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Presentation to the Irmo Chamber of Commerce
Presentation to the Irmo Chamber of Commerce
January 9, 2008As I was preparing for my presentation today, I know that some of you in the audience are business owners; and others are managers, leaders, and employees within a business, non-profit, or public institution. But, most of you are entrepreneurs trying to make a buck to pay your bills! I hope that all of you will carry away something today, regardless of where you work.
I was thinking about the word ENTREPRENEUR. Webster defines an entrepreneur as “a person who organizes and manages a business, assuming the risk for the sake of profit!” I agree with the risking everything part. Certainly, starting your own business is a big gamble. After risking everything for the sake of profit since 1981, I tend to give a different definition of an entrepreneur. Part of me wants to say that an entrepreneur is someone “who is dumb enough to risk everything—including their relationships and possessions--to start and make a business profitable.” In this definition “everything” would be the operative word!
Most business owners and leaders have their own versions of what make their companies successful –no one shoe fits all. I would love to tell you that I experienced overwhelming success from the time Istarted my businesses more than 25 years ago. But that’s not the case! To be honest, most of what I’ve learned about building a successful business has come to be in the past 10 years where I have built businesses from the ground up.
While I want to share with you what I believe to be the elements of success, I think it’s important that I first tell you where I went wrong. And boy, did I make some mistakes along the way. . . As well as some good decisions that led to our success.
Looking back on my life as a business owner, I have probably made more mistakes than I have madegood decisions! Life is full of surprises and no matter how much you plan, you will make bad decisions that you will live to regret. Mistakes remind me of one of my heroes, Forrest Gump, who said you never know what kind of chocolate you are liable to pull from that box!
I started my journey as a business owner twenty-seven years ago – 1981 -- and opened several retail computer stores, real estate investment firm, wholesale distributorship, and training business. This came on the heels of working with seven state agencies, two governors, and a private non-profit—not a lot of experience for a novice entrepreneur, if you know what I mean. I was pretty much flying by the seat of my pants since I had no real-world business experience! But the money fairy and the dream of owning my own business sucked me in!
In 1985, my businesses, like many technology firms at the time, failed! It became one of the darkest periods of my life, yet turned into one of God’s greatest gifts. While it was a tough and painful lesson, going out of business and closing several companies taught me a lot of the core principles of what was needed to run a successful company.
Since those early days, I have gained a great deal of knowledge as I sometimes have blindly climbed, and stumbled on that rugged road up Success Mountain. The climb to the top of Success Mountain is a very long and hard road, and we’re never truly “there.” The apex is just what we vaguely see in the distance -- a mountain peak we will never reach.
People are often startled when I tell them that my guidance counselor told me I would never amount to anything, my father thought I was not capable of running a small business, and I nearly failed out of college in my first year. They continue to raise their eye brows when I say I never took a business course and that my college and graduate degrees are in psychology. In fact, I only made it through the second day of my college accounting class! Thus, you may not be so surprised after hearing about my screwups!
Then, I refer to my dear friends, teachers, mentors, and colleagues--Dr. Failure and his cousin, Dr. Mistake! And, definitely don’t forget my brother, Murphy, who is always waiting around the corner to come to my aid without warning!
However, at 58 years old, I have changed my opinion about mistakes and have learned to see them as opportunities, since something good and opportunity usually comes from all conflict. It is all how you look at problems and mistakes.
Yes indeed, the school of hard knocks was my greatest teacher in my first decade of business ownership.
But what’s important about those hard times is that I learned from my mistakes. I recently read a book that recommended leaders celebrate mistakes!! Now, I am not one who wants to throw a party when I screw up or lose money. But it’s important that you admit your mistakes, and then, once you’ve eaten a little crow, ask yourself, “What can we learn from this? What can we do the next time to make better decisions? How can we use this error to grow our employees, our companies, and ourselves?”
It is important to let everyone throughout the organization know that it’s okay to make a mistake, provided it is brought out into the open without finger pointing and placing blame. Then, dissect the screw-up -- in fact, conduct an autopsy, as Jim Collins in Good to Great says -- learn from it – and prevent it from happening again. So, in the companies I’m a part of, we want to create a culture of constantly challenging and learning from each other in a positive way.
In my second decade of being an entrepreneur, I think I’ve learned more productively. Then, when I turned 50 eight years ago, I made a commitment to throw out my ego and start over. Like so many people do when they reach a major life milestone, I wanted to change the way I approached problems, running a business, and well, just living life in general.
I think the most profound event in my life is when I went blind two years ago. You hear about people making radical life changes when they had a heart attack. Well, after eleven operations and treatments, my life also changed.
While I disliked reading and probably had not read a book in twenty years, I found that if I accepted the fact that there were better ways of doing things, and that one of the ways to learn is to read books, I could grow! Now, I love to read on how to lead and manage a business! Of course, I make time to read the books that help me grow by taking two trips to Hawaii each year and sitting by the ocean to read them. Even the most boring books are pretty interesting in that setting! And, I have learned that every business leader needs to escape every 3-4 months, have some fun, think about the future of their companies, and re-new themselves to jump back into the game of being an entrepreneur. Working twelve hours a day seven days a week is a recipe for disaster that robs of you of your energy and creativeness!
I want to tell you about the last decade of my business ownership; but first, let’s talk about the key to success! I don’t believe than any single element makes a business successful. Rather, I believe that many elements combine to make a business great—something like the movie The Perfect Storm, starring George Clooney, where three fronts came together to form one perfect storm.
I am frequently asked, “Mike, how did you become so successful?” While embarrassed with the recognition of being successful, I often refer to a small box I saw in a Charleston store that had this inscription on the top, “The secret to a successful business is?” When you opened the box, the answer was found inside, “Hard work!” Do I hear an AMEN?
Certainly, hard work is important to succeeding in business. But a smart business owner surrounds himself with other people who work hard so you can work smart! I believe one of the key elements to success is to find passionate, smart, organized, outstanding people with good work ethics, and put them in the right positions.
We also view our employees as our customers and family. They must be treated as well as our customers so that they service our customers in the same manner. Harvard School of Business determined that happy employees = happy customers. Therefore, pay employees well, provide them good fringe benefits, and give liberal paid time off and a shorter work week – we require 37 hours. Even think about a profit sharing program as an incentive that rewards hard and smart work. But, if you treat people well, they will return the favors!
It is sad to say, but many businesses do not recognize the importance of looking after their staff, but rather treat them like a piece of meat or a statistic on a balance sheet. To make matters worse, as our technology advances, our society is also moving away from the classical office where you have face-to-face contact with your peers and leaders. Our employees are becoming just another e-mail address among hundreds on the cold computer screen. Delete may take on a whole new meaning in the future!
But, above all, be a caring leader. While leaders have to be tough when the times call and they will, it does not cost anything to be nice! Caring is the core of effective leadership or the critical component in every relationship. So, one of our goals is to create an environment where all our employees enjoy what they do; are challenged in their work; and, are situated in the right seats. If a good employee does not like what they are doing, we try to find them work in another area of the company. It is amazing to see how one employee is unhappy and less productive in one position to see them blossom and look forward to coming to work in another job!
It is also important that you get the wrong employees off the bus and that is a nice way of saying “fire people” with care who do not support your goals and aspirations or fits your company’s culture. It only takes one bad apple or unhappy employee to ruin the bunch.
I brought 60 copies of this speech and several articles that I recently developed, including two on hiring and firing employees. It is a very risky business and getting the right, outstanding employee in the right seats is critical and getting rid of the wrong employees the right way is likewise extremely important.
But, be careful in terminating employees! There were 90,000 cases submitted to the Equal Employment Opportunity Commission or the EEOC last year! My motto, “Hire slow and tough and fire fast in a caring way!’
Once you have the right employees on board, then they must be trained, coached, and rewarded for working in unison as a team. Effective and harmonious teamwork takes your products and services to the next level. And, the end result is a satisfied customer since your staff is satisfied, too.
In his bestseller Good to Great, Jim Collins says when passion, mission, and profitability merge together you are on your road to success. He also says that if you are doing anything outside of those three realms, stop doing it! So, I think that passion, focus, doing what you do best that are profitable, and having the right people in the right positions to do what you do best are critical to achieving success.
Our companies include the Columbia Conference Center (located between St. Andrews and Piney Grove Roads), which provides meeting space for corporations, government, non-profits, and individuals; Research Associates, which provides grant writing services for 60 school districts and 250 schools nationwide; and The Evaluation Group that evaluates programs. We also have an internal corporate travel agency and an insurance company. And my son Blake just created DuBose Web Group, which will design web sites for small businesses. So, we have seven different businesses with varying missions and strategies.
No matter what your business endeavor, most all businesses have similar needs and processes for turning out a product or service. Thus, with that in mind, let me share with you some of the things we are doing that I believe have contributed to the success of our companies.
My latest business venture involved starting from ground zero to build the 40,000 sq. ft. Columbia Conference Center, which opened in 2003. I incorporated everything I learned into that business and assembled an extraordinary team. While I am far from perfect and I do not want to appear to be bragging, nor do I take any of the credit for my team’s efforts, our four-year customer evaluations have resulted in ratings of 98% good-outstanding, and 91% of our business is word-of-mouth or from previous customers. As a business owner, that is what I am seeking – customers who are happy, returning for additional business, or positively telling others about our service.
I am finally discovering how to run a successful business, but I am always planning to fail tomorrow. A friend of mine recently started a small business and I told his wife, “Be sure to tell him to plan to fail!” She looked startled and confused as if to say with her body language, “Why would you want to think about failing when starting a business?” But, as my grandmother used to say, “Hope for the best, plan for the worst!” Unfortunately, his business did not make it.
I know that my competitors would like nothing better than to eat my lunch and take away our customers! So, I have to respect them, study their activities, stay one step ahead, and learn from them. In fact, atColumbia Conference Center, we established a system of referring business to certain high-quality competitors, and they, in turn, send business our way, too! The adage “You scratch my back and I’ll scratch yours” can build your business. So, we don’t fear competitors, but rather respect and partner with them when the opportunity arises.
Our message at Columbia Conference Center is simple – We give the customer what they want -- when they want it -- in a caring and high quality way. And, every customer is different and we customize our services to each individual and organization. Using Total Quality Management or TQM as our model, our goal is reasonable perfection and for every customer encounter to be rated as outstanding. I use the words “reasonable perfection” because you can get so focused on perfection that you lose sight of what’s really important. You can take perfection too far where you are driving your staff crazy! While we know perfection is unrealistic, we are simply disappointed in anything less than outstanding!
Good is simply not good enough in today’s hostile climates. According to Jim Collins, good is the enemy of being great, and that’s the philosophy we’ve tried to adapt at CCC. When I heard this, Ithought to myself, “There is nothing wrong with having a good company!” After reading Good to Great six times, I finally realized that there are many good companies out there and someone has to rise to the top! Toyota is becoming the leader in the auto industry because GM and Ford failed the customer! They created good products while Toyota created great products!
Within our companies, we’re trying to be great! But, that does take time. When Lou Holtz, USC football coach, came to Carolina, the media asked him about the losing USC team: “Coach, how do you plan to succeed and make this football team a great team? You know that Rome was not built in a day!” He responded arrogantly, “That’s because I was not the architect!” At the time, I thought to myself, “You are headed for a fall because greatness is a humble process that evolves over time – not overnight!” And I think you know what the outcome was as he entered one of the worst losing seasons ever experienced by USC! Success and arrogance will kill a business leader and a business!
We have learned that high quality customer service is critical in a thriving business and technology is playing a role in this area. But in the name of improved technology, many businesses have developed processes that just aggravate the daylights – in fact punish customers. And then, they wonder why their companies are failing. Think about it! Is there anything you hate worse than talking to a computer on the telephone while seeking customer service or an answer to a simple, quick question instead of a human being? You know the drill with the computer’s talk -- “I’m sorry, but I didn’t understand your response! Let me give you 5,000 other options that will require you to push 6,000 buttons that may or may not get you the answer you wanted 45 minutes ago! And, let’s do a 15 minute survey at the end that no one will read or care about to help us improve our miserable service!” A talking computer is just about the only thing that can bring rage out of a calm Christian like me! People simply want to talk to human being and not machines!
At Columbia Conference Center, like your business, the customer comes into contact with our system, service, and staff in different ways. This starts from the time they experience our marketing strategies, to the receptionist answering the telephone, to our Event Manager, and eventually to our catering and facility staff. And, finally, when it’s all over, they come in contact with the person doing the billing. The neat thing we implemented at CCC is that one person – the Event Manager – is the sole person who talks to you throughout the process. So, you don’t have to talk to so many different people as many hotels and meeting facilities require! Simply put, as Sam Walton told his employees, we just want to be different and stand out in the crowded field of competitors.
A customer forms an impression about the quality of your business by each encounter they see, hear, and experience. Drop the ball on any one part throughout the process, and their overall impression diminishes! If you don’t hear a complaint, you might assume that everything with the customer was fine! But we don’t settle for that! After a customer uses our services, we immediately mail them a simple one-page evaluation with a self-addressed, postage-paid envelope that is mailed or faxed directly to me. I personally open the evaluation, review the contents, and then distribute the information to all my conference staff. Everyone sees each other’s ratings so that the entire team is constantly trying to improve our processes. Anytime a rating falls below good to outstanding, we zero in on the concern and talk among ourselves and the customer on how we can do better next time, learn from this negative impression, or make it right with the customer. Sometimes, that simply means calling the customer and admitting our mistake and asking for another chance to do it right! Many times a customer just wants to hear acknowledgement of their concerns; sincerely admit to the wrong; and then, do a better job next time! And you had better not drop the ball the second time around!
Two months ago, we executed a perfect event for a customer who rated us outstanding on every service but one. We royally messed up the customer’s billing, and the customer downgraded and chastised us because of the mistake. While 99% of the customer’s event went off without a hitch, the customer was still pretty unhappy because of a glitch in the billing. Dissatisfied customers quietly fade away unnoticed unless you have an easy way for them to communicate and complain directly to the owner. And a word of caution—comprehensive feedback is great, but you don’t want to further tick somebody off by giving them a 15-page survey that will be thrown in the trash! We believe that the customer signs our check and we need to ensure that they are happy with what we are doing.
Effective marketing is another critical area that entrepreneurs need to carefully consider and one of the keys to success. It simply takes money to make money. You can have the best products, staff, and services in the world, but if the customer who needs your service or product is not aware of your company, you are “dead on arrival!”
For years, we spent hundreds of thousands of dollars on advertising and marketing for another one of our companies Research Associates. As long as the customers and cash were coming in, we never really measured the effectiveness of that investment! But when the clients started to taper off, I started to wonder what the problem was!
After 9/11, our training revenues in Research Associates were significantly impacted. While I speculated that 9/11, the resulting frozen travel and training budgets, and fear of flying were the causes, I didn’t really know because I had never tracked the results of my marketing and outreach. I began to carefully analyze the return on every dollar we invested in marketing. And guess what? I realized that we were sending 20,000 brochures into one state, and I only got one customer from those 20,000 brochures. What that equates to in real dollars is that I spent $7,000 to advertise our training services and wound up with one customer who spent $600! We learned that a successful small business needs to carefully and factually track the effectiveness of all of its marketing efforts. It is not who is calling, but rather who is signing contracts!
And don’t fool yourself into believing that a ringing telephone means your marketing is working. At Columbia Conference Center, we found that we could generate a lot of telephone activity from a certain type of marketing strategy, but nothing ever materialized from it. Then, another media gave us the end result we wanted – a signed contract from the customer. If you are not measuring exactly what works and does not, you may be wasting money that could be better used on a different marketing strategy or on growing your business in other ways.
Contrary to what media sales people will tell you, there is no one-stop-shop, cookie cutter marketing and advertising program that work for all businesses. Your marketing and advertising must be individually tailored to your business. And, your marketing must be top notch by using a first-class graphic artist and high-quality materials. What works very effectively for one business will not work for another.
At Columbia Conference Center, we view every customer as a sales person. If we treat our customers right, they will tell others about their positive experience. If we don’t, research indicates that they will tell 23 other people about how we dropped the ball! So, your customer can help or hurt you! In fact, Harvard University says that some customers can become “Assassins!” These are people who were wronged by your company and they have made it their life’s mission to tell everyone and anyone how they were mistreated!
Right now, I am writing my second book—The Art of Building a GREAT Business. The book combines what I’ve learned from many authors like Jim Collins, Jack Welch, Zig Zigler, and Ken Blanchard. You can visit our web site at www.mikedubose.com for a list of recommended readings and other articles. You will not find anything for sale on this non-profit web site!
While my book contains some of the latest research on best practices in the world of business, it also includes my own mistakes, views, and screw-ups – and, yes, some successes. My main purpose in this book is to leave behind some of my philosophies about running a business for my children and their children and to folks like you who are trying to succeed. As I drafted the first several chapters of the book, I often thought about re-titling it to “Dumb and Dumber!”
Having a successful business begins at the top and radiates outward. Jim Collins in Good to Great said that employees want their leaders to be fair, trustworthy, caring, ethical, and honest. He determined that great leaders’ primary characteristic was humility. President Truman once said that you can be successful if you give the credit to someone else. I have become more of servant leader and quietly work behind the scenes.
One of the best books I have read is The One Minute Manager by Ken Blanchard. The bottom line is that an effective leader should be a caring coach and let employees know what they need to work on and also look for the things they do well on an ongoing basis – not once a year. They need to know their expectations. I still have a long way to go to be the model, effective leader that Jim Collins describes in Good to Great, but it is fun trying as I grow and learn.
There are so many other things that a successful business needs in order to grow. They include:
- Construct a detailed budget and cash flow which is carefully monitored so there are no surprises. Under estimate your revenues and over estimate your expenses.
- Develop a written business plan with a clearly defined mission statement driven by your values which outlines the company’s destination and steps to take it there. Then, monitor the flexible plan each month. We brought in a great consultant Don Jenkins to help us assess where we were and to help guide us into where we need to go. He is also helping us understand who we are as individuals and what we want our organization to be.
- Create a well-thought-out, logical marketing plan that is evaluated.
- Analyze your competition – know what they are doing and stay a step ahead of them.Emphasize the philosophy of doing fewer things really well and not a lot of things fairly well.
- Plan for controlled growth. One of the reasons a company goes out of business is growing too fast too soon. Success can kill a company!
- Build strong communications and share information so everyone knows what is going on.
- Establish clear policies and procedures to reduce conflict or confusion, and clearly outline your expectations. But, you had better get a human resource expert like JoAnne Moss of Human Resource Dynamics to help you develop it or review it to avoid lawsuits.
- Implement updated technology that employees know how to use. Think four years down the road when you buy technology.
- Provide ongoing, quality professional development programs to help staff grow, build excitement, and prevent burnout.
- Generate new products and services as the economy and customer needs change. Don’t become stale.
- Establish organized structure within the company, but fight bureaucracy wherever it crops up.
- Predict problems before they occur – anticipate the unanticipated. In fact, plan on a disaster!
- Focus on what you are passionate about. Have some fun in a niche you love.
- Ensure that everything you do is profitable (or charitable) and is connected to the mission and your values.
- Seek legal guidance from the right lawyer who has business experience.
- Build a good financial system that can give you a clear picture of where you are at any time, keep your cash flowing, and bills paid on a timely basis.
- Spend your money like the IRS will audit you tomorrow. My accountant Frank Thomas smokes my taxes and is a great tax shelter expert. His job is to keep my staff accountant Ed Morris out of jail.Create more than adequate savings for that rainy day that will surely come when you least expect it. Don’t fall to the temptation of buying those expensive toys like airplanes, beach homes, etc. Live within your means, both corporately and personally. I just purchased a red 64 Corvette that makes you grow horns!
- Institute budget cost centers to ensure all your activities are profitable and worthwhile.
- Be charitable and give back to the community with company resources. At Columbia Conference Center, we give away half our profits to charity and schools.
- Implement a clear succession plan so the company will not be dependent on the owner or certain employees. Prepare to die tomorrow.
- Diversify your revenues and product base, while at the same time keep focused on your mission.
- Build a positive culture where people can speak their minds, criticize in a friendly way, make suggestions without fear, and challenge the status quo.
- Ask each other constantly on everything you do, “Can we do this better?”
- Maintain the philosophy of “under promising and over delivering.”
- KISS - Keep it simple stupid!
- If you are the leader, be humble, honest, and ethical.
The key to success in business is not one but many variables that come together simultaneously. Being an entrepreneur can be fun if you play it like a game, knowing that you may lose some battles and stumble along the way, but your mission is to win the war! Having coached basketball and baseball for ten years, I have determined that running a business is just like any sport. It takes a lot of hard work and everyone playing together as a team with the same mission to win. So, a business needs all sorts of fuel to make it profitable! And, that is the name of the game – being profitable so you and your staff can enjoy the game of being an entrepreneur every day and win!
Never think you know it all and in fact, tell yourself you are pretty dumb. It is amazing what you can learn if you check your ego at the door. Be constantly looking for new and innovative ways to make things better for you, your employees, your family, your community, and your customers. If you don’t feel good about something, follow Jack Welch’s advice – don’t do it!
And, last, don’t let your business consume all your energy and time! While on one hand, being an entrepreneur can be a wild, exciting adventure, it can also develop into a dreaded disease where we expend every ounce of energy into the game where we worship the business. It can create a negative stress that will surely lead to diseases and it can rob you of the most precious asset – your marriage, family, and children. I was blessed that my wife did not run me off! To put this into perspective, I used to teach the 70-80 year olds at my church here. I always ask the wise and older members “If you could re-live your life again, what would you do different?” Every single person would always say, with pain in their faces, “Spend more time with my family and less time on my job or business!” While money greases the wheels and it is great to have it, I can tell you without a doubt that money, power, and fame will never scratch that itch that some of you seek. And, nothing you do in the business world will result in peace.
But if I had to choose being an entrepreneur over working for someone else, I would always choose the route of the entrepreneur, knowing that it would be more painful, but in the long run, very gratifying! And, pray! It works! I have to give all the glory for our companies’ success to my Lord Jesus Christ (it is amazing the power and ideas that are there if you ask for it and have faith!) and my great employees who make it happen every day! And, to my wife, Deb, who puts up with me, keeps our home running, and gives me a swift kick every now and then, reminding me what is most important in life. For without them and our wonderful customers, I would be nothing!
Mike DuBose is a field instructor with USC’s graduate school and has been in business since 1981. He is the servant leader and owner of six corporations, including Columbia Conference Center, Research Associates, and The Evaluation Group. Mike is writing his book “The Art of Building a Great Business” to be released in 2008. You can visit his web site www.mikedubose.com for other useful articles and suggested readings.
All articles and information contained in this packet are ©Copyrighted by Mike DuBose, January 2008. All Rights Reserved. You have permission to copy and distribute this material to others provided the above credits are given.
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