The Coffee Meeting Pitch Mistake

I was speaking with an American CEO a few years ago, just after he had been in Perth a few months.

“What’s the biggest difference between doing business in the States and here?” I asked him.

“You guys sure love your coffee meetings,” he remarked, “Everyone just rings me up or emails and says ‘Let’s catch up for coffee!’ ‘Can we do coffee?’ ‘We should do a coffee!’

“If I said ‘yes’ to all those requests, I’d be able to sky uphill!”

Yep, that’s how we roll in the great state of WA. The coffee is great, the weather is lovely, and there are plenty of good coffee shops around. A $4.50 mug of skinny flat white can last an hour, and in that time you can get a lot of business done.

The Coffee Pitch

When I assess a likely startup or innovative project that comes to me for some grant funding, I like to start with a coffee meeting.

For starters, it’s a neutral venue, so is less stressful for either party. Stress is not conducive to learning the best about a particular idea or person. You want both sides to relax, and be themselves.

I also have a very fine coffee shop just a 3 minute walk from my house, which overlooks a lake. Very nice, very convenient.

If things go well, and there is something worth considering, then the next meeting may very well be at the company’s own office. But for now, we’re in a coffee shop near where they work, or by the lake.

So we sit down, order our drinks, and start a conversation.

This is where I get to observe the entrepreneur(s) in question. How well can they articulate their idea? How well can they explain their solution, and give me a potted history of their own experience to date. I want to hear about their team, and what they have built, and the market they are attacking.

But most of all, I want to hear one thing coming through – I want to hear them tell me all about the big, global problem their potential customers have, and why those customers will pay them to solve it.

Often, this is not what I hear about.

Too often, I am feature bashed with whatever gizmo they have built. They have fallen into the simplest and most obvious trap there is – falling in love with their product.

Of course you have to build a product or service for your customers. This is the thing they are going to buy right? It has to be wonderful, disruptive, novel with superb UI.

Sure, but building the product is the easy bit.

Selling it is going to be the hardest thing. And you will only make a sale if you are solving a big, hairy problem for your potential customers.

So, the first thing I want to hear from the coffee meeting, after the initial small talk is, what huge problem have they uncovered, that no one else has, and explain why customers will pay to have it solved, and solved by them.

Forget the product for now. As you take it to market, new information will arise and they will have to make product changes anyway. If they are wedded to the product, they will be less likely to change it. So don’t tell me how great it is, and all its features. It will change. It will have to.

Tell me about the customer problem. Tell me about the customers. Who are they? Why do they have this problem? Why will they want you to solve it for them? Why will they choose your solution? How are you going to reach your customers? Why will it be YOU that solves this, and not someone else? How many of them are there?

If you are pitching, over coffee or on stage or in a boardroom, START with the problem.  First slide. First sentence.

Spend most time on this, and the rest of your pitch will flow naturally.

Because only if the potential investor or government grantor believes there is a real deep customer problem will they believe there is someone who might pay to have it solved. And only if customers pay will you have revenue, and only if you have revenue will you have a business.

Why most new products fail

A better mousetrap does not necessarily sell. In fact, most of the time, it doesn’t.

If you build it, they will come.

Nonsense.

If they come, build it.

That’s pretty much the message I try to ram into new startups, imploring them to use the lean canvas, or some such method, to ‘just get out there’ and be nimble and responsive to customers’ needs, building up their business along the way.

These days, you can get a new startup going on credit card debt, build an MVP (minimum viable product), work with your first paying customers, get revenue coming in as soon as possible, laying the ground work for a possible scale up later on.

That way, you don’t risk piles of cash. Having less money also teaches you to work smart, fast and love your early clients to death. You’ll learn the fine art of on-boarding, and how small tweaks to your landing pages can make massive differences to your conversion rates and first revenues.

The fact is that most products fail.

Studies show that, depending on the category, 40% to 90% of new products don’t last. Every year in the US 30,000 new products are launched, but 70% to 90% of them are no longer sold after 12 months.

It’s also a myth that you have to be first to market. 47% of first movers don’t make it. Sometimes, even better products don’t cut through. Better, as in ones that have distinct advantages over incumbent offerings.

Why?

A classic Harvard Business Review paper (“Eager Sellers and Stony Buyers” by John Gourville) a dozen years ago laid out the reasons, yet we still see people ignoring the advice.

Gourville’s paper is a must read for anyone looking to develop and market a new product.

People are not always rational. I’m not talking about some crazy guy you see on a train or shuffling down the street. I mean all people, as a rule. Irrational.

For example: studies have shown that if you give people a 50% chance of winning $100 and the same risk of losing $100, most people won’t take the bet. In fact, you have to offer most folks a two to three times gain over a possible loss before they are swayed.

In other words, if they have 50% chance of winning $300 and 50% chance of losing $100 then more will go for it than not. But not if the 50:50 chance of winning was $100, or even $200.

The reason, says the theory, is that losses loom larger in our minds that wins. We may know what we have is not all that great, but the costs of switching means we are happier to stay with our current lot, than strike out and go for something potentially better. Unless the odds are stacked more heavily in its favour.

Put it another way, better the devil you know than the devil you don’t.

“Loss aversion”, says the paper, “leads people to value products they already possess more than those they don’t have.”

This bias is called the ‘endowment effect‘. And it is quite strong.

The implication is that if you are trying to get people to change their behaviour (use your bright shiny new object rather than the one they are used to), then your new product better have massive advantages, well communicated and understood, before your potential clients make the switch.

In 2007 and 2008, I was happy with my Blackberry. It had email, allowed me to surf the net (chunkily, but it kinda worked) and the keyboard was on the outside, much like the PC I was used to. It was way better than my old flip top Nokia phone.

Then came the iPhone. No keyboard. I heard rumours the batteries did not last. It took me til 1999 to make the move, but after I’d started using it, I never dreamt of going back to Blackberry. Nine years on, I still use iPhone.

Many millions did likewise. Blackberry subsided and never recovered. Apple went on to become the richest companies on the planet, and is inching its way to a trillion dollar valuation (it will be the first company to do so, if it gets there).

The fully electric car may seem like something fantastic (no more petrol pumps) but if you are not sure there will be charging stations, are you really going to switch to the Nissan Leaf?

The 9x Effect

Company executives tend to over emphasise the benefits of the new product (by a factor of 3) while the consumer tends to over emphasise the benefit of their existing product (also by a factor of 3).

This means that the new product actually needs to be better by a factor of NINE if it is to be viewed as equivalent to the incumbent.

Which is why you hear of innovators talk about the ’10x’ effect, which means their new product may have a chance.

I recently saw a new agtech service that would (at least) save the user 10 times the cost of the product itself. It should stand a chance. If they were going for 2 or 3 times uplift, little chance.

Easy Sells

The best new products are those that require little change for the consumers, while providing massive improvements on the existing product.

Maybe this is why hybrid cars have made a greater impact than fully electric ones. The consumer gets the benefit of better fuel consumption, but still has the knowledge that a petrol tank exists, which is something they’ve been used to all their lives. In time, perhaps the fully electric car will out, but for now, the hybrid serves a purpose.

Another implication is that you need patience. Patience is a virtue, as I tell my children at every occasion, much to their annoyance. Customer acceptance of a new way takes time. Google, Facebook & AirBnB all took several years to take hold.

It also means that you should strive for 10x improvement. Find believers, get them to be evangelical about the new product and spread the word.

But, whatever you do, do not believe that simply because your new mousetrap is better, it will sell. It will most likely fail.

The 3 drivers of digital marketing success, that most businesses don’t have

With Australian companies feeling the pressure of digital disruption – a ‘damburst‘ if you will – new research has found three key areas that companies successful at digital marketing have in common.

The research indicates that a clear strategy, team-wide digital literacy, and using data to shape narratives inside a company correlated strongly with the digital success of Australia’s highest-achieving brands.

According to the research…

  • 85% of Australian companies believe their organisation has been disrupted by digital;
  • 51% are “somewhat confident” in their ability to execute their digital marketing strategy;
  • Only 29% of companies were “highly confident” in their ability to execute their digital marketing strategy.

The most confident companies — labelled “Digital Achievers” in the report — are on average 59% more likely to have seen 20%+ revenue growth in the past 12 months, and 6.5 times less likely to have seen a headcount decline over the last 12 months.

Although the “Achievers” said they had more people and time to execute their strategy, there was no correlation with company size — meaning the key difference was that resources and time were being used more effectively.

As far as individual skills, the marketers surveyed feel the most confident in social media and email marketing and gave themselves the lowest marks in marketing automation and SEO.

The independent research was commissioned by the Australian-owned digital strategy agency, ntegrity, in partnership with McCrindle Research, as part of their annual research into the Australian digital marketing ecosystem. Researchers surveyed 319 Australian marketing professionals between January and April 2018.

It’s incredible isn’t it that the things that are most important to the success of an Australian business are the very factors that businesses are weak at. The tsunami of disruption that is coming down the pipe at all businesses is only growing in pace and veracity, yet people seem to be looking in the wrong direction. Heads in the sand.

Once the wave hits, as it will, and is, often you hear complaints from business sectors about how ‘unfair’ the competition is, or totally unrelated things are blamed, such as immigrants or trade deals or the number of seagulls on the pitch walking clockwise.

I suppose this breeds an industry of digital marketing agencies. Certainly, all those I know in this industry – who know what they are doing – are doing very well, thank you.

It’s going to be be interesting to see how this all pans out.

Why Startups are easy, hard and mostly fail

The romance of cycling into a co working space, armed with a skinny latte, tight jeans and hipster looks can draw many to the promise of giving a startup a go.

It could have been precipitated by being chucked out of that corporate job you always hated. Maybe you’ve struggled with an itch you just have to scratch. It might be the allure of untold riches that some startup founders accumulate.

Be forewarned, startups (and I mean a disruptive, scaleable tech startup here, not a Mum and Pop café business or some gardening franchise) are about the riskiest business you can set up.

Setting up your startup is the easy bit.

For some, raising money can be a breeze too. You either have some savings, can go a few months without earning anything or can convince some investors to pop some money in.

Spending that money, well, that’s easy too. We made this mistake when we set up our tech business many years ago. We raised money, quite quickly, and then we spent it. We had an office, some staff, a website… Ta Daaa, we had a startup!

Except we had no business. We had no clients. Well, none that would pay us anything. For a while at least. They were on free trials. And when they did pay, it was small bikkies compared to our monthly costs. Cash crises, sleepless nights and arguments ensued. We almost went under, a few times, but ultimately were saved by our investors, who propped us up (put more money in) while we shaved costs (me and my fellow cofounder took no salary for months) and worked out how to make it work. This was when the business really began.

Disrupting an industry, and the way it has been doing things, is hard. Change happens slowly.

But one thing is central, and never goes away, even when people forget this during the hype and excitement of a new business or disrupter.

You are only going to succeed in business if you find a big problem your customers will pay you to solve.

That’s it.

I have met so many (too many) startup founders who have forgotten this central truth – as I did, when I set out.

Because unless you solve a problem for your customers, they will not pay you, and if they won’t pay you, you haven’t got a business.

Too many founders like to tell me the wonderful features of their app or website, gushing about all the things it can do for its users. Too few tell me what problem they are solving, and how customers will pay them to solve it.

CB Insights have published a report into why startups fail, based on 101 post mortems.

What’s top of the list? No market need. 42% of failures cited this as their number 1 reason for failing.

In other words, the customers were telling them they weren’t going to pay for whatever service was being provided, in sufficient numbers.

The number 2 reason? Running out of cash. Which is the same reason as #1. You need to allocate funds wisely, and be sensible, but overall if you had enough customers willing to pay you to solve their problems, you’d find a way to stay in business.

#3 is “wrong team”. Businesses are run by humans after all, and if they can’t get on, or work together, or have complementary skills, then things can get tougher than otherwise. But you should be able to get rid of the bad people, and hire better ones.

#4 is “being outcompeted”. Someone else beat you to it. Their product is better made or sold or solved the customer problem better (there’s that customer problem again).

#5 was “pricing/costing issues”. Do you offer a free trial, for how long? What packages will then be on offer? How good is your onboarding, and conversion of free to paid? It’s a dark art, and also a science.

Most of these and other reasons are all versions of the same essential issue – not understanding the customer and their problem.

Interestingly, the venture capitalist Bill Gross gave a TED talk in 2015 on this subject. His research showed that the single biggest reason startups succeeded was timing.

Too late, and you’re dead. Too early is better than too late, but it can be hard. Getting the timing right, when the customers and industry are ripe for the disruption you bring, is gold.

Timing, says Gross, is more important than getting the right team together, or the brilliance of your idea, plan or business model, the execution of the strategy or adaptability and resilience.

Rebekah Campbell, Hey You and Posse founder,  writing last week in the Fin Review argued that her startup mistake was raising money in the first place. Don’t raise money at all, she said, but get out there nice and lean, and be close to your customers.

You can argue and debate all this until the cows come home, but in the end, it’s all about the customer. Don’t even think of setting up a startup until you have cracked the big, hairy problem your customers are going to pay you to solve for them.

The rest will then follow naturally.

The full top 20 list is below

Selling to all kinds of people

BOLT-animals

Anyone can buy things, but selling doesn’t come naturally to everyone. That’s perhaps why 97% of home owners in Western Australia use a real estate agent to sell their home. No doubt it’s also because the agents have the experience and expertise to sell houses. It’s what they do, after all. The average person only gets to sell their house (usually via an agent) every 7 years or so.

After 13 years in teaching, I ended up running my own business and was immediately thrust into the nip and tuck of direct selling. To real estate agents! It did not come naturally to me, but I found it easier if I just acted as natural as I could. I found I could actually make sales. Some days I was better than others. But at least I could do it. I learnt new things every time I tried it.

Wind on almost 20 years and I came to work with the expert sales trainer Mark Wilensky (High Mark Systems), who is based in Maryland, USA. He taught me and my team the importance of understanding who you are selling to using something called the “BOLT” personality types.

It’s gold. And it works.

There are four main personality types, says the theory, defined by how open or closed the person is, or how direct or indirect they are. Each personality needs to be approached in a different manner, if you want the best outcome. (see Diagram above.)

BOLT stands for Bulls, Owls, Lambs and Tigers, each of the four main personality types. Everyone can be a mix of a couple of these, but tend to be more dominant in one of them, and this gives us clues as to how to interact with them…

BULLS … are DIRECT/CLOSED. Typical examples: CEOs, GMs & BDMs.

They are the classic ‘Alpha Males’ (used in the non sexist generalist sense, I have experienced females who are also very alpha). There’s not a lot of subtlety here. Bulls are direct, and closed. So they don’t give away much (closed), but if they don’t like you or what you’re saying, they’ll say it to your face (direct)!

They like the bottom line, and hate time wasters. They will ask direct questions, and want straight answers with no waffle. They hate long winded answers, so give short answers and say “would you like more detail?

They like you saying “let me cut to the chase” and “here’s the big picture”. They see things in black and white, have courage and confidence, so express these qualities when you walk in. I came across a lot of Bulls in real estate, I can tell you.

OWLS … are INDIRECT/CLOSED; typical jobs include CIOs & CFOs.

Like Bulls, they are closed (so you have to do the work), but unlike bulls, are not direct with you.

They are probably thinking “how can you prove it?”. Owls want data, proof, information. They hate “most of our clients do this” (too woolly, salesy), “probably”, “most likely” and fakery. They are risk avoiders.

They like you saying “let’s walk before we can run” or “My job is to provide you with enough information so you can make an informed decision.” If you don’t know the answer, admit it. If you’re usually enthusiastic, tone it down, slow it down. Most decision-makers within the organisation will be Owls. They have direct control over the purse strings.

LAMBS … are OPEN/INDIRECT; typical jobs include librarians, nurses, social work.

Lambs avoid conflict, so they find it hard to say no. They will drag you along for ages (indirect), so you need to cut them loose early. They will do your head in with delays, and it’ll be hard to shut them up (open).

Say things like “Let me know if you’re not convinced that we are a perfect fit.” (allows them to say no). Speak slowly, as they can get intimidated easily. You need to show them how the majority will benefit – this they like.

TIGERS … are OPEN/DIRECT; and can usually be found in sales, mid managerial roles.

They have a short attention span. Meetings are fun (open), but they’ll be quickly onto the next thing (direct). Don’t throw in too much detail, or be boring. Keep it moving, entertain them.

They like “we’ll take care of the detail, so you won’t have to.” They like dreams and big wins. “What will you do with your wins?” (they’ll tell everyone).

As a general rule, people who are strongly in one personality quadrant find it difficult selling to those in a diagonally opposite quadrant; so Bulls find Lambs very frustrating, and Tigers similarly find it hard dealing with Owls, and vice versa.

How do you spot a Bull from an Owl from a Lamb or Tiger? Listen to them.

Say your person is running late to a meeting, and you’re there at their office on time waiting. You get them on the phone. Here’s what each might say…

  • BULL (Loudly) TRAFFIC’S C$#P!! BE THERE IN 5!!! … YEAH, SAME TO YOU FELLA!
  • OWL I’ve been stuck here for 17 minutes, I’ll be with you in 6 minutes, maybe 8 or so.
  • LAMB I’m sooo sorry… I feel awwwful, how terrible of me to be late, are you OK? … etc etc
  • TIGER It’s crazy bud! Heh, sorry mate, I’ll be there as soon as I can! I’ll make it up to you.

The secret is to turn off your auto-pilot (selling to everyone in the same way) and pay attention to who you are selling to. Adjust your delivery, script and manner according to the personality. Stop the patter and listen.

Oh, and know thyself. I’m a classic Owl (analytical), with a few Tiger (stage performer) tendencies.

For more on BOLT personality types:

The Rise of the Bots

Everywhere you turn these days there seems to be another potential tech disruptor raising its head above the parapet. The topic for today is the bot.

The rather cutesy name – bot – conjures up a sci-fi future of robotic machines doing everything for us lazy humans, who might be otherwise left to sojourn on our flying chairs a la the folks in Wall-E. Set a few hundred years from now, having abandoned a wrecked Earth, people are overweight, can barely walk on their short stubbly evolved legs and bark orders for everything they want. Robots zip around everywhere doing all the work.

I wonder if we’re really a hundred or so years away from this now. I reckon it’s almost upon us. And, as for obesity, well that is certainly among us – just look at the evidence.

But let’s get back to modern day bots. A bot, or ‘internet bot’, is simply “a piece of software that runs automated scripts over the internet” (Wikipedia).

Some are malicious (such as spambots roaming the internet for email addresses they can pester or mailboxes they can take over), and some are there to do good (answering your questions or suggesting a great blouse to go with that new dress).

Whatever they are up to, they account for almost half of all internet traffic. On smaller websites, it could be 80% or more. We know that Google sends robots to check websites out, index their content, and help rank them in their search engine. This cannot be done by humans, there is just too much stuff to read.

If, like me, you have an iPhone, then you may already be used to conversing with Siri, who is (of course) a bot. Have no hands free to tap an SMS, look up a contact’s phone number or check your appointments for tomorrow? Simply hold down the screen button and Siri is there to help.

With the release of Google Home, you can now have a Siri-like service sitting on your side table to answer your beck and call – what time is it in India? what’s the traffic like on the commute today? and what are the answers to your kid’s tricky homework questions?

A short journey from here are the bots already installed on Facebook, who can answer your typed questions. It’s like talking to a real, live person, except there’s no one there. It’s a bot. Also, have you noticed how Uber has quietly slipped inside Google Maps and Facebook Messenger to be able to offer you a ride without leaving their service?

That pop up window offering you answers to your questions on that website you’re on? Increasingly likely, there’s no one there. It’s a chatbot.

Based on what you say or type, the bot can quickly provide you with answers or suggestions to your queries, and can do this 24/7. They don’t get tired, have coffee breaks or moods. They can understand context, nuance and even sarcasm. Try fooling Siri, and she’ll quickly catch on you’re playing silly buggers.

Some people feel more comfortable talking with a chatbot than a real person, especially if it concerns personal issues such as health or emotional problems.

Over on Slack, the explodingly successful messaging app used by many organisations to better coordinate internal communications, chatbots are inbuilt. They’re called Slackbots (of course), and you can program them to message someone when, say, a certain task is complete, or when some other condition was met, as well as answer questions about a project.

Slack has expanded rapidly from its 2014 start. With a mission to replace internal email, Slack rose to a million users within 18 months with 300,000 of them are paying. Its valuation hit US$ 9 billion in June.

11 million Aussies are already using messaging apps, and 4.5 million use it as their primary communication tool. There is a whole generation of youngsters and others growing up who rarely, if ever, send emails. Perhaps they never will.

It’s not just the young though – the peak age for messenging apps is the 25-34 age group and more than half the 35-54 age group do likewise.

In Australia, Facebook messenger dominates, then it’s Whatsapp and Snapchat.

As a general rule, chatbots work well inside messaging, and more ‘menu driven’ info (such as ordering a meal, with bots suggesting what goes well and selling upgrades), anywhere where there is a fairly simple user experience, such as a check list. Decision tree formats work best. If this, then this, if that, then the other. So, tailored gift recommendations work well.

Bots don’t go all that well (yet) on free flow chat, but tomorrow we could see general chat, voice, avatars or some other abstract versions offering a more conversational approach. Where we end up will probably depend on what customers want and are comfortable with.

The bot battleground will probably be fought between Apple, Google and Facebook, who each want to own that bot search and interaction experience.

Fancy designing your own bot?  Well, you can with Chatfuel, which does bots for Facebook or Motion.ai.

It might be an idea to think how bots could impact your market – how you might use them (start with Slack), or incorporate them into customer service, lead generation and the like? As artificial intelligence (AI) will only get sharper from here, you can bet the bots will be a big part of our future…

Solve problem, have business

Many of us can make business seem a little bit more complicated than it is.

Setting up a business is really easy. I did it (for the 2nd time in my life) this week . I had thought of a name, which had an available web address, a line that encapsulated what I would do, and I asked my accountant to do all the legal work. I bought a new PC and monitor to set up my home office, asked my bank to create a new business bank account and Fiverr did my logo (on 3rd attempt, but I was happy with the outcome). I tested the name and logo with some people and was met with positive reaction.

I’m not fully launched yet, but I’m on my way. The website (which will be here) is still being built. However, I do have my first paying customer.

Startups are easy!

As I have written before, startups are easy, as you are buying things. Anyone can buy things. Buy a domain name, buy a logo, office, PC, some accounting services… but it’s much harder to sell things. Get money coming back in, the opposite direction.

When it comes down to it, how you are going to get money coming in is the most important question in business, because without it, you don’t have a business. You may have a not for profit, or a loss-making organisation, but it’s unlikely to become a self-sustaining business. These days, setting up a business is so cheap (my total set up costs have come to $3,200) that you can be “in business” very easily, but unless money is coming in somehow, it is not really a business at all.

I’ve met a few people along the way who are still struggling with this fact. They have a great website, lovely content, are pure and passionate in what they do, but they don’t have a business model (a way of having money come in). They’ve tried a few things, but to no avail or not in sufficient quantity to cover costs.

Focus on the customer problem. Full Stop.

My advice to them is to stop thinking about what they want to do, and start focusing on the problem they are trying to solve for the customer. In business, the money flows in from the customer. In some cases, there are users and customers, different sets of people. One of them uses the service for free, the other pays for their use.

For example, when we started aussiehome.com way back in 1999, we thought we were building a web site for people like us, home buyers and renters. We were going to make property searching easier, by showing properties on maps on the web, 24/7, rather than forcing people to wait for the weekend papers. Fine, except the business model was a subscriptions one for real estate agents. They were our customers, the ones who paid us, not the users who used the site and found their properties for free.

So, in order to get the real estate agents to pay, we had to work out what problem(s) we were solving for them.

It took us about 18 months (post launch) to figure this out. (I don’t advise doing this post launch, as we did.) The agents’ problem was not trying to get buyers to see their properties. Buyers seek out properties. They will use whatever means they can, including driving by favourite neighbourhoods, reading sign boards, ringing up agents, waiting for the weekend and local papers…

You can rarely force someone to buy a house they don’t want to live in. What real estate agents know is that if they get a good listing (property), and present and price it correctly, it will sell (most of the time), depending on market conditions. In boom times, properties fly off the shelves. In tougher times, they seem almost impossible to budge. The poor agent can exert little influence on the market. The market is the market, as they like to remind us.

List and Last!

What real estate agents therefore want, is a great listing. List and last, as they say. In order to get the best listings, agents need ‘listing tools‘, the latest gizmo or script or shiny object that will set them apart from their competitors.

Once this penny dropped, we realised what our business was.

Give our agents listing tools, to make them more competitive over the next agent, and they might just win that great new listing.

Price and present it properly, and the property will sell. Or not, depending on market conditions.  Pretty much. It was all about the listing, not the selling.

We then spent the best part of 10 years building listing tools for our agency clients:

  • great websites that ran off our platform,
  • the ability to list on a dozen real estate sites through single data entry and XML feeds,
  • full colour gloss magazines,
  • apps and social media advice,
  • … anything to give them the edge in that pre-listing interview with the owner.

So – what is business really?

Business is all about solving problems for paying customers.

If you can solve problems for them, then you create value. If you create value, they will pay. If they pay, you might be in business.

It all comes down to relentlessly focusing in on the customer problem, and hammering away at that in ruthless fashion.

Never ever fall in love with your own product or service (the worst salesman does that). Fall in love with solving your customers’ problems instead.

~~

Photo credit: Steve Fettig, Flickr

Post Truth or Expensive Truth?

Do facts matter anymore?

The person who would go on to win the 2016 US Presidential election made statements that were true (or mostly true) only 15% of the time over the election cycle. His opponent’s statements were true or mostly true 55% of the time. Fake news was shared more than correct news. Last year, the Oxford Dictionary made “post truth” its word of the year.

Yet this phenomenon is not new. At a recent UWA lecture by Stephan Lewandowsky provided analysis that showed how Fox News (in 2010) misinformed twice as much as other news outlets (running stories on Obama not being born in the US). Even earlier, in 2006, Republican supporters in the US believed there were weapons of mass destruction found in Iraq, even after a report conclusively found (in 2004) that no such things were ever there, or found.

Post truth politics work, it would seem.

Two thirds of white males voted for the current US President, and he actually did better than his opponent in the mid-income range. The poorest actually voted for Clinton.

Despite all the lies and half truths, on both sides, supporters of each candidate believed their person was telling the truth 94% of the time. Research has shown that preconceived support is the largest determinant of whether you believe a proposition or not.

In other words, it’s become tribal. Even if supporters are shown that their candidate has told a lie, they accept this, and it does not change their support.

We like to hear good news – it’s only natural. We prefer to hear information that marries with our view of the world. Facts that differ with our own values and inner held beliefs are uncomfortable, and on the whole, we prefer not to be uncomfortable. We’re wired that way. When your team is being belted in the game, you might switch off in disgust, or start walking down the aisles to beat the traffic home. Why prolong the agony?

And then along comes social media, and we can gather whatever information we want. We can live in a cocoon of information that pleases us, whether it is true, biassed or just plain made up. In fact, Google and Facebook’s algorithm’s serve it up to us, because they know what we prefer. They know what we will pause and comment on, click and share.

Now, I’m not blaming the media, or social media, or tribalism, or how we are wired … it is what it is. However, we need to recognise this, if we are to deal with it. Because if not, then we are moving into a world where facts don’t matter, and that’s dangerous.

The trouble is that opinions are cheap and facts are expensive. Worldwide, media is trying to find a business model that will pay for facts, now that the former business model (classified and display advertising) has moved online. Some media don’t care as much as they used to about facts, and peddle opinions, or just promotions.

Yes, media should have seen it coming, but that’s easy to say in hindsight, and what move should they have made anyway? Were they always going to be bowled over?

True, truth is in the eye of the beholder, but we have seen instances (at the highest level) of just plain faced lies (proven lies) being waved off and ignored, as if at least trying to say things as they are is in itself unimportant.  It’s not how things are anymore (people don’t want that), it’s how they make you feel.

I don’t know what the answer is, but I’m out there looking… answers on a postcard please.

Is your twitter account yours?

Does a company have the right to your twitter account after you leave their employment? Are they in control of what you send out while you work for them? Should they be? Can they be? Does it matter?

These questions have vexed many a business owner and manager, and I’d like to share some of my own personal views on the matter.

I believe that if a member of staff has their own twitter account, with their own name, whether created before or during their employment with us, it is their property.

Take for example, someone called Jo Smith…

If their account handle is @josmith, that is their name, and they will take it with them if and when they leave. The account itself is not company property, nor are the followers of that account.

If they tweet as themselves, they may tweet about their work and/or their own life. Being employed is part of their life, but not all of it. I would ask that if they tweet about anything official, something about us, and even perhaps about something unrelated, they do so with all due respect and realise that as part of their life is being employed with us, they take that into account. I would ask them to be courteous and wary of what they post, and that everything they send out (once sent) is permanent. Even a deleted tweet can be retweeted (or screenshotted) before you get a chance to delete it.

We provide coaching tips and guidelines to all staff members, and sometimes sessions, on how to use social media at work – the traps, the way it can work, how it can benefit their and our brand.

I believe a twitter account is very different to a staff member’s official email account (which absolutely is company property, including its name being that our company brand forms part of the address, and is run off our servers).

When and if Jo moves on from our employment, he or she can take their twitter handle and account with them … but not their email account. Their own name is Jo Smith and belongs to them (not the company), and so @josmith, and all its followers, moves with them.

To be honest, their twitter account is not much use to me after they leave anyway, even if I insisted I retain it. Their contacts, or followers, followed them for various reasons, and enjoyed (or not) their content. I don’t believe I have the authority to take over their persona, even during their employment with me, and certainly not after it. Even if I did, what would I do – carry on tweeting as them? Change the name and twitter handle? That’s deception.

I have noticed some companies (such as the ABC) have some of their reporters use a twitter handle such as @josmithABC, which presumably is created when they join, and ties Jo’s twitter account to the ABC, and only the ABC.

I actually don’t follow this policy because, what happens when Jo leaves the ABC? Are you going to rename his twitter account, take it off him, and give it to someone else? Shut it down? Plus, if you do this with all your staff, then they will have to start their accounts from scratch, and it can take a long time to build up connections and followers. What happens to their personal ones? Do they now run two?

I would argue that when Jo joined me, he or she brought with them everything learnt prior. Their skills, experience and yes, even their social media nous, was what I was hiring. When they leave, that walks out the door with them. When they arrive, I benefit from all their former employment and education and experience (this is what I am hiring, after all), and when they leave, that leaves too.

I try to treat all staff the same. If they have their own social media accounts (most have several), then our social media policy does remind them that whenever they use it, part of their audience knows they work for us, and for them to be respectful of that. We have a public persona, a brand, and that needs protecting, and hopefully, building upon. They do too.

On my own twitter account, which I started in 2009, two employers ago, I clearly state who I am, and that any views are mine and not of my employer. However, I always try to use my accounts to the best of the company’s goals, by liking and sharing content (but overly so, so as to annoy my followers) as part of my overall social media strategy.

See > https://twitter.com/ChazGunningham

Social media has developed into an important communication tool, and like the computer, phone and pen and paper before it, has its own foibles, pros and cons as compared to other forms of communication. What one needs to remember is that this form of communication is now permanent, and that proper staff coaching, including providing clear guidelines, tips and traps, is essential these days.

Company Directors Course – 5. Board effectiveness

CDC - board effectiveness

The final day of the company directors course focussed on board effectiveness –  what is it? how can it be managed? what’s best practice? what are some of the traps? The first half involved long time board recruiter Mike Horabin sharing his vast knowledge and decades of hard won experience. The second half involved us being put into a live case study, where we each in turn acted out as a presenter to the board, an observer of the board, and being a director on the board on a separate agenda item. It was the high point of the week, and a strong conclusion to the proceedings. 

There are so many takeaways from this course, so here are just a few more to add to those already posted about the board’s responsibilities and decision-making, duties and the law, risk and strategy and accounts, solvency and finances

  1. Boards are charged with coming to sound conclusions, concentrating on the proper items in front of them, with concise, well prepared information. They need a good mix of people and skills, have leadership from within (Chair) and provide leadership to the company. Overall, they are there to add value.
  2. Good boards provide calm decisions in times of crisis, are not rushed or panicked.
  3. They are a pool of wisdom, and are there to guide, mentor and assist management.
  4. Individual characteristics of good board members include: integrity and honesty, relevant experience, strategic thinking, good communication skills, wise and battle scarred, inclusive, good team player, adaptable, willing to change their views, courageous enough to ask difficult questions, are independent, decisive and have good instincts.
  5. High performance boards can have tough conversations but still reach decisions and be productive; they respect each other, trust and share in an open environment.
  6. The ‘magnificent 7‘ things a board needs to do are: lead with the right culture, develop the best strategy & pick the best CEO (then these others become easier ->), manage risk, monitor performance, ensure compliance & maintain good shareholder relations.
  7. The chair’s role is crucial – they are elected by the board, their relationship with CEO is pivotal, and they can only continue if they have the backing of the board.
  8. The Board should manage their own secession; most of the time they should try to get a new member on board before the other departs, and then have their position ratified at an AGM; they can come on as casual for a few months beforehand.
  9. Board committees must have clear terms of reference, time frame, its own Chair (good training ground for future chairs) and make recommendations to the main board.
  10. If you don’t agree with the way decisions are going in the main board meeting, by all means meet other board members, but make your points and do a paper to the next meeting if needs be. Talk to the chair; don’t thump tables, and if the decision goes against you, abide by it. Don’t form factions.
  11. Develop a “Matters reserve list” which shows which matters require sign off from Board, with the implication that all else can be handled by the CEO and management. Review this regularly.
  12. A board calendar should outline what needs to be dealt with throughout the year – monthly, quarterly, six-monthly and annually. Board meetings should last 2-3 hours, but can be half days, and in some indigenous organisations might last 2 days.
  13. Culture is crucial and central; it’s not fluffy, it’s hard nosed, but a good corporate culture can lead to so many good outcomes. “Culture is how people in the organisation behave when no one’s watching.”
  14. If Chairs disagree on the direction of the discussion, or how consensus is forming, ask a question. Monitor how bad news gets to the board – is it disguised? embellished? hidden? slow? Ultimately, boards need the bad news quickly.
  15. Papers to the boards are legal documents, as are your notes on them if they are kept and a legal case starts. After that you cannot destroy them, they are evidence. Minutes should be published within 48 hours of each meeting.
  16. Finally, take time to reflect as a board and as individuals, with each other – what can we do better? how did the meetings go? how good were the papers? were our decisions correct/best? have we added enough value? what can be improved?

Overall, the company directors course was a high value 5 days, and brought home the complexity and skill in group decision-making around the board table, how to search for answers, the importance of asking the right/tough questions. It’s made me reflect on how challenging it can be, but how vital it is to do well. It’s made me realise that this is something I want to do, in time, and something where I think I can contribute.

Over the next 3-5 years and beyond organisations are going to be challenged like never before with the rapid changes in technology, cyber security, digital disruption, the sharing economy, robotics, driverless cars, connected devices, the Internet of Things and much more besides. Who knows what jobs will exist for our children in 10 or 20 years time? Probably they have not even been thought of yet. Whole industries will disappear, and new ones will be created. Businesses that cannot stay relevant will fade away. Others will start up.

I would like to be the ‘digital guy’ who sits on various Boards, thinks strategically, and assists organisations make the transition from old way of doing things to the new. It’s exciting, and challenging, and something where I can probably add value. What can you add value on? Are boards something you might be interested in? If so, I highly recommend the AICD company directors course.

… and now I have to do my exams and pass this thing!