What has changed in your family affairs, business relationships, investments’ prospects and personal interests since February or July? My educated guess is a hell of a lot.
So if you are telling me you need to urgently boost your deal flow or business pipeline, might I suggest you call everyone you know, who you haven’t spoken to in the past 8 weeks? Starting with those people, who you know are a client buyer, prospect or investor, and emailing the rest. A very simple request, “I have been thinking about you (and your business), I’d love to know how I can help?” That is it.
You are going to hear one of three responses: (1) something you have previously discussed, (2) I really don’t know (your chance to demonstrate ways you are helping others in highly similar situations), or (3) a request for help in areas you have never previously discussed.
If we have learned anything this year, events are a catalyst for dramatic change in our lives. Someone, who was of modest or little interest, might now need your help in ways you never imagined. You can only make progress, if you pick up the phone and stay current about their circumstances.
The problem with most consumer research studies is that they date fast, declining relevance. The problem with most consumer research experts, is they think the studies give them increasing relevance to their audience and managing future risks. Classic asymmetry. Beware the advice of BS merchants with extensive credentials and big advisory brands.
How difficult is it to stand out in a virtual panel discussion or interview? It turns out, it is not easy for most. Why is it so difficult to tell the audience something that they haven’t thought about before? We are often worried about stuff that doesn’t really matter but we think it does (background, image, perception, consequences of being recorded etc.).
Here is my analysis from 70+ small and large virtual events:
By my observation, less than 20% of respondents (1:5) give a straight answer to a straight question (assuming it is sensible) and introduce something new.
Less than 50% of those respondents, voluntarily tell you something provocative and support it with credible facts, examples or stories (1:10).
Less than 50% of that group, do it with high energy, high enthusiasm and intelligent use of humour. That’s right 1 in 20 respondents.
Are you ready to hit your audience between the eyes? Let’s start by tackling these three areas. I “guarantee” you will stand out with suitable preparation and staying in the moment.
So you are approached for a leadership role in a PE-backed business and introduced to the CEO. You are drawn to the investment thesis but what about the people doing the work? In particular, the CEO’s mindset and attitude.
What alarm bells should you be looking out for before, during and immediately after your courtship? Here is a set of observations from over 90 different experiences across 9 sectors in the US and Europe with mid and large financial sponsors:
The CEO’s excessive enthusiasm for you to join is only exceeded by the volume of his or her late night gushing and suggestive calls, texts and voicemails. “I heard you have had a huge result. Wait ’til you arrive here.” “The lawyer says we have a watertight case, let’s get this done before my holiday?” “Can your family really miss this opportunity?” “Your [current firm] I have heard are seeking a replacement for your boss, how do you feel?”
The CEO, who has a track record of past scrapes but keeps coming up smelling of roses. Multiple employment fights with the competition, the harassment case that was hurriedly shut down, the CEOs of acquired businesses strewn like truck tyres on the highway and so on. Yet contrary to expectations, at the first meeting presents this charming Gaelic front, full of the craic and HUGE excitement. There is never a statement without a hyperbole.
The passive aggressive CEO, who voluntarily shares disparaging comments about his Board but professes god-like admiration for the discipline of PE investing. When they speak about about their investors, it is merely to tell you “they were clueless to the can of worms the past owner/managers left. The CDD guy at EY did a lousy job, they are toast with the GPs. The only thing Julio (the General Partner) told me over dinner, is don’t screw up. He has a ton of “carry” at risk”.
The CEO, a couple of months into your new gig pings you an email from his Ibiza sunlounger with a stream of unsolicited acquisition opportunities from his “pocket-banker”. A raft of shiny Rolex and Audemars Piguet deals. “You should really meet these people. Alex tells me we could easily get this for 5x, flip it for 12x”. Code for: “play our cards right, we can dazzle the PE deal guys now and get them off my back for a few months”. The glaring reality, of course, there is close to zero strategic fit and the ease of implementation is incredibly complex. Nevermind, it’ll be you, not the CEO, who is given the unenviable value creation plan. Succeed or perish.
The CEO, who routinely acquiesces to your highly political peers at the first sight of new market opportunity you unearth with a big payoff and little short-term personal risk (the “glory hunters”). “Don’t you think Charlie and Marcel would be a great addition to that initiative?”. Code for: “let’s not allow any of them to grab the headlines, or even, the glossy Fortune spread.”
The CEO’s “sharp right-turn” after the PE Investment Committee meeting. You meet the CEO in ebullient mood over a glass of wine after his latest interrogation with the deal and ops guys. His day brightened by the presence of the glamorous Argentinian female partner with her swept back hair and piercing blue eyes in sea of starch white collars.
You: “How did it go?”
CEO: “They are super excited with our progress. Ana told me we should move faster, don’t worry about the capital, Ares have just offered us another $400M line if we need it.”
You: “Wow, that is encouraging.”
CEO: “They love the work you and your team are creating. I knew you were my man.”
You: “That’s nice to hear.”
Next morning, the CEO hovers outside your office: “We should talk, how about lunch at 12:30pm?”
After 20 minutes hearing about the CEO’s triathlon exploits, and his suggestion for a corporate half-marathon fundraiser for a kids charity, the thunderbolt arrives.
CEO: “I was asked yesterday, if you have thought about your successor and the qualities we’d need for our value creation plan.”
You: “Why?”
CEO: “Well our deal guys had it mind that we should be looking for (the exact opposite). I tried to convince them you were it. Help me here.” (code: “Give me three reasons why our relationship must end, and I can escape the flak.”)
You have been warned. Leopards and all that. Don’t come whining to me, do your research and always have Plans B and C.
Decision-making under uncertainty has to take account of two risks: “additive” (painful but not terminal) and “multiplicative” (risk of ruin). Traditional cost/benefit approaches and predictive technological advancements (AI/Machine Learning etc.) can help successfully with the former, they cannot with the latter. There are too many variables, many unknown. A great many economists, executives and politicians don’t get that. Too many people confuse the two and try to poke a screwdriver in an electric socket.
The prudent approach is maximum precaution with the latter type of risk. Preventative and contingent action, expressed as “insurance”, not just of the contractual type but spare cash, capacity, alternatives and so on for all eventualities.
My most successful entrepreneurial clients and investors take risks that they understand, they don’t try to understand the risks they are taking as they progress with an investment. If you don’t survive, there is no tomorrow.
Are your processes (“how to’s”) “right” for your ideal business today or last year’s ideal business? If not, when will you adapt, abandon or create them? Your competition are addressing that as we speak.
How do you choose the right school for your child in these times when physical visits are severely restricted?
That is a question the UK’s private education system has been scrambling to address. 95% of schools have swapped Open Days, Mornings and physical visits for a 20 minute “school tour” video plus a large group Q&A over Zoom with the Head and a selection of the teaching faculty, and senior girls. As a remote learning experience, it is generic and impersonal.
5% of schools have defied convention. A very brief 5-7 minute Zoom intro, and then a set of pre-booked one-to-one 15 minute Zoom calls with individual teachers and senior girls that allows both the child and parents, and the school, to get acquainted, and determine whether they are right for each other.
My point is how easy are you making it for your best prospects to sense shared values, provide immediate value and build trust, and begin to form a relationship in your businesses? Are you asking them to line up at your door at a predetermined time, giving them a generic understanding of what the experience working with you might be like, and supporting your case with staged references, or are you giving them what they need to know and then allowing them to get know you and vice versa in a quick time period?
It is not difficult to see how you can stand out, if you are willing to think from the “outside-in”, organise yourselves, use time well and give your prospects what they need. Simple.
When TV moderators and interviewers grasp that shorter questions elicit more profound responses from politicians perhaps we’ll enhance our own understanding. Until then we are largely left in the dark. Bloviating journalists and politicians asking and answering self-serving questions that merely serve to bolster their own egos.
If you convince yourself that you cannot in any way build a peer-level trusting relationship with a prospective buyer of your expertise, other than by being physically in front of them, in business and social settings, you have chosen to self-limit your own success. You have a mindset and attitude issue, which will quickly become self-fulfilling, depleted cash reserves.
When you use government “work from home unless you cannot” messages as a “signal” not to even pick up a phone, arrange a Zoom call or drop an email (“pointless”), you are putting your own family’s income-generating prospects in the deep freezer.
The prime question, is not “what has happened?” or “when will this end?”, it is what are you personally deciding to do about it right now?
If you are fortunate to live in the centre of a global centre of commerce with so many people choosing to work from home, and/or uncomfortable with travelling on public transport from the outskirts, you have a huge advantage in building face-to-face relationships with existing and new clients and prospects, at a time that best suits them. Leverage it boldly.
