Using Lessons Learned From 2018 for a Successful 2019

January 11, 2019 Tampa Business Management 0 Comments

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Using Lessons Learned From 2018 for a Successful 2019

Being an entrepreneur is no easy feat, but you survived a year. Some entrepreneurs fizzle out after a day, but you've made it at least 365.

A new year means reflecting back to take stock of everything that has happened in your business over the last year. You review your wins and losses. Hopefully, you had more wins than losses, but don't get discouraged if this isn't the case. Those losses or missteps are things you can learn from and can fuel your fire in the new year to help you and your business grow. That might sound like bad fortune telling, but it's true.

Take note of the challenges you've had to face and come up with a game plan to tackle them in 2019. And don't ignore the wins as if they're nothing – celebrate them. You worked hard, and it showed.

If 2018 was filled with lessons for you, it's time to take note of them. Here are some of the lessons you may have learned from 2018, as well as advice for moving forward into a successful 2019.

Financial Organization

Lesson Learned: Maybe your finances were a disorganized disaster. You overspent in some areas, felt like you lacked visibility with regard to large invoices coming in and, at times,  expenses far exceeded income.

Advice for a Successful 2019: Make your business finances a top priority. If you don't have an internal finance employee, consider hiring one. If you can't hire for some reason, then use a consultant or utilize online invoicing or financial management software to help keep everything organized.

Company Structure

Lesson Learned: Forming a limited liability company (LLC) was great for your business and helped protect your personal assets. Through any legal hiccups, you were grateful for your LLC status, which granted you certain protections.

Advice for a Successful 2019: Re-evaluate whether an LLC is still the best business entity type. Is your company growing? Did you get a business partner? Maybe it's time to switch from an LLC to a C Corporation. Unsure about what may be the best fit for your business? An online company formation service can help you quickly and easily determine a good path forward.

Management Practices

Lesson Learned: You might be an incredible entrepreneur, but perhaps you struggle at being a manager or leader. Those are two separate roles, and being effective at both of them can only help your business. Understanding how to communicate with your employees and inspiring them to produce their best work is essential to your success. Employees don't want to just follow an entrepreneur — they want to follow a true leader that they look up to.

Advice for a Successful 2019: Attend leadership or management conferences. Talk to other successful leaders to get their perspective. Read books or articles to gain deeper knowledge on the topic. Ask employees and senior managers to provide you with feedback on your leadership and management style. Bottom line: keep growing.

 

8 Must-Read Business Books for 2019

When it comes to reading, people like to make excuses as to why they don't do it. Some insist they don't have time thanks to their busy lives, hectic work schedules and growing families. Others say reading isn't for them or they simply don't enjoy it.

As a business leader, you can't afford not to read. According to Neurology, reading on a regular basis as you grow older keeps your memory sharp and improves brain function. Even as you age, it'll prolong your cognitive lifespan and allow you to think more critically. In the business world, if you aren't able to use your intellectual abilities to make informed, mature decisions, you'll never succeed.

Whether your goal in business is to grow leads or improve engagement, learning about it through reading is extremely useful. If you're looking for some of the best books on business to read this year, here are eight to help you get started.

1. Your Best Year Ever: A 5-Step Plan for Achieving Your Most Important Goals by Michael Hyatt

Oftentimes people feel overwhelmed by the hustle and bustle of everyday living. This book explores what it's like wanting to reach your full potential and accomplish your goals but always getting side-tracked and making excuses not to live your dreams. Written by the former chairman and CEO of Thomas Nelson Publisher, Michael Hyatt discusses how to quit-proof your goals, what to do when you feel stuck, three ways to improve your chances of meeting your goals and more.

2. Crushing It!: How Great Entrepreneurs Build Their Business and Influence and How You Can, Too by Gary Vaynerchuk

Entrepreneur and speaker Gary Vaynerchuk's main message is that it's never too late to follow your dreams, and if you're young, you're in the prime of your life to experiment. Vaynerchuk draws from multiple entrepreneurs and businesspeople who rejected corporate life to build their own business. You get a look into what it's taken business owners to launch the company of their dreams and persist through tough times.

3. Ask a Manager: How to Navigate Clueless Colleagues, Lunch-Stealing Bosses, and the Rest of Your Life at Work by Alison Green

In this good read, Green guides you through what to do if you encounter certain awkward and frustrating scenarios at work. Some of these include being micromanaged, catching a coworker in a lie and getting drunk at the holiday party. This is an honest take on how to handle uncomfortable situations that you otherwise might not be able to navigate. Green emphasizes anyone entrepreneur or business leader to handle their work situations with maturity and respect.

4. Lost and Founder: A Painfully Honest Field Guide to the Startup World by Rand Fishkin

Written by the former CEO of Moz, this novel explores the reasons why so many startups fail and what startup founders don't understand about going into business. Fishkin examines the myths of tech startups and their seemingly fast track to success. He unveils several common misconceptions about creating a business. No matter what stage your company is in, Fishkin walks you through lessons he's learned at every point, so it's applicable to everyone.

5. Rebel Talent: Why It Pays to Break the Rules at Work and in Life by Francesca Gino

Behavioral scientist and Harvard Business School professor Francesca Gino talks about how "rebels," or outside-of-the-box thinkers, bring positivity to businesses by adding creativity and innovation. They avoid falling into ruts and following boring routines. In a world where business is so cutthroat and competition is at all time high, it's essential to bring something unique and different to your business model.

6. Change Your Questions, Change Your Life: 10 Powerful Tools for Life and Work by Marilee Adams

Marilee Adams explores the questions we ask and how they affect the way we think and behave. She discusses how to ask the right questions and how that can lead you to success both in your personal and professional life. This technique is called QuestionsThinking, which inspires innovation, productivity and creates rewarding relationships. Once you pay more attention to what you choose to focus on, you'll live a happier, more fulfilling professional life.

7. The Lean Startup by Eric Ries

Eric Ries discusses the failures he experienced in his early startups and what he learned along the way that eventually led him to success. This book emphasizes using creativity in an efficient way and validated learning as ways to build a startup. It shows you how to measure your business's progress, use practices that shorten product development and shift your company in any direction smoothly.

8. Start with Why: How Great Leaders Inspire Everyone to Take Action by Simon Sinek

Simon Sinek emphasizes the importance of asking why in business. Why do certain startups succeed and others don't? Why do some people succeed and others don't? This book suggests that the greatest influencers in the world are all doing the same things – acting, speaking, communicating – while everyone else isn't. He refers to this as The Golden Circle and explores how businesses can be created and people can connect to them. You just have to ask why.

Over to you

If one of your goals for 2019 is to become a better business leader, then reading these eight books can help put you on the right path. Some of them are strictly business-oriented, while others focus more on how to cultivate the qualities of an effective leader and think with a positive, productive mindset. These books will help you feel motivated to go out, seize the day and use what you've learned to be a better business leader.

MIT Sloan Management Review

As leaders of established businesses focus on becoming digital, they often embrace the mantra, act like a startup. Indeed, research at MIT CISR suggests that acting like a startup is a smart approach to a digital transformation. But what, exactly, does it mean to act like a startup?

A startup is, in effect, an experiment. An entrepreneur conceives an idea that seems worth trying. The startup is a test of the idea. An early goal is to learn — as quickly and inexpensively as possible — if the idea has merit and then, if it does, develop it into a business.

A number of the trappings typically associated with startups are mostly unimportant to digital success — ping-pong tables, free food, flexible work spaces. What is important is the ability to learn whether and how a new value proposition will create revenues and profits. Four characteristics of a startup facilitate that learning: (1) a structure as a small, independent organization; (2) a mission-driven design; (3) an embrace of frequent pivots; and (4) an acceptance of delayed profitability. Established companies that want to test ideas — lots of ideas — for new value propositions need to figure out how to nurture these traits.

Create a Small, Independent Organization

I’ve observed how one large financial services institution demonstrated its commitment to becoming digital by establishing a separate, 5,000-person digital business unit to deliver data-enriched customer services. That’s not a startup — it’s a big strategic initiative! Not surprisingly, this experimental unit had trouble gaining traction because it was burdened with the processes and culture of the mother ship. It functioned as one business unit of a big, old company.

This mistake is understandable. Established companies regularly introduce strategic initiatives, like new product launches, mergers, market expansions, and organizational transformations. Those strategic initiatives enhance, extend, and tweak their existing value propositions for purposes of growing revenues, profits, and shareholder value. Ultimately, however, these strategic initiatives introduce incremental changes. They do not redefine the company’s value proposition; thus they do not require that an established company act like a startup.

In contrast, Toyota Motor Co. created a small, internal startup called Toyota Connected North America (TCNA). Born in 2016, TCNA leads development of Toyota’s telematics and big data services, as well as the company’s Mobility Services Platform. TCNA is experimenting with enhanced product features — for example, an automobile that detects parking spots — as well as new business models such as car-sharing and ride-sharing opportunities.

By setting up TCNA as a startup with its own CEO and a small team of data scientists and software engineers, Toyota was facilitating experiments with new technologies and customer value propositions. Because these people were not burdened with the formal processes and metrics needed to sustain the success of Toyota’s established automobile manufacturing business, they could focus on the task at hand. They could learn what worked.

Many business leaders are reluctant to set up independent digital units because they worry that independent e-commerce initiatives may be difficult to integrate back into existing businesses. That misses the point. Yes, a company’s digital startups can and should take advantage of the organization’s unique products, services, and data. However, the startups are separate businesses. They link back to established operations through APIs, not seamless end-to-end processes. If the independent digital unit ends up integrated into the old business, it’s not a new business.

Have a Mission-Driven Design

A mission-driven organization focuses people on outcomes rather than fulfilling roles. A focus on mission leads naturally to empowering people to solve problems. Startups typically focus on mission because they have no established ways of working. They simply address problems and opportunities as they arise. Doing so accelerates learning and, ultimately, business success.

Zack Hicks, CEO of Toyota’s TCNA, told me that his teams can meet with potential customers on Monday and deliver code on Friday. That kind of activity excites both customers and employees. Perhaps even more important, it creates a sense of urgency that moves a company quickly to identify whether an idea has promise or not.

Because they work to fulfill a mission, not an established role, people in startups invariably embrace agile methodologies, iterating quickly to build on what’s working and abandon what isn’t. This can be a cultural challenge for traditional leadership: Despite the success of agile methodologies and iterative approaches in meeting customer needs, leaders in large organizations often worry that empowering teams will lead to chaos. These leaders tilt toward established, formalized structures and roles to mitigate that risk. In mitigating the risks, however, they also reduce responsiveness.

It’s true that there’s no template that describes how hundreds of agile, empowered teams work effectively to deliver high-level goals. But startups offer a basic model: They start with only a few teams and add new teams gradually, which allows them to learn where missions aren’t distinct enough or where interdependencies require special attention. Mission-driven startups like Spotify are constantly adapting their organizational design to balance the autonomy and alignment of teams. They aren’t discouraged when things go wrong. They simply address issues daily to meet desired outcomes.

Embrace Frequent Pivots

One important characteristic distinguishing startup projects from strategic initiatives is an expectation that the idea might not work. This is an appreciably different mindset. Established companies that pursue major strategic initiatives invariably make big investments of resources, making the initiative both high profile and high risk. Leaders end up loathe to abandon struggling initiatives, usually choosing instead to revamp and reinvest.

Startups simply pivot. Because the initial goal of the startup is to identify a viable value proposition, most leaders of startups will be quick to jump ship if an idea is headed nowhere. They are eager to explore for ideas that work and are not possessive of those that don’t.

Admirers tend to pay most of their attention to the successful innovations at digital companies. But failures play just as important a role in the success of digital businesses. Airbnb’s founders learned early on that the market for renting an air mattress on a stranger’s floor was limited. Instagram couldn’t sell a complicated app designed for checking in, hanging out, and sharing pictures with friends. Twitter started as a podcasting platform, Odeo, which quickly succumbed to competition from iTunes. Audi AG abandoned a “share [a car] with five friends” app — one of the many startups that have emerged from established companies but never gained traction.

Successful leaders aren’t afraid of failed ideas. But they don’t want to associate with them for long. They see what didn’t work and use that learning to target a new idea with a fresh chance at success.

Accept Delayed Profitability

Quarterly financial reviews have pushed established public companies to have little patience for delayed profitability. In contrast, the venture capitalists who fund startups recognize that the reason entrepreneurs need venture capital is because it takes time to convert a bold idea into profits.

Established companies need to act as venture capitalists for their startups. They can provide seed funding for their digital ideas and give people time to experiment, pivot, and establish markets. By funding startups rather than strategic initiatives, the investments can be small enough to allow time for profits to accumulate.

At Toyota, the investment in resources in Toyota Connected is still small — as are revenues and profits. But, like any other successful startup, TCNA is growing. It now has 200 people, and Toyota is introducing a new (small) sister startup, Toyota Connected Europe, to explore mobility solutions tailored to the European market. Although Toyota Connected does not represent a significant percentage of Toyota revenues, the company president, Ako Toyoda, touted these startups in his annual letter as leading the way to next-generation mobility.

Digital business is daunting specifically because a company’s prior success does not provide a recipe for future success. The company is embarking into uncharted waters. That’s not the mandate of a strategic initiative: It’s a job for a startup.

Established companies sometimes make the mistake of trying to have it both ways: They set up a company within a company to give a project speed, but they also try to leverage their competencies around scale. Do that too soon, though, and scale gets in the way and works against them, not for them.

Eventually, though, scale matters.

When it’s time to push out a successful concept, internal startups don’t have the resources to go big. Just like other startups, they’ll be unable and maybe even uninterested in scaling — they’d prefer to sell themselves to a bigger company. That’s when an established company’s startups will fully appreciate the benefits of a being part of a big company: Their parent can cash in on an institutional ability to formalize and optimize core business processes, and they can run with the project and bring it into their world.

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