In most cases psychometric testing is used as part of a recruitment process, although some companies also use it in team-building and goal-setting initiatives. Proponents say it is a cost and time efficient tool to obtaining insight into how an individual thinks and how their personality shapes their behaviour.
Tests are usually set and reported on by qualified occupational psychologists – while the test can be quick to complete, the production of the questions may have involved years of theoretical study and will belong to different ‘schools’ of analysis, as well as having different focuses such as ability, aptitude and personality.
DISC assessment. Based on the way an individual’s behaviour can be examined through four characteristics: Dominance, Inducement, Submission and Compliance (DISC), the DISC method is used by Thomas and other assessors to offer clients a basis to improve employee retention, increase productivity and enhance leadership.
Belbin. This school of testing focuses more on teams than individuals and requires a team to complete psychometric tests and a Critical Thinking Appraisal (CTA) which leads to an assessment of balance within a team that can deliver higher productivity.
Hogan. The Hogan system is predictive of failure and marries the requirements of job ‘families’ to individuals by highlighting the needs of the role and measuring them against the identified ‘derailment characteristics’ of the individual being considered for each post.
Using such systems has a mixed press. Where an organisation has little depth of expertise in interviewing, there can be overreliance on the results of psychometrics and a failure to plan an effective interview process to elicit further information. This risk leads to a shallow process of examining the candidate’s actual experience, skills and abilities and can also be skewed by the way that some candidates ‘prepare’ for psychometric testing by examining sample questionnaires and answering as they think the employer would wish them to.
Many employees fear completing tests because they believe the results may be ‘used against them’ at times when promotions or redundancies are being considered. This fear can be alleviated by debriefing individuals thoroughly and showing them that the company understands that profiles, like people, evolve over time so decision-making won’t be based on historical information which may no longer be accurate.
Utilising well-trained practitioners is also important to give a depth of insight to the individual as well as the company. Superficial tests that are not used as a tool for individual and team development act as ‘exams’ that people fear they may pass or fail and can actually inhibit people and prevent behaviour they see as risk-taking, in other words, exposure to opportunity can be seen as a threat if an inadequate psychometric evaluation has led to employees seeing ‘personality profiling’ as a tool for bosses to weed out poor performers.
However, a balanced assessment carried out by well-grounded assessors, and reported back to both client and individual can lead to self-awareness, growth and change and develop a sense of commitment to a team process that leads to each employee seeing, defining and exceeding work goals based on a clear grasp of their strengths and weaknesses and how them complement others with whom they work.
A recent article at Inc. suggests that the easiest way to launch an e-business is not to have a great business plan but buy a website through a broker on which to launch it. I’d like to suggest that ‘easy’ is not a good route to business growth and that buying somebody else’s mistake is an unlikely way to achieve success.
Looking at the ecommerce section of business brokers sites can also show up potential opportunities. UK brokers include:
Even if you can find a good site (and if they were going concerns with a good customer base why would they be on the open market, rather than brokering a goodwill deal with a competitor who can see their value?), there are inherent risks in this approach:
1. The observable traffic on a site you purchase may have no value or even a negative value, if it’s not convertible
2. Search engine rankings are fragile and Google, in particular is tough – if there are hidden dangers in the site you buy (cloaking, embedded automatic content generators, black hat blogging), stripping them out is costly and even when they’re gone, you’ll find yourself penalised by the Google algorithm
3. The seller wont always give you the full story – it’s all very well asking questions but it’s quite another thing to get honest answers: when e-commerce fails, very few site owners are willing to own up to their mistakes in front of a buyer, even if they recognise them.
There aren’t any shortcuts to starting a successful online business. The business fundamentals have to be right
• Reaching the right customer base
• Customer service.
If any of these are less than excellent, online customers find out quicker than any others, and spread their disillusion faster and wider than any others, using social media to inform a wide audience about your failure. They may be low barriers to entry in setting up an ecommerce business but without a clear strategy and unique selling proposition why will customers buy from a new online business?
If the fundamentals of the business are right, services like Volusion can help build a scalable online business. Volusion is an all in one software solution which already powers 30,000 online stores. It takes a lot of the headaches out of starting an online and, unlike many other solutions, it is targeted at UK merchants.
However if your aim is build the best possible online experience for your customers, starting from scratch with a bespoke website may not be the cheapest or easiest option but in the long run it still might be the best one.
This book is an exploration of value and speed. It’s like an equation in business physics – the businesses that learn to deliver value faster than others are the ones that gain market share and loyalty. Speed added to value provides competitive advantage in the internet age.
So how does it work?
Some people struggle with the insight and anecdote based approach that David Meerman Scott uses to take the reader through how people, and organisations, have coped (or failed) in using real-time opportunities to engage with the real world, in real time, by offering value rather than relying on a pre-determined PR formula.
From the Amazon reviews about it, there are people who complain about the anecdotal style Meerman Scott uses: that he doesn’t provide enough empirical detail; that the metrics just aren’t in the book. And that’s precisely the problem that this book sets out to solve. You can’t operate in real time using a manual. You can’t know what’s going to come at you, and you can’t guess in advance how the world is going to change around you, and in relation to you.
A perfect example, and the most famous, is the ‘United Breaks Guitars’ saga. A musician whose guitar was broken by United Airlines became so disgusted by the way the different airports passed responsibility for his claim to each other, that he wrote a song about it and made a video. That video went viral on YouTube. Two associated businesses: Taylor Guitars and Carlton Cases, seized the real time opportunity to publicise the value of their products in relation to the video and gained market share as a result. United Airlines apparently lost $180 million by failing to respond to the story.
In a blog interview David Meerman Scott made a key point about the brutality of real-time marketing, “Losing control is the toughest principle. You have to let people talk about your organization in the way that they want to talk about it. You can’t complain that they didn’t use your key words”.
In other words, to succeed, a business has to take part in a real-time conversation, not control it, and that requires leadership.
So how does a business use social media, crowdsourcing, videos, mobile devices, media alerts and so on to deliver value in real time?
Meerman Scott offers a range of tactics to help organisations speed up their information gathering and shorten their response time, but over and over he makes the point that what successful real-time marketing requires is a new mind-set that accepts that action is outward facing and fast, not inward looking and risk-assessment based.There are many examples of how other businesses learned to listen to more voices, act more swiftly, make rapid course adjustments and demonstrate their core values in both success, and failure. He also talks about how to drive real-time customer value through an organisation with zeal and enthusiasm.
The examples recognise the need for speed and agility, while helping readers to understand when process applies and when it needs to take a back seat to swift communication. Moving quickly at the right time is prioritised in customer-facing business areas, while ensuring core values remain integral to decision-making is seen as part of the strategic function of a management team committed to integrity of response when under pressure.
There are many obvious tips that businesses still ignore – Meerman Scott says a business should respond in the same medium that the challenge arrived in. So United Airlines should have made a video apologising to the musician and loaded it on YouTube. Insisting on using ‘formal channels’ means not being heard by the same audience who get to hear the bad stuff about your brand, company or product, so all efforts are wasted because you’re talking to people who hadn’t heard about the problem (but have now you’ve pointed it out) and ignoring those who had heard about it. In other words, you’re damaging your own brand.
Tech Cocktail pared down the guidance at Software Advice on the five top systems for start-ups looking at CRM, while a recent LinkedIn discussion on which CRM systems work best for start-ups pulled out some key features that mattered and why companies found themselves needing to upscale their CRM functionality. Interestingly, there was only one overlap in the systems that Software Advice ranked highly and LinkedIn discussants recommended to other entrepreneurs.
Sage Act! Integrates with the Microsoft platform and has two levels, one for fewer than ten users, one for ten upwards. Its weakness is no partner management function, which matters to many start-ups at present.
Sugar has a key feature that will appeal to many – the community based version of Sugar is free! It’s also very basic, but for entrepreneurs new to CRM, it could be the easiest route to exploring the field, before committing to the paid version with many more functions.
Salestrakr is a sales-led CRM platform which imports contact data in almost any format, making it exceptionally flexible for companies with high contact volumes and a lot of networking activity.
Maximizer has a different feature appeal – mobile integration. In the Entrepreneur version, Mazimizer offers complete integration with mobiles, whether Blackberry, iPhone or Android, and then simple upgrading as the organisation grows.
The one system that appears to be popular with both software reviewers and CRM users is Infusionsoft – considered ideal for start-ups and good as an introduction to CRM for small companies, although not so highly ranked by users on LinkedIn on its sales-led functionality
Highrise – based on the Basecamp project management platform, was praised by LinkedIn contributors for its simple interface and excellent automated reports, but was considered not so strong on sales-led functions. The overall view was that it might quite quickly become too limited in function for companies with a wide range of CRM activity.
Salesforce was considered to be powerful, web-based and have a wide range of functions. It’s a system that’s popular with businesses that have pipeline reporting needs and accounts in the thousands or hundreds of thousands. The downsides of Salesforce were twofold: it can take a while to get used to which can feel like a drag on performance and it might be viewed as costly compared to other systems.
Zoho operates like Salesforce, but is built on a business apps based platform so it’s cheaper (but even less intuitive for new users to find their way around). Those using Zoho praised its good functionality but commented on the longer-than-expected learning curve which seems to have frustrated several users.
From the Growing Business Awards through to the Queens Awards for Enterprise, taking in everything from awards for green business through to fast growth, social media use, family businesses or digital innovation, there are awards programmes that expose businesses to a rigorous analysis and reward those who ‘win’.
But what of those who don’t? Is it worth entering if you don’t scoop the top prize?
Yes, it is. For three reasons:
1. The evaluation used by the judges helps a business to measure itself against the current and anticipated challenges in each category area. For a new enterprise in particular, but for businesses generally, this is an exposure to the likely threats to business growth as identified by international experts in that area of business – working through that assessment ‘future-proofs’ a business better than it could do alone.
2. The scrutiny of your business will highlight weaknesses or areas of underdevelopment that could be holding the organisation back, so it gets a heavyweight consultancy on the impediments to business growth.
3. Being exposed to a peer group of acknowledged leaders allows for sharing of information, networking and bench-marking – whether a business wins or loses the category, there are always new ideas, better systems or solutions to problems to absorb and utilise.
What’s also starting to emerge is that businesses that don’t get this kind of external competition may actually spin into hyper-competitive behaviour and poor decision-making. Donald C Langevoort’s study: Organizational Psychology of Hyper-Competition: Corporate Irresponsibility and the Lessons of Enron – suggests that when a culture of healthy competition isn’t properly established inside and outside an organisation, spiralling risk-taking can become ‘natural’ and, like subprime lending, it becomes normal for certain kinds of business to look at competition alone, not at the bottom line that being competitive delivers.
So the value of nominating your business for an award is not just about being the winner, it’s also an opportunity to learn from the best, to look at the future, and to see potential problems clearly and evidence from organisational psychology shows that a strong business thrives on organised, recognised and validated competitive structures.
Awards courtesy of Schipulites
Many start-ups fail to thrive for reasons that couldn’t have been factored into the business plan but it’s equally true that the same mistakes are seen over and over again in business and there’s a point where an individual has to look at themselves and decide whether the problems are external or internal. Identifying mistakes is one thing, but where an innate trait, characteristic or behaviour in the entrepreneur is what causes the difficulties, it can definitely be considered a ‘sin’.
1. Self-sufficiency – some businesses work as solo enterprises but most need to be scalable and if you don’t know how you’re going to grow your business without cloning yourself, you have committed to a life of hard labour with an unappreciative boss: yourself! It’s a better idea to build enough margin into your pricing to allow you to hire or outsource all the aspects of business that you don’t need to be doing, so that you have more face time with clients and more time to focus on business growth, problem-solving and networking.
2. Product worship – being product-driven is a fast road to failure. It really doesn’t matter how good your product is, if the customer doesn’t want it. The history of product development is littered with excellent products that didn’t make it, and less good products (in the technical sense) that become world-leaders. Know what the customer wants, what they need, and what it takes to get what they want and need to them – so don’t just know the customer, be savvy about distribution.
3. Neglect – most often seen in terms of legality, neglect also extends into business plans, accounting and hiring. It can be crippling to a good venture to indulge in neglect. When somebody mentions to you that you really ought to be thinking about ‘X’, make a note of it and ensure that ‘X’ is on your to do list in the next 30 days. Sometimes ‘X’ turns out to be not a problem, but if it’s a legal blunder that comes back to bite you in a year’s time, or a financial misstep that leads you into decades of scrutiny from the revenue services, you will spend time and money solving a problem that never needed to exist.
4. Picking a tiny target – this is a sin that most entrepreneurs commit at some point, but a good business plan should reveal the problem long before it damages a growing business. Basically, if you’ve picked too small a niche for your business, growth will cease very quickly, either because your competitors have cornered all the space or because you expand to fill the niche and then find there’s nowhere else to go. Of course you might be happy being the big fish in a very small puddle, but it’s better to know that’s your potential future before you jump in and muddy the water.
5. Playing the equals game – this one doesn’t look like a sin at all, but it’s a business destroyer all the same. If you have business partners, particularly if your business is a technical one and you all contribute to the intellectual property, it’s tempting (and often seems fair) to have equal shares in the ownership. In the longer term though, it’s unlikely that you’ll all agree on all aspects of business direction: you might want to put in different amounts of time to running the business, often people disagree about who should be hired; getting outside funding can cause major arguments as partners fight about the constraints imposed by the funder … it’s a recipe for business death and it’s unnecessary as long as you’ve had the foresight to decide which one of you will have the authority to make the tough decisions – and of course, that individual needs to have sufficient investment in the business to stay motivated when taking the flack from the other partners!
6. Time-is-right-ism. This one’s incredibly common, not so much in start-ups as in potential start-ups and it’s important to be aware that there are many wannabe entrepreneurs out there who never get a business off the ground because they want a guarantee of success. They hone and perfect their business plan, obsessively research the opposition and craft their pitch until it’s awesome –but they never get to deliver it because they are too scared. For true entrepreneurs the leap of faith is the launch pad, but for ‘when the time is right’ entrepreneurs, it’s the point when they stop dead. So if you’re introduced to somebody who seems like the perfect business partner and they already have the perfect business plan, do some research of your own – you may find they’ve been here before, again and again, and they just never quite get started ….
7. Overpaying for market share. It’s a classic mistake and probably most businesses make it at some time but habitually spending too much on advertising or offering incentives is certain death to a business. The answer is simple. Perform a rigorous assessment of the potential return. Test your assessment thoroughly. Ensure that you are unlikely to spend more money getting customers than selling to them. Enshrine your assessment as a rule so that as the business grows, anybody who has authority to spend money on customer acquisition knows how to measure the cost of advertising, incentives or promotions against the potential return.
Image courtesy of Euii-Brain
According to Simon Walker, who is taking over as Director General of the Institute of Directors, Britain has lost its competitive edge. Walker recently became the hero of the investment sector through his fierce attacks on the controversial Alternative Investment Fund Management directive which limits remuneration schemes for investment managers. His first comments as he prepares to step into his new role on 3 October suggest he will be similarly robust in attacking the UK’s statutory framework.
“We’ve taken the UK’s competitiveness for granted for too long and now find ourselves with an excessively high tax burden, an overregulated labour market and creaking transport and energy infrastructures,” he claims.
His past experience as CE of the British Private Equity and Venture Capital Association, and senior roles at Reuters and BA have given him an insight into the need for competitive environments and he says, “Britain has lost its competitive edge and radical reform is the only route to sustainable growth, stability and long-term job and wealth creation.”
In addition to business expertise, Walker has served as an adviser to the Queen and to Prime Minister John Major, so he knows how to run a campaign and how to lobby effectively. He aims to encourage the government strip out regulation so that businesses of all sizes can compete more freely in the global market and the IoD will produce a ‘wish-list’ for economic growth in the autumn.
Walker, who is often described as having ‘cleaned up the image’ of the private equity industry, is likely to be a popular choice with high tech industries, start-ups and those requiring growth funding – business areas that have struggled with the moribund global market and with getting swift investment decisions from British banks. His intention to campaign for lower business taxes and less regulation will certainly appeal to businesses of all sizes.
Institute of Directors by Mark Hillary
Getting the right structure for business growth means establishing a leadership base before you need it so that as the organisation grows and you’re ready to take on employees, the operating system is equal to the demands of rapid growth:
1. Vision – building your values into your vision seems essential, but for many entrepreneurs, taking their values for granted can lead to slippage if the business grows rapidly, and they are not able to ingrain their belief system and business ethics into each new employee. Make sure you have a vision document and that it lists values that you expect all employees to activate in their work day.
2. Assessment – measuring the performance of individuals, and the organisation, against the vision and values is essential and can provide good guidance about the skills and activities that the company will need to integrate in years one to five of growth. This means there’s more opportunity to spot gaps in competence and to exploit opportunities.
3. Enthusiasm – leaders have to lead and by embracing the core values of the organisation both emotionally and intellectually, an entrepreneur can drive and validate a company vision. It’s not enough to demand, leaders have to demonstrate: whether it’s excellent customer service or ruthless analysis of failing product lines, value-led behaviour comes from the top down.
4. Goal orientation – the ability to articulate the outcomes a business, team or unit needs to achieve is crucial to creating an organisation that continually plans for, sets and achieves goals. Fuzzy business planning leads to diffuse outcomes and the inability to measure effectiveness at the key times when resources are allocated – for a start-up, getting resource allocation wrong can break an otherwise healthy business.
5. Recognition – acknowledging success and creating the habit of generous and public recognition of outstanding performance, leads to a culture of excellence that can lead to exponential growth both in business and in the skills and capacities of individuals. Leaders can either turbo charge their teams or let them run at their own pace. Lance Armstrong in his autobiography It’s Not About the Bike suggests that leadership skills may be innate or learnt but that once they are established anywhere in a team, they become the main driver of performance, so a business leader who isn’t great at recognising and rewarding success needs a team member who can do that, or the whole organisation will suffer from sluggish development.
Lance Armstrong courtesy of AngusKingston
Let’s look at some examples: there were several stores like Woolworths in the decade leading up to the first Woolworths store, and in fact the very first Woolworths, in New York, failed ten months after opening. The second, in Pennsylvania, was the flagship of a retail empire that spread worldwide. Google had a whole series of predecessors like Magellan and InfoSeek but now we think of it as being ‘the first’ search engine, just as we think of Facebook as the first social networking site (actually Friendster) and Hollywood as the first moving picture Mecca (actually Brighton)
So what did Woolworths, Facebook and Hollywood do?
1. They were late movers: and that meant they could analyse the successes and failures of the pioneers, improving on the former and avoiding the latter. This means they avoided funding the learning curve and were able to invest in perfecting whatever already worked: they were quicker, smarter, more extensive, better laid-out and/or more fun than the originals they replaced.
2. They were able to begin where others left off: instead of benchmarking against a bunch of other pioneers, all struggling to make way against unknown problems, copy-cats arrive in time to benchmark against best practice, so they start as high up the ladder as the pioneers have managed to get – this means they start with excellence as their benchmark
3. Copy-cats benefited from not having to create a market. Even if an idea is the best thing ever, somebody has to teach people what it is, that they want it, and how to get it. That cost is non-recoverable because it’s not differentiated. This means anybody moving into a newly created market benefits from the original spend in educating the marketplace and can focus on making a niche from the broad market base. However well a front-runner does the job, latecomers will find it easier to differentiate themselves within the range of need than the front-runner did to establish need in the first place.
4. They found ways to be quicker off the mark: the light was just as great in Brighton as in Hollywood, but Hollywood had an unlimited supply of ready labour of orange pickers and gold prospectors who were able to build sets and move equipment around so films could be made quicker, therefore more cheaply, and therefore flooded the market and won the distribution race.
5. They learned their marketing from their predecessors – Woolworths made their staff wear white gloves so that shoppers could see how much care they took of their goods after watching staff in other stores wipe their hands on their aprons after handling dusty stock.
So there are many ways to be a better business by copy-cat behaviour, not least of which is the chance to get funding for a business idea that resembles something already being pioneered elsewhere, and learning from front-runners may be a better business strategy than most people think.
Gold-miners courtesy of RickC
Posted by Michael under Business Growth
The Intellectual Property law reform, based on the Digital Opportunity report created by Professor Ian Hargreaves, will include massive changes designed to boost technological and medical innovation in the UK.
The changes will create a copyright exchange allowing swift, simple and straightforward licensing of copyrighted digital content which may generate £2 billion a year, and a parallel structure giving the right to data-mine medical research materials.
Vince Cable claimed that changing Intellectual Property laws “… can deliver real value to the UK economy as well as the creators and consumers.”
The right to parody content is one feature that will have a knock-on effect through other legislation, including privacy laws, but more challengingly for creative industries is the right to “legitimately purchased content” like a CD or DVD to a computer or iPod – this new right moves copyright law into alignment with real world behaviour and what the Government says is a reasonable expectation on the part of consumers.
Given the Hargreaves claim that current legislation “obstructs innovation and economic growth [in digital industries] in the UK” and that patent backlogs cost the global economy nearly £8 billion a year, anything that speeds up licensing and removes unnecessary restrictions will be welcomed. On the other hand, the issue of ‘pirates’ (illegal filesharing websites) and the request that they be blocked, has been abandoned as being too complex to implement and impossible to establish across national boundaries.
It’s claimed that the global trade in IP licenses is worth more than £600 billion annually, so finding a way to fit UK legislation into an internationally agreed IP structure is crucial to successful exploitation of creativity and the counterweight to new legislation is a tougher IP crime strategy which will enforce domestic IP crime laws, although the evidence for an international IP strategy is less developed, given the identification of five of illegal Apple stores in Yunnan province, China. So embedded were the stores in the community that even the staff didn’t know they weren’t licensed Apple retailers!
Microscopy image by D.H. Parks