SME Management

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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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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

Barking Mad with Neil Steggall

http://wp.me/p401Wv-hE

Business Advice with Bite

 

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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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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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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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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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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A Great Mind Map - WCP 2014

 

Mind Mapping: let it work for you.

MIND MAPPING

Some of us think better in pictures etc. Before thinking through a big idea, I usually visualise it as a diagram. I have always “solved problems” graphically. Sometimes entirely within my mind and then A1 sheets of paper, followed by whiteboards, and eventually computers. Now I use a combination of all three. I called it mind mapping long before the phrase became popular – it just seemed to fit..

Basically mind mapping is the task of transferring thought and ideas, group or individual into a written form. I find brainstorming sessions are so much more powerful if there is a mind mapper in the group and especially so if that person is good with pen, paper or the whiteboard.

Are you a mind mapper? Are you able to get those amazing business ideas you toy with when driving or in bed down onto paper? It’s a skill but not a hard one to acquire, it can be fun and importantly the results can really change your business.

WHAT IS MIND MAPPING?

A mind map is a powerful way to generate and visualise new ideas, analyse problems, brainstorm, plan, show or research, complex ideas. Isn’t this just good old fashioned “brainstorming” under a new name? I hear you ask. No, mind mapping is a more structured approach to analysing and solving problems.

We now operate in a world where graphic representations are used more frequently and our brains are responding well to graphic analysis. Here are a few handy tools you can use to incorporate mind mapping into your business process.

WHITEBOARDS

The most basic tool you can use for mind mapping is a whiteboard. If you have a whiteboard you can start mind mapping individually or as a team to solve problems or to formulate new ideas. Today life is so easy, when you have the whiteboard full of ideas, take a picture of the whiteboard with your phone and upload it to your computer and share it with the team. Sometimes I get the original whiteboard data on the 60 inch screen in the meeting room so the whole team can see it and we start again on the whiteboard testing out our earlier ideas. This is a great way to mind map as a team.

THE BIGGERPLATE MIND MAP

If you want to up the ante and introduce a little more structure and sophistication into your sessions there are now several free or inexpensive mind mapping programs available.

Biggerplate’s mind map should meet most of your needs. In this extensive mind map collection, you’ll find templates for almost every task and challenge, including business mind maps, training mind maps, and general mind maps which you can use in your everyday life. The Biggerplate templates include everything you need from SWOT analysis (strength, weaknesses, opportunities, and threats), time management matrix, project management, task management and even tracking objectives.

If you and your team are struggling to get the mind mapping started, the Biggerplate templates can lead you into and through the process. I enjoy looking through Biggerplate’s top 10 mind maps just to see which templates other professionals are finding useful.

MINDJET

Very easy to use and inexpensive to buy Mindjet is an easy to use program designed for a variety of tasks, including mind mapping and brainstorming, Mindjet has flexible features which can be used in a variety of tasks including mind mapping, strategy development, marketing, sales and information technology.

MAPS FOR THAT!

The title just about says it all. Maps for That is great if you’re looking to share the mind maps you have just created or if you want to browse mind maps submitted by other teams or team members. It comes with amazing features and includes user-submitted mind maps in a variety of categories; including business, analysis, management, education, entertainment, events, and productivity, just to name a few.

If you’ve created a mind map you think others may find useful, upload it to the Maps For That site so that other users of the service can share. Initially just sign up for a free account, you can download and upload mind maps, comment on other users’ mind maps, and rate the mind maps you find the most useful.

MOBILE APPS

If your business uses smartphones or tablets as a way to communicate or work on projects, check out the mobile apps available from Mindjet. These apps allow you to create, edit, and view mind maps while you’re on the go or away from your computer. Available for the iPhone, iPad, and Android devices, these mobile apps can be downloaded free of charge directly to your smartphone or tablet.

If you haven’t started using mind mapping in your business, you may be missing out. Mind mapping can be used to create new business ideas, solve complex problems, and brainstorm with other team members — whether you’re in the office or on the go.

As I said at the start we all think and work differently, I enjoy mind mapping, let me know what you think.

Neil Steggall

http://wp.me/p401Wv-b8

The Barking Mad Blog

Business Advice with Bite!

www.wardourcapital.com

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Communication 2

The Power of Great Communication

And……..How-to-become-a-great-communicator.

Often after first drafting a speech or an article I look through and ask myself the question “what would my wife cut out of this?” Invariably its 60% or so of what I have written. My wife, I should add, is a successful author, journalist and historian and she can paint amazing mind images with such economy of words.

What I realise is that with discipline I can and do communicate well but I am not a natural. As I commence a story around the family dinner table the “children”, largely grown and successful now, groan and shout “make it quick or we are leaving” or “oh not that one again.”

Whilst not comparing myself (lol) with great communicators such as Winston Churchill, Franklin Roosevelt, John F Kennedy, Ronald Reagan, Nelson Mandela and Paul Keating I do occasionally wonder how Sunday lunch went down at their house.

Peggy Noonan was presidential speechwriter for most of Ronald Reagan’s presidency and she explains why Reagan’s presidency had such an impact on the world stage.

“He was often moving, but he was moving not because of the way he said things, he was moving because of what he said. He didn’t say things in a big way; he said big things … Writers, reporters and historians were in a quandary in the Reagan years. ‘The People,’ as they put it, were obviously impressed by much of what Reagan said; this could not be completely dismissed.”

Reagan was known as “The Great Communicator”, yet it’s a nickname he didn’taltogether agree with.  In his farewell address to the nation and to the world, in his own humble way, he redirected the praise by saying:

“In all of that time I won a nickname, ‘The Great Communicator.’ But I never thought it was my style or the words I used that made a difference: It was the content. I wasn’t a great communicator, but I communicated great things, and they didn’t spring full bloom from my brow, they came from the heart of a great nation — from our experience, our wisdom, and our belief in principles that have guided us for two centuries.”

My take on this is that it doesn’t matter whether you are a president or a manager – your success will depend heavily on your communication skill.

What are the key actions of great communicators?

Engagement

Communication is just that, it’s a two way flow of information. Great communicators know how to give and take and understand its importance. They not only initiate conversation, they steer the direction of and encourage others to join in the conversation.

Connection

Great communicators know that people won’t listen unless they connect both intellectually and emotionally. Know your audience and start by conveying emotional stories that connect to their heart. It’s all about the quality of the relationships the leader has with the people they communicate with.

I know several tough and very senior Australian business leaders who have met Bill Clinton on separate occasions both in Australia and in the US, each was impressed. In my post meeting discussions with them each said that when Bill Clinton talks with you, he makes you feel like you are the only person in the world. Wow. Show your listeners your empathy let them feel it and know you value their importance.

Humour

Great communicators are skilled in relaxing those with whom they communicate. An audience is often suspicious or defensive from over-communication and perhaps afraid of being “sold something”.  Great communicators show genuine interest in the other person and use humour and authenticity to come across as understandable and authentic..

Clarification

If you overwhelm your listeners, you will lose them, they will tune you out from boredom or confusion. Reagan was best known for being simple and clear. Never assume just because you understand what you’re saying that your audience does as well. Great communicators find ways to simplify though issues without being condescending.

Reinforcement

Great communicators know that an audience will retain only ten percent of what they hear, and therefore they are skilled at subtly reinforcing key ideas. They re-run their message throughout their presentations, speeches and writings. It is all about context and repetition.

Well I reckon that given the chance “my editor” would have pulled 15% of this and yet I think we are communicating OK!

Neil Steggall

http://wp.me/p401Wv-b0

The Barking Mad Blog

SME Advice with Bite!

www.wardourcapital.com

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Startups Wardour

5 Tips for a SUCCESSFUL Start-up

Starting a new business is an exciting and challenging task, one in which success brings a variety of rewards and yet failure can be a painful and damaging experience. Despite this there are 2.0 million SME’s in Australia and new start-ups opening every day.

This is the entrepreneurial drive at work, the human need to try new things and to stretch and grow. The SME is the economic life force and breeding ground of business. Of the many small start-ups some will go on to become multinational corporations, this isn’t everyone’s choice, or objective and statistically most start-ups will fail within the first three years of operation

Understandably starting a new business is full of challenges and I am often asked how I went about starting my first business and what tips I can offer. Starting a business for most entrepreneurs means a huge amount of sacrifice, hard work, risk and belief in your concept.

My first business came about via a combination of accident, hope and “nearness” to opportunity but if I was to start again I would take these points into consideration:-

1.       Think carefully about the business you choose:

Last week at a conference I was asked the question “what business would you choose if you were starting again?” A very good question and yet one I felt confident in answering. I would choose:-

  1. A high volume established industry with proven customer demand
  2. An industry with a relatively low cost of entry
  3. A location very close to an established business in the same industry
  4. I would price my product at the market price or slightly higher
  5. And this is the WINNER I would out-service and outperform the competition in terms of customer satisfaction.

2.       Market your business well – Marketing is your cash engine

If you have taken my advice and set up your business virtually next door to an existing similar business you already have potential customers passing your door so how do you convert them. You need a plan of attack:-

I.             Check out your competition and look at weak points in their product offering, customer service, display, staff training, customer handling etc. Then do the reverse and observe their strengths.

II.            Build your strategy around out servicing your competition; choose customer service and customer satisfaction as your point of difference. A company we have worked with “Chilligin” is a successful on-line and pop-up retailer of fashion accessories, scarves, handbags etc. Chilligin’s founder and director Nikki Gilhome decided from day one to offer Chilligin customers great products, at affordable prices and to package every item whether ordered on line or in store beautifully. “I wanted the customer to have a lovely surprise when they open their home delivery, or for in store customers something to look forward to when they return home” says Nikki. Small details such as carefully designing wrapping paper, stickers and ribbons, tags etc turn the ordinary into an occasion.  Effectively the customer gets a double hit of pleasure first the purchase decision and later a beautiful package to unwrap.

III.           Train your sales staff to meet and greet customers with genuine warmth, use quiet times to rehearse the perfect approach.

IV.          Wherever possible over deliver on customer expectations, the more a customer enjoys doing business with you the more they will return

3.       Employ the best staff: 

When starting a business we need to be careful of costs but a really good staff member is a key asset and a valuable part of your strategy. Don’t cut costs here.

Chose staff who share your vision, who want to grow, who will absorb your training and guidance. Respect and reward them. Encouragement and respect are amazing rewards, how do your competitors reward staff? There are many ways to reward beyond the pure financial and most people I know would rather work for a little less in a great environment than for more in an uncomfortable environment.

4.       Review Progress and Question – Can we do better?

If your business strategy is to outperform your competition by offering better service and customer satisfaction you must work hard at it to keep at the top of your game. Constantly check your competition, both locally and via the internet, overseas. Read everything you can find for new ideas, engage with your customers, listen and learn. Constantly review every single aspect of your business questioning how you can improve the customer proposal, to satisfy and engage more closely.

Your stock and services must always be current and adjusted as closely as possible to your customer needs. Use stock analysis tools so that you know which items are moving and which are slow. Respond very quickly to avoid wastage, move quickly to special out and move any slow stock. Slow stock is dead money and loosing you sales. Buy more of the fast moving items and consider expanding that part of your range with more options.

Change your web presence or store displays daily to build and maintain customer interest. Collect email addresses via direct questions as you input receipt data, small competitions, draws etc. Communicate directly with your customers, be innovative, informative and “the place to go”.

5.       Think carefully about finance & assistance:

Most businesses will involve you assuming responsibility for some level of debt, make sure you understand the obligations here and your responsibilities. Debt isn’t just a loan, it includes your supplier credit, your rental or lease obligations etc.

It’s important to know which type of financing is right for your business and always try to hold three to six months cash in reserve. Are you willing to give away equity in exchange for cash? Are you looking just for an investor or also for a mentor? Is your business plan solid enough to secure a bank loan?

All important questions to consider and remember with an investor you often gain an experienced mentor as well. If I was starting out again today I would look for an experienced investor who could guide and mentor me over any other form of external funding.

 

 

We are fortunate to live in an age when so much information, knowledge and experience is available for those who want to search for it. Eric Schmidt, executive chairman of Google, said: “There’s a new way to do marketing, and it’s to do it with numbers. People do marketing to bring in revenue, to have an impact, and with these new systems you can measure this. The technology the internet brings means you should be able to measure almost everything.”

If you are thinking of a start-up read and absorb, plan and then follow through and your chances of success are high.

Neil Steggall

The Barking Mad Blog

SME Advice with Bite!

http://wp.me/p401Wv-au

 

Business-development

5 Tips for Business SUCCESS!

 

1.       Business Development Is Not Increasing Sales

Managing the development of your business has a lot in common with conducting an orchestra. It’s a case of encouraging and leading the various differing components of your business forward, in harmony, to the same point at the same time to produce an extraordinary effect. You need to develop your unique product or service to meet the highest level of customer expectations and you must do so at a price representing fair value and at a cost which generates a fair profit.

2.       Understanding profit does not equal cash

Profitable businesses fail every day. Many small business owners chase growth and revenues forgetting the basic facts of cash management. Profit equals Revenue – Costs but until you have received payment you are in a cash negative position. Ideally you would ensure that you have sufficient cash reserves to meet three to six months of costs. In the early days of a business keep fixed expenses as low as possible, use a virtual office and work from home if possible, keep full time staff to a minimum, pay cash or do without non-essential plant and equipment. This helps if you have a quiet month or even two.

3.       Intuition Versus Fact

Don’t build a business around a product or service you like or you would buy. Undertake sound quantitative research to determine what your prospective customers want and buy then see if you can develop an even better product or service at a price they are prepared to pay. Don’t be tempted to compete on price alone. If company A has been making its product for many years and you realise you could source and sell that product at a good profit for less that’s a good value proposition to you not your customer. The market is less willing to change supply on price alone but if you can offer a better value/service proposition where they get a better product and improved customer service you will have a much greater chance of success.

4.       Business & Financial Planning

There is an old saying “if you don’t know what you want you will probably never get it” and that’s certainly the case in business. A well thought through and documented business plan outlining your core objectives, market analysis, product development, marketing strategies and detailed financial budgets is essential. This is an area where you should consider the use of a mentor or an external consultant to help you get it right. Your financial plan should include linked budgets for P&L, Cash Flow and Balance Sheets. A beautifully bound business plan kept on a shelf is a waste of space it has to be a living breathing document understood and read regularly, reported against monthly and the strategies varied as needed to meet your actual versus budgeted position.

5.       Respect all Stakeholders

 A successful entrepreneur understands that the stakeholders in a business are not just the shareholders. The stakeholders include employees, suppliers, customers, shareholders and advisors and they are vital to the success of failure of your business. Spend time with each stakeholder, respect them, listen to their ideas, take their ideas, discuss your plans and your position with them. Take them on your journey as partners. Keep them honestly and openly informed and they will join your team and give you their full support. Again many businesses fail because they don’t earn the respect and support of their stakeholders. Building a successful company is hardit requires a lot of commitment and courage as well as a little luck and of course having a great product and team. Watching your idea become a product and a product generate revenue that becomes a successful company makes it all worthwhile. Working with your stakeholders and mentors, following and constantly updating your plans and finances will go a long way to ensuring success.

Neil Steggall

The Barking Mad Blog

SME Advice with Bite!

http://wp.me/p401Wv-ao

images[3] (2)

 Communication Drives SUCCESS!

Communication is the #1 single skill needed at every level of business from a one man SME to multi-national corporations. To gain the most out of our lives we need great communication skills and yet I find a great deal of confusion as to what constitutes good communication.

I have written in the past about the importance of SMILES; perhaps the earliest and most basic form of human communication. Communication can be simple good manners. On a recent weekend enjoying the spring sun over an outdoor breakfast my wife and I smiled and nodded at the couple on an adjacent table to us. A simple communication opener which was just as simply reciprocated. The real communication occurred later when my wife asked questions of our new table neighbours …”and what do you do?”

Suddenly not only did their fascinating lives come alive but so did an exciting potential joint project between them and my wife.

Now remember we were just relaxing, careful not to intrude, enjoying Sunday breakfast but we understand communication is human and we are open to communicating. People sense this.

Communication is not what we say; it is who we are and what we do, that creates the impression, or as was said in the Australian movie, The Castle…..”It’s the Vibe”.

A US expert and communication authority Dr John Lund uses an interesting quote; “Don`t communicate to be understood; rather, communicate so as not to be misunderstood.” What a great way to put things in perspective regarding our efforts on how to improve our communication.

Dr Lund has explored the way in which we interpret communication from others.  He also reveals some very interesting statistics on communication.

When someone is speaking with us, we interpret their message based predominantly on the following three factors:

•55% is based on their facial expressions and their body language.

•37% is based on the tone of their voice.

•8% is based on the words they say.

Dr Lund states that his findings are the average taken across both males and females collectively, but that if you looked at women alone they would even give greater weight to the facial expression and body language and even less on the words.

This tells us that it is critical that we become very self-aware of how our body language is speaking to others as well as the tone we use.

Read my article on smiles! That smile comes through in your tone of voice over the phone. It works wonders on how well you come off on a phone call, trust me!

Smile: Shortlink:  http://wp.me/p401Wv-4x

Early in my career I worked for a hugely intelligent man who used to very gently ask me questions after a meeting. He would listen patiently to my answers and say “Neil listen to what they mean and what they need, not what they say”. At first this confounded me until I slowly realised that it may on occasion be difficult, embarrassing or even offending to state what you mean or need.

Once I learned to look beneath the surface, communication and business became easier, more productive and far more enjoyable.

The next major change in my thinking was when I realised that 10 different people see the same thing in 10 slightly different ways. And importantly women see things as differently again from a man which is why mixed sex teams work so well in obtaining balance.

To get your thinking moving look at the graphic below and tell me how many squares you can see?

af07704a-5559-11e3-ba35-12313b0d285f-large[1]

I will leave the answer for the end of the article but in warning I will let you know that in a recent study 96% of Telstra management got this wrong!

Getting back on theme, in the study men occasionally and women mostly want to know three things before they are willing to enter into a business conversation with you:

1.  Is what you want to talk about going to be painful?

2.  How long is it going to take?

3.  When you are done talking, what do you want from me?

If they don’t know these three things up front, they will make excuses to avoid your call or to avoid talking to you on the phone.  The same applies if you come into contact with them in person.

It’s fair to assume that your manager or client in a work setting will always want to know those three things in advance of agreeing to a conversation as well.

It comes down to an ingrained human need to want a strategic exit from difficulty.

These are acquired skills which roll easily off the tongue of experience; however this terrified me early in my career. If in doubt as to what to say or do remember that a show of genuine respect will always help in establishing a rapport, if you are terrified say so, the person you are communicating with will respond positively.

How to successfully conduct a conversation in business:

Success in business is greatly impacted for better or worse by the way in which we communicate. Happiness in our personal lives is also greatly dependent on this very same skill. If you don’t believe me just look at any married couple and work it out!  Becoming a good communicator takes practice and consistent attention and effort on our part, and it is a skill that we cannot afford to overlook.

Remember “don`t communicate to be understood; rather, communicate so as not to be misunderstood.” And always, always allow room for respect.

Now as to the “squares” there are 9 individual small squares; 5 2×2 squares; 1 4×4 square and one 3×3 square. A total of 16.

I hope you worked it out. Whatever your answer think on what it means about how we see and communicate ideas.

By; Neil Steggall

The Barking Mad Blog

SME Advice with Bite!

http://wp.me/p401Wv-ag

www.wardourcapital.com

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Education

6 Key Causes of Procrastination.

Procrastinate, Procrastinate, Procrastinate! Spoken aloud and with the correct intonation this little mantra sounds remarkably similar to the Daleks famous Exterminate, Exterminate and believe me Procrastination can lead to SME Extermination!

Procrastination is a problem for the sufferer, it’s a problem for the SME and it’s a deal breaker for cohesive team work and yet it is a common problem in businesses of all sizes.

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

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

We all procrastinate from time to time. Sometimes it’s those mundane things – like reconfiguring our computer files, reconciling bank accounts, or fixing up a dated web site. But often we procrastinate on bigger things that require more time, more commitment, and put us at more risk of failing, looking foolish or feeling emotionally bruised.  Things like updating 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 found 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 you to work with them and hopefully overcome the problem.

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 themself or the ones they’ve been given by others), they may find themself 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 do you 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 quarterly 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 3 things that I absolutely must do that day. This keeps me on the straight and narrow when my mind starts to wander.

Procrastination costs SME’s a good 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

SME Advice with Bite!

http://wp.me/p401Wv-a8

www.wardourcapital.com

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Marketing Redefined WCP 2013

Marketing Redefined

Think, Change, Grow, Prosper!

 

In the dark distant past when coffee came without froth and computers were kept in sealed rooms and operated by bespectacled men (sorry ladies its true) in white coats, I spent a few years climbing the corporate ladder which included a stop off in the Marketing Department of a major multi-national.

We saw marketing in aggressively military terms of war, battles, and campaigns, all fine-tuned through tactics, strategy and whiskey.

Statistics and information was gathered from the market and analysed, products were designed, costed, tested, refined, manufactured, advertised and sold, hopefully, at a profit.

Much thought and combative discussion was applied at each stage, key objectives were established, strategic marketing plans, short term tactics, placement attacks and budgets were drawn up and approved before being committed to endless reams of paper. Weekly meetings were held to gauge progress and we wrote up even more notes in pencil before dictating them to our “girl”, sorry PA, to be typed up.

Much time and efficiency was lost in the process and very few really great ideas came out of it.

When I attend marketing meetings today the mood is less combative and the whiskey has unfortunately disappeared  yet I fear just as much time and efficiency is being lost in the discussion of SEO’s, word place rankings, the placement of hash tags and how well the product will look on mobile devices. I leave the room bored and just a little concerned that no one is actually marketing the product.

Perhaps it’s time to redefine MARKETING.

“Marketing is too important to be left to the marketing department.”

– David Packard, co-founder, Hewlett-Packard

When you own the show you can make such bold statements! However, if we ask any ten business leaders today to define marketing we will probably get ten different answers. Marketing its function and its purpose appear to have entered a management grey zone.

I was fortunate some years ago to meet the father of modern management, Peter Drucker, on a number of occasions and his view was: “Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing is the distinguishing, unique function of the business.”

So, what is marketing and are we moving closer to a definition? The Silicon Valley venture capitalist and former Intel executive Bill Davidow said, harking back to warfare, “Marketing must invent complete products and drive them to commanding positions in defensible market segments.” The man should know. He wrote the seminal book on high-tech marketing.

Interestingly Davidow didn’t learn marketing at university as he studied electrical engineering. Steve Jobs, another brilliant marketer, dropped out of school. These guys and others like them demonstrate that great marketing skills can be developed.

So how do great marketers learn about marketing? I am convinced that great marketing skills are best learnt on the job. Doing the hard yards.

SME’s and Startup companies are great places to learn and develop marketing skills because they’re all about developing innovative products and getting customer traction – and not much else. Further they’re always strapped for cash and needing people to wear multiple hats.

Interestingly as an engineer by training I also learnt marketing on the job.

Its been a long and complex journey but here are THE SIX KEY LESSONS  I learnt along the way:

Marketing is Hard.

It has been said that “Marketing is like sex: Everyone thinks they’re good at it”. Well I’m not getting into that one but on observation there are more posers in marketing than most other fields, probably because the demand is so strong and the supply of real talent is so weak, and it’s easy to fake. When discussing a Telco acquisition with an American banker some years ago he started to tell me how the marketing model needed to change. When challenged he answered “Bankers like to think that they are marketing geniuses. We really do.” He said, this is because “we can fake it far more convincingly than in other areas …” It’s worrying but it’s out there, be warned.

Understand People.

It’s about determining what customers want, often before they know it themselves – look at Sushi-Sushi and how they got everyone eating raw fish. If you’ve got a knack for that sort of thing, trust it. Be your own focus group of one. And while it’s tempting to think of markets as amorphous virtual entities, remember that, even in the B2B world, every product is purchased by a human being in the real world.

Marketers don’t reinvent the wheel.

Some people are great inventors. They come up with wild concepts that nobody’s ever thought of. But great marketers tend to be innovators who turn inventions into things people can use. Marketing thrives on reusing ideas in new ways. Most modern Japanese industry was based on this premise. Steve Jobs didn’t invent he moulded inventions into products people wanted to use.

Marketing is too important to leave to the marketing department.

It really is! Marketing is the hub of the business wheel. It’s where product development, manufacturing, finance, communications, and sales all meet. Marketing’s stakeholders are every critical function in the company. Every member of the leadership team is an adjunct of the marketing department. SME or Giant Corporation it’s all the same.

Marketing Really Counts.

Contrary to today’s popular feel-good wisdom, in business, winning is everything. Every transaction has one buyer and one seller. If you do it right, buyer and seller both win. All the other would-be sellers lose. The real world is brutally competitive. Be different to win.

Great Marketing Ideas are Rare.

By executing the right communication strategy, great marketers can create a groundswell of customer excitement and viral demand for a company or product that nobody’s ever heard of. And it can be done on a shoestring budget. Steve Jobs was a master at maintaining secrecy and controlling exactly how and when anybody learned anything about Apple’s products. MacDonald’s are turning bad press about fast food into selling points through its new menus and PR.

The truth is that great marketers are few and far between. Which begs the question, who exactly are you trusting the most important aspect of your business to? Something for you to think about as you take your SME global.

Finally my definition of marketing is to “take something useful and turn it into something desirable”

 Neil Steggall

The Barking Mad Blog

SME Advice with Bite!

http://www.neilsteggall.org

Shortlink: http://wp.me/p401Wv-9O

 

imagesCAP6MTH4

High Profits & About to Crash?

A relevant question for SME Management.

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

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 business management not just SME’s 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 KING. 

Neil Steggall

The Barking Mad Blog

SME Advice with bite!

http://wp.me/p401Wv-9D

The Three Profits of SME's WCP 2013

The Three Profits of SME’s

 

Most SME operators tend to think that good management, innovation, hard work and productivity will result in a profitable business, well they should but that’s not the whole story.

Not all profits are created equal and indeed some are much more valuable and more quickly and easily attained than others. Ah there must be a catch I hear you say; there is no catch but understanding the Three Profits of SME will make a significant difference to the way in which you view and manage your business.

The First Profit

The First Profit of SME is the easiest profit you will ever make and could account for a substantial amount of the total profit your business generates over its lifetime. The First Profit flows directly from your cost of entry.

Once you decide on starting or buying a business be it a hardware shop, bakery, call centre, IT service or a property development, do your research. Look around for a similar business in distress or even facing or in administration or receivership. There are many reasons businesses fail but most often its insufficient cash or poor management, if you are a good manager and you have cash get out there and buy well.

Most businesses fail within the first two to three years. I have bought near new businesses out of distress for less that 10% of the cost of establishing that business. Plant and equipment as new, some customers in place and ready to go. If you can run that business and cash flow it you make a 900% profit in your first 2 years because well run the business should be worth at least its true set up costs.

The Second Profit

This is the only profit some people think of; the operating profit that flows from good management, business planning, innovation, hard work, productivity and sales effort. The Second Profit most importantly sustains your cash flow, pays the bills, allows you to further develop the business and should leave you with a healthy profit after drawing your wages.

The real key to the just how large The Second Profit is relates to the lessons of the First and Third Profits. Put simply the keys to strong operating profits are how well you control the cost of the goods and services you offer and how well you price them.

Do the maths. You are much better off and your business is stronger selling a lower number of products or services at a higher margin than going for volume at a discount.

Look for ways to offer a significantly better service to your customers than your competitors are and lift your prices. Treat cost controls and buying as seriously as sales, manage your stocks to achieve maximum stock turn at minimum inventory. Establish and monitor your KPI’s. Motivate and reward your staff. Build a happy and united team.

The Third Profit

This Third Profit if planned carefully and executed well will bring you a profit as relatively easy and large as your First Profit. We are talking here of your exit strategy, the day you sell your business. Whilst this seems a long way off when you start your business you should be planning and working towards the exit every day.

The Third Profit will directly reflect the desirability of your business to a potential buyer. That buyer will need to be very comfortable with your business if you are looking for a premium priced exit.

From day one work to a detailed financial budget and business plan, report against it monthly; draw up detailed monthly accounts, (it’s so easy today), hold monthly board meetings with an agenda and minutes, even if the directors are you and your wife. File all tax returns and corporate documents on time and constantly update your corporate register. Imagine how comforting 3, 5 or 10 years of such well-maintained records are to a potential buyer.

Lock as many customers as you can onto long term supply or service contracts and do the same with your key suppliers. Look after, reward and motivate your staff so that your retention rate will be high. Another three prospective purchaser concerns answered.

Typically a purchaser will offer a multiple of earnings (EBIT) plus stock at valuation as a pricing mechanism. If the accounts, customers and staff look ad hoc the multiple offered is going to be between 1 and 2 times earnings and stock over one year old will be discounted to $0.10 in the $1.00 and over six months old $0.50 in the dollar.

With solid accounting, tax and corporate records, good budgeting, a regular stock turn, sound supplier and customer relationships, and loyal staff a potential purchaser is going to look much more favourably on your business and a multiple of 4 to 6 times EBIT plus SAV at full cost is a likely outcome.

Another strategy is to approach your major competitor; a consolidation of the two businesses could bring about significant efficiencies and cost benefits thereby lifting to value of your business to a multiple of 6 to 8 times EBIT.

I hope you take on board The Three Profits and prosper from them. Good Luck!

Neil Steggall.

The Barking Mad Blog

SME Advice with bite!

1 November 2013

http://wp.me/p401Wv-8E

 

www.wardourcapital.com

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Teamwork

A STRONG TEAM

IS

VITAL TO SUCCESS

Early in my career it was noted that “I didn’t suffer fools gladly”. At the time I took it as a compliment as I couldn’t understand why some of the people in the organisation just couldn’t grasp the problem, yet alone see the solution and fix it. Clearly they were fools!

As I travelled around the organisation from city to city reviewing performance I was unbeknown to me leaving a trail of emotional disaster and disharmony. One day the CEO sat down in my office and declared that if he could lock me in that room, push problems under the door and wait for me to push the solutions back out some time later, we could change the world. Yes this was the pre computer age and I had to change.

Whilst I had grasped problem solving I had little idea of or interest in the team. I was just so absorbed with problems and their solutions.

I am now much better, though still not good, at team work but I have recognised that a good team is both high performing and exciting to work in. Results flow from great teams.

Cerebral loneliness is a very real problem, I need the companionship of strong thinkers to challenge and spark my own mind. Brilliant ideas are rarely born in isolation, and successful projects stem from a strong, collective team. Without the spark of companionable challenge I find I can become almost self-destructive in my thinking.

In other words, to do great work, you must surround yourself with great people.

It’s an interesting exercise to define what this means for the type of thinkers you want on your team. I find that my best work comes from interaction with people who think differently than I do – and differently from each other. A diversity of mental profiles yields the richest results. Here are six personality types I would have on my dream team.

1. The dreamer: This person never ceases imagining what’s not, what’s next and what’s possible. They think big and hopefully, stretching the bounds of what is considered achievable. They never stop asking, “what if?’ and supply your team with an electric and optimistic creative energy.

2. The debater: Debaters question your assumptions, call out your leap of faith logic and point out the flaws in the plan. They see problems long before others, and they keep everyone grounded and prepared. Their questioning nature forces you to strengthen the rigor of your arguments.

3. The disruptor: The disruptor challenges the status quo and breaks others out of their mental ruts and insular perspective by bringing fresh and far-ranging perspective. My favourite disruptors are intellectually curious, lateral thinkers who are first to spot latent competitors and untapped opportunities in the market.

4. The driver: Drivers are natural leaders, bringing a crusading, concentrated vision to all work and supplying forward momentum when everyone else is losing steam or motivation. They are positively relentless in pursuing an idea, galvanizing political support for it and keeping it on track. They can be fantastic advocates for the customer, and at times hard drivers keeping the team focused on the problem you’re here to solve.

5. The detailer: This type digs into every facet of a project. Detailers focus on practicalities and save everyone else from silly mistakes and fatal design flaws because they think through all the angles and implications. They identify what’s missing in even the best-laid plans and can diagnose the precise point when something could break or be improved.

6. The doer: The doer is the wonderfully resourceful team member who gets stuff done, no matter what. Doers roll up their sleeves and find the practical solutions to delivering products services and “what-nots” on time and on budget. They are great colleagues to those who devise the grand strategy because they get it delivered on time, all the time.

Do you recognise your team members here or see gaps in your own team? Do you think of attributes that I may have missed. Let me know or post your comments below.

Neil Steggall

The Barking Mad Blog

SME Advice with bite!

http://wp.me/p401Wv-7N

www.wardourcapital.com

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October 22, 2013

entrepreneurs

Creating an Entrepreneur!

Is it possible….you better believe it!

 

Entrepreneurs are often the rocket fuel which drives new ideas, creates new businesses and indeed new industries. In common with such inflammable fuels entrepreneurs can often end with a bang but overall they have driven commerce and commercial ideas for millennia.

Most entrepreneurs tend to be highly individual, difficult and unpredictable and lacking in reputation when it comes to team work and the subtleties of the office culture. This is changing as most business schools and universities are turning out graduates with qualifications in entrepreneurship.

Having tame yet empowered entrepreneurs within a company is the dream for most business owners. These are employees who will undertake something new, without being asked to do so. They are innovative and creative – they are people who can transform an idea into a profitable venture for your business. They strike the perfect balance – act like entrepreneurs, but they work for you.

But as any business manager will know, such individual entrepreneurs are a rarity, however, this needn’t be the case. Every employee can become more creative and entrepreneurial if their company adopts a different approach to their development and cultivates a culture where innovation and creative thinking is encouraged and supported.

One of the main problems facing many Australian businesses is that they have lost sight of the importance of fostering creative thinking and innovation. In doing so, they are placing their business at risk and giving the competition a serious advantage.

We can’t lose sight of the fact that the economic crisis has turned many offices into high pressured working environments, where employee engagement and confidence has been eroded. In such businesses energy, creativity and innovative thinking has been lost.

However, what has also emerged is a (it’s not us) blame culture where business people are blaming their current poor business performance solely on the recession and external factors. But this is a bit like complaining that you are wet because it’s raining. How about wearing a raincoat? Businesses have a duty to prepare for the future upturn and ramp up their competitiveness.

The actual ‘raincoat’ for business is not to cut costs and act in defence; it is to build resources and attack. Sun Tzu in the sixth century said that you may survive though defence but you can only win by attacking. One of the oddest paradoxes of the business world is how many business owners never even see themselves in a competitive situation. Absurd! Competition in so many forms is ever present and can never be ignored.

So what can businesses do to be more competitive? It is in times of adversity that some of the greatest innovations have appeared and in today’s straightened times there is a healthy pressure to differentiate, become more competitive and establish more intrinsic value in the organisation. Does this come about by exhortations by the CEO or by establishing a culture of freedom to think and innovate? It may be the former but it must be the latter.

It is down to business managers and the HR department to establish a culture where intellectual power within the company is harnessed to the betterment of innovation and in so doing equals motivation, productivity and profits. An energised workforce is an effective and content one.

Most people in an organisation have enough insight of what is going on to be able to contribute to innovation. However, we are not talking just about suggestion boxes. I am referring to special projects and cross functional work groups to establish innovation in products, service and operations.

Managers need to make it clear that this is not a one off; to create sustained motivation, people must feel valued. Leadership has to be consistent and authentic in the way that it empowers teams to be create

Here are some ways of encouraging creativity and innovation:

Innovation       

1. Understand and know what the market wants, but know more about what your competitors are offering and how they behave.
Competitors of all kinds are the minimum benchmark for which to aim. Equalling the value of competitive offerings is rarely going to suffice – always ensure you are moving to stay ahead. Look at every weakness in competitor offerings and operations and use advanced brain storming tools such as ‘meta planning’ to develop and refine the winning concepts. To win you must find that point of difference and it’s usually a combination of ingredients which becomes – your winning recipe

2. Empower people to implement their innovations.

3. Make it clear that a business must always rethink, reposition, invest and develop its products and services.
NEVER stand still. Even those lucky enough to have patent or intellectual property protection must seek to acquire more advantages. If in any doubt about this then compare the car manufacturers on the road today with those of thirty years ago. GM laughed at the Japanese cars with their floral carpets and tiny engines. England was the undeniably solid centre of motorcycle production.

4. The customer is always a good start point for innovative thinking and should be a central focus for the whole business.
The customer and their relationship is central to business success. Do not rush to copy some competitors’ ways of caring for customers (e.g. automated telephone services!). Develop new ways to engage with customers in a way that customers want. They will repay you over and over. This is how Virgin took so much business away from the likes of Qantas

5. Treat internal employees as customers and friends.
The best innovation can come from co-operation between employees – this is an effective way of bringing out entrepreneurs. Identify and appoint innovation ‘champions’ around the business. These people will be the leaders on innovation development and manage the process. They must drive the culture.

6. Any function has scope for innovation – always.
HR, finance, customers service, manufacturing, legal, they all must innovate and an innovation culture that embraces all the functions will be a better joined up organisation.

7. Lead people to look externally for inspiration and don’t be afraid to steal other people’s ideas.
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 reinvent the wheel copy the world’s best practice then improve it.. Sometimes copying is the best route. However, copy it, and then improve it. Look at how the Japanese destroyed the UK motorcycle industry, they initially copied the UK and then made the products better.

8. Managers should promote external focus from all departments.
Many businesses suffer from internalism and parochialism. They stunt growth, innovation and sap energy. Assume that your business could be killed off by new entrants to the market or new innovations – people or technology based. Get people to think the un thinkable, develop thinking around scenarios that may seem unrealistic. In the 1960’s Black & Decker was the world’s largest and most trusted power tool maker. Which of the analysts and business commentators wrote or though in 2007 the major global banks would fail, that the system was unsupportable and a crash inevitable.

9. Lastly, companies must look forward, and by looking forward I mean 360 degree vision and a strategy to see through it. Most look back when setting budgets and design parameters.
Create a ‘can and will do’ rather than ‘can’t do’ culture. There are ‘no but’s’; only ‘yes and’

In the end, innovation is an state of mind. Train your key people to think and see differently, 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 new 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’s been said so many times but the answer is to look out of the box or in more 21st century terms constantly look beyond the horizon and use 360 degree vision and thinking.

The Barking Mad Blog

SME Advice with bite!

13 October 2003

http://wp.me/p401Wv-73

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The Perfect Storm

(A Modern Horror Story)

Because it Rains in Paradise

Why be so negative?……. well let’s use  Paradise as a metaphor.

Because It Rains in Paradise…….!!!!!! 

Come along take a short ride on this little thought wave, let’s see Paradise as a metaphor for a well-run business, a prosperous and growing concern and let’s see the rain as a metaphor for an approaching economic storm.

How well protected are we in terms of our ability to weather the storm? We have our business plans to hand but they make no mention of a storm. Have you been through a storm before? What changes? How do we survive? How bad will be storm be? Can we rebuild post storm?

So many questions and yet so far so few real life answers.

Breath deeply, let us relax together and read a little story……….

At times business can appear a lot like paradise, it’s a great place to be, and everyone wants to be there to enjoy life with you, to know you and to bask in your reflected success. You are the visionary, the hard working, creative, entrepreneurial brain who made this all possible, your adrenaline flows, your energy and ideas come together, your staff are happy, motivated and successful, they respect you, the cash flows in, you drive a nice car, dress well, you eat at the best restaurants, you fly at the front of the plane, you speak at conferences, and…….ahhhh you sit back, relax and you reflect on just how good your life is.

One day, a small cloud passes between you and the sun, sending a slight shiver through you, but it quickly passes. Utilizing your latest smart devices you send a few more ideas, instructions, queries, emails and more pictures of Paradise to your office, you check your bank balances, transfer a few funds here and there and it’s not yet lunch time.

The sun still shines but the palm leaves rustle again this time with an unsettling sound and in the distance the ocean appears darker, are those clouds, building in the far distance or a trick of light on the horizon?

Far, far away from Paradise and way over the horizon is The Land of Plunder (LOP). A terrible, bleak, dark miserable environment that draws the humanity, skill, resourcefulness and entrepreneurial spirit out of you like a black hole draws energy from its surrounding universe…..no profit, not even a scrap, ever escapes its clutches.

Populated almost entirely by wise and educated sages such as investment bankers, credit providers, speculators, derivative traders, stock brokers, securitization specialists, short sellers, long sellers, fund managers, promoters, actuaries, lenders, accountants, auditors, receivers, managers, liquidators, lawyers, barristers, regulators, and their shiny suited minions oh it’s a soulless place to exist yet alone to live.

The problem is that in the Land of Plunder no one actually makes, grows, manufactures, produces or sells anything. Nothing. Not a single thingamajig or even a widget. Not a single truly commercial activity in the whole land. Yet its population consumes the funds made in Paradise, it lives to play games with those funds converting them into concepts and instruments called spreads, market sectors, cash, gold, minerals, fuel, pork bellies, red bean futures, long and short positions, options, shares, derivatives, differentials, margins, rates of interest, rates of exchange, incremental ROI, leveraged positions, contingent assets and equally contingent liabilities. Perhaps the favourite game of all, played only by the most knowledgeable of sages, is the interpretation and discussion of meanings…..net, gross, before, after, on or off the balance sheet, earnings brought forward, deferred debt, provision for, contingent, or not and most importantly the holy grail itself………THE BONUS.

That night as you lay back in your king size bed, sipping a final glass of Comte de Taittinger, the wind rises and the palm leaves rustle, indeed as the tree trunks bend under the increasing force of the wind you get to thinking about The Land of Plunder. Who actually pays them and what for? What happens historically? Doesn’t the LOP like totally fuck up at least once every generation? And what happens when they do? Could it damage your business? What could you do to protect your business and the thousands like yours?

Another perfect day in Paradise dawns and already your CFO has confirmed that your cash registers are still singing caa-ching, your revenues are up, your staff are motivated, your customers are happy, your suppliers are on time and on budget and your R&D team is about to make yet another technological breakthrough and yet that lingering fear niggles away at you. How would I get by if the LOP was to get it all wrong?

Much of your new day is given over to this dreadful thought, and with the help of your laptop you reflect on history’s greatest LOP fuck ups. Dating from the Roman Emperor Diocletian’s disaster in the fourth century to those wicked Medici’s and their Pazzi Conspiracy and the subsequent Banking collapse of the fifteenth century, to the collapse of the Spanish economy in the mid sixteenth century….oh how could the wise sages have got the gold price so wrong? Of course no one within the LOP’s Dutch branch could have imagined that one day a Tulip Bulb would be worth less than its weight in gold but alas it came about. All of this further distresses you.

You of course realise that in the eighteenth century the sages came up with a brilliant plan, they sold the South Seas Company the exclusive rights to trade with and to import gold and other untold riches from South America. Sadly the sages didn’t actually clear this with the owners of South America, (Spain) or even mention it in the prospectus, small oversights they later realised and thus came about the South Sea Bubble. To date this is still history’s largest corporate collapse. Those damned Spaniards just didn’t play Cricket, did they, the sages were heard to mumble.

Racing forward, you find we have the sages of the LOP, engineering a convenient double act, in the Railroad and Silver collapse in nineteenth century America. Again the sages were ever so slightly wrong. More rail road carriages and rail roads were built than there were people and stock to travel on them. Some railroads went to towns and cities yet to be built. Proving that a double act was possible, the sages funded one or two, or was it ten or twenty, US silver mines to be opened on virtually the same day and surprise, surprise, the silver price fell through the floor. The US economy plunged into recession, jobs lost, families homeless, Railroad stocks crashed and companies failed but God Bless the sages……they still had their fees.

Still good hardworking entrepreneurs just like you were soon back at work in Paradise building their businesses, making and selling thingummy bits, widgets and the many whatnots needed by the people of Paradise. The sages were so impressed they decided to buy shares in these solid enterprises and trade them at a profit in LOP, whilst of course charging fees and profitably clipping tickets along the way.

Alas the shares were oversold and overpriced and in 1929 the entire global monetary system collapsed causing the worst depression, loss of jobs, homelessness, self-respect and starvation the world has ever known. In fairness some of the sages did feel quite bad about this and threw themselves out of their Towers of Babel to the pavement below. Though not many; and for the few that fell it was often as close to reality and real people as they ever came. One could go on and on mentioning the sages doing so well out of the provision of two glorious sessions of twentieth century global war debt, the Credit Squeeze of the early ’70s, the stock market collapse of 1987, the Banking Crisis of the early 1990’s and that monumental fuck up of 2008, but by now you really need a drink;

More importantly you need to recognise a the pattern, call in some real people and plan!

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October 2013

Neil Steggall

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The Barking Mad Blog

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