Category Archives: Blog

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A Two Year Transition – My MBA Journey

Gil Rabbie SMALL
SMF Gil Rabbie

It’s almost two years to the day, when after 6.5 years as a loyal employee, climbing up the ranks of the corporate hierarchy, through manufacturing, operations and project management roles – I resigned, to pursue my MBA at London Business School (LBS). Looking back now, I can recall the anxiety of not only losing my steady income but also the unease I had about ‘jumping ship.’ After all, this was my first and only full-time job after graduating from Imperial College as a chemical engineer back in 2004. I quickly realised that the ship I had seemingly jumped was far more resilient to my departure than I had previously felt.

I had considered making a career switch to a commercial direction for some time and eventually decided that I wanted to achieve that by learning best practices, cross-functionally from all over the business world: Understanding corporate strategy in addition to how to finance start-up ventures, appreciating macroeconomic growth trends as well as improving negotiating and other communication skills. I felt that an MBA would be the best way to combine what I had learnt ‘on the shop-floor’ and build a broader sense of perspective on those foundations. Furthermore, studying at a top-quality international business school, would provide a globally recognised qualification, a valuable lifelong network and not least, enable a better return on the heavy investment expected.

The research, preparation and significant application process took me over a year, particularly as I had little down-time at work, with one project after another requiring my time and attention. With GMAT scores in place, essays written and references gathered I was determined to make my application successful first time, as the window of opportunity for completing a full-time programme was closing steadily. Engineer that I am, I systematically considered my choice of school and concluded that with my desire to study in an internationally focused school with a mature student body that encompassed a range of experiences and crucially, my plans to work in London immediately after the programme – the best school for my purposes was right here in Europe. Ultimately, I chose London Business School as it offered everything I was looking for and moreover, was close to home making it easier on my personal life and expense outlay.

The two years at LBS have gone by like a flash. No sooner had I begun to take in the mass of new information from coursework and academic life, was it time to make the career switch and in particular, find an internship for the summer – my number one priority. Nevertheless, I tried to remind myself throughout, that the enormous wealth of opportunity to learn and try new things as well as a vibrant network of new friends and contacts was not going to last long – all of which resulted in a busy schedule full of activities, some 12 hours a day, 6 days a week. I attended a plethora of interesting talks, conferences and seminars, apart from my required studies which I found by and large, to be truly eye-opening and thought-provoking, particularly the electives I took.

I spent my summer after the first year gaining experience in strategy consulting, through an internship at The Boston Consulting Group, in its London office. In addition to developing my ‘consultant toolkit’ of analysis and presentation skills, I also had the opportunity to learn about the activities which the firm and office are involved with, in more depth and how they are impacting business thinking at the most senior levels. I was delighted to receive a full-time offer at the end of the internship and intend to commence my full-time post-MBA career at BCG London.

Whilst at LBS, I also became heavily involved in student leadership roles, becoming the president of the Running Club as well as the Industry Club. This not only gave me fantastic experience to try out, in a fairly ‘risk-free’ manner, some of the tactics and ideas I had picked-up in the classroom and from previous experience, but also widened my circle of friends and professional contacts even further. I even achieved a few unique firsts, including a triathlon and organising a conference.

Additionally, the flexibility of student life and in particular the second year at LBS, offered the chance to pursue some personal priorities, which would be more challenging in full-time employment. The first was taking quite a few trips abroad including sailing in Antigua, hiking in the Indian Himalayas and wine-tasting in South Africa.

Gateway of India

Holi – festival of colours, experienced with the locals at The Gateway of India – Mumbai

The second and most important of all, was deciding with my wife to become parents for the first time and our daughter was born at the end of my first year of studies (in fact, on the day of my final exam!). That transition has been my most momentous and fulfilling of all.

So all in all, I have had two hectic and intense years during which time I learned an enormous amount: completely repositioning my career in a commercial trajectory whilst at the same time developing myself immensely and building a significant network of contacts and close friendships. Having just had my graduation and with work restarting imminently – the future seems full of promise and opportunity from where I am sitting. I also know there will continue to be plenty of challenges, but I doubt I would have gone down this path, if I did not highly relish those…

Finally, my advice for those who may be considering the MBA may be somewhat surprising having read the above. I believe it’s not a benefit to everyone and is a need for few. That is to say, the course and learning that comes around it, are only as good as what you make of the experience and the same goes for graduates returning to the workplace: there will be those that revert to what they feel comfortable with and there will be those that seek to continue to learn and push the boundaries of what is possible. I intend to be the latter and much of that desire has been driven by the fundamentals and the flames of ambition that have been further fuelled by the MBA. I am in no doubt that this was the right decision for me and I know that, without the help of the Sainsbury Management Fellowship my experience would have been very different, perhaps even non-existent and for all this – I am immensely grateful.

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

 

Blog

Intrapreneurship and Smarter Impact

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SMF Phil Westcott

Inspired by recent entrepreneurial articles from the hugely impressive SMF community, I thought I’d chip in with a story of my own.  I consider the courageousness of the classic entrepreneurs in some awe… but as a man of less iron resolve, I prefer my entrepreneurship from the vantage point of a large corporate, in my case IBM.

So my story is one of “Intrapreneurship”… applying entrepreneurial skills to pursue new opportunities for your company and in doing so, create new exciting career opportunities for yourself.  If your career ambition is driven by a desire for personal impact on society at large, then leveraging corporate scale might be as effective as going it alone.

In summer 2011, I joined IBM in the midst of it centenary year, celebrating its role in technology leadership from the personal computer to the moon landing.  And as I looked at the vast portfolio of solutions, I bought into the IBM Smarter Planet vision, aligning good business by tackling global and societal problems.

However, there seemed a gap in the solution set.  It appeared that our planets greatest challenge of our time – the challenge of global inequality – was not being directly addressed by an IBM business unit or solution set.  And this is hardly surprising. Despite the popular support for Prahalad’s Fortune at the Bottom of the Pyramid, few companies have found business models that effectively serve this market at scale.

So coming into IBM fresh from my Sainsbury Management Fellows-sponsored MBA, and full of the naïve optimism of a newbie, I set about finding the business models that might harness the collective power of such a great institution – 430,000 employees, and $6bn a year in R&D – to address this challenge: and not by way of philanthropy or traditional CSR; but with the conviction with which business pursues attractive growth opportunities.

And so outside my day job as a strategy consultant, I launched IBM Smarter Impact. Through a certain amount of belligerence and networking, the concept has evolved over the past year and a half into a global initiative with global resources. So I’d like to use this blog to air some thoughts on intrapreneurship before concluding with a brief word on where the Smarter Impact journey has led…

Encouraging intrapreneurship in large organisations…
Large corporations typically require a disciplined structure of business unit, product and industry alignment, a discipline that enables predictable business performance on a quarterly basis.  My view is that there is a temptation to leave innovation to the R&D department, however successful a company might be at churning out patents.

However, many game-changing business innovations originate from employees who spot a business opportunity that cuts across traditional organisational silos.   For a systematic solution, companies must encourage the behaviours that are required to drive these ideas in their early gestation.  This requires the right recruitment, incentive and promotion policies, so that the middle and senior leadership are populated with leaders who at least recognise, if not exhibit, true entrepreneurial behaviours.  The organisation must then have the platforms to accept or reject the new ideas once they have reached a period of maturity.

  • Recruit the right blend of employee, and look out for those with an entrepreneurial spark
  • Ensure there is an entrepreneurial element within formal training programs
  • Use the formal mentoring structure to encourage pursuit of ideas in their early stages
  • Allow employees some leeway to work on their pet projects on the side of the day jobs, and recognise these activities in their remuneration review
  • Find a platform for sponsorship of new business opportunities.
  • But not too early in the life of the idea, perhaps once a first sale has been achieved or the model proven as commercially viable This ensures that the employee has the tenacity to stick with their idea, and the conviction to see it through

What makes a good intrapreneur?
Like the entrepreneur, the intrepreneur has the benefit of being able to create and lead new ventures at any stage of their career and not just once a senior position has been attained. Also like the entrepreneur, they work with limited resources – even including their own time.  Therefore similar skills are required to improvise, acquire resources and build momentum.

But there are additional skills required by the intrapreneur. At a recent meeting with a large UK city council, it was proposed that there are three types of city leaders: Political leaders, Thought-leaders and Managerial leaders. The rational was that an effective city leader will be one of the three.  Which got me thinking about intrapreneurs… It seems to me that the most effective intrapreneurs need to be pretty good at all three.  In the context of driving change and innovation in a large company, this means:

Political leadership – managing up, don’t always ask for permission, ask for advice to unlock resources and help. Identify some senior sponsors, and in doing so, choose the most appropriate ‘home’ within the organisation.  For example, the momentum behind Smarter Impact has benefited greatly from positioning as a surrogate of IBM’s Smarter Cities business.

Thought-leadership – taking ownership of the idea, find other global thought-leaders through blogs and networks, participate in the debate and help move the conversation on.

Managerial leadership – an ability to manage sideways and downwards to galvanise support and herd existing disparate efforts/initiatives into a critical mass of success stories. An ability to secure additional resources on limited budgets: for example, leveraging university relations as a source of bandwidth and innovation*.

Take my IBM colleague Rick Robinson, a global thought-leader on smarter cities.  Rick may be famous for his thought and technical leadership around data solutions for cities, but he also displays the other traits of a highly effective intrapreneur.

(*As a side note, Universities are always looking for interesting commercial, explorative projects, but having witnessed from both sides, too often these are badly conceived, poorly supported and then stray off the desired outcome. The academic teams need leading and motivating and then the output can be fantastic. For example check out this video delivered by LSE for Smarter Impact and the city of Rio de Janeiro after just 3 weeks of work.)

So where is Smarter Impact today?
Smarter Impact was publicly launched at a London conference in September 2012, an event I actually missed as it coincided with the birth of my first child!

This event engaged participants from across private, public and third sector, and really moved on the discussion.  Smarter Impact has now crystallized into a mechanism for new partnerships between private, public and third sector to drive inclusive economic development.  It has evolved a suite of data-driven solutions, which capitalise on exciting new sources of data and connectivity, such as the proliferation of mobile data and crowd sourcing.  While originally pitched at the international development sector, the principles are now being applied to drive social inclusion agendas in our UK city partnerships.  Crucially for its future in IBM, Smarter Impact is now bringing in revenue and opening up new lines of dialogue between global leaders from the World Economic Forum to Sunderland City Council.

Phil is Business Development Executive for IBM’s Smarter Cities business in SE Asia, and global leader of IBM Smarter Impact. For more information contact Phil (phil.westcott@uk.ibm.com).

Blog

Guide to Entrepreneurship – Getting Started

Chirag Shah (1)
SMF Chirag Shah, a successful serial entrepreneur, contributes his second blog in a series of six.

My co-blogger George Fowkes’ Guide to Entrepreneurship – Getting Started posted last October about the key steps of how to get started and a priority list of the key things to think about in the early stages.  So I thought I would complement his post with some practical tips that you won’t find in the textbooks.

At this stage you have a great idea that you are pretty sure can withstand the blows of competitors and make you some money. If you are going to take your idea forward into a business, the next thing you must do is set up a company. At this stage, it doesn’t matter too much what the company is called; you can always change it or set up a subsidiary with a more suitable company name later.  The UK is, in my experience, the easiest country in the world to setup a company. You can actually do it online in about 5 minutes and it only costs a few pounds! (Get the details from Companies House website.)

So why the urgency? Because it’s a quirky fact of life – especially in this day and age of heightened transparency – that most of your stakeholders (future employees, banks and clients) will assess your credibility first and foremost by the period of time that you have been in business – i.e. since your company was born! For example, most banks won’t extend credit to companies that have been in business for less than 6 months old – regardless of how much sales revenue they generate, so you might as well start the clock ticking. Completely meaningless and outdated, but that’s how it is. Now here’s the clever bit: get your newco set up now and hey presto in less than 365 days time your “Founded in 2013” cachet will make you one year old in the eyes of most stakeholders!

Tip 2: Know your numbers
By this I do not mean do a business plan. I’ll get to that in my next post entitled “Getting Funding”. I mean figure out what is the minimum you need to achieve to ensure you don’t go bust. The former Cabinet Minister and über successful publishing mogul, Michael Heseltine, is famously attributed with doing the numbers for his publishing business on the back of an envelope.

In my view you should be doing precisely that too. In any business only a few key numbers drive the whole profit equation and its imperative that you know what they are and understand them simply enough to do the calculation “on the back of an envelope”. Now, I appreciate that as a business grows it can get more complicated, but at the very least, you should be able to do the calculation to the point where you understand the “break-even” – in other words, working backwards to understand how much you need to sell to cover your operating costs.

Here’s an example that I use with prospective franchisees of my écurie25 Supercar Club concept:

KEY COSTS per month:

Staff – £10,000
Cars – £15,000 (5 cars @ average £3,000 per car per month)
Rent – £4,000
Marketing – £2,000
Other -£5,000 (round number factoring in insurance, service costs, professional fees, admin, etc)
TOTAL £36,000

On the REVENUE side
Average Membership (customer) Income per member per month (net of vat) – £1,200

Hence, the number of members required to hit break-even = 36000/1200 = 30

[Sanity check: Number of members that a club with 5 cars can support 40]

So, that’s it. If you wanted to start a Supercar Club, you’d need to ask yourself whether you could recruit 30 customers, at least.

Of course, you can go on from there to calculate how much money you would make with 40 customers, 60, etc and certainly you might have to add in more costs (supercars, in this case) to support the expansion; and of course there may well be start-up costs such as license fees, and fit-out costs and also other sources of income such as delivery charges and venue hire and so on.  Of course, there are many other revenue and cost items you can (and will) include in your business plan, but you now have your key metric that will shape your entire business thinking…I need 30 customers to break-even, let’s call it 35 to be on the safe side!  So now your focus can start to address key questions such as: can the market support that number? Where would I get them from? How many customers can I count on from my current network?

Tip 3: Ignore your customers
Well, at least for the time being. I know I’m flying in the face of convention on this one but here goes… I don’t advocate customer market research for start-ups! Henry Ford reputedly once said, “If I asked my customers what kind of car they wanted, they would say a faster horse”. When working in established markets, customers are very good at knowing what they want. But in the land of entrepreneurs, where hopefully you are bringing something to market that is a bit ground-breaking/innovative/disruptive, your potential customers are not the best source of feedback. By all means do canvas their opinions, but be prepared to take what they say with a pinch of salt. In reality most people are not that innovative; they are reluctant to accept change and slow to absorb great ideas even when they see them.

I find a much more beneficial route for entrepreneurial ventures is to undertake market research through talking with competitors (or “close-competitors” if there’s nobody doing exactly what you do), potential partners and key suppliers in the sector. Certainly, if what you are doing has been tried before, they will know, and more importantly they will have a good idea why your idea won’t work or didn’t work (in the past) which will help you refine your proposition to maximise the chances of success.

Of course you’re probably now wondering how you do that without giving away your top secret plans. Well, you need to be smart – talk to them in roundabout ways or share only a part of your secret sauce to ascertain whether it’s an area that they have considered before, or are considering right now. In my experience, most people like to meet and discuss – in this era people understand that today’s competitor is tomorrow’s partner and an open information exchange with a current or potential player has value to them too. Just be careful and understand your boundaries about what you are willing to share well. Prepare beforehand and don’t allow yourself to overstep the mark.

If you don’t feel you can talk to competitors, vendors and partners then mystery shop them – either yourself or through an agent as the case may be.

Tip 4: Defend your IP
If there is an element of internet or web identity in your proposition (and there should be), then do spend a bit of money now making sure you have conducted some legal searches to ensure you are not treading on anyone’s toes, and simultaneously taking the necessary step to protect your IP (intellectual property). It may be a painful expenditure at this stage in the start-up cycle, but the harsh truth is that the later you leave it the less “protectable” it becomes. A few well-spent pounds now could save you a fortune in legal fees or lost business later.

Tip 5: Focus on “frustomers”
In early stage business, sales can be divided into two groups: personal sales and “others”.

Personal sales relate to customers that know you from before (friendly customers or frustomers).  Either they bought from you in a past life, or know (of) you from your previous achievements.  The key is that these people are buying you and your reputation, not the product/service that you are going to create.  Therefore, you can sell to these people before you have even made the product – perhaps a concept or prototype is sufficient for them.  Of course, I don’t mean literally that you can get a cheque from them, but you can explain what you are planning to do and should be able to gain a significant degree of commitment – emotional, letter of intent, handshake, heartfelt promise – from at least some of them that helps you increase your confidence about your early-stage sales trajectory.

Note: If you are struggling to get sales commitments from this group, or don’t know anybody in this group, think very carefully about whether and how you wish to proceed. You’re probably doing something seriously wrong.

The “others” group don’t know you and it’s not worth trying to pitch to them too soon; if anything, you will lose credibility and make selling to them even harder later on.

In summary, most of this post has been dedicated to eliminating downside risk before you go off and start spending major chunks of money creating your product and bringing it to market. If you address these steps effectively, you should have moved from having a great idea to a new business and you should also be feeling pretty good about your future prospects for this business – without actually having spent more than a few thousand pounds in getting there.

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Running an Engineering Business in West Africa

Ernie Edited
SMF Ernest Poku is currently working in Accra, Ghana as the Country General Manager and Director for an oil services company servicing the regional oil industry.

I manage 25 staff at our Ghana operations base and hold full profit and loss responsibility for the operations.

Most of our products are mechanical engineering focused supplies to the upstream oil and gas industry in the region.  I regularly travel to Ivory Coast, Togo and Nigeria in addition to my work in Ghana.  I travel to meet with customers and discuss their needs in terms of engineering services, often I need to demonstrate that these services can be effectively sourced in the region rather than ordered from the EU or USA.  I often identify new opportunities and add new products and services to our portfolio.

The West African region is much more diverse than I ever imagined and bears some interesting similarities to the European Union.  There is a burgeoning Economic community of West African states consisting of 15 states and a population of 300m people; the big difference is that this population is dominated by Nigeria with a population of over 160m people.  Nigeria is currently the second largest economy in Africa and projected to become the largest economy within a decade; it is an economy dominated by the oil industry. Ghana by contrast is the second largest economy in ECOWAS with a population of 25m people and the highest growth rates in Africa with 14.4% growth in 2011.  There is even a common currency between a number of the French speaking states in ECOWAS, the CFA which existed long before the Euro and there are discussions on a regional currency union ongoing.

Working in West Africa has its pleasures and challenges.  One of the things I didn’t realise before I arrived here was how much I would have to travel by plane to visit different cities.  The cities are densely populated and the countryside is sparsely populated and the road network is very poor; motorways between cities are rare.

Accra, the capital of Ghana is equidistant between Lagos, the capital of Nigeria and Abidjan, the capital of Ivory Coast.  Both are only 45 minutes away by air and over nine hours by road.  In Europe the journey to these cities which are only 300km apart would take around three hours.  I find myself regularly flying four times a week as a result.  The other surprising thing is that direct air links between these countries are a relatively new innovation, only a couple of years ago it would be quite normal to have to fly via London or Paris to travel the region safely.

Operating a company in Ghana requires a more vertically integrated approach than in Europe.  We have had to develop our own water and electricity supply, construct buildings, develop good logistics infrastructures to secure the materials we need to run the facility and train our local staff in-house.

I have been surprised by the large numbers of university graduates and the relative lack of skilled technicians.  We have found it challenging to recruit high quality skilled builders, masons, carpenters, machinists and mechanics.  There is a lack of high quality vocational training in Ghana which is holding back the industrial development of the country.  University graduates are important but only as part of an overall mix of skills in the population.

On the same theme, the Ghanaian government is very keen on encouraging local content to ensure that the oil companies operating in Ghana do not solely use expatriate labour in the oil and gas value chain. This landmark legislation aims to have 90% local participation in the oil industry within a decade. This is a very exciting initiative and as a dual British-Ghanaian national, I am interested to see how successful it is. This policy has been successful in encouraging local participation in the Nigerian oil field and Ghana hopes to emulate their success. If Ghana can use oil and gas to develop its local industrial capacity it may well meet its aim of becoming a middle income country within a decade.

If you’re wondering how you can help countries in West Africa develop, I would urge you to consider doing business in West Africa, currently most goods are exported as raw materials but there is low cost power and labour (hydro power dominates here), an English speaking and well educated workforce on the same time zone as Europe and generous corporate tax holidays. Every business established here makes a huge difference to the economy.  Oh and by the way the temperature is between 25 and 35 degrees centigrade all year round!

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Entrepreneurship – My Experience of Getting Started

Jonathan Selbie
SMF Jonathan Selbie is a Director of Swarm Systems which develops unmanned aerial systems (UAS) and autonomous systems technology for the Aerospace and Defence Industry. Jonathan’s early career was in motorsport, working in the Research and Development Departments of two Formula One team, leading development projects from concept through to end use at races. After his MBA, Jonathan helped build Swarm Systems from scratch into an established supplier to the UK Government. He has developed relationships and carried out successful collaborations with key suppliers, partners and academic institutions in the UK, Singapore and China. More recently, Jonathan is leading Swarm System’s projects to develop nano-UAS technology.

In the final year of my undergraduate Engineering studies, as part of an entrepreneurship module, I attended a lecture given by two recent engineering graduates. They had started a company after university and were now running a three year old, multi-million pound business. The stories they told of starting the company in desperate surroundings sounded almost romantic. Their do-or-die attitude allowed them to survive the early days – but only by the skin of their teeth; they relied on paying their first employees with sandwiches and finding their first customer only thanks to a serendipitous misunderstanding.

The tale of their struggles, from a worthless, bedroom-based entity to a company with plans for international expansion, filled me with excitement. Even more exciting was their plan to sell the business only four years after graduating. In talking about the sale, the numbers they bandied around suggested they could not have retired – but a first (and probably a second) home wasn’t out of the question.

As I left the lecture hall, my mind was filled with possibilities. The notion that one could earn a living, and more, by pursuing one’s own dream held some ideals and inspired me. So I decided I was going to do it. Job offers would be ignored (they weren’t that interesting anyway), caution would be hurled to the wind and I would go and work for myself. 12 years later, I finally got started.

I have often wondered why it took me so long.

The problem is that getting started is not romantic. It involves hard work and uncertainty.   When you get started working for yourself, there is no structure or framework to guide you. There is no boss to check you are on time or that your work is on target; and nobody senior to whom you can defer when things go awry. Instead, you must develop the discipline and skill to do these sorts of things for yourself. This requires commitment and sacrifice and is a marked transition from what I had been used to at school or in previous employment. Getting started also tends to be all-encompassing.  Success is often only achieved through delayed gratification; putting off holidays and buying a home or even having a family later on.

This is hard; I found it much easier to convince myself that the reason I hadn’t got started yet was because of funding problems or the idea wasn’t quite right (or even very good).  I was often able to build up the enthusiasm about a particular new piece of technology or business model – only to find that enthusiasm dampened a few weeks or months later thanks to some further analysis and a natural inclination to be sceptical (I am an engineer after all!).

I suppose the point is that getting started is, ultimately, a leap of faith that requires courage and confidence to undertake.  The popular media suggests starting a company is glamorous, highlighting personalities like Larry Page, Mark Zuckerberg and those guys who sold Instagram for a billion. But the reality of giving up the structure and relative normality of employment can be quite unglamorous.

In my case, there were two key elements to helping me take the plunge and get started launching a new venture.  The first was confidence. This was thanks in no small part to my studies for an MBA whilst at INSEAD in France. Not necessarily for the technical skills but for the opportunity to immerse myself in an entrepreneurial community. To understand on a very practical level the steps that could be taken to get started. Developing plans and ideas in this environment felt natural; help was never far away if I had problems.  As much as anything, it showed me that getting started was not rocket science.  The idea did not have to be perfect. Raising capital was possible. It was extremely reassuring to see how it was done first hand.

The second element was realising the necessity of working on a venture in a team.  Whilst operating alone enables complete autonomy, in my experience exchanging this for the opportunity to share and discuss issues and problems is a trade well worth making.  Since getting started myself, I am always amazed at how often problems that seem insurmountable can be chewed on, processed and solved by discussing with a partner or team of like-minded passionate individuals. And, for me, winning as part of a team has always been better than winning alone.

Getting started and being successful in a new venture requires confidence and tenacity as well as good fortune and stamina.  For me, it has been both stimulating and exciting. There have been setbacks and it has been important to remember to stay optimistic no matter what has gone wrong. However, I have learnt a great deal and been exposed to wild and varied situations which have been fascinating and will, I feel, be invaluable in my career going forward.

I believe the venture in which I am involved will be successful. But if it is not, I doubt I will regret much. For in the end, it is the exposure to those wild situations and the experience of those setbacks that creates the romance and glamour of getting started – and this is really what I was after in the first place.

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Marketing an Engineering Business

b9-1106 Bedfordshire Businesswoman awards held at Woburn Sculpture Gallery. Overall winner Andrea Rodney of Hone-All Precision Ltd

Andrea Rodney is a dynamic, self-taught, self-motivated businesswoman who helped Hone-All Precision in Bedfordshire to extraordinary success, part of which can be attributed to the transformation of the company’s marketing strategy. Andrea joined the company at the age of 21 and 18 years later is a director of the company. Here Andrea tells us why manufacturing businesses should not shy away from marketing themselves.

For many years, Engineering and Manufacturing has suffered from a poor image. It seems that the media insist on continuously showing images of the old guy in overalls standing at his bench with a file in his hand whose length of service was judged by the length of the fingers he had left.

But the question is: how do we help ourselves in this?
Few companies within our industry ever covet press coverage or publish press releases or case studies shouting about the technological or process advancements they’ve made, the efficiencies achieved or even something as simple as a new machine being delivered.

Even fewer have a strong corporate image with memorable company logos which create an overall brand resulting in facilities with a themed colour scheme, matching corporate work wear, uniform documentation combined with an effective website to ensure the brand is seen externally by a national or international audience.

Within smaller companies in our industry, many are owner-managed or are run by excellent engineers who have never been involved in sales and marketing activity – they know how to make the parts, but not how to play the game!

As companies, regardless of size or speciality, we need to show just what we do and how well we do it. We need to look as good as we are. And we need to let people know about it. We are always told to focus on the 4 Ps – people, place, process and product – but without the 5th P – profile – it’s irrelevant as nobody knows just how good we are.

And so as an industry, we need to look to the brands we remember and ask ourselves what made them memorable? Then we apply that to our own businesses, however small and with whatever budget we have available to us.

It costs nothing to come up with an eye catching logo, to ensure this brand continues across all levels and throughout all functions of the business; and to ensure that when the telephone is answered, it is always in the same, bright, professional, bubbly and courteous manner. It costs nothing to ensure the facilities are clean, tidy and create a great first impression. And to ask people what they thought during their visit and act upon their feedback.

For those potential customers that cannot come for a visit there may be a small investment required to ensure that you can create a website that follows the same principles as your people, place, product and processes.

Once this is in place, it costs nothing to ensure your website is listed on all the free listings pages available, of which there are hundreds. Each entry moves your site up the rankings of search engines such as Google.

Advertising within trade magazines Services & Capacity listings is usually exceedingly cost-effective – less than a few hundred pounds for the entire year. But having a consistent presence raises awareness of your company and reinforces the brand each time it is seen.

Also, once these entries are placed, the magazines are usually much happier to include press releases and case studies from you which are placed free of charge and yet again tell your story, reinforce your brand and raise confidence in the continuity of your company and the services you provide.

The press releases can then be forwarded to your customers on a regular basis keeping them informed of your successes, investments and developments. Again, this costs nothing but offers a massive boost to reinforcing your image and keeping you at the forefront of your customers’ minds.

The benefits of these simple steps are that your company – which may well be exceptionally professional – is also perceived to be so. Not just by those that know you, but more importantly, by those that don’t.

You can build a brand and a profile for the minimum of investment and simply by playing the game you can tell the world about your fantastic people, about your safe and efficient facility, about the quality of your product and the effectiveness of your processes – all through one simple profile.

The greater hope with this is if more of us get this right, the less companies there will be for the media to use in order to portray manufacturing as an antiquated, outdated industry with little technology or progression for the youth of today. We have more chance of showing CNC machinery, sharing stories of technological advancements, highlighting companies consistently investing in continuous improvement and reinforcing the fact that manufacturing is the best and safest way of balancing our economy and therefore deserves the recognition and support of everyone – the media, the Government, the country and those within it that don’t shout loudly enough about their contribution to the most exciting and innovative industry in the world.

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How the MBA Changed my Life

James Dunbar SMALL
SMF James Dunbar is an Analyst, Refining; Logistics Technology on the Future Leaders Programme at BP.

Has an MBA has changed my life? Back in 2006, I was in a Middle Eastern desert with the Royal Air Force, reviewing whether we had enough PGMs for combat operations. Here I am in 2012, looking at the capital portfolio for BP, reviewing whether we have enough PGMs for business operations.

In 6 years, I’ve gone from worrying about Precision-Guided Munitions, to Project General Managers. Anyone who has ever changed companies or industries will talk about wrestling with a new business dialect. But it’s not just the language that I needed to make this change; it’s the knowledge to lead at both a tactical and strategic level. That’s what the MBA gave me.

Commissioning into the Royal Air Force in 2002 was my first career-changing leap. The military encourages officers to accept leadership responsibility very early in their career and I thrived in these circumstances, building on engineer training to successfully deploy military aircraft to trouble spots around the world and manage projects across the Tornado fleet. Leading 110 technicians on operations, mentoring junior officers and managing discipline challenges are experiences that will stay with me forever – and not easily explained to some of my more sheltered colleagues! My RAF service also helped me complete my chartership and a second undergraduate degree (in engineering management). After a hugely enjoyable six years, I felt that my future career in the RAF would re-tread familiar roles and I wanted a new challenge.

A stint as a project manager for Bombardier Transportation helped me quickly realise how much I didn’t know about applying my experience to the commercial sector! I needed to re-orientate my leadership skills to managing in the business context – much as I had developed military knowledge for a successful career with the RAF. An MBA seemed to provide the transition I was looking for.

After a lengthy application process, I was lucky enough to get a place on the full-time MBA at London Business School. This world-leading institution reflected environments I really enjoy: highly collaborative, very academically challenging and employing a global view. Deciding to undertake an MBA is a big decision – it’s a massive investment. Winning the funding of a Sainsbury Management Fellowship, awarded through the Royal Academy of Engineering, was the decisive factor in making this second career-changing leap. I think an MBA should give you three real advantages: technical skills, commercial leadership skills, and a powerful peer network. That’s exactly what I got from LBS, taking courses as diverse as advanced corporate finance, strategy, business communication, acquisition management, negotiating; bargaining, risk analysis, and accounting.

The scholarship not only enabled me to go to business school, but also gave me access to an invaluable network of nearly 300 SMF professionals with a vast range of experience and knowledge. This network led me to several academic studies during my MBA, my first consulting contracts after graduation and continues to be a source of professional advice – as well as a great advertisement for the benefits of engineers as industry leaders.

After the MBA, I wanted to work in a global engineering-related business that actually produced something tangible, where I could use the skills to make a strategic difference, but still benefit from my experience of managing in a safety-critical environment. Whilst at LBS, I was lucky enough to attend the CBI conference, where I heard CEO Bob Dudley talk about the turnaround of BP. I had not seriously considered the energy industry before, but the values he described directly matched what I was looking for. Fortunately, the company was looking to start its Future Leaders Programme, to develop a more diverse leadership talent pool in the downstream business. They recruit externally for individuals with post-graduate qualifications, relevant professional experience, international exposure and, most importantly, leadership potential. The structured development plan also helps in getting up to speed on the breadth of different global business areas BP work in.

So here I am, working on BP’s strategic plan. I miss the camaraderie of the military, but professionally I haven’t looked back. Challenging, continual professional development has always been important to me, and without the MBA I certainly wouldn’t be enjoying the career that I am now.

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

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Guide to Entrepreneurship – Getting Started

George Fowkes Cropped
SMF George Fowkes runs The Clear Alternative, which provides interim director expertise to clean technology companies to catalyse their start-up and growth phases. George’s early career was in new product development for Cambridge technical consultancy Sagentia, and management consultancy at A.T. Kearney. Conversations with investors while raising finance for The CarbonNeutral Company in 2001 gave him the idea for a company that would bring commercial and project skills to clean tech ventures, to accelerate their development. This became The Clear Alternative in 2006.

Before I start I wanted to add to Chirag’s post by nominating David Hansson, the founder of software company 37Signals, as the international grandmaster of ‘CARD’. And in fact most things about getting a business started. I think he has written a book but his speech at Stanford boils his whole philosophy down into one irreverent hour that you can laugh along to on your way to work.

If I had to summarise the very best of what I’ve seen in the past 12 years of getting ventures started for people, it would be the following:


Find a complementary partner
Most people think that the expression ‘better to own a share of something than 100% of nothing’ came about from raising money. That may be true, but it’s even more relevant right at the beginning. To get any new organisation started is such a huge amount of work, requiring so many judgement calls and such a very wide range of skills, that even an engineer with an MBA cannot do it on their own. You can’t be world class at everything, and it’s lonely flying completely solo.

If I think of the half dozen really successful serial entrepreneurs that I’ve met – the people who have built and successfully sold more than one business – almost without exception they work with a business partner. That partner doesn’t just fill a skills gap with their co-entrepreneur, they also fill what I’ll call a ‘character gap’, as follows.
Everyone has a number of aspects of the business that they can’t help preferring. It could be sales. Or the numbers. Or building the team. It’s very difficult indeed for an individual not to give these preference – it’s part of their character – so stuff gets missed. The partner has an innate preference for different aspects of the organisation. Their first thought on Monday morning is quite different to their co-partner. And so most of the bases get covered. That’s why you see sales people paired up in business with accountants, marketeers with ops people, Myers-Briggs introverts with extroverts, and so on.

So my point would be to find someone who’s quite different to you that you can trust implicitly and make them a significant partner in the business. And even (especially) if you’re married to them, sign an agreement that at least covers what happens if things don’t work out.

Touch the market early and often
With the very rare exception that essentially comes down to luck, it is not possible to bring a successful new product or service to market without first exposing it to the target market. To compete against better-resourced incumbents your product or service has to not just work, but fit the way its users look for, assess, buy and use the thing.

For the product itself we need to bring the alpha and beta-test principle common in software development to our own business idea. How to do this depends largely on the nature of the product, but everybody should be able to find their own versions of customer and competitor interviews, pitching the concept to friendly contacts in the target market prior to development, lending prototypes to prospective customers, offering ‘no-regrets’ deals for early buyers and so on, as the feedback from this user experience is essential. The next proof point is the one where customers actually part with their cash for the product. Hansson is right that this cannot come too soon and, in general, almost any way to bring early revenue into the business (that does not distract from the main development effort) is a good idea.

Closely linked to this, especially in B2B markets, is that your product can only be successful in the context of the buying patterns in the target market. Every market has its idiosyncratic way in which solutions are sought and evaluated, buying decisions made, price and delivery negotiated. And if you’re not compatible with the time of year, use of OJEU, ‘Plan A’, Environment Agency regs, contract management or other trivial necessity you won’t sell any product to that sector. The least costly way to master an industry’s buying patterns that I have seen is to get an industry veteran on the board.

Have a plan
It is true that no plan survives first contact with the enemy, but keeping a plan (i.e. a list of milestones/targets and dates, with associated responsibilities and costs) updated on a regular basis confers many benefits. First, putting the plan together forces you to think about priorities and risk. What’s got to go right, and cheap ways to stop things going wrong. Second, it’s a fantastic communication tool. With a plan everyone can see where the effort has to go. Scope creep – possible the worst enemy of the pre-revenue business – is easier to keep at bay. And finally, it enforces realism. Not all milestones will be met. The insights from ‘why not’ and ‘by how much’ make achieving future targets more likely. And achieving targets is an essential skill to keep investors putting money into a business. So put together a plan and keep it with you. If you have to keep changing it, at least you’re learning!

None of this covers seed funding, getting an office, or marketing, recruiting and financing on the cheap, which will have to wait for another day. Or be picked up by another blogger.

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Guide to Entrepreneurship – The Idea!

Chirag Shah (1)
Sainsbury Management Fellow, Chirag Shah, is a serial entrepreneur.  A Londoner born and bred from a family of medical doctors, he studied Engineering at the University of Cambridge. He completed his Engineering apprenticeship at Rover Cars where he worked as a Production Manager before gaining a scholarship through the Sainsbury’s Management Fellows to pursue an MBA at INSEAD Business School in France. Following a short spell in management consulting, he started his first business at the age of 28. His entrepreneurial ventures include Trading Partners (a business services company), écurie25 (the largest chain of Supercar Clubs in the world), MarketMaker4 (an internet software company), and Assassin Live (an iPhone application game). He is also active as an angel investor.

Most people think the biggest obstacle to getting started with a new business is coming up with a really great idea. But this generally isn’t the case. Ideas are all around us and mostly come from finding solutions to our problems.
Unless your name is Jesus and you can simply perform miracles whenever you hit a problem, we generally tend to address problems by tolerating them or avoiding them. The key to successful entrepreneurship lies here. Instead of living with your frustrations, take the extra few seconds to challenge the issue and explore how you might solve the problem. The answer could be your business idea!

In my experience, the much more challenging aspect to getting started is turning the idea into a viable business proposition. To illustrate, I’m going to use as an example my 19 year-old cousin – who has half a dozen more new ideas every time I see him. He’ll be a great entrepreneur one day but first he needs to overcome what I call the “CARD-test”. In order for an idea to become a successful business it needs to be Commercial, Aligned with resources, Relevant (to you) and Defensible.

An idea my cousin had when we were 15 was the concept of having a rotating sunlounger. Just like a sunflower, the lounger would turn slowly during the day saving the users from having to get up and move the lounger themselves.

Commercial
Applying the “Commercial” test, the key question is: “can you make money from the idea?” If one manufactured the product, would there be enough sales to offset the manufacturing and distribution costs and still leave some profit leftover? In the case of the rotating sunbed, I’m not sure ‘enough’ users would pay the necessary sum to avoid getting up and turning the lounger themselves.

Aligned with resources
Another idea he had was to build a field of solar panels and sell the electricity, whilst growing some vegetables in the shade. In the right circumstances this idea can meet the Commerciality clause, and indeed there are such implementations around the world.

Alas, for my poor cousin, he does not have enough money to implement this idea nor could he hope to raise sufficient funds from other people given his lack of previous experience as a farmer or energy consultant or similar. So for my cousin, this idea falls down because it is not ‘aligned’ with his level of resources. [A particular frustration of mine, and a reason why I think the green energy movement fails to reach breakthrough levels of adoption is that so many innovative projects very quickly require significant levels of capital to bring them to market and hence remain the remit of larger institutional sources which are inherently more risk averse than your average entrepreneur. Compare this with the Internet revolution where the cost of starting a business is very small and new business concepts dominate.]

Relevant (to you)
As a general rule of thumb I tend to advise budding entrepreneurs to focus on businesses that they actually know something about – by way of their prior work experience, or background, or specialist product knowledge, etc. From the businesses I have seen people starting up around me, I would say your chances of success are less than 20% if you know nothing about a particular product or market, and probably closer to 80% if you have worked in that sector, already have relationships with potential customers, and are familiar with your competition. If you have a great idea in a sector you know nothing about, then getting a job in that sector is a great way to start.

Defensible
Defensibility, or Barriers to Entry as the academics would call it, refers to how difficult or easy it is for others to copy what you are doing. Patenting or copyrighting an idea is an important consideration but don’t assume that just because an idea is patented it cannot be replicated or if an idea cannot be protected that others will definitely copy it. In any case I mention this criterion with lower priority than the others because a business lacking defensibility is not necessarily doomed to fail.

As you will see in later posts, how well and how quickly you execute your idea can play a much larger part towards its success and having imitators can even be a good thing. There are benefits to competition in terms of growing the size of a market that can outweigh the downsides of competing for business. For example, one of my own companies, écurie25 Supercar Clubs, is the global market leader for enthusiasts wishing to share the costs of owning a Ferrari but I actually wish we had more competitors because the sector would grow from the resulting greater awareness of such clubs. And I would rather have a smaller market share of a larger sector than a large share of a niche market.
Now that you have your idea in-hand and you’ve vetted it with the CARD Test, it is time to get started. In my next post, I’ll give you some tips for making sure you de-risk your venture as much as possible before you commit too much.

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How the MBA Changed my Life

David-Falzani-President-SMF-MCP_3834-(landscape)
David Falzani
President Sainsbury Management Fellows

CEO of a consulting company Polaris Associates, David has extensive executive and strategic business development experience in various industries. David began his consultancy career with LEK Consulting which recruited him from the prestigious Wharton School in Pennsylvania.

David has worked with a wide variety of clients including IBM, British Bakeries, Kingfisher, BAE Systems, Marks & Spencer, Sainsbury’s, 3i and Cooperative Bank. Additionally, David is a Visiting Professor at Nottingham University Business School.

Let me start by saying that in my opinion an MBA is a beginning, not a destination in its own right. No MBA can hope to make you any kind of expert in one or even two years in as fluid and nebulous a field as business. It does however offer a good introduction.

In starting my MBA I think I had a well-researched set of objectives and intentions. I already knew that a top MBA would double my salary. I knew I would receive a useful network of contacts, a toolbox of functional business skills and have a call upon the school’s all important brand name to supplement my own.

What did surprise me was the extensive rewiring of my brain that seems to have been an unintended but virtuous side effect of the crucible of learning environment. To illustrate this point, my first job after my MBA was a role with a leading strategy consulting house (yes I know, you may well call it “falling into the management consultancy trap”, but I call it a good place to consolidate new skills).

These firms are quite notorious in the hours they can require you to spend. The economy was booming and it was busy: I averaged some 70 hours per week in my first year. But my point is that I recall this seeming like a bit of a holiday compared to the MBA.

The MBA really was an expansion process that, yes, increased my understanding of how business works, but it also quietly stretched my brain into something new and improved. It was also one of the most rewarding periods of my life in all kinds of ways.

Spending 40, 50, 60 hours a week with the same group of people involved forming friendships and relationships that were quite different to the norm, and remain priceless. Also, the richness of the environment was astounding. Imagine being surrounded by world class faculty, interesting intelligent colleagues, being set continually stretching challenges; a learning machine wrapped all around you to whet your appetite and then satisfy it, and an addictive growing sense that anything was possible. If I could have stayed on for another year on my MBA, I would have jumped at the chance.

Post MBA, the fun continued. The opportunity to launch a start up business came via my classmates.  The confidence to raise venture capital funds came from the MBA. We may have missed the IPO window with that venture but the lessons learned were incorporated into the framework set down during the MBA. The next role was more demanding: a tech turnaround. The next: a service business. And so the fun continues today.

Fast forwarding a few years, I still marvel at how those lessons gave me an ability to immediately understand the larger business picture, and the sense of confidence that such insight brings.

That MBA was a set of starting blocks (if we’d made that IPO I would have said launch pad!) for a learning journey that continues to intrigue and challenge, and there’s no sign of it getting boring or processional any time soon.

In answering how the MBA changed my life, I should also ask myself what would the last 15 years have been like if I hadn’t done the MBA. Would I have been more successful? I honestly don’t know. After all, the vast majority of the world’s leading entrepreneurs and business persons don’t have an MBA, and many haven’t attended any university, let alone business school.

Would I be better informed? I think it’s unlikely. As I say, as an introduction to business a good MBA is hard to beat.  But would I have had more fun? I seriously doubt it.