Collaboration is key to competitive advantage

13/07/2012

How times have changed in the past ten years. Companies I would have viewed as major competitors at the turn of 2000 have now become close allies – we are sharing knowledge, IP, business ideas and revenue streams. It strikes me that collaboration is very much embedded within the mindset of the forward thinking organisations I meet on a day-to-day basis. Those that hold their cards too close to their chest will almost certainly miss out on new business and product opportunities. Collaboration can present itself in many formats:

  • Businesses with complementary skills coming together to bid for large contracts – one where the mix of expertise and geographical coverage offers massive benefits to a customer. This can be achieved as a consortium or through what is commonly referred to as a special purpose vehicle (SPV)
  • Companies fusing complimentary products and services to create a new offering – WP did this several years ago, we took creative expertise of a University and combined it with coaching techniques to create the highly successful Winning Pitch TV (WPtv) – a great example of HE working with a SME
  • Euro Garages one of the North’s most successful companies brought together petrol stations with Starbucks and Subway franchises to build a new experience in filling the tank.
  • We see it everyday on the motorways with Starbucks, M & S and other high street chains teaming up with service operators to create a new service station break – this used to be a joke in terms of food quality, now, very different
  • Large pharma companies engaging with smaller niche R & D operators. A much nimbler and cost effective route for multi nationals to build their innovation pipeline

Fundamental to collaboration is a win- win attitude, there has to be a common goal, a shared vision, a sense of trust and purpose, fair commercial gain for both parties. Working as I do everyday with high growth companies, its very clear that those entrepreneurs who think partnership are opening themselves up to so many new possibilities.  Stay awake, think about who you can collaborate with, the only warning is, be sure why you are doing it and what’s in it for both of you!


Gazelles – past and present (part 2)

02/05/2012

I wrote a blog a week ago that covered Harvey Goldsmith’s view of the Top 10 greatest entrepreneurs past and present (part 1). Here is the final listing from 6 – 10 and the insights I think are important for other ambitious people:

6. Harry Hyams (1928 – ) – a man who changed the face of commercial property. He built Centre Point in the 60’s and left it controversially empty for months. He was a man who got his timing right, stirred things up – a great example of success is often down to luck. Many would say he planned to be “lucky”

7.Bernie Ecclestone (1930-) – grasped the opportunity when he saw it. From selling cars to F1 supremo. The window of opportunity is presented to so many of us but how many grab it when it appears? It often only lasts for a short time. His vision and leadership is an inspiration to us all.

8.William Morris (1834-1896) – crafts and arts specialist who dreamed of improving the quality of life for British workers. He was a highly successful artist whose designs are still around today – the message is? Leaving a legacy and putting something back!

9.Lew Grade (1906 -1998) – a master entrepreneur in the entertainment business. Famous for pushing an idea across the finishing line – how many of us are guilty of losing faith in an idea when the first hurdle presents itself. Faith is such an important part of getting the idea into the market place. Sunday Night at the Palladium and Pink Panther were several of his major accomplishments.

10. Sir Martin Sorrell (1945-) Not had the best of press this week given the big salary. However, so many forget what this man has achieved. In the mid 80’s he bought a little company called Wire & Plastic Products – this became WPP. It emerged as a world-beating communications and advertising business. Annual revenues running into billions and profits approaching £1bn. How many others can say they have done that. Grit and determination are key ingredients of his success. So the press….get off his back, how short people’s memories are!


Gazelles – past and present (part 1)

16/04/2012

There was an excellent article in the Weekend Mail a few weeks ago written by Harvey Goldsmith (entrepreneur and impresario). It catalogued his views on ten of the greatest British Entrepreneurs. I found it to be a smart account of those individuals, past and present business who have  made a profound impact on the UK economy.

The Governments new high growth service targeting gazelle businesses over the coming years will hopefully be the stimulus for creating more of these globally focused organisations. Here is the list and my own view of the insight we can gain from these incredible people:

1.Simon Fuller  – Entertainment Business (1960 -). A man of great vision who sees opportunities grabs them and just gets on with it. Avoids the celebrity limelight a real doer. Stop talking start doing.

2.Chales Dunstone – Mobile phones (1964 -) Carphone warehouse fame, a person with the courage and belief in his business model to take on giants such as BT and Vodaphone. Living proof that a small company can take on a big brand and win. Fortune favours the brave!

3. William Lever (1851 – 1925). The son of a Bolton grocer, with a social conscience. He built Port Sunlight for his employees and Unilever is now one of the biggest companies on the planet. Look after your staff and the rest takes care of itself.

4.John Sainsbury (1844-1928). The core idea that offering a little more quality than your rivals can go a long, long way.

5.Dame Anita Roddick (1942 -2007). Body Shop was set up at a time when more and more chemicals were finding their way into cosmetics and packaging was getting fancier. She swam against the stream and introduced her natural range of products – a global phenomenon building over 2,000 stores worldwide. Dont always follow the pack, have your own mind and think blue ocean

The next five to follow soon.


Discipline must run in parallel with Innovation

19/12/2011

High growth companies are disproportionately innovative to those that are not and whilst I believe creativity is the ultimate source of competitive advantage, I must caveat my views. The importance of embedding a culture to allow free thinking that stimulates new ideas is well documented. However, without control you end up with pet projects, loads of possibilities and hundreds of potential initiatives that absorb time, energy and resource. Large companies have processes to deal with their ideas pipeline, but in smaller high growth businesses the danger is that there is too much innovation and entrepreneurship and not enough control and discipline.

Commercial problems potentially loom when there is too much lateral thinking and lack of order. Jim Collins in Good to Great uses a very powerful phrase – “Disciplined Entrepreneurship”. This embraces the notion of balance – innovative thinking and behaviours being guided within a framework of performance measures and KPI’s.

Too much Discipline – then a disconnection with customers, markets and new possibilities takes place

Too much Entrepreneurial flair – nothing gets done because everyone is bouncing off the walls with great ideas

Successful high growth companies tend to have a disciplined approach to new idea generation and implementation – a form of commercial filter. I often wonder how much smaller high growth companies can teach large corporates about innovative thinking and entrepreneurship. The reverse is also important – how can big companies help ambitious founders gain a better handle on their organisation? Feels like a powerful learning forum!


Global Brands – Did they take part in recession?

30/11/2011

The Autumn statement provided depressing news for many households and entrepreneurs trying to build a future. Running a business is hard enough without listening to Euro crisis problems, poor growth forecasts and a recovery in the dim and distant future. The resultant effect of the Chancellors statement for many will be – baton down the hatches and reduce investment in people development and new ideas. This becomes a self fulling prophecy and usually you get what you think about.

There are always different ways to view the world, we can be a builder or destroyer of our own future. Well my advice is life is too short for two years of life to evaporate, i.e sitting there and waiting for economic recovery to happen, we should embrace a mindset of not taking part in the recession. Scarcity is the mother of innovation and history tells us that some of the most successful brands on the planet started or thrived during recessionary times here are just a few examples:

General Electric – Not only did Thomas Edison set this Company up in the middle of a recession it thrived when the US economy faced collapse.

IBM – Set up in the middle of a US economy slump

General Motors – set up during the US financial crash of 1908 and went on a buying spree when the Federal Reserve was approaching melt down

Disney – really started to take off smack bang in the middle of the Great Depression

Burger King – started just after the Korean war, its founders philosophy being people still need to eat

Microsoft – Started by Bill Gates and Paul Allen in 1975 when the United States was mired in stagflation -the combination of rising unemployment and inflation combined with stagnant GDP

CNN – Started when the Federal Reserve made the decision to aggressively raise interest rates to curb inflation, it caused a “double dip” recession

Apple– Apple got its start in 1975, during another downturn and thrived just after the dot-com bubble burst!

So the message is…Its not all bad news, it’s about having a vision and mindset to create something special and different. Whilst we must avoid putting our head in the sand and thinking all is OK, we must find a balance – place one foot firmly on the accelerator and have the other hovering over the brake!


Coming soon – High Growth Foundation, Silicon Valley

25/10/2011

If the UK is going to become the best place to set up and grow a business then we need to look at great practice. The entrepreneurial capital of the world is the West Coast of the US, Silicon Valley. The UK has the expertise, knowledge, skills and talent to match any part of the world, so what’s holding us back? We need to change our mindset, think big and learn from those parts of the globe that just get on and do it. The High Growth Foundation, founded in the North will lead the charge on encouraging ambitious individuals to release their full potential.

Building on success to date, we will be setting up the HGF in Silicon Valley and encouraging best practice exchange, collaboration and business development. The future of the UK economy depends so heavily on high growth businesses, to get more of them we need a catalyst – hopefully the HGF will demonstrate just what is possible ! Watch this space.

http://www.highgrowthfoundation.co.uk – this Friday


UK Gazelles – Finding it hard to raise cash – why?

20/10/2011

Recent press reports would suggest that our gazelles are finding it harder than other European Countries to raise cash. More than a fifth of companies (many from information and communications technology sectors) failed to get the loan applications approved in recent years. The report which I have yet to find, claims that it provides further evidence of the damaging effects the credit shortage is having on the economy.

Whilst I understand attitudes to funding have changed and the banks have had a severe kicking, I do think we need to look further into the detail. My experience (we have worked with over 3,000 potential high growths!) is that lots of these businesses are just not investment ready and it would be ludicrous to give them cash and indeed subject the founders to PG’s – its for their own good in many instances.

Poorly thought through applications, business models just not viable and inexperienced management teams are also part of the reason for the lack of funds being pushed into the market. Whilst funding is harder to extract, there is cash for well thought through propositions, period. Many of the high growth potential (gazelle types) companies need to be nurtured, mentored and supported – we must look at the quality of the business plans falling onto the desks of VCs and funders, maybe then we would get a better view of the world. My advice to anyone seeking funding is:

1. Can you evidence a viable business model with customers that want to buy what you are offering?

2.Have you got the team in place – thinkers, doers, sellers and controllers

3. Do you have the resources to make it happen and do the financials stack up? More importantly would they stand scrutiny.

4. Can you articulate 1-3 clearly, concisely and convincingly.

If you can’t then dont blame the banks!

 

 

 

 

 


Missing Link for Export Support

16/10/2011

UKTI is encouraging more exporters, unfortunately they are missing a serious bit of the equation. Many studies over the last few years have shown how low going international is on the agenda of many small companies. Trying to find new overseas markets for many is a daunting and a scary place to be. Exporting is more than just finding an agent/distributor or partner – it’s about leadership, management, recognising there is other ways of doing business, branding , people management and cultural alignment.

UKTI delivers fantastic support but it needs to offer a more rounded service that considers getting the entrepreneurs head in gear for going overseas and the broader business implications.

Going international requires a massive investment – not just financially, but time energy and resource. For those who think it is easy, believe me it’s not! You need the right mindset, once you have it then skies the limit – going international is an extension of domestic activity but be very clear on what you are getting into…….


High growth companies actively pursue “customer lock” in strategies

27/09/2011

Ambitious high growth entrepreneurs should spend at least 3 days of their official working week living in the customer’s world. Viewing the market place from the desk is extremely dangerous, being immersed within your industry and the needs of your customers provides real-time market intelligence. This helps to tailor propositions specifically to the wants and needs of your market place; it also supports new product and service development. Gazelles companies create a massive gap between them and their competitors because they deploy innovation and imagination to problems, this inspires and very often leads to development and evolution of propositions that the customer didn’t even know they wanted! They occupy uncontested space. Others will soon start to copy and replicate – your job is to stay one step ahead of the game.

High growth businesses we have studied stay close to their key stakeholders. More specifically, they spend time

  • Looking at the factors that impact their customer’s performance – this provides opportunities to provide new solutions
  • Understanding their customers strategy – this facilitates a partnership working model
  • Looking at how they can help improve efficiencies, reduce costs and enhance performance.

Getting close to the market helps to drive what I term “customer lock in” – that phase of the supplier/customer relationship were there is a true partnership, mutual respect and a genuine win-win. Moving to lock in can absorb an enormous amount of time effort and energy, however the rewards can be big. It also makes it very difficult for competitors to move in and occupy your space. Being embedded means any new entrant would have to untangle lots of relationships, systems and processes to get a foothold. A word of caution – never take relationships for granted and be aware of performance vs. KPIs. Customer complacency represents a real danger zone for businesses. Lock in delivers true competitive advantage.


From Gazelles to Gorillas

02/08/2011

The answers to economic recovery over the past three years has centred significantly on the importance of gazelles – those high growth businesses that deliver sustained 20% growth over a three-year period. These are innovative firms with differentiated products and services that stand out from the crowd, they have strong leadership and clarity in relation to where they want to get to. They are entrepreneurial as well as disciplined in their approach to business.

My thinking has now moved on a little and I have started to create thinking time for another category of important economic contributors – Gorillas. These are very rare beasts defined as “high growth businesses less than 10 years old with a physical presence in at least 3 countries and employing over 500 people”. I think we can get too bogged down in definitions but companies such as JD Sports, Carphone Warehouse, Vodafone, Intel, Skype, Innocent Drinks, Daisy Communications, The Hut Group, Google and Amazon are all good examples of companies that have pursed strategies to achieve global scale – or put another way gorilla style growth.

The rapid evolution of ever improving technology combined with globalisation opens the doors for gazelles to explore the next level of growth. International opportunities such as those of the BRIC economies will see the rise in the number of UK businesses embracing gorilla strategies. With this mind we need to be ready to support these entrepreneurs with the management, legal, international, finance and operational expertise vital to make this happen. This is where the Business Growth Fund launched a couple of months ago has a serious role to play.

The High Growth Foundation is now planning its Companies of Scale Initiative to get this mindset in place. A series of practical measures will be rolled out to set the scene.