Business Wisdom (Part 1)
December 6, 2006

Q: Good morning Steve: My book, The Success Effect: Uncommon Conversations with America's Business Trailblazers, offers insights from billionaires and small company founders alike but this book is different from most because it is mostly in their own words - not mine.  I thought that perhaps ... a column about the book would have great appeal to small business owners in America.  Best wishes, John Eckberg

(Part 1 of 2)

A: In the past few weeks, I have received two first-rate books that share words of wisdom from successful entrepreneurs, and it would be a shame to keep that knowledge to myself. The first is the book mentioned above, The Success Effect, and the other is Chicken Soup for the Entrepreneurs Soul.

This week, I want to share some insights from Mr. Ekberg's book, and next week we'll share some of the fascinating stories from the Chicken Soup book. Both have plenty to teach us.

One of the things I really like about The Success Effect is that it does not only does it share the insights of business leaders (and a few other fascinating people like Deepak Chopra and Jerry Springer), but it gives you a sense of what the person is really like -- what music are they listening to right now, what books are they reading?

It is no secret that entrepreneurs are visionaries, a trait common to many people Eckberg interviews. One who had, pardon the pun, double vision, is Dean Butler, the man who founded LensCrafters. Prior to Butler's innovation, getting glasses in an hour was an impossibility.

But it should not have been. Butler was a Proctor & Gamble brand manager who had a friend that inherited a small business -- a few optical stores. Butler began by helping his friend with the advertising side of the business, and quadrupled sales in six months (Lesson: advertising doesn't cost, it pays!)

More importantly, Butler discovered that it only takes about 15 minutes to create some prescription lenses and that it is a fairly easy process. Thereafter, Butler quit his job at P&G and opened the first LensCrafters in a mall in Kentucky. The secret, he says, is to "develop a product that consumers never ask for, but when they experience it, they think it's fantastic. Find the latent desire."

Innovation is a concept that is echoed in the book by Michael Tushman, a Ph.D at the Harvard Business School. Tushman says that the important thing in business is to "create organizations that celebrate exploitative behavior, [that is] exploiting your existing competencies. There must be lots of experiments, even though many will fail. Some will be the future of the franchise."

A few other gems:

Richard Barlow of Frequency Marketing (a company that that manages customer-loyalty programs) says that companies who create loyalty programs based on giving discounts alone are missing the mark: "Discounts erode margins, erode price and value, and train the customer never to pay full price." Instead, he offers, "figure out what type of added value would differentiate the business from the competition."

Patrick Lencioni of The Table Group (a management consulting firm) says that unvarnished debate is a key to success: "One of the greatest competitive advantages you can have is to have people who can quickly, nakedly cycle through issues and arrive at decisions because they don't hold anything back."

This holiday season, give your entrepreneur the gift of wisdom.

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Today's tip: MSNBC has a great small business show called Your Business. This coming up Sunday (December 10, 2006) I will be a guest on the show. Steve says, check me out!
 

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