Back To The Floor is my favourite of the business television reality shows. The BBC2 series from the late 1990s and early 2000s featured the CEOs of large companies mixing with the workers on the 'coalface' to hear their opinions and frustrations.
You could always tell the bosses found it a rewarding experience as the bigger a business gets, the easier it is for those at the top to lose track of what's happenning at the bottom.
As an entrepreneur running a company with just a handful of employees, it's a simple task for a chief executive, founder or managing director to sit amongst their staff, to be fully aware of the day-to-day goings on and ensure everyone understands the company's aims.
However, as time moves on and a business grows, it's easy for a boss to spend his or her time out of the way in their boardroom or office.
But be warned, such actions are being noted by potential investors.
Speaking this week at the CBI's Entrepreneurs' Summit, which I attended, Dragons' Den panellist and private equity boss James Caan said he has noticed an increase in "invisible CEOs" over the past decade. He claimed that the businesses in which he's more likely to invest in are those that are run by a boss who doesn't rely on a mission statement on the wall to communicate strategy to employees.
"I'm impressed by companies where the CEO directly communicates their vision to the people that count," he said. "You must not do it by email or a sign in reception; you must be the cultural carrier of your business."
Yes, as you achieve more success you may want to step back from operations but more often than not, the whole DNA of a company is wrapped up in its original founder so don't assume everyone knows and understands your vision. If that's not reason enough to convince you, then the fact that a millionaire investor like James Caan may chose not to back your company due to your invisibility should sway you.
Friday, 18 April 2008
Tuesday, 15 April 2008
A second chance
During a debate in the House of Commons recently, the issue of the stigma of business failure in the UK was raised. Reference was made to an interesting European Commission report from last October which passed me by. Entitled 'promoting second chances for entrepreneurs', the policy document outlines the need to overcome the negative public attitude towards those that have failed in business. I couldn't agree more.
In the UK, and indeed throughout Europe, people look down on failure. Think of the tabloid newspapers which have bigged up a celebrity, only to shoot them down for making a mistake. The same is true for business owners. If you run a company which fails, the stigma surrounding bankruptcy is huge. This is despite the fact that, as the EU report shows, even though only one in 20 bankruptcies involve fraud, the general public often perceives it as a criminal affair.
The same cannot be said in the US where, as internet entrepreneur Paul Birch recently said, "it is almost a badge of honour". Indeed, many investors will only provide cash to those who have had at least one business failure in the past.
Some of the best and most famous entrepreneurs have failed. Multi-billionaire Bill Gates' first company collapsed during the 1970s, while in the 1990s Dragons’ Den panellist Peter Jones was forced to sleep on his office floor when he was forced to shut down his company after a creditor went bust. Jones is now worth around £100m.
Why? Because he learnt from his mistakes.
Survey after survey shows that the fear of failure is the main reason putting people off from starting a business. But it shouldn’t be. By failing you discover what doesn’t work and in turn what does work. Applying these learnings to a second venture are hugely beneficial.
The government is admittedly taking note of the issue. A little reported detail in the new enterprise strategy released alongside Alistair Darling’s budget states that the government proposes to give insolvency officers discretion to decide whether or not to place an advertisement in local press about an insolvency. They are currently obliged to do so. A welcome step if it happens.
But more is needed.
There are some good examples to learn from. In Germany, the Start Award scheme, for instance, includes a 'Restart' category which celebrates honest entrepreneurs who have learned from business failure and succeeded with their second start-up. What a great idea. In addition, an "early warning system" is being introduced in Denmark which flags up businesses facing potential trouble pointing them to practical advice. Again, a hugely beneficial action.
Figures from Barclays revealed last week that while the number of new businesses being set up last year was higher than ever before, the amount failing also increased. With the public's current attitude to failure, how many of those entrepreneurs whose businesses have collapsed will have another go? Very few I'm guessing.
The enterprise spirit is alive and well in the UK; that cannot be doubted; but it would be even further reaching if failure wasn't seen as a negative thing.
I'll leave the last word to Thomas Edison: "I have not failed. I've just found 10,000 ways that won't work," he said. And that's from the man who invented the lightbulb.
In the UK, and indeed throughout Europe, people look down on failure. Think of the tabloid newspapers which have bigged up a celebrity, only to shoot them down for making a mistake. The same is true for business owners. If you run a company which fails, the stigma surrounding bankruptcy is huge. This is despite the fact that, as the EU report shows, even though only one in 20 bankruptcies involve fraud, the general public often perceives it as a criminal affair.
The same cannot be said in the US where, as internet entrepreneur Paul Birch recently said, "it is almost a badge of honour". Indeed, many investors will only provide cash to those who have had at least one business failure in the past.
Some of the best and most famous entrepreneurs have failed. Multi-billionaire Bill Gates' first company collapsed during the 1970s, while in the 1990s Dragons’ Den panellist Peter Jones was forced to sleep on his office floor when he was forced to shut down his company after a creditor went bust. Jones is now worth around £100m.
Why? Because he learnt from his mistakes.
Survey after survey shows that the fear of failure is the main reason putting people off from starting a business. But it shouldn’t be. By failing you discover what doesn’t work and in turn what does work. Applying these learnings to a second venture are hugely beneficial.
The government is admittedly taking note of the issue. A little reported detail in the new enterprise strategy released alongside Alistair Darling’s budget states that the government proposes to give insolvency officers discretion to decide whether or not to place an advertisement in local press about an insolvency. They are currently obliged to do so. A welcome step if it happens.
But more is needed.
There are some good examples to learn from. In Germany, the Start Award scheme, for instance, includes a 'Restart' category which celebrates honest entrepreneurs who have learned from business failure and succeeded with their second start-up. What a great idea. In addition, an "early warning system" is being introduced in Denmark which flags up businesses facing potential trouble pointing them to practical advice. Again, a hugely beneficial action.
Figures from Barclays revealed last week that while the number of new businesses being set up last year was higher than ever before, the amount failing also increased. With the public's current attitude to failure, how many of those entrepreneurs whose businesses have collapsed will have another go? Very few I'm guessing.
The enterprise spirit is alive and well in the UK; that cannot be doubted; but it would be even further reaching if failure wasn't seen as a negative thing.
I'll leave the last word to Thomas Edison: "I have not failed. I've just found 10,000 ways that won't work," he said. And that's from the man who invented the lightbulb.
Subscribe to:
Posts (Atom)
