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Change Is Hard

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The toughest challenge any creative business owner faces is how to affect change.  For those of you who have been in business for a while, old habits are deeply engrained in both you and your employees.  Resistance comes in many forms: people feel threatened, resentful, incredulous or overwhelmingly distrustful that any real change will happen.  For those who are relatively new in business, change can feel like trying to move in wet cement.

No doubt, change is a tricky proposition.  Go too far too fast and you risk undoing whatever foundation may exist.  Don’t go far enough and the change likely won’t stick.  President Obama is certainly staring down the barrel of this dilemma on a number of fronts.

My underlying philosophy is this:  a terrible system run well is always better than a fantastic system run poorly.  However, no system is a time bomb.  Most creative businesses start at the kitchen table or garage.  As the art becomes more popular, they move to an office and the artist takes on employees.  The employees usually are clones of the artist — everyone does a little bit of everything.  Then the business reaches the point where there is just too much for any one person to handle.  Usually this is where the no system time bomb goes off and either the creative business matures, regresses or dies.  I like to call this point in a creative business the inflection point.  Change will happen here.  The question is whether it will happen to you or by you.

The first place to start is with one of the immutable laws of business — the division of labor.  Everyone’s role in your creative business has to be defined, as does the interaction of that role with the other players in your business.  The concept of master-servant, task master-task doer, has to be replaced with the integrated team approach if your business is to move ahead.  Everyone in your organization has to realize that their role (including yours) is no more important (and as important) as the next person.  Take any design firm, at the beginning the sales person is the same person as the designer is the same person as the producer.  Then there is a person for each job and everyone is involved in everyone else’s job.  At the inflecton point, doing someone else’s job becomes incredibly counterproductive and the breeding ground for rampant ego. 

If there is no system in place at the inflection point, your primary role has to be to create one — assign roles and set out how the roles work together to deliver the product/service.  The best way to create the system is WITH those that will  be responsible for running it (not you).  The only caveat is that your business is not a democracy and ultimately the decision is yours as to how the business will run (i.e., you are ALWAYS the tiebreaker).  In this instance, radical change should work as any order will be better than the current state of chaos.

If there is a system at the inflection point, but it reflects the clone approach (i.e., lots of “account managers”), then it really isn’t a system, but is much more difficult to change (i.e., old habits).  Here the change has to be a tweak of sorts and A LOT of highest and best use of your time conversations will have to happen.  Your staff has to do the job they were doing, but have a new sense of priority and boundaries.  You want to get the buy-in of the toughest nut to the new order of things.  Make that person’s life easier with better structure and the rest will likely follow.

Value

mardi-gras

Last Friday, I had the honor of presenting (for 3 hours no less!) at I.S.E.S. Eventworld 2009.  The title of my presentation was “Who Are You and What Do You Do?”.  I gave a similar presentation at W.I.P.A.‘s Southern California meeting in July.  I got an inordinate response at both events when I discussed the two pictures above (found thanks to the incomparable Trisha Hay) and thought it important enough to share them here.

For the picture on the right, who would you rather have as a client?  The little girl or her Dad?  Would the picture look the same way if there was  Anime on the wall?  Simple, in order to price well you have to define who you are and what your art is all about.  The right client who values your art needs to be able not only to find you, but also resist the pull of your competition (pun intended).  Seems obvious, but I can not tell you how many times I hear that “we want to have something for everyone” or, “in this economy, we just don’t want to turn anyone away.”  Umm, no you don’t and yes you do.

The image on the left is a little more subtle.  It is a picture of a Mardi Gras float on Fat Tuesday.  What do you think the crowd would pay for the beads being thrown from the float?  What do you think they would pay for them on Wednesday morning?  When would you like to be selling the beads?  If you know who you are and your relevance to the current state of the marketplace, you can place an appropriate premium on the value you deliver.

Last, did the Great Depression kill the ice block business or did the advent of the electric refrigerator?   If you really know who you are and what you do, you will be able to adapt when circumstances change.  In the case of ice-makers — shift from iceboxes to selling ice cubes to bars and restaurants.  Value is how and where you define it.

Deal Making 101

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I love making deals.  I am a born negotiator and am always looking for ways to bring people and businesses together.  For me, it is all about creating something totally new and unexpected. 

The best deals are the ones where both parties get it and are courageous enough to step into the unknown.  For the most part, these deals just happen as if they were always meant to be.  The harder I have to work to make a deal happen, the worse it usually turns out to be.  Which brings me to the fundamental premise underlying all transactions I work on:  make sure the other side gets what they need.

For creative business owners, the tendency is to think mostly about the immediate and obvious return in a deal for your business and not what value will be created for the other side.  Without walking in the shoes of your potential partner and what you can do for their business, you can’t fully understand the leverage the deal will bring you beyond the deal itself.  Which, of course, brings me to the larger point:  the best deals set the platform from which you can leverage your business into larger, more diverse deals.

Vera’s perfume deal is a great example.  It established her potential as a lifestyle brand which opened the door to her licensing empire.  Same can be said with Phillippe Starck and Baccarat.  His design took the centuries old crystal manufacturer and gave it edge.  The Baccarat deal was a big piece in establishing the strength of his brand in hotel and residential design.  And not much has to be said about what the Kmart deal did for Martha or Target for Isaac.

Lest you think that what I am talking about applies to large, international deals, think about Emeril and Rachel Ray, the first time they each appeared on the Food Network.  Everything starts small.

Finding The Best Leverage Point For Your Brand

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No question, every creative business has to market to those that will use your business and/or refer your business.  Most of you do this through the traditional means — advertising, PR, Social Media, etc.  You try to differentiate yourselves as best as you can to your potential customers through imagery, customer service and your unique value proposition (i.e., you are the only photographer in the area who shoots film).

However, as competition gets more intense, your ability to rely on these methods become strained.  Simply, everyone is doing the same thing, and everyone looks good.  One response (and a good one) is to have a third party validate your business, whether paid or not.  In the wedding world, that is the role of The Bridal Bar or Style Me Pretty’s Little Black Book.  In the interior design world, Design Sponge.  However, by definition, your access to these third party validators is limited.

Another response is to find a better leverage point.  The key is to find a leverage point where your business stands out and where others cannot.  Forge an exclusive relationship with an unexpected partner that will bring value to both of you.  For instance, a wedding planner could educate a great restaurant with no event business how to do events well in exchange for becoming its exclusive planner.  A photographer doing the same for a restaurant could offer to shoot the space for free.  A stationer could create custom stationery for all guests at a small inn or hotel in exchange for becoming the exclusive stationer for all events.

These relationships may not be easy to forge, but what they offer are distinctive and continual exposure to your art without an empty promise on the other side.  What your creative business provides to the partner is access to a previously inaccessible market.  The hope is that if the relationship is successful, you will be able to replicate it either in your local market or beyond.

If nothing else, you will be able to point to the relationship as evidence of your legitimacy.  Given today’s ultra-competitive landscape, having the ability to say that your creative business is an “exclusive” provider can only be to your advantage.