What’s Wrong With My Business

So many people get in touch with me to find out what is wrong their business, why it won’t grow, that I decided to share my answer with as large an audience as possible by posting it online. For the lazy readers amongst you, the quick answer is you have spent so much time online reading, listening, and viewing process driven solutions to your business problems that you haven’t paid enough attention to the fundamentals: the resource your business owns and/or controls. Business is, after all, a resource allocation problem. So the best question you can ask yourself is, “What is my resource?”

For those willing to work through my prose, here is the long answer.

Since businesses use many resources, you might be asking yourself which one I am referring to. To be clear, there is one resource without which any of the other resources are of much use. Also, the resource I have in mind is used in all the products/services your company sells. This resource is so important I call it the Key Component.

A Key Component can be just about anything. It depends on your business. Personally, I have worked with small businesses where the owner is the Key Component – a designer, artist, contractor/builder, architect, health care professional, lawyer, a chef,… – while in others it may be an employee – one of the above. Likewise, I’ve worked with more complex businesses where the Key Component is some form of property like a machine, trademark, land, patent, copyright, process, license, and so on. In even more sophisticated businesses we find what are commonly referred to as derivative products/services that will be based on an underlying property, like a insurance contract, financial derivatives and data.

To be pragmatic about it, most countries have spent centuries developing legal systems that attribute some form of legal status to the Key Component making legal recognition the common element. After all ownership is recognized by the law through titles, deeds, and what not, while control is affected through ownership it is also determined through licensing, renting, leasing, and such.

Legal recognition of the resource that makes everything else in your business possible makes perfect sense when viewed from a competitive standpoint. The law is your first line of defense against competitors. In other words, another economic actor cannot compete against your company using your own Key Component. They must come up with their own.

Let’s look at a base case. The most basic resource which can be considered a Key Component is land. In most societies, the legal system – or some other system – recognizes title to the owner allowing the owner to then derive the benefits that land produces for them. Depending on the land’s attributes it can be used for many different ways and provide many different benefits, such as: farming, grazing, building, mining, transportation, and so on. However, the owner may not want to exploit the land directly in which case it can be made available to another party by way of a rental agreement or lease, or in some other contractual form giving this party effective control.

Of course there are other Key Components. This website is built with software written by someone for which they received a copyright. I get to use it to write this article but I don’t own or control the software allowing the copyright owner to modify it as they see fit. However, this content remains mine by way of my own copyright which means the website or you can’t use it without my permission. Similarly, the website is trademarked and the owner of the trademark keeps all the rights to it. The server on which the software runs is also a Key Component for the company owning it.

Furthermore, legal recognition makes the Key Component transferable. It can be sold outright. It can be used as capital when transferred to a legal entity. A lender can use it as collateral for a loan.

Conversely, the law can limit a Key Component. Let’s take a person working as a chef in a successful restaurant as an example. The restaurant owner will exercise control over the chef through an employment contract. But this may not be enough for the chef. The chef may realize how important they are to the restaurant’s success – the Key Component – that they may seek to negotiate an ownership interest thereby aligning both parties interests in the venture and also further limiting the chef’s courses of action outside of the restaurant. An owner may seek even further control over the chef even after they leave the company by obliging the chef to sign a non-compete agreement covering a certain number of months after leaving, all in an effort to limit competition.

Here is another example. Think of airline. What is their Key Component? Can you guess?

Most people say “airplanes” but this is not correct. An airline’s Key Component is its takeoff/landing slots at the airports it serves. It is for this reason that when there is a merger between airline companies the anti-trust authorities or courts will examine the proposed merger on the basis of how many slots the merged entity will control in each airport in an effort to ensure the new entity does not control too much of the market. If it is deemed too much control may be exercised the authorities may okay the merger only on the condition that a certain number of those slots be sold to a competitor.

Now, think of a franchisee; someone who wants to acquire the rights to a Seven Eleven, for example. What is their Key Component? The trademark maybe? Wrong! The franchisee will get a license to use the trademark but so does every other franchisee. Sure, it is important but it is not the franchisee’s Key Component. The local/geographic market is what they will have effective control over making it their Key Component. It is for this reason that the franchise operator needs to pay close attention not sell the rights to too many franchisees in a given area for they risk limiting franchisee revenues which leads to unhappy franchisees and potentially less franchisees because their poor reputation.

A second attribute of the Key Component is time. A resource will lose its “power” over time either because of age, competition, or law. If you are the Key Component you may not be as effective when you are older than when you were younger. The same can be said about most organic resources, like land, which will lose nutrients the more it is farmed or disappear through erosion. Many machines only have a given useful life as they will become less performant through wear and tear. The law may also stipulate how long title is given on Key Components like intellectual property and contracts. Likewise, as you may have read in many articles, with the increasing rate of competition the useful life of many technological products becomes shorter and shorter. Software, for example, many have a long life by law – copyrights – but competition reduces it to anywhere from 18 to 36 months. In the best cases, you may reach 5 years before a new version needs to be launched.

The Key Component has many other uses in business which I don’t want to go into right now but do believe me when I state it covers everything from: asset to company valuation, mergers and acquisitions, pivoting, growth, cultural and belief systems, central bank interest rates, trade policies, labor relations, wars, and so on. Basically, the Key Component touches on all aspects of our daily life whether we know it, or not.

All I want you to takeaway from this article is this, (1) in order for a business to exist it must own and/or control a legally recognized resource, the Key Component, and (2) this resource is only useful for a certain period of time. Without understanding these two fundamental and important attributes of your business you can try all the process improvement gimmick out there and you will still be asking yourself, “What’s wrong with my business?”

If you are ready to take the next move then please contact my by messenger to schedule an exploratory call.

Telecom towers

Don’t Grow Your Business by Going After Every Opportunity

You, like many business leaders, may be growing your business by going after any and every opportunity that comes your way but not seeing any results. Don’t do it. You will just exhaust yourself and everyone around you. Your business must have a clear value proposition which allows your clients to create demand for you. As demand grows, your business model must be simple enough that you can scale it to meet the growing demand. Now you will see the results you are looking for.

As some of you may know, one of the services we offer is portfolio management which requires us to apply the ROKC ™ Method to publicly traded stocks. In the last quarter of 2015, we generated a 10.81% annualized return for our clients. Not too shabby given the down trend in the market. How we achieved this result was by looking to invest in companies with a clear value proposition and a simple business model. The same advice we give our leadership coaching clients. Doh! So here is an example.

One of the sectors we invested in was wireless towers. If you aren’t curious about how your cell phone works you would never even know there are multi-billion dollar, publicly traded, companies that make the magic happen. In the US, aside from the wireless operators themselves (Verizon, AT&T, Sprint, T-Mobile USA) there are three major players: American Tower Company ($37B market cap. as at the close on 2/19/16), Crown Castle International ($27.5B), and SBA Communications ($11.3B). Reading their annual reports you learn they own and control the land on which they place their towers and they rent out space on their towers to wireless carriers (so you can get service). Music to our ears! Pure ROKC companies.

A business exists when it owns and/or controls a legally recognized property that is used in their products/services, which customers will seek to acquire if it provides them with a benefit.

These companies own and/or control the land: the key component without which nothing else is possible. The key component is used in their products/services: the product is the tower while the services involve the antennas. The benefit for the client (the wireless carriers) is lower costs than having their own.

But wait! Didn’t I write above that the wireless carriers have their own towers?!! Yes, I did. So why is there a benefit? Simple, in some locations the cell traffic may be limited so having a single antenna on a single tower would not be cost effective with respect to usage. Consequently, by saving on the cost of that tower by sharing it with competitors works in everyone’s favor.

In fact, when examining the annual reports, management tells the reader what the average number of antennas is per tower. For example, at the end of 2014, SBA Communications averaged 1.8 antennas per tower while Crown Castle International averaged 2.2. This 22% difference in revenue falls directly to profit because, for all intents and purposes, the cost of the tower is fixed. As you can see, notwithstanding the simple business model the difference between just getting by and being “successful” hinges on very little. In this case, lie any real estate company it is all about location, location, location!

That goes for you, too. Don’t grasp at any and every opportunity that comes your way. Have a simple business model with a clear value proposition and just keep doing that one thing over and over again as you scale because that, my friend, is already hard enough.

Consortium

How To Split Equity In Your Startup?

It seems like not a day goes by without someone posting somewhere on the Internet a question asking how to split the equity in their startup between a founder and co-founders, then with employees, next with investors, and so on through each round funding. Splitting up the shares in a company requires first and foremost attributing a value to the company. Not an easy task at any point in time. However, even more so, when you are just starting out.

Not long ago, I posted an answer to just such a question based on the ROKC ™ Method which was quickly picked up by Mr. Randall Reade, a Board member of Washington DC Tech Fund, Executive VP of Washington DC ArchAngels, and President of Global Tech Exchange, we found our point so enlightening that he asked us to diffuse it as widely as possible.

“Yes, I like that idea! You should spread it around more. And you are correct — it can be difficult to determine a valuation, especially when there is no revenue. Most startups just assume a $1M valuation, and it’s at least a yardstick to go by. But you are correct — many times there is no value.”*

Well Randall, here you are.

The ROKC ™ Method states, a business exists because it owns and/or controls an asset – which we refer to as the “Key Component” – that is used their products/services which customers will seek to acquire because it gives them a competitive advantage in achieving a specific outcome. Therefore, a company valuation can be broken down into elements: the value of the Key Component, and the value of the economic activity that generates the Return On Key Component, or ROKC. Likewise, the Method states that a business will continue to exist as long as the ROKC is higher than the Cost of Capital. Consequently, when valuing a business at the idea stage the business owner has neither the Key Component nor the economic activity making it impossible to attribute a value. Similarly, most early stage businesses may have only the Key Component but not an economic activity making it equally challenging to determine a value. This is why we recommend using a more non-traditional approach: the consortium, otherwise known as a contractual Joint Venture.

A consortium is basically a contract between parties – individuals or legal entities – who come together to achieve a specific goal, which can be work on a common project or jointly provide a service, by way of example. The contract details how the parties will work together and divide up the benefits. It is not a legal entity so it does not have any of the administrative burdens required by law. The consortium is ideal for early stage companies because it is light and creates the conditions for focusing on building the business instead of bureaucracy.

Let’s look at the example of an idea stage business before increasing the complexity. At the idea stage, there is no manifestation of the business yet, there is on Key Component or economic activity. At this stage, there is nothing to bring to a legal entity or a need to limit liabilities so why go through the hassles of creating and administering one. Even to give the idea expression there is no need for a legal entity.

For the first iteration, the “idea person” will a small team to build a prototype. Until the prototype is built there is not Key Component to place in a legal entity making this phase ideal for a consortium since there are two or more parties collaborating. It is at this stage that a contact between the parties forming the consortium can be drafted detailing each party’s role and expectations going forward. To keep things simple, we suggest each party define an hourly market comparable rate for their work and keep track of the time they spend working on the prototype. At the end of each month – or any period agreed upon – each member of the consortium validates the others so there are no conflicts at the end.

Assuming the prototype is determined to be of equal value, when forming a legal entity, each party receives an equity stake equal to the number of hours employed multiplied by their hourly rate, or can be bought out by one or more of the other members. If the prototype is given a value inferior to the time spent times the rate then a percentage based allocation is made. And, if the prototype is worth more the remainder can saved for future employees, advisors or new equity partners.

In the next phase, the prototype may actually be put to work allowing the founding team to determine the business’s market fit. This phase can require a whole series of pivots and adjustments which means more time and resources dedicated possibly by new parties. Once again, the contract can be adjusted to take into consideration each new party and their expectations allowing the work to continue before creating a legal entity.

“The consortium approach has the added value of seeing what you have and can do BEFORE the expense and trouble of founding a company. Focus on the product first, and the determine whether this product and the team can generate revenue. If the answer is no, then why waste all that time and money? If yes, then you can always put it together.”*

As long as the parties to the consortium do not require a limit to their liabilities beyond what they already have entering the economic phase should not be a problem.

So when you launch your next startup, please consider the value of creating a consortium between those who will be collaborating and cooperating with you instead of how to divide a pie which is worth nothing.

 

*Quotes are Randall Reade.

Cooperation and collaboration

What is More Important: Transactions or Relationships?

In its very basic expression, business involves a transaction between a willing seller and a willing buyer. This is, of course, true. You have to sell and collect the money in order to stay in business. And, most of us tend to focus on that part of the equation. However, the precondition for the transaction to occur is the “willing” part, which we tend not to place a lot of attention on. I think this is a mistake, the willingness to engage in the transaction is even more important.

Have you ever been to a really good restaurant but the service is lousy? Have you ever bought a product that didn’t work as you thought it would? Did you ever buy a garment and then changed your mind and sought to return it? Did you ever use a website that promised you certain results but not fulfilled that promise? Have you ever wondered if it is a good idea to work with a colleague, client or supplier? Have you ever asked your lawyer how to add make a contract even stronger than is normal? I could go on and on with example, but I think you get the idea.

Every transaction is based on establishing and maintaining a relationship between between, at least, two parties.

Unfortunately, many of the business leaders who seek out my counsel focus on increasing the number of transactions instead of first focusing on the relationship which will lead to the first transaction and hopefully many more.

I’d like to go even further into this reasoning by arguing that our ability to evolve as a society – even a species – is entirely dependent on our ability to cooperate and collaborate with each other. Consequently, a business can be better understood as cooperating and collaborating at a large scale, with many people near and far.

After all, a business exists because it owns and/or controls a asset that it uses in its products/services which customers will acquire if it provides them with a competitive advantage in achieving a specific task. By definition, the company needs to establish a relationship with the client in order to supports them in what they are trying to achieve.

The real value is in the relationship.

Interestingly, the superior value of relationships can also be found in company valuations. Relationship-based companies like Facebook and Twitter trade for much higher multiples than a transaction-based company like eBay.

  • Facebook: P/B 7.1; P/S 19.2; P/CF 42.2
  • Twitter: P/B 6.4; P/S 14.2; P/CF 172.4
  • Ebay: P/B 1.7; P/S 1.6; P/CF 6.6

(Where P/B = Price/Book; P/S= Price/Sales; P/CF= Price/Cash Flow)

In fact, the most successful Internet companies are successful because they help the user establish and maintain a relationship, for example: WhatsApp, Instagram, AirBnB, Uber,…etc. In the future, with the “Internet Of Things”, I am sure we will see many new companies establish themselves as relationship leaders with things and places, too. Do you have a relationship with your thermostat today? What a bout your front and back door? Your HVAC unit? Doesn’t Telsa manage energy by managing the relationship between the road, the car and the driver? Soon, the car will manage its relationship with other cars, people, the road, …etc.

I’m sure most of you don’t look at the Internet as a relationship platform but, in my view, it is for the very simple reason that at the base of it the Internet is a communication device. And, relationships are all about communicating efficiently and effectively.

But a focus on the relationships does not require us to only look at the Internet. If we recall the list at the start of this article, most of the questions involved traditional brick and mortar businesses. So, I recently asked a couple of my clients to approach their business as relationship building and the results have phenomenal. Client 1 has so much work he cancelled our coaching sessions so he could catch up. And client 2, whom I career coach, for the first time in year, has no problems to discuss with me. So what is the takeaway here?

Focus on building relationships that allow you to cooperate and collaborate and the transactions will follow.

Better to Adapt than Change

When I was in college when I had the good fortune to meet a well respected Time magazine journalist who set me straight on the importance of language – using words with their proper meaning – I have been a stickler – read pain in the …. – ever since. This obliges me to actually listen to others. But, more importantly, I must hearwhat they are saying. So, the other night, for the umpteenth time, someone was talking about how they don’t like to change things in their life and hairs on my back started to rise.

Let’s face it, people only rarely change. On the other hand, people do adapt to changes they perceive in their lives!

Basically, as I learned in my high school physics class, like electrons, we all live at our lowest energy level until such a time when some outside stimulus makes us – or the electron – move to a higher energy state. It is the environment that changes and we adapt to that change. Or, as Darwin’s Theory of Evolution states the most adaptable of the species will survive.

This same frame of reference is pertinent to leading an organization. Way too often, the leaders I speak with want to throw the baby out with the bath water by changing almost everything in their company. This is simply way too destructive and almost never provides the results they seek. Change brings about a break from the company’s foundation, turning it into a Frankenstein monster.

Adaptation is a much more subtle approach for a business responding to a new environment. Regardless of the company’s stage of growth, adaptability means reducing – not eliminating – the influence of the past while placing more importance on some other aspect of the present.

In the ROKC™ Method, we explicitly recognize that the asset on which the business is built, the Key Component, will lose its ability to provide customers with the competitive advantage they seek. Consequently, if the business is to survive, it will to be enhance the value it creates by focusing on a new Key Component. If I think back on my college economics class, this is called the law of diminishing returns. Over time, the returns the first Key Component provides will diminish requiring the focus to change to a new Key Component that will provide higher returns. When the second Key Component wanes, focus will pass to a new one, then another and another and another, and so on into the future.

ROKC_CA_over_TimeLayer upon layer, the business adapts to changing conditions but strengthens itself around its each preceding Key Component.

If your business is challenged by changing market conditions don’t listen to anyone who tells you have to change. However, do listen and hear those who tell you your company needs to adapt.

Don’t Hide Behind Titles And Names. Show Yourself!

At ROKC ™, we focus on strategic leadership as it applies to the business as well as to the business’s leadership. We work primarily with C-level executives and above, but for the rare and extraordinary candidate we will make an exception. After all, they are the “real deal”.

Recently, while working with one of our clients we came upon a very hard nut to crack. Although an excellent professional, the client could not help looking at his world from the outside in. Almost every sentence uttered, or written, involved the name of a position, a company, a software product, a hardware product, a technique,… You get the idea. They had mastered them all. However, in applying the ROKC Method, we don’t place the emphasis on how fulfilling – literally, in the sense of filling you up – all these tools make you feel. We seek to reveal the opposite; what the user brings to the tool in providing their product to the customer.

In order to help our client turn things around, we gave him an exercise to do with his resume. Review each professional experience, explain what he brought to the job, and what the team and customer were grateful for receiving in his contribution. Suffice it to say, this caused our very accomplished and up-coming leader a great deal of frustration. Nonetheless, he persists in this endeavor as I write.

A few days ago, we enjoyed an email exchange which he found “… [a] just marvelous summary and reflection on what [he had written] with a very formulated response which seemingly came out effortlessly,…” Given the value our client found in our words, we decided to share our thoughts and considerations with the larger audience in the hopes that you too can benefit from the ROKC Method as it applies to personal leadership.

Thank you for sharing your frustration with me.

I know this is a difficult assignment but unfortunately it is a mandatory passage. Let me see if I can communicate what I see in your writings below as a way to help you see and then change direction.

Just about everything you write … is from the outside toward you. It is an expression of what fills you up. Well it fills your mind in any case. What I am looking for you to understand is how you fill up the world around you. You are close but you have to flip your perspective around.

For example, [you write] : ‘I reading newer technologies. Putting them together as a solution. Ability to play around with it’

Everyone can read about a new technology but everyone will come away with a slightly different understanding. Consequently, each person will use the information they acquired in a different way. How do you see what you read and how do you use it in the world.

Another example: “today my fascination is with Open Source Technologies”

Are you building these open source systems? Not to my knowledge but may be you are. A person who adds to the open source system by writing lines of code, debugging other programmer’s work, and adding the work to the system library is very different from the person who simply uses the system. I use drupal and wordpress but don’t understand how to code – although I can read it – so everything I do is limited to using modules and plugins built by others. I can build a simple website using these open source platforms much more easily than I ever could when I used ASP.NET. Many frustrating moments back then. I have even tried my hand at Ruby On Rails, JavaScript, JQuery and Java without much success because I just don’t have the ability to start from nothing. Nonetheless, I have wonderful ideas I would like to see out in the world and have put them out there only to see them take flight and then fail. What do you do with open source? How do you use it? What do you bring to the tech? Does it meet with limited success and then fail?

Last example, …: ” I was fascinated with new business models and how things like Porter’s 5 force analysis worked and how it went to compliment Gary Hamels theories on competitive advantage”

Ok, you were filled up by these ideas. That’s fine. How did you understand them? What did you do with them? Did you contribute to them? Improve them? Use them for the benefit of someone else? Did they value your use of their application?

In summary, all these people (Porter, Hamels, Open Stack, journalists, editors, programmers,…) provided you with their riches and this touched you in some way (piqued your curiosity, inspired you,…) that brought you a perceived sense of value. What did you do in return? For them or anyone else? Was your contribution appreciated and valued? Why?

I will tell you how I define business: A business exists when the organization has an asset, they own and/or control, that can be used in a product or service that provides their customer with a competitive advantage, that is, reduces the customer’s uncertainty in life. A business survives only if it is able to implement the processes and manage the risks inherent in their activity such that the difference between the customer’s level of uncertainty and the business’s level of certainty sufficiently important to generate value for both so they can continue to exist in the future. The asset I am referring to, is the Key Component.

What is your key component, …? It is in you so you own and control it but how does it reduce uncertainty for your community? The jobs you have had, like those you will have, are simply the processes you employed at that time to make your key component available to others. You got paid so you could provide for your family and save for the future; it reduced your uncertainty of present of future existence. Each job as given you another opportunity to use your key component. Every future job will too. But if you focus on the job you risk missing the real value which is what you bring to the job. Jobs come and go, technologies come and go, but you stay. You can’t allow your happiness or existence to be determined by the currents of time because that would mean you have no influence over your life; that’s called “free will” by the way. In good times and bad, you have to be you and adapt to changing situations. You can’t change who you are, so you adapt. Technology changes. Jobs change. We don’t change, we adapt who we are. This is why I keep asking you to stop looking at the jobs, companies, and technologies, and to focus on you. Focus on “what you bring to the party”.

I hope this helps.”

And, we hope this also helps our readers with their own personal leadership challenges. If you want to reach out to us with your challenges, we will address them as needed.

John Locke

Locke & ROKC

One of the ROKC Method’s strengths is identifying the asset/property that underpins the business. Often, we find that business leaders have forgotten all about this oh so very important asset in favor of more the technical aspects of business. We don’t want to make the same mistake. On the contrary, we want to set the example by clearly identifying the philosophical underpinnings of the ROKC Method.

Whenever we look at a business, read the newspaper, watch a news program, or even analyze domestic and international policies, we see a very clear set of mechanisms at work around property. The only thing that changes is the degree to which property can be factored into the analysis, which varies from market to market and country to country. Nevertheless, it always reveals fascinating stories.

By why is this?

Property and the rights of ownership go back hundred, if not thousands, of years to antiquity. We can even trace property issues through Europe’s Dark Ages to the Renaissance. But our focus is on the period of Enlightenment with the influential writing of John Locke.

As a Wikipedia post on states, “John Locke (29 August 1632 – 28 October 1704), was an English philosopher and physician regarded as one of the most influential of Enlightenment thinkers and known as the “Father of Classical Liberalism”. Considered one of the first of the British empiricists, following the tradition of Francis Bacon, he is equally important to social contract theory. His work greatly affected the development of epistemology and political philosophy. His writings influenced Voltaire and Rousseau, many Scottish Enlightenment thinkers, as well as the American revolutionaries. His contributions to classical republicanism and liberal theory are reflected in the United States Declaration of Independence.”

With regard to the ‘Theory of value and property’, the Wikipedia entry goes on to state:

“Locke uses the word property in both broad and narrow senses. In a broad sense, it covers a wide range of human interests and aspirations; more narrowly, it refers to material goods. He argues that property is a natural right and it is derived from labour.

In Chapter V of his Second Treatise, Locke argues that the individual ownership of goods and property is justified by the labour exerted to produce those goods or utilise property to produce goods beneficial to human society.

Locke stated his belief, in his Second Treatise, that nature on its own provides little of value to society; he provides the implication that the labour expended in the creation of goods gives them their value. This is used as supporting evidence for the interpretation of Locke’s labour theory of property as a labour theory of value, in his implication that goods produced by nature are of little value, unless combined with labour in their production and that labour is what gives goods their value.

Locke believed that ownership of property is created by the application of labour. In addition, he believed property precedes government and government cannot “dispose of the estates of the subjects arbitrarily.” Karl Marx later critiqued Locke’s theory of property in his own social theory.”

Undoubtedly, Wikipedia is not the most authoritative source on Locke but we don’t pretend to be academics. All we want to point out is the influence John Locke’s thoughts about property had on the “Founding Fathers” and the U.S. Constitution which is the basis for all the laws that govern the country today. In fact, right from the beginning, only white men of property could vote in the United States. It would take around 100 years before women acquired the right to vote. Consequently, it was these land owners who shaped the laws of the land and exercised their influence to shape the way business is conducted.

According to a number of studies, the level of concentration of wealth and power in the hands of so few resulted in the Great Depression of 1929. A concentration not seen again until more recently because of the counter-weight of Communism during a the greater part of the 20th Century. Since the fall of the Berlin Wall, property and property rights have been integrated into the laws of most countries. At the start of the 21st Century by all former Communist countries: China and Cuba, in 2009.

Without expressing a judgement for or against property it is fundamental to our understanding of how business, economics, law, politics and international relations work in today’s world. To ignore this reality is to play the ostrich and bury your head in the sand.

The ROKC Method explicitly recognizes that businesses exist to generate a return on a property. This can only be achieved if that property is of value to the customer.

 

ROKCing Brainstorming Sessions

This is our response to the article “Critique is Not the Enemy“, by Professor Alf Rehn, August 7, 2014, on the International Coach Federation blog.

In my experience, when something doesn’t make much sense it is only because we haven’t fully understood it. The same can be said for brainstorming.

Yes, it is touted as a technique for generating a free flow of ideas but as professor Rehn states the energy dissipates very quickly and any criticism is perceived as negative feedback killing off whatever involvement is left. Thus, brainstorming is not a very effective way of achieving the stated goal. Therefore, it must mean the goal is wrong.

Brainstorming is much more effective when simply seen for what it is: a technique for creating a greater sense of community cohesion. As any good performer knows, you have build a rapport with your audience, they need to feel involved in what is happening. There needs to be a connection. Professor Rehn implicitly recognizes this by starting his article with the example of a meeting already in progress that is interrupted to start a brainstorming session. The challenge is for the facilitator to generate audience involvement convincingly or risk losing his audience altogether. Using equal and evenhanded responses or plastic smiles will not cut it. However, just like a comedian will pick on certain members or groups in the audience in a playful way to create and keep engagement, the facilitator can do the same with their feedback, or criticism, to orient audience involvement.

Are You Your Key Component?

Let’s face it, history and philosophy and politics and economics and religion are all intimately intertwined. At ROKC, we focus primarily on the principle that property – what the business owns and/or controls – is the bedrock on which businesses are built. And for the most part this is historically true.

However, there is also the off the chance that we are at an historical turning point. It is our view that once an individual’s basic needs are satisfied they can aspire to a more fulfilling existent. Over numerous years of working with leaders across the world we have come to the conclusion that the ultimate expression of humanity of expression of the self. Not an easy thing to do. And leaders – with their qualities and defects – are truly good examples of people who are able to express their essence to the fullest.

When we think of business, we start with an asset that is owned and/or controlled that brings your customers a competitive advantage, makes their lives less uncertain. All the processes and risk management a business engages in to make their key component available to customers is the means. So if we transpose this model to the individual then we can make the case that who the individual is, their essential being, is their key component and all the decisions they make about schooling, work, friends, significant others,… is like the busy part of a business. They are there to make those essential qualities that the customer values available to them.

There is an enormous amount of research to support this thesis so we won’t go into it here. However, this framework should help you to gain a number of insights into yourself and your life that are quite revealing.

Likewise, there is a stupendous opportunity upon us. Using “Big Data” not for the benefit of the few but for the many. Employing the techniques of big data, it might be possible to unlock a new perspective on our individual selves such that each one of us becomes our own means of production. By mastering ourselves we can bring our own personal sense of being to a customer base that values us and compensates us for being who we are. Fascinating! No?

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