The Lessons Learned From Small Businesses

If you’re like me, you love road trips. And, if you’re like most everyone, you appreciate hearing a good story.

Just imagine how intriguing it would be to hear stories about six road trips. Six road trips across the U.S. that produced dozens of stories about what local small businesses on Main Street’s across America do that can inspire big businesses on Wall Street – or Madison Avenue megabrands, or enterprise of any size -- in today’s economy.

Well, that’s exactly what you get when you read the new book, Roadside MBA: Back Road Lessons for Entrepreneurs, Executives and Small Business Owners.

You’ll read those dozens of stories captured by three information-hungry economist/b-school professor buddies who traveled Memphis, TN to Omaha, NE; Charlotte, NC to Atlanta, GA; Chicago, IL to Cincinnati, OH, and so on.

Applying economic reasoning to the strategic questions that challenge any business, the authors reveal what real American small businesses can teach us beyond the bounds of most MBA programs or curriculum.

The stories are grouped by lesson topics:

Scaling a Business
Establishing Barriers to Entry
Product Differentiation
Setting Prices
Managing Your Brand
Negotiating Effectively
Hiring
Delegation
Battling the Big Boys
Strategy is a Continuous Process

Mike Mazzeo

Coauthor, Mike Mazzeo shared with me more insights about his book, and the journeys he shared with coauthors Paul Oyer and Scott Schaefer:

1. What surprises about small business did you learn during your road trips?

Mazzeo: We were continually surprised by the creative strategies that small businesses had developed to compete better in their markets. While most of the owners did not have formal business education, they had internalized many of the key frameworks that we teach to MBA students and made them work for their companies.

A great example was Panhandle Converter Recycling, a company that we met with in Dothan, AL. The business extracts the precious metals from junked catalytic converters -- going into our interview we expected a straightforward story about buying, processing and reselling. Instead, we learned that catalytic converters come in all shapes and sizes and it is impossible to know -- without cracking it open -- how valuable the precious metals inside might be. Panhandle developed its strategy around dealing with this uncertainty. They kept detailed information on the contents of converters they had processed in the past and turned this data into a system to ensure they never paid junk dealers more than the value of the metals that they could extract. We never expected that data analysis would be the key to success for such a company.

2. What are the two or three most common themes you heard during your road trips?

Mazzeo: One recurring theme was about growth and scaling. For the small businesses we met with, growth was a nearly universal aspiration. But growth was easier for some businesses and more difficult for others. In large part, prospects for growth were rooted in the fundamental economics of the business. We met with a company in North Carolina -- Steele Rubber Products, Inc. -- that produces replacement rubber parts used by collectors when they are restoring classic automobiles. These rubber pieces are produced from a mold, so once the company has fashioned the mold (which can be quite expensive) the costs for making each part for sale is quite low. This is the kind of business that is set up well for growth, because you don't have to keep making investments and incurring expenses to sell more.

Another theme for small business was how to think about strategy when competing against larger companies -- we called it "Battling the Big Boys." These larger companies have built in advantages like scale and marketing efficiencies; it is crucial for a small business to build its strategy around things the "Big Boys" aren't able to do well. In Spartanburg, SC we met with Sims Bouwmeester who started a small PR/marketing company whose competitors were large advertising agencies. These agencies typically worked on big, multi-year retainers and weren't flexible enough to do smaller jobs. Taking advantage of this weakness, Sims built her business around being "project-based" and was willing to take on even the smallest of contracts. In her first year in business, she had served over 100 different clients -- many of which wound up giving her more work later.

3. Do you think you missed some valuable stories by having not traveled to Texas and all but one place in California?

Mazzeo: There were great stories to be found all over the country, so we certainly missed some in the parts of the U.S. we haven't made it to yet. But, we aren't done taking road trips -- in May of this year, we visited businesses in California and Arizona. Texas is definitely on the list for future trips, as well as North Dakota.

4. What lessons did you learn about people during your road trips?

Mazzeo: One interesting thing that we learned was the successful small business owners are invariably great story tellers. This isn't surprising, when you think about it -- to be successful, you need to tell the story of your business to customers, to bankers, to employees, just to name a few. We loved listening to the stories about how these businesses got started and how their owners met the challenges that they faced.

5. What lessons did you believe were more prevalent during your trips that would have not existed or been less existent prior to the economy's downturn in 2008/2009?

Mazzeo: As we traveled around the country, we saw that different businesses were touched by the downturn very differently. The downturn certainly made the business owners more careful but it didn't dampen their optimism. And, you need that kind of optimism to run a small business successfully because it is an uncertain endeavor even in the best of economic times.

Comments

The Benefits Of When Everyone Leads

It’s only January and the new book, When Everyone Leads , could likely be my pick for the best new leadership book of 2023. It’s that good. There’s still nearly a whole year ahead of us so we’ll see what other books debut. In the meantime, add this book to your must-read list. You’ll learn that: Leadership is an activity, not a position. Leadership is mobilizing others to make progress on the most important challenges. Leadership is interactive, risky and experimental. Leadership comes in moments. Leadership is always about change. When Everyone Leads , by Ed O’Malley and Julia Fabris McBride , presents a revolutionary approach to leadership; not based on position or authority, but an activity that anybody can undertake by learning to spot opportunities for improvement and taking the initiative to engage others. “It can be unfamiliar and uncomfortable, but in a culture where everyone leads, organizations start to make progress on their most difficult problems,” explain t

Effective Listening: Do's And Don'ts

Here are some great tips from Michelle Tillis Lederman's book, The 11 Laws of Likability . They are all about: what to do and what not to do to be a leader who's an effective listener : Do : Maintain eye contact Limit your talking Focus on the speaker Ask questions Manage your emotions Listen with your eyes and ears Listen for ideas and opportunities Remain open to the conversation Confirm understanding, paraphrase Give nonverbal messages that you are listening (nod, smile) Ignore distractions Don't : Interrupt Show signs of impatience Judge or argue mentally Multitask during a conversation Project your ideas Think about what to say next Have expectations or preconceived ideas Become defensive or assume you are being attacked Use condescending, aggressive, or closed body language Listen with biases or closed to new ideas Jump to conclusions or finish someone's sentences

Five Must-Read Business Books To Read This Summer

Stumped for what business books to add to your summer reading list? Here are five must-read books for leaders well worth adding to your list: Lead With A Story -- A Guide To Crafting Business Narratives That Captivate, Convince, and Inspire . Author Paul Smith explains why storytelling has emerged as a vital skill for every leader and manager. In the book, you'll find over 100 ready-made stories you can use as templates to tell your stories. Stories are so powerful because they are simple, timeless, demographic-proof, contagious, easy to remember and inspiring. Most important, they put the listener in a mental learning mode. What's The Future Of Business? (WTF?) -- Changing The Way Businesses Create Experiences . This book, by Brain Solis, details the incredible transformation happening in business today, driven by new social and mobile technologies. And, he explains how experience design helps your business and how you can harness its power for business growth. This book

How To Make The Leap To Becoming A Leader

Here’s another must-read book to add to your list as you transition from manager to leader. It’s The Leap to Leader , by Adam Bryant . As the creator of the iconic “Corner Office” column in the New York Times , Bryant has spoken with more than a thousand leaders over the years about the challenges and nuances of leadership. Many of his discussions are included in his interview series on LinkedIn. “The goal of this book is to provide an intensely practical guide to making that transition by sharing insights, stories, and approaches from hundreds of leaders to build the skills you will need to make the leap to leader,” explains Bryant. He adds that the book is useful to everyone who is interested in leadership, regardless of where they are in their career. The book covers: The central paradox of leaders: selfless vs. self-centered. How to perfect the do-to-say ratio. Ways to navigate office politics. Tactics to making better decisions. The crucial art of compartmentalizati

How To Lead With Heart

Those who lead with heart consistently have discussions with their teams about their unexpressed needs, fears, desires, gifts, and sense of purpose , explain the authors of the compelling book, Leading With Heart . CEO coaches and authors John Baird and Edward Sullivan share that anyone can learn how to make an authentic connection with their teams in order to drive better outcomes. And their book provides readers clear and practical insights to help them succeed in making those connections. Be sure to read the highlighted key principles and takeaways at the end of every chapter. Baird and Sullivan further share that workers today want to feel respected, seen and appreciated for who they are. That’s why companies with the best retention, morale, and productivity are led by leaders with heart. As Alexander Den Heijer said, “ When a flower doesn’t bloom you fix the environment in which it grows, not the flower .” “In heart-based cultures, people feel safe pushing back and

Eights Ways To Demonstrate You Value Your Employees

There are eight specific actions business leaders can take to show that they value their employees , according to Andrew Leigh , author of the book, Ethical Leadership -- Creating and Sustaining an Ethical Business Culture . Those eight behaviors are: Attention -- Pay attention to what people say to show your interest. Listen -- Make time to hear what colleagues, peers and employees have to say to show you care. Positive Language -- Find words and phrases to show employees they're needed. Examples are, "We couldn't have accomplished this without you," "That was really useful." Document -- Put praise in writing to increase its impact. Make clear where the credit belongs. Micro Sessions -- Create two-way communication sessions. Visits -- Schedule visits to teams and work areas. Stories -- Share stories that highlight unusual contributions and provide your personal response to them. Invite -- Ask people to contact you directly with their issue

How To Be A Go-To Person At Work

Bruce Tulgan ’s book, The Art of Being Indispensable at Work is all about how to win influence, beat overcommitment, and get the right things done in your workplace . Tulgan says that what truly sets “go-to people” apart is how they think and what they do, including: They understand the peculiar mathematics of real influence – doing the right thing for the long term. They lead from wherever they are – going vertically before going sideways (or diagonally). They know when to say no and how to say yes . They work smart – creating checklists, step-by-step instructions, and professionalizing everything they do. They finish what they start . They get better and better at working together . They promote “go-to-ism” – finding other indispensable people throughout the organization and building new go-to people whenever there’s a chance to do so. Other characteristics of indispensable people , are: Maintaining a positive attitude Doubling down on hard work Taking personal res

Seven Tough Questions To Ask Your Team

High-functioning teams can disagree and still produce excellent products and results. Team members can also disagree and still care about each other. And, they can challenge each other to think differently. Best-selling leadership book authors Scott J. Allen and Mitchell Kusy recommend that leaders ask seven tough questions of their teams to help maximize their results. Here are those questions to ask each team member: What are some obstacles affecting this team? What are opportunities we could take advantage of that we have been largely ignoring? Where can you take greater ownership on this team? Where have you let this team down ? Compared to other teams with which you are familiar, how are we doing ? When was the last time you complimented the team or one of its members? How open are you to giving direct feedback to team members?

How To Listen Effectively

Here are some great tips from Michelle Tillis Lederman 's book, The 11 Laws of Likability . They are all about: what to do and what not to do to be a leader who's an effective listener : Do : Maintain eye contact Limit your talking Focus on the speaker Ask questions Manage your emotions Listen with your eyes and ears Listen for ideas and opportunities Remain open to the conversation Confirm understanding, paraphrase Give nonverbal messages that you are listening (nod, smile) Ignore distractions Don't : Interrupt Show signs of impatience Judge or argue mentally Multitask during a conversation Project your ideas Think about what to say next Have expectations or preconceived ideas Become defensive or assume you are being attacked Use condescending, aggressive, or closed body language Listen with biases or closed to new ideas Jump to conclusions or finish someone's sentences

How Leaders Can Move Teams From Isolated To All In

Here is a book that provides workplace leaders an urgently needed methodology for helping companies to reduce worker loneliness, and it delivers a blueprint for building strong, high-performing workplace teams. The book is, Connectable: How Leaders Can Move Teams From Isolated To All In , by Ryan Jenkins and Steven Van Cohen . “72% of workers suffer from loneliness. And, what was once a simmering problem shifted to a crisis when COVID-19 and the sudden transition to remove work isolated workers from each other as never before,” report the authors. “Loneliness is the absence of connection,” explain the authors. “Loneliness is not defined by the lack of people, because someone can be lonely even while surrounded by others. We require more than the presence of others. We require the presence of others to dream, strategize, and work toward commons goals.” Furthermore, “workplace loneliness is defined by the distress caused by the perceived inadequacy of quality connection to team

Eric Jacobson On Management And Leadership

Search This Blog