Posts Tagged ‘increased business performance’

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.

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.

Provocative Growth

Tuesday, September 29th, 2015

How many times do you go to an industry conference and you hear a speaker or an attendee turn a belief you had about the industry’s future upside down and explain the requisite behavioural change? They back that up with hard evidence or strong anecdotal information. I’ll bet it is no higher than 1 in a 100 event. With the exception of those operating in the technology or innovation arena, I’d say the odds might be even higher.

When everyone’s default position is to say the same thing and a reluctance to stand apart from the crowd, is it no wonder that the listeners struggle to differentiate between businesses on anything other than price or the pace of innovation is so slow? I have coined a term Provocative Growth to provoke, agitate and move businesses faster towards their profitable growth goals.

I am not suggesting you “poke your colleagues in the verbal eye” (the Bernie Ecclestone approach) or merely “grandstand” on a particular issue to draw attention to your own self-importance (the Donald Trump approach), what I am suggesting is your objective is to get the audience to say “I have never thought about it that way before”. If you want to grow your client relationships, dominate a particular market and be seen as the centre of expertise, you must provide irresistible value, provocation and empathy in the moment with clients.

The easiest way to accomplish that is to ask “where can I comfortably take a contrarian position and intellectually support my position (hard evidence or strong anecdotal insights)?” Incorporate it in your dialogue with clients and prospects, intellectual property, marketing exhibits, speeches, published articles, media appearances and so on.

Here is an example, almost universally senior financial services industry executives will bemoan any new regulations and the impact of compliance on the future cost base of the business and sector. I would argue “it is not the regulations, it is BOTH the speed and quality of your response, which is the real issue. In some cases you are creating a sledgehammer to crack a nut, in others you are defending the indefensible and in a few cases your action is spot on. Here is what I saw at (list example)….. Let’s agree where your response falls into one of those three categories and then consider where you could work smarter (technology, people, organisational structure) with my help to enhance the clients’ experience and the firm’s future while meeting or exceeding the regulator’s expectations.”  

Your are right if you say provocation doesn’t come naturally to me or it is seen as counter-cultural in the firm. Just because you are right doesn’t make it right. You are paid to achieve results and enhance the future health and well-being of the firm and its’ clients. You can idly sit by and keep your head down or you can make waves. Your colleagues, business partners and clients will thank you in the long run for provoking the firm into action.

© James Berkeley 2015. All Rights Reserved.

 

 

 

 

 

Inside The Executive Office I – Instant Value Creation

Tuesday, September 1st, 2015

In a new series, Inside The Executive Office, James provides a series of quick fire techniques, powerful lessons and ideas set in real world examples for executives, managers, Board members and shareholders to rapidly apply in their own business.

In the first outtake from a recent executive discussion on integrating two multi-million dollar insurance businesses, James explains that the business integration process requires a process of its’ own. In a rush to integrate, whether it is a traditional takeover (the smaller business being fully integrated), a merger of equals (largely a mirage to save face for executives who won’t admit it is a takeover, in everything but name) or a financial acquisition (intent to allow the businesses to operate as two separate entities in the same ownership), way too many businesses start at the wrong point (action).

James points out that there is a necessity to consider first (in this order): business outcomes, integration alternatives, and the related risks and rewards of each BEFORE determining action. Otherwise “action” is largely driven by planning rather than strategy. An extrapolation of the present to determine the short-term future of the two combined or separate businesses rather than a picture of the desired future and the steps back to today. An excessive focus of executives’ and managers’ knowledge and time spent on “easy to implement” or “hygiene” tasks rather than performance-based priorities consistent with the deal thesis.

The effect with the former is 6 months post-acquisition  a combined business that has made a swathe of largely cosmetic changes (new titles, new policies and procedures, new reporting forms) but very few profound changes (significant synergies captured, greater capital efficiency, stronger brands, increased productivity). It may operate marginally better than before the deal, at best but it is not “fit” to profitably grow and expand, at least at a pace commensurate with the competition. Indeed, it may very well be worse off, where the management distraction has resulted in missed opportunities in existing markets or the prospects for those existing markets have deteriorated at a fast pace than originally presumed.

The litmus test is “would your ideal customers and the competition honestly state that your “new” business is a more powerful/about the same/less powerful competitor in your highest potential growth markets?” The faster you can demonstrate increased power, the greater the level of value creation. Conversely, the longer it takes to get there (delays, procrastination, avoidance of disruption), the probable lower the value creation or even value dilution (management distraction in existing businesses).

© James Berkeley 2015. All Rights Reserved.

 

Unproductive Tasks In A Productive Day

Tuesday, September 1st, 2015

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Daily two middle aged men walk the beach for hours in Polzeath, Cornwall with their metal detectors. A routine they do without fail starting at 10am oblivious to distractions such as a holidaying David Cameron being harangued by desperate photographers while he bodyboards in the surf. A highly labour intense pursuit dependent on exceptional fortune and in all probability, a very modest return.

It strikes me in many businesses today that there are knowledge workers equally deployed by managers on  questionable tasks and activities. The blame doesn’t lie with the employees. It lies with their managers who consciously ignore the productivity loss (knowledge and time). Look around your business or your business partners and ask three important questions:

1. What existing tasks and activities could we do more of to aid our employees’ and our firm’s productivity?

2. What tasks and activities should we stop doing or modify to aid our employees’ and our firm’s productivity?

3. What new tasks and activities should we embrace to aid our employees’ and our firm’s productivity?

If you are thinking this is the trigger for technology replacing human resource or trite statements such as “let’s create a paperless office”, you may find you are not increasing productivity at all. Chances are you are grasping at an alternative without regard to the end-result (an increase in employee’s productive use of time).

© James Berkeley 2015. All Rights Reserved.

3 Reasons Business Leaders Should Trek To Glastonbury

Friday, June 26th, 2015

Over 250,000 people will descend on a sleepy corner of Somerset, England for the Glastonbury Festival today. For some an annual rite of passage and others an introduction to an experience their Parents still rave about some 30 years after first making the trek.  There are acts of their Parents generation (The Who and Paul Weller) and their grandparents generation (Burt Bacharach) joining today’s megastars (Pharrell Williams and Kanye West). The event is a classic example of the three “R’s”: relevance, recognition and reinvention as its’ market’s needs and ideal buyers have changed. “Relevance” in the form of is the experience what our ideal buyers need (introduce hospitality chalets alongside the pitched tents). “Recognition” that the time is now for bold changes and adaption of our beliefs (infuse rappers and uptown funk with a rock heritage). Finally a constant commitment to “reinvention” (introducing new acts to regular attendees and old acts to new attendees).  It sounds simple and when you look at market-leading businesses it is universally a trait that keeps them at the forefront of their competitor set. Yet for a great many firms and indeed sectors (private banking, insurance, legal, accounting and audit firms) it is something that they struggle with hugely. It is first and foremost a leadership issue. Great leaders are willing to champion change. They lead from the front with their eyes focused on the stage, not the disheveled hipster swaying in front of them. They listen intently and consistently ask the right questions at the right time. They apply that knowledge rapidly to the critical organisational issues impacting their firm’s future and make wise decisions consistent with the strategic direction of the business. Are those the very same traits your leadership regularly exhibits and you hire for? If not, why as a client, employee or shareholder should I return each year to listen to your tired line up of fading musicians playing music that is boring and increasingly irrelevant to my future?

© James  Berkeley 2015. All Rights Reserved.

Small and Family Business 101

Tuesday, March 31st, 2015

There is a reason I largely choose not to immerse myself in helping investors, founders and top management in small and family businesses profitably grow – emotional overload. Here is three attributes (“The Three P’s”) that anyone who wants to build a career “selling” to these firms must excel at:

  1. Patience – a willingness to live with large levels of procrastination that has more to do with the Founder’s beliefs and their subordinates views on how best to conform to those beliefs. “We demand and believe in loyalty” – excessive numbers of mid and senior employees and clients who are retained by the business despite an increasing strategic “mismatch” with the future direction of the firm.
  2. Power – an ability to line up the powerful forces in support of your ideas, insights and growth strategy and use that power to mitigate or eliminate the forces pointing their guns at you. In Boardrooms of small businesses, the power is largely drawn from the emotional objectives of the Business Owner, key investors or close counselors (reputation, standing in the community or within the firm, personal friendships etc.)
  3. Perception – an ability to tap into the key influencers’ perception of how they want the firm and its’ people to be viewed by the outside world  (clients, business partners, suppliers, competitors, friends etc). Many a reason to invest in a profitable growth alternative has as much if not more to do with perception than reality (the owner of an insurance broker who builds a HNW private client business largely because he wants to be seen as a peer of other successful entrepreneurs and executives in his personal community).

© James Berkeley 2015. All Rights Reserved.

 

The Global Reinsurance Market Uncovered

Thursday, February 19th, 2015

There is a scene in the 1973 film “The Sting” where Robert Redford’s character, Johnny Hooker an aspiring con artist keen to ingratiate himself with the seasoned pro, Henry Gondorff (Paul Newman). Redford utters the line “”Luther said I could learn from you. I already know how to drink.” I am not equating today’s reinsurance business directly with the 1930’s underworld but for any current or future participant that is an attribute sure to draw a rueful smile in a hyper-competitive market.

If you believe as I do that the future of re(insurers) and intermediaries is dependent on the wisdom of line managers to consistently apply knowledge and great judgement to organisational issues in alignment with the firm’s strategic vision, you would be wise to think about three critical issues:

1. Profitable growth mindset: this is a philosophical issue, you cannot have profitable growth if your line managers visibly don’t have the right mindset. Ask yourself, does our environment (leaders’ behaviour) actively encourage our line managers and employees to think big (ambition, prudent investment and risk tolerance, innovation, new standards of performance) or minimise risk (fear of failure, conserve cash, problem-solving, deflect responsibility)? On a personal level, are we constantly and consistently investing in their self-worth (acquiring new skills)? In volatile times, the future of businesses is largely determined by the number of managers and employees with high levels of self-esteem, not the deepest pockets. There are plenty of examples over the last three decades of brokers (Pat Ryan, Graham Chilton)  and re/insurers (Brian Duperreault, Bob Clements) who have swept past their competition for these exact same reasons. Why should this decade be any different?

2. Brand Power: Let’s keep it simple, whether you are an underwriter, broker, MGA or any other professional services firm, you are really in the marketing business. Your brand is important to your future because it is a representation of your quality. You can build and nurture it yourself or let the competition or market define it for you by default.  If you want to command a premium for your product or service you cannot be the 1500th person talking about the complexity of cyber risk underwriting or the transformative effect of alternative capital on traditional reinsurance. (Try the simplicity of cyber risk prevention or  the transformative effective of traditional reinsurance on alternative capital). You need to stand out from the crowd (try a contrarian stance).  Ask yourself is our brand(s) sufficiently memorable and powerful to:

  • Attract our ideal prospects over the next two years?
  • Weather the amount of uncertainty (future-proof) and the competitive threats (new business models)  impacting the future of our business?
  • Allow us to command a “premium” price for the value delivered to clients (Hermès, Goldman Sachs, McKinsey) or must we offer a “premium” value (Tesco, Samsung, Delta) to justify the price our customers are willing to pay for your products and services?

Then,

What tweaks or dramatic changes must we make?

The current period of M&A may lessen the competitive threat from traditional players but it may be largely irrelevant if the new entrants are gorillas encroaching on the path to your strategic goals.

3. Diversification: a spread of risk is a fundamental insurance concept, yet in many firms the call for greater diversification often feels like a response to the fire alarm going off in the boardroom.  Ask yourself, is your desire to diversify being made from a point of strength or weakness? Is it a response to competitor moves, invalid market assumptions (defensive, protect operating margins) or serendipity and planned growth (offensive, assume a distinct or market-leading position)? Is it a response to the quality of your employees and management or the amount of uncertainty and competitive threat facing your firm’s future? What hard evidence or strong anecdotal information do you possess (or can easily acquire) to demonstrate the positive impact diversification will have on your firm’s short- and long-term profitable growth? Is it in the best interests of some or all of your firm’s key constituents (customers, shareholders, employees, business partners, regulators and so on)?

In tough trading conditions diversification is often the wrong call, businesses are better making their strengths more productive. Yet the demands of assertive investors chip away at what top management “know” to be the right course of action. This gets exacerbated when their key competitors make what appear to be “enlightened” moves to diversify when they have yet to be proven as a “wise” move (the decision stands the test of time).

The future is bright. The future is not in the stars or a glass of whiskey, it is within ourselves.

© James Berkeley 2014. All Rights Reserved.

 

 

 

Acquiring Resilience

Monday, February 2nd, 2015

Yesterday’s Australian Open tennis final featured two players who had collectively won 9 majors.

The tale of the tape: Murray missed crucial opportunities in the first set tiebreaker at 4-2 to close out the set before bouncing back in the second set and building a 2-0 lead in the third set. In a dramatic few minutes the momentum swung sharply as Andy Murray’s resilience to Novak Djokovic’s consistent pressure forced a raft of errors. In the words of veteran tennis commentator, Pat Cash, Murray had a “meltdown, he gave up the fight”.

The subsequent media focus zeroed in on Murray’s collapse. That is how the media and many in business love to react. Find blame (individual), amplify the anguish (headlines), and confuse the “effects” (lack of resilience) with the “cause” (inability to convert and build momentum) because it is more visceral (suffering) and makes a better story.

How many times do you make or allow others to make the very same error when analysing defeat in a competitive tender, failing to convert a “hot” prospect into a client or establish your firm’s presence in a “hot” new market?

How YOU handle the disappointments, is the real learning curve.

  1. Do you beat yourselves up about your failure? (your shortcomings, your fees, your methodology)
  2. Do you seek to caste blame on others? (colleagues’ skills or priorities or the prospect’s people)?
  3. Do you look at what you “omitted” to do well? (Specifically, the trigger behind why you didn’t get on the plane to visit the client, the time wasted between meetings perfecting the presentation, the lack of client “trust” with your proposed approach)?

If your focus is solely on improvement (3) and you do it well, you will “win” more than you “lose”. If your attention is on the first two (taking defeat personally or deflecting it), you are setting yourselves up for repeat failure. You control your future success. You control the level of resilience within your team and your own performance. It is YOUR choice, don’t let others distract you from your goal for a cheap headline.

© James Berkeley 2014. All Rights Reserved.

 

Merry Christmas

Tuesday, December 23rd, 2014

To all our readers and friends around the world we wish you a peaceful and restful holidays. We look forward to welcoming you back in 2015 with renewed enthusiasm to accomplish your personal and professional goals.

Too often when we near the end of the year, we beat ourselves up about our failures rather than reflect on what we omitted to do for whatever reason.

1. What opportunities did I fail to invest in, support or embrace in 2014 and what was the “cause” (fear, missing competency or passion) behind my omission?

2. In 2015, what do I resolve to do better when faced with a similar opportunity?

3. What must I invest in and concentrate on to improve my performance?  (new skills, learning, technology, mindset and so on)

4. Where can I acquire that competency and knowledge? (expertise, resources)

5. When do I start? (time, date, action)

6. What is my “reward” for accomplishing that improvement? (holiday, personal time or interest pursued etc.)

 

© James Berkeley 2014. All Rights Reserved.