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May 5, 2010

Why You Should Run Your Business Like Silicon Valley, Not Soviet Russia

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soviet russia Suppose you've been running your business for 15 years -- plugging along, building relationships with customers, making money, saving money, reinvesting money and growing your business.

Then one day a new competitor appears. It seems too inexperienced to be a real threat, but it puts up a website, starts a blog that gets some traction, creates a Facebook page -- then before you know it, it starts stealing your customers.

You have a Facebook page . You have a   website . Why aren't yours working like theirs?

There could be a lot of issues, but one problem surfaces far more often than others: People run their businesses like Soviet Russia, not Silicon Valley.

Soviet Russia was an empire  suffocated by central planning . Silicon Valley is a region thriving with almost no central planning -- its success is rooted in its incredible convergence of the educational, financial, natural and human resources needed for business success.

What does this mean for you as a marketer or a business owner? You should focus on providing the underlying resources required for your employees' success, not dictating the tactics you think are required for success.

Another way to put it: Don't be afraid to give up some control.

So how do you create an environment for your employees' success? Here are five places to start:

(1) Have a company wiki where you put ALL your information.
Make your organization completely transparent. With the exception of salary information, put all your internal company information and conversation on an internal website (a wiki), where all employees can access it. The more information your employees have, the more they'll be able to make smart decisions on their own. Even better, you'll find that they contribute information to the wiki that will make you better informed, and help you make better decisions.

(2) Encourage everybody in your company to be on social media.
Companies where employees have the freedom to be active on  social media  have an advantage. If your employees are active on social media, they'll talk about their work, and increase your company's reach and online footprint. Also, employees on social media help make your company more transparent and authentic to customers and potential customers. Instead of understanding your company through a corny brochure, they'll know it through relationships with individuals. This will build trust, helping you retain and attract customers.

(3) Filter heavily when you hire, but not after that.
Everybody's heard the stories of social media and transparency backfiring. The best way to avoid these problems is to filter heavily when you hire. Don't be afraid to be super selective. You need top-notch people you can empower and set free. The alternative -- hiring questionable employees that you have to watch like a hawk -- will leave you several steps behind your competitors.

(4) Encourage employees to experiment.
I know -- you have a business to run; your team can't be flip-flopping from one failed project to another. That may be true, but in order to keep running that business, it needs to evolve. You need to improve your service, improve your product and improve the way you produce them. Chances are, your employees have some ideas that may help you do those things. The best way to surface and filter those ideas is to create an environment where experiments are encouraged.

(5) Use data and reporting to hold people accountable.
How do you keep the business on track and moving forward with all this freedom? Hold people accountable for numbers, not tactics. Give them the freedom to experiment with different approaches to their job, but hold them accountable for results. People know that results are important, and they'll appreciate the respect that comes with the freedom to achieve the results on their own.

What would you add to this list? How else can small businesses thrive with a Silicon-Valley-like combination of resources and freedom?

Flickr: AlphaTangoBravo

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