Doing Things Differently

Today at the Entrepreneur Country and Smith & Williamson workshop event I gave a presentation about tailoring ones business plan to investors. Before me Duncan Cheatle (Founder of Supper Club and co-founder of Start Up Britain) spoke about building capital value in a start-up and after me Travers Clarke-Walker (Head of Barclays Business Marketing) spoke about whether banks are lending to start-ups and SME’s.

That was really interesting is that I thought my “Soft side of business plans” topic would possibly be too controversial because it deals with feelings, passion and story telling before the harder topics of numbers and facts. In fact the opposite happened… So much so that I was so pleasantly surprised that both Duncan and Travers referred to the element of the “story” the “passion” and the ability to engage your audience.

After the session it struck me that there is a perceived discord between how we really operate in business and how we say we do. On the past weekend working with Darren Shirlaw and Daniel Priestley we were building on frameworks that connect with people on a Thinking, Feeling, Knowing basis. Today we were talking about the energy in a team, the passion that people buy into as commercial partners or investors and in today’s session, the ability to lose the momentum in your team if you have a rotten apple in that team… None of these are “business” language and yet all around me I am seeing so much more reference to business in emotive language.

In realising this I came to think about our perceptions of business. Do we expect it to be formal, strict, conservative, boring, structured, process-driven and all that? Do we expect to leave our emotions at the door when we hang our winter coats? I think there is an element of discord in business reality and how we perceive it.

Thinking about where I have worked – at Vinci Park UK, Monster.com, Yahoo.com and now Ariadne, the times I and our team were most successful was when we worked as a team and had fun… Of course this is obvious but digging deeper and there is something interesting. When we put aside the expected barriers of rigid work formality and were able to come together in a deeply personal way, we became highly motivated to work and succeed as a team – there was more at steak than not succeeding at work – there was letting ourselves down.

I think there is something fundamental in the shift at work these days. I don’t know quite what it all is yet but when you combine the trends of massive social adoption online, the X and Y generations starting to get into working environments, the growth of SME and entrepreneurial ventures (and the decline of the corporate) then at that intersection are we at the place where in business/work terms we are shifting as we did in western culture – from ‘boys don’t cry’ to recognising EQ as value?

If there is an increasing use of emotional language and descriptors in business terms from banking to investment, then surely there is a deeper groundswell at the core of the businesses that are operating at an EQ level too? Does that mean that when they fail to engage investors and banks for funding they are still thinking they need to engage those conversations in the rigid and old-world stoic business models? Are they miscommunicating their passion and drive based on an old assumption of how to talk business – Businesses don’t cry, do they?

This leads me to think about the role of the story and story telling in building business success…

I have been asked to give a presentation about tailoring business plans for investors at the Entrepreneur Country Building Your Business Summer Workshop tomorrow (30th June 2011) in partnership with Smith & Williamson. As this is a core topic for the book I am working on I am rather excited about the opportunity.

Googling “Writing Business Plans” returns 154m results so clearly there is more than enough information out there and yet on a daily basis I receive and read business plans that leave me bored, confused or simply disinterested. I think the problem lies in the process…

I believe that too many people see the process as a must do rather than a want to do and so as a result they lose so much of the flair and passion that they have for their business. As a potential investor, I want to feel what the proposition is about, how the entrepreneur will inspire his/her target market and how I can imagine myself using their product.

For me, one of the key ingredients missing in most business plans is the passion. The passion for what the business is about. Not in the form of the technology but in the form of what the technology can enable for the consumer of the service. This is the magic!

Including the passion and the story of the vision into a business plan is like making a tapestry. A tapestry has a specific underlying structure of the weave but it is the colours and combinations that make it unique. In presenting a business plan the same applies. Tomorrow I will be presenting what I consider the things not taught when learning to write a business plan – the soft side of bringing the weave to a level of passion and differentiation.

The first part of the process is to think about the structure much like Mike Harris’ Perfect Pitch architecture: What do you do? How are you different? What is your credibility? What is the market problem / solution you bring?

In preparing the structure of the business plan I always suggest the entrepreneur focuses on the questions of Why, What, When, Who and How so that at every stage of the plan you are answering the investor’s questions of Why this, why now and why you?

If the business plan focuses on the technology you are probably only going to inspire the technologists in the room while if you talk about the implications to the people who use your service all of a sudden it can appeal to a larger audience. You need to think about who it is who is reading the plan. If the investor does not invest, would you not still want them to buy your product, subscribe to your service or at least talk about you as a thought leader?

My 5 Do’s and 5 Don’ts I am sure will get some interesting responses:

Do:
Map out the sections before writing them
Define your perfect user/customer/client
Always ask yourself if each section answers the Why, When, What, Who and How
Keep the plan to under 30 pages
Use external examples and data only when relevant

Dont:
Start with the big market opportunity before the proposition
Make it bigger than it is just to please an investors 20x
Assume the investor knows your market
Say if we can get only a small percentage of a big market we can be huge
Say you have no competitors

For the presentation, follow this link or view it below:

I am Thinking, Feeling, Knowing… huh?

I did the Think Feel Know test over the weekend and was a little surprised to see I am 42% Feeling, 32% Thinking and only 25% Knowing. This means I respond energetically to the world around me, have an open and explorative style and discuss things in depth before reaching a conclusion. It also means that I may not work so well with people who are more knowing… So in the real world what does this mean?

The test was really interesting as I think about my interactions with my clients and colleagues. Where do my communications work? how and when am I effective and when not? How do some of my clients respond better to me than others?

On the theme of the personality in business from a previous post, this is just another way for us to classify ourselves and to find ways to better act on how we interact. If people around me are highly Thinking in their approach then how can I be, talk and act to inspire confidence?

Clearly there is no 100% right 100% all the time answer but it certainly is interesting to reflect on when things work or don’t work. The more mindful we are of our interactions the more stable we can be in those and over time just get better at being master communicators.

So what are you? Does it make sense in your view of yourself and others?

This past weekend I spent time with a group of like-minded people to learn more about building products with a purpose rather than building products for product sake. The workshop was run by Darren Shirlaw (http://bit.ly/bijEpR) who I had seen present a few times previously and always have been impressed by. Darren’s approach is not magical but rather very pragmatic and based on common sense and I think everyone in the group on Saturday were really engaged and switched on to Darren’s wavelength.

In reflecting on the process that Darren described for creating products I realised that so many of the companies I have worked with have so often found a market need, built the solution but failed to really think about the positioning and marketing of their product. Positioning and go-to-market strategy is a very specific part of the advisory process I do within my work at Ariadne and I have to say the framework Darren gave us was most helpful.

The key learnings from the session for me were:

1. Always ask WHY: this was something that should have been more obvious to me having studied psychology and counselling but the impact to the buying and selling process was lost to me before. By asking why and getting your client to answer what need they are trying to fulfil is a very different approach to the usual sales process. It unlocks the value of what the client is looking for and gets them to better identify what the came to you for in the first place.

2. Pre-sold clients are more likely to be evangelists too: If a client buys you and your service / product before you have had to sell to them then there is a far greater chance of having a better, longer and more rewarding client relationship. To get clients to buy into you there is a simple but effective process and if done well… they become your evangelists and deliver new clients to you through recommendation.

3. Build the product story but sell the product Framework: Darren was extremely clear in the explanation that product stories answer a particular problem a client may have but they don’t excite the client. A framework however is what people buy into. This was a really powerful key to my thinking and I have already tested it with far greater success.

4. Consider your belief system regarding how you invest in your products: The first half of the session with Darren was about challenging our belief system around business, spending and investing, productising and delivering service. It was really challenging to think about how these make sense to the people we support and advise but phenomenally powerful. Are you an investor in your business – i.e. do you take a step back, put savings aside and look at how to invest them from an investor’s point of view or from a business manager’s point of view? The difference is both interesting and quite powerful.

If you get the chance to see Darren speak – take it!

Have just read Mark Suster’s post “How to Run Better Presentations & Improve Results” (http://bit.ly/eRFatE) and wanted to repost some of the key takeaways as he mirrors my thinking and experience. If you don’t subscribe to Mark’s blog… do!

Key takeaways:

1. Determine the personality type.

Is the person an extrovert or an introvert – a talker or a listener. In my previous post I started to touch on this point. I find that getting engagement from a person largely depends on whether I have identified if I am talking to an Alpha or a Coordinator. If you want to get something from them, you need to know how they like to be approached.

As Mark says, “Extroverts like to have the answers presented to them up front” while coordinators usually want to understand the implications, the ‘load-shedding’ and the net effect personally and to the team. Both want to be involved in the decision but it is how the information is presented and how they are invited to participate that is key to getting buy-in.

I have a client who is extremely smart and really knows the business sector but has a limited ability to quickly ascertain his audiences personality and marches into conversations with a very well rehearsed presentation. Where it fails is that he won’t have changed the tone, delivery or structure to fit who he is talking to. The whole purpose of the initial small talk is to gauge each other – this is the time of two antelope measuring each other up before jumping into antler lunges.

2. Audience attention span.

In the initial chit chat determine what the person’s attention span is. Do they flutter about a lot? Do they change subject frequently? Do they appear to listen but not react to what you are saying? If the person you are trying to do business with has a short attention span – give them the ammunition to keep their mind able to jump from one point to the next while you are talking and be ready to follow in this dance. Key is to be sure of your information, know what you are talking about and be prepared beforehand. Mark says “If you dawdle my brain moves elsewhere” and this is why you want to keep them on side.

3. Drivers can be bullies.

Mark makes a great point about people who are Drivers, highly expressive with a ‘task oriented’ process. They can be low EQ people but this can be used to your advantage, by using a little human centred therapy technique, you can quite easily pull them into your camp, a bit like puppy training with an over excited Jack Russell. When they are criticising or debating, take their comment, internalise it, repeat it back to them and follow up on how your opinion differs. This is good to defuse the tension, slow the pace and to turn the conversation. Raising to the barrage would only be a sign of battle which is part of what a bully is looking for. This situation does not need to be too different and it can be quite good to have a ‘bully’ on your side rather than not. Take the time to win them over with logic. Chinese martial arts and the theory of Chi has a good analogy – water always gets to the sea, rocks and boulders only change the course. Stay focused on your goal and find the path with less resistance to get the Driver on side.

4. Coordinators.

Like a true logistics person, a coordinator is analytical and can seem introverted. While in discussion they are very often running scenarios, possibilities and analysing the risk/reward etc. Coordinators struggle to jump into a conversation, rather, they need to know the journey. These are people who need a map, and your presentation to them should be delivered in this way. As Mark says, “Analytics generally don’t want the answer up front. They want process. They want deduction. They want numbers, facts, figures, analysis, proof – dispassionate conclusions. They hate being ‘sold to’ but want to fast-track your journey and see if they come to the same conclusion.

Business is done by people – it works or fails based on how well you and your colleagues, clients and partners understand each other. Understanding is both down to the verbal and non verbal. The initial dance that starts with a hand shake is key, use it to understand what type of person you are meeting and be open to their mode and personality. Do check out Marks blog, the framework chart is a good one.

Just the other day I was called up, out of the blue, by a previous client of mine, asking if we could work together again. I was really pleased that his impression of how we collaborated the first time was really positive. This had me reflect on my most successful client relationships and what the secret of their success was.

This contemplation was further enhanced by some conversations I’d had while on holiday in Dubai just a couple of weeks ago. Chatting to the founder of a very successful digital agency, and his wife, we got onto the topic of business development. “What’s so nice about Dubai in our sector is building business on relationships” they said, “knowing that going in with a hard sell won’t work. One needs to establish a rapport with the person, get to understand how you could help them and jointly find a solution.” they continued.

This was the first time I’d had the fundamentals expressed so simply and yet they represented what my natural approach is.

As a teenager, about to start boarding school I was given some pertinent advice from an older distant relative, “To stay out of trouble, keep your mouth shut and your ears open.” This became my standard behaviour for so many years. My friends – and peers – trusted me and I was able to observe so much without being stuck in the middle.

Later on I think this developed into a very keen ear for ‘what is being said and what is being communicated?’ as the two aren’t necessarily the same, reading between the lines is critical too!

In advising my clients I strive to listen to why they say and try to analyse what’s being left out. What is their vulnerability, what are they unsure of and how can I interpret that as where they may need help? I ask and gently probe and that’s where the magic happens.

When looking at investment opportunities as I also do, for start-up / high growth companies, one of the key questions we ask is whether the entrepreneur/management team are world-class. We look at how they engage us in conversation to find out how they sell their product and themselves. Again it is about the people.

Building a long term relationship as an advisor requires a relationship of trust and openness. Entrepreneurs that most impress us are those who spot an opportunity and enjoy talking about it rather than preaching about it. We love evangelist but are turned off by arrogance – we know our investors will be too. If there isn’t a rapport with us we are very weary of the ability to build a rapport with potential investors and, more importantly, with their future clients.

Person-centric business to me is built on listening, being open and forging a relationship which is often about a partnership – an equal give and take. There are of course certain tricks and must-have’s to make this more tangible but that’s for another post to look at.

The era of the digital network is just beginning as social networks become the battle ground for the next wave of killer applications. Facebook and LinkedIn are both open platforms allowing third party developers to access their user base and provide services and applications, creating a new paradigm of personal engagement. At the same time as this new paradigm starts to solidify, the world of recruitment is facing rapid changes and all the challenges that come with change. The speed of change in recruitment has increased exponentially as the jobseeker mix moves from Gen X to Gen Y, having to adopt their different view of work, careers and personal identity.

The old view of one’s career was that it was synonymous with the job one had while increasingly a job is merely a stepping-stone on the path of a personal career. The jobs we perform are becoming more transient as we start to take more ownership of our own career paths. More and more of us are freelancing, consulting and working across multiple projects within and without the organisations that pay the main pay cheque. Generation Y start their professional lives already part of the digital network, already masters of their Facebook, Myspace or Bebo social profiles. This generation has already started the journey of building its own personal brand in the social context and it’s looking to do the same in a professional environment.

The traditional, linear recruitment process of one-to-many is on its last legs, almost broken – why? As the average time people spend in a job is near the four year mark, the economics of recruitment are having to adapt. The old process required a database of resumés to be screened, short-listed and funnelled into a pipeline of candidates based on a two-dimensional paper merit match to a three-dimensional role within a dynamic organisation. The time and money required to attract, find and hire the right candidate was high. Some estimates indicated the cost of replacing a junior accountant in a corporation ranged from £3-£10k. These economics worked while the recruiter could assume that candidates would remain in their jobs for a longer period of time. As this is rapidly changing, recruiters are looking for new ways to make the right connections to the right people faster and in a more dynamic way: from one-to-many to one-to-one. This is happening in parallel to increasing development of digital networks. The future of online recruitment is no longer about how many resumés are on tap but how quickly the right connection can be made to the right candidate for the right job.

One’s personal brand is rapidly becoming equally important as the corporate brand. This is evidenced by the number of people starting out on their own at an earlier age, working as consultants, freelancers or entrepreneurs. The value of one’s personal, social and professional network is growing and recruiters are being forced to adapt to capture this value. Professional networks such as LinkedIn and Xing are already reaping benefits with some companies only recruiting from these digital networks, no longer relying on traditional offline search firms or online 1.0 recruitment models such as Monster, Fish4 or Jobsite.

Online 1.0 recruitment still relies on the linear one-to-many model and yet their value in today’s digitally networked world lies mainly untapped: Monster announced in May that it had over 4 million resumés in the UK, that is to say they have 4 million poised jobseekers wishing to engage with the professional world. Having already established a relationship with these users, Monster is but another digital network with valuable information on users with a specific need – looking for their next step in their career development. The challenge Monster and its peers now face is to enable these users to engage with the greater professional community by allowing the owners of the 4m resumés to interact and network with each other. They will then create the channels for their users to connect directly to their potential next boss in a one-to-one way.

Web 2.0 as a buzz word should be at the very top of every online recruitment company’s strategic plan. Large successful online recruitment firms have the users, have built the brand and now need to marry these aspects to the available Web 2.0 technology to keep Generation Y engaged. There is an increasing number of new, innovative companies looking to leverage this new opportunity in online recruitment building new models for recruiters to engage with talent along the premise of the digital network. Zubka.com is one such example – leveraging the personal network, providing a referral payment scheme for successful hires while BraveNewTalent is looking to build a pre-employment networking site to connect talent to their potential future employers, empowering the talent to start controlling their careers through networking.

The role of the large job-boards is not yet extinct but given the current market situation, recruitment may be forced to reinvent itself and start to embrace Web 2.0 developments with the same fervour as our Generation Y took to the online social networks. The game is on and the rewards in recruitment remain huge but the focus needs to be on the target market – digital networking, personal brand development and innovation is the future of online recruitment. As e-recruitment was one of the first successes in online advertising, will it lead in turning the Web 2.0 buzz word into a commercial success?

Thinking about Steve Jobs’ comment that he had never seen anything like the mass of downloads and sales through the iPhone/iPod Touch app store is a real testament to the readiness of consumers to be full web/mobile 2.0 users with a simple catch: ease of use. I had thought that there needed to be some practicality or application value but that too takes a second seat according to the app store. One if the most popular downloads was a virtual Star Wars Light Sabre which did nothing but use the in-built iPhone accelerometer to make swooshing sounds. Until it was pulled by Lucas Arts, it was a massively popular application – simple but useless – and there are so many more of them!

How long until Nokia, SonyEricsson or Samsung (etc) develop their own application stores and open them to the developer community? To me T-Mobile’s announcement to open their own shows the ‘and me’ thinking here but why not? Done well the millions of non-apple phone users will have a means to pointless apps to show off at the water cooler.

If ringtones were 1.0 for mobile, surely apps are the 2.0? The holy Grail then I guess is linking apps to advertisers and turning the closed user community into a fully serviced online mobile content and commerce platform where calls just happen to also happen.

Yahoo! an ex-darling of the web doesn’t appear to have much air left in it’s tyres with yet another announcement of a service being stopped. Yahoo had a music service and with Hollywood deal maker Terry Semel at the helm, imvested in this sector by buying music match an creating a pre-Last FM version of social music with recommendations, premium content and deals direct with the artists. It comes as a bit of a surprise though then (or does it?) to hear that a a result of their DRM service being switched off, they will not be able to support some existing users paid-for music subscriptions.

Yahoo!’s Microsoft/Icahn battle has to make one question where the real value in the company lies. It used to be the source of information with it’s initial heirarchy and then through search but as they are largely gone the brands value lies in it’s being a portal of choice mainly in the US and Asia. What caused the poster case of innovation to fall onto the slippery quicksand path?

Clayton Christensen, a professor at Harvard Business School theorised that failing companies are made to fail not by poor leadership by rather the system not allowing them to succeed. He went on to suggest that maximising shareholder returns in a tightly fought battle ground often drives companies to focus on their top products with the highest margins while the true disruption came from below within the lower margin and lower profile products.

Applying this to Yahoo! makes for an interesting thought – is it the structure of the company when faced with massive challenges from Google that forced it to focus on the wrong products, deals and sectors? Did Yahoo! miss the opportunity to really innovate and change the game because their stock price was under attack and Sue Decker was on her back foot all the time defending a failing process thus taking the focus away from what Yahoo used to to – provide innovative services to their users?

Yahoo! Mail, Finance, Shopping (in the US) and Messenger are still hugely popular services but as the embattled firm continues to look to the short-term share price, will the sum of the parts end up more valuable than the whole? If Christensen’s concept is right, it seems to me that there is little chance to break the vicious cycle and acquisition might be a bitter pill to swallow for Jerry Yang but what else is there to do?