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Balancing Data with Gut Feel

Ideas for better lemon-squeezing

In the last ten years of working with independent businesses I’ve learned the value of lemon-squeezing. Does that make this a cookery show or a business blog? Well, I guess a bit of both. I use “lemon-squeezing” to describe getting more value out of your existing business and existing customer base. And, yes, it’s based on a cooking observation. Most people, when they add lemon juice to a dish, will tend to do the following:

Take a lemon. Slice it. Squeeze one half – partially. Discard. Take second, unsqueezed half, wrap in clingfilm (this is optional), and place in back of fridge. Open fridge two weeks later to discover mouldering piece of lemon and discard, unsqueezed.

Well, that’s how it works when I’m in the kitchen.

My observation is that this is also how it works for a lot of businesses. You extract a certain amount of business from your customers, just enough for present purposes. Then you put them in cold storage and when you go back to them, they’ve gone mouldy on you. Sounds familiar?

All the evidence suggests that most successful independently-owned and managed businesses grow through business development: they sell more of their existing products and services to their existing customers, and others who are like them. In other words, they become better and better at squeezing lemons.

Over the years I’ve been assembling hint and tips, based on anecdotes from entrepreneurs I’ve worked with. Here are a few choice ones for you to share:

1. Assign responsibility for lemon-squeezing as a priority to one person, who can look at opportunities across the organisation and across the customer base. One participant in a 2004 Cranfield Programme described his experience of putting this into place even before the programme was finished:

“I know from analysis in the MIRC [market research database] that our competition claim to get at least 60% of their income from existing customers. We get about 35%. We are missing a trick!
We’ve taken two key initiatives:

1) Moved a key member of staff into a role specifically aimed at squeezing lemons. He will work as a 'Consultant', offering to help customers do a health check on their systems. The objective is to make them feel looked after and not feel pressurised by a salesman. Already the customers are beginning to buy additional services.

2) Cross sell. With very minor modifications our essentially vertical market products can be adapted to provide benefits to the other market sectors: e.g. our charity customers can benefit from our document management product. Our Engineering customers will welcome our CRM solutions once we change the terminology in the software.”

Subsequently he told me that they’d generated at least £100k net extra from these two exercises.

2. Move towards a key account mgt (KAM) structure, with a plan for growing major individual accounts. Here’s what happened at market research business Cobalt-Sky (Cranfield BGP 2002):
"I got our sales director to set up the KAM. He identified our key clients, bought some consultancy time from a sales person, and now spends most of his time working with our main clients building relationships. We've stopped looking at competing on price and are working with a core group of people who are happy to pay our fees in return for great service. We've got the whole company behind this, as it's the work they do that proves the sales offering is "what it says on the tin".

"The nice thing is that everyone is involved. We had an instance where a customer asked one of our people for a set of data in a specific format. Our chap queried this and it turned out he was looking for a certain type of software, and we actually did something similar, albeit in a different department. Our guy then convinced him to look at our product - it's still ongoing, but the main lesson is that our people are now awake to potential sales, outside of their normal work.

"We are also getting a lot of good feedback from our clients about how they enjoy the contact outside of project-specific meetings, and it's quite unique in our industry.

"It's very hard to pin down how much work has resulted from this, but since BGP (which obviously takes the credit!) our sales have grown by 34% and profits by 134%. "


3. Make it easy to buy through creating options. Peter Wood, a Cranfield BGPer from the Jan 2005 programme, contacted me with a great example of this approach. His firm, Wychwood Water Systems, specialises in water treatment. Peter took an enquiry from someone who was thinking of buying a second-hand water purification system, maintained and serviced by Wychwood. The enquirer had been to view the system, saw Wychwood’s contact details on the equipment, and phoned for a chat.

Peter takes over the story: “Having listened to him I advised him that the equipment was too large for his needs and at the price asked was too expensive. He also told me that they had limited capital funds and, if possible, would prefer to rent a solution.
Our preferred option is always to sell new equipment. So I made an appointment to visit him, look at the application and meet his MD.”

Peter also spoke to fellow BGPer Saul Pitaluga, a director of capital equipment finance house Tower Leasing. In the Wychwood quotation for the system were the terms from Tower for three and five year leasing arrangements.
“The end result,” says Peter,” was a happy client, an order worth almost £20k for Wychwood and a leasing agreement for Tower. This is the first time we have ever actively promoted leasing. But obviously we will not hesitate to do so again.
“The lesson seems to be that, when offered leasing terms, the client is no longer focussed on the capital cost of the project. The capital value of this project actually came in at nearly double what we thought it would be!”


4. Test your pre-conceived ideas about customer price-resistance. Forward Press produce bespoke books of children’s poetry, aimed at the schools’ market. MD Ian Walton described how he suggested squeezing the lemon by adding an uplift to the postage charged on each order. His fellow-director was unsure that this would work, but suggested instead that they increased the cover price by £1/per copy. This has been done and encountered no price-resistance at all, netting the business an immediate uplift in net profit of £35k/month, recurring.

Feel free to contribute any ideas and experiences of your own.

© David Molian 2008

Stepping Up: The Transition from CEO to Chairman

I recently spent an afternoon with some of the most successful entrepreneurs I know. Between them they have founded or bought into a diverse set of businesses, covering education, financial services, luxury cosmetics, market research, telecomms management, media services and executive recruitment. Most were in their early forties and operating out of the UK.

Courtsey of our hosts, Coutts Bank, we had gathered to focus on the issue of transition in the owner-managed business. Transition, that is, from being chief executive or managing director, to the role of Chairman of their own organisation. With two exceptions, all my guests had chosen to go down that route, and were at various stages of making this happen. One of the exceptions was a self-confessed waverer. He was taking part to help decide whether or not to commit himself to this path. The other exception had recently sold up and had, as he put it, exchanged the problems of managing his business for the problems of managing his money. It was, he agreed, a nice problem to have.

Why does it matter?

In the two decades that I have been running businesses, advising entrepeneurs and serving on company boards, I have constantly returned to this central question: how does a venture founder create a business with independent value? Most owner-managed firms don't wean themselves off their dependency on their founders. The consequence is that the option of selling - certainly for the kind of price the owner(s) may want for the business - is never really on the table. I was staggered to read the other day that only 7% of attempts to sell private UK businesses are successful. The other 93% just soldier on and eventually either cease to trade or change ownership for a nominal amount.

There are many reasons why business sales fall through. But experience and intuition suggest to me that the major factor why most attempted sales never get off the starting-block is that there is nothing of any real value to a prospective buyer.

A large part of that value arises out of creating a business that runs independently of the founder. To achieve this, the founder has to learn to let go, and to spend increasing amounts of time improving the existing business and fashioning a new business for tomorrow. For many entrepreneurs a significant milestone in that journey is reached when they cease to be the CEO or MD and step up to the role of Chairman of their own business.

How do you know it's time to let go?

To return to our round-table discussion, one of the first questions to surface was knowing when the time was ripe to hand over the operational reins to a successor. One participant, chairman of a £ multi-million financial services group, spoke of a dawning awareness that the business which he had laboured night and day to set up was re-cast in his mind as an asset: to be sure, a very important asset, but in a sense no different from his stock portfolio or pension fund. Once he had crossed that bridge mentally, it was a no-brainer. Promote and recruit the best managerial talent he could find - invariably better at specific tasks than he was - and then create the conditions in which they could thrive. In other words, maximise the performance of the asset, not pander to his own whims and ego.

Others shared his view. And, as more self-revelation was put on the table, the word boredom cropped up. Being CEO of your own business is, after all, a job. Other people get bored if they're in a job too long. Boredom is almost certainly a sign that, on a day to day basis, the business can get along quite nicely without you. It's actually a positive signal, but it's potentially quite destructive. I've known too many entrepreneurs who suffer from a low boredom threshold. Without meaning to, they react to feeling bored by meddling and interfering for the sake of it, demoralising their staff and often causing many more problems than they solve. That's because they're confronting what ought to be another symptom that the business is ready for the change: the founder no longer understands [some of] the details of how the business works. For many entrepreneurs that's a reason to panic. Others embrace it. As another participant in the discussion put it: "I knew we were ready for me to change roles when someone produced a brilliant set of measurement indicators at a meeting. I hadn't asked for them, they'd just gone ahead and done it. Much better than anything I'd come up with. I asked when we were going to implement them. I was told we'd been using them for three months. Time for me to get kicked upstairs!"

Appointing your successor

The dream scenario is to have an obvious internal candidate for the MD's job, a seamless handover, and everyone lives happily ever after. For most people, however, that scenario is just a dream. Our executive recruiter gave some robust and practical advice. First and foremost it's a job, he pointed out. What's more it's an important job and a big investment: when you factor in all the costs involved in the search and selection process, salary and benefits for at least two years, it could be north of £250,000 even for quite a modest business. If you were spending that much on a piece of machinery, you'd invest some thought and care in the decision. He also pointed out that all the research showed most people were pretty poor at recruitment. It ought to be a scientific process, undertaken by experts in the field (note: since he has recently sold his business, he has no vested interest in pushing this line!).

There was general agreement that, even if an ideal internal candidate existed, he or she should be measured against a full job spec., drawn up independently. That spec. may well look like the opposite of the founder. If he or she is a typical entrepreneur, with a flair for invention, solving-problems and - in the nicest sense - self-promotion, the chances are you need someone with a head for detail, systems and processes who enjoys the steady-state challenges of managing operations. And if you are recruiting someone from a corporate background, with a view to their bringing with them the disciplines of a professional manager, make sure they fully understand what it's like to work in a smaller, entrepreneurial business. For at least half the people round the table that was the crunch issue, based on personal experience of recruiting corporate types who couldn't hack an environment lacking in big company infrastructure.

Managing the transition

It's good for a business to be shaken up from time to time was the general view. By all means prepare the ground, but don't pussyfoot around. Everyone needs to get the message that there's a new sheriff in town. One of our participants moved out of his office and just keeps a desk in the corner, to lower his profile in the business. He comes into the company from time to time, but deliberately holds meetings with his CEO off-site, to avoid any hint of undermining his successor. Harking back to the theme of regarding the business as an asset, everyone recommended that the new Chairman have plenty of outside interests and, if these were lacking, develop them fast. One contributor who couldn't make it on the day wrote saying that for the six months following the appointment he busied himself with other things. Be prepared to bite your lip, he advised. The new CEO will deliver what you consider to be 50% of what you did, which your successor rates at 150%. You'll be told that the systems you installed are woefully inadequate and some of your longest-serving, loyal staff are not up to their jobs. Your might not like what you hear, but the new man or woman must have the opportunity to build their own team around them.

On the other hand, be absolutely clear about your vision for the business and the paramount task of the CEO, which is to deliver it. As Chairman I have really only one job, said my correspondent: to fire the CEO if he fails to deliver!

So what should the Chairman actually do?

Well, there was plenty of discussion around this one. The fact is, no two Chairman's jobs look exactly the same. An important distinction that emerged is the difference between businesses with and without external shareholders. If the business has institutional or private investors, then there's a good chance that the primary role of the Chairman will be to manage the board and shareholders. Another contributor who couldn't make it on the day has a business with over twenty outside investors. He has been part-time chairman of the business for about a year now, and nearly all of that time is taken up in board business and conversations with shareholders - mostly on the subject of when and how the business will be sold.

The same contributor made another point. Entrepreneurs shouldn't confuse being bored with the role of CEO, with being bored with the business. Those who do risk selling their businesses prematurely and regretting it. Since he changed roles to become Chairman his enthusiasm for the business had been reinvigorated. He also sees it with fresh eyes and can offer his successor a more detached perspective.

For those who don't spend most of their time as Chairman managing their board and shareholders, there's a variety of opinion as to what the job should consist of. Strategy, finance, recruitment and new business development were all mentioned. The reality, however, seems to be that it's horses for courses, a mix of the skills and talents of the entrepreneur and the needs of the business. On three points there was general consensus:

First, becoming Chairman creates the time and space to think strategically about the business, so it makes good sense to take that opportunity. This does not mean the Chairman should have exclusive ownership of formulating and reviewing strategy. Indeed, the bigger the business, the more the need to involve others in the process. But it would be an exceptional situation for an owner-manager to relinquish a leading role in creating the strategy for the business they have built over the years.

Second, like it or not, the entrepreneur will continue to be viewed as the figurehead and ambassador for the business by staff, customers, suppliers and other key stakeholders. That's just a fact of business life.

Third, this is the ideal time to review the composition of the board, indeed the whole business of corporate governance. If you have external shareholders and non-execs already you will do this as a matter of course. If not, you will need to consider whether you have the right skills and experience on the board to support the new CEO in his or her role, and to take the business forward to the next stage. One contributor told how he had conducted a careful search to recruit a non exec. who would function as mentor to the new MD, and who could also as an intermediary between two people he described as chalk and cheese.

How do you know if you're doing a good job (as Chairman)?

If you have outside shareholders and a robust board to report to, they'll soon let you know! But most people in this situation are likely to be majority shareholders and the dominant figures in the business. So how should you assess your own accountability? Avoid the temptation to invent new or unneccessary performance indicators was the general view. The external reporting measures are the ones that count. Is the business delivering its targets? Is it on track to achieve the shared vision of the Chairman, the board and the CEO? If it is, then you're doing a good job! If not, it's time to sit down and take stock. The hardest thing for many owner-managers to take on board is often an acceptance that they will contribute more by doing less!

Some Dos and Dont's

Do

Consider whether this is right for you, the staff and the business. If the answer is yes to all three, you've passed the test

Develop outside interests if you don't already have them

Prepare the business, but don't fudge the decision once you've made it

Give your successor time and space to breathe

Be ready to take on responsibility for development of the board

Remember that becoming chairman may mean giving up things you enjoy doing

Don't

Get in the way of the new regime

Take inevitable changes personally: it really is just business.

And finally.. remember that in times of crisis, the role of the Chairman will come into its own.


© David Molian 2008

From Brand Me to Brand Business: Creating a Business with Independent Value

From Brand Me to Brand Business

The bridge that every ambitious entrepreneur has to cross to create independent value



Every ambitious entrepreneur has their sights set on creating a business with independent value. Admittedly, not everyone starts a business with a view to selling it. Some people will want to hand the business over to the next generation of their family. Others are just in love with what they do, and plan to keep growing and developing their businesses as long as their health allows them to. But a true test of the maturity of any independently-owned and managed firm is whether you are working for the business, or whether the business is working for you. Only when you can honestly say that the business is working for you, do you have a business that has independent value.

It's more than just playing with words here. One of the commonest complaints I hear from owner-managers is that, too much of the time, it seems as if the business is running them, and not vice versa. Their days are spent fighting fires, solving problems brought to them by other people, checking that staff are doing their jobs properly, soothing irate customers, negotiating with suppliers…the list is endless. They know they should be spending more time improving today’s business and shaping the business for the future, but somehow the good intentions are always on the back burner.

Brand Me

If this sounds like you, don’t worry. You are definitely not alone. I would guess that this is how many owner-managers feel, quite possibly most of the time. The shared problem is that they are stuck in the zone that is Brand Me. In the Brand Me zone, the business is in all essentials an extension of the founder and owner-manager. The business has no real existence independently of the boss – or bosses, in the case of partnerships. Of course, if the firm is a limited company or partnership, legally the business is a separate entity. But the reality is that commercially the business is little more than an appendage of the owner(s). And when the boss is away for any length of time, the business starts to languish, just like an organ which is cut off from the blood supply. Why else do so many owner-managers take so little holiday? And when they do, why do they spend so much time checking their emails, reading text messages and calling the office?


Brand Business

The converse of Brand Me is Brand Business. In the Brand Business zone, the business is genuinely separable from the owner-manager. He or she can take time away from the business, without the constant need to phone in or experiencing a low-level, nagging anxiety, always in the background. In this zone the staff know what needs to be done, and do it. They deal with the routine, everyday decisions and only refer issues by exception. People know where the business is going, and they understand the part that they play in making this happen. The main value added by the boss is in setting the strategic direction and enabling the employees to perform to the best of their abilities. And the biggest pay-off is that in the Brand Business zone the business is much, much more likely to have value as an entity independently of the owner

Shangri-La or the Promised Land ?

It might sound like we’re relocating to Fantasy Island, but Brand Business is a reality for a select number of owner-managers whom we talk to every day. More to the point, programmes like Cranfield's Business Growth and Development Programme (BGP) have helped hundreds of owner-managers actively cross the bridge. Before we examine how an owner-manager makes the transition from one zone to the other, take a minute to answer the ten-question test, to discover where you and your business are currently located:

Which Zone Are You In?

Are you the chief sales person?
Are you the major point of contact for key customers?
Are you the major point of contact for key suppliers?
Do you personally negotiate all contracts of significance?
Are you supporting the business with personal bank guarantees?
Do you routinely answer day-to-day queries from staff?
Are you working in excess of 40 hours a week in the business?
Are you the chief – and frequently the only – firefighter?
Do you spend fewer than five hours a week planning and discussing the future of the business?
Do you lack any colleagues in the business with whom you can discuss your hopes and fears openly and honestly?

For every Yes, score yourself one point.

If your score is:

3 or under: Congratulations! You’ve completed the transition to Brand Business, or are well on the way to doing so.

3 – 6: Well done. You’re on the right track . Keep going!

7 or over: You’re still firmly on the Brand Me side of the bridge.

Everyone starts as Brand Me

Every start-up is a Brand Me business. In the early days the founder is asking investors, customers, suppliers and new recruits to take a leap of faith and place their trust in him or her. No matter how clever or compelling the idea, or patentable the technology, all these supporters of a new venture are ultimately betting on the vision, courage and stamina of the business founder. That’s just as true of a business concept which is built around a strong branded proposition from the word go, as it is of any other type of start-up. People, as has often been remarked, back people.

As time goes on, however, the possibilities open up, of transition away from Brand Me to Brand Business. Some business founders, the gifted few, pass rapidly down this path and head for the bridge almost instinctively. Others never get to see the bridge. Most are stuck, frustrated, in the Brand Me zone, aware that somewhere out there is a better alternative, but never quite being able to figure out how to get there.


Strategies to help get you across the bridge

Based on many years of working with successful owner-managers and their businesses, I’d like to share with you my observations on strategies that aid the transition from Brand Me to Brand Business in three key areas: Customers and Suppliers; Finance; and Management Style.

Customers and Suppliers In so many Brand Me businesses, the owner-manager is the tip of the iceberg. Customers and suppliers are aware that there is a larger entity beneath the surface, but the only thing they see is the boss. And because the boss is all they see, that is, for them, the business they buy from or sell to. So, unless you train your customers deliberately, the only person they will want to deal with is you. Now, many people – especially those in service businesses – tell me that they alone are the people the customers trust to handle their business. To which I say:

- the process of weaning the customer off their reliance on one individual will never start unless you, the supplier, make a conscious effort to do so
- dependency is almost always a mutual state: often the supplier enjoys and promotes it, albeit unconsciously
- if the customer trusts you, they should also trust your judgment
- if there is genuinely no one else in your organisation whom you would trust with the customer, then you have a separate, and serious, issue that needs fixing

How do you wean your customers, suppliers – and perhaps yourself - off excessive dependency? You need a plan, and the will to take a couple of first steps in the right direction. Start by identifying who else in your business has the potential to grow into the role. If the answer is no-one, then you’re going to have to develop someone internally, or recruit from outside. So, start planning your development or recruitment initiative. If you have no experience of doing this kind of thing, find people who do: there are plenty of experienced freelance HR experts who can help you identify the skills and competences the role requires, and profile the right sort of candidate. An experienced HR professional can also advise on the process of bringing someone alongside you, on the gradual and progressive transfer of managing the relationship with key customers and suppliers. It can’t happen overnight, and you don’t want to put key business relationships at risk. But unless you make a start on the process, you will be forever stuck in the Brand Me zone of customer dependence.

Finance Surveys suggest that, for at least 30% of independent UK businesses, their primary source of finance is the bank overdraft. And for most of them that funding is secured against their personal assets – which generally means the deeds to their property. Some of you reading this article will know the situation only too well. Now, many start-ups begin life funded at least in part by secured overdrafts. But the bank overdraft is no substitute for a long-term finance strategy – for a going concern, it should be a supporting facility that helps fund working capital when needed. Owner-managers who migrate from the Brand Me zone do so by freeing themselves from the shackles of the bank guarantee. They do so by using all the funding means at their disposal. Karan Bilimoria, founder of hugely successful Cobra Beer, has used seventeen different financing mechanisms to drive his company’s growth. If you don’t challenge the status quo, you will be condemned to live with it.

Many people respond to that by saying that the only way they can finance their business’s trading activity is through a bank overdraft. I have a number of responses on that score:

- first, have you really looked at all the alternatives? Do you indeed know what all the alternatives are? When was the last time you went into the market place or took independent advice on your financial structure? Apart from all the mechanisms of debt finance such as factoring and invoice discounting, have you considered an injection of equity from an outside investor? The number of business angel investors and private equity houses has increased hugely in recent years. Many owner-managers view outside investment with great suspicion, but there is plenty of evidence that this brings greater stability to the business and relatively little loss of control.

- second, is the real reason why you are forced into expensive, short-term financing that you just aren’t delivering adequate margins? It may well be that the business is not producing a large enough return to re-invest and fund its working capital. Are you charging enough? Do your customers fully understand the value they are receiving? Have you even told them? On the costs side, do you have the best terms from your suppliers? Could you get a better deal on office staples and utilities bills by joining a buying consortium, for example? Do you review your supplier base annually and set targets for improvement, or do you just accept the terms as given?

- third, is your working capital working as hard as it should do? Have you let your debtor days creep up, or do you keep these constantly under review? Is someone in the office tasked specifically with chasing late payers? Do you have a well-defined process for getting the money in? If your debtor days are currently sixty, you won’t bring them down to thirty overnight. But with focus and dedicated effort, you could almost certainly reduce them to forty-five days within twelve to eighteen months – it’s possible, because I’ve seen literally numerous owner-managed businesses achieve that sort of dramatic improvement.

I guess the main point I am seeking to make is that all too often reliance on expensive short-term debt is disguising inefficiencies in the way the business is run, and enabling them to persist. A business that is in a healthier financial state is not only a better business – it’s much more likely to be a Brand Business enterprise

Management Style And thirdly we come to what is often the toughest nut to crack: the behaviour of the boss. Too many owner-managers are imprisoned in the Brand Me zone behind walls which they have build themselves – and the get out of jail card is one they have to play for themselves!

Business founders tend to start life as what I term artisans. He or she practises his or her profession, or trades in a market that is already known to them. Most of their time is spent doing the business, and very little managing it. Over a period, as the business grows, that picture changes. The owner-manager is drawn into an increasing number of routine management tasks, of the sort we identified at the start of this feature: overseeing invoicing, revamping internal systems, dealing with suppliers, solving customers’ problems and so forth. Most importantly, the boss typically becomes the hero figure in the office, solving the daily problems which are brought to him or her by other people. The more you solve other people’s problems, of course, the more they are likely to bring them to you…

In most businesses this situation persists until the boss decides it can’t go on, and starts to create a team to help manage the business, either promoting from within or recruiting externally. Too many owner-managers then can’t resist the temptation to interfere – often from the best of motives. After all, who understands the business as thoroughly as the person who created it? But doing other people’s jobs for them isn’t growing their skills or building their confidence: it’s meddling. Very few people actively enjoy having someone constantly looking over their shoulder. Indeed, the ones least likely to tolerate it are the talented and ambitious people you would like to employ in your business.

It’s not hard to predict what happens next, if the tendency to meddle goes unchecked. Either demoralised staff will quit, or the owner-manager concludes that he or she is paying people to do the work that the boss is doing, and consequently fires the management team. The owner-manager then reverts to being a full-time hero, until they have another go at recruiting some help.

If all this sounds too much of a parody, consider the evidence. Of the hundreds of owner-managers we meet at Cranfield, roughly 90% identify themselves as either predominantly heroes or meddlers. Only 5% rate themselves primarily as strategists: that’s to say leaders who work largely on the business, not in the business. And it’s only by working on the business that you will succeed in growing it.

Behavioural change isn’t easy, but it is possible. Here are four initiatives that you can try:

Four little words: “what would you do”? The behavioural diagnostics we use tell us that most owner-managers display the characteristics of both hero and meddler. As a first step, then, we advise resisting the temptation to solve problems brought to you – the classic response of the hero. Greet the request with these four little words, and the questioner will usually tell you exactly what they would do. If it’s a routine enquiry, nine times out of ten it’s exactly what you would do too. Repeat this response often enough, and people will soon get the overt message: don’t bother me with things you already know the answer to. Fairly quickly they’ll also get the implicit message: you take responsibility for matters within your discretion. And the number of requests for heroic intervention will gradually decline until the problems that people bring genuinely are the exceptional ones.

Clarify roles, responsibilities and accountabilities: It’s a lot less easy to justify meddling if there’s clarity over who is supposed to be doing what. Often this is no more than a matter of writing things down, in consultation with key members of staff, so that everyone has a sharper understanding of their roles. This process can frequently bring to light misunderstandings or ambiguities, so is worth doing in its own right.

Delegate, don’t abdicate: don’t try to move too far, too fast. Delegate a few, simple things, be available to support your staff and see how it goes. As their confidence builds, so you can up the responsibility. We know from research that owner-managers who grow their businesses successfully spend significant time coaching and mentoring their top teams.

Get out more. Yes, it’s as simple as that. Spend less time in the office getting in other people’s hair. Divorce yourself from the daily routine so you have more time and space in which to think. Many former BGP participants tell us that their best ideas for developing and growing the business come to them on the golf course, over dinner, in the bath – anywhere but in the office. People who get out more invariably discover two things:

- the office can indeed run without their permanent physical presence
- people will not only embrace responsibility when they have to take decisions – those with talent and commitment will positively enjoy it


In conclusion

If you’ve read this far, decided that you are definitely a Brand Me business and are happy to remain so, that’s fine. Most owner-managed businesses are lifestyle businesses which will never grow beyond the extent with which the owners feel comfortable. But if you’re ambitious to grow and feel frustrated that you’re not getting where you want to get to as fast as you’d like, being stuck in the Brand Me zone could be a major part of the problem. If that’s the case, we hope that we’ve given you some useful food for thought and some practical guidance on how to cross that bridge to Brand Business.

© David Molian 2008

If you’d like to respond to this piece with your views, the author can be reached via d.molian@cranfield.ac.uk.

Happy New Year

A major New Year's resolution for me was to improve my technology skills. Beginning a blog forces me to start..


A thought to share with any of you visiting this site. I spend much of my working life with entrepreneurs, all busily innovating and growing new businesses. Towards the end of last year I hosted a discussion at which a very successful venture founder was addressing a group of bankers. He has received a number of approaches to buy his business and may well sell before the end of 2008.



The audience was keen to hear his views on the proposal from the UK Treasury to raise the level of qualifying Capital Gains Tax from 10% to 18%. Would it discourage people like him from starting new ventures, and/or drive them into tax exile? It might discourage others from starting ventures, he said, but he wouldn't be seeking a new domicile in a tax haven. He would rather grit his teeth and pay up. When pressed, he said it was important not to lose sight of other values in his life. Business success bought him freedom to live life more fully. Would he rather be marooned on an offshore island and spend all his time miserably counting his money, or be a little less rich but happy in the company of friends and family in London? For him it was a no-brainer..



I retell the story not in defence of (yet) more taxation, but for the sake of a little perspective in my life and yours. It's easy to set the cost of things: a little more reflection is sometimes needed to gauge their value.

Happy New Year