All Change

You may have come across the phrase “if you always do what you have always done, you’ll always get what you have always got.” Notable speakers who have used it in the past include Penny Phang, Anthony Robbins, Jim Rohn, Chris Widener and Zig Ziglar.

I have even used it myself.

Newsflash from my banking clients: that’s (another) coaching myth.

In the past this little mantra has been used to challenge those clients who were stuck in a rut of working hard in a particular way with little success, but unable to come up with another approach.

In those circumstances pointing out the illogicality of continuing in a fruitless pursuit made sense.

But what of those whose strategy has a history of success, but who face more recent set-backs? Wouldn’t they want to keep doing what they have been doing in order to duplicate previous favourable results?

Certainly they will. However, circumstances have changed. Now they need to change too, in order to match the changed situation.

Once the environment shifts, then so must the approach you use. Doing what you once did will not give the previous outcome.

That much is obvious, so what’s the problem?

Every moment of every day every one of us has to make three choices, whether we are aware of it, or not:

1. We have to choose where to direct our attention;
2. We have to choose how to interpret the event or object that has our attention, and
3. We have to choose what action to take as a result of choices 1 and 2.

The peculiar thing is that many people (not you, of course) do not consciously make those choices, because they do not even realise there is a choice to be made.

The consequence is that such people, instead of consciously selecting an action, merely react instead.

They take no responsibility for what goes on in their heads and the subsequent outcomes. “Other people” are being difficult and “the world” is against them. Their behaviour is entirely derived from habit, conditioning and untested suppositions.

Increasingly, as the world moves on, those habits, that conditioning and their suppositions are no longer appropriate. It follows that the results such people achieve become less and less satisfactory.

The results we get depend on the choices we make we make, either consciously from applied thought, or unthinkingly from the subconscious.

It pays to remain aware of our choices; it maximises our chances of selecting an appropriate action that matches the present circumstances.

At the height of the banking boom a highly successful broker drove his brand new, top the range Ferrari down Wall Street and pulled into the kerb to show it off to his friends. As he opened the door to get out the door was suddenly and completely ripped off by a passing truck.

The broker was outraged. He cursed the trucker. He screamed about the cost of the car. He yelled that the body repairers would never get it to look as good as it did new. He wailed about all the expensive extras that he had had fitted.

A New York cop pulled in behind the Ferrari with his strobe lights flashing. He told the broker to calm down. The car was no more than an expensive toy. And did the broker even realise that the truck had torn off half his arm when it passed? At that moment he was bleeding profusely over the sidewalk.

“My God!” the broker shrieked, “My Rolex!”

Sitting Pretty

Additional long-term capital would be welcome. It would surely act as a ready buffer against future shocks and yet more trying times.

But some clients are beginning to feel left out of the party as the rate of economic growth slows. As the total of taxpayers’ money being gifted to banks and financial institutions grows day by day they are tempted to cast an envious eye in that direction.

While I can appreciate the sentiment I regard the prospect as a siren song leading to potential tragedy.

Once such a comfortable cushion is in place it is all too easy to regard that as the solution: nothing more need be done. The company can now sit safely on the, albeit diminishing, cushion and watch as events pass by.

Nothing could be further from the truth.

Either the cushion will continue to diminish until it disappears completely, leaving the company worse off than before.

Or the crisis will end and your competitors will be stronger and better prepared than you, having benefited from the hard lessons imbibed while weathering the storm.

Liners may carry lifeboats, but your chances are improved by learning to swim.

Depending on the benevolence of others for your own survival is never a good idea. Those that ride to the rescue today will, unlike the good Samaritan, impose their own conditions tomorrow – as the bankers will shortly learn.

Any coaching I give is directed towards each client learning the rules of the changing markets conditions, as they apply to him or her, and then working out his or her own solution, whatever that may be.

That may not sound easy, but this is not economic Armageddon, despite what the newshounds will tell you.

There is still plenty of business out there – at least as much as there was 2-3 years ago.

If you were in business then, you were probably doing nicely.

You still can be.

Once upon a time a wise King, concerned about the unrest and discontent among his people, invited them all to bring their burdens to him. He promised to listen and to help, if he could.

They came from near and far, each carrying his own burden, which they laid at the feet of the King. Then one after the other, each rose and told his story.

When the tales of woe were finished, the King spoke: “You have heard your neighbour’s story. If anyone wishes he may now exchange his burden for another’s.”

Silently his subjects looked around, then silently picked up his own particular burden and quietly walked away.

Everyone nods

Everybody nods.

In the years leading up to the collapse of the South Sea Company in 1720 there was an increased potential for foreign trade. Consumerism was on the rise. Wealth and luxury were no longer reserved exclusively for the aristocracy.

The company was promised a monopoly of all trade to the South American Spanish colonies.

Everyone agreed that the future was set fair. Everyone nodded.

But through a web of deceit, corruption, and bribery that included both company and government officials it was grossly oversold. The trading concessions barely materialized; the company had a very shaky commercial basis.

The company’s share price fell from a peak of £1050 at the end of June to £175 by September 1720, devastating institutions and individuals alike.

The bursting of the bubble, which coincided with the similar collapse of the Mississippi Scheme in France, ended – temporarily – the prevalent belief that prosperity could be achieved through unlimited expansion of credit.

In the later 1990s the new internet sector and related fields were the place to make your fortune. Everyone nodded.

A combination of rapidly increasing share prices, individual stock market speculation and widely available venture capital created an environment in which many of the internet based companies dismissed standard business models. They focused on increasing market share without regard to the bottom line. That would take care of itself.

These companies expected that they could build enough brand awareness to charge profitable rates for their services later. The motto "get big fast" reflected this strategy.

But the bottom line didn’t and the companies couldn’t. The dot-com model was inherently flawed.

Even if the plan was sound, there could only be, at most, one network-effects winner in each sector. Yet there were a vast number of companies all with the same business plan for the same respective sector. Therefore most companies with this business plan faced inevitable failure. In fact, many sectors could not support even one company powered entirely by network effects.

The dot-com bubble crash wiped out $5 trillion in market value of technology companies from March 2000 to October 2002. Add to this the write-downs by the venture capital community which, to name but three, include at least $280 million for kozmo.com, $160 million for boo.com and $65 million for MVP.com.

And so we come to recent times. The bankers announce they have found a way of lending the same money many times over and, even if it is lent where there is a high risk of default, it’s still safe. And everyone nodded.

However, these events and those like them down the years are merely the tip of the iceberg. These are just instances of high–profile, bizarre and reckless conduct. There is just as much perverse, incomprehensible and destructive business behaviour to be found in everyday dealings.

For example, a recent, cash-strapped client who offered 90-day credit to his customers because, “that’s what this industry does.” Everyone nods.

For example, a business acquaintance who cut back on his sales and marketing expenditure in anticipation of a fall in customer volumes (everyone nods) happily reporting that’s what actually happened.

For example, a company, anxious to have its employees engaged with the business (everyone nods), commissions a consultant to conduct a survey in order to discover what its people think.

For example, the business that is doing things in the same way as its competitors (everyone nods), yet expects a result that will show them as being exceptional.

The human animal is tribal. That is not the same as having a herd instinct. We can think independently if we chose; we are more likely to succeed if we do.

In 1841 Charles Mackay published his book "Extraordinary Popular Delusions and the Madness of Crowds", often cited as the best book ever written about market psychology.

In May 2004 James Surowiecki published The Wisdom of Crowds.

In the light of subsequent events, perhaps Mackay had it right after all.

Coach or Consultant?

I was asked recently about the difference between an adviser/consultant and a coach.

It’s a valid question and, while I answered it after a fashion, I have been mildly annoyed ever since that my response was not better.

This is my second try.

Someone who is looking for a consultant or an adviser is a person who expects to be told the answer. It is a childlike, submissive approach; one where the power has been passed to another by someone who believes they lack sufficient resource themselves.

Someone who seeks a coach is a person who wants to find the answer and do the work themselves. They accept the responsibility, assume control and are determined to shape their own destiny. However, they are adult enough to recognise that sometimes they need the independence and questioning skills of an outsider to help them make the best of themselves.

To adapt from The Prophet by Kahlill Gibran:

Advisers/consultants bid you enter the house of their wisdom;

Coaches lead you to the threshold of your own mind.

Believing Is Seeing

We are so lucky. As consumers we are blessed with so many offers of help and assistance – so many that it’s difficult to choose between them.

· You can’t get better than a Kwik Fit fitter – they’re the ones to trust.

· Halifax will pay you 60 times more than the others could.

· L'Oreal – because you’re worth it.

…and, if all else fails, there’s always the DFS sale.

Aren’t these companies good to us?

In business we are equally fortunate. Wherever you turn there is someone offering to do it cheaper…or faster…or bigger…or easier. Just about anything you might – just possibly – regard as a problem can be instantly fixed by picking up the phone and inviting the Merlins of the market into your business.

Whether it’s finding more clients, getting your invoices paid, dealing with your staff, or optimising the internet there are a plethora of individuals, partnerships and companies ready and waiting with sure-fire panaceas.

How could you go wrong?

Likewise, if it’s your business itself that’s the problem, then never fear. There are any number of know-it-alls prepared to tell you how you should run it. Hell, for the right amount of money paid in advance, they’ll even do it for you.

In the quiet of the wee, small hours I sometimes wonder how we mortals so often get it wrong when gold-plated success is so easy to come by. Were we out of the room when they handed out all of the answers?

I doubt it.

Before those outside our business can even hope to make a contribution two things have to happen:

We have to believe that the suggestion they have to offer will actually work for us, and

We have to believe that particular firm or individual is the right one to work with us.

Whatever the ‘fix’ is, we have to buy into it ourselves, mentally and financially, before opening the door. Unless we first experience that mind-shift the ‘fix’ is likely to be doomed before the project even begins. Hesitancy in accepting the proposed solution is probably behind most of the failed consultancy projects. And most consultancy projects fail.

There is a threat to any business from someone who thinks they know better than you how to run it. Maybe they do know better, but it is still your business. However good their ‘fix’ is on paper, you will modify, undermine, sabotage and destroy it – perhaps subconsciously – if your pattern of beliefs do not shift accordingly.

So crucial are your beliefs and associated values that it would make most sense to start with those first, before you call the Merlins. At the end of the day you will probably find you can do without the outsiders, because you will have much better ideas yourself.

Migrating Your Business

Faced with the plans, goals, targets and objectives necessary to migrate our business, from where it is to where we want it to be, it is easy to become overwhelmed. Indeed, it is so easy to become overwhelmed that some people actually end up doing nothing at all, paralysed by those daunting challenges.

Of course, such people are not totally inactive, far from it. They give the appearance of being the busiest people in the office as they collect mounds of data and reams of analysis about all the challenges they face.

However, there is no outcome, for they never reach a conclusion. All that activity is merely a smokescreen, a security blanket, a substitute for the action they should be taking, but never get round to.

When faced with overwhelm one remedy is to take a lesson from the animal kingdom. Since autumn is approaching the goose sense used during their annual migrations is a lesson as powerful as horse sense.

When you see a flock of geese heading south for the winter, you will notice they fly in a characteristic "V" formation. That way, as each bird flaps its wings, it creates uplift for the bird immediately following. The "V" formation adds at least 71 percent greater flying range, for the flock as a whole, than if each bird flew alone.

Who else do you know that is heading in the same general direction as you? What opportunities exist to draw on their experience and leadership? How can you and your firm use their “slipstream” to help ease the hard work sometimes needed in order to make any headway? Would you really like at least 71 percent greater flying range?

However, do not expect such assistance to be entirely altruistic.

When the lead goose gets tired you can expect it to rotate back into the following flock while another goose flies point. Depending on circumstances, resources and the skills required sometimes that goose will be you. That’s because it makes sense to take turns doing demanding jobs.

You will also hear the geese behind honking to encourage those up front. Note that the honking is there for encouragement, not criticism. When you honk from behind – figuratively speaking – what is your intent? And is that intention realised?

Finally, when a goose gets sick or is wounded by gunshot, and falls out of the formation, two other geese fall out with the injured bird and follow it down to lend help and protection. They stay with the fallen goose until it is able to fly again, or until it dies; and only then do they launch out on their own, or with another formation to catch up with their own group.

How many businesses have the corporate sense to offer mutual support in the face of economic ills, market malaise and the continual sniping from Government and financial institutions? And is yours one of them?

Perhaps the humble goose is not quite so silly after all.

Business in Progress

Recently a leading think-tank, the Ernst & Young Item Club, said that the economic outlook for Britain is like a "horror movie".

In my opinion that is a contrived exaggeration designed to catch the attention of the media.

One wonders what metaphor they would possibly have substituted if they had been commenting in 1926. However, there are so many doom merchants plying their trade at the moment that trying to go one better might be expected.

So, just how bad is the economic outlook as seen by the Item Club? What constitutes a “horror movie” these days?

Growth in UK GDP during 2007 was 3.1%. The Item Club expects growth of 1.5% in 2008 and growth of 1.0% in 2009 before it returns to 2.5% in 2010.

Growth????

Oh, yes! Ernst & Young are not forecasting a recession … far from it. They are expecting that the UK economy will continue to grow.

This is about as close to a horror movie as Willy Wonka and the Chocolate Factory.

Even if things turn out worse than Ernst & Young’s choice of prose, professional firms need to get a sense of proportion. In the US Great Depression 1930-33 the reduction in the level of GDP from peak to trough was a fall of some 30 per cent.

That means that some 70% of output was maintained, although the exact figures will have varied from sector to sector and firm to firm. Nevertheless the point is well made that business continued to happen. Some people even did remarkably well out of it.

Therefore, what you can be sure of is that, no matter how poor the economy gets, substantial amounts of business will still get done.

The only question you need to answer is whether you will be among those doing that business.

There is a recognised 3-step process that will help you towards a positive answer:

1. Raise your standards. Increase the levels of service that you provide and the attention that clients receive. Satisfactory is not good enough, either to win new business, or retain existing accounts.

2. Change your beliefs. Who your prospects are, where they can be found, what they want and your capacity to meet those expectations all need rewriting. The world has moved on; you need to keep pace or you will be left behind.

3. Revise your strategies. Whatever game plan you have been following is now familiar to all your staff and most of your competitors. It’s predictable. “A skilled commander seeks victory from the situation and does not demand it of his subordinates” ~ Sun Tzu.

For the outlook to be perceived as bad is nothing new.

Recently, Sam meets his friend Joe in the Arndale Centre and greeted him warmly.

"Hi Joe, I haven’t seen you for some months. So how is the company doing that you set up with Maurice last year?"

"Well,” said Joe, “As I told you then, I put in all the money and Maurice put in all his business experience. But things have changed a bit since then."

"What do you mean?" Sam asks.

"Now Maurice has all the money and I have all the business experience."