Sunday, 15 September 2013

Change Your Attitude or Die Like a Frog

No matter whether or not you've got a smart phone or tablet, whether or not you blog, tweet, are on LinkedIn or Facebook, if you ignore their effect on your management environment then you risk dying like the proverbial boiled frog. It dismissed as nonsense dire warnings of the consequences of the slow flame under its tub of water. 

The changes may be so slow that they’re hardly noticeable. Yet social and mobile internet technologies are steadily, inexorably freeing people from the mushroom farm - from being kept in the dark and fed on bullshit; freeing them to create, speak up, challenge, push back and rise up; freeing them to connect with anyone anywhere, to contribute and impact on merit rather than position; freeing them to expose bullying bosses whose power depends on concealed incompetence and hierarchical authority. On the web, no one knows whether you’re a dog or the senior vice president.

That’s why it’s imperative for managers and managed to learn fast how to get things done in a world where authority is the reciprocal of followership (for refugees from mathematics, that means: as authority increases, followership decreases). 

Carol Rozwell argues in The Boiled Leader – Digital Freedom at Work  (September 13, 2013) posted on Management Innovation Exchange’s Digital Freedom Challenge , that workers who aren't effective collaborators will surely be exposed. They are the people we avoid working with. Everyone in the peer group knows who they are, yet management takes no action. Frequently because those people are management.

You don’t have to join the twittering classes, plaster the details of your life all over Facebook, or push your profile on LinkedIn and blogs to survive. But you do need to change your attitude to fit a world that expects freedoms that you may intuitively see as threats to your authority.

The message for Managerial “Frogs” is abandon that authority or die. The good news is that the rewards for abandoning it are, productive, profitable, satisfying collaborative life.


Wednesday, 15 May 2013

Is a Business Exit Consultant Worth the Time & Money?

“Is the money, time and distraction of an Exit Planning Consultant really necessary? And does it really add any value at the end of the day?” 

Aaron Toresen, Managing Director, LINK(NZ) poses those questions and  answers them in his LINK Business email Newsletter 14 May 2013.  

In answer, he baldly claims: 

“The truthful answer is only occasionally. More often than not the whole "Exit Planning" nonsense is no more than fee generation by well meaning but ultimately misguided advisers.” 

“Almost every business consultant, coach, or mentor has screeds of information, manuals and guides that they will happily take a business owner through, on an hourly rate, to prepare them for the sale of their business. The more complex and esoteric the adviser can make the process, the better. Often these advisers have never sold a business or indeed owned one, but nevertheless confidently march their clients through various business plans, strategic plans, checklists and milestones . . . . . .”

It turns out these claims are mainly a straw man for then claiming that his firm can prepare a business for sale in within 2 or 3 months.

What he doesn't say is whether those businesses sold for their full value to the exiting owner. The truth is, very probably not. 90% of businesses sell for less than half what they’re worth to the exiting owner. 

A broker’s main interest is typically efficiency of effort to achieve increased turnover, not selling price. Most brokers want you to sell within four months for whatever the business will fetch. They want you to be grateful that they found you someone who's willing to pay to take your place in the hamster wheel.  90% of the time that’s what business owners do. Brokers typically depend on it. 

However, he is right about most business consultants, coaches and mentors. That’s why, if you really do want to sell for an earnings multiple of 4-6 you need to be particular about your choice of help (and your broker). 

You’ll need to establish a profitable growth curve and extract yourself from the centre of operations. Unless you've already achieved that, it’ll be impossible to achieve in 2 or 3 months, even with Aaron Toreson's personal help.  

The project will take at least two years with business-savvy, trustworthy people helping you lead it. They’ll be educated, experienced business owners with wisdom, passion and expertise to share. They'll quickly, deeply understand you and your business, empathise with your situation and work comfortably within the messy reality of your business.  

The project isn't so much about planning as it is about acting strategically;  about changing the way your business is organised and operated; so that you have time to work on it instead of only in it. 

By the time you complete the project you may have changed your mind about selling because the business will be a profitable pleasure to own. 

So don't sell yourself short. You and the nation need you to realise the full value in your business and for it to continue to flourish for it's new owner. 

Take care in selecting your strategic change support and your broker. 


Sunday, 5 May 2013

Sailboat does 40 knots in 25 knot breeze. Why?

Collaboration is good if you’re not in a hurry. Yeah, right (Not). Surprisingly for many, collaboration is essential when you're in a hurry to win.

Take for example the speed of the New Zealand team in designing and proving its AC72 hydrofoil catamaran (a sail boat, but not as we know it Jim) for the 2013 America’s Cup in San Francisco. Amazingly, the cat can do more than 40 knots in less than 25 knots of breeze. But more amazing than that is the speed of their development programme.

It’s especially amazing to dyed-in-the-wool corporate managers like former Energy Company CEO and now corporate Chair, Keith Turner. (Keith Turner. Innovation the key for Team NZ. The New Zealand Herald, Thursday May 2, 2013)

To his conventional corporate eyes, it’s miraculous:

“The speed of learning that [NZ’s] team has generated in transforming an idea into world-leading practice is quite extraordinary”

“The culture of the team is outstanding”.

“I was also amazed to see a team assembled from all corners of the world, working on a common cause like there is no tomorrow. Designers from the world's leading experts coming together, not just for money but to participate in something truly great but with a tremendous sense of humility. That is a great lesson for corporate learning.”

To my eyes what he describes is the power of collaborative learning; failing fast and falling forward in unity. My question is how do they get to be like that; why do they behave so differently to common corporate practice?

Turner seems to pay attention to the “what” and make assumptions about the “why”. He notices that they “learn on each other’s shoulders” but is unclear about whether that’s because they are committed or that they are committed to collaborating: 

“The sailors, the designers, the weather men are so committed together they are leaning on each other's shoulders working out what they learned the day before, how they can change the design tonight and how they can make the boat go faster tomorrow.”

Awareness of the distinction between commitment and commitment to collaborating can be indicated by adding a comma to the first line of the above sentence:

“the [men] are so committed, together they are [learning]”  

 “the [men] are so committed together, they are [learning]”.

Though Turner notices that the pace at which the team “catapult their ideas forward” and attributes it to an “extraordinary learning culture”, he seems to attribute that culture to the usual suspects: commitment to purpose and “extraordinary leadership”: 

“The team has been able to catapult their ideas forward at such a pace, despite the multitude of cultures present, to innovate, to spring off each other's dumb questions and to learn so quickly that in three years they have gone from knowing virtually nothing about AC72s to being now one of the best in the world. What an extraordinary learning culture.”

“What extraordinary leadership to engender such culture. Grant Dalton lives with his heart on his sleeve. He's frank, he's unassuming and he's driven. He's intense. Dalton is very much a what you see is what you get and no frills. He has welded a world-performing team together in an incredibly short space of time to achieve extraordinary performance.”

Are commitment to purpose and extraordinary leadership sufficient to replicate such fast and effective learning? I don’t believe so. In order to replicate this exceptional learning organisation we need to go much deeper than simply describing purpose and leadership.

We must delve into questions like, where does this cultural ability to spring off others’ dumb questions come from, and how do we learn to do it? How is that ability related to the leader’s candour? What is it that bonds the team? Did the leader “weld” them together or is the bonding much less rigid, less orderly and less mechanical? Much softer, fuzzier and flexible, yet far more powerful?

To transform organisations to achieve like Team NZ it’s not enough to describe and understand the general effect and generalised causes. We must learn to perceive and behave in specifically different ways from the way we normally do in organisations. The difference is fundamental. Unless we begin to personally experience changed behaviour, even our understanding is unlikely to go beyond conventional corporate perspective such as Keith Turner’s – we won’t have a clue what it might feel like to be in Team NZ let alone how to do it ourselves.

The guys (and girls) in Team NZ have experienced something very different - effective collaboration. They’ll have a hard job communicating that experience to others unless those others get to experience something like it. Until then, there’s nothing much to productively talk about.

The problem is to devise and operate ways to enable people to experience deep collaboration when they have no practicable notion of what it is, having never knowingly experienced it; how to get them to risk attempting something that seems odd, uncomfortable and stupid then collaboratively fail fast and fall forward; how to get high achievers to risk failing in order to learn something that they can’t understand?

The best place to do that is on-the-job; opportunistically in the semi-structured messiness of business, dealing with actual business events. Some educational institutions are beginning to wrestle with this, against the flow of conventional market expectation and against their own institutional cultures, structures and practices. The University of Auckland, Graduate School of Business is one. Having spotted that there’s an international market for business people who can collaborate and generate collaboration, they’re building a practice orientated Master’s programme aimed at doing that.

If it’s going to work, building and delivering the programme itself will be an experiential case in learning to collaborate.. 


Friday, 26 April 2013

Millennials less entrepreneurial than their olds. Why?

“The whiz-kid with an idea who vigorously taps out code while hyped up on energy drinks then launches a business to astronomical success is the exception, not the rule.” (David Yanofsky in Quartz)

New data from the Kauffman Foundation in the US shows that in 2012, 20-34 year olds were 30% less likely to start a new business than 35-65 year olds.


The gap’s been steadily widening since 1996, mostly due to increasing entrepreneurial activity by the olds but with a discernable decline amongst the youngsters. Especially in the closing years of the millennium.

There are many possible reasons including comparative lack of available capital amongst the youngsters, and olds needing to create jobs for themselves because they can’t get a job and can’t retire. But a third one, the effect of contemporary schooling on the youngsters, is potentially far more pernicious. 

Over the western world generally major education reforms were introduced in the late 1980s and early 90s.

In New Zealand the reforms were signalled by the 1990 major report on education “Tomorrow’s Schools”.  From that, the movement to de-professionalise teaching and heavily emphasise  qualifications got traction through the new Qualifications Authority (NZQA) that administered the atomisation of knowledge by the Unit Standards based assessment and qualification. New Industry Training Organisations (ITOs) administered the related institutionalisation of apprenticeships. 
By 2003, when I began a stint of teaching in a University Business School, the shocking effect of the reforms was well established.

As University teachers we were warned that secondary school graduates entering university could be expected to demand to know in detail, before they commenced a unit of learning, exactly what they were expected to know as a result, the process by which they would know it, and the reward structure for knowing.

I recall wondering how any of them would learn anything new, unexpected, or surprising with such restriction on insight, or risk.

Even so, I was dismayed and amazed at how risk averse my students were. They seemed to have been trained to expect surety of outcome for their efforts; unable to cope unless the expected result, the process and the reward were fully mapped out beforehand; schooled that such information was their right and anything less, bad teaching.

I refused to comply and pushed them to cope with uncertainty and risk by collaborating. I coached collaboration. The process was nerve wracking at times but the result was widespread joy at experiencing collaborative entrepreneurship. Graduates from that approach proved to be fast learners (effective in employment 3 x faster than conventionally taught grads) and natural leaders in changing contexts and emergent practice.

But my approach  was unusual. The conventional undergraduate teaching methods that predominated,  and still do, are effective  schooling for career corporate-managers and researchers, not entrepreneurs. Post graduate teaching methods are too; maybe that’s how MBAs came to be blamed for the 2008 GFC.

Little wonder perhaps, that entrepreneurship has declined amongst schooled youngsters.

Tuesday, 16 April 2013

20 yrs Advice and Advisors Changed Nothing Much.

There’s no shortage of advice and advisors for Kiwi SME owners: plenty of “should do this” and “should do that”; “should use TOC” or “should do a one-page-plan; “shouldn’t be satisfied with the 3Bs (boat, BMW & batch)”; and “should be aiming to be global magnates”. And why should they do these things? Because NZ needs them to create wealth, that’s why. But 20 years of advice, advisor, mentors, consultants, coaches or whatever hasn’t done the trick. Why? 

At least part of the reason is that SME owners don’t have the time or patience for advice unless it’s immediately, practicably useful. Regardless of how justified, well meaning or authoritative it is, or how virtuous or good, it’s unlikely to have the prescribed effect unless it pops up at the right moment coming from the right person. 

Advice works when, for some reason, the owner is unusually receptive and keen to change, and when it comes from or through someone that the owner trusts to produce the change. It’s an opportunistic, entrepreneurial process. Not a corporate planning exercise.

Trouble is most advisors aren’t business experienced entrepreneurs. They’re more likely ex-corporate executives or experts who, though they think they understand the SME owner, have never experienced actually having their own tender parts on the line; have always spent someone else’s money with only a salary and bonuses at risk. 

And that’s not all. 50% of current SME owners are 55-70 yr old baby-boomers whose success in business is largely due to an exceptional coincidence of market opportunity and technical and entrepreneurial talent. Over 90% of SME start-ups disappear within 3 years. Only about 2% grow to be more that a job for the owner. 

That 2% aren’t successful because they went to university. More likely they left school early. They’re not successful because they read endless business books or adopted every new TQM, Zero Defect, Process Re-Engineering or whatever Management fad that raged virus-like through the corporate world.

They’re successful because of who they are, what they’re naturally good at, what they happened to do, and when they happened to do it. Why would they be keen to change, especially when the advice comes from a stranger claiming to have the answer?

A current example from my experience is a substantial client whom we met through a long trusted agent/advisor of his who is also a trusted business friend of ours. The introduction coincided with the client facing unexpected demand for a new product he’d developed. 

In conversation we learn that although 70 next birthday, he’s tired of being the general and operations manager - at the centre of everything – because he wants to focus on what he loves and is good at – developing new products and processes. He has a list of possible projects. 

I ask him, “In the best of all possible worlds, how many of these projects would you like to take to fruition.” “All of them,” he says.  “What’s stopping you?” I ask. He’s silent for a moment then replies, “No one asked me that before. My bank manager, accountant, solicitor and friends all ask “What would you want to that for (at your age)?”” “Look”, I say, “there isn’t much you don’t know about your industry and we personally know very little. So we're not proposing to teach you to suck eggs. But we do have the skills, knowledge, direct experience and network to help you remove the barriers to achieving your goal; to profitably exit what you don’t like, profitably get into what you do. It’ll take 3-4 years and involve a lot of change, including you.” 

To cut the story short, we’re eight months into the project on his condition: that we complete it in 2 years not 3-4. 

We aren’t “doing TOC” with him per se, or “one-page-plan” or any other “tool” or programme. But we are using those and many other approaches and techniques in a rolling-wave project to achieve his goals. In the process we're engaging with him and his people experientially so that in two years that knowledge and skill will be “built into” the organisation(s). The bits he then sells for a high price will be a great buy for new owners who likely are or want to be global magnates. He can keep the other highly profitable bits he likes. 

The thing is we met him at that right time and through connections he trusts. Notice also that like him we are also baby boomers and like him we are also SME experienced entrepreneurs. Unlike him we have high-level specialist business skills and knowledge that he knows he lacks. He trusts us and we trust him too.


Friday, 22 February 2013

Success stops learning – fail fast, fall forward: celebrate failure

The key to competitive advantage in changing and deeply uncertain times is to discover new "right answers" and get them to market first. Previous answers won’t do. No one, not even the boss!, knows what the new answers are. We have to find out by experimenting together and learning fast from failures. 

That may make simple sense, but doing it is hard because failure is typically not allowed. We know that if we want to be successful we have to look successful; associate with winners not losers. Failing is losing. Success is winning.

Bosses and teachers are expected to know the answers. Subordinates and students are rewarded for doing what bosses and teachers want. To question the boss’s answer is not a good career move. With some bosses, it’s OK to question provided you already have a convincing alternative answer. Some bosses try to look like they know by pinching subordinates’ answers for their own and taking the credit. That’s how they got to be bosses. "Everyone knows" that’s how promotion works.

The result of this emphasis on success and knowing is that organisations and individuals stop learning; thinking happens in interminable closed loops; workforces become cynically compliant and/or aggressively self-serving.  

How do we break that deadly loop? The answer seems to be in the process of deliberately celebrating failure.

For instance, a Canadian Engineering NGO, Engineers Without Borders, is an organisation that seems to have broken the loop with a process called The Failure Report. Of course they didn’t get it right straight off. They failed plenty along the way. Basically it’s about open admission and shared reflection on failures.

What they learned* is:  
  1. The Failure Report is a dynamic tool for learning but the real power is its ability to shift organizational cultures.
  2. It is absolutely critical to have buy-in and support from the highest levels of management - the boss must risk reporting failure too.
  3. Understand your organization's unique failure foundations – identify and actively remove the blockages to people speaking openly about failure.
  4. Decouple ego from activity - maximise and acknowledge learning from failure so that ego can remain intact though failure
  5. Tell stories but don’t paraphrase them into simple lessons for others - tell them in full and in context and leave discussion and interpretation to individuals and groups. (I just failed that by posting this list*)
  6.  Go big or go home. No sugar-coating allowed - be dedicated to honesty and humility and deal with the elephants in the room.
*For the full story click here.


Monday, 18 February 2013

What’s changed in 12 months?

Maybe it’s now obvious that the economy isn’t going to simply  “bounce back”; maybe the pressure for enduring radical change is closer to tipping point.

Nevertheless, so long as our circumstances allow us to ignore or deny that - allow individuals and organisations to simply blame others for failures and claim credit for fortunate successes, nothing new is learned and nothing changed.

National politics is obviously dominated by that sort of behaviour. It’s less publicly obvious in business where executives, earning 50+ times their employee’s average wage, continue to take bonuses and repeat their sorcery for the next anxiously credulous company. 

The most likely place for transformational change to break out is on the fringes of markets and industries, in outlying parts of larger organisations and in smaller firms (SMEs).

However, though SMEs  don’t have the bureaucratic burden and organisational inertia of big firms, they are likely locked into their own historical co-dependent behaviours and relationships. Those behaviours and relationships developed around and out of the founders personality and skills coupled with complementary market opportunity. Through them the firm survived and grew – succeeded. That success, perversely, shuts out new learning and change. 

An army of conventional mentors, coaches, consultants, and educators won’t change that because they’re locked into their own conventional histories. To have transformative effect they must first transform themselves and their organisations. But they have the very same impediments that their clients have. How then do we break this single loop control circuit?

I’m writing about this in a series of posts in another blog  

Business Exit Ltd is a collaboration of mature business people who, for one reason or another, have been fortunate to experience transformative change and to experience leading it too. Our passion is to collaboratively exercise and develop our unusual experiential knowledge and wisdom, for good. 

Although we are mature (old dogs), we are keen and effective learners, putting the lie to assumptions about change being the preserve of youth. To the contrary, we observe that young, educated people these days are strongly risk (change) averse.

We are interested to hear other’s stories as well as share our own.