Category Archives: Blog

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The Interrogative Entrepreneur?

David-Falzani-President-SMF-MCP_3834-(landscape)
David Falzani
President of Sainsbury Management Fellows
Visiting Professor at Nottingham Business School

I recently gifted someone a copy of The Interrogative Mood by Padgett Powell. This book, purportedly a novel, weaves a subtle web of questions that when read together somehow seem to make sense in interrelated and sometimes unexpected ways. It’s probably not for everyone, but I find it ‘lights up’ parts of the brain other texts cannot reach. I thought it might be fun to have a go myself, loosely directed at entrepreneurship:

Do you ever get an itch you can’t quite reach? Do you get upset by problems you think easy to have been solved?

Are new products easier or harder than old products? How important is vision to your motivation? Do you get excited by ‘the possibility’? Does getting the mortgage and school fees paid make you old?

Would you rather be broke at 20 and rich at 70, or the opposite way round?

Is stress the complexity or the enormity of the task? Are you motivated more by anger or by aspiration?

What portion of salary should a car cost? Are taxes optional? Does ‘doing sales’ excite you?

Do you genuinely like other people? Do you actually spend £3 on a cup of coffee? Would you genuinely prefer 1 in the hand or 2 in the bush?

Do you prefer ice cream or milk shake? Do you realise that you will one day die? Do you spend more time typing on a keyboard or speaking into a phone?

Is stress the things you can’t control, or the impossibility of the task?

Did you ever miss key events of your children’s lives? Would you rather pay taxes or recycle? Are you willing to wait 2 years to get paid? If you were paying, would you travel club class? Do you do what you believe in or do you believe in what you do?

Do you prefer to lead or be led? Do you do the best work in the morning or the evening? Is your preference poker or chess? Have you paid £1m for a 2 bedroom flat next to Waterloo Station rather than commute?

Would you rather create a chain of doughnut shops or work for Google?

Can you walk away from a guaranteed job and lifestyle? Have you ever been stood at the top of a cliff and been terrified you might jump?

Does failure scare you? And if so, do you know why? Should the maximum salary in any publicly funded body ever be higher than the Prime Minister’s?

Is the boss’s job to be tough or to be kind?

How much money is enough? For you? Do you have an Amex card? Would you mortgage your house to back your business?

Did you always attend your child’s sports days?
Are you tidy, or an unmade bed?
Do you play the lottery and if so, what’s your strategy?
Would you rather own 1% of GE or 100% of Krispy Kreme?
Does the freedom to risk total failure terrify or comfort you? Have you seen a baby pigeon?
If you suddenly became wealthy, what would you do? – what would your new job be?
Do you play video games without children present? Do you like Tabasco?

Do you prefer coffee or sleep? Do you know the expression ‘through the meat grinder’? Are new problems easier than old ones?
Do you prefer finding out what the pain is or what the solution should be?
Have you been ‘through the meat grinder’?
Are you able to explain why all the better mousetraps failed?
Do you understand Zappos?

Would you rather meet Jack Welch, Gordon Gekko, or Mark Zuckerberg? Would you rather sit in the shade under a tree sipping red wine, or work hard to build a business and get rich so that you can sit in the shade under a tree sipping red wine? Are you a cat or a dog person?
Are all problems in the world ultimately political? Is it important to know why things happen?
Do you have a favourite cocktail?
Would you like to celebrate the civil service?
What would it take for you to give it all away?
If you almost ‘made it’ but lost everything, would you start again or settle?
Do you think CEOs should be on minimum wage?
Is it OK to make money that someone else has lost?
Are you glass half empty or half full?
Is war an opportunity, or a travesty, or both?
Is coffee a drug for you?

Does your brain ever hurt?

Did this ‘work’ for you?

Blog

How to Sell Better

David-Falzani-President-SMF-MCP_3834-(landscape)
David Falzani
President of Sainsbury Management Fellows
Visiting Professor at Nottingham Business School

Sales is a subject almost never taught formally in business schools. This is undoubtedly because it’s such a broad subject, and many industries and sectors have very specific sales processes and requirements.

Nonetheless, there are a few basic concepts which can help the effectiveness of any sales process. An easy definition of sales is in ‘helping customers to buy’. In a little more detail, it’s ‘getting customers to better explain their needs so that you can make the decision to buy easy for them’. It’s this critical aspect of two-way communication that’s sometimes missed.

The starting point of any sales campaign is the USP analysis. The USP analysis will have compared the competitors, their product features and their benefits, to your own. This understanding is the starting position for a sales dialogue.

However, skilled sales processes take this starting position but then ask open questions to better understand a customer’s needs and problems to solve, and having listened and synthesised these answers, will only then make a considered value proposal.

This is opposed to the all too common ‘fire hose selling’ or ‘spray & pray’ techniques of showering a customer with information in the hope that something sticks. When I’ve helped clients develop sales staff I sometimes see inexperienced or unconfident sales staff adopt this approach. In one visit I witnessed a new sales manager talking immediately at the start of the meeting, and didn’t stop, for 45 minutes. Not one pause allowed one word from the prospect. The body language across the table went from alert, to relaxed, to resigned/sleepy. Making the prospect regret the meeting is obviously not a good strategy!

An obvious but sometimes forgotten point is to ensure you are selling benefits over features. It’s easy to talk about what the product is, but more useful to describe what advantage it brings to that specific customer and their needs. If you don’t understand their specific needs then you are not ready to make an accurate pitch.

Another key aspect is the importance of establishing trust in the relationship. If you choose a tradesperson for your home, your sense of trust in that person will be one of the key decision factors, and perhaps more important than price. Similarly, a skilled salesperson will establish a relationship, building trust and confidence. This can be sometimes expressed as having become a trusted advisor to the client; able to provide solutions to problems as they are encountered. In a sense, you need to decide what you need to give away in terms of expertise to develop this trust.

Lastly, progressing sales is often about overcoming objections. There are only a handful of common objections. Often these are used as ‘brush offs’ rather than being genuine objections, but if you can delve deeper and find the root causes, they can be valuable sources of more profound understanding. It’s worth listing to the common objections your company faces and possible approaches to overcome them. Common objections include:

  1. Lack of budget/price too high
  2. Lack of sign-off authority
  3. No established need
  4. Wrong timeframe
  5. Capability/credibility issue

One needs to dig deeper, but possible approaches include:

  1. Establish value recognition. Can you save them money?
  2. Collaborate on delivering a solution. Get a forward referral to a colleague
  3. What features do they find useful? Case studies and fact based analysis
  4. Underline the payback timeframe. Start savings now
  5. Offer proof. And, of course, build the relationship.

Found this blog helpful? You may also be interested in these:

LINKS TO THESE BLOGS TO BE ADDED
If You Build it Will They Come?
How to Find Products that Sell Themselves
How to Sell Better was first published by Entrepreneur Country and has been reproduced with the editor’s permission.

Blog

How to Find Products that Sell Themselves

David-Falzani-President-SMF-MCP_3834-(landscape)
David Falzani
President of Sainsbury Management Fellows
Visiting Professor at Nottingham Business School

I increasingly look for products that sell themselves. After all, if your product or service does much of the sales work for you, then you have a business that can grow quickly and profitably.
If you can, try to find products that adhere to the following 3 steps:

  1. Customer sees product: not as obvious as it sounds, getting a customer to actually preview your product is easier the simpler it is, or can be easily encapsulated.
  2. Customer ‘gets’ product: products that resonate with customers will always be self explanatory. The less you have to say the better.
  3. Customer wants product: the crucial part. If the product follows these steps with the minimal amount of intervention, then you may have something that lends itself to a scalable business (subject of course to the usual cost and supply issues).

By contrast, there are products which have high educational and informational requirements. These have to be met before a customer is even in a position to decide whether it’s something they wish to buy. These sorts of products tend to be either new solutions in the marketplace, or have marginal USPs over the competitive products (think of all the failed “better mousetraps” launched over the years).

If new in the market, the risk is always in being able to predict whether customers will change their current behaviour. Or, to put it another way, will they be bothered enough to listen to all the reasons they should change, and then still be bothered enough to make the actual purchase. I call these products high burden sales products. By no means a dead loss, they can nonetheless be onerous to grow. Many products and services rely on high burden sales pipelines. Much of the B2B technology market works in this way, and it is all fine if the eventual conversion rate of leads to sales is sufficiently high to warrant the investment (in a real sense, for both parties).

However, if the conversion rate is too low for the time and money expended up to that point, or the USPs marginal, then a difficult future looms. Sometimes these situations are blamed on poor salesmanship. I’ve seen several technology businesses where the board believed that all that prevented success was getting ‘proper’ salespersons in, period. In actual fact, the product just did not resonate with the market and no amount of ‘push selling’ was going to change that fact.
As a side note, the passage of a significant length of time can sometimes be the missing ingredient that fixes things. We’ve all seen products described as ‘solutions looking for a problem to solve’ and sometimes being too early in the marketplace can only be fixed by time (for example, smart cards took 20 years to become widely accepted).

Today, I much prefer products or services that have an established purchasing behaviour which can be tapped into. Or, if a new and potentially disruptive technology, I look at whether the client propensity for purchase can be quickly validated, and once this has been done, the sales model can be successfully and quickly scaled.

By looking at this established purchasing behaviour carefully or by soft launching a minimum viable product it is possible to maximise the chances of having an easy sale product.

This blog was first published by Entrepreneur Country and has been reproduced with the editor’s permission.

Blog

Searching for the Right Post-MBA Job

Fang Fang
SMF Fang Fang

In August 2011, when I walked in London Business School for the first time, I had no idea what to expect.

Until then, my career path had been very simple: five years as a civil engineer in the same UK engineering consultancy. Unlike many of my classmates, I was not sure I would like a career switch. When I was surrounded by bankers, strategy consultants, marketers and entrepreneurs, my mind went completely blank. I had no idea what M&A, customer acquisition or global business leaders mean; not to mention what kind of job I could do after the MBA.  What should I do?

Shock and fear drove me to take immediate actions. I decided to use the two years at LBS to explore. An MBA provided the best platform for me to step out of the engineering design world, to try out different industries and roles, to experience different cultures and to exchange ideas with similar minded people. I did not want to waste a single minute of it.

I worked seven days a week and used every possible opportunity to learn, to research and to network. Besides classes and exams, I completed one project and two internships in three industries in three countries. I spent one exchange term in the US and travelled to many more countries. I participated in every major school event and many business competitions. Some say an MBA is a journey to find yourself. It was exactly through these experiences I started to realise my strengths and weaknesses, my interests and my career options.

My first project came through the discussion board on the LBS intranet, three months into my MBA. It was to help a LBS alumnus, a managing director of the UK arm of a large international construction group, to analyse M&A pipeline targets in the UK construction industry. I secured the job by partnering with a classmate with an M&A background. The successful completion of this project boosted my confidence that I was able pursue a non-engineering career.

When the summer recruiting season began, I was determined to try something totally outside my comfort zone. After numerous mock and real interviews, I won my first internship with the Boston Consulting Group in its Melbourne office. This internship exposed me to the fascinating world of strategy consulting as well as to the magical land and waters of Australia. The challenges to transform from a frontline civil engineer in the UK to the advisor of the top management of a major Australian retailer were beyond my imagination. However, I was equipped with the excellent BCG database and toolkit and supported by extremely intelligent and warm colleagues.

During and after the internship, I also travelled along the south and east coasts of Australia. Interacting with local people furthered my understanding of the country and culture. Snorkeling at the Great Barrier Reef, riding the waves around Tasmania, night climbing of the Sydney Harbor Bridge and watching whales, koalas and kangaroos along the Great Ocean Road have become unforgettable memories of my life.
Fang Fang at Sydney Harbour Bridge 2Fang Fang at Sydney Harbour Bridge

Shortly after my return from Australia, I headed to the Netherlands for my second internship at Shell headquarters in the Hague. Life in the country of windmills, bicycles and tulips was not always rosy. I had to deal with the language barrier while taking up a challenging project at work.My project was to develop a market strategy for the Liquefied Natural Gas (LNG) business.

My background as a civil engineer helped me to understand many aspects of LNG projects and the value chain. Shell was a very international company with a strong networking culture.  People in my team were mostly Masters and PhDs in mathematics or economics with international field sales and strategy experience. I benefited enormously by learning from them and became friends with many. In addition, I spent a considerable amount of time meeting people in different divisions who offered me valuable insights on Shell and their career experience. Working at Shell headquarters was a great opportunity for me to see the workings of the largest company in the world and to learn how incredibly bright and successful corporate leaders think and operate.

The classroom knowledge at LBS laid a very good foundation for me to pursue a management career. My projects and internships taught me the real world, real people and real challenges. Together they transformed me, from a technical design engineer into a commercial and people- minded manager. They also helped me to confirm my passion for the engineering industry and to realise my interest in strategy and operations management.

Soon a perfect opportunity came up. In autumn 2012, the CEO* Program (Chief Executive Opportunity Program) at Siemens came to recruit at LBS. The Siemens CEO* Program is a recently founded and unique leadership program for MBA graduates. Each year, the program recruits six associates globally. The associates have both engineering and business backgrounds and aspire to become general managers in a global company. Top global leaders at Siemens are heavily involved in selecting and mentoring the CEO* Associates. Over the two year program, each CEO* Associate is usually tasked with three international assignments, completely personalised to suit his/her development needs.

To get the job, I went through four rounds of interviews, with the CEO* Program team, with the head of Strategic Projects at Siemens, with a division CEO and finally, with then global CEO of Siemens Peter Löscher. My learning from these interviews is very simple: be yourself, know what you want and be clear about what you can bring to the company. To me, interview skills help you to tell your stories more effectively, but who you are and what skills you have acquired through the years determine how far you can go in the recruiting process.

Siemens is a great company that cares about the development and welfare of its employees. My on-boarding included management training, intercultural training and German language training. The CEO* Program team took great care of all my relocation issues and assignment search. In October 2013, I started my first assignment in the Strategy and Business Development team of Siemens’ train business in Berlin, mentored by the division CEO of this multi-billion euro business. Currently I am leading a project that aims to optimise the sales organisation and approaches in some 20 countries. It is a great opportunity for me to gain an overview of the train business, to gain an appreciation of the business planning, development and sales at Siemens and to understand the highest level strategic topics of a global business.

I am very grateful for every opportunity I was given. Without financial support from the Sainsbury Management Fellowship and the LBS Annual Fund Award, pursuing an MBA would only have been a dream. I sincerely appreciate the job opportunities from the great people and companies mentioned above. My post-MBA journey has just started. I am excited about the new challenges ahead.

Blog

Reflections on the Start of my MBA Journey

Julia Nammuni
Julia Nammuni,  SMF Candidate, LBS

It is more than 15 months since I began my full time MBA at London Business School. Time seems to fly by and the end of my degree is approaching fast.

I recently attended some MBA fairs and met new prospective MBA students to share my experience and to help answer their questions. They reminded me of myself not so long ago, making me reflect on my experience to date:

I started my engineering career in an international engineering consultancy in the ports and maritime division after completing my undergraduate degree in Civil Engineering at Imperial College. My employer kindly sponsored me to complete a post-graduate degree in ports at the TU Delft and subsequently I worked on large scale infrastructure projects in the Middle East, Asia and Europe. The work experience I gained was very rewarding and allowed me to achieve chartership.

Nevertheless, I was becoming more and more interested in strategy and commercial aspects which led, after some soul-searching, to an MBA at London Business School. I was fortunate to receive assistance from Sainsbury Management Fellowship that helped me realise my idea. I am very grateful for the support, without it my MBA journey would have been difficult.

After my first year of courses, I had the opportunity to work during my summer break as a consultant at the Boston Consulting Group in London. The project work was challenging, interesting and created a positive impact for the business. Overall, it was a very enjoyable experience and I am pleased to be returning to the company fulltime upon graduation.

I love travelling and in the second year of my MBA, I did an exchange term at CEIBS (China Europe International Business School) in Shanghai to improve my Mandarin and to explore the region.

Two questions seem to come up repeatedly by prospective MBA students. I hope that by sharing my response to these I may be able to help other engineers thinking about an MBA:

How difficult is the transition to study an MBA, especially for an engineer?
I remember that I was myself very worried about this issue. In my experience to date, engineers do well at business school. What is important to realise is that in a MBA programme there will be professionals from many backgrounds who will have different strength and weaknesses that compensate each other. Thus you learn as much from each other as with each other on the course.

In my study group we had a doctor, an accountant, two consultants and another engineer. The professions in my year group included many different backgrounds such as a professional athlete, lawyers, diplomats, bankers and many more. In addition, almost 90% of the MBA student population is international with experience gained in many different countries. However, all students had at least one thing in common: a unique perspective and insight that enhanced my understanding.

Learning business language was an important part of my MBA journey as an engineer. There were acronyms like “PE”, “VC” and words like “portfolio theory” that were used in discussions that did not mean very much to me at the outset. However, like any language once I learnt what these terms meant, it was no longer difficult to understand.

During the MBA I was never far from an expert in any given topic who was happy to explain terms and concepts or to share their point of view!  And then, there are advantages that engineers have such as strong mathematical and problem solving skills that are useful in most courses.  Thus it seemed to me that I needed to master the language and then to apply my problem solving skills in a different context.

An important difference in the problem-solving approach to me was that as an engineer, I used to try to come up in my mind with hypothetical scenarios to destroy my designs and solutions to problems.  Only if I could no longer destroy them or render them “useless” in my mind, I would consider them further.  In the MBA, it seems to me there is much more emphasis on possibilities and adapting solutions as needed.  Ultimately, in civil engineering, a design life of 50 years is not unusual and failure can lead to loss of life, necessitating a very careful evaluation of possible design scenarios.  Yet many business problems do not have such a long time horizon, do not include the risk of loss of life but require solutions quickly that can be adapted as needed.  Therefore, my approach needed to change to be focused more on potential solutions and likely key issues rather than all the potential problems that could exist.

Thus in conclusion, for me the transition to studying for an MBA required me to adapt to a new language and to change my approach in problem-solving.

And what are your greatest challenges in the MBA?
My greatest challenge in the MBA was and still is time management and prioritisation. There are many different events going on all the time and real choices have to be made. FOMO, Fear Of Missing Out, is the term that describes this phenomenon at London Business School and many other business schools.

Initially, FOMO was almost overwhelming as there were so many opportunities.  Every evening there seemed to be at least seven equally interesting but conflicting events requiring a choice to be made: do I go to one of the career events, one the corporate events, one of the club events, a party or the pub to meet friends? With time passing, my priorities started to emerge.

Nevertheless, every now and again about of FOMO does kick in. Thus, I constantly re-evaluate what is important to me. Further, I am learning to accept that I will miss interesting events as it is impossible to attend them all!

You may also be interested in reading interviews with the latest winners of the SMF MBA Scholarship.

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Use your Personal Brand to Build your Business and Boost your Career

Kathy Ennis Personal Branding Specialist SMALLER

Extract from a presentation delivered at the Sainsbury Management Fellows’ Networking by, Katy Ennis, mentor, trainer and public speaker

An effective, authentic personal brand will help you build a profitable business and boost your career success, but before looking at personal brand I want set the context by looking at the underlying principles of ‘brand’.
What is a brand?
The response that I often get from asking this question is a list of criteria such as logo, strapline, trademark, colour etc. It’s a bit more complicated than that.

At its heart a brand is a collection of thoughts and feelings that customers have about a particular product or service. For example, if you consider your response to two different types of car you may get something like:

Bentley – expensive, stylish, sleek, leather
Hyundai – nippy, cheap, functional

Creating a brand is a step-by-step process that starts with the organisational values and emotional response you want to create; well before images, colours and fonts appear. You can break it down broadly into three sections:

The Brand – at heart this is an emotional response; it is the thoughts and feelings that a customer (or potential customer) has about your products or services.

The Visual Identity – the visual aspects that form the identity of the brand, such as, colours, fonts, shapes, words, symbols. 

The Logo – the simplest form of the brand in that it identifies it via a mark or an icon using the colours, fonts, shapes etc that form the visual identity.

Why is branding important?
There are five main reasons why branding is important:

  1. Recognition: a brand helps customers recognise your product or service
  2. Differentiation: a brand differentiates your product or service from your competitors
  3. Loyalty: a brand helps to build loyalty
  4. Relevance: a brand makes what you have to offer relevant to particular target markets
  5. Focus: a brand enables you to focus your marketing message

Sensation Transference
Back in the 1930s Louis Cheskin, a scientific researcher, clinical psychologist, and marketing innovator embarked on a life-long obsession to understand how customers’ perceptions motivate their purchasing behaviour. Through his research he observed that people’s perceptions of products and services were directly related to the aesthetic details of their design. He named this relationship sensation transference.  He spent most of his life investigating how design elements could significantly impact perceptions of value, appeal and relevance.

Q: What colour is margarine?
A: The answer is often ‘yellow’. The real answer is that it is not. In its natural state margarine is a greyish-white. Cheskin convinced the manufacturers that they would sell more if it looked more like butter.

Do you think he was right?
In his 2005 book, Blink, Malcolm Gladwell considered the work of Cheskin and a number of studies that followed on from his work and in summery Gladwell wrote:

“people give an assessment of something they might buy … without realising it they transfer sensations or impressions that they have about the packaging of the product to the product itself … most of us don’t make a distinction – on an unconscious level – between the package and the product. The product is the package and the product combined”

Blink: the power of thinking without thinking, Malcolm Gladwell, 2005.

Personal Branding
So, where does this leave us in terms of personal branding and its impact on our businesses or our careers?

Well, the first thing to realise is that the process of going through a personal branding exercise is exactly the same as the process for branding a business or a product; you take the three brand elements and apply them to the individual:

Brand – identifying the inner you; your values, your message

Visual Identity – creating the outer you; your ‘look’

Logo – managing the inner and the outer you to determine how you make your mark; build, manage and maintain your reputation

The five elements that make branding important – recognition, differentiation, loyalty, relevance and focus – are summarised in my definition of personal branding:

Personal branding unites your passions, strengths, skills, behaviours, attitudes and core values in a focussed message. It makes you instantly recognisable, differentiates your uniqueness, builds a loyal following and makes you relevant to your target audience.

A personal brand:

  • enables clients or employers to recognise your potential – “does what it says on the tin”
  • differentiates you from your competitors – what makes one engineer better than another?
  • helps build loyalty – client loyalty means they keep coming back (it is far easier to keep a client than it is to find a new one); employer loyalty can influence job security and promotional prospects
  • helps clients and employers understand you and buy into your core values – people buy from (and buy into) people they like
  • makes what you have to offer relevant to your target market
  • enables you to focus your personal marketing message

Summary
Developing a personal brand allows you to understand your core values and create an authentic key message. Your values and your message are then applied consistently across all aspects of your life, your business and your career to enable others to have that ‘emotional response’ and ‘know’ what they are getting when they buy from you or buy into you.

A mentor, trainer and public speaker, Kathy Ennis uses the concepts of engagement marketing and personal branding as a method of business and career development; she firmly believes that it is individual effectiveness that contributes most to the overall success of any organisation. She helps people grow their business; and enhance their networking and communication skills. www.kathyennis.co.uk

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Royal Academy of Engineering & SMF – Engineering Business Leaders

Group shot with DF - 0197

Speaking at a networking reception hosted by the Royal Academy of Engineering for Sainsbury Management Fellows, President, David Falzani (second from left), said:”I‘d like to thank the Royal Academy, not least for hosting this event today, but also for its continued and essential support of the Sainsbury Management Fellows scheme, including the promotion of the bursary and the selection process for choosing new SMFs.

We in turn have also continued our activities in supporting the Royal Academy: as selectors and then mentors for the Engineering Leadership Awards, in supporting the ELA annual events, and the Executive Engineers event.

At our Annual Dinner last May I asked why is it so important to have engineers and scientists gaining top MBAs and business qualifications?

I’d like to take this opportunity to repeat my answer, that the business world has shifted. The third great revolution of modern man, the information revolution, has transformed every aspect of life and business.

What counts for business success today is not who you know, nor even what you know, but today the maxim for success would perhaps be, how quickly can you learn. Today, all companies are technology companies in some respect, and all information is instantly out of date.

What’s crucially important is the ability to harness this flux of technology and information in the business context in order to maximise chances of success.

Within this interface of technology and money no one can be more at home than the engineer with a deep business understanding. This idea lies at the heart of the SMF Scheme.

The SMF scheme was created almost 30 years ago to get more senior executives with engineering qualifications at the top of organisations. Today, the scheme has 300 Fellows, each with a first class engineering background, and an MBA from a top international business school.

Many fellows are helping further develop some of the UK’s largest corporations, whilst many others have gone on to create high growth technology companies worth over £500m.

As an organisation, and a group of like-minded individuals, we remain keen to continue to support the Royal Academy, and perhaps become involved with emerging initiatives such as its Enterprise Hub and other areas of mutual value.

Finally, I would like to ask our Fellows here this evening to consider how they can become involved in current and future activities of the scheme, and also with our fund raising activities. We remain keen to add a few more volunteers to our fundraising campaign team.

In closing, I hope this evening proves to be a success, and an example of working in a closer partnership with the Royal Academy.

“I‘d like to thank the Royal Academy, not least for hosting this event today, but also for its continued and essential support of the Sainsbury Management Fellows scheme, including the promotion of the bursary and the selection process for choosing new SMFs.

“We in turn have also continued our activities in supporting the Royal Academy: as selectors and then mentors for the Engineering Leadership Awards, in supporting the ELA annual events, and the Executive Engineers event.

“At our Annual Dinner last May I asked why is it so important to have engineers and scientists gaining top MBAs and business qualifications?

“I’d like to take this opportunity to repeat my answer, that the business world has shifted. The third great revolution of modern man, the information revolution, has transformed every aspect of life and business.

“What counts for business success today is not who you know, nor even what you know, but today the maxim for success would perhaps be, how quickly can you learn. Today, all companies are technology companies in some respect, and all information is instantly out of date.

“What’s crucially important is the ability to harness this flux of technology and information in the business context in order to maximise chances of success.

“Within this interface of technology and money no one can be more at home than the engineer with a deep business understanding. This idea lies at the heart of the SMF Scheme.

“The SMF scheme was created almost 30 years ago to get more senior executives with engineering qualifications at the top of organisations. Today, the scheme has 300 Fellows, each with a first class engineering background, and an MBA from a top international business school.

“Many fellows are helping further develop some of the UK’s largest corporations, whilst many others have gone on to create high growth technology companies worth over £500m.

“As an organisation, and a group of like-minded individuals, we remain keen to continue to support the Royal Academy, and perhaps become involved with emerging initiatives such as its Enterprise Hub and other areas of mutual value. Finally, I would like to ask our Fellows here this evening to consider how they can become involved in current and future activities of the scheme, and also with our fund raising activities. We remain keen to add a few more volunteers to our fundraising campaign team.

“In closing, I hope this evening proves to be a success, and an example of working in a closer partnership with the Royal Academy.”

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Why Look at Grant Funding? Part 2

sam-cockerill

The question you might ask yourself before you put pen to paper is whether, given the preceding questions about the associated value and risk, now is genuinely the right time to go for this particular grant application.  You may come across a one-off grant opportunity dispensing ready cash from some un-spent pot and when it’s gone it’s gone, in which case, good luck!  However, most grants are distributed from public funds (which, though tight, are recurring) to achieve policy aims that generally (but not always) survive multiple grant funding rounds and mechanisms.

A number of grant schemes either have ‘open calls’ i.e. apply when you like, or are phased with a clear timetable of when each batch of new applications should be submitted for consideration.  If your project would be more valuable if it kicked off in 12 months’ time, for example to benefit from the results of current projects, fundraising activities or partner negotiations – then wait, and your application will be much stronger for it.

Tips to help you secure funding

  1. Target your application. Scour the internet for grant opportunities, get onto the right mailing lists.  When you find a grant opportunity that looks right, read the competition scope in detail, then re-read your plan.  Are they aligned?  Does the project you are considering get you to your intended destination, faster?  Or is it a bit of a stretch, tempting only because of the prospect of non-diluting funding?
  1. Invest the necessary time to do your application well, your competitor applicants will. If you have satisfied yourself that the application is worth doing, then you need to pull out all the stops to define the best possible project with the best possible partners, and describe it in the best possible light.  It will take time.
  1. Research and review your application thoroughly.  Find a business that has succeeded with this particular grant scheme in the past, and ask them for advice.  Speak to your partners about the application.  Ask your advisory board for input, and for proof reading. Don’t submit an application with sloppy typos or one that is inadvertently out of scope.
  1. Reflect on your past failures.  It is unlikely that every grant application you submit will succeed.  If you fail, you will normally get feedback from the process, sometimes in the form of anonymous reviewer comments.  Pour over this feedback, and check whether there are any areas you could improve next time.  Did the reviewer(s) understand your proposition?  Were they sceptical about your market or product assertions?  This type of feedback is your most valuable source of information you can have for those grant competitions where you are permitted to re-apply.
  1. Take your rejections for what they are:  a source of feedback and a reflection of the competitive nature of grant funding.  Use this feedback to sharpen your judgement about whether the next grant is worth going for.  Do not give up.

GOOD LUCK!

Other funding support is available through the ecoConnect Investor Directory, Grants Directory and Greenbackers Investment Pitch.

A number of grant schemes either have ‘open calls’ i.e. apply when you like, or are phased with a clear timetable of when each batch of new applications should be submitted for consideration.  If your project would be more valuable if it kicked off in 12 months’ time, for example to benefit from the results of current projects, fundraising activities or partner negotiations – then wait, and your application will be much stronger for it.

TIPS TO HELP YOU SECURE FUNDING

  1. Target your application:Scour the internet for grant opportunities, get onto the right mailing lists.  When you find a grant opportunity that looks right, read the competition scope in detail, then re-read your plan.  Are they aligned?  Does the project you are considering get you to your intended destination, faster?  Or is it a bit of a stretch, tempting only because of the prospect of non-diluting funding?
  2. Invest the necessary time to do your application well, your competitor applicants will:If you have satisfied yourself that the application is worth doing, then you need to pull out all the stops to define the best possible project with the best possible partners, and describe it in the best possible light.  It will take time.
  3. Research and review your application thoroughly:Find a business that has succeeded with this particular grant scheme in the past, and ask them for advice. Speak to your partners about the application.  Ask your advisory board for input, and for proof reading. Don’t submit an application with sloppy typos or one that is inadvertently out of scope.
  4. Reflect on your past failures:It is unlikely that every grant application you submit will succeed.  If you fail, you will normally get feedback from the process, sometimes in the form of anonymous reviewer comments.  Pore over this feedback, and check whether there are any areas you could improve next time. Did the reviewer(s) understand your proposition?  Were they sceptical about your market or product assertions?  This type of feedback is your most valuable source of information you can have for those grant competitions where you are permitted to re-apply.
  5. Persevere:Take your rejections for what they are:  a source of feedback and a reflection of the competitive nature of grant funding.  Use this feedback to sharpen your judgement about whether the next grant is worth going for.  Do not give up.

GOOD LUCK!

Other funding support is available through the ecoConnect Investor Directory, Grants Directory, and Greenbackers Investment Pitch

Click here to read part 1

Blog

Why Look at Grant Funding? Part 1

sam-cockerill

This blog was first published on Ecoconnect, a cleantech networking and funding forum. It has been republished with the permission of Fellow, Sam Cockerill, to share his experience of applying for grant funding for business development.
On the one hand, any additional sources of funds are welcome, especially for pre-revenue tech businesses in the UK which may find it tough to get that first external funding round in place. Some technology start-ups, often in the US, can get to market with angel and/or venture capital funding alone. In the UK, there is a chronic shortage of such investors willing or able to back pre-revenue businesses with the kind of funding required to develop market-ready products. Grant funding can help to meet this funding shortfall and can also improve the odds of securing external investor funding.

On the other hand, getting your business off the ground requires that you push hard on several fronts at once: Researching your market and potential customer needs, developing your product or service, establishing a credible route to market, getting your team and partner relationships in place, securing external funding, reporting on your progress to investors, winning your first sales and handling a multitude of administration tasks. Your time is precious, and taking on any new activity will create more work.

Questions to ask yourself before committing time
To date around a third of total funding for my start-up business, Libertine FPE, has come from grant sources although not all of our grant applications have succeeded. Before I consider working on a prospective grant application, I ponder three questions: What is the value to my business? What are my odds? Is this the right time?

What is the value to my business? More specifically, how will this grant funding help me achieve more revenue, sooner, and with less risk?
Competitive grant schemes are typically awarded to undertake specific project proposals. A grant competition scope document may provide tight criteria defining what types of projects are eligible and how projects will be assessed in the application process. If a viable project defined in this way is a significant departure from your core business plan it’s probably going to pull resource away from your most important priorities and may require incremental fundraising to cover any matching requirements – clearly a non-starter. If this project is directly aligned with what you are already planning to do, grant funding can make a meaningful contribution to the total funding requirements of your business and accelerate your time to market by months or (possibly) years. If this improvement is only marginal, consider whether the application effort is worthwhile. This is the first and most important test of whether a particular grant competition could be worth going for.

What are my odds?
Unless you have time on your hands, smaller grants may not provide the scale of game-changing support necessary to justify the application time and effort. However, larger grant schemes are fiercely competitive, and if the odds of success are too low you will probably be wasting your time.

The key here is in the grant competition scope details that are typically provided in guidance documents and briefings, and which set out the competition scope and selection criteria that will be applied in the assessment of applications. These may include the nature of the technology (For example the market application, technology readiness level, intellectual property status), the nature of the business and/or consortium (size, age, location, SIC code, inclusion of research or academic partners) and the potential benefits (for example CO2 impact, value creation, wider economic and social benefits).

The competition scope criteria are typically qualitative tests, in other words your project either fits or it doesn’t, but the scope document may also provide some guidance as to the types of projects that are most likely to succeed. The assessment criteria are typically more subjective and your application might consist of a set of responses to discrete questions which are assessed and scored individually. A successful application must be within the competition scope, and must score sufficiently highly relative to other in-scope applications.

If the scope is very broad and the assessment criteria generic, the field of applicants will be huge and it will be harder to differentiate your application based on its fit with the scope and assessment criteria. If you happen to find a grant competition that fits directly with your technology, market application and business model, the odds are likely to be better – however, there is a twist.

Most grant assessment criteria include evidence of ‘additionality’, i.e. evidence that if you get the grant you will take a different course of action that is in addition to your plans without grant support. This requirement may appear to conflict with the imperative that your grant funded project is directly aligned with your core business plan. If your business plan is to develop and launch widget A in market X, a project to develop widgets B and C for markets Y and Z clearly passes the ‘additionality’ test but there may be good reasons why these new products/markets did not feature highly in your original plan, grant funding or not.

If your additionality argument is ‘no-one else will fund us’, you immediately undermine the business case set out elsewhere in your application. Perhaps the most legitimate form of ‘additionality’ in my view is the acceleration of your technology development and market entry plan. Rather than progressing with small steps through several cycles of product development, market proof and fundraising as you climb towards your first revenues, a good grant funded project will let you bound up the same staircase, ideally providing you with some robust technology or market proof, cementing one or more partner relationships, and setting you up for success your next funding round. The destination may be the same, but the grant funded project should get you there much quicker.

In my next post, I will discuss the timing of your application and provide top five tips for making a grant funding application.

Grant funding can play an important role in getting a clean technology business started but the application processes are often complex and time consuming. With increasing competition for available UK grants the odds of success may be low. For a cleantech entrepreneur, the decision to commit scarce time and effort to apply for grant funding can be finely balanced.
On the one hand, any additional sources of funds are welcome, especially for pre-revenue tech businesses in the UK which may find it tough to get that first external funding round in place. Some technology start-ups, often in the US, can get to market with angel and/or venture capital funding alone. In the UK, there is a chronic shortage of such investors willing or able to back pre-revenue businesses with the kind of funding required to develop market-ready products. Grant funding can help to meet this funding shortfall and can also improve the odds of securing external investor funding.

On the other hand, getting your business off the ground requires that you push hard on several fronts at once: Researching your market and potential customer needs, developing your product or service, establishing a credible route to market, getting your team and partner relationships in place, securing external funding, reporting on your progress to investors, winning your first sales and handling a multitude of administration tasks. Your time is precious, and taking on any new activity will create more work.

Questions to ask yourself before committing time: To date around a third of total funding for my start-up business, Libertine FPE, has come from grant sources although not all of our grant applications have succeeded. Before I consider working on a prospective grant application, I ponder three questions: What is the value to my business? What are my odds? Is this the right time?

What is the value to my business? More specifically, how will this grant funding help me achieve more revenue, sooner, and with less risk? Competitive grant schemes are typically awarded to undertake specific project proposals. A grant competition scope document may provide tight criteria defining what types of projects are eligible and how projects will be assessed in the application process.

If a viable project defined in this way is a significant departure from your core business plan it’s probably going to pull resource away from your most important priorities and may require incremental fundraising to cover any matching requirements – clearly a non-starter. If this project is directly aligned with what you are already planning to do, grant funding can make a meaningful contribution to the total funding requirements of your business and accelerate your time to market by months or (possibly) years. If this improvement is only marginal, consider whether the application effort is worthwhile. This is the first and most important test of whether a particular grant competition could be worth going for.

What are my odds? Unless you have time on your hands, smaller grants may not provide the scale of game-changing support necessary to justify the application time and effort. However, larger grant schemes are fiercely competitive, and if the odds of success are too low you will probably be wasting your time.

The key here is in the grant competition scope details that are typically provided in guidance documents and briefings, and which set out the competition scope and selection criteria that will be applied in the assessment of applications. These may include the nature of the technology (For example the market application, technology readiness level, intellectual property status), the nature of the business and/or consortium (size, age, location, SIC code, inclusion of research or academic partners) and the potential benefits (for example CO2 impact, value creation, wider economic and social benefits).

The competition scope criteria are typically qualitative tests, in other words your project either fits or it doesn’t, but the scope document may also provide some guidance as to the types of projects that are most likely to succeed. The assessment criteria are typically more subjective and your application might consist of a set of responses to discrete questions which are assessed and scored individually. A successful application must be within the competition scope, and must score sufficiently highly relative to other in-scope applications.

If the scope is very broad and the assessment criteria generic, the field of applicants will be huge and it will be harder to differentiate your application based on its fit with the scope and assessment criteria. If you happen to find a grant competition that fits directly with your technology, market application and business model, the odds are likely to be better – however, there is a twist.

Most grant assessment criteria include evidence of ‘additionality’, i.e. evidence that if you get the grant you will take a different course of action that is in addition to your plans without grant support. This requirement may appear to conflict with the imperative that your grant funded project is directly aligned with your core business plan. If your business plan is to develop and launch widget A in market X, a project to develop widgets B and C for markets Y and Z clearly passes the ‘additionality’ test but there may be good reasons why these new products/markets did not feature highly in your original plan, grant funding or not.

If your additionality argument is ‘no-one else will fund us’, you immediately undermine the business case set out elsewhere in your application. Perhaps the most legitimate form of ‘additionality’ in my view is the acceleration of your technology development and market entry plan. Rather than progressing with small steps through several cycles of product development, market proof and fundraising as you climb towards your first revenues, a good grant funded project will let you bound up the same staircase, ideally providing you with some robust technology or market proof, cementing one or more partner relationships, and setting you up for success your next funding round. The destination may be the same, but the grant funded project should get you there much quicker.

Click here to read part 2.

Blog

Entrepreneur Blog – Getting Funding

Chirag Shah Family Photo Sept 2013 Edited
SMF Chirag Shah, a successful serial entrepreneur

In my previous blog I discussed the importance of ‘knowing your numbers’ – the key business metric of knowing how much you need to sell of something and at what price to NOT LOSE money. Of course in reality you wish to make money (lots of it hopefully) and this almost always results in the need to spend money upfront in order to make more money afterwards. For this, you need a business plan.

There are so many How To Guides on writing a business plan that I won’t go into the details here. Rather, I will focus this post on a few tips to assist you when preparing your business plan.

Do it Yourself
As entrepreneurs we are itching to dive into the lab and perfect our mousetrap, or get out on the street and talk to customers. But you need to have a deep understanding of what all the costs are and how much money you will need – not just now – but for the foreseeable future to ensure your business can prosper. There’s plenty of ‘advisors’ out there who will prepare a business plan for you, but you really must avoid this. However painful it might be for you to sit in front of a PC, if you don’t understand what went into your plan then you don’t really understand how you are going to make money from your business.

Understand the Dependencies
Most folks tend to lean on Microsoft Excel for the production of their business plan. And I have no issue with that but there is an issue with Excel that one has to watch out for or be an extremely sophisticated XL wizard. When you put all your costs and all your revenues into your model be careful to link them as much as you can. For example, you may have assumed that you will acquire four customers from each Marketing Conference that you sponsor.

If you then find that you are only acquiring two customers you need to rethink your approach to Marketing Conferences and change the business plan accordingly. Most people get that. But did you also modify all your costs to reflect the slowdown in customer acquisition? Maybe you assigned some part of executing the plan to a colleague who is innocently plodding along acquiring all these staff/supplies/premises as per the requirements in the business plan. Sounds trivial? Believe me, you will never stop having to adjust and re-adjust your plan and the successful entrepreneur is the one that a) intuitively understands the inter-dependencies and b) has the strength to swallow their pride and modify the plan in the face of adversity.

Shah’s Law
This brings me to the final point in this blog – which I have coined Shah’s Law – because I’m not aware of anyone else coming up with a similar heuristic before.  So you are proudly looking at your shiny new business plan with all your costs and revenues and it all adds up neatly and shows lovely profits at some point in the future, right? At this point you need to apply Shah’s Law which states: “Your sales forecast is over-optimistic by a factor of 4 divided by the number of start-ups in your experience including this one”.

For example, if this is your first venture, and you estimate you will be selling 2000 units a month by the end of six months, then Shah’s Law predicts that you will be selling that number by the end of 24 months. But if this is your second venture then you’ll probably be hitting that number by month 12 and if you are on your fourth business – happy days – you are probably staring at a business plan that is actually quite accurate!

Why Shah’s Law? Well, two factors feed into this; firstly sales forecasting is a delicate skill that can only be honed through experience (school of hard knocks) and secondly, as you conduct more ventures your business credentials – reputation, risk, contact network – all improve which in turn contributes to reducing the sales cycle in subsequent ventures.

So, go back and take a knife to that hockey stick forecast, but don’t despair, if you’ve got your inter-dependencies connected then your costs will go down too!

The cash shortfall in your business plan is then the amount of money that you need to get your business funded. We’ll look at how to fund this in the next blog instalment.