Think like an Investor

One of the biggest breakthroughs I have helped my clients with is to encourage them to think like an investor as apposed to a manager in their business. Thinking like an investor makes you look at your business totally differently and you then make more informed decisions about what the priorities might be.

How do you do it? Well, if you are not financially minded I have encouraged many clients to upskill themselves by reading 'How to Read the Financial Pages' by Michael Brett. Then you can start studying and understanding business through the Financial Times.

The second thing to do is to ask a professional investor how they would value your business and what you need to focus upon in order to increase its value. I guarantee they will give you different feedback than say a business advisor and that's the point.

You need to get your money working for you rather than the other way round.

Does this advice work? Well you could ask the Keepmoat boys, they followed it and sold out for £780 million in 2007!

Evidence Based Business Advice and Decision Making

In the medical world doctors make diagnoses and provide treatments based upon sound evidence founded on scientific research. In the business world consultants peddle advice and potions based upon often flaky 'research' conducted on a few people, if at all. Businesses buy the advice then wonder why it doesn't work!

For example, when I carried out my Entrecode research into how entrepreneurs start and grow successful businesses we correlated our findings with over 400 business's performance over a 10 year period. In conducting this research I discovered less than 10% of 'studies' of entrepreneurial behaviour has any correlation with business performance at all. Its just somebody's opinion......

So here is my advice. If you intend to get somebody to advise you on your business ask them what the evidence base is for their proposal and check the science underpinning it. Too much business consultancy is frankly smoke and mirrors and it may be doing more harm than good to many organisations.

Improving performance using seven words....

A major research study in the USA found that it is possible to significantly improve people's performance in any field using seven words.....WOW!

The words are "you have worked really hard, well done"! In other words, performance comes from purposeful practice not 'natural talent'.

In the research one group was told the above seven words at random intervals and another group, "you are talented and clever, well done"! Individuals in the first group outperformed the second by 50% on average on a range of tasks.

The experiment was repeated several times with different people in different cultures and contexts, the results were the same every time.

So try it with your team and even on your kids.... remember, you heard it here first!

There, performance management, done!!

How are Keepmoat so successful?......

Many people in the past year, including city bankers, have asked me how Keepmoat, my No.1 client, are so successful....

They have produced profits of 10% over the past few years whilst their competitors have struggled to make 3%. So whats going on?

The recipe for success in any business is always difficult to capture and even more difficult to communicate to others but Keepmoat have 3 assets I do not see in many other businesses:

1. A clear, focused strategy shared by all which drives the business.

2. The 'Keepmoat Way' which is a culture by design not default.

3. The most capable people in the industry, actually, as I have ever met in any industry.

So there it is. I am happy to share Keepmoat's 'secrets' because they are one off and the recipe could not be copied but the lessons are there for others:

1. Get a clear strategy
2. Define and manage your preferred culture
3. Get the right people on the bus

Leadership vs Management..........

A number of people responded to my last blog in which I tried to argue for taking management more seriously. One of the questions raised was 'what about leadership'? So here goes.....

Management is about making the business work, setting goals, hitting targets, doing what it says on the can - results to expectations. Leadership I think is about making the organisation better. Its about improvement and change - results beyond expectations.

Leadership was once portrayed as the characteristics people needed to be leaders. The problem was that many great leaders had not heard about the characteristics they were 'supposed to have' yet were still highly successful!

Leadership is now seen as producing results. Its what leaders do rather than who they are that matters.

So what do they actually do? Usually they start with a vision of where they want to take the organisation. They create a strategy. They also develop a culture of how they want the organisation to behave.

The better leaders 'become the strategy and culture', in other words, they champion it. They insist that the business changes in order to deliver the strategy rather than the other way around. In doing this they are able to transform and change organisations.

There, leadership done!