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Extending the Runway Updated Second Edition Extending the Runway Lessons in resource management from aviation and business to help your enterprise thrive and grow By Dave Berkus, author of BERKONOMICS and other books for management success 2 Extending the Runway Published by: The Berkus Press, a DBA of David Berkus For corrections, company/title updates, comments, or any other inquiries, please e-mail [email protected] Second Edition: First Printing, 2014 10 9 8 7 6 5 4 3 2 ISBN number 978-1-312-28835-5 Originally published by Aspatore Press Inc., 2006 as: ISBN 1-59622-557-2 Library of Congress Control Number: 2006930701 First Edition Managing Editor, Laura Kearns; edited by Eddie Fournier Original Copyright © 2006 by Aspatore, Inc. Copyright transferred to David Berkus DBA the Berkus Press 2013. Copyright © 2014 by David W. Berkus. All rights reserved. Printed in the United States of America. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, except as permitted under Sections 107 or 108 of the U.S. Copyright Act, without prior written permission of the publisher. This book is printed on acid-free paper. Material in this book is for educational purposes only. This book is sold with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, investment, or any other professional service. Neither the publisher nor the author assumes any liability for any errors or omissions, or for how this book or its contents are used or interpreted, or for any consequences resulting directly or indirectly from the use of this book. For legal advice or any other, please consult your personal lawyer or the appropriate professional. Groups may order copies of the book at a group discount by contacting Dave Berkus at 626-355-5375, or at [email protected] . Throughout this book, the Cambria type font was used for headlines, and text was set using the Calibri font. The views expressed by the individuals in this book do not necessarily reflect the views shared by the companies they are employed by (or the companies mentioned in this book. The employment status and affiliations of authors with the companies referenced are subject to change. INTRODUCTION 3 Contents AUTHOR’S NOTE for this second edition ............................................. 7 INTRODUCTION ............................................................................ 8 Chapter One: Establishing Your Vision. ....................................... 21 Establishing your vision ......................................................................... 23 The “100” Questions for Use in Your Planning Session ........................ 32 About Mission, Goals, and Strategies ................................................... 36 Chapter Two. Money: The Root of All Growth ............................. 39 Never Run Out of Money ...................................................................... 41 The Tyranny of the New Office ............................................................. 43 Other Monetary Considerations ........................................................... 44 “Running Out of Fuel”—Fiscal Bankruptcy ........................................... 46 Financial Insight: Keeping Enough Fuel in the Plane: Avoiding Fiscal Bankruptcy ............................................................................................ 51 Chapter Three: It’s About Time .................................................. 54 Time Bankruptcy: Running Out of Runway ........................................ 61 Balancing Risk against Safety ................................................................ 73 Leveraging Time as a Resource ............................................................. 76 Never Running Out of Runway: Avoiding Time Bankruptcy ............ 76 Chapter Four: Relationship Management .................................... 80 “Lindbergh Flew It Alone, Too!”—Relationship Bankruptcy ............. 81 Relationship Insight: Relationship Leverage ......................................... 86 Remembering That Lindbergh Wasn’t Alone: Resisting Relationship Bankruptcy ............................................................................................ 86 Chapter Five: Process Management ............................................. 91 4 Extending the Runway The Every $3 Million Crisis ..................................................................... 92 Time and Process Interlinked ................................................................ 95 Where or Who Is the Bottleneck? ......................................................... 96 “The Navigation Nightmare”—Process Bankruptcy .............................. 98 Process Insight! Planning Our Way around the Navigation Nightmare: Sidestepping Process Bankruptcy .................................. 102 Chapter Six: Context – external environment ............................ 104 A Pilot’s Bag of Tools to Forecast and Navigate the Winds of Change ............................................................................................................. 104 Do You Need to Be a Weather Forecaster to Go Flying? .................... 107 Context Management “Help Me! I’m Lost up Here!”—Context Bankruptcy ........................................................................................... 113 Context Insight! ................................................................................... 118 Never Becoming Lost While Looking at the Map: Sidestepping Context Bankruptcy ............................................................................. 118 Chapter Seven: Interrelationships ............................................. 124 Optimal Management of Competing Demands .................................. 124 Your Skills in Complex Management ................................................... 124 Externally Induced Crises .................................................................... 125 Pilot Error: The Self-Induced Crisis ...................................................... 128 “Crew Resource Management”—Mastering Crew Coordination ....... 131 About Your Personal Flying Skills… ...................................................... 133 Summing It All Up: Locking the Hangar for the Night ......................... 135 Appendix: Your Checklist ........................................................... 138 Reviewing your Leadership Strategies and Management Insights ..... 138 Challenging Your Thoughts about Your Most Critical Resources ........ 138 About the author ............................................................................. 149 INTRODUCTION 5 6 Extending the Runway To Bob Kelley, who contributed to this book with ideas and encouragement, and co-wrote the long-ago book, “Better than Money”, that defined the five resources and the concepts that are the basis for this book. Some of Bob’s words survive in this book after all these years. And to my wife, Kathleen, who has put up with this “type A” entrepreneur for over fifty years. INTRODUCTION 7 AUTHOR’S NOTE for this second edition It has been over eight years since the first edition of Extending the Runway was published. So much has happened in the worlds of business, technology, and angel-venture investing, that I felt I had to update this book. So I purchased the copyright from Aspatore Press (Thompson West Publishers) and assigned it to The Berkus Press in order to update this volume. In technology, the Internet marketplace for services and products has become the norm for transactions. Technology advances in mobile, wearable, big data, and inexpensive genome mapping have revolutionized those fields, maintaining technology growth at an astounding pace. New laws and Internet-enabled marketplaces, including the JOBS Act, accelerators, crowdfunding and crowdsourcing have revolutionized fundraising. The number of venture firms has shrunk following the recession of 2007-2008, even as the size of many active funds that remain has grown larger. Angel groups, dominant then, are challenged to find great deals, now competing with super angel individuals and angel funds, as well as with AngelList and other on-line marketplaces. And anyone can try to raise non-equity funding using KickStarter and tens of other marketplaces. Ah, the Internet has changed everything except… The principles we review in this revised edition remain the same. It is the sense of urgency and the changing environment that have caused us to re-examine these with new intensity. And I no longer actively fly complex aircraft as I did when I wrote this book. After forty-three years and seven aircraft, I “hung it up” as my investments seemed to concentrate within driving distance, and as I found myself unwilling to maintain the required training regimen required for pilots of complex multi-engine aircraft flying in instrument conditions. This change doesn’t affect my love for flying, nor my appreciation for the wonderful contrast between training and operational execution when comparing the cockpit with the executive suite… 8 Extending the Runway INTRODUCTION The phrase “extending the runway” will be recognized by almost every angel, venture capitalist and C-level officer on Earth. Where the phrase came from is anyone’s guess. I flew for many decades, and we pilots know you can’t extend a runway without plans, permits, perhaps some condemnation of land, relocation of perimeter roads, and who knows what else. So, what about this title? Well, if you’re a pilot, you’ll identify
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