The Numbers Count – How to Spot a Great CFO

Sooner or later as the founder or leader of any entrepreneurial business you are going to need to hire a CFO.  Whether you hire full-time or part-time help, the necessary skills of a chief financial officer are not to be confused with the book keepers you have probably retained to keep tabs on the numbers early in your businesses growth or even the finance manager you may currently employ.

These are not in any way `bean counters` to be tolerated, they are strategic hires and getting the right one can be a make or break decision if you want to succeed in the long term.  So it’s worth thinking early on about the eventuality of hiring a decent CFO.  

Amazing creativity

If you are founder of a successful business you’ll have got pretty used to keeping a tight eye on the numbers from the start. But the best CFOs I’ve worked with never cease to amaze me in their creative ability to seemingly glance at set of company accounts, read them like a book, instantly spotting the key issues, in a strategic context, and describing them in plain English.

The ability to perform laser-guided reading of spreadsheets is usually a good indicator of a person you want to hire.  Particularly if they can show that they can use this information and combine it with experience to predict potential challenges in the future, advising on the potential financial approaches that will smooth the way forward for your firm.

Crystal balls

This is vitally important for entrepreneurial businesses where the rate of change is so fast and where you and other leaders are consumed by operational issues - from hitting the sales targets to getting the right people on board.  So don’t expect your CFO to have a crystal ball, but do expect them to have an uncanny ability to tell you what’s likely to happen next in your business, or at least have a reassuring grip of financial cause and effect and which fiscal levers to pull to push the company in particular direction.

In addition to making a major contribution to running the business on a day-to-day basis, having the right person in the role is also key in maximising the value of your operation. So in hiring a CFO you need to think not just in terms of their contribution in financial planning, management and governance but also about their role in looking  for the right investment, acquisitions or when, eventually, planning an exit. This means they’ll need to be able to do a pretty decent poker face as they will be key to some of your most important negotiations.

Suited and booted

Of course, the informal environment of most entrepreneurial businesses may have your CFO wedded to their jeans but they also have to be capable of facing externally towards the more conservative elements of the business community.  So they need to be someone who doesn’t baulk at getting suited and booted when it comes to meeting with auditors, banks, investors and, eventually, the City and who doesn’t look like they are being strangled by their tie.

You certainly don’t need a CFO who is a shrinking violet.  They need to be robust and not afraid to challenge any of their colleagues to a reality check. To that extent, your CFO should be the board voice of unequivocal, numbers-backed reason about what can really be achieved with what resources and in what timescale. 

Naturally, for me, one of the things that come to my mind in differentiating an excellent CFO from a merely good one is their communication skills.  It’s a sweeping but, I think, fair generalisation to say that those that are logical and good with figures are often not the most articulate in the room; just as those who are literate and can tell a good story often find it hard to add up.

Effective communication

But a CFO worth their salt needs to be able to assemble and pick out the key elements of budgets, forecasts and accounts and communicate them effectively not just to other leaders in the business but to the company as a whole.  There is nothing worse that the staff meeting where the assembled throng sit in dread of the earnest `numbers presentation` delivered in a way that leaves no one in the audience any the wiser nor clearer about what it’s supposed to mean for their role. Or that sends them to sleep.

This is important not just for tactical reasons but to ensure that the whole company thinks constantly and consistently in terms of the key numbers and their contribution to achieving them. In the same way as the best CTOs can highlight what is important and explain it in acronym-free and accessible language, CFOs have to bring spreadsheets to life.

Powerful and inspiring

So, as well as being in charge of the numbers, CFOs need to be business leaders in their own right and be part of a powerful and inspiring team. They will need to be able drive the finance team, but they also need to approachable and be capable of explaining that numbers exist in context. So a CFO must be able to visibly connect the work of finance to all aspects of day-to-day operations and demonstrate business smarts in doing so.  And that means being engaged in the whole of the business and its people. Being comfortable with managing by walking about is a skill all CFOs should master.

Problem solvers not problem creators

In this respect I’ve found it useful to rotate internal services teams, particularly finance and HR, around the business. If they sit with other operational groups for extended periods they build relationships outside of their immediate team and become intimate with all aspects of the business, being seen as problem solvers not problem creators.

Over the years I’ve worked with some CFOs who have been genuinely fascinated by all aspects of the business and its people.  This, in itself, is delightful but it was also vital to them not being seen as the head of the numbers ghetto as much as it was valuable in gaining an all-important real-time perspective on what made the company tick. And it’s that passion to understand everything about the business that ultimately marks out the leading CFOs from the also-rans.

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One, Two - That’s Creativity for You

One of things I like about the precious two weeks most of us reserve for our summer holiday it that it gives me some time to be alone.

Being no diva-esque Greta Garbo in my search for solitude, I do this best by climbing up and down Greek mountains on a bicycle or by being out in the Mediterranean hanging off a catamaran.  Occasionally, it’s just lying about catching up on a few books for which my normally frenetic schedule and atomised time doesn’t allow.

The myth of the lone genius

In between the sweaty and scary moments that some of these pastimes provide, solitude, whether physical or mental, gives me time to think.  It helps develop some perspective, and come up with new approaches to problems and ways to develop businesses or people.

The reality, though, is that many of the better ideas I’ve been associated with and, certainly their implementation, have ultimately been group efforts. But the best have been a result of a series of partnership with people with complementary skills and personalities I’ve enjoyed over the decades.

This may be one reason why I don’t hold with the cultural concept of the` lone genius` whether they be Edison, Einstein and Faraday or Jobs, Zuckerberg and Welch.  Many are extremely driven and have ruthlessly planned self-deification convinced of their own uniqueness, others had it thrust upon them by outside interests.

Attractive though the idea of the entrepreneurial hero may be, I’ve long held the view that alongside the most effective CEOs is a great COO; that the most successful start-ups combine at least a sales and technical skills leader from the outset whilst great communications campaigns come out of pairings of the visually and verbally literate. The need to sustain and evolve creativity is why even the most successful artists have muses.

Creativity is a social process

To be clear, I’m certain, then, that creativity of all sorts is the key to consistently generating innovation and is the social process which underpins successful entrepreneurial leadership.  This issue lies at the heart of Joshua Wolf Shenk's new book, ` Powers of Two: Finding the Essence of Innovation in Creative Pairs`.  In this tome, which draws on sources including academic research and historical evidence, he explores what makes creative partnerships work, those where people can be `as alike as identical twins and as unalike as complete strangers. `

Shenk believes that in successful pairs lies a special combination of similarity and mutual interests alongside differences.  Creativity, he argues, is driven by `encountering difference`. But this seems to work best when only two players are involved.  Crucially, it's a social unit but it's also very flexible. Two people can take and switch roles, forming a balance that is also part of optimising the creative process.  

Effective partnerships are rarely symmetrical, with both people in the same role, even if, like Google’s Larry Page and Sergey Brin they have the same title. For instance, it can commonly be the role of one partner to be the public face of the company, whilst the other maintains a lower profile.

This can be for more than pragmatic reasons of skill or time availability.  It may be that the `face` gets their ego gratified by public attention, and that need  not be destructive so long as they respect the other person’s contribution.  It may also be that the more recessive personality has to realise their interests too are being met by the more extroverted skills of their partner.

Fight

But such issues may be difficult to navigate and any student of business history knows that entrepreneurship is full of tales of co-founders fighting, especially if their enterprise proves successful. This can start as soon as a third person enters joins the firm. The culture then starts typically to become less dynamic and more structured at the expense of rapid, informal and often intuitive communication.

Also, as anyone that’s been in a start-up will attest, when you're struggling to break through, you're all in it together and it's fun. There is a common enemy - failure.  In the presence of a common enemy focuses the mind and the surrendering of individual ownership, either metaphorically or literally is easier because there is not so much at stake.

Of course, creative pairs exist in a context, and when you look at those that survive and continue to be creative together, what surrounds them becomes a really critical part of the story. Shenk points out that, often, creative partnerships have a stable team of co-workers who've been with them for decades. Each in the pair has the freedom to play to their strengths because they're being supported consistently by a group that understand how it benefits them and have evolved mechanisms that make the most of any situation.

Trust, faith and belief

But ultimately great creative partnerships are built on trust.  You have to be confident that your partner is going to do what they say they're going to do, and that's something that’s developed over time.  Eventually trust evolves into faith, where you really believe in someone. 

But as I like to think my holiday schedule demonstrates, creative partnerships are not at odds with solitude.  A lot of people need to have time alone to give their best to another.  And that’s something  every partnership needs to work out.

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Business is hard – don’t forget the soft stuff

One of the things academics and `business gurus` people seems to forget from the loftiness of their academic or consulting perches when musing on leadership is that if someone is engaged in building just about any company or organisation is that they are likely to be very busy indeed.

Actually not just very busy, but totally-life-consuming-frantic. Leading a modern, entrepreneurial organisation is like trying to drink from a fire hydrant – absorbing and prioritising  massive flows of information and a million and one conflicting demands daily in an effort to keep an outfit afloat, moving in the right direction and, even, ahead of the game. 

People are much more than numbers on spread sheets

But in this hurly-burly aside from poring over the hard stuff of business administration – the facts, figures, targets and deadlines, the best leaders don’t forget the soft stuff that helps their team advance and perform to the best of their ability.  No matter how complex a business each member of the team is likely to be a lot more complicated and misjudged remarks or carelessly expressed thoughts can quickly undo success based on years of grind and sleepless nights.

People are much more than numbers on spread sheets and increasingly form a large part of the value of any organisation and, because of this, being able to read and react to the reality others' feelings is increasingly important for leaders to build and maintain successful firms.

So how might you ensure that you’re getting the best out of your team day-in, day out?  What do you need to have top of mind at all times?

For me it all starts with the realisation that people like to feel valued.  They need to know that their skills, knowledge and contribution matter. And that means everyone in the firm, not just your closest working associates. All deserve attention, no matter how fleeting the acknowledgement of their efforts, because in a successful company everyone knows that they are part of the team.

The power of your own demeanour

That means you need to be constantly aware of the impact of your often unconscious actions can have. You should never underestimate to the power of your own demeanour to influence not just the atmosphere on a day-to-day basis but culture in the longer term.  People will judge you from the moment they walk in the door and will take their cue from your attitude and behaviour, for good or bad. 

So, no matter how irritated you are, door slamming, cutting comments, heavy sarcasm, barbed criticism, faint praise or pointedly ignoring people or a myriad other forms of passive aggression will only come back and bite you.  You can be sure of looking forward to poor productivity, disappearing good will and corrosive resentment.

In particular, treat people with care and respect, particularly when they occasionally fail and are at their most vulnerable.  They may not remember what you said to them at the time but they will certainly recall how you made them feel years later.

But also remember they are not you. As the driver of the organisation you need to manage your own exasperation. Just because you may be the alpha leader an immediate response or solution to a question or requirement is not always possible or desirable.  In an attempt to salve your impatience your people should not be panicked into supplying sub-standard responses, because nobody wins.

If you think things aren’t progressing as fast as they should, agree a plan that both parties honestly buy into. It's ok to stay in touch while waiting for things to progress, but avoid pestering or getting in the way. No one likes a `seagull manager`*.

Keep a sense of proportion

Remember, as well, to keep a sense of proportion.  It’s unlikely that anything you are doing is the equivalent in importance as `the cure for cancer` unless, of course, you happen to be managing an oncology lab or making genomic breakthroughs.  So, show a sense of humour, even if it’s pitch black.

You can’t beat having a laugh to relive tension and things can feel a whole lot less daunting for the team if they see you can see the funny side of the situation as so much of life in the business fast lane verges on the ridiculous.  Of course, laughter is not a substitute for focussed hard work - it just makes doing it more fun.

Dealing with uncomfortable situations by retreating into disingenuous weasel-worded civility or face-saving brazen lying is in no one’s interests. But these are resorted to because it's really hard for anyone to relay or hear the awful truth, especially when they are both deeply committed to an activity. No one likes to be the harbinger of bad news but great leaders know how to deliver truth in an objective, straightforward and blame-free way that helps people move forward. At all times remember to separate the `business` from the `personal`.

Roll up your sleeves

Never is this more important than when the going gets tough. And when the going gets tough, of course, the tough get going. But don’t be a threatening, goal-directed bulldozer. You will need to say it how it is, demonstrate belief, carry - but don’t take away - the burden and show the way forward. If words and strategy aren’t enough, roll up your sleeves and show commitment by getting down to work directly with the team.

In doing so you’ll be implicitly recognising the efforts others make. Then look for opportunities to do small, thoughtful things for others around you to demonstrate that you appreciate their efforts – again, that you care about them as individuals. It might be that it’s just making them a cup of tea or coffee when they haven’t moved from their desks in an age, offering to get them lunch whilst they are out, ensuring they leave the office at a reasonable time or suggesting they come in a little later.

Thank you

Who knows, given this encouragement people might actually say `thank you` to you for all your efforts in stewardship of the organisation that so often go unnoticed or appreciated.  After all, no one understands how lonely it is at the top until they actually get there.

But that’s the reality of being a successful leader. But once you get there you need to know you can’t achieve the big picture without sweating the small stuff.

* For those unfamiliar with the term, a seagull manager is one employees never see until they come out of nowhere, make a lot of self-important noise, cr*p all over everything and then disappear.

  

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The UK Business Leadership Crisis – Time for More EI in the HQ

The majority of UK organisations have concerns about their ability to fill critical leadership roles, with only 14 per cent confident about their` available talent pipelines`. This is one of the lamentable findings contained in recent research by Right Management resulting in a report, Talent Management: Accelerating Business Performance - based on a survey of more than 2,200 HR professionals.

This horrific conclusion is echoed in separate research by Investors in People – on the Framework Governance Group of which I sit - that suggests 12 per cent of employees can find `nothing they admire` about their managers. The survey of more than 1,000 UK employees also found that managers not giving due recognition is the most disliked trait, with 19 per cent citing this as the biggest problem. Being approachable at 36 per cent is the quality employees most appreciate from their managers, with strong organisational skills, cited by 34 per cent, seen as the next most important.

No wonder then that too many organisations continue to face talent shortages, skills mismatches and weak leadership pipelines that threaten the success of their business. The good news for UK plc is that the Right report also found that more than over half (54 per cent) of its organisations see developing leaders as the main priority for 2014, above the global figure of 46 per cent.

Make no mistake, investing in good relationships between managers and staff are vitally important to an organisation's success. The IIP survey revealed that 24 per cent of those who get on with their boss felt it made them work harder, and 23 per cent said it would make them stay at the company longer. Of those who said they didn't have a good relationship with their manager, 43 per cent said they considered looking for a new job as a result, and 36 per cent feel less motivated to do a good job for the company.

Boss versus leader

But for me any discussion around company leadership has to be based in understanding the difference between the behaviours of 'boss' and 'leader' some of which the Right and IIP reports reveal. For me a boss commands; a leader asks. A boss drives employees; a leader coaches them. A boss depends on unquestioning authority; a leader generates goodwill. A boss inspires fear, whereas a leader generates enthusiasm. A boss looks for where to place blame and a leader sorts out the problem. A boss might know how something is done, but a leader takes the time to show others how to do it. A boss uses people; a leader develops people. A boss puts themselves first; a leader puts the team first. A boss takes credit and a leader gives credit. You get the idea, I hope.

Why is it, then, that many company and departmental heads are clearly failing to be able to break out of this increasingly ridiculous and counter-productive posturing 'boss' behaviour? The answer, I think, is that way too many lack emotional intelligence.

You may have never heard the term, though I think you will a lot in 2014 and beyond as companies implement those management initiatives to develop leaders as they struggle to maintain competitive edge in the digitally-enabled global economy. The five components of emotional intelligence, as defined by its originator Daniel Goleman, are: empathy, self-awareness, self-regulation, motivation and social skills.

Excellent versus average

In pioneering research Goleman compared those who excelled in senior roles with those who were merely average. He found that close to 90 percent of the difference in their profiles was due to emotional intelligence, rather than cognitive ability to build on the traditional requirements for success. These are: raw talent, a strong work ethic and driving ambition.

Before the HR department descends on you as part of a talent management initiative or your people start to vote with their feet, to start to get an idea of the level of your own emotional intelligence, you might start by asking yourself whether you like people. Do you ask lots of questions after you've been introduced to someone for the first time before talking about yourself? Do you know a lot about your colleagues or employees? Not just their jobs but their backgrounds and lives? If so, you are showing empathy. Highly empathetic people build strong relationships over time – another key indicator of high emotional intelligence.

Self-awareness and self-regulation

To use Goleman's term, 'self-regulation' – that ability to withstand distractions and concentrate on the most important task at hand – is also one of the great foundations of emotional intelligence. In a noisy and uber-connected world, it's difficult to develop self-awareness and strong relationships if you are mentally 'all over the place'. In business, the devil is always in the detail. Being able to sense how others are feeling, particularly from their facial expressions and body language and acting upon these signals, is important. If you have high emotional intelligence you'll find your intuition about people and business is rarely wrong.

It's likely also that you have high emotional intelligence if you are inherently self-motivated. Were you ambitious and hard-working even as a child, getting on with stuff and taking responsibility for the sheer pleasure of it? If so, it means you were probably on the right track early on. How you deal with mistakes and setbacks says a lot about who you are. Individuals with high emotional intelligence know that if there's one thing they must do in life, it's to keep going. This includes 'doing the right thing' no matter what. This can also be regarded as 'authenticity', now also a crucial aspect of corporate identity and behaviours.

So, there you have it. If you don’t want to be one of those executives in which your team finds nothing to admire or want to be more sure about your leadership pipeline going forward growing some emotional intelligence in yourself and your organisation could be the best thing you’ll do all year.

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Fragrant Lies, Smelly Truths and Irritating Awesomeness

As an entrepreneur you have to do a lot of talking. However, the way you talk can seriously damage your chances of making a good impression in presentations, interviews or even in everyday conversation. That being so, I thought I'd list out some nasty spoken habits, that if you want to get ahead in business, it'd be worthwhile avoiding.

Filler really is my pet hate, perhaps because it's so common. Sometimes, it's when people insert a word or sound into a sentence when they are pausing to think, but more often than not it's part of a deliberate speech pattern or accent. Not just 'ums' and 'ahs', but words like 'obviously' when something isn't, and 'like' when it doesn't relate to any matter of taste.

If you are one of the 'like' generation and don't realise how this habit demeans you, grab your smartphone and record yourself a few times in a meeting. You'll soon realise it's infuriating to the listener. Stop using filler words, and pause rather than trying to populate space. You'll end up sounding considered and thoughtful, like you're choosing your words carefully.

Turning statements into questions also ranks high on my irritation list. This can be a relatively benign raise of voice pitch at the end of the sentence, or, much, much, worse, can be signalled by an actual word or phrase, such as 'y'know?' , 'innit?' ,'yeah?' or 'am I right'? It just sounds ignorant, but also signals constantly that you're not comfortable with your ability to communicate clearly, or are not listening to your interlocutor's responses.

Ditch the habit, or if you are really unsure whether the other person is keeping up, first think about whether you could be more effective in your explanation, then ask a specific question such as: 'Does that make sense to you?' or 'Anything you'd like me to go over?' The point is either to ask questions or make statements. Don't try to do both.

Another bugbear for me is gobbledegook. This is typically intended to make a person sound like they are an expert, or some sort of insider. It rarely succeeds. So much of it comes from the United States, but is now jargon used around the world. You know the sort of nonsense. 'We're reaching out to establish a dialogue...' rather than 'We're calling to talk about'.

To avoid this sort of pomposity speak like Hemmingway wrote – no, not endless tomes about shark fishing, bullfighting and drinking – but using Anglo Saxon words such as 'dig' rather than 'excavate', and terms as they're defined in the dictionary, not in your head. That way, you'll sound more like a professional and less like a caricature BBC manager.

Another method used in an attempt to sound professional or engaged, involves the overuse of clichés – words and metaphors that have been used so frequently that they have lost all impact. Anything that is 'the new rock 'n roll' fits into this category, as does describing something as 'awesome'. Devoid of meaning, they're just noise, so avoid these phrases and words completely or think up some new ones.

Also, attempting to use apparently impressive sounding words and phrases rather than smaller, common terms usually sounds downright pretentious and prevents understanding. Why say 'create strategic options and tactical approaches' when you could say, 'make a plan.' Similarly, why say 'implement multimodal transportation infrastructure' when you mean 'help people get around'.

Euphemisms are so often used in an attempt to soften some imagined blow. For example, saying 'compact' when you mean 'tiny', or claiming to 'free up their future' when making someone redundant. It's disingenuous to say the least, so don't do it. You'll get more trust, respect and credibility in the long term for telling smelly truths rather than fragrant lies. People aren't stupid, and the reality is you're not fooling anyone. Except perhaps, yourself.

False apology too is what people also attempt when they want to lessen the impact of an event or statement of truth, but when they really don't mean what they are about to say or they aren't really sorry for what they have just said. 'With the greatest respect' is one of my favourites, signalling the insult to come. Additionally, how often have you heard someone use the phrase 'Sorry if that offended anybody', when they clearly don't care a jot?

If you think about it for a nanosecond, such so-called apologies actually add the passive-aggressive insult of blaming the other person for being offended to the injury of the original slight. In contrast, real apologies are unequivocal. They are brave and honest. If you can't express regret sincerely, don't bother, because you're not really apologising and everyone knows it.

Blurting is an irritating sin committed when someone is apprehensive. This is characterised by the spewing out of a stream of facts or observations without considering if any might be of interest to the listener, or before anyone can ask questions.

Like all modern communications, whether you are engaging people face to face or remotely, think 'friendly conversation' not 'market stall pitch'. Relax, ask questions, respond to comments and establish what's needed to fuel the dialogue. Only then, insert easily understood facts, figures and observations that are immediately relevant or add value to the conversation.

As the old saying goes `you have two ears and one mouth - use them in that ratio!`

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It’s PR Jim, but Not as We Know It

The title of this blog is, I admit, hardly an original play on Mr Spock’s supposed reply to Captain Kirk in the Star Trek series - ‘It’s life, Jim, but not as we know it’.  But, stay with me, it has a higher purpose. Although in one episode, Spock does refer to ‘no life as we know it’, the version now taken as characteristic of the Vulcan comes instead from being the hook in a 1987 novelty song, ‘Star Trekkin’’, sung by The Firm.  

History is written by the victors, Churchill is reported to have said, and given the wide use of this misquoted phrase you might think that this is indicative of the power of communication to change perceived reality.  You might even see it as just great public relations by the music industry. But that would assume you understood what is PR.

But I’ve spent much of my professional life, it seems, trying to explain to businesses and individuals exactly that.  This task has not got any easier in recent years as the components of an already fragmented discipline have increased and changed relatively in value. But it has occurred to me that if I can’t explain succinctly what I spend a lot of my time doing what chance does anybody else have of understanding it?

We’re all publishers now

So here goes. Some background. Traditionally, public relations has been confused with media relations - mass `earned` communication through the press.  It was always more than that, but the arrival and rapid growth of digital channels and social media has meant we have all the potential to become publishers. And in being so take advantage of `owned` and `paid for` communications opportunities inherent in company websites and blogs or Google searches and Facebook and LinkedIn sponsorships.

Conversely, through the same channels, as individuals we all now expect to be able to talk to companies, organisations and brands directly. More than that, we expect to be heard and responded to where, when and in a way that we like.

Like a hydra with Tourette’s

Yet in the digital age  too many companies are communicating,  it appears,  for the sake of it - just making noise,  unsure who they’re talking to, or why.  Like a hydra with Tourette’s, they spew words and images across media with a multitude of different voices and tones. This is a big, expensive mistake. The age of machine-gun messaging is well and truly over. People want to be engaged with on their terms - spoken to, not shouted at. 

Thus the art of communication is becoming ever more intimate. The idea of business-to-business and business-to-consumer are becoming arcane as marketing becomes person-to-person.  Curiously, though, it’s often large organisations, and particularly the big brands, that know the most about us.  Usually courtesy of loyalty cards and tools that track what we say about ourselves online every day that provide the big data and analytics that should enable us to be targeted very precisely.

I say should because it’s what’s done with that data to realise its value that PR is now all about. PR is no longer just about getting journalist, analyst or blogger buy-in to tacitly endorse a product or position in the hope that it will better influence a purchasing decision than by spending money advertising the virtues of a product  or service.

Content and multiple channel management

Communicating effectively is now all about content and multiple channel management.  It involves redefining relationships between companies and customers and providing the latter with information that is useful and pertinent in a way that they want to consume.  In an industry ever in search of new buzzwords this approach has become known as `content marketing`.

Before anyone thinks I may have just cracked a new definition of, and term for, PR, I’d like to point out that there is yet no accepted definition of what is `content marketing`.   But, to my mind, the elevator pitch is that it is the engine of an integrated strategy to communicate consistently across all platforms so delivering clarity, reinforcing leadership and building that most valuable of entrepreneurial and corporate assets - trust.

Spin redundant

So far so good.  But effective marketing has long since ceased to be based on a shiny monologue - power has passed to the consumer who needs to buy into the totality of a corporate offering in order to start listening, let alone become an advocate. Its success nowadays is predicated on an acceptably ethical and transparent business approach.  This necessitates appropriate values and behaviours existing and demonstrated throughout the organisation and makes the idea of `spin` redundant.

Thus, these days, business, marketing and PR strategy have to be closely aligned.  Communication must be at the core. The role of PR being to manage paid, earned and owned media across multiple platforms, deciding the right  `voice` and the right content with which to engage with each audience – down to an individual customer.  And that, as football managers are prone to say, is a big ask.

The idea of the central role of content management, then, is central to PR going forward – and, while it doesn’t offer a new definition of what PR is, it goes a long way to suggest its function both now and in the future.

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Entrepreneur Know Thyself – How to Keep Ahead in the Market

Whenever I ask entrepreneurs to name their competition and they reply with `we don’t have any` I sigh silently and die a little inside. Having no competition is usually not a sign that you are a visionary genius. It’s most often a signal that others have already thought through your idea and discounted it.  Competition is actually the evidence that you are on the right track.

But competition doesn’t have to look, feel and smell like you, it can come in many forms. Substitutions of your goods or services, or sheer inertia in the market are forms of competition for the attention of your customers.  The important thing to realise is that competition exists, in whatever form, and that it has to be dealt with in order for your venture to secure funding and succeed in the marketplace.

To be a successful entrepreneur it’s essential to know well your enemy.  And to know them before you have picked off all low hanging fruit customers and growth comes to shuddering halt whilst your better prepared competition makes hay in the rest of the market you thought you had to yourself.

But if you haven’t already done so how might you get a grip exactly what’s happening in your current and potential market and define the competition?

SWOT up

First you could start with a SWOT analysis.  Don’t just identify strengths, weaknesses, opportunities and threats for your own business; honestly consider these factors for your competition too. Remember also that strengths and weakness are internal to your offering and under your control. These enable you to take advantage of and deal with the opportunities and threats that appear in the market which aren’t.

The point of this ultimately is to identify the key differences between you and current and potential competitors.  To figure out what you and they do really well, allowing you to focus on a strategy based on differences that enable you to gain competitive advantage. 

If you are planning to launch a host of new products or diversify into new markets, the chances are your like competitors are too. In this respect the Web is a great tool for gathering general competitor positioning information per se, but what is often more useful is to look very closely for warning signs that things are on the move. Such things as new patent applications, blog musings that belie an interest in new markets, changes in emphasis in brand positioning or communications that emphasise strengths that may be attractive to your customers.

Expect the unexpected

This is all fine for firms that obviously compete directly in the same way for the same customers.  But dangerous disruption rarely comes from expected sources.  Those retailers who viewed Amazon as simply an online bookstore quickly felt the heat as Amazon used its core distribution competency to enter their markets. 

Companies that do not move fast can quickly get caught in the perfect storm.  Take the case of  Britain’s established supermarkets, particularly Tesco - which only a matter of months ago was seen as the undisputed king of UK retailing - and Morrisons.

They have both been suffering recently from an onslaught from like competitors - discounters Aldi and Lidl - and changing consumption patterns as consumers shift back from shopping from out of town superstores to convenience stores and increasingly go online.  Now all too will soon have to face competition even in their core food businesses from Amazon as it is currently expanding its online grocery offerings in the US and has made no secret either of the depth of its pockets and the size of its ambition.

And it gets worse. In its latest power play in the US Google is rolling out Google Shopping Express where Google vehicles deliver non-perishable groceries from local retailers big and small. The big idea is to cooperate with retailers rather than competing with them, with the aim of getting people searching for products on Google rather than going straight to Amazon.

Google competing with Amazon for grocery business?  Who'd have predicted that? Neither, I suspect, a few years ago did many IT companies, including Google, envisage that they would soon be competing with Amazon as it seeks to dominate the supply of cloud capacity. Such is the nature of the digital world in which we now live.

So you need to think broadly and expect the unexpected. That means assuming every business that could impact upon your profits is a competitor. Not just companies that sell associated products or services to your own who could be thinking about taking a natural step towards offering exactly the same things as you, but those that have the core competencies and networks to engage your partners and consumers in ways they prefer.

This, of course, makes your total competitive landscape large but conducting a really thorough open-minded market scan is key – including mapping out the threat level of each competitor and looking at timescales within which they may try to do everything from grabbing your market share to fundamentally disrupting your business.

See yourself as your customers see you

Of course every business needs a unique selling point (USP) that can be summarised in an `elevator pitch`. This is where you have to be really honest with yourself.  I found often that the business owner’s perceptions can be very different from those of its customers.

So I’d start by asking them what they think are the top three reasons they do business with you and then figure out if these are genuinely different from your `like` competitors.  Then build on the top answer and make sure this fundamental differentiator is emphasised in every communication that comes out of your company.

It’s said talent borrows but genius steals. On that basis using the work of others to fuel your own innovation is a great way to challenge your thinking in order to remain competitive. It worked wonders for many Asian companies post-War and Xerox probably still rues the day it showed a young Steve Jobs and his team around the Parc Labs.  Pick the elements you like best from a competitor product or service and improve or add to them in a way that addresses a clear customer need, works for your business and that ultimately results in a better overall product or proposition. 

Even if you you’ve got to this stage and convinced yourself that you have a great product if your pricing is inappropriate it won’t sell well. Look at exactly what your competitors are offering and at what price and whether their customers think this is reasonable. Customer feedback on websites is invaluable for doing this.  Don’t forget perception of value is all - it may even be that you are under-pricing, rather than over-pricing. 

Lastly, to paraphrase Napoleon, once you know your enemy never interrupt them when they are making a mistake. Except, of course, if your lack of marketing self-awareness has made you your own worst enemy.

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