Why small businesses don't trust corporates (even friendly ones)

The remark was greeted with warm agreement. Yet, the irony was that most of the CEOs would likely say the same about any of their big company service suppliers. Including the one the speaker represented.

The problem is the yawning gulf between most big company professionals and their entrepreneurial customers and partners. Whilst corporates believe they are ‘relationship building’ the impact on the actual relationship is minimal.

Professionals create ‘rapport’. Entrepreneurs crave value.

The truth is that most big company people have no personal experience of running a small, fast-growth business. They find it hard to step into their clients’ shoes. Rapport is established but real empathy is lacking. It’s then too easy for the professional to default to ‘product’ having never established what the customer really wants.

And it gets worse. Their brains are just wired differently. Big company thinking attracts and rewards those comfortable in their data-driven, cerebral cortex, ‘think’ mode. Fast-paced entrepreneurial environments attract those far more likely to operate in an intuitive, ‘feel’ or limbic mode. Private business makes choices on gut instinct. Professionals make choices empirically. It’s a major handicap in forming powerful relationships.

The solution to these challenges is actually pretty easy. It is all about creating awareness and enhancing both the human intelligence capabilities and strategic insight of the professional. Helping them to really understand and fully engage the person they are talking to.

The result can be startling. As one banker observed “The client had rejected meetings over and over again. Using this new approach we got him talking about what he really wanted to talk about. We had the meeting on Monday. On Friday we got a £5m mandate!”

The rapport lie is a huge problem facing all big companies ambitious to build share in the mid market. And its’ about to get a whole lost worse. Fast-moving, converging markets mean that in 5 years’ time most ‘relationship managers’ will be talking about products that are not even on their radar today. And in that world those who win the relationship battle will win the war.


No Borders?

What struck me was how very alien this coming world is to the average traditional business. And how simultaneously exciting and scary that is.

It wasn’t just the dress code – a shirt with a collar was overdress – or the impenetrable language. It was that ‘conventional’ business practice was being turned on its head.

Conventionally business is based on borders and barriers between people, territories and businesses. It is replete with unwritten but understood structures and hierarchies. In this new world none of this is relevant.

Conventional barriers between people were erased; titles and even surnames are as irrelevant as nationality or language. In this world without barriers businesses rarely even bothered to mention where they were based on the planet.

Conventional barriers between businesses were missing. The language was not of ‘IP protection’, ‘first mover advantage’ or  ‘competitive threat’ but of ‘collaboration’, of ‘shared platforms’ and ‘the ecosystem’.

More predictably, I was struck by the breath-taking speed at which these businesses innovated and created product and proposition; launch cycles were in days and weeks not years.

Conventional business urgently needs to understand this new world. To benefit from this profusion of innovation and creativity, large businesses need to learn a new way of thinking about business without borders. For professional practices seeking to provide advice, funding and services in this new world the challenge is the same. Is there an ‘MBA’ for understanding tech start ups?

Yet what finally struck me was how much this world still needs conventional business.  It was striking to me how much of the focus was on the product and not on the business. I wondered how these technology-led, idea-centric start-ups would learn to transcend just ‘the product’ and to understand and leverage the full suite of assets that make for a true, scalable and sustainable business.

The real opportunity is to eliminate the borders that still stand between the conventional and the new.


The Control drug – going cold turkey as a leader?

A senior Director of one of the largest companies on the planet recently told me that reading Dan Pink’s extraordinary ‘Drive’ (revealing what really motivates people in organisations) was a revelation.

It had taught him that most of the reward and hierarchical structures, painstakingly developed at huge cost over years to manage and control people, were not just a waste of time but were actually destroying shareholder value. He described it as a ‘liberating experience’.

For most big companies, hierarchy and control are the default option for managing the risk that comes from the inconvenient fact of employing people.

If there’s a risk, whether of error or misdemeanor, the solution must be control.

But what if this fundamental philosophy is wrong? What if the solution is not control but actually freedom?

What if by unshackling our people we actually de-risk the organisation? And, as a by-product, create a culture of unstoppable energy, motivation and self-responsibility? In a word a culture of ‘drive’.

It’s actually not that radical a notion. It’s what really good entrepreneurial leaders build into the core DNA of their businesses. Every day. It’s what Reed Hastings of Netflix means when he says ‘figure out how to get great outcomes by setting the appropriate context rather than by trying to control people’.

By ‘context’ Hastings means what Pink calls ‘purpose’. Telling an intelligent human being ‘why’ their organisation exists is a far better way of ensuring they do the right thing willingly than trying to control them to ensure their begrudging compliance.

To quote another thinker on this topic Simon Sinek ‘“When people believe in what you believe in, they work with their blood, sweat and tears. When they don’t believe in what you believe in, they work for your money”

Ajaz Ahmed the founder of AKQA now the largest digital agency in the world is another believer in simple principle of allowing people the freedom to excel. “Hire good people who share your values” he says “provide clarity in what needs to be done, trust them and give them independence to do their jobs”.

What it seems corporates need to learn, if we want passionate, engaged and driven cultures is to break the control habit. And it might just reduce risk in the process.

 


Why the lean start up changes everything

Lean Start Up is a way of building new products, services and organisations that manages extreme uncertainty: will anyone buy this?

The old way? “Write a business plan, pitch it to investors, assemble a team, introduce a product, and start selling as hard as you can. And somewhere in this sequence of events, you’ll probably suffer a fatal setback.”

The new way: “Accept that you have a series of untested hypotheses—basically, good guesses – and first test these by getting out of the building and testing real, early products with real customers”

Read Why the Lean Start-Up Changes Everything


Love in the Boardroom?

“My colleague wondered whether they could explore the subject of love,” explained Brian. “There was an awkward pause. Followed, by nervous, and then uproarious, laughter”.

In most large global businesses the response would be much the same. In these organizations the concept of love is irrelevant. Love has no place in business. Obviously.

But stop for a moment. What, after all, is ‘love’?  Synonyms include: passion, regard, affection, enjoyment, zest, understanding and compassion.  Are these not exactly the attributes the Boards of most plcs will complain are lacking from their cultures? Are these not exactly what would make cultures ‘become more human’ and people ‘to interact with colleagues and clients in a more natural, open and authentic way?

And the antonyms of ‘love? These include: resentment, scorn, malice, antagonism, lack of alignment, fear. You don’t need to look far to see these traits showing up in almost any large organisation in the world.

So, if it is a culture of passion, zest and understanding we seek to build and resentment, misalignment and fear we seek to remove, perhaps love is not such an embarrassment. Far less an irrelevance.

To achieve the perfect performance culture perhaps all we need do is embrace a culture of love.

And if that is still too uncomfortable, try another synonym. Try ‘trust’. Imagine your organisation if everything was based on a core principle of ‘trust’; if trust was the context in which every decision was made? How radical would the change be from the hierarchical, controlling, risk-obsessed, stifling reality of today? How far would this unshackle the creative potential of your people and your performance?

It’s actually not that radical a notion. It’s what really good entrepreneurial leaders build into the core DNA of their businesses. Every day. It’s what Reed Hastings of Netflix means when he says ‘figure out how to get great outcomes by setting the appropriate context rather than by trying to control people’.

Ajaz Ahmed the founder of AKQA, now the largest digital agency in the world, runs his global business on a simple principle. ‘Hire good people who share your values, provide clarity in what needs to be done, trust them and give them independence to do their jobs’.

These are the businesses founded on a basis of trust not control, opportunity not fear of risk. These are businesses that are imbued with passion, affection, enjoyment, zest, understanding and compassion.

In a word; love.

 

And the impact goes straight to the balance sheet; these businesses attract and retain the best; they are agile, innovative, creative. And above all, they are valuable.


The world is changing – do your sales people need a micro-MBA?

This simple exchange cut to the heart of the fundamental problem most large service providers face in creating sustainable relationships in the mid market. Technical, product-focused relationships are fine. Strategic relationships often don’t exist.

It’s a huge problem when, from our perspective as mid market customers, the services of banks, accountants, technology businesses and even lawyers look increasingly commoditized. If all I’m getting is product and no value what is to stop me switching? Where is the sustainability of a real relationship?

Corporates have done a great job at giving their client-facing teams technical training. They know their product. Yet there is little competitive advantage in that any more and less sustainability. The neglect of broader human intelligence and critical business intelligence skills in those who seek to service the mid market is increasingly telling.

Those who realise this and upgrade their relationship teams to have the knowledge and confidence to offer genuine strategic insight and challenge to customers will clean up in this market place. They will find a ‘mini MBA’ for their relationship teams will yield dividends.

I know this not just from experience of sitting on the customer end of these relationships but in coaching banking relationship teams on basic human and business strategy who come back time and again flushed with excitement having had a customer email to say ‘thanks, that was the single best meeting I have ever had with a bank’.

Yet there is an even bigger problem for corporate suppliers who persist with a product, technical focus in client relationships in the mid market. Fast-moving, converging markets mean that in 3-5 years’ time most ‘relationship managers’ will be talking about products that are not even on their radar today. And in that world a reliance on ‘rapport’ over relationship and technical knowledge over strategic advice is simply not flexible and agile enough to adapt.

In this new market place those who win the strategic value and relationship battle will win the war.


Five generations of employees slam together in corporate land

They describe the diminishing band of Builders (or Traditionalists), born in the war years and still clinging to hierarchy and structure; the Baby Boomers with their matrix structures and poor grasp of technology; the self-referenced Gen X brigade who cut their business teeth in the late 80’s and early ‘90s of red braces and Gordon Gekko; the Gen Ys digitally connected, impatient and scornful of convention; and finally those born after 1997 and soon to enter the workforce, most of whose life experience has been lived both in recession and on social media.

There are plenty who reject these broad stereotypes. Peter Cappelli, professor of management at the Wharton School is quoted in the Harvard Business Review saying these stereotypes are ‘just not true. There is no evidence that 35-year-old managers today are any different from 35-year-old managers a generation ago.’ And yet we recognise the broad differences and the challenges they create.

The HBR article quoted above gives plenty of good advice on how to cope with the increasing complexity of generational differences. But I think it and many other commentators miss the main point. And that is that all human beings, of whatever generation, respond to two basic human needs.  In clearly addressing these needs any organisation can transcend generational or indeed any other social ‘divides’.

The first is the fundamental need for a sense of purpose; to understand ‘why’ over ‘what’ or ‘how’. Organisations that clearly communicate a compelling purpose, and base their organisational culture and decision-making upon that purpose, are organisations with which members of any generation can engage. Purpose-led organisations transcend most human divisions by providing a context against which everyone can align amd engage.

Antoine de Saint-Exupéry framed this concept rather lyrically when he said:

“if you want to build a ship, don’t drum up people to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.”

The second is the fundamental need for freedom and autonomy.  Within a safe and blame-free culture, people will always do their best work when they feel sufficiently respected to be allowed to behave with a degree of autonomy. As Ajaz Ahmed, founder of the largest digital agency in the world puts it ‘hire good people who share your values, provide clarity in what needs to be done, trust them and give them independence to do their jobs’.

The same view was expressed by Commodore Jerry Kyd when I interviewed him about his command of HMS Ark Royal: ‘empower the able and you’ll be amazed by what people can achieve’.

Whatever the truth of the Five Generations scare stories, divisions will always exist within organisations. The secret to bridging them always exist in two simple word; purpose and freedom.