M A G A Z I N E
What is an Entrepreneurial Genius?
DECEMBER 2012
Let’s NOT Talk About Brand. maxiom
W elcom e
About Entrepreneur’s Edge: Publisher Maxiom Group Pty Ltd 2/710 Collins Street Docklands Vic 3008 www.maxiom.com.au Editor Jo Poland Digital Magazine Created By Maxiom Digital www.maxiomdigital.com Advertising Enquiries 1300 855 696 (within Australia) + 613 8199 3486 (International) advertising@maxiom.com.au Editorial, Media Releases & Article Submission magazine@maxiom.com.au
Welcome to the December Edition of the Entrepreneur’s Edge Written by some of the world’s most exciting entrepreneurial minds, the Entrepreneur’s Edge focuses on cutting edge business strategies that business owners can implement in their business today! The Entrepreneur’s Edge is a great resource as it provides guidance for business owners to develop ideas and concepts from their peers and leading edge entrepreneurs and organisations. Boasting exceptionally high quality information, tips and advice, every issue is packed with unparalleled levels of value added content including videos and webinars. Best of all, it’s completely free and open to everyone!
Contributors For This Issue:
A Message From Tom Poland Hi there and a very warm welcome to the launch issue of the Entrepreneurs’ Edge.
Thomas Kessler Malcolm H.B. McDonald Andrew Brown Holona Lui
The purpose of this publication is to foster and grow the entrepreneurial spirit across Asia, Australia and New Zealand and thereby benefit families, communities, countries and the region as a whole.
Marty Zwilling Naomi Simson Margaret Heffernan Ian Altman
A part of the uniqueness of The Edge is its “by entrepreneurs, for entrepreneurs” nature. We limit the number of entrepreneurial world class advisors to no more than 20% of contributions and the balance come from the owners of successful multi-million businesses.
Mike O’Hagan
Every week our team of contributors are being joined by more entrepreneurial colleagues who are willing to give freely of their time and energy without thought of return.
Michel Hogan
I am inspired by their passion and sense of purpose. I hope you will be too. Strategically yours, Tom Poland Founder and MD, www.8020Center.com
maxiom
Mark Fernandez Apoorve Dubey Gabrielle Dolan Morris Miselowski
Kristin McNicol Dr Gene Landrum Mark Matthews
Entrepreneur’s Edge is proudly sponsored by:
Entrepreneur’s Edge | 3
M A G A Z I N E
What’s in this month’s Magazine? Regular Features Page 3:
A Quick Word With Tom Poland
Page 54:
Getting To Know You
Page 16:
Cutting Edge
Page 17:
Bargains4Business Deals of the Month
Profiles Page 54:
Miichel Hogan
Page 90:
Mark Fernandez
Special Features Page 6:
25 Tips to Ensure Your Start-up is a Success
Page 14:
Why being a Good Presenter is no Longer Good Enough
Page 16:
13 Trends for 2013
Page 20:
Physically Here, Virtually There
Page 22:
The Failure of RFP’s in Hourly Billing
Page 24:
The Most Productive People I Know
Page 26:
The Traditional Fast Food Model Has Just Been Killed
4 | Entrepreneur’s Edge
DECEMBER 2012
13 Business Trends & 13 Consumer Trends for 2013
Special Features Page 28:
Mastery of the Can-Con Dance
Page 32:
The Tyranny of Budgets and Forecast and Consequences
Page 36:
What is Cultural Awareness?
Page 38:
Outsourcing For Best Results
Page 42:
5 Thing Candidates Hate About Your Job Application Process
Page 44:
How to Propose Fixed Price Proposals for Complex Projects
Page 46:
Cut Costs, Improve Efficiencies, Convert From Face to Face Reps
Page 48:
Put Your Franchise In First Place
Page 56:
What is An Entrepreneurial Genius?
Page 58:
Integration of Your Sales & Marketing Organisation Pre and Post Merger
Page 64:
What Breaks Us Often Makes Us
Page 68:
Why Training is a Complete Waste of Time and Money
Page 70:
Could Your Sex Determine What You Are paid?
Page 74:
Let’s Not talk About Brand
Page 76:
10 Avoidable Mistakes Cause Entrepreneurs Much Pain
Page 80:
13 Consumer Trends for 2013
Page 88:
Why “Time & Materials Not to Exceed” is Stupid
maxiom
Entrepreneur’s Edge | 5
ENTREPRENEUR | Edge
25 TIPS TO ENSURE YOUR START-UP IS A SUCCESS By Apoorve Dubey
It is rare to find a successful entrepreneur who does not love his work. The equation is pretty simple: you need money to sustain the company but passion to start it. Mistakes are part and parcel of the job. Entrepreneurship is not for the faint hearted.
passionate about their work, seem to hang in longer and triumph against all odds. While every entrepreneur starts It is rare to find a successful with a dream of making a dent in entrepreneur who does not love the universe, most end up his work. It is the joy of work that discovering that it is more about keeps one going in the turbulent survival. Skepticism looms large times. It is about defying logic, and the struggle is often tougher building dreams and achieving than expected. The challenge is the impossible. In to deal with the ups and downs. entrepreneurship, things never go in the anticipated direction, The initial euphoria of a new almost never. company subsides and eventually one has to face the Entrepreneurship is a risky real world: a place full of business. But risks can be skeptics. An entrepreneur must eliminated with proper planning learn to cope with all these things and by employing a well and still remain focused at work. measured approach. Here are a few things that every The equation is pretty simple: entrepreneur must know before you need money to sustain the taking the plunge. company but passion to start it. They say money is not the goal 1. A great team but a by product of an excellent product or service. Most A great team is a must for any entrepreneurs quit when it gets company to sustain itself. The tough, but those who are team should have like-minded people with complimentary skill
6 | Entrepreneur’s Edge
sets. The bottom line is to aim to cover as many areas as possible. A great team also comprises people with deep knowledge and expertise in their domains. The Entrepreneur must clearly assess himself as to what he brings to the table. A complimentary team of passionate individuals with the commitment to work is what you should be looking for. It is important to have a cohesive team, especially when things are not going well. Passion for work is infectious, a negative person will never move people. 2. Know your business Great entrepreneurs figure out the most important things that drive their business. They are as follows: â—? Core values of the start-up.
maxiom
● The purpose of the company.
product/service? Is it global or local?
● Envisioned future.
● Is the start-up scalable?
● A detailed description of the work involved.
● What is the investment involved in launching the product or providing the service?
● Team and team member roles. 3. Assess your start-up
4. Assess the competition
It is all too easy to say, ‘Our Ideas rule the world, but only product is unique, with so many when they are executed properly. features and a great technical team, etc.’ The acid test lies in The product or service you are careful analysis of the dealing with must have competition. Analyse the sustainability, and not a me-too competition before you begin. approach. Work out the details of executing the plan. What differentiates your product/service? Is it feasible to A start-up must find its niche compete with the existing before venturing into the hostile players? world of fierce competition. Every start-up needs to answer these Everybody has something to questions: promote. It is how creatively you can put your idea in the market ● What is your product or that decides how much success service? What will differentiate your product it eventually gets. Be creative and promote your products/services and services? to get maximum traction. ● Who are your customers? What do they want? 5. Swallow your ego ● \What is the size of the market for its
maxiom
himself, he has to often do what is in the best interest of the company. The best entrepreneurs are driven by the best ideas, not necessarily their own. Egoistic people are unattractive in nature, whereas entrepreneurs need to be magnetic. Entrepreneurship and ego do not go together. It does not matter who gets the credit; what matters is what is established. 6. Integrity Integrity is the foundation on which a company is built. If the foundation is weak, the company cannot sustain itself. Integrity is consistency of actions and words; it is how a brand is built. The most influential brands are built with integrity in their actions and that is how the customers develop respect for the companies. 7. Workforce diversity
It is good to have a diversified group of people as opposed to An entrepreneur needs to ask for having people of the same culture or background. help, he needs to promote
Entrepreneur’s Edge | 7
ENTREPRENEUR | Edge
People from different backgrounds, cultures and nationalities add richness to a team. Each individual brings something different and adds value. 8. Quality of the board members Board members can directly influence the results of a company. They are important because of their inherent networks, experience, skills and the mentorship they offer. For a start-up, it is a must to have a great board.
forget to ask the most important question: Who cares? Is there someone who is interested in your idea? Is there a market for it? How are you going to sell it? Talk to people before you develop anything. Figure out how many people are interested in your idea. It is important to evaluate the feasibility of an idea before taking it up. Analyse the idea, the basic requirements for it and the factors needed to sustain the idea.
Great companies are built 10. Check the source of around great mentors. This includes directors, advisors, and funding people with technical ability to No matter how much petrol is in drive things. the tank, refuelling will be needed at some point. Every 9. Test your idea entrepreneur must assess the It requires more than a business funds at his disposal and figure out how much capital will be plan to validate your idea. needed and when it will be needed. Designing and developing the product is easier; selling is the When a company scales, it tough one. needs funds. Choosing the best funding option is important to the Most entrepreneurs with a growth of a company. It is technology background often
8 | Entrepreneur’s Edge
important to be aware of the various ways for raising funds friends and family, self funding, VCs, banks, angel investors, incubators and IPOs going public. 11. Create or cater a need When dealing with products and services, there is no place for mediocrity. Excellence is the need of the hour. It is hard to sustain something that is not world class. Entrepreneurship needs conviction to try something new, something that does not exist. There are two ways to sustain a business - either you cater to the needs of the client or you create the need yourself. The iPod is a classic example of a product that created its need in the market, whereas ecommerce is an example of finding a new solution to an old problem. 12. Recruit the right people A start-up is built around the initial people it recruits. Recruit people who are self-driven and are willing to go the extra mile.
maxiom
It is very important to streamline the accounts and finances from the beginning. Most entrepreneurs, especially those with a technical background, do not understand finances. However, businesses cannot be run without an understanding of money. 15. Equity of company Decide beforehand the stakes involved in the business. The start-up is a very early stage, but one needs to have a fair idea of Hire the best talent to do each It is important to consider your how the equity will be distributed. job. Never compromise on the exit strategy when starting-up. Many start-ups fail when there is quality of people. contention in distribution of the The most common selling option equity. Find experts and let them take is to be acquired by another control. Let them have the centre business, a private investor or The founders and the board must stage and make decisions. Let management. Some businesses lay everything out clearly before the best people handle the work also go for mergers and IPO the team. A rough guideline that and drive things. Build a team -- (Initial Public Offering of shares) most successful start-ups follow people tend to bring out their as an exit option. for equity is as follows: best when they are collaborating ● Founder/Board/Mgmt 33% rather than competing with each 14. Working capital and other. finances ● Venture fund: 33% 13. Work on the exit plan Most entrepreneurs neglect the exit option. They find it difficult to comprehend selling their business or other exit options.
maxiom
How much working capital is required? How are the finances going to be managed?
● Employees: 34% 16. Uncertainty The route of a start-up is unpredictable, to say the least.
Entrepreneur’s Edge | 9
ENTREPRENEUR | Edge
The people on board should be prepared mentally to go through this tough journey and deal with any sort of challenges.
19. Understand the legal ramifications
Sort out the legal issues in the planning phase itself. Know what Whether it is a complete change is needed and when it is needed in technology, financial crunch, product failure, internal conflicts, 20. It takes time damage by nature, or dealing with loss of people, one cannot Even the genius of Edison took afford to let the situation dictate more than 25 years to make an terms. electric bulb. It took 20 years to develop the Xerox machine. 17. Encourage failures/success alike The greatest of ideas are not always magic. It takes time to Everyone is bound to fail. build great stuff. It needs a real Mistakes are part and parcel of big effort to build something that the job. Never discourage a can create an impact. Give person for failing. Risks, sufficient time to try things out. experimentation and repeated efforts pave the way for the However, sustaining a start-up success of a company. becomes tougher with time. Ultimately, one must find the time 18. Sense of urgency to try new things. The clock is ticking every second. For an entrepreneur, it gets tougher to sustain momentum with passing time. One can never take anything for granted. Each moment lost in a useless activity is a moment taken away from building the company. Everything adds up and matters in the long run.
10 | Entrepreneur’s Edge
● Brand quality is when they trust the quality. ● Brand association is the attitude or feeling towards a brand, call it affinity. ● Brand loyalty is when they begin to recommend your brand to family and friends. 22. Power distance Communication is the greatest asset of a start-up. When teams communicate and collaborate, great things are possible, but when there is a communication gap, things are messed up. How accessible is the senior management? If the distance is large, it means that there are lot of people involved in the process and at times, this may take a longer time for decision making.
21. Creating a brand Even start-ups need to create brands. There are four stages included in the process: ● Brand awareness, which means people begin to recognise your existence.
The need is to enable communication between groups and allow the best ideas to find their way through the ranks into the products and services.
maxiom
23. Know when to step back
25. Be flexible
One needs a good structure to be in place to make people replaceable.
The life of an entrepreneur is about living on the edge. It is a very tough job. Most of them work hard, yet the majority of start-ups fail. All is not rosy. Be honest and assess hard before jumping into entrepreneurship. One needs to be prepared to work tirelessly, even without results.
It is important to have a system wherein others can take charge when the founder members step aside. A company is never scalable when it is heavily dependent on particular people.
Research shows that most business ideas fail. Most companies start with one idea 24. The right pricing strategy but succeed with some other idea. They gradually find their way to a better idea or Deciding the cost for a sometimes even refine the initial product/service can be a tricky job. A lot of start-ups fail because idea. They take a proactive they either put too high or too low approach, expect problems and find solutions in advance. a price for their products and services. Be open, be adaptive and don't A careful study of the resources hang on for too long with the spent for the job, market analysis same approach when things are and time spent on service needs not working. to done before the correct price “When you try long and hard for can be decided. anything, eventually, a moment comes, when it happens. The An effective pricing strategy is paramount to the success of the important thing is to keep trying until that moment comes.” product/service.
maxiom
Apoorve Dubey
Apoorve Dubey is the founder and C.E.O of Kreyon Systems Pvt. Ltd, an IT and mobile application development company. He is also the cofounder of Master Mentors Advisory Pvt. Ltd, a premier consulting organisation with global footprint and collective management experience of over 300 years. Apoorve is the author of the international best-selling book, “The Flight of Ambition,” published by Macmillan, and coauthor of “Successful organizations in action”. To know more about Apoorve and his work, you can visit www.theflightofambition.com
Entrepreneur’s Edge | 11
12 | Entrepreneur’s Edge
maxiom
maxiom
Entrepreneur’s Edge | 13
LEADERSHIP | Edge
WHY BEING A GOOD PRESENTER IS NO LONGER GOOD ENOUGH By Gabrielle Dolan
Conceptualize Connect Inspire Becoming an inspiring presenter can have a positive ripple effect on everything you do in business and this is true whether you are a business leader, marketer, entrepreneur or business owner. Why is being an inspiring presenter important? Why isn’t it OK to just to be OK, and why is ‘good’ no longer good enough? In an age where most people can pretty much find out everything they need to know from a Google search, just providing information is no longer good enough. Your customers, potential customers and employees most likely have access to the information. What they are looking for and need is for someone to help them make sense of the information. Daniel Pink, in ‘A Whole New Mind,’ articulates this when he says,‘We
14 | Entrepreneur’s Edge
have moved from the information age to the conceptual age and the people who will succeed are not the people that just provide the information but the people who help others conceptualise it.’
an inspiring leader - because he was an inspiring presenter.
Like it or not, every time you present ,people are making judgments about you. Yes they are critiquing your presentation If you are an entrepreneur, being style but more importantly they a good presenter versus an are making judgments about your inspiring presenter may be the ability as a leader, judgments difference in securing investor about your ability as a business funding or not. owner, a future employer, a future supplier or partner. If you run your own business or are pitching for work, being OK Consequently, if presenting is or good instead of being part of what you do, it’s important inspiring might mean losing to realise this because suddenly customers and business to a that 60 minute presentation or competitor. sales pitch takes on a whole new meaning. If you are a leader, being an inspiring presenter may just That presentation has the ability result in the next promotion. Look to impact, either negatively or at Barack Obama. He won the positively on your future success. American Presidency because It truly can have a ripple effect, people truly believed he would be both personally and professionally.
maxiom
So if we understand that good is no longer good enough and we need to aim to be an inspiring presenter, it’s worth spending some time defining “inspiring”. When we define “inspiring”, we tend to use words such as ‘motivational’, ‘moving’ and ‘influential’. We believe an inspiring presenter always does two things.
you will not be an inspiring person to work for, you will not be someone they want to do business with. This is the painful truth and why being good, is no longer good enough.
Being an inspiring presenter becomes critical because every time you present, it is an opportunity to sell yourself, your They connect, and they influence company and your message. people to act; and they do this from a place of authenticity. And every time you use that opportunity you seize the chance By “connect”, we mean they to have an impact, to influence connect with their audience; the and to create a positive ripple audience relates to them and effect. their messages. By “influence”, we mean they influence action – this could be as varied as getting their audience to think about something differently, to providing funding or engaging their services. So right or wrong, fair or unfair, if you are not inspiring when you present, people will assume you will not be an inspiring leader,
maxiom
Gabrielle Dolan Gabrielle Dolan is an expert in communication and thought leader in storytelling. She is co-author of ‘Eliminate Death By PowerPoint’ and codirector of One Thousand & One, which run public and inhouse workshops on Making Good Presenters, Inspiring! To contact Gabrielle or for more information and workshop details, go to: Web Site: www.onethousandandone.com. au
Twitter: http://twitter.com/onethousan dand1
Entrepreneur’s Edge | 15
CUTTING | Edge
13 TRENDS FOR 2013 By Morris Miselowski
In 2013 we will see an Australian election that is bound to slow business down and the economy for a couple of months. We will see Europe and America continue to build a new normal around their economy’s and future as they continue to grapple with the legacies of the past. New Zealand has it’s own decisions to make independent of international circumstances or influence. We will see a year where innovation will become the buzzword as we move out of a relatively deep cycle of global negativity and doom and gloom to one where we see possibility and renewed hope.
We know all this stuff is out of there and most probably could be useful, but how do you begin to make sense of it all. Welcome to the next frontier and the next set of tech billionaires.
The rush is on for data gold and we will see a slew of one stop digital solutions that offer to make sense of all of your fractured information and turns it into one screen profitable My 13 trends for 2013 to look out wisdom. for include: 2. Mobile everything – this may 1. Big Data – The answers we sound old and ordinary, but the seek have got to be hidden first mass used smart phone was somewhere amongst all this data only 5 years ago and the shift to that’s we’re drowning in. Internal this becoming our default records, online information, personal assistant and digital social media chatter, third-party best friend has been quick and providers, and the list of taken for granted. As we information sources go on. continue to take great big gulps 2013 is only days away and it’s already set to be crammed with innovation, gadgets, new thinking and challenges..
16 | Entrepreneur’s Edge
of digital oxygen from our devices, our addiction will only continue. In this post iPhone era, where our desire for mobile gadgets will be far less brand dependent and more about features and cool and Apple, as cool as it is and was, will start to lose its’ cool. 3. Appy Days – an industry that hardly existed 5 years ago is now mainstream, a viable career choice set to turn over $12 billion next year. It has quickly moved beyond from just being about angry birds and games, to having a serious business side, with these little digital front doors keys poised to be the death knell of traditional websites.
maxiom
4. Bring It All Together – we want everything now and in one place and that’s exactly what we’re going to get. Much of next year’s innovation will take lots of seemingly disconnected bits and pieces from lots of different places and put them together into one easy to use and purposeful space. The travel app that gives you a true door to door experience, booking you a taxi from home; let’s you know if the plane is on time; checks you in; informs the hotel how far away you are and checks you into the hotel, and guides you to your room when you get there and opens the door for you.
Every great sci-fi movie has this as a basic staple and now it’s going to become common in an office and living room near you. Mobile devices, ATM’s, cars, homes, TV’s and even fridges will know your face and let you in. Want to change channels on the TV, don’t reach for the remote, just swipe your hand in mid-air.
and talents, but also disbanding and moving on, or having multiple co creative experiences.
9. Chameleon Computers – BYOD aka Bring Your Own Device – one screen multiple uses in multiple places. It’s a work computer by day, a play computer by night and a friend in your handbag when you’re out 7. Goggles – 2013 will see the and about. No it’s not 3 separate start of a new evolution in devices, it’s just the one device personal viewing displays built-in you carry with you everywhere to ordinary looking spectacles. you go and this is newest fad in Google and other developers all businesses providing computer have versions of the heads up hardware to their employees. displays buried in glasses due for release in 2013 and although 10. 3D Printers – need a it will take a while for them to replacement part for your tractor, 5. NFC – Near Field come down in price and become but can’t get it delivered for two mainstream they will find a Communication, or a technical weeks. No problem, print one out thingy that casts a virtual net from market. of your very own 3D printer. This your mobile device to digitally love child of Star trek’s “Beam connect you to your surroundings. 8. Co Creation – stop doing it me up scotty” and your old fax This one has been in the wings on your own. There has been a machine, is the next big industry for quite a while and we came fundamental shift in management and will bring with it a close to a launch in 2012, but style and business separations in fundamental shift in the way we 2013 is make or break time for it. the last decade. manufacture, buy, deliver and innovate. 6. It’s not rude to point / I One where collaboration and co creation have overtaken control. know that face – mouse and Business of all sizes are keyboard – they’re so last synergistically coming together to century. 2013 is the year of the achieve common goals and gesture, face recognition and ambitions, sharing resources voice.
maxiom
Entrepreneur’s Edge | 17
CUTTING | Edge
11. Head in the clouds – Our insatiable hunger for 24/7 access to all of our information regardless of where and when we are, has now found a new savior in the heavens.
Fashion, food and fun will also receive new twists on old themes as they make their comeback, yet again.
13. IP and Patents are becoming obsolete – First Cloud servers are becoming our person to market advantage has preferred and trusted digital never been more important than storage locker as we move from it will become. just storing our emails there to trusting it with our digital lives. With the world-changing so quickly and innovative ideas 12. Out with the new and in abounding the timing involved in with the old (in a new way) – legally locking down ideas, everything old is new again. In innovations and inventions is this world of ever-changing becoming less practical and “things” we are turning to the advise from top legal minds past, with a great big dollop of seems to be protect your nostalgia, to reinvent what we’ve innovation as much as possible, already had. but don’t let it stop you being first to market. Expect social media to become ordinary. For Facebook, Twitter and other conversations to become less “full on” and for us to become terribly blasé about all of this. New digital possibilities, apps and businesses will rise to refresh and update traditional offerings.
18 | Entrepreneur’s Edge
Morris Miselowski Business Futurist | Keynote Presenter | Strategic Advisor The highly-regarded principal and founder of Success through Focus since 1981, each day, he consults with business leaders around the globe, helping to shape their businesses so they can be first to take profitable advantage of tomorrow’s business opportunities. Morris foresees an unlimited future for those companies which take the time to prepare and strategize for the future NOW. Blog: BusinessFuturist.me Website: BusinessFuturist.com FaceBook:
FaceBook.com/BusinessFuturi st
maxiom
maxiom
Entrepreneur’s Edge | 19
CUTTING | Edge
PHYSICALLY HERE VIRTUALLY THERE By Morris Miselowski
The Year 2020 is only eight years away and for many it holds the romantic promise of how different life and business will be, but will the reality live up to the expectation? 2020
Tomorrows’ workplaces and thinking
Where once we may have jealously guarded our intellectual property and unique know-how, In 2020 we will hold the 32nd Olympic Games and it will be a The eternal core of an innovator we will instead choose to seek out ways to leverage and make leap year. Australia population is underpinned by a childlike will be around 25.5 million. Baby curiosity; a “why not” and “what if” best use of these by forming boomers will be 58 years old attitude to every possibility they alliances with other business and providers who service similar plus and one in five of us will be encounter in a daily fresh new over 60 years of age. The world; a strong intuitive belief in and complimentary markets, knowing that in this collaborative median Australian age will be 40 how the world is evolving, all with a life expectancy of 81 for a balanced by a strategic old-world offering there is strength, growth male and 86 for a female. whole of business pragmatism. and profitability for all involved. 2020’s workplaces will need to be adept at uniting a physically present tribe of employees with a tribe of offsite and often transient staff, specifically chosen for their ability to add value to the task or project regardless of where they As technology increasingly satisfies our linear and routinised are on the globe. work activities and provides us These tribe members may have with synthetic thinking and analysis, successful corporations history and longevity in working will evolve into the realisation that together, but just as likely may only come together to perform Between now and 2020 we will human knowledge and the also move forward 100 willingness and agility to readily one task or project and then technological years as we and appropriately respond to the disband, repeating this process over and over again responding continue to irrevocably enmesh unusual and unpredictable will ongoing to global marketplace our physical world with our online offer them their unique point of needs for projects, skill, wisdom digital world and render difference and profitable and insights. ourselves virtually immortal competitive edge. leaving digital footprints that will echo throughout all time. In our 2020 workplaces, one in three employees will be working on a causal, part time or project basis. 40% of today’s senior leaders will have reached retirement age. Gen Y will account for 42% of the workforce. The average job tenure will be 2.4 years and one in four workers will be working remotely or virtually.
20 | Entrepreneur’s Edge
This will remain fundamental in business innovation, but what is different, is the speed of change and the breadth of opportunities that we have access to.
maxiom
The old management paradigm of control will also slowly give way to the new paradigm of influence, as we learn that our workplaces are extremely fluid, malleable and adaptive and that to flourish in this new work context is to allow our people the freedom to explore new possibilities and methodologies whilst remaining true and fixed on the compass pointing steadfastly to the required outcomes. As the boundary between our physical and digital worlds blur and we become more immersed and dependant on constantly-on and information-rich in-situ technologies, the ability to compartmentalise our lives into the historical dictum of eight hours work, eight hours play and eight hours rest will no longer have meaning, or purpose. The willingness and ability to effectively manage the personal needs of the individual with the commercial needs of an organisation will be a skillset muscle we will all need to exercise and strengthen.
we will do in the next decade that They will clearly know what they we can’t yet imagine. are capable of; be willing to innovate in large and small ways, This includes the burgeoning be skilled at harnessing the healthcare industry that will collective wisdom and energy of service our aging population as the people around them, and we strive for quality of life as we adept at finding new markets and routinely live to 100 years of age new opportunities and most and beyond. Expect to see a importantly not afraid to reach out growing number of genetic and grab for them. counsellors, stem cell researchers and custom implant organ designers’ jobs being advertised. In allied industry’s, Baby Boomers will be hiring retirement coaches and counsellors, financial advisors and wealth experts to advise them on how to maximise their post work lives. Our insatiable reliance on digital and augmented online worlds will make digital professionals another sought after industry and profession with new jobs emerging including computer forensic analysts, cyber security specialists, media search consultants and data technologists. Where to from here?
Tomorrow’s professions As we journey towards the year Many of tomorrow’s career and 2020, the companies that thrive industry opportunities are hidden and grow will be those that find in the 60% of the tasks and jobs opportunity in the changes.
maxiom
The highly-regarded principal and founder of Success through Focus since 1981, each day, he consults with business leaders around the globe, helping to shape their businesses so they can be first to take profitable advantage of tomorrow’s business opportunities. Morris foresees an unlimited future for those companies which take the time to prepare and strategize for the future NOW.
Entrepreneur’s Edge | 21
SALES | Edge
THE FAILURE OF RFPS AND HOURLY BILLING By Ian Altman
Your clients do not want hours, they want to solve their challenges Hourly billing is the enemy of innovation RFPs generally are not a good predictor of the future needs Discover how to win business with fixed-fee pricing When was the last time your business had a great need for seven and a half billable hours of someone’s time? If you are looking for someone to keep you company on a boring day, paying by the hour might make sense. If you need a security guard to stand a post, then paying by the hour makes sense. However, if you are engaging a professional, is hourly billing the best solution for you or for them? Nobody wants to buy hours. Rather, they want to find a solution. But, if that solution equates to a blank check, then stalled purchase decisions should not be a surprise. Jack Quarles, CEO of Buying Excellence, recently released a video on the 7 Curses of Hourly Billing. Keep in mind that whereas I help companies
22 | Entrepreneur’s Edge
become successful on the sales open and shut case, the and business development side, opposition could drag things on Jack helps companies make forever just to drive up your costs. smarter purchasing decisions. Fixed fees would not be As you will gather from his appropriate in that case. articles and videos, unlike the stereotypes in the purchasing However, if you are looking for a industry, Jack guides his clients trademark or other intellectual through the complicated process property (IP) filing, it might be a of ensuring they attain the best bit more predictable. Antigone value for their investments. In Peyton at Cloudigy Law offers many of their IP-related services fact, in most cases, Jack will on a fixed-fee basis. As a client point out that the cheapest of their services, you’d be vendor rarely offers the best pleased that they don’t drag value. projects on forever. Rather, they share a common goal with their Where you have uncertainty, client to work as efficiently and hourly billing makes sense. A effectively as possible. litigator representing you in a legal matter may spend more or less time depending on not only As Quarles points out in his video, hourly billing punishes the case, but specifically how adversarial the opponent might innovation and rewards a lack of productivity. The more efficient be. So, even if it seems like an
maxiom
the vendor, the less money they make on hourly billing. But, the fixed-fee vendor benefits when they work efficiently and get things right on the first pass .(Oh – so does the client). To perform services on a fixed fee basis, the client and the service provider need to have a great deal of comfort between them. Regrettably, purchasing departments often overlook the value of open dialogs. In procurements with federal agencies and large companies, the contract officers often assume that everything that the vendor needs to know is in the RFP. Unfortunately, that is rarely true.
Without a dialog, rest assured that the project is likely to cost more, take longer, and generate much more anxiety on all sides of the transaction. If you are on the purchasing side, feel free to share the questions and answers with all parties. But, be sure to make note of which vendor asked the great question to uncover a real need. It’s likely that they have the ability to ask other intelligent questions that might serve your needs throughout the project. If you are buying or selling commodity items, then the notion of purchasing to meet a specification is fine.
If you simply need warm bodies When delivering workshops and to show up, or you need help and keynotes, I ask “When the client cannot clearly define the project sends an RFP with their needs, or goals, then hourly billing might is it more common that they got it be fine. exactly right, or more common that the requirements need to be However, both the vendor and the modified before the project client win when you can agree on begins.” 100% of the more than a transaction based on value and 1,000 participants confirmed deliverables that are not what you already know… that the measured in hours. needs change as the vendor asks questions and together the Next time I will address how to vendor and client discover their deliver fixed-fee proposals on real needs. complex projects. To read this artcile,go to page 67
maxiom
Ian Altman Ian Altman is the CEO of GrowMyRevenue.com A speaker and author of Upside Down Selling, Ian helps companies become outrageously successful targeting and winning business. His Book “Upside Down Selling: An integrity-based sales approach to avoid being predictable” launched in mid 2012 as a straight-forward guide to comfortably engage your entire company to grow revenue.
Entrepreneur’s Edge | 23
LEADERSHIP | Edge
THE MOST PRODUCTIVE PEOPLE I KNOW - THEY PLAY HARD AND DON’T GET TIRED By Margaret Heffernan
They have a life. They take breaks. They’ve often worked in several different industries. They have great outside collaborators. We all worry about productivity: since there aren’t more hours in the day, how can I get more done? So that’s made me reflect on the truly productive people I’ve known or worked with throughout my career. They all share certain characteristics: They have a life Far from being the maniacally focused, late night/early morning types, truly creative innovators or problem solvers have a rich life outside of work. One of the finest CEOs I’ve known, Carol Vallone, founder of WebCT, coached her local softball team. She said it’s where she honed her leadership skills. It also meant she had to take her mind off work and think in different ways. No wonder academic research keeps
24 | Entrepreneur’s Edge
showing that external commitments are highly correlated with high achievement.
They’ve often worked in several different industries
This means that they regularly challenge orthodoxies because They take breaks they’ve seen different frameworks and approaches. It’s easy to think that you’ll get They may not take so much for more done if you never stop. But granted and have the experience what’s clear from neuroscience to see the value in re-framing is that we can easily get problems. resource-depleted (tired) and can quickly become rigid and They have great outside narrow minded (tunnel vision.) In collaborators other words - we get stuck. Taking a break – just walking Sometimes these collaborators around for a minute – can reset are formal, often not. But their and refresh your mind, allowing sounding boards aren’t just you to see solutions that another immediate colleagues or clients. hour at the desk would not have Their wide networks allow them revealed. It’s one reason we to incorporate a wider range of often have our best ideas driving thinking, contacts and home. information and they bring light and air into the business.
maxiom
COMING JANUARY 2013 IF YOU ARE A PARENT, STUDENT OR EDUCATOR THEN YOU MUST READ THIS MAGAZINE What all of these characteristics demonstrate is that truly productive people have very wide and rich peripheral vision. External commitments, the time to breathe, multiple perspectives and contacts: all of these mean that these individuals bring far more to the table than their immediate task or job requires. They’re productive because they have such rich resources to call upon.: science, music, art, literature, theatre, furniture design, pot plants - you name it. There is always much more to them than ever meets the eye. What this means is that the secret to productivity isn’t a new organizer, a piece of software or a new app; it’s having a whole life.
Margaret Heffernan is an entrepreneur, Chief Executive and author. She was born in Texas, raised in Holland and educated at Cambridge University. She worked in BBC Radio for five years where she wrote, directed, produced and commissioned dozens of documentaries and dramas. For more information please visit our website:
CLICK HERE TO SUBSCRIBE IT’S COMPLETELY FREE AND OPEN TO EVERYONE!
www.8020center/contributors/mh
maxiom
Entrepreneur’s Edge | 25
TECHNOLOGY | Edge
THE TRADITIONAL FAST FOOD MODEL HAS JUST BEEN KILLED! The traditional fast food business model just never had a chance, now did it? Well it’s had a good run. It is well over 50 years since McDonald’s rolled out its’ first franchises. But all good things must to come to an end. Yes, we’ve heard it all before - that people’s tastes and habits are changing. Many of us are eating healthier, or trying to anyway. But still the traditional fast food model reigns supreme. Until now! Marcelo Coelho and Amit Zoran, a pair of whiz kids from MIT, have developed what very well may be the next major revolution in food preparation. It may also be the only machine that keeps you alive when the Robot Apocalypse goes down, but we'll try to push that to the rear of our minds for now.
The Cornucopia is set to change the way we think about food
before, but apparently now that’s countries? It seems mind blowing totally possible. right now but the technology has already been developed and will Able to deliver "elaborate become mainstream in the near combinations of food," the future. machine also has a rapid heating and cooling chamber that Will this be the future of food preparation? Will this be the end Essentially, the Cornucopia is a purportedly allows for "the creation of flavours and textures of the fast food model as we 3D printer that precisely mixes know it? What impact will this foods and flavours from a number that would be completely have on café’s and restaurants? of canisters in order to produce unimaginable through other cooking techniques." guess just have to wait for it to something that's edible (and become mainstream to find out. supposedly close to what you Imagine printing your dinner ordered). every evening? What about being Food for thought! able to print food to save the lives I’ve never ordered duck a of starving people in the poorest l’orange from a street vendor
26 | Entrepreneur’s Edge
maxiom
Entrepreneur’s Edge | 27
ENTREPRENEUR | Edge
MASTERY OF THE CAN-CON-DANCE By Dr Gene Landrum
When you start with little you become more comfortable with the art of ambiguity. Want to be happy? Then stop doing what makes you unhappy. “To transcend limitations, dethrone the mind from its tyranny as a sole arbiter of reality.” I wrote a long diatribe in my Those sacred dogmas doctoral dissertation on the secret of success that motivates What was this about? Those and drives those interested in sacred dogmas that reside in all making their mark in the world: of our heads tell us what we can do and what we can’t do. Some ● “Entrepreneurs, of these mind mantras are good. creators, and Some are not very good and innovators strive to others can be absolutely destroy sacred dangerous to our well-being. The dogmas or “factual latter are viral mind infections inequalities” and rebel that need to be deleted, as they in order to create the were put there by well-meaning new and different. parents, teachers and mates. ● They are intolerant of authority and defy protocol, earning them the not so endearing reputations of: mad, disruptive, wacky, ruthless, unconventional, maniacal, intense, eccentric, bizarre, crazy, maverick, and obstructive.”
28 | Entrepreneur’s Edge
The ability to do this helped me become successful. When you start with little you become more comfortable with the art of ambiguity. Therefore, you work harder and wire ‘you’ to follow your fantasies to achieve dreams and find Utopia. Mind Mantra Experiences My first management job was in West Virginia. I so wanted to be
a boss instead of a Hired Hand I took a job in a welfare state that was the heart of Appalachia. It had not made its quota in 30 years. Friends called me suggesting that I had been drinking too much. I worked diligently and made quota the very first year. In year two I led the nation in sales. Suddenly, I was a boy wonder and it led me right to the home office in Silicon Valley. Had I gone to a successful place and done well it would have been, ‘So what?’ But I did the tough gig and that is what launched me into the limelight. Another Mind Mantra experience occurred in a start-up in Silicon Valley. One of my salesmen calls and says, “Gene, I just lost a $1 million dollar order.” I ask why and the man says, “The printer is too noisy.” I tell salesman Bob, “It’s your lucky day. We just have received approval for a new
maxiom
printer that is quiet. Call the guy back immediately and let him know he can be the very first to get a quiet printer.” Bob calls back and says sheepishly, “I guess it was not the noise. The buyer told me he was no longer interested.” The buyer had used noise as a ruse to get rid of Bob and buy someone else’s product. Bob should have asked, “What if I could fix the noise problem?
What is a Can-Con? It is one of those times in which you Can Con yourself and become what you are not and, coupled with what you are, you become far more than you could otherwise be. It is a game of faking yourself to success.
The Protean Person ends up with the gold, so begin today, to change You so you can stop He would have found the truth that doing what you are doing and become more of what you want the buyer was committed to to be. buying from his brother-in-law and was just using ‘noise’ as a Do the Can-Con Dance way of sending Bob away. People are notorious for using self-serving words to fit their personal needs. It is axiomatic that ‘a truth becomes false with more knowledge’. When a young single man asks a lady out she often says, “I’m busy.” That may or may not be true, but is often a ruse. She wants to be nice and not respond, “You are too short, too ugly or too poor.” I lecture on such objections with one aphorism labelled Creative CanCons.
maxiom
mystical play to score a goal in business. It is a means to stop beating yourself, and letting an adversary do that, by using mindmoves. Many sharp people con themselves each hour of each day into doing what is safe. It is like some old-time religion in the head that takes them to a place they should be avoiding like the plague. Want to be happy? Then stop doing what makes you unhappy. Pretty simple advice, huh? Brain plasticity studies offer information on this Can-Con Dance message.
It is a fact that we all have both positive and negative programs dancing around in our heads and hearts. They have been put there long ago by caring parents who told us, “Don’t talk to strangers, Honey.” Guess what? Those words become programmed in the unconscious mind, and if not removed, make us reticent to walk through new doors. When the kid is 25 they had better be talking to strangers. Some of A Can-Con Dance is similar to what psychologists label a Decoy those old mind programs are Effect. It is a mind game with you good. Others are not good and make us mediocre. as the quarterback calling a It is never easy to take new roads to find unique opportunities. We all have mind viruses that cause us to fear the new and they often interfere with the trek to eminence. The secret of achieving eminence is to learn the Can-Con Dance. It is not a new ballroom move, but one we must make when not up to the challenge of a new opportunity.
Entrepreneur’s Edge | 29
ENTREPRENEUR | Edge
Work in this arena has come from University of California’s Michael Merzenich who says, “Nothing spreads atrophy like being immobilized in the same environment.” The Decoy Effect
time due to what is labelled in Marketing as the Law of Comparability. Feel older or younger by doing the Can-Con dance
One Can-Con is about being young and making yourself Many of us use a decoy to believe you are older. It is not all delude ourselves without being that difficult. Oprah Winfrey did aware we are doing it. This is this at 19 when she was asked to because 95% of our decisions be a TV station news anchor. are unconscious. Oprah was afraid and suddenly had an epiphany. She told The Decoy Effect refers to you herself, “Tonight, I’m not Oprah. offering an alternative opportunity I’m Barbara Walters. I will dress to a mate or a client. One like Barbara, walk like her and personal decoy strategy is when talk like her.” Oprah walked out out on the town trying to find Mr. on that set and wowed them. In Right or Ms Wonderful, and you many ways it led her to become go with a buddy or girlfriend. better than Barbara and the richest woman in America. The Decoy Effect is about taking a friend that is a Minus-You – At 70 years old, I found myself in someone who rates a 5 on the the finals of a 4.0 tennis 10 scale of attractiveness. tournament, facing a #1 high school player. I watched the kid Another tack is to take someone warming up and hitting balls like who dresses like a slob, who is bullets. I knew I was in big trouble not well-read or well bred, in and sat down and decided to order for you to come off as a rewire my mind. I walked onto winner in the Comparability that court as a guy 40 years old. I Game. When the choices are won that battle against youth. The being made you win out every next day I couldn’t get out of bed.
30 | Entrepreneur’s Edge
I didn’t play as a 40-year old, but I also did not play my age. After the match the kid’s grandmother, three years younger than me, walked up and shook my hand Mythical- Hero-Mentoring Magic Many super-achievers have been motivated by a mythical mentor or hero from books and movies. Carl Jung told us, “All of our concepts are mythological images,” what he described as Archetypes. Joseph Campbell was highly influenced by Jung and wrote in his landmark work, ‘A Hero with a Thousand Faces’, “Each of us is a mythological representation of our inner truth. Myths make heroes out of those who head them - imprinted Archetypes.” Campbell advised all to chase their own inner bliss for an emotionally stable life. He went on to say that if you don’t, you are setting yourself up for a schizophrenic experience and wrote, “Make your work your hobby, then there is no such thing as work or getting tired.” Touché!
maxiom
This is akin to what marketers describe as the Law of Comparability.
George Patton, a voracious reader of war heroes, came to believe he was reincarnated from Alexander and Napoleon. Was It is true that women are far more this a bit deluded? Of course! But proficient in this art than men. just prior to the Battle of the Tests show that women are far Bulge, in World War II, that he is more empathetic – use rightcredited with winning, he told his brain imagery, no matter the task. boss Omar Bradley, “I am From a psychological reincarnated from Napoleon and perspective the conscious mind that is why I have a superior is into ‘what is’ and the sense of warfare.” unconscious mind is more into ‘wants or desires.’ Psychiatrist David Hawkins wrote, “To transcend limitations, There are many examples of dethrone the mind from its using this art in sports, life or in tyranny as a sole arbiter of business. Many of the world’s reality.” great warriors or superstars have been infamous for choosing a The mind is malleable and can role-model to mimic. Alexander be altered but most people are the Great believed he was the unwilling to admit they should Greek Titan Achilles and read change. Most refuse until they hit The Iliad prior to each battle. He the skids or end up in the gutter. admitted to doing what Achilles would have done to win. Consequently, Alexander never lost a battle on his march to conquer the world. Later Napoleon adopted Alexander and Attila the Hun as role models and fought battles as if they would have done. A few millenniums later General
maxiom
Dr. Gene Landrum Dr. Gene Landrum is an author, lecturer, consultant. He is a Professor Emeritus from Hodges University where he still teaches MBA’s on the art of being their own boss. In 2011 he was inducted into the Entrepreneurial Hall of Fame in Dallas, TX. He launched five new companies and took three to $100 million in revenues within three years. The most famous was Chuck E. Cheese. To read more you can visit his Website: www.genelandrum.com
Entrepreneur’s Edge | 31
FINANCIAL | Edge
THE TYRANNY OF FORECASTS, TARGETS AND BUDGETS
By Professor Malcolm H.B. McDonald
Any idiot can set forecasts, budgets and targets Even a laptop can do this without human intervention Without a market-based strategy, targets just cause chaos Targets force people to concentrate on the target instead of customers “The good thing about not having a strategy is that failure comes as a complete surprise and is not preceded by a long period of worry and depression”.
got into serious trouble. The best performing companies up to 2000 fared little better, with the likes of Marks & Spencer, ICI, GEC et al either going out of business or systematically destroying shareholder funds.
This only ever works in growth markets with little competition.
Such behaviour has consequences. Of Tom Peters’ original 43 so-called ‘excellent Don’t be fooled into thinking companies’ back in 1982, very those words by John Perton of few survived. They had a fixation Boston College just represent an Some of these companies have with tactics at the expense of academic trying to score points since partially recovered, such as strategy. (Richard T. Pascale by being clever. It is amazing to M & S, BT and BA. The first “Managing on the Edge” Simon me how many major decade of the 21st century has and Schuster, 1990). organisations go under because seen a continuation of the they have little more than sales demise of erstwhile famous Here are some quotes from wellforecasts and budgets for the companies too numerous to known sources: following year. How surprised mention. The lessons to be “Improvements in a short-term they are when their customers learned from those decades are financial measure, such as abandon them in favour of still highly relevant for companies economic profit, can be achieved another supplier who has taken currently enjoying high growth through postponing capital the trouble to work out a longer today. investments, reducing marketing term strategy for understanding and training expenditures, or by and really meeting their needs. Let us dismiss, once and for, all divesting assets, each of which Almost every UK company the puerile belief that all directors may have a positive effect on achieving high returns on and senior managers need to do near term performance but could investment up to 1990 either is to write down some numbers adversely affect long term value subsequently went bankrupt or that can become targets and creation performance. eventually translate into budgets.
32 | Entrepreneur’s Edge
maxiom
Nevertheless, when incentivised with bonuses to ‘manage for the measure’ this is exactly what many managers will do, irrespective of the consequences on shareholder value”. (Simon Court, Market Leader, Why Value Based Management goes wrong) . “90% of USA and European firms think budgets are cumbersome and unreliable, providing neither predictability nor control. Budgets are backward-looking and inflexible. Instead of focusing managers’ time on the customers, the real source of income, attention in focused on satisfying the boss; that is, the budget becomes the purpose. Cheating is endemic in all budget regimes. The result is fear, inefficiency, sub-optimisation and waste. In companies like Enron, the pressure to make the numbers was so great that managers didn’t just doctor a few numbers, they broke the law. People with targets and jobs dependent on meeting them will
maxiom
probably meet the targets, even if they have to destroy the enterprise to do it.” Simon Caulkin. Escape from the Budget Straightjacket Management Today, January 2005. p47-49.
were no longer there to help customers find the most suitable solution.
Research into the banking sector in the UK back in 2005 threw up the following interesting Observation:
Many economic commentators and politicians have remarked on the destructive nature of targets set by government for public services such as the police, the health service, social services and so on. For example, the impact of financial incentives for adoptions caused a genuine fear in society that children were being unjustifiably removed from their natural parents in order to meet targets which earned a financial reward from the government. The police are another example which attracts criticism. With targets for arrests, and with careers and promotion dependent on meeting them, many police officers ignore their real duty to society by avoiding tackling serious crimes and tick their target boxes with petty and insubstantial crimes. Indeed, a policeman who resigned said openly on his web site, “An obsession with targets and box
“In this company, value creation was merely a matter of protecting market share and managing costs. The data shows that the company’s business model is in effect a ‘money printing’ machine, therefore the challenge for strategists lies in how they can act as responsible stewards of a resilient business model.” (Cranfield Doctoral Thesis) Well before the 2008 banking crash, another major bank was criticised for its contribution of £1 trillion to personal debt in the UK. Employees had been set tough targets for selling loans and to double their low salaries with commission, all encouraging system abuse and leaving many borrowers facing ruin. Banks
“We have a target-driven culture that staff must hit targets” (A major bank 10 May 2005).
Entrepreneur’s Edge | 33
FINANCIAL | Edge
ticking mean we get exactly the same points for cautioning a girl for pulling another girl’s hair as we get for a robbery”. Finally, it is well known that the British National Health Service change definitions of illness and accidents to meet queue reduction quotas, often with a devastating impact on those patients affected.
targets and static measures. Forecasting processes frustrate the ‘right’ behaviours and drive the ‘wrong’ ones. The desire for HQ control often drives inappropriate and suboptimal behaviour.” Doug Ross, Strategy Magazine, March 2007 Summary of research into the planning behaviour of 1000 participants internationally.
The common thread running through these and countless other examples is that members of the public ceased to be the focus of the organisation. The majority of police, doctors, nurses, teachers and government officers and so on now complain about the way their skills and time are being subverted by the culture of targets. They long to put the “customer” back at the centre of their working lives.
Consider now the often puerile and backward-looking process by which quantitative objectives are set. It has been consistently shown over the past fifty years that sales people sell the products they find easiest to sell, often at the maximum discount, to the customers who treat them nicest. Such sales go into the database and form the basis of forward projection for forecast purposes.
Then we have the kind of kneejerk, macho management-byobjective targets that are often set by senior managers without considering the unintended consequences. A classic example of this is the desire to cut costs by reducing working capital, such as inventory. If the logistics manager is paid a bonus to make such reductions, then they will no doubt be made.
One last comment about the tyranny of annual forecasts, targets and budgets: “Leadership is burdened with passive resistance and corporate gaming in the traditional annual planning model. Many have personal bonuses based on fixed annual
However, there is a different and more professional way of setting an objective for the following year. If addressing a growth market, a legitimate strategic objective might be “to be market leader in three years time”. In order to achieve such an objective, the marketing director
So the poor unfortunate customer asking for one hundred widgets and two hundred didgets, on being told they can only have fifty of each, changes supplier. The circumstance of the forgone sale is lost in the system, the logistics manager has achieved the objective set and so has the
34 | Entrepreneur’s Edge
would need to assess market size three years hence. He might then consider what market leadership might be, say 25%. So, extrapolating backwards from this future target, he could establish what sales he needed to achieve next year and the years following to reach the attainable goal of market leadership.
maxiom
finance director. The database Unilever’s new system is more on which the next year’s forecast about helping people win than is made is impervious to all this. holding them to account. Even the great Unilever, when losing market share to Proctor and Gamble, realised that their forecasting and budgeting system was holding them back.
Now, when you meet people, you can’t tell what function they’re from, because they are just talking about the customer and the business”.
In a presentation in 2006 at Cranfield, a senior financial manager said:
This particular professor has little patience with managers who believe that forecasts, targets and budgets are all they need, and that using them to put the fear of God into their subordinates somehow constitutes good management.
“We used to spend £½ billion out of a £50 billion turnover just on budgeting. All it led to was setting the lowest sales/profit target (and under no circumstances exceed it) and the highest marketing budget (and under no circumstances underspend it). The consequence was appallingly bad behaviour on the part of everybody. We were boxed in by too many targets, defined “success” in the wrong way, were too inward and backward looking and set the wrong performance targets.
maxiom
You can get away with it for a while in times of growth, but sooner or later you will be found out as a mental midget.
Prof Malcolm H.B. McDonald Malcolm, author of 44 books, is a Professor of Marketing at six of the world’s top Business Schools. His extensive industrial experience includes a number of years as Marketing Director of Canada Dry. He spends much of his time working globally with the operating boards of the world’s biggest multinational companies. He is Chairman of six SMEs. In 2006, he was listed by the Times as one of the country’s top ten consultants.
m.mcdonald@cranfield.ac.uk www.malcolm-mcdonald.com
Entrepreneur’s Edge | 35
LEADERSHIP | Edge
CULTURAL AWARENESS IN THE ‘LUCKY COUNTRIES’ By Holona Lui
Although this article is written about Australasia, the content is very relevant internationally. New Zealand and Australia are the ‘lucky countries’. We live in resource ‘rich’, largely safe environments, we are relatively wealthy, well-governed and politically stable first world countries. We are both populated by people from all over the world. We are vibrant multi-cultural societies. Cultural diversity is a rich feature of our communities and an integral part of our places of work. On one level, our diversity is highly visible, while on others particularly in the workplace - our diversity is seemingly underacknowledged and ‘invisible’. However, this is changing and there is a growing recognition and gradual acceptance that there is a need for greater appreciation of the different cultural perspectives we all bring to the workplace. There is an increasing call for ‘Cultural Awareness’ training but some are wondering, “What is
36 | Entrepreneur’s Edge
this ‘Cultural Awareness’? And how would having it benefit us?”
behaviours and the motivational cultural drivers that underpin them include how we expect decisions to be made, how we Lenses on the world respond to authority, our attitudes and response to individual and We all have a culture. All of us have a perspective, a view of the collective needs, decide world we see around us. We all priorities, manage projects, how we express an opinion or look at and interpret the world disagree with each other or through a cultural lens. relate to our clients, managers or other staff at work. For many Sometimes we do this consciously, but most of the time cultures these expectations, values and their underlying we do it unconsciously. This is assumptions can often be perfectly natural and different and can contribute to understandable. misconceptions and misunderstandings that impact How we view the world through on job satisfaction and the way a our cultural lens is shaped by job gets done. many influences. These influences include our upbringing, Why Cultural Awareness our family, our community and society in which we live and the training is important assumptions and values we have about what is the ‘right’ way to do ‘Cultural Awareness’ training in things. This is aptly reflected in the workplace helps companies the quote, “We don’t see things to increase and strengthen staff as they are, we see them as we engagement with their business are,” by Anais Nin (1903-1977). and business aims. It can proactively reduce the potential Our cultural lens encompasses for misunderstanding and staff many things including how we disengagement and reduce staff behave in the workplace. These turnover.
maxiom
Cultural awareness training is aimed at helping workmates gain an insight and general understanding of how and why colleagues from various cultures might respond to the same circumstances in different ways.
‘Cultural Awareness’ training helps us to consciously develop an empathy and respect for different cultural perspectives within our businesses and organisations, while maintaining an awareness of our own cultural lens and it how influences and It helps people to understand the filters our view of the world. motivational values that might be influencing the way their Essential business and workmates respond to particular leadership skill circumstances and to adjust their Having a greater sense of own behaviour accordingly, not ‘Cultural Awareness’ and being only to get the job done but to able to communicate effectively build and maintain effective across cultures is now an working relationships with their essential workplace skill. It customers and colleagues. requires conscious development to ensure sustainable and This can contribute to a greater successful, productive working degree of staff engagement, relationships and business improved recruitment and outcomes. retention, and increased productivity and innovation. It can ‘Cultural Awareness’ training can also help develop and strength help businesses to confidently high-performing work teams. and strategically leverage the talent and potential for growth ‘Cultural Awareness’ helps foster and innovation that cultural a collegial work environment that diversity offers them. encourages diverse cultural perspectives and approaches to Realisation of its significance to problem-solving to be more the economy is still gaining readily voiced. This acceptance momentum and has yet to reach and promotion of diversity of a tipping point towards being fully thought and perspectives recognised and accepted as an encourages innovative thinking integral part of effective everyday which may benefit the business. business practice.
maxiom
Holona and Trish Lui Holona has considerable experience and expertise in his specialist areas of team development especially high performance teams, project management for learning and development programmes and communications, particularly for Pacific communities. He regularly provides advice on communicating with Pacific Peoples and co-conducted Pacific Analysis Framework policy training for a wide range of public sector and non-government organisations. T: +64 4 938 8183 M: +64 274 439 345 E: holona.lui@catalystpacific.co.nz W: www.catalystpacific.co.nz
Entrepreneur’s Edge | 37
OUTSOURCING | Edge
OUTSOURCING FOR BEST RESULTS
By Mark Matthews
Know what to outsource and the results you want to achieve. Outsourcing can assist SME’s compete on more favourable terms with larger organisations if it is used effectively. An outsourcing specialist can assist you develop an outsourcing strategy. Entrepreneurs and Business Managers are outsourcing more services than ever. Yet many business outsource without any defined purpose nor are they measuring the effectiveness of their contracts. In fact, many businesses experience inconsistent results from companies they engage to outsource a wide spectrum of services.
Know what to outsource and the results you want to achieve.
Being clear on what services you do not wish to undertake in Ideally a successful outsource house and the scope of services relationship enables you to you want to outsource along with outsource administrative or the results expected from your operational activities that are not outsourced contractor is critical part of your normal day-to-day to the success of the relationship. business, or for which you require additional resources. Organizations that outsource should be seeking to realize This provides you with the peace benefits or address the following of mind that comes with being issues: certain that the required services will be professionally executed in 1. Cost savings - The a timely manner, without lowering of the overall additional in-house hiring. cost of the service to the
38 | Entrepreneur’s Edge
business. This will involve reducing the scope, defining quality levels, repricing, re-negotiation, and cost re-structuring. It may include contracting production or services offshore, to lower cost economies. 2. Focus on Core Business Resources (for example investment, people, infrastructure) are focused on developing the core business. For example often organizations outsource their IT support to specialised IT services companies.
maxiom
3. Cost restructuring Operating leverage is a measure that compares fixed costs to variable costs. Outsourcing changes the balance of this ratio by offering a move from fixed tovariable cost and also by making variable costs more predictable. 4. Improve quality - Achieve a steep change in quality through contracting out the service with a new service level agreement. 5. Knowledge - Access to intellectual property and wider experience and knowledge. 6. Contract - Services will be provided to a legally binding contract with financial penalties and legal redress. This is not the case with internal services. 7. Operational expertise Access to operational best practice that would be too difficult or time consuming to develop inhouse. 8. Access to talent - Access to a larger talent pool and
maxiom
a sustainable source of skills, in particular professional services, consulting, science and engineering. 9. Capacity management An improved method of capacity management of services and technology where the risk in providing the excess capacity is borne by the supplier. 10. Catalyst for change - An organization can use an outsourcing agreement as a catalyst for major step change that can not be achieved alone. The outsourcer becomes a Change Agent in the process. 11. Enhance capacity for innovation - Companies increasingly use external knowledge service providers to supplement limited in-house capacity for product innovation. 12. Reduce time to market The acceleration of the development or production of a product through the additional capability brought by the supplier.
13. Commodification - The trend of standardizing business processes, IT Services, and application services which enable you to buy at the right price, allows businesses access to services which were only available to large corporations. 14. Risk management - An approach to risk management for some types of risks is to partner with an outsourcer who is better able to provide the mitigation. 15. Venture Capital - Some countries match government funds venture capital with private venture capital for start-ups that start businesses in their country. 16. Tax Benefit - Countries offer tax incentives to move manufacturing operations to counter high corporate taxes within another country. 17. Scalability - The outsourced company will usually be prepared to manage a temporary or permanent increase or decrease in production.
Entrepreneur’s Edge | 39
OUTSOURCING | Edge
Some businesses outsource just because it seems easier, but if the contracted service scope isn’t clear and the delivery expectations not documented then the end result may not be what the business owners had in mind.
18. Creating leisure time Individuals may wish to outsource their work in order to optimise their work-life balance.
It makes sense to partner with an outsourcing specialist who can assist you develop an outsourcing strategy that will enable you to achieve your business aims.
No matter what you are looking to outsource the first thing you should check is if the person or company you are considering is Outsourcing can assist SME’s capable of managing a key area compete on more favourable of your business better than you can do yourself, so you don’t terms with larger organisations if have to worry about it. If you don’t it is used effectively. think they can or are unsure…then move on to one With the plethora of outsourcing who can. options available to most businesses cutting through the sales hype and delivery promises can sometimes be a difficult proposition in itself. Knowing where to start, what to outsource, why and to whom can be daunting for many SME’s but it doesn’t have to be.
40 | Entrepreneur’s Edge
Mark Matthews Mark is CEO of Maxiom Group. Maxiom delivers the Business information and advice you need - straight to your inbox. Best of all, it is completely FREE and open to everyone. Mark is also a regular contributor to several business publications including Modern Business Magazine and Smart Company lo Learn more about Maxiom visit the Website at: www.maxiom.com.au
maxiom
maxiom
Entrepreneur’s Edge | 41
STAFFING | Edge
5 THINGS CANDIDATES HATE ABOUT YOUR JOB APPLICATION PROCESS by Kristin McNicol
Candidate experience - huge numbers of recruiters and employers are still getting it wrong. The black hole. You don’t go to the supermarket and expect to find out-of-date food on the shelves; nor do candidates expect to find out-of-date ads on your careers site. This is not a new topic, nor is it a complex one. Candidate experience has been discussed for years and boils down to something as simple as treating others as you would like to be treated – but huge numbers of recruiters and employers are still getting it wrong. If you’re guilty of any of these, it’s time to re-work your application process:
of email applications, there’s no excuse for at least setting up an automatic response to acknowledge the receipt of an application, then copying and pasting a template for rejections. 2. Poor communication. It’s not quite the Black Hole: you’re in touch with the candidate, which is a start.
1. Unresponsiveness. The Black Hole. Most candidates have been there: they poured hours into a CV, filled out an application form, crafted the perfect cover letter – then nothing. Even if you’re still living in the administrative nether world
42 | Entrepreneur’s Edge
Unfortunately, the information you’ve given is too vague. A real example: I interviewed for a job last year. The interview went well but I was warned at the end that it would be “a while” until I heard back from them. A month passed; I assumed that I hadn’t impressed them as much as I thought.
I accepted another job. Another 3 weeks later, I got a call from the recruiter offering me the job. Granted, it’s possible that something had been going on behind-the-scenes. Perhaps another candidate accepted the role then let them down. The recruiter assured me, however, that the delay was the result of a senior hiring manager’s holiday and even sounded surprised that I had written the job off, reminding me, “We did say it would be a while until we’d be in touch...” The moral? Be clear and realistic when you set expectations, or you’ll lose good candidates. If you think it’s going to be 3 weeks before
maxiom
you can get back to someone, tell them exactly that - then Deliver. 3. Long forms.
month ago, don’t expect them to be any more pleased than you’d be if you walked out of the supermarket with a three month old slice of bacon.
Recruitment software is a powerful tool; but, like all
5. No contact details.
powerful tools, it can be misused. We all love watching data from application forms appear in our database
Who loves receiving covering letters that begin, “Dear Sir/ Madam”? Nobody - and candidates don’t like sending them either. Including the recruiter or hiring manager’s name on the ad doesn’t just give the candidate a name to put on the cover letter either; it gives the impression that they’re dealing with a human being, not a faceless, nameless web form.
Automatically - but remember that it’s not quite magic. Candidates are filling in that data for you, and they’re not keen on never-ending forms either. The shorter your form, the more likely candidates are to make it to the bottom of it. 4. Out-of-date ads. You don’t go to the supermarket and expect to find out-of-date food on the shelves; nor do candidates expect to find out-of-date ads on your careers site. If you let a candidate fill out an application form, upload a CV and write a covering letter only to be told that the vacancy expired a
maxiom
I’ll re-iterate: none of this is news. These 5 mistakes centre around the absolute basics of recruitment, and that’s what makes it shocking that so many companies are still making them. If you felt a guilty chill as you read over any of them though, don’t worry: they’re easy to remedy, so get on it!
Kristin McNicol Kristin is a consultant to enterprise on HR & recruitment best practices, having worked for over 20 years in North America and Europe. Kristin has worked with some of the biggest household names, franchises and government organisations helping senior management improve communication with all stakeholders in order to achieve better business outcomes For more information please visit: http://www.smartcompany.co.nz/kri stinmcnicol
Entrepreneur’s Edge | 43
SALES | Edge
HOW TO PROPOSE FIXED-PRICE PROPOSALS FOR COMPLEX PROJECTS by Ian Altman
Hours have little to do with value. How can you compete against larger companies who bid based on time and materials? How can you avoid some of the risk of fixed-price projects while reaping the rewards? From my previous article, we know that hourly billing fails to reward innovation. We also know that the best solution for the client and vendor is an engagement based on value.
will you spend?” It’s not their fault. Ironically, the more mistakes they It’s how it has always been done. made, the more they billed… and expected to earn. I remember purchasing IT support services. The vendor Several companies have shifted charged $1,500 per month with to a fixed-fee basis for IT up to 8 hours of on-site services. As long as the client Of course, we all face a bias support. However, the first few company’s IT infrastructure does based on our own experience. If I months our bill exceeded $7,000. not change, neither does their am an accountant or lawyer who fee. These vendors recognize is used to billing by the hour, then I asked for an explanation. The that their base fee may not I am often most comfortable service manager explained that always be the least expensive, engaging a vendor on an hourly in the 2nd month, they had to but the client appreciates a basis. Consider this: If I help a spend about 40 hours of labor to predictable cost base. Most company grow by $2 million a identify, diagnose, and repair a importantly, they share a year, would they feel better if it problem with a network switch. A common goal with the took me 10 hours or 1000 hours replacement network switch client: Namely, they have an to accomplish the task? would have cost about interest in minimizing downtime, $1,500. More importantly, they maximizing customer Ironically, most of us are more were the ones who billed for 12 satisfaction, and bringing the valuable if we can deliver results hours of labor the prior month right level of talent to solve the quickly. Still, I often get asked installing that very switch. issue on the first visit. “So, for that fee, how many hours
44 | Entrepreneur’s Edge
maxiom
You need to have well-defined requirements and mutual understanding on fixed-price projects. When faced with large, complex projects, realize that it is unlikely that you can predict the final deliverable. So, how can you propose a fixed-fee proposal without either assuming unreasonable risk or pricing yourself out of the market?
Provide clear, tangible explanations of what could change the scope and costs: This is not the old days of low bidding and hitting the client with change-orders for every nitpicking variation. Rather, our goal is to build trust and confidence for this and future projects. Build in a buffer to account for typical deviations.
Here are four steps for success:
In my previous businesses, we preferred selling fixed-fee projects, and so did our clients.
● Understand the client’s Issue, Impact, and Importance of the project. Both parties will appreciate the value of the solution, and it will also help you avoid a non-decision as you reach the finish line for the contract;
We typically delivered more to our clients than we originally promised. Since people were not concerned with billable hours, we were able to get to the root of issues faster, which resulted in quicker delivery times and higher margins for us. Everyone was happy.
● Break the project into steps. You can likely create a comfortable fixedGoing from hourly billing to fixed fee proposal for step 1… fee does not have to be just not step 5; frightening. ● Provide an estimate by step. Step 1 might be a Start small, and be sure to overfixed fee. As you move communicate on the first project further from today, the or two. range might be wider. Step 2 might have a 15% variation from low to high, whereas Step 5 might have a 300% variation from low to high;
maxiom
Ian Altman Ian Altman is the CEO of GrowMyRevenue.com A speaker and author of Upside Down Selling, Ian helps companies become outrageously successful targeting and winning business. His Book “Upside Down Selling: An integrity-based sales approach to avoid being predictable” launched in mid 2012 as a straight-forward guide to comfortably engage your entire company to grow revenue.
Entrepreneur’s Edge | 45
SALES | Edge
CUT COSTS, IMPROVE EFFICIENCIES CONVERT FROM FACE TO FACE SALES REPS by Mike O’Hagan
Convert from face to face sales reps to relationship phone sellers. Dramatic growth levels can be achieved from efficient sales systems. Develop a controlled structured and much personalised relationship sales system that can be duplicated. Follow these six steps to cut costs, improve efficiencies and get more clients. 1. If you have a generalised product (like "training") then develop your product to be very industry specific. Businesses are being bombarded with emails or calls from companies while their gatekeepers are told to reject salespeople, but they often stop and notice things that are specific to their business. A simple example would be training. MiniMovers receives stacks of "training offers/
46 | Entrepreneur’s Edge
mail" every day. All are immediately binned by the gatekeepers except anything that says "Removalist Training". This gets a second look. 2. Build a Mini-Website with an (niche) industry specific domain name. 3. Data mine (build a contact list) the businesses in this niche. Explore beyond Yellow Pages etc. - look at LinkedIn etc. 4. Load your list into a CRM program. 5. Phone the industry - do not ask the gatekeeper questions. Instead communicate in simple
direct terms what you do, without the flowery "benefit" language - then ask to speak to the best person for this. If resisted, then offer to email or mail some information. If still resisted, suggest the gatekeeper tell the decision maker to look at the Mini-Website. ● The CRM is all about organising call-back’s/followups. If you get to the decision maker, note this in the CRM - agree on the next step and tag your next action in the CRM.
maxiom
● Same goes for the action after mailing more information though try calling back in a month or so after a full rejection. ● The CRM should indicate who needs to be called, each day. It should report any overdue follow ups. ● The objective is for the phone salesperson to form a "relationship" with the business. Personal details about the person and the business should all be recorded in the CRM and used when contact is made. ● When a sale is made, an order is raised/actioned, then the delivery
maxiom
date should be recorded and the CRM should generate a followup reminder to call and check if it all arrived okay etc. Build the Relationship. ● After delivery, obviously a follow up "top up" sales call should be tagged in the system. ● Across all this the CRM program should report on efficiencies, calls per day, conversion rates etc. 6. This is all about developing a controlled structured and much personalised relationship sales system that can be duplicated. Dramatic growth levels can be achieved from efficient sales systems.
Mike O'Hagan Mike O'Hagan is well-known as one of Queensland's most innovative entrepreneurs. Twenty-six years ago he pioneered a unique business in short distance residential removals, MiniMovers, with operations in Brisbane, Gold Coast, Sydney, Melbourne, Adelaide and Perth. Mike remains the sole owner of MiniMovers and today has interests in several other businesses. If you want to know more message Mike via www.ohagan.com.au
Entrepreneur’s Edge | 47
FRANCHISING | Edge
PUT YOUR FRANCHISE IN 1st PLACE By Mark Fernandez
Position Yourself against Your Competition The best way of increasing franchisee numbers is through having a strong and vibrant culture. To gain the respect and trust of the franchisees requires a commitment to excellence, a never ending appetite for success and a partnership mindset Competitive athletes know that checking out the competition is as important as eating right, training and assessing their own strengths and weaknesses. Franchisors that want to win have to get their head in the game as well.
Consider a franchise network Some questions that you may that has been operating for less ask: than two years, does this mean that the systems, processes and ● What industries is my support offered by the Franchisor business in? – does this is of less value than the franchise limit the pool of potential system that has a 10 year franchisees? operating model? ● What products and services do we offer? – It’s all about perceived value, the why do our customers value offering over your come to us? competition.
Determining your Sustainable Competitive Advantage (SCA) starts with evaluating and identifying your strengths and weaknesses; what you are good Everyone is fighting to feed the at. discerning appetite for information buyers are looking at Comparing this to your price, ease of operation and competition reduces risk, above all ROI. decreases speculative investment spend, clarifies Before you analyze your necessary resources and saves competition, clarify what your you valuable time. business does and offers, it’s a mistake to try and be too much to Prospective franchisees’ too many people. demand for quality systems and excellent support runs high and If you don’t believe me then ask sometimes blurs the lines of some of your current franchisees competition. they will tell you.
48 | Entrepreneur’s Edge
● How do we rate our field service team? ● Is our royalty, marketing and initial franchisee fee competitive? ● What is our USP- unique selling proposition? ● Is our training world class? ● Are we getting the best margins for our current franchisees?
maxiom
It is very easy to become insular against the realities of what is actually happening within the franchise system. The best way of increasing franchisee numbers is through having a strong and vibrant culture.
It’s the 1%ers …..doing the little things, like returning calls on time, every time; being prepared for meetings and not rushing around looking for their application/ forms or paperwork, its all about being in control and remembering that you are always on show!
Having your existing franchisees You only get one chance to make ‘close’ the deal, cannot be a lasting first impression – so underestimated. make it a positive one!!! The influence that one, two or a small group of franchisees may have on the bearing of an applicant is invaluable. But, this does not happen overnight. To gain the respect and trust of the franchisees, requires a commitment to excellence, a never ending appetite for success and a partnership mindset.
Determining your SCA is only one of the many ways that a franchise system can go about being that little bit extra in front of the pack. Analyzing the situation gives you a leg up on the competition and you can use the information to make sure you’re the obvious choice to potential franchisees.
Mark Fernandez - brings over 20 years of senior management experience in business development and franchising to your business. If you would like to discuss your competitive position further or would like help with implementing any of the ideas in this article, please Contact: Mark Fernandez Director Business Development Alliance www.bda-online.com.au mark@bda-online.com.au
maxiom
Entrepreneur’s Edge | 49
WE GET RESULTS. The Maxiom Network reaches over 300,000 entrepreneurs, business owners and senior level professionals every month. Click Here to Grow Your Business
Our digital magazines are read by your target audience, business decision makers. More About Our Magazines
More About Content Solutions
Digital Magazines & Newsletters
Content Solutions & Digital Publishing
Maxiom delivers the Business information and advice you need - from the best sources business leaders from around the world straight to your inbox as digital magazines and one-stop-shop e-newsletters. Subscriptions are completely free…[Read More]
Higher quality lead generation, information capture rates and audience engagement has never been easier. Combining Maxiom’s ability to create beautiful engaging marketing assets with our cloud-based platform gives you unprecedented opportunity to increase and measure your marketing’s effectiveness and audience engagement... [Read More]
www.maxiomdigital.com 50 | Entrepreneur’s Edge
maxiom
maxiom
Entrepreneur’s Edge | 51
MARKETING | Edge
WHAT TO LOOK FOR WHEN HIRING A PROFESSIONAL GRAPHIC DESIGN AGENCY By Trevor Cooke
The benefits of hiring a good graphic design agency are many There are an oversupply of designers out there, so why are the great ones so hard to find? Choosing the right design agency - one who will clearly understand your vision - can be a time consuming and tedious exercise. You want a designer who can take the visualisation you have of your company name or trademark, what your business represents and the message you want to send to your audience and replicate it. Here are some things to look for in a graphic design professional.
Skills Required - The design agency you decided to use should be capable of designing with the most up to date software. Creativity is part of the Personable - The graphic job, and that aspect should be designer you work with should be evident as they carry out the approachable. They should project. carefully listen to your instructions so that they do not miss any But it shouldn’t end there. Too detail. In addition, they should many designers and agencies ask questions where necessary, are just proficient at using the so that they access as much software but lack real knowledge information as possible and understanding of modern Open communication business requirements, channels - A professional Pricing - Dealing with design marketing and brand development as well as specific creative design agency should agencies can get a bit tricky industry knowledge relative to have an open communication when it comes down to pricing. channel with you at all times. This So be cautious about the agency your business. will keep you in the loop you pick, and ensure all the costs The best agencies have industry throughout the design process. It are given in writing, prior to specialists, who have worked will also give you a chance to starting the project. Be sure to with many companies like yours gauge how much time and effort read all documents before and understand the audience you they are putting into your project. signing. This eliminates any are trying to reach. future misunderstandings or Prior research - To get a hidden costs. The agency should also have complete understanding of your vision and be proficient in the Passionate Good designers creative design needs, an agency should be willing and are genuinely passionate about technology available to ensure your message is consistent able to conduct thorough their work. across all channels. research.
52 | Entrepreneur’s Edge
This will give them insight into your company, industry and target market as well as your business focus.
maxiom
maxiom Group of Companies
Advertising Tailored To Your Requirements
A great way to be seen! How else will your Potential Clients Find You?
maxiom
Entrepreneur’s Edge | 53
ENTREPRENEUR | Edge
GETTING TO KNOW YOU: MICHEL HOGAN BRANDOLOGY Michel Hogan is an Independent Brand Advocate dedicated to helping organisations make promises they can keep and keep the promises they make – with a strong, resilient organisation as the result. 1. What inspired you to start
organisations and a desire to Brandology? What are your help give those organisations tools and confidence to own goals and values? their own brands and to stop When I moved back to Australia outsourcing who they were to others. As a note I trained and from living in US for 15 years, worked as a designer in a Brandology became the variety of mediums for many continuation of my brand years and so this perspective practice and so even though it emerged both from my own was new to people here in experiences and observing the Australia, it really wasn’t. industry around me from the inside. My goal is to encourage and inspire people to be deliberate about the promises they make. 3. What types of customers do you help? What experience do you have My values are: Build strong relationships; Always ask helping small business questions and; Work with customers? purpose. You can find more explanation around them in the My customers are almost meet Michel section on exclusively small and medium michelhogan.com. businesses. I also work for nonprofits, start-ups and individuals. 2. What was the driving force behind your decision to I have made a deliberate specialise in brand decision not to seek out large corporates as customers, advocacy? although don’t rule out working with them on the right kind of Frustration with what I saw as project. too many agencies projecting their own agendas on
54 | Entrepreneur’s Edge
4. What are the main reasons that someone would choose Brandology to help grow their business? Because they are interested in and committed to understanding what promises they are making and how to keep them. I firmly believe that this is the most important work an organisation can do to build their brand. As I like to say - your brand is the result of the promises you keep! 5. What process, services and support do your clients receive? Probably easiest to use the following description from my profile: “Unlike traditional “branding” programs that produce campaign driven results disconnected from the way you do business, my unique process involves Socratic-style
maxiom
Michel Hogan
discovery in which the true persona of your organisation is revealed, not invented.
Thankfully there were many kind people happy to meet with me and help me understand the lay of the land.
That analysis is followed by an exploration of your desired future 7. Tell us about some of the state and the critical gaps and expectations that you had. misalignments between the two. Have they been met? Business practices are then added, subtracted, adjusted, and tested to ensure that promises can be kept.”Because I work as an advocate, I am always “for the customer”, which means sometimes telling them they don’t need me or should seek out a different approach than I provide.
Mostly I expected to find greater resistance to my ideas and philosophy, given it is a long way from the most people see and think about Brand.
maxiom
nationally? Yes. I work with clients from all over the country. 10. Do you have any plans for
overseas expansion? I still work in the US - you could say Australia was my overseas expansion. 11. What would you say to
someone looking for a So the fact that customers and business or marketing people in the business consultant and what advice community have been so open to would you give them? my message and approach has been great and a welcome I would say make sure that the surprise. people you work with share you
In addition to that my goal is for our work together is to provide a foundation of knowledge and 8. What types of services do perspective that means they you offer? won’t need me in the future. The specific project services I 6. What challenges did you provide all stem from the face in setting up your approach that is talked about business? above, in general they fall into three categories: Strategy and The biggest challenge was alignment; Experience and learning the different nuances of culture; and Communications. doing business here in Australia. After so many years in US, I needed to learn a new “language”.
9. Do you provide services
values (as much as possible). That’s not to say they need to think the same way, but that your beliefs line up. On the advice front it’s quite simple, know what promises your business is making (even the implicit ones) and make sure you can keep them. If you can’t change what you need to so you can or make different promises.
Entrepreneur’s Edge | 55
ENTREPRENEUR | Edge
WHAT IS AN ENTREPRENEURIAL GENIUS? By Dr Gene Landrum
An entrepreneur is an enlightened renegade. The entrepreneurial will never be caught saying something like, “You can’t do it as it is not in the budget.” Crisis is the mother of creativity. What is an entrepreneur? An entrepreneur is an enlightened renegade who refuses to kow-tow to conventional wisdom and is always willing to bet what they have to get what they want. Very simply, an entrepreneur tends to be a tempestuous radical on a mission to sate a deep-seated passion; an obsessive Promethean (Intuitive-Thinker) willing to sacrifice all for the redemption of a dream.
medals. That doesn’t mean the entrepreneur makes radical decisions or isn’t rational. It just means there isn’t much they won’t do to see their dream commercialized. As any worldclass athlete will tell you, those who are uncertain when in the heat of battle end up as casualties. The entrepreneur, like the athlete, should come prepared with a mindset that is to win, and not one that is not to lose.
a market void. It is why Mark Zuckerberg, of Facebook fame, turned down $50 billion for his firm at the age of 23. The entrepreneurial do not do it for money, would never, ever be caught saying something like, “You can’t do it as it is not in the budget.” They are not into policy manuals or any other ritualized system that says you must do this in any given way.
Sam Walton violated every manual at Wal-Mart and even What is the magic behind the broke his own rules. Do you think Strange as it may seem an drive? Thomas Edison ever made one entrepreneur tends to leap decision based on the money he before they look. The one absolute about the could make? Never! When impassioned entrepreneur is that Edison was told no one would That is scary to the security take chance on producing his driven, traditionalists who tend to they can’t wait to get to work in the morning and often refuse to incandescent light bulb he see the entrepreneur as some vowed, “It is factories or death.” kind of sociopath on a mission. leave at night. For them it isn’t work but an exercise in fulfillment. Then he put up the money to But the leap is often a leap of Money, for them, is not nearly as build the first GE plants. faith for a dream, where being prudent isn’t likely to win any gold important as the opportunity to fill
56 | Entrepreneur’s Edge
maxiom
In building their firms, did billionaires Michael Dell, Jeff Bezos, Richard Branson or Donald Trump do something based on the almighty buck?
Bucky Fuller and Martha Stewart began their businesses after having been fired.
Your family may be the first to tell you to get a job and do what is Never! For them money was but safe. a way to keep score. Richard Branson wrote in Losing My Wrong! Chase your dreams and Virginity (1999), “I can honestly it will never be work, but a say, I have never gone into passion for life. business to make money. I rely more on gut instinct than researching huge amounts of statistics. I make up my mind about a business proposal, or new people I meet, within 30 seconds.” Bucky Fuller proclaimed in Critical Path, “You can make money or make sense because the two are mutually exclusive. The drive to make money is inherently entropic, for it seeks to monopolize order (Fuller p. 276).” It has been found that most great breakthroughs have occurred during periods of breakdown. As I have preached, Crisis is the mother of creativity.
Dr. Gene Landrum Dr. Gene is an author, lecturer, consultant and Professor Emeritus of Hodges University. In 2011 he was inducted into the Entrepreneurial Hall of Fame in Dallas, TX. D. Gene tells friends who face problems on their trek to the top, “No one ever makes it to the very top without a visit to the bottom.” To read more you can visit his Website: www.genelandrum.com
Soichiro Honda only started building Honda Motorcycles after his parts factory was bombed in Tokyo. Henry Ford, Walt Disney,
maxiom
Entrepreneur’s Edge | 57
SALES & MARKETING | Edge
INTEGRATION OF YOUR SALES AND MARKETING DEPARTMENT PRE AND POST MERGER By Thomas H Kessler
Puts you into the mindset of doing a M&A (Merger and Acquisition) deal. Spans from target selection and due diligence to integration. Highlights the importance of using a clear methodology whether for a AU$ 5 million or AU$ 250 million business. Note: This article is the first in a series of eight articles that aspires to develop your skills in dealing with the challenges of integrating your sales and marketing function.
and keeps meetings rather short. Therefore you typically know what he wants, in order to be well prepared and keep the time needed to a minimum. Walking over to his office, not knowing what he wants, your mind flashes back. Five years ago you started Breaking the news “We will at the tubing company that you acquire a competitor” helped grow from AU$ 500K to now AU$ 5 million in revenue. It is Wednesday August 10th Today the business is focused 2011, a cold but sunny winter day primarily on supplying PVC tubes in Melbourne. You are being to the solar panel industry. called into the office of Michael O´Keen, CEO and founder of the As you enter the office Michael is company you joined some 5 shouting out in his Irish American years ago. Joan, his assistant, accent “Hey Fred, how are you? did not know the reason for the Look we've decided that we will meeting, nor what the issue be expanding our business. Do might be that will be discussed. you know Southwest Tubing?” Of
price points. They have some aggressive sales people and tactics and their marketing is very strong. Several times have they beaten you in competitive RFPs (Request for Proposals).
“Well, to be precise, we are in the process of buying them,” Michael continues to elaborate. “It’s a competitive bid situation and Malcolm Smith, the owner, just wants to retire. I think they would make a perfect extension of our product range. With their revenue we could double the size of our business and address some customer segments that we have just never been able to target because our products are too expensive. Now, given your course you know them. They background at Boyden This is rather unusual; Michael is have been a competitor with less Chemicals I‘d like you to take on one of these CEOs that is innovative products, but lower the job of helping us to do some extremely organized, focused
58 | Entrepreneur’s Edge
maxiom
due diligence, and if we decide to go ahead, to integrate the sales and marketing activities. What do you think?” Your thoughts are circling back to the time when Boyden acquired you at Becket Chemicals and you had to transition through a rather rough time during the integration. What lessons did you learn back than? Which activities would you focus on this time around? What are the most important steps to consider when assessing the acquisition and integration of a target? “Well Michael,” you hear yourself answering, “Based on my experience we should focus our efforts on six steps.”
Initially we need to understand the customer-revenue-sales rep. relationships and the quality of revenue generated. Later on we need to
Alongside these steps, and also for the next steps, we need to, first and foremost, define the revenue generating synergies.
Cost synergies will be there as well, but we should put our attention first on securing existing ● Identify the target markets, revenues and generating additional revenues before we industries, customer segments to cross-sell both even think about cutting cost. product ranges. 3. Marketing strategies ● Identify the changed implemented post merger: marketing mix, based on the joint requirements, We need to: including prediction of ● Establish a Sales and competitive reaction Marketing “war-room.” towards our possible merger. ● Establish a joint marketing steering meeting.
1. Understand the target’s customer marketing and sales mind-set: We need to develop a solid understanding of their marketing and sales mind-set, how they develop, build and retain customer relationships and how they meet customer needs. 2. Analyze the new market situation and key changes required:
maxiom
Sales War Room - Aligned goals reduce customer issues.
Entrepreneur’s Edge | 59
SALES & MARKETING | Edge
● Define which senior sales people will run the sales force integration, drive joint revenue growth, manage the development of customer communication about the merger and develop new marketing, sales and differentiating positioning strategies during the integration. ● Address and resolve customer issues during the transition period. One important, if not the most important element, will be to define which customers are at risk of shifting to competitors and what steps need to be done to prevent this. After all, our competitors will try to do everything to exploit any insecurity our customers have about our merger. 4. Understand and consolidate the marketing function: We need to integrate the marketing departments through defining ● Which roles and responsibilities will be required going forward.
60 | Entrepreneur’s Edge
● How we will approach brand management, advertising procurement and campaign management including marketing - IT integration. ● Most importantly, we need to identify the key influencers in the marketing function, those that are really key for the sales force and paramount for marketing the company and to get them signing a retention bonus agreement. 5. Co-ordinate and confirm the combined promotional effort: We need to understand our joint promotional efforts across all promotional avenues like advertising, PR, direct marketing, sponsorships, trade shows and so on. Once we know ‘the lay of the land’ we need to define our joint marketing and promotional messages, objectives, budgets and key performance measurements.
advertising processes that may be outsourced. 6. Develop an integrated sales department for the new business: ● Finally we need to define our strategic approach. How to: ● Manage the sales force. ● Establish an augmented sales strategy and our sales scope. ● Define and collate the sales information needed to restructure the sales force. ● Analyze any potential adversarial impact of our planned changes on our revenue line.
Anticipating the reaction of our customers towards the proposed changes will be particularly important. Frequent and direct communication with the customers will strengthen the relationship and eliminate any doubts that they may have. Last but not least we need to devise Thereafter we need to develop new campaigns, and adjust any our strategy for sales force existing campaigns, including the automation and ensure prompt sales trainings. parts of the promotional and
maxiom
Michael responds after you finished “That is a lot of work you just mentioned. Why don’t you go prepare a short presentation for the board and we circulate this? I believe this is very important information and we need to think it through clearly, in advance.
4. Understand and consolidate the marketing function. 5. Co-ordinate and confirm the combined promotional effort.
6. Develop an integrated sales Yes, I agree that we need to force for the new business. focus on revenue generation, not cost cutting, and also, yes, we Thomas H Kessler really need to do everything to keep all customers, ours and Thomas H Kessler, is founder theirs!” To be continued … The following is the list of articles that will follow up this introductory article and provide you with additional insight into the topic “How to integrate you sales and marketing organization. 1. Understand the target's customer marketing and sales mind-set. 2. Analyze the new market situation and key changes required.
and head of M&A integration at Kessler Praxis Consult, a consulting firm that specializes in M&A integration and member of Global PMI Partners. He previously worked with clients in the US, Europe and Asia. His industry experience covers telecom services and equipment, basic chemicals, capital goods, automotive suppliers, financial services and a broad variety of technology subsectors. Tom frequently speaks on the topic internationally. www.integrationsuccess.com www.gpmip.com
3. Define the marketing strategies implemented post merger.
maxiom
Entrepreneur’s Edge | 61
GET YOUR MESSAGE OUT TO THE WORLD Maxiom helps brands increase revenue by inspiring their customers to buy products, engage and share content. It enables marketers to create beautiful content experiences in a variety of formats on the web, on many different platforms and across mobile devices.
This is particularly powerful for organisations that are looking to create commerce enabled content experiences and distribute them efficiently across multiple channels. Maxiom helps you create the ultimate digital lead generation campaign.
CLICK HERE To Find Out More about How Maxiom Can Provide a Solution to All Your Digital Content and Creative Needs 62 | Entrepreneur’s Edge
maxiom
maxiom 64 | Smart Company Magazine
maxiom Entrepreneur’s Edge | 63
ENTREPRENEUR | Edge
WHAT BREAKS US OFTEN MAKES US “The order of life takes place amid great chaos” - Ray Kurzweil Knowing too much can prove our Achilles Heel. Transformation & Mental Reprogramming What we “know” can be as bad as what we “don’t know.” It is a fact that the majority of people get in trouble by not understanding this simple maxim. The bottom line is that what ‘breaks’ us is often what can ‘make’ us, but most people are unaware of it and thus become lost in their own anxiety mindsets or crawl into the proverbial bottle. It was not an accident that Madam Curie suffered from a nervous breakdown just prior to both of her Nobel Prizes or that Lance Armstrong had testicular and brain cancer prior to setting an unprecedented number of wins at the Tour de France.
By Dr Gene Landrum
The mind and emotional system is like a bone. Safe is not correlated with success.
Russian biologist Ilya Prigogine This author found, in doing his won the Nobel Prize for showing doctoral work on success that out that the mind is much like a bone. of chaos comes empowerment. If you break a bone in your arm and it heals properly it will never break there again. Why? Because it heals stronger where it was broken. Well, the mind and emotional system is like a bone. Prigogine told us, “Many systems of breakdown are actually harbingers of breakthrough.” In his validation of this principle he wrote:
One of his subjects in that study was the founder of today’s Big Box retailers known as the Warehouse industry - Costco, Sam’s, Home Depot and Best Buy. It happened only because Sol Price was fired when he was 60-years old. He was out of work and walking the streets of San Diego for solace, and talking to small retailers, when he had an epiphany. The small retailers told him about the problems of getting candy, cigars and other items every two weeks from a middleman and paying 35% for the privilege.
“Psychological suffering, anxiety and collapse lead to new emotional, intellectual, and spiritual strengths. Confusion and death can lead to new scientific Sol saw this as a very oldideas.” (Dr. Ilya Prigogine 1984 – fashioned way of doing business Order out of Chaos) and rented a large warehouse outside of town and contacted the small retailers to come to Knowing too much can prove our What does this have to do with winning the game of life or him. He cut costs dramatically by Achilles Heel, as has been business? A lot! The past is having no chandeliers, carpets or shown in the lives of those who prologue but most people remain other social amenities so that he broke down but refused to let it interfere with their breakthroughs. lost in the debacles of the past. could have margins of 12%,
64 | Entrepreneur’s Edge
maxiom
instead of 35%, on the products they bought. Sol became a billionaire, at an age when most men were retiring, by not quitting and by finding a reason to get up each morning.
told him he was “a loser.” What did Bucky do? He walked to Lake Michigan to commit suicide since life was no longer worth the hassle. Sitting on the cold steps of Lake Michigan he began thinking about his life and This is not an isolated case. Walt dilemma and told himself, “You Disney was fired as a cartoonist, do not have the right to eliminate his idyllic job, went bankrupt in yourself; you do not belong to his very first venture in Kansas you; you belong to the universe.” and then when he launched his Bucky decided to go within and first cartoon hit - Oswald the spent the next two years as a Rabbit - it was stolen from him by mute refusing to speak to a nefarious New Yorker. Walt anyone, including his longsuffered a nervous breakdown suffering wife. and on his train ride back to California drew Mickey Mouse - Out of that transformational and the rest, as they say, is period rose one of the most history. incredible innovative geniuses America has produced. An even more memorable example of hitting bottom and The geodesic dome that adorns reaching the top comes from the the entrance to Disneyland and life of Buckminster Fuller. all of the world’s enclosed stadiums is due to Fuller’s Bucky’s daughter died when he introspective eminence. was absent and he took it personally. Shortly after this Out of tragedy was born an tragedy he was fired from his job incredible superman. by his father-in-law. When he called his mother for support, she
maxiom
Mind Viruses & Economic Viability Most people identify with their jobs to such a degree they go into shock or play the tranquilizer game of life when they lose their job. Wrong! They should not have such an identity in the first place. Identify with some personal and viable long-term career goal and then a job loss is merely a temporary distraction on the way to Shangri La. What is this all about? The need for mental reprogramming! All of us are walking around with mental messages from the past that were put there by well-meaning parents, teachers, preachers trying to keep us safe. Well safe is not correlated with success. We all walk around unaware that 95% of our decisions are unconscious. And on top of that a similar number of our decisions are self-serving to the point of being self-destructive. That is why focus groups are not the
Entrepreneur’s Edge | 65
ENTREPRENEUR | Edge
means to answers in new marketing ventures. New Coke bombed because of asking people what they thought about products. People don’t know, but they think they do. Coke executives listened to focus groups on taste tests and capitulated. Harvard’s Gerald Zaltman looked at the data and found that focus groups are unfounded. He wrote, “People can’t tell you what they think because they don’t know. Their deepest thoughts, the ones that account for their behavior in the marketplace, are unconscious.”
new rather than simply replaying already-mastered skills. It causes the brain to grow and expand. We all have become habitual in many ways and it makes us mediocre.” The following table offers insight into mind-modeling via the use of a snow-sledding metaphor: Mind Reprogramming Metaphor - Snow Sledding and Behaviour Modification Nothing spreads atrophy like being immobilised in the same environment.
This tells us to dump the mental baggage of the past and fill our brains with positive new axioms for the future. New brain research has shown that we can now alter how we think. It was said best by Michael Merzenich at the University of California: “In order to keep the brain fit we must learn something
66 | Entrepreneur’s Edge
Keep sliding down new paths and original learning keeps occurring.
We learn that it is easier to slide down the same snow tracks - habitual learning
We burn new brain cells by breaking new ground experiential learning.
“The brain has the capacity to learn and be changed” Michael Merzenich
maxiom
What Makes Us Strong is Often What Makes Us Weak Homer saw the truth in all this 2500 years ago when he depicted Prometheus as a Greek Titan who defied his big boss Zeus. The defiant titan ignored Zeus and brought light to man. This had made him the poster boy for entrepreneurship. Is there a price when we do such a thing? Sure! For his defiance he was chained to a rock where his liver was torn asunder. It is no accident that psychologists use Prometheus as the metaphor for those of us who see the world globally but deal with what we see locally (Intuitive-Thinkers). Psychology has labeled these types Prometheans – or change masters. They tend to see the world through a philosophical filter and deal with what they see rationally. Prometheans see business as a game and the rewards are the way we keep score in that game.
maxiom
Those who permit themselves to be destroyed by what is bad in their life tend to self-medicate or self-deprecate or even worse. The bottom line in all this is to deal with the bad stuff. If you are part of the problem, then change, and get out of those habitual behaviors that cause you problems and anxiety. Start sledding down new paths and break new snow - and while you are doing it you will be burning new and different brain cells that are more positive in your life.
Dr. Gene Landrum Dr. Gene is an author, lecturer, consultant and Professor Emeritus of Hodges University. In 2011 he was inducted into the Entrepreneurial Hall of Fame in Dallas, TX. D. Gene tells friends who face problems on their trek to the top, “No one ever makes it to the very top without a visit to the bottom.” To read more you can visit his Website: www.genelandrum.com
Entrepreneur’s Edge | 67
LEADERSHIP | Edge
WHY TRAINING IS A COMPLETE WASTE OF TIME AND MONEY By AndrewBrown
Training, as we have known it, is no longer relevant in today’s business environment. The Internet has turned education totally on its head. Save your money and ditch the training today. Build a culture of innovation and creativity instead. Training is an unnecessary expense in the view of many companies.
training methods and are telling their staff, “There will never be any formal training” and” If you don’t like it, don’t apply.”
And they are dead right! The Internet Like many out-dated business Often, formal training is for those methodologies, training, as we who want to look like they are have known it, is no longer learning. People sign up for relevant in today’s business training to get away from work. environment. There are many other better, cheaper or even free options for Entrepreneurs, executives and learning. Some of these are as employees at all levels now must simple as: embark on a lifetime of learning ● Google - you can easily to maintain competitiveness, find answers to almost make themselves promotable any question you want or and build high performing need to ask. workplaces. ● Professional or Social The training industry has built up Networks - Get advice, a multi-billion dollar fortress guidance and solutions around mediocrity that has to be from your peers. bulldozed if we are to succeed in ● Trade Magazines, tomorrow’s world. Business Publications More and more high performing and journals - there are business are ditching the old some great business
68 | Entrepreneur’s Edge
publications, both free and subscription-based that provide up-to-date information on a variety of business topics. The Internet has turned education totally on its head. Many training organisations simply haven’t changed with it. It is now very easy to find great guidance and advice from world leaders in your field without the need to pay exorbitant training fees and remove staff from productive work. Another benefit is that most training is based around the lowest common denominator theory. A one size fits everyone in the group philosophy. Of course, training organisations will deny this, but how else can they afford to deliver training if it isn’t developed to be delivered to many?
maxiom
Now I hear some of you suggesting webinars and online training are often available. But these courses are almost always curriculum based, so the same information is delivered to everyone doing the course and rarely, if ever, tailored to each person’s needs, career aspirations or the business’s commercial aims. By the time someone puts together a training course, it is old information. When you Google something or ask for guidance from your peers on professional networks you are getting current information. Business is constantly changing Formal training constrains creative thinking and innovation. This is important, as today all your staff must be able to develop creative solutions. Leading organisations ask their employees to go against the grain, to swim upstream and question everything. We need this innovation and creativity to drive our businesses. Waiting for trainers to develop a training course just isn’t a viable option for most business-based
maxiom
learning any longer.
Due to the nature of most training organisations, structures and High performing workplaces are business models, trainers simply often built on a culture of learning. can’t provide, yet alone deliver, But this learning doesn’t come this type of support. from traditional training. It comes from individuals constantly In fact, most organisational inlearning, at their own pace and in house training suffers from the their own way, what they need to same problem. And trainers are learn to be better at their jobs. just that - trainers. They themselves have been trained to Mentoring deliver training. They are not business leaders or innovators High performing workplaces and rarely are they creative often incorporate mentoring to provide guidance to employees thinkers. How do I know this? I’ve been advising boards of major so that what employees learn corporations - “mentoring” them if helps both the employee meet you like - on how to build a culture their career goals and the business achieve its commercial of learning in their companies, aims. Mentoring is not training. It without compromising creativity and innovation. is guidance and advice counselling and support. In 25 years, I have never had a person come to me saying, “I Within organisational settings, can’t solve this problem.” In a mentoring is a commonly employed strategy for developing modern business that is a step towards getting fired. talent and sharing and maintaining organisational Save your money and ditch the knowledge. training today. Build a culture of innovation and creativity instead. A mentor is someone with the experience and expertise to help Make employees accountable for you achieve greater clarity their own learning and watch your around your role and career employees and your business direction. Mentoring can also grow. help you to achieve a particular business outcome.
Entrepreneur’s Edge | 69
LEADERSHIP | Edge
COULD YOUR SEX DETERMINE WHAT YOU ARE PAID? By Naomi Simson
Australia has a persistent gender pay gap Simply being a woman is the major contributing factor to the gap in Australia, accounting for 60 per cent of the difference between women’s and men’s earnings What can you as a business leader do to address this inequality? Being a woman means statistically I will be paid less! It is that simple. Surely it is not that hard to fix. Each year in Australia (usually around the time of International Women’s Day) the government releases a report to say - yet again - there is a massive disconnect between what men and women are paid for the same job and the same amount of work experience; known as the gender pay gap. Australia has a persistent gender pay gap. Between 1990 and 2009, the gender pay gap remained within a narrow range of between 15 and 17%. In 2010 it sat at 16.9%. Is this the same in other countries? According to a 2009 report by the National Center for Social and Economic Modelling:
70 | Entrepreneur’s Edge
"Using robust microeconomic modelling techniques, based on a comprehensive and critical evaluation of several methodologies, we found that simply being a woman is the major contributing factor to the gap in Australia, accounting for 60 per cent of the difference between women’s and men’s earnings.” Recently I was speaking to a leader of a large business who said – “we bring male and female university graduates into our business on the same pay and conditions - yet within two years we see a pay difference of up to 15%”. These are not women who have yet left the workforce to have a family so you could argue statistically they have
been given the same opportunities and responsibilities as their male counterparts. This means that in each individual person’s performance review or salary assessment, systematically, each female is being discriminated against. Is this what they call ‘unconscious bias’? I’m sure these women’s managers do not even realise they are doing it. Is the inequity of women’s pay something that is deeply set in our subconscious (even though equal pay for equal work was legislated in 1969 and anti-discrimination on the basis of sex was legislated in 1984)? Whilst the below amusing video demonstrates the impact of ‘fair reward’ - I would argue that most women don’t know what their male counterparts are being
maxiom
paid. To reduce the gender pay gap it is going to take commitment from business leaders - and data - to make a lasting change.
in the uplift of employee engagement from the women and the ‘PR-ability’ of knowing that you are a truly ‘fair’ employer.
Have a look at your numbers We know that the Gillard today - as soon as you have government has committed to finished this two-minute video. looking at equal pay for lower youtu.be/g8mynrRd7Ak paid workers - but I would argue that it is every business leader’s responsibility to ask for a review of their business to find out…‘for the same role and responsibility what are men and women paid?’ Is there a gap – and if there is a gap – what is being done about it? Action will speak louder than words – simply make the adjustments to make if fair – quickly. If you have 10,000 employees and you find out that women are paid five per cent less than men simply update their salary now by the five per cent. No if, buts or maybe's... no business can afford the bad press of being identified as discriminatory.
Naomi Simson Naomi Simson is founder of fastgrowth experiential gifting retailer http://www.redballoon.com.au. An employee engagement advocate and sought after employer, RedBalloon is listed as one of only six Hewitt Best Employers in Australia and New Zealand with an engagement score of over 90 percent. Comments and questions can be sent to Naomi via her blog at http://www.naomisimson.com
A business will more than recover the cost of the increase
maxiom
Entrepreneur’s Edge | 71
maxiom Group of Companies
Maxiom Jobs
A DIFFERENT KIND OF RECRUITMENT SERVICE
Think Big…
Aim Higher…
See Beyond…
All Industries
Top Performers
Qualified Talent
Maxiom Jobs covers all industries and sectors. With over 300,000 business leaders and professionals subscribing to Maxiom’s digital publications, we can help you secure the best talent.
Partnerships with the leading businesses, associations and not-for-profits help you to reach a targeted, highly desired audience.
Pre-qualified pool of passive and active candidates and the hiring managers who seek them
www.maxiom.com.au 72 | Entrepreneur’s Edge
maxiom
Latest Technologies Here at Telecube we aim to do things a little differently. We will provide your business with services that are feature rich and economically efficient. Then we’ll give you control over those services. You can change everything, online and in real time, every time. 1300/1800 Numbers VoIP Phone Systems Email to Fax AutoProvisioned Hardware Auto Attendant (IVR) NZ 0800 Numbers
VoIP Phone Systems A complete range of PBX functions at a fraction of the cost
100% Satisfaction Guarantee 1300 Numbers : 1800 Numbers We guarantee that you will be satisfied with our available 1300 number selection. We handpick our numbers and they are almost always better numbers than the others are touting as ‘Gold Numbers’ or ‘Premium Numbers’ We absolutely guarantee that if you are not 100% satisfied with the numbers available to you we will refund 100% of your signup.
Signup Now Are you ready to signup with the #1 provider of 1300 numbers and 1800 numbers? Click through to the signup process and you’ll have your new number up and running in a few minutes.
maxiom
Entrepreneur’s Edge | 73
MARKETING | Edge
LET’S NOT TALK ABOUT BRAND By Michel Hogan
Brand has had its day. Let’s talk about the things we already do that don’t need a moniker or label to be understood. Let’s talk about how we can make promises we can keep and keep the promises we make. Let’s have a different conversation instead.
should really be focusing on. The disclosure I do have a word I use Distraction. to describe what I talk about, but that is not a replacement for Over 10 years ago Saatchi & Make a lot of noise over here Brand.) What I am suggesting is Saatchi CEO Kevin Roberts and over there maybe people that we put Brand out to pasture proclaimed that Brands were won’t notice everything they for a bit. table steaks, old hat, of no use to aren’t doing. anyone. At the time I disagreed Give it a little holiday and with him wholeheartedly, but Made little more than the pawn let’s talk about the things we during the ensuing years I’ve of marketing whim, it too often already do in our organisations come to see he had a point. finds itself sacrificed to hype instead. Things that don’t need a and “unkeepable” promises so moniker or label to be Granted, it wasn’t the point he out of alignment with what the understood. was making (which was in organisation can really deliver as support of his “brand to be almost fictional. Let’s talk about why we are doing replacement” Lovemarks). what we do in the first place. Or even worse it gets strip mined However, in his contention that of it’s history and legacy in Let’s talk about what our values Brand has had its day – well on service to whatever the agency are. What we believe and how that front, I now agree. Brand d’jour deems the latest we show them. today has become a crutch. incarnation. Let’s talk about our products and That thing organisations too often I’m also not here to suggest we services. What problem do they do instead of the things they give “Brand” another name. (Full solve? Why will people want to buy them?
74 | Entrepreneur’s Edge
maxiom
LOOKING TO IMPROVE BUSINESS PERFORMANCE TIPS, ADVICE & GUIDANCE ON OUTSOURCING FOR BEST RESULTS
Let’s talk about who the right people are for our organisation and how we want to treat them. Let’s talk about our customers and what expectations we want them to have. Let’s talk about how we can meet those expectations (not exceed them because that takes a lot of resources with little return). Let’s talk about alignment of all of Michel Hogan that across different areas of our Michel Hogan is an Independent organisation.
Brand Advocate dedicated to helping organisations make promises they can keep and keep the promises they make - with a strong, resilient organisation as the result.
And most importantly let’s talk about how we connect those things up and really understand them so we can make promises we can keep and keep the promises we make. Consistently. Currently based in Victoria,
Australia, she works with a diverse range of clients Because in the end that is what will get people to remember you, throughout Australia and the United States – including small-totalk about you and come back for medium size enterprises, more. individuals, larger corporations, and nonprofits.
Let’s not talk about Brand. She also publishes a blog at michelhogan.com. You can follow Michel on Twitter @michelhogan.
maxiom
CLICK HERE TO SUBSCRIBE IT’S COMPLETELY FREE AND OPEN TO EVERYONE! Entrepreneur’s Edge | 75
ENTREPRENEUR | Edge
10 AVOIDABLE MISTAKES CAUSE ENTREPRENEURS MUCH PAIN By Marty Zwilling
When you try new things, you make mistakes, and I’ve seen many. Smart companies learn from their own mistakes, but some don’t pay enough attention to other people’s mistakes. The one unforgivable mistake you should never make is to repeat a I’ve been advising and mentoring startups and growth companies for years, and find myself always pushing them to try something new, for the sake of growth and survival. In the spirit of saving you a few lifetimes of pain, here are some common mistakes that seem to happen routinely: 1. Wait until your company is up and growing before you formalize it.
almost every state, you can incorporate as an LLC with a minimal effort, and a cost in the hundred dollar range. This step shows everyone you are serious, and limits your liability on any mistakes. It also forces you to pick a name for your company and put other intellectual property stakes in the ground. It’s not that hard to change later to a C-Corp.
Company and product naming may also seem simple, but should be a key early effort, Some entrepreneurs can’t because mistakes can be very decide if they want to be a costly. You may recall the Chevy Limited Liability Corporation (LLC) or a C-corporation, or they Nova, a compact car from GM. don’t have the money, so they put Pundits in Latino countries quickly pointed out that the name, off doing anything until the first venture capital round, or until the ‘no va’ means ‘does not go’ in Spanish. Professional advice in first lawsuit occurs. this area is highly advised. Cultural and religious The simple answer is to do implications must be very something, and start simple. In carefully considered.
76 | Entrepreneur’s Edge
2. Rely on informal agreements with partners. You may all be friends, or spouses, today, but things do change quickly in the stress of a growing company. The same principles apply to strategic partners. Early co-founders often drop out of the picture due to disagreements, and you forget about them, but they don’t forget about the verbal promises you made. Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share. This problem can be avoided by incorporating immediately after early discussions, and issuing shares to all founders. I know two former friends who are still killing each other financially years later over
maxiom
an unwritten agreement, On the other end of the process, remembered differently by each. don’t hesitate to pull the trigger fast when a new hire isn’t 3. Quick to hire and slow to working, but don’t forget to be human and follow all the steps. fire. Carrying a non-performing employee probably triples the If you are growing quickly and desperate for help, you may skip costs, since you are paying two on the homework of a proper job people to do the job, and at least one other is de-motivated by the description, or validating inequity. applicant credentials are a fit before you proceed to interview. 4. Only hire people who like The message here is that if you you or think like you. don’t know exactly what help you need, you probably won’t get it. Flattery feels good, but it doesn’t Hiring after one interview is like pay the bills. Look for the hopping a red-eye to Vegas to thoughtful challenge to your get married after one date. ideas, and practice active listening, when you are selling Equally bad, you may know what your vision. High three-digit you want, but you are trying to intelligence has value. force-fit the candidate into the position. Maybe she’s related to Some executives think they can the boss, or you are confident mix business with pleasure, with that the candidate will be a good inter-office relationships. We all helper, and can learn a lot from have our favorite story on this you. Helpers are expensive, one. since it often takes longer to jointly do a job than it would take Make it a rule to not fraternize one qualified person to do it with your employees, and choose alone. your partners wisely.
maxiom
5. Be super-conservative on your cash needs. Double-check both the money you need before funding, and the size of investor funding requests. You will be amazed at how many items you forgot to cover, and how fast the cash disappears. You should buffer the first by 50%, and the second by 25%. Severe cash flow problems are a big mistake, and may not be recoverable. When you have people and their families depending on you for their paychecks, and you are strapped for money, there certainly won’t be any money for growth. Even if you can find someone willing to help, it may be a very expensive proposition. Cash is more important than profit. Cash is more important than profit.
Entrepreneur’s Edge | 77
ENTREPRENEUR | Edge
6. Let your accountants manage the expenses. Too many founders think it’s more important to work on products and customers. In reality, the most important task of every small company CEO is to review every expense with a miserly hand before the money flows out. Do not delegate this task.
For a company to grow, the team has to grow, and decisions must be delegated. Smart growth companies hire decision makers, not more helpers.
and “pivoted” their operation several times during their rollout and growth phases. So be alert and be flexible.
Plan for strategy changes by Even early in the startup process, scheduling an adjustment review you need someone like-minded every month. Watch out for the but complementary in skills to unknown, such as an economic help you with the startup plans. recession you hadn’t counted on, It’s always good to have or a new competitor with deep someone to test your ideas, pockets, or the changing trends keep your spirits up, and hone in the industry. Be sure to your business skills. communicate changes to the A variation on this theme is team effectively and often, so it promising a burn rate to doesn’t look like you are making investors than you can’t deliver. Lastly, make good use of your Board Members. One or two random changes. “experts” who have “been there That means managing a bottoms-up budget process, and and done that” can head off many 9. Let the daily crisis keep you mistakes and suggest a calm from the “most important” living within the budget. The recovery plan for the ones you result of budget and expense issues. make. Resist the ego urge to overruns is not only lost growth opportunities, but lost credibility “go it alone” or to convince It takes practice and effort to yourself that you are smarter than and lost support from investors focus on the most important your competitors. and vendors. things first. In business, “most important” means time to market, 8. Defining the strategy is a 7. Make all the decisions customer service, low cost, and one-time process. yourself. beating your competitors. It also means knowing when to Assume your initial strategy will delegate, when to rest, and One person making all the be wrong. Most startups I know reserving time for effective decisions doesn’t mean better have “refined” their target market communication with your team. decisions, and certainly not faster ones.
78 | Entrepreneur’s Edge
maxiom
If you allow yourself to be driven 10. Ignore the mistakes of by the crisis of the moment, you others. will lose the ability to set priorities and focus on goals. The biggest mistake of growing companies is failing to learn from Personal discipline is the key the mistakes of others, or even word here. Working in isolation from your own mistakes. and handling all the issues is fine during the creative phase of the You can only learn from your startup, where the founder is mistake after you admit you’ve often the designer and architect, made it. as well as the builder. Wise people admit their Now this same individual has to mistakes easily, and move the graduate from short-term thinking focus away from blame to long-term thinking. management and towards learning.
Therefore, mistakes should be celebrated and learned from. But the one unforgivable mistake you should never make is to repeat a previous mistake. In the end, ask yourself this question: Is it better to try and fail, or never have tried at all? To grow in the business world, never trying is not an option.
Marty Zwilling‘s passion is nurturing the development of entrepreneurs by providing firsthand mentoring, funding assistance, and business plan development.
to a large online audience of over 550,000 Twitter followers. He is also a regular contributor to Forbes, Harvard Business Review, Business Insider, and the Huffington Post.
He is the Founder and CEO of Startup Professionals, a company that provides products and services to startup founders and small business owners.
He also published two books, “Do You Have What It Takes To Be An Entrepreneur?” and “Attracting an Angel.”
He writes a daily blog for entrepreneurs, and dispenses advice on the subject of startups
maxiom
The list goes on and on. But the reality is that making mistakes is part of every successful growth effort.
http://www.startupprofessionals.c om/Startup-ProfessionalsBook.html
Entrepreneur’s Edge | 79
CUTTING | Edge
13 CONSUMER TRENDS FOR 2013 By Morris Miselowski
2013 is going to be a year of nostalgia, consolidation and innovation. The world will increasingly become jaded with social media as it evolves to become as ordinary and mundane as the phone and fax machines of old. The past few years of angst and trepidation have spurred next year’s response to offer us a year of where we will return to simpler time with a most modern twist. This will be evident in the foods we will eat, the colours we will paint our homes, the clothes we will wear, the names we’ll give our children and the technology we will see over the next 12 months that will all pay homage to the past as it reinvents itself for a new tomorrow. Here are some of the key trends and influences I’m seeing over the horizon that will impact our 2013. Here’s what we already know about 2013: Australia’s population will exceed 23 million people (up from today’s 22.84 million). World population will exceed 7.2 billion (up from today’s 7.08 billion). We will have a federal Australian election, most probably between
80 | Entrepreneur’s Edge
August and October, as well as a What Will We be Eating and state election in Western Drinking in 2013?¹ Australia in March. Sharing plates, artisan products, Australia will withdraw its troops local sourcing and culinary from Afghanistan by December creativity are set to trend up 2013. restaurant menus and home kitchens next year with the top Analogue TV will be turned off in ten food predictions being: Australia on 10th December 2013. 1. Locally sourced meats and seafood There will be 30.5 million 2. Locally grown produce connected mobile handsets in 3. Healthy kids' meals Australia in 2013. 4. Environmental sustainability as a culinary theme There will be 7.5 billion mobile 5. Children's nutrition as a connected mobile handsets culinary theme globally in 2013. 6. New cuts of meat (e.g. Denver steak, pork flat iron, teres China and India will begin their major) space race in 2013. 7. Hyper-local sourcing (e.g. restaurant gardens) 8. Gluten-free cuisine 9. Sustainable seafood 10.Whole grain items in kids' meals
maxiom
Top 10 drink menu trends for 2013:
with all the others watching the show.
1.Onsite barrel-aged drinks 2.Food-liquor/cocktail pairings 3.Culinary cocktails (e.g. savoury, fresh ingredients) 4.Micro-distilled/artisan liquor 5.Locally produced spirits 6.Locally sourced fruit/berries/produce 7.Beer sommeliers/Cicerones 8.Regional signature cocktails 9.Beer-based cocktails 10.Locally produced beer
And watch out for Apple TV in 2013, another ground breaking, must have gadget to add to their stable. Tailor Made Designers will embrace the new Beyond 2013: Look out for 4D suit in all its forms; some will opt movies making their way into our for a relaxed take, while others cinemas with scent and will go for oversized proportions, movement as part of the or sculpted and cropped experience. silhouettes.
What will we watch at the Movies² in 2013? Another big blockbuster year for movies in 2013, with lots of safebet franchise movies including: Star Trek Into Darkness; Iron Man 3; The Hunger Games Catching Fire; Thor the Dark World; The Great Gatsby; The Wolverine; Mad Max: Fury Road; The Hangover Part 3; Scary Movie 5 Whilst at home we will see the first 4K and 8K television sets offering even sharper images as well as the short march to second screens where we will watch TV on one large screen and have a second screen – smart phone / tablet – in our hands to engage
maxiom
Graphic Content Stripes, spots, checks, and flowers will take on bold proportions at the hands of the more adventurous designers.
What will Women be wearing in 2013?³
Sixties Again Micro hemlines, reworked beehives and ladylike Vogue claims ruffles are back accessories are all poised to with statement ruffles curled over make a return. shoulders and wound around bodies, bringing new dimensions What Colours will we to strong silhouettes. Surround Ourselves with in 2013? Asian Major Kimono-inspired shapes and Vintage design, fossicking and poetic prints call to mind the Far gathering, the meeting of old and East with everything from silk new, and the rise of new pyjamas to sheath dresses technology are among the key coming under an Asian influence. influences that will dominate Australian design over the next Surface Treatment 12 months - and with it our choice The overriding mood for of colours. spring/summer is upbeat, joyous even, and mostly evident in the The Dulux Colour Forecast next textures, fabrications and year draws on the themes of embellishments designers will movement, social change, choose to use. people power and the march of the digital age.
Entrepreneur’s Edge | 81
CUTTING | Edge
It explores how colour is shifting and changing in modern times. Dulux forecasters have identified six palettes, Merge is warm and earthy. Seek updates vintage shades. Empower’s blue-greens speak of confidence. Relaxing Rise uses a soothing Japaneseinspired aesthetic. Share is monochromatic with metal and stone influences. Blur is bold and daring. Major colours for 2013 include yellow, pastel hues and the stand out colour will be persimmon. Juno and Julius, Thor and Maeve are set to dominate birth What will we Name Our announcements. Baby’s in 2013? The last wave of grandma and 2013 children’s name will be an grandpa nickname names apocalyptic mix of wild weather Annie and Molly, Ben and Max will turn to vintage nicknames and the gods preferences from the Mad Men era and a new including names like Winter generation of kids with names (used by actress Gretchen Mol on her baby daughter last year) is like Hank and Hal, Ray and Fay, sounding "fresher" than Summer Millie and Monty, are emerging. or Autumn and May and June are Middle names are going to be being replaced with March and blend of sharp crispy names like January. Snow, Frost and even the direction North and significant Names of old world gods and goddesses, mythological heroes words like Ballerina, Bear, Sweetheart, Seven, Song, Star and leaders like Augustus, and Saint. Atticus, Persephone, Athena,
82 | Entrepreneur’s Edge
Morris’s 13 Big Trends for 2013 1. New normal Our global, regional, national and local issues and economic uncertainties will not disappear in 2013, but what will disappear is our strong reaction to them. Mellowing and resignation are occurring, we know these real and important issues are not going away soon, but we are learning to live with them. This new sense of normal will bring with it renewed consumer confidence as slowly we replace pessimism with optimism as we reframe our world to accept
maxiom
these variables and make new choices accordingly.
influencing local public service and community based projects and even sites that let you share 2. Two Degrees of Separation cars, dresses, handbags, homes and private planes. Now that we’ve all gorged 3. Bring It All Together ourselves on social media and proven that we can alter the course of lives, international We want everything now and in events and governments with it; one place and that’s exactly what stay digitally connected to our we’re going to get. ever growing tribe and ensure we know what’s going on in our Much of next year’s innovation purpose built world 25/8, it’s time will take lots of seemingly to move on to see what else this disconnected bits and pieces of new digital social glue can do. information from lots of different places and put them together into one easy to use and purposeful Expect 2013 to push the space. boundaries with new digital social recommendation sites, The new travel apps for instance crowd learning, crowd financing will give you a true door to door and crowd everything sites experience, booking your taxi coming on line. from home; letting you know if the plane is on time; checking you in; Sites like Kickstarter, indiegogo, informing the hotel how far away and Spacehive allow end users you are, checking you into the to engage, invest and support hotel, and guiding you to your new ideas, products and room when you get there, even services long before they opening the door for you. become a commercial reality. through that little electronic box in your pocket. Gigfunder allows you to start a grass roots movement to get your Grocery items, store posters, favourite band to come to town doors, people, objects and things and perform; right through to will all be able to share sites like Brickstarter that lets you information with you. say Yes In My Backyard by
maxiom
4. The World of Objects are Coming Alive Near Field Communication (NFC) or a technical thingy that casts a virtual net from your mobile device to digitally connect you to your surroundings. This one has been in the wings for quite a while and we came close to a launch in 2012, but 2013 is make or break time for it and, when it hits, expect to get rid of your physical credit cards and start connecting with everything 5. Appy days If you think you’ve seen apps, hold on to your digital screen, because you haven’t seen anything yet. The avalanche of this brave new world is going to be fiercer, stronger and greater than the advent of websites and the World Wide Web. Every business will eventually have one of this new digital keys to offer their online world as we move at the pace of light to cut the umbilical cord that tethers us to walls and desk bound technology to the freedom of take with you anywhere and everywhere technology.
Entrepreneur’s Edge | 83
CUTTING | Edge
All we need to do now is get local retailers both bricks and clicks to play ball and give us what we want. 8. Customer Is God The days of being spoken down to, of being brushed aside are gone.
The Customer Is God
6. Out With The New And In With The Old (in a new way) Everything old is new again. In this world of ever-changing “things” we are turning to the past, with a great big dollop of nostalgia, to reinvent what we’ve already had.
7. Local and national trumps global
Carbon footprints, immediate delivery demands, a growing sense of self entitlement and importance and a strong desire for jingoism and patriotism will all lead us to want to shop as local as we can and to have products Expect social media to become that express who we are and not ordinary, for Facebook, Twitter some generic global and other online conversations to corporation’s image of what they become less “full on” and for us want us to be. to become terribly blasé about all of this. All these growing influences will rekindle our desire to buy local and national rather than international.
84 | Entrepreneur’s Edge
As consumers we are now increasingly and collectively demanding what we want, where we want it and how we want it, knowing that if this provider can’t do, we can find another who will. Our sense of entitlement is changing irrevocably. The old and non-connected relationship between manufacturers, suppliers, retailers and customers is gone and will be replaced with a fresh dynamic co-created organic marketplace where everybody is vital and integral if the sale is going to work and the end. 9. Who cares where you’re having coffee! Our social media baby has finally grown up and turned into a pimply teenager. The awkward early adolescent phase where
maxiom
Augmented Reality Will Change The Way We View The World
we had to share every first step and toilet training event is over.
10. Right before my eyes
One of the new big must haves Social media is here to stay and next year will be augmented everybody’s ready to take a deep reality glasses. breath and just get on with using it. Google Goggles and many other geek provider manufacturers This however is not the end of the have promised to bring us a set social media journey; we still of ordinary eyewear with have to turn the teenager into an extraordinary purpose. adult, so expect to see a tonne of new social media life changing These spectacles’ will take platforms, uses and abuses information from the World Wide ahead. Web, your surroundings and your mobile devices and mash them up to give you a unique, real time
maxiom
heads-up display complete with images, words, road maps, television and whatever else you want all on the inside of your designer sunglasses. 11. Cash is no longer King With a growing number of retailers encouraging you to pay for all your transactions large or small using your plastic money (and eventually smart phone based e-wallet) expect to see a less-cash society evolve over the next few years.
Entrepreneur’s Edge | 85
CUTTING | Edge
12. Print your own Dinner Set social media, which is ever so slowly reshaping what is This innovation is the love child of important, to whom and by when. “Star Trek’s Beam Me Up Scotty” These issues are far reaching as and a 1980’s fax machine and makes it totally possible to print we grapple with changing our fuel in real time and on demand one- and energy; reworking how we use our land and water; how we off pieces of crockery, clothes, feed, clothe and provide shoes, engine spare parts, meaningful opportunities to over human organs, building, bikes and kids toys, just to name a few. 7.2 billion global inhabitants; how we make better use of medical breakthroughs and the extended This new technology has been around for a while, but get set for life spans they offer, as well as how we might use technology to its explosive mainstream reshape our work, lives, families, introduction in 2013 as consumers begin to discover and communities and governments. use 3D printing for their everyday purchases. References: 1 http://www.foodmanufacturing.co m/news/2012/12/consumertrends-top-menu-trends-2013 13. Look what we’ve done to 2 http://www.imdb.com/search/title our world ?year=2013,2013&title_type=fea ture&sort=moviemeter,asc 2013 will be an introspective year as we slowly start to turn our 3 attention back to the planet, our http://www.vogue.com.au/miss+v ogue/news/spring+summer+201 place in it and the legacy we 3+trends,20809 want to leave behind. 4 http://www.dulux.com.au/colour/c There is a growing global olour-forecast.aspx collective consciousness 5 emerging, fanned by transparency and transported by http://nameberry.com/blog/about By 2020 we’ll look back with amazement at how we ever survived without our home based 3D printer!
86 | Entrepreneur’s Edge
Morris Miselowski Business Futurist | Keynote Presenter | Strategic Advisor Morris Miselowski is Australia’s foremost futurist. Morris is Founder and Lead Foresight Strategist with Your Eye on The Future. He has 31 years of uncannily and profitably picking future trends for corporations around the globe and working with them to take best advantage of all tomorrow’s possibilities, long before their competitors even know they exist. Blog: BusinessFuturist.me Website: BusinessFuturist.com FaceBook:
FaceBook.com/BusinessFuturi st
maxiom
Finding the right franchisees to help grow your business doesn’t need to be hit and miss…. Get the franchisees that are going to make your business a success
Talk to the Experts in Franchising
CLICK HERE To Find Out More about How BDA Can Turn Your Franchise Dreams into Reality maxiom
Entrepreneur’s Edge | 87
SALES | Edge
WHY “TIME AND MATERIALS NOT TO EXCEED” IS STUPID As part of this three part series, I shared the Failures of RFPs and Hourly Billing, and How to Propose Fixed-Price Proposals for Complex Projects. In this edition, I want to shed some light on the worst possible contractual relationship a client and vendor can enter: Time and Materials Not To Exceed (T&M NTE).
T&M projects imply shared risk. What I mean is that if the project scope changes, new needs come up, or the client decides to change direction, the client and the vendor recognize that the client is paying incrementally based on effort… not necessarily results.
Why as a vendor you should From the prior articles, we know avoid “T&M NTE” T&M NTE means that you bill that fixed-fee contracts make based on effort… up to a sense when we are delivering value and both parties can agree point. Some confuse this with on the outcome or results. Time fixed price projects. Not so much… The fixed price project and Materials (T&M) contracts rewards you if you perform are best when we have efficiently. T&M NTE provides no uncertainty, are not sure of the detailed requirements, or cannot reward if you perform ahead of schedule. But, it provides a easily define the potential penalty if your effort goes beyond outcome. the maximum effort. So, you get your normal margin if things go Fixed-fee projects reward as planned, and every hour innovation. If the vendor can deliver the desired outcome on beyond the maximum erodes your margin until you end up an accelerated schedule, then losing money on the deal. With they reap the rewards of the no upside and only downside, surplus. Meaning, if the vendor anticipated 200 hours, and they you should never agree to that deliver results in 150 hours, then model. they still get the money for the full value of the contract. Hence, the Why as a client you should client received quick results, and avoid “T&M NTE” everyone is happy. As a client, many organizations feel that T&M contracts amount to a blank check.
88 | Entrepreneur’s Edge
By Ian Altman
So, when project outcomes are not sufficiently defined for fixed price contracts, companies feel that they can engage a vendor in a T&M NTE model. The theory is that the vendor should know what the maximum effort should be. If it takes longer than that, then the vendor cannot charge more. The challenge, however, is that if the vendor ends up being upside down on the project, at least one of three things will likely happen: 1) They will try to deliver the bare minimum to be acceptable to reach the finish line; 2) They will shift from high-value to low-value resources to theoretically reduce their losses (interesting theory that doesn’t work; or 3) They will be on a quest for all future projects to “get even.” In terms of reward and punishment, T&M NTE does not offer a carrot… only a stick. If as a vendor your client proposes T&M NTE and you think that the maximum value is a reasonable top side, then suggest a fixedprice project. If you go that route, you could end up with the stick… but you also can be rewarded with the carrot.
maxiom
maxiom
Entrepreneur’s Edge | 89
ENTREPRENEUR | Edge
GETTING TO KNOW YOU: MARK FERNANDEZ Franchising is a highly competitive sector with a unique set of challenges. But we discovered that successful franchises have one common characteristic, and that is extraordinary “passion”. This is a key asset for any business owner, particularly in franchising - along with getting great advice - as Mark Fernandez from Business Development Alliance explains. 1. What inspired you to start BDA? What are your goals and values?
passion and determination. With our never ending search for excellence coupled with our experience we believe that we have a lot to offer anyone either BDA has been servicing the Franchise and Business sectors entering or already immersed in since 2002 and we have grown the sector. into one of Australia’s Premier Management Consultancy. Our 3. What experience do you values enable us to express what have helping franchise sector we do and what we believe in, clients? which, in turn enables us to put into practice what we are We have been involved in the committed to, which is – Franchising sector for over 40 excellence in everything we do. years and have experience across all facets of franchising. Our goals revolve around With this vast experience we providing the best advice, believe our clients can only service and education to benefit from what we have Franchise Networks whilst learned along the way and that assisting and educating brings expertise to the table prospective franchises to when making those critical become more profitable. business decisions. 2. What was the driving force behind your decision to specialise in the franchise sector? Its all about passion!!! This sector demands a high level of
90 | Entrepreneur’s Edge
4. Do you service other sectors as well? Yes, we have worked in many sectors assisting business grow including; manufacturing, retail, hospitality, shipping and wholesale. We have the capabilities and experiences to assist any small business find its growth path. 5. What are the main reasons that someone would choose BDA to assist with developing their business?
Businesses choose BDA as we assist in finding the right growth path. We will determine wether Licensing, Agency Agreements, Dealerships, Co-Operatives or Franchising is the best way forward. Most business understand the need for control Our Director is a Committee when expanding however, may Member of the Franchise Council of Australia WA Chapter not be aware of the boundaries in which that control can be and is intimately involved in a exercised. number of well recognised brands within the sector.
maxiom
We have had many clients over the years that just need good, sound business advice and that’s where we come in. A’ sounding board’ for senior management and for those franchises that need assistance along the journey. 6. What process, services and support do your clients receive?
completing the Viability Study, Financial Modelling, Scripting Operation Manuals to Training and Recruitment. The real work starts after the launch of a franchise, we then take a ‘coaching ‘ role in the organisation just to keep things on track and to enable the practical application of the system is actually in play.
7. Who is the target market We provide a ‘one stop shop’ for for your business? franchising your business. We undertake all activities in setting Typically we find that business up a franchise; everything from looking to grow and have heard about franchising but not really sure what It’s all about. Yes they know of the major brands but are looking for a guiding hand to take their business to a new level. Business that have been operating successfully for at least 12 months and are profitable are now looking to expand. With this in mind, setting the structures and putting the infrastructure in place for growth can be a costly exercise and without sound advice can leave you exposed and put your business at risk, hence we are finding more and more Mark Fernandez - brings over 20 entrepreneurs seeking years of senior management experience in business development professional advice. and franchising to your business.
maxiom
8. Do you provide services nationally? Yes we do, we have worked in all states and territories in and across our beautiful country. 9. Do you have any plans for overseas expansion? We are looking to form international affiliates with companies that have the same values and principals as us. 12. What would you say to someone looking to franchise their business? The key here is to get good quality advice. If you want to be successful in an industry that employees around 650,000 Australians and contributes more that $140b to the Australian Economy, then you need to have a relentless search for excellence. Surround yourself with the best advisors that you can afford and get out and chat to people in the industry – these are my top tips for business that are looking to grow through franchising. Mark Fernandez mark@bda-online.com.au www.bda-online.com.au
Entrepreneur’s Edge | 91
maxiom DIGITAL DESIGN PROFESSIONALS Ebooks Company Reports Sales & Marketing Presentations Brochures Manuals Training Material Reports & Accounts Magazines
Secure Cloud Hosted Solutions for Desktop & Web, iPad & iPhone and Android Platforms For Professional Digital Solutions for All Your Publishing Needs
CLICK HERE 92 Entrepreneur’s 24 | Modern FranchiseEdge Magazine
maxiom
Amaze Creative Keeping it clear and simple.
Amaze Creative Strategies Creating, distributing and analysing engaging, recurring digital content experiences across multiple channels. MWA Design can help you get your marketing message to your target clients in the most effective way to boost your sales and your profit. We are not just interested in great design and the latest technologies we’re interested in your business, your customers and your commercial success too.
Inspire Your Customers & Franchisees Inspire them to buy Inspire them to share Inspire their loyalty Increase brand recognition Increase interaction with your brand Create a consistent brand experience
Brand Design | Print & Digital | Web Design | Web Development
www.amazecreativestrategies.com
maxiom
Entrepreneur’s Edge | 93
About Entrepreneur’s Edge Publisher Maxiom Group Pty Ltd 2/710 Collins Street Docklands Vic 3008 Australia www.maxiom.com.au
Editor Jo Poland
Digital Magazine Created by Maxiom Digital www.maxiomdigital.com
Advertising Enquiries 1300 855 696 (within Australia) + 613 8199 3586 (International) advertising@maxiom.com.au
Editorial, Media Releases & Article Submission magazine@maxiom.com.au
94 | Entrepreneur’s Edge
maxiom
PRIVACY POLICY: The Entrepreneur’s Edge is published as a service to subscribers. We adhere to strict Privacy Policy concerning all subscribers on our database and will not disclose your details to any third parties without your prior permission. If you have any queries about our privacy policy or this magazine, please contact our office on + 64 3 8199 3486 or email policies@ maxiom.com.au. A full copy of our Privacy Policy is available on our website at www.maxiom.com.au/subscribers/privacypolicy. In the meantime, thank you and we trust you enjoyed this issue of The Entrepreneur’s Edge!
DISCLAIMER Information published in this online magazine has been compiled with due care and attention, but it does not clam to be exhaustive. Maxiom cannot be held responsible for the content of external sites reached via a hyperlink from this site. We accept submissions from outside contributors, and whilst great care is taken, the author of the submitted article is responsible for what they write, and the Entrepreneur’s Edge and Maxiom will not be liable for any loss or inaccurate information or any other omission or error by outside contributors. This online magazine is provided for information only. It is not intended to replace a consultation with a qualified industry professional. The Entrepreneur’s Edge or it’s publisher does not accept responsibility for any loss, damage or injury that arises from the use of this online publication.
maxiom
Entrepreneur’s Edge | 95
www.entrepreneursedge.com
Published by:
Maxiom Group Pty Ltd Ph: 1300 855 696 Fax: 1300 799 493 magazine@maxiom.com.au www.maxiom.com.au
maxiom