Top Planning Secrets of Million Dollar Entrepreneurs – Part 3
This is the third post in a series on planning secrets of million dollar entrepreneurs. The exercises shared in this series are advanced and represent an exclusive look inside the elite entrepreneurial group EO (formerly known as YEO – Young Entrepreneurs Organization). EO members must have businesses with a minimum of $1,000,000 in revenues. Below is what EO members recently learned during an Executive Management Program in Boston, MA. Scroll to bottom if you are a beginning-level planner.
Caveat: The following is a cursory overview ONLY. To experience the depth and detail of these business gurus’ publications and workshops, you must contact:
LET’s GO: After completing the Painted Picture phase of planning, and the Gazelle’s One Page Plan, you are ready for what has been referred to as the “Warrior Growth Exercise” by Kaihan Krippendorf. The basic gist is this: Brainstorm and ask yourself and your team a bunch of questions, then prioritize them. While there are numerous components to this exercise, a few highlight are below.
To set the stage, let’s start with an example of a company demonstrating the strategic principles espoused by Krippendorf. Verne Harnish, author of The Rockefeller Habits and founder of Gazelles, describes the example in his newsletter:
Kola Real has competed successfully against Coca-Cola in Latin America — they partner with rural bottlers; re-use old beer bottles; distribute through beer companies; stop advertising; and sell huge sizes. These are all ACTIVITIES that would almost be impossible for Coca-Cola to do. As the famous strategist Michael Porter emphasizes in his classic HBR article What is Strategy? (Read the article at “mygazelles.com” login or quick registration required), the key to strategy is doing different ACTIVITIES than your competition.
PART 1: BRAINSTORM. Keeping this example in mind, take a few minutes and brainstorm these questions from your company’s perspective.
1. Who else benefits if I win? What partners are out there (even unexpected partners) with whom you can ally yourself and your company. Think about the rural bottlers of Kola Real.
2. What are the next battlegrounds to which you can move early? This is about staying ahead of the curve. What do you think Kola Real is thinking about? Other beverages or products? Other rural locations with which to partner? Where can YOU be ahead of the curve and make the first move?
3. What inputs can you control? In terms of inputs, think about this: If you provide educational tools you might control the content. If you are Kola Real you may control the cola recipe, the bottles used for the cola. Think about the factors going into your product or service, and what you control. Use the following phrase as a test to really push the definition of control: “What makes you impenetrable?”
4. Can you force competitors into a two-front battle? This is about hitting your competition from two sides. Here is an example: Google comes out with “Ad Words.” Microsoft tries something similar. Then Google creates a version of its own operating system through Google docs. Microsoft drops their pursuit of competing with Ad Words and focuses on its operating system. The reason? The operating system is Microsoft’s sweet spot. Microsoft can’t afford market share loss from Google docs. This frees up Google docs to go and crush Ad Words.
5. Can you introduce a new piece on the game board? Can you create something disruptive? Said another way, can you create something out of nothing? For example, brainstorm about players you WISH were in the game, with a specific focus on players that could elevate your company to the next level.
6. Can you coordinate the uncoordinated? What people, groups, stakeholders have not been coordinated or brought together? How can you help? Kola Real did a great job of this with rural bottlers.
7. Can you embrace what others abandon? Think about technology, relationships, resources, other. These might be things that you can embrace, to which others do not attribute value or have “cast out.” Example: RIM’s Blackberry was born out of what others abandoned: Pager technology.
PART 2. Prioritization. A suggested next step is Krippendorf’s Option Prioritization. While there are several intricate parts to this entire planning process, we are highlighting one way of sorting the brainstorm you just completed. This is pretty much like a popular way of sorting to-do lists. Or, for any M & A (merger and acquisition) junkies out there, a Relative Acquisition Attractiveness Matrix. You can stick almost anything in a two-by-two matrix for clarity and visual sorting. Jack Welch does it for people, Kaihan has does it for strategic options.
- Draw a two by two matrix. Label the left side “Attractiveness.” Label the bottom “Achievability.”
- Take your ideas and place them in the matrix based on low or high attractiveness and achievability. Here is an example of how to think about which ideas to keep, and which ideas to toss:
- High attractiveness, low achievability = These are crazy ideas. Keep 2 of these.
- Low attractiveness, low achievability = These are a waste of time, get rid of them.
- Low attractiveness, high achievability = These are more tactical. Outsource if of value.
- High attractiveness, high achievability = These are no brainers. These are the ones on which to focus. Pick five to seven and focus your team around these during the year (focus on one idea each month or quarter).
To move these ideas forward, many of the entrepreneurs use suggestions of the experts outlined in this series. Feel free to contact these business gurus or use your own process for translating strategy to action. Stay tuned for the next part in this series which highlights one entrepreneur’s process for translating ideas into action.
PLANNING BEGINNER? For beginners, please see the Entrepreneur in the Classroom business plan exercises (3-3) and (3-4) in Module 3, slides 4 to 43. Here is a link to the EITC free curriculum
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The NFIB Young Entrepreneur Foundation is a 501(c)(3) organization promoting the importance of small business and free enterprise to the nation’s youth. More information is available at www.NFIB.com/YEF. The Foundation is associated with the National Federation of Independent Business; NFIB is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals.
Entrepreneur In The Classroom. The NFIB Young Entrepreneur Foundation Entrepreneur-in-the-Classroom (EITC) supplemental curriculum exposes students to entrepreneurship and the necessary steps to take an idea and turn it into a business. The free curriculum can be integrated into classes teaching a variety of subjects including music, art, fashion, business and many more. You must be registered to view the full Entrepreneur-in-the-Classroom curriculum.
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