The launch of the Tomorrow’s Business Owners Report

Today, with Tomorrow’s Company, the IoD and Lord Young we launched the Tomorrow’s Business Owners report. Below is my speech introducing the report. Thank you to those who came.

“Thank you to Simon, to Lord Young and to Mark. It is a real privilege to be here to mark the end of the writing of this report and to begin the next path on the journey.

I used to think of myself as fast, entrepreneurial and decisive but in reflecting on what to say tonight I have realised that this report has been 18 years in the making, a year in the writing and 2 years in the launching. So, perhaps I should start to think of myself as determined and thorough! My wife would definitely say slow!

Tomorrow marks the 18th anniversary of when I met my first business partner, a journey which saw the creation of 2 businesses, over 80 jobs, rapid growth, the promise of riches and numerous disappointments. In our time together, we put over 400 candidates through NVQ qualifications, opened 8 health clubs, turned down an approach of £12m and 2 years later put the business in to administration.

After a year in, what I like to call “rehab” on an MBA at the Cranfield School of Management, the journey shifted. I joined Telos, a business committed to helping its clients create sustainable success, and one that had formed after the original Tomorrow’s Company enquiry by the RSA.

This not only provided me the opportunity to work with a rich variety of international global corporations, but it has also provided me the opportunity to work with over 500 ambitious business owners on growth programmes, helping them in the process but learning huge amounts along the way.

In 2010, as part of the celebration of the Telos’ 10th anniversary, we decided to capture the learning of our first 10 years.

Whilst other colleagues did this for our global clients, I chose to do this from the perspective of our work with ambitious business owners and in the process, we reconnected with Tomorrow’s Company.

When we set out on the journey to write the report, we were keen to understand and highlight what distinguished those who did from those that did not.

We interviewed people and ran numerous workshops. What began to emerge was a journey from inception to exit. These themes were developed and further evolved in more workshops and what seemed like an endless editorial process, thank you Pat and Jaishree for your help and patience.

The end result is a report that summarises the stories of hundreds of business owners and the essence of what it takes to create, establish and grow a successful business. It looks to describe the differentiators at each step along the way. It offers no answers but instead looks to challenge people to think longer-term and ask some important questions.

It is certainly very appropriate that the writing of this report symbolises the very essence of running, establishing and growing a business – it was a real rollercoaster, there were no short-cuts and it all took a lot longer than we thought!

So what of the journey?

The journey seems to pass along and through 7 key steps, so let me talk briefly about each of those.

Starting the journey
They say curiosity killed the cat but it seems that it makes the entrepreneur.

Of all the success stories that we have seen over the years there is one thing that connects the founding moment – it was born from a question rather than a dream.

Perhaps my most favourite story to illustrate this comes from a friend Eyal, who, on standing in a queue, papers in hand, applying for his visa to the UK, realised that his CV was the only thing that was never truly verified. It sparked a question, was it possible to verify the facts on a CV and provide a stamp of authority?

Ten years on, Verifile is now one of the most well-renowned employment background checking services within the UK.

Making it happen
A business doesn’t start the way it ends. The original idea always evolves. The vision at that start is often hazy. It is more of a direction or an energy than a clear picture of the end result.

In talking with Tristram Mayhew of Go-Ape, I have always been struck by the story he tells of going to the Forestry Commission, with this mad idea to get people to live more adventurously and swing through the trees! He was asking permission to run the first Go-Ape site in one of their forests and if it was successful, he wanted an exclusive deal on the next 5.

Their response? If you can make one successful, we want you to do it across all our forests. Out of the conversation popped a vision to have 40 sites across the UK!

It would appear that an open exploration of the question with others builds the energy and momentum required to help an idea take flight. Success appears to be borne from a process of solving small problems before taking on the bigger ones.

Maintaining a driving ambition
It is ambition, a strong sense of dissatisfaction with the current state combined with a belief that it can and must be better, that drives a business forward.

The process of running a business wears you down, your attitude to risk changes over the years, there comes a point when you have more to lose than win. We have met many businesses owners who have built successful businesses, only to stagnate because of these facts.

Those who master this task and push on seem to use life’s milestones to drive them on to the next level. In doing so, they find a way to maintain a youthful driving energy and combine it successfully with the wisdom of experience.

Take John Maxted’s example, who founded and grew Digby Morgan an HR recruitment consultancy which he sold to Vedior in 2008. He describes his business in two distinct phases, the hedonistic phase and the heritage phase. It was his 40th birthday that shifted his approach. Subsequently, it was his 50th birthday that marked the start of his exit process.

Each milestone fuelled his ambition further, he drew upon the experience gained and brought younger energy into the business to provide the drive that was required.

Building resilience to crises
Crises are inevitable in business, they also stimulate growth.

Creating personal and business resilience to these crises and learning to sail on the changing tide is critical to the achievement of continued growth.

Every successful business has stared disaster in the face. Early warning systems, the ability to confront brutal facts, and the courage to adapt are common to all the success stories that we have observed and seen.

Perhaps, none more so than Vivian Woodell of The Phone Co-op. Telecoms is a tough industry to start a business in, particularly if you are trying to do it through a different business model to the norm and starting from your own bedroom.

The fast changing environment and saturated industry has required the business to be innovative and adapt to the new challenges it faces. In recent years, it has continued to grow its phone and broadband business successfully, but has also begun the move into other utility growth products, for example solar panels and renewable energy.

In doing so, it has predicted future challenges before they have arisen, maintained a clear sense of purpose and values and continued to be entrepreneurial in its approach.

Learning to lead
Many business owners change the title on their business card as the business grows but very few manage to adopt the behaviours required for their new role.

Learning to act and behave as the MD, CEO or Chair of your own business is the most fundamental and challenging aspect of achieving success. It is like weaning yourself off the drugs of your previous role.

Perhaps our most prevalent successful example of this, is Sir Richard Branson. Love him or hate him, he has managed to extract himself from the business whilst maintaining a strong influence on the purpose, values and vision.

Very few can claim to have done the same to such effect.

Holding yourself to account
Owning, leading and governing your own business comes with a great responsibility. Behaving as a good steward is critical. The act of creating formal and informal ways to build accountability for thought, action and result is an absolute necessity.

Over the last 3 years, we have partnered with Kent Business School to provide intensive support to local businesses. Getting them to think longer-term, to write down their plans, to communicate and involve their staff, and to revisit and report on their actions.

Whilst, relatively early on it is journey, over the last year this approach has not only generated an average increase of 19% turnover and 13% employment, but it has also significantly increased people’s ambition and enhanced their leadership capabilities.

An added benefit has been to provide a stronger link with the university allowing the businesses to access the rich resources that sit within. Something I am sure Lord Young will be pleased to hear.

Much of these benefits have come from the simple process of having an outside sounding board that supports and challenges the thinking of the business owner.

So, on to our final theme.

Creating a successful exit
Of the business owners that we have met who have successfully sold their businesses, many are rich and unfulfilled. In their stories you sense an element regret and remorse.

For those who you don’t, it appears that they recognised it was the right time to go, they knew what they would do next and the transition was deliberately managed.

In a conversation with Richard Salvage, who sold his business Shield Medicare in 2006. He told me the story of turning down the original offer because he realised that he wasn’t ready to sell.

He spent the next few years, putting in place the team to run the business, incentivised them to work beyond the finish line of the exit and worked out what it was that he wanted to do next.

When he was ready, the offer on the table had significantly increased!

Perhaps exit should not be viewed as selling the business – perhaps it should be about creating options for the business to live out the founding principles and finding the right leadership and ownership for the next stage of growth.

The focus can then be on building a strong business, whilst exploring how and when the transition will take place.

For me, the essence of these seven steps highlights three key messages: the importance of purpose and the absolute clarity on why; the constant need to pass on the baton relinquishing control and empowering ownership within others; and, the ongoing requirement to answer the question what next?

It has been a rich and challenging journey to get here. We are forever grateful to all those business owners, who lent us their stories for the report and helped to create the toolkit.

Exploring the question has grown a stream of work for the SME practice of Telos Partners, one which is growing, currently supporting the growth of over 50 ambitious business owners, partnering with academic institutions, banks, accountants and solicitors to better support local businesses.

And we are taking on people ourselves, so the journey continues and is now focused on delivering and understanding impact.

Thank you for taking the time to come along today to find out more about the report. Thank you to all those at Telos and Tomorrow’s Company who helped. And thank you to the IoD and Lord Young for your support tonight.

Now, I’d like to hand you back to Simon.”

Unlocking the performance of your team

There is overwhelming evidence to suggest and promote the benefit and commercial value of team work, yet many ambitious business owners struggle to find the time to work on this important aspect of their business.

  • Why is this the case?
  • How have others unlocked the code?
  • What steps could you take to start getting world class performance from your team?
  • These were just some of the questions we were looking to answer at our Thames Valley Cog:ent Group meeting on 10 October 2013. If you missed out on the event, you can read the slides from the event by clicking here. If you would like to explore your own leadership and team dynamic, please email your details to tlindsay@telospartners.com.

    So, why is it, seemingly, so hard for ambitious business owners to build and develop world class teams?

    Well, the answers appear to lie in the evolutionary and organic process that creates and grows ambitious, owner managed businesses:

  • a focus on survival, making do with we have got and dealing with the day-to-day aspects is a stark reality for many ambitious business owners;
  • a reality which, coupled with a lack of budget and capacity/capability to spend the time on the team often means that the development of individuals and the team takes a lesser priority than many other activities in the business;
  • something which is frequently exacerbated by the (understandable, but inhibiting) characteristic of many business owners to control and direct rather than empower and lead;
  • the result is, all too frequently, a team that is unable (or fearful) of taking responsibility and a business owner who is frustrated with their own ability to unlock the potential of the team.
  • What can we learn from business owners who have tackled this challenge? What does it take to break out of this dynamic? How have we helped and seen others succeed in this task? What does all of this mean for you?

    Recognise your own strengths, then build a team to complement
    Your team is what it is because of you, and will become what it can become because of you. Look to your own strengths and weaknesses and build a team for the business, around you.

    Understand, articulate and model your values
    Experience shows that it is not just capability that you need in your team but a common and shared set of purpose, values and beliefs. It is not good enough just to write them down, you need to model them, test for them at interview stage and renew them on an ongoing basis.

    Vive la difference
    Contrary to the popular belief of many business owners, you do not have all the answers, have a monopoly on good ideas, or even know how it should be done. Of equal importance is diversity in approach, skills, personality and thinking. Constructive difference can and will deliver better results in the long-term.

    Trust the one you love and love the one you trust
    At the heart of a successful team is trust. Something that develops and builds over time. The more trust that you have in others, the more they have in you. If you can trust yourself to delegate and manage people, you will learn to trust that they can deliver for you. If that trust is missing in the first place, you might have some tough questions to ask yourself.

    Take time to develop the team
    What might you discover, if for a moment, you pause the task and review what is going on for individuals and for the team? What questions might you ask? How might your understanding of the task be improved by really hearing the answers? The dynamic and complex nature of relationships, means that developing performance within a team takes time. Expect to go through different stages of development. Periodically, take steps back to review what is going well and what can be improved, so that you can move from one stage to the next.

    Recognise your role in developing the team
    It is easy to point the finger of blame at others, and you can be guaranteed that most people blame the leader! Recognising what the team needs from you, and being able to provide it, is critically important.

    If you want trust, become comfortable with being vulnerable. If you want mastery, be prepared to encourage conflict. If you want commitment, don’t be afraid ask the group close down options. If you want accountability, get ready to tackle some difficult issues. And above all, keep the team focused on outcomes and results.

    Tough love
    Finally, don’t believe the myth that high performing teams are soft, fluffy places where everyone loves each other. The best teams can be tough and challenging as well as fun and supportive.

    Based upon our explorations of this theme, these are some of the questions that we would ask of you:

  • What is it that you do best?
  • What is it that only you can do?
  • What else does the business need for it to be successful and sustainable?
  • What needs to happen to build trust within, and amongst, the team?
  • To what extent do you have common agreement on your purpose, values, vision and short-term objectives?
  • What does the team need to deliver better results?
  • What change do you need to make in your own approach?
  • If you are interested in discovering more about how we can help you to unlock the performance of your team, please contact acampbell@telospartners.com.

    You might also wish to read the theme, from Entrepreneur as Leader

    Participants also had the opportunity to find out more about an HSBC initiative for which, like Cogent, the real value is in taking part. For more information, please read below.

    Global Connections

    At HSBC we believe some of the world’s most ambitious, dynamic and forward-thinking companies are right here in the UK.

    Over the last three years, we have run the Business Thinking and Global Connections competitions to recognise and reward those businesses, giving entrants access to a total of over £3bn of lending to support their ambitions for growth.

    In September we have lauched our fourth national business competition, providing entrants with a unique opportunity to meet and network with like-minded business leaders.

    Our 45 regional finalists will also be able to gain invaluable insights on visits to some of the world’s fastest-growing markets as part of our International Exchanges.

    This year’s Global Connections competition has launched on 16th September, again giving entrants the prospect of accessing up to £6m in lending.*

    The competition is open to all UK businesses that have been trading for a minimum of two years with aturnover between £2m and £100m.

    Visit http://www.hsbc.co.uk/globalconnections to take advantage of this unique opportunity and begin your application.

    Relationships make the world go round …

    … and are the source of Business Improvement and Growth

    Can you think of a business that could exist or sustain growth without a set of successful relationships?

    No? Nor could we.

    Yet often, in our work, we come across business owners who appear at the mercy of the relationships that they have with customers, with suppliers, with staff or with finaniciers. You’ll find them battling hard to make things work, scurrying around chasing their tails, desperately looking to please anyone and everyone, almost accepting that this is the life of the business owner.

    Occasionally, we come across someone for whom this is not the case. They are seemingly more in control of themselves, clearer on what they are looking for, better able to establish, build and nurture a diverse range of relationships, and are open and trusting in their approach. As a result, they appear to obtain greater value from these relationships socially, intellectually and financially.

    We were left wondering:

    • What are the secrets of a successful business relationship?
    • Can ambitious business owners benefit from being more strategic in their relationships?
    • How might you change the dynamic within the set of relationships that you have?

    So, as part of our partnership with Kent Business School, at the Business Improvement and Growth Network session on 4 October 2013, we set about beginning to discover the answers to these questions. We trawled the hallowed archives of academia, took on board the findings of our own research, considered the challenges that our client base is facing, reflected upon our own experiences and brought together 9 ambitious business owners with a former head of R&D for a FTSE 100 corporation and our own team. What follows is a snippet of the things that we uncovered …

    The value of analysis

    Amidst the daily stresses and strains of the business roller-coaster, it is a real challenge to take a step back and analyse where things are working, and where they might need some attention. But, if the experience of our group of ambitious business owners is anything to go by, simply reflecting on one relationship that works and one that doesn’t throws up some interesting insights.

    Not only that, but taking a step back and analysing all of your business relationships seems like a worthwhile activity too.

    So, before reading the rest of this article, read the slides, the comments from participants, and review the relationship recipe and diagnostic. Then grab yourself a cup of tea, take a seat and have a go at reflecting on your own set of relationships.

    131003 BIG Network_creating value through relationships – slides

    Please feel free to share with us any insights that you have.

    The danger of assumptions

    When asked why business relationships fail, for the participants of the meeting at least, it would appear that the phrase ‘assumptions are the mother of all *#*# ups’ holds true. Whether it is: differing expectations; undelivered promises; communication let downs; leaving it too late to have the conversation that is really needed; or, only focusing on building one key relationship, the heart of relationship failure appeared to comedown to a poor and growing set of unchecked assumptions. Reversing this may be the secret of success.

    Take a human approach

    How many times has your view of a person changed when they’ve told you what they do?

    • “I work for a charity”
    • “I’m cabin crew for a major airline”
    • “I’m a stay at home dad”
    • “I’m the trade union representative”
    • “I’m a potential customer with a budget of £250k that I might spend with your business”

    It is funny how we our reaction and behaviour are coloured by this type of information. But, how would you treat each of these people if you didn’t know this information? As a human being, we hope!

    Everyone you deal with in business is a human being, no surprise there! They have the same set of delights and challenges. They all have dreams, fears, personalities, good days, bad days and lives outside of work. They are all the same, and are all different. They will value someone who they get along with and who helps them on their path in life. So take an authentic, human approach, by taking a moment to put yourself in their shoes.

    Just don’t assume that they will want to be sociable and friendly! Not everyone is that way inclined.

    Establish mutual value

    “Win-win” is one of those godawful phrases that makes you cringe. Yet, in our exploration of this theme, it’s underpinning merits shone through brightly. Relationships only seem to sustain themselves, even bad ones, if they somehow provide some source of mutual value.

    Whether it is simply making their lives easier, or providing a ground breaking service that radically improves their business, if you want a business relationship to survive and thrive it makes sense that you will need to create value for the other party. But, what about you? Have you stopped to consider what you really want from the relationship? To what extent have you made this clear to the other party? Have you let the assumptions build up, again?

    Develop trust step by step

    Trust is fundamental to any successful relationship, so how do trusting relationships develop? A step-by-step process of delivering on promises, matching expectations and ensuring there are no surprises.

    From the way you get in through the door (a recommendation or referral builds the most trust at this stage); through doing what you said you would do, at and after the first meeting; by communicating and sharing good and bad news; on to delivering and reviewing the work; each step or action taken is an opportunity to develop and build trust. The more trusting the relationship the more chances it has of being successful in the long-term.

    At multiple levels

    In our exploration of the theme, participants discussed many examples of successful business relationships that disappeared when a key contact moved jobs. To mitigate this risk, but also to enhance the chances of success, it is critical to broaden the set of relationships that you have, at all levels of the business. Whilst one person may have the responsibility, it is rare that they are the only person involved in the making of a decision or the fulfillment of a project or service. Building trusting relationships with all of these key people is a fundamental and challenging part of the task.

    It’s alright to be appropriately commercial

    A familiar path of many personal relationships sees one party taking a higher role, for example you take the partner of your dreams on a first date; confidently take the bill, paying it before their eyes set firm on the extortionate amount; then court them with impromptu gifts; you marry and honeymoon in dreamlike location; have kids; and privately worry about paying the mortgage, stress about the money and become resentful about feeling like a ‘walking wallet’ … an extreme example we know, and we are am sure you are all more balanced than this. What would have happened if at the start of the relationship they had split they bill? We’ll never really know, but there is a point … honestly!

    Many business owners will shroud a commercial conversation in a veil of mystery and intrigue, discounting the price, or hiding away their profit, before even having the conversation to deal with their feelings of guilt. But, it turns out that the opposite should be true for a successful business relationship. You’ll be surprised to learn that it is in the interests of your customer, supplier or member of staff to know that you are also making enough (but not too much) money.

    Nirvana is indeed a transparent commercial conversation. In fact, successful business relationships have a commercial imperative. If only corporate procurement processes and tenders could indeed deliver this!

    Sometimes it‘s right to be transactional

    Finally, it’s worth acknowledging the often misrepresented ‘dark side of business relationships’. Not every relationship needs to be deep and strategic, your portfolio of business relationships will and should have a mix of strategic and transactional to serve and meet a variety of needs.

    It is alright for people to just want: baked beans on toast; to avoid the chit-chat with the cashier at the supermarket check-out by using self-service; to get the lowest price; to transact online. For them it represents a win, and if you can find a way for it to win with you too, you might be on to something good!

    Concluding remarks

    So having explored the theme in more depth, we are looking forward to establishing the impact of the actions that our 9 intrepid business owners set for themselves. Until then, here are some of the questions would we suggest that you begin to answer for yourself:

    • Who are/should you be building relationships with now, and in the future
    • How would you assess the current nature of these relationships?
    • To what extent have you checked your assumptions?
    • What is a successful outcome, for all parties?
    • What action needs to be taken to achieve these outcomes?
    • How will the first action that you take help to build trust?
    • What systems do you have in place to manage these relationships effectively on an ongoing basis?

    If any of the above has sparked your interest, please get in touch with acampbell@telospartners.com

    For more information about the Business Improvement and Growth Journey, please visit click here.

    Holding yourself to account

    All of the themes we explore have one thing in common – they seek to understand what drives success for the ambitious business owner, in the long-term.

    We first wrote up this theme three years ago, to this exact date. We explored it again, in more depth, at one of our Compass Meetings, 18 months ago. And, last week, it was the topic of conversation during the BIG Network that we run in collaboration with Kent Business School. A pattern seems to be emerging, but what is the learning?

    The first point of learning, is that whether informally or formally, successful ambitious business owners seem to find ways to hold themselves to account. But for what and to who?

    • ultimately to themselves and for the purpose, values and vision of the business – but also to their customers, staff, suppliers, etc.
    • in pursuit of this, having a plan with some longer term goals is a critical part of being held to account – it must be reviewed and updated regularly.
    • and, of course, being the best CEO/MD/business owner that they can be, playing to their strengths and adding value to the business now and in the future.

    Perhaps the most interesting and surprising learning is how hard this can be for people with an entrepreneurial character. So whether it be a coach, a mentor, a board / non-exec director, a growth club, a business planning and review cycle or their mates down the pub, it appears that they often seek and require some outside help:

    • “left to your own devices you will repeat patterns and get stuck”
    • “constructive challenge from an outside, objective view can enhance your clarity of vision, strategic direction and ability to lead
    • “coaching can really help you reflect on what is happening and what you want to happen – mentoring can help you access knowledge and experience on how to make it happen”
    • “it might seem counter-intuitive for a business owners drive for independence but used well it will actually promote this independence”

    But the use of external support comes with some warning,

    • “if you have a board you must invest time into the relationships – personality clashes can distract and detract – the relationship between Chair and CEO is a critical one” (click here for more information)
    • “finding the right people is hard and potentially harmful – take your time picking the right one – be clear about what you are looking for”
    • “you get out what you put in”

    Whatever the method it must continually encourage progress – to challenge and to promote learning:

    • “recognise and change behavioural patterns that inhibit progress, sometimes all it takes is a dumb question to stop you in your tracks”
    • “to avoid complacency, we need fresh perspectives as business grows – we must refresh the process of accountability”
    • “regularly review, adapt and agree the terms of reference for the relationship”
    • “recognise the informal processes that you all ready have – find ways to use them better”
    • “must do it but have a choice of methods – choose one and make it work for you”

    In exploring this theme further, the following questions appear important to ask:

    1. To what extent do people in your business have a clear and common understanding of your purpose, values and vision?
    2. How often to you review and adapt your plan for growth?
    3. How do you set goals and appraise performance for your own role?
    4. To what extent do you model the behaviours you wish to see within your own business?
    5. How will you independently challenge and verify the above?

    The characteristics of sustainable success

    At our Cog:ent Group meeting on 18 April 2013, run in partnership with HSBC and Chantrey Vellacott , we will be exploring the key characteristics of sustainable success for ambitious business owners.

    These characteristics are drawn from practitioner observations and academic research with over 1000 business. The work has resulted in a range of complementary and overlapping themes:

    These themes will be explored further at the meeting. For some more background information, please click on each of the links above.

    The journey of the ambitious business owner

    The following themes summarise our learning and key observations drawn from years of working with hundreds of business owners.  They look to identify what is required to create success for an ambitious business owner who is keen to create a business that builds a heritage and thrives from generation to generation.

    These, and further themes, have been developed and explored in depth through our work and at our regular Compass Meetings. To view them in presentation format please click on the link (130409 ABO themes of sustainable success).

    Starting the journey

    What fundamental question or problem is your business trying to solve?

    Curiosity might have killed the cat but it made the entrepreneur. Of all the success stories that we have seen over the years there is one thing that connects the founding moment – it was born from question rather than a dream. Meanwhile, the people we met with the dreams appear still to be dreaming.

    Making it happen

    Who has the problem you want to solve and how can you help them solve it – now?

    Openly exploring the question with others builds the energy and momentum required to help an idea take flight. The process of solving small problem builds the confidence to take on bigger ones. Soon the magnetic attraction to the idea becomes so strong that there is no other option than to make it happen.

    Maintaining a driving ambition

    How driven and wise is your ambition?

    It is ambition, a strong sense of dissatisfaction with the current state combined with a belief that it can and must be better, that the drives a business forward. The ability to maintain this youthful driving energy and combine it with the wisdom of experience is essential.

    Building resilience to crises

    How will you survive and thrive in your next crisis?

    Crises are inevitable in business, they also stimulate growth. Creating personal and business resilience to these crises and learning to sail on the changing tide is critical to the achievement of continued growth.

    Learning to lead

    What team do you need to build, to allow you to do what only you can do?

    Many business owners change the title on their business card as the business grows. Very few manage to adopt the behaviours required for their new role. Learning to act and behave as a CEO of your own business is perhaps the most fundamental and challenging aspect of achieving success.

    Holding yourself to account

    How will you ensure you achieve what you plan to achieve? And, do it for the long-term benefit of the business?

    Owning, leading and ensuring good governance of your own business comes with a great responsibility, behaving as a good steward is critical. The act of creating formal and informal ways to build accountability for thought, action and result is an absolute necessity.

    Achieve a successful exit

    What will allow you to exit with a strong sense of pride?

    Exit is not about selling the business – it is about creating options for the business to live out the founding principles whilst finding the right leadership and ownership for the next stage of growth. The focus must be on building a strong business and exploring how and when the transition will take place.

    If you would like to discover more about our work with ambitious business owners and would like a conversation to explore the relevance of these themes to you and your business, please visit our website or contact adamcampbell@telospartners.com.

    Creating your strategic roadmap

    When asked, most ambitious business owners acknowledge the importance of having a clear strategic plan. And, in our experience, successful growth businesses have plans that they are busy implementing.

    Yet, when we first meet them, the vast majority of ambitious business owners do not have any sort of growth plan. If they do, they have to dust it off before they pull it down off the shelf or apologise for the poor quality drawing as they pull a napkin out of their pocket. Why is this?

    Well the answer is quite simple. Most ambitious business owners are too busy working in the business to work on it. Then, when they make a start, they underestimate the time and energy it takes to create a robust growth plan. And, they often have no idea what they should put in it. As a result, they frequently end up with little more than an extended to-do list.

    So, what will it take you to think and act more strategically? What is this planning lark all about? What should it include? Who should be involved? How do I do it? What benefits can I expect from doing it?

    At our Compass Meeting on 7 March, we will look to draw upon our experience and success in helping a wide range of clients to generate business improvements and growth and clarify their thoughts and to focus their actions by:

    • gaining insight into the performance of their business through staff, customer and supplier feedback;
    • renewing and nurturing their purpose and values in a way that provides a stable and guiding compass for future business decision making;
    • scanning the horizon to understand future scenarios that will impact their business;
    • creating a compelling and inspiring vision, with clear and tangible measures;
    • establishing strategic initiatives and plans that will resource and deliver your growth and help you to keep on track.

    In exploring these elements of the growth planning process, we also hope to better understand the challenges and opportunities that your business faces.

    How to finance the long-term success of your business

    For the last three months, we have been (re)exploring the theme of financing the growth of your business (click here). Our exploration culminated in a fascinating discussion amongst some 30 business owners, advisors and investors, at our Compass Meeting on the 29 November 2012. The themes of the discussion are the content of this blog.

    The Ostrich Complex

    We are all familiar with the image of an Ostrich burying its head in the sand, avoiding the inevitable and difficult situation that it faces. Well, when it comes to financing growth of a business, it seems that many business owners share this trait.

    Money is, at the same time, the simplest and the most complicated form with which to record the value of a transaction. The complication increases when the future value of that money, and its associated risk, is brought into question.  The transaction appears to work best when the parties involved have parity of information and when the exchange meets the expectations of both sides. It fails when these things are not in place – someone ends up feeling screwed.

    Faced with a lack of time, an overwhelming number of options, a desire to stay in control and a self-confessed lack of understanding of deeper financial matters, many business owners shy away from a full and proper investigation into how finance should work for them. Instead, they prefer to wait until someone else suggests an approach, or a significant event forces their hand.

    The conversation highlighted a need for business owners to become more curious: more curious about the full range of finance options; more curious about how each option really works; more curious about the process of obtaining and managing finance; more curious about the risks and benefits of each option; and more curious about the success and failures of others who have taken a well-trodden path.

    Perhaps having satisfied these curiosities, business owners can do what they do best – “trust their gut”. But the most common piece of advice was “don’t wait until you need the money before you act”.

    Multiple levels of why?

    The importance of purpose, in each of the themes we explore, is striking but not surprising. If you are looking for long-term success, it is a fundamental touchstone. Yet the ability of business owners to develop clarity of purpose is often hampered by the maelstrom of activity and thoughts that come with running a business.

    Those who find the most appropriate of financing arrangements take the time to understand and answer the question “why?” – at multiple levels.

    • Why do I really need finance?
    • Why has the need for finance arisen now?
    • Why are the people offering me finance the right people?
    • Why must the business have a long-term future and how does the finance enable it?
    • Why does the business really exist?

    When you explore the answers to the first question, it becomes clear that most business owners talk about the need for working capital finance. In asking for this type of finance, one might easily accuse the business owner of thinking “I’m lazy. I can’t be bothered to manage my business properly. I don’t want to collect my debts on time. I can’t face the hassle of having conversations with my suppliers and my customers to ensure better terms.” However, business owners are certainly not lazy. There is a more fundamental issue at play.

    The majority of business owners have not had the time to explore the issue at a much deeper and longer-term level. They lurch from one short-term solution to the next quick fix. There is a striking need to be clear on the purpose and long-term vision for the business, along with a strategy for delivering these.

    When these things are clear, conversations about finance begin to explore growth and reducing working capital requirements simply become a good thing for business.

    Are you sure you are sure?

    On the surface, this seems to simply repeat the ostrich effect and the multiple levels of why. However, there is a subtle and distinct difference – absolute confidence.

    A confidence that is partially derived from a real belief that it is the right thing to do for the long-term success of the business (the answers to multiple whys) and a deep understanding of the full range of finance options (obtained through curiosity). But, the main source of confidence comes from a personal belief that it can and will work – whatever it takes. Until a business owner has this confidence and belief, they will never find the right source of finance for the business.

    Investors are relentless in their ability to sniff out risk. When they make an investment in an owner-managed business, they appear to attribute more than 50% of the investment decision in their belief in the business owner themselves. They have to trust this person, the information that the business owner provides and the judgement that the business owner displays. If there is the slightest doubt, they will sniff it out”. So you must be sure that finance is what you want:

    • If you had the money, would you back yourself and your business? Then, why are you not putting it in yourself?
    • Why should someone else back you and your business? Then, why are you not putting it in yourself?
    • How will you mitigate the risks concerned? Then, why are you not putting it in yourself?

    What personality does the money have?

    Money might be an inanimate object but the people with it have a personality – yes, even the bankers. Understanding the personality (the motivation and the values) is a critical element of understanding the money. Does the personality fit your business and does your business fit the personality?

    When you are planning to raise finance you need to consider the personality that you want with it. When raising finance you need to tailor the pitch according to the personality of the money. When you’ve raised the money you need to manage the personality to get the best from it.

    Like establishing any long-term relationship, you have to “kiss a few frogs to find a prince” (or princess depending on your preference); spend time courting to build mutual trust; make an appropriate romantic proposal; then keep investing in the relationship to ensure expectations and ambitions are continually aligned.

    The only difference, but a major one, is that investors will want to guarantee their exit! And they will want to understand more about your exit too.

    A curdling separation

    What’s the difference between a professional investor, a serial entrepreneur and an ambitious business owner?

    It sounds like a bad joke, but the answer has a massive impact on the punch line (your ability to realise the value that the initial investment was based upon). The answer relates to the degree of emotional connection that each person has with the business.

    A professional investor may feel personally connected to the decision to invest but has the ability to separate themselves from the business itself. A serial entrepreneur has an emotional connection to the buzz of starting and running a business, but spreads the risk across a number of options. The ambitious business owner is “all in, boots ‘n all!”

    In short, investors always want out, yet business owners often can’t see a way out.

    When you bring in an investor, life is never the same. The boots are no longer just your boots. Whether you like it or not, you become accountable to your investors. Your role is different. The expectations are different. Things are just different. You’ll be forced to think about your exit. You’ll be required to make the business less dependent upon you.

    Rail against it and disaster looms. Work with it and you can put in place the foundations for a long-standing business. However, the process of helping a business owner to separate their personal identity and role from the business is a difficult and challenging one. Bringing in external finance accelerates the process but doesn’t always make it easier or more effective.

    If you genuinely want to build a business for the future that is less reliant upon you, bringing in external finance can be a good stepping stone. If you are looking for something to help fund your lifestyle, take out a personal loan!

    In summary, having (re)explored this theme, and in light of the conversations that we have had, here are the questions we ask you to consider:

    • What don’t you know about the full range of finance options available?
    • How will external finance achieve your long-term goals better than going it alone?
    • What future heritage do you wish to ensure?
    • What are you willing to give up in order to get what you want?
    • What added value do you want with the money?
    • What do you really need the money for and how much do you really need?
    • How do you plan to pay it back? Over what time frame?
    • How do you plan to exit yourself?

    The outputs from the meeting are attached (121204 Compass meeting #9 outputs).

    Financing the growth of your business

    At, and around, our next Compass meeting on 29 November 2012, we are exploring and developing answers to the following question:

    How do you finance the growth of your business, whilst maintaining a sense of self-determination?

    We are inviting you to participate in the discussion and share in the learning.

    Why this question? Well, in our discussions and work with ambitious business owners over the years, there is always a point that is reached where you start to think “do we carry on or, push on”? Pushing on frequently needs some form of investment and adopting new approaches. So in the consideration of this question, we hope to explore:

    • What can ambitious business owners learn from others who are on or have been through the journey?
    • What insights can be gained from those who have helped find or provide the finance?

    And in thinking about the stories we have heard, the experiences we have gained, together, how might we answer the following important questions?

    • How can you increase efficiency within your business, thereby lowering or removing your financing requirements?
    • How much do you need and what do you need it for?
    • What are your full range of options for finding this finance?
    • Is there a way to develop a pro-active and fruitful relationship with a bank? (a topic in it’s own right!)
    • What do you need to consider when exploring external investors, whether they be a individual or a private equity/venture capital firm?
    • What role does crowd funding play now and in the future?
    • How might employee ownership help achieve your goals?
    • What about floating your business?
    • What other options might exist?
    • How do you stay in control of your own destiny, whichever route you choose?

    We look forward to the individual conversations, the on-line discussions and the Compass meeting that will form part of the research and we look forward to sharing with you the themes that develop from the exploration.

    Finding and developing a business growth mind-set

    Whilst it is probably not surprising, we have been discussing the learning from our recent Compass Meeting on attracting and retaining talent, many of our client conversations over the last two weeks have centred on finding people with the right mind-set to help grow a business.

    “I just can’t get them to step up and go the extra mile”

    “I want someone to take on the responsibility”

    “I want to find more people just like me”

    In these discussions we have found ourselves talking about the need to find and develop the right mind-set – rather than just skills, capability and experience. An associate’s mind-set is very different to that of an employee which, in turn, is very different to that of a business developer.

    • An associate may have a mind-set that says something like “I’d like a lifestyle that suits; I’ve got some specific capability; I don’t like selling; I’d like a steady stream of work; who can help me find that?”
    • An employee could be thinking “I want a job but what can I do? I’ve got these qualifications and this experience, I live in this area, who is advertising for work? What are they willing to do for me? Will the pay me more in time?”
    • Whilst a business developer will be trying to establish “How can I make a real difference and feel a sense of achievement? How do I shape my own destiny, control the risk and benefit in the reward? How might this help me accelerate my progress towards my goals?”

    Whilst we do believe in human potential, based on our own and our clients’ experience, it is very difficult for someone with an associate or an employee mind-set to make the switch to that of a business developer. At the same time, most of the ambitious business owners wish they had 1 or 2 people with a business developer mind-set. Instead, they find themselves with a team of associates or employees.

    So:

    • to what extent do your people have the right mind-set to help grow your business?
    • if the right mind-set is missing, how do you plan to find or develop it?
    • what are you willing to give up, in return for the right mind-set?

    To discover more about how we can help your and your business please visit our website or contact adamcampbell@telospartners.com