Matthew Kenney

Small Business | Workplace Law

Archives for July 2016

A Serving of Goodwill

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Service providers, imagine you go to a car dealership. You see a new Cadillac and ask to take a test drive. The dealer says “Sure, that will be $29”. The dealer’s logic: He has a valuable asset. What if you drive the car; and use his resources (including his valuable time) but do not buy? The dealer is just being prudent, after all.

Would you pay $29 for a test ride?

Probably, not. Most people would not because marketing requires goodwill on both sides. That is, if you are a legitimate prospective customer (who can afford a Cadillac and is willing to buy) you expect the dealer to extend the courtesy of a test drive.

Now, let’s apply this idea to the marketing of services. Services are different in that once knowledge is shared it cannot, unlike the keys to a Cadillac, be returned. Therefore, if an entrepreneur shared her knowledge with a prospect, and the customer doesn’t buy the service, in the seller’s mind she has lost value (and the buyer has gained something for free).

To avoid this scenario, service providers often ask prospects to pay (often at a discounted rate) for an initial discussion. Do you see the problem? The seller is assuming the buyer will find value in the knowledge; and then apply it for his/her benefit. However, it is entirely possible the prospective buyer will not see and/or appreciate the value in what is being offered.

The point: A service is not like a tangible product, therefore, should not be marketed like one.

For example, visit a quality college and you’ll find employees will eagerly share knowledge with you. Admissions staff, students and faculty will chat with you to explain the school’s culture and offerings, and how they could help you satisfy your personal and professional goals. The emphasis is not on making the sale. The emphasis is on building a mutually rewarding relationship. Would developing this relationship be made more difficult if admissions officers charged $49 for campus tours? After all, only a small percentage of those who visit a college will enroll. Are colleges being exploited? Hardly.

Here is the lesson for self-employed service providers: Don’t operate in fear of being exploited. Yes, your knowledge is an asset. Share it and you’ll build goodwill, and build relationships. Common sense and goodwill complement each other nicely. If you’re concerned about being exploited, it means you have not narrowed your prospect list well enough.

Stated differently, you don’t want exploiters as customers anyway. Narrow your prospects well and work on the assumption a mutually beneficial relationship will blossom. If a few people take your knowledge without reciprocation, so be it. The vast majority of people will be just like you: Honest, ethical, and interested.

Dare to be Wise

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The Latin maxim sapere aude means “dare to be wise”. It was put forth by the Roman poet Horace, but made popular by the influential 18th Century German philosopher Immanuel Kant. As we will discuss below, it does take daring to be wise, but the rewards far outweigh the risks.

Someone can have knowledge but not wisdom. This is because knowledge refers only to possessing information and experiences, while wisdom involves putting one’s knowledge and experience into action. Let us look at this issue from the perspective of Horace and Immanuel Kant. What do you think it was from their experiences that would make them say “sapere aude” or “dare to be wise”?

What possible risks could come from a) acquiring knowledge and b) acting upon that knowledge? Horace and Kant were among the wisest men of their eras. The fact that we are discussing both centuries later suggests that they are among the wisest men in history. Why would they suggest we should dare (i.e. have the courage and boldness) to be wise?

In Practice: Applying Wisdom is Not Easy

The first thing to remember about learning is that it changes us biologically. When we learn new things synaptic plasticity develops within our brains, which results in improved memory and increased cognitive ability. When we learn our brains are physically changing.

Learning changes us intellectually and emotionally too. That is the whole point of learning. What is the sense of going into any training if we are the same going out as going in? Yet, scientists tell us that human beings are resistant to change in general. Some people will not like the changes they see in others who have learned new things. Professionals who want to become change agents might be resented by those who want to keep the status quo. This was true during the Roman Empire and 18th Century Europe. It is still true today.

Horace knew it. Kant knew it. Wise people today know it.

Gaining knowledge and applying wisdom will always be threatening to those who resist new ideas. This fact of our human experience is self-evident. We must dare to be wise. Companies and careers struggle not so much because of what people do. Rather, they suffer for lack of daring. It is good for professionals to remember that career success is not about being popular. It is not about fitting-in with the crowd. A successful career is all about having wisdom. Sapere aude…dare to be wise.

Critical and Lateral Thinking

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A common frustration of new business school students is that professors are trying to teach them “what to think” about business. There are certainly some instructors who make this mistake, but this is not the objective of faculty. Rather, the goal is to help students develop critical thinking skills, and lateral thinking skills.

  • Critical thinking is established when we use a criteria for making decisions and analysis (the words critical and criteria both derive from the Greek word kritērion, defined as a means of judging).
  • Lateral thinking is the process of problem solving through creativity and non-traditional approaches. Imagination and possibilities are emphasized over step-by-step approaches.

Most people will have a natural inclination towards one of these approaches. Therefore, when instructed in a style using the opposite approach it might feel as if they are being taught what to think. In reality, they are being taught how to think critically and laterally. The ability to blend critical and lateral thinking is essential to career success, since it is a key element in seeing things from different perspectives.

It is important to note that professional educators tend to view critical and lateral thinking development as a career-long process. For example, the two most influential management educators of the 20th Century, Peter Drucker and W. Edwards Deming, were researching and publishing well into their 90’s. Albert Einstein worked on his Grand Unification Theory until the day of his passing. It doesn’t matter if we are learning how to think about management or the universe. To an educator, there is always an opportunity learn more about one’s chosen vocation.
                                                                                                                                                                                                                                                                  Do any of us know more about our fields of endeavor than Drucker, Deming, or Einstein knew about their fields? If they never stopped sharpening-their-edges, why should we? These men are not icons by accident. They gave us a formula for success: Choose your vocation wisely, and know as much about it as possible. Learn a little more every day; apply what we have learned, and good things will happen.
                                                                                                                                                                                                                                                                  When presented with new knowledge from professional educators, however, it is not uncommon for some people to reject it believing they are being told “what to think”. Understanding the mission of educators, however, removes this incorrect perception. The goal of a competent educator is not to tell people what to think. Rather, it is to help people think critically and laterally.

 

Entrepreneurship Lessons from Savannah

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If you are interested in architecture, design and/or American history…visit Savannah, Georgia if you have a chance. It is a charming city that regularly wins awards for its civic planning. It is also a great place to visit if you are interested in entrepreneurship. Understanding what makes Savannah successful means understanding what makes companies successful.

It might not shock anyone that Savannah regularly wins awards for urban planning. What might surprise people, however, is that Savannah’s plan was implemented in 1733. Savannah hasn’t changed its plan for nearly 300 years and is still winning awards. That is a good plan.

Georgia was the last American colony (#13) created prior to the American Revolution. It was also the only colony founded upon principles of the Age of Enlightenment. Georgia was founded by James Oglethorpe, who made Savannah the colony’s capital; and created the civic plan that is followed to this day.

The Oglethorpe Pan is based upon small neighborhoods of 8-blocks (called wards) built around scenic central squares. If you have seen Forrest Gump, the park featured throughout story (when Forrest recounts his adventures) is Oglethorpe Park in Downtown Savannah. When Union General William Tecumseh Sherman was burning Georgian cities, including Atlanta, on his march-to-the sea, he spared Savannah because of its beauty. He wrote to President Lincoln on December 22, 1864: “I beg to present you as a Christmas gift the City of Savannah…“.

In Practice: Lessons From Savannah

Savannah has thrived – in part – because it has stayed true to its founder’s vision and model. The city has changed, of course, over the centuries. It was occupied during the Civil War. It burned down…twice. It has shifted from an agricultural, to a manufacturing, to a service-based economy. It has changed a lot, yet it has stayed the same.

If you understand this paradox (simultaneously changing while staying the same), you understand why enduring businesses survive. It is similar to the beautiful oak trees, with their hanging Spanish moss, that populate Savannah’s public squares. Each mighty oak was once a humble acorn. That acorn is the oak. The oak is the acorn. They are not two separate things. They are one thing at different stages of development.

If you can hold an acorn and envision a majestic oak, you get it. If you look at an oak and envision the acorn within, you get it. You get what entrepreneurship is all about. To an entrepreneurial mind there is no distinction between the oak and acorn. They are one-in-the-same. Companies are similar in that within every large firm must remain the energy of the original start-up. That entrepreneurial spirit must be infused throughout the company. When present, companies will grow.

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