0:00
Welcome back, welcome back. Before moving on,
I want to also get you used to going to the class forum.
So, I'm going to ask you to do me a favor.
What I want you to do, remember, I said have pencil and paper
before? Let's stop right here, because in the
next part, okay, we're going to lay the groundwork and I'm going to basically go
into this Growth Risk Decision Tool, alright, and lay the groundwork for next
week's class because you need to understand it in order to do the workshop
for next week. But before going there, please take your
paper and pencil and write down, what are the three most important things to you
that you learned this week? And we're going to do this every class.
Write them down. Then, if you're so inclined, go to the
class forum and post them. And then, I'm hoping there'll be
thousands of you that have posted them so you can see what other people thought was
important which may also cause you to rethink and to also think of more things
but to see what sort of and it's also a feedback for me.
What's resonating, okay?
What's sticking, alright?
What are you thinking about, okay?
And I understand this first class is somewhat different than the rest because
this first class, the attempt is to basically challenge you to think about
growth but also to challenge what you think about growth.
By that I mean, I want to basically hit the myths of growth head on.
And I want to set the stage, because the purpose of Class 1, quite frankly, is to
change the way you think about growth and to give you research and science so you
can be more realistic about growth. So, you can basically learn from the
research. Okay.
So, we're going to leave again. Go get your piece of paper, your pen,
write down the three most important things you've learned, especially from
Julie and then post them on the class forum and then, be right back to me.
I'm here awaitin for you, I'm here awaitin for you.
2:54
And these are the questions, okay? These are the questions.
I'm going to correct a little typo there, alright?
Number one. because you're thinking about growth and
I want you to use this with the 3 Fellers Bakery case next week,
alright? We're going to to talk more about that.
Why should we grow? How will we grow?
How much should we grow? How much growth can we afford?
Do we have enough people? Do we have the right people?
Do we have hiring in training processes? Do we have adequate financial controls,
adequate quality controls? Will growth create risk for our culture?
Now, you're saying, slow down Ed, slow down." Okay.
Let's go back. The Growth Risk Assessment Tool is one of
the key tools that I will leave you with in this entire course.
4:26
Why should we grow? That's an important question.
Is it money? Is it to help people?
Is it ego? Why?
How will we grow? How will we get more customers?
How much, will we grow? Do we want to double in size next month?
I don't think so. How much do you want to grow over what
period of time? How much growth can we afford?
We've already talked about what that means.
In order to grow, what do I have to do? What do I have to fix? What do I have to
improve? What's it going to cost me? How many more people, okay?
If I spend that money, how long is it going to take me to get new customers?
How long is it going to take me to deliver my products?
How long is it going to take me to get paid?
What is the time frame between cash going out and cash coming in?
5:45
Do I have good hiring processes? Most entrepreneurs when they grow their
business learn, they are poor at hiring. In fact, one common theme from all my
research, hire slowly, hire slowly,
[SOUND] fire quickly if you make a mistake.
Most entrepreneurs hired quickly and fired slowly.
They hire quickly because they wait till the last moment.
Everything is chaotic and they need people.
And they don't have hiring processes. They don't have training processes.
Do I have financial controls? Do I know every day, every day, at the
close of every day, how much money is in the bank,
what my receivables, what my payables are.
You need to know that every day. To have adequate quality controls, how do
I know, as I ramp up, that my customers going to get good quality?
What type of inspection controls, what type of check list do I have?
What type of customer service follow through do I have?
How do I know? Then, I have to ask myself a set of
questions. Will growth create risk for my culture?
Will adding a lot of people dilute my culture?
Well, that question has one big assumption.
First, you have to have a culture. What is your culture?
What are the general rules, principles of how you want people to act?
What are those unwritten rules to bind people together in the common cause
that's meaningful? And if I had more people, how do I transmit, teach, educate
that culture? We talked about customer service,
customer experience, cash flow. If I grow, what about my supply chain?
Can I get the raw materials? Can my supplier supply me?
Will they work with me financially? Do I have the ability to distribute and
deliver? Do I have a financial safety net if I'm
wrong on my projections? And I've been out in the business world,
ladies and gentlemen, over 40 years and when I was in the business world, I spent
my life advising private growth companies and raising capital for them, doing
strategic planning, and then I built businesses, and I have never, ever had a
projection or worked with a projection that a company ever met.
Everyone always overestimates how fast and how much money is going to come in.
What is your financial safety net? What is your financial safety net?
Okay. Once we say, okay, this could create some problems, what do I do to
mitigate or reduce them? Do I have daily information?
Do I have daily information to monitor them?
How do I know if it's happening? Who is going to help me?
Who is going to monitor, manage, and correct?
And then, we're back to the gas pedal approach.
9:29
Okay. [SOUND] Starbucks issues which required
its Chairman and Founder to come back and right the ship.
JetBlue's issue years ago, when operationally, it had problems at JFK.
Now, all of these companies are in the process of solving their issues.
But my point here is, is, this is just not private companies.
This is public companies. You can learn by reading from them.
And, and there's lot of stuff, lost of, just Google, just Google and go
find the articles. There are great articles out there.
Now, I'm ging to have you to take a quiz on
this tool, alright? This Growth Risk Assessment Tool.
Why? because it is so important.
It's such a takeaway, alright? It is such a takeaway to this course but
also, it's the basis for the workshop. Next week's class is going to be a
workshop, 3 Fellers Bakery. So, take the test.
This one is a short one. Come back to see me and I'm going to set
up and discuss about how you should do the workshop,
how you should use the forum, and what we're going to do next class.
Thank you and see you in a few minutes.
Edward D. HessProfessor of Business Administration
