January 7, 2013

Letter to a new potential business partner

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This my most popular blog post -  I have slightly updated it for the beginning of 2020.

This article appeared in Proseed Start up Magazine in December 2012 here

I am aware that I don’t always live up to the standards I expect, but this are goals I aim for. By making them public, I pressure myself. Some of the points are written as if to a new key staff member, as part of their "on-boarding" process. I'm assuming that they have either invested in or have an key role in the organisation.

"Dear new potential business partner,

It was great to meet you, I really like your business idea, organization and approach and would like to express my strong interest in taking this co-operation forward. I believe that under your leadership we can offer great value to clients while making a lot of money.

People have very varied expectations of their business partners. To avoid a discovery process that could be painful and expensive for us both, I’d like to set out my expectations and standards. It would be great if you could also let me know which points you like and hate, and tell me the things that are important for you.

I am going to be direct. This is part of all healthy relationships, business or otherwise.

Our goals
We are aiming to build a first class business with great people, happy clients, and making lots of money. We will be clear to staff that it is not OK to behave like a cool company while living on borrowed money or shareholder funds. The only money we really deserve is that which comes from our clients, over and above our costs of operations. Our profit proves that what we do is valuable. We always want to be proud of what we do.

Setting an example You have been successful in your life to date. That’s impressive, and one of the reasons I want to work with you. Even if I do not understand why, success may be part of a pattern. This means that the bar is raised. I expect more from you than the average co-worker. What does this mean?

I do not want to be your boss and I don’t want to have to police your standards. We are partners. These expectations are what should happen when I am not around. The way you conduct yourself will impact greatly on the company you are going to build.

Bad moods and sulks
You will behave better than a dream employee. You are setting an example the company will follow, and which will define the culture. Even if your girl/boyfriend has been yelling at you, your parents are moaning, your kids are sick, you are sick, and you are “having a bad day”, you will leave your problems behind when communicating with staff. You will be positive, polite, responsible and punctual.

Communication and respect
Failing to respond is not OK - I connect this character trait with "irresponsibility". You will read and respond to e-mails and phone calls within a time frame that you publicise. If you are too busy to respond in detail, you will tell the person who wrote to you that you are too busy, or that you are not going to reply. Ignoring incoming messages on the basis that you are “too busy” while happily updating your Facebook profile is dishonest as well as being rude. It sends a twin message that you believe you are too important to behave well and that you do not expect high standards of yourself. When you complete tasks you will let me know and expect the same of your team(s). A task is not done until you have communicated that it is done.

Hypocrisy You will communicate clearly your expectations of others and you will live to those expectations you set. If you want your staff to travel on Sunday evenings so that work on client sites starts Monday morning you will set an example and do the same.

Feedback If you have issues with the way people work you will give them clear feedback directly and in private so that they know what they have to do to make you happy. You are responsible for the organisation as a whole and as the leader you will get much of the credit, praise and rewards. To the maximum extent possible you will recognise the team that is doing much of the work, making it all possible, and allow them to feel important.

Behaviour in meetings
You will not take phone calls in meetings without checking if it is ok for the people you are with. You will not do your correspondence or Facebook/Skype chats during meetings. If you are using your computer for purposes related to the meeting, you will tell people why so they know you are not checking your e-mail, for example “I’m making notes about this meeting”. But it is better to take notes on paper, or with a digital pen.

Supporting your team
Your job as a leader is to understand the problems and concerns of people who report to you and give them support as well as constructive criticism. The reporting should be planned and predictable. All your direct reports should have some regular one on one time every week or two where they know that you expect them to discuss problems and agree solutions.

Being Tough
You will be tough on low standards. If people do not behave decently you will give them clear and immediate feedback about what they should be doing, giving them a chance to explain themselves. You will make clear from day one that people can be fired for backstabbing, dishonesty and intolerance.

Problem seeking and solving
You will encourage staff to look for problems, large and small, from spelling mistakes on the web site, untidiness in the reception areas, or horrible problems that might happen but no one has thought about (like who has “the passwords” if “the IT guy” quits), or who has the back up keys if the person who opens the building and their backup are both missing and unreachable . People who find problems will be expected to propose solutions when they report them. This can benefit the business in multiple ways..

Our corporate social responsibility policy is first and foremost be offer great services and products to our clients and to be a good employer that pays its staff, suppliers and taxes on time, Staff will be allowed to take time off for volunteering provided they are doing their jobs well, and will be consulted and have a chance to vote on the things we give donations to.

Processes and organisation are the DNA of the business.
The A of MBA is administration. We do not want bureaucracy but efficiency. Your management and planning process must enable all staff to know how things are done, how decisions are made and where to get the information and support necessary to do their jobs. External interactions (phone calls, emails and meetings) with suppliers, clients and partners must be recorded in a system staff have access to. As the boss you will set an example. Important information/contacts needs to go into a corporate memory so that we can survive and prosper even if someone dies, or quits (out of people's heads and into our shared IT system). I suggest using project management/time management tools and a CRM like Salesforce.  A top manager once lost his job in a company I was an investor in when during a review it turned out his the main entry in his calendar was "not available".

Planning and forecasts
We plan to make a profit, so our yearly budget forecast will tell us what level of sales we need to make our target profit, and our sales people need to work to hit or beat those targets. We will update our targets at least once a month based on current sales and the sales pipeline.

Time management
Yearly, monthly and daily "to do" lists, scrum, or another tried and tested planning process, via on line platforms so that everyone can see what everyone is doing are essential. Timecamp.pl is a good example.

Self Improvement Is for everyone including you (and me). It doesn't require money but it does require effort and time. Anyone with access to Google has almost unlimited access to knowledge.

Should be quick, useful and fun if possible.
Objectives should be clear. Tell staff that if they don’t know why a meeting is taking place they should clarify or refuse to go.
Weekly stand up progress and planning meetings with agreed objectives are important – what’s happened, what’s going on, what are we doing, what was good and bad (and problems, challenges, difficulties) Meetings should be followed by a written who does what by when. Basecamp is ideal for this.

Democracy and consultation
The company is not a democracy but team members should be consulted. The leadership decides what is best for the company as a whole taking account of the facts and the views of those whom it concerns.

Reporting and Transparency
All shareholders have the right to information in a startup business like ours. Benefits for owners like cars, computers, private travel on the company must be approved by the majority shareholders. Shareholders should get a monthly summary of working capital, sales, profits, new hires, firings, clients, strategic developments, and major successes or problems.

We will treat our staff well, fairly, and aim to be one of the best companies for the best people to work for. We will not hire people who are unpleasant or unreliable, We will have high expectations of people. We will aim to pay people attractive market wages. The CEO, bosses and managers should justify their wages. If they want increases in budget for their department and salary for themselves they should be able to offer more and raised productivity in return. Pay rises are not automatic.
All staff will get regularly appraised with clear feedback about what is good and bad, what we expect from them, and will have the chance to fix things we are not happy with. Manager-Tools.com has fabulous and largely free resources on how to manage people properly. Staff need regular one on ones, even if only 15-30 minutes every week.

Non competition and conflicts of interest We address our business opportunity through this company. No shareholder is allowed to engage in competitive activities to what we do without giving the company first refusal. If you sense a conflict of interest- you want to give a contract to a company run by a friend of relative, let the other shareholders know. Transparency is important.

New business areas
If a shareholder has a new business idea then he may discuss it with the other shareholders. If knowledge of the opportunity has arisen out of the business we do together he should discuss it. If there is a flow of money and/or know how from our business together to the new business, then we must discuss it. The closer it is to what we do already the more we can expect existing shareholders to have the right to be involved.

We talk about problems and propose solutions.

My contribution
I will do all I can to contribute my best ideas, advice, strategy but not take responsibility for operational stuff for managing projects, relationships or clients

Making things right
This is a long list - and everyone can get things wrong. If you do, you face it, fix it, say sorry and resolve to try not to do it again.

As I said at the beginning, this is my list. I’d like to know your reaction, and to know what matters to you.

Let's get down to work!!

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