Techstars Transparent Results Page

I love the work Techstars have done in presenting the “live” status of their seed accelerator.

Check out this page on their site: http://www.techstars.org/results/

I can think of so many different funding bodies, such as government granting (Commercialisation Australia, for instance), that would benefit from such transparent data.

This would help with program accountability as well as in making informed decisions about applying.

In short, it increases the trustworthiness of the organisation. Visitors understand that (within the limits of how data may be manipulated), they are receiving a better representation of reality than they get from other sites.

As the Techstar guys put it: “When you’re betting your future on a seed accelerator, what really matters to you? Results.”

Well allocated, it helps you deliver returns that are outstanding. When leveraged appropriately you can magnify those returns even further.

But all capital is risk capital.

And capital has options – in terms of where it’s invested, the risk/return profile and the patience it demonstrates.

And capital is broader than you think.

Yes, there’s the obvious capital on the balance sheet, partly or fully paid, represented in assets or otherwise.

But Hidden Capital is just as valuable and often has even more options.

Hidden capital is the intellectual, trust, relationship and customer capital that is seldom reflected on the balance sheet.

• Hidden capital is the relationships your board members have.
• It’s in the secrets your sales staff keep close to their chests.
• It’s the way your receptionist greets and guides every caller, visitor and guest.
• It’s the intellectual and emotional strength, resilience and reasoning that sustains the organisation.
• It’s management’s talent depth so that one illness doesn’t wipe you out.
• It’s the speed at which new hires get up to speed, and can accelerate the performance of the company
• It’s the social fabric of the organisation, clients, suppliers, customers and competitors.
• It’s in the ideas, creativity, suggestions and initiatives that will guide and shape the future of the organisation.

It’s your job to maximise the value and return on all of this capital, too.

Simply because the company doesn’t strictly recognise all of these sources of capital doesn’t mean you don’t have a  responsibility to improve and generate a superior return here, too.

This is, often, code for getting the most out of people. But it’s more than that. Its about creating an environment where the natural drives, the intrinsic motivators and organisational climate allow this capital go grow and flourish.

Unlike “hard assets”, Hidden Capital can grown exponentially in value.

Literally one intervention with a staff member, positive or negative, can create or destroy value for years and years to come.

And that value can compound with one insight, phone call or change in policy.

What are your favourite was for identifying and growing the Hidden Capital in your organisation?

My job is to help you see what I see, from outside.

That’s why you need to move.

* I don’t know if that’s someone else’s quote, or whether it’s mine. Any help on attribution appreciated!

If you’re considering raising capital, going for growth or simply remaining competitive, you must have a handle on the strength of your management.

Strength has two components:

• Competence
• Depth

Competence

We’ll explore this theme in more depth over time, but the competence of management is interrelated with the strategy you have chosen.

In some instances you cannot change management. If that’s the case, management can be a limiting factor to the success of the enterprise.

Competence must span the core economic foundations of your business, including:

• Sales, Marketing and New Customer Relationships
• Operations, Production and Customer Support Relationships
• Financial & Value Management
• People & Talent Management
• Innovation, Technology & Change Management

The actual titles will vary depending upon the emphasis in your organisation, but the competence must be satisfactory in all areas.

Depth

Few organisations can rely solely on the top levels of management. Some depth of management competence is necessary to sustain the business, or go grow it beyond its current performance levels.

In smaller companies depth will be reflected in the breadth of actual work completed by an individual (for example). How far down in the organisation do you go before your necessary level of performance can no longer be found?

In larger organisations, how adequate is the succession plan to allow promotion of team members? Is there simply an outstanding marketing or financial leader who carries that area supported by a relatively mediocre (or weak) team.

An Action Exercise

Think about your company from an external perspective.
Imagine you are being visited by an potential investor who wants to rapidly understand both the competence and depth of your management, and whether or not that is a Key Risk in an investment.

1. Identify the economic foundations and functions of your business
2. Think about where the company is going and the pathways you need to follow to get there
3. Rate the current competence and depth of management
4. Identify the gaps
5. Plan to overcome those gaps.

If you need some help

Please feel free to get in touch, and I’ll help you out.

Few people have found The Three Princes of Serendip (Wikipedia) and understood its message.

Common usage allows us to say that serendipity is what happens when we’re looking for one thing, but find something better in the process.

The story of the princes is better.

It covers the serendipity of something ostensibly bad happening, but the end result being something good.

You lose your keys.
You lose your best client.
You fail an exam.

All of these events can seem bad, but good can come of it through serendipity.

You meet the love of your life on the bus.
You have the space to invent a “game changing” service.
You discover that a new course of study better fits your life.

This is more than looking for the silver lining.

In fact, it’s better to assume that there is no silver lining. What you need to do is to work through the pain, loss and issues that present and see how your life changes.

It’s the process of going through life, through the negative, embracing it (without wallowing in it) that keeps you open to other possibilities.

Serendipity isn’t something that can be forced or cajoled into happening. It only shows up when you show up.

So show up.

One of the first things that has my interest is in gathering information about who is out there doing smaller debt and equity transactions on a worldwide basis.

So, who do you know that regularly and professionally does deals in the range of $1m to $20m? These may be traditional funding rounds (seed/angel/series A and beyond), but may also be merger or acquisition advisers, or even business disposals.

I am not so interested in the traditional business broker, but understand at the lower end that it’s exactly what we’ll be talking about.

So, over to you!

In maps of old, unchartered territories were marked with dragons.

These dragons represented the perils of the unknown, the dread that the unexplored and unimaginable suggested.

Dragons on those maps had their purpose, of course. They scared away those who never wanted to go beyond their limits and they allowed those brave enough to venture across the waters to the riches and wealth that can lie on the other side side.

Every day you expect people around you to grow and develop.

Because you must venture to the other side to develop, you can help your team members, reports or family by identifying growth opportunities, and coaching them through new skill acquisition and on to higher performance. You can create an environment where they get to follow their instincts, and you can set them challenges that stretch them out of their comfort zones.

Getting out of the comfort zone is important. It helps encourage new behaviours and patterns of thinking. It reveals false assumptions, tests the ability to intellectually and emotionally engage with themselves and others, and provides the opportunity to explore new limits.

But, what if you give a development challenge that goes too far?

What if you force someone to confront a dragon?

You go too far if you set a marathon for someone who can only manage a short sprint.
You go too far if you take away the training wheels before someone is ready.

In short there are two ways in which you can force someone out of challenge, and straight to dragon territory:

• You sent a challenge that actually pushes them into overwhelm or sets them up for failure; or
• You fail to provide (or withdraw) support mechanisms needed to maintain challenge or recover from overwhelm.

Knowing where overwhelm lies matters most. And unless your very experienced or have a very strong relationship with your report, they won’t necessarily be able to tell you where the dragons are until it’s too late.

There is a thin line between challenge and overwhelm.

Understanding where that line is lets us define challenge.

In challenge we grow. We anticipate what’s coming, our senses are at their peak and we can often be in flow as we deal with what’s happening. We know to ask questions, to request feedback and are resilient in how we incorporate that feedback into our future activities.

In overwhelm we start to shut down. Sometimes fight or flight responses kick in, but mostly we find it safer to keep our heads down and out of harms way.

The 5 Levels of Development Challenge

In order to understand the danger and opportunities posed by the dragons, we’ve got to examine the five levels of development challenge:

• Comfort
• Challenge
• Overwhelm
• Failure
• Thar be dragons

Or, visually:

Five Levels of Development Challenge

Comfort

This one is easy. Some of us spend almost our entire lives here, barely experiencing challenge, sometimes forgetting the lessons of the past.

That’s not to say it’s worthless. Lots of important tasks and activities happen in comfort. It’s just that staying put here leads to stagnation.

Challenge

This is when you’re growing. That often means it hurts a bit, but the experiences you have and the things you bump into serve to teach you what you need to learn. Success and failure are both feedback. Both can spur you on to higher activities and lead you to growth.

It’s where you go from past “knowns” into future “unknowns” through skill acquisition, pattern recognition, integrating new knowledge and insights, and using the power of reflection and feedback to stimulate future growth.

Overwhelm

This is the state where “it’s all too much”. Where despite what you “know” in your head you don’t believe there’s a pathway to the result you need.

When in overwhelm most people shut down, demonstrate denial, refuse counsel or guidance, fail to take advantage of support mechanisms and may attempt to shift the blame for their predicament to others.

Each of these may be a sign that you’ve gone too far. That the challenge is too great, that the support insufficient.

This is where you throw out the lifelines, redouble the support and, if necessary, reset the expectations (both yours and your report’s).

Failure

This is, of course, a dangerous place, and best avoided . If your report goes through overwhelm and starts identifying as a “failure” the work needed to repair that individual’s confidence, sense of self and intrinsic worth will take time.

Thar be dragons

Beyond Failure Thar Be Dragons.

Here, of course, there’s a rub. Sometimes people who go through overwhelm, into failure and persist, discover there’s a bright new world of opportunities or that what they thought was important to them really is not.

Sometimes, however, there truly are dragons. Dragons that reflect the innermost fears of some.

Prevent overwhelm, preserve the challenge.

The next time you’re mapping out development activities for your team or reports, remember that what looks like challenge to you may have crossed the line into overwhelm for your report.

• Spend time explaining that the thin line between challenge and overwhelm matters to you, and to your report’s success.
• Invest in and ensure that support systems, from something as simple as a weekly chat, the provision of training, mentoring or coaching, or even a guarantee of protection against superiors, of budget review or other measures.

None of this is meant to prevent you from developing your staff: that’s a responsibility you have as a manager and leader. Equally, you also have the responsibility for helping them grow by exploring their previously unchartered waters.

And helping them avoid the dragons.

Next Steps

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With one eye closed everything looks flat.
Only the size of objects lets you know how far away things are.
You lose the rich information that comes from binocular vision.

Driving with one eye closed kills your depth perception.

The combination of parallax, perspective and binocular vision gives you a richness to your vision that lets you assess how far away things are, how fast they’re moving relative to each other, and to pay attention to what really matters.

Some businesses operate every day with one eye closed.

Many organisations dive straight into How.

• How can we increase sales?
• How can we improve customer service?
• How can we increase velocity in our business?
• How can we manage growth?
• How can we better develop our team?
• How can we make smarter hiring decisions?
• How can we prolong our assets?

Too often they neglect the power of What.

• What drives us as a business?
• What business are we really in?
• What are we working to achieve?
• What allows us to make money faster?
• What’s our economic engine?
• What really motivates our people?

“What” questions often get at the heart of the enterprise, allowing you to consider new perspectives and assess underlying needs. Unless you constantly revisit the answers to the What questions as your touchstone, the How answers can take you further and further away from what makes your business unique.

How questions are easy to generate. They’re often reactive and reflect an incomplete picture of the business (and this is becomes even clearer in larger businesses). What questions let you set a direction and identify the causes and effects. How questions keep you trapped within your bubble of assumptions, confusing

We really need to blend the vision of both strategy eyes.

Together, What and How questions let you determine resource allocation with a complete picture of strategy. In fact, you need to decide what before you can determine how. So many elements of your business look different with a different “What“.

• Are you focused on a particular technology, and what can be done with it?
• Are you focused on the peculiar market needs of a niche, like startup watchers?
• Are you focused on sheer returns, and set your strategy accordingly?

Once you’ve determined the What you can look at the How in more detail.

Next time you try driving with one eye closed…

Remember, there is a much richer view available to you when you drive with both eyes open.
It’s safer, smarter, and will get you to your destination alive!

Want more ideas like this?

Next Step: Work with John: Find out how working with John will improve the results you and your organisation achieve.
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Get John’s newsletter via email: Fill in your details in the top-right hand form
Don’t forget: To share the article via Twitter, Facebook, email, blog or your newsletter
Tell John what you think: Discuss this article using the comment form below.

If your career were a game of Trivial Pursuit, would you prefer it if the game was won by collecting pieces that are all of the same colour, or collecting pieces of different colours?

These are the options, and getting caught in the middle only hurts.

Focus

Adopting a strategy of focus can yield great benefits. The division of labour, academic and other forms of specialisation, and the opportunity to be the best in your world only come about through the persistent and dogged pursuit of this approach.

Aim to master your field. Get to know your peers and rise to the top of the pile.

Place a bet and follow through.

(Oh, and know when to quit.)

Diversification

For many, whether by reason of accident or intent, diversification is their playground. Acquiring and integrating multiple skill sets, industries, or other fields of endeavour is a natural way of developing.

It’s one thing to have mastery of a field. It’s another to have sufficient knowledge to be able to use that mastery in multiple ways to enhance your career, develop clients, or multiply your knowledge.

Approach life with an open mind. Look for the learning opportunity in everything.

Strive to create connections between seemingly disparate endeavours.

(Oh, and know when to seek out a true expert.)

A third way?

What do you see as the third way? How do you approach this challenge?

2. Think about every relationship where you give something (time, money, support, emotion).

3. Notice where they are relationships in balance.

4. Notice where the value each way is disproportionate to giving or getting.

5. Notice where there are gaps in things you have to give the world or things you need in your life.

6. Act appropriately.