Archive for June, 2017

Nicky Haslam

Friday, June 30th, 2017

A detour last night to The Pheasantry in London’s Kings Road. Once a somewhat decadent bar in the 80s, now part Pizza Express restaurant and home to an intimate basement jazz club. The reason a charming evening with Nicky Haslam, supernova interior designer, to hear his take on classic Cole Porter and the 30s and 40s chanteuse, Lee Wiley. Accompanied by the renowned pianist, Tom Wakeley, Nicky exudes wit, charm and wonderful renditions of songs a great many people under 50 have rarely heard. He possesses that rare skill of drawing you into his stories without looking like his trying. Highly recommended.

© James Berkeley 2017.

The Entrepreneur’s Uncommon Legacy

Friday, June 30th, 2017

90% of entrepreneurs want to leave a powerful and lasting legacy upon the successful transition of their business, yet most fail. I define “legacy”, in a business context, as a framework within which decisions are made today about sustaining the beliefs that will enable the business to thrive in the future.

Failure is not in my experience down to the most obvious reason (renouncing control) rather it is the absence of people, long before the sale of the business is concluded, with the skills and volition to implement the entrepreneur’s desired legacy in the real world, and constant procrastination. Here is a simple checklist for the Entrepreneur:

  1. What would a successful legacy look, feel, touch, smell, taste like to those who are important to you and in what realistic timeframe?
  2. Whose support must you command upfront (exemplars, key influencers) to sustain it?
  3. What specific goals are you trying to accomplish internally and externally (e.g. improve succession planning, more impressive innovation, heighten customer awareness of societal issues etc.)?
  4. What elements need tackling first (e.g. strengthen career development, prioritise resource to performance improvements not fixing problems, identify exemplars etc.)?
  5. What must be done tomorrow and the day after?
  6. By whom and by what deadline?
  7. Do it.

If you need additional expertise, hire it. One of the biggest mistakes is the assumption that the content knowledge your coterie of existing advisers and top managers have about the inner workings of the business is sufficient to succeed. Here is the litmus test for the Entrepreneur:

  1. Do my key people possess a high, moderate or low level of familiarity with my legacy?
  2. Do my key people possess a high, moderate or low level of clarity about my legacy?
  3. Do my key people possess a high, moderate or low level of skills to implement my legacy?

Better to have started early, tried and failed than for the entrepreneur to look back with regrets about the mistakes that were made by not being bold enough or making it your priority, before the business was sold.

© James Berkeley 2017.

A Bad Day

Thursday, June 29th, 2017

Most people’s so-called “bad day” is very rarely bad. With extremely rare exception, no one has been shot at, no one has been injured nor have they died. Let’s keep a sense of perspective and positive self-talk about own lives, our family, our business, our clients and our investors. Yes, it may be frustrating, the key investor, customer or prospect rejected an offer we made, the Board aren’t supportive of our great idea or our ability to move with haste has been hindered by others’ procrastination. These things happen. They are mere speed bumps. They are not catastrophic unless you allow them to control your mindset.

© James Berkeley 2017.

Lifting The Cloak Of Private Equity Secrecy

Monday, June 26th, 2017

 

 

How do you tell whether a private equity investor is “absolutely credible”? Realised investments, success stories, lists of co-investors, testimonials, references etc. are all valuable but can I actually see their intellectual property? I am referring to the availability of tangible communications (articles, presentations, models, audio, video etc.) encapsulating the investor’s best ideas, experiences, education, managing cultural change etc. – their intellectual capital – synthesised or recombined  into value for the would-be seller or top management. In almost all cases, the answer is a resounding “no”. You are asked to take it on trust.

I asked a serial CEO, and now Board Chair and Senior Adviser to many of the world’s largest private equity firms, how the secrecy helps the private equity investor? He was largely at a loss to explain it apart from avoidance of past PR bloody noses.

Would you allow a surgeon to operate on your heart or the school to teach your child without a pretty clear understanding of how they think and operate, beyond the odd PowerPoint presentation or a few lunches? The time has come for more humility from private equity investors of all shades. That doesn’t require them to diminish their own worth rather to accept that greater transparency upfront is an accelerant to higher levels of trust with their key constituents and superior short and long-term performance.

© James Berkeley 2017.

In The Eye of A Private Investor

Monday, June 5th, 2017

 

You are a C-suite executive or senior manager (probably with a successful career in a mid and large organisation) flirting with future advisory roles (Operating Partners, Senior Advisers and so forth) with private investors (Family Offices, Ultra High Net Worth individuals and some funds) and their portfolio companies. I meet half a dozen a month. Are you looking through your lens or that of the investor’s? When I ask bluntly, “why would a private investor be interested in you?”, most default to regaling their past (skills, expertise, accomplishments) or they way they like to work (imparting advice, influence, guidance). Here is the tough news, most private investors really don’t care. They want to know about

  • the “transformative value” (TV) for the investor after the Adviser has applied their past to the future of their investee businesses (logical reasoning – increased revenues, stronger brand, faster growth etc.)
  • the speed and quality of the “validation” (V) for the investor’s own reasons to back or not, a specific business (emotional reasoning – “am I going to look good”, enhanced credibility, mitigate personal risks, obtain future opportunities or relationships with peers, other investors, investee businesses etc.).

TV * V = Private Investor’s return on investment or “Great Deal”

“What”, “where”, “when” do you score highest as a potential Senior Adviser? Why? How do you get to those private investors with the highest need for that value?

Keep that equation and those critical questions uppermost in mind BEFORE you walk into your first meeting with a private investor.

© James Berkeley 2017

Trusting Relationships Trump A Deal

Friday, June 2nd, 2017

 

Donald Trump follows through on one of his campaign promises and there are cries of “quelle horreur” and “nein” from his European partners, at the mere thought of any re-negotiation. It begs the very same question in your business, are you putting too much emphasis on signing a contract, and too little on continuing to nurture a peer-level trusting relationship and creating alternatives, where the original signatories (investor, customer, employee or business partner) may change, and the anticipated value derived from the deal is in all likelihood a long way in the future?

© James Berkeley 2017.

 

 

Empty Partnership Offers

Thursday, June 1st, 2017

 

“I am flattered that you would consider partnering with us, here is how it might work…”

 

I have sat with six experienced private investors and bankers talking to entrepreneurs and executives with impressive mid-market and small businesses in the past month. Universally, their entire approach bar one notable exception, is driven by a poverty mindset and fear. “How can we minimise our risk, our upfront investment, our commitment (time, cash, resources and so forth)  and get the other partner to show us their true worth while exerting maximum control?” It is not what you say or the other partner hears that matters, it is how you act.  If you really are a prudent risk taker, act like a peer and let go of the fear. Otherwise stop wasting everyone’s valuable time.

© James Berkeley 2017.