How To Get A Handle On When Your Company Is Gaining Momentum

One thing successful entrepreneurs seem to be able to sense is the moment when momentum is building but is not yet apparent, and not giving up just before you start moving. Here's how to strengthen that sense.

My arms were aching from hoisting my daughter, like a human forklift, across the ice, circling the Dorothy Hamill Skating Rink near my home in Greenwich, Conn., during the “open skate” period amid a swirl of townspeople. So I decided to try something else — to actually try to teach her to ice skate, if only to relieve my pain.

I told her to point her skates outward like a “V”, then wobble from her left foot to her right and back “like your little brother does when he when he is dancing.” I know that this method works. If you do it about four times—left-right-left—you start moving. But the issue is that until you do it four times, you don’t realize that you’re building momentum and that you are about to move. So each time my daughter followed my instructions, she gave up after three times, and figuring it wasn’t working, fell back into my arms.

Is this not the trick to success in life and in business—knowing momentum is building; not giving up just before you start moving? Your reputation is spreading but you can’t hear it, a big client is about to call but hasn’t yet picked up the phone, an investor just decided to invest in your dreams but has not had a chance to tell you yet.

How do you know you are on the path? One key is to know and trust the signs.

Fred Lizza knows how to read the signs. He’s been the CEO of five fast-growing technology companies—Infinium, Idiom, Avotus Corporation, Optiant, and now Dydacomp, a software firm that helps small to mid-sized companies automate their fulfillment and direct marketing processes. When Fred joined Dydacomp 24 months ago, the company was in transition. Today, their solutions help small businesses serve more than one million online shoppers per day, linking their orders with more than $4 billion of inventory and submitting over $8 million in daily invoices.

When new investors asked Fred to step in as CEO, Fred saw that Dydacomp was on the path. Here are the signs he read:
1.Dydacomp was at an inflection point, but not in need of dire turn-around. “I don’t like financial turnarounds,” Fred told me.
2.Small and medium-sized businesses comprise more than 50% of consumer sales in the United States and nearly 50% of these are closed using online channels. Both of these factors should grow.
3.The people who run the online businesses are getting more sophisticated. As large retailers shrink, they shake off “reluctant entrepreneurs,” seasoned executives who realize they are better off starting their own enterprises. They are used to having access to sophisticated inventory management systems integrated with sales and marketing systems—exactly what Dydacomp delivers.

These three factors gave Fred the confidence to believe that Dydacomp had an opportunity, in his words, to be “the leader of the middle space.” The front-end (order taking) already has a clear leader. The back end does as well (Quickbooks). But no one has yet claimed the leading position in the middle, where orders meet fulfillment and link to back-end systems.

When Sun Tzu wrote “The five elements (water, fire, wood, metal, earth) are not always equally predominant; the four seasons make way for each other in turn. There are short days and long; the moon has its periods of waning and waxing,” I believe he was speaking precisely to this skill that Fred and other successful entrepreneurs develop: knowing when the wind is blowing in your favor and then putting up your sail. Digging into Sun Tzu’s “five elements” framework, which I detailed in my third book, (http://www.amazon.com/The-Way-Innovation-Elements-Organization/dp/1598693794/ref=sr_1_1?ie=UTF8&qid=1360108591&sr=8-1&keywords=The+Way+of+Innovation]The Way of Innovation, here are five questions you can ask to help assess whether the wind is behind you and it’s time to surge forward, or whether it is time to change direction.

1.Metal/ Discontent: Is there sufficient discontent to make people want to embrace your innovation? Dydacomp’s “reluctant entrepreneurs” have created this.
2.Water/ Imagination: Is there a sufficiently compelling vision of the future you are pursuing? Dydacomp wants to lead in the middle space and “that is what wakes us up on the morning,”Fred says.
3.Wood/ Formation: Do you have or are you pulling together the elements you need to build what you want to build? Dydacomp has inventory-order integration system with 20 years’ of development behind it.
4.Fire/ Breakout: What trends will fan your spark and ignite the wood? Dydacomp’s strategy is supported by key trends like the growth of small and medium-size e-commerce.
5.Earth/ Consolidation: What sustainable sources of competitive advantage will you be able to put in place to protect your innovation? Dydacomp sees the middle space as supporting one major player. Narrow spaces do this. Wide open spaces (like mobile phones) usually encourage lots of equal players.

Finally, as you feel the wind and decide whether to raise or lower your sail and how to set your course, consider the wisdom Lao Tzu, the grandfather of Taoism. “Life is a series of natural and spontaneous changes. Don’t resist them—that only creates sorrow. Let reality be reality. Let things flow naturally forward in whatever way they like.”

If my daughter could have dropped the grin from her face for a moment to speak, as she slid effortlessly for the first time across the ice, I think she would have said she agreed.

[Image: Flickr user Matt Reinbold]

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