Innovation, independence, curiosity, collaboration, character, integrity, tradition, style all its own, authentic, risk takers, hardworking. All words used to describe craft brewing and craft brewers in this wonderful video by Greg Koch of the Stone Brewing Company.

The line I find most telling is,

We don’t put corn in our beer.

When I got over the obvious irony, I got to thinking – the difference between good and great, between ordinary and skippy, may well be the willingness to settle, to compromise, to cut corners, to take out the joy. Crafting the business you want, is a craft business. As they say in the video,

We are all craft brewers.

I love this kind of hokeyness, chapeau to David Meerman Scott for pointing out the video and giving me a little-morning-lift.

Neatly filed under Focus, Skippiness
Tags: beliefs, build

I’m involved in a couple of pricing conversations at the moment that both started, as they always do, with, “How much should I charge for …?”

There’s questions, and then there’s BIG questions? Charge too little, don’t make enough money, go out of business. Charge too much, don’t sell enough stuff, go out of business. So, how much?

For a question that’s been around for as long as business itself, you’d have thought there’d be a pretty good answer by now. Here’s the slightly scientific one,

• Forget sunk costs.
• Work out incremental costs – how much does it cost you to sell each additional unit, including the cost from you’re suppliers and everything you have to do before it gets sold?
• Work out the demand for your product (in units) at every price point you’re considering – this is called a demand curve.
• Find the point on the demand curve that produces maximum total profit (price minus costs times units sold).
• That’s it.

The problem comes in step three, working out how many units you’ll sell at any given price. It seems like a good idea but is, um, practically speaking anyway, most of the time, um, impossible. You can only really do it with actual paying customers (otherwise the data is extremely, by which I mean extreeemly unreliable), and then you need a sample of thousands to get a decent demand curve. And after all that, if you experiment with actual paying customers you run a distinct risk of pissing them off.

So, after all the maths behind all the models in all the books, we’re left with educated guesswork. I bet you knew that anyway.

Pricing for new products is low data. Accept that pricing is inexact and let your first few customers help you find the ball park. After that, work hard and listen hard.

This chart might help. Working from the bottom up, the left side shows that you buy things in from suppliers, add your own costs and sell at a premium over your combined costs, customers benefit more than they paid. The right side shows that your efforts should add value and allow you a healthy profit whilst leaving enough on the table for customers that they’ll be happy they got involved.

If you’re running a business in the pursuit of skippiness, figure out what price lets you reinvest in the organisation and the product whilst keeping shareholders skippy and customers keen to help. Charge that.

(Picture credit – I knocked it up but it leans VERY heavily on one I first found in Strategy Maps by Kaplan and Norton.)

(Whilst thinking about this question I was reminded of the fantastic Camels & Rubber Duckies post by Joel Spolsky on his blog, Joel On Software. Much longer, includes much more theory, really intended for a software audience but well worth the time for anyone struggling to come to terms with pricing.)

Neatly filed under Making Promises
Tags: price

One of the world’s most famous inventors said, “I have been impressed with the urgency of doing.”

Leonardo da Vinci, certainly knew a thing or two about getting things done.

The urgency of doing suggests doing the urgent, which is nothing but a very deep bear trap. Stuff comes up, email tumbles in, do you have a minute? could you …? I’ll just do this before …

All those little urgent nothings get in the way of actually doing something that matters.

Steven Covey says the heart of personal effectiveness is to spend time on the non-urgent important stuff. Putting time into the slow stuff today – like relationships, purpose, maintenance, planning and preparation – means less (quick) time fire fighting stuff tomorrow.

Here’s the full da Vinci quote,

I have been impressed with the urgency of doing.
Knowing is not enough; we must apply.
Being willing is not enough; we must do.

Don’t be so impressed with the urgency of doing that you do whatever comes along. Be willing to prioritise the important.

Photo credit – mallorcaquality who has a bunch of photos showing replicas of da Vinci inventions.

Neatly filed under Managing
Tags: doing

Working in the business to business world I always feel a little bit uncomfortable when people talk about brand. As I’ve said, brand is a (marketing whodoo) word for reputation. Most of us should forget all the clever nonsense of branding and commit to the steady work of building a great reputation.

How to do it? The way you’ve always done it. Everything you say and everything you do – especially, everything you do. Nobody can dispute the power of words, but there’s really no choice between conflicting words and actions. What you do is the give away for who you are.

To build a great reputation – do great things consistently, keep your promises and make sure your feet, wallet and mouth travel together.

Neatly filed under Keeping Promises
Tags: brand, marketing, reputation

Most HR departments do personnel administration, not human resources management.

Back when I was hired for my first job, I spent a few minutes with someone from Personnel who walked me through the mandatory administration tasks to get me on the payroll. Which was nice, obviously. My relationship with that department consisted solely of the monthly ritual of a wage slip passing into my hands.

I’m sure they did other things too. Hiring and firing type things. Working out benefits and salary structure type things. Administrative things.

Personnel departments mostly concerned themselves with hiring and administering good talent.

But it’s not the companies with the best talent who win. It’s not just about hiring well. It’s about nurturing and developing talent, bringing the best out of it, and getting it to work together for a common aim. Winning is about management.

Personnel people worked that out. They invented HR Management and talked about their role as strategic partners with a seat at the leadership table. Personnel departments became HR Management.

HR Management implies something more than handling the day-to-day administrative tasks. It implies the focused development of the expensive, value adding, parts of the organisation to improve performance of the individual and the whole.

Some companies pull it off.

But most don’t.

Twenty years after the revolution, HR departments mostly do Personnel. Working out payroll. Developing procedures not people. Administering not managing. Sitting in on interviews to ensure compliance with policy. Inventing arcane, time consuming, meaningless performance “criteria” that turn appraisals into exercises in form filling.

HR departments are perfectly good at doing administration – so were Personnel departments and so are specialist outsource specialists, probably at lower cost – but not much good at doing what they promise.

So what to do?

To misquote David Packard, HR is too important to be left to the HR department. Let HR do administration (whilst talking about strategy) and stop them getting in the way of humans, resources, or management.

Neatly filed under Managing
Tags: resources