The #1 CEO Mistake That Will Kill Your Company

Christine Comaford, Contributor @forbes

Bob’s business was growing by a consistent 30% per year.

Then it stopped.

Two of his key sales people had left, followed by his VP of Marketing. A handful of his most promising emerging leaders were moving toward the door too. Bob’s revenue had flatlined. I was called in to stop the exodus and turn things around.

Sue’s business was growing by 100% per year. The speed at which the company was expanding was barely manageable. At any given time her company had 20+ job searches under way.

And there was no sign of a slowdown.

Until her people’s performance started to falter. Accountability became wobbly. At 5pm the office was a ghost town. The previous palpable energy in the office now was dull and dreary. Everyone looked burned out and tired.

Both Bob and Sue had the same problem: no People Plan.

What Inflection Point Are You Headed Toward?

In my 30 years of helping CEOs build highly profitable businesses, I’ve consistently correlated company challenges to what I call Inflection Points. At each Inflection Point your business is reinvented–there are profound people, money and business model changes. The people ones are the hardest. Without mastering them, the money and business model become irrelevant, because your business isn’t going to make it.

The business world is moving too fast to tolerate CEOs who don’t prepare for their next Inflection Point. Let’s look at the Inflection Points then we’ll lay out your People Plan.

Image Credit: Copyright Christine Comaford Assoc 2012

How’s Your People Plan?  13 Questions To Ask Now

Rate yourself on the following questions. Answer each with Yes or No, then total them up at the end.

1-Is your revenue growing as quickly as you want it to?

2-Is your profit growing as quickly as you want it to?

3-Do you have the right people in the right roles doing the right things?

4-Are you retaining or losing your superstars?

5-Are you using specific proven techniques to help your executive team lead better by seeing into their blind spots, overcoming challenging behaviors, expanding their vision and ability to elevate others?

6-Have you identified your next generation of leaders?

7-If so, are you following a specific proven process to cultivate them?

8-Would you like to get more accountability, communication, execution from your team?

9-Are you navigating rapid growth or turnaround where internal priorities are frequently shifting and the team is challenged to quickly adapt and stretch?

10-Are you frequently resolving conflict between key executives or team members?

11-Does your culture have a prevalent victim mentality where problems are focused on versus outcomes?

12-Do you know how to scale and allocate your human resources to get more done with fewer people?

13-Are you keeping your finger on the pulse of the culture and implementing programs to increase emotional equity?

If you have five or more “No” answers you likely have no People Plan. Keep reading to remedy this.

4 Key Components of Your People Plan

People Plans evolve over time. The reason most CEOs want one is three-fold: greater profit, greater revenue, greater retention and development of their key team members. With an effective People Plan you’ll get:

• 35% more productivity from your team members
• Close sales 50% faster
• Double revenue or net income annually

For version 1 of your People Plan you’ll need the following:

1-Individual Development Plans: Each team member across your company should know their next two possible evolutions (promotions imply a raise/title change, which may not occur)—whether they are up, across or within. The “within” evolutions are when their current role takes on significant new responsibility or acquires a new skill set. Think of a customer service rep who has now been trained in up-selling, down-selling, cross-selling and thus can now receive performance bonuses when their new skills are demonstrated. Plan out 1 year at a time.

2- Leadership Development Programs:  Every team member in your company should have the opportunity to apply for a Leadership Development Program. This program is a six month training and coaching intensive where the person develops significant new skills and changes previously limiting behaviors. Your next generation of leadership will come from the people who graduate from this program, and everyone who participates needs to “pay it forward” by mentoring a person in your company on enhancing their own leadership.

3-Lean Training: See my blog on Crushed Culture to learn the four short and sweet trainings (2.5 hours each or less) every staff member on your team must receive. Don’t assume since Joe works in the warehouse that he doesn’t need training on smart skills (aka management skills). Au contraire. One of our clients had a warehouse worker named Marv. He took our Neuroscience of Leadership training and one month later had optimized  warehouse efficiency and reduced costs by over $300,000 per month. Needless to say Marv has been promoted.

4-Accountability Structures and Rewards/Consequences: I covered super effective accountability structures in my Accountability Blog, so I won’t repeat it here. The main point is everyone must know their key “Needle Movers” for the year, quarter, month and be delivering results consistently. They get rewards for results and consequences when they miss them.

Don’t let your growth grind to a halt. And don’t tolerate a Crushed Culture like United Airlines and Hilton Hotels–two brands that I used to love–now have. (Hint: surly employees and inconsistent quality are huge signs).

Both Bob and Sue now have a People plan. Their cultural chaos is a distant memory. Bob’s growth is now at 42% annually, Sue had another year at 100% growth then we moved our focus to cranking up her profit and operational efficiency.

Christine Comaford has created and implemented People Plans at many of America’s most successful companies for the past 30 years. She’s also the author of the NY Times bestseller “Rules for Renegades.” Follow Christine on Twitter: @comaford

What a 9-Year-Old Can Teach You About Selling

via @ INC by Tom Searcy

I recently read a study that confirmed my suspicion that most people don't remember what we present to them in a sales call. The data suggested that the average buyer in a meeting will only remember one thing–one!–a week after your meeting.

Oh, and by the way: You don't get to choose what that one thing is. Sigh.

So what have sales professionals done about this? They have worked on "honing the message," developing a "compelling unique advantage" and, of course, the ultimate silver bullet: a surefire elevator pitch.

But here's what you're fighting: A world cluttered with information, schedules, packed with more meetings and work than a person can handle. A decision-making process with more people involved in every choice–many of whom know little about your product or service. No wonder so little is remembered; often your audience doesn't even understand much about what you're offering.

What Kids Want to Know

I have a 9-year-old daughter with spring freckles, long brown hair and blue eyes the size of silver dollars. She asks the kinds of questions that on the surface seem so simple:

• Daddy, what do you do?
• Why do people decide to hire you?
• Why don't they hire somebody else or do it themselves?

One of the great things about 9-year-olds: Like many buyers these days, they lack context. Any answer that you provide has to be in a language that they can understand.

What does a procurement specialist know about what you sell–or the IT person, or the finance person? The challenge is this: Can you answer the three questions my 9-year-old asked, for your own business?

Hint: There are right and wrong answers for both.

Daddy, What Do You Do?

• Right answer: "I help companies to grow really fast by teaching them how to sell bigger companies much larger orders."
• Wrong answer: "Our company helps develop inside of our clients a replicable and scalable process for them to land large accounts."

Why Do People Decide to Hire You?

• Right answer: "We have helped lots of companies do this before, so we are really good at it as long as they are the right type of companies."
• Wrong answer: "We have a proven process for implementation that allows organizations to tailor the model to their market, business offering and company's growth goals."

Why Don't They Do It Themselves?

• Right answer: "Just like when you learned to play the piano: Mommy and I could teach a little, but we don't know as much as your teacher, and teaching you ourselves would take a long time and be very frustrating. Daddy is a really good teacher of how to make bigger sales, and people want to learn how to do this as fast as they can."
• Wrong answer: "We are the foremost expert in this field with over $5 billion in business that our clients have closed using this system. Usually our clients have tried a number of things on their own before we work together and have wanted outside help to get better results."

In these cases, both answers are accurate, but that doesn't make them right. In a world in which more decisions are made with less information and context, our responsibility is to get to as clear and memorable an answer as possible for all of the buyers to understand.

What Success Really Looks Like

This napkin sketch was tweeted this morning by Babs Rangaiah of Unilever (@babs26). It has been attributed to Demetri Martin, the author of a book called This Is A Book.

It's wise:

Best business books list...

I shared this list with my Vistage group members... it is a collection of some of the best business books I have come across.    Below I have listed the book, a description of the value and a link to Amazon:

Leadership is an Art - Best book I have read on high level leadership - Amazon

The Marketing Playbook - Outstanding book on marketing strategy.  How to compete, new products and services.  Well written - Amazon

Top Grading - Discussed in our last meeting.  How to get the right people on the bus - Amazon

The Alchemist - Not your normal business book... this book is about life and work balance as well as priorities.  Thought provoking - Amazon

How to Become a Rainmaker - Excellent book for sales and BD, both practical and inspirational - Amazon

Fierce Conversations - A Vistage endorsed book on having the tough conversations and communicating with clarity - Amazon

Death By Meeting - A must read for executives.  This is a fable about meetings and very practical ways to make the far more effective - Amazon

I have many more listed on my LinkedIn Reading List.

Business Etiquette: 5 Rules That Matter Now

via @inc by Eliza Browning

The word may sound stodgy. But courtesy and manners are still essential--particularly in business.

The word "etiquette" gets a bad rap. For one thing, it sounds stodgy and pretentious. And rules that are socially or morally prescribed seem intrusive to our sense of individuality and freedom.

But the concept of etiquette is still essential, especially now—and particularly in business. New communication platforms, like Facebook and Linked In, have blurred the lines of appropriateness and we're all left wondering how to navigate unchartered social territory.

At Crane & Co., we have been advising people on etiquette for two centuries. We have even published books on the subject—covering social occasions, wedding etiquette and more.

Boil it down and etiquette is really all about making people feel good. It's not about rules or telling people what to do, or not to do, it's about ensuring some basic social comforts.

So here are a few business etiquette rules that matter now—whatever you want to call them.

1. Send a Thank You Note

I work at a paper company that manufactures stationery and I'm shocked at how infrequently people send thank you notes after interviewing with me. If you're not sending a follow-up thank you note to Crane, you're not sending it anywhere.

But the art of the thank you note should never die. If you have a job interview, or if you're visiting clients or meeting new business partners—especially if you want the job, or the contract or deal—take the time to write a note. You'll differentiate yourself by doing so and it will reflect well on your company too.

2. Know the Names

It's just as important to know your peers or employees as it is to develop relationships with clients, vendors or management. Reach out to people in your company, regardless of their roles, and acknowledge what they do.

My great-grandfather ran a large manufacturing plant. He would take his daughter (my grandmother) through the plant; she recalled that he knew everyone's name—his deputy, his workers, and the man who took out the trash.

We spend too much of our time these days looking up – impressing senior management. But it's worth stepping back and acknowledging and getting to know all of the integral people who work hard to make your business run.

3. Observe the 'Elevator Rule'

When meeting with clients or potential business partners off-site, don't discuss your impressions of the meeting with your colleagues until the elevator has reached the bottom floor and you're walking out of the building. That's true even if you're the only ones in the elevator.

Call it superstitious or call it polite—but either way, don't risk damaging your reputation by rehashing the conversation as soon as you walk away.

4. Focus on the Face, Not the Screen

It's hard not to be distracted these days. We have a plethora of devices to keep us occupied; emails and phone calls come through at all hours; and we all think we have to multitask to feel efficient and productive.

But that's not true: When you're in a meeting or listening to someone speak, turn off the phone. Don't check your email. Pay attention and be present.

When I worked in news, everyone was attached to a BlackBerry, constantly checking the influx of alerts. But my executive producer rarely used hers—and for this reason, she stood out. She was present and was never distracted in editorial meetings or discussions with the staff. And it didn't make her any less of a success.

5. Don't Judge

We all have our vices—and we all have room for improvement. One of the most important parts of modern-day etiquette is not to criticize others.

You may disagree with how another person handles a specific situation, but rise above and recognize that everyone is trying their best. It's not your duty to judge others based on what you feel is right. You are only responsible for yourself.

We live in a world where both people and businesses are concerned about brand awareness. Individuals want to stand out and be liked and accepted by their peers--both socially and professionally.

The digital landscape has made it even more difficult to know whether or not you're crossing a line, but I think it's simple. Etiquette is positive. It's a way of being—not a set of rules or dos and don'ts.

So before you create that hashtag, post on someone's Facebook page or text someone mid-meeting, remember the fundamentals: Will this make someone feel good?

And remember the elemental act of putting pen to paper and writing a note. You'll make a lasting impression that a shout-out on Twitter or a Facebook wall mention can't even touch.

8 Steps for Refreshing your Brand

by • Marc Emmer • 

One must contemplate the distinction between branding and rebranding. Rebranding is often miscast as an exercise in repairing one’s reputation. Some rebranding efforts focus on mitigating a negative image (such as Philip Morris’s name change to Altria or AIG’s move of their advisory business to Sagepoint). Yet rebranding may also represent subtle changes in positioning, or the recasting of visual identify, such as Starbucks recent move to a more contemporary look.

If you thinking about rebranding your company, bear in the mind the following considerations:

Seek out simplification-Today’s rebranding efforts are often a function of providing clarity to the marketplace and removing brand confusion. Citi’s recent rebranding removed a single word (if the word bank is in your name, it may not be a bad a idea to remove it). Our cluttered market values simplicity.

Leverage Social Media from the ground up- Within our firm, we recently rebuilt our website, refreshed our brand, and printed new business cards (including a QR code). All of our marketing includes embedded social media components, with the intent of driving traffic to our website where prospects can experience various multimedia tools that are featured online.

Use emotional triggers-Google famous Parisian Love ad (when an American finds love in Paris) is a classic example of using emotional messaging to capture the imagination of your audience. All marketing should utilize emotional triggers.

Enter new markets- Pabst Blue Ribbon, perceived as an also-ran in the U.S. rebranded in China as an ultra-premium American lager (PBR) and is selling for upwards of $44 a bottle (the Chinese may not have everything figured out).

Reshape perceptions about quality-Rebranding should not appear cosmetic or contrived. Harley Davidson’s slide in perceived quality in the 80’s was magnified by stiff competition from Japanese competitors.  The company’s drastic repositioning included a return to its core products and the formation of the Harley Owners Group (HOG’s),  which reestablished Harley a bad boy brand.

Identify unmet needs- Your offer may need to change as the utility of your product or the benefits that differentiate it may shift over time.  Marketers will often use a tag line when they wish to preserve there brand equity, and point out new features or benefits.

Use professionals- Rebranding can back fire when companies draw attention to their marketing.  Many smaller companies try to utilize self service template web sites and similar home grown tools that come off as……home grown. Marketing requires constant investment. Hire people who can assist you with both messaging and technology.

Understand the hard and soft costs- Change can be expensive, given the need to reprint, re-sign, change email addresses, etc. Consider all your  hard and soft costs (including management team band) with as you refresh your brand.

Organizations often under appreciate the importance of branding. In this world of hyper-competition, the way you communicate the nuances of your brand are more important than ever.

6 Habits of True Strategic Thinkers

You're the boss, but you still spend too much time on the day-to-day. Here's how to become the strategic leader your company needs.

By Paul J. H. Schoemaker | @inc

In the beginning, there was just you and your partners. You did every job. You coded, you met with investors, you emptied the trash and phoned in the midnight pizza. Now you have others to do all that and it's time for you to "be strategic." 

Whatever that means.

If you find yourself resisting "being strategic," because it sounds like a fast track to irrelevance, or vaguely like an excuse to slack off, you're not alone. Every leader's temptation is to deal with what's directly in front, because it always seems more urgent and concrete. Unfortunately, if you do that, you put your company at risk. While you concentrate on steering around potholes, you'll miss windfall opportunities, not to mention any signals that the road you're on is leading off a cliff.

This is a tough job, make no mistake. "We need strategic leaders!” is a pretty constant refrain at every company, large and small. One reason the job is so tough: no one really understands what it entails. It's hard to be a strategic leader if you don't know what strategic leaders are supposed to do.

After two decades of advising organizations large and small, my colleagues and I have formed a clear idea of what's required of you in this role. Adaptive strategic leaders — the kind who thrive in today’s uncertain environment – do six things well:

Anticipate 

Most of the focus at most companies is on what’s directly ahead. The leaders lack “peripheral vision.” This can leave your company vulnerable to rivals who detect and act on ambiguous signals. To anticipate well, you must:

• Look for game-changing information at the periphery of your industry
• Search beyond the current boundaries of your business
• Build wide external networks to help you scan the horizon better

Think Critically

“Conventional wisdom” opens you to fewer raised eyebrows and second guessing. But if you swallow every management fad, herdlike belief, and safe opinion at face value, your company loses all competitive advantage. Critical thinkers question everything. To master this skill you must force yourself to:

• Reframe problems to get to the bottom of things, in terms of root causes
• Challenge current beliefs and mindsets, including your own
• Uncover hypocrisy, manipulation, and bias in organizational decisions

Interpret 

Ambiguity is unsettling. Faced with it, the temptation is to reach for a fast (and potentially wrongheaded) solution.  A good strategic leader holds steady, synthesizing information from many sources before developing a viewpoint. To get good at this, you have to:

• Seek patterns in multiple sources of data
• Encourage others to do the same
• Question prevailing assumptions and test multiple hypotheses simultaneously

Decide

Many leaders fall prey to “analysis paralysis.” You have to develop processes and enforce them, so that you arrive at a “good enough” position. To do that well, you have to:

• Carefully frame the decision to get to the crux of the matter
• Balance speed, rigor, quality and agility. Leave perfection to higher powers
• Take a stand even with incomplete information and amid diverse views

 Align

Total consensus is rare. A strategic leader must foster open dialogue, build trust and engage key stakeholders, especially when views diverge.  To pull that off, you need to:

• Understand what drives other people's agendas, including what remains hidden
• Bring tough issues to the surface, even when it's uncomfortable
• Assess risk tolerance and follow through to build the necessary support

Learn

As your company grows, honest feedback is harder and harder to come by.  You have to do what you can to keep it coming. This is crucial because success and failure--especially failure--are valuable sources of organizational learning.  Here's what you need to do:

• Encourage and exemplify honest, rigorous debriefs to extract lessons
• Shift course quickly if you realize you're off track
• Celebrate both success and (well-intentioned) failures that provide insight

Do you have what it takes?

Obviously, this is a daunting list of tasks, and frankly, no one is born a black belt in all these different skills. But they can be taught and whatever gaps exist in your skill set can be filled in. I'll cover each of the aspects of strategic leadership in more detail in future columns. But for now, test your own strategic aptitude (or your company's) with the survey at www.decisionstrat.com.

Apple Announces iBalls: The Ultimate Retina Display

CUPERTINO, CA — Whoever designed the human body did a respectable job — but leave it to Apple to take it to a higher level.

With its new iBalls technology, Apple has created superior eyes. Once installed, iBalls allow you to choose between five different modes of vision: normal, microscope, telescope, wide-angle and sepia.

Even better, iBalls allow you to take 8-megapixel still photos with one eye, 3D photos using two eyes, and upload a 24/7* video record of your life to iCloud in glorious 1080p.

But uploading is only part of the story. iBalls can also tap into your iTunes account to retrieve movies and TV shows, allowing you to be entertained in the privacy of your own head. It’s the perfect solution for boring business meetings, church services and family functions. (HBO is available at an additional cost.)

As Apple’s press release puts it, “What would you rather do — sit through a two-hour business meeting or watch Star Wars Episode IV? With iBalls, the choice is yours.”

Even if you never use the technology built into iBalls, you’ll feel better about yourself. iBalls let you choose from a palette of five colors, so you can finally get rid of the boring peepers you were born with. You can even mix and match to create your own unique look.

iBalls are installed by a higher level of Genius Bar employee — the iGenius — who is Apple-trained to ensure a smooth upgrade. Reservations are available online for the 20-minute procedure.

iBalls have an initial cost of $999 each and require a $59/month subscription. Both natural eyes must be removed prior to installation — but if you have limited funds, you can start with just one iBall, then use the optional iPatch ($49) to cover the vacant socket.

Those who default on their iBalls subscription will lose all functionality, including basic vision. However, in these cases, Apple will provide iBraille training at no additional cost.

* Sleep time not included.

Posted:  April 1st, 2012 :)

Head on over to Scoopertino for some more funny fake news.

Why Timing is Everything in Hiring

via @inc

Like the Broncos signing Peyton Manning, getting the right person in the right role at the right time is key to the success of any organization.

 

Getty Image

Peyton Manning during a game against the Tennessee Titans at Lucas Oil Stadium

For football fans everywhere, but especially in Denver, the last two weeks have been a suspenseful ones. With Peyton Manning jetting around the country to be courted by general managers, coaches and potential teammates, all those in Broncos Country were keeping up with every article, post and tweet about what the future might hold for their team. Would the Broncos land the Super Bowl-winning yet injured star quarterback? And if so, what would happen to the celebrated young player that brought so much excitement to last season?

Those questions are answered now. I’ll reserve judgment, because for the Broncos management this was not an easy decision to make. In many ways, NFL teams are a good mirror of the corporate world. Sports metaphors in business might be cliché, but they are at times the best and simplest way to communicate fundamental truths. In this case, just as every team needs the right player for each position, so does your company.

That choice might be a difficult one to make. An ambitious, well-liked player with the right attitude and drive might not be able to take you to the Super Bowl or even the playoffs, for that matter. A veteran player that has led the team through many seasons may no longer be a good starting match-up against the opposing team. In business, just like in football, having the right person in the right role at the right time is critical.

Jim Collins, author of “Good to Great,” captured this business fundamental well. In order to be a great company, you must have the right people on the bus, sitting in the right seats. Conversely, the wrong people need to get off of the bus. In a company that is constantly evolving, which all companies should be doing, the right person for the bus is likely to change over time. Sometimes a person must switch seats and other times it’s best for that person to get off the bus–and in the finest cases they end up driving their own shiny, new bus that they will eventually fill with the right people too.

Keeping the wrong people on the bus or the wrong players on your team isn’t fair to anyone–the employee, coworkers and company or the player, fans and teammates will all suffer. It’s usually never an easy decision, but it’s the right one.

For the Broncos organization, signing Manning maybe wasn’t a hard decision. For the fans, there is a bit of excitement mixed with fear or confusion. Will Manning be ready and injury-free by the season opener? Who will be back-up, as Tim Tebow leaves the Broncos’ bus and jumps on a new one–a jet actually? Fans will have to trust that John Elway and crew are making the best decision for the team, just as employees will have to trust that decisions made by management, executives and owners will be best for all parties in the long run.

Why Working More Than 40 Hours a Week is Useless

For many in the entrepreneurship game, long hours are a badge of honor. Starting a business is tough, so all those late nights show how determined, hard working and serious about making your business work you are, right?

Wrong. According to a handful of studies, consistently clocking over 40 hours a week just makes you unproductive (and very, very tired).

That's bad news for most workers, who typically put in at least 55 hours a week,recently wrote Sara Robinson at Salon. Robinson's lengthy, but fascinating, article traces the origins of the idea of the 40-hour week and it's downfall and is well worth a read in full. But the essential nugget of wisdom from her article is that working long hours for long periods is not only useless – it's actually harmful. She wrote:

The most essential thing to know about the 40-hour work-week is that, while it was the unions that pushed it, business leaders ultimately went along with it because their own data convinced them this was a solid, hard-nosed business decision….

Evan Robinson, a software engineer with a long interest in programmer productivity (full disclosure: our shared last name is not a coincidence) summarized this history in a white paper he wrote for the International Game Developers’ Association in 2005. The original paper contains a wealth of links to studies conducted by businesses, universities, industry associations and the military that supported early-20th-century leaders as they embraced the short week. 'Throughout the ’30s, ’40s and ’50s, these studies were apparently conducted by the hundreds,' writes Robinson; 'and by the 1960s, the benefits of the 40-hour week were accepted almost beyond question in corporate America. In 1962, the Chamber of Commerce even published a pamphlet extolling the productivity gains of reduced hours.'

What these studies showed, over and over, was that industrial workers have eight good, reliable hours a day in them. On average, you get no more widgets out of a 10-hour day than you do out of an eight-hour day.

Robinson does acknowledge that working overtime isn't always a bad idea. "Research by the Business Roundtable in the 1980s found that you could get short-term gains by going to 60- or 70-hour weeks very briefly — for example, pushing extra hard for a few weeks to meet a critical production deadline," she wrote. But Robinson stressed that "increasing a team’s hours in the office by 50 percent (from 40 to 60 hours) does not result in 50 percent more output...In fact, the numbers may typically be something closer to 25-30 percent more work in 50 percent more time."

The clear takeaway here is to stop staying at the office so late, but getting yourself to actually go home on time may be more difficult psychologically than you imagine.

As author Laura Vanderkam has pointed out, for many of us, there's actually a pretty strong correlation between how busy we are and how important we feel. "We live in a competitive society, and so by lamenting our overwork and sleep deprivation — even if that requires workweek inflation and claiming our worst nights are typical — we show that we are dedicated to our jobs and our families," she wrote recently in the Wall Street Journal.

Long hours, in other, words are often more about proving something to ourselves than actually getting stuff done.

Are your 55+ hour weeks really productive and sustainable?

Jessica Stillman is a freelance writer based in London with interests in unconventional career paths, generational differences, and the future of work. She has blogged for CBS MoneyWatch, GigaOM, and Brazen Careerist. @EntryLevelRebel

How Peer Advisory Groups Can Change The World

By Leo Bottary

When you consider the nature of today’s public discourse – with the right screaming at the left and the left shouting at the right – you hear the noise loud and clear, but no one is ever really listening.  And if they ARE listening, it isn’t to understand the logic behind an opposing argument; it’s to collect punch lines that bolster one’s own point of view.  People listen selectively for ammunition they can repeat at cocktail parties or share in blog posts.  I call it ammunition because it rarely serves to strengthen one’s own position; instead, it’s aimed at shooting holes in another’s point of view and, too often, in a fashion that’s intellectually dishonest.

One of my favorites attributes of the Peer Advisory Group is that it is a safe haven for what scholars would describe as “skilled discussion.”   It’s a place where people see others as special rather than different. A setting where participants really listen to one another.  And more importantly, an environment that embodies Stephen Covey’s 5th Habit, “Seek first to understand, then to be understood.”  It’s not the place for debate – where the goal is to be right.  Nor is it the place for pure dialogue, because helping members come to a decision is an essential benefit of the interaction.  It is where skilled discussion lives and thrives!  Here’s the best definition I’ve found for it:

“A way of talking that leads to decisions. Skilled discussions are infused with rigorous critical thinking, mutual respect, weighing of options, and decision making that serves the groups’ vision, values, and goals. A skilled discussion’s goal is to reach decisions. In its Latin roots, decide means to kill choice. Thus, a discussion is aimed at eliminating some ideas from a field of possibilities so that stronger ideas will win. Groups who are skilled at discussing employ many cognitive operations related to critical thinking, but not in any particular sequence.

“In its most ineffective form, to discuss is to hurl ideas at one another. Discussing ideas, in unskilled groups, often takes the form of serial sharing or advocacy. Decisions are attempted through a variety of either voting or consensus techniques. When discussion is unskilled and dialogue is absent, decisions are often poor quality, represent the opinions of the most vocal members or the leader, lack group commitment, and do not stay made” (Garmston & Wellman, 1998).

While the noise of today’s public debate may spike television ratings, it’s a poor excuse for communication in a civilized society.   It’s a recipe for gridlock and division.  Give me skilled discussion any day.  Peer Advisory Groups can’t change the world, but what we learn from them and how we can lead and inspire others to communicate based on that experience, could make a big difference.  People who regularly participate in these groups will tell you that for them, it already has.

5 Digital Marketing Trends You Can’t Afford to Ignore

By Jonathan Gardner

Digital marketing is a discipline in flux. We face an onslaught of shiny new technologies and platforms that promise to “change everything.” Marketers are creating similarly breathless headlines, proclaiming the next revolutionary devices/apps/social networks.

Yet, even smart marketers don’t know what changes the future will bring; but they do need to be aware that their industry is changing every day. For instance, to reach consumers marketers need to be increasingly mobile, engaging, relevant and aware of the contexts in which we currently operate.

I don’t pretend to know the future. But the decisions and products of Apple, Amazon and other innovators will affect how we live in the years to come. As we anticipate our connected, Minority Report-style future, here are five big marketing ideas to embrace now to get ahead of the curve.

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1. Location Services

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Consumers are out there and many want you to find them. Location features of social apps such asFoursquare, Ban.jo and Path are potential goldmines of important consumer data. The near field communication (NFC) technology in products like Google Wallet is just starting to show its potential. And while privacy issues surrounding location services will need to be resolved, consumers are still demanding that marketers understand all of their daily contexts and find ways to make their lives easier. If the rumors are true and the iPhone 5 has NFC embedded, expect these features to go from leading edge to mainstream.

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2. New Ad Formats

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While new online video and mobile platforms are — unsurprisingly — attracting a lot of heat, their marketing spend is still way out of whack, compared to the amount of time consumers spend there.

Don’t just throw money at these new channels. Instead of pre-roll video ads and other “forced view” options, look to user-initiated solutions that respect the user’s time and interests. Research new ad formats that help brands look beyond clutter and “banner blindness,” such as in-image ads, which integrate brand messages elegantly within relevant content.

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3. User-Generated Curation

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User-generated curation (UGC) is powered by content discovery apps such as Pulse, Flipboard, Fancy and Foodspotting. Content producers and merchants provide the feeds, and consumers tweak them to suit their interests and contexts, filtering data and curating personalized information platforms.

These models can help brands become relevant to consumers and provide the next great opportunities for marketers. For instance, Pinterest has received applause from consumers and marketers alike, and has demonstrated the power that personal curation and relevance can have for engagement.

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4. Advertise by Format

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Everyone is excited about mobile’s potential, and tablets present appealing platforms or consumer engagement. If you’ve decided to advertise on mobile apps, what are you going to do with the user after you get him or her to tap? Will you use the platform to its full potential? Or will you roll out the same old display strategy you’ve been using online, praying that users will choose to interact with your ad?

It’s time to get creative and imagine the new possibilities. Media industry guru Ken Doctor points to innovative advertisers who take advantage of the iPad’s unique format. “What’s better for an insurance company like Liberty Mutual than threatening you with disaster (tornado, earthquake, flood) and then, by simply tilting your iPad see the damage magically disappear,” he poses.

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5. Integrated Marketing

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Being relevant to your customer in every context improves brand recall and enhances engagement. Ditch the silos in your advertising strategy (e.g. this is what consumers watch on TV vs. on their phones) and focus on the most important thing — your customer.

In this increasingly interconnected world, consumers are not necessarily thinking in terms of silos. Researchshows that 72% of consumers want to be engaged with an integrated marketing approach, but only 39% are receiving that. Google found that consumers had 74% brand recall when the advertiser’s integrated strategy carried across mobile, TV and online.

While the world is not yet seamless, QR codes and “bridging” apps like Viggle deliver second screen relevance, and can help marketers unleash multiplatform, integrated relevance.

Today’s profound advancement in tech and media is changing how we interact with and filter our world. Smart marketers can succeed by engaging with the trends that are resonating most with the emerging consumer of today.

Jonathan Gardner is director of communications at ad company Vibrant Media. He has spent his career as an innovator at the nexus of media and technology, having worked in communications leadership roles and as a journalist around the world.

Image courtesy of iStockphoto, tetsuomorita

Six Strategies for Partnering with Big Brands

BY JANE PORTER, Entrepreneur Magazine

Tom Szaky didn't even try to get his product--a worm excrement fertilizer packed in a recycled bottle--into small retailers when he started TerraCycle six years ago. Instead, he reached as high as he could: Wal-Mart. "If I want to be big and do it quickly, the best way … is to work with the world's biggest companies," he says. "They can accelerate your cycle much more quickly than any other company can."

The Trenton, N.J.-based conpany's first big partnership with Wal-Mart in Canada was just the start of what has become a $14 million business. TerraCycle now gathers unrecyclable trash and converts it into products and packaging for such big brands as Kraft, Pepsi and Mars. Last year, corporate partners spent $45 million on TerraCycle-related marketing--far more than Szaky could have ever done alone.

But breaking in with big companies is no easy feat. For Szaky, it took lots of research, persistence and trial and error. "The biggest mistake small companies make is they don't do enough homework," says Brant Slade, co-author of Think BIG!: An Entrepreneur's Guide to Partnering With Large Companies (Course Technology PTR, 2009). "They think … more from the small business point of view as opposed to thinking from the large business point of view."Here's a checklist to help your business prepare to partner with big brands:

1. Be unique. Make sure your business pitch is carefully thought out and offers value to your potential partner. After Robin Thurston co-founded MapMyFITNESS.com, an Austin, Texas-based fitness social network that offers online routes, training and group activities, he and his partner realized they had developed a geo-location technology that bigger companies wanting online fitness tools and access to a social network could use. With their first corporate partner, Cadbury's Accelorade sports drink, they collaborated on a web interface enabling users on their site to map and share workouts. "You have to have something that is clearly valuable to that big brand that they might not want to spend the time investing in or doing," Thurston says. Now, the company also builds web platforms and mobile phone apps for brands like NBC Sports, Humana and Skechers, whose customers can opt into the MapMyFITNESS social network.

2. Remain persistent. Although Szaky had the worm-excrement-in-a-recycled-bottle market cornered, getting that first deal with Wal-Mart in 2005 still required persistence. After scouring LinkedIn and alumni networks to find the right contact, Szaky called Wal-Mart 10 times a day, every day for three weeks until he finally got through and set up a meeting. Big companies field lots of requests, so persistence is a must. "There are some brands we are working with today that literally were five-year conversations," Thurston says.

MapMyFITNESS co-founders Robin Thurston and Kevin Callahan, Photo credit, Target Brands Inc.

3. Think big. You have to think like a big brand to partner with one. For MapMyFITNESS, that means developing large-scale projects. "A big brand doesn't want to talk about a $10,000 project," Thurston says. "They want to talk in seven figures and really big user numbers." For example, Thurston and his partner proposed that big companies give away their product with subscriptions to the MapMyFITNESS website. The size of their user base--nearly seven million today--was large enough to interest brands like Procter & Gamble's Febreze.

4. Plan for fast growth. If you're growing too quickly to keep up with demand, you'll lose money--and probably your partner. Szaky learned that lesson through experience. "The more we grew, the more we lost," he says. While TerraCycle's sales reached $6.6 million in 2008, it had a net loss of $4.5 million. The next year, Szaky began developing agreements with companies to handle production for him. Today, 40 companies make and sell TerraCycle products for major retailers and TerraCycle turned a profit of $100,000 in the last year.

Polka Dog Bakery, a Boston-based dog treat maker slated to expand into 1,763 Target stores this May, let the retailer oversee production and distribution in order to make the partnership feasible. "It would have been too much for us to expand at that capacity," says cofounder Robert Van Sickle of his 11-person company.

5. Prepare for scrutiny. Make sure your financial and legal affairs are in order. Since TerraCycle works with multinational companies, the company gets audited every two months. After failing the first few audits in his early partnerships, Szaky realized he needed to focus more on developing proper procedures. "If you are going to go down the path of working in big businesses, having your house in order is critical," he says. "You are going to get the growth but you are also going to get a lot more scrutiny."

6. Build on existing partnerships. Don't rush to find the next partner once you successfully link up with a big company. MapMyFITNESS gets a lot of new business from expanding existing partnerships, Thurston says. Companies are often more willing to consider developing a licensing partnership, for example, if they're already buying advertising on your website. "Too many entrepreneurs chase after the next client instead of recognizing the current client could mean a lot more revenue for them if they simply explore other revenue channels," Thurston says. Partnerships now account for a third of his company's total revenue.

Why We Dare To Be Average

By Leo Bottary

Jim Collins offers his perspective in the opening line of his second book by stating, “Good is the enemy of great.”  He explains that we don’t have great government or great schools because we have good government and good schools.  Somehow good enough is good enough, I guess.  In researching and writing about peer advisory groups, I’ve talked to countless members who extol the virtues of their culture of accountability – implying that left to our own devices, most of us dare to be average and we are perfectly content in doing so.  Sadly, they’re right.  I’m sure you’re bristling at the mere suggestion, but ask yourself if you’re doing everything you can do to be at the top of your game every day.  If you’re like most people, the answer is a resounding “no.”

Joe Henderson who writes about running, tells us, and I’m paraphrasing, that it isn’t about doing anything super human; it’s about people doing the things anyone can do, but they just don’t.  Think about how powerful that is.  I spent some time meeting withChris Brogan last week, who I regard as an amazing example of someone who combines his talent with a relentless work ethic and an unwavering commitment to excellence.   He dares for something much more.  Chris is dedicated to his work in a manner most of us are not, which is among the reasons he’s successful, and why we’ll be hearing much more from him for years to come.

But what really prompted this post for me was seeing Cirque Du Soleil perform Ka` at the MGM Grand a few nights ago.  I didn’t know a great deal about the show until reading about it after the performance.  The LA Times review confirmed my belief that it “may be the most lavish production in the history of western theater.”   Of all the amazing live performances I’ve ever attended, I’ve never witnessed such a profound example of excellence.  I thought about how this amazing ensemble comes to work and performs this show twice a day, five days a week.   Then I considered the $220 million investment in the theater and the production and all the people who make it happen at such a high level each and every night.  The vision, creativity, teamwork, and flawless execution is in part a result of superb talent, but I would suggest it’s also largely because of people doing what anyone can do, except they actually do it!  Imagine a country where our government, our schools, and our businesses performed at this level.

Contrast Collins’ explanation of good being the enemy of great with the concept of perfectionism and the familiar quote from Voltaire translated literally as “The best is the enemy of good”  or more commonly expressed as ‘The perfect is the enemy of the good.”  The quote references the paralyzing effect of the pursuit of perfection. It’s where the hope to implement the perfect solution can result in no solution at all. So is good the enemy of great? Or is the pursuit of perfection the enemy of good?  Seems to me, they are two sides of the same coin.  Neither is an excuse for daring to be average.

So how will you dare to be more than average?  Start with a single act.  (This is what I’ll try to do).  Bring your A game to writing your next proposal or presentation and, when you think it’s finished, ask yourself how you can take it to the next level.  Do something simple, yet extraordinary for one of your customers.   Inspire an employee to improve upon his/her greatest talent, rather than address an irrelevant weaknesses.   There are a million things you can try.  See how it feels, enjoy the results, and just keep at it – each and every day.

Tell us how you will pursue what we’ll call the practice of Ka`?

The Power of “The Pause”

By Dwight Frindt

Culturally, we are in a hurry, particularly in business. There is a huge driving force for results, for achievements, for action. Often just being busy looks like success. It’s gotten to the point that, as researcher Brene Brown says, “exhaustion has become a status symbol.”

The problem is new research is emerging and it looks like all this multi-tasking, fragmented attention and “busy, busy, busy” isn’t actually healthy or the recipe for success. Being in a constant state of reacting to “incoming” and jumping to respond to everything that comes your way is not leadership and constantly driving people and yourself relentlessly forward is not necessarily great leadership either.

We want to remind you of “the power of the pause.” This is a step that can be made anytime, anywhere and requires no special tools or equipment. Being able to stop yourself, gather your energy and breathe is actually an incredibly powerful and masterful leadership move that is deceptively simple.

We aren’t talking about shutting down, withdrawing, hiding or freezing. We are talking about returning to your center and a place of balance. We are talking about allowing yourself to exhale fully, (since at the pace most of us go we are halfway holding our breath), and just being thoughtful and reflective for a minute or two.

If you doubt the power of this consider the recent interview Oprah Winfrey did with Sheryl Sandberg of Facebook. (Click here to view.) Apparently she has a policy at her company for twice per day mandatory meditation time. As she says in the interview, many people are overwhelmed by the idea of meditation so she asks that they at least unplug, and take quiet time for reflection. Whether or not you are an Oprah fan or consumer of her programs and magazines is not really important here. She is one of the most successful entrepreneurs in the US and has been so for many years. It is of note that someone who has built such an empire puts so much value on reflection and quiet time that she has made it a mandatory workplace policy.

We know of one coaching client that was so overwhelmed at the idea of any stillness, quiet or reflection that he wanted to flee the building just considering it. He finally agreed to set the alarm on his watch for 1 minute each hour to stop, breathe and just slow down. After committing to this practice he absolutely loved it and was able to create specific segments of time to gather his energy and pause.

So we ask you to consider incorporating “the pause” into your repertoire. Even just a couple of minutes per day has value. You might be surprised how changing your pace creates new avenues for creativity, intelligence and other positives to emerge.

The "4 C's" successful CEO's should cultivate

Peer support and networking are critical in any role, but where do CEO's go to share their challenges and look for direction and support? Vistage International is the largest CEO organization in the world with over 15 000 members. Rafael Pastor, Chairman and CEO, shares his thoughts on brand, networking, and the "4 C's" successful CEO's should cultivate.

Source: videos.ceoshow.com via Tom on Pinterest

They Know You're Reading This

via @ Forbes by Dave Pell, Contributor

I was recently complaining to a teller at my bank that another bank down the street had given my 3-year-old daughter a stuffed horse for nothing more than walking past the front door. I jokingly asked her what gifts my own bank would be willing to offer to compete for the affections of my daughter. Then I said, “Oh, you probably don’t like it when I mention the competition when I’m in here, eh?”

She surprised me with her answer. She said that she had her checking and savings accounts at that competing bank and that she’s always found its service to be great. I was surprised. Why would a teller at one bank do her own personal banking at another bank down the street?

She told me that most of the tellers she works with have their accounts elsewhere because they don’t want friends and colleagues at their own bank to have access to their private information.

The exchange was a clear reminder that privacy issues are everywhere. Anytime you share any information with anyone or any institution, you should expect it to be shared in ways you never expected.

This week, the top story in the Internet world was that the mobile social network Path had been uploading users’ email contact lists to its servers. The purpose of the upload was to make it more likely that users would find friends and colleagues who were also on Path. The problem was that Path was uploading the email data to its servers without users knowing it. A firestorm of criticism erupted. And within a day or so, Path responded by putting a stop to the offending practice and deleting every email address they had collected.

Path deserves credit for the swift and appropriate response to the criticism it faced. But the whole incident was one more reminder that almost everything you do on the Internet puts a dent in your personal privacy, whether you’re aware of it or not.

When I first heard about Path’s plan to delete all the email addresses it had collected, I wondered if Facebook would respond by agreeing to delete those embarrassing photos from 2006 that you already manually deleted 6 times in the past. As it is now, the photos you delete from Facebook never really get deleted. They’re still accessible via direct link (and of course, by anyone at Facebook who has access to the data). Once you put something on the Internet, you should assume it will be somewhere out there forever.

Maybe that’s no big deal when were talking about a few collegiate kegstand photos that you’d rather forget. But it is a big deal when you consider that almost everything you do or share on the Internet is being tracked by someone.

The Path story got big because it’s exceptional in two ways. First, thanks to one guy who wrote a blog post, we all were made aware that Path had a policy of borrowing your email contacts without your consent (and that iPhone apps easily allow for such a transgression). And second, when confronted with valid complants, Path acted swiftly to change its policy and right its former wrongs.

There’s nothing all that exceptional about the notion that your data is being collected and saved, and that just about every click you make and every piece of data you share is being tracked by Internet companies and the marketers who pay their bills. Companies like Facebook are so valuable precisely because of the effectiveness with which they transgress your privacy and piece together a portait of you that can be sold to advertisers.

Pennsylvania professor Joseph Turow explains how you’re tracked in the modern world.

Websites, advertisers, and a panoply of other companies are continuously assessing the activities, intentions, and backgrounds of virtually everyone online; even our social relationships and comments are being carefully and continuously analyzed. In broader and broader ways, computer-generated conclusions about who we are affect the media content — the streams of commercial messages, discount offers, information, news, and entertainment — each of us confronts. Over the next few decades the business logic that drives these tailored activities will transform the ways we see ourselves, those around us, and the world at large. Governments too may be able to use marketers’ technology and data to influence what we see and hear.

They are watching. And they know you’re reading this right now.

And it’s not like you can just go offline and avoid the tracking. If you get a postcard advertising a lung cancer screening from your local hospital, it’s not by coincidence. Everything about the offline you is being shared across corporations as well. In the age of data mining, it just takes a few clicks to piece together enough information about your age, address, income, and insurance status to figure out if you’re a likely smoker and therefore a good target for a lung screening pitch.

I have a friend who used to fill out nearly every online and offline form with a different title (Mr, Mrs, Dr, prince, king…). Then over time, he tracked the mailings that came to him with those various titles attached. Over time, he could easily track who sold what information to whom.

Today, it wouldn’t even make sense to try to keep up. We share our data with everyone and everyone is sharing our data with everyone else.

It’s worth putting this Path story into this broader perspective and reminding ourselves that we are only at the tip of personal data mining iceberg. By the time my 3 year-old daughter is my age, she might walk into her bank and have the teller ask: “Hey, didn’t we give you a stuffed horse back in 2012?”

Dave Pell writes the NextDraft newsletter, a quick, entertaining look at the day’s most fascinating news.

3 Numbers All Entrepreneurs Should Know

In the early days of a startup, it can be tough to find good data to help with decision-making. Put a priority on these three numbers, and you'll be fine.
By Don Rainey

To make good decisions, you need good data. That’s a given, right? But in a start-up, what data should you be looking at?

In the early days of a startup, sometimes there isn’t much to measure. A comparison of this year’s sales compared to last year’s isn’t all that helpful if you’ve only been around for eight months. But that doesn’t mean you shouldn’t start collecting data right away.

So where can you find relevant information?  As an investor, I would offer three metrics that will give you some insight into your current operations and help you do some short-term forecasting. For most small companies, this will be a good step toward focusing attention on the information that will lead to informed decisions.

1. Pipeline coverage

The sales pipeline is a listing of all your sales prospects. Typically, you’d include the projected sales amount and estimate the probability of success for each account. You’d update the information regularly.

Sales pipeline coverage is a fraction. The total amount in your pipeline is the numerator, and the sales goal is the denominator. So sales pipeline coverage measures everything in the sales pipeline against the sales goal. As the business matures, you’ll get better at estimating closure rates, and you’ll be able to tie closure rates to milestones. If you’ve only had one meeting with a particular customer, you might assign that deal a 20% chance of closing. Once the customer has agreed to pricing, you might bump that up to 50%.

In practice, you want your pipeline coverage to be over 2.5x. That should virtually assure you make your target, as long as you’ve got a reasonably competent sales effort and have done a good job qualifying your customers.

2. Sales per employee

This metric is simple enough, and it’s good for businesses of all sizes. Just take the gross sales number and divide it by the number of employees. Since small businesses typically scale too fast ahead of their prospects – the optimism of entrepreneurs is both their blessing and their curse – sales per employee is a critical measure within growing companies. Warning: Once you start focusing on this number, you’ll quickly see the intrinsic appeal of hiring salespeople over other personnel.

3. Customer payback period

The very best metric for evaluating your business, customer acquisition cost, takes a while to assess. Ultimately, everything your business does will either make sense or not depending on how much it costs you to acquire a customer. If you can acquire customers cheaply or profitably, you will do well.  

At first, customer acquisition cost is just a rough guess. But once you have that in hand, you can start thinking about the customer payback period. If the cost to acquire a customer is known, the logical question is how many months it will take to recover that cost. 

The value of this metric lies in its ability to help you figure out how much money you need to grow and how profitable your company is likely to be. Put another way, how many customers can you afford to acquire with your existing capital or operating profits?  How much growth can you support? Growth is more capital-intensive than failure. The length of your customer payback period gives you a window into your growth potential.

The beauty of these three metrics is that they apply universally. CEOs can use them to better understand what’s working and what needs to be changed in order to meet short and long-term goals. For a company seeking outside funding, knowledge and management of these metrics is critical to allowing investors to understand your business and potential.

Peer Advisory Groups Bring Out the Best in People

by  Leo Bottary

Vice President Biden tells a story of when he first entered the U.S. Senate, shortly after his 30th birthday. Upon his arrival, he tended only to see the differences between himself and many of his 

Republican colleagues and quickly developed contentious relationships with those with whom he disagreed.  Montana Senator and Majority Leader at the time, Mike Mansfield, took Biden under his wing and explained that in the Senate, “We have to work together despite our differences.”  He told Biden that every Senator was elected by his constituents because those constituents saw something inherently good in that member. He challenged Biden to do the same – to find the good in each of his Senate colleagues, no matter how vehemently he may disagree with them.  Biden followed that advice and rather than focus on partisan differences, he looked for common ground.  By doing so, he discovered the good in each of his colleagues.  Over time, despite a rough start, they discovered the good in him as well.

First impressions can be fraught with judgments about differences and unfair speculation about what motivates those differences.  Too often, people don’t move past that stage, at least not very quickly or easily.  Peer advisory groups are hard-wired for helping us seek out the good in others because it’s why we are there in the first place.  We’re looking for the value our peers bring to the room.  By listening, learning, and opening our minds to new ways of thinking, we see our peer group members for their pluses, rather than their minuses. Covey’s Habit #5, “Seek first to understand, then to be understood” could not be more apropos.  As peer advisory group members, we don’t look at others for what makes them different; we look at our peers with an eye for what makes them special.  It’s a big reason peer advisory groups accomplish so much.  And best of all, it influences the way we look at everyone in all aspects of our lives.

On Friday, I participated in a peer advisory group session with my marketing colleagues at Vistage.  Everyone at that table is so special in his or her own right.  They have so much to contribute, both to the individuals in the group and toward our common purpose as a leadership community.  I learn so much every time I’m around them.  It’s one thing to hear Joe Biden’s story and understand the lesson.  It’s quite another to stick your hands in the clay, so to speak, as a peer advisory group member and experience it for yourself.  It’s just one more reason this brand of interaction is so meaningful.

Imagine if we had a few Mike Mansfields coaching legislators on both sides of the aisle on Capitol Hill.   If that happened, Congress might actually accomplish as much in 2012 as our group did on Friday.

Facebook's IPO: More Yahoo than Google?

Facebook comes out at $100B valuation (27X revenue, 100x earnings!) with only $3.7B in revenue, 12% of that comes from Zynga (ie Farmville).  Google has a current valuation of $150B on $28B in revenue... not a bet I would take :)

Facebook's IPO: More Yahoo than Google?

By

Erik Sherman

(MoneyWatch)  

COMMENTARY There is so much hype around Facebook that it can be hard to put the numbers, and company, into perspective. But for all the new age talk of connecting people, it's still a business -- one that largely makes its revenue from advertising. Now Facebook filed for its IPO and there are some figures to look through.

But even then, to understand Facebook, you have to see how it compares to other companies as Google (GOOG), Yahoo (YHOO), and AOL that are in the same business of using the Internet to attract users and then sell ads. When you do, you see that Facebook is really more Yahoo than Google, at least for now. That's particularly true in that the company needs a different way to make money than it has used. Without a significant change in strategy, it will likely top out in the near future.

Facebook in a nutshell

There has been extensive speculation and leaks about how Facebook has been doing. But now it's time for guessing to move to the side. In 2011, the company had revenue of $3.71 billion. That compares with the previous few years as follows: 2010, $1.97 billion and $777 million in 2009. That was 154 percent growth between 2009 and 2010, with 88 percent growth between 2010 and 2011.

Of course, as such companies as Groupon (GRPN) and Pandora (P) have shown, revenue can mean little without at least a move toward profitability. Facebook actually made a profit in all three of its reported years. In 2008, net income was 29.5 percent of revenue. In 2009, it was 30.7 percent. It dropped to 26.9 percent last year. The company ran at a net loss in both 2007 and 2008. Clearly, though, this is a business model that works far better than Groupon, Pandora, and some other Internet companies that recently went public.

Another way to look at the company is revenue per user. If you take Facebook's own claims of 800 million active users and look at the last six months of revenue, to match up with more recent revenue, you get $1.7 billion for 800 million users over six months. Project that to a full year and it's $3.4 billion for 845 million users, or $4.02 per user per year -- and that includes both ads and other revenue, which, according to Facebook, really means the company's cut of what Zynga makes.

The competitive landscape

How does Facebook's financial performance compare with other companies that depend on online ads for revenue? Start with Google. Last year, the search giant came in with $37.9 billion in revenue. Of that, $36.5 billion was ad revenue. According to the company's quarterly earnings announcements, traffic acquisition costs (TAC), which is the amount of revenue that Google's partners get, ran around 24 percent. Take out all costs of revenue and you still have $24.7 billion, or 65 percent gross margins. Given Google's approximately 1 billion users, that Google's is $36.5 in ad revenue per user. The company's market cap is about $189 billion.

Yahoo had roughly $5 billion in revenue last year. Granted, that amount has been falling -- it was down about 21 percent from 2010. Revenue without TAC was $4.4 billion. Gross profit was about $3.5 billion for gross margins of 70 percent. Yahoo's market cap is $19.2 billion. It's the mid-tier player that is about a tenth the size of Google. Yahoo still quotes 2004 numbers that it has 274 million unique users. That would translate to $16.06 per user per year.

AOL had a total of $2.2 billion in revenue, of which $1.3 billion was advertising. Overall gross margin was just under 28.1 percent. AOL has a $1.6 billion market cap, making it a little under a tenth the size of Yahoo, or two orders of magnitude smaller than Google.

Another Yahoo?

Facebook is growing quickly. In that sense, it leaves Yahoo far behind. The company is also comfortably profitable, which will drive up the IPO price. But given the comparative sizes of their revenues, Facebook's growth is disappointing compared to the nearly 30 percent revenue growth -- virtually all ads -- that Google saw between 2010 and 2011.

Facebook may also be reaching the end of the growth it can expect from its current strategies. The company claims more than 800 million active users. Some evidence suggests that thenumber of users is flattening and that it is reaching a maximum of what it can expect.

In the middle of last year Facebook missed internal revenue projections by $500 million, or about 25 percent, and that was with its old growth in users. Even if the company does grow larger than Yahoo, unless things change significantly, it may only become a company that falls far short of what Google has obtained.