There is some great business inspiration we can get from nature.

When I became Chief Executive of the Communication Workers Friendly Society it was at a time of major change in the Financial Services sector which meant seismic change for many friendly societies in the long-term insurance business.  I knew that to flourish we would need great service from our professional advisers; accountants, actuaries, fund-managers, solicitors and IT support.  I also knew, from having been a professional adviser (accountant), that large clients gobble up advisers’ attention in times of need and the minnows are left at the end of a very long queue. I set about changing that by making my organisation look bigger than it was.  I involved myself with the Association of Friendly Societies (eventually becoming President), various industry groups and represented friendly societies on the Small Business Panel of the Financial Services Authority, the industry regulator (now reformed and renamed). I was seen as having reach and influence and therefore someone to keep sweet and engage with; I could let the professional advisers know about the pressing issues facing their clients and prospective clients. I referred to this as my Puffer Fish project.

One of the association members was the Metropolitan Police Friendly Society (now rebranded Metfriendly) with a proud history since 1893. Members of the Met Police ‘family’ are very loyal to their friendly society, which I believe exhibits the original ethics of the friendly society movement in a modern manner. To continue the animal analogy, I would consider them a cuckoo when it comes to marketing. Cuckoos, dove size birds, lay their eggs in the nests of other birds and pass the hard work of raising chicks on to them. Metfriendly allow other, much larger organisations, to do their marketing for them, bringing the need and benefits of financial products to their members’ attention safe in the knowledge that police officers will buy from their friendly society. Metfriendy focus their attention on great customer service and promoting friendliness.

Cuckoos made me think of the birds and bees and reproduction. Plants want to get pollinated and some have managed to get bees involved in this process. Bees have absolutely no interest in plant reproduction; they are only interest in their own reproduction and food. Plants provide the bees with food, nectar, to get them into the process. To let them know it’s there they have brightly coloured flowers; they also have mechanisms to ensure the pollen gets carried away by the bee to fertilise a neighbour. We can learn some businesses lessons from this; stand out, let people know what you are offering, entice them in and make sure they do something that is of benefit. This might mean attracting them with a free offer and getting their interest and, ideally, their contact details. If you have a think about the concept, I am sure you will come up with some great ideas. Remember your nectar may not be what you are selling. With the birds and the bees both benefit.

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Are you working hard when your business could be working harder?

This post was prompted by a great example of a business getting it right. To set the scene I will first write about businesses getting it wrong.

Very often businesses do not get the best out of the activities they engage in. Trade shows are a good example, businesses will exhibit, or visit, without getting the maximum value available. Often what is achieved is a very lacklustre performance. It will be decided to attend a particular show and a lot of money will be spent on booking a stand space and making it look nice, sorting out travel and accommodation for staff. Sometimes thought will be given to what the desired outcomes are, which could be sales, increased brand awareness, product launch, collecting names for a marketing database, etc. Surprising very often those outcomes are not thought about. Even when they are they are poorly executed because the staff on the stand are not motivated and can be seen sitting staring at their smartphones, perhaps expecting potential customers to wait until they deign to look up and speak to them. Very little planning will have gone into pre-show activity (publicity, inviting key customers to visit, etc.) or post-show activity (publicity, following up leads, debrief, etc). When I attended the National Running Show as a visitor, I wrote a blog post about it the following day and sent it to the organisers. They included a quote from it and a link to my website in the email they sent out to all show attendees a few days later. Amazing publicity for just a little bit of effort.

Now to the good example. I have written several articles for the Rad Season website which is described as the ultimate hub for the world’s best experiences.  It’s a one-stop-shop for all your action sports and adventure festival booking needs. Obviously with the restrictions on travel imposed because of the Coronavirus pandemic there is not a lot of experiences happening. Rad Season has started a series of podcast interviews with their contacts on a whole range of sports and travel experiences to stay engaged with their followers. I was one of those interviewed, and here is the good bit, Rad Season made it extremely easy for me to promote that podcast, both before the event and after. They supplied useful links to the material on various platforms (never thought I would be on iTunes) and great graphics with quotes from the interview to make it extremely easy for me to post on social media.

That same process, which was put in place before the project started, is repeated with every interviewee. Rad Season made it amazingly easy for us to publicise ourselves, and therefore them, to our networks extending their reach massively and to remarkably diverse audiences who were still people that would want to interact with them. That’s smart leverage; that little bit of extra effort made the asset, the podcast, work hard for them; it also meant they had lots of willing helpers, the interviewees, working at spreading the word.

How can you make your assets work harder and get that extra reach?

Solve your customers’ problems and they will buy from you.

My first business was selling ice-creams from kiosks on two sites in Cambridge, Lammas Land and Jesus Green. The Lammas Land site was close to a paddling pool and playground which was very well used, so when the sun shone it was busy. However, I was eager to increase sales and would put a sign out alongside the river Cam to attract punters (people in punts) to the kiosk which was not visible from the river. I was disappointed with the trickle of customers, then one day, when I was putting the sign out, a passing punter asked where the nearest toilets were. Light bulb moment, they are near my ice-cream kiosk – the next day there were two signs, the original one and another saying toilets. The trickle turned into a stream and, on sunny weekend days during the holidays, it was a flood.

The other kiosk was on Jesus Green with one side opening onto the open-air swimming pool and the other onto the green space. It did not turnover over as much as the Lammas Land site; however, in the height of summer when the pool was busy it made more profit because it sold more food, which had a better profit margin. On Sundays in July and August the Council organised concerts using the bandstand – normally brass bands. On those days I sent someone out on a tricycle with a fridge full of ice-creams and lollies to save people having to walk to my kiosk, which was some distance away, and to sell to those people who were too lazy to walk to the kiosk..

A chance conversation with a customer, who had come over for a coffee and a hot dog, led to another good business tactic. He loved the music on Sundays as it was a good reason to come out. He said it seemed strange to come to the park without a reason. A lot of other people must have felt the same because sales on Sundays from the green side of the kiosk were not good in other months. The next day I approached the Council to see if they would put concerts on in June and September as they were good weather months. They had no budget so I came up with a plan, if they would let me use the bandstand, I would put concerts on in June and September. I didn’t have the budget either, so I asked bands to play for free and they would be allowed to have a collection. We had some great concerts, Brass Bands, Jazz Bands and even a Jamaican Steel Drum Band. I sold a lot of ice-cream, the bands loved playing and the people of Cambridge were entertained. Win, win, win.

I’ve always found helping people pays dividends. More recently I was contacted by someone I know vaguely who wanted me to put her in touch with a mutual friend. She had been emailing him asking for some information about the Comrades marathon as she had been asked to write an article about it. She had the right email address; my friend had just not responded. I have run Comrades a few times, so I answered her questions. At the end of the conversation she suggested I contact the editor to see if I could write for him as her career was moving in a different direction. I did just that and when he needs a running article, he turns to me.

He recently recorded a video interview with me about running and in particular the Kalahari Augrabies Extreme Marathon in South Africa. Great for publicising the Trailrunningman business and the race in the South Africa. I wonder who the UK agent is? Oh, it’s me 😊

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Never hurry a Murray Mint

A little while ago someone in an online networking meeting said that he was new to being self-employed, having previously worked for big companies. While an expert in his field he knew nothing about all the other bits and pieces you must do when you run your own business, and he said he would welcome any advice. I typed in the chat box ‘Never hurry a Murray Mint’. I saw him glance to the right to read the message and then smile. Job done; connection made. That was also the moment I decided to create the Businessthoughts blog.

The title for this post comes from the jingle in a television advert for Murray Mints:

Murray Mints, Murray Mints too good to hurry mints.

The advert was first aired in 1955 (although the sweets came on the market in 1944) and Murray Mints were the first product to have a jingle. Just mention Murray Mints, which are still on sale, to people of a certain age and they will sing the jingle in a reaction that would make Pavlov proud. This illustrates the power of adverts and jingles. You can view the advert on YouTube.

There are a lot of business lessons to be learnt from Murray Mints. The first is the power of alliteration; would the sweet have sold as well had they been called Thompson Mints Just look at the world of entertainment for the answer: Mickey Mouse, Betty Boop, Pink Panther, Desperate Dan, Roy Rogers, Hulk Hogan – the list is massive. There are exceptions, for example Dennis the Menace, they rely on the other device in the jingle, rhyme. There are some that do neither, Buzz Lightyear for example, and in the confectionery world Werther’s Originals. If you are writing copy think about using alliteration or even better use a copywriter, it is their bread and butter. You need to be careful as it can seem false or tortured, for example, Peter Piper picked a peck of pickled peppers. A peck of pickled peppers Peter Piper picked. If Peter Piper picked a peck of pickled peppers, where’s the peck of pickled peppers Peter Piper picked? Printed in Peter Piper’s Practical Principles of Plain and Perfect Pronunciation by John Harris (1756–1846) in London in 1813.

If you have a good product don’t mess with it; if it ain’t broke, don’t fix it” The original sweet company, Pascall Murray, was taken over by Bassett’s, then Bassett’s was gobbled up by the Cadbury-Schweppes giant. However, the sweet was left unchanged. Have a little think and see where you think the Murray Mint is on the Boston Matrix. If you don’t know what that is go Google.

What the advert tells us, or rather doesn’t tell is very informative. There are no facts; Murray Mints are made of glucose syrup, sugar, hydrogenated vegetable fat, molasses, salt, soya lecithin, and flavourings which doesn’t sound very appealing. Relaxed indulgence does and that is what the advert is telling us about, it is selling us a little bit of a dream. If you know anything about what it was like in the 50’s you can see why it was successful.

My favourite song is Wonderful Life – Black (I collect cover versions – 32 so far) and in the lyrics is the line “There’s magic everywhere” – that is so true, magic little bullets that you can use in your business. So grab a pack of Murray Mints, too-good-to-hurry mints, put your feet up and think what else you can learn form those suckers, and all the other magic around us.

Wonderful Life – Black

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Networking Does Work

Networking isn’t not working

Given my business model you may find it surprising that I attend business networking events. There is an article in Quay magazine (page 76) that explains how my business model works. For that model to be effective, to find customers and to get work I need to be well known in my specialist field. I do that mostly by meeting runners and event organisers at races and occasional at expos, e.g. The National Running Show, the balance is from social media activities. Occasionally I come across fellow runners at business networking events, but that is not why I attend. There is a big clue in the dictionary definition of networking – the action or process of interacting with others to exchange information and develop professional or social contacts. And therein lies the reason why some people think, or find, networking doesn’t work; the definition does not say make a sales pitch. Yes, tell me what you do, then tell me something about you so we can interact.

As a writer, blogger and ultra runner I spend a lot of time on my own, interacting with other people at networking events provides me with little nuggets that spark my imagination and get my writing fired up, unless you are an automaton delivering a sales pitch. Now that most of what I do is not happening (races and foreign trips cancelled) I have had to find things to replaces those activities and to generate some income. Online networking has been brilliant at helping with that because I am not restricted by geography or travel bans, I can Zoom all over the place. It has also helped with my personal life. Before lockdown I used to visit a cafe in Truro, The Cornish Vegan, for coffee and cake, I can no longer do that; however the daughter of one of the people I met at online networking events bakes vegan cakes and posts them – sorted. A chance comment during a networking event led to me binge watching BoJack Horseman on Netflix – not the sort of programme I would normally watch; I’m addicted now.

Netflix original -BoJack Horseman

The business benefits have been equally as diverse, I now have some different products to sell – that’s some of the missing income replaced, I’ve been inspired to take on some writing projects outside of my normal sphere of operations and have made some contacts that I know will lead to some interesting collaborations once restrictions are lifted.

Get out and get networking (virtually at the moment) and remember some of the words in the definition, interacting and exchange; it’s an active and two-way process. Don’t make your pitch then switch off, you will be seen looking bored by all the online attendees and you will miss all the interesting stuff other people are saying and not see the opportunities.

If networking isn’t working you are doing it wrong.

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Who You Gonna Call?

What help do you need the most in your small business?

When you start a small business, especially when you are a sole trader, you need to be able to perform all the business tasks, unless you have oodles of cash or credit. A little later you will be able to buy in some outside help. The big question is who to turn to first?

Tinker, Tailor, Soldier, Sailor, Rich Man, Pie Man, Beggar Man, Thief

I’m going to try and keep my advice simple; however, I am going to have to dip your toe into the murky world of hierarchies.

The great thing about being a sole-trader, or running a small business, is that you do not need to be involved with complex hierarchies. There is either just you or you at the top of a small pile, which is usually a fairly level structure. As soon as you start reading any business books, magazines, stuff on the internet, etc. you will find hierarchies raising their ugly heads everywhere, it is a veritable sea of serpents. You can blame Maslow for that and consultants’ inability to be original. Maslow was a psychologist who came up with a brilliant hierarchy of needs model based on a pyramid. It has stood the test of time until recently when people have started suggesting that Wi-Fi should be inserted in there as an essential need.  It was such a brilliant idea that lots of consultants adapted the idea to their needs. Some got a bit carried away and added bells and whistles.

I’ve developed a simple hierarchy of hired in business help to aid deciding where you should look to get help first; sales, accounts, marketing, social media, health & safety, logistics, the list is almost endless. I think in most areas there is plenty of information and help available online and most people can make a half decent job covering the basics. There is one area where, even if you are good, it is hard to do it yourself and unfortunately most of us are not good. The base of my hierarchy of help would be a proof-reader and if they are a copywriter as well that is even better.

You may think that odd, but the pen is mightier than the sward. I know it should be sword; my spell checker didn’t pick it up. Even though it checks for spelling, grammar, clarity, conciseness, formality, punctuation conventions and vocabulary. Apps like Grammarly will not pick it up either; a human proof-reader would have been on it like an Exocet missile.

Now back to the pen/word thingy. A spelling mistake or poor grammar in a nice glossy brochure or on a sparkly new website will slash your sales more effectively than a swashbuckling competitor. Do not expect the printer or web techie person to notice the mistake, they might, if they are not distracted by the pigs flying past the window, but it’s not their job. If you are a printer and on your website it is obvious you do not know the difference between stationery and stationary you are not going to inspire confidence in prospective customers. If you are selling DVD’s you have probably lost about half your potential customers – those people who care about the use of apostrophes. It’s not difficult, ‘s is possessive except when it isn’t, then it is its. So, no apologies for suggesting a proof-reader is the first professional you engage. I do apologise for any typos or grammar faux pas here; it is a blog post, not a glossy brochure, sparky website or a pdf you are going to email to all your business contacts.

My next level would be bookkeeper/accountant. Interesting fact about bookkeeper, it’s the only word in the English language that has three consecutive double letters. Accountants are pretty cool as well; they can help you set up a great accounting and data recording systems which will enable you to keep your finger on the business pulse. (If you are an accountant still hire one, you will leave it all to the last minute or, even worse, until it is too late.) What gets measured gets are attention.

What goes in the next levels will depend upon your individual circumstances, skills and proclivities. There is a useful grid thingy that can help you to decide. You can thank two psychiatrists for the format, Joseph Luft and Harrington Ingham, who came up with the Johari window (it’s a combination of parts of their names). It is a technique that helps people better understand their relationship with themselves and others. More importantly it introduced the square to management consultants who took it to heart and developed it further.  For SWAT and PEST analysis no name was needed, however when the Boston Consulting Group wanted to analyse product portfolios the window became a matrix.

I will stick with grid thingy for mine when it comes to task analysis. Assessing what outside help to get next you, obviously, want to concentrate on the bottom right of the grid. Which square you tackle after that depends on whether your focus is on fun or business success. Business success = dealing with bottom left before top right.

Ed’s square thingy

Eventually, if you are very successful, you will start nibbling away at the top left until all that is left is playing golf. That would put me firmly in the bottom right.  

Ed’s heirachy of help

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Business planning

Take off your pants

This post was inspired by ‘Take Off Your Pants! By Libbie Hawker. It is a book for novelists about how to outline books for faster, better writing rather than flying by the seat of your pants. Put very simply a story outline has three legs:

  • Character arc
  • Theme
  • Pacing

On that base then stands the story core

  1. A character
  2. What the character wants
  3. What is stopping it happen
  4. The struggle
  5. Success or failure

If you want to be a business consultant (see previous post) just think of a model that balances 5 columns of business success on the three-legged stool of solid business structure. 😊

When it comes to running a business, many people fly by the seat of their pants, which is often the wrong approach to take. It’s best to ditch the pants and replace them with sensible, effective plans. I embrace the philosophy; however, I will be keeping my pants on as they are branded and part of my marketing strategy, although I’m not adverse to dropping my shorts.

Business plans have a bit of a bad reputation, mainly because people think of the monolithic things produced for banks when applying for a loan or the even more gargantuan plans designed to see the Soviet States through an epoch. Turning to our friend Google doesn’t help either. I found something that looked promising; quite early on the website said “Keep the plan short – cut out any waffle” I then had to wade through loads of guff with 9 main section headings, each with 5 or 6 sub-headings and 5 or 6 sub-sub-headings. No! No! No!

Business plans should be exciting, lithe, dynamic, even sexy. They are the secret to achieving your awesome business dreams, they are catnip. Ignore what Wikipedia says “A business plan is a formal written document containing business goals, the methods on how these goals can be attained, and the time frame within which these goals need to be achieved. It also describes the nature of the business, background information on the organization, the organization’s financial projections, and the strategies it intends to implement to achieve the stated targets. In its entirety, this document serves as a road map that provides direction to the business”. Road map – No! No! No! We are heading for the stars.

Just in case you are still not convinced, this is the sort of things you will find out there “Simplify the Business Planning Process with Our Easy to Follow Step by Step Guide. Customise a Business Plan to Impress Your Stakeholders, Lenders and Investors Now”. You don’t want to impress your stakeholders, lenders, and investors now with a fancy document you want to stun everyone soon with your awesome business success.

You need a clear vision; start with the end and slap that on a big piece of paper, far right. You might need to spread a few bits on the floor and join them up. Then pop off and do a bit of research (nothing to heavy) into things like PESTLE analysis, SWOT analysis, customer personas, the business canvas, Agile project methodology (don’t dive too deep – an oblique reference to the Cornwall event Agile on the Beach) before coming back armed with loads of post-it notes (plenty of different colours) and lots of coloured pens. You can then slap post-its all over the place until you have worked out how to get where you want to go. It will be a messy process and things will change a lot before the masterplan (which is only an outline guide) emerges. Pick it up and pin it on the wall and do the work. Refer to the plan often, change it when necessary, that should only be because you have come up with something better, not because you have not done the work.

You will then be dancing to the sweet music of success not plodding along to a dirge.

Ok, I’ll admit you will have to do a bit work to derive some solid financial data from your Picasso plan; however, that too can be fun (honest). There are some awesome spreadsheet templates available and, if you want to move from excited to drooling, just look at the fancy graphs and charts that come with some of the business planning software now available, for example Futrli.

One final thought:

Oops

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Work life balance

A grave concern

I couldn’t resist one more post with ‘balance’ in the title. A business mentor used to say, “it’s not repetition it’s reinforcement”. In this instance I don’t think balance gives the best image, the scales should be very firmly down on one side. To help people decide which side, when I give talks about health and work, I suggest they walk around the local graveyard and read the inscriptions on headstones. I can guarantee not one of them will say ‘Here lies a much-missed marketing manager’ or ‘here lies a great chief executive’.  All the words are for loved and missed mothers, brothers, sisters, fathers, grandparents and friends.

Of course, we want to provide for our families, carve out careers, build business empires and follow pursuits and passions; this should not be at the expense of others and ultimately to our detriment. I was lucky, or perhaps it was good choices, in that the accountancy firms I worked in put a great emphasis on family. For example, my last firm had a policy that when a partner was on holiday we were not to be contacted unless it was a family issue. It is amazing how well staff will cope with a crisis when they know they cannot turn to someone else to solve it for them. I think the firm adopted that policy due to a story about a partner in another firm who had an eye-watering chargeable hours record. All that money turned to dust (metaphorically) when his son was arrested for possession of Class A drugs. He realised that he had not seen his children growing up; had not been part of their lives and was probably the reason that his son was facing a prison sentence. Realised why his daughter had left home and was living in a squat. Realised that he and his wife no longer had anything in common. Realised that his life was empty. “Some people are so poor, all they have is money.” ― Patrick Meagher

It’s probably better to think in terms of equilibrium rather than balance, because work and life is fluid. The above example of things being out of kilter is probably quite extreme, however it does illustrate the point. Out of kilter can go the other way. Again, when I give talks about health, I often hear people, usually women, say I’d love to run more, exercise more, do more yoga, but with kids I just do not have time. I ask them what is the most important thing in their lives and they will answer with ‘my children’. I then say, “so you want to be the best mother you can”. They nod. If you have some me-time, time to exercise, stay healthy and been energised, that is not being selfish that is working on being the best mother you can be. Rather than being stressed shouting at the kids you will be playing with them. It is also being a great role model. Should you be taking some me-time, to be a better parent, a better partner or to run a better business?

When I look back on my work life there are some highs, but not a huge number, passing my professional exams, getting my practising certificate, being made a partner and becoming president of the Association of Friendly Societies is about the whole list, oh and being the first non-actuary invited to join the actuaries dining-club (heady days). Those memories don’t give me goose bumps; even little memories about my children do. During difficult family times there are always some wonderful little nuggets. During a typical dad/teenage daughter argument she said to me “Dad, you annoy the hell out of me, but I know it is because you care” and she gave me a big hug. I tried to raise her to be independent minded and not to swear. I succeeded in the former, failed in the later. It may seem silly to you, but I remember this conversation from several years ago with great fondness. Her, “It was shit” Me “I think you meant to say it wasn’t very good.” “No Dad it really was shit” and we laughed.

I am not religious, nor was my grandfather, even though he was a Church of England vicar. He had a big impact on my life and had a prestigious knowledge of the bible which he would use it to illustrate points he was making.

Timothy 6.17-19  is particularly useful if you substitute family for God.

Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their trust in God, who richly provides us with everything for our enjoyment. Command them to do good, to be rich in good deeds, and to be generous and willing to share. In this way they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life.

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Balance 2 – Revenue/Costs Lose those losses

Having spent many years working as an accountant I know a thing or two about Balance Sheets. The most important of which is that they should balance. Ask any accountant about trying to find the error in an extended trail balance (the precursor of the Balance Sheet and Profit & Loss account) and they will regale you with lots of stories of woe. Balance sheets are a snapshot, at one point in time, of a business’ position. Assets on one side and liabilities on the other, hence the term Balance Sheet, although nowadays they are presented in a portrait format with the assets at the top and liabilities at the bottom. The liabilities can be split in two, those owed to others and those owed to the owners of the business. The thing that makes it balance, provided there are no mistakes, are the retained profits for the year. That is a good thing because it allows me to segue into talking about the Profit and Loss account and what I really want to get to, which is losses. Sorry about the circuitous route; however, I wanted to link back to the previous blog (Balance), you will see why later, and Balance Sheets seemed the best way.

Businesses make losses and sometimes that cannot be avoided, start-up situations for example or coping with a change in circumstances. However, generally losses are a bad thing and to be avoided; there are either too many costs on one side of the scales or too little revenue on the other side or both. Often when management realises there is a problem, they cut costs across the board, perhaps slashing budgets by 10% (most of the time that excludes board salaries) which is not a good idea. It is like deciding you need to lose weight and cutting off a toe, a finger, a snip out of each ear, a bit off your nose, a slice off each buttock and … I think you’ve got the idea. If the business survives the cuts and blood letting it may limp on into the future, but nothing has changed. Albert Einstein said, “Problems cannot be solved with the same mindset that created them.” Or to put it another way “You don’t drown by falling in the water; you drown by staying there.” Edwin Louis Cole.

If things are really bad and you are in deep, then the existing team are unlikely to have the right mindset or the ability to pull the business out of the water, or whatever mess it is in.  You need outside help; time to call in the FBI. No, not the American law enforcement people, I mean consultants who have Financial and Business Intelligence. However, be warned, before they get their badge the American FBI agents are extensively trained at Quantico, anyone can call themselves a consultant without any training or qualifications. When you get your outside help, you should look for 4-weight people, not 6-weight people. (See previous post). 6-weight people, while not ideal, will help you, provided they are not charlatans, they will help you reduce the right costs and not cut off your nose. They might demand a metaphorical pound of flesh (professional fees can be expensive); it will be worth it if they have saved the business.

4-weight people will understand your business, the markets it operates in and its processes. They will also understand the markets it could operate in and the processes it could use. They are not confined by convention and what is supposed to happen on different sides of the scales. They may well suggest reducing sales to improve your businesses performance. Radical? Yes. Sensible? Yes. Some customers are just too costly to service; very often the time taken dealing with queries, meetings, making changes, etc is hidden in overheads or general costs of sales and not compared to the revenue that individual customer brings in. Each customer should be weighed in the balance and, if found wanting, cast adrift before they can sink you.

When I had the outdoor goods distribution business, we used to rank customers using a scoring system that included possible sales volume and the cost (including hassle) of doing business with them. We had four levels, Diamond, Gold, Silver & Bronze. There is another class, Lead (those that will weigh you down) but they never got into our CRM system. Obviously, we devoted most of our time and effort to the Diamond Geezers, although we also spent time encouraging our customers to move up the rankings. One of our Silvers was in danger of becoming base metal, they would leave it to the last minute to order and phone through in a panic wanting a delivery the next day. They usually called after our normal deliveries had gone out, so it meant a special trip to the courier’s depot, which was time consuming and expensive.  I analysed their orders and suggested a fixed monthly delivery of stock that would be adjusted if things got out of kilter and that we would wait for payment if their stock level got too high. The result, my admin and delivery costs went down, their sales of our stuff to the public went up (they no longer had times when things were out of stock), so our orders from them went up. That customer moved from Silver to Gold.

Customers: if you can’t make them work for your business ditch them. Sales are vanity, cash is sanity and profit is the purpose of business.

Balance

Belshazzar’s feast

I have been fascinated by scales (the weighing ones not the musical ones) ever since I was about 14 when my music teacher introduced me to Belshazzar’s feast and the wonderful line, the fingers of a hand came forth and wrote upon the wall ‘you have been weighed in the balance and been found wanting’. I have no desire to be found wanting, so have striven hard to do my best.

The scales at the time of Belshazzar, about 500BC are like the ones used until just recently. He would have recognised the scales held by Lady Justice, the statue on top of the Old Bailey. Interestingly, modern day developments in the world of scales has run counter to what happened in other areas. They went from being digital to analogue at the time when the world was becoming digitalised. However, they have now reverted to being digital, mainly because they are electronic.

The first business lesson I learnt from scales was via a puzzle. If you want to weigh up to 40kg using scales, where you put weights in one pan and the object or objects to be weighed in the other, in increments of 1kg what is the least number of weights you need? It is fairly simple mental arithmetic to think, well I need a 1kg then a 2kg, I don’t need 3kg because 1+2 is three, I need 4kg and that means I can reach 7kg with my existing weights so I need an 8kg which will get me to 15, so I need a 16kg, which will get me to 31kg, so I need 32kg and that is it because I will easily get to 40kg with those. So, 6 weights 1,2,4,8,16,&32. WRONG ANSWER!

If you also put weights in the pan that has the object/objects to be weighed something magical happens as you cross the boundary from arithmetic to mathematics; you are, in effect using negative numbers.  So, you still need 1kg, but you don’t need 2kg as you can get there by putting 1kg on the objects side and 3kg on the weight side (3-1=2). With those weights you can get to 4kg, but you don’t need a 5kg weight, you need 9kg (9-4=5). With those you can get to 13kg. Again, you do not need 14kg, you can use 27kg (27-13=14) and that is it, because 13kg+27kg=40kg. Just 4 weights – amazing.

There are quite a few lessons to come out of this. The first is that if you leave the railway lines of conventional thinking and shunt sideways you can sometimes find better solutions. The second is that we are often constrained by the framing of the problem – ‘where you put weights in one pan and the object or objects to be weighed in the other’. This leads people to think of the first solution, 6. The third lesson is that innovation (new thinking) often reduces the barriers to entry. New entrants under the old system would have to make the dies or moulds for 6 different items and purchase 63kg of weight material for each scale sold. Under the new system they only need 4 dies or moulds and 40kg of material. At the same time existing manufactures will have to make 3 new dies or moulds which helps level things up between existing manufacturers and new entrants.

A fourth lesson is that user acceptance is key. I have never seen the eloquent 4 weight solution in practice, presumably because it is complicated to perform and requires a certain amount of numeric mental dexterity. There may be more lessons in there; however, I want to move on.

There we a few refinements to the basic scales. If you wanted to weight heavy things it either meant using lots and lots of little weights or lugging big weights onto the scales. Fortunately, someone had a grasp of physics, levers and fulcrums and developed the weighing machine where you slide small weights along an arm to weigh something heavy. It would have been analogue except that notches were put in the arm, turning it into a digital device. Learning points, existing things can be improved; however, we stick with what we know.

The next change was the biggie! The move to analogue, by using a calibrated spring to measure weight and displaying the results on a dial remarkably similar to an old clock face. This was a paradigm shift. When a paradigm shifts everything is set to zero; existing businesses with an advantage no longer have that advantage. They have balancing things and weights when what they need are springs and things to compress or stretch them and dials.  A further paradigm shift occurred when scales went electronic. Springs were out and piezoelectric transducers in. These electronic gadgets have been developed further, perhaps being over-engineered; you can now get scales with an iPod docking station.

Who, except me, would have thought scales could have been so exciting?

Before leaving the subject, I must mention Verity. She is a Damien Hirst statue on display at the entrance to the harbour in Ilfracombe, North Devon. When the statue was first unveiled, I made a special journey to see it, a 100-mile round trip; I was not disappointed. She is an impressive piece, made mainly of stainless steel, bronze and fibre glass and stands over 20 metres high. Verity bears some similarity to Lady Justice; however, the scales are held behind her back; Damien Hirst describes his work as a “modern allegory of truth and justice”. The statue looks very different depending on which side you view it from.

Verity

There are a few business lessons to be drawn from Verity. How does your business look from different directions? From a customer’s point of view are you easy to do business with or is it a bit of a struggle. Have you tested that other view? Do you have the courage to be bold? Damien was and so was North Devon Council which granted planning permission in the face of strong opposition. They realised that the statue would bring visitors to the town and improve the local economy and it has. W.H. Murray, in a wonderful quote about commitment, says “I have learned a deep respect for one of Goethe’s couplets: Whatever you can do, or dream you can, begin it. Boldness has genius, power, and magic in it!”

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