Posts Tagged ‘communication’

Uncommon Culture and Family Office Direct Investing

Monday, March 27th, 2017

 

I often ask CEOs in high growth investee businesses controlled by sizeable Family Offices,  a simple question: “Are you being treated as you would treat others in the business? Be honest, in reality, how often is that the case?” The single most common underlying issue, is conformity to the prevailing belief system.

CEOs have differing levels of propensity to conform to the beliefs that govern the behaviour of a Family and the key people in its’ Family Office (the culture). At one extreme, highly inflexible, and at the other end, highly flexible.

The most successful families in direct investing have adopted a belief system that is highly similar to outstanding for profit and not-for-profit organisations. Think of Weybourne Partners (James Dyson’s Family Office), MSD Capital, (Michael Dell’s Family Office) or Grosvenor (the Duke of Westminster’s family entity).

In contrast, where direct investing has historically been a very small part of a Family’s wealth but a decision is made to ramp up its’ activity, culture is a huge issue. The Family Office wants to increase control and involvement of the capital deployed in profitably growing the portfolio businesses. Yet, the operating beliefs that pervade the Family Office rarely change or not quick enough, to support the new or enhanced direct investing strategy.

Take a recent example, the newly installed CEO in a European luxury business, who arrived with a strong industry reputation but zero experience working within, distinct from consulting to Family Offices. The coterie of key people in the Family Office, what I term the “protectors” sought to immediately reinforce and immerse the CEO in the existing belief system. “This is how the Family has always done things….” “This is what Mrs X expects…” “This is how you communicate with her….”  Yet, if the luxury business was to achieve the shared vision of the Family Principal and the CEO, some quite radical changes needed to be made to the Family Office’s typical direct investment approach – changes to governance, speed, communication, rapid access to resources and so forth. The “house style”, wasn’t going to work in a fast moving, highly competitive sector.

Does the CEO conform or push back? If they do the latter, how do they do that without upsetting the apple cart? How do they accomplish that if the protectors, and the Family Principal, consciously create distance? How do they stop the protectors “playing” the Family Principal (self-interested feedback) and not projecting their biases?

There are three means of the Family Office getting the investee company’s CEO to conform: by coercion (threat), by peer pressure (“the in-crowd”) or by self-interest (personal benefit). Only one alternative works, self-interest.

Ultimately, it requires

  1. A CEO with a high level of self-worth and the skills to not only formulate strategy but implement it.
  2. A flexible and intellectually honest CEO. Not to the extreme of absolute conformity and equally never compromising where it is detrimental to the critical and highly important aspects of their strategy.
  3. A Family Principal and their key people with the volition to listen and act appropriately.
  4. A willingness to adapt the Family Office belief system to the needs of the new direct investment strategy and where appropriate, the performance, accountability, feedback and rewards systems.

There is a lot of talk about an inability to change family culture, most of it is rubbish. Of course, the Family Office can change but does it possess the will to do so? If it doesn’t that needs to at the top of its’ direct investing criteria in selecting portfolio businesses and the leadership traits it hires in.

© James Berkeley 2017. All Rights Reserved.

 

Five Family Office Traits That Throttle Success In Portfolio Companies

Monday, February 27th, 2017

Patient private capital is arguably more in demand today as a source of growth capital than at any time this century. CEO roles in businesses backed by ultra high net worth family offices (Michael Dell’s MSD Capital, Jorge Paolo Lemann’s 3G or Azim Premji’s (founder of Wipro) Premji Investment) are arguably more in demand than at any point in recent history. Free from the demands of quarterly reporting for public stockholders and the constraints of the private equity investing model, why, here is the “perfect” career option surely? All we need to do is focus solely on growing and nurturing the business and its’ brand, take prudent risk and never have to worry about the cost or availability of capital. Wonderful. What am I missing? Actually a huge amount. In an article published today, in the market-leading Family Office media publication, Family Capital, James draws upon his experiences with over a dozen families around the globe. Learn about the Family Office/CEO relationship dynamics and the consequences that are often overlooked by many Family Offices and CEOs until it is too late.

http://www.famcap.com/articles/2017/2/27/insight-five-family-office-traits-that-throttle-success-in-portfolio-companies

© James Berkeley 2017. All Rights Reserved.

Holiday Etiquette

Thursday, July 21st, 2016

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When you tell me “I am sorry I cannot get to this until I return from holiday”, what you really mean is I am not your priority. Fair enough holidays are for rest, relaxation and time with family and friends but if you aspire to a high level of routine discipline – setting aside 20 to 30 mins to respond to brief email, calls and so forth, at the beginning and end of the days is surely not impossible? What is more depressing is coming back to work with 600 unanswered emails and copious voicemail messages with increasing levels of frustration. Walk in with a smile not a frown on your face.

© James Berkeley 2016. All Rights Reserved

 

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.

Behind The First Meeting: The Activist Investor Within

Thursday, February 18th, 2016

I detest the way the debate about activist investors and their motives has descended into a force for good or evil. It is corporate pantomime. A round of boos please after the activist has said their lines. Cheers and name calling after the “innocent” CEO or Board Chair rebuttal. AIG, Sothebys, P&G, Yahoo, and the list goes on. The myth is that the activist investor has an agenda and management and the Board don’t. Sparks fly at the first meeting because that is what the activist wants to see happen. This is rubbish and not supported by hard evidence in many situations. In a lively debate on CFO.com this week, titled, When The Activists Attack  here is a perspective I shared from my first hand experiences with businesses and management brought to book by activist investors:

When the Activists Attack

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.

 

An Investor’s View: Attracting Intelligent Capital to Innovative Ideas

Thursday, February 11th, 2016

I am thrilled to announce that I have been asked to be a contributor to VC-List, the pre-eminent online source for advice on turning innovative ideas into billion dollar businesses from people, who have invested in, led and advised real businesses. Here is a link to the first article “Getting Started in Raising Venture Capital” drawn from my war stories, experiences and insight with over 75 businesses in North America, Latin America, Europe and Asia that have successfully attracted funding from corporate venture capital, traditional VCs, HNW investors and so forth at various stages of their journey:

Getting Started in Raising Venture Capital

 

 

7 Life Savers Every Business Can Adopt Tomorrow

Tuesday, February 2nd, 2016

 

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Endlessly overwhelmed by the demands of profitably growing your business? Want to find quick ways to increase the valuable use of your time and reduce your labour intensity? Here is 7 instant improvements that will give you an 5 extra working days every quarter this year and more impressive results:

  1. XpenseTracker – an all inclusive expense tracking and reporting app for business or personal use
  2. Refresh Letters and Templates – every step of your organisation’s client acquisition process, methodology/technology and delivery process to your clients, can reasonably be broken down into a toolkit. Many people waste endless time unclear in their own mind what to write and how to rapidly elicit the response they really want. Stop it. Whether it is a cold call letter, follow up meeting response, response to a media enquiry, meeting agendas, proposal template, chasing overdue invoices, presenting findings and so forth don’t reinvent the wheel. Constantly replenish your toolkit and use technology (intranet, cloud servers etc) to leverage it.
  3. Reciprocal Promotion: find 5 publications and reporters your ideal buyers read and are quoted in. Follow those reporters on Twitter, Google+ and other social media platforms. Respond to stories they post with thoughtful and provocative responses. Look out for their presence at industry events and introduce yourself in person. From time to time, suggest article or interview ideas or names of others that might be particularly of interest. You’ll find yourself, increasingly short cutting the process of becoming an object of interest to your ideal buyers, irrespective of your firm’s brand, geographic proximity or other credentials.
  4. Hootsuite – so you want to build a social media presence but don’t know how to accomplish that with minimal time. The Hootsuite app is your lifesaver, allowing you to access, schedule and generate fresh and valuable content.
  5. Citymapper – so you are meeting a new client or exploring a new city with the family, yet unsure how to get from where you are standing to your destination, what the alternatives are and your expected time of arrival. Arguably one of the impressive travel apps ever created provides all those answers and more in real time on your smart phone.
  6. Unroll.me – your frustration with junk email and subscriptions that you never knew you had has reached epidemic proportions. Two bright people, Josh Rosenwald and Jojo Hedaya have transformed the way you view email. Allowing you to instantly and permanently unsubscribe, roll up daily emails into a single email for quick scanning and storage of those most pertinent to your life. How good does that feel? Try it now.
  7. Tiny Scanner – you need to quickly scan, save and send a receipt, a meeting handout or tracked changes for a presentation while working away from the office or home. Here is the simple, fast and highly reliable answer, a brilliant app with free and modestly priced paid options for the iPhone.

Pick any of the above and you will conservatively save yourself a minimum 1 hour a day, 5 hours in a normal working week, 65 hours in a quarter. Think about that, I am suggesting every three months, you can create an additional 5 working days, at zero cost to you!

© 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.