Category Archives: at www.smartcompany.com.au as Digital Bottom Line

Insight on Insight

Have you ever noticed that Entrepreneurs never put an “Out of Office Message” on their email? John Stokes said this to me whilst we were having lunch at the soon to be demolished Rosati’s in Flinders Lane. John is a British Entrepreneur and Venture Capitalist based in Montreal, Canada, where he runs a US$50M fund called Real Ventures. He had spoken the night before at the Churchill Club on his thoughts on globally successful entrepreneurs, whilst on a tour of Australia sponsored by the Global Entrepreneurs Program.

John indicated during his speech that he felt that successful entrepreneurs tend to display four traits, a major one of which was insight. This was fascinating to me as I had been thinking a lot about insight all week, as I had just seen the movie Moneyball. In it Brad Pitt’s character has an insight that dramatically changed the way baseball operated. It was apparently a true story.

For seventy years, baseball talent scouts had been recruiting players, based on their assessment of whether the person would be a future star. Brad Pitt’s character, who was forced to think differently because of a lack of money in the club – realised that perhaps they should be buying home runs, not future stars. The Oakland A’s then picked up a series of cheap but high scoring players that the scouts didn’t like, and won a record 20 games in a row.

But John’s key insight with his Real Venture fund, was that Continue reading Insight on Insight

Can you have a partnership of entrepreneurs?

A group of Scandinavian entrepreneurs caught my eye this year, so when I was in London the other week, I decided to look them up.  They had a local office above a shop in the fashionable shopping district around the Bond Street tube station and were a fascinating group, who seem to have built a working partnership model for entrepreneurial endeavours.

The mechanics were described to me as:

  1. Its all in, you don’t have activities on the side. Which means the partners are aligned on putting energy into the best projects.
  2. For each year you work, you accrue around 2,080 partnership points (52 weeks x 40 hours). So if you take 6 months off, you only accrue 1,040 points that year.
  3. Distributions of profits are based on the percentage of the total partnership points you have accrued.
  4. Every time there is a distribution to the partners, your partnership points are reduced by the same ratio ( e.g. 50% of NTA distributed, means a 50% reduction in your partnership points).
  5. Once you leave, your partnership points stop increasing (i.e. you have a smaller ratio) and get reduced with each distribution. When your points drop below a set amount, you are automatically bought out for a pre agreed amount (because you can’t get to zero when you are getting reduced by fractions).

The group then Continue reading Can you have a partnership of entrepreneurs?

how to moderate an event

I have probably moderated around 100+ events for the Churchill Club over the last couple of years, and have realised that I now have a bit of experience moderating panels, which can be hard to come by. Although I believe I have nothing on Narelle Kennedy of the Australian Business Foundation, who is by far the best moderator I have ever seen because of her ability to run a panel at a break neck pace and keep the panellists honest, I have some thoughts I wanted to share on how to be a successful moderator.

Before the event. Do some research on the panellists and the topic so you don’t look like a fool on stage. Have enough questions prepared to move things along if the audience Q&A is a bit slow. Have either an agenda for the event to travel along, or a list of points that you feel you need to have covered. Also, make sure that the panellists are fully briefed on the mechanics and the objective of the event. I have also found, after suffering some considerable pain, that its an excellent idea to have the panellists reconfirm their attendance the week of the event.

At the start of the event. Initially you need to have a mechanism to gain the audience’s attention, then introduce yourself. You need to outline the rules of play – How long the event will go for, when/how to ask questions, whether the bar is still open, as well as some simple mechanics like “turn our mobiles to silent”, or twitter feed hash tags. Finally, introduce your topic and panel without stealing their thunder. Continue reading how to moderate an event

mini diasporas & linkedin

The EconomistI read a nice article in The Economist last week, it was entitled “The Magic of Diasporas”. And since I was in London going to and “Australian Business UK” function, It made me feel even more connected to my fellow Aussies. Diasporas are described by Wikipedia as “the movement, migration, or scattering of people away from an established or ancestral homeland”

Anyway the article mainly focussed on the Chinese and Indian diaspora. There are 22M Indian’s living outside India and more Chinese living and working outside of China (est. 83M) than there are people in France! Closer to home, it estimated that around 5% of Australian’s live O/S at anyone time. Diasporas are a major force in the world when you consider the fact that China isn’t so much a country with borders, but a billion people spread over the world!

The article indicated that the value of diasporas came down to three things:

1. They accelerate communication of ideas and opportunities between different locations.

2. They foster trust, as you would naturally prefer to do business with a countryman overseas.

3. They foster collaboration, as disaporas capitalise on opportunities between regions.

Although the article was fascinating, it wasn’t immediately useful to me, until I started thinking about what I termed mini-diasporas. More than once I have been a member of a large group of people that have each eventually gone their separate ways, spreading out through different regions and industries. I finished high school with around 180 others, graduated from University in a class of around 40, graduated from Officer School with a group of 14, and have been a member of variety of different small businesses with staff from 3 to 180. So how to take advantage of this?

The answer of course is Linkedin. I would recommend to anyone joining Linkedin to connect with their fellow employees. Although initially this wouldn’t seem to be of much use, my experience through managing a mailing list of a couple of thousand people is that 33% of people changed employers every two years. Therefore by connecting with the people you currently work with, you are hooking into a network that will be wide flung within a few years. And by activating this network through regular updates on what you are up to, you gain mindshare with the people in it as you each find your own way.

communicating modes

communication mdoesA friend of mine has a beautiful house outside of Geelong. It sits on an acre, has an orchard and chooks in the backyard and started off life as a church. And it was while looking over this view and drinking wine on a hot day recently, that I had a major insight into management issues.

My friend, a lawyer that specialises in Corporate Governance, was talking about the different modes that a board can communicate to management in. Paraphrasing, they were:

Encouraging – Letting staff know you think they are doing a great job, or trying to motivate them.

Suggesting – Letting staff know of some options that they may want to look into.

Coordinating – Helping staff act in the way that you want them to act.

Controlling – Making sure staff do exactly what you want.

This framework also works for senior management speaking to junior management, or junior management speaking to staff. Its not just a board level issue, its an issue throughout business and in fact anywhere there is a hierarchy, including inside families.

The number one problem he asserted was not so much, poor quality communication, but a misunderstanding of the mode of communication.

All too often you see staff members getting pissed off as they believe they are being ridden and have no flexibility, when in relaity they are just getting suggestions. Alternatively I see managers getting stressed about staff not taking direction.

A friend of mine has recently taken over a business unit of a large corporate, and in the absence of a clear, public instruction from above about the new arrangements, is now finding life difficult as his new staff members don’t actually see him as the boss. He’s just someone from head offices who is loaned in a couple of hours a week to help them improve themselves.  Both he and his staff need to have clarity about exactly what mode he is communicating in.

What made this discussion on communication modes fascinating, was that the conversation occurred whilst we watched the chooks quickly sort out who was boss and the “pecking order”. Non nonsense, quickly done, everybody happy.

 

natural ceilings

Lt ColonelAn odd thing I noticed a long time ago when I was I in the Army was that most of the Lieutenant Colonels I met used to give me a really bad time, and were unpleasant to work with. I accepted this as I assumed that as a young Lieutenant, I was forever mucking things up and the only way I was going to become good at my job, is to have my errors both professional and personal, repeatedly and forcefully pointed out to me.

The odd thing though was that whenever I met a General, they seemed to be genuinely nice people. Sometimes a bit grandfatherly, sometimes a bit scary – but always calm people who made you feel good about yourself and made you feel you could achieve more and were going onto great things. They were also always capable of explaining the “why” of any situation using words or reference points I could understand.

I pondered this on and off for a couple of years, wondering if there was some special course that General’s did that turned them into nice people.

Eventually at a Dining In Night, I plucked up the courage to voice my observation and ask the old general I was sitting next to whether there was a special course they went on. He responded, somewhat drolly, “no son, its just that Lieutenant Colonel is the natural ceiling for the arsehole”.

I’ve taken it with me all my life and it tends to pop into my head unbidden, whenever I am treated badly by someone who perceives themselves as very senior.

The 10 Principles of War

On war ClausewitzAround the start of my career in the late 80’s, Eastern thought was very big in the workplace. There was a growing awareness of Japanese solutions such as Kanban and Keiretsu. Management books such as Miyamoto Musashi’s – The Book of 5 Rings and Sun Tzu’s The Art of War were massively popular as books on strategy. What I found strange though was that these two books were very old. The Book of 5 Rings was written in 1645 and the Art of War in around 500BCE! What was going through my head at the time was, “If I am going to apply military strategy to business, surely there must be something a little more up to date!”. I was certain that we must have learnt something over the last couple of hundred if not thousands of years.

Of course, the answer was staring me in the face. In the Army I had learnt about the 10 Principles of War. These were the ideas first acted upon by French General & Emperor Napolean Bonaparte, then codified by the Prussian Officer Carl von Clausewitz in his essay “The Principles of War” in 1812. Since then these Principles of War have been further tweaked and are now taught in every Military Officer school on the plant.

Each of them are quite simple and in every case can be applied to commercial operations to improve the chances of their success. So what are they?

  1. Selection and Maintenance of the Aim
    A single, unambiguous aim is the keystone of successful military operations. Selection and maintenance of the aim is regarded as the master principle of war.
  2. Maintenance of Morale
    Morale is a positive state of mind derived from inspired political and military leadership, a shared sense of purpose and values, well-being, perceptions of worth and group cohesion.
  3. Offensive Action
    Offensive action is the practical way in which a commander seeks to gain advantage, sustain momentum and seize the initiative.
  4. Security
    Security is the provision and maintenance of an operating environment that affords the necessary freedom of action, when and where required, to achieve objectives.
  5. Surprise
    Surprise is the consequence of shock and confusion induced by the deliberate or incidental introduction of the unexpected.
  6. Concentration of Force
    Concentration of force involves the decisive, synchronized application of superior fighting power (conceptual, physical, and moral) to realize intended effects, when and where required.
  7. Economy of Effort
    Economy of effort is the judicious exploitation of manpower, materiel and time in relation to the achievement of objectives.
  8. Flexibility
    Flexibility – the ability to change readily to meet new circumstances – comprises agility, responsiveness, resilience, acuity and adaptability.
  9. Cooperation
    Cooperation entails the incorporation of teamwork and a sharing of dangers, burdens, risks and opportunities in every aspect of warfare.
  10. Sustainability
    To sustain a force is to generate the means by which its fighting power and freedom of action are maintained.

I tend to think that this is a great framework for both building a plan within, as well as analysing the plans of others. Just replace the word military with commercial and it all tends to make sense. But the big one for me is the first, and master principle – Selection and Maintenance of the Aim. Get this right and everything else starts falling into place.

calendars for international travel

From my point of view, doing international business is one of the most enjoyable things you can do in a business career. And if you are going to spend around 90,000 hours of your life working, why not have fun.

I said this to someone during the week as I am planning a trip in November to London and Abu Dhabi. Which reminded me that planning the trip isn’t anywhere near as much fun. When I went to put the flights in my diary I realised they started in one time zone and finished in another. Bugger – I hadn’t been using my current setup last time I flew internationally for business. Traditionally I have had an excel spreadsheet showing meeting is each different time zone, and most of my travel was to Asia so it wasn’t a big deal.

But now I keep all my data in the cloud using Google Calendar synced to each of my devices, so I wanted a new solution that would be seamless, minimalist, ubiquitous and most of all, elegant. Frankly, I want my calendaring solution to “just work” no matter where I step off the plane.

Luckily for me though Google & Apple had had a think about this in the free products that I use.

1.  Under the General Settings for my Google Calendar, you can choose an additional time zone to display on the Calendar. This means I have an instant visual comparison of Melbourne and say Abu Dhabi. When I am talking to someone teeing up meetings, I can see their local time.

Timezones

 

2.  When creating a new event entry in you Google Calendar, you can set a separate time zone for the beginning of an event and the end of event. This means that correct elapsed time will show for a flight, and I don’t have to deal with timezone weirdness in my calendar. Especially if I arrive yesterday.

Event Time Zone

3.  Under the Google Calendar settings, you can then swap the displayed time zones for your calendar. Which means my meeting which is currently displayed as happening at 1:30am Melbourne time, jumps up to 2:30pm in the afternoon London time.

Swap

4.  My Google Calendar syncs with my iPhone and every other device I have. Fortunately Apple’s iPhone supports multiple time zone attributes for events and therefore everything sycs and works the way it should. Under “Settings | Mail, Contact & Calendars | Time Zone Support” I can change my phone to make it think its operating in a different time zone. Any meetings I create whilst the phone is set to that time zone, will also be reflected in the correct time zone back in my Google Calendar. This means that when I step off the plane in London & Abu Dhabi, I change my time zone in the phone, and everything looks normal. Lunch is happening at lunch time.

Iphone Timesone

Be the way my friend who travels internationally far me frequently than me says the whole time zone issue does her head in, so when planning a trip, she adds plenty of slack because she assumes she will make mistakes. So I thought I’d share my solution with her, and write up my notes in-case anyone else feels that way.

killer boards for small businesses

killer boardsA fairly interesting and painful lesson to learn was having my father as Chairman of one of my IT businesses.

I hadn’t ever had a formal board before, and my father was experienced as a chairman of public companies. So as CEO I decided the other founders and I, who were the Directors, should meet quarterly with my father chairing the lot of us. Unsurprisingly, this was spectacular unsuccessful. We didn’t know what we wanted to achieve and my fathers experience was with mature large businesses only, very much focussed on a risk mitigation.

Its disappointing for me to realise that since I was around 25, I have continuously been a Director of a variety of small businesses, but up until recently didn’t have a clearer idea of what board should do for small business other than the general statement, help it grow. Therefore, it was relief and excitement at last Thursday’s Churchill Club meeting, a comment was made by David Burden (recently CEO of the Webfirm Group Ltd and co-founder of Legion Interactive) that really resonated for me.

Forget Accountants, Marketers and Lawyers, you can buy their services as you need. Forget Industry Doyens and Professional Directors, they are unlikely to be anything more than a distraction to a small growing business. What you want as a small business is additional Directors can help you with one or more of the following four tasks.

  1. Grow revenues.
  2. Raise capital.
  3. Get the right people involved.
  4. Exit the business.

If they can’t help you with one of the above tasks through their existing networks and assets, they’re just wasting your time.

Looking then at what you want from these potential Director’s, its pretty easy to then decide what their KPI’s should be (the outcome), how you want to remunerate them (appropriate fee for time, equity for success), and how long their tenure should be (till the job is done). It also makes it a lot easier to find them, because you now know exactly what you are looking for (people with large, useful networks and/or assets the business needs).

So despite the fact my father was a great Chairman, he was completely misplaced in a small business that didn’t know what it wanted. A waste of both his time and mine. And I didn’t even write that because he is likely to read this post :)

success, failure and the space in-between

I had a coffee with a friend yesterday that got shafted at work. She had been working on an exciting new agenda for some months, got signoff at every level and was ready to transition into the new leadership role that came with her plan. Unfortunately they (the evil bosses) took her plan, but replaced her in the leadership role with a political appointment that won’t be able to deliver. To add insult to injury, she will be seconded to support the new “leader” in delivering her plan. Unsurprisingly she is a bit miffed (understatement!) and sees herself as having failed.

Plan BSo we had a chat and I tried to be supportive, outlining my thoughts on success and failure.

Most people are very good at defining success, we teach it at school from the very beginning. There is a right answer pre-defined by the teacher, and if you’re not right, you’re wrong. i.e. failure is simply the state of “not success”. But real life is much more complex, more shades of grey. There are normally a couple of right answers, and many more “almost right” answers that we can work with. But still we we are trained to only define success not failure, and if we don’t achieve it in our careers, we tend to get emotional and flail about as we see ourselves as having failed.

Having worked in innovative and entrepreneurial environments almost my entire career, failure and I are good friends. In fact I now pretty much expect to not succeed in anything until I have had a couple of go’s at it. However I don’t support the Seth Godin concept of that “worthwhile things are hard, and you should keep on whacking away at it until you succeed” I prefer the Scott Kilmartin concept of “The wisdom of years helps you decide when you should quit a project, no matter how personally painful it is”.

All this can seem a bit confusing, but I have a fairly simple approach to most things I get involved with.

Define Success
This is normally easy (as we spend our lives doing it) and there are plenty of resources to help guide you if you are confused or unsure about your personal goals. Obviously SMART Goals are good (Specific, Measurable Attainable, Realistic, Timely). An example of defining success could be offering a new product to five existing customers and getting 2 sales within a month.

Define Failure
This is a a lot more difficult, but I lean towards parts of the SMART Goals framework (but just the Specific, Measurable, Timely parts) to define this. I also normally define failure after I have defined success as it gives you a nice contrast, but I don’t simply define failure as the opposite of success though. An example of failure could be offering a new product to five existing customers and not getting any appointments to explain the product within a month. Defining failure clearly also offers much better learning opportunities for you when things don’t work out right.

Recognise there is space in between.
You don’t need to define the difference between success and failure, just recognise that a result that falls in that space means you will have to come up with a plan B, and kick it into action. Remember, that this is probably the most likely outcome, so embrace it when it comes.

Defining both success and failure upfront means that you can be a hell of a lot more effective and less emotional when things don’t pan out the way you want. It also means that you stop investing your time in dud ideas quickly, and stick with the ones that might just pan out.

My friend didn’t get to be the recognised leader of the new agenda, however she did get to be the architect of it and the implementer. Turns out she can live with that once she realised she hadn’t failed and they are using her plan, its just that she didn’t comprehensively succeed.