Sherry Cooper’s formula for success

Sherry Cooper (@DrSherryCooper) is TMX professor of financial economics at the DeGroote School of Business at McMaster University and former chief economist and executive vice-president at Bank of Montreal.

The key attributes of successful people are remarkably similar, regardless of their choice of fields. I am often asked by young people and their parents where the best opportunities are, as though success were determined by economic factors – the pursuit of a career in a growth sector. Instead, I believe that potential lies within the individual and is determined by a set of attributes and behaviours that can be applied to any field. Here is a list of the eight indispensable characteristics of successful people:

1. Passion is essential. Doing what you love is key to any successful endeavour. If you do what makes your heart sing, chances are you will be good at it. What’s more, passion is contagious and energizes those around you. Follow your dreams and dream big. Anything else is a cop-out, and forget about the money. If you follow your dreams, the money will come. 

2. Energy is closely linked to passion. Doing something you love gives you the energy required to achieve your goals. It takes hard work – very hard work – to shine in today’s complex and volatile world. The willingness to put in the 10,000 hours required to master a skill, any skill, is essential. That includes the ability to write, speak, engage and motivate – all essential to reach your full potential. 

3. Perseverance is the difference between mediocrity and success. No one achieves anything meaningful without hitting roadblocks, experiencing failures and overcoming adversity. Indeed, these disappointments and difficulties hone your skills and redirect your energies. All failures must be seen as opportunities to reroute and reinvent. That is a winner’s mentality. Never give up and never let naysayers defeat you. Unfortunately, there will always be people who question your judgment and criticize your decisions. You can listen, but let it roll off you. Believe in yourself. 

4 . A willingness to surround yourself with positive people who make you feel good, and dispose of destructive and dysfunctional relationships. That includes bad work relationships. If your boss is unsupportive and demeaning, get out. You will never succeed under such a negative force. 

5. Focus is essential. It is what psychologists call being in the flow. Any real achievement requires hours of uninterrupted concentration, which is increasingly difficult with the constant bombardment of e-mail. Anything worth doing is worth doing singlemindedly, which is the antithesis of today’s multitasking ethos. 

6. Efficacy – the power or capacity to produce a desired effect – is crucial to your well-being. Take ownership of your power. You determine your destiny, not your biography. Regardless of your circumstances, you and you alone can make things happen. The defining factor in success is not resources, but resourcefulness. Passivity is the antithesis of resourcefulness. 

7. The determination to push yourself. Take the stretch assignment or, as Facebook chief operating officer Sheryl Sandberg says, Lean In. Move outside your comfort zone; it is the only way to learn, and lifelong learning is crucial. The body of knowledge is growing so rapidly that anyone wishing to succeed must keep reading, adapting and learning new skills. 

8. Innovation. Creativity is the essence of meeting competitive pressures. Anyone who remains the same is falling behind as the pace of change is relentless. As Charles Darwin said: “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” Yet most of us do not like change, which lets those who embrace change stand out and rise to the top.

Traits of a Motivated Leader

If there is one trait that virtually all effective leaders have, it is motivation – a variety of self-management whereby we mobilize our positive emotions to drive us toward our goals. Motivated leaders are driven to achieve beyond expectations – their own and everyone else’s. The key word here is achieve.

Plenty of people are motivated by external factors, such as a big salary or the status that comes from having an impressive title or being part of a prestigious company. By contrast, those with leadership potential are motivated by a deeply embedded desire to achieve for the sake of achievement.

If you are looking for leaders, how can you identify people who are motivated by the drive to achieve rather than by external rewards?

The first sign is a passion for the work itself. Such people seek out creative challenges, love to learn, and take great pride in a job well done. They also display an unflagging energy to do things better. People with such energy often seem restless with the status quo.

They are also eager to explore new approaches to their work. A cosmetics company manager, for example, was frustrated that he had to wait two weeks to get sales results from people in the field. He finally tracked down an automated phone system that would remind each of his salespeople at 5 pm every day to punch in their number to show how many calls and sales they had made. The system shortened the feedback time on sales results from weeks to hours.

That story illustrates two other common traits of people who are driven to achieve: they are forever raising the performance bar, and they like to keep score.

Take the performance bar first. During performance reviews, people with high levels of motivation might ask to be “stretched” or challenged by their superiors. Of course, an employee who combines self-awareness with internal motivation will recognize her limits, but she won’t settle for objectives that seem too easy to fulfill. And it follows naturally that people who are driven to do better also want a way of tracking progress – their own, their team’s, and their company’s.

Whereas people with low achievement motivation are often fuzzy about results, those with high achievement motivation often keep score by tracking such hard measures as profitability or market share. Interestingly, people with high motivation remain optimistic even when the score is against them. In such cases, self-regulation combines with achievement motivation to overcome the frustration and depression that come after a setback or failure.

Daniel GolemanInfluencer

Are Your Employees Connected To A Common Good?

They should be. A new study reveals the value in unifying around goodness.

What do you think your employees really have in common?

If you're honest with yourself, the answer is likely that it’s not much beyond an interest in your company. That shouldn't come as a surprise since employees come from all walks of life. It's important to have diverse thinking and interests, but shared values and a common purpose are also a must to foster a cohesive community of people within the walls of an organization. Walk from the finance department to the marketing department, from sourcing to engineering and more, and you'll see the differences that exist. Even within a small company, departments can divide the whole if not anchored in the organization’s common purpose and operating values.

As a result of globalization, many companies have employees located in different cities, states, and even countries, allowing cultural differences to be magnified. Even as remote workspaces and mobile technologies allow for more physical separation, society as a whole is searching for ways to create unity around common and shared passions. A study released in 2013 shows that 37% of consumers and employees want to feel the unity that stems from local causes, 35% want to feel it nationally, and 28% globally. Humanity has a shared desire to unite our communities, our countries, and the people inside of companies.

Common good makes for good business.
Companies with a social conscience that act, innovate, and mobilize around social needs are no longer unique revolutionaries--they are part of the new normal. When executed well, the power of engaging employees in and around a common cause that's connected to the core business is a very powerful force for good for both the business and the world at large. We work alongside major corporations, social entrepreneurs, and nonprofits, and there is absolutely no shortage of inventive approaches to engaging in the common good. Ingenuity that connects the resources of a corporation to solutions that deliver an impact are plentiful, but at times we see corporations struggle around ways to clearly articulate a strategy that makes sense to stakeholders and key players.

Common good gives profits a greater purpose.
As part of our strategic work, I recently met the founders of Profits4Purpose, a technology business that helps companies create a united and simple giving platform. Their solution is built on the belief that there is power in connecting relationships and sharing experiences, and by empowering individuals through their platform, they help companies increase their social impact on the world. Profits4Purpose started their business to accelerate and simplify the process for businesses that want to engage their employees in social good.

Profits4Purpose uses a "match.com" model in which they connect employee interests with needs and opportunities in communities. They also empower employees to create personal-interest groups that others can join. The platform enables companies to create a customized workplace giving destination, providing employees with personalized giving schedules (and personalized trust funds). They also provide tools that match employee interests and skills with local nonprofits and streamline all grant, sponsorship, and donation requests. Users receive access to a dashboard with thousands of volunteer opportunities, the ability to create personal giving foundations, and activity walls displaying the impact being made in real time--all delivered with a simple approach to creating relational and innovative common wealth.

Recently, Staples partnered with Profits4Purpose to offer their employees a voice as to where corporate donations are shared. Through their platform, Staples employees see their impact on a local and global level. In a company that is 100,000 strong, the unified voice rings loudly. 

Mobilize your employees for the common good.
If you look at the world of business today, it seems that most organizations fall into one of the following groups: those that have seamlessly connected their business to a common good and a dedicated cause, such as Warby Parker, FEED, Toms Shoes, and Krochet Kids. And companies like Target, Whole Foods, and Southwest Airlines that have a foundation or a focus on social good that is directly linked back to the communities they serve. Then there are other companies that are actively giving back and helping to make a difference in the world--but are not inventive in how they connect their common good to their internal culture or consumer community.

Regardless of which group your company falls into, there's always an opportunity to connect and engage employees at a deeper level to ensure that the pursuit of the common good is driving common wealth. 

Connecting to the common good makes common sense.
It's clear that today’s emerging workforce wants to make more than a living, they want to make a difference--and this is especially true for employees between the ages of 20 and 35, who will contribute to the common good with or without the support of their employers. A technology platform like Profits4Purpose can help ensure that employees get the support they need from their employers to help make a positive impact on the world. 

Shawn Parr

Shawn Parr is the Guvner & CEO of Bulldog Drummond, an innovation and design consultancy headquartered in San Diego whose clients and partners have included Starbucks, Diageo, Jack in the Box, Taco Bell, Adidas, MTV, Nestle, Pinkberry, American Eagle Outfitters, Ideo, Sony, Virgin, Disney, Nike, Mattel, Heineken, Annie’s Homegrown, Kashi, The Michael J. Fox Foundation for Parkinson’s Research, CleanWell, The Honest Kitchen, and World Vision.

New Insights into the Correlation Between CSR and Brand Strength, SB’13

Posted by Cynthia Figge

Cynthia Figge’s SB’13 Plenary speech “New Insights into the Correlation Between CSR and Brand Strength”  

Hello! I’m so grateful to be meeting with all of you, and celebrating my 7^th year at SB sinceWhy are we all here? Because we believe that a company that invests in sustainability increases its brand value, right? I’m going to unveil some research that proves the relationship between brand and CSR is even more profound than we thought — around the world, across industry type, and company size.

Even more exciting, last year, that correlation more than doubled in strength.
My company, CSRHub, the world’s largest aggregator of global CSR information, ran five years of our data against the data of Brand Finance, the global brand analyst headquartered in London.

With our overlapping datasets, we analyzed over 1,000 companies, and  for 2012 we got a .28 correlation between brand strength and CSR. This seemed extraordinary.
So we tested the data. My co-founder at CSRHub is a self-admitted geek with degrees in physics and astronomy, and a Harvard MBA (where we met) and he knows his regression. He looked at F values. He split the data in two groups. Tested the combined effect of outliers. He tested for spurious relationships. He ran regressions with third factors such as enterprise value and market cap. Over all these trials, the correlation holds. 28% of brand strength is related to CSR performance.

Let’s dig in and discover which CSR factors may be driving brand strength.

We looked at each of the twelve factors in CSRHub’s model. This chart is ranked by the four categories employees, environment, community and governance. Look closely at the subcategories in light blue. One of the highest correlations is between brand and Environment Policy and Reporting. This is not at all surprising given the environmental crisis – and companies tend to communicate about this in their sustainability reports. They also tend to communicate about products and leadership ethics, the two bottom blue stripes.  But the highest correlated subcategories are all employee issues. Employee engagement and word of mouth seem to be extremely important in creating brand value.

Most astonishing to us was our analysis over time. When we looked back over five years of data, this is what we found:

Brand strength to CSR correlation has suddenly strengthened in the last year, doubling in 2012 over 2011. The relationship stayed relatively constant over the previous 4 years. Then in 2012 that correlation more than doubled.

Why? Perhaps we are reaching critical mass. Consumers are more aware of sustainability. It’s been in the press more. More sustainability websites like CSRHub are out there. NGOs are talking more about the role of corporations in their success. My son just graduated from college and he takes sustainability as a driver of business success for granted.
Why is this important?

You’re the one audience that really gets the implications of this data. CSRHub and Brand Finance have proved a deep link between CSR and brand strength. There is DRAMATIC ROI for sustainability. And that ROI is increasing rapidly. My take is that more companies see sustainability as the breakthrough platform for strategic advantage.  After strategic sustainability consulting for 17 years I believe we may be at the edge of big shift.

Cynthia Figge is a forerunner, thought leader and speaker on the corporate sustainability movement. As the co-founder and COO of CSRHub, Cynthia’s team provides free corporate sustainability ratings on over 7,300 publicly-traded and private companies worldwide. In addition to CSRHub, Cynthia is the co-founder of EKOS International, one of the first consultancies to integrate sustainability and corporate strategy. She has crafted corporate sustainability strategies for a host of major organizations, including BNSF, Boeing, Coca-Cola, Dow Jones, and REI. Cynthia also serves as an advisor to SNS Future in Review, Board Director of Compassionate Action Network, and served as President of the Board of Sustainable Seattle. She has an MBA from Harvard Business School. Prior speaking engagements in corporate responsibility have included SRI Basecamp, Future in Review, Sustainable Brands, and SRI in the Rockies.

Why product strategy is key to innovation and new markets

Want to be a leader in sustainability? Start focusing on your product or service. 

 You're in business because your product or service delivers what your customers need. And a sustainable product strategy gives your customers the opportunity to reduce their impact through the purchase and use of sustainable products. That said, making the transition away from traditional products takes patience, perseverance and organizational buy-in.

Perhaps your organization's corporate sustainability evolution began with reporting and tracking metrics such as safety incidents or environmental violations. From there, you saw opportunities to drive operational efficiency and cut costs through initiatives like reducing fuel consumption by switching to electric or hybrid vehicles. A sustainable product strategy is a logical next step in the organizational evolution of corporate sustainability programs and has the potential to provide a huge upside.

A recent survey found that 32 percent of CFOs anticipate that over the next few years, about five percent of annual revenue growth will come from products and services that reduce environmental and social impacts. For instance, Dow Chemical's investment in sustainable product development to help customers address environmental challenges is projected to be a $350 billion market opportunity. While companies might see entering this market as a risk, we see it as an area of opportunity that is not as difficult as some might think.

For example, ThyssenKrupp Elevator Americas (TKE) understands that its industry is full of products that require regular maintenance and updating to keep riders safe and comply with regulations. The constant use of its products causes significant wear and tear. Therefore, TKE developed a suite of products called Modernization that allow building owners to choose the parts they need to repair their existing elevators without purchasing an entirely new elevator.

Furthermore, these Modernization products are more efficient, reliable and durable, so they can extend the elevator's life over a longer period of time with less maintenance. TKE has also developed a line of sustainable products that lowers energy costs, reduces power consumption by eliminating the use of a motor generator, and captures and reuses energy through advanced regenerative drive technology. Again, these products extend the elevator's life but they also reduce travel time for riders, reduce noise inside the cab and increase the overall ride quality.

Making a leap from operational efficiencies to sustainable product design requires a change in the way you view your company's products and services. It is an opportunity to see what you already do in a new light but also see the potential for further innovation and leadership. There are two distinct paths that you could take if you decide to make this leap from traditional to sustainable products and services.

1. Recognize the sustainability attributes inherent within current products and services.
Many companies do not see the sustainable attributes of their products. This is often due to being too close to those goods or having an outdated perspective. Once a company looks at its own products with an eye for where the environmental and social benefits are, it's often surprised at what it finds.

The Davey Tree Expert Co., a professional tree care and landscaping company (and a BrownFlynn client), is early in its sustainability journey and has been focused on operational efficiencies. Initially, Davey was hesitant to promote its products and services as sustainable -- even though a large part of its business is based on the preservation of trees and vegetation - because it was afraid of greenwashing. The best way to ensure environmental claims are trustworthy is to use research and analysis like a lifecycle assessment (LCA) to back it up.

A number of companies out there are highlighting the sustainable attributes of current products. A great example is Salesforce, which came out with its first sustainability report earlier this year, proclaiming that its cloud computing platform produced less carbon than a traditional client server IT environment by 95 percent. Salesforce's aim here is to show customers that using its platform will help them reduce energy consumption and achieve sustainability goals.

2. Redesigning with sustainability in mind
Redesigning products using sustainability as a lens for development is evident of true leadership in this space. Nike's Considered Design initiative enabled the company to recycle 82 million plastic bottles into high-performance sportswear and increase the use of environmentally preferred materials by 20 percent. The initiative resulted in additional operational efficiency success such as reducing waste by 19 percent in its footwear business, and achieving a 95 percent reduction in volatile compounds. These activities have never been seen before in the footwear category, showing how sustainability is a tool for innovation and differentiation in the marketplace.

Making the decision to move from traditional products and services to thinking and designing in a more sustainable way will help companies secure a place in the market for years to come. A sustainable product strategy boosts reputation and credibility amongst peers and customers. It opens up doors for new customers and opportunities not yet realized. To become a truly sustainable enterprise, offering a sustainable product or service is the final evolution.

Sara Kennedy is an analyst with BrownFlynn, working on sustainability strategies that drive business value.

Marissa Beechuck is an associate consultant and marketing manager for BrownFlynn, serving clients in a number of industries while managing the firm’s brand and social media presence.

Why It's So Hard to Turn Fickle Millennials Into Leaders

In an era of job hopping and fast rises, how do you turn young talent into leadership?

Among the starkest data points in Deloitte's 2014 Global Human Capital Trends report is this one: About two-thirds of companies around the world consider themselves weak in developing millennial leadership. Meanwhile, only 5 percent of companies rated themselves as "excellent" in that field.

The data comes on the heels of other reports showing trouble in leadership development programs. Among those findings: Companies are hurting themselves by failing to differentiate between high-performance and high-potential employees, and though they recognize the importance of talent development they're not putting their money where their mouth is by investing in development programs. 

If You Don't Develop Them, You'll Lose Them

Part of the trouble with developing young talent, Deloitte analyst Josh Bersin tells Inc., is that generally speaking, millennials approach their careers very differently than previous generations. They expect to rise fast, and if they can't, they look for other opportunities.

Bersin's assertion is backed up by separate data showing that just 23 percent of disengaged high-potential employees aim to stick around at their jobs, and only 55 percent of millennials say they are loyal to their companies (compared to 69 percent of other generations).

This makes it important, Bersin says, for companies to find ways to help young talent see the opportunities within their companies. He offered a few of strategies.

1. They want face time. Spending time with senior leadership is one way to convince employees that they, too, could eventually rise to that level. Bersin suggests a program wherein high-potential employees are given projects to work on for a while--maybe a quarter, maybe six months, maybe a year. Once complete, they present the results to senior leadership team or the CEO. Not only does this allow leadership to better get to know and evaluate its best and brightest young talent, it also empowers that talent by putting them at the helm of a project.

The idea mirrors a practice at logistics company EMKAY, wherein middle managers across the organization are partnered up with members of the executive team to work on projects over the course of the year. Not only does this apply a gangbusters approach to solving problems across the entire organization, it also helps senior leadership get a sense for who among middle management might eventually make for C-suite material.

2. They want to jump around. Millennials in the business world are fickle. They want to explore new opportunities far more quickly than past generations. Those opportunities, however, might be found in your company. Bersin sited one company that saw its young talent consistently leaving after about 10 months on the job. So the company created a new site that mapped out potential career paths for employees within the organization, and let them access it after nine months on the job--giving them access to openings across the entire company. The company saw its turnover rate plummet.

Bersin says millennials value the opportunity to move around organizations--not just for promotions, but also horizontally. An employee who spends a year in sales might appreciate the opportunity to work in a different department for a while if their skills are a fit. And if that employee has leadership potential, it's all the more valuable to the organization to give them a better-rounded look at the company.

3. They need a different type of manager. One obstacle to bouncing employees around, however, might be their managers. For much of corporate history, managers have been judged on their ability to hit departmental goals and objectives--so it doesn't behoove them to see the talent that helps them reach those goals move in to other positions.

Bersin says organizations need to shift the mindset of what a good manager does away from hitting those departmental goals--which rely on what he calls talent consumption (or, put less kindly, talent hoarding)--to graduating employees into better positions--or talent production. That shift would serve to give companies a better sense for their managers' talent development skills while giving young talent the opportunity to grow.

BY Adam Vaccaro

The Difference Between Successful and Very Successful People

I recently met with a capable and driven executive and asked him, “How are you?” He gave me a rapid-fire answer of all of the things he was doing: travelling, business updates, career changes and his children’s innumerable activities. It sounded like an intense but satisfying life.

Then I asked him again, “How are you really?” And the moment I did, he became emotional and the reality of his life just flooded out of him: his stress, his frustration of trying to juggle it all, his sense that he had no time to really think, or play with his children or enjoy any of it. The (cute) summary is this: his schedule was always filled but his life wasn’t fulfilled. What is less cute is the idea that he, and many of us, have been sold a bill of goods.

We’ve been sold on a heroic ideal of the uber-man and super-women who kill themselves saying yes to everyone, sleeping four hours a night and straining to fit everything in. How often have you heard people say, “I am so busy right now!” But it almost seemed like a back-door brag.

But it’s a bogus badge of honor. It suffocates our ability to think and create. It holds otherwise hard working, capable people back from our highest contribution. Below are a few of the myths of success that hold us back from becoming very successful.

Myth 1: Successful people say, "If I can fit it in, I should fit it in."
Truth: Very successful people are absurdly selective.
As Warren Buffet is credited with having said, “The difference between successful people and very successful people is that very successful people say no to almost everything.”

As I wrote in a piece for Harvard Business Review, this means, "Not just haphazardly saying no, but purposefully, deliberately, and strategically eliminating the nonessentials. Not just once a year as part of a planning meeting, but constantly reducing, focusing and simplifying. Not just getting rid of the obvious time wasters, but being willing to cut out really terrific opportunities as well. Few appear to have the courage to live this principle, which may be why it differentiates successful people and organizations from the very successful ones."

Myth 2: Successful people sleep four hours a night.
Truth: Very successful people rest well so they can be at peak performance.
In K. Anders Ericsson's famous study of violinists, popularized by Malcolm Gladwell as the "10,000 hour rule," Anders found that the best violinists spent more time practicing than the merely good students. What is less well known is that the second most important factor differentiating the best violinists from the good ones was actually sleep. The best violinists averaged 8.6 hours of sleep in every 24 hour period.

Myth 3: Successful people think play is a waste of time.
Truth: Very successful people see play as essential for creativity.
Just think of Sir Ken Robinson, who has made the study of creativity in school's his life's work. He has observed that instead of fueling creativity through play, schools actually kill it: "We have sold ourselves into a fast-food model of education, and it's impoverishing our spirit and our energies as much as fast food is depleting our physical bodies. Imagination is the source of every form of human achievement."

Myth 4: Successful people are the first ones to jump in with an answer.
Truth: Very successful people are powerful listeners.
As the saying goes, the people who talk the most don't always have the most to say. Powerful listeners get to the real story. They find the signal in the sound. They listen to what is not being said.

Myth 5: Successful people focus on what the competition is doing.
Truth: Very successful people focus on what they can do better.
The "winningest coach in America" is Larry Gelwix, the former Head of the Highland High School rugby team. His team won 418 games with only 10 losses in over 36 years. One of the key questions he challenged his players to ask was “What’s important now?" He didn't want his players getting distracted with what the other team was doing. He wanted them to play their own game.

Last week I took a tour of the Kennedy Presidential Library in Boston, Massachusetts. One of the quotes there grabbed my attention. John F. Kennedy said, "The great enemy of the truth is very often not the lie, deliberate, contrived and dishonest, but the myth, persistent, persuasive and unrealistic."

The myth here is celebrated in modern culture: it’s someone who is capable, driven and wants to win and be popular. They have been rewarded for their willingness to take it all on, fit it all in and just make it happen. They believe doing more is better than doing less. I call this type of person a Nonessentialist.

Still, there is a new hero in our story. She asks, “What is essential?” and is willing to eliminate everything else. He says no to the less important activities so they can give themselves fully to the few things that really matter. It is a path that takes courage. It may require making the tradeoff between short-term popularity and long-term respect. It leads to a greater sense of control and even joy. But as an added benefit it also seems to be the thing that distinguishes the successful from the very successful.

Managing cashflow: get more bang for your startup buck

A common error for fledgling businesses is to get bogged down by branding and marketing costs, says James Caan

 

It may be difficult to see where your money would be best placed at the startup phase. 

 

Getting the finance to start your business is often seen as the biggest obstacle to starting up. But what is even more significant than accessing those initial funds is how to make your money go a long way. Sometimes it is difficult to see where your money will be best utilised, particularly at the start-up phase of any business. This is all the more important when you are invariably bootstrapping, putting some of your personal savings towards your venture to keep your business developing. So how can you get your money to make you money?

In the first six months of 2013, the UK's startup activity was up by 3.4% on 2012, with more than 90,000 new ventures. With this rate of business creation in the UK, it is inevitable that many will fail. To avoid this, you need to steer clear of making big financial mistakes, because there is nothing worse than your business losing more money than is necessary. As I have always said, if you're going to fail, you should do it quickly. Failure can be a great lesson, but it should not destabilise any future ideas from coming into fruition because the financial cut is so deep.

Today 49% of small business owners say they started up with less than £2,000, a seemingly astonishing feat. But there are clear ways you can avoid extra costs. A big one is not hiring until you are ready, employees are one of the biggest costs in any new business. That being said, there is no doubt that they will be the ones who in the future can drive your business forward, but you must be able to justify new hires, especially at the early stages of a business. Bringing on board people you do not greatly require is an expensive problem, so you may want to consider hiring part-time support or sub-contractors, depending on the demands of your startup. And although admin work can be exhausting, juggling it along with other aspects of the business can help to make you a more dynamic entrepreneur and help round your skillset.

Do not underestimate the time it takes to set up. Starting a business will always take up more time than you will have imagined, and cost more than you would like it to. For these reasons you have to be flexible, and should not drain your resources too soon. With human error, slow vendors, changes to technology and extenuating circumstances – both personal and professional – not everything will go perfectly to plan. This is why you must be more tactful and cautious with spending, so that when you have to compromise on timing, you have a cushion of support.

A common error for startups is to get bogged down in branding and marketing costs. It is unbelievable just how much you can promote your business at little cost. Social media platforms such as Twitter, Instagram and Facebook are brilliant ways to engage potential customers, and SEO is a valuable and free content-based tool to get your business noticed. Of course, the cost of your time is valuable, but spending money on expensive branding companies can harm your resources, particularly as a new venture when your direction is evolving and most susceptible to change. Wait until you have been trading for at least six months before heavily investing in the branding side of your business. You will be in a much better position if you do.

Start-Up Loan recipient Karine Bono, a young fashion designer from London, understands the difficulty of starting up on a budget. With her £5,000 loan, Karine minimised expenses by producing all her garments and designs at her home studio in Hackney. By trading her clothes on Etsy, a popular clothing site, Karine is gaining exposure without breaking the bank, not spending too much on marketing but still benefitting from an online presence.

It is undeniable that new businesses have to find a way to manage their costs if they have any chance of survival. This is why the first sale is so important, and creating a profitable business is key. At the start be frugal and push yourself so you don't have to push others. After all, taking on challenges is what being an entrepreneur is all about.

James Caan is chairman of the Start-Up Loans Company. Each fortnight he tackles a different business issue for the Guardian Small Business Network. 

Never Be Smartest Person In The Room

GENERATING NEW REVENUE OPPORTUNITIES

In almost every organization in which I have been involved, ancillary business opportunities have often provided, what I describe as, "low hanging fruit" new revenue sources.

In most businesses, our primary focus is on the mainstream products and services our companies offer. These provide the bulk of any organization’s revenue growth. They are the mother nest business. We train our sales forces to doggedly pursue growth in these revenue centres. Our sales staff are rewarded on their success achieving their targets.  But what would happen if we stood back occasionally and looked objectively at our businesses  and analyzed the operations of our clients with the objective of identifying what else we could be doing with the assets we already have to provide additional products and services to the client. Allow the thought process to move in every direction in search for new opportunities. You might be amazed at the revenue opportunities that exist which require very little additional investment and could represent significant high margin business.

I have led the growth strategies for numerous organizations which provided products and services across a variety of verticals. It has been my experience that the following questions are universally applicable when identifying and prioritizing ancillary opportunities:

• Is there additional revenue being left on the table that should be ours?
• Are we already knocking on the door(s)? I recommend looking beyond just sales staff activity, examine all aspects of your operation. I recently was involved in discussions regarding a business services company that had staff entering the offices of over 30,000 small, medium and large businesses on a monthly basis fulfilling their services. This company was not in the delivery business but we did identify a number of opportunities where these service reps could be used to provide deliver services for other non-competitive companies. 
•  Is any additional investment minimal both in terms of money and human resources? 
•  Does the opportunity have the potential for synergies beyond just revenue? There may be circumstances where your organization can provide a service that may not directly generate revenue but strengthens your brand, competitive position, customer/client relationships or provides opportunities for you to generate new challenges for underutilized staff or management that you may be at risk of losing.

Based on my experience, following are some examples, taken from different industries, that you may find helpful.

 
1.  NEW MEDIA 

I was COO of a new-media company that provided products and services to the “enterprise software development” community. Their website was an intriguing example of ancillary revenue generation. Those who contributed content to the site were paid based on a fee schedule that had fixed and variable elements. The company broke their content into categories (articles, news posts, interviews etc.) established a core value on each category (the company established a fixed fee for each type of content based on degree of effort....e.g. an article was worth more than an interview etc.). They paid that set amount plus a variable amount based on views of the specific piece. They would generate approximately 150 new pieces of original content/topics monthly. 

Their content just kept getting better and more relevant because they could continually monitor its popularity and the contributors were motivated to keep abreast of what were popular topics because it was in their best interests to give the readers more of what they wanted. The company also aggressively tagged all content (probably 4-5 tags per topic). The tagging allowed for cross referencing to items for sale such as online books (most of these books were custom written just for their audience), lead generation assets etc. They could target advertisers or product/service providers based on readership patterns. Client products or ads would be posted on pages where articles or other content appeared that contained words or phrases tagged to their product or service offering.

The company also published e-books. E-book titles were selected based on an analysis of the traffic. Since the site had a B2B focus, the content of the books tended to be need-to-know information.  The writers that created the online editorial content were the authors of the books. Management tracked a given writer’s popularity with readers and because of their tagging and tracking they could identify which of the writer’s subject categories were most popular.  The writer would then be contracted to write a book on a specific topic. The books were then sold as e-books or they could be purchased in print through Amazon. Companies that sold products or services that were relevant or related to a book’s content were invited to sponsor the book if they wished. The sponsorship deal could take 2 forms. One form was for the sponsoring company to pay a sponsoring fee. The other arrangement would be for the company sponsoring the e-book to have it made available as a free download but the e-book customer was required to register for the download and the company sponsoring the e-book got the registration. The client company paid the site operator for the leads that were generated.

By exploiting every possible ancillary revenue opportunity. This company site generated several millions of dollars relying very little on traditional advertising revenue.


2. ADVERTISING - CONSUMER GOODS - AGRI-FOOD 
 
Consider consulting services as a potential revenue stream. I was a founding partner in a firm that provided marketing services to software companies. The main revenue generators for the company were creative services, call centre services, printing, event management, advertising and the production of various marketing assets. In an effort to differentiate ourselves we added a consulting practice.

Because we specialized in providing marketing services to software companies we decided to promote that we were experts in developing branding and marketing strategies for software organizations. We did not know that much about software but we had credibility in the eyes of the market segment we served and we knew about branding and marketing. Initially the consulting was positioned as a value-adding free service and was used to move the client a step closer to the revenue generating activities associated with marketing asset development. Eventually the consulting activity became popular and evolved into a successful revenue stream.
 
I am currently working with companies in the food and consumer packaged goods industries discussing and launching consulting practices as extensions of their conventional revenue streams.

 
3.  MEDIA

A. When I was running the Canadian acquisition program for US based media organization, I went through a due diligence process with a Canadian engineering firm that had an intriguing business model. 

Their engineering practice had been quite successful and they had projects in numerous locations globally. In the course of their activities, they were required to hire significant numbers of skilled, semi-skilled and unskilled labour and they faced a number of training related challenges. This labour force was spread out around Canada and the world. The available expertise to train new hires or to train existing hires in new techniques was limited. There were also language issues which further restricted the available trainer expertise. In order to resolve this problem they starting to create instructional videos that could be sued to teach the required skills and techniques.  

Eventually they began sharing these videos with suppliers and other non-competitive engineering firms. This training and development video activity eventually evolved into a revenue stream and their videos were in demand around the world. The training business helped them survive some very learn years for their engineering practice. When it came time for the owners to consider their exit strategy, it was the training business that was the most marketable business. Its revenues were in the millions and surpassed those of the engineering practice. Another major benefit was that the inventory of potential acquirers was no longer limited to engineering firms or engineering focused organizations but had now been expanded to include media companies which had a significant interest in expanding their training and development businesses.

B. When I was President of Canadian operations for a European based multinational media organization, we published close to 100 classified advertising magazines, directories and associated websites that provided businesses and consumers with product and/or industry  information on the IT sector, the automotive and transportation industries and real estate markets. These products and services were the market leaders.

A number of these publications and their websites were highly regarded sourcing tools or buying guides for consumers wanting to source a variety of automotive, general merchandise and real estate products.

The business model was very simple. Gather photos and data on used inventory from consumers and dealers and publish it in appropriate publication or post it on the appropriate website. Every week, thousands of products were advertised. The company maintained some of Canada's largest databases on vehicles and real estate.

My innovative staff in the Quebec operation identified a unique opportunity to generate additional revenue using this data that they were already collecting. The company negotiated with the government to be the government’s source of pricing data on used cars in the province. At that time, in Quebec, if you purchased a used car, when you went to the motor vehicle office to register the car and pay the sales tax, the government official would go a database to determine the “book” value of the vehicle and the tax would be based on that “book” value rather than the actual receipt received at time of purchase. Our Quebec operation convinced the government that they were the leading authorities on used car prices and their database should be the one referenced by the government. The agreed upon arrangement was that the government agency would have an exclusive online access to a database that was setup and administered specifically for the government. The online database was constantly updated and it was accessed daily by several Quebec government departments.

The revenue generated from this online data management arrangement was significant and the margin was impressive for the following reasons:

• The data used was already being collected due to the nature of my company's ongoing operations.
• There was very little additional administrative expense required to operate this ancillary business.
• The service was provided online so there were none of the usual publications costs involved.

Keeping in mind that this data was being used to determine the true market value of a used car or other vehicle, it was in the best interests of the used car dealers to ensure that whatever price they charged for the vehicle it was consistent with the price sourced by the government office when the buyer went to pay their sales tax. While the dealers could not have access to the actual online database, they were given the opportunity to subscribe to a service whereby each month they would receive a pricing directory which was basically a download of the database done every 30 days. Needless to say almost every used car dealer in Quebec subscribed to this print service. In addition and annual pricing directory was made available to consumers through retail stores.

Here was a case where the data was originally sold to my company by the consumer or used car dealer through the purchase of an ad. The data was then resold to the government and again to the dealer as well as the consumer. When you think of it, from the perspective of those consumers and dealers who paid to advertise their vehicles in our publications, they were in effect re-buying the same data they had originally paid to have advertised.

4. REAL ESTATE
 
The real estate market also provided another lucrative opportunity for my company.  We published approximately 24 real estate titles in Quebec. The primary advertisers were real estate agents selling residential properties. This site was the third most visited site in Quebec after MLS and, I believe, ReMax. The main reason for the site’s popularity was the nature of its content. The site advertised real estate from any agent or agency that wanted to advertise. Unlike most other sites, such as ReMax, our site was not restricted to carrying product being sold by one company. Consumers liked the site because they could search a large selection of real estate by visiting only one site.

The site attracted a large number of real estate agents of all sizes. Many of the real estate agents who advertised had limited, if any, web presence beyond their involvement with our site. While this was good for our business, we realized that eventually they would want to have their own web identity and when that happened they may reduce their commitment to our site. We therefore decided to offer web development and web hosting services to individual real estate agents.

This business had a lot of benefits for us.

• We managed to get additional revenue from the real estate professionals that we were already dealing with.
• We kept these agents “in the family” as we helped them develop their own web identities. This allowed us to continue to nurture existing relationships and identify value add opportunities.
• Even with their own websites, they tended to stay committed to us because we could constantly offer upgrades to their web capabilities that they could not afford to do independently.
• Their exposure on the site drove traffic to their own site but they liked the synergy of having their business exposed on both sites.
• This made good business sense to us because we already had made the investment in web development and hosting assets. To do this work for the agents was not a huge strain or require significant additional cost. The real estate professionals selected their web design from templates we had pre-designed and hosting requires very little administration or cost. It provided us with opportunities to better utilize existing staff or add new staff that we could not have rationalized based on just our internal requirements.
• The value adds we were providing solidified our customer relationships.
• We created additional revenue opportunities for sales staff.

5. EVENT MANAGEMENT 

I was head of business development for a market leading conference management organization which organized over 100 conferences per year. The attendees at their conferences were professionals mainly lawyers, investment bankers. While their events were well attended, they realized that in any given firm only 1 or 2 professionals would attend an event. Efforts to attract more attendees were unsuccessful.

The answer was to assemble the proceedings from each event into a publication. Wait a few weeks after the event was over and then make the publication available to others in firms that had sent a delegate to the event. The rationale was that those who attended the event would return to their offices and discuss the event. Ideally this would stimulate a demand for the information from the event. Delegates would be able to reap the benefits of the knowledge or information they acquired from the event for a week or two before the opportunity to acquire the proceedings was provided to their colleagues. The proceedings were sold to their colleagues at about half the price of the event. The only people eligible to buy the proceedings were members of firms that had sent a delegate to the actual event.

This strategy served a number of purposes:

• It re-purposed the proceedings providing the opportunity to generate revenue beyond the event itself. 

• The margin of the sale of the proceedings was high because the costs associated with preparing the publication were quite a bit less that organizing an event.

• The publication would be passed around within the respective firm and thus continue to promote not only the event but also the event organization. Basically the client was paying for the privilege to promote the event company. 

What new revenue opportunities are waiting for you? If I can be of any assistance please get in touch.

Richard Peters

President

Leader Logic Ltd.

richardpeters@leaderlogic.ca

Dick Peters is a senior executive who specializes in transforming businesses. In leadership and senior executive roles in the media, software, digital technology, finance and consumer packaged goods industries he has gained the reputation for designing and leading  successful  growth programs  reigniting under-performing organizations, maximizing existing business opportunities and taking organizations into new markets and revenue streams.