Practical advice in order to be effective

Executives should prioritize if they want to be effective. Keeping this in my mind, I wrote to my notebook screen and mobile phone screen three upto five most important projects I should allocate my time. In this manner, it is easy to resist urgent but non-important problems and keep focusing instead of drifting.

Here is an excerpt from Richard Rumelt’s brilliant book “Good Strategy/Bad Strategy” that is related to this idea:

In 1890, there was a cocktail party in Pittsburgh. Andrew Carnegie, who was a leading figure in American steel industry was also attending to the party where he was introduced to Frederick Taylor, the man who invented scientific management and at that time he was becoming famous for organizing work. “Youngman,” said Carnegie, loooking doubtfully at the consultant, “if you can tell me something about management that is worth hearing, I will send you a check for ten thousand dollars.” (ten thousand dollars was a great money in 1890). Conversation stopped as the people nearby turned to hear what Taylor would say. “Mr. Carnegie,” Taylorsaid, “I would advise you to make a list of the ten most important things you can do. And then, start doing number one.” And, the story goes, a week later Taylor received a check for ten thousand dollars.

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Global Entrepreneurship and Innovation Workshop series in Istanbul by Ken Morse and Laura Morse was great!

I am very lucky because I have attended to the following series of three workshops under the leadership, advice and monitoring of Kenneth Morse and Laura Morse. Thanks to Mr. and Mrs. Morse; Turkcell, TIM and all other sponsors for this great workshop.

  • Global Sales Strategies (21-22 February 2012)
  • Growth Financing Strategies (28-29 March 2012)
  • Designing, Leading and Building World Class Management Teams (25-26 April 2012)

The target profile for the workshops was “Ambitious Turkish Entrepreneurs“; thus    distinguished and successful entrepreneurs as well as investors have attended. Ken and Laura Morse invited great people to serve as a jury member to all of the “pitching training sessions” that have been done after the workshops in the evenings. The workshops provided us not only great insights but also to meet and network with numerous great entrepreneurs and investors.

Ken Morse’s training styple is highly interactive, providing useful advices that work, urges us to think deeply to his insightful questions. He is the most result oriented business person/entrepreneur I have ever met. He serves as a role-model for how to be a successful global entrepreneur. In all of the workshops, he  consistently emphasized the importance of pitching (to customers, investors/VCs and during recruiting for your company), anticipating the pains of the counterpart, the importance of asking relevant questions, finding top notch people, and practicing in order to be prepared for a sales pitch. He did not only tell us “what to do”, but also “how to do”. He says “everything counts”. Thus, he even told us the place where we should stand in a meeting or in a coctail, the contingencies, timing and content of our effective pitches. In all of the workshops, we learned effective strategies of selling, finding fund and recruiting; as he frequently reminds “hope is not a strategy“.

Mr. and Mrs. Morse told us great advices from real life experiences and case studies. Since they were involved in most of those cases, it was a priceless learning experience to listen directly from them.

In Global Strategies workshop we have:

  • learned and practiced of “an effective elevator pitch” to potential customers.
  • learned how to select the initial and next vertical markets and how to dominate the markets globally.
  • learned how to sell to a committee (the one with the pain, the one with the decision makers and Mr. No).
  • learned how to approach, understand, present and close our sales to our customers
  • Spotfire HBS case for creating a multinational start-up and success factors for technology based entrepreneurship.

In Growth Financing Strategies workshop we have:

  • the opportunity to listen to Graham O’Keeffe (Partner of Joy Capital) for the key concepts of entrepreneurial financing and Eric Achtmann (Managing Partner of Global Capital Advisors GmbH) about VC’s and management boards.
  • attended to the panel chaired by Özlem Denizmen (Dogus Group), Mustafa Say (Access Turkey Capital Group) and Deniz Ilkılıç (IMKB) with the presentations of Ferhat Pekin (lawyer) and Kaan Gur (VP of Akbank).
  • We have practiced to have several elevator pitches to venture capitals.
  • I personally have the opportunity to talk with Ken Morse in the lunch and I have the honor to present about the importance of “customer financing” to attendees from what I have learned from Ken. (As seen in the following photo, Graham gave me a gift for this  briefing):

In Designing, Leading and Building World Class Management Teams workshop we have:

  • learned from Laura how to recruit, motivate and retain top notch people.
  • discovered our management profiles (which has been assessed before the workshop with an online test).
  • practiced pitch exercise to recruit a potential new team member.
  • learned the lessons on leadership from “12 Angry Men” which was terrific and inspiring.
  • discussed Meg Whitman (eBay) and Mark Ain (Chronos) cases.
  • listened to Yusuf Azoz’s (CEO of career evolution.

It has been a great learning and practicing experience for us. Here is our photo with Mr. Morse:

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Have You Met With My Advisory Board ?

On the eve of critical business decisions or during tough times, I try to imagine what would these great people would mentor me with their valuable suggestions if they were alive and exists in my advisory board.

I have read a lot about them which helped me learn and adopt their mindsets. Virtually, I ask them questions and their answers are immediately revealed without any conscious effort. I assume that this is not a schizophrenic situation 🙂

Atatürk provides answers about leadership, vision, execution and strategy. Drucker provides insights about effective management, Steve Jobs about innovation, style (e.g. UX) and innovation; Napoleon Hill’s positive thinking and achievement oriented mindset destroys my cognitive burdens and fallacious limits; Dale Carnegie helps when there is a need for better communication and motivation. And last but not least, Matsushita stands as a legend figure for entrepreneurship, philosophy and philanthropy.

For example; I ask: “What type of products should we produce?

Atatürk says: You should strive to be economically independent. Thus, concentrate on producing B2C products and envision a larger, global market place. In this new era, you can only win victories by serving the needs of global markets with great products.

Drucker says: Exchange “markets” with “products” in my question to Jack Welch and seek your own answer: which markets will your company be number 1 or 2? Try to build your products on your strength and stay effective by prioritizing your product endeavours.

Steve Jobs says: You must focus on simplicity and elegance. Try to concentrate on the products which would create great experiences in your customers, get rid of others. And be remember to produce applications for Apple 🙂

Napoleon Hill says: Whatever you can believe and conceive you can achieve. Do not forget this. I do not know any single product in your industrial domain (mobile phones was not invented when I was alive) but I believe that your company can easily produce compelling applications if you have already developed a “Definiteness of Purpose” in your company. You are lucky because you have already acquired a mastermind alliance that consists of us.

Dale Carnegie: You can not always find the exact answers. Do your best to create a working environment in which you provide the questions, and your colleagues would provide the answers with great faith and confidence. Try to help during their self actualization process, after which they will appear with the right answers and products. Do not neglect to acknowledge their suggestions and ideas. Encourage your employees and treat them nicely and in justice.

Matsushita: Do not seek to create products to earn more revenues. If you will create products that will serve the needs of the society and create value, then you will automatically gain money. When you gain money, do not hold the money, distribute some of it to the best needs of your society. Always remember to have an appropriate profit. Without profit companies will not be able to contribute wellness to society.

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A’s hire A’s, B’s hire C’s

One of the Donald Rumsfeld‘s (13th and 21st US Secretary of Defense) rules is:

A’s hire A’s, B’s hire C’s

which reminds the recruiter to hire the best people, who may even be smarter and more talented than than the recruiter.

The ones who hire people who are not great – for the sake of their own security – cause mediocrity in the organization. These people (the B’s) tend to consider great people as a threat to their positions. They are wrong.

Andrew Carnegie, one of the greatest businessman/entrepreneur, wrote in his tombstone: “Here lies a man who knew how to enlist the service of better men than himself”.

Jim Collins, author of the book “Good to Great“,  asserts that great companies got the right people on the bus before they became great. Jim emphasizes the importance of great people in order to become a great company.

As an entrepreneur I have observed many times that A’s hire not only A’s but also A’s attract A’s into the organization. Thus, this brings a vicious cycle that breeds success. I have never witnessed a superior success with a team which consists of only B’s or C’s.

There are three challenges regarding this fact:

1) How to find and attract A’s?

2) How to keep A’s stay in the organization?

3) How to set-up a social setting so that A’s become an “A Team” (i.e. how to form a cohesive team which proceeds towards common goals rather than a loose group in which everyone seeks their own interests)

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How to create engagement in mobile apps?

Axiom 1: User engagement is an important factor for monetizing mobile apps.

More engagement means greater impressions and great impressions attract revenue in every kind of the business model (e.g. Advertisement, InApp, Subscriptions, App sales or Sponsorships).

What are the metrics for engagement?

As Done Labs, we use the following three simple metrics in order to measure and evaluate our mobile applications’ success:

  1. Users: # of users who downloaded the application. Active users: who use the application at least once in a month. What is the percentage of our active users? (i.e. active users / all users).
  2. Frequency: How many times a day/week/month our applications is used by active users?
  3. Duration: In each session, how many minutes/hours our active users continue using our application?

Monthly Engagement = # of active users (monthly) x Frequency (monthly average) x Duration (monthly average per session)

How do we create engagement in mobile apps?

Here are three easy and straightforward principles we follow. These are easy to articulate but not that easy to implement.

First, we dedicate a great time and energy on the storyboard of the application with a great emphasis on User Experience (UX) and Game Mechanics (GM). User experience is an essential factor for creating great applications and game mechanics/gamification is essential to keep player motivations high. Good examples for good game mechanics are included in Foursquare mobile application and World of Warcraft.

We do benchmarking (for the best applications in the app store), research (we read blogs of the successful application developers and also academic publications such as MIT Technology Review, and all UX and GM related books) and we experiment. Our storyboards are detailed so that any developer and designer can get the whole idea by just looking at them. We use “Minimal Viable Product (MVP)” Strategy which insists to focus on the “core value proposition” and related functions and evaluate others for future releases.

Second, we try to develop a high fidelity prototype as early as possible and do usability testing at an early stage. In this phase we are so open minded that we are even ready to change the whole storyboard if we have a better idea or the application is not perceived to be simple and intuitive.

Third, after our application is live, we continuously receive feedback from our users, continue usability testing and do the neccessary corrections and new additions without sacrificing our principle of MVP (this resembles Kaizen principle).  We learn from our past mistakes and try not to repeate them again. We strongly believe in excellency through iteration.

How do we evaluate UX design of our mobile apps?

This is pretty straightforward. There are three metrics.

  1. Effectiveness: Are users able to do what they intend to do? For example during usability testing are users able to achieve their tasks in their scenario?
  2. Efficiency: Are users able to accomplish their tasks within an appropriate time and with a little cost?
  3. Satisfaction: Are our users happy to use our application? Do they re-use them after a while? For example engagement metrics are a good result for revealing satisfaction levels of our users.
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Common Mistakes in New Product Development

Product development is a multidisciplinary endeavour. Design, engineering and marketing perspectives must be incorporated into the process neatly. Since these perspectives have tradeofs, they frequently contradict. That is why, a balance must be met between these contradicting views. And that is generally the entrepreneur’s responsibility to find the perfect fit. 

I would like to list common mistakes in product development which I either observed or experienced personally during new product development. 

1st Mistake:

Trying to create a product that is superior in terms of “features” is a common mistake. Instead, “simplicity” should be the goal. Each new feature increases the complexity and adds marginal benefits. So when you have a good idea (a new feature to add), hesitation should be the first response rather than adopting the idea quickly. In order to avoid this miskate the appropriate question is: “is it worth adding this feature, which will sacrifice simplicity?”

  • Antoine de Saint-Exupéry accurately highlights this fact: “Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away“. 
  • Pareto principle is also applicable (80% of results are produced by 20% of actions/causes). It is important to find these 20% features and discard the remaining ones.
  • Steve Jobs’ determination on putting a “one button” for iPhone is a good example.

2nd Mistake:

As opposed to common assumption, consumers are not rational when they are involved in a “buy” decision. Rather then finding all the alternatives and decide according the predefined criteria, they satisfice (Herbert Simon), meaning that they select the option that is both satisfactory and sufficient.

Consumers decide which product to buy mostly according to their emotions. So when designing a product, cost-benefit analysis should not be the top priority. Instead, creating a value proposition, concern on esthetics, consideration of the psychology of the consumers and creating a rich user experience should be considered. Most successful designers care their target segments’ feelings (i.e. how do they feel when they buy or use the product? Does the product differentiate their status among their friends and etc).

3rd Mistake:

Responsibilities of marketing professionals should not begin when the product is ready to be launched. Instead marketing people should be involved in the process from the beginning.

New product development is not solely business analysts, engineers or designers responsibility. For example, in a banking industry, when a new software application is considered, the common procedure is that marketing or business development department wants a new product (i.e application). Business analysts specifiy the requirements. Business analysts role lie in between the marketing and engineering departments. Then programmers/engineers code the application, and then they are being promoted by the marketing department.

I insist that the above procedure is fragmented and is not customer oriented. It begins from a customer need (from a marketing perspective), continues with an engineering mindset and then ends with a product that is somehow satisfactory. But in order to meet and surpass customer needs and expectations, customer perspective should always remain throughout the whole procedure.

This mistake prevails especially in big companies and is not common in startups because their concentration is on the single product which the success of the whole company depends on the product and entrepreneur involves in the whole process and be the voice of the customer trying to create value through simplicity and user friendly designs.

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Power of innovation based on R&D

Google has released its earnings statements and set a revenue record at $9.03 billion for the quarter ended June 30, 2011.

In the “Costs and Expenses” page of the following presentation, it is seen that Research and Development costs are 20% of “Total Costs and Expenses” (1,2 billion divided by 6,1 billion) and 14% of total revenues.

2011Q2 Google Earnings Slides

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Rosabeth Moss Kanter’s 3 arguments for favoring partnership

In my previous post with the title: “Solo Entrepreneurship vs Partnership“, I favored having a partner as opposed to solo entrepreneurship, (i.e. solopreneurs).

A few minutes ago, I have seen a tweet from Rosabeth Moss Kanter who is an influential author and Harvard Business School professor whose studies I admire: Three Reasons Everything Goes Better with Partners

As I agree to all of the arguments she has highlighted, I would like to share this article with you. Thanks to Rosabeth Moss Kanter.

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Power and Authority

Power means “the ability to influence people“. For example, if you have the ability to persuade your friends to move in the same direction as you do, then you have the power.

Authority is the “official power“. For example if you are assigned to a manager position where your subordinates are obliged to follow your orders then you have the authority. Military officers have the authority.

French and Raven identified five bases of power as: legitimate, referent, expert, reward and coercive. Legitimate power is authority. For example, police has legitimate power. Referent power arises from personal authority. It can be someone whom you like and want to follow (e.g your role model). When someone has expert power, that means this person has knowledge which others respect. Reward and Coercive power is the classic definition of carrot and stick. It means the person who holds the power to reward or punish has this type of power.

Tonight, I observed my father who has the ability to influence people around him. Regardless of his position (authority), his opinions are highly respected and considered in any kind of social setting. Why?

I think this is due to his integrity. That is; his character, his firm adherence to the codes of especially moral values. He has power because people know that he is:

  • sincere,
  • rational,
  • fair to anyone,
  • has common sense,
  • courage to tell the truth,
  • respect for self, for others and for his actions,
  • dependable because he is honest and ethic,
  • has experience and can apply his knowledge in a logical manner

The people who do not possess integrity, frequently faces with what psychologist call as “cognitive dissonance“. That is, holding conflicting ideas or behaviours simultaneously. For example, trying to deceive someone with an idea which you do not believe.

On the other hand, people with integrity means they “walk their talk“. Those people who have integrity can influence people in a good fashion that is both beneficial to everyone. They are respected and admired. They are “role models”.

Moral of the story: Leaders with integrity have the most desirable power. In order to lead, you must ask yourself first: “know yourself”. second: “Do you have the integrity?”. third: “do you have good intentions?”.

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Seven sins that “engineer entrepreneurs” should unlearn?

I am an engineer entrepreneur. I am proud to be an engineer and I use most of the excellent principles of engineering. But there are some habits of engineering that I needed to unlearn to be a better entrepreneur:

Seven Habits(**) that engineer entrepreneurs should unlearn:

  1. In engineering, there are trade-off’s (*). For example if you increase flexibility you decrease performance, if you increase security, you compromise comfort. But as an entrepreneur I experienced hundreds of situations where customer demanded both speed and quality. Thus, my mindset shifted from “this or that” to “this and that”.
  2. Engineers are trained to evaluate the constraints first, and then work to solve the problem within those constraints. As an entrepreneur, I learned how to change my assumptions and shift my paradigm to see the opportunities in those constraints. I try to change the constraints rather than conforming to the constraints or try to introduce a product/service to the market that makes use of the constraints. Thus, my mindset shifted from “solving the problem within the constraints” to “seizing the opportunities that all those constraints offer”.
  3. As an engineer, I always liked challenging problems. That is like trying to park your car into a very narrow slot where most drivers can not able to park. However, as an entrepreneur I learned that “to be effective” is as important as “to be efficient”. I learnt that grasping the “low hanging fruit”  is not a sin.
  4. In computer engineering, we have learned the importance of “know-how”, in business we have experienced both “know how” and “know-who“.
  5. Leaning the ladder to the right wall is more important than climbing to the ladder of success (even it is in the right wall).  – Thanks to Stephen Covey.
  6. In engineering “failure” means “failure”. In business “failure” is a one step further towards “success”, like losing the battle but winning the war.
  7. As an engineer I can control all or most of the parameters. Thus, as an engineer I try to avoid “uncertainty“. But, as an entrepreneur I learned how to accept and embrace uncertainty. I learned that “chaos after order” is as natural as “order after chaos”. I learned that dynamics of business is not linear, but non-linear.

(*) Trade-off: Losing one quality or aspect of something in return for gaining another quality or aspect.

(**) I apologize for using the word “sin”. I aim to get more attention by choosing the word sin in the header but I choose to use “habit” in the article, which is a more appropriate term.

Posted in Engineer, Entrepreneurship, Management | Tagged , , , , , , , , , , , , , | 3 Comments