The Three Profits of SME's WCP 2013

YOUR CHECK LIST FOR RAISING CAPITAL

As check lists go this one has been kept pretty minimal, see it more as a thought starter for a list of your own! 

Check your must do list!

 

  • Have all your legal documents prepared and in order including all of your corporate information (ABNs, taxation summaries, core financials, assumptions, insurance, contracts etc) centralised and easily accessible so that it can be supplied to potential investors upon request.

  • Ensure the information you provide to potential investors is easily understandable, clear and accurate. The business may seem simple and straight forward to you but remember it may well be complex to them. Keep your presentation simple but ALWAYS have every detail close to hand for the investor who asks that curly question. With cloud storage solutions and tablet mobility there can be no excuses for poor preparation.

  • If successful you will end up in a relationship with these investors, so make sure your new partners and you both have the same goals (equity splits, exit strategy, founders’ roles etc) and that the culture is right.

  • Be prepared to negotiate and give some ground to get a deal done.

 

Understand your don’t do list!

 

  • Don’t think you have the investor’s cash in the bank until it’s in the bank

  • Don’t be cocky. You need to show investors that you not only have a good idea, but are willing to listen and learn off them. Most of the time, they are investing 80 per cent in you and 20 per cent in the product.

  • Don’t hold to an unrealistic goal on valuation – its always better to have 10 per cent of something than 100 per cent of nothing.

Yes it’s a very small list, perhaps the missing advice is that wherever possible seek experienced professional advice, yes it will cost you but long term it will prove to be a very sound investment.

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By, Neil Steggall

The Barking Mad Blog

Business Advice with Bite

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Crowdfunding - WCP 2014

 

Raising Capital is a lot like Internet Dating!

Raising capital is stressful and incredibly time consuming. It’s a full time job. So if you embark on a money raising mission, make sure your business is at a stage where it can survive (and hopefully flourish) with minimal input from you. The capital raise will demand most of your time and attention for the next little while.

It’s actually a lot like internet dating. You write a profile (information memorandum) you go on a first date (swipe right), you decide if you’d like to see each other again, (thank-you text), one party plays hard to get (valuation), meet the parents (due diligence), buy a ring (appoint lawyers), ask the question, (term sheet) and get married (settlement).

Once you’ve got a little seed money to work with, it really then becomes an issue of timing. If you go to the market looking for money before you have a concept or product, you don’t have as much leverage with investors and could potentially be beaten down on your valuation. So founders are generally better off building the product and getting as much traction as possible before courting significant further investment to reduce the risk profile of their venture.

The longer you can hold off, the more leverage you have with investors. But the longer you wait, the more risk there is that your competitors will land funds and get the jump on you. And it can be hard to play catch up.

Preparing the business for a capital raise correctly is critical. My advice is to find yourself someone who knows what they are doing, has experience in the area and importantly is respected by the VC community.

A skilled and trusted advisor is worth their weight in gold, they provide invaluable advice on how to groom the business for a capital raise, such as having an attractive shareholders agreement, employment agreements, and commitment from the founders in place.

Once you have a data room prepared with an information memorandum and financial model  hit the pavement and talk to investors.

Let your advisor’s line up 10 or so meetings, target verbal commitments from these early potential investors. The best way to describe this part is that no one is ‘in’ until they sign a term sheet. Have one of these prepared and printed in your back pocket. Don’t be afraid to put it in front of them to sign. You’ll quickly work out their position.

If you are aiming to raise $1.5 million the hardest part will be getting that first chunk signed away. No investor wants to be the first $50,000, they want to be the last $500,000. So it’s important to lock down some foundation investors, and use them and their name to secure other investors. It’s all part of the gamesmanship and you need to have your strategy down pat before you got out to market.

Once you’ve locked down the funds, management now becomes a priority. Most investors don’t just hand over cash and then walk away. They will set benchmarks, timelines and other KPI’s. You need to keep them in the loop, so regular corporate updates are critical. Ask them what they want to know and how often if you are unsure. Don’t be afraid to ask advice from them, leverage them and their networks as much as possible. You’ll sometimes be amazed at how much of their time they are willing to give.

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By, Neil Steggall

The Barking Mad Blog

http://www.neilsteggall.org/?p=1235

Business Advice with Bite

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businessmanagement1

How to structure your startup for investment

Most Australian startup’s will never raise a first round of funding. The recent Startup Muster survey puts the number at just 14%. For those startups that do raise a seed round, the chances of securing VC funding at Series A is even lower. Nevertheless, it’s important to understand what potential Angel and VC investors will want to see from a legal standpoint before investing. This article will set out some of those requirements.

 Incorporate!

You’re not going to raise money unless you’re running your business through a limited liability company structure. Better yet, set up a holding company/operating company structure. Investors will invest in the holding company, which will own 100% of the operating company. This structure can protect the assets of the business from risk of seizure, should the operating company be sued.

A small number of more experienced Australian founders are now setting up their company structure in the US, even if they’re running the business from Sydney or Melbourne. If you’re looking to secure investment over in the US, this approach can make a lot of sense. That being said, it’s definitely only worth doing if that’s your goal.

Founder vesting – sensible for founders and investors

The reality is that a startup isn’t worth much, particularly in the early days, if the founders leave. It makes no sense at all to issue yourselves with equity that doesn’t vest over at least a couple of years, and investors know this. The standard startup-founder vesting structure is a four-year vesting schedule with a one-year cliff, meaning you get nothing if you leave before you’ve been working in the startup for at least a year, and you earn the rest of your equity over the four years.

Many VC investors will require founders to “revest” upon investment. This means that even if you’ve been working on your startup for a couple of years before securing funding, you’ll have to work for another four years to get all of your shares.

Founder vesting obviously make sense for investors; they don’t want you ditching the startup two months in, but it also makes sense for founders. If your co-founder leaves the business with his 25% stake fully vested, the business is pretty much guaranteed to fail. You’re either going to end up working away building up the value of his shares while he chills out on the beach, or you’ll end up quitting too. Vesting means he’ll leave with a smaller amount of shares, which is much more manageable.

Preference shares

VC investors will often only invest through preference shares. The basic idea behind a preference share structure is that it gives investors a liquidation preference in the event of a sale. Preference shares are a way of ensuring that investors get repaid their initial investment before founders and employees get anything.

Obviously if you can avoid issuing preference shares, and simply issue ordinary shares, that’s great for you and your co-founders.

Employment contracts

No one ever bothers putting together an employment contract when they first launch their business. Why would you? You’re probably not even paying yourself!

If you’re looking to raise a round, you need to sort out your employment contracts for a couple of reasons. First of all, investors will want to know you’re not just pocketing their hard earned cash; they’ll want you to set out a small salary etc. Most importantly, though, they’ll want to ensure that you’re entering into a non-compete with the company. If you don’t get on with your investors, they don’t want you quitting and setting up a competitor business the next day.

To conclude

Investors are a diverse bunch, so they’re not all going to be looking for the exact same structure before investing. If you’ve got a great team on board and you have significant traction, you might be in a position where you can dictate terms. Unfortunately that’s not very common! It makes sense to structure things professionally and to be pragmatic about what you’re going to offer investors. It might just help you end up as one of the 14% of Australian startup’s who raise a round!

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By, Neil Steggall

The Barking Mad Blog

Business Advice with Bite

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Added Value

Do you know the true value of your customers?

 

Customer numbers, revenues and retentions are in many ways the rocket fuels of business success. Certainly if you wish to impress bankers, investors and the market in general with corporate growth under your leadership and management you had better understand and pay homage to this important trilogy.

Do you know the true value of your customers?

What is the key metric you use to measure and drive your business?

When asking this question I find that most answer with “EBIT”, “margins”, “revenues”, ROI or some other fairly common KPI, however, I believe “Customer Lifetime Value” (LTCV) is perhaps the most significant measure to indicate the general health, sustainability and true value of a business. It is one of the most overlooked and least understood KPI’s or metrics in business, and yet it is one of the easiest to quantify.

Why is this particular metric so important? Because truly understanding it will deliver rewards, it will give you an accurate indication of how much repeat business you can expect from a particular customer, which in turn enables you to accurately forecast, cost and develop your business.

The value of LTCV in determining marketing spend and direction is immeasurable as it will not only help you to decide how much you can afford to spend to “buy” each new customer for your business, it will also motivate you to grow your business by showing you when and when to spend.

Once you understand how frequently a customer buys, how much they spend and for how long you retain them you will better understand how to allocate your resources to optimize customer growth and retention programs.

An easy calculation to estimate CLTV is to insert actual or estimated (if you’re in the planning stages or just starting out) numbers into the following equation:

(Average Value of a Sale) X (Number of Repeat Transactions) X (Average Retention Time in Months or Years for a Typical Customer)

A simple example would be the calculation of a service subscriber who spends $20 every month on a 3 year average retention. The CLTV would be:

$20 X 12 months X 3 years = $720 LTCV

We can see from this hypothetical example why so many successful businesses offer a free or discounted service to attract new customers and grow their business. Savvy entrepreneurs know that as long as they spend less than (say) one year’s revenue of $240 to acquire a new customer, the customer will quickly prove profitable and add a further CLTV to the business.

Further refinements can be made by calculating the margin value of each customer and the cost/benefit of a stronger customer service and or retention program.

Once you can demonstrate the multiples of CLTV you place your business in a very strong position should you later require additional funds for expansion from banks and financiers or equity from investors

Growing your CLTV

Once you have some idea of the lifetime value of your customer, you have two Targeted Marketing options in deciding how much to spend to acquiring each new customer:

  1. Allowable acquisition cost: This is the maximum amount you’re willing to spend per customer per Targeted Marketing campaign – In this instance ensure the cost expended is less than the profit made on the first sale. This is an excellent short-term strategy for an emerging business or one in which cash flow is a concern.

  2. Calculated Investment acquisition cost: This is the calculated cost you expend per customer in Targeted Marketing where you know that you will take a loss on initial and occasionally subsequent sales as you have pre-determined that you have the available cash resources to fund your marketing investment. This is a longer-term strategy ideal for mid-life to mature businesses looking to consolidate growth patterns and market share.

Marketing: Expense or Investment?

This is an interesting question which all entrepreneurs should resolve very early in their careers. In my assessment marketing must always be an investment with a measurable ROI. Understanding the LTCV of your customers provides you with such an ROI, a metric easy to establish and measure.

You will struggle to develop an optimal marketing budget unless you know what the return on your investment needs to be. This knowledge is essential as it will lead you to make sound marketing decisions based on the reality of sound and supported metrics rather than the ethereal promises of a new media promotion or program.

Understanding your LTCV’s provides you with specific knowledge as to how, or if, you can discount or offer incentives to attract new business. It will help you avoid the potentially disastrous effects of discounting when your business needs cash flow to survive. In addition, you will find innovative ways to build value upfront and create offers that drive enough volume to support and eventually increase your overall LTCV.

Think this through and take some time to calculate the LTCV equation as it applies to your business no matter if you are established, growing or just starting out. This is the metric for everyone.

In summary, the LTCV will determine the planning and frequency of your marketing spend, the ultimate success and thus the ultimate value of your business.

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By, Neil Steggall

The Barking Mad Blog

Business Advice with Bite

http://www.neilsteggall.org/?p=1216

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Integrity in Leadership - WCP 2014

Showing Integrity, Leadership and Respect.

Leadership goes hand in hand with Trust and Respect and to build a reputation for Trust and Respect you need to demonstrate a high level of Integrity, however, integrity can be a contradiction in today’s workplace.

The label of integrity is hard to earn and yet it can be lost in a single action. It is not something we consciously look for in someone but we tend to notice when it is missing.

Once we regularly consider our own actions and evaluate how they align with our personal values, intentions, and deeds, we recognise the changes we need to make and thus we start to make a contribution to the world of integrity.

We are each responsible for our own integrity and the best leaders create cultures that nourish the integrity of others.

At its root of the word integrity we find; to “integer” and “integrate”, it speaks of unity and wholeness. We still think of the word in this original sense when we talk about “structural integrity,” the quality that enables a building to stand and that which, when lost, lets a building collapse under its own weight.

As US Rabbi Jonathan Omer-Man said, “Integrity is the ability to listen to the place inside oneself that doesn’t change, even though the life that carries it may change.”

Most of us evolve and develop throughout our journey as leaders. Our character and our integrity are remembered long after the glitter of the deals has faded.

Having integrity leads to the building of trust as we practice honest conversations with others. Integrity is a positive deposit in the bank of our connections.

Trust is an inherent part of integrity. People need to trust that leadership is serving everyone’s best interest and leadership needs to trust that team members are fulfilling their own responsibilities.

HOW DO WE IMPROVE LEADERSHIP INTEGRITY?

“The strength of a nation derives from the integrity of the home.” Confucius

This possibly varies person to person but the following points, in my opinion, cover integrity within leadership.

Respect – practice integrity with others by treating them with respect — even when they do not live up to your personal expectations of them. Recognise that your own standards can be subject to question. We get and give the best of each other in a culture that supports respect.

Reliability – This is a more functional definition of integrity and a basic practice of a natural leader. It includes showing a little humility, keeping promises, meeting important deadlines and being there when people need you.

Sharing – It’s important for leaders to clearly articulate their values and expectation of integrity. Share these values as a culture-building objective as to how we collectively define integrity.

Responsibility – We need to acknowledge our responsibility for every one of our actions. It demonstrates that we are not using other people or external events as the cause of our problems. Wherever possible blame no one, accept the behaviour of others and the circumstances of an action as a given, and move forward.

Considered Actions – This is the leader’s obligation to take the right action. It means embodying our integral principles and accepting the consequences for our actions.

Thinking 360° – Think of the whole not just this one problem or decision, integrity can be viewed as a culture of wholeness, of being able to support all of the components for the long term good of all.

I have to admit that I have on numerous occasions made decisions or taken a course of action that would not withstand scrutiny of the points above. This is where self-awareness comes in and that question; “What is the correct course?” and remember life is a journey, good and bad……we can only do our best as we see it at the time!

Corporate responsibility and integrity make strange if not incompatible bed fellows and over the years have formed much discussion over the dinner table. In this article I am really only trying to examine questions of integrity in leadership.

Examining integrity at an intellectual level seems to raise more questions than answers. Mistakes will always made and occasionally poor judgement will be shown. Importantly we are now aware of some of the questions and it’s what we learn and how we adapt to our mistakes that we should now contemplate.

“The supreme quality for leadership is unquestionably integrity. Without it, no real success is possible, no matter whether it is on a section gang, a football field, in an army, or in an office.” – Dwight D. Eisenhower

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By, Neil Steggall

 The Barking Mad Blog

Business Advice with Bite

http://wp.me/p401Wv-jp

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Transition - WCP 2014

Strength Through Diversity & Change

Diversity and Change are catalysts to growth and development, to new ideas and to improvement throughout the world in which we live. Darwin’s evolution of the species demonstrated how through diversity and change the world is able to constantly evolve and improve.

Why then are so many of us suspicious of both diversity and change, why do we fight to protect the status quo? Is it as simple as a fear of the unknown? It brings to mind Franklin D Roosevelt’s famous speech “….the only thing we have to fear is…fear itself”

If we are to get the best outcome from any human endeavour we require continuing diversity and change at all levels. Diversity of age, experience, education, gender, race, outlook and expectation, imagine a team encompassing such diversity tackling the big and complex issues within your business. Can you envision the team’s potency and its potential to drive change?

Increasingly business is global, multi-cultural and can no longer assume the gender of decision makers on either buy or sell side transactions. Successful teams and organisations need to reflect this diversity and change to embrace it.

Managing change requires both vision and courage but the rewards are enormous, when we think of Apple today we think of iPhone’s and iPad’s first and computers second. This reflects their ability and capacity to change and yet it still overlooks their leading edge position as a global leader in integrated retailing.

The days of proud “national manufacturers” are a fading memory as global organisations position differing operations in the global location most suited. R&D may take place in California, IP is held in Ireland, manufacturing close to the source of labour or raw materials. Management and staff are drawn from universities and institutions from all points of the globe and across many faculties.

A modern corporate board is just as likely to include a female graduate in PP&E as a male holding an MBA. Shareholders are increasingly focused on “whole of business” concept as opposed to the out dated “short term profit” position. The CBA board must now be wishing it could wind back the clock a few years to avoid its current publicity.

Change isn’t always good, some mistakes will always be made but hand in hand with diversity we are now more open to the faster assessment of ideas and their success or failure and prepared to act quickly to recognise mistakes, clear them out and move forward.

Don’t just accept diversity and change, embrace them, use them and remember:-

“….the only thing we have to fear is…fear itself” – Franklin D Roosevelt    

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By, Neil Steggall

 The Barking Mad Blog

Business Advice with Bite

http://wp.me/p401Wv-ji

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Win-Win WCP 2014

 

How To Become A Great Negotiator

Most of our successful leaders and entrepreneurs are great negotiators. The skill of negotiation is recognised as one of the important ingredients of success and yet so few of us truly understand what it is that makes a great negotiator.

It is often said that children are great negotiators; they are persistent and return to their objective time and time again, attempting differing angles to win their parents around. From here it often goes wrong as well-meaning parents impose rules and suggest that this constant negotiation is both bad manners and plain naughty!

Recovering from childhood scaring we recognise that negotiations are a fact of life, we are constantly negotiating in both our personal and professional lives.

Those that are not strong negotiators tend to fall into one of two camps: the first dislike or avoid negotiating and this can lead to problems in resolving issues or progressing their careers, the second see the first rule of negotiating as the need to “win”.

Both attitudes are problematic the first is both self-defeating and confusing to others and the second is always going to leave behind a bruised “loser” – neither is a good outcome.

There are THREE key steps essential to becoming a great negotiator:

Applying these three negotiation processes will significantly increase the impact and success of your future negotiations.

1.0 NEGOTIATING ATTITUDE

What you bring to the table in terms of your attitude and approach will have a significant bearing on the outcome, you should always:

Show Respect & Trust

See the other team or person as an equal and treat them with the courtesy and respect you would expect, it’s surprising how this opens real discussion.

Listen to what isn’t said

Look carefully at what the other side is really saying, this will tell you what they really want.

Remain Flexible

Successful negotiators view each key point from multiple perspectives; they are flexible in which points to concede to achieve the end game. Be prepared and willing to change.

Target Continuity

Always view the other team as a valuable, respected and long term contact. Armed with this attitude you will never be tempted to “rip off” the other team.

Win-Win Outcomes

This is the ultimate outcome in any negotiation; it will leave all parties satisfied and lead to productive, successful long term relationships. Sound groundwork, an open mind and a fair approach will find more win-wins than you would at first imagine.

2.0 THE NEGOTIATION

A successful negotiation is usually based upon 3 distinct stages: Preparation, Negotiation and Documentation. Each stage is of equal importance; a great negotiator knows this and allows for it when planning.

Preparation

“By failing to prepare, you are preparing to fail.” (Benjamin Franklin).

The key to preparation is to place yourself mentally into the other party’s position. Assess where they are at within the negotiation, what they want, what they need and what they can live with. Understand their motivation, perspective and opinions on the topic. What are the minimum conditions they can accept and at what point are they likely “to walk away”.

Define your own goals and objectives, analyse what you must have, what you can concede and where your fall-back position is. Develop several potential options; identify your best possible outcome and your least attractive “fall back” position.

Search for “win-win” solutions

Negotiating

Be relaxed, respectful and most importantly be prepared to really hear what is being said and retain an open mind.

Listen rather than speak, silence is your friend. Search for common points of agreement rather than the differences; agree these early to develop trust and comfort.

After the initial discussion take the initiative and start the actual negotiation by tabling your offer. This initial offer forms a subconscious reference point, a middle ground if you like. If you are buying start low and if you are selling start high.

An excellent tactic is to make multiple offers each with different terms and conditions this demonstrates your flexibility whilst the other party’s response to the choices tells you much about what they really want or need.

Always show “Samurai Sympathy”; that is do not box the other party into a corner from which they cannot escape without a loss of face.

Once you have established the other parties bona fides and you are satisfied they want to reach a genuine solution don’t be afraid to be the first to concede points but do so in a “give and take” scenario. Know what you want to take. Focus on the end point rather than the current position. Being pro-active will build trust and goodwill.

Showing respect for the other party does not mean that you cannot show strength or participate in the theatre of negotiating. If unreasonable demands or proposals are put forward demonstrate your dissatisfaction, show your surprise and your disappointment strongly but do not allow any genuine anger or frustration to develop, remain calm and remain in control.

Don’t be in a hurry, abide by your timetable (especially when buying), confrontations will occur, board approval may need to be sought, lawyers consulted all of which are normal. A great negotiator allows for this, allows time for parties to cool off when discussion becomes overheated. If tension builds, ask if you and your team can have 10 minutes alone to discuss the situation, be pro-active, remain flexible and remember your objective.

In the closing stages of a negotiation the great negotiator seeks a creative solution, they look beyond the box, they expand the available options rather than fight the detail and they stand firm to their position. This is the time to bring everything you have learnt into play in the best win-win solution you can offer.

3.0 DOCUMENTATION

I have seen people leave a negotiation “pumped-up” by the result and ready to party only to find out a day or two later that the other party has had a “change of mind” and called the deal off.

After reaching agreement around the table it is best to re-iterate the key points of the agreement, hand write them have two copies made and each party sign them off. This isn’t a binding agreement but it is a moral statement.

Confirm the agreement in a written Heads of Agreement and get this document signed within 24 hours of the meeting. The HOA should cover any conditions precedent and a timeline to contracts.

Call the other party as soon as appropriate after the meeting to thank them for their time and professionalism, work with them and strengthen the bonds for the future.

Finally food for thought…………….

“Let us never negotiate out of fear, but let us never fear to negotiate”

Unknown Quote        

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By, Neil Steggall

 The Barking Mad Blog

Business Advice with Bite

http://wp.me/p401Wv-jd

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Seven steps to getting rich  

Nest of Riches - WCP 2014

The accumulation of wealth is easier than most realise. Once your antenna is raised to embrace wealth potential and you commence the journey riches will follow. In recent times wealth and its creation have been seen as less than desirable perhaps even a little dirty, not quite the done thing.

I find this attitude strange as throughout nature creatures nest and those capable of building a better nest live longer, breed more successfully and generally enhance their bloodlines and community. Surely that’s a good outcome for all?

Wealth and its creation should not be considered ‘dirty words’, but remember the discrete and careful enjoyment of its benefits are attributes to be admired. True wealth is a state of mind and an ongoing way of living which embraces so much more than your bank balance.

As with so much in life a steady, incremental plan, will deliver a surer chance of success in the creation of wealth. Yes it is slower than “doing the great deal” but it is also more certain in outcome and you will have more chance of holding onto and enjoying the wealth you create.

It doesn’t matter how much you earn, whether you are a Gen Y first time investor or a seasoned baby boomer with multiple assets, there are seven key strategic behaviours that set apart the wealthy from the rest of us.

  1. Spend less than you earn – this sounds obvious but many of us live from pay cheque to pay cheque, which indicates it’s a lesson that is quickly forgotten. Save and invest because the law of compound interest will help ensure your nest egg grows quickly. Start as soon as possible because time is your best friend.

  2. Invest as much as you can in assets whose underlying capital value will grow – remembering income is usually taxed at a higher rate than capital growth.

  3. Reinvest any capital growth – as this adds to the amazing power of compound growth.

  4. Do not be afraid of debt – leverage accelerates your net worth but keep a suitable buffer for the unexpected.

  5. Invest in yourself – it pays to broaden your fundamental investment knowledge.

  6. Have a mentor – a coach will help drive you and keep you focused on your long-term goals.

  7. Have a team of experts – remember you don’t have to be the smartest person in your team.

Above all, generating wealth is about having a purpose and focused determination. We are all living longer and will need more wealth to look after ourselves when we are older. State pensions are no longer the safety net they once were and advances in medical research keep us healthier for longer, but at a cost.

Start today by determining how much wealth you want to hold and by which dates. Write a game plan detailing how you are going to achieve wealth, refer to it daily and update it regularly as change occurs. The sooner you start the easier it is!

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By, Neil Steggall

 The Barking Mad Blog

Business Advice with Bite

http://wp.me/p401Wv-j2

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Connect with me on LinkedIn, Twitter or Wardour Capital:

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Why is my business stalling?

Business Stalls - WCP 2014

If you were to receive a substantial capital investment into your business would you engage outside expertise to help further develop and improve your business? There are few business leaders I know who would seriously answer no to this question, which if you really think it through is very odd.

Why is it odd? Because if you need help after receiving a substantial capital investment you needed it even more before that receipt!

The conundrum is the reluctance of small to mid-cap businesses to spend money on the sound professional advice which they need. Within larger organisations external advice is sourced as a matter of course; marketing, strategic, structural, legal and accounting advice is outsourced on a regular basis.

A recent Forbes article stated:-

  1. 98% of Small-Caps or Start-Ups seeking equity investment fail to attract it

  2. Over 95% of Small-Caps or Start-Ups fail to proffer a business or investment plan suitable to allow a measured investment decision or to attract funding.

These statistics hurt because for a relatively small investment these businesses could have been funded.

As an example at WCP we are frequently sent IM’s or funding requests from entrepreneurs seeking to fund growth or a start-up and after reading  through pages of technical and product detail we seriously have to ask: “what exactly does your business do and how are revenues generated?”

The idea may be sound but the presentation is poor. I and many others like me simply do not have the time to invest in learning what potential might lay behind a poor document. As a consequence I miss out on making good investments and the entrepreneur misses out on a capital raising.

A very high percentage, 90%+ of new client enquiries we receive at WCP are from businesses which have generally:-

  1. Left their approach to us too late

  2. Lack a sufficient skill base or framework to meet their business goals

  3. Run perilously short of working capital

  4. Failed to develop a professional support structure

Most of these businesses are sound, most of the entrepreneurs are intelligent, most can be helped but why did they not seek professional external advice from day one?

After asking the question many times over the past 25 years there are two main answers given:

  1. There are so many shonky “consultants” we were sceptical

  2. We did not think we could carry the expenditure

Both easily addressed! Take the last question first; you simply cannot afford to build your business in the dark, budget for professional assistance and let that assistance enhance your revenues. As to the first question do your research, how long has the consultancy been in business, will it provide testimonials, what are its core competencies, which team member will handle your business and how good a fit is that person?

Good professional advice should be a self-funding proposition. Seeking advice and engaging a consultant is not an admission of failure it is the corporate equivalent of using your doctor, dentist, tailor or hairdresser – you use them to stay on top!

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By, Neil Steggall

 The Barking Mad Blog

Business Advice with Bite

http://wp.me/p401Wv-iV

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Connect with me on LinkedIn, Twitter or Wardour Capital:

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Crash - WCP 2014

 “How important is profit?” this question in one form or another is one of the most common questions we receive from start-up owners or potential start-ups and surprisingly it’s not a simple answer.

Some time ago I sat down for a chat with a highly intelligent friend who had recently joined the board of a mid-sized family company. “I just don’t get it” she said “everyone tells me the business is booming, sales are up, profits are up yet from what I read the company is broke”.

My friend had sat down with the half year results and looked at the first two quarters performance against budget. Revenues were up by around 35%, Gross Margin was tracking, as a percentage, around 5% better than budget and operating expenses were around 11% lower than budget leaving a very healthy EBIT compared to budget and management applauding themselves all round.

Where is the problem? I hear you ask.

Cash or rather the lack of it was the problem. As revenues and revenue projections grew the funds allocated to the raw materials and finished goods needed to service such growth had increased exponentially as had the debtor’s ledger.

Yes the business was producing more at lower cost and selling every item produced at a profit but amongst the excitement no one had calculated the impact on future cash flows.

If you achieve an EBIT of 20% (which is on the generous side) it means you have to outlay costs, in advance, of at least $0.80c in every dollar of anticipated revenue. You may offset this to some extent by negotiating an extension to trading terms with your creditors but that is a very slippery slope and best avoided.

If you sell your product to a major retail chain, they will look to pay you in 60 days from the end of the month in which you invoice them. So you could easily wait 60 to 90 days for payment. For every $10 of widgets you sell them each month your cost is $8 and if you carry that and the subsequent monthly sales until you are paid, you are out of pocket by $24 before you receive a cent. On top of which you have had to lift your finished goods to 60 days stock to meet varying demand and raw materials by 45 days so you are roughly $50 out of pocket as you wait for the $10 to be paid of which you retain $2 profit or EBIT.

Yes you are still profitable but your short term cash burn is exceeding income and without a rethink your fast growing, profitable enterprise is going to crash.

“A profitable business without a cash flow is dead in all but name!”

My friend could see where the company was heading whilst the sales manager was elated by high revenues, the production manager proud of the COGS and the operations manager satisfied by the low level of OPEX. In all businesses good cash flow management and budgeting is essential.

There were several funding options available to secure this company’s future once the threat was identified. But within 60 days the company may have been in turmoil and no funder wants to lend into a panic.

So in answer to the question; profit is very important but it is just one of what I call “The Four Pillars of Business”: Revenue, Cost, Profit and Cash; and always remember that whilst the first three are very important CASH IS ALWAYS KING.

_________________________________________________________________________

By, Neil Steggall

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Procrastination V4 - WCP 2014

Why do we Procrastinate? ……Well, I’ll tell you tomorrow!!

Procrastination is a problem for the sufferer, it’s a problem for business and it can ruin cohesive team work. It is a universal problem in businesses of all sizes and yet we rarely discuss it.

“Procrastination is the bad habit of putting off until the day after tomorrow what should have been done the day before yesterday.” Napoleon Hill

I was surprised when reading an article in Psychology Today, to find it claiming that around 20 percent of people chronically avoid putting their heads down and getting on with the job. In fact these people actively look for distractions!

This seemed a little excessive until I looked at my own behaviour and that of my immediate team. I recognised that we all occasionally put off certain actions despite our valuing efficiency, team work and timelines as much as we do. The big question is, why?

Sometimes we put off those mundane things – like reconfiguring our computer files, organising our social media, reconciling bank accounts, or updating our web site. But often we procrastinate on bigger things that require more time, more commitment, and put us at an increased risk of failing, looking foolish or feeling emotionally bruised. Things like finalising our business plan, confronting a complex new task that threatens us, or not pursuing a long held ambition.

It appears procrastinators are not born as procrastinators; rather we are trained to some extent from birth. That’s the general consensus of psychological research into the art of procrastinating. One increasingly popular theory is that procrastination has its roots in childhood, where it functioned as a means of early of rebellion against authority figures or as apathy in the presence of a strong parental pressure to perform.

Doctor Joseph Ferrari, associate professor of psychology at De Paul University in Chicago, suggests that there are three types of procrastinators in the world:

  1. The arousal types, who get a thrill from rushing through projects at the last minute, whether they come out on top or not.

  2. The avoiders, who don’t want to get to the end of any given project because the fear of change keeps them paralysed.

  3. The decisional procrastinators, who simply cannot make any decisive choices because they can’t bear the results of their actions.

I find it interesting that these three types of procrastinators apparently use multiple “tools” to help them procrastinate whilst still appearing to function. Understanding which type of procrastinator an employee is and recognizing which of the following methods they use to procrastinate will help us to work with them and hopefully overcome the problem.

“Procrastination is like a credit card: it’s a lot of fun until you get the bill.” Christopher Parker

As with most management issues, understanding the cause is 90% of the solution and there is much we can do to help the procrastinator overcome their problem.

Let’s look at the common causes:

Perfectionism

We don’t always have to do things exceptionally well, often “good enough” is quite enough. The ingrained desire to get everything 100% correct every time can lead to a paralysing fear of failure and multiple revisions that just waste time. A phrase which springs to mind is “analysis paralysis”.

As John Henry Newman, Anglican Deacon and author, once said, “A man would do nothing if he waited until he could do it so well that no one could find fault.”

Fear of Failure

Fear of failure is a major factor for some. Failure can be seen as having far-reaching implications. For some it’s how they perceive themselves and how they think they are perceived by others.

On the other hand, if this same person breaks all records, they fear all future projects will be held to a much higher standard. Some people are willing to do anything, including nothing, in order to avoid being taken out of their comfort zone.

Being Overwhelmed

If a project is complex, the individual steps may seem endless! Instead of seeing individual steps and taking them, the procrastinator thinks they can see all the steps that lead to completion but has no idea which one to take.

If someone is overwhelmed by targets (either the ones they’ve set for themselves or the ones they’ve been given by others), they may find themselves feeling unable to disassemble tasks into constituent components. As a result they simply don’t know where to start.

This feeling of helplessness usually feeds upon itself until it eats away at their resolve, making workplace distractions a welcome escape. This leads to a loss of focus and thus motivation.

One method of overcoming this form of procrastination is to create an action list that’s prioritised and reduces a complex project into smaller, more achievable steps.

Prioritisation

What if someone simply can’t prioritise? Chances are they will spend hours working on non-essential tasks and fooling themselves into thinking that everything is okay.

Unlike those who get overwhelmed, those who can’t prioritise correctly don’t see anything wrong. These are the people that spend an hour deciding which font to use on the monthly report but don’t leave time to get the actual writing done.

One symptom of this type of procrastination is filling hours with “activity” rather than “action”. Often the excuse of being “flat out” is used, when really; this is just another form of procrastination.

As with the overwhelmed procrastinator the method of overcoming this form of procrastination is to create an action list that’s prioritised and reduces a complex project into smaller, more achievable steps.

Lying to Cover

Procrastinators are constantly lying to themselves. They lie to justify their failures (“Oh the System was down”). They lie to justify their successes (“Oh Fred did most of the work”). They lie to justify their justifications (“I’m sorry about the inventory debacle; it’s the warehouse, they screwed up again”).

Some procrastinators just don’t know how to not lie. Learning responsibility is the key to beating back the lies and overcoming procrastination. Help them take ownership and live up to their actions.

Lack of Motivation

Goals have to be worthwhile and achievable or managers and staff are probably going to give up on them. If the task isn’t interesting enough, intellectually satisfying enough or it’s simply dull, a procrastinator’s passion for the task is going to evaporate and they’ll find themselves looking for ways to occupy their minds. Suddenly the sun pouring in through the window becomes an irresistible magnet and they find themselves offering to head out and buy coffees for the team.

If you find this happening a lot, restructure the tasks so that they excite or add a personal reward to the end of every project. For example show real appreciation and praise if you get the monthly finance report on your desk by mid-day.

In a properly functioning and caring work environment management and or team members would ideally recognise the indications of procrastination and work together to break the cycle.

If as suggested procrastination is learned, then with help it can be unlearned. By looking out for and identifying procrastination as it’s happening, you can discreetly help by restructuring work habits, adding motivation and removing distractions.

I am convinced that a simple solution lies in planning and time management. Personally I always work from a rolling weekly task list and each day I write down the 5 things that I absolutely must do that day. This keeps me on the straight and narrow when my mind starts to wander.

Procrastination costs business a great deal in lost productivity and we should work to fix it but don’t expect overnight success. Lifelong habits are difficult to overcome and take time but the first step is always a hard yet positive move.

As Dr Ferrari says in his book “Still Procrastinating: The No Regrets Guide to Getting Things Done”:-

“Eliminating procrastination from our lives is like trying to stop a moving train; it’s not easy.”

Now avoid moving trains and….do it quickly, don’t procrastinate!

_____________________________________________________________________________________________________

By, Neil Steggall

 The Barking Mad Blog

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Leadership

5 Traits of a Great Leader

Leadership is an extraordinary skill so much so that it is often difficult to define that certain something which differentiates the great from a good leader.

 When assessing investment opportunities we always look at the leadership first and foremost, particularly in start-ups. To guide us we have developed the 5 Key Trait test. It is rare to find all of the traits in one person but when we do we know we have a winner.

 So what are the 5 Key Traits?

 1. Simplicity of Vision.

Einstein once said that if a theory couldn’t be explained simply it was probably false and much the same can be said of a business. A leader needs to convince investors, employees, bankers and customers that their vision is sound and each person needs to be able to understand, believe in and take that vision on board the first time they hear it. This sounds simple but it it’s not, indeed it is extremely rare, most leaders become bogged down in detail and blur the vision.

 2. Persistence.

An exceptional leader is motivated, single minded and above all persistent. We look for leaders who when knocked down get up and get back on track. Taking Churchill’s advice they “Never, Never, Never, Give Up.”

In today’s competitive and constantly challenging business environment the great leader quickly recognises potential corporate risks or opportunities, assesses the situation and develops strategies to move forward. This style of entrepreneur isn’t a talker they are doers and they deliver.

 3. Focus.

It is so easy to be distracted when managing a dynamic, growing business, as CEO you are deluged with ideas about finance, marketing, stakeholders and more. It takes extraordinary courage and focus to identify the small number of key actions which absolutely must be completed for the greater good of the venture, to stick with those actions and to complete them perfectly.

The more focused a leader is the more comfortable we are in believing this person can and will deliver results.

4. Culture.

Again a great leader understands and manages the value of culture. They care about the details which build corporate culture and brands; they manage those details because intuitively they know the importance of the seemingly small in building large. You can never be too important to let go of this detail. Look as Steve Jobs and Apple, how he micro managed form and function to build culture, brand and following. Those small details became the definition of his corporation.

 5. Magnetism.

Great corporations are built by great leaders who build the strongest teams. A great leader, supported by a strong team will always succeed. To attract the best people to a business, prospective employees need to believe in its leadership, to want to work within it, to help share and build the vision. To achieve this a great leader needs a special charisma, something we call magnetism.

Leadership is complex and ever changing but understanding these 5 Key Traits has proved helpful to our company when identifying great leadership.

By, Neil Steggall

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Rotten Apple

Loyalty, respect and support for team members are values instilled in us from childhood and they are certainly amongst the key attributes of successful leaders. A recent review has caused me to recognise that at times we may carry loyalty too far and we risk severe consequences by doing so.

In a recent review of two unrelated corporate failures I realised that each business suffered enormous damage as a direct consequence of disenfranchised and under performing senior managers. With the benefit of hindsight we can see that it is possible that if these managers had been removed 12 months earlier each company may well have survived.

Why are such managers retained? It is likely that their shortcomings have been recognised and discussed with them during performance reviews or following poor management decisions or errors of judgement. When faced with the prospect of dismissing them their line manager has almost certainly taken into account:

  • The monetary cost of replacing them

  • The productivity loss from replacing them and retraining a replacement

  • The disruption within the team or business unit

These are rarely valid arguments a bad manager will cause a disproportionate level of problems which may well lay hidden for months before something finally breaks. Further a bad manager is fracturing the team and negatively influencing others.

What are the solutions?

  1. Only recruit the best: By recruiting the best possible people you are taking primary responsibility for quality – you dramatically reduce the risk of future problems.

  2. Always Reference Check: When recruiting don’t be afraid to ask the tough questions of current or ex employers, yes we need great technical and educational skills but what about their interpersonal skills. Are they team players, do they play favourites or get involved in office politics.

  3. Formal Process: I have a policy that senior people are employed on the understanding that they will face a 180 day performance review – fail that review and its sudden death.

  4. All or nothing: Being mostly a team player is like being “slightly pregnant”; it’s just not on and it’s not going to work.

Now it may sound tough but if one of your apples is looking bad throw it away and do it quickly. Your team will thank you and your bottom line will prosper.

By, Neil Steggall

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Passion

 

We are often told that great leadership and success flows from the passionate vision held by the entrepreneur or CEO and how they followed their dream fuelling their passions as the company prospered.

I may be a sceptic but this raises two questions in my mind, firstly what is it about “grey widgets” that fuelled such passion and secondly is the passion story really true or a heroic post script?

Passion (let’s set aside the boy meets girl and….) is a much confused state, for instance is it about the activity or the outcome? Let me give you a couple of examples:-

  • As a teenager I really enjoyed dismantling and reassembling cars and motor cycles. Learning all I could about the intricate detail of what enabled these machines to function was a wonder to me. Wow a natural engineer claimed my parents!

  • As a mature adult I turned to cooking in my spare time, restaurant quality food perfectly plated. Wow, open a restaurant my friends cried!

Let me be clear I not passionate about engineering or restaurants but I am passionate about taking a complex problem and delivering solutions. I am not rewarded by the repair or the cooking but by the solution, one could say I am indifferent to the action but passionate about the outcome.

Today I watched a Barista making my regular coffee, her face a study in concentration yet as she placed the coffee on the table in from of me her face was a picture of happy satisfaction. Whether she realises it or not her passion is in pleasing people.

Back to our successful entrepreneurs and CEO’s; are they really passionate about the production of “grey widgets” or are they in fact passionate about a task well done? I think it is generally the latter!

Perhaps we should look at what turns us on rather than our passions – a new take on the Chicken & Egg?

Neil Steggall

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Who is.....WCP 2014

Don’t F*** With Your Business. Plan For Success.

I apologise for the title, but I see so many smart people with so many great ideas fail to make the grade and do you know why? They simply fail to develop and implement an effective business plan.

In my experience in leading dozens of business planning workshops across the world, I’d say only around 10% to 15% of the small to mid-cap teams I’ve encountered have an effective business planning process.

Why is this? Why do so many business owners fail to understand that good planning equals good management and that in turn, builds a great business? Am I missing something here? Can it truly be such a hard concept to sell, so hard for a burgeoning entrepreneur to grasp that a sound business plan could secure their future?

So back to the title……simply put it reflects my sense of frustration!

It’s not hard; business planning is about managing resources and priorities in an organized way. It is a function of leadership, and good leadership and management is directly related to productivity.

How can we fix this?

Well here are three very easy steps to help get you planning and, in turn, improve your management, productivity and performance.

1. Write a plan. Many business plans are written to look good and impress investors, banks and other external parties. What we are looking at here is a simple document designed purely to help you as the business owner manage better. Start simply and just jot down the essential points of your business as bullet points, tables, and short explanations. The strategy element of planning is to focus  on  where you want to be, what you’re good at, what matters to you, which people are most important to you and what you can do for them. It’s about positioning, determining your target market and product focus.

It’s important to write these details down in order to commit to your vision and to communicate your vision to close stakeholders such as employees. If you don’t have a team, there’s value in being able to refer back to your original thoughts and ideas for your business and to compare them to your actual results.

2. Set Milestones. In order to check your progress, define and then include your long-term goals. Think in general terms about how you see your business developing over the next three years.

From there, get specific. You’ll want to establish milestones for when you want to accomplish certain goals, and know who you will want to carry them out. Go beyond sales, costs and expenses, and look at what really drives your business. It might be conversions, page views, clicks, meals, trips, presentations, seminars and other engagements.

Then, establish a review schedule — when you and your team review changed assumptions, track results and make changes as necessary.

3. Implement Your Plan. Involve your team and encourage ownership of ideas. Tracking and analysing numbers can help you manage the work behind the numbers. You’ll be in a better place to recognize and highlight what’s working and what isn’t working for your business and your team.

Suppose enquiry is up, but conversions are down or revenues are up but margins down. You collect your data, review it with your team and develop a plan to make changes toward reaching your goals. That’s management.

Managing your business successfully requires more than just praise and pats on the back. Sometimes it means focusing attention on problems, helping people solve them if possible, discussing and embracing mistakes, and, in the worst case, weeding out people who don’t care about bad results. This can all be accomplished more efficiently when you have a plan in place.

Related article: – The Power of Marginal Gains |  http://wp.me/p401Wv-di 

Either way, whether results are better than expected or worse, the planning and tracking makes your follow up easier. The process itself adds commitment and peer pressure to the team. Highlighting good performance is easier when there are agreed-on numbers to define it. And, probably most important, dealing with poor performance is always hard, but not quite as hard when you can focus on the specific numbers instead of personalities or office politics.

Which brings me back to where I began: Planning is management. Without planning, your management is at a real disadvantage.

Neil Steggall

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Persistence Pays Off - wcp 2014

Remember, Persistence Pays Off.

Stay Motivated With These 7 Tips

Persistence and motivation are in many ways the rocket fuels of success. Certainly if you wish to impress colleagues with your leadership and management you had better hone both of these skills. 

Immediately after waking each day I have started posting a motivational quote to test its effect on me and my friends. A positive start to the day is essential, so often the quote is leadership or persistence based and quite old fashioned by today’s standards.

The leaders quoted include amongst many: Franklin D Roosevelt, Dale Carnegie, Winston Churchill, Napoleon and an old favourite of mine Zig Ziglar.  These men suffered many setbacks in both life and career and yet through sheer guts, determination and persistence they moved forward and succeeded.

The dictionary defines persistence as, “Firm or obstinate continuance in a course of action in spite of difficulty or opposition.”  In other words, don’t expect it to be easy and understand that most will tell you that you are wrong in your chosen pursuit. Until you are successful; at which stage they always knew you were a genius.

For entrepreneurs or management starting life’s climb, an MBA, technical competence, talent, intelligence, and leadership ability – are assumed traits.  However, the key characteristic that is missing for sustained achievement is persistence.

“Nothing in this world can take the place of persistence.  Talent will not; nothing is more common than unsuccessful people with talent.  Genius will not; unrewarded genius is almost a proverb.  Education will not; the world is full of educated derelicts.  Persistence and determination alone are omnipotent.  The slogan “press on” has solved and always will solve the problems of the human race.”  – President Calvin Coolidge

In order to achieve complicated or difficult goals, persistence is the most significant factor.  There are lessons to be learnt from the successful, persistent leaders in all walks of life who have overcome enormous obstacles.

  1. Hold Firm to your vision: Even when others tell you it’s foolish or unachievable.

  2. Train Your Mind to focus on your vision: This doesn’t mean be blind to issues but don’t allow the problems distract you from the objective.

  3. Grow Stronger: Constantly improve your skills and knowledge, constantly question and analyse especially after failure

  4. Change: Be prepared to change 180 degrees if you are wrong, accept your failures

  5. Be Reliable: Be there, be seen trying, be consistent, and demonstrate that even small steps are still results delivered and failures lessons learnt on the journey..

  6. Complete the Task:  Finishing the job requires the courage to hold your vision, an ability to think through and overcome obstacles and to persist when others would walk

  7. Never Ever, Ever, Give Up: Keep at it despite the obstacles, despite negative comment, despite the odds

In principle these points are so easy to state and yet it takes enormous reserves of mental strength, courage and character to swim against the tide and achieve great things.  

Lets consider how persistence and motivation changed history……

 The Little Spider That Changed History……..

“A Spider that changed history?” I hear you ask; well as a small child I heard a great story demonstrating the value of persistence involving The Scottish King Robert the Bruce and a humble but determined Spider.

Robert the Bruce was defending his country from invasion by the English and their armies. Battle after battle he had fought with England. Six times Robert the Bruce had led his men into battle. Six times his men were beaten, and finally driven into flight. The army of Scotland was entirely scattered, and the King was forced to hide in a cave.

As he lay recovering, he noticed a spider over his head, getting ready to weave its web. He watched as it worked slowly and with great care. Six times it tried to throw its thread from one edge of the cave wall to another. Six times its thread fell short.

The spider persisted and on its seventh attempt was successful. Legend has it that Robert the Bruce gathered his remaining troops and told the story of the spider’s persistence. Using this story he reinvigorated and motivated his bedraggled army  into one last battle and one in which they won such a famous victory.

This childhood legend has had a very significant impact on my life during times of difficulty and failure.

Neil Steggall

 

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New Ideas - wcp 2014

Leader or Manager? – Vive la Différence!

The terms leadership and management are often used to describe the same person or even used as though the words are interchangeable. They are not. The differences between leadership and management are vast and varied and placing the wrong person in the wrong position could have dire consequences for your business.

Leaders are rarely great managers and vice versa. Both are much needed and both have very different skill sets needed to build and sustain a successful modern business.

In his book: Management, the Individual and Society, Peter Drucker stated that “Management is doing things right; leadership is doing the right things.” Whilst the phrasing of this is a little “clunky” I have thought about the quote over many years and I cannot really improve upon it.

There is no hierarchy between the two but it is important to recognise which is which as early as possible both to ensure each individual receives the best training and support and to plan where in your organisational structure these Leaders and Managers are going to fit. Understanding who your leaders and managers are will assist in strengthening your organisation and its corporate culture and morale.

Good leaders have a unique ability to rally team members around a vision. Their belief in the vision is so strong, and they are so passionate about achieving it that team members will naturally want to follow them. Leaders also tend to be willing to take risks in pursuit of the vision.

Managers, however, are far more adept at executing the vision in a very precise and systematic way, taking responsibility for the infrastructure and detail of the vision and working with the team to see the job done. Managers are usually very risk-adverse.

It is the combination of these two skill sets working in harmony which often differentiates two seemingly similar organisations.

I have often likened leaders & managers to composers and conductors. The composer creates the dream or vision and the conductor delivers it.

By, Neil Steggall

 

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Business Clown - WCP 2014

The Essence of Public Speaking

This is a further article in my “Essence of Series” Again it is short pithy and to the point – a mere Essence.

I was recently asked to comment on a speech still “under construction”, my colleague, a technically brilliant and a generally funny person, had detailed graphs, charts, photographs and a final wrap up slide show but he lacked The Essence of a good presentation without which you will leave your audience FLAT

To truly connect you need to fully deliver on three levels: Emotion, Novelty, and something Memorable.

1. Show Emotion

It’s so easy given the structured way in which we are trained to work to think that a similar format will work in a presentation: WRONG!

Forget the data, statistics, buzzwords, and marketing jargon and firstly connect with your audience emotionally.  The communicative connection to emotion is well documented and has been covered in detail in several of my blog articles over the past year. Initially engage emotionally by sharing something about you, something that demonstrates your vulnerability and thus your human side and follow this up with a strong emotional connection by demonstrating your passion for the topic or product you are addressing. The most successful and engaging communicators are those who can and do wear their passions on their sleeves and engage their audience emotionally.

2. Introduce Novelty

There are many ways to describe a pencil, or to say no, or ask for another chance, if you want to be successful find the most novel way of saying it. My Twitter account is @barkingmadblog and as with all other users I am limited to describing myself in 140 characters. A tough ask so I differentiate by using a photo of a cute dog at a computer, it’s a novel and subtle way of saying something more about me and our business – check it out! See what you think.

Last week I clicked “un-subscribe” from a site and was taken through to an exit page where the saddest and most lovable dog, with melting eyes, asked if I really wanted to leave him. Yes I did but I am still thinking and telling you about it – I bet many others turn back at that point, great novelty value!

Novelty doesn’t have to be vaudeville just present your case in a manner the audience doesn’t expect!

3. Be Memorable

Remember the lovable dog which tried to hold onto my subscription? Well I un-subscribed from about 6 sites that day and I cannot remember a single thing about the other five. Same action, same click, same outcome but one stays in my mind.

Now this is how your presentation or speech has to be structured, it HAS TO BE MEMORABLE!

These 3 winning points above do not detract from your subject. When you are asked to speak on a topic the organiser isn’t asking you for a slide show with facts and words they want an engaged audience that will leave having learnt lots of facts, tips and ideas, whilst enjoying a great time.

That way the audience returns, they recommend the series to their friends and colleagues and you get asked back at an even higher fee $$$$.

By, Neil Steggall

 

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A Paradox - WCP 2014

The Business Planning Paradox 

Some years ago I sat on the Australian board of a major US consumer goods company when the news came through that our regional boss in the US had retired and was been replaced by a newly retired US Army General with no business experience – imagine our misgivings!

Our new boss, let’s call him “Bud” arrived in Australia three weeks later to sit in on the presentation of our revised and much changed 5 Year Strategic Plan. He sat patiently through two days of presentations, projections, detail and the final summary asking pertinent questions and seemingly agreeing with our logic and direction.

On the third day, in our windowless board room, he kicked off the questioning by asking me “Son, how much faith do you personally have in this plan, would you bet your career on it?” I was confident in our team’s research, logic and the plan presented so I answered in the affirmative with: I am confident Bud and yes I would bet my career!

“Son I am saddened because you must be a lot dumber than I was thinking” was Bud’s response!

This was a bit of a downer to say the least. Bud continued:-

“Son I served in supply in Vietnam can you imagine starting your day at 5.00am not knowing where your troops were going that day, or how many would be alive or wounded that night, but knowing that wherever they were they needed mess tents and hot food, field hospitals, beds, fuel, ammunition, and vehicles to replace the damaged ones and if I let them down I let America down”

“Now Son my enemy was a lot harder to handle than your “competitors” so how helpful would a 5 day plan never mind 5 years have been to me?”

I assumed this was a rhetorical question and asked Bud just how he did plan his supply chain – I was incidentally impressed by the complexity of his logistics.

Bud’s response was to answer “Son I’m asking the questions today so let me ask you this; how far can you turn your head to each side?” around 90° each way, I answered, about 180° in total. “And how far can you lift and lower your head?” mmm, around 90° degrees each way “BULLSHIT!” he roared “you are very lucky if you can get a true 170° and let me tell you problems  will come at you from 360° and spherically so better be prepared!”

I may have made Bud sound like a difficult character, he wasn’t, he was different and we became friends and remained so for many years.

He had developed his famous 4 point plan to “Succeed in Everything” and here is the paradox: it was potentially an 8 Point plan! Let me explain:-

“The 4 point Plan to Succeed in everything”

RULE 1:

a)      Develop  a detailed written plan

b)      Don’t be too “stuck” to your plan

RULE 2:

a)      Calculate, Calibrate & Measure everything

b)      Don’t be bound by numbers, always look beyond

RULE 3:

a)      Constantly seek information, input and advice from others

b)      Follow your own heart & instincts

RULE: 4

a)      Delegate wherever possible

b)      Always retain control

Developing a detailed plan of where you want to be and how you plan to get there is to me absolutely essential to good management. Done well it involves bringing the whole team together to focus on the challenges and opportunities facing the organisation and the plans progressive development forces you and your team to think through each point, to question, determine and build a strong team vision.

 Don’t be too “sticky”! I like to think of a plan as a road map to guide us from point A to point Z, a very useful document without which many long journeys would fail. However if along the journey a bridge has collapsed or the mountain pass is blocked by a slide we have to put the map to one side and handle the blockage. So it is with business plans!

Calculating & Calibrating:  Peter Drucker said “What’s measured improves” and I am a huge Drucker fan. I am a bit of a numbers nut, I find spreadsheets akin to soothing pictures; when I sit down to review a business I enjoy dissecting the market, the innovation, the competition, the costs, expenses, cash flows and projections…….they can all be reduced to numbers and measured.

There is also a common corporate condition known as “Analysis Paralysis” this is the stage at which you can no longer see the wood for the trees. KPI’s are great but they can hide the bigger picture, so step back occasionally and look beyond the numbers – you may be surprised by what you see.

Seeking information, input and advice from others has long been a hallmark of good leadership and a strong indicator of an organisations culture and attitude. Until we strive fully understand every aspect of the market in which we operate, our relative position within it, our products relative positions within it, our financial position within it and the markets overall direction, wants and needs we are operating an incomplete structure, perhaps one lacking a vital component.

 A strong CEO or leader asks many questions in meetings or planning sessions but is careful in placing forward their views; they listen to, consider and weigh the advice, they read through the detail of market and financial analysis and then make an effective decision based upon their experience and their heart or gut instinct. This is what makes them leaders.

Delegation is another common denominator of strong leaders. Delegation not only provides leaders with more time to lead but it empowers subordinates whilst building their leadership and the organisations culture. It’s a wonderful, internal win-win!

A really good leader delegates on an 80/20 principle which I call “Loose, Tight, Management”. In effect 80% of decisions are safe, that is if the wrong decision is made it’s not life threatening to the Corporation but 20% of decisions are crucial and by keeping control over this 20% you always retain control of the whole.

A strong leader never criticises a poor decision or a failure arising out of delegation, these are valuable lessons for subordinates and each lesson well-handled builds the person and enhances the corporate culture.

The lesson I took from Bud was that there are few if any absolutes in an ever changing world and that the key to good planning is to understand exactly where you want to be whilst retaining the flexibility and the ability to change to adapt to changed needs and conditions.

The lesson was well taught and conveyed and as a consequence planning improved, I improved and the corporation improved and that is what “A Plan to Succeed in Everything” should deliver.

By, Neil Steggall

The Barking Mad Blog

Business Advice with Bite

http://wp.me/p401Wv-gz

 www.wardourcapital.com

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Creating an Entrepreneur - WCP 2013

Creating an Entrepreneur!

Is it possible….YES it is!

 

Entrepreneurs can be seen as the rocket fuel of new ideas, they create new businesses and form new industries and in common with such dangerous fuels entrepreneurs can occasionally end with an explosion, yet despite the occasional explosion we have to accept that entrepreneurs have driven commerce and commercial ideas forward for millennia.

Why are entrepreneurs and sound corporate management generally seen as oxymoronic? A commonly held corporate view is that entrepreneurs are too highly individual, unpredictable, difficult personalities and when it comes to team work and the subtleties of the office culture…..well perhaps it’s best not to go there!

Is this a fair view in today’s market or a historical carry over? Well perhaps it is time to re-assess, as entrepreneurs are changing and today’s business schools and universities are turning out business and law graduates with specific qualifications in entrepreneurship.

Having a brilliant, yet well rounded entrepreneur within a company could provide a much needed boost for most organisations. Imagine; a manager who embraces autonomy, who can not only see the problems but looks beyond to the solutions and the potential opportunities which can flow from the solutions.

A new generation of innovative and creative executives who can transform  ideas into profitable ventures. They strike the perfect balance – they look, act and think like entrepreneurs, but they work for the corporation. As any manager knows, such entrepreneurial team members are a rarity; however, this need not be the case.

Why not change your management culture to enable your future leaders to become more creative and entrepreneurial by developing a focused culture where innovation and creative thinking is encouraged, supported and of course rewarded.

One of the main problems facing many organisations is that they have lost sight of the importance of fostering creative thinking and innovation. They have become afraid of change and in doing so they are placing their business at risk and allowing their competition a valuable advantage.

Innovation should be seen as your ultimate corporate advantage and innovation springs from the minds of motivated and engaged employees, yes your entrepreneurs!

In the sixth century Sun Zu said “you may survive though defence but you can only win by attacking” and more recently Peter Drucker said “Business has only two functions — marketing and innovation.” Of course the most efficient and lasting method of attacking your competition is through marketing and innovation.

So what can your business do to be more competitive, to as Sun Zu recommends, “go on the attack?”

A decision to attack can filter down from the board through the CEO or an entrepreneurial culture within the organisation of creative thinking and visionary innovation can develop the strategy and sell it up the ladder.

Either route is possible but the latter will always deliver a better result.

A successful organisations culture inevitably stems from good leadership. This doesn’t mean that the board or the CEO have great ideas, they may have, but more importantly they create the environment in which managers are given the freedom and confidence to experiment and innovate. A management team encouraged to think and innovate will be motivated and will form a strong and positive corporate culture.

So how can we turn this into reality and create an entrepreneurial environment in your organisation? Here are my 7 steps to creating an entrepreneur:

  1. Create the environment. Ensure that management feel free and secure in scoping new ideas, in testing the established methods, in questioning and innovating at all levels and across all ideas. Allow for failures, if one out of ten ideas succeeds that’s probably a good trend line, eventually one of these ideas will boom!

  2. Thoroughly research and understand your customer and market needs and how well those needs are being met, look at how your organisation and products are perceived and then turn the table and examine your competitors. Equalling the value of competitive offerings is not going to “cut the mustard” if you want to win you must always ensure that you are leading the field in Marketing and Innovation and following through on customer service. Encourage your team to be bold, be different and be the best.

  3. Assume responsibility for your organisations cultural change and encourage and empower people to bring forward and implement their ideas and innovations.

  4. Support, learn from and work through the failures. If you get two or three successful new ideas and one absolute winner out of every ten pursued you are ahead of the trend line.

  5. Constantly strive to improve, to innovate and to lead, implement a strategy of marginal gains (The Power of Marginal Gains http://wp.me/p401Wv-di ) you will be surprised by the strength of results.

  6. Never underestimate your competitors, look at today’s automotive brands compared with those of 30 years ago. The industry initially laughed at Japan’s underpowered, small cars with floral carpets and upholstery but few would laugh today. Again Marketing & Innovation win!

  7. Your staff are outstandingly flexible and reliable assets to be deployed in the building of your business. Never see them as a cost, create an atmosphere of respect, treat employees as the rare and valuable resource they are and you will both reap the rewards of an exciting and vibrant corporate culture.

Some of the best ideas and simplest innovations are from businesses that already have had such a drive or survived times of stress. Don’t always look to reinvent the wheel, occasionally take the world’s best wheel and simply improve it. Sometimes copying is the best route forward, look at how the Japanese destroyed the UK motorcycle industry in the 1960’s and 70’s, they initially copied the UK machines and then introduced innovative and more advanced products.

 In the end, innovation is an state of mind. Train your key people to think and see differently, to search every day for the new, the better, form, function, value and service. This is where Steve Jobs was masterful in transforming not only an industry which he had helped create but in transforming the culture of a major global enterprise.

The value of leadership and empowering your management is enormous and in truth no one has a choice in the matter. Everyone must adapt, change and innovate and we can all with training, help and enthusiasm become entrepreneurs.

Empowering employees to be innovative and creative, and encouraging a ‘can do’ attitude can reap rewards for everyone – whether monetary or reward based – and companies that do this are more likely to survive the recession.

A recent show on the ABC called Redesign My Brain, hosted by Todd Samson, shows just how adaptable to new ideas, concepts and skills our brains are.

It has been said so many times but the answer is to constantly look beyond the horizon and use 360 degree vision and thinking.

 

By, Neil Steggall

The Barking Mad Blog

Business Advice with Bite

http://wp.me/p401Wv-gv

 www.wardourcapital.com

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Advisory Boards - WCP 2014

“Rain-makers, Prophets & Angels”

The

Business Catalysts

Wow! This sounds like the team for me. Where can I find them?

Its not a hard team to find just look around. Team members tend to carry a little grey hair, a touch of authority, plenty of business experience and perhaps the chink of available cash in their pockets.

Yes we are speaking of experienced Advisory Board Members.

As management turnaround specialists and consultants when we start to restructure a company or write a new business plan or turnaround strategy to drive profits forward we often wonder why such a potentially strong company hadn’t sought out the skills, knowledge, contacts and potentially equity of one or more sound Advisory Board Members

Businesses are often partnerships of two, three, four or however many shareholders and everyone starts off enthusiastically sharing a vision and a common goal. As the business grows so does its complexity, so do peoples roles, so does the risk profile and one or more of the partners starts to feel less sure about direction.

Being basically respectful individuals nothing is said but there again nothing is agreed upon and out through this crack in solidarity leaks direction, strategy and growth until the business suffers.

When any business reaches this stage something has to give and a positive action will usually result in a better result. Its often at this stage Advisory Board Members are recruited.

Our three tips for a positive Advisory relationship are:

PRE-EMPTION: Ideally you avoid the problem through forward thinking and planning. Manage this is by maintaining honest and open channels of balanced discussion between all shareholders and a good way to do this is to invite one or more independent skilled mentors to join your board as “Advisory Board Members”.

 An advisory member is not a director in a legal sense but the directors agree to include the advisory board member in all board meetings and in all key discussions and decisions. Often the advisory board member Chairs the Board Meeting and records the minutes to help maintain independence.

 INDEPENDENT CALM: If you have reached a stage at which the board is struggling to function consider appointing a qualified professional mediator who can bring a fresh and independent approach to the matters at hand and advise the board accordingly. Once the matter has been mediated you may consider asking the mediator to act as a temporary Advisory Board Member and Chairperson until you can make a permanent appointment.

THE SAGES: Smart operators don’t wait for problems to occur. They get in early and appoint an Advisory Board from the beginning. As an example, a company we advise in NYC appointed a strong advisory board when forming the company.

This board gave them credibility, depth of knowledge, skills, and contacts and made a significant contribution to the results of the first round fund raising. Three years on the company is now in pre IPO.

 The Advisory Board has helped with strategy and top level management along the way.

 Over the past three years the young entrepreneurial management team has been free to drive the business, implement key growth strategies, see a concept become reality and know that during the tough times, and there have been many, they had mentors to speak with and well-connected friends to help raise additional cash from time to time.

ADVISORY BOARD MEMBERS?

 Who are they: They are usually experienced, successful, well connected business people who are no longer fixed into an 8.00am to 6.00pm position with a single entity. They are usually over 50 years of age and very well qualified.

 What do they offer: Other than huge experience they offer balance.  A little grey haired reserve to offset and complement youthful entrepreneurial vigour.  They have usually experienced much in their careers and very little surprises them, a single phone call can open many doors and independent advice protecting shareholders and the company is invaluable. Little is new in the world and a really top Advisory Board Member has experienced most problems and many opportunities over their career,

 What do they cost: Well how long is a piece of string? I prefer to look at what they will add but on the issue of cost it varies enormously. Most will look at working on a minimal cash basis tied to success fees and share options, others look for a fairly nominal sum valuing the challenge.

 Why appoint an Advisory Board: Because on almost every level it’s a real win, win, situation. Managing start-ups or young high growth companies is about as hard as life gets, you need all of the help you can get and strong, independent, experienced help with great ideas and connections has to work.

To me bringing on board such skilled and connected advisor’s is a no brainer, it is a rapidly growing model globally and as I commented earlier offers so many win, win, benefits to all parties. Choose each other carefully, respect each other and reap the rewards.

 By, Neil Steggall

The Barking Mad Blog

Business Advice with Bite

http://wp.me/p401Wv-fI

 www.wardourcapital.com

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3 Short Steps to Success 

3 Short Steps to Success - WCP 2014

Some years ago, a small number of our organisations global executives, myself included,  met in Buenos Aires to engage in an intimate three day intensive workshop with a “management guru” who was at that time considered to be one of the world’s greatest “thinkers”.

This was my second session with this guy in 18 months and I knew he would drive us hard and along unconventional routes. On the second day and without warning he asked “Neil take a pad and paper into the interview room and over the next 30 minutes prepare in as few words as you can, a presentation on  – what you need to be a success – you have to be fully prepared to discuss and defend your theory on your return”……WOW!

Shaken and nervous I found myself 45 minutes later presenting for the first time my “3 Short Steps to Success”.

I hear you ask: “Can it really be so easy as to define a path to Success in 3 Short Steps?”

Yes. I believe it can. I believe I later used this 3 Short Steps to Success method to achieve my first real “non-corporate business success” and I believe you can use it too. The lesson I was taught in Buenos Aires is that often the simple path is best.

Note I used the word believe three times in the previous sentence. It’s not bad writing or bad editing its positive discrimination, more on belief later.

There are three core common factors in achieving anything of significance be it in sporting, academic, professional or business arenas.

THE VISION:

“Dreaming, after all, is a form of planning. –Gloria Steinem”

If you know what you want to achieve, if you can close your eyes and envisage it, taste it, feel it then you are already well along the first step to success. You don’t have to know the detail but you need to understand on a subconscious level where you are going.

I am sure Ray Kroc didn’t wake up one morning and say “hey I am going to build the world’s largest burger chain today”. But I am sure that as an American of Czech origin he knew he wanted his part of the American dream and that dream was something, a vision or dream, he carried with him every moment of every day.

The Success Vision you develop is about your destination rather than the journey. To a large extent your destination will determine the journey.

The first important step is to envisage that destination because if you don’t know where you are going you will probably never arrive!

THE BELIEF:

“Believe you can and you’re halfway there. –Theodore Roosevelt” 

Once you have developed the vision you have to develop the belief in your ability to complete the journey, to follow that vision through to journeys end.

Part of building belief is to break the journey down in your mind into manageable chunks, to start to fill out your vision, understand it and believe in it implicitly.

Essentially you have determined where you are going and you have to train yourself, body, mind and soul to reach that end point.

We each train our bodies and minds in different ways. In this example we are reinforcing our belief in a vision of our making. Quite a task but by imagining scenarios, dreaming, thinking through our vision that vision starts to become reality and when that happens you develop a belief in your vision and your vision starts to become reality.

THE PERISCOPE:

“Certain things catch your eye, but pursue only those that capture the heart. – Ancient Indian Proverb”

Once you have locked in Vision and Belief the journey begins and the specifics of how success is going to be achieved come into play.

When I first started speaking on the 3 Steps to Success I used the phrase “Keeping  Your Periscope Up”  to describe a subconscious search that would be constantly scanning the horizon to  highlight the occasional “blips” of potential opportunity.

Imagine as you go about your day to day business carrying your vision and belief whilst the “Periscope” of your mind is scanning the horizon and filtering the signals to uncover opportunity.  Over a number of years this “Periscope & Filter” approach has thrown up for me many more quality opportunities than I have found or devised brainstorming in the office or any other method.

Let’s return to Ray Kroc once again. Do you think when in 1954 as a kitchen equipment salesman he wandered into the MacDonald brothers store in San Bernardino, California thinking of buying it? No. But he had his Vision and he had self-belief and his periscope radar “pinged” loudly..

His had been a long, tough, journey, he was 52 years old and yet his periscope was up and operating. The fact that this small burger store was so popular as to need 8 new “multi-mixers” started him thinking, the fact that the store was so efficient fed that thought process and his Vision saw a chain of burger outlets.

Never lose sight of the fact that success is many things to many people. A good friend of mine was an acclaimed AFL player for a major team yet he never played in a Grand Final. I asked one day how he felt about that and he said “every time I walked onto the ground and heard our supporters roar, I couldn’t believe I was so lucky or so proud. Win lose or draw I was doing what I had dreamt of”.

This is success. My friend later enjoyed a successful off field business career and now he throws his still considerable energy into chairing a not for profit organisation. A successful life lived well.

Two favourite quotes of mine which have relevance here are:

“The most difficult thing is the decision to act, the rest is merely tenacity”. –Amelia Earhart

Limitations live only in our minds.  But if we use our imaginations, our possibilities become limitless.” –Jamie Paolinetti

 

By, Neil Steggall

The Barking Mad Blog

SMS Advice with Bite

http://wp.me/p401Wv-fZ

www.wardourcapital.com

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Perception - WCP 2014

Market Perception – What Do You See?

What do you see? It is an interesting question. Why? Because what you see is often being manipulated by a process known as “Perception Marketing”.

Perception Marketing has become big business and until recently I had applied little thought to the question of Perception versus Reality. People apparently now build entire careers around Perception Management, they are not involved in Product Development and Product Improvement, their mission in life involves changing us! Changing our Consumer Perception!

My regular readers are familiar with my commitment to Peter Drucker as the essential marketing guru. His definition of marketing is: – “to take something useful and turn it into something desirable”. I thought I understood this, yet recently I have encountered some surprising and lasting, examples of perception marketing driven desirability.

A couple of weeks ago I was having a product discussion with my son, the CEO of a US based FINTEC company, and I offered the opinion that the product (under discussion) was crap! He answered promptly, “I know that, you know that, but the market perception is different and the market perception is reality”.

At first I was disturbed by this, isn’t it wrong to sell a substandard product, even if the customer is satisfied?  Well let’s think again before we decide.In Maxx  Barry’s 1999 satirical novel on marketing, Soda & Cie, he writes that “Marketing’s first golden rule is that Perception is reality”

New Scientist magazine recently published an article describing how researchers at Harvard tested a new painkilling drug as well as placebos on migraine sufferers. The placebos, despite their lack of real painkilling ingredients, were remarkably effective. “The placebo… accounted for more than 50% of the drug effect,” the scientists found.

To most of us this is hardly news; drug trials routinely incorporate control groups who are given placebos to assist in identifying results that are outside the standard placebo effect. Other drug trials have shown that tiny placebo pills can have stronger effects than large ones because they are perceived as especially potent. Placebo colour can make a difference, too.

I had to ask myself are placebos “my crap” or “market reality”?

The lesson for marketers is that our experiences are shaped by our expectations

Do we have other examples of “placebo marketing”?

Until recently we had a substantial investment in the wine industry. Wine is the ideal product to illustrate how marketing perception affects consumer experience.

Most of us and even those within the industry don’t have the honed palate of a master of wine, and how we enjoy wine is heavily influenced by what we think we know about the wine.

Perception marketing experiments showed that the same wine thought by a taster to cost $45.00 rated better than when it was thought to cost $5.00. Not only was this a win for the perception marketers, it actually lit up a wider area within the pleasure centre of the taster’s brains. In other words the perception became reality, it really did taste better to them.

It’s an example of consumers really believing “You Get What You Pay For” – yet again Marketing Perception has trumped reality.

This brings me back to Peter Drucker’s quote. Desirability may not be a product of quality but of expectation.

By, Neil Steggall

The Barking Mad Blog

Business Advice with Bite

http://wp.me/p401Wv-fp

 

www.wardourcapital.com

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William Shakespeare WCP 2013

Much Ado About Nothing – When Doing Nothing Lifts Productivity.

In literary circles debate continues as to just what Shakespeare’s words relate to and that’s been going on for 400 years so let’s not expect too much management progress during the course of this article, however, its never too late to change and productivity improvements rapidly build the bottom line!

 “So much of what we call management consists of making it difficult for people to work.”

Peter F. Drucker

Now be honest….is this happening in your work place? Many managers and business owners still confuse activity with action. If phones are ringing keyboards clicking and people are rushing then we have action and action generates profit….right? WRONG!

Activity is all of the above but action is doing that what is needed, when it is needed and for the common good. Not all of us are as good at action as we might like to be.

There are days when it would be best if we just stayed away from work because on those days we are simply put – counter productive!

Five CPF’s (Counter Productive Factors) stand out in my mind and I have seen havoc wreaked by each and every one of them.

Let’s have a look at the 5 Key CPF’s:

The Hero Syndrome: This is the CPF which most trips my switches, the Corporate Hero who works all night drafting a document or arrives on a flight from Timbuktu at 6.00am and comes straight into the office. Unwashed, crumpled and lacking sleep do they really imagine they are going to be productive let alone make good decisions? Get home and go to sleep you naughty children!

The HUNGRY Warrior:  This manager is simply too important to take time to eat. As they have told everyone they arrived at work at dawn carrying a mega Starbucks (a bucket of luke warm, sweet liquid, usually brown) which has nourished them through to 2.00pm. Why they wonder are they throwing note pads, pencils, shouting and blinking back tears as their staff look on in joy? Its because your brain as ceased to function due to a lack of essential food. Go home eat and then stand in a corner until bed time!!

The Martyr: Don’t worry it’s only a sniffle, yes I am sweating, I ran for the lift, no my temperature has been steady at 40° all night and I should know as I didn’t sleep a wink! Ahhchoo!! Now how and why can this person possibly believe they can a) avoid infecting the innocent and b) make any contribution to the management of the organisation? Does this person think on a good day or can we excuse today’s silly performance on the basis of ill health. Go home immediately and wear a hair shirt for 24 hours!!

The Beast: It’s a long story which started late yesterday when driving home. Some absolute moron driving a “domestic car” would not let the beast into the traffic. Worse was to come. Finally home the beast’s life partner just didn’t care, the gin was Tanqueray and not BBR No3 as ordered and to cap it all the tuna was overcooked! Obviously sex was off the menu and our beast was again insulted in the morning traffic finally arriving 15 minutes late for the finance committee. The coffee was cold; the report still printing and the CFO was a moron. Now our beasty can actually be quite pleasant but too much work and not enough play has done its dirty deed. So Beasty go home, relax, and stay there until you can genuinely acknowledge that drivers of “domestic” cars have some rights and that your long suffering partner had done a great job over dinner and gin’s (authors note) –although BBR No3 is exquisite and really should have been available!

The Wolf: I am going to stretch your new age cred here and suggest that in my observation a section of our population is affected by Luna movements. Yes the full moon weirdos! I won’t blind you with science here but I knew someone who became so irrational with each full moon, his eyes became red rimmed and he was for a couple of days quite, quite mad! There have been others, far too many to mention who become just a little odd every 28 days or so. In fact my own family believe it best not to ask me for money or criticise any aspect of my being for this short period each month. Download a Lunar diary and monitor your colleagues, generally they can function but eccentrically so. Treat these sufferers kindly but discretely hide the knives.

“Efficiency is doing the thing right. Effectiveness is doing the right thing.”

Peter F. Drucker

 

By: Neil Steggall

The Barking Mad Blog

SMS Advice with Bite

http://wp.me/p401Wv-fk

www.wardourcapital.com

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The Price is Wrong - wcp 2014

Your Pricing Is Wrong: And It’s Wrecking Your Business.

A friend of mine told me that she was “really getting on top of her charge out fees” this year. She proudly told me what her annual income target was. I asked if that allowed for full overhead recovery, car and travel costs, travel time, office expenses, telephone, computer, tablet, entertainment, sickness etc and was it inclusive or exclusive of superannuation.

After an embarrassing pause I realised her real income was in fact around 60% at best of the gross income projected and for a person of her qualifications, skill, experience and ability to deliver first class work it was ridiculously low!

Single person consultancies tend to bill by the hour and even larger groups calculate a charge out rate based around hours employed. This methodology works best where the supplier is in a strong position and the buyer has little or no idea as to the real time involved – let’s look at Corporate Law firms as an example of those who benefit from this.

Clients are also ignorant of how a consultant calculates a fee; “A thousand a day? ****** me they earn a fortune, how can they be worth that?” well more as to why that $1,000 is really less than $500 later on.

And that scenario completely misses the point.

When we buy a loaf of bread or a cake we don’t ask the baker how many hours were invested in its production before agreeing on a price, but we do look for subtle evidence of quality etc. and that is the crux of pricing by value not by cost.

Pricing by Value Not by Cost! Take this into your mind and really think it through because it could just change your life!

Pricing is one of life’s great balancing acts but it’s also about confidence. Never boast about how good you are or criticise your competition. You don’t need to, simply demonstrate quiet professionalism and your pricing will say everything about the value and quality of your service.

Spell your price out with confidence and pride. Speak value, shout quality, whisper differentiation, demonstrate results and the price simply doesn’t matter.

Pricing by cost means that you determine how much a job will cost you and add a mark-up, however, this means that your client pays for your efficiency (or lack thereof) you turn yourself from a valuable resource into a commodity.

As Blair Enns, author of Win Without Pitching says: “Bury the billable hour.” Every client would rather talk about the value delivered than the hours provided.

Quantifying Value:

There are two simple ways for a consultant to provide value to a client. Either improve revenues, or reduce costs. In order to determine which of these your consultancy will provide (and implicitly price by value) you need to get to know and understand your client’s business, their market position and some basic facts about their customer value. Two simple and common measures are:

  1. The lifetime value (LTV) of customers for your client

  2. The client’s cost of customer acquisition (COCA)

It is vital that you understand the LTV & COCS  of your clients target customers because it ensures that their marketing spend is a commensurate amount to acquire that customer.

For example, a bespoke jeweller could presumably invest in a much higher COCA than a costume jewellery retailer. The LTV becomes increasingly important if your client is contemplating a future exit strategy.

Asking these questions and obtaining this data will help you determine how much value, in the form of revenue and positioning the quality of your work will contribute and thus the fee you charge.

Of course asking these questions of your client differentiates you and the detailed approach underlines your value proposition.

Finally irrespective of your business being a one person show or a 100 person show do not allow yourself to be judged on or compared to $(x) per hour. Why? Because less than 70% of your hours worked in any day are going to be billable, 10% to 20% of your time will be spent solving problems and another 10% to 20% will be spent thinking of or pitching for new business.

A thousand dollars a day sounds a lot. To the greedy client or just an unthinking client it is $365,000 a year whereas in reality it is half that at best and that’s before you make a profit.

As a self-employed consultant in the service industry you work long hours, you interrupt your family life, you worry at nights and weekends and you deliver a great product and service.

Wake up to this and let your fee reflect the quality and value of your work. Most SME professionals I see are really working for very little financial reward indeed and telling yourself it’s just until you get established is WRONG. You are established and that is why you can offer such quality and value in your work.

 If your pricing is wrong your business is stuffed! In 5 years’ time 85% of SME’s started in 2014 will have failed – poor pricing will play a large part in their downfall.

By: Neil Steggall

The Barking Mad Blog

SMS Advice with Bite

http://wp.me/p401Wv-f6

www.wardourcapital.com

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Fleeting Time - WCP 2014

The Essence of Time Management

“Until we can manage time, we can manage nothing else.”

Peter F. Drucker

How do you rate on time management? How many times have you said “there just aren’t enough hours in the day” well you are WRONG! there are 24 equally sized, nicely paced, hours in every day. Enough hours for some to build global corporations and others to run whole countries and even for mothers with Triplets to cope, so let’s face facts………………..you are just a poor time manager!

In reality I could explain the essence of time management as a piece of paper and a pencil (yes a task list) but it wouldn’t make for a very interesting article and I couldn’t introduce complex graphs and charts so……

The two main issues with time management are procrastination, (6 Key Causes of Procrastination – http://wp.me/p401Wv-a8 ) and spending too much time on the wrong things.

No matter how much we vow to change we’re still procrastinating when we know we can’t afford to, still getting caught in never-ending meetings, allowing ourselves to be interrupted, putting out fires and, in general, managing by crisis.

Most of us don’t have a time management problem — we have a problem prioritising. Remember the pencil and paper? Without it we get distracted and eventually lost in a cloud of problems, which hide the important things and, before we know it the day is over and nothing got done – again.

Here are some things to remember:

Our work life balance is and has to be a pendulum. Sometimes we need to give all the time we have to work and other times we need to give more time to our personal lives. Accepting this is the first step to control.

If we can’t control what’s going on around us (and most of the time we can’t), then we have to control how we respond.

A revelation to me was the day our CEO entered my office and asked why I had so much work on. I explained that work kept pouring in and he said “just because someone asks you to do something or even to do something by a set time, you don’t have to”. His advice was to assess importance, relevance and true urgency and if something didn’t fit, using great tact and good manners I was to explain why it was impossible for me to take the work on.

He introduced me to the late Stephen Covey’s Time Management Matrix which is a fabulous and simple time management tool and once you have used it I assure you it changes everything.

If you are interested you can download images of it and further explanations from Google.

Covey breaks his matrix into four quadrants: 1 to 4 and I have always called them the four “D’s”

              Time Management Matrix 2 - WCP 2014

  1. Important – and Urgent (Do now)

  2. Important – Not Urgent (Decide when to do it )

  3. Not Important – Urgent (Delegate)

  4. Not Important and Not Urgent (Dump)

The key is to start to prioritise everything by categorising each task as it arises:

Why the four “D’s” I hear you ask……….

 Do it Now: You MUST deal with these tasks immediately. They need to be put on the top of your to-do list. But YOU don’t have to be the one to deal with all of these. You can delegate them up, down or out as long as you’re confident that those to whom you delegate are capable of handling them.

Decide When How & Who: This is where you want most of your work to be. As a manager, you must be forward-looking to review, plan and build. If you want to stop managing by crisis, you must start moving more of these to the top of your to-do list.

Delegate:  Delegate as much as you can but again delegate them up, down or out as long as you’re confident that those to whom you delegate are capable of handling them.

Dump:  There are some things that just should not be done at work or handled by you. Its a tough call but one you must make.

If you are an open door person its probably a good idea to try a few weeks with the door closed whilst you are handling numbers 1 and 2. If you explain in advance everyone will understand and in a few weeks you should be able to leave the door open as the message will have got through to everyone by then

By, Neil Steggall

The Barking Mad Blog

SMS Advice with Bite

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www.wardourcapital.com

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Business Writing - WCP 2014

The Essence of Business Writing

“The Essence of Business Writing” is number two in a series of ten “Essence of Management Articles”

You may have rattled off brilliant essays throughout school or university; however, business writing is tough. It’s full of subtleties and more dangerous than a minefield. It is a make or break it skill which everyone in business really needs to be on top of.

If you cannot clearly and simply convey your ideas into business writing for others to follow; or write a concise, accurate and compelling business plan  you are going to struggle to communicate with and develop the teams and structures you need to succeed in business.

Even in today’s seemingly casual environment business writing skills are vital. A well written email will deliver you a far better result than a weak one and a well written business plan, loan application or equity document can make your future just as surely as the reverse is true.

As a new graduate I was allocated to the office of the Finance Director a man of terrifying intellect and a reputation for the fiercest temper on earth. I recall in my early days that sitting in his large and plush office, which was always filled with clouds of cigarette smoke, scared me to the point that my mouth was too dry to use for speech and my bladder always appeared to be filled to maximum discomfort.

After a few weeks I was called into his office and he handed me a large clamp file of photocopied ledgers, notes, calculations, drawings and photographs and said “Can you turn this into a report on the cost savings to be made at the Victorian pipe plant? Nothing too detailed, say about ten pages; need it for next week’s board meeting” I nodded speechless and backed out of his office.

I froze, at last I understood “analysis paralysis”, I spent the rest of that day shuffling the papers and a large part of the next day doing the same. I could see and understand the data but I had no idea as to how I could even start to translate the complex data into a concise, meaningful and interesting report.

This was a test and I knew the cost of failure.

After hours of terrifying inactivity I thought back to my school days and how I used to piece together essays and I came up with the following written list of questions to myself.

  1. What is the purpose of the document

  2. What am I trying to say

  3. Who am I saying it to

  4. How do I present the information

  5. Have I quantified/qualified  my facts

  6. What is my conclusion

  7. Does it make sense

  8. Have I proof read it

My eight point format worked, the report was well received and importantly I still use this list today!

I think on that day I reached “The Essence of Business Writing” and it lives on. Let’s see how the 8 point essence can help you.

  • What is the purpose of the document: If you cannot answer this question clearly in three lines don’t write it because no one needs to hear it.

  • What am I trying to say: I literally write or type this question and its answer at the top of my first draft page of any complex document as I start to write.  I limit both question and answer to four lines each and if I have difficulty with space I rethink the documents whole premise. This question and answer should be at the core of every single communication even a simple email – though I usually allow a mental Q&A for emails.

  • Who am I saying it to:  Each audience has differing needs and expectations. Think this through; ask what will make a difference to your target audience. You are best to use a “different voice” depending on your intended audience. Therefore your writing style, words and authority should change accordingly. The facts are the facts but the audience changes.

  • How do I present the information: Remember when you start to write your report you know the subject backwards. Your reader is in your hands, take then on a sensible, fact backed and sequential journey finishing with a tight summary and sensible conclusion.

  • Have I quantified/qualified my facts: Your discovery that blue widgets outsell red widgets 10 to 1 is astonishing but when supported by respected research your discovery is in lights and your career is taking off. It’s all about cred! Yes research credibility brings respect.

  • What is my conclusion: In a well-researched, balanced and carefully thought through piece of business writing the conclusions will slowly emerge. Sometimes not the ones you or your audience wanted. Facts are facts and conclusions are drawn from those facts. Always call it as it is, don’t dress it up, a “bad” answer is much better than the wrong answer.

  • Does it make sense: In today’s world email a draft to a friend or mentor, their subject knowledge will usually be less than yours so see if it makes sense to them. Listen to input, take it on board but ultimately it’s your report and your decision.

  • Have I proof read it: The more important the document the more important the proof read and I don’t mean a computerised spell checker. Don’t tell anyone but I still have issues here. I check, I double check, my dog checks and yet every time I press “Publish” half a dozen errors flash in front of my eyes!

By, Neil Steggall

The Barking Mad Blog

SMS Advice with Bite

http://wp.me/p401Wv-eH

 

www.wardourcapital.com

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Perception - WCP 2014

The Importance of Market Perception

Perception Marketing has become big business and until recently I had applied little thought to the question of Perception versus Reality. People apparently now build entire careers around Perception Management, they are not involved in Product Development and Product Improvement, their mission in life involves changing us! Changing our Consumer Perception!

My regular readers are familiar with my commitment to Peter Drucker as the essential marketing guru. His definition of marketing is: – “to take something useful and turn it into something desirable”. I believed I understood this, yet recently I have encountered some surprising and strangely lasting, examples of perception marketing driven desirability.

A couple of weeks ago I was having a product discussion with my son, the CEO of a US based FINTEC company, and I offered the opinion that the product (under discussion) was crap! He answered promptly, “I know that, you know that, but the market perception is different and the market perception is reality”.

At first I was disturbed by this, isn’t it wrong to sell a substandard product, even if the customer is satisfied?  Well let’s think again before we decide.

New Scientist magazine recently published an article describing how researchers at Harvard tested a new painkilling drug as well as placebos on migraine sufferers. The placebos, despite their lack of real painkilling ingredients, were remarkably effective. “The placebo… accounted for more than 50% of the drug effect,” the scientists found.

To most of us this is hardly news; drug trials routinely incorporate control groups who are given placebos to assist in identifying results that are outside the standard placebo effect. Other drug trials have shown that tiny placebo pills can have stronger effects than large ones because they are perceived as especially potent. Placebo colour can make a difference, too.

I had to ask myself are placebos “my crap” or “market reality”?

The lesson for marketers is that our experiences are shaped by our expectations

Do we have other examples of “placebo marketing”?

Until recently we had a substantial investment in the wine industry. Wine is the ideal product to illustrate how marketing perception affects consumer experience.

Most of us and even those within the industry don’t have the honed palate of a master of wine, and how we enjoy wine is heavily influenced by what we think we know about the wine.

Perception marketing experiments showed that the same wine thought by a taster to cost $45.00 rated better than when it was thought to cost $5.00. Not only was this a win for the perception marketers, it actually lit up a wider area within the pleasure centre of the taster’s brains. In other words the perception became reality, it really did taste better to them.

It’s an example of consumers really believing “You Get What You Pay For” – yet again Marketing Perception has trumped reality.

This brings me back to Peter Drucker’s quote. Desirability may not be a product of quality but of expectation.

By, Neil Steggall

The Barking Mad Blog

SMS Advice with Bite

http://wp.me/p401Wv-eC

 

www.wardourcapital.com

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Leadership Attitude WCP 2014

“The Essence of Leadership”

 

I recently completed a series of short presentations on the 10 key aspects of SME Management. They are deliberately short, condensed and to the point, so much so that I have used an expression from the kitchen and called the series the “Essence of Management”

Those of you who know me or are regular readers of my articles you know my reputation as an unmitigated waffler so reducing complex points to an essence whilst retaining both relevance and interest was quite a challenge!

To be a good leader you need to grasp, understand and build on “The 3 C’s of Leadership”

  1. Competence: your ability to do the job

  2. Credibility: ensuring others believe you can do the job

  3. Confidence: knowing you can do the job and that others believe in you. You have a sense of purpose.

So there you have it!!….Leadership Essence.

Now to provide a little polish before you pin on the Gold Leadership Star.

  • It’s okay to show humility. When you make a mistake admit it, own it and own the solution. Don’t wallow in a bath of negativity, just fix your mistake and move forward.

  • Accept that we all lack some awareness of our own strengths and weaknesses. This acceptance allows people to see and know a little about who and what you are as a leader.

  • Set time some each week to reflect on your leadership. Respect this time as you would an important meeting and be there.

  • Praise and thank your team. Let them feel the win! Take your pride in theirs. Your win in their win.

  • Lead. Show a sense of purpose. Where are you leading? Why are you leading? Why is it important to the organisation?  Communicate these points clearly and frequently lead your team through them.

 “Leadership Presence” . . . is the way you connect with people. Look and act the part.

Leadership is about the people you serve, but it’s also about you. As the leader it is your responsibility to create the conditions and supply the tools for your team to succeed. If you lead well the team will follow, there is a quotient of reciprocity, your team will realise this, it’s called respect.

As the leader you have an advantage; use it for the good of your team. Humility is a sign of strength of character, a sign of self-awareness, and also, it’s a sense of humanity.

Sip on this essence and think about leadership!

Neil Steggall

The Barking Mad Blog

SMS Advice with Bite

http://wp.me/p401Wv-dE

www.wardourcapital.com

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Positive Pricing WCP 2014

The Power of Positive Pricing!

And how to use positive pricing to double your profits $$$

 

When discussing management theory some subjects are greeted with much more enthusiasm than others and recently I addressed a group of SME owners on “Improving Profits” a subject dear to all and a topic pretty well guaranteed to ensure rapt audience attention irrespective of the speakers skill.

Yes profit was in everyone’s mind and the subject was greeted with enthusiasm, yet as I probed, few participants really understood what profit is, how it is calculated and what profit really means.

After some general discussion I threw open three questions:-

  1. Do you know what your profit was last year?

  2. Do you know how to define or calculate your profit?

  3. Do you want to double your profit next year?

Let’s leave question 3 aside for now as I reckon you can guess the answer. Disappointingly however, few participants could provide a clear and accurate answer to questions 1 & 2, so we spent some time discussing the calculation and meaning of Gross Profit, Operating Profit, EBIT and finally Net Profit.

We covered off a little basic accounting and financial theory before agreeing that for everyday use EBIT (earnings before interest and tax) was perhaps the most relevant and practical “measure of profit” and that most companies operate within a rough ratio of EBIT of to revenue of between 5% and 20%. SME’s tend to perform a little better (in my experience) at between 10% and 20% and so we chose 15% as our optimum target.

Obviously question 3 brought about an enthusiastic if predictable response…….everyone wanted to double their profit! The reasons for wanting to increase profit were many and varied spanning those who were currently unprofitable and struggling to those who saw profit as the ultimate measure of success – more on that later!

So given the enthusiasm for the subject the doubling of profit was discussed as a group and the group ideas noted. Those ideas or suggestions for improving profits emerged in roughly the following order of importance:-

a)      Reduce costs

b)      Lift sales

c)       Spend more on marketing

d)      Use social media to drive sales

e)      Improve/increase product range/service

f)       Buy better/lower costs (stock, raw materials, etc)

g)      Improve efficiencies/productivity

h)      Expand/take on more staff

We work-shopped these 8 ideas until we collectively agreed that lifting profits this way wasn’t as easy as it looked and so I asked a very simple question.

“What would happen if you increased your selling prices by 15%”?

The consensus was nothing much. It may lose some customers but by focusing on service standards and a strong customer contact and communication program customer loss could be minimised if not overcome altogether.

Let’s return to our earlier accounting theory and take the example of an SME with revenues (sales) of $500,000 pa.

After wages, costs and overheads, that hypothetical business will generate an EBIT, as discussed, of approximately 15% of revenues –so let’s say $75,000 per annum.

If we applied an across the board price increase of 15% the hypothetical business would generate additional revenues of $75,000 which if costs are stable (as they should be) w ould flow directly to EBIT thus doubling your profit.

If your selling price was lifted by only 5% then your revenues would be $525,000 and EBIT $100,000 giving you an increased profit of 33.33% and so on.

Surveys demonstrate three consistent failings in SME profits:_

         i.            A reluctance to charge what the job or service is really worth – remember your EBIT or PROFIT is only 15% of revenues the rest goes to cover wages and costs

       ii.            A willingness to discount by 10% or 15% when asked. This “wipes out” your profit – why give it?

      iii.            A failure to pass on cost increases as they occur. This means your profit is slowly eroding by at least CPI and possibly more.

The money you retain or take out of your business each week to feed your family and pay the household bills with isn’t profit. That is your wage.

Given the risk, stress, long hours and commitment you dedicate to building your SME you need to see a profit over and above your wages!

Your profit can be fine-tuned by attending to some of the points raised in a) to h) above but addressing your price points will give you the fastest and most efficient profit improvement.

Earlier I mentioned that some SME owners see profit as the ultimate measure of success. Profit is perhaps better seen as the fuel that can be used to build your business through:-

  • Improved conditions and training for employees

  • Providing the highest possible and most up to date services to your customers.

  • Allowing access to quality advisor’s and advice

  • Employing and retaining the best people

These four points will lead to the achievement of sustainable profits and when you come to sell your business sustainable profits are very valuable indeed!

Neil Steggall

The Barking Mad Blog

SMS Advice with Bite

http://wp.me/p401Wv-dA

www.wardourcapital.com

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Winning WCP 2013

The Power of Marginal Gains

I first heard of the power of marginal gains as a student. Back then “the power” of ideas such as marginal gains, marginal pricing,  marginal costing, marginal probability and compound interest were all being used in business studies to show how something didn’t have to be “wiz, bang, new, fast and you beaut” to make a difference. It was power man!

Compounding interest has continued to fascinate me and occasionally I while away the odd hour on Excel running compounding options. Truly fascinating…..really! The largest deal I ever closed was when as a young executive I convinced the board of a major American company to supply us on the basis of marginal costing.

Recently on a quiet Saturday (I know it’s sad) I googled “The Power of Marginal Gains” expecting to find a plethora of MBA theses on the subject but instead I found page after page of British cycling triumphs and a guy called Dave Brailsford – Now Sir Dave all thanks to his marginal gains!

British Cycling…….Why?

No British cyclist had ever won the Tour de France, but as the new General Manager and Performance Director for Team Sky (Great Britain’s professional cycling team), that’s what Brailsford was asked to do.

His approach was simple.

Brailsford believed in a concept that he referred to as the “aggregation of marginal gains.” He explained it as the “1 percent margin for improvement in everything you do.” His belief was that if you improved every area related to cycling by just 1 percent, then those small gains would add up to remarkable improvement.

They started by optimizing the things you might expect: the nutrition of riders, their weekly training program, the ergonomics of the bike seat, and the weight of the tires.

But Brailsford and his team didn’t stop there. They searched for 1 percent improvements in tiny areas that were overlooked by almost everyone else: discovering the pillow that offered the best sleep and taking it with them to hotels, testing for the most effective type of massage gel, and teaching riders the best way to wash their hands to avoid infection. They searched for 1 percent improvements everywhere.

Brailsford believed that if they could successfully execute this strategy, then Team Sky would be in a position to win the Tour de France in five years’ time.

He was wrong. They won it in three years.

In 2012, Team Sky rider Sir Bradley Wiggins became the first British cyclist to win the Tour de France. That same year, Brailsford coached the British cycling team at the 2012 Olympic Games and dominated the competition by winning 70 percent of the gold medals available.

In 2013, Team Sky repeated their feat by winning the Tour de France again, this time with rider Chris Froome. Many have referred to the British cycling feats in the Olympics and the Tour de France over the past 10 years as the most successful run in modern cycling history.

And now for the important question: what can we learn from Brailsford’s approach?

The Aggregation of Marginal Gains

It’s so easy to overestimate the importance of one defining moment and underestimate the value of making better decisions on a daily basis.

Almost every habit that you have — good or bad — is the result of many small decisions over time.

And yet, how easily we forget this when we want to make a change.

So often we convince ourselves that change is only meaningful if there is some large, visible outcome associated with it. Whether it is losing weight, building a business, travelling the world or any other goal, we often put pressure on ourselves to make some earth-shattering improvement that everyone will talk about.

Meanwhile, improving by just 1 percent isn’t notable (and sometimes it isn’t even noticeable). But it can be just as meaningful, especially over time.

And from what I can tell, this pattern works the same way in reverse (in other words an aggregation of marginal losses) a 1 percent decline here and there — that eventually leads to a problem.

In the beginning, there is basically no difference between making a choice that is 1% better or 1% worse. (In other words, it won’t impact you very much today.) But as time goes on, these small improvements or declines compound and you suddenly find a very big gap between people who make slightly better decisions on a daily basis and those who don’t. This is why small choices (“I’ll take fries with that”) don’t make much of a difference at the time, but add up over a period.

The Bottom Line

Success is a few simple disciplines, practised every day; while failure is simply a few errors in judgement, repeated every day.

Most people love to talk about success (and life in general) as an event. We talk about losing 50 pounds or building a successful business as if they are events. But the truth is that most of the significant things in life aren’t stand-alone events, but rather the sum of all the moments when we chose to do things 1 percent better or 1 percent worse. Aggregating these marginal gains makes a difference.

There is enormous power in small steady wins. This is why the tortoise usually beats the rabbit, the system is greater than the goal.

Where are the 1 percent improvements in your life?

Neil Steggall

The Barking Mad Blog

SME Advice with Bite

http://wp.me/p401Wv-di

www.wardourcapital.com

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A woman Knows - WCP 2014

What Do Women Know About Business……?

Quite a lot actually!

My offensively sexist headline was used as a “hook” to encourage you to think about gender equality in business.

Gender Equality WCP 2014

In my years in business very little management discussion has focused on the simple fact that our population is more or less and equal split between males and females. When gender is discussed it is usually in terms of targeting a product at either men or women – as an example I am told that in my son’s local supermarket in up-state New York they now sell pink rifles for the “girls”!

Where is he going with this? I hear you ask; well stay with me.

Each week I set aside two days, usually Tuesday and Thursday to meet with clients, prospective clients and the affiliate businesses we maintain relationships with. This week was different.

All but one of my meetings was with a female CEO or Manager; it wasn’t planned it just happened that way.

Interestingly SME’s lead the way in gender balance as over 32% of SME CEO’s are female compared to only 8% in the corporate world.

Now back to my week. It turned out to be both challenging and exciting as I quickly recognised that the “pattern” of the meetings was subtly different, the questions put to me were far more direct and probing and some of the feedback regarding our corporate direction and product offerings was more frank than usual. This was consistent across my two days of meetings and the only difference was the gender mix of the meetings.

I didn’t initially think anything of the changed “pattern” I merely enjoyed the buzz and excitement that flows from strong and intelligent discussion and was pleased with progress made. Towards the end of my string of meetings I realised this “pattern” had to be more that a coincidental meeting of minds with a series of very challenging intellects.

These very smart CEO’s were different. They were WOMEN!

Research from Dr Patrice Zsabo of The University of Manchester published in 2012 states that males and females do think and act differently in both social and professional settings.

The research suggested females demonstrated higher levels of both Social IQ and social empathy than men, they are conciliators by nature, good team members and more detailed, honest and open in their discussion with colleagues.

I recognised that I was benefiting from the subtly different ideas and views which flowed back and forth during the discussions with these very smart, savvy and professional women and I believe they felt the same. I quickly realised that collectively we were stronger, a more complete team.

 I didn’t agree with all that was put forward but I had cause to stop, think and question my positions and ideas and that very questioning provided me with a wider understanding of the issues.

Logically if 50 percent of the population is female and 50 percent male I am at a loss to understand why current management doesn’t reflect this.

Why as managers do we not venture out to seek the views of the opposite sex? Surely for optimum balance and a better understanding both sexes should be involved in discussing and determining the corporate direction.

I just don’t buy the “if we are professionals our sex doesn’t matter” It does. Management should reflect the society we live in, the clients and customers we do business with indeed it should reflect humanity.

It’s up to us male and female to make this happen and it’s easier as an SME to lead the change than it is for a corporation.

So let’s make a difference and take the SME balance to 50/50 we are already closer than our corporate counterparts.

Neil Steggall

The Barking Mad Blog

SME Advice with Bite!

http://wp.me/p401Wv-cM

www.wardourcapital.com

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Great-Teams - Win - WCP 1014

Great Teams Win!

And Keep on Winning

We Aussies know all about teams.

We have the AFL the NRL, the Premier League, not to mention cricket, hockey, swimming, tennis, netball, bowls and of course the local drinking team.

Every one of us passionately follows a team or two so of course we know all about team work…..don’t we?

In management speak we come across the words team, teamwork, team building, team targets every day without giving a very much thought as to what a team really is and how it functions.

The most simplistic and common dictionary definition of a team is: “to come together to achieve a common goal”. Essentially the objective of teamwork is to achieve more than the sum total of the individual people involved.

Pretty simple hey? And yet recently I came across two comments which demonstrated to me that not everyone finds the team concept so simple.

The first comment was in the form of a question to a SME advice column in a major daily newspaper – “I recently started a small business with a partner and he doesn’t work as hard as me. How can I get him to lift his input?”

The second was a question asked during a seminar “As a team leader I find it very difficult getting everyone in a team to contribute equally; what do you recommend?”

In both instances my thought was that these guys just don’t understand team work!

Let’s return to the definition and to that “common goal”. The first thing a good team leader does is to define the “common goal” the individual tasks out and best match the team members to the task. A simple team check list can help such as:-

  • Very clearly and simply define the Common Goal

  • Determine the best strategies to achieve the Common Goal

  • Identify the individual tasks to achieve the Common Goal

  • Clearly communicate  the Common Goal and the individual tasks to the team

  • Discuss the strategies and tasks with the team and allow for questions and input

  • Analyse the individual team members, their skills and their responses to the Common Goal

  • Allocate the individual tasks to team members. Ensure each member understand what the whole team is doing

  • Lead but allow autonomy within tasks

  • Remember you may be the leader but your objective is for THE TEAM to be successful

  • Build RESPECT & TRUST with each member for the different skills and contributions they bring to the team

Sporting teams are very good examples of team work; as the batsmen toil in the sun chalking up a hundred runs do they resent the rest of the team sitting back in the pavilion? In a soccer game the goal keeper spends most of his time standing around whereas the forwards are running several kilometres, constantly tackling opposing players to gain control of the ball.

These sporting teams understand the essence of team work; it takes different members with different skills to tackle different tasks at differing times to deliver the very best result.

In my experience the more diverse the skills and personalities the more effective the team, be it a corporate management team, taskforce or board. I once served on a board with a co member of ferocious intellect, at times he and I arm-wrestled over finances and governance for an hour or so before reaching agreement. This was frustrating but never personal because the board had that magic ingredient RESPECT.

Without respect no team will function and without leadership no team will build and retain respect.

In summary there are as many differing “types of teams” as there are differing individuals and in theory no one type is better than another. The difference is in the quality of leadership, the clear communication of The Common Goal and the individual tasks task and most importantly the RESPECT & TRUST of the team members.

If you have respect and trust then yes   you are part of a team. If its lacking you are a part of a group of people……..quite a different beast!

Neil Steggall

The Barking Mad Blog

SME Advice with Bite!

Article shortlink:    http://wp.me/p401Wv-cI       

www.wardourcapital.com

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Casual Business Meeting

Meetings – Less pose, more work!

A good friend of mine is a leading global advisor to life insurance companies, he travels extensively and consults at board level. Recently I asked where his London office is now situated, “any Starbucks” was his answer. “Why have an office?” was his question, “the people I meet are too busy to travel and yet they appreciate 30 minutes relaxing over a coffee”.

For more formal presentations and planning sessions he uses his clients facilities, very occasionally he rents serviced office facilities by the hour.

“Put simply” he said “I have a simple rule; does this cost money or make money?” and in 2014 expensive offices certainly dont make money.

Likewise does dress at work really matter? If staff are clean and appropriately covered all that remains is motivation and productivity.

Today’s workplace freedoms would have been unimaginable 30 years ago and yet look at what we have gained by adopting the important factors of respect and comfort and letting the formal pose and its associated ego/status go.

Neil Steggall

The Barking Mad Blog

SME Advice with Bite!

http://wp.me/p401Wv-cr

www.wardourcapital.com

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Entrepreneurs

The Naked Entrepreneur!

“to thine own self be true……………”

Respect and Trust are both vitally important qualities which we look for in an entrepreneur, and I fear both are currently being discarded in the rush for blatant self promotion.

Do you remember when the UK’s Jamie Oliver first burst onto our TV screens as “The Naked Chef”? He was fully clothed but he had stripped away the unnecessary bullsh*t and mystery surrounding cooking. The world fell in love with Jamie a self-confessed dyslexic, a school drop-out from Essex – he was simply and wonderfully himself!

As I read on-line profiles I feel emasculated by the fact that every second person is now “an expert on….”; “an author of” or at the very least an “international public speaker”. Some of these are well known and how lucky we are to have such easy access to the skills and knowledge which they have gained over long and successful careers. Many others and dare I say the majority, are if not bogus, then plain humbug!

Strong words and yet transparency and authenticity are more than just corporate “buzz words” they are amongst the real attributes that B2B’s and consumers now expect from the companies and people they do business with.

People want honesty in business and expect SME’s and corporations to provide real transparency and authenticity. They also want to know and understand the real people behind the profiles, websites, logos, social media and print.

Be open when describing yourself or your business. If your business is in its first year and you are struggling to make ends meet say so! Potential customers will often give a new business “a go”. How often have you said “hey let’s try that new pizza place”? Don’t invent a “construct” designed to make you look older, bigger, better, busier.

Be yourself! Just started – Johns Plumbing, I want to help! It’s a compelling message.

Today “Corporate Image” is less about status, qualifications, large offices and expensive stationary and much more about the real people, real skills and real results. Over the past week I had three meetings in coffee shops with clients, each of which is highly successful and controls a multinational business. Only one of them has a permanent office, shared with his accountant. Today working from home with a telephone answered or a query dealt with by a virtual assistant can be sufficient. 

Most businesses and consumers today don’t want to hear how clever you are or how important you are or how impressive your office is; they want to know if you can do the job and deliver the result at a price they are prepared to pay.

So rather than building an impossibly impressive on-line profile, simply state the facts; you are warm, human, competent, trustworthy and able to deliver results! It’s about engaging, sharing your passions, and talking about your product or service as it relates to other people and situations.

Here are some ways to show your inner Naked Entrepreneur:

  • Be Genuine: Be you, yourself, the real you and be proud to show it. Strip away the unnecessary bullsh*t and mystery!

  • Share your passions: Show what, how and why you are excited, if you have a dream share it.

  • Share your corporate culture: It says a great deal about who you are and the values you and your team share.

  • Admit your imperfections & failures: We have all at some stage failed, stretched the truth, let people down or just plain stuffed up – I have done all and more. It’s human. How you recover, learn and move forward is the real factor by which you are judged.

  • Show your expertise: Include your skills, knowledge and if wanted, qualifications on your profiles but do so to inform not to impress.

  • Be subtle: Yes you are brilliant, yes your brand is huge and of course your staff and customers adore you but do you need to tell us quite so loudly or so frequently.

  • Understand Yourself: Know your strengths, weaknesses and your limitations. For example I am a dreadful waffler and not the world’s best operational manager but when sat down free of distractions I am a fair theorist, thinker and strategist!

A reputation for being “a good person, hard working and determined to deliver” is probably close to perfection and almost naked!

Do you ever wonder why those global gurus who travel the world to sell their message of how to grow rich and famous in 30 days don’t have to stay home and manage their investment portfolios which must by now be huge? I have always wondered.

I guess they care about us so much they are prepared to travel 48 weeks a year just to help.

By Neil Steggall

Failed Wastrel

The Barking Mad Blog

SME Advice with Bite!

http://wp.me/p401Wv-cm

www.wardourcapital.com

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SME's Going Under WCP2014

HELP! – I am out of cash & going down!

At which stage do you accept that without a cash injection your business is probably doomed? Looking at the ABS statistics they show that in any three year period around 42% of registered SME’s fail. So the answer is that we should look for and accept cash and or help a lot sooner!

It is very hard when investing the enormous time, energy and focus needed to start and build an SME, to then find the time (and to provide the mental distance needed), to properly analyse and re-assess your management and direction. Being naturally entrepreneurial, SME owners have a tendency to fight on, often to a very bitter end.

When I left the corporate world to start my first SME I got to the end of year one and realised I was emotionally drained, failing and down to my last eight weeks or so of cash. Everything I had was on the line and I had no answers.

Recognising that I was no longer thinking straight I bundled my worried wife and two noisy young children into the car and we headed off for a long (and very cheap) weekend by the beach. It was mid-winter and raining; you can imagine my despair.

Late in the afternoon of our second day I took a long walk along the beach, in the rain and asked myself three questions:-

  1. Is the business concept viable

  2. If its viable have you managed it well

  3. If you had sufficient resources available what would you do differently

My answers were 1) yes 2) fair 3) build a team to leverage revenues.

I returned to the shack motivated and excited for the first time in weeks and when back at work I went about raising the cash and partners needed. It was surprisingly easy and within a year we had a happy and booming business.

Lucky bastard! I hear you whisper. Not really. In a now long career in and around SME’s I have realised a few truths about human nature:-

  1. By and large people want to help you

  2. There are more investors looking to invest than there are good ideas

  3. If your business is a good idea and you are honest, fair and hardworking you will find funding

  4. Investors are usually older, experienced, have suffered and recovered from failure – they understand your position

  5. By understanding your position and taking positive action you earn respect from your stakeholders.

So when do you put up the red flag and shout for help?

Assuming your business concept is viable and you are offering a product or service your customers want then consider the following danger signs:-

  1. Your business is growing, you are profitable and yet you are always short of cash. This happens in growing companies as to service higher sales you need more stock, labour, materials etc and your debtors ledger expands as sales grow. This all eats cash.

  2. You have more potential customers than you can handle and you are falling behind on paperwork and starting to knock back new business. At this stage you need to employ and or outsource more resources but how do you do this when cash is so tight?

  3. You know you could win larger more lucrative contracts and strengthen your business if you had more people, plant and equipment.

  4. Your debtors are slow payers and it is impacting on your ability to meet your payments as and when they fall due.

  5. The bank offers you an overdraft but only if you provide the family home as security.

If you are experiencing any one of the above your business is at risk, if you are experiencing any two you are in trouble and should seek help quickly.

In our company we see so many businesses fail which are fundamentally sound and indeed held so much growth potential.

When we analyse them we invariable find a point beyond which they had insufficient cash to maintain the business. Corners start getting cut, staff numbers are reduced, marketing budgets cut, bills go unpaid, staff morale falls, the staff start leaving and eventually an administrator or other court appointed official is installed

Possibly as many as 90% of the failed businesses (assuming no underlying fraud etc.) we look at could have been saved had appropriate action been taken early enough.

So what should you do if you are at risk?

First of all have an open and frank discussion with your advisors including your accountant and lawyer. Walk them through your business plan and figures and explain your concerns and the amount of investment you think you need to achieve a turnaround. Not only will they offer advice but they may well know of potential investors.

Look on line for SME Turnaround Specialists – a good specialist company should have all of the in-house skills you need and access to numerous investors. You may be able to negotiate an hourly rate or a fee based upon their success or a combination of both. A preparedness to complete some or all of the work on a success fee tells you a lot about their level of confidence!

What will I have to give away to attract an investor? Less than you think. A savvy investor will want to see you remain motivated and happy so as to help build a return on investment. If you are both fair, reasonable and above all offer each other respect you should enjoy a profitable relationship which sees the business turnaround.

Once you have an investor on board start to build a team of business mentors. Many SME’s have an advisory board of a couple of specialists who meet as a regular board would and help you analyse and guide the business forward.

Neil Steggall

The Barking Mad Blog

SME Advice with Bite!

Article Shortlink:  http://wp.me/p401Wv-cb

www.wardourcapital.com

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Presenting WCP 2014 Stick Drawing

Speak Clearly and Communicate

How well do you convey your messages? Is it a question you examine or do you concentrate on the content of your speech?

We spend plenty of time thinking about what we say in business, but not necessarily how we say it.

When it comes to professional settings the way we speak including tone, pitch, and volume is every bit as important as content and dramatically affects how our message is received and how people perceive us.

It’s hard to recognize our own verbal errors so if regular presentations and occasional public speaking are starting to occur in your career it could be worth practicing speech in front of a specialist or a mentor to ensure you are hitting the right notes.

Pitching your voice and presentation at the right level is quite easy and becomes natural with experience and as you become less nervous. The important word here is NATURAL. The natural vocal sound is pleasing to hear, easy to follow and quietly authoritative.

Most of us can become good and interesting speakers with just a little skill and practice. Here are a few pointers on how to improve your presentations.

Speaking too quickly

Understandably when you are new to public speaking you are going to be nervous and rapid speech is a very common effect of nerves. Rapid speech not only makes the speaker hard to follow, it distracts the listener and undermines the strength and authority of your message.

Susan Finch, a New York based voice and speech coach who works with business professionals, says hasty speakers often end up “mumbling, rushing, and swallowing” their words. To address this, she instructs clients to take a breath before they begin speaking and again before each major point. That simple action creates a natural break in speech and helps the person to slow down.

Being Australian; or “up talk”

Australians are known for “lifting” the final vowels of a sentence, the best way of understanding this is to watch British comedy and see how they poke fun at us. This issue in speech is known as up talk; ending a statement on an upward pitch so that it sounds like a question even when it’s not.

According to Sydney speech coach Sandra Harris, this issue is more common in women. Speakers struggling with up talk should record themselves and then make an effort to keep their pitch from rising at the end of a sentence.

The Monotone

Nothing turns an audience off like a dull and boring presenter and the worst speaking mistake is to use a dull, monotone voice. We want to hear in the voice a relaxed enthusiasm and a pleasant assertiveness, keep your audience interested by projecting your excitement and passion for your subject.

That doesn’t mean going over the top with high and low pitches, but rather allowing for some degree of variation in the tone and colour of your phrasing. And the easiest way to achieve that effect is to breathe and relax, try to place a smile into your voice.

Duh, um, fillers

These, um, filler words are ubiquitous in everyday speech. “Like,” “um,” “er” and others are used routinely in casual conversations and often go unnoticed. But they really stand out when used in professional settings.

John West, head of the speech division at New York Speech Coaching, refers to words like these as “vocalized pauses.” People typically toss these sounds into speech because they fear that allowing for a pause will lose their listeners. On the contrary, West says it’s the speakers who use excessive “ums” and “uhs” that tend to lose their audience the fastest, and that a well-placed pause can pique listeners’ attention.

Whispering quietly

Speaking at the correct volume and with strong voice projection is important. Sandra Kazan, a New York based vocal coach, says the ability to project depends on each individuals voice. For example, high-pitched voices naturally project better and further than lower pitched ones.

“A nasal voice will carry, will probably not have very much problem projecting, but it is a very annoying voice to listen to for any amount of time,” she explains. As with pace, experts say the best fix for volume is to breathe well. Projection problems tend to occur when people tighten up, constricting their vocal chords and preventing a smooth flow of air.

Trailing off

In general speech we have a tendency to get quieter at the end of a sentence, to “trail off”. A commonly recognised speech pattern is to trail off toward the end of phrases, clauses, and sentences. This means important words can easily get lost or messages can appear incomplete. You need to keep your voice supported, level and your message carrying all the way to the end of the point you are making.

At the end of the day be it in a meeting or a conference people want to hear your comments, words, ideas and knowledge. Give just that, hone your presentation but most importantly be you. Breathe deeply and regularly, pace yourself and impart your message. You will not only become an interesting speaker but you will enjoy the process.

Neil Steggall

The Barking Mad Blog

SME Advice with Bite!

http://wp.me/p401Wv-bH

www.wardourcapital.com

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True Success - WCP 2014

SUCCESS!!! Can everyone succeed?

Have you ever gone along to one of those meetings where only as you arrive do you realise the objective is to recruit you into Multi-Level Marketing? ……I have.

At first analysis the system is fool proof. Follow the program, build your team, sell some product and you are going to be rich and successful!

It demonstrates the simplicity of applied logic and the leveraging of numbers; and yet…….less than 1 in 1,000 recruits are successful.

Basically the MLM system fails to deliver because it is a numbers game dependent upon you being the possessor of a hide thicker than an elephants. It requires exacting teamwork from a large number of disparate people each with a differing view of “their” business and differing needs and wants.

The logic fails the humanity test.

Click on any social media site or online magazine today and you are overwhelmed by articles and ads offering SUCCESS in 1,2,3 or 5 simple steps. Do these programs work?

I may well lose friends and totally fail to influence people here but I think most of this is poppycock and hype. Sheer unadulterated psychobabble perpetrated by the need to fill space and the never ending need of people to hear their own voice or see their name in print. And yes don’t rush off to check…..I have in the past written the 5 Key Steps to…..etc. I am now maturing!

All right…..send your email now signed “Disgruntled and Disgusted” of ……..(enter suburb).

Let’s step back a little and consider the early management advice of one of my key influencers and a true management guru, Peter Drucker. He really thought deeply about business and business success. One can gauge the very depth of his thinking by his brevity of words and his no nonsense common sense, I offer a few simple Drucker quotes below:-

  1. “The purpose of business is to create and keep a customer.”

  2.  “Business has only two functions — marketing and innovation.”

  3. “What’s measured improves”

  4. “Management is doing things right; leadership is doing the right things.”

  5. “Until we can manage time, we can manage nothing else.”

  6.  “Success comes to those who know themselves – their strengths, their values, and how they best perform.”

It was hard to choose these six almost primitively simple Drucker quotes as they were chosen from around 300 Drucker quotes collected on my computer. Each quote deserves contemplation and through contemplation will provide an essential element of management.

Each quote hints at and leads the mind to see the larger plan behind and excitingly that unfolding image will be as powerful, as functional and yet different to each one of us.

In my mind his thinking reduces management to its core componentry, there are no new Emperors Clothes on promise here.

So what is SUCCESS? Let’s look first at what it is not. It is not big cars, big spending, private jets, corporate jaunts and attractive sexy partners; they are life style choices.

SUCCESS is achieving your own goals or your own objectives. If you set out to complete task (a) today, when finished you have succeeded. In Drucker’s mind the 6 quotes above would when understood and implemented represent 6 huge successes which, as a whole would represent a far greater, lasting, collective success.

SUCCESS is not the destination it is the culmination of the hundreds, possibly thousands of small successes you achieve along the journey. As with any great structure designed and built intelligently and with care the end result is always stronger and more resilient than its constituent parts. This is SUCCESS.

Can everyone succeed? No. Business requires certain personality traits and a good deal of skill, vision, courage, determination, stress and complexity. This is more than some people want or can handle.

Certainly through start up almost every business is a very hot kitchen to be in! To not have the desire or the personality to run a business is not a failure it is a simple fact.

Where does this leave us? In my opinion with four critical attributes (yes I know!) you can probably succeed in business:-

  • A sound product or service

  • Confidence in yourself and your vision

  • A written business plan including objectives, marketing and basic financials which you measure the business against

  • Absolute guts, determination and a preparedness for hard work

Perhaps business success really comes down to that final dot point!

By: Neil Steggall

The Barking Mad Blog

Business Advice with Bite!

http://wp.me/p401Wv-bC

www.wardourcapital.com

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Integrity 2 WCP

Leading with Integrity

Leadership goes hand in hand with the power team of Trust and Respect. To build a reputation for Trust and Respect you need to demonstrate a high level of Integrity and unfortunately integrity can be a contradiction in today’s workplace.

Some years ago I had to dismiss a team member who was great at his job and he and his wife had become good family friends. The reason was simple; he had made a fatal error of judgement and in doing so had, to the wider team, lost his integrity.

The label of integrity is hard to earn and yet it can be lost in a single action. I am not even sure it is something we consciously look for in someone but we notice when it is missing.

It is only after we have considered our own actions, evaluating how they align with our personal values, intentions, and deeds, that we are most likely to make a contribution of integrity to the world.

We are each responsible for our own integrity and the best leaders create cultures that nourish the integrity of others.

At its root of the word integrity we find; to “integer” and “integrate”, it speaks of unity and wholeness. We still think of the word in this original sense when we talk about “structural integrity,” the quality that enables a building to stand and that, when lost, lets a building collapse under its own weight.

As US Rabbi Jonathon Omer-Man said, “Integrity is the ability to listen to the place inside oneself that doesn’t change, even though the life that carries it may change.”

Most of us evolve and develop throughout our journey as leaders. Our character and our integrity are remembered long after the glitter of the deals has faded.

Having integrity leads to the building of trust as we practice honest conversations with others. Integrity is a positive deposit in the bank of our connections.

Trust is an inherent part of integrity. People need to trust that leadership is serving everyone’s best interest and leadership needs to trust that team members are fulfilling their own responsibilities.

HOW DO WE IMPROVE LEADERSHIP INTEGRITY?

This possibly varies person to person but the following points, in my opinion, cover integrity within leadership.

  • Respect – practice integrity with others by treating them with respect — even when they do not live up to your personal expectations of them. Recognise that your own standards can be subject to question. We get and give the best of each other in a culture that supports respect.

  • Reliability – This is a more functional definition of integrity and a basic practise of a natural leader. It includes showing a little humility, keeping promises, meeting important deadlines and being there when people need you.

  • Sharing – It’s important for leaders to clearly articulate their values and expectation of integrity. Share these values as a culture-building objective as to how we collectively define integrity.

  • Responsibility – We need to acknowledge our responsibility for every one of our actions. It demonstrates that we are not using other people or external events as the cause of our problems. Wherever possible blame no one, accept the behaviour of others and the circumstances of an action as a given, and move forward.

  • Considered Actions – This is the leader’s obligation to take the right action. It means embodying our integral principles and accepting the consequences for our actions.

  • Thinking 360° – Think of the whole not just this one problem or decision, integrity can be viewed as a culture of wholeness, of being able to support all of the components for the long term good of all.

I have to admit that I have on numerous occasions made decisions or taken a course of action that would not withstand scrutiny of the points above. This is where self-awareness comes in and that question; “What is the correct course?” and remember life is a journey, good and bad……we can only do our best as we see it at the time!

Corporate responsibility and integrity make strange if not incompatible bed fellows and over the years have formed much discussion over the dinner table. In this article I am really only trying to examine questions of integrity in leadership.

Examining integrity at an intellectual level seems to raise more questions than answers. Mistakes will always made and occasionally poor judgement will be shown. Importantly we are now aware of some of the questions and it’s what we learn and how we adapt to our mistakes that we should now contemplate.

Neil Steggall

http://wp.me/p401Wv-bj

The Barking Mad Blog

Business Advice with Bite

www.wardourcapital.com

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e Business WCP 2014

HELP!! – SME’s: need “e-business!”

To be “in the right place at the right time” is always seen as paramount to winning the lottery. Unfortunately most of us only realise later that we had been in the place and time doing nothing in particular.

Training and assisting SME’s in understanding the wide range of computing, internet and social media options now open to them is huge. It’s a huge opportunity because a real yet solvable problem exists today and the statistics suggest those SME’s who don’t acquire and use the skills will not be around in 5 years.

In 1995 when the first Sensis e-Business Report was published 91 per cent of SME’s surveyed had heard of the internet, but few were connected or had any intention of connecting, with two-thirds of those not intending to connect saying that they could not see a business benefit for it!

Only five per cent were connected and just over a quarter of those surveyed did not have a computer. In fact the biggest technological talking point at the time was the fax machine.

The 2013 Sensis e-business report showed the enormity of the change in internet use. Not surprisingly, 98 per cent of SMEs now have a computer, with a fast-rising 69 per cent (up 10 per cent since 2012) having a notebook computer and 41 per cent owning tablets. Internet connectivity increased over the previous 12 months from 92 per cent to 96 per cent, and 26 per cent of those with a connection intending to get a faster connection within the next year.

Sensis also found that 68 per cent of small business owners have smartphones and, on average, they spend $6,200 annually on technology hardware and $4400 on software.

That’s some change in just less than two decades. However, the first thing SMEs need to realise is that while technology is enabling the change, it is actually the customers who are driving it.

While Sensis have been researching SMEs’ adoption and attitudes towards technology since 1995, they extended the research to include the general population in 2005.

The 2013 Sensis e-Business report showed that 91 per cent of Australians have a computer and 96 percent use the internet. And, when asked about their usage of the internet, the most popular activity was ‘looked for information on products and services’ (87 per cent of all Australians), followed by ‘looked for suppliers of products and services’ (82 per cent), with ‘paying for purchases or bills’ (78 per cent) and ‘ordering goods/services’ (74 per cent) also being prominent.

So the stats are telling us that people are using the internet to search for and purchase products. So if SMEs want to connect with potential customers they need to be easily found in the places people are looking.

Consequently, a digital presence will become essential for all successful SMEs. At present, 66 per cent of SMEs have a website and 72 per cent of those reported increased business effectiveness through the platform. We predict the number of SMEs with websites to increase as a result.

As with websites, it is inevitable that the use of social media will increase rapidly as SMEs better understand the benefits and imperatives of close customer interaction. The social media revolution makes the possibility of customer engagement almost an expectation: people increasingly want to comment on their experience – either through praise or pillory – and if the business does not have a social media outlet for that interaction then the customer may find another outlet where the business does not have the opportunity to directly engage.

Mobility is another reality that SMEs are slowly coming to terms with. With mobility, businesses are less connected to the physical location so business becomes an activity, rather than an address. SME’s are slow to adapt to technologies which could save or earn them more money.

As an example, in the days before Christmas we changed the flyscreens in our house. The contractor had been out some weeks earlier to take measurements and the price was agreed. After fitting the screens the contractor said that will be $x thank you, it was the agreed price and I reached for my debit card to pay. “Oh I only take cash” was his comment. It’s a long time since I carried that much cash and I realised that we have no cheque books at home.

I had assumed the contractor would have a mobile merchant terminal and that by the following day at the latest he would have my cash in his bank, all accounting completed except for the monthly bank reconciliation etc. Nah they cost too much he told me; oblivious to the savings and efficiency they offer.

Sensis 2013 research of SMEs found that the percentage taking orders online rose five percent to 56 per cent, and of those taking orders 59 per cent reported that they mainly sold to customers in the same city or town.

SME’s may now have the equipment and they have demonstrated that they will spend on technology, though few are yet fully mobile, they do not have the knowledge or skills to bring the “whole” together, to integrate and utilize the digital opportunities to build profits and cut costs.

Late in 2013 a client was looking to raise equity to take his “eConsultancy” national we looked at the model which was excellent, looked at the market and then discussed the equity needed with clients. Investors are usually Savvy and the equity was raised on day one which has to tell you something!

Neil Steggall

http://wp.me/p401Wv-bd

The Barking Mad Blog

SME Advice with Bite!

www.wardourcapital.com

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