One of my favourite tunes from 1994 – Incognito “Positivity”.  Used to love listening to this in the car due to it’s uplifting words, always gave me a lift as a 26 year old salesman driving a White Cavalier. 

On the subject of “positivity”, last Friday night I spoke at a business awards in Tameside, Mancheser to an audience of around 250 people.  It was billed as an “inspirational speech” – so I’d pondered on what to say for a couple of weeks and decided on ambition and having a positive mindset (we call this 141%).

I’d clearly hit a chord as so many people came to me afterwards to say how much enjoyed hearing someone from a large company talk up small businesses and have an outlook that says you can achieve things.  Newpapers are still full of negativity, bad news and super-injunctions!   Five key points I covered were: -

1. Give, Give, Give – Giving has a wonderful karma effect.  The more generously you give your time to others unconditionally, the more opportunity comes and knocks on your door. 
2. Have a plan of where you are navigating to and programme your sub-conscious.    Your brain is a very powerful thing.  When you walk, you just walk, your brain does the clever bit.  When you pre-programme your sub-conscious with your objectives – it has an amazing effect of navigating you towards them.  What are your goals? Jot them down.  Process them.  Tell your brain out loud to help you get there (not at a bus stop mind you).
3. Have the mindset of an opportunity engineer.  Don’t think “What can I sell  you” – think - “What opportunities could we mutually work on?”  Win/Win wins business.
4. The world is a huge marketplace at your screen.  Never has there been a better time to open up your products and services to a global market.  It’s a click away.  Don’t limit your thinking to your local neighbourhood or regional.  Think Globally!
5. Small has a great advantage – you’re not BIG.  Speed is crucial in the hyper world we all live in.  Big businesses take longer to do things. Smaller busineses can punch above their weight using social media to engage customers, google to turbo-boost up local ranking and geo-location to grab people in local markets.  Get tech savvy.

There’s never been a better time to be a new start.  Free tools on the web.  Cloud based applications for money management, marketing and collaboration.  Social media to access markets.  Free business advice.  If you are positive and realistic, so much can be achieved.  That’s coming from a bloke that started out as a barman, who now shapes the direction of a £100m+ business.  Go get ‘em!

Chatting with a small business on the phone the other day, a quick conversation on the phone turned into an hours business clinic.  The business involved was suffering the after effects of a decision, which seemed good at the time, but is later paying the price for.

I won’t do the detail on the why’s and wherefores of the specifics, but there was some good advice there, which was worthwhile to share.  Again, this is linked to things that big businesses do well, that smaller businesses can learn from.  In no specific order: -

1) Know what your end game is. Selecting which pieces of business to progress/not progress rely on you having your end game down somewhere in a basic plan.  That sets the route for your business, the pace, the tone and utlimately the types of customers you want to attract.

2)  Don’t over-commit yourself. If your resources are limited, concentrate on the things that matter. In the early days of a start-up, there’s a tendency to do any piece of business at any cost, just to get money through the door.  If it totally overstretches you, it may be taking you away from more important potential higer value business opportunity.  Don’t be a busy fool, turnover = vanity, profit = sanity.

3) Opportunity Cost. You have a finite amount of time in working week.  Commit your time to achieving your plan.  Filling your time with business which you don’t make much money from simply limits the amount of available time you have to do more important things, like looking for more profitable customers or developing your offering.

4) Don’t always offer trade credit if it’s stretching you, particularly if selling to consumers. Ask for cash upfront or if for a trade customer, where you cashflow may be stretched.  Ask for part-payment up-front to cover your costs.  Be brave!  You’re not a bank or a charity.  Or give an early payment incentive (if your margin supports it).

5) Gear up to grow. If you know your end game and you know what working capital requirements might be, you will be far more selective about which bits of business you can do.  A good question to ask yourself is if a large customer walked through the door tomorrow, have you got the working capital to fulfill their order?  They will be expecting credit, probably 30 days net.  You’ll need to fund that.  Can you do it?

6) ABC. When taking a large order, take into account all the activity based costs (ABC).  What I mean is all the hidden costs of fulfilling the order.  The stuff that takes loads of time.  It’s tantamount to leaking profit.

7) Don’t get excited by the project, get excited by the profit. A common mistake I see is small businesses, particularly creative ones, being excited by a project and committing to it because it appeals to them.  Do a clinical assessment of every opportunity, you’re not a charity.  What’s in it for me?  How much net profit in this piece of business taking into account all the running round, the trade credit and the other costs.

Growing for Gold. That’s what I entitled a talk I gave at the Business North West fair in Manchester today to an audience of small businesses.  Examining three key areas of growing a small business to large, I made these points: -

Growing Pains – Things you’ll experience as your business grows.

• Feeling less connected with the breathing heart of the business.
• You’ll feel a bit out of control.  As you will realise you can’t do everything.
• You’ll spend more time in meetings.
• You’ll spend more time on people issues.
• You have to bring in managers to run areas for you (and by default spend more time managing them).
• You spend your time avoiding calls of people trying to sell you stuff.
• Life gets lonelier.  You’re not part of the team anymore.  You’re the big boss.

Things that Big Companies do well that small businesses can learn from

• They’re on the numbers. They always have a budget, 3 year plan and cashflow forecast.
• They make their processes slick, with as little human intervention as possible.
• They have a good plan A, but always have a plan B.
• They fail fast. If things aren’t going well, they don’t get wedded to an idea.
• They spend more time in the future. Looking at future markets, products and growth areas.

Transitioning from Management to Leadership

I ran through ten things from a previous post I’d written around leadership.  You can view it here and some tips to make you a better leader.

An interesting conversation came from the audience.  “What’s your motivation for giving this talk today?” – excellent.  Answer = My day job is creating market space for us to sell our products to SME’s.  It’s in my interest to see small businesss grow.  By growing, we get to sell more products to them (plus I enjoy the public speaking).

At the end of today’s talk, I spent about an hour talking to small business owners about various challenges, problems and opportunities that are on their desks right now.  It’s clear, that there are plenty of businesses with big ideas, ambition and the metal to get on with it.  Good for them.

I was fortunate enough to be invited to a private dinner with Dr. Andrew Sentance - who sits on the Bank of Englands monetary policy committee (MPC) – on a visit he made to Manchester earlier this week.

Meeting business leaders as part of his visit to the North West, he was interested to understand feedback about life on the street and hear directly how we felt the economy was doing, our outlook and perspective for the future. 

Articulate and brainy (why wouldn’t he be with a name like Sentance), he opened with a macro view on the global and UK economies. I’ve captured some of his key commentary in no particular order: -

• Commodity pricing remains a key issue (oil+gas).
• Interest rates do have to go up soon and “how to deploy the exit strategy” remains the key consideration without damage to the economy.  Perhaps in steps of 0.25%, travelling to 1% sometime over the next 12 months.
• The world is truly globalised now and it is difficult to act independently with so many chain reactions now built into the system.
• UK is in a recovery phase (as detailed by yesterday’s 0.5% rise in GDP) however the recovery is at different speeds, in different sectors.
• The 2.5% VAT rise is equal to a 1% reduction in wallet spend for the average consumer.
• Inflation remains a key long term concern for the economy.
• Exports continue to be in good shape with the weak £.  However, he did ask the views of the group about if the pound went up to the 1.25-1.30 range, would we see that as “damaging” – conclusion was no.
• Wage settlements continue to be inconsistent across sectors.  Some businesses opting to not offer increases, others awarding at RPI/CPI rate (up to 5%).

I asked whether the MPC took into account “natural disasters” in their forecasting.  It’s become clear now that a great deal of worldwide production is going to be impacted due to a lack of things following the disaster in Japan, such as micro-chips.  This inevitably may lead to a shortage of some goods in developed economies and therefore a potential to impact growth.  Sentace said the short supply may push prices up, therefore lifting selling prices, so my advice is ”buy it now” – for anything electronic!!

It also became apparent as there were a few businesses there which sold multi-nationally, that production by some major brands for developed economies is being capped in favour of developing economies like Russia, India and China (where there is a huge appetite for western goods and brands).  This is impacting on some of these goods entering the European supply chain.  For example, I didn’t realise that there was a shortage of pigment which car manufacturers use for painting cars, seems that one luxury car brand could only supply their cars in white for the forseeable future.  Interesting thought (guess what colour my new car is – that explains a lot).

It’s good to get these “think tank types” out.  Hearing real feedback from real businesses.  Having debate.  Listening to opinion and it’s a real value to meet other businesses from non-competing sectors to hear their view of the economy.  In a “sentance” – well worth the time investment.

Many of you may have recently ended your financial years and now be busy with auditors putting all the bits in the right boxes.  It’s a busy time.  The first couple of weeks of April are one of my busiest as new plan implementation starts and previous year closing ends.

It’s good to reflect though.  I find the process of writing the comments of the statutory accounts very worthwhile.  It really makes you look at the figures, dive into the detail and get a firm story in your head about your prior year performance, in order to not repeat any of the mistakes and to focus yourself down on the things that matter.

Listening to how other people do things in their business is a pre-requisite of staying relevant in my view.  It allows you to think about the way you do things, challenge your conventions and go away with a notebook of scribbled ideas – hopefully.

I recently saw James Timpson speak.  James is the son and of legendary entrepreneur John Timpson, most normally associated with the Timpson Shoe repair chain in the UK.  I’ve read John’s auto-biography and shared a stage with him last year at the Institute of Directors North West awards where he picked up a lifetime achievement award.

James, speaking at the Institute of Directors North West Annual conference, shared some of his thoughts about their take over of the Max Spielman photo-processing business.  It’s quite a story, I’ve bullet pointed the main elements of the purchase aswell as the things that stood out to me about how Timpsons run the business.  In many ways, you could say they are unconventional, however I think adopt a lot of common sense things, that allow the business to exist.

Max Spielmann

• In 2000, 780 shops, 2600 staff.  Turned a £14M profit.
• By 2008, there were 350 shops and a £13M loss in the business.
• Technology change was the big contributor.  Move to digital.  Business didn’t react to the change quick enough.
• First thing they did was shut the head office to send a message to all the staff.  This, James outlined, is the fastest way to get to the root of the business problems.
• James then travelled to every branch, listening to staff.
• They quickly moved the business into digital print.  Passport photos and portraits.  Trying many different things before settling on these core services.
• The business is now making aroun £1.3M profit.

Timpsons Business Model

• No Electronic Point of Sale (EPOS), Manual Cash Registers Only.
• They run the business with an “upside down” organisational model.  At the top = Customers, then Staff, then HQ, then the CEO.
• They have two rules.  Money always goes in the till.  You always have to look the part.
• When they buy a business, turnover goes down for 3 years whilst they focus on higher margin,  more profitable sales.
• Prices are flexible in the stores and determined by staff based upon local market conditions.  So haggle!

Timpsons Philosophies

• They believe in employee empowerment.
• When you loosen the reins, the good people stand out.
• Bail out early, if you make a mistake.
• They recruit on personality using a basic Mr. Men style scoring sheet.  Graphic images.  Simple, yet effective.
• They always have a pipeline of potential recurits.  They send monthly newsletters to these people to keep them warm.
• They give every member of staff their birthday off.
• They have a large number of employ benefits such as a wedding car the staff can use, a hardship fund which people can draw from, holidays home for staff and a dreams come true fund.  Check out their welfare benefit poster here.
• All employees in the retail chain participate in profit share.  Basic calculation is calculated by adding up the wages of people in the shop that week and multiplying it by 4.5.  After that figure is achieved, then all staff get 15% bonus of the over-achievement.
• Any employee can give up to £500 compensation to any customer on the spot, in the interest of customer service.

What’s evident is that the Timpson business model is a big success for them.  Their small store, low cost, profit share business models relies a huge amount of employee trust.  They reward that trust with some fantastic employee benefits, a list that very few businesses could compete with.  I like their simplicity, their customer first business model and the non-hierarchical way in which the business is run.  Their business model is far from cobblers, it’s clearly repeatable, across the right retailing proposition and there’s plenty to learn from it.

Speaking to a Treasury Select Committee on Monday,  Barclays CEO – Bob Diamond remarked “The big banks need to stop apologising for mistakes which led to the global financial crisis.”  I’m sure the two thousand or so workers from Manchester City Council who have today learned that they are to lose their jobs, totally agree.  “They’ve said sorry, so why should we be bitter?”  That makes it alright, an apology.   Not! Perhaps Mr Diamond might treat them all to a small drink up with his reputed £8M bonus that he is set to receive this year.

In a way, the people I don’t feel need to apologise for the banks behaviour are the thousands of bank workers in branches, customer support centres and campuses across the UK.  They are having to be the front end to the bitterness that many will foster for a long time, particularly those affected by job losses.  It’s the City boys where the blame firmly lies, many of them still sitting on the millions they made selling toxic debt to each other in the merry go round of hysteria.  Anyway, not planing to rant, wanted to quickly talk about the idea of the “jobless economy.”

With the public sector reducing headcount, clearly the private sector needs to grow to boost the economy.   Many businesses, having laid people off or re-organised, may well be reluctant to take new headcount on in the short term, opting to do more with less, in case there are any more – ahem – surprises.  2011 will be the year, where nervousness will exist in all areas of the economy.  Macro level forecasts take time to kick in.  So, whilst the public sector and related private sector companies with high public sector dependency make short term cuts, the private sector will be looking for new business, whether that be export or home market.

This transformation of growing new business in new markets won’t happen overnight.  New strategies need to be implemented, sales cycles need to be gone through, prosepcting, meetings, proposals, further meetings etc.  So, 2011 may well be a time where business does more with less.  Sweating assets (human and other) will be where it’s at, so whilst the economy may grow slowly, the number of jobs may not follow in the usual cycle.  Hence, we may well remember 2011 as the year of the jobless economy.  Let’s hope not.

“Yuh, I’ll have venti, skinny, de-caff, wet, latte to go please.”  Sound familiar?  The social media channels were awash with buzz about the re-design of the Starbucks logo today, customers old and new debating the why’s and wherefore’s of Starbucks dropping the Starbucks name from their logo and the word “coffee”.  Do you like it?

Clearly, something is going on behind the scenes.  In the UK, Costa coffee have really challenged them on the High Street and other chains such as Coffee Republic and Nero are all chipping away at their market share.  Their response has been to upgrade the stores, with a new look, more focus on space and being a destination. 

However, the logo re-design is a global initiative, so it’s obvious that there is a bigger plan brewing (working a nice coffee related metaphor into the post).  My guess is that they want to move away from being singly associated with coffee.  Starbucks = Coffee in anyones language same as Google = search.   Dropping the word coffee could lead them to re-position stores to serve alcohol and other related foodstuffs, expanding their footprint and share of wallet.

With one eye on the bigger picture, new markets is where it’s at moving forward, the mermaid image representing being the key logo/brand mechanic across cultures/languages – brave move.  There’s certainly been an outpouring of feedback, positive and negative, from experts and armchair commentators. 

I talked a lot about “glocalisation” in 2010, the rejection of global chains as consumers look for more authenticity in their lives, searching out better quality or localised suppliers in favour of the big brands.  Starbucks have had a brilliant decade behind them, whether some new look shops and a new logo will be enough to address this? We’ll see.  What’s obvious is, they may not be able to continue their rate of growth without a new strategy, new markets and some new products (breadth and depth).

Starbucks also need to continue to expand their “perkonomic” activity, such as free wireless, to continue to add further “perks” to justify the price of a cup of hot milk with a coffee shot in.  Still, one thing you can say, we’re all talking about them, so phase one of their comms plan must be in the bag.  Cheers!!

If they’d paid me a quarter of a million in brand consultancy, I’d of said “remove the word coffee and don’t mess with anything else.”  Job done – award won.  Otherwise, what are they?  The brand formerly known as Starbucks?

What can business do to contribute to the big society ideal formed by the government? That was the main question primed towards a small audience of business leaders by Business In The Community at an event in Manchester tonight.  I hadn’t really given it much thought previously, however in the surroundings of Manchester Business School and in the company of some bright minds we attempted to try and identify just some of the facilitators and barriers.

What’s obvious is that there are no easy answers or quick fixes.  There is a massive societal shift needed. Who will move first?  Is competition too fierce in the global economy now for us to adopt these holistic ideals?  There were some interesting points made, however it was clear that it won’t be easy to get quick traction.  Nevertheless, here’s a few of the points I thought relevant (in no particular order).

• Will people be prepared to work less hours for less pay to see more people in employment? - Tough one and the government might not like the answer.  We live in an age of consumption.  Of acquiring things.  My device is better than your device.  My TV is bigger than your TV.  Will people be prepared to trade down for the bigger good?
• There’s no financial incentive. You really want to motivate a businessperson to get involved, show them an opportunity, not a draw on their time.
• The bulk of business people represented on panels like this are normally large and successful. You only needed to see the audience in the room tonight.  All Gen X.  Board Directors in successful businesses.  You wont hear the view of  SME’s who make up 99.8% of business.  They are the ones you need engaged too as they employ half the UK workforce and can be more inciteful as to the conditions they would need to donate their time.
• If the Big society makes us globally uncompetitive, forget it. Harsh, however social investments rely on economic prosperity, a fine balance.
• Do Generation Y care like Generation X do? Generation Y (digital natives) have a completely different outlook on life.  They are pursuing fame and instant fortune (bit stereotypical I know), however this may get in the way of their ambitions.  You have to incentivise at all levels to get change happening.
• You need some new innovation in there somewhere. Salami slicing public sector expenditure and then shifting the burden to business, just isn’t on.  We all know the public sector is hugely inefficient in many areas.  Why not incentivise private sector business to drive savings and efficiency in public sector?
• Get local government to spend more of their grant with local businesses, not on national contracts. They can then insist on some of the big society ideals as part of the supply agreement.  Seen it done already and it works.
• The future isn’t public or private. It’s a fusion of both in the big society.  A fusion of Enterprise.  Rip down the barriers to enterprise.  Make public sector procurement easier.  Making the planning process easier for businesses to build the premises they need.  By expanding, there will be more jobs in the economy.  Carving up current jobs – in my view – just isn’t the answer.
• Do people have the time for all this? People are pressured.  T.A.T. rules.  Time is at a premium.  Work/Life blend is poor.

I’m not negative about it, just realistic. I’d love to see a society, which is more like Japan for example.  Purposeful.  Respectful.  More societal in its outlook.  However, people will need to see quick and early wins for this one to make it’s way out of the manifesto and into everyday practice.  It’s a big job, however a worthy aim.  What do you think?

A quick analogy to share with you tonight. It was used by one of the psychologists that ran a workshop for the team today, it relates to taking time out.

Two lumberjacks were felling trees in the forest with a traditional two man saw, after a full morning, they set to fell the largest tree in the forest.  Working furiously, they struggled to get the saw moving and expdended huge effort trying to make progress through the trunk.  As the afternoon progressed they continued to work, making little progress as the night started to fall.  Another passing lumberjack, stopped for a moment, seeing the tiny progress they were making.  “Did you sharpen your saw? ” he shouted over.  The two lumberjacks ignored him and carried on, with the same intensity of effort.  He walked towards them and repeated the words, “Did you sharpen your saw?”

The moral of the story is this. Rather than continuing to work with a blade, which had become blunt, the two lumberjacks needed to stop, sharpen their saw and then get back to cutting the tree. By doing this, they would have saved a lot of effort and got the job done.

The story was used today as a metaphor for businesses that don’t take time out and take stock.  Instead, carrying on being busy, sweating processes as hard as they can  and potentially repeating failure or ignoring problems.  By stopping to “sharpen the saw,” you may be able to step back, take a different look at your problems and come up with a different solution.  The point being, it may be time neutral.  If the two lumberjacks had stopped to sharper their saw, they would have stopped working for half an hour or so, however the tree would have been felled before dark.

With a huge amount of pressure on businesses right now, it’s important to stop and think.  The stepping back/out of the business for half a day or a day can be time well invested.  Giving people a chance to talk, to re-connect away from the processes, hustle and bustle.  So my question to you is, when did you last sharpen your saw?