Peak Performance

October 3rd, 2017

We are 10 years into a bull market run and a UBS Investment analyst at a London event with a global bank’s resources this morning suggests investors in a late cycle phase continue to be “pro risk assets (equities, credit, real estate) with a defensive stance.” Short-hand for “I have no conviction”?! As prudent entrepreneurs, executives and investors, we don’t have the luxury with our own money and endeavours. We must commit to a strategic direction and have convinced ourselves.

2017 Entrepreneur Of The Year Awards

September 22nd, 2017

 

I have had the great pleasure this year participating as a judge for the UK’s 2017 UK National Business Awards. The panel, some of the most impressive figures in UK industry and private equity, recently met with 11 inspiring entrepreneurs to determine the 2017 Inflexion Private Equity Entrepreneur of the Year. While you will have to wait until November for the announcement of the winner, here are some traits of “The Exceptional Entrepreneur”:

  • Self-determined. They don’t rely on others largesse to achieve success. They don’t bemoan their fate, they seek quick ways to change course. They believe their destiny is their own hands, their success is largely a function of applying their own skills and judgement to overcome foreseen and unforeseen obstacles.
  • Enthusiastic. They have tremendous passion and love what they do but most importantly they don’t allow that enthusiasm to evolve into blind zeal. Where zealots are motivated to solely convert others to their way of thinking, they are willing to find compromise where it allows them to accelerate towards their goals.
  • Intellectually curious. They are fast, mobile and quick to react to or even better anticipate competitive trends. The depth and breadth of their intellectual curiosity has enabled them to become people of interest to a diverse audience.
  • Flexible. They are focused on outputs not inputs and willing to switch paths at very short notice. Recognising that their success is not predicated on sticking to pre-conceived ideas rather their awareness of changing customer and market needs.
  • Time and awareness. They know where they are precisely in terms of the evolution of their business and the change agents impacting their markets. Such that they find it easy to make smart decisions today about the future.
  • Clear purpose for their wealth. They have a belief system that easily reconciles the differences between the utility of the financial, intellectual, social and cultural wealth they have created for themselves and their key constituents. While money is important, it is seen merely as the fuel for the life they choose to live.
  • Empathetic. Their emotional stimulae are acutely tuned to the needs of the people around them and the structured and unstructured situations that they find themselves in. Such that they seek to earn others respect ahead of being liked.
  • Stature. What others see, not what they hear or what they read, commands instant respect. They possess an inner confidence that in the company of others, draws people to them and to want to engage with them on a variety of issues, beyond their domain expertise. It has nothing to do with their physical size, how loud they shout or how deliberately they flaunt their success. They are not a “one trick pony”.
  • Time is a priority, not a resource issue. They possess both routine and exceptional discipline and organisation, which enables them to create speed. Priorities are quickly determined and actioned. They don’t procrastinate, nor do they waste time on irrelevant tasks and activities. Nor do they over-staff their businesses.
  • Ego and Resilience. They have learned to “park” their ego. They accept that they will both win and lose on their entrepreneurial journey but the result will never will impact their own opinion of themselves. Such that in defeat they are able to rebound quickly and figure out the best way to achieve that.
  • See the funny side of life. They are able to be both a gracious winner and a gracious loser. To laugh in equal measure at their good fortune and their bad luck. Their default position is to improve the situation, keep smiling and institutionalise the learning, not to seek blame in a crisis. Knowing that is what it is expected of them as a leader.

© James Berkeley 2017. All Rights Reserved.

Brexit Backlash

September 22nd, 2017

Close to 60 million people are daily waking up in the UK and countless millions in Europe are doing the same with the intent of improving they and their families lives. Their accomplishments are hugely impressive and yet we are swamped by a news media that insists on overlooking those achievements and fuelling fear about the consequences of Brexit. Why? Is it that a great many of those working in, and owning, media companies are themselves failing and using Brexit as a soft excuse for their own poor judgement and declining skills? Is it that their enthusiasm has morphed into blind zeal? As with all zealots they seek to convert everyone and find compromise impossible to accept? (OK, so Britain will stay in Europe on a Monday, Wednesday and Friday to satisfy them.)

© James Berkeley 2017. All Rights Reserved.

Warning Light!

September 22nd, 2017

 

When an entrepreneur or his/her Adviser overlook or cannot clearly articulate in 3 or 4 sentences, the greatest anticipated weaknesses in their business growth plans (markets, products, technology and relationships) given competitive market trends, you have a plan that won’t survive serious investor scrutiny. To pretend otherwise is to start driving a car where the wheel nuts lie strewn on the ground.

© James Berkeley 2017. All Rights Reserved.

 

 

Great Service Begins At The Top

August 15th, 2017

 

If you aspire to or are a pre-eminent global service business, shouldn’t the CEO’s communication and feedback systems with its’ customers reflect its’ pre-eminence and branding? Here is a recent example of personal response times from constructive customer service letters to European CEOs:

3 days, in person Ewan Venters, CEO of grocer, Fortnum & Mason

14 days, in person Nigel Wilson, CEO of insurer, Legal & General

135+ days, zero response Dame Carolyn McCall, CEO of budget airline, easyJet

645+ days, zero response Keith Gibbs, CEO of insurer, Axa PPP Healthcare

795+ days, zero response Rickard Gustafson, President and CEO of airline, SAS Group

Letter writing might be unfashionable in certain quarters but when a customer today makes the effort to put pen to paper, it is a common sense assessment that they are serious about their intent to point out a superior or underwhelming experience. Based on my anecdotal research, a great experience buying a tin of biscuits will elicit a 4x faster response from the CEO than buying a cumbersome life insurance policy, 45x faster response from the CEO than being stranded late night in a desolate European airport or 219x faster response from the CEO to acknowledgement of proactive service in a healthcare insurer! Why would a CEO’s office operate like that unless it is seriously disorganised, it doesn’t hold itself accountable for the promises it makes to its’ customers or it is simply arrogant?

© James Berkeley 2017. All Rights Reserved.

 

Wealth Managers Day Of Reckoning

July 28th, 2017

 

The need for financial advice is at unprecedented levels, what is being increasingly exposed is the “competency and passion deficit” in many private wealth advisory firms. With greater complexity and ambiguity in their private clients’ lives, there is an increasingly unmet need for both increased “speed” (real-time decision-making) and higher “quality” (better performance, lower cost) resources. You cannot achieve that without new thinking, abandoning irrelevant activities and new approaches to regulation and compliance. A great many market practitioners question the sustainability of the robo-adviser retail advice model (Betterment, Wealthify and others) on account of their client acquisition costs but what is undeniable is that without old thinking and systems, they have a huge advantage for those seeking low-cost advice. For small and mid-market firms, who pride themselves on traditional advisory propositions, I confidently predict the next 12 months in N. America and Europe will see record consolidation and exits. The real question for the owners of these businesses, is the shortest route to your “ideal future” a friendly merger or sale now or driving on further into even more hazardous conditions with close to zero visibility?

© James Berkeley 2017.

 

A Time And A Place

July 27th, 2017

 

What is the price of privacy and silence in a workspace? Money and demand are abundant from small medium enterprises wanting more flexible offices, and investors hurtling after them with bags of moolala. WeWork, the co-working giant, announced today that it has raised $500 million from SoftBank and Hony Capital to fuel its growth in China. I am helping another ambitious group charm professional investors with their Mandarin Oriental-style idea and secure north of a $100 million backing. Indeed, I write this sitting in my own upscale serviced office located in the heart of London’s West End.  Yet there is one drawback that almost all of these co-working/serviced office operators have not properly addressed. Co-working is great until you want privacy and silence. You struggle like hell to find it. Hip canteen or dining areas, noisy club lounges, and expensive, clunky meeting rooms with time-consuming booking systems don’t provide real-time access to the seamless professional environment and image that your most discerning clients expect. Perhaps in a techie world but sorry, not in a professional services or financial services firm. It is like asking an Englishman to adhere to a relaxed dress code at a wedding, it is carnage. I am sorry but I neither want to work in or be seen as an underpaid HR manager ghosting in a Starbucks mid-morning. Whether we like it or not, informality in a business setting has its’ limits on how we think about ourselves, our productivity and our profit.   The operator, who can truly provide a workspace with “flexible” privacy and silence is really the one to throw serious money at.

© James Berkeley 2017.

New Balls, Please

July 12th, 2017

Today’s Wimbledon: strawberries and cream. White tennis gear. Polite ticket queues. Live streaming. Rafa, Roger, Andy, Novak, Serena and co. The sliding roof.

Days of old: more strawberries and cream. Wooden rackets. Bjorn, Jimmy, BigMac, Pete, Andre, Rod, BillyJean, Monika, Martina, Steffi. Intermittent rain delays. Images that are indelibly linked in our minds to a time and place. Yet a (sporting) institution and participants that has successfully embraced reinvention.

When you look at your own personal and business reinvention, what are the strongest images in the minds of your key constituents (clients, investors, employees, business partners and so forth)? Does it say more about your “past” value, your “present” value or your “future” value? Perception is reality. What are you doing regularly to adjust others perception of you? (new interests, new relationships, new ideas, new surroundings, new images etc.) Is it bold enough for your current and future circumstances? (changes in technology, competition, market needs, client experience, and so forth)

Why wait for the umpire’s cry of “new balls, please”, when you can better control your own destiny?

© James Berkeley 2017.

 

Inconvenience Squared

July 10th, 2017

Sitting on a EasyJet plane last night in Nice’s Côte d’Azur Airport minutes after boarding and the Captain gets on the microphone apologising that due to inclement weather on route, we must wait 55 minutes on the tarmac in Nice because “he needs to free up the gate”. He then invites those who would like to look around the cockpit to pay him a visit when the engines are off.

Kudos for the leader of the ship for addressing the audience and his openness to entertaining the frustrated passengers (quite how that is squared with EU security protocols preventing access to the cockpit is something of a mystery). Yet the obvious thing to ask is why would you ask 170 customers to be inconvenienced to a great extent in boarding a plane that you know is going nowhere for a considerable amount of time? Why couldn’t you move the plane 200 metres to another stand?

Perhaps you don’t care or perhaps the airline’s priority is more important than that of its’ customers comfort?  I see the same thing in a number of businesses.  Think about the unnecessary inconveniences that you are asking your customers to tolerate for your benefit? What stops you changing your behaviour and applying common sense? Is it a material or immaterial reason (safety or Company Policy)?

Too often our best intentions to manage customers expectations are largely overlooked because we insist on dumb decisions which are clearly not in our clients’ best interests.

© James Berkeley 2017.

 

Nothing But The Truth

July 5th, 2017

Beware the tendency today to have opinions proferred by eminent people confused with facts by trusted media sources.

Today, the BBC’s Kamal Ahmed in a story about the growth of the UK’s gig economy, quotes Lord Adair Turner, a British economist and policy adviser, as “correct” in expressing his opinion that the failure to see a real rise in average UK wages since 2007 proves that the capitalist system is not living upto its’ promise to “raise all boats over a decade”.

The capitalist system promises to create an environment for maximising wealth creation. There is no better system at doing that. It doesn’t “promise” anything other than in fostering competition, there will be winners and losers.

A capitalist economy’s fault line comes in how it deals with both groups and how it distributes wealth fairly and equitably. Should a public company CEO earn 10x that of a brain or heart surgeon who saves lives or 300x their lowest paid employee? I happen to believe everyone, who is seriously intent on working, and contributing to society, should be able to have a job.

Where we are on unsafe ground as a society, is when prominent journalists with dominant global media platforms don’t self-check opinions expressed as facts. For who are we to believe?

© James Berkeley 2017.