Mistakes are worth contemplating, and yet we often don’t. The reason, I think, is because it hurts a little to focus on them. It’s not fun to see ourselves that way. Mistakes are definitely not ego food.
But there is something very important to remember about mistakes: Not focusing on them can ultimately be more painful.
Sixteenth century French Renaissance writer, Michel de Montaigne, wrote, “Those things are dearest to us that have cost us the most.” Think he’s talking about mistakes? I do. Do you think of your mistakes as “dear”?
If you don’t contemplate your mistakes and learn from them, you are subjecting yourself to double jeopardy. Because today you will not only make the new mistakes we are all destined to make as we go through life, but you’re also doomed to repeat the old ones you should have learned from yesterday.
Whether your mistakes are valuable or expensive depends on whether you contemplate and learn from them, or deny them and keep on paying for them. I think paying for a mistake once is “dear” enough, don’t you?
Around the turn of the century, I ran across a study that was conducted to look at changes in the way businesses leveraged assets to execute their business model between the 1970s and the 1990s. Reading the results of that survey was an “Aha!” moment for me, and it contributed significantly to my thinking about how we would do business in the 21st century.
Study author and intellectual property attorney, Kenneth Krosin, found that in the late 1970s, corporate assets amounted to about 70% fixed assets, like buildings, equipment, tools, fixtures, inventory, etc., and about 30% intangible assets, a/k/a intellectual property (IP), such as patents, trademarks, licensing and trade secrets. But the big news in this study was that by the end of the 20th century, those asset category percentages had essentially inverted. By 1999, businesses were leveraging around 70% IP, and only 30% were assets that had serial numbers, stock numbers or an address.
Welcome to the Digital/Information Age.
In the speeches I deliver to small business owners around the country every year, I describe the findings of the Krosin study so I can poll the audience about how they’re leveraging IP. My unscientific findings show that, while most small businesses are not quite leveraging IP to fixed assets at a 70:30 ratio like the big businesses in the Krosin study, most are leveraging IP more every year and fixed assets less.
Besides the types of intellectual property - patents, etc., - there are two categories of IP: 1) the kind that someone else creates, for example, the patented software you license to use on your computer; and 2) the kind that a business creates for itself, like a delivery scheme developed internally that reduces fuel costs, which is often employed as a trade secret.
In the 21st century, it doesn’t really matter who creates the IP your small business is leveraging, as long as you’re continually finding new ways to do so. I believe that any small business that isn’t leveraging IP more and tangible assets less is headed for extinction.
I’m happy to report that Kenneth Krosin (foley.com) has become a member of my Brain Trust and has joined me several times on my small business radio program, The Small Business Advocate Show, to talk about IP and small business. I think you’ll enjoy my most recent interview on this topic with Ken. And don’t forget to leave a comment.
In the second century B.C., the Roman statesman, Cato, began learning Greek at the age of 75. When asked why he was undertaking such a challenging educational enterprise at his advanced age, he replied, “This is the youngest age I have.”
No matter what we do, no matter where we go, owner or employee, and now more than ever before, we must continue to study, train and learn. Everyone in your organization. Everyone. Everyday. Life-long learning.
Are you feeling threatened, maybe even frightened these days with all of the economic challenges, plus the changes brought on by the advent of the information age? Me, too. Sometimes it seems we’re like Alice - running as hard as we can just to stay in one place. And in our Wonderland, everything is changing so fast that what we learned today may be obsolete tomorrow.
The irony is that the thing that is creating so much potential for anxiety is also the thing that can help you stay competitive: Technology. Specifically, the unprecedented wealth of information available on the Internet.
When I feel threatened by all of the new knowledge and capability that’s emerging, I just make a point to learn something new everyday, with emphasis on social media and e-commerce, or how my industry is adapting to the virtual marketplace. Anything. And when I acquire that new understanding or capability, I smile like Alice’s Cheshire Cat because learning makes me feel stronger, as if I’ve gained a little ground in the marketplace. Maybe today I put the heat on a competitor. Advantage: Me.
Give it a try. The only thing better than your garden variety smile is one that comes from knowing that you just got a little smarter. And remember the wisdom of the statesman: This is the youngest age you have.
Recently, on my small business radio program, The Small Business Advocate Show, I talked about this topic with e-learning expert, Anita Rosen, author of “e-Learning 2.0,” and one of our outstanding Brain Trust members. Take a few minutes to listen to what this smart lady had to say. And, of course, be sure to leave a comment.
So, we have a new Congress and administration who are tasked with strengthening our financial system and economy which, on many fronts, is in dire straights. With that in mind, the new House of Representatives delivered to the Senate for their consideration an $818 billion bill that is its answer to economic stimulus, called the “American Recovery and Re-investment Act.” It doesn’t take long, nor a degree in economics, to see that this bill could never be mistaken for a stimulus package and, sadly, is nothing but a pork-barrel spending spree. With interest, it’s generally accepted that this bill will reach $1.3 TRILLION - that’s right, with a “T.”
Wouldn’t a reasonable person think that a stimulus package would be front-loaded to have its intended effect in 2009 and 2010? But according to a Congressional report, only $26 billion would be spent in 2009 and $110 billion in 2010. That’s less than 17% in the first two years. Some of the money in this bill would be spent as late as 2019. Shouldn’t a stimulus bill be designed with a greater sense of urgency?
And wouldn’t that same reasonable person think the goal would be to actually stimulate the economy by encouraging employers to keep their employees and create new jobs? So, what does the bill provide for the largest job creation sector in the economy, small businesses? Primarily an extension of existing tax deductions, like the ability to expense up to $250,000 of capital items in one year instead of depreciating them over time. Plus, less than a handful of other tax provisions, none of which will free up the credit market or encourage a business to hire or at least not lay off. That’s it for small business - more of what we already had.
But there is $550 billion in NEW spending (a/k/a Pork) and $90 billion for infrastructure, most of which won’t hit the economy in the next 12 months. Then there’s $87 billion for Medicaid and $79 billion for schools, just to name a few. Now, reasonable people can disagree about whether this money should be spent on these things, but no reasonable person could argue that this money will stimulate the economy very much, and certainly not in the next critical 12-18 months.
At this time, the bill is in the Senate where it will be modified to produce that body’s version. Then it will go to the Conference Committee for final editing before going to the President. Let’s hope that somewhere along the way those who understand the difference between pork and stimulus will prevail and the new bill will have more of the latter and less of the former. Otherwise, we’ll be better off with no bill.
Recently, on my small business radio program, The Small Business Advocate Show, I discussed this issue with several public policy experts who are members of my Brain Trust, including Ray Keating, Chief Economist for the Small Business and Entrepreneurship Council (sbecouncil.org); Giovanni Coratolo, Director of Small Business Policy at the U.S. Chamber of Commerce(uschamber.com); and Rich Galen, creator of the cyber-column, Mullings.com and political strategist (Republican). Here are the links to each of those interviews. Don’t miss what these smart men have to say. Also below is a link to my individual thoughts on the so-called economic stimulus package.
For Ray Keating:
For Giovanni Coratolo:
For Rich Galen:
For Jim Blasingame:
“A man’s gotta know his limitations.” This is the wisdom of Inspector Harry Callahan, the detective played by Clint Eastwood in the “Dirty Harry” movies. Small business owners can learn a lot from Harry.
A friend of mine says, “if you’re not green and growing, you’re ripe and rotten.” He means that every business is headed in some direction, either up or down. For small businesses, moving up involves a lot of challenges because we often don’t have enough critical mass – capital, equipment, organizational talent, distribution, etc. – to take the next growth step on our own. So how do we still grow in the face of this limitation reality? Two ways:
1. Grow organically, which means one tiny step at a time by being a frugal manager, limiting debt and leaving as much of the profits in the business as possible, in the form of retained earnings.
2. Create strategic alliances, which could include financial, organizational or market partners who have something you need, such as capital, talent, contacts or a distribution network.
The first one is the more conservative option, but an excellent one. The second option is more aggressive and requires more sophistication on many levels, but can produce many advantages. Actually, most small businesses that find long-term success do so by blending both of these strategies to varying degrees over the life of the company.
Recently I interviewed two different experts on this topic: Gary Harpst is a management expert who helps companies develop growth strategies that work for them and author of “Six Disciplines Execution Revolution”, and Dave Morse, who is CEO of Location Based Technologies and PocketFinder- whose business model requires them to develop national and international alliances. Unless you like being ripe and rotten, take a few minutes to listen to my conversation with these guys on my small business radio program, The Small Business Advocate Show. And be sure to leave a comment or a question.
For Gary Harpst:
For Dave Morse:
As we approach the second decade of the 21st century, it’s clear that the strength of the American economy will come more from our ability to create and sell intellectual property (IP) than the tangible things we were so known for in most of our history. And as globalization – efficiently transporting goods, services and financial assets around the world – continues apace, our IP is also being delivered away from American shores and, therefore, the protection of U.S. intellectual property laws.
Our trading partners around the world have their own IP laws that dictate how our property will be treated there, but unfortunately, those laws often don’t provide adequate protection and, frankly, our innovations can get ripped off. This is where our federal government comes in.
The U.S. Department of Commerce (DOC) is the primary organization that negotiates our business relationships with other countries, including IP issues, and the leadership of that cabinet level department is changing. Barack Obama has chosen Bill Richardson to head up his DOC and since small businesses are creating more and more IP, and doing more and more international trade, this appointment bears watching. Richardson has an impressive resume as a governor and diplomat, but time will tell about his effectiveness as the head of the DOC.
Someone who will be watching the Richardson DOC is Dr. Mark Esper, with the U.S. Chamber of Commerce. Recently, Mike joined me on my small business radio program, The Small Business Advocate Show, to talk about IP, trade issues and the Richardson selection. Take a few minutes to meet Mike and listen to our conversation. And of course, comments are always welcome.
