Tag Archives: balance

An ABC of decision-making

Assessment – Balance – Compromise (but not necessarily in that order)

The big supermarkets tell us we want choice, they imply that the more choice we have the happier we’ll be. In reality of course, we get overwhelmed if there are ten brands/ sizes/ prices of tomato ketchup; we want only limited choice. If there’s too much decision-making we don’t make a choice at all and the supermarkets have been late to acknowledge this and are only now cutting back on the range of items on their shelves.

Price is just one element of a buying decision and, even then, it can seem difficult. When faced with just three prices for three brands of a relatively low-cost item with similar specifications – for example an electric kettle – many of us will avoid the highest and lowest prices and go for the mid-priced item. It’s comfortable and we can probably justify our choice as the ‘least-risk’ option (not getting ripped off nor buying a cheap pup). Similarly, when given a survey question asking us to rank an item from say 1 -5, we’ll often choose option 3 because it means we don’t risk criticism or need to give further explanation by expressing a ‘for’ or ‘against’ view. Anything to make life easy.

For decisions more significant than buying a kettle or completing a survey, compromise – taking a middle-of-the-road position can be seen as positive or negative depending on the context. In international negotiations, the resolution of a fiercely contested debate will strive for a consensus that is likely to end in compromise. All sides making concessions is usually necessary if diplomatic relations are not to break down.

In a business context, compromise can be seen negatively – a sign of weakness, the worst of both worlds, the easy way out – with the risk of losing face if applied to a negotiation. We expect our leaders to make firm decisions, after taking soundings from others holding contrary views maybe, but ultimately being decisive seems to be what leadership is all about.

This pressure means that our leaders, including politicians, often develop what Tim Harford brilliantly describes in a TED Talk as ‘the God Complex’. This is the belief that, although undeniably the world is an incredibly complex place, those with the God Complex believe they understand how the world works when, of course neither they nor anyone else, really does. Having identified the God Complex, Tim Harford goes on to advocate that we stop giving school children the idea that all problems have answers, and show instead that most progress in life is achieved through trial and error. A messy but more accurate portrayal of reality.

In my work with young people trying to start their own businesses, I try to instill in them the idea of trial and error – having the confidence to take risks, to fail, but then to reflect, learn and return to the original challenge. But my particular interest in getting away from expecting a direct route to solutions, is my experience of the importance of a b-word – balance.

I invite young entrepreneurs to look at a variety of routes to achieving success, even though it may feel less comfortable than choosing what appears to be a direct route to the next stage in the development of their business. The ‘right way’ is surprisingly often about pursuing more than one route and being prepared to flip from one to another as situations change – balancing alternative solutions.

As the person trying to support the decision-making of others, I’m aware it’s a fine line between helping them make an informed decision and (perhaps subconsciously) steering them in a particular direction. Working with a group, it’s a question of balancing top-down versus bottom-up ideas development, and in moving forward, it can be a matter of finding the balance between the ‘just do it’ and ‘fail to plan and you plan to fail’ approaches. Deciding to be indecisive can be liberating – try it!

Tim Harford’s TED Talk is at:  https://www.ted.com/talks/tim_harford/transcript?language=en

Eight tips for business start-ups    

Share your start-up ideas

You may be tempted to think your business idea is so clever that others will steal your idea as soon as they hear about it. Chances are your idea isn’t so unique, and you have more to gain from telling everyone who is prepared to listen than keeping your cards close to your chest. Unless you have a potentially patentable product, don’t waste time and money on protection – even with a patent you probably can’t afford to defend it. https://youngfoundation.org/social-innovation-investment/social-enterprise-mistakes-worrying-that-someone-will-steal-your-idea/

Consider a lean start-up

We talk about finishing a business plan before launching a business to lay solid foundations to give the business the best chance of success. In reality, a business plan is never finished – it’s a promise not proof and sometimes waiting to ‘get it right’ is an excuse for doing nothing. Sometimes it’s good to jump in before all the details are worked out. At that ‘test trading/ piloting’ stage you’re doing real life market research and you’ll probably be more willing to make changes because the plan is less fixed and you’ve committed less time to it. https://enterpriseessentials.wordpress.com/2014/03/06/running-on-fumes-a-case-for-lean-business-start-up

Things always take longer than you want/ expect

When you’re fired up about your business idea, you don’t want to be told that it won’t develop as quickly as you’d like; that things won’t follow the time-line in your well-worked business plan. You’ll want to keep the momentum going but remember – your timetable is no one else’s. If you’re collaborating with others and depending on the support of partners who have less interest in your success than you do, you may have to be patient – they have their own timetables.

Passion is rarely enough

People are too eager to say that passion is all you need for starting a business (it certainly helps) and if you want it badly enough you’ll succeed. The latter is not true and sets up people to fail. Some business ideas and the people behind them have no chance of success and ‘managing expectations’, if not actually damping down their enthusiasm, is often kinder in the long run. That said, being proved wrong is always a delight! https://enterpriseessentials.wordpress.com/2013/10/27/lesson-1-roots-wings-and-balance

Be prepared to stop making products you want to sell and start making products that people want to buy.

The paying customers is (almost) always right – if they want it, make it. Business is business – don’t let your personal views stop a sale (unless it’s a commission that simply won’t work).

If you’re making products, you’ll probably take pride in your creation having spent a lot of time and effort in the process. But you have to let go – in business you must be prepared to sell your favourite pieces, even to people who don’t appreciated your talent. You may also have to compromise your standards and at times; accept ‘good enough’ to operate competitively. https://enterpriseessentials.wordpress.com/2015/11/25/the-paying-customer-is-always-right

Keep it simple and limit choice

Whether it’s pricing and discounts / membership processes and application forms / product and service ranges, keep it simple. You shouldn’t need a degree to work out the price of an item after taking off the discount, adding delivery and VAT etc. It’s also proven that limiting choice will result in higher overall sales. So, don’t display 15 different ‘bespoke’ mirrors – put 5 in the spotlight and keep 10 under the counter.

The ‘right way’ is rarely clear cut

‘Getting it right’ is usually a question of balancing different options. Whether it’s balancing social and financial objectives, pricing for affordability vs pricing for viability, and balancing quality against cost-effective production, there’s usually a judgement to be made. Making 150 bird boxes is good for business but not for the wellbeing of workers who want to be creative.

You can’t run a business on fresh air and goodwill

You can go a long way by appealing to your friends and family and tapping into the time and expertise of volunteers – there’s a lot of free support and advice around, particularly for start-ups. But sustaining a functioning business in the longer term, is likely to need at least some paid staff input. A contract of employment is important for underpinning commitment and reliability.

For more start-up lessons go to https://enterpriseessentials.wordpress.com/category/learning-about-earning

 

Drown your puppies

no-dogs-allowedIf you’re familiar with the Boston Matrix (a marketing tool not a Hollywood blockbuster) you’ll also probably know the term ‘dogs’. These are activities that are not making money nor contributing to the mission of the organisation being assessed.

If you identify any ‘dogs’ in your organisation the advice is to drop this activity or, as some put it more provocatively, ‘drown your puppies’.

The beauty of this particular phrase is that it grabs the reader’s attention (whether or not you’re a puppy-lover) and it also encapsulates the truth that organisations often have pet projects that are kept alive, often by the people who created them, for emotional reasons. Blind to evidence that an activity has become a waste of time and money (it may always have been so) charities are probably more guilty than the average for-profit business of getting their head and heart balance wrong. Smaller charities are particularly good at ‘flogging dead horses’ (another brutal animal image!)

For social enterprises – businesses with a social purpose – success is often defined as achieving the ‘triple bottom line’ of social, financial and environmental objectives. This makes the identification of ‘dogs’ more difficult because the activity may be justified for non-financial reasons. At the Repair Shed in Hemel Hempstead, where men aged 50+ come together to stay healthier and happier for longer through making, mending and learning, we’re dealing with ‘pet project issues’ of a different kind.

As readers of a recent blog may remember, the making part of Repair Shed members’ activity has to date largely involved using reclaimed timber to make products for homes and gardens. I think some of us have surprised ourselves with the quality of the work we’ve turned out – I know I have – pleased with the result and… reluctant to see it offered for sale.

Objectively, the Repair Shed should be trying to sell as many products as possible – to make money, create more storage space, and to save more timber from becoming waste. Subjectively however, perhaps we’re worried others might not be as proud to own the products as we were to make them. So there are mixed feelings when a project that people have been working on is sold – because making it again will never generate the same sense of achievement. The silver lining is that if your creation remains unsold, you can always take it home and show if off to friends and family who will appreciate it (or say they do).

It must be the same when starting out on any creative journey. In retirement, my friend Carl has taken up painting. This year he bravely submitted two pieces to our annual art exhibition and put a £60 price tag on each of them. Much to his surprise he sold one of them but, excited though he was, he couldn’t disguise his relief that the ‘right’ painting (ie the one in which he’d invested less time) had been bought.

It’s a tough lesson – if you want to succeed in a creative business you must be prepared to let go of your best work and risk it being under-valued.

A related blog – The paying customer is always right – is at https://enterpriseessentials.wordpress.com/2015/11/25/the-paying-customer-is-always-right

More on the Boston Matrix at http://www.oxlearn.com/arg_Marketing-Resources-The-Boston-Matrix_11_35

An A – Z of social entrepreneurship: A – D

As a contribution to Global Entrepreneurship Week (17 – 23 November) Chris Lee blogs his personal and highly selective reflections on what increases the effectiveness of social entrepreneurship to mobilise resources of all kinds for positive change and social impact in and beyond local communities.

A – Accountability

Even when you’re spending your own money you’re not truly free to behave as you might wish. You have a responsibility to guard against your actions having a negative impact and to be aware that a poorly executed plan may harm the credibility of those who follow you. When you’re working with vulnerable people, as clients or employees, their welfare should also be your concern.

 B – Balance

Rarely are there right and wrong ways of doings things, even when applying a proven model in a new situation. For all the online advice and training manuals, social entrepreneurship is about testing new and different ways to bring positive change in society and seeing ever obstacle as a new opportunity. Ultimately the ‘right way’ is likely to be a compromise – balancing conflicting needs and interests.

 C – Collaboration

It’s too easy to stereotype entrepreneurship as being competitive (and aggressive if you believe ‘The Apprentice’…) and social entrepreneurship as being about collaboration. In reality, entrepreneurs of all varieties know the value of networking and building mutually-beneficial alliances with others. Indeed, with growing need and shrinking resources, partnership may be the only answer in some cases!

 D – Decision-making and democracy

When asked, four years on, why he’d not consulted the community when setting up a (very successful) social enterprise, the entrepreneur replied “They’d still be trying to decide what to call it if I had.”  

Consultation and involvement are our watchwords, but they can make decision-making more cumbersome. Business decision-making tends to be more streamlined. But, ultimately, which brings better decisions?

Learning about Earning: 10 lessons from a social enterprise start-up

After 12 years advising others about starting social enterprises, Chris Lee has spent the last 12 months setting up an environmental social enterprise in Hertfordshire, with the support of the School for Social Entrepreneurs in Ipswich. The Repair Shed brings older men together to stay healthier and happier for longer by making, mending and learning. Details at https://enterpriseessentials.wordpress.com/the-repair-shed

Below Chris draws out ten lessons (2 per blog post) from the past 12 months and compares what the social enterprise start-up handbook says with his own experience.  In reality, there are no hard and fast rules – no right and wrong ways to do things, rather a series of balancing acts…

Lessons 1 and 2

 Social vs enterprise

What is social enterprise? A clue in the phrase:  Social – Enterprise but there’s no one agreed  definition.

Not a legal entity, but a business model. Social enterprise can be seen as a ‘business solutions to social problems’. Social purpose is the ‘reason for being’, while profit fuels the journey but is not the destination.

In common with other businesses… a social enterprise seeks to address the ‘triple bottom line’ addressing social, financial and environmental objectives  – getting the balance right is a constant challenge eg costing and pricing to be inclusive/affordable and viable.

Above all it’s about clarity of purpose to avoid mission drift. Gina Negus of the Projects Company in Essex) asks … is your organisation a train? – on track with a destination ahead (2- 3 years?) clear to everyone travelling in the same direction. Drawing in resources to fuel the journey, but in control (in the driving seat) with your foot on the pedal to travel at the right speed for you.

Spin vs substance

My opinion – social enterprise and social entrepreneurship is over-sold.  I’m a social enterprise enthusiast, but it’s all too easy to believe the hype and cast the private sector as the villain and social enterprises as the answer we’ve all been waiting for to treat society’s ills.

Reality, of course, is much more complex – there are good and bad private sector and social enterprise businesses, and both may have social impact. And scale if also important. Until we make enough difference to enough people, we should resist the temptation to over-egg the pudding. Holding the moral high ground is not enough. More at http://bit.ly/1qxU7rV

The same goes for sanctifying social entrepreneurs as edgy and dynamic (often scarily young!) saviours of the world. The social enterprise movement has no monopoly on entrepreneurship and social impact. In my experience the most entrepreneurial people are too busy getting on developing their next idea than to have time to shout about it! More at  http://bit.ly/1q2FZYT

In my opinion, the best way we can ‘sell’ the social enterprise model is by providing quality products, services and practices – selling on quality (not cheapness or charity as some in the sector are tempted to do…) For examples of three social enterprises that ooze quality, go to the ‘experts by experience’ profile at http://bit.ly/WujgYy

Two final tips on grounding your promotion of all things social enterprise in reality: Think carefully about what the name of your enterprise says about you http://bit.ly/1qtgLC1 – your brand – and don’t be afraid to tell the story behind your products and services http://bit.ly/1tCTIqQ

If you’re interested in exploring ways to turn ideas into action, join Chris Lee for a day-long workshop on December 4 in Chelmsford Details at www.voluntarysectortraining.org.uk/courses/event/70/Ideas-Into-Action

The double shift of the start-up entrepreneur

If you’re starting a new enterprise, are you clear about the difference between working ‘on the business’ and working ‘in the business’?

This has been a hot topic at our problem-solving action learning set sessions at the Lloyds Bank Start-up programme at the School for Social Entrepreneurs in Ipswich. It manifests itself in different challenges.

Since few people have the luxury of working full time on their start-up business, there’s the division of time and energy on the paid-for work and on developing the would-be enterprise. Assuming we’re talking about a six or seven day working week, you’ll find that social enterprise development is worryingly-often squeezed into evenings and weekends (to compete with childcare and other domestic duties). Commitment to make the world a better place can make us the hardest of taskmasters.

The two areas of work may be quite separate or complementary. On the face of it, having overlapping areas of paid and unpaid work may seem like a good thing – working in one domain helping the other – but this brings with it other issues. What if, down the line, you hope your current clients will buy from your new social enterprise? Or maybe your current employer/line manager might be a future customer or competitor? Murmurs about conflicts of interest and accusations of double-dealing, however unjustified, may circulate.

And if you’re starting a business and need to go looking for a part-time job to pay the bills, another issue is whether recruiters think you’ll be using their time to develop your start-up. The interview panel could never admit to such discrimination but the unspoken suspicion may remain and harm your chances of getting a job offer. One answer is not to mention your ‘other business’ (could be tricky…) but if you do, how do you convince the would-be employers of complete separation between the two ‘shifts’?

The core of the discussion is about how soon you might expect to take money out of the business to pay yourself and, ultimately, be able to leave the financial security of your current employment. Unless you have unlimited savings (and even this is not without its problems…) or a start-up subsidy of some kind, you may have to work the double-shift – bill-paying work and business-development – for years rather than months.

In a great blog about start-up for social entrepreneurs, Lynn Sarafinn suggests that seeing your company’s income as your salary is a mistake “You are one part of the ‘machine’ that makes your business work. You are not an employee but the CEO; you have to steer and nurture the business. The income from the business is for the company first. Your salary might not come for a long time.”

Another issue for me (and perhaps others?) is that I find working ‘in the business’ much more fun than some of the necessary drudge associated with developing it. I’m setting up The Repair Shed because I would have loved to have had something like it around when I was unemployed.

IMG_5073I love making stuff (and now call it ‘product development’!) I’ve just finished making a second product – a patio palletable (see photo) – having just sold one of our first, a pallet pub. When I’m designing and making furniture (it used to be beds, now it’s pallet furniture) I experience ‘flow’ – a total absorption in what I’m doing to the exclusion of everything else, including food and the passing of time. I simply don’t get that with any aspect of business development; the only other activities that give me a comparable mental state are cross-country running and singing in a choir.

I know I’m going to have to work until I drop; a career in the not-for-private-profit is not a route to later-life travel and golf, as many will know. The sooner I can get someone else to start a Repair Shed that I can join as a member, rather than an entrepreneur, the better.

Read Lynn Serafinn’s blog at http://bit.ly/VslZBh

Enterprise essential – balance money and mission

As a social enterprise, you’re expected to balance social, financial, and environmental objectives. This will involve particularly hard decisions in an economic downturn, such as how to keep vulnerable staff who may not be the most productive, and how to maintain quality as demand for services expands without the resources to match.