The Science of Getting Rich and Creating Wealth >> Make Money Online With Bob Parsons >> Secret of The Millionaire Mind on Business The Secret of The Millionaire Mind
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| If your business needs a jump start or maybe you need help in starting a business, keep reading! Bob Parsons is going to walk you into the vault and reveal another Secret of The Millionaire Mind that will definitely supercharge your business dreams. | ||
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Being successful and staying successful are two different things.
It’s one thing to make a business successful. It’s entirely another challenge to keep it successful. I believe that there are few human endeavors in this world that are truly static. There are two conditions in which you’ll find any business. It is either getting better or, it is getting worse. The amount of change you experience during any particular day will typically be small. However, over time the differences will be tremendous.
We all know once great businesses that have since disappeared.
It’s not very difficult to think of once great businesses that deteriorated throughout the years, and are now gone. A few that come to mind are Montgomery Ward and Pan American Airlines. There are those that would argue that it was changes in the economic environment that eliminated both of these once proud businesses. To a certain degree, that’s correct. However, I would point out there are companies that compete in these markets today that are doing very well. I believe the real problem was that the management in both of these companies simply allowed them to erode. They quit reinventing their companies, they stopped improving, and simply became worse and worse until they were no longer viable.
One of the beauties of our economic system is that it rewards enterprises that continually improve with more and more business, and it tends to increasingly ignore and eliminate those that worsen. Knowing this, you need to put this rule to work and make it an advantage.
Every business needs to improve a little every day.
It’s not difficult at all. The responsibility, of course, rests with you. It’s your job to make sure each and every employee in your organization understands that they all should have one simple charter. At the end of the day, in some small way, they need to be a little better. I ask my managers on a weekly basis to tell me how their areas have improved. And I tell them that this is how they can tell how good a job they are doing. I tell them that when they go home at night, if their department is better than it was the day before — at least in some small way — then they have done their job.
The prime driver behind Parsons Technology and Go Daddy.
It was the application of this rule that helped Parsons Technology grow from a little startup in my basement, with just my wife and I working the business, to a well respected software development and marketing organization with a 4% share of the North American software business (in terms of units sold). The rule also is the prime driver behind The Go Daddy Group, starting from scratch in November 2000 as a domain registrar, and today being the world’s largest domain name registrar.
The one thing that I’ve done at both companies, Parsons Technology and Go Daddy, was to reinvest the lion's share of the profits back into the business. At Parsons Technology, we were always on the lookout for new products to develop, and as soon as our existing products generated enough extra cash, we used that cash to hire new development teams to work on our new products. As soon as those new teams finished their products and we were able to market them and turn additional profits, we immediately invested those additional profits into hiring new teams to create yet more additional products.
Eventually, Parsons Technology turned into a cash machine and our rate of growth and release of new products became tremendous. Obviously, not every new product we developed turned into a best seller. Every once in a while, my intuition was dead wrong and we developed a product that didn’t sell at all. During my time at Parsons Technology, we developed only two such products that my marketing staff often joked were solutions without problems. By and large however, because I spent so much time close to my customers and listening to what they wanted, most of the products we developed were winners.
Parsons Technology released a new product or major upgrade every 5 ½ calendar days.
Eventually, Parsons Technology turned into a development powerhouse. Our rate of new product development and existing product improvement was, to the best of my knowledge, among the best in the world. When my wife and I sold the company, we were releasing new products or major updates to existing products at the rate of over 1 release every 5 and ½ calendar days. Quite often, our marketing department had difficulty keeping up with the new products we were releasing. I can tell you that this is a wonderful problem to have.
| A vital secret of the Millionaire Mind is: Always be moving forward |
It’s important to realize that this rule — “Always be moving forward” — needs to extend not only to new products, but it also must apply to existing products, and to all other areas of your business. At Parsons Technology, we continuously worked to improve our products; the same is true at Go Daddy. This idea isn’t mine. I give credit for this rule to Bill Gates of Microsoft. I noticed over the years that it is rare that Microsoft gets it right the first time they release any new product. However, because they never stop development on their products, eventually they get it right and eventually their products become either the best available in their particular category, or one of the best.
Every area in your business can benefit.
Beyond product development, this rule should also be applied in every other area of your business. I can immediately think of countless examples in both Parsons Technology and Go Daddy where little improvements eventually wound up making big differences. One example that comes to mind took place in our shipping and manufacturing operation in Parsons Technology.
The internet was just getting going back when Parsons Technology came into it's own.
Parsons Technology dealt in shrink wrap software. There really was no internet back then (what did exist back then was in its infancy and was only used by individuals on the ARPAnet, and certainly wasn’t used for commerce). That meant that everything we sold had to be manufactured, packaged and shipped. In some ways this sounds easy, but I can tell you that after you have a few dozen products and those products are being sold in many combinations, the challenge of managing this effort — manufacturing, warehousing and shipping them — quickly becomes daunting.
Our shipping systems were once very elementary.
At first, we had a very elementary system that was designed to ship just one or two products. That system worked well until we developed and started selling additional products. Then, whenever we had a large volume day, our manufacturing and shipping systems literally broke down. So even though we were a software developer, I focused most of our attention on our manufacturing and shipping function. I was also fortunate enough to hire a brilliant young man who knew a lot about product fulfillment systems. His name was Larry Sacora.
Small daily improvements made the difference.
Once in charge of our manufacture and shipping function, Larry started making small, daily improvements. First, he did the easy stuff. He set up minimum inventory levels for each product. That meant that as soon as the inventory level of a particular product fell below a certain level, an automatic order was issued to manufacturing to create more. At first this was a manual process, then it became automated. Next, he did something that I thought was brilliant.
Larry’s big idea.
Larry purchased a few thousand large shipping baskets and painted them different colors. At the time Larry implemented his basket system, we had over a few thousand different combinations of products (for example we might have Tax software for a PC on 5 1//4 floppy disk, or on a 3 ½ inch disk, or Tax software for a Macintosh). When you have over a hundred or so products and then also have these various configurations within each product, the complexity and number of products to keep track of and ship become unwieldy.
One shipping basket was used for each order and the color of the basket indicated the type of products that were to be included in that order. For example, green baskets were for financial products. White baskets were for church software products. Unpainted baskets contained products from several product divisions.
As soon as an order was taken in our call center, a copy of it would print out in our shipping operation. The color of the basket to be used was printed at the top of the shipping document. An individual would then pull the proper colored basket, put the shipping document inside and then put the basket on the conveyor belt to begin it’s long weaving ride throughout our inventory.
No one was ever penalized for stopping the line.
The conveyor built extended and weaved around most of our warehouse. For each group of products we had stations, and employees at each station looked at the basket for one of two things. If they were at the green station, they pulled the green basket, looked at the order form and placed the ordered products into the basket. If they saw an unpainted box they looked at the order form to see the required products and placed those in the box as well. Any baskets that were of a different color (which meant they required products from a station other than theirs) were simply allowed to go by. If any employee fell behind, there was a chain they could pull that stopped the line until such time as they were able to catch up. No one was ever penalized for stopping the line.
Larry came up with another brilliant idea.
Once the basket completed it’s journey, it went to our packing department and here’s where Larry came up with a brilliant idea. He had bar codes identifying the products printed on the order form; the bar codes were also printed on the packaging for each product. Using a bar code reader, employees scanned the order form and scanned the products. If there was an error in fulfilling the order, it showed up then. As a result, our error rate for shipping the wrong products (or missing a product) was almost non-existent.
We even had special deals with every major carrier.
Once packed, the order went to a staging area to wait for pickup by either the post office, UPS or Federal Express. Larry eventually worked ideas with each of these carriers so they visited our shipping dock and picked up shipments several times each day.
Most orders – regardless of combinations – shipped in less than 4 hours.
The end result of all this, is that after we took an order, and regardless of whatever combination it was of the thousands of product skus we had to deal with, it left our warehouse and shipped to the customer within a few hours — and about 99.99% of the time, it was always what the customer ordered.
Our operation was one of the finest anywhere.
Without a doubt, our manufacturing and shipping operation at Parsons Technology, back in the early 1990’s was among the finest and most efficient in the world. I’m proud of most of what my two companies have accomplished but I’ve never been as proud or enjoyed showing outsiders any operation like our manufacturing and shipping operation.
A vital secret of the Millionaire Mind is:
Small daily improvements make great things happen!
Small daily improvements make great things happen.
The important thing to realize is that this manufacturing and shipping operation didn’t just happen. It came into being by taking small steps and implementing small improvements on an almost daily basis. That’s the only way incredible systems like that can come into being.
Make it your goal to be a little better every day.
The moment you stop improving your organization, it starts to die. Make it your goal to be better each and every day in some small way. Remember the Japanese concept of Kaizen. Small daily improvements eventually result in huge advantages.
Copyright © 2004-2006 by Bob Parsons. All rights reserved.
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