I am constantly being asked – what are the ingredients of a great SME coach? There are some very common characteristics that comprise of:
- Business expertise
- Market knowledge
- Functional expertise – finance
- Marketing strategy etc.
These are all very relevant but in my experience there is far more to coaching and mentoring that sits outside just business and management expertise. I have coached literally hundreds of business people over the years as well as running my own businesses – what this experience tells me is that there are human beings with emotions and fears that sit behind the business plan and very often, the façade of success.
Growing a business is a lonely place to be, in many instances the founder and the team have hidden anxieties that relate to mundane yet crucial components to an individuals overall well being. The pressures that come with, for example, personal guarantees required by the bank, small pension pot, lack of savings, big mortgage……many of these lay dormant in the business persons mind because running the business is all consuming and nothing else matters.
For many entrepreneurs achieving a sense of freedom is the very reason they set up and often this freedom ends up feeling like a prison sentence. The old cliché, working on the business rather than in the business is so true – this is what great coaches do. They help businessmen and women take a helicopter view of their organisation and look at the big picture.
Great coaches in my view are a fusion of business expert and Samaritan. They are able to address personal and emotional anxieties as well as the business ones. They have an ability to connect with these issues in a highly practical way. The starting point for any coach is to understand the individual – what makes them tick, what keeps them awake at night, intentions and aspirations. Once this is worked out then the business becomes the engine to fulfill the entrepreneur’s needs and goals. All too often the business runs the individual – best coaches turn this round, sort of a Samaritan.
In recent years a number of investment and financial readiness initiatives have been launched to the SME world, these have been designed to raise awareness of what businesses need to do to raise funding. Whilst these have a place in supporting enterprise, many have failed to take into account the time, effort and resource needed to be “really prepared”. Securing money to drive growth whether debt or equity is more than crafting a well-presented business plan and forecasts. Many of the challenges linked to fund raising lie in an organisations fundamental operating systems, management team and business model. A significant number of entrepreneurial SMEs fail to display good housekeeping. This makes them unattractive to potential funders.
My experience is that many entrepreneurs are just not ready to pitch to an investor or bank when the need for funding is identified – often they require a sort of MOT well in advance of their pitch. In many instances structural changes are needed within a SMEs operation – when solid foundations are in place a robust case can be confidently proposed to an investment or relationship manager. This puts key decision makers within financial institutions in a stronger position when they, in turn, make their case to the relevant credit committees.
Entrepreneurs can lose credibility with investors and banks because their business plans cannot withstand scrutiny of a due diligence or credit appraisal process. I believe there needs to be a higher level of awareness and education within the SME community as to what banks and the broader investment community need to see within a financing proposition. SME’s should never forget that the credibility of a financial forecast is built on the effectiveness and robustness of its systems, people, processes and service/product propositions. These latter issues seem to somehow often get overlooked. A failed pitch can close the door on investors or banks for months and in many instances, years.
Broader and closely related issues to fund raising would suggest that many entrepreneurial businesses often:
- Lack absolute clarity of strategy, vision and planning
- Spend too much time in the business and not on it – fail to look at the big picture
- Lack effective management teams, this puts funders on the back foot when it comes to assessing an organisations capability to deliver the plan
- Become slaves to their business and lose sight of the growth plan
- Hallucinate – their vision/strategy is a wish list
- Have financial systems and controls which are not fit for purpose
- Fail to build relationships with their funders and last minute request for funding, often when its too late, is commonplace
Because of the entrepreneur’s lack of awareness of what funders want, financial institutions have come under significant attack for poor lending strategies. Whilst this maybe true in some cases, my experience would indicate that there is no lack of funds for well run businesses, commercially viable ideas and sound new ventures supported by a strong management team. The gap often lies in what the entrepreneurial SME fails to understand about both the process and the quality of their business model. Growth hungry entrepreneurs should spend more time “living in the funders world”.
It seems very much the rage at the moment for companies to hire Non Executive Directors (NED). I am a big fan of these “outsiders looking inside“. They provide wisdom, guidance, help to raise the bar and introduce more robust systems and processes, help leaders make decisions and support change. In many instances an NED can help to open up new doors to finance and potential customers – help in the transition of growing up. If you are pursuing VC funding or PE finance then having a NED is often part of the deal.
One observation would be that many young companies appoint NEDs too early on in their cycle. They view them as the saving grace and the magic wand with all the answers. The reality is young fast growing companies should initially seek out a mentor or experienced person and trial the relationship before Companies House papers are signed. There are many individuals out there searching for NED trophies, it almost becomes their barometer for success – food for the ego!
My message to young growing companies who are seeking their new best friend, the NED, is be sure they can add value, be clear on where they can take you and most of all don’t GIVE AWAY equity, people either buy or earn a stake in your company.
Anyone involved in sales and marketing will know about features and benefits – a legacy of the 70′s/80′s and 90′s school of selling. Whilst the underpinning principle in my view is sound – today we find customers are more discerning, wanting for far more, often for less! Over the past few years I have been exploring how the old school of selling (F & B) can be fused with a more powerful channel to communicating propositions – this has led me to adding impact and evidence to the old ways of doing things. I believe that when we combine F and B with I and E an extremely intense message is emitted to customers. Next time you are in a sales situation think about:
Impact – can you validate to customers: return on investment (ROI), cost savings, efficiencies, when you can demonstrate impact in terms of facts and figures the credibility of your proposition is just positioned on a new level – for example if you are an advertising agency, can you show the impact of your services on the clients budget of £X will give a return of £5X
Evidence– telling the customer that you are great is superficial and generic – in the case of the advertising agency the evidence should be – the names of three clients that have benefited from the services and indeed the added value brought to bear. Such an approach to selling is clear – there is no ambiguity.
I have observed many businesses embrace this F.B.I.E model of selling and proposition marketing . It can be applied to telesales, web communications, pitches and any other form of business development. When you think in terms of FBIE your messages become crisper and to the point – more importantly they will resonate with the customers world – it shows you are bothered and its not just about getting a deal. Try it – it really does work!
Train yourself or your sales team on John’s ‘Principal of Selling’ with The Winning Sales Academy >>>
The term “thinking outside the box” is a constant irritation for me. Easy to say, hard to do – how do you do it? Get to the route cause!
Don’t fall into the trap of routine. Repetitive behaviours will deliver a mindset that lacks vision, imagination and creative spirit. When we do the same things day-in day-out we establish a routine, this state of mind both inhibits and prohibits new possibilities. We find that the same old problems surface and bizarrely we think that by doing the same thing over and over again the results will be different. We must be aware of our habits as they become hard wired into our daily schedule. The manifestation of routine is that we experience a sense of monotony, feeling of being stuck in a rut, poor self-confidence, low energy levels and loss of purpose and direction.
Everyone experiences these feelings at some point, however we can take some simple steps to rewire our thinking. Emphasis must be placed on constantly searching for stimulus – things that will disrupt habitual behaviour, strengthen our creative muscles and deliver a freshness of thought;
Alternative perspectives – constantly look at your challenges from different angles – ask yourself “how would your role model address the issue?”
Remove yourself – from the daily routine and spend one day a month do something completely different.
Connect with nature – spend time in the open air and appreciate the wonder of the countryside. Combine this with regular exercise, it provides a boost to our energy levels. It also helps us to value our existence.
Don’t Think – don’t pre judge the outcome of any situation. Just observe and detach yourself from comment. By not thinking you clear your mind.
Take a look – observe what your peers do and share experiences with them. Wherever possible engage with people from other cultures, religions and regions of the world.
Five simple practices will act the fuel for fresh thinking. Doing away with routine is a liberating experience. It energises us, and keeps us motivated to perform at high levels.
For the last few years I have been trying to create a simple model that allows individuals to assess the commercial viability of business opportunities and innovative ideas – irrespective of where this idea is created (university lab, industrial R&D department, current employer or our bedroom) I think there are three primary drivers that need to be assessed and considered when evaluating new ideas. Here are my thoughts:
Commercial drivers (CD) –
who is going to buy the idea/service/product and how do you get it to market?
Human factors (HF) –
who is going to make it their job to get it out there – and is there a team that can make it happen?
Resource Issues (RI) –
have we got the finance, IT, plant and equipment along within physical resources needed to make it happen?
I score each idea on a 1-10 scale in each area. (I have some more detailed sub questions to each area and I have over simplified the above).
I work on the basis of successful mind to market – creating a sustainable revenue stream is down to CD x HF x RI – top score is 1,000 (10 x 10 x 10). In a very crude way it gives me a feel for whether I want to pursue an idea or not. If any score is zero then its back to the drawing board.
So much emphasis is on CD……however, HF needs to be given the attention it deserves!!
Many individuals have big goals but only few put in the energy and effort to attain them. Why is this? Actions speak louder than words and to be grounded for a second, big goals can sometimes feel like an awesome undertaking. That’s when the goal just remains a dream.
Breaking the £1m revenue target, implementing a new quality system, opening up that new export market or whatever it means to you needs careful planning and iteration.
Patience, routine, trial and error and action are important contributors to passing across the finishing line – you just can’t leap to the end point, that’s why so many just give up.
So what tools can we use to assist us get what we want? I was inspired by the story of what made GB Cycling world class and the envy of other nations . Their coach referred to the “aggregation of marginal gains” as being central to their success. In other words small improvements that all add up to a magnificent performance.
My interpretation of this is:
1. Be clear about what it is you are looking to achieve and and nail a measure and timescale to it
2. Put in place the plan of the milestones and improvements that need to be reached and by when
3. Train like crazy and put in the activity needed to get there – KpI’s (that awful term – but paramount to monitoring where you are – be clear on what they are as well)
The GB Cycling philosophy of marginal gains can be of massive use to us in business. The key lesson is that small nudges in the right direction delivers a winning result. Get on your bike and pedal – if you fall off, get back on and pedal faster!