Posts Tagged ‘attracting investors’

Help I Need Somebody

Wednesday, January 20th, 2016

While my focus is on helping mid and large organisations with dramatic growth opportunities, I get asked by early-stage entrepreneurs for a “second opinion” on their business model from time to time. I am often bemused by these “soft” requests, as someone, who has been in the exact same stage of growth.

If you want help, by all means “ask” for it but do realise that there is a strategy and tactics to the request process.

“Strategy” in asking, what do I want to accomplish from applying the requested help? Is it a faster resolution of a past problem, validating a current decision or greater confidence in a future plan?

“Tactics” in the form of how do I get the fastest and best solution? Where external help is required how do I present the “ask” in a way that is mutually beneficial for all parties, not just me.

I come across many interesting entrepreneurs, who are clueless in these areas. Consequently, they buttonhole you at events, send “cold” investment presentations or feign interest in articles that you have published.

Can I make a suggestion? Be very transparent upfront about your intentions, find the warmest path to the “expert” and position the request in their self-interest.

I cannot guarantee, I or anyone else will give you our “free” time but you sure dramatically increase the odds in your favour.

Is that helpful advice?

© 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.

Bedtime Profitable Growth Lessons

Tuesday, September 22nd, 2015

When I read bedtime stories to my daughter, there are tales of witches flying on broomsticks, young children wandering into the forest alone dark at night and absentminded Fathers getting soaked trying to repair the garden hose. At certain points she might say “I am scared”. When I ask what she is scared of, she responds, “I am scared of what is going to happen to “X” on the next page”.

Likewise we accept challenges in profitably growing businesses, knowing that there are circumstances under our control (the quality of our management, employees and the level of uncertainty within the business) and there are others that are not (competitive threats). What we know is that if we are to develop we must increase our learning. We learn by applying our past (expertise and experience) to transform our clients’ future. Our future is a function of our resilience to events outside our control and continuing to be of value to our clients (reinvest the lessons learned in new, faster, more impressive approaches).

Lesson #1: The art of management is the ability to balance the demands of key constituents for short and long-term profitable growth.

Lesson #2: Not all constituents (shareholders, board, employees, business partners and so on) are equal. Not all demands are equal (EBITDA growth, higher pay, happier clients). Behind every demand is an emotional imperative (improved image, enhanced peer recognition, a promotion) and a logical objective (lower acquisition overheads, optimum size of business, attracting word class talent). Dig for both, orient your management approach around both.

Lesson #3: “Speed” (climbing to the next level) is as important as “quality” (existing revenue generation).

Lesson #4: Success arises in the implementation of a strategy (arriving at the desired future state), not the formulation. Credit may be given to the latter but the glory goes to those, who accomplish the former. Lee Kwan Y

Lesson #5: You start by determining what your vision is and what is “mission probable”. There are a great many visions that are possible in the conceptual world but missions that are improbable (capital, people, innovation, implementation) in the real world. There are a small number of visions that are possible in the conceptual world and mission that are probable in the real world. Don’t kid yourself because you can point to one exception, who got lucky!

Lesson #6: If you are not failing, you are not trying hard enough. It is always odds against (less than 50%) predicting the future. The best management teams are probably successful no better than 1:3 with new product innovations or international expansions. What you must believe is that when you have success, the rewards are sufficiently large to cover the losses plus the ongoing costs of profitably growing the business (payroll, pension, capex, new hires etc.).

Litmus Test: Is there someone I can point to (highly similar sector and recent scenario) who has visibly travelled the same profitable growth journey as I am seeking to pursue? Are there lessons I can apply to accelerate the speed towards our immediate profitable growth (reducing labour intensity)? Are these lessons I can apply to enhance the quality of our profitable growth (repeat business, unsolicited referrals) such that moving to the next and the levels beyond that is sustainable?

If you cannot point to a real world example, it may well be for a very good reason. The path you have chosen is improbable or the timing has never made sense previously.

Of course, there are environmental changes (technology, access to capital, demographic, social) that make the previously improbable, probable. That is where the “unicorns” (AirB&B, Xiaomi, Moneysupermarket.com) emerge from but they are the exception, not the rule.

© James Berkeley 2015. All Rights Reserved.

Decision Maker or Decision Taker

Wednesday, July 22nd, 2015

I talked yesterday to an investment manager in a highly acquisitive business at the behest of a client I represent, who thought their firm would have a high level of interest buying them. They had known each other as family friends and my client was certain his friend was the “decision-maker”. The manager’s opening line when asked about their interest was, “Are they desperate to sell the business or just figuring out a fit?” When I asked why he posed the question, he responded, “We are on a buying spree, I am just working out how fast they want to move and how much skin I would need to invest in the game (encouraging his superiors to commit)?” The last comment immediately set the alarm bells wringing. Despite my client’s assurances, his friend is a “decision taker”, not a “decision maker”, at least one, who can sign off on the deal without others approval.

I observe that 70% of the time my clients and prospects conversations with potential prospects, clients and partners ends in failure because they enter the conversation at the wrong level (not seen as a credible peer by the “decision-maker”) or worse talk to and invest time in people, who cannot say “yes” without others’ approval (“decision takers”).

Whether it is selling a business, selling a new product or service or exploring a strategic partnership, here is how to swiftly avoid spending oodles of time talking to “decision takers” and ruthlessly get in front of “decision-makers”:

  1. Be clear exactly what you want to talk about and how the “decision maker” is demonstrably better off from buying, using or hiring your expertise.
  2. Visualise exactly who the “decision maker” (by name or title in that organisation) is, who you must build a trusting relationship with and mutually-explore where you might be of help to each other. If you need others (non-decision makers) help identifying the appropriate individual, use language to position it in away that is beneficial for them (“I know you work with XXX, I thought he would be appreciative of hearing about how my firm could help transform your firm’s future and in so doing he would be appreciative you of you introducing us”).
  3. Work out the shortest, quickest route to that individual (referrals, networking, speaking etc). In larger firms there might very well be multiple “decision-makers” who you need to map out.
  4. How do you create the warmest welcome (identify shared interests, experiences, short-term needs, immediate value) to open the conversation with.
  5. What is the right mindset you need to have entering the room (“We are two peers irrespective of our past or accomplishments having a one-to-one dialogue without fear or guilt to help transform our respective futures.”)
  6. What is the best environment and time to meet the “decision-maker”? (when and where are you going to have an uninterrupted conversation, where will you both feel comfortable and rapidly progress the conversation)
  7. What ideally do you want to accomplish in that meeting and how can use the time most effectively to move towards your goals? In other words, how do you know if it has been a success and what are the signs (decision maker’s responses) that you have maximised your own time usage and the dialogue is moving in your desired direction.

The bane of every client facing person is time wasters. When you are your own worst enemy, it is time to adopt a new approach.

© James Berkeley 2015. All Rights Reserved.

 

7 Reasons To Celebrate London

Tuesday, July 7th, 2015

Today London remembers, 10 years on from the scenes of death and destruction. A city that I have called “home” on and off for 30 years. On 7th July 2005, I was at The Snow Ball in Queenstown, New Zealand with a group of friends when images flashed up on a video screen of the carnage across the city. It seemed distant and surreal in equal measure. What was the bombers’ point? The subsequent alert two weeks later and the manhunt when I was back home are a more vivid memory.

The test is what a city and its’ residents do about it.

Looking around London today, London is thriving. A global metropolis that has

  1. Attracted huge swathes of capital from across the globe.
  2. Unprecedented career opportunities for many people.
  3. The most diverse, talented and creative workforce with a global mindset.
  4. One of the most civilised, safe and secure environments to live, work and socialise in.
  5. The most compelling mix of contemporary culture.
  6. Retained its’ status as one of only two true “global cities” (the other being New York).
  7. The most exciting prospects for the next generation to grow up in.

As with all growing capitalist cities it faces distribution challenges. Adequate housing, infrastructure, health and education provision for all incomes.

The “high” security threat is a badge of honour, a reflection that those with incongruent values seek to cut down the tallest of poppies. We must hope that our security forces and intelligence are one step ahead of those who seek to destroy what we have. Can we be certain? Of course not. My memory flashes back to the early part of my career, the IRA atrocities across the city, the daily roadblocks outside my EC3 office and further afield to New York, where several of my former colleagues from my days working on 104th Floor of the World Trade Center perished.

Yet we celebrate the vibrant, innovative and exciting city we call “home” and the fantastic future it provides for our families, friends and colleagues.

© James Berkeley 2015. All Rights Reserved.

Idiotic Management: AXA Strategic Ventures

Thursday, April 9th, 2015

AXA Strategic Ventures: Least responsive corporate venturing start up. AXA, the French insurer announced with great fanfare in late February the formation of AXA Strategic Ventures. The intent being to invest in companies with the potential to shape the future of the financial industry. This is a highly competitive arena with billions of dollars being injected into early and mid-stage growth businesses by large organisations (Citi, HSBC, USAA, BBVA, Google, Intel and so on).

I brought to AXA’s attention an investment opportunity in an early-stage growth client of mine, which I reasonably felt might have a high potential fit with their publicly stated investment parameters. The General Partner responded with interest within 48 hours requesting a brief synopsis that was sent by return. Over a period of 3.5 weeks 5 offers of a “get to know you” call and an understanding of their interest went unanswered. Finally, a junior analyst responded with a polite but curt “no interest, please keep in touch”.

This is a well-staffed global organisation with a full complement of investment experts, business development and other resources. Why in the world do they think any discerning adviser or client is going to come knocking on their door when their more seasoned competitors provide a dramatically warmer welcome? How difficult is it for management to figure out that they need to proactively communicate in order to build a stronger brand and a point of differentiation with established competitors? It helps that management are exemplars for the desired behaviour and hold their subordinates to account.

© James Berkeley 2015. All Rights Reserved.

 

An Interview With Me From VOA News

Tuesday, January 6th, 2015

VOA News reporter Mil Arcega in conversation with James about global economic prospects and the impact of an end to monetary stimulus in the US on international investors and businesses:

 “Year End Global Economy”

An Interview With Me From Forbes

Thursday, November 13th, 2014

Kate Harrison, a reporter with Forbes magazine interviewed me on the fastest and most effective ways to get investors to commit to your investment proposition:

“10 Ways To Create Investor Demand When Raising Money”

http://www.forbes.com/sites/kateharrison/2014/11/13/10-ways-to-create-investor-demand-when-raising-money/