How Healthy Is Your Business?

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Wednesday, 7.58pm

Sheffield, U.K.

A man is as old as his arteries. – Thomas Sydenham

Some principles refuse to die – perhaps that’s why they became principles in the first case.

Winning companies, for example, tend to keep winning and eventually get so big that they tower over everyone else.

The Google and Apples and Microsofts of the world along with the GEs and Gazproms are huge, lumbering beasts – unstoppable and invincible.

And then you have everyone else.

The small businesses, the charities bigger businesses and the entire public sector.

The ones who employ everyone else and do everything else.

How can you tell whether they’re in good health or not?

I’ve been wondering whether how they use data could act as a measure.

It’s probably not an exaggeration to say that the flow of data through an organisation is like the flow of blood through an organism.

The thing that keeps the organisation going is that steady data flow, pumped out hourly, daily, monthly according to a cadence – a heartbeat.

What we do is pulled, pushed, driven by flows of data – emails in, emails out, spreadsheets, files, presentations, meetings – a never ending series of rolling waves of data that break on our desks.

And if you listen to the sound of that data flow – you’ll hear the wailing of anguished souls.

People don’t understand what to do.

They haven’t got the skills to clean and transform data.

The stuff they send out is incomplete and messy and plain wrong.

It’s always someone’s fault – if only they could just work harder and do a better job.

It’s going to take days to work through every line of this spreadsheet and check it off.

It feels to me like in such situations we have something clogging up the pipes that transport that data.

With the human heart and arteries it’s plaque that causes the damage – deposits of crud that narrow and constrict the vessels and stop the flow of blood.

With organisations the plaque is the people – as they try and deal with what’s in front of them but end up getting stuck and causing a blockage that eventually causes a failure of the whole system.

It’s not their fault just like heart disease is not the fault of the bacon you ate yesterday.

You can’t explain why the system behaves the way it does by pointing to the parts.

It’s the human making choices about what to eat that causes heart disease.

And it’s the organisation – the senior managers that make decisions – that are responsible for the deposits and blockage in their organisation.

And it doesn’t need to be that way.

It sometimes feels like technology solutions, especially those from the big vendors and anyone who tries to sell software as a service have the same effect as fast food on an organisation.

If you want to be healthy as a person you have to eat right and exercise – try and stay lean.

If you want to be healthy as an organisation – the same principles apply.

Looking to technology for the latest miracle cure or plaque busting pill will not help you get better.

Looking inside – looking at your behaviour and changing it – doing less of the bad stuff and more of the good stuff is the way to improve anything.

But again – do you know how to do this?

Sometimes, just like in real life, we need a doctor to help – someone who knows what to look for and what to prescribe.

The information is out there – in books, in open source software and in people who can help.

But you have to want to be healthy in the first place.

And then decide to do the hard work that’s involved in getting there.

Cheers,

Karthik Suresh

How To Market And Sell Professional Services

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Tuesday, 8.31pm

Sheffield, U.K.

Professional services industries like finance, consulting, and legal services are, by definition, meta-industries. That is, they serve to help large companies raise money, buy and sell each other, reorganize, implement new systems, conduct complex transactions, and so forth. – Andrew Yang

I’ve been thinking about the service sector and how to market it for the last few days.

Which is why the book How to advertise by Kenneth Roman and Jane Maas caught my eye.

Published in 1976, it’s a short book and the two authors worked at Ogilvy and Mather.

The book is a quick read and effectively a bunch of rules – but there are a few interesting things that still resonate with us now.

First – what does it take to be a good advertiser?

The answer, according to the authors is hard work, knowing the rules and creative brilliance.

When you start thinking of marketing your product the first thing you need is to understand how you are going to position your product

Where is it going to sit in the mind of the consumer?

That positioning decision sets your strategy – one part of which is the creative bit – the actual advertising.

And the book lists five questions it’s worth asking about your creative strategy.

  1. The Objective: What should the advertising do?
  2. The Audience: Who is your target consumer?
  3. Key Consumer Benefit: Why should they buy from you?
  4. Support: A reason to believe in that benefit
  5. Tone and Manner: What is the product’s “personality”?

Getting the strategy right needs work – you need to do your research, understand the facts, really get a good picture of what is going on so that the strategy you come up with is grounded in the data.

This paper, for example, sets out how I go about doing this.

And then they say something in the book that really fits how I see things working.

Getting the strategy done is half the work. The other half is the advertising itself – the execution.

Now, if you look back at the points above you’ll have a very quick overview of what you need to do delivering any kind of professional service.

Whether you’re an accountant, lawyer or management consultant the first part of your work is all about coming up with the right strategy.

The second part is executing – delivering on that strategy.

But why should someone trust you enough to hire you?

And that’s summed up in one tiny paragraph on page 149 – something that I think could easily be expanded into a whole paper or book all by itself – a message that’s laid out in the image that starts this post.

“Look for a business philosophy, stable management, a professional staff, technical expertise, and a past, present and future.”

Read that again and tell me it isn’t one of the most elegant and densely packed sentences you’ve seen.

And then tell me if you can honestly say that your agency ticks every one of those criteria?

And if it doesn’t – isn’t it obvious what you need to do?

Cheers,

Karthik Suresh

What Should You Design Into The Core Of Your Business?

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Monday, 8.59pm

Sheffield, U.K.

Acting is not an important job in the scheme of things. Plumbing is. – Spencer Tracy

It is not always clear what kind of relationship exists between the work one does and what one is paid.

I have a book upstairs about the wealth distribution in the UK and while I haven’t read it in a while, some of the points it makes are probably still relevant.

For example, a quarter of the fortunes made in this country are in property and another quarter in finance.

The change from a nationalised set of industries to deregulation and free enterprise created a host of well paid jobs – what the book calls “fat cat” jobs.

These are the ones heading major enterprises, industries, institutions that came out of public ownership and went into the private sector.

The way one decides how to pay people that run these organisations is by hiring advisers who look at what other organisations pay and suggest an equivalent salary – something that results in a ratcheting up of salaries.

Then there are the people in the professions – what the book calls the “professional poor”.

They’re several rungs down on the wealth scale.

Now, while we’d all like to be fat cats one needs to be careful about labels.

Arguably, one of the most important inventions of modern times is the invention of the joint stock company.

This is where people who don’t know each other put in money for a share in an enterprise and of its profits.

This replaced entrenched interests, family concerns and cartels with an institution – something that was its own legal entity and that was served by its Board of Directors.

So, in that situation you would expect them to be competent and pay them accordingly.

But say you aren’t at that level yet – you don’t have a business that’s listed on an exchange – you’re just starting out with something new.

What do you need to have at the core of your business?

Well, the single best thing is to have a monopoly – be in a business where the barriers to entry are so high that you have no competition.

If you can’t swing that then make sure that at the core of your business you fix something that’s broken.

Let me explain.

Lots of people will help you make money. Play the markets. Find you investments. Save you cash. Get you compensation.

Few, however, really fix problems.

Take the job of a plumber, for example.

Most of the time you don’t really think about your plumbing at home – it works and there is hot water and something to drink.

But what happens when something goes wrong?

You’re willing to pay almost anything to get it fixed.

And that’s the point – you’re always more willing to pay money to fix a broken thing than pay money to avoid costs or make more money.

We’re very cautious – we don’t like to spend money if we’re not sure and we’re worried about losing money betting on the wrong thing.

In fact, we’re much more likely to hate the idea of losing money than the idea of making lots from a bet.

But when something is wrong – we’re a customer.

People look for you not because you’re nice or because you can help them – but because you can fix a smelly, dirty problem for them.

That’s the second best driver to bring in business – after being the only game in town.

Imagine listening to two pitches.

One says here’s a great way for you to make loads of money – you just need to hire me and I will do amazing things for you.

The other says you’ve got a smelly, dirty, messy problem in your house and your carpets are going mouldy – and I can fix that for you.

Which one are you going to hire first?

Cheers.

Karthik Suresh

What Must You Know In Order To Be An Entrepreneur?

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Sunday, 9.30pm

Sheffield, U.K.

Some people regard private enterprise as a predatory tiger to be shot. Others look on it as a cow they can milk. Not enough people see it as a healthy horse, pulling a sturdy wagon. Winston Churchill

Every once in a while you talk to a “real” business person and realise that they think in a different way about things.

Some of it is about culture and some of it is about history – but all of it is hard to compress into a formula.

Take, for example, a collection of essays titled The culture of entrepreneurship edited by Brigitte Berger.

The essays explore the way in which entrepreneurs operate around the world and argues for a better understanding of their importance.

This is important because, as the introduction points out, the living standards we enjoy are as a result of the productive forces unleashed by capitalism and embodied by entrepreneurs.

Entrepreneurs find ways to make the world work better – and in doing so seem to improve things for everyone else.

And that’s something many people still find hard to understand – they cling to the idea that people in business exist to exploit others – and that business itself must therefore be evil.

And that really comes from a place of fear – from a place of misunderstanding.

Imagine that a business is a creature – a strange thing with many arms and heads and a weird body.

Most people would be wary of such a strange animal – wondering what it’s going to do to them.

But that creature has probably evolved to fit a particular niche – and it is eminently suited to do what it is supposed to do.

That business can exist, grow, thrive until one of two things happens.

First, it can grow old and weak – and be devoured by something else.

Or its world can change around it and the niche it occupies disappear, leaving it defenceless and unprotected – and it simply goes extinct.

That’s just the way these things go.

But, while the business is alive – or even when it’s just a thought in the mind of an entrepreneur what is the most important thing that must be in place?

For this – we should think of one of the characteristics of a system as described by Russ Ackoff.

He said that you cannot explain a “why” in terms of its parts. A system cannot understand itself.

In a business you have many people doing jobs – think of them occupied in moving arms and legs – account and marketing and so on.

If you asked any one of them why the business exists you will probably get a partial point of view – perhaps articulated using the language and customs of the respondent’s profession.

In simpler terms they will tell you “how” the business works.

This is the business of analysis.

In order to know “why” the system works you must talk to the entrepreneur – the person who is outside the system – the person who is engaged in creating the business.

That is the only person that can tell you “why” the business exists because they were driven to create it.

This distinction is not easy to capture.

Does it mean knowing how to do every aspect of the business?

No – but it does mean knowing what each aspect needs to do – and making sure that’s done.

Within this basic structure there are a huge range of possibilities for how the entrepreneur functions.

Some people have grown up in business families while others have come to it with no background at all.

Some people see their businesses as families while others see theirs as a network of professionals held together by common values and desires.

The fact is that if you’re an entrepreneur the most important thing you have to be able to do is to see the creature you’re creating.

If you can’t then you’re going to struggle.

And it may be easier to stick with the day job.

Cheers,

Karthik Suresh