entrepreneurship

Every blog about being a successful entrepreneur discusses the value of good leadership. But what does it mean to be a good leader? One of the defining characteristics of business visionaries seems to be their ability to build relationships. We spoke to one of the New Frontiers regional trainers, Frank C Guy, a leadership and performance coach with extensive experience in this area. How does he approach this area of leadership and relationships?

Frank sums up his philosophy in the mantra, If you want to improve results, build relationships. If you want to build relationships, improve the conversations. When people on the front-line aren’t doing a good job, it’s often because leadership aren’t giving them the right help or support. In Frank’s view, “This tends to be because communication in business is either not happening or is happening badly. There’s a belief that if you just sit down and have a chat with someone about an issue, it will somehow resolve itself. In reality, for conversations to be truly productive, they much be approached with far more intention and skill.”

Turning organisational structure on its head

One of the first things Frank does when working with startup founders is get them to change their traditional thinking about how an organisation is structured. He advises that we turn the hierarchical pyramid – where the bosses are at the top and the workers are at the bottom – on its head. The chart he uses (below) places the directors and shareholders at the bottom, because it’s their job to support the rest of the organisation. If you look at organisations in this way, you also start to question the language we use about organisations, which is very top-down and directional (phrases like ‘moving up the ladder’, ‘a sideways move’, ‘being demoted down’ are everyday business parlance).

Build relationships, one conversation at a time

Once you start thinking about the leadership role as being one of support, you can see how crucial relationship building is. And at the heart of this lies communication.

As Frank says, “A leader communicating with their team may be having any of three different types of conversation: leading conversations, performance conversations, or coaching conversations. To be effective, leaders need to be aware of what approach they are taking and decide which is best in any given situation. I use the metaphor that a leader wears a different hat depending on what type of conversation they are having.”

What are the main characteristics of these three conversation types?

Leading conversations are about involving people

You may talk about topics such as: Where we are going? What is our purpose? Where do different people fit in? What is a person’s significance? These conversations could happen during one-to-ones or in team meetings. These conversations are how you get people engaged.

Performance conversations are about success

You may talk about topics such as: These are your targets. Are you meeting your goals? Do you need support? Let’s review your KPIs. These conversations are what people managers spend a lot of time on, but they aren’t really leadership conversations.

Coaching conversations are about questioning and listening

These vital conversations are about letting the individuals on your team work things out for themselves. Generally, people have the answers, as long as you give them the means to work out what they need to do. Coaching conversations empower people to bring you solutions rather than problems.

“There is another type of conversation that happens in business but is not a leadership conversation. Feedback. Typically, we neither ask for feedback nor give it because it is so often negative. We’re just not doing it well. But, if you can get feedback right – whether you are trying to improve someone or encourage them – you can use feedback as a tactic for build great relationships.”

Different approaches in conversations

There is a sliding scale for conversations that goes from non-directive at one end to directive at the other. Frank recommends always taking a non-directive approach, if possible. Directive approaches will be necessary in business, of course. There are situations where you have to provide instructions on the correct way to carry out a task or tell someone what you need them to do. But coaching lives at the other, non-directive, end of the scale.

“Coaching conversations are about repeated questioning and listening and reflecting back what you are hearing. If you’re coaching someone, and you think they can work out a problem for themselves, don’t advise them and don’t instruct them. If they don’t manage to arrive at a solution, then you might ask a question along the lines of ‘I wonder what would happen if…’ which is a suggestion they can take as their own and hopefully make a breakthrough with.”

Questioning and listening aren’t skills we are taught, so most of us aren’t particularly good at either. During a conversation, we’re often just waiting for an opportunity to jump in and show off our own brilliance. Steven Covey describes this phenomenon as listening “with the intent to reply, not to understand” in his book 7 Habits of Highly Effective People. Leaders need to train themselves to listen better so they can have more effective conversations.

Advice for questioning and listening during conversations

In a startup business, you will bring people in to work with you who need help and support to deliver what you need. Franck encourages founders to have real conversations with their team on a regular basis, allowing them to work through issues. You may need to have performance conversations with these employees, and that’s fine. But a lot of the time, the non-directive approach is best, helping people to feel empowered and autonomous. This is really important for motivation, which will be key to building a successful business.

There are also lots of conversations that need to happen with people outside the startup. Imagine a scenario where you meet with a potential customer. You’ll probably be tempted to launch into a pitch along the lines of here’s my product/service, this is what it does, and these are the benefits. It’s called the tell-and-sell method. Frank recommends a different approach. Spend more time trying to understand what’s going on with the other person: What do they know? What do they really need? What are their wants? You can use this information to make them a more tailored offer.

“Because we aren’t taught to listen, we tend to interrupt, get distracted, make assumptions, change the topic, or rush people. My advice to founders is to ask the right questions and then consciously listen to the answers. If you’re not sure if you were doing it right, just ask yourself who was doing most of the talking. If it was you, that conversation won’t bring you the best results. This applies to all the conversations you have as a leader, whether with your team, suppliers, investors, etc.

It’s about building relationships and influencing people. When you listen with full attention, people feel understood, then they feel respected. People want respect; when you give them this you are fulfilling a basic human need. It’s a vital element of building trust, which is the ultimate goal.”

Frank’s guidance for questioning

• At the start of a conversation, start questions with What…? and How…? You can also use the alternative opener of Tell me…
• As a conversation progresses and you want to refine your questioning, you might start questions with When…? Where…? Which…? and Who…?
• Don’t start questions with Why…? It’s a very confrontational question that puts people on the defensive and forces them to justify their actions. Imagine being in a meeting and someone asking, “Why are you wearing that shirt?” Ouch! Now imagine the person asks, “How do you decide what to wear in the morning?” This question doesn’t cause the same reaction at all.
• Try to ask questions for which there isn’t a Yes or No answer. Ask open questions that allow people to express themselves fully.
• Keep your questions short and sweet. Some examples are What’s up? What happened? How come? These kinds of question help you to keep the conversation flowing while allowing you to dig further. If your questions are really long, everyone will lose the thread.

Frank’s guidance for listening

• What makes you a good listener is genuine curiosity. If you aren’t truly seeking to learn and understand the other person, your conversations won’t give you real value.
• Focus ALL your attention on the other person. Resist all those reasons to get distracted – both external and internal
• Maintain eye contact (only important for listeners)
• Give the person time to respond and don’t interrupt. Remember the acronym WAIT: Why Am I Talking?
• Bring a conversation to life by looping back or mirroring in three ways:
  i) repeat a word or two to show the person you heard what they said;
  ii) repeat back in your own words what you’re hearing (a paraphrase); and
  iii) summarise what you heard back to them to confirm you have understood correctly.
• Don’t take notes! You cannot listen fully and take notes at the same time. Also, looking down to write note means you are no longer maintaining eye contact. If there is something you MUST record, ask for a pause in the conversation so that you can do so.

As you can see, communication skills can help leaders to foster a culture of trust, understanding, and collaboration. The methods Frank describes may not come naturally to everyone, but they can be learned. Effective conversations are a crucial aspect of leadership, and investing time and effort in this area will have an immediate effect on you and those around you.

So you’ve completed your market research and analysis. You’ve found a great opportunity to exploit. The solution you have will give you an edge over other approaches and will offer real value to the client. You’ve spent the last couple of months building out the team of advisors and have some friends who’ve agreed to help you with branding, marketing, helping to write a business plan or to get the financials together…

Everything looks great – you’ll definitely need 10 people on board within the next few years to support the €1 million turnover you’ve set as your year three target, especially as you’ll enter foreign markets towards the end of year two. Sound familiar?

But have you created your market attack plan? Have you set out credible steps along the journey that you will need to take to achieve your goals? Over the past few years I’ve coached some of our Phase 2 participants to develop this plan. I use a commercialisation tool developed by WKI to structure the sessions.

WKI Commercialisation methodology

Step 1

We begin by reviewing the participant’s proposed target segments. We also look at the customer profile for each segment (who will use it, who will buy it, how they will use it, what the buy decision is, what motivates the user and what motivates the buyer, etc.). These have been identified by market research conducted to date and have been ranked into an ordered list of segments to target.

Step 2

We then discuss lead customers; these are early adopters who should be willing and eager to try a new idea even if it is in development. You are looking for someone who will collaborate with you to test, suggest, and mould your early stage idea into a customer-ready product for later stage customers.

A question to ask: are the lead customers from our identified target segments? If not, why not? If we can’t get someone from our target segment who will try our solution then has our market research been correct to date? Have we really identified the correct market? It may seem obvious but it does happen that the promoter has profiled a market opportunity in great detail yet introduces clients from different segments without clear reasoning. This can lead to a loss of credibility in the proposal, i.e. does the promoter really know who the customer is?

Step 3

So, having identified the lead customer we next set out what initiatives will be undertaken to advance the idea down the path to market. Each initiative should reflect the stage of development of the solution as well as the commercial roll out. That is why I usually have one or two lead-in steps such as demonstrator stage, prototype stage, before introducing the second and third target segments and beyond moving towards category leadership. Especially when working with start-ups. I also find that the first session specs out the first couple of development steps only. The promoters tend to need a break at this point as for further stages it becomes too vague or harder to define concrete initiatives and measures of success.

Step 4

Profile the risks. All plans have an element of risk associated with them, it is both natural and expected. Stakeholders will want to know that you are aware of potential risks and have prepared a plan to mitigate them should they occur. For early-stage businesses risks associated with technical, market, financial and people should be considered with each stage of the company’s proposed development.  These should also be summarised on the market attack plan.

So what? Who cares? Why you?

Let’s work through an example of what a market attack plan may look like:

Stage – Demonstrator Timing: Month 1 & 2

Major initiative:

• Update promoter’s LinkedIn profile and purchase premium package for 2 months
• Build mock-up demonstrator using MarvelApp, CAD, Animation, etc.
• Get 4 – 5 meetings with potential lead customers to review

Measure of success:

• 2 customers agree to pilot a prototype

Risks:

• Unable to secure demonstration meetings

Resources:

• In-house resources, travel costs and LinkedIn Premium only

Funded bBy:

• Promoter’s funds

Stage – Prototype Timing: Months 3 to 6

Major initiative:

• Agree framework for prototype stage with lead customers
• Develop working prototype – to agreed limited features/command set
• Company formation

Measure of success:

• 1 – 2 customers agree to purchase
• 2 – 3 new customers agree to pilot

Risks:

• Unable to secure sufficient funding

Resources:

• In-house resources and travel costs
• Outsourced tech development – €20- 30K

Funded by:

• LEO Feasibility Funding / New Frontiers stipend
• Innovation voucher – for algorithm generation
• Promoter’s funds & friends/angels

Stage – Market Entry Timing: Months 6 to 18

Major initiative:

• Secure incubation tenancy
• Hire CTO and first in-house developer
• Sales and Marketing hires x 2
• On-board the first 2 customers
• Invest in CRM package
• Complete technical development
• Attend 1 – 3 national exhibitions and secure speaking slots
• Start Next Round funding process

Measure of success:

• Customer income secured – €200k
• 2 – 3 new customers signed each quarter
• First segment 2 customers acquired
• CE Marking, Safety and Compliance certifications secured

Risks:

• Delays on-boarding key hires
• Development overruns
• Delays securing sufficient funding
• New entrants

Resources:

• €400K funding requirement (18 months runway)

Funded by:

• EI Competitive Start Funding
• EI HPSU Funding
• Irish VC Funding Delta/Kernel, etc.

Why is this approach important?

There are a number of reasons to use this approach:

1. For the promoter, it helps break down into manageable steps the road to market entry. It also helps non-financial founders align the sales and marketing, operations and financial requirements of the business for stage of development – which is great when producing three year cash flow projections.
2. For team members, it provides them with clarity as to what the outcome from each stage of development is. It can also help them see where the business is headed.
3. For the business plan reader, it summarises what resources are required at each stage and what the output will be in terms of headcount (support agency focus) or monetary gains (investor focus).

So give it a go. You’ll be surprised how easy it can be and what a difference this simple tool can make to developing your company’s market entry strategy.