Posts Tagged ‘accountabilities’

RPM II: The Cornerstone Client Walks

Sunday, April 3rd, 2016

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In the second in our weekly series of Resilient People & Momentum (“RPM”), James discusses how to lessen the impact of a key client exit on the firm’s profitable growth plans. No seriously, clients aren’t for life!

Situational Overview: The Cornerstone Client Walks – you have done a fabulous job. It is not personal but the buyer has decided that they can live without your product, service and relationship. You have a cashflow problem. You have a potential reputation problem within (direct reports and peers) and outside the firm (customers and business partners). You have a potential employee problem (productivity and morale). You have a potential investor problem (earnings and value). Is your first thought to seek blame or come up with a great response? I’d say in 80% of these situations I have been privy to the former explodes virally.

Resilient People & Momentum Mindset: I subconsciously expect this to happen in a growing business when I least expect it. How I respond is more important than what has happened. I earn others respect by displaying the right mix of skills, behaviour and expertise. I am willing to be intellectually honest about my own performance. I will listen to and respond sensibly to solicited feedback while ignoring unsolicited feedback that is largely for the other party’s benefit.

Resilient People & Momentum Questions:

  1. Cashflow: where can we create more short-term revenue, not where can we take money from?
  2. Reputation: where can we earn more respect (new ideas, reciprocal opportunities, return the favour), not how can I save face or pass the blame?
  3. Employees: where can we more productively deploy and offer more gratifying work to our employees, not who needs to be harangued or worse, fired?
  4. Investors: where can we display and exude greater confidence in our talent and judgement to investors such that a short-term set back, is just that, a blip on a road to riches, not a mind numbing defeat that forces investors to thrown their hands up in the air?
  5. Development: what can I learn from the treasured client’s reasons for the decision to walk away that I can apply for the future benefit of the firm (better client communication), its’ existing clients (prioritising investment) and our prospects (market positioning)?

© James Berkeley 2016. All Rights Reserved.

Obese Businesses In A Healthy World

Monday, March 21st, 2016

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If you hire a personal fitness trainer or financial adviser, you would reasonably expect that they visibly are the embodiment of the healthy lifestyle and prudent risk taking that they promote. If you hire a large consulting firm you would reasonably expect that they are the embodiment of  the reinvention and innovation they promote. Specifically,

  • How does our brand stand out in a crowded market when our buyers don’t see the differences?
  • How do we bridge the gap between our existing buyers’ perception about the quality of our work (high) and their propensity to recommend and refer us to new prospects (low)?
  • Which area of the market should we stake out and leverage digital technology to transform our clients’ future?

That thought crossed my mind at the recent launch event of Source Global Research’s UK and global consulting market findings. The hard evidence suggests that many of these large firms don’t have the answers in respect of their own market. Buyers report close to zero differentiation across their service offering and a low propensity to recommend or refer these firms. The consulting firms themselves are directing marketing resources to the entirety of the market without regard to their ideal buyers, largely reliant on foot soldiers knocking on client doors and service offerings driven by production capability rather than client need.

Indeed, I walked away thinking that many boutique and solo consulting firms including my own are actually way ahead of many large global consultants. Forced by necessity, small entrepreneurial firms have created strong and clear value propositions, identified and directed limited marketing resources to their ideal buyers not every buyer, prioritised building a strong marketing gravity to their brand and created a range of offerings at increasing price points that are tightly customised to their target client’s needs. For once, the grass is indeed greener on the small guy’s side of the fence.

This isn’t an isolated phenomena. Clients of large advisory firms in global equities and fixed income research, investment banking, re(insurance) broking, private equity, private banking and so forth are coming to a conclusion that the large firms and traditional value chain is not working for their benefit. While small firms are creating new value propositions, new ways to attract clients, new ways to integrate high tech into the client experience and so forth, the larger players are largely falling back on trying to sell more of the same in more ingenious manners (leverage) and defending their turf. The trouble is that they don’t have watertight doors. Technology is rapidly providing faster and more impressive ways to apply knowledge to capital and human resources. Size alone is not a guarantee of future survival.

Everyone talks about “disruption” today as if it demands a new or unique response before, during or after an event. I don’t look at it that way. I see it that many large and mid-sized advisory firms in different sectors have got away from the marketing focus, discipline and resolve to compete effectively. They have layered complexity (bureaucracy) over what started out as a simple business with a simple marketing structure and process. The world has and will always change (new regulation, new technology, new capital sources, new competition will arise).

If they prioritise, hire and develop the requisite marketing skills, have their people do the right things, hold them accountable and reward them appropriately, they will have control and relevance. If they sail away from that imperative, they will have increasing insecurity and fear, which ultimately will lead to increasing mergers or worse, extinction.

© James Berkeley 2016. All Rights Reserved.

The Perils of Hazy Horizons

Tuesday, March 8th, 2016

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One of the senior politicians in the Brexit debate urged voters on British television last night to give serious thought to the type of country and life they want to have in 40 years time. Predicting what will happen in 3 years time, as anyone sitting in the executive office of a global bank in 2004 will attest to is fraught with huge inaccuracies and serious consequences! The pace of change has never been as dramatic (technology, capital, supply of talent, societal changes and so forth).

The art of management is to balance short and long-term profitable growth and make informed decisions about the health and well-being of the organisation. To effect change successfully and bring employees with them, mid-level managers in particular need to understand how they must adjust their own behaviours and actions in highly ambiguous situations.

To make serious predictions about the long-term and to put the risks and benefits and action in the appropriate context anything more than a 5-7 year horizon is really an intellectual not a commercial debate. Even in government funded infrastructure projects and macro inter-governmental policy initiatives (climate change, energy, healthcare, education and so forth). That is why I smile when I see organisations such as Lloyd’s of London’s (2026 Vision) and other global organisations expecting that their best laid plans will be taken seriously by their key constituents. It is a collection of predictions, which the forecasters will never be held accountable for and those asked to implement it struggle to grasp what it really means for them or their colleagues.  Fact.

Let’s get back to pragmatic outcomes, alternatives, assessment of benefits/risks, timing and action within the proposed investment parameters.

© James Berkeley 2016. All Rights Reserved.

Conviction and Reinvention

Monday, March 7th, 2016

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I have long been fascinated by how people and businesses apply “conviction” (beliefs, investment, action) when there is an immediate requirement for “reinvention”.

In 1999, opposite where I worked on Hollywood Road in Hong Kong was a large commercial real estate company, whose business was fitting out and renting shared service offices. For many years it had a unremarkable name and neon sign over the 1960s building, overnight it added the sobriquet “.com”. Curious I asked a friend who worked in the building what was happening, “Oh the Chinese owner thought because tech is red-hot right now, why not change the name of the company. Don’t worry as tenants we have seen no changes.”

Now you might not be as brazen in convincing your target audience à la Donald Trump and Mitt Romney that your polar opposite views are instantly credible but there is a mindset change needed first to kick start reinvention. Here is 3 simple questions, apply it to any situation you personally or the organisation are experiencing:

  1. What are the beliefs that inform my convictions today about how I and/or the business needs to look in 12 months time? (relationships with clients/investors/ employees/regulators, changing customer base, financial condition, valuable and profitable offerings, discretionary time and so forth)
  2. How do I apply those convictions today to where I/we plan to invest tomorrow? (capital deployment, people, innovation, strategy implementation)
  3. How do I best put today’s convictions into action tomorrow? (priorities, organisational structure, process, exemplars, skills, behaviours, expertise, technologies, accountabilities, rewards system, communication and feedback and so forth)

I can barely think of a sector where the nature of work is not changing dramatically today. With it comes fear (irrelevant, loss of clients or even, unemployed) and opportunity (new investment in new products and services, new markets and new roles).

People believe what they see, not what they hear or feel. If you really want to convince me today that you are serious about reinvention, I want to see immediate changes of attitudes and behaviour amongst influential figures in the business and new, impressive results fast.

If you are willing to be intellectually honest, click on the link below. Ask yourself where do our current attempts sit on the chart and where do they need to be in the future. The distance between the two points is indicative of the small step or giant leap your business and key people need to take.

 

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Endless needs analysis informing our future strategy (AIG), managers preoccupied for hours creating and talking to the media about our “new culture” (Anthony Jenkins at Barclays) or changes to the plaque over the building door won’t cut it for customers, investors, employees and regulators, however, well intentioned. It isn’t easy but I need to see in your actions that you really believe what you are saying, not merely spouting platitudes to buy time or protect your ego.

© James Berkeley 2016. All Rights Reserved.

Interview with Me: Economia

Wednesday, February 17th, 2016

Nick Martindale, a senior reporter with economia, the “go to” publication for the global accounting profession and their clients, interviewed me on the logic and emotional challenges top managers face when they decide to “go global”. Specifically, the fears that distorts their decision-making and the consequences for their growth objectives. The fears are largely similar in large and small firms, what is different is the impact the consequences may have on top line revenue growth, profit, cashflow, brand perception, employees, investor relations and clients.

http://economia.icaew.com/finance/february-2016/foreign-riches

 

Tell The Truth: You Don’t Know Your Clients Well

Monday, February 15th, 2016

We think we know our clients but many of us are kidding ourselves or unwilling to be intellectually honest. If the objective is to profitably grow our business, we can help ourselves by having a finer understanding of the logic and emotion that drives our clients’ decision-making. I am talking about the individuals with the ability to approve, fund, veto or set major strategic initiatives for their organisations and the tactics to implement it.

You don’t accomplish that in a mid or large client organisation by placing yourself in a subservient position to a Risk Manager, an HR Director or a mid level banker. When did they last sit in, and contribute to, the firm’s strategy meeting? How would they be privy to the inner most thoughts of the firm’s top management, the Board and its’ owners? How would they be in a position to influence those individuals’ decisions?

If you must exclusively hang out with these shared service experts or mid-level managers consider the risks. You are placing your future well-being and financial condition at the behest of individuals, who rarely get “air time” with the ultimate decision-maker(s). They have a vague understanding of the competing priorities in the executive office. You are left to sort through the information they wish to share with you, their interpretation of events and their biases. So what is the alternative?

Shoot For The Top.

A senior figure at a Big Four consulting practice admitted to me “I sit across the table from C-level execs all the time but I don’t really know them.” Another, Vice-Chair of a market-leading brokerage and advisory firm, revealed how distant he and his colleagues are from the strategic decision-making process at major European insurance companies, yet they have billion dollar trading relationship. Faced with increased competitive threats, both individuals talked about the increasingly precarious position their organisations are in. In both cases, the businesses haven’t placed sufficient accountability on key people to build relationships with the right people and provide them with immediate and impressive value. Rather they have stayed in the transactional layer of the firm, cultivating relationships with mid level managers, convincing themselves that getting closer to these individuals will enhance their well-being (improved top line revenue, happier clients, stronger brand).

Getting There Fast.

Here is what my best clients do,

  1. Identify who those key people are in Board, ownership and management positions that you ideally need a relationship with to exploit exciting and anticipated needs?
  2. Who do they hang out with? (peers, friends, acquaintances, media and so forth)
  3. Where and with whom do they like to be seen? (professional, personal interests, charity etc.)
  4. Where do they speak, publish and support events?
  5. What are they passionate about? (hobbies, innovation, people and so forth)
  6. How might you meet them and increase your prospects of establishing a peer level relationship? (referral, charitable or professional association boards, shared experiences etc.)
  7. How might you provide immediate value? (a name, an idea, a sponsor, a success practice and so forth)
  8. How might you parlay that into a continuous conversation with reciprocal value? (each time you meet, you both leave with exciting ideas and impressive value, looking ahead to the next social or business gathering)

I find there are a great many people who “get” and studiously study the logic. However they fail due to poor credibility (entry path, lack of substance), an inability to build a rapport (intellect, social skills and chemistry weak) or a lack of trust in themselves (blow up the relationship with their transactional buyer). They can be coached or mentored but many are reluctant or their boss doesn’t see it as a priority. Lo and behold the organisation will forever be at risk to client strategic decisions that it has zero control over and an unwillingness to influence.

© James Berkeley 2016. All Rights Reserved.

 

Corporate Innovation Comedy

Thursday, February 4th, 2016

There are certain fashion or fad trends which when worn by 60 year old men, skinny jeans come to mind, are just plain wrong unless you are Mick Jagger. In all the buzz about innovation, reinvention and disruption it is comedic watching the attempts of some corporate organisations in finance, banking and insurance to embrace it effectively.

The CEO stands up and says

1. “Innovation is the new normal”: err, innovation is not a rheostat with an on/off switch in outstanding innovative companies such as 3M, Merck, Apple etc.

2. “When I was at Google….”: err, you met with a middle manager or silo function (risk management) that is not even situated in the Corporate HQ. Ssh, the guy is an ex employee of ours suffering a mid life crisis but it sounds cool?

3. “We are on the side of the disruptive businesses…”: really, where is the hard evidence? Ah you have put in an order for the Tesla when the lease on the Merc expires.

4. “Let me tell you about our work with [Uber, Airbnb]…..”: your “credentials” are killing me, how are a series of actions unique to one firm now a hot trend?

5. “We took our Leadership Team to Silicon Valley….”: so you flew into San Jose on the Gulfstream, spoke to a few random clients and friends and are now immersed with ground-breaking ideas, really? Ever tried the pilgrimage to Lourdes? Thought not.

6. “I was speaking at a Tech investors event in Silicon Valley…”: you are now on first name terms with Marc Andreesen and Fred Wilson. Keep that one for the next earnings call.

7. “We are passionate about the future. We are announcing a new corporate venturing team with a $100 million of capital”: wow, so third rate entrepreneurs line up outside our headquarters. After all why would a stack of cash and a conservative reputation not appeal to serious tech entrepreneurs? Oh, nevermind.

8. “I am really excited by the power of blockchain as a powerful asset”: half the audience look blankly. The venerable City reinsurance broker or Wall Street banker racks his brain “watch chain?”, as the CEO fumbles like an adolescent boy trying to unhook the girl’s bra, in explaining blockchain’s virtues and his excitement.

9. “I have asked our Divisional Heads to set up an offsite meeting on Innovation and Disruption….”: yay, a chance to invite Wired’s David Rowan to talk to us about 10 transformative technologies. Oh hell, which futurologist should we invite? No giggling or fumbling for the iPhone and that important email when he or she stands up.

10. “It is time for the results of our Annual Report on Megatrends, we spoke to our global community of risk managers…..”: ah, that is the fella situated down the end of the first floor corridor with an actuarial background and a handful of junior direct reports. I don’t remember seeing his face in the Corporate Strategy meeting, perhaps he was at his daughter’s soccer game.

I kid you not, these are all genuine one-liners. Sorry I am bent double admiring the CEO’s shiny white teeth and folksy humour. Nice touch.

© James Berkeley 2015. All Rights Reserved.

 

Eccentric Behaviour

Friday, January 8th, 2016

I love living in London because you sees displays of eccentric human behaviour that defy all logic but are in equal measure very funny. This morning I hopped on a London bus in a rainy Mayfair to be followed in by a well-spoken English gentleman struggling to haul a 7 ft loosely bubble-wrapped, early 19th Century British masterpiece procured from an eminent Bond Street gallery. The sought of place where the red dots on the gallery wall demand a large five or six figure sum. Poor man, wouldn’t his budget stretch to hailing a taxi or the Gallery’s to delivering the piece to his home or workplace?

When we deliver services to our clients, do we seek to save pennies (demand our people spend no more than £25 on a bottle of wine at dinner) or promote overly cumbersome client processes (onboarding) for no good reason, after we have been paid pounds? Is our mindset and self-talk one of abundant opportunity or desperately fearing poverty? Is that reflected correctly in how we ask our people to behave and act with our clients’ best interests at heart (exemplars, policies and procedures)? You would be surprised how often that there is a huge misalignment, which instantly dilutes client and employee trust and weakens loyalty to top management and the firm.

© 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.

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.