Posts Tagged ‘abundant mindset’

Chasing An Entrepreneur’s Dream

Tuesday, March 21st, 2017

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I ‘ve had a 40 year passion for the sport of horse racing, in particular national hunt or steeplechase racing. The global heartbeat of the sport lies in Ireland, UK and France. For four days in March, the very best horses and horsemen gather in a natural amphitheatre in the Cotswolds, 100 miles west of London, to compete for 28 races and prize money totalling £5 million. Cheltenham is Glastonbury, Burning Man and the Mid-Autumn Festival wrapped up in a visceral connection with a sport that breaks hearts and delights in equal measure. 260,000 racegoers passed through the gates last week, a great many Irish, to bet, roar approval and dance the night away in the local inns and hostelries until dawn. Male and female, men of the clergy, the soil and the City, grandparents telling tales of old to the young, and the carefree exhibiting their party tricks to any willing audience. Year after year, it is a rite of passage to have “done Cheltenham” from Roscommon to Newbury.

Yet behind this beguiling sport and its’ pinnacle, lies a modern story applicable to any growth business or industry, a tale of a sport where the elite level has created a gargantuan gulf between itself and the rest of the sport (Formula One, America’s Cup). Resilience, separates those who thrive from those who merely survive or throw it in.

Billionaire and multi-millionaire owners, who are willing to satiate their passion “blowing” £10 million a year after-tax in the hope of their horses achieving glory, albeit with zero residual value. Gucci-loafer clad bloodstock agents, trainers, jockeys and vets only too happy to help.

Dramatic scientific and technological improvements (breeding, procurement, nutrition, strength and conditioning) over the past 25 years have enabled the very best trainers to create very powerful systems, backed up by dominant levels of financial capital. Competition at the elite level, will always be sustained because the nature of animals racing against each other and jumping 20 fences is not an exact science. Yet many of those in the “squeezed” middle and the lower rungs of the sport complain that their businesses are near, or at breaking point. The patronage of five powerful men has created a concentration of power and influence in the hands of a very small pool of horsemen. They are paying for glory, the big race winners. Success has bred success and breaking into the chosen clique has become extremely difficult.

Yet there is no shortage of young aspiring horsemen willing to go “all in” chasing their dreams of breeding, selling, training or riding a big race winner. Their passion is such that just like a jobbing Hollywood “runner”, they are willing to embrace the 85 hour working week on a very modest wage, and menial tasks, to work their way up the ladder. Most won’t make it, some will leave the sport with their ego dented and in good health, others won’t be so lucky, retired jockeys with broken bodies, and “burnt out” trainers with deep levels of personal debt. The sport has an incredible level of camaraderie and philanthropy, largely hidden offers of future employment, re-training or housing. It is a sport where attendance at church in the major training centres on a Sunday remains exceedingly high. Thankful for the good life, if not the good luck.

It is a sport like many industries that takes no prisoners, where no one is guaranteed success, billionaire or horse groom. It teaches us that resilience, resilient people and resilient support systems (family, friends and mentors) are key when chasing our passion and ideal career.

The black days, for they will come as certain as the sun will rise over Cheltenham’s Cleave Hill in March 2018. The hopes of many resting precariously on the back of a four-legged animal jig jogging to the start, thousands disappearing into the satchels of on-course bookies pitched in a fierce four-day battle with punters and a great many in the game, acutely aware that fate may deal them a glorious hand or consign them to the “has-been” tray forever. As entrepreneurs, we take many of the same risks and experience similar highs and lows, yet by and large, we are only humbled by defeat if we choose that pathway. Yet, we too must be realistic about the nature of our business, our ideal future and the growth journey we choose. It is great to dream but without resilience, talent and discipline, we won’t get there.  Are you willing to bet sufficiently big on yourself?

© James Berkeley 2017. All Rights Reserved.

 

 

 

FOG

Tuesday, October 25th, 2016

 

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Time and again, particularly in growth businesses, I see leaders proudly trumpeting their unplanned but hugely gratifying successes that they have achieved. When I ask about what decisions they will make today about planned future growth, their default is to say that we are in “pause mode”, and recall past stories of investing too early in entirely different businesses, at entirely different stages of growth. “I know it sounds silly, we know that we need to invest first and then enjoy the returns but we are not in that mindset, at present.”

The effects are the “stop-start” impact of growth on the top and bottom line. Sales pipelines that are at one moment overflowing and another running dry, revenues that have a strong couple of quarters followed by leaner quarters and increased volatility in profits. The volatility creates a sense of unease in management’s own thinking and often investor unease in management’s ability to achieve their projected profitable growth targets, as originally agreed. Confidence is a fragile vase, once shattered hard to put back again.

We all know that we must grow our businesses but coming to terms with the consequences of growth is seismic for some entrepreneurs and executives. From an investor’s perspective, management’s fear of growth (“FOG“), is as debilitating a condition for an organisation’s future as the actual consequences of the growth investments made. The consequences of investing too late or not at all, are rarely even considered after the event by management (the great business development hire you never made, the business you could have acquired, the market opportunity you could have secured and so on).

Understanding what are the causes of “FOG”, are fundamental to growing a thriving business. Why is it that management are unable to take prudent risk? Why cannot they put in place appropriate preventative and contingent actions? Why have they stopped trusting their own judgement?

The answers give you a more profound understanding of the management team, the beliefs that govern their actions and the results that in all probability will arise for investors.

There are, of course, rational consolidation moments in periods of high growth, to ensure growth is manageable and healthy or when there are dramatic macro environmental changes taking place in a designated market. What I am suggesting entrepreneurs and executives think about is the irrational moments, management’s self-inflicted fear of growth and the consequences for their key constituents. Are they afraid of the dark or the “monsters” that may appear in the dark?

© James Berkeley 2016. All Rights Reserved.