The PT Challenge

There are no rules that fit all situations. (Check the Ten Commandments if you don’t believe this.) Our businesses and our lives are too complex for any simple guidelines to be 100 percent appropriate in all cases. This is not meant as an inducement to break very basic rules, such as core values. It means that when your beloved rule comes smack up against the fact that it’s holding back progress, you should at least be willing to question whether the rule is still appropriate or whether it’s some kind of holdover.

You will not be struck down if you break the rules. (You may be fired, however.) This means that it’s worthwhile to weigh the risk of breaking any particular rule against the payoff of doing so. On the other hand, don’t worry about “getting into trouble” if you’re sure that your rule breaking will help deliver the goods. (See the discussion of permission later in this chapter.)

You don’t have to be “the best” to make up your own rules, although it does help if you are. A certain amount of experience and insight is attributed to those who are the best, and if you are considered the best—at the top of the heap—it gives you a great deal of credibility and insulates you from a lot of backlash. On the other hand, making up your own rules may enable you to be the best.

Rule breakers are not lawbreakers. (Not necessarily, anyway.) Know the difference. If you find that breaking the rules will in fact break the law, and you still plan to break the rules, make sure that you are going to do so for a very good reason. Almost all of the time—unless you are deliberately setting an example or fighting for social change—it would be better to find another way of getting done whatever you are trying to do.

Break rules when your new approach will make you more effective, or when the old rules are simply not effective at all. Otherwise, why are you breaking the rules?

Leaders are typically more comfortable with breaking rules than the people below them are. In fact, that’s a big chunk of what makes them leaders. Encourage your team to question rules that aren’t supporting your organization’s goals. By itself, this will help turn them into leaders.

Knowledge doesn’t make something right. There’s an old saw that if you don’t know that there is a rule, you don’t know enough to break it. This is nonsense and has nothing to do with rule breaking. Understand the situation you are in. Figure out why things aren’t working and base your next actions on what will work. Of course, it helps to understand the prevailing environment, and you may try to avoid wanton rule breaking just for its own sake. Also, stepping on too many toes may be a bad idea in your company, and you may want to see if there are other, less contentious ways to go about achieving your goal. But in the end, if there’s a rule in place and you inadvertently break it, see the next rule.

“It is easier to apologize than to get permission.” Admiral Grace Hopper, the inventor of the COBOL computer programming language, said this. This august woman broke so many rules that it would make your head spin. If you ask for permission first, are told no, and do it anyway, you’re really in trouble. So if you want to get anything important done, make sure not to ask. If you’re certain that you’re right, go ahead and do it. You’ll probably find out more about the penalties later.

The rules for who should and should not break the rules are as follows:
novices do not know the rules; amateurs know the rules, but have trouble
following them; pros know the rules and can begin to bend them as
necessary; and geniuses, who know the rules, break them, create new
rules, and break those as well. Each of these people can break the rules as
necessary. Even novices are allowed to break the rules, as they may have
radically effective propositions based on their innocence.

—Anonymous

Creativity does not have to result in rule breaking. There are all sorts of ways to improve your results inside of the current rules, especially when those rules “make sense” and are working well. But most of the time, creativity does result in rule stretching.

Just because you break the rules doesn’t mean you’re a genius or an innovator. Rule breaking may produce no valuable results whatsoever. On the other hand, breakthroughs never happen without rule breaking. It’s part of the definition.

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Anybody can break the rules. Rule breaking does not require any special status or title, like “manager” or “leader.” The lowliest person on a team can become an effective rule breaker if she is given just a bit of leeway, as long as she does not believe that she will be punished too harshly as a result.

Rules are good only when they produce results that support a company’s aims and goals. Otherwise, they’re  bad rules. This Anybody can break the rules. Rule breaking does not require any special status or title, like “manager” or “leader.” The lowliest person on a team can become an effective rule breaker if she is given just a bit of leeway, as long as she does not believe that she will be punished too harshly as a result. Rules are good only when they produce results that support a company’s aims and goals. Otherwise, they’re bad rules. This is the only true evaluation of a rule: does following the rule bring a company closer to realizing its aims and goals? If it doesn’t, it is a bad rule and should be abandoned.

Good rules are in place to keep order, structure, and process and to maintain predictability. Bad rules are there to make someone’s life easier in some way. Rules can (and do) easily change from good to bad over time. It helps to know why a rule was put in place so that you can understand the unintended consequences of breaking it. But no matter what, you absolutely must know why you are breaking it.

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The biggest constriction on thinking is the existence of rules, so the first thing that unreasonable people in organizations must do is develop a healthy understanding of what rules are and what it means to break them. That way, when the time comes to break these rules, they aren’t afraid.

Being unreasonable does not mean you should ignore the past and everything that has gone before. Rather it means accepting that your old rules were developed over time for a good reason. For the most part, these rules have worked and resulted in something valuable, but for whatever reason, they are no longer working. Here’s the problem: you’ve grown to know and love the rules, and even if you hate them, you are comfortable operating within them. The very human drive to accept rules is deeply embedded, honed through millions of years of evolutionary pack behavior. Accepting rules has a strong survival value for our species, and violating this principle meets with distaste. Breaking rules is, at a very deep level, contrary to our nature. Thus, to break rules requires rules for rule breaking.

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In being unreasonable, you seek to become aware of those boundaries that confine normal, acceptable behavior, and then deliberately step beyond them. This is not about getting outside the box. The unreasonable businessperson doesn’t consider the existence of the box in the first place. It is not about breaking the rules. It is about abandoning the concept of rules altogether. It is not about codifying anything that could quickly outlive its usefulness. It is about finding more productive, more effective, and more flexible forms of behavior—ones that promote your immediate agenda; while they could have lasting value, they are just as likely to be good for this moment alone. To wrap your mind around these new ways of being requires having new thoughts. Creating new ideas, perhaps from bits and pieces of old ones, perhaps in ways more like pulling them from Carl Jung’s collective unconscious or Ernest Holmes’s Universal Mind, perhaps making them up new out of whole cloth.

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There are surely others, but this little list includes the bulk of them.

Let’s face reality: no matter what you plan now, when the time comes to exit, you may think differently. We all know that most plans never reach their end states. These are guidelines, but they are critical to how you structure your business. Each of these exit strategies requires you to create a certain kind of structure, follow a certain path, and take certain steps in order to achieve the end you have in mind. The first step in any strategy is to define your goals and objectives, and your exit strategy is your ultimate objective.

Do the unreasonable: run your business by knowing how you want to leave it. Begin it at the end, and you’ll have a clearer sense of how you want to get there.

People worry about the how when they should worry about
their commitment.

Author Peter Block says that people’s tendency to figure it all out up front is really a wish for safety and predictability. They worry about whether something is possible rather than about whether it’s worth doing. Once you’ve chosen to go forward, Block suggests, there is a period of anxiety, a continual nagging worry that would not be present if you’d taken a tried-and-true approach. That’s a good thing. Be worried. Be anxious. Be scared. A friend of mine relates a story about how he precipitously decided to quit his comfortable job and jump into a completely new line of consulting work. Within three weeks of making the
leap, he found out that his wife was pregnant with their first child. All of a sudden there was much more riding on his decisions. Some people lamented his unfortunate timing. My friend says that, in hindsight, the timing couldn’t have been better. Had he been worried about feeding his family, he might not have made the jump. The additional mouth to feed lit a fire in him that hadn’t been quite there before, and the anxiety worked for him rather than against him. Because of his newfound motivation, he was willing to try absolutely everything, and to keep trying things until he found something that worked. He had no commitment to his approach, only to the guiding strategy of building this new business, serving his new clients, and reaching
his goals.

You’ve crafted your unreasonable strategy, one that is going to break your business wide open. Next, you should spend a little time thinking about your thought process so that you can be prepared to make decisions on the road ahead.

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An example. One of my clients owned a software business worth $2 million, which he wanted to sell. What made it tougher was that he wanted the business to be worth 10 times that amount within three short years. We unreasonably decided to find the very best possible acquirer—the one that would benefit the most from his company—and craft the business for that acquirer. The first thing we did was to study his marketplace and look for public companies that would receive a substantial increase in stock value from being in my client’s market. Then we did a thorough examination of his business, looking at his product development process, sales procedure, company positioning, revenue model, and so on. As we examined each piece, we asked, “Does this contribute to a business that big, or does it detract from it?” If it contributed, great. If it detracted, we figured out ways to improve it. Once we knew the companies that might be interested and the
improvements the client had to make, we put all that information into a plan, which included listing the ways my client could get on the radar of the public companies. He started to work on the plan. He worked hard.

In three years, though, he pulled it off. One of the companies he had targeted bought his, making his share of the company worth the money he was looking for. My client cashed out.

Now, you might think what I just wrote about is crass. It’s all about money, money, money. In all this talk about cashing in on an exit strategy, where does developing good products and services fit in? My answer: that’s up to you, but know that you probably won’t realize the value you seek without them.

If developing a leading-edge company is part of your exit strategy, then make it one of your design parameters. Just be certain that you define exactly what “leading edge” looks like. Will you control the market? Will you be on the cover of three industry magazines within six months? Will certain gurus proclaim you “the next thing”?

I pick monetary gains because they’re easier to measure than praise. What’s more, if you cash out with the cash you want, you can use those funds to bankroll the next company you want to start. I’m a serial entrepreneur, so for me, that’s important.

The whole concept of “exit strategy” can be broken down into a few categories:

• Sell your business to another business or group of investors.
• Go public and relinquish the burden of ownership.
• Transform the business into a cash cow and run it until you die.
• Duplicate it, as in licensing or franchising, and extract much of the wealth in advance.
• Give it to someone else, like a child, a relative, or a highly valued employee.
• Just shut it down.

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P. T. Barnum, the nineteenth-century showman, owned a lower Manhattan dime museum. There he displayed oddities, including wax figures, mummies, totem poles, a two-headed calf, and the famed “Fiji Mermaid”—a stuffed creature that was half fish, half monkey. Each exhibit seemed more remarkable than the last.

Down one corridor in the museum stood an ominous-looking door with a sign hanging above it that read, “This Way to the Egress.”

You can imagine the patrons’ anticipation: “Egress? What’s an egress? Is it a bird as big as a horse? Is it a native in a loincloth? Whatever it is, I’ve got to see it!” When they pushed through the door, they were surprised all right; they found themselves standing in the street! The great Barnum had hoaxed them. The word egress comes from the Latin word for “exit,” and they had been tricked into leaving the building.

Now, I’m not sure I like Barnum’s idea of tricking people into leaving. But what I do like—no, make that love—is his idea of making an exit into something of an attraction. Exits should draw you to them, especially if you’re a business owner. Let me explain. If you own a company, you should know how you’re going to leave that company as soon as possible. I’m not talking about physical exits. I’m talking about exit strategies.

You might think it weird to include how to leave the business in a chapter on business strategy. It has been said by some of the best minds in history that the surest way to reach your goals is to first know what they are. It’s another application of the Merlin Method. And in the spirit of beginning with the end in mind, it is crucial that you have a concept of how you’re going to finish the thing you are now starting.

Even if you’re just launching your business—even if you’ve only been in business for a day—you should have an exit strategy, and that strategy should be as clearly defined and as exciting as Barnum’s famous “egress.” An exciting exit strategy acts as your business’s guiding light. It keeps your biggest payoff clearly in view. It guides your day-to-day actions. If you have an exit strategy that drives you, all you have to ask yourself is this question: “Is what I’m doing leading me toward the exit I want, or away from it?” If what you’re doing is leading you toward it, you act. If what you’re doing is leading you away from it, you change what you’re doing.

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It’s not your tactics that need a long time to work, it’s your strategies.

Being flexible is at the core of bringing your strategies to fruition. While some people deride this as spinelessness and worry about what Wall Street or the investors will think, we applaud it as nimble. You have to be willing to assess the situation and turn on a dime when you are sure that your tactics aren’t working. In fact, the ability to change quickly—to substitute one tactic for another, or even one strategy for another when necessary—is a cornerstone of success in the twenty-first century. Keep the good for as long as it’s working but immediately ditch everything that isn’t good. Tactics. Machines. People. Clients. Everything.

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One of my clients called me in to help stabilize his company at a point when it looked like the entire market was collapsing. This was right after September 11, and the management team was running scared. Nothing that had previously worked was working any longer, and the team was desperate—desperate enough to consider throwing in the towel but willing to give it one last shot. All tactics were completely up for grabs; the only things that remained intact were the company’s core values and its seemingly quixotic goal of doubling revenues. First we redefined the company’s view of the perfect client. From there the company shifted its product positioning to appeal to those clients and crafted a new financing structure that addressed the market’s increasingly poor profit picture. At this point, the management team was so far out of its comfort zone that it could barely breathe. Lastly, it revamped the company’s marketing program from top to bottom, fired its outside marketing team, created a set of sizzling marketing material designed to appeal to the new client picture, and developed several new (well, new for them) approaches to getting it into prospects’ hands, including conducting miniseminars and using FedEx to deliver direct marketing appeals. Revenues didn’t double that year, but within three years, profits were up 400 percent.

Be like this client, and get far—very far—outside your comfort zone. This may not be necessary when your business is humming along, but it is definitely necessary when it is not. Then get out of the comfort zone and be willing to change those tactics that aren’t producing for you.

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But tactics can’t be true in the abstract. They have to be true for you, and they have to be producing the desired results. If they aren’t, you have to change your approach, and quickly. If you aren’t reaching your goals, it’s not because they’re bad goals, it’s because your tactics aren’t working.

People talk in terms of working harder versus working smarter, and it’s important to figure out which to do when. Sometimes the tactic is working, and all that’s needed is more of it. More focus during the workday, more hours on the job, more people on the job. That’s working harder. But when the tactics don’t work no matter how hard you work them, something else is called for—and fast. This is where the idea of working smarter comes in. Working smarter simply means finding things that, in fact, work.

If you’re having problems reaching a goal, it might be because you’re sticking with a tactic that no longer works. Many sales firms, for instance, still use cold calling as their primary method of prospecting, although new laws are shrinking the practice’s effectiveness. Rather than showing allegiance to a tactic, even one that has worked for you many times in the past, it’s best to keep your eye on your goal (e.g., to increase sales by 15 percent) and see what fresh tactics might help you hit it.

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