CARL'S BLOG

The Art Of Strategic Partnerships

At my businesses we’ve tried a number of ways to generate new business, and by far the most successful for us has been the use of strategic partnerships. In fact, on the day of writing (and indeed the week of writing), pretty much every meeting I’ve had has been with a strategic partner of some form.

What is a strategic partnership?

Very simply, a strategic partnership is any relationship with another business or individual that can help your business. This can be a relationship with a supplier or a customer, although in my experience it is more likely to be another supplier to your own customer base. That’s it. There’s no requirement for formal documents, commission arrangements, or structure (although these can help), instead it can simply be two friends working together to help each other. You are probably doing it already without realising.

How do you make a strategic partnership work?

This is the magic question, and there is no one answer. Every potential partner has something else that they want from the deal. I’ve listed the common motivations below, but the order differs depending on who you are dealing with. There’s no way of knowing what floats their boat until it is implemented and tested, and you might need to tweak your plans based on the performance of the arrangement. Also, whilst potential partners might claim that they are not motivated by referral fees, you might be surprised with what actually motivates them!

Reassurance that you won’t let down their customers. This is really the basic requirement of any strategic partnership, and getting this wrong will ruin the relationship from day one. I’d estimate that 99% of the potential or actual partners that I have spoken to would see this as a key requirement. There are some sharks out there who really don’t care – although in my experience, if they are solely motivated by cash and not much else, there is no reason why you should pursue the “opportunity” as the customers tend to be of a certain kind…

Enhancement to the service that they already offer. Whether you can make their life easier by eliminating some work for them, or can enhance the customer experience by providing the missing link to what they do, your partner will enjoy the reflected glory from a satisfied customer and a satisfied team.

Financial reward for them or their customers. Let’s be honest. Many potential partners look for a kickback or a referral fee. Others feel that it is unprofessional to receive referral fees. I’m not here to judge either way, just to comment that you need to be open to all routes and as such, look to build in a referral fee budget within your pricing. It might be that this fee is donated to charity, or returned to the end customer – either way, if this is done transparently and consistently, it can tick the “finance” box.

Reciprocal referrals. Many partnerships are led by the notion of “reciprocal referrals”, but unfortunately this is a pipe dream for many partnerships, regardless of the good intentions on both sides. The reality for many relationships is that it will be imbalanced in favour of one side, based on the “food chain” (see later)

Why do strategic partnerships fail?

Above we have explored the core motivations of a partnership – but all so often, they don’t work. Putting the obvious failures – not paying commission, or not looking after a customer – to one side, here are some of the main problems that I’ve seen:

The food chain effect. A perfect example of this could be a partnership between a web developer and an SEO company. It would be very easy for a web developer to feed work to an SEO company as it is likely that if the business had been trading online previously, the old website was not working in some way. Also, the buyer will be experiencing the high PV (perception of value) that we all experience at the start of a long term relationship with any supplier, and as such would be receptive to referrals. On the flip side, an SEO company will find this more difficult to reciprocate, as all of their clients will have websites, and might be unwilling to invest in a redesign of something that is already working.

Lack of action and relationship management. Just like your relationships with your customers, you need to make sure that you keep in touch with your strategic partners. I often see partnerships start with great intentions, but the two parties simply don’t stay in contact, leading them to forget about whatever actions had been agreed. Make sure that you create at least some structure to help prevent this!

Lack of true motivation. You really need to explore all possible motivations. What people say and what people mean is often two very different things.

What can be done to minimise the chances of failure?

First things first – by reading this article, you’ve done more than 99% of most businesses who go into a strategic partnership! Many enter into these arrangements completely blind, with no idea of what can go wrong. What amazes me however is just like an abusive relationship, both sides will keep going back for more even when what hasn’t worked before has demonstrated that something needs to change!

If you are open to change, or at least minimising your risk, think about the following ideas:

  1. Offering all motivation options at day one, and continually remind the partners of their available options
  2. Making a plan of relationship management, including check in calls and meetings
  3. Discuss expectations of service, reporting to the partner, and other requirements *before* any referrals are made
  4. Create a formal agreement that sets out what you both expect from the partnership
  5. Make sure you smash your side of the deal!
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7 – START: Choosing an Advisory Team

In this episode we explore how to choose the right advisory team for your business.

Please note the tagging used in episode names:

START – Ideal for startup businesses (but a great refresher for existing too!)

GROW – Ideal for growing businesses (and some points that startups can learn from)

WIN – Ideal for any business that wants to win!

Let me know your thoughts – on Twitter or Facebook

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What an amazing 2016 – and the best is yet to come…

We are approaching another Christmas, and as always it is a great time for reflection on the year just passed – what went well, what went badly, and how the next year can be so much better. I know that from my perspective, 2016 has been an amazing year – both from a business perspective and because of the birth of my youngest son, Carl Junior. Despite the doom and gloom of the media, I’m grateful for all who have helped me along the way this year and made 2016 the success that it has been.

So what has happened in the year?

Business

First things first, d&t continues to go from strength to strength. We’ve benefitted from the business development efforts of the last couple of years, and the professionalism that has been injected into our marketing and sales processes. Our headcount is higher than ever, and we are on target for our highest turnover yet for our current financial year.

We’ve also launched Bear Group, a network of business coaches alongside Mark Thompson and Dave Holland, Selling a Franchise alongside the teams at Franchise Resales and Franchise World magazine, and a new project to professionalise the tax affairs of those who currently don’t bother using accountants.

Books

In the summer of this year, I published The Franchising Handbook. This was a labour of love, and I knew it would never top the bestsellers lists: but I’ve been pleasantly surprised! I’ve sold the rights to the book for translation in Vietnam, and it’s driving me on to bring my plans for a third book to fruition.

Speaking

Those that know me know that I love the sound of my own voice. This year, I went from speaking around the UK to speaking around the globe – having a keynote in Luxembourg and moderating a panel in Dubai. I also keynoted a number of conferences, spoke at the UK’s biggest business exhibition, the UK’s biggest startup show, and a number of regional exhibitions. All good fun!

Media

Perhaps the biggest thing has been my media exposure. I started the year by listening to a Gary Vaynerchuk seminar, and set myself a target of speaking to one journalist per day. He has a saying, that “an audience of one is better than an audience of none”.

Well, it just so happens that no-one had filled the gap that I do, and over 2016 I’ve become a bit of a voice of small business advice. I’m now the resident business advisor at the Daily Express, and have been featured in pretty much every national paper bar the FT and the Daily Star. I’ve got a monthly radio slot on Share Radio, where I interview small business owners, and in 2017 I’ll be filming a pilot of a new TV series. A massively exciting time!

What’s in store for 2017?

I can’t give away all my secrets! What I can do is tell you what I’m going to improve on, as a form of accountability to you all. The big thing has to be consistency. Whether you are looking to lose weight, improve your French language skills, or build a business, you need to take small steps consistently. 10 hours of reading a French dictionary 2 times a year won’t cut it – you need to devote a block of time every couple of days to really make it happen. I need to make sure that I’m consistent in my actions over 2017, and this is where my business coach adds huge value to me and everything I do.

I’m also not going to settle for the same results as 2016. In this world, if you stay still you are actually going backwards – the millionaire of 1950 is not the millionaire of 2016 if they spent all of their returns and simply maintained the financial balance… and what’s more, the “muscles” of their mind, their body and their business hasn’t been stretched and exercise. So hopefully, my update for 2017 will put this one to shame…

So there’s my update for 2016. It’s been an amazing year, thank you so much to my wonderful wife Sarah for putting up with me over the year, and here’s to an even better 2017! Have a great Christmas all.

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What I wish I knew about writing a book…

Wow, my blog has been empty for just over two months. It’s amazing what parenthood can do to you. In that time, loads of stuff has happened. I just haven’t got round to uploading the press coverage and my updates.

Anyway, today I received an email – totally out of the blue – from my publisher, offering me the opportunity to sell the rights to one of my books to Vietnam. They offered to take care of all the translation, with an advance of US $1,000, and a huge print run… It made my lunch seem even tastier, and was probably the easiest grand I’ve ever earned: until, I read the small print. I’d get 10% of it, to be chipped away against my previous advance. So, in business book reality, that means that I get bugger all as most business books don’t earn out their advance.

It’s probably something I should have looked at in the contract. To be honest, I was so excited to receive both contracts, I signed my life away without even checking my name was on them. Here’s a few things I’ve since discovered:

The advance is negotiable

Well, who knew? You don’t need to accept the first thing put in front of you. I know of two authors (out of the two that I’ve spoken to) who had achieved a ball-park doubling of their advance, by simply asking. I just happily signed, not knowing these things were negotiable.

To negotiate an advance, I understand you need to show your platform, a strong marketing plan, and also attack it in different ways. Today, I learned what a journalist can earn for 1,000 words. Comparatively, it makes my advances for 40,000 and 60,000 words (respectively) look like an apprentices bus fare.

The publishers won’t market the book for you

OK, so that’s an exaggeration. They will send out a token press release, and do some stuff based on what you’ve given them. But really, the leg work comes down to you, the author. You’re expected to promote the book on social media, find both trade and retail buyers, and really push the book out there. I didn’t know this until about a year after the first book was published. Whoops!

You won’t become rich on royalties

Above, I held my hands up to having a Tesco Value advance. Well, I’ve not out-earned it. And if I do, I’ll get the grand sum of about 60p per book. If I’m lucky, I might be able to order a pizza to celebrate the arrival of the cheque each year.

But you still have the hassle of running it as a business

Yup. Even though the earnings are ridiculously low, you still need to record the income and expenses, and all that stuff. Especially as an “international author”!

You might become rich on the credibility

Having said all of that, don’t forget the credibility of writing a book. It’s pretty amazing. It’s opened loads of doors professionally. My media work has all been off the back of the book, and helped to increase my exposure (even though it pays even less than the books – a big fat zero!). The knock on effect of all of this to my business however has been fantastic. It’s opened speaking opportunities at conferences with my target clients, earned the respect of industry colleagues, and acted as a very tangible demonstration of credibility. An expensive business card, but one that is full of what me and my team can deliver.

And finally… You need a website!

And one that works. Huge thanks to Jon Rawlins of Pixel Pixel for making some tweaks to it today. The man is a genius!

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Don’t let your business become the NHS!

(warning: long post! But worth it)

Some of you may have noticed that my blog has been quiet recently – I’m delighted to announce that Carl Junior was born on 20th September. As he was a few weeks early, he has had to stay in hospital for a little while, and over the course of the labour and post birth care, I’ve made a few observations about the NHS.

As every business grows, new layers of staff are introduced, new systems are created, and the startup becomes a business becomes a corporate. The organisation becomes faceless, the stakeholders become disengaged, and the business becomes a machine. As anyone who has owned any kind of machine or vehicle knows, they soon wear out, and can either be serviced or replaced for a newer model. There comes a point that servicing becomes a constant uphill battle, and the beast that is the machine is beyond taming. Welcome to the NHS!

I think that there are some learnings for us all here. I’ll touch on the operational issues with action steps, and then follow with a discussion on the strategic side of things. If you just want to read my suggested solution, skip to the bottom! 🙂

What can businesses learn from the operational issues at the NHS?

We often hear about NHS inefficiency, and it is often claimed that consultants are the root cause of these problems. In fact, if some of the press is to be believed, scrapping all of the management consultants and “middle management” would be the panacea for the system. The reality, in my view, is that their help is needed more than ever. Wholesale change is needed, and just some of the problems there can be easily identified and fixed by businesses to prevent the NHS-ing of a startup:

 

The Daily Huddle – at every change of shift, there is a “huddle” for approximately 30 – 45 minutes, where the team go through the condition of each patient to transfer the information. To the outside world this looks like an extended tea break, but I’m assured that valuable information is passed from nurse to nurse. So there is *some* value to a huddle… but how much?

There are a number of reasons why these are ineffective:

  • Anyone in business knows that meetings are most effective when used to discuss solutions, not share information. Anything that needs sharing should be shared before a meeting.
  • Chinese whispers are a very real problem. The number of times we have had to explain the situation to the new nurse was unreal, and evidenced the fact that the circa 5 minutes on our case was unnecessary. Often, it took longer to clear up the miscommunications than it would have done to just “fill in the blanks” on a systemised data process. Multiply that up by the number of patients and nurses across the NHS and you have a horrific drain.
  • The drain on the NHS infrastructure during these huddles is very real. Not only does it result in half hour double pay with no productivity, but also there are practical impacts: no nurses during certain times, parking issues just before handover times, even congestion in the walkways. A staggered approach with real time data flow would be a dramatic improvement.

Action step: Have a think about any unnecessary meetings or routines in your business. Don’t have a meeting for the sake of having a meeting. Think about the impact of team meetings on both your team and your customers. And consider whether data can be shared electronically rather than face to face.

 

Paper Records – perhaps my biggest frustration is the reliance on paper notes. You would not believe the amount of times we have been asked if we still live at the same address and have the same doctor. Perhaps unsurprisingly, we chose not to move house or change doctor whilst Sarah was in labour! 

More to the point, the sheer lack of integration of these records mean that each doctor or nurse is effectively approaching their situation blindly. Rather than having a dashboard which can identify the key points, each individual involved in a case has to read through pages of notes, and we all know what doctors handwriting is like.

Perhaps worryingly, our baby has been kept in hospital for almost a week longer than necessary, due to an arithmetical error (volume of feeds not being added up correctly), and a comparison error (wrong weights being used for comparison). Whilst a few extra days in hospital might not be the end of the world for Junior, a miscalculation could very well be the end of the world for a seriously ill patient.

Action step: Think about how you can eliminate duplication and / or risk of error in your records. Every time you have more than one system for something, the risk of errors increases substantially. Your customers will notice this too – think about the times that you have been told “sorry I’m on the wrong screen” by a call centre… it always leads to their computer breaking for some reason! 

 

Broken promises – this one is really simple. If baby can’t come home, don’t promise he can. We’ve set up home three times for him, had two discharge forms completed, and then goalposts moved again and again.

Action step: It’s really simple. Don’t overpromise and underdeliver. More importantly: don’t underpromise and overdeliver. Both show that you don’t really know where you’re at – even if deep down, you do. Why not just tell the truth, the whole truth, and nothing but the truth. That’s the only way to become truly trusted.

 

Blind adherance to checklists – I would wager that the number of checklists and systems in any organisation grow with a direct correlation to the number of layers of staff and management. Whilst checklists are a great way to identify completion, they are inadequate for project management – they only work on a strictly linear flow. In our case, the failure to see the item beyond the current “tick” caused delays; whereas a much more efficient model would have allowed box 4 to be ticked even if box 1 couldn’t be.

Action step: Empower your staff. Whilst checklists are good for confirming completion, allow them to do their job that they have been trained to do. Many systems are over-engineered simply as a risk management tool, and blind adherance to these systems is frustrating to all. If you don’t trust your staff, don’t employ them in the first place.

 

Staff reward schemes – One day, the only conversation of note that we heard in the ward was between two midwifes. They were bitching about midwife number 3 winning the staff award. “She hasn’t saved any lives”. “She just runs around to make herself look busy”. Staggering to see how much jealousy an M&S voucher can cause! And perhaps, an insight into the motivations of the team.

Action step: Some well meaning staff incentives can be counter productive. But also, some staff can just be poisonous. Don’t take this as a message to cut reward schemes – just make sure that you foster a culture of pride and congratulation, not of bitching and backstabbing.

 

Conflicting advice and compounding of errors– now, I’m kind of allowed to say this as Sarah has a nursing background… Nurses don’t know everything! On that note, it’s OK to admit to your customer (or indeed your patient) if you don’t know. Provided that you take every step to find out, pretty quickly, and get back to them, people understand. I certainly don’t know everything about every matter that my businesses deal with – in fact, the only thing I know is that I know very little.

The conflicting advice was actually fairly simple. One midwife told Sarah to buy a “Stage 3” teat for a bottle to see if it would improve flow. Once bought, staff changed shifts, and midwife 2 accused her of negligence for buying such an advanced teat, and sent her back to get a “Stage 2”. Lo and behold, she was then told that Stage 2 was what was being used in the first place.

Now, this might not seem like much, but when combined with broken promises, and the fundamental errors, it became a huge issue in our mind.

Action step – think about the impact of errors or mistakes on your customers or your team. It’s rare that one single problem creates an issue. Most of us have a “bank of goodwill” built up over several good experiences, and we forgive a simple, innocent mistake. When a business makes too many mistakes, this bank becomes overdrawn, and that is the tipping point that can turn an advocate into a net detractor.

The (oversimplified) way to stop this becoming an issue is to stop making mistakes. Accepting human nature however; another way to approach this is to look at how you handle complaints – this is an ideal time to “top up the bank account” and bring your customers back to advocate level.

 

Delegating difficult conversations – this is a cardinal sin. We had to deal with junior doctors, who were simply stuck in the middle of whoever made a decision and us. They had no say, no power, and had simply been tasked to deliver difficult messages to us. When escalated, we again spoke to someone who could only be described as impotent in the grand scheme of things. The real decision makers on our case hid behind layers of staff and bureaucracy. This cowardice is so common amongst managers in business, and it is often just a case of picking up the phone…

Action step – if you have to have a difficult conversation, have it. Don’t delegate it to someone else. If they come back with an issue, and it’s more difficult than first expected, step in. Don’t just bat it back. Man up. Weakness in these situations is visible, and reduces respect from your customers and your team. 

 

What can businesses learn from the strategy issues at the NHS?

I’ve spent a long time dissecting just some of the operational issues at the NHS. These are the ground floor, obvious faults that many of their patients will have seen, day in day out.

As I alluded to before, many see that the NHS is underfunded, and there are two schools of thought: cut costs, or increase funding. In life, nothing is as simple as a binary option like that. Chucking more staff and more cash at such a shambles is only going to magnify the issues (a hidden tip there for any business owners!). Cutting costs is also going to only go one way. It’s also not the consultants fault, nor the managers.

In fact, I’d contend that the middle management is pretty good – they do what they are told to do.

But something isn’t right. After all, we pay for the NHS. £2,000 per adult. If BUPA treated me this way, my (less than) £2,000 membership would be scrapped immediately. With the NHS, our hands are tied as taxpayers.

The one thing everyone who comments on the state of the NHS seems to miss is that there are three parts to any business – the operations, the tactics, and the strategy. Workers, managers, and leaders. Ultimately, it is the leaders who set the direction for the organisation, and in this case, it is the leaders who have failed the NHS.

We need to invest in our health system – whilst it is widely touted as the best in the world, it’s not even the best in Europe – it’s 14th (source: 2015 EHCI). But investment isn’t pay rises for junior doctors, extra cash for nurses, or more beds. Investment is a structural change in the way the NHS is run.

In business, there are two types of cost: capital and ongoing. Ongoing costs, as the name suggests, are yearly costs, that happen each and every year. Employing say 1,000 doctors at £50,000 is another £50m cost every year. If they are working within an inefficient system, then logically this is an inefficient spend.

Instead, we need to invest in the vision of where the NHS should be. Not just a service, or a “change of brake pads”, we need to redesign it with a blank canvas. The NHS needs to be technology led, commercial in its thinking, innovative in its approach to healthcare, and customer-centric in its approach to service. Whilst we can treat the symptom and employ more and more nurses and doctors, we should actually address the cause and fix the NHS – once and for all, as a “capital cost”. It’s a big cost, but a one off cost, and we need those consultants and middle managers on board to make it happen.

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