Archive for December, 2015

Merry Christmas

Wednesday, December 23rd, 2015

Christmas Tree 1


Our elf, Snowflake, is soon to depart for the busiest time of the holidays. May your Christmas for those, who celebrate it be full of fun, happiness and good health.

© James Berkeley 2015. All Rights Reserved.

Resilient Growth

Monday, December 21st, 2015

Why do annual budget discussions reveal so little about the growth prospects of the business and so much about the fears of those running the business?

I have come to observe that more energy is exercised in the haggle and obfuscation between line managers and their direct reports than the value derived from the process.

Should we have objectives and goals? Absolutely.

Should we place greater emphasis on a set of tactical targets that in of itself are arbitrary (based on a “best guess”) or a set of broader strategic outcomes that more profoundly describe what we want the business to look like in 12 months time?

In many high growth, mid sized businesses, where the overriding imperative for the owners is to build equity or transition the business (divestment, IPO and so on) I think there is a compelling case for the latter. Yet that is very rarely the case. The business may have doubled or quadrupled in size but the management focus and discipline and rewards system is largely unchanged (tactical targets).

I come across a lot of strong and dynamic businesses who are in self-congratulatory mode.

Senior Manager: “We have met or exceeded our budget for the last 8 quarters.”

Me: “Great, what SHOULD you have achieved in the prevailing conditions?”

I am met typically by quiet silence or a “what do you mean” response.

My point here is are you really focused on what really matters to the Owners (building equity or preparing a transition)?

Here is a quick set of strategic outcomes, my best clients use to drive their business:

1. Sustained Sales and Profit Growth (over past 3 years).
2. Market-leading Sales & Marketing Processes (array of rainmakers, leverage high tech, increasing market gravity, abundant mindset, room to accelerate growth)
3. Compelling value proposition and market position. (impressive clarity internally and externally about how the firm’s ideal clients are better off or better supported after using the firm’s products and services)
4. High Quality Management & Employees (high level of familiarity, clarity and implementation skills, behaviour and expertise supporting these strategic outcomes)
5. Breakthrough Client Relationship Approaches (acquisition, innovation, retention, profitable growth)
6. Market-Dominating Fees & Value (zero aged debt, 50%+ fees “banked” next 6/12 months, balanced growth, low working capital needs)
7. Intellectual Property Institutionalised (proprietary IP copyrighted, constant creation, internal R&D “laboratory”, systematic approaches)
8. Tremendous Loyalty (seductive rapport with key people, impressive career growth, diverse and dynamic environment, aligned rewards and value creation)

Go back to your 2016 business plans and accountabilities for key managers.

Producing Results Are each of the requisite improvements in each area set in stone? Are there influential exemplars lined up to reinforce this behaviour daily (mid-management)? Is the frequency and quality of performance assessments appropriate?

Rewarding Results Does the rewards system appropriately support or hinder your future health and well-being (bonus, long term incentives, recognition, promotions and so forth)?

I strongly suspect many people will be shocked how loosely the wheels are bolted onto their bus and how susceptible their best laid growth plans are to unforeseen events. Waste no time, take action now if you want to increase your resilience.

© James Berkeley 2015. All Rights Reserved.

10 Non Surprises

Friday, December 18th, 2015
  1. The only surprise about Donald Trump is that the general public, politicians and media are shocked by his comments. Ignore him. Starved of the oxygen of publicity, his campaign and ego will plummet in the polls.
  2. Further revelations this week about FIFA and Mr Blatter, put everyone in a shocking light.
  3. Brazil’s economic contraction reveals incompetence and graft amongst business and political figures, whose success has largely been sustained by others turning a blind eye.
  4. A wealthy UK Conservative Party donor would splash £240,000 for Mrs Thatcher’s red despatch box. (I was in the Christie’s London saleroom on Tuesday, which resembled a Croatian border crossing. Hands in the air, voices screaming feverishly at the auctioneer, who stroked his chin and decided, which sugar plum fairy to pluck the next bid from.)
  5. A high profile hedge fund manager (BlueCrest), whose external suite of funds dramatically under performs their internal funds, closes its’ doors to external investors, claiming its’ difficult to turn a profit in the current fee environment.
  6. The combustible pairing of Jose Mourinho and Roman Abramovich ends in a second divorce and tears.
  7. EU leaders, who have moved in centimetres not kilometres to resolve the euro crisis, re-buff David Cameron’s opening demands to re-define the EU’s relationship with the UK.
  8. AIG’s embattled CEO, Peter Hancock,  fires 23% of senior management in a bid to placate activist shareholders and gets served up even more opprobrium.
  9. Kirill Shamalov, the man who married Putin’s daughter, we now learn made a fortune with the help of a loan from a well-connected bank.
  10. The meteoric rise of Fosun’s founder Guo Guangchang attracts the attention of the Chinese police.

© James Berkeley 2015. All Rights Reserved.


The 10 Traits of A Great Investor

Wednesday, December 16th, 2015

For 35 years since the day I started giving horse racing tips to seventeen year olds willing to lose their pocket money, I have been fascinated by what makes a great investor beyond the obvious (trust). While the skills, and expertise should, and will, vary dependent on the discipline, I have come to observe from watching hundreds of investors that behaviour is arguably the most important factor.

Whether you are evaluating an investor to back your business, invest in their fund, co-invest with them or hire an investor, I think you want to see a high level of the following traits:

  1. Intellectual Curiosity: they have a depth and breadth of curiosity that is unlike most people. Most people have a concentration in particular areas in business, science, culture, sports and so forth.
  2. Commitment to constant learning: they are ferocious in their continual search for new ideas, insights and new ways of doing things that challenge their past beliefs. They assertively find people who have got something to say, aggregate and connect the dots.
  3. Creativity: they are particularly interested in the future, and how that works and what are the change agents in the future. Their inclination is to think, feel and act on lessons learned from past successes, failures, recombinations and so forth and apply that to the future.
  4. Resilience: their beliefs and attitudes demonstrably enhance their resilience. They rebound relatively quickly and they are not damaged “permanently” by losses or failed investment decisions.
  5. Self-esteem: they are able to continually feel good about themselves irrespective of whether they are experiencing success or failure.
  6. Perseverance: they possess the personal focus and discipline to see investments through to a natural conclusion. They are not rolled over by unforeseen events, easily distracted or quit at the first sign of failure.
  7. Love: they implicitly love what they do. I draw a distinction from “blind” or “fake” love. The investor who even though they know it to be wrong ignores reality or feigns interest.
  8. Faith: at the heart of an investor is a belief system and an implicit faith in their own judgement. It is based on a set of shared values, which others will readily sign up to.
  9. Courage: they are not afraid to provoke and indeed, they seek contrarian positions and points of view. They are willing to lead when everyone else sees just fog. For the investor ambiguity spells opportunity, not fear. 
  10. Forgiveness: they don’t hold personal grudges. They are supportive and willingly reward people, who show the right behaviour not just those who achieve success.

You are right if you say there are very few people with this combination of behavioural traits. That is why there are so few exceptional investors. Choose carefully, you’ll profit from reading this before investing a dime, penny or euro.

© James Berkeley 2015. All Rights Reserved.


Agile Management

Wednesday, December 9th, 2015

So the CEO of Swiss Reinsurance Company faced with increasing amounts of uncertainty and rising competitive threat levels in 2016 trumpets this week an “agile capital” strategy. In simple terms, capital allocation will seek to keep pace with foreseen and unforeseen business opportunities. I make no value judgement about his firm’s future but shouldn’t that be something everyone should be doing already in his organisation?

Here is four outcomes that the Board and management in my very best clients rigorously apply, hold each other accountable for and align rewards around:

1. Performance in allocating capital.

2. Performance in people decision-making.

3. Performance in innovation.

4. Performance in implementing strategy.

It reminds me of those classic boxing fights of the 70s and 80s, when fighters such as Ali, Sugar Ray Leonard and so on prided themselves on their agility and their ability to outsmart a more fearsome opponent by constantly dancing around the ring. Some commentators hated the tactics, suggesting it lessened a great contest but the point was those fighters ended up winning the fight, not because they had more power but because they were smarter. Agility was but one of their strengths. Perhaps many insurance and financial services CEOs are waking up to the fact that standing flat footed in the ring is a bum idea in a tough fight, hooray.

© James Berkeley 2015. All Rights Reserved.


15 Mega Relationship Questions For Every Situation

Friday, December 4th, 2015

Whether you are hiring a key person, seeking to be hired, wanting to develop a peer, subordinate, key client, business partner or investor relationship, here are 15 mega questions you must always have in the back of your head. You have my permission to copy and paste this list and use it as you wish with appropriate attribution to me.

The beauty of these questions is in the simplicity and their power. “Simplicity”, asking a short question results in people revealing more. It crystallizes it for them. “Power” in that emotion and passion are key to getting others to act. We want people to be alive and we want to tap into their deepest place so that they reveal themselves. You can’t demand people to reveal themselves, you have to ask it in a way so that they reveal themselves.

Mega Relationship Questions

  1. Tell me about your obsessions?
  2. Tell me what you are passionate about?
  3. Tell me about your earliest memories?
  4. Tell me about the defining moments in your life or career?
  5. Tell me about your proudest achievements?
  6. Tell me about your greatest disappointments?
  7. Tell me about your hopes?
  8. Tell me about your favourites?
  9. What are the fundamentals of your own success?
  10. Tell me about your secret talents?
  11. Tell me about your biggest conflicts?
  12. Tell me about your fears?
  13. What would be your final piece of advice?
  14. Tell me about your influences?
  15. What makes you tick?

The added advantage is that these three dimensional questions enable you to change the length, depth and breadth of any conversation with minimal effort.

© James Berkeley 2015. All Rights Reserved.

Please Shut Up

Thursday, December 3rd, 2015

Why won’t moderators or interviewers park their ego and shut up?

When I see great moderators or interviewers in business or television (Charlie Rose, Larry King, John Defterios and so on), I see people, who are smart enough to realise that the audience wants to engage with the guest(s) first and the interviewer or moderator last.

Indeed, there is a cycle of value. The more compelling the guest interaction with the audience, the more the audience is engaged with what the guest is involved in. The more engaged the audience, the more people are attracted to the event or interview. The larger the audience, the easier it is to attract higher quality guests. The higher the quality of the guests, the easier it is to devote more time, money and resources.


The most obvious example of this is the Charlie Rose Show  now syndicated globally on Bloomberg’s television channel, which started from very humble beginnings in the mid 90s on PBS, a local New York City channel. So humble that the show’s host and interviewer famously bought the wooden table himself!

In reverse, the more the moderator or interviewer seeks to be the star of the show, often a result of their own insecurities, just as in sports with the referee, the faster the audience becomes disengaged and turns off.

Of course, there are interviewers and moderators that make a living and fame by projecting themselves from the stage or through our television screens (Piers Morgan, Matt Lauer and Chris Cuomo) into our minds. Rarely, do they leave an impressive impression. Indeed I know one of these “celebrities” to have interviewed a friend of mine, knowingly “faked” what the viewers were seeing and what he experienced for effect. No more, no less.

Let’s hit the mute button.

© James Berkeley 2015. All Rights Reserved.