This is a Guest blog post from Mark Haas, CEO of the Association for Enterprise Growth. He helps boards and executives create powerful strategies to help them make decisions with greater confidence, impact and pride.
Corporate restructuring, M&A, competitive intelligence, strategy, new product development, and process reengineering. One thing required for success that they all share is the need for the best and brightest. The smartest person in the room. World class minds to solve world class problems. Top grads from the best schools.
I disagree. While intellect has its place in business, being smart is no replacement for creativity, agility, innovation or insight. Yes, sometimes these capabilities are rolled into one person, but rarely. Several decades helping clients create strategy has led to some insight into where smart is a help and where it can be deadly.
You wouldn’t want only the “smartest” surgeons, engineers, artists or teachers wholly responsible for your welfare. You’d want the right team of individuals, each bringing appropriate skills for the task. Creativity is about being able to see alternatives. Agility requires anticipation. Innovation is more about flawless execution than the up-front ideas. Insight needs, well, a lot more than intellectual horsepower.
The Risks From Being Smart
Being smart has a huge downside for humans. It derives from how we were raised, trained, rewarded and placed in corporations. As children, most of us were rewarded for being on time, orderly and respectful of adult norms. In school, being smart was equated with getting the “right” answer, quickly. Most professions promote a body of knowledge that implies adherence to widely accepted professional standards. Our advancement in most business settings is a result of knowing the right people, performing well on tasks and knowing the rules of promotion. All this seems appropriate because it is so familiar.
In strategy formation, high intellect can be a hindrance; in a team of only “the smartest of the smart,” it can be a disaster. Especially in an increasingly VUCA world, there is no single answer and the first answer is often not the best answer. For the highly intelligent person, the learned (both personally and socially) rigidity and linearity of problem solving to reach an elegant, perfect solution gets in the way of seeing the possibilities of which powerful strategies are made.
Use Smart, But Leverage It
The solution is not to ban smart people from the strategy team. Rather, recognize that the skills you need for a powerful strategy team go far beyond intellect. A high-horsepower car engine is great in theory but is useless without fuel injectors, cooling system and brakes. Fill your team with staff (this also applies to external advisors) who can turn off their brains for a bit and participate more fully in the other essential parts of the strategy process.
Mark Haas is CEO of the Association for Enterprise Growth. He helps boards and executives create powerful strategies to help them make decisions with greater confidence, impact and pride. He works with companies and nonprofits to develop strategies, create and validate business models, and execute with discipline. Mark is also an international trainer, facilitator and speaker in ethics, strategy and performance management. He can be reached at email@example.com and (301) 442-5889.
This is a Guest blog post from Jeff Cherry, Founder and Managing Partner of The Conscious Venture Fund and Founding Partner of The Laudato Si Startup Challenge. He is a tech CEO and mentor, investor, philanthropist, and community builder.
I recently listened to a thought-provoking episode of the TED Radio Hour on NPR entitled What We Value. Its premise was that this economic and societal crisis in which we find ourselves is accelerating the move towards a new set of values when it comes to the practice of capitalism. Those of us in the social impact and Conscious Capitalism space are heartened to see this discussion gaining momentum, but the question remains: How will capitalism change now that the unhealthy state of business and our major societal institutions have been laid bare?
There are many indications that this shift was in the offing far before the onset of the coronavirus pandemic. Although late to the game, the statement released by the Business Roundtable in August 2019 signaled a transformative move away from the outdated notion of shareholder primacy and towards a more human and effective form of business. It certainly garnered the attention of the press. And others in the business mainstream who had been either unaware or hostile to the market forces driving this change, are now finding it hard to ignore discussions of stakeholder management and whether business should have a broader role in society.
These ever-expanding discussions about the purpose of business in society are now taking place in the context of what does a return to “normal” look like in the economy. And a growing sentiment that the normal we were experiencing — where greed, inequity, declining living standards, crony capitalism, rent-seeking, regulatory capture, share buy-backs, corporate welfare and environmental depletion were the norm — isn’t in fact normal. Nor a state of being for which we should collectively yearn. As you might imagine, I agree.
The challenge we face now then, is how do we actually execute on this new idea? Many people talk about business for good and changing the purpose of the firm. But in the real world of competitive advantage, pricing models, customer needs, shareholder demands, supplier, employee and community relationships, knowing what to do is hard. We speak to entrepreneurs all the time who are philosophically aligned with a new narrative about business. They can cite anecdotes about others who have been successful, and they lack a cognitive frame that they can use to build an organization that embodies this day-in and day-out.
I’ve written at length about why I believe a focus on stakeholders in business and capitalism needs to replace the old story. In this article, the first of a two-part series, I’ll describe a framework to begin the journey to business as an institute of societal well-being: Or Human Capitalism.
The New Narrative of Business in Society: Human Capitalism What does a new story about the practice of business and capitalism look like in practical terms?
In order to fully bring this new narrative to life, I believe we need to re-define the purpose of business as a societal institution. Then, we need to translate that definition into tools that real entrepreneurs and executives can use every day to guide how they formulate strategy, individual decision making and implementation.
When a new cohort of the Conscious Venture Lab convenes, I ask a question to frame the work we’ll be doing over the ensuing 16-weeks: “What kind of world could we create if investors, executives and entrepreneurs cared as much about people as they care about profit?” It isn’t a question I expect any of the teams to answer outright. It’s a rhetorical challenge to think about how these ideas impact their businesses and the broader society.
Over the last few months, I’ve reframed that question: What kind of world could we create if we decided our first duty in business was to simply care for each other? This is the essence of Human Capitalism.
This version of the question doesn’t pit people against profit, which I believe is a false construct. Instead, it captures the meaning we’re all experiencing in this moment: can we be a complete society if the overarching purpose of business is only to increase profits and not primarily to improve the human condition? Both of these questions are variations of the age-old investigation of “What is a business for?” Academics, economists, politicians, social scientists and businesspeople have been asking this question for decades, if not longer.
Liesel Pritzker Simmons, co-founder of the impact investing firm Bluehaven Initiative, has said, “A crisis gives us an excuse to have conviction earlier.” What we are experiencing in this moment has emphasized how interconnected we are as a society and as a world. It has emphasized the importance of health as a public imperative. The importance of economic, community and personal resiliency as interdependent societal imperatives to which individuals and all societal institutions, even businesses, need to contribute. This crisis is bringing along those who may not have reached a level of conviction to move to a more human form of capitalism had things stayed … normal.
In this new reality it’s clear that the question about what type of world we want to create can no longer remain abstract or rhetorical. The coronavirus pandemic has exposed the truth, that a focus on our interdependent well-being is necessary for society’s survival. Succeed together or fail together the choice is ours, but we can no longer hide behind a narrative that separates individual financial self-interest from our mutual survival.
In the post-COVID world, the new narrative of business in society is a narrative about authentic caring, societal resilience and collective well-being.
Practical Ways to Integrate Human Capitalism Herb Kelleher, the legendary founder of Southwest Airlines, once said, “The business of business is people — yesterday, today and forever….” But what does it actually mean to structure your business around people? What can you do tomorrow to transform the structure of your business, respond to this new reality and become the type of leader that society needs?
Caring is Job 1: Above all there is one thing leaders must do first in order to be successful in this new world: They must actually care! To be clear, leaders who embrace the idea of caring for stakeholders as a core value and primary motivation for running a business will be well-positioned to succeed in this new world. They’ll be more able to execute on the ideas described later in this article and more likely to attract talent, customers and investors in a post-COVID world of business as a vital instrument of society.
At first this seems obvious and perhaps, some would say, no different than the status quo. But the nuance of authentically treating employees, suppliers, customers and communities as individuals deserving of your care for their own sake, as opposed to primarily as fodder for creating returns is critically important. Not only to how your company will be perceived, but authentic caring — or the lack thereof — will have a tremendous impact on your competitive performance. People understand instinctively if you are treating them fairly simply as a form of manipulation for other ends. And, unless you’ve created a true culture of caring in your organization, you’ll be tempted to abandon that care when it comes into conflict with your “real goals.” The best leaders however will understand this simple truth: how we think about creating financial value is now, more than ever, clearly tied to the way we create societal value. Authentically caring is a key component of this new narrative.
With that as our foundation, there are two things that every leader can do to build caring into the operational DNA of their business:
First, adopt a specific set of guiding principals about what it means to care for each other in service of societal well-being. And second,
Institute a practical business operating system that provides a framework for living into those guiding principals.
Here in Part-1, I’ll discuss a set of guiding principles we’ve created at the Conscious Venture Lab to help entrepreneurs execute upon these cultures of caring.
Guiding Principles: The Five Promises of Collective Well-Being In order to seed this new culture of caring into the DNA of your operations, it is crucially important that you articulate and codify a set of guiding principles that the entire company can use to organize your thought processes and create operating norms, policies, procedures and metrics that will keep your culture on track in good times and in challenging times…like during a pandemic.
Companies that will lead us into a more effective model of capitalism and a future of broadly-shared prosperity have structured their business to deliver on what I call The Five Promises of Collective Well-Being, through which we vow to use business to make the world:
More sustainable and
More prosperous for all.
Let’s examine each principle:
Business as a path to a More Just society: Leaders who are best at this will work to create social justice by structuring their organizations to level the playing field and authentically create access to opportunity for all those in their ecosystem who want to contribute.
Conscious Venture Lab and SHIFT Ventures portfolio companies Hungry Harvest and R3 Score have built this promise into their business models, which drives impact and returns.
Hungry Harvest creates a more just world by providing fresh food to communities that wouldn’t otherwise have access to it and dignified work opportunities to people in need. As a result, they create scores of “Harvest Heroes” who loyally buy wholesome food from the company that otherwise would have gone to waste. In the process they have increase sales by more than 34,000% over the last 4 years.
R3Score creates a more just world by providing a dignified return to civil society for millions of formerly incarcerated Americans and allowing banks a way to engage with people they would otherwise ignore. Thereby expanding the banks’ customer base, putting financial assets to work that would otherwise lay fallow and giving the 1-in-3 Americans with a criminal record the opportunity to build a new life.
Business as a path to a More Joyous life: Leaders who bring more joy into the world will do so by focusing on a combination of the quality of the human interactions in their operations, eliminating misery as a core aspect of their business and/or creating products that bring authentic joy to more lives.
One of my personal favorite companies, Union Square Hospitality Group, uses a culture of caring and enlightened hospitality to bring joy to employees, customers and suppliers alike.
Startup Aqus Water, that was a part of the Vatican Laudato Si Challenge in 2017, has created a product that puts “three years of clean water in the palm of (the) hand(s)” of people in places where lack of clean water has been causing extreme hardship for centuries. With more than 780 MM people in the world lacking access to clean water, bringing joy will undoubtedly bring prosperity to many.
Business as a path to More Equitable communities: When leaders focus on creating a mutual exchange of value between all stakeholders, they move their organizations away from the negative consequences of shareholder primacy and create more equitable communities for everyone. Paradoxically, an equitable approach to business, or removing the shareholder blinders, often creates new paths to greater value for shareholders.
Greyston Bakery in Yonkers New York is a pioneer of open hiring. They create a more equitable world by focusing not on the tyranny of weeding people out in the hiring process but by providing the dignity of work to anyone who wants it.
Here in Baltimore, Jacob Hsu and his company Catalyte have created an entirely new way of identifying undervalued individuals who have the aptitude to become exceptional engineers. Creating new paths to equity and unleashing massive financial potential for communities, his clients and the company.
Business as a path to a More Sustainable world: The winning leaders of the new narrative think and plan for the long-term. They understand that sustainability in every sense is the key to enduring organizational health. They establish a circle of growth for the planet, the people who serve or are served by the organization and the organization itself.
Billion-dollar clothing company Patagonia has rejected the world of “fast fashion” by creating high quality, long-lasting products and offering a repair and reuse program to discourage customers from buying things they don’t need.
Business as a path to a More Prosperous existence for us all: The best leaders view value creation with a polarity, or both/and mindset. They actively look to create real wealth for employees, customers, communities, suppliers and shareholders. They work to manage the polarity of creating value for all stakeholders by asking themselves questions like: “How do we simultaneously achieve the upside of paying our employees as much as possible, and, the upside of creating great returns for shareholders?” This is in contrast to shareholder value leaders who see all stakeholder relationships as tradeoffs that need to be solved for the benefit of shareholders.
Starbucks has fed more than 10 million people through its FoodShare program, redoubled its commitment to eliminate gender pay equity gaps, and committed to becoming “… resource positive — storing more carbon than we emit, eliminating waste and providing more clean fresh water than we use …” — all while rewarding shareholders handsomely — even during the coronavirus pandemic.
Why Human CAPITALISM? In Part-2 of this series I will discuss how the tenets of Conscious Capitalism and stakeholder management will allow organizations to clear the clutter and build these principles into everyday operations.
For now, a note before we end to my main audience: The Skeptics:
I spend the majority of every waking hour thinking about how to support entrepreneurs who have previously been neglected and who are creating world changing companies despite the immense hurdles they face. I also spend a majority of that time thinking about how to invest on behalf of my limited partners in a way that will create exceptional returns. I am a capitalist who believes capitalism can and should be practiced in a way that unleashes its power to elevate all humanity. That we can create a more humane form of commerce and human cooperation. What I am suggesting is that capitalism, like any man-made system, must evolve as society evolves. To paraphrase my friend and mentor Ed Freeman, professor at the Darden School at The University of Virginia, the alternative to capitalism as we know it today is not socialism, but a better, more human form of capitalism.
For those who would push back on these ideas as leaving shareholders behind and giving away profits I would simply ask you to suspend disbelief for a bit. Take a few minutes to think not about what you might lose, but about what you might gain. What kind of world could we create if we decided our first duty in business was to care for each other? Look around…I think that time has come.
Jeff Cherry, is CEO and Managing Partner of SHIFT Ventures, and Founder & Executive Director of Conscious Venture Lab, an award-winning and internationally recognized early stage accelerator. He is also Founder and Managing Partner of The Conscious Venture Fund and Founding Partner of The Laudato Si Startup Challenge. Jeff is a pioneer in conscious capitalism and double bottom-line investing. He can be reached at firstname.lastname@example.org.
This is a guest blog post from Shellye Archambeau, humanitarian, author, speaker, tech CEO and Fortune 500 corporate board executive.
“Noel, caring is sharing!” my five-year old granddaughter reprimands her three-year old sister, who doesn’t want to share her toy. It’s a mantra my daughter uses to teach her children. As I witness this exchange while I “shelter in place” with them in Tampa, Florida, it strikes me that the whole world needs to be reminded of this simple concept.
What do we need to share? Compassion. Simply said, demonstrating compassion means to show kindness, caring and a willingness to help others.
Each of us is being affected in very different ways. For some, it is a real inconvenience, but work and life for the most part continue. Our meetings have turned into video conference calls. Our normal support infrastructure has vanished, childcare, school, household help, etc… We aren’t able to gather for celebrations such as weddings, birthdays or a friend’s successful battle against cancer. Worship, gym exercise and self-care routines are being disrupted. Our travel is curtailed. These impacts are a nuisance, but frankly not that hard.
At the other end of the spectrum in addition to the tens of thousands of people battling the virus itself, there are many people out of work or whose businesses are fighting for survival. They are facing real hardship and there are a lot of them: hairdressers, retail and restaurant workers, performers, event planners, housekeepers, etc. The federal reserve reported last year that 40% of Americans don’t have $400 in the bank for emergency expenses. I know the government is also working on stimulus packages for Americans and business owners however the ramifications of now several months without pay will be felt significantly. If we all can take some measure to support, help, comfort and lend the proverbial hand – it will make a difference.
I had the honor of meeting and speaking with the Dalai Lama several years ago. Compassion is one of the key tenets of his teachings.
“Compassion brings inner peace and whatever else is going on, that peace of mind allows us to see the whole picture more clearly.” Dalai Lama
Research backs up the Dalai Lama statement. The Greater Good Science Center at UC Berkeley has conducted research that supports the premise that leading a compassionate lifestyle improves both mental and physical health. “The reason that a compassionate lifestyle leads to greater psychological well-being may be that the act of giving appears to be as pleasurable as the act of receiving, if not more so. A brain-imaging study led by neuroscientists at the National Institutes of Health showed that the “pleasure centers” in the brain—i.e., the parts of the brain that are active when we experience pleasure (like dessert, money, and sex)—are equally active when we observe someone giving money to charity as when we receive money ourselves!”
Now is the time to help where you can. A couple in my Mountain View neighborhood literally started knocking on doors of neighbors who they didn’t know to see if people needed anything. They met several elderly people who indeed needed help with grocery shopping. Another person in my Nextdoor Whisman Station community reached out to offer to talk on the phone with anyone who needs to talk to someone, to rant, combat loneliness or for any reason at all. I’m continuing to pay my housekeeper and my hairdresser for my regularly scheduled appointments even though the services aren’t being provided. Their income is being severely impacted by the necessary Shelter in Place policies.
So, find ways to show your compassion for others during this very challenging time.
This can be done through donations to charities that support the most vulnerable in our society. Such as the American Red Cross who is facing massive blood shortages due to blood drive cancellations, your local food bank, Meals on Wheels who feeds the elderly, No Kid Hungry which deploys funds to ensure that kids don’t go hungry especially with schools being closed, etc.
You can also financially support the Arts or your local businesses. For those not in a position to help financially, you can give the gift of time or effort. For example, there are thousands of people in nursing homes whose families can’t visit. Call one and offer to speak to residents on the phone. Many high-risk people are afraid to go to grocery or drug stores. Offer to do their shopping when you go.
Use your influence as a leader in business, offer free coaching, support, or tools that can be readily provided to help struggling small businesses and entrepreneurs. Not sure how to get started. Check out organizations such as Score.org and businessadvising.org, both of whom provide confidential business advice through a network of volunteer business people.
Now is a time more than ever to be a mentor within your company and community. For example I launched online “Ask Me Anything” live sessions to provide perspectives and support to people working through professional or entrepreneurial issues.
Give your teams the ok to share their concerns, etc.. Sometimes people just need to be heard and know someone cares about them. There’s also a lot to be learned by just listening to the challenges and issues faced by team members.
We are in this together and together we will get through this just as we have overcome past crises. I believe that most of us are compassionate people. Let’s all take at least one action to demonstrate it. As my granddaughter said, “Sharing is caring”.
Shellye Archambeau is a humanitarian, speaker, author, technology company CEO, and Fortune 500 Board member. She is the author of Unapologetically Ambitious and a leading figure in Silicon Valley. She sits on the boards of Verizon, Nordstrom, Roper Technologies, and Okta. She is the former CEO of MetricStream and former President of Blockbuster. Please follow her at http://www.shellyearchambeau.com
Almost 9 years ago, I published this, my first Blog post on WINNING IDEAS. As I work with students, mentees, and other business colleagues of late, I find myself reverting to various “Fundamentals” in our conversations, this one perhaps being the most important of all. Please enjoy and let me know what you think!
What does it take to be Successful? Everyone has an opinion on this for sure.
Success is Winning, and everyone loves Winning.
Having been a student and analyst of the subject of Success for over 40 years, I think I have boiled down the formula of what creates Success:
Each of the great thinkers and each successful person has their own personal take on what it takes to achieve success, but these are the 5 essential elements.
Of course, I left out a couple of other important elements like Serendipity, Luck, Sacrifice, Hard Work, and others, but I believe that these “sub elements” are a part of one of these 5 essential ingredients. For example, if you have a Burning Desire (passion), then you will make the sacrifices and work hard. Goal Setting includes goal review, and is the roadmap to the destination.
Courage is an interesting one and we don’t hear it mentioned often, but to me, Courage is all about taking action, and stepping up and going outside your comfort zone to make things happen. Without Courage, thought cannot easily be transformed into Action.
And what about luck? Well, the more persistent you are, the luckier you get. By never giving up and hanging in there, opportunities will inevitably come your way.
Persistence is my favorite, and I conclude this, my first ever Blog Post with my favorite quote:
“Never give in. Never give in. Never, never, never, never–in nothing, great or small, large or petty–never give in, except to convictions of honor and good sense. Never yield to force. Never yield to the apparently overwhelming might of the enemy.” – Winston Churchill
This is a Guest blog post from Todd Youngblood, These thoughts are more applicable today than when he first published this almost 2 years ago.
Is there anyone alive today who did not hear the words, “You don’t know how good you have it,” from one or both parents during childhood? I seriously doubt it. I heard it so often growing up that I swore I would never say it to my own kids. I failed. The fact of the matter is they didn’t know how good they had it. And to be honest, I didn’t either.
Is the world today awash in problems and injustice? Yes! Is the U.S. in particular, awash in problems and injustice? Yes! Are there more, bigger, more complex, thornier problems than even before in human history? Yes!
My contention is, that’s good news!
In fact, it’s downright bizarre to me that only 6% of the U.S. population thinks the world is getting better. Seriously? Think! Of course we have lots of problems today, but they are due to the unanticipated, unintended consequences of the amazingly dramatic advances in standards of living that have alleviated or eliminated the problems of the past.
Are the problems we’re dealing with now real? Yes! Are they tough, horrifying, heart-wrenching, unfair, unethical, immoral and just-plain-wrong? Yes, Yes, Yes, Yes, Yes, Yes and Yes. So what? Let’s look at a few facts about the relentless, positive progress in our world, courtesy of Our World In Data
First, world population:
1800 – 0.9 Billion
1900 – 1.7 Billion
1960 – 3.0 Billion
1980 – 4.4 Billion
2015 – 7.4 Billion
That’s an increase by a factor of more than 7. Are 7 times more people alive because the overall average standard of living has been going down? I don’t think so. How about the % of world population living in extreme poverty?
That’s about as direct a measurement of improvement in living standards as you can get. From virtually all human beings living in extreme poverty to less than 10% in just 2 centuries. For perspective, humans have been around for something like 2,000 centuries. So that’s virtually everybody in extreme poverty for 1,998 centuries, and now only 10%.
How about the % of world population that is illiterate?
That’s from 88% illiterate to 88% literate. …along with the immense value of literacy.
How about global child mortality?
That’s 43% – almost half – of children dying before their 5th birthday to only 4%.
How about freedom – the % of global population living in democracy:
That’s less than 1% of people living in a free, democratic society to 53%. Amazing progress!
These statistics tell the story of a remarkable, inexorable and MASSIVE increase in quality of life. Let’s take a look at some numbers that put a totally different spin on this supposed problem of having so many problems. Is all the stuff we can buy to make our lives easier and better getting more or less expensive? Inflation and different currencies and exchange rates around the world can make answering this question quite difficult. So forget about how many dollars it takes to buy something. Look at cost in terms of how many hours you need to work to buy whatever it is you want.
Light, for example. Every time the sun goes down, we’re switching on the lights. What does that actually cost in terms of hours worked? In 1994, Yale economist William Nordhaus answered the question. He calculated how much light could be purchased for 60 hours of work. Here’s what you could buy:
88 minutes of light from your oil-burning lantern in 1750 BC
10 hours from your tallow candle in 1800
16 hours from your gas-burning streetlight in 1810
72 hours from one of Edison’s early incandescent bulbs in 1880
1,200 days – over 3 years – from a fluorescent bulb in 1950
51 years from a modern compact fluorescent bulb
How about some other modern conveniences?
And these prices do not reflect the dramatic improvements in quality. In ‘59, the “big screen” TV was 21 inches. Are you old enough to remember complaining about too much “snow” in the picture? Today, not only is the fuzzy “snow” effect gone, you can see every pimple on an actor’s face as it marches across the 6 foot wide screen.
How about travel? To cross the U.S. by horse takes 70-80 days depending on the weather. Or you could hop on a jet and do so in less than 5 hours for less than $200. And for the record… I gripe and moan A LOT about my discomfort in those teeny-tiny airplane seats. It’s a bit embarrassing to contemplate the pain in my seat that would be caused by sitting on a jostling horse all day, every day for 2 1/2 months…
Forgive me for bringing some mathematics into the mix, but it’s a really good way to think about what happens when a problem gets solved. Think about a circle. A line through its center, the diameter, represents all the problems that have been solved by your society. The area inside the circle represents your standard of living. Around the circumference is where all of the unsolved problems facing your society are lurking, (Take a look at the show notes for this episode at IntentionallyVicarious.com to see an example of this and where I’m going with the idea…)
OK, here comes the math. Let’s say that the diameter of your circle is 10. Again that means your society has become aware of and solved 10 big problems. The area, your standard of living, is π r2, which works out to about 79. Around the circumference, which is π times that diameter, is roughly 30, meaning your society is aware of 30 big, ugly problems.
Now… Your society functions pretty well, so it goes about solving every one of them. The diameter of your circle is now 40 – the 10 problems that were already solved plus the 30 you just knocked down. Your standard of living, therefore, jumps up to 1,275! But uh-oh, you can now see 125 new problems around the circumference you didn’t know about before.
Your society attacks those, and solves every one. Your socienty has now successfully solved 165 big problems, which rockets your standard of living up to 21,382. But here’s another uh-oh… You are now aware of yet another 450 new problems.
I think you get where I’m going with this. It’s one of those glass half-empty or half-full things. Your society has solved 165 of the earth’s biggest problems, and all you see and hear on the news and social media is how you – you greedy, selfish SOB – have screwed the needy by “creating” 450 ugly problems and inequalities while only solving 165.
NO!!!!! Wrong perspective!
So what that you’re now aware of 450 new, ugly problems and inequalities? The vastly more important point is you did in fact solve 165 old, ugly problems and inequalities and ratched up your standard of living from 79 to over 12,000. That’s cause for celebration …and more work, more effort, more achievement. Dare I say more fun?
Run through the cycle again and your living standard will be nearly 300,000. Are you going to gripe and moan about how society is sooooo much worse because you now have 1,900 ugly issues instead of only the 450 you had before? Go ahead and whine if you want to, but stay out of my life.
The fact that I, you or anyone can identify an ever-growing number of examples of pain, suffering, injustice and horror is good news. It means that all of us have collectively solved a boat-load of old problems and made life on earth better – MUCH, MUCH BETTER – than it was before. The more problems we solve, the more – and uglier – problems we can identify. Get over it!
The instant any one of us as an individual, or all of us as a culture, a country, a species; stops identifying the huge and growing number of agonizing problems that cry to solved, is the instant we are doomed.
Recognizing – KNOWING – about the pain, suffering and inequality of outcome that exists; and about how much MORE needs to be done, means that we have the opportunity to get better – MUCH BETTER – all the time.
So again… As we solve more and more problems, the more we will increase the world’s standard of living, AND the more terrible and agonizing problems we will identify. Lets get over it! And let’s get busy – stay busy – and continue our 2,000 century long habit of improving everybody’s quality of life.
Todd Youngblood is Executive Producer and Host of Intentionally Vicarious, which is dedicated to help you have more fun than anybody else you know! He is also Managing Partner and CEO of The YPS Group, Inc., a management consultancy focused on sales and sales management. Check out Intentionally Vicarious at
This is a Guest blog post by Kerry Moynihan, Partner at Boyden.
WHY LEADERSHIP MATTERS MORE THAN EVER
A Very Brief History of Private Equity
The origins of today’s private equity industry (which I would define as including both venture capital and leveraged buyouts) date to 1946 with the foundations of American Research & Development Corp. (ARDC) & J. H. Whitney. Prior, risk capital had almost exclusively been the domain of wealthy families. Venture capital pioneers Mayfield and Kleiner Perkins were founded in 1969 and 1972, respectively. In the buyout realm, the origins of LBO pioneers KKR began at Bear Stearns with “bootstrap” investments in the early 1970s, forming the foundation of the firm as we know it today. TH Lee; Forstmann Little; Welsh, Carson, Anderson & Stowe; and GTCR were all in operation by 1980 and became major players. The modern private equity business continued to emerge in the 1980s with the realization that there were major discrepancies between public company management interests, the age old “agency problem” and the values that could be unleashed were business units to be decoupled from large public companies. The year 1980 saw some $2.5 billion raised dedicated to the emerging alternative asset class and in the decade that followed nearly $22 billion was raised by venture and buyout funds.
The wide availability of junk bond financing fueled a boom during the 1980s, followed by a crash as the stock market tanked in October 1987. High yield financing, or “junk bonds,” dried up for a time, and Drexel Burnham, the leading purveyor of these instruments, later went down. However, institutional investors had certainly picked up on the higher returns available to PE than in the public markets.
Key to these were the availability of debt financing, the disparity between management that were merely salaried and those that were incentivized by equity, and the discrepancy between public and private market information. For much of the next two decades private equity vastly outperformed the public markets. Clearly, the emergence of technological innovation in software, semiconductors, and telecom fueled the venture side, while widespread industry consolidation and globalization largely propelled the LBO market.
As ever more money flowed into pensions and other institutional investor funds, the demand for higher yields accelerated. This put more capital into the financial markets seeking higher returns and the boom continued. Of course there were blips and shocks, including the Foreign Debt crisis of 1997/98, the bursting of the dotcom bubble around 2000, the cessation of normal market activity following the 9/11 attacks, and perhaps most seriously, the major Financial Crisis after the collapse of Lehman Brothers and Bear Stearns in 2008.
However, markets rebounded, time and time again. Institutional capital, which seems to have a short collective memory, always seeks ever higher levels of Alpha (relative return) and will accommodate Beta (risk), often in unison, seemingly without independent, objective decision-making.
Institutionalization & Growth of the PE Industry
Funds were usually (relatively) small and privately held, and made individualized, partner-driven investment decisions. Yet as their size has increased, and in many cases the larger funds went out to the public markets, the industry has fundamentally changed. Now publicly traded, firms like Apollo, Blackstone The Carlyle Group, and others are, as the co-founder of one confessed to me “No longer in the business of making extraordinary, outsized returns on unique investments. We are now in the asset management business. If we can beat the S&P by 150 basis points and put huge sums to work from institutional investors, we are happy and the investors are happy.“ With the traditional model of a 2% management fee on assets under management (AUM) and 20% capture of the return on investment, the carried interest, who would not be?
Where a billion dollar fund was once considered a large player, there were over 350 by 2018 and even more today. There has been a veritable explosion in investment in the sector, as uninvested cash, or “dry powder“ at PE firms exceeded $1.5 trillion by the end of 2019. Blackstone alone, the Wall Street Journal reported, had $150 billion in cash to invest at the end of last year. Institutional Investor reported in July 2019 that 4000 funds were seeking to raise an additional $980 billion, up from 1385 funds seeking to raise $417 billion just four years earlier.
Yet in the 2010s the number of publicly traded companies stayed roughly the same while global AUM for PE firms and the number of PE-backed companies doubled, according to McKinsey & Co. It comes down to simple economics as more money is chasing fewer good assets, hence driving up prices, and reducing returns. S&P reported in November 2019 that the average pro forma EBITDA multiple was 12.9, up over 30% from pre-Financial Crisis pricing. The massive leverage, low prices, and eye-popping returns of the 1980s are but a memory. What is a simple fund to do?
Adding Operating Expertise
Importantly, funds have changed their own internal structures over the last several decades. Almost no funds had seriously tenured operating executives as part of their investment teams in the 1980s, being almost exclusively comprised of “recovering investment bankers.” The 1990s saw a bit of a change, but now almost every major fund has hired people who have more than an investment banking/finance background and have been senior operating executives who have actually run P&Ls. In many cases these are actual full partners in the funds, as the Silicon Valley venture capital community was quicker to adopt this model, typically by adding tech CEOs to their rosters, than the Wall Street LBO community. Many are termed Operating Partners or Management Associates, but whatever the nomenclature, there has been a collective recognition that strictly financial engineering and financing skills are necessary, but not sufficient, to create outsized shareholder returns.
Most of my clients and many of my good friends are private equity professionals. Without naming names, an informal survey confirms the general thesis that by training they are not prepared to run the businesses that they buy. Increasingly they recognize these facts, despite being “the smartest person in the room“ on virtually any topic (sic), in the not so distant past.
Where Are We and Where Are We Going
Fast forward to today, the late 2010s and early 2020s. The game has changed significantly, to say the least. Not surprisingly, many of the factors that led to the tremendous success of the industry in years past have changed dramatically. There is a changing reality and investment firms have, with varying degrees of success, made adjustments. For example:
Financial engineering is no longer adequate.
Given the low interest rate environment of recent years, and explosion of alternative lenders such as credit funds, beyond the traditional large banks, a giant fund enjoys little advantage over a smaller one on the availability of financing or borrowing terms. And, let’s face it, even if KKR or TPG can borrow at 25 basis points lower and with slightly less restrictive covenants than XYZ Capital Partners can, that factor alone is unlikely to be the deciding factor between the success or failure of an investment.
Globalization of the industry
Where venture capital and leveraged buyouts were virtually exclusively a US phenomenon just a few decades ago, today according to various studies, only about 55% of global private equity activity is in North America today. While Africa and Latin America are somewhat underrepresented, Europe and Asia are booming in this respect and the former may well catch up over time. It has become, as in so many industries, a much more competitive, truly international playing field.
Ubiquity of information has changed the game
The asymmetry of information that led to smart buyers and uninformed sellers is simply no longer the case. The incredible proliferation of information and ease of access on a global basis means that sellers, even of relatively small and unsophisticated businesses, have a much better handle on the overall market than in the past. An investment banker friend and I have a running joke that Old Uncle Burt, selling his cornfield in Iowa, knows that he can command 7.8 to 9.3 times EBITDA these days and will have five buyers lined up! In short, because of this the market is much more ruthlessly efficient, further evidenced by the dramatic expansion in the number of deals done and in the ever higher multiples paid for them.
The Model Still Works
The increased volatility of public markets, however, continues to make private equity attractive. What was once termed an alternative investment is certainly now very much in the mainstream for most sophisticated investors. However, the delta in returns between public markets and private markets have flagged in the last several years. As Bain & Co. noted in its 2020 Private Equity Report, “10-year public market returns match PE returns for the first time.”
Yet the current crisis, at the same time akin to the ones we seem to have every five or 10 years, and on the other hand of unprecedented scope, has obviously put an enormous dent in the wealth accumulated in the stock market. The ability to be patient and not have to respond to quarter-by-quarter earnings can allow private equity investors to take a more strategic, long-term view and ride out much of the fickle fluctuations of the financial markets.
This may seem a bit ironic, since most PE funds would love to be in and out of investments in a 3 to 5 year timeframe if possible. But with the public markets bouncing as violently as they are, private equity will remain a very attractive industry, both for Limited Partners as institutional investors and General Partners, the PE funds, as the custodians and direct investors of those funds.
Executive Leadership Matters, Now More Than Ever
Over time, more and more funds have gone to a model of backing individual executives or executive teams in what I call the “Back-able, Bankable Leadership“ model, or BBL. Both venture and buyout funds have increasingly backed executive leadership that has had prior success and will continue to do so. The proverbial “Holy Grail“ for investment funds is to find management teams that are proven and have as close to a proprietary idea as possible. By this I mean either a specific target company(ies) for acquisition or a well-developed investment thesis with demonstrable potential acquisition targets.
How much better to create a situation where you have an organic genesis of an investment, rather than competing in a broad auction scenario against many other funds. In the latter case, the “winner” of an auction may be successful in acquiring a business, but a loser as an investor, having paid too high a price at the outset.
An old saw in investing circles is that “You are more likely to win by backing an ‘A’ management team with a ‘B’ plan over a ‘B’ management team with an ‘A’ quality plan.“ At no time has this been more true than today, as many firms actually have to reinvent their business models on the fly. As we face unparalleled turbulence in the markets, especially given the latest crisis, never has leadership, true leadership, been at more of a premium. Operational excellence, coupled with the genuine ability to inspire, will always be valued. In short, today it is more critical than ever to actually run businesses better.
Effective executive leadership makes all the difference. It certainly makes me quite sanguine about the prospects for the executive search industry in partnering with private equity clients to create value. Successful investors invest in superior management and leadership, especially when competition is greater than ever and times are uncertain, to say the least!
Kerry Moynihan is a Partner at Boyden. He has had a distinguished career of more than 30 years in executive search, making a significant impact on client organizations through strategic talent acquisition and development. Working across a range of industries, he specializes in partnering with boards of directors as well as private equity firms and the C-suite executives of their portfolio companies to deliver for investors. He can be reached at email@example.com.
This is a Guest blog post from Sandy Barger, Partner and CMO of Chief Outsiders.
You guessed it, digital marketing will reign supreme once retail business resumes.
A February Market Trends 2020 survey of chief marketing officers (CMOs) with experience across both Fortune 500 and emerging brands shows the strong continuing trend toward digital advertising, with 80% of CMOs expecting to increase digital spending this year. A few weeks later, COVID-19 hit and digital became even more of an influence. Social distancing and working from home forced people to accelerate their movement to digital across all walks of life—from personal to work to social. Zoom alone grew to 300 million daily participants versus only 10 million back in December. As marketers continue to increase their focus on digital marketing, the top priorities will be on tactics that provide additional information, including organic searches, email marketing, paid search, and content marketing.
Most businesses know digital marketing and providing customers with information is important. In fact, these are usually the first marketing actions companies take. However, “lack of information” is not a problem. Studies show customers are bombarded with information, receiving up to 10,000 brand messages a day, according to the American Marketing Association. Rich content doesn’t just deliver information but provides the right information. The Digital Age has made for a more sophisticated and informed type of customer. While slogans and taglines may still catch attention, customers are looking for details and, in this competitive landscape, brands must get their stories right.
To break through the clutter, creating the “right” story must include what people are looking for. At the core of failed marketing tactics is a lack of WIIFM, an acronym that looms large in the storytelling paradigm and stands for “What’s in it for me?” It’s an essential question the answer to which can make or break the connective tissue that bonds your marketing story to the customers. Luckily, there are steps you can take to create a compelling brand story with a successful WIIFM.
5 STEPS TO COMPELLING DIGITAL BRAND STORIES
1. Understand Your Target Audience
We see it all around us today, the many different and often polarized points of views. We see it in our political system, our news, and our tastes—onions or no onions. To create the right story, it is important to consider the unique needs and interests of your target audience. For that, sound research—both qualitative and quantitative—is needed. While data from an expert research company yields the best insights, it is not the only option. Lower investment options such as customer interviews or surveys through online tools such as Survey Monkey provide valuable insights.
2. Understand Pain Points or Motivations
While companies are currently providing lots of information, it is usually about the company and focuses primarily on the product or service features. In doing so, companies often require customers to make the leap to the “WIIFM” themselves. To effectively communicate “WIIFM” it is critical to understand your customers’ pain points or motivations. Addressing pain points such as likes, wants, needs, and fears makes for the most compelling content. That’s referred to as the Persuasion Code.
Here’s a case in point: A technology company recently developed a new innovative service solution. The launch of the service generated a significant amount of awareness, but it did not convert into sales. The reason is the messaging failed to identify current, compelling pain points. It ultimately was able to drive sales by retooling the messaging to focus on its attention-catching innovations and how they could address target customers’ existing pain points.
3. Develop Authentic Claims
Customers are very vocal about their satisfaction with products, which is helpful for brands. In fact, word of mouth referrals and reviews are the most compelling source of information for customers. With the Digital Age, customers, both satisfied and dissatisfied, can amplify their points of view. A study in 1983 found that 85% of customers dissatisfied with a clothing item told an average of five people. (Richins 1983). Now a dissatisfied customer can tell thousands—instantly.
Over two-thirds of business customers rely on reviews and 67% of survey respondents said that the reviews they saw online made an impact on whether or not they purchased a product. Companies and businesses can lose as much as 22% of their customers with just a single bad review or article. (Moz.com study).
Reviews are not always fair. In fact, 39% of reviews are false (Best SEO Companies), but someone reading that review does not know that. So to get positive reviews and avoid negative ones, your marketing message needs to make use of authentic, clear, and truthful claims. You then need to deliver on the expectations the messaging is setting.
4. Provide Competitive Points of Differences
Now that the brand has developed the messaging that will create an action, the customers must understand that action should be with your brand. New technology and factors such as globalization have resulted in fewer barriers to entry and more competition across all industries. A compelling story needs to include the brand’s unique value proposition and/or how the product or service is different from the competition. Otherwise, the brand has created the demand for someone else to capture.
5. Provide Proof
Customers are skeptical of brand claims. In fact, 63% of customers say they trust what influencers say about brands much more than what brands say about themselves in their advertising (Edelman 2019). Given this lack of trust, it is important to provide proof. There are several ways of doing so from statistical data, case studies, demonstrations, and of course, social media influencers.
Today’s customers are digitally savvy and have endless access to information. To get them to move from awareness to action requires more than just information. It requires a consistent, compelling story…and that requires a step-by-step development of “WIIFM” messaging.
Sandy Barger is Partner and CMO with Chief Outsiders, an American fractional CMO group. She works with B2B and B2C companies on product development, go-to-market strategies, and lead generation. Find more info at http://www.chiefoutsiders.com
This is a Guest blog post by Steve Pimpo and Bill Rossello of Greenhouse Consulting.
Common challenges we see and how to overcome them
Most business owners will come to the point in their journey when they feel it’s time to sell the company. They have spent a lot of time successfully building and growing their business, but most times are unprepared for the scrutiny and questions that they will face when being evaluated by a prospective “buyer” and their advisors. Based on our own experience and input we solicited from investment bankers, only about 10% of companies with owners seeking to sell are actually ready. Here are some of the reasons why:
Customer Diversity – A high percentage of company revenue comes from one client or contract. Unless a potential acquiring company is trying to “buy” into a market, buyers like to purchase companies that have a diverse client base or unique service or product offering.
Company Narrative – Some owners use the same sales pitch to pitch to prospective buyers as they do to customers. Communicating the value of a company to a potential buyer is different from selling services to a customer. You need to recognize what buyers want and articulate what is special about your company.
Financials – Sometimes there are accounting inaccuracies that can’t support “quality of earnings” or EBITDA adjustments. You need to ensure that financials are accurate and realistic and can stand up to the scrutiny of a potential buyer’s audit.
Quality of Contracts – Many prime government contracts are “set asides” or subcontracts and there is no clear path to transitioning them to a larger company. You should be prepared with a valid contract revenue waterfall, and a plan to transition set-aside contracts and relationships.
Management Commitment – Ownership hasn’t taken steps to ensure that the leadership and key players are “read in” and will remain with the company post-transaction. People are part of the “goodwill” and company “brand.” It is important to show buyers that there is a plan in place to retain these key employees through to the transaction and beyond.
New Business Pipeline –Buyers will hone right in on your pipeline looking for two things. Is the pipeline full of legitimate prospects and is your pipeline tracking system logical and consistent? If it does not consider reasonable estimates of gross and net revenue and probability of win, it’s not likely to pass a buyer’s sniff test. You need to be ready to justify the reasons you selected each big deal and why you think you have a good chance of winning.
Strategic Growth Plan – Many sellers lack the ability to articulate to potential buyers, a bona fide growth plan, one that paints a credible picture of where the company could go over the next 3-5 years with the power, resources and reach of a larger firm. You need to have that narrative ready to go when you put the company on the market.
Valuation Expectations – Often owners have an unrealistic expectation about the “multiple” of EBITDA or revenue a buyer will pay based on what their peers or friends have received in their transactions. Make sure you focus only on the value of your own business, what similar companies have sold for. Put yourself in the buyer’s shoes. Will they really pay for a tool that does not generate repeatable revenue? Or take a huge risk of paying a high multiple for a company with some of the issues raised herein? Talk to transaction experts and, if you’re willing to pay for it, get a formal valuation prior to putting your company on the market.
Your Near-term Future – Some owners just want to retire or quit the business after the transaction. If you’re the person who manages the company’s client relationships, or you’re the chief technologist, or if there is a major upcoming re-compete, the buyer is likely to want you to stick around for a while after the deal is inked. And there may be an “earn-out” provision that ties some portion of your proceeds to achieving certain objectives over that timeframe. Before you put the company on the market, be sure to consider how you would answer a buyer if they ask you stay on.
Due Diligence Preparation – There needs to be sufficient organization and appetite toward due diligence. The process is inevitably painful, invasive and underestimated. Approach this as a client engagement or actual project and assign one individual to own/manage responsiveness and production.
Without question, selling your company will be the most important professional decision you will ever make. If you address these issues prior to formally starting the process, you will get more attention from investment bankers, dramatically increase the probability of a successful transaction, and likely increase your proceeds too. Most investment bankers don’t have the time or resources to help you address most of the things we have identified. Even worse, they might see you as an unsophisticated seller and probably turn down your business. So, commit the time, effort and resources to prepare 12-24 months before you call the bankers.
Steve Pimpo and Bill Rossello are Principals and co-founders of Greenhouse Consulting, a Washington, DC based business that provides management consulting services to help companies grow or prepare to sell. They can be reached at firstname.lastname@example.org and email@example.com, respectively.
This is a Guest blog post from Ling Zhang, Senior Manager at Dixon Hughes Goodman LLP. She covers a lot information which is extremely valuable for small businesses.
“Cash is King” for businesses, especially when they are drifting in the rough currents due to COVID-19. What can technology, services, and life science companies do to survive the challenges and thrive through oppotunities in the current economic conditions? Here are a few considerations for innovative companies to manage cash flow since the pandemic’s inception.
Utilizing the CARES Act and New Laws and Legislation
Businesses have been following new legislation closely and, when possible, taking advantage of cash flow assistance from the federal government to increase liquidity. The following is a list of programs created by the CARES Act that support small businesses:
1. Paycheck Protection Program
As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Congress had appropriated $349 billion for the Paycheck Protection Program (PPP), providing loans of up to $10 million to certain qualified small businesses, and also offering forgiveness for
all or a portion of the loan. As the first round of PPP funding has been utilized, a new funding package has been approved for the PPP for $480 billion, which appropriated an additional $320 billion for the PPP.
The new funding package, passed on April 24, 2020, also includes $60 billion for the Disaster Loans Program and Emergency EIDL Grants.
2. Small Business Debt Relief Program
This program will provide non-disaster Small Business Administration (SBA) loans, specifically 7(a), 504 and microloans not made under the PPP. Under this program, all payments on these SBA loans, including principal, interest and fees, are covered by SBA for six months.
The program provides loans up to $2 million and emergency advances up to $10,000 that are not required to be repaid.
The CARES Act also has the following tax provisions available:
1. Employee Retention Credit
A refundable payroll tax credit for up to 50 percent of wages paid to certain employees is available to eligible employers during the COVID-19 crisis through Dec. 31, 2020. This credit is not available to employers receiving
2. Delay Payment of Payroll Taxes
Taxpayers can defer paying the employer portion of certain payroll taxes during the period beginning on the Act’s date of enactment and ending on Dec. 31, 2020. Half of the deferred amount is due on Dec. 31, 2021, and the other half is due on Dec. 31, 2022. For PPP loan recipients, the Internal Revenue Service (IRS) FAQs1 clarify that taxpayers may defer the employer portion of Social Security on wages paid between March 27, 2020, and the date which the lender issues a confirmation of loan forgiveness for the recipients’ PPP loan.
3. Other Tax Provisions to Accelerate Cash
Other tax provisions include correction of Qualified Improvement Property depreciation; use of excess business loss and Net Operating Losses; and use of Corporate AMT Credits. Consulting with a tax professional may help increase cash flows through maximizing tax refunds and tax planning for the business. Please reach out to your tax advisor to evaluate possible solutions as these may be complex decisions.
4. Main Street Lending Program to Provide Liquidity to Small and Mid-Size Businesses
These four-year term loans are for companies that have less than 15,000 employees and $5 billion in revenue and have a minimum loan size of $1 million. The loans are generally available even if you have received a PPP loan and there is currently no indication of “affiliation” rules that disallowed many private equity portfolio companies from eligibility for the PPP loans. The loan size is generally based on a multiple of 2019 earnings before interest, taxes, depreciation and amortization (EBITDA), which can be adjusted as permitted by lending institutions, and includes existing debt.
The Families First Coronavirus Response Act (FFCRA) also provides refundable tax credit as follows:
Eligible employers are entitled to refundable tax credits for qualified leave wages that are paid, during the period beginning April 1, 2020 and ending Dec. 31, 2020, for specified reasons related to COVID-19 under the FFCRA.
Federal and state governments are continuing to evaluate
additional assistance to businesses.
Turning Challenges into Opportunities
Many leaders of technology, life sciences and service companies, including technology giants and small businesses, have pivoted during the pandemic in different ways by identifying opportunities, and taking immediate action to generate cash to secure a future for their employees while contributing, in their own unique way, to find a vaccine.
Examples include life sciences and medical device companies developing and selling antibody or COVID-19 testing kits; tech manufacturers making ventilators; SaaS software companies offering free HR applications to help manage the health and safety of employees; cyber security information technology services companies developing tracing technologies and providing services to help mitigate cyber security and privacy risks of work-from-home arrangements; services firms providing assistance on the interpretation of new legislation; and more.
Managing Cash Flows
Tech and life sciences companies should also assess key performance indicators (KPI), monitor budget versus actual analyses more closely and frequently, and deploy a plan to manage cash flows through the pandemic and beyond. Companies can consider the following areas to manage internal cash flows in response to the current environment:
1. Accelerate accounts receivable collections through active collection efforts and/or evaluating new technologies to allow customers new payment methodologies;
2. Manage vendors by initiating dialogue and negotiations with extended or delayed payment terms;
3. Classify expenses by variable versus fixed, and consider plans to cut spending on variable expenses where possible. Seek concessions on fixed expenses such as rent abatements, delay in payments, or extended payment terms;
4. Evaluate plans to reduce salary expenses including furloughs, salary reductions, and/or a reduction in force;
5. Seek additional financing opportunities through loans or use of availability on lines of credit;
6. Revise and develop new cash flow forecasts from operations for various scenarios – three-to-six months or even longer if necessary.
As a Senior Manager in the DHG Technology practice, Ling Zhang works closely with client management and C-suite executives to provide audit, financial accounting advisory, and risk advisory services to multi-national publicly-traded corporations and private companies with revenues ranging from $10 million to $50 billion. She advises clients on SEC filings, complex debt and equity transactions, merger and acquisition, new accounting guidance implementation, internal control system design and implementation, and financial statements reporting and disclosures. She can be reached at firstname.lastname@example.org.
This is a Guest blog post from Thomas Ma, an awesome up and coming entrepreneur whom I have had the pleasure of watching grow these past few years. He is the LA-based Co-Founder of Sapphire Apps Media. This is great reading for any young person or aspiring entrepreneur. Lots of lessons learned. Enjoy!!
I still remember it like it was yesterday. I was heading home from my last final of the semester to wrap up my junior year in college.
I had no internships lined up, and no idea what I wanted to do with my life. All of my friends had internships and it seemed they had their professional career figured out.
Nope not me. No one called me back. Since it was the last day, I decided to take one final stop at the college career center to see if they could help me out.
This is when I bumped into one of my friend at the career center and we started talking. Suddenly I started to get all these ideas in my head.
From that moment, I went back to my apartment, and continued to carve out my idea. I didn’t stop. I put 100% into it from that day. Of course it started out slowly. I had a lot to learn.
One Fun Fact:
It took me from May 9, 2015 — April 2017 before I had my own company bank account. That’s nearly 2 years!
In light of this 5 year mark, I wanted to put time and share what I would do today especially in this pandemic. My hope is to get other people to progress with their own journey. This advice is good for any type of industry.
1. Marketing yourself on upwork.com
2. Building out your network
3. Be vulnerable and share your journey
4. Learning a New Skill
5. Tools that you should know about
6. Outsourcing Talent
7. Digital Marketing
8. Building your digital brand
1. Create an upwork.com account to market yourself
Study other people in your industry. If you are into consulting, you look up consulting on upwork.com
Look at the following:
Hourly rate, $ they’ve earned, success rate, and country their from.
In this case, Kim has a great profile. He has a high success rate and over 6 figures earned.
Here’s his profile:
Look at is his hourly rate, title and what he is putting in his summary. It’s clear that he’s getting reached a lot.
Below his profile is his work history. Study how much he has earned and how much people are paying him.
Do this for 5–10 of the top earners int his category. This is the benchmark.
Try your best to optimize your profile so that it matches up with some of the best on Upwork. When you apply, at least you will stand out.
As you build your account in the beginning, it’s going to be tough. You’re going to have to be relentless. This means applying to as many jobs as you can. It may even mean not making a lot of $ to build up your profile.
Review and job success rate is critical to standing out as an applicant.
2. Build out your network
When starting out, it’s critical that you have a network. In order to thrive in what you do, you have to surround yourself with like minded people. These are the people who you will hang out with the most and learn from. You will also progress with these people and it’s amazing to celebrate milestones together and also being there for one another when things don’t go as planned.
If you don’t have a business network, it’s okay 🙂 I will share some of the things that I would recommend.
Before you build your network:
Make sure to optimize your social media profile with what you do. That includes Instagram, Facebook, Linkedin, etc…
This way people get a sense of what you do when you connect with you.
Here are a few places you can find events or meet people:
The strategy applies to all the platforms below: When you join the platform, go to the search bar and enter keywords that relate to your niche. If you were in fitness, you could try wellness, health, fitness, coaching etc.
Eventbrite (Tons of free online events)
Instagram DM (search out hashtags in your industry and engage with people)
If you join a new group, read what members are posting. Engage with their post if you like it, and add them as a friend.
If they accept you as a friend, shoot them a compliment and let them know you liked their post. If they respond, ask if they are interested in connecting with you via zoom.
While on zoom, spend time genuinely getting to know the person.
Things you can talk about:
How covid has impacted you
Your background on how you started
Sharing what you’re passionate about
Why you started
The purpose of this is to build your own network. If people genuinely get to know you, they’ll support you. You never know who they know.
After you connect, you continue to stay in touch with them and invite them to events that you hear about.
As you continue to evolve your network, you will have access to more events.
This strategy can even be applied to zoom hangouts. To engage on zoom, you can send them a private message and use the same strategy.
In the space of creating your own brand, showing up is half the battle. You have to show up and build your network every day. Make it a goal to fill up your entire calendar with zoom events and zoom meetings.
Things to avoid at networking events:
1. Don’t ask the “what do you do” question. That’s straight to the point of what they do and it shows you don’t even want to get to know them for who they are
2. To be efficient with your time, you can state that you have 30 minutes or whatever at the beginning.
3. Don’t talk too much about yourself unless people ask you questions. If you talk a lot, you’ll never be able to learn about the other person. You have to make the other person feel special that you are talking to.
A small recap on networking:
If you are starting out, you can do the following to ensure you progress every week.
Start off by booking one event per day on your calendar
Make a goal of how many zoom connect meetings you want to take. Maybe in the beginning, make a goal to meet 5 people per week and then scale up.
If you meet someone and share common interest, offer to collaborate with them. You can collaborate by co hosting a happy hour with your joint network. This way you meet more people and so does your new friend.
If you are able to host events, you become the go to person for that event. People will get to hear you. This way you expand your network at a faster pace.
If you host great events, make sure to do it on a weekly bases. As you host more events, people will bring their own network.
3. Be vulnerable and share your journey
When I started, I used to take a selfie photo everyday of my Starbucks cup or wherever I was at in the world. I’d post most of the stories on Linkedin.
I wanted to show people what the journey was like. Overtime, I was able to build more followers because people liked hearing my story.
The reason for doing this is because it builds your digital brand. The more people know about you, the more they can potentially help you.
One networking tip here is to connect with people who like your post. Right away you have something in common.
4. Continue to learn
One of my favorite podcast to listen to is NPR how I built this by Guy Raz. It has stories from some of the great entrepreneurs in the world.
It’s nice to hear how someone started and made traction.
Read articles on medium.com especially the entrepreneurship articles
Stay active in the reddit entrepreneur community. A lot of people post insightful advice on there, and it’s an easy way to connect with a small group
When you make your job listing, you want to have the following:
-Catchy Header (study other people)
Clear instructions on exactly what you want and keeping it short and brief
Follow up questions that the applicant should respond to
Here are some I recommend:
What is your hourly rate
What is your working hours
Have you read the instruction? If so, how much and how long would it take to complete
Do you have a portfolio?
All the questions above help filter out who is a good candidate and who isn’t.
If you like their answers, you can give them a small paid tester. If they pass it, you can give them a larger project.
Always let people know if they do good work that you will have more projects for them.
When you find someone you like, you can add them to your roster.
If you master the ability to outsource, you can scale a creative agency. This means you can find clients who need a service. An example is if you had a bunch of designers you liked, you can market yourself as a creative agency who does graphics.
Add your creators work to your portfolio. Show people your work. Find clients who are willing to pay.
Once you find clients who are willing to pay, you give the work to the person you liked.
Recap for Agency via Outsourcing
Test talent. If their good, add them to your roster
Show case their work
Find clients who are in need
If client is in need, then they will pay you for the services.
Give the project to the remote person. Make sure they meet your deadlines
7. Digital Marketing:
Learn how to run paid media ads on Facebook.
Steps I would suggest:
Start to do a deep dive on free courses that they offer online
OPTIMIZE the keywords. They give you 10 for a reason. Think of words people would search if it was someone looking to attend your online class.
Leverage all the keywords in the main title
State the time, timezone, day, and date in the header
Find a clear stock photo that stands out. I use Unsplash.
Add questions they have to answer. In my eventbrite, I ask people where they come from. I also suggest they join my Facebook fitness community.
Facebook Groups are key! It reaches more people. If you post an event, you are able to invite every single member in the group.
Nurturing your audience:
Engage with people before class. Ask them where they are from
Throughout your class find a way to get users to engage. In my fitness class we do virtual high fives and fist bumps
Bring people together after the event. At my events, we take a group photo online
Reach out to people who attended your class and thank them. They’ll appreciate it
Remember people’s first name. Especially if they come back.
Livestream your events. This way more people have access.
Why you should build out a digital brand:
People can learn about you. If they like what you do, they will come back. If they continue to come back, they will bring friends to join them. Overtime, this is your fan base that supports you. It’s important that you are able to identify your super fans.
My hope is that this will give you the small push to get you started.
No matter what happens, be proud of what you do. Do things because you want to. Don’t do it because of someone else telling you what they want for you. It’s your journey. Make sure you can smile and have fun with your choice.
If you are looking for a good community to join, this is the one I created:
Sapphire Stories: A Community of Passionate Doers
Community of Doers who are pursuing their passion. Our goal is to connect and inspire you with your own journey. Follow…