Fiona: Joining me today to talk about all things brand is the founder and principal of Brandology Michel Hogan. Welcome Michel.

Michel: Thanks Fiona.

Fiona: I thought today maybe we could discuss what glaring errors are commonly made with a company’s brand, because this is what you’re called in to sort out from time to time so maybe you could start off by outlining what the most obvious errors are that are made that you see all the time…

Michel: There’s a bunch and they’re just about as long, how long’s a piece of string? As many different companies as there are there seem to be that many errors that people make. And I don’t really call them errors or mistakes so much because people don’t go into it with wrong intention. But I think that probably the number one thing I think people don’t do or mistake that they make is that they’re not consistent. That’s certainly the biggest thing, because when you’re trying to build a connection between who you are and your marketplace and your audience and your customers, they’ll pick up on stuff that has, seems to be really insignificant, that seems to be really not important at all, and that’s the stuff that they see and go, well hang on a minute, that doesn’t feel right, that doesn’t seem right, that doesn’t sit right. So this idea of actually, what do you say, what do you do and how do you think? And making sure that those three things, as much as is practical, are actually in alignment, is – and not doing that is actually the biggest mistake I see people make. Now that manifests itself in lots of different ways.

Fiona: What are they?

Michel: Some of the classics are talking about how important customer service is to you and then…

Fiona:…and then not delivering…

Michel: …well not delivering but even making it really hard for people to get in touch with you, you know, really simple stuff, no phone number…

Fiona: Yes! No phone number on your website. How common is that?

Michel: Yes, or buried so deeply that you can’t even find it. So immediately if you talk about how important customer service is to you, that makes me go, well clearly it’s not that important to you that you want to actually make it easy for me to get in touch with you. Not backing up your products and services with warranties and guarantees. If you have confidence in their quality and what they deliver, there is absolutely no reason to do that and yet so many people don’t. They look at as if people would take advantage of it…

Is your brand out of alignment with what you do and what you say you're about?

Fiona: …how many would take advantage? There’s a small percentage of the population but it’s not a general trend.

Michel: No. Most won’t. Really most won’t. And, you know, the trade off, of the very few who do is just enormous. I think another mistake that people make, a really big one, and we talk, I think we’ve talked about this in a past interview we did, is overfocusing on, is focusing way too much on the look and the feel and the outward style at the expense of bringing a real understanding inside the organisation.

Fiona: Too funky, slick, sexy…

Michel: And worrying that it’s not exactly right, getting really caught up in all the look and the feel side of it, to the point where, well, if it’s not exactly that blue every single time, it’s just not going to work, it won’t be right. And that’s just rubbish actually because you know, for the most part, the general population doesn’t notice and couldn’t care less. They really couldn’t.

Fiona: Fascinating, isn’t it? But they do get a sense, that you mentioned earlier, that, if things are inconsistent, don’t they…so if the messages are not in alignment, they do pick up on that, correct?

Michel: Oh, all the time. And I think that’s the biggest one. I mean that really is. If you’re saying it over here, and doing something completely different over there, you’re done before you start. I mean there is absolutely no way you can build a strong brand or maintain a strong brand if that’s the way you operate. Just doesn’t happen. Um. And people live in la la land. They really do. It’s funny. I’m working with an organisation at the moment and we’re doing some investigating, and I’ve been asking, talking to different people in the company and I’ve been asking, you know, what are the most important things that you think people should know about your company?  Across the board people are giving me these answers and I don’t know whether I’ve had the same answer twice…

Fiona: Really?

Michel: And the other question…

Fiona: Because it goes to what you say about core values – shouldn’t they all…

Michel: They should…

Fiona: …have an understanding of the core values of the company, therefore the same thing should be coming up?

Michel: They should. I mean, it’s not that it’s out of this world disparate, but there is a fair bit of play in there. But the second question I ask them really shows the la la land piece of it, because I sort of said to them, well how well overall do you think everyone in the organisation understands you know what you stand for and what’s important. “Oh, yeah, it’s really good, across the board, everybody has a great idea…”

Fiona: And you found otherwise?

Michel: Well the first question I asked showed it to be true. I mean the fact that I – you know, what two things? And I didn’t get the same two things twice. So, you know, it’s one of those…companies…it’s really easy to get tied into your own stuff and not stand back and look and say, well, is this really what’s happening? And companies spend – again it goes back to the overfocus on the external stuff, they get so tied up in what that should be that they forget to actually communicate it back down into the organisation or make sure that what they’re communicating is in sync, you know, with the organisation.

Fiona: Now, returning to an external focus, what is the biggest brand mistake that you’ve ever seen or noticed?

Michel: That’s a really good question because there’s so many that jump up and spring to mind. I’ll limit it back down to the last twelve months. I think one of the classics that I noticed was actually something Qantas did, where after their little air problem over Western Australia where, you know, a huge big hole in the fuselage and the plane dropped two kilometres in the air or whatever it was, and the entire, you know, everybody hit the ceiling, and heaps of people injured, and all the rest of it. When it came to actually giving those people compensation, Qantas’s decision was to give compensation based on seating class…

Fiona: Oooh!

Michel: Because of course, people in First Class were so much more scared than anybody in Economy. I mean, surely…

Fiona: Were they more injured? Probably not…

Michel: Exactly. I mean there was a who range of things here. I mean, we’re not talking about giving them another ticket, you know, which of course everyone on the plane got and that’s fair enough, if you get compensated with a ticket, you know, the same ticket that you bought…

Fiona: …because that flight was unsuccessful…

Michel: …yeah, the one that you bought. But this was compensation for fear and pain and suffering and…

Fiona: …injury…

Michel: …and injury, and, I was just like, okay, there’s something really wrong with that. And that one really, that one really struck me. I mean I’m not sure it qualifies as the biggest brand mistake that’s happened in the last twelve months.

Fiona: But it jumped out at you?

Michel: But it really jumped out at me because it was just so fundamentally unjust, to me, really spoke fundamentally to where Qantas’s head is at in terms of how it views its business. I mean that was really frightening to me.

Fiona: Given a mistake like that and how you view it, and many others, you know, when we have an insight, we’re likely… there’s a thousand people behind us having the same one…

Michel: Without question.

Fiona: How easy is it to correct when you start making those mistakes? Or is this just a whole area of misperception they’ve got into now.

Michel: I think you can…you can certainly correct things. I think the misnomer is that you can just turn it around on a dime. Because typically those type of mistakes and any type of behaviours that lead to those decisions are somewhat endemic, so they’re not something that’s just jumped out of nowhere, they’ve evolved over a period of time, it’s generally a slow erosion, it’s an incremental shift…

Michel: You know, this decision was made, so the next one that was made sort of was a little bit further, just over time…

Fiona: In a sense, Michel, if it’s glaring it’s probably better, because it’s obvious to many people within the organisation, and therefore it can be corrected.

Michel: It can be, it certainly is something that can be, perhaps, noticed, Jim Collins wrote, came out with a new book last year called How the Mighty Fall, and a lot of that was talking about, even though it was talking about business and the decisions that  businesses make, really it has a lot of lessons in it that are around brand mistakes as well, because that’s the way brand stuff happens too, the progression that he talks about in that book. And so typically, by the time you get to stage five where, you know, it’s extremely obvious to everybody that everything’s falling apart at the seams, there’s been a long period to get…

Fiona: …of erosion…

Michel: …of erosion to get to that point. And so, to your question how do you turn it around, unlike, his assessment of businesses that get to level five, where they’re pretty much done, there’s not much you can do with them, I think brands can be turned around, but again, it’s got to be done from the inside out, it’s got to be done slowly and with attention to the things that led to the erosion. Basically it’s about fixing the erosion.

Fiona: Michel thank you for your time today.

Michel: My pleasure, thanks Fiona.

Fiona: I’ve been talking to Michel Hogan, who’s the founder of Brandology, and we’ll join you again in a few weeks for more discussion around brand matters.

Photo: flickr Wootangi01

Michel Hogan is a brand advocate who helps companies get their brand into alignment with what they do. She has a weekly blog on Smart Company called Brand Matters and writes a regular blog at her site www.brandalignment.com. Fiona Boyd is the co-founder of Arts Hub and co-author of Niche Content Millionaire.

Fiona: I’d like to welcome today Phil Grant, managing partner at boutique accounting firm Nexia ASR, and we’ll talk more about money matters and the entrepreneur. Good morning Phil.

Phil: Hi Fiona, how are you?

Fiona: I’m good, I’m good.

Phil: Excellent.

Fiona: Phil, today I’d like to look at what happens to an entrepreneurial company when it’s in a fast growth phase. I mean, everyone who does a start up, they write their business plan and they really hope that will happen, but usually that’s not the case. Though if it does happen it’s an exciting time, but there are some pitfalls also, aren’t there? Can you maybe sort of highlight…a company gets out of the blocks, it’s all working and it’s going really fast, what are some of the things that could be problems?

Phil: Look, I think the first thing that you’ve got to do in that space to avoid any problems is you’ve got to be dynamic, and so you’ve got to be able to change direction quickly. And I think hopefully a lot of start ups you don’t have a massive workforce, and so it’s typically the founder and maybe a few others, and it has to be a strong collaborative effort in understanding that you might have to change direction quickly. Having said that, planning’s critically important. I’m not talking about multi-page documents of business plans but really one-page plan approaches of knowing where you are now, where you want to be and then having clear strategies to get you to the next stage. And it may well be that if it’s really moving quickly you need to take stock on a regular basis and just reassess those plans.

It may sound a bit controlling to have to do that but I think you need to always know where you’re heading or else you can’t quite see what’s ahead of you. And you’ve got to be able to see, you’ve got to get visibility about what’s ahead of you so that you can then plan your next move. There’s always going to be things that come up that you don’t anticipate, that’s the beauty of it in many respects, but I think you need to have a clear plan. Having said that, you need good people around you to support you. Whether that’s internal or external advisors, you need to have good people around you who maybe have got some experience, who can help you anticipate what those roadblocks or issues are going to be so you can plan, so you can at least have a thought about what, well, what am I going to do if this happens, and what are the likely implications of these actions? So I think that’s really what you’ve got to do. Now, there’s no ironclad guarantee, there’s no doubt you’re going to get yourself into problems but with a start up business that’s all part of it. It’s I guess the risk and the reward scenario where there’s risks and part of those risks is the unknown. And hopefully the rewards are substantial as a result of taking those risks.

Fiona: Phil, I’ve certainly noticed that when we were in periods of fast growth with Arts Hub that, well, actually, we’re in a good position, we had surplus cash, but there’s always the temptation then to go and, you know, get a bit more diverse and use that cash in other ways. And the plan really is the discipline to stay on track and just keep making good money and look after your customers, and not going too far sideways. Would you say that’s a sort of a common pitfall, that many businesses could be tempted into?

Phil: I think it’s, the word that comes to mind is distracted, you get distracted or you lose interest and you think, oh well, I’ve done that, what’s next? And I think you’ve got to be confident that you’ve bedded down what you’ve got. But I think also you need to have an eye for what’s next, so the pipeline, what’s in the pipeline, and I think that’s where this planning is critically important, you need to say, OK, it’s good to have a pipeline, I think it’s critically important, that’s part of the visibility about the future. And a pipeline of ideas or innovation is, I think, critically important, but I think they need to be carefully managed so you don’t end up simply saying, oh, we can just do that and you ignore all the good work you’ve done, behind, in the past and suddenly you think, oh, jeez, I’ve got this idea up but the last one’s fallen over and so you’re always tripping yourself up. So there’s got to be discipline, to make sure that you stick to the plan, but have an eye for the future also, but you’ve just got to manage that. It may well be that you can see all these great ideas but you just don’t have the resources, which is typically the case, to actually go and do the next stage – the resources being people and money. And so, you know, you just have to be patient. And I’m sure that there are plenty of businesses out there which will counter that saying, ah well, we just run off and do it. That’s fine, and there’s going to be a certain success rate from that, but I guess what we’re trying to do is, we’re trying to design it so the success rate is higher. I think by having a well-planned process around it, I think that’s going to give you better success.

If your startup is in fast growth, make sure your plan can cope with it!

Fiona: Phil, I used to work for a government agency in WA called the Small Business Development Corporation and we often had small businesses come in and ask for various types of advice. And commonly those that were in fast growth had a cash flow crunch. And there were many reasons but for many it had to do with servicing all the new clients they were able to get in cost more than the money coming in the door. The money coming in the door was delayed. What do you do if you’re actually growing well, the numbers look good, however the cash in the bank is going to hit negative?

Phil: Look, I think it comes back to planning. You need to be able to have that visibility and know that that’s the case…

Fiona: And then what do you do?

Phil: Well, you need to access the resources, and that’s the finance resource, to fund it. I mean, growth has to be funded…

Fiona: Is that bank finance? Equity finance?

Phil: Could be, could be…look, could be bank finance, and I’m sure all of us have done it, where you’ve hocked a house and hocked everything and you’ve got nothing left and so it may well be that you go to the bank and the bank might not lend you any more money and you go to the VC firms and they might say, oh look, you’re too early or too small or too much risk, so you can’t go there, it may well be that you go to the next door neighbor and say, I’ve got this great ideas and he banks you and you give away some of the farm in order to do that. I guess you’ve got to measure that, or it may be delaying the decision until you’ve built up your business, you’ve generated a bit more earnings, where you can actually afford to reinvest them in the business. Because ultimately, by taking that decision, you might end up hanging on to a greater piece of the pie. If you jump a bit earlier you’re giving away some of the pie. But on the other hand, if you wait a bit longer, you might lose the momentum and lose the opportunity, somebody might take the idea. So you’ve got to balance all those things up, and you’ve also got to understand, well where am I heading, what am I trying to head towards? But the critical part to this is being good at what you do and not neglecting what is your core business. And so, you’ve got to really examine whether, what you’re proposing, it might be great, but is it really about what you do? It might be a separate business idea completely, which needs completely fresh business plan and set of capital attached to it, you know?

Fiona: Fast growth doesn’t usually last for ever, so what are some of the things a business can do in that time to make sure it doesn’t suffer too much later down the track where, when the business returns to more normal and expected growth pattern?

Phil: Well I think it comes in,  I’ll just keep on saying it, planning, because I just think that’s so important. It’s sort of understanding that businesses have peaks and troughs, you know, there are times when, you know, the resource that you needed to build a business, which is the investment, are heavy and the cash commitments are heavy but we actually end up with a position where we know that that will plateau and all of a sudden you start to get a return on that investment. And I think you’ve got to, you know, in your planning, be clear on what your acceptable timelines are, plus or minus, you know. And once you have that clarified, you need to sort of monitor that, but I think, you know, if we all had 20/20 vision of exactly what’s going to happen, well it’s going to cost me X million dollars to build this, I’ve got all the money set aside to fund it, I’m prepared to make that investment and at the end of that investment I know that I’m going to get a return of 25, 30, 40%, whatever the acceptable benchmark for you is as the founder. And when you get to that point, and when you start to deliver, and your business is restored to its strong cash flow because you’re no longer investing, that’s an acceptable return for you. So I think it’s about being realistic with your expectations. I think a lot of start up businesses don’t have that clear vision they just go about…

Fiona: Running running running!

Phil: Running about and not looking ahead. Which is what you’ve got to do, you’ve got to look ahead.

Fiona: Thanks for your time today.

Phil: Thanks Fiona.

Fiona: I’ve been speaking to Phil Grant who’s managing partner at Nexia ASR and we’ve been talking about money matters and the entrepreneur.

Photo: flickr net efekt

Phil Grant has been the long-time financial advisor to Fiona Boyd and David Eedle and they stand by his company’s motto, that they deliver ‘Value Beyond Numbers’. You can read more about how Phil’s advice has made all the difference to Fiona and David during the Arts Hub journey in their book, Niche Content Millionaire.

Niche Content Millionaire is a downloadable eBook that tells you the true story how we made millions from subscription content and membership websites. Buy Niche Content Millionaire Now

Michel Hogan publishes a weekly blog on both Smart Company called Brand Matters, and her site www.brandalignment.com. For this week’s Brand Matters blog post from Michel, click here.

Niche Content Millionaire is a downloadable eBook that tells you the true story how we made millions from subscription content and membership websites. Buy Niche Content Millionaire Now

When it came to getting Arts Hub out of the blocks, David and I were pretty confident and competent, after all we had spent over a decade each in corporate environments and then several years leading numerous projects at our arts management consultancy. As far as a project went, we could break it down to its component bits, set targets, apply resources and deliver. However, once Arts Hub was up and away, we found we had no real experience in working together on the growth of a business.

Growing a business is a very different thing to managing a project. For a start, it’s an ongoing process and the timelines are much longer. With the projects we’d been managing, the longest went for no more than a year, and once the deliverables were met, we were finished and indeed had to cast around and find the next project for the business.

When you’re growing a business, you might run various stages as projects, but ultimately there’s no goodbyes, so it’s in your very best interests to make sure all your systems and processes are as tidy and clean as possible – and you can’t be sitting around thinking, well our end date is this, and at that time, we’ll be out of here. If it’s your business, then you’re not really out of there until you sell or close it down.

In the first year of Arts Hub, David and I found ourselves arguing about the most ridiculous, nit-picky small things. Which is the sort of thing you do as consultants, worrying the last little bit, getting the detail and the results absolutely spot on. But when you’re running a business, nit-picking and arguing about small stuff can really hold you back and is extremely divisive when there are two of more of you sitting in the leadership seats.

Without a mentor, your entepreneurial journey can appear never-ending.

So mid 2001, as we neared Arts Hub’s first birthday anniversary, David and I decided we needed someone to come along on the journey with us, someone who had plenty of life and business experience and who would want to guide us as to what to put our energies towards and what to let pass us by. Basically we were tired of trying to snap up every opportunity that came our way and wanted some knowhow and insight into what we were really about and what that meant and how it could help us stick to the knitting of the Arts Hub business as it grew.

We commenced a search for a Chairman. Now, not having recruited a Chairman before and being incredibly clear amidst the wreckage of the dot-bomb landscape at that time, we understood before we started that finding someone who would agree to Chair the board of a small online company would be difficult. And we were not wrong. Admittedly we just started where we started and wrote letters to various people whose public style David and I agreed that we liked. Most didn’t respond, though we still have on file several letters from notable Australians who passed on the opportunity but wished us well anyway. But at the time, we noted that our dream Chairman would be the then Chair of the Australia Council, Dr Terry Cutler.

How did we know this? Well, David and I would read the speeches he gave at arts events, conferences, launches across the country (usually published in The Age or on the Australia Council website) and by his writing and communicating style, and also by the shape and depth of the ideas and concepts expressed, we just knew we wanted this deep thinker and achiever as Chairman of our company. However, there was an obstacle, while Dr Cutler was at the Australia Council it was unlikely he could have a role with us – that would constitute a conflict of interest between the commercial world (Arts Hub) and the world of subsidised art and would not be a good look.

So for another year David and I continued our quest to recruit a Chairman, writing intermittent letters to those who came onto our radar as possible or likely leaders for us. And as good fortune would have it, Dr Cutler moved on from his role at the Australia Council and we had our chance to pitch to him.

The long and short of it is that for several years, Dr Cutler has been David and my mentor for business, but also at times for life in general. And to give you an idea of what skill level might be required to fulfill this task, have a think about what it would be like to brainstorm with two hotheads, one a purist technologist, the other a purist communications theorist – and to come to meaningful conclusions that all are comfortable with on a regular and ongoing basis. I’m pretty sure Dr Cutler during the fastest moving times of the Arts Hub rollercoaster, found us at times overwhelming but it was clear that he also found the experience energizing, and his commitment fuelled us towards greater unity as a team, and towards making better and more refined business decisions.

Without Dr Cutler I know I would not be where I am today with so many options available to me and the luxury of being able to decide what I will and will not be involved with. Without Dr Cutler’s guidance I wouldn’t have uncovered for myself that what really interests me is content and content businesses and the arts – and that most other avenues of business do not hold excitement for me – though I have been known to go a bit nutty over funky streetwear products from time-to-time. That said, I can see a time when I sit on boards and share a ‘content-focussed’ view of the world with a group of people with very different outlooks.

Having a mentor has made the world of difference for both David and I and I often describe finding Dr Cutler as the missing link in our partnership. There’s a limit to which any team can self-organise without a leader, and it is at that point you need to refer and listen to someone with more experience and who is invested in helping you get to where you want to in the most elegant way possible.

I’ve met several entrepreneurs recently who have all the hallmarks of the entrepreneurial mindset that David and I had when we set out on our search for a Chairman – working excessively hard, super long hours, doing all aspects of the business, gaining a level of recognition and success but not enough to recompense the extreme effort to achieve it; feeling like they’re gaining ground but not quickly enough. If this sounds like you, then stop and think for a minute. Is there a better way? Could you grow your venture faster and better if you had a mentor to talk to, to help you let go of activities that aren’t a good use of your time, to introduce you to potential investors and partners for your product or service, to help you widen your mindset yet still keep to the company’s original entrepreneurial vision?

If your answer is a firm ‘yes’ then the time is right for you to find your own mentor and to refresh your view of your business and to light a stick of dynamite under its growth. Scratch the surface and most guru entrepreneurs and outstanding individuals have or have had a mentor. How many of you knew that Richard Branson was mentored by Freddie Laker or that David Beckham is mentored by Bobby Charlton, or even that Alexander the Great had Aristotle as a mentor?

The entrepreneurial journey is not one you must do on your own. If you feel there’s a link missing in your business, then it’s time to find yourself a mentor.

Photo: flickr Chiara Marra

Fiona Boyd and David Eedle explain in more detail their mentoring relationship with innovation expert Dr Terry Cutler in their book about the startup, growth and sale of the Arts Hub business  – Niche Content Millionaire.

Niche Content Millionaire is a downloadable eBook that tells you the true story how we made millions from subscription content and membership websites. Buy Niche Content Millionaire Now

Fiona: Hello and welcome. Today I’m talking with Michel Hogan – owner and founder and lead associate at Brandology. She works with a group of people who work with companies to help them get their brand exactly right – as it should be in the marketplace today. Welcome Michel.

Michel: Thanks Fiona.

Fiona: Rebranding is a word that gets bandied around a lot and it probably has more significance for you than it does the average person. When do you know that it’s time for a company to rebrand and then exactly what is rebranding? What do we mean by that?

Michel:  I actually think rebranding’s a misnomer, at least from where I sit, because I think when most people are talking about rebranding, what they’re really talking about is, we’re going to remarket, we’re going to rename, we’re going to relogo. You know, all of those things that are really actually just brand markers, right? If you go back to the definition that I hold of brand, which is this intersection, or this result, of what you believe and what your actions show, and that, you know it’s your values, it’s your promise, it’s the story of who you are and where you’ve come from, and it’s the compilation of all of that stuff. You know, I don’t think that you ever really rebrand…

Fiona: …you can’t just change that, can you?

Michel: …that doesn’t alter, and so I think a lot of what people think of as rebranding is not actually rebranding at all. It’s essentially…it may be repositioning or remarketing the existing brand to their customer, to the audience. And you can create somewhat of a fresh, a fresh appearance. But fundamentally, unless you change the processes and products and services and protocols and principles of the organisation, the brand is still the brand. And I say that actually quite a lot to people, you know, your brand is your brand is your brand.

Fiona: So Michel, I’m just wondering, then…what we call rebranding is probably really freshening up?

Michel: Yeah, yeah, freshening up…

Fiona: …given that you can’t change the brand and its story and where it’s come from, but then, you can sit there and decide on a new future, correct? Or decide on how you’re going to look in the future. How – when do you know it’s time to do that, to freshen up, to have a new look and have a new outlook?

What we mean by rebranding is often re-imaging or re-logoing.

Michel: I think that process is actually one that should happen on an ongoing basis. I have a little diagram which I remember drawing once which is, sort of a bit like an entwined DNA strand, you know, I think that there’s two active elements of brand and one is theoretical brand and one is functional brand, and the functional brand is sort of when it’s on the ascendant, when the focus is on that, typically the theoretical side of the brand, the more strategic form of the brand falls away.

And then when the strategic side of the brand’s on the ascendant, the functional side falls away, so there’s this constant interplay between those elements within an organisation, as there should be. And the functional side of brand’s the piece that really interacts with the marketplace. It interacts with the customer, it really has to connect with the environment and make sense in the environment for the organisation to be successful. And so I think that, for me anyway, a lot of the work that people need to do, deciding when to freshen, when to revisit this stuff, has to do with what’s going on out there. And to a degree connecting and responding to that. That’s the one piece of brand that does connect and respond. There’s a little three circles diagram I draw and one of those circles is positioning. And the positioning of an organisation is sort of this alchemy of what do we do, why do we do it, how do we do it, and those questions really do connect very deeply with the marketplace and the environment. And if you keep asking those questions continually, you will just by virtue of keeping your positioning fresh keep your brand fresh. But that doesn’t trade off against the anchoring pieces, those enduring pieces of promise and values…

Fiona: …and story…

Michel: …and story, and that, you know and that historical story that stay as the foundation, and that connect you, and keep it connected to what’s always been.

Fiona: I would think that in – let’s call it – refashioning – many companies would seek to forget the story of the past, or sometimes they do…do you see that?

Michel: All the time. I see lots of companies that want to try and forget the story of the past, and in fact I think one of the great values…

Fiona: …even about the valid and really valuable story, somehow because it’s an old story and not a new story it seems to not have as much value.

Michel: …without question. I think one of the great failures of marketing, of a lot of brand practitioners who come from the marketing side of things, is that they tend to focus on, OK, well let’s move forward and it’s a new story and, you know…

Fiona: …the new new thing…

Michel: …the new new thing, and at the expense of what is often and incredibly powerful, well loved…

Fiona: …and successful…

Michel: …and successful story from the past. And I think that’s a great pity because there’s a lot of affection, there’s a huge connection both inside and outside the organisation for those pieces. And when they’re not honoured, and when they’re not brought into what’s going on, and carried forward, I think everyone loses.

Fiona: Tell me what happens from a consumer perspective when exactly that happens…someone comes in and refashions according to the new look, junks the history and the story, what does the consumer usually do?

Michel: Well it depends. The existing customer, and the customer that’s had the long connection with the organisation can quite often be completely put off, and actually leave the organisation, leave their association. Sure it might attract new customers, but there’s a really famous, there’s a great brand blow up story, which is Gateway computer, in the US, and Gateway’s actually one of my favourite case studies for exactly why this stuff is so dangerous. Gateway was a pretty successful, you know, tier two computer provider, you know they weren’t Dell but they were doing OK. They had a really loyal and very strong story and it was all fashioned around this somewhat folksy, family image of, they had a cow, as their logo, and it was, like, moo, and it was a little bit, it was certainly, it was almost like the anti-technology computer position, I mean it actually had some really good pieces to it. And then along came this, like, no no no we’re going to basically ‘rebrand’, and I use inverted commas on purpose. And essentially they chucked the entire past story, they chucked all of the old thing, came up with something new, basically tried to turn them into the alternative to Dell, so the Dell Lite. Failed miserably, nearly killed the company, it’s barely managed to survive, it’s never regained its market position from that. And that was just such a…it just didn’t have to happen, it was such a strategic failure…

Fiona: Why change such a unique way of presenting your case to the market, it’s unique and distinctive, wouldn’t you want to just build on that?

Michel: Exactly, why not? I mean, you’ve got something like that, you know, there’s no one else there doing it, everybody else is appealing to the technophile, you know, you’ve got one company out there…

Fiona: …so appeal to the mass market, I’m fun and folksy…

Michel: …I’m the family computer company…and it was such a mistake. And it made me so sad, actually, because they did have something unique and something worth protecting, and they just threw it away, and their customers likewise, walked.

Fiona: Michel, thank you for your time today. Great case study, and we’ll hear more case studies from Michel Hogan in coming series.

Michel: Thanks Fiona.

Fiona: Thank you.

Photo: flickr myuibe

This is the transcription of the videopost The Misnomer that is Rebranding. Michel Hogan has  weekly blog on Smart Company and also has her own blog on branding at www.brandalignment.com.

Niche Content Millionaire is a downloadable eBook that tells you the true story how we made millions from subscription content and membership websites. Buy Niche Content Millionaire Now

A copy of David’s speech The Human Face of Technology has been kindly made available to Into the Mountain, courtesy of Tim Roberts and ARTS. The full version is available here.

The 6th Annual NARPACA Ticketing Professionals Conference was organised by Tim Roberts founder of ARTS and for more information on the recent 2010 conference visit www.ticketingprofessionals.com.au

David Eedle enjoys giving speeches on technology, social media and how business can harness the new to reinvigorate and bring new possibilities to what they’re doing. If you would like to book David to speak at your event or conference please contact info@intothemountain.com

Niche Content Millionaire is a downloadable eBook that tells you the true story how we made millions from subscription content and membership websites. Buy Niche Content Millionaire Now

Some years ago my mentor, Dr Terry Cutler told me there was one book that was absolutely vital to read and internalize and it was Good to Great by Jim Collins. Collins outlines a number of successful companies across some key criteria and notes that for those who are really, really great the leaders tend to be what he terms ‘servant leaders’. This sort of leader is the antithesis of the sort of gung-ho, out-there bossy boots CEO that we’ve stumbled across from time-to-time. Dr Cutler is right, there is much to be learned in this book and also the two others Collins has written, Built to Last and How the Mighty Fall.

How the Mighty Fall is an interesting follow on from Collins first book as it outlines five phases of a business in the process of failing – and pretty much until the end of phase 4, the business is recoverable if it can sort out its key ideals and drivers and get a clear head back in control. It sounds strange but it’s not just individuals that can suffer from inflated egos and hubris, whole organizations can catch that mindset too.

Collins says ‘If you prevail or fail, depends more on what you do to yourself than on what the world does to you.’ How true do you think that is? Have there been times in your life when everything has lined up absolutely perfectly and yet it still didn’t go right? Maybe you didn’t really want to be part of what was going on, or didn’t feel ready for the challenge, it doesn’t matter how we rationalize it, things don’t work out because we blow ourselves up, not because the world blows us up (though that can happen too, at which you need to be prepared to stay the distance and prevail).

Great leaders get their emotions and behaviours under control before they jump in the driver's seat of the business.

I have my perfect CEO in mind here who is someone that David and I have done some long-term consulting work for, and while this man is like all of us a work-in-progress, he also shows all the unique characteristics of the ‘servant leader’. Firstly this CEO is passionate and determined about his business but not aggressively so. He’s able to marry his dedication to his business and people with a kind of natural humility that is unobtrusive and makes you want to find out more, engage more, listen more, do more of what you can to help him along in his mission. Passionate engagement is not about loudness, shrillness, chest-beating or bullying and berating others, it’s a totally different order of things and for people like me it will get my engagement and attention anyday over the leader as loudspeaker and bully.

I had the unique opportunity to witness this impressive leader deal incredibly elegantly with a total webhosting disaster that could have meant the end of his business as he knew it, if he hadn’t focused his attention and resources on rebuilding and recovering quickly. Okay, David was also key here – when the hosting company lost all this firm’s data and also the backups, David as usual had a development copy that was a few weeks old, that he could use to rebuild. But here’s the crunch, this company had moved from being a completely offline business, selling over $5 million of tickets a year over the phone, to a completely online business doing the same amount (and increasing) online. Lost to the ether were 3 weeks of customer transaction data and event bookings – and that could have been disastrous. It certainly does count as the ‘worst case scenario’ in your risk management plan.

However this leader did not meltdown, breakdown, blame or abuse, even though he was on the phone over a whole weekend to the hosting company (who by the way had never had such an incident like this in over 10 years in the industry – it was created by a freak event and a backup system that ultimately failed about 30% of its customers). Instead he kept his cool, got the consultants in to talk about how to handle the situation from a technology point-of-view, we talked through what data would be missing and strategies the staff could use to deal with that – and all in all the company dealt with the crisis, including the missing 3 weeks of customer and transaction data (people turned up to events so this company could retrofit the data, however this was fly-by-the-seat-of-your-pants territory) professionally and methodically.

By contrast I’ve recently witnessed a number of CEO’s who might have been termed in the past as the ‘old school’ variety, which I think is unfair to those with heaps of experience and a few years under their belt who more closely fit the ‘servant leader’ model. But anyway, for want of a better description, old school leadership, here we come!

Maybe it’s because the world has suffered its way through  the global financial crisis and the population at large has looked outside itself for comfort and reassurance, but I’ve noticed a rather pernicious type of leader raise his ugly head again. You know this sort of person – full of bluff and bluster, appears as a know-it-all, talks incessantly about themselves and their history, doesn’t let anyone else have any airtime, thinks they know what’s going on in their company but has minimal true understanding of how it works and who is in what seat and what really matters about how it all works or doesn’t’. And is too full of their own ego to ask anybody about it.

I’ve pondered what makes such individuals the way they are and have come to the conclusion that it’s fear. Generally the bluff and bluster has got them a long way, most of us just don’t have the uber confidence of these creatures, we’d actually prefer to prove our value through our work or relationships, however some leaders need no such proof. So the super confident, but slightly delusional seem to rush past everyone around them to the leaders seat, however the wheels will really fall off when things don’t go to plan, or the external environment (like the GFC) changes. These people can really only produce results when the machine is well-oiled, the best people are in the right seats and they aren’t really required to influence anything. The problem is that this works in times of little change, but when things hot up and become competitive again, a more evolved sort of leader is required.

So, my position is that if the turns and tumbles of business scare the wits out of you and cause you to blame, judge and otherwise take advantage of those around you, then you should really question whether or not you should be in the driver’s seat.

As a ‘servant leader’ you bring out the best in the people around you and your company’s resources, you don’t try be ‘the best’ yourself. Let’s stop looking outside ourselves for reassurance from these so-called ‘strong’ leaders and start working with leaders who by their very character, can deal with all manner of crises with calmness, integrity, humility and dedication. These leaders and the companies they lead will be the ones that prevail.

Fiona Boyd and David Eedle tried out all sorts of leadership styles during their time running management consultancy The Dramatic Group Pty Ltd and the Arts Hub business. In the end, staying calm and keeping to the vision (and mentor lunches with Dr Terry for moral support and practical guidance) was the style that prevailed. You can read about what they learned about leadership in their book, Niche Content Millionaire.

Niche Content Millionaire is a downloadable eBook that tells you the true story how we made millions from subscription content and membership websites. Buy Niche Content Millionaire Now

The most recent one last week at The Pantry was dominated by talk of the football (we’ve missed it – roll on winter and football in Melbourne!) and what’s going on at our football club, St Kilda Saints right now. In 2009 we became used to a style of Saints football where the players seemed to be totally adept at keeping themselves out of the news and the papers. We suspected an iron discipline and determination among the player group – focused totally on the things you want your team to be focused on, that is, playing the game hard and winning.

St Kilda didn’t win the premiership last year, but everything about the team reeked Grand Final material all throughout the year. There were no behavioural mishaps, the players worked themselves extremely hard, and when what the local press called the “B team” was sent to play Hawthorn in Tasmania late in the season when everyone was starting to flag, they ground out a totally convincing win. Not only were the stars of the club winning the games, but also the significant depth of talent sitting behind them were winning them too.

The 2009 Grand Final itself was extraordinary. I’m not romanticizing what I saw when I explain that it was the closest thing to seeing the Gods face off on Mount Olympus that I have ever come to in my entire life. It helped of course that we were about 10 rows back right behind the goal and the St Kilda Cheer Squad. What a game, I mean this really was gladiator time and whilst St Kilda did not ultimately win, I think everyone there knew that they’d played the most determined game of the two teams.

So we ended 2009 pretty much with the belief that the St Kilda Saints had a great chance, if it stuck to its knitting and its total self-discipline, of winning the premiership in 2010.

And then came the rumbles. Andrew Lovett, a recruit from Essendon brought himself to negative attention in public a couple of times over the summer break, and one of those incidents has led to him being charged with rape. Now all sorts of sports commentators are saying that St Kilda has been heavy-handed in sacking this new recruit, before he’s even played a game with the Saints, but when Ross Lyon fronted the media last Tuesday at Moorabbin and let it be known that Lovett was no longer with the club, he did the best thing that a startup business, or any kind of business innovation can do, that is, St Kilda failed fast.

That’s right. They admitted the recruiting decision in this instance was wrong, and instead of letting a long and dull saga of increasingly negative innuendo and wrong-footedness play out, they cut this tragedy short, admitted the failure and moved on.

Grand Final Day 2009 just before the Saints run on. The Saints executed a 'fast fail' this week and we think, will prosper bigtime for it.

And this is one of the key lessons that David and I also learned in the Arts Hub journey. And if you’re going to learn it empirically rather than vicariously (ie if no-one else is around to guide you, you’ll have to do this the hard way, as we did) then you’re going to waste lots of time, energy, money and attention on your own business Greek tragedy. The trick with any new business, or new strategy is to work out what the success factors should be (and be reasonable, blue sky dreaming is not required at this stage), apply a small amount of resource and then test, test, test. You can learn so much by not going in boots and all and instead understanding that not everything that’s worked in other places has general universality. Getting a strategy to work in your setting is an experiment until proven otherwise – and like all good experiments, you don’t bet the house or the farm on it. And if it doesn’t work, you learn what you can from it, and you move on.

Now in my view, St Kilda paid way too much recruiting Andrew Lovett and this will be a bit of a sticking point for them as his exit will be costly for them. I do understand their position though, it will be more costly to have someone whose personal discipline is not up to the rest of the team’s standards in the long run. Nothing is worse than an elite team being held back by a member whose standards just don’t meet that of the rest of the team. But they’ve done the business now and Friday night’s win in the NAB Cup against Collingwood, even though it wasn’t spectacular, does show that at least psychologically, the players have ‘moved on’ from the Lovett failure.

David and I have put the ‘fail fast’ approach into practice a number of times – and when we haven’t followed this method, it has cost us bigtime. Early on in the Arts Hub experience our fast fails were all to do with hiring the wrong type of staff for a startup business. People who want certainty and security do not belong in a startup business – what you need are flexible, adaptive people who can respond and also initiate change with energy and positive momentum. We learned the hard way and had the wrong team for our type of business for probably a year longer than we should have. Restructuring and losing everybody and starting again from a clean hiring slate, really helped us turn the corner in terms of Arts Hub’s success and its sustainability as a business.

We did better next time when we had a ‘fast fail’ with a business partnership. When the signs were there that this partnership was not benefiting us, we sought the exit doors and ran through them. Looking back at this time – it was intense and uncomfortable but was exactly the right thing to do.

If you want to hear more about why it’s better to ‘fail fast’ than to cling on to a ride going nowhere, Mark Pincus who founded Tribe which was a bit of  a slow fail, and who learned what needed to be learned and has gone on to found and lead Zynga – has some good lessons to teach. You can see him interviewed here.

Before you start your next new thing, think about it in terms of a small experiment, and ask yourself, at what point should I see results and if they’re not there, when should I call it a ‘fail’? Many, many successful businesses, if you dig a little deeper will tell you that for every success there was at least one fail sitting behind it, sometimes more. Fail fast, fail often and learn what is there to be learned, then move on and up.

And don’t forget to get back up and get out there again. We’re looking forward to St Kilda Saints as Premiers in 2010, having made it through their first fast fail for 2010, it’s time now to set their eyes on where they’re heading and not where they’ve most recently been.

Photo: Flickr davideedle

Niche Content Millionaire is a downloadable eBook that tells you the true story how we made millions from subscription content and membership websites. Buy Niche Content Millionaire Now

Phil Grant from Nexia ASR, joins Fiona Boyd regularly to talk about money matters and the entrepreneurial business.

Niche Content Millionaire is a downloadable eBook that tells you the true story how we made millions from subscription content and membership websites. Buy Niche Content Millionaire Now

Fiona: David, what was your view on Find a Babysitter? Because we’ve been members for the whole time, of the service…

David: I think we were just about customer number two, or customer number three, something like that. Um – I take great heart, because I think what it does is remind us that business comes in all shapes and sizes, there are a hundred million dollar business deals being done every day and fifty million, and twenty million, but you can still have a couple who sit down in their lounge room one day and go, we have an idea…and one of them maybe has the marketing end of it or the product end of it, and maybe the other half has got some technical skills, or at least there’s a match between a couple, or two or three people, there’s a match of skills, they sit down, they come up with the idea, they essentially do all the work themselves, and they’re able to build a perfectly sound, viable, profitable business in, over three or four years, and then walk with what is clearly a perfectly nice exit for four years work.

They were doing it in a relatively small niche, it’s a pretty specific little area that they’re working in. It also reminds us that there are a million and one of those little nichey moments, in life and in business, and therefore there are literally an infinite number of little ideas that can be exploited. I think you’re actually going to see a rise of those, in the future. If you look back, say, twenty years ago, or even ten years, the costs to build, the capital, the infrastructure, the resources you needed to build a business, often put it out of reach of people…or it was a case of mortgaging your house or something like that, you know, you needed to raise money. These days you don’t need to raise money.

Working out the value of your internet business can depend on many factors.

In a way…we were talking earlier about the lack of seed money – they joy of it is, you don’t need seed money! That’s…with any luck we’re going to put the seed funders out of business, because you can be one person sitting at home and have a bright idea. It’s not the first time. HP, the big computer company, was two guys in a garage who started building electronic…you know, putting calculators together, I think, or something like that. And you can still go to Silicon Valley, and you can still see the garage that HP was launched in – there’s a plaque, and so on, it’s extremely famous. But back then, they were a complete exception in terms of, in one way…I mean I can think of, maybe Apple, another ten years later, a couple of guys in a garage. But they were exceptions. And now…thanks to the net, you have, about six billion people sitting in front of a computer going, I’ve got a bright idea, and I can actually do something about it and turn it into a business.

Gary: David, I think the other thing that internet communication’s done is actually enable people to reach out for other people to add to their ideas…

David: …absolutely…

Gary: …you go back fifteen or twenty years ago, the only access you had was within your knowledge centre of friends or business associates or whatever it might be, whereas now I can talk to someone – well not even talk to someone – someone sitting in the US and just adding to what my concept is – and that’s it.

David: I think that’s a really fascinating notion…the fact that you can literally reach out to anybody anywhere in the world and ask for help or advice or resource…Skype means you can do it for free, I work with a company that has people in UK, USA, India and Australia. We talk once or twice a week, people in all four countries come together to talk about the business.

Scott: Almost zero cost start up…if you’ve got a computer, which almost everyone has, you can literally buy a domain name for ten bucks, get rolling, get some help from your friends, you don’t need huge capital expenditure, you don’t need to go and buy as much stuff as you used to…and the great thing is, it’s low or zero risk. If it doesn’t work, it doesn’t really matter.

David: You don’t even need an office.

Scott: Especially in the service space…the services are so well suited to that.

David: There’s an Australian company, internet firm, called Remember the Milk, they’re like an online to-do list service, they started a few years ago…and actually somebody was telling me the other day that they’d moved their office to San Francisco, and I was just curious about that – oh, hang on, maybe there’s another bunch of Australians in San Francisco I should look up. And then I checked out online…they don’t have an office! They have about six people employed, you know, working in the business, and they all live in different countries – nearly all live in different countries, they don’t have an office, they don’t have a desk…

Scott: …Skype number in San Francisco…

David: They don’t, they use a private IRC channel, so that is a chat channel, the ability to chat in private online, and there’s no desk, there’s no receptionist, there’s no water cooler, there’s no photocopier, and the business just doesn’t exist except on the internet.

Fiona: Gary, did you want to add to that?

Gary: It’s just the concept of the, the ability to start businesses now with online space is just reflecting on one of our clients, started up a business, electrical goods distribution. You know, they’ve managed to build that business purely on an online model out of half a dozen people in a small office, they don’t have any physical warehouse capabilities, everything is, everyone else does everything that the traditional distribution model used to do, and they don’t do any advertising, they’ve just used the ability of Google and everyone else to get the exposure, and their returns…there’s two aspects of it. One, the risks that they took on in terms of the initial investment were really about developing the web portal and all of that, which was part of their expertise. But they didn’t have to take big leases on warehouses, et cetera. And suddenly they’ve been able to start this business without significant seed capital, and yet they’ve managed to build that business pretty significantly in the space of two or three years.

Scott: And that model, generally, too, I mean, again it’s a generalisation, is much more scaleable. You can go from small size to mid size quite quickly…

David: Well, you don’t have to build a bigger warehouse each month…

Gary: Besides, what they did was they took that model, for electric goods, and they’ve moved it into a completely different area of home furnishings and various other things, so all of a sudden, the investment that they made in building that thing is gone into a completely different thing for next to nothing.

Scott: They’ve got the infrastructure, they can now move around, look for other industries where they can exploit… that’s great.

Fiona: Just on valuations, because it appears that valuations going into the future could be wildly unstable in terms of the ways we arrive at them, um, Gary, for you, what is the nuttiest business valuation you’ve ever come across?

Gary: It was one of those that, going in, we just couldn’t grapple the leverage they were able to get and what it meant, so it was a really difficult one to apply any fundamental principles to, and it had some early stage investment, but they’d actually got to the point of establishing their business model, and were actually generating money. But it was probably the most difficult one I’ve been involved with, and it was purely for stamp duty purposes apart from anything else…

David: (Laughs) Are you allowed to tell us that?

Gary: Ah, it’s alright…but yeah, Fiona, I guess getting back to your point of, will the future of the valuations, the whole methodology, what we’ve been used to…it’s like everything, everything comes back to a balance. You’ve always got things that are at the extreme both ends…the majority of things will still fit back in, because at the end of the day, people are putting up capital for you to return on their investment, and they will weigh the risks associated with one particular investment with another. A lot of people got severely burnt during the early parts of the tech boom. It’s nothing new…I actually equated the early part of the tech boom to mining companies. You go out, you suddenly do some prospecting, you tell people, oh, I think there’s some great gold in the ground, you raise, you know, millions of dollars, dig a few holes and…oh, sorry, it wasn’t there. You move on to the next one! And there was always going to be that sort of risk capital around. And what’s happening is that that risk capital is actually finding itself into a new domain called information technology. So someone’s prepared to pay a billion dollars for Twitter, while maybe it’s…

David: …they think there’s gold…

Gary: Gold, or alternatively, it costs five million dollars just to put a hole down in the ground to try and find oil, and that’s it…if you do find it, fantastic. If you don’t, move on to the next one.

Fiona: I’ve been speaking today to Gary Graco from Nexia ASR, thank you Gary.

Gary: Pleasure.

Fiona: Scott Kilmartin who’s the ringmaster and founder of Haul, with both online and offline business. And David Eedle, who writes this blog with me. Thank you everybody.

David: Thanks Fiona.

Photo: Flickr Matt Bidulph

David Eedle and Fiona Boyd share their thoughts on the myriad opportunities they see in niche business areas in their book about the startup, growth and sale of Arts Hub, Niche Content Millionaire.

Niche Content Millionaire is a downloadable eBook that tells you the true story how we made millions from subscription content and membership websites. Buy Niche Content Millionaire Now