Blasingame’s Three Laws of Aggregation (or Two reasons your small business is like Sakrete)

Sakrete is one of the handiest products ever developed. It’s basically a bag of rocks and sand, but to a weekend warrior with a honey-do list, it can be a magic dust.

Packaged in small bags almost anyone can carry, Sakrete is an aggregation of Portland cement, sand and different size gravel. Just stir in water, apply it to your small construction project, wait a little while and, badabing badaboom, you’ve got real concrete supporting your project.

So, what does a small business have to do with a sack of rocks? Two things.

1. Chemistry.

When the components of Sakrete come in contact with water, a productive reaction occurs that, in a short time, manifests as a handy and enduring result. In the marketplace, productive chemistry between people and organizations is has long been known to be critical for sustaining successful performance. Whether Sakrete or your small business, the right chemistry is critical.

2. Aggregation.

Sakrete doesn’t just aggregate the correct combination of stuff, but also different sizes of masonry material. The larger pieces provide critical mass and structure, while the smaller ones bind everything together and nimbly fill in the gaps to eliminate weak spots. But unlike chemistry, aggregation is not as much of a natural law and requires more maintenance. Which is why there are no Blasingame Laws of Chemistry, but three Blasingame Laws of Aggregation.

Blasingame’s 1st Law of Aggregation

Find your success in aggregating the success of employees. 

Simply put, this is servant leadership, a term Robert Greenleaf coined in his book titled, you guessed it: Servant Leadership. But the concept goes back thousands of years to the ancient Chinese wisdom of I Ching, “The highest type of ruler is one of whose existence the people are barely aware.” And in his gospel, Mark quotes Jesus, “Whoever wants to be great among you must be your servant.”

Leaders who sustain success, year after year, are those who subordinate their ego by helping their people to be successful professionals, and then aggregate those success stories for the benefit of the company. They celebrate others first.

Blasingame’s 2nd Law of Aggregation

Aggregation prevents aggravation.

In business, aggregation is also known as strategic alliances, which small businesses must build with other organizations, especially larger ones.

It’s aggravating at least, and dangerous at worst, to manage threats and take advantage of opportunities without strategic resources. Compare the merits of forming a strategic alliance with an organization that already has what you need before you risk the expense and possible delay of capitalizing the ownership of that resource. And if you prefer, you can call it strategic aggregation.

Blasingame’s 3rd Law of Aggregation

Associate your brands with those that are more established. 

I also call this the “Forrest Gump Strategy.” As you develop strategic alliances, look for partners with brands and influence that have a higher recognition factor than yours, and arrange for the relationship to include your brand being presented in the marketplace alongside theirs. Brand association is smart aggregation, but you have to step up your game to earn the right to that level of aggregation.

Write this on a rock … If you’re not having the level of success you want, perhaps you should take some lessons from Sakrete.

The power of building customer communities

Incredibly, in 2017, here’s a question many small business owners ask: “We have a website, do we need a social media strategy, too?”

The answer is the same as for why you have an email address even though you have a phone.  It’s not either/or, but rather both/and. Because as outstanding and handy as your website may be, there’s one increasingly important capability you need that most websites aren’t good at: community building.

Once customers find you, returning to that beautiful website of yours will be of decreasing interest to them. It’s not that your new stuff – products, how-to information, order status, special offerings, etc. – is no longer of interest to customers. It’s just that they don’t want to have to come back to your website to get it. More and more, customers are saying to businesses, “I like what you offer, but I won’t be returning to your website much, because I’m very busy. Why don’t you follow me home with the new stuff?”

This is what customers and prospects mean when they join your community by giving you permission to connect with them and send them offers and helpful information by email, text messaging, Twitter, Facebook, etc. They just want the new stuff, including updates to your website. Even when they return to buy something on your e-commerce platform, they expect to enter your website through the offer page you sent them, not from your homepage.

Building online customer communities – and getting permission to follow customers home – is how a small business transcends being competitive and achieves the pinnacle position: relevance. As you may know, I define a business social media strategy as building customer communities. But by my definition, social media is much older and more comprehensive than the online platforms, like Facebook, Twitter, etc. Your customer community strategy includes everything you do to build, connect with and serve those communities, including: email marketing, customer loyalty programs, the new social media activity, and, of course, the original social media: face-to-face.

In the old days – way back in 2003 – your customer list was just names on an accounts receivable report or sales forecast. Today, those customers are part of your business’s community, which also includes prospects who’re just becoming interested in you. But unlike the passive customer list of old – and visitors to your website – this community is functioning and dynamic, with fast-evolving expectations you have to meet or they’ll defect to another community.

Another important component of building customer communities is allowing prospects and customers to see your corporate values. Increasingly, prospects will turn into customers, and customers will become loyal, because they’re attracted to what your company stands for, which is evident in the values you demonstrate, including online. For example:

1. Are your brand elements – brand promise and image – all about you and your stuff, or do they sound like something that would benefit your customer community?

2. When delivering information, is it all about you, or does it contribute to the community?

3. What’s the tone of your marketing message? “Tone” is how brand messages are incorporated as you serve the community, from crassly commercial to almost subliminal. You should strike a tone balance between serving the community and making a sale.

Notice all of these demonstrate values that favor relationships more and transactions less.

In a world where everything you sell is a commodity, value – product, price, service – is the threshold of a customer community, but values are the foundation. Value is easy to find these days. But when community members are attracted to your values, they keep coming back and bring their friends.

Write this on a rock … Build and serve customer communities with a website and social media strategy that demonstrates your values.

Welcome to Amazonia – third rock from the sun

Eeep—Eeep—Eeep —Eee

“Uh! Yes, Echo. I’m awake.” Walter’s answer stopped the noise and prompted this message from inside his pillow:

“Good morning, Walter. It’s 6:30am in Amazone 3, Monday, March 8, 2087.  Current temperature is a crisp 11 degrees Ama-Cius. Have a nice day.”

Walter Wallace had received the same wake-up notice every morning of his life since 2060, the year he turned eight. That was the year planet Earth, third rock from the sun, became Amazonia, wholly owned by Amazon.com.

By the middle of the 21st century, the world economy became dominated by Amazon and a few other online retailers and tech giants, like Google, Microsoft, Facebook, etc. For decades the megalomaniacs of those firms pursued shared goals of influence over sectors such as the global consumer goods supply chain, the content origination and curation universe, the global 24/7 news cycle, big data mining/consumer manipulation, etc. Ultimately, planetary control was complete as their long-held geo-economic dominance coalesced with their nascent global political influence.

In 2053, Amazon moved its headquarters from Seattle to occupy the entire lower third of the island formerly known as Manhattan — now called New Bezos, after the company’s late founder. By then, most Earthlings received whatever they needed in life – including employment – from some combination of the tech giants. By 2057, a final merger resulted in absorption of the other tech behemoths by the ultimate powerhouse, as Amazon controlled every function of society, commerce and governance.

Walking to his job as an Amazonia community planner, Walter no longer noticed the constant buzzing of the Amadrones, the iconic device for how the company gained global control, as they delivered goods. The internal nomenclature was “unmanned delivery and surveillance platform,”
or UDASP, because they doubled as aerial spies. Everybody knew that. But Amazonians had long since suspended any expectation of personal privacy or self-determination.

Walter’s parents had told him stories about a diverse marketplace that included something called small businesses. But the same year the planet became Amazonia, the last one closed in what was once Lake Station, Indiana, now part of Amazone 4. Louis Lukedic, Jr. finally gave up the fight against the UDASPs and closed Louie’s Dry Cleaning, the 60-year business his father founded as the new millennia dawned. Besides, Louie Jr.’s children had all been assimilated by Amazon.

Walking to work in what was once Cincinnati, Ohio, all around Walter were Amazon branded buildings, including commercial structures for doing the corporation’s business, and high rises, to house Amazonians. Just last year, Walter, his wife and two children moved into one of the newest buildings. His parent’s generation were the last to experience home-ownership.

Every morning Walter stopped at an AmaMac SDD (sustenance delivery device) to procure a green breakfast wafer that tasted better than it looked, and coffee-flavored liquid. As a holographic scan confirmed whose personal Amaccount to debit, a strange noise came out of the SDD.

Eeep—Eeep—Ee —

“Wazzat?”  Walter grunted loudly, as he slapped the snooze button. “Where am I?”

“Honey, are you okay?” Walter’s wife, Wilma asked. “I think you had a nightmare.”

“Boy, I’ll say,” Walter exclaimed, wiping the sweat from the back of his neck.  “I dreamed Amazon had taken over the world. I tell you, Wilma, it was awful — they owned everything. There were no small businesses anywhere. All the people had blank stares on their faces as they went about their lives. Even me.”

Opening the morning paper at breakfast, Walter felt a chill as he read this very real headline, “Retail Ice Age advances as Amazon and other e-tail giants transform Main Street.”

In his small business later that day, Walter thought about his nightmare, the newspaper headline and another dream of his — the one about passing his business on to his children. In a meeting that morning, Walter vowed to fight back harder than ever as he encouraged his staff.

“We must stay focused on what customers expect from us,” Walter continued, “which is our special sauce of combining a certain level of high tech AND the high touch only we can deliver. We’ll combine both to achieve higher margins with what customers want – customization, and leave the commodities – what customers need – to Amazon.”

“And here’s Breaking News: Amazon is 100% digital, but customers are 100% analog. Amazon may deliver dozens of different back scratchers, but it can’t scratch one back. Only a Main Street business like ours can reach that analog itch that’s unique for every customer. Amazon can’t beat us if we keep customers focused on that advantage.”

Write this on a rock … Deliver the small business special sauce and you’ll have nothing to fear from Amazon.

How to connect with global prospects – and get paid

In case you haven’t heard, the seven billionth Earthling was born recently.

For the global marketplace, seven billion prospects is exciting. But 96% of those folks live outside the U.S.

Once, small business growth meant expanding across town or the next county over. But new technologies and demographic shifts have made expanding outside America’s four walls increasingly compelling. It’s also produced three elemental global business questions: Who are my prospects, how do I connect with them, and how do I get paid? Let’s focus on the “Who” first, with these global stats from National Geographic, plus my editorializing.

  • Nineteen percent of Earthlings are Chinese, 17% are Indian and 4% are American. By 2030, the first two will invert.
  • In a historical shift, just over half of Earthlings are now urbanites. Remember, city folk use different stuff than their country cousins.
  • Globally 40% of us work in services, 38% in agriculture and 22% in industry. This means different things to different industries, but it means something to all businesses.
  • English is the international language of business, but is the first language of only 5% of global prospects. When doing business outside the U.S., be culturally sensitive and patient with the translation process.
  • Breaking news: 82% of your global prospects are literate. If you can read and write you can improve your life, which explains the growth of the middle class in emerging markets. A growing global middle class means millions of new, affluent consumers each year.
  • Computers are luxuries for most Earthlings, but mobile networks are exploding across the globe. Soon billions who never owned a computer or used the Internet will do both with a smart phone. What does your mobile strategy look like?
  • For American small businesses, export opportunities abound in our own hemisphere without crossing an ocean, especially Canada, Mexico, Panama, Columbia and Chile, where trade agreements are in place. But keep an eye on the Trump trade tactics, part of which may manifest in tax reform.

The good news is there are two government agencies standing by to answer questions about your export strategy. Each one provides digital information, human assistance and global networks designed to help a small business maximize its opportunity to create and execute a successful export strategy.

U.S. Commercial Services

The, “How do I connect with global prospect?” question can be answered by this agency, and it should be your first stop for education on finding and converting global prospects into customers. It’s a virtual one-stop shop for developing and executing your export strategy: a great website (Export.gov); a toll-free number (800-872-8723) answered by a real person; over 100 offices around the U.S., plus dozens more around the globe you can walk right into and ask for help; and their book, “A Basic Guide to Exporting,” which includes an excellent tutorial and several case studies. It’s all free except for the book and any direct expenses they incur on your behalf.

Export-Import Bank

This is where you get the “How do I get paid?” answer. Part of the U.S. government, Ex-Im Bank (exim.gov) will assist with the financial elements of your export sale. They’ll coordinate with the banks on both sides of the transaction to transfer funds, provide loan guarantees, and even pre-delivery working capital for you and post-delivery financing for your customer.

For generations, big firms owned the franchise on global business. But shifts in technology and demographics are making the global marketplace more compelling and feasible for small businesses. And for all the government agencies that gets in our way, these two will actually help you.

Write this on a rock … The global marketplace – and 7 billion prospects – are waiting for you.

Four new marketplace truths every small business must know

What is our value proposition?

For 10,000 years, during a period I call the Age of the Seller, answering this question was the focus of every business as it went to market. Indeed, customers refined their search for products and services down to the semi-finalist sellers based almost entirely on components of the classic competitive value proposition: price, product, availability, service, etc.

But then something happened.

The Age of the Seller was subducted by The Age of the Customer. In this new era, where value is now presumed, the prime differentiator is no longer competitiveness, but rather relevance. Today the question every business must focus on when they go to market is: What is our relevance proposition?

So does this mean sellers no longer have to be competitive? Not at all—no one will pay you more than they should. But consider four new marketplace truths:

  1. With value now presumed, customers expect to find what they want, at a price they’re willing to pay, from dozens of sellers.
  2. They don’t care if they do business on Main Street or cyber-street.
  3. Prospects are self-qualifying themselves and pre-qualifying a business based on relevance to them before a competitive position has even been established.
  4. Prospects are doing all of this before you even know they exist.

That last point is perhaps the most breathtakingly disruptive development in the shift to the new Age. As this shift plays out, two types of sellers—Hidebound and Visionary—currently exist in parallel universes, but not for long. Which one are you?

Hidebound Sellers
These companies are so invested and entrenched in the old order of control that they deny the reality in front of them. They can be identified by the following markers:

 Misplaced frustration: As performance goals get harder to accomplish, frustration makes those who deny the new realities think their pain is caused by a failure to execute.

• Bad strategies: It’s said that armies prepare for the next war by training for the last one. So it is with Hidebound Sellers. While Age of the Customer pressure makes them think they’re being attacked, they persist in using Age of the Seller countermeasures.

• Destructive pressure: Convinced of execution failure, pressure brought to bear by management results in an employee casualty list and a shrinking customer list.

• Equity erosion: Defiance in the face of overwhelming evidence sustains the deniers until they run out of Customers with old expectations, and their equity and access to credit are depleted.

Visionary Sellers
These sellers are adjusting their plans to conform to the new reality of customers having more control. Visionary Sellers are identified by these markers:

• Acceptance: They accept that customers have new expectations about control and make adjustments to this reality.

• Modern sales force: They hire and train their sales force to serve increasingly informed and empowered customers.

• Technology adoption: They offer technology options that allow customers to find, connect, and do business using their expectations and preferences.

• Relevance over competitiveness: They recognize that while being competitive is still important, it’s been replaced in customer priority by the new coin of the realm: relevance.

• Special sauce: They combine and deliver high touch customization with high tech capability.

In The Age of the Customer, Hidebound Sellers are dinosaurs waiting for extinction. Visionary Sellers are finding success by orienting operations and strategies around a more informed and empowered customer seeking relevance first.

Write this on a rock … What’s the verdict? Are you Hidebound or Visionary?

What Macy’s and Sears didn’t know about barbells

The American retail industry has been going through a major shift in recent years, but very recently we’re seeing increasing pressure on the Big Boxes.
In my last column, I introduced the macro-economics concept of The Barbell Effect now being created by this disruption in the retail sector. This column reveals why that macro-disruption should be good for Main Street businesses out in the micro-economy. If you missed the first column, check it out. In the meantime, here’s the gist:
The Barbell Effect occurs when entrenched, legacy practices are disrupted by forces like new technology, innovations, and shifts in demographic behavior, like when people stop going to malls. Those industry players who fail to adapt to the shift are forced to retreat into the contracting middle, the bar. Those who adapt will prosper in the bell ends, where most customers are going. Remember, the barbell doesn’t exist prior to the disruptive pressure — it’s the result, not the cause.
As the Big Boxes are being squeezed into the claustrophobic, bar-of-irrelevance, they’re closing stores faster than you can curl a two-pound free weight – by the hundreds. Their legacy model — customers walking into their stores to buy stuff — is built around a 150-year-old paradigm that’s shifting. Futurist and implications expert, Joel Barker warns, “When a paradigm shifts, everything goes back to zero.”
The energy driving this shift is the fast-evolving customer expectations, which are increasingly associated with e-commerce. Customers are finding it easier to shop for and acquire stuff online, which fits their 21st century lifestyle and saves them time. Here’s the retail barbell by the numbers: currently, online sales are just over 8% of all retail, but with a bullet of a half-point a year. Meanwhile, the legacy brick-n-mortar sector has seen 27 months of declining sales (Bloomberg).
Of course, we know who’s greasing this shift: the 1200-pound Internet gorillas like Amazon and Google, plus one more disrupter — mobile. Mobile computing wasn’t any part of our past, but with 20% of online sales and a faster bullet, it will dominate our future — as in tomorrow. You must have a mobile strategy.
In his 1982 book, Megatrends, John Naisbitt prophesied, “The more high tech we have, the more high touch we will want.” Make no mistake — this retail Barbell Effect is the fulfillment of the Naisbitt prophesy. The good news for small business is the Big Box retreat is leaving a High Touch vacuum you can fill, if you understand what’s happening on the ends of the barbell:
  1. The digital bell – for when customers seek sexy, high tech, virtual contact, while allowing Big Data manipulation and scratch-your-own-itch service;
  2. The analog bell – where customers go to satisfy their craving for that special sauce made from Main Street high touch AND slightly-less-sexy high tech. It tastes like this: “We’ll help you scratch your itch” customization; “Good to see you again, Mrs. Smith”; “Thank you for your business;” “Be sure to check out our mobile site.” “Follow us on Facebook.”
The reason it’s The Barbell Effect, and not The Lollipop Effect, is because of the primal truth that powers the analog bell: One hundred percent of customers who demand digital are themselves 100% analog. You and I, and every one of our customers are as analog as a caveman or a kumquat, which means we’ll always have analog, high touch itches. And with all the high tech leverage they can muster — 3,642 backscratcher purchase options (I checked) — Amazon can’t scratch one analog, high touch itch.
In the wake of the big retreat of the big retailers, combined with the analog limitations of the big e-tailers, that High Touch vacuum will be filled by Main Street businesses delivering their high tech/high touch special sauce. And since your small business doesn’t have to conquer the world to be successful, you don’t care if the digital bell is sexier and bigger than your part of the analog bell. The big guys need all of that to survive — you don’t.
Write this on a rock … Vacuums don’t stay vacuums for long, and there’s no room for you in the bar. Tick tock.

Beware the Barbell Effect, unless you’re a small business

Once upon a time, in a land far, far away – in Internet terms that’s about 10 years ago – a small business owner didn’t have to worry too much about macro-economics. Well, that was a nice trip down Memory Lane.

Today, Main Street business owners have to operate every day in their micro-economy, while keeping an eye on what’s happening at the macro level. Alas, macro-economics isn’t easy to get your head around when your highest priority on Monday morning is to cover payroll on Friday.

Here’s a handy macro-economy metaphor: the Barbell Effect. Essentially, this phenomenon occurs when natural forces – new technology, innovations, shifts in demographics and behavior, etc. – disrupts entrenched, legacy practices of an industry. The disruptive pressure squeezes industry players who fail to adapt causing them to contract into the bar. Those who adapt find their way to the bell ends, where there’s room to expand.

At the macro level, the barbell doesn’t exist prior to the disruptive pressure – it’s the result, not the cause. In the marketplace, the energy causing the disruption is customers empowered with new expectations. This will be on the test: When customers are empowered, businesses are disrupted and barbells are likely.

There have been many examples of the Barbell Effect – some small and local, and some even global. I read recently about a housing barbell in one city where units on the high and low ends – the bells – were selling well, while the ones in the middle – the bar – not so much. The American banking industry has experienced its own Barbell Effect this century. As big banks got bigger on one end of the barbell, community banks hung in there on the other end, while medium-sized banks experienced financial claustrophobia as the bar got thinner and thinner.

Right now, the Barbell Effect is creating an existential reaction that can literally be watched by Main Street small businesses from their front doors as no-longer-relevant retail giants are closing hundreds of stores at a breathtaking pace. Here are some numbers: As of this year, 200 Sears stores closing brings their numbers down 60% in the past 5 years, while K-Mart is shuttering over 100 locations. Macy’s is closing 100 stores, and JC Penney is projecting 300 store closings. And besides these big guys, many medium-size retailers are also making the acquaintance of the bar between the bells.

The pressure creating this retail barbell is arising from new and evolving customer expectations, which increasingly means higher adoption of e-commerce – online shopping/purchasing. But the new expectation isn’t about unique products, lower prices, or better service, it’s the most powerful relevance advantage in The Age of the Customer: saving time. Technological innovations and customer care practices – easier mobile shopping and electronic payment, plus free delivery and easy returns – are saving customers enough time to change their shopping behavior and create a barbell.

As we witness the disruption – if not the end – of traditional, big box retail, let’s remember the good news about the Barbell Effect: It has two fat ends – the bells. On one end of the retail barbell are disruptive companies like Amazon, Google, and any other purveyors of the online retail model. On the other end are small businesses that understand that the online, digital model cannot fulfill all of the expectations of their analog customers. Indeed, the current Barbell Effect is producing a customer experience vacuum that will be filled very profitably by small retailers who deliver the special sauce of the both/and business model: traditional, analog retail (High Touch), combined with online, digital capability (High Tech).

In my next column I’m going to reveal what it takes to maintain occupancy of the fat ends of the barbell, and why this current retail phenomenon is great news for small business CEOs who see the micro-impact of the macro-economy.

Write this on a rock … Blasingame’s Law of Business Love: “It’s okay to fall in love with what you do; it’s not okay to fall in love with how you do it.”

Two reasons quality service can take you down

Successful customer service is the process of delivering value to customers in exchange for payment.

Surely this is the prime directive of any business. But that process isn’t truly successful unless the relationship can be sustained, and only quality produces sustainability.

But what kind of quality?

“Quality service” is a 20th century term that businesses use to declare a commitment to diligent customer support. But customers typically associate it with, and businesses too often tolerate it as promptly addressing a problem. Unfortunately, here’s what quality service often sounds like:

“We’re sorry we delivered the wrong size part. But we’re committed to quality service, so one of our trucks will be there in an hour with the correct part.”

It’s true. Sometimes quality service like that impresses the customer – and businesses even like to brag about delivering it. But while prompt attention is admirable, it’s not optimal because it has a negative impact on sustainability in at least two ways:

  1. The customer was inconvenienced by inaccurate service – you screwed up!
  2. Allowing an avoidable problem to occur is the worst kind of profit-eating inefficiency.

In the 21st century, successful small businesses have converted their problem-fixing “quality service” to the profitable and sustainable “quality process.”

Put simply, executing a quality process is serving customers correctly the first time. Accomplishing a quality process ranges from the very basic, accurate order filling, to the more complex, integrating into your operation only those vendors that share your quality process commitment. It shouldn’t be breaking news that your large business customers have been doing this for a couple of decades, to eliminate weak links in their supply chain.

The optimal goal of your quality process is sustainable customer relationships. That means 1) you did it right the first time; and 2) you made a profit and didn’t squander any of it on mistakes. Such sustainability is in evidence when customers return to find your profitable business still there, ready to serve them again with your quality process.

So why would anyone live with profit-eating quality service instead of managing with a quality process? Because cash is a drama queen and profit isn’t.

Delivering quality service is practiced by crisis managers. The crisis comes when you could lose a sale – possibly even a customer – because an order was filled incorrectly, creating a hit to your cash flow so quickly and dramatically that it takes your breath away: “OMG, get out there right now and fix this!”  Lots of drama for everyone.

Having a quality process is a commitment to profitability, requiring disciplined, long-view professional management. You’ll recognize it by the sound of no drama experienced by you or your customers … crickets.

Professional small business CEOs know that focusing on a quality process – doing it right the first time – takes a commitment to quality hiring, efficiency training, and a focus on what customers want, not just what they need. These practices produce sustained profitability and, in time, will eliminate your noisy cash flow drama.

Remember, the quality service you’ve been so proud of may seem admirable, but when delivered in response to something that was avoidable, it assaults profitability, threatens sustainability and ultimately will put you out of business.

Write this on a rock … Convert quality service into the more profitable – and sustainable – quality process.

Four letters from your big customers

Consider the ancient proverb: “Any chain is only as strong as its weakest link.” This is about four letters with this proverb in mind, sent to small businesses from their corporate customers – two that have been sent and two that will be.

1. Quality

The first letter was born in the 1950s, when the ideas of the godfather of the 20th century quality process, Edwards Deming, reversed “Made in Japan” from a metaphor for cheap into a mark of quality. During the 1980s, after American industrial competitiveness fell behind global competitors, quality processes like ISO and Six Sigma were adopted, returning “Made in America” to a mark of excellence.

By 1990, with their in-house quality act now together, big businesses realized they needed similar commitments from the small business vendors that had increasingly become more like integrated partners. As such, big business needed to know that the support from these partners would at least not diminish the quality expectations of their customers. Consequently, small businesses started receiving letters from those big customers requesting evidence of quality process practices, if not certification, without which there would be no continued, or new contracts.

2. Y2K

The seed for the second letter was planted by computer programmers in the 1960s. When these programmers wrote date codes with six digits, as in 121565, for December 15, 1965, they did so to conserve what was at the time very expensive data storage. However, they didn’t realize they were creating the literally ticking Y2K time bomb.

Around 1995, experts started worrying that when the clock ticked midnight, January 1, 2000, zillions of lines of date-sensitive computer calculations would fail by going back a century – 010100 would revert to January 1, 1900 – instead of rolling forward to 2000. Consequently, the codes in millions of programs had to be fixed. By 1998, small businesses started getting letters from their larger customers requesting evidence of their “Y2K compliance,” without which there would be no new contracts with eight-digit dates.

3. Sustainability

The third letter was born in the middle of the 20th century, when we started realizing that the solution to pollution was not dilution. Since then, environmental stewardship has evolved from not polluting to sustainability. That word – sustainability – essentially means doing more with less, and it includes making waste useful – especially water. It turns out that sustainability is not just the right thing to do. Since it’s been proven that it can also contribute to profitability and a positive corporate image, it’s become a 21st century business best practice.

You may not yet have received a sustainability commitment and practices letter from your corporate customers, but it’s coming. And because of that best practice thing, it will be irrespective of the current state of the geo-political climate change debate. So start thinking about resources usage, including energy, consumables, production waste – especially water. Start documenting your efforts, practices and performance in recycling, reusing, conserving, etc., so when a customer hands you their “Sustainability Letter,” you won’t have that “weak-link in the headlights” look.

4. Cyber-security

Does anyone need a review of the multiple and significant cyber-assaults that have been made on digital assets and records of American business and government in the past few years? Whether from cyber-criminals or cyber-spies, the threat is real, comprehensive, determined, unrelenting and, to date at least, very successful – for the bad guys.

Expect the Trump administration to push for increased cyber-defense measures for the government to an unprecedented degree. Because of the massive level of business that corporate America does with the federal government, a cyber-security partnership will logically be forged, as they collaborate on cyber-practices, expectations, tools, innovations, etc. This will be the most comprehensive commingling of efforts and shared goals by business and government since WWII. So expect your large customers to begin requiring cyber-security practices verification, either by a letter, or in the specifications of an RFP. Your corporate customers are not going to let you be their weak link.

Write this on a rock … Take a lesson from the Quality and Y2K letters. Set yourself up for success by taking action on sustainability and cyber-security. Do it now!

Why strategic alliances are a 21st century imperative

Closeup Businesspeople Hand Holding Jigsaw Puzzle

In the 1990s, when I began thinking about how to help entrepreneurs prepare for the 21st century, I condensed the areas requiring a heightened level of importance into three critical disciplines:

1. Leveraging technology in every aspect of your business;

2. Professional networking, as opposed to just meeting new people;

3. Building strategic alliances as a growth strategy.

If by now you haven’t become at least somewhat proficient with the tech stuff, you don’t have much time to adapt, adopt and survive. Better get busy.

And thanks to the work of people like the legendary Ivan Misner, founder of Business Network International (BNI), most of us now subscribe to what I call Misner’s Razor: “It isn’t netplay; it’s network.”

But what about that alliance thing?

Blasingame’s Second Law of Small Business states: It’s redundant to say, “undercapitalized small business.” It’s a natural law that small businesses come to the end of their resources – people, assets, technology, cash and credit – much quicker than do our big business brethren and sistren. So by that definition, we have to do something as primordial as when Og asked Gog to hold the chisel while he carved out his new stone invention that looked a lot like a donut. We have to seek and develop alliances.

Answer these questions:

  • Is your business growth hampered by a lack of people, capital or other assets?
  • Would you like to bid on a request-for-proposal (RFP) that has specifications beyond your company’s ability to perform?
  • Are you reluctant to ask a large customer about their future plans for fear that your organization may not be able to step up to the answer?

If you answer any of these – or variations thereof – in the affirmative, perhaps it’s time to pursue one or more of these three alliance examples, in descending order of formality.

Partnership

A partnership is more formal and typically longer term. Regardless of how it’s structured, in general, all partners have a vested interest in the success of the entire enterprise. Think of two business owners buying a commercial duplex and sharing the space because neither has the cash or credit to swing the deal alone. Most partnerships are best organized with the help of an attorney. But remember, because it’s more formal, probably even legally binding, choose your partners well.

Once, when consulting a mentor about choosing a business partner, he used hyperbole to encourage caution by saying, “A partner is only good for two things: sex and dancing.” But it isn’t hyperbolic to say that alignment of values between the parties is imperative to a successful partnership. This is a natural law: Regardless of how symbiotic the combined contributions may be to the venture, a partnership founded by parties with conflicting values is doomed from the beginning. Choose your partners well.

Subcontractor

By definition, a subcontractor becomes a contractual participant you bring in to help fulfill a larger project for which you are the lead vendor or general contractor. Unlike a partner, a sub expects to get paid for delivery of work or products regardless of how the project turns out.

Subcontractors are a great way to leverage your business without giving up control of the opportunity. But remember that with this step you’ve created a performance chain. And we all know that any chain is only as strong as its weakest link. A weak subcontractor could undermine your performance, harm your brand, and may even take you down.

Like partners, choose your sub-contractors well.

Strategic alliance

This relationship is typically less formal. Let’s say a web designer, a programmer and a search engine optimization expert plug each other in on projects as peers, instead of as subcontractors. After a project is executed and paid for, the participants go their own way until the next symbiotic scenario. The most successful professionals I know claim, nurture and go to market with many and varied strategic alliance relationships. And most were born from networking.

Going forward, I believe we’re going to see more enthusiasm and growth in the marketplace than in the past few years. That should mean more business, which should present more opportunities for alliances.

Before giving up on a project because you don’t have the in-house resources, look around for ways to create alliances that allow you to take advantage of an opportunity.  Start establishing them now – before you need them.

Write this on a rock … If Og the caveman can create an alliance, you can, too.