A Marxist-Capitalist Manifesto

What is this article about? And why am I writing it now?

Well, while on holiday recently, I took the opportunity to put down what our company, Webmart, is all about – the way we do things, and why, and to take from it the wider lessons that we’ve learnt over the 16 years we’ve been in business.

At times, if I’m lucky, it will be insightful. It may, predominantly, be a
disjointed ramble! As a busy MD, I rarely get the chance to take time
to put my ideas down in writing. So I thought this would be the best
way of sharing with a wider audience some unusual experiences that
we have had in the Yellow Shed. It will evolve, be added to and
refined in the future, but in the best Northern way, it says it as it is now.

Over a number of years, visitors to the Yellow Sheds in Bicester, Barnsley
and East Kilbride have felt that our business is different from most of
those they see. Often people have tried to delve into why this is. It all
comes back to the rather unusual economic principles behind running
the business that is Webmart – to its unorthodox approach and to the
way it works with people rather than, as is so often the case in the
“capitalist serf” corporations, against the people around it.

Marxist-Capitalist principles run Webmart. They guide the features and
benefits it brings, not only to those who work within the business but to
the wider business world as well.

For a PDF version of this Guide, click here.

A Few Basics

Business is pretty simple really. You understand what your customers and suppliers want. You match it, at a price that they are happy with. Then you want to keep doing that as often as you can to as many people as you can, to deliver the maximum benefit you can to all. It
really is as straightforward as that. If you cut all the rubbish you hear
about red tape, etc., out of your thinking, that’s what a business leader
has to achieve.

In Webmart, we’ve always believed that the fundamental buildingblock
of a successful business is its people: they make or break any
organisation. So, you have to trust that people, if they are given free
rein and left alone, will fundamentally do the right thing. It’s only when
there are incentives to do the wrong thing that they generally will.
Such incentives may be internal or external. So, fundamentally, you
have to give the right people the opportunity to do the right thing,
within an incentive scheme that rewards them for doing the right thing,
and things work out just dandy.

In parallel with this, one of the strongest forces for doing good is
transparency. If what you’re doing is clear to others around you, then
the chances are that, even if there is a temptation to take shortcuts or
do things that aren’t right, you won’t – because you care about what
your peers think about you. So, as a business, we’ve always tried to be
as open as possible, both within and outside our rather porous, illdefined
boundaries.

Webmart was set up within an environment where experiments could
take place in running a business and managing people differently,
without outside investors/banks or organisational structures stopping us
doing the things we thought were right. Even when (with hindsight) it
turns out to be wrong – it is a rare luxury we have worked hard to
maintain in the past and retain for the future.

A Brief History of Webmart

Webmart was set up in 1996, as an “intermediary” within the printing
industry. We saw there was a need (and opportunity) for a freelance
sales team to sell the under-utilised capacity of printers to customers,
giving printers higher profits whilst giving customers better value.
In the previous companies I’d worked for as a sales director, there was
a problem. When we had spare capacity, the only way we could sell it
effectively was by trying to do so to the same customers to whom we’d
previously sold at a premium price. We’d built up a relationship with
them over time and nurtured it with a very expensive sales resource.
We now hoped to sell more to the same people but with a discounted
offer. It made no sense, but there was no alternative “sales channel” to
fill the presses.

And so, at Webmart, we launched on a different path to deliver a new
way to sell printing on behalf of printers, to clients. Sixteen years later,
we have three headquarters strategically located in Bicester, Barnsley
and East Kilbride. We employ nearly 50 people. We have won many
awards – including Print Company of the Year and a prestigious
European Business Award. We are a sustainable (economically and
environmentally), charitable and altruistic company. We work hard
and have fun. We have never borrowed money or had debts. We
have always been profitable. It has worked for us, our suppliers and
our customers.

Webmart Beliefs

So how did we get there? Well this narrative (more like a cathartic
braindump), is themed around certain core values. They will form
‘chapters’ which you can look at individually or as a whole. Eventually,
I might pull it all together to form something called a ‘book’. And print
it. At the moment, it’s here as a draft, for you and me to dip in and out
of, as and when we feel like it!

Underpinning the narrative are key themes. You will see them time and
time again, because you have to look holistically at people and
markets. That means that you have to look at the same subject with
different eyes – from your perspective of course, but most importantly
from customers’ perspectives and those of your suppliers: the same
view can give you three different “takes”. It is this triangulation of
perspectives (me, you and them) that gives strength, depth and
robustness to your thought processes.

I’ll be using the analogy of triangulation many times in the themed
areas I run through. A triangle is, after all, one of the strongest shapes in
nature. And the natural world gives us huge lessons in business – in
terms of evolution, adaptability and flexibility in the face of massive
external forces. [It is a subject for another time to discuss how even
things as simple as single-celled organisms have proven to be more
adaptable, and therefore have greater longevity, than the most
complex structures – see a number of examples on www.TED.com.]
History is another perspective I draw on repeatedly. To me, history
gives a very real, third dimension to everything we see in the here and
now. Human beings haven’t changed materially over many millennia;
evolution takes much longer than that. So, as you look back through
written history, the people who did exceptional things then are exactly
the same kinds of people as we have today. I believe that we have a
massive opportunity to draw deeply on history, on previous experience
and on previous ways that humans have reacted to given
circumstances, in order to achieve exceptional things.

Lots of others have felt the same thing as I do. For example, “Those
who don’t know history are doomed to repeat it.” ― Edmund Burke and
“The farther back you can look, the farther forward you are likely to
see.” – Winston Churchill. This is why, for me, history is an incredibly
vivid, living and vital part of helping to contextualise the present. After
all, why look in 2D when you can look in 3D?

Another theme that runs through the narrative is my upbringing. I was
lucky, and feel honoured, to have been brought up in Barnsley, South
Yorkshire. It is a magnificently rich place – not in a material way, but in
a richness of spirit, generosity, directness, common sense and
friendliness that you too infrequently see elsewhere.
Most people look at the visible veneer to determine whether they like a
place or not. Actually, however, (like humans) it’s what’s underneath a
community’s skin that matters, rather than what’s there at face value.

Finely clipped hedges and beautiful buildings don’t guarantee a
fineness of thinking or personal quality living behind them – quite the
converse in both people and property. Some of the most fantastic
people are found in unusual places. Certainly Barnsley has been a
massive part of my life, even though, for the majority of it, I have had to
live away from it due to economic circumstances.

The themes that come through from that and the qualities (as I see
them) of my northern upbringing have been:

  • Being able to look at things without preconception – i.e. to take
    things at their face value.
  • Being direct with people – not in a harsh, but in an honest, way. This
    sometimes doesn’t tell them what they want to hear, but at least
    they know where they stand with you. There is no “front”.
  • Showing common sense: it’s a rare commodity, but a very powerful
    force. I think people from Barnsley, through often having to “make
    do and mend” and not having the economic wellbeing that many
    parts of the country have, show this in many ways.
  • Up North we trust people – until we have a reason not to. In
    contrast, in some parts of the country, you have to spend many
    years earning trust before people accept you. I think this is a great
    failing. As a result, you don’t have the openness you would
    otherwise have with people. As you will see later, I find that giving
    trust as soon as possible is a massive opportunity to have an honest,
    meaningful dialogue with people much earlier in a relationship.

So these traits and my northern heritage have perhaps given me a
different perspective from many others in our business. I also lived
through the experience of the miners’ strike in 1984.

When I left university early (I couldn’t get my head round some of the
maths on my economics course to the level I needed to, even though I
understood every other aspect of it pretty damn well… only “O”-level
maths wasn’t enough!), jobs were hard to find. The government at the
time under Thatcher decided they wanted to make a stand against
the miners: they basically used the entire might of the state against a
section of the country, with disproportionate force. In a proud part of
the world there was a backlash. The miners’ strike went on for a year
before they were starved back to work by the Conservatives. All this
galvanised an awakening in me of how fundamentally wrong it was for
a strong establishment to force their will on the weaker.

These experiences, in a part of the world that has been consistently
deprived, economically and socially, either radicalised people (in my
case) or crushed their spirit; indeed many are still recovering from the
experience, some 30 years on. They gave me a different way of
viewing life. I applied my understanding of economics to a more social,
and socialist, approach.

I realised everyone wants the same kind of thing – for people who
achieve greatness to receive a full reward for it, but also to look after
the less-well-off in society. For me, capitalist principles of wealth
creation and the Marxist principles of wealth redistribution should work
together. Capitalism is good (not fantastic, but the best way we have
found so far) at creating the wealth that delivers the resources to
create the benefits and necessary economic surpluses (which
historically have gone, of course, to the capitalists).

Marx reflected on this. In the same way that Malthus, many years
before the Agrarian Revolution, had decided we were all eventually
going to starve to death, Marx expected a capitalist revolution to be
born out of the rapid industrialisation of the UK. He came to the
inevitable (in his eyes) conclusion that the rampant exploitation of
workers at the time (and still in many parts of the world) would lead to
workers rising up, so creating a revolution and forcing capitalist owners
to give the surplus economic wealth created by the workers’ hard toil
back to the workers themselves.

Mmmm. As neither of them had looked into history well enough (in my
view), neither of them was actually right. Although both of them had
identified the problem, they hadn’t worked out the effects carefully
enough. Yet history give us the understanding and perspective of how
human nature has the ability to change in so many different ways.

For example, why do we have an “aristocracy” in the UK, when in most
parts of the world there isn’t? It’s simply because the English aristocracy
was more flexible and skilfully self-serving: they realised they had to
give, through a series of tactical withdrawals of political power, just
enough to keep themselves in power and not lose their heads. In the
same way, in the Agrarian Revolution, the innovation and flexibility that
many demonstrated, by using engineering and agronomy to create
solutions to problems, solved Malthus’s dilemma of how to feed a
rapidly growing population.

Likewise, Marx had taken his thinking as far as deciding that capitalists
wouldn’t give up their wealth voluntarily. He therefore concluded that
a revolution would have to take place for the workers to get their just
deserts. Unfortunately for his theory, we now know that capitalists are
brighter than that: they realised they could get what they wanted by
giving more to others in the form of share ownership, bonuses, incentive
schemes, etc. These permeate the world in which we live.

This fundament belief that (i) capitalism is an efficient way of creating
economic value and (ii) the inherent Marxist fairness of redistributing
that surplus wealth to the people who deserve it is, to me, liberating. It
gives me a coherent, simplified way of looking at the world.

It shows how to deliver optimal value to everybody, both within and
outside one’s direct sphere of influence. It also can do two other things
- reduce the undesirable, under-recognised by-products of a capitalist
system (e.g. pollution, exploitation of workers, poverty and the
denuding of the natural environment) and remove the potential
failings of Marxism (e.g. a dependency culture, a lack of initiative and
everything sinking to the lowest common denominator).

There is, however, a better way. And that is the way we run Webmart –
combine the best features of capitalism and Marxism to create
something special. We are on a journey. We are far from our
destination.

There are things that I want to do that we haven’t tackled yet. There
are also things that we should do that we don’t do fast enough; I hope
this will spur further improvement in what we do. We are far from
perfect, but we hope to improve every day just a little bit, to get closer
to what we want to do as a business – to create great value for those
inside and outside our organisation.

So, without further ado, I’ll crack on with each area and follow that
logic through.
December 2012

Everyone wants to maximise three things, and three things only, in
working with, for, or alongside other people – to achieve them in their
life and, hopefully, give to others. Within Webmart, these are the three
basics that underpin how we look at every opportunity, challenge or
improvement. Our objective is to get the optimum fit within this
“virtuous triangle” (and here you see again the tripartite approach to
the way that we think) by maximising

1. the emotional return,
2. the intellectual return, and
3. the financial return

of every person who acts for us, is affected by any actions of ours in the
marketplace, or benefits from improvements we bring to the business.
If you think about it, increasing the wellbeing of people as much as
possible is the essence of life – be it in friendship, family, society, politics,
religion, in anything I can think of. At one level, things are very simple.
However, don’t just look at the internalities (i.e. the effects of what
you’re directly trying to influence), but look also at the externalities.
With this in mind, this [blog/book/blook (!???)] is going to look at things
in two ways – firstly as an introspective, and then as a extrospective. I
want to show that, when you make a decision or change, you have to
look at both these perspectives together. I argue that you cannot look
at them in isolation, because otherwise the law of unintended
consequences always comes back to bite you in the arse.

In this way, decisions start to have a framework; you consider the three
areas above, looking internally and externally to create value. The
right way forward then becomes pretty self-evident and is usually
(although not always) possible or easy to do. A lot of the unfairness we
see outside in the world comes from people looking too introspectively,
but ignoring totally the extrospective approach. They look at “what’s
good for me”, but not at “what’s good for all”.

This fundamental selfishness has caused some fantastic companies,
organisations and countries to lose their way, because they didn’t think
enough about what was going on outside and around them. Only by
having this external perspective can you have a truly sustainable way
of creating value. If you don’t, success becomes transient and
externalities come and bite you. You see examples everywhere of
competitors blindsiding other people. Companies like Enron were
fantastic in their day, but lost their way completely through internal
greed and a poor moral code.

The ethics of organisations are interesting. Some individuals have their
own religious views and others have none. But all of us have our own
moral code to work by. On a personal level, the one thing I got out of
the profoundly disappointing time when I went as a child to Sunday
School was to “do unto others as you would have done unto yourself” -
a moral code I always try to follow. This neatly tells us to look at the
externalities of our decisions, to have a belief underpinning everything
we do, and to do the best for everybody, not just for yourself.
Clearly, if you are a selfish bastard, then even looking externally isn’t
going to make a lot of difference. You are still going to look after
what’s right for number one and bugger the rest. But, as we see time
and time again, such people have a short-term blip upwards and then,
nine times out of ten, (or, more likely, using Pareto’s Law, eight times out
of ten) come a cropper. Total self-centredness wins neither plaudits,
satisfaction nor respect. You can have all the wealth in the world
(hello, Fred Goodwin and Bob Diamond), but everybody thinks you’re a
twat -unless you live in a rarefied world of similar types who are all
doing the same thing. Then you deserve one another, and it’s left to
everyone else to hate you.

Democracy in the Workplace

Don’t you find it funny that wars are waged to establish the principles of
freedom, liberty and democracy, yet most of us work in places where
an autocratic and dictatorial style is seen as acceptable, even
desirable? Why is this? Why is it so laudable to put brave people’s lives
on the line to try to instil democracy in a far-flung part of the world
(where they don’t want it, where it isn’t part of their heritage and where
it will never happen by force anyway), but it’s seemingly ridiculous to
have a democratically run organisation that is successful, desirable
and world class.

Unlike most societies, companies are generally set up by individuals or
a small team. They’re in charge and, although they may give away
shares, options or a certain amount of power, the underlying feeling is
that they’re still in complete control. It’s very unusual for companies
with established management and ownership to give away the
company to the team, in any real sense, emotionally, intellectually and
financially.

It can happen. In the UK, the John Lewis Partnership is a notable
example of how an inspired leader did just that. Interestingly, however,
if you look back through history at the reasons that they formed the
“partnership”, management was worried at the time about the
communist threat within the UK. They thought the best form of defence
was attack. They feared the workers would rise up and take it all
anyway, but, by “giving it away”, they would keep an element of
ownership. Depending on your viewpoint, their action was either
enlightened or pragmatic selfishness. But let me not digress, it works.

The trouble with workplace-democracy is that it isn’t a very effective
way of running a business. You may get personal fiefdoms, become
political and get all sorts of misalignments, as people start to put their
individual wellbeing above the collective good. Nevertheless, the
same single-minded focus that you may have in a traditional,
hierarchical organisation can be meshed with much greater
democracy within the real decision-making programme. Democracy
doesn’t necessarily equate to weakness. It does, however, need a set
of rules which everybody believes in and plays by: decisions have to be
for the greater good, not for individual wellbeing only.

At Webmart, we’re trying to widen leadership and empowerment
within the business. Although it’s very much work in progress, the
interesting thing is that the deeper you engage people in it and the
more you share information with them, the more they understand how
to run the business – and the more they get a ‘view under the hood’ of
the business, the greater is the emotional, intellectual and financial
return that the business gets from everyone in it.

This thrust clearly means that the business has to have the right type of
people, folk who can take responsibility and relish it. Yet no
organisation has 100% of the right type of people. So there need to be
self-regulating mechanisms built into the system, with appropriate
checks and balances, and a clear alignment of purpose. This is where
our incentive schemes, training and constant feedback come in. They
foster teamwork and help us to identify the democratic leaders of
tomorrow.

I genuinely believe that a more democratic approach to leadership
and ownership (the two go together and take “ownership” in all the
three senses I’ve mentioned) will be a source of sustainable advantage
to us in the future. This is especially true of the intelligent young people
who are coming through the ranks now, who don’t respond well to the
old “command and control” system. They want to work “with a team”
not “for a company” as my generation did. Look how TripAdvisor has
replaced Egon Ronay and also Amazon’s referral system has replaced
editors’ recommendations.

People like to be empowered. This social-mediaesque approach to
decision-making will permeate the most progressive companies – and
should. The leadership of many current businesses needs to realise that
dictators don’t win in the long run, whereas democracy, with all its
flaws, has a much better track record, long-term sustainability and
inbuilt rejuvenation.

I was in Libya three years ago with my dad on his 70th birthday, in the
small window between them being a pariah state and where they are
now. In all honesty, there is no way you could have known at that time
that Gaddafi was going to be toppled within a couple of years. His
images were everywhere. I even bought a watch with him on its face
to wear when I next went to the USA :-) When we talked to people,
there was no great desire for change, just grumbling about the state of
things. But, lo and behold, a spark toppled the old regime of
command and control and a new one is being put in place.

I feel there is a similar business revolution coming. It won’t necessarily
be a bloody one, but it will change the leadership style of the majority
of companies that are out there. Workers won’t rise up with pitchforks,
but will simply take their services elsewhere, if the style of management
doesn’t resonate with them: why should they (the most able anyway)
work for a dictator who doesn’t listen to them, whereas in a
democracy, even though you might be a minority, you have a say in
what goes on?

This is a big challenge for most people of my age who are now leaders.
They were brought up in a style that was dictatorial and are now
expecting to be dictators themselves, showing ‘strength’ and ‘proper
leadership’. Yet the world has moved on and that style is no longer
relevant.

So think of social media management as the desired way of working -
a consensual approach with rules, with guidance, and a right way of
listening and being voted on (or liked or commented on). This is the
way that the next generation of businesses will be run. You are either
with it or you are going to be left behind with the least able people, to
be eventually overthrown yourself in your market or increasingly
irrelevant in the same market. Neither is a great place to be. So think
how you can engage in a more consensual and open way with your
team – unless you want to be the next dictator to be toppled when
there is an uprising.

Marxist Capitalism in a Social Media World

One of the things I’ve noticed, as we move on through the
collaborative world that we live in and adopt a more enlightened form
of capitalism, is that you need to have a more enlightened view on life
generally. For me as a man this has been slightly disorientating.
Personally, I hate praise. Don’t know why, but it just makes me feel very
uncomfortable. As a consequence, in the first years of Webmart, I
never gave anyone else praise. I thought that if they did a good job,
that was what they were paid for. If they didn’t, I had to give them a
bollocking. This was the way that I’d been treated as a sprog and, as I
didn’t ever feel particularly comfortable giving praise, I didn’t think
anybody else would. So I didn’t bother. How wrong I was!

The thing that I find strange now is that the younger generation feel
much, much more comfortable about saying ‘well done’, ‘thank you’
and ‘great job’ at any given opportunity – even (beware) when it isn’t!
They’re always ‘liking’ things. They’re always wanting to be liked. The
approach they take is actually much better than the old approach of
telling. I’ve realised that effective business leadership has changed
from exhibiting “alpha-male” characteristics to ‘female’ traits. It’s very
much more about listening than telling. It’s much more empathising.
Unless you do that, you’re missing a central trick to bring your team
along with you.

One striking thing for me was when I went on an interesting
‘Wavelength’ course, that a very nice chap called James Timpson
introduced me to. This is a course for (generally corporate) business
leaders to think about a more socially aware side to their business.
Most people there were in their forties, working for big
organisations/corporations. They lived just in a world of KPIs, corporate
policy and compliance, etc. There were some real revelations for
some of these people: they had never thought outside their little
cubicle, their box, their bonus and their next company car. For them it
was all very enlightening – revolutionary in fact. For me less so I feel,
because I’ve always been acutely aware of the social responsibility
that business has and the way that we can make a positive or
negative impact on the world around us.

There was, however, one thing that was staggering for me. There were
two people that were doing speeches. One was Greg Dyke, who used
to be Chief Executive of the BBC and a bit of a hero for me, because
of his outspoken directness, his socialist views, his working class
background, his clear intellect, drive, creativity, ability, etc. He talked
about his time at the BBC and TVAM and what he did. I was ‘yeah,
fantastic’. He talked very much in a kind of ‘right we did this, we hit
that, we approached that and we knocked down all the barriers’ – all
the kind of stuff that you expect. I loved it.

The next person on was someone who’d been head of the Prison
Service in Great Britain. He took a very different approach. He was a
modest man. He talked about his lack of clarity of vision, his
vulnerability in key decision-making times, the indecision he had felt at
times and the random nature of his career. He felt he’d done his best,
but really didn’t feel worthy to be the leader of a such a big
organisation, was always surprised when things worked out well, and
was not entirely sure how it had worked out. He came across as to me
as a weak leader.

At the end, there was a Q and A session, where the two guys sat on the
settee. Greg Dyke had one question from me (can’t remember what it
was), but the other guy had every other question. At the end of it,
there was a line of people queuing up to talk to him, while Greg Dyke
sloped off back to London, without one person queuing up to have a
chat about his experiences. I noticed that the majority of people
queuing up were in the younger cohort (the course was also open to
social entrepreneurs, of which the majority were under 30 – there’s a
lesson there). It made me realise that the more vulnerable you
(apparently) are, the more ‘authentic’ you seem to be as a leader
these days. People don’t seem to want strong, ‘macho’ leaders. They
want people who are honest about themselves and their weaknesses
and frailties – a great change from 20 years ago.

Then think about the playground of your youth. The boys were all
about winning at all costs, beating the opposition, and using their
power to charge around the playground. Whereas girls were, typically,
chatting, listening, trying to be inclusive and trying to understand one
another’s point of view and feelings, to ensure that their friendship
group was cohesive and that they had a better understanding.
Those are the traits that business needs these days. Business leaders
and companies that understand that ‘female’ traits are in the
ascendant will be much more successful in the future than ones that
believe the old style of machismo is the key to success. This bodes well
for breaking the glass ceiling and removing wage inequality between
the sexes at the same time. The faster companies realise this, the faster
they will gain competitive advantage in the next ten years.

Management-free Zone

One thing I’ve tried to do is to reduce, wherever possible, the need for
‘traditional management’ within the business, for two reasons: one, it’s
dull and, secondly, it’s broadly unnecessary these days. If you think
about management, it’s often simply a way of disseminating
information from the people that do things to the people who lead
things (and vice-versa). If, however, you have a much flatter
leadership structure and an empowered set of doers, then there is less
gap between the two, or indeed none. So what on earth do you need
management for?

Yes, clearly, you need to have structures in place to achieve a
meaningful understanding of what is going on. You need to have a
synthesis of data. You need to have vision, purpose and insight. You
also need to have reporting structures in place and to have discipline
within the organisation. But, increasingly, the people you employ – or
certainly the people that prosper in this day and age – are self disciplined, within structures that broadly do the right things and get things to you in a timely manner.

So, we’ve replaced an awful lot of the day-to-day management stuff
by dashboards which have KPIs embedded within them. We also have
a set of tentacles out into the marketplace (client side, supply side,
and within the business) to give real-time feedback on precisely what’s
going on within our sphere of influence. We then make it open for all
to see. It’s increasingly difficult (and undesirable) to tell people what to
do. If you have the right people and measures in place and give them
open information, they tend to do the right thing anyway. Increasingly,
Webmart will become a management-free zone.

That doesn’t mean to say that other important areas are going to be
eliminated as well, since these will be ever more important in the next
ten years. One of these crucial aspects is leadership. For us, this is
based around a moral code. It isn’t narrowly prescriptive, but
underpins a strategic alignment of the business, to deliver a
comparative advantage both to the team and to the suppliers and
clients outside the business.

A second vital thing is mentoring. In a less command-and-control
world, where you are not continually telling people what to do,
mentoring is really important, so that people, finding their way in this
less regulated world, do so with the right tools and right understanding
and experience. Mentoring is a fantastic way of disseminating other
people’s experience into their own context, to give them a fast-track
way of achieving their maximum potential, emotionally, intellectually
and financially.

There are loads of books on leadership and mentoring, but they seem
pretty dry. Yet both of these skills are really important to pick up on.
On the mentoring front, I’ve found that engaging with school students
is a fantastic way of getting the mentoring-skill set that you need, with
a low risk to yourself or the business. It also fosters links with educational
establishments – vital for both the educational establishments (which
generally see business as a threat and an interference instead of an
asset…though that will be an entirely separate subject) and the
individual.

The more you are a mentor to somebody, the more you gain. In fact, I
would suggest the gain from mentoring is 50/50 to both the mentor and
mentee, and is a key way of self-managing. So we are going to
instigate within our business a two-sided mentoring programme, where
it’s more of a discussion both ways than a tell-and-listen time. It will be
interesting to agree a set of improvements and KPIs running from this.

One of the most innovative things we’ve done for the last 4/5 years is
total peer-to-peer assessment, twice a year. In this, individuals decide
whom they interact with, as an average, within Webmart. They rank
everybody who is average or above in terms of their positive
interactivity and then do an individual appraisal, totally anonymously,
on that person. This central criterion isn’t in terms of the achievements
of their individual targets, but their ability to be an effective team
player – i.e. things like ‘how well I share information’ and ‘how well I
communicate’ all the way down to ‘how well I take a joke’.

This has been fantastically insightful for everybody. For example, it
helps both people who have a high or a low self-perception (because
we do our own self-appraisal, and the gap between the team
appraisal and the individual appraisal can be quite illuminating!). It
also gives a great pool of objective information: the reviews mention
individuals, but become less personal (with only their head of
department telling them what they think of them) and more
consensual (‘what the team thinks of you’).

Webmart survey form

First stage – rank according to interactions

Webmart rankings

Then rank each individual’s performance

These reviews are personal and confidential to their head of
department and themselves. The only one that is made public to all
staff is mine. In this way I have an accountability that most business
leaders don’t have: individual staff can, honestly and without fear of
attribution (or retribution!), tell me what they think of my ability as
leader and fellow Webmarteer. The benefit to me is that I have areas
to work on every six months, and I try my utmost to do this. It’s very
difficult for business leaders to get that level of objectivity from people
whose livelihoods, one way or another, depend on you, but this system
has really worked for us. I’m now looking at extending the approach to
suppliers and clients, in a deeper way than on the job-by-job basis that
we do at the moment.

As you can see, therefore, the traditional role of management is
withering away. It is being partly replaced by crowd-sourcing of data
and the transparency of this wealth of data amongst the team. We
believe it gives us a competitive advantage and a greater ability to
identify the strengths and weaknesses/training needs of the team.

For example, a combination of ‘interactivity’ score and ‘individual’
score (individual performance x highest interactivity score) shows us
who is the most influential person within the business at that moment in
time. It also shows the person with the most underutilised potential
within the business (highest individual score, but lowest interactivity
score) and the most disruptive person (highest interactivity score,
lowest personal score). How many businesses would love to know that
within their team! All this is now possible because of the changes in
society, where people are becoming more open and where the tools
for the job are available.

So, over the next ten years, I genuinely believe we will have leaders
and mentors, and that the phrase ‘manager’ will become more and
more quaint and of yesteryear – if we use a much more collaborative
way of working and reporting, and have the accountability that is out
there. After all, if TripAdvisor can do it with restaurants, we can do it
with our co-workers.

Maximising Emotional Return (in one word – Kindness)

As I mentioned earlier, the three areas of added-value return that we
try to achieve at Webmart are emotional, intellectual and financial -
and that kind of covers everything. The emotional return is really the
most important, I would say, on a Maslovian scale, because it’s the
nearest to self-realisation. I’ll cover off the other two in another
chapter, but what we’ve found is that being thoughtful about
individuals as people gives you significantly greater engagement to
achieve the objectives of the organisation. This isn’t rocket science, but
it’s unusual for companies to look at their attitudes in that way.
So, if you concur that maximising the emotional added value from
working within your organisation/company is really very important to
the effectiveness of your overall organisation and the achievement of
its objectives, then you come to the following conclusions:

1. You need to capture, reward and share when people do well;
2. You need to have triggers within your systems to capture 1;
3. You need to have communication channels to share best 1;
4. You need to ensure that everything is applied consistently and
reliably across your organisation to create more 1.

No 4 has been the most difficult to implement in a fast-moving
organisation like ours: you try to do one thing, and then you forget
about getting the processes in place to get a consistent approach.
Once you realise that this omission clearly has a negative effect on the
emotional wellbeing of everybody else around you, then you need to
get a robust process in place as quickly as possible. We now try to do
this as standard in the following kinds of ways:

  1. Champagne for referrals, recommendations and birthdays;
  2. Books as joining gifts;
  3. Silver cufflinks for a Christmas present;
  4. Tubes of retro sweets;
  5. Sledges for the snow;
  6. Flowers and chocolates for many different occasions;
  7. Various personalised gifts, depending of the recipients’ interests.

There are other things that we do that are not made public. This is
because it’s not going to be part of a process and it’s just an
exceptional way of showing appreciation.

Kindness doesn’t equate to softness or fuzziness. It’s simply looking at
the person as an individual and making sure that we work together as
effectively as possible to achieve our joint objectives. We take as
benevolent a view as possible to deliver that value. If you don’t look at
staff as employees, but more as friends or family members, then it’s a
pretty simple line to draw. It seems to me that, if you can act with your
employees as if they are friends and family, then you aren’t going to go
far wrong on the emotional front; kindness comes as standard. This is
very much a way both of engaging people for the long term and
keeping a competitive advantage going forward, so that your business
becomes much more profitable in the long run and a much more
pleasant place to work.

Harvesting Intelligence

One of the key things you need in a knowledge-based business (and
all businesses are now knowledge-based, to a greater or lesser degree)
is to become an intellectual “growth pole” to which people gravitate.
Basically, you need to be able to offer a reason for people to come to
you as an employee, bringing along with them the right mixture of
intellect and common sense. You, in return, will maximise these for
them. If you do that, people will stay with you for a lifetime, even if
they’re not employed by you. In that lifetime they will add huge
amounts of intellectual value (plus emotional and, ultimately, financial
value), because you’re at one with them on that level.

You don’t even need to employ them, for them to add the value to
you. For example, Marcus Smith was a graduate I took on in the very
early days of Webmart. He’s a fantastic guy. We developed a lot of
what Webmart is now together. We used to have early morning
meetings (EMMs) when we studied one aspect of the business and
then shared it with an eye to improvement. Some ideas were good
and some, in retrospect, spectacularly stupid, but we improved the
business in that way. Even though Marcus left the business many years
ago to live with his now-wife in Australia (she was Australian, her visa
ran out and, in the nicest possible way, Webmart can’t compete with
love!), we still regularly trade together and share information, even
though he’s on the other side of the world.

We’ve found that the more you give out information (or intelligence, as
it is known), the more you get back. People want to share with you as
a partner. Following this logic, the more porous you are as a business
with your information, the more people will give information back to
you – and the more information you have to share gives you a
comparative advantage against your rivals. You become the place
that people want to share information with. As a consequence, you
have a sharper view and understanding of the marketplace and so
gain a greater comparative advantage in that market.

This is completely contrary to the old style, where you used to keep
your knowledge and held it dear and close to you. The more that you
held it and kept it to yourself, the stronger you became both as an
individual (careers were built on this, with your own little fiefdom where
knowledge is power) and as a business, where you had certain IP or
insight that allowed you to command marketplace pre-eminence.
But things are changing. What you tend to find now is that winning
companies are those that engage with the most insightful and
intelligent in their marketplace to deliver a ‘win-win’ for each of them.
Realising that you can’t employ all the best and brightest in your
market segment, you need to get systems and processes in place so
that, when these people ‘touch’ your organisation, they too get
added value from the contact. These processes can take many forms.
But, with a bit of creativity and imagination, there is always a way of
delivering value, even in the most seemingly wasteful of interactions, to
people outside your organisation if you try hard enough.

One good example of this is when we ask printers to tender or quote
for jobs we’ve got. Usually, if you go out to, say, ten printers, there are
going to be nine disappointed ones, yet ten of them have invested the
time and effort to deliver a price to you. In other words, there is a 90
per cent wastage within that process. That isn’t good for them,
because they don’t get paid for it, or for us, as it could have a
detrimental effect on the relationship between us and our suppliers. So
we created a system whereby, for each and every job that a printer
quotes, they get instant, meaningful, specific and accurate market
intelligence back.

This approach has many benefits:

1. They know that every time they submit a price to us, there is going
to be a benefit back to them.
2. We don’t have to process the quotes, as it is done by our
automated systems.
3. It encourages the behaviour we want, because our printers
appreciate the mutual benefits of their interaction with us.

The market intelligence that printers get back isn’t designed so that
they drop their prices next time in dealing with Webmart. Quite the
reverse. By pitching to us, we show them the highest price that we got
back, other printers who have the same capabilities as themselves, the
lowest price we got back, and the average market price. This
information is gold dust: you simply can’t get it objectively anywhere
else in the world.

supplier price graph

A supplier’s view of their prices in relation to others’

They can now use this information, not in dealing with Webmart, but
with all their other customers. They now know where they are
structurally expensive in the market, and perhaps should therefore
move the valuable, expensive sales resources away from trying to get
work of this kind. Conversely, it allows them to know where they have a
structural advantage, so helping them to refocus the target of their
direct sales force to find clients and jobs that match their strengths.

Webmart DP monitoring report

More importantly, it shows them the pricing level they should adopt
with their own customers before they pitch their price – i.e. add margin
onto a job before they pitch it rather than simply add a profit onto their
cost price. In this way, we can provide an exceptional return to them
for the one estimate they did for us. Even more, we help to bring
profitability into the industry rather than out of it – unlike so many
intermediary companies do. It is the worlds only print optimisation tool.

This is a simple example of how you can invert the traditional
relationship, in order to add new value to each other. Inevitably, the
brightest and best suppliers engage more readily, because they can
see the value of this linkage, and look to make the relationship deeper
and stronger. Obviously we have systems to do just that. But the point
is that, by them helping support our business, we support and grow
their profitability. This is a symbiotic relationship, not a parasitic one,
because we harvest the aggregated intelligence of the market to
deliver value both to ourselves and to them. There is always a way to
achieve this, if you think hard enough about it.

In the same way, you can work out ways of capturing unique products
within the marketplace. If you listen to suppliers more carefully as a
partner than you have done before, quite often they’ll bring to your
attention things that will deliver value both today and tomorrow for
your customers, and again giving individual companies a comparative
advantage.

The key point, overall, is that there is limitless opportunity for not
employing people, but still working with the brightest out there, if your
organisation looks to deliver free value back to them in return. The
traditional wisdom is to try to employ the very best you stumble across:
however this is clearly expensive and can generate bad feeling within
your marketplace, because you are typically getting the talent from an
actual or potential partner company, etc.

It’s far better not to employ them, but to align and share their insight by
building a long-term trading relationship with the very few people in
your business segment who are truly influential. Outside our own
company, in our marketplace, for example, I can think of about 50
people out of 100,000 who are truly exceptional. I try to have a good
working relationship with all of them, whilst trying to identify and support
the stars of tomorrow, so that we can find ways for us to work together
productively. In this way, you can have a much wider and stronger
footprint within your marketplace than just your own employees could
ever achieve.

If we take this line of thinking to the ultimate, why employ anybody at
all? In an affiliated network of linked destinies, it could be argued,
there is no necessity to employ people, if you have a perfect alignment
to deliver optimum value. This is an unusual approach in conventional
business, but not so in the burgeoning world of freelancers and
outsourcers. I therefore wonder whether the next big thing to replace
“the company” will be an affiliate network (within the business-tobusiness
environment,) where people will get their intellectual, financial
and emotional return from such a structure in a way that they simply
cannot gain from being employed by one organisation.

I see such a scenario very much as a meritocratic structure where,
using Chatham House Rules, you could meet on a periodical basis to
maximise the individual and collective benefit of going forward
together. Fundamentally, however, in this age of fluid career
structures, fluid organisations and ever-changing marketplaces, this is
perhaps the kind of affiliate network that will really thrive in the next 8-
10 years – more than a company structure that is, in many respects,
inflexible and lacking in the responsivity that you need in today’s
commercial world.

In synopsis, harvesting intelligence is a key skill for any leader. Having a
good working relationship with the movers and shakers within your
sector is, it seems to me, of paramount importance if you want to feel
the way your market is moving and to work collaboratively with people
to gain a maximised return for all. It’s far better to “jaw jaw rather than
war war”, as Winston Churchill once said!

Crowdsource Your Business

One of the key factors of everyday life these days is social media. It’s a
fantastic way of understanding what’s going on in the world outside
your immediate environment, both socially and professionally.

LinkedIn, for example, is a marvellous tool for connecting with people
you haven’t seen for ages, understanding what they’re up to and how
well they’re doing.

It’s this connectivity that gives us another great opportunity to look
afresh at how we engage with people, both inside and outside our
business. Some of the best ideas come from the most unlikely sources.
You can understand better what others are doing: you can be spurred
on to ideas within yourself and to collaborative opportunities for
working with them again.

There have been a number of instances where I’ve got back in
contact with people I hadn’t spoken to or seen for a long time: by
having a casual chat and catch-up with them, the opportunities to
work together on a project just flow. Unlike most forms of old school
networking, where you stand in a room, gawp at each other over
canapés, start the conversation with ‘what are you doing?’, and lob
business cards at each other, this new form of business re-engagement
(or engagement for the first time) is a much more natural and honest
affair – you’ve an environment where you can brainstorm with people.
No matter what industry they’re in, no matter what level of maturity
their business is at, I always find – if not immediately, then in the
medium term – a way of introducing them to somebody who may add
value to them or combine with them to add value to somebody I
know. It’s got to be an 80 per cent strike rate! The nice thing about this
way is that there’s no hard-pressure sell, no non-natural interactions. It’s
just you being yourself, being aware of what other people are doing,
and looking to combine connections or combine products/services, to
add new competitive advantage.

For example, we deal with a lot of people in the grey markets (they’re
probably now over 55 rather than the over-50s that they used to be, as
we all seem to be maturing more slowly these days – or is that only in
my head!?). In talking to one person, not about selling our primary
product, a mailing solution, but just about the opportunities they have
to grow and how they can develop their business, I got a good insight
into the challenges and constraints to growth they have.

About a month later, I was speaking to another customer of ours (a
publisher). The constraint that the first customer had was a solution that
the second customer needed for a service that they offered. In this
case, the issue was fulfilment and dispatch services: the publisher had
their own capability to do this, but it was underutilised, whilst the first
customer needed a better solution to the one they had, in order to
grow their business (but with somebody who understood the nuances
of the grey market). It’s as if serendipity happens all at once these
days: two clients could then become clients of each other. Yes, we
wouldn’t get any direct revenue from this introduction, but indirectly
we get a massive, long-term intellectual and emotional value added
from it.

This sort of thing happens hundreds of time a year. Although it doesn’t
directly add to our financial bottom line, indirectly it does. How? Well,
imagine you’re that customer and a rival of ours offers you a slightly
lower price to try and win the account. The added value we’ve
previously delivered is a massive differentiator between us. If we’ve
helped them grow the top line of their business rather than just be a
supplier to them, then we’re in a much greater ‘partnership’ with them,
not just a supplier. So they’re likely to be more willing to commit to us,
with our price, rather than a rival with a slightly lower price. Such
security of revenue is really important to us as a business (as it is in every
business). Using crowdsourcing techniques is one of the best ways I’ve
found to grow our business.

Clearly, there are many benefits from such networking in terms of
referrals and word-of-mouth recommendation in the business-tobusiness
world this is by far the most effective way of both gaining new
customers and finding new employees. In many respects,
understanding how to use the power of networks is now as important
as reading and writing were a hundred years ago: you can’t get on in
this world without building your networks! Fact. And it isn’t the ‘old
boy’ networks (where you were educated, your background, etc.)
that matter in this more egalitarian/meritocratic networking. What
matters is how much value you can create for others.

As a result, there’s a very real flattening of hierarchy within society. This
greater equality of opportunity is a magnificent step forward to create
a fairer society. It costs nothing to get on LinkedIn, to get on
Facebook, to start blogging, to get your word ‘out there’, to listen to
others to access to world class free education. You can now engage
with others on a much more even basis than you could ever do before.
Introductions through LinkedIn are not based on education, accent or
even visual appearance. They are based on your ideas, the
opportunities you bring, or the way you look to deliver value to others.
How much fairer and opportunity-rich is that than the more traditional
networks of the past!

There really is a ‘first mover’ advantage in all this. If you are the first one
in your marketplace to become the thought leader, you’ll win. So go
and grasp the opportunity. Get hold of these social media: today’s
LinkedIn will be tomorrow’s Twitter, which in turn will be superseded by
other opportunities. It would be inconceivable for you to be in business
now without a mobile phone or email. In a few years’ time, it’ll be
inconceivable for anybody of consequence not to have an extended
network that you can call on to offer solutions to people around you.
Go do it!

“What Goes Around Comes Around”

This is something that has been said to me since my very first job. It
meant, of course, that when somebody did something bad to you,
don’t worry – because, at some stage, it will come back to haunt
them. And indeed it is so.

I remember in the early days of Webmart, there was a Dutch printer
that we worked very closely with. Our main point of contact wanted
to set up a franchise of Webmart over there: the concept of print
management was very new to the Dutch market, and he could see an
opportunity. Being a Northerner and taking him on face value, I was
very open with him. I explained what we did, who we used, why we
used them, and things of that ilk. It was only when one of our other
printers in the Czech Republic, who I had mentioned were fantastic at
a certain product range, rang me up to say that this guy had been in
touch with them, looking to deal direct and not work with Webmart,
that I realised that my trust was misplaced.

In those formative days, before I was the more measured and
balanced person that I am now (!), I went straight for the jugular. I rang
him on his mobile phone and explained what I’d found out. I used a
tirade of Anglo-Saxon phraseology that left him in no doubt about my
disappointment, anger and feeling of betrayal. After three or four
minutes of this, he apologised for what he’d done. (His parents were in
the car and he was on ‘hands free’ at the time.) Needless to say, he
never rang me back to give me any further explanation.

About eight years later, this same person applied, on behalf of the
company he was working for at the time, to be part of our supplier
network. Unbeknown to him, I get copied into all new supplier requests
and, voila!, the moment of justice had arrived. We had to say, simply
because of the fact that we couldn’t trust this individual, that we
couldn’t put them on our network – and this message was to their main
point of contact who happened to be the owner of the business. We
never heard further, but I imagine there were some direct
conversations within their company to find out what happened in the
past to give us such a strong feeling against this individual.

However, flip this on its head. If you give people an opportunity or
hand-up in their early years or when they’re new into an industry, and if
you invest time, money and intelligence with the right kind of people
(i.e. those with the headroom to grow and the right interpersonal
characteristics), then they will look for ways of helping you, all the way
through their career.

One of our suppliers did just this to one of the earlier members of
Webmart. He supplied a certain type of printing and then looked after
her by giving her a free print-run for the local cricket club fundraiser – a
super gesture. Unfortunately, she decided that sales wasn’t for her
and, since we had no slot for her in ‘production’, we parted company.
Later on, she became one of the biggest print-buyers in the UK. And
guess what? Our supplier was her preferred supplier for an awfully long
time.

Even though we’d given her the first opportunity into the industry
(which she then came to love and is still working in now), we got zero
return, because of the fact that we couldn’t accommodate her needs
at that time. Our supplier, however, got millions of pounds of return,
because he’d played the long game better. I learnt an awful lot from
this!

The fact of the matter is this: if you can do as many favours or help as
many people as you can in your working day, irrespective of the
commercial benefit in the short term, you will always win in the long
term. These people will make sure you are a winner.

The rules of this game are:
1. You’ve got to genuinely mean it. Don’t do things because you think
you’re going to get something out of it in the long run. Do it
because you want to. This is the most important rule – you’ve got to
be honest.
2. Add as much value to them as possible, whilst spending as little time
as possible on it for yourself. It’s key to invest in people every day.
But you have also to look after the ‘today’ as well as the
‘tomorrow’. So try to be as time-effective as possible in all you do.
3. Get a great, extended network of friends. Quite often, it’s by linking
someone with someone else that you can deliver the value to them.
Your network allows you to do good more effectively, because you
can call on people to help you to deliver value. So, this person
gains something (a new contact) as well as the person you’re trying
to help and support. A classic win-win-win!

In the people-and-knowledge-based world that we live in, where
getting the right people into your network and working with them over
a long period of time is a key arbiter of success, you can’t afford not to
try to help people, wherever possible. Not only is it greater altruism, but
it’s also greater selfishness at the same time in a way, because you’ll
achieve what you could never achieve alone. So always look for ways
of engaging with the right kind of people. Typically, they are in roles
where they are underutilised or they’re young and intelligent. They
may be outside your industry, but are interested in finding out more.
Finding people with the right attitude and mental headroom is more
important than anything else. So, if you find these people, work with
them and keep in touch with them. You will both benefit from the
experience, believe me.

If you are fortunate enough to employ people with these kinds of
characteristics, then do yourself a favour: over-compensate them and
over-support them in the early stages of their career, to get a lifetime of
value. A few thousand pounds/dollars in the early part of the career is
worth hundreds of thousands later on in their career. The nub of all this
is that you will have recognised and helped them to achieve their
goals in life before everyone else did. This is a priceless benefit. And
how much nicer it is to work with people who have that kind of mental
bond or emotional tie with you than people you endure or feel
obligated to work with. Not only do they win, but you win as well (as in
all things). The extra investment in money pays for itself time and time
again, so your business wins on top of that.

Fear-free Future

One of the things that generally permeates our society these days is
fear. It isn’t the same fear that there used to be – of the Cold War, the
nuclear holocaust or the bubonic plague, and being wiped out. And it
isn’t even the same fear as that of cancer (which is like a modern
plague that we feel relatively helpless to prevent, but just hope that
researchers come up with a solution in time, so that, if we get it, we’ll
survive). No, this all pervasive fear is workplace fear.

It is the fear that fills your everyday life, because globalisation allows
somebody in a far-flung place to be more cost-effective in doing your
job than you could ever be. It’s the fear of the unknown – that wellknown
brands with a long heritage can seemingly overnight go into
administration, throwing your pension and long-term career prospects
into turmoil. It’s the fear that, despite all the legislation to protect jobs
and people, it actually doesn’t take an awful lot for your world to be
turned upside down by redundancy.

On an individual basis, this fear can be all-pervasive. Although it’s not
usually in the front of your mind, it’s a kind of nagging worry that is
always there – the world seems to be changing ever faster and the old
certainties are not certain anymore. Pension-values are going to be a
fraction of the past; homeownership is going to be for the fortunate
few; marriage and children are expensive luxuries for many… yet all
these were the facts and expectations of life not many years ago.

I think the problem with this uncertainty and fear is that it makes you
more conservative (with a small ‘c’) and more risk-averse. It’s a
natural, human reaction. Whereas this reaction may be laudable in
certain organisations and societies, it’s exactly the wrong one, in the
fast-evolving marketplace and world that we live in, for a company in
the developed world to have as its corporate psyche.

No, we need to be more risk-tolerant, more failure-tolerant and more
experimental, if we are going to take advantage of the new
opportunities that are out there and turn them into commercial
products and success. It’s only by doing this that we will be able to
offer our employees a secure and long-term future. Ironically, it’s a
lack of this secure, long-term future that is stopping people doing the
experimenting and risk-taking that we need to create it. It’s a bit of a
Catch-22 situation.

In Webmart, we’ve tried to create a linked destiny: not only today’s
remuneration, but also tomorrow’s remuneration, is based on achieving
certain objectives. We call it the SEXi-scheme (the Senior Executive
Incentive scheme). Through this scheme we redistribute surplus profits
from the business to staff (see Appendix 1). As you can see from the
scheme, the aim is to match-reward exceptional profits with the
remuneration to the team. We use capitalism to make the money and
then Marxist principles to redistribute any surplus current-trading money.
In addition to this, we want to build long-term security and a profitable
future. So we need to develop new product lines and new markets. To
do this needs a lot of out-of-the-box thinking. There’s also a high
degree of uncertainty in the financial return from it. This uncertainty is
driven by the fact that nobody has done what we’re trying to do (a
double-edged sword). But, if you align the individual’s benefit to the
achievement of these more risky, longer-term solutions, then you’ve a
fair chance of showing them the way to reduce their fear of the future.
This is the objective of the second part of the SEXi-scheme.

To break the Catch-22, we wanted to give everyone a clear vision of
the strategic extensions and revenue streams that we can build around
our core offering. This strategy makes it less risky than going into an
entirely speculative marketplace. It also gives staff an immediate
payback when it becomes successful, but they can defer the payback
(in a pension scheme) until they need it in their retirement.

This is our way of reducing some of the fear about the future. It’s also
emphasising the long-term prospects for our Webmarteers. Only time
will tell whether it works or not, based on the success of the new
products we bring out and the money that is vested in the pension
scheme. For me, you can’t have people acting in an entrepreneurial
way, unless they understand the risk return, the fear of failure or the
euphoria of success. We intend to deliver as close as possible to a
fear-free future as we can through innovative and better product lines.
If you achieve this, then you have your business and the individuals
within it aligned for the long term. They’ll build a much more
sustainable business, and a much easier one to lead, than any I can
think of. This is all very much work in progress at Webmart: the
framework is there, but we now at Webmart need to be able to do it
all.

So, have a think about how you can reduce fear in your workplace -
amongst your colleagues, your affiliate network or the freelancers that
you work with to achieve the same. The rewards of doing so are a
much greater degree of innovation and market-alignment. In turn,
they’ll bring a much greater chance of success, which will provide the
benefits that everyone wants in life – a good return for their labour, not
just now, but for themselves and their families in the long run too.

The Business Infinity Curve

In all the collaborative ventures that have worked out well for the
business, we’ve noticed that there are two sides to every story. It’s
obviously very important to look at the success you have as a business,
because it gives a feel-good factor as well as a steer for the future – to
emulate the success in other scenarios. This kind of conventional
management thinking has its benchmarking, studies, KPIs, etc. So do
we.

There is, however, a corollary to this – that for every success there is a
much greater database of failure. This failure-analysis gives you equal
insight. Most people, however, don’t like looking at failures – unless you
are in a business like running an airline, where this kind of analysis is a
matter of life and death. Yet failure-analysis gives you a vital insight
into all the ways that your business can improve. It can show things like
trends, where you can strengthen your service or how to give greater
value. Every time you identify and improve one of these aspects, you
can introduce that benefit to a similar type of interaction. Success is
usually more difficult to scale up, but eliminating failure is pretty
straightforward.

The insight gained from assessing both successes and failures has
another two-sided benefit. It helps your clients, but it will also deliver
benefit to your suppliers as well as yourself. This is where the
visualisation of an infinity curve comes in quite handy. Typically, you
are the crossover point between your clients’ and your suppliers’
‘value-net’ (the sphere of influence you have on both sides). If you
can identify a benefit on one side of the value-net, there is usually an
equal and opposite benefit on the other side. You just have to have
an enquiring mind, a bit of creativity and laterality, and a desire to find
it.

If you can do this, you will deliver two benefits to the key stakeholders
of your business (your clients and suppliers), but also one for yourself -
because you have to be involved for the value to be realised. In other
words, you get three wins for one improvement. But not only that.
You’ve usually found a much better solution that you can also use in
interactions with all your customers and suppliers, rather than just being
a one-hit wonder.

If you take this to its logical conclusion, what I’ve described is actually
not only two-dimensional in its approach (looking at both sides of the
curve), but is also three-dimensional. This is because your suppliers can
also become your customers (because of the openness of the
relationship) and your customers can become suppliers. So there’s
another crossover point where you can create another three-way win -
and you double the benefit yet again.

Let me give you an example, as it’s quite a difficult concept to grasp.
In my earlier example about the client needing fulfilment services, we
introduced two clients to each other. One of them was acting as
though they were a supplier (of mailing services). In return, they
delivered benefit to the other customer as well as themselves. When
the customer used this service, it allowed them both to trade at a
higher level, since they were both clients and suppliers at the same
time. It is this circular motion, repeated many times, of value going
from one to the other that gives you a global network of value
creation, because you look at both sides of the transaction. If you look
at only one side (typically the client side), then you are so missing a
trick to create sustainable value. It is this two-sided business model that
most world-class companies engage in, to create both better products
for themselves and a better ecosystem for their employees, suppliers
and clients.

Such working together gives a maximised emotional, intellectual and
financial return over the long-term. It’s a no-brainer, once you get your
head around it. It does, however, take a mental leap to realise that
suppliers are every bit as important as – and, arguably, more important
than – any customer to the long-term survival of your business and the
people who work for it. But, as you would imagine, looking both ways
at the same time is a company competence that needs to develop
over time, as it is counterintuitive, not to mention physically impossible!

A Synopsis:

In a word, trust. Trust underpins everything. The theme that runs
through the previous chapters of ways to create comparative
advantage and of ways to differentiate yourself in a cut-throat world of
hyper-competition for any product or service is the need for trust.
People trust brands. That’s why, when you buy a Toyota, you trust it
isn’t going to let you down. If you are into motorbikes and buy a
Ducati, it’s going to be slightly quirky, but it will be exciting and fun.
People like to trust, but don’t give it easily. As a leader, people need to
trust you. It’s the most important trait – trust you to be honest, whether
the going is good or bad; trust you that, if you decide to keep
something from them, it’s for the greater good; and trust that, if you say
something, you will actually keep to it.

As a supplier, you need to trust that your customer will pay you on time;
will work with you when there are problems; and will be honest and
open about the competitive world that we live in. As a client, you
want to be able to trust that your suppliers have your best interests at
heart. This means, for example, not making exceptional profits out of
you, trusting that they will bring to your attention any areas of
improvement or any product that can help take your business forward,
and trusting that, whenever you don’t hear from them, what you
expect to happen is happening.

It’s this dependability and reliability that people value above all other
traits. Because, if they know who you are, what you stand for and can
trust you to deliver, then that’s the deepest form of business relationship
you could reasonably expect. It takes a long time to build up such trust
- and a pretty short time to lose it. That’s why consistency, reliability
and being tethered to a moral code are vital. They guarantee that, in
any given circumstance, even in one that hasn’t been discussed
before or explicitly stated as a requirement, they can depend on you
to deliver or discuss with you if things are not going to be delivered on
time.

If you can weave a network of people that trust one another and can
share information for the greater good, then you’ve a world-class
opportunity not only to make the business you’re
involved in better, but also the whole ecosystem around you better.
And best wins. 90% of the time.

Surely, on this basis, it’s got to be worth giving it your very best shot?
=========================================================
© Simon Biltcliffe 2012 – for what it’s worth

Appendix 1 – The SEXiScheme

Appendix 2 – an Extrospective:

How this could work, using the Printing Industry as an example
When applying the principles outlined in the previous chapters within
your business, you can see that there are some key trends running
throughout:
1. Maximise the intellectual return of everybody who is involved. This
means finding the people who have the most appropriate ability
(usually, but not exclusively, the brightest equals the best) and then
temper that with a healthy dose of common sense (we all know
people who are intellectually bright, but have no common sense at
all!).
2. Take the emotional return to the maximum. Usually in a business this
is through the use of incentives, remuneration, status, job title, etc.
But it’s also vital that people feel committed to the company’s
ideals and style. Follow Maslow rather than Mammon.
3. Ensure there is appropriate financial return, usually based on length
of value creation within the business; (NOT the same as length of
time) seniority, expertise and revenue creation.
4. Trust.
5. Attitudes.

If you apply these within your business and believe them to be true,
why don’t you apply them outside your business, delivering the same
value to people outside the business? This is the approach we take in
our role as a print-services agency within the print industry.

Characteristics of the print industry:

The print industry is a very traditional industry. It has been around for
five hundred years and, like all established industries, is going through a
period of inversion and massive change. Historically, knowledge was
power, and high degrees of capital investment gave high degrees of
capital return.

Generally, it was a zero-sum game: if one person won, then the other
person had to lose, so win/lose was the only way to survive. This
produced certain marketplace characteristics. People drove down
other people’s prices to an unsustainable level, even if they had no
intention of winning the job to weaken their competitors for the next
time they battled. Usually, nobody shared information within their
business, let alone across businesses in the same competitive category.
There were very few collaborative ventures with customers or key
suppliers. Headhunting was endemic, as it was the only way of finding
good people outside your company with relative experience.

Generally, you didn’t share any information with other companies who
were in a similar situation to yourself.

The biggest cost in the industry was manufacturing capacity that
wasn’t used. Rather like an aircraft taking off with unused seats, the
printing industry typically had 20-40% underutilised capacity.
Obviously, like any time-based capacity, when it’s gone, it’s gone. Yet
you had all the fixed costs still to pay, with zero revenue coming in.
Underused capacity is a huge cost to the printing industry and to its
very survival and health.

On top of all that, although print used to be the least costly way of
communicating with a mass market, along came the internet. This has
changed everything. Now print is very much a premium end product,
where its cost is very high relative to other digital media. This has led to
a lot of marginal content disappearing, because it could be delivered
more effectively through the internet (think, for example, of directories
and newspapers).

Given all these concerns – plus the worry of sustainability, increased
energy costs, etc. – it’s not surprising that this is an industry in a state of
flux and change. Nor is it attracting as many high-grade people into it,
because of the lack of commercial return.

Because we worked in this industry, we saw there was an opportunity
to look at things a different way. By offering a free service to suppliers,
in return for information about their underutilised capacity, we could
come up with a win-win solution: our customers got a better price and
printers got better capacity fill and therefore better profits. Clearly,
though, it has needed trust with our suppliers to achieve this – and the
right technology to scale it.

And so, in 1996, we started out.

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