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The Value Creators Podcast Episode #33 Mike DeKock on Building Competitive Advantage

How do the value creation principles of subjective value, entrepreneurship and creativity apply in a highly technical rules-based environment like SOC Compliance audits. These are objective validations of data security measures based on customer-defined criteria similar to traditional financial audits but more specific and subjective.

The answer lies in the understanding of customer needs. Mike DeKock, CEO of MJD Advisors, an SOC auditing firm, has the insight: the customer seeks confidence – a feeling that they can approach their own clients with the assurance of providing the data security that they demand. Trust, reliability and commitment are the underlying values – emerging from technological rigor, at a much higher level of human need.

Mike discusses the evolution of compliance services and the changing landscape within the industry, and explains the importance of continuous compliance and how his company aims to provide ongoing support and guidance to clients throughout the year, for continuing reinforcement of the client’s feeling of confidence.

He recognizes the value of building relationships with clients, helping them navigate compliance challenges, and fostering organizational improvement. He sees value in creativity, curiosity and collaboration, and the need for continuous learning and adaptability in a rapidly changing industry. At MJD Advisors, there is a passion for helping clients find simple solutions to complex problems, emphasizing the satisfaction derived from making a meaningful difference in their businesses.

Resources: 

MJD Advisors: mjd.cpa
Mike DeKock on LinkedIn: https://www.linkedin.com/in/mike-dekock-7325a654/

Shownotes:


0:00 | Intro
02:13 | SOC Compliance: Mike Shares His Business Field Growth Journey
03:21 | Regulatory Audit Requirement is Optional
05:09 | Client’s Confidence is Subjective Essence
07:51 | Value Proposition
10:08 | Confidence Area: Empathy-Driven Insight into Client Needs
12:09 | Confidence Meter: How to Measure it? 
13:49 | Trust Measurement
15:16 | Data Security
18:05 | Business Model: Client-Centric Excellence 
20:01 | Trust and Confidence: Some Companies View Audits as Mere Costs
22:08 | MJD Advisors: Exceeding Client’s Expectations 
23:07 | Hiring: Interesting People VS Hard Stats
25:27 | Helping Clients Find Simple Solutions to Complex Problems
27:32 | Future Unpredictability Adds Complexity
29:20 | Entrepreneurial Ethic
30:40 | Wrap-Up

Knowledge Capsulse:

Importance and Application of SOC Compliance:

  • SOC Compliance is a customer-driven business: the regulatory audit requirement is optional but often required by larger enterprises during due diligence processes both internally and on suppliers.
  • SOC Compliance is commonly used by small growing startup software companies to meet enterprise needs – required to cross an eligibility threshold.
  • The field of SOC Compliance is constantly changing as a result of increased awareness and education about data security.

Focus on Providing Confidence to Clients:

  • Mike emphasizes that the continuous compliance approach helps clients navigate compliance challenges.
  • Building trust and relationships through understanding and solving client needs.
  • Any company in a supplier relationship can act with confidence in communicating the robustness of their own systems.

Measuring Success and Impact:

  • There are challenges in quantifying subjective values like confidence and trust.
  • Success is measured through client feedback, reviews, and business outcomes.

Impact on Client Image and Credibility:

  • Compliance reports serve as a mark of approval and credibility.
  • Mike DeKock shares that firms can build credibility and reputation through compliance efforts.

Tremendous Growth in Compliance Space:

  • Compliance tools and support for initiatives have become more accessible and affordable. Previously, smaller companies couldn’t afford compliance measures, but now it’s more feasible.
  • Raises expectations and sets accountability throughout organizations, providing various benefits to the ecosystem.

Business Model Approach:

  • The approach focuses on becoming an extension of the client’s compliance team.
  • Embraces a continuous compliance approach throughout the year, providing guidance and assistance

Complex Problems Simplified:

  • Mike shares how his company celebrates the beauty of simplicity in solving complex problems and how they help clients find simple solutions to complex problems.
  • At MJD Advisors, a collaborative approach is used, focusing on asking probing questions and learning from clients.
  • Compliance is a shared process.

The Value Creators Podcast Episode #14. Josefine Campbell on The Personal Energy Of Agile

Agile is the most important and most impactful management innovation of the 21st Century. It’s the approach of stripping away all bureaucratic and processual obstacles to fast delivery of superior customer experiences. Agile emerged from the sneakers-and-jeans world of software development and overwhelmed and obviated the suit-and-tie world of management control and hierarchy. It’s an organizational breakthrough that opened up a whole new realm of productivity. 
The principles of agility can apply at the individual level as well as the organizational level. Our guest Josefine Campbell delivers agility as an act of self-awareness and self-management.

Find her book, Power Barometer, here, and benefit from the major points she shared with us on The Value Creators Podcast Episode 14.

Resources: 

Power Barometer: Manage Personal Energy For Business Success.

Knowledge Capsule:

Practice Personal Energy Management:

  • At the fundamental level, spend some time learning about the role of the amygdala in the brain’s fight-flight-freeze response.
  • This response impacts both behavior and bodily functions.
  • Raising your awareness helps control reactions and behaviors.

Action: Be aware of your personal energy level and actively manage it.

Use The Power Barometer:

  • The “power barometer” is a tool for quantifying personal energy levels.
  • Use it both individually and within teams.
  • Experience the benefits of monitoring energy levels, such as improved meeting efficiency and better team dynamics.

Action: Every act of management can be improved by using tools. Find one that works for you.

Identify Your Own Top Values:

  • There’s great significance in identifying and living in alignment with top values.
  • Select two or three core values for personal and professional life.
  • Living by these values can prevent energy drain and contribute to well-being and success.

Action: Know your own values and apply them in everything you do.

Live Forward and Reflect:

  • Life is lived forward, and understood better in hindsight.
  • Challenging experiences lead to valuable lessons and personal growth.
  • Reflection and learning from past experiences guides personal development.

Action: Entrepreneurship is action. Learning comes via feedback loops.

Navigate Change:

  • Acknowledge people’s resistance to change, especially when it requires substantial energy.
  • Manage change in a way that individuals can absorb it.
  • Infuse change initiatives with energy to facilitate smoother transitions.

Action: Continuous change is necessary, but often hard on people who prefer stability. Help them to feel comfortable, without loss of commitment.

Build Organizational Culture:

  • It is absolutely possible to build an organizational culture that embraces energy management.
  • Josefine’s book presents an extensive case study illustrating successful integration of energy management into the culture.
  • Focus on those who embrace the change to create a positive movement within the organization.

Action: Culture is emergent from people and their interactions, but it can be guided with positive energy.

The Value Creators Podcast: Episode #13. Ben Johnson On The Evolution of Software Entrepreneurship

It is evident that in today’s economy, AI & software are extremely powerful tools in business, creative pursuits, and innovation. 
 
In this episode, Ben Johnson, co-founder of Particle41 and other successful software companies, joins to discuss the integration of AI from enhancing customer support to aiding software development, the ethical considerations of AI usage, and its simulation of empathy.

Resources:

Particle41.com

Ben Johnson on LinkedIn

Knowledge Capsule:

Agile and Lean Methodologies in Software Development:

  • The adoption of agile and lean methodologies in software development has enabled faster and more efficient processes.
  • These methodologies involve iterative development, user feedback, and continuous improvement to align with market demands.
  • Continuous adaptation and flexibility are crucial components, as they allow software to evolve according to user needs.

Action: Observe software development in action, and ask how you can transfer its methods to other parts of management.

Challenges and Rewards of Continuous Improvement:

  • Embracing continuous improvement in software development requires a thick skin, humility, and openness to user feedback.
  • While it can be intimidating and unstable, the process focuses on efficiently achieving business goals rather than merely creating perfect products.
  • Businesses must be prepared to adapt and evolve software as long as it remains relevant to users’ needs.

Action: Make continuous improvement a commitment in all parts of business management. Set challenging goals and don’t be deterred.

DevOps and AI Integration:

  • DevOps involves platform engineering and continuous integration/deployment, streamlining software development and deployment processes.
  • Infrastructure as code and robust assembly line processes are key components of DevOps.
  • AI, especially natural language processing, is being integrated into customer support and development workflows to enhance efficiency and provide novel solutions.

Action: Make use of DevOps experts like Particle41 for robust provision of digital operations.

Ethical Considerations of AI:

  • Businesses must establish policies around AI usage, especially when sensitive or private information is involved.
  • Integrating AI tools requires a thorough understanding of how they work to ensure quality control and ethical use.
  • The use of AI for customer interactions and support should be accompanied by clear communication and expectations.

Action: A.I. is coming. Develop policies in advance.

Empathy and AI:

  • While AI can simulate empathy through language patterns, it’s essential to understand that AI’s responses are correlated patterns rather than genuine emotions.
  • AI’s capacity for simulating empathy and emotions is a tool, not an end in itself, and users should be educated on its limitations.

Action: Entrepreneurship is subjective, empathic, human-to-human. Use A.I. to help, but not for human-to-human understanding.

Innovation and Economic Changes:

  • The current shift in venture capital dynamics could impact innovation and startup culture.
  • Smaller companies might need to adopt cash flow-based models similar to historical entrepreneurship, favoring incremental growth and learning.
  • Larger corporations could potentially support smaller startups to foster innovation, possibly through divisional startups or collaborations.

Action: The VC funding world often chases fashions and fads. You may have to spread your net wider for funding if you are not part of the current fad.

The Value Creators Podcast: Episode #12. Mark McGrath On Adaptive Entrepreneurial Management

Mark McGrath of AGLX has developed a management approach he calls The Adaptive Entrepreneurial Method. He combines the insights of John Boyd and the entrepreneurial principles of Austrian economics. 

Boyd was a prolific writer on strategy, particularly famous for his development of the OODA Loop model of decision-making under uncertainty, feedback, and responsive re-orientation, as well as the author of a vast body of work on strategy. 

Austrian economics overlaps in the area of entrepreneurial judgment, which is purposeful action under uncertainty, and dynamic responsiveness to the resultant marketplace signals (ie. feedback loops) that action generates.

He joined The Value Creators podcast to explore the intersection of John Boyd and Austrian economics.

Resources: 

AGLX

Mark’s podcast: No Way Out

Mark’s Substack: The Whirl Of Reorientation

Knowledge Capsule:

1. Austrian entrepreneurship is a Human-Centered Approach:

  • Boyd’s theories emphasize prioritizing people in decision-making.
  • Human-centered approach over technology-centric focus.
  • Recognizing the role of consumers, employees, and stakeholders.

John Boyd’s insights underscore the significance of placing human understanding and interaction at the heart of decision-making processes. Rather than fixating on technological advancements, his theories advocate for acknowledging the central role of people within any system. This approach emphasizes the vital connections between consumers, employees, stakeholders, and their collective impact on the overall success of an endeavor. The equivalent space in Austrian economics is subjective value.

Action: Always place human values at the center of all business strategizing and decision-making.

2. Continuous Learning and Adaptation:

  • Adaptation and flexibility in ever-changing environments.
  • Shaping strategies based on evolving circumstances.
  • Emphasis on continuous learning to respond to changes.

A core tenet of John Boyd’s philosophy is the value of perpetual learning and adaptability within dynamic environments. His approach encourages a constant re-evaluation and adjustment of strategies in response to evolving circumstances. Instead of adhering to rigid plans, Boyd’s philosophy advocates for organizations to actively engage in continuous learning, enabling them to proactively address shifts and remain relevant. This is perfectly consistent with Austrian principles of continuous change and dynamic efficiency (as opposed to the static equilibrium approach of conventional economics).

Action: Your firm’s knowledge accumulation plan – i.e. learning – is its first priority.

3. Interaction and Isolation Dynamics:

  • Balance between interaction with allies and isolating competitors.
  • Drawing allies through effective engagement.
  • Isolating competitors to disrupt cohesion and effectiveness.

One of John Boyd’s pivotal concepts revolves around the interplay of interaction and isolation. The strategy for success involves effectively engaging allies while simultaneously isolating competitors to weaken their cohesion. This dynamic equilibrium plays a critical role in influencing outcomes and securing advantages within competitive environments.

Action: Choose the right partners as allies and isolate your competitors from these relationships.

4. Strategy as a Mental Tapestry:

  • Strategy as a dynamic mental tapestry of changing intentions.
  • Emphasis on self-awareness and situational awareness.
  • Continuous evolution of strategies based on circumstances.

John Boyd’s approach to strategy departs from conventional thinking by framing it as a dynamic mental tapestry of evolving intentions. He underscores the importance of self-awareness and situational awareness, advocating for strategies that continuously evolve in response to changing contexts. Unlike static planning, Boyd’s philosophy aligns with the adaptive nature of complex systems.

Action: Don’t plan – adapt.

5. Embracing Complexity and Distributed Leadership:

  • Embracing complexity over linear solutions.
  • Acknowledging distributed leadership in multifaceted challenges.
  • Orchestrating interactions to adapt to evolving contexts.

Boyd’s theories encourage a departure from linear problem-solving towards embracing the intricacies of complexity. By recognizing the multifaceted nature of challenges, Boyd’s philosophy promotes distributed leadership. This approach involves orchestrating interactions and collaboration among diverse elements, enabling organizations to respond nimbly to evolving contexts and foster innovation. Austrian economics, in the same way, is complexity-aware and orchestrates through value creation.

Action: Use value as the attractor in a complex business world.

The Value Creators Podcast: Episode #11. James Burstall On The Flexible Method

There’s a considerable debate among consultants and academics regarding the definition of management: what is it? Is it a science, is it a process, is it a set of tools that business schools teach us how to use? 

In this episode, James Burstall comes on to explain his perspective on management as a mindset (the interacting mindsets of many different people in many different circumstances in fact)  as proposed in his new book titled The Flexible Method: Prepare To Prosper In the Next Global Crisis.

Resources:

James Burstall’s Production Group – Argonon

James Burstall’s Book: The Flexible Method: Prepare To Prosper In The Next Global Crisis

Knowledge Capsule:

  1. Introduction to the Flexible Method:
  • “Flexible Method” is an approach tailored to managing uncertainties in business.
  • Central components include adaptability and radical determination, combined to form a powerful decision-making framework.
  • This method encourages an open-minded approach to research, teamwork, and resolute action for decision-making.

Action: Elevate responsiveness to change over planning.

  1. Radical Determination and Decision-Making:
  • Making and committing to decisions is crucial in the Flexible Method.
  • Teams need to reach a consensus and show unwavering determination.
  • Tough decisions are embraced and executed with full resolve.

Action: Don’t just make decisions, commit to them, and get team commitment.

  1. Adaptiveness and Scanning for Opportunities:
  • Radical determination is about executing decisions; adaptiveness involves identifying opportunities.
  • Scanning the horizon for changing circumstances is vital.
  • A case from the credit crunch illustrates the need to be open to new avenues.

Action: Where possible, anticipate change in the form of an opportunity space.

  1. Cash Flow as a Critical Metric:
  • Cash flow is the most critical business health metric, needing respect and management.
  • Managing finances during crises involves making tough decisions.
  • Strategies to retain relationships and sustain the business are discussed.

Action: Measure your business’s health with cash flow and cash availability.

  1. Entrepreneurial Mindset and Restlessness:
  • Organizations in crisis operate like startups.
  • Restlessness is essential for fostering an entrepreneurial mindset.
  • Embracing change, creativity, and innovation is emphasized.

Action: All business is entrepreneurial, not managerial.

  1.  Leadership, Care for People, and Reflection:
  • Leadership involves emotional intelligence, authenticity, and prioritizing people.
  • Values like diversity, inclusion, and environmental responsibility are retained.
  • Gratitude, rewards, and reflection play a role in the Flexible Method.

Action: Caring brings resilience to business.

The Value Creators Podcast Episode #10. John Tamny Entrepreneurs Don’t Meet Needs, They Lead Them

Entrepreneurs aren’t just about meeting needs; they’re all about setting trends and leading the way. Think of the big names like Elon Musk, Steve Jobs, Jeff Bezos, and Sam Altman. They don’t just follow the usual business rules; they rewrite them. So, how do they actually pull it off?

In his talk, John Tamny will take us on a journey to see how entrepreneurs, the minds that redefine industries, shake things up by tackling needs that haven’t been addressed yet. He’s all about those game-changers who see opportunities where others don’t.  

Show Notes:

0:00 | Introduction

1:22 | Entrepreneurs

2:00 | Entrepreneurial Thinking

3:36 | Entrepreneurs Leading the Future

5:06 | Mindset of an Entrepreneur

6:26 | Characteristics of Entrepreneurs

8:23 | Changes Lead Businesses

11:18 | Entrepreneurs Think Differently

14:06 | Hidden Entrepreneurs

15:55 | Big Companies are Not Entrepreneurial

18:42 | Institutional Entrepreneurship

22:54 | Creating New Knowledge for People

24:12 | The Idea of Capitalism

26:15 | Understanding Causation

32:31 | The Idea of Next-Generation Entrepreneurs

34:30 | Crypto Revolution

36:40 | Outro

Knowledge Capsule

  1. Entrepreneurship and Progress:
    • Entrepreneurship is that fundamental element of human nature that drives progress and innovation.
    • The United States has a history of entrepreneurial spirit, with individuals taking risks and pursuing their ideas.
    • Entrepreneurs challenge the status quo, create new value, and drive economic growth. In this sense, they’re oddballs.

Action item: Indulge your oddball entrepreneurial instincts.

  1. Education and Learning:
    • Education is a consequence of prosperity, not the other way around. People who want to learn will seek out knowledge regardless of formal education.
    • The next generation’s access to information and technology will lead to even more innovation and progress.
    • Learning is a choice, and the desire to acquire knowledge and skills is a key driver of success.

Action item:  Use A.I. and other tools as much as possible to accumulate knowledge.

  1. Causation and Expertise:
    • Causation is often misunderstood, with people misinterpreting relationships between events and outcomes.
    • Expertise can sometimes lead to tunnel vision, where experts become entrenched in their own data and assumptions.
    • The market and individual choices provide a more accurate gauge of trends and outcomes than expert opinions.

Action item:  Accept emergence, avoid false assumptions about causation.

  1. Innovation and Global Warming:
    • Innovation arises from individuals (oddballs!) challenging conventional wisdom and exploring unconventional ideas.
    • The assertion that experts are always right is challenged by examples like climate change and sea-level rise. The behavior of the market and individual choices contradict expert predictions.

Action item:  Rely on markets, not experts.

  1. The Next Generation and Private Money:
    • The younger generation is poised to be the richest in history, benefiting from technological advancements and abundance.
    • The rise of private money (perhaps, but not necessarily, in the form of cryptocurrencies could revolutionize the financial landscape by offering more trusted and efficient alternatives to government-issued currency.
    • The ability to circulate money that holds its value and the profit potential in private money creation are driving forces behind this potential shift.

Action item:  Pursue innovation in private money.

  1. Optimism and Capitalism:
    • Capitalism, rooted in individual initiative and free markets, has fueled prosperity and innovation throughout history.
    • While challenges arise, capitalism’s ability to adapt and outpace government intervention is a testament to its enduring strength.
    • Optimism about the future stems from the ongoing creative destruction that entrepreneurs bring to the market, constantly reshaping and improving it.

Action item:  Be an optimistic capitalist.