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Entrepreneurs with Denis Oakley

I HELP BOLD LEADERS TRANSFORM THEIR BUSINESSES AND THE INDUSTRIES THEY COMPETE IN

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Break – Disrupt – Make a Positive Impact – Building a New Jerusalem for Small Businesses

Break - Disrupt - Make a Positive Impact - Building a New Jerusalem for Small Businesses Last night was one of those nights. I’d finished late and by the time I unwound and switched off the light it was almost midnight. I started listening to my audiobook and at 00:30 I was still awake. I work up again at 2, at half three,just after four and then my alarm clock went at 5. When I woke my kids up at 6 my eldest daughter asked, seeing the bags under my eyes

How are you today Daddy?

I was so tempted to tell her exactly how I felt. Instead I said

“I’ve never been better“

I’ve Never Been Better

It had the great virtue of being true and inspirational. True because whilst I was tired I knew I was going to spend the day doing what I love with people I care about deeply. Inspirational because as I said it it lifted me up from the self doubt and self pity that tempted to overwhelm me.

Then I started off on a pointless 200 km round trip to pick up a bank fob that I had meant to pickup when I’d done the same trip the day before and forgotten. Like I said life couldn’t be better. Just after dawn I was driving through beautiful jungle covered mountains, watching the white clouds cover their steep green slopes like the divet covered the form of my still sleeping wife.

What Makes Me Tick?

As I drove I returned again and again to the question

What make me tick?

I thought about my life, my school, my childhood and tried to understand what makes me different. What was the path that led me to where I am today.

Epiphany

As I drove I had a moment of epiphany.

I love changing stuff. It’s not the process of creation per se. It is the breaking apart of old outdated, outmoded structures. I was never a punk with a desire to trash everything because it was traditional or authoritarian. No it was a rejection of anything that was accepted and inefficient.

If it worked well – great. I’d use it and be satisfied. if it didn’t work well or didn’t add value then it drove me nuts.

Pointless Authority as the Enemy

A great example was going to Chapel. We had to do this 2 – 3 times a week. Whilst I had no strong feelings about religion I did have strong feelings about being forced to go to church. This was especially true when I hadn’t been taught to pray effectively and as a consequences never got anything from God (Channeling teenage thoughts here – now my thoughts are more mature).

I put a huge amount of ingenuity into

  1. Avoiding going to Chapel
  2. Not getting caught

I lost most rounds with my house master but that made the wins so much sweeter.

Break – Disrupt – Improve

This pattern repeated and repeated. I found myself in organisation after organisation that was inefficient and woefully incapable of doing what it was meant to do. Naively I took the mission statements at face value and came up against the twin whirlpools of organisational culture and top down management. Can you imagine me being a yes man and climbing the greasy pole?

Nope. It didn’t happen.

What happened was that in the right organisations I was lucky enough to break things, disrupt the way that they worked and then build something much better. In the wrong organisations I was yet another victim of office politics.

Build a New Jerusalem

This is the why of Denis Oakley. I love working with small businesses because I see the failures of most businesses. I also see the shadow of the New Jerusalem that they could be and that is what I reach for throughout my work.

There is also a wonderful subtext – when I work with startups and small businesses I get to set myself up against the corporate giants who stand in for the authoritarian church of my childhood. How can we beat Google? Can we break LinkedIn? How can we disrupt Apple’s business model? How can we change the world.?

It’s Never Been Better

Fuck Yeah!

What a life!

Its never been better

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Why Do I Do Strategy?

Why Do I Do Strategy?I am reading Simon Sinek’s Start With Why at the moment and it made me think about why I do strategy. Sometimes I’m not sure if strategy is the right word. So in this post I am going to explore what it is that I do and why I do it.

Some people ask “Why?” Others ask “How?” I am firmly in the first camp. Ever since I can remember I have asked:

Why does that happen?

Why does this work like this?

Can I change that?

The reason is that I like to know how things works. Even better, I am driven to understand how things work. Once I understand them I like to drive them.

The Drive to Understand

In my very first job years ago I worked as an archivist looking after engineering records. The first few weeks were really frustrating for me as I couldn’t understand why anything was organised the way it was.

Signalling records for Crewe were associated with civil records for Crawley (and no it was not as simple as alphabetical organisation).

Gradually as I saw more and more of the archives I realised that no one understood how it was organised. The way that it worked was that everyone who started was taught the way that it worked. As new records arrived they were added according to a new schema that the staff member though appropriate. As far as I could tell this had been going on for decades.

The Drive to Improve

I drove my boss mad.

Why is it like this? How are you going to make it better? Why can’t we find anything quickly?

Eventually in exasperation he said to me

Denis – since you are so clever how should we organise it?

I should have been prepared, but as I said I was young and naive. No matter a few hours later I had the answer and then the great organisation started.

It was awesome. The archive became a place of beauty and then it became absolutely boring as there were no more useful changes that could be made.

What I do is I see clearly why things are the way that there are and see where they should be.

Philosophy as Understanding

Part of this is my philosophy degree (yep I’m one of those annoying logic choppers). I suspect that that improved my skills rather than created the desire.

The underlying desire is to understand and organise the structure of reality. That’s what Aristotle and Plato were really trying do. That’s the essence of philosophy.

Business strategy sells a lot better than Business philosophy.

What I’ve learnt is two things.

Clarity

Pathways

Clarity

Clarity is the ability to see and understand how a business works under the surface. It’s like having X-Ray vision. The bones and joints show the way that the company has to move. Without the muscle, skin and clothes to hide them everything is so much clearer.

Pathways

Pathways is being able to see not only how the skeleton can and does move. It means being able to see the osteoporosis and the healed fractures that inhibit movement. Even better it means being able to see what would happen if we start changing the bone structure and swapping them and the joints out.

That’s getting a bit Frankenstein’s monsterish! Definitely extended the analogy too far.

Let’s continue though as it can get beautifully weird.

Intelligent Design

A business is meant to achieve a goal. That may be mundane. As Simon Sinek put it – Dell makes computers to make money. There’s not a lot of why in that. Apple disrupts the status quo and it makes devices that do that. That’s a big powerful why.

A company that has a powerful why like that is like an animal designed by an intelligent designer. The intelligent designer understands the purpose of an animal – a crab lives to pick small pieces of food from the surf at the edge of the sea – and designs it so that the animal is just so. The crab is given a shell to protect it from the tumbling waves, eyes on stalks to let it see swooping gulls and tasty morsels.

Like an intelligent designer I swap claws for wings and eyes stalks for compound eyes to help my corporate beasties survive in the environments they find themselves in (whether it is a Red Sea or Blue Ocean).

Blind Watchmaker

This isn’t how evolution works. It is how corporate strategy works as we try and force the pace of evolution.

There is a vast amount of data that is fed back to us in terms of market conditions, customer response and employee productivity. This is the raw juice of corporate evolution. Little experiments allow us to mimic natural selection.

What works far better is when is when we see clearly and can accelerate the process. Farmers have done this for tens of thousands of years increasing the yields of crops and cows. I do strategy to enable businesses to do the same.

If the process was simple, if it was like natural selection if would be boring. Because we have the ability to change how things work it is an external delight

Why I do Strategy

That’s why I do strategy. I do it because I can’t do anything else. I do it because it lets me spend all day every day understanding the world and imagining ways to change it

Some people see things as they are and ask why

I see things that never were and ask why not

I have a perfect design – just like the crab in the surf.

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Entrepreneurship is Like Running through the Jungle

I was on a speed run up a local mountain, Gunung Liang, and was happily listening to Ray Dalio talk about his ‘Principles’ (brief review here). Something about what he said triggered me to get the camera and riff on how entrepreneurship is like running through the jungle.

I had a clear view of my goal, the summit of the mountain, before I left my car. It quickly disappeared. Then I was on a twisty winding trail hoping that I was going the right way.  That’s often the case with our entrepreneurial journey. We keep on, moving past the obstacles, trusting in our forward momentum.

Forgive the heavy breathing in the video. It was 35C and super humid. I’d been running for a few hours and the path was more uphill than it looks in the video.

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What is a Business Model for?

What’s a business model for? As a business strategist I use models day in and day out. They are the tools of my job in the same way that a carpenter uses an adze and saw or a farmer uses a plough and drill.

Let’s play with that analogy a bit. Can a farmer plough the field and sow the seeds without machinery? Sure he can. He can get rid of the tractor and replace it with a hoe and a basket for the seeds. In some places where the soil is thin or rocky that may actually be a more productive approach; not usually though. Can he do without any tools at all? Again it’s possible. Circumstances, where it will work, are more limited. You probably need to find a fertile river valley recently flooded, without too many birds and then scatter the seeds by hand. Primitive.

Trying to be a carpenter without tools….. I am sure there are some very talented people out there who can do amazing things with wood and their bare hands, but they are probably not carpenters.

So a business model is a strategist’s tool. Often people hear the word strategist and they throw their hands up like “Wooooh, How many degrees do you need to do to call yourself that?” Really though a strategist is anyone who thinks about how something is to be done. It’s about where the ship should be heading (to jump from land to sea) not making sure that the ship is moving. And so just like a sailor or a captain, the strategist needs tools to navigate successfully.

In some cases, tools are common sense. In many other cases tools have been derived from lots and lots of data. In almost all cases we aren’t taught ways of making great decisions at school or university. And that is another definition of what a business model is. It’s a way of helping you to simplify masses of information and use it to make better decisions

Pragmatism and Business Models

The pragmatic strategist, often working fast on a variety of small projects or startups, does not have the luxury of using large complicated frameworks.  One of Leander’s projects for this year is to work out how to take the mass of startup models that he has in his toolbox and build them into a coherent system. The problem that he faces is the huge variety of problems that need to be solved quickly.

Someone once described being in a startup as being like a car driving fast on a potholed road. Sure you know that there are lots of potholes ahead – but all you care about is the pothole right in front of you now. If you don’t miss it, you’ll break your axle and never get that next few hundred metres down the road.

So unlike Shell with its famous 5 year plans startup models have to be usable out the box and quickly. If you can’t explain it, use it and understand the results in a few hours the time cost of the model is too large for most startups. If someone needs specialist training the time cost is too large. If the model is proprietary information or buried deep inside and inaccessible book the time cost is too high.

Any model that we use has to deliver results quickly and in a super digestible form that makes it clear what we need to do next.

One of the biggest benefits of the Business Model Canvas is that once you have done it you pretty much have your pitch structured and mentally prepared in your head.

  • These are my customers
  • This is their problem
  • This is how I will reach them
  • And interact with them
  • Using these resources
  • etc…..

Idealism is not the Enemy. Really

On the other hand, there is a case for idealism. We do get engrossed in the details and too often cannot see anything but details. I once worked for a COO who in the 8 months that I worked for her kept on saying ‘I’ve got to be more strategic’ and I think I had over 20,000 WhatsApp messages from her as she delved down into the details and we didn’t make the hard calls about which ways trade-offs should play out.

So flying up in the air and looking at the idealised company and how it should work and where we should go is important. Whether we use Porter or SWOT or Lean Canvas or anything else stepping away and taking an idealised approach on how to get to our vision from where we are now is very powerful. Of course, it will get trashed as we start getting blasted with WhatsApp messages again but the idealist has the deeper understanding that acts as a bulwark against the thousands of small decisions and tradeoffs that she has to make every day

Business Models Give Results

For a startup, it all comes down to results. Once a long time ago I worked for a very large multinational and spent months designing and polishing a business continuity plan. It was for an event that never happened, and I guess that if it has been maintained it would still work. Probably. The point is that we used a bunch of models but the net impact of all the work was a cost to the company. Sure it mitigated against a risk that never materialised.

In contrast, a startup needs results quickly. If we spend the time ‘playing’ with this business model what is the opportunity cost? There are always more tasks to do than seconds in the day. Will this model or tool mean that tomorrows tasks deliver more value? Next months’ tasks deliver more value when I complete them. In many ways, this is the inverse of the accountants’ net present value. Instead of worrying about the future value of money we are worrying about the future value of our time.

A business model by this understanding offers a map and a shortcut. It is a heuristic, it can be used wrong, it can be executed wrongly, but by and large, it saves us time and makes us more money tomorrow than we lost today.

Understanding Comes Faster with A Business Model

It does that through understanding.  Almost everything we do is a level of abstraction. Our brains abstract the information that comes through our minds into comprehensible constructs. When we use maps we strip away vast amounts of information in order to produce something that is quickly and easily understandable. The way that we use business models is to structure our understanding of the business problem so that we have a level of simplicity that gives clarity.

Some may say oversimplification. I think not. Oversimplification does exist but one of the consequences of that is to trigger debate and greater group understanding if it is not agreeable to all. It’s probably less of a danger than under simplification but there is a huge tendency among people for their minds to skate over the detail. So we reduce complexity until the model is at the point where we can understand all the components of the model without our minds skating or skipping a bit.

It is surely no accident that most of the best models have 4,5 or 6 components. Others may have a few more but once you get beyond a dozen models start to creak under their own weight and collapse.

Business Models Give the Benefit of Systematisation

So what is a business model for. It’s like a stepping stone. Each gives you enough intellectual stability to stand safely, whether the water is rough or smooth and step confidently forward to the next in pursuit of your vision.

Strategy models bring some system, some order, to moving forward in a chaotic environment where you have too much or too little information.

Worth the price

What is a Business Model for?