Tag: entrepreneurial operating system (EOS)
Why Small Giants: Choosing Great Over Big is the Better Business Strategy
There are two types of companies in the business world: small giants and big fish. The small giants are the businesses that have chosen to stay small and focus on quality instead of quantity. They believe this is the better business strategy and succeed because of it. The concept of small giants comes from Bo Burlingham’s book of the same name.
In it, he discusses why small businesses are often more successful than their larger counterparts. From my interview with Rob Dube, Co-Founder and Co-CEO of imageOne, a document management solution company, and the author of ‘Do nothing: The Most Rewarding Leadership Challenge You’ll Ever Take.’ Rob is also the co-founder, with Gino Wickman, of an organization called The 10 Disciplines, which teaches business owners a proven process to help people maximize their energy and help them live their optimal life. I have compiled the following on small giants, choosing great over big. This blog post will discuss the small giant philosophy and how it can benefit your business.
What is a Small Giant?
The small giants are the businesses that have chosen to stay small and focus on quality instead of quantity. They believe this is the better business strategy and succeed because of it. The concept of small giants comes from Bo Burlingham’s book of the same name. In it, he discusses why small businesses are often more successful than their larger counterparts.
The small giant philosophy is all about choosing quality over quantity. Businesses should focus on providing a great customer experience rather than trying to serve as many people as possible. While this may seem counterintuitive to run a business, it makes a lot of sense. When businesses prioritize quality, they tend to be more profitable. They also have lower employee turnover and can better weather economic downturns.
So if you’re looking for a business focused on quality over quantity, you should definitely consider becoming a small giant. You’ll be glad you did!
What is the Small Giants Community?
Robe Dube being part of the community, explains it as a professional business network for purpose-driven executives who want to learn new methods and systems to implement in their own businesses. There are no membership fees involved with the Small Giants Community — instead, there are three primary ways to participate: study from Small Giant PDFs and other resources, attend the annual Small Giants conference, and join small groups of peers (called “Giants Circles”) that meet regularly to support and challenge each other.
The Small Giants Community is open to any business leader who is looking for an alternative way to run their company. Whether you’re a small business owner, CEO, or president, you’ll find valuable resources and support within the Small Giants Community.
Suppose you’re interested in learning more about the small giant philosophy or looking for a supportive community of like-minded business leaders. In that case, we encourage you to check out the Small Giants Community today!
Qualities of Small Giant Companies
The small giant companies that have been studied all share some common qualities. They are:
The Leader Factor
It is widely accepted that solid leadership is a critical ingredient for any organization’s success. While this is undoubtedly true, it is also important to note that not all leaders are created equal. In particular, the leaders of so-called “Small Giant” companies exhibit unique qualities that enable them to achieve extraordinary results.
First and foremost, leaders of Small Giant companies are highly self-aware. They clearly understand what they want to achieve with their business and are also aware of the deeper purpose that drives their actions. This self-awareness allows them to lead their organizations more effectively without sacrificing the things that matter most.
In addition, Small Giant leaders are passionate and committed to their teams. They know that creating a great company requires the best efforts of everyone involved, and they work tirelessly to inspire and motivate their employees. This passion and commitment often lead to a deep sense of loyalty from team members, contributing to the organization’s long-term success.
Finally, Small Giant leaders are always learning. They realize that the world is constantly changing, and they adapt accordingly. This ability to learn and change means they are always ahead of the curve, giving them a significant competitive advantage.
The Community Factor
Being a good corporate citizen is not just a PR strategy for Small Giant companies – it is part of their core values. These organizations are part of the local landscape and are mindful of their actions’ impact on the community. They work to create a virtuous cycle of support, where the community relies on them as much as they rely on the support of the community.
In this way, they can create long-term relationships of trust and mutual benefit. As a result, Small Giant companies are not only good neighbors but also good stewards of the local economy.
The Customer/Supplier Factor
One of Small Giant companies key qualities is how they nurture their relationships with customers and suppliers. Unlike many large corporations, Small Giants consciously look for values-driven partnerships and treat those relationships with the utmost integrity. This commitment to customer and supplier relations has several important benefits.
First, it creates a support network of like-minded individuals and businesses that can be relied upon in good times and bad. Second, it helps to build trust and loyalty, which are essential for long-term success. Finally, by nurturing these relationships, Small Giants create a competitive advantage for themselves—one that is based on trust, respect, and mutual understanding.
Employee Factor
Employee retention rates are incredibly important for any company. Not only does it save money in the long run, but it also creates a more stable and productive workforce. Small Giant Companies are known for their high employee retention rates. This is because they have an’ employee first’ approach to business.
They recognize that to be a truly great organization, their employees need to be happy and advocates of the business. As such, they invest heavily in their employees’ happiness and wellbeing. This includes offering competitive salaries, comprehensive benefits packages, and a supportive work environment. In return, their employees are highly loyal and passionate about their work. As a result, Small Giant Companies can create a stable and productive workforce, which is essential for long-term success.
The Margin Factor
Small Giant companies realize there is more to success than simply increasing volume and top line revenue. These innovative businesses have sustainable models that protect their gross margins.
By keeping a close eye on expenses and focusing on quality over quantity, Small Giants can maintain a healthy bottom line. This allows them to reinvest in their products and employees, creating a virtuous growth cycle. In addition, Small Giants tend to be nimble and adaptable, another key quality contributing to their success. By being open to change and willing to experiment, these companies can stay ahead of the curve and remain competitive in today’s ever-changing marketplace.
The Passion Factor
The owners and leaders of Small Giant companies are passionate about what they do. They have a deep love for what they do, which gets them out of bed in the morning and enables them to maintain their passion through highs and lows. Their passion is evident in their commitment to their work and their continued efforts to improve their products or services.
It’s this passion that sets Small Giant companies apart from other businesses. When customers can see that the company cares deeply about its product or service, they’re more likely to trust the company and become loyal customers. This passion is also contagious and often rubs off on employees who are more motivated to do their best work. Ultimately, the passion of the owners and leaders of Small Giant companies is what sets them apart from the competition and helps them thrive.
Growth isn’t the Only Measure of Success
It is often said that growth is the only way to measure success. However, this is not always the case. While growth is certainly an important metric, it is not the only thing that matters. Sometimes, a company may be doing very well in terms of revenue and profit, but its workforce may be unhappy, or its products may be of poor quality. In these cases, growth is not indicative of success. Instead, success should be measured by a combination of factors, including growth, profitability, customer satisfaction, and employee satisfaction. By looking at all of these metrics, you can get a more holistic picture of how a company is performing.
What is a Fractional COO? And Do You Need One for Your Business?
If you’re like most business owners, you’re probably wearing a lot of hats. You’re responsible for marketing, sales, operations, and maybe even finance. It can be tough to manage it all yourself, especially when trying to grow your business. That’s where a fractional COO can help. I interviewed Rachel Beider, CEO of Press Modern Massage, a consultant, and an author of Press Here: Massage for Beginners, to learn more about how a fractional COO can help business owners and whether or not you need one for your business.
What is a Fractional COO?
A Fractional COO is a Chief Operating Officer that works for your company on a part-time or interim basis. They’re there to offer you guidance, expertise, and executive-level leadership to assist you in avoiding roadblocks in your business model and ensure that you’re on the right strategic and operational path for maximum development.
Fractional COOs provide various services at a fraction of the cost of a full-time COO, making them an appealing success tool for small and medium-sized businesses and organizations just getting started without the cash for a full-time COO.
The Fractional COO model is becoming increasingly popular as businesses look for ways to do more with less.
What does a Fractional COO do?
The fractional COO’s duties vary based on the company’s demands, the CEO’s skillset, and the fractional COO’s skill set. There are a lot of tasks that a fractional COO can handle in numerous areas. The sole responsibility of a fractional COO is to run the firm better than it did when they joined it and to handle all operational issues to relieve you of duties and allow you to concentrate on your long-term business goals.
In general, though, these are some of the focus areas most COOs come to handle;
- Strategic Planning: Assists the CEO in long-term strategic planning by focusing on the company’s mission, vision, values, and goals. Long-term and short-term planning are two different things. They also have the knowledge and connections to see their initiatives through.
- Operational development and management: This might be anything from enhancing and reshaping the company’s operational core to identifying opportunities and risks. Creating long-term viable systems and processes, such as standard operating procedures, organizational restructuring of back end and front end systems, policy and procedure creation, and introducing new technology when necessary are all a part of operational development.
- Organizational development and management: Assists in developing and leading a sustainable culture and environment that enables the company’s growth. Consider hiring, communication, team management, and leadership areas to address.
- Project management and planning: Overseeing company projects that have been determined through strategic planning. They ensure that the project is proceeding as planned, that stakeholders are all on the same page, and that the project is progressing as it should. The fractional COO may completely manage or simply oversee projects with project managers depending on the business’s size and the project.
- KPIs and metric reporting: Reports on and improves key indicators to ensure and evaluate efficiency within the company. Consider sales forecasting, website, and social media traffic, data, client retention, and other vital metrics.
When should a Business Hire a Fractional COO?
Most business owners or CEOs wear many hats. They are responsible for the growth and profitability of the company, managing people and teams, developing new products or services, and ensuring smooth operations. But there comes a time when a business reaches a certain level of success that it becomes difficult for one person to manage everything effectively. This is when a fractional COO can be extremely valuable.
This is precisely why fractional COOs exist – to provide an extra set of experienced hands-on-deck without the full-time commitment or cost. Fractional COOs can be brought in for as little as a few hours a week or month, and they can help with anything from developing growth strategies to streamlining processes to hiring and firing employees.
This is true with Rachel. Her business had grown from having one room to nine rooms and more massage therapists, followed by exponential growth to open another branch in a different location with eight rooms. She was excited to take on new challenges; however, she quickly realized that managing two spaces was more than she could handle. She was handling everything herself, from hiring staff to training staff to managing the books. She quickly realized she needed help and brought on a fractional COO to take on some of the operational tasks, freeing her up to focus on what she does best – expanding the business.
The following are some signs that a small business might require a fractional COO. If you can relate to any of these, it might be time to start looking for a Fractional COO for your business:
You’re spending more time managing than improving
When you’re spending all of your time ensuring everything is running efficiently, you’ll have less time to develop new methods for pushing your company forward. If you’re so busy keeping your company afloat that you don’t have time to think about where it’s going or how you can help it get there, consider hiring a COO. A Fractional COO can take charge of the day-to-day operations of your business, giving you more time to focus on the big picture.
You’re expanding rapidly
If your business is growing quickly, it can be challenging to keep up with the demand. A Fractional COO can help you manage this growth by developing systems and processes that can scale with your business. They can also help you manage your finances and human resources, so you can focus on other aspects of running your business.
You don’t have time to plan for the future
When you’re too busy putting out fires, it’s hard to find time to think about where you want your business to be in five years. A Fractional COO can help you develop a long-term plan for your business, so you can focus on the present without sacrificing your future.
Your CEO is overwhelmed
If your CEO is trying to do too many things, it can be difficult for them to focus on the most critical aspects of running your business. A Fractional COO can help take some of the pressure off by handling day-to-day operations, so your CEO can focus on more strategic tasks.
You want to strengthen your company’s leadership
If you want to build a strong leadership team, a Fractional COO can help you identify the most qualified candidates and develop a succession plan. They can also help you implement training and development programs to prepare your leaders for the future. For instance, how Rachel was assisted by her COO in implementing Homebase, a small business tool for managing employee scheduling, time tracking, and communication.
You need someone to execute ideas
If you have a lot of great ideas but don’t have the time or resources to execute them, a Fractional COO can help. They can develop and implement systems and processes to help you get the most out of your ideas.
The Good News
So what’s the good news? Fractional COOs can be an incredible asset to a business. They can provide much-needed structure and support, freeing the CEO to focus on strategic initiatives and long-term growth.
In addition, a Fractional COO can bring a fresh perspective to the table, providing outside insights and ideas that can help take your business to the next level.
If you’re feeling overwhelmed by the day-to-day operations of your business, or if you’re simply looking for ways to take your company to the next level, a Fractional COO may be just what you need.
Cognitive Bias: What it is and How to Overcome it
Cognitive bias is a term used in psychology to describe how our personal biases influence our thoughts, feelings, and behaviors. These biases can harm business when they lead us to make decisions based on inaccurate information or assumptions. From my podcast interview with Dr. Gleb Tsipursky, a cognitive neuroscientist and a behavioral economist, author of best-selling books, amongst them is Never Go With Your Gut and the founder and CEO of Disaster Avoidance Experts. I want to explore three cognitive biases in more depth and share some tips on overcoming them.
What is Cognitive Bias?
The idea of cognitive bias was formed in the 1970s by Amos Tversky and Daniel Kahneman, psychologists who studied why people have trouble reasoning and judging fairly in particular circumstances. Paul Slovic, a psychologist, collaborated with them on their early findings, which they published in “Judgment Under Uncertainty.”
Cognitive bias is a term used to describe certain mental mistakes caused by our limited capacity to analyze information objectively. It can result in illogical and baseless judgments and an inability to assess risks and threats.
The researchers explained that cognitive bias is the inclination to make judgments or take action illogically due to our attitudes, memory, socialization, and other personal traits. There are several biases that have an impact on a wide range of activities, including decision-making, evaluation, beliefs, and social interactions.
According to Dr. Gleb Tsipursky, cognitive biases are “mental errors humans make in processing information because of how our brains are wired. These lead to judgments that deviate from a rational and unbiased perspective.”
Cognitive biases can be subtle and hard to detect, which is why it’s essential to be aware of them. Here are some common cognitive biases that Dr. Gleb discussed:
3 Cognitive Biases Hurting Your Business
There are many different cognitive biases, but here are four of the most common ones that can hurt your business:
Planning Fallacy
The planning fallacy is a cognitive bias that leads people to underestimate the time, costs, and risks associated with future actions. Kahneman and Tversky first proposed the planning fallacy in 1979. They explained the phenomenon by suggesting that people focus on the most optimistic scenario for a task rather than using their experience of how long it actually takes.
The planning fallacy occurs regardless of our experience with similar tasks in the past. Even though we know the task has always taken longer to complete, we still underestimate the time it will take in the future. This bias can lead to problems because it can cause people to Undertake projects without realistic expectations about the time and resources required.
As a result, the project is more likely to be delayed, over budget, and less effective than initially predicted. The planning fallacy is a common source of error in personal and organizational decision-making, and it’s important to be aware of it to avoid its effects.
This is evident in Dr. Gleb’s example of an entrepreneurial company that opened to address the issue of the planning fallacy. They were making overly optimistic estimates on how much something would cost when bidding for a heavy manufacturing project. This often led to underbidding by millions forcing them to make fewer profits than anticipated. The reason why this happened is that they didn’t take into account their previous experiences with similar projects. In other words, they didn’t have a reference point to go off of and cognitively biased themselves.
One way to overcome the planning fallacy is by using reference class forecasting. This is a method of estimating the probability of future events by looking at similar events in the past. Using this method, we can avoid cognitive biases and make more accurate predictions.
Sunken Cost Fallacy
The sunken cost fallacy is a cognitive bias that dictates our decision-making. It tells us that we should continue investing in something as long as we have already invested so much, regardless of whether or not it is actually worth our time or money. This bias can lead us to make suboptimal decisions in our personal and professional lives.
For example, we may stay in a dead-end job because we have already put so much time into it, or we may continue investing in a failing business because we can’t bear to see our initial investment go to waste.
The sunken cost fallacy dictates that the more we have invested in something, the more reluctant we are to give it up. However, sometimes the best course of action is to cut our losses and move on. By acknowledging the sunken cost fallacy, we can be more mindful of its influence on our decision-making and avoid making choices that are not in our best interests.
Optimism Bias
The Optimism Bias is the cognitive bias that causes people to believe that they are more likely to experience positive events and less likely to experience negative events. The optimism bias is often seen as a positive thing, as it can help people remain hopeful under challenging situations and persist in the face of setbacks. However, the optimism bias can also lead people to make irrational decisions, as they underestimate the likelihood of negative outcomes.
For example, Dr. Gleb shares about a tech startup founder who was to get coaching from him once his company’s equity reached $10 million. However, during the SWOT analysis that Dr. Gleb conducted, the entrepreneur failed to list delegating tasks effectively as an area of weakness. Though it was clear that this was a point of concern for many investors, he was very defensive when confronted with the issue. It wasn’t until Dr. Gleb showed him how his optimism bias was harming his company that he was able to let go of control and allow other people to do their jobs. Without this guidance, many entrepreneurs make the same mistake, and their businesses suffer as a result.
Overcoming Cognitive Biases
Cognitive bias is a powerful force that can majorly impact your business. This type of bias occurs when our brains make judgments and decisions based on emotions or past experiences rather than logic or reason.
To overcome these biases and make more informed decisions, it’s essential to be aware of them and understand how they work. We’ve outlined three cognitive biases that are particularly harmful to businesses and provided tips for overcoming them. Are you ready to start making better decisions for your company?
5 Steps for Setting Up Your Fractional Services Business
Congratulations! You’re launching a fractional services business. Providing fractional services benefits both you — allowing you to live your ideal life — and those entrepreneurs seeking your knowledge and expertise to take their business to the next level.
Step 1 – Ideate Your Fractional Business Plan
Step one in setting up your fractional practice is defining who you are, what unique services you offer, and whom you will provide services. In addition, deciding how you provide value and for what cost is key. Whether you use an operating system such as Entrepreneurial Operating System (EOS®) where the V/TO is foundational, or you develop a business plan outlining your strategy and goals, the creation of your business plan comes first. Include any personal or professional partners in the discussions for support.
STOP HERE — IMPORTANT!!! As you launch, be certain you have undertaken the necessary steps to understand the financial impact building a new practice can bring. Having stable savings from which to draw the first year is essential. The time and efforts of relying on clients to pay invoices on time and develop, send, and follow up on those invoices should not be underestimated. Ok, now you can keep reading…
Step 2 – Develop Measurable Goals
Layered on the business structure should be specific and measurable goals, both professional and personal. What does the life you want to live look like? How will you make that ideal life a reality? Where do you bring value to your clients? What are your passions, and how do you translate those passions to make a difference? With what types of people do you work best? Who then is your ideal client? These are all questions to consider — among others.
Step 3 – Setup Your Business Name
Once your fractional services business is defined, select a name. Carefully choose a unique moniker that allows others to identify the nature of your business easily. Then register the name and chosen structure (LLC, S-Corp, etc.) in your local jurisdiction, partnering with appropriate legal and financial entities to ensure proper adherence to rules and regulations.
Step 4 – Determine Your Fractional Services
Identify your service offerings based on your ideal client needs, layered with the value you can provide. When it comes to pricing, remember that we always tend to under-value our worth. It is always a good idea to run your pricing structure by a mentor or valued partner (preferably someone in a similar type of business).
Step 5 – Get Out There and Network
You’ve likely been networking throughout creating and building the business. Perhaps you even have your first client — or three — set to sign with you as soon as you’re ready! Open, honest, and authentic conversations with your network and potential clients will return to you in spades. Be clear about who you are, what you offer, and the value you provide. At the same time, know when to say “no.” By staying true to your personal and professional core values, the benefit you bring is that much stronger.
With a good business plan in place, your ideal personal life outlined, your value proposition, pricing, and business name defined, you’re ready to work with clients. Be realistic about the time required both ON the business and IN the business.
Your calendar is your best friend. Schedule days/time for business development, work with clients, and administrative duties. Then seek out organizations where your ideal clients are tuned in. Participate, give back, and use those resources to stay in front of those perfect clients. You can also join the Fractional Leadership Network.
Peer groups and valued partners can be important referral sources for the delegation of business areas that do not play to your strengths or when additional help is needed. Delegation in your personal and professional life is the key to getting the things you should not be doing off your plate and giving you the time to focus on your Unique Abilities. One example: I have not cleaned my house in seven-plus years. I hate cleaning; it’s a distraction for me. Seeing dog hair in the corner doesn’t bother me, knowing Cindy will be here in a few days to clean. I am also supporting Cindy and her small business — a total win/win!! Remember: just because you CAN, doesn’t mean you SHOULD.
Now, Reap the Rewards
Fractional work is a balancing act. The rewards can be huge! Patience, persistence and understanding you are running a marathon — not a sprint — are all necessary. Congratulations on building your fractional practice! Now get out there and offer your expertise to the world with confidence!
About the Author
Jamie Munoz is the founder and visionary of a team of Fractional Integrators at Catalyst Integrators, helping busy visionaries and entrepreneurs maximize their potential by running companies on EOS. Jamie is also a certified John Maxwell Team coach, speaker and trainer. Contact Jamie here.
Sign a Fractional Executive and Score a Superstar Free Agent
“We are tired of being the Detroit Lions!”
That’s what a former boss said to me when I joined his company as the operations leader. He was the CEO, and he was struggling to lead his organization out of what he called the “doldrums.”
He could not improve delivery to his customers or find the right people and in general and felt the company was in a funk. He was at a loss of what to do. When he hired me and asked me to get the company to where it would be at least “middle of the road,” he called me his Superstar Free Agent signing for his team!
My former boss’s situation is not unfamiliar to many small business owners. I hear similar laments today when I engage with clients to discuss their issues, such as “I can’t afford to hire somebody full-time” or “I just don’t like getting involved in that stuff.”
Let’s face it; many business owners may not be cut out to deal with the day-to-day operations of running their business. Reality check time! It takes a certain mindset to enjoy the nuts and bolts of running a business, especially when working with people to maximize their talent. I happen to love it.
Part-Time Fractional Executives Can Be That Superstar
I’ve had conversations with small business owners who were perplexed on how to improve the performance of their business and struggled to find a solution. In many instances, they need help from a different level of talent than what they can afford. In fact, one business friend told me that he needed somebody like me but that he didn’t think he could afford that level of experience. Plus, he felt that I would become bored because the company was so small compared to what I was used to.
He was right — but only if he had hired me as a full-time COO. I countered, “But what if you bring me in as a part-time or ‘Fractional’ Executive?”
After a two-hour talk about how a Fractional Executive works and what they would do in his business, he agreed and asked me to find him a “superstar.” So, what happens when you sign a Superstar Free Agent on a part-time basis for your business?
One of my clients who brought me in as a Fractional COO said it best: “You can focus on multiple issues at once, and I can’t.”
What he meant was that he was good at sales and marketing but not so much at operations. And in operations, there are always multiple balls in the air that need to be juggled to ensure success. As a COO, I have experience doing just that. When I have my weekly update with this client, and I recount the issues I am dealing with, he laughs and says, “Glad you have to deal with that now and not me.”
He is right; he truly appreciates what I do and that he doesn’t have to handle that part of the business. Business owners should not have to take on that part of a business if they rather not or don’t have the time. Hiring a Fractional Executive from the Fractional Leadership network allows business owners to do what they do best, all while bringing balance back into their lives and growing the business.
With the help of a perfectly matched Fractional Executive Superstar, you and your team can be the “Patriots” of your market!
About the Author
David Baughman, the president of Fractional Executive Solutions, LLC, is a career operations professional who now serves clients as a Fractional COO and Integrator for companies operating on the Entrepreneurial Operating System® (EOS). To learn more about FES, contact David at dbaughman@fractionalexecutivesolutions.com.