Let’s stop calling creative and innovative businesses “small”.

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The government and business media and sideline observers want to call your business small. That categorization applies to more than 99% of business firms in the USA. So someone’s missing something about the nature of the business economy. Small business makes the biggest contribution.

The error lies in misunderstanding systems thinking. The reason why people start and nurture small businesses is that they have an imagined idea for a new and better future – a better product, a better service, a better membership club, a better environment for office workers, whatever it may be – and they work with other people to try to bring it about. The other people they work with may be customers, partners, supply chain elements or employees; the business owner figures out the best network. The network and the connections and the information flows are never small. Today, thanks to the internet and collaboration software and communications, the network is the whole world. Any so-called small business can link to and orchestrate the world’s resources, the world’s designers, and the world’s imagination to bring value to its customers. What’s small about that?

Cynthia Kaye is one small business owner and consultant who fully recognizes the implications of thinking about the scale of the network rather than the scale of one node. First, it requires big thinking. What is the best way to harness the global resources to which business has access? What is the best service for customers? What’s the best way to provide service to customers?

For example, in her own business of video production, she has defined many ways in which her company can be the best. For example, being the best at getting the most out of the client’s budget. That’s a compelling value proposition and a genuinely unique claim. To deliver requires knowledge, experience, imagination, creativity, relationships, control, and meticulous attention to detail – all of which can be combined in an unsurpassed combination recognized by clients as superior. 

Economic growth and value creation come from using imagination and experience to create new knowledge: a surprise, a revelation, an exceeding of expectations. Imagination is not a product of scale but of creativity. 

Cynthia translates this big thinking into big opportunity. Often, this comes from growing with a client. That growth can begin parallel with a small customer – growing together through co-creation and collaboration. It can also come from small business supplier serving big business so well that more and more revenue is directed their way. The resultant shared growth benefits both parties. Is that big or small? It’s actually unrestrained, unlimited, unbounded. 

From this collaborative networked co-creation process comes big success. We know from Hermann Simon’s database of Hidden Champions that so-called small business can outperform big business in many ways, including higher revenue per employee, higher profit margins, greater employee retention, longer and stronger customer relationships, and more innovation and investment in R&D and new projects and capital equipment. Hidden Champions is a better descriptive term than small business. 

Small business shouldn’t be hidden or ignored – it should be celebrated, lauded, cheered on and loved. Small business is the economic system that generates the prosperity we all enjoy. 

The Value Creators Podcast Episode #22 Cynthia Kay on Small Business, Big Success

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We live in a video age, which opens up a vast array of entrepreneurial pathways. Video is a field for open-ended free creative expression, as well as for tightly managed business tools built for ROI. It’s the ideal field for creative entrepreneurial small business innovators. Cynthia Kay of CK and CO is both a business founder and CEO of a video production business, and a consultant and advisor to small businesses. She shared some of her insights and a preview of her 2024 book Small Business Big Success. 

Resources: 

CK’s business resources site: https://cynthiakaybiz.com/

Books you can buy now: https://cynthiakaybiz.com/books/

Cynthia Kay’s upcoming 2024 Book – Small Business, Big Success:
https://www.amazon.com/gp/aw/d/B0CFWFZQTS/ref=tmm_kin_swatch_0?ie=UTF8&qid=1700618573&sr=8-3

Knowledge Capsule:

Value Proposition:

  • Like any other entrepreneurial business, a video production business needs a compelling value proposition.
  • A value proposition is always about meeting customer needs – what need are they filling by paying for video production?
  • No matter how creative, video production must offer a customer value that exceeds perceived costs. It must make customers feel proud and fulfilled, and give them a sense of standing out from the crowd.
  • This often includes educating them on how to use a supplier’s services, e.g. the many different benefits and values available from one video shoot.

Operational Excellence:

  • High creativity does not in any way reduce the need for a video production business – or any small businesses –  to prioritise operational excellence.
  • Customer expectations of excellence are high, no matter the size of the supplier they choose.
  • CK advocates the use of top notch systems, procedures, and automation to enhance overall efficiency. Build the back room to be as strong and dependable as possible. Every business can deploy the best systems.
  • Owners must be in the operational trenches.

Return on Investment (ROI) Challenges:

  • Calculating  ROI in creative fields is a challenge – but must be done as part of the customer value proposition.
  • There’s such a thing as subjective calculation – e.g. recognizing the role of anecdotal evidence in demonstrating the value of creative services.
  • Focus ROI on the things that matter for customers.

Being the Best in Business:

  • Whatever business you are in, set out to be the best.
  • Making – and living up to – such a claim can be based on multifaceted performance.
  • Consider factors such as understanding client needs, building strong relationships, and optimising the utilisation of budgetary resources.
  • One of CK’s propositions is to be the best at getting the most of a client’s budget, whatever size it is. That’s an excellent “best” claim.

Small Business Success Strategies:

  • Pick your customers carefully – pick those who will love you and those you can grow with.
  • Commit to building relationships over time.
  • Build great teams that are right for the client, and turn them loose.

Supporting Small Businesses:

  • Cynthia Kay not only runs a small business,she plays a big role in helping others and in supporting small businesses in general.
  • She’s actively involved in associations and support groups, and urges other small businesses to do the same.
  • She gives her time to the facilitation of roundtable discussions, and offering advice on common challenges faced by small businesses, including scaling and team development. These kinds of discussions can yield enormous value for participants just by sharing experiences.
  • It’s good for small businesses to support other small businesses and build the business backbone of the neighbourhood, the town, the city, the state and the nation.

The Value Creators Podcast Episode #21. Forging New Relationships Between Entrepreneurs and Capital with LaSean Smith

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LaSean Smith outlines a business investment partnership built on permanent capital, emphasizing long-term commitment and trust-building between an investor/source of capital and a business. The discussion covers disciplined methodologies, leadership transitions, and a unique compensation approach using Phantom Stock Shares. LaSean predicts a rise in smaller, values-based companies, and underscores the significance of audience and automation in acquiring and revitalizing brands. 

There can be a shift towards stable, smaller businesses connected to communities, challenging the trend of dominance by larger and larger corporations.


Resources:
CAGR Investments: https://cagr.com/

Knowledge Capsule:

Permanent Capital Strategy:

  • There’s an investment strategy and a business strategy based permanent capital. It’s not widely used but has broad potential. It emphasizes the importance of long-term commitment by both the investor and the business. Short-term operational demands are entirely left to the business CEO.
  • LaSean Smith explains the advantages of having an investment structure that accommodates a longed shared journey, building a high degree of trust and confidence.

Operational Approach:

  • LaSean highlights a disciplined methodology to tighten business processes and leverage content-based marketing to assist companies. 
  • Small and mid-sized businesses often miss the great efficiencies available by automating processes. And they waste resources on direct sales and inappropriate marketing tactics.

Leadership Transition:

  • Permanent capital is a long-term investment; it works when there is a corresponding long-term commitment of current operators.
  • Some CEOs may want to avoid continuing in the business, especially in cases where technical founders find themselves dealing with aspects like sales and marketing, which they may not enjoy. Relieving them of that burden may extend their tenure.

Phantom Stock Shares:

  • Permanent capital embraces a unique approach to leadership compensation using Phantom Stock Shares – aligning incentives by granting bonus or dividend shares that compound in value until the leader leaves the company. This helps in providing a simple ownership structure and shared incentives without diluting ownership equity for the investor.

Cash Flow and Value Creation:

  • The conversation delves into the concept of cash flow and value creation, discussing how businesses can fade over time if not innovating. Lasean emphasizes the importance of adding technology and content marketing layers to ensure longevity.

Audience and Automation:

  • The concept of audience and automation is highlighted as a critical factor in the success of businesses, especially those acquiring old brands. Engaging content marketing towards a target audience allows for driving brands through existing supply chains, reducing customer acquisition costs.

The hybrid workplace is an excellent example of emergence in a complex evolving system.

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Management thinking about business and how work gets done to generate value for customers requires radical revision. Happily, the understanding of complex evolving systems is improving, at least to the point that we can recognize and embrace the consequences of emergence – that property of evolving systems that results in new phenomena and new traits and new patterns that could never have been predicted based on our prior knowledge. We can’t predict future developments of our own systems. We can only observe emergent developments as they occur.

One example of an emergent pattern that no-one predicted is the hybrid workplace. This is the new condition of the office or factory in which the elements of where we do work and how we do work and how we synchronize work with each other have changed beyond recognition. Some people might be in physical proximity in a meeting or gathering, while others are remotely connected through technology from another physical location, and the tools and devices and machines and data we use are in yet another physical place and another digital dimension. Everything is in motion and the relationships between them are fluid.

How can the hybrid workplace be managed for value generation and productivity? Yesterday’s management techniques of hierarchical control no longer fit very well. Two of the best experts to address the challenges of the hybrid workplace are Julie Kantor and Felice Ekelman, authors of the book Thrive With A Hybrid Workplace. Here’s what they say.

First, focus on culture. Culture is a value proposition for employees. Some bosses have claimed that corporate culture can not survive the hybrid workplace without an office or factory where people spend extended periods of time together on a regular basis. But culture stems from intentionality – what kind of a culture do you intend to nurture? Culture is a function of the things that matter to employees, which can include learning and progressing, empowerment, shared vision, connection, collaboration and trust. These are all subjectively evaluated, and it is entirely possible to shape the appropriate value proposition when the right intent is employed and declared. Whether work is hybrid or 100% in-person and on-premise does not have to be the governing variable. Empathy – understanding the things that matter to individual employees – is the binding force.

Second, embrace change. Evolutionary biology suggests that humans prefer predictability and stability to change. But in the emergent upheaval that brought us the hybrid workplace, change came to the forefront. Changes in work habits and practices, changes in relationships and collaboration possibilities, changes in the very nature of work. Part of the new value proposition for employees is that we all are swimming in the river of change together, and we should all be open to the excitement and energy of the experience.

Third, redefine connection. In complex evolving systems, it is the connection and interaction between individuals that opens up new pathways to productivity and value generation. Julie Kantor calls this connection interpersonal glue. If there’s no glue, teams find it harder to work through challenges and conflicts. Julie urges us to find new ways of networking, new forms of “dropping by”, and new forms of mentoring, and new ways of connecting in general.

Communicating and collaboration  take new forms as well, when the medium of connection changes. We should be newly sensitive to the subjective interpretation of our communications when they come in new formats (e.g. e-mail and text compared to in-person). “How can I help” becomes the new expression of connection – making communication inbound and not just outbound, and declaring the intent to collaborate. 

Be a coach rather than a manager. Coaching is a commitment to help individuals evolve as the ecosystem changes. Coaching involves observation and active listening rather than giving instructions. Coaching provides resources, but doesn’t specify how to use the resources. Coaching facilitates but does not prescribe. Every individual should receive coaching.

With new mindsets, the hybrid workplace can be even more productive than its more restrictive predecessor workplace. Responsiveness to the real things that matter to employees can be tuned to any kind of workplace, including one that changes all the time.

The Value Creators Podcast Episode #20. Julie Kantor and Felice Ekelman on How To Thrive With A Hybrid Workplace

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The nature of work has changed, so how we manage it must change, too.

As businesses barrel along into the fast-changing digital age, we find that the very nature of work has changed. The new name for the office or the factory is the hybrid workplace. Not only where we do work, but how we do work has changed, and how we synchronize work with each other has changed the most. For the firm, productivity is at risk. And all the standard approaches to business that we’ve been taught are outdated. Take management as an example. How do you manage a hybrid workplace and workforce. Our point of view at The Value Creators is that management is an old-fashioned concept we have to discard. We need something new. 

The Value Creators podcast hosted two of the best experts to address the challenges of the hybrid workplace, Julie Kantor and Felice Ekelman. They are co-authors of the book that will provide the background to our discussion today: Thrive With A Hybrid Workplace: Step-by-Step Guidance from the Experts.

Personal Websites:

Shownotes:

0:00 | Intro

03:06 | Old System VS New System: Work-life Balance & Remote Work During the Pandemic

09:55 | Hybrid Work and Leadership in a Post-Pandemic World

14:02 | Hybrid Model: Nine to Five Model is Gone

16:42 | Hybrid Workplace: Seven Seas Framework

22:53 | Hybrid Policy: How Are We Managing Change?

24:50 | Culture of change: Importance of Face-to-Face Connection

28:07 | Communication, Collaboration, and Leadership in a Hybrid Work Environment

34:46 | Coaching as a Fundamental Part of the Hybrid

37:27 | Smart Goals: Well-Being in the Workplace

38:48 | Productivity in the Hybrid Workspace

41:34 | Hybrid Workspace: Compliance Load

46:12| Wrap up: Where are we heading?


Knowledge Capsule:

We need to re-think the idea of productivity in the world of Hybrid Work:

  • Leaders are struggling to measure the productivity of knowledge workers in a hybrid setting, as traditional metrics like presence in the office are no longer applicable.
  • Early data emphasizes the risk of lost productivity – performance is lowered.
  • There’s a big need for leaders to clearly communicate what excellence in performance looks like in a hybrid work environment is emphasized.
  • But driving hybrid work performance faces compliance challenges:
    • In a hybrid workplace, compliance issues may arise, particularly if employees are working from different states. Local laws may apply, leading to complexities in compliance.
    • Issues related to measuring hours worked, especially for non-exempt employees, pose challenges in maintaining accurate time records.
    • Issues of perceived equity can easily arise.
  • Therefore clear expressions of intent are imperative:
    • The complexity of managing compliance and policies in a hybrid work environment requires intentionality and thought from employers.
    • Inconsistencies in enforcing hybrid work policies can lead to litigation and allegations of discrimination.
  • Hybrid work leads to a new Future of Work:
    • Not just the way we work will change, but there’ll be changes in business models, such as the Chinese business model, RenDenHeyi, which emphasizes decentralized value creation through relationships and connections more than reporting relationships and structure..
    • The integration of work, home, and personal life is expected to continue. Management must include a focus on mental health and well-being.
    • Technology will change the nature of the hybrid workplace even faster, with advancements like mirror boards for synchronous collaboration.
  • Employers should look at hybrid work as a great opportunity to create new value for employees:
    • The shift to a hybrid work model presents a significant opportunity for employers to differentiate themselves and demonstrate flexibility and trust to employees.
    • Employers who successfully navigate the challenges of hybrid work have the potential to be seen as best in class.
  • Thrive in a Hybrid Workplace:
    • The book, “Thrive with a Hybrid Workplace,” focuses on the concept of thriving in the context of a hybrid work environment.
    • The emphasis is on how employers can create a workplace where both employees and the business thrive.
  • Looking to the Future:
    • Predicting the exact future of work is challenging, but the integration of flexibility, trust, and well-being will continue evolving towards more employee value.
    • Employers have the opportunity to create a workplace that fosters trust, flexibility, and ultimately, thriving.

The Value Creators Podcast Episode #19. Trini Amador on The Theory of Talkability

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Trini Amador is the Value Creators’ go-to guru for all things marketing. He has a long career as CEO of a global branding consultancy, BHC Consulting, and he is also the founder and proprietor of Gracianna, an estate winery that has established a portfolio of greatly acclaimed, gold medal winning prestige wines from its home in the heart of Sonoma County wine country, on the banks of the Russian River.

Trini joined the Value Creators podcast to discuss his latest thinking distilled from his extensive brand-building experience: his theory of talkability.

Show Notes:

0:00 | Intro

03:17 | Understanding Talk Ability Theory: Basics, Floaters and Swimmers

07:20 | Three Areas of Talk Ability Theory

09:06 | Is Managing Expectations and Feelings a Brand’s Duty?

11:11 | How digital marketing is typically described and the Traditional Funnel Approach

16:45 | Modern Marketing Innovation: Returns Policies and Proactive Issue Resolution

20:54 | Roger Martin’s habit-driven brand strategy is outdated

22:39 | Concept Trini of Expectations

24:41 | Fundamental Elements of the Brand Blueprint and Speed Change

27:56 | Optimizing Social Media for Brand Talkability

28:50 | Heineken Double Zero Strategy

31:24 | Importance of Valuable Feedback in Business 

33:18 | Trini’s Business Insights and Lessons Learned 

38:46| Wrap up: Find Trini Amador and His Team at Gracianna.com

Knowledge capsule

  • Talkability is brand management for a new age:
    • Trini emphasizes that talkability is not a new concept but an essential aspect of branding today. Talkability centres on how customers perceive and discuss a brand, influenced by their expectations and experiences.
    • In brand marketing, two key drivers remain unchanged: relevance (Is this for me?) and differentiation (How is this different from what I know?). Talkability highlights the importance of differentiated experiences.
  • Consistent With The Brand Blueprint:
  • Factors for Managing Talkability:
    • There are three key factors for managing talkability: maintaining relevance and differentiation, gaining insights into customer needs, and managing brand consistency over time (“consistently managing consistency”)..
    • Stay close to customer behaviour and keep up with changing consumer needs.
  • Managing Anticipated Experiences:
    • The conversation delves into managing anticipated experiences. Trini explains that anticipation comes from both reviews and word-of-mouth referrals. 
    • Meeting or exceeding these expectations is an ongoing challenge for brands.
  • Changing the Talkability of a Product:
    • One case study mentioned in the podcast  is Heineken Double Zero, a non-alcoholic beer, packaged similarly to their regular beer. It’s an example of managing talkability: by wrapping a disruptive innovation in conventional packaging, the brand manages how users talk about it.
    • The beer’s packaging caters to the anticipated experience some customers expect, addressing their need to “fit in” with beer-drinking friends.
  • Practical Application in the Wine Industry:
    • Trini, who owns Graciana Wines, discusses the brand’s approach to talkability, emphasising the importance of feedback, reviews, sentiment scores, engagement, and referrals in tracking brand success.
    • Brands are in the experience business, emphasising the emotional and differentiated aspects of customer experiences.That’s what customers talk about.