The 6p Café – and the question You Should Really Ask


Just a note before I start this week: I’ve written more than 300 posts on this blog, but last week’s was much the most personal. I’d like to say thank you for all the comments and replies: some of them were touching, some heartfelt and some even more personal than the original post. One in particular buoyed me for the whole weekend: so thank you again.

Anyway – on to business. And a simple question: how much did you pay for your last latte? I’d guess anywhere from £2.40 to £2.90: that’s the going rate and it is, of course, completely ridiculous. Invest not-all-that-much in the right equipment and you can stay in your kitchen and make a coffee that’s equally good for a fraction of the price.

But that’s not the point is it? Because as we all know, Nero, Starbucks and your local coffee n’ cake shop don’t sell coffee. They sell something else entirely.

…And now a café has started charging for it.

Let me introduce you to Ziferblat, a café in Manchester that charges 6p a minute. That’s right, 6p a minute. Stay as long as you want; eat and drink as much as you want and use the Wi-Fi. 30 minutes costs £1.80 and an hour is £3.60.

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At first glance that seems remarkably cheap: why do you need to pay rent on an office? An eight hour day at Ziferblat costs £28.80 with no need to go out for a sandwich at lunchtime. Well, they make a profit and the chain is expanding. But it’s not their balance sheet I want to discuss; it’s their willingness to look at an established concept in a wholly new way.

I have plenty of my meetings in various Costas, Starbucks and Neros around North Yorkshire. Am I paying for the coffee? No. That’s the last thing on my mind. I’m paying for convenience, for somewhere to meet, for thirty minutes with a friend, Board member or potential client.

I’m buying the coffee in order to rent a convenient meeting space for thirty minutes. The owners of Ziferblat have recognised this: as one of them says in the video, “Everything is free, except the time that you spend.”

Some of you may remember a post I wrote early in 2014: it was about American restaurants charging different prices for their food depending on when you ate. Re-reading the original piece – and thinking about ‘the 6p café’ – that still seems entirely logical to me.

The reason I make these points is simple. We’re now well into ‘making plans for next year’ season and there’s a fundamental question to ask yourself: what do I really sell?

Do you sell coffee? Or do you sell the convenience, the surroundings and the meeting place?

Quite rightly, you’re now turning the question round and asking, ‘Fair enough, Ed. What do you really sell?’

Let me answer that, because it illustrates the point exactly.

Do I really sell 1 to 1 meetings and peer-to-peer coaching? No, of course I don’t. So let’s look at the reasons entrepreneurs ‘buy’ TAB York:

  • They want to solve a problem and/or address some pain
  • They don’t want to feel isolated/lonely any more
  • They want a fresh perspective on their business
  • They’re stuck in a rut
  • They know they’re ready to ‘take the next steps.’ But they don’t know how to do it, and may not even know what the next steps are

So TAB York sells solutions to specific problems, an end to loneliness, a new way of looking at problems and opportunities, motivation and – as I wrote two weeks – a glimpse of what life and business could be like: ‘permission to dream’ as I termed it.

Clearly, TAB York sells different things to different people – and that doesn’t change even after someone becomes a member. The reasons why entrepreneurs continue as Board members can be very different to the reasons why they joined:

  • The Board meetings are an insurance policy against things going wrong
  • The routine of the monthly meetings forces members to work ‘on the business’ not ‘in the business’
  • It’s the only place they can really talk about their business with people who absolutely understand…
  • Who’ll give absolutely impartial advice…
  • And who care about your success and the success of your business

So in no way am I selling the monthly meetings: I’m selling reassurance, a framework, and the experience, objectivity and commitment of the other Board members. And ‘commitment’ is the right word: members of TAB York have an emotional investment in each other’s businesses.

All the above points have come from Board members over the years – and yes, when entrepreneurs ‘buy’ for so many reasons it makes it difficult to define what my colleagues and I ‘sell.’

The same may very well be true for you and your business. But take your time to define exactly what you do sell – and don’t be afraid to emulate ‘The 6p Café’ and think a long way outside the box. It’s a really worthwhile exercise and the answer may well surprise you – and have a significant impact on next year.

In fact it’s something we could cover at a 1 to 1: maybe over a meal. I’ll drop an e-mail to the Star Inn the City and offer them 6p a minute…

Should We Worry about Germany?


No, I haven’t travelled back to the 1930s. Or to extra time in 1966

But in this era of increasing globalisation – and especially in the aftermath of the Brexit vote – ‘should we worry about Germany’ is a valid question. Specifically, should companies in North Yorkshire worry about European competitors poaching their top talent?

There was an interesting – and disturbing – article on the BBC business pages earlier this month. The gist of it, drawing extensively on quotes from the fund manager Neil Woodford, was that the UK is “appallingly bad” at funding tech start-ups. Small companies aren’t receiving the funding they need to grow: “We’ve been appallingly bad at giving these minnows the long-term capital they need,” said Woodford.

So if start-ups can’t get the funding and support they need in the UK, where will they go? And will talented young people become disillusioned and be tempted abroad?

There’s been no shortage of articles recently championing Germany – and Berlin in particular – as the likely new ‘start-up capital of Europe.’ ‘Berlin to usurp London’ as Geektime put it. No doubt about it: the coming years are going to be exciting for my TAB colleagues in Berlin: ‘Guten Morgen’ to Frank, Thomas and Ralf.

But it’s not just Berlin: the website EU-startups lists the top 15 start-up hubs in Europe: the UK has just one on the list and – post-Brexit – the situation won’t improve.

The anecdotal evidence is there as well: every friend I have with older, university educated children says the same thing. The children all voted Remain, and they all see their future in the UK as a part of Europe, not in the UK as an isolated country. “Two days after the vote he came home for the weekend and told me he wanted to live in Berlin,” as one person lamented to me.

So could the UK – and more pertinently could you – start to lose top talent to Europe?

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It’s not a danger we should under-estimate. Taking Berlin as an example, the arguments in favour of moving are well-rehearsed: the cost of renting around half what it is in London and a pool of talent from all over Europe. And Germany is by any standards a remarkably successful economy – a trade surplus of €20bn or thereabouts month after month after month. Some parts of the Eurozone may be struggling but the German ‘engine’ keeps on running.

And they’re enterprising: soon after the Brexit vote many of London’s start-up technology companies began receiving letters from Berlin. A promotional bus from Berlin drove round the streets of Shoreditch. As Berlin senator Cornelia Yzer put it: “We’re a vibrant city, we attract talent from all over the world. Maybe it’s the right location for a London based company … to make sure they’re part of the EU in future.”

London today, York tomorrow? After all, if you’re going to be part of ‘Generation Rent’ you might as well be paying a lot less rent…

I don’t think so.

York remains an outstanding place to start – and build – a business. As we’ll see at York Business Week in November, there’s a real buzz about the place, a real sense that anything is possible. In many ways the atmosphere in York reminds me of the almost tangible feeling of potential in Denver.

And York has plenty to offer start-ups with The Hub, The Catalyst and the business support available at the Eco Centre.

But talent is scarce – and in greater demand than it’s ever been. Some businesses in York have to fight against the ‘lure’ of Leeds, never mind Berlin!

So the onus – as ever – is on you. Another buck stops on your desk…

The best way to recruit and retain the best talent – whatever the competition – is to lead. That means setting out a clear direction for your company, involving everyone, delegating, recognising your team’s achievements and, above all, making sure they all buy into your vision.

Do that successfully and the burghers of Berlin can drive as many buses as they like round the York ring road!

Time to Dump the Hairdryer?


Anyone who’s ever watched a game of football will have heard of ‘the hairdryer’ – the phrase coined by Mark Hughes to describe the dressing room rages of former Manchester United manger, Sir Alex Ferguson.

As Wayne Rooney said in his book, ‘My Decade,’ There’s nothing worse than getting the hairdryer. The manager stands in the middle of the room and loses it at me. He gets right up in my face and shouts. It feels like I’ve put my head in front of a BaByliss Turbo Power 2200 … It’s hard for me to take and sometime I shout back. I tell him he’s wrong and I’m right.

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Well, let me have a pound on who won that particular argument – but top marks to Wazza for getting the product endorsement in there…

So why am I writing about football in England when I’m still out here in Denver? Especially when the Broncos have started their pre-season games and anyone with any sense is at Sports Authority Field

Simply because a day old copy of the Times reached me, that’s why. And once I’d read about Newcastle’s latest victory and inevitable return to the top flight (being in the USA breeds confidence…) I turned my attention to an article by Matthew Syed.

I’ve written previously about Syed’s book Bounce – the Myth of Talent and the Power of Practice. I didn’t agree with the central thesis of that book, so as I started to read his article in the Times I was getting ready to take the opposite view again.

But I think he was spot-on: and I think there are valuable business lessons in what he had to say.

The title of Syed’s article was, ‘Why a manager’s touchline rantings could be doing more harm than good.’ He’s writing about conventional wisdom and yes, the accepted wisdom is that football managers have to rant – and get the hairdryer out. ‘What’s he doing? We’re two down and he’s just sitting in his seat!’ ‘Well, whatever he said at half-time has certainly worked. They’re a different team in this half…’

But all the evidence shows that ranting from the sidelines doesn’t work. Syed cites children’s sport – where the coach often barks a stream of instructions, ‘despite the empirical finding that this undermines the ability of [the] children to think for themselves and slows learning.’

According to Syed, the conventional wisdom in football is almost all wrong – and he contrasts it with Formula One, a sport which – in the words of Paddy Lowe, Mercedes technical director – there is no conventional wisdom and “standing still is tantamount to extinction.”

Like football, business is riddled with conventional thinking and accepted practices. Why are we doing it this way? Because we’ve always done it this way.

I’ve been so busy in Denver that I’ve had to push my ‘key things I’ve learned’ post back to next week. But there’s been one theme running through every conversation I’ve had and every presentation I’ve attended: with the business world constantly changing, ‘because we’ve always done it this way’ is just about the most dangerous belief there is.

Out here in Denver you can almost feel the ‘wind of change’ blowing from Silicon Valley. The Denver/Boulder region has even been talked of as the next Silicon Valley. There’s a palpable start-up buzz in the air and no business will be able to rely on ‘we’ve always done it this way.’

Matthew Syed ends his article with a compelling phrase; ‘It is innovation, not convention, that holds the key to success.’

He’s absolutely right. ‘If you always do what you’ve always done…’ is more true than it’s ever been. And now it appears that the result will be the same if you always do what everyone else has done as well.

Two words are on everyone’s lips in Denver: ‘Why not?’

Why can’t it be done a different way, a better way?

Whether it’s sport or business the old beliefs and the accepted wisdom are being challenged and rejected. So don’t be afraid to ask yourself ‘why not’ over the coming months – and expect the phrase to echo round the TAB York boardroom tables.

Why is Starbucks so Successful?


Last week the blog made a simple claim – you don’t need to be outstanding to be successful – and I used the Howard Schultz/Starbucks story for much of the background.

So is Starbucks outstanding? If you use coffee as your yardstick, then the answer is a resounding ‘no.’ I doubt that more than five people reading this blog would name Starbucks as their favourite place to grab a coffee. Give me thirty seconds and I can list half a dozen places where the coffee/cake/ambience/service – or all four – are better.

But those half dozen places are all one-offs. They’re successful – but on a small scale. There are not 23,043 of them around the world, up from 21,366 last year and 19,767 in 2014. In 2015 842 of those Starbucks outlets were in the UK, split more or less evenly between company-operated and licenced stores. Revenue and profits continue to grow strongly.

By any standards, that’s a success story. If ever there was a company that knew where it was going and paid attention to its KPIs, it’s Starbucks. Remember, we’re not taking about apps, iPhones or technology here: we’re talking about cups of coffee.

But why is Starbucks so successful? Ask Google and the search engine returns 12.4m results, so I’m not the first person to wonder.

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…And there are plenty of articles as well, many of them extolling exemplary qualities. Start small, expand carefully. Leadership, be efficient, training… But those are simply good management in any business. Based on my own career – hundreds of meetings in hundreds of coffee shops – here are three Starbucks qualities that really stand out for me.

Remorseless attention to detail. Howard Schultz is famous for this – and if you want to read a case-study in getting the little things right, read this book by journalist Taylor Clark. Let me pick up on just one example: the tables are round. Why?

So that if you’re on your own, you don’t feel awkward. Someone has to arrive first for the meeting – and even a 1:1 needs a table for four. But sitting at a rectangular table with three empty chairs feels downright awkward. You can’t put your finger on why you didn’t have the meeting in the other coffee shop; Starbucks just felt more comfortable.

This attention to detail extends to the pictures, the length of the counter, the height of the window seats. If genius is an infinite capacity for taking pains, then there’s a lot of genius in the layout of a Starbucks.

Secondly, consider the cups: short, tall, grande, venti and trenta. Starbucks doesn’t do regular, it doesn’t do medium. Supposedly three out of the five cup sizes are in a foreign language to cater to the ‘collegiate’ needs of Starbucks’ clientele. Howard Shultz wanted to foster a feeling of belonging, of exclusivity. He wanted Starbucks to be an experience, in the same way that Disney was an experience.

Lastly, Starbucks innovates. Use of first names when you’re ordering your coffee; among the first to adopt mobile payments and Starbucks has worked with PayPal to create its own mobile payment app.

So small wonder that there are more than 23,000 outlets around the world: the coffee may not be better in Starbucks, but the relentless attention to detail, appreciation of their customers and willingness to innovate has produced one of the world’s best known and most valuable brands, with a market capitalisation of $85bn.

If it works for Starbucks, it can work for you: damn it, all they do is sell coffee and cake…

You Don’t Need to be Outstanding


…Or ground-breaking. Or develop a wonder-drug. Or an app that no-one’s ever dreamed of before.

If you want to be successful in business, you don’t need to do any of those things.

You just need to be 10% better than your competitors.

And now let’s travel back in time. The year is 1985. The place is Seattle. A husband and wife are having a conversation…

Wife: This is madness. I’m pregnant with our first child and you want to throw in a good job and start a business based on a trip to Italy!

Husband: Yes

Wife: And how much do you need?

Husband: $400,000

Wife: Do we have $400,000?

Husband: You know we don’t

Wife: So you’re going to borrow the money. You’re going to risk everything – including the future of our child – because you want to open a coffee shop. Like the world needs another coffee shop. For God’s sake, Howard, you have a good job with Starbucks…

If you haven’t guessed, the husband was Howard Schultz – then just about to sink $400,000 of borrowed money into Il Giornale, a coffee shop based on a trip to Italy – where they sold excellent expressos, where coffee shops acted as meeting places and where there were 200,000 of them. Two years later the original Starbucks management decided to focus on Peet’s Coffee and Tea and sold its Starbucks retail units to Schultz and Il Giornale for $3.8m. The rest, as they say…

But in many ways, Mrs Schultz was right. The world didn’t need another coffee shop.

The world didn’t need another operating system either. Windows? IBM, Atari – about half a dozen companies already had operating systems.

Neither did it need another social network. It already had Friendster and My Space.

And with seven search engines already operating, the world most certainly didn’t need Google…

But Howard Schultz – along with Bill Gates, Mark Zuckerberg, Larry Page and Sergey Brin – knew he could do it better.

And that’s true of 99% of the business successes I’ve seen. For every one ‘why has nobody thought of that before’ idea, there are 99 businesses that have succeeded by simply doing it better.

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Unless you’re a creative genius, the very-high-chances are that the business idea you’ve just had has already been thought of. In fact, as soon as you’ve had the idea you’ll find that everyone is doing it.

That is not the time to be discouraged. Exactly the opposite: all you’ve done is proved that there’s a demand for your idea. Now, you simply need to go out there and consistently deliver a better product or service.

Starbucks isn’t significantly better than its rivals. But – as I’ll describe next week – the remorseless attention to detail that Howard Schultz ingrained in the company’s DNA means it is that crucial 10% better in several key areas.

Let me finish by returning to that conversation between Mr and Mrs Schultz. The numbers and the business may be different, but I’ll wager heavily that a lot of people reading this blog had exactly that conversation.

And no – the world didn’t need your business. But like Howard Schultz, you had the drive and the vision to believe that you could be 10% better: the 10% that makes all the difference.

The world didn’t need another peer-to-peer business coaching company either. After all, anyone can get together with a few friends and create a mastermind group. Just make sure the group is a good fit, commit to meeting each month, find someone to coach you and you’re away…

Except it’s not quite that easy.

Like Starbucks, Google and Facebook, I absolutely believe TAB does it that crucial 10% better. It’s what makes our business model so successful – and if you’re not a member of TAB York, it’s what could add the vital 10% that would make all the difference to your business.

Good Decision, Bad Decision, No Decision


Over the very-nearly six years I’ve been writing this blog I’ve quoted some of the best business thinkers of our age. I’ve drawn on their wisdom, their experience and their recipes for success. And without exception, there’s been one thing they’ve all agreed on.

Action.

Especially in your decision making.

As that deep-thinking business guru Tony Soprano put it, A wrong decision is better than indecision.

You can correct a wrong decision. You can put it right and move on. Indecision? You haven’t a hope. Paralysis by analysis as the old saying goes.

The late (we think) and much missed Tony is supported by any number of real life businessmen. Here’s Scott McNealy, the co-founder of Sun Microsystems:

The best decision is the right decision. The next best decision is the wrong decision. The worst decision is no decision.

…And Anthony Robbins, Awakening the Giant Within:

At any moment the decision you make can change the course of your life forever.

Obviously, I agree with them. It’s what I’ve preached for years. Nothing happens without action. Soprano, McNealy, Robbins, Reid – united as one.

…And apparently, completely wrong.

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Along comes business psychologist, Professor Adam Grant. He sets out his thesis in Originals: How Non-Conformists Change the World.

Grant says that procrastinating – putting off difficult decisions or delaying starting a project – can actually open an entrepreneur’s mind to more creative thinking and “lead to a more opportune time to launch a new product. Procrastination lets you have time for ideas to percolate … and new technologies to emerge.”

I’ll absolutely concede that non-conformists see the world differently. Yes, I agree that giving yourself time to think, keeping an open mind and asking the right questions are all important. But you cannot wait for ever. As Norman Schwarzkopf says in his autobiography, It Doesn’t Take a Hero, “when you’re placed in command, take charge.”

Ask most of my generation who’s ‘changed the world’ the most and I’d guess that a good percentage would say Steve Jobs. Now no-one would call Jobs a conformist (especially if you’ve seen the biopic…) but he emphatically didn’t change the world by not making decisions.

And, clearly, he didn’t wait for new technologies to emerge. You simply cannot do that today. We’re now living in an age where a ‘new technology’ emerges every week. If you put off making decisions because you’re waiting to see what happens with technology you’ll sit at your desk until it’s time to retire, watching an endless stream of new apps whizz past you.

There are almost as many different ways of being successful as there are successful entrepreneurs. That’s one of the great beauties of business. But I simply don’t believe that avoiding decisions is one of them. It may be superficially attractive – and it’s certainly easy. But it’s also potentially fatal for your business.

Fortunately, there’s an antidote – to both the wrong decision and no decision.

I refer to your colleagues round the TAB boardroom table. They’ll do two things: firstly their collective wisdom and experience will go a long way towards helping you make the right decision. Secondly they have this really irritating habit of holding you to account – of saying, ‘So what’s happened in the last month?’

‘Nothing’ isn’t really the answer they’re looking for. But to date no-one has tried, ‘I’ve been sitting at my desk waiting for new technology to emerge.’ I’ll look forward to that one. The replies should be spectacular…

Whose Boat are you Trying to Float?


According to data from the US marketing agency Deep Focus, four out of every ten millennials would rather engage with pictures than read.

What? They’re suggesting that the most educated generation in history would rather look at the pictures you’ve just texted to them than read what you’ve written? That they’re more interested in an emoji than your carefully crafted prose?

Apparently so.

But let’s just take a step backwards. Because I’m willing to bet that a great many people read that first paragraph and thought, Hang on. What’s a millennial? It’s someone young isn’t it? Definitely younger than a baby boomer…

So before we go any further, here’s Ed Reid’s cut-out-and-keep guide to millennials, boomers and every other group that might be important to your business:

Maturists were born before 1945: they’re the generation of rationing, rock n’ roll and defined gender roles – particularly for women

Baby Boomers – 1945/1960: the Cold War, the Swinging Sixties, moon landings – and now very much family oriented

Generation X: born between 1961 and 1980, they’re marked by the fall of the Berlin Wall, Thatcher, Reagan and Gorbachev, early mobile technology – and the divorce rate rises

Millennials/Generation Y – 1981-1995: 9/11, social media, the invasion of Iraq – and the generation that has produced many of our digital entrepreneurs

And finally, Generation Z: born after 1995 they’ve been brought up with global warming, the economic downturn, cloud computing and WikiLeaks.

These terms are largely American, but the marketing message they bring with them is every bit as relevant in the UK. The infographic I used for the research is fascinating: the difference in attitudes to previous generations is startling – and marketing messages will need to reflect that.

But let me change tack for a minute, and reference another article I read on the same day as the infographic. This one featured the Kiss Navy. I’ve quoted the business acumen of Gene Simmons previously on the blog, and now Kiss have added an annual cruise round the Caribbean with 2,300 of their fans.

As the headline suggests, there’s an ‘unstoppable growth’ in the market for themed cruises. You can cruise down the Danube with the National Rifle Association, or spend your days afloat dressed as a Star Wars Stormtrooper. Want to book? Here’s the link.

What struck me as I looked at the infographic and contemplated cruising round the Caribbean listening to Detroit Rock City was how they meshed together to deliver one message. And how important that message was for all our businesses.

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Knowing your customer has always been important, but today it is more important than ever. You can reach a far wider geographical audience – and you can also target a specific niche much more precisely: the analysis and market segmentation that’s almost instantly available now (and which is very often free on social media) is something you have to use.

You also have to communicate with that audience in the right way – which brings us full circle to four in ten Millennials preferring pictures to words. You have to know your audience, and you have to know the story they want to hear.

Why? Because yes, modern technology means you can reach a much wider audience: but it also means that far more competitors can reach your customer base. The days of putting your product out there and hoping someone wants it are gone and they’re never coming back. Sadly, five minutes walking down most high streets will confirm that.

But if you get it right – if you discover your niche and tell the right story – then the rewards can be spectacular.

Are You Selling Sugared Water?


Last week I was reflecting on the American Presidential race and the nature of leadership:

The title doesn’t make you a leader: neither does the biggest office or the reserved parking space. What makes a leader is the ability to bring your ideas to life – to paint a picture of the future your team can see and believe.

Let me continue that theme this week – and take a more detailed look at the one quality all great leaders have in common. Vision.

We live at a time when the future is more uncertain than ever, whether it’s economically (slowdown in China, Brexit), politically (US election, tension everywhere you can think of), socially (refugee crisis) – or the constant and ever-faster pace of change in technology.

Predicting the future is almost impossible.

And yet there are some astonishing success stories in business. The famous quote from Robert Kennedy is more relevant than ever:

There are those that look at things the way they are and ask why? I dream of things that never were and ask ‘why not?’

So did Mark Zuckerberg when he wondered if his Harvard dating app couldn’t go a step or two further.

So did Pierre Omidyar when he wondered if there wasn’t a better way of buying and selling and founded eBay.

So did Travis Kalanick and Garrett Camp when they wondered if the traditional taxi business might be due for a shake-up and founded Uber.

Jonathan Swift – taking a break from Gulliver’s Travels – famously wrote that ‘vision is the art of seeing things invisible.’ That’s what Zuckerberg & Co did: they saw things that were invisible to everyone else.

And that’s what Steve Jobs did in 1983 when he asked John Sculley, then the President of Pepsi-Cola, his famous question: Do you want to sell sugared water for the rest of your life, or do you want to come with me and change the world?

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Let me pause, and look at the other side of the coin for a moment. Let’s take one example of leaders without vision. I’m prepared to wager that the vast majority of people reading this blog have owned a Nokia mobile phone. How many of us own Nokias now?

Ten years ago the word Nokia was synonymous with the mobile phone. Does anyone know what the company does today? Did the company’s leaders have a vision of the future? I seriously doubt it. As the Harvard Business Review said, “they were acting like leaders – reassuring, calm, confident, giving fine speeches – [but they] were not being leaders.” And they woke up one morning to find everyone holding an iPhone or the latest Samsung.

What are the implications of all this for our businesses in North Yorkshire? That in our changing world leadership and vision is more important than ever. That while you may well make money selling sugared water, real and lasting success comes from seeing – and realising – your vision. To quote the Business Review again, “a leader’s fundamental role isn’t merely to perform the same tasks as yesterday, just more efficiently: it is to re-define the idea of performance entirely.”

The role of the leaders isn’t to take power, it’s to give power. It’s to create a vision, a purpose, that’s so exciting that your team can’t help but buy into it – then you give them the power to achieve. And suddenly you’re no longer selling sugared water – you’re changing part of the world. As the old cliché goes, you’re not predicting your future, you’re creating it.

…And as another old cliché goes, ‘All work and no play makes Ed a dull boy.’ So with the half-term holidays looming the blog will be taking a break next week as we head for the ski slopes. I’ll be back on Friday 26th looking at a darker facet of leadership – coping emotionally when the ship is heading for the rocks…

Bad Habits, Bad Decisions


I read a great article in the Harvard Business Review recently: 9 Habits that Lead to Terrible Business Decisions. If you haven’t time to read the article in full, here we go with a whistle stop tour of nine deadly sins that I’m absolutely certain no member of TAB York ever makes…

  1. Laziness – a failure to check facts and gather new information: relying on past experience and – as the financial services industry might say – expecting past performance to be a guarantee of the future
  2. Failing to anticipate the unexpected – as I wrote last week, ‘don’t think it can’t happen because it can.’ And these days it increasingly is happening. You may have had a great idea, it may excite you beyond measure – but you still need to ask yourself, ‘what if…’
  3. Indecisiveness – with your colleagues round the TAB table behind you I hope this never happens, but sometimes the best decision is simply to make a decision
  4. Staying locked in the past – “we’ve always done it this way.” “Better the devil you know.” As you know I’m very fond of [slightly] misquoting Robert Kennedy: “see things as they could be and ask ‘why not?’’’
  5. No strategic alignment – no decision can be taken in isolation: it has to fit in with your long term goals. I’ll come back to this one, as it is so important.
  6. Over-dependence – no decision can be taken because X is waiting for Y who’s not sure because he’s waiting for Z. Just remember, the leader’s job is to lead, and sometimes that means not waiting for everyone
  7. Failure to communicate – entire forests have been wiped out by the amount of books, papers and essays written about the importance of communication. And yet still people don’t do it.
  8. Isolation – this may seem like it’s the opposite of over-dependence, but sometimes you do need to consult. You just need to get on and do it quickly.
  9. Finally, lack of technical knowledge. I couldn’t agree more: today the person with the right technical knowledge may be a 23 year old coder who’s been with you for six months. Knowledge is no longer the preserve of the boardroom and good leaders know there are times when they simply have to get out there and learn.

Let me go back to a couple of those points – no strategic alignment and failure to communicate. No major business decision should stand alone: every decision has to be part of your long term strategy – and move you towards accomplishing your long term goals. Everything should flow backwards: this is where we want to be in five years’ time. Fine, these are the decisions we need to take now to help us get there. And if the decision you’ve just taken isn’t helping you get there, you almost certainly need to re-consider it.

And as we’ve discussed many times on this blog, communication is the key to all things – not least because that 23 year old coding genius may well spot a flaw in your decision. You’ve got to take the team with you and, increasingly, you need feedback and expertise from the whole of your team – but they can’t do that if they don’t know what you’re doing or what you’ve decided.

I was talking to one of my Board members yesterday. He made the point very forcefully that some of the best ideas in his company come from the youngest and newest members of the team. Sadly, many businesses still have a ‘serve your time and then we’ll listen to you’ culture. Make sure yours isn’t one of them, because ‘years spent’ no longer equals the ideas, knowledge and insight you need in a changing world.

As the old saying goes, ‘the best meetings are held at round tables.’ Everyone’s opinion matters; everyone’s ideas are worth listening to.

I Have Seen the Future…


Scene One: A car park outside a hotel on the York ring road. A man and a woman, Neil and Sophie, come out of the hotel. They’re both carrying a leather case. Possibly it contains an iPad, or something of similar size.

 

Sophie:          Ed was on form today…

 

Neil:                Unbelievable. How can anyone have that much knowledge? Scanned straight through that proposal of ours.

 

Sophie:          What was it? Twenty pages?

 

Neil:                Thirty six. Full of really complex technical data as well.

 

Sophie:          It’s relating the proposal to all the previous experience that staggers me. Honestly, Neil, I thought I’d reached the age where not much impresses me, but you put a proposal in – a business plan – and two minutes later Ed’s analysed it, compared it to about a thousand other businesses and told you the strengths and weaknesses. TAB is staggeringly good value for money.

 

Neil:                Not like the old days, eh?

 

Sophie: (laughing) You can say that again. I mean, I liked Ed Reid. He was a decent bloke. But the difference in my business since they replaced him with Edwina…

 

They shake hands and climb into the back seat of their cars. They can be seen speaking some instructions. The cars start up and drive out of the car park.

 

If the blog is still around in ten or twenty years’ time that’s what you might be reading. Like Sophie, I thought I’d reached the age where not much impresses or surprises me – but the other day I came across this story on the BBC news site.

I had to read it twice to make sure it wasn’t a hoax. But no, the story’s real and the implications are enormous – for all of us. I’ve often written on the blog, ‘don’t think it can’t happen because it can.’ Amelia has taken that one step further – especially when you click on the link in the BBC story and see that a Hong Kong company has appointed an algorithm to its board of directors.

History is littered with people who’ve thought their business model was untouchable – that there’d always be a demand for candlesticks. Now more than ever you need to think the unthinkable – and think about how it would impact your business. Ten years from now the world will be a radically different place – and machines managing humans may be one of the least surprising aspects.

After all, as it says in the BBC article, “human judgement is often clouded by irrationality, emotion and imperfect knowledge.”

But human judgement and human behaviour is also distinguished – by insight, empathy, gut feeling and the sheer bloody-minded will to win.

Nowhere is this more evident than round an Alternative Board table. One business owner acting on his own is frequently irrational and emotional and acts on imperfect knowledge. But when he’s run that decision by six or seven of his peers irrationality is replaced by careful consideration; emotion by cool detachment and the imperfect knowledge is supplemented by the wisdom of the group. And when you’re accountable to your peers, your determination to succeed is even stronger. To repeat one of my favourite sayings, ‘If you want to go fast, go alone. If you want to go far, go together.’

None of us knows what will happen in the future: but if you have to meet the challenges of running a business in an ever more rapidly changing world, you can’t be better armed than to have your TAB colleagues at your side.

But yes, I suppose it’s possible that it could play out like this…

Scene Two: The same car park, one month later. Sophie and Neil meet as they climb out of their cars.

 

Sophie:          Hi Neil. How are you doing? Good month?

 

Neil:                Staggeringly good thanks, Sophie. Smashed all our targets.

 

Sophie:          Ed’ll be pleased with you.

 

Neil:                Well it’s all thanks to her. Trouble is, she’ll make me increase our targets for next year.

 

Sophie:          Yeah, she did that in December last year…

 

Neil:                No Christmas drinks, either…

 

Sophie:          Nope. One thing a Cognitive Learning Hologram doesn’t have is the Christmas spirit.

 

Neil:                Maybe we should bring back Ed Reid…

 

They look at each other. Simultaneously they laugh and shake their heads. They walk into the hotel. Lights dim…

 

-The End-