threat.

How does the Amygdala connect to your business?

The Amygdala is very powerful; it has the power to override pretty much all other functions of the brain, instantaneously.

So when a potential customer has an interaction with you, his Amygdala does its thing, and comes back with a very quick decision: friend or foe. Once it has made this decision it sends signals out to the rest of the brain to become more or less guarded.

If the signal is positive, other parts of the brain, slightly higher up are activated to start looking for more positives. And here is the thing: this whole process takes place entirely at an unconscious level. The client has no idea that all of this turmoil is taking place deep inside his brain. He won’t even start to become conscious in some way of this process for somewhere between 15 to 30 seconds. But one thing is clear: The essential decision to buy from you or not is made in that timeframe (except that he doesn’t know it yet).

Pain and pleasure
When I say that the client has made the unconscious decision to become your customer, I am not talking about a decision in the way that we normally think of a decision. The word “decision” implies a conscious process. What it really means is that the client in her whole being has decided that you are safe, and a friend, and that either a pleasure will be gained from being with you or a pain will be relieved.

This is a very good feeling for the client. When she gets this feeling she starts looking for ways and reasons (or excuses) to prolong it. And the most obvious way to prolong this feeling is to do business with you. (Remember, we are still very much at the mercy of our primitive emotions, it is a scary world outside the cave, we crave this feeling of safety constantly and we are social beings, safety in numbers)

Confusion
But keep in mind that the client doesn’t actually know that this is what he is doing and what his primitive brain is leading him to, and hence it is very easy to confuse the client at this stage. As soon as he receives a message that doesn’t fit with his first primitive assessment of you, his brain will start to go around in circles, a bit like a computer that responds to some input with an error message “Does not compute”.

We don’t have to be neuroscientists to understand that a client in this confused state is not going to buy anything. A confused client will focus on getting “un-confused” instead. Being confused puts the Amygdala back in a heightened state of arousal again, and while that goes on, buying decisions simply won’t be made.

That is the story of: The customer,
The Amygdala and Sabre-tooth tigers

Awareness of this principle has many consequences for how we as business owners should approach our marketing. I believe the following 5 steps are the first ones to focus on:
1) Be absolutely clear in your own mind what pain it is that you relieve or what pleasure you give your customers.
2) Be clear in your own mind what the promise is that you make to your customers
3) Decide what basic emotions you want to evoke in the depths of your clients brain (safety, confidence, relief etc.)
4) Live and breathe the qualities that are most likely to evoke those emotions – the first 30 seconds - (what you say, what you ask, how you look, your handshake, your confidence, it is all about your clarity and passion)
5) Explain your promise to the client and confirm the emotions you evoked in the first 30 seconds (this is about all the subsequent messages you send, your email, your website, your documents, the graphics, your logo, your voicemail message, every bit of information you give to the client will all be evaluated against her need to confirm her initial emotional assessment of you)

These steps will lead to clients becoming customers over and over.

Customers become advocates
From here of course the real work of your business starts. Now it is all about delivering on the promise you made to the client in the first place. If your business delivers on the promises you make, time after time, without fail, new customers will continue to do business with you for a very long time. Better yet, by delivering on your promise without fail, customers will become your advocates to everyone they know and meet. And when that happens, those first 30 seconds are largely taken care of before you even come in contact with clients. Your customer/advocate will already have put the clients’ Amygdalas at ease and they will be looking to confirm their decision right from the first moment they shake your hand.

I would love to enter ongoing discussions about this topic, I find it fascinating. Please feel free to add some comments

Further reading:
- “Social intelligence” by Daniel Goleman
- “A Users Guide to the Brain” by John Ratey
- “The Human Mind, and how to make the most of it” by Robert Winston
- http://www.columbia.edu/~ko2132/publications.htm
- http://www.scn.ucla.edu/
- http://newperspectives.com.au/downloads/ochsner%20The%20experience%20of%20emotion.pdf
- http://newperspectives.com.au/downloads/Lieberman%20annurev.psych.pdf

Systems Theory, Coaching and all of us

Thoughts:
I have been reading some really interesting stuff in the last few days, about Sytems Theory, in particular "Family Systems Theory" The idea is that there is no value in looking at or working with a person in isolation from his or her environment (the systems he or she is part of in other words), because one can't be without the other.
This idea ties in with a lot of thoughts and insights that have been swirling around in my brain for a while now, and also draws a line to the article i published on this blog a couple of days ago.
All of us are part of a whole, and everything we are and everything we are part of is inextricably linked to us and vice versa. So often we think of ourselves and the people we relate to in isolation of everything else around us and them. What I think of as my reality is only my reality because of what I am part of. My influence on that system is just as great as it is on me. I am really keen to explore that further and how that thinking impacts on how we look at the world and those we work and live with.
At a very basic level it simply means that if you deal with stresses and challenges in a work environment, it is all very well to put enormous amounts of energy coming to grips with that stress, for example, but it is unlikely to be effective unless you put the same amount of energy into affecting the system that creates the stress. Because if you don't appreciate that the work you do on yourself to come to grips with the stress has an equal impact on the system as a whole you are ignoring one whole side of the equasion.

Interesting thoughts for me as a business coach, I wonder if anyone is keen to take up this discussion with me and bounce that thought around a bit further.
ciao for now
roland