09/10/2018 Megan

Sustainable Business Principles for the Entrepreneur

Lean principles find their origins in the manufacturing world, and as such, many people mistakenly think that they have no place in the business world. However, when applied correctly, Lean principles can bring increased efficiency, sustainability, and value to even the most unsuspecting process – including a business startup.

Don’t Squelch the Talent Around You

Of all the mistakes we could make, failing to utilize the talent around us dampers the entrepreneurial spirit and ideation the most. Innovation doesn’t take place in isolation – we need others to challenge, criticize, and celebrate with us. As such, we surround ourselves with teams (formal or informal) that bring value to our pursuits.

But, in the stress and pressure of day-to-day deadlines and requirements, we sometimes force people to work in areas in which they aren’t gifted or that under-utilize their skill sets. We give clerical or administrative tasks to those who thrive in collaborative, highly-communicative roles or ask the those more comfortable with the inner workings of a computer to develop our sales strategy. And though necessary at times, prolonged time spent on tasks in which one does feel effective can lead to burn-out, frustration, and lack of motivation – not to mention that people typically complete tasks in their areas of strengths more quickly and with higher quality.

The best way to combat wasted talent is to know your team. Know what they enjoy, where their talents lie, and how they are motivated. Tom Rath’s Strengths Finder 2.0 is a great way to begin understanding and assessing your team’s strengths and also learning how to work well on a team where diverse talents are represented, which is the best kind of team.

Avoid Over-Processing

In the world of entrepreneurship, we take our work personally; we count our entrepreneurial pursuits worthy of sacrificing stability, personal time, and, oftentimes, financial security. When we launch our product or service, we’re giving away a piece of ourselves. So, naturally, we design to be the best in the marketplace, but what if striving to be the best is more than what’s required?

Ultimately, our goal is to turn a profit by providing exactly what the customer wants with the minimal amount of resources required to produce it. So, we don’t necessarily have to be the best; we just have to be the best at meeting the customer need. It’s possible to spend extra time and money refining the product or service and making it shinier when the customer would have been satisfied with an already existing version.

For the success of any business, customer insight is foundational. As you’re building your business, surround yourself with potential customers who can tell you what causes them pain and what they most desire. Then, build your minimum viable product and use your network of potential customers to test it out. Don’t waste resources making something prettier when you could already be earning a return on your investment.

Prioritize Your Investments

Let’s face it – big thinkers aren’t always big doers. Some of the most strategic, forward thinkers in the world will be the first to admit that they don’t always know how to put their ideas into action or how to prioritize their investments. But, to let strategic ideas sit undeveloped in the crevices of the mind is the same as letting containers of in-process materials lie around a warehouse. They clutter the workspace and create confusion and inefficiency.

Documenting your and your team’s ideas declutters your mind and ensures your good ideas aren’t forgotten. Because our resources – time and money – aren’t unlimited, we need to invest them wisely. And, spending them across a long list of ideas won’t bring as much value as investing them strategically in those that will bring the most forward motion. Download a prioritization matrix template from Lean Methods Group, check out Fortune magazine’s 5 Apps to Track Your Every Idea, or replicate the matrix below to make sure you’re getting the most out of your investments.

Buy What You Need and Make What You Sell

This principle seems foundational, but have you ever been lured into bulk purchases because of a discount? In an effort to stretch our money, we can be tempted to purchase more than what we need, but to give into such a temptation could be crippling for a start-up. Funding is one of the biggest challenges for the entrepreneur, and to invest your hard-earned money in something you may or may not use is foolish. The storage costs of this decision alone are a waste, but the opportunity cost can be far more significant and, oftentimes, not fully realized until a later date.

The “make it and they will come” philosophy has been around for years, but it’s against core lean principles and is certainly unwise for the freelancer. The last thing you need is to invest your money in something no one may ever buy. It’s far better to require letters of intent or, better yet, contracts from prospective customers before you develop the product or service. Doing so shows you that your prospective customer is serious about purchasing your product and reduces the financial risk involved in the development and launch.

Learn from Your Mistakes

Learning what not to do can be just as valuable as knowing what to do. So, endeavor to be a life-long learner. One of the keys of Lean methodology is continuous improvement – note the word continuous; it implies that there will never be a day when the process cannot be improved. Let that be a guiding principle for your business ventures as well.

Collect feedback from your customers or partners. Look at your investments of time and money seeking to understand why they did or didn’t bring a return. Ask the hard questions and take action based on what you learn remembering to see each failure as an opportunity to learn and improve.

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