Who would you bet on?

Warren Buffett gave a talk to a group of MBA students at the University of Florida in 2007.  The video is at the bottom of this post (on the blog). He starts with an interesting question.

He says [2:30] "Think for a moment that I granted you the right to buy 10% of the future income of any one of your classmates for the rest of his or her lifetime. You can't pick one with a rich father, that doesn't count. You got to pick someone who is going to do it on their own merit.  Which one are you going to pick?"

Imagine 100 of your colleagues, family, friends.  Who would you choose?  Are there two or three faces that come to mind?  Maybe if you are lucky with your friends, 10 or 15 jump into your mind.  But, you have to choose one.

Warren suggests that there are various methods to do the final selection.  Would you use school or university grades?  GMAT?  Most likely not.  These are not great indicators of success in life.

If not grades then what?  How about your best friend?  Set up a pact - "I'll choose you if you choose me".  A good plan?  I don't think so.

So, if grades aren't the criteria; If friendship isn't the criteria; then what should be your criteria for selecting the person to place your bet on?

Warren says that he has 3 criteria:

1. Integrity - coherence between values and words, words and actions; responds well in bad times as well as the easy times.
2. Energy - gets up every day and starts moving.
3. Intelligence - here, Warren clarifies that he is not looking for grand strategic planning type intelligence; not for chess type intelligence - but for a type of course correction intelligence that allows for small course corrections that mean that instead of running headlong into a brick wall, there is enough intelligence to change course and only receive a glancing blow to the shoulder.

 A good basis for selection?  Do you know who you would bet on?  Would it be yourself?  You already own 100% of your own future income...  are you a good bet?  In a future blog I will give three ideas to improve your energy, intelligence and ability to live your values.  Interested?

Public speaking to change minds – lessons from the world of politics

This is a guest post from Rob Marchant, a key member of Tony Blair's campaign team at Labour Party head office between 1998-2002.  Rob is founder of Barcelona Green, a startup aimed at climate change challenges.  He examines some political examples of public speaking from the US and the UK.

Loved or loathed they might be by the public at large, most of the best-known examples of public speaking come from politicians.  They certainly get more practice than most of us – after all, they do it for a living – and a great speech, such as “Ich bin ein Berliner” or “We will fight them on the beaches”, can move even the most cynical of commentators.  Although we can’t all be a Kennedy or a Churchill, we can still learn from such seasoned speechmakers as we look to lead others.

There are many pedestrian reasons why we might give a speech: to thank people, to raise a point or to merely deliver information, like the figures from an annual report.  However, a good political speech changes minds.  You will never turn people’s beliefs on their heads – no speech can do that – but by gently coaxing the listener you can often win the day on a single issue.  Here are some examples from well-known politicians on winning speeches:

Home in on your one “winnable” resistance point.  Every year, Tony Blair’s most important speech as Prime Minister would be to the Labour Party Conference in September.  Blair would spend most of the speech building up rapport and trust with his audience.  And then, once he had them eating out of his hand towards the end of the speech, he would drop in a single but controversial proposition, and they would give him the benefit of the doubt.  They never saw him coming.

Bond with the audience.  Bill Clinton, a true master of empathy, can win the hearts of a potentially hostile audience immediately by a choice phrase, signalling that he is “one of them”.  In his famous 1994 “you need to turn the light on in Virginia” speech, he starts by affectionately name-checking the local party dignitaries.  Then, as he hits the most controversial passage, he starts it with, “I am a Southerner.  I love this part of the country”.  No matter that Virginia is over a thousand miles from his home in Arkansas, and no matter what he says now, the audience are with him.

Passion wins, especially at the end.  When it comes to passion, Martin Luther King’s training as a Southern Baptist minister gave him a head start over most of us – at times his iconic “I have a dream” speech reads like gospel singing.  If you believe it, they’ll believe it.  And who has ever written a better ending to a speech than "Free at last! Free at last! thank God Almighty, we are free at last!"

Strong vocal delivery is important for credibility.  Margaret Thatcher, although perhaps not naturally a gifted orator, made the best of what she had.  She even had special voice training to lower the pitch of her speaking voice – she felt that her higher-pitched, woman’s voice lacked gravitas.  Her political persona as the “Iron Lady” was entirely consistent with her somewhat slow and deliberate speaking style, giving the impression that she was not to be deterred or trifled with.  Perhaps her best was the 1980 conference speech which subtly ridiculed her Cabinet critics for their vacillation and political “U-turns”, while contrasting her own strength of purpose:  “You turn if you want to.  The lady’s not for turning!”  With that, Thatcher’s place as party leader was safe for the next ten years.

Be yourself – although you can and must practice, you can’t be someone you’re not.  People move others most when they speak from the heart.  Humour can be devastating – or devastatingly bad, if you get it wrong.  Prime Minister Harold Wilson was a down-to-earth but rather witty speaker.  However, he didn’t dare introduce humour in his speeches until he was confident enough of his delivery – that is, when he became Prime Minister.

Don’t be heavy-handed or negative about rivals.  Audiences will usually react against this and it cheapens your message.  However, bashing the opposition in an audience is usually a crowd-pleaser, and unites you with the audience around the common enemy.  Learn from the pols: if you’re a Republican, bash the Democrats.  If you’re a businessperson, bash the competition.

Coin a phrase and catch the moment – Speeches have often assured their own place in history, in part, by exactly reflecting the zeitgeist: see Macmillan’s “wind of change” speech, about the end of empire in Africa, or Reagan’s “tear down this wall” about the anticipated end of the Cold War.  Even better, use a mantra which will be repeated: Barack Obama’s stroke of genius with “Yes, we can” made him and his message instantly memorable.

Not all speeches are political in nature but most, to some extent, look to influence opinion.  We might never have the charisma of the political heavyweights: but we can all be warm and confident, and take people with us.

Rob Marchant runs a consultancy business in marketing, web communications and management, and is currently raising funds for his first startup, Barcelona Green.  His career spans management consultancy, investment banking and technology, as well as having been a key member of Tony Blair's campaign team at UK Labour Party headquarters during 1998-2002.  In 2000 he travelled to Washington to meet the campaign teams of Al Gore and the Democratic National Committee.  He is also an experienced public speaker and facilitator who has stood for the Parliament in the UK.   Originally educated at Oxford, he has an MSc in Economics from the University of London and gained his Global Executive MBA from IESE in 2004.

Twenty minutes with Doctor Alastrue. The most important thing.

Yesterday, I spent 20 minutes speaking to Dr. Alastrue, a general surgeon in the Teknon medical clinic.  I need to have an operation - due to too much exercise (did I mention the triathlon in June).

I am currently interested in the challenges of experts communicating well to non-experts.  In the case of me speaking with Dr Alastrue with his 30 years experience as a practicing medical professional, it was a true case of an expert (him) communicating to a non-expert (me).

He sat me down and asked some basic questions. He asked me to explain why I had come to see him.  He explained that he would do some tests.  He explained why.  He explained what he found.  He explained what it meant.  He used his hands to demonstrate a simple model of what is happening.  He looked at me while he spoke and listened to me when I spoke.

I asked him what makes a great surgeon.  He told me "25% great technique, 25% great problem solving skills and 50% being a human being."  The great surgeons are able to empathise with the fellow human beings that are their patients and the family and friends of their patients.

I believe that a huge challenge of experts communicating to non-experts is that what is interesting to the expert is way over the head of the non-expert; what is interesting and relevant to the non-expert is painfully obvious and boring to the expert.  However, there is nothing more important that seeking to be a human being over and above seeking to be a "doctor" or "expert" or "leader" or "professor".

The most important thing is to be a human being.  JK Rowling knows this.  Steve Jobs knows this.  Dr Alastrue knows this.

Seven Speaking Suggestions from Reagan's Speechwriter

I have just read "On Speaking Well" by Peggy Noonan, speechwriter to Ronald Reagan.  She sums up persuasive speaking with seven suggestions (some good additions to my 12 tips for Public Speaking):

1. Be not afraid.  Relax, it’s only a speech.
2. Think logically about the case you are making, and make it.  Try to imagine your speech being reduced to a headline.
3. Your style shouldn’t be taller than you are. Don’t imitate. Say it the way you would say it to a friend.
4. The most moving thing in a speech is always the logic. Never try to make them cry, try to help them think.
5. Use humour when you can. No one ever left a speech saying “I hated the way she made me laugh out loud”.
6. Give your speech before you give it.  Read a draft or two aloud to friends or family. The fifth time you give your speech will be better than the first time.
7. Use your own gestures, respect your own quirks.  Be you.  (Check out my previous blog post on 3 keys to powerful delivery)

“When you forget yourself and your fear, when you get beyond self-consciousness because your mind is thinking about what you are trying to communicate, you become a better communicator” Peggy Noonan.

How to turn around a company

A couple of years ago I had some discussions with Solera Capital about taking on a role in Europe leading the change at a company called Audatex, an insurance claims adjustment business.

Solera explained their simple, three part philosophy that they apply to managment of their acquired companies:

• 30/30
• 80/20
• 90/10

30/30 - Every manager who controls resources is asked to come up with a workable plan to achieve 30% greater output using 30% less inputs.

80/20 - Every person in the acquired organisation is asked to drop 80% of their projects, to-dos, reports and focus on the 20% that they personally decide are the most important and valuable activities.  Solera are brutal in this process - if somebody has 20 projects, they must stop 16 and focus on 4.  They are not allowed to choose 5.

90/10 - If anybody does not achieve their objectives, they receive 10% of the "blame".  90% goes to their boss.  The only reasons why somebody will not meet their objectives are that they a) don't understand their objectives, b) don't have the resources necesary to achieve their objectives or c) are not motivated to meet their objectives.  a) is bosses' fault. b) is bosses' fault.  c) is a personal fault, but the boss should have intervened and replaced the individual with somebody with the right motivation to take advantage of the opportunity.

Clear, brutal, and requires tough decisions; but highly effective looking at Solera's track record.

On goal setting. How I do it. (Do not try this at home)

I was on the Air Europa flight back from Madrid sat with JC Duarte and Manuel Vidal-Quadras.  At a certain point we watched as JC pulled up an impressive iPhone application that allows him to track his time.  This led to a discussion about how to be effective with time.  I feel that I am not effective with my time and can easily waste hours on the unimportant (facebook, searching for information on Wikipedia and reading 10 other interesting but not directly relevant web pages).  I do however, tend to be good at achieving my goals. I know I could be a lot more effective, but keep myself to aim to achieve 3 important things each day.

I took some time to think about how I manage myself to achieve goals. I am interested in others' strategys and tactics to effectively achieve the important things in their lives.

1. Daydream & Visualise Benefits: I imagine myself in the future having accomplished the goal. I try to write a few words about this image. My top priority goal this year is write a book. I can see it available in all those airport bookshops that I pass on my travels.  I am too good at this bit and can sometimes end up living in a future, better world rather than being truly present in the here and now.
2. Be Realistic: This is where I need to work harder. I find it easy to imagine the benefits and to be optimistic about achieving them, but hard to be realistic about the obstacles that stand in the way; and getting down to systematically overcome these obstacles.  I write two significant obstacles that will make it difficult to achieve the goal. Writing a book is a lonely process - I decided that I need to write 1000 words every day - and publish a blog post about once a week.
3. Brainstorm: How can I overcome these obstacles?  The benefits can only come about if I am serious about overcoming the obstacles.  Is there a way to minimise the obstacles? How would someone else overcome these obstacles?  If I can't see how to overcome the obstacles I think it is better that I admit that I am not going to achieve the goal.  I am not good at this.  I want to believe I can be great at everything.
4. Action plan: 9 years of Accenture means I can do this in my sleep. Break the goal down into actions - list the actions.  Establish rewards for achieving significant progress points along the list of actions. Set dates. Write it down.  I like the feeling of crossing out actions as I complete them (like this).  No online tool has ever given me the same satisfaction as a big blue line drawn through the text on the page.  I have hired a coach to help me with the book. We have worked on a list of chapters - completing chapters is easier than completing the whole book in one go.
5. Start: Just a few minutes right now.
6. Public Commitment: I tell people that I will accomplish a goal.  I just told you that I will write a book.  I also want to give a speach to an audience of 5000 people one day.  I want to take my daughter to Disneyland (haven't decided Paris or Florida).  I tell different people for different goals.  I have some sports/fitness friends and they know that I will run a sprint triathlon this year. It would be better if I was able to let them know about the obstacles and how they could help (sometimes with a simple "come on man"; the swim is the big challenge for me in the triathlon).  I attach a date to when I mean to achieve the goal.  June 6 is the sprint triathlon. August is the book. I need to decide what is the best age for my daughter's first Disney experience...

My current list of life goals is on the right panel of this blog.

Why you should not be an Entrepreneur

I listened to a podcast from Barry Nalebuff of Yale University and founder of drinks brand Honest Tea (sold 40% to Coke for $43Min 2008; apparently Barrack Obama's favourite drink is "Black Forest Berry") as I sat on British Airways flight BA10 from Sydney to Bangkok. He spoke compellingly of why a decision to be an entrepreneur is madness, bordering on lunacy.  I added a few thoughts myself to create 6 reasons why you should not be an entrepreneur:

1. 90% of business start-ups fail (and... yes, you really are part of this statistic)
2. Not all great ideas can be good businesses
3. You are just test marketing for the big guys. Once they see your success what do you think they are going to do?
4. There is no way you can compete with the big guys on cost
1. Purchase of raw materials 50% disadvantage
2. Distribution – half empty trucks, no back haul, fight for shelf space
3. Plants with excess capacity – because nobody wants to produce there
4. They get the talent
5. They get first offer at the best retail space, and without those guarantees that you have to sign personally
5. It can easily turn into a more stressful day job.
6. You won’t find fulfilment between 9 and 5, it is always the other 8 hours that count.

"Yeah, but I am in the 10% of successes; I must follow this path..."

1. You must create a brand with religious zealot customers. They are your marketing. This is the one thing that the big guys cannot take away. You cannot have a product that is 20% or 30% better. You will not have much money to advertise.
2. You need a brand name that is “brand-able”.  (Google, Amazon, Dell, Sony...)
3. Mistakes will take control of the company away from you eventually. It won’t necessarily be you making the mistakes – but you will be the one needing money to deal with the mistake – and it will happen.
4. You are always raising money – you can never depend on having just one potential investor – you can never wait until you really need the money. Not all investors are good people. Not all investors are ethical.  (Some are fantastic and I have been very lucky in this regard).
5. Never sign any deal with an investor that gives them right of first refusal.  Be careful with drag along clauses. You will only really make money if multiple buyers get into a bidding war over your brand. Be careful with anti-liquidation clauses. Be careful with strange debt structures. Do not accidentally become a slave.
6. Don't let your self-worth be totally connected to the success of the company - in the end, luck will play a huge role and you will need highest energy in the tough times (when you most feel like a personal failure and you envy your friends with stable jobs in banking/corporate)

If only somebody told me seven years ago; but I know that I would not have listened as I thought that I knew it all. Any other entrepreneurs with simple lessons?

A Recipe for Luck in Life

Are some people born lucky?

Richard Wiseman, author of Quirkology, describes a number of psychological experiements that he has conducted to understand the role and roots of luck in people's lives.  In each case, people were asked to self-evaluate their level of luck prior to the experiments, allowing Richard to create 2 groups - the self selected "unlucky people" and the self selected "lucky people".

In your face
In the first experiment subjects were shown into a room and handed a newspaper.  They were shown a couple of photos of faces and asked to look through the newspaper to see whether these people appeared in any of the photos in the newspaper.

Mid-way through the newspaper there was a half-page advertisement with the words "Mention to the Experimenter that you have seen this Advert to receive €100".  A whole half page. Big letters.

Most of the self selected "unlucky people" failed to see the advert in their focus on the search for the faces.

Pass the parcel
In another experiment, 100 people registered to participate in an experiment to test the 6 degrees of separation theory.  Each was sent a parcel.  Their task - to get the parcel to a specific person in Coventry, but they were only allowed to send the parcel on to somebody that they knew on first name terms.  The average number of degrees of separation for the parcels to reach our friend in Coventry was 4 (of the parcels that made it).

However, about 30 of the 100 people who actually took the time to register did not even send the parcel on once.  Rather strange - you would go to the effort of applying to participate, and then not even sending the parcel on to anybody.  And, yes, these people who didn't know who they could send the parcel on to had self selected themselves into the "unlucky people" group.

So, are some people born lucky?

Luck, no; but maybe some people are born with better peripheral vision and greater extroversion.

A Recipe for luck: 

1. Look up and around you once in a while
2. Get to know a few more people

JK Rowling: The Fringe Benefits of Failure

JK Rowling gave the Harvard commencement speech in 2008. I love the way she wins over the audience by speaking about her own life. She speaks powerfully about the greatest lessons that she has learnt - always from her failures.

What would JK tell her 21 year old self? "Life is not a checklist; a CV is not life. Life is difficult and complicated and beyond anyone's control."

"Ultimately, we all have to decide for ourselves what constitutes failure, but the world is quite eager to give you a set of criteria if you let it. So I think it fair to say that by any conventional measure, a mere seven years after my graduation day, I had failed on an epic scale. An exceptionally short-lived marriage had imploded, and I was jobless, a lone parent, and as poor as it is possible to be in modern Britain, without being homeless. The fears that my parents had had for me, and that I had had for myself, had both come to pass, and by every usual standard, I was the biggest failure I knew."

"Now, I am not going to stand here and tell you that failure is fun. That period of my life was a dark one".

"You might never fail on the scale that I did, but some failure in life is inevitable. It is impossible to live without failing at something unless you live so cautiously that you might as well not have lived at all in which case you fail by default."

According to the author of the Harry Potter books and the current twelfth richest woman in Britain, failure gave her something that you cannot learn in any school, through any course, but only through facing the abyss of seeing everything you thought was important taken away from you:

• security in her ability to survive
• strength because she saw her ability to survive really tough times
• discipline to focus on the important
• friends who really care, who have come through adversity

I put the video here (you will need to click through if viewing via RSS).  The full text of her speech is available at the Harvard Magazine.




She finishes with ancient words of wisdom from Seneca "As is a tale, so is life: not how long it is, but how good it is, is what matters."

The roots of violence: Rights without responsibilities.

I listened to Warren Rustand speak on Leadership to the Entrepreneurs' Organisation event in Jeddah, Saudi Arabia last week.  Warren is a man who has fit the experiences of several lifetimes into his own - he has been in public service, in academia, involved in not-for-profits and has been chairman or CEO of 17 organisations.

He spoke of the seven blunders of the world, a handwritten note by Gandhi that he gave to his grandson Arun on their final day together, not too long before his assassination. These seven blunders are the roots of violence.

• Wealth without work
• Pleasure without conscience
• Knowledge without character
• Commerce without morality
• Science without humanity
• Worship without sacrifice
• Politics without principle

 An eighth was added by Ghandhi's grandson:

• Rights without Responsiblities.

Number eight underlies the rest of Gandhi's "blunders". 

The message from Warren's session on leadership was that life comes with responsibilities.  If I see the future clearer than those around me, then I have a responsibility.  If I feel more confident about the situation, then I have a responsibility.  If I know more than those around me, then I have a responsibility.  If I have a comfortable life, a roof over my head and food on my table, then I also have responsibilities. 

Scary. I can't choose to opt out.