Author Archive

Achieving growth

What my clients and associates achieve
To give you a flavour of the range and type of people and companies I work with, I have asked some of my clients and associates to summarise what they have been achieving recently. It’s an interesting tapestry.

I hope you find their achievements interesting and perhaps food for thought for your own business. If you’d like to be included in future updates, send me your news and achievements, and I’ll be glad to spread the word!

Paolo Venturini, founder of management consultancy Nemultus, has completed three major projects in the last 18 months:
• He defined the strategy for the global R&D footprint of one of the three largest multinationals in agricultural seed development, headquartered in Switzerland
• He set up ecommerce operations for Italy’s largest generalist retailer
• He contributed to a study (published by OECD) to define the strategy to attract foreign direct investment from food multinationals in Kazakhstan

Weedie Sisson of People First Limited, having built a sole practitioner coaching and consulting business over the last 6 years, is now embarking on an expansionist strategy and has started looking for like-minded folk with complementary offerings who would seriously consider joining forces. She has also been up for two awards for her people development work in the legal sector. Sadly she missed out on the first one, but the second is still up for grabs!

Lisa Thompson, after two years of meticulous research and planning, has launched her collaborative business services model Blue Acorns, which is truly innovative and distinctive. This is still a fledgling operation but the first three months have been very encouraging for all involved in the initiative.

Gordon Borer, of Exceptional Performers, is embarking on a very exciting project relating to the dark art (or is it a science?) of business development, which should shed some light on what it is and what it is not!

Andrew Pullman of People Risk Solutions has developed an innovative HR Healthcheck that helps firms to objectively assess the level of risk they are running. Typically this process also produces a menu of actions that can be taken to address the gaps, and how PRS will help fix the problems. In the area of health costs, PRS can typically demonstrate a saving of between £5 and £8 for every £1 invested!

Congratulations to all of them!

What I’ve been doing
And lastly, myself. Well, Cass is keeping me busy. I’ve been appointed as a course tutor on a new degree programme – the MSc in Leadership, which attracted some interesting coverage in CityAM this week:
http://www.cityam.com/article/teaching-leadership-post-crisis-mbas-are-changing-emphasis

This is going to represent a regular commitment from September onwards. It’s very exciting, but it’s also a little bit scary at the same time, as it’s very much unexplored territory for me. The collaboration with the Inspirational Development Group (IDG) is first class, and the opportunity to be involved in delivering training at Sandhurst is one not to be missed.

I’m also involved in the sales, development/design and delivery of a programme for risk officers, in conjunction with the Risk Management Association (RMA) in Philadelphia. This will run in February 2014.

The third area of activity is entrepreneurship, so closer to the world of David Mellor Mentoring. I have three different programmes at different stages of evolution, and will tell you more on these next time as they merit more detailed coverage.

Outside of Cass I’ve been kept busy with routine mentoring assignments with start-ups and growth businesses, and have taken on a few new assignments. I’ve also been running my “Crew to Captain” workshops (up to three a month), my adaptive selling workshops (using PRISM), and my “How to start a sole practitioner consultancy” workshop. This needs a better title, so I will probably adopt the one for the forthcoming book on the same topic: “From Crew to Captain: a Privateer’s Tale”!

Next month I’ll be telling you more about these topics. If you’d like to be included in future updates, send me your news and achievements, and I’ll be glad to spread the word!

To your continued success.

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#3: Part Three: Building your business as an independent consultant

In the previous article I outlined the first of the 3 constituent components of the framework, namely The Consultant Role. This time I will do the same for the second constituent component, namely Selling Consultancy Services.

In terms of Selling Consultancy Services, you will recall that you would firstly reflect on your routes to market; you would then move on to consider the sales process which you would adopt; and finally you would look at tendering for competitive bids.

You almost certainly have more than one route to market. I suspect there are 6 main ones. You will have “route 1” or the direct route, i.e. you selling direct to the prospect. You will also have an indirect route which is reciprocal i.e. you find potential work for others, and they will be more motivated to look out for potential work for you. You may find “sales agents” who would be prepared to identify work for you, but who would expect some form of payment i.e they might only do this on a retainer and/or success fee basis. There might be other consultants with whom you could collaborate to win work you could not win individually; you could enter into formal strategic alliances or joint ventures; and finally there are networks you can join to build you relationships and promote your business.

If we move on to consider the sales process, we would start with sales qualification – how are you going to turn complete strangers in to cash in the bank, weeding out potential timewasters and bad debts along the way. We would also look at sales pipeline – how will you manage the various targets and prospects who are at different stages of evolution in terms of whether they are going to hire you or not. And then we would look at the sales meeting – how you would handle the conversation and ask for the business without feeling awkward about it.

The third aspect of sales is tendering and competitive bids. This has greater relevance if you are pitching for large contracts and/or pitching as part of a consortium alongside other consultants. We would start by looking at what is often called the “Path to Assent” – how you play to the mindset of the economic buyer i.e understanding the prospect and his/her world. We would then look at writing a bid, and make sure that due attention is paid to bid process requirements and criteria. The third aspect would be considering the presentation of the bid – how to make best use of the limited time available to reinforce the key aspects of the bid.

These three aspects of sales will be developed in future articles.

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#2: Part Two: The consultant role

The consultant role is one of the three constituent components of the building your consultancy business framework.

In terms of the consultant role, you should firstly reflect on the key challenges which you would face as a Consultant; you would then move on to consider the different consultancy models which you could follow (e.g. subject matter expert, sector expert, change agent…), and decide which is the best one for you; and finally you would look at the key success factors which would determine whether you were going to prosper or merely survive.

Key Startup Challenges

The key challenges revolve around you going into consultancy with your eyes wide open, so that you really appreciate what you are getting yourself into.

– One set of challenges revolve around credibility; what is it about you and what you know that would induce someone else to hire you? Remember, you want people to see you as an investment, and not a cost, so how do you position yourself to achieve this.

– Then there are behaviours and attributes; what are the aspects of your behaviour which will help you to be accepted as a source of valuable input.

– And finally there is lead generation – do you have a process to turn strangers into customers.

Consultancy Models

The different consultancy models again fall in to three basic categories.

  1. Firstly there is subject matter expert, which helps to address the suspicion of the “Jack of all Trades”. Furthermore, a single product or service cleverly promoted and flexibly applied is likely to command higher fees.
  2. Secondly there is change agent, where the consultant has the ability to facilitate either macro or micro change.
  3. Thirdly there is trusted adviser, where the consultant has built sufficient rapport with the client that he becomes the client’s “go-to” person on all manner of matters. One of the fundamental questions you need to address is whether you see your role as 100% advisory, 100% operational, or a mix of the two.

Key Success Factors for Consultancies

The third component is key success factors – what are some of the main areas that you are going to have to focus on if you are going to be successful.

One of the areas is self-awareness. How well do you understand yourself? How well do you understand others? Can you adapt your behaviour in order to relate better to others?

Another area is clarity of purpose. Are you crystal clear in all your internal planning and all your interaction with the marketplace? What exactly is it that you are offering and is it a compelling proposition?

A third area would be price integrity. Are you genuinely creating the perception that investing in you is a worthwhile decision for the prospect? As a result are you commanding the fees that you deserve? Or, operating as a “registered charity”?

We will consider each of these components in future articles.

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#1: Part One: Building your business as an independent consultant

Business start-up. New Business. Working independently. If any of these phrases refer to you then please read on. If you have aspirations to build a successful consulting practice, it helps to have some form of framework to ensure that you have a balanced model which will enable you to achieve sustainable profitable growth. You can find detailed advice in From Crew to Captain, but the basics are laid out here.

In this article I will highlight an overall framework to give some context to your planning. In future articles I will go into more detail on each of the constituent parts of the framework.

At the highest level a sensible and pragmatic framework would probably have 3 components:

  • The Consultant Role
  • Selling Consultancy Services
  • Delivering Consultancy Services

The Consultant Role

In terms of the Consultant role, you would firstly reflect on the key challenges which you would face as a Consultant; you would then move on to consider the different consultancy models which you could follow (eg subject matter expert, sector expert, change agent…), and decide which is the best one for you; and finally you would look at the key success factors which would determine whether you were going to prosper or merely survive. Do you know what you’re doing? Do you know how to do it? And how do you know if it’s working?

Selling Consultancy Services

Selling Consultancy Services is quite often the area which gives most cause for concern, as people are comfortable with their ability to deliver, but less confident that they can win the business in the first place! You would start with analysing routes to market – how many do you have? You would then define a sales qualification process, designed to convert strangers into cash in the bank, whilst weeding out potential timewasters and bad debts. Finally you would consider how to tender professionally for work.

Delivering Consultancy Services

Delivering Consultancy Services is critical, as this is where your reputation will be won or lost. Retaining clients is No1 priority. If you create happy clients not only are they likely to use you again, they will refer others. Personal Branding is also important – is the image you present to the marketplace consistent and coherent, irrespective of where and how you interact with your clients? Lastly, an appreciation of strategies for success and strategies to avoid is also helpful!

So, now we have an overall framework, we can build on. Find out how these various components can be developed by following these articles, thereby enabling a flourishing practice to be built or contact me for quicker results.

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#4: A “heads-up” for the founder

We have already talked about some of the signs that a business needs to change if it is going to grow, and it is almost inevitable that the change has to start close to home i.e. with the founder. He or she is normally so busy running the business that there is no time to consider taking on additional staff (even if the business can afford it), or if staff have been taking on, there is no time to offer them the strong leadership which they probably need.

There are therefore 2 issues be tackled; firstly, how do you feel about letting go, and trusting others with aspects of the work, and secondly, assuming you can come to terms with this, how do you go about doing so and continuing to feel ok about it?

You will not be the first person to have experienced this dilemna i.e how do you grow the business and give your fledgling team a sense of direction and common purpose? A good starting point would be logging how you spend your time in a “typical “ week. This could give some initial pointers as to how effective your time management is.

A second stage would be looking at the list of tasks and identifying:

  • What absolutely has to be done by you
  • What could without delay be passed to another member of staff
  • What could be passed to another member of staff subject to the requisite training
  • What could be outsourced to an external supplier or service provider
  • What probably did not need to be done at all!

As part of this you can also factor in :

  • What you enjoy doing
  • What you are good at
  • What you do not enjoy doing
  • What you are not good at.

You can then start to make some informed decisions about how you free up your time. You can also use this as an opportunity, if you haven’t done so already, to create processes for different roles and tasks, so that work can be done consistently on a repeat basis to the standard you expect.

You can progressively ease yourself out of jobs as you create a related process and are satisfied that the person assuming that task is comfortable taking it on. Don’t forget that they may initially need your support in this activity – throwing them in at the deep end may not be the best strategy!

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#3: Managing expectations

It’s often helpful to be able to position yourself in terms of how far you have come. Not only can you benchmark yourself against other small businesses, but you can see what lies ahead on your “Darwinian” journey, and begin to plan accordingly.

There are a number of small business frameworks in existence, as the topic has fascinated researchers for a long time. One which has stood the test of time is “The Five Stages of Small Business Growth” by Neil C. Churchill and Virginia L. Lewis, which featured in the Harvard Business Review in 1983! I personally like it because it breaks the journey in to logical phases :

  • Existence
  • Survival
  • Success 1 – Disengagement (maintaining a profitable status quo)
  • Success 2 – Growth
  • Take-off
  • Resource maturity

It then addresses and characterises each stage by an index of size, diversity and complexity, and described by 5 management facets:

1) Managerial style

2) Organisational structure

3) Extent of formal systems

4) Major strategic goals

5) Owner’s involvement in the business

It is relatively easy to position yourself on this continuum and therefore consider what is going to happen next.

Another favourite of mine is Leading at the Speed of Growth by Caitlin and Matthews. This explores a similar journey, but sets out the different stages in a, for me any way, unique manner. Based on research with over 500 entrepreneurs, it depicts a very concise and clear picture of what is happening at various stages of growth, including:

What are the company goals at this point?

What characterises the company?

What “Red Flags” are out there – i.e warning signs that all is not well and something needs to change?

Dangers of not changing

Leadership role

Critical responsibilities of the leader

Personal changes required

The book is full of great anecdotal evidence of the benefits of acting on such dynamic benchmarking, and the potential downside of ignoring the warning signs and carrying on regardless.

So, a useful exercise for you to do, as part of your taking stock, is to check where you are, how far you have come, what you need to keep doing, what you need to stop doing, and what you need to start doing. You can therefore increase the chances of making the right decisions at the right moment and thereby put the odds in your favour that you get the right result.

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#4: Start-up mentoring

When starting your own business it’s important to have the right attitude and mindset which can be enhanced through finding the right mentor.

Start-up Attitude and Mindset

I have repeatedly seen with other people that if you have the right attitude and mindset to make the adjustment, and you also have a business idea that makes sense, then normally it’s a case not of whether you are going to be successful but how long it is going to take. If people have ticked both those boxes and then applied themselves the right way, with 90% perspiration and 10% inspiration, they eventually make their own luck and things start happening for them; the big question is how long it will take, and can you fund yourself for that period of time.

Business Mentoring

I have seen a direct correlation between people who employ some kind of mentor and people who don’t, in terms of their success as they go down this route. People who have a mentor from day one seem to find it easier generally to get going than people who don’t. It can be different things for different people depending on you, the business you are going into, the business skills you have and so on. It could be somebody you already know, where there is a significant level of mutual trust and respect, where you can open up to this person in confidence and where they can be that wise head or wise old owl whom you can use as an impartial sounding board. This person could be found in your social network or in your existing business network, such as LinkedIn.

This is exactly why David Mellor Mentoring exists to help start-ups maintain the right attitude and mindset. Find out more.

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#3: Perseverance, Tenacity and Determination

Perseverance, tenacity and determination are essential qualities if you’re considering starting up your own business.

I thought I’d share a couple of stories with you. You can find more like these in From Crew to Captain but they give you the gist of just how important it is to persevere when starting up your own business.

I am a big fan of golf, and I remember hearing a story which concerns Gary Player. Gary Player was at his peak the same time as Arnold Palmer and Jack Nicklaus. They were the big three at the time and they won many of the main trophies between them. Gary won one particular tournament and in the post tournament interview with the media one of the journalists was brave enough to say to him “do you think lady luck was on your side today?”. The answer, reportedly, was: “It is a really funny thing but the more I practice the luckier I get”. I generally believe it is true – the more you work at something, the luckier you get and things break for you, so perseverance and tenacity are really important.

Pablo Casals was arguably the greatest concert cellist the world had ever seen and I remember hearing him being interviewed in the 1970’s. He was asked: “you are in your 80’s and you are acknowledged as the world’s greatest concert cellist, but rumour has it you still practice for 8 hours a day; why do you put yourself through this?”. His answer: “I keep getting better”. What an unbelievable attitude from somebody in their 80’s who has not got to prove anything to anyone. I see people out there, day in day out, who have that kind of drive. People who have that level of determination, provided they have an idea that makes sense, are going to make things happen.

There are more stories and personal testimonies in From Crew to Captain .

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#2: Increasing profitability

So, you’ve proved that your business model works, and you have broken through the first barrier – achieving breakeven!

Now the focus turns to achieving sustainable profitable growth, whether your ultimate aspiration is a trade sale or merely an orderly winding-down when you have decided that it is time to move on. Creating a strong business gives you a degree of security and offers you choices.

The Ansoff matrix (below) is a very helpful way of helping you to gather your thoughts on how you could go about increasing revenue and profitability, as it enables you to consider both the short and medium term options.

New Markets

Market Development

  • Maybe now sub-sectors of your existing markets
  • Risks associated with new markets and channels, but nevertheless can be attractive

Diversification

  • High risk because both products and markets are new
  • Needs rigorous testing and piloting

Existing Markets

Market Penetration

  • Take from Competitors
  • Capture growth in market
  • Difficult to increase a high share

Product Development

  • Attractive if strong market share
  • Through acquisition of partnerships, to capitalise on strong market presence and distribution paths

Existing Products

New Products

The bottom left hand box (Existing Products to Existing Markets) is all about improving performance in the short-term with your current business model. To make this happen you can work on one or all of the following 3 strategies:

a) Cut costs
b) Increase prices
c) Sell more

Obviously if you can achieve improvements in all three of these areas, however marginal, if can already make a marked impact on your performance.

In terms of costs, it is worthwhile doing a cost audit say every three months. There is nearly always somewhere where you are leaking some cash, so can you plug the hole , without cutting in to “bone and muscle” and unnecessarily handicapping your business.

Turning to increasing prices, do not necessarily assume that there is an automatic link between price and cost. This obviously is linked to how price –conscious the market is, but it is surprising how often you can use your differentiation on quality of product or service to command a slightly higher price.

Finally, there is selling more. This is probably the hardest strategy of the three to implement. A review of your marketing mix (both offline and online) might be a good starting point- is your message “spot-on”, and is it reaching your desired audience? In reality what you have to come up with is something about what you do that can help you take business away from the competitors in your current marketplace.

When you have exhausted possibilities in this area, you need to look at the medium-term options, which are represented in the three other boxes in the Ansoff matrix:

  1. Top left – Existing Products to New Markets
  2. Bottom right – New Products to Existing Markets
  3. Top right – New Products to New Markets

These all carry a degree of risk (and cost), with the top right box being the high-risk option, as you have doubled the “unknown” factor. It makes sense to research and analyse the other two options first, and I would suggest that you then prioritise one of the two, so you can concentrate your firepower and avoid becoming too diluted.

It is for you and you only to decide whether you want to stay in your comfort zone (in pontoon terms “stick”) or move forward to more of a value business (“twist”).

Assuming you are deciding to move forward as opposed to adopting a holding pattern, then whichever direction you choose to take, make sure that your preparations enable you to expand with “eyes wide open” as opposed to “eyes wide shut”!

Posted in: Growing Businesses

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#1: Characteristics of a growing business

Growth can be characterised in several ways – sales, profit, employees, but whichever way you look at it the underlying driver is likely to be that the founder wants to look beyond funding his or her lifestyle and set their eyes on value creation.

It all begins with the owner-manager taking the leader’s role. He or she will undertake activities based on the desire to make their dream happen; they will take calculated risks, work hard, control pretty much everything, and aim to have fun. They will gradually assemble tools and methodologies to help them work smarter not harder. And they will be driven by achieving results that demonstrate value is being created.

But certain pressures start to build as they move from comfortably funding their lifestyle. Some of the warning signals are:

  • Not enough time
  • Pressure on product and market development as customers demand more of you
  • True experts needed to fill big gaps in functional expertise
  • Competitive heat as others respond to your presence
  • Your people don’t feel empowered but you don’t think you are micro-managing!
  • No one shares your sense of urgency
  • The business is beginning to control you rather than the other way round
  • Management information is becoming neither timely, relevant or meaningful
  • Product and client profitability are becoming unclear
  • Cash management is getting more complex

You may recognise some of these!

There is also a Darwinian process at work. Darwin realised that life forms needed to reproduce to survive, and that regularly there were more than the environment could support. A lack of resources put pressure on population size, which led to increased competition, and some would not survive. Furthermore, those who died were not totally random; the more suited were the more likely to survive. So there was a “weeding out’ of less suited organisms leading to the survival of those better suited. In other words Darwin deduced that organisms evolve over time.

We therefore have two separate ‘streams’ to consider:

  • The growth stages of our business
  • The evolution of the founder’s role at each stage

Note – we already believe that it’s not how fast or smart we are…it’s our ability to adapt that determines whether our business – and ourselves – will survive!

We will look at these stages in future articles, but for the moment let us just consider some of the characteristics of successful business, who have figured out the need to evolve and adapt. Typically they:

  • Have a clear strategy and vision
  • Know when and how to exit their business
  • Organise their business around systems, not people
  • Know how to recruit and retain people
  • Know their market position or niche
  • Have an efficient “sales machine”
  • Plan and control their finances
  • ‘Manage’ rather than ‘do’
  • Have an effective board structure
  • Seek advice

You may want to benchmark yourself against these and check how you are doing.

Good luck!

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