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What are the challenges of IoT?

various smart devices and mesh network, internet of things, wireless sensor network, abstract image visual

Professionals, particularly engineers, are enthusiastic about the promise of the Internet of Things (IoT).  Everybody talked about it when it wasn’t quite here. Now that it’s here, it’s growing exponentially.

Gartner predicted last 2014 that there would be 25 billion devices integrated into the IoT.  Cisco says figures would be near 50 billion. Morgan Stanley believes it will reach around 75 billion.

This growth will get closer to reality as devices become smaller and sleeker and computing grows more powerful and becomes more streamlined.

The IoT is simply the interconnectivity of devices through the Internet.  Great innovation at first sight, but it is not without consequences.

The connectivity that drives IoT is the same that could also cause dire consequences.   For example, there have been reports of hacking of baby monitors and Wired ran a feature on the simulation of hackers taking over control of a jeep on the highway.   Even power interruptions can cause serious problems.

Compatibility
As of now, there’s still no international standard for compatibility in IoT, particularly for tagging and monitoring devices. Of all challenges, this is the one that can be most easily solved. Companies just have to agree on a standard, which already happens in different products and services. The IoT won’t be any different.

Though standardisation is an easy matter to solve, technical issues will still exist.  Even today, Bluetooth, a relatively old way of connecting, still has compatibility problems. Issues about compatibility can lead to customers buying from one company only, developing monopolies that can hurt the industry.

Complexity
Complex systems offer more chances of failure. The Internet of Things can offer massive amounts of these chances.

An example of this failure is double purchasing. Let’s say a couple receives the same note from their refrigerator saying that they need to buy a loaf of bread.  There’s a chance that they both buy one, leading to the purchase of two loaves instead of just one.

Software bugs can also send notes to an owner telling him to buy a new light bulb even when he just bought a new one.

The complexity of the IoT also gives way to more intensive management and maintenance.  How will IoT companies make sure that billions of these devices are online and running? Can takeovers and interruptions be easily handled through billions of connections? Will the IoT require every device to be registered or will it only require a certain identified ‘residence’ to represent all devices within?

IoT will also handle massively growing amounts of data.  How will companies make sure that they deliver the expected results and withstand a growing workload at the same time?  How will consumers know if their devices are able to handle intense data flow?

Privacy and security
Since the IoT is founded on transmitted data, the risk of privacy breaches gets bigger.  We are still not sure of how good data encryption will be.  Sensitive information like medical prescriptions and financial status are exposed to bigger risk.

Extra security may demand higher prices, which will either attract only a few customers or none at all.

Looking at the bigger picture, we also do not know who will be controlling the IoT.   One company controlling it can lead to a monopoly that will do consumers and other competitors no good. Multiple companies handling the system can expose private customer information to many groups, which will compromise the close relationship of the customer to a specific company he adheres to.

The fact that personal data will be exposed to the Internet once IoT gets implemented will render any consumer vulnerable to hacking, fraud, identity theft, and other crimes involving sensitive information.

The government itself, which is supposed to be the most secure entity in any state, can easily be hacked by hacker groups.  The group Anonymous has already done this to the US government.

Personal safety
What if a hacker changes your preferences for medicine, food, and other products?  Once your data is breached, this can happen.  In the IoT, consumer safety depends on how good the system can verify real information that passes through automated processes.

The IoT is constantly growing, and even at its early stage, the whole system, as well as the dangers it faces, are already overwhelming. Data breach can affect huge sectors of the system like a disease.

At the very least, we need to easily spot where problems originate in the system.  Monitoring must be optimum so Big Data tools must be able to alert authorities when security incidents happen.  Threats must be taken care of in real time with little to no delays.  As of now, we need to know what these systems would look like and how companies can make these systems real.

Mass unemployment of unskilled labour
The demand for unskilled workers will plummet to the point of irrelevance as automation will prove itself to be more efficient.  This always happens whenever technology takes a leap and will require humans to level up its education.

This phenomenon can cause social chaos and maybe a change in how people see technology, as technology is supposed to make life easier for people, not harder.  Unemployment will also decrease consumption, which will be bad for a growing IoT industry because any new industry will need a growing market.

Since human involvement in the delivery of products and services will be minimised, the consumer expectations will increase too. Failure to meet expectations may add fuel to an already spreading fire caused by unemployment.

Over reliance on technology
It is almost certain that IoT will make humans a lot more dependent on technology to the point that it will take control of our own lives. As of now, young generations are already attached and addicted to technology for every aspect of their lives.  Do-it-yourself is now do-it-with-gadgets.

Today, information is easily searchable through Google.  People who can help you can easily be reached through social networking sites. False news can easily be spread and disproved using search engines. Writing turned into typing and typing turned into taking pictures of texts.

Society must determine how much technology must run human life.

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Integrating Teams Post Acquisition for Perfect Harmony – David Falzani

SONY DSC

Managing your people and making sure it works
You’ve been through a successful acquisition or merger. All the legal proceedings and necessary preparation that needed to take place have been done successfully. But this is only the beginning of a long and important process of integration. A lot of post-M&As are mismanaged  and result in poor outcomes.

Too much can often take place too quickly, leading to an erosion of previous internal cultures, a loss of staff, and a dangerous loss of profitability. After the acquisition, it is the task of management to ensure that the new, combined teams are able to build a shared vision of where the firm is going. It’s time to build a new internal culture forged through cooperation and consensus.

Start while you’re ahead
The most important foundations of post-M&A integration are established during pre-deal negotiations. Setting targets for integration should be considered as much of a priority as the process of establishing key benefits and risks from the deal itself and, indeed, should be based on this evidence and analysis. That’s why it’s vital to assess the internal structure, values and culture of the other party before the deal is done, and vice versa; due diligence is key.

One way this can be achieved is through the use of a clean team. This is an independent group of individuals bound by strict confidentiality agreements who gather the necessary data for integration, which usually lies out of the reach of an acquirer’s employees pre-deal.

To enable comprehensive integration planning, many organisations have begun using clean teams to gather information, analyse scenarios, and make preliminary integration decisions prior to deal consummation.

These clean teams operate under strict protocols that enable competitive or confidential information to be aggregated and summarised in a form that helps leadership review the analysis about the future combined organisation without violating competition laws – Aon Hewitt.

Have meetings with the other party involved in the merger or acquisition and work together to collate your findings and establish the sources of risk and possible friction. Establish an integration plan together, structured around core values, will save your company a lot of pain in the long run.

Making the hard decisions manageable
A merger or acquisition can be a stressful time for everyone, but especially employees. A particular source of employees’ anxiety stems from concerns about job security. Employees and line managers alike are unsure if there is going to be a place for them after the deal. Everyone knows there could be difficult decisions ahead, and that some staff may become surplus to requirement as the new business is forged.

If not well managed, the post-acquisition/merger stage can be messy and cause grief for those taking redundancy (voluntary or compulsory) and the managers who have to implement the programme. Losing a job can trigger a lot of personal issues that can damage employees’ well-being, resulting in loss of self-worth, feelings of betrayal, and a loss of identity. It’s important to handle these situations properly – negative effects and perceptions don’t impact on outgoing staff and those staying with the company. Creating negative perceptions of management ethos will make it hard to win ‘hearts and minds’ and to take the business forward.

Managing properly not only means treating people with dignity, but providing concrete support, for example, offering outgoing employees resources and support to help them transition to another job or career. There are many outplacement and career transition services available. It’s good practice to organise such services as part of a redundancy package, or to allocate individuals funds to enable them to choose an outplacement agency themselves.

Building a new shared culture
Having identified and planned your post-acquisition or merger integration, it’s time to implement it. The problem with many integration plans is that management can fall into the trap of coming in and saying to the new team, “this is how things are going to work.” Communicating a vision is important, but workplace cultures tend to develop organically; they can’t be manufactured.

If you’ve already established what sort of culture will benefit the integrated company, it’s time to start incentivising the sort of behaviours you want to emerge, particularly for line managers. This can be achieved by getting the staff engaged in the vision for the company, involving them in decisions, listening to ideas as well as providing attractive reward and recognition schemes. As well as this, you’ll hopefully have identified key time frames for achieving your integration plan fully – 100 days is a popular and effective starting time scale. A cohesive strategy covering planning, communication, action and co-operation is the name of the game.

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Preparing the Business for Sale

smf

In previous blogs, I’ve discussed how you can prepare to leave a business you’ve built using various exit strategies and preparation methods, such as appointing a corporate finance advisory; stabilising finances over a period of five years; and setting personal objectives for the future. Continuing this theme, then, I want to get down to brass tacks regarding the actual sale preparation by focusing on three key themes: selling the future, balancing negotiations, and knowing your buyer. Hopefully, this help to build up a better picture of what needs to be done by the seller in the ‘legal’ stages of selling a business.

Sell the future, not just the past
You might have heard that when selling your business, it’s important to provide a detailed five year financial history (including audited financial statements) to potential buyers. This isn’t wrong, and a lot of preparation activities take place in light of this; you must stabilise profitability over five years, you should hire a corporate finance advisory with the final sale, etc. It may feel slightly underwhelming, as if you are only building the company for its retrospective value at the point of sale.

However, you aren’t just selling the past.  Buyers see businesses as valuable because of what their pasts signify about their potential futures. It might feel demoralising to be building a stronger company for different future owners, but, actually, you will reap the benefits as well, because a bright future is obviously much more marketable.

That’s why, alongside a detailed financial history, it’s vital to establish a two to three year sales forecast for your company. Gilmore Lewis suggests the most accurate forecasts utilise an array of data from multiple sources, not just data from a financial history. These sources frequently include: the business’ current sales pipeline; its historic run rate; its field forecast; and sales management discretion. The aim is to build up as accurate a forecast as possible based on past data in order to establish a marketable future for the company. That’s why he suggests:

“Accuracy of forecasts can be measured by providing actual results side by side with previous time period forecasts. This can provide a level of visibility into the accuracy of the forecast as well as the individual contributors.” For more information on developing accurate forecasts, read Gilmore Lewis’ excellent article How to Develop an Effective Sales Forecast.

So, to return to preparing the business for sale, it’s good practice to develop regular quarterly or annual forecasts for the business, and this is hopefully something your company has already been doing. This allows you to judge the accuracy of past forecasts by comparing them with the actual financial history of outcomes. Now, fast-forward to the sale itself.  This information will ultimately strengthen your negotiating position, as you are now able to present not just a financial history and a forecast for the future, but also evidence to verify just how accurate your forecasting methodology is. Working with the future in mind in your medium-term sales prep will therefore make your short term preparation much easier – in fact, stronger.

Integrative negotiation
This brings us to the issue of negotiation, as forecasts and financial histories are ultimately what will support your negotiating position with any potential buyers. Negotiating tactics are frequently presented in popular media as almost back-handed or otherwise ‘hard and fast’ ‘moves’ aimed at more or less manipulating the other party into accepting your position.

However, I want to dispel this myth, as negotiating is rarely this simple – plus, sticking to such methods can seriously damage not only your professional relationship with a potential buyer, but your negotiating position itself. For example, saying something is “non-negotiable” is more likely to scare a buyer off than convince them of your terms. The end goal of a negotiation is, ultimately, to maximise outcomes for both parties involved. Although a negotiation may only confront you from one angle, the other party is seeking to benefit from buying the business just as much as you are seeking to benefit from its sale. Therefore, a little empathy with the other’s position (their angles, goals, and value) can go a long way. You want to aim for a deal that will benefit the other party as well as your own – a negotiation should not be seen as adversarial.

This raises two important issues that you should focus on in the early stages of integrative negotiation.

Reservation point
First, you need to have a clear position on what your objectives are within the sale. This will includes personal profit or recompense of some kind, but also things like the speed of transition between owners (eg for the benefit of employees and managers who will stay on afterwards) and various legal or contractual terms.  It is especially your terms – rather than price – which can come to make or break a negotiation.  It is here that you firmly establish a reservation point, or limits of your party’s terms beyond which you will not go.   Between your reservation point and theirs lies the space in which negotiation and bargaining takes place.

You can think of your reservation point as your “walk-away” point – the stage at which you know a buyer will not meet your terms or needs. This isn’t something you want to use as a ‘threat’, but you need to demonstrate that you are prepared to walk away if necessary. From here, you can properly negotiate and deploy tactics such as ‘expanding the pie’ – giving away small losses that the other party will receive as a boon, in order to make your terms more appealing to theirs (read more on the MIT site about these terms here).

Full information
Second, as we’ve already discussed, you need to provide any potential buyer with complete and transparent information about:

  • what it is you seek to gain from the sale, and
  • the specifics of the business’ financial history, statements, and projections

Knowing your buyer
The flipside of this is knowing your buyer. You should establish profiles of their histories and angles (whether the buyers are a group or individual); you want to try and build up as clear a picture of the other party as possible in order to understand their terms and where they will (or won’t) accommodate yours. This puts you on stronger ground when laying down your terms and negotiating the details.

Although the negotiation process can be hard, it should take place within a collaborative environment to include both your own team as well as the potential buying party. It’s worth considering adding an intermediary or business broker to your team, which might already include a corporate finance advisor and a legal team.  Their role is to support you by facilitating the sale; by helping to build your selling package; and by maintaining a well-researched awareness of potential buyers. They can also help with the legal aspect of negotiations, having the ability to draw up confidentiality agreements and being involved in due diligence.

By preparing your business for sale in a way that is transparent, collaborative, and forward-looking, you will already be well on the way to getting the best deal possible out of a future sale. Although an intermediary can help a smooth business sale in myriad ways, it is ultimately down to you as the head of the business to pull the whole thing off.

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What is the Role of an NED?

Boardroom table for NED Blog July 2014

You’ve decided that the next step in your career is to become a non-executive director (NED). With the right experience and credentials, you might well be ready to take on the role, on paper, at least. but how do you get started? Here are some key steps in your journey towards becoming an NED.

Defining the Role of the Non-Executive Director:

Strategy: Non-executive directors should constructively challenge and contribute to the development of strategy.

Performance: Non-executive directors should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance.

Risk: Non-executive directors should satisfy themselves that financial information is accurate and that financial controls and systems of risk management are robust and defensible.

People: Non-executive directors are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing, and where necessary removing, senior management and in succession planning.
© The Higgs Report

The picture of an NED painted by the table above is of an outsider to a company with specific qualities and expertise. Indeed, NEDs are often referred to as executive management’s ‘critical friend’: uninvolved in the day-to-day of the business, they are able to look at strategy and executive performance with a more objective and critical ‘eye’ than an inside director. This is why many NEDs will hold several directorships with different companies as part of a portfolio career – they are able to bring their varied experiences to other companies and provide outsider expertise.

Building the Right Profile: Whether you want to get on board with a ‘blue chip’ company or a bright new start-up, you’re going to need long-term executive experience, preferably in a number of sectors. What companies are looking for in NEDs are experienced all-rounders with industry-specific skills. You will need to prove your adaptability as well as your independent experience. Companies will not hire you if you have limited experience at an executive level so gaining an NED role is unlikely to be achieved overnight.

An excellent way of building the right profile for becoming an NED is to take a non-remunerated NED role whilst continuing your executive work. A good example of this would be becoming a school governor, who has roughly the same role as a NED – particularly in academy schools. Other examples include becoming a trustee on an NHS board or a charity. What you really need to do is demonstrate your versatile profile, particularly as part of a portfolio career, and get that first NED position even if it is not remunerated. Varied experience is the only way of achieving that.

Getting the Right Contacts: Networking is vital to gaining an NED opportunity, as many companies will go directly to head-hunters to look for NEDs. Ideally, you should build a balanced network of executive and non-executive contacts in your industry, particularly with an eye on head-hunters as the ‘holy grail’ of contacts. Try networking with experienced NEDs who can give you the advice and connections necessary to bring you closer to becoming a NED.

Changing Lifestyle: As you build your portfolio career, you’ll quickly realise some drastic lifestyle changes might be in order. You might be balancing NED-ships in several different sectors, perhaps even whilst continuing executive work in your main industry. You have to be prepared to reshuffle the way you organise your working week and in order to keep each plate spinning, so to speak. The NED role might only call for two days work a month on paper, but be prepared to be flexible as that can change quickly. You need to dedicate time not just to get the job done, but to get it done well.

Choosing Sectors: Once you’ve taken on a few NED roles, you’ll begin to have more flexibility and choice with future roles. You can start looking at directorships in new sectors, ones that don’t necessarily match up directly with your industry background or experience but have strong parallels. This is a big step in building a successful portfolio career as it will help you continue to be that ‘critical friend’ and independent director.

Your Value as a NED: Bernard Buckley, an executive coach, who ran the event, Achieving Your Next NED Role – Are You Ready? for our Fellows, said: “NEDs bring independent, objective perspectives to the business, identify new opportunities, share ideas and may even draw attention to issues that may not be self-evident to people immersed in the daily business. In addition, they may introduce to the company new key contacts and networks of people who can help to drive the business forward. In return the NED has an excellent opportunity to work with and learn from experienced board directors in complementary or different fields to their full time job. This helps personal and professional development and adds value to their employer who gets the benefit of their new experience and skills.”

The Path to Becoming an NED: Securing a NED position requires full commitment. All good career progression takes preparation, drive, tenacity and a positive attitude to secure a position. Becoming a NED is no different.

Helpful Information Sources
The Non-Executive Directors Association: Dedicated to meeting the training and personal development needs of NEDs.

Financial Times Non Executive Directors Club: A growing community of non-executive directors. Whether you are looking for your first non-executive job or already have a portfolio of non-executive roles, the Club is the number one destination for networking, resources and the latest vacancies.

Institute of Directors and Chartered Institute of Personnel Development: These organisations provide information and advice on becoming an NED.

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Are Leaders Born or Bred?

Are Leaders Born or Bred Fish Stock_000015329479Large

Whether leaders are born or made is a question that has fascinated political, economic and business minds for centuries. Traditionally, leaders were considered to be born possessing the innate skills necessary to successfully lead others.

Since then, our mode of thinking has come a long way. It’s important to remember that leadership is not always formally hierarchical, and leaders often emerge even if they do not have the title of manager or director – a leader may be someone taking the helm on a project with colleagues.  Leadership involves a certain level of innate ability, such as vision, charisma and interpersonal skills, but it also involves hard work to acquire the technical skills and knowledge needed to succeed within any given industry.

You only have to look at the business world to see that the best leaders successfully maintain this fine balance. We all know the radical success stories – self-made leaders of industry such as James Dyson and Richard Branson who started from nothing and built successful empires through a combination of their innate skills set, vision and hard work. But there is a vast number of largely untold stories of successful business leaders who have come to dominate in their chosen fields by using their combined technical and interpersonal skills to lead teams that excel.

Interpersonal skills
The power of interpersonal skills cannot be understated.  Take the example of Steve Carell’s Michael Scott character in The Office. Scott is said to have received many awards during his time as a salesman, and it is made clear throughout the series that he is a very skilled salesman with in-depth knowledge of the market he is working within. But in his role as manager he is utterly inept, committing all sorts of social faux pas and constantly alienating his staff.  Despite all his skill as a salesman, he lacks interpersonal skills; he is a poor leader.

What we can learn from this is that no amount of business acumen and textbook management theory is ever going to be useful if you cannot develop strong interpersonal skills and adapt your management style to get the best out of individual members of the team.  Remember that in management, getting to grips with the financial side of the business is only a small aspect of your job as a leader. It is people you are managing, not products.

You need to earn respect, which means being a good listener, and letting your employees know that they are being heard whilst also giving them all the information they need to do a good job.  You need to inspire your team and build strong, professional relationships without condescension or over familiarity.  You need not only to get your objectives and requirements across to your colleagues, but also have them accepted as legitimate.  This involves forming and sharing a coherent vision of where you want the business to be in the future – something that can only be achieved with mutual respect and genuine collaboration.

Learn from Others
Strong interpersonal skills can be developed in part by paying close attention to what you and others observe about other leaders. You can learn from others, good and bad, from studying other employees and leaders.

This does not mean merely copying all of the ideas, behaviours and attitudes of other leaders.  It means to critically observe what it is that makes them good at what they do, cherry-picking the best ideas and putting them into practice in a way that is unique to you. One way leaders have traditionally gone about developing is through mentoring [link to mentoring infographic], which provides invaluable lessons and insights from senior people who are leading successful businesses.

There are also thousands of books on leadership, ranging from Sun Tzu’s The Art of War to Kouzes et al’s The Truth about Leadership. It’s worth reading widely: don’t just restrict yourself to the business section of the bookstore.  Books alone of course, can not provide you everything you need, but by mixing different sources of learning, your leadership skills and knowledge will grow.

Awareness
Ultimately, your ability to learn leadership skills boils down to your level of self-awareness. You need to have a clear, objective idea of how you are perceived based on the attitudes and responses of your colleagues and staff.  This not only involves listening, but also explicitly asking for feedback from those around you and taking a step back from your own involvement in something to see your place in the bigger picture.  If you know the business and learn the social skills of a leader for yourself, you may be on your way to developing yourself into a great leader.

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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.

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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.