Tips for Entrepreneurs – Focus on Execution Intelligence

“Every time I’m asked to sign a nondisclosure agreement I see a huge red flag pop out that says Warning!”

Rob Adams has likely listened to as many new business ideas as anyone on the  planet, and one of his first tips for entrepreneurs is to never tell a potential investor you’ve got an original idea.

“Wake up,” he says, “Good ideas are not scarce, they are a dime a dozen.” If you don’t believe so, Adams suggests an online search of key words describing your idea. “You’ll find ten companies doing it, or thinking of doing it. You can drive yourself nuts searching for a unique idea, but that is not the point.”

The point, as he describes in his book A Good Hard Kick in the Ass, is execution intelligence, the ability to compose a team that can operationally execute a business plan with sustainability, flexibility and resilience, to dominate rather than define a market space.

Why Investors Hate the Nondisclosure

“Every time I’m asked to sign a nondisclosure agreement I see a huge red flag pop out that says Warning!” Adams asserts. “It screams out, ‘I’m stuck on my idea,’ it means you’ve spent too much energy obsessing about the idea and probably haven’t thought enough about the team, which is what the investor is really interested in. It implies you haven’t given much thought to your customers, or to the market.”

Getting to market first with a new idea doesn’t mean anything in Adams’ experience. “Netscape’s browser was out long before Microsoft Explorer,” he recalls. “Creating a new category does not necessarily spell success, but I can think of plenty of businesses that entered an existing category and proceeded to stomp all those roaches to pieces.”

Reputation Alert – Does Your Brand Kill Polar Bears?

Marketers cannot assume that true costs will not be seen or considered in the purchasing decision.

What is the true cost of your company’s product? Behind the simple economic analysis of materials, labor, marketing and distribution lurks the more complicated question of your brand’s social and environmental impact. Does your brand kill polar bears, and if so how does that fact impact your reputation?

Stephanie Jue, a business, government and society lecturer at McCombs School of Business, says cost economics is just the starting point for determining the societal impact of your product.

“Consider a $1.25 bottle of water,” she says. “What the consumer wants is the water inside, but it has to be in the bottle. We assume the price includes all of the costs of the water and creating the bottle, but consumers don’t pay the full cost of eliminating the plastic and eventually discarding the plastic when it can no longer be recycled.”

If consumers remain oblivious to the added cost there is likely no impact on brand reputation (convenient, portable water is good!), but in today’s information rich world, consumers tend to wise up. Social advocates make sure of it.

Witness the gradual demonization of bottled water as an example of what can happen when true costs are not just revealed, but turned into a cause célèbre.

Is the brand impact a factor of cuteness?

Cute enough for you to care?

How much consumers care about social and environmental impact, speaking from a pure brand perspective, may depend on the “cuteness” of the declared victim.

Jue notes that society is very worried about saving polar bears, for example, which seem to have minimal direct impact on the average person. Endangered honeybees, on the other hand, responsible for pollinating one third of the food crops in the U.S., receive much less concern.

Consumer Brand Choices – Perceptions Trump Logic

“We are ruled by our emotions first, and then we build justifications for our response.”

Originally published in Texas Enterprise.

Let’s consider a popular consumer brand choice you’ve likely thought about. Is the iPhone or the Android better for you? At the time this was written there were more than 97 million results on Google for that question, with lots of data points to consider. Which platform has the most advanced multitasking capacity? Which has better applications? You likely have a list of logical reasons in your head why one or the other is the best choice.

You may be disappointed to know two researchers at The University of Texas at Austin suspect those rational reasons may have little to do with your decision.

The fundamental question is whether consumers make their choices based on logical comparisons of performance, or are they emotional creatures who gravitate to products that appeal to their senses, feelings or moods?

Marketing professor Raj Raghunathan and Ph.D. student Szu-Chi Huang of the McCombs School of Business point to their research study that shows comparative features are important, but mostly as justification after a buyer makes a consumer brand choice based on emotional response.

The Case of the Attractive Chicken and the Unattractive Chicken

In one phase of their study, Raghunathan and Huang showed participants two photos. One was a nice looking, plump chicken. The other was a chicken that looked thin and sickly. Participants were told that the plump chicken was a natural chicken, and the thin chicken was genetically engineered.

The researchers informed half of the participants that natural chickens were healthy but less tasty, and genetically engineered chickens were tasty, but less healthy. The other half were told the opposite.

Breaking Gridlock and Solving Problems – Lessons from Global Warming

“These strategies open the door to tangible progress, even though it will be slow and messy.”

Environment and energy policy expert Dr. David G. Victor has been on the front lines of global environmental diplomacy for more than twenty years, so your ears perk up when he says, “The effect of all environmental treaties is nearly zero, and it’s time we seriously asked the question, ‘Is climate too hard to solve?’”

If you’ve been involved in breaking gridlock and solving problems you’ll almost certainly empathize with Victor’s frustration. Problems may seem unsolvable, particularly when motivations, authority and resources are not aligned, as in international emissions negotiations.

In the face of such constraints, how can you break the gridlock?

Reframe the Approach, And Your Definition of Success

Victor finds no surprise in the lack of progress made on global emissions. “Progress on climate requires governments to do things governments have a hard time doing,” he acknowledges. “There are high upfront costs with uncertain long-term results; and as industrial growth and emissions evolve across the globe, the natural leaders on climate issues change.”

He suggests a four-point approach for breaking gridlock that can work in any complex organization.

The Difficulty of Being Ethical in a Difficult Economy

Notes from the McCombs Alumni Network’s 8th Annual Alumni Business Conference on February 8, 2012.

Robert Prentice, Chair, Business, Government and Society Department, McCombs School of Business

“We are all Lance Armstrong…sort of.”

Robert Prentice began his lively remarks with a suggestion to visit the Ethics Unwrapped Website, that features a new free video series on business ethics and corporate social responsibility.

“The good news is, you’re not as unethical as you could be!” he says with a smile. “Everyone of us has the opportunity to mug little old ladies and steal candy from a baby, congratulations on not doing that. But, the bad news is, you’re not as ethical as you think you are.”

“We all lie a little bit when it suits us. We are all Lance Armstrong…sort of,” he says. “So the word of the day is humility. When you read about the latest scandal of the day, everyone thinks it couldn’t happen to them, but it could.”

Prentice points out that most people, even him, want to think of themselves as good people. Most people frequently act unethically, usually in minor ways. “When we can fudge a little bit to help ourselves out we frequently do it. Not that we know we are doing it.”

He says our brain is part of the problem in business ethics or other aspects of our moral lives, influencing our decisions based on factors such as:

• Our self interest
• Emotional reaction
• Role morality
• In-group/out-group