Leykam: Welcome to DESIGN YOU with Dr. Garrison Leykam. I’m your host, Garrison. My guest today is an author, speaker and consultant. He’s recognized as a thought leader throughout North America in strategic consulting, and he’s recently published his second book, Momentum: How Companies Decide What to Do Next.

He founded Optimize Inc., a California-based consulting firm in 2002, and has grown an impressive client list that includes public companies and mid-market companies across a diverse range of industries including financial services, healthcare, technology and energy. My guest has facilitated strategy sessions for over 135 companies and he’s an accomplished international speaker. His article “Why 2018 Could Be the Best Year Ever to Be an Entrepreneur” is a must-read for anyone wanting to make a difference in their career, their business and the world. I’d like to welcome to Design YOU, Marc Emmer. Welcome, Marc.

Emmer: Thank you so much. It’s a privilege to be here, and greetings on a rainy day in Los Angeles.

Leykam: Marc, why is it such a remarkable time to be an entrepreneur?

Emmer: Well I think there is kind of unprecedented confidence in the economy right now, and we don’t know how long that will last. A lot of economists are expecting a recession in 2019 and 2020, but obviously the economy is growing faster than it has in more than a decade. And I think in particular there are some sectors that are very strong. We’ve seen a resurgence in manufacturing; technology continues to lead in terms of innovation. And I actually believe that Silicon Valley is leading not only in terms of its products, but also its management theory and propelling a lot of companies forward into their business processes. So I think it’s a really super exciting time to be an entrepreneur.

Leykam: A gig economy can be defined as an environment in which temporary positions are common, and organizations contract with independent workers for short-term engagements. A study by Intuit has said that by 2020, 40 percent of American workers will be independent contractors. How has the gig economy ignited the freelancer market?

Emmer: I think the gig economy is kind of a two-edged sword. I think on one hand, it’s a function of rampant underemployment in our country. All you have to do is travel to the heartland of Pennsylvania or Ohio and you’re going to see a lot of shuttered businesses, which of course is very disconcerting. So I think a lot of people are struggling, and the gig economy doesn’t always provide them with quality of life and healthcare and all those things.

But all of that being said, I would say that it’s easier to start a business. All you really need is a cell phone and maybe 100 dollars, and you could launch an enterprise. And there’s a lot of collaboration and ecommerce tools that make launching a business so easy. If you wanted to have an online store you could do that really quickly and inexpensively. If you needed to transact, you have tools like Square where you can do that really seamlessly. So you don’t need all of the infrastructure you once needed in order to launch a business. So while the gig economy may be an unfortunate need on the part of many people to launch a business, I also think it affords a tremendous opportunity to get out of the gate quickly and inexpensively.

Leykam: Overall, the economy appears to be heating up and experiencing one of its most expansive periods of the recovery. The Wall Street Journal reports the investment confidence of small and medium sized businesses is up sharply from last year. With ecommerce expected to grow 20 percent, how does the specific growth of ecommerce help potentially make 2018 the best year ever to be an entrepreneur?

Emmer: I think ecommerce is also a two-edged sword. So as you referenced, ecommerce is really going up right now. I’m working with two companies who are traditionally brick and mortar who have moved to ecommerce, and I think in particular, Amazon is bastardizing a lot of categories. It kind of promotes a race to the bottom. But, there are very few barriers to entry. So I think the real promise of ecommerce is mass customization and scale. That’s what a lot of these companies are.

So you could take almost any product category that has already been established, and build a model from the ground up based on choice. And then you can fulfill the customer demands really inexpensively. For example, I have a client that prints T-shirts and they sell them to companies like Zulily and direct to consumers. So the consumer can order a Saint Patrick’s day shirt in their preferred print, in any color and any size, and get it the next day for 25 dollars. That model of choice online is how companies are combatting the likes of Walmart and Nordstrom, who really can’t match that level of choice. I think there’s similar business models evolving on the B2B side as well, online.

Ecommerce in many respects is the great equalizer. It’s the opportunity for just about anyone to launch a business and find a finite niche where they can win online. If you get too broad in your offering, that’s when you end up competing with the Amazons and Walmarts and the other ecommerce players.

Leykam: You are an internationally recognized strategy expert. What advice do you have for companies on formulating a strategy?

Emmer: I think there’s several important facets to that. Probably the most important one is doing a lot of work up front. That’s really understanding your market and the markets you might try to grow in; the underlying environmental factors that might impact demand in your market. So it’s doing a lot of research in that first phase of strategy. You have to build a systematic, repeatable system. So strategic planning should not be an event; it should be a process, and you do a lot of work before you meet with your team to talk about strategy.

Once you’ve done that, you expend the time formulating the strategy and then you need to institutionalize it in a written action plan with champions and dates, a shared group of objectives, having the right KPIs. And then you need to meet very often to make sure your strategy remains relevant. So the way I would describe strategy formation is, it’s moving to much more of an agile process where companies are recognizing that the environment around them is constantly shifting, so they also need to have a strategic planning process that can pivot. I think it’s important to have a long-range view, but then also to constantly reevaluate your strategy probably quarterly or so, so you make sure your plan is relevant and also that you’re staying on plan.

Leykam: We see companies- more than ever- doing reinvesting with financing and equity markets, trying to invest in very well-run businesses. What technologies have companies characteristically invested in, and what key technology questions would you recommend that entrepreneurs ask themselves?

Emmer: Thats a great question. I think the first question I would ask is, how will technology be a competitive advantage for your company? So over the last two years, I think a lot of our clients that are typically small and mid-market have done an extraordinary job improving the things that make their internal processes faster, cheaper and better. But in the future it’s going to be important that technology improvements be more outward-facing and improve the customer experience. So in order to combat these large companies and also to serve large clients, what we’re seeing is more end-to-end type solutions. It’s going to be important that companies have better integration within their technology and that they’re able to mine data that in some way will be of value to their customers.

Leykam: Why is it that entrepreneurs forget to look at themselves when considering investments, and what do you recommend they do?

Emmer: I see a lot of business owners developing their people but not themselves. Every employee, including the CEO, should have a learning plan. I read that the average CEO reads 50 books a year. What I do is, I don’t read 50 books a year, but I completely overwhelm myself with content from a broad range of sources and then I’m able to skim what’s really important to me. Going to three conferences a year, making sure you’re mixing it up with other CEOs in a peer group like Vistage, YPO, is really useful. I went to the Inc. Conference last year and I’ve been in a peer group for thirteen years, and I learn so much when I go to those conferences and associate with those kinds of people. I’m inspired by other entrepreneurs and what they’re leaning about. Mixing it up with them is really important in terms of maintaining a path of learning.

Leykam: It seems that long-established companies as well as this new wave of entrepreneurs both become obsessed with constantly looking to create something new. Is it wise to put perpetual newness on a pedestal, and if no, then what’s a better approach?

Emmer: As opposed to newness, my approach to focus might be core versus non-core. Famously, Google has a strategy where they invest 70 percent of their new investment in their core business, 20 percent in adjacent businesses and 10 percent in things that are truly transformational. And there are a lot of large and small companies who are adopting that 70/20/10 formula. I was kind of surprised when I heard of that formula, because you’d think it would almost be flipped, right? Google is such a dynamic company, when they invest 70 percent in core, that reinforces for us that there’s safety in a core business that you know so well and the further we drift away from our core the more likely we are to fail.

I’m not here to advocate that anyone listening have a 70/20/10 formula, but what I would advocate for is every company should have space for innovation. So if you were a larger company, one hundred employees or more, you have the bandwidth to have dedicated resources that are specifically focused on innovation, whether that be R&D or whatever. If you’re a smaller company or a startup and you have ten heads, you may not be able to dedicate people, but you can dedicate time to make sure every week or every month there are dedicated meetings or free time for your employees were they are focused on things that would be entirely new.

So it doesn’t concern me that people are obsessed with newness, but what we need to know about newness is that it is always in conflict with what we already do well. In fact, the competencies required to do what you already do well and the competency to innovate are two entirely different sets of competencies. The former is more about operational excellence and execution, and newness is about being agile and looking outside the market so those things are very much in conflict. That’s why I recommend the smart diversification strategy where you’re doing both at the same time but recognizing the challenge that provides.

Leykam: We continue to hear the often-celebrated mantra, “Information is king”, and the best companies are the ones with the best data. How do entrepreneurs build and maximize their returns on data?

Emmer: I think the focus has been on internal process and now it needs to shift to client-facing-type technologies- being able to secure reports and leverage data and all that. For example a lot of companies are starting to find ways they can better utilize artificial intelligence, and so through bots or whatever, you can provide technologies where clients can serve themselves, and then you can use data you gleaned from those technologies to ensure that you’re building thoughtful solutions but you’re also drip marketing or providing reporting back to clients that is specifically interesting to them. We’ve certainly turned a corner with the Cloud being adopted by everyone over the last two to three years. The data we have available to us is so much richer than it was before.

Leykam: Maybe successful solopreneurs ultimately, if they’re successful, reach the point where they have to delegate some part of their business and hire others to help manage their growth. What are your insights and recommendations for when and how entrepreneurs should handle hiring?

Emmer: Well first of all we have to recognize that we are in a talent war. In fact, I have one client that does all the initial interviewing himself because he knows that is so important in terms of his company’s long-term success.

So I might speak to the broader issue and say companies do a very poor job of recruiting in part because the model we have for recruiting is kind of broken. I don’t think it’s at all possible to fully assess someone’s capabilities through a 60-minute Q&A. We have a lot to do in that regard, and every company is different of course, but I would think the CEO or founder would take a really active role in making sure they have the systems and processes in place to constantly improve their talent pool, and also to create the culture that’s really important to them.

What I’m seeing more and more of our clients is they’re seeing the need to do some kind of cultural immersion in the onboarding process. I’m seeing business owners so much more involved in the front end of that process just so they can build a company based on the culture that is truly important to them.

Leykam: Marc, please share with listeners where they can follow you online, pick up a copy of your book, and engage you for your services.

Emmer: Thank you for asking. Our website is www.optimizeinc.net. The book, Momentum: How Companies Decide What to Do Next, is available on Amazon or in bulk on our site, and a lot of my articles can be found on Inc.com, our blog on our website, and also on the Vistage Research Center.

Leykam: Marc, thank you so much for being a very special guest on DESIGN YOU with Dr. Garrison Leykam.

Emmer: Thank you so much, it’s a pleasure to be here.