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June 18th! Has it really been two whole weeks since my last post? Er, well, one year and two weeks to be exact. That’s a serious case of writer’s block… We can blame that on ramping up at the new job, some time consuming responsibilities with my church group, some new responsibilities with the UVU Alumni Association, and me just liking to spend the little free time that is left over with my family. However, the kids are in bed, my wife is in the other room painting, and I decided that there was no time like the present to try and make an effort to jump back in the saddle.

I have read/am reading some very interesting books over the last year. I finished Atlas Shrugged, which just blows your mind these days if you chase each reading session of the book with a session of the national news. Scary in its accuracy. I’ll try to put together a post on the book later like I have done for my other reviews, but it is a pretty long and complicated book, so I’m not sure how it’s going to come out. I’ve also been reading The E-Myth and the 5000 Year Leap. I’ll do separate posts on each of them when I’ve finished. I also think I’m going to dare to delve just a little into the political realm here as a means of exploring to refine my own philosophy and viewpoints, hopefully through a little interaction and discussion with readers.

I think I’ll close out today’s post with a little nugget on lawyering as a corporate attorney. Educate your business people on the ins and outs of contracts. Challenge them on their understanding and take time to explain the impact of specific language, provisions, and terms. Most importantly, find a way to do this in a way that is very relevant and clearly valuable to them. Even though you are in-house, you still have a client and you’ll get less resistance from them if they are confident that you fully understand their pressures and objectives, and if they fully understand the value of what you are protecting with your changes. Often the value you are preserving is only visible in the medium to long term, so it takes a kind of constant dialogue to help keep that notion in the forefront of the business mind. If you are a small business owner dealing with attorneys, take the time to really own your agreements by going over them until you understand the anatomy of an agreement and the effect of each part. Don’t be afraid to ask your attorney questions. As much as you can, try to compile and/or use use standard agreements from your attorney. That will not only decrease review time for your agreements, it will also help ensure that you are bound by terms you feel comfortanble with.

The World’s 50 Most Innovative Companies Interactive Scoreboard

And here is an article about the scorecard and its findings. 

 I was a little surprised at first by a few of the names on here, for example AmEx and CostCo. It just shows goes to show how some companies can do such a good job of innovating processes behind the scenes while providing customers with the comfort and familiarity of the front end that they know and trust.

I went to a seminar by the World Trade Association of Utah today. The Speaker was Lee Boam. Lee spent his career with the US foreign service working in Europe and Asia, and spent the latter part of his career as the Minister Counselor for Commercial Affairs at the American Embassy in the People’s Republic of China. His faculty page at the University of Utah is here.

Below are some notes I took from his presentation on the present and future of China:

1. Misconception: China has huge demand because of its huge population. The problem is that population does not translate directly into market demand. Demand equals desire plus disposable income, and the bulk of the Chinese population does not have the kind of disposable income that westerners have.
2. China needs to stimulate domestic demand – they get no residual benefit from exported goods. For example, industrial machinery made in China and exported is not used to create more products in the Chinese economy, but is used to create products in a foreign economy, which increases GDP and employment in that country.  
3. China is making other people’s brands – When the brand has strong value, the company is thus able to produce more inexpensively and sell at the same price, pocketing the difference as extra profit. China ends up with a smaller piece of the pie and needs to create strong brands for itself to increase the take-home value of its work.
4. China needs to stop piracy – Two  US firms have different strategies to combat piracy: a) Coke Method – be able to produce your product cheaper than the pirates, leaving no incentive for them to compete; b) Budweiser method – Budweiser puts hard-to-counterfeit milling around the edge of their cans, making it harder and more expensive for pirates to counterfeit, and thereby creating a deterrent.
5. De-link the RMB (Chinese Renminbi) from the USD (US Dollar) – they are building up too large of a reserve of dollars and the linked currency is hurting them.

So, what does this all mean for US businesses who have been hearing that you have to be in China to compete? I think there are a few lessons to be gleaned. The first is common sense – there is no magic bullet for industry success, so don’t be misled into believing that that’s what China is. If you are looking for a big foreign market to enter, don’t go for China because you think you just have to sell one product to each person and you’ll be wildly successful. Do the research first and find out how big the actual population is that has an interest in your product and the disposable income to buy it. You may well be better off hitting the European market first. The same is true of purchasing goods. Yes, compared to the US, goods and labor are relatively cheap in China. However, Lee advised that a few places, including Vietnam, are even cheaper. In addition there are factors to consider besides cost in determining suppliers, including the ease of obtaining satisfactory import documentation, consistency of product, ease of communication, and so forth. Another lesson may be that there may be solid business opportunities within China for those adventurous spirits willing to go the extra mile.

As you can tell if you are a return visitor, I changed up the look of the site – primarily adding a third column and changing the color scheme –  and would love to have comments. Does the third column make it seem too busy? Overall impressions? And what’s more, a site logo is somewhere in the works, thanks to my great friend and resident creative genius, Curtis J. Morley. Stay tuned on that one.

When I checked out my Google Analytics page recently, I discovered that someone had found their way to the site by means of the following search: “explain how a small business owner might apply critical thinking skills to a non-legal problem.” I have no idea what particular non-legal problem that reader was wrestling with. Frankly, I was pretty amazed by the number of words that Google search contained! That reader probably didn’t find what they were looking for here (yet!), and probably won’t find their way back. However, it gives me an interesting subject on which to opine for a couple of lines, so here we go.

Now, let’s start off on the right foot. The word critic has been defined as: “one who expresses a reasoned opinion on any matter especially involving a judgment of its value, truth, righteousness, beauty, or technique” and comes from the Latin criticus, or Greek kritikos, meaning “able to discern or judge.” The first step in successfully implementing critical thought in your small business is learning to think critically about it. It is important here not to fall into the trap of thinking of criticism as principally negative – it is never helpful or productive to think negatively about your business, hence the definition given above. The key is reasoning, discernment and making correct judgments – those are all positive things and best done in a positive mindset.

In a previous post, I summarized a presentation I gave to some law students at BYU. One piece of advice I gave them was that a Juris Doctor degree is very versatile because in addition to the valuable subject matter, law students more importantly learn to think critically about actions and transactions. In first year law classes this takes the shape of learning to interpret the law from court decisions. Ultimately, people expect lawyers to be able to anticipate what the likely outcome will be of a dispute under the law and given their particular circumstances. To begin to do this, law students have to learn to identify the key principles in a published legal decision so that, when faced with a similar but different fact scenario, they can reliably determine how the judge is likely to apply the law. A deep familiarity with the published text of the law is helpful, but unless a lawyer has a strong ability to think critically about that text and relate it to the facts, he or she is not going to be able to discern what the outcome of the case should be, which is the lawyer’s role.

I think a neat little summary for effective critical thinking is the following: think broadly, think deeply, but don’t forget to act. 

Think broadly 

Perhaps one of the most important aspects of thinking critically about a problem, legal or non-legal, is being aware of one’s surroundings, or thinking broadly. Much like players on a sports team need to be aware of the location and actions of their fellow players, lawyers and managers need to be sure to actively account for peripheral issues when thinking about a challenge their business is facing. A common temptation for law students, especially in this age of digital search tools, is to go right to the sought-after word or reference in a decision, read the text there, and base their assumptions on that excerpt. The danger in this approach is that, although it saves time and will often give you some reliable direction, there are often many other factors that may affect the importance or interpretation of that principle in the final decision.

By the same token, successful managers and critical thinkers keep their eyes open for peripheral issues that may affect the outcome of what they are trying to achieve, even though the relationship between the two may not be readily apparent at the outset. Many times, significant opportunities and threats for an organization lurk in this periphery. The tech giants have certainly shown that they know how to do this as they seem to have expanded in every direction along the value chain. Thomas Friedman, in The World is Flat, describes how UPS has thought broadly about its business opportunities and has gotten involved much more deeply in its clients’ operations than merely delivering packages. It has developed facilities where it repairs electronics; stores, selects and ships warehoused goods; and operates branded delivery trucks for its clients. Even when successful businesses do not engage in activities from the periphery of their industry, their broad perspectives make them acutely aware of what is going on around them and how they will be affected.

So, how can you widen your perspective? Look through trade magazines from related industries (start with your suppliers, customers and competitors) keeping an eye out for synergies and conflicts. Join a trade association for your industry. Go out for lunch for a change, and take someone with you, such as your primary outside lawyer, accountant, business consultant, or a client or supplier. For the price of a meal and with a few appropriately inquisitive questions, you can often get valuable insights into what issues are on the minds of others in your field (for more on this, check out this post).

Critical thinking does not preclude the ability to act on on intangible evidence, such as a “gut feeling” about a decision. Such intuitive impulses may be instinctual or may in fact be the result of alot of “behind the scenes” analysis your subconscious has conducted based on your perceptions. In fact, such intangibles are very valuable and such innate skills are often possessed by great managers. However, good critical thinkers know how to put that intuition in its proper perspective, consider it in light of the other facts they have gathered and make a reasoned decision – resisting the temptation to simply always follow one’s gut feeling because it is easier. Indeed, one of the hallmarks of effective critical thought is the ability to properly gauge the importance and relevance of each factor affecting a decision.

Think deeply

Chess, at least with the rules one typically plays with in the US and Western Europe, has been around since the 1500s, and some others have been around much longer. One reason this pastime is so persistent is that it helps teach and train the mind in thinking deeply. In chess, success depends on much more than your familiarity with the rules of the game and the ability to perceive what your opponents are doing with their current actions. Players will very quickly and consistently end up in check and mate if they only focus on the present state of the game. The essence of chess is to play the game out in your mind far in advance, looking for trends in your opponent’s movements that will give you the chance to think many moves ahead, which is the key to winning. Chess master Garry Kasparov is reported to have said that chess champions generally think 5 or more moves ahead in the game, and are capable of much deeper thought than that.

Thinking deeply about business problems should be approached in much the same way. We ought to pause just a second before making decisions in our business relationships. Leaning on the wider perspective you have developed by thinking broadly, think through your action. How will your clients perceive this action? Your suppliers and competitors? How are they likely to react? What impact will their reaction have on you, your industry, or other you do business with? You also need to look at such questions over the short, medium and long term. What will be the short vs. long term effects of your decision? If the short term is positive, but the long term potentially negative, are there additional actions you can take to minimize the negative impact so that you can preserve the benefit you get in the short term?

This kind of thought, practiced regularly, leads to the development of a master plan for your small business. It will become less of a “I wonder what will happen today” and more of a “I’m on schedule to realize my goals and desires” type of venture. Of course, you cannot predict every twist and turn in the development of your business, but thinking deeply about it and charting its course out several steps ahead gives you a map to follow. Much as a ship on the sea can be blown off course by strong winds and find its way again with the aid of a map and navigational tools, you will be better prepared to re-orient your business processes in the facing of a changing, industry, economy or regulatory environment if you have thought through a path to where you want to go. On a smaller scale, you will also be able to more easily handle more limited issues, such as simple conversations that could become confrontations, if you think through the conversation beforehand for a few minutes, try to anticipate the reaction of the other person, and plan your questions and comments accordingly. Much of the most painful regret felt in this world could have certainly have been avoided if one or more of the persons involved would have thought things through more thoroughly.

Don’t forget to act 

But won’t all this thought and analysis paralyze my business decision making? Aren’t complicated decision-making processes one of the factors that tend to slow down big organizations and make them less nimble? And won’t that tend to keep an enterprise from being able to effectively seize the advantage of being a first-mover in an industry? These are all valid concerns, and my final thought on critical thinking is to remember that it is but one part of your business process. As too much of any good thing can be unhealthy when it precludes you from taking part in other good things, it is often very easy to fall in the trap of over-analyzing issues. This over-concentration leads to paralysis and indecision. As with all parts of our lives, we have to learn to find the approprate balance for our organizations between analysis and action.

The first key is to remember that we generally cannot and will not uncover all relevant factors to our business decisions. This is a limitation in such wonderful and time-tested concepts as the scientific method. It is impossible for us to anticipate or perceive all relevant factors, and the law of diminishing returns teaches us that, at any rate, after a certain point it becomes less worthwhile to continue looking for hidden factors and risks. So, we have to develop a sense of when we have sufficiently “done our homework” so that we can feel confident that we are getting the big picture. Experience will help you develop a sense for this, as a function of your industry, your company’s culture and your own skill set. You may also continue your analysis while taking primary steps in the direction you think is right to test the waters.

Another reason to remember to act is that things can change, and quickly, especially with today’s technology and global economy. If you try to analyze until you are certain you have examined every possible new development, you may find yourself mapping sand dunes in the desert, with the landscape constantly shifting as the wind blows. In such situations, you may need to select the issues you think are most important, take some probing steps to test your initial reactions, or a combination of these or some other actions and then just roll with the punches that still com through as best you can. What is certain is that you will nonetheless be better off than if you had not made a full effort to analyze the situation in the first place. By the same token, being human, we can also misperceive threats and opportunities. Some of our fears or envisioned roadblocks may never materialize.

Mostly, acting engenders energy, passion and impetus which can often help compensate in overcoming inevitable or unforeseeable obstacles. With the combination of broad perspective and deep analysis, and balancing planning with the need to act, you will soon find greater comfort in your decisions and greater success in your ventures.

You may have heard the remark on occasion, “Oh I would love to have been a fly on the wall in that room.” Well, back in my college days I spent some time considering that idea, and ended up writing the following poem about it. I ran across it the other day while going through some old papers in the basement and thought I’d put it up here. Hope you enjoy it.

Ode to a Fly

Secrets told by little girls

Dreams of love and gifted pearls

Men combine and plans create

Designs to rule, their passions hate

The discoveries that shape our lives

Forgotten pacts of old

The artist creates his masterpiece

An embrace two lovers hold

These things take place behind closed doors

No secrets to reveal

Yet watchful eyes these acts do see

And secrets quietly steal

Oh, omniscient eyes, pervading all

How dearly I long to learn

The wonders of your vigilance

The truths you can discern

Absolutely inconspicuous

Such advantage do you know

The world so carelessly to view

Yet never yourself to show

Yet as I look into those eyes

There is something more I see

A frustration I can’t comprehend

 A longing to be free

I ask the eyes to please explain

Whence comes their agony

My lot, dear friend, the eyes reply

Is one of great irony

The world is mine to view, ‘tis true

And no wall can block my sight

But for all the ways I know to win

I must always sit out the fight

The world, with the knowledge I possess

Would know its ills no more

The wisdom is mine, but not to share

I am rich, but I am also poor

I left the eyes in flurried though

As my envy lost its sting

And a thought, as though from trumpets blast

Started in my ears to ring

‘Tis better to live with ignorance

And change that which I might

Than the answer for all wrongs to know

And hold no power to make it right.

So, finally a first real post.  I know there are millions of you out there just waiting for it. Just imagine, a vehicle I can use to chronicle the jumble of thoughts rolling around my head during the day. Maybe some of them will end up being valuable. At any rate, putting them on (virtual) paper can only serve to help them coalesce into more substantive concepts, so if nothing else, this should be a useful exercise in being critical of my own thought. 

Maybe I’ll just start my blog by saying that, even as we stare down the most serious recession we’ve had in a while, I’m grateful for the entrepreneurial spirit of the American people and for a social and economic structure which allows individuals with a good idea and a bit of tenacity to pursue their dreams; to not be satisfied with sticking with a job they hate just because they were born in a less-advantaged social class. Some entrepreneurs get rich, others just get by, but all are rewarded with the opportunity to chase their dreams – even if only for a little while – and experience a measure of creative freedom that corporate minions never know. I plan to use many of the posts in this blog to explore entrepreneurism, along with its frustrations, exhilarations, success stories and lessons learned from failure. I know I’ll grow from that part of the ride, and I hope a few of you enjoy it too.

I’m sitting here blogging with Curtis J. Morley. He just helped me get this up and running, so we’re off to the races.

 Starting small so you don’t get your expectations up…