How to Teach a Horse to Fish

Mon, 30 Apr 2012 15:58:00 GMT

The title of this blog comes from combining two sayings. The first saying is one of my all-time favourite concepts, that if you give a person a fish they will eat for a day, but if you teach them how to fish they will eat for a lifetime.

There is an aspect to this analogy which, I think, is often overlooked. If you give a man a fish, he will eat for a day. BUT - you will have to go and see him every day, in order to give him the fish! If you teach him how to fish, you can leave him alone to get on with the fishing. You can then get on with doing something else (perhaps even go fishing yourself!).

In my activities as both a business owner and also a business coach/mentor, it is becoming increasingly apparent that the biggest challenge most businesses and individuals face is that of delegation.

How often do you hear these phrases:

• “It’s just quicker if I do it myself”
• “They can’t do it as well as I would”
• “I haven’t got time to show them how to do it”
• “I don’t have enough time to do the things I want to do”

I remember hearing Pru Leith, the restaurateur, on the radio many years ago. She was asked what she considered to be the single most important skill for an entrepreneur. She responded “delegation”.

This goes equally, however, for everybody in work and, indeed, in life. Allowing somebody else to do something that you could do better is a skill that must be learned.

However, accepting that they might actually do it better than you, and giving them freedom and direction to explore that possibility, is really powerful management.

Hence the second of the two sayings, you can lead a horse to water, but you cannot make it drink. I have heard many reasons (excuses?) given why delegation is not appropriate or desirable, usually around issues of quality control, consistency, and skills of the other person.

Generally, in the same conversation, we also have discussions around the individual not having enough time, wanting to do other things, feeling bogged down.

The connection between the two is made all too infrequently.

Who Will Buy My Wonderful Business? – Part 2

Mon, 23 Apr 2012 16:18:00 GMT

In part 1 of this blog we saw how Bob Hollis, a man whose job it is to locate and negotiate with businesses on behalf of clients who want to buy them, gets sent around 4,000 business for sale in a typical year, of which he will look at 100, and sell 10.

So how does a business attract the attention of a potential buyer? Two questions arise from this in my mind. Firstly, when Bob looks at a business, how does he decide which ones to investigate further? And secondly, what happens to the ninety that he looks at, but doesn’t take any further?

There are some fairly obvious pointers that Bob will look for, such as profit margin, industry sector, size of business and so on. However, there is only a certain amount that a business owner can do to affect these.

There are, however, a number of markers that a business owner can work on to increase the chances of ultimately being sold. These include:

• Is the business dependent upon one person (i.e. the owner)?
• Is there a strong management team?
• Are there clearly identifiable products, or is all the IP (intellectual property) in the head of the owner?
• Are there systems and processes in place that means the business will continue, just as profitably, without the owner?
• What is the reason for selling?

When you see this list, the answer to the second of those questions (what happens to those Bob doesn’t bother with) should now be obvious. In order to increase your chances, address these issues.

There is a name for this type of activity – succession planning. It is the phrase that every business owner knows, and yet, I would suggest, very few properly understand, let alone act upon.

It is something that Paula White, of the Ovation Better Business Team, can help with. By addressing operational issues of the business, by getting the staff and systems working really effectively, without relying on the owner, the business will be far more marketable, when the time comes.

Who Will Buy My Wonderful Business? – Part 1

Tue, 08 May 2012 08:40:00 GMT

Recently, Paula White and myself had an enjoyable lunch with an old friend of Ovation, Bob Hollis of Hollis Gore.

Bob (and his colleague Patrick Gore) buy and sell businesses. Generally, they act on behalf of the buyer. Two particular aspects of our conversation are worth repeating.

Firstly, numbers. Bob gets sent around 15 businesses a day that are looking for a buyer. These are mainly in the South West. That’s 15 businesses each day.

15 a day. 75 per week. That is a staggering number of businesses actively looking to be sold. With a bit of rounding, this adds up to around 40,000 businesses that Bob has seen in the ten years or so that he has been operating.

Of these 75 per week, Bob will take a good look at three, and perhaps meet with two of those. On average, Bob and Patrick complete around ten deals each year.

So, in ten years;
• 40,000 businesses wanting to be sold
• 1,000 of these have been worth actually considering
• 100 of these actually sold (through Hollis Gore)

Now, ask a business owner why they are working such long hours, sacrificing salary, not putting money into pension, and they will generally answer with the same well-worn phrase – “my business is my pension”.

There is a simple response this – sorry, but that is actually highly unlikely.

There are two messages, for me, that come out of this statistic. Firstly, do not rely upon selling your business for lots of money. Don’t reinvest all profit for future growth , but use pensions and other forms of savings such as ISAs to create a backup pot of money.

I will address the second message in the next blog, which is a question you may well be currently asking yourself: “How can I increase the chances of my business being one that Bob will look at?”

VAT on pasties and retrospective taxation - A view on the budget

Fri, 30 Mar 2012 08:17:00 GMT

I have a tradition that I watch every budget speech live. It’s not particularly necessary – I get sent dozens of summaries seemingly within minutes of the Chancellor sitting down. But you can sometimes pick up nuances live that you wouldn’t otherwise get.

This year was no exception. George Osborne used a phrase which had a different tone to anything I can remember hearing before. He was referring to tax avoidance schemes, and threatened to use retrospective legislation in the future. He labelled such schemes as being “morally repugnant”.

What was he referring to? Well, there are entire firms made up of extremely clever people who scrutinise every word of tax legislation to try and find loopholes. They create complicated schemes, designed to skirt just within the edges of the law in order to save tax.

Two typical areas are pension busting and inheritance tax planning.

When such schemes are marketed, the Government goes through the Courts to try and close them down. This creates a ‘buy now’ environment.

The threat of retrospective taxation, however, means that the Government could apply a tax anyone who signed up to a schemes before having closed it down. So even if you had set up a scheme within the Law, the Government could deem it to be outside of the Law at a later date. This could threaten to stop all such activity.

We have seen a few examples of this recently, notably with a scheme offering to transfer pension schemes into an offshore company, then wind up the company and allow you access to your pension fund. This is sometimes known as pension busting.

It is questionable if this scheme works at all (I won’t even go into the charges of 15% and higher). However, surely the threat by the Chancellor that HMRC could decree that all such schemes that have ever been set up were all illegal, and therefore apply huge tax penalties, would put off anybody from entering into such an arrangement.

So far in this blog I have avoided the phrase ‘if it looks too good to be true, it probably is’, however if I did use it, I do think it that now would be appropriate.

In the Music - Part 2

Wed, 14 Mar 2012 10:59:00 GMT

I play guitar in a band. I am not a particularly great guitarist (I don’t really solo, I like to refer to myself as all ‘riffs and rhythm’) and I am largely self taught. I can’t read music, but I have a pretty good ear.

Our keyboard player, Adam Palmer, is musically trained. He can read music, is extremely competent (I won’t say talented in case he might read this and it goes to his head!), and he brings a large dollop of musicality to the band, which makes a huge difference.

We were working on Stevie Wonder’s Superstition recently, and Adam had worked out a guitar part which would cover one of the many keyboard parts that Stevie Wonder plays on the record. He was explaining it to me by way of telling me the notes, and I was struggling to understand.

Ian Pearce, the bass player, also a decent guitarist, put his fingers on his bass guitar to show me the chord. Instantly, I said “Oh, you mean this” and proceeded to play the entire part.

The VAK (Visual Audio Kinaesthetic) model of learning suggests that we all receive information in different way. I am heavily kinaesthetic, which means that I am better if shown, or if I just get on and do something and learn by myself (my wife might call this stubborn!).

Recently, for a bit of fun, we asked all staff to complete a questionnaire to find out which of these three types of learning was predominant in them. People who are audio orientated like talk and explain and listen. Visual people – as you might guess – prefer diagrams and writing notes.

When I presented the results to everyone, it came to Melanie Hill. I explained to Mel that, from how she answered the questions, she seemed very heavily visual.

“Wow”, said Mel, “that’s really interesting”, and began to write on her notepad “heavily visual”. She looked up to realise that we were all looking at her writing the note, and laughed.

One final story to ram home the point I am trying to make that how people receive information is just as important as how we give it.

We have a client who delivers training. They were telling me how they were hosting a two day course, involving an overnight meal.

During the evening the trainer had engaged in a lengthy conversation with a young woman. He had complimented her on her intelligent contribution to the course during the day, and sought information about her. He complimented her clothes that evening, although he was not so keen on her handbag, and went on to have conversations on various topics, always keen to point out her excellent contribution and way of thinking.

The next day, he asked the woman if she had enjoyed her evening, who confirmed that she had. The trainer said that they had had a long conversation, and did the woman remember anything that they had talked about. “Yes” she replied, “you didn’t like my handbag”.

One comment about her handbag had invalidated everything else that he had to say. When we provide advice, give consultancy, or in business coaching, how we say things and how they are heard must be given equal consideration.

In the Music – Part 1

Wed, 07 Mar 2012 15:17:00 GMT

I have a good friend who is a highly respected composer, for TV and film. As you can imagine, he is immersed in music all day long. His wife had heard a song that she had heard on the radio, and subsequently purchased, and now wanted him to hear. She was excited to play him this beautiful and uplifting piece of music, with words that resonated deeply for her, and, she hoped, would do so for him as well.

At the end of the song, almost in tears, she looked at him and said “Well?”

My friend thought for a moment, and then said “Yeah, it’s ok, I guess. I quite liked the piano.”

She looked at him for a moment, then said “But didn’t you think the words were so touching?”

“Words?” he said. “Oh, sorry, I didn’t listen to the words.”

The part of a message that is most important for one person can be not even noticed by another.

As a musician, when I listen to music, I tend to listen to the individual instruments in isolation. In some ways, having recorded my own music, building up a song piece by piece, has spoilt the musical experience for me, as I am, in some ways, unable to listen to the effect of the whole.

When we communicate with each other (whether it be explaining complicated pensions or investment issues to a client, helping a business owner solve a knotty problem as a coach, or even dinner party debates) putting across our ideas in a way that the listener will be most receptive to is our ultimate aim.

So we concentrate hard on the message. We try to ensure that we are eloquent, pithy, persuasive. But how much do we worry about how the listener receives this message?

Sometimes a little attention towards the listener can reveal a great deal. Are they matching your body language? Are they looking at you, or are they texting whilst you talk (as happened to me in a meeting recently – a meeting which was fairly quickly brought to a conclusion!)?

Even the most eloquent and meaningful lyric can be completed missed if the listener is not open to receive it. Next time my friend will specifically instruct him to listen to the lyric before the song starts!

Why people and systems are like a marriage

Thu, 01 Mar 2012 13:53:00 GMT

So why are people & systems like a marriage? Because they both take work.

Two people fitting together, growing and developing over the years naturally need times of re-tuning, listening and working things out to make sure the union still fits.

But what about people and systems?

I was on my way to work with a client recently, and tweeted that I would be “interviewing individuals to separate the facts about a business procedure from the perception, emotion and blame”. A few people were interested to know more, so let me explain.

There are two ways that businesses approach processes:

1. They specify a procedure to carry out a business function, put it in writing, assign people to the various roles, and expect it to be followed.
2. Things just evolve, and when, after a time, the process breaks down, they go back and attempt to document what the procedure should be.

In both scenarios the procedure is seen to be a static recording of the order in which things should be done and the time it should take.

However, processes that are carried out by people are never static. People’s ability and speed change. People are replaced by others with different skill sets and abilities.

The process and the people carrying out the process become one. This is where problems arise:

• Someone in the middle of the process works much faster than anticipated, causing a bottleneck.
• Someone else is given the excess work and feels resentment.
• Someone adds another element to the process without fully understanding the impact of this change.
• Different people have different ways of providing information. Standards slip.
• People’s frustration at the expected process not working leads them to invent their own systems to work round it.
• The system is not working, individuals get blamed, motivation falls and the expected outputs of the process are not being met.

So when I work with clients to resolve this, it is exactly as I tweeted. We start with:

1. What is the requirement of this process? What does it need to do?
2. What does the existing process look like?
3. What does each individual see as the issues with the process & how would it look like from their perspective?
4. How can we re-tune the process to achieve the goals for the business while meeting the needs of the individuals?

As with any relationship, this is not just about systems. It is about people, feelings, job satisfaction and business goals. Systems, processes and procedures may not be exciting, but ensuring they are cared for, considered and fine-tuned means you have more time to deal with the bits of the business you really enjoy. Having a fresh pair of eyes look at these processes for you means it can be an entirely objective and painless process.

Posted by Paula White, Ovation Better Business Team

Buy what you want, not what you are offered

Tue, 28 Feb 2012 09:44:00 GMT

It often amazes me how the price of things I buy for my business are often considerably higher than if I were to buy them personally.

Why should this be?

I think there are a number of reasons, but I would like to focus on one. I don’t think that businesses spend enough time considering what they actually want.

Let me give you an example. We came across a business who has 300 plus staff. Their existing pension scheme is very expensive. They want a cheaper one, and which their staff will engage with.

They have had a proposal from an IFA for a new scheme. This will include lots of online facilities, guides, one to one meetings, and glossy brochures.

The company were impressed, but wanted a second opinion. What, they asked us, are the questions we should be asking?

Our first response was to ask a question back to the company. What do you actually want from your pension scheme?

Amongst other things, they wanted low charges. They want their staff to benefit from the most cost effective scheme possible.

So I posed them a question. The IFA has provided a proposal which will pay them a significant amount of commission (possibly more than £200,000). This comes directly out of the employees pension pot via charges.

If you were to ask your employees whether they would like glossy brochures announcing a pension scheme, or no glossy brochures and a cheaper pension scheme, which would they go for?

The proposal they had been given was extremely high quality, and extremely comprehensive. It also included potentially higher charges than the company were aware of, and large commission payments to the adviser.

The conclusion to our advice was that the company should first decide what they wanted to buy before they went shopping. In this way they would not only make sure they got what they wanted (and perhaps more importantly, what they would use), but they would also pay a significantly reduced price.

I am sure that if more companies did this in their purchasing, be it of products or advice, then only appropriate services would be bought.

What Alfred Hitchcock taught me

Thu, 16 Feb 2012 11:39:00 GMT

A theme of these blogs, whether they have been about personal finances or issues facing business owners, has been the importance of planning.

I am a bit of a movie buff, and I particularly like Alfred Hitchcock films. I wouldn’t consider myself and expert, but there is a story about ‘Hitch’ that I particularly like.

Picture the scene. It is the first day of shooting a new Hitchcock movie. Everything is in place. Costumes are designed, the actors have learnt their lines in anticipation. The cameras are set up, and Hitch’s chair sits, empty, in the middle of the set.

Hitch walks onto the set, says hello to everyone and then sits down in his big director’s chair with the name ‘Hitchcock’ on the back. Everyone is waiting for his instruction.

Hitchcock looks around him, and then claps his hands and loudly declares ‘well, that’s another film finished’.

Looks of bewilderment on everyone’s faces. This is the first day of shooting, what on earth is he talking about?

What Hitchcock meant was that the film was as good as completed. He had the script written, the music was written, and he had storyboarded the entire movie. There was not a shot that would end up in the film that he hadn’t already thought of.

As far as Hitchcock was concerned, the movie was completed. All that remained was a relatively tedious process of actually filming it.

The parallels for our personal finances and business lives are, I think, obvious. Of course, we can’t map out our future like Hitchcock could control his films. Nevertheless, we can plan and prepare.

If a business was planned in the way that Hitchcock planned a movie, one of two things would happen. Firstly, everything could happen as expected, in which case the plan could be followed and success would result.

Secondly, something could happen that was not expected. In this case, the plan could be modified, and the unexpected event handled far more easily.

If life was a movie, I would want Hitchcock to be directing it, but with perhaps a few less birds. And I might be less likely to take a shower.

On second thoughts……

What do you give away for free?

Mon, 13 Feb 2012 10:23:00 GMT

I live in a village in North Somerset. We have a local garage, which is also a petrol station.

As you can imagine, this garage is heavily dependent upon its local reputation, which happens to be a very good one.

Our garage (note that I call it ‘our’ garage) has an air pump. It’s the old fashioned type of air pump, one on a long black hose which has a handle at the end, and if you put your hand over the end when pressing the trigger you would feel a blast of cold air. This air pump is free to use.

Depending on which way I go, my journey from the office to home could pass at least five different petrol stations. Each of these also has an air pump, however they cost 50p to use.

Guess where I buy my petrol? Of course, at our local petrol station. I have not even bothered to compare prices, I simply value having a local amenity, and want to support it.

The fact that they give away air for free tells me that they value my custom.

Furthermore, last time I took my car in for a service (I don’t use Kwikfit which would be more convenient, I use my local garage to service my car, in part because they give away free air), I mentioned to the lady behind the counter how much I appreciate the free pump. “Oh yes” she replied, smiling. “Everybody loves the fact that we have free air.”

I wonder how much money the air pump brings in for the city garages. And I wonder how much more business our local petrol station and garage take because they give away free air.

There’s one extra point to make on this. I am, of course, suggesting that other businesses should give parts of their service away for free. We certainly do at Ovation. However, the air pump is a very visible freebie. Customers see it, it’s different from competitors, and the garage gets feedback.

So my question to you (and to myself) is not just ‘what do you give away for free’, but ‘and how do you know your customers appreciate it’?

Why perception is more important than reality

Mon, 06 Feb 2012 16:06:00 GMT

When we form our opinions, make buying decisions, or adopt an attitude, we do so based upon our perception of reality, not on reality itself.

The existence of the advertising industry is testament to this fact. Whether it be fizzy drinks cans branded to look like healthy fruit juices, or financial products with the word ‘flexible’ in the title when they are anything but, advertising attempts to shape our perception of reality.

I read an article recently, about when Ricky Gervais and Karl Pilkington first met. Ricky told a story about how he asked Karl if he could hit him on his head with his mobile phone. When he did so, Karl asked “how did it sound?”

Karl, however, recalls that Ricky just hit him on the head with his mobile phone, without asking, and when Karl asked “what did you do that for?” Ricky said “Because I wanted to hear what it sounded like”.

The same memory, but with different perceptions.

I used to work for a pension provider. We had a sales meeting once, during which a colleague demonstrated that our company's personal pension products were better than a particular competitor, based on charges, performance, service, financial strength, in fact every important category. And yet the competitor outsold us 3 to 1. The only possible reason, my colleague concluded, was perception, as they were a far bigger company.

For many years, financial planning and financial products were sold on the basis of commission. Many people believed the adviser's classic line “I get paid by the insurance company”, not thinking that the commissions being paid to the adviser were coming out of charges from their money.

Currently, many IFA firms will claim to be ‘fee based’. They say this because it creates the right perception (and because they need to make this statement to claim to be independent).

Look beneath the surface, and in many cases, the fixed fee quoted is remarkably similar to the commission that the firm would have otherwise have received. It creates the perception of a quality fee based firm, whereas the reality may be that they still operate in the old school way of selling products.

A modern, professional IFA firm will focus on planning, objective setting, and will establish relationships with clients involving regular reviews. This is what a potential customer should see to analyse, and not be drawn in by the perception the firm wishes to portray.

What’s the difference between a business coach and a business mentor?

Mon, 23 Jan 2012 11:22:00 GMT

OK, let’s get the controversial statement out of the way…..

A business mentor is a business coach who is unable to stop themselves from giving their own opinion.

I’ll admit, this is a massive generalisation, and is said with the tongue firmly in the cheek. However, it does contain an element of truth. A coach seeks to help the individual. When I work with a business owner, I am seeking to coach them to be better at running a business. This is achieved by letting the individual set the agenda, and by applying methodology which helps the individual work out their issues.

In contrast, a business mentor will seek to make the business better.

I believe that both methods are valid, but it is important that the individual is clear which one they actually want. A business mentor will very often help to fix problems, using their skills, experience and knowledge. However, they do not necessarily leave the business owner in a better position to solve the next problem.

A good business coach will have a finite term. They will work with an individual until that person feels they no longer needs their coach.

In contrast, it is possible for a business mentor to never leave, as they have not necessarily improved the skills of their client.

Now, I stress, I do believe that each of these approaches has merit, and in practice it may well be that a business coach will be able to slip into mentoring and provide advice when appropriate. However, the coaching principle of helping the individual to become better themselves, is one that I do very strongly subscribe to.

The biggest danger facing the small business

Thu, 12 Jan 2012 11:31:00 GMT

Do you like change?

I love change. I would almost be tempted to call myself a change junkie. I see change as a challenge, something to be excited by.

There are others however who do not like change. They see change as a threat, and therefore something to be avoided.

Business owners spend much of their time thinking about other people. Running a small business can be a lonely experience, as you spend much of your time thinking about the concerns and wellbeing of others – your customers, your staff, and your cash position.

It might be a generalisation, but I do think that most business owners (or entrepreneurs as we are sometimes called) are the type to thrive on change. The desire to set up a business in the first place is often driven by a desire to ‘do it properly’ i.e. to change current practice to one that the new business owner feels is an improvement.

The business then, hopefully, succeeds, perhaps even thrives. It starts making profit, it achieves its objectives. What happens next?

This, I believe, is where we find one of the biggest risks facing the successful small business owner – they get a little bored. They want to change something. Perhaps they look for a new product line, or maybe start a second business.

This can, of course, be successful. However, in all too many occasions, this involves change for its own sake, affecting customers and staff, diluting focus, and taking the owners attention off the main business, which is the one that is making money.

My suggestion to such a business owner would be to resist the feeling of boredom until change is appropriate. Control this timescale by ensuring the business has strong systems and processes, by including staff to reduce the fear factor. Make sure the business can continue without your undivided attention, allowing you the freedom to pursue the next brilliant idea.

Change should be carefully thought through. A business plan is just as important for a new product line or service as it is for a new business.

The best piece of advice I ever received

Tue, 03 Jan 2012 09:36:00 GMT

The one piece of advice that I think of more and more through my life – both business and personal – was given to me by Ian Roylance, who, as well as being a friend, was a fellow member of Frampton Cottrell 1st XI cricket team.

I had been opening bowler for the first team for several years, but had a poor season and had been dropped. Whilst playing for the second team I had scored a few runs, and had therefore been picked for the first team again, but this time as a batsman. It was a crucial match, if we lost we would be relegated.

Chasing a relatively tough total, we lost a few wickets. My captain looked around as if not sure who he should send in. I stood up and announced “I’m next”. I was determined to prove a point to him.

Ian Roylance said just one thing to me as I passed him on my way out to bat. “Keep your arms close to your body, Chris”. I did exactly that, and scored 65. We won the match, saved relegation and I got Player of the Year.

I think of that line from Ian often. Another way of putting this would be 'keep it lean', or perhaps 'keep it tight'.

Keeping it tight prevents you at thrashing at the ball. If the bowler bowls a poor ball, rather than being tempted to try and hit it out of the park, you might hit it in a more controlled way. Score runs, but stay at the crease.

It also has great business connotations. It means (to me at least) 'keep to the point'. Be focussed. Get rid of the garnish, and concentrate on what matters. Work out what it is that you actually do, and focus on doing it better.

This principle has particular relevance in my activities as a business coach. Keep the questions simple, keep them to the point, and keep the coachee focused on the topic in hand.

I am not sure if Ian actually meant all this (although he may well have done, he is a bright guy!), but it resonated with me then, and it still resonates with me now.

If you are going to call yourself an expert, be an expert

Wed, 14 Dec 2011 17:00:00 GMT

I recently went to see a new client in the Forest of Dean. The address of the house was a name, rather than a house number. To respect privacy, let’s call it ‘The Old Bakery’.

Being in a village that I didn’t know, I relied on Satnav. I love Satnav, it took me to within 50 yards of my destination. Without a house number, however, it could not take me to the door. And, unfortunately, none of the houses had any names on the front either.

I parked, walked around a little, and scratched my head. How was I to know which was The Old Bakery?

At the end of the street, I spied a 'local estate agents'. You know the type – have been in the village for 50 years, they know every property, and everybody knows them.

So, I went into the estate agents, and asked if they knew of a property called The Old Bakery. There was a young lady, who seemed to be a secretary, and an older man, who I think was the estate agent.

The young lady began to direct me to somewhere at the other end of the village. When I told them both that the address was of the street we were standing in, they looked completely confused and told me that they had no idea where The Old Bakery was, and were very sorry that they couldn’t help me.

I went out of the shop, turned left, and took my chances. I knocked on the door of the house next door. The client opened the door, said “Are you Chris?”, and I went in.

If you are going to put yourself out as an expert, such as advertising yourself as a ‘local’ estate agent, you really do need to be the expert you are promoting yourself as being!

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