"It is not the strongest of the species that survive, nor the most intelligent, but the ones most responsive to change" Charles Darwin

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7 Triggers of Business Crisis—Part 4: A Change in the Ecomony...

TRIGGER #4: A CHANGE IN THE ECONOMY Next time you bump into a real estate agent, ask them ...

7 Triggers of Business Crisis—Part 4: A Change in the Ecomony

Are You a 68-Degree-er?...

Stay successful by learning how to change what you are “used to.” You can have...

Are You a 68-Degree-er?

7 Triggers of Business Crisis—Part 2: A Change In Technology...

TRIGGER #2: A CHANGE IN TECHNOLOGY  How fast did the movie rental industry change? Jus...

7 Triggers of Business Crisis—Part 2: A Change In Technology

Winter is For Gladiators...

When other businesses are shrinking, what is your business doing? Watch the video to learn...

Winter is For Gladiators

7 Triggers of Business Crisis—Part 4: A Change in the Ecomony

TRIGGER #4: A CHANGE IN THE ECONOMY

Next time you bump into a real estate agent, ask them if the economy is capable of changing an industry. Most of them can captivate you with real-life campfire thrillers that illustrate first-hand how economic recessions and interest rate swings have affected their business personally and painfully.

Can’t relate to real estate? How about government policy? Can that affect your business? You bet.

Need something even easier to wrap your hands around? Consider the modern-day cup of coffee. Think about those four dollars people donate every single day to Starbucks. Ask Starbucks chairman, president, and CEO Howard Schultz about how an economy that justifies paying $4 for a consistent cup-of-coffee has changed his life and the way he does business.

And while we usually think of Starbucks as flush with sales and profits, they stand as the sterling example of surviving and thriving in economic hardships.

At the end of the second quarter of 2008, Starbucks quarterly earnings tanked. Global operating income had sunk 26% and the company’s in-store sales figures were negative for the first time in the brand’s history. Meanwhile, consumers were tightening up and cutting their spending as the global recession took hold. In July of 2008, Starbucks lost money for the first time reporting a net loss of $6.7 million for the third quarter. In the fourth quarter, profits dove 97% and earnings for the year were down 53%. As the financial crisis sprawled across Europe and Asia, Starbucks sales figures were at negative 8%, effectively rendering Starbucks’ existing economic model completely inept.

If you’ve never read Howard Shultz’s book Onward: How Starbucks Fought for Its Life without Losing Its Soul, here’s the crux: after eight years away from the biz, Schultz returned as CEO while the financial walls were burning down at his beloved brainchild.

What would you do in that situation? Imagine you were steering the ship during the worst financial crisis in decades. Imagine being Schultz, opening your newspaper in the morning knowing your customers were sipping their morning joe over dismal headlines like this one from NPR on January 29, 2009: More Bad News Brewing At Starbucks.

But as we sit here five years later, we know what happened in this story. We’re coming off a 2013 that Schultz described as, “by far the best in Starbucks’ 42-year history,” and according to its financial report, Starbucks expects a revenue growth of 10 percent or greater in fiscal 2014.

So if you want to learn from one of the best leaders whose results speak for themselves, don’t just listen to Howard Schultz, hear what he is telling us. Hear the message encoded in the following statement from March of 2011, three years after resuscitating the brand from the brink:

“I returned to Starbucks as CEO in January 2008 because we had to navigate through our own issues and deal with the cataclysmic financial crisis. The past two years we’ve done our best work. We’re a much stronger brand because of the recession.”

 

When Schultz came back in the middle of the crisis, he ceased the company’s go-go expansion. He cut out nearly $600 million in costs, and for three hours on February 26, 2008, he orchestrated the closing of more than 7,000 American Starbucks stores for a retraining session for employees.

“This is not about training,” Schultz told his employees, “This is about the love and compassion and commitment that we all need to have for the customer.”

Can you hear the message? Schultz used the recession as the impetus to re-focus on his core business. He asked himself what business Starbucks was in, and then had a good long look at what business they needed to become.

“We’re doing work now on the store of the future,” Schultz told USA Today.

The CEO managed to rekindle love for his customers, meanwhile, he effectively checked the ego that will control ANY company that loves its product more than the people they want to enjoy it. And that is why Starbucks stands as a textbook example of how to come out on top—stronger even—not in spite but because of tough economic times.

One thing I know from my experiences helping with the turn-around of thousands of business of every size: CRISIS CREATES BREAKTHROUGHS.

Crisis takes us from thinking about the things we could or should do and it requires us make massive changes. Crisis brews innovation and revolution for those who use it to create, instead of letting it destroy them. [Click to Tweet this quote.] Those that fail to adapt to a new economic environment end up in the graveyard of business—the place 96% of all businesses end up even after 10 years growth.

Were you in business in 2008? If you still are today, congratulations. How did the global financial crisis change the way you do business today? What did you learn, and how did those lessons shape you into who you are now? Most importantly, do you think it’s likely another economic shake up could happen sometime in the next few years? Perhaps now is the time to anticipate what you would do to be more efficient and effective in order to get yourself out in front of the ever-ebbing and flowing economic tide.

Are You a 68-Degree-er?

Stay successful by learning how to change what you are “used to.”

You can have goals, but…
sometimes we achieve success, and then we do things to bring ourselves back down to our comfort zone. There’s a reason.

Learn How to Expand Your Business Identity and Stay Successful!
If your business is ready to grow (and stay there), apply now to attend Business Mastery with Tony Robbins in Las Vegas, August 13-17, 2014 !

Please send your application now as space is extremely limited.

7 Triggers of Business Crisis—Part 2: A Change In Technology

TRIGGER #2: A CHANGE IN TECHNOLOGY 

How fast did the movie rental industry change? Just like that.

If you’re reading this, I challenge you as a business leader to examine how YOU are like Blockbuster? How are you stuck in your head and making yourself a potential target to emerging competition?

In business, the psychology of a leader who resists a coming trend in technology is capable of destroying a $4 billion company. Conversely, if you become the leader that can figure out how to use technology to fulfill needs and add value, you become the disruptor not the disrupted.

Consider a few of the most recent technology disruptors. Let’s start with Instagram, which Facebook purchased in April of 2012 for $1 billion. Imagine that. If you came up with the idea of a mobile app to share your photos through filters with friends, you’d have $1 billion dollars.(Hint: It takes 1,000 one millions to stack up to one billion dollars!) Get the idea?

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Need more proof? Consider the mobile messaging service, WhatsApp that Facebook recently purchased for upwards of $16 billion (Mark Zuckerberg’s largest acquisition to date). WhatsApp was founded in 2009 and three years later it was processing 10 billion messages daily.

If you’re unsure about how significantly WhatsApp triggered crisis in the communication industry, just ask the parent of a teenager. Consider the billions of messages sent via WhatsApp technology FOR FREE, evading the per-text charges of cellular carriers and making it worth its weight in SMS-text-defying gold.

(Analysts’ estimate global SMS revenue at around $100 billion a year annually—money that was essentially all profit for veteran carriers like Verizon and AT&T that is now re-directed through WhatsApp.)

Participating in tech shifts—not just protecting yourself from them—can make way for your impact in the world and your fortune in business.

Ask yourself: What technology could change my business? What technology could we be the first in our industry to employ? How can I be the creator of change?

EDITOR’S NOTE: This post is part of Tony Robbins’ 7 Triggers of Business Crisis. In case you missed the first, you can go back and review it here: #1 A Change in Competition

Winter is For Gladiators

When other businesses are shrinking, what is your business doing?

Watch the video to learn why you need to get a gladiator mentality and learn how to thrive in any “economic season.”

“In the worst moments of your business, that’s where you will have the greatest breakthroughs.”
— Tony Robbins

How Did Zappos CEO Tony Hsieh Create a Legendary Company Culture?

Businesses that chase a vision (and not the money) are the ones that truly change the world – and the market.

Zappos.com, Inc. is a company that focuses on customer service and company culture. We believe that if we get the culture right, then most of the other stuff, like delivering great customer service, or building a long term enduring brand, will happen naturally on its own.

In this video from Business Mastery in 2010, Tony Hsieh reveals how core values transformed Zappos into a business with over $1 billion in yearly gross sales. Hit play to discover how a powerful company culture can take your business to a new level.

See Tony Hsieh LIVE!

Want to go deeper? NEXT MONTH, see Tony Hsieh LIVE at Business Mastery, where he will lead a rare strategy session (and Q&A!) on how to create a passionate company culture, and how to translate it into exploded sales, boosted productivity and geometric growth for your business.

Only a few seats remain. Apply now to attend Business Mastery with Tony Robbins and Tony Hsieh in Las Vegas — August 13-17, 2014!

Your competitors are showing up — will you? We don’t know when Tony Hsieh will come to Business Mastery again; don’t miss this rare opportunity to give your business the raving fans it deserves.

All scheduled speakers are subject to change without notice.

7 Triggers of Business Crisis—Part 1

If there’s any one lesson I’ve learned from owning more than a dozen companies, it’s this:

Leaders anticipate change while the losers are left reacting to it.

The ONLY constant is change. And the funny thing about you and I being alive right now is that technology is like a personal trainer pressing the UP arrow on our treadmill, speeding up the business process and causing change to happen faster than ever. We’ve got to keep up or we fall off!

Businesses today feel the pressure of the narrowing window BETWEEN seismic changes in any industry and across cultures. That’s because the life cycle of ideas and products has shrunk as the time span between the moment you come up with a breakthrough concept and the instant somebody else comes up with a better one, has gone from decades to years, to months.

Your competition is watching you through open windows (your blog post, your Twitter feed, that office photo you just posted to Instagram). Your cards are on the table. Everybody can see what you’ve got and they’re using it to come up with what’s next. Mass communication at the click of a mouse has given way to a culture that hinges on sky-high expectations and very low patience.

So how do business leaders stay on the cutting edge and find a way to do more for clients and customers than anyone else in your industry?

Money and Chess Set

The answer is remembering that business is 3-dimensional chess. Every move we make is setting us up for what’s next. To be successful you have to be in control.

Anticipation is power.

Leaders in every industry find a way to become the chess player, not the chess piece.

 

Finding business success is not only about creating value, it’s about monitoring the trends and anticipating the challenges coming down the pike.

The hard fact is that 96% of all business are gone within any 10-year period; a little less than 4% actually survive—that doesn’t mean they’re profitable, that just means they’re still standing. The 10-year benchmark is just the beginning of a successful business in the making. (Take a look at the liquidation of Lehman Brothers to see how a 150-year-old company involved in over a trillion dollars in transactions managed to lose control and collapse before our eyes.)

So how do we anticipate change on the horizon? By understanding that there are triggers of crisis. Accept this truth and create a map of the terrain ahead of you so as to scan the periphery constantly for any outsiders approaching. (Remember when Apple “computers” entered the music industry? There’s no such thing as a closed course in business!) Anyone can be a player. So decide today to become the chess player, not a chess piece.

So let’s look at the factors most people fail to anticipate. I boil it down to the 7 Triggers of Crisis. Think of these like big red reset buttons with the uncanny ability to wipe out established businesses—and sometimes entire industries—almost overnight.

TRIGGER #1: A CHANGE IN YOUR COMPETITION

The first trigger that will guarantee painful loss in any business is a change in competition that you’re not prepared for. The examples of this classic anecdote are endless.

Blockbuster Store ClosingYou can be the Blockbuster Video of your industry, thinking you’ve literally got the market cornered, and in the blink of an eye you’re a non-factor all because you failed to acknowledge the appeal and added value of an emerging competitor.

Consider this: Last year, Netflix reported revenue of $4.37 billion—billion, with a B. The opening scene of this real-life-movie-in-the-making was shot in 2000 when the young Netflix tried to sell itself to Blockbuster for a mere $50 million at a time when Blockbuster was doing $4 billion per year.

Netflix practically begged to become the brick-and-mortar’s streaming service, but Blockbuster effectively scoffed and said something maybe you and I and anyone else who has ever led the pack has asked before: “What do we need this for?”

Four years later, Blockbuster launched its own streaming subscription service but it was too late: Netflix had 4.2 million subscribers by 2005.

Sure, the stubborn storefront boasted 50 million members in their 2007 heyday but Netflix announced its billionth DVD delivery that same year. The sea change was swirling on the radar. In 2010 when Blockbuster finally filed for bankruptcy, Netflix’s worth was up around $13 billion.

So note this lesson whether you’re a small business or a part of a billion-dollar behemoth: No matter your industry, competition will create crisis.

It seems impossible that 50 million customers could slip away, but Blockbuster stores are boarded up while you and me and every kindergartner we know has a Netflix account.

Netflix gNetflix Screenshotenerates 25 percent of all web traffic in North America.

Think about that, 1/4 of all web traffic in North America can be traced back to somebody streaming a movie on Netflix!

 

They created an industry crisis. They anticipated technological trends. They changed our culture. They played the game and they moved the existing pieces on the board out of their way.

Blockbuster had the chance to innovate and evolve and create—not destroy—but they decided they didn’t need what their competition had. Netflix execs admit that if Blockbuster deployed their streaming subscription sooner, Netflix would have had a hard time shaking the foothold Blockbuster held on the movie rental market. Instead, we watched competition come in and knock off a 20-year-old industry king.

Checkmate.

New Ways to Expand Your Market Share with Prospecting

No matter how successful you are as a business owner, you’re always going to face an urgent need to uncover new opportunities. Passive “farming” sales strategies are not as viable as they used to be; instead, you must focus on prospecting—but with a twist. Here are five fresh strategies you can put into action today to attack new markets and skyrocket your revenue.

Prospects and Customers 1. Get Personal.
Thanks to today’s highly social marketing methods, your business can foster and develop many one-to-one client  relationships. It’s imperative that you engage in these customer conversations—because one long-held principle is still true: On average, less than 25 percent of leads are never contacted. You should be snapping up the prospects being overlooked by your competitors.

2. Create and Maintain Momentum.
Every day you are not growing market share and driving revenue is a day someone else is taking market share and revenue away from you. An effective sales team is one that focuses not only on active demand, but even more so on latent demand. That’s how your business can create and maintain momentum.

3. Develop Effective Leadership.
Organizations struggle with prospecting because many sales people are not comfortable with it. Whether you’re a multi-million dollar company or an army of one, it’s your sales force that needs to go the “last mile” in attacking and capturing new markets. Fortunately, cloud technology can be very effective in scouting business prospects.

4. Maximize Efficiency.
The past several four years of economic uncertainty have caused many organizations to downsize. Now that markets are expanding again, businesses are being confronted with the daunting task of trying to do less with more—like driving 20 percent more revenue with 20 percent fewer people. You must harmonize your resources with your level of demand.

5. Go Global.
It seems that almost overnight, the world has evolved into one giant market. There are of course challenges to branching out internationally (like training, evaluating and managing sales teams between continents) but the benefits can far outweigh the costs. Through managed expansions or channel partner relationships, your business can find massive demand in any corner of the globe.

“Tony Robbins is the ‘ultimate coach’ for that special breed of men and women who will never settle for anything less than they can be.” —Pat Riley, Hall of Fame NBA Coach

The Value Chain: How to Deliver on the Promise of Service

Let’s try to answer a fundamental question: What is a business?

You may have a few different answers: a way to make money; a service; the backbone of the economy. Fundamentally though, it is a system for consistently supplying significant value to customers.  That is why businesses exist and why they thrive when they do it well.

Truthfully, the only product people buy or sell is results. Meeting your customers’ needs and desires is the only way to keep  your company’s doors open. If you can’t consistently add value, you probably won’t be in business much longer.

“Outstanding companies begin with outstanding people.” — Tony Robbins

The key to producing uninterrupted customer satisfaction is creating a value chain. Every person on your staff is a link in the chain, and each link must perform three core responsibilities:

  1. Effectively Receive. Actively and intelligently listen to your customers’ needs. Real leaders hear past the literal message and  find the implicit communication behind it.
  2. Add Significant Value on Time. Late service breaks the chain, which you never want to do.
  3. Effectively Supply and Verify. Again, timeliness is a crucial factor if you hope to have repeat business. Clarify with the next link in the chain to ensure they know what’s required for their step of the process, and provide them with what’s needed to maintain uninterrupted service.

Some value chain structures are routine, and team members learn their responsibilities through everyday performance. But what about unusual events like a random audit? Even then, it’s just as important your value chain provide timely satisfaction, which is why you must train effectively and verify results at every step. Breakdowns in the value chain are triggered by over-confidence, distraction, exhaustion, a lowering of standards, confusion, or someone going beyond their skill level. It only takes one breakdown to destroy value for the customer.

If there is a break, sit down and draw out the entire value chain. Where did the breakdown occur or begin? Determine whether it happened at a consistently weak link, then develop a solution to immediately and permanently address the problem.

Your value chain is only as strong as your team. Here are the qualities that will make each team member successful:Value Chain Team

  1. Clear and committed
  2. Responsible for the outcome
  3. Doesn’t make assumptions
  4. Trusts but also verifies
  5. Leverages, doesn’t delegate
  6. Has the heart of a servant, an attitude of gratitude and love for the team
  7. Gets and gives help and is coachable

As a leader, the ultimate responsibility is yours, so effective strategy and execution must  flow from you to keep your value chain strong.

 

How to Recruit Gold-Medal Team Members

Gold MedalWe all need to hire the right people to move our company forward. Having a clearly defined “job standard” makes this possible. You must know specifically what you are recruiting for.

A JOB STANDARD DEFINES:

  1. The purpose of the job (i.e. the activities, necessary skills and rewards).
  2. The traits and characteristics of the ideal candidate (i.e. strengths and expertise).
  3. The necessary elements for an outstanding team  (i.e. mission, pace, philosophies, attitude, etc.).

Once you’ve defined the perfect job standard, you must communicate this ideal in a clear job description. Employees need to know exactly what is expected of them and the metrics by which their performance is measured.

CORE BELIEF:

All people have the potential to be excellent, given:

  • The job rewards their natural behavior.
  • Skills, knowledge and training are sufficient to meet job needs.
  • Management is appropriate for the individual and the expected results.
  • Personal goals can be achieved through excellent job performance.

When preparing official job standards, observe the following:

  1. Use simple language, avoiding technical terms or industry jargon.
  2. Plan and review your responses to ensure you are covering the most important points.
  3. Have the  final draft typed and retain copies for future use.

Some questions that will help you determine specific job standards:

  1. What are the major objectives or outcomes to be accomplished by the person in this job?  Avoid general and philosophical statements. State specific deliverables.
  2. What are the most frequent and essential work activities in this job? This is the most important question.
  3. What people and how many (if any) are managed by the person in this job?
  4. What are the primary people contacts in this job? (With whom? What purpose? How often?)
  5. What behavioral traits, attitudes and skills are required?
  6. What are the prerequisites for employment? (Education, prior experience, other.) Use “preferred” or “helpful” to indicate non-required prerequisites.
  7. What are the toughest parts of this job on a day-to-day basis?  These are the one or two things that require the most effort and persistence to handle.
  8. What are the compensations? Be as specific as possible in giving income range and pay formula (commission rates, bonus amounts, regular increases, etc.). Be realistic and specific in describing advancement opportunities.

The job description will make sure you and your team members are on the same page. Judge all performance against this description to maintain the proper job standard for your company.

Take Your Productivity to the Next Level—and Get Results Now

Business is about maximizing your opportunity. Learn how Tony Robbins maximizes every minute of his business day. In celebration of Small Business Week, get access to a free session of Tony’s Rapid Planning Method (RPM) and take your productivity to the next level at http://www.tonyrobbins.com/businessplan.