1. I Believe That my Competition is Really Good at What They do, and That They are Always Gaining on me, are Even with me, or Have Passed me

A classic rookie mistake is to underestimate your competition and, sadly, it is one of the most common weaknesses I see in businesses of all kinds. I refer to it as a rookie mistake because it's the kind of thing that someone who doesn't know any better would do, but the sad fact is that I see experienced businesspeople do it all the time.

A leading independent grocery store had a nationally known competitor moving into their market. There were some in the organization who were like little kids who had closed their eyes, put their hands over their ears, and were yelling “I can't hear you! I can't hear you!” over and over. They didn't want to acknowledge reality, which was that, even as successful as they had always been, this was a serious competitive threat, and they'd better up their game or suffer the consequences.

If your competition truly is inept, ineffective, and no good, then you can coast. You obviously have all the customers and there's no need for you to ever be any better than you are now, and certainly no need to change. There's also no need for you to ever take hallucinogenic drugs because you are living in a seriously altered space that bears no resemblance to the real world.

The self-delusional belief that you're the only one who is good at what you do is a serious competitive weakness, and it can kill your business. Ineffective, mediocre business practitioners limit their view of reality with blinders that block the truth, which is that yes, you do have competition, and yes, they are good at what they do. Truly effective business leaders have 20/20 vision about their competitors, and they use that awareness to their advantage.

I recently had the opportunity to spend time with some of Starbucks' top leaders. If ever there was a company that has dominated its market, Starbucks is it. Yet the thing I heard that has stuck with me since that meeting was a statement made by one of those leaders, who said, “The one thing we've never been is complacent. You're only as good as the next thing you do. We fear every and any competitor.”

Let me tell you about the world I live in. My competitors are not just good; they are very, very good. I sometimes just shake my head at the quality and excellence of their work. For me to even be competitive with them, much less win, I have to constantly get better at what I do. Every great company I have ever worked with has been very clear about acknowledging their competitors' strengths. It's very bad business to ever underestimate your competition, and those who do so generally tend to be at the back of the pack. Market leaders use the strength of competitors as motivators for innovation, improvement, positive change, and growth.

It's good to know your own strengths, and I love celebrating victories. But in addition to counting the reasons that you think you will win, you'd better devote at least as much time, thought, and energy to considering all the ways you could possibly lose. Regularly go through the exercise of “what could cause us to stop winning new customers or even cause us to lose existing customers?” Think about “what could cause our existing customers to lose their enthusiasm for recommending us?”

Identify the competitive threats, then take action to neutralize them. Never, ever get caught in the trap of believing that your competition is no good. And if they really aren't, pretend that they are. Somewhere out there is someone or something looking to take your business down. Conduct your business accordingly. I know I do.

I run in a positive state of “scared” all the time. I believe that if I don't do something significant to improve and get better, and do it now, I'll soon be out of business. I agree with John Burke, president of high-performance bicycle manufacturing company Trek, when he said, “The secret is always running the business like you're two touchdowns behind. We'll always do better if we have a little bit of fear and a sense of urgency.”

2. I Don't Apologize to Customers, Because I Don't do Things That I Have to Apologize for

Your immediate reaction and objection to this may understandably be: “But there's no way to get everything right 100 percent of the time. Mistakes will be made. You just have to accept that.” I'm with you right up until the point where you say “you just have to accept that.”

As a customer, I hate it when a manager feels that she has to apologize to me, because that means that something has gone wrong and it was usually something completely avoidable. There are managers who spend way too much time apologizing when they should be spending that time training their people or fixing their processes so that they won't have to be apologizing.

I will readily admit that my “I don't apologize to customers, because I don't do things that I have to apologize for” is very much an aspirational statement. Yes, things go wrong. Yes, mistakes are made. But I hate having to apologize to my clients so much that I wage a neverending war on mistakes and the faulty processes that can produce them.

It's a powerful thing to have a “no stupid mistakes—no defects—no surprises” policy that becomes part of the DNA of your team. There's the old saying, “Amateurs work until they get it right. Professionals work until they can't get it wrong.” That's what you aspire to. You work every day to get to the point that your team doesn't know how to get it wrong.

Here's a good place to start. Look for any pattern of mistakes or things for which you find yourself apologizing to customers on a regular basis. If there's something that happens like clockwork at least once a month, then you've almost certainly got either a process problem or a training problem.

If and when you do find yourself in a situation where something went wrong and you feel the need to apologize to a customer, the apology shouldn't be your top priority. Do the apology sincerely and quickly. Remember that you can't fake sincerity. If you don't mean it from your heart, the customer will know it and you're dead. People resent fake apologies, and they can spot them a mile away.

But if you are, in fact, sincere with your apology, then move quickly to the next step, which should be your top priority. You will now make up for whatever went wrong with a solution and a demonstration of good will that overwhelms the customer to the point that they are amazed. They will leave the situation as your greatest advocate, and the positive word of mouth will be extraordinary.

I once gave a speech for which the client had ordered 600 copies of one of my books to distribute to the attendees at the event. We shipped the wrong book. The client was upset. Trust me when I say that's an understatement. I apologized and then immediately made this offer: Their attendees can keep the 600 mistakenly shipped books at no charge. We will ship a copy of the book that was supposed to have been shipped to each attendee individually. There will be no charge for those books or for the shipping.

What I was offering was many thousands of dollars worth of solution and a tsunami of corrective action in a way that stunned the client. She asked to think about it and let me know the next morning, when I would be giving the speech. That next day she said that just giving everyone the book that had been shipped at no charge was plenty.

Two other factors in this misadventure are worth mentioning. The speech I gave was a huge hit with her attendees. It was vitally important in this case (as it is in every case) for me to do a great job on the core product, which was the speech. The other factor is that this speech had been booked through a bureau partner that I work with often. My solution for the client was also done with my relationship with that bureau in mind.

Afterward my contact at the bureau said, “We were never worried about it. We knew you'd handle it perfectly.” That's magnetic.

My solution cost me a whopping lot of money, but it preserved two important relationships and, as I am a devoted adherent to the win-win philosophy of business, it was the only way for me to handle it. I lost short term in a transactional “dollars” sense. But I won big time long term on the relationship level. Lesson: Don't step over dollars to pick up nickels. I'll take a short-term loss for a long-term gain every single time.

Let me be clear about something. I'm not bragging. This isn't about me being a swell guy. This is about what works in business. There are countless others in business who do all of this better than I do. I aspire to learn from them. I was not making a sacrifice by giving the client those 600 books for free. I was making a bottom line, future revenue, future growth business decision that was logical and necessary for me to get what I wanted.

This book isn't about feeling good by being nice. This book is about feeling good by making a profit and growing a business.

3. I Say “No” to a Lot of Potential Customers and Business

Any revenue is better than no revenue, right? No, not right. Not right at all. Sometimes there are sources of revenue that will kill your business. Learning when to say no is one of the most essential mind-sets to creating a magnetic business.

My favorite Warren Buffett quote is, “The difference between successful people and very successful people is that very successful people say ‘no’ to almost everything.” It took me a long time to learn the positive business growth power of saying no, and it's something I wish I had learned much sooner than I did. Today I say no to a lot of the potential customers that come my way, because they don't make it through the filter that helps us find the right fit.

It often comes down to this—just because you could do business with a customer doesn't mean that you should do business with that customer. When your business is brand new, it's hard to turn business away, and I openly admit that I took jobs that were more than a stretch for me. They were jobs that I shouldn't have taken on. But that's part of the learning curve. The key is to be sure that you do learn that lesson and begin to build your filter to make sure that you only do business with customers who are the right fit.

For my business, there are two main parts to my filter that will cause me to say no to potential customers who are ready and willing to give me their money. There is what I call the business filter, and then there's the personal filter. Just one “bad mark” in either of those filters can be enough for me to say no.

Everyone will have to set their own parameters for what's a good or bad match in terms of their business, but it's often a matter of being able to distinguish between what you “could” do and what you “should” do. Using my business as an example, I recently got a call asking if I'd work with a corporate group who needed expertise in execution strategies. I could have put a program together for them, but it would have taken me out of the real strengths and expertise that I have. I referred the group to my friend Randy Pennington, who has expertise in that area which far surpasses mine, making him a much better match.

I accomplished two things with that referral. I avoided the stress and distraction that would have come from trying to fit a square peg into a round hole. I also gained credibility and good feelings from the client, who will be happy with Randy and will thus be happy with me. My hope and expectation is that now I am on their list for future consideration if it's a proper fit.

My friend Jane Atkinson is a respected career and strategy coach to professional speakers. Jane's business filter caused her to make a significant policy change in her business recently. Here's what Jane said about her decision:

“For several years I was offering my coaching clients payment plans that would bill their credit card monthly over the course of a year. I thought it might be good for cash flow and they would appreciate the option to spread the payments out. However, time went by and I realized my team and I were spending far too much time chasing after credit card issues. With all of the fraud in Canada and the U.S., cards were being cancelled all of the time. Sometimes the same client would change cards three times in a year. And with cards expiring, we were running around in circles. I didn't want to be in the credit card business, I wanted to be a coach. So I decided to remove all of the long-term options off of the website.”

The obvious consideration for Jane had to be that she might lose some clients who would only hire her if they could make payments spread out over time. I asked Jane about it:

“I haven't heard anyone complain about it yet, and no has asked for extra time in paying so far, although it's just been a few months. But when a client is perfect for me, part of the criteria is that they can easily afford my services.”

Jane nails it when she talks about “part of the criteria.” That's the filter. Almost every kind of business has to have a filter, or set criteria, for customers, or it will find itself wasting time, effort, energy, and emotion trying to make the wrong customers “fit.” It's a losing battle.

There's a simple, powerful lesson and guideline here for all businesses. Don't say yes to customers who will take much more time or attention than the revenue they produce will justify. We can all point to our own list of time-consuming and stress-producing customers from our past. Please learn the lessons that those mistakes taught you and don't make that mistake again.

Speaking of stress, let's look at the personal filter as a way to weed out customers who would be a bad fit. Over the years, my own personal filter has gotten tighter in terms of who gets through. Luckily for me, the vast majority of people and companies who approach me to do business turn out to be delightful and a pleasure to work with. Maybe I've gotten somewhat spoiled by that, but I am now squarely in the space where I will not work with anyone who falls into my “life's too short” category.

You know what I'm talking about. It's that customer who causes so much stress that whatever amount of money they're giving you simply isn't worth the wear and tear that they put you through. From both a quality of life and also from a smart business perspective, I advise you to set the parameters on your personal filter clearly and strictly, and to never work with jerks again. Just say no.

I did a keynote presentation for a group years ago that proved to be the ultimate example of a “red flag” client. The night before the presentation I met with my main client contact to do a final check-in, and that's when he started in with his list of changes, objections, doubts, fears, and borderline insults. In the interest of doing the best job possible for the organization, I stuck to my guns on what I thought would be most effective.

The next morning I did the presentation to what was a wonderful group of business executives, and afterward my bad-natured contact showered me with praise. Two weeks later, we received an invitation for me to speak at two overseas events for the group, at my full fee for out-of-the-country work, which isn't cheap.

I didn't have to think twice about my answer: “No, thank you.” My strong sense of this individual was that he would pull the same power-trip stunts again at any future event, and he clearly fell into the “life's too short” category for me to every do business with.

I can always find more clients, and ones who are a pleasure to work with, not a misery. My experience has been that when you say no to the wrong people, it opens up the space for the right people to come in.

Years ago I was impressed by the guiding statement of business adopted by a new advertising firm. Their four rules of doing business were:

1. Do great work.
2. Make money.
3. Have fun.
4. Don't work with people you can't stand.

It takes courage to abide by that fourth rule, but in the long run, it's worth it.